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+Financial and Non-financial Performance Indicators
+28.6
++0.25
+15.8
+14.0
++1.85
+3.3
+3.5
+-0.25
+43
+43
+2.0
+2.6
+-0.65
+Earnings per share6, 7 (€)
+Equity per share 6, 7 (€)
+28.8
+Dividend per share³ (€)
+- TRIF (E.ON employees)
+- Average turnover rate (%)
+-0.85
+7.4
+7.5
+-0.15
+5.4
+5.5
+-0.15
+609
+1,031
+-41
+58,503
+61,327
+-5
+- Percentage of female employees
+- Percentage of female executives and senior managers
+- Average age
+9.2
+Dividend payout
+¹Adjusted for discontinued operations.
+6Attributable to shareholders of E.ON SE.
+7Based on shares outstanding.
+8For the respective financial year; the 2014 figure represents management's dividend proposal.
+Contents
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+16
+18
+19
+22
+5Change in percentage points.
+Market capitalization (€ in billions)
+"Ratio of economic net debt and EBITDA.
++7
+2Adjusted for extraordinary effects (see Glossary).
+3 Change in absolute terms.
+-1.64
+1.10
+12.72
+17.68
+-28
+0.50
+0.60
+-17
+966
+1,145
+-16
+27.4
+25.6
+ལའང
+8.5
+-5
+132,330
+1,219.3
+-5
+Sales
+111,556
+119,688
+-7
+EBITDA²
+8,337
+9,191
+-9
+EBIT2
+4,664
+5,624
+-17
+Net loss/Net income
+1,161.0
+-3,130
+Gas sales (billion kWh)
+696.9
+215.2
+245.2
+-12
+thereof renewables (billion kWh)
+29.3
+30.8
+-5
+Carbon emissions from power and heat production (million metric tons)
+Specific carbon emissions (million metric tons/MWh)
+95.7
+114.3
+-16
+0.43
+0.45
+-4
+735.9
++6
+2,459
+Net loss/Net income attributable to shareholders of E.ON SE
+-3,160
+Value added
+Debt factor4
+Equity
+Total assets
+ROACE (%)
+Pretax cost of capital (%)
+After-tax cost of capital (%)
+Employees (at year-end)
+4.0
+3.5
++0.53
+26,713
+36,638
+-27
+125,690
++4
+32,218
+33,394
+Economic net debt (at year-end)
+2,091
+Underlying net income²
+1,612
+2,126
+-24
+Investments
+4,633
+22
+7,992
+Expenditures on technology and innovation (including software)
+30
+42
+-29
+Cash provided by operating activities of continuing operations
+6,253
+6,260
+-42
+2 CEO Letter
+4 Report of the Supervisory Board
+10 E.ON Stock
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+maintained contact with the members of the Supervisory
+Board outside of board meetings. The Supervisory Board was
+therefore continually informed about the current operating
+performance of the major Group companies, significant busi-
+ness transactions, the development of key financial figures,
+and relevant decisions under consideration.
+New Corporate Strategy
+Throughout 2014, the Supervisory Board and the Board of
+Management held outcome-neutral discussions about E.ON SE's
+new corporate strategy. During these discussions, the Board
+of Management described, in a coherent and convincing
+manner, the fundamental ways in which energy markets have
+changed. These changes include the collapse of legacy energy
+business areas and the rapid emergence of new technologies
+and increasingly individual customer expectations. The future
+energy world and its success factors will be considerably dif-
+ferent from the energy world as we have known it until now.
+The conventional energy world meets the need for a stable,
+reliable energy supply. Only conventional assets can secure
+this energy supply, which is true for both the power and gas
+supply and presupposes access to international energy markets.
+Alongside it a new energy world is emerging, one that is
+characterized by the growth of renewables and distributed-
+generation technologies and by customers' increasing desire
+for innovative, individually tailored energy solutions. It also
+requires smart grids that keep pace with the digitalization of
+the energy supply.
+Both energy worlds will coexist for decades to come. But they
+call for very different business approaches. Their respective
+success drivers differ as well. We believe that E.ON's current
+broad-based business model will no longer be able to address
+these new challenges. We therefore intend for E.ON's busi-
+nesses to be divided according to whether they fit with the
+new or the conventional energy world.
+E.ON SE will focus on the new energy world centering around
+customers. It will have three core businesses: renewables,
+energy networks, and customer solutions. These businesses
+fit together and reinforce each other, creating a business
+portfolio with stable earnings and strong growth potential.
+With a portfolio that is to consist of conventional power
+generation, global energy trading, and exploration and pro-
+duction, the New Company will focus on ensuring supply
+security, which will be necessary for a long time to come, and
+access to global markets for energy products. This will put
+it in an excellent position to lead the necessary restructuring
+of power generation in Europe and to offer attractive services
+for the system needs of the future.
+In the months ahead, the Board of Management will lay
+the foundation for the New Company's independence and,
+subsequently, its public listing. Both E.ON SE and the New
+Company will have solid financing, offer secure jobs, and have
+prospects for creating new jobs in the future.
+In keeping with E.ON's long tradition of social partnership,
+management will work closely with employee representatives
+to work out the details of the new setup and its implemen-
+tation. The purpose of the new setup is to continue E.ON's
+current businesses in two companies that are viable for the
+future, thereby improving the conditions for securing jobs.
+The spinoff will not be accompanied by a job-cutting program.
+E.ON's proven tradition of codetermination will continue,
+including for employees outside Germany.
+5
+6
+Report of the Supervisory Board
+At this time we anticipate that the spinoff, after being
+approved by the E.ON Shareholders Meeting, will be imple-
+mented in 2016.
+Combined Group Management Report
+Key Topics of the Supervisory Board's Discussions
+Strategy and Objectives
+Report of the Supervisory Board
+кори
+Dr. Johannes Teyssen
+3
+4
+Report of the Supervisory Board
+Dear Shareholder,
+2014 was a groundbreaking year for E.ON. In late November the
+Supervisory Board unanimously approved E.ON's new corpo-
+rate strategy. A significant share of the Supervisory Board's
+work last year revolved around this decision.
+E.ON intends to spin off some of its current businesses into
+a new company. Going forward, E.ON SE will focus on renew-
+ables, energy networks, and customer solutions. It intends
+to combine its conventional generation, global energy trading,
+and exploration and production businesses into a new, inde-
+pendent company and spin off a majority stake in it to you,
+our shareholders.
+This new setup is part of the new corporate strategy, which
+was the subject of thorough discussions between the E.ON SE
+Supervisory Board and the Board of Management. The new
+strategy is the necessary response to the massive changes
+taking place in the energy world and dividing it into two worlds:
+a conventional and a new energy world, to which the Company
+intends to respond in two separate entities.
+In 2014 the energy industry again faced a generally difficult
+situation in energy markets in Germany and Europe. The
+causes are structural and regulatory in nature, at the European
+level and particularly in Germany. Urgently necessary policy
+measures failed to materialize or were implemented in a way
+that was insufficient to bring about a direct and lasting
+improvement of the conditions on the energy market. This once
+again had a particularly adverse impact on conventional gen-
+eration, which is vital for ensuring Germany's supply security.
+In the 2014 financial year the Supervisory Board again care-
+fully performed all its duties and obligations under law, the
+Company's Articles of Association, and its own policies and
+procedures. It thoroughly examined the Company's situation
+and discussed in depth the consequences of its continually
+changing energy-policy and economic environment.
+We advised the Board of Management regularly about the
+Company's management and continually monitored the Board
+of Management's activities, assuring ourselves that the
+Company's management was legal, purposeful, and orderly.
+We were closely involved in all business transactions of key
+importance to the Company and discussed these transactions
+thoroughly based on the Board of Management's reports.
+At the Supervisory Board's four regular meetings in the 2014
+financial year, we addressed in depth all issues relevant to
+the Company, including in conjunction with the new corporate
+strategy. All Supervisory Board members attended all meetings
+with the exception of one member who was unable to attend
+one meeting. A table showing attendance by member is on
+page 78 of this report.
+The Board of Management regularly provided us with timely
+and comprehensive information in both written and oral form.
+At the meetings of the full Supervisory Board and its commit-
+tees, we had sufficient opportunity to actively discuss the
+Board of Management's reports, motions, and proposed reso-
+lutions. We voted on such matters when it was required by
+law, the Company's Articles of Association, or the Supervisory
+Board's policies and procedures. The Supervisory Board
+approved the resolutions proposed by the Board of Manage-
+ment after thoroughly examining and discussing them.
+Furthermore, there was a regular exchange of information
+between the Chairman of the Supervisory Board and the
+Chairman of the Board of Management throughout the entire
+financial year. In the case of particularly important issues,
+the Chairman of the Supervisory Board was kept informed at
+all times. The Chairman of the Supervisory Board likewise
+CEO Letter
+E.ON Stock
+Besides the above-described discussion of E.ON's new corpo-
+rate strategy, we addressed the following key topics. We dis-
+cussed in detail the business situation of E.ON Group companies
+in relation to developments in national and international
+energy markets, about which we were continually informed by
+the Board of Management. The Supervisory Board discussed
+E.ON SE's and the E.ON Group's current asset, financial, and
+earnings situation, workforce developments, and earnings
+opportunities and risks. In addition, we and the Board of Man-
+agement thoroughly discussed the E.ON Group's medium-term
+plan for 2015-2017.
+Overarching topics of our discussions were:
+•
+The targets for the Supervisory Board's composition with
+regard to Item 5.4.1 of the German Corporate Governance
+Code and the status of their achievement are described in
+the Corporate Governance Report on pages 78 and 79.
+An overview of Supervisory Board members' attendance at
+meetings of the Supervisory Board and its committees is on
+page 78.
+Committee Work
+To fulfill its duties carefully and efficiently, the Supervisory
+Board has created the committees described in detail below.
+Information about the committees' composition and respon-
+sibilities is in the Corporate Governance Report on pages 79
+and 80. Within the scope permissible by law, the Supervisory
+Board has transferred to the committees the authority to
+pass resolutions on certain matters. Committee chairpersons
+reported the agenda and results of their respective commit-
+tee's meetings to the full Supervisory Board on a regular
+basis, typically at the Supervisory Board meeting subsequent
+to their committee meeting.
+The Executive Committee met five times. Attendance was
+complete at all meetings. In particular, this committee prepared
+the meetings of the full Supervisory Board. Furthermore, it
+discussed significant matters relating to Board of Management
+compensation and did comprehensive preparatory work for the
+Supervisory Board's resolutions on these matters. In addition, it
+prepared the Supervisory Board's resolutions to determine
+that the Board of Management met its targets for 2013 and to
+set the targets for 2014. It also conducted an interim evaluation
+of target implementation during the course of the year.
+The Finance and Investment Committee met five times.
+Attendance was complete at all meetings except one, which
+one member was unable to attend. The matters addressed
+by the committee included the Board of Management's report
+on the completion of Skarv E&P project in the North Sea,
+current developments at E.ON's joint ventures in Turkey and
+in particular in Brazil, the sale of stakes in two wind farms
+built by E.ON in the United States, the planned sale of activities
+7
+8
+Report of the Supervisory Board
+in Spain and Italy, and the continuation of the Datteln 4 new-
+build project. In particular, at its meetings the committee pre-
+pared the Supervisory Board's resolutions or, for matters on
+which it had the authority, made the decision itself. Further-
+more, it discussed the medium-term plan for 2015-2017 and
+prepared the Supervisory Board's resolutions on this matter.
+The Audit and Risk Committee met seven times. Attendance
+was complete at all meetings except one, which one member
+was unable to attend. With due attention to the Independent
+Auditor's Report and in discussions with the independent
+auditor, the committee devoted particular attention to the 2013
+Financial Statements of E.ON SE (prepared in accordance with
+the German Commercial Code) and the E.ON Group's 2013
+Consolidated Financial Statements and the 2014 Interim Reports
+of E.ON SE (prepared in accordance with International Financial
+Reporting Standards, or "IFRS"). The committee discussed
+the recommendation for selecting an independent auditor for
+the 2014 financial year and assigned the tasks for the auditing
+services, established the audit priorities, determined the
+independent auditor's compensation, and verified the auditor's
+qualifications and independence in line with the recommen-
+dations of the German Corporate Governance Code. The com-
+mittee assured itself that the independent auditor has no
+conflicts of interest. Topics of particularly detailed discussions
+included issues relating to accounting, the internal control
+system, and risk management. In addition, the committee
+thoroughly discussed the Combined Group Management
+Report and the proposal for profit appropriation and prepared
+the relevant recommendations for the Supervisory Board and
+reported to the Supervisory Board. Furthermore, on a regular
+basis the committee discussed in detail the progress of sig-
+nificant investment projects. The Audit and Risk Committee
+also discussed in detail market conditions, the long-term
+changes in markets, and the resulting consequences for the
+underlying value of E.ON's activities. It also reviewed the
+results of impairment tests and the necessary impairment
+charges. Other focus areas included an examination of E.ON's
+risk situation, its risk-bearing capacity, and the quality control
+of its risk-management system. This examination was based
+on consultations with the independent auditor and, among
+other things, reports from the Company's risk committee. On
+the basis of the quarterly regular risk reports, the Audit and
+Risk Committee noted that no risks were identified that might
+jeopardize the existence of the Company or individual seg-
+ments. The committee also discussed the work done by internal
+audit including the audits conducted in 2014 as well as the
+audit plan and audit priorities for 2015. Furthermore, the
+committee discussed the compliance report and E.ON's com-
+pliance system, as well as other issues related to auditing. The
+Board of Management also reported on ongoing proceedings
+and on legal and regulatory risks for the E.ON Group's business.
+These included the status of the constitutional complaint
+filed against Germany's Nuclear Phaseout Law as well as the
+lawsuits filed against the nuclear-fuel tax and the nuclear
+moratorium imposed in March 2011, legal proceedings relating
+to the Site Selection Act, the status of the Federal Court of
+Justice's review of price-adjustment clauses, and the delays in
+the upgrading of Oskarshamn 2 nuclear power station in
+Sweden. The committee regularly dealt with the development
+of the Company's rating and its current status. Other topics
+included current developments at E.ON's joint ventures in Turkey
+and Brazil (in the case of the latter, in conjunction with impair-
+ment charges), the Company's tax situation, reportable inci-
+dents at the E.ON Group, and insurance issues.
+The Nomination Committee did not meet in 2014 because
+no elections of shareholder representatives to the E.ON SE
+Supervisory Board were pending.
+Examination and Approval of the Financial State-
+ments, Approval of the Consolidated Financial
+Statements, Proposal for Profit Appropriation for
+the Year Ended December 31, 2014
+PricewaterhouseCoopers Aktiengesellschaft, Wirtschafts-
+prüfungsgesellschaft, Düsseldorf, the independent auditor
+chosen by the Annual Shareholders Meeting and appointed
+by the Supervisory Board, audited and submitted an unquali-
+fied opinion on the Financial Statements of E.ON SE and
+the Combined Group Management Report for the year ended
+December 31, 2014. The Consolidated Financial Statements
+prepared in accordance with IFRS exempt E.ON SE from the
+requirement to publish Consolidated Financial Statements in
+accordance with German law.
+Furthermore, education and training sessions on selected
+issues were conducted for Supervisory Board members in 2014.
+The Supervisory Board is aware of no indications of conflicts
+of interest involving members of the Board of Management
+or the Supervisory Board.
+In the annual declaration of compliance issued at the end of
+the year, we and the Board of Management declared that
+E.ON is in full compliance with the recommendations of the
+"Government Commission German Corporate Governance
+Code" dated June 24, 2014, published by the Federal Ministry
+of Justice in the official section of the Federal Gazette
+(Bundesanzeiger). Furthermore, we declared that E.ON was
+in full compliance with the recommendations of the "Govern-
+ment Commission German Corporate Governance Code" dated
+May 13, 2013, published by the Federal Ministry of Justice in
+the official section of the Federal Gazette (Bundesanzeiger),
+since the last annual declaration on December 16, 2013. The
+current version of the declaration of compliance is in the
+Corporate Governance Report on page 75; the current as well
+as earlier versions are continuously available to the public on
+the Company's webpage at www.eon.com.
+In the 2014 financial year we again had intensive discussions
+about the implementation of the recommendations of the
+German Corporate Governance Code.
+current developments in European and German energy
+policy in the context of the upheavals on global energy
+markets
+the political situation in Russia and Ukraine and its
+implications for supply security, as well as macroeconomic
+developments in Europe
+the development of commodity prices and currencies
+relevant for E.ON
+the global economy and, in particular, Europe's continued
+sluggish economy in the wake of the sovereign debt crisis
+along with their respective consequences for E.ON's various
+business areas, including the impairment charges that were
+necessary in this regard.
+The Supervisory Board was provided information on a regular
+basis about the Company's health, (occupational) safety, and
+environmental performance, in particular the development of
+key accident indicators. We thoroughly discussed current
+developments in the business activities of the global and
+regional units as well as in Russia and Turkey. At all meetings,
+the Supervisory Board—as well as the relevant committees―
+addressed the difficult business situation of ENEVA, E.ON'S
+joint venture in Brazil, and its related activities. In addition, the
+Board of Management provided us with detailed information
+about the status of construction projects, including the
+upgrading of Oskarshamn 2 nuclear power station in Sweden
+and the progress of several new-build projects, most notably
+Datteln 4 in Germany, Maasvlakte 3 in the Netherlands, and
+Berezovskaya 3 in Russia. The Board of Management also
+reported on a number of legal matters, such as the proceedings
+relating to the provisions of Germany's Site Selection Act,
+the damage suit filed against the nuclear energy moratorium
+imposed in March 2011, and the legal proceedings relating
+to the nuclear-fuel tax. In addition, the Supervisory Board dis-
+cussed the current status of the constitutional complaint
+against the thirteenth amendment of Germany's Atomic Energy
+Act of 2011 ("Nuclear Phaseout Law"). It also discussed and,
+where required, approved the divestments in Italy and Spain
+and transactions under the Company's build-and-sell strategy
+for renewable assets. In addition, the Board of Management
+reported on necessary impairment charges. We thoroughly
+reviewed the status of the E.ON 2.0 program including the
+establishment of Business Service Centers and the Working
+Capital Excellence project whose purpose is to reduce working
+capital. In conjunction with proposed resolutions for the 2014
+Annual Shareholders Meeting, the Supervisory Board approved,
+among other things, the offer of a scrip dividend. Finally, the
+Board of Management provided information about the scope
+of E.ON's use of derivative financial instruments and how the
+regulation of these instruments affects E.ON's business. We
+also discussed E.ON's rating situation with the Board of Man-
+agement on a regular basis.
+Best wishes,
+We thoroughly discussed the activity reports submitted by
+the Supervisory Board's committees.
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Corporate Governance
+CEO Letter
+Owned generation (billion kWh)
+The current economic and policy environment presents a challenge we're not ignoring. Significant movements in the rates of
+some currencies, declining oil prices, and continued low interest rates in Europe are having an adverse impact on some com-
+ponents of our earnings. And no one can say with certainty how long these trends will last. We're also aware that transforming
+E.ON this year and next year presents us with an enormous task and a lot of work. We're not waiting for better times. We're
+meeting our challenges head-on. Our clear objective is to ensure that both companies—as well as their employees and you,
+our shareholders-have good prospects for the future and can take advantage of new opportunities.
+While plotting our course for the future we didn't lose sight of our operating business. Despite a difficult environment in many
+of our markets and despite the sharp drop in oil prices in the second half of the year, we posted generally solid results and
+were able to achieve our earnings targets. Our EBITDA of roughly €8.3 billion and underlying net income of €1.6 billion were in
+line with our expectations. In 2014 we made progress in a number of areas from an operational perspective as well, enabling
+us to lay a good foundation for the future. For example, we continued our positive trend by further increasing our customer
+base in Germany, where we now have about 60,000 more residential customers than we did a year ago. Moreover, our systematic
+surveys show that over that past two years our customer satisfaction rate has risen by an average of 22 percent across our
+markets in Europe. These are important achievements. Because we know that satisfied customers who recommend us to their
+friends and acquaintances are the foundation of our business.
+E.ON SE's Earnings, Financial, and Asset Situation
+- ROACE and Value Added
+48
+- Corporate Sustainability
+51
+- Employees
+56 Subsequent Events Report
+56 Forecast Report
+60 Risk Report
+69 Opportunity Report
+70 Internal Control System for the Accounting Process
+72 Disclosures Regarding Takeovers
+75 Corporate Governance Report
+75
+81
+Asset Situation
+Corporate Governance Declaration
+47
+46
+12 Strategy and Objectives
+16 Combined Group Management Report
+16 Corporate Profile
+Business Model
+Management System
+Technology and Innovation
+Business Report
+Macroeconomic and Industry Environment
+28
+Business Performance
+33
+Earnings Situation
+41
+Financial Situation
+45
+47
+Compensation Report
+96 Consolidated Financial Statements
+96 Independent Auditor's Report
+Dear Shareholders,
+Last November 30 the E.ON Supervisory Board approved the Board of Management's proposal for a new corporate strategy.
+This strategy is founded on our assessment that over the past few years two energy worlds have emerged: a conventional and
+a new energy world. They're not separate. On the contrary, they depend on one another. But they place completely different
+demands on energy companies. The new energy world is about customer orientation, efficient and increasingly smart grids,
+renewables, distributed generation, and technical innovations. The conventional energy world, by contrast, requires expertise
+and cost efficiency in conventional power stations and global energy trading.
+We're determined to do our best in both energy worlds by creating two companies that will focus on meeting their respective
+challenges. The future E.ON will strive to be a leading provider of innovative energy solutions for customers. Alongside it
+we'll spin off a New Company that will play a leading role in shaping the conventional power and gas businesses. Our company
+has-to an outstanding degree—the capabilities and market access needed in both worlds.
+The new energy world is characterized by speed, agility, digitalization, technical innovations, and increasingly individual cus-
+tomer expectations. This world is just beginning to emerge. It will become more dynamic and diverse than we can imagine
+today. It will ask a lot of companies and their employees and it will grow rapidly. Going forward, E.ON wants to offer the kind
+of superior energy products and services that will make us the partner of choice for municipal, public, industrial, commercial,
+and residential customers. We also intend to operate technologically advanced smart distribution networks that will support
+grid-enabled energy products that make customers' lives easier. And our success at developing and delivering renewables
+projects has already given us an advantage over many competitors, an advantage we intend to systematically extend in our
+target regions in Europe and elsewhere.
+But tomorrow's energy world will still need a stable and secure supply as well as access to global markets for commodities and
+energy products. The New Company will play a key role in ensuring supply security and in providing backup for the transfor-
+mation of energy systems in Europe. With more than 50 GW of installed capacity, the New Company will be a leading power
+producer in Europe and Russia and also one of the largest operators of technologically advanced gas-fired power plants. A strong
+natural gas portfolio-which encompasses the exploration and production business, gas transport pipelines to Europe, long-
+term gas procurement contracts, and substantial storage capacity in Germany and other countries—will make the New Company
+one of the biggest players in the natural gas business as well. It's a matter of self-interest for European countries whose
+economies are based on value-adding industries to ensure that these kinds of structures and assets will continue to be able
+to serve as a reliable foundation for a modern energy supply system.
+Two energy worlds, two companies. What's obvious on closer examination actually surprised a lot of people when we announced
+it at the end of last year. But it also met with a generally positive response. We were praised for our "bold action" and our
+"revolutionary new business model." Some see us as pioneers. We intend to live up to this praise. This year we'll make the prepa-
+rations to spin off the New Company, which, just like the future E.ON, will be publicly listed. The new E.ON will focus entirely
+on the building blocks of the new energy world: renewables, energy networks, and customer solutions. We'll spin off our con-
+ventional generation, global energy trading, and exploration and production businesses to form an independent company
+with a new name.
+This means that starting next year you, our shareholders, will own stock in both the new E.ON and the New Company.
+We're firmly convinced that each of these two sharply focused companies will have excellent prospects for the future in their
+respective businesses.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+The E.ON Board of Management and Supervisory Board didn't take this decision lightly. Over the course of several months, we
+held extensive discussions with people inside and outside our company. This resulted in a systematic strategy-design process
+that drew on experience and suggestions from within E.ON and from outside. In the end, we were convinced that we need to
+take early, decisive action and that creating one company to focus on the new world of individualized customer solutions and
+another company to focus on the conventional world of big energy systems is the only way to have prospects of a strong position
+in both. This new setup will enable both companies to seize their respective strategic opportunities, win over investors, grow,
+secure jobs, and create value. It will also open up new opportunities for your investment.
+CEO Letter
+2
+229 Financial Calendar
+224 Glossary of Financial Terms
+98 Consolidated Statements of Income
+99 Consolidated Statements of Recognized Income and Expenses
+100 Consolidated Balance Sheets
+102
+Consolidated Statements of Cash Flows
+104 Statement of Changes in Equity
+106 Notes
+Our Renewables business continues to grow as well. The first turbines of our two new wind farms in the North Sea, Humber
+Gateway and Amrumbank West, will start producing electricity in the weeks ahead; by the end of the year, all 500 megawatts
+will be operational. Two months ago our distributed-energy subsidiary entered the machine-to-machine business by acquiring
+25 percent of U.K.-based Intelligent Maintenance Systems Ltd. This gives us exclusive access to a technology that enables
+primarily business customers to remotely control terminal devices such as air conditioning and lighting units, thereby trimming
+their energy costs. Data-based energy management will be an important topic for the future E.ON.
+202
+Declaration of the Board of Management
+List of Shareholdings
+216 Supervisory Board and Board of Management
+216 Members of the Supervisory Board
+218 Members of the Board of Management
+219 Tables and Explanations
+219 Explanatory Report of the Board of Management
+220 Summary of Financial Highlights/Installed Capacity/Sales Volume
+203
+-6
+Electricity sales (billion kWh)
+9,768
+2014 Annual Report
+e.on
+E.ON Group Financial Highlights¹
+€ in millions
+Attributable generating capacity (MW)
+- thereof renewables (MW)
+2014
+2013
++/-%
+58,871
+10,414
+-4
+61,090
+thereof renewables (MW)
+62,809
+60,151
+-4
+-4
+10,885
+10,472
+Fully consolidated generating capacity (MW)
+80,001
+2,532,650
+-217,182
+900,000
+300,000
+571,950
+300,000
+1,143,900
+600,000
+2,191,376
+302,812
+2,494,188
+1,584,601 1,291,577
+321,713
+2,854,363
+-217,182
+302,812
+1,022,238
+302,812
+321,713 302,812
+4,116,138 1,906,314 1,594,389
+Table of Compensation Granted and Allocated
+CEO Letter
+719,426 3,813,326
+80,001
+771,950
+871,950
+700,000
+19,426
+719,426
+700,000
+700,000€
+700,000
+2014
+700,000
+See footnotes on page 89.
+32,650
+1,743,900
+19,426
+732,650
+719,426
+600,000
+600,000
+1,350,000
+789,333
+1,200,000
+Report of the Supervisory Board
+E.ON Stock
+Compensation granted
+2014 2014 (min.)
+Combined Group Management Report
+29,529
+29,529
+29,529
+26,563
+29,529
+726,563
+729,529
+26,563
+729,529
+726,563
+729,529
+One-year variable compensation
+600,000
+600,000
+1,350,000
+785,753
+729,529
+Strategy and Objectives
+700,000
+700,000
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Dr. Bernhard Reutersberg (Member of the Board of Management)
+€
+Fixed compensation
+Fringe benefits
+Total
+700,000
+2013
+Compensation allocated
+2014 (max.)
+2013
+2014
+700,000
+700,000
+700,000
+Compensation allocated
+2013
+2014 2014 (min.) 2014 (max.)
+1,364,000
+733,334
+Jørgen Kildahl (Member of the Board of Management)
+Compensation granted
+225,000
+225,000
+178,095
+178,095
+3,095
+3,095
+Compensation allocated
+2013
+2014
+175,000
+-145,000
+175,000
+2013
+Prof. Dr. Klaus-Dieter Maubach (Member of the Board of Management
+until March 31, 2013)
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+Total
+Service cost
+Compensation granted
+2014 2014 (min.) 2014 (max.)
+Total
+-145,000
+258,095
+See footnotes on page 89.
+Total
+Service cost
+Total
+-Final calculation and payment of multi-year component
+of 2011 and 2012 bonus
+Multi-year variable compensation
+One-year variable compensation
+403,095
+Total
+Fixed compensation
+€
+Table of Compensation Granted and Allocated
+401,315
+546,315
+143,220
+143,220
+Fringe benefits
+See footnotes on page 89.
+Compensation granted
+Compensation allocated
+1,650,000
+341,000
+964,000
+550,000 1,048,667
+2,097,334
+366,667
+183,333
+682,000
+366,667
+733,333
+789,333
+2,601,211
+819,211
+4,566,545
+1,190,082 1,783,211
+163,494
+1,929,243
+280,407
+280,407
+2,881,618 1,099,618
+280,407
+163,494 280,407
+4,846,952 1,353,576 2,063,618
+1,765,749
+366,667
+819,211
+849,082
+2013
+400,000
+2014 2014 (min.) 2014 (max.)
+800,000
+800,000
+800,000
+400,000
+2014
+800,000
+449,082
+19,211
+19,211
+19,211
+449,082
+19,211
+849,082
+819,211
+819,211
+819,211
+2013
+700,000
+32,650
+732,650
+Multi-year variable compensation
+-217,182
+852,420
+18,516
+25,196
+25,196
+25,196
+18,516
+25,196
+543,516
+2014
+700,000
+725,196
+725,196
+543,516
+725,196
+One-year variable compensation
+450,000
+600,000
+1,350,000
+725,196
+501,833
+525,000
+700,000
+57,778
+152,876
+483,432 1,663,009
+91
+92
+Corporate Governance Report
+Table of Compensation Granted and Allocated
+Mike Winkel (Member of the Board of Management since April 1, 2013)
+Compensation granted
+700,000
+Compensation allocated
+Fixed compensation
+Fringe benefits
+Total
+2013
+525,000
+2014 2014 (min.) 2014 (max.)
+2013
+700,000
+€
+152,876
+3,939,676
+789,333
+737,500
+125,922
+851,118
+125,922
+3,917,118
+108,372
+125,922
+1,153,721 1,640,451
+Table of Compensation Granted and Allocated
+€
+Fixed compensation
+Fringe benefits
+125,922
+2,309,118
+Total
+Multi-year variable compensation
+- Final calculation and payment of multi-year component
+of 2011 and 2012 bonus
+Total
+Service cost
+Total
+CEO Letter
+One-year variable compensation
+Multi-year variable compensation
+108,372
+1,839,388
+725,196 3,791,196
+858,000
+1,716,000
+- Final calculation and payment of multi-year component
+of 2011 bonus
+- Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, second tranche (2014-2018)
+512,500
+225,000
+1,045,349 1,514,529
+- Share Matching Plan, third tranche (2015-2019)
+1,116,000
+600,000
+Total
+Service cost
+Total
+See footnotes on page 89.
+1,731,016
+2,183,196
+558,000
+300,000
+1,200,000
+152,876
+873,676
+57,778
+714,099
+729,529
+3,784,369
+1,592,317
+1,301,680
+799,834
+799,834
+3,326,397 2,181,949
+2,181,949
+729,529 3,784,369 2,392,151 1,301,680
+Klaus Schäfer (Member of the Board of Management since September 1, 2013)
+Compensation granted
+€
+Fixed compensation
+Fringe benefits
+Total
+2013
+233,333
+6,321
+Table of Compensation Granted and Allocated
+2014 2014 (min.) 2014 (max.)
+2,526,563
+552,420
+300,000
+1,704,840
+See footnotes on page 89.
+80,001
+-217,182
+-Final calculation and payment of multi-year component
+of 2011 bonus
+80,001
+- Final calculation and payment of multi-year component
+of 2012 bonus
+1,104,840
+600,000
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, third tranche (2015-2019)
+Total
+Service cost
+Total
+See footnotes on page 89.
+900,000
+300,000
+- Share Matching Plan, second tranche (2014-2018)
+152,876
+2,331,676
+Compensation allocated
+2013
+700,000
+- Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Matching Plan, first tranche (2013-2017)
+116,667
+- Share Matching Plan, second tranche (2014-2018)
+100,000
+- Share Matching Plan, third tranche (2015-2019)
+558,000
+300,000
+- Final calculation and payment of multi-year component
+of 2011 bonus
+1,116,000
+600,000
+Service cost
+Total
+See footnotes on page 89.
+656,321
+2,178,800
+720,800 3,786,800
+425,654 1,510,133
+Total
+700,000
+1,716,000
+216,667
+20,800
+20,800
+239,654
+720,800
+720,800
+700,000
+20,800
+720,800
+233,333
+6,321
+239,654
+858,000
+2014
+700,000
+One-year variable compensation
+200,000
+600,000
+1,350,000
+186,000
+789,333
+Multi-year variable compensation
+20,800
+720,800
+Report of the Supervisory Board
+2013
+Strategy and Objectives
+Baroness Denise Kingsmill CBE
+Eugen-Gheorghe Luha
+René Obermann
+Klaus Dieter Raschke (until December 31, 2014)
+Eberhard Schomburg
+Fred Schulz
+Dr. Karen de Segundo
+Gabriele Gratz (until December 31, 2013)
+Dr. Theo Siegert
+Attendance fees and meeting-related
+reimbursements
+Total
+Supervisory Board
+compensation
+2014
+2013
+Compensation for
+committee duties
+2014
+2013
+Supervisory Board
+compensation from
+affiliated companies
+2014
+Willem Vis (until June 30, 2014)
+Subtotal
+Total
+Clive Broutta (since July 1, 2014)
+Prof. Dr. Ulrich Lehner
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Payments Made to Former Members of the Board
+of Management
+Total payments made to former Board of Management members
+and to their beneficiaries amounted to €10.2 million in 2014
+(prior year: €14.5 million). Provisions of €175 million (prior year:
+€158 million) have been provided for pension obligations to
+former Board of Management members and their beneficiaries.
+Erhard Ott
+Compensation Plan for the Supervisory Board
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The other
+Supervisory Board Compensation
+members of the Supervisory Board receive compensation of
+€140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit and
+Risk Committee, an additional €110,000. Other committee
+chairmen receive an additional €140,000; committee members,
+an additional €70,000. Members serving on more than one
+committee receive the highest applicable committee compen-
+sation only. In contradistinction to the compensation just
+described, the Chairman and the Deputy Chairmen of the
+Supervisory Board receive no additional compensation for their
+committee duties. In addition, Supervisory Board members
+are paid an attendance fee of €1,000 per day for meetings of
+the Supervisory Board or its committees. Individuals who were
+members of the Supervisory Board or any of its committees for
+less than an entire financial year receive pro rata compensation.
+Supervisory Board Compensation in 2014
+The total compensation of the members of the Supervisory
+Board amounted to €3.1 million (prior year: €3.2 million). As
+in the prior year, no loans were outstanding or granted to
+Supervisory Board members in the 2014 financial year.
+€
+Werner Wenning
+The compensation of Supervisory Board members is deter-
+mined by the Annual Shareholders Meeting and governed by
+Section 15 of the Company's Articles of Association. The pur-
+pose of the compensation plan is to enhance the Supervisory
+Board's independence for its oversight role. Furthermore, there
+are a number of duties that Supervisory Board members must
+perform irrespective of the Company's financial performance.
+Supervisory Board members—in addition to being reimbursed
+for their expenses-therefore receive fixed compensation and
+compensation for committee duties.
+Report of the Supervisory Board
+2013
+320,000 320,000
+20,070
+250,000 270,070
+6,730
+18,567
+15,631
+256,730 265,631
+228,567
+70,000
+140,000 140,000 110,000 110,000
+140,000 140,000 110,000 110,000
+140,000
+70,000
+70,000
+210,000 210,000
+105,000 210,000
+25,297
+54,605 2,975,297 3,004,605
+An expense-based approach was used for Supervisory Board compensation and attendance fees shown for 2013 and 2014.
+158,985 168,738
+3,134,282 3,173,343
+Other
+The Company has taken out D&O insurance for Board of
+Management and Supervisory Board members. In accordance
+with the German Stock Corporation Act and the German
+Corporate Governance Code's recommendation, this insurance
+320,000 320,000
+440,000 440,000
+140,000 140,000
+140,000 140,000 180,000 180,000
+70,000 140,000 35,000 70,000
+2,340,000 2,340,000 610,000 610,000
+140,000
+2014
+440,000 440,000
+320,000 320,000
+2013
+320,000 320,000
+320,000 320,000
+70,000
+70,000
+140,000
+140,000
+140,000
+140,000
+140,000 140,000
+140,000 140,000
+18,904
+228,904
+140,000
+140,000
+35,000
+175,000
+140,000
+70,000
+includes a deductible of 10 percent of the respective damage
+claim for Board of Management and Supervisory Board
+members. The deductible has a maximum cumulative annual
+cap of 150 percent of a member's annual fixed compensation.
+CEO Letter
+For six months after termination of service agreement, prorated compensation equal to fixed compensation
+and target bonus, at a minimum 60 percent of most recently received compensation
+819,044
+94
+Corporate Governance Report
+The following table provides a summary overview of the
+above-described components of the Board of Management's
+compensation as well as their metrics and parameters:
+Summary Overview of Compensation Components
+Compensation component
+Fixed compensation
+150,647
+Base salary
+Performance-based compensation
+Annual bonus
+Metric/Parameter
+•
+•
+Board of Management Chairman: €1,240,000
+Board of Management members: €700,000
+€800,000
+Fringe benefits
+Chauffer-driven company car, telecommunications equipment, insurance premiums, medical examination
+ידי
+964,044
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into
+any contingencies of behalf of the members of the Board of
+Management in the 2014 financial year. Page 218 contains
+additional information about the members of the Board of
+Management.
+Compensation granted
+2013
+350,000
+13,397
+2014 2014 (min.) 2014 (max.)
+Compensation allocated
+2013
+2014
+350,000
+668,397
+13,397
+363,397
+450,000
+450,000
+-145,000
+-145,000
+813,397
+150,647
+363,397
+¹For Board of Management members appointed before 2010.
+.
+Possibility of special
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting
+period and on the dividend payments during the four-year vesting period
+Pension benefits
+Final-salary-based benefits¹
+Contribution-based benefits
+•
+•
+•
++ performance matching (1:0 to 1:2) depending on ROACE during vesting period
+.
+Virtual contributions equaling a maximum of 18 percent of fixed compensation and target bonus
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+Other compensation provisions
+Settlement cap
+Maximum of two years' total compensation or the total compensation for the remainder of the
+service agreement
+Settlement for change-of-control Settlement equal to two or three target salaries (base salary, target bonus, and fringe benefits),
+reduced by 20 percent
+Non-compete clause
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from age of 60
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of
+pension entitlement
+Target bonus at 100 percent target attainment:
+•
+• Cap: 200 percent of the target value
+compensation
+Long-term variable
+compensation:
+Share Matching Plan
+•
+- Target bonus for Board of Management Chairman: €1,890,000
+- Target bonus for Board of Management members: €900,000 - €1,100,000
+Cap: 200 percent of target bonus
+Amount of bonus depends on
+• Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1)
+- Company performance: actual EBITDA vs. budget; if necessary, adjusted
+• Divided into STI component (2/3) and LTI component (1/3)
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the
+annual bonus as long as the total bonus remains under the cap.
+•
+Granting of virtual shares of E.ON stock with a four-year vesting period
+- Target value for Board of Management Chairman: €1,260,000
+- Target value for Board of Management members: €600,000 €733,333
+- Individual performance factor
+95
+96 Consolidated Financial Statements
+Independent Auditors' Report
+-718
+-2,955
+2,361
+(4)
+-175
+98
+-3,130
+-576
+2,459
+2,091
+30
+368
+from continuing operations
+from discontinued operations
+from net loss/income
+(13)
+-3,160
+-1.55
+(10)
+-2,692
+(9)
+-1,794
+-1,992
+Income/Loss from equity investments
+16
+Income from other securities, interest and similar income
+882
+-2,572
+580
+Income taxes
+Income/Loss from continuing operations
+Income from discontinued operations, net
+Net loss/income
+Attributable to shareholders of E.ON SE
+Attributable to non-controlling interests
+in €
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted
+Interest and similar expenses
+Financial results
+1.05
+0.05
+1,462,500
+975,000
+691,863
+691,863
+16,863
+16,863
+2014
+1,666,863
+2013
+675,000
+2013
+675,000
+Compensation allocated
+Dr. Marcus Schenck (Member of the Board of Management until September 30, 2013)
+Compensation granted
+93
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+2014 2014 (min.) 2014 (max.)
+-0.09
+582,736
+2,249,599
+-237,972
+-1.64
+1.10
+¹Because of the initial application of IFRS 10 and IFRS 11, and to account for the reporting of discontinued operations, the comparative prior-year figures have been adjusted
+(see also Notes 2 and 4).
+- Final calculation and payment of multi-year component
+of 2012 bonus
+Service cost
+Total
+- Final calculation and payment of multi-year component
+of 2011 and 2012 bonus
+-237,972
+Multi-year variable compensation
+Total
+Fringe benefits
+Fixed compensation
+Regine Stachelhaus (Member of the Board of Management until June 30, 2013)
+Table of Compensation Granted and Allocated
+582,736
+2,499,127
+1,916,391
+One-year variable compensation
+5,071
+-585
+Income/Loss from continuing operations before financial results and income taxes
+Report on the Group Management Report
+We have audited the accompanying group management report
+of E.ON SE, Düsseldorf, which is combined with the manage-
+ment report of the company, for the business year from Janu-
+ary 1, 2014 to December 31, 2014. The Board of Managing
+Directors of E.ON SE, Düsseldorf, is responsible for the prepa-
+ration of the combined management report in accordance
+with the requirements of German commercial law applicable
+pursuant to § 315a Abs. 1 HGB. We conducted our audit in
+accordance with § 317 Abs. 2 HGB and German generally
+accepted standards for the audit of the combined management
+report promulgated by the Institut der Wirtschaftsprüfer
+(Institute of Public Auditors in Germany) (IDW). Accordingly,
+we are required to plan and perform the audit of the com-
+bined management report to obtain reasonable assurance
+about whether the combined management report is consis-
+tent with the consolidated financial statements and the audit
+findings, as a whole provides a suitable view of the Group's
+position and suitably presents the opportunities and risks of
+future development.
+According to § 322 Abs. 3 Satz 1 HGB we state, that our
+audit of the combined management report has not led to
+any reservations.
+In our opinion based on the findings of our audit of the con-
+solidated financial statements and combined management
+report, the combined management report is consistent with
+the consolidated financial statements, as a whole provides
+a suitable view of the Group's position and suitably presents
+the opportunities and risks of future development.
+Düsseldorf, March 2, 2015
+PricewaterhouseCoopers
+Aktiengesellschaft
+Wirtschaftsprüfungsgesellschaft
+In our opinion based on the findings of our audit, the consoli-
+dated financial statements comply, in all material respects,
+with IFRSS, as adopted by the EU, and the additional require-
+ments of German commercial law pursuant to § 315a Abs. 1 HGB
+and give a true and fair view of the net assets and financial
+position of the Group as at December 31, 2014 as well as the
+results of operations for the business year then ended, in
+accordance with these requirements.
+Markus Dittmann
+Michael Preiß
+Wirtschaftsprüfer
+(German Public Auditor)
+97
+98
+E.ON SE and Subsidiaries Consolidated Statements of Income
+€ in millions
+Sales including electricity and energy taxes
+Electricity and energy taxes
+Wirtschaftsprüfer
+(German Public Auditor)
+Sales
+According to § 322 Abs. 3 Satz (sentence) 1 HGB, we state that
+our audit of the consolidated financial statements has not led
+to any reservations.
+Supervisory Board and Board of Management
+Tables and Explanations
+To E.ON SE, Düsseldorf
+Report on the Consolidated Financial Statements
+We have audited the accompanying consolidated financial
+statements of E.ON SE, Düsseldorf, and its subsidiaries, which
+comprise the consolidated balance sheet, the consolidated
+statement of income, the consolidated statement of recognized
+income and expenses, the consolidated statement of cash
+flows, the statement of changes in equity and the notes to the
+consolidated financial statements for the business year from
+January 1, 2014 to December 31, 2014.
+Board of Managing Directors' Responsibility for the
+Consolidated Financial Statements
+The Board of Managing Directors of E.ON SE, Düsseldorf, is
+responsible for the preparation of these consolidated financial
+statements. This responsibility includes that these consolidated
+financial statements are prepared in accordance with Inter-
+national Financial Reporting Standards, as adopted by the EU,
+and the additional requirements of German commercial law
+pursuant to § (Article) 315a Abs. (paragraph) 1 HGB ("Handels-
+gesetzbuch": German Commercial Code) and that these con-
+solidated financial statements give a true and fair view of the
+net assets, financial position and results of operations of
+the Group in accordance with these requirements. The Board
+of Managing Directors is also responsible for the internal
+controls as the Board of Managing Directors determines are
+necessary to enable the preparation of consolidated financial
+statements that are free from material misstatement, whether
+due to fraud or error.
+Auditor's Responsibility
+Our responsibility is to express an opinion on these consoli-
+dated financial statements based on our audit. We conducted
+our audit in accordance with § 317 HGB and German generally
+accepted standards for the audit of financial statements pro-
+mulgated by the Institut der Wirtschaftsprüfer (Institute of
+Public Auditors in Germany) (IDW) and additionally observed
+Audit Opinion
+the International Standards on Auditing (ISA). Accordingly,
+we are required to comply with ethical requirements and
+plan and perform the audit to obtain reasonable assurance
+about whether the consolidated financial statements are
+free from material misstatement.
+We believe that the audit evidence we have obtained is suffi-
+cient and appropriate to provide a basis for our audit opinion.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+An audit involves performing audit procedures to obtain audit
+evidence about the amounts and disclosures in the consoli-
+dated financial statements. The selection of audit procedures
+depends on the auditor's professional judgment. This includes
+the assessment of the risks of material misstatement of the
+consolidated financial statements, whether due to fraud or
+error. In assessing those risks, the auditor considers the inter-
+nal control system relevant to the entity's preparation of con-
+solidated financial statements that give a true and fair view.
+The aim of this is to plan and perform audit procedures that
+are appropriate in the given circumstances, but not for the
+purpose of expressing an opinion on the effectiveness of the
+Group's internal control system. An audit also includes evalu-
+ating the appropriateness of accounting policies used and the
+reasonableness of accounting estimates made by the Board
+of Managing Directors, as well as evaluating the overall presen-
+tation of the consolidated financial statements.
+Note
+2014
+20131
+-105,719
+Personnel costs
+(11)
+-4,121
+-4,604
+Depreciation, amortization and impairment charges
+(14)
+-98,496
+-8,667
+Other operating expenses
+(7)
+-11,834
+-9,902
+Income from companies accounted for under the equity method
+-273
+-210
+-5,205
+(8)
+Cost of materials
+10,681
+113,053
+121,452
+-1,497
+-1,764
+(5)
+111,556
+119,688
+Changes in inventories (finished goods and work in progress)
+-61
+-22
+Own work capitalized
+(6)
+345
+364
+Other operating income
+(7)
+10,966
+E.ON Stock
+- Final calculation and payment of multi-year component
+of 2011 bonus
+19,426 19,426€
+719,426 719,426€
+One-year variable compensation
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+89
+Dr. Johannes Teyssen (Chairman of the Board of Management)
+Compensation granted
+2013
+2014
+1,240,000
+21,458
+1,261,458
+Combined Group Management Report
+1,240,000
+58,542
+1,298,542
+2014
+(max.)2,3
+1,240,000
+58,542
+1,298,542
+Compensation allocated
+2013
+2014
+1,240,000
+21,458
+1,261,458
+1,240,000
+58,542
+1,298,542
+1,260,000 1,260,000
+2,835,000
+2014
+(min.)
+1,240,000
+58,542
+1,298,542
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Multi-year variable compensation
+The following table shows the compensation granted and
+allocated in 2014 in the format recommended by the German
+Corporate Governance Code:
+Table of Compensation Granted and Allocated¹
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+- Final calculation and payment of multi-year component
+of 2011 bonus
+- Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+Total
+Service cost
+Total
+CEO Letter
+1,610,082 1,655,600
+2,490,000 1,790,082
+Total
+149,657
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+- Final calculation and payment of multi-year component
+of 2011 bonus
+- Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+Service cost
+Total
+See footnotes on page 89.
+Table of Compensation Granted and Allocated
+Fixed compensation
+Fringe benefits
+3,580,164
+Total
+Fixed compensation
+€
+Total
+Table of Compensation Granted and Allocated
+Dr.-Ing. Leonhard Birnbaum (Member of the Board of Management since July 1, 2013)
+149,657
+-434,398
+1,860,000
+-434,398
+2,320,164
+1,260,000
+5,011,458
+4,348,624
+630,000 1,160,082
+630,000
+90
+703,332
+5,714,790
+642,757
+4,991,381
+642,757
+1,941,299
+642,757
+8,356,463
+703,332 642,757
+3,724,529 3,162,501
+¹All the figures previously disclosed in the table entitled "Effective Compensation" are now disclosed in this table in the format recommended by the Code.
+2The maximum amount disclosed under benefits granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Board of Management members.
+3The overall cap on Board of Management compensation, which was introduced in the 2013 financial year and is described on page 84, applies as well.
+1,298,542 7,713,706 3,021,197 2,519,744
+Corporate Governance Report
+Capital decrease
+Capital increase
+-9
+-656
+-2,742
+Change in scope of consolidation
+-292
+1,201
+Treasury shares repurchased/sold
+Dividends
+benefit plans
+Net additions/disposals from
+reclassification related to
+put options
+Total comprehensive income
+Net loss
+Other comprehensive income
+Remeasurements of defined
+-1,145
+48
+-5,358
+23,306
+Share additions
+13,733
+391
+Balance as of January 1, 2014¹
+391
+54
+51
+2,091
+199
+-2,128
+-2,175
+51
+Remeasurements of defined
+benefit plans
+199
+Changes in accumulated
+other comprehensive income
+-2,128
+391
+51
+Balance as of December 31, 20131
+2,001
+13,733
+23,306
+-2,742
+1,201
+-292
+2,001
+-314
+887
+-3,160
+34,958
+Treasury shares
+-3,505
+Equity
+attributable
+to shareholders
+Non-controlling
+interests (before
+Reclassification
+related to
+Non-controlling
+put options
+reclassification)
+-548
+Total
+4,410
+3,862
+38,820
+304
+35
+-35
+0
+304
+-3,505
+interests
+of E.ON SE
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+-2,198
+-2,175
+-314
+-511
+-2,198
+Changes in accumulated
+other comprehensive income
+-2,175
+-314
+-511
+Balance as of December 31, 2014
+2,001
+13,077
+16,842
+-4,917
+-2,128
+-803
+¹Because of the initial application of IFRS 10 and IFRS 11, the comparative prior-year figures have been adjusted (see also Note 2).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+-511
+2,290
+304
+Other comprehensive income
+€ in millions
+Net decrease/increase in cash and cash equivalents
+Effect of foreign exchange rates on cash and cash equivalents
+2014
+-1,368
+20131
+1,775
+45
+-59
+Cash and cash equivalents at the beginning of the year4
+2,823
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+Cash and cash equivalents at the end of the year
+4,539
+Less: Cash and cash equivalents of discontinued operations at the end of the year
+19
+25
+Cash and cash equivalents of continuing operations at the end of the year5
+3,197
+4,514
+Supplementary Information on Cash Flows from Operating Activities
+Income taxes paid (less refunds)
+Interest paid
+Interest received
+3,216
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+-28
+-4
+-840
+-2,097
+-199
+-233
+2,282
+1,346
+-5,798
+-3,008
+-4,583
+-3,996
+-28
+4
+-4,611
+-3,992
+¹Because of the initial application of IFRS 10 and IFRS 11, and to account for the reporting of discontinued operations, the comparative prior-year figures have been adjusted
+(see also Notes 2 and 4).
+2Additional information on operating cash flow is provided in Notes 29 and 33.
+³No material netting has taken place in either of the years presented here. The non-cash financing activity resulting from the scrip dividend is discussed in Notes 19 and 21.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Dividends received
+-2,097
+-60
+-949
+-1,484
+-1,297
+Cash flow
+hedges
+-343
+IFRS 10, IFRS 11 adjustment
+Balance as of January 1, 2013
+Change in scope of consolidation
+35,262
+2,001
+13,740
+23,173
+-614
+810
+810
+-343
+-7
+Capital increase
+Capital decrease
+Dividends
+Share additions
+Net additions/disposals from
+reclassification related to
+put options
+Total comprehensive income
+Net income
+Treasury shares repurchased/sold
+-614
+22,869
+13,740
+437
+543
+623
+¹Because of the initial application of IFRS 10 and IFRS 11, and to account for the reporting of discontinued operations, the comparative prior-year figures have been adjusted
+(see also Notes 2 and 4).
+"Cash and cash equivalents of continuing operations at the beginning of 2014 also include an amount of €12 million at the Pražská plynárenská group, which was disposed of
+in the first quarter of 2014. The figure for 2013 includes a combined total of €7 million at E.ON Thüringer Energie and at E.ON Energy from Waste, both of which had been
+presented as disposal groups.
+5Cash and cash equivalents of continuing operations at the end of 2014 also included a combined total of €6 million from the generation activities in Spain and Italy, which
+are presented as disposal groups. In 2013, this line included an amount of €12 million at the Pražská plynárenská group, which had been presented as a disposal group.
+Additional information on the Statements of Cash Flows is provided in Note 29.
+103
+104
+Statement of Changes in Equity
+Changes in accumulated
+other comprehensive income
+Currency
+Additional
+Retained
+translation
+Available-for-
+€ in millions
+Capital stock
+paid-in capital
+earnings
+adjustments
+sale securities
+Balance as of January 1, 2013
+2,001
+-966
+4,445
+-2,340
+3,862
+Business combinations are accounted for by applying the
+purchase method, whereby the purchase price is offset against
+the proportional share in the acquired company's net assets.
+In doing so, the values at the acquisition date that corresponds
+to the date at which control of the acquired company was
+attained are used as a basis. The acquiree's identifiable assets,
+liabilities and contingent liabilities are generally recognized
+at their fair values irrespective of the extent attributable to
+non-controlling interests. The fair values of individual assets
+are determined using published exchange or market prices at
+the time of acquisition in the case of marketable securities,
+for example, and in the case of land, buildings and major tech-
+nical equipment, generally using independent expert reports
+that have been prepared by third parties. If exchange or mar-
+ket prices are unavailable for consideration, fair values are
+determined using the most reliable information available that
+is based on market prices for comparable assets or on suit-
+able valuation techniques. In such cases, E.ON determines fair
+value using the discounted cash flow method by discounting
+estimated future cash flows by a weighted-average cost of
+capital. Estimated cash flows are consistent with the internal
+mid-term planning data for the next three years, followed by
+two additional years of cash flow projections, which are extrapo-
+lated until the end of an asset's useful life using a growth rate
+based on industry and internal projections. The discount rate
+reflects the specific risks inherent in the acquired activities.
+Non-controlling interests can be measured either at cost
+(partial goodwill method) or at fair value (full goodwill
+method). The choice of method can be made on a case-by-
+case basis. The partial goodwill method is generally used
+within the E.ON Group.
+Transactions with holders of non-controlling interests are
+treated in the same way as transactions with investors. Should
+the acquisition of additional shares in a subsidiary result in
+a difference between the cost of purchasing the shares and
+the carrying amounts of the non-controlling interests acquired,
+that difference must be fully recognized in equity.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do
+not coincide with a loss of control.
+Intangible assets must be recognized separately from goodwill
+if they are clearly separable or if their recognition arises from
+a contractual or other legal right. Provisions for restructuring
+measures may not be recorded in a purchase price allocation.
+If the purchase price paid exceeds the proportional share in the
+net assets at the time of acquisition, the positive difference
+is recognized as goodwill. No goodwill is recognized for positive
+differences attributable to non-controlling interests. A nega-
+tive difference is immediately recognized in income.
+Foreign Currency Translation
+The Company's transactions denominated in foreign currency
+are translated at the current exchange rate at the date of
+the transaction. Monetary foreign currency items are adjusted
+to the current exchange rate at each balance sheet date; any
+gains and losses resulting from fluctuations in the relevant
+currencies, and the effects upon realization, are recognized
+in income and reported as other operating income and other
+operating expenses, respectively. Gains and losses from the
+translation of non-derivative financial instruments used in
+hedges of net investments in foreign operations are recognized
+in equity as a component of other comprehensive income. The
+ineffective portion of the hedging instrument is immediately
+recognized in income.
+107
+108 Notes
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than
+the euro are translated using the exchange rates applicable
+on the balance sheet date, while items of the statements
+of income are translated using annual average exchange rates.
+Material transactions of foreign subsidiaries occurring during
+the fiscal year are translated in the financial statements using
+the exchange rate at the date of the transaction. Differences
+arising from the translation of assets and liabilities compared
+with the corresponding translation of the prior year, as well
+as exchange rate differences between the income statement
+and the balance sheet, are reported separately in equity as
+a component of other comprehensive income.
+Business Combinations
+Foreign currency translation effects that are attributable to
+the cost of monetary financial instruments classified as avail-
+able for sale are recognized in income. In the case of fair-
+value adjustments of monetary financial instruments and for
+non-monetary financial instruments classified as available
+for sale, the foreign currency translation effects are recognized
+in equity as a component of other comprehensive income.
+The following table depicts the movements in exchange rates
+for the periods indicated for major currencies of countries
+outside the European Monetary Union:
+Currencies
+ISO
+€1, rate at
+year-end
+€1, annual
+average rate
+Code
+2014
+2013
+2014
+2013
+Foreign-exchange transactions out of the Russian Federation
+may be restricted in certain cases. The Brazilian real is not
+freely convertible.
+A joint operation exists when E.ON and the other parties to
+a joint arrangement have direct rights to the assets, and obli-
+gations for the liabilities, attributable to the operation. In a
+joint operation, assets and liabilities, as well as revenues and
+expenses, are recognized pro rata according to the rights and
+obligations attributable to E.ON.
+Joint Operations
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with
+joint-venture companies are eliminated within the consolidation
+process on a pro-rata basis if and insofar as these are material.
+Basis of Presentation
+These Consolidated Financial Statements have been prepared
+in accordance with Section 315a (1) of the German Commercial
+Code ("HGB") and with those International Financial Reporting
+Standards ("IFRS") and IFRS Interpretations Committee inter-
+pretations ("IFRIC") that were adopted by the European Com-
+mission for use in the EU as of the end of the fiscal year, and
+whose application was mandatory as of December 31, 2014.
+Principles
+The Consolidated Financial Statements of the E.ON Group
+("E.ON" or the "Group") are generally prepared based on histor-
+ical cost, with the exception of available-for-sale financial
+assets that are measured at fair value and of financial assets
+and liabilities (including derivative financial instruments)
+that are recognized in income and measured at fair value.
+Scope of Consolidation
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor has
+the current ability to direct the relevant activities of the
+investee entity. Relevant activities are those activities that most
+significantly affect the performance of a business. In addition,
+E.ON must participate in this business performance in the form
+of variable returns and be able to influence those returns to
+its benefit through existing opportunities and rights. Control
+is normally deemed established if E.ON directly or indirectly
+holds a majority of the voting rights in the investee. In struc-
+tured entities, control can be established be means of contrac-
+tual arrangements.
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into
+line with those of the Group. Intercompany receivables, liabil-
+ities and results between Group companies are eliminated
+in the consolidation process.
+Associated Companies
+An associate is an entity over whose relevant activities E.ON
+has significant influence, but which is neither a subsidiary nor
+an interest in a joint venture. Significant influence exists when
+E.ON has the power to participate in the financial and oper-
+ating policy decisions of the investee but does not control or
+jointly control these decisions. Significant influence is gener-
+ally presumed if E.ON directly or indirectly holds at least 20 per-
+cent, but not more than 50 percent, of an entity's voting rights.
+Interests in associated companies are accounted for using
+the equity method. In addition, majority-owned companies
+in which E.ON does not exercise control due to restrictions
+concerning the control of assets or management are also
+generally accounted for using the equity method.
+Interests in associated companies accounted for using the
+equity method are reported on the balance sheet at cost,
+adjusted for changes in the Group's share of the net assets
+after the date of acquisition and for any impairment charges.
+Losses that might potentially exceed the Group's interest in
+an associated company when attributable long-term loans
+are taken into consideration are generally not recognized. Any
+difference between the cost of the investment and the
+remeasured value of its net assets is recognized in the Consol-
+idated Financial Statements as part of the carrying amount.
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro-rata
+basis if and insofar as these are material.
+Companies accounted for using the equity method are tested
+for impairment by comparing the carrying amount with its
+recoverable amount. If the carrying amount exceeds the recov-
+erable amount, the carrying amount is adjusted for this
+difference. If the reasons for previously recognized impairment
+losses no longer exist, such impairment losses are reversed
+accordingly.
+The financial statements of equity interests accounted for
+using the equity method are generally prepared using account-
+ing that is uniform within the Group.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Joint Ventures
+British pound
+(1) Summary of Significant Accounting Policies
+GBP
+0.83
+2.83
+2.96
+2.91
+2.53
+Hungarian forint
+U.S. dollar
+HUF 315.54
+USD
+1.21
+297.04 308.71 296.87
+1.38
+1.33
+TRY
+1.33
+a) Revenues
+The Company generally recognizes revenue upon delivery
+of goods to customers or purchasers, or upon completion of
+services rendered. Delivery is deemed complete when the
+risks and rewards associated with ownership have been trans-
+ferred to the buyer as contractually agreed, compensation
+has been contractually established and collection of the result-
+ing receivable is probable. Revenues from the sale of goods
+and services are measured at the fair value of the consideration
+received or receivable. They reflect the value of the volume
+supplied, including an estimated value of the volume supplied
+to customers between the date of the last invoice and the end
+of the period.
+Revenues include the surcharge mandated by the German
+Renewable Energy Sources Act and are presented net of
+sales taxes, returns, rebates and discounts, and after elimina-
+tion of intragroup sales.
+Revenues are generated primarily from the sale of electricity
+and gas to industrial and commercial customers, to retail
+customers and to wholesale markets. Also shown in this line
+item are revenues earned from the distribution of electricity
+and gas and from deliveries of steam, heat and water.
+b) Interest Income
+Interest income is recognized pro rata using the effective
+interest method.
+c) Dividend Income
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+Electricity and Energy Taxes
+The electricity tax is levied on electricity delivered to retail
+customers and is calculated on the basis of a fixed tax rate
+per kilowatt-hour ("kWh"). This rate varies between different
+classes of customers. Electricity and energy taxes paid are
+deducted from sales revenues on the face of the income state-
+ment if those taxes are levied upon delivery of energy to the
+retail customer.
+Recognition of Income
+Turkish lira
+8.65
+9.10
+0.81
+0.85
+Brazilian real
+BRL
+3.22
+3.26
+3.12
+2.87
+Norwegian krone
+NOK
+9.04
+8.36
+8.35
+7.81
+Russian ruble
+RUB
+72.34
+45.32
+50.95 42.23
+Swedish krona
+SEK
+9.39
+8.86
+0.78
+106 Notes
+105
+26,713
+882
+368
+368
+2,459
+-1,487
+-90
+-90
+-1,577
+199
+33
+278
+33
+-1,686
+-123
+-123
+-1,809
+-3,484
+33,723
+3,574
+-659
+2,915
+36,638
+232
+278
+604
+2,091
+-76
+39,124
+-944
+-944
+-944
+21
+14
+14
+44
+44
+44
+-31
+-31
+-31
+-2,097
+-243
+-243
+-682
+-60
+25
+25
+-35
+-76
+-76
+-3,484
+33,723
+3,574
+-659
+-449
+-8,807
+-3,160
+30
+30
+-3,130
+-5,198
+-479
+-479
+-5,677
+-2,198
+-184
+-184
+-2,382
+-3,000
+-295
+-295
+-3,295
+-2,502
+24,585
+2,723
+-595
+2,128
+-449
+-583
+-8,358
+64
+2,915
+36,638
+-115
+982
+317
+-115
+-115
+317
+-1,145
+6
+-15
+-207
+48
+-71
+6
+6
+-15
+-15
+-207
+-1,352
+-71
+-23
+64
+64
+-3,235
+292
+13
+3,862
+Equity
+26,713
+36,638
+39,124
+Financial liabilities
+(26)
+15,784
+18,051
+21,766
+-110
+Operating liabilities
+7,804
+6,754
+6,616
+Income taxes
+(10)
+2,651
+2,317
+2,053
+Provisions for pensions and similar obligations
+(24)
+(26)
+2,128
+(23)
+Non-controlling interests
+23,173
+Accumulated other comprehensive income
+(22)
+-4,833
+-1,833
+-147
+Treasury shares
+(19)
+-2,502
+-3,484
+-3,505
+Equity attributable to shareholders of E.ON SE
+24,585
+33,723
+35,262
+Non-controlling interests (before reclassification)
+2,723
+3,574
+4,445
+Reclassification related to put options
+-595
+-659
+-583
+5,574
+23,306
+3,418
+Miscellaneous provisions
+1,393
+Miscellaneous provisions
+(25)
+4,120
+4,353
+4,020
+Liabilities associated with assets held for sale
+(4)
+2,227
+307
+1,723
+1,197
+35,642
+32,513
+36,065
+Total equity and liabilities
+125,690
+132,330
+142,285
+¹Because of the initial application of IFRS 10, IFRS 11 and IAS 32, the comparative prior-year figures have been adjusted (see also Note 2).
+101
+102
+Current liabilities
+797
+(10)
+Income taxes
+(25)
+25,802
+24,735
+24,935
+Deferred tax liabilities
+(10)
+5,720
+7,904
+6,781
+Non-current liabilities
+63,335
+63,179
+67,096
+Financial liabilities
+(26)
+3,883
+4,673
+3,620
+Trade payables and other operating liabilities
+(26)
+24,615
+21,457
+25,835
+4,945
+16,842
+(21)
+Retained earnings
+Inventories
+(16)
+3,356
+4,147
+4,735
+Financial receivables and other financial assets
+(17)
+1,376
+1,654
+2,125
+97,365
+Trade receivables and other operating assets
+24,311
+21,074
+24,835
+Income tax assets
+(10)
+1,745
+1,030
+918
+Liquid funds
+(18)
+(17)
+95,580
+83,065
+Non-current assets
+4,781
+4,444
+4,746
+Financial receivables and other financial assets
+(17)
+3,533
+3,550
+3,692
+Operating receivables and other operating assets
+(17)
+3,947
+3,074
+3,391
+Income tax assets
+(10)
+83
+172
+123
+Deferred tax assets
+(10)
+6,172
+7,325
+5,482
+6,067
+7,814
+7,046
+Securities and fixed-term deposits
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+December 31
+January 1,
+€ in millions
+Capital stock
+Note
+2014
+20131
+20131
+(19)
+2,001
+2,001
+2,001
+Additional paid-in capital
+(20)
+13,077
+13,733
+13,740
+CEO Letter
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Equity and Liabilities
+142,285
+1,812
+2,648
+3,781
+Restricted cash and cash equivalents
+1,064
+639
+449
+Cash and cash equivalents
+3,191
+4,527
+2,816
+Assets held for sale
+(4)
+5,770
+1,031
+5,261
+Current assets
+42,625
+36,750
+44,920
+Total assets
+125,690
+132,330
+¹Because of the initial application of IFRS 10, IFRS 11 and IAS 32, the comparative prior-year figures have been adjusted (see also Note 2).
+€ in millions
+2,915
+20131
+-663
+124
+-55
+112
+-718
+Total recognized income and expenses (total comprehensive income)
+Attributable to shareholders of E.ON SE
+Total income and expenses recognized directly in equity
+Items that might be reclassified subsequently to the income statement
+Income taxes
+Reclassification adjustments recognized in income
+-12
+Companies accounted for under the equity method
+Unrealized changes
+Unrealized changes
+Currency translation adjustments
+Reclassification adjustments recognized in income
+Unrealized changes
+Available-for-sale securities
+Reclassification adjustments recognized in income
+Unrealized changes
+Cash flow hedges
+232
+-2,382
+Reclassification adjustments recognized in income
+-262
+368
+-26
+-8,358
+882
+-8,807
+-1,577
+-5,677
+-1,809
+-3,295
+-21
+242
+-344
+-628
+-27
+-972
+-27
+51
+27
+-1,347
+-2,557
+-1,296
+-2,530
+-163
+-236
+531
+-260
+943
+-12
+-26
+-639
+-3,512
+Proceeds from disposal of securities (> 3 months) and of financial receivables and fixed-term deposits
+Purchases of securities (> 3 months) and of financial receivables and fixed-term deposits
+4,506
+5,268
+-5,251
+-4,773
+Changes in restricted cash and cash equivalents
+-421
+-195
+Cash used for investing activities of continuing operations
+-3,248
+-572
+Cash provided by (used for) investing activities of discontinued operations
+Cash used for investing activities
+Payments received/made from changes in capital³
+Cash dividends paid to shareholders of E.ON SE
+Cash dividends paid to non-controlling interests
+Proceeds from financial liabilities
+Repayments of financial liabilities
+Cash used for financing activities of continuing operations
+Cash provided by (used for) financing activities of discontinued operations
+Cash used for financing activities
+Equity investments
+604
+-4,480
+Intangible assets and property, plant and equipment
+504
+-3,299
+2,459
+-3,130
+20131
+2014
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Items that will not be reclassified subsequently to the income statement²
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+Income taxes
+Remeasurements of defined benefit plans
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+€ in millions
+Net loss/income
+574
+2,233
+6,546
+Purchases of investments in
+2014
+-7,992
+-3,994
+Attributable to non-controlling interests
+-4,633
+278
+-1,821
+Securities (>3 months)
+-174
+-163
+Changes in operating assets and liabilities and in income taxes
+-1,496
+-709
+Inventories and carbon allowances
+878
+-207
+Trade receivables
+1,488
+1,332
+Other operating receivables and income tax assets
+-8,183
+1,304
+Trade payables
+-124
+-2,292
+Other operating liabilities and income taxes
+4,445
+-846
+Cash provided by operating activities of continuing operations (operating cash flow)²
+-663
+6,253
+Equity investments
+-104
+-449
+Net loss/income
+-3,130
+2,459
+Income/Loss from discontinued operations, net
+175
+-98
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+8,667
+5,205
+Changes in provisions
+1,266
+1,312
+Changes in deferred taxes
+623
+-679
+Other non-cash income and expenses
+1,089
+820
+Gain/Loss on disposal of
+-941
+-2,050
+Intangible assets and property, plant and equipment
+-66
+6,260
+4,539
+225
+(14)
+Property, plant and equipment
+6,931
+6,648
+4,882
+(14)
+Intangible assets
+13,309
+12,666
+11,812
+(14)
+Goodwill
+20131
+20131
+2014
+€ in millions
+January 1,
+December 31
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Assets
+100
+99
+Cash provided by operating activities of discontinued operations
+¹Because of the initial application of IFRS 10 and IFRS 11, the comparative prior-year figures have been adjusted (see also Note 2).
+2Expenses totaling €52 million are attributable to discontinued operations (see also Note 4).
+41,273
+50,083
+Note
+Companies accounted for under the equity method
+Cash provided by operating activities
+189
+53,940
+6,478
+6,449
+Proceeds from disposal of
+7,120
+Intangible assets and property, plant and equipment
+Equity investments
+318
+Non-current securities
+1,612
+2,551
+1,573
+5,009
+1,966
+4,139
+Other financial assets
+(15)
+(15)
+6,354
+6,410
+6,358
+Equity investments
+5,652
+Consolidated Financial Statements
+CEO Letter
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Report of the Supervisory Board
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualita-
+tive disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments
+is provided in Notes 30 and 31.
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of
+the contract are not recognized in income. They are instead
+deferred and recognized in income systematically over the
+term of the derivative. An exception to the accrual principle
+applies if unrealized gains and losses from the initial mea-
+surement are verified by quoted market prices, observable prices
+of other current market transactions or other observable data
+supporting the valuation technique. In this case the gains and
+losses are recognized in income.
+Contracts that are entered into for purposes of receiving or
+delivering non-financial items in accordance with E.ON's
+anticipated procurement, sale or use requirements, and held
+as such, can be classified as own-use contracts. They are not
+accounted for as derivative financial instruments at fair value
+in accordance with IAS 39, but as open transactions subject
+to the rules of IAS 37.
+Primary and derivative financial instruments are netted on
+the balance sheet if E.ON has both an unconditional right-
+even in the event of the counterparty's insolvency-and the
+intention to settle offsetting positions simultaneously or on
+a net basis.
+Inventories
+Changes in fair value of derivative instruments that must be
+recognized in income are presented as other operating income
+or expenses. Gains and losses from interest-rate derivatives
+are netted for each contract and included in interest income.
+Gains and losses from derivative financial instruments are
+shown net as either revenues or cost of materials, provided
+they meet the corresponding conditions for such accounting.
+Certain realized amounts are, if related to the sale of products
+or services, also included in sales or cost of materials.
+The Company measures inventories at the lower of acquisition
+or production cost and net realizable value. The cost of raw
+materials, finished products and goods purchased for resale is
+determined based on the average cost method. In addition
+to production materials and wages, production costs include
+material and production overheads based on normal capacity.
+The costs of general administration are not capitalized. Inven-
+tory risks resulting from excess and obsolescence are provided
+for using appropriate valuation allowances, whereby invento-
+ries are written down to net realizable value.
+Receivables and Other Assets
+Supervisory Board and Board of Management
+Tables and Explanations
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+If a derivative instrument qualifies as a cash flow hedge under
+IAS 39, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the
+period or periods during which the cash flows of the transac-
+tion being hedged affect income. The hedging result is reclassi-
+fied into income immediately if it becomes probable that the
+hedged underlying transaction will no longer occur. For hedging
+instruments used to establish cash flow hedges, the change
+in fair value of the ineffective portion is recognized immediately
+in the income statement to the extent required. To hedge
+the foreign currency risk arising from the Company's net invest-
+ment in foreign operations, derivative as well as non-derivative
+financial instruments are used. Gains or losses due to changes
+in fair value and from foreign currency translation are recog-
+nized separately within equity, as a component of other com-
+prehensive income, under currency translation adjustments.
+Non-derivative financial instruments are recognized at fair
+value, including transaction costs, on the settlement date when
+acquired. IFRS 13, "Fair Value Measurement," ("IFRS 13") defines
+fair value as the price that would be received to sell an asset
+or paid to transfer a liability in an orderly transaction between
+market participants on the measurement date (exit price).
+The valuation techniques used are classified according to the
+fair value hierarchy provided for by IFRS 13.
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit
+risk (debt value adjustment) and the credit risk of the corre-
+sponding counterparty (credit value adjustment). The counter-
+party risks thus determined are allocated to the individual
+financial instruments by applying the relative fair value method
+on a net basis.
+Receivables and other assets are initially measured at fair
+value, which generally approximates nominal value. They are
+subsequently measured at amortized cost, using the effective
+interest method. Valuation allowances, included in the reported
+net carrying amount, are provided for identifiable individual
+risks. If the loss of a certain part of the receivables is probable,
+valuation allowances are provided to cover the expected loss.
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+All other transactions in which E.ON is the lessee are classified
+as operating leases. Payments made under operating leases
+are generally expensed over the term of the lease.
+Leasing transactions in which E.ON is the lessor and substan-
+tially all the risks and rewards incident to ownership of the
+leased property are transferred to the lessee are classified as
+finance leases. In this type of lease, E.ON records the present
+value of the minimum lease payments as a receivable. Payments
+by the lessee are apportioned between a reduction of the
+lease receivable and interest income. The income from such
+arrangements is recognized over the term of the lease using
+the effective interest method.
+All other transactions in which E.ON is the lessor are treated
+as operating leases. E.ON retains the leased property on its
+balance sheet as an asset, and the lease payments are gener-
+ally recorded on a straight-line basis as income over the term
+of the lease.
+Financial Instruments
+IAS 39 sets requirements for the designation and documen-
+tation of hedging relationships, the hedging strategy, as well
+as ongoing retrospective and prospective measurement of
+effectiveness in order to qualify for hedge accounting. The Com-
+pany does not exclude any component of derivative gains
+and losses from the measurement of hedge effectiveness. Hedge
+accounting is considered to be appropriate if the assessment
+of hedge effectiveness indicates that the change in fair value
+of the designated hedging instrument is 80 to 125 percent
+effective at offsetting the change in fair value due to the hedged
+risk of the hedged item or transaction.
+Non-Derivative Financial Instruments
+Securities categorized as available for sale are carried at fair
+value on a continuing basis, with any resulting unrealized
+gains and losses, net of related deferred taxes, reported as a
+component of equity (other comprehensive income) until
+realized. Realized gains and losses are determined by analyzing
+each transaction individually. If there is objective evidence
+of impairment, any losses previously recognized in other com-
+prehensive income are instead recognized in financial results.
+When estimating a possible impairment loss, E.ON takes into
+consideration all available information, such as market con-
+ditions and the length and extent of the impairment. If the
+value on the balance sheet date of the equity instruments
+classified as available for sale and of similar long-term invest-
+ments is more than 20 percent below their cost, or if the value
+has been below its cost for a period of more than twelve
+months, this constitutes objective evidence of impairment.
+For debt instruments, objective evidence of impairment is
+generally deemed present if ratings have deteriorated from
+investment-grade to non-investment-grade. Reversals of
+impairment losses relating to equity instruments are recog-
+nized exclusively in equity, while reversals relating to debt
+instruments are recognized entirely in income.
+Loans and receivables (including trade receivables) are non-
+derivative financial assets with fixed or determinable payments
+that are not traded in an active market. Loans and receivables
+are reported on the balance sheet under "Receivables and
+other assets." They are subsequently measured at amortized
+cost. Valuation allowances are provided for identifiable indi-
+vidual risks.
+Non-derivative financial liabilities (including trade payables)
+within the scope of IAS 39 are measured at amortized cost,
+using the effective interest method. Initial measurement takes
+place at fair value, with transaction costs included in the mea-
+surement. In subsequent periods, the amortization and accre-
+tion of any premium or discount is included in financial results.
+113
+114 Notes
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the trade date at
+initial recognition and in subsequent periods. IAS 39 requires
+that they be categorized as held for trading as long as they are
+not a component of a hedge accounting relationship. Gains
+and losses from changes in fair value are immediately recog-
+nized in net income.
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps and options. In commodities, the instruments used
+include physically and financially settled forwards and options
+related to electricity, gas, coal, oil and emission rights.
+Unconsolidated equity investments and securities are measured
+in accordance with IAS 39, "Financial Instruments: Recognition
+and Measurement" ("IAS 39"). E.ON categorizes financial assets
+as held for trading, available for sale, or as loans and receiv-
+ables. Management determines the categorization of the
+financial assets at initial recognition.
+Liquid Funds
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance
+with IAS 19 (revised 2011), "Employee Benefits," ("IAS 19R" or
+"IAS 19," used synonymously unless explicitly stated otherwise)
+is based on actuarial computations using the projected unit
+credit method, with actuarial valuations performed at year-end.
+The valuation encompasses both pension obligations and
+pension entitlements that are known on the reporting date and
+economic trend assumptions such as assumptions on wage
+and salary growth rates and pension increase rates, among
+others, that are made in order to reflect realistic expectations,
+as well as variables specific to reporting dates such as discount
+rates, for example.
+Restricted cash with a remaining maturity in excess of
+twelve months is classified as financial receivables and other
+financial assets.
+Share-Based Payment
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2"). The E.ON Share Performance Plan introduced in
+fiscal 2006 involves share-based payment transactions that are
+settled in cash and measured at fair value as of each balance
+sheet date. From the sixth tranche forward, the 60-day average
+of the E.ON share price as of the balance sheet date is used
+as the fair value. In addition, the calculation of the provision
+for the sixth tranche takes into account the financial measures
+ROACE and WACC. The final allocations under the E.ON Share
+Performance Plan took place in fiscal 2012. Beginning in the
+2013 fiscal year, share-based payments have been based on the
+E.ON Share Matching Plan. Under this plan, the number of
+allocated rights is governed by the development of the finan-
+cial measure ROACE. The compensation expense is recognized
+in the income statement pro rata over the vesting period. The
+E.ON Share Matching Plan also represents a cash-settled
+share-based payment.
+Combined Group Management Report
+Included in gains and losses from the remeasurements of
+the net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between
+estimated and actual variations in underlying assumptions
+about demographic and financial variables. Additionally
+included is the difference between the actual return on plan
+assets and the interest income on plan assets included in
+the net interest result. Remeasurements effects are recognized
+in full in the period in which they occur and are not reported
+within the Consolidated Statements of Income, but are instead
+recognized within the Statements of Recognized Income and
+Expenses as part of equity.
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fis-
+cal year is reported under personnel costs; the net interest on
+the net liability or asset from defined benefit pension plans
+determined based on the discount rate applicable at the start
+of the fiscal year is reported under financial results.
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+The amount reported on the balance sheet represents the
+present value of the defined benefit obligations reduced by
+the fair value of plan assets. If a net asset position arises
+from this calculation, the amount is limited to the present
+value of available refunds and the reduction in future con-
+tributions and to the benefit from prepayments of minimum
+funding requirements. Such an asset position is recognized
+as an operating receivable.
+or resold. If such treasury shares are subsequently distributed
+or sold, the consideration received, net of any directly attribut-
+able additional transaction costs and associated income taxes,
+is added to E.ON SE's equity.
+117
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+Provisions for Asset Retirement Obligations and
+Other Miscellaneous Provisions
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation
+towards third parties as a result of a past event, it is probable
+that E.ON will be required to settle the obligation, and a reliable
+estimate can be made of the amount of the obligation. The
+provision is recognized at the expected settlement amount.
+Long-term obligations are reported as liabilities at the present
+value of their expected settlement amounts if the interest
+rate effect (the difference between present value and repay-
+ment amount) resulting from discounting is material; future
+cost increases that are foreseeable and likely to occur on the
+balance sheet date must also be included in the measurement.
+Long-term obligations are generally discounted at the market
+interest rate applicable as of the respective balance sheet
+date. The accretion amounts and the effects of changes in inter-
+est rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually cer-
+tain to be collected is capitalized as a separate asset. No
+offsetting within provisions is permitted. Advance payments
+remitted are deducted from the provisions.
+Obligations arising from the decommissioning or dismantling
+of property, plant and equipment are recognized during the
+period of their occurrence at their discounted settlement
+amounts, provided that the obligation can be reliably estimated.
+The carrying amounts of the respective property, plant and
+equipment are increased by the same amounts. In subsequent
+periods, capitalized asset retirement costs are amortized
+over the expected remaining useful lives of the assets, and the
+provision is accreted to its present value on an annual basis.
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or
+the scope of the relevant obligation, and also as a result of the
+regular adjustment of the discount rate to current market
+interest rates. The adjustment of provisions for the decommis-
+sioning and restoration of property, plant and equipment
+for changes to estimates is generally recognized by way of
+a corresponding adjustment to these assets, with no effect on
+income. If the property, plant and equipment to be decom-
+missioned have already been fully depreciated, changes to
+estimates are recognized within the income statement.
+The estimates for non-contractual nuclear decommissioning
+provisions are based on external studies and are continuously
+updated.
+Under Swedish law, E.ON Sverige AB ("E.ON Sverige") is
+required to pay fees to the Swedish Nuclear Waste Fund. The
+Swedish Radiation Safety Authority proposes the fees for
+the disposal of high-level radioactive waste and nuclear power
+plant decommissioning based on the amount of electricity
+produced at that particular nuclear power plant. The proposed
+fees are then submitted to government offices for approval.
+Upon approval, E.ON Sverige makes the corresponding pay-
+ments. In accordance with IFRIC 5, "Rights to Interests Arising
+from Decommissioning, Restoration and Environmental
+Rehabilitation Funds," ("IFRIC 5") payments into the Swedish
+national fund for nuclear waste management are offset by a
+right of reimbursement of asset retirement obligations, which
+is recognized as an asset under "Other assets." In accordance
+with customary procedure in Sweden, the provisions are dis-
+counted at the real interest rate.
+118 Notes
+Liquid funds include current available-for-sale securities, checks,
+cash on hand and bank balances. Bank balances and available-
+for-sale securities with an original maturity of more than three
+months are recognized under securities and fixed-term
+deposits. Liquid funds with an original maturity of less than
+three months are considered to be cash and cash equivalents,
+unless they are restricted.
+Supervisory Board and Board of Management
+Tables and Explanations
+Combined Group Management Report
+Assets Held for Sale and Liabilities Associated
+with Assets Held for Sale
+Individual non-current assets or groups of assets held for
+sale and any directly attributable liabilities (disposal groups)
+are reported in these line items if they can be disposed of
+in their current condition and if there is sufficient probability
+of their disposal actually taking place. For a group of assets
+and associated liabilities to be classified as a disposal group,
+the assets and liabilities in it must be held for sale in a single
+transaction or as part of a comprehensive plan.
+115
+116 Notes
+Discontinued operations are components of an entity that
+are either held for sale or have already been sold and can be
+clearly distinguished from other corporate operations, both
+operationally and for financial reporting purposes. Additionally,
+the component classified as a discontinued operation must
+represent a major business line or a specific geographic busi-
+ness segment of the Group.
+Non-current assets that are held for sale either individually
+or collectively as part of a disposal group, or that belong to
+a discontinued operation, are no longer depreciated. They are
+instead accounted for at the lower of the carrying amount
+and the fair value less any remaining costs to sell. If the fair
+value is less than the carrying amount, an impairment loss
+is recognized.
+The income and losses resulting from the measurement of
+components held for sale at fair value less any remaining
+costs to sell, as well as the gains and losses arising from the
+disposal of discontinued operations, are reported separately
+on the face of the income statement under income/loss from
+discontinued operations, net, as is the income from the ordi-
+nary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance
+sheet. The cash flows of discontinued operations are reported
+separately in the cash flow statement, with prior-year figures
+adjusted accordingly. However, there is no reclassification
+of prior-year balance sheet line items attributable to discon-
+tinued operations.
+Consolidated Financial Statements
+Equity Instruments
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right
+to require E.ON to purchase their shares on specified condi-
+tions. None of the contractual obligations has led to the trans-
+fer of substantially all of the risk and rewards to E.ON at the
+time of entering into the contract. In such a case, IAS 32,
+"Financial Instruments: Presentation," ("IAS 32") requires that
+a liability be recognized at the present value of the probable
+future exercise price. This amount is reclassified from a sepa-
+rate component within non-controlling interests and reported
+separately as a liability. The reclassification occurs irrespective
+of the probability of exercise. The accretion of the liability
+is recognized as interest expense. If a purchase commitment
+expires unexercised, the liability reverts to non-controlling
+interests. Any difference between liabilities and non-controlling
+interests is recognized directly in retained earnings.
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships,
+for example), such termination rights require the reclassifica-
+tion of non-controlling interests from equity into liabilities
+under IAS 32. The liability is recognized at the present value
+of the expected settlement amount irrespective of the prob-
+ability of termination. Changes in the value of the liability are
+reported within other operating income. Accretion of the
+liability and the non-controlling shareholders' share in net
+income are shown as interest expense.
+If an E.ON Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attrib-
+utable additional costs (net after income taxes), is deducted
+from E.ON SE's equity until the shares are retired, distributed
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+IFRS defines equity as the residual interest in the Group's
+assets after deducting all liabilities. Therefore, equity is the
+net amount of all recognized assets and liabilities.
+Strategy and Objectives
+10 to 50 years
+Report of the Supervisory Board
+Fair value less costs to sell
+•
+Value in use, or
+Zero.
+Any additional impairment loss that would otherwise have
+been allocated to the asset concerned must instead be allo-
+cated pro rata to the remaining assets of the unit.
+E.ON has elected to perform the annual testing of goodwill
+for impairment at the cash-generating unit level in the fourth
+quarter of each fiscal year.
+109
+110 Notes
+Intangible Assets
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless
+their lives are considered to be indefinite. Factors such as typ-
+ical product life cycles and legal or similar limits on use are
+taken into account in the classification.
+Acquired intangible assets subject to amortization are classi-
+fied as marketing-related, customer-related, contract-based,
+and technology-based. Internally generated intangible assets
+subject to amortization are related to software. Intangible
+assets subject to amortization are measured at cost and use-
+ful lives. The useful lives of marketing-related, customer-
+related and contract-based intangible assets generally range
+between 5 and 25 years. Technology-based intangible assets
+are generally amortized over a useful life of between 3 and
+5
+years. . This category includes software in particular. Con-
+tract-based intangible assets are amortized in accordance
+with the provisions specified in the contracts. Useful lives
+and amortization methods are subject to annual verification.
+Intangible assets subject to amortization are tested for
+impairment whenever events or changes in circumstances
+indicate that such assets may be impaired.
+Intangible assets not subject to amortization are measured
+at cost and tested for impairment annually or more frequently
+if events or changes in circumstances indicate that such
+assets may be impaired. Moreover, such assets are reviewed
+annually to determine whether an assessment of indefinite
+useful life remains applicable.
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use and
+its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount
+and the recoverable amount is recognized and reported in
+income under "Depreciation, amortization and impairment
+charges."
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset
+subject to amortization to exceed the amount that would
+have been determined, net of amortization, had no impairment
+loss been recognized during the period.
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest
+identifiable group of assets (cash-generating unit) that the
+intangible asset may be assigned to is determined. See Note 14
+for additional information about goodwill and intangible assets.
+•
+If the impairment thus identified exceeds the goodwill allo-
+cated to the affected cash-generating unit, the remaining
+assets of the unit must be written down in proportion to their
+carrying amounts. Individual assets may be written down
+only if their respective carrying amounts do not fall below the
+highest of the following values as a result:
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+value in use. In a first step, E.ON determines the recoverable
+amount of a cash-generating unit on the basis of the fair value
+(less costs to sell) using generally accepted valuation proce-
+dures. This is based on the medium-term planning data of the
+respective cash-generating unit. Valuation is performed using
+the discounted cash flow method, and accuracy is verified
+through the use of appropriate multiples, to the extent avail-
+able. In addition, market transactions or valuations prepared
+by third parties for comparable assets are used to the extent
+available. If needed, a calculation of value in use is also per-
+formed. Unlike fair value, the value in use is calculated from
+the viewpoint of management. In accordance with IAS 36,
+"Impairment of Assets," ("IAS 36") it is further ensured that
+restructuring expenses, as well as initial and subsequent capital
+investments (where those have not yet commenced), in par-
+ticular, are not included in the valuation.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated
+probabilities can not be determined reliably.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Research and Development Costs
+Supervisory Board and Board of Management
+Tables and Explanations
+If a subsidiary or associated company sells shares to a third
+party, leading to a reduction in E.ON's ownership interest in the
+relevant company ("dilution"), and consequently to a loss of
+control, joint control or significant influence, gains and losses
+from these dilutive transactions are included in the income
+statement under other operating income or expenses.
+Earnings per Share
+Basic (undiluted) earnings per share is computed by dividing
+the consolidated net income attributable to the shareholders
+of the parent company by the weighted-average number of
+ordinary shares outstanding during the relevant period. At E.ON,
+the computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued
+no potentially dilutive ordinary shares.
+Goodwill and Intangible Assets
+Goodwill
+According to IFRS 3, "Business Combinations," ("IFRS 3") good-
+will is not amortized, but rather tested for impairment at
+the cash-generating unit level on at least an annual basis.
+Impairment tests must also be performed between these
+annual tests if events or changes in circumstances indicate
+that the carrying amount of the respective cash-generating
+unit might not be recoverable.
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allo-
+cated are generally equivalent to the operating segments, since
+goodwill is reported, and considered in performance metrics for
+controlling, only at that level. With some exceptions, goodwill
+impairment testing is performed in euro, while the underlying
+goodwill is always carried in the functional currency.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of
+the cash-generating unit's fair value less costs to sell and its
+Accounting for Reductions of Shareholdings in Sub-
+sidiaries or Associated Companies
+Under IFRS, research and development costs must be allocated
+to a research phase and a development phase. While expen-
+diture on research is expensed as incurred, recognized devel-
+opment costs must be capitalized as an intangible asset if
+all of the general criteria for recognition specified in IAS 38,
+as well as certain other specific prerequisites, have been ful-
+filled. In the 2014 and 2013 fiscal years, these criteria were not
+fulfilled, except in the case of internally generated software.
+CEO Letter
+Report of the Supervisory Board
+111
+112 Notes
+Exploration for and Evaluation of Mineral Resources
+The exploration and field development expenditures are
+accounted for using the so-called "successful efforts method."
+In accordance with IFRS 6, "Exploration for and Evaluation of
+Mineral Resources," ("IFRS 6") expenditures for exploratory
+drilling for which the outcome is not yet certain are initially
+capitalized as an intangible asset.
+Upon discovery of oil and/or gas reserves and field develop-
+ment approval, the relevant expenditures are reclassified as
+property, plant and equipment. Such property, plant and
+equipment is then depreciated in accordance with production
+volumes. For uneconomical drilling, the previously capitalized
+expenditures are immediately expensed. Other capitalized
+expenditures are also written off once it is determined that
+no viable reserves could be found. Other expenses for geo-
+logical and geophysical work (seismology) and licensing fees
+are immediately expensed.
+Borrowing Costs
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the
+time of acquisition or from the beginning of construction or
+production until its entry into service are capitalized and
+subsequently amortized alongside the related asset. In the case
+of a specific financing arrangement, the respective borrowing
+costs incurred for that particular arrangement during the period
+are used. For non-specific financing arrangements, a financing
+rate uniform within the Group of 5.5 percent was applied for
+2014 (2013: 5.25 percent). Other borrowing costs are expensed.
+Government Grants
+Property, plant and equipment are tested for impairment
+whenever events or changes in circumstances indicate that an
+asset may be impaired. In such a case, property, plant and
+equipment are tested for impairment according to the prin-
+ciples prescribed for intangible assets in IAS 36. If an impair-
+ment loss is determined, the remaining useful life of the asset
+Government investment subsidies do not reduce the acquisi-
+tion and production costs of the respective assets; they are
+instead reported on the balance sheet as deferred income.
+They are recognized in income on a straight-line basis over
+the associated asset's expected useful life.
+Government grants for costs are posted as income over the
+period in which the costs to be compensated through the
+respective grants are incurred.
+Leasing
+Leasing transactions are classified according to the lease
+agreements and to the underlying risks and rewards specified
+therein in line with IAS 17, "Leases" ("IAS 17"). In addition,
+IFRIC 4, "Determining Whether an Arrangement Contains a
+Lease," ("IFRIC 4") further defines the criteria as to whether
+an agreement that conveys a right to use an asset meets the
+definition of a lease. Certain purchase and supply contracts
+in the electricity and gas business as well as certain rights of
+use may be classified as leases if the criteria are met. E.ON
+is party to some agreements in which it is the lessor and to
+others in which it is the lessee.
+Leasing transactions in which E.ON is the lessee are classified
+either as finance leases or operating leases. If the Company
+bears substantially all of the risks and rewards incident to own-
+ership of the leased property, the lease is classified as a finance
+lease. Accordingly, the Company recognizes on its balance
+sheet the asset and the associated liability in equal amounts.
+Recognition takes place at the beginning of the lease term
+at the lower of the fair value of the leased property or the
+present value of the minimum lease payments.
+The leased property is depreciated over its useful economic
+life or, if it is shorter, the term of the lease. The liability is sub-
+sequently measured using the effective interest method.
+CEO Letter
+Government grants are recognized at fair value if it is highly
+probable that the grant will be issued and if the Group satis-
+fies the necessary conditions for receipt of the grant.
+E.ON Stock
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Investment subsidies do not reduce the acquisition and
+production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income.
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Emission Rights
+Under IFRS, emission rights held under national and interna-
+tional emission-rights systems for the settlement of obligations
+are reported as intangible assets. Because emission rights
+are not depleted as part of the production process, they are
+reported as intangible assets not subject to amortization.
+Emission rights are capitalized at cost at the time of acquisition.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part
+of the acquisition or production cost of the asset, or else—if
+relevant-recognized as a separate asset if it is probable that
+the Group will receive a future economic benefit and the cost
+can be determined reliably.
+A provision is recognized for emissions produced. The provision
+is measured at the carrying amount of the emission rights
+held or, in the case of a shortfall, at the current fair value of the
+emission rights needed. The expenses incurred for the recog-
+nition of the provision are reported under cost of materials.
+Property, plant and equipment are initially measured at acqui-
+sition or production cost, including decommissioning or res-
+toration cost that must be capitalized, and are depreciated
+over the expected useful lives of the components, generally
+using the straight-line method, unless a different method of
+depreciation is deemed more suitable in certain exceptional
+cases. The useful lives of the major components of property,
+plant and equipment are presented below:
+Useful Lives of Property, Plant and
+Equipment
+Buildings
+Technical equipment, plant and machinery
+Other equipment, fixtures, furniture and
+office equipment
+10 to 65 years
+3 to 25 years
+might also be subject to adjustment, where applicable. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed and recognized in
+income. Such reversal shall not cause the carrying amount to
+exceed the amount that would have resulted had no impair-
+ment taken place during the preceding periods.
+Property, Plant and Equipment
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed
+in subsequent reporting periods.
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+The Consolidated Statements of Income are classified using
+the nature of expense method, which is also applied for
+internal purposes.
+After initial
+application
+of IFRS 10,
+IFRS 11
+131,112
+After initial
+application
+IAS 32
+adjustment
+of new
+standards
+1,218
+132,330
+Companies accounted for under the equity method
+5,624
+-86
+5,652
+5,652
+710
+Non-current liabilities
+-321
+1,397
+62,130
+1,049
+63,179
+Financial liabilities
+18,237
+-318
+132
+18,051
+18,051
+Miscellaneous provisions
+61,054
+-323
+130,725
+IFRS 11
+adjustment
+4,007
+-6
+-381
+3,620
+3,620
+Trade payables and other operating liabilities
+25,935
+-164
+-418
+25,353
+482
+25,835
+Equity
+38,820
+162
+142
+39,124
+39,124
+Newly Adopted Standards-Consolidated Balance Sheet as of December 31, 2013
+Before
+initial
+application
+of new
+€ in millions
+Total assets
+standards
+IFRS 10
+adjustment
+23,470
+1,265
+24,735
+24,735
+IFRS 11
+adjustment
+After
+IFRS 10, IFRS 11
+adjustments
+-17
+5
+124,202
+Income from continuing operations
+2,503
+-54
+3
+2,452
+Net income
+2,510
+-54
+3
+2,459
+¹The figures presented here do not include the reclassifications to discontinued operations (see also Note 4).
+123
+124 Notes
+Amendments to IAS 36-
+Recoverable Amount Disclosures
+In May 2013, the IASB published "Recoverable Amount Dis-
+closures for Non-Financial Assets (Amendments to IAS 36)."
+IAS 36 was amended to clarify that disclosures are required
+only for impaired assets or for cash-generating units. The new
+standard has been adopted by the EU into European law and
+its application is mandatory for fiscal years beginning on
+or after January 1, 2014. E.ON had already elected to apply the
+amendments early in the 2013 fiscal year.
+Amendments to IAS 39-Novation of Derivatives
+and Continuation of Hedge Accounting
+In June 2013, the IASB published narrow-scope amendments to
+IAS 39, "Financial Instruments: Recognition and Measurement."
+The amendments provide that the requirement to discontinue
+hedge accounting shall not apply to the novation of a hedging
+instrument to a central counterparty if such novation is required
+by laws or regulations and if specific conditions are met. A
+hedging relationship is not discontinued if the novation is
+required by a new legal or regulatory requirement or by a newly
+enacted law. In addition, the novation must result in the origi-
+nal counterparty being replaced by a central counterparty or
+by an entity acting as a counterparty ("clearing counterparty").
+The only contractual changes permitted are those necessary
+to effect counterparty replacement. These include changes in
+the contractual collateral requirements, changes in rights to
+offset receivables and payables and changes in the charges
+levied. The amendments have been adopted by the EU into
+European law and their application is mandatory for fiscal years
+beginning on or after January 1, 2014. The amendments have
+no impact on E.ON's Consolidated Financial Statements.
+Changes in Accounting Policies
+In line with developments in accounting practice, E.ON has
+adjusted the presentation of cash contributions to plan assets.
+Such cash deposits are now presented as investing cash flow.
+Accordingly, outflows of €97 million were reclassified from the
+previous year's operating cash flow to investing cash flow.
+The effects relate especially to the United Kingdom regional
+unit. This accounting change leads to a consistent presentation
+of the funding of plan assets with regard to cash funding and
+other forms of funding.
+IFRS 10
+adjustment
+Financial liabilities
+Before
+IFRS 10, IFRS 11
+adjustments
+124,214
+€ in millions
+Current liabilities
+33,286
+-110
+-832
+32,344
+169
+32,513
+Financial liabilities
+5,023
+-350
+4,673
+4,673
+Trade payables and other operating liabilities
+21,866
+-103
+-475
+21,288
+169
+21,457
+Equity
+36,385
+108
+145
+36,638
+36,638
+IFRS 10, IFRS 11-Consolidated Income Statement
+20131
+Sales
+36,065
+482
+35,583
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets,
+the accounting treatment of provisions for pensions and mis-
+cellaneous provisions, for impairment testing in accordance
+with IAS 36, as well as for the determination of the fair value
+of certain financial instruments.
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+(2) New Standards and Interpretations
+Standards and Interpretations Applicable in 2014
+The International Accounting Standards Board ("IASB") and
+the IFRS Interpretations Committee ("IFRS IC") have issued
+the following standards and interpretations that have been
+adopted by the EU into European law and whose application
+is mandatory in the reporting period from January 1, 2014,
+through December 31, 2014:
+IFRS 10, "Consolidated Financial Statements"
+In May 2011, the IASB published the new standard IFRS 10,
+"Consolidated Financial Statements" ("IFRS 10"). This IFRS
+replaces the existing guidance on control and consolidation
+contained in IAS 27, "Consolidated and Separate Financial
+Statements," and in SIC-12, "Consolidation-Special Purpose
+Entities" ("SIC-12"). IFRS 10 establishes a uniform definition
+of the term "control," with greater emphasis on the principle of
+substance over form than in the past. The new standard can
+thus give rise to an altered scope of consolidation. The stan-
+dard has been adopted by the EU into European law. IFRS 10
+shall in all cases be applied retrospectively for fiscal years
+beginning on or after January 1, 2014. Because of the initial
+application of IFRS 10, one company is no longer consolidated.
+IFRS 11, "Joint Arrangements"
+In May 2011, the IASB published the new standard IFRS 11. It
+replaces IAS 31, "Interests in Joint Ventures," ("IAS 31") and SIC-13,
+"Jointly Controlled Entities-Non-Monetary Contributions
+by Venturers" ("SIC-13"). The standard will in future distinguish
+between two types of joint arrangements: joint ventures
+and joint operations. The provisions of IFRS 10 form the basis
+for determining joint control. If after assessing the particular
+facts a joint venture is determined to exist, it must be
+accounted for using the equity method. In the case of a joint
+operation, however, the attributable shares of assets and lia-
+bilities, and of expenses and income, must be assigned directly
+to the equity holder. The standard has been adopted by the
+EU into European law. Consequently, application of the new
+standard is mandatory for fiscal years beginning on or after
+January 1, 2014. Because of the initial application of IFRS 11,
+two companies are now accounted for as joint operations.
+IFRS 12, "Disclosure of Interests in Other Entities"
+IFRS 12 regulates the disclosure requirements for both IFRS 10
+and IFRS 11, and was published by the IASB together with
+these standards on May 12, 2011. The standard requires entities
+to publish information on the nature of their holdings, the
+associated risks and the effects on their net assets, financial
+position and results of operations. This information is required
+for subsidiaries, joint arrangements, associates and unconsoli-
+dated structured units (special-purpose entities). Important
+discretionary decisions and assumptions, including any changes
+to them, that were made in determining control according to
+IFRS 10 and for joint arrangements must also be disclosed. The
+new standard has been adopted by the EU into European law
+and its application is mandatory for fiscal years beginning on
+or after January 1, 2014.
+IAS 27, "Separate Financial Statements"
+In May 2011, the IASB published a new version of IAS 27. The
+new version now contains regulations for IFRS separate
+financial statements only (previously consolidated and sepa-
+rate financial statements). The standard has been adopted
+by the EU into European law. Consequently, application of the
+new standard is mandatory for fiscal years beginning on or
+after January 1, 2014. The new standard will have no impact on
+E.ON's Consolidated Financial Statements.
+IAS 28, "Investments in Associates and Joint Ventures"
+In May 2011, the IASB published a new version of IAS 28. The
+new version now stipulates that in planned partial disposals
+of interests in associates and joint ventures, the portion to be
+sold must, if it meets the criteria of IFRS 5, "Non-Current Assets
+121
+122 Notes
+Held For Sale and Discontinued Operations," ("IFRS 5") be
+classified as a non-current asset held for sale. The remaining
+investment shall continue to be accounted for using the equity
+method. If the sale results in the creation of an associate, that
+associate will be accounted for using the equity method. Other-
+wise, the rules of IFRS 9 must be followed. The new IAS 28
+incorporates the provisions of SIC-13 and removes currently
+existing exceptions from the scope of IAS 28. The new version
+of the standard has been adopted by the EU into European
+law. Its application shall thus be mandatory for fiscal years
+beginning on or after January 1, 2014. It will not result in mate-
+rial changes for E.ON affecting its Consolidated Financial
+Statements.
+If IFRS 10 and IFRS 11 were not being applied, and if instead
+IAS 27 and IAS 28 were still being applied in the versions effec-
+tive through December 31, 2013, assets and liabilities would
+be €190 million higher and net income would be €8 million
+lower as of December 31, 2014.
+Amendments to IFRS 10, IFRS 11 and IFRS 12-
+Consolidated Financial Statements, Joint Arrange-
+ments and Disclosure of Interests in Other Entities:
+Transition Guidance
+In June 2012, the IASB published "Consolidated Financial
+Statements, Joint Arrangements and Disclosure of Interests in
+Other Entities: Transition Guidance (Amendments to IFRS 10,
+IFRS 11 and IFRS 12)." The amendments clarify the transition
+guidance contained in IFRS 10, and they also provide additional
+relief for the first-time adoption of all three standards. Adjusted
+comparative information need now be provided only for the
+immediately preceding comparative period. For unconsolidated
+structured entities, the requirement to present comparative
+information for periods before IFRS 12 is first applied is removed
+altogether. The amendments shall be applied for fiscal years
+beginning on or after January 1, 2014, which coincides with the
+effective date of IFRS 10, IFRS 11 and IFRS 12. The amendments
+have been adopted by the EU into European law. There will
+be no impact on E.ON's Consolidated Financial Statements.
+The estimates and underlying assumptions are reviewed on
+an ongoing basis. Adjustments to accounting estimates are
+recognized in the period in which the estimate is revised if the
+change affects only that period, or in the period of the revision
+and subsequent periods if both current and future periods
+are affected.
+Amendments to IFRS 10, IFRS 12 and IAS 27—
+Investment Entities
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions
+that may influence the application of accounting principles
+within the Group and affect the measurement and presenta-
+tion of reported figures. Estimates are based on past experience
+and on additional knowledge obtained on transactions to
+be reported. Actual amounts may differ from these estimates.
+Based on our EBITDA in 2014 of €8,337 million (2013: €9,191 mil-
+lion) and economic net debt of €33,394 million as of the bal-
+ance sheet date (2013: €32,218 million), the debt factor is 4.0
+(2013: 3.5).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+are recognized at the lower of the excess obligation upon
+performance under the contract and any potential penalties
+or compensation arising in the event of non-performance.
+Obligations under an open contractual relationship are deter-
+mined from a customer perspective.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of
+resources embodying economic benefits is not probable or
+where the amount of the obligation cannot be measured
+with sufficient reliability. Contingent liabilities are generally
+not recognized on the balance sheet.
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan
+has been decided on by management and publicly announced
+or communicated to the employees or their representatives.
+Only those expenses that are directly attributable to the restruc-
+turing measures are used in measuring the amount of the
+provision. Expenses associated with the future operation are
+not taken into consideration.
+Income Taxes
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are recog-
+nized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that
+will result in taxable or deductible amounts when taxable
+income is calculated for future periods, unless those differences
+are the result of the initial recognition of an asset or liability
+in a transaction other than a business combination that, at the
+time of the transaction, affects neither accounting nor taxable
+profit/loss. Uncertain tax positions are recognized at their most
+likely value. IAS 12 further requires that deferred tax assets
+be recognized for unused tax loss carryforwards and unused
+tax credits. Deferred tax assets are recognized to the extent
+that it is probable that taxable profit will be available against
+which the deductible temporary differences and unused
+tax losses can be utilized. Each of the corporate entities is
+assessed individually with regard to the probability of a
+positive tax result in future years. Any existing history of losses
+is incorporated in this assessment. For those tax assets to
+which these assumptions do not apply, the value of the deferred
+tax assets is reduced.
+Deferred tax liabilities caused by temporary differences asso-
+ciated with investments in affiliated and associated compa-
+nies are recognized unless the timing of the reversal of such
+temporary differences can be controlled within the Group
+and it is probable that, owing to this control, the differences
+will in fact not be reversed in the foreseeable future.
+Deferred tax assets and liabilities are measured using the
+enacted or substantively enacted tax rates expected to be
+applicable for taxable income in the years in which temporary
+differences are expected to be recovered or settled. The
+effect on deferred tax assets and liabilities of changes in tax
+rates and tax law is generally recognized in income. Equity
+is adjusted for deferred taxes that had previously been recog-
+nized directly in equity.
+Deferred taxes for domestic companies are calculated using
+a total tax rate of 30 percent (2013: 30 percent). This tax rate
+includes, in addition to the 15 percent (2013: 15 percent)
+corporate income tax, the solidarity surcharge of 5.5 percent
+on the corporate tax (2013: 5.5 percent on the corporate tax),
+and the average trade tax rate of 14 percent (2013: 14 percent)
+applicable to the E.ON Group. Foreign subsidiaries use appli-
+cable national tax rates.
+Note 10 shows the major temporary differences so recorded.
+119
+120 Notes
+Consolidated Statements of Cash Flows
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7")
+the Consolidated Statements of Cash Flows are classified
+by operating, investing and financing activities. Cash flows
+from discontinued operations are reported separately in
+the Consolidated Statement of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions
+and disposals of companies are reported net of any cash and
+cash equivalents acquired (disposed of) under investing activ-
+ities if the respective acquisition or disposal results in a gain
+or loss of control. In the case of acquisitions and disposals that
+do not, respectively, result in a gain or loss of control, the cor-
+responding cash flows are reported under financing activities.
+The impact on cash and cash equivalents of valuation changes
+due to exchange rate fluctuations is disclosed separately.
+Segment Information
+In accordance with the so-called management approach
+required by IFRS 8, "Operating Segments," ("IFRS 8") the inter-
+nal reporting organization used by management for making
+decisions on operating matters is used to identify the Com-
+pany's reportable segments. The internal performance mea-
+sure used as the segment result is earnings before interest,
+taxes, depreciation and amortization ("EBITDA") adjusted to
+exclude certain extraordinary effects (see Note 33).
+Structure of the Consolidated Balance Sheets and
+Statements of Income
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well
+as liabilities that are due to be settled within one year of the
+reporting date are generally classified as current.
+Capital Structure Management
+E.ON uses the debt factor as the measure for the manage-
+ment of its capital structure. The debt factor is defined as the
+ratio of economic net debt to our EBITDA. Economic net debt
+supplements net financial position with provisions for pen-
+sions and asset retirement obligations.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting
+Policies
+An altered construal of IFRIC 12 led to the gross presentation
+of certain specific issues. To improve comparability, the 2013
+figures for sales and cost of materials were both adjusted by
+€73 million.
+In October 2012, the IASB published "Investment Entities
+(Amendments to IFRS 10, IFRS 12 and IAS 27)." The amendments
+include a definition of an investment entity and remove them
+from the scope of IFRS 10. Instead of consolidating their
+investments in subsidiaries, parent investment entities shall
+now be required to recognize and measure them at fair value
+through profit or loss in accordance with IFRS 9 or IAS 39. In
+this context, new disclosure requirements have also arisen
+in IFRS 12, "Disclosure of Interests in Other Entities” and IAS 27,
+"Separate Financial Statements." In November 2013, the EU
+adopted these amendments into European law. The amend-
+ments shall be applied for fiscal years beginning on or after
+January 1, 2014. Earlier application is permitted. They will
+result in no material changes for E.ON affecting its Consoli-
+dated Financial Statements.
+In December 2011, the IASB published amendments to IAS 32
+and IFRS 7. Entities shall in future be required to disclose
+gross and net amounts from offsetting, as well as amounts for
+existing rights of set-off that do not meet the accounting
+criteria for offsetting. In addition, inconsistencies in applying
+the existing rules for offsetting financial assets and financial
+liabilities have been eliminated. The amendments mentioned
+have different first-time application dates. The amendments
+to IAS 32 shall be applied for fiscal years beginning on or after
+January 1, 2014. The amendments have been adopted by the EU
+into European law. The initial application of the amendments
+to IAS 32 resulted in a balance sheet expansion of about
+€1.4 billion as an effect of the switch to gross presentation.
+4,067
+155
+-83
+4,139
+4,139
+Non-current liabilities
+65,027
+-332
+1,426
+66,121
+975
+67,096
+Financial liabilities
+21,937
+-318
+147
+21,766
+21,766
+Miscellaneous provisions
+23,656
+1,279
+24,935
+24,935
+Current liabilities
+36,579
+-174
+-822
+Companies accounted for under the equity method
+Amendments to IAS 32, "Financial Instruments:
+Presentation," and to IFRS 7, "Financial Instruments:
+Disclosures"
+142,285
+140,828
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+The effects of the initial application of IFRS 10, IFRS 11 and
+IAS 32 on the Consolidated Balance Sheet and on the Consol-
+idated Statement of Income are shown in the following tables:
+Newly Adopted Standards-Consolidated Balance Sheet as of January 1, 2013
+After initial
+application
+Before
+initial
+application
+After initial
+application
+of new
+IFRS 10
+IFRS 11
+€ in millions
+standards
+adjustment adjustment
+of IFRS 10,
+IFRS 11
+IAS 32
+of new
+adjustment
+standards
+Total assets
+140,426
+-344
+746
+1,457
+Standards and Interpretations Not Yet Applicable
+114
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. These standards and inter-
+pretations are not being applied by E.ON in the 2014 fiscal year
+because adoption by the EU remains outstanding at this time
+for some of them, or because their application is not yet
+mandatory.
+2014
+€ in millions
+Selected Financial Information-
+E.ON Spain (Summary)
+The following tables show selected financial information,
+including the goodwill impairment attributable to discontinued
+operations, as well as major balance sheet data of the Spain
+regional unit now being reported as discontinued operations:
+The agreed transaction volume for the equity and for the
+assumption of liabilities and working capital positions was
+€2.4 billion. The respective classification as discontinued
+operations and disposal groups required that the Spanish and
+Portuguese businesses be measured at the agreed purchase
+price. This remeasurement produced a goodwill impairment
+of approximately €0.3 billion.
+The activities sold include all of E.ON's Spanish and Portuguese
+businesses, including 650,000 electricity and gas customers
+and electricity distribution networks extending over a total
+distance of 32,000 kilometers. In addition, the activities
+include a total generation capacity of 4 GW from coal, gas,
+and renewable sources in Spain and Portugal. While the
+Spain regional unit is reported as a discontinued operation,
+the Spanish generation businesses held in the Generation
+and Renewables segments have been classified as disposal
+groups as of November 31, 2014.
+At the end of November 2014, E.ON entered into contracts with
+a subsidiary of Macquarie European Infrastructure Fund IV LP
+(the "Macquarie Fund"), London, United Kingdom, on the sale
+of its Spanish and Portuguese activities.
+E.ON in Spain
+Discontinued Operations and Assets Held for Sale
+in 2014
+(4) Acquisitions, Disposals and Discontinued
+Operations
+128 Notes
+127
+operations.
+¹This figures also includes the Spanish and Italian entities reported as discontinued
+In 2014, a total of 19 domestic and 35 foreign associated com-
+panies were accounted for under the equity method (2013:
+22 domestic and 37 foreign). One domestic and one foreign
+company, each reported as a joint operation, were presented
+pro rata (2013: 1 domestic and 1 foreign). Reflected in the
+figures presented here are the retrospective change to the
+scope of consolidation and the retrospective joint-operation
+accounting resulting from the initial application of IFRS 10
+and IFRS 11. Significant acquisitions, disposals and discontinued
+operations are discussed in Note 4.
+317
+210
+107
+as of December 31, 20141
+Consolidated companies
+30
+22
+8
+5
+4
+1
+Disposals/Mergers
+Additions
+342
+Sales
+228
+2013
+1,078
+-1,292
+in 2014
+As the disposal process took greater shape, it became
+necessary to reexamine the measurement of the Italian busi-
+nesses on the basis of the expected proceeds on disposal. This
+remeasurement resulted in an impairment of approximately
+€1.3 billion, of which roughly €0.1 billion was charged to
+goodwill and roughly €1.2 billion to other non-current assets.
+The non-controlling interest in Gestione Energetica Impianti
+S.p.A. ("GEI"), Crema, Italy, was already sold in December 2014.
+Also agreed in December 2014 was the disposal of the Italian
+coal and gas generation assets to the Czech energy company
+Energetický a Průmyslový Holding ("EPH"), Prague, Czech
+Republic. A further contract on the sale of the solar activities
+was signed with F2i SGR S.p.A., Milan, Italy, in February 2015.
+As of December 31, 2014, against the backdrop of specifying
+its divestment intentions, E.ON reported the Italy regional
+unit as a discontinued operation, and the Italian businesses
+held in its Generation and Renewables segments-except
+for the wind-power activities-as disposal groups.
+E.ON in Italy
+As of December 31, 2014, the major asset items of the activities
+held as a disposal group were property, plant and equipment
+(€1.1 billion), intangible assets and goodwill (€0.4 billion),
+financial assets (€0.1 billion) and current assets (€0.4 billion).
+The liability items consisted primarily of provisions and
+liabilities of approximately €0.2 billion each. Approximately
+€0.1 billion in OCI relating primarily to actuarial gains and
+losses is attributable to the activities in Spain. The contracts
+are expected to be finalized in the first quarter of 2015.
+862
+1,400
+397
+1,003
+December 31, 2014
+Total liabilities
+Total assets
+Other assets
+Intangible assets
+€ in millions
+E.ON Spain (Summary)
+Major Balance Sheet Line Items-
+50
+-200
+operations, net
+Income/Loss from discontinued
+1
+7
+Income taxes
+49
+-207
+Income/Loss from continuing operations
+before income taxes
+-1,029
+Other income/expenses, net
+114
+1,085
+Consolidated companies
+In June 2014, the IASB published amendments to IAS 16 and
+IAS 41. They provide that bearer plants shall be accounted for
+in the same way as property, plant and equipment, in accor-
+dance with IAS 16. IAS 41 shall continue to apply for the pro-
+duce they bear. As a result of the amendments, bearer plants
+will in future no longer be measured at fair value less esti-
+mated costs to sell, but rather in accordance with IAS 16,
+using either a cost model or a revaluation model. The amend-
+ments shall be applied for fiscal years beginning on or after
+January 1, 2016. Earlier application is permitted. They have not
+yet been adopted by the EU into European law. The amend-
+ments will have no impact on E.ON's Consolidated Financial
+Statements.
+Amendments to IAS 16 and IAS 41-Agriculture:
+Bearer Plants
+In May 2014, the IASB published amendments to IAS 16 and
+IAS 38. The amendments contain further guidance on which
+methods can be used to depreciate property, plant and equip-
+ment, and to amortize intangible assets. In particular, they
+clarify that the use of a revenue-based method arising from
+an activity that includes the use of an asset does not provide
+an appropriate representation of its consumption. Within the
+context of IAS 38, however, this presumption can be rebutted
+in certain limited circumstances. The amendments shall be
+applied for fiscal years beginning on or after January 1, 2016.
+Earlier application is permitted. They have not yet been
+adopted by the EU into European law. E.ON anticipates that
+the amendments will have no impact on its Consolidated
+Financial Statements.
+Amendments to IAS 16 and IAS 38-Clarification
+of Acceptable Methods of Depreciation and
+Amortization
+Standards," to have the exemption extended to business
+combinations. Accordingly, it now also includes past acquisi-
+tions of interests in joint operations in which the activity of
+the joint operation constitutes a business. The amendments
+shall be applied for fiscal years beginning on or after January 1,
+2016. Earlier application is permitted. They have not yet been
+adopted by the EU into European law. E.ON anticipates that
+the amendments will have no impact on its Consolidated Finan-
+cial Statements.
+In May 2014, the IASB published amendments to IFRS 11. The
+standard thus amended requires the acquirer of an interest
+in a joint operation in which the activity constitutes a business
+as defined in IFRS 3 to apply all of the principles relating to
+business combinations accounting in IFRS 3 and other stan-
+dards, as long as those principles are not in conflict with the
+guidance in IFRS 11. Accordingly, the relevant information
+specified in those standards is to be disclosed. These amend-
+ments necessitated consequential amendments to IFRS 1,
+"First-time Adoption of International Financial Reporting
+Amendments to IFRS 11-Accounting for Acquisitions
+of Interests in Joint Operations
+In September 2014, the IASB published amendments to IFRS 10
+and IAS 28. The amendments provide that unrealized gains
+from transactions between an investor and an associated com-
+pany or a joint venture should be recognized in full by the
+investor if the transaction involves a business. In transactions
+where only assets are being sold, the recognition of gains
+shall be partial. The amendments shall be applied for fiscal
+years beginning on or after January 1, 2016. Earlier application
+is permitted. They have not yet been adopted by the EU into
+European law. E.ON anticipates that the amendments will have
+no impact on its Consolidated Financial Statements.
+Amendments to IFRS 10 and IAS 28-Sale or
+Contribution of Assets between an Investor and
+its Associate or Joint Venture
+In December 2014, the IASB published amendments to IAS 1.
+They are primarily intended to clarify disclosures of material
+information, and of the aggregation and disaggregation of line
+items on the balance sheet and in the statement of compre-
+hensive income. The amendments further provide that an
+entity's share of the other comprehensive income of companies
+accounted for using the equity method shall be presented
+in its statement of comprehensive income. The amendments
+shall be applied for fiscal years beginning on or after January 1,
+2016. Earlier application is permitted. They have not yet been
+adopted by the EU into European law. E.ON anticipates that
+the amendments will have no impact on its Consolidated
+Financial Statements.
+Amendments to IAS 1, "Presentation of Financial
+Statements"
+126 Notes
+In December 2014, the IASB published amendments to IFRS 10,
+IFRS 12 and IAS 28. The amendments are designed to clarify
+that entities that are both investment entities and parent
+entities are exempt from presenting consolidated financial
+statements even if they are themselves subsidiaries. They
+further clarify that subsidiaries providing investment-related
+services that are themselves investment entities shall be
+measured at fair value. For non-investment entities, they clarify
+that such entities should account for an investment entity
+using the equity method. The amendments shall be applied for
+fiscal years beginning on or after January 1, 2016. Earlier appli-
+cation is permitted. They have not yet been adopted by the
+EU into European law. E.ON anticipates that the amendments
+will have no impact on its Consolidated Financial Statements.
+Amendments to IFRS 10, IFRS 12 and IAS 28-
+Investment Entities: Applying the Consolidation
+Exception
+CEO Letter
+Omnibus Standard to Amend Multiple International
+Financial Reporting Standards (2012-2014 Cycle)
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In September 2014, the IASB pub-
+lished a corresponding omnibus standard. It contains changes
+to IFRS and their associated Bases for Conclusions. The revi-
+sions affect the standards IFRS 5, IFRS 7, IAS 19 and IAS 34.
+The amendments shall be applied for fiscal years beginning
+on or after January 1, 2016. Earlier application is permitted.
+They will result in no material changes for E.ON affecting its
+Consolidated Financial Statements.
+Omnibus Standard to Amend Multiple International
+Financial Reporting Standards (2010-2012 Cycle)
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In December 2013, the IASB pub-
+lished a corresponding omnibus standard. It contains changes
+to IFRS and their associated Bases for Conclusions. The revi-
+sions affect the standards IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16,
+IAS 24 and IAS 38. The EU has adopted these amendments
+into European law. Consequently, they shall be applied for fiscal
+years beginning on or after February 1, 2015. They will result
+in no material changes for E.ON affecting its Consolidated
+Financial Statements.
+IFRS 15, "Revenue from Contracts with Customers"
+In May 2014, the IASB published the new standard IFRS 15,
+"Revenue from Contracts with Customers" ("IFRS 15"). IFRS 15
+will replace IAS 11, "Construction Contracts," IAS 18, "Revenue,"
+IFRIC 13, "Customer Loyalty Programmes," IFRIC 15, "Agreements
+for the Construction of Real Estate," IFRIC 18, "Transfers of
+Assets from Customers," and SIC-31, "Revenue-Barter Trans-
+actions Involving Advertising Services." The standard defines
+when revenues should be recognized and in what amount.
+According to IFRS 15, revenues should be recognized in the
+amount that reflects the consideration expected for the per-
+formance obligations being undertaken. The standard shall be
+applied for fiscal years beginning on or after January 1, 2017.
+Earlier application is permitted. The standard has not yet been
+adopted by the EU into European law. E.ON is currently evalu-
+ating the impact on its Consolidated Financial Statements.
+In January 2014, the IASB published the new standard IFRS 14,
+"Regulatory Deferral Accounts" ("IFRS 14"). IFRS 14 gives an
+entity the option to apply this standard in its first IFRS finan-
+cial statements if it conducts rate-regulated activities and
+recognizes regulatory deferrals under the accounting policies
+it had previously applied. The intention is to allow entities
+that are subject to rate regulation to avoid having to make
+changes to accounting policies relating to regulatory deferrals.
+IFRS 14 shall be applied for fiscal years beginning on or after
+January 1, 2016. The standard has not yet been adopted by
+the EU into European law. The introduction of the standard has
+no impact on the E.ON Consolidated Financial Statements as
+they are already prepared in accordance with IFRS.
+IFRS 14, "Regulatory Deferral Accounts"
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In November 2009 and October 2010, respectively, the IASB
+published phases of the new standard IFRS 9, "Financial Instru-
+ments" ("IFRS 9"). Under IFRS 9, all financial instruments cur-
+rently within the scope of IAS 39 will henceforth generally be
+subdivided into only two classifications: financial instruments
+measured at amortized cost and financial instruments mea-
+sured at fair value. As part of the revisions of July 24, 2014, an
+additional measurement category has been introduced for
+debt instruments. These may in future be measured at fair
+value through other comprehensive income as long as the
+prerequisites for the corresponding business model and the
+contractual cash flows are met. The application of IFRS 9 is
+to be mandatory for fiscal years beginning on or after January 1,
+2018. Earlier application is permitted. In that context, the
+IASB also issued a discussion paper on further rules for macro
+hedge accounting, separately from IFRS 9. The standard has
+not yet been adopted by the EU into European law. E.ON is
+currently evaluating the impact on its Consolidated Financial
+Statements.
+as of December 31, 2013
+IFRS 9, "Financial Instruments"
+Omnibus Standard to Amend Multiple International
+Financial Reporting Standards (2011-2013 Cycle)
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In December 2013, the IASB pub-
+lished a corresponding omnibus standard. It contains changes
+to IFRS and their associated Bases for Conclusions. The revi-
+sions affect the standards IFRS 1, IFRS 3, IFRS 13 and IAS 40.
+The EU has adopted these amendments into European law.
+Consequently, they shall be applied for fiscal years beginning
+on or after January 1, 2015. They will result in no material changes
+for E.ON affecting its Consolidated Financial Statements.
+Report of the Supervisory Board
+125
+E.ON Stock
+Disposals/Mergers
+Additions
+450
+297
+153
+Consolidated companies
+as of January 1, 2013
+Foreign
+Domestic
+126
+43
+18
+14
+4
+Total
+83
+The number of consolidated companies changed as follows:
+Strategy and Objectives
+Combined Group Management Report
+Scope of Consolidation
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Amendments to IAS 19-Defined Benefit Plans:
+Employee Contributions
+In November 2013, the IASB published amendments to
+IAS 19. This pronouncement amends IAS 19 in respect of the
+accounting for defined benefit plans involving contributions
+from employees (or third parties). If the contributions made
+by employees (or third parties) to a defined benefit plan are
+independent of the number of years of service, their nominal
+amount can still be deducted from the service cost. But if
+employee contributions vary according to the number of years
+of service, the benefits must be computed and attributed by
+applying the projected unit credit method. The amendments
+shall be applied for fiscal years beginning on or after July 1,
+2014. Earlier application is permitted. They have been adopted
+by the EU into European law. Consequently, application of the
+new amendments will be mandatory for fiscal years beginning
+on or after February 1, 2015. E.ON anticipates that the amend-
+ments will have no material impact on its Consolidated
+Financial Statements.
+Amendments to IAS 27-
+the separate financial statements of an investor. The amend-
+ments shall be applied retrospectively in accordance with
+IAS 8, "Accounting Policies, Changes in Accounting Estimates
+and Errors," for fiscal years beginning on or after January 1,
+2016. Earlier application is permitted. They have not yet been
+adopted by the EU into European law. The amendments will
+have no impact on E.ON's Consolidated Financial Statements.
+IFRIC 21, "Levies"
+In May 2013, the IASB published IFRIC 21, "Levies," ("IFRIC 21")
+interpreting IAS 37, which sets out criteria for the recognition
+of a liability for provisions, contingent liabilities and contin-
+gent assets. IFRIC 21 addresses when and how a levy that is
+not within the scope of another IFRS should be recognized
+as a liability. The amendments shall be applied for fiscal years
+beginning on or after January 1, 2014. They have been adopted
+by the EU into European law. Consequently, application of the
+new amendments will be mandatory for fiscal years beginning
+on or after June 17, 2014. E.ON anticipates no material impact
+on its Consolidated Financial Statements.
+(3) Scope of Consolidation
+Equity Method in Separate Financial Statements
+In August 2014, the IASB published amendments to IAS 27,
+"Separate Financial Statements." The amendments permit
+the use of the equity method as an accounting option for
+investments in subsidiaries, joint ventures and associates in
+Financial Results
+2014
+2013
+Income from companies in which equity
+investments are held
+€ in millions
+0
+133
+The following table provides details of financial results for
+the periods indicated:
+(9) Financial Results
+134 Notes
+107
+3,116
+105,719
+102,603
+16
+88
+214
+financial assets
+-91
+-88
+Income from equity investments
+16
+Income from securities, interest
+and similar income¹
+882
+580
+Available for sale
+300
+Loans and receivables
+170
+95,575
+2,921
+98,496
+Impairment charges/reversals on other
+Expenses for raw materials and supplies
+and for purchased goods
+Expenses for purchased services
+Total
+Other Operating Expenses
+2014
+In addition to reversals of provisions, miscellaneous other
+operating income in 2014 included the proceeds of passing
+on of charges for personnel and services, as well as govern-
+ment grants.
+179
+The following table provides details of other operating
+expenses for the periods indicated:
+€ in millions
+2014
+2013
+Loss from exchange rate differences
+2,937
+3,755
+Loss on derivative financial instruments
+5,305
+1,620
+Taxes other than income taxes
+351
+364
+Loss on disposal of equity investments
+and securities
+€ in millions
+Cost of Materials
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity and of fuels for electricity generation. Network usage
+charges are also included in this line item. Expenses for pur-
+chased services consist primarily of maintenance costs. The
+cost of materials decreased by €8 billion to €98 billion (2013:
+€106 billion). The primary causes were a reduced expense for
+gas purchases and divestitures in the Germany regional unit.
+(8) Cost of Materials
+Other operating expenses from exploration activity totaled
+€49 million (2013: €71 million).
+Miscellaneous other operating expenses included concession
+payments in the amount of €243 million (2013: €473 million),
+expenses for external consulting, audit and non-audit services
+in the amount of €222 million (2013: €240 million), advertis-
+ing and marketing expenses in the amount of €139 million
+(2013: €169 million), and write-downs of trade receivables in
+the amount of €313 million (2013: €411 million). Additionally
+reported in this item are services rendered by third parties,
+IT expenditures and insurance premiums.
+2013
+The loss on disposal of equity investments and securities
+amounted to €30 million. In 2013, the loss totaled €449 million
+and was in large part attributable to the disposal of E.ON
+Westfalen Weser AG, which produced a loss of €230 million.
+3,714
+9,902
+3,211
+11,834
+Total
+Miscellaneous
+449
+30
+Losses from exchange rate differences consisted primarily of
+realized losses from currency derivatives in the amount of
+€1,620 million (2013: €2,240 million) and of effects from foreign
+currency translation on the balance sheet date in the amount
+of €741 million (2013: €218 million).
+Held for trading
+Combined Group Management Report
+32
+Domestic income taxes
+-349
+884
+Foreign income taxes
+302
+513
+Other income taxes
+Current taxes
+Domestic
+Foreign
+Deferred taxes
+654
+-754
+-31
+75
+623
+-679
+German legislation providing for fiscal measures to accompany
+the introduction of the European Company and amending
+other fiscal provisions ("SE-Steuergesetz" or "SESTEG"), which
+came into effect on December 13, 2006, altered the regula-
+tions on corporate tax credits arising from the corporate impu-
+tation system ("Anrechnungsverfahren"), which had existed
+until 2001. The change de-links the corporate tax credit from
+distributions of dividends. Instead, after December 31, 2006,
+an unconditional claim for payment of the credit in ten equal
+annual installments from 2008 through 2017 has been estab-
+lished. The resulting receivable is included in income tax assets
+and amounted to €78 million in 2014 (2013: €89 million).
+Deferred taxes reported for 2014 resulted from changes in tem-
+porary differences, which totaled €259 million (2013: €222 mil-
+lion), loss carryforwards of €310 million (2013: -€906 million)
+and tax credits amounting to €54 million (2013: €5 million).
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+The gain on the disposal of equity investments and securities
+consisted primarily of the following: €144 million on the dives-
+titure of Erdgasversorgung Thüringen, €128 million on the
+disposal of Rødsand 2, €69 million on the sale of the stake in
+Gasum Oy and €90 million on the sale of the City of Prague
+Municipal Utility. In 2013, there were gains of €996 million on
+the disposal of the hydroelectric power plants in Bavaria
+to Austria's Verbund AG and €521 million on the sale of E.ON
+Thüringer Energie AG. Gains were realized on the sale of
+securities in the amount of €203 million (2013: €186 million).
+Strategy and Objectives
+2013
+E.ON Stock
+CEO Letter
+Of the amount reported as current taxes, -€712 million is
+attributable to previous years (2013: €636 million).
+The tax expense in 2014 amounted to €0.6 billion, compared
+with €0.7 billion in 2013. In spite of the pre-tax loss there is
+still a tax expense, and hence a negative effective tax rate of
+24 percent (2013: 23 percent). Certain impairment losses were
+not deductible for tax purposes and consequently provided no
+tax relief in 2014. The tax expense additionally includes major
+non-recurring effects from changes in the value of deferred
+tax assets and tax income for previous years. In 2013, higher
+tax-exempt book gains reduced the effective tax rate.
+718
+576
+Total income taxes
+Report of the Supervisory Board
+2014
+€ in millions
+Income Taxes
+-1,576
+Other interest expenses
+-30
+-46
+Held for trading
+-1,168
+-1,374
+-1,070
+-2,572
+-2,692
+Interest and similar expenses¹
+155
+371
+Other interest income
+Amortized cost
+41
+Net interest income
+-1,992
+1,397
+-47
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+(10) Income Taxes
+The improvement in financial results is primarily attributable
+to interest effects from the reversal of provisions.
+¹The measurement categories are described in detail in Note 1.
+-1,810
+Realized gains and losses from interest rate swaps are shown
+net on the face of the income statement.
+Other interest expenses further include the effects on financial
+results of carryforwards of counterparty obligations to acquire
+additional shares in already consolidated subsidiaries and
+of non-controlling interests in fully consolidated partnerships
+with legal structures that give their shareholders a statutory
+right of withdrawal combined with a compensation claim,
+which according to IAS 32 must be recognized as liabilities
+and amounted to €22 million (2013: €120 million).
+Other interest income consists predominantly of income from
+lease receivables (finance leases) and income from the rever-
+sal of provisions for previous years. Other interest expenses
+include the accretion of provisions for asset retirement obliga-
+tions in the amount of €882 million (2013: €878 million). Also
+contained in this item is the net interest cost from provisions
+for pensions in the amount of €93 million (2013: €146 million).
+A total of €136 million (2013: €0 million) in penalties was paid
+in 2014 in connection with early bond repayments.
+-1,992
+-1,794
+Financial results
+From 2006 through 2012, E.ON granted virtual shares ("Per-
+formance Rights") under the E.ON Share Performance Plan.
+Interest expense was reduced by capitalized interest on debt
+totaling €162 million (2013: €200 million).
+Supervisory Board and Board of Management
+Tables and Explanations
+3
+550
+Combined Group Management Report
+Consolidated Financial Statements
+Combined Group Management Report
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+The following tables show selected financial information,
+including the impairment of non-current assets attributable
+to discontinued operations, as well as major balance sheet
+data of the Italy regional unit now being reported as discon-
+tinued operations:
+Selected Financial Information-
+E.ON Italy (Summary)
+€ in millions
+2014
+2013
+Sales
+1,537
+E.ON Italy (Summary)
+Major Balance Sheet Line Items-
+41
+-13
+operations, net
+Income/Loss from discontinued
+Supervisory Board and Board of Management
+Tables and Explanations
+Income taxes
+-19
+Income/Loss from continuing operations
+before income taxes
+-1,714
+-1,556
+Other income/expenses, net
+1,745
+31
+€ in millions
+investment was held by the Germany regional unit and had
+been reported as a disposal group since the end of 2012.
+The major carrying amounts related to property, plant and
+equipment (€1.1 billion) and financial assets (€0.2 billion),
+while provisions and liabilities amounted to €0.2 billion and
+€0.4 billion, respectively.
+In January 2013, E.ON signed a contract with the Czech energy
+company Energetický a Průmyslový Holding, Prague, Czech
+Republic, for the sale of its interest in the Slovakian energy
+company Slovenský Plynárenský Priemysel a.s. ("SPP"), which
+is held indirectly in E.ON's Global Commodities global unit.
+The purchase price for the 24.5-percent indirect holding is
+€1.2 billion, including final purchase price adjustments. The
+stake with a carrying amount of €1.2 billion had to be reported
+as an asset held for sale as of December 31, 2012, because
+commercial agreement on the sale had been substantially
+reached by the end of 2012. The attributable goodwill of approx-
+imately €0.2 billion was written down to zero in 2012. A total
+of €0.5 billion in impairment charges was recognized on the
+equity investment in the 2012 fiscal year. When the transac-
+tion closed in January 2013, amounts in other comprehensive
+income from foreign exchange translation differences were
+realized as a gain of €0.3 billion.
+Income tax liabilities consist primarily of income taxes for the
+respective current year and for prior-year periods that have
+not yet been definitively examined by the tax authorities.
+6,210
+3,765
+2,437
+Income from exchange rate differences
+Gain on derivative financial instruments
+2013
+2014
+€ in millions
+Other Operating Income
+The table below provides details of other operating income
+for the periods indicated:
+(7) Other Operating Income and Expenses
+Own work capitalized amounted to €345 million in 2014
+(2013: €364 million) and resulted primarily from engineering
+services in networks and from new construction projects.
+(6) Own Work Capitalized
+The classification of revenues by segment is presented in
+Note 33.
+At €112 billion, revenues in 2014 were 7 percent lower than
+in the previous year. The decrease is primarily the result of
+divestitures in the Germany regional unit.
+Revenues from the sale of electricity and gas to industrial and
+commercial customers, to retail customers and to wholesale
+markets are recognized when earned on the basis of a contrac-
+tual arrangement with the customer or purchaser; they reflect
+the value of the volume supplied, including an estimated value
+of the volume supplied to customers between the date of their
+last meter reading and period-end.
+Revenues are generated primarily from the sale of electricity and
+gas to industrial and commercial customers, to retail custom-
+ers and to wholesale markets. Additional revenue is earned
+from the distribution of gas and electricity and from deliveries
+of steam, heat and water.
+E.ON Energy from Waste
+In December 2012, E.ON signed agreements to form a joint
+venture with EQT Infrastructure II, an infrastructure fund
+belonging to EQT, a Sweden-based private equity group. The
+joint venture, in which EQT Infrastructure II owns 51 percent
+and E.ON 49 percent, acquired 100 percent of the equity of
+E.ON Energy from Waste, Helmstedt, Germany. The Energy from
+Waste group was held by the Germany regional unit, and had
+been reported as a disposal group since the end of 2012. With
+a carrying amount of approximately €0.9 billion, the major asset
+item was property, plant and equipment. Additional signifi-
+cant balance sheet items included current assets (€0.3 billion),
+provisions (€0.2 billion), liabilities (€0.2 billion) and deferred
+taxes (€0.1 billion). The transaction closed in March 2013 with
+a minimal gain on disposal.
+E.ON Wasserkraft
+At the beginning of December 2012, E.ON and Austria's Ver-
+bund AG, Vienna, Austria, signed contracts on acquisitions and
+disposals of equity investments. Under the agreement, E.ON
+will acquire Verbund's share of Enerjisa Enerji A.Ş. ("Enerjisa"),
+Istanbul, Turkey, giving it stakes in Enerjisa's power genera-
+tion capacity and projects and in its power distribution business
+in Turkey. The agreement also involved financing commit-
+ments for investment projects amounting to approximately
+€0.5 billion. In return, E.ON will transfer to Verbund its stakes
+in certain hydroelectric power plants in Bavaria. Verbund will
+become the sole owner of this hydro capacity, located pre-
+dominantly on the Inn River in Bavaria, in which it is already
+a joint owner. Verbund will acquire primarily E.ON's stakes
+in Österreichisch-Bayerische Wasserkraft AG, Donaukraftwerk
+Jochenstein AG and Grenzkraftwerke GmbH, as well as the
+Nussdorf, Ering-Frauenstein and Egglfing-Obernberg run-of-river
+hydroelectric plants on the Inn, along with subscription rights
+in the Zemm-Ziller Hydroelectric Group. Altogether, these
+stakes and power plants represent 351 MW of attributable
+generating capacity. Relevant balance sheet line items of the
+disposal group, which is held in the Renewables global unit,
+are property, plant and equipment and financial assets (€0.1 bil-
+lion), as well as other assets (€0.2 billion). The disposal group
+has been reported as such since the end of 2012. The transac-
+tion closed at the end of April 2013 with a gain of approximately
+€1.0 billion on disposal.
+Equity Investment in Jihomoravská Plynárenská
+E.ON has sold its minority stake in Jihomoravská plynárenská,
+a.s. ("JMP"), Brno, Czech Republic. The purchase price is
+approximately €0.2 billion. The ownership interest was reported
+within the Czechia regional unit as an asset held for sale as
+of December 31, 2012, with a carrying amount of approximately
+€0.2 billion. The transaction closed in January 2013 with a
+minor book gain on the disposal.
+Slovenský Plynárenský Priemysel (SPP)
+London Array Wind Farm
+Wind Farm Disposals
+E.ON signed contracts for the sale of a 50-percent stake in
+each of three wind farms in North America in October 2012
+for a total of $0.5 billion in proceeds. The wind farms were
+held by the Renewables global unit. The transaction closed in
+March 2013 with a small gain on disposal. The wind farms
+were reported as disposal groups since the fourth quarter of
+2012. Material balance sheet line items related to property,
+plant and equipment (€0.4 billion); there were no significant
+items on the liabilities side.
+131
+132 Notes
+(5) Revenues
+Revenues are generally recognized upon delivery of goods to
+purchasers or customers, or upon completion of services ren-
+dered. Delivery is considered to have occurred when the risks
+and rewards associated with ownership have been transferred
+to the buyer, compensation has been contractually established
+and collection of the resulting receivable is probable.
+The operators of the U.K. wind farm London Array are required
+by regulatory order to cede components of the wind farm's
+grid link to the U.K. regulator. 30 percent of this wind farm is
+attributable to E.ON. The carrying amount of the property, plant
+and equipment to be transferred is approximately €0.1 billion.
+The transfer took place in the third quarter of 2013 with a minor
+gain on disposal.
+Consolidated Financial Statements
+Intangible assets
+Total assets
+In December 2013, E.ON signed a contract for and finalized the
+sale of its 73.3-percent stake in E.ON Mitte AG to a consor-
+tium of municipal co-owners. As part of the transaction, E.ON
+repurchased E.ON Mitte Vertrieb GmbH and certain other
+shareholdings held by E.ON Mitte AG. The major balance sheet
+items of this unit, which was held by the Germany regional
+unit, were property, plant and equipment (€0.6 billion) and
+receivables (€0.1 billion), as well as provisions and liabilities
+of €0.3 billion each. The disposal resulted in a minimal gain.
+E.ON in Finland
+In June 2013, E.ON signed a contract for the sale of its Finnish
+electricity activities. The purchase price was €0.1 billion. The
+transaction closed in the third quarter of 2013. The activities
+were reported as a disposal group since the second quarter
+of 2013. Held by the Sweden regional unit, the disposal group's
+major asset items were property, plant and equipment (€0.1 bil-
+lion) and financial assets (€0.1 billion). The liabilities side of the
+balance sheet consisted primarily of liabilities (€0.1 billion).
+E.ON Westfalen Weser
+At the end of June 2013, E.ON signed a contract for and finalized
+the sale of its 62.8-percent stake in E.ON Westfalen Weser
+to a consortium of municipal co-owners with cash proceeds
+of approximately €0.2 billion. As part of the transaction,
+E.ON bought back the retail subsidiary E.ON Westfalen Weser
+Vertrieb GmbH and certain other shareholdings held by E.ON
+Westfalen Weser AG. The major balance sheet items of this unit,
+which was held by the Germany regional unit, were property,
+plant and equipment (€0.8 billion) and receivables (€0.3 billion),
+as well as provisions (€0.3 billion) and liabilities (€0.3 billion).
+The disposal resulted in a loss of about €0.2 billion.
+E.ON Földgáz Trade/E.ON Földgáz Storage
+In March 2013, E.ON signed a contract with the Hungarian
+energy company MVM Hungarian Electricity Ltd. for the sale of
+its 100-percent stakes in E.ON Földgáz Trade and E.ON Földgáz
+Storage. The purchase price for both companies, including the
+assumption of approximately €0.5 billion in debt, is approxi-
+mately €0.9 billion. Impairment charges totaling €0.2 billion
+were recognized on certain assets within the units, and on
+the attributable goodwill, in the first quarter of 2013. The trans-
+action closed in the third quarter of 2013 with a loss on dis-
+posal of €0.1 billion, including realization of foreign currency
+translation effects (€0.1 billion). Held by the Global Commodi-
+ties global unit, the major asset items of the two units were
+intangible assets and property, plant and equipment (€0.7 billion),
+as well as current assets (€0.5 billion). The liabilities side of
+the balance sheet consisted primarily of liabilities (€0.2 billion)
+and provisions (€0.1 billion).
+E.ON Thüringer Energie
+At the end of December 2012, E.ON signed a contract for the
+sale of a 43-percent interest in E.ON Thüringer Energie to
+a municipal consortium, Kommunaler Energiezweckverband
+Thüringen ("KET"). The transaction involved a volume of approx-
+imately €0.9 billion, which includes the assumption by KET
+of shareholder loans totaling approximately €0.4 billion. This
+transaction closed in March 2013. The sale of the 10-percent
+stake in E.ON Thüringer Energie still held by E.ON after the
+initial transaction became final in the second quarter of 2013.
+In total, the disposal resulted in a €0.5 billion gain. The equity
+CEO Letter
+Report of the Supervisory Board
+Gain on disposal of equity investments
+and securities
+867
+Write-ups of non-current assets
+54
+2,422
+482
+Gain on disposal of property,
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Gains and losses on derivative financial instruments relate to
+gains from fair value measurement and to realized gains from
+derivatives under IAS 39, with the exception of income effects
+from interest rate derivatives. In this respect there was a signif-
+icant impact from commodity derivatives in particular, which
+in 2014 resulted predominantly from the marking to market
+of electricity, emissions and gas derivatives. In 2013, there were
+effects resulting especially from emissions, electricity, gas
+and coal derivatives.
+Income from exchange rate differences consisted primarily of
+realized gains from currency derivatives in the amount of
+€1,746 million (2013: €2,531 million) and of effects from foreign
+currency translation on the balance sheet date in the amount
+of €331 million (2013: €516 million).
+E.ON Mitte
+In general, E.ON employs derivatives to hedge commodity
+risks as well as currency and interest risks.
+1,287
+10,966
+127
+111
+Total
+Miscellaneous
+plant and equipment
+1,530
+10,681
+Other assets
+In December 2013, E.ON signed a contract for and finalized the
+sale of its 100-percent stake in Ferngas Nordbayern GmbH
+to the investment company First State, Luxembourg. As part
+of the transaction, E.ON repurchased certain shareholdings
+partly held by Ferngas Nordbayern GmbH. The major balance
+sheet items of this unit, which was held by the Germany regional
+unit, were property, plant and equipment (€0.1 billion) and
+receivables (€0.1 billion), as well as provisions and liabilities
+of €0.1 billion each. The disposal resulted in a minimal gain.
+In December 2013, E.ON signed a contract on the disposal of
+its minority stake in NAFTA a.s., Bratislava, Slovakia. The owner-
+ship interest was reported within the Global Commodities
+global unit with a carrying amount of approximately €0.1 bil-
+lion. The transaction closed in the fourth quarter of 2013 with
+minimal gain on disposal.
+Total liabilities
+6
+10
+December 31, 2014
+553
+209
+As of December 31, 2014, the major asset and liability items
+of the activities held as a disposal group at the Generation
+global unit were property, plant and equipment (€0.3 billion),
+intangible assets (€0.1 billion) and current assets (€0.2 billion),
+as well as provisions (€0.4 billion) and liabilities (€0.2 billion).
+The major balance sheet items of the activities held as a dis-
+posal group in the Renewables segment were property, plant
+and equipment (€0.6 billion) and intangible assets (€0.5 billion).
+There were no material liability items.
+The disposal of the Italian coal and gas generation assets is
+expected to be finalized in the second quarter of 2015.
+Disposal Groups and Assets Held for Sale in 2014
+Magic Valley 1 and Wildcat 1 Wind Farms
+As part of its "build and sell" strategy, E.ON agreed to sell an
+80-percent interest in a portfolio of two wind farms in the
+United Sates, Magic Valley 1 and Wildcat 1, to Enbridge Inc.,
+Toronto, Canada. The net purchase price after deduction of
+liabilities was approximately €0.3 billion. The carrying amount
+of the property, plant and equipment is approximately
+€0.5 billion.
+E.ON retains a 20-percent interest and remains the operator
+of the wind farms. The transaction, which closed at the end
+of December 2014, produced a €0.1 billion gain on disposal.
+Erdgasversorgungsgesellschaft
+Thüringen-Sachsen mbH
+In late October 2014, E.ON signed a contract with First State
+European Diversified Infrastructure Fund ("EDIF"), an invest-
+ment fund managed by First State Investments, Luxembourg,
+for the sale of its 50-percent stake in Erdgasversorgungs-
+gesellschaft Thüringen-Sachsen mbH ("EVG"), Erfurt, Germany.
+Equity Investment in NAFTA
+Disposal Groups and Assets Held for Sale in 2013
+In November 2013, E.ON agreed to sell an 80-percent stake in
+its 207-megawatt Rødsand 2 offshore wind farm to the Danish
+utility SEAS-NVE. The transaction values 100 percent of the
+wind farm at DKK 3.5 billion (€0.5 billion). At closing, the wind
+farm company assumed a loan of DKK 2.1 billion (€0.3 billion).
+SEAS-NVE will purchase 80 percent of the equity for DKK 1.1 bil-
+lion (€0.2 billion). In total, E.ON will receive DKK 3.2 billion
+(€0.4 billion) from this transaction. The entity was reported in
+the Renewables global unit as of December 31, 2013, and its
+balance sheet consisted primarily of property, plant and equip-
+ment (€0.4 billion), other assets (€0.3 billion) and liabilities
+(€0.4 billion). The transaction closed on January 10, 2014, with
+a gain on disposal of approximately €0.1 billion.
+Rødsand Offshore Wind Farm
+130 Notes
+129
+Ferngas Nordbayern
+In December 2013, E.ON signed contracts with the City of
+Prague on the disposal of a majority stake in Pražská plyná-
+renská. The purchase price is €0.2 billion. Held in the Czechia
+regional unit, the major items on this entity's balance sheet
+as of December 31, 2013, were property, plant and equipment
+(€0.2 billion), inventories and other assets (€0.2 billion) and
+liabilities (€0.2 billion). The transaction closed in March 2014
+with a gain of approximately €0.1 billion on disposal.
+In the first quarter of 2014, E.ON signed contracts with Norway's
+Solør Bioenergi on the sale of various micro thermal power
+plants at a purchase price of €0.1 billion. The plants had a total
+carrying amount of approximately €0.1 billion and were
+reported in the Sweden regional unit. The transaction closed
+in the second quarter of 2014 with a minimal gain on disposal.
+Swedish Thermal Power Plants
+2,355
+In May 2014, E.ON signed contracts for and finalized the sale of
+the activities in Lithuania. The shareholdings had a total carry-
+ing amount of approximately €0.1 billion and were reported in
+the Global Commodities global unit. The transaction resulted
+in a minimal gain on disposal.
+E.ON in Lithuania
+The equity investment was held in the Germany regional unit
+with a carrying amount of approximately €0.1 billion. The
+transaction, which also closed in the fourth quarter of 2014,
+resulted in a gain on disposal of approximately €0.1 billion.
+City of Prague Municipal Utility
+As of December 31, 2014, €27 million (2013: €12 million) in
+deferred tax liabilities were recognized for the differences
+between net assets and the tax bases of subsidiaries and
+associated companies (the so-called "outside basis differences").
+Beginning in 2011, grants of Performance Rights required
+possession of a specified number of E.ON SE shares, which had
+to be held through the end of the term or until the rights were
+fully exercised. At the end of its term, each Performance Right
+is entitled to a cash payout linked to the final E.ON share price
+established at that time and-under the modified terms of
+the plan, beginning with the sixth tranche―to the degree to
+which specific corporate financial measures are achieved over
+the term. The benchmark is the return on capital, expressed as
+the return on average capital employed ("ROACE") compared
+with the weighted-average cost of capital ("WACC"), averaged
+over the unchanged four-year term of the new tranche. At the
+same time, starting with the sixth tranche, the maximum payout
+was further limited to 2.5 times the target value originally set.
+Changes in foreign tax rates resulted in a tax expense of
+€5 million in total (2013: tax income of €71 million).
+After
+income
+Before
+income
+Income
+After
+income
+taxes
+taxes
+taxes
+taxes
+taxes
+Cash flow hedges
+-718
+211
+-507
+112
+-25
+87
+Available-for-sale securities
+Remeasurements of defined benefit plans
+-1,318
+-22
+-1,296
+-2,453
+77
+Income
+-2,530
+394
+26
+368
+-310
+-48
+-262
+Currency translation adjustments
+-3,299
+Before
+income
+taxes
+2013
+-11
+-1,983
+-14
+-943
+Net deferred tax assets
+1,776
+4,396
+2,776
+4,549
+Deferred tax liabilities
+-1,841
+-3,879
+-2,328
+-5,576
+Net deferred tax assets/liabilities (-)
+-65
+517
+2014
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+€ in millions
+Report of the Supervisory Board
+Income Taxes on Components of Other Comprehensive Income
+Income taxes recognized in other comprehensive income for
+the years 2014 and 2013 break down as follows:
+E.ON Stock
+Of the deferred taxes reported, a total of -€1,789 million was
+charged directly to equity in 2014 (2013: -€605 million charge).
+A further €45 million in current taxes (2013: €43 million) was
+also recognized directly in equity.
+-1,027
+448
+CEO Letter
+Changes in value
+942
+504
+Personnel Costs
+€ in millions
+2014
+2013
+Wages and salaries
+3,212
+3,622
+Social security contributions
+506
+572
+Pension costs and other employee
+benefits
+403
+Pension costs
+397
+410
+402
+Total
+E.ON Share Performance Plan
+The following discussion includes reports on the E.ON Share
+Performance Plan, which was introduced in 2006 and modified
+in 2010 and 2011 for subsequent tranches, and on the E.ON
+Share Matching Plan introduced in 2013.
+Members of the Board of Management of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation.
+The purpose of such compensation is to reward their contri-
+bution to E.ON's growth and to further the long-term success
+of the Company. This variable compensation component,
+comprising a long-term incentive effect along with a certain
+element of risk, provides for a sensible linking of the interests
+of shareholders and management.
+Long-Term Variable Compensation
+Since the 2003 fiscal year, employees in the United Kingdom
+have the opportunity to purchase E.ON shares through an
+employee stock purchase program and to acquire additional
+bonus shares. The expense of issuing these matching shares
+amounted to €1.9 million in 2014 (2013: €1.9 million) and is also
+recorded under personnel costs as part of "Wages and salaries."
+Information on the changes in the number of treasury shares
+held by E.ON SE can be found in Note 19.
+The following table provides details of personnel costs for
+the periods indicated:
+As part of the voluntary employee stock purchase program,
+E.ON distributed a total of 919,064 treasury shares (0.05 percent
+of the capital stock of E.ON SE) in Germany in 2014 (2013:
+1,057,296 treasury shares, or 0.05 percent of the capital stock
+of E.ON SE).
+Employee Stock Purchase Program
+The expenses for share-based payment in 2014 (employee stock
+purchase programs in Germany and the United Kingdom, the
+E.ON Share Performance Plan and the E.ON Share Matching
+Plan) amounted to €50.8 million (2013: €18.1 million).
+Share-Based Payment
+Personnel costs fell by €483 million to €4,121 million
+(2013: €4,604 million). The decline was due primarily to the
+effects that occurred in the context of the E.ON 2.0 restruc-
+turing program and to the respective sales and disposals of
+interests in E.ON Mitte, E.ON Thüringer Energie, E.ON Energy
+from Waste and E.ON Westfalen Weser in 2013.
+4,604
+4,121
+In 2014, as in 2013, employees at German E.ON Group companies
+had the opportunity to purchase E.ON shares at preferential
+terms under a voluntary employee stock purchase program.
+Employees receive a matching contribution from the Com-
+pany of €400 at present on the shares they purchased by the
+November 20, 2014, cut-off date. Based on the stock package
+being bought, the employee contribution in 2014 ranged from
+a minimum of €500 to a maximum of €2,000. On that date, the
+relevant market price of E.ON stock was €12.80. Depending on
+the number of shares purchased, the preferential prices paid
+ranged between €7.09 and €10.66 (2013: between €6.83 and
+€11.16). The lock-up period for the shares ends on December 31,
+2016. The expense of €4.6 million (2013: €6.3 million) arising
+from granting the preferential prices is recognized as personnel
+costs and included in the "Wages and salaries" line item.
+-2,357
+Personnel Costs
+138 Notes
+-261
+243
+Companies accounted for under the equity method
+Total
+-53
+3
+-6,862
+1,185
+-50
+-5,677
+-984
+1
+-983
+-1,296
+-281
+-1,577
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+Tax Loss Carryforwards
+December 31
+137
+As of December 31, 2014, and December 31, 2013, E.ON reported
+deferred tax assets for companies that incurred losses in the
+current or the prior-year period that exceed the deferred tax
+liabilities by €3,050 million and €2,786 million, respectively.
+The basis for recognizing deferred tax assets is an estimate
+by management of the extent to which it is probable that
+the respective companies will achieve taxable earnings in the
+future against which the as yet unused tax losses, tax credits
+and deductible temporary differences can be offset.
+The foreign tax loss carryforwards consist of corporate tax loss
+carryforwards amounting to €5,521 million (2013: €4,252 million)
+and local income taxes amounting to €3,083 million (2013:
+€3,390 million). Of the foreign tax loss carryforwards, a sig-
+nificant portion relates to previous years. No deferred taxes
+have been recognized on a total of €2,760 million (2013:
+€1,853 million) in tax loss carryforwards that, for the most
+part, do not expire.
+Since January 1, 2004, domestic tax loss carryforwards can
+only be offset against a maximum of 60 percent of taxable
+income, subject to a full offset against the first €1 million.
+This minimum corporate taxation also applies to trade tax
+loss carryforwards. The domestic tax loss carryforwards result
+from adding corporate tax loss carryforwards amounting to
+€2,958 million (2013: €1,746 million) and trade tax loss carry-
+forwards amounting to €4,772 million (2013: €2,432 million).
+11,820
+16,334
+(11) Personnel-Related Information
+7,642
+4,178
+7,730
+Domestic tax loss carryforwards
+Foreign tax loss carryforwards
+Total
+2013
+2014
+€ in millions
+8,604
+Deferred tax liabilities were not recognized for subsidiaries
+and associated companies to the extent that the Company can
+control the reversal effect and that it is therefore probable
+that temporary differences will not be reversed in the fore-
+seeable future. Accordingly, deferred tax liabilities were not
+recognized for temporary differences of €261 million (2013:
+€1,320 million) at subsidiaries and associated companies, as
+E.ON is able to control the timing of their reversal and the
+temporary difference will not reverse in the foreseeable future.
+5,492
+6,379
+88
+-3.7
+70
+2.3
+1,457
+-61.2
+636
+20.6
+Effective income taxes/tax rate
+576
+-24.2
+718
+23.3
+¹Including €1,234 million in changes in the value of deferred tax assets (2013: €189 million) and -€649 million in taxes for previous years (2013: €144 million).
+135
+136 Notes
+Deferred tax assets and liabilities as of December 31, 2014, and
+December 31, 2013, break down as shown in the following table:
+Changes in value
+Subtotal
+Other
+Tax credits
+Net operating loss carryforwards
+Liabilities
+-23.1
+Provisions
+Inventories
+Financial assets
+Property, plant and equipment
+Intangible assets
+€ in millions
+Deferred Tax Assets and Liabilities
+Receivables
+Deferred tax assets
+-711
+-171
+Income taxes relating to discontinued operations (see also
+Note 4) are reported in the income statement under "Income
+from discontinued operations, net." They amounted to tax
+income of €13 million (2013: €11 million).
+The prior-year figures have been similarly adjusted to include
+discontinued operations, and also to reflect the initial appli-
+cation of IFRS 10 and IFRS 11 (see also Note 2).
+The differences between the 2014 base income tax rate of
+30 percent (2013: 30 percent) applicable in Germany and the
+effective tax rate are reconciled as follows:
+Reconciliation to Effective Income Taxes/Tax Rate
+2014
+2013
+€ in millions
+in % € in millions
+in %
+Expected corporate income tax
+-714
+30.0
+924
+30.0
+Credit for dividend distributions
+Foreign tax rate differentials
+Changes in tax rate/tax law
+-2.3
+-71
+-0.2
+5
+-4.4
+-137
+7.2
+3.6
+0.2
+7
+0.1
+-3
+Tax effects on equity accounting
+Other¹
+Tax effects on tax-free income
+-86
+2,790
+Intangible assets
+Financial assets
+-957
+16,421
+14,452
+1,007
+1,638
+4,280
+5,310
+521
+275
+105
+145
+5,708
+3,425
+2,255
+1,859
+1,180
+794
+1,787
+Non-current
+Current
+December 31, 2013
+December 31, 2014
+Non-current
+Current
+-1,688
+Deferred tax assets
+-579
+452
+15,031
+15,969
+1,585
+913
+€ in millions
+Property, plant and equipment
+15,409
+523
+Inventories
+Receivables
+Provisions
+Liabilities
+Other
+Deferred tax liabilities
+Net deferred tax assets/liabilities (-)
+Net deferred taxes break down as follows based on the timing
+of their reversal:
+Net Deferred Tax Assets and Liabilities
+December 31
+2014
+2013
+294
+313
+264
+685
+159
+651
+26
+13
+3,187
+2,488
+3,087
+18,109
+5,698
+7,810
+708
+707
+25
+25
+182
+6,673
+Strategy and Objectives
+816
+0
+-52,822
+3,225
+-4,520
+30
+-172
+35
+8
+-191
+271
+75
+-4,576
+2,581
+-386
+15
+-8
+1
+-8
+31
+3
+-420
+6,648
+-4,064
+35
+45
+-413
+556
+4,713
+-2,846
+386
+-80
+535
+-3,173
+5,165
+649
+46
+-28
+32
+36
+2
+-224
+-59,086
+416
+-27
+-1,008
+-1
+-104
+105
+-128
+150
+13
+-1,044
+36,399
+-50,832
+389
+-1,164
+-44
+1
+1,074
+-388
+83
+121
+-26
+1
+5
+-175
+229
+-652
+-4
+64
+-94
+26
+11
+2
+-655
+-2,199
+1
+-54
+-2
+37
+-231
+10
+61
+-2,021
+307
+-614
+-1
+4,527
+-1,373
+-3
+66
+125
+-4,553
+132
+-11
+-3
+-8
+1,385
+-512
+34
+-352
+-22
+224
+-75
+1
+11
+-185
+5,131
+-3,541
+1
+-58
+-5
+1,073
+-388
+82
+114
+-4,360
+1
+-1
+481
+7,462
+Recoverable amounts were determined for virtually all gen-
+eration assets as part of the impairment tests. In specific
+cases in 2013, this also led to reversals of €397 million in total,
+which were mainly attributable to power plants in Spain,
+Italy, the Netherlands and Germany, and resulted primarily from
+changes in forecasts for electricity prices and fuel costs.
+Additional reversals totaling €85 million were attributable to
+other segments.
+Because impairments were recognized on a number of items
+of property, plant and equipment in previous years, and
+particularly on generation assets, the assets involved were
+particularly sensitive in subsequent years to future changes
+in the principal assumptions used to determine their recover-
+able amounts.
+148 Notes
+147
+Impairments on intangible assets totaled €413 million in 2013.
+Of this amount, €206 million was attributable to emission
+rights in the Global Commodities segment, which were written
+down to fair values less costs to sell of €242 million in line
+with the market price on the reporting date. Additional impair-
+ment losses of €144 million had to be recognized in the
+Exploration & Production segment.
+In the 2013 fiscal year, impairments were recognized on prop-
+erty, plant and equipment in the amount of €1,373 million.
+The most substantial individual issue in terms of amount, at
+€176 million, related to a power plant in Russia, which was
+written down to a recoverable amount of €250 million in the
+third quarter of 2013 because of a changed regulatory frame-
+work. The recoverable amount was the value in use. The other
+impairment charges on property, plant and equipment related
+to a variety of specific issues and were primarily attributable
+to conventional power plants at the Generation global unit
+(€798 million), Russia (a further €102 million), and the Renew-
+ables global unit (€94 million).
+Reversals of impairments recognized in previous years
+amounted to €257 million in 2014, of which €203 million was
+attributable to emission rights.
+Impairments on intangible assets amounted to €176 million
+in 2014. Of this amount, €102 million was attributable to the
+Renewables segment.
+E.ON has made the general assumption in 2014 that the
+market will not return to an equilibrium free from regulatory
+elements. Appropriate compensation elements were taken
+into account for the first time.
+facility will be rendered economically inoperable as a conse-
+quence of environmental specifications. Moreover, conventional
+generation capacity was written down by €1.2 billion in the
+context of the divestment process in Italy (see also Note 4).
+In the 2014 fiscal year, impairments were recognized on prop-
+erty, plant and equipment in the amount of €4,802 million.
+The most substantial individual issue in terms of amount, at
+€990 million, relates to two nuclear generation units in Sweden,
+which were written down in the fourth quarter to a recoverable
+amount of €22 million. The primary reasons for this charge
+were lower expected power sales, the additional investment
+needed to fulfill government-mandated safety specifications
+for long-term operation and the associated review of the poten-
+tial useful life of the units. Further material impairment charges
+were recognized at the Generation global unit in the United
+Kingdom, of which the largest in terms of amount related
+to two conventional power plants. These were written down
+by €441 million and €392 million, respectively, to recoverable
+amounts of €651 million and €0 million. The main reason for
+this impairment was the reduction of market spreads. In addi-
+tion, a Swedish thermal power plant was fully written down
+by an amount of €320 million because it is expected that the
+The goodwill of all cash-generating units whose goodwill is
+material in relation to the total carrying amount of all goodwill
+shows a surplus of recoverable amounts over the respective
+carrying amounts and, therefore, based on current assessment
+of the economic situation, only a significant change in the
+material valuation parameters would necessitate the recogni-
+tion of goodwill impairment.
+The goodwill impairment testing performed in 2014 necessi-
+tated no recognition of impairment charges (2013: €27 million).
+However, impairments on goodwill were recognized in con-
+nection with initiated disposals in the amount of €382 million
+(2013: €111 million) (see Note 4 for additional details).
+The recoverable amount primarily used to test a business for
+impairment is the fair value less costs to sell; at the Russia
+focus region, however, the recoverable amount is based on the
+value in use. The value in use for the Russia region is deter-
+mined in local currency and according to the regulatory frame-
+work over a detailed planning period of 16 years. The pre-tax
+cost of capital of this cash-generating unit is 15 percent
+(after-tax interest rate: 12 percent; 2013: 13.9 and 11.1 percent,
+respectively).
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment, and of groups of these assets. In the Generation
+segment, for example, the tests are based on the respective
+remaining useful life and on other plant-specific valuation
+parameters. If the goodwill of a cash-generating unit is com-
+bined with assets or groups of assets for impairment testing,
+the assets must be tested first.
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective fore-
+casts for commodity market prices, future electricity and gas
+prices in the wholesale and retail markets, E.ON's investment
+activity, changes in the regulatory framework, as well as for
+rates of growth and the cost of capital. These assumptions are
+based on market data, where publicly available.
+that are based on historical analysis and prospective fore-
+casting. The growth rates used in 2014 generally correspond
+to the inflation rates in each of the countries where the
+cash-generating units operate. In 2014, the inflation rate used
+for the euro area was 1.5 percent (2013: 1.5 percent). For the
+Renewables reporting segment, the growth rate is also adjusted
+for segment-specific forecasts of changes by the respective
+business units (for example, regulatory framework, reinvest-
+ment cycles or growth prospects). Given their deteriorated
+growth prospects, the Generation and Hydro units are for the
+first time using a growth rate of 0 percent. The interest rates
+used for discounting cash flows are calculated using market
+data for each cash-generating unit, and as of December 31, 2014,
+ranged between 4.8 and 8.3 percent after taxes (2013: 4.9 and
+8.6 percent).
+Valuations are based on the medium-term corporate planning
+authorized by the Board of Management. The calculations
+for impairment-testing purposes are generally based on the
+three planning years of the medium-term plan plus two addi-
+tional detailed planning years. In certain justified exceptional
+cases, a longer detailed planning period of ten years is used
+as the calculation basis, especially when that is required under
+a regulatory framework or specific regulatory provisions. The
+cash flow assumptions extending beyond the detailed planning
+period are determined using segment-specific growth rates
+Intangible Assets
+In 2014, the Company recorded an amortization expense of
+€350 million (2013: €388 million). Impairment charges on
+intangible assets amounted to €176 million in 2014 (2013:
+€413 million).
+Reversals of impairments on intangible assets totaled €226 mil-
+lion in 2014 (2013: €35 million). Of this amount, €203 million is
+attributable to price effects in carbon allowances.
+Intangible assets include emission rights from different
+trading systems with a carrying amount of €447 million
+(2013: €626 million). The year-on-year decrease in emission
+rights is primarily the result of the reclassification to discon-
+tinued operations, which reduced the carrying amount by
+€96 million.
+922
+840
+103
+103
+815
+725
+4
+12
+2013
+2014
+December 31
+Net carrying amount of capitalized lease assets
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units.
+In the absence of binding sales transactions or market prices
+for the respective cash-generating units, fair values are calcu-
+lated based on discounted cash flow methods.
+Other equipment, fixtures, furniture and office equipment
+Buildings
+Land
+€ in millions
+The property, plant and equipment thus capitalized had the
+following carrying amounts as of December 31, 2014:
+Certain gas storage facilities, supply networks and power
+plants are utilized under finance leases and capitalized in the
+E.ON Consolidated Financial Statements because the eco-
+nomic ownership of the assets leased is attributable to E.ON.
+In 2014 there were restrictions on disposals involving primarily
+land and buildings, as well as technical equipment and
+machinery, in the amount of €1,926 million (2013: €1,753 million).
+In 2014, the Company recorded depreciation of property,
+plant and equipment in the amount of €3,230 million (2013:
+€3,173 million). Impairment charges, including those relating
+to the issues already mentioned, were recognized on property,
+plant and equipment in the amount of €4,802 million (2013:
+€1,373 million). A total of €31 million in reversals of impair-
+ments on property, plant and equipment was recognized in
+2014 (2013: €481 million).
+Borrowing costs in the amount of €162 million were capitalized
+in 2014 (2013: €200 million) as part of the historical cost of
+property, plant and equipment.
+Property, Plant and Equipment
+As of December 31, 2014, intangible assets from exploration
+activity had carrying amounts of €299 million (2013: €352 mil-
+lion). Impairment charges of €47 million (2013: €144 million)
+were recognized on these intangible assets.
+€30 million in research and development costs as defined by
+IAS 38 were expensed in 2014 (2013: €42 million).
+E.ON as Lessee-Carrying Amounts of Capitalized Lease Assets
+Technical equipment, plant and machinery
+IFRS 3 prohibits the amortization of goodwill. Instead, good-
+will is tested for impairment at least annually at the level of
+the cash-generating units. Goodwill must also be tested for
+impairment at the level of individual cash-generating units
+between these annual tests if events or changes in circum-
+stances indicate that the recoverable amount of a particular
+cash-generating unit might be impaired. Intangible assets
+subject to amortization and property, plant and equipment
+must generally be tested for impairment whenever there are
+particular events or external circumstances indicating the
+possibility of impairment.
+Impairments
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 142 and 143.
+-5
+-19
+Other changes¹
+Impairment charges
+-1
+-3
+and disposals
+Changes resulting from acquisitions
+1,463
+352
+0
+53
+-9
+140
+will as of January 1, 2013
+Net carrying amount of good-
+Other EU
+Countries
+units
+Hungary
+Other regional
+Czechia
+Sweden
+UK
+€ in millions
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2013-Presentation of Other EU Countries
+50,083
+918
+-136
+-56,882
+35
+-27
+Since the beginning of 2014, the Group's biomass activities
+have been reported within the Generation global unit. The
+corresponding comparative prior-year figures were adjusted.
+Goodwill and Non-Current Assets
+146 Notes
+1Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale.
+2Other non-current assets consist of intangible assets and of property, plant and equipment.
+85
+55
+-44
+-4
+-27
+8
+22
+-5
+31
+-8
+Impairment
+Other non-current assets²
+1,434
+360
+0
+43
+132
+899
+will as of December 31, 2013
+Net carrying amount of good-
+-33
+-27
+Reversals
+851
+-37
+44
+Technical equipment, plant and machinery
+7,745
+111
+-12
+46
+-349
+-221
+8,170
+Buildings
+2,967
+7
+-10
+14
+-110
+-60
+3,126
+Real estate and leasehold rights
+10,712
+36
+-2,918
+2,653
+-98
+-445
+11,484
+Intangible assets
+89,756
+-1,538
+-7,362
+2,048
+-821
+4,956
+-8,102
+-2,169
+113,026
+Property, plant and equipment
+7,598
+-5,012
+-167
+2,723
+-59
+-331
+143
+10,444
+1,424
+133
+-123
+125
+-222
+-19
+1,530
+1,248
+Other equipment, fixtures, furniture and
+87,231
+4,836
+-509
+Advance payments and construction in progress
+-73
+131
+-1
+-32
+-14
+872
+Technology-based intangible assets
+6,726
+47
+-51
+89
+-20
+-329
+6,990
+Contract-based intangible assets
+79
+921
+4
+-12
+-39
+1,819
+Customer-related intangible assets
+3
+-3
+6
+Marketing-related intangible assets
+16,062
+0
+0
+-851
+75
+-66
+881
+-2
+88
+Advance payments on intangible assets
+1,897
+20
+-1,829
+2,339
+-21
+-56
+1,444
+Intangible assets not subject to amortization
+8,672
+42
+89
+183
+-76
+-387
+9,952
+Intangible assets subject to amortization
+141
+-121
+11
+-9
+-5
+265
+Internally generated intangible assets
+-1,089
+106,965
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2013
+Group
+Manage-
+Net carrying
+amounts
+145
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Accumulated depreciation
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale.
+2Presented here are growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+3Other non-current assets consist of intangible assets and of property, plant and equipment.
+"Growth rate and cost of capital before taxes, in local currency.
+516
+Changes in
+-1,786
+-44
+85
+34
+397
+Reversals
+-8
+-221
+-288
+-149
+-798
+Impairment
+Other non-current assets³
+13.9
+-278
+7.4
+Exchange
+January 1,
+37
+-1,507
+2
+-1
+1
+-2
+2013
+12,666
+2013
+-3,396
+0
+-138
+0
+0
+scope of
+111
+-3,368
+Reversals
+Impairment
+Transfers
+Disposals
+Additions
+tion
+differences
+2013
+December 31, December 31,
+consolida-
+rate
+-1
+-324
+5.7
+6.7
+31
+-63
+-177
+sitions and disposals
+Changes resulting from acqui-
+13,309
+0
+1,537
+1,463
+955
+1,857
+1,177
+Impairment charges
+1,977
+Net carrying amount of good-
+will as of January 1, 2013
+E.ON
+Group
+Consolida-
+tion
+Russia4
+Other EU
+Countries
+Germany
+ment/
+Global Explora-
+Commodi-
+tion &
+ties Production
+Renew-
+ables
+tion
+€ in millions
+Genera-
+4,343
+5.8-6.6
+-27
+-49
+Cost of capital (in %)²
+3.5
+1.5
+1.5
+1.5-2.0
+1.5
+Growth rate (in %)²
+12,666
+0
+1,367
+1,434
+826
+Other changes¹
+1,835
+1,846
+4,294
+Net carrying amount of good-
+will as of December 31, 2013
+-296
+-138
+-209
+-170
+-33
+-66
+-22
+-2
+46
+1,064
+-111
+office equipment
+-2,070
+74
+-3,541
+195
+952
+-350
+213
+-103
+23
+-2,611
+3,534
+-512
+-2
+66
+-62
+203
+-81
+-307
+20
+1
+7
+-102
+23
+-1,615
+3,042
+-652
+9
+118
+-74
+29
+-1
+-571
+169
+-75
+-2
+-25
+-212
+1,147
+-2
+-411
+2,279
+-4,520
+159
+519
+-172
+53
+12
+-133
+-4,082
+2,592
+-50,832
+398
+7,893
+-2,944
+-35
+-11
+4
+12
+2
+-11
+-22
+201
+-4,064
+191
+954
+-350
+279
+-176
+226
+-2,940
+4,882
+-386
+1
+-7
+687
+181
+-2,199
+-23
+1
+-4,978
+257
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale. Also included is the goodwill impairment of discontinued
+operations.
+2Presented here are growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+³Other non-current assets consist of intangible assets and of property, plant and equipment.
+"Growth rate and cost of capital before taxes, in local currency.
+5The Renewables segment consists of the two cash-generating units EC&R and Hydro. Their net carrying amounts of goodwill as of December 31, 2014, were €1,292 million and €406 million,
+respectively.
+Accumulated depreciation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+-47
+Supervisory Board and Board of Management
+Tables and Explanations
+-24
+1
+24
+0.0-2.0
+5.6-6.1
+1.5
+1.5
+5.8
+7.4
+3.5
+15.0
+Other non-current assets³
+Impairment
+-4,249
+-170
+-93
+-372
+Reversals
+26
+205
+Changes in
+Exchange
+scope of
+2014
+-512
+2014
+11,812
+-1
+-1
+-2
+0
+-291
+-614
+3
+147
+-39
+157
+-342
+249
+December 31, December 31,
+Net carrying
+amounts
+143
+0
+January 1,
+rate
+consolida-
+2014
+differences
+-3,396
+1
+231
+tion
+3,011
+Disposals
+Transfers
+Impairment
+Reversals
+0
+0
+-128
+Additions
+6.5
+-18
+23
+106,965
+-1,955
+-12,091
+4,660
+-801
+-20
+96,758
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2014
+Group
+Manage-
+Global
+Genera-
+€ in millions
+tion
+Renew- Commodi-
+ables5
+Explora-
+tion &
+ties Production
+Property, plant and equipment
+ment/
+16,677
+31,
+2013
+Goodwill, Intangible Assets and Property, Plant and Equipment
+Acquisition and production costs
+Changes in
+Exchange
+scope of
+December
+January 1,
+rate
+€ in millions
+2013
+differences
+consolida-
+tion
+Additions
+Disposals
+Transfers
+Goodwill
+144 Notes
+Germany
+Russia4
+-91
+64
+-57
+-27
+-200
+-510
+4
+-128
+-730
+Net carrying amount of good-
+will as of December 31, 2014
+4,321
+1,698
+1,064
+1,808
+-37
+Other EU
+Countries
+Other changes¹
+14
+Consolida-
+tion
+E.ON
+Group
+Net carrying amount of good-
+will as of January 1, 2014
+4,294
+1,846
+1,064
+1,835
+826
+1,434
+1,367
+0
+12,666
+Changes resulting from acqui-
+sitions and disposals
+-10
+Impairment charges
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale.
+2Other non-current assets consist of intangible assets and of property, plant and equipment.
+1
+-47
+5,356
+596
+8,469
+-3,230
+338
+-5
+-4,802
+31
+-55,485
+41,273
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2014-Presentation of Other EU Countries
+€ in millions
+UK
+Sweden
+Czechia
+-1,085
+Net carrying amount of good-
+8
+7
+-48,870
+30,673
+-1,008
+9
+31
+-107
+49
+-6
+-5
+-1,037
+373
+-136
+-56,882
+29
+14
+1
+-1,008
+will as of January 1, 2014
+899
+132
+-200
+Net carrying amount of good-
+will as of December 31, 2014
+962
+121
+50
+0
+115
+1,248
+Other non-current assets²
+Impairment
+-11
+Reversals
+1
+-36
+-254
+-1
+-8
+63
+43
+Other regional
+Hungary
+units
+Other EU
+Countries
+0
+360
+-3,621
+1,434
+and disposals
+-3
+8
+9
+14
+Impairment charges
+Other changes¹
+Changes resulting from acquisitions
+Cost of capital (in %)²
+7
+Growth rate (in %)²
+-162
+-10
+921
+2
+-1
+3
+Marketing-related intangible assets
+Customer-related intangible assets
+12,324
+0
+0
+0
+2014
+Transfers
+Disposals
+Additions
+-158
+31,
+591
+6,726
+1
+3
+141
+Internally generated intangible assets
+0.0
+-30
+28
+-158
+-10
+881
+Technology-based intangible assets
+-19
+115
+-1,330
+-859
+Contract-based intangible assets
+18
+December
+-276
+-0.09
+1.05
+-1.55
+2,091
+-3,160
+92
+-181
+-6
+-6
+98
+-175
+1,999
+-2,979
+-362
+-24
+0.05
+scope of
+consolida-
+tion
+-3,462
+-1.64
+1,923
+16,062
+Goodwill
+differences
+2014
+€ in millions
+rate
+January 1,
+Exchange
+Changes in
+Acquisition and production costs
+Goodwill, Intangible Assets and Property, Plant and Equipment
+142 Notes
+141
+The computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued
+no potentially dilutive ordinary shares.
+1,907
+1.10
+-28
+20
+Intangible assets subject to amortization
+-89
+-189
+9
+-18
+10
+2,690
+Buildings
+7,745
+-502
+-623
+96
+-87
+45
+6,674
+Technical equipment, plant and machinery
+2,967
+87,231
+Real estate and leasehold rights
+27
+1,454
+Advance payments on intangible assets
+143
+8
+-13
+135
+-2
+-48
+223
+Intangible assets
+10,712
+-871
+-1,758
+2,019
+-2,307
+7,822
+-960
+-11,113
+2,072
+-96
+-3
+1,897
+Intangible assets not subject to amortization
+6,145
+155
+740
+4,657
+2222
+72
+-235
+161
+-1,649
+-876
+8,672
+6,441
+-2,995
+-47
+2,412
+-584
+2,897
+79,543
+Other equipment, fixtures, furniture and
+office equipment
+1,424
+-16
+2,361
+-27
+-65
+23
+1,410
+Advance payments and construction in progress
+7,598
+-388
+-139
+71
+-2,955
+29
+2014
+1,768
+1,699
+9,292
+8,262
+2013
+2014
+Generation
+Renewables
+Employees¹
+The breakdown by segment is shown in the table below:
+During 2014, E.ON employed an average of 59,301 persons
+(2013: 64,381), not including an average of 1,321 apprentices
+(2013: 1,563).
+Employees
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual
+shares. In addition, the change in ROACE is simulated for per-
+formance matching. The provision for the first and second
+tranches of the E.ON Share Matching Plan as of the balance
+sheet date is €40.6 million (2013: €8.8 million). The expense
+for the first and second tranches amounted to €31.9 million
+in the 2014 fiscal year (2013: €9.1 million).
+140 Notes
+139
+4 years
+€13.31
+Global Commodities
+4 years
+€13.65
+1,264
+Exploration & Production
+Total
+5,766
+5,502
+Group Management/Other³
+5,043
+5,232
+Non-EU Countries
+26,671
+25,108
+Other EU Countries²
+13,939
+12,000
+Germany
+207
+234
+1,695
+59,301
+1st tranche
+Apr. 1, 2013
+Target value at issuance
+Term
+Date of issuance
+E.ON Share Performance Rights
+The following are the base parameters of the two tranches
+active in 2014 under these plan terms:
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements. The plan
+contains adjustment mechanisms to eliminate the effects of
+interim corporate actions.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+2013
+CEO Letter
+857
+0
+11,812
+7th tranche
+2nd tranche
+Apr. 1, 2014
+Jan. 1, 2012
+4 years
+€17.10
+Date of issuance
+Term
+E.ON Share Matching Virtual Shares
+The following are the base parameters of the tranches active
+in 2014 under these plan terms:
+The plan contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+At the end of the term, the sum of the dividends paid to an
+ordinary shareholder during the term is added to each virtual
+share. The maximum amount to be paid out to a plan partici-
+pant is limited to twice the sum of the equity deferral, the basis
+matching and the target value under performance matching.
+A payout generally will not take place until after the end of
+the four-year term. This applies even if the beneficiary retires
+beforehand, or if the beneficiary's contract is terminated on
+operational grounds or expires during the term. A payout before
+the end of the term will take place in the event of a change
+of control or on the death of the beneficiary. If the service or
+employment relationship ends before the end of the term for
+reasons within the control of the beneficiary, all virtual shares-
+except for those that resulted from the equity deferral-expire.
+The amount paid out under performance matching is equal
+to the target value at issuance if the E.ON share price is main-
+tained at the end of the term and if the average ROACE per-
+formance matches a target value specified by the Board of
+Management and the Supervisory Board. If the average ROACE
+during the four-year term exceeded the target value, the
+number of virtual shares granted under performance matching
+increases up to a maximum of twice the target value. If the
+average ROACE falls short of the target value, the number of
+virtual shares, and thus also the amount paid out, decreases.
+In the event of a defined underperformance, there is no pay-
+out under performance matching.
+The equity deferral is determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral is converted into virtual
+shares and vests immediately. In the United States, the grant-
+ing of virtual shares in the amount of the equity deferral is
+generally scheduled to begin by 2015. Beneficiaries are addi-
+tionally granted virtual shares in the context of basis matching
+and performance matching. For members of the Board of
+Management of E.ON SE, the proportion of basis matching to
+the equity deferral is determined at the discretion of the Super-
+visory Board; for all other beneficiaries it is 2:1. The perfor-
+mance-matching target value at allocation is equal to that for
+basis matching in terms of amount. Performance matching will
+result in a payout only on achievement of a minimum perfor-
+mance, based on ROACE, as specified at the beginning of the
+term by the Board of Management and the Supervisory Board.
+Since 2013, E.ON has been granting virtual shares under the
+E.ON Share Matching Plan. At the end of its four-year term,
+each virtual share is entitled to a cash payout linked to the
+final E.ON share price established at that time. The calculation
+inputs for this long-term variable compensation package are
+equity deferral, basis matching and performance matching.
+E.ON Share Matching Plan
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the rights. The
+provision for the plan as of the balance sheet date is €31.8 mil-
+lion (2013: €19.7 million). The expense for the sixth and sev-
+enth tranches in the 2014 fiscal year was €12.4 million (2013:
+€1.1 million).
+6th tranche
+Jan. 1, 2011
+4 years
+€22.43
+€56.08
+€42.75
+Maximum amount paid
+Target value at issuance
+64,381
+Report of the Supervisory Board
+³Includes E.ON Business Services.
+Less: Non-controlling interests
+Income from discontinued operations, net
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+Less: Non-controlling interests
+Income/Loss from continuing operations
+€ in millions
+Earnings per Share
+the periods indicated is shown below:
+The computation of basic and diluted earnings per share for
+(13) Earnings per Share
+8བ
+32
+31
+47
+44
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+Net loss/income attributable to shareholders of E.ON SE
+in €
+Earnings per share (attributable to shareholders of E.ON SE)
+¹Figures do not include board members, managing directors, or apprentices.
+2Not including the Spanish and Italian entities reported as discontinued
+operations.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+and is presented on pages 203 through 215.
+CEO Letter
+The changes in goodwill and intangible assets, and in property,
+plant and equipment, are presented in the tables on the
+(14) Goodwill, Intangible Assets and
+Property, Plant and Equipment
+The initial application of IFRS 10 and IFRS 11 did not produce
+a change in earnings per share.
+Weighted-average number of shares outstanding (in millions)
+from net loss/income
+from discontinued operations
+from continuing operations
+following pages:
+2
+1,723
+The list of shareholdings pursuant to Section 313 (2) HGB is
+an integral part of these Notes to the Financial Statements
+Other attestation services
+16
+13
+Domestic
+24
+21
+2013
+2014
+Financial statement audits
+€ in millions
+Independent Auditor Fees
+During 2014 and 2013, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") Aktiengesellschaft,
+Wirtschaftsprüfungsgesellschaft, (domestic) and by companies
+in the international PwC network were recorded as expenses:
+Fees and Services of the Independent Auditor
+On December 15, 2014, the Board of Management and the
+Supervisory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+1
+21
+20
+German Corporate Governance Code
+16
+List of Shareholdings
+18
+Fees for other services consist primarily of technical support
+in IT and other projects.
+Fees for tax advisory services primarily include advisory
+on a case-by-case basis with regard to the tax treatment of
+M&A transactions, ongoing consulting related to the prepa-
+ration of tax returns and the review of tax assessments, as
+well as advisory on other tax-related issues, both in Germany
+and abroad.
+Fees for other attestation services concern in particular the
+review of the interim IFRS financial statements. Further
+included in this item are project-related reviews performed
+in the context of the introduction of IT and internal control
+systems, due-diligence services rendered in connection with
+acquisitions and divestitures, and other mandatory and vol-
+untary audits. Advisory charges included in the fees for other
+attestation services amounted to €2 million.
+The fees for financial statement audits concern the audit of
+the Consolidated Financial Statements and the legally man-
+dated financial statements of E.ON SE and its affiliates.
+ཟ་
+Domestic
+(12) Other Information
+Domestic
+Other services
+Tax advisory services
+Domestic
+Domestic
+Total
+1
+1
+45
+23,261
+23,306
+16,842
+16,797
+Other retained earnings
+Total
+45
+December 31
+2014
+2013
+€ in millions
+Retained Earnings
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+(21) Retained Earnings
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Legal reserves
+Under German securities law, E.ON SE shareholders may
+receive distributions from the balance sheet profit of E.ON SE
+reported as available for distribution in accordance with the
+German Commercial Code.
+Düsseldorf, Germany. In accordance with Section 253 (1) HGB,
+these investments are measured at fair value, which stood at
+€194 million as of the balance sheet date and exceeded by
+€8 million their cost of €186 million. The €8 million difference
+is fully attributable to increases in value. Taking into account
+deferred tax assets and liabilities, the resulting overall differ-
+ence was €8 million. This surplus is fully covered by a sufficient
+amount of available reserves. Accordingly, there is no restric-
+tion preventing payment of the proposed dividend distribution
+of €966 million for 2015.
+In order to fulfill retirement benefit obligations, funds have
+been invested as restricted, bankruptcy-remote assets in
+fund units administered in trust by E.ON Pension Trust e.V.
+and by Pensionsabwicklungstrust e.V., both registered in
+Accordingly, the amount of retained earnings available for
+distribution in principle is €6,487 million (2013: €5,731 million).
+A proposal to distribute a cash dividend for 2014 of €0.50 per
+share will be submitted to the Annual Shareholders Meeting.
+For 2013, shareholders at the April 30, 2014, Annual Shareholders
+Meeting voted to distribute a dividend of €0.60 for each divi-
+dend-paying ordinary share. Based on a €0.50 dividend, the
+total profit distribution is €966 million (2013: €1,145 million).
+In 2014, shareholders could for the first time choose between
+having their cash dividend entitlement settled entirely in cash
+and converting part of it into E.ON shares. Accounting for a
+participation rate of roughly 37 percent, 24,008,788 treasury
+shares were issued for distribution. This reduced the cash
+distribution to €840 million.
+(22) Changes in Other Comprehensive Income
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+€ in millions
+Balance as of December 31 (before taxes)
+2014
+-725
+2013
+-672
+Taxes
+4
+Combined Group Management Report
+As of December 31, 2014, these German-GAAP retained earnings
+totaled €6,540 million (2013: €5,776 million). Of this amount,
+legal reserves of €45 million (2013: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG.
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method:
+Gained voting
+E.ON Stock
+Information on Stockholders of E.ON SE
+The following notices pursuant to Section 21 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+Voting Rights
+in the amount of €175 million, which is authorized until May 2,
+2017. The conditional capital increase will be implemented
+only to the extent required to fulfill the obligations arising on
+the exercise by holders of option or conversion rights, and
+those arising from compliance with the mandatory conversion
+of bonds with conversion or option rights, profit participation
+rights and income bonds that have been issued or guaranteed
+by E.ON SE or a Group company of E.ON SE as defined by
+Section 18 AktG, and to the extent that no cash settlement has
+been granted in lieu of conversion and no E.ON SE treasury
+shares or shares of another listed company have been used to
+service the rights. However, this conditional capital increase
+only applies up to the amount and number of shares in which
+the conditional capital pursuant to Section 3 of the Articles
+of Association of E.ON AG has not yet been implemented at
+the point in time when the conversion of E.ON AG into a Euro-
+pean company ("SE") becomes effective in accordance with the
+conversion plan dated March 6, 2012. The conditional capital
+has not been used.
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights)
+Conditional Capital
+Stockholder
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Board of Management was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 2, 2017, the Company's capital stock by a total of up
+to €460 million through one or more issuances of new regis-
+tered no-par-value shares against contributions in cash and/or
+in kind (with the option to restrict shareholders' subscription
+rights); such increase shall not, however, exceed the amount
+and number of shares in which the authorized capital pursu-
+ant to Section 3 of the Articles of Association of E.ON AG still
+exists at the point in time when the conversion of E.ON AG
+into a European company ("SE") becomes effective pursuant to
+the conversion plan dated March 6, 2012 (authorized capital
+pursuant to Sections 202 et seq. AktG). Subject to the Super-
+visory Board's approval, the Board of Management is autho-
+rized to exclude shareholders' subscription rights. The autho-
+rized capital has not been used.
+156 Notes
+155
+The Company has further been authorized by the Annual
+Shareholders Meeting to buy shares using put or call options,
+or a combination of both. When derivatives in the form of
+put or call options, or a combination of both, are used to acquire
+shares, the option transactions must be conducted at market
+terms with a financial institution or on the market. No shares
+were acquired in 2014 using this purchase model.
+A total of 919,064 additional treasury shares were used for
+the employee stock purchase program and distributed to
+employees in 2014 (2013: 1,057,296 treasury shares used). See
+also Note 11 for information on the distribution of shares
+under the employee stock purchase program. A further 630
+treasury shares (2013: 672 shares) were also distributed.
+As part of the scrip dividend for the 2013 fiscal year, share-
+holder cash dividend entitlements totaling €305 million were
+settled through the issue and distribution of 24,008,788 treasury
+shares. The issue of treasury shares reduced by €964 million
+the valuation allowance for treasury shares, which is measured
+at historical cost. Conversely, additional paid-in capital was
+reduced by €649 million. This amount represents the difference
+between the historical cost and the subscription price of the
+shares. The discount of €9 million granted on the current share
+price is charged to retained earnings.
+Pursuant to a resolution by the Annual Shareholders Meeting
+of May 3, 2012, the Company is authorized to purchase own
+shares until May 2, 2017. The shares purchased, combined with
+other treasury shares in the possession of the Company, or
+attributable to the Company pursuant to Sections 71a et seq.
+AktG, may at no time exceed 10 percent of its capital stock.
+The Board of Management was authorized at the aforemen-
+tioned Annual Shareholders Meeting to cancel any shares thus
+acquired without requiring a separate shareholder resolution
+for the cancellation or its implementation. The total number of
+outstanding shares as of December 31, 2014, was 1,932,736,845
+(December 31, 2013: 1,907,808,363). As of December 31, 2014,
+E.ON SE and one of its subsidiaries held a total of 68.263.155
+treasury shares (December 31, 2013: 93,191,637) having a book
+value of €2,502 million (equivalent to 3.41 percent or €68,263,155
+of the capital stock).
+Authorized Capital
+Strategy and Objectives
+Date of notice
+1
+Report of the Supervisory Board
+CEO Letter
+amount represents the difference between the historical cost
+and the subscription price of the shares. The change further
+includes the loss realized on the sale of shares distributed to
+eligible employees of the E.ON Group under the employee
+stock purchase program.
+Additional paid-in capital declined by €656 million during
+2014, to €13,077 million (2013: €13,733 million). The reduction
+of additional paid-in capital is primarily due to the issue of
+treasury shares as part of the scrip dividend. Additional paid-
+in capital was reduced by €649 million in this context. This
+(20) Additional Paid-in Capital
+Absolute
+130,752,304
+Threshold
+exceeded
+6.53
+Allocation
+indirect
+rights on
+Dec. 22, 2014
+5%
+Dec. 24, 2014
+BlackRock Inc. New York, U.S.
+Voting rights
+Percentages
+Balance as of December 31 (after taxes)
+Exploration & Production
+-671
+Balance as of January 1, 2013
+Changes
+Available-for-sale
+Cash flow hedges
+securities
+34
+Currency translation
+Remeasurements of
+adjustments
+defined benefit plans
+-178
+-129
+2
+-12
+-116
+77
+2
+-238
+-590
+26
+4
+Balance as of December 31, 2014
+-186
+€ in millions
+-296
+2
+Changes
+Balance as of December 31, 2013
+-52
+-294
+22
+4
+Share of OCI Attributable to Non-Controlling Interests
+The decrease in non-controlling interests in 2014 resulted
+primarily from an impairment charge in Sweden in the Gen-
+eration global unit, from disposals in the Czechia regional
+unit (City of Prague Municipal Utility) and from changes in
+exchange rates in the Russia region.
+2,915
+194
+196
+308
+-29
+2013
+2014
+Renewables
+December 31
+€ in millions
+Non-Controlling Interests
+Non-controlling interests by segment as of the dates indicated
+are shown in the following table.
+(23) Non-Controlling Interests
+158 Notes
+157
+Generation
+-721
+Global Commodities
+1
+2,128
+Total
+189
+217
+Group Management/Consolidation
+542
+1
+220
+505
+427
+Other EU Countries
+1,176
+1,096
+Germany
+Russia
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests.
+The capital stock is subdivided into 2,001,000,000 registered
+shares with no par value ("no-par-value shares”) and amounts
+to €2,001,000,000 (2013: €2,001,000,000). The capital stock of
+the Company was provided by way of conversion of E.ON AG
+into a European Company ("SE").
+Current securities with an original maturity greater than three
+months include €265 million (2013: €81 million) in securities
+held by VKE that are restricted for the fulfillment of legal
+insurance obligations (see Note 31).
+Proportional share of equity
+49.0
+49.0
+47.2
+47.2
+36.9
+36.9
+25.0
+25.0
+15.5
+15.5
+49.0
+49.0
+Ownership interest (in %)
+-97
+-63
+608
+607
+778
+134
+705
+160
+303
+-92
+-88
+50
+56
+35
+9
+58
+95
+37
+37
+Consolidation adjustments
+-48
+-31
+287
+287
+287
+260
+290
+188
+240
+1,159
+752
+1,958
+207
+61
+495
+508
+185
+220
+(incl. provisions)
+Current liabilities
+152
+136
+299
+242
+522
+443
+423
+220
+947
+664
+239
+413
+348
+111
+169
+1,549
+326
+273
+Equity
+731
+739
+91
+90
+1,178
+216
+1,121
+432
+5,280
+5,109
+1,277
+1,192
+(incl. provisions)
+Non-current liabilities
+187
+163
+645
+216
+Carrying amount of equity
+investment
+-45
+Total comprehensive income
+-39
+234
+-219
+234
+-43
+Other comprehensive income
+57
+69
+41
+190
+535
+190
+18
+Dividend paid out
+33
+122
+67
+353
+127
+353
+67
+25.0
+25.0
+15.5
+15.5
+49.0
+49.0
+Ownership interest (in %)
+27
+1
+119
+-1
+52
+102
+87
+229
+24
+27
+ཙའ༠ ཚ
+-6
+122
+697
+481
+346
+-2
+2014
+€ in millions
+Nord Stream AG Severneftegazprom
+structure II S.à r.l.
+ОАО
+Esperanto Infra-
+Material Associates-Earnings Data
+168
+185
+195
+199
+337
+316
+325
+197
+361
+335
+197
+171
+2013
+2014
+2013
+2014
+operations
+Net income from continuing
+2013
+2014
+1,013 1,037
+574
+2013
+2014
+496
+Západoslovenská
+energetika a.s.
+AS Latvijas Gāze
+119
+Gasag Berliner
+Gaswerke AG
+2013
+1,300
+549
+371
+868
+1,074
+868
+546
+Sales
+2014
+2013
+1,099
+36.9
+Current assets
+703
+47
+12
+11
+29
+23
+18
+13
+Due in more than 5 years
+Total
+Due in 1 to 5 years
+Due within 1 year
+Nominal value of outstanding lease
+installments
+2013
+2014
+€ in millions
+E.ON as Lessor-Operating Leases
+E.ON also functions in the capacity of lessor. Contingent lease
+payments received totaled €57 million (2013: €58 million).
+Future lease installments receivable under operating leases
+are due as shown in the table at right:
+Regarding future obligations under operating leases where
+economic ownership is not transferred to E.ON as the lessee,
+see Note 27.
+The present value of the minimum lease obligations is
+reported under liabilities from leases.
+913
+59
+813
+See Note 17 for information on receivables from finance leases.
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+2,972
+246
+1,966
+9
+245
+1,573
+Equity investments
+5,652
+2,586
+2,423
+5,009
+Companies accounted for under the equity
+method
+Joint ventures
+December 31, 2013
+Associates¹
+E.ON Group
+Joint ventures
+December 31, 2014
+Associates¹
+E.ON Group
+€ in millions
+Companies Accounted for under the Equity Method and Other Financial Assets
+(15) Companies Accounted for under the Equity
+Method and Other Financial Assets
+1,337
+1,018
+2,250
+2014
+Present values
+Covered interest share
+Minimum lease payments
+Tables and Explanations
+Supervisory Board and Board of Management
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Total
+Due in more than 5 years
+Due in 1 to 5 years
+Due within 1 year
+€ in millions
+E.ON as Lessee-Payment Obligations under Finance Leases
+Some of the leases contain price-adjustment clauses, as well
+as extension and purchase options. The corresponding pay-
+ment obligations under finance leases are due as shown below:
+2013
+2014
+2013
+2014
+1,831
+707
+596
+1,013
+745
+1,720
+1,341
+163
+173
+2,680
+12
+259
+422
+390
+43
+44
+65
+56
+108
+100
+2013
+217
+Non-current securities
+4,781
+4,444
+€ in millions
+151
+Material Associates-Balance Sheet Data
+The Group adjustments presented are primarily attributable
+to the goodwill and hidden reserves created in the context of
+acquisitions, and to adjustments made in line with the
+accounting policies applicable throughout the E.ON Group.
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of compre-
+hensive income of the material companies accounted for
+under the equity method. The material associates in the E.ON
+Group are Nord Stream AG, OAO Severneftegazprom, Gasag
+Berliner Gaswerke AG, AS Latvijas Gāze, Esperanto Infrastruc-
+ture II S.à r.l. and Západoslovenská energetika a.s.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+-386
+-337
+-578
+-468
+192
+131
+Proportional share of total comprehensive income
+Non-current assets
+1,204
+Esperanto Infra-
+structure II S.à r.l.
+2014 2013
+1,549 6,502
+ОАО
+569
+566
+1,782
+1,796
+1,588
+1,025
+6,786
+2013
+2014
+-92
+2013
+2013
+2014
+2013
+2014
+energetika a.s.
+AS Latvijas Gāze
+Západoslovenská
+Gasag Berliner
+Gaswerke AG
+Nord Stream AG Severneftegazprom
+2014
+2013
+2014
+669
+5
+10
+Shares in Companies Accounted for under the
+Equity Method
+€729 million (2013: €666 million) in non-current securities is
+restricted for the fulfillment of legal insurance obligations of
+Versorgungskasse Energie ("VKE") (see Note 31).
+Impairments on other financial assets amounted to €72 million
+(2013: €84 million). The carrying amount of other financial
+assets with impairment losses was €337 million as of the
+end of the fiscal year (2013: €312 million).
+In 2013, the same equity investment had been written down
+by €342 million to a recoverable amount of €472 million due
+to project delays and technical aspects. The recoverable
+amount had been determined based on the value in use.
+The recoverable amount, which was determined during the
+year in terms of both value in use and fair value, is of mini-
+mal significance as of December 31, 2014, in light of the bank-
+ruptcy filing.
+The principal causes of these impairments were the invest-
+ee's operational challenges and the development of its stock
+price, as well as the company's filing for legal protection
+from creditors in order to facilitate the reorganization of its
+capital structure and the elevated financing costs that are
+associated with such restructuring.
+In 2014, impairment charges on companies accounted for
+under the equity method amounted to €491 million (2013:
+€468 million). This amount includes €467 million relating to a
+Brazilian equity investment in the Other Non-EU Countries
+segment.
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+Companies accounted for under the equity method consist
+solely of associates and joint ventures.
+150 Notes
+149
+¹The associates presented as equity investments are associated companies accounted for at cost on materiality grounds.
+2,692
+3,218
+12,062
+2,595
+2,668
+11,363
+Total
+The carrying amounts of the immaterial associates
+accounted for under the equity method totaled €1,019 mil-
+lion (2013: €1,389 million), and those of the joint ventures
+totaled €384 million (2013: €682 million).
+Investment income generated from companies accounted for
+under the equity method amounted to €301 million in 2014
+(2013: €659 million).
+The following table summarizes significant line items of the
+aggregated statements of comprehensive income of the
+associates and joint ventures that are accounted for under
+the equity method:
+Summarized Financial Information for Individually Non-Material Associates
+and Joint Ventures Accounted for under the Equity Method
+-3
+-5
+Proportional share of other comprehensive income
+-294
+-342
+-489
+-478
+195
+136
+-89
+Proportional share of net income from continuing operations
+2014
+2013
+2014
+2013
+2014
+€ in millions
+Total
+Joint ventures
+Associates
+2013
+Cash and cash equivalents include €2,434 million (2013:
+€3,987 million) in checks, cash on hand and balances in
+Bundesbank accounts and at other financial institutions with
+an original maturity of less than three months, to the extent
+that they are not restricted.
+36.9
+47.2
+2014
+up to 60 days
+Not impaired and past-due by
+Not impaired and not past-due
+€ in millions
+-411
+-313
+Write-downs
+25
+134
+Change in scope of consolidation
+Aging Schedule of Trade Receivables
+-881
+-1,065
+Balance as of January 1
+2013
+2014
+€ in millions
+Valuation Allowances for Trade Receivables
+2013
+Valuation allowances for trade receivables have changed as
+shown in the following table:
+Reversals of write-downs
+81
+-1,065
+-952
+Balance as of December 31
+44
+22
+91 to 180 days
+61 to 90 days
+934
+681
+2
+9
+Other¹
+1,362
+844
+119
+219
+Disposals
+11,949
+10,908
+64
+The individual impaired receivables are due from a large
+number of retail customers from whom it is unlikely that full
+repayment will ever be received. Receivables are monitored
+within the various units.
+The aging schedule of trade receivables primarily reflects
+a €670 million reduction in all receivables brought about by
+the reclassification of discontinued operations, and is pre-
+sented in the table below:
+addition, based on the provisions of IFRIC 5, other financial
+assets include a claim for a refund from the Swedish Nuclear
+Waste Fund in the amount of €1,879 million (2013: €1,768 mil-
+lion) in connection with the decommissioning of nuclear power
+plants and nuclear waste disposal. Since this asset is desig-
+nated for a particular purpose, E.ON's access to it is restricted.
+14,257
+11,800
+Trade receivables
+3,550
+1,654
+3,533
+1,376
+Financial receivables and other financial assets
+2,920
+1,559
+2,931
+1,333
+Other financial receivables and financial assets
+630
+95
+602
+43
+Receivables from finance leases
+Non-current
+Receivables from derivative financial instruments
+10,199
+3,517
+4,154
+154 Notes
+153
+other financial assets include receivables from owners of
+non-controlling interests in jointly owned power plants of
+€283 million (2013: €135 million) and margin account deposits
+for futures trading of €301 million (2013: €445 million). In
+In 2014, there were unguaranteed residual values of €18 million
+(2013: €18 million) due to E.ON as lessor under finance leases.
+Some of the leases contain price-adjustment clauses, as well
+as extension and purchase options. As of December 31, 2014,
+6,624
+22,728
+7,480
+25,687
+Total
+44
+3,074
+3,947
+24,311
+Trade receivables and other operating assets
+529
+2,663
+430
+2,312
+Other operating assets
+2,545
+21,074
+96
+181 to 360 days
+32
+Liquid Funds
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+(18) Liquid Funds
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+725
+645
+528
+477
+1,253
+1,122
+449
+418
+264
+December 31
+€ in millions
+2014
+Securities and fixed-term deposits
+In 2014, there was €1 million in restricted cash (2013: €3 million)
+with a maturity greater than three months.
+7,814
+6,067
+4,527
+3,191
+Total
+Cash and cash equivalents
+639
+1,064
+219
+Restricted cash and cash equivalents
+63
+original maturity greater than 3 months
+Fixed-term deposits with an
+2,316
+1,749
+original maturity greater than 3 months
+Current securities with an
+2013
+2,648
+1,812
+332
+Current
+713
+177
+The present value of the outstanding lease payments is
+Total
+Due in more than 5 years
+Due in 1 to 5 years
+Due within 1 year
+€ in millions
+E.ON as Lessor-Finance Leases
+Receivables from finance leases are primarily the result of
+certain electricity delivery contracts that must be treated as
+leases according to IFRIC 4. The nominal and present values of
+the outstanding lease payments have the following due dates:
+14,257
+11,800
+Total trade receivables
+946
+48
+Net value of impaired receivables
+202
+65
+more than 360 days
+1"Other" includes also currency translation adjustments.
+86
+reported under receivables from finance leases.
+Gross investment in
+finance lease
+arrangements
+183
+202
+198
+379
+381
+99
+44
+62
+60
+637
+161
+2013
+2014
+2013
+2014
+2013
+2014
+Present value of minimum
+lease payments
+income
+Unrealized interest
+104
+47.2
+Non-current
+December 31, 2014
+Current
+Material Joint Ventures-Balance
+Sheet Data
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income
+statements of the sole joint venture accounted for under the
+equity method, Enerjisa Enerji A.Ş.:
+152 Notes
+42
+22
+42
+23
+18
+19
+7
+39
+9
+10
+56
+8
+-5
+Equity-method earnings
+-8
+-1
+€ in millions
+9
+The material associates and joint ventures are active in diverse
+areas of the gas and electricity industries. Disclosures of com-
+pany names, registered offices and equity interests as required
+by IFRS 12 for material joint arrangements and associates
+can be found in the list of shareholdings pursuant to Section
+313 (2) HGB (see Note 36).
+Investments in associates totaling €532 million (2013:
+€685 million) were restricted because they were pledged as
+collateral for financing as of the balance sheet date.
+Non-current financial liabilities
+1,071
+979
+Current financial liabilities
+292
+78
+Cash and cash equivalents
+3,539
+3,923
+Non-current liabilities (incl. provisions)
+1,762
+1,678
+Current liabilities (incl. provisions)
+1,133
+1,138
+Current assets
+Enerjisa Enerji A.Ş.
+2014
+2013
+6,762
+7,441
+Non-current assets
+The carrying amounts of companies accounted for under the
+equity method whose shares are marketable totaled €212 mil-
+lion in 2014 (2013: €778 million). The fair value of E.ON's share
+in these companies was €227 million (2013: €545 million).
+5
+-4
+-5
+42
+14
+13
+30
+-2
+31
+17
+55
+20
+173
+-22
+prehensive income after taxes
+Proportional share of total com-
+49.0
+49.0
+103
+86
+29
+22
+51
+Proportional share of net
+income after taxes
+-1
+50
+43
+14
+14
+13
+23
+24
+8
+-8
+3,146
+-8
+-50
+-4
+Consolidation adjustments
+12
+31
+17
+18
+54
+58
+2
+2,813
+Equity
+2,978
+(16) Inventories
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+-58
+-45
+21
+-16
+-79
+-29
+Equity-method earnings
+Consolidation adjustments
+after taxes
+Proportional share of net income
+-73
+The following table provides a breakdown of inventories as
+of the dates indicated:
+Inventories
+€ in millions
+December 31
+€ in millions
+Receivables and Other Assets
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+(17) Receivables and Other Assets
+No inventories have been pledged as collateral.
+Write-downs totaled €101 million in 2014 (2013: €82 million).
+Reversals of write-downs amounted to €11 million in 2014
+(2013: €11 million).
+Raw materials, goods purchased for resale and finished
+products are generally valued at average cost.
+4,147
+3,356
+-27
+165
+Work in progress and finished products
+Total
+1,848
+1,432
+Goods purchased for resale
+2,134
+1,821
+Raw materials and supplies
+2013
+2014
+103
+December 31, 2013
+income after taxes
+50.0
+Write-downs (and reversals)
+Net income from continuing operations
+Sales
+€ in millions
+Material Joint Ventures-Earnings Data
+1,998
+2,202
+Carrying amount of equity investment
+701
+713
+Consolidation adjustments
+1,297
+1,489
+Proportional share of equity
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+50.0
+50.0
+Ownership interest (in %)
+2,594
+Interest income/expense
+Income taxes
+Enerjisa Enerji A.Ş.
+2014
+50.0
+Ownership interest (in %)
+-147
+-54
+Total comprehensive income
+11
+3
+Other comprehensive income
+Dividend paid out
+Proportional share of total comprehensive
+-12
+-106
+-272
+-72
+-27
+-158
+-57
+2,261
+3,880
+2013
+-17
+(19) Capital Stock
+2014
+2013
+Percentages
+Net periodic pension cost in the amount of €6 million was
+reclassified to net income from discontinued operations for 2013.
+184
+624
+4,766
+5,574
+Net liability as of December 31
+-4
+-4
+-162
+-2
+-164
+Other
+-4
+-2
+-6
+-6
+32
+26
+Exchange rate differences
+-404
+-404
+2
+2
+Changes in scope of consolidation
+-13
+-16
+3,418
+-29
+2,785
+303
+1,222
+296
+1,254
+305
+Personnel obligations
+7,218
+511
+7,162
+475
+10,300
+108
+10,977
+155
+Non-current
+Current
+Non-current
+December 31, 2013
+December 31, 2014
+Current
+Contractual nuclear waste management obligations
+Non-contractual nuclear waste management obligations
+€ in millions
+Miscellaneous Provisions
+the dates indicated:
+The following table lists the miscellaneous provisions as of
+(25) Miscellaneous Provisions
+330
+-13
+-27
+-40
+4,423
+4,943
+303
+330
+2,785
+3,418
+Net liability as of January 1
+Other
+countries
+United
+Kingdom
+Germany
+Total
+countries
+Other
+United
+Kingdom
+Germany
+Total
+€ in millions
+2013
+2014
+Changes in the Net Defined Benefit Liability
+The recognized net liability from the E.ON Group's defined
+benefit plans results from the difference between the present
+value of the defined benefit obligations and the fair value of
+plan assets:
+Description of the Net Defined Benefit Liability
+168 Notes
+167
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 20.1 years as of
+December 31, 2014 (2013: 19.2 years).
+201
+319
+Net periodic pension cost
+375
+Net benefit payments
+-5
+-157
+-921
+-1,083
+-6
+-108
+-1,182
+-1,296
+Employer contributions to plan assets
+-26
+195
+Other asset retirement obligations
+-673
+54
+285
+2,914
+3,253
+Changes from remeasurements
+32
+93
+380
+505
+14
+85
+276
+-504
+41
+2,105
+155
+480
+185
+282
+13
+-161
+-29
+-108
+-24
+Employee contributions
+1
+1
+1
+1
+Employer contributions
+1,296
+1,182
+108
+6
+1,083
+921
+157
+5
+Benefit payments
+-668
+-417
+in the interest income on plan assets
+Return on plan assets recognized in
+equity, not including amounts contained
+-24
+-108
+Other
+countries
+Fair value of plan assets as of January 1
+11,761
+6,789
+4,596
+376
+11,881
+6,769
+4,702
+410
+Interest income on plan assets
+514
+-244
+294
+3
+440
+230
+198
+12
+Remeasurements
+480
+185
+282
+13
+-161
+-29
+217
+For 2014, it is expected that overall employer contributions
+to plan assets will amount to a total of €475 million and
+primarily involve the funding of new and existing benefit
+obligations, with an amount of €180 million attributable to
+foreign companies.
+-7
+-447
+4,353
+25,802
+4,120
+Total
+2,884
+2,661
+3,092
+2,134
+Other
+784
+87
+796
+75
+Environmental remediation and similar obligations
+185
+334
+208
+381
+Customer-related obligations
+377
+201
+208
+554
+Supplier-related obligations
+1,765
+24,735
+A small portion of the plan assets consists of financial instru-
+ments of E.ON (2014: €0.4 billion; 2013: €0.4 billion). Because of
+the contractual structure, however, these instruments do not
+constitute an E.ON-specific risk to the CTA in Germany. The
+plan assets further include virtually no owner-occupied real
+estate and no equity or debt instruments issued by E.ON Group
+companies. Each of the individual plan asset components
+has been allocated to an asset class based on its substance.
+The plan assets thus classified break down as shown in the
+following table:
+The actual return on plan assets was a gain of €994 million
+in 2014 (2013: €279 million).
+The changes in the fair value of plan assets in the other
+countries is primarily the result of the reclassification of the
+fair value of the plan assets of Spanish companies to the
+"Liabilities associated with assets held for sale" line item on
+the balance sheet (see Note 4).
+-252
+-25
+Changes in scope of consolidation
+-655
+-655
+Exchange rate differences
+Other
+334
+-343
+336
+-2
+-101
+-99
+-724
+-2
+-3
+-3
+Fair value of plan assets
+as of December 31
+13,375
+8,033
+5,296
+46
+11,761
+6,789
+4,596
+376
+-343
+In 2014, E.ON made employer contributions to plan assets
+totaling €1,296 million (2013: €1,083 million) to fund existing
+defined benefit obligations.
+132
+2,769
+11
+8
+1
+9
+5
+3
+4
+4
+2
+60
+326
+Real estate
+Debt securities
+exchange
+5
+91
+73
+21
+5
+3
+8
+18
+14
+50
+21
+5
+Qualifying insurance policies
+29
+3
+100
+100
+100
+Total
+95
+9
+27
+22
+51
+3
+24
+15
+3
+Total unlisted plan assets
+1
+1
+22
+Other
+4
+6
+5
+2
+5
+4
+Cash and cash equivalents
+92
+3
+100
+58
+2
+253390
+55
+countries
+Kingdom
+Germany
+Total
+countries
+Germany Kingdom
+Total
+Other
+United
+Other
+United
+December 31, 2013
+December 31, 2014
+Equity securities not traded on an
+Plan assets not listed in an active market
+Total listed plan assets
+Other investment funds
+Corporate bonds
+Government bonds
+Debt securities¹
+Equity securities (stocks)
+Plan assets listed in an active market
+Percentages
+21
+25
+37
+13
+12
+19
+༄ཁྐྲསྐs ༐ æ
+78
+49
+97
+76
+85
+11
+16
+5
+46
+49
+9
+32
+2
+58
+24
+51
+48
+67
+46
+16
+1
+14
+5625
+15
+United
+Germany Kingdom
+100
+100
+253
+456
+724
+2015
+Other
+countries
+United
+Kingdom
+Total Germany
+€ in millions
+Prospective Benefit Payments
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2014, for the next ten years are
+shown in the following table:
+Benefit payments to cover defined benefit obligations totaled
+€708 million in 2014 (2013: €753 million); of this amount,
+€40 million (2013: €29 million) was not paid out of plan assets.
+Contributions to state plans totaled €0.3 billion (2013:
+€0.3 billion).
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €79 million in fixed contributions
+to external insurers or similar institutions was paid in 2014
+(2013: €71 million) for pure defined contribution plans.
+The past service cost for 2014 and 2013 consists mostly of the
+expenses incurred in the context of restructuring measures.
+165
+26
+93
+380
+499
+14
+85
+276
+375
+Total
+6
+15
+2016
+742
+474
+5,101
+8,002
+Total
+67
+1,456
+2,701
+4,224
+2020-2024
+13
+272
+503
+788
+132
+2019
+270
+488
+770
+2018
+Description of Contributions and Benefit Payments
+13
+262
+479
+754
+2017
+12
+256
+12
+100
+146
+14
+countries
+Kingdom
+Germany
+Total
+€ in millions
+Other
+United
+2013
+2014
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Net Periodic Pension Cost
+The net periodic pension cost for defined benefit plans
+included in the provisions for pensions and similar obligations
+is shown in the table below:
+Description of the Pension Cost
+The determination of the target portfolio structure for the
+individual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in
+a comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition
+of the capital markets and the structure of the benefit obli-
+gations, and is adjusted as necessary. The parameters used in
+the studies are additionally reviewed regularly, at least once
+each year. Asset managers are tasked with implementing the
+target portfolio structure. They are monitored for target
+achievement on a regular basis.
+currency hedging instruments) to facilitate the control of
+specific risk factors of pension liabilities. In the table above,
+derivatives have been allocated, based on their substance,
+to the respective asset classes in which they are used. In order
+to improve the funded status of the E.ON Group as a whole, a
+portion of the plan assets will also be invested in a diversified
+portfolio of asset classes that are expected to provide for
+long-term returns in excess of those of fixed-income invest-
+ments and thus in excess of the discount rate.
+To implement the investment objective, the E.ON Group primar-
+ily pursues an investment approach that takes into account
+the structure of the benefit obligations. This long-term invest-
+ment strategy seeks to manage the funded status, with the
+result that any changes in the defined benefit obligation,
+especially those caused by fluctuating inflation and interest
+rates are, to a certain degree, offset by simultaneous corre-
+sponding changes in the fair value of plan assets. The invest-
+ment strategy may also involve the use of derivatives (for
+example, interest rate swaps and inflation swaps, as well as
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. A deterioration of the net defined
+benefit liability or the funded status following an unfavorable
+development in plan assets or in the present value of the
+defined benefit obligations is identified in these guidelines as
+a risk that is controlled as part of a risk-budgeting concept.
+E.ON therefore regularly reviews the development of the funded
+status in order to monitor this risk.
+¹In Germany, 7 percent (2013: 10 percent) of plan assets are invested in other debt securities, in particular mortgage bonds ("Pfandbriefe"), in addition to government and
+corporate bonds.
+100
+Total
+Germany
+United
+Kingdom
+Other
+71
+93
+defined benefit liability/asset
+Net interest on the net
+-1
+-1
+Gains (-) and losses (+) on settlements
+7
+29
+44
+80
+-5
+8
+12
+30
+Past service cost
+11
+58
+204
+273
+12
+59
+182
+253
+Employer service cost
+countries
+23
+Classification of Plan Assets
+Total
+Other
+4,903
+230
+679
+729
+18,949
+15,179
+16,824
+8,033
+6,789
+6,769
+5,296
+4,596
+4,702
+46
+376
+410
+13,375
+11,761
+11,881
+4,766
+2,785
+4,423
+624
+330
+201
+4,926
+Other countries
+5,920
+9,574
+323
+359
+Non-controlling interests in equity
+2013
+2014
+2013
+2014
+2013
+2014
+€ in millions
+Avacon Group
+E.ON Russia Group
+E.ON România Group
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data
+The following tables provide a summary overview of cash
+flow and significant line items of the aggregated income
+statements and of the aggregated balance sheets of subsid-
+iaries with material non-controlling interests.
+Subsidiaries with material non-controlling interests are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests
+as required by IFRS 12 for subsidiaries with material non-con-
+trolling interests can be found in the list of shareholdings
+pursuant to Section 313 (2) HGB (see Note 36).
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+2012
+12,799
+11,192
+184
+303
+319
+To fund the pension plans for the German Group companies,
+plan assets were established in the form of a Contractual
+Trust Arrangement ("CTA"). The major part of these plan assets
+is administered by E.ON Pension Trust e.V. as trustee in accor-
+dance with specified investment principles. Additional domes-
+tic plan assets are managed by smaller German pension funds.
+The long-term investments and liquid funds administered by
+VKE do not constitute plan assets under IAS 19, but are almost
+exclusively intended for the coverage of benefit obligations
+at German E.ON Group companies.
+Only at the pension funds and at VKE do regulatory provisions
+exist in relation to capital investment or funding requirements.
+United Kingdom
+In the United Kingdom, there are various pension plans. Until
+2005 and 2008, respectively, employees were covered by defined
+benefit plans, which for the most part were final-pay plans
+and make up the majority of the pension obligations currently
+reported for the United Kingdom. These plans were closed to
+employees hired after these dates. Since then, new hires are
+offered a defined contribution plan. Aside from the payment
+of contributions, this plan entails no additional actuarial risks
+for the employer.
+Benefit payments to the beneficiaries of the currently existing
+defined benefit pension plans are adjusted for inflation as
+measured by the U.K. Retail Price Index ("RPI").
+Plan assets in the United Kingdom are administered in a pen-
+sion trust. The trustees are selected by the members of the plan
+or appointed by the entity. In that capacity, the trustees are
+particularly responsible for the investment of the plan assets.
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding condi-
+tions be performed every three years. The actuarial assumptions
+underlying the valuation are agreed upon by the trustees
+and E.ON UK plc. They include presumed life expectancy, wage
+and salary growth rates, investment returns, inflationary
+assumptions and interest rate levels. The most recent technical
+valuation took place as of March 31, 2010, and resulted in a
+technical funding deficit of £446 million. The agreed deficit
+repair plan provides for annual payments of £34 million to
+the pension trust. A revaluation of the technical funded status
+was performed as of March 31, 2013; it is not yet complete as
+of the balance sheet date.
+Other Countries
+The remaining pension obligations are spread across various
+international activities of the E.ON Group.
+However, these benefit plans in Belgium, France, Russia,
+Sweden, Norway, Romania, the Czech Republic and the United
+States are of minor significance from a Group perspective.
+Description of the Benefit Obligation
+The following table shows the changes in the present value
+of the defined benefit obligations for the periods indicated:
+Changes in the Defined Benefit Obligation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+2014
+2013
+United
+Other
+The benefit expense for all the cash balance plans mentioned
+above is dependent on compensation and is determined at
+different percentage rates based on the ratio between compen-
+sation and the contribution limit in the statutory retirement
+pension system in Germany. Employees can additionally choose
+to defer compensation. The cash balance plans contain dif-
+ferent interest rate assumptions for the pension units. Whereas
+fixed interest rate assumptions apply for both the BAS Plan
+and the Zukunftssicherung plan, the units of capital for the
+open IQ Plan earn interest at the average yield of long-term
+government bonds of the Federal Republic of Germany
+observed in the fiscal year. Future pension increases at a rate
+of 1 percent are guaranteed for a large number of active
+employees. For the remaining eligible individuals, pensions
+are adjusted mostly in line with the rate of inflation, usually
+in a three-year cycle.
+162 Notes
+161
+The only benefit plan open to new hires is the E.ON IQ contri-
+bution plan (the "IQ Plan"). This plan is a "units of capital"
+system that provides for the alternative payout options of a
+prorated single payment and payments of installments in
+addition to the payment of a regular pension.
+Total
+5,574
+3,418
+4,943
+-2
+Presented as operating receivables
+Presented as provisions for pensions and similar obligations
+5,574
+3,418
+4,945
+CEO Letter
+Report of the Supervisory Board
+220
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Description of the Benefit Plans
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning,
+most active and former E.ON Group employees are also covered
+by occupational benefit plans. Both defined benefit plans and
+defined contribution plans are in place at E.ON. Benefits under
+defined benefit plans are generally paid upon reaching retire-
+ment age, or in the event of disability or death.
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates,
+as well as inflation and rising wages and salaries. In order to
+avoid exposure to future risks from occupational benefit plans,
+newly designed pension plans were introduced at the major
+German and foreign E.ON Group companies beginning in
+1998. Virtually all employees hired at E.ON Group companies
+after 1998 are now covered by benefit plans for which the
+risk factors can be better calculated and controlled as pre-
+sented below.
+The existing entitlements under defined benefit plans as of
+the balance sheet date cover about 54,000 retirees and their
+beneficiaries (2013: 56,000), about 15,000 former employees
+with vested entitlements (2013: 14,000) and about 42,000 active
+employees (2013: 47,000. Aside from normal employee turn-
+over, the changes from the previous year resulted especially
+from restructuring programs and from the reclassification
+of companies and their staff to discontinued operations (see
+Note 4). The corresponding present value of the defined
+benefit obligations is attributable to retirees and their bene-
+ficiaries in the amount of €10.4 billion (2013: €9.1 billion), to
+former employees with vested entitlements in the amount
+of €2.6 billion (2013: €1.6 billion) and to active employees in
+the amount of €5.9 billion (2013: €4.5 billion).
+The features and risks of defined benefit plans are regularly
+shaped by the general legal, tax and regulatory conditions
+prevailing in the respective country. The configurations of the
+major defined benefit and defined contribution plans within
+the E.ON Group are described in the following discussion.
+Germany
+Active employees at the German Group companies are pre-
+dominantly covered by cash balance plans. In addition, some
+final-pay arrangements, and a small number of fixed-amount
+arrangements, still exist under individual contracts.
+The majority of the reported benefit obligation toward active
+employees is centered on the "BAS Plan," a pension unit system
+launched in 2001, and on a "provision for the future" ("Zukunfts-
+sicherung") plan, a variant of the BAS Plan that emerged
+from the harmonization in 2004 of numerous benefit plans
+granted in the past. In the Zukunftssicherung benefit plan,
+vested final-pay entitlements are considered in addition to
+the defined contribution pension units when determining
+the benefit. These plans are closed to new hires.
+The plans described in the preceding paragraph generally
+provide for ongoing pension benefits that generally are
+payable upon reaching the age threshold, or in the event of
+disability or death.
+Strategy and Objectives
+542
+604
+571
+190
+306
+232
+355
+108
+121
+3,110
+3,144
+1,865
+1,518
+1,127
+1,168
+79
+120
+38
+58
+65
+55
+2013
+2014
+2013
+2014
+Avacon Group
+E.ON Russia Group
+2013
+126
+103
+-1,509
+-405
+December 31
+United Kingdom
+Germany
+Net defined benefit liability/asset (-)
+Total
+Other countries
+United Kingdom
+Germany
+Fair value of plan assets
+Total
+Other countries
+United Kingdom
+2014
+Germany
+€ in millions
+The present value of the defined benefit obligations, the fair
+value of plan assets and the net defined benefit liability
+(funded status) are presented in the following table for the
+dates indicated:
+not constitute plan assets under IAS 19 but which are mostly
+intended for the coverage of retirement benefit obligations
+at E.ON Group companies in Germany (see Note 31).
+Provisions for Pensions and Similar Obligations
+In addition to the reported plan assets, VKE, which is included
+in the Consolidated Financial Statements, administers another
+fund holding assets of €1.0 billion (2013: €0.8 billion) that do
+The retirement benefit obligations toward the active and
+former employees of the E.ON Group, which amounted to
+€18.9 billion, were covered by plan assets having a fair value
+of €13.4 billion as of December 31, 2014. This corresponds to
+a funded status of 71 percent.
+(24) Provisions for Pensions and Similar
+Obligations
+160 Notes
+159
+There are no major restrictions beyond those under custom-
+ary corporate or contractual provisions. Foreign-exchange
+transactions out of the Russian Federation may be restricted
+in certain cases.
+188
+302
+Present value of all defined benefit obligations
+€ in millions
+E.ON România Group
+Net income
+47
+340
+617
+477
+206
+118
+54
+63
+70
+76
+28
+Current liabilities
+Non-current liabilities
+Current assets
+Non-current assets
+Operating cash flow
+interests
+Dividends paid out to non-controlling
+36.7
+36.9
+16.3
+16.3
+9.8
+9.8
+Non-controlling interests in equity (in %)¹
+888
+825
+3,191
+4,798
+Sales
+non-controlling interests
+Share of earnings attributable to
+€ in millions
+Subsidiaries with Material Non-Controlling Interests-Earnings Data
+¹Non-controlling interests in the lead company of the respective group.
+632
+831
+122
+94
+396
+348
+Comprehensive income
+1,152
+422
+271
+218
+209
+738
+658
+868
+324
+546
+562
+2,467
+2,822
+1,495
+Total
+Germany
+Kingdom
+2.50
+2.50
+United Kingdom
+3.10
+3.40
+3.40
+Germany
+Pension increase rate
+Germany¹
+1.75
+2.00
+2.00
+United
+Kingdom
+United Kingdom
+2.90
+3.10
+2.70
+2005 G versions of the Klaus Heubeck biometric
+tables (2005)
+CMI "00" and "S1" series base mortality tables 2014,
+taking into account future changes in mortality
+¹The pension increase rate for Germany applies to eligible individuals not subject
+to an agreed guarantee adjustment.
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of
+the defined benefit obligations:
+Sensitivities
+Change in the present value of the defined benefit obligations
+December 31, 2014
+December 31, 2013
+Change in the discount rate by (basis points)
+2.50
+Germany
+Wage and salary growth rate
+4.40
+9,574
+4,926
+679
+The benefit obligations in the other countries relate mostly
+to the benefit plans at the E.ON Group companies in France
+(2014: €134 million; 2013: €97 million).
+The net actuarial losses generated in 2014 are largely attribut-
+able to a general decrease in the discount rates used within
+the E.ON Group. This decrease was partly offset by the lowering
+of the pension increase rate in Germany that applies to E.ON
+in the absence of an agreed guarantee adjustment, and the
+reduction of the wage and salary growth rates and pension
+increase rates used by the Group companies in the United
+Kingdom as the basis for measuring the benefit obligation as
+of December 31, 2014.
+The change in the present value of the defined benefit obli-
+gations in the other countries is primarily the result of the
+reclassification of the present value of defined benefit obli-
+gations of Spanish companies to the "Liabilities associated
+with assets held for sale" line item on the balance sheet
+(see Note 4).
+163
+164 Notes
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost
+at E.ON's German and U.K. subsidiaries as of the respective
+balance sheet date are as follows:
+Actuarial Assumptions
+December 31
++50
+2014
+2012
+The discount rate assumptions used by E.ON basically reflect
+the currency-specific rates available at the end of the respective
+fiscal year for high-quality corporate bonds with a duration
+corresponding to the average period to maturity of the respec-
+tive obligation.
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+Actuarial Assumptions (Mortality Tables)
+Discount rate
+Germany
+2.00
+3.90
+3.40
+United Kingdom
+3.70
+4.60
+2013
+15,179
+-50
+-50
+-2.96
+3.32
+-2.44
+2.70
+A 10-percent decrease in mortality would result in a higher
+life expectancy of beneficiaries, depending on the age of each
+individual beneficiary. As of December 31, 2014, the life
+expectancy of a 63-year-old male E.ON retiree would increase
+by approximately one year if mortality were to decrease by
+10 percent.
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+assumptions is changed for the purpose of computing the
+sensitivity of results to changes in that assumption, all other
+actuarial assumptions are included in the computation
+unchanged.
+When considering sensitivities, it must be noted that the
+change in the present value of the defined benefit obligations
+resulting from changing multiple actuarial assumptions
+simultaneously is not necessarily equivalent to the cumulative
+effect of the individual sensitivities.
+Description of Plan Assets and the
+Investment Policy
+The defined benefit plans are funded by plan assets held in
+specially created pension vehicles that legally are distinct
+from the Company. The fair value of these plan assets changed
+as follows:
+Changes in the Fair Value of Plan Assets
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+2014
+2013
+€ in millions
+Total
+Germany
+United
+Kingdom
+-10
++10
+-10
++10
+Change in percent
+-7.85
+8.96
+-6.88
+7.66
+Change in the wage and salary growth rate by (basis points)
+Change in percent
++25
+-25
++25
+-25
+0.47
+-0.46
++50
+0.47
+Change in the pension increase rate by (basis points)
++25
+-25
++25
+-25
+Change in percent
+Change in mortality by (percent)
+Change in percent
+1.86
+-1.79
+1.78
+-1.70
+-0.46
+countries
+230
+12,799
+44
+29
+7
+Gains (-) and losses (+) on settlements
+-1
+-1
+Interest cost on the present value of the
+defined benefit obligations
+Remeasurements
+607
+365
+231
+3,733
+3,099
+567
+16
+11
+589
+362
+204
+23
+67
+-665
+-702
+87
+-50
+80
+-5
+12
+23
+countries
+Total
+Germany
+United
+Kingdom
+Other
+countries
+Defined benefit obligation as of January 1
+15,179
+9,574
+4,926
+679
+16,824
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+Actuarial gains (-)/losses (+) arising from
+changes in financial assumptions
+11,192
+729
+Employer service cost
+253
+182
+59
+12
+276
+204
+58
+14
+Past service cost
+30
+4,903
+5,920
+-14
+1
+-20
+-753
+-463
+-252
+-38
+Changes in scope of consolidation
+2
+2
+-1,059
+-1,059
+Exchange rate differences
+360
+368
+-8
+Other
+-507
+-2
+-505
+-107
+-7
+-101
+-6
+-4
+-3
+Defined benefit obligation as of December 31
+18,949
+-244
+-444
+-708
+Benefit payments
+40
+39
+1
+3,794
+3,143
+579
+72
+-721
+-784
+90
+27
+-27
+-15
+Actuarial gains (-)/losses (+) arising from
+experience adjustments
+-44
+3
+-6
+16
+82
+-42
+-24
+Employee contributions
+1
+1
+1
+1
+-47
+166 Notes
+1,920
+The changes in the miscellaneous provisions are shown in
+the table below:
+Capital expenditure grants
+15
+366
+381
+39
+412
+451
+Construction grants from energy consumers
+217
+1,856
+2,073
+218
+2,116
+2,334
+Liabilities from derivatives
+9,908
+3,868
+1,462
+12,045
+Other operating liabilities
+586
+290
+296
+2,485
+497
+245
+Advance payments
+6,782
+2,445
+4,337
+13,776
+252
+13,507
+2,485
+2,185
+Provisions for Other Asset Retirement Obligations
+The provisions for other asset retirement obligations consist
+of obligations for conventional and renewable-energy power
+plants, including the conventional plant components in the
+nuclear power segment, that are based on legally binding civil
+agreements and public regulations. Also reported here are
+provisions for environmental improvements at gas storage
+facilities, for the dismantling of installed infrastructure and
+for environmental-improvement obligations in the Explora-
+tion & Production segment.
+Supplier-Related Obligations
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Provisions for customer-related obligations consist primarily
+of potential losses on rebates and on open sales contracts.
+Environmental Remediation and Similar Obligations
+Provisions for environmental remediation refer primarily to
+redevelopment and water protection measures and to the
+rehabilitation of contaminated sites. Also included here are
+provisions for other environmental improvement measures
+and for land reclamation obligations at mining sites.
+Other
+The other miscellaneous provisions consist primarily of provi-
+sions from the electricity and gas business. Further included
+here are provisions for potential obligations arising from tax-
+related interest expenses and from taxes other than income
+taxes.
+171
+172 Notes
+(26) Liabilities
+The following table provides a breakdown of liabilities:
+Liabilities
+December 31, 2014
+December 31, 2013
+€ in millions
+Trade payables
+22,724
+18,051
+4,673
+19,667
+15,784
+2,185
+3,883
+Total
+Non-current
+Current
+Total
+Non-current
+Current
+Financial liabilities
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, in-kind obligations, restructuring and other
+deferred personnel costs.
+14,082
+15,573
+Coupon
+EUR 1,118 million²
+7 years
+Sep 2015
+5.250%
+EUR 1,238 million³
+7 years
+Jan 2016
+5.500%
+EUR 900 million
+15 years
+May 2017
+6.375%
+EUR 1,769 million4
+10 years
+Oct 2017
+5.500%
+30 years
+GBP 975 million³
+5.750%
+May 2020
+12 years
+EUR 1,400 million
+Repayment
+6.000%
+12 years
+GBP 850 million6
+5.800%
+Apr 2018
+10 years
+USD 2,000 million5
+Oct 2019
+1,491
+Initial term
+Volume in the
+Trade payables and other operating liabilities
+24,615
+7,804
+32,419
+21,457
+6,754
+28,211
+Total
+28,498
+23,588
+52,086
+26,130
+24,805
+50,935
+Financial Liabilities
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+Group Management
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+respective currency
+CEO Letter
+At year-end 2014, the following EIF bonds were outstanding:
+E.ON SE and EIF have in place a Debt Issuance Program
+enabling the issuance from time to time of debt instruments
+through public and private placements to investors. The total
+amount available under the program is €35 billion. The program
+was extended in April 2014 for another year as planned.
+€35 Billion Debt Issuance Program
+clauses and cross-default clauses, each referring to a restricted
+set of significant circumstances. Financial covenants (that is,
+covenants linked to financial ratios) are not employed.
+The financing activities of E.ON SE, E.ON International Finance
+B.V. ("EIF"), Rotterdam, The Netherlands, and E.ON Beteiligun-
+gen GmbH involve the use of covenants consisting primarily
+of change-of-control clauses, negative pledges, pari-passu
+Covenants
+Major Bond Issues of E.ON International Finance B.V.¹
+Personnel Obligations
+1,121
+6,608
+Total
+871
+-1
+-1
+18
+83
+-45
+-3
+-51
+871
+5,545
+33
+-268
+86
+2,021
+-1,495
+17
+As of December 31, 2014, the interest rates applied for the
+nuclear power segment, calculated on a country-specific basis,
+were 4.7 percent (2013: 4.8 percent) in Germany and 3.0 per-
+cent (2013: 3.0 percent) in Sweden. The other provision items
+relate almost entirely to issues in countries of the euro area,
+as well as in the U.K. and Sweden. The interest rates used with
+regard to these issues ranged from 0 percent to 2.6 percent,
+depending on maturity (2013: 0.4 percent to 4.0 percent).
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 9).
+29,922
+680
+-973
+32
+Other
+-2,763
+1,087
+-589
+-71
+29,088
+5,226
+-713
+3,431
+Provisions for Non-Contractual Nuclear Waste
+Management Obligations
+obligations
+Environmental remedia-
+Other asset retirement
+-257
+54
+170
+-42
+-6
+-1
+280
+2,146
+Supplier-related
+obligations
+578
+-1
+3
+499
+-253
+28
+589
+-50
+-8
+-55
+188
+2
+tion and similar
+-8
+519
+obligations
+Customer-related
+762
+22
+-92
+1
+Of the total of €11.1 billion in provisions based on German and
+Swedish nuclear power legislation, €10.0 billion is attributable
+to the operations in Germany and €1.1 billion is attributable
+to the Swedish operations. The provisions comprise all those
+nuclear obligations relating to the disposal of spent nuclear
+fuel rods and low-level nuclear waste and to the retirement and
+decommissioning of nuclear power plant components that are
+determined on the basis of external studies and cost estimates.
+The provisions are classified primarily as non-current provisions
+and measured at their settlement amounts, discounted to
+the balance sheet date.
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Changes in estimates increased provisions in 2014 by €6 million
+(2013: €780 million) at the German operations. Provisions were
+utilized in the amount of €419 million (2013: €331 million), of
+which €287 million (2013: €137 million) relates to nuclear
+power plants that are being dismantled or are in shutdown
+mode, on the basis of issues for which retirement and decom-
+missioning costs had been capitalized. The Swedish opera-
+tions recorded an increase in provisions of €20 million (2013:
+€195 million) resulting from changes in estimates. Provisions
+were utilized in the amount of €61 million (2013: €77 million),
+of which €39 million (2013: €31 million) is attributable to
+the Barsebäck nuclear power plant, which is in post-operation.
+Retirement and decommissioning costs had already been
+capitalized for the underlying issues.
+The following table lists the provisions by technical specifica-
+tion as of the dates indicated:
+Provisions for Contractual Nuclear Waste Management Obligations
+€ in millions
+Decommissioning
+Disposal of nuclear fuel rods and operational waste
+Advance payments
+Total
+December 31, 2014
+Germany
+Sweden
+1,059
+6,578
+143
+161
+728
+3,286
+CEO Letter
+690
+393
+3,465
+369
+3,425
+Sweden
+December 31, 2013
+Germany
+3,314
+Concerning the disposal of spent nuclear fuel rods, the obli-
+gations recognized in the provisions comprise the contractual
+costs of finalizing reprocessing and the associated return
+of waste with subsequent interim storage at Gorleben and
+Ahaus, as well as costs incurred for interim on-site storage,
+including the necessary interim storage containers, arising
+from the "direct permanent storage" path. The provisions also
+include the contractual costs of decommissioning and the
+conditioning of low-level radioactive waste.
+Advance payments made to other waste management com-
+panies in the amount of €161 million (2013: €143 million) have
+been deducted from the provisions attributed to Germany.
+The advance payments relate to the delivery of interim storage
+containers.
+The provisions are classified primarily as non-current provisions
+and measured at their settlement amounts, discounted to the
+balance sheet date.
+Germany
+December 31, 2014
+December 31, 2013
+Germany
+Disposal of nuclear fuel rods and operational waste
+Advance payments
+Total
+Decommissioning
+€ in millions
+Sweden
+Provisions for Non-Contractual Nuclear Waste Management Obligations
+Changes in estimates increased provisions in 2014 by
+€374 million (2013: provisions reduced by €563 million) at the
+German operations. Provisions were utilized in the amount
+of €59 million (2013: €54 million), of which €24 million (2013:
+€23 million) relates to nuclear power plants that are being
+dismantled or are in shutdown mode, on the basis of issues
+for which retirement and decommissioning costs had been
+capitalized. As in 2013, there were no changes in estimates
+affecting provisions at the Swedish operations in 2014, and
+no provisions were utilized.
+The cost estimates used to determine the provision amounts
+are all based on studies performed by external specialists and
+are updated annually. The amendments to the German Nuclear
+Energy Act of August 6, 2011, were taken into account in the
+measurement of the provisions in Germany.
+The decommissioning costs and the cost of disposal of spent
+nuclear fuel rods and low-level nuclear waste also include in
+each case the actual final storage costs. Final storage costs
+consist particularly of the expected investment, operating and
+decommissioning costs for the final storage projects Gorleben
+and Konrad and are based on data from the German Federal
+Office for Radiation Protection and on Germany's ordinance
+on advance payments for the establishment of facilities for the
+safe custody and final storage of radioactive wastes in the
+country ("Endlagervorausleistungsverordnung"); additional costs
+arise from the German legislation governing the selection of
+a repository site for high-level radioactive waste ("Standort-
+auswahlgesetz" or "StandAG"), which took effect in the third
+quarter of 2013. Advance payments remitted to the Federal
+Office for Radiation Protection and the Federal Office for the
+Regulation of Nuclear Waste Management in the amount of
+€1,125 million (2013: €1,066 million) have been deducted from
+the provisions. These payments are made each year based on
+the amount spent by the two aforementioned Federal Offices.
+170 Notes
+Additionally included in the disposal of spent nuclear fuel rods
+are costs for transports to the final storage facility and the
+cost of proper conditioning prior to final storage, including
+the necessary containers.
+The asset retirement obligations recognized for non-contrac-
+tual nuclear obligations include the anticipated costs of post-
+and service operation of the facility, dismantling costs, and
+the cost of removal and disposal of the nuclear components
+of the nuclear power plant.
+The following table lists the provisions by technical specifica-
+tion as of the dates indicated:
+June 2032
+Sweden
+408
+Of the total of €7.6 billion in provisions based on German and
+Swedish nuclear power legislation, €6.6 billion is attributable
+to the operations in Germany and €1.0 billion is attributable
+to the Swedish operations. The provisions comprise all those
+contractual nuclear obligations relating to the disposal of
+spent nuclear fuel rods and low-level nuclear waste and to the
+retirement and decommissioning of nuclear power plant
+components that are measured at amounts firmly specified
+in legally binding civil agreements.
+Provisions for Contractual Nuclear Waste Manage-
+ment Obligations
+1,176
+9,232
+1,143
+9,989
+8,393
+1,066
+756
+2,492
+735
+2,721
+420
+7,806
+1,125
+obligations
+6.375%
+30 years
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+exceed accumulated funds. In addition, the companies of the
+Swedish generation unit and their parent company are also
+responsible for any costs related to the disposal of low-level
+radioactive waste.
+In Sweden, owners of nuclear facilities are liable for damages
+resulting from accidents occurring in those nuclear facilities
+and for accidents involving any radioactive substances con-
+nected to the operation of those facilities. The liability per
+incident as of December 31, 2014, was limited to SEK 3,394 mil-
+lion, or €361 million (2013: SEK 3,007 million, or €339 million).
+This amount must be insured according to the Law Concerning
+Nuclear Liability. The necessary insurance for the affected
+nuclear power plants has been purchased. On July 1, 2010, the
+Swedish Parliament passed a law that requires the operator
+of a nuclear power plant in operation to have liability insurance
+or other financial security in an amount equivalent to €1.2 bil-
+lion per facility. As of December 31, 2014, the conditions enabling
+this law to take effect were not yet in place.
+The Generation global unit operates nuclear power plants
+only in Germany and Sweden. Accordingly, there are no addi-
+tional contingencies comparable to those mentioned above.
+Other Financial Obligations
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are
+other mostly long-term financial obligations arising mainly
+from contracts entered into with third parties, or on the basis
+of legal requirements.
+As of December 31, 2014, purchase commitments for invest-
+ments in intangible assets and in property, plant and equip-
+ment amounted to €1.7 billion (2013: €2.5 billion). Of these
+commitments, €1.3 billion are due within one year. This total
+mainly includes financial obligations for as yet outstanding
+investments in connection with new power plant construction
+projects and the expansion and modernization of existing
+generation assets, as well as with gas infrastructure projects,
+particularly at the Generation, Renewables, Global Commodi-
+ties, Germany, Russia and Sweden units. On December 31, 2014,
+the obligations for new power plant construction reported
+under these purchase commitments totaled €0.9 billion. They
+also include the obligations relating to the construction of
+wind power plants.
+Additional financial obligations arose from rental and tenancy
+agreements and from operating leases. The corresponding
+minimum lease payments are due as broken down in the
+table below:
+€ in millions
+Due within 1 year
+E.ON as Lessee-Operating Leases
+2014
+Minimum lease payments
+2013
+177
+Gas is usually procured on the basis of long-term purchase
+contracts with large international producers of natural gas.
+Such contracts are generally of a "take-or-pay" nature. The
+prices paid for natural gas are tied to the prices of competing
+energy sources or market reference prices, as dictated by
+market conditions. The conditions of these long-term contracts
+are reviewed at certain specific intervals (usually every three
+years) as part of contract negotiations and may thus change
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2014, relate primarily to the
+purchase of fossil fuels such as natural gas, lignite and hard
+coal. Financial obligations under these purchase contracts
+amounted to approximately €235.8 billion on December 31, 2014
+(€10.8 billion due within one year).
+The expenses reported in the income statement for such con-
+tracts amounted to €210 million (2013: €254 million). They
+include contingent rents that were expensed when they arose
+in 2014.
+Due in 1 to 5 years
+1,269
+Report of the Supervisory Board
+1,555
+795
+Due in more than 5 years
+Total
+481
+539
+209
+221
+579
+178 Notes
+CEO Letter
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a
+Solidarity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement dated
+March 25, April 18, April 28, and June 1, 2011. If an accident
+occurs, the Solidarity Agreement calls for the nuclear power
+plant operator liable for the damages to receive-after the
+operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement,
+E.ON Energie's share of the liability coverage on December 31,
+2014, remained unchanged from 2013 at 42.0 percent plus
+an additional 5.0 percent charge for the administrative costs
+of processing damage claims. Sufficient liquidity has been
+provided for within the liquidity plan.
+58
+65
+53
+79
+905
+1,220
+2,910
+2,795
+306
+343
+191
+330
+16,621
+19,697
+19,667
+22,724
+Construction grants of €2,073 million (2013: €2,334 million)
+were paid by customers for the cost of new gas and electricity
+connections in accordance with the generally binding terms
+governing such new connections. These grants are customary
+in the industry, generally non-refundable and recognized
+as revenue according to the useful lives of the related assets.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The insti-
+tution Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts
+("Nuklear Haftpflicht GbR") now only covers costs between
+€0.5 million and €15 million for claims related to officially
+ordered evacuation measures. Group companies have agreed
+to place their subsidiaries operating nuclear power plants
+in a position to maintain a level of liquidity that will enable
+them at all times to meet their obligations as members of
+the Nuklear Haftpflicht GbR, in proportion to their sharehold-
+ings in nuclear power plants.
+The guarantees of E.ON also include items related to the oper-
+ation of nuclear power plants. With the entry into force of
+the German Nuclear Energy Act ("Atomgesetz" or "AtG"), as
+amended, and of the ordinance regulating the provision for
+coverage under the Atomgesetz ("Atomrechtliche Deckungs-
+vorsorge-Verordnung" or "AtDeckV") of April 27, 2002, as
+amended, German nuclear power plant operators are required
+to provide nuclear accident liability coverage of up to €2.5 bil-
+lion per incident.
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+In addition, E.ON has also entered into indemnification agree-
+ments. Along with other guarantees, these indemnification
+agreements are incorporated in agreements entered into by
+Group companies concerning the disposal of shareholdings
+and, above all, cover the customary representations and war-
+ranties, as well as environmental damage and tax contingen-
+cies. In some cases, obligations are covered in the first instance
+by provisions of the disposed companies before E.ON itself is
+required to make any payments. Guarantees issued by compa-
+nies that were later sold by E.ON SE (or VEBA AG and VIAG AG
+before their merger) are usually included in the respective
+final sales contracts in the form of indemnities.
+E.ON has issued direct and indirect guarantees to third parties,
+which require E.ON to make contingent payments based on
+the occurrence of certain events. These consist primarily of
+financial guarantees and warranties.
+The fair value of the E.ON Group's contingent liabilities arising
+from existing contingencies was €48 million as of Decem-
+ber 31, 2014 (2013: €52 million). E.ON currently does not have
+reimbursement rights relating to the contingent liabilities
+disclosed.
+In accordance with Swedish law, the companies of the Swedish
+generation unit and their parent company have issued guar-
+antees to governmental authorities. The guarantees were issued
+to cover possible additional costs related to the disposal of
+high-level radioactive waste and to the decommissioning of
+nuclear power plants. These costs could arise if actual costs
+Contingencies
+(27) Contingencies and Other Financial Obligations
+176 Notes
+175
+The trade payables and other operating liabilities reported
+include no liabilities attributable to exploration activities (2013:
+€8 million).
+of counterparty obligations to acquire additional shares in
+already consolidated subsidiaries, in the amount of €311 million
+(2013: €343 million), as well as non-controlling interests in
+fully consolidated partnerships with legal structures that give
+their shareholders a statutory right of withdrawal combined
+with a compensation claim, in the amount of €452 million
+(2013: €442 million).
+Other operating liabilities consist primarily of accruals in the
+amount of €9,661 million (2013: €11,637 million) and interest
+payable in the amount of €594 million (2013: €782 million).
+Also included in other operating liabilities are carryforwards
+As part of its business activities, E.ON is subject to contingen-
+cies and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees, obli-
+gations from litigation and claims (as discussed in more
+detail in Note 28), short- and long-term contractual, legal and
+other obligations and commitments.
+913
+accordingly. In the absence of an agreement on a pricing
+review, a neutral board of arbitration makes a final binding
+decision. Financial obligations arising from these contracts are
+calculated based on the same principles that govern internal
+budgeting. Furthermore, the take-or-pay conditions in the indi-
+vidual contracts are also considered in the calculations. The
+decrease compared with December 31, 2013, in contractual
+obligations for the purchase of fossil fuels, and gas procure-
+ment in particular, is primarily attributable to a reduction in the
+minimum purchase requirement and to an increase in contracts
+measured at fair value. The latter have already been accounted
+for at their market values.
+plants is generally based on the supplier's production cost plus
+477
+-67
+10,408
+obligations
+waste management
+2014
+Reversals estimates
+Dec. 31,
+in
+Reclassifi-
+cations
+Utiliza-
+tion
+Additions
+Accretion
+Changes
+scope of
+consoli-
+dation
+rate
+differ-
+ences
+Jan. 1,
+2014
+Changes in Miscellaneous Provisions
+€ in millions
+Non-contractual nuclear
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+45
+Strategy and Objectives
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+169
+Exchange
+Changes
+in
+Combined Group Management Report
+As of December 31, 2014, €4.0 billion in contractual obligations
+(€1.7 billion due within one year) are in place for the purchase
+of electricity; these relate in part to purchases from jointly
+operated power plants in the Generation and Renewables units.
+The purchase price of electricity from jointly operated power
+15
+-16
+a profit margin that is generally calculated on the basis of
+an agreed return on capital.
+Other purchase commitments as of December 31, 2014,
+amounted to approximately €4.0 billion (€0.5 billion due within
+one year). In addition to purchase commitments primarily
+for heat and alternative fuels, there are long-term contractual
+obligations in place at the Generation unit for the purchase
+of nuclear fuel elements and of services relating to the interim
+and final storage of nuclear fuel elements.
+Aside from the preceding, further financial obligations in place
+as of December 31, 2014, totaled approximately €3.3 billion
+(€1.1 billion due within one year). They include, among other
+things, financial obligations from services to be procured and
+obligations concerning the acquisition of real estate funds held
+as financial assets, as well as corporate actions.
+(28) Litigation and Claims
+A number of different court actions (including product liability
+claims, price adjustments and allegations of price fixing),
+governmental investigations and proceedings, and other claims
+are currently pending or may be instituted or asserted in
+the future against companies of the E.ON Group. This in partic-
+ular includes legal actions and proceedings on contract
+amendments and price adjustments initiated in response to
+market upheavals and the changed economic situation in
+the gas and electricity sectors (also as a consequence of the
+energy transition) concerning price increases, alleged price-
+fixing agreements and anticompetitive practices. Legal action
+is also pending in the nuclear power segment, centered on
+the new Repository Site Selection Act and the nuclear-power
+moratorium in Germany.
+The entire sector is involved in a multitude of court proceed-
+ings throughout Germany in the matter of price-adjustment
+clauses in the retail electricity and gas supply business with
+high-volume customers. These proceedings also include
+actions for the restitution of amounts collected through price
+increases imposed using price-adjustment clauses determined
+to be invalid. In a judgment delivered in October 2014, the
+European Court of Justice ruled that Germany's Basic Supply
+Ordinances for Power and Gas do not comply with the relevant
+European directives. The German Federal Court of Justice
+must now rule on the legal consequences of this violation
+for German law. That ruling is expected to be delivered in
+2015. Although no companies of the E.ON Group are directly
+1,559
+7,637
+26
+11,132
+374
+26
+16
+16
+-66
+4
+-334
+Contractual nuclear waste
+management obligations
+7,729
+-64
+351
+Personnel obligations
+-59
+1,518
+འ8
+59
+59
+-480
+96
+396
+-55
+GBP 900 million
+813
+98
+14,704
+1,118
+1,238
+2,669
+1,796
+3,206
+4,677
+December 31, 2013
+18,463
+3,166
+1,250
+1,650
+3,275
+1,486
+3,192
+4,444
+Financial Liabilities by Segment
+Commercial paper
+Bonds
+€ in millions
+2013
+2014
+2013
+December 31, 2014
+2014
+2014
+Global Commodities
+Renewables
+Generation
+Financial Liabilities by Segment as of December 31
+The following table breaks down the financial liabilities by
+segment:
+2013
+Bank loans/Liabilities to banks
+after 2025
+Due
+Oct 2037
+5.875%
+USD 1,000 million5
+30 years
+Apr 2038
+6.650%
+GBP 700 million
+30 years
+Jan 2039
+6.750%
+¹Listing: All bonds are listed in Luxembourg with the exception of the two Rule 144A/Regulation S USD bonds, which are unlisted.
+2After early redemption, the volume of this issue was lowered from originally EUR 1,250 million to approx. EUR 1,118 million.
+3After early redemption, the volume of this issue was lowered from originally EUR 1,500 million to approx. EUR 1,238 million.
+"After early redemption, the volume of this issue was lowered from originally EUR 2,375 million to approx. EUR 1,769 million.
+5Rule 144A/Regulation S bond.
+6The volume of this issue was raised from originally GBP 600 million to GBP 850 million.
+The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.
+8The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+Additionally outstanding as of December 31, 2014, were private
+placements with a total volume of approximately €0.9 billion
+(2013: €1.2 billion), as well as promissory notes with a total
+volume of approximately €0.6 billion (2013: €0.7 billion).
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 bil-
+lion allows E.ON SE and EIF (under the unconditional guaran-
+tee of E.ON SE) to issue from time to time commercial paper
+with maturities of up to two years less one day to investors.
+The U.S. commercial paper program in the amount of $10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to 366 days and extendible notes with
+original maturities of up to 397 days (and a subsequent exten-
+sion option for the investor) to investors. As of December 31,
+2014, €401 million (2013: €180 million) was outstanding under
+the euro commercial paper program. No commercial paper
+was outstanding under the U.S. commercial paper program,
+as in the previous year.
+€5 Billion Syndicated Revolving Credit Facility
+Effective November 6, 2013, E.ON arranged a syndicated
+revolving credit facility of €5 billion over an original term of
+five years, with two renewal options for one year each. In
+2014, E.ON exercised the first option and extended the term
+of the credit facility by one year through 2019. The facility
+has not been drawn on; rather, it serves as the Group's long-
+term liquidity reserve, one purpose of which is to function as
+a backup facility for the commercial paper programs.
+173
+2019 and
+Due
+in 2018
+Due
+in 2017
+in 2016
+Due
+Due
+in 2015
+2025
+in 2014
+€ in millions
+Due
+Due
+between
+Bonds Issued by E.ON SE, E.ON International Finance B.V. and E.ON Beteiligungen GmbH
+The bonds issued by E.ON SE and those issued by EIF and E.ON
+Beteiligungen GmbH (respectively guaranteed by E.ON SE)
+have the maturities presented in the table below. Liabilities
+denominated in foreign currency include the effects of eco-
+nomic hedges, and the amounts shown here may therefore
+vary from the amounts presented on the balance sheet.
+174 Notes
+Total
+98
+73
+84
+Other EU Countries
+Consolidation
+2013
+2014
+2013
+2014
+2013
+2014
+E.ON Group
+2013
+56
+14,280
+17,993
+14,280
+18,049
+401
+180
+1
+1
+188
+220
+787
+1,263
+Germany
+206
+194
+137
+90
+28
+180
+401
+937
+217
+Group Management/
+Combined Group Management Report
+1,434
+41
+159
+630
+411
+760
+1,019
+1,324
+584
+457
+42
+37
+Liabilities from finance leases
+80
+Other financial liabilities
+Financial liabilities
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+495
+616
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+2014
+2013
+710
+4
+Exploration & Production
+Capital expenditure grants of €381 million (2013: €451 million)
+were paid primarily by customers for capital expenditures
+made on their behalf, while the E.ON Group retains owner-
+ship of the assets. The grants are non-refundable and are
+recognized in other operating income over the period of the
+depreciable lives of the related assets.
+Trade payables totaled €2,185 million as of December 31, 2014
+(2013: €2,485 million).
+Trade Payables and Other Operating Liabilities
+Among other things, financial liabilities to financial institu-
+tions include collateral received, measured at a fair value of
+€142 million (2013: €196 million). This collateral relates to
+amounts pledged by banks to limit the utilization of credit lines
+in connection with the fair value measurement of derivative
+transactions. The other financial liabilities include promissory
+notes in the amount of €638 million (2013: €691 million) and
+financial guarantees totaling €11 million (2013: €30 million).
+Additionally included in this line item are margin deposits
+received in connection with forward transactions on futures
+exchanges in the amount of €153 million (2013: €7 million), as
+well as collateral received in connection with goods and ser-
+vices in the amount of €22 million (2013: €22 million). E.ON
+can use this collateral without restriction.
+625
+2014
+28
+10,975
+15,431
+639
+785
+Other operating liabilities
+18,159
+11,445
+AmC
+11,445
+Total liabilities
+50,935
+44,171
+47,334
+23,103
+5,593
+AmC
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts deter-
+mined using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair value and the fair values of the
+two hierarchy levels listed.
+The fair value of shareholdings in unlisted companies and
+of debt instruments that are not actively traded, such as
+loans received, loans granted and financial liabilities, is deter-
+mined by discounting future cash flows. Any necessary
+discounting takes place using current market interest rates
+over the remaining terms of the financial instruments. Fair
+value measurement was not applied in the case of share-
+holdings with a carrying amount of €49 million (2013: €19 mil-
+lion) as cash flows could not be determined reliably for them.
+Fair values could not be derived on the basis of comparable
+transactions. The shareholdings are not material by comparison
+with the overall position of the Group.
+185
+186 Notes
+The carrying amount of commercial paper, borrowings under
+revolving short-term credit facilities and trade payables is
+used as the fair value due to the short maturities of these items.
+The determination of the fair value of derivative financial
+instruments is discussed in Note 30.
+In the fourth quarter of 2014, there were no material reclassi-
+fications between Levels 1 and 2 of the fair value hierarchy. At
+the end of each reporting period, E.ON assesses whether there
+might be grounds for reclassification between hierarchy levels.
+The input parameters of Level 3 of the fair value hierarchy
+for equity investments are specified taking into account eco-
+nomic developments and available industry and corporate
+data (see also Note 1). In 2014, equity investments were
+reclassified into Level 3 in the amount of €67 million, and out
+of Level 3 into Level 2 in the amount of €30 million. The fair
+values determined using valuation techniques for financial
+instruments carried at fair value are reconciled as shown in
+the following table:
+Fair Value Hierarchy Level 3 Reconciliation (Values Determined Using Valuation Techniques)
+Gains/
+Losses in
+Transfers
+Purchases
+Sales
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+785
+785
+Put option liabilities under IAS 322
+AmC
+2,680
+341
+Trade payables and other operating liabilities
+28,211
+21,497
+21,497
+2,001
+4,626
+Trade payables
+2,485
+2,485
+AmC
+2,485
+Derivatives with no hedging relationships
+5,953
+5,953
+HFT
+5,953
+2,001
+3,797
+Derivatives with hedging relationships
+829
+829
+n/a
+829
+829
+income
+2,745
+Gains/
+Settle-
+0
+287
+66
+-30
+-324
+1,529
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following table:
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2014
+Conditional
+netting
+amount
+Financial
+collateral
+Gross amount
+-54
+Amount
+offset
+(netting
+received/
+agreements)
+pledged
+Net value
+€ in millions
+Financial assets
+Trade receivables
+11,800
+11,800
+4,300
+7,500
+Carrying
+amount
+30
+1,554
+Total
+€ in millions
+2014
+additions)
+disposals)
+ments
+state-
+ment
+into
+Level 3
+Equity investments
+1,424
+35
+-39
+67
+out of
+Level 3
+-30
+Losses in
+Dec. 31,
+OCI
+2014
+-324
+1,133
+Derivative financial
+instruments
+130
+-5
+-15
+287
+-1
+396
+Jan. 1, (including (including
+Other financial liabilities
+1,429
+n/a
+Timing of Reclassifications from OCI¹ to the Income Statement-2014
+Pursuant to the information available as of the balance sheet
+date, the following effects will accompany the reclassifications
+from accumulated other comprehensive income to the income
+statement in subsequent periods:
+The amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2014, produced a loss of
+€25 million (2013: €20 million gain).
+As of December 31, 2014, the hedged transactions in place
+included foreign currency cash flow hedges with maturities
+of up to 23 years (2013: up to 25 years) and interest cash
+flow hedges with maturities of up to twelve years (2013: up to
+one year). Hedged commodity transactions expired regularly
+in 2014; in 2013, commodity cash flow hedges had maturities
+of up to one year.
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash
+flow hedge accounting.
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps, cross-currency
+interest rate swaps, swaptions and interest rate options are
+the principal instruments used to limit interest rate and cur-
+rency risks. The purpose of these swaps is to maintain the level
+of payments arising from long-term interest-bearing receivables
+and liabilities and from capital investments denominated in
+foreign currency and euro by using cash flow hedge accounting
+in the functional currency of the respective E.ON company.
+Cash Flow Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges
+are generally reported in that line item of the income state-
+ment which also includes the respective hedged items.
+Fair Value Hedges
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+€ in millions
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group, as well as from anticipated
+fuel purchases and purchases and sales of gas, are hedged.
+Hedge accounting in accordance with IAS 39 is employed pri-
+marily for interest rate derivatives used to hedge long-term
+debts and bonds to be issued in the future, as well as for cur-
+rency derivatives used to hedge net investments in foreign
+operations, long-term receivables and debts denominated in
+foreign currency, as well as planned capital investments.
+The Company's policy generally permits the use of derivatives
+if they are associated with underlying assets or liabilities,
+planned transactions, or legally binding rights or obligations.
+Strategy and Objectives
+(30) Derivative Financial Instruments and Hedging
+Transactions
+Exploration activity resulted in operating cash flow of
+-€49 million (2013: -€71 million) and in cash flow from invest-
+ing activities of -€13 million (2012: -€95 million).
+In 2014, cash provided by financing activities of continuing
+operations totaled - €4.6 billion (2013: -€4.0 billion). The
+€1.9 billion increase in the net repayment of financial liabil-
+ities was partly offset by the lowering of the dividend payout
+by roughly €1.3 billion relative to the previous year.
+Cash provided by investing activities of continuing operations
+amounted to roughly -€3.3 billion (2013: -€0.6 billion). The
+substantial cash inflows-€6.5 billion- generated in the previ-
+ous year from the disposal of equity investments under the
+divestment program were not matched in 2014. These inflows
+were €4.3 billion (66 percent) lower than in 2013; they were
+primarily generated in the Renewables, Global Commodities,
+Germany and Czechia units, in the amount of €2.2 billion.
+Inflows from the disposal of intangible assets and of property,
+plant and equipment also fell, by €0.3 billion. This substantial
+decline in divestment cash flows was partly offset by a reduc-
+tion of €3.4 billion in investment spending, which in 2013
+had primarily reflected the acquisition and expansion of new
+activities in Turkey and Brazil. Accordingly, spending on intan-
+gible assets, on property, plant and equipment and on equity
+investments was approximately 42 percent lower in 2014
+than in 2013. Changes in securities, fixed-term deposits and
+restricted cash and cash equivalents produced a net outflow
+of cash €1.5 billion higher than in the previous year.
+At €6.3 billion, the E.ON Group's operating cash flow was at
+the prior-year level, as were cash earnings and working capital;
+the latter having benefited from the successful implementa-
+tion of the "Working Capital Excellence" project.
+The purchase prices paid for subsidiaries totaled €22 million
+in 2014 (2013: €50 million). The acquisitions included cash and
+cash equivalents in the amount of €1 million (2013: €6 million).
+E.ON Stock
+OCI-Currency cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Commodity cash flow hedges
+2014
+amount
+Expected gains/losses
+Carrying
+¹OCI Other comprehensive income. Figures are pre-tax.
+OCI-Commodity cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Currency cash flow hedges
+€ in millions
+Timing of Reclassifications from OCI¹ to the Income Statement-2013
+1
+-1
+-31
+-22
+-9
+-8
+70
+-1,072
+17
+24
+1,031
+>2019
+2017-2019
+Expected gains/losses
+2016
+2015
+Carrying
+amount
+1OCI Other comprehensive income. Figures are pre-tax.
+The total consideration received by E.ON in 2014 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €939 million (2013: €3,599 million). Cash and cash
+equivalents divested in connection with the disposals amounted
+to €27 million (2013: €612 million). The sale of these activities
+led to reductions of €1,625 million (2013: €7,165 million) in
+assets and €572 million (2013: €3,112 million) in provisions and
+liabilities.
+975
+623
+pension obligations through transfer of
+fixed-term deposits and securities
+13,777
+5,951
+22,724
+22,674
+25,837
+21,102
+967
+18,049
+18,049
+AmC
+20,761
+20,761
+Commercial paper
+180
+180
+AmC
+180
+180
+Bank loans/Liabilities to banks
+787
+787
+AmC
+787
+787
+Liabilities from finance leases
+913
+913
+42,281
+Interest-rate and currency derivatives
+42,039
+131
+Funding of external fund assets for
+activities
+Non-cash investing and financing
+€ in millions
+2013
+2014
+Supplemental Cash Flow Disclosures
+(29) Supplemental Cash Flow Disclosures
+180 Notes
+179
+Because litigation and claims are subject to numerous uncertain-
+ties, their outcome cannot be ascertained; however, in the opin-
+ion of management, any potential obligations arising from these
+matters will not have a material adverse effect on the financial
+condition, results of operations or cash flows of the Company.
+2011, E.ON filed a constitutional complaint against the thir-
+teenth amendment of the Nuclear Energy Act with the Federal
+Constitutional Court of Germany in Karlsruhe. The nuclear-fuel
+tax remains at its original level after the reversal of the oper-
+ating-life extensions. E.ON believes that this tax contravenes
+Germany's constitution and European law and is therefore
+pursuing administrative proceedings and taking legal action
+against it. This view was affirmed by both the Hamburg Fiscal
+Court and the Munich Fiscal Court. The legal issues involved
+have been presented to both the Federal Constitutional Court
+and the European Court of Justice.
+The reactor accident at Fukushima caused the political parties
+in Germany's coalition government to reverse their nuclear-
+energy policy. Having initially extended the operating lives of
+the country's nuclear power plants in the fall of 2010 as pro-
+vided for in the coalition agreement at the time, the German
+federal government then rescinded the extensions in the thir-
+teenth amended version of the Nuclear Energy Act, and added
+further restrictive provisions. However, E.ON contends that
+the nuclear phaseout as currently legislated is irreconcilable
+with constitutionally-protected property rights and the free-
+dom to choose an occupation and operate a business. Such an
+intervention would, in E.ON's view, be unconstitutional unless
+compensation is granted for the rights thus taken, and for the
+corresponding stranded assets. Accordingly, in mid-November
+Competition in the gas market and rising trading volumes at
+virtual trading points and on gas exchanges could result in
+considerable risks for gas quantities purchased under long-
+term take-or-pay contracts. In addition, given the extensive
+upheavals in the German wholesale markets for natural gas
+in the past years, substantial price risks have arisen between
+purchase and sales volumes. Long-term gas-procurement
+contracts generally include the option for producers and
+importers to adjust the terms in line with constantly changing
+market conditions. On this basis, E.ON Global Commodities
+continuously conducts intensive negotiations with producers.
+The possibility of further legal disputes cannot be excluded.
+involved in these particular preliminary-ruling proceedings, a
+finding that European law has been violated could still give
+rise to claims against Group companies for the restitution of
+amounts collected through such price increases. Furthermore,
+there are several court proceedings with major customers
+on contract amendments and price adjustments in long-term
+electricity and gas supply contracts in response to the altered
+situation brought about by market upheavals. In some of these
+cases, customers are challenging the validity not only of the
+price-adjustment clauses, but of the contracts in their entirety.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+1,031
+204
+Afs
+204
+73
+44,607
+1,447
+1,447
+143
+Cash
+outflows
+2016-2018
+2015
+2014
+Bonds
+€ in millions
+Cash
+outflows
+outflows
+Cash
+Cash Flow Analysis as of December 31, 2013
+13,974
+10,355
+16,718
+Cash
+outflows
+from 2019
+52,292
+543
+2,483
+14,538
+47,548
+Cash outflows for trade payables and other operating liabilities
+6
+14
+2
+10,516
+Other operating liabilities
+531
+108
+Cash outflows for liabilities within the scope of IFRS 7
+4,217
+2,079
+8,455
+3,810
+Trade payables
+14,716
+9,411
+2,606
+6,168
+Cash outflows for financial liabilities
+457
+1,213
+642
+326
+552
+1,720
+262
+160
+108
+64
+52
+41
+654
+180
+Financial guarantees
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Commercial paper
+11,719
+108
+17
+Put option liabilities under IAS 32
+6
+2016
+2015
+Financial guarantees
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Cash
+outflows
+Cash
+outflows
+Cash Flow Analysis as of December 31, 2014
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities
+included in the scope of IFRS 7:
+188 Notes
+187
+The netting agreements are derived from netting clauses
+contained in master agreements including those of the Inter-
+national Swaps and Derivatives Association (ISDA) and the
+European Federation of Energy Traders (EFET), as well as the
+German Master Agreement for Financial Derivatives Trans-
+actions ("DRV") and the Financial Energy Master Agreement
+("FEMA"). For currency and interest rate derivatives in the
+financial sector, this netting option, if allowed, is reflected in
+the accounting treatment and illustrated in the table above.
+Collateral pledged to and received from financial institutions
+in relation to these liabilities and assets limits the utilization
+of credit lines in the fair value measurement of interest-rate
+and currency derivatives, and is also shown in the table. For
+commodity derivatives in the energy trading business, the
+netting option is not presented in the accounting because the
+legal enforceability of netting agreements varies by country.
+Transactions and business relationships resulting in the
+derivative financial receivables and liabilities presented are
+generally concluded on the basis of standard contracts that
+permit the netting of open transactions in the event that a
+counterparty becomes insolvent.
+The netting agreements as of December 31, 2013, included a
+netted amount of €1,218 million, which must now be pre-
+sented gross in line with the first-time application of IAS 32
+as amended (see Note 2).
+18,786
+571
+5,584
+24,941
+1,218
+26,159
+Total
+14,495
+3,664
+Cash
+outflows
+2017-2019
+Derivatives (with/without hedging relationships)
+Cash
+outflows
+from 2020
+1,943
+2,361
+14,428
+34,774
+Derivatives (with/without hedging relationships)
+2,241
+Trade payables
+13,431
+7,872
+2,180
+4,744
+Cash outflows for financial liabilities
+87
+1,112
+473
+42
+1,001
+1,341
+228
+162
+100
+52
+79
+33
+1,120
+401
+10,926
+7,092
+2,035
+2015
+22,177
+1,424
+29,470
+0
+29,470
+4,195
+1,309
+23,966
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2013
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Total
+Consolidated Financial Statements
+Conditional
+netting
+amount
+Financial
+collateral
+Amount
+Carrying
+(netting
+received/
+Gross amount
+offset
+amount
+agreements)
+pledged
+Supervisory Board and Board of Management
+Tables and Explanations
+15,694
+15,694
+15,694
+1,304
+Commodity derivatives
+12,269
+12,269
+4,205
+121
+7,943
+Total
+25,516
+0
+25,516
+8,505
+264
+16,747
+Financial liabilities
+Interest-rate and currency derivatives
+2,375
+2,375
+981
+1,394
+Commodity derivatives
+11,401
+11,401
+4,195
+328
+6,878
+Other operating liabilities
+Net value
+€ in millions
+Financial assets
+Trade receivables
+6,657
+6,657
+1,920
+468
+4,269
+Other operating liabilities
+18,159
+18,159
+639
+7,556
+43,672
+Cash outflows for liabilities within the scope of IFRS 7
+715
+1,564
+4,950
+37,504
+Cash outflows for trade payables and other operating liabilities
+153
+5
+15
+11,445
+Other operating liabilities
+562
+135
+16
+72
+Put option liabilities under IAS 32
+Commodity derivatives
+4,919
+22
+125
+Interest-rate and currency derivatives
+Commodity derivatives
+Total
+14,257
+14,257
+3,664
+10,593
+1,859
+1,218
+641
+196
+445
+6,058
+6,058
+1,920
+7
+4,131
+22,174
+1,218
+20,956
+5,584
+203
+15,169
+Financial liabilities
+Interest-rate and currency derivatives
+1,343
+1,218
+103
+2016-2018
+2,795
+328
+3,179.1
+49.1
+2,462.8
+260.5
+9,671.0
+175.9
+15,408.3
+1,064
+172.9
+45,407.3
+519.1
+50,440.2
+Electricity swaps
+12.5
+Exchange-traded electricity forwards
+Fair value
+December 31, 2013
+Nominal
+value
+Fair value
+value
+€ in millions
+Nominal
+December 31, 2014
+-471.2
+Total Volume of Electricity, Gas, Coal, Oil and Emissions-Related Derivatives
+36,223.6
+-930.5
+30,426.1
+Total
+Electricity forwards
+Electricity options
+Gas forwards
+Exchange-traded gas forwards
+-78.2
+2,646.6
+1.8
+1,807.0
+-1.4
+15.9
+19.0
+68.3
+0.9
+1,077.3
+15.0
+5,888.7
+-5.0
+3,213.1
+72.2
+9,723.6
+328.3
+22,879.6
+282.4
+37,619.7
+2.7
+55.7
+-27.8
+256.1
+Oil derivatives
+Exchange-traded coal forwards
+Coal forwards and swaps
+Gas options
+Gas swaps
+Subtotal
+0.0
+9.1
+9.8
+1,664
+14,280
+14,280
+AmC
+17,997
+17,997
+401
+401
+AmC
+401
+401
+Bank loans/Liabilities to banks
+1,263
+1,263
+AmC
+1,263
+1,263
+Liabilities from finance leases
+813
+813
+n/a
+1,296
+Other financial liabilities
+2,910
+2,465
+AmC
+2,256
+827
+Trade payables and other operating liabilities
+18,824
+12,004.3
+23,213
+19,667
+208.0
+9.1
+9.8
+208.0
+Other derivatives
+-225.0
+4,776.3
+-880.7
+4,893.0
+Subtotal
+-29.8
+2,000.0
+-322.5
+2,000.0
+1,064
+Afs
+1,064
+1,064
+5,770
+125
+Afs
+125
+21
+104
+51,358
+43,269
+43,562
+16,365
+8,965
+19,222
+-296.4
+10,849.0
+-172.5
+13,346
+13,346
+Derivatives with no hedging relationships
+11,800
+LaR
+11,800
+11,800
+Trade receivables
+7,115
+6,157
+26,984
+26,984
+28,258
+Trade receivables and other operating assets
+3,387
+LaR
+3,094
+4,264
+Other financial receivables and financial assets
+546
+99
+645
+n/a
+645
+645
+546
+99
+4,032
+3,739
+HFT
+4,909
+13,346
+6,745
+3,191
+Afs
+3,191
+3,191
+832
+5,761
+6,593
+Afs
+6,593
+6,593
+1,468
+LaR
+1,468
+2,742
+370
+370
+n/a
+370
+370
+Commercial paper
+Bonds
+Financial liabilities
+Total assets
+Assets held for sale
+Restricted cash
+Cash and cash equivalents
+Securities and fixed-term deposits
+Other operating assets
+Derivatives with hedging relationships
+6,157
+>2018
+Financial receivables and other financial assets
+Receivables from finance leases
+120
+150,772.6
+Total
+-6.2
+58.3
+18.2
+103.9
+Other exchange-traded derivatives
+2.4
+42.5
+-2.8
+38.8
+Other derivatives
+-157.5
+1,128.5
+84.7
+808.0
+Exchange-traded emissions-related derivatives
+-5.5
+4.5
+Emissions-related derivatives
+-13.7
+15,969.2
+31.4
+4,711.2
+Exchange-traded oil derivatives
+53.4
+8,571.0
+-72.1
+9,431.7
+869.7
+320
+124,768.6
+183
+1,573
+Afs
+1,573
+1,573
+Equity investments
+prices
+ket prices
+Fair value
+category1
+IFRS 7
+amounts
+€ in millions
+market
+using mar-
+ment
+scope of
+Carrying
+from active
+Derived
+Determined
+measure-
+within the
+IAS 39
+ing amounts
+Total carry-
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2014
+The carrying amounts of the financial instruments, their
+grouping into IAS 39 measurement categories, their fair values
+and their measurement sources by class are presented in the
+following table:
+(31) Additional Disclosures on Financial
+Instruments
+184 Notes
+393.6
+3,143
+48
+1,878
+725
+Receivables from finance leases
+204
+106
+5,308
+5,066
+5,204
+Financial receivables and other financial assets
+422
+120
+1,966
+725
+Afs
+1,966
+Equity investments
+prices
+ket prices
+Fair value
+category¹
+IFRS 7
+amounts
+€ in millions
+market
+Derived
+from active
+1,966
+n/a
+725
+106
+Other operating assets
+Derivatives with hedging relationships
+4,078
+6,241
+HFT
+6,241
+6,241
+Derivatives with no hedging relationships
+14,257
+LaR
+14,257
+14,257
+Trade receivables
+4,536
+1,878
+22,545
+22,545
+24,148
+Trade receivables and other operating assets
+4,583
+LaR
+4,341
+4,479
+Other financial receivables and financial assets
+204
+Determined
+using mar-
+Cash and cash equivalents
+measure-
+ment
+Carrying
+Put option liabilities under IAS 32²
+1,444
+1,444
+n/a
+1,444
+1,444
+Derivatives with hedging relationships
+6,097
+6,187
+12,332
+HFT
+764
+12,332
+Derivatives with no hedging relationships
+2,185
+AmC
+2,185
+2,185
+Trade payables
+7,541
+6,187
+27,151
+27,151
+32,419
+12,332
+764
+AmC
+764
+IAS 39
+Total carry-
+ing amounts
+within the
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2013
+Where the value of a financial instrument can be derived from
+an active market without the need for an adjustment, that
+value is used as the fair value. This applies in particular to
+equities held and to bonds held and issued.
+The carrying amounts of cash and cash equivalents and of
+trade receivables are considered reasonable estimates of their
+fair values because of their short maturity.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts deter-
+mined using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair value and the fair values of the
+two hierarchy levels listed.
+9,205
+25,011
+50,364
+46,373
+52,086
+Total liabilities
+10,426
+AmC
+10,426
+15,694
+Other operating liabilities
+scope of
+Restricted cash
+Securities and fixed-term deposits
+Total assets
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Total Volume of Foreign Currency, Interest Rate and Equity-Based Derivatives
+December 31, 2014
+December 31, 2013
+Nominal
+Nominal
+€ in millions
+FX forward transactions
+Subtotal
+value
+Fair value
+value
+Fair value
+17,113.9
+42.9
+21,548.5
+-67.4
+17,113.9
+42.9
+21,548.5
+-67.4
+Report of the Supervisory Board
+Assets held for sale
+CEO Letter
+At the beginning of 2014, a loss of €42 million from the initial
+measurement of derivatives was deferred. After realization of
+€6 million in gains, the remainder is a deferred loss of €48 mil-
+lion at year-end, which will be recognized in income during
+subsequent periods as the contracts are settled.
+20
+31
+-379
+61
+-12
+-6
+-7
+-15
+-33
+12
+Gains and losses from reclassification are generally reported in
+that line item of the income statement which also includes
+the respective hedged transaction. Gains and losses from the
+ineffective portions of cash flow hedges are classified as
+other operating income or other operating expenses. Interest
+cash flow hedges are reported under "Interest and similar
+expenses." The fair values of the designated derivatives in cash
+flow hedges totaled -€974 million (2013: -€546 million).
+A loss of €55 million (2013: €124 million gain) was posted to
+other comprehensive income in 2014. In the same period,
+a loss of €663 million (2013: €12 million loss) was reclassified
+from OCI to the income statement.
+181
+182 Notes
+Net Investment Hedges
+The Company uses foreign currency loans, foreign currency
+forwards and foreign currency swaps to protect the value of
+its net investments in its foreign operations denominated
+in foreign currency. For the year ended December 31, 2014, the
+Company recorded an amount of €269 million (2013: -€23 mil-
+lion) in accumulated other comprehensive income due to
+changes in fair value of derivatives and to currency translation
+results of non-derivative hedging instruments. As in 2013, no
+ineffectiveness resulted from net investment hedges in 2014.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive
+to movements in underlying market rates and other relevant
+variables. The Company assesses and monitors the fair value
+of derivative instruments on a periodic basis. The fair value
+to be determined for each derivative instrument is the price
+that would be received to sell an asset or paid to transfer a
+liability in an orderly transaction between market participants
+on the measurement date (exit price). E.ON also takes into
+account the counterparty credit risk when determining fair
+value (credit value adjustment). The fair values of derivative
+instruments are calculated using common market valuation
+methods with reference to available market data on the
+measurement date.
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments
+in the Consolidated Financial Statements.
+•
+Currency, electricity, gas, oil and coal forward contracts,
+swaps, and emissions-related derivatives are valued sep-
+arately at their forward rates and prices as of the balance
+sheet date. Whenever possible, forward rates and prices
+are based on market quotations, with any applicable for-
+ward premiums and discounts taken into consideration.
+Market prices for interest rate, electricity and gas options
+are valued using standard option pricing models com-
+monly used in the market. The fair values of caps, floors
+and collars are determined on the basis of quoted market
+prices or on calculations based on option pricing models.
+The fair values of existing instruments to hedge interest
+risk are determined by discounting future cash flows using
+market interest rates over the remaining term of the
+instrument. Discounted cash values are determined for
+interest rate, cross-currency and cross-currency interest
+rate swaps for each individual transaction as of the bal-
+ance sheet date. Interest income is recognized in income
+at the date of payment or accrual.
+Equity forwards are valued on the basis of the stock prices
+of the underlying equities, taking into consideration any
+timing components.
+Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective
+clearing houses. Paid initial margins are disclosed under
+other assets. Variation margins received or paid during
+the term of such contracts are stated under other liabilities
+or other assets, respectively.
+Certain long-term energy contracts are valued with the
+aid of valuation models that use internal data if market
+prices are not available. A hypothetical 10-percent increase
+or decrease in these internal valuation parameters as of
+the balance sheet date would lead to a theoretical
+decrease in market values of €60 million or an increase
+of €63 million, respectively.
+The following two tables include both derivatives that qualify
+for IAS 39 hedge accounting treatment and those for which
+it is not used:
+8,175.7
+Cross-currency swaps
+9,854.2
+-134.6
+34
+4,493
+4,527
+Afs
+4,527
+4,527
+624
+6,468
+7,092
+Afs
+639
+7,092
+1,589
+LaR
+1,589
+3,192
+458
+458
+n/a
+458
+458
+Bonds
+Financial liabilities
+7,092
+Afs
+639
+500.0
+-211.4
+Cross-currency interest rate swaps
+35.5
+32.1
+35.5
+32.6
+Subtotal
+8,211.2
+-102.5
+40.6
+-178.8
+Interest rate swaps
+9,889.7
+-558.2
+49.3
+500.0
+Interest rate options
+2,893.0
+-235.8
+Fixed-rate receiver
+-607.5
+2,393.0
+Fixed-rate payer
+-195.2
+2,776.3
+2,276.3
+18
+Through a subsidiary called E.ON International Energy, we
+work with local partners to operate renewable and conven-
+tional generating capacity and distribution network and
+sales businesses outside Europe. We report our power gener-
+ation business in Russia and our activities in Brazil and Tur-
+key under Non-EU Countries.
+Corporate Profile
+In addition, we intend to selectively expand our distributed-
+energy business. The E.ON Connecting Energies business unit
+focuses on providing customers with comprehensive distrib-
+uted-energy solutions. We report this unit under Other EU
+Countries.
+Russia is a special-focus country, where our business centers
+on power generation. This business is not integrated into the
+Generation global unit because of its geographic location
+and because Russia's power system is not part of Europe's
+integrated grid.
+Management System
+E.ON Stock
+Our key figures for managing our operating business and
+assessing our financial situation are EBITDA, underlying net
+income, cash-effective investments, and debt factor.
+Our key figure for purposes of internal management control
+and as an indicator of our business units' long-term earnings
+power is earnings before interest, taxes, depreciation, and
+amortization ("EBITDA"), which we adjust to exclude certain
+extraordinary items. These items include net book gains,
+restructuring expenditures, impairment charges, and non-
+operating earnings (which include, among other items, the
+marking to market of derivatives). Consequently, EBITDA is
+unaffected by investment and depreciation cycles and also
+provides an indication of our cash-effective earnings (see the
+commentary on pages 35 to 38 of the Combined Group Man-
+agement Report and in Note 33 of the Consolidated Financial
+Statements).
+E.ON presents its financial condition using, among other key
+figures, debt factor. A key objective of our finance strategy is
+for E.ON to have an efficient capital structure. Our debt factor
+is equal to our economic net debt divided by our EBITDA (for
+more information, see the section entitled Finance Strategy
+on page 41). We actively manage our capital structure. If our
+debt factor is significantly above our target, we need to main-
+tain strict investment discipline. We might also take additional
+countermeasures.
+Alongside our main financial management key figures, this
+Combined Group Management Report includes other financial
+and non-financial key performance indicators ("KPIs") to high-
+light aspects of our business performance and our sustainability
+performance vis-à-vis all our stakeholders: our employees,
+customers, shareholders, bond investors, and the countries in
+which we operate. Operating cash flow, return on average
+capital employed ("ROACE"), and value added are examples of
+our other financial KPIs. Among the KPIs of our sustainability
+performance are our carbon emissions, carbon intensity, and
+TRIF (which measures work-related injuries and illnesses).
+The sections entitled Corporate Sustainability and Employees
+contain explanatory information about these KPIs. However,
+these KPIs are not the focus of the ongoing management of
+our businesses.
+17
+Our corporate strategy aims to deliver sustainable growth in
+shareholder value. We have put in place a Group-wide planning
+and controlling system to assist us in planning and managing
+E.ON as a whole and our individual businesses with an eye to
+increasing their value. This system ensures that our financial
+resources are allocated efficiently. We strive to enhance our
+sustainability performance efficiently and effectively as well.
+We have high expectations for our sustainability performance.
+We embed these expectations progressively more deeply into
+our organization-across all of our businesses, entities, and pro-
+cesses and along the entire value chain-by means of binding
+company policies and minimum standards.
+Strategy and Objectives
+We operate in the following regions: Germany, the United
+Kingdom, Sweden, France, Benelux, Hungary, Czechia, Slovakia,
+and Romania.
+Regional Units
+Strategy and Objectives
+Our Strategy: "Empowering customers. Shaping
+markets."
+At the end of 2014 E.ON adopted a new strategy called
+"Empowering customers. Shaping markets." It represents E.ON's
+systematic response to the far-reaching changes in energy
+markets. By seizing the initiative, E.ON can-for the benefit
+of our customers, employees, business partners, shareholders,
+and society in general-take advantage of the significant
+opportunities created by the emergence of new energy worlds.
+Two Energy Worlds, Each with a Variety of
+Opportunities
+Renewables like wind and solar have achieved a cost level that
+is competitive relative to that of conventional generation
+technologies. In conjunction with batteries and other energy
+storage systems, renewables represent a viable alternative
+energy supply for more and more customers. At the same time,
+customers' expectations and roles are evolving in substantial
+ways. Customers no longer see themselves exclusively as the
+recipients of power, gas, and heat service. They are taking
+greater interest in the source and sustainability of their energy
+supply. And many are already active as self-generators and
+energy-efficiency managers. Alongside changing customer
+needs, policy and regulatory decisions of recent years have
+also placed an increasing emphasis on renewables, distributed
+generation, and energy efficiency. As a result of these devel-
+opments, the traditional energy value chain is fragmenting
+into an increasing number of discrete market segments. This
+creates opportunities for new specialized market entrants
+and makes competition even keener. The new energy world-
+encompassing sustainable solutions, autonomous and pro-
+active customers, renewables, distributed energy, energy effi-
+ciency, and local energy systems-offers considerable growth
+potential. It will experience more dynamic growth and will play
+an increasingly significant role in many countries. Neverthe-
+less, the conventional energy world will continue to exist and
+to offer well-positioned companies attractive opportunities.
+For example, because conventional generating capacity will
+remain indispensible for ensuring a reliable power supply,
+European markets will need to establish mechanisms that pro-
+vide appropriate compensation for maintaining this capacity.
+Companies capable of actively shaping the inevitable consoli-
+dation of Europe's generation market will be able to strengthen
+their market position and gain clear competitive advantages.
+Globally, energy demand continues to rise, creating opportu-
+nities for energy trading and possibly fueling a recovery of
+wholesale energy prices. Both energy worlds offer abundant
+market and growth opportunities. But they differ considerably
+in terms of value drivers, processes, risks, capital costs, inves-
+tor expectations, and success factors.
+Two Specialized Companies, Each Starting from
+a Very Good Position
+In response to a fundamentally altered market environment,
+we intend to divide E.ON into two distinctly focused and
+financially strong publicly listed companies. The future E.ON
+will focus on the new energy world and become an energy-
+solutions provider. We intend to transfer our conventional
+upstream and midstream businesses to a New Company, which
+will focus on the conventional energy world. Initially, E.ON
+will retain a minority stake in the New Company.
+We are convinced that separating in two smaller, more dynamic
+companies will strengthen the competitive position of all
+current E.ON businesses. Both companies will be able to take
+a more focused approach to managing their businesses, which
+will pave the way to greater profitability and more dynamic
+growth and create attractive opportunities for employees and
+external stakeholders. They will be better able to differentiate
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+12
+Strategy and Objectives
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+their business operations according to customers, technologies,
+risks, and markets and to take a more focused approach to
+developing the necessary capabilities and processes. Each of
+the two companies will be able to develop a consistent corpo-
+rate culture and establish a clear brand positioning. In addition,
+we expect that both companies will have more specific capital
+costs and an adequate valuation and thus improved access
+to capital markets.
+The Future E.ON's Strategy
+The future E.ON's strategy is a response to three fundamental
+market trends and corresponding growth businesses: the
+global demand for renewables (particularly wind and solar),
+the evolution of distribution networks into a platform for
+distributed-energy solutions, and customers' changing needs.
+The future E.ON will aim to add value in all of these businesses
+by delivering an outstanding performance in key areas such
+as continual innovation, an unambiguous commitment to
+sustainability, and a strong brand. It will also deepen its rela-
+tionships with customers, business partners, and other key
+stakeholders.
+Objectives and Core Businesses
+E.ON aims to become the partner of choice for energy and cus-
+tomer solutions. It intends to deliver on this commitment by
+meeting ambitious targets for sustainability, customer loyalty,
+and innovative solutions. E.ON's clear focus on three strong
+core businesses will enable it to offer energy solutions on the
+generation and demand side:
+Renewables: E.ON has a growing international renewables
+business in attractive target regions (Europe, the United
+States, other markets) based on customer-relevant tech-
+nologies (onshore and offshore wind, PV) for network
+companies, energy suppliers, large customers, and whole-
+sale markets. E.ON's industry-leading capabilities in
+project development and execution and in operational
+excellence already give it a tangible competitive advantage
+in this business.
+Energy networks: Energy networks link our customers
+together and are the hub for grid digitalization. E.ON is
+developing smart solutions that make customers' daily
+lives simpler and more convenient. A large majority of
+renewable-source electricity is fed into the distribution
+network. In Germany, one third of distributed generating
+capacity subsidized by the Renewable Energy Law is
+connected to our networks. Distribution networks are
+what makes the transformation of the energy system
+possible. E.ON is already a leader in network efficiency
+and will continue to set new standards in the future.
+Customer solutions: E.ON will develop superior offerings
+for the physical and digital new energy world and market
+them to municipal, public, commercial, and residential
+customers. We aim to become customers' partner of choice
+by delivering high-quality service and by continually
+improving or redefining our portfolio of products and ser-
+vices in response to customers' demand for energy effi-
+ciency and distributed generation.
+Although each of these core businesses is independent and
+has its own business logic, combining them in a single com-
+pany offers significant advantages. It will enable E.ON to
+acquire and leverage a comprehensive understanding of the
+transformation of the energy system and the interplay
+13
+Combined Group Management Report
+14
+11
+eon.com/investors
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Shareholder Structure
+Our most recent survey shows that we have roughly 76 percent
+institutional investors and 24 percent retail investors. Investors
+in Germany hold about 36 percent of our stock, those outside
+Germany about 64 percent.
+Shareholder Structure by Group¹
+Retail
+Combined Group Management Report
+Institutional
+investors 76%
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2014).
+Shareholder Structure by Country/Region¹
+You can contact us at:
+investorrelations@eon.com
+Rest of world 7%
+France 10%
+36% Germany
+Investor Relations
+Our investor relations continue to be founded on four princi-
+ples: openness, continuity, credibility, and equal treatment
+of all investors. Our mission is to provide prompt, precise, and
+relevant information at our periodic conferences, at road shows,
+at eon.com, and when we meet personally with investors.
+Overall, we therefore further expanded the dialog with our
+analysts and investors in 2014. Continually communicating
+with them and strengthening our relationships with them
+are essential for good investor relations.
+We used the forum of E.ON's quarterly reporting to provide
+the greatest-possible transparency on the developments at
+our business units. We also held special information events
+focusing on specific businesses. In January senior managers
+from Sweden and Germany provided the capital market with
+detailed information about our distribution network business.
+In March several members of the E.ON Board of Management
+gave presentations and answered investors' and analysts'
+questions about operational, strategic, and policy developments
+at a number of our businesses.
+In December we held a teleconference and a number of road
+shows to present E.ON's new corporate strategy to analysts
+and investors. The response has generally been very positive,
+suggesting that our new strategy is seen as the right response
+to the changing energy landscape.
+United Kingdom 16%
+Rest of Europe 9%.
+USA and Canada 19%
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2014).
+Want to find out more?
+Switzerland 3%
+Strategy and Objectives
+between the individual submarkets in regional and local energy
+supply systems. These businesses will be able to work together
+to design customer-oriented offerings and package solutions
+for the new energy world (such as sustainable solutions for
+cities), to conduct stakeholder management, and to position
+the brand more effectively.
+Resources and Capabilities
+The section of the Combined Group Management Report
+entitled Employees contains explanatory information about
+our people strategy.
+15
+16
+Combined Group Management Report
+→ EBITDA and underlying net income in line with expectations
+→ Operating cash flow at prior-year level
+→ Management to propose dividend of €0.50 per share
+→ 2015 EBITDA expected to be between €7 and €7.6 billion
+Regional Units
+Global
+Units
+Group
+Manage-
+ment
+People Strategy
+Regional Units
+Regional Units
+Regional Units
+Support Functions
+Corporate Profile in 2014
+Business Model
+E.ON is a major investor-owned energy company. Our organi-
+zational setup clearly delineates the roles and responsibilities
+of all Group companies. Our operations are segmented into
+global units and regional units.
+E.ON SE in Düsseldorf serves as Group Management. It over-
+sees and coordinates the operations of the entire Group.
+We see ourselves as a global specialized provider of energy
+solutions. Four global units are responsible for Generation,
+Renewables, Global Commodities, and Exploration & Production.
+Nine regional units manage our operating business in Europe.
+Russia is another unit, and we also have operations in Brazil
+and Turkey. Support functions like IT, procurement, and busi-
+ness processes are organized functionally.
+Group Management
+The main task of Group Management in Düsseldorf is to
+lead the entire E.ON Group by overseeing and coordinating
+its operating business. This includes charting E.ON's strategic
+course, defining its financial policy and initiatives, managing
+business issues that transcend individual markets, managing
+risk, continually optimizing E.ON's business portfolio, and
+conducting stakeholder management.
+IT, procurement, human resources, insurance, consulting,
+and business processes provide valuable support for our core
+businesses wherever we operate around the world. These
+entities and/or departments are organized by function so
+that we pool professional expertise across our organization
+and leverage synergies.
+CEO Letter
+Report of the Supervisory Board
+Global Units
+The section of the Combined Group Management Report
+entitled Financial Situation contains explanatory information
+about our finance strategy.
+Finance Strategy
+We expect to put the future setup in place in 2015 and 2016 in
+two phases. The groundwork for the transaction will be laid
+in 2015 through legal restructuring, the selection of the two
+companies' leadership teams, financial and operational prep-
+arations, and consultations with employee representatives
+and other key stakeholders. We expect that the Shareholders
+Meeting will decide on the spinoff in 2016. Shareholders,
+employees, and other stakeholders will receive timely informa-
+tion about important milestones in the transformation process.
+M&A processes currently under way will continue during
+the transformation. In addition, we are conducting a strategic
+review of our E&P business in the North Sea.
+A focused setup and systematic approach will enable E.ON to
+retain its existing strengths and advantages and build on
+them. Examples include our success story at developing and
+building an international renewables portfolio consisting of
+4.5 GW of operational capacity and an attractive development
+pipeline, our outstanding record of managing a total of roughly
+1 million kilometers of distribution networks, and our direct
+access to 33 million customers in key European markets and
+in Turkey.
+Alongside its existing capabilities and resources, E.ON will
+develop and refine the necessary expertise for the key success
+factors in its businesses. In particular, it will cultivate a strong
+customer orientation, develop and implement new down-
+stream business models and products, and leverage the digi-
+tal transformation. The successful implementation of the
+future strategy will also depend on partnerships with pro-
+viders of technology and business models.
+Significance for Employees and Stakeholders
+The future E.ON will offer attractive opportunities to current
+and future employees by creating jobs and career opportuni-
+ties in growth markets and by setting clear objectives. It will
+offer investors attractive dividends with good growth pros-
+pects, highly predictable earnings, and a solid balance sheet.
+The New Company's Strategy
+The conventional energy world is based on proven, centralized,
+commodity-oriented technologies that ensure supply security,
+on cost competition, and on global trading. Value is created
+through the strategic positioning of generation assets, through
+a technology and fuel strategy that delivers cost leadership,
+through superior capabilities in operations, engineering, opti-
+mization, and trading, and through efficient capital allocation.
+Spinning off the current E.ON's conventional upstream and
+midstream businesses into a new, independent company
+will enable these businesses to realize their full potential.
+The New Company has proven strengths and a team of
+highly qualified employees. It will be able to leverage existing,
+proven synergies between generation, trading, and the mid-
+stream gas business and serve as a unique platform for the
+consolidation of Europe's generation market. It will ensure
+the safe decommissioning of nuclear power stations and pro-
+vide competitive services to third parties.
+Objectives and Core Businesses
+The New Company's main strategic objective is to success-
+fully position itself in the changing conventional energy
+world and to help shape this change:
+Conventional power generation: The New Company will
+be a leading owner and operator of conventional power
+plants that make an important contribution to supply
+security in Europe, Russia, and elsewhere. It will have
+proven capabilities and serve as a unique platform for
+the consolidation of Europe's generation market.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Global energy trading: This business will conduct optimi-
+zation and risk management for the New Company's
+assets and serve as a global coal, freight, and LNG trading
+platform. It also has long-term gas procurement contracts
+and a gas trading business.
+Exploration and production: The New Company has
+valuable stakes in oil and gas fields. We are conducting
+a strategic review of our E&P business in the North Sea.
+Resources and Capabilities
+Current changes in Europe's generation market are creating
+opportunities to help shape the market's future and benefit
+from the transformation. The New Company is well positioned
+to make a very important contribution to supply security and
+to drive the consolidation process:
+Geographic presence: positions in key European generation
+markets and in Russia
+Technological breadth: operations and experience across
+all relevant technologies
+Market access: proven trading and optimization platform
+in the main EU trading centers and global commodity
+markets as well as a significant position in the midstream
+gas business
+Capabilities: demonstrated skills in operating and man-
+aging generation assets and coordinating generation fleets
+System knowledge and experience with regulators: deep
+knowledge of regulatory regimes and market designs in
+Europe.
+Significance for Employees and Stakeholders
+The New Company will aim to be a cost and capability leader,
+to shape the transformation of Europe's conventional genera-
+tion market, and to be attractive to its customers and investors.
+From today's perspective, its solid financing ought to ensure
+that it has an investment-grade rating. Its positive cash flow
+ought to enable it to pay attractive dividends. The New Com-
+pany will be attractive to employees because it will offer jobs
+and career opportunities in a company that will lead the
+restructuring of its markets.
+Transformation Process
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Düsseldorf, March 10, 2015
+The Supervisory Board
+Best wishes,
+И. Сенім
+Werner Wenning
+Chairman
+міну
+9
+Consolidated Financial Statements
+10
+E.ON Stock
+E.ON Stock in 2014
+At the end of 2014 E.ON stock (including reinvested dividends)
+was 10 percent above its year-end closing price for 2013,
+E.ON Stock Performance (Factoring in Reinvested Dividends)
+Percentages
+The Supervisory Board wishes to thank the Board of Manage-
+ment, the Works Councils, and all the employees of the E.ON
+Group for their dedication and hard work in the 2014 financial
+year.
+thereby underperforming the STOXX Utilities (+18 percent over
+the same time period) but outperforming the EURO STOXX 50
+index (+4 percent).
+EURO STOXX¹
+STOXX Utilities¹
+120
+110
+100
+12/31/13 1/31/14 2/28/14 3/31/14 4/30/14 5/30/14 6/30/14 7/31/14 8/29/14 9/30/14 10/31/14 11/28/14 12/31/14
+¹Based on the performance index.
+E.ON Stock Key Figures
+Per share (€)
+2014
+2013
+Net income attributable to the
+shareholders of E.ON SE
+- E.ON
+In addition, Klaus-Dieter Raschke, long-serving member of
+the E.ON SE Supervisory Board, stepped down effective
+December 31, 2014. We would like to thank Mr. Raschke, who
+had been a member of the E.ON SE Supervisory Board since
+2002, for his many years of outstanding work on the Super-
+visory Board and its committees and wish him all the best for
+the future. He was exemplary in his tireless efforts to align
+the interests of the Company and its employees. Mr. Raschke's
+successor on the Supervisory Board is Thies Hansen. Fred
+Schulz was elected to succeed Mr. Raschke on the Audit and
+Risk Committee. Due to Mr. Raschke's departure, the members
+of the Audit and Risk Committee elected Eberhard Schomburg
+to serve as Deputy Chairman of the committee effective Jan-
+uary 1, 2015. Mr. Schulz stepped down from the Finance and
+Investment Committee; the Supervisory Board elected Thies
+Hansen to succeed him effective January 1, 2015. In March 2014
+this committee had elected Mr. Schulz to serve as its Deputy
+Chairman; Mr. Hansen succeeded him in this position as well.
+Willem Vis ended his service on the E.ON SE Supervisory Board
+on June 30, 2014. We would like to thank Mr. Vis for his stead-
+fast dedication to the interests of the Company as well as its
+employees and wish him all the best for the future. Mr. Vis's
+successor is Clive Broutta. The Supervisory Board elected
+Eugen-Gheorghe Luha to succeed Mr. Vis on the Finance and
+Investment Committee.
+Personnel Changes on the Supervisory Board and
+Its Committees
+Our Exploration & Production segment is active in the following
+focus regions: the U.K. and Norwegian North Sea and Russia.
+Exploration & Production
+As the link between E.ON and the world's wholesale energy
+markets, our Global Commodities unit buys and sells electric-
+ity, natural gas, liquefied natural gas, oil, coal, freight, and
+carbon allowances. It also manages and develops assets and
+contracts at several phases of the gas value chain, such as
+pipelines, long-term supply contracts, and storage facilities.
+Global Commodities
+Our Renewables global unit is helping to drive renewables
+growth in many countries across Europe and the world. Renew-
+ables are good for the environment and have great potential
+as a business, which is why we are steadily increasing renew-
+ables' share of our generation portfolio and aim to play a
+leading role in this growing market. We continually seek out
+new solutions and technologies that will make the energy
+supply more environmentally friendly. We therefore make sig-
+nificant investments in renewables.
+Renewables
+The Generation global unit consists of all our conventional
+(fossil, biomass, and nuclear) generation assets in Europe. It
+manages and optimizes these assets across national boundaries.
+Our generation fleet is one of the biggest and most efficient in
+Europe. We have major asset positions in Germany, the United
+Kingdom, Sweden, Italy, Spain, France, and the Benelux coun-
+tries, giving us one of the broadest geographic footprints
+among European power producers. We also have one of the
+most balanced fuel mixes in our industry.
+Generation
+Another global unit called Technology, which is based at
+Group Management, brings together comprehensive project-
+development, project-delivery, and engineering expertise to
+support the construction of new assets and the operation of
+existing assets across the Group. This unit also coordinates
+our Group-wide research and development projects for the
+E.ON Innovation Centers.
+Four of our global units are reportable segments: Generation,
+Renewables, Global Commodities, and Exploration & Production.
+Global Units
+In view of the negotiations to sell our Italy and Spain regional
+units, we applied IFRS 5 and reclassified these units as assets
+held for sale from the fourth quarter of 2014 until their derecog-
+nition. We therefore adjusted our 2014 and 2013 numbers,
+including energy-related numbers, to exclude these two units
+and no longer provide commentary on their business perfor-
+mance. By contrast, our generation operations in Italy and Spain
+are still included in our 2014 reporting.
+Effective January 1, 2014, the Generation global unit includes
+our biomass operations, which were formerly part of the
+Renewables unit. We also transferred some operations that had
+been part of the Germany regional unit to E.ON Connecting
+Energies. Furthermore, the initial application of IFRS 10 and 11
+resulted in effects which are described in Note 2 to the Con-
+solidated Financial Statements. We adjusted the prior-year
+figures accordingly.
+Changes in Our Reporting
+Supervisory Board and Board of Management
+Tables and Explanations
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Furthermore, the auditor examined E.ON SE's early-warning
+system regarding risks. This examination revealed that the
+Board of Management has taken appropriate measures to
+meet the requirements of risk monitoring and that the early-
+warning system regarding risks is fulfilling its tasks.
+At the Supervisory Board's meeting on March 10, 2015, we
+thoroughly discussed-in the presence of the independent
+auditor and with knowledge of, and reference to, the Inde-
+pendent Auditor's Report and the results of the preliminary
+review by the Audit and Risk Committee-E.ON SE's Financial
+Statements, Consolidated Financial Statements, Combined
+Group Management Report, and the Board of Management's
+proposal for profit appropriation. The independent auditor
+was available for supplementary questions and answers. After
+concluding our own examination we determined that there
+are no objections to the findings. We therefore acknowledged
+and approved the Independent Auditor's Report.
+We approved the Financial Statements of E.ON SE prepared
+by the Board of Management and the Consolidated Financial
+Statements. The Financial Statements are thus adopted. We
+agree with the Combined Group Management Report and, in
+particular, with its statements concerning the Company's
+future development.
+We examined the Board of Management's proposal for profit
+appropriation, which includes a cash dividend of €0.50 per
+ordinary share, also taking into consideration the Company's
+liquidity and its finance and investment plans. The proposal
+is in the Company's interest with due consideration for the
+shareholders' interests. After examining and weighing all
+arguments, we agree with the Board of Management's pro-
+posal for profit appropriation.
+-1.64
+Nine regional units manage our operating business in Europe.
+They are responsible for sales, regional energy networks, and
+distributed generation. They are also close partners of the
+global units operating in their respective region, for which they
+provide a broad range of important functions, such as HR
+management and accounting. In addition, they are the sole
+point of contact for all stakeholders, including policymakers,
+government agencies, trade associations, and the media.
+1.10
+income¹
+36.8
+¹Adjusted for discontinued operations.
+1.50
+1.50
+²For the respective financial year; the 2014 figure is management's proposed dividend.
+3Xetra.
+1.50
+"Based on ordinary shares outstanding.
+5On all German stock exchanges, including Xetra.
+1.00
+1.10
+1.00
+76
+59
+31.4
+0.50
+2009
+2010
+2011
+0.60
+0.50
+50
+51
+60
+2012
+2013
+2014
+¹Payout ratio not adjusted for discontinued operations.
+54
+(€ in billions)
+Payout ratio¹ (%)
+- Dividend
+0.84
+Dividend²
+0.50
+Dividend payout (€ in millions)
+966
+1.11
+0.60
+1,145
+Twelve-month high³
+15.46
+14.71
+Twelve-month low³
+12.56
+11.94
+Year-end closing price³
+14.20
+13.42
+Dividend
+At the 2015 Annual Shareholders Meeting, management will
+propose a cash dividend of €0.50 per share for the 2014 finan-
+cial year (prior year: €0.60). Furthermore, shareholders will
+be offered the option to exchange the cash dividend partially
+into E.ON SE shares (currently held as treasury shares). The
+payout ratio (as a percentage of underlying net income) would
+be 60 percent compared with a ratio of 51 percent in the
+prior year. Based on E.ON stock's year-end 2014 closing price,
+the dividend yield is 3.5 percent.
+Number of shares outstanding
+(in millions)
+1,933
+1,907
+Dividend per Share
+Market capitalization4 (€ in billions)
+27.4
+25.6
+E.ON stock trading volume5
+€ per share
+Earnings from underlying net
+investors 24%
+10
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+994
+Associated companies
+737
+697
+Joint ventures
+63
+34
+Other related parties
+380
+263
+Income from transactions with related companies is generated
+mainly through the delivery of gas and electricity to distrib-
+utors and municipal entities, especially municipal utilities. The
+relationships with these entities do not generally differ from
+those that exist with municipal entities in which E.ON does not
+have an interest.
+1,180
+Expenses from transactions with related companies are
+generated mainly through the procurement of gas, coal and
+electricity.
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2014, include €368 million (2013: €828 million) in trade
+payables to operators of jointly-owned nuclear power plants.
+These payables bear interest at 1.0 percent or at one-month
+EURIBOR less 0.05 percent per annum (2013: 1.0 percent or
+one-month EURIBOR less 0.05 percent per annum) and have
+no fixed maturity. E.ON continues to have in place with these
+power plants a cost-transfer agreement and a cost-plus-fee
+agreement for the procurement of electricity. The settlement
+of such liabilities occurs mainly through clearing accounts.
+Under IAS 24, compensation paid to key management person-
+nel (members of the Board of Management and of the Super-
+visory Board of E.ON SE) must be disclosed.
+The total expense for 2014 for members of the Board of Man-
+agement amounted to €9.9 million (2013: €11.7 million) in
+short-term benefits and €0 million (2013: €3.3 million) in termi-
+nation benefits, as well as €2.8 million (2013: €4.3 million) in
+post-employment benefits. Additionally taken into account in
+2014 were actuarial losses of €11.7 million (2013: actuarial gains
+of €4.9 million). The cost of post-employment benefits is equal
+to the service and interest cost of the provisions for pensions.
+The expense determined in accordance with IFRS 2 for the
+tranches of the E.ON Share Performance Plan and the E.ON
+Share Matching Plan in existence in 2014 was €6.0 million
+(2013: €3.3 million).
+Provisions for the E.ON Share Performance Plan and the E.ON
+Share Matching Plan amounted to €10.4 million as of Decem-
+ber 31, 2014 (2013: €5.9 million).
+The members of the Supervisory Board received a total of
+€3.1 million for their activity in 2014 (2013: €3.2 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts with
+subsidiaries totaling €0.5 million (2013: €0.5 million).
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 81 through 95.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Receivables from related companies consist mainly of trade
+receivables.
+Consolidated Financial Statements
+Liabilities
+235
+178
+133
+Expenses
+1,697
+1,603
+Associated companies
+1,395
+1,184
+Joint ventures
+102
+57
+155
+Other related parties
+362
+Receivables
+1,740
+1,624
+Associated companies
+1,057
+1,074
+Joint ventures
+448
+395
+Other related parties
+200
+Other related parties
+Supervisory Board and Board of Management
+Tables and Explanations
+Led by its Group Management in Düsseldorf, Germany, the
+E.ON Group ("E.ON" or the "Group") is segmented into global
+and regional units, which are reported here in accordance with
+IFRS 8, "Operating Segments" ("IFRS 8").
+8,337
+9,191
+Depreciation and amortization
+-3,553
+-3,467
+Impairments (-)/Reversals (+) 2
+-120
+-100
+EBIT¹
+4,664
+5,624
+EBITDA¹
+-1,612
+589
+2,004
+Economic interest income (net)
+Net book gains/losses
+Restructuring/cost-management
+expenses
+E.ON 2.0 restructuring expenses
+Impairments (-)/Reversals (+)2,3
+Other non-operating earnings
+Income/Loss from continuing
+operations before taxes
+Income taxes
+-133
+-182
+-363
+-368
+-5,409
+-1,874
+(33) Segment Information
+2013
+€ in millions
+Global Units
+The global units are reported separately in accordance with
+IFRS 8.
+Generation
+This global unit consists of the Group's conventional (fossil
+and nuclear) generation assets in Europe. It manages and
+optimizes these assets across national boundaries. Since the
+beginning of 2014, the Group's biomass generation activities
+are also reported here. The prior-year figures have been
+adjusted accordingly.
+Renewables
+E.ON also takes a global approach to managing its carbon-
+sourcing and renewables businesses. The objective at this
+unit is to extend the Group's leading position in the growing
+renewables market.
+Global Commodities
+As the link between E.ON and the world's wholesale energy
+markets, the Global Commodities global unit buys and sells
+electricity, natural gas, liquefied natural gas (LNG), oil, coal,
+freight, biomass, and carbon allowances. It additionally man-
+ages and develops facilities and contracts at different levels
+in the gas market's value chain.
+Exploration & Production
+E.ON's exploration and production business is a segment
+active in the focus regions North Sea (U.K., Norway) and Russia.
+Regional Units
+2014
+E.ON's distribution and sales operations in Europe are managed
+by nine regional units in total.
+Those units not reported separately are instead reported
+collectively as "Other regional units." They include the France,
+Benelux, Slovakia and Romania units and, through December
+2014, the Italy and Spain units (see Note 4 for further dis-
+cussion of the Italy and Spain units). Additionally reported
+here since the fourth quarter of 2013 are the activities of
+E.ON Connecting Energies, which concentrates on providing
+decentralized, complete solutions.
+E.ON's power generation business in Russia is presented
+outside Europe, as a special-focus region.
+Since the beginning of 2013, the businesses in Brazil and the
+activities in Turkey acquired in the second quarter of 2013 are
+reported in the "Other Non-EU Countries" operating segment.
+Group Management/Consolidation
+Group Management/Consolidation contains E.ON SE itself,
+the interests held directly by E.ON SE, and the consolidation
+effects that take place at Group level.
+195
+196 Notes
+EBITDA is the key measure at E.ON for purposes of internal
+management control and as an indicator of a business's long-
+term earnings power. EBITDA is derived from income/loss
+before interest, taxes, depreciation and amortization (including
+impairments and reversals) and adjusted to exclude extra-
+ordinary effects. The adjustments include net book gains and
+restructuring/cost-management expenses, as well as impair-
+ments and other non-operating income and expenses. Income
+from investment subsidies for which liabilities are recognized
+is included in EBITDA.
+Economic net interest income is calculated by taking the net
+interest income shown in the income statement and adjusting
+it using economic criteria and excluding extraordinary effects,
+namely, the portions of interest expense that are non-operating.
+Net book gains are equal to the sum of book gains and losses
+from disposals, which are included in other operating income
+and other operating expenses. Restructuring and cost-manage-
+ment expenses are non-recurring in nature. Other non-oper-
+ating earnings encompass other non-operating income and
+expenses that are unique or rare in nature. Depending on the
+particular case, such income and expenses may affect differ-
+ent line items in the income statement. For example, effects
+from the marking to market of derivatives are included in other
+operating income and expenses, while impairment charges
+on property, plant and equipment are included in depreciation,
+amortization and impairments.
+Due to the adjustments, the key figures by segment may
+differ from the corresponding IFRS figures reported in the
+Consolidated Financial Statements.
+The following table shows the reconciliation of our EBITDA to
+net income/loss as reported in the IFRS Consolidated Financial
+Statements:
+Net Income
+For segment reporting purposes, the Germany, UK, Sweden,
+Czechia and Hungary regional units are reported separately.
+124
+95
+Joint ventures
+Risk Management
+Principles
+The prescribed processes, responsibilities and actions con-
+cerning financial and risk management are described in detail
+in internal risk management guidelines applicable throughout
+the Group. The units have developed additional guidelines of
+their own within the confines of the Group's overall guidelines.
+To ensure efficient risk management at the E.ON Group, the
+Trading (Front Office), Financial Controlling (Middle Office) and
+Financial Settlement (Back Office) departments are organized
+as strictly separate units. Risk controlling and reporting in the
+areas of interest rates, currencies, credit and liquidity manage-
+ment is performed by the Financial Controlling department,
+while risk controlling and reporting in the area of commodities
+is performed at Group level by a separate department.
+E.ON uses a Group-wide treasury, risk management and
+reporting system. This system is a standard information tech-
+nology solution that is fully integrated and is continuously
+updated. The system is designed to provide for the analysis
+and monitoring of the E.ON Group's exposure to liquidity,
+foreign exchange and interest risks. The units employ estab-
+lished systems for commodities. Credit risks are monitored
+and controlled on a Group-wide basis by Financial Controlling,
+with the support of a standard software package. The com-
+modity positions of most of the global and regional units are
+transferred to the Global Commodities unit for risk manage-
+ment and optimization purposes, based on a transfer-pricing
+mechanism. Special risk management, coordinated with Group
+Management, applies in a small number of exceptional cases.
+189
+190 Notes
+Separate Risk Committees are responsible for the maintenance
+and further development of the strategy set by the Board of
+Management of E.ON SE with regard to commodity, treasury
+and credit risk management policies.
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON con-
+sist of ensuring ability to pay at all times, the timely satisfac-
+tion of contractual payment obligations and the optimization
+of costs within the E.ON Group.
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+E.ON SE determines the Group's financing requirements on
+the basis of short- and medium-term liquidity planning. The
+financing of the Group is controlled and implemented on a
+forward-looking basis in accordance with the planned liquidity
+requirement or surplus. Relevant planning factors taken into
+consideration include operating cash flow, capital expenditures,
+divestments, margin payments and the maturity of bonds
+and commercial paper.
+The net gains and losses in the held-for-trading category
+encompass both the changes in fair value of the derivative
+financial instruments and the gains and losses on realization.
+The fair value measurement of commodity derivatives and
+of realized gains on currency derivatives is the most important
+factor in the net result for this category.
+2. Price Risks
+3. Credit Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group
+to identify, measure and control credit risks.
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from profit-at-risk ("PaR"),
+value-at-risk ("VaR") and sensitivity analyses are "forward-
+looking statements" that involve risks and uncertainties. Actual
+results could differ materially from those projected due to
+actual, unforeseeable developments in the global financial
+markets. The methods used by the Company to analyze risks
+should not be considered forecasts of future events or losses.
+For example, E.ON faces certain risks that are either non-
+financial or non-quantifiable. Such risks principally include
+country risk, operational risk, regulatory risk and legal risk,
+which are not represented in the following analyses.
+Foreign Exchange Risk Management
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+Because it holds interests in businesses outside of the euro
+area, currency translation risks arise within the E.ON Group.
+Fluctuations in exchange rates produce accounting effects
+attributable to the translation of the balance sheet and income
+statement items of the foreign consolidated Group companies
+included in the Consolidated Financial Statements. Translation
+risks are hedged through borrowing in the corresponding
+local currency, which may also includes shareholder loans in
+foreign currency. In addition, derivative and primary financial
+instruments are employed as needed. The hedges qualify for
+hedge accounting under IFRS as hedges of net investments
+in foreign operations. The Group's translation risks are reviewed
+at regular intervals and the level of hedging is adjusted when-
+ever necessary. The respective debt factor and the enterprise
+value denominated in the foreign currency are the principal
+criteria governing the level of hedging.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+In the normal course of business, the E.ON Group is exposed
+to risks arising from price changes in foreign exchange, inter-
+est rates, commodities and asset management. These risks
+create volatility in earnings, equity, debt and cash flows from
+period to period. E.ON has developed a variety of strategies
+to limit or eliminate these risks, including the use of derivative
+financial instruments, among others.
+Consolidated Financial Statements
+The net gains and losses in the amortized cost category are
+due primarily to interest on financial liabilities, reduced by
+capitalized construction-period interest.
+877
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Financial guarantees with a total nominal volume of €87 million
+(2013: €457 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees; a book
+value of €11 million (2013: €30 million) has been recognized.
+For financial liabilities that bear floating interest rates, the
+rates that were fixed on the balance sheet date are used to
+calculate future interest payments for subsequent periods
+as well. Financial liabilities that can be terminated at any time
+are assigned to the earliest maturity band in the same way
+as put options that are exercisable at any time. All covenants
+were complied with during 2014.
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+The net gains and losses from financial instruments by IAS 39
+category are shown in the following table:
+Net Gains and Losses by Category¹
+In addition to interest income and expenses from financial
+receivables, the net gains and losses in the loans and receiv-
+ables category consist primarily of valuation allowances on
+trade receivables. Gains and losses on the disposal of avail-
+able-for-sale securities and equity investments are reported
+under other operating income and other operating expenses,
+respectively.
+€ in millions
+Available for sale
+Held for trading
+Amortized cost
+Total
+¹The categories are described in detail in Note 1.
+2014
+2013
+-96
+722
+1,166
+-1,070
+722
+-206
+1,430
+841
+-1,188
+Loans and receivables
+Supervisory Board and Board of Management
+Tables and Explanations
+The E.ON Group is also exposed to operating and financial
+transaction risks attributable to foreign currency transactions.
+These risks arise for the Group companies primarily from
+physical and financial trading in commodities, from intragroup
+relationships and from capital spending in foreign currency.
+The subsidiaries are responsible for controlling their operating
+currency risks. E.ON SE coordinates hedging throughout the
+Group and makes use of external derivatives as needed.
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated
+both by external financing in a variety of foreign currencies,
+and by shareholder loans from within the Group denominated
+in foreign currency. Financial transaction risks are generally
+fully hedged.
+Supervisory Board and Board of Management
+Tables and Explanations
+The levels and backgrounds of financial assets received as
+collateral are described in more detail in Notes 18 and 26.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements.
+Exchange-traded forward and option contracts as well as
+exchange-traded emissions-related derivatives having an aggre-
+gate nominal value of €42,759 million as of December 31, 2014,
+(2013: €40,889 million) bear no credit risk. For the remaining
+financial instruments, the maximum risk of default is equal to
+their carrying amounts.
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest
+money at leading local banks. Standardized credit assessment
+and limit-setting is complemented by daily monitoring of CDS
+levels at the banks and at other significant counterparties.
+Asset Management
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 25), financial investments totaling €5.4 billion (2013:
+€5.9 billion) were held predominantly by German E.ON Group
+companies as of December 31, 2014.
+These financial assets are invested on the basis of an accumu-
+lation strategy (total-return approach), with investments
+broadly diversified across the money market, bond, real estate
+and equity asset classes. Asset allocation studies are per-
+formed at regular intervals to determine the target portfolio
+structure. The majority of the assets is held in investment
+funds managed by external fund managers. Corporate Asset
+Management at E.ON SE, which is part of the Company's
+Finance Department, is responsible for continuous monitoring
+of overall risks and those concerning individual fund managers.
+Risk management is based on a risk budget whose usage is
+monitored regularly. The three-month VaR with a 98-percent
+confidence interval for these financial assets was €240 million
+(2013: €88 million). The increase relative to the previous year
+is primarily attributable to higher market volatility.
+In addition, the mutual insurance fund Versorgungskasse
+Energie VVaG ("VKE") manages financial assets that are almost
+exclusively dedicated to the coverage of benefit obligations
+at E.ON Group companies in Germany; these assets totaled
+€1.0 billion at year-end 2014 (2013: €0.8 billion). The assets
+at VKE do not constitute plan assets under IAS 19 (see Note 24)
+and are shown as non-current and current assets on the bal-
+ance sheet. The majority of the diversified portfolio, consisting
+of money market instruments, bonds, real estate and equities,
+is held in investment funds managed by external fund man-
+agers. VKE is subject to the provisions of the Insurance Super-
+vision Act ("Versicherungsaufsichtsgesetz" or "VAG") and its
+operations are supervised by the German Federal Financial
+Supervisory Authority ("Bundesanstalt für Finanzdienstleis-
+tungsaufsicht" or "BaFin"). Financial investments and contin-
+uous risk management are conducted within the regulatory
+confines set by BaFin. The three-month VaR with a 98-percent
+confidence interval for these financial assets was €35.3 million
+(2013: €35.8 million).
+193
+Consolidated Financial Statements
+194 Notes
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, the most significant of which
+are associated companies accounted for under the equity
+method and their subsidiaries. Additionally reported as related
+parties are joint ventures, as well as equity interests carried
+at fair value and unconsolidated subsidiaries, which are of
+lesser importance as regards the extent of the transactions
+described in the following discussion. Transactions with related
+parties are summarized as follows:
+Related-Party Transactions
+€ in millions
+2014
+2013
+Income
+1,753
+2,082
+Associated companies
+1,480
+1,825
+(32) Transactions with Related Parties
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+The one-day value-at-risk (99 percent confidence) from the
+translation of deposits and borrowings denominated in foreign
+currency, plus foreign-exchange derivatives, was €143 million as
+of December 31, 2014 (2013: €122 million) and resulted primarily
+from the positions in British pounds and Swedish kronor.
+Interest Risk Management
+E.ON is exposed to profit risks arising from floating-rate finan-
+cial liabilities and from interest rate derivatives. Positions
+based on fixed interest rates, on the other hand, are subject
+to changes in fair value resulting from the volatility of market
+rates. E.ON seeks a specific mix of fixed- and floating-rate
+debt over time. The long-term orientation of the business
+model in principle means fulfilling a high proportion of financ-
+ing requirements at fixed rates, especially within the medium-
+term planning period. This also involves the use of interest
+rate derivatives. With interest rate derivatives included, the
+share of financial liabilities with fixed interest rates was
+93 percent as of December 31, 2014 (2013: 93 percent). Under
+otherwise unchanged circumstances, the volume of financial
+liabilities with fixed interest rates, which amounted to €14.3 bil-
+lion at year-end 2014, would decline to €13.1 billion in 2015
+and to €10.4 billion in 2016. The effective interest rate duration
+of the financial liabilities, including interest rate derivatives,
+was 7.4 years as of December 31, 2014 (2013: 7.1 years). The
+volume-weighted average interest rate of the financial liabili-
+ties, including interest rate derivatives, was 5.6 percent as of
+December 31, 2014 (2013: 5.5 percent).
+As of December 31, 2014, the E.ON Group held interest rate
+derivatives with a nominal value of €4,893 million (2013:
+€4,776 million).
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for inter-
+nal risk controlling and reflects the economic position of
+the E.ON Group. A one-percentage-point upward or downward
+change in interest rates (across all currencies) would neither
+raise nor lower interest charges in the subsequent fiscal year
+(2013: €31 million increase or decrease).
+Commodity Price Risk Management
+The E.ON portfolio of physical assets, long-term contracts
+and end-customer sales is exposed to substantial risks from
+fluctuations in commodity prices. The principal commodity
+prices to which E.ON is exposed relate to electricity, gas, hard
+coal, iron ore, freight charters, petroleum products, LNG and
+emission certificates.
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the
+value of the portfolio while reducing the potential negative
+deviation from target EBITDA.
+The maximum permissible risk is determined centrally by the
+Board of Management and allocated over a three-year planning
+horizon into a decentralized limit structure in coordination
+with the units. Before limits are approved, investment plans
+and all other known obligations and quantifiable risks are
+taken into account. Ongoing risk controlling and reporting,
+including portfolio optimization, is steered centrally by Group
+191
+192 Notes
+Management and operationally managed within the units
+independently from trading operations. There is a clear system
+of internal controls in place that follows best-practice indus-
+try standards of risk management.
+From a forward-looking perspective, risks are assessed using
+a profit-at-risk metric that quantifies the risk by taking into
+account the size of the open position, price levels and price
+volatilities, as well as the underlying market liquidity in each
+market. Profit-at-risk reflects the potential negative change
+in the market value of the open position if it is closed as
+quickly as market liquidity allows with a 5-percent chance of
+being exceeded.
+The profit-at-risk for the financial and physical commodity
+positions covering the planning horizon of up to three years
+amounted to €1,412 million as of December 31, 2014 (2013:
+€1,616 million).
+As of December 31, 2014, the E.ON Group has entered into
+electricity, gas, coal, oil and emissions-related derivatives with
+a nominal value of €150,773 million (2013: €124,769 million).
+A key foundation of the risk management system is the Group-
+wide Commodity Risk Policy and the corresponding internal
+policies of the units. These specify the control principles for
+commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+Commodity exposures and risks are aggregated across the
+Group on a monthly basis and reported to both the Risk Com-
+mittee and the Market Committee.
+The commodity risk management as presented above reflects
+the Group's internal management reporting and also covers
+the financial instruments within the scope of IFRS 7.
+Credit Risk Management
+In order to minimize credit risk arising from operating activi-
+ties and from the use of financial instruments, the Company
+enters into transactions only with counterparties that satisfy
+the Company's internally established minimum requirements.
+Maximum credit risk limits are set on the basis of internal
+and (where available) external credit ratings. The setting and
+monitoring of credit limits is subject to certain minimum
+requirements, which are based on Group-wide credit risk
+management guidelines. Long-term operating contracts and
+asset management transactions are not comprehensively
+included in this process. They are monitored separately at the
+level of the responsible units.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature
+of the operating activities and the credit risk, additional credit
+risk monitoring and controls are performed both by the units
+and by Group Management. Monthly reports on credit limits,
+including their utilization, are submitted to the Risk Commit-
+tee. Intensive, standardized monitoring of quantitative and
+qualitative early-warning indicators, as well as close monitoring
+of the credit quality of counterparties, enable E.ON to act early
+in order to minimize risk.
+To the extent possible, pledges of collateral are negotiated
+with counterparties for the purpose of reducing credit risk.
+Accepted as collateral are guarantees issued by the respective
+parent companies or evidence of profit-and-loss-pooling
+agreements in combination with letters of awareness. To a
+lesser extent, the Company also requires bank guarantees
+and deposits of cash and securities as collateral to reduce credit
+risk. Risk-management collateral was accepted in the amount
+of €7,157 million.
+CEO Letter
+Report of the Supervisory Board
+-1,643
+-115
+Combined Group Management Report
+-2,379
+9,714
+2,223
+2,695
+2,221
+2,908
+384
+378
+622
+733
+290
+494
+9,346
+7
+5
+5
+546
+492
+601
+691
+322
+533
+121
+106
+331
+11
+404
+136
+126
+Sales
+EBITDA¹
+Equity-method earnings²
+Operating cash flow before interest and taxes
+Investments
+¹Adjusted for extraordinary effects.
+UK
+Sweden
+Czechia
+2014
+2013
+128
+2014
+2014
+2013
+9,303
+9,649
+2,136
+2,569
+2,093
+2,772
+43
+65
+87
+2013
+141
+163
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+687
+-78
+-154
+439
+533
+-77
+-139
+-77
+-139
+Operating cash flow before interest and taxes
+502
+517
+670
+-27
+491
+643
+Investments
+347
+360
+356
+3,170
+3,530
+¹Adjusted for extraordinary effects.
+-482
+-11
+1,865
+1,518
+0
+€ in millions
+External sales
+Intersegment sales
+Sales
+EBITDA¹
+Equity-method earnings²
+Financial Information by Business Segment-Presentation of Non-EU Countries
+Russia
+Other Non-EU Countries
+Non-EU Countries
+2014
+2013
+2014
+2013
+2014
+2013
+1,518
+1,865
+1,518
+1,865
+0
+0
+1,518
+1,865
+0
+Intersegment sales
+External sales
+703
+Financial Information by Business Segment-Presentation of Other EU Countries
+In both 2014 and 2013, E.ON's global and regional units were
+adversely affected by a generally deteriorated market environ-
+ment, altered market assessments and regulatory intervention.
+As a consequence, impairment charges totaling €5.5 billion
+were recognized on the activities in the Generation global unit
+(€4.3 billion primarily in the United Kingdom, in Sweden and in
+Italy), within the Non-EU Countries segment (€0.5 billion), in
+Exploration & Production (€0.4 billion), in the Renewables unit
+(€0.2 billion) and in Global Commodities (€0.1 billion). These
+impairments were partially offset by reversals of impairments
+of approximately €0.1 billion at the Generation, Renewables
+and Global Commodities units. In 2013, impairment charges
+were recognized particularly at the Generation, Renewables,
+Global Commodities and Exploration & Production units and
+within the activities in the Non-EU Countries segment.
+Other non-operating earnings include, among other things, the
+marking to market of derivatives used to shield the operating
+businesses from price fluctuations. As of December 31, 2014,
+this marking to market produced a positive effect of €540 mil-
+lion, compared with €777 million at year-end 2013. However,
+non-operating earnings were adversely affected in 2014 by
+write-downs on gas inventories and securities and within the
+activities in the Non-EU Countries, and by expenses incurred
+in connection with the bond buybacks. In 2013, other non-oper-
+ating earnings were adversely affected by provisions in the
+gas business relating to divestitures and long-term contracts
+and to write-downs on securities.
+An additional adjustment to the internal profit analysis relates
+to net interest income, which is presented based on economic
+considerations. Economic net interest income is calculated by
+taking the net interest income from the income statement
+and adjusting it using economic criteria and excluding certain
+extraordinary (that is, non-operating) effects.
+Economic Net Interest Income
+€ in millions
+2014
+2013
+Interest and similar expenses (net)
+as shown in the Consolidated
+Statements of Income
+Non-operating interest expense (+)/
+income (-)
+Economic interest income (net)
+-1,810
+-1,992
+198
+Restructuring and cost-management expenses declined by
+€54 million from the previous year. As in 2013, the expenses
+were primarily attributable to the internally-initiated cost-
+reduction programs.
+118
+-1,874
+Due in large part to the improved net financial position and
+the reversal of provisions from previous years, economic net
+interest income, at -€1,612 million, was above its 2013 level of
+-€1,874 million.
+Transactions within the E.ON Group are generally effected at
+market prices.
+197
+198 Notes
+Financial Information by Business Segment
+€ in millions
+External sales
+Intersegment sales
+Sales
+EBITDA¹
+-1,612
+Equity-method earnings²
+segments. The 2013 figure reflects, in particular, gains on the
+transfer of the hydroelectric power plants in Bavaria to Austria's
+Verbund AG in conjunction with the entry into the Turkish
+market. In addition, the disposals of E.ON Thüringer Energie AG,
+the equity interest in the Slovak energy company SPP, a
+minority interest in the company JMP in the Czech Republic
+and the Finnish activities, as well as the sale of securities,
+network segments and an equity interest in the gas business
+in Germany, all contributed to book gains.
+Consolidated Financial Statements
+€ in millions
+-576
+Income/Loss from continuing
+operations
+-2,955
+2,361
+Income from discontinued operations, net
+Net loss/income
+-175
+98
+-3,130
+2,459
+Attributable to shareholders of E.ON SE
+Attributable to non-controlling interests
+Supervisory Board and Board of Management
+Tables and Explanations
+-3,160
+30
+368
+¹Adjusted for extraordinary effects.
+2Impairments differ from the amounts reported in accordance with IFRS due to
+impairments on companies accounted for under the equity method and impair-
+ments on other financial assets.
+³Recorded under non-operating earnings.
+Net book gains in 2014 were approximately €1.4 billion below
+the prior-year level. In 2014, E.ON recorded book gains pri-
+marily on the sale of securities and on the disposals of an
+equity interest in a natural-gas utility in Germany, a majority
+stake in a gas company in the Czech Republic, an equity
+interest in a Finnish gas company and various micro thermal
+power plants in Sweden, as well as on the sale of network
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+2,091
+Operating cash flow before interest and taxes³
+-718
+¹Adjusted for extraordinary effects.
+1,500
+1,464
+21
+311
+53
+39
+-3
+12
+128
+157
+1,769
+1,936
+1,458
+1,582
+-113
+-1,809
+862
+1,067
+1,222
+861
+115
+151
+Investments
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+³The operating cash flow of the Global Commodities unit was diminished in 2013 by the legal transfer in that year of gas distribution to the distribution companies held in the
+Germany regional unit. The operating cash flow of the Germany regional unit increased by a corresponding amount.
+1,161
+2,215
+3,079
+83,106
+90,034
+Renewables
+Global Commodities
+2014
+2013
+2014
+2013
+2014
+2013
+2,561
+2,721
+682
+Generation
+58,716
+2,423
+11,068
+10,285
+2,397
+32,823
+675
+1,748
+1,715
+8,347
+7,724
+57,211
+24,390
+E.ON's customer structure did not result in any major concen-
+tration in any given geographical region or business area. Due
+to the large number of customers the Company serves and
+the variety of its business activities, there are no individual
+customers whose business volume is material compared with
+the Company's total business volume.
+accounted for under
+110 5,009 5,652
+270
+2,865 3,205
+245
+259
+1,615 2,092
+the equity method
+Companies
+9,391
+2,200
+10,423 16,734
+CEO Letter
+7,681
+6,314
+5,650
+15,319 15,145
+equipment
+Property, plant and
+217 111,556 119,688
+297 4,882 6,648
+1,852
+217
+2,499 41,273 50,083
+Report of the Supervisory Board
+Supervisory Board and Board of Management
+Tables and Explanations
+Strategy and Objectives
+Jm
+The Board of Management
+Düsseldorf, February 27, 2015
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+Declaration of the Board of Management
+202 Notes
+201
+On February 19, 2015, E.ON sold its Italian solar business to
+the private infrastructure investment fund manager F2i SGR.
+The activities sold comprise a total generating capacity of
+49 MW and consist of seven solar plants that were constructed
+between 2010 and 2013. About 70 percent of the capacity is
+installed on Sardinia. E.ON and F2i SGR agreed not to disclose
+the purchase price.
+In February 2015, Italy's Constitutional Court ruled that the
+so-called "Robin Hood" tax was unconstitutional. This tax had
+been introduced in 2008 in order to limit the profits of utilities.
+In its decision, the Court expressly stated that its ruling would
+apply only to future issues.
+(35) Other Significant Issues
+Additional information about the members of the Board of
+Management is provided on page 218.
+E.ON Stock
+The Board of Management's compensation structure and the
+amounts for each member of the Board of Management are
+presented on pages 81 through 95 in the Compensation Report.
+Total payments to former members of the Board of Manage-
+ment and their beneficiaries amounted to €10.2 million (2013:
+€14.5 million). Provisions of €175.0 million (2013: €158.0 million)
+have been established for the pension obligations to former
+members of the Board of Management and their beneficiaries.
+Total remuneration to members of the Board of Management
+in 2014 amounted to €16.2 million (2013: €18.1 million). This
+consisted of base salary, bonuses, other compensation elements
+and share-based payments.
+13,091
+4,201
+Additional information about the members of the Supervisory
+Board is provided on pages 216 and 217.
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are pre-
+sented on page 95 in the Compensation Report.
+As in 2013, there were no loans to members of the Supervisory
+Board in 2014.
+Total remuneration to members of the Supervisory Board in
+2014 amounted to €3.1 million (2013: €3.2 million).
+Supervisory Board
+(34) Compensation of Supervisory Board and
+Board of Management
+Consolidated Financial Statements
+Combined Group Management Report
+As in 2013, there were no loans to members of the Board of
+Management in 2014.
+Board of Management
+2,806
+2,748
+182
+Sweden
+United Kingdom
+2014
+2013
+2014
+€ in millions
+Germany
+Geographic Segment Information
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the
+equity method, by geographic area:
+The "Other" item consists in particular of revenues generated
+from services and from other trading activities.
+The investments presented in the financial information by
+business segment tables are the purchases of investments
+reported in the Consolidated Statements of Cash Flows.
+¹Operating cash flow from continuing operations.
+2013
+-7
+6,253
+Operating cash flow
+119,688
+111,556
+Total
+43
+-961
+-918
+Teyssen
+Tax payments
+5,554
+6,260
+10,780
+2,499
+2014
+Europe (other)
+2014
+184
+362
+2,357
+10,006
+93,626 9,700
+1,606
+426
+86,867
+1,556
+Intangible assets
+location of seller
+External sales by
+911 111,556 119,688
+31,012 29,444
+2013
+3,813
+32,854 37,896
+47,624
+41,605
+location of customer
+External sales by
+2013
+2014
+2013
+2014
+2013
+Other
+3,279
+Total
+0.0
+Reutersberg
+BauMineral GmbH, DE, Herten 1,8
+Abwasserentsorgung Friedrichskoog GmbH, DE,
+54.9
+Barras Eléctricas Galaico-Asturianas, S.A., ES, Lugo¹
+49.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE,
+Brunsbüttel6
+49.0
+Badlantic Betriebsgesellschaft mbH, DE, Ahrensburg
+49.0
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede6
+25.0
+98.0
+AWE-Arkona-Windpark Entwicklungs-GmbH, DE, Hamburg2
+B.V. NEA, NL, Dodewaard
+44.0
+27.0
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide
+Abwasserentsorgung Berkenthin GmbH, DE, Berkenthin6
+100.0
+Avon Energy Partners Holdings, GB, Coventry²
+49.0
+100.0
+Avacon Natur GmbH, DE, Sarstedt¹
+100.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+100.0
+Friedrichskoog
+49.0
+Bayernwerk AG, DE, Regensburg¹
+Bergeforsens Kraftaktiebolag, SE, Bispgården5
+5,797
+49.0
+100.0
+Beacon Solar PV, LLC, US, Wilmington²
+Abwasserentsorgung Schöppenstedt GmbH, DE,
+Schöppenstedt
+20.0
+BBL Company V.O.F., NL, Groningen
+49.0
+Abwasserentsorgung Schladen GmbH, DE, Schladen6
+100.0
+49.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+Diekhusen-Fahrstedt6
+100.0
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+Abwasserentsorgung Marne-Land GmbH, DE,
+100.0
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+49.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+49.0
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+100.0
+49.0
+63.1
+Avacon AG, DE, Helmstedt¹
+49.0
+AB Svafo, SE, Stockholm6
+100.0
+Aerodis, S.A., FR, Paris¹
+100.0
+:agile accelerator GmbH, DE, Düsseldorf²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+22.0
+Combined Group Management Report
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+(36) List of Shareholdings Pursuant to
+Section 313 (2) HGB
+Winkel
+Kildahl
+Schäfer
+Schafer
+Birnbaum
+Sib
+Strategy and Objectives
+bitly
+Alamo Solar, LLC, US, Wilmington²
+Abfallwirtschaft Schleswig-Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH (AWSH), DE,
+Elmenhorst
+AV Packaging GmbH, DE, Munich¹
+33.3
+100.0
+Atrium 72. Europäische VV SE, DE, Düsseldorf²
+44.0
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg6
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+Abwasserentsorgung Amt Achterwehr GmbH, DE,
+Achterwehr6
+47.2
+AS Latvijas Gāze, LV, Riga5
+49.0
+100.0
+Aquila Sterling Limited, GB, Coventry²
+100.0
+Abfallwirtschaftsgesellschaft Rendsburg-Eckernförde
+mbH, DE, Borgstedt6
+Aquila Power Investments Limited, GB, Coventry2
+49.0
+Abfallwirtschaftsgesellschaft Dithmarschen mbH, DE, Heide
+100.0
+ANCO Sp. z o.o., PL, Jarocin²
+49.0
+100.0
+Anacacho Wind Farm, LLC, US, Wilmington¹
+100.0
+Åliden Vind AB, SE, Malmö²
+49.0
+100.0
+-293
+2014
+Other
+9,191
+8,337
+247
+-522
+1
+1
+-139
+-77
+58
+54
+-552
+533
+439
+2,012
+1,732
+2,387
+87
+1,846
+82
+39
+9
+1,070
+1,136
+119,688
+111,556
+0
+0
+254
+1,081
+971
+1,851
+Other EU Countries
+Other regional units
+Hungary
+7,992
+4,633
+-3
+43
+3,530
+703
+969
+879
+119,688
+1,013
+404
+64
+7,977
+8,220
+-634
+-43
+643
+491
+2,480
+2,023
+3,286
+745
+2014
+111,556
+-35,447
+2013
+2014
+2013
+2014
+2013
+2014
+2013
+2014
+E.ON Group
+Group Management/
+Consolidation
+Non-EU Countries
+Other EU Countries
+Germany
+Production
+Exploration &
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+40.0
+2014
+2013
+2014
+2013
+1,865
+1,518
+20,615
+18,995
+36,521
+28,584
+2,051
+2,118
+-35,683
+783
+746
+219
+-45,108
+-44,889
+986
+421
+479
+236
+1,865
+1,518
+19,832
+18,249
+35,535
+27,955
+1,630
+1,639
+629
+2013
+2013
+2014
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+¹Adjusted for extraordinary effects.
+81
+63
+6
+3
+Investments
+156
+190
+58
+70
+Operating cash flow before interest and taxes
+Equity-method earnings²
+6
+9
+132
+146
+43
+43
+1,170
+1,166
+1,808
+1,592
+199
+200 Notes
+The following table shows the reconciliation of operating
+cash flow before interest and taxes to operating cash flow:
+Additional Entity-Level Disclosures
+-1,049
+Interest payments
+57,216
+50,726
+Gas
+243
+7,977
+8,220
+interest and taxes
+56,918
+55,033
+92
+Electricity
+2013
+2014
+€ in millions
+ence
+20131
+20141
+€ in millions
+Segment Information by Product
+Differ-
+Operating Cash Flow
+External sales by product break down as follows:
+Operating cash flow before
+81
+63
+55
+2,012
+58
+1,732
+54
+42
+42
+212
+236
+195
+200
+783
+20,615
+746
+18,995
+3,491
+208
+3,567
+1,638
+449
+487
+7
+1
+2013
+19,832
+18,249
+3,042
+3,080
+1,800
+1,637
+1,807
+-756
+225
+539
+1,078
+1,085
+1,745
+1,537
+2013
+2014
+2013
+2014
+Spain
+Italy
+EBITDA¹
+346
+Sales
+External sales
+€ in millions
+Financial Information by Business Segment-Presentation of Discontinued Operations
+969
+879
+179
+184
+117
+102
+2,480
+2,023
+Intersegment sales
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+Eddelak GmbH, DE, St. Michaelisdonn6
+E.ON España, S.L., ES, Santander¹
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+100.0
+E.ON US Energy LLC, US, Wilmington¹
+100.0
+E.ON Risk Consulting GmbH, DE, Düsseldorf¹
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON România S.R.L., RO, Târgu Mureş¹
+90.2
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+E.ON Rhein-Ruhr Ausbildungs-GmbH, DE, Essen²
+100.0
+100.0
+E.ON Värme Sverige AB, SE, Malmö¹
+100.0
+100.0
+E.ON Värme Timrå AB, SE, Sundsvall¹
+90.9
+100.0
+E.ON Värmekraft Sverige AB, SE, Malmö¹
+100.0
+E.ON Ruhrgas International GmbH, DE, Essen 1,8
+E.ON Ruhrgas Austria GmbH, AT, Vienna¹
+E.ON Ruhrgas BBL B.V., NL, Rotterdam¹
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+100.0
+100.0
+100.0
+Supervisory Board and Board of Management
+Tables and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+Name, location
+E.ON Regenerabile România S.R.L., RO, laşi²
+Stake (%)
+100.0
+Name, location
+Stake (%)
+E.ON UK Retail Limited, GB, Coventry2
+100.0
+E.ON Renovables Financiera, S.L., ES, Madrid²
+E.ON US Corporation, US, Wilmington¹
+100.0
+100.0
+E.ON Renovables, S.L., ES, Madrid¹
+100.0
+E.ON UK Technical Services Limited, GB, Edinburgh²
+100.0
+E.ON Renovaveis Portugal, SGPS S.A., PT, Lisbon¹
+100.0
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+E.ON Retail Limited, GB, Coventry²
+E.ON UK Secretaries Limited, GB, Coventry²
+E.ON Vattenkraft Sverige AB, SE, Sundsvall¹
+100.0
+E.ON Ruhrgas Nigeria Limited, NG, Abuja²
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Wind Sweden AB, SE, Malmö¹
+100.0
+E.ON Servicii Tehnice S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Zweiundzwanzigste Verwaltungs GmbH, DE,
+E.ON Servisní, s.r.o., CZ, České Budějovice¹
+Düsseldorf²
+100.0
+100.0
+100.0
+100.0
+East Midlands Electricity Distribution Holdings, GB,
+Coventry²
+100.0
+E.ON Smart Living AB, SE, Malmö¹
+100.0
+East Midlands Electricity Distribution Limited, GB, Coventry²
+100.0
+E.ON Sverige AB, SE, Malmö¹
+100.0
+E.ON Technologies (Ratcliffe) Limited, GB, Coventry¹
+E.ON Slovensko, a.s., SK, Bratislava¹
+E.ON Wind Services A/S, DK, Rødby¹
+100.0
+E.ON Servicii Clienti S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+E.ON Vierundzwanzigste Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+E.ON Russia Beteiligungs GmbH, DE, Düsseldorf²
+100.0
+E.ON Wind Denmark AB, SE, Malmö²
+100.0
+E.ON Russia Holding GmbH, DE, Düsseldorf 1,8
+100.0
+E.ON Wind Kårehamn AB, SE, Malmö¹
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Wind Norway AB, SE, Malmö²
+100.0
+E.ON Service GmbH, DE, Essen²
+100.0
+E.ON Wind Resources AB, SE, Malmö²
+100.0
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+E.ON Försäkring Sverige AB, SE, Malmö¹
+100.0
+E.ON Metering GmbH, DE, Unterschleißheim²
+E.ON NA Capital LLC, US, Wilmington¹
+100.0
+100.0
+E.ON Försäljning Sverige AB, SE, Malmö¹
+100.0
+E.ON NA Investments LLC, US, Wilmington¹
+100.0
+E.ON France Energy Solutions S.A.S, FR, Paris¹
+100.0
+100.0
+100.0
+E.ON France Power S.A.S, FR, Paris¹
+100.0
+E.ON New Build & Technology BVBA, BE, Vilvoorde²
+100.0
+E.ON France S.A.S, FR, Paris¹
+100.0
+E.ON Nord Sverige AB, SE, Stockholm¹
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+E.ON New Build & Technology B.V., NL, Rotterdam²
+E.ON First Future Energy Holding B.V., NL, Rotterdam¹
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+99.8
+E.ON Europa, S.L., ES, Santander²
+100.0
+E.ON Kraftwerke 6. Beteiligungs-GmbH, DE, Hanover²
+100.0
+E.ON Exploration & Production GmbH, DE, Düsseldorf 1,8
+100.0
+E.ON Kraftwerke GmbH, DE, Hanover¹
+100.0
+E.ON Facility Management GmbH, DE, Munich¹,8
+100.0
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Fernwärme GmbH, DE, Gelsenkirchen¹
+100.0
+E.ON Kundenservice GmbH, DE, Landshut¹
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+E.ON Limited, GB, Coventry²
+100.0
+100.0
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf1, 8
+100.0
+100.0
+100.0
+E.ON Nordic AB, SE, Malmö¹
+E.ON Gas Storage GmbH, DE, Essen¹
+E.ON Produzione Centrale Livorno Ferraris S.p.A., IT, Milan¹
+E.ON Produzione S.p.A., IT, Sassari¹
+75.0
+100.0
+E.ON Generation GmbH, DE, Hanover¹
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Global Commodities North America LLC, US,
+Wilmington¹
+E.ON Provence Biomasse S.A.R.L, FR, Paris²
+100.0
+100.0
+100.0
+100.0
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE,
+Düsseldorf²
+E.ON RAG Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+E.ON RE Investments LLC, US, Wilmington¹
+E.ON Real Estate GmbH, DE, Essen²
+100.0
+100.0
+100.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). - 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+CEO Letter
+Report of the Supervisory Board
+E.ON Global Commodities SE, DE, Düsseldorf¹
+E.ON Generation Belgium N.V., BE, Vilvoorde¹
+100.0
+E.ON Generación, S.L., ES, Santander¹
+100.0
+E.ON Off Grid Solution GmbH, DE, Düsseldorf²
+100.0
+E.ON Gas Storage UK Limited, GB, Coventry¹
+100.0
+E.ON Perspekt GmbH, DE, Düsseldorf²
+100.0
+E.ON Gas Sverige AB, SE, Malmö¹
+100.0
+E.ON Portfolio Solution GmbH, DE, Düsseldorf²
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö¹
+100.0
+E.ON Power Innovation Pty Ltd, AU, Brisbane²
+100.0
+E.ON Gasification Development AB, SE, Malmö¹
+100.0
+E.ON Power Plants Belgium BVBA, BE, Brussels²
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+100.0
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+25.1
+E.ON Technologies GmbH, DE, Gelsenkirchen¹
+23.0
+Eoliser Serviços de Gestão para parques eólicos, Lda, PT,
+Lisbon¹
+100.0
+Electricity ON XXI, S.L., ES, Albacete²
+100.0
+EOS PAX IIA, S.L., ES, Santiago de Compostela
+48.5
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+100.0
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+Elecdey CARCELÉN, S.A., ES, Albacete
+100.0
+50.0
+Ergon Energia S.r.l. in liquidazione, IT, Brescia
+50.0
+ELICA S.r.I., IT, Milan²
+100.0
+Ergon Holding Company Limited, GB, Coventry²
+100.0
+Elmregia GmbH, DE, Schöningen
+49.0
+Ergon Holdings Ltd, MT, St. Julians¹
+Elevate Wind Holdco, LLC, US, Wilmington4
+100.0
+100.0
+45.0
+100.0
+100.0
+EFR CEE Szolgáltató Kft., HU, Budapest
+25.0
+Enerjisa Enerji A.Ş., TR, Istanbul 4
+50.0
+EFR Europäische Funk-Rundsteuerung GmbH, DE, Munich
+39.9
+ENEVA Participações S.A., BR, Rio de Janeiro4
+50.0
+Ekopur d.o.o., SI, Ljubljana²
+EGC UAE SUPPLY & PROCESSING LTD FZE, AE,
+Fujairah free zone²
+42.9
+100.0
+Enfield Energy Centre Limited, GB, Coventry²
+100.0
+EH-SZER Energetikai és Távközlési Hálózatépítő és
+Eólica de Levante, S.L., ES, Alicante
+25.0
+Szerelő Kft., HU, Győr¹
+100.0
+Eólica de São Julião, Lda, PT, Lisbon
+ENEVA S.A., BR, Rio de Janeiro4
+Első Magyar Szélerőmű Kft., HU, Kulcs²
+74.7
+Ergon Insurance Ltd, MT, St. Julians¹
+100.0
+Etzel Gas-Lager Management GmbH, DE,
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+35.0
+Friedeburg-Etzel6
+75.2
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH &
+Co. KG (ews), DE, Bad Segeberg6
+Evantec GmbH, DE, Munich²
+100.0
+50.1
+Energia Eolica Sud S.r.l., IT, Milan²
+Energie-Agentur Weyhe GmbH, DE, Weyhe
+EVG Energieversorgung Gemünden GmbH, DE,
+Gemünden am Main6
+49.0
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching
+50.0
+EVU Services GmbH, DE, Neumünster²
+100.0
+50.0
+EWC Windpark Cuxhaven GmbH, DE, Munich
+50.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). - 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+50.0
+75.2
+Etzel Gas-Lager GmbH & Co. KG, DE, Friedeburg-Etzel5
+45.7
+100.0
+Elverket Vallentuna AB, SE, Vallentuna5
+43.4
+Ergon Nominees Limited, GB, Coventry²
+100.0
+EME Distribution No. 2 Limited, GB, Coventry²
+100.0
+Ergon Overseas Holdings Limited, GB, Coventry¹
+100.0
+ENACO Energieanlagen- und Kommunikationstechnik
+GmbH, DE, Maisach6
+Ergosud S.p.A., IT, Rome³
+50.0
+26.0
+Energest S.r.I., IT, Mira (VE)²
+100.0
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental6
+Esperanto Infrastructure II S.à r.I., LU, Luxembourg
+47.5
+49.0
+Energetika Malenovice, a.s., CZ, Zlín-Malenovice²
+100.0
+etatherm GmbH, DE, Potsdam6
+25.5
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+49.0
+49.0
+49.0
+Energieversorgung Vechelde GmbH & Co KG, DE, Vechelde
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+Energy Collection Services Limited, GB, Coventry²
+Enerji Almanya GmbH, DE, Düsseldorf²
+100.0
+EBY Port 1 GmbH, DE, Munich¹
+100.0
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+100.0
+100.0
+EBY Port 5 GmbH, DE, Regensburg²
+100.0
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+E.ON UK Ironbridge Limited, GB, Coventry²
+E.ON UK Pension Trustees Limited, GB, Coventry²
+E.ON UK Energy Lincoln Limited, GB, Coventry²
+E.ON UK Energy Services Limited, GB, Coventry2
+E.ON UK Gas Limited, GB, Coventry¹
+100.0
+100.0
+Regensburg²
+100.0
+100.0
+EC&R Asset Management, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Canada Ltd., CA, Saint John¹
+100.0
+E.ON UK plc, GB, Coventry¹
+EBY technische Energiedienstleistungen GmbH, DE,
+100.0
+EBY kaufmännische Energiedienstleistungen GmbH, DE,
+Regensburg2
+100.0
+100.0
+East Midlands Electricity Limited, GB, Coventry¹
+100.0
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+100.0
+E.ON Trend s.r.o., CZ, České Budějovice¹
+100.0
+East Midlands Electricity Share Scheme Trustees Limited,
+GB, Coventry²
+100.0
+E.ON Turkey Enerji Anonim Şirketi, TR, Istanbul2
+100.0
+EASYCHARGE.me GmbH, DE, Düsseldorf²
+100.0
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+EAV Beteiligungs-GmbH, DE, Helmstedt¹
+100.0
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+EBY Immobilien GmbH & Co. KG, DE, Regensburg²
+100.0
+E.ON UK CoGeneration Limited, GB, Coventry¹
+E.ON UK Directors Limited, GB, Coventry2
+100.0
+100.0
+100.0
+EC&R Development, LLC, US, Wilmington¹
+E.ON UK Property Services Limited, GB, Coventry2
+E.ON UK PS Limited, GB, Coventry²
+100.0
+100.0
+50.0
+EC&R QSE, LLC, US, Wilmington¹
+100.0
+EC&R Services, LLC, US, Wilmington¹
+100.0
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE,
+Putzbrunn6
+50.0
+EC&R Sherman, LLC, US, Wilmington²
+50.0
+100.0
+30.0
+EC&R Solar Development, LLC, US, Wilmington²
+100.0
+Economy Power Limited, GB, Coventry¹
+100.0
+EEP 2. Beteiligungsgesellschaft mbH, DE, Munich²
+100.0
+EEP Kraftwerksgesellschaft Obernburg mbH, DE, Munich²
+EFG Erdgas Forchheim GmbH, DE, Forchheim
+100.0
+24.9
+Energieversorgung Sehnde GmbH, DE, Sehnde
+100.0
+69.5
+100.0
+100.0
+100.0
+EC&R Energy Marketing, LLC, US, Wilmington¹
+EC&R Ft. Huachuca Solar, LLC, US, Wilmington²
+100.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+207
+208 Notes
+Stake (%)
+EC&R NA Solar PV, LLC, US, Wilmington²
+EC&R O&M, LLC, US, Wilmington¹
+EC&R Panther Creek Wind Farm III, LLC, US, Wilmington��
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+Name, location
+EC&R Grandview Holdco LLC, US, Wilmington²
+EC&R Investco EPC Mgmt, LLC, US, Wilmington²
+EC&R Investco Mgmt II, LLC, US, Wilmington¹
+EC&R Investco Mgmt, LLC, US, Wilmington¹
+EC&R Magicat Holdco, LLC, US, Wilmington¹
+Name, location
+Energieerzeugungswerke Geesthacht GmbH, DE,
+Energienetze Bayern GmbH, DE, Regensburg¹
+Energienetze Schaafheim GmbH, DE, Regensburg²
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau
+Energieversorgung Buching-Trauchgau (EBT) Gesell-
+schaft mit beschränkter Haftung, DE, Halblech
+Energieversorgung Putzbrunn GmbH & Co. KG, DE,
+Putzbrunn6
+Stake (%)
+100.0
+Geesthacht
+100.0
+100.0
+100.0
+100.0
+33.4
+100.0
+100.0
+100.0
+East Midlands Electricity Generation (Corby) Limited, GB,
+Coventry¹
+100.0
+100.0
+100.0
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+87.8
+E.ON Argentina S.A., AR, Buenos Aires²
+100.0
+Centrale Solare di Fiumesanto S.r.I., IT, Sassari¹
+100.0
+E.ON Asset Management GmbH & Co. EEA KG, DE,
+Centro Energia Ferrara S.p.A, IT, Rome5
+58.4
+Grünwald 1,8
+100.0
+Centro Energia Teverola S.p.A, IT, Rome5
+58.4
+E.ON Austria GmbH, AT, Vienna¹
+75.1
+Českomoravská distribuce s.r.o., CZ, České Budějovice
+50.0
+E.ON Bayern Verwaltungs AG, DE, Munich²
+100.0
+Champion WF Holdco, LLC, US, Wilmington¹
+100.0
+E.ON Achtzehnte Verwaltungs GmbH, DE, Düsseldorf²
+E.ON Anlagenservice GmbH, DE, Gelsenkirchen¹
+E.ON Belgium N.V., BE, Brussels¹
+97.5
+100.0
+100.0
+Brunnshög Energi AB, SE, Malmö²
+100.0
+100.0
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth6
+33.3
+E.DIS AG, DE, Fürstenwalde/Spree¹
+67.0
+Bursjöliden Vind AB, SE, Malmö²
+100.0
+e.discom Telekommunikation GmbH, DE, Rostock²
+100.0
+Bützower Wärme GmbH, DE, Bützow6
+20.0
+Carbiogas b.v., NL, Nuenen6
+33.3
+Cardinal Wind Farm LLC, US, Wilmington²
+100.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+e.distherm Wärmedienstleistungen GmbH, DE, Schönefeld¹
+E.ON 10. Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+100.0
+100.0
+Cattleman Wind Farm, LLC, US, Wilmington²
+Celle-Uelzen Netz GmbH, DE, Celle¹
+100.0
+Champion Wind Farm, LLC, US, Wilmington¹
+100.0
+E.ON Biofor Sverige AB, SE, Malmö¹
+100.0
+Cordova Wind Farm, LLC, US, Wilmington²
+100.0
+E.ON Brasil Energia LTDA., BR, City of São Paulo²
+100.0
+Cottam Development Centre Limited, GB, Coventry¹
+CT Services Holdings Limited, GB, Coventry²
+Dampfversorgung Ostsee-Molkerei GmbH, DE, Wismar
+DD Brazil Holdings S.à r.I., LU, Luxembourg¹
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+100.0
+100.0
+E.ON Business Services Benelux B.V., NL, Rotterdam²
+E.ON Business Services Berlin GmbH, DE, Berlin²
+100.0
+100.0
+50.0
+100.0
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj²
+E.ON Business Services Czech Republic s.r.o., CZ,
+České Budějovice²
+100.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+50.0
+COMPAÑÍA EÓLICA ARAGONESA, S.A., ES, Zaragoza+
+100.0
+E.ON Bioerdgas GmbH, DE, Essen¹
+E.ON Benelux CCS Project B.V., NL, Rotterdam²
+100.0
+CHN Contractors Limited, GB, Coventry²
+100.0
+E.ON Benelux Geothermie B.V., NL, Rotterdam²
+100.0
+CHN Electrical Services Limited, GB, Coventry²
+100.0
+E.ON Benelux Holding b.v., NL, Rotterdam¹
+100.0
+CHN Group Ltd, GB, Coventry²
+E-Bio Kyjov s.r.o., CZ, Otrokovice²
+100.0
+100.0
+CHN Special Projects Limited, GB, Coventry²
+100.0
+E.ON Benelux N.V., NL, Rotterdam¹
+100.0
+Citigen (London) Limited, GB, Coventry¹
+100.0
+E.ON Beteiligungen GmbH, DE, Düsseldorf1,8
+100.0
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj6
+33.3
+E.ON Benelux Levering b.v., NL, Eindhoven¹
+Combined Group Management Report
+20.0
+100.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+40.0
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt6
+30.0
+Bioenergie Bad Füssing GmbH & Co. KG, DE, Bad Füssing
+25.0
+Acme Group Limited, GB, Bury¹
+100.0
+Acme Technical Services Limited, GB, Bury¹
+100.0
+Bioenergie Bad Füssing Verwaltungs-GmbH, DE,
+Bad Füssing6
+Adria LNG d.o.o. za izradu studija, HR, Zagreb
+39.2
+Bioenergie Merzig GmbH, DE, Merzig²
+25.0
+51.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+203
+204 Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+Name, location
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+25.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf²
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg6
+40.7
+E.ON Kernkraft GmbH, DE, Hanover¹
+25.0
+Beteiligungsgesellschaft der Energieversorgungs-
+unternehmen an der Kerntechnische Hilfsdienst GmbH
+GbR, DE, Karlsruhe
+47.4
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+49.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+100.0
+Abwassergesellschaft Bardowick mbH & Co. KG, DE,
+Bardowick6
+49.0
+BEW Bayreuther Energie- und Wasserversorgungs-GmbH,
+DE, Bayreuth5
+24.9
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+Bardowick
+49.0
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE,
+Lichtenfels6
+25.1
+Abwassergesellschaft Gehrden mbH, DE, Gehrden6
+49.0
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck
+49.0
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz6
+46.5
+Biogas Ducherow GmbH, DE, Ducherow²
+Stake (%)
+Name, location
+Donau-Wasserkraft Aktiengesellschaft, DE, Munich¹
+100.0
+Blåsjön Kraft AB, SE, Arbrå5
+50.0
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+100.0
+DOTI Deutsche-Offshore-Testfeld- und Infrastruktur-
+GmbH & Co. KG, DE, Oldenburg5
+26.3
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+41.8
+DOTI Management GmbH, DE, Oldenburg
+26.3
+Boiling Springs Wind Farm, LLC, US, Wilmington²
+100.0
+DOTTO MORCONE S.r.l., IT, Milan²
+100.0
+Braila Power S.A., RO, Chiscani village²
+69.8
+Dutchdelta Finance S.à r.l., LU, Luxembourg¹
+100.0
+Brattmyrliden Vind AB, SE, Malmö²
+100.0
+E WIE EINFACH GmbH, DE, Cologne¹
+48.8
+Fürstenwalde/Spree
+100.0
+DKCE Debreceni Kombinált Ciklusú Erőmű Kft., HU,
+Debrecen²
+64.9
+Deutsche Flüssigerdgas Terminal oHG, DE, Essen²
+Stake (%)
+90.0
+100.0
+Deutsche Gesellschaft für Wiederaufarbeitung von
+80.0
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben
+42.5
+Biogas Steyerberg GmbH, DE, Sarstedt²
+100.0
+Breitbandnetz GmbH & Co. KG, DE, Breklum
+DFTG - Deutsche Flüssigerdgas Terminal Gesellschaft mit
+beschränkter Haftung, DE, Wilhelmshaven²
+Bioheizwerk Rötz GmbH, DE, Rötz6
+25.0
+Distribuidora de Gas Cuyana S.A., AR, Mendoza
+53.2
+BIOPLYN Třeboň spol. s r.o., CZ, Třeboň
+24.7
+Distribuidora de Gas del Centro S.A., AR, Córdoba
+58.7
+Biunisi Solar S.r.I., IT, Sassari²
+100.0
+BKW Biokraftwerke Fürstenwalde GmbH, DE,
+90.0
+Consolidated Financial Statements
+e.dialog GmbH, DE, Potsdam²
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+E.ON Climate & Renewables UK Wind Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Zone Six Limited, GB,
+Coventry¹
+100.0
+E.ON Energihandel Nordic AB, SE, Malmö¹
+100.0
+100.0
+E.ON Comercializadora de Último Recurso S.L., ES,
+Santander¹
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+E.ON Energy Projects GmbH, DE, Munich¹
+100.0
+100.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+205
+206 Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+E.ON Energy Sales GmbH, DE, Düsseldorf¹
+100.0
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE,
+Düsseldorf1,8
+100.0
+100.0
+E.ON Energies Renouvelables S.A.S., FR, Paris¹
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON Climate & Renewables UK Offshore Wind Limited,
+GB, Coventry¹
+100.0
+E.ON Climate & Renewables UK Operations Limited, GB,
+Coventry¹
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+E.ON Energie Dialog GmbH, DE, Potsdam²
+100.0
+99.8
+100.0
+E.ON Climate & Renewables UK Rampion Offshore Wind
+Limited, GB, Coventry¹
+100.0
+E.ON Energie Kundenservice GmbH, DE, Landshut¹
+E.ON Energie Odnawialne Sp. z o.o., PL, Szczecin¹
+100.0
+100.0
+E.ON Climate & Renewables UK Robin Rigg East Limited,
+GB, Coventry¹
+100.0
+E.ON Climate & Renewables UK Robin Rigg West Limited,
+GB, Coventry¹
+E.ON Energie Real Estate Investment GmbH, DE, Munich²
+E.ON Energie România S.A., RO, Târgu Mureş¹
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+53.4
+100.0
+E.ON Energy Sales Polska Sp. z o.o., PL, Warsaw²
+100.0
+E.ON Energy Services, LLC, US, Wilmington²
+E.ON Energy Trading S.p.A., IT, Milan¹
+100.0
+E.ON INTERNATIONAL FINANCE B.V., NL, Rotterdam¹
+100.0
+E.ON Energy Trading Srbija d.o.o., RS, Belgrade²
+100.0
+E.ON Invest GmbH, DE, Grünwald²
+100.0
+E.ON Energy Trading UK Staff Company Limited, GB,
+E.ON IT UK Limited, GB, Coventry²
+100.0
+Coventry¹
+100.0
+E.ON Italia S.p.A, IT, Milan¹
+100.0
+E.ON Energy UK Limited, GB, Coventry²
+100.0
+E.ON Kärnkraft Finland AB, FI, Kajaani²
+100.0
+E.ON Erőművek Termelő és Üzemeltető Kft., HU, Budapest¹
+Supervisory Board and Board of Management
+Tables and Explanations
+E.ON Kärnkraft Sverige AB, SE, Malmö¹
+100.0
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington²
+100.0
+E.ON Energy Trading NL Staff Company B.V., NL, Rotterdam²
+100.0
+E.ON Hálózati Szolgáltató Kft."v.a.", HU, Pécs²
+100.0
+E.ON Energy Solutions GmbH, DE, Unterschleißheim²
+100.0
+E.ON Human Resources International GmbH, DE, Hanover 1,8
+100.0
+E.ON Energy Solutions Limited, GB, Coventry¹
+100.0
+E.ON Hungária Energetikai Zártkörűen Működő
+Részvénytársaság, HU, Budapest¹
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie 39. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie AG, DE, Düsseldorf¹,8
+100.0
+100.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Energy Storage GmbH, DE, Essen²
+100.0
+E.ON Iberia Services, S.L., ES, Málaga¹
+100.0
+E.ON Energy Trading NL Staff Company 2 B.V., NL,
+Rotterdam²
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Energy Southern Africa (Pty) Ltd., ZA, Sandton²
+100.0
+100.0
+E.ON Climate & Renewables UK Limited, GB, Coventry¹
+E.ON Climate & Renewables UK London Array Limited,
+GB, Coventry¹
+100.0
+51.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+100.0
+100.0
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+100.0
+E.ON Carbon Sourcing North America LLC, US, Wilmington²
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+100.0
+E.ON Distribuce, a.s., CZ, České Budějovice¹
+100.0
+100.0
+E.ON Distribución, S.L., ES, Santander¹
+100.0
+E.ON Citiri Contoare S.A., RO, Târgu Mureş²
+100.0
+E.ON Climate & Renewables Canada Ltd., CA, Saint John¹
+100.0
+E.ON Distributie România S.A., RO, Târgu Mureş¹
+E.ON E&P Algeria GmbH, DE, Düsseldorf¹,8
+E.ON Danmark A/S, DK, Frederiksberg¹
+100.0
+E.ON Business Services Regensburg GmbH, DE, Regensburg²
+E.ON Business Services Slovakia spol. s.r.o., SK, Bratislava²
+E.ON Business Services Sverige AB, SE, Malmö²
+100.0
+100.0
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+100.0
+E.ON Business Services Hannover GmbH, DE, Hanover²
+E.ON Business Services Hungary Kft., HU, Budapest²
+E.ON Business Services laşi S.R.L., RO, laşi²
+100.0
+E.ON Connecting Energies GmbH, DE, Essen 1,8
+E.ON Connecting Energies Italia S.r.I., IT, Milan²
+61.8
+100.0
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+100.0
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+100.0
+E.ON Business Services Italia S.r.I., IT, Milan²
+100.0
+E.ON Czech Holding AG, DE, Munich 1,8
+100.0
+100.0
+E.ON Business Services GmbH, DE, Hanover¹
+E.ON E&P Norge AS, NO, Stavanger¹
+100.0
+E.ON Elektrárne s.r.o., SK, Trakovice¹
+100.0
+100.0
+E.ON Elnät Kramfors AB, SE, Malmö¹
+100.0
+E.ON Elnät Stockholm AB, SE, Malmö¹
+100.0
+100.0
+E.ON Elnät Sverige AB, SE, Malmö¹
+100.0
+E.ON Climate & Renewables UK Biomass Limited, GB,
+Coventry¹
+E.ON Climate & Renewables Italia S.r.I., IT, Milan¹
+E.ON Climate & Renewables Italia Solar S.r.l., IT, Milan¹
+E.ON Climate & Renewables North America LLC, US,
+Wilmington¹
+100.0
+100.0
+E.ON Climate & Renewables UK Blyth Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Developments Limited,
+GB, Coventry¹
+100.0
+100.0
+100.0
+E.ON Climate & Renewables UK Humber Wind Limited,
+GB, Coventry¹
+E.ON Energiakereskedelmi Kft, HU, Budapest¹
+E.ON Energiaszolgáltató Kft., HU, Budapest¹
+E.ON Energiatermelő Kft., HU, Debrecen¹
+100.0
+100.0
+100.0
+E.ON Climate & Renewables Carbon Sourcing Limited,
+GB, Coventry²
+100.0
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+E.ON Energía, S.L., ES, Santander¹
+100.0
+100.0
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+E.ON Climate & Renewables Carbon Sourcing Pte Ltd, SG,
+Singapore²
+E.ON E&P UK Energy Trading Limited, GB, London¹
+E.ON E&P UK EU Limited, GB, London¹
+100.0
+100.0
+100.0
+100.0
+E.ON Climate & Renewables France Solar S.A.S., FR, Paris¹
+E.ON Climate & Renewables GmbH, DE, Essen¹
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+100.0
+E.ON E&P UK Limited, GB, London¹
+100.0
+80.0
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+49.0
+Venado Wind Farm, LLC, US, Wilmington²
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Waldbüttelbrunn6
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+100.0
+100.0
+Kaiser-Wilhelm-Koog²
+83.3
+Versorgungskasse Energie (VVaG), DE, Hanover¹
+49.0
+Windpark Mutzschen OHG, DE, Potsdam²
+77.8
+Windenergie Osterburg Verwaltungs GmbH, DE,
+Osterburg (Altmark)²
+79.3
+Windpark Naundorf OHG, DE, Potsdam²
+66.7
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein6
+20.0
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach6
+22.2
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Győr²
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+100.0
+Windenergie Osterburg GmbH & Co. KG, DE,
+100.0
+Windenergie Leinetal GmbH & Co. KG, DE, Freden
+100.0
+Utility Debt Services Limited, GB, Coventry²
+100.0
+Wildcat Wind Farm III, LLC, US, Wilmington²
+100.0
+Utilities Center Maasvlakte Leftbank b.v., NL, Rotterdam¹
+100.0
+100.0
+Wildcat Wind Farm II, LLC, US, Wilmington²
+50.0
+Uranit GmbH, DE, Jülich4
+50.2
+22.7
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+Valencia Solar LLC, US, Tucson²
+60.0
+100.0
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden6
+24.9
+Valley Center Solar LLC, US, Wilmington²
+100.0
+Osterburg (Altmark)2
+100.0
+VEBA Electronics LLC, US, Wilmington¹
+VEBACOM Holdings LLC, US, Wilmington²
+Yorkshire Windpower Limited, GB, Coventry
+OB 3, DE, Düsseldorf¹
+Vici Wind Farm, LLC, US, Wilmington²
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Stake (%)
+100.0
+100.0
+100.0
+100.0
+€ in millions
+Untere Iller AG, DE, Landshut²
+100.0
+Combined Group Management Report
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+Equity
+Earnings
+Name, location
+Stake (%)
+€ in millions
+100.0
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+100.0
+Visioncash, GB, Coventry¹
+100.0
+ZAO Gazprom YRGM Development, RU, Salekhard¹
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava
+25.0
+49.0
+Volkswagen AG Preussen Elektra AG Offene Handels-
+gesellschaft, DE, Wolfsburg
+95.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+Name, location
+Consolidated investment funds
+E.ON Treasury, DE, Düsseldorf¹
+EBWFONDS, DE, Düsseldorf¹
+GRPFONDS, DE, Düsseldorf¹
+GSBW, DE, Düsseldorf¹
+HANSEFONDS, DE, Düsseldorf¹
+OB 1, DE, Düsseldorf¹
+OB 2, DE, Düsseldorf¹
+OB 4, DE, Düsseldorf¹
+OB 5, DE, Düsseldorf¹
+OP-Fonds ONE, DE, Düsseldorf¹
+TASSILO, DE, Düsseldorf¹
+VKE-FONDS, DE, Düsseldorf¹
+CEO Letter
+50.0
+50.2
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE,
+Vienenburg6
+34.0
+Stadtwerke Parchim GmbH, DE, Parchim
+25.2
+Stadtwerke Premnitz GmbH, DE, Premnitz6
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk6
+35.0
+49.0
+Tauerngasleitung GmbH in Liqu., AT, Wals-Siezenheim6
+Tech Park Solar, LLC, US, Wilmington²
+46.7
+100.0
+Teplárna Kyjov, a.s., CZ, Kyjov²
+67.2
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+213
+100.0
+214 Notes
+Investments Are Held (as of December 31, 2014)
+Name, location
+Stake (%)
+Teplárna Tábor, a.s., CZ, Tábor¹
+Terminal Alpi Adriatico S.r.I., IT, Rome¹
+51.5
+100.0
+Name, location
+Wärme- und Wasserversorgung Friedensstadt GmbH, DE,
+Trebbin6
+Stake (%)
+50.0
+The Power Generation Company Limited, GB, Coventry²
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+Tapolcai Kogenerációs Erőmű Kft., HU, Győr²
+Stadtwerke Niebüll GmbH, DE, Niebüll6
+Other companies in which share investments are held
+SVO Vertrieb GmbH, DE, Celle¹
+100.0
+Stadtwerke Geesthacht GmbH, DE, Geesthacht
+24.9
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg
+25.1
+Stadtwerke Husum GmbH, DE, Husum6
+49.9
+SWS Energie GmbH, DE, Stralsund5
+49.0
+49.9
+Stadtwerke Lübz GmbH, DE, Lübz6
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+29.0
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+Szombathelyi Erőmű Zrt., HU, Győr²
+24.9
+66.5
+55.0
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald
+24.9
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely6
+25.0
+25.0
+40.0
+Thermondo GmbH, DE, Berlin
+20.1
+100.0
+Wasserwerk Gifhorn GmbH & Co KG, DE, Gifhorn6
+49.8
+100.0
+100.0
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr
+GmbH, DE, Grafenwöhr
+49.0
+100.0
+48.0
+WEA Schönerlinde GbR mbH Kiepsch & Bosse &
+Beteiligungsges. e.disnatur mbH, DE, Berlin²
+70.0
+49.8
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen6
+Weiẞmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+93.5
+Umwelt- und Wärmeenergiegesellschaft Strasburg
+GmbH, DE, Potsdam²
+100.0
+Unión de Generadores de Energía, S.A., ES, Zaragoza
+50.0
+West of the Pecos Solar LLC, US, Wilmington²
+Western Gas Limited, GB, Coventry²
+100.0
+100.0
+Union Grid s.r.o., CZ, Prague
+22.2
+Wasserwerk Gifhorn Beteiligungs-GmbH, DE, Gifhorn
+100.0
+Twin Forks Wind Farm, LLC, US, Wilmington²
+TXU Europe (AH Online) Limited, GB, Coventry²
+TXU Europe (AHG) Limited, GB, Coventry²
+TXU Europe (AHGD) Limited, GB, Coventry²
+TXU Europe (AHST) Limited, GB, Coventry²
+Überlandwerk Leinetal GmbH, DE, Gronau
+Wärmeversorgungsgesellschaft Königs Wusterhausen
+mbH, DE, Königs Wusterhausen²
+50.1
+Thor Cogeneration Limited, GB, Coventry²
+100.0
+Warmtebedrijf Exploitatie N.V., NL, Rotterdam6
+50.0
+Thor Holdings Limited, GB, Coventry²
+100.0
+Three Rocks Solar, LLC, US, Wilmington²
+100.0
+49.0
+Tierra Blanca Wind Farm, LLC, US, Wilmington²
+100.0
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim²
+100.0
+Tipton Wind, LLC, US, Wilmington²
+100.0
+Tiszántúli Hőtermelő Kft., HU, Debrecen²
+100.0
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Müden/Aller
+50.0
+TPG Wind Limited, GB, Coventry6
+50.0
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+49.0
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+BKW Energie AG, CH, Bern7,9
+Member of the Board of Management
+since 2013
+HEW HofEnergie+Wasser GmbH, DE, Hof7
+Dr. Theo Siegert, Chairman
+Klaus Dieter Raschke, Deputy Chairman
+(until December 31, 2014)
+Eberhard Schomburg (Deputy Chairman,
+since January 1, 2015)
+Fred Schulz
+(since January 1, 2015)
+Werner Wenning
+Finance and Investment
+Committee
+Werner Wenning, Chairman
+Thies Hansen, Deputy Chairman
+(since January 1, 2015)
+Fred Schulz (until December 31, 2014),
+Deputy Chairman (from March 11 until
+December 31, 2014)
+Audit and Risk Committee
+Eugen-Gheorghe Luha (since July 2, 2014)
+Willem Vis (until June 30, 2014)
+Nomination Committee
+Werner Wenning, Chairman
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Dr. Karen de Segundo
+Unless otherwise indicated, information is as of December 31, 2014.
+•
+•
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+217
+218 Supervisory Board and Board of Management
+Board of Management (and Information on Other Directorships Held by Board of Management Members)
+Dr. Karen de Segundo
+Dr. Johannes Teyssen
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Eberhard Schomburg
+Werner Wenning, Chairman
+Szczecińska Energetyka
+Cieplna Sp. z o.0.
+Dr. Karen de Segundo
+Attorney
+.
+•
+British American Tobacco plc
+(Board of Directors)
+Lonmin plc (Board of Directors, until
+January 29, 2015)
+Pöyry Oyj (Board of Directors)
+Dr. Theo Siegert
+Managing Partner, de Haen-Carstanjen
+Erhard Ott, Deputy Chairman
+& Söhne
+• Merck KGaA
+• DKSH Holding Ltd.
+•
+(Administrative Council)
+E. Merck KG
+(Shareholders' Committee)
+Willem Vis
+(until June 30, 2014)
+Director of Training (Generation),
+E.ON Benelux N.V.
+Supervisory Board Committees
+Executive Committee
+• Henkel AG & Co. KGaA
+Born 1959 in Hildesheim,
+Chairman and Chief Executive Officer
+since 2010
+Member of the Board of Management
+since 2004
+•
+E.ON Hungária Zrt.² (Chairman)
+⚫E.ON Italia S.p.A.2
+•
+E.ON Sverige AB² (Chairman)
+• Nord Stream AG
+• OAO E.ON Russia²
+Klaus Schäfer
+Born 1967 in Regensburg,
+Finance, Mergers & Acquisitions,
+Accounting & Controlling, Legal
+Affairs & Compliance, Taxes,
+IT & Business Services
+⚫ E.ON Business Services GmbH¹
+(Chairman)
+E.ON France S.A.S.2 (Chairman)
+Mike Winkel
+Member of the Board of Management
+since 2013
+Generation, Renewables, Human
+Resources, Operational Efficiency
+• E.ON Generation GmbH¹
+(Chairman)
+E.ON Sverige AB²
+• OAO E.ON Russia²
+•
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2, of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+1Exempted E.ON Group directorship. 2Other E.ON Group directorship.
+26.0
+Stadtwerke Garbsen GmbH, DE, Garbsen
+Born 1970 in Neubrandenburg,
+•
+E.ON España S.L.2
+(Chairman)
+Group Executive Human Resources,
+Investor Relations, Corporate
+Communications, Group Audit,
+Corporate Strategy & Development
+• Deutsche Bank AG
+• Salzgitter AG
+Dr.-Ing. Leonhard Birnbaum
+Born 1967 in Ludwigshafen,
+Member of the Board of Management
+since 2013
+Global Commodities, Distributed Gener-
+ation, Engineering & Major Projects,
+Commercial Operations, Political Affairs
+& Regulatory, Technology & Innovation,
+Consulting
+• E.ON Global Commodities SE1
+(Chairman)
+• E.ON Technologies GmbH¹
+(Chairman)
+• Georgsmarienhütte Holding GmbH
+(Second Deputy Chairman)
+Jørgen Kildahl
+Born 1963 in Bærum, Norway,
+Member of the Board of Management
+since 2010
+Brazil, Russia, Turkey, Exploration & Pro-
+duction, Health/Safety & Environment,
+Corporate Incident & Crisis Management,
+Procurement & Real Estate Management,
+Sustainability
+•
+•
+E.ON Global Commodities SE1
+ENEVA S.A. (Chairman)
+• OAO E.ON Russia² (Chairman)
+Dr. Bernhard Reutersberg
+Born 1954 in Düsseldorf,
+Member of the Board of Management
+since 2010
+Coordination of Regional Units, Distri-
+bution and Retail Businesses, Group-
+wide program E.ON 2.0
+•
+E.ON Czech Holding AG1 (Chairman)
+• E.ON Benelux Holding B.V.2
+•
+E.DIS AG
+•
+the Combined Works Council, E.DIS AG
+Werner Wenning
+Chairman of the Supervisory Board,
+E.ON SE
+Chairman of the Supervisory Board,
+Bayer AG
+•
+•
+Bayer AG (Chairman)
+Henkel Management AG
+• Siemens AG
+• Henkel AG & Co. KGaA
+(Shareholders' Committee)
+Prof. Dr. Ulrich Lehner
+Supervisory Board (and Information on Other Directorships Held by Supervisory Board Members)
+Member of the Shareholders' Committee,
+Henkel AG & Co. KGaA
+Deutsche Telekom AG (Chairman)
+• Porsche Automobil Holding SE
+•
+ThyssenKrupp AG
+(Chairman)
+Henkel AG & Co. KGaA
+(Shareholders' Committee)
+• Novartis AG (Administrative Council,
+Deputy Chairman,
+until February 27, 2015)
+Erhard Ott
+Deputy Chairman of the Supervisory
+Board, E.ON SE
+216 Supervisory Board and Board of Management
+215
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . ³Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+infra fürth gmbh, DE, Fürth
+Parnaíba Gás Natural S.A., BR, Rio de Janeiro
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg7
+Stadtwerke Wertheim GmbH, DE, Wertheim?
+6.6
+1,127.7
+52.6
+8.5
+38.8
+1.1
+19.9
+22.1
+0.0
+19.9
+67.8
+0.0
+9.1
+47.8
+4.4
+10.0
+30.1
+0.0
+10.0
+20.5
+0.0
+Member of National Board, Unified
+Service Sector Union, ver.di
+Forsmarks Kraftgrupp AB, SE, Östhammar
+Deputy Chairman of the Supervisory
+Board, E.ON SE
+(since July 1, 2014)
+Unless otherwise indicated, information is as of December 31, 2014.
+•
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Klaus Dieter Raschke
+until May 15, 2014)
+(until December 31, 2014)
+•
+• Versorgungskasse Energie VVaG
+Eberhard Schomburg
+Chairman of the E.ON SE Works Council
+and E.ON European Works Council
+• E.ON Kraftwerke GmbH
+E.ON Generation GmbH
+(Deputy Chairman)
+Fred Schulz
+First Deputy Chairman of the E.ON
+European Works Council, Chairman of
+Commercial Clerk, E.ON Kernkraft GmbH
+Dr. Oetker KG (Advisory Board,
+.
+• Spotify Technology S.A.
+Full-time Representative of the General,
+Municipal, Boilermakers and Allied
+Trade Union (GMB)
+Thies Hansen
+(since January 1, 2015)
+Chairman of the Combined Works
+Council, HanseWerk AG
+• HanseWerk AG
+• Schlewsig-Holstein Netz AG
+Hamburg Netz GmbH
+Baroness Denise Kingsmill, CBE
+Attorney at the Supreme Court,
+member of the House of Lords
+•
+APR Energy plc (Deputy Chairwoman)
+• International Consolidated Airlines
+Group S.A.
+•
+Telecom Italia S.p.A.
+Eugen-Gheorghe Luha
+Chairman of Gas România (Romanian
+Federation of Gas Unions), Chairman of
+Romanian employee representatives
+• SEA Complet S.A. (Administrative
+Council)
+René Obermann
+Chairman of the Board of Management,
+Ziggo N.V.
+(until November 12, 2014)
+Partner at Warburg Pincus LLG
+(since January 1, 2015)
+.
+• ThyssenKrupp AG
+Clive Broutta
+50.1
+Kommunale Klimaschutzgesellschaft Landkreis Celle
+39.0
+50.0
+100.0
+Hamburger Hof Versicherungs-Aktiengesellschaft, DE,
+Düsseldorf2
+49.0
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel6
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf 1,8
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+74.9
+Hamburg Netz GmbH, DE, Hamburg¹
+49.0
+Gasversorgung Vorpommern GmbH, DE, Trassenheide
+100.0
+Guyane Conhilac Energies sarl, FR, La Ciotat²
+49.0
+beschränkter Haftung, DE, Würzburg5
+Gasversorgung Unterfranken Gesellschaft mit
+50.0
+GrönGas Partner A/S, DK, Hirtshals6
+95.0
+100.0
+Green Sky Energy Limited, GB, Bury¹
+100.0
+Hams Hall Management Company Limited, GB, Coventry
+HanseWerk AG, DE, Quickborn¹
+46.6
+69.0
+50.0
+50.0
+50.0
+49.0
+20.8
+100.0
+HanseWerk Natur GmbH, DE, Hamburg¹
+Harzwasserwerke GmbH, DE, Hildesheim5
+Havelstrom Zehdenick GmbH, DE, Zehdenick6
+Heizwerk Holzverwertungsgenossenschaft
+Stiftland eG & Co. oHG, DE, Neualbenreuth
+Helioenergy Electricidad Dos, S.A., ES, Sevilla4
+Helioenergy Electricidad Uno, S.A., ES, Sevilla4
+HEMAB Elförsäljning AB, SE, Malmö¹
+49.0
+Gemeindewerke Uetze GmbH, DE, Uetze6
+Gasversorgung im Landkreis Gifhorn GmbH (GLG), DE,
+Wolfsburg¹
+49.9
+49.0
+Gräfelfing
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE,
+49.0
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+50.0
+Gem. Ges. zur Förderung des E.ON Energy Research
+Center mbH, DE, Aachen6
+100.0
+100.0
+Gemeindewerke Leck GmbH, DE, Leck6
+100.0
+50.0
+50.0
+100.0
+100.0
+100.0
+33.3
+Gesellschaft für Energie und Klimaschutz Schleswig-
+Holstein GmbH, DE, Kiel6
+100.0
+100.0
+Flatlands Wind Farm, LLC, US, Wilmington²
+Forest Creek Investco, Inc., US, Wilmington¹
+Forest Creek WF Holdco, LLC, US, Wilmington¹
+Forest Creek Wind Farm, LLC, US, Wilmington¹
+Fortuna Solar, LLC, US, Wilmington²
+20.0
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH,
+AT, Braunau am Inn6
+90.0
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach i. Isartal²
+36.2
+Geólica Magallón, S.L, ES, Zaragoza
+90.0
+66.7
+Emmerthal¹
+Fitas Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach i. Isartal2
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG, DE,
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+GLG Netz GmbH, DE, Gifhorn¹
+41.7
+75.0
+100.0
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+100.0
+Grandview Wind Farm III, LLC, US, Wilmington²
+50.0
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+100.0
+100.0
+50.0
+50.0
+Grandview Wind Farm, LLC, US, Wilmington4
+48.0
+100.0
+Gasspeicher Lehrte GmbH, DE, Helmstedt²
+49.0
+36.9
+Gasag Berliner Gaswerke Aktiengesellschaft, DE, Berlin5
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen
+23.6
+Gas-Union GmbH, DE, Frankfurt/Main
+60.0
+Freya Bunde-Etzel GmbH & Co. KG, DE, Essen4
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen
+GOLLIPP Bioerdgas GmbH & Co KG, DE, Gollhofen
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Nuremberg6
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+Grandview Wind Farm II, LLC, US, Wilmington²
+Gemeindewerke Wedemark GmbH, DE, Wedemark
+49.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Midlands Sales Limited, GB, Coventry²
+100.0
+100.0
+Midlands Power International Limited, GB, Coventry²
+Midlands Power (UK) Limited, GB, Coventry²
+100.0
+Midlands Generation (Overseas) Limited, GB, Coventry²
+100.0
+Midlands Gas Limited, GB, Coventry²
+100.0
+Midlands Electricity Limited, GB, Coventry²
+25.0
+OAO Severneftegazprom, RU, Krasnoselkup
+90.0
+83.7
+OAO E.ON Russia, RU, Surgut¹
+100.0
+NYKCE Nyíregyházi Kombinált Ciklusú Erőmű Kft., HU,
+Nyíregyháza²
+100.0
+100.0
+100.0
+Mittlere Donau Kraftwerke Aktiengesellschaft, DE, Munich²
+60.0
+OAO Shaturskaya Upravlyayushchaya Kompaniya, RU, Shatura¹
+Obere Donau Kraftwerke Aktiengesellschaft, DE, Munich²
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+Offshore Trassenplanungs GmbH i. L., DE, Hanover²
+Offshore-Windpark Beta Baltic GmbH, DE, Hamburg²
+Offshore-Windpark Delta Nordsee GmbH, DE, Hamburg²
+OHA B.V., NL, Eindhoven²
+Munnsville Investco, LLC, US, Wilmington¹
+100.0
+000 E.ON Connecting Energies, RU, Moscow¹
+100.0
+Mosoni-Duna Menti Szélerőmű Kft., HU, Győr²
+48.2
+OLT Offshore LNG Toscana S.p.A., IT, Milan4
+100.0
+Monte Elva Solar S.r.l., IT, Sassari¹
+MFG Flughafen-Grundstücksverwaltungsgesellschaft
+mbH & Co. Gamma oHG i.L., DE, Grünwald²
+54.5
+44.3
+Montan GmbH Assekuranz-Makler, DE, Düsseldorf
+53.3
+100.0
+100.0
+50.0
+49.0
+60.0
+51.0
+OKG AB, SE, Oskarshamn¹
+Metering Services Limited, GB, Coventry²
+METHA-Methanhandel GmbH, DE, Essen¹
+75.0
+Northeolic Montebuño, S.L., ES, Madrid²
+49.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt,
+DE, Eisenhüttenstadt6
+100.0
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+100.0
+Consolidated Financial Statements
+HEUREKA-Gamma AG, CH, Baden-Dättwil²
+67.0
+KommEnergie GmbH, DE, Eichenau
+Hochtemperatur-Kernkraftwerk GmbH (HKG),
+Gemeinsames europäisches Unternehmen, DE, Hamm6
+100.0
+KommEnergie Erzeugungs GmbH, DE, Eichenau
+Hermann Seippel-Unterstützungseinrichtung GmbH i. L.,
+DE, Essen²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+210 Notes
+209
+100.0
+100.0
+Supervisory Board and Board of Management
+Tables and Explanations
+Stake (%)
+100.0
+Meter Services Limited, GB, Coventry²
+50.0
+Braunschweig²
+Nordzucker Bioerdgas Verwaltung-GmbH, DE,
+25.0
+Metegra GmbH, DE, Laatzen
+50.0
+Braunschweig²
+Name, location
+100.0
+Nordzucker Bioerdgas GmbH & Co. KG, DE,
+100.0
+MEON Pensions GmbH & Co. KG, DE, Grünwald 1,8
+100.0
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+Matrix Control Solutions Limited, GB, Bury¹
+Stake (%)
+Name, location
+MEON Verwaltungs GmbH, DE, Grünwald²
+FIDELIA Holding LLC, US, Wilmington¹
+66.7
+beschränkter Haftung, DE, Porta Westfalica¹
+100.0
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+100.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+40.0
+Kalmar Energi Holding AB, SE, Kalmar
+50.0
+Kärnkraftsäkerhet & Utbildning AB, SE, Nyköping
+25.0
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg
+LSW Holding GmbH & Co. KG, DE, Wolfsburg5
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg6
+Lubmin-Brandov Gastransport GmbH, DE, Essen¹
+57.0
+57.0
+57.0
+57.0
+100.0
+Kasson Manteca Solar LLC, US, Wilmington²
+100.0
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+80.0
+Isam-Immobilien-GmbH, DE, Munich²
+30.0
+100.0
+Limited Liability Company E.ON IT, RU, Moscow²
+London Array Limited, GB, Coventry
+50.0
+Langerlo N.V., BE, Genk²
+100.0
+49.9
+Intelligent Maintenance Systems Limited, GB,
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+Lighting for Staffordshire Limited, GB, Coventry¹
+60.0
+100.0
+Milton Keynes
+LUMEN DISTRIBUČNÍ SOUSTAVY, s.r.o., CZ, České Budějovice6
+LUMEN SYNERGY s.r.o., CZ, České Budějovice
+25.0
+50.0
+Inversora de Gas Cuyana S.A., AR, Mendoza
+24.0
+Limfjordens Bioenergi ApS, DK, Frederiksberg²
+78.0
+Inversora de Gas del Centro S.A., AR, Buenos Aires
+75.0
+Inwestycyjna Spólka Energetyczna-IRB Sp. z o.o., PL, Warsaw
+50.0
+Lillo Energy NV, BE, Beveren/Antwerp6
+34.0
+34.0
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+Klåvbens AB, SE, Olofström
+50.0
+Maricopa East Solar PV, LLC, US, Wilmington²
+100.0
+Kokereigasnetz Ruhr GmbH, DE, Essen²
+100.0
+Maricopa East Solar PV 2, LLC, US, Wilmington²
+100.0
+Kolbäckens Kraft KB, SE, Sundsvall¹
+75.0
+100.0
+100.0
+Maricopa West Solar PV 2, LLC, US, Wilmington²
+Maricopa West Solar PV, LLC, US, Wilmington²
+100.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). - 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Komáromi Kogenerációs Erőmű Kft., HU, Győr²
+InfraServ-Bayernwerk Gendorf GmbH, DE, Burgkirchen/Alz
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+Nienburg/Weser
+beschränkter Haftung, DE, Munich²
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+33.3
+Luminar S.r.I., IT, Milan¹
+100.0
+Kernkraftwerk Gundremmingen GmbH, DE,
+Luna Lüneburg GmbH, DE, Lüneburg
+49.0
+Gundremmingen
+25.0
+Maasvlakte CCS Project B.V., NL, Rotterdam6
+69.8
+50.0
+50.0
+Magic Valley Wind Farm II, LLC, US, Wilmington²
+100.0
+Kernkraftwerk Stade GmbH & Co. OHG, DE, Hamburg¹
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+66.7
+Magicat Holdco, LLC, US, Wilmington5
+20.0
+100.0
+Mainkraftwerk Schweinfurt Gesellschaft mit
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+100.0
+100.0
+100.0
+100.0
+DE, Emmerthal¹
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. OHG,
+49.0
+49.0
+Gemeindewerke Wietze GmbH, DE, Wietze6
+50.2
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg
+Exporting Commodities International LLC, US, Marlton
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main6
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+28.9
+Gemeinschaftskernkraftwerk Grohnde Management
+EZV Energie- und Service Verwaltungsgesellschaft mbH,
+DE, Wörth am Main6
+GmbH, DE, Emmerthal²
+50.0
+Gemeinschaftskraftwerk Veltheim Gesellschaft mit
+Fernwärmeversorgung Herne GmbH, DE, Herne
+50.0
+beschränkter Haftung, DE, Kiel
+50.0
+beschränkter Haftung (FFG), DE, Freising
+Gemeinschaftskraftwerk Kiel Gesellschaft mit
+Fernwärmeversorgung Freising Gesellschaft mit
+CEO Letter
+50.2
+100.0
+Farma Wiatrowa Barzowice Sp. z o.o., PL, Warsaw¹
+65.0
+75.0
+Essenbach²
+Falkenbergs Biogas AB, SE, Malmö²
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE,
+28.8
+83.2
+Gemeinschaftskraftwerk Irsching GmbH, DE, Vohburg¹
+Strategy and Objectives
+SVO Holding GmbH, DE, Celle¹
+gemeinnützige GmbH, DE, Celle
+Inadale Wind Farm, LLC, US, Wilmington¹
+100.0
+Kraftwerk Schkopau Betriebsgesellschaft mbH, DE,
+Schkopau¹
+55.6
+Induboden GmbH, DE, Düsseldorf²
+100.0
+Induboden GmbH & Co. Grundstücksgesellschaft OHG,
+DE, Düsseldorf¹
+Kraftwerk Schkopau GbR, DE, Schkopau¹
+58.1
+100.0
+100.0
+41.7
+Induboden GmbH & Co. Industriewerte OHG, DE, Düsseldorf¹
+Industriekraftwerk Greifswald GmbH, DE, Kassel
+100.0
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co.
+OHG, DE, Grünwald¹
+90.0
+49.0
+LandE GmbH, DE, Wolfsburg¹
+69.6
+Industry Development Services Limited, GB, Coventry²
+Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen
+Landwehr Wassertechnik GmbH, DE, Schöppenstedt²
+Kraftwerk Plattling GmbH, DE, Munich¹
+Hydropower Evolutions GmbH, DE, Düsseldorf²
+25.0
+Högbytorp Kraftvärme AB, SE, Malmö²
+100.0
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+Holford Gas Storage Limited, GB, Edinburgh¹
+100.0
+gemeinnützige GmbH, DE, Celle6
+25.0
+Holsteiner Wasser GmbH, DE, Neumünster6
+100.0
+50.0
+50.0
+HSN Magdeburg GmbH, DE, Magdeburg¹
+74.9
+Kraftwerk Burghausen GmbH, DE, Munich¹
+100.0
+HUGE Kft., HU, Budapest²
+100.0
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+Kraftwerk Buer GbR, DE, Gelsenkirchen6
+000 E.ON E&P Russia, RU, Moscow²
+Combined Group Management Report
+Munnsville WF Holdco, LLC, US, Wilmington¹
+36.8
+SV Civitella S.r.I., IT, Milan¹
+100.0
+Stadtwerke Bredstedt GmbH, DE, Bredstedt
+49.9
+SV VII S.r.I., IT, Milan¹
+100.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf6
+49.0
+Svensk Kärnbränslehantering AB, SE, Stockholm6
+34.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH,
+Svenskt Gastekniskt Center AB, SE, Malmö
+30.0
+DE, Ebermannstadt6
+25.0
+SVH Stromversorgung Haar GmbH, DE, Haar
+50.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+Brandenburg an der Havel
+100.0
+Surschiste, S.A., FR, Mazingarbe²
+Stadtwerke Brandenburg an der Havel GmbH, DE,
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim6
+49.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt
+36.0
+Stadtwerke Barth GmbH, DE, Barth
+49.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH,
+DE, Unterschleißheim6
+49.0
+Stadtwerke Bergen GmbH, DE, Bergen
+49.0
+49.0
+50.0
+Stadtwerke Blankenburg GmbH, DE, Blankenburg6
+30.0
+SüdWasser GmbH, DE, Erlangen²
+100.0
+Stadtwerke Bogen GmbH, DE, Bogen
+41.0
+Sunshine 1 S.r.l., IT, Milan²
+100.0
+strotög GmbH Strom für Töging, DE, Töging am Inn
+49.0
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+50.0
+REGAS GmbH & Co KG, DE, Regensburg
+89.9
+SEC Myślibórz Sp. z o.o., PL, Myślibórz²
+100.0
+RDE Verwaltungs-GmbH, DE, Würzburg²
+100.0
+SEC Łobez Sp. z o.o., PL, Łobez²
+93.0
+100.0
+SEC HR Sp. z o.o., PL, Szczecin²
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG,
+DE, Würzburg²
+100.0
+SEC G Sp. z o.o., PL, Szczecin²
+77.4
+100.0
+SEC F Sp. z o.o., PL, Szczecin²
+Rauschbergbahn Gesellschaft mit beschränkter Haftung,
+DE, Ruhpolding²
+100.0
+SEC Połczyn-Zdrój Sp. z o.o., PL, Połczyn-Zdrój²
+100.0
+REGAS Verwaltungs-GmbH, DE, Regensburg
+50.0
+Servicii Energetice pentru Acasa - SEA Complet S.A., RO,
+Târgu Mureş
+35.5
+REWAG REGENSBURGER ENERGIE- UND WASSER-
+VERSORGUNG AG & CO KG, DE, Regensburg5
+100.0
+Service Plus Recycling GmbH, DE, Neumünster²
+33.3
+Erlangen
+100.0
+SERVICE plus GmbH, DE, Neumünster²
+25.1
+Regnitzstromverwertung Aktiengesellschaft, DE,
+SEE-Sul Energía Eólica, S.A., PT, Lisbon¹
+100.0
+regiolicht GmbH, DE, Helmstedt²
+100.0
+SEC Strzelce Krajeńskie Sp. z o.o., PL, Strzelce Krajeńskie²
+35.5
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG
+AG, DE, Regensburg
+100.0
+SEC Słubice Sp. z o.o., PL, Słubice²
+100.0
+Stadtversorgung Pattensen Verwaltung GmbH, DE,
+Pattensen
+100.0
+Stromversorgung Ruhpolding Gesellschaft mit
+beschränkter Haftung, DE, Ruhpolding²
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Snow Shoe Wind Farm, LLC, US, Wilmington²
+100.0
+SO.MET. ENERGIA S.r.I., IT, Costigliole d'Asti (AT)¹
+60.0
+Stadtwerke Ribnitz-Damgarten GmbH, DE,
+Ribnitz-Damgarten
+39.0
+Société des Eaux de l'Est S.A., FR, Saint-Avold (Creutzwald)6
+25.0
+Söderåsens Bioenergi AB, SE, Billesholm²
+63.3
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+Stadtwerke Tornesch GmbH, DE, Tornesch6
+37.8
+49.0
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+48.0
+100.0
+RGE Holding GmbH, DE, Essen 1,8
+100.0
+Settlers Trail Wind Farm, LLC, US, Wilmington¹
+100.0
+Rhein-Main-Donau Aktiengesellschaft, DE, Munich¹
+Ringhals AB, SE, Varberg5
+77.5
+SINERGIA ARAGONESA, S.L., ES, Zaragoza²
+Solar Energy s.r.o., CZ, Znojmo
+60.0
+ŠKO ENERGO, s.r.o., CZ, Mladá Boleslav
+21.0
+RMD Wasserstraßen GmbH, DE, Munich²
+100.0
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav5
+42.5
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). - 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2014)
+CEO Letter
+29.6
+25.0
+Stadtwerke Vilshofen GmbH, DE, Vilshofen6
+41.0
+Stensjön Kraft AB, SE, Stockholm5
+50.0
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+Magdeburg
+store-x Storage Capacity Exchange GmbH, DE, Leipzig
+32.0
+26.7
+Strom Germering GmbH, DE, Germering²
+90.0
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+26.7
+Neustadt a. Rbge.6
+Stromnetzgesellschaft Bad Salzdetfurth-Diekholzen mbH
+& Co. KG, DE, Bad Salzdetfurth6
+49.0
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Stromversorgung Angermünde GmbH, DE, Angermünde
+49.0
+Neustadt a. Rbge.6
+24.9
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+49.0
+24.9
+SEC Energia Sp. z o.o., PL, Szczecin²
+100.0
+Städtische Werke Magdeburg GmbH & Co. KG, DE,
+Magdeburg5
+Sollefteåforsens AB, SE, Sundsvall5
+50.0
+Stadtwerke Wismar GmbH, DE, Wismar
+49.0
+Sønderjysk Biogasproduktion I/S, DK, Vojens
+50.0
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+22.7
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+SQC Kvalificeringscentrum AB, SE, Stockholm
+Stella Wind Farm, LLC, US, Wilmington²
+35.0
+26.0
+33.3
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+49.4
+Städtische Betriebswerke Luckenwalde GmbH, DE,
+Luckenwalde6
+Statco Six Limited, GB, London²
+100.0
+29.0
+Stella Wind Farm II, LLC, US, Wilmington²
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel6
+30.0
+100.0
+SEC Dębno Sp. z o.o., PL, Debno²
+49.0
+Netzgesellschaft Syke GmbH, DE, Syke6
+100.0
+Powergen Group Holdings Limited, GB, Coventry²
+49.0
+Netzgesellschaft Stuhr/Weyhe mbH, DE, Weyhe
+100.0
+Powergen (East Midlands) Loan Notes, GB, Coventry²
+40.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+100.0
+Powergen (East Midlands) Investments, GB, Coventry²
+49.0
+Ronnenberg
+100.0
+Pioneer Trail Wind Farm, LLC, US, Wilmington¹
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE,
+50.0
+Perstorps Fjärrvärme AB, SE, Perstorp6
+Powergen Group Investments, GB, Coventry²
+100.0
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+50.1
+Powergen Limited, GB, Coventry¹
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Investments Are Held (as of December 31, 2014)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+212 Notes
+211
+49.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. 7Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Powergen International Limited, GB, Coventry¹
+15.5
+Nord Stream AG, CH, Zug5
+100.0
+Powergen Holdings S.à r.l., LU, Luxembourg²
+96.0
+New Cogen Sp. z o.o., PL, Warsaw²
+100.0
+Powergen Holdings B.V., NL, Amsterdam1
+100.0
+50.0
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co.
+KG, DE, Hohen Neuendorf6
+49.0
+100.0
+Östrand Energi AB, SE, Sundsvall¹
+34.8
+80.0
+Östersjöfrakt AB, SE, Örebro²
+100.0
+Netz- und Windservice (NWS) GmbH, DE, Schwerin²
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE,
+Bad Münder6
+50.0
+Panrusgáz Zrt., HU, Budapest
+Oskarshamns Energi AB, SE, Oskarshamn5
+Netz Veltheim GmbH, DE, Porta Westfalica¹
+100.0
+000 Teplosbyt, RU, Shatura¹
+100.0
+Munnsville Wind Farm, LLC, US, Wilmington¹
+85.0
+100.0
+67.0
+000 Noginskiy Teplovoy Zentr, RU, Moscow¹
+66.7
+100.0
+25.0
+Panther Creek Solar, LLC, US, Wilmington²
+100.0
+Peißenberger Kraftwerksgesellschaft mit beschränkter
+Haftung, DE, Peißenberg²
+49.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH,
+DE, Giesen6
+100.0
+PEG Infrastruktur AG, CH, Zug¹
+49.0
+50.0
+Pecém II Participações S.A., BR, Rio de Janeiro4
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+Patriot Wind Farm, LLC, US, Wilmington²
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE,
+Giesen6
+90.0
+Parque Eólico Barlavento, S.A., PT, Lisbon¹
+49.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden
+100.0
+Panther Creek Wind Farm I&II, LLC, US, Wilmington¹
+49.0
+100.0
+49.0
+RMD-Consult GmbH Wasserbau und Energie, DE, Munich²
+100.0
+Powergen LS SE, GB, Coventry¹
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+100.0
+Purena Consult GmbH, DE, Wolfenbüttel²
+100.0
+Schleswig-Holstein Netz GmbH, DE, Rendsburg²
+40.0
+PT Power Jawa Barat, ID, Jakarta
+94.1
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+100.0
+100.0
+100.0
+50.0
+20.0
+SCF2 S.r.I., IT, Rome²
+Scarweather Sands Limited, GB, Coventry
+SBI Jordberga AB, SE, Linköping
+100.0
+Powergen Weather Limited, GB, Coventry²
+100.0
+Promec Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+Purena GmbH, DE, Wolfenbüttel¹
+Sea Power & Fuel S.r.I., IT, Genoa
+100.0
+Raab Karcher Electronic Systems Limited, GB, Coventry²
+RAG-Beteiligungs-Aktiengesellschaft, AT, Maria Enzersdorf5
+SEC D Sp. z o.o., PL, Szczecin²
+100.0
+100.0
+20.0
+verwaltungsgesellschaft mbH, DE, Regensburg
+100.0
+100.0
+94.5
+SEC Barlinek Sp. z o.o., PL, Barlinek²
+SEC C Sp. z o.o., PL, Szczecin²
+20.0
+mbH & Co. KG, DE, Regensburg
+100.0
+SEC B Sp. z o.o., PL, Szczecin²
+R-KOM Regensburger Telekommunikationsgesellschaft
+100.0
+SEC A Sp. z o.o., PL, Szczecin²
+100.0
+50.0
+R-KOM Regensburger Telekommunikations-
+Powergen US Investments, GB, Coventry¹
+Powergen US Securities Limited, GB, Coventry¹
+Pyron Wind Farm, LLC, US, Wilmington¹
+Sand Bluff Wind Farm, LLC, US, Wilmington¹
+100.0
+Powergen Retail Supply Limited, GB, Coventry²
+25.0
+Rosengård Invest AB, SE, Malmö6
+100.0
+Powergen Power No. 3 Limited, GB, Coventry¹
+100.0
+Rose Rock Wind Farm, LLC, US, Wilmington²
+100.0
+100.0
+Roscoe Wind Farm, LLC, US, Wilmington¹
+100.0
+Powergen Power No. 1 Limited, GB, Coventry²
+100.0
+Roscoe WF Holdco, LLC, US, Wilmington¹
+100.0
+100.0
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+Rødsand 2 Offshore Wind Farm AB, SE, Malmö5
+RuhrEnergie GmbH, EVR, DE, Gelsenkirchen¹
+100.0
+Powergen Power No. 2 Limited, GB, Coventry²
+100.0
+100.0
+Powergen US Holdings Limited, GB, Coventry¹
+100.0
+Powergen Serang Limited, GB, Coventry²
+Sand Bluff WF Holdco, LLC, US, Wilmington¹
+100.0
+Powergen UK Securities, GB, Coventry²
+47.0
+San Juan de Bargas Eólica, S.L., ES, Zaragoza
+100.0
+20.0
+Powergen UK Holding Company Limited, GB, Coventry²
+100.0
+100.0
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+Heidelberg²
+100.0
+Powergen UK Investments, GB, Coventry¹
+100.0
+Powergen UK Limited, GB, Coventry²
+60.1
+S.C. Salgaz S.A., RO, Salonta²
+179
+168
+Other
+15,822
+32
+31
+32
+Germany
+15,296
+31
+5
+1,925
+174
+Wind
+1,911
+7
+21
+1,904
+1,904
+102
+1,104
+1,105
+101
+1,003
+168
+Hydro
+6,273
+2,072
+Oil
+1,714
+1,003
+20,324 20,993
+7,050
+7,050
+1,353
+1,102
+12,172 12,590
+Natural gas
+6,993
+6,273 6,993
+Hard coal
+2,078
+1,292
+1,263
+1,263
+29
+30
+Lignite
+2,799
+2,799
+2,799 2,799
+Nuclear
+18,518
+18,006
+624
+632
+1,293
+Oil
+Consolidated Financial Statements
+3,887
+2014
+MW
+E.ON Group
+Other EU Countries Non-EU Countries
+Germany
+December 31
+Renewables
+Generation
+Supervisory Board and Board of Management
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Attributable Generating Capacity
+¹Adjusted for discontinued operations and, in the case of 2013 and 2014, for the application of IFRS 10 and 11 and IAS 32. - 2Adjusted for extraordinary effects. ³The figure is as
+of the balance-sheet date. - 4Ratio between economic net debt and EBITDA. - 5Attributable to shareholders of E.ON SE.. 6At the end of December.. For the respective financial
+year; the 2014 figure is management's proposed dividend.. 8Based on shares outstanding.
+61,327 58,503
+72,083
+78,889
+85,105
+Employees at year-end
+Employees
+A-
+A-
+A-
+1,727
+A
+2013
+4,121
+2014
+2014
+484
+473
+3,637
+3,414
+Natural gas
+5,279
+4,976
+5,279
+4,976
+Hard coal
+500
+500
+500
+500
+Lignite
+5,403
+5,403
+5,403
+5,403
+Nuclear
+2013
+2014
+2013
+2014
+2013
+2014
+2013
+2013
+1,714
+1,992
+Hydro
+10
+7
+1,985 2,072
+Hydro
+1,104
+1,105
+101
+102
+1,003
+1,003
+Oil
+4,291
+2,082
+3,960
+85
+4,210
+3,875
+Natural gas
+5,219
+4,916
+5,219
+4,916
+Hard coal
+900
+900
+900
+81
+Wind
+213
+203
+A
+Hard coal
+1,528
+19 1,509 1,509 1,529
+20
+Lignite
+2,511
+2,511
+2,511 2,511
+Nuclear
+19,577
+18,864
+1
+I
+224
+226
+2,198 2,275
+17,078
+16,440
+Germany
+32
+32
+32
+32
+Other
+203
+213
+900
+Lignite
+5,746
+5,746
+8,313
+8,313
+1,648
+1,419
+24,109 7,363 8,502
+1,150
+1,195
+234
+253
+916
+130
+812
+23,770
+Outside Germany
+Other
+4,559
+4,218
+1
+2
+4,558
+4,216
+Wind
+3,059
+3,049
+31
+32
+3,028
+3,018
+40,865 42,572
+1,727
+E.ON Group
+9,441 10,574
+2013
+2014
+2013
+2014
+2013
+2014
+2013
+2014
+2013
+2014
+2013
+5,746
+5,746
+Nuclear
+2014
+E.ON Group
+Other EU Countries Non-EU Countries
+Germany
+Renewables
+Generation
+December 31
+MW
+Fully Consolidated Generating Capacity
+58,871 61,090
+8,313 8,313
+1,648
+1,419
+624
+632
+39,066 39,931
+A3
+Value measures
+A3
+39,613 38,820 36,638 26,713
+45,585
+Equity
+Capital structure
+102,221 96,563 95,580 83,065
+50,651 43,863 36,750 42,625
+152,872 140,426 132,330 125,690
+106,657
+46,224
+152,881
+Total assets
+Current assets
+Non-current assets
+Asset structure
+Value added³
+609
+2,001
+1,031
+90
+4,000
+7.4
+7.5
+7.7
+8.3
+8.3
+8.5
+9.2
+11.1
+8.4
+14.4
+2,139
+2,001
+2,001
+2,001
+Provisions
+Current liabilities
+16,175
+16,975
+14,489
+17,428
+17,069
+Other liabilities and other
+15,784
+18,051
+31,376
+28,601 28,153
+23,631 25,672
+28,880 24,029 21,937
+Financial liabilities
+Provisions
+63,335
+65,027 63,179
+67,129
+69,580
+Non-current liabilities
+2,128
+2,915
+3,862
+3,876
+3,932
+Minority interests without controlling influence
+2,001
+Pretax cost of capital (%)
+ROACE/through 2009 ROCE (%)
+6,273 6,993
+-3,160
+€ in millions
+Summary of Financial Highlights¹
+220 Tables and Explanations
+219
+Winkel
+Schäfer
+Reutersberg
+Kildahl
+Birnbaum
+Teyssen
+Board of Management
+E.ON SE
+Düsseldorf, February 27, 2015
+Internal controls are an integral part of our accounting pro-
+cesses. Guidelines define uniform financial-reporting docu-
+mentation requirements and procedures for the entire E.ON
+Group. We believe that compliance with these rules provides
+sufficient certainty to prevent error or fraud from resulting in
+material misrepresentations in the Consolidated Financial
+Statements, the Combined Group Management Report, and
+the Interim Reports.
+The Board of Management also read and discussed the dis-
+closures in the Combined Group Management Report pursuant
+to Section 289, Paragraph 5, of the German Commercial Code.
+The disclosures contained in the Combined Group Management
+Report on the key features of our internal control and risk
+management system for accounting processes are complete
+and comprehensive.
+To the extent that the Company has agreed to settlement
+payments for Board of Management members in the case of
+a change of control, the purpose of such agreements is to
+preserve the independence of Board of Management members.
+Beyond the disclosures contained in the Combined Group
+Management Report (and legal restrictions such as the exclu-
+sion of voting rights pursuant to Section 136 of the German
+Stock Corporation Act), the Board of Management is not aware
+of any restrictions regarding voting rights or the transfer of
+shares. The Company is not aware of shareholdings in the Com-
+pany's share capital exceeding ten out of one hundred voting
+rights, so that information on such shareholdings is not
+necessary. There is no need to describe shares with special con-
+trol rights (since no such shares have been issued) or special
+restrictions on the control rights of employees' shareholdings
+(since employees who hold shares in the Company's share
+capital exercise their control rights directly, just like other
+shareholders).
+The disclosures pursuant to Section 289, Paragraph 4 and
+Section 315, Paragraph 4 of the German Commercial Code
+contained in the Company's Combined Group Management
+Report are correct and conform with the Board of Manage-
+ment's knowledge. The Board of Management therefore con-
+fines itself to the following statements:
+The Board of Management has read and discussed the dis-
+closures pursuant to Section 289, Paragraph 4 and Section 315,
+Paragraph 4 of the German Commercial Code contained in
+the Combined Group Management Report for the year ended
+December 31, 2014, and issues the following declaration
+regarding these disclosures:
+Explanatory Report of the Board of Management on
+the Disclosures Pursuant to Section 289, Paragraph 4,
+and Section 315, Paragraph 4, as well as Section 289,
+Paragraph 5, of the German Commercial Code
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Sales and earnings
+37,716
+Sales
+2011
+2,091
+2,189
+-2,219
+5,853
+Net income/Net loss attributable to shareholders of E.ON SE
+-3,130
+2,459
+2,613
+-1,861
+6,281
+Net income/Net loss
+4,664
+5,642
+7,012
+5,438
+9,454
+EBIT2
+8,337
+9,191
+9,293 10,771
+13,346
+EBITDA²
+112,954 132,093 119,615 111,556
+92,863
+2014
+2013
+2012
+2010
+46,130
+36,579
+32,513
+14.71
+19.52
+25.11
+29.36
+12.72
+17.68
+18.33
+18.76
+21.86
+-1.64
+1.10
+1.15
+-1.16
+3.07
+Market capitalization 6,8 (€ in billions)
+Dividend payout
+Dividend per share? (€)
+Year-end closing price per share6 (€)
+Twelve-month low per share (€)
+Twelve-month high per share (€)
+Equity5 per share (€)
+Earnings per share attributable to shareholders of E.ON SE (€)
+5.6
+5.2
+6.7
+5.9
+11.4
+15.46
+Cash provided by operating activities of continuing operations as a percentage of sales
+Stock
+21.13
+13.80
+A3
+A2
+Standard & Poor's
+Moody's
+E.ON SE long-term ratings
+27.4
+25.6
+26.9
+31.8
+43.7
+966
+1,145
+2,097
+1,905
+2,858
+0.50
+0.60
+1.10
+1.00
+1.50
+14.20
+13.42
+14.09
+16.67
+22.94
+12.56
+11.94
+12.88
+A3
+4.0
+3.3
+6,610
+10,614
+Cash provided by operating activities of continuing operations
+Cash flow and investments
+Total assets and liabilities
+Other liabilities and other
+Financial liabilities
+125,690
+140,426 132,330
+152,872
+152,881
+27,639
+23,487
+28,523
+35,260
+31,527
+3,883
+4,673
+4,007
+5,885
+3,611
+4,120
+4,353
+4,049
+4,985
+4,950
+35,642
+8,808
+3.5
+6,260
+Cash-effective investments
+3.9
+2.8
+Debt factor
+33,394
+32,218
+35,845
+36,520
+37,821
+Economic net debt (at year-end)
+108
+104
+108
+104
+108
+Long-term capital as a percentage of non-current assets (%)
+21
+28
+28
+26
+30
+Equity ratio (%)
+Financial ratios
+4,633
+7,992
+6,997
+6,524
+8,286
+6,253
+Natural gas
+10.0
+931
+65.8
+64.9
+-0.2
+Sales partners
+28.4 32.8
+5.6
+8.0
+61.3
+75.5
+0.1
+0.6
+-4.1
+-0.4 90.2 93.1
+-4.4 91.3 112.5
+Customer
+segments
+25.1
+21.0
+3.5
+3.6
+2013
+2014 2013
+2014 2013
+2014
+2013
+2014 2013
+Residential and
+32.0
+SME
+19.1
+21.6
+42.9
+47.3
+62.0
+69.1
+I&C
+0.2
+36.3
+5.6
+8.2
+Consolidation
+E.ON Group
+Billion kWh
+Residential and SME
+2014
+2013
+2014
+Other EU Countries
+2013
+2013
+2014
+2013
+2014
+2013
+22.2
+29.2
+2014
+2014
+Germany
+Gas Sales¹
+101.4 122.2
+108.8 112.8
+-4.3
+-4.8 243.5 274.7
+Wholesale market/
+Global
+Commodities
+Total
+Global Commodities
+119.9 136.9
+151.9 173.2
+30.4
+131.8
+36.8
+159.0
+15.6 12.7 62.0
+124.4 125.5 62.0
+65.3 -358.2 -396.1
+65.3 -362.5 -400.9
+492.4 422.2
+735.9 696.9
+¹Adjusted for discontinued operations.
+25.5 26.3 597.2 540.3
+31.1 34.5 597.2 540.3
+71.1
+2014 2013
+2013
+14.2
+14.0
+Global Com-
+modities/out-
+side sources
+14.8
+15.6
+4.7
+5.2
+597.2
+540.3
+Total
+153.5
+175.0
+32.0 35.5
+0.2
+0.2
+1.1
+0.8
+6.3
+597.2
+540.3
+0.5
+135.2 162.2
+2014 2013
+1.3
+2014 2013
+3.5 5.0
+128.8 128.6
+2014 2013 2014 2013 2014 2013
+597.2
+59.2
+4.8
+215.2 245.2
+4.5 -362.6 -400.9
+536.9 469.3
+Jointly owned
+power plants
+13.2
+12.7
+63.0
+540.3
+135.2 162.0 128.6 128.6
+135.7 163.5 132.3 133.6
+4.8
+62.0
+65.3
+-362.6 -400.9
+735.9 696.9
+¹Adjusted for discontinued operations.
+Power Sales¹
+Generation
+-16.2 -17.6
+Renewables
+Germany
+Other EU
+Countries
+Non-EU
+Countries
+Consolidation
+E.ON Group
+Billion kWh
+2014
+Global
+Commodities
+2014 2013
+-2.2
+-8.1
+64.0
+4.5 -362.6 -400.9
+67.5 -362.6 -400.9
+522.7
+752.1 714.5
+455.3
+Station use,
+line loss, etc.
+-1.6
+-2.0
+-1.8
+-1.0
+Power sales
+151.9 173.2
+31.1
+34.5 597.2 540.3
+-3.9 -4.5
+131.8 159.0 124.5 125.5
+-7.8
+-0.9
+89.0
+93.3
+118.2
+Income and expenses that are unusual or infrequent, such as
+book gains or book losses from significant disposals as well
+as restructuring expenses (see EBIT).
+Profit at Risk ("PaR")
+Risk measure that indicates, with a certain degree of confi-
+dence (for example, 95 percent), that changes in market prices
+will not cause a profit margin to fall below expectations
+during the holding period, depending on market liquidity. For
+E.ON's business, the main market prices are those for power,
+gas, coal, and carbon.
+Purchase price allocation
+In a business combination accounted for as a purchase, the
+values at which the acquired company's assets and liabilities
+are recorded in the acquiring company's balance sheet.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Rating
+Standardized performance categories for an issuer's short-
+and long-term debt instruments based on the probability of
+interest payment and full repayment. Ratings provide investors
+and creditors with the transparency they need to compare
+the default risk of various financial investments.
+Return on equity
+Other non-operating earnings
+The right, not the obligation, to buy or sell an underlying
+asset (such as a security or currency) at a specific date at
+a predetermined price from or to a counterparty or seller.
+Buy options are referred to as calls, sell options as puts.
+Option
+Difference between total financial assets (cash and non-
+current securities) and total financial liabilities (debts to
+financial institutions, third parties, and associated companies,
+including effects from currency translation).
+Economic net debt
+Key figure that supplements net financial position with
+pension obligations and asset retirement obligations (less
+prepayments to the Swedish nuclear fund).
+Equity method
+Method for valuing shareholdings in associated companies
+whose assets and liabilities are not fully consolidated. The pro-
+portional share of the company's annual net income (or loss)
+is reflected in the shareholding's book value. This change is
+usually shown in the owning company's income statement.
+225
+226 Glossary of Financial Terms
+Fair value
+The return earned on an equity investment (in this case, E.ON
+stock), calculated after corporate taxes but before an investor's
+individual income taxes.
+The price at which assets, debts, and derivatives pass from a
+willing seller to a willing buyer, each having access to all the
+relevant facts and acting freely.
+Contractual agreement based on an underlying value (reference
+interest rate, securities prices, commodity prices) and a
+nominal amount (foreign currency amount, a certain number
+of stock shares).
+Goodwill
+The value of a subsidiary as disclosed in the parent company's
+consolidated financial statements resulting from the consoli-
+dation of capital (after the elimination of hidden reserves and
+liabilities). It is calculated by offsetting the carrying amount
+of the parent company's investment in the subsidiary against
+the parent company's portion of the subsidiary's equity.
+Impairment test
+Periodic comparison of an asset's book value with its fair value.
+A company must record an impairment charge if it determines
+that an asset's fair value has fallen below its book value. Good-
+will, for example, is tested for impairment on at least an
+annual basis.
+International Financial Reporting Standards ("IFRS")
+Under regulations passed by the European Parliament and
+European Council, capital-market-oriented companies in the
+EU must apply IFRS.
+Net financial position
+Financial derivative
+ROACE
+Acronym for return on average capital employed. A key indi-
+cator for monitoring the performance of E.ON's business,
+ROACE is the ratio between E.ON's EBIT and average capital
+employed. Average capital employed represents the average
+interest-bearing capital tied up in the E.ON Group.
+ROCE
+info@eon.com
+www.eon.com
+Production
+Printing
+Media Relations
+T +49 211-4579-544 or -3570
+presse@eon.com
+F +49 211-4579-501
+Investor Relations
+investorrelations@eon.com
+Creditor Relations
+T +49 211-4579-262
+creditorrelations@eon.com
+Only the German version of this Annual Report is legally binding.
+Jung Produktion, Düsseldorf
+Ernst Kabel Druck GmbH, Hamburg
+T +49 211-4579-345
+Cash-effective capital investments plus debt acquired and
+asset swaps.
+T +49 211-4579-0
+40479 Düsseldorf
+Acronym for return on capital employed. ROCE is the ratio
+between E.ON's EBIT and capital employed. Capital employed
+represents the interest-bearing capital tied up in the E.ON
+Group.
+Syndicated line of credit
+Credit facility extended by two or more banks that is good
+for a stated period of time.
+Underlying net income
+An earnings figure after interest income, income taxes, and
+non-controlling interests that has been adjusted to exclude
+certain extraordinary effects. The adjustments include effects
+from the marking to market of derivatives, book gains and
+book losses on disposals, restructuring expenses, and other
+non-operating income and expenses of a non-recurring or
+rare nature (after taxes and non-controlling interests). Under-
+lying net income also excludes income/loss from discontinued
+operations, net.
+Value added
+Key measure of E.ON's financial performance based on residual
+wealth calculated by deducting the cost of capital (debt and
+equity) from operating profit. It is equivalent to the return
+spread (ROACE minus the cost of capital) multiplied by average
+capital employed, which represents the average interest-
+bearing capital tied up in the E.ON Group.
+Germany
+Value at risk ("VaR")
+Working capital
+The difference between a company's current operating assets
+and current operating liabilities.
+227
+228
+Further information
+E.ON SE
+E.ON-Platz 1
+Risk measure that indicates the potential loss that a portfolio
+of investments will not exceed with a certain degree of prob-
+ability (for example, 99 percent) over a certain period of time
+(for example, one day). Due to the correlation of individual
+transactions, the risk faced by a portfolio is lower than the
+sum of the risks of the individual investments it contains.
+Economic investments
+Earnings before interest, taxes, depreciation, and amortization.
+It equals the EBIT figure used by E.ON before depreciation
+and amortization. It is our key earnings figure for purposes of
+internal management control and as an indicator of our busi-
+nesses' long-term earnings power.
+EBITDA
+Wholesale market/Global Commodities² 1,216.9 1,252.9
+Total
+14.7
+1,216.9 1,252.9
+339.4
+471.6
+121.7
+16.8
+148.3
+603.1
+-517.0
+-517.0
+714.6
+616.2
+1,219.3
+¹Adjusted for discontinued operations.
+2E.ON Global Commodities, including the former E.ON Ruhrgas; prior-year figures were adjusted accordingly.
+224 Glossary of Financial Terms
+Actuarial gains and losses
+-653.5
+-653.5 1,161.0
+The actuarial calculation of provisions for pensions is based
+on projections of a number of variables, such as projected
+future salaries and pensions. An actuarial gain or loss is
+recorded when the actual numbers turn out to be different
+from the projections.
+446.4
+107.0
+I&C
+82.5
+109.0
+35.4
+42.5
+117.9
+151.5
+131.5
+Sales partners
+333.4
+0.5
+235.2
+333.4
+Customer segments
+339.4
+471.6
+234.7
+5.5
+Beta factor
+Bond
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Controllable costs
+Our key figure for monitoring operational costs that manage-
+ment can meaningfully influence: the controllable portions
+of the cost of materials (in particular, maintenance costs and
+the costs of goods and services), certain portions of other
+operating income and expenses, and most personnel costs.
+Cost of capital
+Weighted average of the costs of debt and equity financing
+(weighted-average cost of capital: "WACC"). The cost of equity
+is the return expected by an investor in a given stock. The
+cost of debt is based on the cost of corporate debt and bonds.
+The interest on corporate debt is tax-deductible (referred to
+as the tax shield on corporate debt).
+Credit default swap ("CDS")
+Combined Group Management Report
+A credit derivative used to hedge the default risk on loans,
+bonds, and other debt instruments.
+Ratio between economic net debt and EBITDA. Serves as a
+metric for managing E.ON's capital structure.
+Debt issuance program
+Contractual framework and standard documentation for the
+issuance of bonds.
+Discontinued operations
+Businesses or parts of a business that are planned for divest-
+ment or have already been divested. They are subject to
+special disclosure rules.
+EBIT
+Earnings before interest and taxes. The EBIT figure used by
+E.ON is derived from income/loss from continuing operations
+before interest income and income taxes and is adjusted to
+exclude certain extraordinary items, mainly other income and
+expenses of a non-recurring or rare nature (see Other non-
+operating earnings).
+Debt factor
+Indicator of a stock's relative risk. A beta coefficient of more
+than one indicates that a stock has a higher risk than the
+overall market; a beta coefficient of less than one indicates
+that it has a lower risk.
+Strategy and Objectives
+Report of the Supervisory Board
+Debt instrument that gives the holder the right to repayment
+of the bond's face value plus an interest payment. Bonds are
+issued by public entities, credit institutions, and companies
+and are sold through banks. They are a form of medium- and
+long-term debt financing.
+Capital employed
+Represents the interest-bearing capital tied up in the E.ON
+Group. It is equal to a segment's non-current and current
+operating assets less the amount of non-interest-bearing
+available capital. Other equity interests are included at their
+acquisition cost, not their fair value.
+Capital stock
+The aggregate face value of all shares of stock issued by a com-
+pany; entered as a liability in the company's balance sheet.
+Cash flow statement
+Calculation and presentation of the cash a company has
+generated or consumed during a reporting period as a result
+of its operating, investing, and financing activities.
+E.ON Stock
+Cash provided by operating activities
+Commercial paper ("CP")
+Unsecured, short-term debt instruments issued by commercial
+firms and financial institutions. CPs are usually quoted on a
+discounted basis, with repayment at par value.
+Consolidation
+Accounting approach in which a parent company and its affil-
+iates are presented as if they formed a single legal entity. All
+intracompany income and expenses, intracompany accounts
+payable and receivable, and other intracompany transactions
+are offset against each other. Share investments in affiliates
+are offset against their capital stock, as are all intracompany
+credits and debts, since such rights and obligations do not
+exist within a single legal entity. The adding together and con-
+solidation of the remaining items in the annual financial
+statements yields the consolidated balance sheets and the
+consolidated statements of income.
+Contractual trust arrangement ("CTA")
+Model for financing pension obligations under which company
+assets are converted to assets of a pension plan administered
+by an independent trust that is legally separate from the
+company.
+CEO Letter
+Cash provided by, or used for, operating activities of continuing
+operations.
+12,322 12,333
+28.3
+Purchases
+6.1
+0.3
+0.3
+0.3
+0.8
+70.5
+85.5
+Nuclear
+12.3
+11.7
+12.3
+11.7
+Lignite
+0.2
+0.2
+4.7
+3.1
+1.3
+26.5
+Germany
+65.0
+77.8
+5.0
+6.4
+0.5
+1.3
+9.0
+E.ON Group
+2014
+2013
+43.1
+44.4
+2.9
+4.3
+17.9
+2013
+9.2
+10.2
+Hard coal
+11.9
+12.1
+11.9
+12.1
+Other
+1.8
+1.0
+Wind
+0.6
+2.4
+1.7
+Outside Germany
+60.5
+68.9
+21.5
+22.8
+0.7
+0.8
+9.8
+0.1
+29.5
+36.2
+29.5
+36.2
+Natural gas, oil
+16.9
+21.0
+9.6
+2.7
+50.2
+53.0
+69.8
+78.0
+Hydro
+9.6
+9.7
+4.0
+3.5
+0.3
+0.3
+253
+234
+Outside Germany
+23,632 23,865 6,490
+7,831
+1,237
+1,608
+9,928
+1,122 1,078
+9,928 41,287 43,232
+E.ON Group
+40,072 40,943 8,688
+10,106
+226
+224
+1,237
+844
+57
+812
+Other
+1,323 8,419
+6,273 6,993
+8,419 21,672 22,075
+Oil
+1,714 2,028
+1,714 2,028
+Hydro
+2,824
+1,608 9,928 9,928
+2,808
+31
+2,856
+2,839
+Wind
+3,610
+4,179
+3,610 4,179
+33
+60,151
+62,809
+221
+2.9
+4.3
+Hard coal
+17.9
+26.5
+Natural gas, oil
+1.1
+Lignite
+2.6
+0.2
+0.5
+Hydro
+4.7
+6.1
+Wind
+0.3
+2
+Other
+44.4
+Nuclear
+222 Tables and Explanations
+Owned Generation by Energy Source
+Generation
+Renewables
+Billion kWh
+2014
+2013
+43.1
+2014
+2013
+2014
+2013
+Other EU Countries Non-EU Countries
+2014
+2013
+2014
+Germany
+5.0
+59.2
+63.0
+17
+Outside Germany
+48
+47
+81
+18
+78
+100
+100
+184
+14
+1
+1
+100
+100
+3
+1
+Other
+5
+77
+80
+85
+84
+32
+32
+Hydro
+67
+36
+2
+4
+4
+Wind
+45
+41
+6
+33
+65
+「
+Total
+223
+Global
+Generation
+Renewables
+Commodities
+Germany
+Other EU
+Countries
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidation
+Billion kWh
+2014
+2013
+2014 2013 2014 2013
+Owned generation 125.5 146.7
+26.5
+29.2
+E.ON Group
+14
+Consolidated Financial Statements
+Strategy and Objectives
+100
+100
+100
+100
+100
+100
+100
+Combined Group Management Report
+100
+100
+100
+100
+Power Procurement¹
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+100
+13
+Natural gas, oil
+15
+20
+Lignite
+2
+3
+Hard coal
+14
+18
+20
+Natural gas, oil
+2
+40
+38
+Hydro
+18
+21
+18
+1
+1
+30
+Nuclear
+144.7
+159.7
+Total
+125.5
+146.7
+26.5
+29.2
+34
+0.5
+3.5
+5.0
+59.2
+63.0
+215.2
+245.2
+Percentages
+1.3
+28.0
+2
+11
+Nuclear
+10
+8
+6
+5
+Lignite
+6
+35
+4
+16
+4
+4
+Hard coal
+24
+25
+14
+15
+8
+33
+100
+1
+1
+2
+2
+Wind
+1
+1
+100
+Other
+62
+Germany
+52
+53
+19
+22
+22
+60
+Non-EU
+Countries
+Capital stock
+May 7, 2015
+Release of the 2015 Annual Report
+Interim Report: January - March 2016
+2016 Annual Shareholders Meeting
+Interim Report: January - June 2016
+Interim Report: January - September 2016
+2015 Annual Shareholders Meeting
+Interim Report: January - March 2015
+Interim Report: January - June 2015
+Interim Report: January - September 2015
+November 9, 2016
+August 10, 2016
+June 8, 2016
+May 11, 2016
+March 9, 2016
+November 11, 2015
+August 12, 2015
+May 7, 2015
+Financial Calendar
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+15
+Combined Group Management Report
+Consolidated Financial Statements
+1/1/13 4/1/13 7/1/13 10/1/13 1/1/14 4/1/14 7/1/14 10/1/14
+Strategy and Objectives
+■ Phase-two allowances
+7.50
+2.50
+¹For next-year delivery.
+5.00
+1/1/13 4/1/13 7/1/13 10/1/13 1/1/14 4/1/14 7/1/14 10/1/14
+Supervisory Board and Board of Management
+Tables and Explanations
+€/metric ton
+Carbon Allowance Price Movements
+in Europe
+2Spot delivery (30-day average).
+27
+-5
+Clean Dark and Spark Spreads in
+Germany
+€/
+MWh
+Brent crude oil front month ($/bbl)
+NBP gas front month (€/MWh)
+Crude Oil, Coal, and Natural Gas Price Movements in E.ON's Core Markets
+Throughout the year, U.K. power prices reflected their signifi-
+cant dependence on gas prices. Consequently, prices for
+next-year delivery tracked the downward trend in gas prices
+120
+$/t
+$/bbl
+Prices in the European zone of the Russian power market rose
+significantly in the first three quarters of the year. This trend
+was reversed in the fourth quarter as the seasonal increase in
+demand and a decline in hydro output were more than offset
+by an increase in nuclear and CHP output. Prices in the Siberian
+zone increased substantially in the second half of the year,
+particularly in the fourth quarter, owing to very low hydro out-
+put and higher exports to the European zone made possible by
+improvements in the interconnection between the two zones.
+The average spot price on the Nordic power market was at its
+lowest level in seven years, primarily because of low fuel
+prices, the development of German power prices, and above-
+average temperatures. As a result, the region remained a net
+exporter of power to adjacent markets. Reservoir levels barely
+deviated from their historic average. As with spot prices, prices
+for next-year delivery displayed a marked downward trend.
+in the first half of the year, the stabilization of gas prices in
+the third quarter, and their renewed decline in the fourth
+quarter, which resulted from mild winter weather.
+1/1/13 4/1/13 7/1/13 10/1/13 1/1/14 4/1/14 7/1/14 10/1/14
+Clean spark spread (front year)
+- Clean dark spread (front year)
+50
+0
+5
+10
+€/MWh
+The prvious year's downward price trend for German baseload
+power for next-year delivery continued in 2014. The ongoing
+increase in installed renewables capacity and a weak forecast
+for coal prices remained the key factors. After declining
+steadily in the first half of the year, prices were very volatile
+in the second half, mainly because of the development of
+underlying fuel prices and increasing uncertainty about poten-
+tial regulatory changes.
+30
+Coal prices also continued to decline almost unchecked. As in
+2013, the market suffered from oversupply and weak demand,
+which put downward pressure on prices, primarily in the first
+quarter. Uncertainty regarding Columbia's production was
+a brief stabilizing factor at the beginning of the year. Above-
+average temperatures reduced import demand in the Atlantic
+basin throughout the winter. After a mostly uneventful summer,
+coal prices began to move again in the fourth quarter, sliding
+to a new four-year low in response to the collapse of oil prices
+and the strengthening of the U.S. dollar against the currencies
+of all major coal-exporting countries.
+20
+25
+The Russian Federation generated 1,046.3 billion kWh of elec-
+tricity, a slight increase year-on-year. It generated 1,024.9 bil-
+lion kWh in its integrated power system (which does not include
+isolated systems), which also represents a slight increase.
+Power consumption in the Russian Federation as a whole rose
+by 0.4 percent to 1,035.2 billion kWh.
+France's electricity consumption fell by 6 percent to 465.3 bil-
+lion kWh because of weather factors along with weak economic
+growth and energy-efficiency measures.
+Hungary's electricity consumption rose by 4 percent to 35 bil-
+lion kWh owing to higher industrial demand. Driven by higher
+average temperatures, a reduction in gas-fired generation, and
+energy-saving measures, Hungary's gas consumption declined
+by 13 percent to 11,641 million cubic meters.
+Northern Europe consumed 375 billion kWh of electricity, a
+year-on-year decline of 7 billion kWh, because of higher average
+temperatures and stagnating industrial demand. It recorded
+net electricity exports to surrounding countries of about
+10 billion kWh compared with net imports of about 2 billion kWh
+in 2013 reflecting the increase in hydro output in 2014.
+Electricity consumption in England, Scotland, and Wales
+declined by 5 percent, from 305 to 290 billion kWh. Gas con-
+sumption (excluding power stations) declined from 588 to
+506 billion kWh owing to higher temperatures in 2014 relative
+to 2013. Ongoing energy-efficiency measures and more cost-
+conscious energy use also served to reduce consumption.
+100.0
+26
+100.0
+0.6
+10.4
+11.1
+7.7
+8.1
+11.9
+12.2
+0.7
+Business Report
+Energy Prices
+Five main factors drove Europe's electricity and natural gas
+markets and Russia's electricity market in 2014:
+10
+Prices for EU carbon allowances ("EUAS") under the European
+Emissions Trading Scheme fluctuated substantially at the start
+of the year amid speculative trading. The two main factors
+were the agreement reached by policymakers on a directive
+to reduce the number of EUAs in circulation through a mech-
+anism known as backloading and the implementation of this
+directive in March. Starting in May, backloading began to
+have the desired effect, resulting in a steady increase in EUA
+prices through December. The policy debate about a proposed
+market stability reserve (a long-term solution for addressing
+the oversupply of EUAS) became an important price driver
+in the fourth quarter.
+Europe's gas market saw a relatively high degree of price vol-
+atility and generally declining price levels in 2014. The latter
+trend resulted from mild weather in the first quarter and
+declining oil prices in the second half of the year. In addition,
+in the fourth quarter the LNG spot market displayed the first
+signs of oversupply, which were brought on by high inventory
+levels at gas storage facilities in East Asia and weak industrial
+demand worldwide. Prior to that, prices had stabilized tem-
+porarily in the summer months as the anticipated oversupply
+had not yet materialized despite the abundant storage sit-
+uation. Prices for next-year delivery fluctuated dramatically
+at times in response to news about developments in the
+Ukraine crisis.
+_API#2 coal index front month ($/metric ton)
+➡ TTF gas front month (€/MWh)
+U.K. baseload¹ -Nord Pool baseload1
+Russia (Europe)² -EEX baseload1
+Russia (Siberia)²
+€/MWh
+in E.ON's Core Markets
+Wholesale Electricity Price Movements
+Oil prices in particular displayed a varied pattern in 2014. Prices
+were relatively stable in the first half of the year because the
+downward pressure from production increases in non-OPEC
+countries was more than offset by uncertainty regarding the
+crisis in the Middle East. In the second half of the year, prices
+then fell by 40 percent to a five-year low in response to weaker
+global demand, further production increases, and the resump-
+tion of production in Libya. The situation was exacerbated
+by the fact that OPEC, or more precisely Saudi Arabia, refused
+to play its historic role of price-stabilizer and because Russia
+and Iraq ratcheted up their production despite lower prices.
+The two main factors that influenced commodity markets
+throughout the year were Europe's mild weather and the
+resulting decline in prices for nearly all types of fuels. The sharp
+decline in energy prices also affected the rate of inflation,
+which in December 2014 was negative for the first time since
+October 2009. The U.S. dollar continued to appreciate against
+the euro, and the value of the Russian ruble fell dramatically.
+Concerns about the potential geopolitical risks of the spread
+of the Ukraine crisis did not have a lasting impact on prices.
+the expansion of renewables capacity.
+macroeconomic and political developments
+weather
+international commodity prices (especially oil, gas, coal,
+and carbon-allowance prices)
+•
+•
+•
+•
+BN WEST
+- Monthly German gas import prices (€/MWh)
+NCG gas front month (EEX) (€/MWh)
+25
+45 M
+25,632
+26,366
+Natural gas
+4,970
+4,974
+Hydro
+12,212
+Hard coal
+Wind
+11,189
+Oil
+2,819
+2,429
+2,428
+Lignite
+24,211
+25,114
+Natural gas
+8,257
+8,257
+2,831
+4,397
+4,727
+10
+0 5,000 10,000 15,000 20,000 25,000
+Additional information in Tables and Explanations on page 220 et seq.
+Several categories of our attributable generating capacity-
+nuclear, lignite, oil, hydro, biomass, and other-were essentially
+unchanged. The decline of 1,023 MW in hard coal reflects, in
+particular, the scheduled decommissioning of three generating
+units at Datteln power station in Germany and the closure
+of three units in France. Our attributable gas-fired capacity
+declined by 903 MW owing to the closure of three gas turbines,
+1,154
+1,110
+Other
+4,382
+3,823
+Wind
+4,921
+4,849
+Hydro
+3,132
+2,819
+5,000 10,000 15,000 20,000 25,000
+Additional information in Tables and Explanations on page 220 et seq.
+0
+1,226
+1,182
+Other
+Oil
+Nuclear
+11,249
+12,272
+Hard coal
+1,793
+1,792
+100
+110
+10/1/14
+7/1/14
+4/1/14
+1/1/14
+10/1/13
+7/1/13
+4/1/13
+1/1/13
+20
+20
+13.0
+30
+35
+40
+40
+90
+50
+90
+70
+Lignite
+8,202
+8,202
+Nuclear
+Germany 2014 ■ Outside Germany 2014
+Germany 2013 -Outside Germany 2013
+MW
+Fully Consolidated Generating Capacity
+Our fully consolidated generating capacity declined by 2,658 MW,
+largely for the reasons just described. Unlike our attributable
+capacity, our consolidated gas capacity was just 734 MW lower
+due to the consolidation of a gas-fired generating unit in Italy.
+Our fully consolidated oil capacity declined by 313 MW owing to
+the closure of two oil-fired units in Italy. Our fully consolidated
+hydro capacity declined by 72 MW, primarily because of the
+divestment of small hydroelectric plants in Germany. The sale
+of stakes in wind farms in the United States and Denmark
+decreased our fully consolidated wind capacity by 559 MW.
+one each in Germany, Slovakia, and the Netherlands. Our build-
+and-sell strategy reduced our attributable wind capacity by
+330 MW.
+- Germany 2014 - Outside Germany 2014
+Germany 2013 Outside Germany 2013
+MW
+Attributable Generating Capacity
+(Ownership Perspective)
+The E.ON Group's attributable generating capacity (that is, the
+capacity that reflects the percentage of E.ON's ownership
+stake in an asset) declined by 4 percent, from 61,090 MW at
+year-end 2013 to 58,871 MW at year-end 2014. The E.ON Group's
+fully consolidated generating capacity also declined by 4 per-
+cent, from 62,809 to 60,151 MW.
+Generating Capacity
+Business Performance
+28 Business Report
+60
+60
+80
+12.6
+the availability of hydroelectricity in Scandinavia
+20.4
+the environmental award presented by Studien- und
+Fördergesellschaft der Schleswig-Holsteinischen Wirt-
+schaft e.V., a Schleswig-Holstein business association
+an audience award called "Excellent places in the land
+of ideas."
+the coveted innovation award of the "Germany-land of
+ideas" initiative
+•
+22.6
+•
+E.ON received three awards for the first smart power grid in
+northern Germany, operated on Pellworm island:
+Since entering service in August 2013, E.ON's power-to-gas
+demonstration plant at Falkenhagen, Germany, has injected
+more than 2 million kWh of regenerative hydrogen into the
+regional gas transmission system, enough to meet the gas
+needs of about 150 households.
+Energy Storage
+In 2014 we started a project with several partners (RWTH
+Aachen University, E.ON Energy Research Center, IAEW, EXIDE,
+and SMA) to plan and build a large-scale modular battery
+storage system called M5BAT in Aachen. M5BAT will be the first
+system of its kind in the world. E.ON is also responsible for
+developing and testing marketing strategies for future energy
+storage products.
+After previously outsourcing data analysis projects, in 2014 we
+established a Data Analytics Laboratory. It will enable trained
+experts across E.ON to explore the power of analytics and to
+combine different sets of data in a dedicated environment.
+We tested radio-controlled drones equipped with a high-defi-
+nition camera or other sensing devices to inspect power lines,
+power plants, and wind turbines. Drones offer a less time-
+consuming and safer method for inspecting grid components
+that cannot be seen clearly from the ground. They also can be
+used to inspect specific points on overhead lines, reducing the
+need for helicopter surveys and making surveys more flexible.
+Distribution Networks
+is overseen by the U.K. Carbon Trust's Offshore Wind Accelerator,
+a leading research and development program of which E.ON
+is a member. The new installation technique uses vibration
+instead of conventional pile-driving.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Digitalization
+Power Generation
+We continually develop and refine advanced condition moni-
+toring ("ACM") to preserve the production capacity of our
+combined-cycle gas turbines and to improve their reliability,
+operational flexibility, and efficiency. In 2014 we identified
+new ACM techniques to do things like detect cracks in gas
+turbine blades. We also tested new hardware; one example is
+a device that enables us to use current and voltage analysis
+to monitor the vibration of inaccessible components. Another
+focus of our ACM effort is to optimize maintenance strategies.
+For example, in 2014 we tested software to determine when
+it makes the most financial sense to conduct maintenance
+based on plant lifespan.
+University Support
+Sweden
+Euro zone
+Spain
+-0.4
+Italy
+France
+Germany
+2014 GDP Growth in Real Terms
+Annual change in percent
+Dampened by a decline in investment activity and high infla-
+tion, Brazil's economy was not able to repeat the sometimes
+high growth rates of years past. Although Russia faced a
+number of adverse factors—including a reduction in oil prices,
+capital flight, and a decline in investment activity—it managed
+to avoid sliding into recession in 2014. Generally weak domestic
+demand and above all a decline in investment activity pre-
+vented Turkey's economy from repeating the high growth rates
+of the past.
+weak macroeconomic environment. After two years of reces-
+sion the Czech economy began to grow again; after two
+years of weak growth the Polish economy nearly doubled its
+growth rate.
+Germany's moderate economic growth was driven primarily by
+stable consumption. Domestic demand was supported in
+particular by a stable labor market. Italy had its third straight
+year of recession in 2014, although the rate of economic con-
+traction was significantly slower. The other countries of South-
+ern Europe emerged from recession and returned to growth.
+Economic performance varied among EU member states in
+Northern Europe in 2014. Finland experienced its third year of
+recession, although here too the rate of contraction slowed.
+Sweden's GDP expanded owing to consumption and exports.
+The economic performance of Eastern European member
+states was generally much better than in the rest of the EU, in
+part because domestic demand remained robust despite a
+The euro zone's economy was almost stagnant, held back by
+investor uncertainty, high unemployment, and deflationary
+tendencies. Some support was provided by continued expansive
+monetary policy and less pressure to consolidate fiscal policy.
+Loose monetary policy fueled robust consumer demand in the
+United States and the United Kingdom, resulting in additional
+demand for investment goods.
+In 2014 the global economy continued to grow at a moderate
+pace. According to figures from the OECD, global gross domestic
+product ("GDP") grew in real terms by 3.3 percent, slightly
+above the figure for 2013. However, growth in recent years has
+lagged 1 percentage point behind the long-term average
+growth rate for the period 2000-2007 that led up to the finan-
+cial crisis. Global trade expanded by 3 percent in 2014, which
+was also below the long-term average of years past. The OECD
+attributes the global economy's persistent sluggishness in part
+to continued uncertainty in many parts of the world. Despite
+this broader trend, economic growth varied by country.
+Macroeconomic Environment
+Macroeconomic and Industry Environment
+22 Business Report
+21
+Our T&I activities include partnering with universities and
+research institutes to conduct research projects in a variety
+of areas. Our flagship partnership is with the E.ON Energy
+Research Center at RWTH Aachen University in Germany.
+Report of the Supervisory Board
+United
+Kingdom
+CEO Letter
+A new large-scale experiment got under way at the National
+Renewable Energy Center near Newcastle upon Tyne in the
+United Kingdom. It will study how underwater noise from wind-
+farm construction affects different marine animals. World-class
+experts in acoustics and marine biology are using a simulated
+seabed to help E.ON to improve the underwater noise models
+used to predict how marine animals react to the noise made
+by pile-driving, a common method of installing the foundations
+of turbine towers in offshore wind farms.
+Renewables generation: increase the cost-effectiveness
+of existing wind, solar, and hydro assets and study new
+renewables technologies
+Retail and end-customer solutions: develop new business
+models for distributed-energy supply, energy efficiency,
+and mobility
+•
+•
+•
+•
+•
+•
+Infrastructure and distribution: develop energy-storage
+and energy-distribution solutions for an increasingly
+decentralized and volatile generation system
+The megatrend of digitalization along with dynamically
+changing energy markets are fundamentally transforming the
+energy supply landscape. E.ON customers and other stake-
+holders increasingly expect digital communications, products,
+and services. Each step of this transformation creates new
+challenges but also new opportunities. For E.ON to help the
+transformation succeed, we need innovative technologies
+and solutions. In 2014 E.ON Innovation Centers and one Incu-
+bator, which were embedded in our existing businesses and
+steered by the T&I department at Group Management, coor-
+dinated activities in their respective technology area across
+our company:
+Technology and Innovation
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Despite a difficult business environment, we maintained our
+technology and innovation ("T&I") activities at a high level of
+intensity in 2014, while focusing increasingly on new offerings
+for end-customers and on innovative partnerships. About
+250 E.ON employees were directly involved in research and
+development projects in 2014.
+Energy intelligence and energy systems: study potentially
+fundamental changes to energy systems and the role of
+data in the new energy world
+Conventional generation: improve our existing generation
+fleet and optimize future investments
+Renewables
+We continued to test energy management systems and grid
+technologies of the future in Hyllie, a sustainable district of
+Malmö, Sweden, that is gaining international attention as a
+model for how communities can generate, control, and make
+the best use of their energy. E.ON is playing a key role in Hyllie's
+development and is committed to supplying 100 percent
+renewable or recycled energy to the district by 2020, by which
+time there will be 12,000 people living and working there.
+E.ON conducted its biggest-ever product launch in Sweden, giving
+away 120,000 smart meters and E.ON-developed smart tools
+to customers. The smart tool, which can be operated using a
+mobile phone app, empowers customers to reduce their energy
+consumption. It is a step into the future, providing us with a
+digital platform for completely new ways of doing business.
+Sample Projects from 2014
+Customer Solutions
+Leeo develops and provides smart home solutions con-
+sisting of simple and intelligent plug-and-play devices
+and related data services. The company, which is based in
+San Francisco, develops products and services for itself
+as well as select enterprise partners.
+Thermondo is a Berlin-based start-up that helps residen-
+tial customers purchase an efficient and environmentally
+friendly heating unit. Customers can use Thermondo's
+innovative online platform and proprietary IT infrastruc-
+ture to compare a variety of heating-unit manufacturers
+and technologies quickly, easily, and cost-effectively. They
+can then choose and purchase the one that best fits their
+needs. The selected unit is installed by certified technicians
+from Thermondo. The company combines the speed and
+wide product range of an internet company with the out-
+standing workmanship of experienced HVAC technicians.
+QBotix builds intelligent, mobile robots for solar arrays
+with dual-axis tracking. QBotix's system could deliver cost
+savings up to 20 percent on solar projects, significantly
+improving the economics of our solar development pipe-
+line. QBotix is based in Menlo Park, California.
+Sungevity, a global provider of solar-energy solutions,
+focuses on making solar power easy and affordable for
+homeowners. As more customer-centric residential solar
+solutions come on market, we want to provide our custom-
+ers with the best solutions available. We are first deploying
+Sungevity's proprietary remote solar design technology
+in the Netherlands, where homeowners can use it to sig-
+nificantly reduce their electricity bills. Sungevity is based
+in Oakland, California.
+20 Corporate Profile
+19
+4
+AutoGrid brings the power of big data, predictive analytics,
+and internet-scale computational techniques to the pro-
+duction and consumption of electricity. Serving power
+producers of all sizes, grid operators, energy service com-
+panies, and end-users, AutoGrid develops and markets
+services that both help lower costs and improve the reli-
+ability of the electricity supply chain. AutoGrid is based
+in Redwood Shores, California.
+•
+E.ON made the following venture-capital investments in 2014:
+In addition, E.ON opened an office in San Francisco in Septem-
+ber 2014. The purpose is to be an active investor in Silicon
+Valley and to make the innovative potential of American start-
+ups available to E.ON customers. Our presence will enhance
+our ability to identify interesting business models early and
+to forge promising partnerships.
+We select new businesses that offer the best opportunities for
+partnerships, commercialization, and equity investments. Our
+investments focus on strategic technologies and business
+models that enhance our ability to lead the move to distributed,
+sustainable, and innovative energy offerings. These arrange-
+ments benefit new technology companies and E.ON, since we
+gain access to their innovations and have a share in the value
+growth. Cleantech Group-developer of a market intelligence
+platform for environmentally friendly technologies, products,
+and services-conferred two awards on us in 2014: European
+Cleantech Corporation of the Year and Corporate Investor of
+the Year.
+We support our effort to develop customer-centric and inno-
+vative technologies and business models by forging strategic
+partnerships with venture-capital funds. Our aim is to identify
+promising energy technologies of the future that will enhance
+our palette of offerings for our millions of customers around
+Europe and will make us a pacesetter in the operation of smart
+energy systems.
+Strategic Co-Investments
+Incubator: conduct trials of cutting-edge, typically pre-
+market products under real-life conditions with a small
+group of customers.
+E.ON entered into a partnership with other developers and
+operators to validate a new technique for installing large
+monopiles in an effort to reduce costs, risks, and noise in future
+offshore wind farms. The demonstration project, which is
+being conducted off Germany's North Sea coast near Cuxhaven,
+USA
+•
+0.4
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The U.K. Competition Market Authority is conducting an
+investigation of the state of competition in the power and gas
+retail market. It is expected to issue its recommendations in
+the fourth quarter of 2015 at the earliest.
+The U.K. government is currently reforming the country's
+wholesale power market with the aim of improving the invest-
+ment climate for low-carbon technologies and ensuring supply
+security. The introduction of feed-in tariffs is intended to pro-
+vide greater certainty of revenues for new nuclear capacity,
+new renewables capacity, and carbon capture and storage.
+The introduction of a capacity market is intended to ensure
+supply security. The first capacity auction, for the 2018/2019
+delivery year, was held in December 2014. Contracts for a total
+of about 49.2 GW of capacity at a clearing price of £19.40
+per kW per year were awarded. The contracts have different
+durations depending on whether they are for new plants,
+existing plants, refurbished plants, or demand-side response.
+United Kingdom
+Turkey took more steps to set up EPIAŞ, its new energy
+exchange, which will replace and integrate PMUM, the coun-
+try's previous energy marketplace. The purpose of EPIAŞ is
+to help Turkey expand its role as an energy hub between the
+EU and energy-rich countries of the Middle East and the
+Caspian Sea region.
+In 2014 Turkey continued liberalizing its energy market. The
+privatization of Turkey's 21 regional power distributors and
+energy retailers is completed. Its generation market continues
+to be privatized.
+Strategy and Objectives
+Turkey
+Sweden
+There were several noteworthy regulatory developments
+in Russia. The government issued new ordinances for power
+stations aimed at further enhancing the security of the
+country's power and heat supply. The Federal Tariff Service
+approved prices for power and generating capacity for 2015.
+It also established price caps for 2015 for two zones of the
+country's power system. There were also procedural changes
+to capacity auctions; these included adjustments to the
+treatment of unavailable capacity. The political crisis between
+Ukraine and Russia and the EU sanctions against Russia
+did not lead to any adverse developments in Russia's energy-
+policy environment.
+Russia
+In the autumn the German government adopted a Climate
+Action Program. Its purpose is to enable Germany to reach its
+climate-protection targets for 2020. It includes additional
+measures (beyond those already in place) to achieve further
+reductions in carbon emissions in power generation. These
+measures will be announced in 2015.
+The energy-policy debate in Germany in the first half of 2014
+centered around the reform of renewables support schemes.
+These changes will affect numerous E.ON operations. The new
+rules will likely have a generally positive effect on our offshore
+wind and hydro operations and could create new business
+opportunities for energy services. We anticipate adverse con-
+sequences for new business relating to biomethane.
+The energy-policy debate in Germany in 2014 again focused
+primarily on the implementation of the energy strategy known
+as the Energiewende: the transformation of the country's
+energy system. Key topics of discussion included renewables
+subsidies, renewables' ability to assume market and system
+responsibility, possible solutions for stabilizing the reliability
+of the power supply, particularly with regard to conventional
+generating capacity. The government aims to enhance supply
+security through more regulatory intervention: over the medium
+term, it intends to design capacity-market mechanisms that
+will create sufficient incentives to keep existing generating
+capacity in the market and to build new capacity. As part of
+this effort, the German Federal Minister for Economic Affairs
+published a number of studies and, in the autumn, an Elec-
+tricity Market Green Paper, which initiated a broad-based dis-
+cussion of the future design of Germany's electricity market.
+Germany
+24 Business Report
+Sweden's minority government reached an agreement with
+certain opposition parties, avoiding the need for new elections,
+which had been scheduled for March. The government is
+expected to pass a new budget in May 2015. This budget could
+raise the taxes on nuclear power stations. Sweden and other
+member states must transpose the EU water framework
+directive into national law by 2015, which could limit the out-
+put of Sweden's hydroelectric stations.
+23
+Combined Group Management Report
+Supervisory Board and Board of Management
+Tables and Explanations
+33.7
+35.0
+2013
+2014
+Source: AGEB.
+Other (including net power imports/exports)
+Total
+Renewables
+Natural gas
+Hard coal
+Lignite
+Nuclear
+Consolidated Financial Statements
+Petroleum
+Primary Energy Consumption in
+Germany by Energy Source
+pumped storage) declined by 9 percent, whereas wind gener-
+ation rose by just over 1 percent. Solar generation increased
+by just under 14 percent. Together, wind and solar generation
+rose by 3.3 percent.
+Renewables output in Germany rose by 1.4 percent to 49.4 MTCE.
+Renewables' share of primary energy consumption increased
+from 10.4 percent to 11.1 percent. Hydro generation (excluding
+Germany's petroleum consumption declined by 1.3 percent to
+156.2 MTCE, its natural gas consumption by about 14 percent
+to 91.2 MTCE. Less natural gas was used for both space heating
+and power generation. Consumption of hard coal fell by
+7.9 percent to 56.2 MTCE, in part because of the increase in
+renewables output. Consumption of hard coal at cogeneration
+plants declined by 11.7 percent to 36.9 MTCE. Consumption of
+lignite, which is used almost exclusively for power generation,
+decreased by 2.3 percent to 54 MTCE. Nuclear production
+declined by 0.4 percent to 36.1 MTCE.
+OECD
+Energy Industry
+There was more discussion in the United States about legis-
+lation that takes a long-term approach to climate protection.
+This legislation could include new regulations aimed at reduc-
+ing specific GHG emissions of power stations by 30 percent
+by 2030. Existing federal policies to support renewables have
+made the United States a global leader in wind power. These
+policies include production tax credits, which were extended
+for another year to support wind farms whose construction
+began in 2014. Investment tax credits for solar energy are in
+place through 2016, after which they will be substantially
+reduced. In addition, many states have established programs
+that set mandatory targets for renewables in their power
+markets, which has resulted in trading in green-power certifi-
+cates at a regional level.
+USA
+Percentages
+France's capacity market is taking more precise shape. Start-
+ing in 2016/2017, utilities will be required to ensure that they
+have sufficient capacity certificates to meet their peakload
+obligations. As part of this process, all power plants in France
+will be certified by their network operator and all will partici-
+pate in the capacity market, which will be technology-neutral.
+Existing and new capacity will receive the same compensation,
+which will be set by a market-based mechanism, not by regu-
+lated tariffs. Consumers with flexible load can also participate
+in the capacity market, which gives it a demand-side com-
+ponent. However, the process of establishing the capacity
+market is behind schedule.
+According to preliminary figures from AGEB, an energy-industry
+working group, Germany consumed 446.5 million metric tons
+of coal equivalent ("MTCE") in 2014, 4.8 percent less than in
+2013. Mild weather was the main factor. Consumption of all
+fossil fuels declined, whereas renewables production increased.
+AGEB therefore expects Germany's energy-related carbon emis-
+sions for 2014 to decline by just over 5 percent year on year.
+About half of this reduction is attributable to power generation.
+A number of significant financial market regulations were dis-
+cussed in 2014. Particularly noteworthy were the consultations
+on different aspects of the Market in Financial Instruments
+Directive ("MiFID II"). Nevertheless, a not inconsiderable degree
+of uncertainty remains regarding several definitions and
+technical criteria. MiFID II is supposed to take effect in 2017.
+3.0 4.0
+2.0
+1.0
+0
+-1.0
+-2.0
+3.0
+Turkey
+3.0
+2.2
+2.1
+1.8
+1.3
+1.5
+0.8
+0.3
+Russian
+Federation
+France
+Brazil
+40
+Source: OECD, 2014.
+0.3
+CEO Letter
+It is anticipated that in 2015 this Commission will devote more
+attention than previous commissions to issues such as capacity
+market designs and the reliability of the electricity supply.
+auction volume. In January the European Commission put for-
+ward a legislative proposal for establishing a market stability
+reserve designed to rebalance supply and demand in the
+carbon market over the medium term; this proposal is being
+debated by the newly elected European Parliament and by
+the member states. In January the Commission also put forward
+the Framework for Climate and Energy Policies up to 2030,
+which was approved in late October by the European Council,
+which consists of the heads of state and government. The
+framework sets a binding target of reducing GHG emissions
+by at least 40 percent by 2030 compared with 1990. It also sets
+non-binding targets of at least 27 percent for renewables'
+share of energy used and for the increase in energy efficiency.
+The Commission's task for 2015 is to transform these proposals
+into draft legislation.
+Two key subjects of Europe's energy-policy debate in 2014 were
+the reform of the EU Emissions Trading Scheme and the future
+direction of European energy and climate policy. In 2014 it was
+decided to temporarily withhold a certain number of emission
+allowances, thereby beginning the process of reducing the
+Europe
+Although in most of the countries of this region there was
+little change in the regulatory environment in 2014, there
+were examples of regulatory intervention such as price mora-
+toriums and, in Hungary, of legislatively mandated reductions
+in end-customer tariffs.
+In 2014 Brazil continued to use the tender process for award-
+ing power purchase agreements for new hydro, coal, gas,
+biomass, solar, and wind capacity. In part due to the drought-
+induced fragility of Brazil's power supply, the main focus of
+its energy policy continues to be on achieving a reasonable
+balance between price stability and an attractive investment
+environment for new generating capacity in order to ensure
+a high degree of supply reliability.
+Brazil
+The Netherlands' National Energy Agreement, which was signed
+in 2013, could not be put in place because of issues raised by
+the country's regulatory agency. Belgian energy policy focused
+on aspects of supply security in view of a looming shortage
+of generating capacity. Belgium has in place a strategic reserve
+mechanism, in which E.ON participates.
+Benelux
+The 20th United Nations climate change conference took place
+in Lima, Peru, in December 2014. Progress was made on some
+of the details of an international climate treaty. Agreement on
+a new treaty had not been expected. However, this time there
+was greater optimism that a treaty will be signed at the next
+conference, which will be held in Paris at the end of 2015. An
+important step in that direction would be the announcement,
+at the beginning of 2015, of national targets for reducing green-
+house gas ("GHG") emissions. Prior to the Lima conference,
+the International Energy Agency published its World Energy
+Outlook 2014. Among its predictions is that global energy
+consumption will continue to rise.
+Energy Policy and Regulatory Environment
+International
+Central Eastern Europe
+Consolidated Financial Statements
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Supervisory Board and Board of Management
+Tables and Explanations
+Other/Consolidation
+65
+129
+¹Adjusted for extraordinary effects.
+709
+814
+Fossil
+¹Adjusted for extraordinary effects.
+967
+1,085
+1,240
+-10
+-13
+2,215
+-15
+Total
+Nuclear's EBITDA increased by about €171 million, owing mainly
+to lower expenditures for the nuclear-fuel tax in Germany.
+One factor was the planned early decommissioning of Grafen-
+rheinfeld nuclear power station in May 2015, which resulted
+in no new fuel elements being loaded. Consequently, no nuclear-
+fuel tax was levied for Grafenrheinfeld in 2014.
+Report of the Supervisory Board
+1,411
+CEO Letter
+Wind/Solar/Other's EBITDA rose by 20 percent owing to our
+build-and-sell strategy.
+EBITDA at Hydro declined by 13 percent to €677 million. Earn-
+ings were lower in Italy due to lower prices and slightly lower
+sales volume, in Germany due to the reduction in generating
+capacity and lower water flow, in Spain due to regulatory
+effects, and in Sweden due to adverse price and currency-
+translation effects, despite a slight increase in sales volume.
+Fossil's EBITDA rose by €105 million, primarily because of the
+reversal of provisions in conjunction with water-usage fees
+for gas-fired power plants in Italy and the delivery of planned
+cost-cutting measures. EBITDA rose in the United Kingdom
+1,936
+1,201
+1,017
+-13
+Nuclear
+€ in millions
+1,044
+E.ON Stock
+EBIT¹
+Generation
+€ in millions
+Hydro
+2014
+2013
+2014
+2013
+677
+780
+551
+657
+EBITDA1
+EBIT¹
+Wind/Solar/Other
+823
+684
+493
+357
+EBITDA¹
+2014
+2013
+2014
+2013
+Total
+1,500
+1,464
+1,014
+Strategy and Objectives
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+1,667
+1,184
+2,387
+1,846
+Total
+67
+Total
+132
+137
+Infrastructure/Other
+324
+231
+402
+321
+87
+Non-regulated/Other
+21
+-75
+Renewables
+Business Report
+38
+37
+EBITDA at Non-regulated/Other was €81 million below the
+prior-year figure. Negative factors included the loss of earnings
+streams due to the divestment of a majority stake in E.ON
+Energy from Waste and mild weather (including relative to the
+cold winter of the prior year), which had a particularly adverse
+impact on the sales and heat business.
+Most of the €460 million decline in EBITDA at Distribution
+Networks is attributable to the divestment of three regional
+distribution companies in 2013. The new regulation period
+for power started in 2014, which also had an adverse impact
+on earnings, since efficiency enhancements achieved during
+the previous period were passed through to our customers in
+the form of lower network fees. In addition, the earnings com-
+ponent for grid expansion in accordance with the Renewable
+Energy Law was lower than in the prior year.
+311
+EBITDA at Exploration & Production increased by 6 percent,
+from €1,070 million to €1,136 million. The principal reason was
+that despite lower average achieved prices—production
+Infrastructure/Other's EBITDA was €50 million above the
+prior-year level, primarily because of higher equity earnings
+from our stake in Nord Stream.
+Power and Gas's EBITDA declined by €321 million, mainly
+because of positive earnings effects recorded in the prior-year
+period on the exercise of option rights in carbon-allowance
+trading and the absence of earnings streams from the gas
+business in Hungary sold in September 2013. Lower achieved
+power prices constituted another adverse factor.
+Coal/Oil/Freight/LNG's EBITDA was €19 million below the
+prior-year figure, in particular because of lower earnings in
+the coal and freight portfolios, where a deteriorated market
+environment led to narrower margins.
+¹Adjusted for extraordinary effects.
+¹Adjusted for extraordinary effects.
+192
+Exploration & Production
+77
+-236
+176
+2014
+€ in millions
+EBIT¹
+EBITDA¹
+EBIT¹
+EBITDA¹
+2013
+Germany
+EBITDA at the Germany regional unit declined by €541 million
+to €1,846 million.
+Germany
+was higher at our North Sea fields, primarily at Skarv, Babbage,
+Rita, Huntington, and Njord/Hyme. By contrast, EBIT declined
+from €560 million to €498 million because depreciation
+charges are based on units of production.
+Global Commodities' EBITDA was €290 million below the
+prior-year figure. This segment's reporting units in the prior
+year were Proprietary Trading, Optimization, and Gas Trans-
+port/Shareholdings/Other. The new reporting structure better
+reflects Global Commodities' business activities, in particular
+its global coal, oil, freight, and LNG activities and its regional
+power and gas business.
+Global Commodities
+Supervisory Board and Board of Management
+Tables and Explanations
+Global Commodities
+2014
+€ in millions
+2014
+-145
+Power and Gas
+1,343
+953
+1,985
+1,525
+Distribution Networks
+48
+29
+48
+29
+Coal/Oil/Freight/LNG
+2013
+2014
+2013
+Combined Group Management Report
+Renewables' EBITDA rose by €36 million, or 2 percent.
+2013
+owing to improved market conditions for coal-fired generation.
+Unplanned outages at three power stations had an adverse
+impact on earnings in Germany.
+32
+Business Report
+Business Performance in 2014
+Our business performance in 2014 continued to reflect the
+difficult situation on energy markets in Germany and Europe
+but also the many operational, financial, and strategic mea-
+sures we initiated.
+Our sales of €111.6 billion were 7 percent below the prior-year
+figure of €119.7 billion. Our EBITDA declined by 9 percent year
+on year to €8.3 billion, underlying net income by 24 percent
+to €1.6 billion. Both results are in line with our expectations.
+The declines primarily reflect currency-translation and port-
+folio effects.
+Consequently, our 2014 EBITDA and underlying net income
+were both within the forecast ranges-€8 to €8.6 billion and
+€1.5 to €1.9 billion, respectively-of our earnings guidance.
+Our investments of approximately €4.6 billion were significantly
+below the high prior-year figure of €8 billion but also below
+the figure of €4.9 billion foreseen for 2014 in our medium-
+term plan, mainly because of currency-translation effects and
+scheduling changes at some projects.
+Despite the earnings decline, our operating cash flow of
+€6.3 billion was at the prior-year level.
+Relative to year-end 2013, at year-end 2014 our economic net
+debt increased slightly to €33.4 billion, in particular because
+of higher provisions for pensions. Our debt factor rose to
+4 (prior year: 3.5). As part of implementing our new strategy,
+we will review our medium-term debt factor target to reflect
+our new business profile after the spinoff of the New Company.
+E.ON 2.0
+To enhance our performance, in the summer of 2011 we
+launched a Group-wide restructuring and cost-cutting program
+called E.ON 2.0. Its objective is to reduce E.ON's controllable
+costs from roughly €11 billion in 2011 to €9 billion by 2015 at the
+latest (adjusted for divestments, this figure is now €7.5 billion).
+By year-end 2014 we had already achieved about 90 percent
+of the targeted savings, resulting in a lasting reduction in our
+cost basis. We plan for E.ON 2.0 to deliver further cost reduc-
+tions in 2015.
+Building on our cost-cutting successes, in the second half of
+2013 we launched an E.ON 2.0 project called Working Capital
+Excellence. Its aim is to make lasting improvements in our
+processes that reduce our working capital by €1 billion by the
+end of 2016 on a cash-effective basis relative to 2012. To get
+there, we set out to reduce receivables cycles (Order-to-Cash),
+expand our use of non-interest-bearing liabilities (Procure-to-
+Pay), and optimize our inventories (Forecast-to-Fulfill). By
+year-end 2014 we already achieved working capital reductions
+of about €0.4 billion and designed measures to achieve the
+remainder of the 2016 target.
+Acquisitions, Disposals, and Discontinued Operations
+in 2014
+We executed the following significant transactions in 2014.
+Note 4 to the Consolidated Financial Statements contains
+detailed information about them.
+Disposal Groups, Assets Held for Sale and Discon-
+tinued Operations
+To implement our divestment strategy, through year-end 2014
+we classified as disposal groups, classified as assets held for
+sale, or sold the following activities:
+•
+•
+•
+•
+our generation operations in Italy
+our generation operations in Spain
+Global Commodities' operations in Lithuania
+certain micro heating plants in Sweden
+a minority stake in Pražská plynárenská
+an 80-percent stake in Rødsand 2, a 207 MW offshore
+wind farm
+stakes in two wind farms in the United States
+our stake in Erdgasversorgungsgesellschaft Thüringen-
+Sachsen, a gas utility.
+We classified the following activities as discontinued opera-
+tions:
+31
+•
+2013
+616.2
+Total (million barrels of
+oil equivalent)
+22.4
+16.5
++36
+The main reason for the increase in Exploration & Production's
+production in the North Sea was higher production at Skarv
+field resulting from improved production efficiency. It also
+reflected higher production at Babbage, Rita, Huntington,
+and Njord/Hyme fields. In addition to its North Sea production,
+in 2014 Exploration & Production had 5,923 million cubic
+meters of output from Siberia's Yuzhno Russkoye gas field,
+which is accounted for using the equity method.
+Gas Sales
+The E.ON Group's gas sales declined by 58.3 billion kWh, or
+5 percent.
+Gas Sales
+Billion kWh
+Gas sales to residential and SME customers declined by
+24.9 billion kWh. Comparatively mild weather was the main
+factor in the United Kingdom, Germany, Romania, and the
+Netherlands. Competition-driven losses constituted another
+negative factor in the United Kingdom. The derecognition of
+a majority-held equity interest in the first quarter of 2014 was
+the principal reason for the decline in Czechia.
+Gas sales to I&C customers declined by 33.6 billion kWh. Owing
+to the above-described reason, the Germany regional unit's
+gas sales to I&C customers fell by 26.5 billion kWh, from 109
+to 82.5 billion kWh. Other EU Countries' gas sales fell at all of
+its units except Hungary by a total of 7.1 billion kWh, mainly
+because of weather factors. The above-mentioned derecogni-
+tion was an additional adverse factor in Czechia.
+Gas sales to sales partners declined by 98.2 billion kWh. The
+decline at the Germany regional unit mainly reflects the
+transfer of its business with energy traders and banks to our
+Global Commodities unit (where this business is classified as
+wholesale market sales) and the development of commodity
+prices. Mild weather and, in particular, keen competition were
+adverse factors as well.
+Gas sales in the trading business rose by 98.4 billion kWh,
+primarily because of an increase in the proportion of sales
+on the wholesale market.
+Total
+1,161.0
+1,219.3
+Residential and SME
+93.3.
+118.2
+I&C
+117.9
+151.5
+Sales partners
+235.2
+333.4
+Wholesale market/
+Global Commodities
+714.6
+2014
+Additional information in Tables and Explanations on page 220 et seq.
++29
+the Spain regional unit
+Disposals resulted in cash-effective items totaling €2,551 million
+81
+588
+Earnings Situation
+Transfer Price System
+Deliveries from our generation units to Global Commodities
+are settled according to a market-based transfer price system.
+Generally, our internal transfer prices are derived from the
+forward prices that are current in the marketplace up to three
+years prior to delivery. The resulting transfer prices for power
+deliveries in 2014 reflect the development of market prices
+and were therefore lower than the prices for deliveries in 2013.
+Sales
+Our 2014 sales of €111.6 billion were about €8.1 billion below
+the prior-year level.
+Sales
+€ in millions
+Particularly significant declines in sales were recorded at our
+Germany, Other EU Countries, and Global Commodities units,
+although the decline at the latter is entirely attributable to
+lower intragroup sales.
+The Germany regional unit's sales declined by about €8 billion.
+Most of this-around €6 billion-reflects the divestment of
+E.ON Energy from Waste, intragroup offsets in the gas business,
+and a weather-driven decline in sales volume. Another
+€1.7 billion of the decline is entirely attributable to the divest-
+ment of the network operations of E.ON Mitte, E.ON Thüringer
+Energie, and E.ON Westfalen Weser.
+Sales at Other EU Countries were €1.6 billion below the prior-
+year figure. The following were the main negative factors: a
+reduction in connection fees for wind farms, lower sales in the
+distribution network business, and the divestment of opera-
+tions in Finland and Poland at the Sweden regional unit; the
+derecognition of a majority-held share investment in the first
+quarter of 2014 and a regulation-driven decline in sales in the
+power business in Czechia; and lower sales prices in the reg-
+ulated power and gas business in Hungary. In addition, cur-
+rency-translation effects had an additional adverse impact on
+sales recorded in Sweden, Czechia, and Hungary. Furthermore,
+warmer temperatures relative to 2013 were responsible for
+a significant decline in sales in all countries. By contrast, the
+acquisition of new customers and increases in power and gas
+sales in France had a positive impact on sales.
+Global Commodities' sales declined on the power side owing
+to a lower price level relative to the prior year and on the gas
+side owing to a weather-driven reduction in sales volume in
+the midstream gas business, declining prices, and the sale of
+the Hungarian gas business in September 2013.
+Generation
+2014
+10,285 11,068
+2013
++/-%
+-7
+Renewables
+2,397
+2,423
+-1
+Global Commodities
+83,106
+90,034
+-8
+Exploration & Production
+2,118
+2,051
++3
+572
+the Italy regional unit.
+324
+Employees
+in 2014 (prior year: €7,120 million).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Renewables
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+The following table shows the sales, EBITDA, investments, and
+employee numbers of the Italy and Spain regional units. In
+view of the negotiations to sell these units, we reclassified
+them as discontinued operations. Their results are therefore
+included in net income as income from discontinued operations
+(see the table on page 39):
+Discontinued Operations
+Italy
+Spain
+€ in millions
+2014
+2013
+2014
+Sales
+1,592
+1,808
+1,166
+EBITDA
+43
+43
+146
+2013
+1,179
+132
+Investments
+3
+6
+63
+308
+1,464.7
+1,885.4
+cubic meters)
+71.1
+oil
+81.1
+Global Commodities/
+outside sources
+522.7
+455.3
+14.3
+Hydro
+15.9
+12.2
+Wind
+12.4
+Other
+2014
+2013
+22
+2.7
+2.5
+Additional information in Tables and Explanations on page 220 et seq.
+Generation's owned generation decreased by 21.2 billion kWh,
+from 146.7 to 125.5 billion kWh. In Germany the decline resulted
+in particular from the reduced dispatch of coal-fired and gas-
+fired assets due to the current market situation, the scheduled
+decommissioning of three generating units at Datteln power
+station, unplanned outages of hard-coal-fired generating units
+at Staudinger and Heyden power stations, extended down-
+times at Grohnde and Isar 2 nuclear power stations, and the
+sale of Buschhaus, a lignite-fired power plant. In France less
+power was generated at gas-fired assets because of the market
+situation, the shutdown of two generating units, and the
+limited availability of two units. In Italy we generated less
+power in gas-fired plants because of the deteriorated market
+0 10 20 30
+40
+40
+60
+50 60
+70 80
+Additional information in Tables and Explanations on page 220 et seq.
+29
+Natural gas,
+30
+14.0
+power plants
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Power Procurement
+The E.ON Group's owned generation declined by 30 billion kWh,
+or 12 percent, year on year. The Generation unit accounted for
+most-21.2 billion kWh-of the reduction. Owned generation at
+our other units declined by 8.8 billion kWh. Power procured
+increased by 67.6 billion kWh.
+situation. In Sweden we conducted overhaul work to extend
+the operating life of unit 2 at Oskarshamn nuclear power
+station. Lower demand due to the relatively warmer weather
+was another adverse factor.
+Power Procurement
+Billion kWh
+Owned Generation by Energy Source
+Billion kWh
+■ Germany 2014 Outside Germany 2014
+Germany 2013 - Outside Germany 2013
+Nuclear
+55.4
+56.1
+Total
+752.1
+714.5
+12.1
+Lignite
+14.5
+Owned generation
+215.2
+245.2
+47.4
+Jointly owned
+Hard coal
+62.7
+14.2
+Business Report
+Power Sales
+The E.ON Group's consolidated power sales were 39 billion kWh
+above the prior-year level due to an increase in trading activity.
+1,794
+1,961
+Carbon allowances (million metric tons)
+458
+469
+Oil (million metric tons)
+49
+49
+Coal (million metric tons)
+188
+211
+The table above shows our entire trading volume from 2014,
+including volume for delivery in future periods.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Upstream Production
+2014
+2013
++/-%
+Oil/condensates (million
+barrels)
+10.6
+7.5
++41
+Gas (million standard
+Gas (billion kWh)
+1,286
+1,695
+2013
+Power Sales
+Billion kWh
+Total
+735.9
+696.9
+Residential and SME
+62.0
+I&C
+Sales partners
+69.1
+90.2
+93.1
+91.3
+112.5
+Germany
+Wholesale market/
+492.4
+422.2
+2014
+Additional information in Tables and Explanations on page 220 et seq.
+2013
+The 7.1 billion kWh decline in power sales to residential and
+small and medium enterprise ("SME") customers reflects, in par-
+ticular, lower sales volume at the Germany regional unit and
+at Other EU Countries due to mild weather. Lower customer
+numbers and ongoing energy-efficiency measures were addi-
+tional adverse factors in the United Kingdom. Power sales in
+Germany were adversely affected by the divestment of E.ON
+Thüringer Energie and E.ON Mitte and by lower average con-
+sumption due both to mild weather and enhanced energy-
+efficiency measures. However, we continued the positive trend
+of recent quarters by achieving further improvements in cus-
+tomer acquisition and satisfaction. On a net basis, this resulted
+in the addition of 40,000 new customers.
+Power sales to industrial and commercial ("I&C") customers
+declined by 2.9 billion kWh. The Germany regional unit's
+I&C power sales declined by 4.1 billion kWh, from 25.1 to
+21 billion kWh owing to the above-mentioned divestments as
+well as the loss of customers due to competition. By contrast,
+Other EU Countries' I&C power sales rose by 0.9 billion kWh,
+from 64.9 to 65.8 billion kWh.
+Power sales to sales partners declined by 21.2 billion kWh.
+The Germany regional unit's power sales to this customer
+group declined by 14.2 billion kWh, from 75.5 to 61.3 billion kWh,
+owing to the above-mentioned reasons and to the divestment
+of E.ON Westfalen Weser and E.ON Energy from Waste. Gener-
+ation's power sales declined by 4.4 billion kWh, from 32.8 to
+28.4 billion kWh, mainly because of lower production at fossil-
+fueled assets and unplanned outages in Germany. Lower
+demand resulting from comparatively mild weather was an
+additional adverse factor here as well. Renewables' power
+sales of 5.6 billion kWh were 2.4 billion kWh below the prior-
+year figure of 8 billion kWh, principally because of the reduction
+in installed capacity following the sale of certain hydroelectric
+assets in 2013 in Germany in conjunction with our market
+entry in Turkey.
+An increase in Global Commodities' trading activities to opti-
+mize E.ON's generation portfolio was primarily responsible for
+the increase in power sales in the trading business.
+Gas Procurement, Wholesale Sales, and Production
+The Global Commodities unit procured about 1,211 billion kWh
+of natural gas from producers in and outside Germany in 2014.
+To execute its procurement and sales mission for the E.ON
+Group, Global Commodities traded the following financial
+and physical quantities with non-Group entities:
+Trading Volume
+Power (billion kWh)
+2014
+Global Commodities
+28,584
+Combined Group Management Report
+-22
+EBITDA
+Our 2014 EBITDA was down by about €0.9 billion year on year.
+The positive factors were:
+E.ON generates a significant portion of its EBITDA in very
+stable business areas. The overall share of regulated as well
+as quasi-regulated and long-term contracted operations
+amounted to 53 percent of EBITDA in 2014.
+•
+cost savings delivered by our E.ON 2.0 program
+•
+higher earnings at Generation and Renewables
+•
+higher production at Exploration & Production.
+These factors were more than offset by:
+•
+•
+.
+•
+•
+the absence of earnings streams from divested companies
+lower earnings in our trading business
+adverse currency-translation effects
+adverse regulatory effects at the Germany unit
+lower earnings at Other EU Countries and Russia.
+EBITDA¹
+€ in millions
+36,521
+2013
++/-%
+Regulated business
+2,858
+3,482
+-18
+Supervisory Board and Board of Management
+Tables and Explanations
+Quasi-regulated and long-term
+Other EU Countries
+Other EU Countries
+290
+Czechia
+(4,104)
+(3,429)
+(6,342)
+(5,663)
+(SEK in millions)
+474
+377
+733
+622
+Sweden
+319
+(271)
+(241)
+(321)
+(310)
+(£ in millions)
+299
+378
+384
+UK
+2014
+2013
+2014
+EBIT¹
+EBITDA¹
+EBITDA at the remaining regional units rose by €24 million, in
+particular because of higher earnings in France, in Romania,
+and at E.ON Connecting Energies. EBITDA rose in France owing
+to a reduction in controllable costs and a wider gross margin
+and in Romania owing to a wider gross margin in the distri-
+bution network business (which was partially mitigated by a
+narrower margin in the sales business) and to cost-cutting
+measures. E.ON Connecting Energies recorded higher earnings
+because of the consolidation of a service provider in the
+United Kingdom and a company that generates power and
+heat for a business park in Russia.
+2013
+€ in millions
+Other EU Countries' EBITDA was €280 million, or 14 percent,
+below the prior-year figure.
+494
+contracted business
+1,429
+2,387
+-23
+Other EU Countries
+1,732
+2,012
+Non-EU Countries
+439
+533
+-14
+-18
+Group Management/
+Consolidation
+Total
+¹Adjusted for extraordinary effects.
+-552
+-522
+8,337
+9,191
+-9
+In view of the negotiations to sell our Italy and Spain regional
+units, we applied IFRS 5 and reclassified these units as assets
+held for sale from the fourth quarter of 2014 until their derecog-
+nition. Furthermore, the initial application of IFRS 10 and 11
+resulted in effects which are described in Note 2 to the Consoli-
+dated Financial Statements. We adjusted the prior-year figures
+accordingly.
+Our regulated business consists of operations in which reve-
+nues are largely set by law and based on costs. The earnings
+on these revenues are therefore extremely stable and pre-
+dictable. The €624 million decline mainly reflects divestments
+at the Germany regional unit.
+Our quasi-regulated and long-term contracted business con-
+sists of operations in which earnings have a high degree of
+predictability because key determinants (price and/or volume)
+are largely set by law or by individual contractual arrange-
+ments for the medium to long term. Examples of such legal or
+contractual arrangements include incentive mechanisms for
+renewables and the sale of contracted generating capacity.
+Our merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+35
+36
+Business Report
+Group Management/Consolidation
+The figures shown here are from E.ON SE, the equity interests
+it manages directly, and the offsetting of transactions between
+segments. The change in EBITDA relative to the prior year
+principally reflects the equity interests E.ON SE manages and,
+in particular, the continued centralization of support functions.
+Generation
+Generation's EBITDA increased by €279 million, or 14 percent.
+1,846
+1,596
+Germany
+1,070
++12
+Merchant business
+3,883
+4,280
+-9
+Total
+8,337
+9,191
+-9
+¹Adjusted for extraordinary effects.
+EBITDA1
+€ in millions
+2014
+2013
++/-%
+Generation
+2,215
+1,936
++14
+Renewables
+1,500
+1,464
++2
+Global Commodities
+21
+311
+-93
+Exploration & Production
+1,136
++6
+(CZK in millions)
+2014
+-35,447
+492
+(20,756)
+371
+(18,936)
+2013
+2014
+2013
+687
+(29,021)
+-154
+533
+439
+Total
+-78
+Other Non-EU Countries
+2014
+517
+(26,361)
+(RUB in millions)
+Russia
+€ in millions
+-78
+EBIT¹
+EBITDA in Czechia declined by €204 million owing primarily
+to lower compensation payments for the preferential dispatch
+of renewable-source electricity in the distribution network, the
+book gain recorded on the sale of an equity interest in 2013,
+the derecognition of a majority-held share investment in the
+first quarter of 2014, and adverse currency-translation effects.
+The Sweden regional unit's EBITDA declined by €111 million,
+which includes adverse currency-translation effects of €33 mil-
+lion. Milder temperatures compared with 2013, lower network
+connection fees due to delays in wind-power projects, and
+the absence of earnings from operations divested in Finland
+and Poland were the other main negative factors.
+EBITDA at the UK regional unit rose by €6 million because of
+positive currency-translation effects.
+¹Adjusted for extraordinary effects.
+Non-EU Countries' EBITDA declined by 18 percent, or €94 million.
+Non-EU Countries
+Non-EU Countries
+159
+1,436
+157
+1,131
+212
+2,012
+1,732
+Total
+236
+EBITDA¹1
+-154
+293
+338
+Other EU Countries
+Non-EU Countries
+18,995 20,615
+1,518 1,865
+-8
+-19
+Group Management/
+Consolidation
+Total
+-44,889
+111,556 119,688
+-7
+33
+34
+Business Report
+Other Line Items from the Consolidated Statements
+of Income
+Own work capitalized of €345 million was 5 percent below the
+prior-year figure of €364 million. One reason was the divest-
+ment of shareholdings at the Germany regional unit in 2014.
+Another reason was that fewer engineering services for gen-
+eration new-build projects were performed in 2014 than in 2013.
+Other operating income of €10,966 million was 3 percent
+above the prior-year figure of €10,681 million. One reason was
+that income from derivative financial instruments rose by
+€3,855 million to €6,210 million (prior year: €2,355 million),
+mainly because of the marking to market of commodity and
+currency derivatives. By contrast, income from currency-trans-
+lation effects of €2,437 million was below the prior-year fig-
+ure of €3,765 million. Corresponding amounts resulting from
+currency-translation effects and from derivative financial
+instruments are recorded under other operating expenses. In
+addition, income on the sale of securities, property, plant,
+and equipment ("PP&E"), intangible assets, and share invest-
+ments declined by €1,521 million to €1,028 million (prior year:
+€2,549 million); as in the prior year, this income was recorded
+mainly on the sale of share investments. Reversals of provi-
+sions and impairment charges were also lower, declining by
+€428 million to €54 million (prior year: €482 million).
+Costs of materials declined by 7 percent, from €105,719 million to
+€98,496 million. The primary causes were a reduced expense for
+gas purchases and the divestitures at the Germany regional unit.
+Personnel costs declined by about 10 percent to €4,121 million
+(prior year: €4,604 million), mainly because of divestments
+made in 2013 and effects relating to our E.ON 2.0 restructuring
+program.
+Depreciation charges rose by €3,462 million, from €5,205 million
+to €8,667 million, in particular because of impairment charges
+on PP&E.
+Other operating expenses increased by 20 percent to €11,834 mil-
+lion (prior year: €9,902 million). The reason for the increase
+was higher expenditures relating to derivative financial instru-
+ments, which rose by €3,685 million to €5,305 million (prior
+year: €1,620 million), mainly because of the development
+of commodity derivatives. This was partially offset by a reduc-
+tion in expenditures relating to exchange-rate differences,
+which declined by €818 million to €2,937 million (prior year:
+€3,755 million). In addition, our €86 million in losses on the
+sale of securities, PP&E, and share investments was €423 mil-
+lion lower than the prior-year figure of €509 million. We also
+recorded lower concession fees and IT expenditures.
+Income from companies accounted for under the equity
+method declined by €63 million, from -€210 million to
+-€273 million, mainly because of impairment charges on a
+share investment at Non-EU Countries in both 2014 and 2013.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+EBITDA at Other Non-EU Countries consists of our activities
+in Brazil and Turkey, which are accounted for under the equity
+method. The negative figure recorded for Turkey is primarily
+attributable to high financing costs, low hydro output, and high
+power procurement costs. Earnings in Brazil mainly reflect
+negative finance earnings.
+The Russia unit's EBITDA was 25 percent below the prior-year
+level. The principal reasons were adverse currency-translation
+effects and a narrower gross margin resulting from higher
+fuel costs. In local currency EBITDA was 9 percent lower.
+¹Adjusted for extraordinary effects.
+Remaining regional units
+95
+(28,206)
+The Hungary regional unit's EBITDA was €5 million above the
+prior-year level. Improved receivables management and
+lower personnel costs were the main positive factors. Currency-
+translation effects constituted a negative factor.
+(57,854)
+101
+(31,125)
+(12,843)
+197
+(5,431)
+389
+(10,105)
+(7,972)
+200
+195
+(HUF in millions)
+(61,692)
+Hungary
+Consolidated Financial Statements
+Our review of the parameters in 2014 led us to make minor
+adjustments to our cost of capital. The E.ON Group's after-tax
+cost of capital declined from 5.5 to 5.4 percent. The table below
+shows the derivation of cost of capital before and after taxes.
+The cost of capital is determined by calculating the weighted-
+average cost of equity and debt. This average represents the
+market-rate returns expected by stockholders and creditors.
+The cost of equity is the return expected by an investor in
+E.ON stock. The cost of debt equals the long-term financing
+terms that apply in the E.ON Group. The parameters of the cost-
+of-capital determination are reviewed on an annual basis.
+Cost of Capital
+ROACE and Value Added
+Financial and Non-financial Performance Indicators
+Supervisory Board and Board of Management
+Tables and Explanations
+39,758
+Combined Group Management Report
+Extraordinary expenses
+-13
+-22
+Taxes
+Cost of Capital
+500
+-645
+Receivables from affiliated companies
+45,789
+2014
+Market premium¹
+Risk-free interest rate
+Cost of equity before taxes
+27%
+27%
+Average tax rate
+8.1%
+7.9%
+Cost of equity after taxes
+1.02
+2013
+0.99
+0.59
+0.57
+Debt-free beta factor
+5.5%
+5.5%
+19,979
+2.5%
+2.5%
+Indebted beta factor²
+16,969
+1,688
+1,439
+3,359
+Liabilities to affiliated companies
+43,178
+Other liabilities
+Total equity and liabilities
+2,488
+64,332
+4,270
+46,762
+1,738
+67,466
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings, financial, and asset situation is affected by income
+from equity interests. In 2014 income from equity interests in
+particular reflected a profit transfer of €3,811 million from
+E.ON Beteiligungen GmbH and the €2,539 million portion of
+the capital reserve paid from E.ON Finanzanlagen GmbH that
+affects net income. The main countervailing factors were loss
+transfers of €735 million from E.ON Iberia Holding GmbH and
+of €372 million from E.ON Russia Holding GmbH.
+Provisions
+The negative figure recorded under other expenditures and
+income mainly reflects impairment charges of €2,056 million
+on our stake in E.ON Italia S.p.A.
+On February 18, 2015, E.ON SE paid €522 million into the capital
+reserve of E.ON Energie AG.
+At the Annual Shareholders Meeting on May 7, 2015, manage-
+ment will propose that net income available for distribution
+be used to pay a cash dividend of €0.50 per ordinary share.
+Furthermore, shareholders will again be offered the option to
+exchange the cash dividend partially into E.ON SE shares
+(currently held as treasury shares).
+10.8%
+The complete Financial Statements of E.ON SE, with the
+unqualified opinion issued by the auditor, Pricewaterhouse-
+Coopers Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft,
+Düsseldorf, will be announced in the Bundesanzeiger. Copies
+are available on request from E.ON SE and at www.eon.com.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+The income taxes shown for 2014 yielded a positive figure
+and consist of tax income for previous years. Due to our loss
+situation from a tax perspective we incurred no income taxes
+for the 2014 financial year.
+Net income
+14,696
+Equity
+1,792
+Other receivables and assets
+2,265
+Liquid funds
+2,330
+3,020
+Net income transferred to retained
+earnings
+-473
+15,307
+-647
+24,574
+21,677
+Net income available for distribution
+966
+1,145
+Total assets
+64,332
+67,466
+Current assets
+11.1%
+Our new strategy-"Empowering customers. Shaping
+markets."―will enable us to address these challenges even
+more effectively. It will create two sharply focused companies,
+each of which will be better able to meet its stakeholders'
+3.9%
+1,859
+7,887
+Adjustments4
+6,451
+6,381
+-6,673
+-1,724
++ Other non-interest-bearing assets, including deferred income and deferred tax assets
+- Non-interest-bearing provisions³
+4,147
+3,356
+7,618
+6,582
+62,298
+56,555
+5,624
+4,664
+2013
+Capital employed in continuing operations (at year-end)
+50,501
+59,080
+Capital employed in continuing operations (annual average)5
+Our many stakeholders-customers and suppliers, policymakers
+and government agencies, the general public and the media,
+environmental groups and charitable organizations, employees
+and trade unions, business partners and competitors, and of
+course our investors-have high expectations for us and our
+industry. E.ON is expected to achieve three energy objectives
+simultaneously: to make sure that the energy we supply is
+1) secure and reliable, 2) friendly to the environment and the
+earth's climate, and 3) affordable for both our industrial and
+residential customers. We are expected to treat our employees,
+customers, and neighbors responsibly and to demand that
+our supply chain meets high standards for environmental and
+social performance.
+Corporate Sustainability
+1,031
+609
+7.5%
+7.4%
+9.2%
+8.5%
+2014
+5In order to better depict intraperiod fluctuations in average capital employed, annual average capital employed is calculated as the arithmetic average of the amounts at
+the beginning of the year and the end of the year.
+³Non-interest-bearing provisions mainly include current provisions, such as those relating to sales and procurement market obligations. They do not include provisions for
+pensions or for nuclear-waste management.
+2Depreciable assets are included at half their acquisition or production costs. Goodwill represents final figures following the completion of the purchase-price allocation
+(see Note 4 to the Consolidated Financial Statements).
+¹Adjusted for extraordinary effects.
+Value added
+Cost of capital before taxes
+ROACE
+61,244
+54,791
+"Capital employed is adjusted to exclude the mark-to-market valuation of other share investments, receivables and liabilities from derivatives, and operating liabilities for certain
+purchase obligations to minority shareholdings pursuant to IAS 32.
++ Inventories
++ Shares in affiliated and associated companies and other share investments
+The table below shows the E.ON Group's ROACE, value added,
+and their derivation.
+7.5%
+7.4%
+Cost of capital before taxes
+5.5%
+5.4%
+Cost of capital after taxes
+50.0%
+50.0%
+Analyzing Value Creation by Means of ROACE and
+Value Added
+Share of debt
+50.0%
+Share of equity
+2.8%
+Cost of debt after taxes
+27%
+27%
+Marginal tax rate
+3.9%
+50.0%
+Cost of debt before taxes
+Alongside EBITDA, our most important earnings figure for pur-
+poses of internal management control, we use ROACE and
+value added to monitor the value performance of our operating
+business. ROACE is a pretax total return on capital. It measures
+the sustainable return on invested capital generated by oper-
+ating a business. ROACE is defined as the ratio of our EBIT to
+average capital employed.
+Average capital employed does not include the marking to
+market of other share investments. The purpose of excluding
+this item is to provide us with a more consistent picture of
+our ROACE performance.
+pretax cost of capital, which declined relative to the prior year.
+As a result, value added amounted to €0.6 billion.
+Goodwill, intangible assets, and property, plant, and equipment²
+EBIT¹
+€ in millions
+E.ON Group ROACE and Value Added
+The significant decline in our ROACE, from 9.2 to 8.5 percent, is
+primarily attributable to the decline in our EBIT. Our average
+capital employed declined significantly as well owing to dis-
+posals and shutdowns that were not offset by ongoing invest-
+ments. At 8.5 percent, however, our ROACE still surpassed our
+ROACE and Value Added Performance in 2014
+Non-current assets
+Average capital employed represents interest-bearing invested
+capital. Capital employed is equal to a segment's operating
+assets less the amount of non-interest-bearing available cap-
+ital. Depreciable assets are recorded at half of their original
+acquisition or production cost. ROACE is therefore not affected
+by an asset's depreciation period. Goodwill from acquisitions
+is included at acquisition cost, as long as this reflects its fair
+value. Changes to E.ON's portfolio during the course of the year
+are factored into average capital employed.
+Business Report
+expectations. We believe that this will, over the long term,
+have a positive impact on the business performance of both
+companies. As in the past, the new strategy will ensure that
+both companies conduct sound corporate governance and
+embed environmental and social performance in their business
+processes. In dialog with our stakeholders we have defined
+the main challenges we face and set targets for addressing
+them. The challenges and targets are cataloged in our sustain-
+ability work program. Our online Sustainability Report provides
+periodic updates on the status of our work program. In light
+of our new strategy, the Sustainability Governance Council is
+developing a new work program that reflects the respective
+focus areas of the future E.ON and the New Company.
+47
+than one signals a higher risk than the risk level of the overall market; a beta
+factor of less than one signals a lower risk.
+2The beta factor is used as an indicator of a stock's relative risk. A beta of more
+¹The market premium reflects the higher long-term returns of the stock market
+compared with German treasury notes.
+Value added (ROACE - cost of capital) x average capital
+employed
+=
+Value added measures the return that exceeds the cost of
+capital employed. It is calculated as follows:
+48
+45,673
+2.8%
+Financial assets
+2014
+December 31
+Non-current securities
+Financial liabilities
+FX hedging adjustment
+Net financial position
+€ in millions
+Liquid funds
+Economic Net Debt
+Compared with the figure recorded at December 31, 2013
+(€32.2 billion), our economic net debt increased by €1.2 billion
+to €33.4 billion. Although our high positive operating cash
+flow and the proceeds from divestments exceeded investment
+expenditures and E.ON SE's dividend payout and led to an
+improvement in our net financial position, our economic net
+debt deteriorated, in particular because of an increase in pro-
+visions for pensions, which rose by €2.2 billion to €5.6 billion,
+mainly owing to declining discount rates.
+At the end of 2014 E.ON's financial liabilities declined by
+€3.1 billion to €19.7 billion relative to year-end 2013, mainly
+because of the early repurchase of certain bonds with a total
+nominal value of €1.2 billion and the on-schedule repayment
+of bonds, which were not refinanced owing to E.ON's liquidity
+situation.
+Financial Position
+The second key component of our finance strategy is a con-
+sistent dividend policy. In view of E.ON's new strategy and
+the related foreseeable uncertainties, management will rec-
+ommend paying shareholders a fixed dividend of €0.50 per
+share for both the 2014 and 2015 financial years. For the 2014
+financial year this corresponds to a payout ratio of 60 percent
+of underlying net income, which is within our original target
+range of 50 to 60 percent. Furthermore, shareholders will again
+be offered the option to exchange the cash dividend partially
+into E.ON SE shares (currently held as treasury shares).
+We manage E.ON's capital structure using our debt factor in
+order to ensure that E.ON's access to capital markets is com-
+mensurate with its current debt level. Debt factor is equal
+to our economic net debt divided by EBITDA; it is therefore a
+dynamic debt metric. Economic net debt includes not only
+our financial liabilities but also our provisions for pensions
+and asset-retirement obligations. As part of implementing
+our new strategy, we will review our medium-term debt factor
+target to reflect our new business profile after the spinoff of
+the New Company. We aim for any potential change in E.ON's
+rating due to the new setup in two companies to be limited
+to one notch.
+The central components of E.ON's finance strategy are capital-
+structure management and our dividend policy.
+Finance Strategy
+E.ON presents its financial condition using, among other finan-
+cial measures, economic net debt and operating cash flow.
+Financial Situation
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Income/Loss from discontinued operations, net, includes the
+earnings of the Italy and Spain regional units and the earnings
+from contractual obligations of operations that have already
+been sold. Pursuant to IFRS, these earnings are reported sep-
+arately in the Consolidated Statements of Income.
+2,126
+1,612
+Underlying net income
+2013
+6,067
+7,814
+4,781
+42
+41
+Our funding policy is designed to give E.ON access to a variety
+of financing sources at any time. We achieve this objective by
+basing our funding policy on the following principles. First, we
+use a variety of markets and debt instruments to maximize
+the diversity of our investor base. Second, we issue bonds with
+terms that give our debt portfolio a balanced maturity profile.
+Funding Policy and Initiatives
+Our debt factor at year-end 2014 increased to 4 (year-end
+2013: 3.5) owing to our lower EBITDA and higher economic
+net debt.
+¹Less prepayments to Swedish nuclear fund.
+²Adjusted for extraordinary effects.
+Debt factor
+EBITDA²
+9,191
+3.5
+4.0
+8,337
+-32,218
+-92
+-33,394
+-18,288
+-19,035
+-3,418
+-5,574
+Provisions for pensions
+Asset-retirement obligations¹
+-10,512
+-8,785
+-46
+34
+-22,724
+-19,667
+4,444
+Economic net debt
+Business Report
+181
+Income/Loss from discontinued
+In 2014 and 2013 our global and regional units were adversely
+affected by a generally deteriorated business environment,
+altered market assessments, and regulatory intervention. We
+therefore had to record impairment charges totaling approx-
+imately €5.5 billion at Generation (€4.3 billion, mainly in
+the United Kingdom, Sweden, and Italy), Non-EU Countries
+(€0.5 billion), Exploration & Production (€0.4 billion), Renew-
+ables (€0.2 billion), and Global Commodities (€0.1 billion) in
+2014. These charges were partially offset by reversals of impair-
+ment charges of €0.1 billion at Generation, Renewables, and
+Global Commodities. In 2013 we recorded impairment charges
+in particular at Generation, Renewables, Global Commodities,
+Exploration & Production, and Non-EU Countries.
+Business Report
+40
+39
+Restructuring and cost-management expenditures including
+expenditures in conjunction with E.ON 2.0 declined by €54 mil-
+lion and, as in the prior year, resulted mainly from cost-cutting
+programs.
+Net book gains were €1.4 billion below the high prior-year
+figure. In 2014 they were recorded primarily on the sale of
+securities and a gas utility in Germany, a majority stake in a
+gas company in Czechia, a stake in a gas company in Finland,
+certain micro heat production plants in Sweden, and network
+segments in Germany. The prior-year figure consists in partic-
+ular of book gains on the sale of certain hydroelectric assets
+in Bavaria to Austria's Verbund AG in conjunction with our
+market entry in Turkey as well as on the sale of E.ON Thüringer
+Energie, a stake in Slovakian energy company SPP, a minority
+stake in JMP in Czechia, operations in Finland, and securities,
+network segments, and a gas subsidiary in Germany.
+3Recorded under non-operating earnings.
+2Impairments differ from the amounts reported in accordance with IFRS due to
+impairments on companies accounted for under the equity method and impair-
+ments on other financial assets.
+¹Adjusted for extraordinary effects.
+368
+30
+0.6
+2,459
+2,091
+-3,160
+Attributable to shareholders of E.ON SE
+-3,130
+Net loss/income
+98
+-175
+Income from discontinued operations, net
+2,361
+-2,955
+operations
+Income/Loss (-) from continuing
+-718
+Other non-operating earnings include the marking to market
+of derivatives. We use derivatives to shield our operating busi-
+ness from price fluctuations. Marking to market at year-end
+2014 resulted in a positive effect of €540 million compared with
+€777 million at the year-end 2013. In addition, non-operating
+earnings were adversely affected in 2014 by impairment
+charges on gas inventories, securities, and operations at Non-
+EU Countries and by expenditures in conjunction with bond
+buybacks. In 2013 other non-operating earnings were adversely
+affected by provisions recorded at our gas business in con-
+junction with disposals and long-term supply contracts and
+by impairment charges on securities.
+Our tax expense was €0.6 billion compared with €0.7 billion in
+the prior year. Despite our pretax net loss, we did record a tax
+expense in 2014 and thus had a negative tax rate of 24 percent
+(prior year: 23 percent). Impairment charges are not tax-
+deductible and therefore did not reduce our tax expense in
+2014. In addition, our tax expense mainly reflects changes
+in the value of deferred tax assets and tax revenue for prior
+years. Significant tax-free net book gains served to reduce
+our tax rate in 2013.
+Underlying Net Income
+Net income reflects not only our operating performance but
+also special effects, such as the marking to market of deriva-
+tives. Underlying net income is an earnings figure after interest
+income, income taxes, and non-controlling interests that has
+been adjusted to exclude certain special effects. In addition to
+the marking to market of derivatives, the adjustments include
+book gains and book losses on disposals, restructuring expenses,
+other non-operating income and expenses (after taxes and
+non-controlling interests) of a special or rare nature. Under-
+lying net income also excludes income/loss from discontinued
+operations (after taxes and non-controlling interests), as well
+as special tax effects.
+-78
+113
+Special tax effects
+-466
+-953
+on non-operating earnings
+Taxes and non-controlling interests
+482
+115
+1,643
+5,409
+Impairments/reversals of impairments
+Other non-operating earnings
+operations, net
+550
+expenses
+Restructuring/cost-management
+-2,004
+-589
+Net book gains/losses
+2,091
+-3,160
+Net income attributable to shareholders
+of E.ON SE
+2013
+2014
+€ in millions
+Underlying Net Income
+496
+Third, we combine large-volume benchmark issues with smaller
+issues that take advantage of market opportunities as they
+arise. As a rule, external funding is carried out by our Dutch
+finance subsidiary, E.ON International Finance B.V., under
+guarantee of E.ON SE or by E.ON SE itself, and the funds are
+subsequently on-lent in the Group. As part of liquidity man-
+agement, in July 2014 E.ON repurchased certain bonds with a
+total nominal value of €1 billion ahead of schedule. In 2014
+E.ON also repurchased a privately placed bond in the amount
+of €0.2 billion. In October 2014 E.ON issued, through E.ON
+Beteiligungen GmbH, a €113 million exchangeable bond for
+shares of Swiss energy company BKW Energie AG; the bond
+has a coupon rate of 0 percent per year and a negative inter-
+est yield. Beyond this, E.ON issued no new bonds in 2014.
+Financial Liabilities
+€ in billions
+downgrade
+S&P
+A-
+A-2
+creditwatch
+negative
+With the exception of a U.S.-dollar-denominated bond issued
+in 2008, all of E.ON SE and E.ON International Finance B.V.'s
+currently outstanding bonds were issued under our Debt
+Issuance Program ("DIP"). The DIP enables us to issue debt to
+investors in public and private placements. In April 2014 it
+was extended, as planned, for one year. The DIP has a total
+volume of €35 billion, of which about €12 billion was utilized
+at year-end 2014.
+In addition to our DIP, we have a €10 billion European Com-
+mercial Paper ("CP") program and a $10 billion U.S. CP pro-
+gram under which we can issue short-term liabilities. We had
+€401 million in CP outstanding at year-end 2014 (prior year:
+€180 million).
+Providing rating agencies and bond investors with timely,
+comprehensive information is an important component of our
+creditor relations. The purpose of our creditor relations is
+to earn and maintain our investors' trust by communicating
+a clear strategy with the highest degree of transparency. To
+achieve this purpose, we regularly hold debt investor updates
+in major European financial centers, conference calls for debt
+analysts and investors, and informational meetings for our
+core group of banks.
+Maturity Profile of Bonds and Promissory Notes Issued by E.ON SE,
+E.ON International Finance B.V., and E.ON Beteiligungen GmbH
+€ in billions
+10
+4.0
+3.0
+2.0
+10
+1.0
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+43
+December 31, 2014
+2015
+P-2
+A3
+Moody's
+review for
+SEK
+0.1
+JPY
+0.2
+0.3
+Other currencies
+0.1
+0.1
+Promissory notes
+0.6
+0.7
+Commercial paper
+2016
+0.4
+Other liabilities
+4.4
+3.7
+E.ON SE Ratings
+Total
+19.7
+22.7
+Long
+term
+Short
+term
+Outlook
+1Includes private placements.
+0.2
+2017
+2018
+2019
+Other EU Countries
+879
+969
+-9
+Non-EU Countries
+703
+3,530
+-80
+Group Management/
+Consolidation
+2.2
+2.5
+-26
+USD
+4.4
+GBP
+10.4
+7.1
+EUR
+18.1
+14.3
+Bonds¹
+Standard & Poor's ("S&P") long-term rating for E.ON is A-,
+Moody's is A3. The short-term ratings are A-2 (S&P) and P-2
+(Moody's). After E.ON announced that it intends to spin off a
+majority stake in a New Company consisting of its conventional
+upstream and midstream businesses, in December 2014 both
+rating agencies placed E.ON under review for a downgrade.
+Alongside financial liabilities, E.ON has, in the course of its
+business operations, entered into contingencies and other
+financial obligations. These include, in particular, guarantees,
+obligations from legal disputes and damage claims, current
+and non-current contractual, legal, and other obligations.
+Notes 26, 27, and 31 to the Consolidated Financial Statements
+contain more information about E.ON's bonds as well as lia-
+bilities, contingencies, and other commitments.
+E.ON also has access to an originally five-year, €5 billion syn-
+dicated revolving credit facility, which was concluded with
+24 banks on November 6, 2013, and which includes two options
+to extend the facility, in each case for one year. In 2014 E.ON
+exercised the first option and extended the facility for one
+year to 2019. This facility has not been drawn on and instead
+serves as a reliable, ongoing general liquidity reserve for the
+E.ON Group. Participation in the credit facility indicates that
+a bank belongs to E.ON's core group of banks.
+Dec. 31, 2014 Dec. 31, 2013
+4.4
+-576
+1,013
+Germany
+2020
+2021
+2022
+2023+
+Investments
+Our investments of €4.6 billion were €3.4 billion below the
+prior-year level. We invested about €4 billion in property,
+plant, and equipment ("PP&E") and intangible assets (prior
+year: €4.5 billion). Share investments totaled €0.6 billion ver-
+sus €3.5 billion in the prior year. Our investments outside
+Germany declined by 48 percent to €3.4 billion (prior year:
+€6.5 billion).
+Investments
+€ in millions
+2014
+2013
+Generation
+862
+745
+1,067
+Renewables
+1,222
+861
++42
+Global Commodities
+115
+151
+-24
+Exploration & Production
+64
+404
+-84
++/-%
+-19
+Income taxes
+Attributable to non-controlling interests
+-2,379
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Asset Situation
+Non-current assets at year-end 2014 were 13 percent below the
+figure at year-end 2013, mainly because of the reclassification
+of assets at operations in Italy and Spain as assets held for
+sale. In addition, we recorded impairment charges, in particular
+on property, plant, and equipment ("PP&E"). Scheduled depre-
+ciation charges were more than offset by investments in PP&E
+and share investments.
+Current assets increased by 16 percent. Alongside the reclassifi-
+cation of assets at operations in Italy and Spain as assets held
+for sale, the change mainly reflects an increase in receivables
+on derivative financial instruments. These factors were offset
+to a slight degree by a reduction in operating receivables.
+Our equity ratio at year-end 2014 was below the level at year-
+end 2013. The decline resulted mainly from the net loss, the
+revaluation of performance-based benefit plans, a reduction
+in assets and liabilities resulting from currency-translation
+effects in the amount of €2.2 billion, and the dividend payout.
+Consolidated Assets, Liabilities, and Equity
+€ in millions
+Non-current assets
+Current assets
+Total assets
+Strategy and Objectives
+Equity
+Current liabilities
+Total equity and liabilities
+Non-current liabilities rose slightly from the figure at year-end
+2013, owing mainly to higher provisions for pensions and other
+obligations (see Note 11 to the Consolidated Financial State-
+ments) and higher liabilities on derivative financial instruments.
+The reclassification of certain non-current liabilities as liabil-
+ities of assets held for sale had a countervailing effect.
+Current liabilities increased by 10 percent relative to year-end
+2013, mainly because of an increase in liabilities on derivative
+financial instruments as well as the reclassification of debt in
+conjunction with assets held for sale. These effects were par-
+tially offset by the on-schedule repayment of bonds. Liabilities
+from operating receivables were lower as well.
+The following key figures indicate E.ON's asset and capital
+structure:
+•
+Non-current assets are covered by equity at 32 percent
+(December 31, 2013: 38 percent).
+Non-current assets are covered by long-term capital at
+108 percent (December 31, 2013: 104 percent).
+Dec. 31, 2014
+%
+Dec. 31, 2013
+%
+Non-current liabilities
+83,065
+E.ON Stock
+CEO Letter
+-3
+Total
+4,633
+811
+7,992
+774
+-42
++5
+Growth and replacement
+investments
+Maintenance investments
+3,822
+7,218
+-47
+Generation invested €205 million less than in the prior year.
+Investments in PP&E and intangible assets declined by
+€198 million, from €1,059 million to €861 million. Overhaul work
+to extend the operating life of unit 2 at Oskarshamn nuclear
+power station in Sweden, environmental-protection measures
+at Ratcliffe power station in the United Kingdom, the new
+generating unit being built at Maasvlakte power station in the
+Netherlands, and the conversion of unit 4 at Provence power
+station to burn biomass were among the major projects.
+Report of the Supervisory Board
+Investments at Renewables rose by €361 million. Hydro's invest-
+ments increased by 7 percent to €107 million. Wind/Solar/
+Other's investments increased substantially, from €861 million
+to €1,222 million. The higher figure for 2014 principally reflects
+investments for the construction of three large wind farms in
+Germany, the United Kingdom, and the United States.
+Exploration & Production invested €340 million less than in
+the prior year, primarily because of lower investments in
+Skarv, Babbage, Njord, Tolmount, Johnston, and Rita fields.
+The Germany regional unit's investments declined by
+€268 million owing to extraordinary effects in 2013: on the
+one hand, the prior-year acquisition of a 49-percent stake in
+the joint venture that owns 100 percent of the equity in E.ON
+Energy from Waste; on the other, the above-mentioned
+disposals. Investments in PP&E and intangible assets totaled
+€727 million in 2014. Of these investments, €648 million went
+toward the network business, €56 million toward the district-
+heating business, and €23 million toward other activities.
+Share investments totaled €17 million.
+44
+Business Report
+Investments at Other EU Countries were €90 million below
+the prior-year level. By implementing municipal and smart-
+meter projects, the UK regional unit invested €121 million, up
+from the prior-year figure of €106 million. The Sweden unit's
+investments of €331 million were €73 million below the
+prior-year figure of €404 million; investments served to main-
+tain and expand distributed generation and to expand and
+upgrade the distribution network, including adding new con-
+nections. Investments in Czechia declined from €163 million
+to €141 million owing to the derecognition of a majority-held
+equity interest in the first quarter of 2014. The Hungary
+regional unit invested €102 million (prior year: €117 million)
+in power and gas infrastructure. Investments in the remaining
+EU countries increased from €179 million to €184 million.
+The change mainly reflects higher network investments in
+Romania and a large heating project in the Netherlands.
+The Russia unit accounted for €347 million (prior year:
+€360 million) of the investments at Non-EU Countries. These
+were primarily for Russia's new-build program. We invested
+€356 million (€3,170 million) in our operations in Brazil and
+Turkey, of which €135 million is attributable to the acquisition
+of a 50-percent stake in Pecém II, a coal-fired power plant in
+Brazil. The high prior-year figure is mainly attributable to the
+acquisition of a share investment in Turkey. This investment
+was largely covered by the proceeds on the sale of certain hydro-
+electric assets in Bavaria to Austria's Verbund AG in exchange
+for the stake in the operations in Turkey.
+We plan to invest €4.3 billion in 2015. This includes investments
+in distribution networks in Germany and Sweden, in renew-
+ables (mainly wind power), and in ongoing generation new-
+build projects such as at Berezovskaya GRES, a power station
+in Russia. The investment plan in the Forecast Report presents
+our principal investment obligations.
+Cash Flow
+Our operating cash flow of €6.3 billion was at the prior-year
+level, as were cash-effective earnings and working capital;
+the latter benefited from the successful implementation of
+our Working Capital Excellence project.
+Cash provided by investing activities of continuing operations
+amounted to approximately -€3.3 billion compared with
+-€0.6 billion in the prior year. In executing our divestment pro-
+gram we recorded substantial cash inflows-€6.5 billion-on
+the sale of share investments in the prior year. These were not
+matched in the current year by the €2.2 billion in cash inflows
+on the sale of share investments at Renewables, Global Com-
+modities, Germany, and Czechia, resulting in a roughly 66-per-
+cent year-on-year decline. Cash inflows on the sale of intangi-
+ble assets and property, plant, and equipment were also lower,
+declining by €0.3 billion. This significant decline in cash
+inflows from divestments was accompanied by a reduction of
+€3.4 billion in our investments relative to the prior-year level,
+which mainly reflected share investments to acquire and/or
+expand new operations in Turkey and Brazil. Altogether, cash
+outflows for intangible assets, property, plant, and equipment,
+and share investments declined by 42 percent year on year.
+Cash outflows from changes in securities and fixed-term
+deposits and changes in restricted cash were €1.5 billion
+higher than in the prior year.
+Cash provided by financing activities of continuing operations
+amounted to -€4.6 billion (prior year: -€4 billion). The €1.9 billion
+increase in the net repayment of financial liabilities was par-
+tially offset by the roughly €1.3 billion decline in the dividend
+payout relative to the prior year.
+Liquid funds at December 31, 2014, were €6,067 million (prior
+year: €7,814 million). In 2014 E.ON had €1,064 million of cash
+and cash equivalents subject to a restraint risk (prior year:
+€639 million). In addition, the current securities of Versorgungs-
+kasse Energie contained €265 million (€81 million) earmarked
+for fulfilling insurance obligations (see Notes 18 and 31 to the
+Consolidated Financial Statements).
+Global Commodities invested €36 million less than in the
+prior year. The decline mainly reflects lower investments in
+the gas storage business (because a number of projects
+were completed) and in gas infrastructure.
+43
+66
+72
+Balance Sheet of E.ON SE (Summary)
+The decline in interest income is mainly attributable to the
+€3,561 million portion of the capital-reserve payout from
+E.ON Finanzanlagen GmbH that does not affect net income and
+to the above-mentioned impairment charges of €2,056 million
+on our stake in E.ON Italia S.p.A..
+Income Statement of E.ON SE (Summary)
+€ in millions
+2014
+2013
+December 31
+Income from equity interests
+4,646
+3,145
+€ in millions
+2014
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunc-
+tion with the German Stock Corporation Act), and the German
+Energy Act.
+2013
+-742
+-1,020
+Intangible assets and property, plant,
+Other expenditures and income
+-2,952
+334
+and equipment
+97
+116
+Income from continuing operations
+952
+2,459
+Interest income
+95,580
+E.ON SE's Earnings, Financial, and Asset Situation
+46
+42,625
+34
+36,750
+28
+125,690
+100
+132,330
+100
+26,713
+21
+36,638
+28
+Business Report
+63,335
+63,179
+47
+35,642
+28
+32,513
+25
+125,690
+100
+132,330
+100
+Additional information about our asset situation (including
+information on the above-mentioned impairment charges) is
+contained in Notes 4 to 26 to the Consolidated Financial
+Statements.
+45
+51
+3,079
+CHF
+2014
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Net Income
+Owing mainly to significantly higher impairment charges and
+lower proceeds from disposals, in 2014 we recorded a net loss
+attributable to shareholders of E.ON SE of -€3.2 billion and corre-
+sponding earnings per share of -€1.64. The respective prior-year
+figures of €2.1 billion and €1.10 reflect substantial book gains.
+Our economic interest expense improved mainly because of
+the positive development of our net financial position along
+with the reversal of provisions. Our interest expense not
+affecting net income deteriorated, in particular because of
+expenditures in conjunction with the early repurchase of
+bonds above their nominal value.
+Net Income
+€ in millions
+Economic Interest Expense
+2014
+2013
+€ in millions
+2013
+EBITDA¹
+8,337
+9,191
+Interest expense shown in the Consoli-
+dated Statements of Income
+-1,810
+-1,992
+Depreciation and amortization
+-3,553
+-3,467
+Impairments (-)/Reversals (+)²
+-120
+-100
+Interest income (-)/expense (+) not
+affecting net income
+39,661
+198
+2,004
+Total
+-1,612
+-1,874
+Economic interest income (net)
+-1,612
+-1,874
+Net book gains/losses
+589
+EBIT¹
+118
+5,624
+Restructuring/cost-management
+-133
+E.ON 2.0 restructuring expenses
+Impairments (-)/Reversals (+) 2,3
+-363
+-182
+-368
+-5,409
+-1,643
+Other non-operating earnings
+-115
+-482
+Income/Loss (-) from continuing
+operations before taxes
+expenses
+4,664
+11,053
+Non-EU Countries consists only of our employees at our Russia
+unit, where the workforce increased because of hiring for a
+new-build project.
+10,210
+5,343
+6,064
+10,708
+22,924
+21,640
+23,629
+22,290
+Dec. 31, 2013
+Dec. 31, 2014
+Dec. 31, 2013
+Dec. 31, 2014
+10,548
+6,523
+¹Figures do not include board members, managing directors, or apprentices.
+²Includes Italy, Spain, the Netherlands, Poland, and other countries.
+Other²
+France
+Czechia
+Sweden
+Hungary
+Russia
+Romania
+United Kingdom
+Germany
+At year-end 2014, 36,213 employees, or 62 percent of all staff,
+were working outside Germany, slightly more than at year-
+end 2013.
+Geographic Profile
+The number of employees at Group Management/Other rose
+owing to the centralization of support functions and the
+integration of IT functions formerly at Global Commodities
+despite the fact that E.ON 2.0 staff reductions, particularly in
+facility management functions, continued.
+6,903
+6,400
+FTE
+2013
+5,028
+4.9
+Renewables
+1.8
+2.2
+2013
+2014
+Generation
+Percentages
+Turnover Rate
+A total of 4,413 E.ON Group employees were on a part-time
+schedule, of whom 3,202, or 73 percent, were women. The
+turnover rate resulting from voluntary terminations averaged
+3.3 percent across the organization, lower than in the prior year.
+Supervisory Board and Board of Management
+Tables and Explanations
+Percentages at year-end
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+51 and older
+31 to 50
+27
+28
+56
+55
+17
+17
+4.5
+Global Commodities
+3.3
+30 and younger
+5,331
+5,021
+4,704
+4,842
+4.6
+4,701
+4,838
+3,229
+3,248
+3,195
+3,213
+2,460
+2014
+3,066
+3,027
+703
+797
+702
+796
+2,543
+2,761
+2,512
+2,730
+Gender and Age Profile, Part-Time Staff
+At the end of 2014, 28.8 percent of our employees were women,
+slightly more than the figure of 28.6 percent at the end of 2013.
+The average E.ON Group employee was about 43 years old and
+had worked for us for about 14 years.
+Employees by Age
+2,443
+Consolidated Financial Statements
+At year-end 2014 the E.ON Group had 58,503 employees world-
+wide, a decline of 5 percent from year-end 2013. E.ON also had
+1,400 apprentices in Germany and 181 board members and
+managing directors worldwide.
+Employees by Country¹
+2Includes renewables generation in Europe.
+¹Specific carbon emissions are defined as the amount of CO2 emitted for each
+MWh of electricity generated.
+0.45
+0.43
+0.55
+0.55
+E.ON Group³
+Russia
+0.44
+0.41
+E.ON Group (Europe only)²
+0.29
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+0.28
+Other EU countries
+0.45
+0.47
+Italy
+³Includes renewables generation outside Europe (wind power in the United States).
+E.ON emitted 96 million metric tons of carbon dioxide from
+power and heat generation in 2014, of which 63 million
+metric tons were in Europe. This represents a significant
+decline-16 percent-relative to 2013. It results from the fact
+that in 2014 we produced less power and had a lower-carbon
+generation mix, thanks to a slightly higher proportion of
+renewables and nuclear and a decline in coal-fired generation.
+Starting in 2013, energy suppliers are no longer allocated EU
+emission allowances at no cost to cover their power genera-
+tion operations. They are only allocated allowances for a por-
+tion of the heat they cogenerate. They must buy allowances
+to cover their remaining carbon emissions in the EU. Overall,
+our carbon intensity declined to 0.43 metric tons per MWh
+owing to the above-described factors. It remains our objective
+to halve our carbon intensity in Europe, which we will achieve
+by 2025 by continuing to adjust our generation mix.
+Use of Net Value Added
+E.ON is not only a reliable energy supplier. We are also a
+mainstay of economic development and individual prosperity
+in the regions and communities where we operate. Our
+company's overall financial contribution is significant. We
+measure it by means of net value added. This figure is the
+sum of the value we add to our employees (wages, salaries,
+benefits), government entities (taxes), lenders (interest pay-
+ments), and minority shareholders (minority interests' share
+of our earnings). In addition, we pay out a portion of our
+total earnings as a dividend to our shareholders.
+1,145
+966
+368
+30
+of income from continu-
+ing operations
+Dividends³
+Minority interests' share
+1,705
+1,683
+Interest payments²
+1,760
+0.83
+304
+Income taxes, other
+4,604
+4,121
+Wages, salaries, benefits
+2013
+2014
+Use
+Minority interests
+Shareholders
+Net Value Added
+€ in millions
+Employees
+Government
+entities
+Lenders
+Our personnel expenses of €4.1 billion, which represented the
+largest component of net value added, declined by 10 percent
+relative to 2013 owing to disposals and our E.ON 2.0 efficiency-
+enhancement program. E.ON shows €0.3 billion in taxes for
+2014, substantially less than the €1.8 billion shown for 2013.
+Beyond tax payments, many communities received concession
+fees from E.ON companies.
+taxes¹
+¹Adjusted for deferred taxes; this item does not include additional government
+levies, such as concession fees.
+0.71
+0.57
+¹Russia is not covered by the EU Emissions Trading Scheme.
+E.ON Group
+Russia¹
+Other EU countries
+E.ON Group (Europe only)
+Italy
+France
+United Kingdom
+Spain
+Germany
+Million metric tons
+2014
+Carbon Emissions from Power
+and Heat Generation
+Emissions data for our power and heat generation are seg-
+mented by country in accordance with the EU Emissions
+Trading Scheme. This differs from the segmentation for the
+rest of our reporting.
+Carbon Emissions and Intensity
+More information about our sustainability strategy and our
+performance is available at www.eon.com, where you will also
+find our new Sustainability Report, which will be released in
+early May 2015. It is not part of the Combined Group Manage-
+ment Report.
+In late 2014 the International Hydropower Association ("IHA")
+conducted an assessment of Selma, an E.ON hydroelectric
+station in Sweden where the old plant is being replaced by a
+new one. In accordance with the IHA's Hydropower Sustain-
+ability Assessment Protocol, the assessment included an on-
+site visit to Selma and extensive discussions with stakeholders.
+The assessment will help us identify where our procedures
+deviate from leading practice and improve our planning pro-
+cesses. The results of the assessment will be made public,
+which will enable anyone interested in these issues to learn
+about our sustainability performance at Selma.
+in a multi-stakeholder initiative to design a German national
+action plan for business and human rights. The two-year ini-
+tiative is being conducted by the German federal government
+under the direction of the Federal Foreign Office.
+E.ON takes very seriously the obligations on states and com-
+panies contained in the UN Guiding Principles on Business
+and Human Rights, which set global standards and contain
+measures to prevent and remedy human rights violations.
+After carefully familiarizing ourselves with the UN Guiding
+Principles and their implementation, we are now in the
+process of identifying and analyzing potential risks that our
+business activities may pose in this area. The next step will be
+to revise our corporate guidelines and, if necessary, to adjust
+our management processes. In addition, we are participating
+In 2013 E.ON began the process of conducting systematic
+water management. Our goal is to establish, by the end of 2015,
+minimum standards that comply with the UN CEO Water
+Mandate. The standards would apply to approvals processes,
+costs, water availability, water intake, water discharge, and
+our supply chain. The UN CEO Water Mandate is an internation-
+ally recognized voluntary agreement as well as a network
+of organizations dedicated to improving water management
+worldwide. In this regard, it is similar to the UN Global Com-
+pact, whose ten principles E.ON has endorsed for many years.
+Our commitment to transparency includes subjecting our
+sustainability performance to independent, detailed assess-
+ments by specialized agencies and investment-bank analysts.
+The results of these assessments provide important guidance
+to investors and to us. They indicate our strengths and weak-
+nesses, which helps us prioritize our efforts. Although E.ON
+missed being listed in the 2014 Dow Jones Sustainability Indi-
+ces Europe and World by a small margin, we improved our
+ranking in the Carbon Disclosure Project, which evaluates com-
+panies' climate-protection efforts. E.ON continues to be listed
+in the Euronext Vigeo-120 sustainability index and is included
+in Energy Intelligence's Top 100 Green Utilities ranking. In an
+assessment of the transparency of the corporate reporting of
+the world's 124 largest companies, Transparency International
+ranked E.ON in the top ten in the overall evaluation.
+We publish an annual online Sustainability Report, which is
+prepared in accordance with the guidelines of the Global
+Reporting Initiative. It provides comprehensive information
+about those aspects of our sustainability performance that
+are most important to our company and our stakeholders. It
+describes the various impacts of our business operations,
+articulates our position on these impacts, and explains the
+actions we take to manage them. It presents quantifiable
+results and generally makes our sustainability efforts as trans-
+parent as possible.
+Supervisory Board and Board of Management
+Tables and Explanations
+CO₂ emissions
+27.5
+12.9
+3.8
+0.62
+0.58
+0.53
+United Kingdom
+0.40
+0.38
+Germany
+2013
+2014
+Metric tons of CO2 per MWh
+France
+E.ON Group Carbon Intensity¹
+Business Report
+50
+50
+49
+95.7
+33.1
+62.6
+10.2
+5.4
+2.8
+Spain
+The decline in the number of employees at Other EU Countries
+is attributable to disposals in Czechia, business transfers in
+Romania, E.ON 2.0 staff reductions, and normal turnover.
+2Does not include the accretion of non-current provisions; includes capitalized
+interest.
+CEO Letter
+11,749
+Germany
++8
+219
+236
+Exploration & Production
+-14
+1,449
+1,249
++3
+1,675
+1,723
+-8
+8,757
+8,016
++/-%
+2013
+2014
+December 31
+Global Commodities
+Generation
+Renewables
+12,345
+-5
+Other EU Countries
+24,740
+The headcount at the Germany regional unit was lower
+mainly because of E.ON 2.0 staff reductions. This was partially
+offset by the hiring of apprentices as full-time employees.
+Exploration & Production added employees in Norway and the
+United Kingdom.
+The main reason for the reduction in Global Commodities'
+headcount was the transfer of IT staff to support functions
+recorded under Group Management/Other. E.ON 2.0 staff
+reductions constituted another factor.
+Hiring in North America led to a slight increase in the number
+of employees at Renewables.
+Generation's headcount was lower due mainly to E.ON 2.0
+staff reductions and power plant closures. These effects were
+partially counteracted by the hiring of apprentices as full-time
+employees.
+54 Business Report
+53
+¹Does not include board members, managing directors, or apprentices.
+2Includes E.ON Business Services.
+-5
+61,327
+Employees¹
+58,503
++2
+5,379
+5,490
+Group Management/Other²
++6
+5,019
+5,300
+Non-EU Countries
+-7
+26,484
+Total
+3Dividends are paid out of the value added from both continuing and discontinued
+operations.
+Exploration & Production
+Many of these measures are already having an impact. Our
+progress is receiving recognition outside our company as
+well. For example, E.ON received the Total E-Quality Seal for
+exemplary HR policies based on equal opportunity. In 2014
+we achieved a further increase in the percentage of female
+executives, which rose to 15.8 percent across E.ON and
+12.6 percent in Germany. This means that we reached our
+targets for 2015 and 2014, respectively.
+52
+51
+Other organizational changes at our company were planned
+and initiated in close consultation with employee represen-
+tatives. The employee-related aspects of these measures are
+subject to existing E.ON 2.0 mechanisms.
+In 2014 we continued to implement the measures of E.ON 2.0,
+our Group-wide efficiency-enhancement program, on the
+basis of the respective codetermination processes agreed on
+with the employee representatives of each country where
+E.ON operates.
+E.ON 2.0 and Restructuring
+Our People Strategy is delivered by HR staff at all our units
+and in all our regions. To support it through their interactions
+with all employees, HR staff are committed to being
+customer-oriented, continually improving HR services, working
+in partnership with employee representatives, and keeping
+things simple.
+Our People Strategy, which sets the frame for our HR work
+programs of the next three to five years, has three key suc-
+cess factors. Preparing our People for the Future, Providing
+Opportunities, and Recognizing Performance. Open Thinking,
+Engagement, and Never Complacent were identified as HR
+focus areas that will support the success factors.
+The goal of our People Strategy is to enhance our people's
+performance and leadership to power business success.
+Eighty percent of all activities are derived from the respective
+local People Strategies that were developed by each unit in
+light of its particular situation and regional trends.
+We have adopted an 80/20 approach to ensure that People
+Strategy adequately reflects the particularities of individual
+E.ON units. Under this approach the E.ON Group People Strategy
+addresses issues that are relevant to all of our employees.
+This accounts for about 20 percent of activities.
+In developing our People Strategy, we therefore placed great
+emphasis on obtaining and incorporating input and feedback
+from board members and senior management of all E.ON
+units. Our People Strategy was designed by E.ON HR's leader-
+ship team as well as by employee representatives. It is the
+result of an extensive development process and enjoys broad
+support across our organization.
+Great companies execute their People Strategy with the
+same energy and determination they apply to their business
+strategy. A key success factor is for HR functions to be busi-
+ness-integrated.
+An organization's business strategy and its products and
+services can be copied. What cannot be easily copied are an
+organization's people, its culture, and its competencies. The
+successful delivery of any business strategy depends on
+an organization having available appropriately qualified and
+motivated employees as well as a strong and diverse talent
+pipeline.
+People Strategy
+Employees
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Business Report
+Our HR work in 2015 will focus on preparing to implement
+the measures related to E.ON's new strategy, "Empowering
+customers. Shaping markets." Management has already con-
+cluded a framework agreement with the E.ON SE Works Coun-
+cil and the Group Works Council. In particular, the agreement
+lays down the principles for the employee-related aspects
+of the strategy's implementation and for the involvement of
+employee representatives at the Group and country level.
+Collaborative Partnership with Employee
+Representatives
+E.ON places a strong emphasis on working with employee
+representatives as partners. This collaborative partnership is
+integral to our corporate culture. At a European level, E.ON
+management works closely with the E.ON SE Works Council,
+whose members come from all European countries in which
+E.ON operates. Under the SE Agreement, which was concluded
+in 2012, the E.ON SE Works Council is informed and consulted
+about all issues that transcend national borders.
+be considered as potential successors for each vacant manage-
+ment position. Many units also have support mechanisms in
+place, including mentoring programs for female managers and
+next-generation managers, the provision of daycare, flexible
+work schedules, and home-office arrangements. Significantly
+increasing the percentage of women in our internal talent
+pool is a further prerequisite for raising, over the long term,
+their percentage in management and top executive positions.
+We support the achievement of this objective through a variety
+of measures. Each unit has specific targets, and progress
+towards these targets is monitored at regular intervals. We
+have also revised our Group-wide guidelines for filling man-
+agement positions. At least one male and one female must
+Alongside age and internationality, gender is a special focus
+of our diversity management. Our ambitious objective for our
+organization as a whole is to more than double the percentage
+of women in executive positions and to raise it to 14 percent
+in Germany by the end of 2016.
+E.ON brings together a diverse team of people who differ by
+nationality, age, gender, religion, and/or cultural and social
+background. Diversity is a key success factor. Numerous studies
+have shown that heterogeneous teams outperform homo-
+genous ones. Diversity is equally crucial in view of demographic
+trends. Going forward, only those companies that embrace
+diversity will be able to remain attractive employers and be
+less affected by the shortage of skilled workers. In June 2008
+we publicly affirmed our long-standing commitment to fair-
+ness and respect by signing the Charta der Vielfalt (German
+Diversity Charter), which now has almost 2,000 signatories.
+E.ON therefore belongs to a large network of companies com-
+mitted to diversity, tolerance, fairness, and respect.
+Diversity
+In 2014 we made noteworthy progress in internationalizing our
+talent pool. We added more job families to our High Potential
+Programs, which already have an international focus. We also
+improved our placement processes, which enabled us to fill
+more top management positions with talent drawn from other
+countries and other units.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+Workforce Figures
+E.ON Stock
+CEO Letter
+The foundation of our strategic, needs-oriented talent manage-
+ment is the Management Review Process, which we conducted
+again in 2014. It helps ensure the continued professional
+development of individual managers and executives, our
+various units and job families, and the entire organization.
+It also creates transparency about our current talent situation
+and our needs for the future. In addition, we combined exec-
+utive HR and our talent team into a Center of Competence
+for Talent, Executive, and Organizational Design so that we can
+take a holistic approach to talent management and identify
+top talents earlier in their career.
+38 percent are women.
+they come from around the world (including the United
+Kingdom, Germany, India, Egypt, Tunisia, Costa Rica, Italy,
+Romania, Spain, and the Czech Republic)
+they will work in a wide range of job families (including
+engineering, IT, sales, finance, business development,
+and HR)
+The international E.ON Graduate Program remained one of
+the most coveted ways of joining our company. Participants
+are assigned a mentor, receive special training, and gain
+experience during rotations at different E.ON units in Germany
+and other countries. Eighty graduates entered the program
+in 2014. Their backgrounds and interests reflect the emphasis
+E.ON places on diversity:
+The purpose of our talent management is to hire highly
+qualified people and to continually foster our employee's per-
+sonal and professional development. In 2014 E.ON's status
+as a top employer was again confirmed by prestigious rankings,
+such as "The Times Top 100 Graduate Employers," and by
+kununu, an employer-ranking platform.
+Talent Management
+E.ON 2.0 included the adoption of a functionally oriented
+management model. In 2014 E.ON management and the Group
+Works Council concluded the Agreement on Future Social
+Partnership in the Context of the Functionally Oriented Man-
+agement Model. The agreement, which stipulates the prin-
+ciples of the future social partnership at E.ON's operations in
+Germany, was the result of an unprecedented collaborative
+effort involving employee representatives and management
+from all levels of the company. It manifests a shared respon-
+sibility for the company and its employees and represents a
+special milestone in the history of codetermination at E.ON.
+Alongside the forms of codetermination required by law in
+European countries outside Germany, the involvement of
+employee representatives in these countries is fostered by
+the SE Agreement, by collaboration at the Group level, and
+by the Agreement on Minimum Standards for Restructuring
+Measures, which was concluded between management and
+the European Works Council (the forerunner of the SE Works
+Council) in 2010.
+Report of the Supervisory Board
+5.9
+In February 2015 the Italian Constitutional Court issued a ruling
+declaring that the energy tax surcharge, also known as the
+Robin Hood tax, is unconstitutional. The tax was introduced
+in 2008 to limit the corporate profits of energy companies.
+In its ruling the court stated explicitly that the repeal is not
+retroactive.
+Germany
+As part of implementing our new strategy, we will review our
+medium-term debt factor target in light of the change to our
+organizational setup after the spinoff of the New Company.
+We aim for any potential change in E.ON's rating due to the
+new setup in two companies to be limited to one notch.
+8.9
+Our forecast for full-year 2015 earnings continues to be sig-
+nificantly influenced by the difficult business environment in
+the energy industry.
+Forecast Earnings Performance
+Anticipated Earnings Situation
+Forecast Report
+58
+57
+The number of employees in the E.ON Group (excluding
+apprentices and board members/managing directors) will
+decline by year-end 2015 due to the continued implemen-
+tation of E.ON 2.0.
+Employees
+70 80 90 100
+60
+30 40 50
+We expect to have no funding needs in 2015 at the Group level.
+We expect to be able to fund our investment expenditures
+planned for 2015 and the dividend payout by means of oper-
+ating cash flow and proceeds from disposals. Any peaks in
+the Group's funding needs during the course of the year can
+be dealt with by issuing commercial paper.
+20
+0
+Range of hedged generation
+Central Europe
+- Nordic
+2017
+2016
+2015
+Percentages
+European Outright Portfolio
+Our power production for 2015 and 2016 is already almost
+completely hedged. Our hedging practices will, over time,
+serve to increase the hedge rate of subsequent years. As an
+example, the graph below shows the hedge rate for our Cen-
+tral and North European outright portfolio, which essentially
+consists of our non-fossil power production from nuclear and
+hydro assets.
+In the near term, prices on the Nordic power market will
+continue to depend primarily on the weather and therefore on
+water reservoir levels. In the long term, the ongoing expansion
+of renewables will be a decisive factor. The expectation remains
+that it will put significant downward pressure on prices. The
+commissioning of the NordBalt cable between Sweden and
+Lithuania in 2016 is expected to result in closer price coupling
+between the Nordic and Baltic markets and higher net exports
+from the former to the latter.
+Power prices for 2015 and 2016 in the United Kingdom will
+depend increasingly on developments in the gas market and
+on the increase in the carbon tax. The anticipated effects of
+the tax are that power imports from continental Europe will
+continue to rise and that domestic power production will come
+under increasing pressure.
+Near-term and medium-term power prices in Germany will
+continue to be determined largely by the price of hard coal
+and EUAS. However, the addition of more renewables capacity
+and numerous new, technologically advanced coal-fired power
+plants, which are scheduled to enter service in 2015, could
+put further downward pressure on prices. This trend will be
+resisted to some degree by the rise in Germany's exports of
+inexpensive renewables power, which supports domestic power
+prices, and by speculation about the possible closure of some
+coal-fired power plants due to environmental regulations.
+During the next two years, the backloading process will prob-
+ably remain the principal influence on prices for EU carbon
+allowances ("EUAS") under the European Emissions Trading
+Scheme. Backloading will continue to significantly reduce
+the number of EUAs that can be acquired through auctions,
+although the reduction will be smaller in 2015 than in 2014
+and smaller still in 2016. Nevertheless, greater scarcity will
+put more pressure on the EUA market and will probably lead
+to further price increases. The policy debate about a market
+stability reserve will be another important price driver in the
+first half of 2015.
+In 2015 inventories at natural gas storage facilities are
+expected to be relatively high at the end of winter (as they
+were in 2014), unless there is a period of severely cold
+weather across Europe in what remains of the first quarter.
+The dramatic drop in oil prices is expected to cause a down-
+ward trend in the price of gas bought under oil-indexed pro-
+curement contracts. In view of these fundamentals, the gas
+market is expected to be particularly weak in the summer of
+2015, and a further decline in prices appears possible.
+10
+Coal producers, who suffered from declining prices in recent
+years, have benefited somewhat from the recent collapse of
+oil prices and the weakening of the currencies of key coal
+export countries, particularly the Russian ruble. But current
+price movements suggest that this situation will be of short
+duration and that soon the coal market will again face over-
+supply. In the near and medium term, coal prices will depend
+primarily on a possible recovery of oil prices and exchange
+rates. From a fundamental perspective, however, the market
+will likely continue to be oversupplied and only improve
+gradually in response to adjustments on the supply side.
+Planned Funding Measures
+E.ON aims to pay a fixed dividend of €0.50 per share for both
+the 2014 and 2015 financial years. In addition, shareholders
+will again be offered the option to exchange the cash dividend
+for the 2014 financial year partially into E.ON SE shares
+(currently held as treasury shares).
+Combined Group Management Report
+We expect our 2015 EBITDA to be between €7 and €7.6 billion.
+We expect our 2015 underlying net income to be between
+€1.4 and €1.8 billion.
+Our forecast by segment:
+Renewables
+EBITDA1
+€ in billions
+Generation
+Global Commodities
+2015 (forecast relative
+to prior year)
+significantly below
+slightly below
+significantly above
+2014
+2.2
+1.5
+Exploration & Production
+significantly below
+Anticipated Financial Situation
+Germany
+significantly above
+on par
+significantly below
+7.0 - 7.6
+1.1
+1.8
+1.7
+0.4
+8.3
+Non-EU Countries
+Total
+¹Adjusted for extraordinary effects.
+We expect Generation's 2015 EBITDA to be significantly below
+the prior-year figure. Price developments on the wholesale
+market will continue to be a negative factor. The early decom-
+missioning of Grafenrheinfeld nuclear power station and the
+disposal of generating capacity in Italy and Spain will also
+have a negative impact on earnings.
+We anticipate that Renewables' 2015 EBITDA will be slightly
+below the prior-year level. Wind/Solar/Other will benefit from
+an increase in installed generating capacity, whereas Hydro
+will be adversely affected by declining prices and divestments.
+We expect Global Commodities' 2015 EBITDA to be significantly
+above the prior-year figure due to anticipated improvements
+in the power and gas business.
+We expect Exploration & Production's 2015 EBITDA to be sig-
+nificantly below the prior-year figure due to lower commodity
+prices and adverse currency-translation effects along with
+normal production declines at our gas fields in the North Sea.
+We expect the Germany regional unit's 2015 EBITDA to be
+significantly above the prior-year level. We anticipate improve-
+ments across the business based on more seasonally typical
+weather patterns and further efficiency enhancements and a
+continuation of the positive trend in customer acquisition
+and loyalty.
+Other EU Countries' 2015 EBITDA is expected to be at the prior-
+year level. Further positive effects from efficiency enhance-
+ments will be offset by adverse currency-translation effects.
+We expect Non-EU Countries' 2015 EBITDA to be significantly
+below the prior-year level, mainly because of adverse currency-
+translation effects at our Russia unit.
+Anticipated Dividend Development
+Other EU Countries
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+6.4
+3.9
+4.8
+3.3
+3.5
+Non-EU Countries
+Group Management/Other¹
+E.ON Group
+Includes E.ON Business Services.
+Occupational Health and Safety
+Occupational health and safety have the highest priority at
+E.ON. A key performance indicator ("KPI") for our safety is
+total recordable injury frequency ("TRIF"), which measures
+the number of fatalities, lost-time injuries, restricted-work
+injuries, and medical-treatment injuries per million hours of
+work. Our TRIF figures also include E.ON companies that are
+not fully consolidated but over which E.ON has operational
+control. E.ON employees' TRIF in 2014 was 2, a clear improve-
+ment from the 2.6 recorded in the prior year. Our units' safety
+performance is a component of the annual personal perfor-
+mance agreements of the Board of Management members
+and executives responsible for these units.
+We use TRIF and other KPIs to monitor and continually improve
+our safety performance. To ensure continuous improvement,
+our units design health, safety, and environment ("HSE")
+improvement plans based on a management review of their
+performance in the prior year. The results of the implemen-
+tation of these plans are also used as preventive performance
+indicators. Despite all our successes in occupational health
+and safety, it remains our objective to prevent accidents or
+other harmful effects on the health of our employees and
+contractors by consistently implementing uniform HSE man-
+agement systems.
+Compensation, Pension Plans, Employee Participation
+Attractive compensation and appealing fringe benefits are
+essential to a competitive work environment. Company con-
+tributions to employee pension plans represent an important
+component of an employee's compensation package and
+have long had a prominent place in the E.ON Group. They are
+an important foundation of employees' future financial secu-
+rity and also foster employee retention. E.ON companies
+supplement their company pension plans with attractive pro-
+grams to help their employees save for the future.
+5.6
+Another factor in employee retention is enabling them to
+participate in their company's success. Our employee stock
+purchase program in Germany includes a partially tax-free
+contribution from E.ON to encourage employees to purchase
+stock. In 2014, 11,621 employees in Germany purchased a
+total of 919,064 shares of E.ON stock. Although the participa-
+tion rate declined slightly from 51 to 47 percent, the program
+remained popular. We have similar stock-purchase programs
+in a number of other countries.
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 1,400 apprentices and
+work-study students in Germany at year-end 2014. This repre-
+sented 5.9 percent of E.ON's total workforce in Germany,
+compared with 6.1 percent at the end of the prior year. Estab-
+lished in 2003 as part of a pact between industry and the
+German federal government, the E.ON training initiative to
+combat youth unemployment was extended for three more
+years and will now continue through 2017. In 2014 it helped
+more than 800 young people in Germany get a start on their
+careers through internships to prepare them for an apprentice-
+ship as well as school projects and other programs.
+Apprentices in Germany
+Percentage of workforce
+Germany
+Generation
+December 31
+2014
+2013
+7.2
+7.3
+7.3
+Global Commodities
+1.4
+Consolidated Financial Statements
+2.0
+Apprenticeships
+4.3
+7.1
+Other EU countries
+3.9
+Strategy and Objectives
+Report of the Supervisory Board
+In 2014 the oil market evolved from the backwardation typical
+of recent years to a contango pattern, with prices for nearby
+months lower than prices for forward months. The recent
+period of low prices is expected to reduce investments in new
+projects and to reduce output, since it may render some pro-
+duction unprofitable. In addition, the economic benefits of low
+oil prices are expected to spur demand, particularly in the
+transportation sector. However, this will be accompanied by
+the continued significant increase in production in non-OPEC
+countries (including unconventional production-tight oil
+and oil sands-in North America), which could actually more
+than offset the increase in demand in 2015 and 2016.
+We expect power and fuel markets to continue to be very sen-
+sitive to macroeconomic developments and policy decisions
+and therefore to be generally more volatile in 2015 and 2016.
+Energy Markets
+The OECD considers the volatility of the financial system to
+be the main near-term risk and the debt crisis and monetary
+expansion to be the main medium-term risks. Looking further
+into the future, the OECD is concerned about the low growth
+of production potential, which indicates generally weak
+investment activity.
+The sharp drop in the ruble's value is one of the factors that
+will erode economic confidence and exacerbate inflationary
+trends in Russia. Driven by domestic demand, Turkey's econ-
+omy is expected to grow at a rate above the OECD average.
+Growth in Brazil will be dampened by infrastructure bottlenecks
+and high inflation.
+Growth prospects in the United States and the United Kingdom
+are good. Supportive monetary policy, less pressure to shrink
+government budgets, and rising confidence will help stabilize
+the U.S. economy. The euro zone will suffer from high unem-
+ployment but be supported by expansive monetary policy
+and less pressure on government budgets. It will also benefit
+from an improvement in its foreign trade position driven by
+a weaker euro and lower oil prices. No inflationary danger is
+seen for OECD countries. With growth continuing to stagnate,
+deflationary tendencies cannot be ruled out for the euro zone.
+The OECD considers it very likely that the global economy will
+grow at a moderate rate in 2015 and 2016. Growth will likely
+remain slower than prior to the financial crisis. Although the
+trend will generally be positive, the nuances will differ among
+the world's largest economies. The OECD sees more risks than
+opportunities in the next two years. Threats to the stability of
+the financial system and a lack of confidence in future growth
+represent key risks, particularly in the euro zone.
+Macroeconomic Situation
+Business Environment
+Forecast Report
+On February 19, 2015, E.ON sold its solar business in Italy to
+F2i SGR, a private infrastructure investment fund. The business
+consists of seven solar farms built between 2010 and 2013
+with a total installed capacity of 49 MW. About 70 percent of
+the capacity is installed on Sardinia. E.ON and F2i SGR agreed
+not to disclose the purchase price.
+CEO Letter
+56 Subsequent Events Report
+1.5
+1.5
+Subsequent Events
+Group Management/Other
+2.2
+2.2
+E.ON Stock
+6.6
+Renewables
+5.9
+6.1
+55
+6.9
+E.ON Group
+Renewables Global
+Counterparty Risks
+Generation
+Exploration
+Commodities & Production
+Medium-Term Planning
+Earnings Report/
+Planning and Controlling
+Process
+Technological Risks
+Strategic Risks
+Germany
+Risk Management, Monitoring, and Reporting
+External Risks
+Market Risks
+Additional Separate
+Reports on E.ON Group
+Commodity and Credit
+Risks
+Audits
+Quarterly KonTraG Risk
+Reporting
+Internal Audit
+Audit Report
+Audit and Risk Committee
+E.ON SE Supervisory Board
+Other EU
+Countries
+Board of Management
+Operational Risks
+Additional Reports on
+E.ON Group Financial
+Management (including
+Liquidity)
+Risk Committee
+Group
+Management/
+Consolidation
+E.ON SE
+•
+•
+Furthermore, the following are among the comprehensive
+measures we take to address technological risks:
+have factored the operational and financial effects of envi-
+ronmental risks into our emergency plan. They are part of
+a catalog of crisis and system-failure scenarios prepared for
+the Group by our incident and crisis management team.
+To limit technological risks, we will continue to improve our
+network management and the optimal dispatch of our gener-
+ation assets. At the same time, we are implementing opera-
+tional and infrastructure improvements that will enhance the
+reliability of our generation assets and distribution networks,
+even under extraordinarily adverse conditions. In addition, we
+Managing Technological Risks
+We attempt to minimize the operational risks of legal proceed-
+ings and ongoing planning processes by managing them appro-
+priately and by designing appropriate contracts beforehand.
+We engage in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, we strive to conduct proper project
+management so as to identify early and minimize the risks
+attending our new-build projects.
+Managing External Risks
+In addition to the above-described components of our risk
+management, we take the following measures to limit risk.
+Further Risk-Limitation Measures
+In compliance with the provisions of Section 91, Paragraph 2,
+of the German Stock Corporation Act relating to the establish-
+ment of a risk-monitoring and early warning system, the E.ON
+Group has a Risk Committee. The Risk Committee, with sup-
+port from relevant divisions and departments of E.ON SE and
+E.ON Global Commodities SE, ensures that the risk strategy
+defined by the Board of Management, principally the commodity
+and credit risk strategy, is implemented, complied with, and
+further developed.
+E.ON Risk Consulting GmbH, a wholly owned subsidiary of
+E.ON SE, is responsible for insurance-risk management in the
+E.ON Group. It develops and optimizes solutions for E.ON's
+operating risks by using insurance and insurance-related instru-
+ments and secures the necessary coverage in international
+insurance markets. To this end, E.ON Risk Consulting GmbH is,
+among other things, responsible for management of client data
+and insurance contracts, claims management, the accounting
+of risk covering and claims, and all associated reporting.
+Risk Management and Insurance
+61
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+to recognize risks early and to take the necessary counter-
+measures in a timely manner. We continually review our
+Group-wide planning, controlling, and reporting processes to
+ensure that they remain effective and efficient. As required
+by law, the effectiveness of our risk management system is
+reviewed regularly by Internal Audit. Our risk management
+system encompasses all fully consolidated E.ON Group com-
+panies and all companies accounted for using the equity
+method whose book value exceeds €50 million.
+Our risk management system consists of a number of com-
+ponents that are embedded into E.ON's entire organizational
+structure and processes. As a result, our risk management
+system is an integral part of our business and decision-making
+processes. The key components of our risk management sys-
+tem include our Group-wide guidelines and reporting systems;
+our standardized Group-wide strategy, planning, and controlling
+processes; Internal Audit activities; the separate Group-wide
+risk reporting conducted pursuant to the Corporate Sector
+Control and Transparency Act ("KonTraG"); and the establishment
+of risk committees. Our risk management system reflects
+industry best practice and is designed to enable management
+Non-EU
+Countries
+Risk Committee
+0.8
+Risk Report
+Germany
+5
+0.2
+Exploration & Production
+1
+0.1
+Global Commodities
+28
+1.2
+14
+0.6
+•
+€ in billions Percentages
+Generation
+Investments: 2015 Plan
+Our medium-term plan calls for investments of €4.3 billion in
+2015. The main geographic focus of our investments will con-
+tinue to be Germany, where they will go primarily toward the
+maintenance and expansion of our power and gas infrastructure
+and toward renewable and conventional power generation.
+Planned Investments
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Renewables
+Risk Management System
+19
+1.1
+60
+59
+This Combined Group Management Report contains certain forward-looking statements based on E.ON management's current assumptions and forecasts and other currently available
+information. Various known and unknown risks, uncertainties, and other factors could lead to material differences between E.ON's actual future results, financial situation, development
+or performance and the estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
+In 2015 we will take necessary preparatory steps for the New
+Company's public listing. In view of these strategic develop-
+ments, the company's restructuring, and the related foreseeable
+uncertainties, the Supervisory Board agreed to our proposal
+that the company should aim to pay a fixed dividend of €0.50
+per share for both the 2014 and 2015 financial years. To ensure
+reporting continuity, E.ON's current reporting units will, for the
+time being, remain unchanged.
+E.ON SE will focus on the new energy world and customer
+businesses. It will have three core businesses: renewables,
+energy networks, and customer solutions. We intend for the
+New Company to focus on conventional power generation,
+global energy trading, and exploration and production.
+Toward the end of 2014, the Board of Management and the
+Supervisory Board adopted a new strategy for E.ON. Its aim
+is to set up our businesses in a new way that makes them
+viable for the future. We made the decision in response to
+dramatically altered global energy markets, technical innova-
+tion, and more diverse customer expectations. E.ON will
+therefore reorganize itself so that it can tap the growth
+potential created by the transformation of the energy world.
+Alongside the new E.ON we intend to create a new, indepen-
+dent company that will support the transformation of the
+energy system by providing a secure energy supply; we intend
+to spin off a majority stake in the New Company to E.ON SE
+shareholders in 2016. Both E.ON and the New Company will
+have solid financing, be positioned to secure jobs, and have
+prospects for creating new jobs in the future.
+New Strategy
+General Statement on E.ON's Future Development
+We want to support our new strategy with targeted growth
+investments. For this purpose, we intend to increase our
+investment budget for 2015 by up to €500 million.
+Non-EU Countries' investments will serve mainly to continue
+ongoing generation new-build projects, particularly at
+Berezovskaya GRES in Russia.
+Investments at Other EU Countries will consist primarily of
+investments to maintain and expand our regional energy
+networks in Sweden, Czechia, and Hungary.
+Other EU Countries
+Investments at the Germany regional unit consist in particular
+of numerous individual investments to expand our inter-
+mediate- and low-voltage networks, switching equipment, and
+metering and control technology as well as other investments
+to ensure the reliable and uninterrupted transmission and
+distribution of electricity.
+The main focus of Renewables' investments will be on offshore
+wind farms (such as Amrumbank West and Humber) and
+onshore farms in Europe.
+Generation's investments will serve to maintain and expand
+its portfolio of power generation assets.
+100
+4.3
+2
+0.1
+Group Management/Consolidation
+Total
+5
+0.2
+Non-EU Countries
+26
+Most of Exploration & Production's investments will go toward
+developing gas and oil fields.
+systematic employee training, advanced training, and
+qualification programs
+Global Commodities will invest mainly in its gas-storage
+infrastructure.
+regular facility and network maintenance and inspection
+company guidelines as well as work and process instruc-
+tions
+Risk Report
+68
+67
+Declining discount rates could lead to increased provisions
+for pensions and asset-retirement obligations. This poses an
+earnings risk for E.ON.
+In addition, E.ON also faces risks from price changes and losses
+on the current and non-current investments it makes to
+cover its non-current obligations, particularly pension and
+asset-retirement obligations.
+E.ON faces earnings risks from financial liabilities and interest
+derivatives that are based on variable interest rates.
+Strategic Risks
+E.ON's international business operations expose it to risks
+from currency fluctuation. One form of this risk is transaction
+risk, which occurs when payments are made in a currency
+other than E.ON's functional currency. Another form of risk is
+translation risk, which occurs when currency fluctuations
+lead to accounting effects when assets/liabilities and income/
+expenses of E.ON companies outside the euro zone are trans-
+lated into euros and entered into our Consolidated Financial
+Statements. Currency-translation risk results mainly from
+transactions denominated in U.S. dollars, pounds sterling,
+Swedish kronor, Russian rubles, Norwegian kroner, Hungarian
+forints, Brazilian reals, and Turkish lira.
+our sales and results of operations are higher in the first and
+fourth quarters and lower in the second and third quarters.
+Sales and results of operations for all of our energy operations
+can be negatively affected by periods of unseasonably warm
+weather during the autumn and winter months. Our units in
+Scandinavia could be negatively affected by a lack of precipita-
+tion, which could lead to a decline in hydroelectric generation.
+We expect seasonal and weather-related fluctuations in sales
+and results of operations to continue.
+E.ON Stock
+The demand for electric power and natural gas is seasonal,
+with our operations generally experiencing higher demand
+during the cold-weather months of October through March
+and lower demand during the warm-weather months of April
+through September. As a result of these seasonal patterns,
+In addition, our Global Commodities unit has booked LNG
+regasification capacity in the Netherlands and the United
+Kingdom well into the future, resulting in payment obligations
+through 2031 and 2029, respectively. A deterioration of the
+economic situation, a decline in LNG available for the North-
+west European market, and/or a decline in demand could
+result in a lower utilization of regasification capacity than
+originally planned.
+Our units operate in an international market environment
+that is characterized by general risks relating to the business
+cycle. In addition, the entry of new suppliers into the market-
+place along with more aggressive tactics by existing market
+participants has created a keener competitive environment
+for our electricity business in and outside Germany which
+could reduce our margins. Our Global Commodities unit con-
+tinues to face considerable competitive pressure in its gas
+business. Competition in the gas market and increasing trading
+volumes at virtual trading points and gas exchanges could
+result in considerable volume risks for natural gas purchased
+under long-term take-or-pay contracts. In addition, the far-
+reaching dislocations on Germany's wholesale gas markets in
+recent years have led to considerable price risks between the
+purchase and sales side. Generally, long-term gas procurement
+contracts between producers and importers include the pos-
+sibility of adjusting them to reflect continually changing mar-
+ket conditions. On this basis, we conduct ongoing, intensive
+negotiations with our producers.
+Market Risks
+The E.ON Group's business operations are exposed to com-
+modity price risks. We mainly use electricity, gas, coal, carbon-
+allowance, and oil price hedging transactions to limit our
+exposure to risks resulting from price fluctuations, to optimize
+systems, to conduct load balancing, and to lock in margins.
+In addition, our operating business potentially faces risks
+resulting from human error and employee turnover.
+As part of the new strategic course we set in November 2014,
+E.ON SE will focus on renewables, energy networks, and cus-
+tomer solutions and will transfer its conventional generation,
+global energy trading, exploration and production businesses
+to a new, independent company and spin off a majority stake
+in the New Company to E.ON shareholders. In 2015 we will take
+the preparatory steps for the New Company's public listing.
+These include making organizational changes to form two
+companies that are independent of each other. In particular, the
+following potential risks attend this process: delays in the
+preparations for, or the implementation of, the organizational
+separation and/or the public listing, higher-than-anticipated
+implementation costs; an adverse impact on ongoing business
+operations.
+In the case of planned disposals, E.ON faces the risk of dis-
+posals not taking place or being delayed and the risk that E.ON
+receives lower-than-anticipated disposal proceeds. In such
+The E.ON Group's operations subject it to certain risks relating
+to legal proceedings, ongoing planning processes, and regu-
+latory changes. These risks relate mainly to legal actions and
+proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of
+the transformation of Germany's energy system) an altered
+business climate in the power and gas business, price increases,
+alleged market-sharing agreements, and anticompetitive
+practices. The legal proceedings concerning price increases
+include legal actions to demand repayment of the increase
+differential in conjunction with court rulings that certain
+price-adjustment clauses used in the special-customer seg-
+ment in years past are invalid. Rulings by Germany's Federal
+Court of Justice ("FCJ") have increased these risks industry-
+wide. To reduce future risks E.ON uses amended price-adjust-
+ment clauses. Additional risks result from a ruling issued by
+the European Court of Justice ("ECJ") on October 23, 2014,
+that Germany's Basic Supply Ordinances for Power and Gas
+(Grundversorgungsverordnungen) are in violation of EU law.
+The FCJ must now rule on the violation's consequences for
+German law. It is expected to issue this ruling in 2015. E.ON is
+not a party to these submissions, although it will be affected
+by the FCJ's ruling, as will all companies in the industry.
+Amended Basic Supply Ordinances for Power and Gas took
+effect on October 30, 2014. This increases the risk that price
+changes will result in tariff customers switching suppliers.
+E.ON is involved in arbitration and legal proceedings with
+a number of large customers concerning contract and price
+adjustments to reflect a business environment altered by
+market dislocations. In some of these proceedings the custom-
+ers are contesting the validity of price-adjustment clauses
+and the validity of the contracts as a whole. The FCJ ruled on
+May 14, 2014, that oil-indexed gas price clauses are a valid
+business practice, thereby resolving an important point of
+contention with large customers.
+The awarding of network concessions for power and gas is
+extremely competitive in Germany. This creates a risk of losing
+concessions, particularly in urban areas with good infrastruc-
+tures. There are strong indications that Germany may pass
+legislation this year to change the modalities of how a network
+is relinquished after a network concession has been lost. This
+could make competition even keener.
+As part of its review of E.ON network operators' equality
+reports, in 2014 the German Federal Network Agency (known
+by its German acronym, "BNetzA") indicated that it views the
+companies' setup (network operators having stakes in gener-
+ation companies and municipal utilities) as incompatible
+with unbundling requirements. The network operators dis-
+agreed with this viewpoint in writing. The discussions with
+the BNetzA continue.
+The second incentive-regulation period began in 2013 for E.ON
+gas network operators and in 2014 for E.ON power network
+operators in Germany. The BNetzA has released the results of
+the cost review and efficiency benchmarks. The administrative
+process for setting the revenue caps for E.ON gas network
+operators is formally completed. The BNetzA has set the rev-
+enue caps for all E.ON power network operators except one,
+and these caps have already taken legal effect.
+On January 21, 2015, the BNetzA submitted to the Federal
+Ministry for Economic Affairs and made public its report eval-
+uating the Incentive Regulation Ordinance. The report will
+serve as one of the bases for amendments to the ordinance,
+which the Federal Ministry for Economic Affairs announced
+Our business strategy involves acquisitions and investments
+in our core business as well as disposals. This strategy depends
+in part on our ability to successfully identify, acquire, and
+integrate companies that enhance, on acceptable terms, our
+energy business. In order to obtain the necessary approvals
+for acquisitions, we may be required to divest other parts of
+our business or to make concessions or undertakings that
+materially affect our business. In addition, there can be no
+assurance that we will be able to achieve the returns we
+expect from any acquisition or investment. For example, we
+may fail to retain key employees; may be unable to success-
+fully integrate new businesses with our existing businesses;
+may incorrectly judge expected cost savings, operating profits,
+or future market trends and regulatory changes; or may spend
+more on the acquisition, integration, and operation of new
+businesses than anticipated. Furthermore, investments and
+acquisitions in new geographic areas or lines of business
+require us to become familiar with new sales markets and
+competitors and to address the attending business risks.
+CEO Letter
+The risk situation of the E.ON Group's operating business at
+year-end 2014 had not changed significantly relative to the
+risk situation at year-end 2013. Nevertheless, in the future policy
+and regulatory intervention, increasing gas-market competi-
+tion and its effect on sales volumes and prices, and possible
+delays in power and gas new-build projects could adversely
+affect our earnings situation. From today's perspective, how-
+ever, we do not perceive any risks that could threaten the
+existence of the E.ON Group or individual segments.
+We determine the E.ON Group's overall risk by means of a
+Monte Carlo simulation technique that also factors in the
+interdependencies between individual risks. This simulation
+factors in the major Group company's individual risks as well
+as possible deviations from the assumptions on which our
+planning is based. It calculates the maximum loss after counter-
+measures (net worst case) and the anticipated loss. Changes
+to these figures over time indicate changes in the E.ON Group's
+risk situation.
+Board of Management's Evaluation of the Risk
+Situation
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results
+from non-delivery or partial delivery by a counterparty of the
+agreed consideration for services rendered, from total or
+partial failure to make payments owing on existing accounts
+receivable, and from replacement risks in open transactions.
+Counterparty Risks
+projects, it is not possible to determine the likelihood of these
+risks. In addition, after transactions close we could face liability
+risks resulting from contractual obligations.
+Report of the Supervisory Board
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology. We out-
+sourced our IT infrastructure to an external service provider
+in 2011. Among our IT risks are the unauthorized access to
+data, the misuse of data, and data loss.
+Operational Risiks
+Supervisory Board and Board of Management
+Tables and Explanations
+The new EU energy efficiency directive took effect in Decem-
+ber 2012. Among other provisions, it obliges all energy dis-
+tributors and energy retailers to achieve, between 2014 and
+2020, annual savings of 1.5 percent on the amount of energy
+they sell to their customers. However, member states have the
+option of replacing this provision with alternative measures
+that achieve a comparable effect. The other provisions afford
+member states a similar degree of flexibility. Consequently,
+how the directive is transposed into national law is of partic-
+ular significance and could pose risks for our regional units.
+All companies that are not small or medium-sized enterprises
+face a financial risk because they are obligated to conduct
+energy audits by the end of 2015. Not all member states have
+finalized the standards and rules for such audits. Moreover,
+the capacity for conducting such audits or certifying alterna-
+tive management systems is limited. Most member states
+transposed the directive into national law in 2014. Although
+the increasing efforts to enhance energy efficiency in all
+European energy markets create sales-volume risks for E.ON,
+they also create new sales opportunities by enlarging the
+market for energy-service businesses.
+E.ON Group
+Currently, the crisis in Ukraine has not yet affected our ability
+to supply our customers with gas. At this time our activities
+in Russia continue to operate according to plan. However, we
+cannot entirely rule out the possibility that they could be
+adversely affected by a further deterioration of the political
+and macroeconomic situation. Currently, though, there are
+no specific policy decisions that would have measurable neg-
+ative consequences.
+ENEVA S.A., our joint venture in Brazil, filed for creditor pro-
+tection in early December 2014. Going forward, the successful
+financial restructuring of its holding company and the stable
+operation of its power stations are its primary objectives. Our
+operations in Turkey could face risks resulting from the country's
+general macroeconomic development and regulatory environ-
+ment, including the liberalization process.
+Non-EU Countries
+In view of the current economic and financial crisis in many
+EU member states, policy and regulatory intervention (such as
+additional taxes, price moratoriums, and changes to support
+schemes for renewables) is becoming increasingly apparent.
+Such intervention could pose a risk to E.ON's operations in
+these countries. In particular, the refinancing situation of many
+European countries could have a direct impact on the E.ON
+Group's cost of capital. So-called Robin Hood taxes in Hungary
+are an example of such intervention.
+In the context of discussions about Europe's ability to meet
+its long-term climate-protection targets for 2050, adjustments
+to European emissions-trading legislation are under consider-
+ation. A first step was taken when it was agreed to reduce
+the number of carbon allowances available during the current
+phase of the EU Emissions Trading Scheme ("ETS"), which ends
+in 2020. Policymakers are also discussing whether to introduce
+a market stability reserve, whose purpose would likewise be
+to reduce the number of carbon allowances available during
+the current phase. They hope that reducing the number of
+allowances will lead to higher carbon prices, which would
+create additional incentives for investments in climate-friendly
+generating capacity. The risks of potentially higher carbon
+prices for E.ON's current fossil-fueled generation portfolio in
+the EU can only be assessed when greater clarity exists about
+what ETS reform measures will be taken.
+Other EU Countries
+it intends to undertake in 2015. The BNetzA's report proposes
+a number of different models for modifying the regulatory
+framework. Depending on their specifics, these models could
+pose risks and create opportunities.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+further refinement of our production procedures, pro-
+cesses, and technologies
+Insolvency proceedings were initiated in 2011 for the assets
+of TelDaFax Energy GmbH, a power and gas supplier. Until
+TelDaFax Energy GmbH filed for insolvency, it supplied its end-
+customers by using the networks of E.ON power and gas
+network operators in Germany on the basis of supplier frame-
+work contracts. In 2014 the insolvency administrator contested
+network-fee payments TelDaFax Energy GmbH made to E.ON
+power and gas network operators starting in 2009 and demands
+their repayment. At this time it is uncertain whether this will
+lead to court proceedings or whether an out-of-court settle-
+ment can be reached.
+In mid-June the European Network of Transmission System
+Operators for Electricity ("ENTSO-E") finalized draft EU-wide
+network codes that set minimum technical requirements
+for connecting generating facilities to distribution and trans-
+mission systems. The codes could increase requirements for
+65
+66
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+Climate change has become a central risk factor. For example,
+E.ON's operations could be adversely affected by the absence
+of precipitation or above-average temperatures that reduce
+the cooling efficiency of our generation assets and may make
+it necessary to shut them down. Extreme weather or long-
+term climatic change could also affect wind power generation.
+Alongside risks to our energy production, there are also risks
+that could lead to the disruption of offsite activities, such as
+transportation, communications, water supply, waste removal,
+and so forth. Increasingly, our investors and customers expect
+us to play an active leadership role in environmental issues
+like climate change and water conservation. Our failure to meet
+these expectations could increase the risk to our business
+by reducing the capital market's willingness to invest in our
+company and the public's trust in our brand.
+We could also be subject to environmental liabilities associated
+with our power generation operations that could materially
+and adversely affect our business. In addition, new or amended
+environmental laws and regulations may result in material
+increases in our costs.
+Technologically complex production facilities are used in the
+production and distribution of energy. Germany's Renewable
+Energy Law is resulting in an increase in decentralized feed-in,
+which creates the need for additional expansion of the dis-
+tribution network. On a regional level, the increase in decen-
+tralized feed-in (primarily from renewables) has led to a shift
+in load flows. Our operations in and outside Germany could
+experience unanticipated operational or other problems lead-
+ing to a power failure or shutdown. Operational failures or
+extended production stoppages of facilities or components of
+facilities (including new-build projects) as well as environmen-
+tal damage could negatively impact our earnings, affect our
+cost situation, and/or result in the imposition of fines. In addi-
+tion, problems with the development of new gas fields could
+lead to lower-than-expected earnings.
+Technological Risks
+That is why communicating clearly, seeking out opportunities
+for dialog, and engaging with our key stakeholders are so
+important. They are the foundation for earning credibility and
+an open ear for our viewpoints. Revised stakeholder-manage-
+ment processes we implemented in 2013 will help us achieve
+these aims. It is important that we act responsibly along our
+entire value chain and that we communicate consistently,
+enhance the dialog, and maintain good relationships with our
+key stakeholders. We actively consider environmental, social,
+and corporate-governance issues. These efforts support our
+business decisions and our public relations. Our objective is to
+minimize our reputation risks and garner public support so
+that we can continue to operate our business successfully.
+Events and discussions regarding nuclear power and energy
+prices affect the reputation of all large energy suppliers. This is
+particularly the case in Germany. As a large corporation whose
+stock is part of the DAX 30 blue-chip index, E.ON is especially
+prominent in Germany and is almost always mentioned during
+public discussions of controversial energy-policy issues.
+Reputation Risks
+Further risks may result from the EU's European Market Infra-
+structure Regulation ("EMIR") for derivatives traded over the
+counter ("OTC"), the updated Markets in Financial Instruments
+Directive ("MiFID2"), and the planned introduction of a finan-
+cial transaction tax. With regard to EMIR and OTC derivatives,
+the European Commission intends to introduce mandatory
+central clearing of all OTC trades. Non-financial firms are
+exempted from the clearing obligation as long as transactions
+are demonstrably risk-reducing or remain below certain mon-
+etary thresholds. E.ON monitors its compliance with these
+thresholds on a daily basis in order to avoid additional liquidity
+risks resulting from the margin requirements of mandatory
+clearing. Possible changes to existing EU regulations could lead
+to a substantial increase in administrative expenses, additional
+liquidity risks, and, if a financial transaction tax is imposed, a
+higher tax expense.
+new and, following the completion of a cost-benefit analysis,
+for existing generating facilities. The codes are currently going
+through the comitology process. The completion of this pro-
+cess would make the codes legally binding. This is expected
+to take place in 2015.
+Risk Report
+Germany
+E.ON Global Commodities obtains most of the natural gas it
+delivers to customers in and outside Germany pursuant to
+long-term supply contracts with producers in Russia, Germany,
+the Netherlands, and Norway. In addition to procuring gas
+on a long-term, contractually secured basis, E.ON Global Com-
+modities is active at various gas trading markets in Europe.
+Because liquidity at these markets has increased considerably,
+they represent a significant additional procurement source.
+E.ON Global Commodities therefore has a highly diversified
+gas procurement portfolio. Nevertheless, it faces a risk of
+supply interruptions from individual procurement sources
+resulting, for example, from technical problems at production
+facilities or in the transmission system or other restrictions
+that may affect transit. Such events are outside E.ON Global
+Commodities' control.
+Report of the Supervisory Board
+The amendments to Russia's mineral extraction tax for gas
+condensate and natural fuel gas took effect on July 1, 2014.
+Their earnings impact in 2015 will not be material.
+from investments and disposals), technological risks (risks
+relating to the operation of power plants, networks, and other
+facilities; environmental and new-build risks), and counter-
+party risks (credit and country risks). E.ON SE departments and
+the major Group companies report quantifiable and unquan-
+tifiable risks into the reporting system according to these
+categories. We categorize the earnings impact of risks as low
+(under €0.5 billion), intermediate (€0.5 to €1 billion), high
+(€1 to €5 billion), and very high (over €5 billion). These are risks
+that have been quantified by means of, for example, statistical
+methods, simulations, and expert opinion, presupposing the
+worst case for each risk. The graphic below shows the number
+of risks in each category; risks of the same type are aggregated
+into a risk group.
+Number of Risks per Risk Category
+Very high High Intermediate
+Low
+External risks
+35
+8
+Our IT-based system for reporting risks and opportunities has
+the following risk categories: market risks (commodity-price,
+margin, market-liquidity, foreign-exchange, and interest-rate
+risks), operational risks (IT, process, and personnel risks), exter-
+nal risks (policy and legal risks, regulatory risks, risks from
+public consents processes, risks from long-term market devel-
+opments, and reputation risks), strategic risks (risks resulting
+42
+222
+Technological
+risks
+Operational
+19
+5
+37
+risks
+Risk Situation
+Managing Counterparty Risks
+quality management, control, and assurance
+Global Commodities
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+Should an accident occur despite the measures we take, we
+have a reasonable level of insurance coverage.
+Managing Operational Risks
+Our IT systems are maintained and optimized by qualified
+E.ON Group experts, outside experts, and a wide range of tech-
+nological security measures. In addition, the E.ON Group has
+in place a range of technological and organizational measures
+to counter the risk of unauthorized access to data, the misuse
+of data, and data loss.
+We use a Group-wide credit risk management system to
+systematically measure and monitor the creditworthiness of
+our business partners on the basis of Group-wide minimum
+standards. We manage our credit risk by taking appropriate
+measures, which include obtaining collateral and setting
+limits. The E.ON Group's Risk Committee is regularly informed
+about all material credit risks. A further component of our
+risk management is a conservative investment strategy and
+a broadly diversified portfolio.
+Managing Market Risks
+In order to limit our exposure to commodity price risks, we
+conduct systematic risk management. The key elements of
+our risk management are, in addition to binding Group-wide
+policies and a Group-wide reporting system, the use of quan-
+titative key figures, the limitation of risks, and the strict sepa-
+ration of functions between departments. Furthermore, we
+utilize derivative financial instruments that are commonly
+used in the marketplace. These instruments are transacted
+with financial institutions, brokers, power exchanges, and
+third parties whose creditworthiness we monitor on an ongoing
+basis. The Global Commodities unit aggregates and con-
+sistently manages the price risks we face on Europe's liquid
+commodity markets.
+62
+Risk Report
+We use systematic risk management to monitor and control
+our interest-rate and currency risks and manage these risks
+using derivative and non-derivative financial instruments.
+Here, E.ON SE plays a central role by aggregating risk positions
+through intragroup transactions and hedging these risks in
+the market. Due to its intermediary role, E.ON SE's risk position
+is largely closed.
+Managing Strategic Risks
+We have comprehensive preventive measures in place to
+manage potential risks relating to acquisitions and investments.
+To the degree possible, these measures include, in addition
+to the relevant company guidelines and manuals, comprehen-
+sive due diligence, legally binding contracts, a multi-stage
+approvals process, and shareholding and project controlling.
+Comprehensive post-acquisition projects also contribute to
+successful integration.
+We use a comprehensive sales management system and
+intensive customer management to manage margin risks.
+Market risks
+Note 30 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial
+instruments and hedging transactions. Note 31 describes the
+general principles of our risk management and applicable risk
+metrics for quantifying risks relating to commodities, credit,
+liquidity, interest rates, and currency translation.
+23
+Supervisory Board and Board of Management
+Tables and Explanations
+Material risks are events or circumstances that could have a
+significant impact on the asset, financial, or earnings situation
+of E.ON Group companies or segments. The E.ON Group, and
+thus E.ON SE, is exposed to the following main risks:
+External Risks
+The political, legal, and regulatory environment in which the
+E.ON Group does business is also a source of external risks.
+Changes to this environment can lead to considerable uncer-
+tainty with regard to planning.
+Generation
+In response to requests from three federal states (Schleswig-
+Holstein, Hesse, and Rhineland-Palatinate), the Bundestag,
+the upper house of Germany's parliament, again thoroughly
+debated issues relating to the financial security of the provi-
+sions for the asset-retirement obligations for the dismantling
+of nuclear power stations and the final storage of radioactive
+waste. The result was to instruct the German federal govern-
+ment to increase the transparency requirements for the
+allocation of provisions to individual nuclear power stations
+and their use and to subject the amount of the provisions to
+an independent audit.
+Consolidated Financial Statements
+The Site Selection Act (Standortauswahlgesetz, or "StandAG")
+took effect in its entirety on January 1, 2014. Along with the
+search for an alternative site, it calls for the study of Gorleben
+to be suspended. Effective the date the StandAG entered
+effect, Gorleben is to remain open but be frozen in its current
+state as of the most recent study and/or partially dismantled.
+Germany's Energy Act (which was amended at the end of 2012)
+and the Ordinance on Reserve Power Plants (Reservekraft-
+werksverordnung, which was passed in 2013) contain new
+regulatory restrictions for several areas, including power
+generation (in particular: restrictions on the decommissioning,
+mothballing, or shutdown of generating units and rules for
+the mandatory operation of generating units that are deemed
+essential for maintaining power-system stability). These
+restrictions could affect the profitability of E.ON's generation
+assets in Germany.
+Capacity markets will play an important role for E.ON in a
+number of the electricity markets where it operates. Russia,
+Spain, Sweden, and Belgium already have capacity markets
+(the latter two are strategic reserves). France, Italy, and the
+United Kingdom have made political decisions to introduce
+capacity markets. The United Kingdom held its first capacity
+auction, for the 2018/2019 delivery year, in December 2014.
+Germany is debating whether to introduce a capacity market
+as part of the discussions surrounding the government's
+Green Paper on the future design of the country's electricity
+market. These reforms could affect E.ON's generation and
+retail operations. They could create market-design risks for
+E.ON, which could face a competitive disadvantage, particularly
+if there is a focus on specific generation technologies or if some
+existing assets are not included.
+63
+64
+15
+Risk Report
+The StandAG establishes a new levy that imposes the cost
+burden on entities with a disposal obligation. It estimates that
+the industry as a whole will face additional costs of more
+than €2 billion. We contend that such a passthrough of costs
+is unconstitutional as long as Gorleben has not been deemed
+unsuitable. E.ON is taking legal action against it. The StandAG
+also calls for an addendum to the Atomic Energy Act that
+establishes a new obligation for nuclear operators to store
+reprocessing waste at intermediate storage facilities in close
+proximity to their nuclear power stations. In October 2014
+E.ON filed declaratory actions against this new storage obli-
+gation in the states of Bavaria, Lower Saxony, and Schleswig-
+Holstein and also filed an appeal on constitutional grounds.
+Combined Group Management Report
+E.ON is building a hard-coal-fired power plant in Datteln,
+Germany ("Datteln 4"). The plant is designed to have a net
+electric capacity of about 1,055 MW. E.ON has invested more
+than €1 billion in the project so far. The Münster Superior
+Administrative Court issued a ruling declaring void the City of
+Datteln's land-use plan. This ruling was subsequently upheld
+by the Federal Administrative Court in Leipzig. Consequently,
+a new planning process was conducted to reestablish a reli-
+able planning basis for Datteln 4. The new construction plan
+and the amended land-use plan took effect on September 1,
+2014. In view of the upcoming consents process, the current
+policy environment, and pending and anticipated lawsuits,
+we currently anticipate additional delays relative to Datteln
+4's originally planned date of commissioning. We continue to
+anticipate that Datteln 4 will become operational. In principle,
+these types of risks also attend our other power and gas new-
+build and conversion projects.
+E.ON Stock
+Counterparty
+Strategy and Objectives
+3
+risks
+Exploration & Production
+Strategic risks
+41
+10
+16
+30
+40
+50
+In the normal course of business, we are subject to a number
+of risks that are inseparably linked to the operation of our
+businesses.
+CEO Letter
+Report of the Supervisory Board
+20
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Board of Management
+were a member of the Company's Board of Management
+in the past two years, unless the person concerned is
+nominated by shareholders who hold more than 25 percent
+of the Company's voting rights.
+At least one independent member of the Supervisory Board
+must have expertise in preparing or auditing financial state-
+ments. The Supervisory Board believes that Werner Wenning
+and Dr. Theo Siegert meet this requirement.
+are legal representatives of an enterprise controlled by
+the Company
+The Supervisory Board oversees the Company's management
+and advises the Board of Management on an ongoing basis.
+The Board of Management requires the Supervisory Board's
+prior approval for significant transactions or measures, such
+as the Group's investment, finance, and personnel plans; the
+acquisition or sale of companies, equity interests, or parts of
+companies whose value exceeds €500 million or 2.5 percent of
+stockholders' equity as shown in the most recent Consolidated
+Balance Sheets; financing measures that exceed 5 percent of
+stockholders' equity as shown in the most recent Consolidated
+Balance Sheets and have not been covered by Supervisory
+Board resolutions regarding finance plans; and the conclusion,
+amendment, or termination of affiliation agreements. The
+Supervisory Board examines the Financial Statements of
+E.ON SE, the Management Report, and the proposal for profit
+appropriation and, on the basis of the Audit and Risk Com-
+mittee's preliminary review, the Consolidated Financial State-
+ments and the Combined Group Management Report. The
+Supervisory Board provides to the Annual Shareholders
+Meeting a written report on the results of this examination.
+77
+78
+Corporate Governance Report
+Werner Wenning
+committees can be called at any time by a member or by the
+Board of Management. In the event of a tie vote on the
+Supervisory Board, the Chairperson has the tie-breaking vote.
+Overview of the Attendance of Supervisory Board Members at Meetings
+of the Supervisory Board and Its Committees
+Supervisory Board member
+Supervisory Board
+Executive Committee
+4/4
+are already supervisory board members in ten commercial
+companies that are required by law to form a supervisory
+board
+5/5
+The Supervisory Board has established policies and procedures
+for itself. It holds four regular meetings in each financial year.
+Its policies and procedures include mechanisms by which, if
+necessary, a meeting of the Supervisory Board or one of its
+•
+Members of the Board of Management are also required to
+promptly report conflicts of interest to the Executive Committee
+of the Supervisory Board and to inform the other members
+of the Board of Management. Members of the Board of Manage-
+ment may only assume other corporate positions, particularly
+appointments to the supervisory boards of non-Group com-
+panies, with the consent of the Executive Committee of the
+Supervisory Board. There were no conflicts of interest involving
+members of the E.ON SE Board of Management in 2014. Any
+material transactions between the Company and members
+of the Board of Management, their relatives, or entities with
+which they have close personal ties require the consent of
+the Executive Committee of the Supervisory Board. No such
+transactions took place in 2014.
+member is selected by a German trade union that is repre-
+sented at E.ON SE or one of its subsidiaries in Germany. Per-
+sons are not eligible as Supervisory Board members if they:
+The E.ON SE Board of Management manages the Company's
+businesses, with all its members bearing joint responsibility
+for its decisions. It establishes the Company's objectives, sets
+its fundamental strategic direction, and is responsible for
+corporate policy and Group organization.
+Audit and Risk
+Committee
+7/7
+The Board of Management consists of six members and has one
+Chairperson. Someone who has reached the general retirement
+age should not be a member of the Board of Management.
+The Board of Management has in place policies and procedures
+for the business it conducts and, in consultation with the
+Supervisory Board, has assigned task areas to its members.
+The Board of Management regularly reports to the Supervisory
+Board on a timely and comprehensive basis on all relevant
+issues of strategy, planning, business development, risk situa-
+tion, risk management, and compliance. It also submits the
+Group's investment, finance, and personnel plan for the coming
+financial year as well as the medium-term plan to the Super-
+visory Board for its approval, generally at the last meeting of
+each financial year.
+The Chairperson of the Board of Management informs, with-
+out undue delay, the Chairperson of the Supervisory Board of
+important events that are of fundamental significance in
+assessing the Company's situation, development, and manage-
+ment and of any defects that have arisen in the Company's
+monitoring systems. Transactions and measures requiring the
+Supervisory Board's approval are also submitted to the
+Supervisory Board in a timely manner.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+•
+Strategy and Objectives
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+In addition, the Board of Management has established a number
+of committees that support it in the fulfillment of its tasks.
+The members of these committees are senior representatives
+of various departments of E.ON SE whose experience, responsi-
+bilities, and expertise make them particularly suited for their
+committee's tasks. Among these committees are the following:
+A Disclosure Committee supports the Board of Management
+on issues relating to financial disclosures and ensures that
+such information is disclosed in a correct and timely fashion.
+A Risk Committee ensures the correct application and imple-
+mentation of the legal requirements of Section 91 of the
+German Stock Corporation Act ("AktG"). This committee monitors
+the E.ON Group's risk situation and its risk-bearing capacity
+and devotes particular attention to the early-warning system
+to ensure the early identification of going-concern risks to
+avoid developments that could potentially threaten the Group's
+continued existence. In collaboration with relevant departments,
+the committee ensures and refines the implementation of,
+and compliance with, the reporting policies enacted by the
+Board of Management with regard to commodity risks, credit
+risks, and opportunities and risks pursuant to Germany's
+Corporate Sector Control and Transparency Act ("KonTraG").
+A Market Committee ensures that E.ON, across all its entities
+and in a timely manner, adopts clear and unequivocal policies
+and assigns clear mandates for monitoring market develop-
+ments and managing its commodity portfolio (power, gas, coal,
+and so forth). The committee thus manages the portfolio's
+risk-reward profile in pursuance of the E.ON Group's strategic
+and financial objectives.
+Supervisory Board
+The E.ON SE Supervisory Board has twelve members and, in
+accordance with the Company's Articles of Association, is
+composed of an equal number of shareholder and employee
+representatives. The shareholder representatives are elected
+by the shareholders at the Annual Shareholders Meeting; the
+Supervisory Board nominates candidates for this purpose.
+Pursuant to the agreement regarding employees' involvement
+in E.ON SE, the other six members of the Supervisory Board
+are appointed by the SE Works Council, with the proviso that
+at least three different countries are represented and one
+Combined Group Management Report
+Finance and Investment
+Committee
+2/2
+Prof. Dr. Ulrich Lehner
+4/4
+5/5
+Dr. Karen de Segundo
+4/4
+5/5
+Dr. Theo Siegert
+4/4
+7/7
+Fred Schulz
+Willem Vis (until June 30, 2014)
+¹Member of the Finance and Investment Committee from July 2, 2014.
+In view of Item 5.4.1 of the German Corporate Governance
+Code, in December 2012 the Supervisory Board defined tar-
+gets for its composition that go beyond the applicable legal
+requirements. These targets are as follows:
+"The Supervisory Board's composition should ensure that, on
+balance, its members have the necessary expertise, skills,
+and professional experience to discharge their duties properly.
+Each Supervisory Board member should have or acquire the
+minimum expertise and skills needed to be able to understand
+and assess on his or her own all the business events and
+transactions that generally occur. The Supervisory Board should
+include a sufficient number of independent candidates;
+members are deemed independent if they do not have any
+personal or business relationship with the Company, its Board
+of Management, a shareholder with a controlling interest in
+the Company or with a company affiliated with such a share-
+holder, and such a relationship could constitute a material,
+and not merely temporary, conflict of interest. The Supervisory
+Board has a sufficient number of independent members if ten
+of its twelve members are independent. Employee representa-
+tives are, as a rule, deemed independent. The Supervisory
+Board should not include more than two former members of
+the Board of Management, and members of the Supervisory
+Board must not sit on the boards of, or act as consultants for,
+any of the Company's major competitors.
+Each Supervisory Board member must have sufficient time
+available to perform his or her duties on the boards of various
+E.ON companies. Persons who are members of the board of
+management of a listed company shall therefore only be eligible
+as members of E.ON's Supervisory Board if they do not sit on
+more than three supervisory boards of listed non-Group com-
+panies or in comparable supervisory bodies of non-Group
+companies.
+As a general rule, Supervisory Board members should not be
+older than 70 at the time of their election.
+The key role of the Supervisory Board is to oversee and advise
+the Board of Management. Consequently, a majority of the
+shareholder representatives on the Supervisory Board should
+have experience as members of the board of management of
+a stock corporation or of a comparable company or association
+in order to discharge their duties in a qualified manner.
+In addition, the Supervisory Board as a whole should have
+particular expertise in the energy sector and the E.ON Group's
+business operations. Such expertise includes knowledge
+about the key markets in which the E.ON Group operates.
+Description of the Functioning of the Board of
+Management and Supervisory Board and of the
+Composition and Functioning of Their Committees
+Board of Management
+2/2
+5/5
+7/7
+4/4
+4/4
+5/5
+Erhard Ott
+4/4
+5/5
+Clive Broutta (since July 1, 2014)
+2/2
+Baroness Denise Kingsmill CBE
+5/5
+4/4
+4/4
+3/3
+René Obermann
+4/4
+Klaus Dieter Raschke
+3/4
+6/7
+Eberhard Schomburg
+Eugen-Gheorghe Luha¹
+Our actions are grounded in integrity and a respect for the law.
+The basis for this is the Code of Conduct established by the
+Board of Management and confirmed in 2013. It emphasizes
+that all employees must comply with laws and regulations and
+with Company policies. These relate to dealing with business
+partners, third parties, and government institutions, particularly
+with regard to antitrust law, the granting and accepting of
+benefits, the involvement of intermediaries, and the selection
+of suppliers and service providers. Other rules address issues
+such as the avoidance of conflicts of interest (such as the pro-
+hibition to compete, secondary employment, material financial
+investments) and handling company information, property,
+and resources. The policies and procedures of our compliance
+organization ensure the investigation, evaluation, cessation, and
+punishment of reported violations by the appropriate Com-
+pliance Officers and the E.ON Group's Chief Compliance Officer.
+Violations of the Code of Conduct can also be reported
+anonymously (for example, by means of a whistleblower report).
+The Code of Conduct is published on www.eon.com.
+Report of the Supervisory Board
+Persons with executive responsibilities, in particular members
+of E.ON SE's Board of Management and Supervisory Board, and
+persons closely related to them, must disclose their dealings
+in E.ON stock or in related financial instruments pursuant to
+Section 15a of the German Securities Trading Act. Such dealings
+that took place in 2014 have been disclosed on the Internet at
+www.eon.com. As of December 31, 2014, there was no owner-
+ship interest subject to disclosure pursuant to Item 6.3 of the
+German Corporate Governance Code.
+Internal Audit regularly informs the E.ON SE Supervisory
+Board's Audit and Risk Committee about the internal control
+system for financial reporting and any significant issue areas
+it identifies in the E.ON Group's various processes.
+The final step of the internal evaluation process is the sub-
+mission of a formal written declaration called a Sign-Off
+confirming the effectiveness of the internal control system.
+The Sign-Off process is conducted at all levels of the Group
+before it is conducted by the global and regional units and,
+finally, for the Group as a whole, by E.ON SE. The Chairman
+of the E.ON SE Board of Management and the Chief Financial
+Officer make the final Sign-Off for the E.ON Group.
+Sign-Off Process
+Internal Audit tests the E.ON Group's internal control system
+and identifies potential deficiencies (issues). On the basis
+of its own evaluation and the results of tests performed by
+Internal Audit, an E.ON unit's management carries out the
+final Sign-Off.
+The management of E.ON units relies on the assessment per-
+formed by the process owners and on testing of the internal
+control system performed by Internal Audit. These tests are a
+key part of the process. Using a risk-oriented audit plan,
+Tests Performed by Internal Audit
+General IT Controls
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment
+of the design and the operational effectiveness of the pro-
+cesses as well as the controls embedded in these processes.
+The E.ON units to which the internal control system applies
+use a central documentation system to document key controls.
+The system defines the scope, detailed documentation require-
+ments, the assessment requirements for process owners, and
+the final Sign-Off process.
+Central Documentation System
+Each year, we conduct a process using qualitative criteria and
+quantitative materiality metrics to define which E.ON units
+must document and evaluate their financial-reporting-related
+processes and controls in a central documentation system.
+Scope
+The Catalog of ICS Principles is a key component of our internal
+control system, defining the minimum requirements for the
+system to function. It encompasses overarching principles for
+matters such as authorization, segregation of duties, and
+master data management as well as specific requirements for
+managing risks in a range of issue areas and processes, such
+as accounting, financial reporting, communications, planning
+and controlling, and risk management.
+Our internal control system is based on the globally recog-
+nized COSO framework, in the version published in May 2013
+(COSO: The Committee of Sponsoring Organizations of the
+Treadway Commission). The Central Risk Catalog (ICS Model),
+which encompasses company- and industry-specific aspects,
+defines possible risks for accounting (financial reporting) in
+the functional areas of our units and thus serves as a check
+list and provides guidance for the establishment and documen-
+tation of internal controls.
+Assessment
+COSO Framework
+An E.ON unit called E.ON Business Services and external ser-
+vice providers provide IT services for the majority of the units
+at the E.ON Group. The effectiveness of the automated controls
+in the standard accounting software systems and in key addi-
+tional applications depends to a considerable degree on the
+proper functioning of IT systems. Consequently, IT controls
+are embedded in our documentation system. These controls
+primarily involve ensuring the proper functioning of access-
+control mechanisms of systems and applications, of daily IT
+operations (such as emergency measures), of the program
+change process, and of E.ON SE's central consolidation system.
+72 Disclosures Regarding Takeovers
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The Supervisory Board is authorized to decide by resolution
+on amendments to the Articles of Association that affect only
+their wording (Section 10, Paragraph 7, of the Articles of Asso-
+ciation). Furthermore, the Supervisory Board is authorized to
+revise the wording of Section 3 of the Articles of Association
+upon utilization of authorized or conditional capital.
+Resolutions of the Shareholders Meeting require a majority of
+the valid votes cast unless the law or the Articles of Asso-
+ciation explicitly prescribe otherwise. An amendment to the
+Articles of Association requires a two-thirds majority of the
+votes cast or, in cases where at least half of the share capital
+is represented, a simple majority of the votes cast unless the
+law explicitly prescribes another type of majority.
+71
+The Supervisory Board appoints members to the Board of
+Management for a term not exceeding five years; reappoint-
+ment is permissible. If more than one person is appointed
+as a member of the Board of Management, the Supervisory
+Board may appoint one of the members as Chairperson of
+the Board of Management. If a Board of Management member
+is absent, in the event of an urgent matter, the court makes
+the necessary appointment upon petition by a concerned
+party. The Supervisory Board may revoke the appointment of
+a member of the Board of Management and the Chairperson
+of the Board of Management for serious cause (for further
+details, see Sections 84 and 85 of the AktG).
+Pursuant to Section 71b of the German Stock Corporation Act
+(known by its German abbreviation, "AktG"), the Company's
+own shares give it no rights, including no voting rights.
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the
+next calendar year plus one. As a rule, an employee may not
+sell such shares until the blackout period has expired.
+Restrictions on Voting Rights or the Transfer of
+Shares
+The share capital totals €2,001,000,000.00 and consists of
+2,001,000,000 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a
+Shareholders Meeting.
+Composition of Share Capital
+Disclosures Pursuant to Section 289, Paragraph 4,
+and Section 315, Paragraph 4, of the German Com-
+mercial Code
+Legal Provisions and Rules of the Company's Articles
+of Association Regarding the Appointment and
+Removal of Board of Management Members and
+Amendments to the Articles of Association
+Pursuant to the Company's Articles of Association, the Board
+of Management consists of at least two members. The Super-
+visory Board decides on the number of members as well as
+on their appointment and dismissal.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Positive developments in foreign-currency rates and market
+prices for commodities (electricity, natural gas, coal, oil, and
+carbon) can create opportunities for our operating business.
+Periods of exceptionally cold weather-very low average tem-
+peratures or extreme daily lows-in the fall and winter months
+can create opportunities for us to meet higher demand for
+electricity and natural gas.
+The EU internal energy market was supposed to be completed
+in 2014 and serve as the first step towards a long-term Euro-
+pean energy strategy. Nevertheless, many member states are
+pursuing their own agenda, aspects of which are not compat-
+ible with EU policy objectives. An example of this is the dif-
+ferent approaches member states are taking with regard to
+capacity markets. We believe that European market integra-
+tion is currently being accompanied by the development of
+markets that have strong national orientation. This could lead
+to a situation in which E.ON, which operates across Europe,
+can look for new opportunities in a fragmented regulatory
+environment.
+Changes in our regulatory environment could create opportu-
+nities. Market developments could also have a positive impact
+on our business. Such factors include wholesale and retail price
+developments and higher customer churn rates.
+E.ON has filed a suit for damages against the states of Lower
+Saxony and Bavaria and against the Federal Republic of
+Germany for the nuclear-energy moratorium that was ordered
+following the reactor accident in Fukushima. The suit, which
+was filed with the Hanover State Court, seeks approximately
+€380 million in damages which E.ON incurred when, in March
+2011, Unterweser and Isar 1 NPPs were required to temporarily
+suspend operations for several months until the thirteenth
+amended version of the Atomic Energy Act, which specifies the
+modalities for Germany's accelerated phaseout of nuclear
+energy, took effect.
+The reactor accident in Fukushima led the political parties
+in Germany's coalition government to reverse their policy
+regarding nuclear energy. After extending the operating lives of
+nuclear power plants ("NPPs") in the fall of 2010 in line with
+the stipulations of that government's coalition agreement, the
+federal government rescinded the extensions in the thirteenth
+amended version of Germany's Atomic Energy Act ("the Act")
+and established a number of stricter rules. E.ON considers the
+nuclear phaseout, under the current legislation, to be irrecon-
+cilable with our constitutionally protected right to property
+and right to operate a business. It is our view that such an
+intervention is unconstitutional unless compensation is granted
+for the rights so deprived and for the resulting stranded assets.
+Consequently, in mid-November 2011 E.ON filed a constitutional
+complaint against the thirteenth amendment of the Act to
+Germany's Federal Constitutional Court in Karlsruhe. We believe
+that the nuclear-fuel tax contravenes Germany's constitution
+and European law. E.ON is therefore instituting administrative
+proceedings and taking legal action against the tax as well.
+Our view was affirmed by the Hamburg Fiscal Court and the
+Munich Fiscal Court. After the Federal Fiscal Court overturned
+the suspension of the tax, the matter now awaits conclusive
+adjudication by the Federal Constitutional Court and the Euro-
+pean Court of Justice.
+We conduct a bottom-up process at half-yearly intervals (at
+the end of the second and fourth quarters) in which the lead
+companies of our units in and outside Germany as well as
+certain E.ON SE departments follow Group-wide guidelines to
+identify and report opportunities that they deem sufficiently
+concrete and substantial. An opportunity is substantial within
+the meaning of our guidelines if it could have a significant
+positive effect on the asset, financial, or earnings situation of
+E.ON companies and/or segments.
+We combined our European trading operations at the start
+of 2008. This enables us to seize opportunities created by the
+increasing integration of European power and gas markets
+and of commodity markets, which are already global in scope.
+For example, in view of market developments in the United
+Kingdom and Continental Europe, trading at European gas hubs
+can create additional sales and procurement opportunities.
+Opportunity Report
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Supervisory Board and Board of Management
+Tables and Explanations
+In addition, the ongoing optimization of gas transport and
+storage rights and of the availability and utilization of our
+power and gas facilities (shorter project timelines or shorter
+facility outages) could yield opportunities.
+69
+70 Internal Control System for the Accounting Process
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Internal Control and Risk Management System
+Internal controls are an integral part of our accounting pro-
+cesses. Guidelines, called Internal_Controls@E.ON, define
+uniform financial-reporting requirements and procedures for
+the entire E.ON Group. These guidelines encompass a defi-
+nition of the guidelines' scope of application; a Risk Catalog
+(ICS Model); standards for establishing, documenting, and
+evaluating internal controls; a Catalog of ICS Principles; a
+description of the test activities of our Internal Audit division;
+and a description of the final Sign-Off process. We believe
+that compliance with these rules provides sufficient certainty
+to prevent error or fraud from resulting in material misre-
+presentations in the Consolidated Financial Statements, the
+Combined Group Management Report, and the Interim Reports.
+The following explanations about our Internal Control System
+and our general IT controls apply to the Consolidated Financial
+Statements and E.ON SE's Financial Statements.
+E.ON SE's Financial Statements are also prepared with SAP
+software. The accounting and preparation processes are divided
+into discrete functional steps. We transferred bookkeeping
+processes to our Business Service Centers: processes relating
+to subsidiary ledgers and bank activities were transferred to
+Cluj, those relating to the general ledgers to Regensburg.
+Automated or manual controls are integrated into each step.
+Defined procedures ensure that all transactions and the
+preparation of E.ON SE's Financial Statements are recorded,
+processed, assigned on an accrual basis, and documented in
+a complete, timely, and accurate manner. Relevant data from
+E.ON SE's Financial Statements are, if necessary, adjusted to
+conform with IFRS and then transferred to the consolidation
+software system using SAP-supported transfer technology.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information is compiled. Further-
+more, dedicated quality-control processes are in place for all
+relevant departments to discuss and ensure the completeness
+of relevant information on a regular basis.
+E.ON Group companies are responsible for preparing their
+financial statements in a proper and timely manner. They
+receive substantial support from Business Service Centers in
+Regensburg, Germany, and Cluj, Romania. The financial state-
+ments of subsidiaries belonging to E.ON's scope of consolida-
+tion are audited by the subsidiaries' respective independent
+auditor. E.ON SE then combines these statements into its Con-
+solidated Financial Statements using uniform SAP consolidation
+software. The E.ON Center of Competence for Consolidation
+is responsible for conducting the consolidation and for moni-
+toring adherence to guidelines for scheduling, processes, and
+contents. Monitoring of system-based automated controls is
+supplemented by manual checks.
+All companies included in the Consolidated Financial Statements
+must comply with our uniform Accounting and Reporting
+Guidelines for the Annual Consolidated Financial Statements
+and the Interim Consolidated Financial Statements. These
+guidelines describe applicable IFRS accounting and valuation
+principles. They also explain accounting principles typical in
+the E.ON Group, such as those for provisions for nuclear-waste
+management and the treatment of regulatory obligations.
+We continually analyze amendments to laws, new or amended
+accounting standards, and other pronouncements for their
+relevance to and consequences for our Consolidated Financial
+Statements and, if necessary, update our guidelines and sys-
+tems accordingly.
+Accounting Process
+We prepare a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the German
+Energy Act.
+We apply Section 315a (1) of the German Commercial Code and
+prepare our Consolidated Financial Statements in accordance
+with International Financial Reporting Standards ("IFRS") and
+the interpretations of the International Financial Reporting
+Interpretations Committee that were adopted by the European
+Commission for use in the EU as of the end of the fiscal year
+and whose application was mandatory as of the balance-sheet
+date (see Note 1 to the Consolidated Financial Statements).
+Our global units and certain of our regional units are our IFRS
+reportable segments.
+Disclosures Pursuant to Section 289, Paragraph 5
+and Section 315, Paragraph 2, Item 5 of the German
+Commercial Code on the Internal Control System
+for the Accounting Process
+Combined Group Management Report
+Consolidated Financial Statements
+Supervisory Board and Board of Management
+Tables and Explanations
+Board of Management's Power to Issue or Buy Back
+Shares
+Düsseldorf, December 15, 2014
+Annual press conference
+•
+Annual Report
+•
+Interim Reports
+For the Supervisory Board of E.ON SE
+•
+Transparency is a high priority of E.ON SE's Board of Manage-
+ment and Supervisory Board. Our shareholders, all capital
+market participants, financial analysts, shareholder associations,
+and the media regularly receive up-to-date information about
+the situation of, and any material changes to, the Company.
+We primarily use the Internet to help ensure that all investors
+have equal access to comprehensive and timely information
+about the Company.
+Transparent Management
+In 2014 the Board of Management and Supervisory Board paid
+close attention to E.ON's compliance with the German Corpo-
+rate Governance Code's recommendations and suggestions.
+They determined that E.ON fully complies with all of the Code's
+recommendations and with nearly all of its suggestions.
+The Board of Management and the Supervisory Board further-
+more declare that E.ON SE has been in compliance in full with
+the recommendations of the "Government Commission German
+Corporate Governance Code," dated May 13, 2013, published
+by the Federal Ministry of Justice in the official section of the
+Federal Gazette (Bundesanzeiger) since the last declaration
+on December 16, 2013.
+Declaration Made in Accordance with Section 161 of
+the German Stock Corporation Act by the Board of
+Management and the Supervisory Board of E.ON SE
+The Board of Management and the Supervisory Board hereby
+declare that E.ON SE will comply in full with the recommen-
+dations of the "Government Commission German Corporate
+Governance Code," dated June 24, 2014, published by the Fed-
+eral Ministry of Justice in the official section of the Federal
+Gazette (Bundesanzeiger).
+Corporate Governance Declaration in Accordance
+with Section 289a of the German Commercial Code
+E.ON SE issues reports about its situation and earnings by
+the following means:
+Werner Wenning
+(Chairman of the Supervisory Board of E.ON SE)
+For the Board of Management of E.ON SE
+Dr. Johannes Teyssen
+Directors' Dealings
+Corporate Governance Report
+76
+The financial calendar and ad hoc statements are available
+on the Internet at www.eon.com.
+In addition to the Company's periodic financial reports, the
+Company issues ad hoc statements when events or changes
+occur at E.ON SE that could have a significant impact on the
+price of E.ON stock.
+A financial calendar lists the dates on which the Company's
+financial reports are released.
+Numerous events for financial analysts in and outside
+Germany.
+Interim Reports and the Annual Report
+Telephone conferences held on release of the quarterly
+Press releases
+•
+E.ON views good corporate governance as a central founda-
+tion of responsible and value-oriented management, efficient
+collaboration between the Board of Management and the
+Supervisory Board, transparent disclosures, and appropriate
+risk management.
+Relevant Information about Management Practices
+Corporate Governance
+The declaration is continuously available to the public on the
+Company's Internet page at www.eon.com.
+(Chairman of the Board of Management of E.ON SE)
+75
+Integrity
+75
+Combined Group Management Report
+Consolidated Financial Statements
+to be sold and transferred against contribution in kind
+to be sold and transferred against cash consideration
+•
+With regard to treasury shares that will be or have been
+acquired based on the above-mentioned authorization and/or
+prior authorizations by the Shareholders Meeting, the Board
+of Management is authorized, subject to the Supervisory
+Board's consent and excluding shareholder subscription rights,
+to use these shares-in addition to a disposal through a stock
+exchange or an offer granting a subscription right to all
+shareholders-as follows:
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, in pursuit of one or
+more objectives by the Company and also by affiliated com-
+panies or by third parties for the Company's account or its
+affiliates' account.
+by use of derivatives (put or call options or a combination
+of both).
+to be used in order to satisfy the rights of creditors of
+bonds with conversion or option rights or, respectively,
+conversion obligations issued by the Company or its
+Group companies
+by means of a public offer or a public solicitation to
+submit offers for the exchange of liquid shares that are
+admitted to trading on an organized market, within the
+meaning of the German Securities Purchase and Take-
+over Law, for Company shares
+.
+•
+through a stock exchange
+•
+At the Board of Management's discretion, the acquisition may
+be conducted:
+Pursuant to a resolution of the Shareholders Meeting of May 3,
+2012, the Company is authorized, until May 2, 2017, to acquire
+own shares. The shares acquired and other own shares that
+are in possession of or to be attributed to the Company pur-
+suant to Sections 71a et seq. of the AktG must altogether at
+no point account for more than 10 percent of the Company's
+share capital.
+by means of a public offer directed at all shareholders or
+a public solicitation to submit offers
+to be offered for purchase and transferred to individuals
+who are employed by the Company or one of its affiliates.
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, separately or collectively
+by the Company and also by Group companies or by third
+parties for the Company's account or its affiliates' account.
+In addition, the Board of Management is authorized to cancel
+treasury shares, without such cancellation or its implemen-
+tation requiring an additional resolution by the Shareholders
+Meeting.
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+A change-of-control event would also result in the early payout
+of performance rights under the E.ON Share Performance Plan.
+In the event of a premature loss of a Board of Management
+position due to a change-of-control event, the service agree-
+ments of Board of Management members entitle them to
+severance and settlement payments (see the detailed presen-
+tation in the Compensation Report).
+Settlement Agreements between the Company and
+Board of Management Members or Employees in
+the Case of a Change-of-Control Event
+Debt issued since 2007 contains change-of-control clauses that
+give the creditor the right of cancellation. This applies, inter
+alia, to bonds issued by E.ON International Finance B.V. and
+guaranteed by E.ON SE, promissory notes issued by E.ON SE,
+and other instruments such as credit contracts. Granting
+change-of-control rights to creditors is considered good corpo-
+rate governance and has become standard market practice.
+Further information about financial liabilities is contained in
+the section of the Combined Group Management Report
+entitled Financial Situation and in Note 26 to the Consolidated
+Financial Statements.
+Significant Agreements to which the Company Is a
+Party That Take Effect on a Change of Control of the
+Company Following a Takeover Bid
+the conditional capital pursuant to Section 3 of the Articles
+of Association of E.ON AG has not yet been implemented at
+the point in time when the conversion of E.ON AG into a Euro-
+pean Company ("SE") becomes effective in accordance with
+the conversion plan dated March 6, 2012. The conditional capital
+increase was not utilized.
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in
+the amount of €175 million, which is authorized until May 2,
+2017. The conditional capital increase will be implemented
+only to the extent required to fulfill the obligations arising on
+the exercise by holders of option or conversion rights, and
+those arising from compliance with the mandatory conversion
+of bonds with conversion or option rights, profit participation
+rights and income bonds that have been issued or guaranteed
+by E.ON SE or a Group company of E.ON SE as defined by
+Section 18 AktG, and to the extent that no cash settlement has
+been granted in lieu of conversion and no E.ON SE treasury
+shares or shares of another listed company have been used
+to service the rights. However, this conditional capital increase
+only applies up to the amount and number of shares in which
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Board of Management was
+authorized, subject to the Supervisory Board's approval, to
+increase until May 2, 2017, the Company's capital stock by
+a total of up to €460 million through one or more issuances
+of new registered no-par-value shares against contributions in
+cash and/or in kind (with the option to restrict shareholders'
+subscription rights); such increase shall not, however, exceed
+the amount and number of shares in which the authorized
+capital pursuant to Section 3 of the Articles of Association of
+E.ON AG still exists at the point in time when the conversion
+of E.ON AG into a European Company ("SE") becomes effective
+pursuant to the conversion plan dated March 6, 2012 (autho-
+rized capital pursuant to Sections 202 et seq. AktG). Subject to
+the Supervisory Board's approval, the Board of Management
+is authorized to exclude shareholders' subscription rights. The
+authorized capital increase was not utilized.
+In each case, the Board of Management will inform the Share-
+holders Meeting about the reasons for and the purpose of
+the acquisition of treasury shares, the number of treasury
+shares acquired, the amount of the registered share capital
+attributable to them, the portion of the registered share capi-
+tal represented by them, and their equivalent value.
+Disclosures Regarding Takeovers
+74
+73
+Supervisory Board and Board of Management
+Tables and Explanations
+General Principles
+2013
+CEO Letter
+2013
+557,940 22,991,882 15,561,093
+2014
+606,883
+2014
+2013
+930,000 1,249,640 1,261,272
+2013
+2014
+930,000
+75
+75
+Dr. Johannes Teyssen
+2013
+2014
+(€)
+(€)
+(€)
+(€)
+Thereof interest cost
+compensation
+annual base
+As a percentage of
+87
+Cash value at
+December 31
+2014
+Additions to provisions for pensions
+2013
+(since July 1, 2013)
+Regine Stachelhaus¹
+(until September 30, 2013)
+Dr. Marcus Schenck
+(since September 1, 2013)
+7,326,862
+356,556 13,188,286 10,519,155
+410,247
+55,574
+198,794
+410,247 1,156,390
+490,000 490,000
+70
+70
+Klaus Schäfer1,2
+Dr. Bernhard Reutersberg
+420,000
+60
+(until March 31, 2013)
+Prof. Dr. Klaus-Dieter Maubach
+768,503 163,494
+29,555 1,702,035 1,121,712
+6,376
+43,747
+286,783 163,494
+346,559 351,268
+Jørgen Kildahl1
+Dr.-Ing. Leonhard Birnbaum¹
+Current pension entitlement at December 31
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+117,194
+544,499
+8,766
+40,880
+216,667
+858,000
+Klaus Schäfer (since September 1, 2013)
+833,862
+988,427
+67,620
+40,472
+1,200,000
+852,420
+Dr. Bernhard Reutersberg
+-95,773
+Prof. Dr. Klaus-Dieter Maubach (until March 31, 2013)
+823,973
+991,915
+67,620
+41,902
+1,200,000
+Dr. Marcus Schenck (until September 30, 2013)
+-569,363
+Regine Stachelhaus (until June 30, 2013)
+-52,255
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Pensions of the Members of the Board of Management
+The following table provides an overview of the current pension
+obligations to Board of Management members, the additions
+to provisions for pensions, and the cash value of pension obli-
+gations. The cash value of pension obligations is calculated
+pursuant to IFRS. An actuarial interest rate of 2.0 percent (prior
+year: 3.9 percent) was used for discounting.
+Board of Management Pensions in 2014
+Long-term variable compensation granted for the 2014 financial
+year totaled €6.3 million, on par with the prior-year figure of
+€6.4 million. Note 11 to the Consolidated Financial Statements
+contains additional details about stock-based compensation.
+3Expenses in accordance with IFRS 2 for performance rights and virtual shares existing in the 2014 financial year.
+I
+¹Consists of the LTI component (based on the target bonus) for the respective financial year for which at the time of granting no amount can be determined.
+2We adjusted the figures for stock-based compensation for the 2013 financial year in line with the current version of the German Corporate Governance Code, which, unlike
+previously, now calls for the target value of the LTI component to be disclosed.
+671,531
+6,043,916 3,347,989
+349,803
+299,086
+6,394,167
+38,504
+40,880
+737,500
+858,000
+6,279,119
+Total
+Mike Winkel (since April 1, 2013)
+357,188
+871,950
+I
+89,020
+858,000 216,667
+6,321
+20,800
+186,000
+789,333
+700,000 233,333
+(since September 1, 2013)
+Dr. Marcus Schenck
+Klaus Schäfer
+2,154,100 2,792,317
+852,420 1,200,000
+258,095
+3,095
+26,563
+29,529
+865,754
+572,151
+700,000 700,000
+Dr. Bernhard Reutersberg¹
+80,000
+175,000
+(until March 31, 2013)
+2,831,878 1,740,082
+2,163,527 2,784,601
+2,368,133
+449,082 1,048,667 550,000
+32,650 871,950 1,200,000
+642,321
+675,000
+²The target value of stock-based compensation of the second tranche of the E.ON Share Matching Plan was €13.65 per virtual share of E.ON stock.
+¹The bonus for the 2014 financial year includes the final setting of the long-term portion of the bonus for the 2012 financial year. Pursuant to the previous bonus system (see page 86 of
+the 2012 Annual Report), this resulted in reductions of €434,398 for Dr. Teyssen, €217,182 for Mr. Kildahl, and €217,182 for Dr. Reutersberg.
+587,945 6,279,119 6,394,167 16,199,993 18,096,250
+18,516 858,000 737,500 2,372,529 1,782,849
+25,196
+172,704
+501,833
+6,115,805
+789,333
+4,908,170
+4,840,000 4,998,333
+Total
+700,000 525,000
+(since April 1, 2013)
+Mike Winkel
+668,397
+13,397
+305,000
+350,000
+(until June 30, 2013)
+Regine Stachelhaus
+1,916,391
+16,863
+1,224,528
+(until September 30, 2013)
+19,211
+19,426
+341,000
+851,951
+964,000
+572,151
+The total compensation of the members of the Board of Man-
+agement in the 2014 financial year amounted to €16.2 million,
+approximately 10 percent below the prior-year figure of
+€18.1 million. Individual members of the Board of Management
+received the following total compensation:
+Total Compensation in 2014
+88 Corporate Governance Report
+The cash value of Board of Management pensions for which
+provisions are required increased significantly relative to year-
+end 2013. The reason for the increase is that the most impor-
+tant valuation parameter-the actuarial interest rate used
+for discounting-was significantly below the prior-year figure
+due to the general development of interest rates in 2014.
+2Cash value includes benefit entitlements accrued in the E.ON Group prior to joining the Board of Management.
+2,080,619
+57,523 3,756,844
+165,895 81,144
+207,066
+837,048
+14,043
+164,690
+¹Contribution Plan E.ON Management Board.
+(since April 1, 2013)
+Mike Winkel 1,2
+(until June 30, 2013)
+3,114,834
+120,729
+703,465
+31,242 4,072,393 2,571,968
+100,307
+Total Compensation of the Board of Management
+Fixed annual
+compensation
+Bonus
+800,000 400,000
+700,000 700,000
+Jørgen Kildahl¹
+(since July 1, 2013)
+Dr.-Ing. Leonhard Birnbaum
+2013
+5,511,197
+4,309,826
+2014
+2013
+2014
+2013
+21,458 1,790,082 2,490,000
+2014
+58,542
+1,759,739
+253,183
+1,240,000 1,240,000 1,221,202
+2013
+2014
+³The 2013 figure stock-based compensation has been corrected pursuant to the latest version of the Code. Contrary to previous practice, the LTI component is disclosed on the basis of
+target value.
+2014
+€
+Total
+granted 2,3
+compensation
+Value of stock-based
+Other compensation
+Dr. Johannes Teyssen¹
+Jørgen Kildahl
+Prof. Dr. Klaus-Dieter Maubach
+735,355
+Fixed Compensation
+In addition, there is a graphic on page 94 that provides a
+summary overview of the individual components of the Board
+of Management's compensation described below as well as
+their respective metrics and parameters.
+Corporate Governance Report
+82
+81
+Base salary
+STI component
+Paid out
+2/3:
+Bonus
+Transferred into
+virtual shares
+Granting of
+virtual shares
+return on capital
+Granting of virtual
+shares based on
+LTI component
+1/3:
+Base Matching
+Share
+Matching
+Plan
+Performance
+Matching
+The following graphic provides an overview of the compen-
+sation plan for Board of Management members:
+¹Not including non-cash compensation, other benefits, and pension benefits.
+Board of Management members receive their fixed compen-
+sation in twelve monthly payments.
+(Share Matching Plan) 30%
+Board of Management members receive a number of contrac-
+tual fringe benefits, including the use of a chauffeur-driven
+company car. The Company also provides them with the nec-
+essary telecommunications equipment, covers costs that
+include those for an annual medical examination, and pays
+the premium for an accident insurance policy.
+Since 2010 more than 60 percent of Board of Management
+members' long-term variable compensation depends on the
+achievement of long-term targets, ensuring that the variable
+။
+• If necessary, adjusted by the Supervisory Board
+-30% budget +30% EBITDA
+0%
+50%
+100%
+150%
+200%
+• Individual targets
+• Team targets
+Evaluation of a Board of Management member's
+performance based on:
+Individual Performance (70-130%)
+Target attainment
+• Actual EBITDA vs. budget
+Company performance (0-200%)
+Bonus
+(target
+bonus)
+Bonus Mechanism
+The amount of the bonus is determined by the degree to which
+certain performance targets are attained. The target-setting
+mechanism consists of company performance targets and
+individual performance targets:
+The annual bonus mechanism consists of two components:
+a short-term incentive component ("STI component") and a
+long-term incentive component ("LTI component'). The STI com-
+ponent generally accounts for two-thirds of the annual bonus.
+The LTI component accounts for one-third of the annual bonus
+to a maximum of 50 percent of the target bonus. The LTI com-
+ponent is not paid out at the conclusion of the financial year
+but is instead transferred into virtual shares, which have a
+four-year vesting period, based on E.ON's stock price.
+Annual Bonus
+compensation is sustainable under the criteria of Section 87
+of the German Stock Corporation Act.
+Performance-Based Compensation
+Long-term incentive
+Bonus
+(multi-year) 13%
+(annual) 27%
+promptly inform the Chairperson of the Audit and Risk
+Committee should any such facts arise during the course
+of the audit unless such facts are promptly resolved in
+satisfactory manner
+In being assigned the audit task, the independent auditor
+agrees to:
+risk situation, risk-bearing capacity, and risk management.
+The effectiveness of the internal control mechanisms for the
+accounting process used at E.ON SE and the global and regional
+units is tested on a regular basis by our Internal Audit division;
+the Audit and Risk Committee regularly monitors the work
+done by the Internal Audit division and the definition of audit
+priorities. In addition, the Audit and Risk Committee prepares
+the proposal on the selection of the Company's independent
+auditor for the Annual Shareholders Meeting. In order to ensure
+the auditor's independence, the Audit and Risk Committee
+secures a statement from the proposed auditors detailing any
+facts that could lead to the audit firm being excluded for inde-
+pendence reasons or otherwise conflicted.
+Corporate Governance Report
+80
+79
+The Audit and Risk Committee consists of four members who
+should have special knowledge in the field of accounting or
+business administration. In line with Section 100, Paragraph 5,
+AktG, and the German Corporate Governance Code, the Chair-
+person has special knowledge and experience in the appli-
+cation of accounting principles and internal control processes.
+In particular, the Audit and Risk Committee monitors the
+Company's accounting and the accounting process; the effec-
+tiveness of internal control systems, internal risk management,
+and the internal audit system; compliance; and the indepen-
+dent audit. With regard to the independent audit, the com-
+mittee also deals with the definition of the audit priorities and
+the agreement regarding the independent auditor's fees.
+The Audit and Risk Committee also prepares the Supervisory
+Board's decision on the approval of the Financial Statements
+of E.ON SE and the Consolidated Financial Statements. It also
+examines the Company's quarterly Interim Reports and
+discusses the audit review of the Interim Reports with the
+independent auditor and regularly reviews the Company's
+The Executive Committee consists of four members: the
+Supervisory Board Chairperson, his or her two Deputies, and
+a further employee representative. It prepares the meetings
+of the Supervisory Board and advises the Board of Manage-
+ment on matters of general policy relating to the Company's
+strategic development. In urgent cases (in other words, if
+waiting for the Supervisory Board's prior approval would mate-
+rially prejudice the Company), the Executive Committee acts
+on the full Supervisory Board's behalf. In addition, a key task
+of the Executive Committee is to prepare the Supervisory
+Board's personnel decisions and resolutions for setting the
+respective total compensation of individual Board of Manage-
+ment members within the meaning of Section 87, AktG.
+Furthermore, it is responsible for the conclusion, alteration, and
+termination of the service agreements of Board of Manage-
+ment members and for presenting the Supervisory Board with
+a proposal for a resolution on the Board of Management's
+compensation plan and its periodic review. It also deals with
+corporate-governance matters and reports to the Supervisory
+Board, generally once a year, on the status and effectiveness
+of, and possible ways of improving, the Company's corporate
+governance and on new requirements and developments in
+this area.
+The Supervisory Board has established the following committees
+and defined policies and procedures for them:
+In addition, under the Supervisory Board's policies and proce-
+dures, Supervisory Board members are required to disclose
+to the Supervisory Board any conflicts of interest, particularly
+if a conflict arises from their advising, or exercising a board
+function with, one of E.ON's customers, suppliers, creditors, or
+other third parties. The Supervisory Board reports any conflicts
+of interest to the Annual Shareholders Meeting and describes
+how the conflicts have been dealt with. Any material conflict
+of interest of a non-temporary nature should result in the ter-
+mination of a member's appointment to the Supervisory Board.
+There were no conflicts of interest involving members of the
+Supervisory Board in 2014. Any consulting or other service
+agreements between the Company and a Supervisory Board
+member require the Supervisory Board's consent. No such
+agreements existed in 2014.
+In its current composition the Supervisory Board already meets
+the targets it set for a sufficient number of independent
+members, company-specific qualification requirements, and
+diversity. The Supervisory Board has two female members,
+both of whom are shareholder representatives. As of the
+balance sheet date, women therefore accounted for 33 percent
+of shareholder representatives and about 17 percent of the
+Supervisory Board as a whole.
+On December 13, 2010, the E.ON AG Supervisory Board first set
+targets for its composition. These included the target of con-
+tinually increasing the number of women on the Supervisory
+Board, which at that time had two women: one shareholder
+representative and one employee representative. Following
+the election of another female shareholder representative in
+2011 and the Company's transformation into a Societas Euro-
+paea ("SE") (which reduced the Supervisory Board to twelve
+members), we have already achieved the target of doubling the
+number of woman members, a target originally set for the
+Supervisory Board's next regular election in May 2013, because
+at this time 25 percent of the Supervisory Board's members
+are women. We stand by our original target of increasing
+women's representation on the Supervisory Board to 30 percent
+as of the regular election in 2018."
+In view of the E.ON Group's international orientation, the Super-
+visory Board should include a sufficient number of members
+who have spent a significant part of their professional career
+abroad.
+If the qualifications of several candidates for the Supervisory
+Board meet, to an equal degree, the general and company-
+related requirements, the Supervisory Board intends to consider
+other criteria in its nomination of candidates in order to
+increase the Supervisory Board's diversity.
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+246,532
+promptly inform the Supervisory Board of anything arising
+during the course of the audit that is of relevance to the
+Supervisory Board's duties
+inform the Chairperson of the Audit and Risk Committee of,
+or to note in the audit report, any facts that arise during
+the audit that contradict the statements submitted by
+the Board of Management or Supervisory Board in connec-
+tion with the German Corporate Governance Code.
+The Finance and Investment Committee consists of four
+members. It advises the Board of Management on all issues
+of Group financing and investment planning. It decides on
+behalf of the Supervisory Board on the approval of the acqui-
+sition and disposition of companies, equity interests, and
+parts of companies whose value exceeds €500 million, or
+2.5 percent of the equity listed in the Company's most recent
+Consolidated Balance Sheet, but does not exceed €1 billion.
+In addition, it decides on behalf of the Supervisory Board on
+5 percent, but not 10 percent, of the equity listed in the Com-
+pany's most recent Consolidated Balance Sheet if such mea-
+sures are not covered by the Supervisory Board's resolutions
+regarding finance plans. If the value of any such transactions
+or measures exceeds the above-mentioned thresholds, the
+Finance and Investment Committee prepares the Supervisory
+Board's decision.
+Bonus
+Base salary 30%
+Compensation Structure¹
+The compensation of Board of Management members consists
+of a fixed base salary, an annual bonus, and long-term variable
+remuneration. These components account for approximately
+the following percentages of total compensation:
+The Supervisory Board approves the Executive Committee's
+proposal for the Board of Management's compensation plan.
+It reviews the plan and the appropriateness of the Board of
+Management's total compensation as well as the individual
+components on a regular basis and, if necessary, makes adjust-
+ments. It considers the provisions of the German Stock Cor-
+poration Act and follows the German Corporate Governance
+Code's recommendations and suggestions.
+The purpose of the Board of Management compensation plan,
+which was last revised in 2013, is to create an incentive for
+successful and sustainable corporate governance and to link
+the compensation of Board of Management members' with
+the Company's actual (short-term and long-term) performance
+while also factoring in their individual performance. Under
+the plan, Board of Management members' compensation is
+therefore transparent, performance-based, closely aligned
+with the Company's business success, and, in particular, based
+on long-term targets. At the same time, the compensation
+plan serves to align management's and shareholders' interests
+and objectives by basing long-term variable compensation
+on E.ON's stock price.
+Basic Features of the Board of Management
+Compensation Plan
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Board of
+Management and Supervisory Board and provides information
+about the compensation granted and paid in 2014. It applies
+the provisions of accounting standards for capital-market-
+oriented companies (the German Commercial Code, German
+Accounting Standards, and International Financial Reporting
+Standards) and the recommendations of the German Corpo-
+rate Governance Code dated June 24, 2014.
+Compensation Report pursuant to Section 289,
+Paragraph 2, Item 5 and Section 315, Paragraph 2,
+Item 4 of the German Commercial Code
+Supervisory Board and Board of Management
+Tables and Explanations
+Bonus (maximum of
+Consolidated Financial Statements
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+At the Annual Shareholders Meeting on April 30, 2014 Price-
+waterhouseCoopers Aktiengesellschaft, Wirtschaftsprüfungs-
+gesellschaft, was selected to be E.ON SE's independent auditor
+for the 2014 financial year. Under German law, the shareholders
+meeting selects the company's independent auditor for one
+financial year. The independent auditors with signing authority
+for the Annual Financial Statements of E.ON SE and the Con-
+solidated Financial Statements are Markus Dittmann (for the
+first time) and Michael Preiß (since the 2013 financial year).
+E.ON therefore complies with the legal requirements and
+rotation obligations contained in Sections 319 and 319a of
+the German Commercial Code.
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+At the Annual Shareholders Meeting, shareholders may vote
+their shares themselves, through a proxy of their choice,
+or through a Company proxy who is required to follow the
+shareholder's voting instructions.
+Shareholders and Annual Shareholders Meeting
+E.ON SE shareholders exercise their rights and vote their
+shares at the Annual Shareholders Meeting. The Company's
+financial calendar, which is published in the Annual Report,
+in the quarterly Interim Reports, and on the Internet at
+www.eon.com, regularly informs shareholders about important
+Company dates.
+All committees meet at regular intervals and when specific
+circumstances require it under their policies and procedures.
+The Report of the Supervisory Board (on pages 4 to 9) contains
+information about the activities of the Supervisory Board
+and its committees in 2013. Pages 216 and 217 show the com-
+position of the Supervisory Board and its committees.
+The Nomination Committee consists of three shareholder-
+representative members. Its Chairperson is the Chairperson
+of the Supervisory Board. Its task is to recommend to the
+Supervisory Board, taking into consideration the Supervisory
+Board's targets for its composition, suitable candidates for
+election to the Supervisory Board by the Annual Shareholders
+Meeting.
+Combined Group Management Report
+200% of target bonus)
+the approval of financing measures whose value exceeds
+LTI
+compo-
+nent
+The annual bonuses of Board of Management members for
+2014 totaled €4.9 million, which is about 20 percent below
+the prior-year figure of €6.1 million. The decline is primarily
+attributable to a reduction resulting from the final setting of
+Performance-Based Compensation in 2014
+Board of Management Compensation in 2014
+The Supervisory Board reviewed the Board of Management's
+compensation plan and the components of individual members'
+compensation. It determined that the Board of Management's
+compensation is appropriate from both a horizontal and
+vertical perspective and passed a resolution on the perfor-
+mance-based compensation described below. It made its
+determination of customariness from a horizontal perspective
+by comparing the compensation with that of companies of a
+similar size. Its review of appropriateness included a vertical
+comparison of the Board of Management's compensation with
+that of the Company's top management and the rest of its
+workforce. In the Supervisory Board's view, in 2014 there was
+no reason to adjust the Board of Management's compensation.
+86 Corporate Governance Report
+85
+The service agreements of Board of Management members
+include a non-compete clause. For a period of six months after
+the termination of their service agreement, Board of Manage-
+ment members are contractually prohibited from working
+directly or indirectly for a company that competes directly or
+indirectly with the Company or its affiliates. Board of Manage-
+ment members receive a compensation payment for the period
+of the non-compete restriction. The prorated payment is based
+on 100 percent of their contractually stipulated annual target
+compensation (without long-term variable compensation) but
+is, at a minimum, 60 percent of their most recently received
+compensation.
+In the event of a premature loss of a Board of Management
+position due to a change-of-control event, Board of Management
+members are entitled to settlement payments. The change-
+in-control agreements stipulate that a change of control exists
+in three cases: a third party acquires at least 30 percent of
+the Company's voting rights, thus triggering the automatic
+requirement to make an offer for the Company pursuant to
+Germany's Stock Corporation Takeover Law; the Company, as
+a dependent entity, concludes a corporate agreement; the
+Company is merged with another company. Board of Manage-
+ment members are entitled to a settlement payment if, within
+12 months of the change in control, their service agreement is
+terminated by mutual consent, expires, or is terminated by
+them (in the latter case, however, only if their position on the
+Board of Management is materially affected by the change
+of control). Board of Management members' settlement pay-
+ment consists of their base salary and target bonus plus fringe
+benefits for two or three years. To reflect discounting and
+setting off of payment for services rendered to other companies
+or organizations, payments will be reduced by 20 percent. If a
+Board of Management member is above the age of 53, this
+20-percent reduction is diminished incrementally. In accordance
+with the German Corporate Governance Code, the settlement
+payments for Board of Management members would be equal
+to 150 percent of the above-described settlement cap.
+In line with the German Corporate Governance Code's recom-
+mendation, the service agreements of Board of Management
+members include a settlement cap. Under the cap, settlement
+payments in conjunction with a termination of Board of Man-
+agement duties may not exceed the value of two years' total
+compensation or the total compensation for the remainder
+of the member's service agreement.
+Settlement Payments for Termination of Board of
+Management Duties
+In line with the German Corporate Governance Code's recom-
+mendation, the Supervisory Board reviews, on a regular basis,
+the benefits level of Board of Management members and
+the resulting annual and long-term expense and, if necessary,
+adjusts the payments.
+Pursuant to the provisions of the German Occupational Pen-
+sions Improvement Act, Board of Management members'
+pension entitlements are not vested until they have been in
+effect for five years. This applies to both contribution-based
+and final-salary-based pension plans.
+Mr. Schäfer and Mr. Winkel's previous pensions were transferred
+into the contribution-based plan. Their benefit entitlements
+acquired prior to joining the Board of Management (which
+were based on their final salary) were translated into capital
+contributions. The Supervisory Board agreed to a transitional
+arrangement with Mr. Schäfer and Mr. Winkel. If their service
+agreement is not extended they will receive transitional com-
+pensation based on their employment contracts but linked to
+their base pay prior to joining the Board of Management. In
+addition, in the case of pension benefits being due, Mr. Schäfer
+or his survivors may, for a limited time, choose between the
+above-described contribution-based pension plan and the
+pension plan based on final salary prior to joining the Board
+of Management. In the case of reappointment to the E.ON
+Board of Management, these interim arrangements are void.
+pension payment is currently estimated to be between 30 and
+35 percent of his or her base salary (without factoring in pen-
+sion benefits accrued prior to being appointed to the Board
+of Management).
+Supervisory Board and Board of Management
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The Company makes virtual contributions to Board of Manage-
+ment members' pension accounts. The maximum amount of
+the annual contributions is a equal to 18 percent of pension-
+able income (base salary and annual bonus). The annual con-
+tribution consists of a fixed base percentage (14 percent) and
+a matching contribution (4 percent). The requirement for the
+matching contribution to be granted is that the Board of
+Management member contributes, at a minimum, the same
+amount by having it withheld from his compensation. The
+company-funded matching contribution is suspended if and
+as long as the E.ON Group's ROACE is less than its cost of
+capital for three years in a row. The contributions are capital-
+ized using actuarial principles (based on a standard retirement
+age of 62) and placed in Board of Management members'
+pension accounts. The interest rate used for each year is based
+on the return of long-term German treasury notes. At the age
+of 62 at the earliest, a Board of Management member (or his
+survivors) may choose to have the pension account balance
+paid out as a lifelong pension, in installments, or in a lump sum.
+Individual Board of Management members' actual resulting
+pension entitlement cannot be calculated precisely in advance.
+It depends on a number of uncertain parameters, in particular
+the changes in their individual salary, their total years of
+service, the attainment of company targets, and interest rates.
+For a Board of Management member enrolled in the plan
+at the age of 50, the company-financed, contribution-based
+Stock-based Compensation
+the long-term portion of the bonus for the 2012 financial year
+(see footnote 1 to the table entitled Total Compensation of
+the Board of Management) and to changes in the Board of
+Management's composition in 2013.
+The Supervisory Board issued a new tranche of the E.ON Share
+Matching Plan (2014-2018) for the 2014 financial year and
+granted Board of Management members virtual shares of E.ON
+stock. The present value assigned to the virtual shares of
+E.ON stock at the time of granting-€13.65 per virtual share-is
+shown in the following tables entitled "Stock-Based Compen-
+sation" and "Total Compensation." The value performance of
+this tranche will be determined by the performance of E.ON
+stock, the per-share dividends, and ROACE of the next four
+years. The actual payments made to Board of Management
+members in 2018 may deviate, under certain circumstances
+considerably, from the calculated figures disclosed here.
+The long-term variable compensation of Board of Management
+members resulted in the following expenses in 2014 and 2013:
+27,548
+1/3:
+49,964
+550,000
+1,048,667
+Dr.-Ing. Leonhard Birnbaum (since July 1, 2013)
+2,112,189 1,686,631
+139,745
+84,988
+2,490,000
+Pension
+account
+1,790,082
+2013
+2014
+2014
+2013
+2014
+€
+Expense³
+Number of virtual
+shares granted
+at time of granting 1,2
+Value of virtual shares
+Dr. Johannes Teyssen
+Term in years
+2013
+4
+× 4-year
+ROACE
+1/3: LTI
+component
++
+Base
+matching
++
+Performance
+matching
+The long-term variable compensation that Board of Manage-
+ment members receive is a stock-based compensation under
+the E.ON Share Matching Plan. At the beginning of each finan-
+cial year, the Supervisory Board decides, based on the Execu-
+tive Committee's recommendation, on the allocation of a new
+tranche, including the respective targets and the number of
+virtual shares granted to individual members of the Board
+of Management. To serve as a long-term incentive for sustain-
+able business performance, each tranche has a vesting period
+of four years. The tranche starts on April 1 of each year.
+Long-Term Variable Compensation: E.ON Share
+Matching Plan
+The maximum bonus that can be attained (including any
+special compensation) is 200 percent of the target bonus.
+average
+in %
+In addition, the Supervisory Board has the discretionary power
+to make a final, overall assessment on the basis of which it may
+adjust the size of the bonus. This overall assessment does not
+refer to above-described targets or comparative parameters,
+which are not, under the Code's recommendations, supposed
+to be changed retroactively. In addition, the Supervisory Board
+may, as part of the annual bonus, grant Board of Management
+members special compensation for outstanding achievements.
+Consolidated Financial Statements
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The Supervisory Board, at its discretion, determines the
+degree to which Board of Management members have met
+the targets of the individual-performance portion of their
+annual bonus. In making this determination, the Supervisory
+Board pays particular attention to the criteria of Section 87
+of the German Stock Corporation Act and of the German Corpo-
+rate Governance Code.
+In assigning Board of Management members their individual
+performance factors, the Supervisory Board evaluates their
+individual contribution to the attainment of collective targets
+as well as their attainment of their individual targets.
+5
+2/3:
+STI component
+The metric used for the company target is our EBITDA. The
+EBITDA target for a particular financial year is the plan figure
+approved by the Supervisory Board. If E.ON's actual EBITDA is
+equal to the EBITDA target, this constitutes 100 percent attain-
+ment. If it is 30 percentage points or more below the target,
+this constitutes zero percent attainment. If it is 30 percentage
+points or more above the target, this constitutes 200 percent
+attainment. Linear interpolation is used to translate interme-
+diate EBITDA figures into percentages. The Supervisory Board
+then evaluates this arithmetically derived figure on the basis
+of certain qualitative criteria and, if necessary, adjusts it within
+a range of ±20 percentage points. The criteria for this quali-
+tative evaluation are the ratio between cost of capital and
+EBITDA, a comparison with prior-year EBITDA, and general
+market developments. Extraordinary events are not factored
+into the determination of target attainment.
+Supervisory Board and Board of Management
+Tables and Explanations
+Stock price
+Combined Group Management Report
++
+3
+Capital contributions
+1
+Contribution-Based Plan
+Annual pension payments are initially equal to 60 percent of
+a Board of Management member's respective last annual
+base salary. In the case of additional years of service on the
+Board of Management, the payment can increase to a maxi-
+mum of 70 percent or, in Dr. Teyssen's case, 75 percent. The full
+amount of any pension entitlements from earlier employment
+is offset against these payments. In addition, the pension
+plan includes benefits for widows and widowers and for sur-
+viving children that are equal to 60 percent and 15 percent,
+respectively, of the deceased Board of Management member's
+pension entitlement. Together, pension payments to a widow
+or widower and children may not exceed 100 percent of the
+deceased Board of Management member's pension.
+The Company has agreed to a pension plan based on final salary
+for the Board of Management members who were appointed
+to the Board of Management before 2010: Dr. Teyssen and
+Dr. Reutersberg. Following the end of their service for the Com-
+pany, these Board of Management members are entitled
+to receive lifelong monthly pension payments in three cases:
+reaching the age of 60, permanent incapacitation, and a so-
+called third pension situation. The provisions of the third pension
+situation only apply to Dr. Teyssen. The criteria for this situation
+are met if the termination or non-extension of Dr. Teyssen's
+service agreement is not due to his misconduct or rejection of
+an offer of extension that is at least on a par with his existing
+service agreement. In the third pension situation, Dr. Teyssen
+would receive an early pension as a transitional arrangement
+until he reaches the age of 60.
+Pension Entitlements
+In line with the German Corporate Governance Code's recom-
+mendation, Board of Management members' cash compen-
+sation has an overall cap. This means that the sum of the indi-
+vidual compensation components in one year may not exceed
+200 percent of the total agreed target compensation, which
+consists of base salary, target bonus, and the target allocation
+value of long-term variable compensation.
+Overall Cap
+Corporate Governance Report
+Members appointed to the Board of Management since 2010
+(Dr.-Ing. Birnbaum, Mr. Kildahl, Mr. Schäfer, and Mr. Winkel) are
+enrolled in the contribution plan "E.ON Management Board,"
+a contribution-based pension plan.
+2
+Dividends
+84
+=
+€
+Following the Supervisory Board's decision to allocate a new
+tranche, Board of Management members initially receive vested
+virtual shares equivalent to the amount of the LTI component
+of their bonus. The determination of the LTI component takes
+into consideration the overall target attainment of the bonus
+for the preceding financial year. The number of virtual shares
+is calculated on the basis of the amount of their LTI compo-
+nent and E.ON's average stock price during the first 60 days
+of the four-year vesting period. Furthermore, Board of Manage-
+ment members may receive, on the basis of annual Supervisory
+Board decisions, a base matching of additional non-vested
+virtual shares in addition to the virtual shares resulting from
+Vesting period: 4 years
+For the purpose of performance matching, the company per-
+formance metric is E.ON's average ROACE during the four-year
+vesting period compared with a target ROACE set in advance
+by the Supervisory Board for the entire four-year period at
+the time it allocates a new tranche. Extraordinary events are
+not factored into the determination of target attainment for
+company performance. Depending on the degree of target
+attainment for the company performance metric, each virtual
+share resulting from base matching may be matched by up
+to two additional virtual shares at the end of the vesting
+period. If the predetermined company performance target is
+fully attained, Board of Management members receive one
+additional virtual share for each virtual share resulting from
+base matching. Linear interpolation is used to translate inter-
+mediate figures.
+At the end of the vesting period, the virtual shares held by
+Board of Management members are assigned a cash value
+based on E.ON's average stock price during the final 60 days
+of the vesting period. To each virtual share is then added the
+aggregate per-share dividend paid out during the vesting
+period. This total-cash value plus dividends—is then paid out.
+Payouts are capped at 200 percent of the arithmetical total
+target value. In order to introduce the new plan as swiftly as
+possible, Board of Management members received virtual
+shares in 2013 as part of an interim solution; allocations under
+the old Share Performance Plan were not granted.
+83
+their LTI component. In addition, Board of Management mem-
+bers may, depending on the company's performance during
+the vesting period, receive performance matching of up to
+two additional non-vested virtual shares per share resulting
+from base matching. The arithmetical total target value allo-
+cated at the start of the vesting period, which begins on
+April 1 of the year in which a tranche is allocated, is therefore
+the sum of the value of the LTI component, base matching, and
+performance matching (depending on the degree of attain-
+ment of a predefined company performance target).
+-0.75
+4.9
+7.4
+Value added
+After-tax cost of capital (%)
+Employees (at year-end)
+5.4
+- Percentage of female employees
+1,251
+640
+56,490
+58,811
+6.7
+-4
+-0.55
++95
+Total assets
++0.85
+Debt factor4
+- Percentage of female executives and senior managers
+3.7
+4.0
+Equity
+19,077
+26,713
+Pretax cost of capital (%)
+-0.33
+-29
+113,693
+125,690
+-10
+ROACE (%)
+9.4
+8.6
+33,394
+-17
+- Average turnover rate (%)
+2.0
+29.9
+2.0
+-3.60
+-1.64
+-120
+8.42
+12.72
+-34
+3Change in absolute terms.
+0.50
+976
+966
++1
+17.4
+27,714
+27.4
+-36
+0.50
+- Average age
+2Adjusted for extraordinary effects (see Glossary).
+Market capitalization (€ in billions)
+28.9
++1.05
+16.7
+15.8
++0.95
+3.7
+3.3
+¹Adjusted for discontinued operations.
++0.45
+43
+-13
+Dividend payout
+- TRIF (E.ON employees)
+Earnings per share6, 7 (€)
+Equity per share 6, 7 (€)
+Dividend per share³ (€)
+42
+Economic net debt (at year-end)
+-4
+6,354
+9,703
+-19
+Owned generation (billion kWh)
+188.5
+215.2
+-12
+thereof renewables (billion kWh)
+26.1
+27.2
+Carbon emissions from power and heat production (million metric tons)
+Specific carbon emissions (million metric tons/MWh)
+76.8
+95.7
+-20
+0.40
+0.43
+7,889
+thereof renewables (MW)
+-23
+60,151
+E.ON Group Financial Highlights¹
+"Ratio of economic net debt and EBITDA.
+€ in millions
+Attributable generating capacity (MW)
+- thereof renewables (MW)
+2015
+2014
+-7
++/-%
+58,871
+-23
+8,428
+10,474
+-20
+Fully consolidated generating capacity (MW)
+46,479
+45,335
+Electricity sales (billion kWh)
+780.9
+Gas sales (billion kWh)
+-6,999
+-3,160
+-121
+Underlying net income²
+1,648
+1,646
+Investments
+Net income/Net loss attributable to shareholders of E.ON SE
+4,174
+-10
+Research and development costs
+34
+30
++13
+Cash provided by operating activities of continuing operations
+6,133
+4,637
+-3
+-104
+-6,377
+1,721.8
+1,171.0
++47
+Sales
+116,218
+113,095
++3
+-3,130
+EBITDA²
+8,376
+-10
+EBIT2
+4,369
+4,695
+-7
+Net income/Net loss
+7,557
+5Change in percentage points.
+We advised the Management Board regularly about the
+Company's management and continually monitored the
+Management Board's activities, assuring ourselves that the
+Company's management was legal, purposeful, and orderly.
+We were closely involved in all business transactions of key
+importance to the Company and discussed these transactions
+thoroughly based on the Management Board's reports. At
+the Supervisory Board's four regular and two extraordinary
+meetings in the 2015 financial year, we addressed in depth
+all issues relevant to the Company, including in conjunction
+7Based on shares outstanding.
+The Management Board regularly provided us with timely and
+comprehensive information in both written and oral form. At
+the meetings of the full Supervisory Board and its committees,
+we had sufficient opportunity to actively discuss the Manage-
+ment Board's reports, motions, and proposed resolutions. We
+voted on such matters when it was required by law, the Com-
+pany's Articles of Association, or the Supervisory Board's poli-
+cies and procedures. The Supervisory Board approved the reso-
+lutions proposed by the Management Board after thoroughly
+examining and discussing them.
+Furthermore, there was a regular exchange of information
+between the Chairman of the Supervisory Board and the Chair-
+man of the Management Board throughout the entire financial
+year. In the case of particularly important issues, the Chairman
+of the Supervisory Board was kept informed at all times. The
+Chairman of the Supervisory Board likewise maintained con-
+tact with the members of the Supervisory Board outside of
+board meetings. The Supervisory Board was therefore contin-
+ually informed about the current operating performance of
+the major Group companies, significant business transactions,
+the development of key financial figures, and relevant decisions
+under consideration.
+Implementation of E.ON's New Strategy
+On November 30, 2014, the E.ON Supervisory Board approved
+the Management Board's proposal for a new corporate strategy.
+This new strategy is founded on the perception that over the
+past few years two energy worlds have emerged, worlds that
+place different demands on energy companies. The new energy
+world is about customer orientation, efficient and increasingly
+smart grids, renewables, distributed generation, and technical
+innovations. The conventional energy world, by contrast, pri-
+marily requires expertise and cost efficiency in conventional
+power stations and global energy trading. Together with
+the Management Board we therefore remain firmly convinced
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+that the separation into two independent companies is the
+logical response to these developments and that our strategy
+will create two successful companies: the new E.ON and Uniper.
+E.ON's objective is to become customers' partner of choice
+for innovative energy solutions. E.ON and its roughly 43,000
+employees focus on three core businesses: renewables, energy
+networks, and customer solutions. Two business areas-con-
+ventional generation and global energy trading-and their
+nearly 14,000 employees were assigned to Uniper. Uniper began
+operating on January 1, 2016, and is based in Düsseldorf. It is
+intended for a resolution to be passed at the 2016 Annual
+Shareholders Meeting for a majority stake in Uniper to be spun
+off to E.ON SE shareholders.
+In view of the policy debate in Germany regarding nuclear
+energy, , the E.ON Management Board and Supervisory Board
+jointly decided for E.ON to retain responsibility for the remain-
+ing operation and decommissioning of its nuclear generating
+capacity in Germany. The decision does not affect E.ON's cor-
+porate strategy; instead, it safeguards against possible risks
+to the implementation of this strategy. The nuclear power
+business in Germany is not a strategic business segment for
+E.ON and is managed by a separate operating company
+called Preussen Elektra.
+Key Topics of the Supervisory Board's Discussions
+Besides the above-described discussion of E.ON's new corpo-
+rate strategy, we discussed the business models of Uniper and
+the new E.ON and received progress reports about the planned
+spinoff. In the context of the Group's current operating busi-
+ness, we discussed in detail the decline in prices on national
+and international energy markets as well as the business
+situation of the Group and its companies, about which we
+were continually informed by the Management Board. More
+specifically, we discussed E.ON SE's and the E.ON Group's cur-
+rent asset, financial, and earnings situation, workforce devel-
+opments, and earnings opportunities and risks. In addition,
+we and the Management Board thoroughly discussed the
+E.ON Group's medium-term plan for 2016-2018, including the
+impairment charges that were necessary in this context due
+to updated assumptions regarding long-term trends in power
+and fuel prices. The Supervisory Board was provided information
+on a regular basis about the Company's health, (occupational)
+safety, and environmental performance (in particular the
+development of key accident indicators) as well as key figures
+for the number of customers, customer satisfaction, the num-
+ber of apprentices, and measures to support women at the
+Company. In this regard, the Supervisory Board implemented
+legally mandated requirements for the proportion of women
+in management positions in Germany.
+with the new corporate strategy. All Supervisory Board members
+attended all meetings with the exception of one member who
+was unable to attend two meetings. A table showing atten-
+dance by member is on page 78 of this report.
+In the 2015 financial year the Supervisory Board again care-
+fully performed all its duties and obligations under law, the
+Company's Articles of Association, and its own policies and
+procedures. It thoroughly examined the Company's situation
+and discussed in depth the consequences of its continually
+changing energy-policy and economic environment.
+The business performance of E.ON and the entire energy indus-
+try continued to reflect the difficult structural situation in
+energy markets in Germany and Europe and a further significant
+decline in fuel prices worldwide. Due to the consequences
+of the energy transformation, at the current time it is difficult
+for low-emission conventional generating capacity to cover
+its costs, particularly in Germany. Europe and, in particular,
+Germany continue to lack a clear regulatory framework that
+defines and rewards the role conventional generating capacity
+plays in ensuring supply security.
+In November 2014 E.ON adopted a new corporate strategy.
+A significant share of the Supervisory Board's work in 2015
+revolved around this decision. E.ON and Uniper began oper-
+ating independently of one another on January 1, 2016. The
+new E.ON focuses on renewables, energy networks, and cus-
+tomer solutions. Uniper focuses on conventional power gen-
+eration, with a strong emphasis on gas and hydro assets, as
+well as on global energy trading.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+supply security. In the years ahead Uniper will also play a key role in a variety of energy markets around the world. For example,
+Uniper is testing new technologies-energy storage foremost among them—that will be crucial for tomorrow's electricity
+system, which will consist of a high proportion of renewables. Uniper already operates a number of pilot units that transform
+surplus wind power into hydrogen, which is injected into the gas pipeline system. Uniper is also involved in the development
+of utility-scale battery storage systems.
+The transformation of E.ON remained on schedule even though in September 2015 we decided to keep our remaining nuclear
+power business in Germany at E.ON and to rename it PreussenElektra. At about the same time, the German federal government
+appointed a commission to explore viable long-term solutions for the funding of nuclear asset-retirement obligations. We believe
+strongly that energy companies and the German state share the responsibility for the phaseout of nuclear energy. In October
+2015 the results of the stress tests ordered by the German Federal Ministry for Economic Affairs showed that the provisions we've
+recorded to dismantle nuclear assets and manage nuclear waste are sufficient and properly accounted for. We're now working
+hard so that E.ON and Uniper are well funded for the future and, although the business environment is becoming more difficult,
+can focus on developing the businesses in their respective energy worlds.
+Other overarching topics of our discussions included develop-
+ments in European and German energy policy and the macro-
+economic and economic-policy situation in countries in which
+E.ON is active, in particular with regard to their respective
+consequences for E.ON's various business areas. At regular
+intervals we also discussed the development of commodity
+prices and currencies relevant for E.ON.
+E.ON's operating business was stable and performed according to plan in 2015. Although our EBITDA of €7.6 billion and operating
+cash flow of €6.1 billion were both below the prior-year figures, they were in line with our expectations. Our earnings situation
+in 2015 reflected, in particular, impairment charges of €8.8 billion. We recorded these charges primarily on our generation assets
+after reviewing our assumptions regarding the long-term development of electricity and fuel prices. We made very good progress
+in further reducing our economic net debt, which declined by about €5.7 billion to €27.7 billion. This reflected in part the divest-
+ment of our exploration and production ("E&P") business in the Norwegian North Sea, our operations in Spain, our generation
+business in Italy, and our remaining stake in E.ON Energy from Waste. The recent sale of our U.K. E&P business continues this
+trend. These divestments improve our financial profile and enhance our flexibility to implement our strategy and reposition our
+company. We want to augment this impetus by successfully completing our new setup, as planned, this year. This will give us
+a platform from which we can unequivocally devote all our energy to outperforming our competitors in the new and the con-
+ventional energy world.
+Best wishes,
+При
+Dr. Johannes Teyssen
+3
+4
+Report of the Supervisory Board
+Dear Shareholder,
+Our results for the 2015 financial year demonstrate that both E.ON and Uniper are solidly positioned operationally and financially.
+When the two companies have gone their separate ways, we'll be able to do a better job next year of bringing our operating
+strengths to bear. E.ON will focus on the new energy world, and Uniper will play a strong role in the conventional energy world.
+In their respective worlds, E.ON and Uniper aim to be investors' and customers' partner of choice.
+We thoroughly discussed current developments in the business
+activities of the global and regional units as well as in Russia
+and Turkey. The Management Board provided us with detailed
+information about the progress and completion of several
+projects to build new generation assets; namely, Maasvlakte
+3 in the Netherlands, Berezov 3 in Russia, Humber Gateway
+offshore wind farm in the United Kingdom, and Amrumbank
+West offshore wind farm in Germany. Furthermore, we passed
+a resolution to move forward with the construction of Rampion
+wind farm off the U.K. coast and discussed and, where neces-
+sary, passed resolutions on, the sale of operations in Italy and
+Spain as well as the E&P business in the North Sea. In addition,
+the Supervisory Board was informed on an ongoing basis
+about the status of the Company's nuclear energy operations
+in Sweden (in particular, the status of the project to upgrade
+unit 2 at Oskarshamn nuclear power station and the decom-
+missioning of units 1 and 2 at Ringhals nuclear power station)
+and the progress of Datteln 4, a new generating unit under
+construction in Germany. At all meetings, the Supervisory Board
+received reports about the restructuring of ENEVA, E.ON's joint
+venture in Brazil, and its related activities. The Management
+Board also reported on a number of legal matters, such as
+the status of the legal proceedings relating to the nuclear-fuel
+tax and of the constitutional complaint against the nuclear
+phaseout and the lawsuit filed against the nuclear energy
+moratorium. In conjunction with proposed resolutions for the
+2015 Annual Shareholders Meeting, the Supervisory Board
+approved, among other things, the offer of a scrip dividend.
+5
+6
+underlying value of our activities. It reviewed the results of
+impairment tests and the necessary impairment charges.
+Other focus areas included an examination of E.ON's risk situ-
+ation, its risk-bearing capacity, and the quality control of its
+risk-management system. This examination was based on
+consultations with the independent auditor and, among other
+things, reports from the Company's risk committee. On the
+basis of the quarterly regular risk reports, the Audit and Risk
+Committee noted that no risks were identified that might
+jeopardize the existence of the Company or individual seg-
+ments. The committee also discussed the work done by inter-
+nal audit including the audits conducted in 2015 as well as
+the audit plan and audit priorities for 2015. Furthermore, the
+committee discussed the health, safety, and environment
+report, compliance reports and E.ON's compliance system, as
+well as other issues related to auditing. The Management
+Board also reported on ongoing proceedings and on legal and
+regulatory risks for the E.ON Group's business. These included
+the status of the constitutional complaint filed against Ger-
+many's Nuclear Phaseout Law as well as the lawsuits filed
+against the nuclear-fuel tax, the status of proceedings relating
+to the Datteln 4 new-build project, arbitration and legal pro-
+ceedings filed by special-contract customers in Germany, the
+review of price-adjustment clauses being conducted by the
+European Court of Justice and the German Federal Court of
+Justice. The committee regularly dealt with the development
+of the Company's rating and its current status. Other topics
+included the status of the preparations for the planned spinoff,
+nuclear energy provisions and related policy discussions, the
+Company's tax situation, reportable incidents at the E.ON Group,
+and insurance issues.
+7
+8
+Report of the Supervisory Board
+The Nomination Committee did not meet in 2015 because no
+elections of shareholder representatives to the E.ON SE
+Supervisory Board were pending.
+Examination and Approval of the Financial State-
+ments, Approval of the Consolidated Financial
+Statements, Proposal for Profit Appropriation for
+the Year Ended December 31, 2015
+PricewaterhouseCoopers Aktiengesellschaft, Wirtschafts-
+prüfungsgesellschaft, Düsseldorf, the independent auditor
+chosen by the Annual Shareholders Meeting and appointed
+by the Supervisory Board, audited and submitted an unquali-
+fied opinion on the Financial Statements of E.ON SE and the
+Combined Group Management Report for the year ended
+December 31, 2015. The Consolidated Financial Statements
+prepared in accordance with IFRS exempt E.ON SE from the
+requirement to publish Consolidated Financial Statements in
+accordance with German law.
+The Audit and Risk Committee met five times. Attendance was
+complete at all meetings. With due attention to the Indepen-
+dent Auditor's Report and in discussions with the independent
+auditor, the committee devoted particular attention to the
+2014 Financial Statements of E.ON SE (prepared in accordance
+with the German Commercial Code) and the E.ON Group's 2014
+Consolidated Financial Statements and the 2015 Interim Reports
+of E.ON SE (prepared in accordance with International Financial
+Reporting Standards, or "IFRS"). The committee discussed the
+recommendation for selecting an independent auditor for
+the 2015 financial year and assigned the tasks for the auditing
+services, established the audit priorities, determined the
+independent auditor's compensation, and verified the auditor's
+qualifications and independence in line with the recommen-
+dations of the German Corporate Governance Code. The com-
+mittee assured itself that the independent auditor has no
+conflicts of interest. Topics of particularly detailed discussions
+included issues relating to accounting, the internal control
+system, and risk management. In addition, the committee
+thoroughly discussed the Combined Group Management Report
+and the proposal for profit appropriation and prepared the
+relevant recommendations for the Supervisory Board and
+reported to the Supervisory Board. Furthermore, on a regular
+basis the committee discussed in detail the progress of sig-
+nificant investment projects. The Audit and Risk Committee
+also discussed in detail market conditions, the long-term
+changes in markets, and the resulting consequences for the
+Furthermore, the auditor examined E.ON SE's early-warning
+system regarding risks. This examination revealed that the
+Management Board has taken appropriate measures to meet
+the requirements of risk monitoring and that the early-warning
+system regarding risks is fulfilling its tasks.
+We approved the Financial Statements of E.ON SE prepared
+by the Management Board and the Consolidated Financial
+Statements. The Financial Statements are thus adopted. We
+agree with the Combined Group Management Report and, in
+particular, with its statements concerning the Company's
+future development.
+We examined the Management Board's proposal for profit
+appropriation, which includes a cash dividend of €0.50 per
+ordinary share, also taking into consideration the Company's
+liquidity and its finance and investment plans. The proposal
+is in the Company's interest with due consideration for the
+shareholders' interests. After examining and weighing all argu-
+ments, we agree with the Management Board's proposal for
+profit appropriation.
+Personnel Changes on the Management Board
+In conjunction with the Group's reorganization the Supervisory
+Board made important personnel decisions for E.ON and Uniper.
+Michael Sen was appointed to the E.ON SE Management
+Board effective June 1, 2015; he succeeded Klaus Schäfer as
+Chief Financial Officer. Karsten Wildberger was appointed
+to the E.ON SE Management Board effective April 1, 2016; he
+will succeed Bernhard Reutersberg as Chief Markets Officer.
+With the approval of the E.ON SE Supervisory Board, Mr.
+Reutersberg was appointed Chairman of the Uniper Super-
+visory Board and will end his service on the E.ON Management
+Board effective June 30, 2016. In addition, the E.ON SE Super-
+visory Board approved the appointments to the Uniper Man-
+agement Board. Klaus Schäfer is Chairman of the Uniper
+Management Board and Chief Executive Officer; for this rea-
+son he ended his service on the E.ON Management Board
+on December 31, 2015. The remaining members of the Uniper
+Management Board are Christopher Delbrück (Chief Financial
+Officer), Eckhardt Rümmler (Chief Operating Officer, with
+responsibility for all of Uniper's technical assets, particularly
+its conventional power stations and gas storage facilities),
+and Keith Martin (Chief Commercial Officer).
+e.on
+At the Supervisory Board's meeting on March 8, 2016, we
+thoroughly discussed-in the presence of the independent
+auditor and with knowledge of, and reference to, the Indepen-
+dent Auditor's Report and the results of the preliminary
+review by the Audit and Risk Committee-E.ON SE's Financial
+Statements, Consolidated Financial Statements, Combined
+Group Management Report, and the Management Board's pro-
+posal for profit appropriation. The independent auditor was
+available for supplementary questions and answers. After con-
+cluding our own examination we determined that there are
+no objections to the findings. We therefore acknowledged and
+approved the Independent Auditor's Report.
+Uniper will focus on the conventional energy world. It has a portfolio of conventional assets with a strong emphasis on opera-
+tionally flexible gas-fired power plants and global energy trading. Uniper's generation fleet encompasses about 40 gigawatts
+of capacity in Europe and Russia. This flexible, dispatchable capacity-which includes a significant proportion of hydro-will play an
+important role in ensuring supply security during the long, gradual transition to a low-carbon future. Unit 3, a state-of-the-art
+coal-fired generating unit at Maasvlakte power station outside Rotterdam in the Netherlands, entered service in 2015 and has
+now obtained its operating permit. Uniper has demonstrated how a power plant can be deftly tailored to the energy needs of
+nearby industry in a way that helps protect the climate; Maasvlakte 3 will add to Uniper's portfolio of efficient generating capacity
+in the European market. Many of Uniper's power plants also produce heat for district-heating systems as well as process steam,
+compressed air, and other services for nearby industrial enterprises. Extensive expertise and experience in power-plant engineering,
+planning, construction, operations, and management give Uniper a very good platform for developing new services businesses
+in its home markets in Europe and elsewhere. And many years of experience in sourcing gas through long-term contracts and
+LNG, proven expertise in global commodity trading, and a portfolio of gas-storage facilities make Uniper a mainstay of Europe's
+The Finance and Investment Committee met four times. Atten-
+dance was complete at all meetings. The matters addressed
+by the committee included the Management Board's report
+on the completion of Etzel gas storage facility and the Nord
+Stream, OPAL, and NEL gas pipelines. The committee also dis-
+cussed current developments at Enerjisa (E.ON's joint venture
+in Turkey), the sale of E&P operations in the North Sea, the sale
+of activities in Italy, and Rampion, a wind farm project located
+off the U.K. coast. In particular, at its meetings the committee
+prepared the Supervisory Board's resolutions on these matters
+or, for matters for which it had the authority, made the decision
+itself. Furthermore, it discussed the medium-term plan for
+2016-2018 and prepared the Supervisory Board's resolutions
+on this matter.
+Strategy and Objectives
+Report of the Supervisory Board
+Finally, the Management Board provided information about
+the scope of E.ON's use of derivative financial instruments
+and how the regulation of these instruments affects E.ON's
+business. We also discussed E.ON's rating situation with the
+Management Board on a regular basis.
+We thoroughly discussed the activity reports submitted by
+the Supervisory Board's committees.
+Corporate Governance
+In the 2015 financial year we again had intensive discussions
+about the implementation of the recommendations of the
+German Corporate Governance Code.
+In the annual declaration of compliance issued at the end of
+the year, we and the Management Board declared that E.ON
+is in full compliance with the recommendations of the "Gov-
+ernment Commission German Corporate Governance Code"
+dated May 5, 2015, published by the Federal Ministry of Justice
+in the official section of the Federal Gazette (Bundesanzeiger).
+Furthermore, we declared that E.ON was in full compliance
+with the recommendations of the "Government Commission
+German Corporate Governance Code" dated June 24, 2014,
+published by the Federal Ministry of Justice in the official section
+of the Federal Gazette (Bundesanzeiger), since the last annual
+declaration on December 15, 2014. The current version of the
+declaration of compliance is in the Corporate Governance
+Report on page 75; the current as well as earlier versions are
+continuously available to the public on the Company's web-
+site at www.eon.com.
+The Supervisory Board is aware of no indications of conflicts
+of interest involving members of the Management Board or
+the Supervisory Board.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Furthermore, education and training sessions on selected
+issues were conducted for Supervisory Board members in 2015.
+An overview of Supervisory Board members' attendance at
+meetings of the Supervisory Board and its committees is on
+page 78.
+Committee Work
+To fulfill its duties carefully and efficiently, the Supervisory
+Board has created the committees described in detail below.
+Information about the committees' composition and respon-
+sibilities is in the Corporate Governance Report on pages 79
+and 80. Within the scope permissible by law, the Supervisory
+Board has transferred to the committees the authority to
+pass resolutions on certain matters. Committee chairpersons
+reported the agenda and results of their respective commit-
+tee's meetings to the full Supervisory Board on a regular basis,
+typically at the Supervisory Board meeting subsequent to
+their committee meeting.
+The Executive Committee met six times. Attendance was com-
+plete at all meetings. In particular, this committee prepared
+the meetings of the full Supervisory Board. Furthermore, it
+discussed significant matters relating to the planned spinoff
+and Management Board compensation and did comprehensive
+preparatory work for the Supervisory Board's resolutions on
+these matters. In addition, it prepared the Supervisory Board's
+resolutions to determine that the Management Board met
+its targets for 2014 and to set the targets for 2015. It also con-
+ducted an interim evaluation of target implementation during
+the course of the year.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+The targets for the Supervisory Board's composition with
+regard to Item 5.4.1 of the German Corporate Governance
+Code and the status of their achievement are described in
+the Corporate Governance Report on pages 78 and 79.
+6Attributable to shareholders of E.ON SE.
+E.ON's three core businesses-renewables, energy networks, and customer solutions-will enable us to seize opportunities in
+the new energy world. Although we already have a solid track record in these businesses, we'll now put them at the center of
+what we do and focus resolutely on our customers. Over the past few years E.ON has installed more than 2,400 wind turbines
+and commissioned several solar farms. We've invested about €10 billion in these projects. Last year alone we completed two
+large offshore wind farms in the North Sea-Amrumbank West off the German island of Helgoland and Humber Gateway off
+the east coast of England-on time and on budget. We're the world's second-largest offshore wind company and have a well-
+deserved reputation for excellence in planning, building, and operating offshore assets. This makes us a sought-after partner
+for companies that want to invest in green energy. The new E.ON's second core business is energy networks. Just as modern
+communications need the internet, the modern energy world needs advanced energy networks that can connect millions of
+production sources and customers and respond seamlessly to customer needs and fluctuations in renewables output. Our
+increasing deployment of smart technology enables our customers to use, share, and sell energy like never before. Developing
+and operating innovative energy networks is one of our strengths. No energy company in Germany has integrated more
+renewables capacity into its network than E.ON. We invest about €1 billion a year to expand, add connections to, and upgrade
+our networks in Germany. Our third core business is customer solutions, from standard energy sales to new and innovative
+products and services. Our solar and battery experts help customers to generate their own green energy and store it for later
+use. In addition, E.ON has for years been a market leader in Germany in providing embedded combined-heat-and-power ("CHP")
+solutions. We've installed more than 4,000 CHP units, and each year we generate almost €1 billion in sales from this business.
+In November 2015, for instance, we commissioned the largest CHP unit in the Hamburg region. It will generate power for to
+up to 21,500 households and heat for up to 6,000. singe-family houses. These examples demonstrate that we have outstanding
+capabilities to help shape tomorrow's energy world. Our next objective is to pool and digitalize our capabilities across these
+businesses in order to develop new products and integrated energy plans for our customers. The E.ON brand will continue to
+serve as the familiar face for all three of our core businesses.
+Dear Shareholders,
+Management System
+Technology and Innovation
+Macroeconomic and Industry Environment
+28
+Business Performance
+33
+Earnings Situation
+41
+Financial Situation
+45
+Asset Situation
+46
+47
+47
+E.ON SE's Earnings, Financial, and Asset Situation
+Business Model
+16 Corporate Profile
+16 Combined Group Management Report
+12 Strategy and Objectives
+8For the respective financial year; the 2015 figure represents management's dividend proposal.
+Contents
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Other Financial and Non-financial Performance Indicators
+16
+19
+22
+Business Report
+22
+2 CEO Letter
+4 Report of the Supervisory Board
+10 E.ON Stock
+18
+- ROACE and Value Added
+48
+- Corporate Sustainability
+104 Statement of Changes in Equity
+106 Notes
+202
+203
+216
+218
+Declaration of the Management Board
+List of Shareholdings
+Consolidated Statements of Cash Flows
+Members of the Supervisory Board
+219 Tables and Explanations
+219 Explanatory Report of the Management Board
+220 Summary of Financial Highlights/Installed Capacity/Sales Volume
+224 Glossary of Financial Terms
+229 Financial Calendar
+2
+CEO Letter
+Members of the Management Board
+The dominant theme of the 2015 financial year was the separation of our operations into two independent companies. We
+announced this complex project about 15 months ago and since then have been working hard to carry out, on schedule, what
+is perhaps the most ambitious reorganization of a European company. E.ON and Uniper have been operating independently of
+one another since the beginning of the year. Each is a sharply focused company. Each will concentrate on one of the two energy
+worlds that are becoming increasingly distinct from one another and that require dramatically different business approaches.
+102
+99 Consolidated Statements of Recognized Income and Expenses
+50
+- Employees
+56 Subsequent Events Report
+56 Forecast Report
+60 Risk Report
+69 Opportunity Report
+70 Internal Control System for the Accounting Process
+100 Consolidated Balance Sheets
+72 Disclosures Regarding Takeovers
+75
+82
+Corporate Governance Declaration
+Compensation Report
+96 Consolidated Financial Statements
+96 Independent Auditor's Report
+98 Consolidated Statements of Income
+75 Corporate Governance Report
+2015 Annual Report
+780.2
+2,181,949 2,261,332
+92
+³The LTI component of the 2015 bonus will be paid out as part of the 2015 bonus.
+See footnotes on page 90.
+302,812
+268,088
+1,594,389 1,778,020
+268,088 268,088
+816,207 1,828,707
+268,088
+1,266,207
+302,812
+2,494,188
+Total
+Service cost
+1,291,577 1,509,932
+548,119 1,560,619
+998,119
+2,191,376
+Total
+- Share Matching Plan, fourth tranche (2016-2020)
+300,000
+571,950
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, second tranche (2014-2018)
+367,813
+Corporate Governance Report
+Table of Compensation Granted and Allocated
+Dr. Bernhard Reutersberg (Member of the Management Board)
+Compensation granted
+729,529
+25,332
+29,529
+25,332
+25,332
+25,332
+29,529
+2015
+700,000
+700,000
+- Share Performance Plan, sixth Tranche (2011-2014)
+700,000
+700,000
+2014
+2015 2015 (min.) 2015 (max.)
+2014
+700,000
+Total
+Fringe benefits
+Fixed compensation
+€
+Compensation allocated
+700,000
+725,332
+-217,182
+- Final calculation and payment of multi-year component
+525,000
+525,000
+2014
+2015 2015 (min.) 2015 (max.)
+2014
+700,000
+Total
+Fringe benefits
+Fixed compensation
+Compensation allocated
+Compensation granted
+Jørgen Kildahl (Member of the Management Board until September 30, 2015)
+280,407 489,104
+2,063,618 2,004,777
+489,104
+5,245,819
+489,104 489,104
+3,185,151 1,307,817
+280,407
+2,881,618
+1,783,211 1,515,673
+818,713 4,756,715
+2,696,047
+2,601,211
+525,000
+700,000
+2015³
+525,000
+19,426
+719,426
+367,813
+-217,182
+871,950
+Multi-year variable compensation
+594,000
+789,333
+1,012,500
+450,000
+600,000
+of 2012 bonus
+One-year variable compensation
+719,426
+548,119
+548,119
+548,119
+23,119
+19,426
+23,119
+23,119
+23,119
+548,119
+1,554,668
+733,334
+725,332
+729,529
+-2,692
+Income taxes
+Income/Loss from continuing operations
+Income/Loss from discontinued operations, net
+Net income/loss
+(10)
+-835
+-570
+-6,378
+-2,968
+(4)
+1
+-162
+-6,377
+Attributable to shareholders of E.ON SE
+Attributable to non-controlling interests
+in €
+-6,999
+-3,130
+-3,160
+-2,027
+Interest and similar expenses
+881
+697
+-11,894
+-8,723
+Other operating expenses
+(7)
+-14,137
+-11,912
+Income/Loss from companies accounted for under the equity method
+298
+-264
+622
+Income/Loss from continuing operations before financial results and income taxes
+-603
+Financial results
+(9)
+-1,340
+-1,795
+Income/Loss from equity investments
+-10
+16
+Income/Loss from other securities, interest and similar income
+-4,203
+725,332
+30
+(13)
+- Share Matching Plan, second tranche (2014-2018)
+367,813
+- Share Performance Plan, sixth Tranche (2011-2014)
+-217,182
+of 2012 bonus
+- Final calculation and payment of multi-year component
+367,813
+-217,182
+1,872,000
+936,000
+852,420
+Multi-year variable compensation
+570,240
+789,333
+1,350,000
+600,000
+600,000
+One-year variable compensation
+725,332
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+Total
+Service cost
+from continuing operations
+-3.60
+-1.55
+from discontinued operations
+0.00
+-0.09
+-3.60
+-1.64
+from net income/loss
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+2,181,949 2,261,332
+600,000
+1,272,000
+636,000
+300,000
+300,000
+552,420
+Table of Compensation Granted and Allocated
+See footnotes on page 90.
+Total
+725,332
+(14)
+777,334
+366,667
+682,000
+330,000
+4,576,704
+291,667 700,000
+4,665,000 4,840,000
+Total
+(until May 31, 2015)
+Mike Winkel²
+2,931,080
+775,000
+1,415,107
+332,640
+408,333
+(since June 1, 2015)
+Michael Sen
+1,579,867 2,368,133
+858,000
+20,800
+24,507
+789,333
+855,360
+700,000 700,000
+789,333 12,715
+4,908,170 1,552,549
+858,000
+634,382 2,372,529
+16,199,993
+25,196
+172,704 4,820,601 6,279,119 15,614,854
+1,240,000
+58,542
+Compensation allocated
+2015
+2014
+2015
+(max.)1,2
+1,240,000
+33,056
+2015
+(min.)
+1,240,000
+33,056
+1,240,000
+33,056
+1,273,056
+1,298,542
+Total
+58,542
+(until December 31, 2015)
+Fringe benefits
+Fixed compensation
+2015
+2014
+Dr. Johannes Teyssen (Chairman of the Management Board)
+Compensation granted
+Table of Compensation Granted and Allocated
+The following table shows the compensation granted and
+allocated in 2015 in the format recommended by the German
+Corporate Governance Code:
+90 Corporate Governance Report
+³Mr. Schäfer became Chairman of the Uniper AG Management Board at the end of the 2015 financial year, and his compensation was transferred to the Uniper AG Management Board
+compensation plan. As a result, his bonus entitlement was also transferred to Uniper AG, which will pay out his entire 2015 bonus. Uniper AG granted Mr. Schäfer a multiyear bonus for
+2015 in the amount of €636,000. The multiyear bonus system is explained on page 138 et seq. of the Consolidated Financial Statements.
+¹The present value assigned to the virtual shares of E.ON stock at the time of granting for the third tranche of the E.ON Share Matching Plan was €13.63 per share.
+2Mr. Kildahl, Mr. Schäfer, and Mr. Winkel were not allocated, from base or performance matching, any additional virtual E.ON shares for 2015. They will be paid the LTI component of their
+bonus as part of their 2015 bonus.
+1,240,000
+1,240,000
+2,231,572 2,154,100
+29,529 936,000
+Total
+granted¹
+Value of stock-based
+compensation
+Other compensation
+Bonus
+Fixed annual
+compensation
+89
+Total Compensation of the Management Board
+Individual members of the Management Board received the
+following total compensation:
+Mr. Sen was appointed to the E.ON SE Management Board
+effective June 1, 2015. The Company agreed to pay Mr. Sen's
+relocation costs. It also agreed to pay Mr. Sen a lump sum of
+€1,400,000 for the stock entitlements from his previous
+employer that he forfeited owing to his move to E.ON SE.
+Mr. Schäfer's service agreement was terminated by mutual
+consent effective December 31, 2015. No payments for residual
+claims under this agreement were made because Mr. Schäfer
+became Chairman of the Uniper AG Management Board at
+the end of the 2015 financial year. The virtual shares granted
+to Mr. Schäfer and his bonus for 2015 were transferred to
+Uniper AG. This also applies to his pension entitlements. The
+non-compete clause was waived without payment of com-
+pensation. Uniper AG granted Mr. Schäfer a multiyear bonus
+for 2015 in the amount of €636,000.
+The compensation payments for Mr. Kildahl and Mr. Winkel
+are included in the figure shown for compensation of former
+Management Board members.
+Mr. Kildahl's service agreement was terminated by mutual
+consent effective September 30, 2015. He received a payment
+of €4,104,667 in compensation for residual claims under this
+agreement. The performance rights and virtual shares granted
+to Mr. Kildahl remain valid and will be calculated and paid
+out at the end of the respective vesting periods. The allocation
+value of the LTI component of Mr. Kildahl's 2014 bonus was
+paid out to him as part of the above-mentioned sum. The Com-
+pany did not make any contributions to Mr. Kildahl's company
+pension for 2015. Mr. Kildahl's non-compete clause is in effect
+from October 1, 2015, to March 31, 2016. The Company did not
+make a compensation payment to Mr. Kildahl because his non-
+compete clause is covered by the payment he received for
+residual claims under his service agreement.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+3,947,332 1,301,680 1,663,385
+Report of the Supervisory Board
+2015
+2014
+Dr. Johannes Teyssen
+Dr.-Ing. Leonhard Birnbaum
+Jørgen Kildahl2
+1,240,000 1,240,000
+25,332
+572,151
+570,240
+19,426
+23,119
+572,151
+594,000
+700,000
+525,000
+700,000 700,000
+871,950 1,142,119 2,163,527
+852,420
+(until September 30, 2015)
+Dr. Bernhard Reutersberg
+Klaus Schäfer2,3
+2015
+4,436,160 4,309,826
+2,659,674 2,831,878
+2014
+2015
+58,542 1,965,600 1,790,082
+19,211 1,144,001 1,048,667
+2014
+2015
+33,056
+18,713
+1,221,202
+964,000
+2014
+2015
+1,197,504
+696,960
+800,000 800,000
+2014
+366,667
+33,056
+1,273,056
+818,713
+819,211
+19,211
+18,713
+18,713
+18,713
+19,211
+Total
+Fringe benefits
+2015
+800,000
+800,000
+800,000
+800,000
+800,000
+2014
+2015 2015 (min.) 2015 (max.)
+2014
+Fixed compensation
+€
+818,713
+818,713
+819,211
+18,713
+818,713
+Table of Compensation Granted and Allocated
+See footnotes on page 90.
+Total
+Service cost
+Total
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, second tranche (2014-2018)
+- Share Performance Plan, sixth Tranche (2011-2014)
+Compensation allocated
+-Final calculation and payment of multi-year component
+of 2012 bonus
+1,144,001
+1,048,667
+Multi-year variable compensation
+696,960
+964,000
+1,650,000
+733,333
+733,333
+One-year variable compensation
+2,288,002
+1,273,056
+Compensation granted
+Dr.-Ing. Leonhard Birnbaum (Member of the Management Board)
+- Share Matching Plan, second tranche (2014-2018)
+827,585
+- Share Performance Plan, sixth Tranche (2011-2014)
+-434,398
+- Final calculation and payment of multi-year component
+of 2012 bonus
+827,585
+-434,398
+3,931,200
+1,965,600
+1,790,082
+Multi-year variable compensation
+1,197,504
+1,655,600
+2,835,000
+1,260,000
+1,260,000
+One-year variable compensation
+1,273,056
+1,298,542
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+Total
+Service cost
+Total
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Table of Compensation Granted and Allocated
+¹The maximum amount disclosed under benefits granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
+2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 85, applies as well.
+91
+642,757 895,467
+3,162,501 4,193,612
+895,467
+2,168,523
+895,467
+5,394,123
+642,757
+4,991,381
+1,273,056 8,039,256 2,519,744 3,298,145
+4,498,656
+4,348,624
+2,671,200
+1,260,000
+630,000 1,335,600
+630,000
+1,160,082
+895,467
+8,934,723
+Depreciation, amortization and impairment charges
+800,000
+-4,177
+291,667
+700,000
+2015³
+291,667
+25,196
+12,715
+12,715
+12,715
+25,196
+12,715
+725,196
+304,382
+304,382
+304,382
+725,196
+304,382
+One-year variable compensation
+600,000
+250,000
+562,500
+291,667
+291,667
+700,000
+Total
+350,000
+787,500
+332,640
+775,000
+1,550,000
+600,000
+175,000
+1,200,000
+350,000
+2,948,440 1,823,440 4,160,940
+2,156,080
+789,333
+181,808
+3,130,248
+181,808
+4,342,748
+181,808
+2,337,888
+2014
+Mike Winkel (Member of the Management Board until May 31, 2015)
+Compensation granted
+2015 2015 (min.) 2015 (max.)
+Compensation allocated
+2014
+Fixed compensation
+Fringe benefits
+181,808
+2,005,248
+1,823,440
+330,000
+858,000
+94
+Corporate Governance Report
+The following table provides a summary overview of the
+above-described components of the Management Board's
+compensation as well as their metrics and parameters:
+Summary Overview of Compensation Components
+Compensation component
+Fixed compensation
+Base salary
+Fringe benefits
+Metric/Parameter
+•
+Management Board Chairman: €1,240,000
+Management Board members: €700,000
+€800,000
+Chauffer-driven company car, telecommunications equipment, insurance premiums, medical examination
+Performance-based compensation
+Annual bonus
+.
+Target bonus at 100 percent target attainment:
+Possibility of special
+compensation
+Long-term variable
+compensation:
+88,033
+722,415
+88,033 125,922
+954,915 1,640,451
+88,033
+392,415
+88,033
+642,415
+- Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Performance Plan, sixth Tranche (2011-2014)
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+558,000
+300,000
+- Share Matching Plan, fourth tranche (2016-2020)
+Total
+Multi-year variable compensation
+Service cost
+³The LTI component of the 2015 bonus will be paid out as part of the 2015 bonus.
+See footnotes on page 90.
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into any
+contingencies of behalf of the members of the Management
+Board in the 2015 financial year. Page 218 contains additional
+information about the members of the Management Board.
+2,183,196
+554,382
+304,382
+866,882 1,514,529
+634,382
+125,922
+2,309,118
+Total
+Share Matching Plan
+1,823,440 1,823,440
+Compensation allocated
+2015
+408,333
+724,507
+724,507
+724,507
+720,800
+724,507
+One-year variable compensation
+600,000
+600,000
+1,350,000
+789,333
+855,360
+Multi-year variable compensation
+858,000
+- Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Performance Plan, sixth Tranche (2011-2014)
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+558,000
+300,000
+24,507
+20,800
+24,507
+24,507
+725,332
+3,947,332
+1,301,680 1,663,385
+-4,147
+Klaus Schäfer (Member of the Management Board until December 31, 2015)
+Compensation granted
+Compensation allocated
+2014
+2015 2015 (min.) 2015 (max.)
+2014
+- Share Matching Plan, fourth tranche (2016-2020)
+Fixed compensation
+Total
+700,000
+700,000
+700,000
+700,000
+700,000
+2015³
+700,000
+20,800
+720,800
+24,507
+Fringe benefits
+1,415,107
+Total
+1,324,507
+Service cost
+Total
+See footnotes on page 90.
+Table of Compensation Granted and Allocated
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Michael Sen (Member of the Management Board since June 1, 2015)
+93
+Compensation granted
+2014
+408,333
+2015 2015 (min.) 2015 (max.)
+408,333
+2014
+1,415,107
+1,823,440
+1,415,107
+408,333
+1,415,107
+Total
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, second tranche (2014-2018)
+724,507 2,074,507 1,510,133
+1,579,867
+Service cost
+152,876
+Total
+2,331,676
+225,291
+1,549,798
+225,291
+949,798
+225,291 152,876
+2,299,798 1,663,009
+2,178,800
+225,291
+1,805,158
+Table of Compensation Granted and Allocated
+€
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+-Final calculation and payment of multi-year component
+of 2012 bonus
+- Share Performance Plan, sixth Tranche (2011-2014)
+³The LTI component of the 2015 bonus will be paid out as part of the 2015 bonus.
+See footnotes on page 90.
+•
+CEO Letter
+- Target bonus for Management Board members: €900,000 €1,100,000
+The Company has taken out D&O insurance for Management
+Board and Supervisory Board members. In accordance with
+the German Stock Corporation Act and the German Corporate
+Governance Code's recommendation, this insurance includes
+a deductible of 10 percent of the respective damage claim for
+Management Board and Supervisory Board members. The
+deductible has a maximum cumulative annual cap of 150 per-
+cent of a member's annual fixed compensation.
+95
+96 Consolidated Financial Statements
+Independent Auditor's Report
+To E.ON SE, Düsseldorf
+Report on the Consolidated Financial Statements
+We have audited the accompanying consolidated financial
+statements of E.ON SE, Düsseldorf, and its subsidiaries, which
+comprise the consolidated balance sheet, the consolidated
+statement of income, the consolidated statement of recognized
+income and expenses, the consolidated statement of cash
+flows, the statement of changes in equity and the notes to the
+consolidated financial statements for the business year from
+January 1, 2015 to December 31, 2015.
+Board of Managing Directors' Responsibility for the
+Consolidated Financial Statements
+The Board of Managing Directors of E.ON SE, Düsseldorf, is
+responsible for the preparation of these consolidated financial
+statements. This responsibility includes that these consolidated
+financial statements are prepared in accordance with Inter-
+national Financial Reporting Standards, as adopted by the EU,
+and the additional requirements of German commercial law
+pursuant to § (Article) 315a Abs. (paragraph) 1 HGB ("Handels-
+gesetzbuch": German Commercial Code) and that these con-
+solidated financial statements give a true and fair view of the
+net assets, financial position and results of operations of
+the Group in accordance with these requirements. The Board
+of Managing Directors is also responsible for the internal
+controls the Board of Managing Directors determines are
+necessary to enable the preparation of consolidated financial
+statements that are free from material misstatement, whether
+due to fraud or error.
+Auditor's Responsibility
+Our responsibility is to express an opinion on these consoli-
+dated financial statements based on our audit. We conducted
+our audit in accordance with § 317 HGB and German generally
+accepted standards for the audit of financial statements pro-
+mulgated by the Institut der Wirtschaftsprüfer (Institute of
+Public Auditors in Germany) (IDW) and additionally observed
+the International Standards on Auditing (ISA). Accordingly,
+we are required to comply with ethical requirements and
+plan and perform the audit to obtain reasonable assurance
+about whether the consolidated financial statements are
+free from material misstatement.
+An audit involves performing audit procedures to obtain audit
+evidence about the amounts and disclosures in the consoli-
+dated financial statements. The selection of audit procedures
+depends on the auditor's professional judgment. This includes
+the assessment of the risks of material misstatement of the
+consolidated financial statements, whether due to fraud or
+error. In assessing those risks, the auditor considers the inter-
+nal control system relevant to the entity's preparation of con-
+solidated financial statements that give a true and fair view.
+The aim of this is to plan and perform audit procedures that
+are appropriate in the given circumstances, but not for the
+purpose of expressing an opinion on the effectiveness of the
+Group's internal control system. An audit also includes evalu-
+ating the appropriateness of accounting policies used and the
+reasonableness of accounting estimates made by the Board
+of Managing Directors / Managing Directors, as well as evalu-
+ating the overall presentation of the consolidated financial
+statements.
+We believe that the audit evidence we have obtained is suffi-
+cient and appropriate to provide a basis for our audit opinion.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Other
+178,812 158,985
+3,203,637 3,134,282
+An expense-based approach was used for Supervisory Board compensation and attendance fees shown for 2014 and 2015.
+Total
+Dr. Karen de Segundo
+Dr. Theo Siegert
+Willem Vis (until June 30, 2014)
+140,000 140,000 110,000 110,000
+140,000 140,000 110,000 70,000
+140,000 140,000 70,000
+140,000 140,000 180,000
+70,000
+11,423
+17,735
+6,730
+18,567
+261,423 256,730
+267,735 228,567
+70,000
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+210,000 210,000
+35,000
+320,000 320,000
+105,000
+Subtotal
+2,366,667 2,340,000
+610,000
+610,000
+48,158
+25,297 3,024,825 2,975,297
+Attendance fees and meeting-related
+reimbursements
+180,000
+Audit Opinion
+According to § 322 Abs. 3 Satz (sentence) 1 HGB, we state
+that our audit of the consolidated financial statements has
+not led to any reservations.
+In our opinion based on the findings of our audit, the consoli-
+dated financial statements comply, in all material respects,
+with IFRSS, as adopted by the EU, and the additional require-
+ments of German commercial law pursuant to § 315a Abs. 1 HGB
+and give a true and fair view of the net assets and financial
+position of the Group as at December 31, 2015, as well as the
+results of operations for the business year then ended, in
+accordance with these requirements.
+116,218
+113,095
+Changes in inventories (finished goods and work in progress)
+11
+-61
+Own work capitalized
+(6)
+478
+345
+(5)
+Other operating income
+13,211
+10,980
+Cost of materials
+(8)
+- Target bonus for Management Board Chairman: €1,890,000
+(11)
+-104,211
+-99,916
+Personnel costs
+(7)
+250,000
+-1,497
+114,592
+Report on the Group Management Report
+We have audited the accompanying group management report
+of E.ON SE, Düsseldorf, which is combined with the manage-
+ment report of the company, for the business year from Janu-
+ary 1, 2015 to December 31, 2015. The Board of Managing
+Directors of E.ON SE, Düsseldorf, is responsible for the prepa-
+ration of the combined management report in accordance
+with the requirements of German commercial law applicable
+pursuant to § 315a Abs. 1 HGB. We conducted our audit in
+accordance with § 317 Abs. 2 HGB and German generally
+accepted standards for the audit of the combined management
+report promulgated by the Institut der Wirtschaftsprüfer
+(Institute of Public Auditors in Germany) (IDW). Accordingly,
+we are required to plan and perform the audit of the com-
+bined management report to obtain reasonable assurance
+about whether the combined management report is consistent
+with the consolidated financial statements and the audit
+findings, as a whole provides a suitable view of the Group's
+position and suitably presents the opportunities and risks
+of future development.
+According to § 322 Abs. 3 Satz 1 HGB we state, that our audit
+of the combined management report has not led to any res-
+ervations.
+In our opinion, based on the findings of our audit of the con-
+solidated financial statements and combined management
+report, the combined management report is consistent with
+the consolidated financial statements, as a whole provides
+a suitable view of the Group's position and suitably presents
+the opportunities and risks of future development.
+PricewaterhouseCoopers
+Aktiengesellschaft
+Wirtschaftsprüfungsgesellschaft
+Markus Dittmann
+Wirtschaftsprüfer
+(German Public Auditor)
+Aissata Touré
+Wirtschaftsprüferin
+(German Public Auditor)
+-1,396
+97
+E.ON SE and Subsidiaries Consolidated Statements of Income
+€ in millions
+Sales including electricity and energy taxes
+Electricity and energy taxes
+Sales
+Note
+2015
+20141
+117,614
+98
+110,000
+Düsseldorf, March 1, 2016
+Klaus Dieter Raschke (until December 31, 2014)
+Eberhard Schomburg (until December 31, 2015)
+Fred Schulz
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from age of 60
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of
+pension entitlement
+Virtual contributions equaling a maximum of 18 percent of fixed compensation and target bonus
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+Other compensation provisions
+Settlement cap
+Maximum of two years' total compensation or the total compensation for the remainder of the
+service agreement
+Settlement for change-of-control Settlement equal to two or three target salaries (base salary, target bonus, and fringe benefits),
+reduced by 20 percent
+Non-compete clause
+For six months after termination of service agreement, prorated compensation equal to fixed compensation
+and target bonus, at a minimum 60 percent of most recently received compensation
+¹For Management Board members appointed before 2010.
+Payments Made to Former Members of the
+Management Board
+Total payments made to former Management Board members
+and to their beneficiaries amounted to €15.8 million in 2015
+(prior year: €10.2 million). Provisions of €154.6 million (prior
+year: €175 million) have been provided for pension obligations
+to former Management Board members and their beneficiaries.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Compensation Plan for the Supervisory Board
+The compensation of Supervisory Board members is deter-
+mined by the Annual Shareholders Meeting and governed by
+Section 15 of the Company's Articles of Association. The purpose
+of the compensation plan is to enhance the Supervisory Board's
+independence for its oversight role. Furthermore, there are a
+number of duties that Supervisory Board members must per-
+form irrespective of the Company's financial performance.
+Supervisory Board members-in addition to being reimbursed
+for their expenses-therefore receive fixed compensation
+and compensation for committee duties.
+.
+•
+•
+Contribution-based benefits
+-
+Company performance: actual EBITDA vs. budget; if necessary, adjusted
+Amount of bonus depends on
+Cap: 200 percent of target bonus
+- Individual performance factor
+140,000
+• Divided into STI component (2/3) and LTI component (1/3)
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the
+annual bonus as long as the total bonus remains under the cap.
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The other
+members of the Supervisory Board receive compensation
+of €140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit
+and Risk Committee, an additional €110,000. Other committee
+•
+- Target value for Management Board Chairman: €1,260,000
+- Target value for Management Board members: €600,000 - €733,333
+• Cap: 200 percent of the target value
+• Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1)
+.
++ performance matching (1:0 to 1:2) depending on ROACE during vesting period
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting
+period and on the dividend payments during the four-year vesting period
+Pension benefits
+Final-salary-based benefits¹
+Granting of virtual shares of E.ON stock with a four-year vesting period
+Supervisory Board Compensation
+•
+Supervisory Board Compensation in 2015
+Clive Broutta (since July 1, 2014)
+140,000
+70,000
+140,000
+70,000
+Thies Hansen (since January 1, 2015)
+Baroness Denise Kingsmill CBE
+Eugen-Gheorghe Luha
+René Obermann
+70,000
+19,000
+213,333
+229,000
+140,000
+140,000
+140,000 140,000
+140,000 140,000
+chairmen receive an additional €140,000; committee mem-
+bers, an additional €70,000. Members serving on more than
+one committee receive the highest applicable committee
+compensation only. In contradistinction to the compensation
+just described, the Chairman and the Deputy Chairmen of the
+Supervisory Board receive no additional compensation for
+their committee duties. In addition, Supervisory Board members
+are paid an attendance fee of €1,000 per day for meetings
+of the Supervisory Board or its committees. Individuals who
+were members of the Supervisory Board or any of its com-
+mittees for less than an entire financial year receive pro rata
+compensation.
+140,000
+70,000
+140,000
+35,000
+210,000 175,000
+140,000 140,000
+213,333
+140,000
+133,333 320,000
+€
+2015
+Andreas Scheidt (since May 7, 2015)
+440,000
+2014
+440,000
+Supervisory Board
+compensation from
+affiliated companies
+2015
+Total
+2014
+Supervisory Board
+compensation
+Compensation for
+committee duties
+2015
+2014
+320,000 320,000
+The total compensation of the members of the Supervisory
+Board amounted to €3.2 million (prior year: €3.1 million).
+As in the prior year, no loans were outstanding or granted to
+Supervisory Board members in the 2015 financial year.
+133,333 320,000
+Erhard Ott (until May 7, 2015)
+Prof. Dr. Ulrich Lehner
+320,000
+Werner Wenning
+2014
+440,000
+2015
+440,000
+320,000
+Dividends received
+-949
+-1,114
+437
+-1,484
+358
+Interest paid
+Interest received
+-150
+Additional information on the Statements of Cash Flows is provided in Note 29.
+292
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+"Cash and cash equivalents at the beginning of 2015 also include an amount of €4 million at the Spain region, which is presented as a discontinued operation, and a com-
+bined total of €6 million from the generation activities in Spain and Italy, which are presented as disposal groups. Cash and cash equivalents of €15 million at the Italy region
+as of Jan. 1, 2015, were reclassified back to continuing operations in the cash flow statement, but not on the consolidated balance sheet. The figure for 2014 includes an
+amount of €12 million at the Pražská plynárenská group, which had been presented as a disposal group.
+5Cash and cash equivalents at the end of 2015 also include an amount of €1 million at E.ON E&P UK, which is presented as a disposal group. The figure for 2014 includes an
+amount of €4 million at the Spain region, which is presented as a discontinued operation, and a combined total of €6 million from the generation activities in Spain and Italy,
+which are presented as disposal groups. Cash and cash equivalents of €15 million at the Italy region as of Dec. 31, 2014, were reclassified back to continuing operations in the
+cash flow statement, but not on the consolidated balance sheet.
+Capital stock
+2,001
+6Cash and cash equivalents of continuing operations at the end of 2015 also include an amount of €1 million at E.ON E&P UK, which is presented as a disposal group. The figure
+for 2014 includes a combined total of €6 million from the generation activities in Spain and Italy, which had been presented as disposal groups. Cash and cash equivalents of
+€15 million at the Italy region as of Dec. 31, 2014, were reclassified back to continuing operations in the cash flow statement, but not on the consolidated balance sheet.
+103
+104
+Statement of Changes in Equity
+Additional
+Balance as of January 1, 2014
+Supplementary Information on Cash Flows from Operating Activities
+Income taxes paid (less refunds)
+Retained
+€ in millions
+240
+Report of the Supervisory Board
+2015
+5,190
+Strategy and Objectives
+Combined Group Management Report
+paid-in capital
+E.ON Stock
+Consolidated Financial Statements
+Tables and Explanations
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+€ in millions
+Net increase/decrease in cash and cash equivalents
+Effect of foreign exchange rates on cash and cash equivalents
+20141
+2,034
+-1,368
+-60
+45
+Cash and cash equivalents at the beginning of the year4
+3,216
+4,539
+Cash and cash equivalents at the end of the year5
+5,190
+3,216
+Less: Cash and cash equivalents of discontinued operations at the end of the year
+0
+4
+Cash and cash equivalents of continuing operations at the end of the year
+3,212
+earnings
+other comprehensive income
+23,306
+-3,160
+-2,198
+-2,175
+-314
+-511
+Remeasurements of defined
+benefit plans
+-2,198
+Changes in accumulated
+-2,175
+-314
+-511
+Balance as of December 31, 2014
+2,001
+13,077
+16,842
+-4,917
+887
+-803
+Balance as of January 1, 2015
+2,001
+-4,917
+CEO Letter
+13,077
+16,842
+-511
+13,733
+-314
+-5,358
+Change in scope of consolidation
+Treasury shares repurchased/sold
+Capital increase
+Capital decrease
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to
+put options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+-656
+-9
+-1,145
+48
+Changes in accumulated
+other comprehensive income
+Currency
+translation
+Available-for-
+adjustments
+sale securities
+-2,742
+1,201
+Cash flow
+hedges
+-292
+-2,175
+-4,611
+-104
+-3
+Changes in operating assets and liabilities and in income taxes
+-1,073
+-1,414
+958
+878
+Trade receivables
+1,138
+1,537
+Other operating receivables and income tax assets
+-2,481
+-8,081
+-174
+Trade payables
+-108
+Other operating liabilities and income taxes
+-977
+4,360
+Cash provided by (used for) operating activities of continuing operations (operating cash flow)²
+6,133
+6,354
+Cash provided by (used for) operating activities of discontinued operations
+46
+124
+Cash provided by (used for) operating activities
+289
+-226
+-668
+-217
+-6,377
+20141
+887
+-3,130
+-1
+162
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+Changes in provisions
+11,894
+8,723
+1,014
+1,260
+Changes in deferred taxes
+1,214
+616
+Gain/Loss on disposal of
+Other non-cash income and expenses
+Intangible assets and property, plant and equipment
+Equity investments
+Securities (>3 months)
+Inventories and carbon allowances
+15
+1,083
+-553
+-946
+-110
+6,179
+6,478
+Proceeds from disposal of
+4,513
+-3,235
+Cash provided by (used for) investing activities of discontinued operations
+Cash provided by (used for) investing activities
+Payments received/made from changes in capital³
+Cash dividends paid to shareholders of E.ON SE
+Cash dividends paid to non-controlling interests
+Proceeds from financial liabilities
+Repayments of financial liabilities
+Cash provided by (used for) financing activities of continuing operations
+Cash provided by (used for) financing activities of discontinued operations
+Cash provided by (used for) financing activities
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+2Additional information on operating cash flow is provided in Notes 29 and 33.
+³No material netting has taken place in either of the years presented here.
+120
+-28
+-706
+-840
+-153
+-199
+1,673
+2,258
+-4,816
+-5,799
+-3,882
+-4,608
+24
+-287
+-3,858
+-62
+-3,173
+2,630
+Intangible assets and property, plant and equipment
+Equity investments
+235
+318
+4,278
+2,312
+Purchases of investments in
+-4,174
+-4,637
+Intangible assets and property, plant and equipment
+-3,852
+-3,997
+Equity investments
+-322
+-640
+Proceeds from disposal of securities (> 3 months) and of financial receivables and fixed-term deposits
+Purchases of securities (> 3 months) and of financial receivables and fixed-term deposits
+4,000
+4,506
+-4,773
+-5,251
+Changes in restricted cash and cash equivalents
+138
+-421
+Cash provided by (used for) for investing activities of continuing operations
+-296
+9
+-803
+E.ON Stock
+Treasury shares repurchased/sold
+-6,798
+622
+-6,377
+20
+-421
+95
+656
+-1,714
+-1,002
+16,429
+-75
+15
+642
+-75
+3,209
+-561
+2,648
+19,077
+105
+106 Notes
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+These Consolidated Financial Statements have been prepared
+in accordance with Section 315a (1) of the German Commercial
+Code ("HGB") and with those International Financial Reporting
+Standards ("IFRS") and IFRS Interpretations Committee inter-
+pretations ("IFRIC") that were adopted by the European Com-
+mission for use in the EU as of the end of the fiscal year, and
+whose application was mandatory as of December 31, 2015.
+Principles
+The Consolidated Financial Statements of the E.ON Group
+("E.ON" or the "Group") are generally prepared based on histor-
+ical cost, with the exception of available-for-sale financial
+assets that are measured at fair value and of financial assets
+and liabilities (including derivative financial instruments)
+that are recognized in income and measured at fair value.
+-1,077
+34
+ཞ༔སྐྱས་མ
+བྷུ8བ་ཆ
+26,713
+-142
+788
+260
+167
+-18
+-966
+-163
+-10
+-142
+-142
+260
+167
+167
+-18
+-18
+-163
+-1,129
+-10
+34
+-7,440
+-6,999
+642
+622
+-441
+561
+Scope of Consolidation
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor has
+the current ability to direct the relevant activities of the
+investee entity. Relevant activities are those activities that most
+significantly affect the performance of a business. In addition,
+E.ON must participate in this business performance in the form
+of variable returns and be able to influence those returns to
+its benefit through existing opportunities and rights. Control
+is normally deemed established if E.ON directly or indirectly
+holds a majority of the voting rights in the investee. In struc-
+tured entities, control can be established be means of contrac-
+tual arrangements.
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into
+line with those of the Group. Intercompany receivables, liabil-
+ities and results between Group companies are eliminated
+in the consolidation process.
+Currencies
+ISO
+€1, rate at
+year-end
+€1, annual
+average rate
+Code
+2015
+2014
+2015
+2014
+British pound
+GBP
+0.73
+0.78
+0.73
+0.81
+Brazilian real
+BRL
+4.31
+3.22
+3.70
+3.12
+Norwegian krone
+NOK
+2015
+9.60
+The following table depicts the movements in exchange rates
+for the periods indicated for major currencies of countries
+outside the European Monetary Union:
+2,128
+Foreign-exchange transactions out of the Russian Federation
+may be restricted in certain cases. The Brazilian real is not
+freely convertible.
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than
+the euro are translated using the exchange rates applicable
+on the balance sheet date, while items of the statements
+of income are translated using annual average exchange rates.
+Material transactions of foreign subsidiaries occurring during
+the fiscal year are translated in the financial statements using
+the exchange rate at the date of the transaction. Differences
+arising from the translation of assets and liabilities compared
+with the corresponding translation of the prior year, as well
+as exchange rate differences between the income statement
+and the balance sheet, are reported separately in equity as
+a component of other comprehensive income.
+Associated Companies
+An associate is an entity over whose relevant activities E.ON
+has significant influence, but which is neither a subsidiary nor
+an interest in a joint venture. Significant influence exists when
+E.ON has the power to participate in the financial and oper-
+ating policy decisions of the investee but does not control or
+jointly control these decisions. Significant influence is gener-
+ally presumed if E.ON directly or indirectly holds at least 20 per-
+cent, but not more than 50 percent, of an entity's voting rights.
+Interests in associated companies are accounted for using
+the equity method. In addition, majority-owned companies
+in which E.ON does not exercise control due to restrictions
+concerning the control of assets or management are also
+generally accounted for using the equity method.
+Interests in associated companies accounted for using the
+equity method are reported on the balance sheet at cost,
+adjusted for changes in the Group's share of the net assets
+after the date of acquisition and for any impairment charges.
+Losses that might potentially exceed the Group's interest in
+an associated company when attributable long-term loans
+are taken into consideration are generally not recognized. Any
+difference between the cost of the investment and the
+remeasured value of its net assets is recognized in the Consol-
+idated Financial Statements as part of the carrying amount.
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro-rata
+basis if and insofar as these are material.
+Companies accounted for using the equity method are tested
+for impairment by comparing the carrying amount with its
+recoverable amount. If the carrying amount exceeds the recov-
+erable amount, the carrying amount is adjusted for this
+difference. If the reasons for previously recognized impairment
+losses no longer exist, such impairment losses are reversed
+accordingly.
+The financial statements of equity interests accounted for
+using the equity method are generally prepared using account-
+ing that is uniform within the Group.
+CEO Letter
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Joint Ventures
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with
+joint-venture companies are eliminated within the consolidation
+process on a pro-rata basis if and insofar as these are material.
+Joint Operations
+A joint operation exists when E.ON and the other parties to
+a joint arrangement have direct rights to the assets, and obli-
+gations for the liabilities, attributable to the operation. In a
+joint operation, assets and liabilities, as well as revenues and
+expenses, are recognized pro rata according to the rights and
+obligations attributable to E.ON.
+Business Combinations
+Business combinations are accounted for by applying the
+purchase method, whereby the purchase price is offset against
+the proportional share in the acquired company's net assets.
+In doing so, the values at the acquisition date that corresponds
+to the date at which control of the acquired company was
+attained are used as a basis. The acquiree's identifiable assets,
+liabilities and contingent liabilities are generally recognized
+at their fair values irrespective of the extent attributable to
+non-controlling interests. The fair values of individual assets
+are determined using published exchange or market prices at
+the time of acquisition in the case of marketable securities,
+for example, and in the case of land, buildings and major tech-
+nical equipment, generally using independent expert reports
+that have been prepared by third parties. If exchange or mar-
+ket prices are unavailable for consideration, fair values are
+determined using the most reliable information available that
+is based on market prices for comparable assets or on suit-
+able valuation techniques. In such cases, E.ON determines fair
+value using the discounted cash flow method by discounting
+estimated future cash flows by a weighted-average cost of
+capital. Estimated cash flows are consistent with the internal
+mid-term planning data for the next three years, followed by
+two additional years of cash flow projections, which are extrapo-
+lated until the end of an asset's useful life using a growth rate
+based on industry and internal projections. The discount rate
+reflects the specific risks inherent in the acquired activities.
+Non-controlling interests can be measured either at cost
+(partial goodwill method) or at fair value (full goodwill
+method). The choice of method can be made on a case-by-
+case basis. The partial goodwill method is generally used
+within the E.ON Group.
+Transactions with holders of non-controlling interests are
+treated in the same way as transactions with investors. Should
+the acquisition of additional shares in a subsidiary result in
+a difference between the cost of purchasing the shares and
+the carrying amounts of the non-controlling interests acquired,
+that difference must be fully recognized in equity.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do
+not coincide with a loss of control.
+Intangible assets must be recognized separately from goodwill
+if they are clearly separable or if their recognition arises from
+a contractual or other legal right. Provisions for restructuring
+measures may not be recorded in a purchase price allocation.
+If the purchase price paid exceeds the proportional share in the
+net assets at the time of acquisition, the positive difference
+is recognized as goodwill. No goodwill is recognized for positive
+differences attributable to non-controlling interests. A nega-
+tive difference is immediately recognized in income.
+Foreign Currency Translation
+The Company's transactions denominated in foreign currency
+are translated at the current exchange rate at the date of
+the transaction. Monetary foreign currency items are adjusted
+to the current exchange rate at each balance sheet date; any
+gains and losses resulting from fluctuations in the relevant
+currencies, and the effects upon realization, are recognized
+in income and reported as other operating income and other
+operating expenses, respectively. Gains and losses from the
+translation of non-derivative financial instruments used in
+hedges of net investments in foreign operations are recognized
+in equity as a component of other comprehensive income. The
+ineffective portion of the hedging instrument is immediately
+recognized in income.
+107
+108 Notes
+Foreign currency translation effects that are attributable to
+the cost of monetary financial instruments classified as avail-
+able for sale are recognized in income. In the case of fair-
+value adjustments of monetary financial instruments and for
+non-monetary financial instruments classified as available
+for sale, the foreign currency translation effects are recognized
+in equity as a component of other comprehensive income.
+Change in scope of consolidation
+-595
+24,585
+-434
+-468
+-100
+2,001
+12,558
+9,419
+-5,351
+419
+-903
+Treasury shares
+-3,484
+561
+Equity
+attributable
+of E.ON SE
+33,723
+Non-controlling
+interests (before
+reclassification)
+3,574
+-115
+982
+317
+6
+-15
+-1,145
+to shareholders
+-100
+-468
+-434
+Capital increase
+Capital decrease
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to
+put options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Remeasurements of defined
+benefit plans
+Changes in accumulated
+other comprehensive income
+Balance as of December 31, 2015
+-519
+-9
+-966
+-10
+-6,438
+-434
+-468
+-100
+-6,999
+561
+-207
+48
+-71
+Reclassification
+-449
+-8,807
+-3,160
+30
+30
+-3,130
+-5,198
+-479
+-479
+-5,677
+-2,198
+-184
+-184
+-2,382
+-3,000
+-295
+-295
+-3,295
+-2,502
+24,585
+2,723
+-595
+2,128
+26,713
+-2,502
+-449
+2,723
+-8,358
+64
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+related to
+Non-controlling
+put options
+interests
+Total
+-659
+2,915
+36,638
+-115
+-115
+317
+6
+6
+-15
+-15
+-207
+-1,352
+-71
+-23
+64
+64
+Income/Loss from discontinued operations, net
+8.95
+€ in millions
+242
+Items that might be reclassified subsequently to the income statement
+-1,077
+-3,295
+Total income and expenses recognized directly in equity
+-421
+-5,677
+Total recognized income and expenses (total comprehensive income)
+Attributable to shareholders of E.ON SE
+-6,798
+-8,807
+-7,440
+-8,358
+Attributable to non-controlling interests
+642
+-449
+-426
+Income taxes
+86
+Reclassification adjustments recognized in income
+-262
+-118
+Net income/loss
+-380
+-236
+-142
+-2,530
+99
+-210
+68
+27
+Companies accounted for under the equity method
+Unrealized changes
+-162
+-27
+-248
+-27
+-2,557
+-498
+100
+December 31,
+Other financial assets
+(15)
+5,926
+6,354
+Equity investments
+1,202
+1,573
+Non-current securities
+4,724
+4,781
+Financial receivables and other financial assets
+(17)
+3,571
+3,533
+Operating receivables and other operating assets
+5,009
+4,536
+(15)
+Companies accounted for under the equity method
+€ in millions
+Goodwill
+Note
+2015
+2014
+(14)
+6,441
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Assets
+11,812
+Property, plant and equipment
+(14)
+4,465
+4,882
+(14)
+38,997
+41,273
+Intangible assets
+-663
+-348
+-55
+315.98
+HUF
+Hungarian forint
+3.03
+2.83
+3.18
+TRY
+Turkish lira
+9.10
+9.35
+9.39
+9.19
+SEK
+Swedish krona
+68.07 50.95
+315.54
+2.91
+310.00 308.71
+U.S. dollar
+USD
+9.04
+The electricity tax is levied on electricity delivered to retail
+customers and is calculated on the basis of a fixed tax rate
+per kilowatt-hour ("kWh"). This rate varies between different
+classes of customers. Electricity and energy taxes paid are
+deducted from sales revenues on the face of the income state-
+ment if those taxes are levied upon delivery of energy to the
+retail customer.
+Electricity and Energy Taxes
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+c) Dividend Income
+Interest income is recognized pro rata using the effective
+interest method.
+b) Interest Income
+72.34
+Revenues are generated primarily from the sale of electricity
+and gas to industrial and commercial customers, to retail
+customers and to wholesale markets. Also shown in this line
+item are revenues earned from the distribution of electricity
+and gas and from deliveries of steam, heat and water.
+The Company generally recognizes revenue upon delivery
+of goods to customers or purchasers, or upon completion of
+services rendered. Delivery is deemed complete when the
+risks and rewards associated with ownership have been trans-
+ferred to the buyer as contractually agreed, compensation
+has been contractually established and collection of the result-
+ing receivable is probable. Revenues from the sale of goods
+and services are measured at the fair value of the consideration
+received or receivable. They reflect the value of the volume
+supplied, including an estimated value of the volume supplied
+to customers between the date of the last invoice and the end
+of the period.
+a) Revenues
+Recognition of Income
+1.33
+1.11
+1.21
+1.09
+Revenues include the surcharge mandated by the German
+Renewable Energy Sources Act and are presented net of
+sales taxes, returns, rebates and discounts, and after elimina-
+tion of intragroup sales.
+80.67
+RUB
+Russian ruble
+943
+Items that will not be reclassified subsequently to the income statement
+656
+-2,382
+Cash flow hedges
+Unrealized changes
+Reclassification adjustments recognized in income
+-679
+Available-for-sale securities
+Reclassification adjustments recognized in income
+Currency translation adjustments
+Unrealized changes
+Reclassification adjustments recognized in income
+151
+-718
+499
+Unrealized changes
+(17)
+-26
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+Income taxes
+8.35
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+12
+Tables and Explanations
+2015
+2014
+-6,377
+-3,130
+Remeasurements of defined benefit plans
+1,323
+-3,299
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+€ in millions
+Net income/loss
+5,534
+-26
+Income tax assets
+14,954
+15,784
+Operating liabilities
+(26)
+8,346
+7,804
+Income taxes
+(10)
+1,562
+2,651
+Provisions for pensions and similar obligations
+(24)
+4,210
+5,574
+Miscellaneous provisions
+(26)
+Financial liabilities
+26,713
+19,077
+(22)
+-5,835
+-4,833
+(19)
+-1,714
+-2,502
+16,429
+(25)
+24,585
+2,723
+-561
+-595
+(23)
+2,648
+2,128
+Equity
+3,209
+16,842
+26,445
+Deferred tax liabilities
+4,280
+4,120
+Liabilities associated with assets held for sale
+(4)
+751
+2,227
+Current liabilities
+33,444
+35,642
+Total equity and liabilities
+113,693
+3,947
+101
+102
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+(25)
+Miscellaneous provisions
+797
+814
+(10)
+5,655
+5,720
+Non-current liabilities
+61,172
+63,335
+Financial liabilities
+25,802
+(26)
+3,883
+Trade payables and other operating liabilities
+(26)
+24,811
+24,615
+Income taxes
+(10)
+2,788
+9,419
+125,690
+Reclassification related to put options
+Non-controlling interests
+25,331
+24,311
+Income tax assets
+(10)
+1,330
+1,745
+Liquid funds
+Securities and fixed-term deposits
+Restricted cash and cash equivalents
+Cash and cash equivalents
+Assets held for sale
+Current assets
+Total assets
+(18)
+8,190
+(17)
+Trade receivables and other operating assets
+1,376
+1,493
+(21)
+(10)
+83
+Deferred tax assets
+(10)
+4,096
+6,172
+6,067
+Non-current assets
+83,065
+Inventories
+(16)
+2,546
+3,356
+Financial receivables and other financial assets
+(17)
+73,612
+2,078
+46
+923
+Note
+2015
+2014
+Capital stock
+(19)
+2,001
+2,001
+Additional paid-in capital
+(20)
+12,558
+13,077
+Retained earnings
+Accumulated other comprehensive income
+Treasury shares
+1,812
+December 31,
+€ in millions
+Equity attributable to shareholders of E.ON SE
+Tables and Explanations
+1,064
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Equity and Liabilities
+5,189
+3,191
+(4)
+1,191
+5,770
+40,081
+Non-controlling interests (before reclassification)
+113,693
+42,625
+Combined Group Management Report
+Strategy and Objectives
+Consolidated Financial Statements
+Report of the Supervisory Board
+125,690
+CEO Letter
+E.ON Stock
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of
+the contract are not recognized in income. They are instead
+deferred and recognized in income systematically over the
+term of the derivative. An exception to the accrual principle
+applies if unrealized gains and losses from the initial mea-
+surement are verified by quoted market prices, observable prices
+of other current market transactions or other observable data
+supporting the valuation technique. In this case the gains and
+losses are recognized in income.
+Contracts that are entered into for purposes of receiving or
+delivering non-financial items in accordance with E.ON's
+anticipated procurement, sale or use requirements, and held
+as such, can be classified as own-use contracts. They are not
+accounted for as derivative financial instruments at fair value
+in accordance with IAS 39, but as open transactions subject
+to the rules of IAS 37.
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualita-
+tive disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments
+is provided in Notes 30 and 31.
+CEO Letter
+The Company measures inventories at the lower of acquisition
+or production cost and net realizable value. The cost of raw
+materials, finished products and goods purchased for resale is
+determined based on the average cost method. In addition
+to production materials and wages, production costs include
+material and production overheads based on normal capacity.
+The costs of general administration are not capitalized. Inven-
+tory risks resulting from excess and obsolescence are provided
+for using appropriate valuation allowances, whereby invento-
+ries are written down to net realizable value.
+Receivables and Other Assets
+Receivables and other assets are initially measured at fair
+value, which generally approximates nominal value. They are
+subsequently measured at amortized cost, using the effective
+interest method. Valuation allowances, included in the reported
+net carrying amount, are provided for identifiable individual
+risks. If the loss of a certain part of the receivables is probable,
+valuation allowances are provided to cover the expected loss.
+Liquid Funds
+Liquid funds include current available-for-sale securities, checks,
+cash on hand and bank balances. Bank balances and available-
+for-sale securities with an original maturity of more than three
+months are recognized under securities and fixed-term
+deposits. Liquid funds with an original maturity of less than
+three months are considered to be cash and cash equivalents,
+unless they are restricted.
+Restricted cash with a remaining maturity in excess of
+twelve months is classified as financial receivables and other
+financial assets.
+Primary and derivative financial instruments are netted on
+the balance sheet if E.ON has both an unconditional right-
+even in the event of the counterparty's insolvency-and the
+intention to settle offsetting positions simultaneously or on
+a net basis.
+Inventories
+IAS 39 sets requirements for the designation and documen-
+tation of hedging relationships, the hedging strategy, as well
+as ongoing retrospective and prospective measurement of
+effectiveness in order to qualify for hedge accounting. The Com-
+pany does not exclude any component of derivative gains
+and losses from the measurement of hedge effectiveness. Hedge
+accounting is considered to be appropriate if the assessment
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+If a derivative instrument qualifies as a cash flow hedge under
+IAS 39, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the
+period or periods during which the cash flows of the transac-
+tion being hedged affect income. The hedging result is reclassi-
+fied into income immediately if it becomes probable that the
+hedged underlying transaction will no longer occur. For hedging
+instruments used to establish cash flow hedges, the change
+in fair value of the ineffective portion is recognized immediately
+in the income statement to the extent required. To hedge
+the foreign currency risk arising from the Company's net invest-
+ment in foreign operations, derivative as well as non-derivative
+financial instruments are used. Gains or losses due to changes
+in fair value and from foreign currency translation are recog-
+nized separately within equity, as a component of other com-
+prehensive income, under currency translation adjustments.
+All other transactions in which E.ON is the lessor are treated
+as operating leases. E.ON retains the leased property on its
+balance sheet as an asset, and the lease payments are gener-
+ally recorded on a straight-line basis as income over the term
+of the lease.
+Assets Held for Sale and Liabilities Associated
+with Assets Held for Sale
+Financial Instruments
+Non-Derivative Financial Instruments
+Non-derivative financial instruments are recognized at fair
+value, including transaction costs, on the settlement date when
+acquired. IFRS 13, "Fair Value Measurement," ("IFRS 13") defines
+fair value as the price that would be received to sell an asset
+or paid to transfer a liability in an orderly transaction between
+market participants on the measurement date (exit price).
+The valuation techniques used are classified according to the
+fair value hierarchy provided for by IFRS 13.
+Unconsolidated equity investments and securities are measured
+in accordance with IAS 39, "Financial Instruments: Recognition
+and Measurement" ("IAS 39"). E.ON categorizes financial assets
+as held for trading, available for sale, or as loans and receiv-
+ables. Management determines the categorization of the
+financial assets at initial recognition.
+Available-for-sale securities are non-derivative financial assets
+that have been allocated either to this category or to none
+of the other categories mentioned above. They are allocated
+to non-current assets as long as the management does not
+intend to sell them within twelve months after the balance
+sheet date, and as long as the asset does not mature within
+that same period. Securities categorized as available for
+sale are carried at fair value on a continuing basis, with any
+resulting unrealized gains and losses, net of related deferred
+taxes, reported as a component of equity (other comprehen-
+sive income) until realized. Realized gains and losses are
+determined by analyzing each transaction individually. If there
+is objective evidence of impairment, any losses previously
+recognized in other comprehensive income are instead recog-
+nized in financial results. When estimating a possible impair-
+ment loss, E.ON takes into consideration all available infor-
+mation, such as market conditions and the length and extent
+of the impairment. If the value on the balance sheet date of
+the equity instruments classified as available for sale and of
+similar long-term investments is more than 20 percent below
+their cost, or if the value has been more than 10 percent below
+its cost for a period of more than twelve months, this consti-
+tutes objective evidence of impairment. For debt instruments,
+objective evidence of impairment is generally deemed present
+if one of the three major rating agencies has downgraded
+its rating from investment-grade to non-investment-grade.
+Reversals of impairment losses relating to equity instruments
+are recognized exclusively in equity, while reversals relating
+to debt instruments are recognized entirely in income.
+Loans and receivables (including trade receivables) are non-
+derivative financial assets with fixed or determinable payments
+that are not traded in an active market. Loans and receivables
+are reported on the balance sheet under "Receivables and
+other assets." They are subsequently measured at amortized
+cost. Valuation allowances are provided for identifiable indi-
+vidual risks.
+113
+Non-derivative financial liabilities (including trade payables)
+within the scope of IAS 39 are measured at amortized cost,
+using the effective interest method. Initial measurement takes
+place at fair value, with transaction costs included in the mea-
+surement. In subsequent periods, the amortization and accre-
+tion of any premium or discount is included in financial results.
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the trade date at
+initial recognition and in subsequent periods. IAS 39 requires
+that they be categorized as held for trading as long as they are
+not a component of a hedge accounting relationship. Gains
+and losses from changes in fair value are immediately recog-
+nized in net income.
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps and options. In commodities, the instruments used
+include physically and financially settled forwards and options
+related to electricity, gas, coal, oil and emission rights.
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit
+risk (debt value adjustment) and the credit risk of the corre-
+sponding counterparty (credit value adjustment). The counter-
+party risks thus determined are allocated to the individual
+financial instruments by applying the relative fair value method
+on a net basis.
+of hedge effectiveness indicates that the change in fair value
+of the designated hedging instrument is 80 to 125 percent
+effective at offsetting the change in fair value due to the hedged
+risk of the hedged item or transaction.
+Changes in fair value of derivative instruments that must be
+recognized in income are presented as other operating income
+or expenses. Gains and losses from interest-rate derivatives
+are netted for each contract and included in interest income.
+Gains and losses from derivative financial instruments are
+shown net as either revenues or cost of materials, provided
+they meet the corresponding conditions for such accounting.
+Certain realized amounts are, if related to the sale of products
+or services, also included in sales or cost of materials.
+114 Notes
+If an E.ON Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attrib-
+utable additional costs (net after income taxes), is deducted
+from E.ON SE's equity until the shares are retired, distributed
+or resold. If such treasury shares are subsequently distributed
+or sold, the consideration received, net of any directly attribut-
+able additional transaction costs and associated income taxes,
+is added to E.ON SE's equity.
+Discontinued operations are components of an entity that
+are either held for sale or have already been sold and can be
+clearly distinguished from other corporate operations, both
+of the net assets to be distributed and remeasured on each
+annual reporting date and on the settlement date on the
+basis of the fair value of the assets to be distributed, with any
+resulting changes recognized in equity as adjustments to
+the distribution amount. Any existing differences between the
+dividend liability on the settlement date and the carrying
+amount of the net assets distributed are recognized in the
+income statement.
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance
+with IAS 19 (revised 2011), "Employee Benefits," ("IAS 19R" or
+"IAS 19," used synonymously unless explicitly stated otherwise)
+is based on actuarial computations using the projected unit
+credit method, with actuarial valuations performed at year-end.
+The valuation encompasses both pension obligations and
+pension entitlements that are known on the reporting date and
+economic trend assumptions such as assumptions on wage
+and salary growth rates and pension increase rates, among
+others, that are made in order to reflect realistic expectations,
+as well as variables specific to reporting dates such as discount
+rates, for example.
+Included in gains and losses from the remeasurements of
+the net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between
+estimated and actual variations in underlying assumptions
+about demographic and financial variables. Additionally
+included is the difference between the actual return on plan
+assets and the interest income on plan assets included in
+117
+118 Notes
+the net interest result. Remeasurements effects are recognized
+in full in the period in which they occur and are not reported
+within the Consolidated Statements of Income, but are instead
+recognized within the Statements of Recognized Income and
+Expenses as part of equity.
+Distributions of Non-cash Assets to Owners
+IFRIC 17, "Distributions of Non-cash Assets to Owners," ("IFRIC 17")
+provides that distributions to owners can also take the form
+of in-kind assets. In Germany, the obligation to pay an in-kind
+dividend, once appropriately authorized by the Annual Share-
+holders Meeting, is recognized as a liability at the fair value
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fis-
+cal year is reported under personnel costs; the net interest on
+the net liability or asset from defined benefit pension plans
+determined based on the discount rate applicable at the start
+of the fiscal year is reported under financial results.
+The amount reported on the balance sheet represents the
+present value of the defined benefit obligations reduced by
+the fair value of plan assets. If a net asset position arises
+from this calculation, the amount is limited to the present
+value of available refunds and the reduction in future con-
+tributions and to the benefit from prepayments of minimum
+funding requirements. Such an asset position is recognized
+as an operating receivable.
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+Provisions for Asset Retirement Obligations and
+Other Miscellaneous Provisions
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation
+towards third parties as a result of a past event, it is probable
+that E.ON will be required to settle the obligation, and a reliable
+estimate can be made of the amount of the obligation. The
+provision is recognized at the expected settlement amount.
+Long-term obligations are reported as liabilities at the present
+value of their expected settlement amounts if the interest
+rate effect (the difference between present value and repay-
+ment amount) resulting from discounting is material; future
+cost increases that are foreseeable and likely to occur on the
+balance sheet date must also be included in the measurement.
+Long-term obligations are generally discounted at the market
+interest rate applicable as of the respective balance sheet
+date. The accretion amounts and the effects of changes in inter-
+est rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually cer-
+tain to be collected is capitalized as a separate asset. No
+offsetting within provisions is permitted. Advance payments
+remitted are deducted from the provisions.
+Obligations arising from the decommissioning or dismantling
+of property, plant and equipment are recognized during the
+period of their occurrence at their discounted settlement
+amounts, provided that the obligation can be reliably estimated.
+The carrying amounts of the respective property, plant and
+equipment are increased by the same amounts. In subsequent
+periods, capitalized asset retirement costs are amortized
+over the expected remaining useful lives of the assets, and the
+provision is accreted to its present value on an annual basis.
+Leasing transactions in which E.ON is the lessor and substan-
+tially all the risks and rewards incident to ownership of the
+leased property are transferred to the lessee are classified as
+finance leases. In this type of lease, E.ON records the present
+value of the minimum lease payments as a receivable. Payments
+by the lessee are apportioned between a reduction of the
+lease receivable and interest income. The income from such
+arrangements is recognized over the term of the lease using
+the effective interest method.
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+For the 2015 fiscal year, E.ON extended a multi-year bonus to
+certain executives who previously were eligible for a share-
+based compensation element. The configuration of that bonus
+is described in more detail in Note 11.
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2"). The E.ON Share Performance Plan introduced in
+fiscal 2006 involves share-based payment transactions that are
+settled in cash and measured at fair value as of each balance
+sheet date. From the sixth tranche forward, the 60-day average
+of the E.ON share price as of the balance sheet date is used
+as the fair value. In addition, the calculation of the provision
+for the sixth tranche takes into account the financial measures
+ROACE and WACC. The final allocations under the E.ON Share
+Performance Plan took place in fiscal 2012. Beginning in the
+2013 fiscal year, share-based payments have been based on the
+E.ON Share Matching Plan. Under this plan, the number of
+allocated rights is governed by the development of the finan-
+cial measure ROACE. The compensation expense is recognized
+in the income statement pro rata over the vesting period. The
+E.ON Share Matching Plan also represents a cash-settled
+share-based payment.
+Share-Based Payment
+115
+116 Notes
+operationally and for financial reporting purposes. Additionally,
+the component classified as a discontinued operation must
+represent a major business line or a specific geographic busi-
+ness segment of the Group.
+Non-current assets that are held for sale either individually
+or collectively as part of a disposal group, or that belong to
+a discontinued operation, are no longer depreciated. They are
+instead accounted for at the lower of the carrying amount
+and the fair value less any remaining costs to sell. If the fair
+value is less than the carrying amount, an impairment loss
+is recognized.
+The income and losses resulting from the measurement of
+components held for sale at fair value less any remaining
+costs to sell, as well as the gains and losses arising from the
+disposal of discontinued operations, are reported separately
+on the face of the income statement under income/loss from
+discontinued operations, net, as is the income from the ordi-
+nary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance
+sheet. The cash flows of discontinued operations are reported
+separately in the cash flow statement, with prior-year figures
+adjusted accordingly. However, there is no reclassification
+of prior-year balance sheet line items attributable to discon-
+tinued operations.
+Equity Instruments
+IFRS defines equity as the residual interest in the Group's
+assets after deducting all liabilities. Therefore, equity is the
+net amount of all recognized assets and liabilities.
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right
+to require E.ON to purchase their shares on specified condi-
+tions. None of the contractual obligations has led to the trans-
+fer of substantially all of the risk and rewards to E.ON at the
+time of entering into the contract. In such a case, IAS 32,
+"Financial Instruments: Presentation," ("IAS 32") requires that
+a liability be recognized at the present value of the probable
+future exercise price. This amount is reclassified from a sepa-
+rate component within non-controlling interests and reported
+separately as a liability. The reclassification occurs irrespective
+of the probability of exercise. The accretion of the liability
+is recognized as interest expense. If a purchase commitment
+expires unexercised, the liability reverts to non-controlling
+interests. Any difference between liabilities and non-controlling
+interests is recognized directly in retained earnings.
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships,
+for example), such termination rights require the reclassifica-
+tion of non-controlling interests from equity into liabilities
+under IAS 32. The liability is recognized at the present value
+of the expected settlement amount irrespective of the prob-
+ability of termination. Changes in the value of the liability are
+reported within other operating income. Accretion of the
+liability and the non-controlling shareholders' share in net
+income are shown as interest expense.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Individual non-current assets or groups of assets held for
+sale and any directly attributable liabilities (disposal groups)
+are reported in these line items if they can be disposed of
+in their current condition and if there is sufficient probability
+of their disposal actually taking place. For a group of assets
+and associated liabilities to be classified as a disposal group,
+the assets and liabilities in it must be held for sale in a single
+transaction or as part of a comprehensive plan.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Value in use, or
+Zero.
+Any additional impairment loss that would otherwise have
+been allocated to the asset concerned must instead be allo-
+cated pro rata to the remaining assets of the unit.
+109
+110 Notes
+E.ON has elected to perform the annual testing of goodwill
+for impairment at the cash-generating unit level in the fourth
+quarter of each fiscal year.
+Fair value less costs to sell
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed
+in subsequent reporting periods.
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless
+their lives are considered to be indefinite. Factors such as typ-
+ical product life cycles and legal or similar limits on use are
+taken into account in the classification.
+Acquired intangible assets subject to amortization are classi-
+fied as marketing-related, customer-related, contract-based,
+and technology-based. Internally generated intangible assets
+subject to amortization are related to software. Intangible
+assets subject to amortization are measured at cost and use-
+ful lives. The useful lives of marketing-related, customer-
+related and contract-based intangible assets generally range
+between 5 and 25 years. Technology-based intangible assets
+are generally amortized over a useful life of between 3 and
+5 years. This category includes software in particular. Con-
+tract-based intangible assets are amortized in accordance
+with the provisions specified in the contracts. Useful lives
+and amortization methods are subject to annual verification.
+Intangible assets subject to amortization are tested for
+impairment whenever events or changes in circumstances
+indicate that such assets may be impaired.
+Intangible assets not subject to amortization are measured
+at cost and tested for impairment annually or more frequently
+if events or changes in circumstances indicate that such
+assets may be impaired. Moreover, such assets are reviewed
+annually to determine whether an assessment of indefinite
+useful life remains applicable.
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use and
+its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount
+and the recoverable amount is recognized and reported in
+income under "Depreciation, amortization and impairment
+charges."
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset
+subject to amortization to exceed the amount that would
+have been determined, net of amortization, had no impairment
+loss been recognized during the period.
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest
+identifiable group of assets (cash-generating unit) that the
+intangible asset may be assigned to is determined. See Note 14
+for additional information about goodwill and intangible assets.
+Intangible Assets
+•
+•
+If the impairment thus identified exceeds the goodwill allo-
+cated to the affected cash-generating unit, the remaining
+assets of the unit must be written down in proportion to their
+carrying amounts. Individual assets may be written down
+only if their respective carrying amounts do not fall below the
+highest of the following values as a result:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Accounting for Reductions of Shareholdings in Sub-
+sidiaries or Associated Companies
+If a subsidiary or associated company sells shares to a third
+party, leading to a reduction in E.ON's ownership interest in the
+relevant company ("dilution"), and consequently to a loss of
+control, joint control or significant influence, gains and losses
+from these dilutive transactions are included in the income
+statement under other operating income or expenses.
+Earnings per Share
+Basic (undiluted) earnings per share is computed by dividing
+the consolidated net income attributable to the shareholders
+of the parent company by the weighted-average number of
+ordinary shares outstanding during the relevant period. At E.ON,
+the computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued
+no potentially dilutive ordinary shares.
+Goodwill and Intangible Assets
+Goodwill
+According to IFRS 3, "Business Combinations," ("IFRS 3") good-
+will is not amortized, but rather tested for impairment at
+the cash-generating unit level on at least an annual basis.
+Impairment tests must also be performed between these
+annual tests if events or changes in circumstances indicate
+that the carrying amount of the respective cash-generating
+unit might not be recoverable.
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allo-
+cated are generally equivalent to the operating segments, since
+goodwill is reported, and considered in performance metrics for
+controlling, only at that level. With some exceptions, goodwill
+impairment testing is performed in euro, while the underlying
+goodwill is always carried in the functional currency.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of
+the cash-generating unit's fair value less costs to sell and its
+value in use. In a first step, E.ON determines the recoverable
+amount of a cash-generating unit on the basis of the fair value
+(less costs to sell) using generally accepted valuation proce-
+dures. This is based on the medium-term planning data of the
+respective cash-generating unit. Valuation is performed using
+the discounted cash flow method, and accuracy is verified
+through the use of appropriate multiples, to the extent avail-
+able. In addition, market transactions or valuations prepared
+by third parties for comparable assets are used to the extent
+available. If needed, a calculation of value in use is also per-
+formed. Unlike fair value, the value in use is calculated from
+the viewpoint of management. In accordance with IAS 36,
+"Impairment of Assets," ("IAS 36") it is further ensured that
+restructuring expenses, as well as initial and subsequent capital
+investments (where those have not yet commenced), in par-
+ticular, are not included in the valuation.
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+112 Notes
+Upon discovery of oil and/or gas reserves and field develop-
+ment approval, the relevant expenditures are reclassified as
+property, plant and equipment. Such property, plant and
+equipment is then depreciated in accordance with production
+volumes. For uneconomical drilling, the previously capitalized
+expenditures are immediately expensed. Other capitalized
+expenditures are also written off once it is determined that
+no viable reserves could be found. Other expenses for geo-
+logical and geophysical work (seismology) and licensing fees
+are immediately expensed.
+Borrowing Costs
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the
+time of acquisition or from the beginning of construction or
+production until its entry into service are capitalized and
+subsequently amortized alongside the related asset. In the case
+of a specific financing arrangement, the respective borrowing
+costs incurred for that particular arrangement during the period
+are used. For non-specific financing arrangements, a financing
+rate uniform within the Group of 5.75 percent was applied for
+2015 (2014: 5.5 percent). Other borrowing costs are expensed.
+Government Grants
+Government grants are recognized at fair value if it is highly
+probable that the grant will be issued and if the Group satis-
+fies the necessary conditions for receipt of the grant.
+Government grants for costs are posted as income over the
+period in which the costs to be compensated through the
+respective grants are incurred.
+Leasing
+Leasing transactions are classified according to the lease
+agreements and to the underlying risks and rewards specified
+therein in line with IAS 17, "Leases" ("IAS 17"). In addition,
+IFRIC 4, "Determining Whether an Arrangement Contains a
+Lease," ("IFRIC 4") further defines the criteria as to whether
+an agreement that conveys a right to use an asset meets the
+definition of a lease. Certain purchase and supply contracts
+in the electricity and gas business as well as certain rights of
+use may be classified as leases if the criteria are met. E.ON
+is party to some agreements in which it is the lessor and to
+others in which it is the lessee.
+Leasing transactions in which E.ON is the lessee are classified
+either as finance leases or operating leases. If the Company
+bears substantially all of the risks and rewards incident to own-
+ership of the leased property, the lease is classified as a finance
+lease. Accordingly, the Company recognizes on its balance
+sheet the asset and the associated liability in equal amounts.
+Recognition takes place at the beginning of the lease term
+at the lower of the fair value of the leased property or the
+present value of the minimum lease payments.
+The leased property is depreciated over its useful economic
+life or, if it is shorter, the term of the lease. The liability is sub-
+sequently measured using the effective interest method.
+All other transactions in which E.ON is the lessee are classified
+as operating leases. Payments made under operating leases
+are generally expensed over the term of the lease.
+CEO Letter
+Report of the Supervisory Board
+111
+Strategy and Objectives
+Exploration for and Evaluation of Mineral Resources
+The exploration and field development expenditures are
+accounted for using the so-called "successful efforts method."
+In accordance with IFRS 6, "Exploration for and Evaluation of
+Mineral Resources," ("IFRS 6") expenditures for exploratory
+drilling for which the outcome is not yet certain are initially
+capitalized as an intangible asset.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part
+of the acquisition or production cost of the asset, or else—if
+relevant-recognized as a separate asset if it is probable that
+the Group will receive a future economic benefit and the cost
+can be determined reliably.
+Research and Development Costs
+Under IFRS, research and development costs must be allocated
+to a research phase and a development phase. While expen-
+diture on research is expensed as incurred, recognized devel-
+opment costs must be capitalized as an intangible asset if
+all of the general criteria for recognition specified in IAS 38,
+as well as certain other specific prerequisites, have been ful-
+filled. In the 2015 and 2014 fiscal years, these criteria were not
+fulfilled, except in the case of internally generated software.
+Emission Rights
+Under IFRS, emission rights held under national and interna-
+tional emission-rights systems for the settlement of obligations
+are reported as intangible assets. Because emission rights
+are not depleted as part of the production process, they are
+reported as intangible assets not subject to amortization.
+Emission rights are capitalized at cost at the time of acquisition.
+A provision is recognized for emissions produced. The provision
+is measured at the carrying amount of the emission rights
+held or, in the case of a shortfall, at the current fair value of the
+emission rights needed. The expenses incurred for the recog-
+nition of the provision are reported under cost of materials.
+Property, Plant and Equipment
+Property, plant and equipment are initially measured at acqui-
+sition or production cost, including decommissioning or res-
+toration cost that must be capitalized, and are depreciated
+over the expected useful lives of the components, generally
+using the straight-line method, unless a different method of
+depreciation is deemed more suitable in certain exceptional
+cases. The useful lives of the major components of property,
+plant and equipment are presented below:
+Useful Lives of Property, Plant and
+Equipment
+Buildings
+Technical equipment, plant and machinery
+Other equipment, fixtures, furniture and
+office equipment
+10 to 50 years
+10 to 65 years
+3 to 25 years
+Property, plant and equipment are tested for impairment
+whenever events or changes in circumstances indicate that an
+asset may be impaired. In such a case, property, plant and
+equipment are tested for impairment according to the prin-
+ciples prescribed for intangible assets in IAS 36. If an impair-
+ment loss is determined, the remaining useful life of the asset
+might also be subject to adjustment, where applicable. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed and recognized in
+income. Such reversal shall not cause the carrying amount to
+exceed the amount that would have resulted had no impair-
+ment taken place during the preceding periods.
+Investment subsidies do not reduce the acquisition and
+production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income.
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Government investment subsidies do not reduce the acquisi-
+tion and production costs of the respective assets; they are
+instead reported on the balance sheet as deferred income.
+They are recognized in income on a straight-line basis over
+the associated asset's expected useful life.
+In June 2014, the IASB published amendments to IAS 16 and
+IAS 41. They provide that bearer plants shall be accounted for
+in the same way as property, plant and equipment, in accor-
+dance with IAS 16. IAS 41 shall continue to apply for the pro-
+duce they bear. As a result of the amendments, bearer plants
+will in future no longer be measured at fair value less esti-
+mated costs to sell, but rather in accordance with IAS 16,
+Esperanto Infrastructure
+Omnibus Standard to Amend Multiple International
+Financial Reporting Standards (2012-2014 Cycle)
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In September 2014, the IASB pub-
+lished a corresponding omnibus standard. It contains changes
+to IFRS and their associated Bases for Conclusions. The revi-
+sions affect the standards IFRS 5, IFRS 7, IAS 19 and IAS 34.
+The amendments shall be applied for fiscal years beginning
+on or after January 1, 2016. Earlier application is permitted.
+The EU has adopted these amendments into European law
+without specifying an alternative mandatory effective date.
+They will result in no material changes for E.ON affecting its
+Consolidated Financial Statements.
+Omnibus Standard to Amend Multiple International
+Financial Reporting Standards (2010-2012 Cycle)
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In December 2013, the IASB pub-
+lished a corresponding omnibus standard. It contains changes
+to IFRS and their associated Bases for Conclusions. The revi-
+sions affect the standards IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16,
+IAS 24, IAS 37, IAS 38 and IAS 39. The EU has adopted these
+amendments into European law. Consequently, they shall be
+applied for fiscal years beginning on or after February 1, 2015.
+They will result in no material changes for E.ON affecting its
+Consolidated Financial Statements.
+The IASB issued an amendment to this standard on Septem-
+ber 11, 2015, changing its effective date. Consequently, the
+standard shall be applied for fiscal years beginning on or
+after January 1, 2018.
+IFRS 15, "Revenue from Contracts with Customers"
+In May 2014, the IASB published the new standard IFRS 15,
+"Revenue from Contracts with Customers" ("IFRS 15"). IFRS 15
+will replace IAS 11, "Construction Contracts," IAS 18, "Revenue,"
+IFRIC 13, "Customer Loyalty Programmes," IFRIC 15, "Agreements
+for the Construction of Real Estate," IFRIC 18, "Transfers of
+Assets from Customers," and SIC-31, "Revenue-Barter Trans-
+actions Involving Advertising Services." The standard defines
+when revenues should be recognized and in what amount.
+According to IFRS 15, revenues should be recognized in the
+amount that reflects the consideration expected for the per-
+formance obligations being undertaken. The standard shall be
+applied for fiscal years beginning on or after January 1, 2017.
+Earlier application is permitted. The standard has not yet been
+adopted by the EU into European law. E.ON is currently evalu-
+ating the impact on its Consolidated Financial Statements.
+On October 30, 2015, the EU decided not to adopt IFRS 14 into
+European law.
+that are subject to rate regulation to avoid having to make
+changes to accounting policies relating to regulatory deferrals.
+IFRS 14 shall be applied for fiscal years beginning on or after
+January 1, 2016. The introduction of the standard has no impact
+on the E.ON Consolidated Financial Statements as they are
+already prepared in accordance with IFRS.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In January 2014, the IASB published the new standard IFRS 14,
+"Regulatory Deferral Accounts" ("IFRS 14″). IFRS 14 gives an
+entity the option to apply this standard in its first IFRS finan-
+cial statements if it conducts rate-regulated activities and
+recognizes regulatory deferrals under the accounting policies
+it had previously applied. The intention is to allow entities
+IFRS 14, "Regulatory Deferral Accounts"
+In November 2009 and October 2010, respectively, the IASB
+published phases of the new standard IFRS 9, "Financial Instru-
+ments" ("IFRS 9"). Under IFRS 9, all financial instruments cur-
+rently within the scope of IAS 39 will henceforth generally be
+subdivided into only two classifications: financial instruments
+measured at amortized cost and financial instruments mea-
+sured at fair value. As part of the revisions of July 24, 2014, an
+additional measurement category has been introduced for
+debt instruments. These may in future be measured at fair
+value through other comprehensive income as long as the
+prerequisites for the corresponding business model and the
+contractual cash flows are met. The application of IFRS 9 is
+to be mandatory for fiscal years beginning on or after January 1,
+2018. Earlier application is permitted. In that context, the
+IASB also issued a discussion paper on further rules for macro
+hedge accounting, separately from IFRS 9. The standard has
+not yet been adopted by the EU into European law. E.ON is
+currently evaluating the impact on its Consolidated Financial
+Statements.
+IFRS 9, "Financial Instruments"
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. These standards and inter-
+pretations are not being applied by E.ON in the 2014 fiscal year
+because adoption by the EU remains outstanding at this time
+for some of them, or because their application is not yet
+mandatory.
+Standards and Interpretations Not Yet Applicable
+in 2015
+In May 2013, the IASB published IFRIC 21, "Levies," ("IFRIC 21")
+interpreting IAS 37, which addresses the timing of the recog-
+nition of obligations to pay levies imposed by governments.
+Taxes that are within the scope of other standards, such as
+income taxes, are explicitly excluded from this interpretation.
+The new guidance is aimed at eliminating diversity in accounting
+practice with respect to the timing of the recognition of obli-
+gations to pay levies imposed by governments. Accordingly,
+liabilities or, if applicable, provisions shall not be recognized
+until the obligating event has occurred. The interpretation shall
+be applied for fiscal years beginning on or after January 1, 2014.
+It has been adopted by the EU into European law. Consequently,
+its application is mandatory for fiscal years beginning on or
+after June 17, 2014. IFRIC 21 had no material impact on E.ON's
+Consolidated Financial Statements.
+IFRIC 21, "Levies"
+Amendments to IFRS 10, IFRS 12 and IAS 28-
+Investment Entities: Applying the Consolidation
+Exception
+In December 2014, the IASB published amendments to IFRS 10,
+IFRS 12 and IAS 28. The amendments are designed to clarify
+that entities that are both investment entities and parent
+entities are exempt from presenting consolidated financial
+statements even if they are themselves subsidiaries. They
+further clarify that subsidiaries providing investment-related
+services that are themselves investment entities shall be
+measured at fair value. For non-investment entities, they clarify
+that such entities should account for an investment entity
+using the equity method. The amendments shall be applied for
+fiscal years beginning on or after January 1, 2016. Earlier appli-
+cation is permitted. They have not yet been adopted by the
+EU into European law. E.ON anticipates that the amendments
+will have no impact on its Consolidated Financial Statements.
+Amendments to IAS 1, "Presentation of Financial
+Statements"
+In December 2014, the IASB published amendments to IAS 1.
+They are primarily intended to clarify disclosures of material
+information, and of the aggregation and disaggregation of line
+items on the balance sheet and in the statement of compre-
+hensive income. The amendments further provide that an
+entity's share of the other comprehensive income of companies
+accounted for using the equity method shall be presented
+in its statement of comprehensive income. The amendments
+Amendments to IAS 19-Defined Benefit Plans:
+Employee Contributions
+using either a cost model or a revaluation model. The amend-
+ments shall be applied for fiscal years beginning on or after
+January 1, 2016. Earlier application is permitted. The EU has
+adopted these amendments into European law without spec-
+ifying an alternative mandatory effective date. The amend-
+ments have no impact on E.ON's Consolidated Financial
+Statements.
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Amendments to IAS 16 and IAS 41-Agriculture:
+Bearer Plants
+Omnibus Standard to Amend Multiple International
+Financial Reporting Standards (2011-2013 Cycle)
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In December 2013, the IASB pub-
+lished a corresponding omnibus standard. It contains changes
+to IFRS and their associated Bases for Conclusions. The revi-
+sions affect the standards IFRS 1, IFRS 3, IFRS 13 and IAS 40.
+The EU has adopted these amendments into European law.
+Consequently, they shall be applied for fiscal years beginning
+on or after January 1, 2015. They will result in no material changes
+for E.ON affecting its Consolidated Financial Statements.
+In May 2014, the IASB published amendments to IAS 16 and
+IAS 38. The amendments contain further guidance on which
+methods can be used to depreciate property, plant and equip-
+ment, and to amortize intangible assets. In particular, they
+clarify that the use of a revenue-based method arising from
+an activity that includes the use of an asset does not provide
+an appropriate representation of its consumption. Within the
+context of IAS 38, however, this presumption can be rebutted
+in certain limited circumstances. The amendments shall be
+applied for fiscal years beginning on or after January 1, 2016.
+Earlier application is permitted. The EU has adopted these
+amendments into European law without specifying an alter-
+native mandatory effective date. E.ON anticipates that the
+amendments will have no impact on its Consolidated Financial
+Statements.
+combinations. Accordingly, the amendment now also includes
+past acquisitions of interests in joint operations in which
+the activity of the joint operation constitutes a business. The
+amendments shall be applied for fiscal years beginning on
+or after January 1, 2016. Earlier application is permitted. The
+EU has adopted these amendments into European law without
+specifying an alternative mandatory effective date. E.ON
+anticipates that the amendments will have no material impact
+on its Consolidated Financial Statements.
+In May 2014, the IASB published amendments to IFRS 11. The
+standard thus amended requires the acquirer of an interest
+in a joint operation in which the activity constitutes a business
+as defined in IFRS 3 to apply all of the principles relating to
+business combinations accounting in IFRS 3 and other stan-
+dards, as long as those principles are not in conflict with the
+guidance in IFRS 11. Accordingly, the relevant information
+specified in those standards is to be disclosed. These amend-
+ments necessitated consequential amendments to IFRS 1,
+"First-time Adoption of International Financial Reporting
+Standards," to have the exemption extended to business
+Amendments to IFRS 11-Accounting for Acquisi-
+tions of Interests in Joint Operations
+When the IASB published Exposure Draft ED/2015/7 on
+August 10, 2015, regarding the amendments to IFRS 10 and
+IAS 28, it proposed to defer the effective date of these
+amendments indefinitely.
+In September 2014, the IASB published amendments to IFRS 10
+and IAS 28. The amendments provide that unrealized gains
+from transactions between an investor and an associated com-
+pany or a joint venture should be recognized in full by the
+investor if the transaction involves a business. In transactions
+where only assets are being sold, the recognition of gains
+shall be partial. The amendments shall be applied for fiscal
+years beginning on or after January 1, 2016. Earlier application
+is permitted. They have not yet been adopted by the EU into
+European law. E.ON anticipates that the amendments will have
+no impact on its Consolidated Financial Statements.
+Amendments to IFRS 10 and IAS 28-Sale or
+Contribution of Assets between an Investor and
+its Associate or Joint Venture
+shall be applied for fiscal years beginning on or after January 1,
+2016. Earlier application is permitted. The EU has adopted
+these amendments into European law without specifying
+an alternative mandatory effective date. E.ON anticipates that
+the amendments will have no impact on its Consolidated
+Financial Statements.
+124 Notes
+123
+Amendments to IAS 16 and IAS 38-Clarification
+of Acceptable Methods of Depreciation and
+Amortization
+In November 2013, the IASB published amendments to
+IAS 19. This pronouncement amends IAS 19 in respect of the
+accounting for defined benefit plans involving contributions
+from employees (or third parties). If the contributions made
+by employees (or third parties) to a defined benefit plan are
+independent of the number of years of service, their nominal
+amount can still be deducted from the service cost. But if
+employee contributions vary according to the number of years
+of service, the benefits must be computed and attributed by
+applying the projected unit credit method. The amendments
+shall be applied for fiscal years beginning on or after July 1,
+2014. Earlier application is permitted. They have been adopted
+by the EU into European law. Consequently, application of the
+new amendments will be mandatory for fiscal years beginning
+on or after February 1, 2015. E.ON anticipates that the amend-
+ments will have no material impact on its Consolidated
+Financial Statements.
+The International Accounting Standards Board ("IASB") and
+the IFRS Interpretations Committee ("IFRS IC") have issued
+the following standards and interpretations that have been
+adopted by the EU into European law and whose application
+is mandatory in the reporting period from January 1, 2015,
+through December 31, 2015:
+(2) New Standards and Interpretations
+Deferred tax assets and liabilities are measured using the
+enacted or substantively enacted tax rates expected to be
+applicable for taxable income in the years in which temporary
+differences are expected to be recovered or settled. The
+effect on deferred tax assets and liabilities of changes in tax
+rates and tax law is generally recognized in income. Equity
+is adjusted for deferred taxes that had previously been recog-
+nized directly in equity.
+Deferred tax liabilities caused by temporary differences asso-
+ciated with investments in affiliated and associated compa-
+nies are recognized unless the timing of the reversal of such
+temporary differences can be controlled within the Group
+and it is probable that, owing to this control, the differences
+will in fact not be reversed in the foreseeable future.
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are recog-
+nized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that
+will result in taxable or deductible amounts when taxable
+income is calculated for future periods, unless those differences
+are the result of the initial recognition of an asset or liability
+in a transaction other than a business combination that, at the
+time of the transaction, affects neither accounting nor taxable
+profit/loss. Uncertain tax positions are recognized at their most
+likely value. IAS 12 further requires that deferred tax assets
+be recognized for unused tax loss carryforwards and unused
+tax credits. Deferred tax assets are recognized to the extent
+that it is probable that taxable profit will be available against
+which the deductible temporary differences and unused
+tax losses can be utilized. Each of the corporate entities is
+assessed individually with regard to the probability of a
+positive tax result in future years. Any existing history of losses
+is incorporated in this assessment. For those tax assets to
+which these assumptions do not apply, the value of the deferred
+tax assets is reduced.
+Income Taxes
+120 Notes
+119
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan
+has been decided on by management and publicly announced
+or communicated to the employees or their representatives.
+Only those expenses that are directly attributable to the restruc-
+turing measures are used in measuring the amount of the
+provision. Expenses associated with the future operation are
+not taken into consideration.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of
+resources embodying economic benefits is not probable or
+where the amount of the obligation cannot be measured
+with sufficient reliability. Contingent liabilities are generally
+not recognized on the balance sheet.
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+are recognized at the lower of the excess obligation upon
+performance under the contract and any potential penalties
+or compensation arising in the event of non-performance.
+Obligations under an open contractual relationship are deter-
+mined from a customer perspective.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated
+probabilities can not be determined reliably.
+Under Swedish law, E.ON Sverige AB ("E.ON Sverige") is required
+to pay fees to the Swedish Nuclear Waste Fund. The Swedish
+Radiation Safety Authority proposes the fees payable by each
+nuclear power company for the disposal of high-level radio-
+active waste and nuclear power plant decommissioning, based
+on the amount of electricity generated or on time in operation.
+The proposed fees are then submitted to government offices
+for approval. Upon approval, the nuclear power company
+makes the corresponding payments. In accordance with IFRIC 5,
+"Rights to Interests Arising from Decommissioning, Restoration
+and Environmental Rehabilitation Funds," ("IFRIC 5") payments
+into the Swedish national fund for nuclear waste management
+are offset by a right of reimbursement of asset retirement
+obligations, which is recognized as an asset under "Other
+assets." In accordance with customary procedure in Sweden,
+the provisions are discounted at the real interest rate.
+The estimates for nuclear decommissioning provisions are
+based on studies, cost estimates and legally binding civil agree-
+ments. A material element in the estimates are the real inter-
+est rates applied (the applied discount rate, less the general
+rate of inflation, less the nuclear-specific cost increase rate).
+A change of 0.1 percent in the applied real interest rate leads
+to a change in the provision of approximately €0.4 billion. The
+impact on EBITDA depends on the level of the corresponding
+adjustment posted to property, plant and equipment.
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or
+the scope of the relevant obligation, and also as a result of the
+regular adjustment of the discount rate to current market
+interest rates. The adjustment of provisions for the decommis-
+sioning and restoration of property, plant and equipment
+for changes to estimates is generally recognized by way of
+a corresponding adjustment to these assets, with no effect on
+income. If the property, plant and equipment to be decom-
+missioned have already been fully depreciated, changes to
+estimates are recognized within the income statement.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In late March 2015, E.ON signed an agreement with the Swedish
+private equity group EQT on the sale of the remaining 49-per-
+cent stake in Esperanto Infrastructure. The carrying amount
+of this Energy from Waste activity held in the Germany regional
+unit was €0.2 billion. The agreed transaction closed in late
+April 2015. It produced a gain of approximately €0.1 billion on
+disposal.
+Deferred taxes for the E.ON Group's major German companies
+are calculated using an aggregate tax rate of 30 percent (2014:
+30 percent). This tax rate includes, in addition to the 15 percent
+(2014: 15 percent) corporate income tax, the solidarity sur-
+charge of 5.5 percent on the corporate tax (2014: 5.5 percent
+on the corporate tax) and the average trade tax rate of 14 per-
+cent (2014: 14 percent). For the remaining companies in Ger-
+many, a total tax rate of 31 percent has been applied. This
+rate includes an average trade tax rate of 15 percent. Foreign
+subsidiaries use applicable national tax rates.
+Note 10 shows the major temporary differences so recorded.
+Consolidated Statements of Cash Flows
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7")
+the Consolidated Statements of Cash Flows are classified
+by operating, investing and financing activities. Cash flows
+from discontinued operations are reported separately in
+the Consolidated Statement of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions
+and disposals of companies are reported net of any cash and
+cash equivalents acquired (disposed of) under investing activ-
+ities if the respective acquisition or disposal results in a gain
+122 Notes
+121
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets,
+the accounting treatment of provisions for pensions and mis-
+cellaneous provisions, for impairment testing in accordance
+with IAS 36, as well as for the determination of the fair value
+of certain financial instruments.
+The estimates and underlying assumptions are reviewed on
+an ongoing basis. Adjustments to accounting estimates are
+recognized in the period in which the estimate is revised if the
+change affects only that period, or in the period of the revision
+and subsequent periods if both current and future periods
+are affected.
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions
+that may influence the application of accounting principles
+within the Group and affect the measurement and presenta-
+tion of reported figures. Estimates are based on past experience
+and on additional knowledge obtained on transactions to
+be reported. Actual amounts may differ from these estimates.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting
+Policies
+Based on our EBITDA in 2015 of €7,557 million (2014: €8,376 mil-
+lion) and economic net debt of €27,714 million as of the bal-
+ance sheet date (2014: €33,394 million), the debt factor is 3.7
+(2014: 4.0).
+E.ON uses the debt factor as the measure for the manage-
+ment of its capital structure. The debt factor is defined as the
+ratio of economic net debt to our EBITDA. Economic net debt
+supplements net financial position with provisions for pen-
+sions and asset retirement obligations.
+Standards and Interpretations Applicable in 2015
+Capital Structure Management
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well
+as liabilities that are due to be settled within one year of the
+reporting date are generally classified as current.
+Structure of the Consolidated Balance Sheets and
+Statements of Income
+In accordance with the so-called management approach
+required by IFRS 8, "Operating Segments," ("IFRS 8") the inter-
+nal reporting organization used by management for making
+decisions on operating matters is used to identify the Com-
+pany's reportable segments. The internal performance mea-
+sure used as the segment result is earnings before interest,
+taxes, depreciation and amortization ("EBITDA") adjusted to
+exclude certain extraordinary effects (see Note 33).
+Segment Information
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The Consolidated Statements of Income are classified using
+the nature of expense method, which is also applied for
+internal purposes.
+Amendments to IAS 27-
+or loss of control. In the case of acquisitions and disposals that
+do not, respectively, result in a gain or loss of control, the cor-
+responding cash flows are reported under financing activities.
+The impact on cash and cash equivalents of valuation changes
+due to exchange rate fluctuations is disclosed separately.
+(3) Scope of Consolidation
+324
+2014
+2015
+Other income/expenses, net
+€ in millions
+Sales
+Selected Financial Information-
+E.ON Spain (Summary)¹
+The following table shows selected financial information from
+the Spain regional unit now being reported as discontinued
+operations:
+The agreed transaction volume for the equity and for the
+assumption of liabilities and working capital positions was
+€2.4 billion. The respective classification as discontinued
+operations and disposal groups required that the Spanish and
+Portuguese businesses be measured at the agreed purchase
+price. This remeasurement produced a goodwill impairment
+of approximately €0.3 billion in 2014.
+The activities sold include all of E.ON's Spanish and Portuguese
+businesses, including 650,000 electricity and gas customers
+and electricity distribution networks extending over a total
+distance of 32,000 kilometers. In addition, the activities include
+a total generation capacity of 4 GW from coal, gas, and renew-
+able sources in Spain and Portugal. While the Spain regional
+unit was reported as a discontinued operation, the Spanish
+generation businesses held in the Generation and Renewables
+segments have been classified as disposal groups as of
+November 30, 2014.
+In late November 2014, E.ON entered into contracts with a
+subsidiary of Macquarie European Infrastructure Fund IV LP
+(the "Macquarie Fund"), London, United Kingdom, on the sale
+of its Spanish and Portuguese activities.
+E.ON in Spain
+Following the construction and entry into service of the Humber
+Gateway wind farm in the U.K. North Sea, E.ON is required by
+regulation to sell to an independent third party the associated
+grid connection infrastructure currently held by E.ON Climate
+& Renewables Humber Wind Ltd., Coventry, United Kingdom
+("Humber Wind"). Because the disposal process has been ini-
+tiated and the transaction is expected to close in the 2016
+fiscal year, this grid connection infrastructure has been reported
+as assets held for sale. The carrying amount as of December 31,
+2015, was approximately €0.2 billion.
+Grid Connection Infrastructure for the Humber
+Gateway Wind Farm
+On December 22, 2015, E.ON entered into an agreement to
+sell 28.974 percent of the shares of its associated shareholding
+AS Latvijas Gāze, Riga, Latvia, to the Luxembourg company
+Marguerite Gas I S.à r.l. The carrying amount of the equity inter-
+est, which is reported within the Global Commodities global
+unit, amounted to approximately €0.1 billion as of December 31,
+2015. The transaction, which closed in January 2016 at a sale
+price of approximately €0.1 billion, resulted in a minimal gain
+on disposal.
+AS Latvijas Gāze
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+1,085
+-284
+-1,292
+Income/Loss from continuing operations
+before income taxes
+E.ON also decided in early August 2015 that it would retain and
+further develop the electricity and gas distribution business
+held by the Italy regional unit. Accordingly, because the planned
+sale was abandoned in the third quarter of 2015, the assets
+and liabilities and the results reported separately for the dis-
+continued operations had to be reported once again in the
+individual line items of the balance sheet and the income state-
+ment, and the corresponding adjustments had to be made to
+the cash flow statement. This reverse reclassification resulted
+in no material impact on consolidated net income.
+Equity Method in Separate Financial Statements
+In August 2014, the IASB published amendments to IAS 27,
+"Separate Financial Statements." The amendments permit
+the use of the equity method as an accounting option for
+investments in subsidiaries, joint ventures and associates in
+the separate financial statements of an investor. The amend-
+ments shall be applied retrospectively in accordance with
+IAS 8, "Accounting Policies, Changes in Accounting Estimates
+and Errors," for fiscal years beginning on or after January 1,
+2016. Earlier application is permitted. The EU has adopted these
+amendments into European law without specifying an alter-
+native mandatory effective date. The amendments have no
+impact on E.ON's Consolidated Financial Statements.
+E.ON additionally signed an agreement in August 2015 to sell its
+Italian hydroelectric activities to ERG Power Generation S.p.A.
+("ERG"), Genoa, Italy, at a purchase price of roughly €1.0 billion.
+This agreement, which resulted in a minimal gain on disposal,
+was finalized in December 2015. The major asset and liability
+items of the activities, which were held as a disposal group
+in the Renewables global unit, were property, plant and equip-
+ment (€0.5 billion), intangible assets (€0.5 billion) and current
+assets (€0.1 billion), as well as liabilities (€0.2 billion).
+The disposal of the Italian coal and gas generation assets,
+which were reported as a disposal group, was finalized in
+July 2015. The result was a minimal deconsolidation gain. The
+disposed asset and liability items related to property, plant
+and equipment (€0.3 billion) and current assets (€0.2 billion)
+and to liabilities (€0.5 billion).
+A contract with F2i SGR S.p.A., Milan, Italy, for the sale of the
+solar activities held in the Renewables segment was signed
+and finalized in February 2015. Its major balance sheet items
+related to property, plant and equipment (€0.1 billion). There
+were no significant items on the liabilities side. The transaction
+closed with a minimal gain on disposal.
+As the disposal process took greater shape, it also became
+necessary to reexamine the measurement of the Italian busi-
+nesses on the basis of the expected proceeds on disposal. This
+remeasurement resulted in an impairment of approximately
+€1.3 billion as of December 31, 2014, of which roughly €0.1 bil-
+lion was charged to goodwill and roughly €1.2 billion to other
+non-current assets.
+The non-controlling interest in Gestione Energetica Impianti
+S.p.A. ("GEI"), Crema, Italy, was already sold in December 2014.
+Also agreed in December 2014 was the disposal of the Italian
+coal and gas generation assets to the Czech energy company
+Energetický a Průmyslový Holding ("EPH"), Prague, Czech
+Republic.
+As of December 31, 2014, against the backdrop of specifying its
+divestment intentions, E.ON reported the Italy regional unit
+under discontinued operations, and the Italian businesses
+held in its Generation and Renewables segments-except for
+the wind-power activities-as disposal groups.
+E.ON in Italy
+CEO Letter
+128 Notes
+The transaction closed on March 25, 2015, with a minimal loss
+on disposal. The disposed asset and liability items of the
+regional unit now being reported as discontinued operations
+were property, plant and equipment (€1.0 billion) and current
+assets (€0.5 billion), as well as provisions (€0.2 billion) and
+liabilities (€0.7 billion). The major asset items of the genera-
+tion activities held as a disposal group were property, plant
+and equipment (€1.1 billion), intangible assets and goodwill
+(€0.4 billion), financial assets (€0.1 billion) and current assets
+(€0.4 billion). The liability items consisted primarily of provi-
+sions (€0.2 billion) and liabilities (€0.4 billion).
+7
+40
+¹This does not include the deconsolidation gain/loss.
+40
+Income/Loss from discontinued opera-
+tions, net
+Income taxes
+-207
+40
+127
+The transaction is conditional upon the approval by the
+Municipal Council of the City of Luxembourg, the Supervisory
+Board of RWE and the respective antitrust authorities, and is
+expected to close in the first quarter of 2016. The parties agreed
+to not disclose the purchase price.
+-200
+Enovos International S.A.
+30
+22
+8
+5
+4
+1
+342
+228
+114
+107
+Consolidated companies
+as of December 31, 2015
+Disposals/Mergers
+Consolidated companies
+as of December 31, 2014¹
+Additions
+Consolidated companies
+as of January 1, 2014
+Total
+Foreign
+Domestic
+In December 2015, E.ON signed an agreement to sell its
+10-percent shareholding in Enovos International S.A., Esch-sur-
+Alzette, Luxembourg-joining with RWE AG, Essen, Germany,
+("RWE") which is also selling its own 18.4-percent stake-to a
+bidder consortium led by the Grand Duchy of Luxembourg
+and the independent private investment company Ardian, Paris,
+France. The carrying amount of the 10-percent shareholding,
+which is held in the Global Commodities global unit, amounted
+to approximately €0.1 billion as of December 31, 2015.
+Scope of Consolidation
+The number of consolidated companies changed as follows:
+Disposals/Mergers
+210
+Additions
+11
+In January 2016, E.ON signed an agreement to sell its British
+E&P subsidiary E.ON E&P UK Limited, London, United Kingdom,
+to Premier Oil plc, London, United Kingdom. The base sale price
+as of the January 1, 2015, effective date was approximately
+€0.1 billion, or $0.12 billion. In addition, E.ON retains liquid funds
+that existed in the company as of the effective date, and also
+receives other adjustments that will result in the transaction
+producing an expected net cash inflow of approximately
+€0.3 billion. As the purchase price for the British E&P business
+became more certain in the fourth quarter of 2015, a charge
+was recognized on its goodwill in the amount of approximately
+€0.1 billion. Held as a disposal group in the Exploration & Pro-
+duction global unit, the major asset and liability items of the
+British E&P business as of December 31, 2015, were goodwill
+(€0.1 billion) and other assets (€0.8 billion), as well as liabilities
+(€0.6 billion). The transaction is expected to close in the sec-
+ond quarter of 2016.
+317
+As the disposal process for the North Sea E&P business took
+greater shape, it already became necessary to perform impair-
+ment tests on assets in the third quarter of 2015. These tests
+resulted in impairments totaling approximately €1 billion, which
+were partially offset by amortizing deferred tax liabilities to
+income in the amount of roughly €0.6 billion. In addition, the
+goodwill of approximately €0.8 billion attributable to these
+activities was written down by roughly €0.6 billion as of Sep-
+tember 30, 2015 (see also Note 14).
+E.ON had already signed an agreement to sell all of its shares
+in E.ON Exploration & Production Norge AS ("E.ON E&P Norge"),
+Stavanger, Norway, to DEA Deutsche Erdoel AG ("DEA"), Ham-
+burg, Germany, in October 2015. The transaction value was
+$1.6 billion, including $0.1 billion in cash and cash equivalents
+on the balance sheet as of the January 1, 2015, effective date.
+The transaction resulted in a minimal gain on disposal when
+it closed in December 2015. The major asset and liability items
+of these activities, which were held in the Exploration & Pro-
+duction global unit, were goodwill (€0.1 billion), other non-
+current assets (€0.9 billion) and current assets (€0.2 billion),
+as well as liabilities (€1.0 billion).
+Exploration and Production Business in the North Sea
+In November 2014, E.ON had announced the strategic review
+of its exploration and production business in the North Sea.
+Because of a firming commitment to divest itself of these
+activities, E.ON had reported this business as disposal groups
+as of September 30, 2015.
+Discontinued Operations and Assets Held for Sale
+in 2015
+126 Notes
+125
+In 2015, a total of 19 domestic and 23 foreign associated com-
+panies were accounted for under the equity method (2014:
+19 domestic and 35 foreign). One domestic company, reported
+as a joint operation, was presented pro rata (2014: 1 domestic
+and 1 foreign company). Significant acquisitions, disposals and
+discontinued operations are discussed in Note 4.
+(4) Acquisitions, Disposals and Discontinued
+Operations
+¹This also includes the Spanish entities reported as discontinued operations.
+190
+107
+42
+11
+22
+31
+297
+11
+18,109
+15,969
+-3,574
+-1,688
+16,421
+15,213
+15,969
+-10,249
+-9,558
+15,213
+-9,558
+13,654
+17,228
+1,887
+651
+319
+786
+13
+18
+2,488
+1,180
+5,698
+1,248
+6,536
+2,255
+-10,249
+7,810
+2,077
+913
+4,096
+Before
+income
+6,172
+taxes
+6,262
+taxes
+taxes
+taxes
+Available-for-sale securities
+Cash flow hedges
+€ in millions
+income
+Income
+After
+After
+income
+Income
+Before
+income
+2014
+2015
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Income Taxes on Components of Other Comprehensive Income
+Income taxes recognized in other comprehensive income for
+the years 2015 and 2014 break down as follows:
+1,841
+1,776
+2,003
+2,155
+5,720
+5,655
+5,708
+Deferred Tax Assets and Liabilities
+6,910
+Loss carryforwards
+Liabilities
+Provisions
+Receivables
+Inventories
+Financial assets
+Property, plant and equipment
+Intangible assets
+€ in millions
+Deferred tax assets and liabilities as of December 31, 2015, and
+December 31, 2014, break down as shown in the following table:
+134 Notes
+133
+-23.8
+570
+-15.1
+835
+-2.0
+49
+-1.4
+72
+Effective income taxes / tax rate
+Other
+27.1
+-649
+-0.2
+12
+Tax effects of income taxes related to other periods
+-4.5
+taxes
+Tax credits
+707
+Other
+Changes in value
+766
+105
+25
+23
+47
+521
+159
+360
+162
+4,280
+264
+3,378
+325
+1,007
+294
+898
+439
+liabilities
+Tax assets
+Tax
+Tax
+liabilities
+Tax assets
+December 31, 2014
+December 31, 2015
+Of the deferred taxes reported, a total of -€685 million was
+charged directly to equity in 2015 (2014: -€1,789 million charge).
+A further €49 million in current taxes (2014: €45 million) was
+also recognized directly in equity.
+Current
+Deferred taxes (net)
+Netting
+Deferred taxes (gross)
+Subtotal
+taxes
+Report of the Supervisory Board
+-287
+E.ON Share Performance Plan
+The following discussion includes reports on the E.ON Share
+Performance Plan, which was introduced in 2006 and modified
+in 2010 and 2011 for subsequent tranches, on the E.ON Share
+Matching Plan introduced in 2013 and on the multi-year bonus
+introduced in 2015.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+107
+CEO Letter
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation.
+The purpose of such compensation is to reward their contri-
+bution to E.ON's growth and to further the long-term success
+of the Company. This variable compensation component,
+comprising a long-term incentive effect along with a certain
+element of risk, provides for a sensible linking of the interests
+of shareholders and management.
+Long-Term Variable Compensation
+Since the 2003 fiscal year, employees in the United Kingdom
+have the opportunity to purchase E.ON shares through an
+employee stock purchase program and to acquire additional
+bonus shares. The expense of issuing these matching shares
+amounted to €2.1 million in 2015 (2014: €1.9 million) and is also
+recorded under personnel costs as part of "Wages and salaries."
+Information on the changes in the number of treasury shares
+held by E.ON SE can be found in Note 19.
+As part of the voluntary employee stock purchase program,
+1,419,934 shares, or 0.07 percent of the capital stock of E.ON SE,
+were purchased in the open market and distributed to
+employees in Germany in 2015 (2014: distribution of 919,064
+treasury shares, or 0.05 percent of the capital stock of E.ON SE).
+in 2017 with rules similar to those that had applied until 2014.
+Depending on the stock package purchased, the employee
+contribution in 2015 ranged from a minimum of €510 to a maxi-
+mum of €1,560. The relevant market price of E.ON stock on
+the cut-off date was €8.90. Depending on the number of shares
+purchased, the preferential prices paid ranged between €4.51
+and €5.78 (2014: between €7.09 and €10.66). The lock-up period
+for the shares ends on December 31, 2017. The expense of
+€5.5 million (2014: €4.6 million) arising from granting the pref-
+erential prices is recognized as personnel costs and included
+in the "Wages and salaries" line item.
+In 2015, as in 2014, employees at German E.ON Group companies
+had the opportunity to purchase E.ON shares at preferential
+terms under a voluntary employee stock purchase program.
+Employees currently receive a regular matching contribution
+from the Company of €390 on purchases of shares, which are
+being offered in five graduated packages, by the November 19,
+2015, cut-off date. Because of the planned Uniper spin-off, the
+employee stock purchase program will be suspended in 2016.
+Employees were instead granted an additional matching
+contribution for purchasing shares in 2015. Once the spin-off
+is completed and Uniper AG is listed on the stock exchange,
+E.ON plans to resume its employee stock purchase program
+Employee Stock Purchase Program
+The expenses for share-based payment in 2015 (employee stock
+purchase programs in Germany and the United Kingdom, the
+E.ON Share Performance Plan, the E.ON Share Matching Plan
+and the multi-year bonus) amounted to €31.1 million (2014:
+€50.8 million).
+Share-Based Payment
+Personnel costs rose by €30 million to €4,177 million (2014:
+€4,147 million). The increase was due primarily to higher
+expenses for occupational retirement benefits, which were
+offset only in part by lower expenses from restructuring
+programs and associated cost savings.
+4,147
+4,177
+Total
+397
+493
+Pension costs
+404
+499
+benefits
+Pension costs and other employee
+512
+From 2006 through 2012, E.ON granted virtual shares ("Per-
+formance Rights") under the E.ON Share Performance Plan.
+511
+Beginning in 2011, grants of Performance Rights required
+possession of a specified number of E.ON SE shares, which had
+to be held through the end of the term or until the rights were
+fully exercised. At the end of its term, each Performance Right
+is entitled to a cash payout linked to the final E.ON share price
+established at that time and-under the modified terms of
+the plan, beginning with the sixth tranche―to the degree to
+which specific corporate financial measures are achieved over
+the term. The benchmark is the return on capital, expressed as
+the return on average capital employed ("ROACE") compared
+with the weighted-average cost of capital ("WACC"), averaged
+over the unchanged four-year term of the new tranche. At the
+same time, starting with the sixth tranche, the maximum payout
+was further limited to 2.5 times the target value originally set.
+The following are the base parameters of the final tranche
+active in 2015 under these plan terms:
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual
+shares. In addition, the change in ROACE is simulated for per-
+formance matching. The provision for the first, second and
+third tranches of the E.ON Share Matching Plan as of the
+balance sheet date is €52.7 million (2014: €40.6 million). The
+expense for the first, second and third tranches amounted
+to €15.8 million in the 2015 fiscal year (2014: €31.9 million).
+4 years
+€13.31
+1st
+tranche
+Apr. 1, 2013
+2nd
+tranche
+Apr. 1, 2014
+4 years
+€13.65
+3rd
+tranche
+Apr. 1, 2015
+4 years
+€13.63
+Target value at issuance
+Date of issuance
+Term
+E.ON Share Matching Virtual Shares
+The following are the base parameters of the tranches active
+in 2015 under these plan terms:
+The plan contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+At the end of the term, the sum of the dividends paid to an
+ordinary shareholder during the term is added to each virtual
+share. The maximum amount to be paid out to a plan partici-
+pant is limited to twice the sum of the equity deferral, base
+matching and the target value under performance matching.
+A payout generally will not take place until after the end of
+the four-year term. This is true even if the beneficiary retires
+beforehand, or if the beneficiary's contract is terminated on
+operational grounds or expires during the term. A payout before
+the end of the term will take place in the event of a change
+of control or on the death of the beneficiary. If the service or
+employment relationship ends before the end of the term for
+reasons within the control of the beneficiary, all virtual shares-
+except for those that resulted from the equity deferral-expire.
+The amount paid out under performance matching is equal
+to the target value at issuance if the E.ON share price is main-
+tained at the end of the term and if the average ROACE per-
+formance matches a target value specified by the Manage-
+ment Board and the Supervisory Board. If the average ROACE
+during the four-year term exceeded the target value, the
+number of virtual shares granted under performance matching
+increases up to a maximum of twice the target value. If the
+average ROACE falls short of the target value, the number of
+virtual shares, and thus also the amount paid out, decreases.
+In the event of a defined underperformance, there is no pay-
+out under performance matching.
+138 Notes
+137
+In 2015, virtual shares from the third tranche were granted in
+the context of base matching and performance matching
+exclusively to members of the Management Board of E.ON SE.
+Executives were instead granted a multi-year bonus, the terms
+of which are described further below.
+The equity deferral is determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral is converted into virtual
+shares and vests immediately. In the United States, virtual
+shares were granted in the amount of the equity deferral for
+the first time in 2015. Beneficiaries are additionally granted
+virtual shares in the context of base matching and performance
+matching. For members of the Management Board of E.ON SE,
+the proportion of base matching to the equity deferral is
+determined at the discretion of the Supervisory Board; for all
+other beneficiaries it is 2:1. The performance-matching target
+value at allocation is equal to that for base matching in terms
+of amount. Performance matching will result in a payout only
+on achievement of a minimum performance, based on ROACE,
+as specified at the beginning of the term by the Management
+Board and the Supervisory Board.
+Since 2013, E.ON has been granting virtual shares under the
+E.ON Share Matching Plan. At the end of its four-year term,
+each virtual share is entitled to a cash payout linked to the
+final E.ON share price established at that time. The calculation
+inputs for this long-term variable compensation package are
+equity deferral, base matching and performance matching.
+E.ON Share Matching Plan
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the rights. The
+provision for the plan as of the balance sheet date is €14.4 mil-
+lion (2014: €31.8 million). The expense for the seventh tranche
+in the 2015 fiscal year was €1.0 million (2014: €12.4 million).
+€42.75
+4 years
+€17.10
+7th tranche
+Jan. 1, 2012
+Maximum amount paid
+Target value at issuance
+Term
+Date of issuance
+E.ON Share Performance Rights
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements. The plan
+contains adjustment mechanisms to eliminate the effects of
+interim corporate actions.
+151
+Social security contributions
+3,167
+-53
+-147
+3
+-150
+Companies accounted for under the equity method
+Total
+-2,357
+942
+-3,299
+643
+-680
+1,323
+Remeasurements of defined benefit plans
+-2,453
+77
+-2,530
+-286
+-144
+-142
+Currency translation adjustments
+-310
+-48
+-262
+-495
+3
+-498
+-507
+211
+-718
+-136
+3
+3,231
+-50
+-1,105
+Wages and salaries
+2014
+2015
+€ in millions
+Personnel Costs
+The following table provides details of personnel costs for
+the periods indicated:
+Personnel Costs
+(11) Personnel-Related Information
+136 Notes
+135
+As of December 31, 2015, and December 31, 2014, E.ON reported
+deferred tax assets for companies that incurred losses in the
+current or the prior-year period that exceed the deferred tax
+liabilities by €193 million and €3,050 million, respectively.
+The basis for recognizing deferred tax assets is an estimate
+by management of the extent to which it is probable that
+the respective companies will achieve taxable earnings in the
+future against which the as yet unused tax losses, tax credits
+and deductible temporary differences can be offset.
+The foreign tax loss carryforwards consist of corporate tax loss
+carryforwards amounting to €7,359 million (2014: €5,616 million)
+and local income taxes amounting to €2,447 million (2014:
+€3,083 million). Of the foreign tax loss carryforwards, a signif-
+icant portion relates to previous years. Deferred taxes were not
+recognized, or no longer recognized, on a total of €7,144 mil-
+lion (2014: €5,367 million) in tax loss carryforwards that, for
+the most part, do not expire. Deferred tax assets were no lon-
+ger recognized on non-expiring domestic corporate tax loss
+carryforwards of €2,132 million (2014: €3,424 million) or on
+domestic trade tax loss carryforwards of €4,004 million (2014:
+€3,888 million). Deferred tax assets also have not been rec-
+ognized on temporary differences totaling €802 million
+(2014: €418 million).
+Since January 1, 2004, domestic tax loss carryforwards can
+only be offset against a maximum of 60 percent of taxable
+income, subject to a full offset against the first €1 million.
+This minimum corporate taxation also applies to trade tax
+loss carryforwards. The domestic tax loss carryforwards result
+from adding corporate tax loss carryforwards amounting to
+€2,231 million (2014: €2,958 million) and trade tax loss carry-
+forwards amounting to €4,215 million (2014: €4,772 million).
+16,429
+16,252
+2014
+7,730
+8,699
+9,806
+Foreign tax loss carryforwards
+Total
+6,446
+Domestic tax loss carryforwards
+2015
+€ in millions
+December 31,
+Tax Loss Carryforwards
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+-5,677
+1,185
+-6,862
+-421
+684
+2.5
+(10) Income Taxes
+Tax effects of other taxes on income
+30
+86
+Loss on disposal of equity investments
+and securities
+351
+336
+Multi-Year Bonus
+Taxes other than income taxes
+5,305
+6,055
+Loss on derivative financial instruments
+2,937
+3,587
+Loss from exchange rate differences
+Miscellaneous
+2014
+€ in millions
+Other Operating Expenses
+Other operating expenses from exploration activity totaled
+€48 million (2014: €49 million).
+Miscellaneous other operating expenses included concession
+payments in the amount of €315 million (2014: €243 million),
+expenses for external consulting, audit and non-audit services
+in the amount of €263 million (2014: €222 million), advertis-
+ing and marketing expenses in the amount of €174 million
+(2014: €139 million), write-downs of trade receivables in the
+amount of €332 million (2014: €313 million), rents and leases
+in the amount of €227 million (2014: €250 million) and other
+services rendered by third parties in the amount of €609 million
+(2014: €484 million). Additionally reported in this item, among
+other things, are IT expenditures, insurance premiums, travel
+expenses and, in 2015, higher valuation allowances on loan
+receivables relative to the previous year.
+Losses from exchange rate differences consisted primarily of
+realized losses from currency derivatives in the amount of
+€1,928 million (2014: €1,621 million) and from receivables and
+payables denominated in foreign currency in the amount of
+€867 million (2014: €575 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €792 million (2014: €741 million).
+The following table provides details of other operating
+expenses for the periods indicated:
+Miscellaneous other operating income in 2015 included the
+proceeds of passing on charges for the provision of personnel
+and services, as well as reimbursements, reversals of valuation
+allowances on loans and receivables, and additional income
+relative to the previous year from minority shareholders aris-
+ing from charges passed on in the context of cost-plus-fee
+agreements.
+Gains were realized on the sale of securities in the amount
+of €266 million (2014: €203 million).
+E&P Norge shares, and of purchase price adjustments of
+€35 million on the Finnish electricity activities (Fennovoima)
+sold in 2013. In 2014, there were gains of €144 million on the
+divestiture of Erdgasversorgung Thüringen, €128 million on
+the disposal of Rødsand 2, €90 million on the sale of the City
+of Prague Municipal Utility and €69 million on the sale of the
+stake in Gasum Oy.
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+2015
+Total
+4,073
+14,137
+3,289
+11,912
+Income/Loss from equity investments
+-84
+financial assets
+Impairment charges/reversals on other
+107
+74
+Income/Loss from companies in which
+equity investments are held
+2014
+2015
+€ in millions
+Financial Results
+The following table provides details of financial results for
+the periods indicated:
+(9) Financial Results
+132 Notes
+131
+99,916
+104,211
+Total
+2,920
+96,996
+101,457
+2,754
+Expenses for purchased services
+Expenses for raw materials and supplies
+and for purchased goods
+2014
+2015
+€ in millions
+Cost of Materials
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity and of fuels for electricity generation. Network usage
+charges are also included in this line item. Expenses for pur-
+chased services consist primarily of maintenance costs. The
+cost of materials increased by €4 billion to €104 billion (2014:
+€100 billion). The primary cause was an increased expense for
+gas purchases.
+(8) Cost of Materials
+Report of the Supervisory Board
+CEO Letter
+The gain on the disposal of equity investments and securities
+consisted primarily of gains of €78 million on the disposal of
+Esperanto Infrastructure and €42 million on the sale of the
+Write-ups of non-current assets amounted to €404 million
+(2014: €54 million) and consisted primarily of reversals of
+impairments from previous years in the amount of €43 million
+(2014: €0 million) in Italy and €283 million (2014: €0 million)
+in the United Kingdom.
+The classification of revenues by segment is presented in
+Note 33.
+At €116 billion, revenues in 2015 were roughly 3 percent higher
+than in the previous year. The increase is primarily the result
+of higher gas sales volumes at the Global Commodities unit.
+Revenues from the sale of electricity and gas to industrial and
+commercial customers, to retail customers and to wholesale
+markets are recognized when earned on the basis of a contrac-
+tual arrangement with the customer or purchaser; they reflect
+the value of the volume supplied, including an estimated value
+of the volume supplied to customers between the date of their
+last meter reading and period-end.
+Revenues are generated primarily from the sale of electricity and
+gas to industrial and commercial customers, to retail custom-
+ers and to wholesale markets. Additional revenue is earned
+from the distribution of gas and electricity and from deliveries
+of steam, heat and water.
+Revenues are generally recognized upon delivery of goods to
+purchasers or customers, or upon completion of services ren-
+dered. Delivery is considered to have occurred when the risks
+and rewards associated with ownership have been transferred
+to the buyer, compensation has been contractually established
+and collection of the resulting receivable is probable.
+(5) Revenues
+130 Notes
+129
+In November 2013, E.ON agreed to sell an 80-percent stake in
+its 207 MW Rødsand 2 offshore wind farm to the Danish utility
+SEAS-NVE. The transaction values 100 percent of the wind
+farm at DKK 3.5 billion (€0.5 billion). At closing, the wind farm
+company assumed a loan of DKK 2.1 billion (€0.3 billion).
+SEAS-NVE will purchase 80 percent of the equity for DKK 1.1 bil-
+lion (€0.2 billion). In total, E.ON will receive DKK 3.2 billion
+(€0.4 billion) from this transaction. The entity was reported in
+the Renewables global unit as of December 31, 2013, and its
+balance sheet consisted primarily of property, plant and equip-
+ment (€0.4 billion), other assets (€0.3 billion) and liabilities
+(€0.4 billion). The transaction closed on January 10, 2014, with
+a gain on disposal of approximately €0.1 billion.
+Rødsand Offshore Wind Farm
+In December 2013, E.ON signed contracts with the City of
+Prague on the disposal of a majority stake in Pražská plyná-
+renská. The purchase price is €0.2 billion. Held in the Czechia
+regional unit, the major items on this entity's balance sheet
+as of December 31, 2013, were property, plant and equipment
+(€0.2 billion), inventories and other assets (€0.2 billion) and
+liabilities (€0.2 billion). The transaction closed in March 2014
+with a gain of approximately €0.1 billion on disposal.
+City of Prague Municipal Utility
+In the first quarter of 2014, E.ON signed contracts with Norway's
+Solør Bioenergi on the sale of various micro thermal power
+plants at a purchase price of €0.1 billion. The plants had a total
+carrying amount of approximately €0.1 billion and were
+reported in the Sweden regional unit. The transaction closed
+in the second quarter of 2014 with a minimal gain on disposal.
+Swedish Thermal Power Plants
+In May 2014, E.ON signed contracts for and finalized the sale
+of the activities in Lithuania. The shareholdings had a total
+carrying amount of approximately €0.1 billion and were reported
+in the Global Commodities global unit. The transaction resulted
+in a minimal gain on disposal.
+E.ON in Lithuania
+The equity investment was held in the Germany regional unit
+with a carrying amount of approximately €0.1 billion. The
+transaction, which also closed in the fourth quarter of 2014,
+resulted in a gain on disposal of approximately €0.1 billion.
+In late October 2014, E.ON signed a contract with First State
+European Diversified Infrastructure Fund ("EDIF"), an invest-
+ment fund managed by First State Investments, Luxembourg,
+for the sale of its 50-percent stake in Erdgasversorgungs-
+gesellschaft Thüringen-Sachsen mbH ("EVG"), Erfurt, Germany.
+Thüringen-Sachsen mbH
+Erdgasversorgungsgesellschaft
+The transaction, which closed at the end of December 2014,
+produced a €0.1 billion gain on disposal. E.ON continues to
+hold a 20-percent interest and remains the operator of the
+wind farms.
+As part of its "build and sell" strategy, E.ON agreed to sell an
+80-percent interest in a portfolio of two wind farms in the
+United Sates, Magic Valley 1 and Wildcat 1, to Enbridge Inc.,
+Toronto, Canada, in November 2014. The net purchase price
+after deduction of liabilities was approximately €0.3 billion.
+The carrying amount of the property, plant and equipment
+was approximately €0.5 billion as of December 31, 2014.
+Magic Valley 1 and Wildcat 1 Wind Farms
+Disposal Groups and Assets Held for Sale in 2014
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+(6) Own Work Capitalized
+-10
+Own work capitalized amounted to €478 million in 2015
+(2014: €345 million) and resulted primarily from capitalized
+work performed in connection with IT projects, engineering
+services in networks and new construction projects.
+The table below provides details of other operating income
+for the periods indicated:
+Gains and losses on derivative financial instruments relate
+to gains from fair value measurement from derivatives under
+IAS 39. In this respect there was a significant impact from
+commodity derivatives in particular, which in 2015 resulted pre-
+dominantly from the marking to market of gas, coal, electricity
+and other derivatives. In 2014, there were effects resulting
+especially from electricity, emissions and gas derivatives.
+Income from exchange rate differences consisted primarily
+of realized gains from currency derivatives in the amount of
+€1,943 million (2014: €1,747 million) and from receivables
+and payables denominated in foreign currency in the amount
+of €738 million (2014: €359 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €619 million (2014: €331 million).
+In general, E.ON employs derivatives to hedge commodity
+risks as well as currency and interest risks.
+10,980
+13,211
+1,296
+2,032
+111
+107
+Total
+Miscellaneous
+plant and equipment
+Gain on disposal of property,
+872
+54
+404
+Write-ups of non-current assets
+528
+and securities
+Gain on disposal of equity investments
+6,210
+6,840
+Gain on derivative financial instruments
+2,437
+3,300
+Income from exchange rate differences
+2014
+2015
+€ in millions
+Other Operating Income
+(7) Other Operating Income and Expenses
+-91
+16
+Income/Loss from securities, interest
+and similar income¹
+-1,663
+100.0
+-2,398
+100.0
+-5,543
+Expected income taxes
+Income/Loss from continuing operations before taxes
+%
+€ in millions
+%
+€ in millions
+2014
+2015
+Reconciliation to Effective Income Taxes / Tax Rate
+The base income tax rate of 30 percent applicable in Germany,
+which is unchanged from the previous year, is composed of
+corporate income tax (15 percent), trade tax (14 percent) and
+the solidarity surcharge (1 percent). The differences from the
+effective tax rate are reconciled as follows:
+The prior-year figures have been similarly adjusted to include
+discontinued operations (see also Note 4).
+Income taxes relating to discontinued operations (see also
+Note 4) are reported in the income statement under "Income
+from discontinued operations, net." In the prior year they
+amounted to tax income of €7 million.
+Changes in tax rates resulted in tax income of €53 million in
+total (2014: tax expense of €5 million).
+Deferred tax liabilities were not recognized for subsidiaries
+and associated companies to the extent that the Company can
+control the reversal effect and that it is therefore probable
+that temporary differences will not be reversed in the fore-
+seeable future. Accordingly, deferred tax liabilities were not
+recognized for temporary differences of €466 million (2014:
+€261 million) at subsidiaries and associated companies, as
+E.ON is able to control the timing of their reversal and the
+temporary difference will not reverse in the foreseeable future.
+As of December 31, 2015, €5 million (2014: €27 million) in
+deferred tax liabilities were recognized for the differences
+between net assets and the tax bases of subsidiaries and
+associated companies (the so-called "outside basis differences").
+Income tax liabilities consist primarily of income taxes for the
+respective current year and for prior-year periods that have
+not yet been definitively examined by the tax authorities.
+German legislation providing for fiscal measures to accompany
+the introduction of the European Company and amending
+other fiscal provisions ("SE-Steuergesetz" or "SESTEG"), which
+came into effect on December 13, 2006, altered the regula-
+tions on corporate tax credits arising from the corporate impu-
+tation system ("Anrechnungsverfahren"), which had existed
+until 2001. The change de-links the corporate tax credit from
+distributions of dividends. Instead, after December 31, 2006,
+an unconditional claim for payment of the credit in ten equal
+annual installments from 2008 through 2017 has been estab-
+lished. The resulting receivable is included in income tax assets
+and amounted to €53 million in 2015 (2014: €78 million).
+Deferred taxes reported for 2015 resulted from changes in tem-
+porary differences, which totaled €695 million (2014: €43 mil-
+lion), loss carryforwards of €498 million (2014: €519 million)
+and tax credits amounting to €21 million (2014: €54 million).
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+570
+30.0
+835
+-719
+Foreign tax rate differentials
+-79.7
+1,910
+-24.5
+1,357
+Tax effects of changes in value and non-recognition of deferred taxes
+-1.5
+37
+-28.5
+1,582
+Tax effects of goodwill impairment and elimination of negative goodwill
+-3.7
+88
+1.5
+-83
+Tax effects on income from companies accounted for under the equity method
+7.1
+-171
+3.5
+-193
+Tax effects on tax-free income
+-0.2
+5
+1.0
+-53
+Changes in tax rate / tax law
+3.6
+-87
+1.0
+-58
+30.0
+-138
+Total income taxes
+1,214
+-1,811
+-1,330
+Net interest income/loss
+-1,576
+-1,202
+Other interest expenses
+-46
+-47
+Held for trading
+-1,070
+-778
+Amortized cost
+-2,692
+-2,027
+Interest and similar expenses¹
+370
+116
+Other interest income
+41
+38
+Held for trading
+170
+122
+Loans and receivables
+300
+421
+Available for sale
+881
+697
+Financial results
+616
+-1,340
+Other interest income consists predominantly of income from
+lease receivables (finance leases) and income from institu-
+tional funds. Other interest expenses include the accretion of
+provisions for asset retirement obligations in the amount of
+€878 million (2014: €882 million). Also contained in this item
+is the net interest cost from provisions for pensions in the
+amount of €115 million (2014: €93 million). No bonds were
+repaid early in 2015. Accordingly, no prepayment penalties were
+paid in this respect (2014: €136 million).
+Deferred taxes
+-38
+-386
+Foreign
+654
+1,600
+-46
+-379
+Domestic
+Current taxes
+Of the amount reported as current taxes, -€963 million is
+attributable to previous years (2014: -€712 million).
+The tax expense in 2015 amounted to €0.8 billion, compared
+with €0.6 billion in 2014. In spite of the pre-tax loss there is
+still a tax expense, and hence a negative effective tax rate of
+15 percent (2014: 24 percent). Write-downs that provided no
+tax relief, as well as material effects from changes in the value
+of deferred tax assets, were the principal reasons for the
+change in the effective tax rate in 2015.
+Other income taxes
+303
+221
+Foreign income taxes
+-349
+-600
+Domestic income taxes
+2014
+2015
+€ in millions
+Income Taxes
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+The improvement in financial results relative to the previous
+year is primarily attributable to the diminished impact of
+discount rate changes on other non-current provisions. Also,
+financial results in the previous year had been affected by
+non-recurring effects (in connection with prepayment penal-
+ties and the reversal of provisions).
+¹The measurement categories are described in detail in Note 1.
+Realized gains and losses from interest rate swaps are shown
+net on the face of the income statement.
+Interest expense was reduced by capitalized interest on debt
+totaling €179 million (2014: €162 million).
+Other interest expenses further include the effects on financial
+results of carryforwards of counterparty obligations to acquire
+additional shares in already consolidated subsidiaries and
+of non-controlling interests in fully consolidated partnerships
+with legal structures that give their shareholders a statutory
+right of withdrawal combined with a compensation claim,
+which according to IAS 32 must be recognized as liabilities
+and amounted to -€9 million (2014: €22 million).
+-1,795
+In 2015, E.ON extended to those executives who in previous
+years had been granted virtual shares in the context of base
+matching and performance matching a multi-year bonus
+extending over a term of four years. Beneficiaries were informed
+individually of the target value of the multi-year bonus.
+€ in millions
+During 2015, E.ON employed an average of 56,923 persons
+(2014: 59,538), not including an average of 1,178 apprentices
+(2014: 1,321).
+-2,199
+181
+687
+-212
+7
+-102
+23
+-1,615
+3,042
+-652
+9
+118
+-74
+249
+29
+-571
+169
+-75
+-2
+1
+-25
+20
+-81
+74
+-3,541
+195
+952
+-350
+-1
+-342
+157
+-39
+Net carrying
+amounts
+Changes in
+Exchange
+scope of
+rate
+consolida-
+Jan. 1, 2014
+differences
+-3,396
+1
+tion
+3,011
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+0
+0
+-128
+0
+Dec. 31, 2014
+-512
+Dec. 31, 2014
+11,812
+-1
+-1
+-2
+0
+-614
+7
+147
+213
+145
+-103
+-2,611
+519
+-172
+53
+12
+-133
+-4,082
+2,592
+-50,832
+398
+7,948
+-2,944
+231
+-18
+159
+-3,621
+-48,815
+30,673
+-1,008
+9
+31
+-107
+49
+-6
+-5
+-1,037
+373
+-136
+-56,882
+29
+23
+-4,520
+2,279
+-411
+3,534
+-512
+-2
+66
+-62
+203
+-307
+1,147
+-11
+-2
+2
+-11
+-22
+201
+-4,064
+191
+954
+-350
+279
+-176
+226
+-2,940
+4,882
+-386
+1
+12
+-7
+4
+-35
+23
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+106,965
+-1,955
+-12,146
+4,660
+-801
+-20
+96,703
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2014
+Group
+Manage-
+Global
+Genera-
+€ in millions
+tion
+Property, plant and equipment
+Renew- Commodi-
+ables4
+Explora-
+tion &
+Production
+ment/
+Germany
+Other EU
+Countries
+Consolida-
+E.ON
+Russia5
+tion
+Group
+Net carrying amount of good-
+will as of January 1, 2014
+4,294
+1,846
+1,084
+ties
+6,441
+-2,995
+-47
+7,745
+-502
+-623
+96
+-87
+45
+6,674
+Technical equipment, plant and machinery
+87,231
+-960
+-11,168
+2,072
+-584
+2,897
+79,488
+Other equipment, fixtures, furniture and
+office equipment
+1,424
+-16
+-27
+71
+-65
+23
+1,410
+Advance payments and construction in progress
+7,598
+-388
+-139
+2,412
+1,835
+806
+1,434
+1,367
+1.5
+Cost of capital (in %)²
+6.5
+5.6-6.1
+5.8
+7.4
+3.5
+15.0
+Other non-current assets³
+Impairment
+-4,249
+-170
+-93
+-372
+-24
+Reversals
+26
+24
+205
+1
+-47
+1
+-23
+-4,978
+257
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale.
+2Presented here are growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+³Other non-current assets consist of intangible assets and of property, plant and equipment.
+"The Renewables segment consists of the two cash-generating units EC&R and Hydro. Their net carrying amounts of goodwill as of December 31, 2014, were €1,292 million and €406 million,
+respectively.
+5Growth rate and cost of capital before taxes, in local currency.
+Accumulated depreciation
+CEO Letter
+Report of the Supervisory Board
+1.5
+14
+0.0-2.0
+Growth rate (in %)²
+0
+12,666
+Changes resulting from acqui-
+sitions and disposals
+-10
+14
+Impairment charges
+Other changes¹
+-37
+-91
+64
+-57
+-27
+-200
+-510
+4
+-128
+-730
+Net carrying amount of good-
+will as of December 31, 2014
+4,321
+1,698
+1,084
+1,808
+796
+1,248
+857
+0
+11,812
+0.0
+Buildings
+1
+-1,008
+59,538
+Non-EU Countries
+Group Management/Other³
+Total
+¹Figures do not include board members, managing directors, or apprentices.
+2Not including the Spanish entities reported as discontinued operations.
+³Includes E.ON Business Services.
+139
+140 Notes
+(12) Other Information
+German Corporate Governance Code
+On December 15, 2015, the Management Board and the
+Supervisory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+Fees and Services of the Independent Auditor
+During 2015 and 2014, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") Aktiengesellschaft,
+Wirtschaftsprüfungsgesellschaft, (domestic) and by companies
+in the international PwC network were recorded as expenses:
+Independent Auditor Fees
+2222
+2015
+56,923
+2014
+21
+Domestic
+15
+13
+Other attestation services
+20
+21
+Domestic
+15
+18
+Tax advisory services
+1
+1
+Financial statement audits
+5,502
+5,768
+5,232
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+The amount paid out under the multi-year bonus initially
+depends on whether the beneficiary works in the Uniper Group
+or in the E.ON Group after the planned Uniper AG spin-off.
+For executives in the E.ON Group, the amount paid out is equal
+to the target value if the E.ON share price at the end of the
+term is equal to the E.ON share price after the spin-off. For
+executives in the Uniper Group, the amount paid out is equal
+to the target value if the Uniper share price at the end of the
+term is equal to the Uniper share price after the spin-off. If
+the share price at the end of the term is higher or lower than
+the share price after the spin-off, the amount paid out relative
+to the target value will increase or decrease in equal propor-
+tion to the change in the share price, but in no event shall the
+payout be higher than twice the target value.
+A payout generally will not take place until after the end of
+the four-year term. This is true even if the beneficiary retires
+beforehand, or if the beneficiary's contract is terminated on
+operational grounds or expires during the term. A payout
+before the end of the term will take place in the event of a
+change of control or on the death of the beneficiary. However,
+the planned Uniper AG spin-off is not treated as a change of
+control. If the service or employment relationship ends before
+the end of the term for reasons within the control of the bene-
+ficiary, there is no entitlement to a multi-year bonus payout.
+60-day average prices are used to determine both the share
+price after the spin-off and the final price in order to mitigate
+the effects of incidental, short-lived price movements. The
+plan contains adjustment mechanisms to eliminate the effect
+of events such as interim corporate actions.
+For accounting purposes, the target value is used as the
+basis for as long as the planned Uniper AG spin-off has not
+yet taken place.
+The provision for the multi-year bonus as of the balance sheet
+date is €6.0 million. The expense amounted to €6.7 million in
+the 2015 fiscal year.
+Employees
+Goodwill, Intangible Assets and Property, Plant and Equipment
+The breakdown by segment is shown in the table below:
+Employees¹
+Generation
+Renewables
+2015
+2014
+6,520
+8,262
+1,606
+1,699
+Global Commodities
+Exploration & Production
+1,248
+1,264
+243
+234
+Germany
+11,506
+12,000
+Other EU Countries²
+24,823
+25,345
+5,209
+Domestic
+Strategy and Objectives
+Other services
+The fees for financial statement audits concern the audit of
+the Consolidated Financial Statements and the legally man-
+dated financial statements of E.ON SE and its affiliates.
+(14) Goodwill, Intangible Assets and
+Property, Plant and Equipment
+The changes in goodwill and intangible assets, and in property,
+plant and equipment, are presented in the tables on the
+following pages:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+2015
+2014
+-6,378
+-2,968
+that of basic earnings per share because E.ON SE has issued
+no potentially dilutive ordinary shares.
+-620
+-6,998
+-2,993
+1
+-162
+-2
+-5
+-1
+-167
+-6,999
+-3,160
+-3.60
+-1.55
+0.00
+-25
+The computation of diluted earnings per share is identical to
+Weighted-average number of shares outstanding (in millions)
+from net income/loss
+Fees for other attestation services concern in particular the
+review of the interim IFRS financial statements. Further
+included in this item are project-related reviews performed
+in the context of the introduction of IT and internal control
+systems, due-diligence services rendered in connection with
+acquisitions and divestitures, and other mandatory and vol-
+untary audits.
+Fees for tax advisory services primarily include advisory
+on a case-by-case basis with regard to the tax treatment of
+M&A transactions, ongoing consulting related to the prepa-
+ration of tax returns and the review of tax assessments, as
+well as advisory on other tax-related issues, both in Germany
+and abroad.
+Fees for other services consist primarily of technical support
+in IT and other projects.
+List of Shareholdings
+The list of shareholdings pursuant to Section 313 (2) HGB is
+an integral part of these Notes to the Financial Statements
+and is presented on pages 203 through 215.
+Domestic
+Total
+Domestic
+45
+32
+2252
+44
+31
+(13) Earnings per Share
+The computation of basic and diluted earnings per share for
+the periods indicated is shown below:
+Earnings per Share
+€ in millions
+Income/Loss from continuing operations
+Less: Non-controlling interests
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+Income/Loss from discontinued operations, net
+Less: Non-controlling interests
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+Net income/loss attributable to shareholders of E.ON SE
+in €
+Earnings per share (attributable to shareholders of E.ON SE)
+from continuing operations
+from discontinued operations
+1
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In 2015 there were restrictions on disposals involving primarily
+land and buildings, as well as technical equipment and
+machinery, in the amount of €1,434 million (2014: €1,926 million).
+In 2015, the Company recorded depreciation of property,
+plant and equipment in the amount of €2,764 million (2014:
+€3,230 million). Impairment charges, including those relating
+to the issues already mentioned, were recognized on property,
+plant and equipment in the amount of €3,134 million (2014:
+€4,802 million). A total of €362 million in reversals of impair-
+ments on property, plant and equipment was recognized in
+2015 (2014: €31 million).
+Borrowing costs in the amount of €179 million were capitalized
+in 2015 (2014: €162 million) as part of the historical cost of
+property, plant and equipment.
+Property, Plant and Equipment
+As of December 31, 2015, this presentation includes no intan-
+gible assets from exploration activity (2014: €299 million). These
+are presented as assets held for sale as of the reporting date
+(see also Note 4). Impairment charges of €136 million (2014:
+€47 million) were recognized on these intangible assets.
+Net carrying amount of capitalized lease assets
+Other equipment, fixtures, furniture and office equipment
+Technical equipment, plant and machinery
+Buildings
+Land
+€ in millions
+E.ON as Lessee-Carrying Amounts of Capitalized Lease Assets
+€34 million in research and development costs as defined by
+IAS 38 were expensed in 2015 (2014: €30 million).
+Certain gas storage facilities, supply networks and power
+plants are utilized under finance leases and capitalized in the
+E.ON Consolidated Financial Statements because the eco-
+nomic ownership of the assets leased is attributable to E.ON.
+Intangible assets include emission rights from different
+trading systems with a carrying amount of €442 million
+(2014: €447 million).
+In 2015, the Company recorded an amortization expense of
+€319 million (2014: €350 million). Impairment charges on
+intangible assets amounted to €228 million in 2015 (2014:
+€176 million).
+Intangible Assets
+Reversals of all impairments recognized in previous years
+totaled €257 million in 2014, of which €203 million was attrib-
+utable to emission rights.
+Impairments on intangible assets amounted to €176 million
+in 2014. Of this amount, €102 million was attributable to the
+Renewables segment.
+In addition, a Swedish thermal power plant was fully written
+down by an amount of €320 million because it is expected
+that the facility will be rendered economically inoperable as
+a consequence of environmental specifications. Moreover,
+conventional generation capacity was written down by
+€1.2 billion in the context of the divestment process in Italy.
+148 Notes
+147
+In the 2014 fiscal year, impairments were recognized on
+property, plant and equipment in the amount of €4,802 million.
+The most substantial individual issue in terms of amount, at
+€990 million, relates to two nuclear generation units in Sweden,
+which were written down in the fourth quarter to a recover-
+able amount of €22 million. The primary reasons for this charge
+were lower expected power sales, the additional investment
+needed to fulfill government-mandated safety specifications
+for long-term operation and the associated review of the
+potential useful life of the units. Further material impairment
+charges were recognized at the Generation global unit in
+the United Kingdom, of which the largest in terms of amount
+related to two conventional power plants. These were written
+down by €441 million and €392 million, respectively, to recov-
+erable amounts of €651 million and €0 million. The main rea-
+son for this impairment was the reduction of market spreads.
+Goodwill impairment testing performed in 2014 had necessi-
+tated no recognition of impairment charges. However, impair-
+ments on goodwill were recognized in connection with initiated
+disposals in the amount of €382 million.
+Because impairments were recognized on a number of items
+of property, plant and equipment in previous years, and par-
+ticularly on generation assets, the assets involved were particu-
+larly sensitive in subsequent years to future changes in the
+principal assumptions used to determine their recoverable
+amounts. Reversals of impairments recognized in previous
+years amounted to €0.4 billion in 2015. The greatest impairment
+reversal in terms of amount related to a power plant in the
+United Kingdom, which was written up by €0.2 billion to a recov-
+erable amount of €1 billion. Responsible for this reversal
+were changed expectations regarding price developments
+for carbon allowances in the United Kingdom.
+Impairments charged to intangible assets amounted to €0.2 bil-
+lion in total. This is primarily attributable to the developments
+in the Exploration & Production segment (€0.1 billion).
+A total of €3.1 billion in impairments was charged to property,
+plant and equipment. Material impairment charges were
+attributable to the Generation global unit, in the amount of
+€1.7 billion, and to the Exploration & Production global unit,
+in the amount of €0.9 billion (see also Note 4). Within the Gen-
+eration global unit, property, plant and equipment was written
+down in several countries as a consequence of lower expected
+power sales. The most substantial individual impairments in
+terms of amount related to one conventional power plant in
+France at €0.4 billion and one in the United Kingdom at
+€0.2 billion, and to one conventional power plant in Germany
+and one in the Netherlands at €0.2 billion each. This resulted
+in recoverable amounts of €0.1 billion, €0.6 billion, €1.1 billion
+and €1.5 billion, respectively, in France, the United Kingdom,
+Germany and the Netherlands. Furthermore, a gas storage
+facility within the Global Commodities unit was written down
+by €0.2 billion to a recoverable amount of €0.1 billion.
+The goodwill of all cash-generating units whose respective
+goodwill as of the balance sheet date is material in relation
+to the total carrying amount of all goodwill shows a surplus
+of recoverable amounts over the respective carrying amounts
+and, therefore, based on current assessment of the economic
+situation, only a significant change in the material valuation
+parameters would necessitate the recognition of goodwill
+impairment. In the Russia cash-generating unit, on which a
+goodwill impairment charge was recognized in 2015, every
+deterioration of any of the material assumptions used by
+management to determine the recoverable amount of the cash-
+generating unit would further increase the deficit between
+the recoverable amount and the carrying amount. An increase
+in the cost of capital by one percentage point, for example,
+would thus necessitate an additional impairment charge of
+€0.2 billion on goodwill. In the Exploration & Production Russia
+unit, an increase in the cost of capital by one percentage
+point would necessitate an additional impairment charge of
+€0.1 billion on goodwill, and a lowering of the principal com-
+modity price assumption by 10 percentage points would
+necessitate an additional impairment charge of €0.3 billion
+on goodwill.
+Reversals of impairments on intangible assets totaled €87 mil-
+lion in 2015 (2014: €226 million). Of this amount, €45 million is
+attributable to price effects in carbon allowances.
+The property, plant and equipment thus capitalized had the
+following carrying amounts as of December 31, 2015:
+December 31,
+2015
+8
+-1,085
+5,356
+596
+8,524
+-3,230
+338
+-5
+-4,802
+31
+-55,430
+41,273
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2014-Presentation of Other EU Countries
+142 Notes
+141
+1,923
+1,944
+-1.64
+840
+843
+103
+93
+725
+717
+8
+29
+4
+4
+2014
+In connection with initiated sales, impairments were recog-
+nized on goodwill in the disposal group in the amount of
+roughly €0.7 billion relating to the U.K. and Norwegian North
+Sea businesses of the Exploration & Production unit on the
+basis of the expected purchase prices.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+-200
+-254
+-1
+-8
+63
+Other changes¹
+Impairment charges
+14
+9
+8
+-3
+and disposals
+Changes resulting from acquisitions
+1,434
+360
+0
+43
+132
+899
+will as of January 1, 2014
+Net carrying amount of good-
+Other EU
+Countries
+units
+Hungary
+Other regional
+Czechia
+Sweden
+UK
+€ in millions
+Net carrying amount of good-
+7
+will as of December 31, 2014
+121
+Report of the Supervisory Board
+CEO Letter
+The goodwill impairment testing performed in 2015 necessitated
+the recognition of impairment charges totaling €4.8 billion
+(2014: €0 million). The most substantial individual issue in
+terms of amount, at €4.5 billion, was the total write-down of
+all goodwill in the Generation global unit to its recoverable
+amount of €6.9 billion. This total write-down is primarily attrib-
+utable to a deterioration in projected earnings. In addition,
+goodwill was written down by roughly €0.2 billion in the focus
+region Russia. This unit was written down to a recoverable
+amount of €2.7 billion, likewise because of a deterioation in
+projected earnings.
+The recoverable amount primarily used to test a business for
+impairment is the fair value less costs to sell; at the Russia
+focus region, however, the recoverable amount is based on the
+value in use. The value in use for the Russia region is deter-
+mined in local currency and according to the regulatory frame-
+work over a detailed planning period of 15 years. The pre-tax
+cost of capital of this cash-generating unit is 17.2 percent
+(after-tax interest rate: 13.7 percent; 2014: 15 and 12 percent,
+respectively); the growth rate is 4 percent (2014: 3.5 percent).
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment, and of groups of these assets. In the Generation
+segment, for example, the tests are based on the respective
+remaining useful life and on other plant-specific valuation
+parameters. If the goodwill of a cash-generating unit is com-
+bined with assets or groups of assets for impairment testing,
+the assets must be tested first.
+E.ON has made the general assumption in 2015 that the
+market will not return to an equilibrium free from regulatory
+elements. Appropriate compensation elements were taken
+into account.
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective fore-
+casts for commodity market prices, future electricity and gas
+prices in the wholesale and retail markets, E.ON's investment
+activity, changes in the regulatory framework, as well as for
+rates of growth and the cost of capital. These assumptions are
+based on market data and on internal estimates
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations
+for impairment-testing purposes are generally based on the
+three planning years of the medium-term plan plus two addi-
+tional detailed planning years. In certain justified exceptional
+cases, a longer detailed planning period of ten years is used
+as the calculation basis, especially when that is required under
+a regulatory framework or specific regulatory provisions. The
+cash flow assumptions extending beyond the detailed planning
+period are determined using segment-specific growth rates
+that are based on historical analysis and prospective fore-
+casting. The growth rates used in 2015 generally correspond
+to the inflation rates in each of the currency areas where
+the cash-generating units are tested. In 2015, the inflation rate
+used for the euro area was 1.5 percent (2014: 1.5 percent). A
+general growth rate of 2 percent was applied for the Renew-
+ables segment in the 2014 fiscal year. The Generation and
+Hydro units are using a growth rate of 0 percent. The interest
+rates used for discounting cash flows are calculated using
+market data for each cash-generating unit, and as of Decem-
+ber 31, 2015, ranged between 4.0 and 10.8 percent after taxes
+(2014: 4.8 and 8.3 percent).
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units.
+In the absence of binding sales transactions or market prices
+for the respective cash-generating units, fair values are calcu-
+lated based on discounted cash flow methods.
+IFRS 3 prohibits the amortization of goodwill. Instead, good-
+will is tested for impairment at least annually at the level of
+the cash-generating units. Goodwill must also be tested for
+impairment at the level of individual cash-generating units
+between these annual tests if events or changes in circum-
+stances indicate that the recoverable amount of a particular
+cash-generating unit might be impaired. Intangible assets
+subject to amortization and property, plant and equipment
+must generally be tested for impairment whenever there are
+particular events or external circumstances indicating the
+possibility of impairment.
+Impairments
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 142 through 145.
+Goodwill and Non-Current Assets
+146 Notes
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale.
+2Other non-current assets consist of intangible assets and of property, plant and equipment.
+1
+-47
+-36
+0
+1
+0
+Reversals
+-11
+Impairment
+Other non-current assets²
+1,248
+115
+0
+50
+962
+-0.09
+2,690
+-18
+-57
+Other changes¹
+220
+167
+1
+-834
+-25
+-212
+67
+-58
+-148
+-4,786
+-437
+-38
+Net carrying amount of good-
+0
+1,766
+1,085
+917
+796
+1,290
+587
+0
+6,441
+Growth rate (in %)2,3
+0.0
+Cost of capital (in %) 2,3
+Other non-current assets4
+5.2-6.4
+will as of December 31, 2015
+-4,454
+Impairment charges
+-61
+93,020
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2015
+Group
+Manage-
+Global
+Genera-
+€ in millions
+tion
+Renew- Commodi-
+ables5
+Explora-
+tion &
+ties Production
+ment/
+Germany
+Other EU
+Countries
+Consolida-
+Russia6
+tion
+E.ON
+Group
+Net carrying amount of good-
+will as of January 1, 2015
+4,321
+1,698
+1,084
+1,808
+796
+1,248
+857
+0
+11,812
+Changes resulting from acqui-
+sitions and disposals
+-87
+1.5-2.0
+4.0-5.5
+96
+1.5
+5.4
+scope of
+rate
+consolida-
+Jan. 1, 2015
+differences
+-512
+32
+tion
+-236
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+Exchange
+0
+0
+-4,786
+0
+Dec. 31, 2015
+-5,502
+Dec. 31, 2015
+6,441
+-2
+0
+-2
+-342
+-3
+-167
+-42
+47
+0
+Changes in
+Net carrying
+amounts
+143
+10.8
+4.3
+4.0
+17.2
+Impairment
+Reversals
+-1,731
+334
+-244
+-258
+-1,026
+-36
+45
+4
+-41
+55
+-26
+-3,362
+7
+4
+449
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale. Also included is the goodwill impairment of disposal
+groups (see also page 147).
+2Presented here are growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+³Exploration & Production: growth rate and weighted-average cost of capital indicated solely for Exploration & Production Russia.
+"Other non-current assets consist of intangible assets and of property, plant and equipment.
+5The Renewables segment consists of the two cash-generating units EC&R and Hydro. Their net carrying amounts of goodwill as of December 31, 2015, were €1,359 million and €407 million,
+respectively.
+"Growth rate and cost of capital before taxes, in local currency.
+Accumulated depreciation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+1.5
+-7,834
+4,249
+-1,256
+84
+-17
+65
+4,664
+Technology-based intangible assets
+Internally generated intangible assets
+740
+5
+21
+53
+-56
+32
+795
+155
+-19
+2
+-15
+46
+212
+Intangible assets subject to amortization
+6,145
+-94
+169
+161
+-135
+144
+6,390
+Intangible assets not subject to amortization
+1,454
+24
+-106
+4,657
+Contract-based intangible assets
+€ in millions
+Goodwill
+Acquisition and production costs
+Changes in
+Exchange
+rate
+scope of
+consolida-
+Jan. 1, 2015
+differences
+tion
+Additions
+Disposals
+Transfers
+12,324
+174
+-555
+0
+0
+0
+Dec. 31, 2015
+11,943
+Marketing-related intangible assets
+Customer-related intangible assets
+2
+2
+591
+5
+167
+-47
+1
+717
+9
+-451
+1,532
+-1,684
+6,557
+Technical equipment, plant and machinery
+79,488
+932
+-1,427
+2,830
+-6,532
+2,860
+78,151
+Other equipment, fixtures, furniture and
+office equipment
+1,410
+10
+-14
+91
+-183
+15
+1,329
+Advance payments and construction in progress
+6,441
+125
+16
+1,010
+-486
+-2,838
+4,268
+Property, plant and equipment
+96,703
+1,062
+60
+34
+-507
+80
+-36
+824
+Advance payments on intangible assets
+223
+13
+23
+362
+-8
+-287
+326
+Intangible assets
+7,822
+-72
+-259
+2,055
+-1,827
+-179
+7,540
+Real estate and leasehold rights
+2,690
+42
+89
+21
+-126
+-1
+2,715
+Buildings
+6,674
+-47
+297
+10
+-473
+-1,615
+55
+¹Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale. Also included is the goodwill impairment of disposal
+groups (see also page 147).
+²Other non-current assets consist of intangible assets and of property, plant and equipment.
+144 Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment
+Acquisition and production costs
+Changes in
+Exchange
+rate
+€ in millions
+Jan. 1, 2014
+differences
+Goodwill
+16,062
+46
+-276
+Additions
+Disposals
+Transfers
+Dec. 31, 2014
+0
+0
+0
+12,324
+Marketing-related intangible assets
+Customer-related intangible assets
+3
+-1
+2
+921
+scope of
+consolida-
+tion
+-3,462
+-41
+-31
+-5
+0
+115
+1,248
+and disposals
+Impairment charges
+Other changes¹
+59
+3
+3
+Net carrying amount of good-
+will as of December 31, 2015
+1,021
+124
+53
+0
+Other non-current assets²
+Impairment
+Reversals
+-1
+-4
+1
+8
+-25
+-25
+67
+2
+222
+92
+1,290
+-10
+Other EU
+Countries
+-162
+591
+1,897
+-3
+-96
+1,723
+-2,070
+3
+1,454
+Advance payments on intangible assets
+143
+8
+-13
+135
+-2
+Intangible assets not subject to amortization
+-48
+Intangible assets
+10,712
+-871
+-1,758
+2,019
+-2,307
+27
+7,822
+Real estate and leasehold rights
+2,967
+-89
+-189
+9
+223
+6,145
+155
+740
+Contract-based intangible assets
+6,726
+-859
+-1,330
+115
+-19
+Technology-based intangible assets
+881
+-10
+-158
+28
+-30
+29
+Internally generated intangible assets
+141
+3
+1
+18
+-28
+20
+Intangible assets subject to amortization
+8,672
+-876
+-1,649
+161
+-235
+72
+2222
+4,657
+-158
+units
+Hungary
+Other regional
+3,375
+-307
+4
+280
+97
+-137
+45
+-18
+806
+-22
+-2
+-5
+1
+-3,015
+-14
+284
+-2,940
+12
+97
+-319
+217
+-1
+-228
+87
+-3,075
+4,465
+-411
+-4
+-42
+42
+442
+-77
+20
+16
+-153
+5
+-1
+-77
+-1,805
+2,859
+-571
+-5
+-26
+-76
+55
+8
+-615
+180
+-81
+-2
+-1
+-49
+13
+-120
+92
+-2,611
+10
+-178
+-320
+120
+-1
+1
+-6
+11
+-36
+-7
+-7
+395
+230
+-222
+7
+-689
+3,579
+-55,430
+-533
+39
+-2,764
+7,338
+99
+-3,134
+362
+-54,023
+38,997
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2015-Presentation of Other EU Countries
+€ in millions
+Net carrying amount of good-
+will as of January 1, 2015
+Changes resulting from acquisitions
+UK
+Sweden
+Czechia
+962
+121
+50
+-1,085
+244
+361
+-1
+4
+-441
+2,274
+-4,082
+-14
+-58
+-156
+457
+4
+-113
+3
+-3,959
+2,598
+-48,815
+-499
+86
+-2,486
+6,300
+-138
+-2,762
+348
+-47,966
+30,185
+-1,037
+-9
+10
+-109
+175
+3
+-968
+-3.60
+Some of the leases contain price-adjustment clauses, as well
+as extension and purchase options. The corresponding pay-
+ment obligations under finance leases are due as shown below:
+-146
+Net income/loss from continuing
+1,013
+1,009
+1,099
+1,054
+371
+415
+1,074
+1,080
+Sales
+2014
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+€ in millions
+energetika a.s.
+Gaswerke AG
+operations
+Západoslovenská
+395
+114
+Total comprehensive income
+-1
+1
+-39
+-12
+-219
+116
+Other comprehensive income
+52
+57
+31
+41
+29
+535
+321
+Dividend paid out
+87
+88
+33
+52
+67
+346
+511
+Gasag Berliner
+Nord Stream AG
+240
+269
+Proportional share of equity
+49.00
+49.00
+36.85
+36.85
+25.00
+25.00
+15.50
+15.50
+Ownership interest (in %)
+-63
+-38
+705
+703
+752
+722
+1,549
+1,738
+Equity
+181
+ОАО
+Severneftegazprom
+188
+260
+Material Associates-Earnings Data
+185
+193
+316
+317
+197
+180
+335
+358
+Carrying amount of equity investment
+216
+212
+56
+58
+9
+-1
+95
+89
+Consolidation adjustments
+-31
+-19
+259
+739
+127
+67
+3,464
+(including provisions)
+Non-current liabilities
+1,678
+2,000
+Current liabilities (including provisions)
+1,138
+1,304
+Current assets
+Enerjisa Enerji A.Ş.
+2014
+7,441
+7,251
+Non-current assets
+2015
+€ in millions
+Material Joint Venture-Balance
+Sheet Data as of December 31
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income
+statements of the sole joint venture accounted for under the
+equity method, Enerjisa Enerji A.Ş.:
+152 Notes
+151
+42
+38
+-1
+3,923
+-5
+Cash and cash equivalents
+Current financial liabilities
+Investments in associates totaling €538 million (2014:
+€532 million) were restricted because they were pledged as
+collateral for financing as of the balance sheet date.
+The carrying amounts of companies accounted for under the
+equity method whose shares are marketable totaled €82 mil-
+lion in 2015 (2014: €212 million). The fair value of E.ON's share
+in these companies was €84 million (2014: €227 million).
+The material associates and the material joint venture are
+active in diverse areas of the gas and electricity industries.
+Disclosures of company names, registered offices and equity
+interests as required by IFRS 12 for material joint arrange-
+ments and associates can be found in the list of shareholdings
+pursuant to Section 313 (2) HGB (see Note 36).
+2,202
+2,073
+Carrying amount of equity investment
+713
+528
+Consolidation adjustments
+2,978
+50
+1,489
+1,545
+Proportional share of equity
+50
+Ownership interest (in %)
+3,091
+Equity
+3,146
+2,741
+Non-current financial liabilities
+78
+979
+1,226
+81
+114
+43
+257
+11
+17
+29
+20
+20
+79
+sive income after taxes
+Proportional share of total comprehen-
+49.00
+49.00
+36.85
+36.85
+25.00
+25.00
+15.50
+15.50
+Ownership interest (in %)
+86
+89
+-6
+40
+15
+43
+-2
+42
+-5
+12
+235
+16
+9
+13
+56
+56
+Equity-method earnings
+-8
+-16
+2
+-5
+Consolidation adjustments
+19
+17
+29
+54
+61
+taxes
+Proportional share of net income after
+43
+751
+1,121
+1,034
+E.ON Group
+Joint ventures¹
+December 31, 2015
+Associates¹
+E.ON Group
+€ in millions
+Companies Accounted for under the Equity Method and Other Financial Assets
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+(15) Companies Accounted for under the Equity
+Method and Other Financial Assets
+See Note 17 for information on receivables from finance leases.
+47
+47
+11
+12
+23
+21
+13
+14
+Due in more than 5 years
+Total
+Due in 1 to 5 years
+Due within 1 year
+Nominal value of outstanding lease
+installments
+December 31, 2014
+Associates¹
+2014
+Joint ventures¹
+equity method
+¹The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+2,595
+2,668
+11,363
+2,454
+2,370
+10,462
+Total
+4,781
+4,724
+Non-current securities
+2,586
+9
+2,423
+245
+1,573
+10
+5,009
+2,444
+2,092
+278
+1,202
+Equity investments
+4,536
+Companies accounted for under the
+149
+2015
+E.ON also functions in the capacity of lessor. Contingent lease
+payments received totaled €30 million (2014: €57 million).
+Future lease installments receivable under operating leases
+are due as shown in the table at right:
+103
+2014
+2015
+2014
+2015
+Present values
+Covered interest share
+Minimum lease payments
+2014
+2015
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Total
+Due in more than 5 years
+Due in 1 to 5 years
+Due within 1 year
+€ in millions
+100
+E.ON as Lessor-Operating Leases
+€ in millions
+57
+46
+Regarding future obligations under operating leases where
+economic ownership is not transferred to E.ON as the lessee,
+see Note 27.
+The present value of the minimum lease obligations is
+reported under liabilities from leases.
+813
+827
+1,018
+1,030
+1,831
+1,857
+596
+606
+745
+751
+1,341
+1,357
+173
+175
+217
+222
+390
+397
+44
+56
+150 Notes
+Companies accounted for under the equity method consist
+solely of associates and joint ventures.
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+736
+1,796
+1,824
+1,025
+949
+6,502
+6,234
+Non-current assets
+2014
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+€ in millions
+energetika a.s.
+Gaswerke AG
+Západoslovenská
+Gasag Berliner
+703
+ОАО
+Severneftegazprom
+Current assets
+664
+432
+389
+5,109
+4,596
+(including provisions)
+Non-current liabilities
+163
+159
+413
+400
+61
+107
+508
+506
+Current liabilities (including provisions)
+136
+136
+443
+313
+220
+269
+606
+Nord Stream AG
+Material Associates-Balance Sheet Data as of December 31
+The Group adjustments presented are primarily attributable
+to the goodwill and hidden reserves created in the context of
+acquisitions, and to adjustments made in line with the
+accounting policies applicable throughout the E.ON Group.
+2015
+2014
+2015
+2014
+2015
+Total
+Joint ventures
+Associates
+Proportional share of total comprehensive income
+Proportional share of other comprehensive income
+Proportional share of net income from continuing operations
+€ in millions
+Summarized Financial Information for Individually Non-Material Associates
+and Joint Ventures Accounted for under the Equity Method
+The following table summarizes significant line items of the
+aggregated statements of comprehensive income of the
+associates and joint ventures that are accounted for under
+the equity method:
+Investment income generated from companies accounted for
+under the equity method amounted to €305 million in 2015
+(2014: €301 million).
+The carrying amounts of the immaterial associates
+accounted for under the equity method totaled €1,045 mil-
+lion (2014: €1,019 million), and those of the joint ventures
+totaled €371 million (2014: €384 million).
+Shares in Companies Accounted for under the
+Equity Method
+€623 million (2014: €729 million) in non-current securities is
+restricted for the fulfillment of legal insurance obligations of
+Versorgungskasse Energie ("VKE") (see Note 31).
+Impairments on other financial assets amounted to €72 million
+(2014: €72 million). The carrying amount of other financial
+assets with impairment losses was €376 million as of the end
+of the fiscal year (2014: €337 million).
+In 2014, these impairments included €467 million relating to a
+Brazilian equity investment in the Other Non-EU Countries
+segment. The principal causes of these impairments were the
+investee's operational challenges and the development of its
+stock price, as well as the company's filing for legal protection
+from creditors in order to facilitate the reorganization of its
+capital structure and the elevated financing costs that are
+associated with such restructuring. The recoverable amount,
+which was determined during the year in terms of both
+value in use and fair value, was of minimal significance as
+of December 31, 2014, in light of the bankruptcy filing.
+In 2015, impairment charges on companies accounted for
+under the equity method amounted to €120 million (2014:
+€491 million).
+2014
+125
+136
+44
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of compre-
+hensive income of the material companies accounted for
+under the equity method. The material associates in the E.ON
+Group are Nord Stream AG, OAO Severneftegazprom, Gasag
+Berliner Gaswerke AG and Západoslovenská energetika a.s.
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+-337
+5
+-7
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+1622
+34
+131
+128
+10
+-10
+-5
+3
+-342
+169
+-478
+-468
+Material Joint Venture-Earnings Data
+Enerjisa Enerji A.Ş.
+€ in millions
+Conditional Capital
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 2, 2017, the Company's capital stock by a total of up
+to €460 million through one or more issuances of new regis-
+tered no-par-value shares against contributions in cash and/or
+in kind (with the option to restrict shareholders' subscription
+rights); such increase shall not, however, exceed the amount
+and number of shares in which the authorized capital pursu-
+ant to Section 3 of the Articles of Association of E.ON AG still
+exists at the point in time when the conversion of E.ON AG
+into a European company ("SE") becomes effective pursuant to
+the conversion plan dated March 6, 2012 (authorized capital
+pursuant to Sections 202 et seq. AktG). Subject to the Super-
+visory Board's approval, the Management Board is autho-
+rized to exclude shareholders' subscription rights. The autho-
+rized capital has not been used.
+Authorized Capital
+156 Notes
+155
+The Company has further been authorized by the Annual
+Shareholders Meeting to buy shares using put or call options,
+or a combination of both. When derivatives in the form of
+put or call options, or a combination of both, are used to acquire
+shares, the option transactions must be conducted at market
+terms with a financial institution or on the market. No shares
+were acquired in 2015 using this purchase model.
+An additional 1,670,000 shares were purchased in the open
+market for the employee stock purchase program in December
+2015 at a purchase price of €14,687,503.83. This corresponds
+to 0.08 percent or a computed share of €1,670,000 of the cap-
+ital stock. A total of 1,419,934 shares were distributed to
+employees for the 2015 employee stock purchase program
+(2014: 919,064 treasury shares used). See also Note 11 for
+information on the distribution of shares under the employee
+stock purchase program. A further 1,065 treasury shares
+(2014: 630 shares) were distributed as bonuses to eligible
+employees. Another 293,735 shares were sold in the open
+market in December.
+treasury shares reduced by €787 million (2014: €964 million)
+the valuation allowance for treasury shares, which is mea-
+sured at historical cost. Conversely, additional paid-in capital
+was reduced by €520 million (2014: €649 million). This amount
+represents the difference between the historical cost and the
+subscription price of the shares. The discount of €7 million
+(2014: €9 million) granted on the current share price is charged
+to retained earnings.
+As part of the scrip dividend for the 2014 fiscal year, sharehol-
+der cash dividend entitlements totaling €260 million (2014:
+€305 million) were settled through the issue and distribution
+of 19,615,021 (2014: 24,008,788) treasury shares. The issue of
+Pursuant to a resolution by the Annual Shareholders Meeting
+of May 3, 2012, the Company is authorized to purchase own
+shares until May 2, 2017. The shares purchased, combined with
+other treasury shares in the possession of the Company, or
+attributable to the Company pursuant to Sections 71a et seq.
+AktG, may at no time exceed 10 percent of its capital stock.
+The Management Board was authorized at the aforemen-
+tioned Annual Shareholders Meeting to cancel any shares thus
+acquired without requiring a separate shareholder resolution
+for the cancellation or its implementation. The total number of
+outstanding shares as of December 31, 2015, was 1,952,396,600
+(December 31, 2014: 1,932,736,845). As of December 31, 2015,
+E.ON SE and one of its subsidiaries held a total of 48,603,400
+treasury shares (December 31, 2014: 68,263,155) having a book
+value of €1,714 million (equivalent to 2.43 percent or €48,603,400
+of the capital stock).
+The capital stock is subdivided into 2,001,000,000 registered
+shares with no par value ("no-par-value shares”) and amounts
+to €2,001,000,000 (2014: €2,001,000,000). The capital stock of
+the Company was provided by way of conversion of E.ON AG
+into a European Company ("SE").
+(19) Capital Stock
+Cash and cash equivalents include €4,404 million (2014:
+€2,434 million) in checks, cash on hand and balances in
+Bundesbank accounts and at other financial institutions with
+an original maturity of less than three months, to the extent
+that they are not restricted.
+Current securities with an original maturity greater than three
+months include €435 million (2014: €265 million) in securities
+held by VKE that are restricted for the fulfillment of legal
+insurance obligations (see Note 31).
+In 2015, there was €4 million in restricted cash (2014: €1 million)
+with a maturity greater than three months.
+6,067
+8,190
+Total
+3,191
+5,189
+Cash and cash equivalents
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights)
+1,064
+in the amount of €175 million, which is authorized until May 2,
+2017. The conditional capital increase will be implemented
+only to the extent required to fulfill the obligations arising on
+the exercise by holders of option or conversion rights, and
+those arising from compliance with the mandatory conversion
+of bonds with conversion or option rights, profit participation
+rights and income bonds that have been issued or guaranteed
+by E.ON SE or a Group company of E.ON SE as defined by
+Section 18 AktG, and to the extent that no cash settlement has
+been granted in lieu of conversion and no E.ON SE treasury
+shares or shares of another listed company have been used to
+service the rights. However, this conditional capital increase
+only applies up to the amount and number of shares in which
+the conditional capital pursuant to Section 3 of the Articles
+of Association of E.ON AG has not yet been implemented at
+the point in time when the conversion of E.ON AG into a Euro-
+pean company ("SE") becomes effective in accordance with the
+conversion plan dated March 6, 2012. The conditional capital
+has not been used.
+The following notices pursuant to Section 21 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+(21) Retained Earnings
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+this context. This amount represents the difference between
+the historical cost and the subscription price of the shares.
+The change further includes the loss realized on the sale of
+shares distributed to eligible employees of the E.ON Group
+under the employee stock purchase program.
+Additional paid-in capital declined by €519 million during
+2015, to €12,558 million (2014: €13,077 million). The reduction
+of additional paid-in capital is primarily due to the issue of
+treasury shares as part of the scrip dividend. Additional paid-
+in capital was reduced by €520 million (2014: €649 million) in
+(20) Additional Paid-in Capital
+Absolute
+131,779,688
+6.59
+Percentages
+Allocation
+indirect
+Voting rights
+Gained voting
+rights on
+Dec. 21, 2015
+5%
+Threshold
+exceeded
+Date of notice
+Dec. 23, 2015
+BlackRock Inc. Wilmington, U.S.
+Stockholder
+Information on Stockholders of E.ON SE
+Voting Rights
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+923
+63
+410
+1,122
+1,019
+418
+382
+219
+170
+637
+552
+183
+183
+198
+185
+381
+368
+44
+44
+60
+55
+104
+99
+477
+Restricted cash and cash equivalents
+609
+CEO Letter
+58
+original maturity greater than 3 months
+Fixed-term deposits with an
+1,749
+2,020
+original maturity greater than 3 months
+Current securities with an
+2014
+1,812
+2,078
+Securities and fixed-term deposits
+2015
+€ in millions
+December 31,
+Liquid Funds
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+(18) Liquid Funds
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+645
+Retained Earnings
+2014
+December 31,
+Available-for-sale
+2
+Cash flow hedges
+Changes
+Balance as of January 1, 2014
+€ in millions
+Share of OCI Attributable to Non-Controlling Interests
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests:
+The increase in non-controlling interests in 2015 resulted
+primarily from other operating income in Sweden in the Gen-
+eration global unit and from a share sale in the Renewables
+segment.
+2,128
+2,648
+Total
+217
+263
+Group Management/Consolidation
+220
+166
+Russia
+427
+374
+Other EU Countries
+securities
+1,096
+22
+adjustments
+-631
+5
+6
+Balance as of December 31, 2015
+Changes
+92
+-41
+-21
+2
+Balance as of December 31, 2014
+-238
+-590
+26
+4
+-186
+-296
+4
+2
+-52
+-294
+Remeasurements of
+defined benefit plans
+Currency translation
+1,321
+Germany
+1
+Balance as of December 31 (before taxes)
+2014
+2015
+€ in millions
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method:
+(22) Changes in Other Comprehensive Income
+As in the previous year, shareholders in 2015 could once again
+choose between having their cash dividend entitlement settled
+entirely in cash and converting part of it into E.ON shares.
+Accounting for a participation rate of roughly 37 percent,
+19,615,021 treasury shares were issued for distribution. This
+reduced the cash distribution to €706 million.
+A proposal to distribute a cash dividend for 2015 of €0.50 per
+share will be submitted to the Annual Shareholders Meeting.
+For 2014, shareholders at the May 7, 2015, Annual Shareholders
+Meeting voted to distribute a dividend of €0.50 for each divi-
+dend-paying ordinary share. Based on a €0.50 dividend, the
+total profit distribution is €976 million (2014: €966 million).
+Accordingly, the amount of retained earnings available for
+distribution in principle is €3,626 million (2014: €6,487 million).
+Düsseldorf, Germany. In accordance with Section 253 (1) HGB,
+these investments are measured at fair value, which stood at
+€232 million as of the balance sheet date and exceeded by
+€1 million their cost of €231 million. The €1 million difference
+is composed of €1.6 million in increases in value and €0.9 million
+in decreases in value. Taking into account deferred tax assets
+of €0.5 million, increases in value totaled €2.1 million and
+decreases in value totaled €0.9 million. This surplus is fully
+covered by a sufficient amount of available reserves. Accord-
+ingly, there is no restriction preventing payment in 2016 of
+the proposed dividend distribution of €976 million.
+In order to fulfill retirement benefit obligations, funds have
+been invested as restricted, bankruptcy-remote assets in
+fund units administered in trust by E.ON Pension Trust e.V.
+and by Pensionsabwicklungstrust e.V., both registered in
+As of December 31, 2015, these German-GAAP retained earnings
+totaled €3,673 million (2014: €6,540 million). Of this amount,
+legal reserves of €45 million (2014: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG.
+Under German securities law, E.ON SE shareholders may
+receive distributions from the balance sheet profit of E.ON SE
+reported as available for distribution in accordance with the
+German Commercial Code.
+45
+16,797
+16,842
+9,419
+9,374
+Other retained earnings
+Total
+2015
+45
+Legal reserves
+€ in millions
+-875
+-725
+Taxes
+7
+1
+Exploration & Production
+Global Commodities
+Renewables
+196
+351
+-29
+172
+2014
+2015
+2014
+December 31,
+€ in millions
+Non-Controlling Interests
+Non-controlling interests by segment as of the dates indicated
+are shown in the following table:
+(23) Non-Controlling Interests
+158 Notes
+157
+-721
+-868
+Balance as of December 31 (after taxes)
+4
+Generation
+E.ON as Lessee-Payment Obligations under Finance Leases
+2015
+2015
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+(17) Receivables and Other Assets
+3,356
+2,546
+103
+114
+Work in progress and finished products
+Total
+1,432
+978
+Goods purchased for resale
+1,821
+1,454
+Raw materials and supplies
+2014
+2015
+€ in millions
+No inventories have been pledged as collateral.
+December 31,
+Write-downs totaled €309 million in 2015 (2014: €101 million).
+Reversals of write-downs amounted to €21 million in 2015
+(2014: €11 million).
+Raw materials, goods purchased for resale and finished
+products are generally valued at average cost.
+Inventories
+Receivables and Other Assets
+The following table provides a breakdown of inventories as
+of the dates indicated:
+€ in millions
+December 31, 2014
+11,800
+11,213
+Trade receivables
+3,533
+1,376
+3,571
+1,493
+Financial receivables and other financial assets
+2,931
+1,333
+3,007
+1,448
+Other financial receivables and financial assets
+602
+43
+564
+45
+Receivables from finance leases
+Non-current
+Current
+Non-current
+December 31, 2015
+Current
+Receivables from derivative financial instruments
+(16) Inventories
+Combined Group Management Report
+12
+Other comprehensive income
+Dividend paid out
+-17
+-47
+-272
+-233
+-27
+-60
+-57
+90
+Income taxes
+Interest income/expense
+Write-downs (and reversals)
+operations
+Net income/loss from continuing
+3,880
+3,725
+Sales
+2014
+2015
+3
+Consolidated Financial Statements
+Tables and Explanations
+Total comprehensive income
+-54
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+-45
+-3
+-16
+-48
+-29
+45
+Equity-method earnings
+Consolidation adjustments
+after taxes
+Proportional share of net income
+-27
+51
+income after taxes
+Proportional share of total comprehensive
+50
+50
+Ownership interest (in %)
+102
+11,108
+5,102
+10,199
+more than 360 days
+-952
+-978
+Balance as of December 31
+32
+73
+181 to 360 days
+9
+-13
+Other¹
+44
+101
+219
+277
+Disposals
+22
+70
+91 to 180 days
+61 to 90 days
+681
+64
+31
+89
+65
+111
+2014
+2015
+Present value of minimum
+lease payments
+income
+arrangements
+Unrealized interest
+Gross investment in
+finance lease
+Receivables from finance leases are primarily the result of
+certain electricity delivery contracts that must be treated as
+leases according to IFRIC 4. The nominal and present values of
+the outstanding lease payments have the following due dates:
+reported under receivables from finance leases.
+The present value of the outstanding lease payments is
+Total
+Due in more than 5 years
+Due in 1 to 5 years
+Due within 1 year
+€ in millions
+E.ON as Lessor-Finance Leases
+11,800
+11,213
+Total trade receivables
+1"Other" includes also currency translation adjustments.
+48
+Net value of impaired receivables
+Reversals of write-downs
+440
+844
+addition, based on the provisions of IFRIC 5, other financial
+assets include a claim for a refund from the Swedish Nuclear
+Waste Fund in the amount of €2,281 million (2014: €1,879 mil-
+lion) in connection with the decommissioning of nuclear power
+plants and nuclear waste disposal. Since this asset is desig-
+nated for a particular purpose, E.ON's access to it is restricted.
+154 Notes
+153
+other financial assets include receivables from owners of
+non-controlling interests in jointly owned power plants of
+€303 million (2014: €283 million) and margin account deposits
+for futures trading of €389 million (2014: €301 million). In
+In 2015, there were unguaranteed residual values of €14 million
+(2014: €18 million) due to E.ON as lessor under finance leases.
+Some of the leases contain price-adjustment clauses, as well
+as extension and purchase options. As of December 31, 2015,
+7,480
+25,687
+9,105
+26,824
+Total
+3,947
+24,311
+5,534
+25,331
+Trade receivables and other operating assets
+430
+2,312
+432
+3,010
+Other operating assets
+3,517
+The aging schedule of trade receivables is presented in the
+table below:
+The individual impaired receivables are due from a large
+number of retail customers from whom it is unlikely that full
+repayment will ever be received. Receivables are monitored
+within the various units.
+Valuation allowances for trade receivables have changed as
+shown in the following table:
+Valuation Allowances for Trade Receivables
+715
+-313
+-332
+Write-downs
+10,908
+10,387
+134
+-47
+Change in scope of consolidation
+2014
+2014
+2015
+Not impaired and past-due by
+Not impaired and not past-due
+€ in millions
+-1,065
+-952
+Balance as of January 1
+Aging Schedule of Trade Receivables
+2014
+2015
+€ in millions
+up to 60 days
+8,133
+13,712
+25,802
+85
+76
+97
+49
+Other investment funds
+Total listed plan assets
+Plan assets not listed in an active
+market
+Equity securities not traded on an
+exchange
+Debt securities
+Real estate
+327
+16
+10
+1
+4
+649
+326
+1
+Qualifying insurance policies
+59
+29
+Cash and cash equivalents
+3
+5
+530
+5
+9
+46
+2
+36
+19
+6
+38
+83
+75
+95
+39
+2523250
+21
+25
+14
+46
+67
+37
+24
+58
+ཆབ༴
+1
+48
+2
+13
+15
+9
+4
+12
+5
+Other
+Net Periodic Pension Cost
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+2015
+2014
+United
+The net periodic pension cost for defined benefit plans
+included in the provisions for pensions and similar obligations
+and in operating receivables is shown in the table below:
+Other
+Other
+€ in millions
+Total
+Germany
+Kingdom
+countries
+Total
+Germany
+Kingdom
+countries
+Employer service cost
+United
+Description of the Pension Cost
+The determination of the target portfolio structure for the
+individual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in
+a comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition
+of the capital markets and the structure of the benefit obli-
+gations, and is adjusted as necessary. The parameters used in
+the studies are additionally reviewed regularly, at least once
+each year. Asset managers are tasked with implementing the
+target portfolio structure. They are monitored for target
+achievement on a regular basis.
+currency hedging instruments) to facilitate the control of
+specific risk factors of pension liabilities. In the table above,
+derivatives have been allocated, based on their substance,
+to the respective asset classes in which they are used. In order
+to improve the funded status of the E.ON Group as a whole, a
+portion of the plan assets will also be invested in a diversified
+portfolio of asset classes that are expected to provide for
+long-term returns in excess of those of fixed-income invest-
+ments and thus in excess of the discount rate.
+2
+2
+2
+22
+Total unlisted plan assets
+17
+25
+5
+61
+15
+24
+3
+51
+Total
+100
+100
+100
+100
+100
+100
+100
+100
+¹In Germany, 5 percent (2014: 7 percent) of plan assets are invested in other debt securities, in particular mortgage bonds ("Pfandbriefe"), in addition to government and corporate
+bonds.
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. A deterioration of the net defined
+benefit liability or the funded status following an unfavorable
+development in plan assets or in the present value of the
+defined benefit obligations is identified in these guidelines as
+a risk that is controlled as part of a risk-budgeting concept.
+E.ON therefore regularly reviews the development of the funded
+status in order to monitor this risk.
+To implement the investment objective, the E.ON Group primar-
+ily pursues an investment approach that takes into account
+the structure of the benefit obligations. This long-term invest-
+ment strategy seeks to manage the funded status, with the
+result that any changes in the defined benefit obligation,
+especially those caused by fluctuating inflation and interest
+rates are, to a certain degree, offset by simultaneous corre-
+sponding changes in the fair value of plan assets. The invest-
+ment strategy may also involve the use of derivatives (for
+example, interest rate swaps and inflation swaps, as well as
+2
+339
+8
+1
+Current liabilities
+Non-current liabilities
+Current assets
+Non-current assets
+Operating cash flow
+interests
+Dividends paid out to non-controlling
+36.9
+38.5
+16.3
+16.3
+42
+9.8
+Non-controlling interests in equity (in %)¹
+604
+721
+220
+166
+359
+356
+Non-controlling interests in equity
+2014
+2015
+2014
+24.8
+76
+60
+63
+335
+1,495
+1,341
+271
+270
+209
+241
+658
+282
+324
+234
+562
+586
+2,822
+2,898
+3,191
+2,767
+888
+969
+340
+237
+477
+342
+118
+229
+2015
+Corporate bonds
+2014
+€ in millions
+Total
+Germany
+Kingdom
+countries
+Total
+Germany
+Kingdom
+countries
+Plan assets listed in an active market
+Equity securities (stocks)
+18
+Percentages
+22
+2
+Debt securities¹
+46
+47
+Government bonds
+35
+30
+44
+45
+37
+43
+12
+Other
+United
+Other
+Avacon Group
+E.ON Russia Group
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data as of December 31
+E.ON România Group
+The following tables provide a summary overview of cash
+flow and significant line items of the aggregated income
+statements and of the aggregated balance sheets of subsid-
+iaries with material non-controlling interests:
+Subsidiaries with material non-controlling interests are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests
+as required by IFRS 12 for subsidiaries with material non-con-
+trolling interests can be found in the list of shareholdings
+pursuant to Section 313 (2) HGB (see Note 36).
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+5,554
+25
+13,375
+8,033
+5,296
+46
+The actual return on plan assets was a gain of €225 million
+in 2015 (2014: €994 million).
+A small portion of the plan assets consists of financial instru-
+ments of E.ON (2015: €0.2 billion; 2014: €0.4 billion). Because of
+the contractual structure, however, these instruments do not
+constitute an E.ON-specific risk to the CTA in Germany. The
+plan assets further include virtually no owner-occupied real
+estate and no equity or debt instruments issued by E.ON Group
+companies. Each of the individual plan asset components
+has been allocated to an asset class based on its substance.
+The plan assets thus classified break down as shown in the
+following table:
+165
+166 Notes
+Classification of Plan Assets
+December 31, 2015
+December 31, 2014
+United
+2015
+348
+255
+10
+-4
+5
+-9
+2
+2
+Exchange rate differences
+38
+38
+26
+32
+-6
+Changes in scope of consolidation
+Other
+-2
+10
+-164
+-2
+-162
+Net liability as of December 31
+4,208
+3,320
+726
+162
+5,574
+8
+-13
+-27
+-40
+276
+85
+14
+Changes from remeasurements
+-1,349
+-1,471
+149
+-27
+3,253
+2,914
+285
+54
+Employer contributions to plan assets
+-517
+-316
+-197
+-4
+-1,296
+-1,182
+-108
+-6
+Net benefit payments
+-26
+-21
+-5
+4,766
+375
+624
+(25) Miscellaneous Provisions
+2,105
+Supplier-related obligations
+1,085
+186
+554
+208
+Customer-related obligations
+409
+108
+381
+208
+41
+Environmental remediation and similar obligations
+775
+75
+796
+Other
+1,807
+3,693
+2,134
+3,092
+Total
+4,280
+26,445
+76
+1,805
+67
+Other asset retirement obligations
+The following table lists the miscellaneous provisions as of
+4,120
+the dates indicated:
+Miscellaneous Provisions
+€ in millions
+Non-contractual nuclear waste management obligations
+Contractual nuclear waste management obligations
+December 31, 2015
+Current
+Non-current
+Current
+December 31, 2014
+Non-current
+80
+10,902
+155
+10,977
+527
+7,794
+475
+7,162
+Personnel obligations
+229
+1,182
+305
+1,254
+184
+74
+13
+359
+112
+13
+375
+276
+85
+14
+The past service cost for 2015 and 2014 consists mostly of the
+expenses incurred in the context of restructuring measures.
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €89 million in fixed contributions
+to external insurers or similar institutions was paid in 2015
+(2014: €81 million) for pure defined contribution plans.
+Contributions to state plans totaled €0.3 billion (2014:
+€0.3 billion).
+Description of Contributions and Benefit Payments
+Benefit payments to cover defined benefit obligations totaled
+€730 million in 2015 (2014: €708 million); of this amount,
+€26 million (2014: €40 million) was not paid out of plan assets.
+359
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2015, for the next ten years are
+shown in the following table:
+€ in millions
+Total Germany Kingdom
+Other
+countries
+2016
+744
+467
+265
+12
+2017
+754
+476
+Prospective Benefit Payments
+484
+8
+14
+253
+182
+59
+12
+Past service cost
+30
+16
+16
+-2
+30
+23
+12
+-5
+Gains (-) and losses (+) on settlements
+-1
+-1
+Net interest on the net
+defined benefit liability/asset
+Total
+115
+88
+22
+5
+93
+71
+268
+112
+10
+2018
+The recognized net liability from the E.ON Group's defined
+benefit plans results from the difference between the present
+value of the defined benefit obligations and the fair value of
+plan assets:
+Changes in the Net Defined Benefit Liability
+2015
+2014
+United
+€ in millions
+Total
+Germany
+Kingdom
+Other
+countries
+United
+Description of the Net Defined Benefit Liability
+Net liability as of January 1
+4,766
+624
+184
+Total
+3,418
+Germany Kingdom
+Other
+countries
+2,785
+330
+303
+Net periodic pension cost
+484
+5,574
+168 Notes
+167
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 19.7 years as of
+December 31, 2015 (2014: 20.1 years).
+769
+485
+274
+10
+2019
+783
+497
+276
+10
+2020
+801
+509
+282
+10
+2021-2025
+4,229
+2,707
+1,473
+49
+Total
+8,080
+5,141
+2,838
+101
+For the 2016 fiscal year, it is expected that Group-wide employer
+contributions to plan assets will amount to a total of €515 mil-
+lion and primarily involve the funding of new and existing
+benefit obligations, with an amount of €143 million attributable
+to foreign companies.
+In 2015, E.ON made employer contributions to plan assets
+totaling €517 million (2014: €1,296 million) to fund existing
+defined benefit obligations.
+110
+United
+392
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of
+the defined benefit obligations:
+CMI "00" and "S1" series base mortality tables 2015,
+taking into account future changes in mortality
+2005 G versions of the Klaus Heubeck biometric
+tables (2005)
+United
+Kingdom
+Germany
+Actuarial Assumptions (Mortality Tables)
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+Since the second quarter of 2015, the determination of discount
+rates for the euro currency area by reference to the yield curve
+of high-quality corporate bonds was adjusted by applying a
+more precise extrapolation of these corporate-bond yields.
+This change led to an increase of 20 basis points in the dis-
+count rate in Germany as of December 31, 2015. Consequently,
+the corresponding actuarial gain was €369 million. For the
+2016 fiscal year, this will result in a slightly lower net interest
+cost of €3.4 million in Germany.
+The discount rate assumptions used by E.ON basically reflect
+the currency-specific rates available at the end of the respective
+fiscal year for high-quality corporate bonds with a duration
+corresponding to the average period to maturity of the respec-
+tive obligation.
+164 Notes
+163
+Sensitivities
+¹The pension increase rate for Germany applies to eligible individuals not subject
+to an agreed guarantee adjustment.
+2.90
+3.00
+United Kingdom
+2.00
+1.75
+1.75
+Germany¹
+Pension increase rate
+3.40
+3.10
+3.20
+3.10
+Change in the present value of the defined benefit obligations
+December 31, 2015
+December 31, 2014
+-1.73
+1.79
+-25
++25
+-25
+Change in the pension increase rate by (basis points)
+Change in percent
+-0.46
+0.47
+-0.43
+0.44
+-25
++25
+-25
++25
+Change in the wage and salary growth rate by (basis points)
+Change in percent
+8.96
+-7.85
+8.44
+-7.44
+Change in percent
+-50
++50
+-50
++50
+Change in the discount rate by (basis points)
+United Kingdom
+1.86
+2.50
+2.50
+-505
+-2
+-507
+-5
+-2
+-7
+Other
+-8
+368
+360
+363
+Defined benefit obligation as of December 31
+363
+2
+2
+24
+-21
+5
+-16
+Changes in scope of consolidation
+-20
+-244
+-444
+-708
+Exchange rate differences
+17,920
+11,453
+6,280
+Germany
+Wage and salary growth rate
+4.60
+3.70
+3.80
+United Kingdom
+3.90
+2.00
+2.70
+Germany
+Discount rate
+2013
+2014
+2015
+December 31,
+Percentages
+Actuarial Assumptions
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost
+at E.ON's German and U.K. subsidiaries as of the respective
+balance sheet date are as follows:
+The net actuarial gains generated in 2015 are largely attribut-
+able to a general increase in the discount rates used within
+the E.ON Group. This increase was partly offset by the rise in
+the wage and salary growth rates and pension increase rates
+that were used by the Group companies in the United King-
+dom as the basis for measuring the benefit obligation as of
+December 31, 2015.
+The benefit obligations in the other countries relate mostly
+to the benefit plans at the E.ON Group companies in France
+(2015: €116 million; 2014: €134 million).
+230
+5,920
+12,799
+18,949
+187
+2.50
+-7
+-1.79
+Change in percent
+Total
+Germany
+United
+Kingdom
+Other
+countries
+5,296
+46
+11,761
+6,789
+4,596
+376
+Other
+countries
+Interest income on plan assets
+163
+210
+1
+514
+294
+217
+3
+94
+Remeasurements
+-149
+47
+374
+United
+Kingdom
+Germany
+8,033
+13,375
+-10
++10
+-10
+-2.85
+3.18
+-2.96
+3.32
+A 10-percent decrease in mortality would result in a higher
+life expectancy of beneficiaries, depending on the age of each
+individual beneficiary. As of December 31, 2015, the life
+expectancy of a 63-year-old male E.ON retiree would increase
+by approximately one year if mortality were to decrease by
+10 percent.
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+assumptions is changed for the purpose of computing the
+sensitivity of results to changes in that assumption, all other
+actuarial assumptions are included in the computation
+unchanged.
+When considering sensitivities, it must be noted that the
+change in the present value of the defined benefit obligations
+resulting from changing multiple actuarial assumptions
+simultaneously is not necessarily equivalent to the cumulative
+effect of the individual sensitivities.
+Description of Plan Assets and the
+Investment Policy
+The defined benefit plans are funded by plan assets held in
+specially created pension vehicles that legally are distinct
+from the Company. The fair value of these plan assets changed
+as follows:
+Changes in the Fair Value of Plan Assets
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+2015
+2014
+€ in millions
+Total
+Fair value of plan assets as of January 1
+-199
+Change in mortality by (percent)
+3
+185
+-426
+-276
+-2
+-668
+-417
+-244
+-7
+Changes in scope of consolidation
+-12
+-12
+Exchange rate differences
+-704
+325
+334
+Other
+-15
+-15
+-343
+336
+-2
+-343
+Fair value of plan assets
+as of December 31
++10
+325
+Benefit payments
+6
+108
+282
+13
+Return on plan assets recognized in
+equity, not including amounts contained
+in the interest income on plan assets
+-149
+47
+-199
+3
+480
+185
+282
+13
+Employee contributions
+1
+1
+1
+1
+Employer contributions
+517
+316
+197
+4
+1,296
+1,182
+480
+-276
++25
+-730
+46
+25
+5,296
+5,554
+8,033
+8,133
+18,949
+17,920
+230
+187
+5,920
+13,712
+6,280
+11,453
+2014
+2015
+December 31,
+Total
+Other countries
+United Kingdom
+Germany
+Net defined benefit liability/asset (-)
+Total
+Other countries
+12,799
+13,375
+3,320
+4,766
+The plans described in the preceding paragraph generally
+provide for ongoing pension benefits that generally are
+payable upon reaching the age threshold, or in the event of
+disability or death.
+The majority of the reported benefit obligation toward active
+employees is centered on the "BAS Plan," a pension unit system
+launched in 2001, and on a "provision for the future" ("Zukunfts-
+sicherung") plan, a variant of the BAS Plan that emerged
+from the harmonization in 2004 of numerous benefit plans
+granted in the past. In the Zukunftssicherung benefit plan,
+vested final-pay entitlements are considered in addition to
+the defined contribution pension units when determining
+the benefit. These plans are closed to new hires.
+Active employees at the German Group companies are pre-
+dominantly covered by cash balance plans. In addition, some
+final-pay arrangements, and a small number of fixed-amount
+arrangements, still exist under individual contracts.
+Germany
+The features and risks of defined benefit plans are regularly
+shaped by the general legal, tax and regulatory conditions
+prevailing in the respective country. The configurations of the
+major defined benefit and defined contribution plans within
+the E.ON Group are described in the following discussion.
+The existing entitlements under defined benefit plans as of
+the balance sheet date cover about 54,000 retirees and their
+beneficiaries (2014: 54,000), about 17,000 former employees
+with vested entitlements (2014: 15,000) and about 40,000 active
+employees (2014: 42,000). Aside from normal employee turn-
+over, the changes from the previous year also resulted from
+expiring restructuring programs. The corresponding present
+value of the defined benefit obligations is attributable to
+retirees and their beneficiaries in the amount of €10.1 billion
+(2014: €10.4 billion), to former employees with vested entitle-
+ments in the amount of €2.7 billion (2014: €2.6 billion) and to
+active employees in the amount of €5.1 billion (2014: €5.9 billion).
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates,
+as well as inflation and rising wages and salaries. In order to
+avoid exposure to future risks from occupational benefit plans,
+newly designed pension plans were introduced at the major
+German and foreign E.ON Group companies beginning in
+1998. Virtually all employees hired at E.ON Group companies
+after 1998 are now covered by benefit plans for which the
+risk factors can be better calculated and controlled as pre-
+sented below.
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning,
+most active and former E.ON Group employees are also covered
+by occupational benefit plans. Both defined benefit plans and
+defined contribution plans are in place at E.ON. Benefits under
+defined benefit plans are generally paid upon reaching retire-
+ment age, or in the event of disability or death.
+Description of the Benefit Plans
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+-447
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+5,574
+4,210
+Presented as provisions for pensions and similar obligations
+-2
+Presented as operating receivables
+5,574
+4,208
+184
+162
+624
+726
+United Kingdom
+Germany
+Fair value of plan assets
+Total
+1,518
+120
+110
+58
+37
+1,123
+1,168
+1,202
+Sales
+55
+45
+non-controlling interests
+Share of earnings attributable to
+€ in millions
+2014
+2015
+2014
+2015
+2014
+2015
+Avacon Group
+E.ON Russia Group
+E.ON România Group
+Subsidiaries with Material Non-Controlling Interests-Earnings Data
+¹Non-controlling interests in the lead company of the respective group; share of segment in Romania.
+831
+3,148
+The only benefit plan open to new hires is the E.ON IQ contri-
+bution plan (the "IQ Plan"). This plan is a "units of capital"
+system that provides for the alternative payout options of a
+prorated single payment and payments of installments in
+addition to the payment of a regular pension.
+3,144
+Comprehensive income
+Other countries
+United Kingdom
+Germany
+Present value of all defined benefit obligations
+€ in millions
+The present value of the defined benefit obligations, the fair
+value of plan assets and the net defined benefit liability
+(funded status) are presented in the following table for the
+dates indicated:
+not constitute plan assets under IAS 19 but which are mostly
+intended for the coverage of retirement benefit obligations
+at E.ON Group companies in Germany (see Note 31).
+Provisions for Pensions and Similar Obligations
+In addition to the reported plan assets, VKE, which is included
+in the Consolidated Financial Statements, administers another
+fund holding assets of €1.1 billion (2014: €1.0 billion) that do
+The retirement benefit obligations toward the active and
+former employees of the E.ON Group, which amounted to
+€17.9 billion, were covered by plan assets having a fair value
+of €13.7 billion as of December 31, 2015. This corresponds to
+a funded status of 77 percent.
+(24) Provisions for Pensions and Similar
+Obligations
+160 Notes
+159
+There are no major restrictions beyond those under custom-
+ary corporate or contractual provisions. Foreign-exchange
+transactions out of the Russian Federation may be restricted
+in certain cases.
+302
+270
+-1,509
+306
+271
+355
+15
+-271
+126
+110
+121
+115
+Net income/loss
+161
+Strategy and Objectives
+The benefit expense for all the cash balance plans mentioned
+above is dependent on compensation and is determined at
+different percentage rates based on the ratio between compen-
+sation and the contribution limit in the statutory retirement
+pension system in Germany. Employees can additionally choose
+to defer compensation. The cash balance plans contain dif-
+ferent interest rate assumptions for the pension units. Whereas
+fixed interest rate assumptions apply for both the BAS Plan
+and the Zukunftssicherung plan, the units of capital for the
+open IQ Plan earn interest at the average yield of long-term
+government bonds of the Federal Republic of Germany
+observed in the fiscal year. Future pension increases at a rate
+of 1 percent are guaranteed for a large number of active
+employees. For the remaining eligible individuals, pensions
+are adjusted mostly in line with the rate of inflation, usually
+in a three-year cycle.
+9,574
+United
+Germany Kingdom
+4,926
+Other
+countries
+679
+Employer service cost
+339
+255
+74
+10
+15,179
+253
+59
+12
+Past service cost
+30
+16
+16
+-2
+30
+23
+12
+182
+-5
+230
+countries
+Other Countries
+The remaining pension obligations are spread across various
+international activities of the E.ON Group.
+However, these benefit plans in Belgium, France, Russia,
+Sweden, Romania, the Czech Republic and the United States
+are of minor significance from a Group perspective.
+Description of the Benefit Obligation
+The following table shows the changes in the present value
+of the defined benefit obligations for the periods indicated:
+Changes in the Defined Benefit Obligation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Total
+Combined Group Management Report
+Tables and Explanations
+2015
+2014
+€ in millions
+Total
+Defined benefit obligation as of January 1
+18,949
+12,799
+United
+Germany Kingdom
+5,920
+Other
+Consolidated Financial Statements
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding condi-
+tions be performed every three years. The actuarial assumptions
+underlying the valuation are agreed upon by the trustees
+and E.ON UK plc. They include presumed life expectancy, wage
+and salary growth rates, investment returns, inflationary
+assumptions and interest rate levels. The most recent technical
+valuation took place as of March 31, 2010, and resulted in a
+technical funding deficit of £446 million. The agreed deficit
+repair plan provides for annual payments of £34 million to
+the pension trust. The revaluation of the technical funded sta-
+tus scheduled for 2013 was carried forward to the effective
+date of March 31, 2015, and replaces the revaluation planned
+for 2016. This revaluation is not yet complete as of the balance
+sheet date.
+Gains (-) and losses (+) on settlements
+-1
+-1,380
+-7
+-14
+3,794
+3,143
+579
+72
+Actuarial gains (-)/losses (+) arising from
+experience adjustments
+1
+-44
+-1,401
+55
+-47
+-44
+3
+-6
+Employee contributions
+1
+1
+1
+1
+Benefit payments
+-10
+-1
+1
+-14
+Interest cost on the present value of the
+defined benefit obligations
+Remeasurements
+489
+251
+232
+162 Notes
+607
+365
+231
+11
+-15
+-1,498
+-50
+-24
+3,733
+3,099
+567
+67
+16
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+Actuarial gains (-)/losses (+) arising from
+changes in financial assumptions
+-98
+-98
+-1,424
+Separate pension trusts were established for Uniper employ-
+ees in the context of the planned Uniper spin-off. Uniper
+employees have until the end of January 2016 to choose
+whether to have the entitlements they earned through Sep-
+tember 30, 2015, transferred to these new trusts or whether
+to keep them in the existing pension trust.
+6
+Benefit payments to the beneficiaries of the currently existing
+defined benefit pension plans are adjusted for inflation as
+measured by the U.K. Retail Price Index ("RPI").
+To fund the pension plans for the German Group companies,
+plan assets were established in the form of Contractual Trust
+Arrangements ("CTAS"). The major part of these plan assets is
+administered by E.ON Pension Trust e.V. as trustee in accordance
+with specified investment principles. In preparation for the
+planned spin-off of Uniper, an additional CTA was established
+whose plan assets are administered by Uniper Pension Trust e.V.
+as trustee in accordance with specified investment principles.
+Existing plan assets intended for the coverage of the benefit
+obligations of German Uniper companies were transferred out
+of the E.ON CTA and into the Uniper CTA. Additional domestic
+plan assets are managed by smaller German pension funds.
+The long-term investments and liquid funds administered by
+VKE do not constitute plan assets under IAS 19, but are almost
+exclusively intended for the coverage of benefit obligations
+at German E.ON Group companies.
+United Kingdom
+Only at the pension funds and at VKE do regulatory provisions
+exist in relation to capital investment or funding requirements.
+Plan assets in the United Kingdom are administered in a pen-
+sion trust. The trustees are selected by the members of the plan
+or appointed by the entity. In that capacity, the trustees are
+particularly responsible for the investment of the plan assets.
+offered a defined contribution plan. Aside from the payment
+of contributions, this plan entails no additional actuarial risks
+for the employer.
+In the United Kingdom, there are various pension plans. Until
+2005 and 2008, respectively, employees were covered by defined
+benefit plans, which for the most part were final-pay plans
+and make up the majority of the pension obligations currently
+reported for the United Kingdom. These plans were closed to
+employees hired after these dates. Since then, new hires are
+In accordance with Swedish law, the companies of the Swedish
+generation unit and their parent company have issued guar-
+antees to governmental authorities. The guarantees were issued
+to cover possible additional costs related to the disposal of
+high-level radioactive waste and to the decommissioning of
+nuclear power plants. These costs could arise if actual costs
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a
+Solidarity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement dated
+March 25, April 18, April 28, and June 1, 2011. If an accident
+occurs, the Solidarity Agreement calls for the nuclear power
+plant operator liable for the damages to receive-after the
+operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement,
+E.ON Energie's share of the liability coverage on December 31,
+2015, remained unchanged from 2014 at 42.0 percent plus
+an additional 5.0 percent charge for the administrative costs
+of processing damage claims. Sufficient liquidity has been
+provided for within the liquidity plan.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The insti-
+tution Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts
+("Nuklear Haftpflicht GbR") now only covers costs between
+€0.5 million and €15 million for claims related to officially
+ordered evacuation measures. Group companies have agreed
+to place their subsidiaries operating nuclear power plants
+in a position to maintain a level of liquidity that will enable
+them at all times to meet their obligations as members of
+the Nuklear Haftpflicht GbR, in proportion to their sharehold-
+ings in nuclear power plants.
+The guarantees of E.ON also include items related to the oper-
+ation of nuclear power plants. With the entry into force of
+the German Nuclear Energy Act ("Atomgesetz" or "AtG"), as
+amended, and of the ordinance regulating the provision for
+coverage under the Atomgesetz ("Atomrechtliche Deckungs-
+vorsorge-Verordnung" or "AtDeckV") of April 27, 2002, as
+amended, German nuclear power plant operators are required
+to provide nuclear accident liability coverage of up to €2.5 bil-
+lion per incident.
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+In addition, E.ON has also entered into indemnification agree-
+ments. Along with other guarantees, these indemnification
+agreements are incorporated in agreements entered into by
+Group companies concerning the disposal of shareholdings
+and, above all, cover the customary representations and war-
+ranties, as well as environmental damage and tax contingen-
+cies. In some cases, obligations are covered in the first instance
+by provisions of the disposed companies before E.ON itself is
+required to make any payments. Guarantees issued by compa-
+nies that were later sold by E.ON SE (or VEBA AG and VIAG AG
+before their merger) are usually included in the respective
+final sales contracts in the form of indemnities.
+E.ON has issued direct and indirect guarantees to third parties,
+which require E.ON to make contingent payments based on
+the occurrence of certain events. These consist primarily of
+financial guarantees and warranties.
+The fair value of the E.ON Group's contingent liabilities arising
+from existing contingencies was €16 million as of Decem-
+ber 31, 2015 (2014: €48 million). E.ON currently does not have
+reimbursement rights relating to the contingent liabilities
+disclosed.
+Contingencies
+As part of its business activities, E.ON is subject to contingen-
+cies and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees, obli-
+gations from litigation and claims (as discussed in more
+detail in Note 28), short- and long-term contractual, legal and
+other obligations and commitments.
+(27) Contingencies and Other Financial Obligations
+176 Notes
+CEO Letter
+of counterparty obligations to acquire additional shares in
+already consolidated subsidiaries, in the amount of €260 million
+(2014: €311 million), as well as non-controlling interests in
+fully consolidated partnerships with legal structures that give
+their shareholders a statutory right of withdrawal combined
+with a compensation claim, in the amount of €426 million
+(2014: €452 million).
+Other operating liabilities consist primarily of accruals in the
+amount of €8,389 million (2014: €9,661 million) and interest
+payable in the amount of €571 million (2014: €594 million).
+Also included in other operating liabilities are carryforwards
+Construction grants of €2,035 million (2014: €2,073 million)
+were paid by customers for the cost of new gas and electricity
+connections in accordance with the generally binding terms
+governing such new connections. These grants are customary
+in the industry, generally non-refundable and recognized
+as revenue according to the useful lives of the related assets.
+19,667
+17,742
+16,621
+2,910
+2,876
+905
+175
+Report of the Supervisory Board
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+1,555
+1,506
+795
+697
+Due in more than 5 years
+Total
+539
+550
+221
+259
+Minimum lease payments
+2014
+2015
+E.ON as Lessee-Operating Leases
+€ in millions
+Due within 1 year
+Additional financial obligations arose from rental and tenancy
+agreements and from operating leases. The corresponding
+minimum lease payments are due as broken down in the
+table below:
+particularly at the Generation, Renewables, Global Commodi-
+ties, Germany, Russia and Sweden units. On December 31, 2015,
+the obligations for new power plant construction reported
+under these purchase commitments totaled €1.3 billion. They
+also include the obligations relating to the construction of
+wind power plants.
+As of December 31, 2015, purchase commitments for invest-
+ments in intangible assets and in property, plant and equip-
+ment amounted to €2.7 billion (2014: €1.7 billion). Of these
+commitments, €1.3 billion are due within one year. This total
+mainly includes financial obligations for as yet outstanding
+investments in connection with new power plant construction
+projects and the expansion and modernization of existing
+generation assets, as well as with gas infrastructure projects,
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are
+other mostly long-term financial obligations arising mainly
+from contracts entered into with third parties, or on the basis
+of legal requirements.
+Other Financial Obligations
+The Generation global unit operates nuclear power plants
+only in Germany and Sweden. Accordingly, there are no addi-
+tional contingencies comparable to those mentioned above.
+In Sweden, owners of nuclear facilities are liable for damages
+resulting from accidents occurring in those nuclear facilities
+and for accidents involving any radioactive substances con-
+nected to the operation of those facilities. The liability per
+incident as of December 31, 2015, was limited to SEK 3,475 mil-
+lion, or €378 million (2014: SEK 3,394 million, or €361 million).
+This amount must be insured according to the Law Concerning
+Nuclear Liability. The necessary insurance for the affected
+nuclear power plants has been purchased. On July 1, 2010, the
+Swedish Parliament passed a law that requires the operator
+of a nuclear power plant in operation to have liability insurance
+or other financial security in an amount equivalent to €1.2 bil-
+lion per facility. As of December 31, 2015, the conditions enabling
+this law to take effect were not yet in place.
+exceed accumulated funds. In addition, the companies of the
+Swedish generation unit and their parent company are also
+responsible for any costs related to the disposal of low-level
+radioactive waste.
+609
+14,562
+Combined Group Management Report
+E.ON Stock
+191
+306
+Due in 1 to 5 years
+2015
+2014
+2015
+2014
+2015
+E.ON Group
+Consolidation
+Other EU Countries
+2014
+2015
+2014
+2014
+Germany
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+2015
+Exploration & Production
+Capital expenditure grants of €408 million (2014: €381 million)
+were paid primarily by customers for capital expenditures
+made on their behalf, while the E.ON Group retains owner-
+ship of the assets. The grants are non-refundable and are
+recognized in other operating income over the period of the
+depreciable lives of the related assets.
+Trade payables totaled €2,375 million as of December 31, 2015
+(2014: €2,185 million).
+Trade Payables and Other Operating Liabilities
+Group Management/
+13,750
+14,280
+13,750
+344
+53
+98
+58
+63
+813
+827
+98
+88
+1
+22
+220
+246
+1,263
+289
+937
+115
+137
+4
+28
+35
+4
+401
+401
+14,280
+124
+The expenses reported in the income statement for such con-
+tracts amounted to €211 million (2014: €210 million). They
+include contingent rents that were expensed when they arose
+in 2015.
+177
+Gas is usually procured on the basis of long-term purchase
+contracts with large international producers of natural gas.
+Such contracts are generally of a "take-or-pay" nature. The
+prices paid for natural gas are tied to the prices of competing
+energy sources or market reference prices, as dictated by
+market conditions. The conditions of these long-term contracts
+are reviewed at certain specific intervals (usually every three
+years) as part of contract negotiations and may thus change
+566
+19
+-315
+38
+310
+6,578
+thereof Germany
+8,321
+634
+19
+-384
+49
+342
+24
+7,637
+management obligations
+Contractual nuclear waste
+1,204
+9,778
+-619
+-19
+-58
+16
+7,196
+thereof Sweden
+1,059
+24
+Among other things, financial liabilities to financial institu-
+tions include collateral received, measured at a fair value of
+€115 million (2014: €142 million). This collateral relates to
+amounts pledged by banks to limit the utilization of credit lines
+in connection with the fair value measurement of derivative
+transactions. The other financial liabilities include promissory
+notes in the amount of €375 million (2014: €638 million) and
+financial guarantees totaling €8 million (2014: €11 million).
+Additionally included in this line item are margin deposits
+received in connection with forward transactions on futures
+exchanges in the amount of €525 million (2014: €153 million),
+as well as collateral received in connection with goods and
+services in the amount of €18 million (2014: €22 million). E.ON
+can use this collateral without restriction.
+56
+35
+33
+-517
+36
+2,146
+obligations
+Other asset retirement
+1,411
+-65
+10,982
+6
+263
+-3
+18
+1
+1,559
+Personnel obligations
+1,125
+68
+-69
+11
+32
+-368
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2015, relate primarily to the
+purchase of fossil fuels such as natural gas, lignite and hard
+coal. Financial obligations under these purchase contracts
+amounted to approximately €220.9 billion on December 31, 2015
+(€7.7 billion due within one year).
+-619
+-58
+in
+Exchange
+169
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Changes Effects of
+counts /
+Unwind-
+ing of dis-
+Non-contractual nuclear
+The entire sector is involved in a multitude of court proceed-
+ings throughout Germany in the matter of price-adjustment
+clauses in the retail electricity and gas supply business with
+high-volume customers. These proceedings also include
+actions for the restitution of amounts collected through price
+increases imposed using price-adjustment clauses determined
+to be invalid. In a judgment delivered in October 2014, the
+European Court of Justice ruled that Germany's Basic Supply
+Ordinances for Power and Gas do not comply with the relevant
+European directives. The German Federal Court of Justice
+has issued numerous rulings on the legal consequences of
+this violation for German law. More rulings relating to this
+matter are expected in 2016. Although no companies of the
+A number of different court actions (including product liability
+claims, price adjustments and allegations of price fixing),
+governmental investigations and proceedings, and other claims
+are currently pending or may be instituted or asserted in
+the future against companies of the E.ON Group. This in partic-
+ular includes legal actions and proceedings on contract
+amendments and price adjustments initiated in response to
+market upheavals and the changed economic situation in
+the gas and electricity sectors (also as a consequence of the
+energy transition) concerning price increases, alleged price-
+fixing agreements and anticompetitive practices. Legal action
+is also pending in the nuclear power segment, centered on
+the new Repository Site Selection Act and the nuclear-power
+moratorium in Germany.
+(28) Litigation and Claims
+Aside from the preceding, further financial obligations in place
+as of December 31, 2015, totaled approximately €2.9 billion
+(€1.2 billion due within one year). They include, among other
+things, financial obligations from services to be procured and
+obligations concerning the acquisition of real estate funds held
+as financial assets, as well as corporate actions.
+Other purchase commitments as of December 31, 2015,
+amounted to approximately €6.4 billion (€0.4 billion due within
+one year). In addition to purchase commitments primarily
+for heat and alternative fuels, there are long-term contractual
+obligations in place at the Generation unit for the purchase
+of nuclear fuel elements and of services relating to the interim
+and final storage of nuclear fuel elements.
+a profit margin that is generally calculated on the basis of
+an agreed return on capital.
+As of December 31, 2015, €3.4 billion in contractual obligations
+(€1.5 billion due within one year) are in place for the purchase
+of electricity; these relate in part to purchases from jointly
+operated power plants in the Generation and Renewables units.
+The purchase price of electricity from jointly operated power
+plants is generally based on the supplier's production cost plus
+accordingly. In the absence of an agreement on a pricing
+review, a neutral board of arbitration makes a final binding
+decision. Financial obligations arising from these contracts are
+calculated based on the same principles that govern internal
+budgeting. Furthermore, the take-or-pay conditions in the indi-
+vidual contracts are also considered in the calculations. The
+decrease compared with December 31, 2014, in contractual
+obligations for the purchase of fossil fuels is primarily attribut-
+able to a price-related reduction of the minimum purchase
+requirement for gas procurement.
+178 Notes
+changes
+Jan. 1,
+2015
+rate
+differ-
+ences
+€ in millions
+16
+661
+34
+27
+1,143
+thereof Sweden
+469
+9,989
+thereof Germany
+503
+-19
+27
+obligations
+waste management
+2015
+Reversals estimates
+Dec. 31,
+Changes
+in
+Reclassifi-
+cations
+Utiliza-
+tion
+Additions
+in dis-
+count
+rates
+scope of
+consoli-
+dation
+11,132
+616
+10,779
+495
+Provisions for Other Asset Retirement Obligations
+The provisions for other asset retirement obligations consist
+of obligations for conventional and renewable-energy power
+plants, including the conventional plant components in the
+nuclear power segment, that are based on legally binding civil
+agreements and public regulations. Also reported here are
+provisions for environmental improvements at gas storage
+facilities, for the dismantling of installed infrastructure and
+for environmental-improvement obligations in the Explora-
+tion & Production segment.
+Supplier-Related Obligations
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Provisions for customer-related obligations consist primarily
+of potential losses on rebates and on open sales contracts.
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, in-kind obligations, restructuring and other
+deferred personnel costs.
+Environmental Remediation and Similar Obligations
+Other
+The other miscellaneous provisions consist primarily of provi-
+sions from the electricity and gas business. Further included
+here are provisions for potential obligations arising from tax-
+related interest expenses and from taxes other than income
+taxes.
+171
+172 Notes
+(26) Liabilities
+The following table provides a breakdown of liabilities:
+Liabilities
+Provisions for environmental remediation refer primarily to
+redevelopment and water protection measures and to the
+rehabilitation of contaminated sites. Also included here are
+provisions for other environmental improvement measures
+and for land reclamation obligations at mining sites.
+Personnel Obligations
+The advance payments made in 2015 in the amount of
+€1,319 million (2014: €1,286 million) include €648 million (2014:
+651 million) in advance payments for the Gorleben final-stor-
+age project through 2012 and €31 million (2014: €16 million)
+in cost allocations under the StandAG, as well as €504 million
+(2014: €458 million) for the Schacht Konrad final storage site.
+E.ON is taking legal action against these advance-payment
+and cost-allocation orders.
+The aforementioned amounts are based on the cost estimates
+and real interest rates applied by E.ON (2015: 0.9 percent,
+2014: 0.7 percent), but the data derived for 2015 also draw on
+findings from the stress test. The higher real interest rate is
+the result of having developed a firmer decommissioning
+strategy for the German nuclear power plants. This required
+a reassessment of the cost increase rates to be applied.
+Final storage facilities for high active waste
+Total
+December 31,
+2015
+2014
+7,857
+8,116
+2,902
+2,519
+2,205
+1,804
+1,363
+1,369
+2,647
+2,759
+16,974
+16,567
+December 31, 2015
+Schacht Konrad final storage facility
+December 31, 2014
+Current
+15
+366
+381
+Construction grants from energy consumers
+232
+1,803
+2,035
+408
+217
+2,073
+Liabilities from derivatives
+4,786
+15,565
+9,908
+3,868
+13,776
+1,856
+386
+22
+Capital expenditure grants
+Non-current
+Total
+Current
+Non-current
+Total
+Financial liabilities
+2,788
+14,954
+17,742
+3,883
+15,784
+19,667
+Trade payables
+2,375
+2,375
+2,185
+2,185
+€ in millions
+Advance payments
+Interim storage
+Retirement and decomissioning
+517
+Environmental remedia-
+tion and similar
+obligations
+Other
+Total
+871
+-82
+1
+60
+-55
+-34
+851
+5,226
+44
+172
+8
+-3
+-66
+77
+Changes in Miscellaneous Provisions
+201
+1,872
+Supplier-related
+obligations
+762
+2
+742
+-211
+I
+-24
+1,271
+Customer-related
+obligations
+589
+1
+1
+32
+Containers, transports, operational waste, other
+2,273
+133
+Changes in estimates reduced provisions in 2015 by €619 million
+(2014: provisions increased by €374 million) at the German
+operations. Provisions were utilized in the amount of €58 million
+(2014: €59 million), of which €25 million (2014: €24 million)
+relates to nuclear power plants that are being dismantled or
+are in shutdown mode, on the basis of issues for which retire-
+ment and decommissioning costs had been capitalized. As in
+2014, there were no changes in estimates affecting provisions
+at the Swedish operations in 2015, and no provisions were
+utilized.
+Provisions for Contractual Nuclear Waste Manage-
+ment Obligations
+The total of €8.3 billion in provisions based on German and
+Swedish nuclear power legislation comprise all those contrac-
+tual nuclear obligations relating to the disposal of spent nuclear
+fuel rods and low-level nuclear waste and to the retirement
+and decommissioning of nuclear power plant components that
+are measured at amounts firmly specified in legally binding
+civil agreements.
+The provisions are classified primarily as non-current provisions
+and measured at their settlement amounts, discounted to the
+balance sheet date.
+Advance payments made to other waste management com-
+panies in the amount of €136 million (2014: €161 million) have
+been deducted from the provisions attributed to Germany.
+The advance payments relate to the delivery of interim storage
+containers.
+Concerning the disposal of spent nuclear fuel rods, the obli-
+gations recognized in the provisions comprise the contractual
+costs of finalizing reprocessing and the associated return
+of waste with subsequent interim storage at Gorleben and
+Ahaus, as well as costs incurred for interim on-site storage,
+including the necessary interim storage containers, arising
+from the "direct permanent storage" path. The provisions also
+include the contractual costs of decommissioning and the
+conditioning of low-level radioactive waste.
+Changes in estimates increased provisions in 2015 by €566 mil-
+lion (2014: €6 million) at the German operations. Provisions
+were utilized in the amount of €315 million (2014: €419 million),
+of which €221 million (2014: €287 million) relates to nuclear
+power plants that are being dismantled or are in shutdown
+mode, on the basis of issues for which retirement and decom-
+missioning costs had been capitalized. The Swedish opera-
+tions recorded an increase in provisions of €68 million (2014:
+€20 million) resulting from changes in estimates. Provisions
+were utilized in the amount of €69 million (2014: €61 million),
+of which €27 million (2014: €39 million) is attributable to the
+Barsebäck nuclear power plant, which is in post-operation.
+Retirement and decommissioning costs had already been
+capitalized for the underlying issues.
+The cost estimates used to determine the provision amounts
+are all based on studies and analyses performed by external
+specialists and are updated annually. The amendments to the
+German Nuclear Energy Act of August 6, 2011, were taken into
+account in the measurement of the provisions in Germany.
+CEO Letter
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+In 2015, the German Ministry of Economic Affairs and Energy
+commissioned stress tests on the nuclear-energy provisions
+of the country's nuclear operators. Included in the stress tests
+were assessments of whether the provisions fully cover the
+tasks and cost elements on which the operators had based
+them and whether the provision amounts reconcile with
+reference values correctly calculated based on the real dis-
+count rate, as well as a finding on the grouping of the assets
+in the form of an overview. Applying the classification used
+in the stress test report, the nuclear waste management obli-
+gations in Germany break down as follows:
+Nuclear Waste Management Obligations in Germany by Technical Cost Element (Less Advance Payments)
+€ in millions
+Report of the Supervisory Board
+Included furthermore are the costs of final storage of nuclear
+waste. Final storage costs consist particularly of the expected
+investment, operating and decommissioning costs for the
+final storage projects Gorleben and Konrad and are based on
+data from the German Federal Office for Radiation Protection
+and on Germany's ordinance on advance payments for the
+establishment of facilities for the safe custody and final storage
+of radioactive wastes in the country ("Endlagervorausleistungs-
+verordnung"); additional costs arise from the German legisla-
+tion governing the selection of a repository site for high-level
+radioactive waste ("Standortauswahlgesetz" or "StandAG"),
+which took effect in 2013. Advance payments remitted to the
+Federal Office for Radiation Protection and the Federal Office
+for the Regulation of Nuclear Waste Management in the
+amount of €1,183 million (2014: €1,125 million) have been
+deducted from the provisions. These payments are made each
+year based on the amount spent by the two aforementioned
+Federal Offices.
+Additionally included in the disposal of spent nuclear fuel rods
+are costs for transports to the final storage facility and the
+cost of proper conditioning prior to final storage, including
+the necessary containers.
+The asset retirement obligations recognized for non-contrac-
+tual nuclear obligations include the anticipated costs of post-
+and service operation of the facility, dismantling costs, and
+the cost of removal and disposal of the nuclear components
+of the nuclear power plant.
+-326
+918
+3,515
+-1,550
+-2,745
+-42
+-655
+5,500
+-39
+-869
+216
+30,725
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 9).
+As of December 31, 2015, the real interest rates applied for
+the nuclear power segment, calculated on a country-specific
+basis, were 0.9 percent (2014: 0.7 percent) in Germany and
+3.0 percent (2014: 3.0 percent) in Sweden. The underlying nomi-
+nal discount rates were 4.4 percent (2014: 4.7 percent) in
+Germany and 5.0 percent (2014: 5.0 percent) in Sweden. The
+other provision items relate almost entirely to issues in coun-
+tries of the euro area, as well as in the U.K. and Sweden. The
+nominal interest rates used with regard to these issues ranged
+from 0 percent to 2.53 percent, depending on maturity (2014:
+0 percent to 2.6 percent).
+Provisions for Non-Contractual Nuclear Waste
+Management Obligations
+The total of €11.0 billion in provisions based on German and
+Swedish nuclear power legislation comprise all those nuclear
+obligations relating to the disposal of spent nuclear fuel rods
+and low-level nuclear waste and to the retirement and decom-
+missioning of nuclear power plant components that are deter-
+mined on the basis of external studies and cost estimates.
+170 Notes
+The provisions are classified primarily as non-current provisions
+and measured at their settlement amounts, discounted to
+the balance sheet date.
+29,922
+141
+203
+344
+Due
+in 2019
+2020 and
+Due
+2026
+after 2026
+December 31, 2015
+14,011
+Due
+in 2018
+1,238
+1,986
+1,282
+1,939
+4,897
+December 31, 2014
+14,703
+1,118
+2,669
+in 2017
+in 2016
+in 2015
+Jan 2039
+6.750%
+¹Listing: All bonds are listed in Luxembourg with the exception of the two Rule 144A/Regulation S USD bonds, which are unlisted.
+2After early redemption, the volume of this issue was lowered from originally EUR 1,500 million to approx. EUR 1,238 million.
+3After early redemption, the volume of this issue was lowered from originally EUR 2,375 million to approx. EUR 1,769 million.
+"Rule 144A/Regulation S bond.
+5The volume of this issue was raised from originally GBP 600 million to GBP 850 million.
+6The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.
+'The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+Additionally outstanding as of December 31, 2015, were private
+placements with a total volume of approximately €0.9 billion
+(2014: €0.9 billion), as well as promissory notes with a total
+volume of approximately €0.4 billion (2014: €0.6 billion).
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 bil-
+lion allows E.ON SE and EIF (under the unconditional guaran-
+tee of E.ON SE) to issue from time to time commercial paper
+with maturities of up to two years less one day to investors.
+The U.S. commercial paper program in the amount of $10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to 366 days and extendible notes with
+original maturities of up to 397 days (and a subsequent exten-
+sion option for the investor) to investors. As of December 31,
+2015, no commercial paper was outstanding under either the
+euro commercial paper program (2014: €401 million) or the
+U.S. commercial paper program (2014: €0 million).
+€5 Billion Syndicated Revolving Credit Facility
+Effective November 6, 2013, E.ON arranged a syndicated
+revolving credit facility of €5 billion over an original term of
+five years, with two renewal options for one year each. In
+2014, E.ON exercised the first option and extended the term
+of the credit facility by one year through 2019. In 2015, E.ON,
+with the consent of the banks, postponed its right to exercise
+the second term-extension option by one year, to 2016. The
+facility has not been drawn on; rather, it serves as the Group's
+long-term liquidity reserve, one purpose of which is to func-
+tion as a backup facility for the commercial paper programs.
+173
+174 Notes
+The bonds issued by E.ON SE and those issued by EIF and E.ON
+Beteiligungen GmbH (respectively guaranteed by E.ON SE)
+have the maturities presented in the table below. Liabilities
+denominated in foreign currency include the effects of eco-
+nomic hedges, and the amounts shown here may therefore
+vary from the amounts presented on the balance sheet.
+Bonds Issued by E.ON SE, E.ON International Finance B.V. and E.ON Beteiligungen GmbH
+Due
+between
+Due
+Due
+Due
+€ in millions
+Total
+1,238
+30 years
+2,669
+1,267
+84
+Liabilities from finance leases
+18
+37
+453
+457
+Other financial liabilities
+Financial liabilities
+75
+1,202
+377
+411
+527
+159
+1,280
+1,434
+452
+1,324
+73
+60
+Bank loans/Liabilities to banks
+1,939
+4,676
+Financial Liabilities by Segment
+The following table breaks down the financial liabilities by
+segment:
+Financial Liabilities by Segment as of December 31
+€ in millions
+Generation
+Renewables
+Global Commodities
+2015
+2014
+2015
+2014
+2015
+2014
+Bonds
+Commercial paper
+1,796
+GBP 700 million
+6.650%
+Apr 2038
+28,498
+23,588
+52,086
+Financial Liabilities
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+Group Management
+Covenants
+The financing activities of E.ON SE, E.ON International Finance
+B.V. ("EIF"), Rotterdam, The Netherlands, and E.ON Beteiligun-
+gen GmbH involve the use of covenants consisting primarily
+of change-of-control clauses, negative pledges, pari-passu
+50,899
+clauses and cross-default clauses, each referring to a restricted
+set of significant circumstances. Financial covenants (that is,
+covenants linked to financial ratios) are not employed.
+E.ON SE and EIF have in place a Debt Issuance Program
+enabling the issuance from time to time of debt instruments
+through public and private placements to investors. The total
+amount available under the program is €35 billion. The program
+was extended in April 2015 for another year as planned.
+At year-end 2015, the following EIF bonds were outstanding:
+Major Bond Issues of E.ON International Finance B.V.¹
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+€35 Billion Debt Issuance Program
+23,300
+27,599
+Total
+245
+252
+497
+Other operating liabilities
+11,262
+1,168
+12,430
+12,045
+1,462
+13,507
+Trade payables and other operating liabilities
+24,811
+8,346
+33,157
+24,615
+7,804
+32,419
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Volume in the
+12 years
+Oct 2019
+6.000%
+EUR 1,400 million
+12 years
+May 2020
+5.750%
+GBP 975 million
+30 years
+June 2032
+6.375%
+GBP 900 million
+30 years
+Oct 2037
+5.875%
+USD 1,000 million4
+30 years
+GBP 850 million5
+980
+5.800%
+10 years
+respective currency
+Initial term
+Repayment
+Coupon
+EUR 1,238 million²
+7 years
+Jan 2016
+5.500%
+EUR 900 million
+15 years
+May 2017
+6.375%
+EUR 1,769 million³
+10 years
+Oct 2017
+5.500%
+USD 2,000 million4
+Apr 2018
+The changes in the miscellaneous provisions are shown in
+the table below:
+-53
+-9
+using mar-
+3,191
+Afs
+3,191
+3,191
+832
+5,761
+6,593
+Afs
+6,593
+6,593
+1,468
+LaR
+1,468
+2,742
+3,143
+48
+1,064
+1,064
+19,667
+8,965
+16,365
+43,562
+43,269
+51,358
+104
+21
+125
+Afs
+125
+5,770
+1,064
+1,064
+Afs
+370
+19,222
+370
+370
+11,800
+11,800
+Trade receivables
+7,115
+6,157
+26,984
+26,984
+28,258
+Trade receivables and other operating assets
+3,387
+LaR
+3,094
+4,264
+Other financial receivables and financial assets
+546
+LaR
+n/a
+11,800
+13,258
+458
+Bonds
+Financial liabilities
+Total assets
+Assets held for sale
+Restricted cash
+Cash and cash equivalents
+Securities and fixed-term deposits
+Other operating assets
+Derivatives with hedging relationships
+6,745
+6,157
+13,346
+HFT
+13,346
+Derivatives with no hedging relationships
+23,213
+18,824
+1,664
+Put option liabilities under IAS 322
+1,444
+1,444
+n/a
+1,444
+829
+Derivatives with hedging relationships
+6,097
+6,187
+12,332
+HFT
+12,332
+12,947
+Derivatives with no hedging relationships
+2,185
+764
+AmC
+764
+764
+value measurement was not applied in the case of share-
+holdings with a carrying amount of €62 million (2014: €49 mil-
+lion) as cash flows could not be determined reliably for them.
+Fair values could not be derived on the basis of comparable
+transactions. The shareholdings are not material by comparison
+with the overall position of the Group.
+The fair value of shareholdings in unlisted companies and
+of debt instruments that are not actively traded, such as
+loans received, loans granted and financial liabilities, is deter-
+mined by discounting future cash flows. Any necessary
+discounting takes place using current market interest rates
+over the remaining terms of the financial instruments. Fair
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined
+using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair value and the fair values of the two
+hierarchy levels listed.
+9,205
+25,011
+50,364
+46,373
+52,086
+Total liabilities
+10,426
+AmC
+10,426
+15,694
+Other operating liabilities
+AmC
+99
+2,185
+Trade payables
+AmC
+1,263
+1,263
+Bank loans/Liabilities to banks
+401
+401
+AmC
+401
+401
+Commercial paper
+17,997
+17,997
+AmC
+14,280
+14,280
+1,263
+2,185
+1,263
+813
+7,541
+6,187
+27,151
+27,151
+32,419
+Trade payables and other operating liabilities
+827
+2,256
+AmC
+2,465
+2,910
+Other financial liabilities
+1,296
+n/a
+813
+Liabilities from finance leases
+645
+n/a
+645
+289
+Bank loans/Liabilities to banks
+AmC
+16,655
+16,655
+AmC
+289
+OCI-Commodity cash flow hedges
+2Prior-year figures have been reallocated in line with a required risk classification adjustment.
+Gains and losses from reclassification are generally reported in
+that line item of the income statement which also includes
+the respective hedged transaction. Gains and losses from the
+ineffective portions of cash flow hedges are classified as
+other operating income or other operating expenses. Interest
+cash flow hedges are reported under "Interest and similar
+expenses." The fair values of the designated derivatives in cash
+flow hedges totaled -€574 million (2014: -€974 million).
+A gain of €499 million (2014: €55 million loss) was posted to
+other comprehensive income in 2015. In the same period,
+a loss of €348 million (2014: €663 million loss) was reclassified
+from OCI to the income statement.
+181
+182 Notes
+Net Investment Hedges
+1OCI Other comprehensive income. Figures are pre-tax.
+AmC
+289
+289
+5,985
+28,317
+33,157
+Trade payables and other operating liabilities
+544
+1,971
+AmC
+1,971
+2,876
+Other financial liabilities
+1,201
+n/a
+827
+827
+Liabilities from finance leases
+The Company uses foreign currency loans, foreign currency
+forwards and foreign currency swaps to protect the value of
+its net investments in its foreign operations denominated
+in foreign currency. For the year ended December 31, 2015, the
+Company recorded an amount of €746 million (2014: €269 mil-
+lion) in accumulated other comprehensive income due to
+changes in fair value of derivatives and to currency translation
+results of non-derivative hedging instruments. As in 2014, no
+ineffectiveness resulted from net investment hedges in 2015.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive
+to movements in underlying market rates and other relevant
+variables. The Company assesses and monitors the fair value
+of derivative instruments on a periodic basis. The fair value
+to be determined for each derivative instrument is the price
+that would be received to sell an asset or paid to transfer a
+liability in an orderly transaction between market participants
+on the measurement date (exit price). E.ON also takes into
+account the counterparty credit risk when determining fair
+value (credit value adjustment). The fair values of derivative
+instruments are calculated using common market valuation
+methods with reference to available market data on the
+measurement date.
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments
+in the Consolidated Financial Statements.
+Nominal
+€ in millions
+FX forward transactions
+Subtotal
+value
+Fair value
+value
+Fair value
+21,398.3
+38.9
+17,113.9
+42.9
+21,398.3
+38.9
+17,113.9
+Nominal
+9,548
+December 31, 2014
+Consolidated Financial Statements
+Tables and Explanations
+•
+Currency, electricity, gas, oil and coal forward contracts,
+swaps, and emissions-related derivatives are valued sep-
+arately at their forward rates and prices as of the balance
+sheet date. Whenever possible, forward rates and prices
+are based on market quotations, with any applicable for-
+ward premiums and discounts taken into consideration.
+Market prices for interest rate, electricity and gas options
+are valued using standard option pricing models com-
+monly used in the market. The fair values of caps, floors
+and collars are determined on the basis of quoted market
+prices or on calculations based on option pricing models.
+The fair values of existing instruments to hedge interest
+risk are determined by discounting future cash flows using
+market interest rates over the remaining term of the
+instrument. Discounted cash values are determined for
+interest rate, cross-currency and cross-currency interest
+rate swaps for each individual transaction as of the bal-
+ance sheet date. Interest income is recognized in income
+at the date of payment or accrual.
+Equity forwards are valued on the basis of the stock prices
+of the underlying equities, taking into consideration any
+timing components.
+Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective
+clearing houses. Paid initial margins are disclosed under
+other assets. Variation margins received or paid during
+the term of such contracts are stated under other liabilities
+or other assets, respectively.
+Certain long-term energy contracts are valued with the
+aid of valuation models that use internal data if market
+prices are not available. A hypothetical 10-percent increase
+or decrease in these internal valuation parameters as of
+the balance sheet date would lead to a theoretical
+decrease in market values of €44 million or an increase
+of €45 million, respectively.
+At the beginning of 2015, a loss of €48 million from the initial
+measurement of derivatives was deferred. After realization of
+€1 million in gains, the remainder is a deferred loss of €47 mil-
+lion at year-end, which will be recognized in income during
+subsequent periods as the contracts are settled.
+The following two tables include both derivatives that qualify
+for IAS 39 hedge accounting treatment and those for which
+it is not used:
+Total Volume of Foreign Currency, Interest Rate and Equity-Based Derivatives
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+December 31, 2015
+Trade payables
+2,375
+2,375
+market
+using mar-
+from active
+Derived
+Determined
+measure-
+ment
+scope of
+IFRS 7
+amounts
+€ in millions
+Carrying
+IAS 39
+Total carry-
+ing amounts
+within the
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+category¹
+Report of the Supervisory Board
+Fair value
+prices
+645
+Receivables from finance leases
+546
+99
+4,032
+3,739
+4,909
+Financial receivables and other financial assets
+320
+120
+1,573
+Afs
+1,573
+1,573
+Equity investments
+ket prices
+185
+CEO Letter
+Carrying Amounts, Fair Values and Measurement Categories by Class
+1,181
+1,181
+n/a
+1,181
+1,181
+Derivatives with hedging relationships
+8,367
+5,985
+14,384
+HFT
+14,384
+14,384
+Derivatives with no hedging relationships
+2,375
+AmC
+Put option liabilities under IAS 32²
+within the Scope of IFRS 7 as of December 31, 2014
+686
+AmC
+Where the value of a financial instrument can be derived from
+an active market without the need for an adjustment, that
+value is used as the fair value. This applies in particular to
+equities held and to bonds held and issued.
+The carrying amounts of cash and cash equivalents and of
+trade receivables are considered reasonable estimates of their
+fair values because of their short maturity.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined
+using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair value and the fair values of the two
+hierarchy levels listed.
+9,837
+23,184
+48,433
+9,691
+AmC
+9,691
+45,154
+50,899
+Total liabilities
+14,531
+Other operating liabilities
+686
+686
+186 Notes
+The carrying amount of commercial paper, borrowings under
+revolving short-term credit facilities and trade payables is
+used as the fair value due to the short maturities of these items.
+The determination of the fair value of derivative financial
+instruments is discussed in Note 30.
+In the fourth quarter of 2015, there were no material reclassi-
+fications between Levels 1 and 2 of the fair value hierarchy. At
+the end of each reporting period, E.ON assesses whether there
+might be grounds for reclassification between hierarchy levels.
+1,068
+469
+34
+1,362
+1,357
+231
+166
+103
+49
+77
+35
+161
+9,830
+Cash
+outflows
+from 2021
+5,837
+26
+3,347
+Cash outflows for financial liabilities
+3,582
+9,611
+Other operating liabilities
+410
+109
+5
+162
+Put option liabilities under IAS 32
+6,962
+12,532
+32,623
+Derivatives (with/without hedging relationships)
+2,329
+Trade payables
+12,304
+6,614
+3,740
+2
+2,088
+2017
+4,195
+29,470
+0
+29,470
+Total
+15,694
+15,694
+15,694
+Other operating liabilities
+6,878
+328
+4,195
+11,401
+11,401
+Commodity derivatives
+1,309
+Cash
+outflows
+2018-2020
+23,966
+The netting agreements are derived from netting clauses
+contained in master agreements including those of the Inter-
+national Swaps and Derivatives Association (ISDA) and the
+European Federation of Energy Traders (EFET), as well as the
+German Master Agreement for Financial Derivatives Trans-
+actions ("DRV") and the Financial Energy Master Agreement
+("FEMA"). Collateral pledged to and received from financial
+2016
+Cash
+outflows
+Cash
+outflows
+Financial guarantees
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Cash Flow Analysis as of December 31, 2015
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities
+included in the scope of IFRS 7:
+188 Notes
+187
+institutions in relation to these liabilities and assets limits the
+utilization of credit lines in the fair value measurement of
+interest-rate and currency derivatives, and is shown in the
+table. For commodity derivatives in the energy trading busi-
+ness, the netting option is not presented in the accounting
+because the legal enforceability of netting agreements varies
+by country.
+Transactions and business relationships resulting in the
+derivative financial receivables and liabilities presented are
+generally concluded on the basis of standard contracts that
+permit the netting of open transactions in the event that a
+counterparty becomes insolvent.
+1,394
+6
+Cash outflows for trade payables and other operating liabilities
+Put option liabilities under IAS 32
+6
+2,361
+14,428
+34,774
+Derivatives (with/without hedging relationships)
+2,241
+Trade payables
+13,431
+7,872
+2,180
+4,744
+Cash outflows for financial liabilities
+87
+1,112
+17
+473
+108
+531
+13,974
+10,355
+16,718
+52,292
+Cash outflows for liabilities within the scope of IFRS 7
+543
+2,483
+14,538
+47,548
+Cash outflows for trade payables and other operating liabilities
+6
+14
+2
+10,516
+Other operating liabilities
+108
+2
+42
+1,341
+2015
+Bonds
+€ in millions
+outflows
+Cash
+Cash Flow Analysis as of December 31, 2014
+12,716
+13,691
+16,121
+48,465
+Cash outflows for liabilities within the scope of IFRS 7
+412
+7,077
+12,539
+44,725
+Cash
+outflows
+2016
+1,001
+2,035
+Cash
+outflows
+2017-2019
+7,092
+228
+162
+100
+52
+79
+33
+1,120
+401
+Financial guarantees
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Commercial paper
+10,926
+Cash
+outflows
+from 2020
+1,943
+42.9
+981
+2,375
+Financial assets
+€ in millions
+Net value
+Financial
+collateral
+received/
+pledged
+netting
+amount
+(netting
+agreements)
+Carrying
+amount
+Amount
+offset
+Gross amount
+Conditional
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2015
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following table:
+1,010
+-407
+-37
+19
+Trade receivables
+-5
+11,213
+3,982
+0
+27,423
+Total
+8,083
+478
+6,213
+14,774
+14,774
+Commodity derivatives
+1,321
+115
+1,436
+1,436
+Interest-rate and currency derivatives
+7,231
+11,213
+27,423
+0
+53
+Equity investments
+additions)
+2015
+€ in millions
+state-
+Settle-
+Jan. 1, (including (including
+Gains/
+income
+Sales
+Purchases
+Transfers
+Gains/
+Losses in
+Fair Value Hierarchy Level 3 Reconciliation (Values Determined Using Valuation Techniques)
+The input parameters of Level 3 of the fair value hierarchy
+for equity investments are specified taking into account eco-
+nomic developments and available industry and corporate
+data (see also Note 1). In 2015, equity investments were reclassi-
+fied into Level 3 in the amount of €19 million, and out of
+Level 3 into Level 2 in the amount of €37 million. The losses
+recognized in OCI resulted from a market-related measure-
+ment effect on an equity interest in a Swedish power plant.
+The fair values determined using valuation techniques for
+financial instruments carried at fair value are reconciled as
+shown in the following table:
+1,133
+-142
+53
+ments
+1,529
+Total
+361
+-35
+396
+Derivative financial
+instruments
+649
+-407
+2015
+OCI
+Dec. 31,
+Losses in
+out of
+Level 3
+-37
+into
+Level 3
+19
+ment
+30
+disposals)
+-142
+2,375
+10,195
+16,635
+Interest-rate and currency derivatives
+7,500
+4,300
+11,800
+11,800
+Trade receivables
+Financial assets
+€ in millions
+Net value
+pledged
+agreements)
+received/
+(netting
+Carrying
+amount
+offset
+1,447
+Gross amount
+1,447
+1,304
+Interest-rate and currency derivatives
+Financial liabilities
+16,747
+264
+8,505
+25,516
+0
+25,516
+Total
+7,943
+121
+4,205
+12,269
+12,269
+Commodity derivatives
+143
+593
+Amount
+amount
+14,531
+14,531
+Other operating liabilities
+6,879
+426
+6,213
+13,518
+13,518
+Commodity derivatives
+1,199
+848
+2,047
+2,047
+Interest-rate and currency derivatives
+Financial liabilities
+3,982
+collateral
+10,549
+30,096
+Financial
+netting
+Conditional
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2014
+18,627
+1,274
+10,195
+30,096
+0
+Total
+Cross-currency swaps
+7,929.2
+110.9
+Group companies.
+In 2015, cash provided by financing activities of continuing
+operations amounted to -€3.9 billion (2014: -€4.6 billion).
+The change of roughly €0.7 billion is primarily attributable
+to a €0.4 billion reduction in the net repayment of financial
+liabilities, to a €0.1 billion reduction of the dividend payout
+to E.ON Group shareholders and to a €0.1 billion increase in
+non-controlling interests in the equity of fully consolidated
+Cash provided by investing activities of continuing operations
+amounted to roughly -€0.3 billion in 2015 (2014: -€3.2 billion).
+Of this roughly €2.9 billion improvement, €1.9 billion is attrib-
+utable to higher cash inflows from disposals, mainly of oper-
+ations in Spain, of solar, hydro and conventional generating
+capacity in Italy, of exploration and production activities in
+Norway, and of the remaining stake in the company formerly
+called E.ON Energy from Waste. This effect was made more
+pronounced by a €0.5 billion decline in investments in intan-
+gible assets, property, plant and equipment and sharehold-
+ings, and by a €0.1 billion reduction in restricted cash relative
+to a €0.4 billion increase in the previous year.
+At €6.2 billion, the E.ON Group's operating cash flow was close
+to the prior-year level. With virtually unchanged levels of
+working capital, the decrease in cash earnings was for the
+most part offset by lower net interest and income tax payments.
+The purchase prices paid for subsidiaries totaled €0 million
+in 2015 (2014: €22 million). Accordingly, no cash and cash
+equivalents were acquired in this context (2014: €1 million).
+The total consideration received by E.ON in 2015 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €3,933 million (2014: €939 million). This amount
+includes repaid Group loans in the amount of €2,905 million.
+Cash and cash equivalents divested in connection with the
+disposals amounted to €187 million (2014: €27 million). The
+sale of these activities led to reductions of €6,351 million (2014:
+€1,625 million) in assets and €5,225 million (2014: €572 million)
+in provisions and liabilities.
+623
+2014
+2015
+fixed-term deposits and securities
+pension obligations through transfer of
+Funding of external fund assets for
+Exploration activity resulted in operating cash flow of
+-€48 million (2014: -€49 million) and in cash flow from invest-
+ing activities of -€63 million (2014: -€13 million).
+activities
+€ in millions
+Supplemental Cash Flow Disclosures
+(29) Supplemental Cash Flow Disclosures
+180 Notes
+179
+Because litigation and claims are subject to numerous uncertain-
+ties, their outcome cannot be ascertained; however, in the opin-
+ion of management, any potential obligations arising from these
+matters will not have a material adverse effect on the financial
+condition, results of operations or cash flows of the Company.
+Applying the provisions of IAS 37.92, E.ON is making no addi-
+tional disclosures on the proceedings presented, or on any
+associated risks and measures taken, in particular because
+such disclosure would prejudice their outcome.
+the nuclear phaseout as currently legislated is irreconcilable
+with constitutionally-protected property rights and the free-
+dom to choose an occupation and operate a business. Such an
+intervention would, in E.ON's view, be unconstitutional unless
+compensation is granted for the rights thus taken, and for the
+corresponding stranded assets. Accordingly, in mid-November
+2011, E.ON filed a constitutional complaint against the thir-
+teenth amendment of the Nuclear Energy Act with the Federal
+Constitutional Court of Germany in Karlsruhe. The nuclear-fuel
+tax remains at its original level after the reversal of the oper-
+ating-life extensions. E.ON believes that this tax contravenes
+Germany's constitution and European law and is therefore
+pursuing administrative proceedings and taking legal action
+against it. This view was affirmed by both the Hamburg Fiscal
+Court and the Munich Fiscal Court. After the Federal Fiscal
+Court overturned the temporary suspension of the tax previ-
+ously ordered by the lower fiscal courts, the European Court
+of Justice ruled in June 2015, with regard to the issues brought
+before it, affirming that the tax is consistent with European
+law. The Federal Constitutional Court has not yet issued its
+final ruling.
+The reactor accident at Fukushima caused the political parties
+in Germany's coalition government to reverse their nuclear-
+energy policy. Having initially extended the operating lives of
+the country's nuclear power plants in the fall of 2010 as pro-
+vided for in the coalition agreement at the time, the German
+federal government then rescinded the extensions in the thir-
+teenth amended version of the Nuclear Energy Act, and added
+further restrictive provisions. However, E.ON contends that
+Applying the provisions of IAS 37.92, E.ON is making no addi-
+tional disclosures on the proceedings presented, or on any
+associated risks and measures taken, in particular because
+such disclosure would prejudice their outcome.
+Competition in the gas market and rising trading volumes at
+virtual trading points and on gas exchanges could result in
+considerable risks for gas quantities purchased under long-
+term take-or-pay contracts. In addition, given the extensive
+upheavals in the German wholesale markets for natural gas
+in the past years, substantial price risks have arisen between
+purchase and sales volumes. Long-term gas-procurement
+contracts generally include the option for producers and
+importers to adjust the terms in line with constantly changing
+market conditions. On this basis, E.ON Global Commodities
+continuously conducts intensive negotiations with producers.
+The possibility of further legal disputes cannot be excluded.
+Applying the provisions of IAS 37.92, E.ON is making no addi-
+tional disclosures on the proceedings presented, or on any
+associated risks and measures taken, in particular because
+such disclosure would prejudice their outcome.
+Non-cash investing and financing
+E.ON Group are directly involved in these particular prelimi-
+nary-ruling proceedings, there is a risk that claims asserted
+against Group companies for the restitution of amounts col-
+lected through such price increases might be successful. Further-
+more, there are several court proceedings with major customers
+on contract amendments and price adjustments in long-term
+electricity and gas supply contracts in response to the altered
+situation brought about by market upheavals. In some of these
+cases, customers are challenging the validity not only of the
+price-adjustment clauses, but of the contracts in their entirety.
+(30) Derivative Financial Instruments and Hedging
+Transactions
+The Company's policy generally permits the use of derivatives
+if they are associated with underlying assets or liabilities,
+planned transactions, or legally binding rights or obligations.
+2018-2020
+Expected gains/losses
+2017
+2016
+amount
+Carrying
+¹OCI Other comprehensive income. Figures are pre-tax.
+OCI-Commodity cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Currency cash flow hedges
+€ in millions
+Timing of Reclassifications from OCI¹ to the Income Statement-2015
+Pursuant to the information available as of the balance sheet
+date, the following effects will accompany the reclassifications
+from accumulated other comprehensive income to the income
+statement in subsequent periods:
+Strategy and Objectives
+The amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2015, produced a gain of
+€6 million (2014: €25 million loss).
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash
+flow hedge accounting.
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps, cross-currency
+interest rate swaps, swaptions and interest rate options are
+the principal instruments used to limit interest rate and cur-
+rency risks. The purpose of these swaps is to maintain the level
+of payments arising from long-term interest-bearing receivables
+and liabilities and from capital investments denominated in
+foreign currency and euro by using cash flow hedge accounting
+in the functional currency of the respective E.ON company.
+Cash Flow Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges
+are generally reported in that line item of the income state-
+ment which also includes the respective hedged items.
+Fair Value Hedges
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group, as well as from anticipated
+fuel purchases and purchases and sales of gas, are hedged.
+Hedge accounting in accordance with IAS 39 is employed pri-
+marily for interest rate derivatives used to hedge long-term
+debts and bonds to be issued in the future, as well as for cur-
+rency derivatives used to hedge net investments in foreign
+operations, long-term receivables and debts denominated in
+foreign currency, as well as planned capital investments.
+As of December 31, 2015, the hedged transactions in place
+included foreign currency cash flow hedges with maturities
+of up to 35 years (2014: up to 23 years) and interest cash
+flow hedges with maturities of up to 10 years (2014: up to 12
+years).
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+28,938
+28,938
+6,521
+9,296
+Trade receivables
+11,213
+11,213
+LaR
+11,213
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Other operating assets
+30,865
+Securities and fixed-term deposits
+Restricted cash
+Assets held for sale
+Total assets
+Financial liabilities
+Bonds
+Commercial paper
+15,600
+15,600
+HFT
+15,600
+6,521
+8,686
+Cash and cash equivalents
+Trade receivables and other operating assets
+4,435
+LaR
+Report of the Supervisory Board
+CEO Letter
+Fair value
+ket prices
+prices
+Equity investments
+1,202
+1,202
+Afs
+1,202
+145
+408
+Financial receivables and other financial assets
+Receivables from finance leases
+5,064
+5,044
+5,044
+92
+517
+609
+609
+n/a
+609
+92
+517
+Other financial receivables and financial assets
+4,455
+4,435
+>2020
+70
+32
+8
+Other derivatives
+84.7
+808.0
+38.0
+651.4
+Exchange-traded emissions-related derivatives
+-8.0
+20.1
+Emissions-related derivatives
+31.4
+4,711.2
+-6.1
+51.7
+439.8
+-72.1
+9,431.7
+-9.0
+968.5
+-296.4
+12,004.3
+-208.7
+12,953.3
+1.8
+1,807.0
+17.5
+1,190.0
+Exchange-traded oil derivatives
+21.2
+38.8
+-2.8
+from active
+Derived
+Determined
+measure-
+ment
+category1
+IFRS 7
+amounts
+€ in millions
+scope of
+Carrying
+within the
+IAS 39
+Total carry-
+ing amounts
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2015
+The carrying amounts of the financial instruments, their
+grouping into IAS 39 measurement categories, their fair values
+and their measurement sources by class are presented in the
+following table:
+(31) Additional Disclosures on Financial
+Instruments
+184 Notes
+183
+869.7
+150,772.6
+1,254.4
+130,595.0
+Total
+18.2
+103.9
+43.3
+112.7
+Other exchange-traded derivatives
+19.0
+610
+68.3
+59.2
+1
+-1
+-243
+-860
+-22
+-9
+-8
+899
+17
+24
+202
+>2019
+2017-2019
+411.9
+Expected gains/losses
+2016
+amount
+Carrying
+OCI-Interest cash flow hedges²
+OCI-Currency cash flow hedges²
+€ in millions
+Timing of Reclassifications from OCI¹ to the Income Statement-2014
+-747
+-8
+-2
+-2
+759
+-110
+2015
+15,408.3
+175.9
+1,694.4
+15.0
+5,888.7
+22.7
+4,919.0
+72.2
+9,723.6
+249.2
+12,344.1
+282.4
+37,619.7
+484.0
+34,697.1
+-27.8
+256.1
+-35.1
+196.2
+Oil derivatives
+Exchange-traded coal forwards
+Coal forwards and swaps
+Gas options
+Gas swaps
+Exchange-traded gas forwards
+Gas forwards
+Electricity options
+49.1
+2,462.8
+38.4
+-15.2
+market
+28,317
+923
+93
+51,236
+48,301
+48,301
+19,102
+10,813
+17,742
+16,837
+20,116
+17,199
+13,750
+203
+13,750
+519.1
+50,440.2
+210.3
+42,677.4
+Electricity swaps
+Exchange-traded electricity forwards
+Electricity forwards
+Fair value
+December 31, 2014
+Nominal
+value
+Fair value
+value
+17,620.1
+€ in millions
+Afs
+1,191
+610
+n/a
+610
+610
+3,442
+1,515
+LaR
+1,515
+6,802
+6,802
+Afs
+203
+6,802
+463
+5,189
+5,189
+Afs
+5,189
+5,153
+36
+923
+Afs
+923
+923
+6,268
+Nominal
+289
+Total Volume of Electricity, Gas, Coal, Oil and Emissions-Related Derivatives
+Interest rate options
+Fixed-rate receiver
+-607.5
+2,393.0
+-590.1
+1,536.0
+Fixed-rate payer
+-558.2
+2,893.0
+-548.6
+1,786.0
+250.0
+Interest rate swaps
+8,211.2
+149.7
+7,964.7
+Subtotal
+32.1
+35.5
+38.8
+35.5
+Cross-currency interest rate swaps
+-134.6
+8,175.7
+December 31, 2015
+41.5
+-102.5
+49.3
+500.0
+-930.5
+30,426.1
+-609.1
+32,914.0
+Total
+9.8
+-0.8
+165.0
+Subtotal
+9.8
+208.0
+-0.8
+208.0
+Subtotal
+Other derivatives
+-880.7
+4,893.0
+-796.9
+3,386.0
+1,600.0
+165.0
+-322.5
+2,000.0
+-248.3
+-1.64
+Зам
+-3.60
+income¹
+0.85
+Earnings from underlying net
+shareholders of E.ON SE
+E.ON Stock Key Figures
+2014
+2015
+Per share (€)
+12/31/14 1/31/15 2/28/15 3/31/15 4/30/15 5/31/15 6/30/15 7/31/15 8/31/15 9/30/15 10/31/15 11/30/15 12/31/15
+¹Based on the performance index.
+STOXX Utilities¹
+0.86
+Net income attributable to the
+Dividend²
+12.56
+0.50
+8.93
+EURO STOXX1
+Year-end closing price³
+Dividend per Share
+7.13
+Twelve-month low³
+0.50
+15.46
+Twelve-month high³
+At the 2016 Annual Shareholders Meeting, management will
+propose a cash dividend of €0.50 per share for the 2015 finan-
+cial year (prior year: €0.50). The payout ratio (as a percentage
+of underlying net income) would be 59 percent, the same as
+in the prior year. Based on E.ON stock's year-end 2015 closing
+price, the dividend yield is 5.6 percent.
+Dividend
+966
+976
+Dividend payout (€ in millions)
+14.74
+-
+United Kingdom 17%.
+50
+Düsseldorf, March 8, 2016
+The Supervisory Board
+The Supervisory Board wishes to thank the Management Board,
+the Works Councils, and all the employees of the E.ON Group
+for their dedication and hard work in the 2015 financial year.
+the members of the Audit and Risk Committee elected Mr.
+Schulz to serve as the committee's Deputy Chairman effective
+January 1, 2016. Mr. Hansen stepped down from the Finance
+and Investment Committee effective December 31, 2015; the
+Supervisory Board elected Clive Broutta to succeed him effec-
+tive January 1, 2016; due to Mr. Hansen's departure, the members
+of the Finance and Investment Committee elected Eugen-
+Gheorge Luha to serve as the committee's Deputy Chairman
+effective January 1, 2016.
+In addition, Eberhard Schomburg ended his service on the
+Supervisory Board effective December 31, 2015. We would like
+to thank Mr. Schomburg for his outstanding work in the inter-
+ests of the Company and its employees and wish him all the
+best in his future endeavors. Mr. Schomburg's successor on
+the Supervisory Board is Elisabeth Wallbaum. The Supervisory
+Board elected Fred Schulz to succeed Mr. Schomburg on the
+Executive Committee and Thies Hansen to succeed him on the
+Audit and Risk Committee; due to Mr. Schomburg's departure,
+On May 7, 2015, Erhard Ott ended his many years of service on the
+E.ON SE Supervisory Board, of which he had been a member
+since 2005. He was exemplary in his efforts to achieve a balance
+between the interests of the Company and its employees.
+We would like to thank Mr. Ott for his dedicated service on the
+Supervisory Board and wish him all the best for the future.
+Mr. Ott's successor on the Supervisory Board is Andreas Scheidt.
+The Supervisory Board elected Mr. Scheidt to succeed Mr. Ott
+as Deputy Chairman of the Supervisory Board; he is therefore
+also a member, and Mr. Ott's successor as Deputy Chairman,
+of the Executive Committee.
+Personnel Changes on the Supervisory Board and
+Its Committees
+Best wishes,
+Page 216 of this report shows E.ON SE Management Board
+members' respective task areas as of year-end 2015.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+14.20
+Jørgen Kildahl (September 30) and Mike Winkel (May 31), ended
+their service on the Management Board effective the above-
+shown dates in 2015. We would like to take this opportunity
+to again thank them for their many years of outstanding
+service to the E.ON Group and for their steadfast dedication
+to its successful development and to the implementation
+of its new strategy. We wish them all the best for the future.
+И. Сеним
+Werner Wenning
+Chairman
+9
+60
+70
+80
+90
+100
+110
+120
+Percentages
+E.ON Stock Performance
+thereby underperforming its peer index, the STOXX Utilities
+(+/-0 percent), and the broader European stock market as
+measured by the EURO STOXX 50 index (+6 percent).
+At the end of 2015 E.ON stock (including reinvested dividends)
+was 35 percent below its year-end closing price for 2014,
+E.ON Stock in 2015
+E.ON Stock
+10
+10
+- E.ON
+€ per share
+-
+Dividend
+below prior-year figures
+→ EBITDA and underlying net income as anticipated
+16 Combined Group Management Report
+15
+Switzerland 3%
+People Strategy
+The section of the Combined Group Management Report
+entitled Financial Situation contains explanatory information
+about our finance strategy.
+Finance Strategy
+→ Net loss considerably higher
+The transformation process to implement our strategy has
+two phases. In 2015 we laid the groundwork for and success-
+fully completed the separation of E.ON into two operationally
+independent companies. All legal, organizational, HR-related,
+and financial aspects of this process were completed accord-
+ing to plan and on schedule. In 2016 we will complete the
+remaining steps so that the Annual Shareholders Meeting can
+decide on the spinoff and so that Uniper can be listed on the
+stock market. Shareholders, employees, and other stakeholders
+will receive timely information about important milestones
+in the transformation process.
+Significance for Employees and Stakeholders
+Uniper aims to be a cost and capability leader, to shape the
+transformation of Europe's conventional generation market,
+and to be attractive to its customers and investors. Uniper
+will aim for an investment-grade rating. Uniper is attractive
+to employees because it offers jobs and career opportunities
+in a company that will lead the restructuring of its markets.
+Current changes in Europe's generation market are creating
+opportunities to help shape the market's future and benefit
+from the transformation. Thanks to its presence in Europe
+and Russia, its experience with a broad range of technologies,
+and its generation and midstream-gas portfolio, Uniper is
+well positioned to make an important contribution to supply
+security. Uniper has good access to key European and global
+commodity markets. Its primary capabilities are in operating
+and managing individual generation assets and in coordinating
+entire generation fleets. It also has experience in energy
+trading and with regulatory regimes.
+Resources and Capabilities
+Global energy markets: Uniper's trading activities help to
+connect global energy markets. Its trading business also
+manages the risks inherent in its regional power and gas
+portfolios. Broad expertise in global commodity trading,
+an array of proven partnerships, and an international pres-
+ence will enable Uniper to offer comprehensive service
+bundles, such as asset management, fuel supply, and
+power-plant dispatch.
+Gas supply: As the gap between Europe's gas demand and
+its domestic production widens, Uniper's long-term gas
+procurement contracts, its access to global LNG market,
+its gas storage facilities, and its stake in gas production
+activities in Russia will play an increasingly important role
+in supply security.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Transformation Process
+→ Economic net debt reduced by €5.7 billion
+→ Management to propose dividend of €0.50 per share
+→ 2016 EBITDA expected to be between €6 and €6.5 billion
+Regional Units
+Report of the Supervisory Board
+CEO Letter
+IT, procurement, human resources, insurance, consulting,
+and business processes provide valuable support for our core
+businesses wherever we operate around the world. These
+entities and/or departments are organized by function so
+that we pool professional expertise across our organization
+and leverage synergies.
+The main task of Group Management is to lead the entire
+E.ON Group by overseeing and coordinating its operating
+business. This includes charting E.ON's strategic course, defining
+its financial policy and initiatives, managing business issues
+that transcend individual markets, managing risk, continually
+optimizing E.ON's business portfolio, and conducting stake-
+holder management.
+Group Management
+E.ON SE serves as Group Management. It oversees and coor-
+dinates the operations of the entire Group. We see ourselves
+as a global specialized provider of energy solutions. Four global
+units are responsible for Generation, Renewables, Global
+Commodities, and Exploration & Production. Ten regional units
+manage our operating business in Europe. Russia is another
+unit, and we also have operations in Brazil and Turkey. Support
+functions like IT, procurement, and business processes are
+organized functionally.
+E.ON is a major investor-owned energy company. Our organi-
+zational setup clearly delineates the roles and responsibilities
+of all Group companies. Our operations are segmented into
+global units and regional units.
+Business Model
+Corporate Profile in 2015
+Functions
+Regional Units
+Units
+Support
+Global
+Regional Units
+Regional Units
+ment
+Group
+Manage-
+Global Units
+Report of the Supervisory Board
+CEO Letter
+Conventional power generation: Uniper's flexible, dis-
+patchable generating capacity will play an important role
+in ensuring supply security during the transition toward
+a carbon-neutral power supply, which is still in the dis-
+tant future. At the same time, many power plant operators
+in Europe face increasing challenges from the energy
+transition. Thanks to its experience and capabilities, Uniper
+is well positioned to offer a wide range of services relating
+to the operation of power plants.
+Uniper's main strategic objective is to successfully position
+itself in the changing conventional energy world and to help
+shape this change:
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The new company, Düsseldorf-based Uniper, has just under
+14,000 employees and focuses on the conventional energy
+world. It consists of upstream and midstream businesses that
+originally belonged to E.ON. Plans call for a majority stake in
+Uniper to be spun off to E.ON SE shareholders in 2016. Initially,
+E.ON will retain a minority stake in Uniper.
+New Operating Setup in Place at Start of 2016
+In response to a fundamentally altered market environment,
+effective January 1, 2016, E.ON was divided into two opera-
+tionally distinct and focused companies. Based in Essen, the
+new E.ON and its roughly 43,000 employees will focus on the
+new energy world. In view of the policy debate in Germany
+regarding nuclear energy, in September 2015 E.ON decided to
+retain responsibility for its nuclear power stations in Germany
+and not to transfer them to Uniper. E.ON will ensure that these
+assets are dismantled safely and cost-effectively. This decision
+does not affect E.ON's new strategic direction. The nuclear
+power business in Germany is not a strategic business segment
+for E.ON and is managed by a separate operating company,
+Preussen Elektra of Hanover.
+mechanisms that provide appropriate compensation for main-
+taining this capacity. Globally, energy demand continues to
+rise, creating opportunities for energy trading and possibly
+fueling a recovery of wholesale energy prices. Both energy
+worlds offer abundant market and growth opportunities. But
+they differ considerably in terms of value drivers, processes,
+risks, capital costs, investor expectations, and success factors.
+Renewables like wind and solar have achieved a cost level
+that is competitive relative to that of conventional generation
+technologies. In conjunction with batteries and other energy
+storage systems, renewables represent a viable alternative
+energy supply for more and more customers. At the same time,
+customers' expectations and roles are evolving in substantial
+ways. Customers no longer see themselves exclusively as the
+recipients of power, gas, or heat service. They are taking greater
+interest in the source and sustainability of their energy supply.
+And many are already active as self-generators and energy-
+efficiency managers. Alongside changing customer needs, policy
+and regulatory decisions of recent years have also placed an
+increasing emphasis on renewables, distributed generation,
+and energy efficiency. As a result of these developments, the
+traditional energy value chain is fragmenting into an increasing
+number of discrete market segments. This creates opportuni-
+ties for new, specialized market entrants and makes competition
+even keener. The new energy world-encompassing sustain-
+able solutions, more autonomous and proactive customers,
+renewables, distributed energy, energy efficiency, and local
+energy systems-offers considerable growth potential. It will
+experience more dynamic growth and will play an increasingly
+significant role in many countries. Nevertheless, the conven-
+tional energy world will continue to exist and to offer well-
+positioned companies attractive opportunities. As conventional
+generating capacity will remain indispensible for ensuring a
+reliable power supply, European markets will need to establish
+Two Energy Worlds, Each with a Variety of
+Opportunities
+At the end of 2014 E.ON adopted a new strategy called
+"Empowering customers. Shaping markets.” It represents E.ON's
+systematic response to the far-reaching changes in energy
+markets. By seizing the initiative, E.ON can-for the benefit
+of our customers, employees, business partners, shareholders,
+and society in general-take advantage of the significant
+opportunities created by the emergence of new energy worlds.
+Our Strategy: "Empowering customers. Shaping
+markets."
+Strategy and Objectives
+12
+11
+Sources: share register and Ipreo (as of December 31, 2015).
+¹Percentages based on total investors identified (excluding treasury shares).
+37% Germany
+USA and Canada 17%
+Rest of Europe 8%
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+E.ON Stock
+Dividing the Group into two smaller, more dynamic companies
+will make E.ON and Uniper better able to differentiate their
+business operations according to customers, technologies, risks,
+and markets and to take a more focused approach to devel-
+oping the necessary capabilities and processes. Each of the
+two companies will be able to develop a consistent corporate
+culture and establish a clear brand positioning. In addition,
+we expect that both companies will have more specific capital
+costs and improved access to capital markets.
+The strategy for the new E.ON's core businesses reflects three
+fundamental market trends and corresponding growth busi-
+nesses: the global demand for renewables (particularly wind
+and solar), the evolution of energy networks into a platform for
+distributed-energy solutions, and customers' changing needs.
+The new E.ON will aim to add value in all of these businesses
+by delivering an outstanding performance in key areas such
+as continual innovation, an unambiguous commitment to
+sustainability, and a strong brand. It will also deepen its rela-
+tionships with customers, business partners, and other key
+stakeholders.
+A balanced portfolio of large-scale energy assets-combined
+with outstanding technical and commercial expertise-enable
+Uniper to deliver attractive, custom-tailored, competitively
+priced products and services.
+Objectives and Core Businesses
+Spinning off E.ON's conventional upstream and midstream
+businesses into a new, independent company will enable these
+businesses to realize their full potential. Uniper has proven
+strengths and a team of highly qualified employees. It will be
+able to leverage existing, proven synergies between generation,
+trading, and the midstream gas business and provide com-
+petitive services to third parties.
+The conventional energy world is based on proven, centralized,
+commodity-oriented technologies that ensure supply security;
+cost competition; and global trading. Value is created through
+the strategic positioning of generation assets, through a tech-
+nology and fuel strategy that delivers cost leadership, through
+superior capabilities in operations, engineering, optimization,
+and trading, and through efficient capital allocation.
+Uniper's Strategy
+The new E.ON will offer attractive opportunities to current and
+future employees by creating jobs and career opportunities
+in growth markets and by setting clear objectives. It will offer
+investors an adequate balance between dividends with good
+growth prospects, highly predictable earnings, and solid
+financing.
+Significance for Employees and Stakeholders
+Alongside its existing capabilities and resources, E.ON will
+develop and refine the necessary expertise for the key success
+factors in its businesses. In particular, it will cultivate a strong
+customer orientation, develop and implement new downstream
+business models and products, and leverage the digital trans-
+formation. The successful implementation of the new E.ON's
+strategy will also depend on partnerships, such as partner-
+ships with providers of new technology and business models.
+A focused setup and systematic approach will enable E.ON to
+retain its existing strengths and advantages and build on
+them. Examples include our success at developing and building
+an international renewables portfolio consisting of 4.4 GW of
+operational capacity and an attractive development pipeline,
+our outstanding record of managing a total of roughly 1 mil-
+lion kilometers of energy networks, and our direct access to
+33 million customers in key European markets and in Turkey.
+Resources and Capabilities
+Strategy and Objectives
+14
+13
+Although each of these core businesses is independent and has
+its own business logic, combining them in a single company
+offers significant advantages. It will enable E.ON to acquire
+and leverage a comprehensive understanding of the transfor-
+mation of the energy system and the interplay between the
+individual submarkets in regional and local energy supply sys-
+tems. These businesses will be able to work together to design
+customer-oriented offerings and package solutions for the
+new energy world (such as sustainable solutions for cities),
+to conduct stakeholder management, and to position the
+brand more effectively.
+Customer solutions: E.ON will expand its top-quality
+offerings for the physical and digital new energy world and
+market them to municipal, public, commercial, and resi-
+dential customers in attractive markets. We aim to become
+customers' partner of choice by delivering high-quality
+service and by continually improving or redefining our port-
+folio of products and services in response to customers'
+demand for energy efficiency and distributed generation.
+Energy networks: Energy networks link our customers
+together and are the hub for grid digitalization, such as
+the direct marketing of distributed energy. In Germany,
+about one third of distributed generating capacity subsi-
+dized by the Renewable Energy Law is connected to our
+networks. Regional energy networks are what makes the
+transformation of the energy system possible. E.ON is
+already a leader in network efficiency and will continue
+to set new standards in the future.
+Renewables: E.ON's international renewables business
+focuses in attractive target regions (Europe and North
+America) and customer-relevant technologies (onshore
+and offshore wind, PV solar) for network companies,
+energy suppliers, large customers, wholesale markets, and
+government subsidy programs. E.ON's industry-leading
+capabilities in project development and execution and in
+operational excellence already give it a tangible competi-
+tive advantage in this business.
+E.ON aims to become the partner of choice for energy and
+customer solutions. It intends to achieve this by taking an
+ambitious approach to sustainability, customer loyalty, and
+innovative solutions. E.ON's clear focus on three strong core
+businesses will enable it to offer energy solutions on the
+generation and demand side:
+Objectives and Core Businesses
+The New E.ON's Strategy
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Changes in Our Reporting
+2010
+2011
+0.60
+0.50
+0.50
+50
+51
+59
+59
+2012
+2013
+2014
+2015
+¹Payout ratio not adjusted for discontinued operations.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+5On all German stock exchanges, including Xetra.
+Shareholder Structure
+0.50
+59
+◆ Payout ratio¹ (%)
+Number of shares outstanding
+(in millions)
+1,952
+1,933
+Market capitalization4 (€ in billions)
+17.4
+27.4
+1.50
+E.ON stock trading volume5
+1.50
+(€ in billions)
+33.9
+31.4
+1.10
+1.00
+¹Adjusted for extraordinary effects.
+1.00
+76
+²For the respective financial year; the 2015 figure is management's proposed dividend.
+3Xetra.
+"Based on ordinary shares outstanding.
+France 12%
+Our most recent survey shows that we have roughly 75 percent
+institutional investors and 25 percent retail investors. Investors
+in Germany hold about 37 percent of our stock, those outside
+Germany about 63 percent. These percentages are based on
+the total number of investors we were able to identify and do
+not include treasury shares.
+Retail
+Corporate Profile
+18
+17
+We operate in the following regions: Germany, the United
+Kingdom, Sweden, Italy, France, Benelux, Hungary, the Czech
+Republic, Slovakia, and Romania.
+Ten regional units manage our operating business in Europe.
+They are responsible for sales, regional energy networks, and
+distributed generation. They are also close partners of the
+global units operating in their respective region, for which they
+provide a broad range of important functions, such as HR
+management and accounting. In addition, they are the sole
+point of contact for all stakeholders, including policymakers,
+government agencies, trade associations, and the media.
+Regional Units
+In 2015 the Exploration & Production segment operated in the
+following focus regions: the U.K. and Norwegian North Sea and
+Russia.
+Exploration & Production
+As the link between E.ON and the world's wholesale energy
+markets, our Global Commodities unit buys and sells electric-
+ity, natural gas, liquefied natural gas, oil, coal, freight, and
+carbon allowances. It also manages and develops assets and
+contracts at several phases of the gas value chain, such as
+pipelines, long-term supply contracts, and storage facilities.
+Global Commodities
+Our Renewables global unit is helping to drive renewables
+growth in many countries across Europe and the world.
+Renewables are good for the environment and have great
+potential as a business, which is why we are steadily increas-
+ing renewables' share of our generation portfolio and aim
+to play a leading role in this growing market. We continually
+seek out new solutions and technologies that will make the
+energy supply more environmentally friendly. We therefore
+make significant investments in renewables.
+Renewables
+The Generation global unit consists of all our conventional
+(fossil, biomass, and nuclear) generation assets in Europe. It
+manages and optimizes these assets across national boundaries.
+Our generation fleet is one of the biggest and most efficient in
+Europe. We have major asset positions in Germany, the United
+Kingdom, Sweden, France, and the Benelux countries, giving us
+one of the broadest geographic footprints among European
+power producers. We also have one of the most balanced fuel
+mixes in our industry.
+Generation
+Another global unit called Technology brings together compre-
+hensive project-development, project-delivery, and engineering
+expertise to support the construction of new assets and the
+operation of existing assets across the Group. This unit also
+coordinates our Group-wide research and development projects
+for the E.ON Innovation Centers.
+Four of our global units are reportable segments: Generation,
+Renewables, Global Commodities, and Exploration & Production.
+Global Units
+In view of the planned sale of our operations in Italy and Spain,
+we applied IFRS 5 and reclassified our regional units in these
+countries as discontinued operations from the fourth quarter
+of 2014. By contrast, our generation operations in Italy and
+Spain are included in our 2014 and 2015 reporting. The trans-
+actions for our activities in Spain and our generation opera-
+tions in Italy have now been completed. Following a strategic
+review of our power and gas sales business in Italy, in early
+August 2015 we decided to retain and continue developing
+this business. We therefore adjusted our 2015 and 2014 num-
+bers, including energy-related numbers, to exclude the Spain
+regional unit only and no longer provide commentary on its
+business performance. In addition, we reclassified Exploration
+& Production's operations in the U.K. North Sea as a disposal
+group; we sold our Norwegian operations at the end of 2015
+and expect the sale of the U.K. operations to close in the first
+half of 2016. Finally, we transferred the Germany regional unit's
+wholesale sales business to the Global Commodities unit and
+adjusted the prior-year figures accordingly.
+In addition, we intend to selectively expand our distributed-
+energy business. The E.ON Connecting Energies business unit
+focuses on providing customers with comprehensive distributed-
+energy solutions. We report this unit under Other EU Countries.
+Shareholder Structure by Group¹
+Russia is a special-focus country, where our business centers
+on power generation. This business is not integrated into the
+Generation global unit because of its geographic location and
+because Russia's power system is not part of Europe's inte-
+grated grid.
+Management System
+investors 25%
+Institutional
+investors 75%
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2015).
+Shareholder Structure by Country/Region¹
+Investor Relations
+Our investor relations continue to be founded on four principles:
+openness, continuity, credibility, and equal treatment of all
+investors. Our mission is to provide prompt, precise, and relevant
+information at our periodic conferences and road shows, at
+eon.com, and when we meet personally with investors. Con-
+tinually communicating with them and strengthening our rela-
+tionships with them are essential for good investor relations.
+We used the forum of E.ON's quarterly reporting to provide
+the greatest-possible transparency on the developments at
+our business units. We also held special information events
+focusing on specific businesses.
+In September we informed analysts and investors that E.ON
+will retain responsibility for the remaining operation and
+decommissioning of its nuclear generating capacity in Germany
+and will not transfer it to Uniper. In December we held a tele-
+conference and a number of road shows to present detailed
+information about E.ON's renewables business.
+Want to find out more?
+eon.com/investors
+You can contact us at:
+investorrelations@eon.com
+Rest of world 6%.
+Alongside our main financial management key figures, this
+Combined Group Management Report includes other financial
+and non-financial key performance indicators ("KPIs") to high-
+light aspects of our business performance and our sustainability
+performance vis-à-vis all our stakeholders: our employees,
+customers, shareholders, bond investors, and the countries in
+which we operate. Operating cash flow, return on average
+capital employed ("ROACE"), and value added are examples of
+our other financial KPIs. Among the KPIs of our sustainability
+performance are our carbon emissions, carbon intensity, and
+TRIF (which measures work-related injuries and illnesses).
+The sections entitled Corporate Sustainability and Employees
+contain explanatory information about these KPIs. However,
+these KPIs are not the focus of the ongoing management of
+our businesses.
+E.ON presents its financial condition using, among other key
+figures, debt factor. A key objective of our finance strategy is
+for E.ON to have an efficient capital structure. Our debt factor
+is equal to our economic net debt divided by our EBITDA (for
+more information, see the section entitled Finance Strategy
+on page 41). We actively manage our capital structure. If our
+debt factor is significantly above our target, we need to main-
+tain strict investment discipline. We might also take addi-
+tional countermeasures.
+We also report our earnings using underlying net income,
+which is an earnings figure after interest income, income
+taxes, and non-controlling interests that has been adjusted
+to exclude certain special effects. In addition to the EBITDA
+adjustments described above, underlying net income also
+excludes income/loss from discontinued operations (after taxes
+and non-controlling interests) as well as special tax effects.
+marking to market of derivatives). Consequently, EBITDA is
+unaffected by investment and depreciation cycles and also
+provides an indication of our cash-effective earnings (see the
+commentary on pages 35 and 39 of the Combined Group
+Management Report and in Note 33 of the Consolidated
+Financial Statements).
+Our key figure for purposes of internal management control
+and as an indicator of our business units' long-term earnings
+power is earnings before interest, taxes, depreciation, and
+amortization ("EBITDA"), which we adjust to exclude certain
+extraordinary items. These items include net book gains,
+restructuring expenditures, impairment charges, and non-
+operating earnings (which include, among other items, the
+Our key figures for managing our operating business and
+assessing our financial situation are EBITDA, underlying net
+income, cash-effective investments, and debt factor.
+Our corporate strategy aims to deliver sustainable growth in
+shareholder value. We have put in place a Group-wide planning
+and controlling system to assist us in planning and managing
+E.ON as a whole and our individual businesses with an eye to
+increasing their value. This system ensures that our financial
+resources are allocated efficiently. We strive to enhance our
+sustainability performance efficiently and effectively as well.
+We have high expectations for our sustainability performance.
+We embed these expectations progressively more deeply into
+our organization-across all of our businesses, entities, and
+processes and along the entire value chain-by means of bind-
+ing company policies and minimum standards.
+Through our International Markets team, we work with local
+partners to operate renewable and conventional generating
+capacity and distribution network and sales businesses outside
+Europe. We report our power generation business in Russia
+and our activities in Brazil and Turkey under Non-EU Countries.
+The section of the Combined Group Management Report
+entitled Employees contains explanatory information about
+our people strategy.
+With interest rate derivatives included, the share of financial
+liabilities with floating interest rates was 0 percent as of
+December 31, 2015 (2014: 7 percent). Under otherwise unchanged
+circumstances, the volume of financial liabilities with fixed
+interest rates, which amounted to €14.1 billion at year-end 2015,
+would decline to €12.2 billion in 2016 and to €11.1 billion in
+¹Adjusted for extraordinary effects.
+989
+737
+Joint ventures
+31
+63
+Other related parties
+365
+380
+Income from transactions with related companies is generated
+mainly through the delivery of gas and electricity to distrib-
+utors and municipal entities, especially municipal utilities. The
+relationships with these entities do not generally differ from
+those that exist with municipal entities in which E.ON does not
+have an interest.
+Expenses from transactions with related companies are
+generated mainly through the procurement of gas, coal and
+electricity.
+Receivables from related companies consist mainly of trade
+receivables.
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2015, include €393 million (2014: €368 million) in trade
+payables to operators of jointly-owned nuclear power plants.
+These payables bear interest at 1.0 percent or at one-month
+EURIBOR less 0.05 percent per annum (2014: 1.0 percent or
+one-month EURIBOR less 0.05 percent per annum) and have
+no fixed maturity. E.ON continues to have in place with these
+power plants a cost-transfer agreement and a cost-plus-fee
+agreement for the procurement of electricity. The settlement
+of such liabilities occurs mainly through clearing accounts.
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory
+Board of E.ON SE) must be disclosed.
+The total expense for 2015 for members of the Management
+Board amounted to €10.8 million (2014: €9.9 million) in short-
+term benefits and €5.6 million (2014: €0 million) in termination
+benefits, as well as €3.0 million (2014: €2.8 million) in post-
+employment benefits. Additionally taken into account in 2015
+were actuarial gains of €9.3 million (2014: actuarial losses of
+€11.7 million). The cost of post-employment benefits is equal to
+the service and interest cost of the provisions for pensions.
+The expense determined in accordance with IFRS 2 for the
+tranches of the E.ON Share Performance Plan and the E.ON
+Share Matching Plan in existence in 2015 was €0.6 million
+(2014: €6.0 million).
+Provisions for the E.ON Share Performance Plan and the E.ON
+Share Matching Plan amounted to €9.5 million as of Decem-
+ber 31, 2015 (2014: €10.4 million).
+The members of the Supervisory Board received a total of
+€3.2 million for their activity in 2015 (2014: €3.1 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts with
+subsidiaries totaling €0.5 million (2014: €0.5 million).
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 82 through 95.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Associated companies
+1,180
+1,385
+Liabilities
+178
+Expenses
+1,416
+1,697
+Associated companies
+1,206
+1,395
+Joint ventures
+21
+Other related parties
+189
+Consolidated Financial Statements
+Tables and Explanations
+102
+200
+1,318
+1,740
+Associated companies
+675
+1,057
+Joint ventures
+457
+448
+Other related parties
+186
+235
+Receivables
+(33) Segment Information
+Led by its Group Management in Düsseldorf, Germany, the
+E.ON Group ("E.ON" or the "Group") is segmented into global
+and regional units, which are reported here in accordance
+with IFRS 8, "Operating Segments" ("IFRS 8"). The Germany
+regional unit's trading business serving major customers has
+been transferred to the Global Commodities unit. Following
+a strategic review of the power and gas sales business in Italy,
+E.ON decided in early August 2015 to retain and continue devel-
+oping this business within the Italy regional unit. The corre-
+sponding prior-year figures have been adjusted accordingly.
+Global Units
+7,557
+8,376
+Depreciation and amortization
+-3,052
+-3,561
+Impairments (-)/Reversals (+) 2
+-136
+-120
+EBIT¹
+4,369
+4,695
+EBITDA¹
+-1,572
+450
+589
+Economic interest income (net)
+Net book gains/losses
+Restructuring/cost-management
+expenses
+E.ON 2.0 restructuring expenses
+Impairments (-)/Reversals (+)2,3
+Other non-operating earnings
+Income/Loss from continuing
+operations before taxes
+Income taxes
+-217
+-133
+-293
+-363
+-8,430
+-1,613
+182
+2014
+€ in millions
+The global units are reported separately in accordance with
+IFRS 8.
+Generation
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+Renewables
+E.ON also takes a global approach to managing its carbon-
+sourcing and renewables businesses. The objective at this
+unit is to extend the Group's leading position in the growing
+renewables market.
+Global Commodities
+As the link between E.ON and the world's wholesale energy
+markets, the Global Commodities global unit buys and sells
+electricity, natural gas, liquefied natural gas (LNG), oil, coal,
+freight, biomass, and carbon allowances. It additionally man-
+ages and develops facilities and contracts at different levels
+in the gas market's value chain.
+Exploration & Production
+E.ON's exploration and production business is a segment
+active in the focus regions North Sea (U.K., Norway) and Russia.
+Regional Units
+E.ON's distribution and sales operations in Europe are managed
+by ten regional units in total.
+2015
+For segment reporting purposes, the Germany, UK, Sweden,
+Czechia and Hungary regional units are reported separately.
+E.ON's power generation business in Russia is presented
+under Non-EU Countries as a focus region. The activities in
+Brazil and Turkey are additionally reported as "Other Non-EU
+Countries" within this segment.
+Group Management/Consolidation
+Group Management/Consolidation contains E.ON SE itself,
+the interests held directly by E.ON SE, and the consolidation
+effects that take place at Group level.
+The change in EBITDA relative to the previous year resulted
+primarily from the earnings of the aforementioned company,
+especially higher additions to provisions caused by changes
+in interest rates. They were offset by consolidation effects
+related to the measurement of provisions for emission rights.
+195
+196 Notes
+EBITDA is the key measure at E.ON for purposes of internal
+management control and as an indicator of a business's long-
+term earnings power. EBITDA is derived from income/loss
+before interest, taxes, depreciation and amortization (including
+impairments and reversals) and adjusted to exclude extra-
+ordinary effects. The adjustments include net book gains and
+restructuring/cost-management expenses, as well as impair-
+ments and other non-operating income and expenses. Income
+from investment subsidies for which liabilities are recognized
+is included in EBITDA.
+Economic net interest income is calculated by taking the net
+interest income shown in the income statement and adjusting
+it using economic criteria and excluding extraordinary effects,
+namely, the portions of interest expense that are non-operating.
+Net book gains are equal to the sum of book gains and losses
+from disposals, which are included in other operating income
+and other operating expenses. Restructuring and cost-manage-
+ment expenses are non-recurring in nature. Other non-oper-
+ating earnings encompass other non-operating income and
+expenses that are unique or rare in nature. Depending on the
+particular case, such income and expenses may affect differ-
+ent line items in the income statement. For example, effects
+from the marking to market of derivatives are included in other
+operating income and expenses, while impairment charges
+on property, plant and equipment are included in depreciation,
+amortization and impairments.
+Due to the adjustments, the key figures by segment may
+differ from the corresponding IFRS figures reported in the
+Consolidated Financial Statements.
+The following table shows the reconciliation of our EBITDA to
+net income/loss as reported in the IFRS Consolidated Financial
+Statements:
+Net Income
+Those units not reported separately are instead reported
+collectively as "Other regional units." They include the France,
+Benelux, Slovakia, Romania and Italy units and, through
+December 2014, the Spain unit (see Note 4 for further dis-
+cussion of the Italy and Spain units). Additionally reported
+here are the activities of E.ON Connecting Energies, which
+concentrates on providing decentralized, complete solutions.
+-5,457
+Other related parties
+58
+The net gains and losses in the amortized cost category are
+due primarily to interest on financial liabilities, reduced by
+capitalized construction-period interest.
+The net gains and losses in the held-for-trading category
+encompass both the changes in fair value of the derivative
+financial instruments and the gains and losses on realization.
+The fair value measurement of commodity derivatives and
+of realized gains on currency derivatives is the most important
+factor in the net result for this category.
+Risk Management
+Principles
+The prescribed processes, responsibilities and actions con-
+cerning financial and risk management are described in detail
+in internal risk management guidelines applicable throughout
+the Group. The units have developed additional guidelines of
+their own within the confines of the Group's overall guidelines.
+To ensure efficient risk management at the E.ON Group, the
+Trading (Front Office), Financial Controlling (Middle Office) and
+Financial Settlement (Back Office) departments are organized
+as strictly separate units. Risk controlling and reporting in the
+areas of interest rates, currencies, credit and liquidity manage-
+ment is performed by the Financial Controlling department,
+while risk controlling and reporting in the area of commodities
+is performed at Group level by a separate department.
+E.ON uses a Group-wide treasury, risk management and
+reporting system. This system is a standard information tech-
+nology solution that is fully integrated and is continuously
+updated. The system is designed to provide for the analysis
+and monitoring of the E.ON Group's exposure to liquidity,
+foreign exchange and interest risks. The units employ estab-
+lished systems for commodities. Credit risks are monitored
+and controlled on a Group-wide basis by Financial Controlling,
+with the support of a standard software package. The com-
+modity positions of most of the global and regional units are
+transferred to the Global Commodities unit for risk manage-
+ment and optimization purposes, based on a transfer-pricing
+mechanism. Special risk management, coordinated with Group
+Management, applies in a small number of exceptional cases.
+189
+190 Notes
+Separate Risk Committees are responsible for the maintenance
+and further development of the strategy set by the Manage-
+ment Board of E.ON SE with regard to commodity, treasury
+and credit risk management policies.
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON con-
+sist of ensuring ability to pay at all times, the timely satisfac-
+tion of contractual payment obligations and the optimization
+of costs within the E.ON Group.
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+E.ON SE determines the Group's financing requirements on
+the basis of short- and medium-term liquidity planning. The
+financing of the Group is controlled and implemented on a
+forward-looking basis in accordance with the planned liquidity
+requirement or surplus. Relevant planning factors taken into
+consideration include operating cash flow, capital expenditures,
+divestments, margin payments and the maturity of bonds
+and commercial paper.
+2. Price Risks
+In the normal course of business, the E.ON Group is exposed
+to risks arising from price changes in foreign exchange, inter-
+est rates, commodities and asset management. These risks
+create volatility in earnings, equity, debt and cash flows from
+period to period. E.ON has developed a variety of strategies
+to limit or eliminate these risks, including the use of derivative
+financial instruments, among others.
+3. Credit Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group
+to identify, measure and control credit risks.
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from profit-at-risk ("PaR"),
+value-at-risk ("VaR") and sensitivity analyses are "forward-
+looking statements" that involve risks and uncertainties. Actual
+results could differ materially from those projected due to
+actual, unforeseeable developments in the global financial
+markets. The methods used by the Company to analyze risks
+should not be considered forecasts of future events or losses.
+For example, E.ON faces certain risks that are either non-
+financial or non-quantifiable. Such risks principally include
+country risk, operational risk, regulatory risk and legal risk,
+which are not represented in the following analyses.
+Foreign Exchange Risk Management
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+Because it holds interests in businesses outside of the euro
+area, currency translation risks arise within the E.ON Group.
+Fluctuations in exchange rates produce accounting effects
+attributable to the translation of the balance sheet and income
+statement items of the foreign consolidated Group companies
+included in the Consolidated Financial Statements. Translation
+risks are hedged through borrowing in the corresponding
+local currency, which may also includes shareholder loans in
+foreign currency. In addition, derivative and primary financial
+instruments are employed as needed. The hedges qualify for
+hedge accounting under IFRS as hedges of net investments
+in foreign operations. The Group's translation risks are reviewed
+at regular intervals and the level of hedging is adjusted when-
+ever necessary. The respective debt factor and the enterprise
+value denominated in the foreign currency are the principal
+criteria governing the level of hedging.
+CEO Letter
+Report of the Supervisory Board
+In addition to interest income and expenses from financial
+receivables, the net gains and losses in the loans and receiv-
+ables category consist primarily of valuation allowances on
+trade receivables. Gains and losses on the disposal of avail-
+able-for-sale securities and equity investments are reported
+under other operating income and other operating expenses,
+respectively.
+722
+-1,070
+-778
+-747
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Financial guarantees with a total nominal volume of €26 million
+(2014: €87 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees; a book
+value of €8 million (2014: €11 million) has been recognized.
+For financial liabilities that bear floating interest rates, the
+rates that were fixed on the balance sheet date are used to
+calculate future interest payments for subsequent periods
+as well. Financial liabilities that can be terminated at any time
+are assigned to the earliest maturity band in the same way
+as put options that are exercisable at any time. All covenants
+were complied with during 2015.
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+The net gains and losses from financial instruments by IAS 39
+category are shown in the following table:
+Net Gains and Losses by Category¹
+€ in millions
+E.ON Stock
+Loans and receivables
+Held for trading
+Amortized cost
+Total
+¹The categories are described in detail in Note 1.
+2015
+2014
+-496
+977
+-96
+722
+-450
+1,166
+Available for sale
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+The E.ON Group is also exposed to operating and financial
+transaction risks attributable to foreign currency transactions.
+These risks arise for the Group companies primarily from
+physical and financial trading in commodities, from intragroup
+relationships and from capital spending in foreign currency.
+The subsidiaries are responsible for controlling their operating
+currency risks. E.ON SE coordinates hedging throughout the
+Group and makes use of external derivatives as needed.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+The levels and backgrounds of financial assets received as
+collateral are described in more detail in Notes 18 and 26.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements.
+Exchange-traded forward and option contracts as well as
+exchange-traded emissions-related derivatives having an aggre-
+gate nominal value of €44,121 million as of December 31, 2015,
+(2014: €42,759 million) bear no credit risk. For the remaining
+financial instruments, the maximum risk of default is equal to
+their carrying amounts.
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest
+money at leading local banks. Standardized credit assessment
+and limit-setting is complemented by daily monitoring of CDS
+levels at the banks and at other significant counterparties.
+Asset Management
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 25), financial investments totaling €5.4 billion (2014:
+€5.4 billion) were held predominantly by German E.ON Group
+companies as of December 31, 2015.
+These financial assets are invested on the basis of an accumu-
+lation strategy (total-return approach), with investments
+broadly diversified across the money market, bond, real estate
+and equity asset classes. Asset allocation studies are per-
+formed at regular intervals to determine the target portfolio
+structure. The majority of the assets is held in investment
+funds managed by external fund managers. Corporate Asset
+Management at E.ON SE, which is part of the Company's
+Finance Department, is responsible for continuous monitoring
+of overall risks and those concerning individual fund managers.
+Risk management is based on a risk budget whose usage is
+monitored regularly. The three-month VaR with a 98-percent
+confidence interval for these financial assets was €189 million
+(2014: €240 million).
+In addition, the mutual insurance fund Versorgungskasse
+Energie VVaG ("VKE") manages financial assets that are almost
+exclusively dedicated to the coverage of benefit obligations
+at E.ON Group companies in Germany; these assets totaled
+€1.1 billion at year-end 2015 (2014: €1.0 billion). The assets
+at VKE do not constitute plan assets under IAS 19 (see Note 24)
+and are shown as non-current and current assets on the bal-
+ance sheet. The majority of the diversified portfolio, consisting
+of money market instruments, bonds, real estate and equities,
+is held in investment funds managed by external fund man-
+agers. VKE is subject to the provisions of the Insurance Super-
+vision Act ("Versicherungsaufsichtsgesetz" or "VAG") and its
+operations are supervised by the German Federal Financial
+Supervisory Authority ("Bundesanstalt für Finanzdienstleis-
+tungsaufsicht" or "BaFin"). Financial investments and contin-
+uous risk management are conducted within the regulatory
+confines set by BaFin. The three-month VaR with a 98-percent
+confidence interval for these financial assets was €58.0 million
+(2014: €35.3 million).
+193
+Strategy and Objectives
+194 Notes
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, the most significant of which
+are associated companies accounted for under the equity
+method and their subsidiaries. Additionally reported as related
+parties are joint ventures, as well as equity interests carried
+at fair value and unconsolidated subsidiaries, which are of
+lesser importance as regards the extent of the transactions
+described in the following discussion. Transactions with related
+parties are summarized as follows:
+Related-Party Transactions
+€ in millions
+2015
+2014
+Income
+1,486
+1,753
+Associated companies
+1,246
+Joint ventures
+(32) Transactions with Related Parties
+1,480
+95
+E.ON Stock
+CEO Letter
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated
+both by external financing in a variety of foreign currencies,
+and by shareholder loans from within the Group denominated
+in foreign currency. Financial transaction risks are generally
+fully hedged.
+The one-day value-at-risk (99 percent confidence) from the
+translation of deposits and borrowings denominated in foreign
+currency, plus foreign-exchange derivatives, was €181 million as
+of December 31, 2015 (2014: €143 million) and resulted primarily
+from the positions in British pounds and Swedish kronor.
+Interest Risk Management
+E.ON is exposed to profit risks arising from floating-rate finan-
+cial liabilities and from interest rate derivatives. Positions
+based on fixed interest rates, on the other hand, are subject
+to changes in fair value resulting from the volatility of market
+rates. E.ON seeks a specific mix of fixed- and floating-rate
+debt over time. The long-term orientation of the business
+model in principle means fulfilling a high proportion of financ-
+ing requirements at fixed rates, especially within the medium-
+term planning period. This also involves the use of interest
+rate derivatives.
+2017. The effective interest rate duration of the financial lia-
+bilities, including interest rate derivatives, was 9.6 years as of
+December 31, 2015 (2014: 7.4 years). The volume-weighted
+average interest rate of the financial liabilities, including inter-
+est rate derivatives, was 5.9 percent as of December 31, 2015
+(2014: 5.6 percent).
+As of December 31, 2015, the E.ON Group held interest rate
+derivatives with a nominal value of €3,386 million (2014:
+€4,893 million).
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for inter-
+nal risk controlling and reflects the economic position of
+the E.ON Group. A one-percentage-point upward or downward
+change in interest rates (across all currencies) would neither
+raise nor lower interest charges in the subsequent fiscal year
+(2014: no increase or decrease).
+Commodity Price Risk Management
+The E.ON portfolio of physical assets, long-term contracts
+and end-customer sales is exposed to substantial risks from
+fluctuations in commodity prices. The principal commodity
+prices to which E.ON is exposed relate to electricity, gas, hard
+coal, iron ore, freight charters, petroleum products, LNG and
+emission certificates.
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the
+value of the portfolio while reducing the potential negative
+deviation from target EBITDA.
+The maximum permissible risk is determined centrally by the
+Management Board and allocated over a three-year planning
+horizon into a decentralized limit structure in coordination
+with the units. Before limits are approved, investment plans
+Report of the Supervisory Board
+191
+and all other known obligations and quantifiable risks are
+taken into account. Ongoing risk controlling and reporting,
+including portfolio optimization, is steered centrally by Group
+Management and operationally managed within the units
+independently from trading operations. There is a clear system
+of internal controls in place that follows best-practice indus-
+try standards of risk management.
+From a forward-looking perspective, risks are assessed using
+a profit-at-risk metric that quantifies the risk by taking into
+account the size of the open position, price levels and price
+volatilities, as well as the underlying market liquidity in each
+market. Profit-at-risk reflects the potential negative change
+in the market value of the open position if it is closed as
+quickly as market liquidity allows with a 5-percent chance of
+being exceeded.
+The profit-at-risk for the financial and physical commodity
+positions covering the planning horizon of up to three years
+amounted to €1,042 million as of December 31, 2015 (2014:
+€1,412 million).
+As of December 31, 2015, the E.ON Group has entered into
+electricity, gas, coal, oil and emissions-related derivatives with
+a nominal value of €130,595 million (2014: €150,773 million).
+A key foundation of the risk management system is the Group-
+wide Commodity Risk Policy and the corresponding internal
+policies of the units. These specify the control principles for
+commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+Commodity exposures and risks are aggregated across the
+Group on a monthly basis and reported to the members of
+the Risk Committee.
+The commodity risk management as presented above reflects
+the Group's internal management reporting and also covers
+the financial instruments within the scope of IFRS 7.
+Credit Risk Management
+In order to minimize credit risk arising from operating activi-
+ties and from the use of financial instruments, the Company
+enters into transactions only with counterparties that satisfy
+the Company's internally established minimum requirements.
+Maximum credit risk limits are set on the basis of internal
+and (where available) external credit ratings. The setting and
+monitoring of credit limits is subject to certain minimum
+requirements, which are based on Group-wide credit risk
+management guidelines. Long-term operating contracts and
+asset management transactions are not comprehensively
+included in this process. They are monitored separately at the
+level of the responsible units.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature
+of the operating activities and the credit risk, additional credit
+risk monitoring and controls are performed both by the units
+and by Group Management. Monthly reports on credit limits,
+including their utilization, are submitted to the Risk Commit-
+tee. Intensive, standardized monitoring of quantitative and
+qualitative early-warning indicators, as well as close monitoring
+of the credit quality of counterparties, enable E.ON to act early
+in order to minimize risk.
+To the extent possible, pledges of collateral are negotiated
+with counterparties for the purpose of reducing credit risk.
+Accepted as collateral are guarantees issued by the respective
+parent companies or evidence of profit-and-loss-pooling
+agreements in combination with letters of awareness. To a
+lesser extent, the Company also requires bank guarantees
+and deposits of cash and securities as collateral to reduce credit
+risk. Risk-management collateral was accepted in the amount
+of €6,304 million.
+192 Notes
+150
+This global unit consists of the Group's conventional (fossil
+and nuclear) generation assets in Europe. It manages and
+optimizes these assets across national boundaries.
+-5,543
+384
+384
+589
+622
+279
+290
+5
+7
+5
+5
+EBITDA¹
+Equity-method earnings²
+Operating cash flow before interest and taxes
+Investments
+¹Adjusted for extraordinary effects.
+543
+546
+710
+601
+289
+-116
+155
+121
+2,221
+2,224
+2,223
+128
+Sweden
+Czechia
+€ in millions
+External sales
+Intersegment sales
+Sales
+2015
+2014
+2015
+2014
+2015
+405
+2014
+9,303
+1,947
+2,136
+2,107
+2,093
+31
+9,546
+43
+9,346
+88
+2,035
+87
+117
+9,515
+331
+140
+141
+361
+517
+-39
+-78
+322
+439
+-9
+-77
+-9
+-77
+Operating cash flow before interest and taxes
+Equity-method earnings²
+379
+-22
+-11
+357
+491
+Investments
+180
+347
+114
+356
+294
+703
+502
+UK
+EBITDA¹
+1,123
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+€ in millions
+External sales
+Intersegment sales
+Sales
+Financial Information by Business Segment-Presentation of Non-EU Countries
+Russia
+2015
+2014
+Other Non-EU Countries
+2015
+Non-EU Countries
+1,518
+2014
+2014
+1,123
+1,518
+1,123
+1,518
+0
+0
+1,123
+1,518
+0
+0
+2015
+Financial Information by Business Segment-Presentation of Other EU Countries
+322
+115
+The earnings reported for 2015 reflected especially the recog-
+nition of impairment charges of €8.8 billion and reversals of
+€0.4 billion. Impairment tests were triggered primarily by revised
+assumptions concerning the long-term development of elec-
+tricity and primary energy prices, supported by well-known
+forecasting institutions and E.ON's own estimates, and by the
+political situation and its impact on expected profitability.
+Impairment charges were particularly necessary at the Gener-
+ation global unit. Additional impairments were recognized at
+the Exploration & Production, Renewables and Global Commodi-
+ties units, as well as in Russia and within Other EU Countries.
+In 2014, impairment charges were recognized particularly at
+the Generation, Renewables, Global Commodities and Explo-
+ration & Production units, and on the activities in the Non-EU
+Countries segment.
+Other non-operating earnings include, among other things, the
+marking to market of derivatives used to shield the operating
+businesses from price fluctuations. As of December 31, 2015,
+this marking to market produced a positive effect of €533 mil-
+lion (2014: €540 million). Non-operating earnings in 2015 were
+especially adversely affected by costs associated with the
+Oskarshamn and Ringhals power plants; this effect was offset
+by income from passing on costs that arose in connection
+with the generating units Oskarshamn 1 and 2 to the co-owner
+of these units. Other negative effects arose from valuation
+allowances on inventories and securities. In 2014, other non-
+operating earnings were adversely affected by write-downs
+on gas inventories and securities and within the activities in
+the Non-EU Countries, and by expenses incurred in connection
+with bond buybacks.
+An additional adjustment to the internal profit analysis relates
+to net interest income, which is presented based on economic
+considerations. Economic net interest income is calculated by
+taking the net interest income from the income statement
+and adjusting it using economic criteria and excluding certain
+extraordinary (that is, non-operating) effects.
+Economic Net Interest Income
+€ in millions
+2015
+2014
+Interest and similar expenses (net)
+as shown in the Consolidated
+Statements of Income
+-1,330
+-1,811
+Non-operating interest expense (+)/
+income (-)
+Restructuring and cost-management expenses increased by
+€14 million in total over the previous year. As in 2014, the
+expenses were primarily attributable to the internally-initiated
+cost-reduction programs and the strategic realignment.
+-242
+Economic interest income (net)
+-1,572
+-1,613
+Due in large part to the improved net financial position, eco-
+nomic net interest income, at -€1,572 million, was above its
+2014 level of -€1,613 million.
+Transactions within the E.ON Group are generally effected at
+market prices.
+197
+198 Notes
+Financial Information by Business Segment
+€ in millions
+External sales
+Intersegment sales
+198
+Sales
+The 2014 figure reflects book gains on the sale of securities
+and on the disposals of an equity interest in a natural-gas
+utility in Germany, a majority stake in a gas company in the
+Czech Republic, an equity interest in a Finnish gas company
+and various micro thermal power plants in Sweden, as well as
+on the sale of network segments in Germany.
+Strategy and Objectives
+-2,398
+-835
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+Income/Loss from continuing
+operations
+-6,378
+-2,968
+Income/Loss from discontinued opera-
+tions, net
+1
+-162
+Net income/loss
+-6,377
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+-3,130
+-6,999
+-3,160
+622
+30
+¹Adjusted for extraordinary effects.
+2Impairments differ from the amounts reported in accordance with IFRS due to
+impairments on companies accounted for under the equity method and impair-
+ments on other financial assets.
+³Recorded under non-operating earnings.
+Net book gains in 2015 were approximately €139 million
+below the prior-year level. The book gains resulted primarily
+from the sale of securities and from the disposals of the
+remaining stake in E.ON Energy from Waste, the exploration
+and production activities in the Norwegian North Sea and
+network segments in Germany, as well as from the sale of
+activities in Italy and Finland.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Attributable to shareholders of E.ON SE
+Attributable to non-controlling interests
+EBITDA¹
+-570
+Operating cash flow before interest and taxes
+83,326
+1,472
+2,215
+1,346
+1,500
+223
+106
+60
+53
+16
+-3
+87,862
+126
+1,500
+1,769
+1,152
+1,161
+-145
+693
+563
+862
+1,106
+Equity-method earnings²
+113
+128
+2,397
+1,222
+10,285
+2,486
+Investments
+¹Adjusted for extraordinary effects.
+Generation
+Renewables
+Global Commodities
+2015
+2014
+2014
+2015
+2014
+1,488
+2015
+646
+7,537
+15,359
+2,561
+1,715
+1,840
+15,115
+6,049
+67,967
+72,747
+682
+7,724
+-9
+439
+63
+48
+8,376
+7,557
+-556
+-614
+322
+0
+1,756
+1,761
+82
+2,157
+113
+9
+41
+1,136
+895
+113,095
+116,218
+0
+113,095
+1,775
+-77
+491
+1
+43
+116,218
+85
+703
+294
+883
+1,035
+745
+881
+64
+97
+1
+8,321
+-12
+-545
+357
+2,093
+2,062
+1,045
+1,733
+1,081
+925
+256
+396
+7,039
+236
+-26,541
+-26,305
+2014
+1,518
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+E.ON Group
+Consolidation
+Group Management/
+Non-EU Countries
+Other EU Countries
+Germany
+Production
+Exploration &
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+4,174
+2014
+-24,364
+2015
+2015
+1,123
+20,587
+20,506
+19,169
+19,337
+2,118
+1,731
+-24,565
+799
+701
+465
+379
+479
+481
+201
+1,518
+1,123
+19,788
+19,805
+18,704
+18,958
+1,639
+1,250
+2014
+4,637
+Differ-
+Other regional units
+Power S.A.S), FR, Paris¹
+100.0
+E.ON Metering GmbH, DE, Unterschleißheim²
+100.0
+E.ON France S.A.S. (since 2016 Uniper France S.A.S.), FR,
+Paris¹
+E.ON NA Capital LLC, US, Wilmington¹
+100.0
+100.0
+E.ON New Build & Technology B.V. (since 2016 Uniper
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE,
+Düsseldorf¹
+Technologies B.V.), NL, Rotterdam²
+100.0
+100.0
+E.ON Nord Sverige AB, SE, Stockholm¹
+99.8
+100.0
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+E.ON Gas Storage GmbH (since 2016 Uniper Energy
+Storage GmbH), DE, Essen¹
+100.0
+E.ON North America Finance, LLC, US, Wilmington¹
+100.0
+E.ON Gas Sverige AB, SE, Malmö¹
+100.0
+E.ON Off Grid Solution GmbH, DE, Düsseldorf²
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö¹
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+E.ON France Power S.A.S (since 2016 Uniper France
+100.0
+E.ON INTERNATIONAL FINANCE B.V., NL, Rotterdam¹
+100.0
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Invest GmbH, DE, Grünwald²
+100.0
+E.ON Fernwärme GmbH (since 2016 Uniper Wärme
+E.ON IT UK Limited, GB, Coventry²
+100.0
+GmbH), DE, Gelsenkirchen¹
+100.0
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Kärnkraft Finland AB, FI, Kajaani²
+100.0
+E.ON Limited, GB, Coventry²
+100.0
+France Energy Solutions S.A.S), FR, Paris¹
+100.0
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+E.ON France Energy Solutions S.A.S (since 2016 Uniper
+E.ON Pension Fund S.C.S., LU, Luxembourg²
+99.8
+100.0
+E.ON Försäljning Sverige AB, SE, Malmö¹
+100.0
+E.ON Kernkraft GmbH, DE, Hanover¹
+100.0
+E.ON First Future Energy Holding B.V., NL, Rotterdam²
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+100.0
+100.0
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+E.ON Retail Limited, GB, Coventry²
+100.0
+E.ON Rhein-Ruhr Ausbildungs-GmbH, DE, Essen²
+100.0
+E.ON Risk Consulting GmbH (since 2016 Uniper Risk
+Consulting GmbH), DE, Düsseldorf¹
+Report of the Supervisory Board
+E.ON UK Secretaries Limited, GB, Coventry2
+E.ON UK Technical Services Limited, GB, Edinburgh²
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+100.0
+100.0
+E.ON US Corporation, US, Wilmington¹
+100.0
+E.ON România S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON US Energy LLC, US, Wilmington¹
+100.0
+E.ON Ruhrgas Austria GmbH, AT, Vienna¹
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf¹, 8
+100.0
+E.ON Ruhrgas BBL B.V. (since 2016 Uniper
+100.0
+CEO Letter
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+E.ON Perspekt GmbH, DE, Düsseldorf²
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Portfolio Solution GmbH (since 2016 Uniper Market
+Solutions GmbH), DE, Düsseldorf²
+100.0
+E.ON Generation Belgium N.V. (since 2016 Uniper
+Generation Belgium N.V.), BE, Vilvoorde¹
+100.0
+E.ON Power Innovation Pty Ltd, AU, Brisbane²
+100.0
+E.ON Generation GmbH (since 2016 Uniper Generation
+GmbH), DE, Hanover¹
+100.0
+E.ON Global Commodities Canada Inc. (since 2016 Uniper
+Global Commodities Canada Inc.), CA, Toronto²
+E.ON Power Plants Belgium BVBA, BE, Brussels²
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+E.ON Produzione S.p.A., IT, Sassari¹
+100.0
+100.0
+100.0
+100.0
+E.ON Regenerabile România S.R.L., RO, laşi²
+100.0
+E.ON Global Commodities SE (since 2016 Uniper Global
+Commodities SE), DE, Düsseldorf¹
+100.0
+E.ON Real Estate GmbH, DE, Essen²
+E.ON Gasification Development AB, SE, Malmö¹
+100.0
+100.0
+E.ON RAG Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+E.ON RE Investments LLC, US, Wilmington¹
+E.ON Global Commodities North America LLC (since 2016
+Uniper Global Commodities North America LLC), US,
+Wilmington¹
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+100.0
+E.ON Exploration & Production GmbH (since 2016 Uniper
+Exploration & Production GmbH), DE, Düsseldorf¹,8
+100.0
+E.ON Insurance Services GmbH, DE, Essen²
+E.ON Climate & Renewables UK Limited, GB, Coventry¹
+E.ON Climate & Renewables UK London Array Limited,
+GB, Coventry¹
+100.0
+E.ON Energie Kundenservice GmbH, DE, Landshut¹
+E.ON Energie Odnawialne Sp. z o.o., PL, Szczecin¹
+100.0
+100.0
+100.0
+E.ON Climate & Renewables UK Offshore Wind Limited,
+GB, Coventry¹
+100.0
+E.ON Climate & Renewables UK Operations Limited, GB,
+Coventry¹
+E.ON Energie Real Estate Investment GmbH, DE, Munich²
+E.ON Energie România S.A., RO, Târgu Mureş¹
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+54.8
+100.0
+100.0
+100.0
+E.ON Energienetze Berlin GmbH, DE, Berlin2
+E.ON Climate & Renewables UK Robin Rigg East Limited,
+GB, Coventry¹
+100.0
+E.ON Energies Renouvelables S.A.S. (since 2016 Uniper
+Energies Renouvelables S.A.S.), FR, Paris¹
+100.0
+E.ON Climate & Renewables UK Robin Rigg West Limited,
+GB, Coventry¹
+E.ON Energihandel Nordic AB, SE, Malmö¹
+100.0
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+100.0
+E.ON Climate & Renewables UK Wind Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Zone Six Limited, GB,
+Coventry¹
+100.0
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+E.ON Energy Projects GmbH, DE, Munich¹
+100.0
+100.0
+99.8
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+E.ON Energie Dialog GmbH, DE, Potsdam²
+100.0
+E.ON Elnät Stockholm AB, SE, Malmö¹
+E.ON Elnät Sverige AB, SE, Malmö¹
+100.0
+100.0
+E.ON Climate & Renewables GmbH, DE, Essen¹
+100.0
+E.ON Energetikai Tanácsadó Kft., HU, Budapest²
+100.0
+E.ON Climate & Renewables Italia S.r.I., IT, Milan¹
+100.0
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+E.ON Climate & Renewables North America LLC, US,
+Wilmington¹
+100.0
+E.ON Energiakereskedelmi Kft, HU, Budapest¹
+100.0
+E.ON Climate & Renewables Services GmbH, DE, Essen²
+E.ON Climate & Renewables UK Biomass Limited, GB,
+Coventry¹
+100.0
+E.ON Climate & Renewables UK Humber Wind Limited,
+GB, Coventry¹
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie AG, DE, Düsseldorf¹,8
+E.ON Climate & Renewables UK Blyth Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Developments Limited,
+GB, Coventry¹
+100.0
+100.0
+100.0
+E.ON Energiaszolgáltató Kft., HU, Budapest¹
+E.ON Energiatermelő Kft., HU, Debrecen¹
+100.0
+100.0
+100.0
+E.ON Commodity DMCC, AE, Dubai²
+100.0
+E.ON Energy Trading NL Staff Company 2 B.V. (since 2016
+Uniper Energy Trading NL Staff Company 2 B.V.), NL,
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE,
+Düsseldorf²
+100.0
+Rotterdam²
+100.0
+E.ON Energy Trading NL Staff Company B.V. (since 2016
+Uniper Energy Trading NL Staff Company B.V.), NL,
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE,
+Düsseldorf1,8
+100.0
+E.ON Hálózati Szolgáltató Kft.,,v.a.", HU, Pécs²
+100.0
+Rotterdam²
+100.0
+E.ON Human Resources International GmbH, DE, Hanover 1,8
+100.0
+E.ON Energy Trading S.p.A., IT, Milan¹
+100.0
+E.ON Hungária Energetikai Zártkörűen Működő
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+100.0
+100.0
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf1,8
+100.0
+100.0
+Részvénytársaság, HU, Budapest¹
+E.ON Energy Trading Srbija d.o.o. (since 2016 Uniper
+Energy Trading Srbija d.o.o.), RS, Belgrade²
+E.ON Erőművek Termelő és Üzemeltető Kft. (since 2016
+Uniper Hungary Energetikai Kft.), HU, Budapest¹
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+Stake (%)
+100.0
+E.ON Energy Sales GmbH (since 2016 Uniper Energy
+Sales GmbH), DE, Düsseldorf¹
+100.0
+E.ON Connecting Energies GmbH, DE, Essen 1,8
+100.0
+E.ON Connecting Energies Italia S.r.I., IT, Milan²
+100.0
+E.ON Energy Sales Polska Sp. z o.o. (since 2016 Uniper
+Energy Sales Polska Sp. z o.o.), PL, Warsaw²
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+100.0
+E.ON Energy Services, LLC, US, Wilmington¹
+100.0
+E.ON Connecting Energies SAS, FR, Paris²
+100.0
+E.ON Energy Solutions GmbH, DE, Unterschleißheim²
+100.0
+E.ON Czech Holding AG, DE, Munich 1,8
+E.ON Energy Storage GmbH (since 2016 Uniper Storage
+Innovation GmbH), DE, Essen²
+Stake (%)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+Name, location
+206 Notes
+205
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Name, location
+E.ON Global Commodities UK Limited (since 2016 Uniper
+Global Commodities UK Limited), GB, Coventry²
+100.0
+100.0
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+E.ON Danmark A/S, DK, Frederiksberg¹
+100.0
+E.ON Energy Solutions Limited, GB, Coventry¹
+100.0
+E.ON Energy Southern Africa (Pty) Ltd., ZA, Johannesburg²
+100.0
+100.0
+100.0
+100.0
+ELICA S.r.I., IT, Milan²
+100.0
+Elmregia GmbH, DE, Schöningen
+49.0
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental6
+etatherm GmbH, DE, Potsdam6
+47.5
+25.5
+Első Magyar Szélerőmű Kft., HU, Kulcs²
+74.7
+Etzel Gas-Lager GmbH & Co. KG, DE, Friedeburg5
+75.2
+Elverket Vallentuna AB, SE, Vallentuna
+43.4
+Ergon Overseas Holdings Limited, GB, Coventry¹
+Etzel Gas-Lager Management GmbH, DE, Friedeburg
+EME Distribution No. 2 Limited, GB, Coventry²
+100.0
+ENACO Energieanlagen- und Kommunikationstechnik
+EVG Energieversorgung Gemünden GmbH, DE,
+Gemünden am Main6
+49.0
+GmbH, DE, Maisach6
+26.0
+EVU Services GmbH, DE, Neumünster²
+100.0
+Energetika Malenovice, a.s., CZ, Zlín-Malenovice²
+100.0
+EWC Windpark Cuxhaven GmbH, DE, Munich
+50.0
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+75.2
+50.0
+Elevate Wind Holdco, LLC, US, Wilmington4
+100.0
+49.0
+EEP 2. Beteiligungsgesellschaft mbH, DE, Munich²
+100.0
+Energy Collection Services Limited, GB, Coventry²
+100.0
+EFG Erdgas Forchheim GmbH, DE, Forchheim6
+24.9
+Enerji Almanya GmbH, DE, Düsseldorf²
+100.0
+EFR CEE Szolgáltató Kft., HU, Budapest
+25.0
+Enerjisa Enerji A.Ş., TR, Istanbul4
+50.0
+EFR Europäische Funk-Rundsteuerung GmbH, DE, Munich
+EGC UAE SUPPLY & PROCESSING LTD FZE, AE, Fujairah
+free zone²
+39.9
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+100.0
+Ergon Nominees Limited, GB, Coventry²
+100.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+100.0
+Ergon Insurance Ltd, MT, St. Julians¹
+49.0
+Energia Eolica Sud S.r.l., IT, Milan²
+Grünwald6
+100.0
+Ergon Holding Company Limited, GB, Coventry²
+Ergon Holdings Ltd, MT, St. Julians¹
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
+100.0
+50.0
+Ergon Energia S.r.l. in liquidazione, IT, Brescia
+100.0
+Stake (%)
+46.7
+100.0
+35.0
+100.0
+Energieversorgung Putzbrunn GmbH & Co. KG, DE,
+Putzbrunn6
+50.0
+Forest Creek WF Holdco, LLC, US, Wilmington¹
+Forest Creek Wind Farm, LLC, US, Wilmington¹
+Fortuna Solar, LLC, US, Wilmington²
+100.0
+100.0
+100.0
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE,
+Putzbrunn6
+50.0
+Freya Bunde-Etzel GmbH & Co. KG, DE, Essen4
+60.0
+Energieversorgung Sehnde GmbH, DE, Sehnde
+30.0
+Gasag Berliner Gaswerke Aktiengesellschaft, DE, Berlin5
+100.0
+36.9
+49.0
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen6
+49.0
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+50.0
+Gasspeicher Lehrte GmbH, DE, Helmstedt²
+100.0
+50.0
+Gas-Union GmbH, DE, Frankfurt am Main5
+23.6
+49.0
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+50.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . ³Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). - 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Energieversorgung Vechelde GmbH & Co KG, DE, Vechelde6
+100.0
+Flatlands Wind Farm, LLC, US, Wilmington²
+Forest Creek Investco, Inc., US, Wilmington¹
+Energieversorgung Pfaffenhofen Verwaltungs GmbH, DE,
+Pfaffenhofen²
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH &
+Co. KG (ews), DE, Bad Segeberg6
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg6
+Exporting Commodities International LLC, US, Marlton
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main
+50.2
+49.0
+28.9
+50.1
+Energie-Agentur Weyhe GmbH, DE, Weyhe
+Energieerzeugungswerke Geesthacht GmbH, DE,
+50.0
+EZV Energie- und Service Verwaltungsgesellschaft mbH,
+DE, Wörth am Main6
+28.8
+Falkenbergs Biogas AB, SE, Malmö²
+65.0
+Geesthacht
+33.4
+100.0
+Energienetze Bayern GmbH, DE, Regensburg¹
+100.0
+100.0
+90.0
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+50.0
+90.0
+Fitas Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+Energie und Wasser Potsdam GmbH, DE, Potsdam 5
+69.5
+FIDELIA Holding LLC, US, Wilmington¹
+100.0
+50.0
+Fernwärmeversorgung Freising Gesellschaft mit
+beschränkter Haftung (FFG), DE, Freising
+100.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+Energie-Pensions-Management GmbH, DE, Hanover²
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau
+Energieversorgung Buching-Trauchgau (EBT) Gesell-
+schaft mit beschränkter Haftung, DE, Halblech
+Energieversorgung Pfaffenhofen GmbH & Co.KG, DE,
+Pfaffenhofen²
+100.0
+Name, location
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+100.0
+Economy Power Limited, GB, Coventry¹
+100.0
+E.ON Service GmbH, DE, Essen²
+100.0
+E.ON Zweiundzwanzigste Verwaltungs GmbH, DE,
+E.ON Servicii Clienti S.R.L., RO, Târgu Mureş¹
+Düsseldorf²
+100.0
+100.0
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+100.0
+East Midlands Electricity Distribution Holdings, GB,
+Coventry²
+100.0
+E.ON Servicii Tehnice S.R.L., RO, Târgu Mureş¹
+E.ON Wind Sweden AB, SE, Malmö¹
+100.0
+100.0
+East Midlands Electricity Share Scheme Trustees Limited,
+GB, Coventry²
+100.0
+E.ON Slovensko, a.s., SK, Bratislava¹
+100.0
+EASYCHARGE.me GmbH, DE, Düsseldorf²
+100.0
+E.ON Smart Living AB, SE, Malmö¹
+100.0
+EBY Immobilien GmbH & Co. KG, DE, Regensburg²
+100.0
+E.ON Sverige AB, SE, Malmö¹
+100.0
+EBY Port 1 GmbH, DE, Munich¹
+E.ON Servisní, s.r.o., CZ, České Budějovice¹
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Värme Sverige AB, SE, Malmö¹
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+100.0
+E.ON Värme Timrå AB, SE, Sundsvall¹
+90.9
+E.ON Ruhrgas International GmbH (since 2016 Uniper
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+100.0
+Ruhrgas International GmbH), DE, Essen 1,8
+100.0
+E.ON Verwaltungs SE, DE, Düsseldorf²
+100.0
+E.ON Ruhrgas Nigeria Limited, NG, Abuja²
+100.0
+E.ON Wind Denmark AB, SE, Malmö²
+100.0
+100.0
+E.ON Wind Resources AB, SE, Malmö²
+E.ON Wind Services A/S, DK, Rødby¹
+100.0
+Holding GmbH), DE, Düsseldorf¹,8
+E.ON Russia Holding GmbH (since 2016 Uniper Russia
+100.0
+100.0
+E.ON Wind Norway AB, SE, Malmö²
+Russia Beteiligungs GmbH), DE, Düsseldorf²
+E.ON Russia Beteiligungs GmbH (since 2016 Uniper
+100.0
+E.ON Wind Kårehamn AB, SE, Malmö¹
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+E.ON Technologies (Ratcliffe) Limited (since 2016 Uniper
+EBY Port 3 GmbH, DE, Regensburg¹
+100.0
+100.0
+100.0
+EC&R Magicat Holdco, LLC, US, Wilmington¹
+EC&R NA Solar PV, LLC, US, Wilmington¹
+100.0
+100.0
+100.0
+EC&R O&M, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Panther Creek Wind Farm III, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R QSE, LLC, US, Wilmington¹
+100.0
+E.ON UK plc, GB, Coventry¹
+100.0
+EC&R Services, LLC, US, Wilmington¹
+Stake (%)
+Name, location
+Investments Are Held (as of December 31, 2015)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+208 Notes
+207
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ·³Joint operations pursuant to IFRS 11. . 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+EC&R Solar Development, LLC, US, Wilmington¹
+100.0
+EC&R Sherman, LLC, US, Wilmington²
+100.0
+100.0
+E.ON UK Property Services Limited, GB, Coventry²
+E.ON UK PS Limited, GB, Coventry²
+100.0
+100.0
+Ruhrgas BBL B.V.), NL, Rotterdam¹
+EC&R Investco Mgmt II, LLC, US, Wilmington¹
+E.ON UK Energy Lincoln Limited, GB, Coventry²
+E.ON UK Energy Markets Limited, GB, Coventry²
+E.ON UK Energy Services Limited, GB, Coventry²
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+E.ON UK Pension Trustees Limited, GB, Coventry²
+Technologies Limited), GB, Coventry¹
+100.0
+EBY Port 5 GmbH, DE, Regensburg²
+100.0
+E.ON Technologies GmbH (since 2016 Uniper
+Technologies GmbH), DE, Gelsenkirchen¹
+100.0
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+100.0
+EC&R Asset Management, LLC, US, Wilmington¹
+EC&R Canada Ltd., CA, Saint John¹
+100.0
+100.0
+E.ON Trend s.r.o. (since 2016 Uniper Trend s.r.o.), CZ,
+České Budějovice¹
+EC&R Development, LLC, US, Wilmington¹
+100.0
+100.0
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+100.0
+EC&R Investco EPC Mgmt, LLC, US, Wilmington²
+EC&R Investco Mgmt, LLC, US, Wilmington¹
+100.0
+E.ON UK Directors Limited, GB, Coventry²
+100.0
+100.0
+E.ON UK CoGeneration Limited, GB, Coventry¹
+100.0
+100.0
+EC&R Energy Marketing, LLC, US, Wilmington¹
+EC&R Ft. Huachuca Solar, LLC, US, Wilmington²
+EC&R Grandview Holdco LLC, US, Wilmington²
+100.0
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+100.0
+Hungary
+E.ON Elnät Kramfors AB, SE, Malmö¹
+100.0
+E.ON's customer structure did not result in any major concen-
+tration in any given geographical region or business area. Due
+to the large number of customers the Company serves and
+the variety of its business activities, there are no individual
+customers whose business volume is material compared with
+the Company's total business volume.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+(34) Compensation of Supervisory Board and
+Management Board
+Supervisory Board
+Total remuneration to members of the Supervisory Board
+in 2015 amounted to €3.2 million (2014: €3.1 million).
+As in 2014, there were no loans to members of the Supervisory
+Board in 2015.
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are pre-
+sented on page 95 in the Compensation Report.
+Additional information about the members of the Supervisory
+Board is provided on pages 216 and 217.
+Management Board
+Total compensation of the Management Board in 2015
+amounted to €15.6 million (2014: €16.2 million). This consisted
+of base salary, bonuses, other compensation elements and
+share-based payments.1
+5,009
+Total payments to former members of the Management
+Board and their beneficiaries amounted to €15.8 million (2014:
+€10.2 million). Provisions of €154.6 million (2014: €175.0 million)
+have been established for the pension obligations to former
+members of the Management Board and their beneficiaries.
+(35) Other Significant Issues
+On February 1, 2016, a fire erupted in the boiler house of Unit 3
+at Berezovskaya GRES in Russia, which has a capacity of 800 MW.
+As a result of the fire, significant parts of the boiler were
+damaged and will have to be replaced. The unit has been taken
+out of service for at least 20 months of unscheduled repair,
+during which it will not be generating an electricity margin
+and will be losing a significant part of its capacity payment.
+Management believes that no additional fines will have to be
+paid for not providing capacity during the outage. Manage-
+ment is currently assessing the magnitude of the damage to
+the boiler with the objective of determining the length of
+the forced outage. The estimated cost of restoration is at least
+RUB 15 billion. The Group is insured against construction risks
+and property damage, machinery breakdown and business
+interruption. Investigations involving representatives of the
+insurance companies are currently underway to determine
+whether the accident is covered by one of the insurance con-
+tracts, as well as the amount of the insurance settlement.
+Management believes that a significant part of the damage
+will be covered by insurance.
+The Management Board's compensation structure and the
+amounts for each member of the Management Board are pre-
+sented on pages 82 through 95 in the Compensation Report.
+Additional information about the members of the Manage-
+ment Board is provided on page 218.
+¹Uniper AG granted Mr. Schäfer a multi-year bonus for 2015 of €636,000.
+This bonus is not included in the total compensation of the Management
+Board.
+201
+202 Notes
+Declaration of the Management Board
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+Düsseldorf, February 29, 2016
+The Management Board
+вы
+Dm Bb Bitly Jen
+Jm
+As in 2014, there were no loans to members of the Manage-
+ment Board in 2015.
+270 4,536
+315
+2,865
+35,671 32,551
+1,666
+2,806 116,218 113,095
+External sales by
+location of seller
+Intangible assets
+92,797
+1,566
+86,867 9,882
+1,556
+394
+9,700
+426
+2,169
+187
+2,357
+184
+11,023 12,319
+2,089 2,499
+347
+229
+1,852 116,218 113,095
+217 4,465 4,882
+Property, plant and
+equipment
+15,492
+2,706
+259
+185
+1,615
+1,330
+the equity method
+Teyssen
+accounted for under
+2,495 2,200 38,997 41,273
+7,814 10,423
+7,681
+7,716
+5,650
+15,319 5,480
+Companies
+3,279
+Birnbaum
+(36) List of Shareholdings Pursuant to
+Section 313 (2) HGB
+Aquila Sterling Limited, GB, Coventry²
+100.0
+mbH, DE, Borgstedt
+49.0
+AS Latvijas Gāze, LV, Riga5
+47.2
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+Abwasserentsorgung Amt Achterwehr GmbH, DE,
+Achterwehr6
+44.0
+AV Packaging GmbH, DE, Munich¹
+0.0
+33.3
+Avacon AG, DE, Helmstedt¹
+61.5
+49.0
+Abfallwirtschaftsgesellschaft Rendsburg-Eckernförde
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+49.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+100.0
+Avacon Natur GmbH, DE, Sarstedt¹
+100.0
+49.0
+Avon Energy Partners Holdings, GB, Coventry2
+100.0
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide
+Abwasserentsorgung Berkenthin GmbH, DE, Berkenthin6
+27.0
+AWE-Arkona-Windpark Entwicklungs-GmbH, DE, Hamburg¹
+98.0
+44.0
+B.V. NEA, NL, Dodewaard
+100.0
+100.0
+Aquila Power Investments Limited, GB, Coventry²
+49.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in which Equity
+Investments Are Held (as of December 31, 2015)
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+:agile accelerator GmbH, DE, Düsseldorf2
+100.0
+Aerodis, S.A., FR, Paris¹
+100.0
+AB Svafo, SE, Stockholm
+100.0
+ANCO Sp. z o.o., PL, Jarocin²
+Abfallwirtschaft Südholstein GmbH (AWSH), DE,
+Elmenhorst
+100.0
+Anacacho Wind Farm, LLC, US, Wilmington¹
+49.0
+Reutersberg
+Abfallwirtschaft Schleswig-Flensburg GmbH, DE, Schleswig
+Amrum-Offshore West GmbH, DE, Düsseldorf¹
+49.0
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide
+100.0
+Åliden Vind AB, SE, Malmö²
+22.0
+100.0
+3,329
+41,605 35,376 32,854
+40,176
+2,062
+2,093
+107
+102
+228
+188
+1,035
+883
+Financial Information by Business Segment-Presentation of Discontinued Operations
+€ in millions
+External sales
+Intersegment sales
+Sales
+EBITDA¹
+416
+Equity-method earnings²
+Investments
+¹Adjusted for extraordinary effects.
+Spain³
+2015
+2014
+324
+1,085
+31
+81
+355
+1,166
+34
+146
+19
+Operating cash flow before interest and taxes
+333
+208
+187
+Other EU Countries
+2015
+2014
+2015
+2014
+1,535
+1,637
+4,701
+4,619
+2015
+19,805
+2014
+19,788
+2
+1
+463
+540
+1,537
+1,775
+63
+1,756
+48
+51
+38
+279
+297
+190
+200
+20,587
+799
+701
+20,506
+5,159
+5,164
+1,638
+207
+5
+63
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included
+in income/loss from companies accounted for under the equity method and financial results, respectively. These income effects are not part of EBITDA.
+³The Spanish activities had already been disposed of in the first quarter of 2015 (see also Note 4).
+-918
+768
+116,218
+113,095
+Operating cash flow
+6,133
+6,354
+-221
+¹Operating cash flow from continuing operations.
+The investments presented in the financial information by
+business segment tables are the purchases of investments
+reported in the Consolidated Statements of Cash Flows.
+The "Other" item consists in particular of revenues generated
+from services and from other trading activities.
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the
+equity method, by geographic area:
+Geographic Segment Information
+Germany
+€ in millions
+2015
+2014
+External sales by
+location of customer
+2014
+2015
+2014
+2015
+2014
+-150
+Total
+Europe (other)
+2015
+2014
+2015
+2014
+Sweden
+United Kingdom
+2015
+Other
+25.0
+Total
+5,808
+199
+200 Notes
+The following table shows the reconciliation of operating
+cash flow before interest and taxes to operating cash flow:
+Operating Cash Flow¹
+Additional Entity-Level Disclosures
+External sales by product break down as follows:
+Segment Information by Product
+€ in millions
+2015
+2014
+ence
+€ in millions
+2015
+2014
+Operating cash flow before
+Electricity
+54,522
+5,094
+293
+Other
+-1,049
+-756
+Interest payments
+Tax payments
+51,198
+Gas
+-1,282
+8,321
+7,039
+interest and taxes
+56,089
+56,602
+E.ON Climate & Renewables France Solar S.A.S. (since
+2016 Uniper Climate & Renewables France Solar S.A.S.),
+FR, Paris¹
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede6
+Barsebäck Kraft AB, SE, Löddeköpinge²
+Champion WF Holdco, LLC, US, Wilmington¹
+100.0
+Rotterdam²
+100.0
+Champion Wind Farm, LLC, US, Wilmington¹
+100.0
+E.ON Benelux Holding b.v. (since 2016 Uniper Benelux
+CHN Contractors Limited, GB, Coventry²
+100.0
+Holding B.V.), NL, Rotterdam¹1
+100.0
+CHN Electrical Services Limited, GB, Coventry²
+100.0
+E.ON Benelux Levering b.v., NL, Eindhoven¹
+E.ON Benelux Geothermie B.V. (in liquidation), NL,
+100.0
+100.0
+E.ON Benelux N.V. (since 2016 Uniper Benelux N.V.), NL,
+Rotterdam¹
+100.0
+CHN Special Projects Limited, GB, Coventry²
+100.0
+E.ON Beteiligungen GmbH, DE, Düsseldorf¹,8
+100.0
+Citigen (London) Limited, GB, Coventry¹
+100.0
+E.ON Bioerdgas GmbH, DE, Essen¹
+100.0
+Colbeck's Corner, LLC, US, Wilmington¹
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+100.0
+CHN Group Ltd, GB, Coventry²
+50.0
+100.0
+E.ON Benelux CCS Project B.V. (since 2016 Uniper Benelux
+CCS Project B.V.), NL, Rotterdam²
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth6
+33.3
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+E.ON 10. Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+100.0
+Bursjöliden Vind AB, SE, Malmö²
+100.0
+E.ON Anlagenservice GmbH (since 2016 Uniper Anlagen-
+service GmbH), DE, Gelsenkirchen¹
+100.0
+Bützower Wärme GmbH, DE, Bützow
+20.0
+Carbiogas b.v., NL, Nuenen
+33.3
+E.ON Asset Management GmbH & Co. EEA KG, DE, Grün-
+wald 1,8
+100.0
+Cardinal Wind Farm LLC, US, Wilmington²
+100.0
+100.0
+Centrale Solare di Fiumesanto S.r.I., IT, Sassari²
+Českomoravská distribuce s.r.o., CZ, České Budějovice6
+87.8
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+E.ON Belgium N.V., BE, Brussels¹
+E.ON Biofor Sverige AB, SE, Malmö¹
+97.5
+100.0
+E.ON Bayern Verwaltungs AG, DE, Munich²
+100.0
+Cattleman Wind Farm, LLC, US, Wilmington²
+75.1
+E.ON Austria GmbH, AT, Vienna¹
+Celle-Uelzen Netz GmbH, DE, Celle¹
+100.0
+100.0
+Cremlinger Energie GmbH, DE, Cremlingen6
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+Name, location
+E.ON Business Services Italia S.r.I., IT, Milan²
+E.ON Business Services Regensburg GmbH, DE, Regensburg²
+E.ON Business Services Slovakia spol. s.r.o., SK, Bratislava²
+E.ON Business Services Sverige AB, SE, Malmö²
+Stake (%)
+100.0
+100.0
+51.0
+Name, location
+Stake (%)
+100.0
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+E.ON Distribuce, a.s., CZ, České Budějovice¹
+E.ON Distributie România S.A., RO, Târgu Mureş¹
+E.ON E&P Algeria GmbH, DE, Düsseldorf¹
+100.0
+100.0
+68.1
+100.0
+E.ON Carbon Sourcing North America LLC, US, Wilmington²
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+Tables and Explanations
+100.0
+E.ON E&P UK Energy Trading Limited, GB, London¹
+E.ON E&P UK EU Limited, GB, London¹
+100.0
+100.0
+E.ON Citiri Contoare S.A., RO, Târgu Mureş²
+100.0
+E.ON E&P UK Limited, GB, London¹
+100.0
+E.ON Climate & Renewables Canada Ltd., CA, Saint John¹
+E.ON Climate & Renewables Carbon Sourcing Limited,
+GB, Coventry²
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+100.0
+E.ON Elektrárne s.r.o., SK, Trakovice¹
+100.0
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+49.0
+CT Services Holdings Limited, GB, Coventry2
+Dampfversorgung Ostsee-Molkerei GmbH, DE, Wismar
+DD Brazil Holdings S.à r.l., LU, Luxembourg¹
+100.0
+50.0
+E.ON Brasil Energia LTDA., BR, City of São Paulo²
+E.ON Business Services (UK) Limited, GB, Coventry¹
+E.ON Business Services Benelux B.V., NL, Rotterdam²
+E.ON Business Services Berlin GmbH, DE, Berlin²
+100.0
+100.0
+100.0
+100.0
+100.0
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+100.0
+Deutsche Flüssigerdgas Terminal oHG, DE, Essen²
+90.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca²
+E.ON Business Services Czech Republic s.r.o., CZ,
+České Budějovice²
+100.0
+100.0
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). - 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+100.0
+100.0
+33.3
+100.0
+90.0
+DFTG - Deutsche Flüssigerdgas Terminal Gesellschaft mit
+beschränkter Haftung, DE, Essen²
+42.5
+100.0
+E.ON Business Services GmbH, DE, Hanover¹
+Deutsche Gesellschaft für Wiederaufarbeitung von
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben
+E.ON Business Services Hannover GmbH, DE, Hanover²
+E.ON Business Services Hungary Kft., HU, Budapest²
+E.ON Business Services laşi S.R.L., RO, laşi²
+Brunnshög Energi AB, SE, Malmö²
+100.0
+100.0
+20.0
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+25.0
+Bergeforsens Kraftaktiebolag, SE, Bispgården5
+40.0
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+49.0
+Abwassergesellschaft Bardowick mbH & Co. KG, DE,
+Bardowick6
+49.0
+Beteiligungsgesellschaft der Energieversorgungsun-
+ternehmen an der Kerntechnische Hilfsdienst GmbH
+GbR, DE, Eggenstein-Leopoldshofen
+47.4
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+Bardowick
+100.0
+49.0
+49.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE,
+Lichtenfels6
+100.0
+25.1
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck
+49.0
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg6
+25.0
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz
+40.7
+46.5
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt6
+30.0
+Acme Group Limited, GB, Bury2
+Abwassergesellschaft Gehrden mbH, DE, Gehrden
+100.0
+Bayernwerk Portfolio GmbH & Co. KG, DE, Regensburg²
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+BBL Company V.O.F., NL, Groningen5
+25.1
+100.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE,
+Brunsbüttel6
+49.0
+BauMineral GmbH, DE, Herten1,8
+100.0
+Abwasserentsorgung Friedrichskoog GmbH, DE,
+Friedrichskoog
+Bayernwerk AG, DE, Regensburg¹
+100.0
+49.0
+Bayernwerk Anlagentechnik Nord GmbH, DE,
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+25.0
+Regensburg²
+100.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+25.0
+Bayernwerk Anlagentechnik Süd GmbH, DE, Regensburg²
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+Eddelak GmbH, DE, St. Michaelisdonn6
+49.0
+100.0
+100.0
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+Abwasserentsorgung Schöppenstedt GmbH, DE,
+Schöppenstedt
+100.0
+49.0
+100.0
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+49.0
+Diekhusen-Fahrstedt6
+Abwasserentsorgung Marne-Land GmbH, DE,
+100.0
+Abwasserentsorgung Schladen GmbH, DE, Schladen6
+Acme Technical Services Limited, GB, Bury²
+100.0
+Bioenergie Bad Füssing GmbH & Co. KG, DE, Bad Füssing
+Bioenergie Bad Füssing Verwaltungs-GmbH, DE,
+Bad Füssing6
+Drivango GmbH, DE, Düsseldorf²
+100.0
+Blackbriar Battery, LLC, US, Wilmington²
+100.0
+Dutchdelta Finance S.à r.I., LU, Luxembourg¹
+100.0
+Blåsjön Kraft AB, SE, Arbrå
+50.0
+E WIE EINFACH GmbH, DE, Cologne¹
+100.0
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+41.8
+E.DIS AG, DE, Fürstenwalde/Spree¹
+100.0
+e.distherm Wärmedienstleistungen GmbH, DE, Schönefeld¹
+e.kundenservice Netz GmbH, DE, Hamburg¹
+Broken Spoke Solar, LLC, US, Wilmington²
+100.0
+Brattmyrliden Vind AB, SE, Malmö²
+100.0
+40.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+Braila Power S.A., RO, Chiscani village²
+100.0
+e.discom Telekommunikation GmbH, DE, Rostock²
+100.0
+Boiling Springs Wind Farm, LLC, US, Wilmington²
+67.0
+69.8
+49.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+DOTTO MORCONE S.r.l., IT, Milan²
+25.0
+25.0
+Adria LNG d.o.o. za izradu studija u likvidaciji, HR, Zagreb6
+39.2
+Bioenergie Merzig GmbH, DE, Merzig²
+51.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+203
+204 Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+Name, location
+Stake (%)
+Name, location
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+90.0
+Donau-Wasserkraft Aktiengesellschaft, DE, Munich¹
+24.7
+BIOPLYN Třeboň spol. s r.o., CZ, Třeboň
+26.3
+DOTI Management GmbH, DE, Oldenburg6
+100.0
+Biogas Steyerberg GmbH, DE, Sarstedt²
+100.0
+26.3
+80.0
+Biogas Ducherow GmbH, DE, Ducherow²
+100.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf²
+100.0
+Stake (%)
+DOTI Deutsche-Offshore-Testfeld- und Infrastruktur-
+GmbH & Co. KG, DE, Oldenburg5
+Farma Wiatrowa Barzowice Sp. z o.o., PL, Warsaw¹
+49.0
+66.7
+Name, location
+Stake (%)
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co.
+KG, DE, Hohen Neuendorf6
+Phelps Solar, LLC, US, Wilmington²
+100.0
+49.0
+Pioneer Trail Wind Farm, LLC, US, Wilmington¹
+100.0
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE,
+Ronnenberg
+49.0
+Pipkin Ranch Wind Farm, LLC, US, Wilmington²
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+100.0
+100.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin6
+40.0
+Stake (%)
+Powergen (East Midlands) Investments, GB, Coventry²
+Name, location
+Tables and Explanations
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen6
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE,
+Giesen6
+49.0
+49.0
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+57.0
+57.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH,
+DE, Giesen
+49.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+100.0
+Netzgesellschaft Stuhr/Weyhe mbH, DE, Weyhe²
+100.0
+Powergen International Limited, GB, Coventry¹
+100.0
+Nordzucker Bioerdgas GmbH & Co. KG, DE, Braunschweig²
+50.0
+Powergen Limited, GB, Coventry¹
+100.0
+Nordzucker Bioerdgas Verwaltung-GmbH, DE,
+Powergen LS SE, GB, Coventry¹
+100.0
+Braunschweig²
+50.0
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+100.0
+Northern Orchard Solar PV, LLC, US, Wilmington²
+100.0
+100.0
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+Powergen Holdings S.à r.I., LU, Luxembourg²
+Powergen (East Midlands) Loan Notes, GB, Coventry²
+100.0
+Netzgesellschaft Syke GmbH, DE, Syke
+49.0
+Powergen Group Holdings Limited, GB, Coventry²
+100.0
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+57.0
+50.1
+100.0
+New Cogen Sp. z o. o., PL, Warsaw²
+96.0
+Powergen Holdings B.V., NL, Amsterdam1
+100.0
+Nord Stream AG, CH, Zug5
+15.5
+Powergen Group Investments, GB, Coventry²
+Powergen Power No. 1 Limited, GB, Coventry²
+LSW Holding GmbH & Co. KG, DE, Wolfsburg
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg
+Kraftwerk Marl GmbH, DE, Munich¹
+100.0
+Midlands Sales Limited, GB, Coventry²
+100.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+100.0
+Mittlere Donau Kraftwerke Aktiengesellschaft, DE, Munich²
+60.0
+Kraftwerk Schkopau Betriebsgesellschaft mbH, DE,
+Schkopau¹
+Montan GmbH Assekuranz-Makler, DE, Düsseldorf6
+44.3
+55.6
+Mosoni-Duna Menti Szélerőmű Kft., HU, Győr²
+100.0
+Kraftwerk Schkopau GbR, DE, Schkopau¹
+100.0
+58.1
+Midlands Power International Limited, GB, Coventry²
+Kraftwerk Hattorf GmbH, DE, Munich¹
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+Midlands Electricity Limited, GB, Coventry²
+100.0
+gemeinnützige GmbH, DE, Celle
+25.0
+Midlands Gas Limited, GB, Coventry²
+100.0
+Kraftwerk Buer GbR, DE, Gelsenkirchen6
+50.0
+Midlands Generation (Overseas) Limited, GB, Coventry²
+100.0
+Kraftwerk Burghausen GmbH, DE, Munich¹
+100.0
+Midlands Power (UK) Limited, GB, Coventry²
+100.0
+100.0
+Munnsville Investco, LLC, US, Wilmington¹
+100.0
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen
+100.0
+34.8
+49.0
+Lillo Energy NV, BE, Beveren/Antwerp
+50.0
+Limfjordens Bioenergi ApS, DK, Frederiksberg²
+78.0
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+49.0
+Limited Liability Company E.ON IT, RU, Moscow²
+100.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden6
+49.0
+London Array Limited, GB, Coventry
+30.0
+Netz- und Windservice (NWS) GmbH, DE, Schwerin²
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad
+Münder6
+100.0
+Lighting for Staffordshire Limited, GB, Coventry¹
+60.0
+41.7
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co.
+OHG, DE, Grünwald¹
+90.0
+LandE GmbH, DE, Wolfsburg¹
+69.6
+Munnsville WF Holdco, LLC, US, Wilmington¹
+Munnsville Wind Farm, LLC, US, Wilmington¹
+Nahwärme Ascha GmbH, DE, Regensburg²
+100.0
+57.0
+100.0
+Landwehr Wassertechnik GmbH, DE, Schöppenstedt²
+100.0
+Naranjo Battery, LLC, US, Wilmington²
+100.0
+Langerlo N.V., BE, Genk²
+100.0
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+90.0
+100.0
+Ö.F. Östersjöfrakt AB, SE, Örebro²
+80.0
+Thies Hansen (until December 31, 2015),
+Deputy Chairman
+Eugen-Gheorghe Luha (Deputy Chairman
+since January 1, 2016)
+Clive Broutta (since January 1, 2016)
+Dr. Karen de Segundo
+Nomination Committee
+Werner Wenning, Chairman
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Dr. Karen de Segundo
+•
+Unless otherwise indicated, information is as of December 31, 2015, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+•
+217
+218 Notes
+Management Board (and Information on Other Directorships Held by Management Board Members)
+Werner Wenning, Chairman
+Dr. Johannes Teyssen
+Committee
+Werner Wenning
+Supervisory Board Committees
+Executive Committee
+Werner Wenning, Chairman
+Erhard Ott (until May 7, 2015), Deputy
+Chairman
+Andreas Scheidt (since May 7, 2015),
+Deputy Chairman
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Eberhard Schomburg
+(until December 31, 2015)
+Fred Schulz (since January 1, 2016)
+Audit and Risk Committee
+Dr. Theo Siegert, Chairman
+Eberhard Schomburg (until December
+31, 2015), Deputy Chairman
+Fred Schulz (Deputy Chairman since
+January 1, 2016)
+Thies Hansen (since January 1, 2016)
+Finance and Investment
+Born 1959 in Hildesheim, Germany
+Chairman and CEO since 2010
+Member of the Management Board
+since 2004
+Strategy and Corporate Development,
+HR, Investor Relations, Political Affairs
+and Communications, Corporate Audit,
+Turkey, Health, Safety, and Environment,
+Sustainability, One2two project
+• Deutsche Bank AG
+•
+.
+(Chairman) since December 18, 2015
+E.ON España S.L.2 until March 25, 2015
+E.ON Hungária Zrt.²
+(Chairman) until May 31, 2015
+E.ON Italia S.p.A.2 until June 30, 2015
+E.ON Sverige AB²
+(Deputy Chairman until June 18, 2015)
+E.ON Benelux Holding B.V.2
+(Chairman)
+• Nord Stream AG until May 31, 2015
+•
+•
+•
+OAO E.ON Russia²
+(Chairman since July 2, 2015)
+Uniper Benelux N.V. 2 (Chairman)
+until December 31, 2015
+•
+•
+⚫ E.ON Czech Holding AG1
+(Chairman) until June 12, 2015
+Uniper AG1
+Customer Solutions, Distributed Gener-
+ation, Digital Transformation, Technology
+and Innovation, E.ON 2.0
+•
+• Salzgitter AG until September 15, 2015
+• Uniper AG1 since December 18, 2015
+Dr.-Ing. Leonhard Birnbaum
+Born 1967 in Ludwigshafen, Germany
+Member of the Management Board
+since 2013
+Distribution and Sales, Regional Units
+Coordination, Energy Policy, Regulation
+Policy, Consulting, IT
+⚫ E.ON Business Services GmbH¹
+(Chairman) since June 1, 2015
+⚫ E.ON Czech Holding AG1
+Expert, E.ON SE Works Council and E.ON
+Group Works Council
+•
+E.ON Global Commodities SE1 until
+December 31, 2015 (Chairman until
+September 6, 2015)
+• E.ON Technologies GmbH¹
+•
+•
+(Chairman) until August 21, 2015
+Georgsmarienhütte Holding GmbH
+E.ON Sverige AB²
+(Chairman) since June 18, 2015
+E.ON Hungária Zrt.2
+(Chairman) since June 1, 2015
+Dr. Bernhard Reutersberg
+Born 1954 in Düsseldorf, Germany
+Member of the Management Board
+since 2010
+(Chairman) since June 13, 2015
+(since January 1, 2016)
+Elisabeth Wallbaum
+E. Merck KG
+Offshore Trassenplanungs GmbH i. L., DE, Hanover²
+Offshore-Windpark Beta Baltic GmbH, DE, Hamburg2
+50.0
+Powergen UK Securities, GB, Coventry²
+100.0
+100.0
+Offshore-Windpark Delta Nordsee GmbH, DE, Hamburg²
+100.0
+Powergen US Holdings Limited, GB, Coventry¹
+Powergen US Investments, GB, Coventry¹
+100.0
+100.0
+OHA B.V., NL, Eindhoven²
+53.3
+Powergen US Securities Limited, GB, Coventry¹
+100.0
+OKG AB, SE, Oskarshamn¹
+100.0
+Powergen UK Limited, GB, Coventry²
+49.0
+100.0
+Powergen Power No. 2 Limited, GB, Coventry²
+100.0
+OAO E.ON Russia, RU, Surgut¹
+83.7
+100.0
+OAO Severneftegazprom, RU, Krasnoselkup
+25.0
+54.5
+Powergen Serang Limited, GB, Coventry²
+OAO Shaturskaya Upravlyayuschaya Kompaniya, RU,
+Shatura¹
+51.0
+Powergen UK Holding Company Limited, GB, Coventry²
+100.0
+Obere Donau Kraftwerke Aktiengesellschaft, DE, Munich²
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+60.0
+Powergen UK Investments, GB, Coventry¹
+100.0
+90.0
+Powergen Weather Limited, GB, Coventry²
+OLT Offshore LNG Toscana S.p.A., IT, Milan4
+Dr. Karen de Segundo
+Attorney
+•
+British American Tobacco plc
+• Lonmin plc (until January 29, 2015)
+•
+Pöyry Oyj (until March 10, 2016)
+Dr. Theo Siegert
+Managing Partner, de Haen-Carstanjen
+& Söhne
+• Merck KGaA
+•
+Henkel AG & Co. KGaA
+.
+DKSH Holding Ltd.
+⋅
+Cieplna Sp. z o.0.
+• Szczecińska Energetyka
+• E.DIS AG
+Group Works Council, Chairman of the
+General Works Council of E.DIS AG
+48.2
+Promec Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+000 E.ON Connecting Energies, RU, Moscow¹
+100.0
+Purena Consult GmbH, DE, Wolfenbüttel²
+100.0
+100.0
+000 E.ON E&P Russia
+94.1
+(since 2016 Uniper NefteGaz LLC), RU, Moscow²
+100.0
+Pyron Wind Farm, LLC, US, Wilmington¹
+100.0
+000 E.ON Engineering, RU, Moscow²
+100.0
+Purena GmbH, DE, Wolfenbüttel¹
+Uniper France S.A.S.2
+MFG Flughafen-Grundstücksverwaltungsgesellschaft
+mbH & Co. Gamma oHG i. L., DE, Grünwald²
+gemeinnützige GmbH, DE, Celle
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+Gasversorgung im Landkreis Gifhorn GmbH (GLG), DE,
+50.0
+Wolfsburg¹
+95.0
+Grandview Wind Farm, LLC, US, Wilmington4
+Grandview Wind Farm III, LLC, US, Wilmington²
+Grandview Wind Farm IV, LLC, US, Wilmington²
+50.0
+100.0
+100.0
+Strategy and Objectives
+Gasversorgung Unterfranken Gesellschaft mit
+E.ON Stock
+CEO Letter
+19.9
+0.0
+30.1
+10.0
+0.0
+8.5
+5.4
+0.0
+68.1
+19.9
+0.0
+22.1
+19.9
+0.0
+9.2
+Report of the Supervisory Board
+Grandview Wind Farm V, LLC, US, Wilmington²
+100.0
+beschränkter Haftung, DE, Würzburg5
+46.6
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+100.0
+HanseWerk AG, DE, Quickborn¹
+66.5
+Gem. Ges. zur Förderung des E.ON Energy Research
+Center mbH, DE, Aachen6
+HanseWerk Natur GmbH, DE, Hamburg¹
+100.0
+50.0
+Harzwasserwerke GmbH, DE, Hildesheim
+20.8
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+49.0
+Havelstrom Zehdenick GmbH, DE, Zehdenick6
+49.0
+Hams Hall Management Company Limited, GB, Coventry
+100.0
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+49.0
+Green Sky Energy Limited, GB, Bury¹
+100.0
+Gasversorgung Vorpommern GmbH, DE, Trassenheide
+49.0
+Grön Gas Partner A/S, DK, Hirtshals6
+50.0
+7.2
+Gasversorgung Wismar Land GmbH, DE, Lübow
+Hamburg Netz GmbH, DE, Hamburg¹
+74.9
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf¹,8
+50.0
+Hamburger Hof Versicherungs-Aktiengesellschaft, DE,
+100.0
+Düsseldorf²
+49.0
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE,
+0.0
+20.5
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Unless otherwise indicated, information is as of December 31, 2015, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+•
+Chairman of Gas România (Romanian
+Federation of Gas Unions), Chairman of
+Romanian employee representatives
+• SEA Complet S.A.
+Eugen-Gheorghe Luha
+• Telecom Italia S.p.A.
+• International Consolidated Airlines
+Group S.A.
+APR Energy plc (Deputy Chairperson)
+until March 25, 2015
+Baroness Denise Kingsmill, CBE
+Attorney at the Supreme Court,
+Member of the House of Lords
+• Schlewsig-Holstein Netz AG
+Hamburg Netz GmbH
+•
+• HanseWerk AG
+Council, HanseWerk AG
+Strategy and Objectives
+Chairman of the Combined Works
+Combined Group Management Report
+René Obermann
+First Deputy Chairman of the E.ON
+Fred Schulz
+until December 31, 2015
+• E.ON Generation GmbH
+(Deputy Chairman)
+Chairman of E.ON SE Works Council
+(until December 17, 2015) and of the
+E.ON Group Works Council
+(until December 15, 2015)
+• E.ON Kraftwerke GmbH
+(until December 4, 2015)
+(until December 31, 2015)
+Eberhard Schomburg
+• Spotify Technology S.A.
+(since March 20, 2015)
+CompuGroup Medical AG
+ThyssenKrupp AG
+•
+•
+•
+Partner, Warburg Pincus LLC
+Consolidated Financial Statements
+Tables and Explanations
+(since January 1, 2015)
+Thies Hansen
+Full-time Representative of the General,
+Municipal, Boilermakers and Allied
+Trade Union (GMB)
+Henkel AG & Co. KGaA
+•
+• Siemens AG
+Henkel Management AG
+Bayer AG (Chairman)
+•
+•
+Chairman of the Bayer AG Supervisory
+Board
+Chairman of the E.ON SE Supervisory
+Board
+Werner Wenning
+Supervisory Board (and Information on Other Directorships Held by Supervisory Board Members)
+216 Notes
+215
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+0.0
+Prof. Dr. Ulrich Lehner
+Member of the Shareholders' Committee
+of Henkel AG & Co. KGaA
+Deputy Chairman of the E.ON SE
+Supervisory Board
+Clive Broutta
+Member of National Board, Unified
+Service Sector Union, ver.di, Director
+of Utility/Waste Management Section
+Deputy Chairman of the E.ON SE
+Supervisory Board
+(since May 7, 2015)
+Andreas Scheidt
+Deputy Chairman of the E.ON SE
+Supervisory Board
+Employee of ver.di,
+10.0
+(until May 7, 2015)
+until February 27, 2015
+• Novartis AG (Deputy Chairman)
+• Henkel AG & Co. KGaA
+ThyssenKrupp AG (Chairman)
+Porsche Automobil Holding SE
+•
+• Deutsche Telekom AG (Chairman)
+Erhard Ott
+Heat & Power S.r.I., IT, Tortona²
+100.0
+Gräfelfing
+Kasson Manteca Solar LLC, US, Wilmington²
+100.0
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerk Brunsbüttel GmbH & Co. OHG, DE, Hamburg
+Kernkraftwerk Gundremmingen GmbH, DE,
+Gundremmingen5
+80.0
+33.3
+Lubmin-Brandov Gastransport GmbH, DE, Essen¹
+LUMEN DISTRIBUČNÍ SOUSTAVY, s.r.o., CZ, ��eské Budějovice
+LUMEN SYNERGY s.r.o., CZ, České Budějovice6
+100.0
+34.0
+34.0
+Luna Lüneburg GmbH, DE, Lüneburg
+49.0
+25.0
+Maasvlakte CCS Project B.V., NL, Rotterdam6
+50.0
+Kernkraftwerk Krümmel GmbH & Co. OHG, DE, Hamburg³
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+Stake (%)
+50.0
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+Name, location
+100.0
+28.0
+100.0
+50.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+40.0
+50.0
+Kalmar Energi Holding AB, SE, Kalmar5
+50.0
+100.0
+Kärnkraftsäkerhet & Utbildning AB, SE, Nyköping
+33.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+209
+210 Notes
+Stake (%)
+Magic Valley Wind Farm II, LLC, US, Wilmington²
+Magicat Holdco, LLC, US, Wilmington5
+100.0
+20.0
+100.0
+Maricopa Land Holding, LLC, US, Wilmington²
+Maricopa West Solar PV 2, LLC, US, Wilmington²
+Matrix Control Solutions Limited, GB, Bury¹
+100.0
+100.0
+100.0
+KommEnergie GmbH, DE, Eichenau6
+67.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt,
+DE, Eisenhüttenstadt
+MEON Pensions GmbH & Co. KG, DE, Grünwald 1,8
+MEON Verwaltungs GmbH, DE, Grünwald²
+100.0
+100.0
+49.0
+METHA-Methanhandel GmbH, DE, Essen¹
+100.0
+Kommunale Klimaschutzgesellschaft Landkreis Celle
+KommEnergie Erzeugungs GmbH, DE, Eichenau
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Győr²
+100.0
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+100.0
+Mainkraftwerk Schweinfurt Gesellschaft mit
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+69.8
+beschränkter Haftung, DE, Munich²
+75.0
+50.0
+Klåvbens AB, SE, Olofström
+Maricopa East Solar PV, LLC, US, Wilmington²
+100.0
+Kokereigasnetz Ruhr GmbH, DE, Essen¹
+100.0
+Maricopa East Solar PV 2, LLC, US, Wilmington²
+100.0
+Kolbäckens Kraft KB, SE, Sundsvall¹
+50.0
+Inwestycyjna Spólka Energetyczna-IRB Sp. z o.o., PL, Warsaw6
+Iron Horse Battery Storage, LLC, US, Wilmington²
+Javelin Global Commodities Holdings LLP, GB, London6
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+48.0
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen
+GOLLIPP Bioerdgas GmbH & Co KG, DE, Gollhofen6
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen6
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+Gemeinschaftskernkraftwerk Grohnde Management
+Holsteiner Wasser GmbH, DE, Neumünster6
+50.0
+GmbH, DE, Emmerthal²
+83.2
+HSN Magdeburg GmbH, DE, Magdeburg¹
+74.9
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE,
+Essenbach2
+75.0
+Hydropower Evolutions GmbH, DE, Düsseldorf²
+100.0
+Gemeinschaftskraftwerk Irsching GmbH, DE, Vohburg¹
+50.2
+Inadale Wind Farm, LLC, US, Wilmington¹
+100.0
+Holford Gas Storage Limited, GB, Edinburgh¹
+100.0
+DE, Emmerthal¹
+49.0
+Gemeindewerke Leck GmbH, DE, Leck
+49.9
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG &
+Co. OHG, DE, Neualbenreuth6
+50.0
+Gemeindewerke Uetze GmbH, DE, Uetze6
+49.0
+100.0
+Gemeindewerke Wedemark GmbH, DE, Wedemark6
+Gemeindewerke Wietze GmbH, DE, Wietze6
+49.0
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG,
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+Hochtemperatur-Kernkraftwerk GmbH (HKG),
+Gemeinsames europäisches Unternehmen, DE, Hamm
+Högbytorp Kraftvärme AB, SE, Malmö²
+100.0
+26.0
+100.0
+49.0
+25.0
+Gemeinschaftskraftwerk Kiel Gesellschaft mit
+100.0
+Schleswig-Holstein GmbH, DE, Kiel6
+33.3
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+41.7
+Intelligent Maintenance Systems Limited, GB, Milton
+Keynes
+25.0
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing2
+75.0
+Interesco S.r.I., IT, Diano D'Alba²
+100.0
+GLG Netz GmbH, DE, Gifhorn¹
+100.0
+Global Private Equity Select S.C.S., LU, Luxembourg²
+Global Property Select S.C.S., LU, Luxembourg²
+100.0
+100.0
+49.9
+50.0
+100.0
+Industry Development Services Limited, GB, Coventry²
+InfraServ-Bayernwerk Gendorf GmbH, DE, Burgkirchen/Alz
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+Nienburg/Weser
+beschränkter Haftung, DE, Kiel6
+50.0
+Gemeinschaftskraftwerk Veltheim Gesellschaft mit
+Induboden GmbH & Co. Grundstücksgesellschaft OHG,
+DE, Düsseldorf²
+100.0
+beschränkter Haftung, DE, Porta Westfalica¹
+66.7
+Induboden GmbH, DE, Düsseldorf²
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG, DE,
+100.0
+49.0
+Emmerthal¹
+66.7
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH,
+AT, politische Gemeinde Braunau am Inn6
+20.0
+Gesellschaft für Energie und Klimaschutz
+Induboden GmbH & Co. Industriewerte OHG, DE, Düsseldorf²
+Industriekraftwerk Greifswald GmbH, DE, Kassel6
+(Chairman) until January 4, 2016
+Powergen Retail Supply Limited, GB, Coventry2
+Born 1968 in Korschenbroich, Germany
+Member of the Management Board
+since 2015
+36.8
+SüdWasser GmbH, DE, Erlangen²
+100.0
+Uniper Energy Trading UK Staff Company Limited, GB,
+Coventry¹
+100.0
+Surschiste, S.A., FR, Mazingarbe²
+100.0
+Svensk Kärnbränslehantering AB, SE, Stockholm
+Svenskt Gastekniskt Center AB, SE, Malmö
+34.0
+30.0
+Uniper Global Commodities London Ltd., GB, London²
+Uniper GmbH, DE, Essen²
+100.0
+100.0
+Uniper GmbH, DE, Gelsenkirchen²
+100.0
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel6
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ·³Joint operations pursuant to IFRS 11. . 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+100.0
+36.8
+22.2
+49.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH,
+DE, Unterschleißheim6
+Umwelt- und Wärmeenergiegesellschaft Strasburg mbH,
+DE, Potsdam²
+100.0
+49.0
+Union Grid s.r.o., CZ, Prague
+34.0
+strotög GmbH Strom für Töging, DE, Töging am Inn
+50.0
+Uniper AG, DE, Düsseldorf¹
+100.0
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co.
+KG, DE, Brandenburg an der Havel5
+Uniper Beteiligungs GmbH, DE, Düsseldorf¹
+100.0
+Uniper Energy Storage Limited, GB, Coventry¹
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen
+213
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+100.0
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt6
+49.0
+100.0
+100.0
+100.0
+Wasserwerk Gifhorn Beteiligungs-GmbH, DE, Gifhorn6
+Wasserwerk Gifhorn GmbH & Co KG, DE, Gifhorn6
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr
+GmbH, DE, Grafenwöhr
+49.8
+49.8
+49.0
+Uniper UK Ironbridge Limited, GB, Coventry¹
+100.0
+Michael Sen
+Uniper UK Limited, GB, Coventry¹
+100.0
+Uniper LNG Kraftstoff GmbH, DE, Düsseldorf²
+Uniper UK Corby Limited, GB, Coventry¹
+Uniper UK Cottam Limited, GB, Coventry¹
+Uniper UK Gas Limited, GB, Coventry¹
+214 Notes
+50.0
+100.0
+Investments Are Held (as of December 31, 2015)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Uniper GmbH, DE, Hanover²
+100.0
+Uniper Holding GmbH, DE, Düsseldorf¹
+100.0
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim²
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+100.0
+60.0
+Uniper Infrastructure B.V., NL, Rotterdam²
+100.0
+Uniper Kraftwerke GmbH, DE, Düsseldorf¹
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Müden/Aller
+WEA Schönerlinde GbR mbH Kiepsch & Bosse & Beteili-
+gungsges. e.disnatur mbH, DE, Berlin²
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim6
+100.0
+Terminal Alpi Adriatico S.r.I., IT, Rome²
+100.0
+Stella Wind Farm II, LLC, US, Wilmington²
+Stensjön Kraft AB, SE, Stockholm5
+100.0
+50.0
+The Power Generation Company Limited, GB, Coventry²
+Thermondo GmbH, DE, Berlin6
+100.0
+20.2
+Stockton Solar I, LLC, US, Wilmington²
+100.0
+Thor Cogeneration Limited, GB, Coventry²
+100.0
+Stockton Solar II, LLC, US, Wilmington²
+100.0
+100.0
+Thor Holdings Limited, GB, Coventry²
+Stella Wind Farm, LLC, US, Wilmington²
+Teplárna Tábor, a.s., CZ, Tábor¹
+66.5
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+22.7
+Szombathelyi Erőmű Zrt., HU, Győr²
+55.0
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel
+26.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely6
+25.0
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+49.4
+Tech Park Solar, LLC, US, Wilmington¹
+100.0
+Statco Six Limited, GB, London²
+100.0
+51.9
+48.0
+100.0
+32.0
+Twin Forks Wind Farm, LLC, US, Wilmington²
+100.0
+49.0
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG,
+DE, Barsinghausen
+49.0
+Stromversorgung Angermünde GmbH, DE, Angermünde
+49.0
+Stromversorgung Ruhpolding Gesellschaft mit
+beschränkter Haftung, DE, Ruhpolding2
+100.0
+TXU Europe (AH Online) Limited, GB, Coventry²
+TXU Europe (AHG) Limited, GB, Coventry2
+TXU Europe (AHGD) Limited, GB, Coventry²
+TXU Europe (AHST) Limited, GB, Coventry²
+Überlandwerk Leinetal GmbH, DE, Gronau
+100.0
+100.0
+100.0
+Stromnetzgesellschaft Bad Salzdetfurth-Diekholzen mbH
+& Co. KG, DE, Bad Salzdetfurth6
+store-x Storage Capacity Exchange GmbH, DE, Leipzig
+50.0
+49.0
+Three Rocks Solar, LLC, US, Wilmington²
+100.0
+Strom Germering GmbH, DE, Germering2
+90.0
+Tierra Blanca Wind Farm, LLC, US, Wilmington²
+100.0
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach²
+100.0
+Tipton Wind, LLC, US, Wilmington²
+100.0
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach²
+Tishman Speyer Real Estate Venture VI Parallel (ON), L.P.,
+Stromnetz Weiden i. d. OPf. GmbH & Co. KG, DE,
+Weiden i. d. OPf.6
+US, New York²
+99.0
+TPG Wind Limited, GB, Coventry
+70.0
+Uniper UK Trustees Limited, GB, Coventry²
+100.0
+Name, location
+Equity
+Tables and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+VKE-FONDS, DE, Düsseldorf¹
+OB 5, DE, Düsseldorf¹
+OB 4, DE, Düsseldorf¹
+OB 2, DE, Düsseldorf¹
+HANSEFONDS, DE, Düsseldorf¹
+E.ON Treasury, DE, Düsseldorf¹
+Stake (%)
+ASF, DE, Düsseldorf¹
+€ in millions
+BKW Energie AG, CH, Bern79
+100.0
+100.0
+100.0
+Stake (%)
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing?
+Stadtwerke Wertheim GmbH, DE, Wertheim'
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg7
+Mellansvensk Kraftgrupp AB, SE, Stockholm?
+infra fürth gmbh, DE, Fürth?
+HEW HofEnergie+Wasser GmbH, DE, Hof?
+GKL-Gemeinschaftskraftwerk Hannover-Linden GmbH, DE, Hanover
+Gasversorgungsunternehmen mbH & Co. KG, DE, Straelen'
+GasLINE Telekommunikationsnetzgesellschaft deutscher
+Forsmarks Kraftgrupp AB, SE, Östhammar?
+e-werk Sachsenwald GmbH, DE, Reinbek
+ENEVA S.A., BR, Rio de Janeiro 7,9
+Other companies in which share investments are held
+100.0
+Consolidated investment funds
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+66.7
+Windpark Naundorf OHG, DE, Potsdam²
+Wärme- und Wasserversorgung Friedensstadt GmbH, DE,
+Trebbin6
+77.8
+Windpark Mutzschen OHG, DE, Potsdam²
+95.0
+Handelsgesellschaft, DE, Wolfsburg6
+83.3
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+Volkswagen AG Preussen Elektra AG Offene
+23.2
+Windkraft Gerolsbach GmbH & Co. KG, DE, Gerolsbach6
+100.0
+Visioncash, GB, Coventry¹
+80.0
+50.0
+Name, location
+WIT Ranch Wind Farm, LLC, US, Wilmington²
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). - 3Joint operations pursuant to IFRS 11. . 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. - ⁹IFRS figures.
+49.0
+100.0
+49.0
+25.0
+ZAO Gazprom YRGM Development, RU, Salekhard¹
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava
+Zenit-SIS GmbH, DE, Düsseldorf²
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE,
+Vienenburg6
+50.0
+Warmtebedrijf Exploitatie N.V., NL, Rotterdam6
+50.1
+50.0
+22.2
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach6
+Yorkshire Windpower Limited, GB, Coventry
+Wärmeversorgungsgesellschaft Königs Wusterhausen
+mbH, DE, Königs Wusterhausen²
+40.0
+100.0
+100.0
+100.0
+100.0
+50.2
+Valverde Wind Farm, LLC, US, Wilmington²
+100.0
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+50.2
+VEBA Electronics LLC, US, Wilmington¹
+100.0
+VEBACOM Holdings LLC, US, Wilmington²
+100.0
+Wildcat Wind Farm II, LLC, US, Wilmington²
+Wildcat Wind Farm III, LLC, US, Wilmington²
+100.0
+100.0
+Venado Wind Farm, LLC, US, Wilmington²
+100.0
+Windenergie Leinetal GmbH & Co. KG, DE, Freden6
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+26.2
+100.0
+100.0
+Untere Iller AG, DE, Landshut²
+60.0
+Weiẞmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+93.5
+Uranit GmbH, DE, Jülich4
+50.0
+Werk Kraft GmbH, DE, Unterschleißheim²
+100.0
+Utilities Center Maasvlakte Leftbank b.v., NL, Rotterdam¹
+100.0
+West of the Pecos Solar LLC, US, Wilmington²
+100.0
+Utility Debt Services Limited, GB, Coventry²
+100.0
+Western Gas Limited, GB, Coventry²
+Valencia Solar LLC, US, Tucson¹
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden
+24.9
+10.0
+0.8
+37.3
+8.5
+3.7
+27.2
+16.0
+-420.8
+267.4
+12.3
+209.7
+1,425.8
+6.6
+€ in millions
+Earnings
+39.4
+Kaiser-Wilhelm-Koog²
+100.0
+Vici Wind Farm, LLC, US, Wilmington²
+Waldbüttelbrunn6
+49.0
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland
+49.0
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg
+(Altmark)²
+100.0
+Versorgungskasse Energie (VVaG), DE, Hanover¹
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+79.3
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein6
+20.0
+Osterburg (Altmark)2
+100.0
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Győr²
+100.0
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+Windenergie Osterburg Verwaltungs GmbH, DE,
+49.0
+100.0
+Sydkraft Thermal Power AB, SE, Malmö¹
+48.0
+RGE Holding GmbH, DE, Essen 1,8
+100.0
+Settlers Trail Wind Farm, LLC, US, Wilmington¹
+100.0
+Rhein-Main-Donau Aktiengesellschaft, DE, Munich¹
+77.5
+ŠKO ENERGO, s.r.o., CZ, Mladá Boleslav
+21.0
+Ringhals AB, SE, Varberg5
+29.6
+100.0
+42.5
+R-KOM Regensburger Telekommunikationsgesellschaft
+Snow Shoe Wind Farm, LLC, US, Wilmington²
+Servicii Energetice pentru Acasa - SEA Complet S.A., RO,
+Târgu Mureş
+35.5
+WASSERVERSORGUNG AG & CO KG, DE, Regensburg
+Stake (%)
+regiolicht GmbH, DE, Helmstedt²
+89.8
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg6
+Perstorps Fjärrvärme AB, SE, Perstorp
+50.0
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+33.3
+50.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures
+pursuant to IFRS 11. - 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which
+share investments are held. . *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+212 Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+Name, location
+REWAG REGENSBURGER ENERGIE- UND
+Stake (%)
+Name, location
+211
+100.0
+mbH & Co. KG, DE, Regensburg
+Société des Eaux de l'Est S.A., FR, Saint-Avold (Creutzwald)6
+Roscoe WF Holdco, LLC, US, Wilmington¹
+100.0
+Roscoe Wind Farm, LLC, US, Wilmington¹
+Rosengård Invest AB, SE, Malmö6
+RuhrEnergie GmbH, EVR, DE, Gelsenkirchen¹
+100.0
+25.0
+100.0
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+SQC Kvalificeringscentrum AB, SE, Stockholm
+35.0
+33.3
+Städtische Betriebswerke Luckenwalde GmbH, DE,
+Luckenwalde6
+29.0
+S.C. Salgaz S.A., RO, Salonta²
+60.1
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+Heidelberg²
+Städtische Werke Magdeburg GmbH & Co. KG, DE,
+Magdeburg5
+50.0
+Sønderjysk Biogasproduktion I/S, DK, Vojens
+20.0
+Rødsand 2 Offshore Wind Farm AB, SE, Malmö5
+25.0
+R-KOM Regensburger Telekommunikations-
+Söderåsens Bioenergi AB, SE, Malmö²
+63.3
+verwaltungsgesellschaft mbH, DE, Regensburg
+20.0
+Solar Energy s.r.o., CZ, Znojmo
+20.0
+25.0
+100.0
+Sollefteåforsens AB, SE, Sundsvall
+50.0
+RMD-Consult GmbH Wasserbau und Energie, DE, Munich²
+100.0
+Sönderjysk Biogas Bevtoft A/S, DK, Vojens
+50.0
+RMD Wasserstraßen GmbH, DE, Munich²
+26.7
+35.5
+Peißenberger Kraftwerksgesellschaft mit beschränkter
+Haftung, DE, Peißenberg²
+since 2010 (until September 30, 2015)
+•
+E.ON Global Commodities SE1 until
+August 31, 2015
+. ENEVA S.A.
+(Chairman) until November 28, 2015
+.
+Höegh LNG Holdings Ltd
+since September 15, 2015
+• eSmart systems AS
+since September 17, 2015
+• OAO E.ON Russia²
+(Chairman until July 2, 2015)
+Mike Winkel
+Born 1970 in Neubrandenburg, Germany
+Member of the Management Board
+since 2013 (until May 31, 2015)
+E.ON Generation GmbH¹
+•
+(Chairman) until May 31, 2015
+Member of the Management Board
+Born 1963 in Bærum, Norway,
+Jørgen Kildahl
+Nord Stream AG since June 1, 2015
+Finance, Mergers and Acquisitions,
+Accounting and Controlling, Legal
+Affairs and Compliance, Taxes, Business
+Services for Finance, Exploration and
+Production, Procurement and Real
+Estate Managementect
+•
+Uniper AG1 since December 18, 2015
+Klaus Schäfer
+Born 1967 in Regensburg, Germany
+Member of the Management Board
+since 2013 (until December 31, 2015)
+Generation, Global Commodities, Engi-
+neering and Major Projects, Commercial
+Operations, Brazil, Russia, Uniper Projects
+⚫ E.ON Business Services GmbH¹
+(Chairman) until May 31, 2015
+⚫ E.ON Global Commodities SE1
+•
+E.ON Sverige AB² until May 31, 2015
+• OAO E.ON Russia²
+•
+•
+(Chairman) since September 7, 2015
+E.ON Generation GmbH¹
+(Chairman) since November 21, 2015
+Uniper Kraftwerke GmbH1
+(Chairman) since December 4, 2015
+E.ON Italia SpA² (Chairman) from
+June 30, 2015, until January 8, 2016
+•
+WASSERVERSORGUNG AG, DE, Regensburg
+Unless otherwise indicated, information is as of December 31, 2015, or as of the date on which membership in the E.ON Management Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2, of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+¹Exempted E.ON Group directorship. 2Other E.ON Group directorship.
+Panther Creek Wind Farm I&II, LLC, US, Wilmington¹
+100.0
+RDE Verwaltungs-GmbH, DE, Würzburg²
+100.0
+Paradise Cut Battery, LLC, US, Wilmington²
+100.0
+REGAS GmbH & Co KG, DE, Regensburg
+50.0
+Pecém II Participações S.A., BR, Rio de Janeiro4
+50.0
+REGAS Verwaltungs-GmbH, DE, Regensburg6
+50.0
+PEG Infrastruktur AG, CH, Zug¹
+100.0
+REGENSBURGER ENERGIE- UND
+100.0
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG,
+DE, Würzburg²
+100.0
+Panther Creek Solar, LLC, US, Wilmington²
+Raab Karcher Electronic Systems Limited, GB, Coventry²
+100.0
+000 Noginskiy Teplovoy Zentr, RU, Moscow¹
+67.0
+RAG-Beteiligungs-Aktiengesellschaft, AT, Maria Enzersdorf
+30.0
+000 Uniper, RU, Shatura²
+•
+100.0
+50.1
+Oskarshamns Energi AB, SE, Oskarshamn
+50.0
+Pannon Watt Energetikai Megoldások ZRt., HU, Győr
+49.9
+Rauschbergbahn Gesellschaft mit beschränkter Haftung,
+DE, Ruhpolding²
+77.4
+Rampion Offshore Wind Limited, GB, Coventry¹
+100.0
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav
+SEC Łobez Sp. z o.o., PL, Łobez²
+49.0
+Ribnitz-Damgarten6
+100.0
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+39.0
+SEC Myślibórz Sp. z o.o., PL, Myślibórz²
+89.9
+Stadtwerke Garbsen GmbH, DE, Garbsen
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+24.9
+100.0
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+24.9
+SEC Słubice Sp. z o.o., PL, Słubice²
+100.0
+Stadtwerke Husum GmbH, DE, Husum
+49.9
+SEC Strzelce Krajeńskie Sp. z o.o., PL, Strzelce Krajeńskie²
+SEC Połczyn-Zdrój Sp. z o.o., PL, Połczyn-Zdrój²
+100.0
+100.0
+25.0
+100.0
+10.0
+Sydkraft Nuclear Power AB, SE, Malmö¹
+49.0
+Stadtwerke Tornesch GmbH, DE, Tornesch
+Stadtwerke Vilshofen GmbH, DE, Vilshofen6
+Stadtwerke Wismar GmbH, DE, Wismar
+100.0
+Sydkraft Hydropower AB, SE, Sundsvall¹
+37.8
+SEC HR Sp. z o.o., PL, Szczecin²
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder
+Sydkraft Försäkring AB, SE, Malmö¹
+39.0
+SEC F Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH,
+SEC G Sp. z o.o., PL, Szczecin²
+100.0
+DE, Ebermannstadt6
+100.0
+Stadtwerke Lübz GmbH, DE, Lübz6
+25.0
+SERVICE plus GmbH, DE, Neumünster²
+SVH Stromversorgung Haar GmbH, DE, Haar
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+50.0
+25.1
+Stadtwerke Niebüll GmbH, DE, Niebüll6
+49.9
+SVO Holding GmbH, DE, Celle¹
+50.1
+Stadtwerke Parchim GmbH, DE, Parchim6
+24.9
+25.2
+100.0
+Stadtwerke Premnitz GmbH, DE, Premnitz
+35.0
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg
+25.1
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk6
+49.0
+SWS Energie GmbH, DE, Stralsund
+SVO Vertrieb GmbH, DE, Celle¹1
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald
+Stake (%)
+Name, location
+100.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+29.0
+Service Plus Recycling GmbH, DE, Neumünster²
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . ³Joint operations pursuant to IFRS 11. - 4Joint ventures
+pursuant to IFRS 11. 5Associated company (valued using the equity method). - 6Associated company (valued at cost for reasons of immateriality). . 7Other companies in which
+share investments are held. - *This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹IFRS figures.
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity
+Investments Are Held (as of December 31, 2015)
+CEO Letter
+100.0
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Sydkraft AB, SE, Malmö¹
+Consolidated Financial Statements
+Tables and Explanations
+Name, location
+Stake (%)
+41.0
+49.0
+Stadtwerke Ribnitz-Damgarten GmbH, DE,
+49.0
+49.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf6
+100.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+49.9
+Stadtwerke Bredstedt GmbH, DE, Bredstedt
+100.0
+SEC E Sp. z o.o., PL, Szczecin²
+41.0
+Stadtwerke Bogen GmbH, DE, Bogen
+100.0
+SEC Dębno Sp. z.o.o., PL, Dębno²
+30.0
+Stadtwerke Blankenburg GmbH, DE, Blankenburg
+100.0
+SEC D Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Bergen GmbH, DE, Bergen
+100.0
+SEC C Sp. z o.o., PL, Szczecin²
+24.9
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE,
+Bayreuth5
+100.0
+SEC Barlinek Sp. z o.o., PL, Barlinek²
+100.0
+SEC B Sp. z o.o., PL, Szczecin²
+49.0
+36.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt6
+Stadtwerke Barth GmbH, DE, Barth6
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+100.0
+49.0
+100.0
+Sand Bluff WF Holdco, LLC, US, Wilmington¹
+100.0
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+Magdeburg
+26.7
+Sand Bluff Wind Farm, LLC, US, Wilmington¹
+Stadtversorgung Pattensen Verwaltung GmbH, DE,
+Pattensen6
+100.0
+20.0
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+Neustadt a. Rbge.6
+24.9
+Scarweather Sands Limited, GB, Coventry
+SBI Jordberga AB, SE, Linköping
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Neustadt a. Rbge.6
+Schleswig-Holstein Netz GmbH, DE, Rendsburg²
+50.0
+93.5
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+SEC A Sp. z o.o., PL, Szczecin²
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+100.0
+SCF2 S.r.I., IT, Rome²
+24.9
+49.0
+215
+16,440 2,482
+13,031
+Germany
+32
+24
+32
+24
+2,198
+8,419 8,419 14,899
+226
+Natural gas
+Oil
+5,513 12,322
+1,383 1,714
+3,530
+Wind
+2,856
+6,273
+1,612
+33
+967
+1,579
+Hydro
+1,383 1,714
+21,672
+33
+931
+4,816
+Hard coal
+I
+1
+15,728
+18,864
+Nuclear
+1,873 2,511
+4,816 6,273
+1,873
+Lignite
+20
+20 2,263 1,509
+2,283
+0.3
+1,529
+2,511
+2,824
+1.6
+Other
+2014
+2015
+Germany
+2014
+2015
+2014
+Other EU Countries Non-EU Countries
+2015
+2014
+2015
+Nuclear
+37.5
+43.1
+Lignite
+2.9
+2.9
+Hard coal
+13.1
+Wind
+Other
+4.7
+4.7
+Hydro
+0.2
+0.1
+17.9
+Natural gas, oil
+2015
+Billion kWh
+Renewables
+Generation
+1.1
+3,609
+3,530
+3,609
+Other
+Outside Germany
+72
+812
+13,657 23,632 5,139
+30
+57
+253
+253
+355
+1,122
+0.9
+6,490
+1,237 10,682 9,928 30,751
+41,286
+E.ON Group
+26,688
+40,072 7,621 8,688
+215
+226
+1,273
+1,237 10,682 9,928 46,479
+60,151
+221
+222 Tables and Explanations
+Owned Generation by Energy Source
+1,273
+213
+December 31
+213
+262
+15,296 2,366 2,078
+12,029
+Germany
+31
+27
+31
+27
+Other
+179
+470
+5
+8
+174
+462
+Wind
+1,925
+1,923
+21
+19
+1,904 1,904
+266
+Hydro
+14,657
+Nuclear
+7,050
+7,050
+1,468
+1,357
+12,172
+5,513
+Natural gas
+4,816 6,273
+4,816 6,273
+Hard coal
+1,293
+1,925
+1,263
+1,895
+30
+30
+Lignite
+2,799
+2,504
+2,799
+2,504
+17,640
+1,105
+1,105
+102
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+2014
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Generation
+Renewables
+Germany
+Other EU Countries Non-EU Countries
+E.ON Group
+MW
+2015
+2015
+2014
+0.4
+2014
+Nuclear
+4,128
+5,403
+102
+1,003 1,003
+Oil
+3,521
+3,440
+107
+106
+3,414
+3,334
+Natural gas
+13,920
+4,976
+4,976
+3,064
+Hard coal
+500
+500
+500
+500
+Lignite
+5,403
+4,128
+3,064
+20,690
+Oil
+1,383
+Hard coal
+900
+900
+900
+900
+Lignite
+5,746
+4,471
+5,746
+4,471
+Nuclear
+2014
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+2,902
+4,916
+2,902
+4,916
+501
+Wind
+1,992
+1,988
+7
+7
+1,981 1,985
+Hydro
+1,105
+1,105
+2014
+102
+1,003
+1,003
+Oil
+3,960
+3,837
+85
+82
+3,875
+3,755
+Natural gas
+102
+501
+2015
+Other EU Countries Non-EU Countries
+812
+23,770
+72
+14,288
+Outside Germany
+Other
+4,218
+3,970
+2
+3
+4,216
+3,967
+Wind
+3,049
+1,805
+32
+32
+3,017
+1,773
+Hydro
+1,714
+1,383
+1,714
+30
+5,770 7,363
+130
+253
+253
+Germany
+Renewables
+Generation
+December 31
+MW
+Fully Consolidated Generating Capacity
+58,871
+45,335
+8,945 8,313
+1,675 1,785
+266
+E.ON Group
+262
+26,317
+E.ON Group
+41,231
+30,678
+8,313
+8,945
+1,785
+1,675
+1,195
+355
+39,066 8,136 9,441
+0.3
+8.93
+55.1
+Station use,
+595.0 566.2
+795.8 796.4
+4.8 -300.8 -325.9
+64.0 -300.8 -325.9
+5.0
+58.8
+136.2
+139.9
+85.5 128.7
+131.5
+86.0
+89.2
+658.5 646.9
+32.0
+31.1
+153.5
+127.5
+Total
+88.7
+646.9
+658.5
+3.9
+3.8
+14.8
+11.1
+line loss, etc.
+side sources
+-1.4
+-0.9
+Renewables
+Power Sales¹
+1Adjusted for discontinued operations.
+2Adjusted for E.ON Energy Sales.
+780.2
+780.9
+62.0 -300.8 -325.9
+56.7
+82.1 123.9 132.1
+85.4
+31.1 658.5 646.9
+31.1
+151.9
+126.1
+Power sales
+-14.9 -16.2
+-2.0
+-2.1
+-7.8
+-7.6
+-3.9
+-3.8
+-1.6
+modities/out-
+Global Com-
+12.3 15.0
+125.5
+Owned generation 106.3
+2014
+2015 2014 2015
+2014
+2015
+Billion kWh
+E.ON Group
+Consolidation
+Countries
+Non-EU
+Other EU
+Countries
+Germany²
+Global
+Commodities²
+Renewables
+Generation
+223
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+25.3
+26.5
+Purchases
+21.2
+0.2
+0.2
+1.6
+2.0
+13.2
+10.1
+power plants
+Jointly owned
+607.3 581.2
+-325.9
+Global
+Commodities²
+4.8 -300.8
+59.2
+53.8
+5.0
+2015 2014
+2015 2014 2015 2014
+2015 2014
+2.6 3.5
+128.9 136.4
+2015 2014
+0.5
+0.5
+88.7 85.5
+658.5 646.9
+5.5
+5.8
+28.0
+188.5 215.2
+Report of the Supervisory Board
+Germany²
+Non-EU
+Countries
+Global Commodities²
+Gas Sales¹
+2Adjusted for E.ON Energy Sales.
+¹Adjusted for discontinued operations.
+62.0 -300.8 -325.9 536.3 521.9
+62.0 -300.8 -325.9 780.9 780.2
+11.4 16.3 56.7
+123.9 132.1 56.7
+3.8
+82.1
+7.7
+31.1 658.5 646.9 85.4
+26.6 25.5 635.7 620.3
+31.1
+99.0 119.9
+126.1 151.9
+Total
+Commodities
+Global
+Wholesale market/
+258.3
+244.6
+115.8
+78.3 112.5
+77.7
+26.6
+5.6 22.8
+Germany²
+4.5
+Other EU Countries
+E.ON Group
+60.1
+I&C
+99.6
+105.5
+77.4
+80.5
+22.2
+25.0
+Residential and SME
+2014
+2015
+2014
+E.ON Stock
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+Billion kWh
+Consolidation
+32.0
+27.1
+segments
+45.4
+45.2
+19.2
+18.9
+SME
+Residential and
+2015
+2014
+2015
+Billion kWh
+Generation
+2014
+2015
+2015 2014
+2015 2014
+2015 2014
+2015 2014
+2015 2014
+2014
+E.ON Group
+Consolidation
+I&C
+3.3
+3.6
+8.3
+Customer
+98.9
+87.7
+94.8
+92.8
+64.6
+64.1
+0.2
+0.1
+44.7
+Other EU
+Countries
+44.8
+14.5
+5.6
+4.5
+28.4
+23.8
+Sales partners
+67.2 70.2
+14.4
+14.0
+6.6
+20.0
+CEO Letter
+Power Procurement¹
+100
+19.7
+60.5
+51.2
+Outside Germany
+2.6
+0.4
+0.6
+0.4
+0.2
+1.8
+Other
+11.8
+9.8
+11.8
+9.8
+Wind
+9.5
+9.9
+9.5
+9.9
+Hydro
+21.5
+69.8
+2.6
+53.8
+52
+Germany
+Other
+Wind
+Hydro
+215.2
+188.5
+59.2
+53.8
+3.5
+2.6
+0.5
+0.5
+26.5
+25.3
+125.5
+106.3
+Total
+144.7
+127.3
+59.2
+3.5
+61.9
+50.2
+44.8
+0.3
+0.9
+4.7
+4.7
+1.3
+1.7
+17.9
+13.1
+2.9
+2.9
+43.1
+37.5
+2014
+2015
+2014
+E.ON Group
+0.5
+0.5
+5.0
+5.6
+65.0
+0.4
+0.3
+61.2
+70.5
+2.7
+2.0
+16.9
+15.1
+Natural gas, oil
+29.5
+23.9
+29.5
+23.9
+Hard coal
+52
+9.2
+10.0
+9.0
+0.2
+0.2
+Lignite
+12.3
+12.2
+12.3
+12.2
+Nuclear
+9.2
+Percentages
+Nuclear
+35
+15
+1
+Other
+5
+5
+45
+39
+Wind
+4
+5
+36
+39
+Hydro
+33
+34
+85
+83
+77
+77
+13
+14
+17
+1
+Outside Germany
+48
+100
+100
+100
+100
+100
+100
+100
+100
+100
+100
+Natural gas, oil
+100
+67
+68
+100
+100
+100
+100
+81
+78
+48
+48
+Total
+Germany
+14
+24
+100
+100
+19
+22
+22
+60
+80
+1
+3
+18
+19
+40
+20
+1
+14
+2
+35
+33221N
+Natural gas, oil
+Hard coal
+Lignite
+20
+20
+2
+1
+22
+Hard coal
+4
+5
+15
+17
+6
+8
+Lignite
+6
+13
+6
+12
+Nuclear
+33
+32
+2
+2
+1
+1
+9
+7
+10
+Report of the Supervisory Board
+19.2
+Attributable Generating Capacity
+Value at risk ("VaR")
+Risk measure that indicates the potential loss that a portfolio
+of investments will not exceed with a certain degree of prob-
+ability (for example, 99 percent) over a certain period of time
+(for example, one day). Due to the correlation of individual
+transactions, the risk faced by a portfolio is lower than the
+sum of the risks of the individual investments it contains.
+Working capital
+The difference between a company's current operating assets
+and current operating liabilities.
+227
+228
+Further information
+E.ON SE
+E.ON-Platz 1
+40479 Düsseldorf
+Germany
+T +49 211-4579-0
+info@eon.com
+www.eon.com
+Media Relations
+T +49 201-184-4236
+presse@eon.com
+Investor Relations
+T +49 201-184-2804
+investorrelations@eon.com
+Creditor Relations
+T +49 201-184-6526
+Key measure of E.ON's financial performance based on residual
+wealth calculated by deducting the cost of capital (debt and
+equity) from operating profit. It is equivalent to the return
+spread (ROACE minus the cost of capital) multiplied by average
+capital employed, which represents the average interest-
+bearing capital tied up in the E.ON Group.
+creditorrelations@eon.com
+Value added
+Underlying net income
+Other non-operating earnings
+Income and expenses that are unusual or infrequent, such as
+book gains or book losses from significant disposals as well
+as restructuring expenses (see EBIT).
+Profit at Risk ("PaR")
+Risk measure that indicates, with a certain degree of confi-
+dence (for example, 95 percent), that changes in market prices
+will not cause a profit margin to fall below expectations
+during the holding period, depending on market liquidity. For
+E.ON's business, the main market prices are those for power,
+gas, coal, and carbon.
+Purchase price allocation
+In a business combination accounted for as a purchase, the
+values at which the acquired company's assets and liabilities
+are recorded in the acquiring company's balance sheet.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Rating
+Standardized performance categories for an issuer's short-
+and long-term debt instruments based on the probability of
+interest payment and full repayment. Ratings provide investors
+and creditors with the transparency they need to compare
+the default risk of various financial investments.
+Return on equity
+The return earned on an equity investment (in this case, E.ON
+stock), calculated after corporate taxes but before an investor's
+individual income taxes.
+ROACE
+Acronym for return on average capital employed. A key indi-
+cator for monitoring the performance of E.ON's business,
+ROACE is the ratio between E.ON's EBIT and average capital
+employed. Average capital employed represents the average
+interest-bearing capital tied up in the E.ON Group.
+ROCE
+Acronym for return on capital employed. ROCE is the ratio
+between E.ON's EBIT and capital employed. Capital employed
+represents the interest-bearing capital tied up in the E.ON
+Group.
+Syndicated line of credit
+Credit facility extended by two or more banks that is good
+for a stated period of time.
+An earnings figure after interest income, income taxes, and
+non-controlling interests that has been adjusted to exclude
+certain extraordinary effects. The adjustments include effects
+from the marking to market of derivatives, book gains and
+book losses on disposals, restructuring expenses, and other
+non-operating income and expenses of a non-recurring or
+rare nature (after taxes and non-controlling interests). Under-
+lying net income also excludes income/loss from discontinued
+operations, net.
+Only the German version of this Annual Report is legally binding.
+Production & Typesetting
+Printing
+Jung Produktion, Düsseldorf
+2011
+2012
+2013
+2014
+2015
+112,954
+EBITDA²
+132,093
+9,293 10,771
+119,615 113,095 116,218
+9,191
+8,376
+7,557
+EBIT2
+5,438
+7,012
+5,642
+4,695
+4,369
+Net income/Net loss
+-1,861
+2,613
+Sales
+Sales and earnings
+€ in millions
+Summary of Financial Highlights¹
+Charterhouse Print Management Deutschland
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Explanatory Report of the Management Board on
+the Disclosures Pursuant to Section 289, Paragraph 4,
+and Section 315, Paragraph 4, as well as Section 289,
+Paragraph 5, of the German Commercial Code
+The Management Board has read and discussed the disclo-
+sures pursuant to Section 289, Paragraph 4 and Section 315,
+Paragraph 4 of the German Commercial Code contained in
+the Combined Group Management Report for the year ended
+December 31, 2015, and issues the following declaration
+regarding these disclosures:
+The disclosures pursuant to Section 289, Paragraph 4 and
+Section 315, Paragraph 4 of the German Commercial Code
+contained in the Company's Combined Group Management
+Report are correct and conform with the Management
+Board's knowledge. The Management Board of therefore con-
+fines itself to the following statements:
+Beyond the disclosures contained in the Combined Group
+Management Report (and legal restrictions such as the exclu-
+sion of voting rights pursuant to Section 136 of the German
+Stock Corporation Act), the Management Board is not aware of
+any restrictions regarding voting rights or the transfer of
+shares. The Company is not aware of shareholdings in the Com-
+pany's share capital exceeding ten out of one hundred voting
+rights, so that information on such shareholdings is not
+necessary. There is no need to describe shares with special con-
+trol rights (since no such shares have been issued) or special
+restrictions on the control rights of employees' shareholdings
+(since employees who hold shares in the Company's share
+capital exercise their control rights directly, just like other
+shareholders).
+The right, not the obligation, to buy or sell an underlying
+asset (such as a security or currency) at a specific date at
+a predetermined price from or to a counterparty or seller.
+Buy options are referred to as calls, sell options as puts.
+To the extent that the Company has agreed to settlement
+payments for Management Board of members in the case of
+a change of control, the purpose of such agreements is to
+preserve the independence of Management Board members.
+Internal controls are an integral part of our accounting pro-
+cesses. Guidelines define uniform financial-reporting docu-
+mentation requirements and procedures for the entire E.ON
+Group. We believe that compliance with these rules provides
+sufficient certainty to prevent error or fraud from resulting in
+material misrepresentations in the Consolidated Financial
+Statements, the Combined Group Management Report, and
+the Interim Reports.
+Düsseldorf, February 29, 2016
+E.ON SE
+Management Board
+Teyssen
+Birnbaum
+Reutersberg
+Sen
+219
+220 Tables and Explanations
+The Management Board also read and discussed the disclo-
+sures in the Combined Group Management Report pursuant to
+Section 289, Paragraph 5, of the German Commercial Code. The
+disclosures contained in the Combined Group Management
+Report on the key features of our internal control and risk
+management system for accounting processes are complete
+and comprehensive.
+2,459
+Option
+Net financial position
+57.4
+0.4
+56.7
+16.7
+137.1
+14.9
+132.1
+-452.0
+-452.0
+-517.4
+-517.4
+1,273.8
+714.8
+1,721.8 1,171.0
+¹Adjusted for discontinued operations.
+²Adjusted for E.ON Energy Sales.
+224 Glossary of Financial Terms
+Actuarial gains and losses
+The actuarial calculation of provisions for pensions is based
+on projections of a number of variables, such as projected
+future salaries and pensions. An actuarial gain or loss is
+recorded when the actual numbers turn out to be different
+from the projections.
+Beta factor
+Indicator of a stock's relative risk. A beta coefficient of more
+than one indicates that a stock has a higher risk than the
+overall market; a beta coefficient of less than one indicates
+that it has a lower risk.
+CEO Letter
+Bond
+Debt instrument that gives the holder the right to repayment
+of the bond's face value plus an interest payment. Bonds are
+issued by public entities, credit institutions, and companies
+and are sold through banks. They are a form of medium- and
+long-term debt financing.
+Capital employed
+1.9
+Represents the interest-bearing capital tied up in the E.ON
+Group. It is equal to a segment's non-current and current
+operating assets less the amount of non-interest-bearing
+available capital. Other equity interests are included at their
+acquisition cost, not their fair value.
+1,707.2 1,216.9
+1,499.6
+Wholesale market/Global Commodities
+Total
+38.3
+117.7
+120.8
+Sales partners
+212.0
+221.6
+11.3
+12.7
+1.5
+1.5
+224.8
+235.8
+Customer segments
+272.1
+282.7
+55.5
+56.3
+120.4
+117.2
+448.0
+456.2
+1,979.3
+Capital stock
+The aggregate face value of all shares of stock issued by a com-
+pany; entered as a liability in the company's balance sheet.
+Cash flow statement
+EBIT
+Earnings before interest and taxes. The EBIT figure used by
+E.ON is derived from income/loss from continuing operations
+before interest income and income taxes and is adjusted to
+exclude certain extraordinary items, mainly other income and
+expenses of a non-recurring or rare nature (see Other non-
+operating earnings).
+EBITDA
+Earnings before interest, taxes, depreciation, and amortization.
+It equals the EBIT figure used by E.ON before depreciation
+and amortization. It is our key earnings figure for purposes of
+internal management control and as an indicator of our busi-
+nesses' long-term earnings power.
+Economic investments
+Cash-effective capital investments plus debt acquired and
+asset swaps.
+Economic net debt
+Key figure that supplements net financial position with
+pension obligations and asset retirement obligations (less
+prepayments to the Swedish nuclear fund).
+Equity method
+Method for valuing shareholdings in associated companies
+whose assets and liabilities are not fully consolidated. The pro-
+portional share of the company's annual net income (or loss)
+is reflected in the shareholding's book value. This change is
+usually shown in the owning company's income statement.
+225
+226 Glossary of Financial Terms
+Fair value
+The price at which assets, debts, and derivatives pass from a
+willing seller to a willing buyer, each having access to all the
+relevant facts and acting freely.
+Financial derivative
+Contractual agreement based on an underlying value (reference
+interest rate, securities prices, commodity prices) and a
+nominal amount (foreign currency amount, a certain number
+of stock shares).
+Goodwill
+The value of a subsidiary as disclosed in the parent company's
+consolidated financial statements resulting from the consoli-
+dation of capital (after the elimination of hidden reserves and
+liabilities). It is calculated by offsetting the carrying amount
+of the parent company's investment in the subsidiary against
+the parent company's portion of the subsidiary's equity.
+Impairment test
+Periodic comparison of an asset's book value with its fair value.
+A company must record an impairment charge if it determines
+that an asset's fair value has fallen below its book value. Good-
+will, for example, is tested for impairment on at least an
+annual basis.
+International Financial Reporting Standards ("IFRS")
+Under regulations passed by the European Parliament and
+European Council, capital-market-oriented companies in the
+EU must apply IFRS.
+Businesses or parts of a business that are planned for divest-
+ment or have already been divested. They are subject to
+special disclosure rules.
+Discontinued operations
+Contractual framework and standard documentation for the
+issuance of bonds.
+Debt issuance program
+Calculation and presentation of the cash a company has
+generated or consumed during a reporting period as a result
+of its operating, investing, and financing activities.
+Cash provided by operating activities
+Cash provided by, or used for, operating activities of continuing
+operations.
+Commercial paper ("CP")
+Unsecured, short-term debt instruments issued by commercial
+firms and financial institutions. CPs are usually quoted on a
+discounted basis, with repayment at par value.
+Consolidation
+Accounting approach in which a parent company and its affil-
+iates are presented as if they formed a single legal entity. All
+intracompany income and expenses, intracompany accounts
+payable and receivable, and other intracompany transactions
+are offset against each other. Share investments in affiliates
+are offset against their capital stock, as are all intracompany
+credits and debts, since such rights and obligations do not
+exist within a single legal entity. The adding together and con-
+solidation of the remaining items in the annual financial
+statements yields the consolidated balance sheets and the
+consolidated statements of income.
+Contractual trust arrangement ("CTA")
+Model for financing pension obligations under which company
+assets are converted to assets of a pension plan administered
+by an independent trust that is legally separate from the
+company.
+CEO Letter
+Difference between total financial assets (cash and non-
+current securities) and total financial liabilities (debts to
+financial institutions, third parties, and associated companies,
+including effects from currency translation).
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Controllable costs
+Our key figure for monitoring operational costs that manage-
+ment can meaningfully influence: the controllable portions
+of the cost of materials (in particular, maintenance costs and
+the costs of goods and services), certain portions of other
+operating income and expenses, and most personnel costs.
+Cost of capital
+Weighted average of the costs of debt and equity financing
+(weighted-average cost of capital: "WACC"). The cost of equity
+is the return expected by an investor in a given stock. The
+cost of debt is based on the cost of corporate debt and bonds.
+The interest on corporate debt is tax-deductible (referred to
+as the tax shield on corporate debt).
+Credit default swap ("CDS")
+A credit derivative used to hedge the default risk on loans,
+bonds, and other debt instruments.
+Debt factor
+Ratio between economic net debt and EBITDA. Serves as a
+metric for managing E.ON's capital structure.
+E.ON Stock
+38.4
+-3,130
+Net income/Net loss attributable to shareholders of E.ON SE
+5.2
+5.6
+5.3
+Earnings per share attributable to shareholders of E.ON SE (€)
+Equity5 per share (€)
+Twelve-month high per share (€)
+Twelve-month low per share (€)
+Year-end closing price per share6 (€)
+Dividend per share? (€)
+Dividend payout
+Market capitalization 6,8 (€ in billions)
+-1.16
+1.15
+1.10
+-1.64
+-3.60
+18.76
+18.33
+17.68
+12.72
+8.42
+6.7
+25.11
+5.9
+3.7
+28
+28
+21
+17
+Long-term capital as a percentage of non-current assets (%)
+104
+108
+104
+108
+109
+Economic net debt (at year-end)
+36,520
+35,845
+32,218
+33,394
+27,714
+Debt factor
+3.9
+3.3
+3.5
+4.0
+Cash provided by operating activities of continuing operations as a percentage of sales
+Stock
+19.52
+14.71
+15.46
+E.ON SE long-term ratings
+Moody's
+Standard & Poor's
+A3
+A3
+A3
+A3
+Baa1
+A
+A-
+A-
+A-
+BBB+
+Employees
+Employees at year-end
+78,889
+72,083
+61,327
+58,811
+56,490
+¹Starting in 2013, adjusted for discontinued operations and for the application of IFRS 10 and 11 and IAS 32. - 2Adjusted for extraordinary effects. ³As of the balance-sheet date.
+"Ratio between economic net debt and EBITDA. - 5Attributable to shareholders of E.ON SE.. 6At the end of December. - 7For the respective financial year; the 2015 figure is man-
+agement's proposed dividend. - 8Based on shares outstanding.
+17.4
+27.4
+25.6
+26.9
+14.74
+12.88
+13.80
+11.94
+12.56
+7.13
+16.67
+14.09
+13.42
+14.20
+26
+21.4
+1.10
+0.60
+0.50
+0.50
+1,905
+2,097
+1,145
+966
+976
+31.8
+1.00
+-6,377
+Equity ratio (%)
+4,174
+Non-current assets
+Current assets
+Total assets
+102,221
+50,651
+152,872
+96,563
+43,863
+140,426 132,330 125,690 113,693
+95,580
+36,750 42,625 40,081
+83,065 73,612
+Capital structure
+Equity
+39,613
+38,820 36,638 26,713
+19,077
+Capital stock
+2,001
+2,001
+2,001
+2,001
+2,001
+Minority interests without controlling influence
+3,876
+3,862
+Asset structure
+2,915
+Value added³
+640
+-2,219
+2,189
+2,091
+-3,160
+-6,999
+Value measures
+ROACE/through 2009 ROCE (%)
+Pretax cost of capital (%)
+8.4
+11.1
+9.2
+8.6
+9.4
+8.3
+7.7
+7.5
+7.4
+6.7
+90
+2,139
+1,031
+1,251
+2,128
+2,648
+Non-current liabilities
+Other liabilities and other
+35,260
+28,523
+23,487
+27,639 26,376
+Total assets and liabilities
+152,872
+140,426
+132,330 125,690 113,693
+Cash flow and investments
+Cash provided by operating activities of continuing operations
+6,610
+8,808
+6,260
+6,354
+6,133
+Cash-effective investments
+6,524
+6,997
+7,992
+4,637
+2,788
+3,883
+4,673
+4,007
+67,129
+65,027
+63,179 63,335
+61,172
+Provisions
+25,672
+Financial liabilities
+24,029
+Other liabilities and other
+Current liabilities
+Financial ratios
+17,428
+46,130 36,579 32,513 35,642
+31,376 30,655
+15,784 14,954
+16,175 15,563
+33,444
+Provisions
+4,985
+4,049
+4,353
+4,120
+4,280
+Financial liabilities
+5,885
+28,601 28,153
+21,937 18,051
+14,489 16,975
+61.1
+May 10, 2017
+August 9, 2017
+Financial Calendar
+May 11, 2016
+June 8, 2016
+August 10, 2016
+November 9, 2016
+March 15, 2017
+May 10, 2017
+November 8, 2017
+Interim Report: January - March 2016
+2016 Annual Shareholders Meeting
+Interim Report: January - June 2016
+Interim Report: January - September 2016
+Release of the 2016 Annual Report
+Interim Report: January - March 2017
+2017 Annual Shareholders Meeting
+Interim Report: January - June 2017
+Interim Report: January - September 2017
+€/
+MWh
+- Monthly German gas import prices (€/MWh)
+NCG gas front month (EEX) (€/MWh)
+_API#2 coal index front month ($/metric ton)
+■TTF gas front month (€/MWh)
+■ NBP gas front month (€/MWh)
+12.6
+50
+Crude Oil, Coal, and Natural Gas Price Movements in E.ON's Core Markets
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Brent crude oil front month ($/bbl)
+Strategy and Objectives
+45
+40
+100
+10/1/15
+7/1/15
+4/1/15
+1/1/15
+10/1/14
+7/1/14
+4/1/14
+40
+1/1/14
+$/bbl
+$/t
+27
+15
+20
+25
+25
+30
+35
+110
+E.ON Stock
+After a weak start to the year and a brief respite in the second
+quarter, coal prices continued their downward trend for the
+remainder of the year. The main driver was lower demand,
+which resulted in a decline in Chinese imports and a weak
+CEO Letter
+Italy's electricity consumption rose by 1.5 percent, from
+310.5 to 315.2 billion kWh. Its gas consumption was up 9 per-
+cent, from 649.7 to 708.1 billion kWh, owing to an increase in
+deliveries to gas-fired power plants and a temperature-driven
+increase in consumption by residential customers.
+France's electricity consumption rose by 3.6 percent to
+431 billion kWh, primarily because of colder temperatures in
+February. Adjusted for temperature effects, consumption was
+at the prior-year level. The increase in consumption by heavy
+industry, which is experiencing an economic recovery, was
+offset by lower consumption by residential, business, and small
+industrial customers.
+The Russian Federation generated 1,049.9 billion kWh of elec-
+tricity; its integrated power system (which does not include
+isolated systems) generated 1,026.8 billion kWh. Both figures
+are roughly at the prior-year level. Total electricity consump-
+tion in Russia was 1,036.4 billion kWh, also roughly at the
+prior-year level.
+Energy Prices
+Five main factors drove Europe's electricity and natural gas
+markets and Russia's electricity market in 2015:
+•
+•
+•
+international commodity prices (especially oil, gas, coal,
+and carbon-allowance prices)
+macroeconomic and political developments
+weather
+the availability of hydroelectricity in Scandinavia
+Economic growth was weak in 2015. Recent years have seen
+a divergence in the development of industrial economies and
+emerging market economies, and this trend continued: stable
+economic development in Europe and the United States was
+accompanied by a further decline in China's economic growth
+and a worsening of the recessions in Brazil and Russia. The
+euro lost more ground against the dollar in the fourth quarter
+in anticipation of an increase in the U.S. prime interest rate,
+which came in December. However, concerns that this would
+lead to euro-dollar parity proved unfounded. Another sharp
+decline in oil prices put substantial pressure on the Russian
+ruble, which in the fourth quarter reached a new all-time low.
+Oil markets, after seeing generally lower prices in the first
+quarter and then fairly stable prices in the second, had an
+eventful second half of the year. First, the nuclear agreement
+with Iran along with turbulence on China's stock market
+pushed oil prices sharply lower. Then prices recovered some-
+what in response to production declines in the United States
+and an intensification of the conflict in Yemen. In the fourth
+quarter, however, prices collapsed: a lack of coordination
+between OPEC members, rising inventories, a stronger U.S.
+dollar, and continued robust production figures sent oil below
+the $40 mark by the end of the year.
+Report of the Supervisory Board
+Electricity Price Movements
+€/MWh
+60
+50
+40
+30
+20
+10
+- U.K. baseload¹
+■Russia (Europe)²
+■Russia (Siberia)²
+-Nord Pool baseload¹
+EEX baseload¹
+1/1/14 4/1/14 7/1/14 10/1/14 1/1/15 4/1/15 7/1/15 10/1/15
+¹For next-year delivery.
+2Spot delivery (30-day average).
+90
+•
+the expansion of renewables capacity.
+in E.ON's Core Markets
+90
+60
+80
+4,397
+4,440
+Wind
+4,974
+Hydro
+3,728
+2,819
+Oil
+2,488
+24,211
+17,360
+Natural gas
+11,249
+Hard coal
+7,880
+Other
+382
+1,226
+Lower fuel prices had an adverse impact on U.K. power prices
+as well. This, coupled with a significant decline in power exports
+to France due to generally mild weather in Europe, sent power
+prices nearly to historic lows at the end of the year. Thanks to
+low gas prices, gas-fired generation became more economic
+relative to coal-fired generation.
+The first half of 2015 was the rainiest the Nordic region expe-
+rienced in more than 20 years. Above-average precipitation
+and a late snowmelt pushed spot power prices on the Nordic
+market substantially lower in the first three quarters. A dry
+start to the fourth quarter let to a slight reduction in water
+reservoir levels, which pushed power prices briefly higher
+at the end of October. However, substantial precipitation at
+the start of December, primarily in Norway, in conjunction
+with very mild weather reversed this trend. Low coal prices,
+export restrictions due to network maintenance, and the con-
+tinued growth of renewables capacity in Norway were also
+important factors.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+19
+19
+2,425
+1,793
+Technology and Innovation
+•
+•
+•
+Additional information in Tables and Explanations on page 220 et seq.
+5,000 10,000 15,000 20,000
+0
+MW
+Despite a difficult business environment, we still maintained
+our technology and innovation ("T&I") activities at a high level
+of intensity in 2015, while focusing increasingly on new offer-
+ings for end-customers and on innovative partnerships. The
+megatrend of digitalization along with dynamically changing
+energy markets are fundamentally transforming the energy
+supply landscape. E.ON customers and other stakeholders
+increasingly expect digital communications, products, and ser-
+vices. Each step of this transformation creates new challenges
+but also new opportunities. For E.ON to help the transforma-
+tion succeed, we need innovative technologies and solutions.
+In 2015 E.ON Innovation Centers and an Incubator, which were
+embedded in our existing businesses and steered by the T&I
+department at Group Management, coordinated activities in
+their respective technology area across our company:
+Lignite
+8,202
+6,632
+1/1/14 4/1/14 7/1/14 10/1/14 1/1/15 4/1/15 7/1/15 10/1/15
+Phase-two allowances
+5
+6
+7
+8
+in Europe
+€/metric ton
+28
+Carbon Allowance Price Movements
+European gas prices tracked the downward trend in energy
+prices and the fundamental shift in supply and demand caused
+by weak economic growth and very mild temperatures, particu-
+larly in the fourth quarter. Production continued to rise any-
+way. In particular, a large and increasingly liquid LNG market
+expanded global arbitrage opportunities, which reduced the
+price differences between regional markets. For this reason
+and because of higher imports from Norway, prices for next-
+year delivery fell to their lowest point in several years, further
+narrowing the spread between summer and winter prices.
+A temporary rise in gas prices was driven by a brief cold snap
+and uncertainty regarding a possible further reduction in
+Groningen field's maximum production. Across Europe, a reduc-
+tion in gas imports from Russia at the start of the year resulted
+in significant withdrawals from gas storage facilities through-
+out the winter; inventory levels returned to normal in the
+fourth quarter.
+outlook for coal-fired power generation in Europe due to low
+gas prices. At the same, coal production remained relatively
+stable because mine operators benefited from the weakness
+of their currencies-primarily the Russian ruble and the Colum-
+bian peso-against the U.S. dollar.
+40
+40
+50
+60
+70
+Prices for EU carbon allowances ("EUAS") under the European
+Emissions Trading Scheme rose by more than 15 percent during
+the year. In the first three quarters this was mainly in response
+to policy decisions regarding reforms to the scheme, a gener-
+ally positive mood in the marketplace, and a reduction in the
+number of EUAS available through auction. In the fourth quar-
+ter EUA prices were increasingly driven by overall developments
+in the energy industry. That said, the outcome of the Paris
+climate conference had less impact on prices than had been
+anticipated.
+According to initial estimates, Hungary's electricity consump-
+tion rose by 2.5 percent to 36.3 billion kWh because of higher
+consumption by industrial customers. Its gas consumption
+increased by 4.8 percent to 10,872 million cubic meters owing
+to lower average temperatures and higher consumption by
+industrial customers.
+Business Report
+Clean Dark and Spark Spreads in
+Germany
+Nuclear
+- Germany 2015 ■ Outside Germany 2015
+Germany 2014 - Outside Germany 2014
+Attributable Generating Capacity
+(Ownership Perspective)
+The E.ON Group's attributable generating capacity (that is,
+the capacity that reflects the percentage of E.ON's ownership
+stake in an asset) declined by 23 percent, from 58,871 MW at
+year-end 2014 to 45,335 MW at year-end 2015. The E.ON Group's
+fully consolidated generating capacity also declined by 23 per-
+cent, from 60,151 to 46,479 MW.
+Generating Capacity
+Business Performance
+resource.
+On the whole, German power prices moved lower in 2015.
+After a brief recovery at the end of the second quarter, prices
+for next-year delivery fell further in the second half of the year
+and, in December, sank to a twelve-year low owing to further
+declines in fuel prices, mainly for coal but also for natural gas.
+Low gas prices, however, had a positive effect on the clean
+dark spread, which on some days in December was positive
+for the first time in three years. Spot prices followed this
+downward trend owing to unseasonably mild temperatures
+and the resulting decline in demand in conjunction with high
+levels of wind power feed-in.
+Prices on the Russian power market had an unexceptional first
+half of the year, recovered in the third quarter in response
+to the planned increase in regulated gas tariffs, and then had
+a stable fourth quarter. Consumption in the European zone was
+much lower than usual due to mild temperatures, especially
+in December. But this had no negative impact on prices because
+it was counteracted by other price drivers. Prices in the Sibe-
+rian zone mainly tracked demand, although they were also
+influenced by the availability of hydroelectricity. The upward
+price movement that resulted from the increase in regulated
+gas tariffs in the third quarter was less pronounced than in
+the European zone because coal is Siberia's main generation
+Clean spark spread (front year)
+- Clean dark spread (front year)
+-5
+0
+5
+10
+15
+€/MWh
+1/1/14 4/1/14 7/1/14 10/1/14 1/1/15 4/1/15 7/1/15 10/1/15
+11.5
+Northern Europe consumed 376.8 billion kWh of electricity,
+up slightly from 375.7 billion kWh. It recorded net electricity
+exports to surrounding countries of about 14.6 billion kWh
+compared with about 10.1 billion kWh in the prior year.
+Business Report
+The Belgian capacity market consists of a strategic reserve of
+generating units and demand adjustments; 2015 marked the
+second year of its existence. The strategic reserve has not yet
+been utilized. With a number of nuclear power stations having
+come back online, it is highly unlikely that it will be.
+Central Eastern Europe
+The Czech Republic issued its regulations for power and gas
+prices for 2016-2018. The country's regulatory agency aims to
+promote cost efficiency and also to spur investment in net-
+works by providing operators with adequate and stable returns.
+As planned, Romania implemented a number of measures to
+further liberalize its energy market. In 2015 there was again a
+general trend in this region toward government-mandated
+price reductions.
+France
+France's capacity market is taking more precise shape. Starting
+in 2016/2017, utilities will be required to ensure that they
+have sufficient capacity certificates to meet their peak load
+obligations. As part of this process, all power plants in France
+will be certified by their network operator and all will partici-
+pate in the capacity market, which will be technology-neutral.
+Existing and new capacity will receive the same compensation,
+which will be set by a market-based mechanism, not by regu-
+lated tariffs. Consumers with flexible load can also participate
+in the capacity market, which gives it a demand-side compo-
+nent. Public consultations were conducted in the summer of
+2015 to determine how generating capacity located outside
+France will participate in the French capacity market. In Feb-
+ruary 2016 the European Commission opened an investigation
+to assess whether the introduction of a capacity market in
+France and the tender process for a new power station in
+Brittany are in line with EU state-aid rules. The commission
+believes that that capacity market and the tender process
+constitute state aid and therefore should have been submitted
+to it for prior review.
+23
+24
+Business Report
+Germany
+In 2015 the energy-policy debate in Germany again focused
+primarily on the implementation of the energy transition. Key
+topics of discussion included an auction scheme for renewables
+and solutions for stabilizing the reliability of the power supply,
+particularly with regard to conventional generating capacity.
+In 2015 the German federal government placed the review of
+nuclear-energy provisions on the energy-policy agenda. It not
+only put forward legislation establishing extended liability
+for the dismantling and waste-management costs for nuclear
+energy. It also commissioned a review of nuclear-energy pro-
+visions, which found that companies had correctly accounted
+for these provisions. In addition, it appointed a commission
+of experts to review the financing of Germany's phaseout of
+nuclear energy.
+In November 2015 the German federal cabinet approved draft
+legation, known as the Electricity Market Law, which had
+been proposed by the German Federal Minister for Economic
+Affairs and Energy. The draft legislation consists of a bundle
+of measure designed to further develop Germany's electricity
+market toward an "electricity market 2.0." These measures
+aim to enhance competitive price formation, provide incentives
+to make the entire electricity system more flexible, and further
+integrate Germany's measures into the European internal
+market. The purpose of a capacity reserve is to safeguard the
+electricity market in situations where there is insufficient
+supply on Germany's power exchange. On the same day in
+November the German government approved the Capacity
+Reserve Ordinance, known by its German acronym, KapResV.
+To continue to ensure that the network remains stable, the
+Electricity Market Law calls for the network reserve to be
+extended. Pending a review by network operators and the
+Federal Network Agency, this could lead to up to 2 GW of
+new-build projects for the network reserve starting in 2021/
+2022. KapResV calls for adjustments to the compensation
+mechanisms for the network reserve and for redispatch mea-
+sures (this is when network operators intervene in the opera-
+tion of power plants that are active in the marketplace). To
+help Germany reach its climate targets for 2020, the Electricity
+Market Law would establish a temporary ready reserve into
+which high-emission lignite-fired power plants will gradually
+be transferred. The legislative process for the Electricity
+Market Law and KapResV is expected to be completed before
+the summer of 2016.
+Italy
+As in France and the United Kingdom, it is becoming more
+apparent how the capacity market in Italy will work. The capacity
+mechanism will apply to existing and new generating capacity.
+However, the European Commission is conducting an investi-
+gation to assess whether Italy's capacity market is in line with
+EU state-aid rules. Consequently, it is unclear at this time
+when the first auction will take place.
+Russia
+Three coal-fired power plants were decommissioned under
+the Netherlands' National Energy Agreement, which was
+signed in 2013. A Dutch court ruled in 2015 that the country
+must reduce its carbon emissions faster and should aim to
+achieve a 25-percent reduction by 2020. The ruling intensified
+the policy debate about the future of coal-fired power plants,
+which led to the Dutch parliament passing a resolution before
+Christmas. The resolution calls on the Dutch government to
+present, by the end of 2016, a recommendation for a conditional
+plan for phasing out coal-fired power generation.
+Benelux
+Alongside supplementary REMIT requirements, a number of
+more stringent financial market regulations were discussed
+in 2015. Of particular importance for the energy industry are
+the implementation measures of the Market in Financial Instru-
+ments Directive ("MiFID II"). A not inconsiderable degree of
+uncertainty remains regarding several of the directive's defi-
+nitions and technical standards as well as the date it will take
+effect. Greater clarity is expected sometime in 2016.
+In late October 2014 the European Council approved the Frame-
+work for Climate and Energy Policies up to 2030. The frame-
+work sets a binding target of reducing GHG emissions by at
+least 40 percent by 2030 compared with 1990. It also sets non-
+binding targets of at least 27 percent for renewables' share
+of energy used and for the increase in energy efficiency. The
+EU agreed on rules for introducing a market stability reserve
+for the EU Emissions Trading Scheme in 2019. In July additional
+reforms to the scheme were proposed as part of the summer
+package of initiatives.
+2.4
+-5.0 -4.0-3.0 -2.0 -1.0 0
+1.0 2.0 3.0
+2.9
+3.1
+The Russian economy entered a recession in 2015. Declining
+oil prices, international sanctions, and capital flight led to
+declines in private investment and consumption. The situation
+was exacerbated by the dramatic weakening of Russia's cur-
+rency, adverse effects of which included boosting inflation.
+Sanctions and the economic crisis reduced Russia's imports
+by more than 20 percent.
+The growth rate of Turkey's GDP increased slightly, driven by
+the demand for consumption and investment goods. A further
+decline in the country's trade deficit was another positive factor.
+In 2015 the government of the Russian Federation introduced
+a number of important changes in the procedures for com-
+petitive capacity auctions in the power sector. Selected power
+plants will receive capacity payments for four years. Going
+forward, a variety of regulations issued by the Energy Ministry
+(such as the approval of the process for calculating recover-
+able costs and for the process for defining the average returns
+on long-term public obligations, which are used for calculating
+capacity prices) could have a positive impact on the prices for
+power generating capacity and thus on investments on the
+basis of the underlying contracts. In addition, the Supreme
+Eurasian Economic Council approved a plan for a common
+electricity market for the Eurasian Economic Union. The Russian
+Federal Tariff Service was abolished; its responsibilities were
+transferred to the Federal Antimonopoly Service.
+CEO Letter
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Energy Policy and Regulatory Environment
+International
+The 21st United Nations climate change conference took place
+in Paris, France, from November 30 to December 12, 2015. At
+the conference a new climate treaty, known as the Paris Agree-
+ment, was signed by all UN member states. Its core element
+is the commitment by all states to limit the average increase
+in global temperatures to under 2 degrees Celsius. One mecha-
+nism for achieving this aim is for countries to set national
+commitments for reducing greenhouse-gas gas ("GHG") emis-
+sions. Progress toward these commitments will be monitored.
+In addition, the agreement calls for a process to be put in
+place whereby national commitments will periodically be made
+more ambitious. Prior to the Paris conference, the International
+Energy Agency published its World Energy Outlook 2015. Among
+its predictions is that global energy consumption will continue
+to rise.
+Europe
+One key subject of the EU energy-policy debate in 2015 was
+the future direction of European energy and climate policy. In
+July 2015 the European Commission published a number of
+documents and legislative proposals whose purpose is to imple-
+ment the framework approved in October 2014 by the Euro-
+pean Council, which consists of the heads of state and govern-
+ment, in line with the commission's strategy to complete the
+internal energy market, establish a crisis-proof energy union,
+and promote climate protection.
+Report of the Supervisory Board
+2.4
+The ongoing political crisis between Ukraine and Russia and
+the sanctions the EU imposed against Russia in 2014 have not
+led to any adverse developments in Russia's energy-market
+regulations.
+The energy commission created by the Swedish government
+has begun its work, which at this stage largely involves gath-
+ering information. The purpose of the commission is to help
+the government reach a consensus on energy policy, paving
+the way for it to make policy decisions in January 2017. Sweden
+transposed the EU Water Framework Directive into national
+law in 2015. This could lead to minor limitations in the output
+of the country's hydroelectric stations.
+Natural gas
+Hard coal
+Lignite
+2015
+2014
+33.8
+34.3
+21.0
+20.4
+12.7
+12.9
+11.9
+11.9
+Nuclear
+7.5
+8.1
+Renewables
+Petroleum
+Primary Energy Consumption in
+Germany by Energy Source
+Percentages
+Renewables output in Germany rose by almost 11 percent
+to 57.3 MTCE. Biomass-fueled generation increased by about
+2 percent, whereas hydro generation (excluding pumped
+storage) was at the prior-year level. Wind generation (onshore
+and offshore) rose by 50 percent, solar generation (photovoltaic
+and solar thermal) by 6 percent.
+Germany's petroleum consumption was unchanged from the
+prior year. By contrast, its natural gas consumption rose by
+5 percent to 95.7 MTCE, primarily because of cooler weather in
+the first half of the year and the resulting use of more natural
+gas for space heating. Very mild weather in the fourth quarter
+reduced the overall increase substantially. Germany again
+used less natural gas (-7 percent) to generate electricity. Con-
+sumption of hard coal declined by 0.7 percent to 57.7 MTCE.
+Extremely low global coal prices led to only a slight decrease
+in the amount of hard coal used to generate electricity; about
+two thirds of the hard coal Germany consumes is for this pur-
+pose. Consumption of lignite, about 90 percent of which is
+used to generate power and heat, rose slightly to 54.1 MTCE.
+Lignite-fired generation of roughly 155 TWh was at the prior-
+year level. Nuclear production declined by about 6 percent
+owing to the decommissioning of Grafenrheinfeld nuclear
+power station at mid-year.
+Turkey
+In 2015 Turkey continued liberalizing its energy market. It
+also published a review of the regulatory environment of the
+downstream business. The review calls for a reduction in the
+thresholds for regulated tariffs for energy sales. At the start
+of 2015 the Turkish government published a national action
+plan for renewables. The plan aims for the proportion of final
+energy consumption met by renewables to increase to 30 per-
+cent by 2023. To get there, the government plans to continue
+renewables subsidies.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Sweden
+United Kingdom
+The U.K. Competition Market Authority is conducting an inves-
+tigation of the state of competition in the power and gas
+retail market. It is expected to issue its recommendations in
+the first quarter of 2016 at the earliest.
+USA
+There was more discussion in the United States about legis-
+lation that takes a long-term approach to climate protection.
+This legislation, known as the Clean Power Act, includes new
+regulations aimed at reducing the specific GHG emissions of
+power stations by 32 percent by 2030 relative to 2005. Existing
+federal policies to support renewables have made the United
+States a global leader in wind power. These policies include
+production tax credits ("PTCs") along with investment tax
+credits ("ITCS") for solar energy. In September the decision was
+made to extend PTCs and ITCs and make them degressive.
+In addition, many states have established programs that set
+mandatory targets for renewables in their power markets,
+which has resulted in trading in renewable energy certificates
+at a regional level.
+Energy Industry
+According to preliminary figures from AGEB, an energy-industry
+working group, Germany consumed 455 million metric tons
+of coal equivalent ("MTCE") in 2015, 1.3 percent more than in
+2014. Somewhat cooler weather than in the very mild prior
+year was the main factor. It resulted in greater demand for
+energy for space heating. Factoring out the cooler weather,
+energy consumption in 2015 would have declined by 1.5 to 2 per-
+cent. AGEB believes that Germany's energy-related carbon
+emissions for 2015 only increased slightly because the country
+met a considerable portion of the increase in consumption
+with renewables, did not consume more petroleum, and
+consumed less hard coal. Adjusted for temperatures, carbon
+emissions declined by about 2 percent year on year.
+The U.K. government is currently reforming the country's
+wholesale power market with the aim of improving the invest-
+ment climate for low-carbon technologies and ensuring supply
+security. The introduction of feed-in tariffs is intended to pro-
+vide greater certainty of revenues for new nuclear capacity,
+new renewables capacity, and carbon capture and storage.
+The introduction of a capacity market is intended to ensure
+supply security. The first two capacity auctions, for the 2018/
+2019 and 2019/2020 delivery years, were held in December 2014
+and December 2015, respectively. The contracts have different
+durations depending on whether they are for new plants,
+existing plants, refurbished plants, or demand-side response.
+2.0
+1.5
+1.5
+E.ON and Sungevity, a global solar energy provider and an
+E.ON strategic co-investment, joined forces to offer residential
+solar panel systems through a pilot project in Britain (Midlands
+and Northern England) and Germany (Berlin)
+Pilot sales began in the United Kingdom for E.ON Touch, a
+smart thermostat. E.ON Touch enables residential customers
+to control their heating and hot water remotely through a
+smart phone app. They also benefit from regular reports about
+their energy use and personalized tips for managing house-
+hold energy more efficiently. Developed in collaboration with
+U.S.-based Green Wave Systems, the product includes a room
+sensor that allows customers to see and control room temper-
+ature, a relay switch to control the boiler, and a wireless gate-
+way that connects the sensor and the switch.
+Renewables
+Investigations into the effects of adding vortex generators to
+wind turbine blades are providing valuable data on their
+potential to improve energy yield. Vortex generators are plastic
+vanes that can be glued on to turbine blades to reduce flow
+separation as the wind flows around the blade surface. This
+improves aerodynamics and can increase the turbine's energy
+performance, especially on older, more worn blades. Trials at
+E.ON's Roscoe wind farm in Texas marked the first time that
+vortex generators have been evaluated in-house. Their impact
+on performance was measured over three months, and results
+show that they could increase annual energy production by
+an average of 2 percent. That would deliver increased income
+worth millions of dollars over the lifetime of E.ON's wind assets
+at Roscoe and Inadale in the United States. A second phase is
+planned to start at Stags Holt in the summer of 2016. This test
+will also focus on assessing the effects of increased load on
+the turbine.
+Distribution Networks
+The SmartSim method simulates gas flows in the pipeline
+system and thus precisely monitors the quality of different
+sources, including natural gas, biomethane, as well as hydro-
+gen from power-to-gas plants. It makes it possible to accu-
+rately track the gas's energy quality (calorific value) so that
+customers are billed fairly. It also makes it unnecessary to
+add propane to adjust the calorific value of biomethane, which
+could save E.ON's gas networks several million euros each
+year. Successful tests were conducted in mid-2015 in a pipeline
+system in Lower Saxony operated by Avacon, an E.ON subsidiary.
+Other pilot projects are under way in Germany and Sweden.
+Digitalization
+We worked with grid experts and data specialists in Germany
+to analyze a variety of historical information (operational,
+outage, and weather data, including lightning strikes). By using
+machine learning techniques and visualizing the results on-
+screen, the team provided a clearer view of the condition of
+grid assets. The solution will enhance existing techniques,
+which often involve field inspections by engineers whose
+assessments cannot integrate past usage and damage data
+on a per asset basis. It will help optimize maintenance and
+replacement and also improve service quality.
+Energy Storage
+Construction of the modular multimegawatt, multitechnology
+medium-voltage battery storage system ("M5BAT"), the world's
+first utility-scale modular battery store system, began on the
+campus of RWTH Aachen University in Germany. Such systems,
+which help ensure grid stability, will play a pivotal role in the
+expansion of renewables. They also have many other applica-
+tions. M5BAT, whose modular design optimally combines a
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Sample Projects from 2015
+Customer Solutions
+20 Corporate Profile
+In 2015 our investments included U.S-based Space-Time Insight,
+which develops real-time visual analytics applications;
+Thermondo, a Berlin-based start-up and a pioneer in the digi-
+talization of skilled crafts and trades (we made an initial
+investment in Thermondo in September 2014 and monitored
+the company's positive performance); U.S.-based Enervee,
+which provides a dynamic platform on which consumers can
+make more energy-efficient choices when it comes to house-
+hold appliances, devices, and electronics; Organic Response of
+Australia, which develops innovative smart lighting controls
+for commercial and public buildings; U.S.-based Greensmith,
+which is one of the largest providers of energy-storage soft-
+ware and aims to make energy storage a fundamental part of
+a cleaner, more intelligent, and distributed energy infrastructure.
+We support our effort to develop customer-centric and innova-
+tive technologies and business models by identifying promising
+energy technologies of the future that will enhance our palette
+of offerings for our millions of customers around Europe and
+will make us a pacesetter in the operation of smart energy
+systems. We select new businesses that offer the best oppor-
+tunities for partnerships, commercialization, and equity
+investments. Our investments focus on strategic technologies
+and business models that enhance our ability to lead the
+move to distributed, sustainable, and innovative energy offer-
+ings. These arrangements benefit new technology companies
+and E.ON, since we gain access to their innovations and have
+a share in the value growth.
+26
+25
+Source: AGEB.
+100.0
+100.0
+0.9
+0.5
+variety of battery technologies, has a capacity of 5 MW. The
+project is backed by a €6.7 million grant from the German Fed-
+eral Ministry for Economic Affairs and Energy's Energy Storage
+Funding Initiative. Our partners in the project include the E.ON
+Energy Research Center and the Institute of Power Systems
+and Power Economics at RWTH Aachen University, battery
+manufacturer Exide Technologies GmbH's GNB Industrial Power
+division, and inverter manufacturer SMA Solar Technology.
+•
+Renewables generation: increase the cost-effectiveness
+of existing wind, solar, and hydro assets and study new
+renewables technologies
+Infrastructure and distribution: develop energy-storage
+and energy-distribution solutions for an increasingly
+decentralized and volatile generation system
+Energy intelligence and energy systems: study potentially
+fundamental changes to energy systems and the role of
+data in the new energy world
+Conventional generation: improve our existing generation
+fleet and optimize future investments
+Incubator: conduct trials of cutting-edge, typically pre-
+market products under real-life conditions with a small
+group of customers.
+Strategic Co-Investments
+Retail and end-customer solutions: develop new business
+models for distributed-energy supply, energy efficiency,
+and mobility
+Power Generation
+E.ON Sverige and research partner Chalmers University of Tech-
+nology in Gothenburg garnered widespread media coverage
+after announcing that lab experiments had shown that ilmenite,
+a natural mineral, could improve the efficiency of fluidized
+bed combustion. Ilmenite outperforms the standard bed mate-
+rial, silica sand, in fluidized bed boilers that burn biomass or
+waste. This is because ilmenite actively distributes oxygen in
+the furnace, thereby increasing efficiency and reducing carbon
+monoxide emissions. The process, for which patents are pending,
+is likely to deliver operational improvements at E.ON power
+plants in Sweden and the United Kingdom and could also be
+marketed to other power generators around the world. It has
+the potential to significantly improve the efficiency of gener-
+ating energy from biomass, waste, and other residual fuels.
+Other (including net power imports/exports)
+Total
+France
+1.1
+0.8
+Italy
+Euro zone
+Sweden
+United
+Germany
+Kingdom
+OECD
+Brazil
+Russian
+Federation
+Turkey
+Source: OECD, 2015
+-4.0
+-3.1
+USA
+Electricity consumption in England, Scotland, and Wales declined
+by 3 percent to roughly 282 billion kWh. Gas consumption
+(excluding power stations) increased by 4 percent to 527 bil-
+lion kWh owing to a variety of factors, such as the weather
+and the economic recovery.
+2015 GDP Growth in Real Terms
+Annual change in percent
+economy grew at a rate similar to Germany's, also thanks to
+robust domestic demand, which benefited from the recovery
+of the housing market and a reduction in the income tax.
+economic performance. The work is expected to deliver com-
+petitive advantages in Germany, in Sweden, and at new assets
+outside Europe. Know-how gained from the project could
+benefit potential projects in Russia, Turkey, and Southeast Asia.
+Incubator
+Power-to-heat ("P2H") technology consisting of an electric boiler
+and a CHP unit has been prepared for installation at a public
+swimming pool operated by Stadtwerke Furth im Wald in
+southeast Germany. The 250 kW P2H unit, which will produce
+hot water for the pool and heat for the building, will be oper-
+ated and monitored by Bayernwerk Natur, an E.ON subsidiary.
+It will also be integrated into an E.ON virtual power plant
+operated by E.ON Connecting Energies, which offers integrated
+energy solutions and energy-efficiency services to commercial,
+industrial, and public-sector customers. P2H is part of E.ON's
+effort to tap the balancing-energy market when surplus power
+is available from renewables and other sources. P2H offers
+customers several advantages: it enables them to turn balancing
+energy into heat, generate additional revenue, and consume
+less fossil fuel.
+University Support
+Our T&l activities include partnering with universities and
+research institutes to conduct research projects in a variety
+of areas. Our flagship partnership is with the E.ON Energy
+Research Center at RWTH Aachen University in Germany.
+21
+22
+The Swedish economy continued its positive growth trend. It
+too was supported by robust consumption demand, which was
+driven by rising wages and lower interest rates. The only poten-
+tial problem is an overheated housing market. Domestic
+demand drove economic growth in the United Kingdom as well.
+Business Report
+Macroeconomic Environment
+In 2015 the performance of the global economy reflected the
+unexpectedly weak growth of global trade. According to
+OECD estimates, global trade expanded by 2 percent, which
+is well below the long-term average of 5.6 percent for the
+period 2003-2012. In the past five decades, global trade growth
+of around 2 percent has occurred in just five other years.
+Reflecting this weakness, global gross domestic product ("GDP")
+grew in real terms by 2.9 percent, less than the prior-year figure
+of 3.3 percent. It also lagged just over 1 percentage point behind
+the long-term average growth rate for the period 1995-2007,
+which led up to the financial crisis. The OECD attributes this to
+weak economic development in emerging market economies.
+The U.S. economy continued on a stable growth path supported
+by private consumption and private investment, which were
+bolstered by a labor market almost at full employment. China's
+economic growth rate declined further in 2015, which the OECD
+ascribes to the fact that the country's growth drivers have
+shifted from investment to consumption and services. This
+change in the components of growth resulted in a reduction
+in China's imports, which helped weaken global trade.
+The euro zone's economy benefited from continued loose mone-
+tary policy, almost neutral fiscal policies, and low oil prices.
+Driven by private consumption, domestic demand increased
+at a faster rate. The rate of investment growth increased for
+the fourth year in a row and, at 2.1 percent, reached its highest
+level since the start of the crisis in 2007.
+Thanks to robust domestic demand, Germany's GDP growth
+was barely dampened by the weak global economic environ-
+ment. Demand was supported by a solid labor market and
+favorable monetary policies.
+Among the crisis countries of Southern Europe, Spain and
+Portugal continued their economic recovery, whereas Italy's
+growth remained tepid. Economic expansion in Germany's
+neighbors to the East was predominantly robust. For example,
+the Czech Republic's GDP expanded by 4.3 percent, Hungary's
+by 3 percent.
+France's rather modest GDP growth of 1.1 percent was never-
+theless its best performance in four years. Despite structural
+problems, France's economy was ultimately buoyed by the
+overall economic environment in the euro zone. The Dutch
+Macroeconomic and Industry Environment
+Sustainability assessments conducted by the International
+Hydropower Association ("IHA") rated two E.ON hydroelectric
+stations, Walchensee in Germany and Semla in Sweden, above
+average, making E.ON the first energy company in Europe to
+achieve this rating at two of its assets. A project to adopt the
+IHA sustainability protocol has put E.ON at the forefront of
+a process that measures assets' environmental, social, and
+(64,105)
+33
+Global Commodities 1,273.8.
+2015
+714.8
+Additional information in Tables and Explanations on page 220 et seq.
+2014
+31
+32
+Business Report
+Business Performance in 2015
+E.ON's year-end numbers were in line with our expectations
+and continued to reflect the difficult situation on energy
+markets and in conventional power generation.
+Our sales of €116.2 billion were 3 percent above the prior-year
+figure of €113.1 billion. Our EBITDA declined by 10 percent year
+on year to €7.6 billion. Underlying net income of €1.6 billion
+was at the prior-year level. Both results are in line with our
+earnings guidance of €7 to €7.6 billion and €1.4 to €1.8 billion,
+respectively. The net loss attributable to shareholders of E.ON SE
+of -€7 billion (prior year: -€3.2 billion) was significantly higher.
+Our investments of €4.2 billion were 10 percent below the
+prior-year figure of €4.6 billion but roughly in line with the
+€4.3 billion foreseen for 2015 in our medium-term plan.
+Despite the earnings decline, our operating cash flow of
+€6.1 billion was only slightly below the prior-year level.
+Relative to year-end 2014, at year-end 2015 our economic net
+debt declined to €27.7 billion, in particular because of our
+high operating cash flow, the proceeds from divestments,
+and lower provisions for pensions. Our debt factor declined
+to 3.7 (prior year: 4).
+E.ON 2.0
+To enhance our performance, in the summer of 2011 we
+launched a Group-wide restructuring and cost-cutting program
+called E.ON 2.0. Its objective was to achieve roughly €2 billion
+(adjusted for changes to our portfolio: roughly €1.9 billion) in
+lasting reductions to our controllable costs. The program,
+which ended as planned at year-end 2015, ultimately reduced
+our annual controllable costs by a total of almost €2.3 billion,
+thereby significantly surpassing our original objective.
+The Working Capital Excellence project also surpassed its
+objective of reducing our working capital by €1 billion. We
+have already achieved cash-effective reductions of about
+€1.7 billion and therefore concluded the project-ahead of
+schedule-at year-end 2015.
+Report of the Supervisory Board
+CEO Letter
+in 2015 (prior year: €2,630 million).
+Disposals resulted in cash-effective items totaling €4,513 million
+our remaining stake E.ON Energy from Waste.
+our generation operations in Italy
+235.8
+the network connection for Humber Gateway wind farms
+our operations in Spain
+our exploration and production business in the North Sea
+our stake in Enovos International
+•
+To implement our divestment strategy, through year-end 2015
+we classified as disposal groups, classified as assets held for
+sale, or sold the following activities:
+Disposal Groups, Assets Held for Sale, and Discon-
+tinued Operations
+We executed the following significant transactions in 2015.
+Note 4 to the Consolidated Financial Statements contains
+detailed information about them.
+Acquisitions, Disposals, and Discontinued Operations
+in 2015
+our stake in Latvijas Gāze
+E.ON Stock
+Wholesale market/
+224.8
+1,885.4
++3
+Total (million barrels of
+oil equivalent)
+23.7
+22.4
++6
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Gas sales to residential and SME customers increased by
+5.9 billion kWh. Colder weather relative to the prior year was
+the main factor at nearly all of our regional units. Another
+factor was that we added customers in Hungary and France.
+Gas sales declined in Czechia, chiefly because of the decon-
+solidation of a majority-held share investment in the first quar-
+ter of 2014.
+The main reason for the increase in Exploration & Production's
+oil/condensates production in the North Sea was that Njord/
+Hyme field came back on stream. The increase also reflects
+higher production at Elgin/Franklin and Huntingdon fields. By
+contrast, production declined at Skarv and Merganser fields.
+The increase in our gas production primarily reflects higher
+output at Njord/Hyme and Elgin/Franklin fields, which was
+partially mitigated by lower output at Rita, Johnston, and
+Babbage fields.
+In addition to our North Sea production, we had 5,920 million
+cubic meters of production from Yuzhno Russkoye gas field in
+Siberia, which is accounted for using the equity method. This
+was roughly at the prior-year level of 5,923 million cubic meters.
+Gas Sales
+The E.ON Group's gas sales declined by 550.8 billion kWh, or
+47 percent.
+99.6
+117.7
+Sales partners
+I&C
+105.5
+Residential and SME
+120.8
+1,171.0
+Total
+Billion kWh
+Gas Sales
+Gas sales in the trading business rose by 559 billion kWh
+because of a considerable increase in sales volume on the
+wholesale market.
+Gas sales to sales partners declined by 11 billion kWh owing
+mainly to lower sales volume at Global Commodities.
+Gas sales to I&C customers declined by 3.1 billion kWh, in
+particular because of competition-driven customer losses
+at Germany.
+1,721.8
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+The table below shows the sales, EBITDA, investments, and
+employee numbers of the Spain regional unit. In view of our
+plan to divest this unit, a process that was completed in the
+first quarter of 2015, we reclassified it as a discontinued oper-
+ation. Its results are therefore included in net income as income
+from discontinued operations (see the table on page 39):
+Non-EU Countries
+1,123
+1,518
+-26
+Group Management/
+Consolidation
+Total
+-24,364 -26,305
+116,218 113,095
++3
+34
+Business Report
+Other Line Items from the Consolidated Statements
+of Income
+Own work capitalized of €478 million was 38 percent above
+the prior-year figure of €345 million. The increase is predomi-
+nantly attributable to own work capitalized in conjunction
+with IT projects.
+Other operating income rose by 20 percent, from €10,980 mil-
+lion to €13,211 million, mainly because of higher income from
+currency-translation effects of €3,300 million (prior year:
+€2,437 million) and from derivative financial instruments, which
+rose by €629 million to €6,840 million (€6,210 million); the
+latter mainly reflects the fact that income from the marking to
+market of commodity derivatives increased by €656 million
+to €6,506 million (€5,850 million). Corresponding amounts
+resulting from currency-translation effects and from derivative
+financial instruments are recorded under other operating
+expenses. Other operating income was also higher due to costs
+that were incurred at units 1 and 2 at Oskarshamn nuclear
+power station and that were passed on to the other co-owners.
+Costs of materials rose by 4 percent, from €99,916 million to
+€104,211 million, primarily because of an increase in gas pro-
+curement costs at Global Commodities.
+Personnel costs increased by €30 million to €4,177 million
+(prior year: €4,147 million), mainly because higher expenditures
+on company retirement programs were only partially offset
+by lower expenditures on restructuring programs and the
+savings delivered by these programs.
+Depreciation charges rose by €3,171 million, from €8,723 million
+to €11,894 million, in particular because of impairment charges
+on goodwill at Generation and Exploration & Production and,
+to a lesser degree, impairment charges on property, plant, and
+equipment and intangible assets in these two segments. These
+charges were partially offset by the absence of scheduled
+depreciation charges on operations in Spain, Italy, and Norway
+that have been sold. In addition, impairment charges recorded
+in 2014 and the decommissioning of power plants reduced
+scheduled depreciation charges in 2015.
+the decommissioning of generating capacity in Germany,
+the disposal of operations in Italy and Spain, and lower
+wholesale prices across our power business
+These positive effects were more than offset by:
+a weather-driven increase in sales volume and favorable
+market developments at the Germany regional unit
+higher earnings at Global Commodities.
+•
+•
+Our 2015 EBITDA was down by about €0.8 billion year on year.
+The principal positive factors were:
++1
+EBITDA
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Income from companies accounted for under the equity
+method increased by €562 million, from -€264 million to
+€298 million, mainly because of an impairment charge
+recorded on a share investment Non-EU Countries in 2014.
+Other operating expenses increased by 19 percent to €14,137 mil-
+lion (prior year: €11,912 million), mainly because of higher
+expenditures relating to derivative financial instruments, which
+rose by €750 million to €6,055 million (€5,305 million), owing
+in particular to higher expenditures from the marking to market
+of commodity derivatives. Expenditures relating to exchange-
+rate differences were also higher, rising by €650 million to
+€3,587 million (€2,937 million).
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+-18
+1,731 2,118
+19,337 19,169
+20,506 20,587
+Other EU Countries
+This reflects an increase in sales at Global Commodities
+resulting mainly from considerably higher gas sales volume,
+which more than offset lower gas prices. The increase in gas
+sales volume, particularly in the second and third quarters, is
+principally attributable to an increase in physical transactions
+resulting from the exercise of options. This followed intense
+trading activity in the first quarter in an atmosphere of con-
+siderable price volatility. In addition, Germany and Renewables
+recorded slightly higher sales. Sales declined in particular at
+Generation and Exploration & Production. At Generation the
+decline was due to the further drop in the market prices for
+electricity but principally to a volume-driven decline in sales
+volume in Germany that was chiefly attributable to the decom-
+missioning of generating capacity in Germany and the sale of
+our conventional generation business in Italy and Spain. At
+Exploration & Production the decline was due to lower prices
+for oil from our fields in the North Sea and to adverse currency-
+translation effects.
+572
+63
+2014
+1,166
+146
+355
+34
+5
+2015
+Transfer Price System
+Spain
+Employees
+Investments
+EBITDA
+Sales
+€ in millions
+Discontinued Operations
+Earnings Situation
+1,948.5
+Deliveries from our generation units to Global Commodities
+are settled according to a market-based transfer price system.
+Generally, our internal transfer prices are derived from the
+forward prices that are current in the marketplace up to three
+years prior to delivery. The resulting transfer prices for power
+deliveries in 2015 reflect the development of market prices
+and were therefore lower than the prices for deliveries in 2014.
+Our 2015 sales of €116.2 billion were about €3.1 billion above
+the prior-year level.
+Germany
+Exploration & Production
++5
+87,862 83,326
+Global Commodities
++4
+Sales
+-27
+2014
+10,285
+2,397
+2015
+7,537
+2,486
+Renewables
+Generation
+€ in millions
+Sales
++/-%
+cubic meters)
+Gas (million standard
++8
+Natural gas
+18,736
+2,488
+Oil
+2,819
+3,600
+Hydro
+4,848
+4,031
+Wind
+3,822
+Other
+379
+1,154
+25,632
+0 5,000 10,000 15,000 20,000 25,000
+Additional information in Tables and Explanations on page 220 et seq.
+Generation's owned generation decreased by 19.2 billion kWh,
+from 125.5 to 106.3 billion kWh. The decline resulted in partic-
+ular from the sale of generation operations in Italy and Spain,
+the reduced dispatch of coal-fired assets in England and
+Germany due to the current market situation, and the decom-
+missioning of certain coal-fired assets and Grafenrheinfeld
+nuclear power station in Germany.
+Russia's owned generation decreased by 9 percent, from
+59.2 to 53.8 billion kWh. There were two main factors. First,
+whereas the commissioning of new units led to the addition of
+a considerable amount of new capacity to the marketplace,
+the demand for power did not change. Second, we conducted
+maintenance work on generating units at Surgut and Berezov
+power stations.
+Hard coal
+37.0
+12.1
+Lignite
+12.1
+Nuclear
+11,189
+49.7
+55.4
+Billion kWh
+Owned Generation by Energy Source
+Renewables' owned generation declined by 1.2 billion kWh,
+from 26.5 to 25.3 billion kWh, primarily because of the divest-
+ment of operations at Wind/Solar/Other as part of our build-
+and-sell strategy.
+Business Report
+30
+29
+■ Germany 2015 - Outside Germany 2015
+Germany 2014 - Outside Germany 2014
+7,718
+Hard coal
+2,429
+Total
+Power Procurement
+Billion kWh
+The E.ON Group's owned generation declined by 26.7 billion kWh,
+or 12 percent, year on year. The reduction occurred mainly at
+Generation and Russia. Owned generation declined at Renew-
+ables by 1.2 billion kWh to 25.3 billion kWh and at Other EU
+Countries by 0.9 billion kWh to 2.6 billion kWh. Power procured
+increased by 26.1 billion kWh, or 4 percent, to 607.3 billion kWh.
+Power Procurement
+Germany 2015 ■ Outside Germany 2015
+Germany 2014 -Outside Germany 2014
+MW
+795.8
+Fully Consolidated Generating Capacity
+Our attributable generating capacity declined by 13,536 MW,
+in particular because of reductions in the following fuel types:
+gas, hard coal, nuclear, and hydro. Our attributable gas-fired
+capacity declined by 6,851 MW owing mainly to the sale of
+generation operations in Italy and Spain and the closure of a
+generating unit in the United Kingdom. The decline of 3,369 MW
+in hard coal reflects, in particular, the scheduled decommis-
+sioning of several generating units in Germany and the sale
+of generation operations in Italy and Spain. The decline of
+1,570 MW in nuclear capacity reflects the decommissioning
+of Grafenrheinfeld nuclear power station in Germany and
+unit 2 at Oskarshamn nuclear power station in Sweden. The
+sale of generation operations in Italy and Spain reduced our
+attributable hydroelectric capacity by 1,246 MW.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Our fully consolidated generating capacity declined by
+13,672 MW for the reasons just described. Broken down by fuel
+type, it declined by 6,896 MW for gas, 3,471 MW for hard coal,
+1,913 MW for nuclear, and 1,248 MW for hydro.
+47.4
+796.4
+188.5
+Lignite
+3,183
+6,344
+8,257
+Nuclear
+2014
+Additional information in Tables and Explanations on page 220 et seq.
+Owned generation
+2015
+595.0
+Global Commodities/
+outside sources
+15.0
+12.3
+Jointly owned
+power plants
+215.2
+566.2
+lower oil prices on the output of our fields in the North Sea.
+63.6
+Natural gas,
+64.6
+Carbon allowances (million metric tons)
+211
+458
+I&C
+Sales partners
+92.8
+94.8
+Oil (million metric tons)
+49
+87.7
+98.9
+Coal (million metric tons)
+250
+188
+Wholesale market/
+Global Commodities
+10.6
+11.5
+barrels)
+Oil/condensates (million
++/-%
+2014
+1,794
+2015
+The table above shows our entire trading volume from 2015,
+including volume for delivery in future periods.
+2014
+Additional information in Tables and Explanations on page 220 et seq.
+2015
+521.9
+536.3
+Upstream Production
+2,565
+Gas (billion kWh)
+64.1
+Power Sales
+The E.ON Group's consolidated power sales were at the prior-
+year level.
+Power Sales
+30 40 50 60 70
+Additional information in Tables and Explanations on page 220 et seq.
+0 10 20
+0.8
+2.9
+Billion kWh
+Other
+Wind
+10.7
+14.2
+Hydro
+14.6
+oil
+12.1
+71.1
+The 0.5 billion kWh decline in power sales to residential and
+small and medium enterprise ("SME") customers reflects lower
+sales volume at Germany due to a decline in average consump-
+tion resulting from customers' enhanced energy-efficiency
+measures and at Other EU Countries due to enhanced energy-
+efficiency measures and effects relating to solar production
+in the United Kingdom.
+Power sales to sales partners decreased by 11.2 billion kWh, in
+particular because of declines at Global Commodities, Gener-
+ation, and Renewables. The reasons were lower sales volume
+to internal and external sales partners in the trading business,
+lower production at coal-fired assets and the decommissioning
+of a nuclear asset in Germany, and lower output at Wind/
+Solar/Other following disposals.
+Residential and SME
+1,695
+1,946
+Power (billion kWh)
+2014
+2015
+Power sales to industrial and commercial ("I&C") customers
+were 2 billion kWh lower, principally because of keener com-
+petition and lower average individual offtake in the United
+Kingdom and competition-driven customer losses in Germany.
+Trading Volume
+780.9
+Total
+To execute its procurement and sales mission for the E.ON
+Group, Global Commodities traded the following financial and
+physical quantities with non-Group entities:
+The Global Commodities unit procured about 1,976 billion kWh
+of natural gas from producers in and outside Germany in 2015.
+Gas Procurement, Trading Volume, and Gas
+Production
+Sales volume in the trading business was 14.4 billion kWh
+above the prior-year level, principally due to an increase in
+Global Commodities' trading activities.
+780.2
+E.ON generates a significant portion of its EBITDA in very stable
+business areas. The overall share of regulated as well as quasi-
+regulated and long-term contracted operations amounted to
+63 percent of EBITDA in 2015.
+.
+€ in millions
+2014
+2015
+2014
+Distribution Networks
+Non-regulated/Other
+Total
+2,157
+1,686 1,525
+471
+236
+1,761
+1,129
+953
+408
+146
+1,537
+1,099
+¹Adjusted for extraordinary effects.
+EBITDA at Distribution Networks rose by €161 million and at
+Non-regulated/Other by about €235 million, mainly because
+of positive nonrecurring effects relating in part to the release
+of provisions. Lower temperatures relative to 2014 and our
+systematic customer orientation in the sales business were
+also positive factors.
+37
+384
+UK
+2014
+2015
+2014
+2015
+2015
+€ in millions
+EBITDA¹
+Other EU Countries
+Other EU Countries' EBITDA was €19 million, or 1 percent, below
+the prior-year figure.
+Other EU Countries
+Business Report
+38
+EBIT¹
+€ in millions
+EBIT¹
+EBITDA1
+Infrastructure/Other
+-151
+-63
+-60
+45
+Power and Gas
+149
+29
+29
+29
+Coal/Oil/Freight/LNG
+2014
+2015
+EBITDA¹
+29
+384
+137
+132
+Infrastructure/Other's EBITDA was €12 million above the
+prior-year level.
+Power and Gas's EBITDA rose by €105 million, mainly because
+of the performance of the gas business, where positive earn-
+ings effects resulting from optimization were only partially
+offset by narrower margins resulting from a smaller spread
+between seasonal prices and lower prices in the midstream
+gas business.
+Despite a difficult market environment, Coal/Oil/Freight/LNG's
+EBITDA was at the prior-year level.
+Germany
+¹Adjusted for extraordinary effects.
+EBITDA at the Germany regional unit increased by €396 million.
+143
+Germany
+Exploration & Production
+10
+109
+106
+223
+Total
+EBITDA at Exploration & Production declined by 21 percent,
+from €1,136 million to €895 million, principally because of
+lower prices for oil from our North Sea fields and adverse
+currency-translation effects. EBIT was €389 million (prior
+year: €498 million).
+2015
+278
+(278)
+(24,570)
+(RUB in millions)
+371
+266
+517
+361
+Russia
+2014
+2015
+2014
+2015
+€ in millions
+EBIT1
+EBITDA1
+Non-EU Countries
+Non-EU Countries' EBITDA declined by 27 percent, or €117 million.
+Non-EU Countries
+200
+(61,692)
+Remaining regional units
+297
+Total
+1,756
+279
+1,775
+(26,361)
+102
+(31,590)
+204
+1,119
+¹Adjusted for extraordinary effects.
+EBITDA at the UK regional unit was at the prior-year level. Posi-
+tive currency-translation effects and lower costs in conjunction
+with government-mandated energy-efficiency measures were
+offset by narrower margins, lower sales volume, and keen
+competition in the marketplace.
+The Sweden regional unit's EBITDA was €33 million lower,
+primarily because of €16 million in adverse currency-translation
+effects, storm-related costs, lower network connection fees,
+outages at a gas turbine, and the absence of earnings streams
+from the heat activities sold in June 2014. Increases in network
+tariffs and electricity passthrough in the power distribution
+network had a positive impact on earnings.
+EBITDA in Czechia was €11 million below the prior-year level.
+Positive effects from higher sales volume, improved market
+conditions, and the sale of a heat production plant were
+more than offset by the absence of earnings streams from a
+majority stake in a gas company that was sold in the first
+quarter of 2014.
+The Hungary regional unit's EBITDA rose by €7 million and
+was recorded mainly at its distributed network business. The
+increase is attributable, in particular, to the sale of the heat
+business, and improved receivables management. These posi-
+tive effects were partially counteracted by narrower margins.
+EBITDA at the remaining regional units rose by €18 million,
+mainly because of higher earnings in Romania, the Nether-
+lands, and France as well as at E.ON Connecting Energies.
+Earnings in Romania benefited from a weather-driven increase
+in gas sales volume and from the positive effect of tariff
+increases in the gas distribution business instituted in 2014.
+Earnings in the Netherlands rose on the positive performance
+of the heat business. Earnings in France were higher primarily
+because of wider margins in the power and gas business and
+lower fixed costs. The increase in E.ON Connecting Energies'
+earnings reflects, in particular, positive operating effects in its
+industrial cogeneration business. Its earnings also benefited
+from the consolidation of a company that generates power and
+heat for a business park in Russia and expansion in the busi-
+ness of providing energy-efficiency solutions to industrial and
+commercial customers in Germany.
+101
+(31,125)
+192
+1,166
+(18,085)
+(18,936)
+Other Non-EU Countries
+279
+Czechia
+377
+(3,429)
+(3,231)
+(5,663)
+(5,509)
+(CZK in millions)
+(SEK in millions)
+622
+589
+Sweden
+299
+(241)
+(201)
+(310)
+345
+(£ in millions)
+(7,623)
+190
+(5,193)
+-39
+-78
+-40
+-78
+322
+439
+290
+(7,972)
+226
+Total
+¹Adjusted for extraordinary effects.
+Russia's EBITDA was 30 percent below the prior-year level.
+The principal reasons were adverse currency-translation
+effects, fines in conjunction with the delayed commissioning
+of a generating unit at Berezov power station, and costs
+incurred due to accident-related outages of generating units at
+Surgut power station. In local currency, EBITDA only declined
+by 7 percent.
+207
+Hungary
+197
+(5,431)
+293
+€ in millions
+2014
+EBITDA1
+895
+1,136
+Germany
+2,157
+1,761
+-34
+-10
++110
+-21
++22
+Other EU Countries
+1,756
+1,775
+-1
+Non-EU Countries
+322
+439
+-27
+Group Management/
+Consolidation
+-614
+Group Management/Consolidation
+EBIT¹
+36
+35
+Our merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+Our quasi-regulated and long-term contracted business con-
+sists of operations in which earnings have a high degree of
+predictability because key determinants (price and/or volume)
+are largely set by law or by individual contractual arrange-
+ments for the medium to long term. Examples of such legal or
+contractual arrangements include incentive mechanisms for
+renewables and the sale of contracted generating capacity.
+Exploration & Production
+Our regulated business consists of operations in which revenues
+are largely set by law and based on costs. The earnings on
+these revenues are therefore extremely stable and predictable.
+¹Adjusted for extraordinary effects.
+-10
+8,376
+7,557
+Total
+-556
+In view of the sale of our Spain regional unit, we applied
+IFRS 5 and reclassified this unit as a discontinued operation
+from the fourth quarter of 2014 until its derecognition.
+106
+223
+Global Commodities
+2,828
+Merchant business
++12
+1,596
+1,782
+contracted business
+3,922
+Quasi-regulated and long-term
+2,858
+2,947
+Regulated business
++/-%
+2014
+2015
++3
+The figures shown here are from E.ON SE, the equity interests it
+manages directly, and the offsetting of transactions between
+segments. The change in EBITDA relative to the prior year prin-
+cipally reflects E.ON SE's current earnings, in particular an
+increase in provisions resulting from changes in interest rates.
+This was partially counteracted by consolidation effects in
+conjunction with the valuation of provisions relating to emission
+allowances.
+-28
+7,557
+1,500
+1,346
+Renewables
+2,215
+1,472
+Generation
+Total
++1-%
+2015
+€ in millions
+EBITDA¹
+¹Adjusted for extraordinary effects.
+-10
+8,376
+2014
+Generation
+Business Report
+operations in Spain and Italy. Another reason for lower earnings
+in Germany was that the transmission system operator dis-
+patched the gas-fired units at Irsching power station less
+frequently. By contrast, the earnings of our biomass business
+were higher, in particular because of the positive performance
+of our biomass-fired assets in the United Kingdom. In 2014 an
+incident at Ironbridge power station led to the decommis-
+sioning of unit 1 and a temporary production stop at unit 2.
+In addition, Blackburn Meadows power station entered service
+in 2015.
+29
+Generation's EBITDA decreased by €743 million.
+Wind/Solar/Other
+780
+823
+415
+493
+Total
+1,472
+2,215
+745
+1,201
+Total
+1,346
+1,500
+924
+1,044
+Global Commodities
+Global Commodities' EBITDA rose by €117 million.
+Global Commodities
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+-10
+Report of the Supervisory Board
+Wind/Solar/Other's EBITDA fell by €43 million, or 5 percent,
+owing to divestments and high earnings resulting from our
+build-and-sell strategy in 2014. Amrumbank West and Humber
+Gateway wind farms, which entered service in 2015, had a
+significant positive impact on earnings.
+EBITDA at Hydro declined by €111 million, or 16 percent,
+primarily because of lower wholesale prices and the sale of
+operations in Spain and Italy.
+Fossil's EBITDA declined by €325 million, primarily because of
+the decommissioning of certain generating units in Germany
+and, to a lesser degree, the sale of fossil-fueled generation
+Nuclear's EBITDA fell by €409 million, principally owing to the
+decommissioning of Grafenrheinfeld nuclear power station
+in Germany and production outages in Sweden. Lower power
+prices constituted another negative factor. These negative
+factors were partially offset by the absence of adverse one-
+off effects recorded in 2014 and by positive one-off effects
+recorded in 2015.
+¹Adjusted for extraordinary effects.
+¹Adjusted for extraordinary effects.
+CEO Letter
+-19
+-13
+551
+Nuclear
+Other/Consolidation
+EBITDA1
+2014
+2015
+2014
+1,002
+2015
+Renewables
+EBIT¹
+EBITDA¹
+Generation
+Renewables' EBITDA declined by €154 million, or 10 percent.
+Renewables
+€ in millions
+1,411
+EBIT1
+1,085
+509
+677
+566
+670
+129
+46
+814
+Hydro
+Fossil
+2014
+2015
+2014
+2015
+€ in millions
+489
+(HUF in millions)
+5In order to better depict intraperiod fluctuations in average capital employed, annual average capital employed is calculated as the arithmetic average of the amounts at
+the beginning of the year and the end of the year.
+Our commitment to transparency includes subjecting our
+sustainability performance to independent, detailed assess-
+ments by specialized agencies and investment-bank analysts.
+The results of these assessments provide important guidance
+to investors and to us. They help us identify our strengths and
+weakness and further improve our performance. Although
+E.ON missed being listed in the 2015 Dow Jones Sustainability
+We monitor our progress by means of a sustainability work
+program, which is divided into a number of focus areas. We
+completed the most recent program, for 2012-2015, in 2015.
+Our Sustainability Council reviews the findings of the work
+program and the materiality analysis at regular intervals and
+discusses focus areas we might need to address in the future.
+a company as well as how we address these issues. Our
+reporting is based on the Global Reporting Initiative's G4
+sustainability reporting guidelines.
+We have conducted a materiality analysis at regular intervals
+since 2006. Its purpose is to identify our stakeholders' expec-
+tations of us. Our annual online Sustainability Report describes
+the issues that are material to our stakeholders and to us as
+Our many stakeholders-customers and suppliers, policymakers
+and government agencies, employees and trade unions, non-
+governmental organizations and regional interest groups,
+equity analysts and investors-have high expectations for us
+and our industry. First and foremost, they expect us to expand
+our use of renewables and to develop new and innovative
+customer solutions. Europe's transition to a low-carbon future
+offers us many opportunities, and we aim to seize them, while
+at the same time proactively managing the attendant risks.
+This means that we need to build public support for the con-
+struction of new renewable and conventional energy assets
+and to act early to meet more stringent environmental regu-
+lations, efficiency standards, and other regulatory requirements.
+Corporate Sustainability
+CEO Letter
+2Depreciable assets are included at half their acquisition or production costs. Goodwill represents final figures following the completion of the purchase-price allocation
+(see Note 4 to the Consolidated Financial Statements).
+13.8
+EUR
+6.0
+Dec. 31, 2014
+14.3
+7.1
+GBP
+4.7
+4.4
+USD
+2.8
+2.5
+JPY
+0.2
+0.2
+Other currencies
+0.1
+0.1
+Promissory notes
+to extend the facility for one more year. This facility has not
+been drawn on and instead serves as a reliable, ongoing
+general liquidity reserve for the E.ON Group. Participation in
+the credit facility indicates that a bank belongs to E.ON's
+core group of banks.
+E.ON also has access to an originally five-year, €5 billion syn-
+dicated revolving credit facility, which was concluded with
+24 banks on November 6, 2013, and which includes two options
+to extend the facility, in each case for one year. In 2014 E.ON
+exercised the first option and extended the facility for one
+year to 2019. In 2015 E.ON, with the banks' agreement, post-
+poned until 2016 a possible exercise of the second option
+In addition to our DIP, we have a €10 billion European Com-
+mercial Paper ("CP") program and a $10 billion U.S. CP program
+under which we can issue short-term liabilities. We had no
+CP outstanding at year-end 2015 (prior year: €401 million).
+With the exception of a U.S.-dollar-denominated bond issued
+in 2008, all of E.ON SE and E.ON International Finance B.V.'s
+currently outstanding bonds were issued under our Debt
+Issuance Program ("DIP"). The DIP enables us to issue debt to
+investors in public and private placements. In April 2015 it
+was extended, as planned, for one year. The DIP has a total
+volume of €35 billion, of which about €11 billion was utilized
+at year-end 2015.
+Includes private placements.
+4.4
+19.7
+Bonds¹
+17.7
+3.5
+Other liabilities
+0.4
+Commercial paper
+0.6
+0.4
+Total
+Dec. 31, 2015
+€ in billions
+Financial Liabilities
+-18,894
+Asset-retirement obligations¹
+-5,574
+-4,210
+Provisions for pensions
+-8,785
+-19,035
+-4,610
+218
+FX hedging adjustment
+Net financial position
+-19,667
+-17,742
+Financial liabilities
+4,781
+34
+Alongside financial liabilities, E.ON has, in the course of its
+business operations, entered into contingencies and other
+financial obligations. These include, in particular, guarantees,
+obligations from legal disputes and damage claims, current
+and non-current contractual, legal, and other obligations.
+Notes 26, 27, and 31 to the Consolidated Financial Statements
+contain more information about E.ON's bonds as well as lia-
+bilities, contingencies, and other commitments.
+Economic net debt
+-33,394
+maturity profile. Third, we combine large-volume benchmark
+issues with smaller issues that take advantage of market
+opportunities as they arise. As a rule, external funding is carried
+out by our Dutch finance subsidiary, E.ON International Finance
+B.V., under guarantee of E.ON SE or by E.ON SE itself, and the
+funds are subsequently on-lent in the Group. E.ON issued no
+new bonds in 2015.
+Business Report
+42
+41
+Our funding policy is designed to give E.ON access to a vari-
+ety of financing sources at any time. We achieve this objec-
+tive by basing our funding policy on the following principles.
+First, we use a variety of markets and debt instruments to
+maximize the diversity of our investor base. Second, we issue
+bonds with terms that give our debt portfolio a balanced
+Funding Policy and Initiatives
+-27,714
+Our debt factor at year-end 2015 decreased to 3.7 (year-end
+2014: 4) owing to our lower economic net debt.
+Debt factor
+EBITDA²
+4.0
+3.7
+8,376
+7,557
+¹Less prepayments to Swedish nuclear fund.
+²Adjusted for extraordinary effects.
+Standard & Poor's ("S&P") and Moody's long-term ratings for
+E.ON are BBB+ and Baa1, respectively. Moody's downgraded
+E.ON's long-term rating from A3 to Baa1 in March 2015 S&P
+from A to BBB+ in May 2015. In February 2016 both rating
+agencies placed E.ON's long-term ratings on review for possible
+downgrades. The actions were based on a number of factors,
+including a sector-wide review of European utility companies
+with exposure to commodity and power price developments.
+The decisions were also based on the uncertainties surrounding
+the policy discussions on the possible funding of German
+nuclear provisions. The short-term ratings are A-2 (S&P) and
+P-2 (Moody's).
+E.ON SE Ratings
+Long
+term
+115
+113
+Global Commodities
++/-%
+-35
+-9
+1,222
+1,106
+-2
+Renewables
+563
+Generation
+2014
+2015
+€ in millions
+Investments
+862
+Our investments were €0.5 billion below the prior-year level.
+We invested about €3.9 billion in property, plant, and equipment
+("PP&E") and intangible assets (prior year: €4 billion). Share
+investments totaled €0.3 billion versus €0.6 billion in the prior
+year. Our investments outside Germany declined by 18 percent
+to €2.8 billion (€3.4 billion).
+Exploration & Production
+64
+Group Management/
+-58
+703
+294
+Non-EU Countries
++17
+97
+883
+Other EU Countries
++18
+745
+881
+Germany
++52
+1,035
+4,724
+Investments
+2023
+3.0
+4.0
+10
+Maturity Profile of Bonds and Promissory Notes Issued by E.ON SE,
+E.ON International Finance B.V., and E.ON Beteiligungen GmbH
+€ in billions
+Providing rating agencies and bond investors with timely, com-
+prehensive information is an important component of our
+creditor relations. The purpose of our creditor relations is to earn
+and maintain our investors' trust by communicating a clear
+strategy with the highest degree of transparency. To achieve
+this purpose, we regularly hold debt investor updates in
+major European financial centers, conference calls for debt
+analysts and investors, and informational meetings for our
+core group of banks.
+Under review for
+possible downgrade
+CreditWatch negative
+2.0
+A-2
+Baa1
+BBB+
+Outlook
+Standard & Poor's
+Moody's
+term
+Short
+P-2
+2024+
+10
+CEO Letter
+2022
+2021
+2020
+2019
+2018
+2017
+1.0
+2016
+43
+Tables and Explanations
+Combined Group Management Report
+Consolidated Financial Statements
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+December 31, 2015
+Consolidation
+Non-current securities
+8,190
+-363
+-5,457
+Other non-operating earnings
+Income/Loss (-) from continuing
+operations before taxes
+150
+-5,543
+-2,398
+Income taxes
+-835
+-570
+Income/Loss (-) from continuing
+operations
+-6,378
+-2,968
+Income from discontinued operations, net
+1
+-162
+Net loss/income
+-6,377
+2014
+2015
+€ in millions
+Economic Interest Expense
+Our economic interest expense improved, mainly because
+of the positive development of our net financial position. The
+change in our interest expense not affecting net income
+reflects nonrecurring effects, particularly in conjunction with
+the Swedish nuclear fund.
+-116
+-8,430
+¹Adjusted for extraordinary effects.
+622
+Attributable to non-controlling interests
+-3,160
+-6,999
+Attributable to shareholders of E.ON SE
+-3,130
+30
+-293
+E.ON 2.0 restructuring expenses
+Impairments (-)/Reversals (+) 2,3
+-133
+8,376
+7,557
+EBITDA¹
+2014
+2015
+€ in millions
+Depreciation and amortization
+Net Income
+Net Income
+EBITDA at Other Non-EU Countries consists of our activities in
+Brazil and Turkey, which are accounted for under the equity
+method. The €39 million improvement in EBITDA is primarily
+attributable to higher hydro output, a positive performance
+in the trading business, improved recovery of doubtful debts
+in the retail business, and positive earnings development in
+the power distribution business in Turkey.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Due to significant impairment charges, net income attributable
+to shareholders of E.ON SE of -€7 billion and corresponding
+earnings per share of -€3.60 were substantially below the
+respective prior-year figures of -€3.2 billion and -€1.64. Fourth-
+quarter net income attributable to shareholders of E.ON SE
+was -€0.9 billion compared with -€3.1 billion in the year-earlier
+quarter; fourth-quarter earnings per share were -€0.46 com-
+pared with -€1.63.
+Interest expense shown in the Consoli-
+dated Statements of Income
+Interest income (-)/expense (+) not
+affecting net income
+Total
+-3,052
+Impairments (-)/Reversals (+) 2
+-217
+expenses
+Restructuring/cost-management
+589
+450
+Net book gains/losses
+-3,561
+-1,613
+Economic interest income (net)
+4,695
+4,369
+EBIT¹
+-120
+-136
+-1,572
+-1,330
+-1,811
+-242
+CEO Letter
+1,646
+1,648
+167
+1
+Underlying net income
+Report of the Supervisory Board
+operations, net
+113
+-105
+Special tax effects
+-954
+411
+on non-operating earnings
+Income/Loss from discontinued
+Taxes and non-controlling interests
+E.ON Stock
+Combined Group Management Report
+2014
+2015
+€ in millions
+Liquid funds
+December 31
+Economic Net Debt
+Compared with the figure recorded at December 31, 2014
+(€33.4 billion), our economic net debt declined by €5.7 billion
+to €27.7 billion. Our high positive operating cash flow and the
+proceeds from divestments exceeded our investment expen-
+ditures and E.ON SE's dividend payout, resulting in a significant
+improvement in our net financial position. Another positive
+factor was a decrease in provisions for pensions, which declined
+by €1.4 billion to €4.2 billion, principally because of the devel-
+opment of interest rates.
+Strategy and Objectives
+Financial Position
+We manage E.ON's capital structure using our debt factor in
+order to ensure that E.ON's access to capital markets is com-
+mensurate with its current debt level. Debt factor is equal to
+our economic net debt divided by EBITDA; it is therefore a
+dynamic debt metric. Economic net debt includes not only our
+financial liabilities but also our provisions for pensions and
+asset-retirement obligations. In light of the change to our
+organizational setup, we will review our medium-term debt
+factor target.
+The central components of E.ON's finance strategy are capital-
+structure management and our dividend policy.
+Finance Strategy
+E.ON presents its financial condition using, among other
+financial measures, economic net debt and operating cash flow.
+Financial Situation
+Consolidated Financial Statements
+Tables and Explanations
+The second key component of our finance strategy is a con-
+sistent dividend policy. As announced last year, management
+will recommend, as it did for the 2014 financial year, paying
+shareholders a fixed dividend of €0.50 per share for the 2015
+financial year. This corresponds to a payout ratio of 59 percent
+of underlying net income.
+6,067
+116
+5,457
+Our tax expense was €0.8 billion compared with €0.6 billion
+in the prior year. We had a tax expense despite our negative
+earnings before taxes, resulting in a negative tax rate of 15 per-
+cent (prior year: 24 percent). The change in our tax rate between
+2014 and 2015 mainly reflects non-tax-reducing depreciation
+charges and a change in the value of deferred tax assets.
+Other non-operating earnings include the marking to market
+of derivatives. We use derivatives to shield our operating busi-
+ness from price fluctuations. Marking to market at year-end
+2015 resulted in a positive effect of €533 million (prior year:
+€540 million). Negative factors in 2015 included, in particular,
+costs incurred in conjunction with Oskarshamn and Ringhals
+nuclear power stations that were offset by income on the
+passthrough to the co-owners of costs incurred in conjunction
+with units 1 and 2 at Oskarshamn. Other negative factors
+included impairment charges on inventories and securities.
+In 2014 other non-operating earnings were adversely affected
+by impairment charges on gas inventories, securities, and
+operations at Non-EU Countries and by expenditures in con-
+junction with bond repurchases.
+assessments), updated assumptions regarding our policy and
+regulatory environment, and their implications for our antici-
+pated profitability. We had to record impairment charges in
+particular at Generation. We also recorded impairment charges
+at Exploration & Production, Renewables, Global Commodities,
+Russia, and Other EU Countries. In 2014 we recorded impair-
+ment charges at Generation, Non-EU Countries, Exploration &
+Production, Renewables, and Global Commodities.
+Business Report
+40
+39
+Pursuant to IFRS, income/loss from discontinued operations,
+net, is reported separately in the Consolidated Statements of
+Income. It includes the earnings of the Spain regional unit
+and the earnings from contractual obligations of operations
+that have already been sold.
+3Recorded under non-operating earnings.
+Our earnings situation in 2015 reflected, in particular, impair-
+ment charges of €8.8 billion and reversals of impairment
+charges of €0.4 billion; the reversals were primarily at Gener-
+ation. The main reasons for the impairment test were updated
+assumptions regarding the long-term development of electricity
+and fuel prices (assumptions that are based on the analyses
+of leading economic forecasting institutes and our own
+Restructuring and cost-management expenditures rose by a
+total of €14 million and, as in the prior year, resulted mainly
+from cost-cutting programs and our new strategy.
+Net book gains were €139 million below the prior-year figure
+and were recorded primarily on the sale of securities, our
+remaining stake in E.ON Energy from Waste, exploration and
+production activities in the Norwegian North Sea, network
+segments in Germany, and activities in Italy and Finland. The
+prior-year figure consists of book gains on the sale of securities,
+a gas utility in Germany, a majority stake in a gas company
+in Czechia, a stake in a gas company in Finland, network seg-
+ments in Germany, and certain micro heat production plants
+in Sweden.
+-1,613
+-1,572
+198
+2Impairments differ from the amounts reported in accordance with IFRS due to
+impairments on companies accounted for under the equity method and impair-
+ments on other financial assets.
+-150
+Underlying Net Income
+Underlying Net Income
+8,430
+Impairments/reversals of impairments
+Other non-operating earnings
+496
+510
+expenses
+Net book gains/losses
+Restructuring/cost-management
+Net income reflects not only our operating performance but
+also special effects, such as the marking to market of deriva-
+tives. Underlying net income is an earnings figure after interest
+income, income taxes, and non-controlling interests that has
+been adjusted to exclude certain special effects. In addition
+to the marking to market of derivatives, the adjustments
+include book gains and book losses on disposals, restructuring
+expenses, other non-operating income and expenses (after
+taxes and non-controlling interests) of a special or rare nature.
+Underlying net income also excludes income/loss from dis-
+continued operations (after taxes and non-controlling interests),
+as well as special tax effects.
+-589
+-3,160
+-6,999
+Net income/Net loss attributable to
+shareholders of E.ON SE
+2014
+2015
+€ in millions
+-450
+85
+43
++98
+The cost of capital is determined by calculating the weighted-
+average cost of equity and debt. This average represents the
+market-rate returns expected by stockholders and creditors.
+The cost of equity is the return expected by an investor in
+E.ON stock. The cost of debt equals the long-term financing
+terms that apply in the E.ON Group. The parameters of the cost-
+of-capital determination are reviewed on an annual basis.
+Our review of the parameters in 2015 led us to adjust our
+after-tax cost of capital downward by 0.5 percentage points,
+mainly because of a lower risk-free interest rate, which was
+only partially offset by a higher market premium. The E.ON
+Group's after-tax cost of capital declined from 5.4 to 4.9 per-
+cent. The table below shows the derivation of cost of capital
+before and after taxes.
+Cost of Capital
+2015
+2014
+Risk-free interest rate
+1.25%
+2.5%
+Market premium¹
+6.75%
+5.5%
+Debt-free beta factor
+0.52
+0.57
+Indebted beta factor²
+0.90
+0.99
+27%
+Marginal tax rate
+3.9%
+3.4%
+Cost of debt before taxes
+10.8%
+Cost of Capital
+10.0%
+27%
+27%
+Average tax rate
+7.9%
+7.3%
+Cost of equity after taxes
+Cost of equity before taxes
+ROACE and Value Added
+Other Financial and Non-financial Performance
+Indicators
+Consolidated Financial Statements
+Tables and Explanations
+Withdrawals from retained earnings
+2,488
+1,046
+Other liabilities
+1,439
+-2,131
+3,107
+Net income
+60,892
+Liabilities to affiliated companies
+500
+755
+Taxes
+3,359
+43,178
+27%
+Total equity and liabilities
+64,332
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The complete Financial Statements of E.ON SE, with the
+unqualified opinion issued by the auditor, Pricewaterhouse-
+Coopers Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft,
+Düsseldorf, will be announced in the Bundesanzeiger. Copies
+are available on request from E.ON SE and at www.eon.com.
+77,068
+At the Annual Shareholders Meeting on June 8, 2016, manage-
+ment will propose that net income available for distribution
+be used to pay a cash dividend of €0.50 per ordinary share.
+Net income available for distribution
+The negative figure recorded under other expenditures and
+income improved by €2,383 million year on year to -€569 million,
+in particular because of impairment charges of €2,056 million
+recorded in the prior year on our stake in E.ON Italia S.p.A.
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings, financial, and asset situation is affected by income
+from equity interests. The negative figure recorded for this
+item in 2015 reflects, in particular, loss transfers of €1,026 million
+from Uniper Russia Holding GmbH and €265 million from
+E.ON Beteiligungen GmbH. The main countervailing factor
+was a profit transfer of €64 million from E.ON Energie AG.
+-473
+966
+976
+Net income transferred to retained
+earnings
+The income taxes shown for 2015 yielded a positive figure and
+consist mainly of tax income for previous years. Application
+of the minimum tax provision resulted in a tax expense of
+€64 million for 2015.
+Cost of debt after taxes
+2.4%
+2.8%
+Adjustments4
+6,381
+6,902
+-1,724
+-5,057
++ Other non-interest-bearing assets, including deferred income and deferred tax assets
+- Non-interest-bearing provisions³
+2,929
+3,356
+6,582
+5,738
+56,555
+49,181
+4,695
+4,369
+2,546
+2014
+7,887
+42,577
+640
+1,251
+¹Adjusted for extraordinary effects.
+Value added
+Cost of capital before taxes
+ROACE
+Capital employed in continuing operations (at year-end)
+7.4%
+8.6%
+9.4%
+54,791
+46,539
+Capital employed in continuing operations (annual average)5
+50,501
+6.7%
+2,661
+2015
++ Shares in affiliated and associated companies and other share investments
+Alongside EBITDA, our most important earnings figure for pur-
+poses of internal management control, we use ROACE and
+value added to monitor the value performance of our operating
+business. ROACE is a pretax total return on capital. It measures
+the sustainable return on invested capital generated by oper-
+ating a business. ROACE is defined as the ratio of our EBIT to
+average capital employed.
+Analyzing Value Creation by Means of ROACE and
+Value Added
+7.4%
+6.7%
+Cost of capital before taxes
+5.4%
+Average capital employed represents interest-bearing invested
+capital. Capital employed is equal to a segment's operating
+assets less the amount of non-interest-bearing available cap-
+ital. Depreciable assets are recorded at half of their original
+acquisition or production cost. ROACE is therefore not affected
+by an asset's depreciation period. Goodwill from acquisitions
+is included at acquisition cost, as long as this reflects its fair
+value. Changes to E.ON's portfolio during the course of the year
+are factored into average capital employed.
+4.9%
+50.0%
+50.0%
+Share of debt
+50.0%
+50.0%
+Share of equity
+Cost of capital after taxes
++ Inventories
+Average capital employed does not include the marking to
+market of other share investments. The purpose of excluding
+this item is to provide us with a more consistent picture of
+our ROACE performance.
+=
+The table below shows the E.ON Group's ROACE, value added,
+and their derivation.
+to the prior year. As a result, value added amounted to
+€1.3 billion.
+Goodwill, intangible assets, and property, plant, and equipment²
+EBIT¹
+€ in millions
+E.ON Group ROACE and Value Added
+Value added measures the return that exceeds the cost of
+capital employed. It is calculated as follows:
+Our ROACE rose from 8.6 percent in 2014 to 9.4 percent in 2015,
+primarily because of a decline in average capital employed.
+This resulted mainly from impairment charges on goodwill
+and property, plant, and equipment. Our ROACE of 9.4 percent
+surpassed our pretax cost of capital, which declined relative
+Business Report
+48
+47
+2The beta factor is used as an indicator of a stock's relative risk. A beta of more
+than one signals a higher risk than the risk level of the overall market; a beta
+factor of less than one signals a lower risk.
+¹The market premium reflects the higher long-term returns of the stock market
+compared with German treasury notes.
+Value added (ROACE - cost of capital) x average capital
+employed.
+ROACE and Value Added Performance in 2015
+Provisions
+-13
+Extraordinary expenses
+structure:
+The following key figures indicate E.ON's asset and capital
+Current liabilities declined by 6 percent relative to year-end
+2014, mainly because of lower financial liabilities and the sale
+of operations in Spain and conventional generation operations
+in Italy. These effects were partially offset by the reclassifica-
+tion of operations in the U.K. North Sea as a disposal group.
+Non-current liabilities declined by 3 percent from the figure
+at year-end 2014 owing mainly to lower provisions for pensions
+and other obligations due to changes in the actuarial interest
+rate along with the on-schedule reduction of financial liabilities.
+assets and liabilities due to currency-translation effects and
+a reduction in the mark-to-market value of securities. These
+factors were partially offset by an increase in equity resulting
+from the remeasurement of defined-benefits plans.
+Total equity and liabilities
+Non-current assets are covered by equity at 26 percent
+(December 31, 2014: 32 percent).
+Current liabilities
+Equity
+Total assets
+Current assets
+Non-current assets
+€ in millions
+Consolidated Assets, Liabilities, and Equity
+Non-current liabilities
+Our equity ratio at year-end 2015 was significantly below the
+previous year-end figure. The net loss, which was caused by
+impairment charges, and the dividend payout were the main
+factors. Equity also declined owing to changes in the value of
+Non-current assets are covered by long-term capital at
+109 percent (December 31, 2014: 108 percent).
+%
+100
+125,690
+100
+113,693
+34
+42,625
+Dec. 31, 2015
+35
+66
+83,065
+65
+73,612
+%
+Dec. 31, 2014
+40,081
+19,077
+Current assets were below the year-end 2014 figure. The sale
+of the Spain regional unit's operations and of generation
+operations in Italy and Spain were the main factors. Although
+the reclassification of Exploration & Production's operations
+in the U.K. North Sea as a disposal group served to increase
+current assets, this was more than offset by a reduction in
+trade receivables and inventory. These factors were partially
+counteracted by a significant increase in liquid funds resulting
+from the receipt of the purchase prices for operations sold.
+Asset Situation
+in France. Other significant projects included overhaul work
+on unit 2 at Oskarshamn nuclear power station in Sweden
+and environmental-protection measures at Ratcliffe power
+station in the United Kingdom.
+Generation invested 35 percent less than in the prior year.
+Investments declined by €299 million, from €862 million to
+€563 million. This was due in part to a delay in the commis-
+sioning of unit 4, a new coal-fired generating unit at Datteln
+power station in Germany; a reduction in expenditures for
+unit 3 at Maasvlakte power station in the Netherlands, which
+entered service in 2015; and a reduction in expenditures for
+the conversion of unit 4 to biomass at Provence power station
+-8
+3,928
+3,621
+Growth and replacement
+investments
+Investments at Renewables declined by €116 million, from
+€1,222 million to €1,106 million. Hydro's investments to main-
+tain existing assets declined from €107 million to €96 million
+owing to the sale of operations in Spain and Italy. Wind/Solar/
+Other's investments declined from €1,115 million to €1,010 mil-
+lion. These investments went primarily toward offshore wind
+projects in Europe.
+-22
+553
+Maintenance investments
+-10
+4,637
+4,174
+Total
+709
+Non-current assets at year-end 2015 were substantially lower
+than the figure at year-end 2014, mainly because of impairment
+charges, the sale of Exploration & Production's operations in
+Norway, and the reclassification of its operations in the U.K.
+North Sea as a disposal group. This was partially offset by an
+increase in receivables from derivative financial instruments.
+Global Commodities' investments of €113 million were roughly
+at the prior-year level of €115 million and went mainly toward
+IT, the gas storage business, and share investments in the oil
+and gas business. The slight decrease was attributable, in
+particular, to a reduction in investments in the gas storage
+business and in infrastructure; this reduction was partially
+offset by an increase in IT and share investments.
+The Germany regional unit's investments of €881 million were
+significantly above the prior-year figure. The increase resulted
+from investments in connections and upgrades in the network
+business along with network expansion related to the country's
+transition to a low-carbon future. Investments in PP&E and
+intangible assets totaled €867 million, of which 90 percent
+went toward the network business and 10 percent toward the
+distributed generation business, which is a growth business.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Liquid funds at December 31, 2015, were €8,190 million (prior
+year: €6,067 million). In 2015 E.ON had €923 million of cash
+and cash equivalents subject to a restraint risk (€1,064 million).
+In addition, the current securities of Versorgungskasse Energie
+contained €435 million (€265 million) earmarked for fulfilling
+insurance obligations (see Notes 18 and 31 to the Consolidated
+Financial Statements).
+Exploration & Production invested €97 million (prior year:
+€64 million) in PP&E and intangible assets. The increase is prin-
+cipally attributable to higher investments in Elgin/Franklin,
+Skarv, Corfe, Manhattan, and Salander fields.
+Cash provided by financing activities of continuing operations
+amounted to -€3.9 billion (prior year: -€4.6 billion). The roughly
+€0.7 billion change is mainly attributable to a €0.4 billion
+reduction in the net repayment of financial liabilities, to a
+€0.1 billion reduction in the dividend payout to E.ON SE
+shareholders, and to a €0.1 billion increase in minority share-
+holders' interest in the equity of fully consolidated Group
+companies.
+Our operating cash flow of €6.1 billion was almost at the
+prior-year level. Our working capital was about the same, and
+the decline in our cash-effective earnings was largely offset
+by lower net interest and tax payments.
+Cash Flow
+Of Non-EU Countries' investments, €180 million (prior year:
+€347 million) are attributable to Russia; about €143 million of
+which went toward Russia's new-build program. We invested
+€114 million (€356 million) in our activities in Brazil and Turkey.
+Investments at Other EU Countries were €152 million above
+the prior-year level. The UK regional unit invested €155 million
+(prior year: €121 million). The increase primarily reflects cur-
+rency-translation effects and metering projects. The Sweden
+unit's investments of €405 million surpassed the prior-year
+level of €331 million and served to maintain and expand
+existing assets and to expand and upgrade the distribution
+network, including adding new connections. Investments in
+Czechia of €140 million were at the prior-year level (€141 million).
+The Hungary regional unit invested €107 million (€102 million)
+in its power and gas infrastructure. Investments in the remain-
+ing EU countries totaled €228 million (€188 million). The
+increase results from E.ON Connecting Energies' acquisition,
+at the end of 2015, of a company that generates power and
+heat in Italy.
+Business Report
+44
+Cash provided by investing activities of continuing operations
+amounted to -€0.3 billion in 2015 compared with -€3.2 billion
+in 2014. Of this roughly €2.9 billion improvement, €1.9 billion
+resulted from higher cash inflows from disposals, mainly of
+operations in Spain, solar, hydro, and conventional generating
+capacity in Italy, exploration and production activities in Nor-
+way, and the remaining stake in the company formerly called
+E.ON Energy from Waste. This effect was made more pro-
+nounced by a €0.5 billion decline in investments in intangible
+assets, property, plant, and equipment, and share investments
+and by a €0.1 billion reduction in restricted cash compared
+with a €0.4 billion increase in the prior year.
+³Non-interest-bearing provisions mainly include current provisions, such as those relating to sales and procurement market obligations. They do not include provisions for
+pensions or for nuclear-waste management.
+17
+21
+2,330
+4,343
+Liquid funds
+4,646
+-1,639
+Income from equity interests
+Interest income
+2,265
+Other receivables and assets
+2014
+2015
+€ in millions
+19,979
+22,919
+1,802
+Receivables from affiliated companies
+-678
+Current assets
+15,307
+12,469
+Equity
+952
+-2,886
+Income from continuing operations
+-742
+64,332
+Total assets
+-2,952
+-569
+Other expenditures and income
+24,574
+29,064
+77,068
+26,713
+Income Statement of E.ON SE (Summary)
+The increase in financial assets is chiefly attributable to pay-
+ments into the capital reserves of the following companies:
+E.ON Fünfundzwanzigste Verwaltungs GmbH (€4,000 million),
+Uniper Beteiligungs GmbH formerly known as Uniper GmbH
+(€2,405 million), and E.ON Energie AG (€522 million). In addi-
+tion, there was an intragroup acquisition of shares in MEON
+Pensions GmbH & Co. KG in the amount of €1,108 million.
+45
+Additional information about our asset situation (including
+information on the above-mentioned impairment charges) is
+contained in Notes 4 to 26 to the Consolidated Financial
+Statements.
+100
+125,690
+100
+113,693
+46
+28
+29
+33,444
+51
+63,335
+54
+61,172
+35,642
+Liabilities to affiliated companies at year-end 2015 increased by
+€17,714 million to €60,892 million, owing mainly to the taking
+out of loans by affiliated companies in conjunction with intra-
+group asset sales in preparation for the planned spinoff of
+Uniper operations and to loss-compensation obligations.
+Business Report
+2015
+97
+2014
+December 31
+Balance Sheet of E.ON SE (Summary)
+E.ON SE prepares its Financial Statements in accordance
+with the German Commercial Code, the SE Ordinance (in con-
+junction with the German Stock Corporation Act), and the
+German Energy Act.
+E.ON SE's Earnings, Financial, and Asset Situation
+€ in millions
+48,004
+39,661
+47,986
+Financial assets
+18
+and equipment
+Intangible assets and property, plant,
+Non-current assets
+"Capital employed is adjusted to exclude the mark-to-market valuation of other share investments, receivables and liabilities from derivatives, and operating liabilities for certain
+purchase obligations to minority shareholdings pursuant to IAS 32.
+39,758
+for power generation in the United Kingdom, is expected in
+the medium and long term. If gas prices fall further, gas-fired
+power generation could once again become more economical
+than coal-fired power generation in continental Europe as well.
+Near-term power prices on the Nordic market will continue
+to depend primarily on the weather and therefore on water
+reservoir levels. The exceptionally good hydrological situation
+is putting downward pressure on power prices, and their
+upside potential is severely limited by the low price of coal.
+The NordBalt cable between Sweden and Lithuania, which
+entered service early in 2016, is expected to lead to closer price
+coupling with the Baltic market, which has higher prices. This,
+along with the early decommissioning of Oskarshamn and
+Ringhals nuclear power stations in Sweden, has the potential
+to push prices higher.
+Power prices in the United Kingdom will likely continue to be
+strongly influenced by developments in the gas market. The
+commissioning of new gas-fired power plants in 2016 ought
+to relieve slightly the tense supply-demand situation until the
+capacity market mechanism goes live in 2018.
+Near-term and medium-term power prices in Germany will con-
+tinue to be determined largely by the price of hard coal and
+EUAS. However, the addition of more capacity-on the renew-
+ables side in the form of wind farms, on the conventional
+side in the form of technologically advanced coal-fired power
+plants could put further downward pressure on prices.
+During the next two years, the backloading process will prob-
+ably remain the principal influence on prices for EU carbon
+allowances ("EUAS") under the European Emissions Trading
+Scheme ("EU ETS"). Backloading will continue to significantly
+reduce the number of EUAS that can be acquired through
+auctions, although going forward the reduction will be smaller
+than in prior years. Nevertheless, greater scarcity will put more
+pressure on the EUA market and will likely lead to further price
+increases. The European Council's approval of the introduction
+of a market-stability reserve and the reform plans for phase
+four of the EU ETS will also be key drivers of carbon prices.
+2,460
+2,426
+Czechia
+3,195
+3,183
+3,229
+3,225
+Sweden
+4,701
+4,921
+4,704
+4,928
+Hungary
+5,331
+5,009
+Our power production for 2016 and 2017 is already almost com-
+pletely hedged. Our hedging practices will, over time, serve
+to increase the hedge rate of subsequent years. As an example,
+the graph below shows the hedge rate for our Central and
+North European outright portfolio, which essentially consists of
+our non-fossil power production from nuclear and hydro assets.
+European Outright Portfolio
+Percentages
+2016
+57
+We then expect our outlook to be significantly lower. Further
+details will be communicated along with the publication of
+the spinoff documents for the Annual Shareholders Meeting.
+Due to accounting effects, this does not allow any conclusions
+on the expected EBITDA and underlying net income for Uniper
+in 2016.
+Considering the vote at our Annual Shareholders Meeting on
+June 8, 2016, on the spinoff of a majority stake in Uniper and
+assuming that the spinoff will become effective in 2016, our
+outlook for 2016 will have to be adjusted due to accounting
+effects resuting from the spinoff.
+Our forecast for full-year 2016 earnings continues to be sig-
+nificantly influenced by the difficult business environment in
+the energy industry. We expect our 2016 EBITDA to be between
+€6 and €6.5 billion and our 2016 underlying net income to be
+between €1.2 and €1.6 billion.
+Forecast Earnings Performance
+Anticipated Earnings Situation
+The number of employees in the E.ON Group (excluding appren-
+tices and board members/managing directors) will decline
+slightly by year-end 2016. If the Annual Shareholders Meeting
+in June 2016 approves the planned spinoff of Uniper, the number
+of employees will decline considerably.
+Employees
+60 70 80 90 100
+5,343
+50
+20
+10
+0
+Nordic
+-
+-
+Range of hedged generation
+Central Europe
+2018
+2017
+30 40
+58
+5,025
+6,064
+Non-EU Countries includes only employees in Russia. The over-
+all number of employees declined owing to the completion
+of unit 3 at Berezov power station and the implementation
+of technical improvement programs.
+The number of employees at Other EU Countries declined
+slightly. The main effects came from E.ON 2.0 measures and
+normal turnover. These reductions were partially offset by
+business expansion at E.ON Connecting Energies and the
+insourcing of external employees in Hungary.
+The headcount at Germany was lower mainly because of
+E.ON 2.0 measures (such as preretirement options and the
+expiration of temporary employment contracts) and the
+transfer of the wholesale business to Global Commodities.
+This was partially counteracted by the hiring of nearly
+270 apprentices as full-time employees.
+The main reasons for the reduction in Global Commodities'
+headcount were E.ON 2.0 measures and other savings mea-
+sures. This was partially offset by business growth in North
+America and employee transfers from other E.ON units.
+The sale of operations in Spain and Italy and the reorganization
+of the Hydro unit were the principal factors in the decline in
+the number of employees at Renewables. This was partially
+offset by the expansion of our wind and solar businesses and
+the hiring of more staff at E.ON Climate & Renewables.
+Generation's headcount was lower due mainly to the sale of
+operations in Spain and Italy and to E.ON 2.0 measures. These
+effects were partially counteracted by the hiring of apprentices
+as full-time employees.
+-1
+¹Does not include board members, managing directors, or apprentices.
+2Includes E.ON Business Services.
+-4
+58,811
+56,490
+Total
+-5
+6,015
+5,718
+Group Management/Other²
+-6
+5,300
+4,970
+The number of employees at Group Management/Other
+declined owing to E.ON 2.0 measures, particularly in facility
+management functions, as well as voluntary turnover, the
+expiration of temporary employment con-tracts, and other
+efficiency measures.
+Geographic Profile
+At year-end 2015, 35,009 employees, or 62 percent of all staff,
+were working outside Germany, the same percentage as at
+year-end 2014.
+Employees by Country¹
+5,681
+6,523
+6,175
+10,210
+10,233
+10,708
+10,730
+21,640
+20,782
+Russia
+22,290
+Romania
+United Kingdom
+Germany
+Dec. 31, 2014
+Dec. 31, 2015
+Dec. 31, 2014
+Dec. 31, 2015
+FTE
+Headcount
+21,481
+Non-EU Countries
+Forecast Report
+EBITDA¹
+1,892
+Other²
+702
+607
+703
+608
+France
+2,443
+2,412
+100
+4.5
+2
+0.1
+4
+0.2
+27
+1.2
+Other EU Countries
+Non-EU Countries
+Group Management/Consolidation
+Total
+20
+2,851
+1,865
+2,818
+¹Figures do not include board members, managing directors, or apprentices.
+2Includes Italy, Spain, the Netherlands, Poland, and other countries.
+2.2
+2.7
+Generation
+12
+13
+Generation
+2014
+2015
+2014
+0.9
+2015
+Percentages
+Turnover Rate
+The turnover rate resulting from voluntary terminations
+averaged 3.7 percent across the organization, slightly higher
+than in the prior year.
+Proportion of Female Employees
+At the end of 2015, 29.9 percent of our employees were
+women, up from the figure of 28.9 percent at the end of 2014.
+Gender and Age Profile, Part-Time Staff
+Business Report
+54
+53
+Percentages
+Our forecast by segment:
+Global Commodities
+Exploration & Production
+Germany
+0.1
+0.3
+7.6
+1.8
+significantly above
+significantly below
+6.0-6.5
+Other EU Countries
+2.2
+significantly below
+Germany
+0.9
+significantly below
+Exploration & Production
+0.2
+1.3
+slightly below
+significantly above
+Global Commodities
+2015
+1.5
+2016 (forecast relative
+to prior year)
+significantly below
+Renewables
+Generation
+€ in billions
+Non-EU Countries
+Total
+¹Adjusted for extraordinary effects.
+We expect Generation's 2016 EBITDA to be significantly below
+the prior-year figure. Price developments on the wholesale
+market will continue to be a negative factor, as will the absence
+of earnings streams following the disposal of generating
+capacity in Italy and Spain.
+34
+1.5
+11
+0.5
+Percentages
+€ in billions
+Generation
+Renewables
+Investments: 2016 Plan
+Our medium-term plan calls for investments of €4.5 billion in
+2016. Maintenance investments will go mainly toward our
+conventional generation business, replacement investments
+mainly toward our smart-metering program in the United
+Kingdom, and growth investments mainly toward our renew-
+ables business. Our network investments will serve primarily
+to maintain and expand our power and gas infrastructure in
+Sweden and Germany.
+2
+Planned Investments
+We expect to be able to fund our investment expenditures
+planned for 2016 and the dividend payout for the 2015 fiscal
+year by means of operating cash flow and proceeds from
+disposals. Any peaks in the Group's funding needs during the
+course of the year can be dealt with by issuing commercial
+paper. In the context of its spinoff from E.ON SE and stock-
+market listing, Uniper AG will obtain external funding to replace
+the funds until then made available to it from the E.ON Group.
+Planned Funding Measures
+Anticipated Financial Situation
+We expect Non-EU Countries' 2016 EBITDA to be significantly
+lower because of adverse currency-translation effects and
+an unplanned outage of the new generating unit at Berezov
+power station at our Russia unit.
+Other EU Countries' 2016 EBITDA is expected to be significantly
+above the prior-year level due to more seasonally typical tem-
+peratures and further operating improvements.
+We expect the Germany regional unit's 2016 EBITDA to be
+below the prior-year level. We anticipate that the absence
+of positive one-off effects recorded in 2015 will lead to lower
+earnings, particularly in the sales and network businesses.
+The one-off effects in 2015 resulted principally from the release
+of provisions due to the resolution of legal issues.
+We expect Exploration & Production's 2016 EBITDA to be sig-
+nificantly below the prior-year figure due to the sale of our
+gas fields in the North Sea. The sale of our Norwegian North
+Sea business closed in December 2015, and we expect the
+sale of our U.K. operations to close in the first half of 2016. In
+addition, earnings from our stake in Yuzhno Russkoye gas field
+will be significantly lower due to volume and price factors.
+We expect Global Commodities' 2016 EBITDA to be significantly
+above the prior-year figure, mainly because of the power busi-
+ness resulting from an adjusted handover process for gener-
+ating capacity between Generation and Global Commodities.
+We anticipate that Renewables' 2016 EBITDA will be slightly
+below the prior-year level. Wind/Solar/Other will benefit from
+an increase in installed generating capacity, whereas Hydro
+will be adversely affected primarily by the disposal of opera-
+tions in Italy and Spain.
+In light of the change to our organizational setup, we will
+review our medium-term debt factor target.
+25,048
+24,992
+Other EU Countries
+306
+-41
+taxes¹
+entities
+Income taxes, other
+Government
+0.53
+0.43
+United Kingdom
+4,147
+4,177
+Wages, salaries, benefits
+Employees
+0.38
+0.32
+Germany
+2014
+2015
+Use
+Netherlands
+0.76
+0.77
+France
+0.35
+E.ON Group (Europe only)²
+30
+622
+ing operations
+Minority interests
+0.16
+0.03
+Other EU countries
+€ in millions
+of income from continu-
+0.47
+0.38
+Italy
+1,683
+1,181
+Interest payments²
+Lenders
+0.71
+0.76
+Minority interests' share
+0.41
+2014
+Metric tons of CO2 per MWh
+Million metric tons
+Germany
+Carbon Emissions from Power
+and Heat Generation
+2015
+Emissions data for our power and heat generation are seg-
+mented by country in accordance with the EU Emissions
+Trading Scheme ("EU ETS"). This differs from the segmentation
+for the rest of our reporting.
+Carbon Emissions and Intensity
+More information about our sustainability strategy and our
+performance is available at www.eon.com, where you will
+also find our new Sustainability Report, which will be released
+in early May 2016. It is not part of the Combined Group Man-
+agement Report.
+Our compliance with laws and regulations and with our own
+internal policies has a particularly significant impact on our
+reputation as a responsible company. We expect the same
+degree of compliance from of our suppliers. Consequently, in
+2015 we put in place a compliance check to assess-before
+any agreements are signed-whether new suppliers meet our
+compliance standards. This enables us to minimize the risk
+of corruption, human rights violations, and other unacceptable
+practices along our supply chain.
+In 2015 ECT also forged long-term partnerships with Voith Turbo
+and other customers; under these agreements, ECT develops
+integrated energy plans that enable customers to achieve
+lasting reductions in their energy and operating costs.
+installed by ECT will enter service at two BMW production
+plants in Germany in 2016. They have the potential to reduce
+carbon emissions by about 10,000 metric tons annually. Over the
+past few years our efficiency solutions have helped customers
+cut their energy costs by an average of 20 to 40 percent.
+Another important focus in 2015 was energy efficiency, which
+is becoming an increasingly significant source of our business
+growth. We can help customers reduce their energy con-
+sumption, shrink their carbon emissions, and cut costs. E.ON
+Connecting Energies ("ECT") offers energy-efficient, climate-
+friendly products and services to commercial, industrial, and
+public-sector customers in Europe and is already a successful
+player in this segment. In 2015 ECT planned, installed, and
+commissioned high-efficiency combined-heat-and-power units
+at the facilities of several leading companies. Additional units
+One of the issues with the biggest influence on these value
+drivers is the expansion of our renewables capacity. Through
+2015 our investments in wind, solar, and bioenergy projects
+totaled more than €10 billion. These investments are making
+our energy mix viable for the future by steadily increasing its
+proportion of renewable sources. Two new E.ON offshore
+wind farms, Amrumbank West (288 MW) and Humber Gateway
+(219 MW), entered service in 2015. Even as we expand our
+renewables capacity we strive to minimize our impact on the
+environment and biodiversity. We systematically assess pos-
+sible environmental risks and develop innovative solutions to
+address them. For example, we used a state-of-the-art system
+to reduce water-borne noise during the installation of the mono-
+pile foundations for the turbine towers at Amrumbank West.
+We design our sustainability strategy to achieve a reasonable
+balance in addressing environmental, social, and governance
+issues. Increasingly, sustainability issues influence value drivers
+such as our sales, reputation, attractiveness as an employer,
+efficiency, costs, and innovativeness.
+Highlights in 2015
+indices by a small margin, we were again included in the highly
+respected RobecoSAM Sustainability Yearbook. The Carbon
+Disclosure Project ("CDP") awarded E.ON the highest score
+possible-100A-for the quality, processes, and transparency
+of our reporting on our carbon emissions and climate change.
+The CDP is one of the world's largest investor organizations.
+It helps investors assess whether a company adequately
+addresses climate change in its decisions and business pro-
+cesses. In addition, E.ON continues to be listed in the Euronext
+Vigeo 120 sustainability index and made it in the top 15 of Energy
+Intelligence's Top 100 Green Utilities Ranking.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+United Kingdom
+Netherlands
+France
+Italy
+Other EU countries
+Net Value Added
+E.ON Group Carbon Intensity¹
+Business Report
+50
+50
+49
+¹Russia is not covered by the EU Emissions Trading Scheme.
+E.ON Group
+76.8
+2015
+30.1
+1.2
+2.3
+4.6
+10.2
+8.1
+20.3
+CO₂ emissions
+Russia¹
+E.ON Group (Europe only)
+46.7
+Shareholders
+Dividends³
+976
+Workforce Figures
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+More information about E.ON's compliance with Germany's
+Law for the Equal Participation of Women and Men in Leader-
+ship Positions in the Private Sector and the Public Sector can
+be found in the Management's Statement regarding this law.
+Many of these measures are already having an impact. Our
+progress is receiving recognition outside our company as
+well. For example, E.ON received the Total E-Quality Seal for
+exemplary HR policies based on equal opportunity. In 2015
+we achieved a further increase in the percentage of female exec-
+utives, which rose to 16.7 percent across E.ON, which surpassed
+our Group-wide target for the year, which was 15.8 percent.
+We support the achievement of this objective through a variety
+of measures. Each unit has specific targets, and progress
+towards these targets is monitored at regular intervals. We
+have also revised our Group-wide guidelines for filling man-
+agement positions. At least one male and one female must be
+considered as potential successors for each vacant manage-
+ment position. Many units also have support mechanisms in
+place, including mentoring programs for female managers and
+next-generation managers, the provision of daycare, flexible
+work schedules, and home-office arrangements. Significantly
+increasing the percentage of women in our internal talent
+pool is a further prerequisite for raising, over the long term,
+their percentage in management and top executive positions.
+Alongside age and internationality, gender is a special focus
+of our diversity management. Back in 2011 we set an ambitious
+objective for our organization as a whole to more than double
+the percentage of women in executive positions and to raise
+it to 14 percent in Germany by the end of 2016. With women
+accounting for 14 percent of our executives in Germany at year-
+end 2015, we already met this objective.
+and respect by signing the Charta der Vielfalt (German Diver-
+sity Charter), which now has almost 2,200 signatories. E.ON
+therefore belongs to a large network of companies committed
+to diversity, tolerance, fairness, and respect.
+E.ON brings together a diverse team of people who differ by
+nationality, age, gender, religion, and/or cultural and social
+background. Diversity is a key success factor. Numerous studies
+have shown that heterogeneous teams outperform homo-
+genous ones. Diversity is equally crucial in view of demographic
+trends. Going forward, only those companies that embrace
+diversity will be able to remain attractive employers and be
+less affected by the shortage of skilled workers. In June 2008
+we publicly affirmed our long-standing commitment to fairness
+Diversity
+In 2015 we designed and put in place a new program called
+Leadership Essentials. It will enable us to identify next-gener-
+ation managers even earlier and provide them with targeted
+development.
+The foundation of our strategic, needs-oriented talent manage-
+ment is the Management Review Process, which we conducted
+again in 2015. It helps ensure the continued professional
+development of managers and executives, our various units
+and job families, and the entire organization. It also creates
+transparency about our current talent situation and our needs
+for the future.
+In 2015 E.ON participated for the first time in "CEO of the
+Future," a competition conducted by McKinsey & Company
+management consultants along with other leading inter-
+national companies. The competition provided an opportunity
+for E.ON to showcase itself to top university students and
+talented young professionals.
+41 percent are women, up from 38 percent in 2014.
+they come from around the world (including the United
+Kingdom, Germany, India, Turkey, Indonesia, and the
+Czech Republic)
+they will work in a wide range of job families (including
+engineering, IT, sales, finance, corporate development,
+and HR)
+At year-end 2015 the E.ON Group had 56,490 employees world-
+wide, a decline of 4 percent from year-end 2014. E.ON also
+had 1,254 apprentices in Germany and 173 board members
+and managing directors worldwide.
+Employees¹
+Generation
+December 31
+11,627
+11,465
+Germany
+236
+236
+Exploration & Production
+-4
+1,371
+1,320
+•
+Global Commodities
+1,723
+1,573
+Renewables
+-17
+7,491
+6,216
++/-%
+2014
+2015
+-9
+placements at an E.ON unit in their home country and at units
+in other countries. Eighty graduates entered the program in
+2015. Their backgrounds and interests reflect the emphasis
+E.ON places on diversity:
+Business Report
+52
+An organization's business strategy and its products and ser-
+vices can be copied. What cannot be easily copied are an
+organization's people, its culture, and its competencies. The
+successful delivery of any business strategy depends on an
+organization having available highly qualified and motivated
+employees as well as a strong and diverse talent pipeline.
+People Strategy
+Employees
+Our personnel expenses of €4.2 billion again represented the
+largest component of net value added.
+E.ON is not only a reliable energy supplier. We are also a main-
+stay of economic development and individual prosperity in
+the regions and communities where we operate. Our company's
+overall financial contribution is significant. We measure it by
+means of net value added. This figure is the sum of the value
+we add to our employees (wages, salaries, benefits), govern-
+ment entities (taxes), lenders (interest payments), and minority
+shareholders (minority interests' share of our earnings). In
+addition, we pay out a portion of our total earnings as a divi-
+dend to our shareholders.
+Use of Net Value Added
+E.ON emitted 76.8 million metric tons of carbon dioxide from
+power and heat generation in 2015, of which 46.7 million metric
+tons were in Europe. This represents a significant year-on-year
+decline: nearly 20 percent overall and more than 25 percent
+in countries covered by the EU ETS. It results from the fact that
+in 2015 we produced less power and had a lower-carbon gener-
+ation mix, thanks to a slightly higher proportion of renewables
+and natural gas and a decline in coal-fired generation. Simi-
+larly, our carbon intensity declined from 0.43 to 0.4 metric tons
+per MWh.
+3Dividends are paid out of the value added from both continuing and discontinued
+operations.
+2Does not include the accretion of non-current provisions; includes capitalized
+interest.
+Great companies execute their People Strategy with the
+same energy and determination they apply to the business
+strategy. A key success factor is for HR functions to be busi-
+ness-integrated.
+¹Adjusted for deferred taxes; this item does not include additional government
+levies, such as concession fees.
+2Includes renewables generation in Europe.
+¹Specific carbon emissions are defined as the amount of CO2 emitted for each
+MWh of electricity generated.
+0.43
+0.40
+0.55
+0.55
+E.ON Group³
+Russia
+966
+³Includes renewables generation outside Europe (wind power in the United States).
+Renewables
+The primary objective of our People Strategy is to enhance
+our people's performance and leadership to power business
+Our People Strategy is delivered by HR staff at all our units
+and in all our regions. To support it through their interactions
+with all employees, HR staff are committed to being customer-
+oriented, continually improving HR services, working in partner-
+ship with employee representatives, and keeping things simple.
+51
+This recognition was one of the reasons we were able to attract
+outstanding talent, including recent university graduates.
+The E.ON Graduate Program remained one of the most coveted
+ways of joining our company. Participants are assigned a
+mentor, receive special training, and gain experience during
+In 2015 E.ON's status as a top employer was again confirmed
+by prestigious rankings, such as trendence's "Europe's 100
+Top Employers" and Universum's "Europe's Most Attractive
+Employers."
+The purpose of our talent management is to hire highly quali-
+fied people and to continually foster our employee's personal
+and professional development.
+Talent Management
+Prior to E.ON's adoption of a functionally oriented management
+model, in 2014 management and the Group Works Council in
+Germany concluded the Agreement on Future Social Partner-
+ship in the Context of the Functionally Oriented Management
+Model. The agreement, which stipulates the principles of the
+future social partnership at E.ON's operations in Germany,
+manifests a shared responsibility for the company and its
+employees and represents a special milestone in the history
+of codetermination at E.ON.
+Alongside the forms of codetermination required by law in
+European countries outside Germany, the involvement of
+employee representatives in these countries is fostered by the
+SE Agreement, by collaboration at the Group level, and by the
+Agreement on Minimum Standards for Restructuring Measures,
+which was concluded between management and the Euro-
+pean Works Council (the forerunner of the SE Works Council
+of E.ON SE) in 2010.
+E.ON places a strong emphasis on working with employee
+representatives as partners. This collaborative partnership
+is integral to our corporate culture. At a European level, E.ON
+management works closely with the SE Works Council of
+E.ON SE, whose members come from all European countries
+in which E.ON operates. Under the SE Agreement, which was
+concluded in 2012, the SE Works Council of E.ON SE is informed
+and consulted about issues that transcend national borders.
+Collaborative Partnership with Employee
+Representatives
+Our People Strategy, which sets the frame for our HR work
+programs of the next three to five years, has three key success
+factors. Preparing our People for the Future, Providing Oppor-
+tunities, and Recognizing Performance. Open Thinking, Engage-
+ment, and Never Complacent were identified as HR focus areas
+that will support the HR success factors and help put them
+into practice.
+In mid-2015 local management and employee representatives
+began to conduct the respective codetermination processes
+for splitting individual companies. In Sweden and the United
+Kingdom these procedures were completed in September 2015,
+in time for Day 0.5 of the One2two timeline. Management and
+works councils in Germany reached agreement on reconcilia-
+tions of interests at the end of October 2015.
+The main focus of our HR work in 2015 was on preparing to
+implement the measures related to E.ON's new strategy.
+Management, the SE Works Council of E.ON SE, and the Group
+Works Council of E.ON SE worked together early and con-
+cluded a fundamental agreement-the Joint Declaration and
+Framework Agreement of the Management Board of E.ON SE,
+the Executive Committee of the SE Works Council of E.ON SE
+and the Executive Committee of the Group Works Council of
+E.ON SE―which was announced end of 2014 and amended by
+certain additions in 2015. In particular, the Joint Declaration
+lays down the principles for the employee-related aspects of
+strategy measures and for the involvement of employee rep-
+resentatives in the project to implement the strategy, which
+was called One2two.
+One2two and the Involvement of Employee
+Representatives
+The E.ON People Strategy provides an excellent foundation
+to meet the challenges resulting from E.ON's new corporate
+strategy "Empowering customers. Shaping markets."-which
+involves dividing E.ON into two sharply focused companies.
+The corporate strategy brings with it some new work patterns,
+and our companies will continue to pursue ambitious goals
+while operating in demanding market environments. Despite
+these challenges, the focus areas of our People Strategy will
+enable us to continue to put the needs of our employees and
+executives at the center of what we do.
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Employee representatives were at all times actively involved
+in One2two decision-making processes and implementation
+projects at an early stage. A Project Council consisting of
+leading employee representatives was informed in advance
+of decisions pending in the Project Steering Committee and
+had the opportunity to discuss the decisions with the E.ON
+Management Board and to make recommendations. Employee
+representatives were also involved in the respective work
+streams and submodules of the One2two project.
+19
+success.
+Renewables
+Generation
+Renewables
+Global commodities
+Germany
+Group Management/Other
+E.ON Group
+In 2015, 9,275 employees in Germany purchased a total of
+1,419,934 shares of E.ON stock. Although the participation
+rate declined slightly from 47 to 41 percent, the program
+remained popular. Similar programs that offer employees
+direct participation in E.ON's business success are also in
+place in other countries and conform with their respective
+laws and regulations.
+At year-end
+Apprenticeships
+Established in 2003 as part of a pact between industry and
+the German federal government, the E.ON training initiative
+to combat youth unemployment was extended for three more
+years and will now continue through 2017. In 2015 it helped
+about 550 young people in Germany get a start on their careers
+through internships that prepare them for an apprenticeship
+as well as school projects and other programs.
+Headcount
+Percentage of workforce
+2015
+2014
+2015
+2014
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 1,254 apprentices and
+work-study students in Germany at year-end 2015. This repre-
+sented 5.5 percent of E.ON's total workforce in Germany, com-
+pared with 5.9 percent at the end of the prior year. The number
+of apprentices as well as their proportion of our total workforce
+declined relative to the prior year. This is attributable to a
+reduction in the number of apprentices taken on at our Gen-
+eration unit and a shift of certain apprenticeships from fully
+consolidated to non-consolidated companies.
+Apprentices in Germany
+Another factor in employee retention is enabling them to
+participate in their company's success. Our employee stock
+purchase program in Germany includes a partially tax-free
+contribution from E.ON to encourage employees to purchase
+stock. In 2015 employees were offered stock in five tranches.
+Because of the planned spinoff of Uniper the program will not
+be conducted in 2016. In compensation an additional company
+contribution was offered in 2015. Following the conclusion of
+the spinoff and the stock listing of Uniper AG, we plan to resume
+the E.ON employee stock purchase program in 2017 under
+terms comparable to those that were in place through 2014.
+Compensation, Pension Plans, Employee Participation
+Attractive compensation and appealing fringe benefits are
+essential to a competitive work environment. Company con-
+tributions to employee pension plans represent an important
+component of an employee's compensation package and have
+long had a prominent place in the E.ON Group. They are an
+important foundation of employees' future financial security
+and also foster employee retention. E.ON companies supple-
+ment their company pension plans with attractive programs
+to help their employees save for the future.
+1
+Group Management/Other¹
+11
+11
+E.ON Group
+8
+7
+¹Includes E.ON Business Services.
+Occupational Health and Safety
+Occupational health and safety have the highest priority at
+E.ON. A key performance indicator ("KPI") for our safety is
+total recordable injury frequency ("TRIF")-which measures
+the number of fatalities, lost-time injuries, restricted-work
+injuries, and medical-treatment injurie that occur on the job
+and en route to work-per million hours of work. Our TRIF
+figures also include E.ON companies that are not fully consol-
+idated but over which E.ON has operational control. E.ON
+employees' TRIF in 2015 was 2, the same low level as in the
+prior year. We also significantly reduced the number of severe
+injuries relative to 2014. Our units' safety performance is a
+component of the annual personal performance agreements
+of the Management Board members and executives respon-
+sible for these units.
+We use TRIF and other KPIs to monitor and continually improve
+our safety performance. To ensure continuous improvement,
+our units design health, safety, and environment ("HSE")
+improvement plans based on a management review of their
+performance in the prior year. The results of the implementa-
+tion of these plans are also used as preventive performance
+indicators.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Despite all our successes in occupational health and safety, it
+remains our objective to prevent accidents or other harmful
+effects on the health of our employees and contractors by con-
+sistently implementing uniform HSE management systems.
+297
+352
+7.5
+7.1
+Forecast Report
+Business Environment
+Macroeconomic Situation
+The OECD forecasts a gradual acceleration of global economic
+growth in 2016 and 2017. This is predicated on a further, grad-
+ual shift in China's growth drivers toward higher demand for
+consumption goods and on robust demand for investment
+goods in industrialized countries. Further slight declines are
+expected for China's GDP growth rate. Low commodity prices
+and a generally favorable economic environment could help
+put the global economy on a gradually accelerating growth
+path, which could lead to moderately higher inflation. How-
+ever, the OECD does not perceive any inflationary pressure.
+The OECD sees heightened risk in the weak economic develop-
+ment in emerging market economies and the sluggish growth
+of global trade. In particular, it considers the dramatic decline
+in the growth of global trade in 2015 as a source of uncertainty
+for future economic development.
+With private consumption demand expected to be robust,
+the prospects for growth in the United States and the United
+Kingdom remain good. The generally positive environment
+should benefit economic development in the euro zone as well.
+The demand for consumption and investment goods is expected
+to increase slightly. Rising exports will also spur growth.
+The Russian economy is not forecast to expand again until 2017.
+Although the growth in the country's consumption demand
+is expected to be sluggish, the OECD anticipates a positive con-
+tribution from the demand for investment goods. The OECD
+predicts that Turkey will continue along its robust growth path
+in the next two years. Compared with 2015, domestic demand
+is forecast to be somewhat weaker in 2016 and somewhat
+stronger in 2017. Turkey's persistent trade deficit is not expected
+to dampen growth to any significant degree.
+Energy Markets
+We expect power and fuel markets to continue to be very sen-
+sitive to macroeconomic developments and policy decisions
+and therefore to be generally more volatile in 2016 and 2017.
+That said, oversupply is currently insulating the oil market
+from geopolitical developments in the Middle East. High pro-
+duction from OPEC members and Russia is compensating for
+lower production in the United States. In addition, another
+large producer came onto the scene at the start of 2016 when
+Iran began exporting more to the West again. Only an increase
+in demand along with a further decline in production growth
+(resulting from a lack of investments to develop new oil fields)
+could lead to higher prices in 2017. This, in turn, would provide
+an incentive for ratcheting up production in the United States.
+The outlook for the coal market is weak. With China's imports
+down and the Atlantic market oversupplied, coal prices are
+unlikely to change, at least in the near and medium term. From
+a fundamental perspective, the market will continue to be
+oversupplied and only respond gradually to adjustments on
+the supply side. This is because at the present time the com-
+bination of low oil prices and the weakness of coal-exporter
+currencies against the U.S. dollar enables mine operators to
+earn positive margins.
+Supplies continue to increase on the global gas market as well.
+The first LNG export facilities in the United States and Australia
+will become operational in 2016, providing Asian and European
+markets with additional sources of gas. As a result, Europe's
+gas market will become even more sensitive to its global
+environment, chiefly with regard to demand in Asia. Imports
+from Russia and Norway are expected to remain stable. Dutch
+gas production is the only question mark. Groningen field's
+maximum production is still capped to prevent more earth-
+quakes in the region. A slight increase in gas demand, mainly
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+19
+On February 1, 2016, a fire broke out in the boiler room of unit 3
+at Berezov power station in Russia. It damaged key components
+of the 800 MW boiler. These components must be replaced.
+Management is currently assessing the extent of the damage.
+Note 35 to the Consolidated Financial Statements contains a
+more detailed description.
+Non-EU Countries
+Subsequent Events
+55
+56
+58
+6.6
+6.6
+16
+1.4
+812
+883
+7.2
+89
+91
+2.0
+2.2
+1,254
+1,400
+5.5
+5.9
+56 Subsequent Events Report
+9
+6.8
+Other EU countries
+34
+33
+Other EU countries
+4.0
+3.9
+Non-EU Countries
+30
+30
+Non-EU Countries
+6.0
+5.6
+Group Management/Other¹
+38
+41
+Group Management/Other¹
+5.5
+3.9
+Other EU countries
+E.ON Group
+1.5
+Germany
+9
+6.4
+4.9
+Global Commodities
+32
+32
+Global Commodities
+4.1
+3.3
+Exploration & Production
+36
+34
+Exploration & Production
+2.4
+5.9
+Germany
+28
+1.4
+29.9
+27
+E.ON Group
+2015
+2014
+Generation
+11
+5
+Renewables
+5
+Global Commodities
+9
+7
+Exploration & Production
+2
+2
+Germany
+8
+28.9
+7
+Percentages
+Part-time Rate
+5
+28
+3.3
+A total of 4,904 employees, or 8 percent of all E.ON Group
+employees, were on a part-time schedule. Of these, 3,252, or
+66 percent, were women.
+¹Includes E.ON Business Services.
+1Includes E.ON Business Services.
+The average E.ON Group employee was about 42 years old
+and had worked for us for about 14 years.
+Employees by Age
+30 and younger
+31 to 50
+Percentages at year-end
+3.7
+17
+2015
+2014
+17
+55
+28
+51 and older
+55
+Risk Report
+64
+63
+In April 2015 the German Federal Ministry for Economic Affairs
+and Energy commissioned an auditing firm to conduct stress
+tests; that is, to review the nuclear-energy provisions of the
+country's nuclear operators. The results were communicated in
+October. On September 2, 2015, the ministry presented draft
+legislation to extend the liability of nuclear operators. In addi-
+tion, the federal government appointed a commission, which
+will draw on an expert report commissioned by the ministry
+and on the results of the stress tests to design recommenda-
+tions for guaranteeing secure financing for the decommis-
+sioning and dismantling of the country's nuclear power stations
+and the disposal of radioactive waste. At this point it is uncer-
+tain how the recommendations might be reflected in possible
+legislation and what the resulting potential risks might be.
+Capacity markets will play an important role for E.ON in a
+number of the electricity markets where it operates. Russia,
+Spain, Sweden, and Belgium already have capacity markets
+(the latter two are strategic reserves). France, Italy, and the
+United Kingdom have made political decisions to introduce
+capacity markets. The United Kingdom held its second capac-
+ity auction, for the 2019/2020 delivery year, in December 2015.
+E.ON is building a hard-coal-fired power plant in Datteln,
+Germany ("Datteln 4"). The plant is designed to have a net
+electric capacity of about 1,055 MW. E.ON has invested more
+than €1 billion in the project so far. The Münster Superior
+Administrative Court issued a ruling declaring void the City of
+Datteln's land-use plan. This ruling was subsequently upheld
+by the Federal Administrative Court in Leipzig. Consequently,
+a new planning process was conducted to reestablish a reli-
+able planning basis for Datteln 4. The new construction plan
+and the amended land-use plan took effect on September 1,
+2014. The emission-protection and water-permitting processes
+for Datteln 4 are currently under way. In view of the ongoing
+consents process, the current policy environment, and pending
+and anticipated lawsuits, we are currently unable to make a
+statement about Datteln 4's date of commissioning. We con-
+tinue to anticipate that Datteln 4 will become operational.
+In principle, these types of risks also attend our other power
+and gas new-build and conversion projects.
+emissions produced by lignite-fired power plants. This is a result
+of the German federal government's Climate Action Program
+of 2014. Starting in 2016 older lignite-fired power plants will
+be gradually decommissioned in exchange for compensation
+payments. E.ON power plants will not be affected. The Electricity
+Market Law would end the temporary status and further develop
+the grid reserve, which ensures the stability of the electricity
+grid, and adjust the compensation rules for redispatching and
+the network reserve. In addition, it would establish a new-build
+reserve consisting of up to 2 gigawatts of capacity for south-
+ern Germany starting in 2021/22. It would give more providers
+access to control-energy markets in order to increase compe-
+tition on these markets, thereby reducing costs for consumers.
+This legislation is expected to be passed in the first half of
+2016. Amendments to the Ordinance on Reserve Power Plants
+are designed to promote and increase opportunities to make
+use of flexible load in Germany.
+The Site Selection Act (Standortauswahlgesetz, or "StandAG")
+calls for the study of Gorleben to be suspended. Gorleben is
+to remain open but be frozen in its current state. The resulting
+costs will be imposed on entities with a disposal obligation.
+StandAG estimates that the nuclear industry as a whole will
+face additional costs of more than €2 billion. E.ON took legal
+action against the cost passthrough. StandAG also obliges
+nuclear operators to store reprocessing waste at intermediate
+storage facilities in close proximity to their nuclear power
+stations. In 2014 E.ON filed declaratory actions against this new
+storage obligation in three federal states and also filed an
+appeal on constitutional grounds. On the basis of discussions
+between the German Federal Environmental Ministry and
+nuclear operators, E.ON has filed for the suspension of its
+legal actions.
+In early November the Electricity Market Law, which is based
+on the reforms contained in the German federal government's
+Green and White Papers, began its course through parliament.
+It aims to ensure competitive price formation, enhance bal-
+ancing-group integrity, integrate the electric-vehicle charging
+infrastructure into the electricity supply system, increase price
+transparency, and embed Germany's electricity market in the
+European internal market. It would put in place mechanisms
+that continuously monitor the security of supply. It would
+establish a capacity reserve and a rapid-response mechanism
+that safeguard the electricity market in emergency situations
+and promote climate protection by reducing the carbon
+Germany's Energy Act (which was amended at the end of 2012)
+and the Ordinance on Reserve Power Plants (Reservekraft-
+werksverordnung, which was passed in 2013) contain new
+regulatory restrictions for several areas, including power gen-
+eration (in particular: restrictions on the decommissioning,
+mothballing, or shutdown of generating units and rules for the
+mandatory operation of generating units that are deemed
+essential for maintaining power-system stability). These restric-
+tions could affect the profitability of E.ON's generation assets
+in Germany.
+The awarding of network concessions for power and gas is
+extremely competitive in Germany. This creates a risk of losing
+concessions, particularly in urban areas with good infrastruc-
+tures. If a concession is lost, the network is sold to the new
+concessionaire at a negotiated price. This year German legis-
+lators intend to change the modalities of how a network is
+relinquished after a network concession has been lost. This will
+likely result in a legally mandated stipulation of the purchase
+price. This could make competition even keener.
+Exploration & Production
+The amendments to Russia's mineral extraction tax for gas
+condensate and natural fuel gas took effect on July 1, 2014.
+Their earnings impact is factored into our planning.
+Global Commodities
+The Global Commodities unit obtains most of the natural gas
+it delivers to customers in and outside Germany pursuant to
+long-term supply contracts, primarily with producers in Russia,
+Germany, and the Netherlands. In addition to procuring gas on
+a long-term, contractually secured basis, Global Commodities
+is active at various gas trading markets in Europe. Because
+liquidity at these markets has increased considerably, they
+represent a significant additional procurement source. Global
+Commodities therefore has a highly diversified gas procurement
+portfolio. Nevertheless, it faces a risk of supply interruptions
+from individual procurement sources resulting, for example,
+from technical problems at production facilities or in the trans-
+mission system or other restrictions that may affect transit.
+Such events are outside Global Commodities' control.
+Germany
+The E.ON Group's operations subject it to certain risks relating
+to legal proceedings, ongoing planning processes, and regu-
+latory changes. These risks relate mainly to legal actions and
+proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of
+the transformation of Germany's energy system) an altered
+business climate in the power and gas business, price increases,
+alleged market-sharing agreements, and anticompetitive
+practices. The legal proceedings concerning price increases
+include legal actions to demand repayment of the increase
+differential in conjunction with court rulings that certain
+price-adjustment clauses used in the special-customer segment
+in years past are invalid. Rulings by Germany's Federal Court
+of Justice ("FCJ") have increased these risks industry-wide. To
+reduce future risks E.ON uses amended price-adjustment
+clauses. Additional risks result from a ruling issued by the
+European Court of Justice ("ECJ") on October 23, 2014, that
+Germany's Basic Supply Ordinances for Power and Gas (Grund-
+versorgungsverordnungen) are in violation of EU law. The FCJ
+issued several rulings in 2015 on the violation's consequences
+for German law. More rulings on this matter are expected in
+2016. Although no E.ON company is a party to these cases,
+there is a risk that claims for repayment of the increase differ-
+ential will be successful against E.ON companies as well. The
+amended Basic Supply Ordinances for Power and Gas increase
+the risk that price changes will result in tariff customers
+switching suppliers. E.ON is involved in arbitration and legal
+proceedings with a number of large customers concerning
+contract and price adjustments to reflect a business environ-
+ment altered by market dislocations. In some of these pro-
+ceedings the customers are contesting the validity of price-
+adjustment clauses and the validity of the contracts as a whole.
+CEO Letter
+Report of the Supervisory Board
+Strategy and Objectives
+Generation
+E.ON Stock
+In response to discussions about international climate policy,
+a number of EU member states began debating the future of
+coal-fired power generation.
+The political, legal, and regulatory environment in which the
+E.ON Group does business is also a source of external risks,
+such as decisions by governments to phase out power gener-
+ation using certain fuels. Changes to this environment can
+lead to considerable uncertainty with regard to planning and,
+under certain circumstances, to impairment charges.
+Strategic risks
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Operational
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+20
+5
+risks
+Market risks
+19
+10
+32
+Counterparty
+risks
+8
+0
+10
+20
+30
+40
+50
+In the normal course of business, we are subject to a number
+of risks that are inseparably linked to the operation of our
+businesses.
+Material risks are events or circumstances that could have a
+significant impact on the asset, financial, or earnings situation
+of E.ON Group companies or segments. The E.ON Group, and
+thus E.ON SE, is exposed to the following main risks:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+External Risks
+On the basis of the German Federal Network Agency's evalu-
+ation report on incentive-based regulation, in March 2015
+the German Federal Ministry for Economic Affairs and Energy
+published a position paper containing key elements for the
+revision of this regulation. The key elements would not change
+investment conditions in any significant way. Adjustments
+to the regulator's efficiency benchmarking are conceivable.
+At this time, these issues are still under discussion. The second
+update of the ministry's ten-point energy agenda calls for
+incentive-based regulation to be amended in 2016. For this
+purpose, the German federal cabinet would have to pass a
+resolution that would have to be approved by the Bundesrat,
+the upper house of Germany's parliament which represents
+the federal states.
+68
+In view of the economic and financial crisis in many EU member
+states, policy and regulatory intervention (such as additional
+taxes, price moratoriums, regulatory price reductions, and
+changes to support schemes for renewables) is becoming
+increasingly apparent. Such intervention could pose a risk to
+E.ON's operations in these countries. In particular, the refinancing
+situation of many European countries could have a direct
+impact on the E.ON Group's cost of capital. So-called Robin
+Hood taxes in Hungary are an example of such intervention.
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology. We out-
+sourced our IT infrastructure to an external service provider
+in 2011. Among our IT risks are the unauthorized access to
+data, the misuse of data, and data loss.
+In addition, our operating business potentially faces risks
+resulting from human error and employee turnover.
+Market Risks
+Our units operate in an international market environment
+that is characterized by general risks relating to the business
+cycle. In addition, the entry of new suppliers into the market-
+place along with more aggressive tactics by existing market
+participants has created a keener competitive environment
+for our electricity business in and outside Germany which could
+reduce our margins. Our Global Commodities unit continues
+to face considerable competitive pressure in its gas business.
+Competition in the gas market and increasing trading volumes
+at virtual trading points and gas exchanges could result in
+considerable volume risks for natural gas purchased under
+long-term take-or-pay contracts. In addition, the far-reaching
+dislocations on Germany's wholesale gas markets in recent
+years have led to considerable price risks between the purchase
+and sales side. Generally, long-term gas procurement contracts
+between producers and importers include the possibility of
+adjusting them to reflect continually changing market condi-
+tions. On this basis, we conduct ongoing, intensive negotiations
+with our producers.
+In addition, our Global Commodities unit has booked LNG
+regasification capacity in the Netherlands and the United
+Kingdom well into the future, resulting in payment obligations
+through 2031 and 2029, respectively. It has a payment obli-
+gation in the United States extending over 20 years through
+2038 resulting from a long-term LNG FOB take-or-pay contract.
+A deterioration of the economic situation, a decline in LNG
+available for the northwest European market, and/or a decline
+in global demand for LNG could result in a lower utilization
+of regasification capacity or of the LNG take-or-pay contract
+than originally planned.
+The demand for electric power and natural gas is seasonal,
+with our operations generally experiencing higher demand
+during the cold-weather months of October through March
+and lower demand during the warm-weather months of April
+through September. As a result of these seasonal patterns,
+our sales and results of operations are higher in the first and
+fourth quarters and lower in the second and third quarters.
+Sales and results of operations for all of our energy operations
+can be negatively affected by periods of unseasonably warm
+weather during the autumn and winter months. Our units in
+Scandinavia could be negatively affected by a lack of precipi-
+tation, which could lead to a decline in hydroelectric genera-
+tion. We expect seasonal and weather-related fluctuations in
+sales and results of operations to continue.
+The E.ON Group's business operations are exposed to com-
+modity price risks. We mainly use electricity, gas, coal, carbon-
+allowance, and oil price hedging transactions to limit our
+exposure to risks resulting from price fluctuations, to optimize
+systems, to conduct load balancing, and to lock in margins.
+E.ON's international business operations expose it to risks
+from currency fluctuation. One form of this risk is transaction
+risk, which occurs when payments are made in a currency
+other than E.ON's functional currency. Another form of risk is
+translation risk, which occurs when currency fluctuations
+lead to accounting effects when assets/liabilities and income/
+expenses of E.ON companies outside the euro zone are trans-
+lated into euros and entered into our Consolidated Financial
+Statements. Currency-translation risk results mainly from
+transactions denominated in U.S. dollars, pounds sterling,
+Swedish kronor, Russian rubles, Norwegian kroner, Hungarian
+forints, and Turkish lira.
+E.ON faces earnings risks from financial liabilities and interest
+derivatives that are based on variable interest rates.
+67
+Risk Report
+In addition, E.ON also faces risks from price changes and
+losses on the current and non-current investments it makes
+to cover its non-current obligations, particularly pension and
+asset-retirement obligations.
+Declining discount rates could lead to increased provisions
+for pensions and asset-retirement obligations. This poses an
+earnings risk for E.ON.
+Strategic Risks
+E.ON communicated its new strategy in November 2014.
+Under it, E.ON will focus on renewables, energy networks, and
+customer solutions. In 2015 E.ON transferred its conventional
+generation, global energy trading, exploration and production
+businesses to a new, independent company called Uniper. In
+2016 it intends to spin off a majority stake in Uniper to E.ON
+shareholders. The following potential risks attend this process:
+delays in the implementation of the organizational separa-
+tion and/or the public listing, higher-than-anticipated imple-
+mentation costs, an adverse impact on ongoing business
+operations, and changes in counterparty requirements on the
+basis of Uniper's rating.
+Our business strategy involves acquisitions and investments
+in our core business as well as disposals. This strategy depends
+in part on our ability to successfully identify, acquire, and
+integrate companies that enhance, on acceptable terms, our
+energy business. In order to obtain the necessary approvals
+for acquisitions, we may be required to divest other parts of
+our business or to make concessions or undertakings that
+materially affect our business. In addition, there can be no
+assurance that we will be able to achieve the returns we
+expect from any acquisition or investment. For example, we
+may fail to retain key employees; may be unable to success-
+fully integrate new businesses with our existing businesses;
+may incorrectly judge expected cost savings, operating profits,
+or future market trends and regulatory changes; or may spend
+more on the acquisition, integration, and operation of new
+businesses than anticipated. Furthermore, investments and
+acquisitions in new geographic areas or lines of business
+require us to become familiar with new sales markets and
+competitors and to address the attending business risks.
+In the case of planned disposals, E.ON faces the risk of dis-
+posals not taking place or being delayed and the risk that
+E.ON receives lower-than-anticipated disposal proceeds. In
+such projects, it is not possible to determine the likelihood of
+these risks. In addition, after transactions close we could face
+liability risks resulting from contractual obligations.
+Counterparty Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results
+from non-delivery or partial delivery by a counterparty of the
+agreed consideration for services rendered, from total or
+partial failure to make payments owing on existing accounts
+receivable, and from replacement risks in open transactions.
+Management Board's Evaluation of the Risk
+Situation
+We determine the E.ON Group's overall risk by means of a
+Monte Carlo simulation technique that also factors in the
+interdependencies between individual risks. This simulation
+factors in the major Group company's individual risks as well
+as possible deviations from the assumptions on which our
+planning is based. It calculates the maximum loss after counter-
+measures (net worst case) and the anticipated loss. Changes
+to these figures over time indicate changes in the E.ON Group's
+risk situation.
+risks
+Operational Risks
+Other EU Countries
+Alongside risks to our energy production, there are also risks
+that could lead to the disruption of offsite activities, such as
+transportation, communications, water supply, waste removal,
+and so forth. Increasingly, our investors and customers expect
+us to play an active leadership role in environmental issues like
+climate change and water conservation. Our failure to meet
+these expectations could increase the risk to our business by
+reducing the capital market's willingness to invest in our com-
+pany and the public's trust in our brand.
+Strategy and Objectives
+The Competition and Markets Authority ("CMA") is conducting
+an investigation of the energy market in Great Britain. The
+investigation is based on a number of theories, including that
+British electricity and gas markets may suffer from insufficient
+competition between the six leading energy suppliers and
+from overregulation. On July 7, 2015, the CMA published a com-
+prehensive preliminary report containing its provisional findings
+and possible remedies. After receiving a deadline extension,
+it must submit its final report by June 25, 2016. To resolve any
+issues it identifies, the CMA may propose remedies ranging
+from market adjustments to changes in companies' structure.
+The outcome of the investigation is open. It could create risks
+as well as opportunities for E.ON and other market participants.
+Non-EU Countries
+Our operations in Turkey could face risks resulting from the
+country's general macroeconomic development and regulatory
+environment, including the liberalization process.
+Currently, the crisis in Ukraine has not yet affected our ability
+to supply our customers with gas. At this time our activities
+in Russia continue to operate according to plan. However, we
+cannot entirely rule out the possibility that they could be
+adversely affected by a further deterioration of the political
+and macroeconomic situation. Currently, though, there are
+no specific policy decisions that would have measurably nega-
+tive consequences.
+E.ON Group
+The new EU energy efficiency directive took effect in December
+2012. Among other provisions, it obliges all energy distributors
+and energy retailers to achieve, between 2014 and 2020, annual
+savings of 1.5 percent on the amount of energy they sell to their
+customers. A number of member states have replaced this
+provision with alternative measures that achieve a comparable
+effect. All companies that are not small or medium-sized
+enterprises face a financial risk because they are obligated
+to conduct energy audits by the end of 2015 or to put in
+place energy-management systems. Although the increasing
+efforts to enhance energy efficiency in all European energy
+markets create sales-volume risks for E.ON, they also create
+new sales opportunities by enlarging the market for energy-
+service businesses.
+In the context of discussions about Europe's ability to meet
+its long-term climate-protection targets for 2050, adjustments
+to European emissions-trading legislation are under consider-
+ation. A first step was taken when it was agreed to reduce the
+number of carbon allowances available during the current
+phase of the EU Emissions Trading Scheme ("ETS"), which ends
+in 2020. A second step was taken with the decision to intro-
+duce a market stability reserve, whose purpose is likewise to
+reduce the number of carbon allowances available starting in
+2019. In July 2015 the European Commission put forward addi-
+tional proposals for reforming the ETS. The hope is that reducing
+the number of allowances will lead to higher carbon prices,
+65
+66
+Risk Report
+which would create additional incentives for investments in
+climate-friendly generating capacity. The risks of potentially
+higher carbon prices for E.ON's current fossil-fueled generation
+portfolio in the EU can only be assessed when greater clarity
+exists about what ETS reform measures will be taken.
+A number of EU-wide electricity network codes are currently
+being developed or going through the comitology process.
+The codes could have implications for E.ON's trading and gen-
+eration operations. For example, the code for network con-
+nections sets minimum technical requirements for connecting
+generating facilities to distribution and transmission systems.
+It could increase requirements for new and, following the
+completion of a cost-benefit analysis, for existing generating
+facilities. The code that establishes uniform EU rules for power
+balancing systems is expected to enter the comitology process
+sometime in 2016.
+Further risks may result from the EU's European Market Infra-
+structure Regulation ("EMIR") for derivatives traded over the
+counter ("OTC"), the updated Markets in Financial Instruments
+Directive ("MiFID2"), and the planned introduction of a financial
+transaction tax. With regard to EMIR and OTC derivatives, the
+European Commission intends to introduce mandatory central
+clearing of all OTC trades. Non-financial firms are exempted
+from the clearing obligation as long as transactions are demon-
+strably risk-reducing or remain below certain monetary
+thresholds. E.ON monitors its compliance with these thresholds
+on a daily basis in order to avoid additional liquidity risks
+resulting from the margin requirements of mandatory clear-
+ing. Possible changes to existing EU regulations could lead to
+a substantial increase in administrative expenses, additional
+liquidity risks, and, if a financial transaction tax is imposed in
+a number of EU member states, a higher tax expense.
+Reputation Risks
+Events and discussions regarding nuclear power and energy
+prices affect the reputation of all large energy suppliers. This
+is particularly the case in Germany. As a large corporation
+whose stock is part of the DAX 30 blue-chip index, E.ON is
+especially Events and discussions regarding nuclear power
+and energy prices affect the reputation of all large energy
+suppliers. This is particularly the case in Germany. As a large
+corporation whose stock is part of the DAX 30 blue-chip index,
+E.ON is especially prominent in Germany and is almost always
+mentioned during public discussions of controversial energy-
+policy issues.
+That is why communicating clearly, seeking out opportunities
+for dialog, and engaging with our key stakeholders are so
+important. They are the foundation for earning credibility and
+an open ear for our viewpoints. Revised stakeholder-manage-
+ment processes we implemented in 2015 will help us achieve
+these aims. It is important that we act responsibly along our
+entire value chain and that we communicate consistently,
+enhance the dialog, and maintain good relationships with our
+key stakeholders. We actively consider environmental, social,
+and corporate-governance issues. These efforts support our
+business decisions and our public relations. Our objective is
+to minimize our reputation risks and garner public support
+so that we can continue to operate our business successfully.
+Technological Risks
+Technologically complex production facilities are used in the
+production and distribution of energy. Germany's Renewable
+Energy Law is resulting in an increase in decentralized feed-in,
+which creates the need for additional expansion of the dis-
+tribution network. On a regional level, the increase in decen-
+tralized feed-in (primarily from renewables) has led to a shift
+in load flows. Our operations in and outside Germany could
+experience unanticipated operational or other problems
+leading to a power failure or shutdown. Operational failures or
+extended production stoppages of facilities or components
+of facilities (including new-build projects) as well as environ-
+mental damage could negatively impact our earnings, affect
+our cost situation, and/or result in the imposition of fines.
+We could also be subject to environmental liabilities associated
+with our power generation operations that could materially
+and adversely affect our business. In addition, new or amended
+environmental laws and regulations may result in material
+increases in our costs.
+Climate change has become a central risk factor. For example,
+E.ON's operations could be adversely affected by the absence
+of precipitation or above-average temperatures that reduce
+the cooling efficiency of our generation assets and may make
+it necessary to shut them down. Extreme weather or long-term
+climatic change could also affect wind power generation.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+30
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+3
+Audit and Risk Committee
+Audit Report
+Internal Audit
+Quarterly KonTraG Risk
+Reporting
+Audits
+Additional Reports on
+E.ON Group Financial
+Management (including
+Liquidity)
+Additional Separate
+Reports on E.ON Group
+Commodity and Credit
+Risks
+Market Risks
+Operational Risks
+External Risks
+Strategic Risks
+Technological Risks
+Planning and Controlling
+Process
+Earnings Report/
+Medium-Term Planning
+Risk Management, Monitoring, and Reporting
+Generation
+Counterparty Risks
+Renewables Global
+Exploration
+Commodities & Production
+Germany
+Other EU
+Countries
+Non-EU
+Countries
+Management Board
+Group
+Management/
+Consolidation
+E.ON SE
+Risk Management System
+CEO Letter
+Technological
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Generation's investments will serve to maintain and expand
+its portfolio of power generation assets.
+The main focus of Renewables' investments will be on offshore
+wind farms in Europe and onshore farms in the United States.
+Global Commodities will invest mainly in IT and its gas-storage
+infrastructure.
+Investments at the Germany regional unit consist in particular
+of numerous individual investments to expand our interme-
+diate- and low-voltage networks, switching equipment, and
+metering and control technology as well as other investments
+to ensure the reliable and uninterrupted transmission and
+distribution of electricity.
+Investments at Other EU Countries will consist principally
+of investments to maintain and expand our regional energy
+networks in Sweden and Czechia. They will also go toward
+smart metering in United Kingdom and the development of
+customer solutions.
+Non-EU Countries' investments will serve mainly to maintain
+and repair assets, in particular at Berezov power station in
+Russia.
+General Statement on E.ON's Future Development
+New Strategy and Planned Changes in Reporting
+On November 30, 2014, the E.ON Supervisory Board approved the
+Management Board's proposal for a new corporate strategy.
+This strategy is founded on the perception that over the past
+few years two energy worlds have emerged: a conventional
+and a new energy world. They are not separate. On the contrary,
+they depend on one another. But they place completely dif-
+ferent demands on energy companies. The new energy world
+is about customer orientation, efficient and increasingly smart
+grids, renewables, distributed generation, and technical inno-
+vations. The conventional energy world, by contrast, primarily
+requires expertise and cost efficiency in conventional power
+stations and global energy trading.
+In view of the policy debate in Germany regarding nuclear
+energy, E.ON has decided to retain responsibility for the remain-
+ing operation and decommissioning of its nuclear generating
+capacity in Germany. On September 9, 2015, the E.ON SE Super-
+visory Board unanimously approved a Management Board
+resolution stating this intention. The decision does not affect
+E.ON's corporate strategy; instead, it safeguards against possi-
+ble risks to the implementation of this strategy. The nuclear
+power business in Germany is not a strategic business segment
+for E.ON and is managed by a separate operating company
+called Preussen Elektra.
+E.ON successfully separated its operations from Uniper's
+effective January 1, 2016. From the new E.ON campus in Essen,
+the company now focuses on renewables, energy networks,
+and customer solutions. Düsseldorf-based Uniper operates
+independently. Its businesses-conventional power generation
+(hydro, natural gas, coal) and global energy trading―remain
+essential for ensuring the security of the energy supply. The
+separation represented another important milestone in the
+execution of our new strategy. The spinoff is subject to the
+approval of shareholders at the E.ON Annual Shareholders
+Meeting in June 2016. Only if such a resolution is passed can
+Uniper be spun off and listed on the stock market. E.ON
+intends to divest, initially, a majority stake in Uniper and to
+part with its remaining stake over the medium term.
+If the E.ON Annual Shareholders Meeting approves the Uniper
+spinoff, Uniper companies will be reclassified in E.ON's Con-
+solidated Financial Statements as discontinued operations and
+the prior-year figures adjusted accordingly.
+This Combined Group Management Report contains certain forward-looking statements based on E.ON management's current assumptions and forecasts and other currently available
+information. Various known and unknown risks, uncertainties, and other factors could lead to material differences between E.ON's actual future results, financial situation, development,
+or performance and the estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
+59
+60
+Risk Report
+Risk Committee
+Our risk management system consists of a number of com-
+ponents that are embedded into E.ON's entire organizational
+structure and processes. As a result, our risk management
+system is an integral part of our business and decision-making
+processes. The key components of our risk management system
+include our Group-wide guidelines and reporting systems; our
+standardized Group-wide strategy, planning, and controlling
+processes; Internal Audit activities; the separate Group-wide
+risk reporting conducted pursuant to the Corporate Sector
+Control and Transparency Act ("KonTraG"); and the establish-
+ment of risk committees. Our risk management system reflects
+industry best practice and is designed to enable management
+E.ON SE Supervisory Board
+CEO Letter
+Our IT systems are maintained and optimized by qualified
+E.ON Group experts, outside experts, and a wide range of tech-
+nological security measures. In addition, the E.ON Group has
+in place a range of technological and organizational measures
+to counter the risk of unauthorized access to data, the misuse
+of data, and data loss.
+Managing Market Risks
+We use a comprehensive sales management system and
+intensive customer management to manage margin risks.
+In order to limit our exposure to commodity price risks, we
+conduct systematic risk management. The key elements of our
+risk management are, in addition to binding Group-wide policies
+and a Group-wide reporting system, the use of quantitative
+key figures, the limitation of risks, and the strict separation of
+functions between departments. Furthermore, we utilize deriv-
+ative financial instruments that are commonly used in the
+marketplace. These instruments are transacted with financial
+institutions, brokers, power exchanges, and third parties whose
+creditworthiness we monitor on an ongoing basis. The Global
+Commodities unit aggregates and consistently manages the
+price risks we face on Europe's liquid commodity markets.
+61
+62
+Risk Report
+We use systematic risk management to monitor and control
+our interest-rate and currency risks and manage these risks
+using derivative and non-derivative financial instruments. Here,
+E.ON SE plays a central role by aggregating risk positions
+through intragroup transactions and hedging these risks in the
+market. Due to E.ON SE's intermediary role, its risk position is
+largely closed.
+We have comprehensive preventive measures in place to
+manage potential risks relating to acquisitions and investments.
+To the degree possible, these measures include, in addition
+to the relevant company guidelines and manuals, comprehen-
+sive due diligence, legally binding contracts, a multi-stage
+approvals process, and shareholding and project controlling.
+Comprehensive post-acquisition projects also contribute to
+successful integration.
+Managing Counterparty Risks
+We use a Group-wide credit risk management system to
+systematically measure and monitor the creditworthiness of
+our business partners on the basis of Group-wide minimum
+standards. We manage our credit risk by taking appropriate
+measures, which include obtaining collateral and setting
+limits. The E.ON Group's Risk Committee is regularly informed
+about all material credit risks. A further component of our
+risk management is a conservative investment strategy and
+a broadly diversified portfolio.
+Note 30 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial
+instruments and hedging transactions. Note 31 describes the
+general principles of our risk management and applicable
+risk metrics for quantifying risks relating to commodities, credit,
+liquidity, interest rates, and currency translation.
+The risk situation of the E.ON Group's operating business at
+year-end 2015 had not changed significantly relative to the risk
+situation at year-end 2014, although the policy and regulatory
+risk situation deteriorated further. Policy and regulatory inter-
+vention, increasing gas-market competition and its effect on
+sales volumes and prices, and possible delays in power and
+gas new-build projects could adversely affect our earnings
+situation. From today's perspective, however, we do not per-
+ceive any risks that could threaten the existence of the E.ON
+Group or individual segments.
+Risk Situation
+Our IT-based system for reporting risks and opportunities has
+the following risk categories: market risks (commodity-price,
+margin, market-liquidity, foreign-exchange, and interest-rate
+risks), operational risks (IT, process, and personnel risks), exter-
+nal risks (policy and legal risks, regulatory risks, risks from public
+consents processes, risks from long-term market developments,
+and reputation risks), strategic risks (risks resulting from
+investments and disposals), technological risks (risks relating
+to the operation of power plants, networks, and other facilities;
+environmental and new-build risks), and counterparty risks
+(credit and country risks). E.ON SE departments and the major
+Group companies report quantifiable and unquantifiable risks
+into the reporting system according to these categories. We
+categorize the earnings impact of risks as low (under €0.5 bil-
+lion), intermediate (€0.5 to €1 billion), high (€1 to €5 billion),
+and very high (over €5 billion). These are risks that have been
+quantified by means of, for example, statistical methods, simu-
+lations, and expert opinion, presupposing the worst case for
+each risk. The graphic below shows the number of risks in each
+category; risks of the same type are aggregated into a risk group.
+Number of Risks per Risk Category
+-Very high High
+External risks
+Intermediate
+-Low
+to recognize risks early and to take the necessary counter-
+measures in a timely manner. We continually review our Group-
+wide planning, controlling, and reporting processes to ensure
+that they remain effective and efficient. As required by law,
+the effectiveness of our risk management system is reviewed
+regularly by Internal Audit. Our risk management system
+encompasses all fully consolidated E.ON Group companies and
+all companies accounted for using the equity method whose
+book value exceeds €50 million.
+44
+11
+Managing Operational Risks
+Should an accident occur despite the measures we take, we
+have a reasonable level of insurance coverage.
+Managing Strategic Risks
+quality management, control, and assurance
+Report of the Supervisory Board
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Risk Committee
+In compliance with the provisions of Section 91, Paragraph 2,
+of the German Stock Corporation Act relating to the establish-
+ment of a risk-monitoring and early warning system, the
+E.ON Group has a Risk Committee. The Risk Committee, with
+support from relevant divisions and departments of E.ON SE
+and E.ON Global Commodities SE (effective January 2016:
+Uniper Global Commodities SE), ensures that the risk strategy
+defined by the Management Board, principally the commodity
+and credit risk strategy, is implemented, complied with, and
+further developed.
+Further Risk-Limitation Measures
+In addition to the above-described components of our risk
+management, we take the following measures to limit risk.
+Managing External Risks
+We engage in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, we strive to conduct proper project
+management so as to identify early and minimize the risks
+attending our new-build projects.
+We attempt to minimize the operational risks of legal proceed-
+ings and ongoing planning processes by managing them appro-
+priately and by designing appropriate contracts beforehand.
+Managing Technological Risks
+Strategy and Objectives
+Furthermore, the following are among the comprehensive
+measures we take to address technological risks:
+•
+•
+•
+systematic employee training, advanced training, and
+qualification programs
+further refinement of our production procedures, pro-
+cesses, and technologies
+regular facility and network maintenance and inspection
+company guidelines as well as work and process instruc-
+To limit technological risks, we will continue to improve our
+network management and the optimal dispatch of our gen-
+eration assets. At the same time, we are implementing oper-
+ational and infrastructure improvements that will enhance the
+reliability of our generation assets and distribution networks,
+even under extraordinarily adverse conditions. In addition, we
+have factored the operational and financial effects of envi-
+ronmental risks into our emergency plan. They are part of a
+catalog of crisis and system-failure scenarios prepared for the
+Group by our incident and crisis management team.
+tions
+•
+through a stock exchange
+•
+.
+by use of derivatives (put or call options or a combination
+of both).
+by means of a public offer or a public solicitation to
+submit offers for the exchange of liquid shares that are
+admitted to trading on an organized market, within the
+meaning of the German Securities Purchase and Take-
+over Law, for Company shares
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the
+next calendar year plus one. As a rule, an employee may not
+sell such shares until the blackout period has expired.
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, in pursuit of one or
+more objectives by the Company and also by affiliated com-
+panies or by third parties for the Company's account or its
+affiliates' account.
+With regard to treasury shares that will be or have been
+acquired based on the above-mentioned authorization and/or
+prior authorizations by the Shareholders Meeting, the Manage-
+ment Board is authorized, subject to the Supervisory Board's
+consent and excluding shareholder subscription rights, to
+use these shares-in addition to a disposal through a stock
+exchange or an offer granting a subscription right to all
+shareholders-as follows:
+by means of a public offer directed at all shareholders or
+a public solicitation to submit offers
+At the Management Board's discretion, the acquisition may be
+conducted:
+E.ON Stock
+Management Board's Power to Issue or Buy Back
+Shares
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+The Supervisory Board is authorized to decide by resolution
+on amendments to the Articles of Association that affect only
+their wording (Section 10, Paragraph 7, of the Articles of Asso-
+ciation). Furthermore, the Supervisory Board is authorized to
+revise the wording of Section 3 of the Articles of Association
+upon utilization of authorized or conditional capital.
+Resolutions of the Shareholders Meeting require a majority of
+the valid votes cast unless the law or the Articles of Asso-
+ciation explicitly prescribe otherwise. An amendment to the
+Articles of Association requires a two-thirds majority of the
+votes cast or, in cases where at least half of the share capital
+is represented, a simple majority of the votes cast unless the
+law explicitly prescribes another type of majority.
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is
+permissible. If more than one person is appointed as a member
+of the Management Board, the Supervisory Board may appoint
+one of the members as Chairperson of the Management Board.
+If a Management Board member is absent, in the event of
+an rgent matter, the court makes the necessary appointment
+upon petition by a concerned party. The Supervisory Board
+may revoke the appointment of a member of the Management
+Board and the Chairperson of the Management Board for
+serious cause (for further details, see Sections 84 and 85 of
+the AktG.
+Pursuant to Section 71b of the German Stock Corporation Act
+(known by its German abbreviation, "AktG"), the Company's
+own shares give it no rights, including no voting rights.
+Legal Provisions and Rules of the Company's Articles
+of Association Regarding the Appointment and
+Removal of Management Board Members and
+Amendments to the Articles of Association
+Pursuant to the Company's Articles of Association, the Manage-
+ment Board consists of at least two members. The Supervisory
+Board decides on the number of members as well as on their
+appointment and dismissal.
+•
+Pursuant to a resolution of the Shareholders Meeting of May 3,
+2012, the Company is authorized, until May 2, 2017, to acquire
+own shares. The shares acquired and other own shares that
+are in possession of or to be attributed to the Company pur-
+suant to Sections 71a et seq. of the AktG must altogether at
+no point account for more than 10 percent of the Company's
+share capital.
+•
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+to be sold and transferred against contribution in kind
+Restrictions on Voting Rights or the Transfer of
+Shares
+Declaration Made in Accordance with Section 161 of
+the German Stock Corporation Act by the Manage-
+ment Board and the Supervisory Board of E.ON SE
+The Board of Management and the Supervisory Board hereby
+declare that E.ON SE will comply in full with the recommen-
+dations of the "Government Commission German Corporate
+Governance Code," dated May 5, 2015, published by the Fed-
+eral Ministry of Justice in the official section of the Federal
+Gazette (Bundesanzeiger).
+Corporate Governance Declaration in Accordance
+with Section 289a of the German Commercial Code
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+A change-of-control event would also result in the early payout
+of performance rights and virtual shares under the E.ON Share
+Performance Plan and the E.ON Share Matching Plan.
+In the event of a premature loss of a Management Board posi-
+tion due to a change-of-control event, the service agreements
+of Management Board members entitle them to severance
+and settlement payments (see the detailed presentation in the
+Compensation Report).
+Settlement Agreements between the Company and
+Management Board Members or Employees in the
+Case of a Change-of-Control Event
+Debt issued since 2007 contains change-of-control clauses that
+give the creditor the right of cancellation. This applies, inter
+alia, to bonds issued by E.ON International Finance B.V. and
+guaranteed by E.ON SE, promissory notes issued by E.ON SE,
+and other instruments such as credit contracts. Granting
+change-of-control rights to creditors is considered good corpo-
+rate governance and has become standard market practice.
+Further information about financial liabilities is contained in
+the section of the Combined Group Management Report
+entitled Financial Situation and in Note 26 to the Consolidated
+Financial Statements.
+to be sold and transferred against cash consideration
+Significant Agreements to Which the Company Is a
+Party That Take Effect on a Change of Control of the
+Company Following a Takeover Bid
+Scrip Dividend in 2015
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in
+the amount of €175 million, which is authorized until May 2,
+2017. The conditional capital increase will be implemented
+only to the extent required to fulfill the obligations arising on
+the exercise by holders of option or conversion rights, and
+those arising from compliance with the mandatory conversion
+of bonds with conversion or option rights, profit participation
+rights and income bonds that have been issued or guaranteed
+by E.ON SE or a Group company of E.ON SE as defined by
+Section 18 AktG, and to the extent that no cash settlement has
+been granted in lieu of conversion and no E.ON SE treasury
+shares or shares of another listed company have been used
+to service the rights. However, this conditional capital increase
+only applies up to the amount and number of shares in which
+the conditional capital pursuant to Section 3 of the Articles
+of Association of E.ON AG has not yet been implemented at
+the point in time when the conversion of E.ON AG into a Euro-
+pean Company ("SE") becomes effective in accordance with
+the conversion plan dated March 6, 2012. The conditional capital
+increase was not utilized.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 2, 2017, the Company's capital stock by a total of up
+to €460 million through one or more issuances of new regis-
+tered no-par-value shares against contributions in cash and/or
+in kind (with the option to restrict shareholders' subscription
+rights); such increase shall not, however, exceed the amount
+and number of shares in which the authorized capital pursu-
+ant to Section 3 of the Articles of Association of E.ON AG still
+exists at the point in time when the conversion of E.ON AG
+into a European Company ("SE") becomes effective pursuant to
+the conversion plan dated March 6, 2012 (authorized capital
+pursuant to Sections 202 et seq. AktG). Subject to the Super-
+visory Board's approval, the Management Board is authorized
+to exclude shareholders' subscription rights. The authorized
+capital increase was not utilized.
+In each case, the Management Board will inform the Share-
+holders Meeting about the reasons for and the purpose of
+the acquisition of treasury shares, the number of treasury
+shares acquired, the amount of the registered share capital
+attributable to them, the portion of the registered share capi-
+tal represented by them, and their equivalent value.
+Disclosures Regarding Takeovers
+74
+73
+In addition, the Management Board is authorized to cancel
+treasury shares, without such cancellation or its implemen-
+tation requiring an additional resolution by the Shareholders
+Meeting.
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, separately or collectively
+by the Company and also by Group companies or by third
+parties for the Company's account or its affiliates' account.
+to be offered for purchase and transferred to individuals
+who are employed by the Company or one of its affiliates.
+to be used in order to satisfy the rights of creditors of
+bonds with conversion or option rights or, respectively,
+conversion obligations issued by the Company or its
+Group companies
+In 2015 E.ON SE shareholders were again given the option of
+receiving their €0.50 dividend in cash or exchanging a portion
+of it for shares of E.ON SE stock. Shareholders could exchange
+€0.36 of their per share dividend. The remaining €0.14 was paid
+out in cash or, if necessary, withheld to cover tax obligations.
+Shareholders' formal subscription rights were excluded. The
+acceptance rate was about 37 percent. A total of 19,615,021
+shares of stock were used for the scrip dividend and issued
+to shareholders. A scrip dividend will not be offered in 2016.
+The share capital totals €2,001,000,000.00 and consists of
+2,001,000,000 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a
+Shareholders Meeting.
+Strategy and Objectives
+Disclosures Pursuant to Section 289, Paragraph 4,
+and Section 315, Paragraph 4, of the German Com-
+mercial Code
+E.ON Group companies are responsible for preparing their
+financial statements in a proper and timely manner. They
+receive substantial support from Business Service Centers in
+Regensburg, Germany, and Cluj, Romania. The financial state-
+ments of subsidiaries belonging to E.ON's scope of consolida-
+tion are audited by the subsidiaries' respective independent
+auditor. E.ON SE then combines these statements into its Con-
+solidated Financial Statements using uniform SAP consolidation
+software. The E.ON Center of Competence for Consolidation
+is responsible for conducting the consolidation and for moni-
+toring adherence to guidelines for scheduling, processes, and
+contents. Monitoring of system-based automated controls is
+supplemented by manual checks.
+All companies included in the Consolidated Financial Statements
+must comply with our uniform Accounting and Reporting
+Guidelines for the Annual Consolidated Financial Statements
+and the Interim Consolidated Financial Statements. These
+guidelines describe applicable IFRS accounting and valuation
+principles. They also explain accounting principles typical in
+the E.ON Group, such as those for provisions for nuclear-waste
+management and the treatment of regulatory obligations.
+We continually analyze amendments to laws, new or amended
+accounting standards, and other pronouncements for their
+relevance to and consequences for our Consolidated Financial
+Statements and, if necessary, update our guidelines and sys-
+tems accordingly.
+Accounting Process
+We prepare a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the German
+Energy Act.
+We apply Section 315a (1) of the German Commercial Code and
+prepare our Consolidated Financial Statements in accordance
+with International Financial Reporting Standards ("IFRS") and
+the interpretations of the International Financial Reporting
+Interpretations Committee that were adopted by the European
+Commission for use in the EU as of the end of the fiscal year
+and whose application was mandatory as of the balance-sheet
+date (see Note 1 to the Consolidated Financial Statements).
+Our global units and certain of our regional units are our IFRS
+reportable segments.
+General Principles
+Disclosures Pursuant to Section 289, Paragraph 5,
+and Section 315, Paragraph 2, Item 5, of the German
+Commercial Code on the Internal Control System
+for the Accounting Process
+70 Internal Control System for the Accounting Process
+69
+In addition, the ongoing optimization of gas transport and stor-
+age rights, long-term gas supply contracts, and the availability
+and utilization of our power and gas facilities (shorter project
+timelines or shorter facility outages) could yield opportunities.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information is compiled. Further-
+more, dedicated quality-control processes are in place for all
+relevant departments to discuss and ensure the completeness
+of relevant information on a regular basis.
+We combined our European trading operations at the start of
+2008. This enables us to seize opportunities created by the
+increasing integration of European power and gas markets
+and of commodity markets, which are already global in scope.
+For example, in view of market developments in the United
+Kingdom and Continental Europe, trading at European gas hubs
+can create additional sales and procurement opportunities.
+The EU internal energy market was supposed to be completed
+in 2014 and serve as the first step toward a long-term Euro-
+pean energy strategy. Nevertheless, many member states are
+pursuing their own agenda, aspects of which are not compatible
+with EU policy objectives. An example of this is the different
+approaches member states are taking with regard to capacity
+markets. We believe that European market integration is cur-
+rently being accompanied by the development of markets that
+have strong national orientation. This could lead to a situation
+in which E.ON, which operates across Europe, can look for
+new opportunities in a fragmented regulatory environment.
+Changes in our regulatory environment could create opportu-
+nities. Market developments could also have a positive impact
+on our business. Such factors include wholesale and retail price
+developments and higher customer churn rates.
+E.ON has filed a suit for damages against the states of Lower
+Saxony and Bavaria and against the Federal Republic of
+Germany for the nuclear-energy moratorium that was ordered
+following the reactor accident in Fukushima. The suit, which
+was filed with the Hanover State Court, seeks approximately
+€380 million in damages which E.ON incurred when, in
+March 2011, Unterweser and Isar 1 NPPs were required to tem-
+porarily suspend operations for several months until the
+thirteenth amended version of the Atomic Energy Act, which
+specifies the modalities for Germany's accelerated phaseout
+of nuclear energy, took effect.
+The reactor accident in Fukushima led the political parties in
+Germany's coalition government to reverse their policy
+regarding nuclear energy. After extending the operating lives
+of nuclear power plants ("NPPs") in the fall of 2010 in line
+with the stipulations of that government's coalition agreement,
+the federal government rescinded the extensions in the
+thirteenth amended version of Germany's Atomic Energy Act
+("the Act") and established a number of stricter rules. E.ON
+considers the nuclear phaseout, under the current legislation,
+to be irreconcilable with our constitutionally protected right
+to property and right to operate a business. It is our view that
+such an intervention is unconstitutional unless compensation
+is granted for the rights so deprived and for the resulting
+stranded assets. Consequently, in mid-November 2011 E.ON
+filed a constitutional complaint against the thirteenth amend-
+ment of the Act to Germany's Federal Constitutional Court
+in Karlsruhe. We believe that the nuclear-fuel tax contravenes
+Germany's constitution and European law. E.ON is therefore
+instituting administrative proceedings and taking legal action
+against the tax as well. Our view was affirmed by the Hamburg
+Fiscal Court and the Munich Fiscal Court. After the German
+Federal Fiscal Court overturned the suspension of the tax, in
+June 2015 the European Court of Justice ruled, with regard to
+the matters placed before it, that the tax complies with Euro-
+pean law. The German Federal Constitutional Court has not
+yet issued its final ruling.
+We conduct a bottom-up process at half-yearly intervals (at
+the end of the second and fourth quarters) in which the lead
+companies of our units in and outside Germany as well as
+certain E.ON SE departments follow Group-wide guidelines to
+identify and report opportunities that they deem sufficiently
+concrete and substantial. An opportunity is substantial within
+the meaning of our guidelines if it could have a significant
+positive effect on the asset, financial, or earnings situation of
+E.ON companies and/or segments.
+Opportunity Report
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The Board of Management and the Supervisory Board further-
+more declare that E.ON SE has been in compliance in full with
+the recommendations of the "Government Commission German
+Corporate Governance Code," dated June 24, 2014, published
+by the Federal Ministry of Justice in the official section of the
+Federal Gazette (Bundesanzeiger) since the last declaration
+on December 15, 2014.
+Positive developments in foreign-currency rates and market
+prices for commodities (electricity, natural gas, coal, oil, and
+carbon) can create opportunities for our operating business.
+Periods of exceptionally cold weather-very low average tem-
+peratures or extreme daily lows-in the fall and winter months
+can create opportunities for us to meet higher demand for
+electricity and natural gas.
+E.ON SE's Financial Statements are also prepared with SAP
+software. The accounting and preparation processes are divided
+into discrete functional steps. We transferred bookkeeping
+processes to our Business Service Centers: processes relating
+to subsidiary ledgers and bank activities were transferred to
+Cluj, those relating to the general ledgers to Regensburg.
+Automated or manual controls are integrated into each step.
+Defined procedures ensure that all transactions and the
+preparation of E.ON SE's Financial Statements are recorded,
+processed, assigned on an accrual basis, and documented in
+a complete, timely, and accurate manner. Relevant data from
+E.ON SE's Financial Statements are, if necessary, adjusted to
+conform with IFRS and then transferred to the consolidation
+software system using SAP-supported transfer technology.
+The following explanations about our Internal Control System
+and our general IT controls apply to the Consolidated Financial
+Statements and E.ON SE's Financial Statements.
+Internal Control and Risk Management System
+Internal controls are an integral part of our accounting pro-
+cesses. Guidelines, called Internal_Controls@E.ON, define
+uniform financial-reporting requirements and procedures for
+the entire E.ON Group. These guidelines encompass a defi-
+nition of the guidelines' scope of application; a Risk Catalog
+(ICS Model); standards for establishing, documenting, and
+evaluating internal controls; a Catalog of ICS Principles; a
+description of the test activities of our Internal Audit division;
+and a description of the final Sign-Off process. We believe
+that compliance with these rules provides sufficient certainty
+to prevent error or fraud from resulting in material misrep-
+resentations in the Consolidated Financial Statements, the
+Combined Group Management Report, and the Interim Reports.
+72 Disclosures Regarding Takeovers
+An E.ON unit called E.ON Business Services and external ser-
+vice providers provide IT services for the majority of the units
+at the E.ON Group. The effectiveness of the automated controls
+in the standard accounting software systems and in key
+additional applications depends to a considerable degree on
+the proper functioning of IT systems. Consequently, IT controls
+are embedded in our documentation system. These controls
+primarily involve ensuring the proper functioning of access-
+control mechanisms of systems and applications, of daily IT
+operations (such as emergency measures), of the program
+change process, and of E.ON SE's central consolidation system.
+General IT Controls
+Internal Audit regularly informs the E.ON SE Supervisory
+Board's Audit and Risk Committee about the internal control
+system for financial reporting and any significant issue areas
+it identifies in the E.ON Group's various processes.
+The final step of the internal evaluation process is the sub-
+mission of a formal written declaration called a Sign-Off
+confirming the effectiveness of the internal control system.
+The Sign-Off process is conducted at all levels of the Group
+before it is conducted by the global and regional units and,
+finally, for the Group as a whole, by E.ON SE. The Chairman
+of the E.ON SE Management Board and the Chief Financial
+Officer make the final Sign-Off for the E.ON Group.
+Sign-Off Process
+Internal Audit tests the E.ON Group's internal control system
+and identifies potential deficiencies (issues). On the basis
+of its own evaluation and the results of tests performed by
+Internal Audit, an E.ON unit's management carries out the
+final Sign-Off.
+The management of E.ON units relies on the assessment per-
+formed by the process owners and on testing of the internal
+control system performed by Internal Audit. These tests are a
+key part of the process. Using a risk-oriented audit plan,
+Tests Performed by Internal Audit
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment
+of the design and the operational effectiveness of the pro-
+cesses as well as the controls embedded in these processes.
+Assessment
+The E.ON units to which the internal control system applies
+use a central documentation system to document key controls.
+The system defines the scope, detailed documentation require-
+ments, the assessment requirements for process owners, and
+the final Sign-Off process.
+Central Documentation System
+Each year, we conduct a process using qualitative criteria and
+quantitative materiality metrics to define which E.ON units
+must document and evaluate their financial-reporting-related
+processes and controls in a central documentation system.
+Scope
+The Catalog of ICS Principles is a key component of our internal
+control system, defining the minimum requirements for the
+system to function. It encompasses overarching principles for
+matters such as authorization, segregation of duties, and
+master data management as well as specific requirements for
+managing risks in a range of issue areas and processes, such
+as accounting, financial reporting, communications, planning
+and controlling, and risk management.
+Our internal control system is based on the globally recog-
+nized COSO framework, in the version published in May 2013
+(COSO: The Committee of Sponsoring Organizations of the
+Treadway Commission). The Central Risk Catalog (ICS Model),
+which encompasses company- and industry-specific aspects,
+defines possible risks for accounting (financial reporting) in
+the functional areas of our units and thus serves as a check
+list and provides guidance for the establishment and documen-
+tation of internal controls.
+COSO Framework
+71
+F
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Composition of Share Capital
+In 2015 the Management Board and Supervisory Board paid
+close attention to E.ON's compliance with the German Corpo-
+rate Governance Code's recommendations and suggestions.
+They determined that E.ON fully complies with all of the Code's
+recommendations and with nearly all of its suggestions.
+Report of the Supervisory Board
+Transparency is a high priority of E.ON SE's Management Board
+and Supervisory Board. Our shareholders, all capital market
+participants, financial analysts, shareholder associations, and
+the media regularly receive up-to-date information about
+the situation of, and any material changes to, the Company. We
+primarily use the Internet to help ensure that all investors
+have equal access to comprehensive and timely information
+about the Company.
+6/6
+Clive Broutta
+3/3
+3/3
+3/3
+3/3
+Andreas Scheidt
+Erhard Ott
+6/6
+6/6
+Finance and Investment
+Committee
+4/4
+Thies Hansen
+Audit and Risk
+Committee
+5/5
+6/6
+Supervisory Board Executive Committee
+Prof. Dr. Ulrich Lehner
+Werner Wenning
+Supervisory Board member
+Overview of the Attendance of Supervisory Board Members at Meetings
+of the Supervisory Board and Its Committees
+Furthermore, the Supervisory Board's policies and procedures
+gave it the option, if necessary, of holding executive sessions;
+that is, to meet without the Chairman
+Management Board. In the event of a tie vote on the Super-
+visory Board, the Chairperson has the tie-breaking vote.
+The Supervisory Board has established policies and procedures
+for itself. It holds four regular meetings in each financial year.
+Its policies and procedures include mechanisms by which, if
+necessary, a meeting of the Supervisory Board or one of its
+committees can be called at any time by a member or by the
+Corporate Governance Report
+78
+6/6
+6/6
+4/4
+Baroness Denise Kingsmill CBE
+Transparent Management
+As a general rule, Supervisory Board members should not be
+older than 72 at the time of their election and should not be
+members for more than three terms (15 years).
+Each Supervisory Board member must have sufficient time
+available to perform his or her duties on the boards of various
+E.ON companies. Persons who are members of the board of
+management of a listed company shall therefore only be eligi-
+ble as members of E.ON's Supervisory Board if they do not sit
+on more than three supervisory boards of listed non-Group
+companies or in comparable supervisory bodies of non-Group
+companies.
+The Supervisory Board should not include more than two
+former members of the Management Board, and members of
+the Supervisory Board must not sit on the boards of, or act
+as consultants for, any of the Company's major competitors.
+The Supervisory Board should include a sufficient number of
+independent candidates; members are deemed independent
+if they do not have any personal or business relationship with
+the Company, its Management Board, a shareholder with a
+controlling interest in the Company, or with a company affiliated
+with such a shareholder, and such a relationship could consti-
+tute a material, and not merely temporary, conflict of interest.
+The Supervisory Board has a sufficient number of independent
+members if ten of its twelve members are independent. Employee
+representatives are, as a rule, deemed independent.
+"The Supervisory Board's composition should ensure that, on
+balance, its members have the necessary expertise, skills,
+and professional experience to discharge their duties properly.
+Each Supervisory Board member should have or acquire the
+minimum expertise and skills needed to be able to understand
+and assess on his or her own all the business events and
+transactions that generally occur.
+In view of Item 5.4.1 of the German Corporate Governance
+Code, in December 2015 the Supervisory Board defined tar-
+gets for its composition that go beyond the applicable legal
+requirements. These targets are as follows:
+5/5
+6/6
+4/4
+6/6
+Dr. Theo Siegert
+Dr. Karen de Segundo
+5/5
+6/6
+Fred Schulz
+5/5
+6/6
+6/6
+Eberhard Schomburg
+René Obermann
+4/4
+6/6
+Eugen-Gheorghe Luha
+4/6
+77
+The Supervisory Board oversees the Company's management
+and advises the Management Board on an ongoing basis.
+The Board of Management requires the Supervisory Board's
+prior approval for significant transactions or measures, such
+as the Group's investment, finance, and personnel plans; the
+acquisition or sale of companies, equity interests, or parts of
+companies whose value exceeds €500 million or 2.5 percent of
+stockholders' equity as shown in the most recent Consolidated
+Balance Sheets; financing measures that exceed 5 percent of
+stockholders' equity as shown in the most recent Consolidated
+Balance Sheets and have not been covered by Supervisory
+Board resolutions regarding finance plans; and the conclusion,
+amendment, or termination of affiliation agreements. The
+Supervisory Board examines the Financial Statements of
+E.ON SE, the Management Report, and the proposal for profit
+appropriation and, on the basis of the Audit and Risk Com-
+mittee's preliminary review, the Consolidated Financial State-
+ments and the Combined Group Management Report. The
+Supervisory Board provides to the Annual Shareholders
+Meeting a written report on the results of this examination.
+6/6
+were a member of the Company's Management Board in
+the past two years, unless the person concerned is nomi-
+nated by shareholders who hold more than 25 percent of
+the Company's voting rights.
+The financial calendar and ad hoc statements are available
+on the Internet at www.eon.com.
+In addition to the Company's periodic financial reports, the
+Company issues ad hoc statements when events or changes
+occur at E.ON SE that could have a significant impact on the
+price of E.ON stock.
+A financial calendar lists the dates on which the Company's
+financial reports are released.
+Numerous events for financial analysts in and outside
+Germany.
+Interim Reports and the Annual Report
+Telephone conferences held on release of the quarterly
+Press releases
+•
+E.ON views good corporate governance as a central founda-
+tion of responsible and value-oriented management, efficient
+collaboration between the Management Board and the
+Supervisory Board, transparent disclosures, and appropriate
+risk management.
+Relevant Information about Management Practices
+Corporate Governance
+The declaration is continuously available to the public on the
+Company's Internet page at www.eon.com.
+75
+(Chairman of the Management Board of E.ON SE)
+Werner Wenning
+For the Supervisory Board of E.ON SE
+Düsseldorf, December 15, 2015
+Annual press conference
+•
+Annual Report
+•
+Interim Reports
+•
+At least one independent member of the Supervisory Board
+must have expertise in preparing or auditing financial state-
+ments. The Supervisory Board believes that Werner Wenning
+and Dr. Theo Siegert meet this requirement.
+E.ON SE issues reports about its situation and earnings by
+the following means:
+For the Management Board of E.ON SE
+Dr. Johannes Teyssen
+76
+(Chairman of the Supervisory Board of E.ON SE)
+Directors' Dealings
+are legal representatives of an enterprise controlled by
+the Company
+Corporate Governance Report
+are already supervisory board members in ten commercial
+companies that are required by law to form a supervisory
+board
+E.ON SE or one of its subsidiaries in Germany. Persons are
+not eligible as Supervisory Board members if they:
+member is selected by a trade union that is represented at
+The E.ON SE Supervisory Board has twelve members and, in
+accordance with the Company's Articles of Association, is
+composed of an equal number of shareholder and employee
+representatives. The shareholder representatives are elected
+by the shareholders at the Annual Shareholders Meeting; the
+Supervisory Board nominates candidates for this purpose.
+Pursuant to the agreement regarding employees' involvement
+in E.ON SE, the other six members of the Supervisory Board
+are appointed by the SE Works Council, with the proviso that
+at least three different countries are represented and one
+Supervisory Board
+A Risk Committee ensures the correct application and implemen-
+tation of the legal requirements of Section 91 of the German
+Stock Corporation Act ("AktG"). This committee monitors the
+E.ON Group's risk situation and its risk-bearing capacity and
+devotes particular attention to the early-warning system to
+ensure the early identification of going-concern risks to avoid
+developments that could potentially threaten the Group's
+continued existence. In collaboration with relevant departments,
+the committee ensures and refines the implementation of,
+and compliance with, the reporting policies enacted by the
+Management Board with regard to commodity risks, credit
+risks, and enterprise risk management.
+A Disclosure Committee supports the Management Board on
+issues relating to financial disclosures and ensures that such
+information is disclosed in a correct and timely fashion.
+In addition, the Management Board has established a number
+of committees that support it in the fulfillment of its tasks. The
+members of these committees are senior representatives of
+various departments of E.ON SE whose experience, responsi-
+bilities, and expertise make them particularly suited for their
+committee's tasks. Among these committees are the following:
+Consolidated Financial Statements
+Tables and Explanations
+Combined Group Management Report
+Until December 31, 2015, a Market Committee ensured that E.ON,
+across all its entities and in a timely manner, adopted clear
+and unequivocal policies and assigned clear mandates for
+monitoring market developments and managing its commodity
+portfolio (power, gas, coal, and so forth). The committee thus
+managed the portfolio's risk-reward profile in pursuance of
+the E.ON Group's strategic and financial objectives. Effective
+January 1, 2016, this committee's main responsibilities were
+transferred to the Risk Committee.
+E.ON Stock
+Persons with executive responsibilities, in particular members
+of E.ON SE's Management Board and Supervisory Board, and
+persons closely related to them, must disclose their dealings
+in E.ON stock or in related financial instruments pursuant to
+Section 15a of the German Securities Trading Act. Such dealings
+that took place in 2015 have been disclosed on the Internet at
+www.eon.com. As of December 31, 2015, there was no owner-
+ship interest subject to disclosure pursuant to Item 6.2 of the
+German Corporate Governance Code.
+Integrity
+Strategy and Objectives
+Our actions are grounded in integrity and a respect for the law.
+The basis for this is the Code of Conduct established by the
+Management Board and confirmed in 2013. It emphasizes
+that all employees must comply with laws and regulations and
+with Company policies. These relate to dealing with business
+partners, third parties, and government institutions, particularly
+with regard to antitrust law, the granting and accepting of
+benefits, the involvement of intermediaries, and the selection
+of suppliers and service providers. Other rules address issues
+such as the avoidance of conflicts of interest (such as the pro-
+hibition to compete, secondary employment, material financial
+investments) and handling company information, property,
+and resources. The policies and procedures of our compliance
+organization ensure the investigation, evaluation, cessation, and
+punishment of reported violations by the appropriate Com-
+pliance Officers and the E.ON Group's Chief Compliance Officer.
+Violations of the Code of Conduct can also be reported
+anonymously (for example, by means of a whistleblower report).
+The Code of Conduct is published on www.eon.com.
+Description of the Functioning of the Management
+Board and Supervisory Board and of the Composition
+and Functioning of Their Committees
+Management Board
+The E.ON SE Management Board manages the Company's
+businesses, with all its members bearing joint responsibility
+for its decisions. It establishes the Company's objectives,
+sets its fundamental strategic direction, and is responsible
+for corporate policy and Group organization.
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Board of Management
+The Management Board regularly reports to the Supervisory
+Board on a timely and comprehensive basis on all relevant
+issues of strategy, planning, business development, risk situa-
+tion, risk management, and compliance. It also submits the
+Group's investment, finance, and personnel plan for the coming
+financial year as well as the medium-term plan to the Super-
+visory Board for its approval, generally at the last meeting of
+each financial year.
+The Chairperson of the Management Board informs, without
+undue delay, the Chairperson of the Supervisory Board of
+important events that are of fundamental significance in
+assessing the Company's situation, development, and manage-
+ment and of any defects that have arisen in the Company's
+monitoring systems. Transactions and measures requiring
+the Supervisory Board's approval are also submitted to the
+Supervisory Board in a timely manner.
+Members of the Management Board are also required to
+promptly report conflicts of interest to the Executive Committee
+of the Supervisory Board and to inform the other members
+of the Management Board. Members of the Management Board
+may only assume other corporate positions, particularly
+appointments to the supervisory boards of non-Group com-
+panies, with the consent of the Executive Committee of the
+Supervisory Board. There were no conflicts of interest involving
+members of the E.ON SE Management Board in 2015. Any
+material transactions between the Company and members
+of the Management Board, their relatives, or entities with
+which they have close personal ties require the consent of
+the Executive Committee of the Supervisory Board. No such
+transactions took place in 2015.
+Effective January 1, 2016, the Management Board consists of
+four members and has one Chairperson. Someone who has
+reached the general retirement age should not be a member
+of the Management Board. The Management Board has in
+place policies and procedures for the business it conducts and,
+in consultation with the Supervisory Board, has assigned task
+areas to its members.
+CEO Letter
+1,790,082
+871,950
+Jørgen Kildahl³ (until September 30, 2015)
+735,355
+369,157
+49,964
+1,144,001
+1,048,667
+97,990
+Dr.-Ing. Leonhard Birnbaum
+2,112,189
+84,988
+41,902
+57,032
+405,111
+40,880
+991,915
+44,022
+1,965,600
+775,000
+Michael Sen (since June 1, 2015)
+544,499
+-66,072
+858,000
+Klaus Schäfer 3,4 (until December 31, 2015)
+988,427
+183,067
+40,472
+46,662
+852,420
+936,000
+Dr. Bernhard Reutersberg
+-457,885
+Dr. Johannes Teyssen
+Pursuant to the provisions of the German Occupational Pensions
+Improvement Act, Management Board members' pension
+entitlements are not vested until they have been in effect for
+five years. This applies to both contribution-based and final-
+salary-based pension plans.
+2015
+The service agreements of Management Board members
+include a non-compete clause. For a period of six months after
+the termination of their service agreement, Management
+Board members are contractually prohibited from working
+directly or indirectly for a company that competes directly
+or indirectly with the Company or its affiliates. Management
+Board members receive a compensation payment for the
+period of the non-compete restriction. The prorated payment
+is based on 100 percent of their contractually stipulated
+annual target compensation (without long-term variable com-
+pensation) but is, at a minimum, 60 percent of their most
+recently received compensation.
+In the event of a premature loss of a Management Board
+position due to a change-of-control event, Management Board
+members are entitled to settlement payments. The change-
+of-control agreements stipulate that a change in control exists
+in three cases: a third party acquires at least 30 percent of
+the Company's voting rights, thus triggering the automatic
+requirement to make an offer for the Company pursuant to
+Germany's Stock Corporation Takeover Law; the Company, as
+a dependent entity, concludes a corporate agreement; the
+Company is merged with another company. Management Board
+members are entitled to a settlement payment if, within
+12 months of the change of control, their service agreement
+is terminated by mutual consent, expires, or is terminated by
+them (in the latter case, however, only if their position on the
+Management Board is materially affected by the change in
+control). Management Board members' settlement payment
+consists of their base salary and target bonus plus fringe
+benefits for two years. To reflect discounting and setting off
+of payment for services rendered to other companies or
+organizations, payments will be reduced by 20 percent. If a
+Management Board member is above the age of 53, this
+20-percent reduction is diminished incrementally. In accordance
+with the German Corporate Governance Code, the settlement
+payments for Management Board members would be equal to
+150 percent of the above-described settlement cap.
+In line with the German Corporate Governance Code's recom-
+mendation, the service agreements of Management Board
+members include a settlement cap. Under the cap, settlement
+payments in conjunction with a termination of Management
+Board duties may not exceed the value of two years' total
+compensation or the total compensation for the remainder
+of the member's service agreement.
+Settlement Payments for Termination of Management
+Board Duties
+In line with the German Corporate Governance Code's recom-
+mendation, the Supervisory Board reviews, on a regular basis,
+the benefits level of Management Board members and the
+resulting annual and long-term expense and, if necessary,
+adjusts the payments.
+Annual pension payments are initially equal to 60 percent of
+a Management Board member's respective last annual base
+salary. In the case of additional years of service on the Manage-
+ment Board, the payment can increase to a maximum of
+70 percent or, in Dr. Teyssen's case, 75 percent. The full amount
+of any pension entitlements from earlier employment is offset
+against these payments. In addition, the pension plan includes
+benefits for widows and widowers and for surviving children
+that are equal to 60 percent and 15 percent, respectively, of
+the deceased Management Board member's pension entitle-
+ment. Together, pension payments to a widow or widower and
+children may not exceed 100 percent of the deceased Manage-
+ment Board member's pension.
+CEO Letter
+this situation are met if the termination or non-extension of
+Dr. Teyssen's service agreement is not due to his misconduct or
+rejection of an offer of extension that is at least on a par with
+his existing service agreement. In the third pension situation,
+Dr. Teyssen would receive an early pension as a transitional
+arrangement until he reaches the age of 60.
+86
+85
+The Company has agreed to a pension plan based on final
+salary for the Management Board members who were
+appointed to the Management Board before 2010: Dr. Teyssen
+and Dr. Reutersberg. Following the end of their service for
+the Company, these Management Board members are entitled
+to receive lifelong monthly pension payments in three cases:
+reaching the age of 60, permanent incapacitation, and a
+so-called third pension situation. The provisions of the third
+pension situation only apply to Dr. Teyssen. The criteria for
+Mr. Schäfer and Mr. Winkel's previous pensions were transferred
+into the contribution-based plan. Their benefit entitlements
+acquired prior to joining the Management Board (which were
+based on their final salary) were translated into capital con-
+tributions. The Supervisory Board agreed to a transitional
+arrangement with Mr. Schäfer and Mr. Winkel. If their service
+agreement is not extended they will receive transitional com-
+pensation based on their employment contracts but linked to
+their base pay prior to joining the Management Board. In
+addition, in the case of pension benefits being due, Mr. Schäfer
+or his survivors may, for a limited time, choose between the
+above-described contribution-based pension plan and the
+pension plan based on final salary prior to joining the Manage-
+ment Board. In the case of reappointment to the E.ON Manage-
+ment Board, these interim arrangements are void.
+long-term German treasury notes. At the age of 62 at the
+earliest, a Management Board member (or his survivors) may
+choose to have the pension account balance paid out as a
+lifelong pension, in installments, or in a lump sum. Individual
+Management Board members' actual resulting pension entitle-
+ment cannot be calculated precisely in advance. It depends
+on a number of uncertain parameters, in particular the changes
+in their individual salary, their total years of service, the attain-
+ment of company targets, and interest rates. For a Manage-
+ment Board member enrolled in the plan at the age of 50, the
+company-financed, contribution-based pension payment is
+currently estimated to be between 30 and 35 percent of his
+or her base salary (without factoring in pension benefits
+accrued prior to being appointed to the Management Board).
+245,229
+Corporate Governance Report
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+2014
+2015
+2014
+2015
+Cumulative expense (+)/
+income (-)²
+Number of virtual
+shares granted
+Value of virtual shares
+at time of granting¹
+The long-term variable compensation of Management Board
+members resulted in the following expenses in 2015:
+The Supervisory Board issued a new tranche of the E.ON
+Share Matching Plan (2015-2019) for the 2015 financial year
+and granted Management Board members virtual shares of
+E.ON stock. The present value assigned to the virtual shares
+of E.ON stock at the time of granting-€13.63 per share-is
+shown in the following tables entitled "Stock-based Compen-
+sation" and "Total Compensation." The value performance of
+this tranche will be determined by the performance of E.ON
+stock, the per-share dividends, and ROACE of the next four
+years. The actual payments made to Management Board
+members in 2019 may deviate, under certain circumstances
+considerably, from the calculated figures disclosed here.
+Stock-based Compensation
+The annual bonuses of Management Board members for 2015
+totaled €4.6 million, which is about 6 percent below the prior-
+year figure of €4.9 million. The decline is primarily attributable
+to changes in the Management Board's composition in 2015.
+Performance-Based Compensation in 2015
+The Supervisory Board reviewed the Management Board's
+compensation plan and the components of individual members'
+compensation. It determined that the Management Board's
+compensation is appropriate from both a horizontal and vertical
+perspective and passed a resolution on the performance-based
+compensation described below. It made its determination
+of customariness from a horizontal perspective by comparing
+the compensation with that of companies of a similar size.
+Its review of appropriateness included a vertical comparison
+of the Management Board's compensation with that of the
+Company's top management and the rest of its workforce. In
+the Supervisory Board's view, in 2015 there was no reason to
+adjust the Management Board's compensation.
+Management Board Compensation in 2015
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+2014
+Mike Winkel³ (until May 31, 2015)
+Klaus Schäfer1,2
+40,880
+346,559 25,531
+410,247 263,766
+293,619
+263,766
+490,000
+490,000
+70
+70
+43,747 1,497,801 1,702,035
+410,247 11,550,766 13,188,286
+Dr. Bernhard Reutersberg
+Jørgen Kildahl¹
+606,883 20,696,284 22,991,882
+6,376 979,798 768,503
+2014
+2015
+2014
+2015
+459,838
+15,370
+(until September 30, 2015)
+The Company makes virtual contributions to Management
+Board members' pension accounts. The maximum amount of
+the annual contributions is a equal to 18 percent of pension-
+able income (base salary and annual bonus). The annual con-
+tribution consists of a fixed base percentage (14 percent) and
+a matching contribution (4 percent). The requirement for the
+matching contribution to be granted is that the Management
+Board member contributes, at a minimum, the same amount
+by having it withheld from his compensation. The company-
+funded matching contribution is suspended if and as long as
+the E.ON Group's ROACE is less than its cost of capital for
+three years in a row. The contributions are capitalized using
+actuarial principles (based on a standard retirement age of 62)
+and placed in Management Board members' pension accounts.
+The interest rate used for each year is based on the return of
+(until December 31, 2015)
+Michael Sen¹ (since June 1, 2015)
+Mr. Winkel's service agreement was terminated by mutual con-
+sent effective May 31, 2015. He received a payment of €1,358,333
+in compensation for residual claims under this agreement.
+The performance rights and virtual shares granted to Mr. Winkel
+remain valid and will be calculated and paid out at the end
+of the respective vesting periods. Because of the termination
+of his service agreement the Company made available to
+Mr. Winkel the contributions to his company pension for the
+period June to December 2015 in the amount of €168,000.
+Beginning on April 1, 2016, Mr. Winkel is entitled to payment
+of a reduced pension. Fifty percent of all other income from
+self-employment and employment will be set off against this
+reduced pension. Mr. Winkel's non-compete clause was extended
+to cover the period June 1, 2015, to March 31, 2016. The Com-
+pany did not make a compensation payment to Mr. Winkel
+because his non-compete clause is covered by the payment
+he received for residual claims under his service agreement.
+In view of E.ON's corporate transformation, Mr. Winkel,
+Mr. Kildahl, and Mr. Schäfer ended their service on the E.ON
+SE Management Board by mutual consent. At year-end 2015
+Mr. Schäfer became Chairman of the Uniper AG Management
+Board. The Company concluded severance agreements with
+all three.
+The total compensation of the members of the Management
+Board in the 2015 financial year amounted to €15.6 million,
+about 4 percent below the prior-year figure of €16.2 million.
+Total Compensation in 2015
+The cash value of Management Board pensions for which
+provisions are required declined relative to year-end 2014.
+The reason for the decline is that the actuarial interest rate
+E.ON uses for discounting was significantly above the prior-
+year figure.
+²Cash value includes benefit entitlements accrued in the E.ON Group prior to joining the Management Board.
+¹Contribution Plan E.ON Management Board.
+100,307 3,535,530 4,072,393
+181,808
+1,789,098 3,756,844
+81,144
+31,307
+207,066
+81,448
+253,183
+306,739
+181,808
+119,340
+Mike Winkel12 (until May 31, 2015)
+930,000 1,355,305 1,249,640
+504,474 286,783
+Dr.-Ing. Leonhard Birnbaum¹
+2014
+2015
+Management Board Pensions in 2015
+88 Corporate Governance Report
+87
+Long-term variable compensation granted for the 2015 financial
+year totaled €4.8 million, substantially less than the prior-year
+figure of €6.3 million, in particular because of the changes in
+the composition of the Management Board. Note 11 to the
+Consolidated Financial Statements contains additional details
+about stock-based compensation.
+"Because Mr. Schäfer became Chairman of the Uniper AG Management Board at the end of the 2015 financial year, Uniper AG granted Mr. Schäfer a multiyear bonus for 2015
+in the amount of €636,000. The multiyear bonus system is explained on page 138 et seq. of the Consolidated Financial Statements.
+¹Consists of the LTI component (based on the target bonus) for the respective financial year for which at the time of granting no amount of shares can be determined.
+2Expense/income in accordance with IFRS 2 performance rights and virtual shares existing in the 2015 financial year; this figure shown is net across all existing tranches.
+3Mr. Kildahl, Mr. Schäfer, and Mr. Winkel were not allocated, from base or performance matching, any additional virtual E.ON shares for 2015. They will be paid the LTI component
+of their 2015 bonus as part of their 2015 bonus.
+6,043,916
+593,260
+299,086
+245,706
+6,279,119
+4,820,601
+Total
+671,531
+-85,347
+The following table provides an overview of the current pension
+obligations to Management Board members, the additions
+to provisions for pensions, and the cash value of pension
+obligations. The cash value of pension obligations is calculated
+pursuant to IFRS. An actuarial interest rate of 2.7 percent (prior
+year: 2 percent) was used for discounting.
+858,000
+Pensions of the Members of the Management Board
+Current pension entitlement at December 31
+As a percentage of
+(€)
+(€)
+(€)
+2014
+2015
+930,000
+75
+75
+2014
+2015
+(€)
+Dr. Johannes Teyssen
+Thereof interest cost
+annual base
+compensation
+December 31
+Additions to provisions for pensions
+Cash value at
+account
+0%
+Term in years
+Bonus
+Base salary 30%
+Compensation Structure¹
+The compensation of Management Board members consists
+of a fixed base salary, an annual bonus, and long-term variable
+remuneration. These components account for approximately
+the following percentages of total compensation:
+The Supervisory Board approves the Executive Committee's
+proposal for the Management Board's compensation plan. It
+reviews the plan and the appropriateness of the Management
+Board's total compensation as well as the individual compo-
+nents on a regular basis and, if necessary, makes adjustments.
+It considers the provisions of the German Stock Corporation
+Act and follows the German Corporate Governance Code's
+recommendations and suggestions.
+The purpose of the Management Board compensation plan,
+which was last revised in 2013, is to create an incentive for
+successful and sustainable corporate governance and to link
+the compensation of Management Board members' with the
+Company's actual (short-term and long-term) performance
+while also factoring in their individual performance. Under the
+plan, Management Board members' compensation is there-
+fore transparent, performance-based, closely aligned with the
+Company's business success, and, in particular, based on
+long-term targets. At the same time, the compensation plan
+serves to align management's and shareholders' interests
+and objectives by basing long-term variable compensation
+on E.ON's stock price.
+(annual) 27% -
+Basic Features of the Management Board Compen-
+sation Plan
+Compensation Report pursuant to Section 289,
+Paragraph 2, Item 5 and Section 315, Paragraph 2,
+Item 4 of the German Commercial Code
+Corporate Governance Report
+82
+81
+For all other E.ON Group companies, targets and deadlines
+pursuant to the Law for the Equal Participation of Women
+and Men in Leadership Positions in the Private Sector and
+the Public Sector were set for the proportion of women on
+these companies' supervisory board and management board
+or team of managing directors as well as in the next two
+levels of management. As required by law, these targets and
+deadlines were set by September 30, 2015
+For E.ON SE, the Management Board set a target of 23 percent
+for the proportion of women in the first level of management
+below the Management Board and a target of 17 percent
+for the second level of management below the Management
+Board. The deadline for achieving both targets is June 30, 2017.
+At the time the Management Board made these decisions,
+the proportion of women in first and second levels of manage-
+ment below the Management Board was 20 percent and 15 per-
+cent, respectively.
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Manage-
+ment Board and Supervisory Board and provides information
+about the compensation granted and paid in 2015. It applies
+the provisions of accounting standards for capital-market-
+oriented companies (the German Commercial Code, German
+Accounting Standards, and International Financial Reporting
+Standards) and the recommendations of the German Corpo-
+rate Governance Code dated May 5, 2015.
+Bonus
+(multi-year) 13%
+Long-term incentive
+(Share Matching Plan) 30%
+Base salary
+STI component
+Paid out
+2/3:
+Bonus
+Transferred into
+virtual shares
+Granting of
+virtual shares
+Granting of virtual
+shares based on
+return on capital
+LTI component
+1/3:
+Base Matching
+Share
+Matching
+Plan
+Performance
+Matching
+The following graphic provides an overview of the compen-
+sation plan for Management Board members:
+¹Not including non-cash compensation, other benefits, and pension benefits.
+In view of the fundamental organizational changes under way
+at the Company, the E.ON SE Supervisory Board set a short-
+term target of zero percent for the proportion of women on
+the Management Board and a deadline of December 31, 2016.
+This target reflects the Management Board's current com-
+position. When the Supervisory Board sets the next target at
+year-end 2016, however, it intends to stipulate that at least
+one position on the Management Board is held by a woman.
+CEO Letter
+The Law for the Equal Participation of Women and Men in
+Leadership Positions in the Private Sector and the Public Sec-
+tor of May 2015 obligates certain companies in Germany to
+set targets for the proportion of women on their supervisory
+board and management board as well as in the next two levels
+of management and to set deadlines for achieving these
+targets. The companies affected by the law were required to
+set their targets and deadlines by September 30, 2015. The
+law stipulates that the first deadline companies set cannot
+be later than June 30, 2017. The implementation period for
+subsequent deadlines may be up to five years. The law makes
+an exception for the supervisory board of a publicly listed
+company that is also subject to codetermination. The super-
+visory board of such a company, of which E.ON SE is one, must
+consist of at least 30 percent women and at least 30 percent
+men. This will be considered for new appointments to the
+E.ON SE Supervisory Board after January 1, 2016.
+At the Annual Shareholders Meeting on May 7, 2015, Price-
+waterhouseCoopers Aktiengesellschaft, Wirtschaftsprüfungs-
+gesellschaft, was selected to be E.ON SE's independent auditor
+for the 2015 financial year. Under German law, the shareholders
+meeting selects the company's independent auditor for one
+financial year. The independent auditors with signing authority
+for the Annual Financial Statements of E.ON SE and the Con-
+solidated Financial Statements are Markus Dittmann (since
+the 2014 financial year) and Aissata Touré (for the first time).
+E.ON therefore complies with the legal requirements and
+rotation obligations contained in Sections 319 and 319a of
+the German Commercial Code.
+The Audit and Risk Committee consists of four members. In
+line with Section 100, Paragraph 5, AktG, and the German
+Corporate Governance Code, the Chairperson has special
+knowledge and experience in the application of accounting
+principles and internal control processes. In particular, the
+Audit and Risk Committee monitors the Company's accounting
+and the accounting process; the effectiveness of internal
+control systems, internal risk management, and the internal
+The Executive Committee consists of four members: the Super-
+visory Board Chairperson, his or her two Deputies, and a further
+employee representative. It prepares the meetings of the
+Supervisory Board and advises the Management Board on
+matters of general policy relating to the Company's strategic
+development. In urgent cases (in other words, if waiting for the
+Supervisory Board's prior approval would materially prejudice
+the Company), the Executive Committee acts on the full Super-
+visory Board's behalf. In addition, a key task of the Executive
+Committee is to prepare the Supervisory Board's personnel
+decisions and resolutions for setting the respective total com-
+pensation of individual Management Board members within
+the meaning of Section 87, AktG. Furthermore, it is responsible
+for the conclusion, alteration, and termination of the service
+agreements of Management Board members and for presenting
+the Supervisory Board with a proposal for a resolution on
+the Management Board's compensation plan and its periodic
+review. It also deals with corporate-governance matters and
+reports to the Supervisory Board, generally once a year, on the
+status and effectiveness of, and possible ways of improving,
+the Company's corporate governance and on new requirements
+and developments in this area.
+The Supervisory Board has established the following committees
+and defined policies and procedures for them:
+of interest of a non-temporary nature should result in the
+termination of a member's appointment to the Supervisory
+Board. There were no conflicts of interest involving members
+of the Supervisory Board in 2015. Any consulting or other
+service agreements between the Company and a Supervisory
+Board member require the Supervisory Board's consent. No
+such agreements existed in 2015.
+In addition, under the Supervisory Board's policies and proce-
+dures, Supervisory Board members are required to disclose
+to the Supervisory Board any conflicts of interest, particularly
+if a conflict arises from their advising, or exercising a board
+function with, one of E.ON's customers, suppliers, creditors, or
+other third parties. The Supervisory Board reports any conflicts
+of interest to the Annual Shareholders Meeting and describes
+how the conflicts have been dealt with. Any material conflict
+In its current composition the Supervisory Board already meets
+the targets it set for a sufficient number of independent mem-
+bers and company-specific qualification requirements. The
+Supervisory Board has two female members among its share-
+holder representatives and, from January 1, 2016, one female
+member among its employee representatives. Women there-
+fore account for about 33 percent of shareholder represen-
+tatives, about 17 percent of employee representatives, and
+25 percent of the Supervisory Board as a whole.
+79
+As required by law, effective January 1, 2016, the Supervisory
+Board consists of at least 30 percent women and at least
+30 percent men. This will be considered for new appointments
+to the Supervisory Board."
+If the qualifications of several candidates for the Supervisory
+Board meet, to an equal degree, the general and company-
+related requirements, the Supervisory Board intends to consider
+other criteria in its nomination of candidates in order to
+increase the Supervisory Board's diversity.
+In addition, the Supervisory Board as a whole should have
+particular expertise in the energy sector and the E.ON Group's
+business operations. Such expertise includes knowledge
+about the key markets in which the E.ON Group operates.
+The key role of the Supervisory Board is to oversee and advise
+the Management Board. Consequently, a majority of the
+shareholder representatives on the Supervisory Board should
+have experience as members of the board of management of
+a stock corporation or of a comparable company or association
+in order to discharge their duties in a qualified manner.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+In view of the E.ON Group's international orientation, the Super-
+visory Board should include a sufficient number of members
+who have spent a significant part of their professional career
+abroad.
+80
+Corporate Governance Report
+audit system; compliance; and the independent audit. With
+regard to the independent audit, the committee also deals
+with the definition of the audit priorities and the agreement
+regarding the independent auditor's fees. The Audit and Risk
+Committee also prepares the Supervisory Board's decision
+on the approval of the Financial Statements of E.ON SE and
+the Consolidated Financial Statements. It also examines the
+Company's quarterly Interim Reports and discusses the audit
+review of the Interim Reports with the independent auditor
+and regularly reviews the Company's risk situation, risk-bearing
+capacity, and risk management. The effectiveness of the
+internal control mechanisms for the accounting process used
+at E.ON SE and the global and regional units is tested on a
+regular basis by our Internal Audit division; the Audit and Risk
+Committee regularly monitors the work done by the Internal
+Audit division and the definition of audit priorities. In addition,
+the Audit and Risk Committee prepares the proposal on the
+selection of the Company's independent auditor for the Annual
+Shareholders Meeting. In order to ensure the auditor's inde-
+pendence, the Audit and Risk Committee secures a statement
+from the proposed auditors detailing any facts that could lead
+to the audit firm being excluded for independence reasons or
+otherwise conflicted.
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+At the Annual Shareholders Meeting, shareholders may vote
+their shares themselves, through a proxy of their choice,
+or through a Company proxy who is required to follow the
+shareholder's voting instructions.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Shareholders and Annual Shareholders Meeting
+E.ON SE shareholders exercise their rights and vote their
+shares at the Annual Shareholders Meeting. The Company's
+financial calendar, which is published in the Annual Report,
+in the quarterly Interim Reports, and on the Internet at
+www.eon.com, regularly informs shareholders about important
+Company dates.
+All committees meet at regular intervals and when specific
+circumstances require it under their policies and procedures.
+The Report of the Supervisory Board (on pages 4 to 9) con-
+tains information about the activities of the Supervisory Board
+and its committees in 2013. Pages 216 and 217 show the com-
+position of the Supervisory Board and its committees.
+The Nomination Committee consists of three shareholder-
+representative members. Its Chairperson is the Chairperson
+of the Supervisory Board. Its task is to recommend to the
+Supervisory Board, taking into consideration the Supervisory
+Board's targets for its composition, suitable candidates for
+election to the Supervisory Board by the Annual Shareholders
+Meeting.
+The Finance and Investment Committee consists of four
+members. It advises the Management Board on all issues of
+Group financing and investment planning. It decides on
+behalf of the Supervisory Board on the approval of the acqui-
+sition and disposition of companies, equity interests, and parts
+of companies whose value exceeds €500 million but does not
+exceed €1 billion. In addition, it decides on behalf of the
+Supervisory Board on the approval of financing measures
+whose value exceeds 5 percent, but not 10 percent, of the
+equity listed in the Company's most recent Consolidated Bal-
+ance Sheet if such measures are not covered by the Super-
+visory Board's resolutions regarding finance plans. If the value
+of any such transactions or measures exceeds the above-
+mentioned thresholds, the Finance and Investment Committee
+prepares the Supervisory Board's decision.
+inform the Chairperson of the Audit and Risk Committee of,
+or to note in the audit report, any facts that arise during
+the audit that contradict the statements submitted by
+the Board of Management or Supervisory Board in connec-
+tion with the German Corporate Governance Code.
+promptly inform the Supervisory Board of anything arising
+during the course of the audit that is of relevance to the
+Supervisory Board's duties
+promptly inform the Chairperson of the Audit and Risk
+Committee should any such facts arise during the course
+of the audit unless such facts are promptly resolved in
+satisfactory manner
+In being assigned the audit task, the independent auditor
+agrees to:
+Targets for Promoting the Participation of Women and
+Men in Leadership Positions pursuant to Section 76,
+Paragraph 4, and Section 111, Paragraph 5, of the
+German Stock Corporation Act
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+and E.ON's average stock price during the first 60 days prior
+to the four-year vesting period. Furthermore, Management
+Board members may receive, on the basis of annual Super-
+visory Board decisions, a base matching of additional non-
+vested virtual shares in addition to the virtual shares resulting
+from their LTI component. In addition, Management Board
+members may, depending on the company's performance
+during the vesting period, receive performance matching of
+up to two additional non-vested virtual shares per share
+resulting from base matching. The arithmetical total target
+value allocated at the start of the vesting period, which begins
+on April 1 of the year in which a tranche is allocated, is there-
+fore the sum of the value of the LTI component, base matching,
+and performance matching (depending on the degree of
+attainment of a predefined company performance target).
+Following the Supervisory Board's decision to allocate a new
+tranche, Management Board members initially receive vested
+virtual shares equivalent to the amount of the LTI component
+of their bonus. The determination of the LTI component takes
+into consideration the overall target attainment of the bonus
+for the preceding financial year. The number of virtual shares
+is calculated on the basis of the amount of their LTI component
+Vesting period: 4 years
+= €
+Dividends
++
+For the purpose of performance matching, the company per-
+formance metric is E.ON's average ROACE during the four-year
+vesting period compared with a target ROACE set in advance
+by the Supervisory Board for the entire four-year period at
+the time it allocates a new tranche. Extraordinary events are
+not factored into the determination of target attainment for
+company performance. Depending on the degree of target
+attainment for the company performance metric, each virtual
+share resulting from base matching may be matched by up to
+two additional virtual shares at the end of the vesting period.
+If the predetermined company performance target is fully
+attained, Management Board members receive one additional
+virtual share for each virtual share resulting from base match-
+ing. Linear interpolation is used to translate intermediate figures.
+Stock price
+ROACE
+4-year
+average
+1/3: LTI
+component
++
+Base
+matching
++
+Performance
+matching
+in %
+At the end of the vesting period, the virtual shares held by
+Management Board members are assigned a cash value based
+on E.ON's average stock price during the final 60 days of the
+vesting period. To each virtual share is then added the aggre-
+gate per-share dividend paid out during the vesting period.
+This total-cash value plus dividends—is then paid out. Payouts
+are capped at 200 percent of the arithmetical total target value.
+CEO Letter
+Report of the Supervisory Board
+5
+4
+3
+2
+1
+Capital contributions
+Contribution-Based Plan
+Mr. Winkel) are enrolled in the contribution plan "E.ON Manage-
+ment Board," a contribution-based pension plan.
+Members appointed to the Management Board since 2010
+(Dr.-Ing. Birnbaum, Mr. Kildahl, Mr. Schäfer, Mr. Sen, and
+Pension Entitlements
+In line with the German Corporate Governance Code's recom-
+mendation, Management Board members' cash compensation
+has an overall cap. This means that the sum of the individual
+compensation components in one year may not exceed
+200 percent of the total agreed target compensation, which
+consists of base salary, target bonus, and the target allocation
+value of long-term variable compensation.
+Overall Cap
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+Strategy and Objectives
+E.ON Stock
+The long-term variable compensation that Management Board
+members receive is a stock-based compensation under the
+E.ON Share Matching Plan. At the beginning of each financial
+year, the Supervisory Board decides, based on the Executive
+Committee's recommendation, on the allocation of a new
+tranche, including the respective targets and the number of
+virtual shares granted to individual members of the Manage-
+ment Board. To serve as a long-term incentive for sustainable
+business performance, each tranche has a vesting period of
+four years. The tranche starts on April 1 of each year.
+Long-Term Variable Compensation: E.ON Share
+Matching Plan
+The maximum bonus that can be attained (including any
+special compensation) is 200 percent of the target bonus.
+In addition, the Supervisory Board has the discretionary power
+to make a final, overall assessment on the basis of which it
+may adjust the size of the bonus. This overall assessment does
+not refer to above-described targets or comparative parameters,
+which are not, under the Code's recommendations, supposed
+to be changed retroactively. In addition, the Supervisory Board
+may, as part of the annual bonus, grant Management Board
+members special compensation for outstanding achievements.
+Target attainment
+⚫ Actual EBITDA vs. budget
+Company performance (0-200%)
+Bonus
+(target
+bonus)
+Bonus Mechanism
+The amount of the bonus is determined by the degree to
+which certain performance targets are attained. The target-
+setting mechanism consists of company performance targets
+and individual performance targets:
+The annual bonus mechanism consists of two components:
+a short-term incentive component ("STI component") and a
+long-term incentive component ("LTI component"). The STI
+component generally accounts for two-thirds of the annual
+bonus. The LTI component accounts for one-third of the annual
+bonus to a maximum of 50 percent of the target bonus. The
+LTI component is not paid out at the conclusion of the financial
+year but is instead transferred into virtual shares, which have
+a four-year vesting period, based on E.ON's stock price.
+Annual Bonus
+Since 2010 more than 60 percent of Management Board
+members' long-term variable compensation depends on the
+achievement of long-term targets, ensuring that the variable
+compensation is sustainable under the criteria of Section 87
+of the German Stock Corporation Act.
+Performance-Based Compensation
+Management Board members receive a number of contrac-
+tual fringe benefits, including the use of a chauffeur-driven
+company car. The Company also provides them with the nec-
+essary telecommunications equipment, covers costs that
+include those for an annual medical examination, and pays
+the premium for an accident insurance policy.
+Management Board members receive their fixed compensa-
+tion in twelve monthly payments.
+Fixed Compensation
+In addition, there is a graphic on page 94 that provides a
+summary overview of the individual components of the Manage-
+ment Board's compensation described below as well as their
+respective metrics and parameters.
+Combined Group Management Report
+Consolidated Financial Statements
+Tables and Explanations
+200%
+Pension
+150%
+50%
+Corporate Governance Report
+84
+83
+In assigning Management Board members their individual
+performance factors, the Supervisory Board evaluates their
+individual contribution to the attainment of collective targets
+as well as their attainment of their individual targets. The Super-
+visory Board, at its discretion, determines the degree to which
+Management Board members have met the targets of the
+individual-performance portion of their annual bonus. In making
+this determination, the Supervisory Board pays particular
+attention to the criteria of Section 87 of the German Stock Cor-
+poration Act and of the German Corporate Governance Code.
+and ROACE, a comparison with prior-year EBITDA, and general
+market developments. Extraordinary events are not factored
+into the determination of target attainment.
+The metric used for the company target is our EBITDA. The
+EBITDA target for a particular financial year is the plan figure
+approved by the Supervisory Board. If E.ON's actual EBITDA is
+equal to the EBITDA target, this constitutes 100 percent attain-
+ment. If it is 30 percentage points or more below the target,
+this constitutes zero percent attainment. If it is 30 percentage
+points or more above the target, this constitutes 200 percent
+attainment. Linear interpolation is used to translate interme-
+diate EBITDA figures into percentages. The Supervisory Board
+then evaluates this arithmetically derived figure on the basis
+of certain qualitative criteria and, if necessary, adjusts it
+within a range of ±20 percentage points. The criteria for this
+qualitative evaluation are the ratio between cost of capital
+2/3:
+STI component
+1/3:
+LTI
+compo-
+nent
+200% of target bonus)
+Bonus (maximum of
+• Team targets
+•Individual targets
+Evaluation of a Management Board member's
+performance based on:
+Individual Performance (70-130%)
+• If necessary, adjusted by the Supervisory Board
+-30% budget +30% EBITDA
+100%
+Report of the Supervisory Board
+CEO Letter
+2015
+-16
+Economic net debt (at year-end)
+26,320
+27,714
+-5
+Debt factor³
+4,749
+5.3
+Total assets
+ROCE (%)
+1,287
+63,699
+3.74
+19,077
++1.65
+-93
+Equity
+113,693
+3,974
+-29
+904
+1,076
+-16
+Investments
+3,169
+3,227
+Cash provided by operating activities of continuing operations before interest and taxes
+-2
+14
+20
+-30
+Cash provided by operating activities of continuing operations
+2,961
+4,191
+Research and development expense
+-44
+10.4
+10.9
++0.16
+- Percentage of female executives and senior managers
+19.6
+18.4
++1.26
+- Average turnover rate (%)
+32.0
+5.3
++1.86
+- Average age
+42
+42
+- TRIF (E.ON employees)
+2.5
+3.5
+32.1
+- Percentage of female employees
+43,162
+-0.56
+Pretax cost of capital (%)
+5.8
+6.7
+-0.96
+After-tax cost of capital (%)
+Value added
+4.0
+4.9
+-0.96
+1,370
+1,216
++13
+Employees (at year-end)
+43,138
+Adjusted net income²
+2.0
+-21
+-8,450
+Furthermore, in the context of the Group's current operating business,
+we discussed in detail the extreme volatility of national and international
+energy markets, the currencies that are important to E.ON, the impact
+of low interest rates on E.ON as well as the general business situation of
+the Group and its companies. We discussed E.ON SE's and the E.ON
+Group's current asset, financial, and earnings situation, future dividend
+policy, possible capital measures, workforce developments, and earnings
+opportunities and risks. In addition, we and the Management Board
+thoroughly discussed the E.ON Group's medium-term plan for 2017-2019.
+The Supervisory Board was provided information on a regular basis about
+the Company's health, (occupational) safety, and environmental perfor-
+mance (in particular the development of key accident indicators) as well as
+key figures for the number of customers, customer satisfaction, the
+number of apprentices, and measures to support women at the Company.
+The political developments in countries in which E.ON is active constituted
+a key overarching topic of our discussions. Alongside the macroeconomic
+and economic-policy situation in the individual countries, we focused pri-
+marily on the developments in European and German energy policy and
+their respective consequences for E.ON's various business areas.
+Key Topics of the Supervisory Board's Discussions
+capital structure, and the impairment charges necessitated by Uniper's
+stock price left deep marks on E.ON's balance sheet. The new strategy
+will enable both E.ON and Uniper to meet the respective challenges in a
+focused way and to seize development opportunities.
+The new strategy under which E.ON and Uniper each
+focuses on its own energy world not only maintained
+value for shareholders. In terms of business logic, it is
+also the right response to the far-reaching structural
+changes in the energy industry, which have continued
+while E.ON's policy and regulatory environment has
+deteriorated since it adopted its new strategy in late
+2014. Dislocations in the Company's market environ-
+ment, the obligation to provide Uniper with a solid
+At our meetings we discussed the new E.ON and
+Uniper's business models and equity stories, the
+spinoff documentation, E.ON's finance situation, and
+Uniper's financing structure and received reports on
+the progress of the spinoff and the accounting treat-
+ment of Uniper in E.ON's Consolidated Financial State-
+ments at different balance-sheet dates.
+We thoroughly discussed current developments in E.ON and Uniper's
+core businesses. We discussed and passed resolutions regarding the
+Arkona wind farm project in the German Baltic Sea and the Nord Stream 2
+project. The Supervisory Board was informed on an ongoing basis about
+the status of the negotiations with Gazprom to adjust the price terms of
+long-term gas procurement contracts, the performance of the business
+in Turkey, the repositioning of the E.ON brand, the Phoenix restructuring
+program, and the successful conclusion of the E.ON 2.0 program. The
+Management Board also reported on the progress of the legal proceedings
+relating to the nuclear-fuel tax, the status of the constitutional complaint
+against the nuclear phaseout and the lawsuit filed against the nuclear
+energy moratorium, and the proposals of the Commission for Organizing
+and Financing the Nuclear Energy Phaseout.
+We distributed 53.35 percent of Uniper SE's stock to
+our shareholders, who received one registered share
+of Uniper SE stock with no par value for each ten shares
+of E.ON SE they held. E.ON SE continues to hold a
+46.65-percent stake in Uniper SE. The spinoff therefore
+did not alter shareholders' ownership interest. But it
+did expand their options. Depending on their preference,
+shareholders can invest in the new energy world or the
+conventional commodity business.
+Implementation of E.ON's New Strategy
+7
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+A significant share of the Supervisory Board's work in
+2016 revolved around the implementation of the new
+corporate strategy E.ON adopted in November 2014.
+E.ON and Uniper have been operating independently
+of one another since January 1, 2016. On June 8, 2016,
+the Annual Shareholders Meeting approved the
+Spinoff and Takeover Agreement between E.ON SE and
+Uniper SE with a 99.68-percent majority. The agree-
+ment was entered into the commercial register on
+September 9, 2016. Uniper had its stock-market listing
+on September 12, 2016. The resolved-on Control
+Termination Agreement took effect on December 31,
+2016. E.ON and Uniper therefore successfully carried
+out an ambitious and challenging corporate transfor-
+mation exactly on schedule.
+Annual Report
+Report of the Supervisory Board
+Finally, the Management Board provided information about the scope of
+E.ON's use of derivative financial instruments and how the regulation
+of these instruments affects E.ON's business. We also discussed E.ON'S
+rating situation with the Management Board on a regular basis.
+In the 2016 financial year the Executive Committee
+met seven times and adopted two resolutions by
+means of written communications. All members took
+part in all meetings and the written communications.
+In particular, this committee prepared the meetings of
+the full Supervisory Board. Furthermore, it discussed
+significant personnel matters, especially those relating
+to the spinoff and Management Board compensation
+and did comprehensive preparatory work for the Super-
+visory Board's resolutions on these matters. In addi-
+tion, it prepared the Supervisory Board's resolutions to
+determine that the Management Board met its targets
+for 2015 and to set the targets for 2016. Finally, the
+committee adopted a resolution based on the Manage-
+ment Board's proposal to change its members' respec-
+tive task areas.
+To fulfill its duties carefully and efficiently, the Super-
+visory Board has created the committees described
+in detail below. Information about the committees'
+composition and responsibilities is in the Corporate
+Governance Report on pages 79 and 80. Within the
+scope permissible by law, the Supervisory Board has
+transferred to the committees the authority to pass
+resolutions on certain matters. Committee chairpersons
+reported the agenda and results of their respective
+committee's meetings to the full Supervisory Board
+on a regular basis, typically at the Supervisory Board
+meeting subsequent to their committee meeting.
+Committee Work
+An overview of Supervisory Board members' attendance at meetings of
+the Supervisory Board and its committees is on page 78.
+78 and 79.
+The targets for the Supervisory Board's composition with regard to Item
+5.4.1 of the German Corporate Governance Code and the status of their
+achievement are described in the Corporate Governance Report on pages
+8
+Furthermore, one education and training session on selected issues was
+conducted for Supervisory Board members in 2016.
+www.eon.com.
+The current version of the declaration of compliance is in the Corporate
+Governance Report on page 75; the current as well as earlier versions
+are continuously available to the public on the Company's website at
+In the annual declaration of compliance issued at the end of the year,
+we and the Management Board declared that E.ON is in full compliance
+with the recommendations of the "Government Commission German
+Corporate Governance Code" dated May 5, 2015, published by the Fed-
+eral Ministry of Justice in the official section of the Federal Gazette
+(Bundesanzeiger). Furthermore, we declared that E.ON was in full com-
+pliance with the recommendations of the "Government Commission
+German Corporate Governance Code" dated May 5, 2015, published by
+the Federal Ministry of Justice in the official section of the Federal Gazette
+(Bundesanzeiger), since the last annual declaration on April 15, 2016,
+with the exception of Section 4.2.3, Paragraph 2, Sentence 8 of the Ger-
+man Corporate Governance Code. According to this sentence, there
+should be no retroactive changes to the performance targets or the com-
+parison parameters of the Management Board's compensation. In April
+2016, however, we decided to adjust certain performance targets in view
+of the Uniper spinoff.
+In the 2016 financial year we again had intensive discussions about
+the implementation of the recommendations of the German Corporate
+Governance Code.
+Corporate Governance
+We thoroughly discussed the activity reports submitted by the Super-
+visory Board's committees.
+The Supervisory Board is aware of no indications of conflicts of interest
+involving members of the Management Board or the Supervisory Board.
+2016
+e.on
+E.ON Group Financial Highlights¹
+-18
+- Quasi-regulated and long-term contracted business
+488
+442
++10
+- Merchant business
+1,814
+1,142
+-13
+Net loss
+-16,007
+-6,377
+-151
+Net loss attributable to shareholders of E.ON SE
+1,307
+1,482
+-Regulated business
+-13
+€ in millions
+2016
+E.ON Stock
++/-%
+Sales
+38,173
+42,656
+-11
+Adjusted EBITDA²
+4,939
+5,844
+-15
+Adjusted EBIT2
+3,112
+3,563
+-6,999
++25
+Earnings per share 7.8 (€)
+Equity per share7.8 (€)
+228 Summary of Financial Highlights and Explanations
+228 Explanatory Report of the Management Board
+229 Summary of Financial Highlights
+230 Glossary of Financial Terms
+237 Financial Calendar
+CEO Letter
+Members of the Management Board
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Contents
+CEO Letter
+Report of the
+Supervisory Board
+E.ON Stock
+CEO Letter
+Members of the Supervisory Board
+Declaration of the Management
+Corporate Governance Declaration
+Compensation Report
+100 Consolidated Financial Statements
+100 Independent Auditor's Report
+108 Consolidated Statements of Income
+109 Consolidated Statements of Recognized Income and Expenses
+List of Shareholdings
+110 Consolidated Balance Sheets
+114 Statement of Changes in Equity
+116 Notes
+208
+209
+222
+224
+112 Consolidated Statements of Cash Flows
+4
+Dear Shareholders,
+Dr. Johannes Teyssen,
+кори
+Dr. Johannes Teyssen
+5
+Report of the Supervisory Board
+6
+Dear Shareholders,
+Best wishes,
+2016 was a difficult year for E.ON. The successful spinoff of Uniper was an
+enormous undertaking. At the same time, E.ON adopted a new business model.
+Moreover, amid these strategic challenges, it was important not to lose focus
+on the operating business.
+In the 2016 financial year the Supervisory Board carefully performed all its duties
+and obligations under law, the Company's Articles of Association, and its own
+policies and procedures. It thoroughly examined the Company's situation and
+devoted particular attention to its continually changing energy-policy and eco-
+nomic environment.
+Dr. Karl-Ludwig Kley,
+Chairman of the Supervisory Board
+We advised the Management Board intensively about the Company's management
+and continually monitored the Management Board's activities, assuring ourselves
+that the Company's management was legal, purposeful, and orderly. We were closely
+involved in all business transactions of key importance to the Company and dis-
+cussed these transactions thoroughly based on the Management Board's reports.
+At the Supervisory Board's five regular and one extraordinary meeting in the 2016
+financial I year, we addressed in depth all issues relevant to the Company, including
+in conjunction with the new corporate strategy. All Supervisory Board members
+attended all meetings with the exception of one member who was unable to attend
+one meeting. A table showing attendance by member is on page 78 of this report.
+The Management Board regularly provided us with timely and comprehensive
+information in both written and oral form. At the meetings of the full Supervisory
+Board and its committees, we had sufficient opportunity to actively discuss the
+Management Board's reports, motions, and proposed resolutions. We voted on
+such matters when it was required by law, the Company's Articles of Association,
+or the Supervisory Board's policies and procedures. After thoroughly examining
+and discussing the resolutions proposed by the Management Board, the Super-
+visory Board approved them.
+Furthermore, there was a regular exchange of information between the Chairman
+of the Supervisory Board and the Chairman of the Management Board throughout
+the entire financial year. In the case of particularly pertinent issues, the Chairman
+of the Supervisory Board was kept informed at all times. The Chairman of the Super-
+visory Board likewise maintained contact with the members of the Supervisory
+Board outside of board meetings. Consequently, the Supervisory Board was at all
+times informed about the current operating performance of the major Group com-
+panies, significant business transactions, the development of key financial figures,
+and decisions under consideration.
+E.ON carried out all of these tasks superbly. First and foremost, the Supervisory
+Board would therefore like to express its sincere thanks to the Management Board
+and employees of this great company. Although there is still much to be done, E.ON
+is well prepared for its future in the new energy world.
+All of us are prepared to do our part. E.ON has
+great potential to become a leading company of
+the new energy world-the company of choice
+for customers and investors. It's within our power
+to seize this great opportunity and thus to actively
+shape the future of E.ON and the far-reaching
+changes in our market.
+(5) Management and cultural adaptation are
+particularly important tasks in this era of continual
+change. E.ON has a very knowledgeable and dedi-
+cated team of employees who work hard each
+day to transform our company. We want to inspire
+them. Because their efforts will make a key con-
+tribution to our success on the road ahead. We also
+want to further improve how we work together
+and cultivate a work environment based on open-
+ness, diversity, performance, and mutual respect
+and support. In short, we want to create a corporate
+culture that will make E.ON faster, more customer-
+oriented, and more successful.
+(4) I'm convinced that the new E.ON is active in
+the right markets. The energy future is green,
+distributed, and digital. But this market is more
+fragmented than the conventional energy world.
+We face different competitors who are swift and
+agile. That's why we need to make E.ON more
+entrepreneurial and ensure that our offerings are
+better, more innovative, and faster-to-market than
+all the others. When old business models become
+obsolete, we need to find new ones. To help us
+achieve all this, we intend to reduce our bureaucracy
+this year, to make our organizational setup more
+customer-centric, and to become leaner, more
+decentralized, and more agile.
+Chairman of the Management Board
+At the 2016 Annual Shareholders Meeting, an overwhelming majority of you-
+99.7 percent-approved our plan to reinvent E.ON. You gave my Management
+Board colleagues and me a clear task: to do everything we can to make E.ON fit
+for the future and, above all, to rethink E.ON from our customers' perspective.
+Their choices regarding our products, services, and solutions will determine how
+successful E.ON will be in the new energy world. That's why we want to meet
+the needs of our customers-people, companies, and communities-with superior,
+simple, and convenient energy products and solutions. E.ON's aspiration is to
+provide customers with the best that the new energy world has to offer.
+One indication of E.ON's great potential is the recent uptick in our stock price.
+Uniper stock has also done well and, in fact, was Europe's best-performing utility
+stock of 2016. In dividing E.ON into the new E.ON and Uniper we paid particular
+attention to safeguarding your interests. If you kept both stocks, at the end of
+February 2017 they were worth more together than E.ON stock was by itself before
+the spinoff. And from E.ON's perspective, our core businesses are no longer bur-
+dened by the risks of the old energy world, such as the uncertainties of commodity
+markets. The spinoff relieved your company and its balance sheet of most of the
+burdens of the past. For example, we recorded impairment charges on power plants
+and businesses that the altered business environment had rendered less valuable
+and got them off our balance sheet entirely when Uniper was deconsolidated. As
+we repeatedly emphasized, 2016 truly was a year of transition.
+In 2016 broad agreement with Germany's political leadership was reached on the
+phaseout of nuclear energy. Germany enacted a law that reassigns the future
+responsibilities for, and arranges the funding of, the intermediate and final storage
+of the country's nuclear waste. Negotiations are currently under way for a contrac-
+tual agreement with the Federal Republic of Germany regarding these matters.
+The law will require your company to make a considerable financial contribution in
+the near future: in mid-2017 we'll have to transfer just under €10 billion to a public
+fund. Although we created provisions for a large portion-just under €8 billion-of
+these obligations, the risk surcharge imposed by the law has obviously had an
+adverse impact on our balance sheet. In return, however, your company will be
+relieved of these essentially perpetual risks.
+The Uniper spinoff and the funding of nuclear-waste storage left deep marks on
+our balance sheet. We informed you of these matters early and transparently. In
+2016 these burdens of the past affected our income statement for the last time,
+leading to a net loss of €16 billion. However, the entire amount of this net loss is
+attributable to discontinued operations and nuclear energy. With the exception of
+the risk surcharge, the loss is not cash-effective. Moreover, portions of the loss
+bear no risk for our equity either.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+But more important than looking back is looking ahead: the new E.ON is
+already solid from an operating perspective. In 2016 we posted adjusted
+EBIT of €3.1 billion and adjusted net income of around €900 million.
+Our 2016 earnings were therefore at the upper end of our forecast range.
+Adjusted for disposals, the E.ON Group's earnings strength actually
+improved relative to the prior year. Sixty-five percent of our adjusted EBIT
+comes from regulated, quasi-regulated, and long-term contracted busi-
+nesses. Our three core businesses-energy networks, customer solutions,
+and renewables-deliver stable earnings. In 2016 we generated adjusted
+EBIT of €2.5 billion. In short, we have a good foundation on which to
+continue our company's transformation. I'm firmly convinced that much
+of our success will depend on our adaptability. For us, 2017 will be a year
+of transformation. We set five clear objectives:
+(1) We'll strengthen our balance sheet and make the company financially
+sustainable. This is the key prerequisite for us to grow in the future.
+Although our markets offer many opportunities, our financial resources are
+limited. Our top priority is therefore to continue to develop our operating
+business while systematically prioritizing our investment expenditures
+(we'll only pursue the best projects) and achieving our budget targets. Over
+the medium and long term, these steps will enable us to establish a sus-
+tainable financial foundation from which to invest in your company's future.
+(2) We're putting our customers first. Our new brand idea-"Let's create
+a better tomorrow"-makes a clear commitment. In everything we do we
+need to ask how it benefits our customers, what they want, and what will
+make their lives better. The answers we've come up with include roof-top
+solar panels together with a battery storage system and, in conjunction
+with Sixt Leasing, a complete e-mobility package consisting of an electric
+car, a charging point, maintenance service, and a green power product.
+(3) The latest generation of energy products is digitally integrated. That's
+precisely our strategy. We intend to be a pacesetter in the digitalization
+of the energy business. Increasingly, digitalization will be a defining feature
+of the solutions we offer our customers. We already have a successful
+smartphone app that enables customers to manage their energy consump-
+tion and all their communications with us. Other exciting products are on
+the way, this year and beyond. New solutions in our network business-
+such as the efficient systems we developed for the "Werksviertel," a former
+industrial district near Munich's East train station-always involve digital
+networking.
+82
+75
+75 Corporate Governance Report
+Disclosures Regarding Takeovers
+"Not adjusted for Uniper; figure as reported in the 2015 Annual Report.
+5Change in absolute terms.
+6Change in percentage points.
+'Attributable to shareholders of E.ON SE.
+8Based on shares outstanding.
+⁹For the respective financial year; the 2016 figure represents management's dividend proposal.
+3Ratio of economic net debt and adjusted EBITDA.
+4
+6
+Report of the Supervisory Board
+14
+22
+22
+22
+CEO Letter
+¹The Uniper Group was deconsolidated effective December 31, 2016; it is shown in our 2015 and 2016 income statement as discontinued operation.
+2Adjusted for non-operating effects (see Glossary).
+-25
+17.4
+-4.33
+-3.60
+-20
+-0.54
+8.42
+Dividend per share⁹ (€)
+Dividend payout
+Market capitalization³ (€ in billions)
+0.21
+0.50
+-58
+410
+976
+-58
+13.1
+23
+The Finance and Investment Committee met five
+times. Attendance was complete at all meetings. The
+matters addressed by the committee included the
+Management Board's reports on the implementation
+of E.ON's new corporate strategy, the planned post-
+completion audits for Maasvlakte 3 generating unit and
+other projects, and Uniper's planned finance structure.
+The committee also discussed current developments
+in the Arkona offshore wind farm project in the Baltic
+Sea, Twin Forks onshore wind farm projects in the
+United States, and the Nord Stream 2 project. In partic-
+ular, at its meetings the committee prepared the Super-
+visory Board's resolutions on these matters or, for
+matters for which it had the authority, made the decision
+itself. Furthermore, it discussed the medium-term plan
+for 2017-2019 and prepared the Supervisory Board's
+resolutions on this matter.
+24
+26
+50
+Asset Situation
+E.ON SE's Earnings, Financial, and Asset Situation
+Other Financial and Non-financial Performance Indicators
+ROCE and Value Added
+- Corporate Sustainability
+48
+- Employees
+Forecast Report
+62
+70
+72
+Risk and Chances Report
+Internal Control System for the Accounting Process
+58
+-
+46
+46
+28
+E.ON Stock
+18 Strategy and Objectives
+Combined Group Management Report
+Corporate Profile
+Business Model
+Management System
+Innovation
+Business Report
+Macroeconomic and Industry Environment
+Earnings Situation
+39
+Financial Situation
+43
+44
+26
+CEO Letter
+Report of the Supervisory Board
+Fixed compensation
+895,467
+779,460
+4,193,612
+4,458,147
+1The maximum amount disclosed under benefits granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
+2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 85, applies as well.
+Corporate Governance Report
+3,678,687
+Table of Compensation Granted and Allocated
+96
+Dr.-Ing. Leonhard Birnbaum (member of the Management Board)
+Compensation granted
+2015
+2016
+€
+90
+3,298,145
+7,772,441
+779,460
+8,551,901
+1,282,409
+779,460
+2,061,869
+827,585
+758,278
+- Share Performance Plan, sixth tranche (2011-2014)
+827,585
+- Share Performance Plan, seventh tranche (2012-2015)
+758,278
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Matching Plan, fifth tranche (2017-2021)
+Total
+1,335,600
+630,000
+Service cost
+Total
+4,498,656
+895,467
+5,394,123
+1,197,516
+630,000
+4,369,925
+779,460
+5,149,385
+2,395,032
+1,260,000
+Fixed compensation
+3,655,032
+Fringe benefits
+One-year variable compensation
+25,138
+825,138
+733,333
+733,333
+1,650,000
+696,960
+953,333
+818,713
+1,144,001
+2,127,285
+- Share Performance Plan, sixth tranche (2011-2014)
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+777,334
+366,667
+- Share Matching Plan, fifth tranche (2017-2021)
+Total
+1,063,643
+825,138
+825,138
+18,713
+Multi-year variable compensation
+800,000
+18,713
+800,000
+2016
+(min.)
+800,000
+2016
+Compensation allocated
+2015
+2016
+(max.)1,2
+800,000
+800,000
+800,000
+818,713
+25,138
+825,138
+25,138
+25,138
+Total
+1,638,000
+1,197,504
+1,240,000
+42,409
+1,282,409
+Value of stock-based
+compensation granted¹
+2016
+Total
+2015
+2016
+2015
+Dr. Johannes Teyssen
+Dr.-Ing. Leonhard Birnbaum
+2015
+1,240,000 1,240,000
+1,197,504
+42,409
+800,000 800,000 953,333
+696,960
+25,138
+33,056 1,827,516 1,965,600 4,747,925
+18,713 1,063,643 1,144,001 2,842,114
+1,638,000
+2016
+2015
+2016
+Individual members of the Management Board received the
+following total compensation:
+Total Compensation of the Management Board
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+89
+Fixed annual
+compensation
+Bonus
+Other compensation
+€
+2016
+2015
+4,436,160
+2,659,674
+Dr. Bernhard Reutersberg
+(until June 30, 2016)
+Michael Sen
+350,000 700,000 390,000 570,240 29,826 25,332
+700,000 408,333 780,000 332,640 181,065 1,415,107
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+(min.)
+1,240,000
+33,056
+1,273,056
+1,260,000
+1,965,600
+1,240,000
+42,409
+1,282,409
+1,260,000
+1,827,516
+1,240,000
+42,409
+1,282,409
+(max.)1,2
+1,240,000
+42,409
+1,282,409
+2,835,000
+1,240,000
+33,056
+1,273,056
+€
+Service cost
+2016
+2016
+285,135 936,000 1,054,961 2,231,572
+300,000 775,000 1,961,065 2,931,080
+Dr. Karsten Wildberger
+(since April 1, 2016)
+Total
+525,000
+585,000
+1,442,153
+675,000
+3,227,153
+3,615,000 3,148,333 4,346,333 2,797,344 1,720,591 1,492,208 4,151,294 4,820,601 13,833,218 12,258,486
+¹The present value assigned to the virtual shares of E.ON stock at the time of granting for the fourth tranche of the E.ON Share Matching Plan was €8.63 per share.
+The following table shows the compensation granted and
+allocated in 2016 in the format recommended by the German
+Corporate Governance Code:
+Table of Compensation Granted and Allocated
+Dr. Johannes Teyssen (Chairman of the Management Board)
+Compensation granted Compensation allocated
+2015
+2016
+2016
+2015
+€
+Total
+2,696,047
+489,104
+3,185,151
+2016
+408,333
+700,000
+700,000
+700,000
+408,333
+2015
+700,000
+181,065
+181,065
+181,065
+1,415,107
+181,065
+1,823,440
+1,415,107
+2016
+(max.)1,2
+(min.)
+Multi-year variable compensation
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+91
+Michael Sen (member of the Management Board)
+Compensation granted
+Compensation allocated
+2015
+2016
+2016
+€
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+881,065
+Strategy and Objectives
+881,065
+1,823,440
+1,781,065
+270,989
+2,052,054
+881,065
+270,989
+1,152,054
+600,000
+2,831,065
+270,989
+3,102,054
+2,156,080 1,661,065
+181,808
+270,989
+2,337,888 1,932,054
+Table of Compensation Granted and Allocated
+Dr. Karsten Wildberger (member of the Management Board since April 1, 2016)
+2,948,440
+181,808
+3,130,248
+Compensation granted
+2016
+2015
+525,000
+1,442,153
+One-year variable compensation
+Total
+2016
+Compensation allocated
+2015
+See footnotes on page 89.
+Total
+Service cost
+881,065
+350,000
+600,000
+1,350,000
+332,640
+780,000
+775,000
+300,000
+600,000
+- Share Performance Plan, sixth tranche (2011-2014)
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+600,000
+175,000
+- Share Matching Plan, fifth tranche (2017-2021)
+Total
+300,000
+881,065
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Total
+See footnotes on page 89.
+2015
+2016
+700,000
+350,000
+Service cost
+2016
+(min.)
+350,000
+Compensation allocated
+2015
+2016
+700,000
+350,000
+25,332
+29,826
+29,826
+2016
+(max.)1,2
+350,000
+- Share Matching Plan, fifth tranche (2017-2021)
+Total
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Performance Plan, seventh tranche (2012-2015)
+696,976
+366,667
+2,622,114
+380,589
+3,002,703
+1,393,952
+825,138
+380,589
+1,205,727
+733,333
+4,602,423
+380,589
+4,983,012
+1,515,673 1,778,471
+489,104
+380,589
+2,004,777 2,159,060
+Table of Compensation Granted and Allocated
+Dr. Bernhard Reutersberg (member of the Management Board until June 30, 2016)
+Compensation granted
+€
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+- Share Performance Plan, sixth tranche (2011-2014)
+29,826
+25,332
+29,826
+725,332
+285,135
+570,270
+2,261,332
+964,961
+379,826
+1,625,096
+1,663,385
+1,106,839
+2,261,332
+964,961
+379,826
+1,625,096
+1,663,385
+1,106,839
+Table of Compensation Granted and Allocated
+300,000
+See footnotes on page 89.
+636,000
+367,813
+379,826
+379,826
+379,826
+725,332
+379,826
+600,000
+300,000
+675,000
+570,240
+390,000
+936,000
+285,135
+570,270
+367,813
+337,013
+337,013
+Fringe benefits
+2016
+(min.)
+525,000
+1,442,153
+1,967,153 1,967,153 1,967,153
+3,641,174 3,122,825
+Corporate Governance Report
+94
+180,000
+Fixed Compensation
+No adjustment was made to fixed compensation, which is not
+related to performance.
+Management Board members continue to receive their fixed com-
+pensation in twelve monthly payments. Management Board
+members receive a number of contractual fringe benefits, includ-
+ing the use of a chauffeur-driven company car. The Company also
+provides them with the necessary telecommunications equip-
+ment, covers costs that include those for a periodic medical exam-
+ination, and pays the premium for an accident insurance policy.
+45:55
+Annual Bonus
+In addition, the Supervisory Board introduced a new assessment
+basis and dispensed with the additional discretionary power in
+the assessment of the Company's performance:
+Bonus
+(target
+bonus)
+Company Performance
+(0-200%)
+• Actual EPS vs. budget:
+The annual bonus (45 percent of the performance-related
+compensation) of Management Board members will be paid
+out fully in cash after the end of the financial year.
+Target attainment
+Relation of
+Bonus to LTI
+tion (LTI)
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+93
+Revised Management Board Compensation Plan That Is Valid
+Effective January 1, 2017
+At its meeting on April 15, 2016, the Supervisory Board, at the
+recommendation of the Executive Committee, adopted a resolu-
+tion making adjustments to the compensation plan for members
+of the Management Board. The current compensation plan was
+reviewed and developed at the end of 2015 with the support of
+an external compensation consultant in light of the E.ON Group's
+new direction. The purpose of the review was to reduce the plan's
+complexity, to reflect the new corporate strategy, and to make
+the plan more focused on the requirements of the capital market.
+In its review, the Supervisory Board abided by the principle that
+total compensation and each of the various components must be
+appropriate. An independent compensation consultant also con-
+firmed that, bearing in mind E.ON's new direction, the amount
+of the compensation was within the normal range in the market.
+The revised compensation plan for members of the Management
+Board, which is described in detail below, meets the requirements
+of Germany's Stock Corporation Act and follows the recommen-
+dations and suggestions of the German Corporate Governance
+Code. The changes will apply equally to all members of the
+Management Board as of January 1, 2017. The adjusted com-
+pensation plan was presented to, and approved by, the 2016
+Annual Shareholders Meeting.
+Bonus
+Key Components of the New Compensation Plan That Is Valid
+Effective January 1, 2017
+The compensation of Management Board members will continue
+to be composed of fixed compensation, an annual bonus, and
+long-term variable compensation. In the future, however, the
+bonus will be fully paid out in cash after the end of the finan-
+cial year. Part of the bonus will no longer be converted into vir-
+tual shares and linked to long-term compensation. This will
+reduce the compensation plan's complexity and achieve a clear
+separation between the annual bonus and long-term variable
+compensation. E.ON's variable compensation component had
+to be restructured to continue to meet the requirements of
+Germany's Stock Corporation Act and the German Corporate
+Governance Code, according to which most of the variable
+compensation components should be based on multi-year per-
+formance. The new weighted ratio of bonus to long-term
+compensation is 45 to 55. Long-term compensation therefore
+continues to account for most of the variable compensation
+component.
+In the future, the relative proportions of the components of
+target compensation will be as follows:
+Variable
+Compensation
+(-70%)
+Base Salary
+(-30%)
+Multi-Year
+Variable
+Compensa-
+The purpose of the Management Board's new compensation plan
+is to reduce complexity, reflect the Company's new business
+model, and to enhance its capital-market orientation and share-
+holder culture. The compensation plan is supposed to create an
+incentive for successful and sustainable business management
+and to link Management Board members' compensation to the
+Company's short-term and long-term performance, while also
+taking into account the individual's personal performance. For
+this reason, the new compensation plan will continue to be
+guided by transparent and performance-related parameters and
+be dependent on the Company's success. In addition, variable
+compensation will continue to be based primarily on the perfor-
+mance over several years. At the same time, the interests and
+objectives of the Company's management and its shareholders
+will be reconciled by using not only the absolute performance
+of E.ON's stock price but also a comparison with the Company's
+competitors as the basis for the long-term variable compen-
+sation. The introduction of share-holding obligations underlines
+the capital-market orientation and will strengthen E.ON's
+shareholder culture.
+Combined Group Management Report
+200%
+100%
+In addition, the Supervisory Board may, as part of the annual
+bonus, grant Management Board members special compensation
+for outstanding achievements.
+As before, the maximum bonus that can be attained (including any
+special compensation) is 200 percent of the target bonus (cap).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+before, evaluates their individual contribution to the attainment
+of collective targets as well as their attainment of their individual
+targets. The Supervisory Board, at its discretion, determines
+the degree to which Management Board members have met the
+targets of the individual-performance portion of their annual
+bonus. In making this determination, the Supervisory Board
+pays particular attention to the criteria of Section 87 of the
+German Stock Corporation Act and of the German Corporate
+Governance Code.
+Combined Group Management Report
+Summary of Financial Highlights and Explanations
+95
+Long-Term Variable Compensation: E.ON's Performance Plan
+Effective 2017, E.ON's previous Share Matching Plan was
+replaced by a new long-term compensation plan.
+In the future, Management Board members will receive stock-
+based, long-term variable compensation under the E.ON Perfor-
+mance Plan ("EPP"). As before, each tranche has a vesting period
+of four years to serve as a long-term incentive for sustainable
+business performance. Vesting periods start on January 1.
+The Supervisory Board will grant virtual shares to each member
+of the Management Board in the amount of the contractually
+agreed EPP target. The conversion into virtual shares will be
+based on the fair market value on the date when the shares are
+granted. The fair market value will be determined by applying
+methods accepted in financial mathematics, taking into account
+the expected future payout, and hence, the volatility and risk
+associated with EPP. The number of granted virtual shares may
+change in the course of the four-year vesting period.
+The new assessment basis is the total shareholder return ("TSR”)
+of E.ON stock compared with the TSR of the companies in a peer
+group ("relative TSR"). TSR is the yield of E.ON stock, which takes
+into account the stock price plus reinvested dividends, adjusted
+for changes in capital. The peer group used for relative TSR
+will be the other companies in E.ON's peer index, the STOXX®
+Europe 600 Utilities.
+Consolidated Financial Statements
+150%
+their individual performance factors, the Supervisory Board, as
+Effective 2017, the Company's performance will be assessed
+on the basis of earnings per share ("EPS"), one of E.ON's key
+performance indicators. EPS used for this purpose will be derived
+from underlying net income as disclosed in this report. The EPS
+target for each year is set by the Supervisory Board, taking into
+account the approved budget. The target is fully achieved if
+actual EPS is equal to the target. If actual EPS is 37.5 percentage
+points or more below the target, this constitutes zero percent
+attainment. If actual EPS is 37.5 percentage points or more above
+the target, this constitutes 200 percent attainment. Linear
+interpolation is used to translate intermediate EPS figures into
+percentages.
+50%
+0%
+-37.5% budget
++37.5% EPS
+Individual Performance
+50-150%
+Evaluation of a Management Board
+member's performance based on:
+The individual performance factor will range between 50 percent
+and 150 percent, so that greater consideration can be given to
+individual/collective contributions of the members of the Man-
+agement Board. In assigning Management Board members
+• Team targets
+• Individual targets
+s =
+(maximum of
+200% of target bonus)
+100%
+Payout in Cash
+Х
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON's TSR performance in a
+given year determines the final number of one fourth of the vir-
+tual shares granted at the beginning of the vesting period. For
+this purpose, the TSRS of all companies are ranked, and E.ON's
+relative position is determined based on the percentile reached.
+If target attainment is below a threshold defined by the Super-
+visory Board, no virtual shares are granted. If E.ON's performance
+is at the upper cap or above, the grant is capped at 150 percent.
+Linear interpolation is used to translate intermediate figures
+into percentage.
+Strategy and Objectives
+Report of the Supervisory Board
+Summary Overview of Compensation Components
+Compensation component
+Fixed compensation
+Metric/Parameter
+Base salary
+Fringe benefits
+The following table provides a summary overview of the
+above-described components of the Management Board's
+compensation as well as their metrics and parameters:
+Performance-based compensation
+•
+Management Board Chairman: €1,240,000
+•
+Management Board members: €700,000 – €800,000
+Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination
+92
+Annual bonus
+Possibility of special
+Corporate Governance Report
+See footnotes on page 89.
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Matching Plan, fifth tranche (2017-2021)
+Total
+Service cost
+Total
+450,000
+225,000
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into any
+contingencies of behalf of the members of the Management
+Board in the 2016 financial year. Page 224 contains additional
+information about the members of the Management Board.
+900,000
+3,092,153
+292,555
+3,384,708
+1,967,153
+292,555
+2,259,708
+4,329,653
+2,552,153
+292,555
+4,622,208
+292,555
+2,844,708
+450,000
+E.ON Stock
+compensation
+Pension benefits
+Cap: 200 percent of the target value
+•
+•
+Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1)
++ performance matching (1:0 to 1:2) depending on ROCE during vesting period
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting
+period and on the dividend payments during the four-year vesting period
+•
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from age of 60
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement
+Other compensation provisions
+Settlement cap
+Settlement for change-of-control
+Non-compete clause
+Maximum of two years' total compensation or the total compensation for the remainder of the service agreement
+Settlement equal to two or three target salaries (base salary, target bonus, and fringe benefits), reduced by 20 percent
+For six months after termination of service agreement, prorated compensation equal to fixed compensation
+and target bonus, at a minimum 60 percent of most recently received compensation
+¹For Management Board members appointed before 2010.
+Payments Made to Former Members of the Management Board
+Total payments made to former Management Board members
+and to their beneficiaries amounted to €11.6 million in 2016
+(prior year: €15.8 million). Provisions of €172.8 million (prior year:
+€154.6 million) have been provided for pension obligations to
+former Management Board members and their beneficiaries.
+CEO Letter
+Virtual contributions equaling a maximum of 18 percent of fixed compensation and target bonus
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+Long-term variable compensation:
+Share Matching Plan
+- Target value for Management Board members: €600,000 – €733,333
+Granting of virtual shares of E.ON stock with a four-year vesting period
+Final-salary-based benefits¹
+Contribution-based benefits
+•
+⋅
+•
+Target bonus at 100 percent target attainment:
+- Target value for Management Board Chairman: €1,260,000
+- Target bonus for Management Board Chairman: €1,890,000
+Cap: 200 percent of target bonus
+Amount of bonus depends on
+- Company performance: actual adjusted EBITDA versus budget, if necessary adjusted
+- Individual performance factor
+Divided into STI component (2/3) and LTI component (1/3)
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the annual bonus as
+long as the total bonus remains under the cap.
+- Target bonus for Management Board members: €900,000 €1,100,000
+Initial Number
+of Granted
+Share Units
+TSR Performance Relative to
+Peer Group
+TSR of the E.ON share compared to the companies
+19,000
+267,700
+229,000
+Carolina Dybeck Happe (since June 8, 2016)
+81,667
+81,667
+17,700
+Baroness Denise Kingsmill CBE
+140,000
+140,000
+140,000
+Eugen-Gheorghe Luha
+140,000
+140,000
+140,000
+70,000
+70,000
+140,000
+140,000
+140,000
+70,000
+210,000
+140,000
+Erich Clementi (since July 19, 2016)
+110,000
+70,000
+Tibor Gila (since July 19, 2016)
+70,000
+2,705
+72,705
+Thies Hansen
+140,000
+70,000
+Clive Broutta
+70,000
+223,483
+70,000
+32,452
+102,452
+Dr. Karen de Segundo
+140,000
+140,000
+Silvia Šmátralová (since July 19, 2016)
+180,000
+70,000
+210,000
+210,000
+Dr. Theo Siegert
+140,000
+Multi-year variable compensation
+70,000
+13,483
+263,500 267,735
+13,500
+210,000
+René Obermann (until June 8, 2016)
+70,000
+140,000
+70,000
+140,000
+17,735
+Andreas Schmitz (since July 19, 2016)
+70,000
+Fred Schulz
+140,000
+140,000
+110,000
+110,000
+70,000
+213,333
+320,000
+320,000 213,333
+Payout Amount
+(Cap at 200%
+of target value)
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased
+by the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the EPP target agreed at the beginning of the plan.
+This means that 55 percent of variable compensation depends on
+long-term targets, while the sustainability of variable compen-
+sation as set out in Section 87 of Germany's Stock Corporation
+Act continues to be ensured.
+Corporate Governance Report
+96
+96
+Dividends
+Introduction of Share Ownership Guidelines
+Until the required investment is reached, Management Board
+members are obligated to invest net payouts from their long-
+term compensation in actual E.ON stock.
+Adjustments to Pension Entitlements under the
+Contribution-Based Plan
+Until 2016, the Company's contribution to the "Contribution
+Plan E.ON Management Board" consisted of the sum of the
+base salary and annual bonus, including the LTI component. In
+April 2016, the Supervisory Board adopted a resolution to
+increase, effective 2017, the percentages of virtual contributions
+to counteract the reduction in the sum of the base salary and
+annual bonus (see the foregoing description of the components
+of the new compensation plan). Effective January 1, 2017, the
+maximum amount of the annual contributions for Management
+Board members is equal to 21 percent of their pensionable
+income (base salary and annual bonus). Effective 2017, the
+fixed base contribution is 16 percent, the matching contribution
+5 percent.
+Compensation Plan for the Supervisory Board
+The compensation of Supervisory Board members is determined
+by the Annual Shareholders Meeting and governed by Section
+15 of the Company's Articles of Association. The purpose of the
+compensation plan is to enhance the Supervisory Board's inde-
+pendence for its oversight role. Furthermore, there are a number
+of duties that Supervisory Board members must perform irre-
+spective of the Company's financial performance. Supervisory
+Board members-in addition to being reimbursed for their
+expenses-therefore receive fixed compensation and compen-
+sation for committee duties.
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The
+other members of the Supervisory Board receive compensation
+of €140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit and
+Risk Committee, an additional €110,000. Other committee
+chairmen receive an additional €140,000; committee members,
+an additional €70,000. Members serving on more than one
+committee receive the highest applicable committee compen-
+sation only. In contradistinction to the compensation just
+described, the Chairman and the Deputy Chairmen of the
+Supervisory Board receive no additional compensation for their
+committee duties. In addition, Supervisory Board members
+are paid an attendance fee of €1,000 per day for meetings of
+the Supervisory Board or its committees. Individuals who were
+members of the Supervisory Board or any of its committees for
+less than an entire financial year receive pro rata compensation.
+To further strengthen E.ON's capital-market focus and share-
+holder-oriented culture, E.ON introduced share ownership
+guidelines effective 2017. The guidelines obligate Management
+Board members to invest in E.ON stock equaling 200 percent
+of base compensation (for the Management Board Chairperson)
+and 150 percent of base compensation (for the other Manage-
+ment Board members), to demonstrate that they have done so,
+and to hold the stock until the end of their service on the Man-
+agement Board.
+Supervisory Board Compensation in 2016
++
+achieved
+by E.ON
+Upper threshold
+of the STOXX® Europe 600 Utilities index (yearly lock-in)
+Target achievement
+200%
+175%
+Х
+150%
+Share Price
+125%
+75%
+50%
+25%
+0%
+Lower threshold Target value
+Percentile
+100%
+The total compensation of the members of the Supervisory
+Board amounted to €3.6 million (prior year: €3.2 million). The
+main reason for the increase in total compensation was the
+Supervisory Board's enlargement from 12 to 18 members.
+As in the prior year, no loans were outstanding or granted to
+Supervisory Board members in the 2016 financial year.
+Supervisory Board Compensation
+CEO Letter
+Dr. Karl-Ludwig Kley (since June 8, 2016)
+256,667
+256,667
+Werner Wenning (until June 8, 2016)
+220,000
+440,000
+2015
+220,000
+Prof. Dr. Ulrich Lehner
+320,000
+320,000
+320,000
+320,000
+Andreas Scheidt
+440,000
+2016
+2015
+2016
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+97
+Supervisory Board
+compensation
+Compensation for
+committee duties
+Supervisory Board
+compensation from
+affiliated companies
+Total
+€
+2016
+2015
+2016
+2015
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Performance Plan, sixth tranche (2011-2014)
+Bonus
+675,000
+Elisabeth Wallbaum (since January 1, 2016)
+140,000
+140,000
+Ewald Woste (since July 19, 2016)
+70,000
+70,000
+Albert Zettl (since July 19, 2016)
+1,350,000
+20,000
+90,000
+Erhard Ott (until May 7, 2015)
+133,333
+133,333
+Eberhard Schomburg
+320,000
+(until December 31, 2015)
+Attendance fees
+Total
+140,000
+2,808,333 2,366,667
+610,000
+110,000
+610,000
+99,841
+Other
+The Company has taken out D&O insurance for Management
+Board and Supervisory Board members. In accordance with
+the German Stock Corporation Act and the German Corporate
+Governance Code's recommendation, this insurance includes
+a deductible of 10 percent of the respective damage claim for
+Management Board and Supervisory Board members. The
+deductible has a maximum cumulative annual cap of 150 percent
+of a member's annual fixed compensation.
+11,423
+261,423
+48,158 3,518,174 3,024,825
+123,000
+98,000
+Subtotal
+320,000
+70,000
+525,000
+585,000
+1,012,500
+450,000
+1,967,153
+1,442,153
+2016
+(max.)1,2
+525,000
+1,442,153
+140,000
+285
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+b. We assessed whether the measurement model properly
+reflects the conceptual requirements of the relevant standards
+and whether the calculations in the model were correctly
+performed. The critical assessment of the key assumptions
+underlying the measurements was the focal point of our
+audit. Among other things, we compared the assumptions
+about the long-term development of prices and the relevant
+a. In the consolidated financial statements of E.ON SE as at
+December 31, 2016, an amount of EUR 3.5 billion is reported
+under the balance sheet line item "Goodwill". The Company
+allocates goodwill to the cash-generating units or groups of
+cash-generating units that are primarily equivalent to the
+E.ON Group's operating segments. These are subject to impair-
+ment tests on a regular basis in the fourth quarter of a given
+financial year or if there are indications that goodwill may be
+impaired. These measurements are generally based on the
+present value of the future cash flows of the cash-generating
+unit to which the respective goodwill is allocated. The cash
+flows are based on the E.ON Group's medium-term planning
+for the years 2017 to 2019. This detailed planning period
+is generally extended by two additional years (or more, if
+required) and extrapolated on the basis of assumptions
+about long-term growth rates. The discount rate used is the
+weighted average cost of capital for the relevant cash-
+generating unit. The result of this measurement depends to
+a large extent on management's estimates of future cash
+flows, the discount rate applied and the growth rate. The
+assumptions about the long-term development of the under-
+lying prices and the relevant regulatory influencing factors
+are in particular also of importance. Due to the complexity of
+the measurement and the considerable uncertainties relating
+to the underlying assumptions, this matter was of particular
+importance during our audit.
+3. Recoverability of goodwill
+c. The Company's disclosures about the change of the internal
+management and reporting structure in connection with the
+organizational and strategic realignment of the E.ON Group
+are contained in note 33 of the notes to the consolidated
+financial statements.
+b. As part of our audit, we, among other things, assessed the
+restructured internal reporting and the information regularly
+reported to E.ON SE's board of management. We compared
+this against the segment structure used in the segment
+reporting and questioned the decision making about manage-
+ment and allocation of resources on the level of the board
+of management. We were able to satisfy ourselves that the
+changes in the segment reporting were consistent with the
+reorganization of the internal management and reporting
+structure. We also evaluated the reallocation of goodwill. In
+doing so, we assessed whether the conceptual approach
+conforms to the rules set out in the standards and whether
+the allocated amounts were correctly calculated in accor-
+dance therewith. Furthermore, by examining the comparison
+of the fair values against the carrying amounts of the individ-
+ual segments, including the reallocated goodwill, we satisfied
+ourselves that the reallocation did not lead to any impair-
+ment losses.
+a. As at April 1, 2016, E.ON SE adjusted the internal manage-
+ment and reporting of the E.ON Group and consequently
+restructured and renamed the segments. At the same time,
+E.ON SE defined adjusted EBIT as Key Performance Indicator
+for purposes of internal management control and for the
+segment's performance. Since the internal management and
+reporting structure is used as a basis for determining the
+reportable segments under IFRS 8, there was a corresponding
+change in the E.ON Group's segment reporting. From our
+point of view, this matter was of particular importance because,
+in the context of capital market communications, segment
+reporting has a special significance and the segment structure
+also affects other accounting-related areas, including the
+allocation of goodwill and the associated impairment tests.
+2. Change in segment reporting
+c. The Company's disclosures pertaining to the recognition as
+a discontinued operation, the deconsolidation as well as the
+initial recognition of the Uniper Group as an associate are
+contained in note 4 of the notes to the consolidated financial
+statements.
+In total, we were able to satisfy ourselves that the transaction
+was properly accounted for, meaning that the associated
+measurements and recognition were appropriate and the
+impairments recognized during the year as well as the disposal
+loss were properly ascertained.
+102
+In addition, we examined that the deconsolidation process was
+correct from a technical standpoint and that the deconsoli-
+dation result had been correctly determined and accounted
+for. Furthermore, we performed audit procedures in order to
+ensure that the investment in Uniper SE was properly recog-
+nized as an associate and that the preliminary purchase price
+allocation in this context was properly performed for the ini-
+tial measurement.
+We conducted an in-depth assessment of the agreement
+that led to the loss of control and thus deconsolidation in
+order to ensure that the correct deconsolidation date was
+ascertained.
+With respect to the recognition of the discontinued operation
+as at September 30, 2016, we evaluated the requirements
+for de facto control in order to ensure that the continued
+recognition as a fully consolidated entity was appropriate.
+Furthermore, we assessed whether the non-controlling
+interests were correctly reported as required. The Uniper SE's
+share price was used for the first time to calculate the fair
+value to measure the disposal group at the level of the E.ON
+Group as at September 30, 2016. In this connection, we
+assessed the fair value measurement, in particular the appro-
+priateness of the additional standard market premium taken
+into consideration for reflecting the shareholder structure, as
+well as the correct measurement and recognition of impair-
+ment losses.
+We assessed whether the initial classification as a discontinued
+operation as of June 30, 2016, was appropriate and whether
+the recognition in the consolidated balance sheet, consolidated
+income statement and consolidated cash flow statement com-
+plied with the relevant standards and the generally accepted
+professional interpretations. With regard to the measurement
+of individual assets and liabilities at the level of the Uniper
+Group and the measurement of the Uniper disposal group at
+the level of the E.ON Group, we assessed the underlying
+assumptions as of the quarterly reporting dates in accordance
+with the procedure described under 3. We assessed whether
+the impairment losses on assets and liabilities reported in
+the interim financial statements as at June 30, 2016, were
+correctly calculated and accounted for.
+b. In order to ensure that the spin-off of the Uniper Group was
+properly accounted for, we, among other things, reviewed
+the bases of the spin-off transaction under company and
+stock corporation law and assessed the relevant contractual
+agreements and documents relating to the spin-off, in partic-
+ular the spin-off report, the spin-off agreement and the
+control termination agreement.
+By virtue of a so-called control termination agreement con-
+cluded between E.ON SE, its subsidiary E.ON Beteiligungen
+GmbH, which directly holds an interest in Uniper SE, and
+Uniper SE, E.ON SE ceded the de facto control of the Uniper
+Group as at December 31, 2016. Accordingly, the Uniper
+Group was deconsolidated and initially recognized as an asso-
+ciate in light of the significant influence that E.ON SE retained.
+At the Group level, the disposal resulted in a total loss of
+EUR 3.6 billion, due in particular to the recognition of currency
+translation losses in profit or loss that had previously been
+recognized directly in Group equity as accumulated "Other
+comprehensive income". From our point of view, this matter
+was of particular importance due to the complexity of the
+contractual agreements and the numerous material effects
+on the consolidated financial statements.
+Since the spin-off on September 9, 2016, E.ON SE still holds
+46.65% of the shares in Uniper SE. Since this shareholding
+affords a majority of the voting rights at the general meeting
+of Uniper SE and thus de facto control, the Uniper Group
+was, as had previously been the case, fully consolidated and
+reported as a discontinued operation in the interim financial
+statements of E.ON SE as at September 30, 2016. As a result
+of Uniper SE's initial IPO on September 12, 2016, the fair
+value of the disposal group as at September 30, 2016 was
+measured on the basis of the share price taking into consid-
+eration a standard market premium for reflecting the share-
+holder structure. In this context, additional impairment losses
+of EUR 7.0 billion were recognized for the disposal group i in
+the reporting period.
+time in the interim financial statements as at June 30, 2016.
+In this context, the measurement of fair value less costs of
+disposal led to impairment charges on property, plant and
+equipment amounting to EUR 2.9 billion and provisions for con-
+tingent losses amounting to EUR 0.9 billion being recognized.
+101
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+103
+Combined Group Management Report
+regulatory influencing factors against sector-specific expec-
+tations, and we assessed the parameters used to determine
+the discount rate applied, and evaluated the measurement
+model. Furthermore, we evaluated how the long-term growth
+rates used for terminal values were derived from the market
+expectations. We satisfied ourselves as to the appropriateness
+of the future cash flows used for the measurement of the
+cash-generating units by reconciling this data against general
+and sector-specific market expectations and by comparing it
+with the current budgets in the Group investment and finance
+plan for 2017 prepared by management and approved by
+the supervisory board as well as the planning for the years
+2018 and 2019 prepared by management and noticed
+by the supervisory board. We also examined that the costs
+for Group functions were properly determined, allocated,
+and included in the impairment tests of the respective cash-
+generating units.
+c. The Company's disclosures relating to the recoverability of
+goodwill are contained in note 14 of the notes to the consol-
+idated financial statements.
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In connection with our audit of the consolidated financial state-
+ments, our responsibility is to read the other information, and, in
+doing so, consider whether the other information is materially
+inconsistent with the consolidated financial statements or our
+knowledge obtained in the audit or otherwise appears to be
+materially misstated. If, based on the work we have performed,
+we conclude that there is a material misstatement of this other
+information, we are required to report that fact. We have nothing
+to report in this regard.
+Our audit opinion on the consolidated financial statements does
+not cover the other information and we do not express any form
+of assurance conclusion thereon.
+other parts of the annual report of E.ON SE, Düsseldorf, for
+the financial year ended on December 31, 2016, which were
+not subject of our audit.
+the Corporate Governance Statement pursuant to § 289a HGB
+and § 315 Abs. 5 HGB, as well as
+the Corporate Governance Report according to section 3.10
+of the German Corporate Governance Code,
+•
+•
+•
+Management is responsible for the other information. The other
+information comprises
+Other Information
+c. The Company's disclosures relating to the provisions for
+nuclear waste management are contained in note 25 of the
+notes to the consolidated financial statements.
+We were able to satisfy ourselves that the assessments and
+assumptions made were sufficiently substantiated to justify
+the measurement of the provisions. We consider the measure-
+ment parameters and assumptions used by management
+to be reproducible and we were able to verify that they were
+properly included in the determination of the provisions.
+The focal point of our audit of the 2016 consolidated financial
+statements was on considering the effects of the adopted
+Act: Among other things, we obtained estimates from the
+management and from experts, took into account resolutions
+and documents, e.g., pertaining to the planned payment of
+the risk surcharge, as well as external and internal opinions,
+and assessed, also by including other experts, what impact
+the adopted Act would have on the accounting treatment.
+The core issues were the proper allocation of the obligation
+amounts to E.ON SE's remaining decommissioning and
+dismantling obligations and the expected expiring disposal
+obligations as well as their measurement, including the asso-
+ciated recognition and measurement of dismantling costs.
+b. With the knowledge that the measurement of the provision
+is primarily based on management's assumptions and that
+these have a significant effect on consolidated net income, we
+in particular assessed the reliability of the information used
+as well as the appropriateness of the assumptions underlying
+the measurement. As part of our audit, we, among other things,
+evaluated the external expert report and compared this
+information, among other things, with agreements, market
+data and internal cost estimates. Furthermore, we assessed
+whether the interest rates with matching terms were properly
+derived from the market data. We evaluated the measurement
+model for the provisions using the applicable measurement
+parameters (including discounting) and scrutinized the planned
+timetable for utilizing the provisions.
+This matter was generally of particular importance during our
+audit since the amount of this provision depends to a large
+extent on management's assumptions and estimates and is
+therefore subject to considerable uncertainty. Regarding
+the obligations to decommission and dismantle nuclear power
+plants, this in particular relates to the dismantling scenario
+and the expected cost increases. Due to the material effects
+on the 2016 consolidated financial statements resulting from
+the adopted Act, this matter was again of particular impor-
+tance during our audit this year.
+104
+The accounting treatment of the Act and the lower interest
+rate as of the balance sheet date led to an addition to provi-
+sions totaling approximately EUR 4.3 billion. The increase in
+the provisions on the basis of estimates was capitalized to the
+extent they relate to facilities still in operation (approximately
+EUR 1.0 billion). This as well as other necessary write-downs
+in connection with accounting for the effects of the Act
+weighed down the consolidated net income attributable to
+E.ON shareholders by approximately EUR 3.6 billion.
+For E.ON SE's remaining future obligations relating primarily
+to the decommissioning and dismantling of nuclear power
+plants, the nominal series of payments based on the cost esti-
+mates is initially raised to the future expected cost level and
+then discounted using a discount rate with matching terms.
+The E.ON Group's contribution obligation to the fund amounts
+to approximately EUR 10.0 billion. This already includes an
+optional risk surcharge – the payment of which nuclear power
+plant operators use to completely release themselves from
+the obligation to make any additional contributions (release
+from liability) in accordance with the Act - plus the statutory
+interest that accrues on the payment amount from January 1,
+2017, until the payment date. E.ON SE's management have
+decided to pay the entire amount, including risk surcharge
+and interest, as at July 1, 2017, and has therefore classified
+the relevant provision as a short-term provision as at
+December 31, 2016. Given that the discount rate was 0%,
+the provision was not discounted.
+-
+until the EU Commission has completed its review to deter-
+mine whether or not the state aid complies with EU rules.
+The Act provides in particular for the formation of a fund to
+finance the disposal of nuclear waste and for the transfer of
+the obligations to finance and manage the disposal of radio-
+active waste from the operators of nuclear power plants to
+the Federal Republic of Germany against the transfer of the
+appropriate cash funds by the operators. Due to the high
+likelihood - in E.ON SE's assessment – that the Act will enter
+into force, the provisions had already been recognized as at
+December 31, 2016 on its basis.
+In December 2016, the German Bundestag and Bundesrat
+adopted the German Act on Reorganizing Responsibility for
+Nuclear Waste Management ("Gesetz zur Neuordnung der
+Verantwortung in der kerntechnischen Entsorgung"); the Act
+was published in the Federal Law Gazette ("Bundesgesetz-
+blatt") on February 2, 2017. The Act cannot enter into force
+The provisions were recognized in accordance with German
+nuclear energy law and contain all obligations relating to
+the decommissioning and dismantlement of nuclear power
+plants, the disposal of spent nuclear fuel rods and nuclear
+waste as well as any costs associated with the interim and
+final storage of nuclear waste that are determined on the basis
+of the legal bases, contractual agreements, expert reports
+as well as external and internal cost estimates.
+4. Provisions for nuclear waste management obligations
+a. Provisions for nuclear waste management amounting to
+EUR 21.4 billion (33.6% of consolidated total assets) are
+recognized in the consolidated financial statements of E.ON
+SE as at December 31, 2016. These are recognized at their
+expected settlement amount, which is generally discounted
+as of the balance sheet date.
+Overall, we consider the measurement inputs and assumptions
+used by management to be in line with our expectations, and
+we were able to verify that they were properly included in
+the measurement models.
+Strategy and Objectives
+Strategy and Objectives
+Report of the Supervisory Board
+-2,165
+-2,220
+(4)
+-13,842
+-4,157
+-16,007
+-6,377
+-8,450
+-6,999
+-7,557
+622
+(13)
+-1.22
+-1.29
+-3.11
+-2.31
+-4.33
+-3.60
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+2In the previous year, expenses for concession payments amounting to €0.3 billion were recognized in other operating expenses. In the current year, these expenses are contained in cost of materials
+in the amount of €0.3 billion.
+-411
+450
+-12
+|உ
+-1,314
+295
+-19
+343
+-728
+E.ON Stock
+-440
+-1,931
+CEO Letter
+a. In the financial year 2016, E.ON SE implemented the organi-
+zational and legal realignment of the E.ON Group resolved
+at the end of 2014, and implemented the spin-off into two
+independent corporate groups. On June 8, 2016, the general
+meeting of E.ON SE approved the spin-off of a majority inter-
+est of 53.35% in Uniper SE. Due to the Company's plans to
+deconsolidate the companies belonging to the Uniper Group
+(hereinafter the "Uniper Group") within one year, the Uniper
+Group was reported as a discontinued operation for the first
+1. Spin-off of a majority shareholding in and deconsolidation
+of Uniper SE
+c. Reference to further information
+b. Audit approach and findings
+a. Matter and issue
+Our presentation of these key audit matters has been structured
+as follows:
+4. Provisions for nuclear waste management obligations
+2. Change in segment reporting
+3. Recoverability of goodwill
+1. Spin-off of a majority shareholding in and deconsolidation of
+Uniper SE
+In our view, the key audit matters were as follows:
+Key audit matters are those matters that, in our professional
+judgement, were of most significance in our audit of the consol-
+idated financial statements for the financial year from January 1,
+to December 31, 2016. These matters were addressed in the
+context of our audit of the consolidated financial statements
+as a whole, and in forming our audit opinion thereon, and we do
+not provide a separate audit opinion on these matters.
+Key Audit Matters
+fulfilled our other German ethical responsibilities in accordance
+with these requirements. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis
+for our audit opinion.
+We conducted our audit in accordance with § 317 HGB and
+German generally accepted standards for the audit of financial
+statements promulgated by the Institut der Wirtschaftsprüfer
+(Institute of Public Auditors in Germany) (IDW), and additionally
+considered the International Standards on Auditing (ISA). Our
+responsibilities under those provisions and standards, as well as
+supplementary standards, are further described in the "Auditor's
+Responsibilities for the Audit of the Consolidated Financial
+Statements" section of our report. We are independent of the
+Group entities in accordance with the provisions under German
+commercial law and professional requirements, and we have
+Basis for Audit Opinion on the Consolidated
+Financial Statements
+According to § 322 Abs. 3 Satz 1 erster Halbsatz HGB, we state
+that our audit has not led to any reservations with respect to the
+propriety of the consolidated financial statements.
+According to § (Article) 322 Abs. (paragraph) 3 Satz (sentence) 1
+zweiter Halbsatz (second half sentence) HGB ("Handelsgesetz-
+buch": German Commercial Code), we state that, in our opinion,
+based on the findings of our audit, the accompanying consolidated
+financial statements comply, in all material respects, with IFRS,
+as adopted by the EU, and the additional requirements of Ger-
+man commercial law pursuant to § 315a Abs. 1 HGB and give
+a true and fair view of the net assets and financial position of
+the Group as at December 31, 2016, as well as the results of
+operations for the financial year from January 1, to December 31,
+2016, in accordance with these requirements.
+We have audited the consolidated financial statements of E.ON
+SE, Düsseldorf, and its subsidiaries (the Group), which comprise
+the consolidated balance sheet as at December 31, 2016, the
+consolidated income statement, the consolidated statement of
+recognized income and expenses, the consolidated statement
+of changes in equity and the consolidated statement of cash flows
+for the financial year from January 1, to December 31, 2016,
+and notes to the consolidated financial statements, including a
+summary of significant accounting policies.
+Audit Opinion on the Consolidated Financial
+Statements
+Report on the Audit of the Consolidated
+Financial Statements
+To E.ON SE, Düsseldorf
+100
+Statements
+Financial
+Consolidated
+-1,638
+(10)
+Combined Group Management Report
+-1,480
+Summary of Financial Highlights and Explanations
+(8)
+6,337
+7,448
+(7)
+510
+529
+(6)
+Personnel costs
+Cost of materials²
+Other operating income
+Own work capitalized
+6
+8
+Changes in inventories (finished goods and work in progress)
+42,656
+38,173
+(5)
+-1,172
+-1,002
+Sales
+Electricity and energy taxes
+43,828
+39,175
+Sales including electricity and energy taxes
+20151
+2016
+Note
+-32,325
+€ in millions
+-33,184
+-2,839
+from net income/loss
+Consolidated Financial Statements
+from discontinued operations
+from continuing operations
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted
+Attributable to non-controlling interests
+Attributable to shareholders of E.ON SE
+in €
+Net income/loss
+Income/Loss from discontinued operations, net
+Income/Loss from continuing operations
+Income taxes
+Interest and similar expenses
+Income/Loss from other securities, interest and similar income
+Income/Loss from equity investments
+Financial results
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from companies accounted for under the equity method
+-7,968
+-7,867
+(7)
+-5,669
+-3,823
+(14)
+Other operating expenses²
+Depreciation, amortization and impairment charges
+-2,995
+(11)
+E.ON SE and Subsidiaries Consolidated Statements of Income
+1
+(German Public Auditor)
+Our audit has not led to any reservations with respect to the
+propriety of the group management report.
+In our opinion, based on the findings of our audit, the accompa-
+nying group management report as a whole provides a suitable
+view of the Group's position. In all material respects, the group
+management report is consistent with the consolidated financial
+statements, complies with legal requirements and suitably
+presents the opportunities and risks of future development.
+We have audited the group management report of E.ON SE,
+Düsseldorf, which is combined with the Company's management
+report, for the financial year from January 1, to December 31,
+2016.
+Audit Opinion on the Group Management Report
+Report on the Audit of the Group Management
+Report
+Other legal and Regulatory Requirements
+From the matters communicated with those charged with gov-
+ernance, we determine those matters that were of most signifi-
+cance in the audit of the consolidated financial statements of
+the current period and are therefore the key audit matters. We
+describe these matters in our report on the audit of the consoli-
+dated financial statements unless law or regulation precludes
+public disclosure about the matter.
+We also provide those charged with governance with a state-
+ment that we have complied with relevant ethical requirements
+regarding independence, and to communicate with them all
+relationships and other matters that may reasonably be thought
+to bear on our independence, and related safeguards.
+We communicate with those charged with governance, among
+other matters, the planned scope and timing of the audit and
+significant audit findings, including any significant deficiencies
+in internal control that we identify during our audit.
+Obtain sufficient and appropriate audit evidence regarding
+the financial information of the entities or business activities
+within the Group to express an audit opinion on the consoli-
+dated financial statements. We are responsible for the direc-
+tion, supervision and performance of the group audit. We
+remain solely responsible for our audit opinion.
+Evaluate the overall presentation, structure and content of the
+consolidated financial statements, including the disclosures,
+and whether the consolidated financial statements represent
+the underlying transactions and events in a manner that the
+consolidated financial statements give a true and fair view of
+the net assets and financial position as well as the results of
+operations of the Group in accordance with IFRS, as adopted
+by the EU, and the additional German legal requirements
+applicable under § 315a Abs. 1 HGB.
+106
+and the reasonableness of accounting estimates and related
+disclosures made by management.
+Evaluate the appropriateness of accounting policies used
+Obtain an understanding of internal control relevant to the
+audit in order to design audit procedures that are appropriate
+in the circumstances, but not for the purpose of expressing
+an opinion on the effectiveness of the Group's internal control.
+Identify and assess the risks of material misstatement of
+the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to
+those risks, and obtain audit evidence that is sufficient and
+appropriate to provide a basis for our opinion. The risk of
+not detecting a material misstatement resulting from fraud
+is higher than for one resulting from error, as fraud may
+involve collusion, forgery, intentional omissions, misrepre-
+sentations, or the override of internal control.
+•
+•
+•
+As part of an audit in accordance with § 317 HGB and German
+generally accepted standards for the audit of financial statements
+promulgated by the Institut der Wirtschaftsprüfer (Institute of
+Public Auditors in Germany) (IDW), under additional consideration
+of the ISA, we exercise professional judgment and maintain
+professional skepticism throughout the audit. We also:
+Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably
+be expected to influence economic decisions of users taken on
+the basis of these consolidated financial statements.
+Our objective is to obtain reasonable assurance about whether
+the consolidated financial statements as a whole are free from
+material misstatement, whether due to fraud or error, and to
+issue an auditor's report that includes our audit opinion on the
+consolidated financial statements. Reasonable assurance is a
+high level of assurance, but is not a guarantee that an audit
+conducted in accordance with § 317 HGB and German gener-
+ally accepted standards for the audit of financial statements
+promulgated by the Institut der Wirtschaftsprüfer (Institute of
+Public Auditors in Germany) (IDW), under additional consider-
+ation of the ISA, will always detect a material misstatement.
+Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements
+The supervisory board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consolidated
+financial statements.
+In preparing the consolidated financial statements, management
+is responsible for assessing the Group's ability to continue as a
+going concern, disclosing, as applicable, matters related to going
+concern and using the going concern basis of accounting unless
+management either intends to liquidate the Group or to cease
+operations, or has no realistic alternative but to do so.
+105
+108
+Basis for Audit Opinion on the Group Management Report
+We conducted our audit of the group management report in
+accordance with § 317 Abs. 2 HGB and German generally
+accepted standards for the audit of management reports pro-
+mulgated by the Institut der Wirtschaftsprüfer (Institute of
+Public Auditors in Germany) (IDW). We believe that the audit
+evidence we have obtained is sufficient and appropriate to
+provide a basis for our audit opinion.
+CEO Letter
+Conclude on the appropriateness of management's use of
+the going concern basis of accounting and, based on the audit
+evidence obtained, whether a material uncertainty exists
+related to events or conditions that may cast significant doubt
+on the Group's ability to continue as a going concern. If we
+conclude that a material uncertainty exists, we are required
+to draw attention in our auditor's report to the related dis-
+closures in the consolidated financial statements or the group
+management report or, if such disclosures are inadequate,
+to modify our audit opinion. Our conclusions are based on the
+audit evidence obtained up to the date of our auditor's report.
+However, future events or conditions may cause the Group to
+cease to continue as a going concern.
+E.ON Stock
+Aissata Touré
+Wirtschaftsprüferin
+Report of the Supervisory Board
+Markus Dittmann
+Wirtschaftsprüfer
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+Düsseldorf, March 7, 2017/limited to the above mentioned
+adjustments: March 14, 2017
+• We obtain an understanding of the policies and procedures
+(systems) relevant to the audit of the group management
+report in order to design audit procedures that are appropriate
+in the circumstances, but not for the purpose of expressing
+an audit opinion on the effectiveness of these policies and
+procedures (systems).
+The auditor responsible for the audit is Aissata Touré.
+Responsible Auditor
+We issue this auditor's report on the basis of our duty-bound
+audit of the consolidated financial statements concluded as
+of March 7, 2017, and our supplementary audit concluded as
+of March 14, 2017, which refers to the amendment of matters
+that have become known subsequent to the preparation of the
+consolidated financial statements and which are described in
+note 35 ("Subsequent Events") to the consolidated financial
+statements. The audit opinion on the consolidated financial state-
+ments has not been changed as a result of the supplementary
+audit compared to the audit opinion before the amendment.
+We are also not issuing a separate audit opinion on individual
+disclosures in the group management report; our audit opinion
+covers the group management report as a whole.
+We perform audit procedures on the prospective information
+presented by management in the group management report.
+Based on appropriate and sufficient audit evidence, we
+hereby, in particular, evaluate the material assumptions used
+by management as a basis for the prospective information
+and assess the reasonableness of these assumptions as well
+as the appropriate derivation of the prospective information
+from these assumptions. We are not issuing a separate audit
+opinion on the prospective information or the underlying
+assumptions. There is a significant, unavoidable risk that
+future events will deviate significantly from the prospective
+information.
+•
+•
+Emphasis of Matter and Other Matter - Supple-
+mentary Audit
+Responsibilities of Management and Those Charged with
+Governance for the Consolidated Financial Statements
+Management is responsible for the preparation of the consolidated
+financial statements, which comply with IFRS, as adopted by
+the EU, and the additional German legal requirements applicable
+under § 315a Abs. 1 HGB, and give a true and fair view of the
+net assets, financial position and results of operations of the
+Group in accordance with these requirements. Furthermore,
+management is responsible for such internal control as manage-
+ment determines is necessary to enable the preparation of
+consolidated financial statements that are free from material
+misstatement, whether due to fraud or error.
+Strategy and Objectives
+The audit of the group management report is integrated into
+the audit of the consolidated financial statements.
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+107
+Responsibilities of Management and Those Charged with
+Governance for the Group Management Report
+Management is responsible for the preparation of the group
+management report, which as a whole provides a suitable view
+of the Group's position, is consistent with the consolidated
+financial statements, complies with legal requirements, and
+suitably presents the opportunities and risks of future develop-
+ment. Furthermore, management is responsible for such policies
+and procedures (systems) as management determines are nec-
+essary to enable the preparation of a group management report
+in accordance with the German legal requirements applicable
+under § 315 Abs. 1 HGB and to provide sufficient and appropri-
+ate evidence for the assertions in the group management report.
+Combined Group Management Report
+Auditor's Responsibilities for the Audit of the Group
+Management Report
+The supervisory board is responsible for overseeing the Group's
+financial reporting process for the preparation of the group
+management report.
+•
+(German Public Auditor)
+Our objective is to obtain reasonable assurance about whether
+the group management report as a whole provides a suitable
+view of the Group's position as well as, in all material respects,
+is consistent with the consolidated financial statements as well
+as the findings of our audit, complies with legal requirements,
+and suitably presents the opportunities and risks of future devel-
+opment, and to issue an auditor's report that includes our audit
+opinion on the group management report.
+As part of an audit, we examine the group management report
+in accordance with § 317 Abs. 2 HGB and German generally
+accepted standards for the audit of management reports pro-
+mulgated by the IDW. In this connection, we draw attention to
+the following:
+-75
+16,429
+-1,714
+19,077
+-561
+3,209
+16,429
+-1,714
+-1,077
+-75
+2,648
+-441
+-421
+656
+95
+561
+20
+-6,377
+-6,798
+៩៩ន
+20
+622
+642
+642
+622
+|៩៩ន
+3,209
+-1,002
+-561
+-8,450
+19,077
+-7,557
+-7,440
+-6,999
+-13,298
+-5,431
+-5,431
+-7,867
+7
+7
+7
+66
+62
+-1,144
+2,648
+-168
+4
+-168
+-976
+0
+246
+246
+246
+0
+-3,667
+4,978
+4,978
+-8,645
+62
+34
+related to put options
+34
+Non-controlling
+to shareholders
+Equity attributable
+Treasury shares
+115
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹The changes recognized here in the current year include the entirety of the changes attributable to Uniper entities, which are then allocated to non-controlling interests in the amount of €301 million.
+-1,251
+353
+-1,150
+-8,495
+-342
+111
+2,268
+-1,454
+-342
+111
+2,268
+-1,454
+-8,450
+-342
+interests (before
+34
+Reclassification
+of E.ON SE
+-10
+-1,129
+-163
+-163
+-966
+-10
+-18
+-18
+-18
+167
+167
+167
+260
+260
+788
+-142
+-142
+-142
+26,713
+2,128
+-595
+2,723
+24,585
+-2,502
+Total
+interests
+-7,557
+reclassification)
+Non-controlling
+-16,007
+or significant influence, gains and losses from these dilutive
+transactions are included in the income statement under other
+operating income or expenses.
+2,126
+8.95
+9.29
+9.60
+9.09
+NOK
+Norwegian krone
+0.73
+0.82
+0.73
+0.86
+GBP
+British pound
+Romanian leu
+2015
+2015
+2016
+Code
+ISO
+€1, annual
+average rate
+€1, rate at
+year-end
+Currencies
+Interest income is recognized pro rata using the effective interest
+method.
+b) Interest Income
+The Company generally recognizes revenue upon delivery of
+goods to customers or purchasers, or upon completion of services
+rendered. Delivery is deemed complete when the risks and
+rewards associated with ownership have been transferred to the
+buyer as contractually agreed, compensation has been contrac-
+tually established and collection of the resulting receivable
+is probable. Revenues from the sale of goods and services are
+measured at the fair value of the consideration received or
+receivable. They reflect the value of the volume supplied, including
+an estimated value of the volume supplied to customers between
+the date of the last invoice and the end of the period.
+Revenues include the surcharge mandated by the German
+Renewable Energy Sources Act and are presented net of sales
+taxes, returns, rebates and discounts, and after elimination of
+intragroup sales.
+Revenues are generated primarily from the sale of electricity
+and gas to industrial and commercial customers, to retail cus-
+tomers and to wholesale markets. Revenues earned from the
+distribution of electricity and gas and from deliveries of steam,
+heat and water are also recognized under revenues.
+2016
+RON
+4.54
+4.52
+111
+The electricity tax is levied on electricity delivered to retail cus-
+tomers and is calculated on the basis of a fixed tax rate per kilo-
+watt-hour ("kWh"). This rate varies between different classes of
+customers. Electricity and energy taxes paid are deducted from
+sales revenues on the face of the income statement if those
+taxes are levied upon delivery of energy to the retail customer.
+Electricity and Energy Taxes
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+c) Dividend Income
+1.11
+3.03
+310.00
+3.71
+3.18
+3.34
+309.83 315.98 311.44
+1.09
+1.11
+1.05
+USD
+U.S. dollar
+HUF
+Hungarian forint
+TRY
+Turkish lira
+9.35
+27.28
+27.03
+27.02 27.02
+CZK
+Czech crown
+9.47
+9.19
+9.55
+SEK
+Swedish krona
+4.45
+4.49
+a) Revenues
+583
+Recognition of Income
+Foreign currency translation effects that are attributable to the
+cost of monetary financial instruments classified as available for
+sale are recognized in income. In the case of fair-value adjust-
+ments of monetary financial instruments and for non-monetary
+financial instruments classified as available for sale, the foreign
+currency translation effects are recognized in equity as a compo-
+nent of other comprehensive income.
+If a subsidiary or associate sells shares to a third party, leading
+to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor can
+direct the activities relevant to the business performance of
+the entity, participate in this business performance in the form
+of variable returns and be able to influence the performance
+and the related returns through its involvement. Control is nor-
+mally deemed established if E.ON directly or indirectly holds a
+majority of the voting rights in the investee. In structured entities,
+control can be established by means of contractual arrangements
+if control is not demonstrated through possession of a majority
+of the voting rights.
+Scope of Consolidation
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared based on historical cost,
+with the exception of available-for-sale financial assets that are
+measured at fair value and of financial assets and liabilities
+(including derivative financial instruments) that are recognized
+in income and measured at fair value.
+Principles
+The Consolidated Financial Statements of E.ON SE, Essen, reg-
+istered office in Düsseldorf, registered in the Commercial Register
+of Düsseldorf District Court under number HRB 69043, have
+been prepared in accordance with Section 315a (1) of the German
+Commercial Code ("HGB") and with those International Financial
+Reporting Standards ("IFRS") and IFRS Interpretations Commit-
+tee interpretations ("IFRIC") that were adopted by the European
+Commission for use in the EU as of the end of the fiscal year,
+and whose application was mandatory as of December 31, 2016.
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+116
+Notes
+1,287
+2,342
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into line
+with those of the Group. Intercompany receivables, liabilities
+and results between Group companies are eliminated in the
+consolidation process.
+-554
+-1,055
+-1,714
+4,314
+2,277
+2,277
+2,037
+-1,605
+-151
+-151
+-1,454
+2,709
+2,126
+2,896
+Associated Companies
+An associate is an investee over whose financial and operating
+policy decisions E.ON has significant influence and that is not
+controlled by E.ON or jointly controlled with E.ON. Significant
+influence is presumed if E.ON directly or indirectly holds at least
+20 percent, but not more than 50 percent, of an entity's voting
+rights.
+Interests in associated companies are accounted for using the
+equity method.
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than the
+euro are translated using the exchange rates applicable on the
+balance sheet date, while items of the statements of income
+are translated using annual average exchange rates. Material
+transactions of foreign subsidiaries occurring during the fiscal
+year are translated in the financial statements using the exchange
+rate at the date of the transaction. Differences arising from
+the translation of assets and liabilities compared with the corre-
+sponding translation of the prior year, as well as exchange rate
+differences between the income statement and the balance
+sheet, are reported separately in equity as a component of other
+comprehensive income.
+Notes
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the trans-
+action. At each balance sheet date monetary foreign currency
+items are adjusted to the exchange rate on the reporting date;
+any gains and losses resulting from fluctuations in the relevant
+currencies are recognized in income and reported as other oper-
+ating income and other operating expenses, respectively. Gains
+and losses from the translation of non-derivative financial instru-
+ments used in hedges of net investments in foreign operations
+are recognized in equity as a component of other comprehensive
+income. The ineffective portion of the hedging instrument is
+immediately recognized in income.
+Foreign Currency Translation
+Intangible assets must be recognized separately if they are
+clearly separable or if their recognition arises from a contractual
+or other legal right. Provisions for restructuring measures may
+not be recorded in a purchase price allocation. If the purchase
+price paid exceeds the proportional share in the net assets at
+the time of acquisition, the positive difference is recognized as
+goodwill. No goodwill is recognized for positive differences
+attributable to non-controlling interests. A negative difference
+is recognized in income.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do not
+coincide with a loss of control.
+Transactions with holders of non-controlling interests are treated
+in the same way as transactions with investors. Should the
+acquisition of additional shares in a subsidiary result in a differ-
+ence between the cost of purchasing the shares and the carrying
+amounts of the non-controlling interests acquired, that difference
+must be fully recognized in equity.
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The
+choice of method can be made on a case-by-case basis. The
+partial goodwill method is generally used within the E.ON Group.
+cases,
+Business combinations are accounted for by applying the pur-
+chase method, whereby the purchase price is offset against
+the proportional share in the acquired company's net assets. In
+doing so, the values at the acquisition date that corresponds to
+the date at which control of the acquired company was attained
+are used as a basis. The acquiree's identifiable assets, liabilities
+and contingent liabilities are generally recognized at their fair
+values irrespective of the extent attributable to non-controlling
+interests. The fair values are determined using published exchange
+or market prices at the time of acquisition in the case of market-
+able securities, for example, and in the case of land, buildings and
+major technical equipment, generally using independent expert
+reports that have been prepared by third parties. If exchange or
+market prices are unavailable for consideration, fair values are
+derived from market prices for comparable assets or comparable
+transactions. If these values are not directly observable, fair
+value is determined using appropriate valuation methods. In such
+, E.ON determines fair value using the discounted cash
+flow method by discounting estimated future cash flows by a
+weighted-average cost of capital. Estimated cash flows are
+consistent with the internal mid-term planning data for the next
+three years, followed by two additional years of cash flow pro-
+jections, which are extrapolated until the end of an asset's useful
+life using a growth rate based on industry and internal projec-
+tions. The discount rate reflects the specific risks inherent in the
+acquired activities.
+Business Combinations
+A joint operation exists when E.ON and the other investors directly
+control this activity, but unlike in the case of a joint venture they
+do not have a claim to the changes in net assets from the opera-
+tion, but instead have direct rights to individual assets or direct
+obligations with respect to individual liabilities in connection
+with the operation. In a joint operation, assets and liabilities, as
+well as revenues and expenses, are recognized pro rata according
+to the rights and obligations attributable to E.ON.
+Joint Operations
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation
+process on a pro-rata basis if and insofar as these are material.
+Joint Ventures
+117
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The financial statements of equity interests accounted for using
+the equity method are generally prepared using accounting that
+is uniform within the Group.
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recover-
+able amount. If the carrying amount exceeds the recoverable
+amount, the carrying amount is adjusted for this difference. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed accordingly.
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro-rata
+basis if and insofar as these are material.
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration
+are generally not recognized. Any difference between the cost
+of the investment and the remeasured value of its net assets is
+recognized in the Consolidated Financial Statements as part of
+the carrying amount.
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside
+the European Monetary Union:
+118
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+2Additional information on operating cash flow is provided in Note 33.
+-4
+12
+1,191
+17,403
+40,081
+63,699
+113,693
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Equity and Liabilities
+111
+December 31,
+€ in millions
+Note
+2016
+2015
+Capital stock
+(19)
+2,001
+2,001
+Additional paid-in capital
+(20)
+9,201
+12,558
+Retained earnings
+(4)
+5,189
+5,574
+923
+73,612
+Inventories
+(16)
+785
+2,546
+Financial receivables and other financial assets
+(17)
+463
+1,493
+Trade receivables and other operating assets
+(17)
+6,719
+25,331
+Income tax assets
+Accumulated other comprehensive income
+Liquid funds
+Restricted cash and cash equivalents
+Cash and cash equivalents
+Assets held for sale
+Current assets
+Total assets
+(10)
+851
+1,330
+(18)
+8,573
+8,190
+2,147
+2,078
+852
+Securities and fixed-term deposits
+46,296
+Treasury shares
+Non-controlling interests (before reclassification)
+1,562
+Provisions for pensions and similar obligations
+(24)
+4,009
+4,210
+Miscellaneous provisions
+(25)
+15,609
+26,445
+Deferred tax liabilities
+(10)
+2,554
+5,655
+Non-current liabilities
+39,287
+61,172
+Financial liabilities
+(26)
+3,792
+2,788
+Trade payables and other operating liabilities
+(26)
+6,888
+24,811
+Income taxes
+(10)
+434
+814
+Miscellaneous provisions
+1,433
+(10)
+Income taxes
+8,346
+Reclassification related to put options
+(21)
+-8,495
+9,419
+(22)
+-2,048
+-5,835
+(19)
+-1,714
+-1,714
+-1,055
+16,429
+2,896
+3,209
+Equity attributable to shareholders of E.ON SE
+-554
+Non-controlling interests
+Equity
+(23)
+2,342
+2,648
+1,287
+19,077
+Financial liabilities
+(26)
+10,435
+14,954
+Operating liabilities
+(26)
+5,247
+-561
+Non-current assets
+4,096
+1,441
+Unrealized changes
+Reclassification adjustments recognized in income
+Companies accounted for under the equity method
+Unrealized changes
+-331
+151
+-673
+499
+342
+-348
+-106
+-498
+295
+-118
+-401
+-380
+4,865
+-142
+926
+-210
+3,939
+68
+-87
+-162
+-229
+-248
+Reclassification adjustments recognized in income
+142
+86
+Income taxes
+Currency translation adjustments
+Reclassification adjustments recognized in income
+Unrealized changes
+Available-for-sale securities
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+109
+€ in millions
+Net income/loss
+Remeasurements of defined benefit plans
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+Income taxes
+-27
+Items that will not be reclassified subsequently to the income statement
+2015
+-16,007
+-6,377
+-1,401
+1,323
+-2
+12
+-202
+-679
+-1,605
+656
+Cash flow hedges
+Unrealized changes
+Reclassification adjustments recognized in income
+2016
+-426
+Items that might be reclassified subsequently to the income statement
+4,314
+6,441
+(14)
+4,465
+(14)
+25,242
+38,997
+(15)
+6,352
+4,536
+(15)
+5,148
+5,926
+821
+1,202
+3,463
+4,327
+Financial receivables and other financial assets
+(17)
+553
+3,571
+Operating receivables and other operating assets
+(17)
+1,761
+5,534
+Income tax assets
+(10)
+7
+46
+Deferred tax assets
+(10)
+4,724
+(25)
+(14)
+Equity investments
+-1,077
+Total income and expenses recognized directly in equity
+2,709
+-421
+Total recognized income and expenses (total comprehensive income)
+Attributable to shareholders of E.ON SE
+-13,298
+-6,798
+-7,867
+-7,440
+Continuing operations
+Discontinued operations
+Attributable to non-controlling interests
+-3,816
+-2,566
+Non-current securities
+-4,051
+-5,431
+642
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Assets
+110
+December 31,
+€ in millions
+Note
+2016
+2015
+Goodwill
+Intangible assets
+Property, plant and equipment
+Companies accounted for under the equity method
+Other financial assets
+-4,874
+12,008
+4,280
+Liabilities associated with assets held for sale
+358
+**
+240
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+"Cash and cash equivalents at the beginning of the year also includes the holdings of Uniper, which is reported as a discontinued operation, and holdings of €1 million in E.ON E&P UK, which is
+reported as a disposal group. In the prior year, holdings in the Spain region of €4 million and the generation activities with a combined €6 million in Spain and Italy, which were presented as disposal
+groups, were also included. Cash and cash equivalents of €15 million as of January 1, 2015, of the Italy region were reclassified to the continuing operations in the cash flow statement, but not in
+the consolidated balance sheet.
+5Cash and cash equivalents at the end of the previous year also include the holdings of E.ON E&P UK of €1 million, which is reported as a disposal group.
+6Cash and cash equivalents from continuing operations at the end of the previous year also include the holdings of E.ON E&P UK of €1 million, which is reported as a disposal group.
+Statement of Changes in Equity
+€ in millions
+Balance as of January 1, 2015
+Change in scope of consolidation
+Treasury shares repurchased/sold
+Capital increase
+Capital decrease
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to
+put options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Changes in accumulated
+Remeasurements of defined benefit plans
+other comprehensive income
+Balance as of December 31, 2015
+Balance as of January 1, 2016
+Change in scope of consolidation
+Treasury shares repurchased/sold
+Capital increase
+Capital decrease
+-1,114
+-150
+263
+445
+Summary of Financial Highlights and Explanations
+113
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+€ in millions
+Net increase/decrease in cash and cash equivalents
+Effect of foreign exchange rates on cash and cash equivalents
+Cash and cash equivalents at the beginning of the year4
+2016
+2015¹
+639
+2,034
+-87
+-60
+5,190
+Dividends
+3,216
+-168
+5,574
+5,190
+Less: Cash and cash equivalents of discontinued operations at the end of the year
+0
+299
+Cash and cash equivalents of continuing operations at the end of the year6
+Supplementary information on cash flows from operating activities
+Income taxes paid (less refunds)
+5,574
+4,891
+Interest paid
+Interest received
+Dividends received
+-483
+-1,005
+Cash and cash equivalents from the deconsolidation of discontinued operations
+Cash and cash equivalents at the end of the year5
+Share additions/reductions
+Net additions/disposals from
+reclassification related to
+-6,999
+561
+-434
+-468
+-100
+561
+-434
+-468
+-100
+2,001
+12,558
+9,419
+-5,351
+419
+-100
+-903
+12,558
+9,419
+-5,351
+419
+-903
+-3,357
+-7,029
+1,920
+-173
+-6
+2,001
+9,201
+-976
+-5
+13
+2,001
+Consolidated Financial Statements
+-468
+-6,438
+put options
+Total comprehensive income
+Net income/loss
+Other comprehensive income¹
+Remeasurements of defined benefit plans
+Changes in accumulated
+other comprehensive income
+Balance as of December 31, 2016
+114
+Changes in accumulated
+other comprehensive income
+Currency
+Additional
+Retained
+-434
+Capital stock
+2,001
+earnings
+translation
+adjustments
+Available-for-
+sale securities
+13,077
+16,842
+-4,917
+887
+-519
+-9
+-966
+-10
+Cash flow
+hedges
+-803
+paid-in capital
+-9,904
+Combined Group Management Report
+E.ON Stock
+Intangible assets and property, plant and equipment
+-42
+-107
+Equity investments
+-45
+-175
+Securities (>3 months)
+-116
+-228
+Changes in operating assets and liabilities and in income taxes
+-1,294
+-620
+Inventories and carbon allowances
+63
+326
+Trade receivables
+68
+683
+Other operating receivables and income tax assets
+-462
+2,028
+Trade payables
+243
+116
+Other operating liabilities and income taxes
+-1,206
+-3,773
+Cash provided by (used for) operating activities of continuing operations (operating cash flow)²
+Cash provided by (used for) operating activities of discontinued operations
+2,961
+-510
+-203
+Gain/Loss on disposal of
+382
+(4)
+3
+751
+Current liabilities
+23,125
+33,444
+Total equity and liabilities
+63,699
+113,693
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+112
+€ in millions
+Net income/loss
+2016
+4,191
+20151
+-6,377
+Income/Loss from discontinued operations, net
+13,842
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+3,823
+5,669
+Changes in provisions
+3,142
+78
+Changes in deferred taxes
+-66
+1,412
+Other non-cash income and expenses
+-276
+-16,007
+2,332
+1,988
+Cash provided by (used for) operating activities
+Cash dividends paid to non-controlling interests
+Proceeds from financial liabilities
+Repayments of financial liabilities
+-3,041
+1,443
+-1,325
+-1,730
+-4,366
+-287
+429
+130
+-976
+-706
+-113
+Cash dividends paid to shareholders of E.ON SE
+-112
+870
+-2,029
+-4,094
+Cash provided by (used for) financing activities of continuing operations
+-1,152
+-3,912
+Cash provided by (used for) financing activities of discontinued operations
+Cash provided by (used for) financing activities
+864
+54
+-288
+-3,858
+³No material netting has taken place in either of the years presented here.
+CEO Letter
+Report of the Supervisory Board
+1,537
+Strategy and Objectives
+Payments received/made from changes in capital³
+Cash provided by (used for) investing activities of discontinued operations
+5,293
+6,179
+Proceeds from disposal of
+Intangible assets and property, plant and equipment
+Equity investments
+Purchases of investments in
+836
+4,305
+363
+118
+473
+4,187
+-3,169
+-3,227
+Cash provided by (used for) investing activities
+Intangible assets and property, plant and equipment
+-2,982
+Equity investments
+-134
+-245
+Proceeds from disposal of securities (> 3 months) and of financial receivables and fixed-term deposits
+2,470
+3,379
+Purchases of securities (> 3 months) and of financial receivables and fixed-term deposits
+-3,272
+-3,162
+Changes in restricted cash and cash equivalents
+94
+148
+Cash provided by (used for) investing activities of continuing operations
+-3,035
+2,329
+4,157
+2,268
+Buildings
+5 to 60 years
+Useful Lives of Property, Plant and Equipment
+Exploration for and Evaluation of Mineral Resources
+The exploration and field development expenditures in the former
+Exploration & Production global unit are accounted for using
+the so-called "successful efforts method." In accordance with
+IFRS 6, "Exploration for and Evaluation of Mineral Resources,"
+("IFRS 6") expenditures for exploratory drilling for which the
+outcome was not yet certain are initially capitalized as an intan-
+gible asset.
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part of
+the acquisition or production cost of the asset, or else—if rele-
+vant-recognized as a separate asset if it is probable that the
+Group will receive a future economic benefit and the cost can
+be determined reliably.
+Property, plant and equipment are tested for impairment when-
+ever events or changes in circumstances indicate that an asset
+may be impaired. In such a case, property, plant and equipment
+are tested for impairment according to the principles prescribed
+for intangible assets in IAS 36. If the reasons for previously
+recognized impairment losses no longer exist, such impairment
+losses are reversed and recognized in income. Such reversal
+shall not cause the carrying amount to exceed the amount that
+would have resulted had no impairment taken place during the
+preceding periods.
+Technical equipment, plant and machinery
+Property, plant and equipment are initially measured at acquisi-
+tion or production cost, including decommissioning or resto-
+ration cost that must be capitalized, and are depreciated over the
+expected useful lives of the components, generally using the
+straight-line method, unless a different method of depreciation
+is deemed more suitable in certain exceptional cases. The useful
+lives of the major components of property, plant and equipment
+are presented below:
+A provision is recognized for emissions produced. The provision is
+measured at the carrying amount of the emission rights held or,
+in the case of a shortfall, at the current fair value of the emission
+rights needed. The expenses incurred for the recognition of the
+provision are reported under cost of materials.
+Under IFRS, emission rights held under national and international
+emission-rights systems for the settlement of obligations are
+reported as intangible assets. Because emission rights are not
+depleted as part of the production process, they are reported
+as intangible assets not subject to amortization. Emission rights
+are capitalized at cost at the time of acquisition.
+Emission Rights
+Under IFRS, expenditure on research is expensed as incurred,
+while costs incurred during the development phase of new prod-
+ucts, services and technologies are to be recognized as assets
+when the general criteria for recognition specified in IAS 38 are
+present. In the 2016 and 2015 fiscal years, E.ON only capitalized
+costs for internally generated software in this context.
+Research and Development Costs
+121
+Summary of Financial Highlights and Explanations
+Property, Plant and Equipment
+Consolidated Financial Statements
+2 to 50 years
+2 to 30 years
+as operating leases. Payments made under operating leases are
+generally expensed over the term of the lease.
+All other transactions in which E.ON is the lessee are classified
+The leased property is depreciated over its useful economic life
+or, if it is shorter, the term of the lease. The liability is subsequently
+measured using the effective interest method.
+The leased property is recognized at the beginning of the lease
+term at the lower of fair value or the present value of the mini-
+mum lease payments, and the lease liability is recognized as a
+liability in an equal amount.
+Leasing transactions in which E.ON is involved as the lessee are
+classified either as finance leases or operating leases. If E.ON
+bears substantially all of the risks and rewards incident to own-
+ership of the leased property, the transaction is classified as a
+finance lease. In such case, E.ON recognizes the leased property
+and the lease liability on its balance sheet.
+Leasing transactions are classified according to the lease agree-
+ments and to the underlying risks and rewards specified therein
+in line with IAS 17, "Leases" ("IAS 17"). In addition, IFRIC 4,
+"Determining Whether an Arrangement Contains a Lease,"
+("IFRIC 4") further defines the criteria as to whether an agree-
+ment that conveys a right to use an asset meets the definition
+of a lease. Certain purchase and supply contracts in the elec-
+tricity and gas business as well as certain rights of use may be
+classified as leases if the criteria are met. E.ON is party to some
+agreements in which it is the lessor and to others in which it is
+the lessee.
+Leasing
+Other equipment, fixtures, furniture and
+office equipment
+Government grants for costs are posted as income over the
+period in which the costs are incurred.
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are rec-
+ognized in income on a straight-line basis over the associated
+asset's expected useful life.
+Government Grants
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+until its entry into service are capitalized and subsequently
+amortized alongside the related asset. In the case of a specific
+financing arrangement, the respective borrowing costs incurred
+for that particular arrangement during the period are used. For
+non-specific financing arrangements, a financing rate uniform
+within the Group of 5.58 percent was applied for 2016 (2015:
+5.75 percent). Other borrowing costs are expensed.
+Borrowing Costs
+Upon discovery of oil and/or gas reserves and field development
+approval, the relevant expenditures were reclassified as property,
+plant and equipment. Such property, plant and equipment was
+then depreciated in accordance with production volumes. For
+uneconomical drilling, the previously capitalized expenditures
+were immediately expensed. Other capitalized expenditures were
+written off once it was determined that no viable reserves could
+be found. Other expenses for geological and geophysical work
+(seismology) and licensing fees were immediately expensed.
+122
+Notes
+Government grants are recognized at fair value if the Group
+satisfies the necessary conditions for receipt of the grant and if
+it is highly probable that the grant will be issued.
+CEO Letter
+Combined Group Management Report
+E.ON Stock
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+appropriate multiples, to the extent available. In addition, market
+transactions or valuations prepared by third parties for com-
+parable assets are used to the extent available. If needed, a cal-
+culation of value in use is also performed. Unlike fair value, the
+value in use is calculated from the viewpoint of management. In
+accordance with IAS 36, "Impairment of Assets," ("IAS 36") it
+is further ensured that restructuring expenses, as well as initial
+and subsequent capital investments (where those have not yet
+commenced), in particular, are not included in the valuation.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of the
+cash-generating unit's fair value less costs to sell and its value
+in use. In a first step, E.ON determines the recoverable amount
+of a cash-generating unit on the basis of the fair value (less
+costs to sell) using generally accepted valuation procedures. This
+is based on the medium-term planning data of the respective
+cash-generating unit. Valuation is performed using the discounted
+cash flow method, and accuracy is verified through the use of
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allocated
+are generally equivalent to the operating segments, since good-
+will is reported, and considered in performance metrics for con-
+trolling, only at that level. An exception to this is the allocation
+of goodwill at Renewables, where the cash-generating units are
+defined at a subsegment level. With some exceptions, goodwill
+impairment testing is performed in euro, while the underlying
+goodwill is always carried in the functional currency.
+Goodwill is not amortized, but rather tested for impairment at
+the cash-generating unit level on at least an annual basis. Impair-
+ment tests must also be performed between these annual tests
+if events or changes in circumstances indicate that the carrying
+amount of the respective cash-generating unit might not be
+recoverable.
+Goodwill and Intangible Assets
+Goodwill
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary
+shares outstanding during the relevant period. At E.ON, the com-
+putation of diluted earnings per share is identical to that of basic
+earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares.
+If the impairment thus identified exceeds the goodwill allocated
+to the affected cash-generating unit, the remaining assets of
+the unit must be written down in proportion to their carrying
+amounts. Individual assets may be written down only if their
+respective carrying amounts do not fall below the highest of the
+following values as a result:
+Earnings per Share
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+119
+Strategy and Objectives
+•
+Fair value less costs to sell
+Report of the Supervisory Board
+CEO Letter
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest iden-
+tifiable group of assets (cash-generating unit) that the intangible
+asset may be assigned to is determined. See Note 14 for addi-
+tional information about goodwill and intangible assets.
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset subject
+to amortization to exceed the amount that would have been
+determined, net of amortization, had no impairment loss been
+recognized during the period.
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use
+and its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount and
+the recoverable amount is recognized and reported in income
+under "Depreciation, amortization and impairment charges."
+Intangible assets not subject to amortization are measured at
+cost and tested for impairment annually or more frequently if
+events or changes in circumstances indicate that such assets
+may be impaired. Moreover, such assets are reviewed annually
+to determine whether an assessment of indefinite useful life
+remains applicable.
+Acquired intangible assets subject to amortization are classified
+as marketing-related, customer-related, contract-based, and
+technology-based. Internally generated intangible assets subject
+to amortization are related to software. Intangible assets subject
+to amortization are measured at cost and are amortized using the
+straight-line method over their expected useful lives. The useful
+lives of marketing-related intangible assets range between 5 and
+30 years, between 2 and 50 years for customer-related intan-
+gible assets and between 3 and 50 years for contract-based
+intangible assets. Technology-based intangible assets are gen-
+erally amortized over a useful life of between 3 and 33 years.
+This category includes software in particular. Contract-based
+intangible assets are amortized in accordance with the provi-
+sions specified in the contracts. Useful lives and amortization
+methods are subject to annual verification. Intangible assets
+subject to amortization are tested for impairment whenever
+events or changes in circumstances indicate that such assets
+may be impaired.
+•
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless their
+lives are considered to be indefinite. Factors such as typical
+product life cycles and legal or similar limits on use are taken
+into account in the classification.
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed in
+subsequent reporting periods.
+E.ON has elected to perform the annual testing of goodwill for
+impairment at the cash-generating unit level in the fourth quarter
+of each fiscal year.
+120
+Notes
+Any additional impairment loss that would otherwise have been
+allocated to the asset concerned must instead be allocated pro
+rata to the remaining assets of the unit.
+•
+Value in use, or
+Intangible Assets
+Report of the Supervisory Board
+Zero.
+Strategy and Objectives
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships, for
+example), such termination rights require the reclassification of
+non-controlling interests from equity into liabilities under IAS 32.
+The liability is recognized at the present value of the expected
+settlement amount irrespective of the probability of termination.
+Changes in the value of the liability are reported within other
+operating income. Accretion of the share of the results of the
+non-controlling shareholders' share in net income are recognized
+in Net interest income/expense.
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right to
+require E.ON to purchase their shares on specified conditions.
+None of the contractual obligations has led to the transfer of
+substantially all of the risk and rewards to E.ON at the time of
+entering into the contract. In such a case, IAS 32, "Financial
+Instruments: Presentation," ("IAS 32") requires that a liability be
+recognized at the present value of the probable future exercise
+price. This amount is reclassified from a separate component
+within non-controlling interests and reported separately as a
+liability. The reclassification occurs irrespective of the probability
+of exercise. The accretion of the liability is recognized as interest
+expense. If a purchase commitment expires unexercised, the
+liability reverts to non-controlling interests. Any difference
+between liabilities and non-controlling interests is recognized
+directly in retained earnings.
+IFRS defines equity as the residual interest in the Group's assets
+after deducting all liabilities. Therefore, equity is the net amount
+of all recognized assets and liabilities.
+Combined Group Management Report
+Equity Instruments
+Non-current assets that are held for sale either individually or
+collectively as part of a disposal group, or that belong to a dis-
+continued operation, are no longer depreciated. They are instead
+accounted for at the lower of the carrying amount and the fair
+value less any remaining costs to sell. If this value is less than
+the carrying amount, an impairment loss is recognized.
+classified as a discontinued operation must represent a major
+business line or a specific geographic business segment of the
+Group.
+126
+Notes
+Discontinued operations are components of an entity that are
+either held for sale or have already been sold and can be clearly
+distinguished from other corporate operations, both operationally
+and for financial reporting purposes. Additionally, the component
+Assets Held for Sale and Liabilities Associated with Assets
+Held for Sale and Discontinued Operations
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually
+taking place.
+Restricted cash with a remaining maturity in excess of twelve
+months is classified as financial receivables and other financial
+assets.
+The income and losses resulting from the measurement of
+components held for sale as well as the gains and losses arising
+from the disposal of discontinued operations, are reported sep-
+arately on the face of the income statement under income/loss
+from discontinued operations, net, as is the income from the
+ordinary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance sheet.
+The cash flows of discontinued operations are reported sepa-
+rately in the cash flow statement, with prior-year figures adjusted
+accordingly. However, there is no reclassification of prior-year
+balance sheet line items attributable to discontinued operations.
+Liquid funds include current available-for-sale securities, checks,
+cash on hand and bank balances. Bank balances and available-
+for-sale securities with an original maturity of more than three
+months are recognized under securities and fixed-term deposits.
+Liquid funds with an original maturity of less than three months
+are considered to be cash and cash equivalents, unless they are
+restricted.
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+If E.ON SE or a Group company buys treasury shares of E.ON
+SE, the value of the consideration paid, including directly attrib-
+utable additional costs (net after income taxes), is deducted
+from E.ON SE's equity until the shares are retired, distributed or
+resold. If such treasury shares are subsequently distributed or
+sold, the consideration received, net of any directly attributable
+additional transaction costs and associated income taxes, is
+recognized in equity.
+E.ON Stock
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or the
+scope of the relevant obligation, and also as a result of the reg-
+ular adjustment of the discount rate to current market interest
+rates. The adjustment of provisions for the decommissioning
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period
+of their occurrence at their discounted settlement amounts, pro-
+vided that the obligation can be reliably estimated. The carrying
+amounts of the respective property, plant and equipment are
+increased by the same amounts. In subsequent periods, capital-
+ized asset retirement costs are amortized over the expected
+remaining useful lives of the assets, and the provision is accreted
+to its present value on an annual basis.
+can be made of the amount of the obligation. The provision is
+recognized at the expected settlement amount. Long-term obli-
+gations are reported as liabilities at the present value of their
+expected settlement amounts if the interest rate effect (the differ-
+ence between present value and repayment amount) resulting
+from discounting is material; future cost increases that are
+foreseeable and likely to occur on the balance sheet date must
+also be included in the measurement. Long-term obligations
+are generally discounted at the market interest rate applicable
+as of the respective balance sheet date, provided that it is not
+negative. The accretion amounts and the effects of changes in
+interest rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually certain
+to be collected is capitalized as a separate asset. No offsetting
+within provisions is permitted. Advance payments remitted are
+deducted from the provisions.
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation towards
+third parties as a result of a past event, it is probable that E.ON
+will be required to settle the obligation, and a reliable estimate
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+127
+The amount reported on the balance sheet represents the pres-
+ent value of the defined benefit obligations reduced by the fair
+value of plan assets. If a net asset position arises from this cal-
+culation, the amount is limited to the present value of available
+refunds and the reduction in future contributions and to the
+benefit from prepayments of minimum funding requirements.
+Such an asset position is recognized as an operating receivable.
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fiscal
+year is reported under personnel costs; the net interest on the
+net liability or asset from defined benefit pension plans deter-
+mined based on the discount rate applicable at the start of the
+fiscal year is reported under financial results.
+128
+Notes
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits" is based on actuarial computations
+using the projected unit credit method, with actuarial valuations
+performed at year-end. The valuation encompasses both pension
+obligations and pension entitlements that are known on the
+reporting date and economic trend assumptions such as assump-
+tions on wage and salary growth rates and pension increase
+rates, among others, that are made in order to reflect realistic
+expectations, as well as variables specific to reporting dates
+such as discount rates, for example.
+In 2015 and 2016, virtual shares were granted exclusively to
+members of the Management Board of E.ON SE in the frame-
+work of a share matching plan. Executives who in previous years
+had participated in the share matching plan were instead granted
+a multi-year bonus extending over a term of four years, whose
+payout amount depends on the performance of the E.ON share
+up to the payment date.
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2"). Since the 2013 fiscal year, share-based payments
+have been based on the E.ON Share Matching Plan. Under this
+plan, the number of allocated rights is governed by the develop-
+ment of the financial measure ROACE (ROCE from 2016). The
+compensation expense is recognized in the income statement
+pro rata over the vesting period. The E.ON Share Matching Plan
+also represents a cash-settled share-based payment.
+Share-Based Payment
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+Liquid Funds
+Included in gains and losses from the remeasurements of the
+net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between esti-
+mated and actual variations in underlying assumptions about
+demographic and financial variables. Additionally included is the
+difference between the actual return on plan assets and the
+expected interest income on plan assets included in the net
+interest result. Remeasurements effects are recognized in full in
+the period in which they occur and are not reported within the
+Consolidated Statements of Income, but are instead recognized
+within the Statements of Recognized Income and Expenses as
+part of equity.
+Receivables and Other Assets
+Non-derivative financial liabilities (including trade payables)
+within the scope of IAS 39 are measured at amortized cost, using
+the effective interest method. Initial measurement takes place
+at fair value, with transaction costs included in the measurement.
+In subsequent periods, the amortization and accretion of any
+premium or discount is included in financial results.
+124
+Notes
+Loans and receivables (including trade receivables) are non-
+derivative financial assets with fixed or determinable payments
+that are not traded in an active market. Loans and receivables
+are reported on the balance sheet under "Receivables and other
+assets." They are subsequently measured at amortized cost.
+Valuation allowances are provided for identifiable individual
+risks. Objective indications may be present, for example, in the
+case of default on payments.
+basis, with any resulting unrealized gains and losses, net of
+related deferred taxes, reported as a component of equity (other
+comprehensive income) until realized. Realized gains and losses
+are determined by analyzing each transaction individually. If
+there is objective evidence of impairment, any changes in value
+previously recognized in other comprehensive income are
+instead recognized in financial results. When estimating a possible
+impairment loss, E.ON takes into consideration all available
+information, such as market conditions and the length and extent
+of the impairment. If the value on the balance sheet date of the
+equity instruments classified as available for sale and of similar
+long-term investments is more than 20 percent below their cost,
+or if the value has been more than 10 percent below its cost for
+a period of more than twelve months, this constitutes objective
+evidence of impairment. For debt instruments, objective evidence
+of impairment is generally deemed present if one of the three
+major rating agencies has downgraded its rating from investment-
+grade to non-investment-grade. Reversals of impairment losses
+relating to equity instruments are recognized exclusively in equity,
+while reversals relating to debt instruments are recognized
+entirely in income.
+Available-for-sale securities are non-derivative financial assets
+that have been allocated either to this category or to none of
+the other categories mentioned above. They are allocated to non-
+current assets as long as there is no intention to sell them within
+twelve months after the balance sheet date, and as long as the
+asset does not mature within that same period. Securities cate-
+gorized as available for sale are carried at fair value on a continuing
+Non-derivative financial instruments, e.g. unconsolidated
+equity investments and securities, are measured in accordance
+with IAS 39, "Financial Instruments: Recognition and Measure-
+ment" ("IAS 39"). E.ON categorizes financial assets as held for
+trading, available for sale, or as loans and receivables. Manage-
+ment determines the categorization of the financial assets at
+initial recognition.
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the balance sheet
+date at initial recognition and in subsequent periods. IAS 39
+requires that they be categorized as held for trading as long as
+they are not a component of a hedge accounting relationship.
+Gains and losses from changes in fair value are immediately
+recognized in net income.
+Non-derivative financial instruments are recognized at fair
+value, including transaction costs, on the settlement date when
+acquired. IFRS 13, "Fair Value Measurement," ("IFRS 13") defines
+fair value as the price that would be received to sell an asset
+or paid to transfer a liability in an orderly transaction between
+market participants on the measurement date (exit price).
+All other transactions in which E.ON is the lessor are treated as
+operating leases. E.ON retains the leased property on its balance
+sheet as an asset, and the lease payments are generally recorded
+on a straight-line basis as income over the term of the lease.
+Leasing transactions in which E.ON is the lessor and substantially
+all the risks and rewards incident to ownership of the leased
+property are transferred to the lessee are classified as finance
+leases. In this type of lease, E.ON records the present value of
+the minimum lease payments as a receivable. Payments by the
+lessee are apportioned between a reduction of the lease receiv-
+able and interest income. The income from such arrangements
+is recognized over the term of the lease using the effective
+interest method.
+123
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Receivables and other assets are initially measured at fair value,
+which generally approximates nominal value. They are subse-
+quently measured at amortized cost, using the effective interest
+method. Valuation allowances, included in the reported net
+carrying amount, are provided for identifiable individual risks. If
+the loss of a certain part of the receivables is probable, valuation
+allowances are provided to cover the expected loss.
+Combined Group Management Report
+Non-Derivative Financial Instruments
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps and options. In commodities, the instruments used
+include physically and financially settled forwards and options
+related to electricity, gas, oil and emission rights.
+Financial Instruments
+E.ON has designated some of these derivatives as part of a
+hedging relationship. IAS 39 sets requirements for the desig-
+nation and documentation of hedging relationships, the hedging
+strategy, as well as ongoing retrospective and prospective mea-
+surement of effectiveness in order to qualify for hedge account-
+ing. The Company does not exclude any component of derivative
+gains and losses from the measurement of hedge effectiveness.
+Inventories
+The Company measures inventories at the lower of acquisition
+or production cost and net realizable value. The cost of raw
+materials, finished products and goods purchased for resale is
+determined based on the average cost method. In addition to
+production materials and wages, production costs include mate-
+rial and production overheads based on normal capacity. The
+costs of general administration are not capitalized. Inventory
+risks resulting from excess and obsolescence are provided for
+using appropriate valuation allowances, whereby inventories are
+written down to net realizable value.
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit risk
+(debt value adjustment) and the credit risk of the corresponding
+counterparty (credit value adjustment). The counterparty risks
+thus determined are allocated to the individual financial instru-
+ments by applying the relative fair value method on a net basis.
+Primary and derivative financial instruments are netted on the
+balance sheet if E.ON has both an unconditional right—even in
+the event of the counterparty's insolvency-and the intention to
+settle offsetting positions simultaneously and/or on a net basis.
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualitative
+disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments is
+provided in Notes 30 and 31.
+Contracts that are entered into for purposes of receiving or deliv-
+ering non-financial items in accordance with E.ON's anticipated
+procurement, sale or use requirements, and held as such, can
+be classified as own-use contracts. They are not accounted for as
+derivative financial instruments at fair value in accordance with
+IAS 39, but as open transactions subject to the rules of IAS 37.
+125
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of the
+contract are not recognized in income. They are instead deferred
+and recognized in income systematically over the term of the
+derivative. An exception to the accrual principle applies if unre-
+alized gains and losses from the initial measurement are verified
+by quoted market prices, observable prices of other current
+market transactions or other observable data supporting the val-
+uation technique. In this case the gains and losses are recognized
+in income.
+E.ON Stock
+Report of the Supervisory Board
+Hedge accounting is considered to be appropriate if the assess-
+ment of hedge effectiveness indicates that the change in fair
+value of the designated hedging instrument is 80 to 125 percent
+effective at offsetting the change in fair value due to the hedged
+risk of the hedged item or transaction.
+CEO Letter
+Changes in fair value of derivative instruments that must be
+recognized in income are presented as other operating income
+or expenses. Gains and losses from interest-rate derivatives are
+netted for each contract and included in interest income. Gains
+and losses from derivative financial instruments are shown net
+as either revenues or cost of materials, provided they meet the
+corresponding conditions for such accounting. Certain realized
+amounts are, if related to the sale of products or services, also
+included in sales or cost of materials.
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+If a derivative instrument qualifies as a cash flow hedge under
+IAS 39, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the period
+or periods during which the cash flows of the transaction being
+hedged affect income. The hedging result is reclassified into
+income immediately if it becomes probable that the hedged under-
+lying transaction will no longer occur. For hedging instruments
+used to establish cash flow hedges, the change in fair value of
+the ineffective portion is recognized immediately in the income
+statement to the extent required. To hedge the foreign currency
+risk arising from the Company's net investment in foreign oper-
+ations, derivative as well as non-derivative financial instruments
+are used. Gains or losses due to changes in fair value and from
+foreign currency translation are recognized separately within
+equity, as a component of other comprehensive income, under
+currency translation adjustments. E.ON currently uses hedges in
+the framework of cashflow hedges and hedges of a net investment.
+Strategy and Objectives
+Notes
+134
+its financial statements and certain prerequisites with respect
+to the contractual cash flows are met. E.ON expects greater
+income volatility from the future amendments in phase I of the
+new standard since fewer equity instruments than planned can
+be classified as FVOCI. Phase II of the project addresses issues
+of amortized cost and impairment of financial assets. The current
+impairment model of IAS 39 is based on the incurred loss model,
+which only considers credit losses that have already taken place.
+The proposed "expected loss" impairment model based on
+expected cash flows, including expected credit losses, would
+make more use of forward-looking information and would
+have a tendency to take losses into account at an earlier stage.
+Because of the new model, in the future E.ON expects the timing
+on the impairment of financial assets to be different. The third
+phase of the project addresses rules for hedge accounting and
+was completed in November 2013. The objective is to form a
+better connection between corporate risk management strate-
+gies, the reasons for entering into a hedging transaction and
+the resulting effects. In particular, the IASB intends to simplify the
+requirements for measuring effectiveness, and thus the eligibility
+conditions for hedge accounting. E.ON does not anticipate any
+material impact from this. The application of IFRS 9 is to be man-
+datory for fiscal years beginning on or after January 1, 2018.
+Earlier application is permitted. The EU has adopted these amend-
+ments into European law.
+•
+In May 2014, the IASB published IFRS 15, "Revenue from
+Contracts with Customers," which completely revises the rules
+for revenue recognition. IFRS 15 replaces the current standards
+and interpretations IAS 11, "Construction Contracts," IAS 18,
+"Revenue," IFRIC 13, "Customer Loyalty Programmes," IFRIC 15,
+"Agreements for the Construction of Real Estate," IFRIC 18,
+"Transfers of Assets from Customers," and SIC-31, "Revenue-
+Barter Transactions Involving Advertising Services." A 5-stage
+model will be used to determine in what amount and at what
+time and for how long revenue is to be recognized. IFRS 15 also
+contains additional disclosure requirements. IFRS 15 must be
+applied for fiscal years beginning on or after January 1, 2018.
+Initial application must be carried out retrospectively, but the
+choice between two transitional methods is available. In April
+2016, some clarifications on IFRS 15 were published, which
+relate in particular to the identification of separate performance
+obligations, the distinction between principal and the agent,
+and the recognition of royalties. The clarifications have not yet
+been adopted by the EU. Within the framework of the ongoing
+project for the implementation of IFRS 15, the following signifi-
+cant effects were determined in comparison with the previous
+revenue recognition:
+•
+•
+In November 2009 and October 2010, respectively, the IASB
+published phases of the new standard IFRS 9, "Financial Instru-
+ments" ("IFRS 9"). Under IFRS 9, all financial instruments cur-
+rently within the scope of IAS 39 will henceforth generally be
+subdivided into only two classifications: financial instruments
+measured at amortized cost and financial instruments measured
+at fair value. As part of another revision of the standards in July
+2014, an additional measurement category has been introduced
+for debt instruments. These may in future be measured at fair
+value through other comprehensive income as long as doing so
+does not conflict with the business model of the entity preparing
+•
+IFRS 15, "Revenue from Contracts with Customers"
+IFRS 9, "Financial Instruments"
+Omnibus Standard to Amend Multiple International Financial
+Reporting Standards (2012-2014 Cycle)
+Standards and Interpretations Not Yet
+Applicable in 2016
+In December 2014, the IASB published amendments to IFRS 10,
+IFRS 12 and IAS 28. The amendments are designed to clarify
+that entities that are both investment entities and parent entities
+are exempt from presenting consolidated financial statements,
+even if they are themselves subsidiaries. They further clarify that
+subsidiaries providing investment-related services that are
+themselves investment entities shall be measured at fair value.
+For non-investment entities, they clarify that such entities
+should account for an investment entity using the equity method.
+However, the fair value measurements that this investment
+company applies to its investments in subsidiaries may be main-
+tained. The EU has adopted these amendments into European
+law. The amendments shall be applied for fiscal years beginning
+on or after January 1, 2016. The amendments have no impact
+on E.ON's Consolidated Financial Statements.
+Amendments to IFRS 10, IFRS 12 and IAS 28-Investment
+Entities: Applying the Consolidation Exception
+Amendments to IAS 1-Presentation of Financial Statements
+In December 2014, the IASB published amendments to IAS 1.
+They are primarily intended to clarify disclosures of material
+information, and of the aggregation and disaggregation of line
+items on the balance sheet and in the statement of comprehen-
+sive income. The amendments further provide that an entity's
+share of the other comprehensive income of companies accounted
+for using the equity method shall be presented in its statement
+of comprehensive income. The EU has adopted these amendments
+into European law. The amendments are applicable for fiscal
+years beginning on or after January 1, 2016. Earlier application
+is permitted. The amendments have no impact on E.ON's Con-
+solidated Financial Statements.
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In September 2014, the IASB pub-
+lished a corresponding omnibus standard. It contains changes to
+IFRS and their associated Bases for Conclusions. The revisions
+affect standards IFRS 5, IFRS 7, IAS 19 and IAS 34. The EU has
+adopted these amendments into European law. Consequently,
+they shall be applied for fiscal years beginning on or after Janu-
+ary 1, 2016. They will result in no material changes for E.ON
+affecting its Consolidated Financial Statements.
+In August 2014, the IASB published amendments to IAS 27-
+Separate Financial Statements. The amendments permit the use
+of the equity method as an accounting option for investments
+in subsidiaries, joint ventures and associates in the separate
+financial statements of an investor. The EU has adopted these
+amendments into European law. The amendments shall be
+applied retrospectively in accordance with IAS 8, "Accounting
+Policies, Changes in Accounting Estimates and Errors," for fiscal
+years beginning on or after January 1, 2016. The amendments
+have no impact on E.ON's Consolidated Financial Statements.
+Amendments to IAS 27-Equity Method in Separate Financial
+Statements
+133
+Summary of Financial Highlights and Explanations
+The separation of performance obligations and the resulting
+allocation of the transaction price required under IFRS 15
+under certain conditions will influence how revenue is distrib-
+uted over time. This may affect almost all business models,
+depending on the structure of the distribution agreements.
+Consolidated Financial Statements
+Combined Group Management Report
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. These standards and interpreta-
+tions are not yet being applied by E.ON in the 2016 fiscal year
+because their application is not yet mandatory or because adoption
+by the EU remains outstanding at this time for some of them.
+The mandatory capitalization of costs of obtaining a contract
+in accordance with IFRS 15 that are expected to be recovered
+over the term of the contract will have the effect of inflating
+the balance sheet.
+•
+Payments in kind or cash awards are granted in the case of
+customer loyalty programs. Such contractual constructs will
+be treated either as a separate performance obligation or as
+a reduction in the transaction price.
+•
+Strategy and Objectives
+Omnibus Standard to Amend Multiple International Financial
+Reporting Standards (2014-2016 cycle), publication in
+December 2016, transposition into European law still pending,
+first-time application for amendments to IFRS 12 in fiscal year
+2017, amendments to IFRS 1 and IAS 28 in fiscal year 2018
+Amendments to IFRS 4 "Applying IFRS 9 with IFRS 4," pub-
+lished in September 2016, not yet transposed into European
+law, expected first-time application in fiscal year 2018
+•
+• Amendments to IFRS 2 "Classification and Measurement of
+Share-Based Payment Transactions," published in June 2016,
+not yet transposed into European law, expected first-time
+application in fiscal year 2018
+Amendments to IAS 7 "Statement of Cash Flows," published
+in January 2016, not yet transposed into European law,
+expected first-time application in fiscal year 2017
+Amendments to IAS 12 "Recognition of Deferred Tax Assets
+for Unrealised Losses," published in January 2016, not yet
+transposed into European law, expected first-time application
+in fiscal year 2017
+Amendments to IFRS 10 and IAS 28-Sale or Contribution of
+Assets between an Investor and its Associate or Joint Ven-
+ture, published in September 2014, first-time application
+postponed indefinitely
+•
+•
+Additional standards and interpretations have been adopted in
+addition to the new standards outlined in detail above, but no
+material impact on E.ON's consolidated financial statements is
+expected:
+Additional Standards and Interpretations Not
+Yet Applicable
+The lessor will distinguish between finance leases and rental
+leases on its balance sheet. IFRS 16 also contains a number of
+other provisions relating to recognition, disclosures and sale
+and leaseback transactions. The application of IFRS 16 is required
+for fiscal years beginning on or after January 1, 2019. Early
+application is permissible, provided that IFRS 15 is also applied.
+They have not yet been adopted by the EU into European law.
+E.ON is currently evaluating the impact on its Consolidated
+Financial Statements.
+135
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The IASB published the new accounting standard IFRS 16
+"Leases" in January 2016. In particular, the new standard amends
+the recognition of leases for the lessee, which in the future will
+recognize liabilities in connection with the lease and the right of
+use with respect to the leased property on the balance sheet.
+IFRS 16 "Leases"
+The E.ON Group is seeking modified retrospective initial appli-
+cation of IFRS 15.
+Discussions continue on the treatment of certain power, gas
+and heat supply contracts, with or without a base fee, with
+respect to the requirement of identifying an additional sepa-
+rate performance obligation.
+IFRS 15 requires a divergence of cash flows and revenue
+recognition. This results in balance sheet inflation from the
+recognition of contractual assets, i.e., claims on the part
+of E.ON against customers for which there is not yet a legal
+right. This may also require reclassifications between trade
+receivables and contractual assets. Contractual liabilities must
+be recognized on the balance sheet if E.ON has the obligation
+to transfer goods or services to a customer from which E.ON
+has already received consideration.
+E.ON Stock
+Deferred tax liabilities caused by temporary differences associ-
+ated with investments in affiliated and associated companies are
+recognized unless the timing of the reversal of such temporary
+differences can be controlled within the Group and it is probable
+that, owing to this control, the differences will in fact not be
+reversed in the foreseeable future.
+CEO Letter
+Report of the Supervisory Board
+CEO Letter
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7") the
+Consolidated Statements of Cash Flows are classified in cash
+flows from operating, investing and financing activities. Cash
+flows from discontinued operations are reported separately in
+the Consolidated Statement of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions and
+disposals of companies are reported net of any cash and cash
+equivalents acquired (disposed of) under investing activities if
+the respective acquisition or disposal results in a gain or loss of
+control. In the case of acquisitions and disposals that do not,
+respectively, result in a gain or loss of control, the corresponding
+cash flows are reported under financing activities. The impact on
+cash and cash equivalents of valuation changes due to exchange
+rate fluctuations is disclosed separately.
+Consolidated Statements of Cash Flows
+Note 10 shows the major temporary differences so recorded.
+Deferred taxes for the E.ON Group's major German companies
+are-unchanged from the previous year-calculated using an
+aggregate tax rate of 30 percent. This tax rate includes, in addi-
+tion to the 15 percent corporate income tax, the solidarity
+surcharge of 5.5 percent on the corporate tax and the average
+trade tax rate of 14 percent. Foreign subsidiaries use applicable
+national tax rates.
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable
+for taxable income in the years in which temporary differences
+are expected to be recovered or settled. The effect on deferred
+tax assets and liabilities of changes in tax rates and tax law is
+generally recognized in income. Equity is adjusted for deferred
+taxes that had previously been recognized directly in equity.
+130
+Notes
+A more detailed description is not provided for certain contingent
+liabilities and contingent receivables, particularly in connection
+with pending litigation, as this information could influence
+further proceedings.
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are rec-
+ognized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that will
+result in taxable or deductible amounts when taxable income is
+calculated for future periods, unless those differences are the
+result of the initial recognition of an asset or liability in a trans-
+action other than a business combination that, at the time of
+the transaction, affects neither accounting nor taxable profit/
+loss. Uncertain tax positions are recognized at their most likely
+value. IAS 12 further requires that deferred tax assets be recog-
+nized for unused tax loss carryforwards and unused tax credits.
+Deferred tax assets are recognized to the extent that it is proba-
+ble that taxable profit will be available against which the
+deductible temporary differences and unused tax losses can be
+utilized. Each of the corporate entities is assessed individually
+with regard to the probability of a positive tax result in future
+years. The planning horizon is 3 to 5 years in this context. Any
+existing history of losses is incorporated in this assessment. For
+those tax assets to which these assumptions do not apply, the
+value of the deferred tax assets is reduced.
+Income Taxes
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan has
+been decided on by management and publicly announced or
+communicated to the employees or their representatives. Only
+those expenses that are directly attributable to the restructuring
+measures are used in measuring the amount of the provision.
+Expenses associated with the future operation are not taken
+into consideration.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of resources
+embodying economic benefits is not probable or where the
+amount of the obligation cannot be measured with sufficient
+reliability. Contingent liabilities were not recognized on the
+balance sheet.
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+are recognized at the lower of the excess obligation upon per-
+formance under the contract and any potential penalties or
+compensation arising in the event of non-performance. Obliga-
+tions under an open contractual relationship are determined
+from a customer perspective.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated proba-
+bilities can not be determined reliably.
+The estimates for nuclear decommissioning provisions are based
+on studies, cost estimates, legally binding civil agreements and
+legal information. A material element in the estimates are the
+real interest rates applied (the applied discount rate, less the cost
+increase rate). The impact on consolidated net income depends
+on the level of the corresponding adjustment posted to property,
+plant and equipment.
+and restoration of property, plant and equipment for changes
+to estimates is generally recognized by way of a corresponding
+adjustment to these assets, with no effect on income. If the
+property, plant and equipment concerned have already been
+fully depreciated, changes to estimates are recognized within
+the income statement.
+129
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+•
+E.ON Stock
+Report of the Supervisory Board
+Strategy and Objectives
+Consolidated Financial Statements
+Amendments to IAS 16 and IAS 41-Agriculture: Bearer Plants
+In June 2014, the IASB published amendments to IAS 16 and
+IAS 41. They provide that bearer plants shall be accounted for
+in the same way as property, plant and equipment, in accordance
+with IAS 16. IAS 41 shall continue to apply for the produce they
+bear. As a result of the amendments, bearer plants will in future
+no longer be measured at fair value less estimated costs to sell,
+but rather in accordance with IAS 16, using either a cost model
+or a revaluation model. The EU has adopted these amendments
+into European law. The amendments shall be applied for fiscal
+years beginning on or after January 1, 2016. The amendments
+have no impact on E.ON's Consolidated Financial Statements.
+In May 2014, the IASB published amendments to IAS 16 and
+IAS 38. The amendments contain further guidance on which
+methods can be used to depreciate property, plant and equip-
+ment, and to amortize intangible assets. Under this standard,
+a revenue-based depreciation method is not permitted. The EU
+has adopted these amendments into European law. The amend-
+ments shall be applied for fiscal years beginning on or after
+January 1, 2016. The amendments have no impact on E.ON's
+Consolidated Financial Statements.
+Amendments to IAS 16 and IAS 38-Clarification of Acceptable
+Methods of Depreciation and Amortization
+In May 2014, the IASB published amendments to IFRS 11. The
+standard thus amended requires the acquirer of an interest in
+a joint operation in which the activity constitutes a business as
+defined in IFRS 3 to apply all of the principles relating to busi-
+ness combinations accounting in IFRS 3 and other standards, as
+long as those principles are not in conflict with the guidance in
+IFRS 11. This also applies to the publication of the corresponding
+notes to the consolidated financial statements. The EU has
+adopted these amendments into European law. The amendments
+shall be applied for fiscal years beginning on or after January 1,
+2016. They will result in no changes for E.ON affecting its Con-
+solidated Financial Statements.
+Amendments to IFRS 11-Accounting for Acquisitions of
+Interests in Joint Operations
+In the context of its Annual Improvements Process, the IASB
+revises existing standards. In December 2013, the IASB pub-
+lished a corresponding omnibus standard. It contains changes to
+IFRS and their associated Bases for Conclusions. The revisions
+affect standards IFRS 2, IFRS 3, IFRS 8, IAS 16, IAS 24, IAS 37
+and IAS 38. The EU has adopted these amendments into Euro-
+pean law. Consequently, they shall be applied for fiscal years
+beginning on or after February 1, 2015. They will result in no
+material changes for E.ON affecting its Consolidated Financial
+Statements.
+Omnibus Standard to Amend Multiple International Financial
+Reporting Standards (2010-2012 Cycle)
+In November 2013, the IASB published amendments to IAS 19.
+This pronouncement amends IAS 19 in respect of the accounting
+for defined benefit plans involving contributions from employees
+(or third parties). If the contributions made by employees (or
+third parties) to a defined benefit plan are independent of the
+number of years of service, their nominal amount can still be
+deducted from the service cost. But if employee contributions
+vary according to the number of years of service, the benefits
+must be computed and attributed by applying the projected unit
+credit method. It has been adopted by the EU into European law.
+Consequently, the amendments are mandatory for fiscal years
+beginning on or after February 1, 2015. The amendment has no
+material impact on E.ON's Consolidated Financial Statements.
+Amendments to IAS 19-Defined Benefit Plans: Employee
+Contributions
+The International Accounting Standards Board ("IASB") and the
+IFRS Interpretations Committee ("IFRS IC") have issued the
+following standards and interpretations that have been adopted
+by the EU into European law and whose application is mandatory
+in the reporting period from January 1, 2016, through Decem-
+ber 31, 2016:
+Standards and Interpretations Applicable
+in 2016
+(2) New Standards and Interpretations
+132
+Notes
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets, the
+accounting treatment of provisions for pensions and miscella-
+neous provisions, for impairment testing in accordance with
+IAS 36, as well as for the determination of the fair value of certain
+financial instruments.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis. Adjustments to accounting estimates are recog-
+nized in the period in which the estimate is revised if the change
+affects only that period, or in the period of the revision and sub-
+sequent periods if both current and future periods are affected.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions that
+may both influence the application of accounting principles
+within the Group and affect the measurement and presentation
+of reported figures. Estimates are based on past experience and
+on current knowledge obtained on the transactions to be
+reported. Actual amounts may differ from these estimates.
+The Consolidated Statements of Income are classified using the
+nature of expense method, which is also applied for internal
+purposes.
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well as
+liabilities that are due to be settled within one year of the report-
+ing date are generally classified as current.
+Structure of the Consolidated Balance Sheets and Statements
+of Income
+In accordance with the so-called management approach required
+by IFRS 8, "Operating Segments," ("IFRS 8") the internal report-
+ing organization used by management for making decisions on
+operating matters is used to identify the Company's reportable
+segments. The internal performance measure used as the seg-
+ment result is EBIT adjusted to exclude certain non-operating
+effects (see Note 33).
+Segment Information
+131
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Amendments to IAS 40 "Transfers of Investment Property,"
+published in December 2016, not yet transposed into Euro-
+pean law, expected first-time application in fiscal year 2018
+E.ON Distribuţie România S.A.
+(3) Scope of Consolidation
+The transaction closed on March 25, 2015, with a minimal loss
+on disposal. The disposed asset and liability items of the regional
+unit now being reported as discontinued operations were
+property, plant and equipment (€1.0 billion) and current assets
+(€0.5 billion), as well as provisions (€0.2 billion) and liabilities
+(€0.7 billion). The major asset items of the generation activities
+held as a disposal group were property, plant and equipment
+(€1.1 billion), intangible assets and goodwill (€0.4 billion), finan-
+cial assets (€0.1 billion) and current assets (€0.4 billion). The
+liability items consisted primarily of provisions (€0.2 billion) and
+liabilities (€0.4 billion).
+The agreed transaction volume for the equity and for the assump-
+tion of liabilities and working capital positions was €2.4 billion.
+The respective classification as discontinued operations and
+disposal groups required that the Spanish and Portuguese busi-
+nesses be measured at the agreed purchase price. This remea-
+surement produced a goodwill impairment of approximately
+€0.3 billion in 2014.
+The activities sold include all of E.ON's Spanish and Portuguese
+businesses, including 650,000 electricity and gas customers
+and electricity distribution networks extending over a total dis-
+tance of 32,000 kilometers. In addition, the activities include a
+total generation capacity of 4 GW from coal, gas, and renewable
+sources in Spain and Portugal. While the Spain regional unit was
+reported as a discontinued operation, the Spanish generation
+businesses held in the Generation and Renewables segments
+have been classified as disposal groups as of November 30, 2014.
+In late November 2014, E.ON entered into contracts with a sub-
+sidiary of Macquarie European Infrastructure Fund 4 (MEIF4)
+and Wren House Infrastructure (WHI) on the sale of its Spanish
+and Portuguese activities.
+E.ON in Spain
+E.ON entered into an agreement with Allianz Capital Partners in
+December 2016 to sell a 30-percent stake in E.ON Distribuţie
+România S.A., a power and gas distribution company in Romania.
+E.ON Distribuţie România S.A owns and operates a gas distribution
+network of over 20,000 kilometers and a power distribution
+network of more than 80,000 kilometers, supplying more than
+3 million customers. After closing of the transaction on Decem-
+ber 22, 2016, E.ON retains 56.5 percent of the shares of E.ON
+Distribuţie România. The Romanian Ministry of Energy holds
+13.5 percent of the shares. The parties agreed not to disclose
+the purchase price. Because this was a sale of shares without
+loss of control, no income was recognized.
+Report of the Supervisory Board
+The derecognized asset and liability items of the Uniper Group
+were intangible assets (€1.5 billion), property, plant and equip-
+ment (€8.5 billion), other assets (€32.1 billion), provisions
+(€9.2 billion) and liabilities (€26.5 billion). Taking into account
+other deconsolidation effects (€0.5 billion), the loss on disposal
+primarily results from recognition in the consolidated income
+statement of currency translation effects that were previously
+recognized in other comprehensive income.
+¹This does not include the deconsolidation loss amounting to -€3.6 billion.
+-4,158
+-10,448
+operations, net
+Income/Loss from discontinued
+-4,050
+-108
+929
+Income taxes
+-11,377
+before income taxes
+Income/Loss from continuing operations
+2015
+74,851
+7,556
+-86,457
+-72,190
+Other expense
+2016
+56,661
+4,152
+Other income
+Sales
+Notes
+€ in millions
+138
+The following table shows selected financial information from
+the Spain regional unit now being reported as discontinued
+operations:
+On December 22, 2015, E.ON entered into an agreement to sell
+28.974 percent of the shares of its associated shareholding
+AS Latvijas Gāze, Riga, Latvia, to the Luxembourg company
+Marguerite Gas I S.à r.l. The carrying amount of the equity inter-
+est, which is reported within the former Global Commodities
+global unit, amounted to approximately €0.1 billion as of Decem-
+ber 31, 2015. The transaction, which closed in January 2016
+at a sale price of approximately €0.1 billion, resulted in a minimal
+gain on disposal.
+AS Latvijas Gāze
+In December 2015, E.ON signed an agreement to sell its
+10-percent shareholding in Enovos International S.A., Esch-sur-
+Alzette, Luxembourg-joining with RWE AG ("RWE"), Essen,
+Germany, which is also selling its stake-to a bidder consortium
+led by the Grand Duchy of Luxembourg and the independent
+private investment company Ardian, Paris, France. The carrying
+amount of the 10-percent shareholding, which was reported
+within the former Global Commodities unit, amounted to approxi-
+mately €0.1 billion as of December 31, 2015. The transaction
+closed in the first quarter of 2016. The parties agreed not to
+disclose the purchase price.
+Enovos International S.A.
+As the disposal process for the North Sea E&P business took
+greater shape, it already became necessary to perform impair-
+ment tests on assets in the third quarter of 2015. These tests
+resulted in impairments totaling approximately €1 billion, which
+were partially offset by amortizing deferred tax liabilities to
+income in the amount of roughly €0.6 billion. In addition, the
+goodwill of approximately €0.8 billion attributable to these
+activities was written down by roughly €0.6 billion as of Sep-
+tember 30, 2015.
+E.ON had already signed an agreement to sell all of its shares in
+E.ON Exploration & Production Norge AS ("E.ON E&P Norge"),
+Stavanger, Norway, to DEA Deutsche Erdoel AG ("DEA"), Ham-
+burg, Germany, in October 2015. The transaction value was
+$1.6 billion, including $0.1 billion in cash and cash equivalents
+on the balance sheet as of the January 1, 2015, effective date.
+The transaction resulted in a minimal gain on disposal when it
+closed in December 2015. The major asset and liability items
+of these activities, which were held in the former Exploration &
+Production global unit, were goodwill (€0.1 billion), other non-
+current assets (€0.9 billion) and current assets (€0.2 billion), as
+well as liabilities (€1.0 billion).
+In January 2016, E.ON signed an agreement to sell its British E&P
+subsidiary E.ON E&P UK Limited, London, United Kingdom,
+to Premier Oil plc, London, United Kingdom. The base sale price
+as of the January 1, 2015, effective date was approximately
+€0.1 billion ($0.12 billion). In addition, E.ON retains liquid funds
+that existed in the company as of the effective date, and also
+receives other adjustments that will result in the transaction
+producing a net cash inflow of approximately €0.3 billion. As the
+purchase price for the British E&P business became more certain
+in the fourth quarter of 2015, a charge was recognized on its
+goodwill in the amount of approximately €0.1 billion. Held as
+a disposal group in the former Exploration & Production global
+unit, the major asset and liability items of the British E&P busi-
+ness as of March 31, 2016, were goodwill (€0.1 billion) and
+other assets (€0.7 billion), as well as liabilities (€0.6 billion). The
+closing of the transaction at the end of April 2016 resulted in
+a loss on disposal of about €0.1 billion, which consisted mostly
+of realized foreign exchange translation differences reclassified
+from other comprehensive income to the income statement.
+In November 2014, E.ON had announced the strategic review
+of its exploration and production business in the North Sea.
+Because of a firming commitment to divest itself of these activ-
+ities, E.ON had reported this business as a disposal group as of
+September 30, 2015.
+Exploration and Production Business in the North Sea
+¹This does not include the deconsolidation gain/loss amounting to €216 million
+(2015: -€39 million).
+40
+0
+40
+2015
+324
+-284
+2016
+operations, net
+Income/Loss from discontinued
+Income taxes
+before income taxes
+Income/Loss from continuing operations
+Other income/expenses, net
+Sales
+€ in millions
+E.ON Spain (Summary)¹
+Selected Financial Information-
+As part of the agreement and a subsequent contractual agree-
+ment concluded in October 2016, E.ON received an additional
+payment of €0.2 billion. This payment is included as a purchase
+price adjustment from discontinued operations in the fourth
+quarter of 2016.
+IFRIC 22 "Foreign Currency Transactions and Advance Con-
+sideration," published in December 2016, not yet transposed
+into European law, expected first-time application in fiscal
+year 2018
+Selected Financial Information-
+Uniper (Summary)¹
+In 2016, E.ON generated revenues of €2,982 million
+(2015: €5,279 million), interest income of €188 million
+(2015: €171 million) and interest expenses of €11 million
+(2015: €36 million), as well as other income of €1,579 million
+(2015: €7,306 million) and other expenses of €8,327 million
+(2015: €18,279 million), with companies of the Uniper Group.
+9
+8
+1
+297
+190
+107
+42
+31
+11
+22
+11
+11
+317
+210
+107
+Total
+Foreign
+Domestic
+Consolidated companies
+as of December 31, 2016
+Disposals/Mergers
+Consolidated companies
+as of December 31, 2015
+Additions
+Disposals/Mergers
+Consolidated companies
+as of January 1, 2015
+Additions
+Scope of Consolidation
+The number of consolidated companies changed as follows in
+2016:
+31
+The following table shows selected financial information for
+the Uniper Group, which is reported as discontinued operations
+(after reallocation of elimination entries) up to the date of
+deconsolidation:
+49
+77
+137
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Since the loss of control, the remaining 46.65-percent interest
+in Uniper is classified as an associated company, and will sub-
+sequently be accounted for in the consolidated financial state-
+ments using the equity method.
+On December 31, 2016, E.ON and Uniper finalized the agree-
+ment on the non-exercise of control annexed to the spinoff
+agreement, under which E.ON undertakes to permanently abstain
+from exercising voting rights relating to the election of a certain
+number of supervisory board members of Uniper. With the
+finalization of the agreement, even though E.ON will continue
+to hold an interest in Uniper of 46.65 percent-which would
+transmit de facto control because E.ON is likely to constitute a
+majority of share capital represented at any Uniper shareholders'
+meeting-E.ON loses control of Uniper. The deconsolidation of
+Uniper results in a loss on disposal of €3.6 billion.
+As of December 31, 2016, the fair value-once again on the
+basis of the share price taking into account a market-based pre-
+mium to reflect the ownership structure-was again compared
+with the carrying amount of the Uniper Group. Although the
+stock exchange price rose against the price as of September 30,
+2016, there was an additional impairment of around €0.9 billion,
+which was allocated to non-current assets using the same
+allocation logic as in the third quarter. The background for the
+additional impairment is the increase in net assets at Uniper in
+the fourth quarter of 2016, which more than offset the positive
+development of the stock market value.
+When Uniper SE shares commenced trading on the Frankfurt
+Stock Exchange in the third quarter of 2016, the fair value of
+Uniper was calculated on the basis of the share price plus a
+market-rate premium for presentation of ownership. This resulted
+in an additional impairment of €6.1 billion, including deferred
+taxes, which was first allocated to the goodwill included in the
+discontinued operation (€2.9 billion). The remaining impairment
+was allocated to long-term assets on the basis of relative carry-
+ing amounts. This resulted in depreciation of property, plant
+and equipment of €2.8 billion as well as of intangible assets of
+€0.5 billion. There was a negative impact from deferred taxes
+(€0.1 billion). All depreciation is included in income from discon-
+tinued operations.
+approximately €1.1 billion to Global Commodities. Furthermore,
+provisions were established for anticipated losses in the amount
+of €0.9 billion.
+Pursuant to IFRS 5, the carrying amounts of all of Uniper's assets
+and liabilities must be measured in accordance with applicable
+IFRS immediately before their reclassification. In the course of
+this measurement, based on the application of IAS 36, an impair-
+ment charge of €2.9 billion was recognized on non-current
+assets in the second quarter of 2016. Approximately €1.8 billion
+of this charge was attributable to European Generation, and
+All intragroup expenses and income between companies of the
+Uniper Group and the remaining E.ON Group companies were
+eliminated. For deliveries, goods and services that were previously
+intragroup in nature, but which after the deconsolidation of
+Uniper will be continued with Uniper or third parties, the elimina-
+tion entries required for the consolidation of income and expenses
+were allocated entirely to the discontinued operation.
+From the time at which the Annual Shareholders Meeting granted
+its consent to the spinoff and until deconsolidation, Uniper met
+the requirements for being reported as a discontinued operation.
+The income and losses from Uniper's ordinary operating activities
+were reported separately on the face of the Group's income
+statement under income/loss from discontinued operations, net.
+Prior-year income statement figures were adjusted accordingly.
+The relevant assets and liabilities were recognized in a separate
+line on the balance sheet; prior-year figures were not adjusted.
+Uniper's cash flows were reported separately in the cash flow
+statement, with prior-year figures adjusted accordingly.
+The spinoff took effect with the approval of the E.ON Annual
+Shareholders Meeting held on June 8, 2016, on the spinoff of a
+53.35-percent share in Uniper and upon entry in the commercial
+register on September 9, 2016. E.ON shareholders received one
+Uniper share for every ten E.ON shares they held. Uniper shares
+were admitted for trading on the regulated market of the Frank-
+furt Stock Exchange on September 9, 2016. Trading on the
+Frankfurt Stock Exchange commenced on September 12, 2016.
+In the fiscal year, the decision by the Management Board of
+E.ON in December 2014 to spin off its conventional power
+generation, global energy trading, Russia and exploration and
+production business areas into a separate entity now called
+the Uniper Group was organizationally and legally implemented.
+Uniper
+Discontinued Operations and Assets Held for
+Sale in 2016
+(4) Acquisitions, Disposals and Discontinued
+Operations
+136
+Notes
+In 2016, a total of 18 domestic and 12 foreign associated
+companies were accounted for under the equity method
+(2015: 19 domestic companies and 23 foreign companies).
+In 2016, one domestic company reported as joint operations
+was presented pro rata on the consolidated financial state-
+ments (2015: 1 domestic company).
+The disposals/mergers in the 2016 fiscal year primarily relate to
+the deconsolidation of the Uniper business.
+226
+149
+80
+CEO Letter
+Combined Group Management Report
+Receivables
+524
+1,141
+Gain on derivative financial instruments
+3,894
+5,039
+Income from exchange rate differences
+2015
+2016
+€ in millions
+Other Operating Income
+The table below provides details of other operating income for
+the periods indicated:
+(7) Other Operating Income and Expenses
+Own work capitalized amounted to €529 million in 2016
+(2015: €510 million) and resulted primarily from capitalized work
+performed in connection with IT projects and network assets.
+(6) Own Work Capitalized
+Revenues from the sale of electricity and gas to industrial and
+commercial customers, to retail customers and to wholesale
+markets are recognized when earned on the basis of a contractual
+The classification of revenues by segment is presented in Note 33.
+At €38.2 billion, revenues in 2016 were roughly 11 percent
+lower than in the previous year. This decrease was mainly due
+to the transfer of the wholesale customers to Uniper, the
+decommissioning of the Grafenrheinfeld nuclear power plant
+and disposals.
+arrangement with the customer or purchaser; they reflect the
+value of the volume supplied, including an estimated value of
+the volume supplied to customers between the date of their last
+meter reading and period-end.
+Revenues are generated primarily from the sale of electricity
+and gas to industrial and commercial customers, to retail cus-
+tomers and to wholesale markets. Additional revenue is earned
+from the distribution of gas and electricity and from deliveries
+of steam and water.
+Gain on disposal of equity investments and
+securities
+Revenues are generally recognized upon delivery of goods to pur-
+chasers or customers, or upon completion of services rendered.
+Delivery is considered to have occurred when the risks and
+rewards associated with ownership have been transferred to the
+buyer, compensation has been contractually established and
+collection of the resulting receivable is probable.
+242
+Write-ups of non-current assets
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+E.ON employs derivatives to hedge commodity risks as well as
+currency and interest risks.
+The gain on the disposal of equity investments and securities
+consisted primarily of gains on the sale of shares in ENOVOS
+and shares in AWE Arkona-Windpark Entwicklungs GmbH. In
+the previous year, there were gains on the disposal of Esperanto
+Infrastructure and of the E&P Norge shares.
+Gains and losses on derivative financial instruments relate to
+gains from fair value measurement from derivatives under IAS 39.
+There was a significant impact from the change in the market
+value of gas and electricity derivatives.
+Income from exchange rate differences consisted primarily of
+realized gains from currency derivatives in the amount of
+€3,407 million (2015: €3,199 million) and from receivables
+and payables denominated in foreign currency in the amount of
+€622 million (2015: €292 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €1,010 million (2015: €403 million).
+6,337
+7,448
+1,297
+917
+98
+48
+Total
+Miscellaneous
+plant and equipment
+Gain on disposal of property,
+56
+61
+468
+(5) Revenues
+140
+Notes
+Report of the Supervisory Board
+CEO Letter
+-61
+-498
+3
+-495
+Currency translation adjustments
+4,865
+-54
+4,811
+-142
+-144
+-286
+Remeasurements of defined benefit plans
+-1,401
+-202
+-1,603
+1,323
+-680
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+In late March 2015, E.ON signed an agreement with the Swedish
+private equity group EQT on the sale of the remaining 49-percent
+stake in Esperanto Infrastructure. The carrying amount of this
+Energy from Waste activity held in the Germany regional unit was
+€0.2 billion. The agreed transaction closed in late April 2015. It
+produced a gain of approximately €0.1 billion on disposal.
+Esperanto Infrastructure
+E.ON also decided in early August 2015 that it would retain and
+further develop the electricity and gas distribution business
+held by the Italy regional unit. Accordingly, because the planned
+sale was abandoned in the third quarter of 2015, the assets and
+liabilities and the results reported separately for the discontinued
+operations had to be reported once again in the individual line
+items of the balance sheet and the income statement, and the
+corresponding adjustments had to be made to the cash flow
+statement. This reverse reclassification resulted in no material
+impact on consolidated net income.
+E.ON additionally signed an agreement in August 2015 to sell
+its Italian hydroelectric activities to ERG Power Generation S.p.A.
+("ERG"), Genoa, Italy, at a purchase price of roughly €1.0 billion.
+This agreement, which resulted in a minimal gain on disposal,
+was finalized in December 2015. The major asset and liability
+items of the activities, which were held as a disposal group in
+the Renewables global unit, were property, plant and equipment
+(€0.5 billion), intangible assets (€0.5 billion) and current assets
+(€0.1 billion), as well as liabilities (€0.2 billion).
+The disposal of the Italian coal and gas generation assets, which
+were reported as a disposal group, was finalized in July 2015.
+The result was a minimal deconsolidation gain. The disposed
+asset and liability items related to property, plant and equipment
+(€0.3 billion) and current assets (€0.2 billion) and to liabilities
+(€0.5 billion).
+A contract with F2i SGR S.p.A., Milan, Italy, for the sale of the
+solar activities held in the Renewables segment was signed and
+finalized in February 2015. Its major balance sheet items related
+to property, plant and equipment (€0.1 billion). There were no
+significant items on the liabilities side. The transaction closed
+with a minimal gain on disposal.
+This remeasurement resulted in an impairment of approxi-
+mately €1.3 billion as of December 31, 2014, of which roughly
+€0.1 billion was charged to goodwill and roughly €1.2 billion to
+other non-current assets.
+As the disposal process took greater shape, it also became
+necessary to reexamine the measurement of the Italian busi-
+nesses on the basis of the expected proceeds on disposal.
+The non-controlling interest in Gestione Energetica Impianti
+S.p.A. ("GEI"), Crema, Italy, was already sold in December 2014.
+Also agreed in December 2014 was the disposal of the Italian
+coal and gas generation assets to the Czech energy company
+Energetický a Průmyslový Holding ("EPH"), Prague, Czech
+Republic.
+Strategy and Objectives
+As of December 31, 2014, against the backdrop of specifying
+its divestment intentions, E.ON reported the Italy regional unit
+under discontinued operations, and the Italian businesses held
+in its Generation and Renewables segments-except for the
+wind-power activities-as disposal groups.
+Disposal Groups and Assets Held for Sale
+in 2015
+Results from discontinued operations are primarily determined
+by the Uniper Group, with after-tax results of -€14.1 billion. In
+addition, the purchase price adjustment related to the sale of
+the Spanish and Portuguese activities made a significant contri-
+bution of approximately €0.2 billion to after-tax results from
+discontinued operations.
+Results from Discontinued Operations
+E.ON has made the decision to build the Arkona offshore wind
+farm project in the Baltic Sea. The Norwegian energy company
+Statoil has acquired a 50-percent interest in the project and
+is involved from the start. E.ON is responsible for building and
+operating the wind farm. The contract on the sale of the 50-per-
+cent stake was signed in the first quarter of 2016, and the
+transaction closed in April 2016. The transaction resulted in
+a slight gain on disposal.
+Arkona Offshore Wind Farm Partnership
+Following the construction and entry into service of the Humber
+Gateway wind farm in the U.K. North Sea, E.ON was required
+by regulation to sell to an independent third party the associated
+grid connection infrastructure currently held by E.ON Climate &
+Renewables UK Humber Wind Ltd., Coventry, United Kingdom
+("Humber Wind"). The sale to Balfour Beatty Equitix Consortium
+(BBEC) was completed in September 2016. The sales price and
+carrying amount totaled approximately €0.2 billion each.
+Grid Connection Infrastructure for the Humber Gateway
+Wind Farm
+139
+Summary of Financial Highlights and Explanations
+E.ON in Italy
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+and similar income¹
+Income/Loss from securities, interest
+1
+-19
+Income/Loss from equity investments
+-69
+-95
+financial assets
+Impairment charges/reversals on other
+70
+76
+Income/Loss from companies in which
+equity investments are held
+2015
+2016
+€ in millions
+Financial Results
+The following table provides details of financial results for the
+periods indicated:
+(9) Financial Results
+142
+343
+450
+Available for sale
+183
+-1,481
+-1,295
+Net interest income/loss
+-1,931
+-861
+-47
+-1,023
+-1,058
+Other interest expenses
+Held for trading
+Amortized cost
+-1,638
+Notes
+Interest and similar expenses¹
+105
+Other interest income
+38
+2
+Held for trading
+177
+53
+Loans and receivables
+145
+90
+643
+In contrast, the allocation of the provision for nuclear waste dis-
+posal at PreussenElektra (+ €2.2 billion) increased. In the Energy
+Networks Germany segment, the cost of materials also increased
+(+€1.1 billion), which is primarily the result of an increase in pass-
+throughs under Germany's Renewable Energy Law.
+32,325
+Loss on disposal of equity investments and
+120
+96
+Taxes other than income taxes
+553
+231
+Loss on derivative financial instruments
+4,049
+4,925
+Loss from exchange rate differences
+2015
+2016
+€ in millions
+Other Operating Expenses
+The following table provides details of other operating expenses
+for the periods indicated:
+Miscellaneous other operating income in 2016 included the
+proceeds of passing on charges for the provision of personnel and
+services, as well as reimbursements, reversals of valuation allow-
+ances on loans and receivables, and rental and lease interest.
+Reversals of impairment charges in property, plant and equip-
+ment primarily resulted from reversals in Hungary (€51 million).
+In the previous year, reversals of impairment charges primarily
+resulted from reversals in Italy (€43 million).
+Gains were realized on the sale of securities in the amount of
+€141 million (2015: €266 million).
+141
+securities
+80
+64
+Miscellaneous
+1,810
+4,401
+Expenses for purchased services
+Total
+31,374
+27,924
+Expenses for raw materials and supplies
+and for purchased goods
+2015
+2016
+€ in millions
+33,184
+Cost of Materials
+(8) Cost of Materials
+Other operating expenses from exploration activity totaled
+€1 million (2015: €48 million).
+Miscellaneous other operating expenses included expenses for
+external consulting, audit and non-audit services in the amount
+of €246 million (2015: €247 million), advertising and marketing
+expenses in the amount of €117 million (2015: €155 million),
+write-downs of trade receivables in the amount of €238 million
+(2015: €320 million), rents and leases in the amount of €151 mil-
+lion (2015: €173 million) and other services rendered by third
+parties in the amount of €459 million (2015: €487 million). Addi-
+tionally reported in this item, among other things, are IT expendi-
+tures, insurance premiums and travel expenses. In order to align
+itself with industry standards for presentation and to enable
+greater insight into the earnings situation, expenses for conces-
+sion fees in the reporting year are shown in cost of materials.
+Concession fees of €311 million were recognized in 2015.
+Losses from exchange rate differences consisted primarily of
+realized losses from currency derivatives in the amount of
+€3,523 million (2015: €3,130 million) and from receivables and
+payables denominated in foreign currency in the amount of
+€190 million (2015: €453 million). In addition, there were effects
+from foreign currency translation on the balance sheet date in
+the amount of €1,212 million (2015: €466 million).
+7,968
+7,867
+Total
+3,182
+2,535
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity. Network usage charges and fuel supply are also
+included in this line item. Expenses for purchased services con-
+sist primarily of maintenance costs. The cost of materials
+decreased by €0.9 billion to €32 billion (2015: €33 billion).
+The reason for this was lower expenses for electricity and gas
+procurement in Customer Solutions (-€3.1 billion), primarily
+because of the transfer of the wholesale business to Uniper, and
+lower expenses at Preussen Elektra (-€0.6 billion), which is
+primarily attributable to expiring procurement contracts. In
+addition, the cost of materials declined compared to the previous
+year due to disposals (-€0.6 billion).
+Companies accounted for under the equity method
+-89
+-8
+16,690
+14,680
+18,785
+21,294
+EC&R
+1,012
+875
+Corporate Functions & Other²
+4,036
+4,275
+Employees, core business
+40,523
+41,124
+Non-Core Business (Preussen Elektra)
+2,038
+2,027
+Other (activities disposed of)
+34
+Total employees, E.ON Group
+2015
+2016
+148
+Energy Networks
+Customer Solutions
+3rd tranche
+Apr. 1, 2015
+4 years
+€13.63
+2nd tranche
+Apr. 1, 2014
+1st tranche
+Apr. 1, 2013
+4 years
+€13.65
+4 years
+€13.31
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual shares.
+In addition, the change in ROCE is simulated for performance
+matching. The provision for the first, second, third and fourth
+tranches of the E.ON Share Matching Plan as of the balance
+sheet date is €45.5 million (2015: €52.7 million). The expense
+for the first, second, third and fourth tranches amounted to
+€3.6 million in the 2016 fiscal year (2015: €11.2 million).
+Multi-Year Bonus
+In 2015 and 2016, E.ON extended to those executives who in
+previous years had been granted virtual shares in the context of
+base matching and performance matching a multi-year bonus
+extending over a term of four years. Beneficiaries were informed
+individually of the target value of the multi-year bonus.
+42,595
+For executives in the E.ON Group, the amount paid out is equal
+to the target value if the E.ON share price at the end of the term
+is equal to the E.ON share price after the spinoff of Uniper. If
+the share price at the end of the term is higher or lower than the
+share price after the spinoff, the amount paid out relative to
+the target value will increase or decrease in equal proportion to
+the change in the share price, but in no event shall the payout
+be higher than twice the target value.
+60-day average prices are used to determine both the share
+price after the spinoff and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+The plan contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+The provision for the multi-year bonus as of the balance sheet
+date is €13.7 million (2015: €6.0 million). The expense amounted
+to €9.1 million in the 2016 fiscal year (2015: €5.2 million).
+Notes
+Employees
+During 2016, E.ON employed an average of 42,595 persons
+(2015: 43,572), not including an average of 884 apprentices
+(2015: 936).
+The breakdown by segment is shown in the following table:
+Employees¹
+Headcount
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, there is no entitlement to a multi-year
+bonus payout.
+4th tranche
+Apr. 1, 2016
+4 years
+€8.63
+421
+43,572
+(12) Other Information
+16
+15
+1
+1
+The fees for financial statement audits concern the audit of the
+Consolidated Financial Statements and the legally mandated
+financial statements of E.ON SE and its affiliates. In 2016, this
+also includes fees for auditing the annual and consolidated
+financial statements of Uniper SE, which since then has been
+listed on the stock exchange.
+Fees for other attestation services concern in particular the review
+of the interim IFRS financial statements. Further included in this
+item are project-related reviews performed in the context of the
+introduction of IT and internal control systems, due-diligence
+services rendered in connection with acquisitions and divestitures,
+and other mandatory and voluntary audits, including in connec-
+tion with the spinoff and stock exchange listing of Uniper SE.
+Fees for tax advisory services primarily include advisory on a
+case-by-case basis with regard to the tax treatment of M&A
+transactions, ongoing consulting related to the preparation of
+tax returns and the review of tax assessments, as well as advi-
+sory on other tax-related issues, both in Germany and abroad.
+Fees for other services consist primarily of technical support in
+IT and other projects.
+List of Shareholdings
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+2
+presented on pages 209 through 221.
+2
+45
+2223
+42
+33
+32
+Provisions
+20
+18
+15
+15
+German Corporate Governance Code
+On December 16, 2016, the Management Board and the Super-
+visory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+Fees and Services of the Independent Auditor
+During 2016 and 2015, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") GmbH, Wirtschafts-
+prüfungsgesellschaft, (domestic) and by companies in the inter-
+national PwC network were recorded as expenses:
+Independent Auditor Fees
+€ in millions
+Financial statement audits
+Domestic
+Other attestation services
+¹Figures do not include board members, managing directors, or apprentices.
+²Includes E.ON Business Services.
+Domestic
+Domestic
+Other services
+Domestic
+Total
+Domestic
+2016
+2015
+21
+22
+Tax advisory services
+Financial results
+Target value at issuance
+Date of issuance
+2015
+Domestic tax loss carryforwards
+Foreign tax loss carryforwards
+Total
+7,923
+6,446
+6,800
+9,806
+14,723
+16,252
+Since January 1, 2004, domestic tax loss carryforwards can only
+be offset against a maximum of 60 percent of taxable income,
+subject to a full offset against the first €1 million. This minimum
+corporate taxation also applies to trade tax loss carryforwards.
+The domestic tax loss carryforwards result from adding corpo-
+rate tax loss carryforwards amounting to €3,115 million (2015:
+€2,231 million) and trade tax loss carryforwards amounting
+to €4,808 million (2015: €4,215 million). The foreign tax loss
+carryforwards consist of corporate tax loss carryforwards
+amounting to €4,806 million (2015: €7,359 million) and tax
+loss carryforwards from local income taxes amounting to
+€1,994 million (2015: €2,447 million). Of the foreign tax loss
+carryforwards, a significant portion relates to previous years.
+Deferred taxes were not recognized, or no longer recognized,
+on a total of €5,109 million (2015: €7,144 million) in tax loss
+carryforwards that do not expire. Deferred tax assets were not
+recognized, or no longer recognized, on non-expiring domestic
+corporate tax loss carryforwards of €3,089 million (2015:
+€2,132 million) or on domestic trade tax loss carryforwards of
+€4,769 million (2015: €4,004 million).
+In total, deferred tax assets were not recognized, or are no
+longer recognized, in the amount of €10,133 million (2015:
+€7,523 million) for temporary differences which are recognized
+in income and equity.
+As of December 31, 2016, and December 31, 2015, E.ON
+reported deferred tax assets for companies that incurred losses
+in the current or the prior-year period that exceed the deferred
+tax liabilities by €31 million and €193 million, respectively. The
+basis for recognizing deferred tax assets is an estimate by man-
+agement of the extent to which it is probable that the respective
+companies will achieve taxable earnings in the future against
+which the as yet unused tax losses, tax credits and deductible
+temporary differences can be offset.
+(11) Personnel-Related Information
+Personnel Costs
+The following table provides details of personnel costs for the
+periods indicated:
+Personnel Costs
+€ in millions
+2016
+2015
+Wages and salaries
+2016
+€ in millions
+December 31,
+Tax Loss Carryforwards
+-97
+-150
+3
+-147
+Total
+2,938
+-229
+2,709
+684
+2,231
+-1,105
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+145
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+-421
+Term
+2,282
+340
+equal to that for base matching in terms of amount. Performance
+matching will result in a payout only on achievement of a mini-
+mum performance as specified at the beginning of the term by
+the Management Board and the Supervisory Board.
+In 2015 and 2016, virtual shares from the third and fourth tranche
+were granted in the context of base matching and performance
+matching exclusively to members of the Management Board of
+E.ON SE. Executives were instead granted a multi-year bonus,
+the terms of which are described further below.
+Under the plan's original structure, the amount paid out under
+performance matching was to be equal to the target value at
+issuance if the E.ON share price was maintained at the end of
+the term and if the average ROACE performance matched a
+target value specified by the Management Board and the Super-
+visory Board. If the average ROACE during the four-year term
+exceeded the target value, the number of virtual shares granted
+under performance matching increases up to a maximum of
+twice the target value. If the average ROACE had fallen short
+of the target value, the number of virtual shares, and thus also
+the amount paid out, were to decrease.
+In 2016, the plan was changed to the effect that for periods from
+2016 onwards, ROCE was used instead of ROACE for measuring
+performance. Accordingly, new targets were defined for 2016
+and/or subsequent years. At the same time, the previous ROACE
+target achievement for the previous years will be included in
+the total performance of the respective tranches on a pro-rata
+basis. In the event of a defined underperformance, there is no
+payout under performance matching.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, all virtual shares-except for those that
+resulted from the equity deferral-expire.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+147
+At the end of the term, the sum of the dividends paid to the ordi-
+nary shareholders during the term is added to each virtual share.
+The maximum amount to be paid out to a plan participant is
+limited to twice the sum of the equity deferral, base matching
+and the target value under performance matching.
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements. To offset the
+change in value resulting from the spinoff of Uniper SE, both
+the 60-day average price of the E.ON share and the total divi-
+dends paid to a shareholder will be multiplied by a correction
+factor at the end of the term.
+The plan also contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+The following are the base parameters of the tranches of the
+share matching plan active in 2016:
+E.ON Share Matching Virtual Shares
+The equity deferral is determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral is converted into virtual
+shares and vests immediately. In the United States, virtual shares
+were granted in the amount of the equity deferral for the first
+time in 2015. Beneficiaries are additionally granted virtual shares
+in the context of base matching and performance matching. For
+members of the Management Board of E.ON SE, the proportion
+of base matching to the equity deferral is determined at the
+discretion of the Supervisory Board; for all other beneficiaries it
+is 2:1. The performance-matching target value at allocation is
+Since 2013, E.ON has been granting virtual shares under the
+E.ON Share Matching Plan. At the end of its four-year term,
+each virtual share is entitled to a cash payout linked to the final
+E.ON share price established at that time. The calculation
+inputs for this long-term variable compensation package are
+equity deferral, base matching and performance matching.
+E.ON Share Matching Plan
+The following discussion includes reports on the E.ON Share
+Matching Plan introduced in 2013 and on the multi-year bonus
+introduced in 2015.
+344
+Pension costs and other employee benefits
+Pension costs
+268
+369
+263
+365
+Total
+2,839
+2,995
+Social security contributions
+Share-Based Payment
+Employee Stock Purchase Program
+which in pre-
+The voluntary employee stock purchase program,
+vious years provided employees of German group companies the
+opportunity to purchase E.ON shares at preferential terms, was
+suspended in 2016 due to the spinoff of Uniper. In the previous
+year, an expense of €5.5 million from granting preferential
+prices was recognized in the framework of the employee stock
+purchase program.
+As anticipated, personnel costs of €2,839 million were below
+the prior-year figure of €2,995 million due to the average lower
+number of employees.
+Notes
+146
+Since the 2003 fiscal year, employees in the United Kingdom
+have the opportunity to purchase E.ON shares through an
+employee stock purchase program and to acquire additional
+bonus shares. The expense of issuing these matching shares
+amounted to €1.4 million in 2016 (2015: €1.8 million) and is
+recorded under personnel costs as part of "Wages and salaries."
+Long-Term Variable Compensation
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation. The
+purpose of such compensation is to reward their contribution
+to E.ON's growth and to further the long-term success of the
+Company. This variable compensation component, comprising
+a long-term incentive effect along with a certain element of
+risk, provides for a sensible linking of the interests of shareholders
+and management.
+The expenses for share-based payment in 2016 (employee stock
+purchase programs in the United Kingdom, the E.ON Share
+Performance Plan, the E.ON Share Matching Plan and the multi-
+year bonus) amounted to €14.1 million (2015: €18.2 million).
+-1,314
+-529
+-51
+€ in millions
+2015
+Domestic income taxes
+281
+Foreign income taxes
+225
+-832
+148
+Other income taxes
+Current taxes
+Domestic
+506
+-684
+-224
+1,780
+Foreign
+158
+-368
+Deferred taxes
+-66
+1,412
+Total income taxes
+440
+728
+The tax expense in 2016 amounted to €0.4 billion, compared
+with €0.7 billion in 2015. In spite of the pretax loss there is
+still a tax expense, and hence a negative effective tax rate of
+25 percent (2015: 49 percent). Expenses that provided no tax
+relief, as well as material effects from changes in the value of
+deferred tax assets, were the principal reasons for the change in
+the effective tax rate in 2016.
+Of the amount reported as current taxes, €173 million is attrib-
+utable to previous years (2015: -€934 million).
+Deferred taxes reported for 2016 resulted from changes in tempo-
+rary differences, which totaled -€84 million (2015: €820 million),
+loss carryforwards of €13 million (2015: €570 million) and tax
+credits amounting to €5 million (2015: €22 million).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+2016
+€ in millions
+Income Taxes
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+-106
+45
+Inventories
+Financial assets
+Property, plant and equipment
+Intangible assets
+€ in millions
+Deferred Tax Assets and Liabilities
+Deferred tax assets and liabilities as of December 31, 2016, and
+December 31, 2015, break down as shown in the following table:
+Notes
+-48.8
+728
+-25.5
+440
+Combined Group Management Report
+1.4
+0.8
+-14
+-3.4
+50
+-1.0
+18
+-1,480
+Other interest income consists predominantly of income from
+lease receivables (finance leases) and effects from the reversal
+of provisions. Other interest expenses include the accretion of
+provisions for asset retirement obligations in the amount of
+€770 million (2015: €814 million). Also contained in this item is
+the net interest cost from provisions for pensions in the amount
+of €84 million (2015: €77 million).
+Other interest expenses further include the positive non-recurring
+effects on financial results of carryforwards of counterparty
+obligations to acquire additional shares in already consolidated
+subsidiaries and of non-controlling interests in fully consolidated
+partnerships with legal structures that give their shareholders
+a statutory right of withdrawal combined with a compensation
+claim, which according to IAS 32 must be recognized as liabilities
+and amounted to €214 million (2015: €6 million).
+Interest expense was reduced by capitalized interest on debt
+totaling €37 million (2015: €108 million).
+Realized gains and losses from interest rate swaps are shown
+net on the face of the income statement.
+¹The measurement categories are described in detail in Note 1.
+The improvement in financial results relative to the previous
+year is primarily attributable to the diminished impact of interest
+expenses for financial liabilities based on scheduled repayments.
+Also, financial results in 2016 were affected by positive non-
+recurring effects according to IAS 32.
+(10) Income Taxes
+-21
+Available-for-sale securities
+Consolidated Financial Statements
+143
+3.6
+-42
+2.4
+88
+-5.9
+Tax effects of non-deductible expenses and permanent differences
+-167
+9.8
+-66
+4.4
+Tax effects on income from companies accounted for under the equity method
+-71
+4.1
+-85
+5.7
+Tax effects of goodwill impairment and elimination of negative goodwill
+0.0
+627
+-42.0
+Tax effects of changes in value and non-recognition of deferred taxes
+1,437
+-83.3
+781
+-52.4
+Tax effects of other taxes on income
+Tax effects of income taxes related to other periods
+Other
+Effective income taxes/tax rate
+186
+-53
+4.5
+-78
+-0.9
+German legislation providing for fiscal measures to accompany
+the introduction of the European Company and amending other
+fiscal provisions ("SE-Steuergesetz" or "SESTEG"), which came
+into effect on December 13, 2006, altered the regulations on
+corporate tax credits arising from the corporate imputation sys-
+tem ("Anrechnungsverfahren"), which had existed until 2001.
+The change de-links the corporate tax credit from distributions of
+dividends. Instead, after December 31, 2006, an unconditional
+claim for payment of the credit in ten equal annual installments
+from 2008 through 2017 has been established. The resulting
+receivable is included in income tax assets and amounted to
+€24 million in 2016 (2015: €53 million).
+Income tax liabilities consist primarily of income taxes for the
+respective current year and for prior-year periods that have not
+yet been definitively examined by the tax authorities.
+As of December 31, 2016, €5 million (2015: €5 million) in
+deferred tax liabilities were recognized for the differences
+between net assets and the tax bases of subsidiaries and asso-
+ciated companies (the so-called "outside basis differences").
+Accordingly, deferred tax liabilities were not recognized for
+temporary differences of €483 million (2015: €466 million) at
+subsidiaries and associated companies, as E.ON is able to control
+the timing of their reversal and the temporary difference will
+not reverse in the foreseeable future.
+Changes in tax rates resulted in tax income of €78 million in
+total (2015: €53 million).
+Income taxes relating to discontinued operations (see also Note 4)
+are reported in the income statement under "Income from dis-
+continued operations." In the reporting year they amounted to
+tax income of €929 million (2015: tax expense of €108 million).
+The prior-year figures have been similarly adjusted to include
+discontinued operations.
+The base income tax rate of 30 percent applicable in Germany,
+which is unchanged from the previous year, is composed of
+corporate income tax (15 percent), trade tax (14 percent) and
+the solidarity surcharge (1 percent). The differences from the
+effective tax rate are reconciled as follows:
+Reconciliation to Effective Income Taxes/Tax Rate
+2016
+2015
+10.7
+%
+€ in millions
+%
+Summary of Financial Highlights and Explanations
+Income/Loss from continuing operations before taxes
+Foreign tax rate differentials
+Changes in tax rate/tax law
+Tax effects on tax-free income
+-1,725
+100.0
+-1,492
+100.0
+-518
+30.0
+-447
+30.0
+-311
+18.0
+13
+Expected income taxes
+-10.8
+-136
+151
+260
+162
+360
+7
+47
+23
+-287
+972
+766
+6,910
+2,906
+467
+6,262
+2,077
+1,602
+630
+6,536
+1,248
+1,414
+1,887
+12
+164
+18
+3,378
+2,453
+Liabilities
+Loss carryforwards
+Tax credits
+Other
+Subtotal
+Changes in value
+Deferred taxes (gross)
+Netting
+Deferred taxes (net)
+Current
+144
+December 31, 2016
+December 31, 2015
+Tax assets
+Tax liabilities
+Tax assets
+Tax liabilities
+210
+446
+439
+898
+172
+325
+654
+396
+786
+2016
+Before
+income
+Income
+After
+income
+Before
+2015
+After
+€ in millions
+taxes
+taxes
+taxes
+income
+taxes
+Income
+361
+taxes
+taxes
+Cash flow hedges
+-331
+-10
+-341
+Income Taxes on Components of Other Comprehensive Income
+Income taxes recognized in other comprehensive income for the
+years 2016 and 2015 break down as follows:
+income
+2,003
+319
+Of the deferred taxes reported, a total of -€425 million was
+charged directly to equity in 2016 (2015: -€685 million charge).
+A further €49 million in current taxes (2015: €49 million) was
+also recognized directly in equity.
+7,537
+5,589
+17,228
+15,213
+-3,061
+-3,574
+4,476
+5,589
+13,654
+-159
+-3,035
+2,155
+15,213
+559
+5,655
+4,096
+609
+1,441
+-9,558
+-9,558
+-3,035
+2,554
+-2,517
+1,565
+-89
+-1,015
+2,115
+-38,969
+93,020
+-1,604
+-97
+5,667
+-1,255
+-52
+56,807
+Property, plant and equipment
+4,268
+-309
+1,017
+24,052
+Technical equipment, plant and machinery
+78,151
+-1,491
+-30,743
+3,948
+Advance payments and construction in progress
+891
+Other equipment, fixtures, furniture and office equipment
+1,329
+-5
+100
+-115
+17
+49,892
+-864
+4,117
+(13) Earnings per Share
+Internally generated intangible assets
+212
+-14
+-113
+50
+-1
+83
+217
+Intangible assets subject to amortization
+6,390
+120
+-3,360
+144
+-132
+115
+626
+13
+-43
+35
+-66
+3
+-47
+597
+Contract-based intangible assets
+4,664
+149
+3,277
+-3,012
+-41
+19
+1,835
+Technology-based intangible assets
+795
+-5
+-169
+56
+Intangible assets not subject to amortization
+824
+-82
+3,169
+51
+-84
+50
+-3,451
+46
+6,557
+-1,133
+Buildings
+4
+-103
+4
+-1,949
+-57
+2,715
+Real estate and leasehold rights
+614
+-10
+1,151
+24
+-71
+765
+-995
+-2
+439
+Advance payments on intangible assets
+326
+-3,466
+-14
+242
+-6
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2016
+-112
+401
+Intangible assets
+7,540
+-35
+717
+2
+2
+-2,382
+-2,513
+Income/Loss from discontinued operations, net
+-13,842
+-4,157
+Less: Non-controlling interests
+7,774
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+-329
+-6,068
+-4,486
+Net income/loss attributable to shareholders of E.ON SE
+-8,450
+-6,999
+in €
+Earnings per share (attributable to shareholders of E.ON SE)
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+from continuing operations
+-293
+Less: Non-controlling interests
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+-217
+Summary of Financial Highlights and Explanations
+Earnings per Share
+€ in millions
+2016
+2015
+Income/Loss from continuing operations
+-2,165
+-2,220
+149
+1
+from discontinued operations
+Weighted-average number of shares outstanding (in millions)
+differences
+scope of
+consolida-
+tion
+Dec. 31,
+Additions
+Disposals
+Transfers
+2016
+Jan. 1, 2016
+Goodwill
+-185
+-6,469
+0
+0
+0
+5,289
+Marketing-related intangible assets
+Customer-related intangible assets
+11,943
+from net income/loss
+€ in millions
+Acquisition and production costs
+The computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued no
+potentially dilutive ordinary shares.
+(14) Goodwill, Intangible Assets and
+Property, Plant and Equipment
+The changes in goodwill and intangible assets, and in property,
+plant and equipment, are presented in the tables on the
+following pages:
+-1.22
+-1.29
+-3.11
+Exchange
+rate
+-2.31
+-3.60
+1,952
+1,944
+Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment
+Changes in
+150
+-4.33
+Energy Networks
+-3,291
+Corporate
+5
+-1
+-77
+-1,805
+2,859
+-571
+-5
+-26
+-76
+55
+8
+-615
+180
+-81
+-2
+-1
+-49
+13
+-120
+92
+-2,611
+-153
+10
+16
+-1,615
+The carrying amounts of the immaterial associates accounted for
+under the equity method totaled €480 million (2015: €1,045 mil-
+lion), and those of the joint ventures totaled €497 million (2015:
+€371 million). The significant decline in the area of associates
+accounted for under the equity method was a result of the dis-
+posal of Uniper companies.
+Shares in Companies Accounted for under the
+Equity Method
+€744 million (2015: €623 million) in non-current securities is
+restricted for the fulfillment of legal insurance obligations of
+Versorgungskasse Energie ("VKE") (see Note 31).
+Impairments on other financial assets amounted to €48 million
+(2015: €57 million). The carrying amount of other financial
+assets with impairment losses was €299 million as of the end
+of the fiscal year (2015: €363 million).
+In 2016, impairment charges on companies accounted for under
+the equity method amounted to €18 million (2015: €14 million).
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+Companies accounted for under the equity method consist
+solely of associates and joint ventures.
+¹The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+2,454
+2,370
+-2
+-2
+0
+-342
+-3
+-167
+-42
+47
+34
+-473
+244
+20
+Investment income generated from companies accounted for
+under the equity method amounted to €223 million in 2016
+(2015: €232 million).
+-178
+120
+2,259
+4,350
+4,724
+4,327
+11,500
+Total
+Non-current securities
+Joint
+ventures¹
+2,444
+10
+2,092
+278
+1,202
+3
+4,536
+2,256
+Associates¹
+E.ON Group
+December 31, 2015
+December 31, 2016
+Joint
+ventures¹
+Associates¹
+4,096
+254
+821
+Equity investments
+6,352
+Companies accounted for under the equity method
+10,462
+-320
+97
+-2,940
+-1
+-77
+42
+-3,015
+3,375
+-307
+4
+280
+97
+-137
+45
+-18
+806
+-22
+-2
+-5
+Customer Solutions
+1
+-14
+-42
+284
+12
+E.ON Group
+The following table summarizes significant line items of the aggre-
+gated statements of comprehensive income of the associates and
+joint ventures that are accounted for under the equity method:
+Associates
+1,549
+-18
+16
+-6
+1
+5
+-2
+437
+-42
+-2
+1
+1
+-16
+-58
+343
+-3,075
+-8
+1,516
+-191
+117
+-147
+-1,728
+-1,788
+0
+-1
+-741
+1,094
+-615
+4
+127
+-60
+42
+-502
+124
+-120
+9
+61
+-27
+-1
+-78
+139
+-3,015
+-22
+1,521
+-192
+117
+-136
+Summarized Financial Information for Individually Non-Material Associates and Joint Ventures Accounted for
+under the Equity Method
+2,329
+6
+-10
+4
+3
+5
+Proportional share of other comprehensive income
+178
+142
+64
+91
+114
+51
+Proportional share of net income from continuing
+operations
+2015
+2016
+2015
+2016
+2015
+2016
+€ in millions
+Total
+Joint ventures
+9
+-441
+-7
+56
+336
+-4
+45
+-10
+-68
+546
+-3,959
+6
+2,198
+-103
+30
+-91
+-1,919
+1,250
+-47,966
+922
+171
+151
+54
+95
+117
+Proportional share of total comprehensive income
+-135
+€ in millions
+Companies Accounted for under the Equity Method and Other Financial Assets
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective forecasts
+for commodity market prices, future electricity and gas prices
+in the wholesale and retail markets, E.ON's investment activity,
+changes in the regulatory framework, as well as for rates of
+growth and the cost of capital. These assumptions are based on
+external market data from established providers and on internal
+estimates
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for
+impairment-testing purposes are generally based on the three
+planning years of the medium-term plan plus two additional
+detailed planning years. In certain justified exceptional cases, a
+longer detailed planning period is used as the calculation basis.
+The cash flow assumptions extending beyond the detailed plan-
+ning period are determined using growth rates that generally
+correspond to the inflation rates in each of the currency areas
+where the cash-generating units are tested. In 2016, the inflation
+rate used for the euro area was 1.5 percent (2015: 1.5 percent).
+The recoverable amount for Renewables was determined in
+2016 without a terminal value calculation. The interest rates used
+for discounting cash flows are calculated using market data
+for each cash-generating unit, and as of December 31, 2016,
+ranged between 2.7 and 8.0 percent after taxes (2015: 4.0 and
+10.8 percent).
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units. In
+the absence of binding sales transactions or market prices for
+the respective cash-generating units, fair values are calculated
+based on discounted cash flow methods.
+IFRS 3 prohibits the amortization of goodwill. Instead, goodwill
+is tested for impairment at least annually at the level of the
+cash-generating units. Goodwill must also be tested for impair-
+ment at the level of individual cash-generating units between
+these annual tests if events or changes in circumstances indicate
+that the recoverable amount of a particular cash-generating
+unit might be impaired. Intangible assets subject to amortization
+and property, plant and equipment must generally be tested
+for impairment whenever there are particular events or external
+circumstances indicating the possibility of impairment.
+Impairments
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 150 through 153.
+Goodwill and Non-Current Assets
+154
+Notes
+38,997
+-54,023
+362
+-3,134
+99
+7,338
+-2,764
+39
+-533
+-55,430
+3,579
+-689
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment, and of groups of these assets. If the goodwill of a
+cash-generating unit is combined with assets or groups of
+assets for impairment testing, the assets must be tested first.
+7
+With the exception of the effects from the valuation of the
+Uniper Group in accordance with IFRS 5, the goodwill impair-
+ment testing performed in 2016 necessitated no recognition
+of impairment charges (2015: €4.8 billion). In connection with
+Uniper, impairments were recognized on the goodwill included
+in the discontinued operations in the amount of approximately
+€3.0 billion.
+In fiscal year 2016, a total of €387 million in impairments was
+charged to property, plant and equipment in the core business.
+In renewable energies in the Onshore & Solar business, property,
+plant and equipment totaling €211 million was written down
+in the USA, Poland and Italy, mainly as a result of lower expected
+revenues in these countries as well as adverse regulatory devel-
+opments in Poland. In the Energy Networks Germany segment,
+impairment losses of around €71 million were recognized on
+property, plant and equipment. The largest single item in this
+context was a natural gas storage facility, which was written
+The majority of the change concerns the disposal of the Uniper
+activities.
+Intangible Assets
+156
+Notes
+Reversals of impairments recognized in previous years amounted
+to €0.4 billion in 2015. The greatest impairment reversal in
+terms of amount related to a power plant in the United Kingdom,
+which was written up by €0.2 billion to a recoverable amount
+of €1 billion. Responsible for this reversal were changed expec-
+tations regarding price developments for carbon allowances in
+the United Kingdom.
+Impairments charged to intangible assets amounted to €0.2 bil-
+lion in total in 2015. This was primarily attributable to the
+developments in the former Exploration & Production segment
+(€0.1 billion).
+A total of €3.1 billion in impairments was charged to property,
+plant and equipment in 2015. Material impairment charges were
+attributable to the former Generation global unit, in the amount
+of €1.7 billion, and to the former Exploration & Production global
+unit, in the amount of €0.9 billion. Within the former Generation
+global unit, property, plant and equipment was written down in
+several countries as a consequence of lower expected power
+sales. The most substantial individual impairments in terms of
+amount related to one conventional power plant in France at
+€0.4 billion and one in the United Kingdom at €0.2 billion, and
+to one conventional power plant in Germany and one in the
+Netherlands at €0.2 billion each. This resulted in recoverable
+amounts of €0.1 billion, €0.6 billion, €1.1 billion and €1.5 billion,
+respectively, in France, the United Kingdom, Germany and the
+Netherlands. Furthermore, a gas storage facility within the former
+Global Commodities unit was written down by €0.2 billion to a
+recoverable amount of €0.1 billion.
+addition, goodwill was written down by roughly €0.2 billion in
+the former focus region Russia. This unit was written down to a
+recoverable amount of €2.7 billion. In connection with initiated
+sales, in 2015 impairments were recognized on goodwill in the
+disposal group in the amount of roughly €0.7 billion relating to
+the U.K. and Norwegian North Sea businesses of the former
+Exploration & Production unit on the basis of the expected pur-
+chase prices.
+Goodwill impairment testing performed in 2015 had necessitated
+recognition of impairment charges of €4.8 billion. The most
+substantial individual issue in terms of amount, at €4.5 billion,
+was the total write-down of all goodwill in the former Genera-
+tion global unit to its recoverable amount of €6.9 billion. In
+In addition, further impairments related to Uniper were recog-
+nized. Following the resolution of the Annual General Meeting
+on the spinoff of the Uniper businesses and immediately before
+reclassification of the carrying amounts of all assets and liabilities
+to discontinued operations, an impairment of €2.9 billion was
+recognized in non-current assets in the second quarter of 2016
+on the basis of IAS 36. When shares in Uniper SE began trading
+on the Frankfurt Stock Exchange, the assets and the carrying
+amounts of the Uniper Group at E.ON were to be reviewed on
+the basis of the share price plus a market-based premium. The
+resulting additional impairment in the third and fourth quarters
+of 2016 of €7.0 billion was initially allocated to goodwill at
+€3.0 billion and was then, on the basis of relative book values,
+reclassified to property, plant and equipment (€3.6 billion) and
+intangible assets (€0.6 billion). This was offset by deferred taxes
+in the amount of €0.2 billion. All impairments are included in
+income from discontinued operations.
+Reversals of impairments in the core business recognized in
+previous years amounted to approximately €57 million in 2016,
+significantly influenced by a reduction in the corporate tax rate
+and regulatory developments in Hungary.
+Impairments on intangible assets in the core business amounted
+to approximately €56 million in 2016. This is primarily attribut-
+able to the developments in Onshore & Solar Renewable Energies.
+down by around €56 million due to the continued difficult mar-
+keting situation of the corresponding capacities and the develop-
+ment of the trading range between summer and winter prices.
+Impairments of €72 million were charged to the Customer Solu-
+tions UK segment. This affected in particular various assets
+from the area of combined heat and power, mainly due to lower
+expected profitability in later capacity market years.
+155
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The goodwill of all cash-generating units whose respective
+goodwill as of the balance sheet date is material in relation to
+the total carrying amount of all goodwill shows a surplus of
+recoverable amounts over the respective carrying amounts and,
+therefore, based on current assessment of the economic situa-
+tion, only a significant change in the material valuation parameters
+would necessitate the recognition of goodwill impairment.
+In 2016, the Company recorded an amortization expense of
+€191 million (2015: €319 million). Impairment charges on
+intangible assets amounted to €147 million in 2016 (2015:
+€228 million).
+-222
+395
+-113
+4
+457
+-156
+-58
+-14
+-4,082
+2,274
+-441
+4
+-36
+11
+-6
+1
+-4
+-411
+4,465
+-3,075
+87
+-228
+-1
+3
+230
+-3,959
+-48,815
+-7
+-7
+-1,085
+361
+-968
+-1
+3
+175
+-109
+10
+-9
+-1,037
+30,185
+-47,966
+348
+-2,762
+-138
+6,300
+-2,486
+86
+-499
+2,598
+158
+Intangible assets include emission rights from different trading
+systems with a carrying amount of €130 million (2015:
+€442 million).
+Property, Plant and Equipment
+358
+1,030
+157
+1,857
+515
+606
+174
+751
+72
+1,357
+246
+175
+147
+222
+67
+397
+214
+years
+46
+37
+57
+827
+18
+The decrease in payment obligations from finance leases in fiscal
+year 2016 is mainly due to the deconsolidation of the Uniper
+businesses.
+Regarding future obligations under operating leases where
+economic ownership is not transferred to E.ON as the lessee,
+see Note 27.
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+(15) Companies Accounted for under the Equity
+Method and Other Financial Assets
+Notes
+See Note 17 for information on receivables from finance leases.
+47
+113
+12
+42
+21
+49
+14
+22
+Due in more than 5 years
+Total
+Due in 1 to 5 years
+Due within 1 year
+Nominal value of outstanding lease
+installments
+€ in millions
+2015
+2016
+E.ON as Lessor-Operating Leases
+E.ON also functions in the capacity of lessor. Contingent lease
+payments received totaled €29 million in 2016 (2015: €30 mil-
+lion). Future lease installments receivable under operating leases
+are due as shown in the table at right:
+The present value of the minimum lease obligations is reported
+under liabilities from leases.
+€14 million in research and development costs as defined by
+IAS 38 were expensed in 2016 (2015: €20 million).
+103
+Present values
+2015
+717
+256
+29
+27
+4
+4
+December 31,
+2015
+2016
+Net carrying amount of capitalized lease assets
+Other equipment, fixtures, furniture and office equipment
+Technical equipment, plant and machinery
+Buildings
+Land
+€ in millions
+E.ON as Lessee-Carrying Amounts of Capitalized Lease Assets
+Borrowing costs in the amount of €37 million were capitalized
+in 2016 (2015: €108 million) as part of the historical cost of
+property, plant and equipment.
+The property, plant and equipment capitalized in the framework
+of finance leases had the following carrying amounts as of
+December 31, 2016:
+In 2016 there were restrictions on disposals involving primarily
+land and buildings, as well as technical equipment and machinery,
+in the amount of €2,415 million (2015: €1,434 million).
+In addition, write-downs on property, plant and equipment in
+the amount of €3,187 million (2015: €3,134 million) were
+made in the year under review. Reversals of impairments on
+property, plant and equipment in the amount of €57 million
+(2015: €362 million) were recognized in the reporting year.
+Depreciation amounted to €3,494 million in 2016 (2015:
+€2,764 million). This mainly affects €1,568 million in impairments
+for capitalized disposal costs in connection with the legislative
+implementation of the KFK recommendations (see Note 25).
+Lower depreciation of the disposed E&P activities had an off-
+setting effect.
+The majority of the change concerns the disposal of the Uniper
+activities.
+65
+55
+93
+843
+2016
+2015
+2016
+2015
+2016
+Total
+Due in more than 5 years
+Due in 1 to 5
+Due within 1 year
+€ in millions
+Covered interest share
+Minimum lease payments
+E.ON as Lessee-Payment Obligations under Finance Leases
+157
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Some of the leases contain price-adjustment clauses, as well as
+extension and purchase options. The corresponding payment
+obligations under finance leases are due as shown below:
+352
+-1
+28
+-70
+1,454
+9
+-451
+1,532
+-1,684
+-36
+824
+Advance payments on intangible assets
+223
+13
+23
+362
+-8
+-287
+326
+Intangible assets
+7,822
+-72
+-259
+2,055
+-1,827
+Intangible assets not subject to amortization
+-179
+6,390
+-135
+4,664
+Technology-based intangible assets
+740
+5
+21
+53
+-56
+32
+795
+Internally generated intangible assets
+155
+2
+24
+-15
+46
+212
+Intangible assets subject to amortization
+6,145
+-94
+169
+161
+144
+65
+7,540
+2,690
+10
+-14
+91
+Advance payments and construction in progress
+6,441
+125
+16
+1,010
+Property, plant and equipment
+96,703
+1,062
+-1,256
+4,249
+-183
+-486
+-7,834
+15
+1,329
+-2,838
+4,268
+96
+93,020
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2015
+1,410
+Real estate and leasehold rights
+Other equipment, fixtures, furniture and office equipment
+2,860
+42
+89
+21
+-126
+-1
+2,715
+Buildings
+6,674
+-47
+80
+297
+-507
+60
+6,557
+Technical equipment, plant and machinery
+79,488
+-224
+932
+-1,427
+2,830
+-6,532
+78,151
+Energy Networks
+-17
+-19
+acquisitions and disposals
+5
+Impairment charges
+Other changes4
+342
+-31
+-16
+-342
+291
+-2,882
+57
+-968
+4
+253
+-96
+88
+-1
+-689
+14
+770
+60
+Changes resulting from
+1
+6,441
+2,929
+CEE/
+Renew-
+€ in millions
+Germany
+Sweden
+Turkey Germany
+UK
+Other
+Non-Core Functions/
+ables Business¹
+Other²
+E.ON
+Group
+Net carrying amount of
+goodwill as of
+January 1, 2016³
+271
+131
+76
+525
+1,099
+60
+1,350
+0
+84
+-203
+21,081
+Disposals
+Transfers
+2015
+12,324
+174
+-555
+0
+0
+11,943
+Marketing-related intangible assets
+Customer-related intangible assets
+2
+2
+591
+5
+167
+-47
+1
+717
+Contract-based intangible assets
+4,657
+-106
+Additions
+-28,811
+-720
+-47
+Dec. 31,
+differences
+297
+2,068
+-54,023
+952
+27,609
+-3,494
+514
+7
+-3,187
+57
+-31,565
+25,242
+Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment
+152
+Acquisition and production costs
+Changes in
+Exchange
+rate
+€ in millions
+Goodwill
+Jan. 1, 2015
+scope of
+consolida-
+tion
+Customer Solutions
+CEE/
+€ in millions
+Growth rate (in %)5
+1.5
+1.5
+Cost of capital (in %)5
+2.7
+6.6
+n.a.
+3.8-4.1
+Other non-current assets6
+Impairment
+-71
+Reversals
+-19
+52
+-72
+-3
+-278
+5
+-2,891
+-3,334
+57
+¹Also includes the goodwill of the Uniper Group, which was deconsolidated as of December 31, 2016.
+2Recognized goodwill expected to be eliminated from the scope of consolidation soon.
+³Due to the changed structure in segment reporting, goodwill was reallocated on April 1, 2016.
+3,463
+4Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale. Also included is the goodwill impairment of discontinued operations (see also
+page 154).
+179
+1,350
+-236
+0
+-4,786
+0
+-5,502
+6,441
+38
+5
+0
+-2,929
+179
+-2,983
+Net carrying amount of
+goodwill as of
+December 31, 2016
+613
+100
+60
+183
+875
+103
+0
+32
+5Presented here are the growth rates and cost of capital after taxes for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+6Other non-current assets consist of intangible assets and of property, plant and equipment.
+Report of the Supervisory Board
+-5,502
+-4
+3,680
+0
+0
+0
+-1,826
+3,463
+-2
+-2
+0
+-473
+6
+50
+-35
+47
+-405
+192
+-1,805
+-41
+1,283
+2016
+CEO Letter
+2016
+Impairment
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+151
+Accumulated depreciation
+Net carrying
+amounts
+Changes in
+Exchange
+scope of
+rate
+consolida-
+Dec. 31,
+Dec. 31,
+Jan. 1, 2016
+differences
+tion
+Additions
+Disposals
+Transfers
+Reversals
+-512
+2015
+2015
+Impairment charges
+Other changes²
+1
+-20
+59
+22
+4
+-174
+-148
+-4,748
+45
+86
+-38
+-613
+-4,786
+-437
+Net carrying amount of
+goodwill as of
+December 31, 2015
+271
+131
+76
+acquisitions and disposals
+525
+Changes resulting from
+825
+Germany
+Sweden
+Turkey Germany
+UK
+Other
+Renew-
+ables
+Non-Core
+Business¹
+Corporate
+Functions/
+Other
+E.ON
+Group
+Net carrying amount of
+goodwill as of
+January 1, 2015
+271
+128
+75
+545
+1,040
+58
+1,283
+7,587
+11,812
+1,099
+60
+1,350
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+153
+Accumulated depreciation
+Net carrying
+amounts
+Changes in
+Exchange
+scope of
+rate
+consolida-
+Dec. 31,
+Dec. 31,
+Jan. 1, 2015
+differences
+tion
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+2,929
+0
+6,441
+Growth rate (in %)³
+Cost of capital (in %)³
+Other non-current assets4
+Impairment
+-36
+Reversals
+8
+217
+-1
+-24
+-244
+4
+282
+43
+-1,819
+112
+-1,025
+-3,362
+449
+¹Also includes the goodwill of the Uniper Group, which was deconsolidated as of December 31, 2016.
+2Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale. Also included is the goodwill impairment of disposal groups (see also page 155).
+3These values are not indicated due to the change in structure in segment reporting in 2016.
+4Other non-current assets consist of intangible assets and of property, plant and equipment.
+-204
+-319
+Total
+4,009
+Customer Solutions
+166
+184
+Germany
+79
+72
+UK
+1
+1
+Other
+86
+111
+Renewables
+Non-Core Business
+376
+167
+-1
+253
+532
+378
+Sweden
+-965
+-868
+The change in OCI attributable to companies accounted for
+using the equity method primarily results from the elimination
+of negative exchange rate differences. This was offset by the
+recognition of OCI attributable to associates of the Uniper Group.
+Notes
+(23) Non-Controlling Interests
+Non-controlling interests by segment as of the dates indicated
+are shown in the following table:
+Non-Controlling Interests
+December 31,
+€ in millions
+Energy Networks
+Germany
+2016
+2015
+1,513
+1,502
+1,135
+1,249
+CEE/Turkey
+Balance as of December 31 (after taxes)
+Corporate Functions/Other
+288
+-41
+92
+Balance as of December 31, 2015
+6
+5
+-631
+-146
+Changes
+2
+4
+534
+-116
+Balance as of December 31, 2016
+8
+9
+-97
+-262
+-21
+E.ON Group
+2
+-238
+263
+2,342
+2,648
+The decrease in non-controlling interests in the non-core business
+resulted primarily from the spinoff of Uniper. This was partially
+offset by a capital increase in the Renewables segment.
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests:
+Share of OCI Attributable to Non-Controlling Interests
+Available-for-sale
+€ in millions
+Cash flow hedges
+securities
+Currency translation
+adjustments
+Remeasurements of
+defined benefit plans
+Balance as of January 1, 2015
+4
+26
+-590
+Changes
+7
+-1
+-875
+total of 48,603,400 treasury shares (December 31, 2015:
+48,603,400) having a book value of €1,714 million (equivalent
+to 2.43 percent or €48,603,400 of the capital stock).
+The Company has further been authorized by the Annual Share-
+holders Meeting to buy shares using put or call options, or a
+combination of both. When derivatives in the form of put or call
+options, or a combination of both, are used to acquire shares,
+the option transactions must be conducted at market terms with
+a financial institution or on the market. No shares were acquired
+in 2016 using this purchase model.
+Notes
+164
+Authorized Capital
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase until
+May 2, 2017, the Company's capital stock by a total of up to
+€460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in kind
+(with the option to restrict shareholders' subscription rights);
+such increase shall not, however, exceed the amount and number
+of shares in which the authorized capital pursuant to Section 3
+of the Articles of Association of E.ON AG still exists at the point
+in time when the conversion of E.ON AG into a European com-
+pany ("SE") becomes effective pursuant to the conversion plan
+dated March 6, 2012 (authorized capital pursuant to Sections
+202 et seq. AktG). Subject to the Supervisory Board's approval,
+the Management Board is authorized to exclude shareholders'
+subscription rights. The authorized capital has not been used.
+Conditional Capital
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock (with
+the option to exclude shareholders' subscription rights) in the
+amount of €175 million, which is authorized until May 2, 2017.
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise
+by holders of option or conversion rights, and those arising from
+compliance with the mandatory conversion of bonds with con-
+version or option rights, profit participation rights and income
+bonds that have been issued or guaranteed by E.ON SE or a Group
+company of E.ON SE as defined by Section 18 AktG, and to the
+extent that no cash settlement has been granted in lieu of con-
+version and no E.ON SE treasury shares or shares of another
+listed company have been used to service the rights. However,
+this conditional capital increase only applies up to the amount
+and number of shares in which the conditional capital pursuant
+to Section 3 of the Articles of Association of E.ON AG has not
+yet been implemented at the point in time when the conversion
+of E.ON AG into a European company ("SE") becomes effective
+in accordance with the conversion plan dated March 6, 2012.
+The conditional capital has not been used.
+Voting Rights
+The following notices pursuant to Section 21 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+Information on Stockholders of E.ON SE
+Voting rights
+Stockholder
+Date of notice
+Threshold
+exceeded
+BlackRock Inc., Wilmington, U.S.
+Pursuant to a resolution by the Annual Shareholders Meeting of
+May 3, 2012, the Company is authorized to purchase own shares
+until May 2, 2017. The shares purchased, combined with other
+treasury shares in the possession of the Company, or attributable
+to the Company pursuant to Sections 71a et seq. AktG, may at
+no time exceed 10 percent of its capital stock. The Management
+Board was authorized at the aforementioned Annual Shareholders
+Meeting to cancel any shares thus acquired without requiring
+a separate shareholder resolution for the cancellation or its
+implementation. The total number of outstanding shares as of
+December 31, 2016, was 1,952,396,600 (December 31, 2015:
+1,952,396,600). As of December 31, 2016, E.ON SE held a
+Dec. 20, 2016
+The capital stock is subdivided into 2,001,000,000 registered
+shares with no par value ("no-par-value shares") and amounts
+to €2,001,000,000 (2015: €2,001,000,000). The capital stock
+of the Company was provided by way of conversion of E.ON AG
+into a European Company ("SE").
+Cash and cash equivalents include €4,668 million (2015:
+€4,404 million) in checks, cash on hand and balances in Bundes-
+bank accounts and at other financial institutions with an original
+maturity of less than three months, to the extent that they are
+not restricted.
+2,146
+2,020
+Fixed-term deposits with an
+original maturity greater than 3 months
+1
+58
+Restricted cash and cash equivalents
+852
+923
+Cash and cash equivalents
+5,574
+5,189
+Total
+8,573
+8,190
+In 2016, there was €27 million in restricted cash (2015:
+€4 million) with a maturity greater than three months.
+Current securities with an original maturity greater than three
+months include €275 million (2015: €435 million) in securities
+held by VKE that are restricted for the fulfillment of legal insur-
+ance obligations (see Note 31).
+(19) Capital Stock
+5%
+Gained voting
+rights on
+Dec. 15, 2016
+Allocation
+45
+-8,540
+-8,495
+9,374
+9,419
+Under German securities law, E.ON SE shareholders may receive
+distributions from the balance sheet profit of E.ON SE reported
+as available for distribution in accordance with the German
+Commercial Code.
+As of December 31, 2016, these German-GAAP retained earn-
+ings totaled €472 million (2015: €3,673 million). Of this amount,
+legal reserves of €45 million (2015: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG. Other retained earnings
+decreased by €3,612 million because of the spinoff of Uniper
+Beteiligungs GmbH described in Note 4.
+The amount of retained earnings available for distribution is
+€345 million (2015: €3,626 million).
+A proposal to distribute a cash dividend for 2016 of €0.21 per
+share will be submitted to the Annual Shareholders Meeting. For
+2015, shareholders at the June 8, 2016, Annual Shareholders
+Meeting voted to distribute a dividend of €0.50 for each dividend-
+paying ordinary share. Based on a €0.21 dividend, the total profit
+distribution is €410 million (2015: €976 million).
+(22) Changes in Other Comprehensive Income
+The change in other comprehensive income is primarily the result
+of the recognition of the OCI of the Uniper Group in the amount
+of €3.7 billion (of which €2.2 billion relates to non-controlling
+interests). For further information, please refer to the Consolidated
+Statements of Recognized Income and Expenses of the E.ON
+Group on page 109 and the Statement of Changes in Equity on
+page 114 et seq.
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method.
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+€ in millions
+2016
+2015
+Balance as of December 31 (before taxes)
+Taxes
+-964
+45
+2016
+December 31,
+2015
+Other retained earnings
+Total
+Percentages
+indirect
+6.43
+Absolute
+128,725,767
+(20) Additional Paid-in Capital
+Additional paid-in capital declined by €3,357 million during 2016,
+to €9,201 million (2015: €12,558 million). The reduction of
+additional paid-in capital is due to the spin-off of Uniper.
+CEO Letter
+Report of the Supervisory Board
+CEO Letter
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+165
+(21) Retained Earnings
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+Retained Earnings
+€ in millions
+Legal reserves
+Strategy and Objectives
+4,210
+Report of the Supervisory Board
+Strategy and Objectives
+84
+183
+59
+270
+There are no major restrictions beyond those under customary
+corporate or contractual provisions.
+Notes
+168
+(24) Provisions for Pensions and Similar
+Obligations
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €16.4 billion,
+were covered by plan assets having a fair value of €12.4 billion
+as of December 31, 2016. This corresponds to a funded status
+of 76 percent.
+In addition to the reported plan assets, VKE, which is included
+in the Consolidated Financial Statements, administers another
+fund holding assets of €1.0 billion (2015: €1.1 billion) that do
+not constitute plan assets under IAS 19 but which are mostly
+intended for the coverage of retirement benefit obligations at
+E.ON Group companies in Germany (see Note 31).
+The present value of the defined benefit obligations, the fair
+value of plan assets and the net defined benefit liability (funded
+status) are presented in the table below. A significant component
+of the change compared to December 31, 2015 is the decon-
+solidation of the Uniper Group, which is shown in the following
+tables on changes in the defined benefit obligation, the fair
+value of plan assets and the net defined benefit liability under
+changes in the scope of consolidation.
+Provisions for Pensions and Similar Obligations
+€ in millions
+Present value of all defined benefit obligations
+Germany
+110
+United Kingdom
+126
+271
+49
+52
+85
+110
+Sales
+1,201
+1,202
+2,785
+2,672
+3,326
+3,148
+Net income/loss
+123
+115
+146
+135
+203
+Comprehensive income
+45
+Other countries
+Fair value of plan assets
+5,554
+11
+25
+12,383
+13,712
+3,339
+3,320
+634
+726
+Other countries
+36
+162
+4,009
+4,208
+Presented as operating receivables
+-2
+Presented as provisions for pensions and similar obligations
+5,299
+Total
+8,133
+17,920
+Germany
+United Kingdom
+Other countries
+Total
+Net defined benefit liability/asset (-)
+Germany
+United Kingdom
+December 31,
+2016
+2015
+10,412
+11,453
+5,933
+6,280
+47
+187
+16,392
+7,073
+39
+Share of earnings attributable to non-controlling interests
+2015
+709
+721
+Non-controlling interests in equity (in %)¹
+28.0
+24.8
+33.0
+33.0
+38.5
+38.5
+Dividends paid out to non-controlling interests
+23
+23
+58
+60
+Operating cash flow
+151
+229
+454
+254
+464
+463
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+167
+Subsidiaries with material non-controlling interests are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests as
+required by IFRS 12 for subsidiaries with material non-controlling
+interests can be found in the list of shareholdings pursuant to
+Section 313 (2) HGB (see Note 36).
+The following tables provide a summary overview of cash flow
+and significant line items of the aggregated income statements
+and of the aggregated balance sheets of subsidiaries with
+material non-controlling interests:
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data as of December 31
+E.ON România Group
+E.DIS Group
+Avacon Group
+€ in millions
+2016
+2015
+2016
+2015
+2016
+2015
+Non-controlling interests in equity
+356
+59
+348
+237
+356
+335
+443
+387
+449
+392
+¹Non-controlling interests in the lead company of the respective group; share of segment in Romania.
+Subsidiaries with Material Non-Controlling Interests-Earnings Data
+E.ON România Group
+E.DIS Group
+Avacon Group
+€ in millions
+2016
+2015
+2016
+2015
+2016
+Current liabilities
+1,341
+1,429
+498
+Non-current assets
+1,031
+969
+2,054
+2,039
+2,905
+2,898
+Current assets
+E.ON Stock
+772
+357
+281
+334
+282
+Non-current liabilities
+246
+241
+522
+586
+166
+Trade receivables
+Consolidation adjustments
+2015
+2016
+2015
+2016
+2015
+2016
+2015
+2016
+Sales
+92,115
+1,079
+1,080
+1,167
+1,055
+1,001
+1,009
+67,285
+Net income/loss from continuing operations
+Non-controlling interests in the net income/
+loss from continuing operations
+€ in millions
+Gasag Berliner
+Gaswerke AG
+81
+83
+209
+212
+Carrying amount of equity investment
+2,688
+0
+Západoslovenská
+energetika a.s.
+384
+336
+317
+208
+193
+Material Associates-Earnings Data
+Uniper Group
+Nord Stream AG
+358
+-3,234
+-3,757
+428
+47
+-13
+1
+1
+Total comprehensive income
+-2,430
+-4,401
+116
+485
+105
+31
+94
+89
+Ownership interest (in %)
+46.65
+46.65
+511
+57
+-644
+804
+395
+58
+44
+93
+88
+-17
+328
+10
+5
+Dividend paid out
+303
+321
+36
+31
+58
+61
+Other comprehensive income
+89
+15.50
+83
+Consolidation adjustments
+Current assets
+21,672
+34,062
+589
+606
+286
+290
+736
+194
+Current liabilities (including provisions)
+20,796
+34,218
+548
+506
+311
+377
+136
+208
+762
+1,785
+Gaswerke AG
+energetika a.s.
+€ in millions
+Non-current assets
+2016
+2015
+2016
+1,802
+2015
+2015
+2016
+2015
+27,199
+29,461
+5,944
+6,234
+2016
+159
+Non-current liabilities (including provisions)
+15,272
+46.65
+46.65
+15.50
+15.50
+36.85
+36.85
+49.00
+Ownership interest (in %)
+49.00
+5,701
+301
+269
+255
+234
+-1
+-19
+Proportional share of equity
+60
+65
+540
+14,304
+4,040
+4,596
+1,003
+1,019
+751
+751
+Equity
+12,803
+1,945
+1,738
+757
+696
+-3
+-38
+Non controlling interests
+582
+-3,013
+15.50
+36.85
+36.85
+-48
+-20
+45
+40
+Equity-method earnings
+after taxes
+Proportional share of net income
+20
+51
+income after taxes
+Proportional share of total comprehensive
+50
+50
+Ownership interest (in %)
+102
+12
+6
+Total comprehensive income
+-3
+Report of the Supervisory Board
+1,454
+677
+Raw materials and supplies
+2015
+2016
+December 31,
+€ in millions
+CEO Letter
+Inventories
+(16) Inventories
+161
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+The following table provides a breakdown of inventories as of
+the dates indicated:
+12
+-67
+Other comprehensive income
+Material Joint Venture-Earnings Data
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+Investments in associates totaling €384 million (2015:
+€538 million) were restricted because they were pledged as
+collateral for financing as of the balance sheet date.
+The carrying amounts of companies accounted for under the
+equity method whose shares are marketable totaled €2,703 mil-
+lion in 2016 (2015: €82 million). The fair value of E.ON's share
+in these companies was €2,707 million (2015: €84 million).
+The significant increase is due to the initial recognition of the
+proportional share of Uniper SE as a company valued under
+the equity method.
+The material associates and the material joint venture are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests as
+required by IFRS 12 for material joint arrangements and associ-
+ates can be found in the list of shareholdings pursuant to Section
+313 (2) HGB (see Note 36).
+528
+1,279
+Enerjisa Enerji A.Ş.
+2,073
+Carrying amount of equity investment
+480
+Consolidation adjustments
+1,545
+Proportional share of equity
+50
+50
+1,759
+€ in millions
+2016
+2015
+Dividend paid out
+-47
+-65
+-233
+-235
+-140
+-142
+90
+79
+Income taxes
+Interest income/expense
+Write-downs
+operations
+Net income/loss from continuing
+3,725
+3,389
+Sales
+Goods purchased for resale
+62
+978
+Work in progress and finished products
+Total
+-1
+-5
+-3
+2
+-3
+-5
+Equity-method earnings
+Consolidation adjustments
+0
+65
+56
+15
+16
+43
+38
+Notes
+0
+43
+43
+66
+49.00
+49.00
+Proportional share of total comprehensive
+income after taxes
+-1,134
+-2,053
+75
+79
+39
+11
+46
+Proportional share of net income after taxes
+66
+61
+18
+14
+46
+160
+Nord Stream AG
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income state-
+ments of the sole joint venture accounted for under the equity
+method, Enerjisa Enerji A.Ş.:
+of December 31
+2,464
+2,741
+Equity
+2,559
+3,091
+Ownership interest (in %)
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+Non-current financial liabilities
+(17) Receivables and Other Assets
+The significant decrease of €1.8 billion in inventories results
+from the deconsolidation of Uniper.
+Write-downs totaled €7 million in 2016 (2015: €63 million).
+Reversals of write-downs amounted to €3 million in 2016
+(2015: €2 million).
+Raw materials, goods purchased for resale and finished products
+are generally valued at average cost.
+2,546
+785
+114
+46
+No inventories have been pledged as collateral.
+1,226
+1,225
+Current financial liabilities
+€ in millions
+2016
+Non-current assets
+6,841
+Enerjisa Enerji A.Ş.
+2015
+7,251
+Current assets
+1,099
+1,304
+Current liabilities (including provisions)
+1,857
+2,000
+Non-current liabilities (including provisions)
+3,524
+3,464
+Cash and cash equivalents
+28
+81
+Material Joint Venture-Balance Sheet Data as
+Uniper Group
+15,001
+Gasag Berliner
+more than 360 days
+33
+31
+Net value of impaired receivables
+91
+111
+Total trade receivables
+3,999
+11,213
+73
+The individual impaired receivables are due from a large number
+of retail customers from whom it is unlikely that full repayment
+will ever be received. Receivables are monitored within the vari-
+ous units.
+Receivables from finance leases are primarily the result of cer-
+tain electricity delivery contracts that must be treated as leases
+according to IFRIC 4. The nominal and present values of the
+outstanding lease payments have the following due dates:
+E.ON as Lessor-Finance Leases
+€ in millions
+Due within 1 year
+Due in 1 to 5 years
+Due in more than 5 years
+Total
+Gross investment in finance
+lease arrangements
+Unrealized interest income
+With regard to the not impaired and not past due portfolio of
+trade receivables, there is no indication at the balance sheet
+date that the debtors will not be able to meet their payment
+obligations.
+61
+181 to 360 days
+101
+Aging Schedule of Trade Receivables
+Balance as of December 31
+-794
+-978
+€ in millions
+2016
+2015
+1"Other" includes also currency translation adjustments.
+Not impaired and not past-due
+3,294
+10,387
+Not impaired and past-due by
+614
+up to 60 days
+420
+715
+440
+61 to 90 days
+37
+70
+91 to 180 days
+63
+2016
+2015
+2016
+2015
+The present value of the outstanding lease payments is
+reported under receivables from finance leases.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+163
+(18) Liquid Funds
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+Liquid Funds
+€ in millions
+2016
+December 31,
+2015
+Securities and fixed-term deposits
+2,147
+2,078
+Current securities with an
+original maturity greater than 3 months
+Západoslovenská
+609
+-13
+372
+191
+2016
+Present value of minimum
+lease payments
+2015
+99
+35
+55
+54
+44
+241
+368
+109
+185
+132
+183
+233
+552
+47
+170
+186
+382
+563
+1.019
+410
+16
+89
+277
+564
+Other financial receivables and financial assets
+409
+235
+1,448
+3,007
+Financial receivables and other financial assets
+463
+553
+1,493
+3,571
+3,999
+11,213
+Receivables from derivative financial instruments
+965
+1,553
+11,108
+45
+5,102
+318
+Receivables from finance leases
+Material Associates-Balance Sheet Data as of December 31
+Other¹
+The Group adjustments presented in the table are primarily
+attributable to the allocation of undisclosed accruals and provi-
+sions in the context of initial recognition and to effects from the
+adjustment on the accounting policies applicable throughout
+the E.ON Group. In the framework of the transitional consolida-
+tion of Uniper SE from full consolidation to measurement at
+equity, the investment's carrying amount is valued at the stock
+exchange price as of December 31, 2016, plus a market-based
+premium for the presentation of ownership structures. The
+negative difference between the proportional share of equity of
+Uniper Group and the value described above is also shown as a
+consolidation adjustment.
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of compre-
+hensive income of the material companies accounted for under
+the equity method. The material associates in the E.ON Group
+are Uniper SE, Nord Stream AG, Gasag Berliner Gaswerke AG
+and Západoslovenská energetika a.s. Uniper SE was fully con-
+solidated in the E.ON Group until the end of fiscal year 2016
+and recognized under discontinued operations. Consequently,
+there was no reconciliation to the pro rata equity-method
+earnings in 2015 and 2016 or to the carrying amount as of
+December 31, 2015.
+159
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Receivables and Other Assets
+€ in millions
+December 31, 2016
+Non-current
+Current
+December 31, 2015
+Non-current
+54
+Other operating assets
+Current
+208
+shown in the following table:
+Valuation Allowances for Trade Receivables
+€ in millions
+2016
+2015
+Balance as of January 1
+Change in scope of consolidation
+-978
+-952
+Valuation allowances for trade receivables have changed as
+129
+Write-downs
+1,755
+-332
+Reversals of write-downs
+87
+89
+Disposals
+188
+-47
+The aging schedule of trade receivables is presented in the table
+below:
+-236
+In 2016, there were unguaranteed residual values of €12 million
+(2015: €14 million) due to E.ON as lessor under finance leases.
+Some of the leases contain price-adjustment clauses, as well as
+extension and purchase options.
+3,010
+As of December 31, 2016, other financial assets include receiv-
+ables from owners of non-controlling interests in jointly owned
+power plants of €297 million (2015: €303 million).
+432
+Trade receivables and other operating assets
+6,719
+1,761
+25,331
+5,534
+Total
+7,182
+9,105
+Changes to receivables and other assets result from the disposal
+162
+2,314
+Notes
+of Uniper, unless otherwise noted.
+26,824
+Report of the Supervisory Board
+CEO Letter
+Changes in Miscellaneous Provisions
+233
+26,445
+15,609
+12,008
+3,693
+1,807
+The changes in the miscellaneous provisions are shown in the
+table below:
+4,280
+2017
+E.ON Stock
+Strategy and Objectives
+668
+2,367
+Combined Group Management Report
+449
+686
+2019
+2
+233
+441
+676
+2018
+2
+433
+1,152
+186
+76
+Other
+countries
+Non-current
+Current
+Non-current
+10,530
+10,848
+607
+18,696
+63
+760
+229
+1,182
+17
+775
+1,120
+December 31, 2015
+December 31, 2016
+67
+1,805
+3
+25
+1,085
+220
+43
+409
+108
+23
+446
+Current
+United
+Kingdom
+4
+Total
+8
+16
+8
+4
+12
+Past service cost
+69
+185
+258
+1
+52
+2016
+2015
+€ in millions
+Total
+Germany
+United
+Kingdom
+Other
+countries
+United
+Total
+Germany
+Kingdom
+Other
+countries
+Employer service cost
+Total
+195
+142
+9
+Germany
+-1
+Net interest on the net
+€ in millions
+Prospective Benefit Payments
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2016, for the next ten years are
+shown in the following table:
+Benefit payments to cover defined benefit obligations totaled
+€702 million in 2016 (2015: €730 million); of this amount,
+€30 million (2015: €26 million) was not paid out of plan assets.
+For the 2017 fiscal year, it is expected that Group-wide
+employer contributions to plan assets will amount to a total of
+€234 million and primarily involve the funding of new and
+existing benefit obligations, with an amount of €138 million
+attributable to foreign companies.
+In 2016, E.ON made employer contributions to plan assets
+totaling €871 million (2015: €517 million) to fund existing
+defined benefit obligations.
+Description of Contributions and Benefit
+Payments
+Contributions to state plans totaled €0.2 billion (2015:
+€0.2 billion).
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €56 million in fixed contributions to
+external insurers or similar institutions was paid in 2016 (2015:
+€62 million) for pure defined contribution plans.
+4
+99
+248
+351
+2
+81
+208
+291
+1
+21
+55
+77
+1
+21
+62
+84
+Total
+defined benefit liability/asset
+Gains (-) and losses (+) on settlements
+Other
+1,256
+Customer-related obligations
+Changes from remeasurements
+1,712
+419
+37
+-1,349
+-1,471
+149
+-27
+Employer contributions to plan assets
+-871
+-437
+-433
+-1
+-517
+-316
+-197
+-4
+Net benefit payments
+-30
+-29
+-1
+Changes in the Net Defined Benefit Liability
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of
+the defined benefit obligations and the fair value of plan assets:
+Description of the Net Defined Benefit Liability
+Notes
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 19.8 years as of
+December 31, 2016 (2015: 19.7 years).
+25
+13
+2,436
+112
+484
+176
+2016
+2015
+€ in millions
+Net liability as of January 1
+4,208
+Total Germany
+3,320
+United
+Kingdom
+Other
+United
+countries
+Total
+Germany
+Kingdom
+175
+Other
+countries
+726
+162
+5,574
+4,766
+624
+184
+Net periodic pension cost
+344
+244
+91
+9
+359
+4,620
+7,081
+Total
+38
+Other
+4
+6
+-2
+8
+-2
+10
+Net liability as of December 31
+4,009
+3,339
+634
+36
+4,208
+3,320
+726
+162
+(25) Miscellaneous Provisions
+The following table lists the miscellaneous provisions as of the
+dates indicated:
+Miscellaneous Provisions
+€ in millions
+Nuclear waste management obligations
+235
+Personnel obligations
+Other asset retirement obligations
+Supplier-related obligations
+38
+2
+-107
+-105
+15
+1,255
+2,387
+3,657
+2022-2026
+2
+239
+458
+699
+2021
+2
+241
+452
+Environmental remediation and similar obligations
+695
+2
+-26
+-21
+-5
+Changes in scope of consolidation
+-1,253
+-1,021
+-62
+-170
+-4
+5
+-9
+Exchange rate differences
+2020
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+-276
+Strategy and Objectives
+17,920
+11,453
+6,280
+187
+The net actuarial losses generated in 2016 are largely attribut-
+able to a general decrease in the discount rates used within the
+E.ON Group and the rise in the wage and salary growth rates
+and pension increase rates in the United Kingdom.
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at
+E.ON's German and U.K. subsidiaries as of the respective balance
+sheet date are as follows:
+Actuarial Assumptions
+Percentages
+December 31,
+2016
+2015
+2014
+47
+Discount rate
+2.10
+2.70
+2.00
+United Kingdom
+2.90
+3.80
+3.70
+Wage and salary growth rate
+Germany
+2.50
+2.50
+2.50
+Germany
+5,933
+10,412
+16,392
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Changes in scope of consolidation
+-3,290
+-2,660
+-449
+-181
+-16
+5
+-21
+Exchange rate differences
+Other
+-928
+9
+-929
+1
+363
+363
+11
+-2
+-7
+-2
+-5
+Defined benefit obligation as of December 31
+United Kingdom
+3.40
+3.20
+3.10
++50
+-50
+-8.04
+9.12
+-7.44
+8.44
+Change in the wage and salary growth rate by (basis points)
+Change in percent
++25
+-25
++25
+-25
+0.43
+-0.41
+0.44
+-0.43
+Change in the pension increase rate by (basis points)
+Change in percent
+Change in mortality by (percent)
+Change in percent
++25
+-25
++25
+-25
+2.08
+-2.03
+1.79
+-1.73
++10
+-50
+Consolidated Financial Statements
++50
+December 31, 2015
+Pension increase rate
+Germany¹
+1.75
+1.75
+1.75
+United Kingdom
+3.20
+3.00
+2.90
+¹The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+guarantee adjustment.
+Notes
+172
+The discount rate assumptions used by E.ON basically reflect
+the currency-specific rates available at the end of the respective
+fiscal year for high-quality corporate bonds with a duration cor-
+responding to the average period to maturity of the respective
+obligation.
+For the fourth quarter of 2016, the determination of discount
+rates for the euro and GBP currency areas was standardized and
+adjusted to the changes in the capital market, in particular the
+ECB's bond purchase program. This includes, firstly, the fact that
+the outlier determination now takes increased account of the
+difference in observable market returns, and secondly, that the
+discount rate in the maturity bands relevant to the company no
+longer depends on the volatility of very long-term bonds (more
+than 25 years). This change led to an increase of 20 basis points
+in the discount rate for pension obligations in Germany as of
+December 31, 2016. Consequently, the corresponding actuarial
+gain was €339 million. For the 2017 fiscal year, this will result
+in a slightly lower net interest cost of €0.1 million in Germany.
+As of the balance sheet date, the adjustment had no effect on
+the level of the discount rate in the UK.
+In view of the change in the interest rate assumptions from 2017
+onwards, the measurement system for the BAS Plan and the
+"Zukunftssicherung" plan was converted from the so-called
+"pro rata" method to the present value of the acquired entitle-
+ment. This change resulted in an actuarial loss of €113 million.
+The adjustment of the annuity conversion factors resulted in
+negative past service costs of €10 million in the reporting year
+and in lower service costs of €48 million in 2017.
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+Actuarial Assumptions (Mortality Tables)
+Germany
+United Kingdom
+2005 G versions of the Klaus Heubeck biometric
+tables (2005)
+CMI "00" and "S1" series base mortality tables 2015,
+taking into account future changes in mortality
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of the
+defined benefit obligations:
+Sensitivities
+Change in the present value of the defined benefit obligations
+December 31, 2016
+Change in the discount rate by (basis points)
+Change in percent
+Summary of Financial Highlights and Explanations
+169
+Description of the Benefit Plans
+-98
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+-24
+-50
+-1,424
+-1,498
+35
+1,007
+1,608
+2,650
+Remeasurements
+6
+232
+251
+489
+4
+206
+276
+486
+Interest cost on the present value of the
+defined benefit obligations
+Gains (-) and losses (+) on settlements
+-2
+16
+16
+30
+6
+4
+-98
+10
+Actuarial gains (-)/losses (+) arising from
+2,630
+-447
+-730
+-2
+-251
+-449
+-702
+Benefit payments
+1
+1
+Employee contributions
+-10
+55
+-44
+1
+-1
+-62
+83
+20
+experience adjustments
+Actuarial gains (-)/losses (+) arising from
+-14
+-7
+-1,380
+-1,401
+36
+1,069
+1,525
+changes in financial assumptions
+-10
+Past service cost
+74
+The following table shows the changes in the present value of
+the defined benefit obligations for the periods indicated:
+Description of the Benefit Obligation
+However, these benefit plans in Sweden, Romania, the Czech
+Republic, Italy and the United States are of minor significance
+from a Group perspective.
+The remaining pension obligations are spread across various
+international activities of the E.ON Group.
+Other Countries
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding conditions
+be performed every three years. The actuarial assumptions
+underlying the valuation are agreed upon by the trustees and
+E.ON UK plc. They include presumed life expectancy, wage
+salary growth rates, investment returns, inflationary assump-
+tions and interest rate levels. The most recent technical valuation
+took place as of March 31, 2015, and resulted in a technical
+funding deficit of £967 million. The agreed deficit repair plan pro-
+vides for a repair payment of £290 million in 2016 and annual
+payments of £65 million to the pension trust through 2026.
+and
+Separate pension trusts were established for Uniper employees
+in the context of the Uniper spinoff. Uniper employees had until
+the end of January 2016 to choose whether to have the entitle-
+ments they earned through September 30, 2015, transferred to
+these new trusts or whether to keep them in the existing pension
+trust. The overwhelming majority of Uniper employees chose
+to transfer the previously acquired claims plus the pro rata plan
+assets to the new pension trust. This transfer was completed
+at the end of March of 2016.
+Plan assets in the United Kingdom are administered in a pension
+trust. The trustees are selected by the members of the plan or
+appointed by the entity. In that capacity, the trustees are partic-
+ularly responsible for the investment of the plan assets.
+Benefit payments to the beneficiaries of the currently existing
+defined benefit pension plans are adjusted for inflation as
+measured by the U.K. Retail Price Index ("RPI").
+In the United Kingdom, there are various pension plans. Until
+2005 and 2008, respectively, employees were covered by defined
+benefit plans, which for the most part were final-pay plans and
+make up the majority of the pension obligations currently reported
+for the United Kingdom. These plans were closed to employees
+hired after these dates. Since then, new hires are offered a defined
+contribution plan. Aside from the payment of contributions,
+this plan entails no additional actuarial risks for the employer.
+United Kingdom
+As a result of the spinoff of Uniper, the claims of Uniper employees
+acquired up to that point were transferred to Uniper. In this
+framework, an additional CTA was established whose plan assets
+are administered by Uniper Pension Trust e.V. as trustee in
+accordance with specified investment principles. Existing plan
+assets intended for the coverage of the benefit obligations of
+German Uniper companies were transferred out of the E.ON CTA
+and into the Uniper CTA. The method of implementation for
+pension obligations covered by VKE that were attributable to the
+Uniper Group was changed to a pension fund commitment.
+As a result, assets of €0.2 billion were transferred from VKE to
+a corporate pension fund.
+Only at the pension funds and at VKE do regulatory provisions
+exist in relation to capital investment or funding requirements.
+To fund the pension plans for the German Group companies,
+plan assets were established in the form of Contractual Trust
+Arrangements ("CTAS"). The major part of these plan assets is
+administered by E.ON Pension Trust e.V. as trustee in accordance
+with specified investment principles. Additional domestic plan
+assets are managed by smaller German pension funds. The
+long-term investments and liquid funds administered by VKE
+do not constitute plan assets under IAS 19, but are almost
+exclusively intended for the coverage of benefit obligations at
+German E.ON Group companies.
+170
+Notes
+The benefit expense for all the cash balance plans mentioned
+above is dependent on compensation and is determined at differ-
+ent percentage rates based on the ratio between compensation
+and the contribution limit in the statutory retirement pension
+system in Germany. Employees can additionally choose to defer
+compensation. The cash balance plans contain different interest
+rate assumptions for the pension units. Whereas fixed interest
+rate assumptions applied for both the BAS Plan and the
+"Zukunftssicherung" plan, the units of capital for the open IQ Plan
+earned interest at the average yield of long-term government
+bonds of the Federal Republic of Germany observed in the fiscal
+year. Starting from January 1, 2017, the interest rate for the
+BAS Plan and the "Zukunftssicherung" plan will be adjusted to
+market developments and hedged via minimum interest rates.
+The pension units for the previous years, including for 2016,
+remain in place unchanged. Based on market developments,
+an annual determination is made as to whether the minimum
+interest rates or possibly a higher interest rate is used for the
+formation of pension units. This interest rate model is also
+applied to the formation of the capital units in the IQ Plan. Future
+pension increases at a rate of 1 percent are guaranteed for a
+large number of active employees. For the remaining eligible
+individuals, pensions are adjusted mostly in line with the rate of
+inflation, usually in a three-year cycle.
+The only benefit plan open to new hires is the E.ON IQ contribu-
+tion plan (the "IQ Plan"). This plan is a "units of capital" system
+that provides for the alternative payout options of a prorated
+single payment and payments of installments in addition to the
+payment of a regular pension.
+The plans described in the preceding paragraph generally provide
+for ongoing pension benefits that generally are payable upon
+reaching the age threshold, or in the event of disability or death.
+The majority of the reported benefit obligation toward active
+employees is centered on the "BAS Plan," a pension unit system
+launched in 2001, and on a "provision for the future" ("Zukunfts-
+sicherung") plan, a variant of the BAS Plan that emerged from
+the harmonization in 2004 of numerous benefit plans granted
+in the past. In the "Zukunftssicherung" benefit plan, vested
+final-pay entitlements are considered in addition to the defined
+contribution pension units when determining the benefit. These
+plans are closed to new hires.
+Active employees at the German Group companies are predom-
+inantly covered by cash balance plans. In addition, some final-pay
+arrangements, and a small number of fixed-amount arrangements,
+still exist under individual contracts.
+Germany
+The features and risks of defined benefit plans are shaped by
+the general legal, tax and regulatory conditions prevailing in the
+respective country. The configurations of the major defined
+benefit and defined contribution plans within the E.ON Group
+are described in the following discussion.
+The existing entitlements under defined benefit plans as of the
+balance sheet date cover about 50,000 retirees and their bene-
+ficiaries (2015: 54,000), about 14,000 former employees with
+vested entitlements (2015: 17,000) and about 28,000 active
+employees (2015: 40,000). The corresponding present value of
+the defined benefit obligations is attributable to retirees and their
+beneficiaries in the amount of €9.8 billion (2015: €10.1 billion),
+to former employees with vested entitlements in the amount
+of €2.5 billion (2015: €2.7 billion) and to active employees in the
+amount of €4.1 billion (2015: €5.1 billion). Aside from normal
+employee turnover, the changes from the previous year resulted
+in particular from the deconsolidation of the Uniper Group.
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates, as
+well as inflation and rising wages and salaries. In order to avoid
+exposure to future risks from occupational benefit plans, newly
+designed pension plans were introduced at the major German
+and foreign E.ON Group companies beginning in 1998.
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning, most
+active and former E.ON Group employees are also covered by
+occupational benefit plans. Both defined benefit plans and defined
+contribution plans are in place at E.ON. Benefits under defined
+benefit plans are generally paid upon reaching retirement age,
+or in the event of disability or death.
+Changes in the Defined Benefit Obligation
+10
+CEO Letter
+E.ON Stock
+255
+339
+5
+63
+169
+237
+230
+5,920
+12,799
+18,949
+187
+6,280
+Other
+countries
+United
+Kingdom
+Germany
+Total
+Other
+countries
+United
+Kingdom
+Total Germany
+17,920 11,453
+Defined benefit obligation as of January 1
+Employer service cost
+€ in millions
+2015
+2016
+171
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+Report of the Supervisory Board
+-10
+-3.02
+3.38
+30
+43
+1
+10
+13
+6
+8
+12
+2
+36
+Other investment funds
+18
+6
+-7
+34
+19
+6
+38
+Total listed plan assets
+86
+77
+98
+83
+75
+95
+39
+Plan assets not listed in an active market
+35
+Equity securities not traded on an exchange
+46
+38
+United
+Kingdom
+Other
+United
+countries
+Total
+Germany
+Kingdom
+Other
+countries
+Plan assets listed in an active market
+Equity securities (stocks)
+18
+22
+12
+18
+22
+12
+2
+Debt securities¹
+Government bonds
+Corporate bonds
+50
+49
+52
+46
+47
+45
+37
+31
+Germany
+4
+2
+23
+2
+100
+17
+25
+5
+61
+Total
+100
+100
+100
+100
+100
+100
+100
+100
+¹In Germany, 5 percent (2015: 5 percent) of plan assets are invested in other debt securities, in particular mortgage bonds ("Pfandbriefe"), in addition to government and corporate bonds.
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. An increase in the net defined benefit
+liability or a deterioration in the funded status following an
+unfavorable development in plan assets or in the present value
+of the defined benefit obligations is identified in these guide-
+lines as a risk that is controlled as part of a risk-budgeting con-
+cept. E.ON therefore regularly reviews the development of the
+funded status in order to monitor this risk.
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the
+structure of the benefit obligations. This long-term investment
+strategy seeks to manage the funded status, with the result
+that any changes in the defined benefit obligation, especially
+those caused by fluctuating inflation and interest rates are, to
+a certain degree, offset by simultaneous corresponding changes
+in the fair value of plan assets. The investment strategy may
+also involve the use of derivatives (for example, interest rate
+swaps and inflation swaps, as well as currency hedging instru-
+ments) to facilitate the control of specific risk factors of pension
+liabilities. In the table above, derivatives have been allocated,
+based on their substance, to the respective asset classes in
+which they are used. In order to improve the funded status of
+the E.ON Group as a whole, a portion of the plan assets will also
+be invested in a diversified portfolio of asset classes that are
+expected to provide for long-term returns in excess of those of
+fixed-income investments and thus in excess of the discount rate.
+The determination of the target portfolio structure for the indi-
+vidual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in a
+comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition of
+the capital markets and the structure of the benefit obligations,
+and is adjusted as necessary. The parameters used in the studies
+are additionally reviewed regularly, at least once each year.
+Asset managers are tasked with implementing the target port-
+folio structure. They are monitored for target achievement on
+a regular basis.
+Description of the Pension Cost
+The net periodic pension cost for defined benefit plans included
+in the provisions for pensions and similar obligations and in
+operating receivables is shown in the table below:
+Net Periodic Pension Cost
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+14
+5
+Total unlisted plan assets
+2
+3
+5
+1
+Debt securities
+2
+3
+2
+3
+Real estate
+3
+6
+7
+10
+Qualifying insurance policies
+2
+3
+100
+59
+Cash and cash equivalents
+1
+2
+3
+5
+Other
+2
+4
+2
+2
+Combined Group Management Report
+Total
+December 31, 2015
+25
+13,375
+8,033
+5,296
+46
+Interest income on plan assets
+389
+205
+184
+374
+163
+210
+1
+Remeasurements
+938
+352
+588
+-2
+-149
+47
+-199
+3
+Return on plan assets recognized in equity,
+not including amounts contained in the
+interest income on plan assets
+938
+352
+5,554
+588
+8,133
+Fair value of plan assets as of January 1
+-2.85
+3.18
+A 10-percent decrease in mortality would result in a higher life
+expectancy of beneficiaries, depending on the age of each indi-
+vidual beneficiary. As of December 31, 2016, the life expectancy
+of a 63-year-old male E.ON retiree would increase by approxi-
+mately one year if mortality were to decrease by 10 percent.
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+assumptions is changed for the purpose of computing the sensi-
+tivity of results to changes in that assumption, all other actuarial
+assumptions are included in the computation unchanged.
+When considering sensitivities, it must be noted that the change
+in the present value of the defined benefit obligations resulting
+from changing multiple actuarial assumptions simultaneously
+is not necessarily equivalent to the cumulative effect of the
+individual sensitivities.
+Description of Plan Assets and the
+Investment Policy
+The defined benefit plans are funded by plan assets held in spe-
+cially created pension vehicles that legally are distinct from the
+Company. The fair value of these plan assets changed as follows:
+Changes in the Fair Value of Plan Assets
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+173
+2016
+2015
+United
+€ in millions
+Total Germany
+Kingdom
+Other
+countries
+Total
+Germany
+United
+Kingdom
+Other
+countries
+13,712
+Percentages
+-2
+47
+-823
+-822
+-1
+325
+325
+Other
+5
+5
+-15
+-15
+Fair value of plan assets as of December 31
+12,383
+7,073
+5,299
+11
+13,712
+8,133
+5,554
+25
+A small portion of the plan assets consists of financial instruments
+of E.ON (2016: €0.1 billion; 2015: €0.2 billion). Because of the
+contractual structure, however, these instruments do not con-
+stitute an E.ON-specific risk to the CTA in Germany. The plan
+assets further include virtually no owner-occupied real estate or
+equity and debt instruments issued by E.ON Group companies.
+Each of the individual plan asset components has been allocated
+to an asset class based on its substance.
+Notes
+The plan assets thus classified break down as shown in the
+following table:
+Classification of Plan Assets
+174
+December 31, 2016
+Exchange rate differences
+-149
+-12
+-11
+-199
+3
+Employee contributions
+1
+1
+Employer contributions
+871
+437
+433
+1
+517
+316
+197
+4
+Benefit payments
+-672
+-420
+-251
+-1
+-704
+-426
+-276
+-2
+Changes in scope of consolidation
+-2,037
+-1,639
+-387
+-12
+177
++10
+Exchange
+Jan. 1, rate differ-
+2016
+The asset retirement obligations recognized include the anticipated
+costs of post- and service operation of the facility, dismantling
+costs, and the cost of removal and disposal of the nuclear com-
+ponents of the nuclear power plant.
+Provisions for the disposal of spent nuclear fuel rods also com-
+prise the contractual costs of finalizing reprocessing and the
+associated return of waste with subsequent interim storage
+at Gorleben and Ahaus, as well as costs incurred for interim
+on-site storage, including the necessary interim storage con-
+tainers and the transports to the final storage facility and the
+cost of proper conditioning prior to final storage, including the
+necessary containers.
+Included furthermore are the costs of final storage of nuclear
+waste. Final storage costs consist particularly of the expected
+investment, operating and decommissioning costs for the final
+storage projects Gorleben and Konrad and are based on data
+from the German Federal Office for Radiation Protection and on
+Germany's ordinance on advance payments for the establishment
+of facilities for the safe custody and final storage of radioactive
+wastes in the country ("Endlagervorausleistungsverordnung");
+additional costs arise from the German legislation governing
+the selection of a repository site for high-level radioactive waste
+("Standortauswahlgesetz" or "StandAG"), which took effect in
+Notes
+178
+2013. Advance payments, including financing costs of €88 million,
+primarily remitted to the Federal Office for Radiation Protection
+and the Federal Office for the Regulation of Nuclear Waste Man-
+agement in the amount of €1,522 million (2015: €1,319 million)
+have been deducted from the provisions. These payments are
+made each year based on the amount spent by the two afore-
+mentioned Federal Offices.
+The total of €21.4 billion (2015: €17.0 billion) in provisions
+based on German nuclear power legislation comprise all those
+nuclear obligations relating to the disposal of spent nuclear
+fuel rods and low-level nuclear waste and to the retirement and
+decommissioning of nuclear power plant components that are
+determined on the basis of external studies, external and internal
+cost estimates and contractual agreements.
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are
+not based on contractual agreements. The amendments to the
+German Nuclear Energy Act of August 6, 2011, and the Act on
+the Reorganization of Responsibility in Nuclear Waste Disposal,
+passed on December 15 and 16, 2016, in the Bundestag and
+Federal Council as the implementation of the recommendations
+of the Commission to review the financing of the nuclear phase-
+out (KFK) set up by the German Ministry of Economic Affairs
+and Energy in 2015 were taken into account in the measurement
+of the provisions. This Act essentially regulates the obligations
+of nuclear operators to pay into a disposal fund, which is yet to
+be established, as well as the transfer of financing and action
+obligations for the disposal of radioactive waste to the Federal
+Republic of Germany. The disposal of radioactive waste affects
+the central and decentralized interim storage as well as the
+identification, construction and operation of the final storage to
+In the following, the provision items after deduction of advance
+payments are classified based on the recommendations of the
+KFK.
+Nuclear Waste Management Obligations in Germany (Less Advance Payments)
+€ in millions
+Remaining with E.ON
+December 31,
+2016
+be established. E.ON had to pay a total amount of €10.0 billion
+based on the consolidated nuclear power plant. This amount
+includes the so-called basic amount of €7.4 billion plus carry-
+forward and a risk surcharge of €2.6 billion. The basic amount of
+€7.4 billion will continue to be financed from January 1, 2017,
+to June 30, 2017, at an interest rate of 4.58 percent, taking
+into account the claims incurred during the period. This devel-
+opment resulted in an increase in provisions in the amount of
+€0.2 billion. In addition, E.ON may be entitled to settle future
+risks by paying a risk surcharge. The premium, as the difference
+between the provision value and the payment amount is about
+€2.2 billion. Immediate payment of the risk surcharge is assumed
+for the calculation of the provision. Accordingly, the existing
+capitalized disposal costs of €1.6 billion were recognized as fully
+impaired. The legislative implementation of the KFK recommen-
+dations results in an increase in provisions of approximately
+€2.4 billion for E.ON. Taking into account the impairment men-
+tioned above, the impact on net income attributable to E.ON
+shareholders is €2.6 billion. As E.ON retains liability until final
+payment under nuclear power law, the disposal obligation is
+still to be reported as a provision for nuclear disposal obligations.
+The provisions for nuclear waste management obligations as
+of January 1, 2016, include provisions for the German nuclear
+power business of €17.0 billion, and €2.3 billion for Swedish
+nuclear power activities. As of December 31, 2016, there are
+only provisions for German nuclear energy activities as a result
+of the spinoff of the Uniper companies.
+Provisions for Nuclear Waste
+Management Obligations
+As of December 31, 2016, provisions for nuclear waste manage-
+ment obligations exclusively relate to Germany; other provisions
+mainly relate to eurozone countries and the United Kingdom.
+Total
+30,725
+-277
+-7,915
+967
+3,527
+-1,354
+-3,003
+10
+-346
+3,519
+11
+-848
+4,430
+27,617
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 9). The provision items
+are discounted in accordance with the maturities with interest
+rates of between 0 and 2.55 percent.
+2015
+2,144
+Retirement and decomissioning
+Subtotal
+Subtotal
+7,765
+7,616
+Risk surcharge before transfer to minority shareholders
+2,245
+n.a.
+2,647
+Further development of the payment amount from December 31, 2016 to June 30, 2017
+n.a.
+Total
+16,974
+Provisions, if they are non-current, are measured at their settle-
+ment amounts, discounted to the balance sheet date.
+€ in millions
+169
+2,731
+1,363
+1,347
+Transferred to disposal fund
+Containers, transports, operational waste, other
+Interim storage
+Schacht Konrad final storage facility
+Final storage facilities for highly active waste
+9,550
+7,857
+1,649
+1,501
+11,199
+9,358
+1,477
+1,401
+2,210
+2,205
+Containers, transports, operational waste, other
+103
+21,378
+-100
+Personnel obligations
+1,411
+-1
+-539
+37
+207
+21,378
+-262
+-31
+823
+Other asset retirement
+obligations
+1,872
+-115
+1
+4,243
+-663
+47
+-2,438
+ences
+Changes in
+scope of
+consolida-
+tion
+Reclassifi-
+Additions Utilization
+cations Reversals
+Changes in
+estimates
+Dec. 31,
+2016
+Nuclear waste management
+obligations
+19,303
+-58
+-2,275
+781
+-840
+36
+Unwinding
+of dis-
+counts
+75
+-29
+- -52
+263
+Environmental remediation
+and similar obligations
+851
+42
+-1
+8
+24
+-35
+-11
+Other
+15
+-367
+1
+469
+-2
+-78
+-214
+Supplier-related obligations
+1,271
+-1,242
+1
+988
+5,500
+187
+-582
+obligations
+Customer-related
+517
+1,137
+-408
+28
+Financial liabilities
+539
+4,897
+Financial Liabilities by Segment
+The following table breaks down the financial liabilities by
+segment:
+Financial Liabilities by Segment as of December 31
+Bonds
+1,400
+Bank loans/Liabilities to banks
+Liabilities from finance leases
+2016
+Other financial liabilities
+€ in millions
+Commercial paper
+1,238
+1,986
+in 2016
+in 2017
+Germany
+2015
+in 2018
+in 2019
+in 2020
+1,282
+2027
+2,669
+1,989
+1,400
+539
+4,617
+2,669
+after 2027
+1,238
+2015
+2016
+Non-Core
+Business¹
+Total
+12,452
+14,011
+Renewables
+Other
+UK
+Germany
+Customer Solutions
+183
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Capital expenditure grants of €324 million (2015: €408 million)
+were paid primarily by customers for capital expenditures made
+on their behalf, while the E.ON Group retains ownership of the
+assets. The grants are non-refundable and are recognized in other
+operating income over the period of the depreciable lives of the
+related assets.
+Trade payables totaled €2,040 million as of December 31, 2016
+(2015: €2,375million). The deviation includes significant changes
+through Uniper companies that are not offset by E.ON companies.
+Trade Payables and Other Operating Liabilities
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €97 million
+(2015: €115 million). This collateral relates to amounts pledged
+by banks to limit the utilization of credit lines in connection
+with the fair value measurement of derivative transactions. The
+other financial liabilities include promissory notes in the amount
+of €370 million (2015: €375 million) and financial guarantees
+totaling €8 million (2015: €8 million). Also included is collateral
+received in connection with goods and services in the amount
+of €21 million (2015: €18 million). E.ON can use this collateral
+without restriction.
+2015
+2016
+46
+31
+248
+245
+Sweden
+45
+339
+338
+0
+¹The values of the Uniper Group, which was deconsolidated as of December 31, 2016, are included at approximately €1,959 million in 2015.
+Energy Networks
+CEE/Turkey
+0
+62
+Due
+5.750%
+Due
+EUR 1,400 million5
+6.000%
+Oct 2019
+12 years
+GBP 850 million4
+5.800%
+Apr 2018
+10 years
+USD 2,000 million³
+5.500%
+Oct 2017
+10 years
+6.375%
+May 2017
+15 years
+EUR 900 million
+EUR 1,769 million²
+Coupon
+Corporate Func-
+tions/Other
+A Debt Issuance Program simplifies the issuance from time to
+time of debt instruments through public and private placements
+to investors. The Debt Issuance Program of E.ON SE and EIF was
+most recently extended for one year in April 2015, with a total
+amount of €35 billion. The program was not extended after it
+expired in April 2016 due to the spinoff of the Uniper operations.
+E.ON SE plans to renew the program in 2017.
+At year-end 2016, the following EIF bonds were outstanding:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+12 years
+Strategy and Objectives
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+181
+Major Bond Issues of E.ON International Finance B.V.¹
+Volume in the
+respective currency
+Initial term
+Repayment
+Combined Group Management Report
+2021 and
+May 2020
+30 years
+Due
+Due
+Due
+Due
+182
+Due
+between
+December 31, 2015
+December 31, 2016
+€ in millions
+Bonds Issued by E.ON SE, E.ON International Finance B.V. and E.ON Beteiligungen GmbH
+The bonds issued by E.ON SE and those issued by EIF and E.ON
+Beteiligungen GmbH (respectively guaranteed by E.ON SE) have
+the maturities presented in the table below. Liabilities denomi-
+nated in foreign currency include the effects of economic hedges,
+and the amounts shown here may therefore vary from the
+amounts presented on the balance sheet.
+Notes
+Effective November 6, 2013, E.ON arranged a syndicated revolv-
+ing credit facility in the original amount of €5 billion over an
+original term of five years, with two renewal options for one year
+each. In 2014, E.ON exercised the first option and extended
+the term of the credit facility by one year through 2019. In 2015,
+E.ON, with the consent of the banks, postponed its right to
+exercise the second term-extension option by one year, to 2016.
+The second option was not used. Effective September 13, 2016,
+E.ON reduced the amount of the credit facility from €5 billion to
+€3.5 billion in connection with the spinoff of Uniper. The facility
+has not been drawn on; rather, it serves as the Group's long-term
+liquidity reserve, one purpose of which is to function as a backup
+facility for the commercial paper programs.
+€3.5 Billion Syndicated Revolving Credit Facility
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE and EIF (under the unconditional guarantee
+of E.ON SE) to issue from time to time commercial paper with
+maturities of up to two years less one day to investors. The U.S.
+commercial paper program in the amount of $10 billion allows
+E.ON SE to issue from time to time commercial paper with
+maturities of up to 366 days and extendible notes with original
+maturities of up to 397 days (and a subsequent extension
+option for the investor) to investors. As of December 31, 2016,
+no commercial paper was outstanding under either the euro
+commercial paper program (2015: €0 million) or the U.S.com-
+mercial paper program (2015: €0 million).
+Additionally outstanding as of December 31, 2016, were private
+placements with a total volume of approximately €1 billion
+(2015: €0.9 billion), as well as promissory notes with a total
+volume of approximately €0.4 billion (2015: €0.4 billion).
+"The volume of this issue was raised from originally GBP 600 million to GBP 850 million.
+5The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.
+6The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+June 2032
+6.375%
+GBP 900 million
+30 years
+Oct 2037
+5.875%
+GBP 975 million6
+USD 1,000 million³
+Apr 2038
+GBP 700 million
+30 years
+Jan 2039
+6.650%
+6.750%
+¹Listing: All bonds are listed in Luxembourg with the exception of the two Rule 144A/Regulation S USD bonds, which are unlisted.
+2After early redemption, the volume of this issue was lowered from originally EUR 2,375 million to approx. EUR 1,769 million.
+³Rule 144A/Regulation S bond.
+30 years
+E.ON Group
+Strategy and Objectives
+2015
+186
+Notes
+In addition, further financial obligations in place as of Decem-
+ber 31, 2016, totaled approximately €1.5 billion (€0.9 billion
+due within one year). They include, among other things, financial
+obligations from services to be procured and obligations concern-
+ing the acquisition of real estate funds held as financial assets,
+as well as corporate actions.
+The expenses reported in the income statement for these leasing
+agreements amounted to €138 million (2015: €211 million).
+They include contingent rents.
+The decrease in lease obligations under operating leases in fiscal
+2016 resulted predominantly from the deconsolidation of the
+Uniper business.
+1,506
+815
+697
+357
+Due in more than 5 years
+Total
+550
+320
+259
+138
+2015
+2016
+Minimum lease payments
+€35 Billion Debt Issuance Program
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+185
+As of December 31, 2016, E.ON SE also issues collateral in the
+amount of €3.9 billion for former Group companies, which will
+be repaid or to a great extent assumed by the companies of the
+Uniper Group in the future. The largest beneficiary on a pro rata
+basis is Uniper Energy Storage GmbH, with a payment guarantee
+in the amount of €0.9 billion. This also includes guarantees in
+connection with Swedish nuclear power activities. The transfer of
+these guarantees and obligations from E.ON to Uniper requires the
+approval of the Swedish government, which is expected in 2017.
+(28) Litigation and Claims
+Other Financial Obligations
+As of December 31, 2016, purchase commitments for invest-
+ments in intangible assets and in property, plant and equipment
+amounted to €1.9 billion (2015: €2.7 billion). Of these commit-
+ments, €1.3 billion are due within one year. This total mainly
+includes financial obligations for as yet outstanding investments,
+in particular in the Renewables, Energy Networks Germany
+and Sweden units. Investments in the Renewables units are in
+connection with new power plant construction projects and
+the expansion and modernization of existing wind power plants.
+On December 31, 2016, these purchase obligations totaled
+€1.0 billion.
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2016, relate primarily to
+the purchase of natural gas and electricity. Financial obligations
+under the gas purchase contracts amount to approximately
+€3.6 billion on December 31, 2016 (€0.8 billion due within
+one year). Financial obligations under the electricity purchase
+contracts amount to approximately €3.6 billion on December 31,
+2016 (€2.0 billion due within one year). Additional purchase
+commitments as of December 31, 2016, amounted to approxi-
+mately €0.8 billion (€0.1 billion due within one year). This
+includes long-term contractual commitments to purchase heat
+and alternative fuels.
+Additional financial obligations arose from rental and tenancy
+agreements and from operating leases. The corresponding min-
+imum lease payments are due as broken down in the table below:
+E.ON as Lessee-Operating Leases
+€ in millions
+Due within 1 year
+Due in 1 to 5 years
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are other
+mostly long-term financial obligations arising mainly from
+contracts entered into with third parties, or on the basis of legal
+requirements.
+E.ON Stock
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or
+may be instituted or asserted in the future against companies
+of the E.ON Group. This in particular includes legal actions and
+proceedings on contract amendments and price adjustments
+initiated in response to market upheavals and the changed
+economic situation in the electricity and gas sectors (also as a
+consequence of the energy transition) concerning price increases
+and anticompetitive practices. Legal action is also pending in
+the nuclear power segment, centered on the new Repository Site
+Selection Act and the nuclear-power moratorium in Germany.
+On December 6, 2016, the Federal Constitutional Court ruled that
+the 13th amendment to the German Nuclear Energy Act (ATG)
+is fundamentally constitutional. According to the court, there is
+only a constitutional violation on the marginal areas of the law.
+The 13th amendment to the Nuclear Energy Act violates the
+right property to the extent that the introduction of fixed shut-
+down dates for the nuclear power plants operated in Germany
+does not ensure inter-company consumption of existing electricity
+quantities up to the set shutdown dates. In addition, the 13th
+amendment to the Nuclear Energy Act is incompatible with basic
+rights in that it does not provide for a scheme to compensate
+The amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2016, produced a gain of
+€20 million (2015: €6 million gain).
+As of December 31, 2016, the hedged transactions in place
+included foreign currency cash flow hedges with maturities of
+up to 30 years (2015: up to 35 years) and interest cash flow
+hedges with maturities of up to 19 years (2015: up to 10 years).
+Planned commodity positions have maturities of up to 13 years.
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash flow
+hedge accounting.
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps, cross-currency
+interest rate swaps, swaptions and interest rate options are
+the principal instruments used to limit interest rate and currency
+risks. The purpose of these swaps is to maintain the level of
+payments arising from long-term interest-bearing receivables
+and liabilities and from capital investments denominated in
+foreign currency and euro by using cash flow hedge accounting
+in the functional currency of the respective E.ON company.
+Cash Flow Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges are
+generally reported in that line item of the income statement
+which also includes the respective hedged items.
+Fair Value Hedges
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group, as well as from anticipated
+fuel purchases and purchases and sales of gas, are hedged.
+At the E.ON Group, hedge accounting in accordance with IAS 39
+is employed primarily in connection with hedging long-term
+liabilities and bonds to be issued in the future via interest-rate
+derivatives and for hedging long-term foreign currency receiv-
+ables and payables and foreign investments via currency deriv-
+atives. E.ON also hedges net investments in foreign operations.
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+Strategy and Objectives
+(30) Derivative Financial Instruments and
+Hedging Transactions
+188
+Notes
+In 2016, cash provided by financing activities of continuing oper-
+ations amounted to -€1.2 billion (2015: -€3.9 billion). The
+change of roughly +€2.7 billion is primarily attributable to the
+repayment of financial liabilities undertaken in the previous
+year. A €0.3 billion higher dividend payout to E.ON Group share-
+holders was almost fully offset by net inflows from changes in
+capital (change in non-controlling interests in the equity of fully
+consolidated Group companies).
+nearly constant. This decline is mainly due to the proceeds of
+disposals of operations in Spain, of solar, hydro and conventional
+generating capacity in Italy, of exploration activities in Norway,
+and of the remaining 49-percent stake in the company formerly
+called E.ON Energy from Waste. Net ouflows from the sale or
+acquisition of securities, financial assets and fixed-term deposits
+in the year under review amounted to -€0.8 billion, compared
+to net inflows of +€0.2 billion in the previous year.
+Cash provided by investing activities of continuing operations
+amounted to roughly -€3.0 billion in 2016 (2015: €1.4 billion).
+Of this change of -€4.4 billion, -€3.5 billion is attributable to
+lower cash inflows from disposals, with investments remaining
+for investments made in justified confidence in the additional
+electricity production quotas granted in 2010 and subsequently
+frustrated by the new regulation. The legislature is required
+to adopt a new regulation by June 30, 2018, in which it grants
+compensation of some sort for this change. The nuclear-fuel tax
+remains at its original level after the reversal of the operating-
+life extensions. E.ON believes that this tax contravenes Germany's
+constitution and European law and is therefore pursuing admin-
+istrative proceedings and taking legal action against it. This view
+was affirmed by both the Hamburg Fiscal Court and the Munich
+Fiscal Court. After the Federal Fiscal Court overturned the tem-
+porary suspension of the tax previously ordered by the lower
+fiscal courts, the European Court of Justice ruled in June 2015,
+with regard to the issues brought before it, affirming that the
+tax is consistent with European law. The Federal Constitutional
+Court has not yet issued its final ruling.
+Because litigation and claims are subject to numerous uncertain-
+ties, their outcome cannot be ascertained; however, in the opinion
+of management, any potential obligations arising from these
+matters will not have a material adverse effect on the financial
+condition, results of operations or cash flows of the Company.
+Legal risks and litigation of the Uniper Group, such as risks for gas
+volumes from long-term contracts with take-or-pay obligations
+are not reported after the deconsolidation of the Uniper Group
+from E.ON.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+The entire sector is involved in a multitude of court proceedings
+throughout Germany in the matter of price-adjustment clauses
+and price adjustments in the retail basic supply business (tariff
+customers) and non-tariff customers in the electricity, gas and
+heating sector. These proceedings also include actions for the
+restitution of amounts collected through price increases imposed
+using price-adjustment clauses determined to be invalid. In a
+judgment delivered in October 2014, the European Court of
+Justice ruled that Germany's Basic Supply Ordinances for Power
+and Gas do not comply with the relevant European directives.
+The German Federal Court of Justice has issued numerous rulings
+on the legal consequences of this violation for German law.
+Although no companies of the E.ON Group are directly involved
+in these particular preliminary-ruling proceedings, there is a risk
+that claims asserted against Group companies for the restitution
+of amounts collected through such price increases might be
+successful.
+Strategy and Objectives
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+187
+(29) Supplemental Cash Flow Disclosures
+The total consideration received by E.ON in 2016 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €345 million (2015: €3,933 million). Cash and cash
+equivalents divested in connection with the disposals amounted
+to €21 million (2015: €187 million). The sale of these activities
+led to reductions of €741 million (2015: €6,351 million) in assets
+and €597 million (2015: €5,225 million) in provisions and
+liabilities.
+At €3.0 billion, the E.ON Group's operating cash flow was
+€1.2 billion lower than the prior-year level (2015: €4.2 billion).
+This decrease resulted primarily from higher net income tax
+payments and the sale of the E&P operations. In addition, an
+increase in the level of working capital was only partially offset
+by effects such as lower interest payments.
+Combined Group Management Report
+2016
+Report of the Supervisory Board
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a Soli-
+darity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement
+dated March 25, April 18, April 28, and June 1, 2011. If an
+accident occurs, the Solidarity Agreement calls for the nuclear
+power plant operator liable for the damages to receive-after
+the operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement, E.ON
+Energie's share of the liability coverage on December 31, 2016,
+remained unchanged from 2015 at 42.0 percent plus an addi-
+tional 5.0 percent charge for the administrative costs of pro-
+cessing damage claims. Sufficient liquidity has been provided
+for and is included within the liquidity plan.
+88
+84
+471
+4
+22
+21
+1
+1
+289
+148
+115
+97
+134
+5
+3
+4
+2
+2016
+2016
+2015
+2016
+2015
+2016
+358
+2015
+2015
+2016
+11,905
+2015
+13,750
+0
+0
+2016
+11,905 13,750
+CEO Letter
+827
+1
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million
+and €15 million for claims related to officially ordered evacuation
+measures. Group companies have agreed to place their sub-
+sidiaries operating nuclear power plants in a position to maintain
+a level of liquidity that will enable them at all times to meet their
+obligations as members of the Nuklear Haftpflicht GbR, in |
+pro-
+portion to their shareholdings in nuclear power plants.
+The guarantees of E.ON also include items related to the opera-
+tion of nuclear power plants. With the entry into force of the
+German Nuclear Energy Act ("Atomgesetz" or "AtG"), as amended,
+and of the ordinance regulating the provision for coverage under
+the Atomgesetz ("Atomrechtliche Deckungsvorsorge-Verordnung"
+or "AtDeckV") of April 27, 2002, as amended, German nuclear
+power plant operators are required to provide nuclear accident
+liability coverage of up to €2.5 billion per incident.
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+In addition, E.ON has entered into indemnification agreements,
+which as a rule are incorporated in agreements concerning the
+disposal of shareholdings and, above all, affect the customary
+representations and warranties with relation to liability risks for
+environmental damage and contingent tax risks. In some cases,
+obligations are covered in the first instance by provisions of the
+disposed companies before E.ON itself is required to make any
+payments. Guarantees issued by companies that were later sold
+by E.ON SE or its legal predecessors are usually included in the
+respective final sales contracts in the form of indemnities.
+E.ON has issued direct and indirect guarantees to third parties,
+which may trigger payment obligations based on the occurrence
+of certain events. These consist primarily of financial guarantees
+and warranties.
+The fair value of the E.ON Group's contingent liabilities arising
+from existing contingencies was €4 million as of December 31,
+2016 (2015: €16 million). E.ON currently does not have reim-
+bursement rights relating to the contingent liabilities disclosed.
+Contingencies
+As part of its business activities, E.ON is subject to contingencies
+and other financial obligations involving a variety of underlying
+matters. These primarily include guarantees, obligations from
+litigation and claims (as discussed in more detail in Note 28),
+short- and long-term contractual, legal and other obligations
+and commitments.
+(27) Contingencies and Other Financial
+Obligations
+184
+Notes
+already consolidated subsidiaries, in the amount of €398 million
+(2015: €260 million), as well as non-controlling interests in
+fully consolidated partnerships with legal structures that give
+their shareholders a statutory right of withdrawal combined
+with a compensation claim, in the amount of €95 million (2015:
+€426 million).
+Other operating liabilities consist primarily of accruals in the
+amount of €2,647 million (2015: €8,389 million) and interest
+payable in the amount of €499 million (2015: €571 million).
+The change in accruals is primarily the result of the disposal of
+Uniper. Also included in other operating liabilities are carryfor-
+wards of counterparty obligations to acquire additional shares in
+Construction grants of €1,940 million (2015: €2,035 million)
+were paid by customers for the cost of new gas and electricity
+connections in accordance with the generally binding terms
+governing such new connections. These grants are customary
+in the industry, generally non-refundable and recognized
+as revenue according to the useful lives of the related assets.
+12,656 14,556 14,227 17,742
+2,876
+1,816
+58
+77
+508
+372
+4
+6
+1
+79
+511
+377
+634
+638
+1,761
+2,366
+570
+603
+99
+change-of-control clauses, negative pledges, pari-passu clauses
+and cross-default clauses, each referring to a restricted set of
+significant circumstances. Financial covenants (that is, covenants
+linked to financial ratios) are not employed.
+2015
+Covenants
+180
+December 31, 2016
+December 31, 2015
+€ in millions
+Current
+Non-current
+Financial liabilities
+3,792
+10,435
+Liabilities
+Total
+14,227
+Non-current
+2,788
+14,954
+Total
+17,742
+Trade payables
+2,040
+2,040
+2,375
+2,375
+Current
+The following table provides a breakdown of liabilities:
+(26) Liabilities
+Notes
+The financing activities of E.ON SE, E.ON International Finance B.V.
+("EIF"), Amsterdam, The Netherlands, and E.ON Beteiligungen
+GmbH involve the use of covenants consisting primarily of
+CEO Letter
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+179
+Transfer of responsibility in 2017, in particular for interim and
+permanent storage costs, resulted in a substantial reduction in
+the duration of the disposal obligation. A risk-free discount rate
+of an average of about 0.5 percent applies to E.ON's remaining
+disposal obligations (previous year: 4.4 percent cumulatively
+for E.ON's disposal obligations, which are transferred to the dis-
+posal fund). Correspondingly, an applicable cost increase rate
+of 1.4 percent p.a. was applied to E.ON's remaining disposal obli-
+gations (previous year: 3.5 percent cumulatively for E.ON's
+disposal obligations, which are transferred to the disposal fund,
+corresponding to a net interest rate of -0.9 percent (previous
+year: +0.9 percent). The change in the discount rate and the cost
+increase rate resulted in an increase in the provision on the part
+remaining with E.ON in the amount of approximately €1.9 billion.
+Of this amount, €1.0 billion was offset against non-current
+assets. A change in the net interest rate of 0.1 percent would
+change the amount of the provision recognized on the balance
+sheet by €0.1 billion.
+Excluding the effects of discounting and cost increases, the
+amounts for E.ON's remaining disposal obligations would be
+€10,134 million with average credit terms of approximately
+10 years. An increase of 0.1 percent in the discount rate
+would decrease the amount of the obligation to €10.0 billion.
+A decrease of 0.1 percent in the discount rate would increase
+the amount of the obligation to €10.2 billion.
+There were changes in estimates for the German nuclear
+power business in 2016 in the amount of €4,243 million (2015:
+-€53 million), which primarily includes the effects from the change
+in the discount rate and the cost increase rate of €1.9 billion and
+consideration of the risk surcharge in the amount of €2.2 billion.
+€630 million (2015: €373 million) of this was used, of which
+€412 million (2015: €246 million) relates to nuclear power plants
+that are being dismantled or are in shutdown mode, on the basis
+of issues for which retirement and decommissioning costs had
+been capitalized. Current charges for the provision items that are
+transferred to the disposal fund amount to €290 million (2015:
+€89 million). The increase in utilization is due in particular to the
+prepayment of €80 million of primarily future interim storage in
+the course of the implementation of the KFK recommendations.
+Personnel Obligations
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, in-kind obligations, restructuring and other
+deferred personnel costs.
+Provisions for Other Asset Retirement
+Obligations
+The provisions for other asset retirement obligations consist of
+obligations for renewable-energy power plants and infrastructure.
+In addition, the provisions for dismantling conventional plant
+components in the nuclear power segment, which are based
+on legally binding civil agreements and public provisions, in the
+amount of €457 million (2015: €331 million) are taken into
+account here. Excluding discounting and cost-increase effects, the
+amounts for these disposal obligations would be €381 million.
+Supplier-Related Obligations
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Provisions for customer-related obligations consist primarily of
+potential losses on rebates and on open sales contracts.
+Environmental Remediation and Similar
+Obligations
+Provisions for environmental remediation refer primarily to
+redevelopment and water protection measures and to the reha-
+bilitation of contaminated sites. Also included here are provisions
+for other environmental improvement measures and some of
+the provisions for land reclamation obligations at mining sites.
+Other
+The other miscellaneous provisions consist primarily of provisions
+from the electricity and gas business. Further included here
+are provisions for potential obligations arising from tax-related
+interest expenses and from taxes other than income taxes.
+Capital expenditure grants
+11
+E.ON Stock
+324
+4,217
+697
+4,914
+11,262
+1,168
+12,430
+Trade payables and other operating liabilities
+Total
+6,888
+5,247
+10,680
+15,682
+12,135
+26,362
+24,811
+27,599
+8,346
+33,157
+23,300
+50,899
+Unless otherwise noted, the changes in liabilities result from
+the disposal of Uniper. This also applies in particular for the
+decrease in liabilities from derivative financial instruments from
+€15,565 million in 2015 to €2,867 million in 2016.
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+Group Management
+313
+Other operating liabilities
+344
+Financial Liabilities
+141
+203
+386
+Construction grants from energy consumers
+190
+1,750
+1,940
+232
+1,803
+2,035
+Liabilities from derivatives
+408
+2,485
+50
+382
+2
+48
+22
+15,565
+4,786
+10,779
+2,867
+Advance payments
+12/31/15 1/31/16 2/29/16 3/31/16 4/30/16 5/31/16 6/30/16
+E.ON EURO STOXX1 - STOXX Utilities¹
+80
+85
+90
+95
+100
+105
+110
+E.ON Stock Performance
+peer index, the STOXX Utilities (-5 percent), and the broader
+European stock market as measured by the EURO STOXX 50
+index (+4 percent).
+At the end of 2016 E.ON stock (including reinvested dividends
+and adjusted for the Uniper spinoff) was 10 percent below its
+year-end closing price for 2015, thereby underperforming its
+14
+E.ON Stock
+E.ON Stock
+Dr. Karl-Ludwig Kley
+Chairman
+7/31/16 8/31/16
+ну
+4.1. m
+Percentages
+E.ON Stock in 2016
+-3.60
+¹Based on the performance index.
+Twelve-month high³
+Best wishes,
+976
+410
+Dividend payout (€ in millions)
+At the 2016 Annual Shareholders Meeting, management will
+propose a cash dividend of €0.21 per share for the 2016 financial
+year (prior year: €0.50). The payout ratio (as a percentage of
+adjusted net income) would be 45 percent. Based on E.ON stock's
+year-end 2016 closing price, the dividend yield is 3.1 percent.
+0.50
+0.21
+Dividend²
+0.55
+0.46
+Earnings from adjusted net income¹
+-4.33
+Net income attributable to the shareholders
+of E.ON SE
+2015
+2016
+Per share (€)
+Dividend
+E.ON Stock Key Figures
+9/30/16 10/31/16 11/30/16 12/31/16
+Essen, March 14, 2017
+The Supervisory Board
+Personnel Changes on the Management Board
+The Supervisory Board would like to take this opportunity to express its
+sincere gratitude to Mr. Wenning and Mr. Obermann for their outstanding
+service to the Group. Both played key roles in shaping E.ON's develop-
+ment in a period of significant challenges and dislocations in the energy
+industry. In particular, Mr. Wenning's prominent involvement in the
+design of E.ON's new strategy helped pave the way for E.ON and Uniper
+to achieve lasting success.
+At the Supervisory Board's meeting on March 14, 2017, we thoroughly discussed-in
+the presence of the independent auditor and with knowledge of, and reference to,
+the Independent Auditor's Report and the results of the preliminary review by the
+Audit and Risk Committee-E.ON SE's Financial Statements, Consolidated Financial
+Statements, Combined Group Management Report, and the Management Board's
+proposal for profit appropriation. The independent auditor was available for supple-
+mentary questions and answers. After concluding our own examination we deter-
+mined that there are no objections to the findings. We therefore acknowledged
+and approved the Independent Auditor's Report.
+10
+10
+Report of the Supervisory Board
+Furthermore, the auditor examined E.ON SE's early-warning system
+regarding risks. This examination revealed that the Management Board has
+taken appropriate measures to meet the requirements of risk monitoring
+and that the early-warning system regarding risks is fulfilling its task.
+PricewaterhouseCoopers Aktiengesellschaft, Wirtschaftsprüfungsgesell-
+schaft GmbH, Düsseldorf, the independent auditor chosen by the Annual
+Shareholders Meeting and appointed by the Supervisory Board, audited
+and submitted an unqualified opinion on the Financial Statements of
+E.ON SE and the Combined Group Management Report for the year ended
+December 31, 2016. The Consolidated Financial Statements prepared
+in accordance with IFRS exempt E.ON SE from the requirement to publish
+Consolidated Financial Statements in accordance with German law.
+Examination and Approval of the Financial Statements,
+Approval of the Consolidated Financial Statements,
+Proposal for Profit Appropriation for the Year Ended
+December 31, 2016
+The Nomination Committee met twice in 2016. At these meetings it did
+preparatory work for the Supervisory Board's recommendations for the
+2016 Annual Shareholders Meeting for election of shareholder represen-
+tatives to the E.ON SE Supervisory Board. Attendance was complete at
+both meetings. The Nomination Committee's recommendations for the
+election of shareholder representatives took into consideration the require-
+ments of the German Stock Corporation Act, the German Corporate
+Governance Code, the Supervisory Board's policies and procedures, and
+its targets for the composition of the Supervisory Board. The committee
+therefore ensured that the Supervisory Board as a whole and its individual
+members have the necessary expertise, skills, and professional experience
+to discharge their duties properly.
+reports and E.ON's compliance system, as well as other issues related to
+auditing. The Management Board also reported on ongoing proceedings
+and on legal and regulatory risks for the E.ON Group's business. These
+included the status of the lawsuits filed against the nuclear-fuel tax, the
+constitutional complaint against the nuclear phaseout, the lawsuit filed
+against the nuclear energy moratorium, the proposals of the Commission
+for Organizing and Financing the Nuclear Energy Phaseout and Germany's
+Independent Audit Reform Act. Other topics included the development of
+E.ON's rating, the status of the carve-out of Uniper's operations and the
+spinoff process, the progress of Rampion and Arkona wind farm projects,
+the development of E.ON startups and co-investments, the Company's
+tax situation, reportable incidents at the E.ON Group, and insurance issues.
+The Audit and Risk Committee met four times and
+adopted one resolution by means of written communi-
+cations. All members took part in all meetings and the
+written communications. Attendance was complete at
+all meetings. With due attention to the Independent
+Auditor's Report and in discussions with the independent
+auditor, the committee devoted particular attention to
+the 2015 Financial Statements of E.ON SE (prepared
+in accordance with the German Commercial Code) and
+the E.ON Group's 2015 Consolidated Financial State-
+ments and the 2016 Interim Reports of E.ON SE
+(prepared in accordance with International Financial
+Reporting Standards, or "IFRS"). The committee dis-
+cussed the recommendation for selecting an indepen-
+dent auditor for the 2016 financial year as well as the
+intermediate financial reports and assigned the tasks
+for the auditing services, established the audit priorities,
+determined the independent auditor's compensation,
+and verified the auditor's qualifications and indepen-
+dence in line with the recommendations of the German
+Corporate Governance Code. The committee assured
+itself that the independent auditor has no conflicts
+of interest. Topics of particularly detailed discussions
+included issues relating to accounting, the internal
+control system, and risk management. In addition, the
+committee thoroughly discussed the Combined Group
+Management Report and the proposal for profit appro-
+priation and prepared the relevant recommendations
+for the Supervisory Board and reported to the Super-
+visory Board. Furthermore, on a regular basis the com-
+mittee discussed in detail the progress of significant
+investment projects. The Audit and Risk Committee also
+discussed in detail market conditions, the long-term
+changes in markets, and the resulting consequences for
+the underlying value of our activities. It reviewed the
+results of impairment tests and the necessary impair-
+ment charges. Other focus areas included an exam-
+ination of E.ON's risk situation, its risk-bearing capacity,
+and the quality control of its risk-management system.
+This examination was based on consultations with the
+independent auditor and, among other things, reports
+from the Company's risk committee. On the basis of
+the quarterly regular risk reports, the Audit and Risk
+Committee noted that no risks were identified that
+might jeopardize the existence of the Company or indi-
+vidual segments. The committee also discussed the
+work done by internal audit including the audits con-
+ducted in 2016 as well as the audit plan and audit pri-
+orities for 2017. Furthermore, the committee discussed
+the health, safety, and environment report, compliance
+9
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+8.49
+We approved the Financial Statements of E.ON SE prepared by the Management
+Board and the Consolidated Financial Statements. The Financial Statements are
+thus adopted. We agree with the Combined Group Management Report and, in
+particular, with its statements concerning the Company's future development.
+The Supervisory Board wishes to thank the Management Board, the Works
+Councils, and all the employees of the E.ON Group for their dedication
+and hard work in the 2016 financial year.
+We examined the Management Board's proposal for profit appropriation, which
+includes a cash dividend of €0.21 per ordinary share, also taking into consideration
+the Company's liquidity and its finance and investment plans. After examining
+and weighing all arguments, we agree with the Management Board's proposal for
+profit appropriation.
+The Supervisory Board appointed Dr. Karsten Wildberger to the E.ON SE Manage-
+ment Board effective April 1, 2016, to succeed Mr. Reutersberg. He is responsible
+for sales and customer solutions, distributed generation, energy management,
+marketing, digital transformation, innovation, and IT.
+The election of Mr. Kley as Chairman of the Supervisory Board led to
+changes on several of its committees. His election as Chairman of the
+Supervisory Board likewise made him Chairman of the Executive Com-
+mittee and the Nomination Committee. In addition, Mr. Kley was elected
+Chairman of the Finance and Investment Committee and a member of
+the Audit and Risk Committee.
+Effective July 19, 2016, three new employee repre-
+sentatives-Tibor Gila, Silvia Šmátralová, and Albert
+Zettl-also joined E.ON Supervisory Board, giving
+it a total of five female members. It therefore fulfills
+legally mandated minimum percentage.
+All three became members of the Supervisory Board
+effective July 19, 2016, the date the enlargement of
+the Supervisory Board took effect.
+Ewald Woste serves as a consultant for EQT, Aus-
+tralian financial service provider Macquarie, and
+other clients and was President of the BDEW German
+Association of Energy and Water Industries from
+2010 to 2014.
+• Andreas Schmitz has been Chairman of the Super-
+visory Board of HSBC Trinkaus & Burkhardt AG since
+June 2015 and was its CEO from 2006 to 2015.
+Erich Clementi, Senior Vice President for Sales and
+Distribution at IBM, is an expert in industry 4.0 and
+the digitalization of customer processes.
+The Annual Shareholders Meeting adopted a resolution
+to temporarily expand the Supervisory Board from
+12 to 18 members until the 2018 Annual Shareholders
+Meeting and elected three additional shareholder rep-
+resentatives to the Supervisory Board:
+Dr. Karl-Ludwig Kley, the former CEO of Merck KGaA,
+has been the new Chairman of the E.ON SE Supervisory
+Board since June 8, 2016, the same date the Annual
+Shareholders Meeting elected him to be a member of
+the Supervisory Board, which then elected him to
+be its Chairman. Mr. Kley succeeds Werner Wenning,
+who, at his own request, ended his service on the
+Supervisory Board effective the conclusion of the 2016
+Annual Shareholders Meeting, as did René Obermann.
+Mr. Wenning joined the Supervisory Board in April 2008
+and was its Chairman from May 2011. The Annual
+Shareholders Meeting elected Carolina Dybeck Happe
+to succeed Mr. Obermann on the Supervisory Board.
+She is the Chief Financial Officer ASSA ABLOY AB, a
+publicly listed company in Sweden that manufactures
+lock and security systems for the global market.
+Personnel Changes on the Supervisory
+Board and Its Committees
+11
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Page 224 of this report shows E.ON SE Management Board members' respective
+task areas as of year-end 2016.
+Mr. Sen will end his service on the E.ON SE Management Board at the conclusion
+of March 31, 2017. The Supervisory Board would like to thank Mr. Sen for his
+successful work at the E.ON Group, in particular for his contribution to the success-
+ful spinoff of Uniper and the restructuring of E.ON's finance organization. We wish
+him all the best for the future.
+In addition, in December 2016 the Supervisory Board appointed Dr. Marc Spieker
+to the E.ON SE Management Board effective January 1, 2017. He will succeed
+Michael Sen as Chief Financial Officer effective April 1, 2017.
+With the approval of the E.ON SE Supervisory Board, Dr. Bernhard Reutersberg
+became a member of the Uniper Supervisory Board, which subsequently elected
+him its Chairman. He ended his service on the E.ON Management Board effective
+June 30, 2016. We would like to take this opportunity to again thank Mr. Reutersberg
+for his many years of successful work at the E.ON Group and for the outstanding
+expertise and personal dedication he brought to the Group and the implementation
+of its new strategy. We wish him all the best for the future.
+12.98
+Summary of Financial Highlights and Explanations
+6.04
+15
+3%
+Switzerland
+7%
+France
+16%
+United Kingdom
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2016).
+|
+Rest of world
+7%
+8%
+Rest of Europe
+USA and Canada
+22%
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2016).
+26%
+Retail investors
+Institutional investors
+74%
+37%
+Germany
+Shareholder Structure by Country/Region¹
+Shareholder Structure by Group¹
+Our most recent survey shows that we have roughly 74 percent
+institutional investors and 26 percent retail investors. Investors
+in Germany hold about 37 percent of our stock, those outside
+Germany about 63 percent. These percentages are based on the
+total number of investors we were able to identify and do not
+include treasury shares.
+Investor Relations
+Shareholder Structure
+We used the forum of E.ON's quarterly reporting to provide the
+greatest-possible transparency on the developments at our
+business units. We also held special information events focusing
+on specific businesses.
+Want to find out more?
+eon.com/investors
+You can contact us at:
+investorrelations@eon.com
+Twelve-month low³
+Resources and Capabilities
+A focused setup and systematic approach will enable E.ON to
+retain its existing strengths and advantages and build on them.
+Examples include our success at developing and building an inter-
+national renewables portfolio consisting of 4.6 GW of operational
+capacity and an attractive development pipeline, our outstanding
+record of managing a total of roughly 1 million kilometers of
+energy networks, and our direct access to 30 million customers
+in key European markets and in Turkey.
+In addition to our three core businesses, our portfolio includes
+a nuclear power business in Germany, which is not a strategic
+business segment for E.ON and is managed by a separate oper-
+ating company, Preussen Elektra of Hanover. As Germany's
+phaseout of nuclear energy moves forward, E.ON will ensure
+that its nuclear assets are decommissioned and dismantled
+safely and cost-effectively. A solution for the funding of the
+intermediate and final storage of nuclear waste is on the horizon.
+In December 2016 Germany's two houses of parliament passed
+a law to reassign responsibility for the country's nuclear waste.
+The law cannot take effect until the European Commission has
+completed a state-aid review. E.ON is obliged to make a consid-
+erable contribution, approximately €10 billion, to finance this
+solution. In return, the German state will assume responsibility for
+the intermediate and final storage of the country's nuclear waste.
+E.ON continues to advocate that the law be underpinned by a
+contractual agreement in order to ensure lasting legal certainty.
+Although each of these core businesses is independent and has
+its own business logic, combining them in a single company
+offers significant advantages. It will enable E.ON to acquire and
+leverage a comprehensive understanding of the transformation
+of the energy system and the interplay between the individual
+submarkets in regional and local energy supply systems. Being
+part of the same company will enable these businesses to work
+together to design customer-oriented offerings and package
+solutions for the new energy world (such as sustainable solutions
+for cities), to conduct joint stakeholder management, and to
+position the brand more effectively.
+Renewables: E.ON's international renewables business
+focuses in attractive target regions (Europe and North America)
+and customer-relevant technologies (onshore and offshore
+wind, photovoltaic) for network companies, energy suppliers,
+large customers, wholesale markets, and government subsidy
+programs. Our industry-leading capabilities in project devel-
+opment and execution and in operational excellence already
+give us a tangible competitive advantage in this business.
+•
+Customer Solutions: E.ON is expanding its top-quality offer-
+ings in the physical and digital new energy world for municipal,
+public, industrial, commercial, and residential customers in
+attractive regional markets. We strive to become customers'
+partner of choice. This is based on a consistently superior cus-
+tomer experience, strong digital orientation, and high-quality
+service. In addition, we will continually improve or redefine
+our portfolio of products and services in response to customers'
+demand for energy efficiency, distributed generation and
+storage, and sustainable mobility solutions.
+Energy Networks: Energy networks link our customers
+together and are the hub for grid digitalization, such as the
+direct marketing of distributed energy. In Germany, about
+one third of distributed generating capacity subsidized by
+the Renewable Energy Law is connected to our networks.
+Regional energy networks are what makes the transforma-
+tion of the energy system possible. E.ON is already a leader
+in network efficiency and will continue to set new standards
+in the future.
+•
+E.ON is based in Essen, Germany, and has around 43,000
+employees. With a clear focus on three strong core busi-
+nesses-Energy Networks, Customer Solutions, and Renew-
+ables-we aim to become the partner of choice for energy
+and customer solutions:
+Objectives and Core Businesses
+Our strategy reflects three fundamental market developments
+and corresponding growth businesses: the global trend toward
+renewables (particularly wind and solar), the evolution of energy
+networks into a platform for distributed-energy solutions, and
+customers' changing needs. We aim to add value in all of our
+businesses by delivering an outstanding performance in key areas,
+such as continual innovation, an unambiguous commitment to
+sustainability, and a strong brand.
+Adopted in 2014, E.ON's strategy focuses our company system-
+atically on the new energy world of empowered and proactive
+customers, renewables and distributed energy, energy efficiency,
+local energy systems, and digital solutions. By seizing the initia-
+tive, E.ON can-for the benefit of our customers, employees,
+business partners, shareholders, and society in general-take
+advantage of the significant opportunities created by the emer-
+gence of the new energy world.
+Partner for the New Energy World
+Our Strategy:
+18
+Strategy and Objectives
+Strategy and
+Objectives
+The key story of 2016 was the Uniper spinoff. We used a wide
+variety of information channels to continually inform our share-
+holders about the financial and technical implications of the
+spinoff. As part of this effort, in April 2016 we held a Capital
+Market Day to familiarize our investors early on with the new
+E.ON, its new strategic course, and its focus on three core busi-
+nesses (energy networks, customer solutions, and renewables).
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Our investor relations continue to be founded on four principles:
+openness, continuity, credibility, and equal treatment of all
+investors. Our mission is to provide prompt, precise, and rele-
+vant information at our periodic conferences and road shows,
+at eon.com, and when we meet personally with investors. Con-
+tinually communicating with them and strengthening our rela-
+tionships with them are essential for good investor relations.
+13.1
+¹Adjusted for non-operating effects.
+1,00
+33.9
+24.5
+E.ON stock trading volume5 (€ in billions)
+1.10
+17.4
+Dividend per Share
+Market capitalization (€ in billions)
+1,944
+1,952
+Number of shares outstanding (in millions)
+Payout ratio¹ (%)
+- Dividend
+€ per share
+7.87
+6.70
+Combined Group Management Report
+6.28
+0.60
+²For the respective financial year; the 2016 figure represents management's dividend proposal.
+3Xetra, adjusted for the Uniper spinoff.
+1.00
+2015
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+¹Payout ratio not adjusted for discontinued operations.
+2016
+0,50
+2012 2013 2014
+2011
+45
+Year-end closing price³
+59
+5On all German stock exchanges, including Xetra.
+0.21
+4Based on ordinary shares outstanding at year-end.
+51
+50
+76
+0.50 0.50
+59
+E.ON Stock
+Interest-rate and currency derivatives
+1,858
+1,858
+Trade receivables
+41
+3,999
+3,999
+97
+3,958
+1,761
+-14
+660
+660
+15
+Total
+6,517
+6,517
+56
+97
+645
+6,364
+Financial liabilities
+Commodity derivatives
+Financial assets
+Total
+Net value
+-34
+Interest-rate and currency derivatives
+-4
+14
+105
+1,010
+188
+-521
+-14
+-48
+60
+-23
+2
+654
+Within sales (including disposals), €509 million results from the
+deconsolidation of the Uniper Group. Within derivative financial
+instruments, the purchases (including additions) essentially result
+from the fact that the deconsolidation of Uniper has generated
+external derivatives relationships between E.ON and the Uniper
+Group for the first time.
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following table:
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2016
+Conditional
+netting
+amount
+Gross
+amount
+Amount
+offset
+Carrying
+amount
+(netting
+agreements)
+Financial
+collateral
+received/
+pledged
+€ in millions
+2,654
+Trade receivables
+800
+Financial
+Gross
+amount
+Amount
+offset
+Carrying
+amount
+(netting
+collateral
+received/
+agreements)
+pledged
+Net value
+€ in millions
+Financial assets
+-359
+11,213
+11,213
+3,982
+7,231
+Interest-rate and currency derivatives
+1,436
+1,436
+115
+1,321
+Commodity derivatives
+Conditional
+netting
+amount
+195
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2015
+Summary of Financial Highlights and Explanations
+1,854
+Commodity derivatives
+213
+213
+15
+198
+Trade payables
+2,040
+2,040
+41
+1,999
+2,654
+Total
+0
+4,907
+56
+800
+4,051
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+4,907
+141
+Other operating liabilities
+Derivative financial instruments
+289
+AmC
+16,655
+289
+16,655
+289
+Liabilities from finance leases
+827
+827
+n/a
+Other financial liabilities
+2,876
+1,971
+AmC
+1,971
+544
+Trade payables and other operating liabilities
+33,157
+28,317
+Trade payables
+2,375
+2,375
+AmC
+Derivatives with no hedging relationships
+289
+14,384
+Bank loans/Liabilities to banks
+13,750
+6,802
+14,774
+6,802
+AfS
+6,802
+6,268
+463
+5,189
+5,189
+LaR
+923
+923
+LaR
+1,191
+203
+AfS
+203
+93
+51,236
+48,301
+17,742
+16,837
+13,750
+AmC
+14,384
+HFT
+14,384
+Jan. 1, (including
+2016
+Sales
+(including
+additions)
+disposals)
+Settle-
+ments
+Gains/
+Losses in
+income
+statement
+Transfers
+Gains/
+into
+Level 3
+out of
+Level 3
+Losses in
+Dec. 31,
+OCI
+2016
+Equity investments
+649
+47
+-162
+-14
+60
+-19
+-12
+549
+€ in millions
+Purchases
+Fair Value Hierarchy Level 3 Reconciliation (Values Determined Using Valuation Techniques)
+also Note 1). In 2016, equity investments were reclassified into
+Level 3 in the amount of €60 million, and out of Level 3 in the
+amount of €19 million. The fair values determined using valuation
+techniques for financial instruments carried at fair value are
+reconciled as shown in the following table:
+5,985
+Derivatives with hedging relationships
+Put option liabilities under IAS 322
+1,181
+686
+1,181
+n/a
+686
+AmC
+1,181
+686
+8,367
+1,181
+14,531
+361
+Total liabilities
+9,691
+45,154
+AmC
+9,691
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined using
+valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair value and the fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+The fair value of shareholdings in unlisted companies and of
+debt instruments that are not actively traded, such as loans
+received, loans granted and financial liabilities, is determined by
+discounting future cash flows. Any necessary discounting takes
+place using current market interest rates over the remaining
+terms of the financial instruments. Fair value measurement was
+not applied in the case of shareholdings with a carrying amount
+of €56 million (2015: €62 million) as cash flows could not be
+determined reliably for them. The shareholdings are not material
+by comparison with the overall position of the Group.
+The determination of the fair value of derivative financial instru-
+ments is discussed in Note 30.
+Notes
+194
+In 2016, there were no material reclassifications between
+Levels 1 and 2 of the fair value hierarchy. At the end of each
+reporting period, E.ON assesses whether there might be grounds
+for reclassification between hierarchy levels.
+The input parameters of Level 3 of the fair value hierarchy for
+equity investments are specified taking into account economic
+developments and available industry and corporate data (see
+50,899
+14,774
+Derivatives (with/without hedging relationships)
+478
+43,506
+11,370
+7,869
+2,725
+Put option liabilities under IAS 32
+162
+5
+109
+410
+Other operating liabilities
+9,611
+2
+6
+2
+Cash outflows for trade payables and other operating liabilities
+55,608
+11,377
+7,984
+3,137
+Cash outflows for liabilities within the scope of IFRS 7
+59,348
+14,959
+14,598
+2,329
+15,441
+Trade payables
+6,614
+3,347
+5,837
+9,830
+Bank loans/Liabilities to banks
+161
+35
+77
+49
+Liabilities from finance leases
+Other financial liabilities
+Financial guarantees
+103
+166
+231
+1,357
+1,362
+34
+469
+1,068
+26
+Cash outflows for financial liabilities
+3,740
+3,582
+12,304
+2,088
+CEO Letter
+E.ON Stock
+-260
+1The categories are described in detail in Note 1.
+The net gains and losses in the held-for-trading category encom-
+pass both the changes in fair value of the derivative financial
+instruments and the gains and losses on realization. The changes
+in market value were primarily influenced by the fair value
+measurement of commodity derivatives and of realized gains
+on currency derivatives.
+Risk Management
+Principles
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within
+the confines of the Group's overall guidelines. To ensure efficient
+risk management at the E.ON Group, the Trading (Front Office),
+Financial Controlling (Middle Office) and Financial Settlement
+(Back Office) departments are organized as strictly separate units.
+Risk controlling and reporting in the areas of interest rates,
+currencies, credit and liquidity management is performed by
+the Financial Controlling department, while risk controlling and
+reporting in the area of commodities is performed at Group level
+by a separate department.
+E.ON uses a Group-wide treasury, risk management and report-
+ing system. This system is a standard information technology
+solution that is fully integrated and is continuously updated.
+The system is designed to provide for the analysis and monitor-
+ing of the E.ON Group's exposure to liquidity, foreign exchange
+and interest risks. Credit risks are monitored and controlled on
+a Group-wide basis by Financial Controlling, with the support
+of a standard software package.
+In addition to interest income and expenses from financial
+receivables, the net gains and losses in the loans and receivables
+category consist primarily of valuation allowances on trade
+receivables. Gains and losses on the disposal of available-for-
+sale securities and equity investments are reported under other
+operating income and other operating expenses, respectively.
+The net gains and losses in the amortized cost category are due
+primarily to interest on financial liabilities, reduced by capitalized
+construction-period interest.
+Notes
+198
+Separate Risk Committees are responsible for the maintenance
+and further development of the strategy set by the Management
+Board of E.ON SE with regard to commodity, treasury and credit
+risk management policies.
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON consist
+of ensuring ability to pay at all times, the timely satisfaction of
+contractual payment obligations and the optimization of costs
+within the E.ON Group.
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+E.ON SE determines the Group's financing requirements on the
+basis of short- and medium-term liquidity planning. The financing
+of the Group is controlled and implemented on a forward-looking
+basis in accordance with the planned liquidity requirement or
+surplus. Relevant planning factors taken into consideration include
+operating cash flow, capital expenditures, divestments, margin
+payments and the maturity of bonds and commercial
+paper.
+2. Price Risks
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest
+rates, commodities and asset management. These risks create
+volatility in earnings, equity, debt and cash flows from period to
+period. E.ON has developed a variety of strategies to limit or
+eliminate these risks, including the use of derivative financial
+instruments, among others.
+3. Credit Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group to
+identify, measure and control credit risks.
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from profit-at-risk ("PaR"),
+value-at-risk ("VaR") and sensitivity analyses are "forward-
+looking statements" that involve risks and uncertainties. Actual
+results could differ materially from those projected due to
+actual, unforeseeable developments in the global financial mar-
+kets. The methods used by the Company to analyze risks should
+not be considered forecasts of future events or losses. For
+example, E.ON faces certain risks that are either non-financial
+or non-quantifiable. Such risks principally include country risk,
+operational risk, regulatory risk and legal risk, which are not
+represented in the following analyses.
+Foreign Exchange Risk Management
+1,515
+1,721
+Report of the Supervisory Board
+Total
+-529
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+197
+Financial guarantees with a total nominal volume of €97 million
+(2015: €26 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees. E.ON has
+recognized a liability for this in the amount of €8 million (2015:
+€8 million).
+For financial liabilities that bear floating interest rates, the rates
+that were fixed on the balance sheet date are used to calculate
+future interest payments for subsequent periods as well. Finan-
+cial liabilities that can be terminated at any time are assigned
+to the earliest maturity band in the same way as put options that
+are exercisable at any time. All covenants were complied with
+during 2016.
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+The net gains and losses from financial instruments by IAS 39
+category are shown in the following table:
+Net Gains and Losses by Category¹
+€ in millions
+Loans and receivables
+Available for sale
+2016
+2015
+-210
+-94
+1,715
+662
+Held for trading
+745
+33
+Amortized cost
+-861
+6,213
+Cash
+outflows
+from 2021
+Cash
+outflows
+2017
+10,549
+1,274
+18,627
+Transactions and business relationships resulting in the deriva-
+tive financial receivables and liabilities presented are generally
+concluded on the basis of standard contracts that permit the
+netting of open transactions in the event that a counterparty
+becomes insolvent.
+The netting agreements are derived from netting clauses con-
+tained in master agreements including those of the International
+Swaps and Derivatives Association (ISDA) and the European
+Federation of Energy Traders (EFET), as well as the German
+Master Agreement for Financial Derivatives Transactions ("DRV")
+and the Financial Energy Master Agreement ("FEMA"). Collateral
+pledged to and received from financial institutions in relation
+to these liabilities and assets limits the utilization of credit lines
+in the fair value measurement of interest-rate and currency
+derivatives, and is shown in the table. For commodity derivatives
+in the energy trading business, the netting option is not pre-
+sented in the accounting because the legal enforceability of
+netting agreements varies by country. The E.ON Group did not
+net interest-rate and currency derivatives and non-derivative
+financial instruments.
+Notes
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities
+included in the scope of IFRS 7:
+Cash Flow Analysis as of December 31, 2016
+€ in millions
+Bonds
+Commercial paper
+196
+Cash
+Cash
+outflows
+2017
+outflows
+2018
+Cash
+outflows
+2019-2021
+Cash
+outflows
+from 2022
+3,277
+2,358
+3,358
+3,982
+10,195
+7,937
+30,096
+30,096
+8,083
+Total
+27,423
+0
+27,423
+10,195
+593
+16,635
+Financial liabilities
+Interest-rate and currency derivatives
+2,047
+2,047
+848
+1,199
+Commodity derivatives
+13,518
+13,518
+6,213
+426
+6,879
+Other operating liabilities
+Total
+14,531
+14,531
+0
+Cash
+outflows
+2018-2020
+Bank loans/Liabilities to banks
+11
+66
+335
+Other operating liabilities
+3,313
+5
+5
+2
+Cash outflows for trade payables and other operating liabilities
+14,735
+863
+1,355
+2,367
+Cash outflows for liabilities within the scope of IFRS 7
+19,190
+3,742
+4,826
+10,573
+Cash Flow Analysis as of December 31, 2015
+€ in millions
+Bonds
+Commercial paper
+Cash
+outflows
+2016
+97
+108
+33
+2,030
+10
+23
+Liabilities from finance leases
+55
+111
+103
+246
+Other financial liabilities
+Financial guarantees
+918
+399
+97
+Cash outflows for financial liabilities
+4,455
+2,879
+3,471
+8,206
+Trade payables
+2,040
+Derivatives (with/without hedging relationships)
+9,349
+761
+1,284
+Put option liabilities under IAS 32
+LaR
+Total Volume of Foreign Currency, Interest Rate and Equity-Based Derivatives
+3,442
+3,042.7
+-1,014.1
+3,386.0
+-796.9
+55.1
+-27.6
+165.0
+-0.8
+55.1
+-27.6
+165.0
+-0.8
+29,913.3
+-796.1
+32,914.0
+-609.1
+December 31, 2016
+December 31, 2015
+Nominal
+€ in millions
+value
+Electricity forwards
+Exchange-traded electricity forwards
+-248.3
+Electricity swaps
+1,600.0
+1,000.0
+7,931.2
+35.5
+321.7
+36.0
+7,929.2
+110.9
+35.5
+38.8
+7,966.7
+357.7
+7,964.7
+149.7
+2,042.7
+-811.0
+1,786.0
+-548.6
+1,792.7
+-847.2
+1,536.0
+-590.1
+250.0
+36.2
+250.0
+41.5
+-203.1
+38.9
+1,645.2
+Nominal
+value
+22.7
+59.2
+-15.2
+1,190.0
+17.5
+12,953.3
+-208.7
+28.3
+-2.8
+968.5
+-9.0
+Exchange-traded oil derivatives
+439.8
+-6.1
+Emissions-related derivatives
+2.7
+2.2
+20.1
+-8.0
+Exchange-traded emissions-related derivatives
+651.4
+38.0
+Other derivatives
+17.9
+Fair value
+255.9
+317.5
+12,344.1
+42,677.4
+17,620.1
+Fair value
+210.3
+411.9
+1,466.3
+175.7
+1,694.4
+38.4
+Electricity options
+Gas forwards
+Exchange-traded gas forwards
+Gas swaps
+Gas options
+Coal forwards and swaps
+Exchange-traded coal forwards
+Oil derivatives
+107.4
+-53.5
+196.2
+-35.1
+433.5
+49.7
+34,697.1
+484.0
+249.2
+24.2
+21,398.3
+Fair value
+-21
+-1,014
+-13
+1
+2
+10
+Timing of Reclassifications from OCI¹ to the Income Statement-2015
+€ in millions
+OCI-Currency cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Commodity cash flow hedges
+¹Other comprehensive income. Figures are pretax.
+Expected gains/losses
+Carrying
+amount
+2016
+2017
+2018-2020
+>2020
+70
+759
+-2
+32
+-2
+-8
+8
+-5
+-232
+Pursuant to the information available as of the balance sheet
+date, the following effects will accompany the reclassifications
+from accumulated other comprehensive income to the income
+statement in subsequent periods:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Timing of Reclassifications from OCI¹ to the Income Statement-2016
+€ in millions
+OCI-Currency cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Commodity cash flow hedges
+¹Other comprehensive income. Figures are pretax.
+189
+Expected gains/losses
+Carrying
+amount
+2017
+2018
+2019-2021
+>2021
+212
+7
+13
+1,048
+38.9
+-110
+-747
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+€ in millions
+FX forward transactions
+Subtotal
+Cross-currency swaps
+Cross-currency interest rate swaps
+Subtotal
+Interest rate swaps
+Fixed-rate payer
+Fixed-rate receiver
+Interest rate options
+Subtotal
+Other derivatives
+Subtotal
+Total
+Total Volume of Electricity, Gas, Coal, Oil and Emissions-Related Derivatives
+191
+December 31, 2016
+December 31, 2015
+Nominal
+value
+18,848.8
+18,848.8
+Fair value
+-112.1
+-112.1
+Nominal
+value
+21,398.3
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+-8
+Combined Group Management Report
+E.ON Stock
+Gains and losses from reclassification are generally reported
+in that line item of the income statement which also includes
+the respective hedged transaction. Gains and losses from the
+ineffective portions of cash flow hedges are classified as other
+operating income or other operating expenses. Interest cash
+flow hedges are reported under "Interest and similar expenses."
+The fair values of the designated derivatives in cash flow hedges
+totaled -€624 million (2015: -€574 million).
+A loss of €673 million (2015: €499 million gain) was posted to
+other comprehensive income in 2016. In the same period, a
+gain of €342 million (2015: €348 million loss) was reclassified
+from OCI to the income statement.
+Notes
+190
+Net Investment Hedges
+The Company uses foreign currency loans, foreign currency
+forwards and foreign currency swaps to protect the value of its
+net investments in its foreign operations denominated in foreign
+currency. For the year ended December 31, 2016, the Company
+recorded an amount of €568 million (2015: €746 million) in
+accumulated other comprehensive income due to changes in fair
+value of derivatives and to currency translation results of non-
+derivative hedging instruments. As in 2015, no ineffectiveness
+resulted from net investment hedges in 2016.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant vari-
+ables. The Company assesses and monitors the fair value of
+derivative instruments on a periodic basis. The fair value to be
+determined for each derivative instrument is the price that
+would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants on the
+measurement date (exit price). E.ON also takes into account the
+counterparty credit risk when determining fair value (credit
+value adjustment). The fair values of derivative instruments are
+calculated using common market valuation methods with
+reference to available market data on the measurement date.
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments in
+the Consolidated Financial Statements.
+•
+Currency, electricity, gas and oil forward contracts, swaps,
+and emissions-related derivatives are valued separately at
+their forward rates and prices as of the balance sheet date.
+Whenever possible, forward rates and prices are based on
+market quotations, with any applicable forward premiums
+and discounts taken into consideration.
+Market prices for interest rate, electricity and gas options
+are valued using standard option pricing models commonly
+used in the market. The fair values of caps, floors and collars
+are determined on the basis of quoted market prices or on
+calculations based on option pricing models.
+•
+•
+The fair values of existing instruments to hedge interest risk
+are determined by discounting future cash flows using market
+interest rates over the remaining term of the instrument.
+Discounted cash values are determined for interest rate, cross-
+currency and cross-currency interest rate swaps for each
+individual transaction as of the balance sheet date. Interest
+income is recognized in income at the date of payment or
+accrual.
+Equity forwards are valued on the basis of the stock prices of
+the underlying equities, taking into consideration any timing
+components.
+• Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective clear-
+ing houses. Paid initial margins are disclosed under other
+assets. Variation margins received or paid during the term of
+such contracts are stated under other liabilities or other
+assets, respectively.
+Certain long-term energy contracts are valued with the
+aid of valuation models that use internal data if market
+prices are not available. A hypothetical 10-percent increase
+or decrease in these internal valuation parameters as of the
+balance sheet date would lead to a theoretical decrease in
+market values of €39 million or an increase of €39 million,
+respectively.
+At the beginning of 2016, a net loss of €47 million from the
+initial measurement of derivatives was deferred. In the year
+under review, deferred expenses increased by €11 million to
+€58 million, which will be recognized in income during subse-
+quent periods as the contracts are settled. In addition to the
+realization of deferred income of €5 million, the increase resulted
+primarily from the deferral of the initial measurement of deriv-
+atives in the net amount of €49 million. This was offset by
+the deconsolidation of the Uniper Group, which resulted in a
+decrease of €43 million.
+The following two tables include both derivatives that qualify
+for IAS 39 hedge accounting treatment and those for which it is
+not used:
+CEO Letter
+Report of the Supervisory Board
+Strategy and Objectives
+2.0
+51.7
+21.2
+Other operating liabilities
+Total liabilities
+6,735
+26,362
+3,321
+AmC
+3,321
+22,411
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined using
+valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair value and the fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable esti-
+mates of their fair values because of their short maturity.
+Where the value of a financial instrument can be derived from an
+active market without the need for an adjustment, that value is
+used as the fair value. This applies in particular to equities held
+and to bonds held and issued.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2015
+Total carry-
+ing amounts
+193
+IAS 39
+€ in millions
+Carrying
+amounts
+493
+within the
+scope of
+IFRS 7
+AmC
+493
+1,317
+506
+811
+Trade payables and other operating liabilities
+12,135
+8,721
+Trade payables
+2,040
+2,040
+AmC
+Derivatives with no hedging relationships
+1,295
+1,295
+HFT
+1,295
+43
+Derivatives with hedging relationships
+1,572
+1,572
+n/a
+1,572
+1,152
+1,572
+Put option liabilities under IAS 322
+493
+AmC
+measure-
+Derived from
+Trade receivables
+11,213
+11,213
+LaR
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+15,600
+15,600
+HFT
+15,600
+6,521
+610
+610
+n/a
+610
+8,686
+610
+Other operating assets
+Securities and fixed-term deposits
+Cash and cash equivalents
+Restricted cash
+Assets held for sale
+Total assets
+Financial liabilities
+Bonds
+28,938
+Determined
+30,865
+4,435
+ment
+category¹
+Fair value
+using market
+prices
+active mar-
+ket prices
+Equity investments
+1,202
+1,202
+AfS
+1,202
+145
+408
+Financial receivables and other financial assets
+Receivables from finance leases
+5,064
+5,044
+609
+609
+n/a
+Other financial receivables and financial assets
+4,455
+4,435
+LaR
+Trade receivables and other operating assets
+1,279
+1,816
+Other financial liabilities
+821
+AfS
+821
+66
+206
+Financial receivables and other financial assets
+Receivables from finance leases
+1,016
+1,016
+372
+372
+n/a
+Other financial receivables and financial assets
+644
+644
+LaR
+644
+Trade receivables and other operating assets
+8,480
+7,737
+Trade receivables
+3,999
+3,999
+LaR
+821
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Equity investments
+Derived from
+active mar-
+Other exchange-traded derivatives
+112.7
+43.3
+Total
+4,025.1
+447.1
+130,595.0
+1,254.4
+Notes
+(31) Additional Disclosures on Financial
+Instruments
+The carrying amounts of the financial instruments, their grouping
+into IAS 39 measurement categories, their fair values and their
+measurement sources by class are presented in the following
+table:
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2016
+Total carry-
+ing amounts
+192
+IAS 39
+€ in millions
+Carrying
+amounts
+within the
+scope of
+IFRS 7
+measure-
+ment
+category¹
+Fair value
+Determined
+using market
+prices
+ket prices
+1,647
+1,647
+HFT
+852
+852
+LaR
+12
+AfS
+23,229
+22,474
+14,227
+13,690
+11,905
+11,905
+AmC
+Bank loans/Liabilities to banks
+148
+148
+AmC
+16,930
+148
+16,930
+97
+51
+Liabilities from finance leases
+358
+358
+n/a
+LaR
+5,574
+5,574
+383
+1,647
+29
+871
+871
+n/a
+871
+1,413
+871
+Other operating assets
+Securities and fixed-term deposits
+Cash and cash equivalents
+Restricted cash
+1,515
+Assets held for sale
+Financial liabilities
+Bonds
+1,963
+1,220
+LaR
+1,220
+6,474
+6,474
+Afs
+6,474
+6,091
+Total assets
+Because it holds interests in businesses outside of the euro area,
+currency translation risks arise within the E.ON Group. Fluctua-
+tions in exchange rates produce accounting effects attributable
+to the translation of the balance sheet and income statement
+items of the foreign consolidated Group companies included in
+the Consolidated Financial Statements. Translation risks are
+hedged through borrowing in the corresponding local currency,
+which may also include shareholder loans in foreign currency.
+In addition, derivative and primary financial instruments are
+employed as needed. The hedges qualify for hedge accounting
+under IFRS as hedges of net investments in foreign operations.
+The Group's translation risks are reviewed at regular intervals
+and the level of hedging is adjusted whenever necessary. The
+respective debt factor, net assets and the enterprise value
+denominated in the foreign currency are the principal criteria
+governing the level of hedging.
+4,919.0
+Sales
+681 7,707 8,386 7,689
+153
+13,205
+12,312 1,029
+984
+1,658
+1,693
+960 1,012
+7,781
+amortization¹
+-613
+-557
+Adjusted EBIT
+894
+Equity-method earnings²
+Depreciation and
+66
+698
+15
+2015
+2016
+2015
+2016
+2015
+2016
+973
+11
+2015
+11,622
+10,719
+1,014
+Intersegment sales
+1,583
+1,593
+External sales
+2016
+1,129
+86
+interest and taxes³
+gg ⪜སྦ།
+༄
+ཁ
+Other
+2016 2015
+9,557 6,552 7,159
+102
+244
+257
+8,539 7,791 9,659 6,796 7,416
+-55
+༄༄།
+397
+-124
+278
+487
+90
+729
+193
+20
+Operating cash flow before
+443
+35
+1,588
+564
+Investments
+846
+795
+ཎྜཟླ་「 ༄」」
+530
+-161
+543
+283
+ཚུ」བྷ། 」ཚི
+-231
+-204
+354
+328
+2015
+2016
+€ in millions
+55
+Income from transactions with related companies is generated
+mainly through the delivery of gas and electricity to distributors
+and municipal entities, especially municipal utilities. The rela-
+tionships with these entities do not generally differ from those
+that exist with municipal entities in which E.ON does not have
+an interest.
+Expenses from transactions with related companies are
+generated mainly through electricity deliveries.
+The decrease in income and expenses from transactions with
+associates compared to 2015 results from the fact that the
+associated companies of the Uniper Group are no longer related
+companies after the deconsolidation, according to IAS 24.
+As of December 31, 2016, receivables from companies of the
+Uniper Group totaling €1,136 million and liabilities of €908 million
+consist primarily of electricity and gas transactions and the
+measurement of commodity derivatives.
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2016, include €281 million (2015: €311 million) in trade
+payables to operators of jointly-owned nuclear power plants.
+These payables bear interest at 1.0 percent or at one-month
+EURIBOR less 0.05 percent per annum (2015: 1.0 percent or
+one-month EURIBOR less 0.05 percent per annum) and have no
+fixed maturity. E.ON continues to have in place with these
+power plants a cost-transfer agreement and a cost-plus-fee
+agreement for the procurement of electricity. The settlement
+of such liabilities occurs mainly through clearing accounts.
+Associated companies
+E.ON has issued collateral for the benefit of the Uniper Group.
+These contingencies are presented in Note 27.
+The total expense for 2016 for members of the Management
+Board amounted to €9.7 million (2015: €10.8 million) in short-
+term benefits and €2.3 million (2015: €3.0 million) in post-
+employment benefits. The cost of post-employment benefits
+is equal to the service and interest cost of the provisions for
+pensions. Additionally taken into account in 2016 were actuarial
+losses of €1.9 million (2015: actuarial gains of €9.3 million).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory
+Board of E.ON SE) must be disclosed.
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+55
+31
+381
+With interest rate derivatives included, the share of financial
+liabilities with floating interest rates was 0 percent as of Decem-
+ber 31, 2016 (2015: 0 percent). Under otherwise unchanged
+circumstances, the volume of financial liabilities with fixed inter-
+est rates, which amounted to €10.7 billion at year-end 2016,
+would decline to €9.6 billion in 2017 and €9.1 billion in 2018.
+The effective interest rate duration of the financial liabilities,
+including interest rate derivatives, was 9.9 years as of Decem-
+ber 31, 2016 (2015: 9.6 years). The volume-weighted average
+interest rate of the financial liabilities, including interest rate
+Other related parties
+198
+193
+Liabilities
+2,166
+Provision
+1,581
+1,771
+1,169
+Joint ventures
+54
+Other related parties
+341
+Associated companies
+203
+The expense determined in accordance with IFRS 2 for the
+tranches of the E.ON Share Performance Plan and the E.ON
+Share Matching Plan in existence in 2016 was €2.6 million
+(2015: €0.6 million).
+Provisions for the E.ON Share Performance Plan and the E.ON
+Share Matching Plan amounted to €9.5 million as of December 31,
+2016 (2015: €9.5 million).
+Non-Core Business
+Held in the Non-Core Business segment are the non-strategic
+activities of the E.ON Group. This includes in particular the oper-
+ation of the German nuclear power plants, which are managed
+by the PreussenElektra operating unit, as well as the Uniper
+Group, which since December 31, 2016, has been accounted
+for in the consolidated financial statements using the equity
+method. The earnings of Uniper are reported under non-oper-
+ating earnings.
+Corporate Functions/Other
+The Corporate Functions/Other segment contains E.ON SE
+itself, the equity investments held directly within this segment
+and, for the previous year and part of 2016, some remaining
+contributions from the E&P activities in the North Sea and the
+generation activities in Italy and Spain, all of which have since
+been sold.
+Notes
+Financial Information by Business Segment
+The Renewables segment combines the Group's activities for
+production from wind power plants (onshore and offshore) as
+well as solar farms.
+Energy Networks
+Customer Solutions
+Germany
+Sweden
+CEE/Turkey
+Germany
+UK
+204
+Renewables
+This segment combines the corresponding Customer Solutions
+in Sweden, Italy, the Czech Republic, Hungary and Romania, as
+well as E.ON Connecting Energies.
+Other
+The members of the Supervisory Board received a total of
+€3.7 million for their activity in 2016 (2015: €3.2 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts
+with subsidiaries totaling €0.5 million (2015: €0.5 million).
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 82 through 97.
+(33) Segment Information
+Led by its Group Management in Essen, Germany, the E.ON
+Group comprises the seven new reporting segments described
+below, as well as a segment for its Non-Core Business and
+Corporate Functions/Other, all of which are reported here in
+accordance with IFRS 8. The combined segments, which are
+not separately reportable, in the East-Central Europe/Turkey
+Energy Networks business and the Customer Solutions Other
+business are of subordinate importance and have similar eco-
+nomic characteristics with respect to customer structure, prod-
+ucts and distribution channels. Information regarding Uniper SE,
+which was reported as a discontinued operation until its decon-
+solidation as of December 31, 2016, is provided in Note 4.
+Energy Networks
+Germany
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+Sweden
+The segment comprises the electricity and gas networks busi-
+nesses in Sweden.
+East-Central Europe/Turkey
+This segment combines the distribution network activities in
+the Czech Republic, Hungary, Romania, Slovakia and Turkey.
+Customer Solutions
+Germany
+This segment consists of activities that supply our customers in
+Germany with electricity, gas and heating and the distribution
+of specific products and services in areas for improving energy
+efficiency and energy independence.
+UK
+The segment comprises sales activities and customer solutions
+in the UK.
+དྷ」ཋ, ཚ」ཟི」
+2016
+-127
+10
+1,232
+349
+Associated companies
+1,502
+554
+Income
+Joint ventures
+2016
+€ in millions
+Related-Party Transactions
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, the most significant of which are
+associated companies accounted for under the equity method
+and their subsidiaries. In 2016, receivables and payables to
+associates include relationships with the fully consolidated sub-
+sidiaries of the Uniper Group; in contrast, the income and
+expenses were still consolidated in the reporting year. Addition-
+ally reported as related parties are joint ventures, as well as equity
+interests carried at fair value and unconsolidated subsidiaries.
+Transactions with related parties are summarized as follows:
+(32) Transactions with Related Parties
+202
+Notes
+2015
+In addition, the mutual insurance fund Versorgungskasse Energie
+VVaG ("VKE") manages financial assets that are almost exclu-
+sively dedicated to the coverage of benefit obligations at E.ON
+Group companies in Germany; these assets totaled €1.0 billion
+at year-end 2016 (2015: €1.1 billion). The assets at VKE do not
+constitute plan assets under IAS 19 (see Note 24) and are
+shown as non-current and current assets on the balance sheet.
+The majority of the diversified portfolio, consisting of money
+market instruments, bonds, real estate and equities, is held in
+investment funds managed by external fund managers. VKE is
+subject to the provisions of the Insurance Supervision Act
+("Versicherungsaufsichtsgesetz" or "VAG") and its operations
+are supervised by the German Federal Financial Supervisory
+Authority ("Bundesanstalt für Finanzdienstleistungsaufsicht" or
+"BaFin"). Financial investments and continuous risk management
+are conducted within the regulatory confines set by BaFin.
+The three-month VaR with a 98-percent confidence interval for
+these financial assets was €49 million (2015: €58 million).
+61
+Other related parties
+Receivables
+21
+278
+318
+Other related parties
+29
+Joint ventures
+58
+945
+Associated companies
+1,244
+626
+Expenses
+212
+144
+279
+1,499
+The majority of the assets is held in investment funds managed
+by external fund managers. Corporate Asset Management at
+E.ON SE, which is part of the Company's Finance Department,
+is responsible for continuous monitoring of overall risks and
+those concerning individual fund managers. Risk management
+is based on a risk budget whose usage is monitored regularly.
+The three-month VaR with a 98-percent confidence interval for
+these financial assets was €175 million (2015: €189 million).
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 25), financial investments totaling €5.3 billion (2015:
+€5.4 billion) were held predominantly by German E.ON Group
+companies as of December 31, 2016.
+A key foundation of the risk management system is the Group-
+wide Commodity Risk Policy and the corresponding internal
+policies of the units. These specify the control principles for
+commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+As of December 31, 2016, the E.ON Group has entered, in par-
+ticular, into electricity and gas derivatives with a nominal value
+of €4,025 million (2015: €130,595 million).
+The profit-at-risk for the financial and physical commodity
+positions covering the planning horizon of up to three years
+amounted to €241 million as of December 31, 2016 (2015:
+€1,042 million).
+Until December 31, 2016, from a forward-looking perspective,
+risks were assessed using a profit-at-risk metric that quantifies
+the risk by taking into account the size of the open position,
+price levels and price volatilities, as well as the underlying mar-
+ket liquidity in each market. Profit-at-risk reflects the potential
+negative change in the market value of the open position if it
+is closed as quickly as market liquidity allows with a 5-percent
+chance of being exceeded.
+Within the framework of the spinoff of Uniper, E.ON is estab-
+lishing procurement capabilities for its sales business and ensuring
+market access for E.ON's remaining energy production. In the
+normal course of business of the underlying energy production
+and retail sales activities, E.ON's individual management units
+are exposed to uncertain commodity market prices, which
+impacts operating gains and costs. All external trading on com-
+modity markets must be related to reducing open commodity
+positions and be undertaken in strict accordance with approved
+commodity hedging strategies. As it is further expanding these
+capabilities, E.ON was still in a transitional phase at the end of
+the year.
+200
+Commodity exposures and risks are aggregated across the Group
+on a monthly basis and reported to the members of the Risk
+Committee. As part of the transitional phase mentioned above,
+the reporting and the reporting methodology are currently
+being reviewed to more appropriately reflect the changed risk
+profile of E.ON.
+Notes
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the value of
+the portfolio while reducing the potential negative deviation
+from target EBIT.
+The E.ON portfolio of physical assets, long-term contracts and
+end-customer sales is exposed to substantial risks from fluc-
+tuations in commodity prices. The principal commodity prices
+to which E.ON is exposed relate to electricity, gas and emission
+certificates.
+Commodity Price Risk Management
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for internal
+risk controlling and reflects the economic position of the E.ON
+Group. A one-percentage-point upward or downward change in
+interest rates (across all currencies) would raise interest charges
+by €43.7 million or lower them (2015: ±0) in the subsequent
+fiscal year.
+As of December 31, 2016, the E.ON Group held interest rate
+derivatives with a nominal value of €3,043 million (2015:
+€3,386 million).
+derivatives, was 5.6 percent as of December 31, 2016 (2015:
+5.9 percent).
+Until December 31, 2016, the maximum permissible risk was
+determined centrally by the Management Board and allocated
+over a three-year planning horizon into a decentralized limit
+structure in coordination with the units. For that there has been
+a clear system of internal controls in place that follows best-
+practice industry standards of risk management.
+These financial assets are invested on the basis of an accumula-
+tion strategy (total-return approach), with investments broadly
+diversified across the money market, bond, real estate and
+equity asset classes. Asset allocation studies are performed at
+regular intervals to determine the target portfolio structure.
+Credit Risk Management
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature of
+the operating activities and the credit risk, additional credit risk
+monitoring and controls are performed both by the units and by
+Group Management. Monthly reports on credit limits, including
+their utilization, are submitted to the Risk Committee. Intensive,
+standardized monitoring of quantitative and qualitative early-
+warning indicators, as well as close monitoring of the credit
+quality of counterparties, enable E.ON to act early in order to
+minimize risk.
+Asset Management
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest money
+at leading local banks. Standardized credit assessment and
+limit-setting is complemented by daily monitoring of CDS levels
+at the banks and at other significant counterparties.
+Exchange-traded forward and option contracts as well as
+exchange-traded emissions-related derivatives had an aggregate
+nominal value of €0 million as of December 31, 2016, (2015:
+€44,121 million). In this respect, there was no credit risk. For the
+remaining financial instruments, the maximum risk of default
+is equal to their carrying amounts.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements.
+The levels and details of financial assets received as collateral
+are described in more detail in Notes 18 and 26.
+201
+In order to minimize credit risk arising from operating activities
+and from the use of financial instruments, the Company enters
+into transactions only with counterparties that satisfy the Com-
+pany's internally established minimum requirements. Maxi-
+mum credit risk limits are set on the basis of internal and (where
+available) external credit ratings. The setting and monitoring of
+credit limits is subject to certain minimum requirements, which
+are based on Group-wide credit risk management guidelines.
+Long-term operating contracts and asset management trans-
+actions are not comprehensively included in this process. They
+are monitored separately at the level of the responsible units.
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+To the extent possible, pledges of collateral are negotiated with
+counterparties for the purpose of reducing credit risk. Accepted
+as collateral are guarantees issued by the respective parent
+companies or evidence of profit and loss pooling agreements in
+combination with letters of awareness. To a lesser extent, the
+Company also requires bank guarantees and deposits of cash and
+securities as collateral to reduce credit risk. Risk-management
+collateral was accepted in the amount of €481 million.
+Consolidated Financial Statements
+1,317
+Associated companies
+1,294
+Tax payments
+-476
+61
+Operating cash flow
+2,961
+4,191
+-619
+82
+-537
+-1,230
+The investments presented in the financial information by busi-
+ness segment tables are the purchases of investments reported
+in the Consolidated Statements of Cash Flows.
+Adjusted EBIT
+Adjusted EBIT, a measure of earnings before interest and taxes
+("EBIT") adjusted to exclude non-operating effects, replaces the
+EBITDA figure reported in the past as the most important key
+figure at E.ON for purposes of internal management control and
+as an indicator of a business's sustainable earnings power.
+The E.ON Management Board is convinced that adjusted EBIT is
+the most suitable key figure for assessing operating performance
+because it presents a business's operating earnings independently
+of non-operating factors, interest, and taxes.
+Unadjusted EBIT represents the Group's income/loss reported
+in accordance with IFRS before financial results and income
+taxes, taking into account the net income/expense from equity
+investments. To improve its meaningfulness as an indicator of
+the sustainable earnings power of the E.ON Group's business,
+unadjusted EBIT is adjusted for certain non-operating effects.
+Operating earnings also include income from investment sub-
+sidies for which liabilities are recognized.
+¹Operating cash flow from continuing operations.
+The non-operating earnings effects for which EBIT is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market of derivative
+financial instruments used for hedging and, where material,
+book gains/losses, cost-management and restructuring expenses,
+impairment charges and reversals recognized in the context of
+impairment tests on non-current assets, on equity investments
+in affiliated or associated companies and on goodwill, and other
+contributions to non-operating earnings.
+-537
+-775
+365
+248
+¹Adjusted for non-operating effects.
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included in income/loss from
+companies accounted for under the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
+³Operating cash flow from continuing operations.
+The following table shows the reconciliation of operating cash
+flow before interest and taxes to operating cash flow:
+Operating Cash Flow¹
+Interest payments
+€ in millions
+2015
+Difference
+Operating cash flow before
+interest and taxes
+3,974
+4,749
+2016
+Net book gains in 2016 were approximately €358 million below
+the prior-year level. In 2016 a book gain on the sale of securities
+was more than offset by a book loss on the sale of our U.K. E&P
+business. The prior-year figure includes book gains on the sale
+of securities, the remaining stake in E.ON Energy from Waste,
+exploration and production activities in the Norwegian North Sea,
+operations in Italy, and network segments in Germany.
+CEO Letter
+Report of the Supervisory Board
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+CEO Letter
+199
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated both
+by external financing in a variety of foreign currencies, and by
+shareholder loans from within the Group denominated in foreign
+currency. Financial transaction risks are generally fully hedged.
+The one-day value-at-risk (99 percent confidence) from the
+translation of deposits and borrowings denominated in foreign
+currency, plus foreign-exchange derivatives, was €113 million
+as of December 31, 2016 (2015: €181 million) and resulted
+primarily from the positions in British pounds, US dollars and
+Swedish kronor.
+Interest Risk Management
+667
+457
+7
+Joint ventures
+The E.ON Group is also exposed to operating and financial trans-
+action risks attributable to foreign currency transactions. The
+subsidiaries are responsible for controlling their operating cur-
+rency risks. E.ON SE coordinates hedging throughout the Group
+and makes use of external derivatives as needed.
+2015
+2016
+2015
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+205
+Renewables
+Non-Core Business
+Corporate Functions/Other
+Consolidation
+E.ON Group
+2016
+2015
+2016
+2015
+2016
+131
+2015
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities and from interest rate derivatives. Positions based on
+fixed interest rates, on the other hand, are subject to changes in
+fair value resulting from the volatility of market rates. E.ON
+seeks a specific mix of fixed- and floating-rate debt over time.
+The long-term orientation of the business model in principle
+means fulfilling a high proportion of financing requirements at
+fixed rates, especially within the medium-term planning period.
+This also involves the use of interest rate derivatives.
+701
+32,194
+6,378
+8,224
+1,948
+2,238
+38,173
+42,656
+The "Other" item consists in particular of revenues generated
+from services and from other trading activities.
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the
+equity method, by geographic area:
+Geographic Segment Information
+206
+890
+United Kingdom
+Sweden
+29,847
+Europe (other)
+Total
+€ in millions
+2016
+2015
+2016
+2015
+2016
+2015
+2016
+2015
+2016
+2015
+2016
+2015
+Other
+2015
+2016
+Total
+2016
+2015
+-411
+-12
+-19
+1
+-430
+-11
+3,542
+3,574
+-63
+-421
+274
+374
+-932
+134
+394
+Other
+Gas
+Electricity
+€ in millions
+Segment Information by Product
+External sales by product break down as follows:
+External sales by
+location of customer¹
+External sales by
+Additional Entity-Level Disclosures
+Notes
+3,563
+3,112
+131
+3,869
+3,356
+Pages 37 and 38 of the Combined Group Management Report
+provide a more detailed explanation of the reconciliation of
+adjusted EBIT to the net income/loss reported in the Consolidated
+Financial Statements.
+21,803
+23,825
+7,824
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+207
+(34) Compensation of Supervisory Board and
+Management Board
+Supervisory Board
+Total remuneration to members of the Supervisory Board in
+2016 amounted to €3.6 million (2015: €3.2 million).
+As in 2015, there were no loans to members of the Supervisory
+Board in 2016.
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are
+presented on page 96 and 97 in the Compensation Report.
+Additional information about the members of the Supervisory
+Board is provided on pages 222 and 223.
+Management Board
+Total compensation of the Management Board in 2016 amounted
+to €13.8 million (2015: €15.6 million). This consisted of base
+salary, bonuses, other compensation elements and share-based
+payments.
+Total payments to former members of the Management Board
+and their beneficiaries amounted to €11.6 million (2015:
+€15.8 million). Provisions of €172.8 million (2015: €154.6 mil-
+lion) have been established for the pension obligations to former
+members of the Management Board and their beneficiaries.
+As in 2015, there were no loans to members of the Management
+Board in 2016.
+The Management Board's compensation structure and the
+amounts for each member of the Management Board are pre-
+sented on pages 82 through 96 in the Compensation Report.
+Additional information about the members of the Management
+Board is provided on page 224.
+(35) Subsequent Events
+On March 8, 2017, E.ON announced that it intends to build a
+thermal waste-incineration power plant in northwest Stockholm.
+The plant in Sweden's capital will produce electricity, heat, and
+biogas and have an installed electric capacity of 25 megawatts.
+It will consist of a biogas production unit and a combined heat
+and power ("CHP") plant. The biogas unit is expected to enter ser-
+vice in 2018, the CHP plant in 2019. Investments in the project
+will total approximately €250 million.
+E.ON concluded the last regular DPR audit in 2016 with no error
+determination. On March 9, 2017, at the request of the German
+Federal Financial Supervisory Authority (Bundesanstalt für Finanz-
+dienstleistungsaufsicht - BaFin), Germany's Financial Reporting
+Enforcement Panel (FREP) opened an audit of the condensed
+semi-annual financial statements of E.ON SE as of June 30, 2016.
+The audit covers only the semi-annual financial report. It relates
+to the classification and measurement during the year of Uniper
+as a discontinued activity subsequent to the decision by the
+Annual General Meeting of June 8, 2016, to spin off Uniper, as
+well as related measurement issues. E.ON anticipates that this
+procedure will also conclude without any determinations. There
+is no impact on the consolidated balance sheet and the consoli-
+dated income statement as of December 31, 2016.
+208
+Wildberger
+Spieker
+Birnbaum
+Sih
+peiler
+Strategy and Objectives
+Teyssen
+Sen
+Jen
+The Management Board
+Essen, March 13, 2017
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+Declaration of the Management Board
+Jm
+Adjusted EBIT
+E.ON Stock
+CEO Letter
+9,675
+2,139 1,995
+6,218 6,953
+189
+208 38,173 42,656
+location of seller¹
+Intangible assets
+574 1,566
+21,547 21,978 8,184
+380
+10,169 2,085 2,017 6,169
+394
+133 187 1,039
+8,285
+2,089
+188
+203
+207 38,173 42,656
+229 2,329 4,465
+Property, plant and
+equipment
+11,076 15,492
+3,570 5,480 4,674
+E.ON's customer structure resulted in a focus on the Germany
+region. Aside from that, there was no major concentration in
+any given geographical region or business area. Due to the large
+number of customers the Company serves and the variety of its
+business activities, there are no individual customers whose
+business volume is material compared with the Company's total
+business volume.
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+315 6,352 4,536
+343
+2,706
+2,306
+Report of the Supervisory Board
+185
+1,330
+3,593
+Companies accounted for
+under the equity method
+2,534 2,495 25,242 38,997
+7,814
+7,716 3,388
+110
+Other non-operating earnings
+Germany
+Market valuation derivatives
+-4,474
+38,173
+42,656
+-366
+-359
+-91
+-197
+-65
+-4,106
+-497
+-
+-1,827
+-2,281
+430
+391
+553
+563
+-369
+1
+-16
+2,756
+2,290
+1,538
+Impairments (+)/Reversals (-)
+2,290
+439
+2,190
+24
+42,656
+467
+1,124
+780
+566
+-4,130
+-4,474
+0
+0
+1,357
+1,481
+1,538
+685
+15
+38,173
+3,112
+-21
+-38
+3,974
+3,169
+4,749
+3,227
+Restructuring and cost-management expenses decreased by
+€100 million in comparison with the previous year. As in 2015,
+the expenses were primarily attributable to the internal cost-
+reduction programs and the One2two project.
+Marking to market of derivatives used to protect our operating
+business from price fluctuations resulted in a positive effect of
+€932 million (prior year: -€134 million) as of December 31, 2016.
+About €1.1 billion of this change is due to the Customer Solu-
+tions segment.
+In 2016, impairments affected, in particular, activities in the USA
+and Poland in the Renewables segment, plants in the UK in
+the Customer Solutions segment and gas storage capacity in the
+Energy Networks segment in Germany. In 2015, we recorded
+impairment charges primarily at our nuclear energy business in
+Germany, at Renewables, and at E&P operations in the North
+Sea and generation operations in Italy that have since been sold.
+In 2016, other non-operating income and expenses was signifi-
+cantly influenced by the effects of the Act on the Reorganization
+of Responsibility in Nuclear Waste Disposal, passed in December
+2016 in the Bundestag and Federal Council; these items, along
+with the related impairment charges, are fully included here. In
+2015, other non-operating income and expenses included a
+large number of minor negative and positive effects, such as
+impairments of securities.
+The following table shows the reconciliation of earnings before
+interest and taxes to adjusted EBIT:
+Reconciliation of Income before Financial Results and Income Taxes
+€ in millions
+Net book gains/losses
+EBIT
+Restructuring/Cost-management expenses
+Non-operating adjustments
+8
+187
+106
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+15
+15
+16
+16
+63
+65
+57
+282
+287
+63
+563
+1,010
+365
+-226
+699
+1,070
+212
+3,563
+93
+391
+-527
+E.ON Ruhrgas Portfolio GmbH, DE, Essen¹,8
+100.0
+E.ON Hálózati Szolgáltató Kft. „,v.a.", HU, Pécs²
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf 1,8
+100.0
+E.ON Human Resources International GmbH, DE, Hanover 1,8
+E.ON Service GmbH, DE, Essen²
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Hungária Energetikai Zártkörűen Működő
+E.ON Servicii Clienţi S.R.L., RO, Târgu Mureş¹
+100.0
+Részvénytársaság, HU, Budapest¹
+100.0
+100.0
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE,
+Düsseldorf¹
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen 1,8
+E.ON Real Estate GmbH, DE, Essen²
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö¹
+100.0
+E.ON Regenerabile România S.R.L., RO, lași²
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Rhein-Ruhr Ausbildungs-GmbH, DE, Essen²
+100.0
+E.ON România S.R.L., RO, Târgu Mureş¹
+100.0
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen¹,8
+100.0
+100.0
+100.0
+E.ON Sverige AB, SE, Malmö¹
+100.0
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+213
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+Name, location
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+Stake (%)
+100.0
+Name, location
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11..4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+E.ON INTERNATIONAL FINANCE B.V., NL, Amsterdam¹
+100.0
+E.ON Servicii Tehnice S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Servisní, s.r.o., CZ, České Budějovice¹
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+E.ON Iberia Holding GmbH, DE, Düsseldorf1,8
+100.0
+100.0
+E.ON Innovation Hub S.A., RO, Târgu Mureş²
+100.0
+E.ON Smart Living AB, SE, Malmö¹
+100.0
+E.ON Insurance Services GmbH, DE, Essen²
+100.0
+E.ON Slovensko, a.s., SK, Bratislava¹
+E.ON Gas Sverige AB, SE, Malmö¹
+100.0
+E.ON RE Investments LLC, US, Wilmington¹
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Power Plants Belgium BVBA, BE, Vilvoorde²
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+100.0
+E.ON First Future Energy Holding B.V., NL, Rotterdam²
+100.0
+E.ON Produzione S.p.A., IT, Milan¹
+100.0
+E.ON Nord Sverige AB, SE, Malmö¹
+100.0
+E.ON Energy Trading S.p.A., IT, Milan¹
+100.0
+E.ON Power Innovation Pty Ltd, AU, Brisbane²
+100.0
+E.ON Fastigheter 4 AB, SE, Malmö²
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+E.ON Fastigheter 1 AB, SE, Malmö²
+100.0
+100.0
+E.ON North America Finance, LLC, US, Wilmington¹
+E.ON Fastigheter 2 AB, SE, Malmö²
+100.0
+E.ON Off Grid Solutions GmbH, DE, Düsseldorf²
+100.0
+100.0
+E.ON Perspekt GmbH, DE, Düsseldorf²
+70.0
+100.0
+100.0
+E.ON Metering GmbH, DE, Unterschleißheim²
+E.ON NA Capital LLC, US, Wilmington¹
+E.ON Energy Solutions Limited, GB, Coventry¹
+E.ON Invest GmbH, DE, Grünwald²
+E.ON IT UK Limited, GB, Coventry²
+100.0
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+Stake (%)
+E.ON Försäljning Sverige AB, SE, Malmö¹
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf¹
+100.0
+E.ON RAG Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+100.0
+100.0
+100.0
+E.ON Energy Installation Services Limited, GB, Coventry¹
+100.0
+100.0
+E.ON Energy Solutions GmbH, DE, Unterschleißheim²
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+E.ON Energy Services, LLC, US, Wilmington¹
+100.0
+100.0
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+E.ON Energy Projects Netherlands B.V., NL, Amsterdam²
+99.8
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+E.ON Energy Projects GmbH, DE, Munich¹
+100.0
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON Fastigheter 3 AB, SE, Malmö²
+56.5
+Stake (%)
+Cordova Wind Farm, LLC, US, Wilmington²
+Cremlinger Energie GmbH, DE, Cremlingen
+100.0
+49.0
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+100.0
+Dampfversorgung Ostsee-Molkerei GmbH, DE, Wismar
+50.0
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+100.0
+25.6
+100.0
+BO Baltic Offshore GmbH, DE, Hamburg²
+98.0
+Deutsche Gesellschaft für Wiederaufarbeitung von
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben6
+42.5
+Boiling Springs Wind Farm, LLC, US, Wilmington²
+100.0
+digimondo GmbH, DE, Essen²
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+Blackjack Creek Wind Farm, LLC, US, Wilmington²
+100.0
+Blackbriar Battery, LLC, US, Wilmington²
+(as of December 31, 2016)
+210
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Biogas Ducherow GmbH, DE, Ducherow²
+80.0
+Biogas Steyerberg GmbH, DE, Steyerberg²
+100.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+40.0
+Blackbeard Solar, LLC, US, Wilmington²
+100.0
+Citigen (London) Limited, GB, Coventry¹
+Colbeck's Corner, LLC, US, Wilmington¹
+Colbeck's Corner Holdco, LLC, US, Wilmington²
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+100.0
+100.0
+100.0
+33.3
+100.0
+Braila Power S.A., RO, Chiscani village²
+69.8
+Brattmyrliden Vind AB, SE, Malmö²
+Bursjöliden Vind AB, SE, Malmö²
+100.0
+E WIE EINFACH GmbH, DE, Cologne¹
+100.0
+Bützower Wärme GmbH, DE, Bützow
+20.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+Cameleon B.V., NL, Rotterdam²
+100.0
+E.DIS AG, DE, Fürstenwalde/Spree¹
+67.0
+Camellia Solar LLC, US, Wilmington²
+100.0
+e.discom Telekommunikation GmbH, DE, Rostock²
+100.0
+Camellia Solar Member LLC, US, Wilmington²
+100.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Dutchdelta Finance S.à r.l., LU, Luxembourg¹
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth
+100.0
+DOTI Deutsche-Offshore-Testfeld- und Infrastruktur-GmbH &
+Co. KG, DE, Oldenburg5
+26.3
+Broken Spoke Solar, LLC, US, Wilmington²
+100.0
+DOTI Management GmbH, DE, Oldenburg6
+26.3
+Bruenning's Breeze Holdco, LLC, US, Wilmington²
+100.0
+DOTTO MORCONE S.r.l., IT, Milan²
+100.0
+Bruenning's Breeze Wind Farm, LLC, US, Wilmington¹
+100.0
+Drivango GmbH, DE, Düsseldorf²
+100.0
+Brunnshög Energi AB, SE, Malmö²
+100.0
+Dutch Energy Projects C.V., NL, Amsterdam6
+50.0
+33.3
+100.0
+Notes
+100.0
+BAG Port 1 GmbH, DE, Regensburg²
+100.0
+27.0
+Bayernwerk AG, DE, Regensburg¹
+100.0
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede
+49.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel
+49.0
+49.0
+100.0
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog
+49.0
+Bayernwerk Energietechnik GmbH, DE, Regensburg²
+100.0
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+25.0
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide6
+100.0
+BAG 2. Netzpacht GmbH, DE, Regensburg²
+Avacon AG, DE, Helmstedt¹
+61.5
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+100.0
+DE, Borgstedt
+49.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+100.0
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg6
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+39.0
+Avacon Natur GmbH, DE, Sarstedt¹
+100.0
+33.3
+Avon Energy Partners Holdings, GB, Coventry²
+100.0
+49.0
+AWE-Arkona-Windpark Entwicklungs-GmbH, DE, Hamburg4
+50.0
+49.0
+100.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+25.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+49.0
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels
+25.1
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick
+49.0
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz
+40.7
+46.5
+Bardowick6
+49.0
+Abwassergesellschaft Gehrden mbH, DE, Gehrden6
+49.0
+Bioenergie Merzig GmbH, DE, Merzig²
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+51.0
+90.0
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck
+49.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf²
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+25.0
+100.0
+Abwasserentsorgung Marne-Land GmbH, DE,
+Bayernwerk Netz GmbH, DE, Regensburg²
+100.0
+Diekhusen-Fahrstedt
+49.0
+Abwasserentsorgung Schladen GmbH, DE, Schladen
+49.0
+Bayernwerk Portfolio GmbH & Co. KG, DE, Regensburg²
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+100.0
+100.0
+Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+49.0
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+Eddelak GmbH, DE, St. Michaelisdonn
+25.1
+Beteiligungsgesellschaft der Energieversorgungsunternehmen
+an der Kerntechnische Hilfsdienst GmbH GbR, DE,
+Eggenstein-Leopoldshofen
+47.4
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+Name, location
+Cardinal Wind Farm, LLC, US, Wilmington²
+e.distherm Wärmedienstleistungen GmbH, DE, Potsdam¹
+E.ON Elektrárne s.r.o., SK, Trakovice¹
+100.0
+E.ON Climate & Renewables GmbH, DE, Essen¹
+100.0
+E.ON Climate & Renewables Italia S.r.l., IT, Milan¹
+100.0
+E.ON Elnät Stockholm AB, SE, Malmö¹
+E.ON Elnät Sverige AB, SE, Malmö¹
+100.0
+100.0
+100.0
+100.0
+E.ON Energetikai Tanácsadó Kft., HU, Budapest²
+100.0
+E.ON Climate & Renewables North America, LLC, US,
+Wilmington¹
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+100.0
+E.ON Energiakereskedelmi Kft., HU, Budapest¹
+E.ON Climate & Renewables Netherlands B.V., NL, Amsterdam²
+100.0
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+E.ON Climate & Renewables Carbon Sourcing Limited, GB,
+Coventry²
+100.0
+100.0
+100.0
+E.ON Business Services Slovakia spol. s.r.o., SK, Bratislava²
+E.ON Business Services Sverige AB, SE, Malmö²
+51.0
+100.0
+E.ON Carbon Sourcing North America LLC, US, Wilmington²
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+E.ON Distribuce, a.s., CZ, České Budějovice¹
+100.0
+100.0
+100.0
+100.0
+E.ON Distribuţie România S.A., RO, Târgu Mureş¹
+Stake (%)
+E.ON Climate & Renewables Canada Ltd., CA, Saint John¹
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+100.0
+100.0
+E.ON Climate & Renewables Services GmbH, DE, Essen²
+E.ON Climate & Renewables UK Biomass Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Blyth Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Developments Limited, GB,
+Coventry¹
+100.0
+E.ON Energiaszolgáltató Kft., HU, Budapest¹
+E.ON Energie Kundenservice GmbH, DE, Landshut¹
+E.ON Energie Odnawialne Sp. z o.o., PL, Szczecin¹
+100.0
+100.0
+E.ON Climate & Renewables UK Operations Limited, GB,
+Coventry¹
+E.ON Energie Real Estate Investment GmbH, DE, Munich²
+100.0
+100.0
+E.ON Climate & Renewables UK Robin Rigg East Limited, GB,
+Coventry¹
+E.ON Energie România S.A., RO, Târgu Mureş¹
+E.ON Energie, a.s., CZ, České Budějovice¹
+68.2
+100.0
+100.0
+E.ON Energihandel Nordic AB, SE, Malmö¹
+100.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+Name, location
+212
+100.0
+100.0
+E.ON Climate & Renewables UK Offshore Wind Limited, GB,
+Coventry¹
+100.0
+100.0
+100.0
+E.ON Energiatermelő Kft., HU, Debrecen¹
+100.0
+100.0
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+100.0
+100.0
+E.ON Climate & Renewables UK Humber Wind Limited, GB,
+Coventry¹
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie AG, DE, Düsseldorf1,8
+100.0
+100.0
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+100.0
+E.ON Climate & Renewables UK Limited, GB, Coventry¹
+E.ON Climate & Renewables UK London Array Limited, GB,
+Coventry¹
+100.0
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+E.ON Energie Dialog GmbH, DE, Potsdam²
+99.8
+100.0
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+E.ON Connecting Energies SAS, FR, Levallois-Perret²
+E.ON Czech Holding AG, DE, Munich 1,8
+E.ON Danmark A/S, DK, Frederiksberg¹
+E.ON Business Services Regensburg GmbH, DE, Regensburg²
+E.ON Agile Nordic AB, SE, Malmö²
+100.0
+Champion WF Holdco, LLC, US, Wilmington¹
+100.0
+E.ON Asset Management GmbH & Co. EEA KG, DE, Grünwald 1,8
+100.0
+Champion Wind Farm, LLC, US, Wilmington¹
+100.0
+87.8
+E.ON Bayern Verwaltungs AG, DE, Munich²
+CHN Contractors Limited, GB, Coventry²
+100.0
+E.ON Beteiligungen GmbH, DE, Düsseldorf 1,8
+100.0
+CHN Electrical Services Limited, GB, Coventry2
+100.0
+E.ON Bioerdgas GmbH, DE, Essen¹
+100.0
+100.0
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+E.ON 4. Verwaltungs GmbH, DE, Essen²
+100.0
+Carnell Wind Farm, LLC, US, Wilmington²
+100.0
+e.kundenservice Netz GmbH, DE, Hamburg¹
+100.0
+Cattleman Wind Farm II, LLC, US, Wilmington²
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+100.0
+Cattleman Wind Farm, LLC, US, Wilmington²
+100.0
+E.ON 10. Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+Celle-Uelzen Netz GmbH, DE, Celle¹
+97.5
+E.ON 3. Verwaltungs GmbH, DE, Essen²
+100.0
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+CHN Group Ltd, GB, Coventry2
+100.0
+E.ON Biofor Sverige AB, SE, Malmö¹
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca²
+100.0
+E.ON Business Services Czech Republic s.r.o., CZ,
+České Budějovice²
+100.0
+E.ON Business Services GmbH, DE, Hanover¹
+100.0
+E.ON Climate & Renewables UK Wind Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Zone Six Limited, GB, Coventry¹
+E.ON Connecting Energies GmbH, DE, Essen 1,8
+100.0
+100.0
+100.0
+E.ON Business Services Hannover GmbH, DE, Hanover²
+E.ON Business Services Hungary Kft., HU, Budapest²
+100.0
+E.ON Connecting Energies Italia S.r.l., IT, Milan¹
+100.0
+100.0
+E.ON Business Services laşi S.R.L., RO, laşi²
+100.0
+E.ON Business Services Italia S.r.l., IT, Milan²
+100.0
+100.0
+100.0
+E.ON Climate & Renewables UK Robin Rigg West Limited, GB,
+Coventry¹
+Stake (%)
+CHN Special Projects Limited, GB, Coventry²
+100.0
+E.ON Business Services (UK) Limited, GB, Coventry¹
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+211
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+Name, location
+E.ON Business Services Berlin GmbH, DE, Berlin²
+Stake (%)
+Name, location
+100.0
+100.0
+HanseWerk AG, DE, Quickborn¹
+100.0
+100.0
+Rødsand 2 Offshore Wind Farm AB, SE, Malmö5
+20.0
+Powergen International Limited, GB, Coventry¹
+100.0
+Roscoe WF Holdco, LLC, US, Wilmington¹
+100.0
+Powergen Limited, GB, Coventry¹
+100.0
+Roscoe Wind Farm, LLC, US, Wilmington¹
+100.0
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+100.0
+Powergen Power No. 1 Limited, GB, Coventry²
+Powergen Power No. 2 Limited, GB, Coventry2
+Powergen Holdings S.à r.l., LU, Luxembourg²
+100.0
+100.0
+20.0
+100.0
+50.0
+Pipkin Ranch Wind Farm, LLC, US, Wilmington²
+100.0
+REWAG REGENSBURGER ENERGIE- UND
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+100.0
+WASSERVERSORGUNG AG & CO KG, DE, Regensburg5
+35.5
+Powergen (East Midlands) Loan Notes, GB, Coventry²
+100.0
+Powergen Ergon, GB, Coventry¹
+100.0
+R-KOM Regensburger Telekommunikationsgesellschaft mbH &
+Co. KG, DE, Regensburg
+20.0
+Powergen Holdings B.V., NL, Amsterdam¹
+R-KOM Regensburger Telekommunikationsverwaltungs-
+gesellschaft mbH, DE, Regensburg
+Renewables Power Netherlands B.V., NL, Amsterdam6
+Rose Rock Wind Farm, LLC, US, Wilmington²
+Rosengård Invest AB, SE, Malmö
+25.0
+50.0
+50.0
+35.0
+Sand Bluff Wind Farm, LLC, US, Wilmington¹
+100.0
+Städtische Betriebswerke Luckenwalde GmbH, DE,
+SBI Jordberga AB, SE, Linköping
+20.0
+Luckenwalde6
+29.0
+Scarweather Sands Limited, GB, Coventry
+50.0
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg5
+26.7
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+63.3
+100.0
+Stake (%)
+100.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+218
+Name, location
+Stake (%)
+Name, location
+S.C. Salgaz S.A., RO, Salonta²
+60.1
+Söderåsens Bioenergi AB, SE, Malmö²
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+Heidelberg²
+Sönderjysk Biogas Bevtoft A/S, DK, Vojens
+100.0
+Sønderjysk Biogasproduktion I/S, DK, Vojens
+Sand Bluff WF Holdco, LLC, US, Wilmington¹
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+83.5
+100.0
+33.3
+94.1
+OWN2 Second Offshore Wind Netherlands B.V., NL, Amsterdam²
+100.0
+Pyron Wind Farm, LLC, US, Wilmington¹
+100.0
+OWN3 Third Offshore Wind Netherlands B.V., NL, Amsterdam²
+100.0
+Pannon Watt Energetikai Megoldások Zrt., HU, Győr
+49.9
+Radford's Run Holdco, LLC, US, Wilmington¹
+Radford's Run Wind Farm, LLC, US, Wilmington¹
+100.0
+100.0
+Panther Creek Solar, LLC, US, Wilmington²
+100.0
+Rampion Offshore Wind Limited, GB, Coventry¹
+100.0
+50.1
+Purena Consult GmbH, DE, Wolfenbüttel²
+Purena GmbH, DE, Wolfenbüttel¹
+OWN1 First Offshore Wind Netherlands B.V., NL, Amsterdam²
+Powergen US Investments, GB, Coventry¹
+100.0
+100.0
+Powergen US Securities, GB, Coventry¹
+100.0
+000 E.ON Connecting Energies, RU, Moscow4
+50.0
+Powergen Weather Limited, GB, Coventry²
+100.0
+Oskarshamns Energi AB, SE, Oskarshamn4
+Owen Prairie Wind Farm, LLC, US, Wilmington²
+50.0
+PreussenElektra GmbH, DE, Hanover¹
+100.0
+100.0
+100.0
+Pioneer Trail Wind Farm, LLC, US, Wilmington¹
+Panther Creek Wind Farm I&II, LLC, US, Wilmington¹
+Paradise Cut Battery, LLC, US, Wilmington²
+REGAS Verwaltungs-GmbH, DE, Regensburg6
+50.0
+Perstorps Fjärrvärme AB, SE, Perstorp6
+50.0
+Peyton Creek Wind Farm, LLC, US, Wilmington²
+100.0
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG,
+DE, Regensburg6
+35.5
+Pinckard Solar LLC, US, Wilmington²
+100.0
+regiolicht GmbH, DE, Helmstedt²
+89.8
+Pinckard Solar Member LLC, US, Wilmington²
+100.0
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+50.0
+100.0
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg
+REGAS GmbH & Co KG, DE, Regensburg
+100.0
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding²
+77.4
+Raymond Wind Farm, LLC, US, Wilmington²
+100.0
+Pawnee Spirit Wind Farm, LLC, US, Wilmington²
+100.0
+PEG Infrastruktur AG, CH, Zug¹
+100.0
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Würzburg²
+100.0
+Peiẞenberger Kraftwerksgesellschaft mit beschränkter
+Haftung, DE, Peiẞenberg²
+RDE Verwaltungs-GmbH, DE, Würzburg²
+100.0
+100.0
+50.0
+50.0
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+26.7
+Stadtwerke Parchim GmbH, DE, Parchim6
+25.2
+Snow Shoe Wind Farm, LLC, US, Wilmington²
+100.0
+Stadtwerke Premnitz GmbH, DE, Premnitz
+35.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11..4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+E.ON Verwaltungs SE, DE, Düsseldorf²
+100.0
+EEP 2. Beteiligungsgesellschaft mbH, DE, Munich²
+100.0
+EFG Erdgas Forchheim GmbH, DE, Forchheim
+24.9
+E.ON Wind Denmark 2 AB, SE, Malmö²
+E.ON Wind Denmark 3 AB, SE, Malmö²
+E.ON Wind Denmark AB, SE, Malmö²
+E.ON Wind Kårehamn AB, SE, Malmö¹
+E.ON Wind Norway AB, SE, Malmö²
+100.0
+42.5
+EFR CEE Szolgáltató Kft., HU, Budapest
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav5
+Stadtwerke Niebüll GmbH, DE, Niebüll6
+48.0
+Settlers Trail Wind Farm, LLC, US, Wilmington¹
+Stadtwerke Lübz GmbH, DE, Lübz6
+25.0
+100.0
+Sjöbygden Skog AB, SE, Malmö²
+100.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+29.0
+Skive GreenLab Biogas ApS, DK, Frederiksberg²
+100.0
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald
+24.9
+ŠKO ENERGO, s.r.o., CZ, Mladá Boleslav
+21.0
+49.9
+49.9
+25.0
+100.0
+100.0
+Elmregia GmbH, DE, Schöningen
+49.0
+East Midlands Electricity Distribution Holdings, GB, Coventry²
+100.0
+Elverket Vallentuna AB, SE, Vallentuna
+43.4
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+214
+Name, location
+Stake (%)
+Name, location
+EMSZET Első Magyar Szélerőmű Korlátolt Felelősségű
+Társaság, HU, Kulcs²
+E.ON Zweiundzwanzigste Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+100.0
+100.0
+100.0
+EFR Europäische Funk-Rundsteuerung GmbH, DE, Munich
+El Algodon Alto Wind Farm, LLC, US, Wilmington²
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
+39.9
+100.0
+E.ON Wind Service GmbH, DE, Neubukow²
+100.0
+100.0
+Grünwald6
+49.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+100.0
+E.ON Wind Services A/S, DK, Rødby¹
+100.0
+Elevate Wind Holdco, LLC, US, Wilmington4
+50.0
+E.ON Wind Sweden AB, SE, Malmö¹
+ELICA S.r.l., IT, Milan²
+Magdeburg6
+Stadtwerke Husum GmbH, DE, Husum6
+24.9
+49.0
+SEC Dębno Sp. z.o.o., PL, Debno²
+100.0
+SEC E Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt
+Stadtwerke Barth GmbH, DE, Barth6
+36.0
+49.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+100.0
+SEC F Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE,
+Bayreuth5
+24.9
+SEC G Sp. z o.o., PL, Szczecin²
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen
+100.0
+100.0
+49.0
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+100.0
+SEC A Sp. z o.o., PL, Szczecin²
+100.0
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+Neustadt a. Rbge.6
+24.9
+SEC B Sp. z o.o., PL, Szczecin²
+100.0
+SEC Barlinek Sp. z o.o., PL, Barlinek²
+100.0
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Neustadt a. Rbge.6
+24.9
+SEC C Sp. z o.o., PL, Szczecin²
+100.0
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen6
+SEC D Sp. z o.o., PL, Szczecin²
+Servicii Energetice pentru Acasa - SEA Complet S.A., RO,
+Târgu Mureş
+Stadtwerke Bergen GmbH, DE, Bergen
+SEC HR Sp. z o.o., PL, Szczecin²
+SEC Słubice Sp. z o.o., PL, Słubice²
+100.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+49.0
+SEC Strzelce Krajeńskie Sp. z o.o., PL, Strzelce Krajeńskie²
+100.0
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+39.0
+SERVICE plus GmbH, DE, Neumünster²
+100.0
+Stadtwerke Garbsen GmbH, DE, Garbsen6
+24.9
+Service Plus Recycling GmbH, DE, Neumünster²
+100.0
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+25.0
+49.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+Ebermannstadt
+SEC Serwis Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Blankenburg GmbH, DE, Blankenburg6
+30.0
+SEC Łobez Sp. z o.o., PL, Łobez²
+100.0
+Stadtwerke Bogen GmbH, DE, Bogen
+41.0
+Stadtwerke Bredstedt GmbH, DE, Bredstedt
+49.9
+SEC Myślibórz Sp. z o.o., PL, Myślibórz²
+89.9
+SEC Połczyn-Zdrój Sp. z o.o., PL, Połczyn-Zdrój²
+100.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf6
+49.0
+100.0
+East Midlands Electricity Share Scheme Trustees Limited, GB,
+Coventry²
+Offshore Trassenplanungs GmbH i. L., DE, Hanover²
+Offshore-Windpark Delta Nordsee GmbH, DE, Hamburg²
+100.0
+66.7
+Induboden GmbH & Co. Grundstücksgesellschaft OHG, DE,
+Essen²
+100.0
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
+Braunau am Inn6
+Industriekraftwerk Greifswald GmbH, DE, Kassel
+49.0
+20.0
+Industry Development Services Limited, GB, Coventry²
+100.0
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein
+GmbH, DE, Kiel6
+33.3
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+GLG Netz GmbH, DE, Gifhorn¹
+41.7
+InfraServ-Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz6
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+Nienburg/Weser
+50.0
+Emmerthal¹
+49.9
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG, DE,
+Induboden GmbH, DE, Düsseldorf2
+100.0
+E.ON Värme Timrå AB, SE, Sundsvall¹
+90.9
+EDT Energie Werder GmbH, DE, Werder (Havel)²
+100.0
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+100.0
+Gemeinschaftskernkraftwerk Grohnde Management GmbH,
+DE, Emmerthal²
+Improbed AB, SE, Malmö²
+100.0
+83.2
+Inadale Wind Farm, LLC, US, Wilmington¹
+100.0
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+75.0
+100.0
+Economy Power Limited, GB, Coventry¹
+75.0
+25.0
+80.0
+33.3
+100.0
+50.0
+100.0
+25.1
+50.0
+Kernkraftwerk Gundremmingen GmbH, DE, Gundremmingen5
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+25.0
+50.0
+66.7
+100.0
+100.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+216
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+Intelligent Maintenance Systems Limited, GB, Milton Keynes6
+100.0
+100.0
+100.0
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen6
+GOLLIPP Bioerdgas GmbH & Co KG, DE, Gollhofen
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+Grandview Wind Farm III, LLC, US, Wilmington²
+Grandview Wind Farm IV, LLC, US, Wilmington²
+Grandview Wind Farm V, LLC, US, Wilmington²
+Grandview Wind Farm, LLC, US, Wilmington4
+Green Sky Energy Limited, GB, Coventry¹
+greenXmoney.com GmbH, DE, Neu-Ulm6
+GrönGas Partner A/S, DK, Hirtshals6
+48.0
+Iron Horse Battery Storage, LLC, US, Wilmington²
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+100.0
+49.0
+100.0
+50.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+40.0
+50.0
+Kalmar Energi Holding AB, SE, Kalmar4
+50.0
+100.0
+Kasson Manteca Solar, LLC, US, Wilmington²
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+100.0
+100.0
+EC&R Development, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Energy Marketing, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Ft. Huachuca Solar, LLC, US, Wilmington²
+100.0
+100.0
+EC&R Grandview Holdco, LLC, US, Wilmington²
+100.0
+100.0
+EC&R Investco EPC Mgmt, LLC, US, Wilmington¹
+100.0
+E.ON UK plc, GB, Coventry¹
+100.0
+100.0
+100.0
+100.0
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+EBY Immobilien GmbH & Co. KG, DE, Regensburg²
+100.0
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+EBY Port 1 GmbH, DE, Munich¹
+100.0
+E.ON UK CoGeneration Limited, GB, Coventry¹1
+E.ON UK Directors Limited, GB, Coventry²
+E.ON UK Energy Lincoln Limited, GB, Coventry²
+E.ON UK Energy Markets Limited, GB, Coventry¹
+E.ON UK Energy Services Limited, GB, Coventry²
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+E.ON UK Pension Trustees Limited, GB, Coventry²
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+100.0
+100.0
+EC&R Asset Management, LLC, US, Wilmington¹
+100.0
+EC&R Canada Ltd., CA, Saint John¹
+E.ON Värme Sverige AB, SE, Malmö¹
+EC&R Investco Mgmt II, LLC, US, Wilmington¹
+E.ON UK Property Services Limited, GB, Coventry2
+E.ON US Corporation, US, Wilmington¹
+100.0
+EC&R QSE, LLC, US, Wilmington¹
+100.0
+E.ON US Energy LLC, US, Wilmington¹
+100.0
+EC&R Services, LLC, US, Wilmington¹
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+EC&R Sherman, LLC, US, Wilmington²
+100.0
+100.0
+EC&R Solar Development, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Panther Creek Wind Farm III, LLC, US, Wilmington¹
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+EC&R Investco Mgmt, LLC, US, Wilmington¹
+100.0
+E.ON UK PS Limited, GB, Coventry²
+100.0
+EC&R Magicat Holdco, LLC, US, Wilmington¹
+100.0
+E.ON UK Secretaries Limited, GB, Coventry2
+100.0
+EC&R NA Solar PV, LLC, US, Wilmington¹
+100.0
+E.ON UK Technical Services Limited, GB, Edinburgh²
+100.0
+EC&R O&M, LLC, US, Wilmington¹
+100.0
+100.0
+100.0
+(as of December 31, 2016)
+Kinneil CHP Limited, GB, Coventry²
+LSW Holding GmbH & Co. KG, DE, Wolfsburg5
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+57.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+40.0
+57.0
+Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Weyhe²
+100.0
+100.0
+Netzgesellschaft Syke GmbH, DE, Syke
+49.0
+Luna Lüneburg GmbH, DE, Lüneburg6
+Magicat Holdco, LLC, US, Wilmington5
+49.0
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+50.1
+20.0
+49.0
+New Cogen Sp. z o.o., PL, Warsaw²
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg6
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg6
+Lillo Energy NV, BE, Brussels
+50.0
+Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf²
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE,
+Giesen6
+100.0
+49.0
+Limfjordens Bioenergi ApS, DK, Frederiksberg²
+78.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE,
+Giesen6
+49.0
+Limited Liability Company E.ON IT, RU, Moscow²
+100.0
+London Array Limited, GB, Coventry6
+30.0
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
+Hohen Neuendorf6
+49.0
+57.0
+100.0
+100.0
+Maricopa East Solar PV 2, LLC, US, Wilmington²
+Summary of Financial Highlights and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+217
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Northern Orchard Solar PV, LLC, US, Wilmington²
+Novo Innovations Limited, GB, Coventry²
+100.0
+100.0
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+49.0
+Powergen Serang Limited, GB, Coventry²
+Powergen UK Investments, GB, Coventry¹
+Powergen US Holdings, GB, Coventry¹
+100.0
+Consolidated Financial Statements
+Major Wind Farm, LLC, US, Wilmington²
+Combined Group Management Report
+E.ON Stock
+Maricopa East Solar PV, LLC, US, Wilmington²
+Maricopa Land Holding, LLC, US, Wilmington²
+100.0
+Nord Stream AG, CH, Zug5
+15.5
+100.0
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+100.0
+Northern Orchard Solar PV 2, LLC, US, Wilmington²
+100.0
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11..4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . "This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+Report of the Supervisory Board
+Strategy and Objectives
+Name, location
+Lighting for Staffordshire Limited, GB, Coventry¹
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+MFG Flughafen-Grundstücksverwaltungsgesellschaft mbH &
+Co. Gamma oHG i.L., DE, Grünwald²
+90.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt6
+49.0
+Midlands Electricity Limited, GB, Coventry²
+100.0
+Kommunale Klimaschutzgesellschaft Landkreis Celle
+Mosoni-Duna Menti Szélerőmű Kft., HU, Győr²
+100.0
+gemeinnützige GmbH, DE, Celle6
+25.0
+Munnsville Investco, LLC, US, Wilmington¹
+100.0
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+Munnsville WF Holdco, LLC, US, Wilmington¹
+61.0
+100.0
+KommEnergie GmbH, DE, Eichenau6
+MEON Verwaltungs GmbH, DE, Grünwald²
+Stake (%)
+Name, location
+Stake (%)
+100.0
+Kite Power Systems Limited, GB, Chelmsford
+25.0
+Maricopa West Solar PV 2, LLC, US, Wilmington²
+Matrix Control Solutions Limited, GB, Coventry¹
+100.0
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Győr²
+100.0
+MEON Pensions GmbH & Co. KG, DE, Grünwald 1,8
+100.0
+KommEnergie Erzeugungs GmbH, DE, Eichenau
+57.0
+100.0
+60.0
+gemeinnützige GmbH, DE, Celle
+Munnsville Wind Farm, LLC, US, Wilmington¹
+41.7
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE,
+Bad Münder6
+49.0
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG,
+DE, Grünwald¹
+90.0
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+49.0
+LandE GmbH, DE, Wolfsburg¹
+69.6
+Netzgesellschaft Gehrden mbH, DE, Gehrden6
+49.0
+Landwehr Wassertechnik GmbH, DE, Schöppenstedt²
+100.0
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+49.0
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen
+25.0
+50.0
+34.8
+100.0
+Kraftwerk Burghausen GmbH, DE, Munich¹
+100.0
+Nahwärme Ascha GmbH, DE, Ascha²
+90.0
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+Naranjo Battery, LLC, US, Wilmington²
+100.0
+Kraftwerk Marl GmbH, DE, Munich¹
+100.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+100.0
+Netz- und Windservice (NWS) GmbH, DE, Schwerin²
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven6
+100.0
+Kriegers Flak Offshore Wind I/S, DK, Kalundborg6
+0.0
+Gasag Berliner Gaswerke Aktiengesellschaft, DE, Berlin5
+49.0
+50.0
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+49.0
+50.0
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach
+50.0
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching6
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+100.0
+Gasspeicher Lehrte GmbH, DE, Helmstedt²
+50.0
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+49.0
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen
+49.0
+Energieversorgung Vechelde GmbH & Co KG, DE, Vechelde6
+36.9
+30.0
+100.0
+Forest Creek Investco, Inc., US, Wilmington¹
+100.0
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+50.0
+Forest Creek WF Holdco, LLC, US, Wilmington¹
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+100.0
+Forest Creek Wind Farm, LLC, US, Wilmington¹
+100.0
+50.0
+Fortuna Solar, LLC, US, Wilmington²
+100.0
+Energieversorgung Sehnde GmbH, DE, Sehnde
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE,
+Putzbrunn6
+49.0
+Energy Collection Services Limited, GB, Coventry²
+100.0
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+215
+Name, location
+Combined Group Management Report
+Stake (%)
+Stake (%)
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel6
+50.0
+Hamburg Netz GmbH, DE, Hamburg¹
+74.9
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf¹,8
+Name, location
+100.0
+Strategy and Objectives
+Report of the Supervisory Board
+Gasversorgung im Landkreis Gifhorn GmbH (GLG), DE,
+Wolfsburg¹
+95.0
+Enerjisa Enerji A.Ş., TR, Istanbul4
+50.0
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+100.0
+E.ON Stock
+Gasversorgung Unterfranken Gesellschaft mit beschränkter
+Haftung, DE, Würzburg5
+Ergon Energia S.r.l. in liquidazione, IT, Brescia6
+50.0
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+49.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . "This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+49.0
+100.0
+Florida Solar and Power Group LLC, US, Wilmington²
+100.0
+50.0
+Energie-Agentur Weyhe GmbH, DE, Weyhe
+28.9
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main6
+49.0
+Energie Vorpommern GmbH, DE, Trassenheide
+50.1
+(ews), DE, Bad Segeberg
+100.0
+ewyso GmbH, DE, Essen²
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG
+50.2
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg6
+35.0
+Energie und Wasser Potsdam GmbH, DE, Potsdam
+100.0
+EVU Services GmbH, DE, Neumünster²
+AV Packaging GmbH, DE, Munich¹
+74.7
+ENACO Energieanlagen- und Kommunikationstechnik GmbH,
+DE, Maisach6
+Ergon Overseas Holdings Limited, GB, Coventry¹
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+etatherm GmbH, DE, Potsdam6
+Stake (%)
+100.0
+55.0
+Energieerzeugungswerke Geesthacht GmbH, DE, Geesthacht
+25.5
+Energetika Malenovice, a.s., CZ, Zlín - Malenovice²
+100.0
+EVG Energieversorgung Gemünden GmbH, DE,
+Gemünden am Main6
+49.0
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+46.7
+26.0
+33.4
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
+Wörth am Main6
+28.8
+70.0
+100.0
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau
+69.5
+Fitas Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+90.0
+Energie-Pensions-Management GmbH, DE, Hanover²
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+50.0
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+90.0
+Energieversorgung Pfaffenhofen GmbH & Co. KG, DE,
+Pfaffenhofen²
+100.0
+Flatlands Wind Farm, LLC, US, Wilmington²
+beschränkter Haftung, DE, Halblech6
+Energieversorgung Pfaffenhofen Verwaltungs GmbH, DE,
+Pfaffenhofen²
+100.0
+100.0
+energielösung.bayern GmbH, DE, Regensburg²
+100.0
+Falkenbergs Biogas AB, SE, Malmö²
+65.0
+Energienetz Neufahrn/Eching GmbH & Co. KG, DE,
+Farma Wiatrowa Barzowice Sp. z o.o., PL, Warsaw¹
+FIDELIA Holding LLC, US, Wilmington¹
+100.0
+100.0
+Energienetze Bayern GmbH, DE, Regensburg¹
+100.0
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+Haftung (FFG), DE, Freising
+50.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+Neufahrn bei Freising²
+Hams Hall Management Company Limited, GB, Coventry
+Fifth Standard Solar PV, LLC, US, Wilmington²
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+Åliden Vind AB, SE, Malmö²
+100.0
+100.0
+Amrum-Offshore West GmbH, DE, Düsseldorf¹
+100.0
+100.0
+Anacacho Wind Farm, LLC, US, Wilmington¹
+100.0
+49.0
+ANCO Sp. z o.o., PL, Jarocin²
+100.0
+46.6
+100.0
+50.0
+1. Beteiligungsgesellschaft NG mbH, DE, Quickborn²
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg²
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg²
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide6
+Abfallwirtschaft Schleswig-Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH (AWSH), DE, Elmenhorst
+Abfallwirtschaftsgesellschaft Rendsburg-Eckernförde mbH,
+30.0
+25.0
+Notes
+:agile accelerator limited, GB, Coventry2
+100.0
+agile accelerator GmbH, DE, Düsseldorf²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Holsteiner Wasser GmbH, DE, Neumünster6
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+209
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+(36) List of Shareholdings Pursuant to Section 313 (2) HGB
+100.0
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG, DE,
+49.0
+49.9
+49.0
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co.
+OHG, DE, Neualbenreuth6
+50.0
+Gemeindewerke Uetze GmbH, DE, Uetze6
+49.0
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing6
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+Gemeindewerke Wedemark GmbH, DE, Wedemark6
+49.0
+Hochtemperatur-Kernkraftwerk GmbH (HKG),
+Gemeinsames europäisches Unternehmen, DE, Hamm6
+Gemeindewerke Wietze GmbH, DE, Wietze6
+26.0
+Emmerthal¹
+100.0
+49.0
+Gemeindewerke Leck GmbH, DE, Leck6
+49.0
+100.0
+Högbytorp Kraftvärme AB, SE, Malmö²
+100.0
+HanseGas GmbH, DE, Quickborn²
+100.0
+Havelstrom Zehdenick GmbH, DE, Zehdenick6
+100.0
+66.5
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+HanseWerk Natur GmbH, DE, Hamburg¹
+100.0
+50.0
+Harzwasserwerke GmbH, DE, Hildesheim5
+20.8
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing6
+Gem. Ges. zur Förderung des E.ON Energy Research Center mbH,
+DE, Aachen6
+100.0
+26.2
+100.0
+100.0
+Windenergie Leinetal 2 Verwaltungs GmbH, DE, Freden²
+Windenergie Leinetal GmbH & Co. KG, DE, Freden
+40.0
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+100.0
+50.2
+Vici Wind Farm, LLC, US, Wilmington²
+100.0
+100.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+49.0
+49.0
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+36.8
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel6
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Waldbüttelbrunn
+36.8
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG,
+DE, Brandenburg an der Havel5
+100.0
+Venado Wind Farm, LLC, US, Wilmington²
+50.0
+strotög GmbH Strom für Töging, DE, Töging am Inn6
+100.0
+VEBACOM Holdings LLC, US, Wilmington²
+49.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Unterschleißheim
+Notes
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+Wildcat Wind Farm II, LLC, US, Wilmington²
+Wildcat Wind Farm III, LLC, US, Wilmington²
+220
+Name, location
+Visioncash, GB, Coventry¹
+100.0
+Vici Wind Farm III, LLC, US, Wilmington²
+100.0
+Vici Wind Farm II, LLC, US, Wilmington²
+50.2
+100.0
+50.0
+werkkraft GmbH, DE, Unterschleißheim6
+West of the Pecos Solar, LLC, US, Wilmington²
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+100.0
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Győr²
+20.0
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein6
+73.4
+Stake (%)
+Name, location
+Stake (%)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+Versorgungskasse Energie (VVaG), DE, Hanover¹
+Windenergie Osterburg Verwaltungs GmbH, DE, Osterburg
+(Altmark)²
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach6
+Yorkshire Windpower Limited, GB, Coventry
+22.2
+50.0
+70.0
+Weiẞmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+93.5
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava5
+Zenit-SIS GmbH, DE, Düsseldorf²
+49.0
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). .³Joint operations pursuant to IFRS 11..4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+WEA Schönerlinde GbR mbH Kiepsch & Bosse &
+Beteiligungsges. e.disnatur mbH, DE, Berlin²
+Strategy and Objectives
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2016)
+Name, location
+Consolidated investment funds
+ASF, DE, Düsseldorf¹
+HANSEFONDS, DE, Düsseldorf¹
+OB 2, DE, Düsseldorf¹
+OB 4, DE, Düsseldorf¹
+OB 5, DE, Düsseldorf¹
+VKE-FONDS, DE, Düsseldorf¹
+Name, location
+Other companies in which share investments are held
+Stake (%)
+Combined Group Management Report
+49.0
+100.0
+WIT Ranch Wind Farm, LLC, US, Wilmington²
+24.9
+50.1
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE,
+Vienenburg6
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg
+(Altmark)²
+100.0
+49.0
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim6
+50.0
+VEBA Electronics LLC, US, Wilmington¹
+100.0
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+60.0
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+Kaiser-Wilhelm-Koog²
+80.0
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Müden/Aller6
+50.0
+66.7
+Windpark Naundorf OHG, DE, Potsdam²
+49.8
+Wasserwerk Gifhorn GmbH & Co KG, DE, Gifhorn6
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr
+GmbH, DE, Grafenwöhr6
+77.8
+Windpark Mutzschen OHG, DE, Potsdam²
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH,
+DE, Königs Wusterhausen²
+49.8
+83.3
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+49.0
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+23.2
+Windkraft Gerolsbach GmbH & Co. KG, DE, Gerolsbach6
+Wasserwerk Gifhorn Beteiligungs-GmbH, DE, Gifhorn6
+49.0
+100.0
+Valverde Wind Farm, LLC, US, Wilmington²
+Stadtwerke Wismar GmbH, DE, Wismar
+100.0
+SVO Vertrieb GmbH, DE, Celle¹
+41.0
+Stadtwerke Vilshofen GmbH, DE, Vilshofen
+50.1
+SVO Holding GmbH, DE, Celle¹
+49.0
+Stadtwerke Tornesch GmbH, DE, Tornesch6
+25.1
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+37.8
+49.0
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+SVH Stromversorgung Haar GmbH, DE, Haar
+Equity
+€ in millions
+39.0
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten
+100.0
+SüdWasser GmbH, DE, Erlangen²
+49.0
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk6
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+50.0
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg
+25.1
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel6
+Strom Germering GmbH, DE, Germering²
+23.4
+Thermondo GmbH, DE, Berlin6
+100.0
+100.0
+The Power Generation Company Limited, GB, Coventry²
+100.0
+100.0
+Tech Park Solar, LLC, US, Wilmington¹
+100.0
+Stockton Solar II, LLC, US, Wilmington²
+Stella Wind Farm, LLC, US, Wilmington²
+Stockton Solar I, LLC, US, Wilmington²
+25.0
+90.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely6
+100.0
+Stella Wind Farm II, LLC, US, Wilmington²
+55.0
+Szombathelyi Erőmű Zrt., HU, Győr²
+49.4
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+66.5
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+26.0
+49.0
+SWS Energie GmbH, DE, Stralsund5
+22.7
+219
+100.0
+(as of December 31, 2016)
+CEO Letter
+49.0
+Stromnetzgesellschaft Bad Salzdetfurth - Diekholzen mbH &
+Co. KG, DE, Bad Salzdetfurth6
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen
+22.2
+49.0
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+Umwelt- und Wärmeenergiegesellschaft Strasburg mbH, DE,
+Fürstenwalde/Spree²
+100.0
+49.0
+Union Grid s.r.o., CZ, Prague
+34.0
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf6
+Stromnetze Peiner Land GmbH, DE, Ilsede
+49.0
+46.7
+Stromversorgung Angermünde GmbH, DE, Angermünde
+49.0
+Uranit GmbH, DE, Jülich4
+50.0
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter
+Haftung, DE, Ruhpolding²
+Utility Debt Services Limited, GB, Coventry²
+100.0
+100.0
+Valencia Solar, LLC, US, Tucson¹
+100.0
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim6
+Uniper SE, DE, Düsseldorf5
+48.0
+Überlandwerk Leinetal GmbH, DE, Gronau6
+100.0
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Three Rocks Solar, LLC, US, Wilmington²
+100.0
+Strombewegung GmbH, DE, Düsseldorf²
+100.0
+Tierra Blanca Wind Farm, LLC, US, Wilmington²
+100.0
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach²
+100.0
+Tipton Wind, LLC, US, Wilmington²
+100.0
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach²
+100.0
+Tishman Speyer Real Estate Venture VI Parallel (ON), L.P., US,
+New York²
+99.0
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf.6
+49.0
+TPG Wind Limited, GB, Coventry
+50.0
+TXU Europe (AHST) Limited, GB, Coventry²
+100.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Munich²
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+221
+Stromnetz Würmtal GmbH & Co. KG, DE, Munich²
+100.0
+Audit and Risk Committee
+Dr. Theo Siegert, Chairman
+Fred Schulz, Deputy Chairman
+Thies Hansen
+Dr. Karl-Ludwig Kley
+(since June 8, 2016)
+Werner Wenning
+(until June 8, 2016)
+Finance and Investment Committee
+Dr. Karl-Ludwig Kley, Chairman
+(since June 8, 2016)
+Werner Wenning, Chairman
+(until June 8, 2016)
+Eugen-Gheorghe Luha, Deputy Chairman
+Clive Broutta
+Dr. Karen de Segundo
+Nomination Committee
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Andreas Scheidt, Deputy Chairman
+Fred Schulz
+Dr. Karl-Ludwig Kley, Chairman
+Werner Wenning, Chairman
+(until June 8, 2016)
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Dr. Karen de Segundo
+Unless otherwise indicated, information is as of December 31, 2016, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→
+→
+223
+Notes
+Management Board (and Information on Other Directorships)
+Wildberger
+Sen
+(since June 8, 2016)
+224
+(until June 8, 2016)
+Dr. Karl-Ludwig Kley, Chairman
+(since June 8, 2016)
+→ Západoslovenská distribučná a.s.
+→ Západoslovenská energetika a.s.
+Dr. Karen de Segundo
+Attorney
+→ British American Tobacco plc (until April 27, 2016)
+→ Pöyry Oyj (until March 10, 2016)
+Dr. Theo Siegert
+Managing Partner, de Haen-Carstanjen & Söhne
+→ Henkel AG & Co. KGaA
+→ Merck KGaA
+→ DKSH Holding Ltd.
+→ E. Merck KG
+Werner Wenning, Chairman
+Elisabeth Wallbaum
+E.ON Group Works Council
+Ewald Woste (since July 19, 2016)
+Management Consultant
+→ Thüringer Energie AG (Chairman)
+→ GASAG Berliner Gaswerke Aktiengesellschaft
+→ Energie Steiermark AG
+→ TEN Thüringer Energienetze GmbH & Co. KG
+Albert Zettl (since July 19, 2016)
+Chairman of the E.ON Group Works Council and Deputy
+Chairman of the SE Works Council of E.ON SE
+Chairman of the Division Works Council of Bayernwerk AG and
+Chairman of the Eastern Bavaria Works Council of Bayernwerk AG
+→ Bayernwerk AG
+→ Versorgungskasse Energie VVaG
+Supervisory Board Committees
+Executive Committee
+Expert, SE Works Council of E.ON SE and
+Dr. Johannes Teyssen
+Born in 1959 in Hildesheim, Germany
+Chairman of the Management Board and CEO since 2010
+Member of the Management Board since 2004
+Strategy and Corporate Development, Turkey, HR, Health/
+Safety and Environment, Sustainability, Political Affairs and
+Communications, Legal and Compliance, Corporate Audit,
+Reorganization Project
+Dr. Karsten Wildberger
+Born in 1969 in Gießen, Germany
+Member of the Management Board since April 1, 2016
+Regional Sales and Customer Solutions, Distributed Generation,
+Energy Management, Marketing, Digital Transformation,
+Innovation, IT
+→ E.ON Business Services GmbH¹
+(since January 1, 2017, Chairman since January 6, 2017)
+→ E.ON Sverige AB² (since July 1, 2016)
+Unless otherwise indicated, information is as of December 31, 2016, or as of the date on which membership in the E.ON Management Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→
+→
+¹Exempted E.ON Group directorship. 2Other E.ON Group directorship.
+Summary of
+Financial Highlights
+and Explanations
+→ Uniper SE (since April 14, 2016)
+Summary of Financial Highlights and Explanations
+Explanatory Report of the Management Board
+on the Disclosures Pursuant to Section 289,
+Paragraph 4, and Section 315, Paragraph 4,
+as well as Section 289, Paragraph 5, of the
+German Commercial Code
+The Management Board has read and discussed the disclo-
+sures pursuant to Section 289, Paragraph 4 and Section 315,
+Paragraph 4 of the German Commercial Code contained in
+the Combined Group Management Report for the year ended
+December 31, 2016, and issues the following declaration
+regarding these disclosures:
+The disclosures on takeover barriers contained in the Company's
+Combined Group Management Report are correct and conform
+with the Management Board's knowledge. The Management
+Board therefore confines itself to the following statements:
+To the extent that the Company has agreed to settlement pay-
+ments for Management Board members in the case of a change
+of control, the purpose of such agreements is to preserve the
+independence of Management Board members.
+The Management Board also read and discussed the disclosures
+in the Combined Group Management Report pursuant to Section
+289, Paragraph 5, of the German Commercial Code. The disclo-
+sures contained in the Combined Group Management Report on
+the key features of our internal control and risk management sys-
+tem for accounting processes are complete and comprehensive.
+Internal controls are an integral part of our accounting processes.
+Guidelines define uniform financial-reporting documentation
+requirements and procedures for the entire E.ON Group. We
+believe that compliance with these rules provides sufficient
+certainty to prevent error or fraud from resulting in material mis-
+representations in the Consolidated Financial Statements, the
+Combined Group Management Report, and the Interim Reports.
+Essen, March 13, 2017
+Birnbaum
+Teyssen
+Management Board
+E.ON SE
+Stake (%)
+228
+Member of the Management Board since January 1, 2017
+Born in 1975 in Essen, Germany
+Dr. Marc Spieker
+→ Deutsche Bank AG
+→ Uniper SE
+Dr.-Ing. Leonhard Birnbaum
+Born in 1967 in Ludwigshafen, Germany
+Member of the Management Board since 2013
+Regional Energy Networks, Renewables, Regulation Policy,
+Procurement and Real Estate Management, Consulting,
+PreussenElektra
+→ E.ON Business Services GmbH¹
+(Chairman, until December 31, 2016)
+→ E.ON Czech Holding AG¹ (Chairman)
+→ Georgsmarienhütte Holding GmbH
+→ E.ON Sverige AB² (Chairman)
+→ E.ON Hungária Zrt.2 (Chairman)
+Dr. Bernhard Reutersberg
+Born in 1954 in Düsseldorf, Germany
+Member of the Management Board since 2010
+(until June 30, 2016)
+→ Uniper SE (Chairman)
+→ E.ON Sverige AB
+→ PJSC Unipro (Chairman)
+→ Uniper Benelux N.V.
+→ Uniper France S.A.S. (Chairman, until January 4, 2016)
+Michael Sen
+Born in 1968 in Korschenbroich, Germany
+Member of the Management Board since 2015
+Finance, Mergers and Acquisitions, Risk Management,
+Accounting and Controlling, Investor Relations, Tax, Uniper
+→ Uniper SE (until December 31, 2016)
+Member of the SE Works Council of E.ON SE
+Chairperson of the Works Council of Západoslovenská
+energetika a.s. (ZSE)
+Beyond the disclosures contained in the Combined Group
+Management Report (and legal restrictions such as the exclusion
+of voting rights pursuant to Section 136 of the German Stock
+Corporation Act), the Management Board is not aware of any
+restrictions regarding voting rights or the transfer of shares.
+The Company is not aware of shareholdings in the Company's
+share capital exceeding ten out of one hundred voting rights, so
+that information on such shareholdings is not necessary. There
+is no need to describe shares with special control rights (since no
+such shares have been issued) or special restrictions on the
+control rights of employees' shareholdings (since employees who
+hold shares in the Company's share capital exercise their control
+rights directly, just like other shareholders).
+→ Szczecińska Energetyka Cieplna Sp. z o.o.
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing'
+19.9
+7.2
+0.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11..4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Supervisory Board (and Information on Other Directorships)
+222
+Dr. Karl-Ludwig Kley (since June 8, 2016)
+Chairman of the E.ON SE Supervisory Board (since June 8, 2016)
+→ Bertelsmann Management SE (until May 9, 2016)
+→ Bertelsmann SE & Co. KGaA (until May 9, 2016)
+0.0
+→ BMW AG
+→ Verizon Communications Inc.
+Werner Wenning (until June 8, 2016)
+Chairman of the E.ON SE Supervisory Board (until June 8, 2016)
+Chairman of the Bayer AG Supervisory Board
+→ Bayer AG (Chairman)
+→ Henkel Management AG
+→ Siemens AG
+→ Henkel AG & Co. KGaA
+Prof. Dr. Ulrich Lehner
+Member of the Shareholders' Committee of
+Henkel AG & Co. KGaA
+Deputy Chairman of the E.ON SE Supervisory Board
+→ Deutsche Telekom AG (Chairman)
+→ Deutsche Lufthansa AG
+68.4
+19.9
+infra fürth gmbh, DE, Fürth
+100.0
+Silvia Šmátralová (since July 19, 2016)
+100.0
+100.0
+100.0
+100.0
+€ in millions
+e-werk Sachsenwald GmbH, DE, Reinbek?
+16.0
+27.2
+3.8
+Herzo Werke GmbH, DE, Herzogenaurach
+19.9
+12.8
+0.0
+HEW HofEnergie+Wasser GmbH, DE, Hof
+19.9
+22.1
+0.0
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg'
+10.0
+30.1
+0.0
+Stadtwerke Wertheim GmbH, DE, Wertheim?
+10.0
+20.5
+0.0
+→ ThyssenKrupp AG (Chairman)
+→ Porsche Automobil Holding SE
+Earnings
+Andreas Scheidt
+→ Telecom Italia S.p.A.
+Eugen-Gheorghe Luha
+Chairman of Romanian Federation of Gas Unions at Gas România
+Chairman of Romanian employee representatives
+René Obermann (until June 8, 2016)
+Partner, Warburg Pincus LLC
+→ ThyssenKrupp AG
+→ CompuGroup Medical SE
+→ Spotify Technology S.A. (until July 31, 2016)
+Andreas Schmitz (since July 19, 2016)
+Chairman of the Supervisory Board of
+HSBC Trinkaus & Burkhardt AG
+→ Börse Düsseldorf AG (Chairman)
+→ HSBC Trinkaus & Burkhardt AG (Chairman)
+→ KfW
+→ Scheidt & Bachmann GmbH (Chairman)
+→ Monzo Bank Ltd. (Chairperson)
+→
+Unless otherwise indicated, information is as of December 31, 2016, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Chairman of the General Works Council of E.DIS AG
+First Deputy Chairman of the E.ON Group Works Council
+Chairman of the SE Works Council of E.ON SE
+→ Henkel AG & Co. KGaA
+→ E.DIS AG
+Spieker
+→ International Consolidated Airlines Group S.A.
+Fred Schulz
+Baroness Denise Kingsmill CBE
+Attorney at the Supreme Court
+Member of the House of Lords
+Deputy Chairman of the E.ON SE Supervisory Board
+Inditex S.A. (since July 2016)
+Director of Utility/Waste Management Section
+Clive Broutta
+Full-time Representative of the General, Municipal, Boilermakers,
+and Allied Trade Union (GMB)
+Erich Clementi (since July 19, 2016)
+Senior Vice President, IBM Global Markets and
+Chairman IBM Europe
+Tibor Gila (since July 19, 2016)
+Chairman of the Combined Works Council of E.ON Hungária Zrt.
+Deputy Chairman of the SE Works Council of E.ON SE
+Chairman of the Works Council of E.ON Észak-dunántúli
+Áramhálózati Zrt.
+→ E.ON Észak-dunántúli Áramhálózati Zrt. (since May 1, 2016)
+Thies Hansen
+Chairman of the Combined Works Council, HanseWerk AG
+→HanseWerk AG
+→ Uniper SE (since April 14, 2016)
+→ Hamburg Netz GmbH
+→ Svensk Dörrinvest AB (Chairperson)
+→ ASSA ABLOY Mobile Services AB (Chairperson)
+→ Schleswig-Holstein Netz AG
+→ ASSA ABLOY Kredit AB (Chairperson)
+→ ASSA ABLOY IP AB (Chairperson)
+→ ASSA ABLOY Identification Technology Group AB
+(Chairperson, until May 2, 2016)
+Member of National Board, Unified Service Sector Union, ver.di,
+→ ASSA ABLOY Entrance Systems AB (Chairperson)
+→ ASSA ABLOY East Europe AB (Chairperson)
+→ ASSA ABLOY Asia Holding AB (Chairperson)
+Carolina Dybeck Happe (since June 8, 2016)
+→ ASSA ABLOY Financial Services AB (Chairperson)
+→ ASSA ABLOY Finans AB (Chairperson)
+Chief Financial Officer of ASSA ABLOY AB
+Cash provided by operating activities of continuing operations
+4,280
+12,008
+Financial liabilities
+4,007
+4,673
+3,883
+2,788
+3,792
+28,523
+26,376
+27,639
+7,325
+140,426
+132,330
+113,693
+63,699
+Other liabilities and other
+Total assets and liabilities
+Cash flow, investments and financial ratios
+8,808
+4,120
+23,487
+125,690
+14,489
+4,049
+39,287
+Provisions
+28,601
+28,153
+31,376
+30,655
+19,618
+Financial liabilities
+21,937
+18,051
+15,784
+14,954
+10,435
+Other liabilities and other
+16,975
+16,175
+15,563
+9,234
+Current liabilities
+36,579
+32,513
+35,642
+33,444
+23,125
+Provisions
+4,353
+6,260
+Cash provided by operating activities of continuing operations as a
+percentage of sales
+4,191
+7.8
+Stock and E.ON SE long-term ratings
+Earnings per share attributable to shareholders of E.ON SE (€)
+1.15
+1.1
+-1.64
+-3.6
+-4.33
+Equity per share (€)
+18.33
+17.68
+9.8
+12.72
+-0.5
+Twelve-month high per share (€)
+19.52
+14.71
+15.46
+12.98
+8.49
+Twelve-month low per share? (€)
+13.8
+61,172
+11.94
+8.42
+5.6
+5.2
+6.7
+2,961
+Cash-effective investments
+6,997
+7,992
+4,637
+3,227
+3,169
+Equity ratio (%)
+28
+28
+21
+17
+2
+Economic net debt (at year-end)
+35,845
+32,218
+33,394
+27,714
+26,320
+Debt factor5
+3.3
+3.5
+4.0
+3.7
+5.3
+6,354
+63,335
+Value measures
+65,027
+4,939
+Adjusted EBIT³
+7,012
+5,642
+4,695
+3,563
+3,112
+Net income/Net loss
+2,613
+2,459
+-3,130
+5,844
+-6,377
+Net income/Net loss attributable to shareholders of E.ON SE
+2,189
+2,091
+-3,160
+-6,999
+-8,450
+Adjusted net income³
+4,170
+2,126
+1,646
+1,076
+-16,007
+904
+8,376
+10,771
+12.56
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+229
+Summary of Financial Highlights 1,2
+€ in millions
+9,191
+Sales and earnings
+Adjusted EBITDA³
+2012
+2013
+2014
+2015
+2016
+132,093
+119,615
+113,095
+42,656
+38,173
+Sales
+ROACE/effective 2015 ROCE (%)
+Pretax cost of capital (%)
+Value added4
+140,426
+132,330
+125,690
+113,693
+63,699
+Equity
+38,820
+36,638
+26,713
+19,077
+1,287
+Total assets
+Capital stock
+2,001
+2,001
+2,001
+2,001
+Minority interests without controlling influence
+3,862
+2,915
+2,128
+2,648
+2,896
+Non-current liabilities
+2,001
+17,403
+40,081
+42,625
+11.1
+9.2
+8.6
+10.9
+10.4
+7.7
+7.5
+7.4
+6.7
+5.8
+2,139
+1,031
+640
+1,217
+1,370
+Asset and capital structure
+Non-current assets
+Current assets
+96,563
+95,580
+83,065
+73,612
+46,296
+43,863
+36,750
+63,179
+6.28
+Calculation and presentation of the cash a company has generated or consumed during
+a reporting period as a result of its operating, investing, and financing activities.
+Year-end closing price per share 7.8 (€)
+Profit at Risk ("PaR")
+Risk measure that indicates, with a certain degree of confidence (for example, 95 percent),
+that changes in market prices will not cause a profit margin to fall below expectations during
+the holding period, depending on market liquidity. For E.ON's business, the main market
+prices are those for power, gas, coal, and carbon.
+Purchase price allocation
+In a business combination accounted for as a purchase, the values at which the acquired
+company's assets and liabilities are recorded in the acquiring company's balance sheet.
+Rating
+Standardized performance categories for an issuer's short- and long-term debt instruments
+based on the probability of interest payment and full repayment. Ratings provide investors
+and creditors with the transparency they need to compare the default risk of various financial
+investments.
+234
+CEO Letter
+Report of the Supervisory Board
+Income and expenses that are unusual or infrequent, such as book gains or book losses from
+significant disposals as well as restructuring expenses (see adjusted EBIT).
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Return on equity
+The return earned on an equity investment (in this case, E.ON stock), calculated after
+corporate taxes but before an investor's individual income taxes.
+ROACE
+Acronym for return on average capital employed. A key indicator for monitoring the perfor-
+mance of E.ON's business, ROACE is the ratio between adjusted EBIT and average capital
+employed. Average capital employed represents the average interest-bearing capital tied
+up in the E.ON Group.
+ROCE
+Acronym for return on capital employed. ROCE is the ratio between adjusted EBIT and
+capital employed. Capital employed represents the interest-bearing capital tied up in the
+E.ON Group.
+Syndicated line of credit
+Strategy and Objectives
+Other non-operating earnings
+The right, not the obligation, to buy or sell an underlying asset (such as a security or currency)
+at a specific date at a predetermined price from or to a counterparty or seller. Buy options
+are referred to as calls, sell options as puts.
+Option
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Economic net debt
+Key figure that supplements net financial position with pension obligations and asset-
+retirement obligations. In the case of material provisions affected by negative real interest
+rates, we use the actual amount of the obligation instead of the balance-sheet figure to
+calculate our economic net debt.
+Equity method
+Method for valuing shareholdings in associated companies whose assets and liabilities are
+not fully consolidated. The proportional share of the company's annual net income (or loss)
+is reflected in the shareholding's book value. This change is usually shown in the owning
+company's income statement.
+Fair value
+The price at which assets, debts, and derivatives pass from a willing seller to a willing
+buyer, each having access to all the relevant facts and acting freely.
+Financial derivatives
+Contractual agreement based on an underlying value (reference interest rate, securities
+prices, commodity prices) and a nominal amount (foreign currency amount, a certain number
+of stock shares).
+Goodwill
+The value of a subsidiary as disclosed in the parent company's consolidated financial state-
+ments resulting from the consolidation of capital (after the elimination of hidden reserves
+and liabilities). It is calculated by offsetting the carrying amount of the parent company's
+investment in the subsidiary against the parent company's portion of the subsidiary's equity.
+Impairment test
+Periodic comparison of an asset's book value with its fair value. A company must record an
+impairment charge if it determines that an asset's fair value has fallen below its book value.
+Goodwill, for example, is tested for impairment on at least an annual basis.
+233
+Glossary of Financial Terms
+International Financial Reporting Standards ("IFRS")
+Under regulations passed by the European Parliament and European Council, capital-market-
+oriented companies in the EU must apply IFRS.
+Investments
+Cash-effective investments shown in the Consolidated Statements of Cash Flows.
+Net financial position
+Difference between total financial assets (cash and non-current securities) and total financial
+liabilities (debts to financial institutions, third parties, and associated companies, including
+effects from currency translation).
+Credit facility extended by two or more banks that is good for a stated period of time.
+Combined Group Management Report
+Value added
+Value at Risk ("VaR")
+www.fsc.org
+MIX
+Paper from
+responsible sources
+FSC® C004599
+This Annual Report was printed on paper produced from fiber that comes from
+a responsibly managed forest certified by the Forest Stewardship Council.
+236
+Financial Calendar
+May 9, 2017
+May 10, 2017
+August 9, 2017
+November 8, 2017
+FSC
+Interim Report: January – March 2017
+2017 Annual Shareholders Meeting
+Interim Report: January – June 2017
+Interim Report: January – September 2017
+May 7, 2018
+May 8, 2018
+August 8, 2018
+November 14, 2018
+Release of the 2017 Annual Report
+Interim Report: January - March 2018
+2018 Annual Shareholders Meeting
+Interim Report: January - June 2018
+Interim Report: January - September 2018
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+T +49 201-184-00
+info@eon.com
+eon.com
+March 14, 2018
+print production
+natureOffice.com | DE-197-558016
+carbon neutral
+Risk measure that indicates the potential loss that a portfolio of investments will not exceed
+with a certain degree of probability (for example, 99 percent) over a certain period of time
+(for example, one day). Due to the correlation of individual transactions, the risk faced by a
+portfolio is lower than the sum of the risks of the individual investments it contains.
+Working capital
+The difference between a company's current operating assets and current operating liabilities.
+235
+Further information
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+T +49 (0)201-184-0
+info@eon.com
+6.04
+Journalists
+T +49 (0)201-184-4236
+presse@eon.com
+Analysts and shareholders
+T +49 (0)201-184-2806
+investorrelations@eon.com
+Bond investors
+T +49 (0)201-184-6526
+creditorrelations@eon.com
+Only the German version of this Annual Report is legally binding.
+Production, Typesetting & Printing:
+Jung Produktion, Düsseldorf
+Picture Credit:
+Foto Merck KGaA (page 6)
+Key measure of E.ON's financial performance based on residual wealth calculated by
+deducting the cost of capital (debt and equity) from operating profit. It is equivalent
+to the return spread (ROACE minus the cost of capital) multiplied by capital employed,
+which represents the average interest-bearing capital tied up in the E.ON Group.
+Strategy and Objectives
+eon.com
+Report of the Supervisory Board
+A3
+A3
+Baal
+Baal
+Standard & Poor's
+A-
+A-
+A-
+BBB+
+A3
+BBB+
+Employees at year-end
+72,083
+61,327
+58,811
+43,162
+43,138
+¹Starting in 2013, adjusted for discontinued operations and for the application of IFRS 10 and 11 and IAS 32. - 2Line items from the Consolidated Statements of Income for 2016 and 2015 were
+adjusted to exclude Uniper; they include Uniper prior to 2015. Line items from the Consolidated Balance Sheets for 2016 were adjusted to exclude Uniper; they include Uniper prior to 2016.
+3Adjusted for non-operating effects. 4As of the balance-sheet date. 5Ratio between economic net debt and adjusted EBITDA; 2015 not adjusted for Uniper.. "Attributable to shareholders of E.ON SE.
+Xetra, 2015 and 2016 were adjusted for the Uniper spinoff. At the end of December. For the respective financial year; the 2016 figure is management's proposed dividend.. 10 Based on shares
+outstanding.
+Glossary of Financial Terms
+Actuarial gains and losses
+Employees
+Moody's
+13.1
+17.4
+E.ON Stock
+14.09
+13.42
+14.2
+7.87
+6.70
+Dividend per share⁹ (€)
+1.1
+0.6
+0.5
+0.5
+0.21
+Dividend payout
+2,097
+1,145
+966
+976
+410
+26.9
+25.6
+27.4
+The actuarial calculation of provisions for pensions is based on projections of a number of
+variables, such as projected future salaries and pensions. An actuarial gain or loss is recorded
+when the actual numbers turn out to be different from the projections.
+Adjusted EBIT
+Market capitalization 8, 10 (€ in billions)
+Adjusted EBITDA
+Consolidation
+Accounting approach in which a parent company and its affiliates are presented as if they
+formed a single legal entity. All intracompany income and expenses, intracompany accounts
+payable and receivable, and other intracompany transactions are offset against each other.
+Share investments in affiliates are offset against their capital stock, as are all intracompany
+credits and debts, since such rights and obligations do not exist within a single legal entity.
+The adding together and consolidation of the remaining items in the annual financial state-
+ments yields the consolidated balance sheets and the consolidated statements of income.
+231
+Glossary of Financial Terms
+Contractual trust arrangement ("CTA")
+Model for financing pension obligations under which company assets are converted to
+assets of a pension plan administered by an independent trust that is legally separate
+from the company.
+Controllable costs
+Our key figure for monitoring operational costs that management can meaningfully influence:
+the controllable portions of the cost of materials (in particular, maintenance costs and the
+costs of goods and services), certain portions of other operating income and expenses, and
+most personnel costs.
+Cost of capital
+Weighted average of the costs of debt and equity financing (weighted-average cost of
+capital: "WACC"). The cost of equity is the return expected by an investor in a given stock.
+The cost of debt is based on the cost of corporate debt and bonds. The interest on corporate
+debt is tax-deductible (referred to as the tax shield on corporate debt).
+A credit derivative used to hedge the default risk on loans, bonds, and other debt instruments.
+Debt factor
+Ratio between economic net debt and adjusted EBITDA. Serves as a metric for managing
+E.ON's capital structure.
+Debt issuance program
+Contractual framework and standard documentation for the issuance of bonds.
+Discontinued operations
+Businesses or parts of a business that are planned for divestment or have already been
+divested. They are subject to special disclosure rules.
+232
+Adjusted earnings before interest and taxes. The EBIT figure used by E.ON is derived from
+income/loss from continuing operations before interest income and income taxes and is
+adjusted to exclude material non-operating income and expenses (see Other non-operating
+earnings). It is our key earnings figure for purposes of internal management control and as
+an indicator of our businesses' long-term earnings power.
+CEO Letter
+Unsecured, short-term debt instruments issued by commercial firms and financial institutions.
+CP is usually quoted on a discounted basis, with repayment at par value.
+Commercial paper ("CP")
+Credit default swap ("CDS")
+Cash provided by operating activities
+Adjusted net income
+Cash provided by, or used for, operating activities of continuing operations.
+An earnings figure after interest income, income taxes, and minority interests that has been
+adjusted to exclude certain extraordinary effects. The adjustments include effects from
+the marking to market of derivatives, book gains and book losses on disposals, restructuring
+expenses, and other non-operating income and expenses of a non-recurring or rare nature
+(after taxes and non-controlling interests). Adjusted net income also excludes income/loss
+from discontinued operations, net.
+Beta factor
+Indicator of a stock's relative risk. A beta coefficient of more than one indicates that a stock
+has a higher risk than the overall market; a beta coefficient of less than one indicates that it
+has a lower risk.
+Bond
+230
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Debt instrument that gives the holder the right to repayment of the bond's face value plus
+an interest payment. Bonds are issued by public entities, credit institutions, and companies
+and are sold through banks. They are a form of medium- and long-term debt financing.
+Combined Group Management Report
+Cash flow statement
+Operating cash flow before interest and taxes divided by adjusted EBITDA. It indicates
+whether our operating earnings are generating enough liquidity.
+Strategy and Objectives
+Cash-conversion rate
+The aggregate face value of all shares of stock issued by a company; entered as a liability
+in the company's balance sheet.
+Earnings before interest, taxes, depreciation, and amortization. It equals the EBIT figure
+used by E.ON before depreciation and amortization.
+Represents the interest-bearing capital tied up in the E.ON Group. It is equal to a segment's
+non-current and current operating assets less the amount of non-interest-bearing available
+capital. Other equity interests are included at their acquisition cost, not their fair value.
+Capital employed
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Capital stock
+Italy's growth remained tepid. Economic expansion in Germany's
+neighbors to the East was weaker than in the prior year. For
+example, the Czech Republic's GDP grew by 2.4 percent, Hungary's
+by 1.7 percent.
+The euro zone continued its monetary and fiscal policies of recent
+years. Nevertheless, there was only a moderate improvement
+in domestic demand, which was driven by private consumption.
+Thanks to this robust domestic demand, Germany's gross domes-
+tic product ("GDP") growth was barely dampened by the weak
+global economic environment. Demand was supported by a solid
+labor market and favorable monetary policies.
+The U.S. economy was on a stable growth path in 2016, partic-
+ularly in the second half of the year. Growth was supported by
+private consumption and private investment, which were bolstered
+by a labor market almost at full employment. China's economic
+growth rate declined further in 2016, which the OECD ascribes
+to the fact that the country's growth drivers have shifted from
+investment to consumption and services.
+Global economic growth was again weak-3.1 percent, according
+to an OECD estimate-in 2016. The OECD noted a reduction in
+private and public investment activity worldwide.
+Macroeconomic Environment
+Macroeconomic and Industry Environment
+26
+Business Report
+Our innovation activities include partnering with universities
+and research institutes to conduct research projects in a variety
+of areas. Our flagship partnership is with the E.ON Energy
+Research Center ("ERC") at RWTH Aachen University in Germany.
+In 2016 we decided to continue this successful partnership
+and therefore extended our agreement with the university for
+another five years. The main purpose of the partnership is to
+study ways to expand the horizons of energy conservation and
+sustainable energy and to draw on this research to develop
+new offerings and solutions for customers. The ERC's research
+focuses on renewables, technologically advanced electricity
+networks, and efficient technology for buildings.
+store surplus wind and solar power, providing a source of reserve
+power. This will enable the participants in the trial to disconnect
+themselves from the grid for certain periods of time. The trial is
+expected to start in the first half of 2017 and last three years.
+Distribution Networks
+As part of our effort to meet the challenges of a low-carbon,
+sustainable energy system, we selected Simris, a small commu-
+nity in southeast Sweden, to test a small offgrid energy system.
+One business and 160 households will take part in the trial and
+use energy from local renewable sources. Simris already has
+a wind farm and solar panels. A battery will now be installed to
+University Support
+Sweden
+Energy Policy and Regulatory Environment
+International
+The Paris Agreement on climate protection took effect on
+November 4, 2016. It was ratified by 55 UN member states that
+together account for at least 55 percent of global carbon emis-
+sions. The 22nd United Nations climate change conference took
+place in Marrakesh, Morocco, from November 7 to 18, 2016. It
+focused on the practical implementation of the Paris Agreement.
+Based on scenarios developed by the World Energy Council and
+the International Energy Agency, the Paris Agreement's objective
+of limiting the increase in global temperatures to under 2 degrees
+Celsius can only be reached with greater efforts.
+2016 GDP Growth in Real Terms
+Annual change in percent
+Germany
+Italy
+0.8
+Euro zone
+United
+Kingdom
+USA
+We developed and rolled out an end-to-end mobile asset man-
+agement system that can be used online and offline. The new
+digital tool for wind asset maintenance overcomes the practical
+limitations of the existing desktop system and also reduces the
+number of paper-based processes.
+1.5
+Turkey's GDP growth rate slowed.
+Renewables
+Customer Solutions
+•
+OECD
+-13
+25,614
+22,368
+-10
+6,984
+6,289
++6
+14,989
+15,892
++5
+3,505
+3,685
+Full year
++1-%
+2015
+2016
++1-%
+2015
+2016
+Energy Networks
+€ in millions
+Fourth quarter
+Sales
+Our sales of €38.2 billion were about €4.5 billion below the prior-
+year level. Sales declined by €3.2 billion at Customer Solutions,
+by €1.6 billion at Corporate Functions/Other, and by €0.8 billion
+at Non-Core Business. The transfer of Uniper's wholesale cus-
+tomers in Germany at the end of 2015 and lower sales prices,
+the decommissioning of Grafenrheinfeld nuclear power station,
+and the expiration of supply contracts at PreussenElektra were
+the main reasons for the decline. In addition, the prior-year figure
+includes E&P operations in the North Sea and generation opera-
+tions in Italy and Spain that have since been divested; these items
+are reported under Corporate Functions/Other.
+Sales
+Disposals resulted in cash-effective items totaling €836 million
+in 2016 (prior year: €4,305 million).
+the network connection for Humber Gateway wind farm.
+our stake in Latvijas Gāze
+Turkey
+The government announced in 2013 that the Competition and
+Markets Authority ("CMA") would conduct an annual investiga-
+tion of the state of competition in Britain. The CMA presented
+its first report at the end of 2016. Its primary focus in the
+energy sector was on retail electricity and gas markets for end-
+customers. The CMA's proposed remedies are aimed primarily
+at enhancing customer activity and engagement (for example,
+by increasing transparency) and at increasing competition. The
+government is crafting legislation to implement the remedies.
+Europe
+•
+To implement our new strategy, through year-end 2016 we
+classified as disposal groups, assets held for sale, or discontinued
+operations:
+Disposal Groups, Assets Held for Sale, and Discontinued
+Operations
+Acquisitions, Disposals, and Discontinued Operations in 2016
+We executed the following significant transactions in 2016.
+Note 4 to the Consolidated Financial Statements contains
+detailed information about them.
+Our operating cash flow of €3 billion was significantly below
+the prior-year figure of €4.2 billion, primarily because of higher
+net tax payments and the disposal of the E&P business.
+Our investments of €3.2 billion were slightly below the prior-
+year figure but in line with the €3.4 billion foreseen for 2016 in
+our medium-term plan.
+Adjusted EBIT for the E.ON Group declined by €451 million to
+€3.1 billion (if disposals are factored out, adjusted EBIT was
+€85 million below the prior-year figure). Adjusted net income
+declined by €172 million to €904 million. Our adjusted EBIT
+and adjusted net income were therefore at the upper end of our
+forecast range of €2.7 to €3.1 billion and €0.6 to €1 billion,
+respectively. In addition, we recorded a cash-conversion rate
+of 80 percent, which is equal to operating cash flow before
+interest and taxes (€3,974 million) divided by adjusted EBITDA
+(€4,939 million). Our ROCE was 10.4 percent.
+In the 2016 financial year our operating business performed in
+line with our expectations. Our sales declined by 11 percent
+year on year to €38.2 billion. Adjusted EBIT in our core business
+declined by about €0.1 billion to €2.5 billion. The principal posi-
+tive effect in our operating business was higher earnings at
+Renewables due to the fact that Amrumbank West and Humber
+Gateway wind farms were for the first time fully operational for
+the entire year. These effects were more than offset by lower
+earnings at Energy Networks resulting from the non-recurrence
+of positive one-off items recorded in the prior-year.
+Business Performance in 2016
+Earnings Situation
+28
+Business Report
+The United States provides support for renewables primarily
+through tax credits, such as production tax credits for wind and
+investment tax credits for solar.
+USA
+United Kingdom
+Turkey amended its electricity market legislation in 2016. These
+changes included the designation of zones in which renewables
+will receive preferential dispatch.
+Turkey
+Sweden's Energy Policy Commission developed a long-term
+strategy for the country's energy supply through 2050. It pre-
+sented its findings at the start of 2017. Renewables and energy
+efficiency will play important roles in this strategy. In addition,
+the Swedish government has an interest in enhancing consumers'
+rights in the energy marketplace. This includes energy services
+such as flexible demand, energy efficiency, and self-generation
+of energy.
+Sweden
+The Italian Regulatory Authority for Electricity, Gas, and Water
+wants to spur competition in the end-customer market and
+intends to supplant regulated tariffs.
+Italy
+To comply with European law, in the autumn of 2016 Germany
+amended its Combined-Heat-and Power ("CHP") Act and again
+amended the Renewable Energy Act. As with renewables,
+competitive tenders will be introduced for CHP units between
+1 and 50 MW. The reduced 20 percent surcharge for renewable
+power now must also be paid on an operator's own consumption
+from upgraded existing assets, which were previously exempted
+from the surcharge. Finally, an experimentation clause was
+added to the German Energy Industry Act to make it possible
+to conduct trials of research projects in sector-coupling that
+are part of the Smart Energy Showcases: Digital Agenda for the
+Energy Transition.
+Besides these laws enacted in the summer of 2016, other
+important energy-policy decisions were made in the autumn and
+winter of 2016, some of which have significant implications for
+DSOs. The amended Incentive Regulation Ordinance took effect
+in September 2016. In October the German Federal Network
+Agency set the rate of return for power and gas networks for
+the third regulatory period. The rate of return for new assets is
+only 6.91 percent. Lawmakers also amended the German Energy
+Industry Act, which governs how concessions are awarded.
+Under one of the amendments, communities may, along with
+the existing energy-related criteria, consider "local community
+affairs" as a criterion for awarding concessions.
+In 2016 Germany made a number of important energy-policy
+decisions roughly one year before the elections to the federal
+parliament, which will take place in the autumn of 2017. In the
+summer of 2016 it enacted far-reaching amendments to the
+Renewable Energy Act, the Electricity Market Act, and the Act on
+the Digitalization of the Energy Transition. Support for renew-
+ables will now take the form of competitive tenders, including
+for offshore wind farms. The Electricity Market Act does not
+introduce a capacity market, which had been a topic of much
+debate. Instead, it seeks to ensure supply security by bolstering
+the current market design, by placing greater responsibilities
+on market participants, and by introducing a variety of reserve
+mechanisms (network and capacity reserves along with an
+on-call reserve of lignite-fired generating units). The Smart
+Meters Operation Act, which is part of the Act for the Digitali-
+zation of the Energy Transition, sets the timeline and price caps
+for the rollout of smart meters and advanced metering technology
+to various customer groups.
+Germany
+The Czech Republic established its regulations for power and
+gas prices for 2016-2018. The country's regulatory agency
+aims to promote cost efficiency and also to spur investment in
+networks by providing operators with adequate and stable
+returns. As planned, Romania implemented a number of mea-
+sures to further liberalize its energy market. In 2016 there was
+again a general trend in this region toward government-man-
+dated price reductions. Hungary began the process of revising
+its ordinances and directives for tariffs, pricing, and network
+connections. The revisions under discussion include new method-
+ologies for gas and power distribution systems, the regulation
+of the electricity prices paid by industrial customers, and elec-
+tricity storage devices.
+Central Eastern Europe
+Uniper Group, which was spun off
+•
+our E&P business in the North Sea
+•
+1.7
+1.7
+1.7
+2.0
+2.9
+3.3
+0
+0.5
+1.0
+1.5
+2.0
+2.5
+3.0
+Source: OECD, 2016
+The energy policy of the European Union ("EU") began to turn more
+of its attention to end-customers. The European Commission's
+package of measures called Clean Energy for All Europeans aims
+to improve energy services for residential customers enabling
+them to save money and conserve energy, in particular through
+the use of smart technologies.
+The EU continues to emphasize the key role distribution system
+operators ("DSOs") play in implementing the energy transition
+and therefore sees them as important partners in redesigning
+the energy system.
+In its long-term strategy, the EU strengthened its commitment
+to energy efficiency by setting a binding target that the EU must
+improve its energy efficiency by 30 percent by 2030 relative to
+a 2007 baseline. It emphasized the significance of renewables
+for the EU's future energy mix, including more use of renewable
+electricity for heat and transport.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+27
+•
+Renewables
+our stake in Enovos International
+The EU also intends to remain a pacesetter in renewables and
+has set a binding target for renewables to account for at least
+27 percent of its energy mix by 2030. In the commission's view,
+the package of measures makes the necessary adjustments to
+the electricity market design so that in the future large amounts
+of wind and solar energy can be fed into the system efficiently.
+335
+E.ON and Uniper have operated separately as independent com-
+panies since January 1, 2016. Düsseldorf-based Uniper has
+about 13,000 employees and focuses on the conventional energy
+world. It consists of upstream and midstream businesses that
+originally belonged to E.ON. At our Annual Shareholders Meeting
+on June 8, 2016, E.ON SE shareholders voted to spin off a
+53.35-percent majority stake in Uniper, which had a successful
+stock-market listing on September 12. Currently, E.ON continues
+to have a 46.65-percent stake in Uniper. We intend to divest
+our remaining Uniper stake over the medium term. Furthermore,
+a Control Termination Agreement was concluded, which took
+effect on December 31, 2016, at which time Uniper was decon-
+solidated.
+-25
+This segment consists of Onshore Wind/Solar and Offshore
+Wind/Other. We plan, build, operate, and manage renewable
+generation assets. We market their output in several ways:
+in conjunction with renewable incentive programs, under long-
+term electricity supply agreements with key customers, and
+directly to the wholesale market.
+Non-Core Business
+This segment consists of our non-strategic operations, in par-
+ticular the operation of our nuclear power stations in Germany
+(which is managed by our Preussen Elektra unit) and, effective
+January 1, 2016, our stake in the Uniper Group which we
+account for using the equity method. Uniper's earnings are
+reported under non-operating earnings.
+New Features in Our Reporting
+In view of our new strategy and the Annual Shareholders
+Meeting's vote to spin off Uniper, we applied IFRS 5 and report
+the Uniper Group as a discontinued operation. We therefore
+adjusted our 2016 and 2015 numbers, with the exception of
+our total assets and liabilities in 2015, to exclude Uniper and no
+longer provide commentary on its business performance. After
+the Control Termination Agreement took effect, Uniper was
+deconsolidated effective December 31, 2016, and is recorded
+in our Consolidated Financial Statements as an associated
+company in accordance with our stake and accounted for using
+the equity method.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+23
+Management System
+In 2016 E.ON embarked on a journey of transformation. The goal
+of this journey is to become a leading company in the new energy
+world. In the years ahead, we will therefore place considerable
+strategic emphasis on putting the right pieces in place for future
+success and growth in a demanding market environment.
+Transformation
+E.ON offers attractive opportunities to current and future
+employees by creating jobs and career opportunities in growth
+markets and by setting clear objectives. It offers investors a
+reasonable balance between dividends with good growth pros-
+pects, highly predictable earnings, and solid financing.
+Significance for Employees and Stakeholders
+Alongside its existing capabilities and resources, E.ON is devel-
+oping and refining the necessary expertise for the key success
+factors in its businesses. In particular, we cultivate a strong
+customer orientation, develop and implement new downstream
+business models and products, and leverage the digital trans-
+formation. The successful implementation of our strategy also
+depends on partnerships, such as partnerships with providers
+of new technology and business models.
+19
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Renewables
+Our corporate strategy aims to deliver sustainable growth in
+shareholder value. We have put in place a Group-wide planning
+and controlling system to assist us in planning and managing
+E.ON as a whole and our individual businesses with an eye to
+increasing their value. This system ensures that our financial
+resources are allocated efficiently. We strive to enhance our
+sustainability performance efficiently and effectively as well.
+We have high expectations for our sustainability performance.
+We embed these expectations progressively more deeply into
+our organization-across all of our businesses, entities, and
+processes and along the entire value chain-by means of binding
+company policies and minimum standards.
+This segment serves as the platform for working with our
+customers to actively shape Europe's energy transition. This
+includes supplying customers in Europe (excluding Turkey)
+with power, gas, and heat as well as with products and services
+that enhance their energy efficiency and autonomy and provide
+other benefits. Our activities are tailored to the individual needs
+of customers across all segments: residential, small and medium-
+sized enterprises, large commercial and industrial, and public
+entities. E.ON's main presence in this business is in Germany, the
+United Kingdom, Sweden, Italy, the Czech Republic, Hungary,
+and Romania. E.ON Connecting Energies, which provides cus-
+tomers with turn-key distributed energy solutions, is also part
+of this segment.
+This segment consists of our power and gas distribution net-
+works and related activities. It is subdivided into three regional
+markets: Germany, Sweden, and East-Central Europe/Turkey
+(which consists of the Czech Republic, Hungary, Romania, Slo-
+vakia, and Turkey). This segment's main tasks include operating
+its power and gas networks safely and reliably, carrying out any
+necessary maintenance and repairs, and expanding its networks,
+which frequently involves adding customer grid connections.
+Corporate Initiatives
+Alongside the demanding spinoff process, we launched three
+important corporate initiatives in 2016 in order to enhance our
+competitiveness and customer orientation. They will help us lay
+the foundation for lasting success in the years ahead. All of them
+are designed for rapid results and implementation.
+•
+•
+•
+Our focus on the new energy world and our commitment to
+put customers at the center of everything we do were the
+starting points for our new brand idea ("Let's Create a Better
+Tomorrow"). Our new brand positioning aims for a strong
+emotional appeal and personality, built on what matters to
+our customers: brilliant experiences, giving them more; and
+smarter, sustainable solutions. These key brand pillars and
+our vibrant new brand design will enable our customer busi-
+nesses to be distinctive in our chosen markets. At the end of
+2016, our Italy regional unit already adopted our new brand
+positioning at the end of 2016. Our other regional units are
+following.
+Successful digitalization is an integral component of our
+strategy, which was appointed a Chief Digital Officer last year.
+Under his leadership, we are conducting a Group-wide digital
+transformation initiative to explore ideas that will fundamen-
+tally improve our customer experience, accelerate process
+simplification and automation, as well as enable us to tap new
+sources of growth through new and/or disruptive business
+models. We have already identified and prioritized the most
+promising ideas, which we will validate and implement swiftly
+in the months ahead.
+Under the project name Phoenix, E.ON is reviewing and opti-
+mizing our central functions and costs across the company
+in the wake of the Uniper spinoff. Its purpose is to make our
+central functions leaner and more customer-oriented so that
+we can continue to position ourselves successfully in the face
+of keener competition. As a result of Phoenix we intend to
+permanently reduce our controllable costs by €400 million.
+Finance Strategy
+The section of the Combined Group Management Report entitled
+Financial Situation contains explanatory information about our
+finance strategy.
+People Strategy
+The section of the Combined Group Management Report entitled
+Employees contains explanatory information about our people
+strategy.
+Combined Group
+Management Report
+•
+•
+Adjusted EBIT at core business down slightly
+Earnings from discontinued operations and provisions for
+nuclear-waste management lead to €16 billion net loss
+Management to propose dividend of €0.21 per share
+2017 adjusted EBIT between €2.8 and €3.1 billion
+Corporate Profile
+22
+Corporate Profile
+Business Model
+E.ON is an investor-owned energy company. Led by Group
+Management in Essen, our operations are segmented into three
+operating units: Energy Networks, Customer Solutions, and
+Renewables. Our non-strategic operations are reported under
+Non-Core Business.
+Group Management
+The main task of Group Management is to lead the entire E.ON
+Group by overseeing and coordinating its operating businesses.
+This includes charting E.ON's strategic course, defining its
+financial policy and initiatives, managing business issues that
+transcend individual markets, managing risk, continually opti-
+mizing E.ON's business portfolio, and conducting stakeholder
+management.
+Energy Networks
+Customer Solutions
+Our main key figures for managing our operating business are
+adjusted EBIT and cash-effective investments. Other key figures
+for managing the E.ON Group-alongside adjusted net income,
+and earnings per share (based on adjusted net income)-are
+cash-conversion rate and ROCE.
+In April 2016 the E.ON Management Board decided that adjusted
+earnings before interest and taxes ("adjusted EBIT") will super-
+sede adjusted EBITDA as E.ON's most important key figure for
+indicating its businesses' long-term earnings power. The E.ON
+Management Board is convinced that adjusted EBIT is the most
+suitable key figure for assessing operating performance because
+it presents a business's operating earnings independently of non-
+operating factors, interest, and taxes. The adjustments include
+net book gains, cost-management and restructuring expenses,
+impairment charges, and other operating earnings, which include,
+among other items, the marking to market of derivatives (see
+the explanatory information on pages 37 and 38 of the Com-
+bined Group Management Report and in Note 33 of the Consol-
+idated Financial Statements).
+Cash-effective investments are equal to the investment expen-
+ditures shown in our Consolidated Statements of Cash Flows.
+38,173
+-6
+10,614
+9,975
+E.ON Group
+-4,474
+-4,106
+-1,259
+-1,083
+Consolidation
+-59
+2,756
+1,124
+-45
+506
+279
+Corporate Functions/Other
+-33
+2,290
+1,538
++9
+430
+470
+Non-Core Business
+-8
+1,481
+1,357
+42,656
+-11
+25
+Uniper Spinoff
+Return on capital employed ("ROCE") assesses the value perfor-
+mance of our operating business. ROCE is a pretax total return on
+capital and is defined as the ratio of our EBIT to annual average
+capital employed.
+Adjusted net income is an earnings figure after interest income,
+income taxes, and non-controlling interests that has been adjusted
+to exclude non-operating effects. Also excluded are non-
+operating interest expense/income, taxes on operating earnings,
+and non-controlling interests' share of operating earnings.
+E.ON manages its capital structure by means of its debt factor
+(see the section entitled Finance Strategy on page 39). Debt
+factor is equal to our economic net debt divided by our adjusted
+EBITDA and is therefore a dynamic debt metric. Economic net
+debt includes our net financial debt as well as our pension and
+asset-retirement obligations.
+Alongside our most important financial management key
+figures, this Combined Group Management Report includes
+other financial and non-financial key performance indicators
+("KPIs") to highlight aspects of our business performance and
+our sustainability performance vis-à-vis all our stakeholders:
+our employees, customers, shareholders, bond investors, and the
+countries in which we operate. Operating cash flow, and value
+added are examples of our other financial KPIs. Among the KPIs
+of our sustainability performance are our carbon emissions
+and TRIF (which measures reported work-related injuries and
+illnesses). The sections entitled Corporate Sustainability and
+Employees contain explanatory information about these KPIs.
+However, these KPIs are not the focus of the ongoing manage-
+ment of our businesses.
+Cash-conversion rate is equal to our operating cash flow before
+interest and taxes divided by adjusted EBITDA. It indicates
+whether our operating earnings are generating enough liquidity.
+Corporate Profile
+24
+Innovation
+In 2016 we regrouped our innovation activities to reflect the
+spinoff of Uniper from E.ON. Projects relating to conventional
+energy were transferred to Uniper, those relating to nuclear
+energy to PreussenElektra. E.ON now has the following Innova-
+tion Hubs:
+•
+•
+Retail and end-customer solutions: develop new business
+models for distributed-energy supply, energy efficiency, and
+mobility
+Renewables generation: increase the cost-effectiveness of
+existing wind and solar assets and study new renewables
+technologies
+448
+Infrastructure and energy networks: develop energy-storage
+and energy-distribution solutions for an increasingly decen-
+tralized and volatile generation system
+Strategic Co-Investments
+We support our effort to develop customer-centric and innova-
+tive technologies and business models by identifying promising
+energy technologies of the future that will enhance our palette
+of offerings for our millions of customers around Europe and will
+make us a pacesetter in the operation of smart energy systems.
+We select new businesses that offer the best opportunities for
+partnerships, commercialization, and equity investments. Our
+investments focus on strategic technologies and business models
+that enhance our ability to lead the move to distributed, sus-
+tainable, and innovative energy offerings. These arrangements
+benefit new technology companies and E.ON, since we gain
+access to their innovations and have a share in the value growth.
+In 2016 our investments included Kite Power Solutions, a British
+company that is developing a solution to harness the energy of
+the wind using kites (which soar at altitudes of up to 450 meters)
+instead of ground-based rotors. We reinvested in two companies
+that have shown a positive development since the beginning our
+partnership with them in 2014: Berlin-based Thermondo (which
+is a pacesetter in the digitalization of home heating installation)
+and California-based AutoGrid (which brings intelligent data
+management to the distributed energy world).
+Sample Projects from 2016
+Customer Solutions
+In the United Kingdom we worked with Enervee, a U.S.-based
+company that is one of our strategic co-investments, to develop
+an online platform for the British market called E.ON Market-
+place. Consumers can use the E.ON Marketplace to compare the
+energy efficiency of household goods and consumer electronics.
+In Germany we developed Impuls KW, a new mobile application
+for tablets and smart phones that enables customers to monitor
+the performance of their distributed generating units with one-
+click simplicity. It features an easy-to-read display of technical
+and economic data, including energy consumption, fuel costs, peak
+demand, economic efficiency, and various types of emissions.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+25
+Energy intelligence and energy systems: study potentially
+fundamental changes to energy systems and the role of data
+in the new energy world
+In Hungary we developed an energy container that can provide
+round-the-clock, fossil-free electricity to customers whose
+homes are remote from the grid, thereby eliminating the need
+for costly grid extensions. Electricity from the container's roof-
+top solar panels can either be consumed immediately or stored
+in batteries. If the batteries are fully charged, the surplus elec-
+tricity powers electrolysis equipment that produces hydrogen
+which is stored in gas cylinders outside the container. At night
+or on cloudy days, customers draw their electricity from the
+batteries or a hydrogen-powered fuel cell. The container, which
+is equipped with remote surveillance and monitoring, can gen-
+erate enough electricity to meet the average residential demand
+(4,000 kWh per year), can store up to 15 days of backup elec-
+tricity, and is nearly 100 percent reliable.
+2015
+Report of the Supervisory Board
+0.8
+1.1
+5.7
+18.0
+Wholesale market
+133.3
+116.7
+51.9
+52.1
+40.7
+36.3
+40.7
+28.3
+Customer groups
+10.8
+3.4
+2.7
+2.5
+8.1
+0.9
+Sales partners
+60.8
+53.1
+28.7
+28.6
+17.8
+15.1
+7.6
+14.3
+7.4
+13.9
+7.7
+8.2
+Residential and SME
+Fourth quarter
+Billion kWh
+2015
+2016
+2015
+2016
+2015
+2016
+2015
+2016
+Total
+Other
+United Kingdom
+Germany
+Gas Sales
+147.2
+143.4
+59.3
+59.7
+41.5
+37.4
+46.4
+46.3
+Total
+26.7
+9.4
+I&C
+61.7
+9.5
+11.0
+7.6
+Customer groups
+2.6
+0.8
+0.6
+0.7
+2.0
+0.1
+Sales partners
+15.1
+13.4
+7.5
+7.2
+3.9
+3.8
+3.7
+2.4
+I&C
+16.9
+16.7
+5.4
+5.9
+6.2
+5.7
+5.3
+10.1
+13.8
+13.5
+30.9
+60.2
+20.5
+21.0
+22.9
+21.2
+18.3
+18.0
+Residential and SME
+Full year
+39.8
+38.0
+15.3
+15.8
+12.8
+10.3
+14.2
+12.3
+Total
+5.2
+7.1
+1.8
+2.0
+0.2
+0.4
+3.2
+4.7
+Wholesale market
+34.6
+9.9
+5.1
+11.7
+11.2
+67.6
+57.2
+51.4
+48.4
+51.4
+40.9
+Total
+11.5
+16.0
+9.7
+4.0
+1.8
+12.0
+Wholesale market
+158.9
+130.5
+57.9
+53.2
+51.4
+48.4
+49.6
+28.9
+Customer groups
+10.2
+2.0
+1.6
+2.0
+146.5
+8.6
+170.4
+Report of the Supervisory Board
+Total
+Other
+United Kingdom
+Germany
+€ in millions
+Customer Solutions
+and gas margins and improved receivables management, Hungary
+from its new strategy for the residential-customer business and
+improved power and gas margins, and Sweden from improved
+margins in the heat businesses along with lower temperatures.
+Improved margins in the Czech Republic also had a positive
+impact on earnings.
+Other's sales declined by €0.6 billion, primarily because of lower
+sales volume and prices in the power and gas business in Hungary
+and the Czech Republic along with the sale of an equity interest
+in our gas business in Italy in July 2015. By contrast, sales in
+Sweden rose owing to lower temperatures. Other's adjusted
+EBIT rose by €84 million. Romania benefited from wider power
+34
+Business Report
+measures.
+Currency-translation effects, lower sales volume, declining cus-
+tomer numbers, and a reduction in gas prices in January caused
+sales in the United Kingdom to decline by €1.9 billion. Adjusted
+EBIT increased by €87 million primarily owing to lower costs
+in conjunction with government-mandated energy-efficiency
+Sales in Germany declined, primarily because of the transfer of
+E.ON Energie Deutschland's wholesale customers to Uniper
+Energy Sales at the end of 2015. Adjusted EBIT was 42 percent
+lower. The decline is primarily attributable to the non-recurrence
+of positive one-off effects recorded in the prior year (primarily
+settlement-related items from previous reporting periods).
+Earnings were also adversely affected by higher customer-acqui-
+sition costs, higher Renewable Energy Law levies, higher network
+fees, a slight decline in average power consumption, and costs
+for the further buildup of the customer-solutions business.
+This segment's sales decreased by €3.2 billion in 2016, whereas
+its adjusted EBIT was slightly above the prior-year level.
+Sales and Adjusted EBIT
+This segment had about 21.4 million customers at year-end 2016,
+less than the prior-year figure of 22.7 million. The number of
+customers in the United Kingdom declined from 7.6 to 7 million;
+power customers account for about 60 percent of customer
+losses, gas customers for about 40 percent. Customer numbers
+in Hungary declined from 3.1 billion in 2015 to 2.5 billion in
+2016 as a result of the above-mentioned new strategy. In Ger-
+many they decreased from 6.2 million in 2015 to 6.1 million in
+2016. A high level of acquisitions nearly offset customer losses
+in a keenly competitive marketplace.
+Customer Numbers
+Other's power sales (Sweden, Hungary, the Czech Republic,
+Romania, Italy) and E.ON Connecting Energies were up slightly.
+By contrast, its gas sales declined by 10.4 billion kWh, mainly
+because of a new strategy for the residential-customer business
+in Hungary and lower sales volume to wholesale customers in
+the Czech Republic.
+Power sales in the United Kingdom declined by 4.1 billion kWh.
+Declining customer numbers and customers' energy-saving
+behavior led to lower power sales to residential and SME custom-
+ers. A reduction in the number of customer facilities served along
+with lower offtake were the reasons for the decline in power
+sales to I&C customers. Gas sales decreased by 3 billion kWh.
+Lower customer numbers were responsible for the reduction in
+gas sales to residential and SME customers. The reason for the
+decline in gas sales to I&C customers is the same as for power.
+Customer Solutions' power sales in Germany were at the prior-
+year level. Power sales to residential and small and medium
+enterprise ("SME") customers were lower due in to part to keen
+competition but mainly to a reduction in average consumption
+and to keen competition. In particular, this reduction reflects
+technical improvements such as energy-efficient appliances as
+well as more consumption-conscious consumer behavior. Power
+sales to industrial and commercial ("I&C") customers and to sales
+partners declined, primarily because of the transfer of E.ON
+Energie Deutschland's wholesale customers to Uniper Energy
+Sales at the end of 2015. Power sales to the wholesale market
+rose significantly owing to Uniper Energy Sales for its wholesale
+customers and resales to Uniper Global Commodities. Gas sales
+volume declined by 14 percent, mainly because sales to I&C cus-
+tomers and sales partners were lower due to the above-mentioned
+transfer of wholesale customers. By contrast, gas sales to resi-
+dential and SME customers were slightly higher due to weather
+factors, and wholesale gas sales were significantly higher thanks
+to the deliveries to Uniper for its wholesale customers.
+In 2016 this segment's power and gas sales declined by
+3.8 billion kWh and 23.9 billion kWh, respectively.
+Power and Gas Sales Volume
+33
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+Sales partners
+51.5
+36.8
+Wholesale market
+47.3
+43.9
+18.3
+19.1
+14.1
+15.2
+14.9
+9.6
+Customer groups
+2.6
+0.7
+0.5
+0.7
+2.1
+Sales partners
+14.1
+11.3
+6.6
+7.5
+2.4
+2.4
+5.1
+1.4
+I&C
+30.6
+31.9
+3.5
+1.0
+0.5
+1.4
+23.3
+23.2
+10.4
+8.6
+17.8
+5.0
+I&C
+97.2
+91.7
+33.0
+28.0
+41.0
+39.8
+10.9
+23.2
+Residential and SME
+Full year
+49.7
+47.9
+19.7
+19.6
+14.1
+15.2
+15.9
+13.1
+Total
+2.4
+4.0
+23.9
+Residential and SME
+Fourth quarter
+Billion kWh
+Our regulated business consists of operations in which revenues
+are largely set by law and based on costs. The earnings on these
+revenues are therefore extremely stable and predictable.
+E.ON generates a significant portion of its adjusted EBIT in very
+stable businesses. Regulated, quasi-regulated, and long-term
+contracted businesses accounted for the overwhelming propor-
+tion of our adjusted EBIT in 2016.
+Adjusted EBIT for the E.ON Group declined by €451 million,
+owing primarily to the items mentioned above in the commentary
+on adjusted EBIT in our core businesses and to the absence
+of earning streams from divested operations. If these earnings
+are factored out, adjusted EBIT for the E.ON Group would be
+€85 million below the prior-year figure.
+30
+30
+Business Report
+-13
+3,563
+3,112
+-30
+1,145
+801
+Adjusted EBIT
+-93
+395
+29
+138
+Other (divested operations)
+-2
+563
+553
++81
+115
+208
+Non-Core Business (PreussenElektra)
+-3
+2,605
+Our quasi-regulated and long-term contracted business consists
+of operations in which earnings have a high degree of predict-
+ability because key determinants (price and/or volume) are largely
+set by law or by individual contractual arrangements for the
+medium to long term. Examples of such legal or contractual
+arrangements include incentive mechanisms for renewables and
+the sale of contracted generating capacity.
+2,530
+Our merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+Energy Networks
+35.0
+35.4
+36.3
+37.3
+68.1
+68.0
+Power
+Full year
+2015
+2016
+2015
+2016
+2015
+2016
+Total
+Turkey
+Sweden
+Germany
+2015
+2016
+East-Central Europe/
+Energy Passthrough
+Power passthrough at East-Central Europe/Turkey was 0.4 bil-
+lion kWh above the prior-year level owing to positive economic
+development in the Czech Republic. The 3.6 billion kWh increase
+in gas passthrough is primarily attributable to regulatory changes
+in Hungary.
+Power and gas passthrough in Sweden rose to about 37 bil-
+lion kWh and 4.9 billion kWh, respectively, primarily because of
+low temperatures at the beginning and end of 2016.
+Power passthrough in Germany in 2016 was at the prior-year
+level. Gas passthrough rose by 4 percent, or 4.2 billion kWh,
+mainly because of higher sales to large customers due to eco-
+nomic growth. In addition, lower temperatures in our network
+territory relative to the prior year had a positive impact on sales
+to standard-load-profile customers.
+Power passthrough was at the prior-year level at all of this seg-
+ment's operating units. Gas passthrough rose by 7.9 billion kWh,
+or 5 percent.
+Power and Gas Passthrough
+Below we report on a number of important non-financial key
+figures for this segment, such as power and gas passthrough,
+system length, and the number of connections.
+Business Segments
+-34
+892
+593
+2015
+2016
++1-%
+2015
+2016
+Energy Networks
+€ in millions
+Full year
+Fourth quarter
+Adjusted EBIT
+Adjusted EBIT in our core business declined by €75 million year
+on year. Energy Networks' adjusted EBIT was lower due primarily
+to the non-recurrence of positive one-off items recorded in
+Germany in 2015. However, it posted higher earnings in East-
+Central Europe/Turkey. Customer Solutions' adjusted EBIT was
+at the prior-year level. Although earnings in Germany were lower
+due in particular to the non-recurrence of positive one-off items
+recorded in 2015, adjusted EBIT in the United Kingdom and at
+the Other unit was higher. Renewables' positive earnings per-
+formance was due principally to the fact that Amrumbank West
+and Humber Gateway wind farms were for the first time fully
+operational for the entire year. Adjusted for special items recorded
+in 2015, Adjusted EBIT in our core business was up slightly.
+Adjusted EBIT
+Income from companies accounted for under the equity method
+of €285 million was slightly below the prior-year figure of
+€295 million. Our remaining Uniper stake is not recognized in
+income until the 2017 financial year.
+Other operating expenses of €7,867 million were slightly below
+the prior-year level of €7,968 million. Expenditures relating to
+currency-translation effects surpassed the prior-year figure of
+€4,049 million by €876 million but were counteracted by lower
+expenditures relating to derivative financial instruments. In
+addition, effective 2016 concession fees are no longer recorded
+under this line item but rather under costs of materials.
+Germany's enactment of a law to reassign responsibility for the
+country's nuclear waste. The impairment charges on our Uniper
+stake in the amount of €7 billion, which were necessary in order
+to reflect Uniper's lower market capitalization, are disclosed
+under discontinued operations. They were recorded principally
+in earlier quarters.
+Depreciation charges on continuing operations declined by
+€1,846 million, from €5,669 million to €3,823 million. The
+significant decline resulted primarily from the non-recurrence
+of impairment charges recorded in the prior year along with
+the sale of our U.K. and Norwegian E&P operations. This was
+partially offset by an increase in depreciation charges following
+As anticipated, personnel costs of €2,839 million were below
+the prior-year figure of €2,995 million due to a lower average
+headcount.
+Costs of materials decreased by 3 percent, from €33,184 million
+to €32,325 million. A significant decline in our procurement
+costs for power and Igas was matched by a similar decline in our
+sales. This was partially offset by an increase in costs of materials
+in the fourth quarter resulting from an increase in provisions
+for nuclear waste management following the German federal
+government's adoption of the recommendations of the Commis-
+sion for Organizing and Financing the Nuclear Energy Phaseout.
+Other operating income rose by 18 percent, from €6,337 million
+to €7,448 million, primarily because income from currency-trans-
+lation effects increased by €1,143 million, from €3,894 million
+to €5,039 million. In addition, income from derivative financial
+instruments rose from €524 million to €1,141 million. By con-
+trast, income from the sale of current securities and from
+cost passthroughs declined. Corresponding amounts resulting
+from currency-translation effects and from derivative financial
+instruments are recorded under other operating expenses.
+Other Line Items from the Consolidated Statements of Income
+Own work capitalized of €529 million surpassed the prior-year
+figure of €510 million. The increase is predominantly attributable
+to own work capitalized in conjunction with the completion of
+IT projects and network investments.
+29
+29
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
++/-%
+475
+552
+-14
+Adjusted EBIT from core business
+8
+15
+10
+-6
+Consolidation
+-411
+-398
+-156
+-261
+Corporate Functions/Other
++10
+391
+140.7
+430
+167
+121
+Renewables
++1
+806
+812
+-17
+319
+264
+Customer Solutions
+-8
+1,811
+1,671
+-28
+139.4
+Line loss, station use, etc.
+2.6
+1,686
+1,507
+Adjusted EBITDA
+14,989
+15,892
+1,693
+1,658
+984
+1,029
+12,312
+13,205
+Sales
+Full year
+552
+475
+105
+109
+76
+110
+371
+256
+Adjusted EBIT
+788
+756
+149
+182
+112
+562
+489
+610
+558
+2015
+2016
+2015
+2016
+2015
+2016
+2015
+2016
+Total
+Other
+United Kingdom
+Germany
+32
+151
+Power Sales
+Customer Solutions
+Business Report
+1,811
+1,671
+354
+379
+328
+398
+1,129
+894
+Adjusted EBIT
+2,733
+2,679
+Below we report on a number of important non-financial key
+figures for this segment, such as power and gas sales volume
+and customer numbers.
+CEO Letter
+527
+Adjusted EBITDA
+System length in East-Central Europe/Turkey-about 232,000 kilo-
+meters for power and about 44,000 kilometers for gas-was at
+the prior-year level, as were the roughly 4.7 million connection
+points for power and the roughly 1.3 million for gas.
+The length of our power system in Sweden was roughly
+136,400 kilometers at year-end 2016, slightly higher than the
+prior-year figure of 135,500 kilometers. The length of the gas
+distribution system was unchanged at 2,100 kilometers. The
+number of connection points in the power distribution system
+was unchanged at roughly 1 million.
+System length in Germany-about 350,000 kilometers for power
+and about 58,000 kilometers for gas-was roughly at the prior-
+year level. At year-end we had about 5.8 million connection points
+for power and about 0.9 million for gas.
+System Length and Connections
+31
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Billion kWh
+6.7
+147.2
+6.5
+155.1
+39.8
+43.4
+4.8
+4.9
+102.6
+106.8
+Gas
+3.0
+2.8
+1.1
+1.1
+2.6
+Sales and Adjusted EBIT
+This segment's sales rose by €0.9 billion, whereas its adjusted
+EBIT declined by €140 million.
+Sales rose by €0.9 billion in Germany, primarily because of
+higher sales in conjunction with the REL. REL compensation to
+generators in our service territory totaled about €7.7 billion,
+€0.5 billion more than in 2015. The rise is mainly attributable
+to increases in installed generating capacity and in the amount
+of electricity fed into our distribution networks. For distribution
+network operators, however, REL compensation is passed
+3,505
+3,685
+470
+475
+259
+293
+2,776
+2,917
+Sales
+Fourth quarter
+2015
+2016
+2015
+423
+2016
+2016
+2015
+2016
+€ in millions
+Total
+Turkey
+Sweden
+Germany
+East-Central Europe/
+Energy Networks
+Sales in East-Central Europe/Turkey were €35 million below
+the prior-year level. Although sales in Romania and the Czech
+Republic declined owing mainly to tariff effects, adjusted EBIT
+rose by €25 million. Adjusted EBIT was higher in the Czech
+Republic due to improved margins and cost savings. Our equity
+stakes in Turkey and the Slovak Republic contributed to the
+earnings increase as well. Adjusted EBIT in Romania declined
+significantly because of tariff effects in the power and gas busi-
+nesses. This was partially offset by an increase in gas passthrough.
+Earnings in Hungary were lower due to regulation-driven
+impairment charges in the gas network and higher costs, which
+were only partially offset by lower network losses.
+Sales in Sweden were slightly higher due to volume factors.
+Adjusted EBIT was significantly higher thanks to an improved
+gross margin in the power business. In addition, earnings in the
+first half of 2015 were adversely affected by costs in conjunction
+with storm damage.
+through and therefore is not recorded in income. Sales also
+increased owing to higher gas passthrough. This operating unit's
+adjusted EBIT declined by €235 million to €894 million, primarily
+because of the absence of positive one-off effects recorded in
+2015 (the reversal of provisions for network risks along with
+special items in income from equity interests). Higher depreciation
+charges are mainly attributable to higher investments.
+2015
+2016
+2015
+1,076
+Adjusted net income
+263
+377
+Net loss
+€ in millions
+Full year
+Fourth quarter
+Net Loss
+Restructuring and cost-management expenditures declined by
+€100 million and, as in the prior year, resulted mainly from cost-
+cutting programs and the implementation of our new strategy.
+Net book gains were €358 million below the prior-year figure.
+In 2016 a book gain on the sale of securities was more than
+offset by a book loss on the sale of our U.K. E&P business. The
+prior-year figure includes book gains on the sale of securities,
+the remaining stake in Energy from Waste, operations in Italy,
+the E&P business in the Norwegian North Sea, and network
+segments in Germany.
+We had a tax expense of €0.4 billion compared with €0.7 billion
+in the prior-year period. Despite our negative earnings before
+taxes, we incurred a tax expense and consequently had a negative
+tax rate of 25 percent (prior year: 49 percent). Expenditures
+that do not reduce taxes and significant effects resulting from
+the change in the value of deferred tax assets in 2016 were the
+main reasons for the change in our tax rate.
+provisions for contingent losses, and Uniper's realized loss in
+conjunction with the deconsolidation of Uniper. The line item
+also includes the earnings of the Spain regional unit (2016:
+€0.2 billion). Note 4 to the Consolidated Financial Statements
+contains more information about these matters.
+Pursuant to IFRS, income/loss from discontinued operations,
+net, is reported separately in the Consolidated Statements of
+Income and includes Uniper's earnings until derecognition
+(-€14.1 billion). The significant loss reported is mainly attributable
+to impairment charges recorded primarily in previous quarters,
+The net loss attributable to shareholders of E.ON SE of -€8.5 bil-
+lion and corresponding earnings per share of -€4.33 were below
+the respective prior-year figures of -€7 billion and -€3.60.
+The 2016 figure is after the completion of the Uniper spinoff.
+We recorded a net loss of €16 billion in 2016 compared with a
+net loss of €6.4 billion in 2015. This substantial negative figure
+is primarily attributable to a loss from discontinued operations,
+which principally reflects impairment charges on Uniper opera-
+tions and Uniper's realized loss in conjunction with the decon-
+solidation of Uniper. In addition, we recorded negative items in
+conjunction with the law Germany's two houses of parliament
+passed in December 2016 to reassign responsibility for the
+country's nuclear waste. By contrast, adjusted net income, which
+does not include non-operating effects, totaled €0.9 billion,
+which was just €0.2 billion below the prior-year figure. The
+decline is mainly attributable to the non-recurrence of positive
+one-off effects and the absence of earnings streams from
+divested operations.
+Net loss
+37
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+47.3
+36.6
+Power sales
+-0.1
+-0.1
+-292
+Station use, line loss, etc.
+-278
+-113
+281
+3,542
+3,574
+Adjusted EBIT
+801
+1,145
+3,112
+3,563
+Interest expense shown in the consolidated statements of income
+-113
+-410
+-1,295
+-1,481
+Interest expense (+)/income (-) not affecting net income
+-221
+24
+-157
+-4
+Operating earnings before interest and taxes
+467
+759
+1,660
+2,078
+Taxes on operating earnings
+-91
+-266
+-478
+-710
+Operating earnings attributable to non-controlling interests
+-116
+4,031
+47.4
+Total power procurement
+2015
+2016
+PreussenElektra
+Billion kWh
+563
+553
+Adjusted EBIT
+760
+644
+Adjusted EBITDA
+2,290
+1,538
+Sales
+Full year
+115
+208
+Adjusted EBIT
+193
+234
+Adjusted EBITDA
+430
+470
+Sales
+Fourth quarter
+2015
+2016
+PreussenElektra
+€ in millions
+Non-Core Business
+Fourth quarter
+36.7
+Owned generation
+8.9
+8.5
+3.0
+Third parties
+1.3
+1.3
+Jointly owned power plants
+9.8
+4.3
+Purchases
+37.6
+32.4
+Owned generation
+Full year
+11.0
+10.1
+Power sales
+Station use, line loss, etc.
+11.0
+10.1
+Total power procurement
+1.7
+0.5
+Third parties
+0.4
+0.3
+Jointly owned power plants
+2.1
+0.8
+Purchases
+9.3
+Non-operating adjustments
+-11
+-430
+134
+-932
+-67
+-164
+374
+274
+124
+53
+-421
+-63
+-72
+-62
+3,574
+3,542
+281
+4,031
+Adjusted EBITDA
+Scheduled depreciation and amortization
+Impairments (+)/Reversals (-)
+Adjusted EBIT
+Other non-operating earnings
+Impairments (+)/Reversals (-)
+Marking to market of derivative financial instruments
+Restructuring and cost-management expenses
+Net book gains (-)/losses (+)
+Non-operating adjustments
+-11
+-430
+864
+350
+-3,230
+180
+3,356
+Fourth quarter
+Adjusted Net Income
+The E.ON Management Board uses this figure in conjunction
+with its dividend policy. The goal for the 2016 financial year was
+to pay out to E.ON shareholders 40 to 60 percent of adjusted
+net income as dividends.
+Like EBIT, net income also consists of non-operating effects, such
+as the marking to market of derivatives. Adjusted net income
+is an earnings figure after interest income, income taxes, and
+non-controlling interests that has been adjusted to exclude
+non-operating effects. In addition to the marking to market of
+derivatives, the adjustments include book gains and book losses
+on disposals, restructuring expenses, other material non-oper-
+ating income and expenses (after taxes and non-controlling
+interests), and interest expense/income not affecting net income,
+which consists of the interest expense/income resulting from
+non-operating effects. Adjusted net income also does not include
+income/loss from discontinued operations.
+Adjusted Net Income
+Other non-operating earnings in 2016 mainly reflected items
+in conjunction with the law Germany's two houses of parliament
+passed in December 2016 to reassign responsibility for the
+country's nuclear waste; these items, along with the related
+impairment charges, are fully included here. Other non-operating
+earnings in 2015 includes numerous small positive and negative
+effects, such as impairment charges on securities.
+Impairment charges in 2016 were recorded in particular on
+Renewables' operations in the United States and Italy, Customer
+Solutions' assets in the United Kingdom, and Energy Networks'
+gas-storage capacity in Germany. In the prior year we recorded
+impairment charges primarily at our nuclear energy business in
+Germany, at Renewables, and at E&P operations in the North
+Sea and generation operations in Italy that have since been sold.
+We use derivatives to shield our operating business from price
+fluctuations. Marking to market of derivatives at December 31,
+2016, resulted in a positive effect of €932 million (prior year:
+-€134 million). The change is mainly attributable to Customer
+Solutions.
+38
+Business Report
+5,844
+4,939
+1,662
+1,299
+119
+2,162
+1,779
+511
+454
+48
+6
+44
+3,563
+3,112
+1,145
+801
+131
+3,869
+116
+3,854
+394
+EBIT
+1
+-19
+-8,450
+-898
+-4,502
+-6,377
+-16,007
+-707
+2015
+2016
+2015
+2016
+Attributable to non-controlling interests
+Attributable to shareholders of E.ON SE
+Full year
+€ in millions
+2016
+2015
+2016
+2015
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+-3,220
+864
+-411
+-12
+-10
+-19
+1
+EBIT
+-3,230
+864
+-6,999
+-2,206
+191
+-7,557
+-10
+Income/Loss from equity investments
+-12
+-411
+864
+-3,220
+Income/Loss from continuing operations before financial results and income taxes
+1,480
+1,314
+410
+123
+Financial results
+728
+440
+Adjusted EBIT was €10 million lower, principally because of
+the absence of earnings streams from Grafenrheinfeld and
+lower sales prices. Lower expenditures for the nuclear-fuel tax
+had a positive impact on adjusted EBIT in 2016, as did the
+non-recurrence of adverse effects recorded in 2015 in conjunc-
+tion with an arbitration procedure. Fourth-quarter adjusted
+EBIT improved by €93 million because lower sales prices in the
+fourth quarter were more than offset by positive effects in
+conjunction with the nuclear-fuel tax and the non-recurrence of
+adverse effects recorded in 2015 in conjunction with an arbi-
+tration procedure.
+945
+904
+2016
+Income taxes
+-2,220
+-2,165
+-491
+-3,159
+Income/Loss from continuing operations
+4,157
+13,842
+216
+3,549
+Income/Loss from discontinued operations, net
+622
+-184
+The significant decline in this segment's sales (-€752 million)
+mainly reflects lower sales prices, the decommissioning of
+Grafenrheinfeld nuclear power station at the end of June 2015,
+and the expiration of deliveries to Belgium, the Netherlands,
+and France.
+-6,708
+Power Generation
+163
+158
+77
+44
+347
+403
+Adjusted EBIT
+88
+187
+138
+122
+38
+10
+264
+319
+Full year
+Sales
+7,781
+8,539
+7,791
+9,659
+6,796
+7,416
+22,368
+25,614
+Adjusted EBITDA
+299
+452
+460
+201
+402
+107
+6,984
+2015
+2016
+2015
+2016
+Total
+Offshore Wind/Other
+Onshore Wind/Solar
+Billion kWh
+Power Generation
+Offshore Wind/Other's generation was 0.7 billion kWh higher,
+mainly because Amrumbank West wind farm in the German
+North Sea and Humber Gateway wind farm in the U.K. North
+Sea were in operation during the year. Amrumbank West did
+not enter service until October 2015, and Humber Gateway
+was only in operation for five months in 2015. The availability
+ratio of 96.7 percent in 2016 surpassed the prior-year figure of
+94.5 percent, primarily because of a reduction in outages at
+Robin Rigg and an improved performance at Amrumbank West
+and Humber.
+Onshore Wind/Solar's generation was 0.5 billion kWh higher.
+Unfavorable wind conditions led to lower output in the United
+Kingdom, Sweden, and Poland. This was more than offset by
+higher output in Italy and positive effects from the commission-
+ing of Colbeck's Corner wind farm in the United States in May
+2016. Unplanned outages constituted the main reason why the
+availability ratio of 94.2 percent in 2016 was below the prior-
+year figure of 95.8 percent.
+This segment's owned generation rose by 1.2 billion kWh in 2016.
+Power Generation and Sales Volume
+35
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+2016
+2015
+2016
+2015
+Fourth quarter
+Sales
+2,255
+2,446
+2,115
+2,552
+1,919
+1,986
+6,289
+Adjusted EBITDA
+2016
+351
+Strategy and Objectives
+215
+131
+812
+806
+Renewables
+Below we report on a number of important non-financial key
+figures for this segment, such as generating capacity, power
+generation, and power sales volume.
+Generating Capacity
+At year-end 2016 this segment's fully consolidated generating
+capacity of 4,176 MW and attributable generating capacity of
+4,574 MW were both 5 percent above the corresponding figures
+at year-end 2015, 3,967 MW and 4,365 MW. The principal
+reasons for the increase were the commissioning of Colbeck's
+Corner in mid-2016 and a capacity increase at Amrumbank
+West wind farm following a software update.
+Fully Consolidated and Attributable Generating Capacity
+December 31
+MW
+Wind
+Fully Consolidated
+Attributable
+2016
+2015
+2016
+2015
+510
+501
+471
+462
+Solar
+Other
+Germany
+Sales and Adjusted EBIT
+Solar
+Wind
+278
+Combined Group Management Report
+365
+232
+E.ON Stock
+CEO Letter
+4,365
+258
+4,574
+3,967
+4,176
+Generating Capacity
+3,903
+4,103
+3,466
+3,666
+Outside Germany
+Other
+19
+19
+19
+19
+3,884
+4,084
+3,447
+3,647
+462
+471
+501
+510
+1,110
+1,112
+Adjusted EBIT
+397
+2015
+Report of the Supervisory Board
+Owned generation
+2016
+2015
+Fourth quarter
+Sales
+161
+219
+174
+229
+335
+448
+Adjusted EBITDA
+101
+133
+176
+212
+2015
+277
+Total
+2015
+9.6
+9.3
+4.1
+3.6
+13.7
+12.9
+Sales and Adjusted EBIT
+This segment's 2016 sales were €124 million below the prior-
+year figure, whereas its adjusted EBIT surpassed the prior-year
+figure by €39 million.
+Onshore Wind/Solar's sales and adjusted EBIT decreased pri-
+marily owing to declining prices across all regions and lower
+output in Europe. In addition, prior-year adjusted EBIT benefited
+from book gains and a positive one-off effect.
+Offshore Wind/Other's sales and adjusted EBIT rose by €105 mil-
+lion and €136 million, respectively, mainly because Amrumbank
+West and Humber Gateway wind farms were, for the first time,
+in operation for the entire year and because of proceeds from
+asset sales.
+Renewables
+€ in millions
+Onshore Wind/Solar
+2016
+Offshore Wind/Other
+2016
+Adjusted EBIT
+26
+47
+92
+189
+338
+202
+430
+391
+Business Report
+36
+Non-Core Business (PreussenElektra)
+Below we report on a number of important non-financial key
+figures for this segment, such as generating capacity, power
+generation, and power sales volume.
+Fully Consolidated and Attributable Generating Capacity
+The segment's fully consolidated and attributable generating
+capacity remained unchanged at 4,471 MW and 4,129 MW,
+respectively.
+Fourth quarter
+The decline in power sales resulted chiefly from a reduction in
+owned generation and in marketable power procurement due to
+the expiration of supply contracts in Belgium, the Netherlands,
+and France.
+This segment's power procured (owned generation and pur-
+chases) declined by 10.7 billion kWh year on year. The reduction
+in owned generation is principally attributable to the fact that
+Grafenrheinfeld nuclear power station produced power for part
+of the prior year (until its decommissioning at the end of June
+2015) and to unplanned production outages at Grohnde nuclear
+power station due to a damaged secondary cooling pump and
+repairs to a sensor line. The expiration of delivery contracts to
+Belgium, the Netherlands, and France led to a reduction in
+power procurement in 2016. Owned generation in the fourth
+quarter of 2016 increased slightly (by 0.4 billion kWh) because
+Grohnde nuclear power station had been decommissioned, as
+planned, in October 2015.
+Power Generation and Sales Volume
+Adjusted EBIT
+750
+796
+328
+95
+120
+121
+167
+Full year
+Sales
+728
+Power sales
+957
+524
+1,357
+1,481
+Adjusted EBITDA
+308
+422
+488
+629
+1.6
+79
+1.6
+Power sales
+0.5
+0.4
+0.5
+0.4
+Third parties
+0.2
+0.2
+0.2
+0.2
+Jointly owned power plants
+2.6
+0.7
+0.2
+0.2
+0.5
+0.4
+Purchases
+1.4
+3.1
+1.2
+0.9
+2.2
+2.2
+0.6
+2.7
+3.4
+1.4
+1.1
+0.9
+0.7
+0.9
+0.7
+Jointly owned power plants
+2.5
+2.1
+0.9
+0.7
+1.6
+1.4
+10.4
+11.6
+Third parties
+Purchases
+8.2
+7.7
+3.4
+1.4
+2.7
+Full year
+4.1
+3.7
+Owned generation
+2016
+-569
+Combined Group Management Report
+Consolidated Financial Statements
+-551
+Other expenditures and income
+Summary of Financial Highlights and Explanations
+-1,639
+-678
+€ in millions
+-546
+45
+Liabilities to affiliated companies at year-end 2016 declined
+primarily owing to the spinoff of a majority stake in Uniper
+companies and the resulting cancellation of cash-pooling with
+these companies and to the conclusion of a transfer-of-control
+agreement with Uniper SE and its subsidiaries.
+2,134
+Taxes
+2015
+Note 19 to the Consolidated Financial Statements contains
+information about treasury shares.
+Income Statement of E.ON SE (Summary)
+Interest income
+Income from equity interests
+452
+976
+Net income available for distribution
+-425
+Net income transferred to retained earnings
+The negative figure recorded under other expenditures and
+income results primarily from expenditures of €205 million for
+consulting and auditing services, personnel expenditures of
+€146 million, and additions of €117 million to provisions for
+mining-related damages.
+-6,969
+Income reduction from spinoff
+3,107
+3,612
+Withdrawals from retained earnings
+Business Report
+3,357
+755
+-2,131
+877
+Net income
+Income taxes shown for 2016 consist mainly of tax income for
+previous years. No income taxes were incurred for the 2016
+financial year owing to the net loss from a tax perspective.
+Strategy and Objectives
+-160
+At the Annual Shareholders Meeting on May 10, 2017, manage-
+ment will propose that net income available for distribution be
+used to pay a cash dividend of €0.21 per ordinary share. Remain-
+ing income available for distribution will be brought forward as
+retained earnings.
+Management's proposal for the use of net income available for
+distribution is based on the number of ordinary shares on
+March 13, 2017, the date the Financial Statements of E.ON SE
+were prepared. The number of ordinary shares could change
+between this date and the date of the Annual Shareholders
+Meeting. In this case, the Annual Shareholders Meeting will
+be presented with an adjusted proposed resolution for the use
+of net income available for distribution. The dividend in the
+adjusted proposed resolution will be unchanged at €0.21 per
+ordinary share. In this case, however, the total dividend payout
+and the amount brought forward as retained earnings will be
+adjusted accordingly.
+The complete Financial Statements of E.ON SE, with the unquali-
+fied opinion issued by the auditor, PricewaterhouseCoopers
+GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, will be
+announced in the Bundesanzeiger. Copies are available on
+request from E.ON SE and at www.eon.com.
+Withdrawal from capital reserve
+E.ON Stock
+Other liabilities
+CEO Letter
+Receivables from affiliated companies
+8,089
+47,986
+48,004
+22,919
+Other receivables and assets
+1,734
+Liquid funds
+4,664
+Current assets
+14,487
+1,764
+4,343
+29,026
+Accrued expenses
+30
+37
+Asset surplus after offsetting of benefit
+obligations
+15
+1
+Total assets
+46
+37,382
+Non-current assets
+37,368
+Financial assets
+E.ON SE und Uniper SE concluded a Spinoff and Takeover
+Agreement on April 18, 2016. Under this agreement, E.ON SE
+transferred by means of a spinoff its entire ownership interest
+in Uniper Beteiligungs GmbH, with all rights and obligations, as
+an entirety to Uniper SE in return for the transfer of Uniper SE
+stock to E.ON SE shareholders (the transaction was therefore a
+spinoff through transfer within the meaning of Section 123,
+Paragraph 2, Item 1 of the German Reorganization Act). The
+spinoff and stock-market listing of Uniper SE were successfully
+concluded in September 2016. As a result, Uniper Beteiligungs
+GmbH in the amount of €6,968.6 million was removed from
+the line item interest in affiliated companies. The decline in
+financial assets principally reflects a withdrawal from the capi-
+tal reserves of E.ON Beteiligungen GmbH in the amount of
+€4,916 million and an intragroup loan of €1,233 million to
+E.ON UK Holding Company Limited.
+E.ON SE is the parent company of the E.ON Group. As such,
+its earnings, financial, and asset situation is affected by income
+from equity interests. The positive figure recorded for this
+item in 2016 reflects, in particular, a withdrawal from the capi-
+tal reserves of E.ON Beteiligungen GmbH in the amount of
+€3,784 million and a profit transfer of €216 million from E.ON
+Iberia Holding GmbH. The main countervailing factors were a
+loss transfer of €1,186 million from E.ON Beteiligungen GmbH
+and a loss transfer of €722 million from E.ON Energie AG.
+77,068
+51,914
+Total equity and liabilities
+10
+1,036
+845
+5
+Deferred income
+Report of the Supervisory Board
+60,892
+Liabilities to affiliated companies
+2,661
+2,578
+Provisions
+12,469
+5,384
+Equity
+77,068
+51,914
+43,102
+Other Financial and Non-financial Performance
+Indicators
+ROCE Performance in 2016
+The cost of capital is determined by calculating the weighed-
+average cost of equity and debt. This average represents the
+market-rate returns expected by stockholders and creditors.
+The cost of equity is the return expected by an investor in E.ON
+stock. The cost of debt equals the long-term financing terms that
+apply in the E.ON Group. The parameters of the cost-of-capital
+determination are reviewed on an annual basis.
+Goodwill, intangible assets, and property, plant, and equipment¹
+€ in millions
+E.ON Group ROCE and Value Added
+The table below shows the E.ON Group's ROCE, value added,
+and their derivation.
+10.4 percent was above our pretax cost of capital, which
+declined relative to the prior year. This resulted in added value
+of €1.4 million.
+ROCE declined from 10.9 percent in 2015 to 10.4 percent in
+2016, primarily because of the reduction in our adjusted EBIT.
+An increase in average capital employed was another factor.
+This resulted mainly from the capitalization of costs relating
+to dismantling obligations at Preussen Elektra. Our ROCE of
+47
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+signals a higher risk than the risk level of the overall market; a beta factor of less than one
+signals a lower risk.
+2The beta factor is used as an indicator of a stock's relative risk. A beta of more than one
+with German treasury notes.
+¹The market premium reflects the higher long-term returns of the stock market compared
+Value added (ROCE - cost of capital) x annual average capital
+employed.
+|=
+2016
+14
+2015
+31,034
+29,974
+Capital employed in continuing operations (at year-end)
+-1,264
+-1,402
+Non-interest-bearing provisions³
+-4,340
+-4,144
+-5,156
+-4,929
+Value added measures the return that exceeds the cost of capital
+employed. It is calculated as follows:
+Other non-interest-bearing assets/liabilities, including deferred income and deferred tax assets²
+Current assets
+785
+Inventories
+34,721
+35,520
+Non-current assets
+4,251
+4,486
+Shares in affiliated and associated companies and other share investments
+30,470
+816
+Annual average capital employed does not include the marking
+to market of other share investments. The purpose of excluding
+this item is to provide us with a more consistent picture of our
+ROCE performance.
+Annual average capital employed represents the interest-bearing
+capital invested in our operating business. It is calculated by sub-
+tracting non-interest-bearing available capital from non-current
+and current operating assets. Goodwill from acquisitions is
+included at acquisition cost, as long as this reflects its fair value.
+Changes to E.ON's portfolio during the course of the year are
+factored into capital employed.
+Analyzing Value Creation by Means of ROCE and Value Added
+In 2016 we replaced ROACE with ROCE as key performance
+indicator for assessing the value performance of our operating
+business. ROCE is a pretax total return on capital and is defined
+as the ratio of our EBIT to annual average capital employed.
+An important difference between ROCE and ROACE lies in how
+they factor in assets. With ROACE, depreciable assets are
+recorded at half of their original acquisition or production cost;
+with ROCE, depreciable assets are recorded at their book value.
+27%
+31%
+Average tax rate
+7.30%
+6.70%
+Cost of equity after taxes
+0.90
+0.92
+Indebted beta factor²
+Cost of equity before taxes
+1.25%
+6.75%
+0.52
+Debt-free beta factor
+6.75%
+Market premium¹
+0.5%
+Risk-free interest rate
+2015
+2016
+Cost of Capital
+Our review of the parameters in 2016 led us to adjust our after-
+tax cost of capital from 4.9 percent to 4 percent, mainly because
+of a lower risk-free interest rate resulting from the persistently
+low interest-rate environment. The table below shows the deri-
+vation of cost of capital before and after taxes.
+0.50
+ROCE and Value Added
+Cost of Capital
+9.7%
+Cost of debt before taxes
+6.70%
+5.80%
+Cost of capital before taxes
+4.90%
+4.00%
+Cost of capital after taxes
+50%
+55%
+Share of debt
+10.0%
+50%
+Share of equity
+2.40%
+1.80%
+Cost of debt after taxes
+27%
+31%
+Marginal tax rate
+3.4%
+2.6%
+45%
+equipment
+Our operating cash flow of €3 billion was €1.2 billion below the
+prior-year figure of €4.2 billion, primarily because of higher net
+tax payments and the absence of cash inflow from the E&P
+business, which has now been divested. In addition, an increase
+in working capital was only partially offset by countervailing
+effects, such as lower interest payments.
+2016
+Outlook
+Short term
+Long term
+Baa1
+E.ON SE Ratings
+Standard & Poor's ("S&P") and Moody's long-term ratings for
+E.ON are BBB+ and Baal, respectively. Moody's downgraded
+E.ON's long-term rating from A3 to Baal in March 2015, S&P
+from A- to BBB+ in May 2015. In February 2016 both rating
+agencies placed E.ON's long-term ratings on review for possible
+downgrades. The actions were based on a number of factors,
+including a sector-wide review of European utility companies
+with exposure to commodity and power price developments.
+The decisions were also based on the uncertainties surrounding
+the policy discussions on the possible funding of German nuclear
+provisions. In May 2016 both S&P and Moody's concluded their
+reviews and affirmed their long-term ratings of BBB+ and Baa1,
+respectively. The outlook for both ratings is negative. The short-
+term ratings are A-2 (S&P) and P-2 (Moody's).
+Alongside financial liabilities, E.ON has, in the course of its busi-
+ness operations, entered into contingencies and other financial
+obligations. These include, in particular, guarantees, obligations
+from legal disputes and damage claims, current and non-current
+contractual, legal, and other obligations. Notes 26, 27, and 31
+to the Consolidated Financial Statements contain more infor-
+mation about E.ON's bonds as well as liabilities, contingencies,
+and other commitments.
+September 13, 2016, we reduced the credit facility from €5 billion
+to €3.5 billion in connection with the Uniper spinoff. This facility
+has not been drawn on and instead serves as a reliable, ongoing
+general liquidity reserve for the E.ON Group. Participation in the
+credit facility indicates that a bank belongs to E.ON's core group
+of banks.
+E.ON also has access to an originally five-year, €5 billion syndi-
+cated revolving credit facility, which was concluded with 24 banks
+on November 6, 2013, and which includes two options to extend
+the facility, in each case for one year. In 2014 E.ON exercised
+the first option and extended the facility for one year to 2019. In
+2015 E.ON, with the banks' agreement, postponed until 2016
+a possible exercise of the second option to extend the facility for
+one more year. We did not exercise this second option. Effective
+In addition to our DIP, we have a €10 billion European Commer-
+cial Paper ("CP") program and a $10 billion U.S. CP program
+under which we can issue short-term liabilities. We had no CP
+outstanding at year-end 2016 (prior year: €0 million).
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE and E.ON International Finance B.V.'s cur-
+rently outstanding bonds were issued under our Debt Issuance
+Program ("DIP"). The DIP enables us to issue debt to investors
+in public and private placements. It was last extended for one
+year in April 2015 with a total volume of €35 billion, of which
+about €9.7 billion was utilized at year-end 2016. After the DIP
+expired in April 2016 we did not extend it because of the Uniper
+spinoff. E.ON SE intends to renew the DIP in 2017.
+¹Includes private placements.
+17.7
+14.2
+Total
+3.5
+1.9
+Other liabilities
+Commercial paper
+0.4
+0.4
+Promissory notes
+0.1
+0.2
+Other currencies
+0.2
+0.2
+29,117
+JPY
+2.8
+P-2
+negative
+BBB+
+A-2
+Investments
+2025+
+2024
+2023
+2022
+2021
+2020
+2019
+2018
+2017
+December 31, 2016
+1.0
+2.0
+3.0
+2.8
+4.0
+Maturity Profile of Bonds and Promissory Notes Issued by E.ON SE,
+E.ON International Finance B.V., and E.ON Beteiligungen GmbH
+with the highest degree of transparency. To achieve this purpose,
+we hold E.ON debt investor updates in major European financial
+centers, conference calls for debt analysts and investors, and
+informational meetings for our core group of banks.
+Providing rating agencies and bond investors with timely, com-
+prehensive information is an important component of our creditor
+relations. The purpose of our creditor relations is to earn and
+maintain our investors' trust by communicating a clear strategy
+41
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Standard & Poor's
+Moody's
+negative
+€ in billions
+USD
+4.7
+4.0
+4,724
+4,327
+Non-current securities
+Financial liabilities
+FX hedging adjustment
+Net financial position
+8,190
+8,573
+2015
+2016
+December 31
+€ in millions
+Liquid funds
+Economic Net Debt
+These and other factors led to a net financial position of approx-
+imately just €0.9 billion at year-end 2016. By contrast, the pro-
+visions included in our economic net debt rose by €2.3 billion
+owing to the above-described revaluation of these provisions.
+The comparability of our economic net debt in 2016 and 2015 is
+subject to a number of significant restrictions. First, the spinoff
+and deconsolidation of Uniper significantly reduced the amount
+of several line items of our Consolidated Balance Sheets, in
+particular our net financial position. Second, the accounting
+treatment of the measures to fund Germany's nuclear energy
+phaseout involved a revaluation of the remaining provisions
+and a substantial increase in asset-retirement obligations due
+to the inclusion of the risk surcharge.
+Economic Net Debt
+We aim to reduce our debt factor to about 4 over the medium
+term.
+-14,227
+Germany's two houses of parliament enacted a law to fund the
+country's phaseout of nuclear energy. This altered the nature
+and scope of E.ON's remaining nuclear asset-retirement obliga-
+tions. In addition, the deconsolidation of Uniper led to substantial
+changes in our debt line items. The comparability of our 2016
+and 2015 economic net debt is therefore limited. In view of these
+structural changes, it did not make sense to adjust the prior-year
+figures. Consequently, we apply our new methodology effective
+January 1, 2016, and have left the prior-year figures unadjusted.
+We manage E.ON's capital structure using our debt factor, which
+is equal to our economic net debt divided by adjusted EBITDA;
+it is therefore a dynamic debt metric. Economic net debt includes
+not only our financial liabilities but also our provisions for pen-
+sions and asset-retirement obligations.
+With our target capital structure we aim to sustainably secure a
+strong BBB/Baa rating.
+Our finance strategy focuses on E.ON's capital structure. Ensuring
+that E.ON's access to capital markets is commensurate with its
+debt level is at the forefront of this strategy.
+Finance Strategy
+E.ON presents its financial condition using, among other financial
+measures, economic net debt, debt factor, and operating cash flow.
+Financial Situation
+99
+39
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The interest-rate environment at the balance-sheet date led in
+some cases to negative real interest rates on asset-retirement
+obligations. As a result, our provisions exceed the amount of our
+asset-retirement obligations as they stood at year-end 2016
+without factoring in discounting and cost-escalation effects.
+This limits the relevance of our economic net debt as a key figure.
+We want economic net debt to continue to serve as a useful
+key figure that aptly depicts our debt situation. In the case of
+material provisions affected by negative real interest rates, we
+henceforth use the aforementioned actual amount of the obli-
+gation instead of the balance-sheet figure to calculate our eco-
+nomic net debt.
+Investments in our core business were €57 million above, total
+investments €58 million below, the prior-year level. We invested
+€3,035 million in property, plant, and equipment and intangible
+assets (prior year: €2,982 million). Share investments totaled
+€134 million versus €245 million in the prior-year period.
+-17,742
+218
+GBP
+4.7
+EUR
+11.9
+Bonds¹
+2016
+€ in billions
+6.0
+13.8
+December 31
+2015
+Financial Liabilities
+they arise. In the past, external funding was generally carried out
+by our Dutch finance subsidiary, E.ON International Finance B.V.
+("EIF"), under guarantee of E.ON SE or by E.ON SE itself, and the
+funds were subsequently on-lent in the Group. E.ON issued no
+new bonds in 2016.
+40
+Business Report
+390
+The key objective of our funding policy is for E.ON to have access
+to a variety of financing sources at all times. We achieve this
+objective by basing our funding policy on the following principles.
+First, we use a variety of markets and debt instruments to max-
+imize the diversity of our investor base. Second, we issue bonds
+with terms that give our debt portfolio a balanced maturity
+profile. Third, we combine large-volume benchmark issues with
+smaller issues that take advantage of market opportunities as
+¹This figure is not the same as the asset-retirement obligations shown in our Consolidated
+Balance Sheet (€22,515 million). This is because we calculate our economic net debt in part
+based on the actual amount of our obligations with reasons for this being explained above.
+2Not adjusted for Uniper; figure as reported in the 2015 Annual Report.
+Debt Factor
+Economic net debt
+Adjusted EBITDA
+7,5572
+3.72
+4,939
+5.3
+-27,714
+-26,320
+-18,894
+-21,3741
+-4,210
+-4,009
+Provisions for pensions
+Asset-retirement obligations
+-4,610
+-937
+Funding Policy and Initiatives
+Intangible assets and property, plant and
+Investments
+2016
+73
+46,296
+%
+2015
+%
+2016
+Dec. 31,
+Dec. 31,
+Additional information about our asset situation (including infor-
+mation on the above-mentioned impairment charges) is con-
+tained in Notes 4 to 26 to the Consolidated Financial Statements.
+Total equity and liabilities
+Current liabilities
+Non-current liabilities
+Equity
+Total assets
+Current assets
+Non-current assets
+€ in millions
+Consolidated Assets, Liabilities, and Equity
+Current liabilities declined by 31 percent relative to year-end
+2015. The deconsolidation of Uniper's operations was partially
+offset by the reclassification of non-current provisions for the
+final storage of nuclear waste.
+Non-current liabilities declined by 36 percent from the figure at
+year-end 2015. As on the asset side, the reduction reflects the
+deconsolidation of Uniper's operations. In addition, provisions
+for the final storage of nuclear waste were reclassified as
+non-current liabilities.
+waste. The loss from discontinued operates includes the
+€7 billion impairment charge on Uniper's book value to reflect its
+lower market capitalization and an additional deconsolidation
+loss of €3.6 billion resulting mainly from previously unrealized
+currency-translation effects that had been recorded in equity.
+The E.ON Group's equity at year-end was €1.3 billion. Equity
+attributable to shareholders of E.ON SE was -€1 billion.
+Our equity ratio (including non-controlling interests) at year-end
+2016 was 2 percent, which is substantially below the year-end
+2015 figure of 17 percent. The decline reflects the transfer of
+Uniper stock to E.ON shareholders, our net loss, the remeasure-
+ment of defined-benefit plans due to lower actuarial interest
+rates, and the dividend payout. Our net loss primarily reflects a
+loss from discontinued operations of approximately €13.8 billion
+and items in the amount of €3.6 billion in conjunction with
+Germany's law to reassign responsibility for the country's nuclear
+Our asset situation reflects the deconsolidation of Uniper's
+operations effective December 31, 2016, which led to a signifi-
+cant reduction in our total assets and liabilities relative to year-
+end 2015. This affects both our non-current and current assets.
+Effective the balance-sheet date, E.ON SE's remaining Uniper
+stake is recorded under financial investments as a company
+accounted for using the equity method.
+Asset Situation
+43
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+73,612
+65
+17,403
+27
+€ in millions
+18
+December 31
+2015
+Balance Sheet of E.ON SE (Summary)
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code (in version included in the
+Accounting Directive Implementation Act, which took effect
+on July 23, 2015), the SE Ordinance (in conjunction with the
+German Stock Corporation Act), and the Electricity and Gas
+Supply Act (Energy Industry Act).
+E.ON SE's Earnings, Financial, and Asset
+Situation
+44
+Business Report
+100
+113,693
+100
+63,699
+29
+33,444
+E.ON Stock
+36
+54
+61,172
+62
+39,287
+17
+19,077
+2
+1,287
+100
+113,693
+100
+63,699
+35
+40,081
+23,125
+Report of the Supervisory Board
+CEO Letter
+Cash provided by financing activities of continuing operations
+amounted to -€1.2 billion compared with -€3.9 billion in the prior
+year. The change of roughly +€2.7 billion is mainly attributable
+to a €2.7 billion reduction in the net repayment of financial lia-
+bilities. A €0.3 billion increase in the dividend payout to E.ON SE
+shareholders was almost entirely offset by net cash inflows
+from changes in capital (changes in minority ownership interests
+in fully consolidated Group companies).
+-6
+16
+15
+(PreussenElektra)
+Non-Core Business
++2
+3,089
+3,146
+Investments in core business
+-38
+-21
+Consolidation
++51
+65
+Other (divested operations)
+98
++6
+1,010
+1,070
+Renewables
++9
+531
+580
+Customer Solutions
+-7
+1,521
+1,419
+Energy Networks
++1-%
+2015
+Corporate Functions/Other
+€ in millions
+8
+-93
+Cash provided by investing activities of continuing operations
+amounted to around -€3 billion compared with €1.4 billion in
+the prior year. Of this -€4.4 billion change, -€3.5 billion resulted
+from lower cash inflows from disposals, mainly relating to the
+non-recurrence of proceeds on the sale of the business in Spain,
+certain operations in Italy (solar, hydro, and conventional gener-
+ation), the E&P business in Norway, and the remaining 49-percent
+stake in the former E.ON Energy from Waste. Investments were
+almost unchanged. We recorded net cash outflows from sale or
+purchase of securities, financial liabilities, and fixed investments
+of -€0.8 billion compared with +€0.2 billion in 2015.
+¹From continuing operations.
+Cash provided by (used for) financing
+activities
+-3,912
+-1,152
+1,443
+-3,041
+Cash provided by (used for) investing
+activities
+4,749
+3,974
+taxes
+Operating cash flow before interest and
+4,191
+2,961
+122
+Cash provided by (used for) operating
+activities of continuing operations
+(operating cash flow)
+2016
+€ in millions
+Cash Flow¹
+Cash Flow
+Investments at Non-Core Business (nuclear energy operations
+in Germany) were slightly below the prior-year level.
+Investments at Renewables increased by €60 million. Onshore
+Wind/Solar's investments rose by €243 million, primarily
+because of the completion of a wind farm in the United States.
+Offshore/Other's investments declined by €183 million owing
+to a reduction in expenditures for new-build projects.
+Customer Solutions invested €49 million more than in the prior-
+year period, principally because of higher investments in the
+United Kingdom, in Sweden, at E.ON Connecting Energies, and in
+the Czech Republic. Investments in the United Kingdom went
+toward metering and efficiency projects. Investments in Sweden
+served to maintain, upgrade, and expand existing assets as well
+as the heat distribution network. The increase in E.ON Connect-
+ing Energies' investments principally reflects the expansion of
+its business of providing energy-efficiency solutions to industrial
+and commercial customers in Germany and the initial consoli-
+dation of a business in Italy. The completion of combined-heat-
+and-power units and higher investments in network-services
+equipment were among the reasons for the increase in the
+Czech Republic.
+42
+Business Report
+Energy Networks' investments were €102 million, or 7 percent,
+lower than the prior-year level due to a significant reduction in
+investments at the East-Central Europe/Turkey reporting unit.
+The responsibility for implementing the energy transition in
+Germany is shared across society by policymakers and companies,
+academics and consumers. The expansion of our distribution
+networks provides important support to the energy transition
+and contributes substantially to its success. The rapid growth
+of renewables makes it necessary to expand and upgrade the
+distribution network so that it can accept and transport increased
+renewables output. This is the only way to continue to ensure
+supply security for energy customers into the future. In 2016
+our services territories around Germany again saw an increase
+in the number of generating facilities subsidized under the
+Renewable Energy Law ("REL"). The number of REL facilities rose
+by 3 percent year on year to around 375,000. Installed REL
+capacity in our distribution networks increased from 31 GW to
+34 GW. The increase in the number of network connections
+for REL facilities led to significant construction activity in our
+distribution networks. Our Energy Networks segment invested
+€846 million in Germany in 2016, significantly more (+6 percent)
+than in the prior year. In addition, the connection of new resi-
+dential developments led to an increase in customer connections
+in Germany in 2016. Investments in Sweden were up slightly.
+-2
+3,227
+3,169
+E.ON Group investments
+2015
+Capital employed in continuing operations (annual average)4
+Adjusted EBIT5
+Many and diverse stakeholders-customers and suppliers,
+policymakers and government agencies, employees and trade
+unions, nongovernmental organizations and regional interest
+groups, equity analysts and investors-have high expectations
+of us and the entire energy industry. Their demands include
+more renewables and innovative and energy-efficient customer
+solutions as well as a diverse workforce and a safe and healthy
+workplace. We take these demands seriously and strive system-
+atically to make our company more sustainable.
+29,117
+29,546
+Our commitment to transparency includes subjecting our sus-
+tainability performance to independent, detailed assessments by
+investors and rating agencies. The results of these assessments
+provide important guidance to investors and to us. They help us
+identify our strengths and weakness and further improve our
+performance. We are therefore very pleased to be listed in the
+Multi and Water Utilities category in the 2016 Dow Jones Sus-
+tainability Europe Index and World Index; we also earned a
+higher score for our economic and environmental performance.
+In 2016 we were again included in the RobecoSAM Sustainability
+Yearbook and, as a leading company, received a bronze rating.
+revised our sustainability effort. Our objective is to continually
+improve our performance and, looking further ahead, to become
+one of the leading sustainable companies in our industry. We
+therefore defined five main sustainability focus areas for E.ON,
+which we describe below under "Highlights in 2016." Each
+E.ON unit designs a sustainability improvement plan consisting
+of specific measures and targets. The units' sustainability
+improvement plans, the progress toward their respective targets,
+and the results of the materiality analysis are presented to,
+and discussed by, the Sustainability Governance Council on a
+regular basis.
+We have conducted a materiality analysis at regular intervals
+since 2006. Its purpose is to identify our stakeholders' expecta-
+tions of us. Our annual online Sustainability Report describes
+the issues that are material to our stakeholders and to us as a
+company as well as how we address these issues. Our reporting
+is based on the Global Reporting Initiative's G4 sustainability
+reporting guidelines.
+Corporate Sustainability
+48
+Business Report
+1,217
+1,370
+6.7%
+5.8%
+We successfully completed our most recent sustainability
+work program in 2015. E.ON spun off Uniper in 2016 and now
+focuses on renewables, energy networks, and customer solutions.
+This transformation makes sustainability a centerpiece of our
+corporate strategy, thereby raising stakeholders' expectations
+for us to operate sustainably. To meet these expectations, we
+10.4%
+10.9%
+3,083
+3,168
+Cost of capital before taxes
+Value added'
+ROCE6
+"In order to better depict intraperiod fluctuations in average capital employed, annual average capital employed is calculated as the arithmetic average of the amounts at the beginning of the year
+and the end of the year. In 2015 the annual average and the year-end figure were the same.
+5Adjusted for non-operating effects, discontinued operations, and divested operations.
+6ROCE = adjusted EBIT divided by annual average capital employed; for 2015, ROCE = adjusted EBIT divided by annual capital employed.
+"Value added = (ROACE - cost of capital) x annual average capital employed; for 2015, value added = (ROACE - cost of capital) x annual capital employed.
+¹Depreciable non-current assets are included at their book value. Goodwill from acquisitions is included at acquisition cost, as long as this reflects its fair value.
+2Examples of other non-interest-bearing assets/liabilities include income tax receivables and income taxes as well as receivables and payables relating to derivatives.
+³Non-interest-bearing provisions mainly include current provisions, such as those relating to sales and procurement market obligations. They do not include provisions for pensions or for
+nuclear-waste management.
+3
+2016
+Renewables
+11
+Customer Solutions
+4
+2015
+12
+Part-time Rate
+10
+7
+Energy Networks
+Percentages
+56
+Business Report
+26
+Corporate Functions/Other¹
+3
+12
+¹Includes E.ON Business Services.
+8
+2015
+2016
+Percentages
+Turnover Rate
+To continually improve their safety performance, our units have
+in place certified health, safety, and environment ("HSE")
+management systems that meet international standards. To
+ensure improvement is continuous, our units develop HSE
+improvement plans based on a management review of their
+performance in the prior year. In addition, in 2016 the top
+executives of all units were required to participate in a specially
+designed HSE leadership training module.
+Regrettably, three employees died on the job in 2016, and another
+suffered fatal injuries in a traffic accident. The accidents occurred
+in Germany, the United Kingdom, and the Czech Republic.
+Occupational health and safety have the highest priority at
+E.ON. A key performance indicator ("KPI") for our safety is total
+recordable injury frequency ("TRIF")-which measures the
+number of reported fatalities, lost-time injuries, restricted-work
+injuries, and medical-treatment injuries that occur on the job—
+per million hours of work. Our TRIF figures also include E.ON
+companies that are not fully consolidated but over which
+E.ON has operational control. E.ON employees' TRIF in 2016
+was 2.5, the same low level as in the prior year. The change is
+partly a result of a further improvement in our reporting culture.
+Occupational Health and Safety
+The turnover rate resulting from voluntary terminations averaged
+5.3 percent across the organization, significantly higher than
+in the prior year (3.5 percent). The increase was due to voluntary
+terminations as part of restructuring programs in Romania
+along with an increase in voluntary terminations in the United
+Kingdom.
+27
+9
+8
+E.ON Group
+2
+Other (divested operations)
+5
+5
+Non-Core Business (PreussenElektra)
+9
+Core business
+56
+12
+18
+Customer Solutions
+51 and older
+21
+20
+Energy Networks
+31 to 50
+2015
+2016
+Percentages
+30 and younger
+Percentages at year-end
+Employees by Age
+Proportion of Female Employees
+The average E.ON Group employee was about 42 years old and
+had worked for us for about 14 years.
+At the end of 2016, 32.1 percent of our employees were
+women, incrementally higher than the figure of 32 percent at
+the end of 2015.
+Gender and Age Profile, Part-Time Staff
+837
+702
+846
+43
+55
+39
+21
+18
+2015
+2016
+¹Includes E.ON Business Services.
+32.0
+32.1
+E.ON Group
+36
+Other (divested operations)
+Energy Networks
+13
+Non-Core Business (PreussenElektra)
+33
+33
+Core business
+45
+45
+Corporate Functions/Other¹
+23
+Renewables
+4.1
+5.5
+Customer Solutions
+5.7
+5.6
+901
+901
+Core business
+2.6
+2.0
+89
+Non-Core Business (PreussenElektra)
+63
+Renewables
+Customer Solutions
+0.5
+0.6
+13
+17
+8.4
+8.4
+Corporate Functions/Other
+70
+89
+3.3
+We expect the E.ON Group's 2017 adjusted EBIT to be between
+€2.8 and €3.1 billion and its 2017 adjusted net income to be
+between €1.20 and €1.45 billion. In addition, we expect the E.ON
+Group to achieve a cash-conversion rate of at least 80 percent
+and ROCE of 8 to 10 percent.
+For our 2017 earnings forecast, we adjusted our internal financial
+key figures with respect to the treatment of nuclear asset-
+retirement obligations. Effects resulting from the valuation of
+these provisions at the balance-sheet date are now reported
+under non-operating earnings; however, this does not apply to
+the accruals on these provisions. This change, which improves
+the depiction of E.ON's underlying earnings strength, takes effect
+on January 1, 2017. In view of the fundamental change in our
+business and its structure in 2016, it did not make sense to adjust
+the prior-year figures.
+Our forecast for full-year 2017 earnings continues to be signifi-
+cantly influenced by the difficult business environment in the
+energy industry. Examples include the British pound's weakness
+following the Brexit vote, interventionist remedies proposed by
+Britain's Competition and Markets Authority, and the foreseeable
+reduction of network returns in Germany. In addition, the current
+low-interest-rate environment and increasingly fierce competi-
+tion are putting downward pressure on achievable returns.
+Forecast Earnings Performance
+Anticipated Earnings Situation
+The number of employees in the E.ON Group (excluding appren-
+tices and board members/managing directors) will decline
+going forward.
+Employees
+The OECD forecasts a gradual acceleration of global economic
+growth in 2017 and 2018. It expects the global economy to
+grow by 3.3 percent in 2017 and by 3.6 percent in 2018. The
+corresponding figures for the United States are 2.3 percent and
+3 percent, where weaker growth (1.6 percent and 1.7 percent)
+is forecast for the euro zone. The OECD sees substantial political
+uncertainty and financial risks. It believes that fiscal initiatives
+and structural reforms should lead to stronger growth.
+Macroeconomic Situation
+Business Environment
+Forecast Report
+58
+Forecast Report
+5.5
+5.3
+990
+971
+E.ON Group
+4.3
+799
+821
+2015
+2016
+5.3
+E.ON Group
+1.4
+1.4
+Other (divested operations)
+2.0
+1.7
+Non-Core Business (Preussen Elektra)
+3.6
+710
+Core business
+6.2
+7.7
+Corporate Functions/Other¹
+10.5
+8.1
+Renewables
+4.4
+6.0
+3.5
+1.5
+¹Includes E.ON Business Services.
+Report of the Supervisory Board
+2015
+2016
+Percentage of workforce
+Headcount
+Energy Networks
+At year-end
+Apprentices in Germany
+Established in 2003 as part of a pact between industry and
+the German federal government, the E.ON training initiative to
+combat youth unemployment was extended for three more
+years and will now continue through 2020. In 2015 it helped
+more than 460 young people in Germany get a start on their
+careers through internships that prepare them for an apprentice-
+ship as well as school projects and other programs. The number
+of participants declined from 550 in 2015 owing to a tighter
+budget and a redesign of the initiative.
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 971 apprentices and
+work-study students in Germany at year-end 2016. This repre-
+sented 5.3 percent of E.ON's total workforce in Germany, com-
+pared with 5.5 percent at the end of the prior year. The number
+of apprentices as well as their proportion of our total workforce
+declined relative to the prior year. This is mainly attributable to
+a reduction in the number of apprentices taken on at our nuclear
+power stations.
+Apprenticeships
+Company contributions to employee pension plans represent an
+important component of an employee's compensation package
+and have long had a prominent place in the E.ON Group. They
+are an important foundation of employees' future financial secu-
+rity and also foster employee retention. E.ON companies supple-
+ment their company pension plans with attractive programs to
+help their employees save for the future.
+Compensation, Pension Plans, Employee Participation
+Attractive compensation and appealing fringe benefits are
+essential to a competitive work environment. The compensation
+plans of nearly all our employees contain an element that reflects
+the company's performance. This element is typically based
+on the same key figures that are also used in the Management
+Board's compensation plan.
+The healthcare systems of the countries we operate in differ
+considerably in terms of their delivery of medical care, their
+health-insurance and pension systems, and their legal require-
+ments for occupational health and safety. Nevertheless, the
+most common illnesses that make employees unable to work are
+the same in all countries: musculoskeletal disorders, psycho-
+logical problems, and respiratory infections. The leading causes
+of death are the same as well: heart disease and cancer. E.ON's
+health policies focus on preventing these diseases. We strive
+to prevent psychological problems by providing mental-health
+training and by conducting a program that gives employees
+access to outside counselors. Check-ups and preventive care
+by our company doctors help reduce general and workplace-
+specific risks. We also conduct campaigns to raise awareness
+of bowel cancer and the importance of detecting cancer early.
+Flu vaccination programs help prevent dangerous respiratory
+illnesses. Together, these programs address the increasingly
+important issue of maintaining our employees' capacity to work.
+57
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+351
+A total of 3,517 employees, or 8 percent of all E.ON Group
+employees, were on a part-time schedule. Of these, 2,898, or
+82 percent, were women.
+351
+In 2016 we also completely revised our talent landscape. The
+new landscape, which will be introduced in 2017, will enable
+us to continue to meet our business units' changing needs and
+requirements. A key criterion during the design phase was to
+increase the ways in which we identify and develop talent at the
+various levels of our company. In addition, the new talent land-
+scape encompasses not only the typical executive career path
+but also those of project managers and experts. It offers greater
+variation in each career path, promotes flexibility, and tailors an
+individual development program for each talented employee. In
+short, it puts our people at the center and facilitates career plan-
+ning that meets the highest standards of today's business world.
+In 2016 we conducted more events for talented employees. The
+main purpose of these events is for the participants to get to
+know each other, to network, and to share information across
+organizational boundaries. In addition, participants discuss
+thoroughly issues that are important to our business.
+The foundation of our strategic, needs-oriented talent manage-
+ment is the Management Review Process, which we conducted
+again in 2016. It helps ensure the continued professional devel-
+opment of managers and executives, our various units and job
+families, and the entire organization. It also creates transparency
+about our current talent situation and our needs for the future.
+They will work in a wide range of job families (including engi-
+neering, IT, sales, finance, corporate development, and HR).
+They come from around the world (including the United
+Kingdom, Germany, Azerbaijan, Pakistan, Vietnam, Nigeria,
+China, India, Hungary, Romania, Spain, and Sweden).
+At 33 percent, the proportion of women participants
+remains high.
+•
+•
+•
+This recognition was one of the reasons we were able to attract
+outstanding talent, including recent university graduates. The
+E.ON Graduate Program remained one of the most coveted ways
+of joining our company. Participants are assigned a mentor,
+receive special training, and gain experience during placements
+at their home E.ON unit as well as at other units in the same
+country and elsewhere. Sixty-four graduates entered the program
+in 2016. Their backgrounds and interests reflect the emphasis
+E.ON places on diversity:
+Professional Development
+In 2016 E.ON's status as a top employer was again confirmed
+by prestigious rankings.
+Talent Management
+52
+Business Report
+Prior to E.ON's adoption of a functionally oriented management
+model, in 2014 management and the Group Works Council in
+Germany concluded the Agreement on Future Social Partnership
+in the Context of the Functionally Oriented Management Model.
+The agreement, which stipulates the principles of the future
+social partnership at E.ON's operations in Germany, manifests
+a shared responsibility for the company and its employees and
+represents a special milestone in the history of codetermination
+at E.ON.
+Alongside the forms of codetermination required by law in
+European countries outside Germany, the involvement of
+employee representatives in these countries is fostered by
+the SE Agreement, by collaboration at the Group level, and
+by the Agreement on Minimum Standards for Restructuring
+Measures, which was concluded between management and
+the European Works Council (the forerunner of the SE Works
+Council of E.ON SE) in 2010.
+Collaborative Partnership with Employee Representatives
+E.ON places a strong emphasis on working with employee
+representatives as partners. This collaborative partnership is
+integral to our corporate culture. At a European level, E.ON
+management works closely with the SE Works Council of E.ON
+SE, whose members come from all European countries in which
+E.ON operates. Under the SE Agreement, the SE Works Council
+of E.ON SE is informed and consulted about issues that transcend
+national borders.
+representatives to work together openly and constructively
+throughout Phoenix. A Project Council consisting of leading
+employee representatives was created, as it had been with
+One2two. It met for the first time in December, marking the
+beginning of employee representatives' continual involvement
+in Phoenix.
+Phoenix and the Involvement of Employee Representatives
+In the fourth quarter of 2016 E.ON launched a restructuring
+program called Phoenix. It will be conducted in keeping with
+our well-established tradition of working closely with employee
+representatives and involving them early. A Joint Declaration
+and Framework Agreement of the Management Board of E.ON SE,
+the Executive Committee of the SE Works Council of E.ON SE
+and the Group Works Council of E.ON SE was concluded in
+November and thus at an early stage of Phoenix. This document
+will serve as the foundation for management and employee
+The purpose of our talent management is to hire highly qualified
+people and to foster our employees' ongoing personal and pro-
+fessional development.
+We launched our HR Online Learning App, a new learning
+management system, in 2016. It better integrates our formal
+learning and training offerings into our peoples' workday. Addi-
+tional user-friendly improvements to the new learning platform
+are on the way. They will enable our people access learning
+offerings on their mobile devices and will supplement our formal
+offerings with informal learning opportunities, such as the use
+of additional learning resources alongside our course offerings.
+In 2016 we also began the Group-wide rollout of 2020 Leader-
+ship, a new program whose purpose is to systematically prepare
+our leaders for the new leadership requirements in the digital age.
+Our catalog of formal training courses was supplemented by
+other projects and initiatives specifically tailored to our company,
+such as the Change Cube and Learning Take-Away Days.
+CEO Letter
+At year-end 2016 the E.ON Group had 43,138 employees world-
+wide, roughly the same number as at year-end 2015. E.ON
+also had 971 apprentices in Germany and 124 board members
+and managing directors worldwide. These numbers have been
+adjusted to exclude Uniper employees.
+Workforce Figures
+More information about E.ON's compliance with Germany's Law
+for the Equal Participation of Women and Men in Leadership
+Positions in the Private Sector and the Public Sector can be found
+in the Management's Statement regarding this law.
+54
+Business Report
+Many of these measures are already having an impact. Our prog-
+ress is receiving recognition outside our company as well. For
+example, E.ON received the Total E-Quality Seal for exemplary
+HR policies based on equal opportunity and diversity for the
+third year in a row.
+We conducted activities and initiatives throughout 2016 to
+enable all of our employees to experience difference and diversity
+and to raise their awareness of the contribution made by each
+individual. For example, we hosted an exhibition on disability and
+commemorated International Women's Day across our company.
+In 2016 we again implemented numerous measures to promote
+diversity at E.ON. An important purpose of these measures is
+to foster the career development of female managers. Each unit
+has specific targets, and progress towards these targets is
+monitored at regular intervals. We have Group-wide recruiting
+and hiring guidelines for management positions. These guide-
+lines require that least one male and one female must be on the
+short list for a vacant management position. As a result, in
+2016 we again increased the proportion of women in leadership
+positions. This proportion rose from just over 11 percent in 2010
+to 19.6 percent at year-end 2016 for the Group as a whole
+and from 9 percent to 15.7 percent for Germany. Our units have
+had support mechanisms for female managers in place for a
+number of years. These mechanisms include mentoring programs
+for female next-generation managers, coaching, unconscious-bias
+training, the provision of daycare, and flexible work schedules.
+Significantly increasing the percentage of women in our internal
+talent pool is a further prerequisite for raising, over the long term,
+their percentage in management and top executive positions.
+Our approach to promoting diversity is holistic, encompassing
+all dimensions of diversity. It ensures equal opportunity for all
+employees and fosters and harnesses diversity in an individual
+way.
+Diversity will remain a key element of E.ON's competitiveness.
+Diversity and an appreciative corporate culture promote creativ-
+ity and innovation. This is a central aspect of the E.ON vision
+as well. E.ON brings together a diverse team of people who differ
+by nationality, age, gender, disability, religion, and/or cultural
+and social background. Diversity is a key success factor. Numer-
+ous studies have shown that heterogeneous teams outperform
+homogenous ones. Diversity is equally crucial in view of demo-
+graphic trends. Going forward, only those companies that
+embrace diversity will be able to remain attractive employers
+and be less affected by the shortage of skilled workers. In addi-
+tion, a diverse workforce enables us to do an even better job
+of meeting our customers' needs and requirements. More than
+a decade ago, in 2006, we issued a Group Policy on Equal
+Opportunity and Diversity, which we updated in 2016 in coop-
+eration with the European Works Council. In June 2008 we
+publicly affirmed our long-standing commitment to fairness and
+respect by signing the German Diversity Charter, which now
+has about 2,400 signatories. E.ON therefore belongs to a large
+network of companies committed to diversity, tolerance, fairness,
+and respect.
+Diversity
+Our central Learning Management System recorded 109,036
+enrollments in our formal courses (which do not include our
+online learning programs) in 2016. This equals 72,805 days of
+classroom training, which accounts for 70 percent of our total
+training offerings. On average, each employee received 1.7 days
+of training in 2016. We do not record the duration of use of our
+online learning programs.
+53
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+The Uniper spinoff led to the decision to separate the support
+functions as well (IT, HR, and Financial Services). Employees
+were assigned on the basis of the One2two rules and guidelines
+which had been negotiated with the works councils and specified
+in the Partnership Agreement between E.ON, Uniper, and E.ON
+Business Services.
+A Project Council consisting of leading employee representatives
+was created in 2015. In 2016 it was continuously informed in
+advance of decisions pending in the Project Steering Committee.
+It had the opportunity to discuss the decisions with the E.ON
+Management Board and to make alternative recommendations.
+Employee representatives were at all times actively involved in
+One2two decision-making processes and implementation projects
+at an early stage.
+One2two and the Involvement of Employee Representation
+The main focus of our HR work in 2016 was on preparing to
+take the final employee-related steps for the Uniper spinoff. The
+close, constructive working relationship between management
+and employee representatives was again an important success
+factor for the implementation of the One2two project, just as it
+had been in the previous year. It continued in the spirit the Joint
+Declaration and Framework Agreement of the Management
+Board of E.ON SE, the Executive Committee of the SE Works
+Council of E.ON SE and the Executive Committee of the Group
+Works Council of E.ON SE, which was agreed on in 2014. In
+particular, the Joint Declaration sets the main social framework
+for any One2two measures and for the involvement of employee
+representatives in One2two.
+51
+We foster diversity and inclusion in our workforce.
+We are committed to building a diverse workforce.
+We ensure that our recruitment processes are
+inclusive and that we value every employee and
+respect difference.
+We provide a safe and healthy workplace for our
+employees and our contractors. We look out for
+our people's mental well-being. We also strive to
+protect the health and safety of customers who
+use our energy solutions.
+We protect the health and safety of our customers
+and colleagues.
+We are increasing installed renewables capacity
+and working to reduce the cost of renewables.
+Our distribution networks bring power to customers
+and are therefore the platform for them to use
+renewable energy.
+We build and integrate renewable generating
+capacity.
+We help customers optimize their energy usage.
+We help customers reduce their energy consumption,
+costs, and carbon emissions. We develop innovative
+solutions to drive continuous reduction. We help
+customers understand their consumption profile so
+they can identify potential savings.
+We listen to our customers and treat them fairly.
+We identify and understand customers' needs. We
+serve all members of society fairly and with respect.
+At the start of 2016, we therefore conducted workshops to
+articulate what sustainability means for E.ON. The workshops
+consisted of more than 60 employees from different depart-
+ments and hierarchy levels. We discussed their findings with
+external stakeholders. The result is five new focus areas toward
+which we will direct our sustainability activities going forward.
+These focus areas are consistent with our corporate strategy,
+our vision, and our brand.
+The purpose of our sustainability activities has long been to
+achieve a reasonable balance in addressing environmental,
+social, and governance issues. Increasingly, sustainability issues
+influence value drivers such as our sales, reputation, attractive-
+ness as an employer, efficiency, costs, and innovativeness.
+Highlights in 2016
+more, E.ON continues to be listed in the Euronext Vigeo Europe
+120 sustainability index and, in 2016, was for the first time
+included in the Euronext Vigeo World 120.
+In addition, the Carbon Disclosure Project ("CDP") awarded E.ON
+a high grade of A- for the quality, processes, and transparency
+of our reporting on our carbon emissions and climate change as
+well as a grade of B for our corporate water disclosures. The
+CDP is one of the world's largest investor organizations. It helps
+investors assess whether a company adequately addresses
+climate change in its decisions and business
+processes. Further-
+49
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Business Report
+Employees¹
+Shared Framework, Individual Implementation
+These five focus areas are valid for our entire company. They
+serve as the starting point for all E.ON units and functions to
+design their own measures and set their own targets. The units
+and functions also factor in other sustainability issues that are
+important for their respective activities. For example, our pro-
+curement organization develops measures that promote sus-
+tainable supply chain management and embeds sustainability
+key performance indicators into its management model.
+Carbon Emissions
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+50
+The spinoff has brought with it some new work patterns as
+E.ON pursues ambitious goals while operating in demanding
+market environments. The focus areas of our People Strategy
+will enable us to continue to put the needs of our employees
+and executives at the center of what we do.
+These focus areas are therefore unchanged and will continue
+to guide all our HR activities for the next three to five years. This
+demonstrates that our existing People Strategy provides an
+excellent foundation for meeting the challenges resulting from
+the spinoff.
+The result is a People Strategy that emphasizes even more clearly
+and explicitly the five values of the E.ON vision and that provides
+the right support for our employees as they implement E.ON's
+radical focus on the new energy world. The focus areas for this
+support are Preparing our People for the Future, Providing Oppor-
+tunities, and Recognizing Performance.
+For this purpose, our HR team conducted a survey and an analysis
+of the business requirements of our various units.
+The One2two project led to changes in E.ON's organizational
+setup. Other changes have resulted from E.ON's focus on the
+new energy world. In response, we decided to review the basic
+structure of our People Strategy and to identify any modifications
+that might be necessary.
+Great companies execute their People Strategy with the same
+energy and determination they apply to the business strategy.
+A key success factor is for HR functions to be business-integrated.
+An organization's business strategy and its products and
+services can be copied. What cannot be easily copied are an
+organization's people, its culture, and its capabilities. The
+successful delivery of any business strategy depends on an
+organization having available highly qualified and motivated
+employees as well as a strong and diverse talent pipeline.
+People-Strategy
+475
+Our 2016 Sustainability Report, which will be published online in
+early May, will contain detailed information about our emissions.
+This report is not part of the Combined Group Management
+Report.
+Following the transfer to Uniper SE of entities that operate
+fossil-fueled generating units, our carbon emissions from power
+and heat production totaled 1.2 million metric tons in 2016.
+As in the prior year, we included all combustion plants covered
+by the EU Emissions Trading Scheme (plants with a capacity
+of more than 20 MW). Due to the spinoff, which was part of
+our new strategy, a comparison with the prior-year figure of
+76.8 million metric tons would have no informational value.
+The same applies to our Preussen Elektra subsidiary. It too will
+design its own sustainability improvement plan to address our
+sustainability focus areas by, for example, developing measures
+to ensure the continued protection of the environment and of
+its employees' health and safety.
+December 31
+Employees
+2016
+16,695
+16,882
+17,239
+2015
+2016
+2015
+2016
+Dec. 31,
+Dec. 31,
+Dec. 31,
+Dec. 31,
+FTE³
+Headcount
+55
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+16,324
+CEO Letter
+9,850
+9,363
+Headcount
+475
+1,955
+1,967
+1,980
+1,999
+2,317
+2,387
+2,331
+2,401
+4,896
+4,992
+4,903
+5,000
+5,681
+5,415
+6,175
+5,464
+9,210
+9,694
+3Full-time equivalent.
+United Kingdom
+¹Figures do not include board members, managing directors, or apprentices.
+(PreussenElektra)
+Non-core Business
+40,942
+41,104
+Core business
++19
+-3
+913
+4,237
+4,102
+Corporate Functions/Other²
+1,082
+Renewables
++13
++1-%
+2015
+14,932
+20,860
+19,106
+Customer Solutions
+16,814
+Energy Networks
+2Includes Poland, Italy, Denmark, and other countries.
+2,034
+Other (divested operations)
+-8
++2
+-100
+USA
+Other²
+1,998
+222
+Sweden
+Czechia
+Hungary
+Germany
+Employees by Country¹
+At year-end 2016, 25,899 employees, or 60 percent of all staff,
+were working outside Germany, slightly less than the 61 percent
+at year-end 2015.
+Geographic Profile
+Romania
+The decline in headcount at Other resulted from the sale of
+exploration and production operations.
+Non-Core Business currently consists of our nuclear energy busi-
+ness in Germany. The separation of this business in conjunction
+with the Uniper spinoff led to a need to add staff in some depart-
+ments, resulting in a slight increase in the number of employees.
+Transfers to Uniper as part of the spinoff project led to a signifi-
+cant decline in headcount at Corporate Functions/Other. This
+does not include divested operations.
+The filling of vacancies and business expansion in the United
+States led to an increase in the number of employees at Renew-
+ables.
+The transfer of service employees in Romania to Energy Networks
+along with restructuring were the main reasons for the decline
+in Customer Solutions' headcount.
+The hiring of apprentices in Germany as full-time employees and,
+in particular, the transfer of service employees in Romania from
+Customer Solutions were the main reasons for the increase in
+Energy Networks' headcount. This was partially offset by
+restructuring in Romania.
+E.ON Group
+43,138
+¹Does not include board members, managing directors, or apprentices.
+2Includes E.ON Business Services.
+43,162
+Health, safety, and environmental risks and chances
+IT and process risks and chances, risks and chances relating to the operation of generation
+assets, networks, and other facilities, new-build risks
+Policy and legal risks and chances, regulatory risks, risks from public consents processes
+Examples
+Market risks
+Strategic risks
+HSSE, HR, and Other
+Operational and IT risks
+Risks and chances from the development of commodity prices and margins and from changes
+in market liquidity
+Legal and regulatory risks
+Finance and treasury risks
+Risks and chances from investments and disposals
+medium
+E.ON uses a multistep process to identify, evaluate, simulate,
+and classify risks and chances. Risks and chances are generally
+reported on the basis of objective evaluations. If this is not
+possible, we use internal estimates by experts. The evaluation
+measures a risk/chance's financial impact on our current earnings
+plan while factoring in risk-reducing countermeasures. The
+evaluation therefore reflects the net risk.
+We then evaluate the likelihood of occurrence of quantifiable
+risks and chances. For example, the wind may blow more or less
+hard at a wind farm. This type of risk is modeled with a normal
+distribution. Modeling is supported by a Group-wide IT-based
+system. Extremely unlikely events-those whose likelihood of
+occurrence is 5 percent or less-are classified as tail events. Tail
+events are not included in the simulation described below.
+This statistical distribution makes it possible for our IT-based
+risk management system to conduct a Monte Carlo simulation
+of quantifiable risks/chances. This yields an aggregated risk
+distribution that is quantified as the deviation from our current
+earnings plan for adjusted EBIT.
+We use the 5 and 95 percent percentiles of this aggregated risk
+distribution as the best case and worst case, respectively.
+Statistically, this means that with this risk distribution there is a
+90-percent likelihood that the deviation from our current earn-
+ings plan for adjusted EBIT will remain within these extremes.
+The last step is to assign, in accordance with the 5 and 95 per-
+cent percentiles, the aggregated risk distribution to impact
+classes-low, moderate, medium, major, and high-according to
+their quantitative impact on adjusted EBIT. The impact classes
+are shown in the table below:
+Impact Classes
+low
+moderate
+major
+high
+x < €10 million
+€10 million ≤ x < €50 million
+€50 million ≤ x < €200 million
+€200 million ≤ x < €1 billion
+x ≥ €1 billion
+Risk and Chances Report
+Risk Category
+Credit, foreign-currency, tax, and asset-management risks and chances
+Risk Category
+•
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Managing Strategic Risks
+We have comprehensive preventive measures in place to manage
+potential risks relating to acquisitions and investments. To the
+degree possible, these measures include, in addition to the rele-
+vant company guidelines and manuals, comprehensive due dili-
+gence, legally binding contracts, a multi-stage approvals process,
+and shareholding and project controlling. Comprehensive post-
+acquisition projects also contribute to successful integration.
+Managing Finance and Treasury Risks
+This category encompasses credit, currency, tax, and asset-
+management risks and chances. We use systematic risk manage-
+ment to monitor and control our interest-rate and currency
+risks and manage these risks using derivative and non-derivative
+financial instruments. Here, E.ON SE plays a central role by
+aggregating risk positions through intragroup transactions and
+hedging these risks in the market. Due to E.ON SE's intermediary
+role, its risk position is largely closed.
+We use a Group-wide credit risk management system to system-
+atically measure and monitor the creditworthiness of our busi-
+ness partners on the basis of Group-wide minimum standards.
+We manage our credit risk by taking appropriate measures,
+which include obtaining collateral and setting limits. The E.ON
+Group's Risk Committee is regularly informed about all credit
+risks. A further component of our risk management is a conser-
+vative investment strategy and a broadly diversified portfolio.
+Note 30 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial instru-
+ments and hedging transactions. Note 31 describes the general
+principles of our risk management and applicable risk metrics
+for quantifying risks relating to commodities, credit, liquidity,
+interest rates, and currency translation.
+Enterprise Risk Management ("ERM")
+Our risk management system, which is the basis for the risks
+and chances described in the next section, encompasses:
+•
+General Risk Situation
+•
+•
+systematic risk and chance identification
+risk and chance analysis and evaluation
+management and monitoring of risks and chances by
+analyzing and evaluating countermeasures and preventive
+systems
+documentation and reporting.
+As required by law, our ERM's effectiveness is reviewed regularly
+by Internal Audit. In compliance with the provisions of Section
+91, Paragraph 2, of the German Stock Corporation Act relating
+to the establishment of a risk-monitoring and early warning
+system, E.ON has a Risk Committee for the E.ON Group and
+for each of its segments. The Risk Committee's mission is to
+achieve a comprehensive view of our risk exposure at the Group
+and unit level and to actively manage risk exposure in line with
+our risk strategy.
+Our ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose book value in E.ON's
+Consolidated Financial Statements is greater than €50 million.
+We take an inventory of our risks and chances at each quarterly
+balance-sheet date.
+As part of the continuous development of our risk management
+system, at the start of 2016 we initiated a project within the
+broader Finance Excellence program to ensure that our risk
+management reflects the Uniper spinoff and E.ON's changed risk
+profile. In this project we developed E.ON's enterprise risk man-
+agement from a compliance-oriented model to a significantly
+more value-oriented Group-wide model. This model was success-
+fully implemented in the course of 2016. The changes encom-
+pass a more stringent identification process for risks and chances
+(including unit-specific thresholds), a more realistic evaluation
+of risks and chances, and integrated and focused reporting of
+the individual risk profiles of each segment to ensure the risk
+information is considered in line with the planning and forecast-
+ing process. Furthermore, the risk categories were adjusted to
+support E.ON's changed business profile.
+Risks and Chances
+Methodology
+Our IT-based system for reporting risks and chances has the
+following risk categories:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+65
+The table below shows the average annual aggregated risk
+Medium
+Risk Category
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+67
+In 2003 Section 6 of Germany's Atomic Energy Act granted
+consent for Unterweser NPP to store radioactive spent nuclear
+fuel in an on-site intermediate storage facility. Lawsuits were
+filed against the consent. The complainants asked that the court
+rescind the consent on the grounds that the storage facility is
+not sufficiently protected against terrorist attacks. A ruling is
+expected in 2017. If the court rules in favor of the complainants,
+nuclear fuel could not be removed from Unterweser NPP on
+schedule. This would significantly prolong dismantling, thereby
+leading to higher costs. This could pose a major risk.
+On December 6, 2016, Germany's Federal Constitutional Court in
+Karlsruhe ruled that the thirteenth amended version of Germany's
+Atomic Energy Act ("the Act") is fundamentally constitutional.
+The Act's only unconstitutional elements are that certain NPP
+operators will be unable to produce their electricity allotment
+from 2002 and that it contains no mechanism for compensating
+operators for investments to extend NPP operating lifetimes.
+Lawmakers have until June 30, 2018, to pass legislation that
+redresses these elements. E.ON filed a suit against Lower Saxony,
+Bavaria, and the Federal Republic of Germany to seek approxi-
+mately €380 million in damages for the nuclear-energy morato-
+rium ordered in the wake of the Fukushima nuclear accident.
+PreussenElektra's appeal is pending before the State Superior
+Court in Celle. These matters could pose major risks and yield
+major chances.
+Customer Solutions
+The E.ON Group's operations subject it to certain risks relating
+to legal proceedings, ongoing planning processes, and regulatory
+changes. These risks relate in particular to legal actions and
+proceedings concerning contract and price adjustments to reflect
+market dislocations or (including as a consequence of the trans-
+formation of Germany's energy system) an altered business
+climate in the power and gas business, price increases, alleged
+market-sharing agreements, and anticompetitive practices.
+This could pose major risks.
+Energy Networks
+The operation of energy networks in Germany is subject to a
+large degree of regulation. New laws and regulation periods
+cause uncertainty in this business. In addition, matters related
+to the Renewable Energy Law, such as issues regarding solar
+energy, can cause temporary fluctuations in our cash flow and
+adjusted EBIT. This could create chances and pose major risks.
+In January 2017 the German Federal Ministry for Economic
+Affairs and Energy published a revised draft of the Grid Fee
+Modernization Act. If the act takes effect retroactively to Janu-
+ary 1, 2017, grid operators will not be able to adjust their grid
+fees retroactively to reflect lower avoided grid fees. For E.ON
+In Germany, the fourth regulation period for gas and power
+begins in 2018 and 2019, respectively. The regulatory agency
+will set the revenue caps based on a cost review and efficiency
+benchmarking. If this process results in revenue caps that are
+lower than anticipated, it would have an adverse impact on our
+anticipated earnings and lead to major risks.
+The awarding of network concessions for power and gas is
+extremely competitive in Germany. This creates a risk of losing
+concessions, particularly in urban areas with good infrastruc-
+tures. If a concession is lost, the network is sold to the new
+concessionaire at a negotiated price. Lawmakers intend to make
+changes in 2017 in the modalities of how a network is relin-
+quished after a network concession has been lost. This will likely
+result in a legally mandated stipulation of the purchase price.
+This could make competition even keener.
+Operational and IT Risks
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology. This includes
+risks and chances arising from information security.
+Combined Group Management Report
+Technologically complex production facilities are used in the
+production and distribution of energy, resulting in risks from
+procurement and logistics, construction, operations and main-
+tenance of assets as well as general project risks. In case of
+PreussenElektra, this also includes dismantling activities. One
+specific example here is the risk of contamination of individual
+facility parts. Our operations in and outside Germany could
+experience unanticipated operational or other problems leading
+to a power failure or shutdown and/or higher costs and addi-
+tional investments. Operational failures or extended production
+stoppages of facilities or components of facilities as well as
+environmental damage could negatively impact our earnings,
+affect our cost situation, and/or result in the imposition of fines.
+In unlikely cases, this could lead to a high risk. Overall, it results
+in a major risk position and a chance position.
+68
+General project risks can include a delay in projects and with that
+increased capital requirements. For our Renewables segment,
+a project delay could lead to the loss of government subsidies
+and cause potential partners to exit the project, which could, in
+unlikely cases, likewise lead to a high risk.
+We could also be subject to environmental liabilities associated
+with our power generation operations that could materially
+and adversely affect our business. In addition, new or amended
+environmental laws and regulations may result in increases in
+our costs.
+HSSE, HR, and Other Risks
+Health and safety are important aspects of our day-to-day busi-
+ness. Our operating activities can therefore pose risks in these
+areas and create social and environmental risks and chances. In
+addition, our operating business potentially faces risks resulting
+from human error and employee turnover. It is important that
+we act responsibly along our entire value chain and that we
+communicate consistently, enhance the dialog, and maintain
+good relationships with our key stakeholders. We actively con-
+sider environmental, social, and corporate-governance issues.
+These efforts support our business decisions and our public
+relations. Our objective is to minimize our reputation risks and
+garner public support so that we can continue to operate our
+business successfully. These matters do not result in a major
+risk or chance position.
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia
+and Bavaria. E.ON SE can be held responsible for damage. This
+could lead to major individual risks that we currently only evalu-
+ate qualitatively.
+Market Risks
+Our units operate in an international market environment that
+is characterized by general risks relating to the business cycle.
+In addition, the entry of new suppliers into the marketplace along
+with more aggressive tactics by existing market participants
+and reputational risks have created a keener competitive environ-
+ment for our electricity business in and outside Germany which
+could reduce our margins. Market developments could however
+also have a positive impact on our business. Such factors include
+wholesale and retail price developments, higher customer
+churn rates, and temporary volume effects in the network busi-
+ness. This results in a major risk position and a chance position.
+The demand for electric power and natural gas is seasonal, with
+our operations generally experiencing higher demand during
+the cold-weather months of October through March and lower
+demand during the warm-weather months of April through
+September. As a result of these seasonal patterns, our sales and
+results of operations are higher in the first and fourth quarters
+and lower in the second and third quarters. Sales and results of
+operations for all of our energy operations can be negatively
+affected by periods of unseasonably warm weather during the
+autumn and winter months. We expect seasonal and weather-
+related fluctuations in sales and results of operations to continue.
+Periods of exceptionally cold weather-very low average tem-
+peratures or extreme daily lows-in the fall and winter months
+can create chances due to higher demand for electricity and
+natural gas.
+The E.ON portfolio of physical assets, long-term contracts, and
+end-customer sales is exposed to major risks from fluctuations
+in commodity prices. The principal commodity prices to which
+E.ON is exposed relate to electricity, gas, and emission allow-
+ances. In view of the Uniper spinoff, E.ON is establishing procure-
+ment capabilities for its sales business and for its remaining
+energy production in order to ensure market access and manage
+the remaining commodity risks accordingly.
+Strategic Risks
+Our business strategy involves acquisitions and investments in
+our core business as well as disposals. This strategy depends in
+part on our ability to successfully identify, acquire, and integrate
+companies that enhance, on acceptable terms, our energy busi-
+ness. In order to obtain the necessary approvals for acquisitions,
+we may be required to divest other parts of our business or to
+make concessions or undertakings that affect our business. In
+addition, there can be no assurance that we will be able to achieve
+the returns we expect from any acquisition or investment. Fur-
+thermore, investments and acquisitions in new geographic areas
+or lines of business require us to become familiar with new
+sales markets and competitors and to address the attending
+business risks.
+Risk and Chances Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Risk Category
+Worst Case (5 percent percentil)
+Legal and regulatory risks
+Major
+Operational and IT risks
+Major
+HSSE, HR, and Other
+Low
+Market risks
+Major
+Strategic risks
+Finance and treasury risks
+Medium
+Medium
+66
+99
+Best Case (95 percent percentil)
+Moderate
+Low
+Low
+Medium
+Low
+The E.ON Group has a major risk positions in the following cate-
+gories: legal and regulatory risks, operational and IT risks, and
+market risks. As a result, the aggregate risk position of E.ON SE
+as the Group is major. In other words, the E.ON Group's average
+annual adjusted EBIT risk ought not to exceed -€200 million to
+-€1 billion in 95 percent of all cases.
+Risks and Chances by Category
+E.ON's major risks and chances by risk category are described
+below. Also described are major risks and chances stemming
+from tail events as well as major qualitative risks that would
+impact adjusted EBIT by more than €200 million. Risks and
+chances that would affect net income and/or cash flow by more
+than €200 million are included as well.
+Legal and Regulatory Risks
+The political, legal, and regulatory environment in which the
+E.ON Group does business is also a source of external risks, such
+as decisions by governments to phase out power generation
+using certain fuels. In view of the economic and financial crisis
+in many EU member states, policy and regulatory intervention-
+such as additional taxes, additional reporting requirements (for
+example, EMIR, REMIT, MiFiD2), price moratoriums, regulatory
+price reductions, and changes to support schemes for renew-
+ables-is becoming increasingly apparent. Such intervention
+could I pose a risk to E.ON's operations in these countries. In par-
+ticular, the refinancing situation of many European countries
+could have a direct impact on the E.ON Group's cost of capital.
+Besides governmental risks and chances this also includes the
+risk of litigation, fines, and claims, governance- and compliance-
+related issues as well as risks and chances related to contracts
+and permits. Changes to this environment can lead to consider-
+able uncertainty with regard to planning and, under certain cir-
+cumstances, to impairment charges but also can create chances.
+This results in a major risk position and a chance position.
+PreussenElektra
+PreussenElektra's business is substantially influenced by regu-
+lation. In general, regulation can result in risks for its remaining
+business activities. One example is the Fukushima nuclear acci-
+dent. Policy measures taken in response to such events could
+have a direct impact on further operation of a nuclear power
+plant ("NPP") or trigger liabilities stemming from solidarity obli-
+gation agreed on among German NPP operators. Furthermore,
+new regulatory requirements, such as additional mandatory
+safety measures, could lead to production outages and higher
+costs. Regulation can also require an increase in provisions for
+dismantling and storage. This could pose major risks for E.ON.
+CEO Letter
+position (aggregated risk position) across the time horizon of
+the medium-term plan for all quantifiable risks and chances
+(excluding tail events) for each risk category based on our most
+important key figure, adjusted EBIT.
+grid operators in Germany, it would have a positive effect on
+earnings 2017. This amount would be passed through to grid
+customers as credits in 2019 to 2021, which would result in
+a corresponding reduction in earnings. This could result in major
+risks as well as chances.
+64
+39
+42
+1.5
+19
+0.7
+1.4
+Percentages
+€ in billions
+Renewables
+Customer Solutions
+Energy Networks
+Cash-Effective Investments: 2017 Plan
+The main focus of Renewables' investments will be on offshore
+wind farms in Europe (such as Rampion and Arkona) and
+onshore farms in the United States (such as Radford Run and
+Bruenning Breeze).
+Investments at Customer Solutions will go toward metering,
+upgrade, and efficiency projects as well as to heat and biomass
+projects in Sweden and the United Kingdom.
+Energy Networks' investments will consist in particular of
+numerous individual investments to expand our intermediate-
+and low-voltage networks, switching equipment, and metering
+and control technology as well as other investments to ensure
+the reliable and uninterrupted transmission and distribution of
+electricity. Our investments provide important support to the
+energy transition, particularly in Germany, and therefore make
+a substantial contribution to supply security.
+Our medium-term plan calls for investments of €3.6 billion in
+2017. Our capital allocation will of course continue to be selec-
+tive and disciplined. At the present time, the market is not
+sufficiently pricing in risks, which adversely affects the long-
+term profitability of investments. In light of these factors, we
+will manage our current investment budget flexibly.
+Non-Core Business
+Corporate Functions/Other
+Total
+3.6
+Leadership and cultural adaptation are now among our most
+important tasks. E.ON has a very knowledgeable and dedicated
+team of employees who work hard each day to transform our
+company. We want to inspire them, because we will only be
+successful on the road ahead by working together.
+We are convinced that the new E.ON is active in the right
+markets. The energy future is green, distributed, and digital. But
+this market is more fragmented than the conventional energy
+world, and we face different competitors. We therefore need to
+make E.ON more entrepreneurial and ensure that our offerings
+get to market faster. To help us achieve this, we intend reduce
+our bureaucracy this year, to make our organizational setup more
+customer-centric, and to become leaner, more decentralized,
+and more agile.
+the solutions we offer our customers. We already have a success-
+ful smartphone app that enables customers to manage their
+energy consumption and all their communications with us. Other
+exciting products are on the way this year.
+The latest generation of energy products is digitally integrated.
+We intend to be a pacesetter in the digitalization of the energy
+business. Increasingly, digitalization will be a defining feature of
+We are putting our customers first. Our new brand idea-"Let's
+create a better tomorrow"-makes a clear commitment. In
+everything we do we need to ask how it benefits our customers,
+what they want, and what will make their lives better.
+We will strengthen our balance sheet and make the company
+financially sustainable. This is the key prerequisite for us to grow
+in the future. Although our markets offer many opportunities,
+our financial resources are limited. Over the medium and long
+term, we want to establish a sustainable financial foundation
+from which to invest in E.ON's future.
+Over the last two years we have laid the foundation for E.ON
+to have a successful future. But our transformation has only just
+begun, and 2017 will be another year of change for E.ON. We
+defined five goals for this year against which we all will measure
+our progress in the remainder of the year:
+Planned Investments
+General Statement on E.ON's Future
+Development
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+100
+61
+In line with our consistent dividend policy, our goal is to pay
+out to E.ON shareholders 50 to 60 percent of our adjusted net
+income. E.ON plans to propose the payment of a fixed dividend
+of €0.30 per share for the 2017 financial year.
+Dividend
+In addition to our investments planned for 2017 and the dividend
+for 2016, in 2017 we will likely make payments in conjunction
+with the law Germany's two houses of parliament passed
+in December 2016 to reassign responsibility for the country's
+nuclear waste. These payments will be funded primarily with
+available liquid funds, the sale of securities as well as the issuance
+of commercial paper and bonds.
+2017 (forecast)
+2016
+Energy Networks
+€ in billions
+Adjusted EBIT¹
+Our forecast by segment:
+59
+Customer Solutions
+59
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+financial instruments that are commonly used in the marketplace.
+These instruments are transacted with financial institutions,
+brokers, power exchanges, and third parties whose creditworthi-
+ness we monitor on an ongoing basis. Our local sales units and
+the remaining generation assets have set up local risk manage-
+ment under central governance standards to monitor these
+underlying commodity exposures and reduce them to acceptable
+levels through forward hedging.
+Summary of Financial Highlights and Explanations
+This Combined Group Management Report contains certain forward-looking statements based on E.ON management's current assumptions and forecasts and other currently available information.
+Various known and unknown risks, uncertainties, and other factors could lead to material differences between E.ON's actual future results, financial situation, development, or performance and the
+estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
+significantly above prior year
+significantly below prior year
+Corporate Functions/Other
+Planned Funding Measures
+Anticipated Financial Situation
+60
+60
+Forecast Report
+At Non-Core Business we expect Preussen Elektra's adjusted
+EBIT to be at the prior-year level.
+We anticipate that adjusted EBIT at Corporate Functions/Other
+will be significantly below the prior-year level, primarily because
+of the non-recurrence of positive derivative earnings reported
+in 2016 and the dividend on our stake in Nord Stream, because
+we intend to place this stake in a contractual trust arrangement
+in 2017.
+Renewables
+We expect Renewables' adjusted EBIT to be at the prior-year
+level. Significant new-build projects (such as Radford Run,
+Bruenning Breeze, Arkona, and Rampion wind farms) will not
+enter service and contribute to earnings until the end of 2017
+or in subsequent years.
+We expect Energy Networks' 2017 adjusted EBIT to be signifi-
+cantly above the prior-year figure. The principal positive factors
+in Germany are special regulatory effects relating to the delayed
+repayment of personnel costs from 2015 along with non-recur-
+ring items stemming from the conversion to the amended
+incentive-regulation scheme. German lawmakers are currently
+debating the Grid Fee Modernization Act, which, if enacted,
+could lead to an earnings improvement in 2017, which, however,
+would be offset again in the year 2019 to 2021. In addition,
+improved power tariffs in Sweden and in the Czech Republic will
+increase earnings. In Hungary we will benefit from the new
+regulation period in 2017.
+¹Adjusted for extraordinary effects.
+E.ON Group
+1.7
+0.8
+0.4
+-0.4
+0.6
+3.1
+at prior-year level
+2.8-3.1
+Non-Core Business
+at prior-year level
+significantly below prior year
+We anticipate that Customer Solutions' adjusted EBIT will be
+significantly below the prior-year level. Earnings in Germany
+will be lower due primarily to competition-related factors. In
+addition, startup costs in the customer-solutions business will
+have an adverse impact on earnings and will not generate posi-
+tive earnings streams until subsequent years. The intervention
+of the U.K. Competition and Markets Authority and rising costs
+for customer acquisition as part of our new marketing strategy
+will impact our earnings in the United Kingdom. Earnings there
+will also be adversely affected by the planned Brexit and the
+development of the British pound. Earnings will be lower in
+Romania primarily because of narrowing margins due to keener
+competition in the wake of market liberalization.
+Risk and Chances Report
+Consolidated Financial Statements
+Group
+Decision
+Bodies
+To limit operational and IT risks, we will continue to improve our
+network management and the optimal dispatch of our generation
+assets. At the same time, we are implementing operational and
+infrastructure improvements that will enhance the reliability
+of our generation assets and distribution networks, even under
+Manging Operations and IT Risks
+We attempt to minimize the operational risks of legal proceedings
+and ongoing planning processes by managing them appropriately
+and by designing appropriate contracts beforehand.
+We engage in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, we strive to conduct proper project
+management so as to identify early and minimize the risks
+attending our new-build projects.
+Managing Legal and Regulatory Risks
+We take the following general preventive measures to limit risks.
+Enterprise Risk Management System in the Narrow Sense
+extraordinarily adverse conditions. In addition, we have factored
+the operational and financial effects of environmental risks into
+our emergency plan. They are part of a catalog of crisis and
+system-failure scenarios prepared for the Group by our incident
+and crisis management team.
+The E.ON internal management information systems identifies
+risks early so that steps can be taken to actively address them.
+Reporting by Controlling, Finance, and Accounting departments
+as well as Internal Audit reports are of particular importance in
+early risk detection.
+a risk management system in the narrow sense.
+preventive measures
+•
+•
+a management information system
+•
+an internal monitoring system
+The purpose of the internal monitoring system is to ensure
+the proper functioning of business processes. It consists of
+organizational preventive measures (such as policies and work
+instructions) and internal controls and audits (particularly by
+Internal Audit).
+Our IT systems are maintained and optimized by qualified E.ON
+Group experts, outside experts, and a wide range of technological
+security measures. In addition, the E.ON Group has in place a
+range of technological and organizational measures to counter
+the risk of unauthorized access to data, the misuse of data, and
+data loss.
+Managing Health, Safety, Security, and Environmental
+("HSSE"), Human Resources ("HR"), and Other Risks
+Furthermore, the following are among the comprehensive
+measures we take to address HSSE, HR, and other risks (also in
+conjunction with operational and IT risks):
+•
+systematic employee training, advanced training, and quali-
+fication programs
+further refinement of our production procedures, processes,
+and technologies
+•
+regular facility and network maintenance and inspection
+•
+company guidelines as well as work and process instructions
+⋅
+quality management, control, and assurance
+•
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+•
+Should an accident occur despite the measures we take, we
+have a reasonable level of insurance coverage.
+Managing Market Risks
+We use a comprehensive sales management system and inten-
+sive customer management to manage margin risks.
+In order to limit our exposure to commodity price risks, we con-
+duct systematic risk management. The key elements of our risk
+management are, in addition to binding Group-wide policies
+and a Group-wide reporting system, the use of quantitative key
+figures, the limitation of risks, and the strict separation of func-
+tions between departments. Furthermore, we utilize derivative
+Risk and Chances Report
+.
+Our risk management system in the broader sense has a total of
+four components:
+Scope
+General Measures to Limit Risks
+Summary of Financial Highlights and Explanations
+Steer
+Local Risk Committees
+Non-Core Corporate
+Business Functions
+Renew-
+ables
+Networks
+Customer Energy
+Solutions
+Units and
+Departments
+Govern
+and
+Central Enterprise Risk Management
+63
+Board
+Board
+E.ON SE
+Supervisory
+E.ON SE
+Management
+Committee
+Risk
+Group
+Consolidate
+Audit and Risk
+Committee
+62
+Identify,
+Evaluate
+and
+Manage
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+All risks and chances have an accountable member of the Man-
+agement Board, have a designated risk owner who remains
+operationally responsible for managing that risk/chance, and
+are identified in a dedicated bottom-up process.
+Our ERM is based on a centralized governance approach which
+defines standardized processes and tools covering the identifi-
+cation, evaluation, countermeasures, monitoring, and reporting
+of risks and chances. Overall governance is provided by Group
+Risk Management on behalf of the E.ON SE Risk Committee.
+transparency on risk exposures in compliance with legal
+regulations including KonTraG, BilMoG, and BilReG.
+Report of the Supervisory Board
+Consolidated Financial Statements
+•
+•
+Our Enterprise Risk Management ("ERM”) provides the manage-
+ment of all units as well as E.ON Group with a fair and realistic
+view of the risks and chances resulting from their planned busi-
+ness activities. It provides:
+Objective
+meaningful information about risks and chances to the busi-
+ness and to the financial community enabling the business
+to derive individual risks/chances as well as aggregate risk
+profiles within the time horizon of the medium-term plan
+(three years)
+Internal Audit
+5/5
+4/4
+Woste, Ewald (since July 19)
+2/2
+Scheidt, Andreas
+Broutta, Clive
+7/7
+6/6
+2/2
+6/6
+5/5
+Schmitz, Andreas (since July 19)
+6/6
+Siegert, Dr. Theo
+6/6
+Segundo, Dr. Karen de
+1/1 (guest)
+2/2
+6/6
+Kingsmill, Baroness Denise
+2/3
+Dybeck Happe, Carolina (since June 8)
+2/2
+Gila, Tibor (since July 19)
+1/1 (guest)
+2/2
+The Board of Management and the Supervisory Board further-
+more declare that E.ON SE has been in compliance in full with
+the recommendations of the "Government Commission German
+Corporate Governance Code," dated May 5, 2015, published
+by the Federal Ministry of Justice in the official section of the
+Federal Gazette (Bundesanzeiger) since the last declaration on
+April 15, 2016, with the exception of Section 4.2.3, Paragraph
+2, Sentence 8 of the German Corporate Governance Code.
+6/6
+Clementi, Erich (since July 19)
+generally occur. The Supervisory Board should include a sufficient
+number of independent candidates; members are deemed inde-
+pendent if they do not have any personal or business relationship
+with the Company, its Management Board, a shareholder with a
+controlling interest in the Company, or with a company affiliated
+with such a shareholder, and such a relationship could constitute
+"The Supervisory Board's composition should ensure that, on
+balance, its members have the necessary expertise, skills, and
+professional experience to discharge their duties properly. Each
+Supervisory Board member should have or acquire the minimum
+expertise and skills needed to be able to understand and assess
+on his or her own all the business events and transactions that
+In view of Item 5.4.1 of the German Corporate Governance
+Code, in December 2016 the Supervisory Board defined targets
+for its composition that go beyond the applicable legal require-
+ments. These targets are as follows:
+2/2
+3/3
+2/2
+4/4
+3/3
+Wenning, Werner (until June 8)
+3/3
+Obermann, René (until June 8)
+Hansen, Thies
+2/2
+6/6
+Wallbaum, Elisabeth (since January 1)
+2/2
+Šmátralová, Silvia (since July 19)
+4/4
+7/7
+6/6
+Schulz, Fred
+5/5
+6/6
+Luha, Eugen-Gheorghe
+4/4
+Zettl, Albert (since July 19)
+2/2
+7/7
+6/6
+Scope
+Each year, we conduct a process using qualitative criteria and
+quantitative materiality metrics to define which E.ON units
+must document and evaluate their financial-reporting-related
+processes and controls in a central documentation system.
+Central Documentation System
+The E.ON units to which the internal control system applies use
+a central documentation system to document key controls. The
+system defines the scope, detailed documentation requirements,
+the assessment requirements for process owners, and the final
+Sign-Off process.
+Assessment
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment
+of the design and the operational effectiveness of the processes
+as well as the controls embedded in these processes.
+Tests Performed by Internal Audit
+The management of E.ON units relies on the assessment per-
+formed by the process owners and on testing of the internal
+control system performed by Internal Audit. These tests are a
+key part of the process. Using a risk-oriented audit plan, Inter-
+nal Audit tests the E.ON Group's internal control system and
+identifies potential deficiencies (issues). On the basis of its own
+evaluation and the results of tests performed by Internal Audit,
+an E.ON unit's management carries out the final Sign-Off.
+Sign-Off Process
+The final step of the internal evaluation process is the submission
+of a formal written declaration called a Sign-Off confirming
+the effectiveness of the internal control system. The Sign-Off
+process is conducted at all levels of the Group before E.ON SE,
+as the final step, conducts it for the Group as a whole. The
+Chairman of the E.ON SE Management Board and the Chief
+Financial Officer make the final Sign-Off for the E.ON Group.
+The Catalog of ICS Principles is a key component of our internal
+control system, defining the minimum requirements for the
+system to function. It encompasses overarching principles for
+matters such as authorization, segregation of duties, and
+master data management as well as specific requirements for
+managing risks in a range of issue areas and processes, such as
+accounting, financial reporting, communications, planning and
+controlling, and risk management.
+Internal Audit regularly informs the E.ON SE Supervisory Board's
+Audit and Risk Committee about the internal control system for
+financial reporting and any significant issue areas it identifies in
+the E.ON Group's various processes.
+An E.ON unit called E.ON Business Services and external service
+providers provide IT services for the majority of the units at
+the E.ON Group. The effectiveness of the automated controls in
+the standard accounting software systems and in key additional
+applications depends to a considerable degree on the proper
+functioning of IT systems. Consequently, IT controls are embedded
+in our documentation system. These controls primarily involve
+ensuring the proper functioning of access-control mechanisms
+of systems and applications, of daily IT operations (such as
+emergency measures), of the program change process, and of
+E.ON SE's central consolidation system.
+Disclosures Regarding Takeovers
+72
+72
+Disclosures Pursuant to Section 289, Para-
+graph 4, and Section 315, Paragraph 4, of the
+German Commercial Code
+Composition of Share Capital
+The share capital totals €2,001,000,000.00 and consists of
+2,001,000,000 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a Share-
+holders Meeting.
+Restrictions on Voting Rights or the Transfer of Shares
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the next
+calendar year plus one. As a rule, an employee may not sell such
+shares until the blackout period has expired.
+Pursuant to Section 71b of the German Stock Corporation Act
+("AktG"), the Company's own shares give it no rights, including
+no voting rights.
+Legal Provisions and Rules of the Company's Articles of Associ-
+ation Regarding the Appointment and Removal of Management
+Board Members and Amendments to the Articles of Association
+Pursuant to the Company's Articles of Association, the Manage-
+ment Board consists of at least two members. The Supervisory
+Board decides on the number of members as well as on their
+appointment and dismissal.
+General IT Controls
+Our internal control system is based on the globally recognized
+COSO framework, in the version published in May 2013 (COSO:
+The Committee of Sponsoring Organizations of the Treadway
+Commission). The Central Risk Catalog (ICS Model), which
+encompasses company- and industry-specific aspects, defines
+possible risks for accounting (financial reporting) in the functional
+areas of our units and thus serves as a check list and provides
+guidance for the establishment, documentation, and implemen-
+tation of internal controls.
+COSO Framework
+and evaluating internal controls; a Catalog of ICS Principles; a
+description of the test activities of our Internal Audit division;
+and a description of the final Sign-Off process. We believe that
+compliance with these rules provides sufficient certainty to pre-
+vent error or fraud from resulting in material misrepresentations
+in the Consolidated Financial Statements, the Combined Group
+Management Report, and the Interim Reports.
+70
+Disclosures Pursuant to Section 289, Para-
+graph 5, and Section 315, Paragraph 2, Item 5,
+of the German Commercial Code on the Inter-
+nal Control System for the Accounting Process
+General Principles
+We apply Section 315a (1) of the German Commercial Code
+and prepare our Consolidated Financial Statements in accor-
+dance with International Financial Reporting Standards ("IFRS")
+and the interpretations of the IFRS Interpretations Committee
+that were adopted by the European Commission for use in the
+EU as of the end of the fiscal year and whose application was
+mandatory as of the balance-sheet date (see Note 1 to the Con-
+solidated Financial Statements). Energy Networks (Germany,
+Sweden, and East-Central Europe/Turkey), Customer Solutions
+(Germany, United Kingdom, Other), Renewables, Non-Core
+Business, and Corporate Functions/Other are our IFRS reportable
+segments.
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the German
+Energy Act.
+We prepare a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+Accounting Process
+All companies included in the Consolidated Financial Statements
+must comply with our uniform Accounting and Reporting
+Guidelines for the Annual Consolidated Financial Statements
+and the Interim Consolidated Financial Statements. These
+guidelines describe applicable IFRS accounting and valuation
+principles. They also explain accounting principles typical in
+the E.ON Group, such as those for provisions for nuclear-waste
+management, the treatment of financial instruments, and the
+treatment of regulatory obligations. We continually analyze
+amendments to laws, new or amended accounting standards,
+and other pronouncements for their relevance to and conse-
+quences for our Consolidated Financial Statements and, if nec-
+essary, update our guidelines and systems accordingly.
+Group Management defines and oversees the roles and respon-
+sibilities of various Group entities in the preparation of E.ON SE's
+Financial Statements and the Consolidated Financial Statements.
+These roles and responsibilities are described in detail in a Group
+Policy document.
+E.ON Group companies are responsible for preparing their
+financial statements in a proper and timely manner. They
+receive substantial support from Business Service Centers in
+Regensburg, Germany, and Cluj, Romania. The financial state-
+ments of subsidiaries belonging to E.ON's scope of consolidation
+are audited by the subsidiaries' respective independent auditor.
+E.ON SE then combines these statements into its Consolidated
+Financial Statements using uniform SAP consolidation software.
+The E.ON Center of Competence for Consolidation is responsible
+for conducting the consolidation and for monitoring adherence
+to guidelines for scheduling, processes, and contents. Monitor-
+ing of system-based automated controls is supplemented by
+manual checks.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information is compiled. Further-
+more, dedicated quality-control processes are in place for all
+relevant departments to discuss and ensure the completeness
+of relevant information on a regular basis.
+E.ON SE's Financial Statements are also prepared with SAP
+software. The accounting and preparation processes are divided
+into discrete functional steps. Bookkeeping processes are handled
+by our Business Service Centers: Cluj has responsibility for pro-
+cesses relating to subsidiary ledgers and several bank activities,
+Regensburg for those relating to the general ledgers. Auto-
+mated or manual controls are integrated into each step. Defined
+procedures ensure that all transactions and the preparation of
+E.ON SE's Financial Statements are recorded, processed, assigned
+on an accrual basis, and documented in a complete, timely,
+and accurate manner. Relevant data from E.ON SE's Financial
+Statements are, if necessary, adjusted to conform with IFRS
+and then transferred to the consolidation software system using
+SAP-supported transfer technology.
+The following explanations about our Internal Control System,
+and our general IT controls apply to the Consolidated Financial
+Statements and E.ON SE's Financial Statements.
+Internal Control System
+Internal controls are an integral part of our accounting processes.
+Guidelines define uniform financial-reporting requirements and
+procedures for the entire E.ON Group. These guidelines encom-
+pass a definition of the guidelines' scope of application; a Risk
+Catalog ("ICS Model"); standards for establishing, documenting,
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+71
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is
+permissible. If more than one person is appointed as a member
+of the Management Board, the Supervisory Board may appoint
+one of the members as Chairperson of the Management Board.
+If there is a vacancy on the Management Board for a required
+member, the court makes the necessary appointment upon
+petition by a concerned party in the event of an urgent matter.
+The Supervisory Board may revoke the appointment of a mem-
+ber of the Management Board and of the Chairperson of the
+Management Board for serious cause (for further details, see
+Sections 84 and 85 of the AktG).
+70
+Resolutions of the Shareholders Meeting require a majority
+of the valid votes cast unless mandatory law or the Articles of
+Association explicitly prescribe otherwise. An amendment to
+the Articles of Association requires a two-thirds majority of the
+votes cast or, in cases where at least half of the share capital is
+represented, a simple majority of the votes cast unless manda-
+tory law explicitly prescribes another type of majority.
+CEO Letter
+In addition, the Management Board is authorized to cancel
+treasury shares, without such cancellation or its implementation
+requiring an additional resolution by the Shareholders Meeting.
+Disclosures Regarding Takeovers
+74
+In each case, the Management Board will inform the Shareholders
+Meeting about the reasons for and the purpose of the acquisition
+of treasury shares, the number of treasury shares acquired, the
+amount of the registered share capital attributable to them, the
+portion of the registered share capital represented by them, and
+their equivalent value.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase until
+May 2, 2017, the Company's capital stock by a total of up to
+€460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in kind
+(with the option to restrict shareholders' subscription rights);
+such increase shall not, however, exceed the amount and number
+of shares in which the authorized capital pursuant to Section 3
+of the Articles of Association of E.ON AG still exists at the point
+in time when the conversion of E.ON AG into a European Com-
+pany ("SE") becomes effective pursuant to the conversion plan
+dated March 6, 2012 (authorized capital pursuant to Sections 202
+et seq. AktG). Subject to the Supervisory Board's approval, the
+Management Board is authorized to exclude shareholders' sub-
+scription rights. The authorized capital increase was not utilized.
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in
+the amount of €175 million, which is authorized until May 2,
+2017. The conditional capital increase will be implemented only
+to the extent required to fulfill the obligations arising on the
+exercise by holders of option or conversion rights, and those
+arising from compliance with the mandatory conversion of
+bonds with conversion or option rights, profit participation rights
+and income bonds that have been issued or guaranteed by
+E.ON SE or a Group company of E.ON SE as defined by Section
+18 AktG, and to the extent that no cash settlement has been
+granted in lieu of conversion and no E.ON SE treasury shares
+or shares of another listed company have been used to service
+the rights. However, this conditional capital increase only applies
+up to the amount and number of shares in which the conditional
+capital pursuant to Section 3 of the Articles of Association of
+E.ON AG has not yet been implemented at the point in time when
+the conversion of E.ON AG into a European Company ("SE")
+becomes effective in accordance with the conversion plan dated
+March 6, 2012. The conditional capital increase was not utilized.
+Significant Agreements to Which the Company Is a Party That
+Take Effect on a Change of Control of the Company Following a
+Takeover Bid
+Debt issued since 2007 contains change-of-control clauses
+that give the creditor the right of cancellation. This applies, inter
+alia, to bonds issued by E.ON International Finance B.V. and
+guaranteed by E.ON SE, promissory notes issued by E.ON SE, and
+other instruments such as credit contracts. Granting change-
+of-control rights to creditors is considered good corporate gov-
+ernance and has become standard market practice. Further
+information about financial liabilities is contained in the section
+of the Combined Group Management Report entitled Financial
+Situation and in Note 26 to the Consolidated Financial Statements.
+Settlement Agreements between the Company and
+Management Board Members or Employees in the Case
+of a Change-of-Control Event
+In the event of a premature loss of a Management Board position
+due to a change-of-control event, the service agreements of
+Management Board members entitle them to severance and
+settlement payments (see the detailed presentation in the
+Compensation Report).
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, separately or collectively by the
+Company and also by Group companies or by third parties for
+the Company's account or its affiliates' account.
+A change-of-control event would also result in the early payout
+of virtual shares under the E.ON Share Matching Plan.
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+75
+Corporate Governance Declaration in Accor-
+dance with Section 289a and Section 315,
+Paragraph 5, of the German Commercial Code
+Declaration Made in Accordance with Section 161 of the
+German Stock Corporation Act by the Management Board
+and the Supervisory Board of E.ON SE
+The Board of Management and the Supervisory Board hereby
+declare that E.ON SE will comply in full with the recommen-
+dations of the "Government Commission German Corporate
+Governance Code," dated May 5, 2015, published by the Federal
+Ministry of Justice in the official section of the Federal Gazette
+(Bundesanzeiger).
+CEO Letter
+to be offered for purchase and transferred to individuals who
+are employed by the Company or one of its affiliates.
+to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+•
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+73
+Management Board's Power to Issue or Buy Back Shares
+Pursuant to a resolution of the Shareholders Meeting of May 3,
+2012, the Company is authorized, until May 2, 2017, to acquire
+own shares. The shares acquired and other own shares that are
+in possession of or to be attributed to the Company pursuant to
+Sections 71a et seq. of the AktG must altogether at no point
+account for more than 10 percent of the Company's share capital.
+At the Management Board's discretion, the acquisition may be
+conducted:
+With regard to treasury shares that will be or have been acquired
+based on the above-mentioned authorization and/or prior
+authorizations by the Shareholders Meeting, the Management
+Board is authorized, subject to the Supervisory Board's consent
+and excluding shareholder subscription rights, to use these
+shares-in addition to a disposal through a stock exchange or an
+offer granting a subscription right to all shareholders-as follows:
+•
+to be sold and transferred against cash consideration
+•
+through a stock exchange
+•
+to be sold and transferred against contribution in kind
+•
+•
+by means of a public offer directed at all shareholders or a
+public solicitation to submit offers
+by means of a public offer or a public solicitation to submit
+offers for the exchange of liquid shares that are admitted to
+trading on an organized market, within the meaning of the
+German Securities Purchase and Takeover Law, for Company
+shares
+by use of derivatives (put or call options or a combination of
+both).
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, in pursuit of one or more objec-
+tives by the Company and also by affiliated companies or by third
+parties for the Company's account or its affiliates' account.
+•
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utilization
+of authorized or conditional capital.
+Internal Control System for the Accounting Process
+The risk situation of the E.ON Group's operating business at
+year-end 2016 had been changed for two main reasons. First, the
+Uniper spinoff reduced our overall risk exposure and changed
+our risk profile itself. The risks related to conventional generation,
+exploration and production, and global commodity trading were
+transferred to Uniper. Second, our Group-wide Enterprise Risk
+project enabled us to make significant changes to our method-
+ology to reflect E.ON's new business profile. Although the average
+annual risk for the E.ON Group's adjusted EBIT is classified as
+major, from today's perspective we do not perceive any risk
+position that could threaten the existence of the E.ON Group or
+individual segments.
+Management Boards's Evaluation of the Risk
+Situation
+•
+The E.ON SE Supervisory Board had twelve members until a
+corresponding change in the Company's Articles of Association
+was entered in the commercial register. Since this change in the
+Company's Articles of Association was entered in the commercial
+register and until the conclusion of the Annual Shareholders
+Meeting that votes to approve the actions of the Supervisory
+Board and Management Board for the 2017 financial year, the
+Supervisory Board consists of 18 members. After this, it will
+again consist of 12 members. Pursuant to the Company's Articles
+of Association, it is composed of an equal number of shareholder
+and employee representatives. The shareholder representatives
+are elected by the shareholders at the Annual Shareholders
+Meeting; the Supervisory Board nominates candidates for this
+purpose. Pursuant to the agreement regarding employees'
+involvement in E.ON SE, the other currently nine members of
+the Supervisory Board are appointed by the SE Works Council,
+with the proviso that at least three different countries are rep-
+resented and one member is selected by a trade union that is
+represented at E.ON SE or one of its subsidiaries in Germany.
+Persons are not eligible as Supervisory Board members if they:
+Supervisory Board
+A Risk Committee ensures the correct application and implemen-
+tation of the legal requirements of Section 91 of the German
+Stock Corporation Act ("AktG"). This committee monitors the
+E.ON Group's risk situation and its risk-bearing capacity and
+devotes particular attention to the early-warning system to
+ensure the early identification of going-concern risks to avoid
+developments that could potentially threaten the Group's con-
+tinued existence. In this context, the Risk Committee also deals
+with risk-mitigation strategies, including hedging strategies. In
+collaboration with relevant departments, the committee ensures
+and refines the implementation of, and compliance with, the
+Company's reporting policies with regard to commodity risks,
+credit risks, and enterprise risk management.
+A Disclosure Committee supports the Management Board on
+issues relating to financial disclosures and ensures that such
+information is disclosed in a correct and timely fashion.
+In addition, the Management Board has established a number
+of committees that support it in the fulfillment of its tasks. The
+members of these committees are senior representatives of
+various departments of E.ON SE whose experience, responsi-
+bilities, and expertise make them particularly suited for their
+committee's tasks. Among these committees are the following:
+77
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+•
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+Members of the Management Board are also required to promptly
+report conflicts of interest to the Executive Committee of the
+Supervisory Board and to inform the other members of the
+Management Board. Members of the Management Board may
+only assume other corporate positions, particularly appoint-
+ments to the supervisory boards of non-Group companies, with
+the consent of the Executive Committee of the Supervisory
+Board. There were no conflicts of interest involving members of
+the E.ON SE Management Board in 2016. Any material transac-
+tions between the Company and members of the Management
+Board, their relatives, or entities with which they have close per-
+sonal ties require the consent of the Executive Committee of
+the Supervisory Board. No such transactions took place in 2016.
+The Chairperson of the Management Board informs, without
+undue delay, the Chairperson of the Supervisory Board of import-
+ant events that are of fundamental significance in assessing
+the Company's situation, development, and management and
+of any defects that have arisen in the Company's monitoring
+systems. Transactions and measures requiring the Supervisory
+Board's approval are also submitted to the Supervisory Board in
+a timely manner.
+The Management Board regularly reports to the Supervisory
+Board on a timely and comprehensive basis on all relevant issues
+of strategy, planning, business development, risk situation, risk
+management, and compliance. It also submits the Group's invest-
+ment, finance, and personnel plan for the coming financial year
+as well as the medium-term plan to the Supervisory Board for
+its approval, generally at the last meeting of each financial
+year.
+In 2016 the Management Board consisted of four members
+initially, effective April 1, 2016, of five members, and effective
+July 1, 2016, again of four members and had one Chairman.
+Effective January 1, 2017, the Management Board consists of
+five members and has one Chairman. Michael Sen will end his
+service on the Management Board at the conclusion of March 31,
+2017. Someone who has reached the general retirement age
+should not be a member of the Management Board. The Man-
+agement Board has in place policies and procedures for the
+business it conducts and, in consultation with the Supervisory
+Board, has assigned task areas to its members.
+The E.ON SE Management Board manages the Company's
+businesses, with all its members bearing joint responsibility for
+its decisions. It establishes the Company's objectives, sets its
+fundamental strategic direction, and is responsible for corporate
+policy and Group organization.
+Management Board
+Description of the Functioning of the Management Board and
+Supervisory Board and of the Composition and Functioning of
+Their Committees
+www.eon.com.
+E.ON Stock
+•
+are already supervisory board members in ten commercial
+companies that are required by law to form a supervisory
+board
+are legal representatives of an enterprise controlled by the
+Company
+Lehner, Prof. Dr. Ulrich
+2/2
+2/2
+3/3
+3/3
+Kley, Dr. Karl-Ludwig (since June 8)
+Nomination
+Committee
+Finance and
+Investment
+Committee
+Audit and Risk
+Committee
+Executive
+Committee
+Meetings
+Supervisory Board member
+Supervisory Board
+Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board
+and Its Committees
+Furthermore, the Supervisory Board's policies and procedures
+gave it the option, if necessary, of holding executive sessions;
+that is, to meet without the Management Board.
+Board. In the event of a tie vote on the Supervisory Board, the
+Chairperson has the tie-breaking vote.
+The Supervisory Board has established policies and procedures
+for itself. It holds four regular meetings in each financial year. Its
+policies and procedures include mechanisms by which, if neces-
+sary, a meeting of the Supervisory Board or one of its committees
+can be called at any time by a member or by the Management
+78
+Corporate Governance Report
+The Supervisory Board oversees the Company's management
+and advises the Management Board on an ongoing basis. The
+Management Board requires the Supervisory Board's prior
+approval for significant transactions and measures, such as the
+Group's investment, finance, and personnel plans; the acquisi-
+tion or sale of companies, equity interests, or parts of companies
+whose fair value or, in the absence of a fair value, whose book
+value exceeds €300 million; financing measures that exceed
+€1 billion and have not been covered by Supervisory Board res-
+olutions regarding finance plans; and the conclusion, amendment,
+or termination of affiliation agreements. The Supervisory Board
+examines the Financial Statements of E.ON SE, the Management
+Report, and the proposal for profit appropriation and, on the
+basis of the Audit and Risk Committee's preliminary review, the
+Consolidated Financial Statements and the Combined Group
+Management Report. The Supervisory Board provides to the
+Annual Shareholders Meeting a written report on the results of
+this examination.
+At least one member of the Supervisory Board must have
+expertise in preparing or auditing financial statements. The
+Supervisory Board believes that Dr. Theo Siegert meets this
+requirement. The Supervisory Board believes that its members
+in their entirety are familiar with the sector in which the Com-
+pany operates.
+were a member of the Company's Management Board in the
+past two years, unless the person concerned is nominated
+by shareholders who hold more than 25 percent of the Com-
+pany's voting rights.
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Management Board
+Our actions are grounded in integrity and a respect for the law.
+The basis for this is the Code of Conduct established by the
+Management Board. It emphasizes that all employees must
+comply with laws and regulations and with Company policies.
+These relate to dealing with business partners, third parties,
+and government institutions, particularly with regard to antitrust
+law, the granting and accepting of benefits, the involvement
+of intermediaries, and the selection of suppliers and service pro-
+viders. Other rules address issues such as the avoidance of con-
+flicts of interest (such as the prohibition to compete, secondary
+employment, material financial investments) and handling
+company information, property, and resources. The policies and
+procedures of our compliance organization ensure the investi-
+gation, evaluation, cessation, and punishment of reported viola-
+tions by the appropriate Compliance Officers and the E.ON
+Group's Chief Compliance Officer. Violations of the Code of Con-
+duct can also be reported anonymously (for example, by means
+of a whistleblower report). The Code of Conduct is published on
+Integrity
+Persons with executive responsibilities, in particular members
+of E.ON SE's Management Board and Supervisory Board, and
+persons closely related to them, must disclose specific dealings
+in E.ON stock or bonds, related derivates, or other related finan-
+cial instruments pursuant to Section 15a, Paragraph 2, of the
+German Securities Trading Act in conjunction with Article 19 of
+the EU Market Abuse Regulation. Such dealings that took place
+in 2016 have been disclosed on the Internet at www.eon.com.
+As of December 31, 2016, there was no ownership interest
+subject to disclosure pursuant to Item 6.2 of the German Cor-
+porate Governance Code.
+Directors' Dealings
+Dr. Karl-Ludwig Kley
+For the Supervisory Board of E.ON SE:
+Essen, December 16, 2016
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+69
+69
+In the case of planned disposals, E.ON faces the risk of disposals
+not taking place or being delayed and the risk that E.ON receives
+lower-than-anticipated disposal proceeds. In such projects, it is
+not possible to determine the likelihood of these risks. In addition,
+after transactions close we could face liability risks resulting
+from contractual obligations.
+The risk and chance position in this category was not major at
+the balance-sheet date.
+Finance and Treasury Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results from
+non-delivery or partial delivery by a counterparty of the agreed
+consideration for services rendered, from total or partial failure
+to make payments owing on existing accounts receivable, and
+from replacement risks in open transactions. In addition, in
+unlikely cases joint and several liability for jointly operated power
+plants lead to a high risk.
+E.ON's international business operations expose it to risks from
+currency fluctuation. One form of this risk is transaction risk,
+which occurs when payments are made in a currency other than
+E.ON's functional currency. Another form of risk is translation
+risk, which occurs when currency fluctuations lead to accounting
+effects when assets/liabilities and income/expenses of E.ON
+companies outside the euro zone are translated into euros and
+entered into our Consolidated Financial Statements. Currency-
+translation risk results mainly from our positions in U.S. dollars,
+pounds sterling, Swedish kronor, Czech krona, Romanian leus,
+Hungarian forints, and Turkish lira. Positive developments in
+foreign-currency rates can also create chances for our operating
+business.
+E.ON faces earnings risks from financial liabilities and interest
+derivatives that are based on variable interest rates.
+In addition, E.ON also faces major risks from price changes and
+uncertainty on the current and non-current investments it makes
+to cover its non-current obligations, particularly pension and
+asset-retirement obligations. Furthermore, E.ON owns a minority
+stake in Uniper. A high degree of uncertainty attends this
+minority stake due to fluctuations in Uniper's stock price and
+earnings effects from Uniper's net income.
+Furthermore, uncertainties regarding investment partners and
+projects could lead to higher-than-anticipated investment
+expenditures.
+Declining or rising discount rates could lead to increased or
+reduced provisions for pensions and asset-retirement obligations,
+including long-term liabilities. This can create a high degree of
+uncertainty for E.ON.
+In principle, E.ON could also encounter tax risks and chances
+that unlikely cases could be high. Specifically, the new adminis-
+tration in the United States could propose legislative changes
+that could, in particular, significantly reduce corporate tax rates,
+accelerate depreciation, and limit the tax deductions on imported
+economic goods. Such changes could pose major risks for our
+Renewables segment's future U.S. renewables projects resulting
+from a significant reduction in tax-equity demand.
+A favorable court ruling regarding Germany's nuclear-fuel tax
+would create a high chance for a refund. Similarly, PreussenElektra
+is involved in arbitration proceedings with contract partners
+regarding long-term supply contracts and nuclear fuel elements.
+These proceedings could present major chances as well as risks.
+This category's risk and chance position is not major.
+(Chairman of the Supervisory Board of E.ON SE)
+According to Section 4.2.3, Paragraph 2, Sentence 8 of the
+German Corporate Governance Code, there should be no retro-
+active changes to the performance targets or the comparison
+parameters of the Management Board's compensation. In April
+2016 the E.ON SE Supervisory Board decided to adjust the
+performance targets for performance matching of the tranches
+of the long-term incentive granted in 2013 to 2015 under the
+E.ON Share Matching Plan. In view of the Uniper spinoff, this
+adjustment was necessary for three reasons. First, the perfor-
+mance targets for performance matching were linked to ROACE,
+which, from the start of 2016, the Company no longer uses as a
+key performance indicator. Second, the calculations were based
+on old budget numbers, which did not foresee the Uniper spinoff.
+Third, the anticipated reduction in E.ON's stock price resulting
+from the Uniper spinoff had to be factored in.
+Relevant Information about Management Practices
+E.ON views good corporate governance as a central foundation
+of responsible and value-oriented management, efficient collab-
+oration between the Management Board and the Supervisory
+Board, transparent disclosures, and appropriate risk management.
+76
+Corporate Governance Report
+The declaration is continuously available to the public on the
+Company's Internet page at www.eon.com.
+(Chairman of the Management Board of E.ON SE)
+Dr. Johannes Teyssen
+For the Management Board of E.ON SE:
+The financial calendar and ad hoc statements are available on
+the Internet at www.eon.com.
+In addition to the Company's periodic financial reports, the
+Company issues ad hoc statements when events or changes
+occur at E.ON SE that could have a significant impact on the
+price of E.ON stock.
+A financial calendar lists the dates on which the Company's
+financial reports are released.
+Numerous events for financial analysts in and outside
+Germany.
+Telephone conferences held on release of the quarterly
+Interim Reports and the Annual Report
+Press releases
+Annual press conference
+•
+•
+•
+Annual Report
+•
+Interim Reports
+E.ON SE issues reports about its situation and earnings by the
+following means:
+Transparency is a high priority of the Management Board and
+Supervisory Board. Our shareholders, all capital market partici-
+pants, financial analysts, shareholder associations, and the media
+regularly receive up-to-date information about the situation of,
+and any material changes to, the Company. We primarily use
+the Internet to help ensure that all investors have equal access
+to comprehensive and timely information about the Company.
+Transparent Management
+In 2016 the Management Board and Supervisory Board paid
+close attention to E.ON's compliance with the German Corporate
+Governance Code's recommendations and suggestions. They
+determined that E.ON fully complies with all of the Code's rec-
+ommendations, with the above-mentioned exception, and with
+nearly all of its suggestions.
+Corporate Governance
+Compensation Structure¹
+For E.ON SE, the Management Board set a target of 23 percent
+for the proportion of women in the first level of management
+below the Management Board and a target of 17 percent for the
+second level of management below the Management Board.
+The deadline for achieving both targets is June 30, 2017. At the
+time the Management Board made these decisions, the propor-
+tion of women in first and second levels of management below the
+Management Board was 20 percent and 15 percent, respectively.
+Report of the Supervisory Board
+181,636
+44,022
+775,000
+300,000³
+Michael Sen
+183,067
+302,237
+46,662
+245,229
+33,040
+285,135
+Dr. Bernhard Reutersberg (until June 30, 2016)
+369,157
+580,199
+57,032
+80,762
+1,144,001
+1,063,643
+936,000
+Dr.-Ing. Leonhard Birnbaum
+Dr. Karsten Wildberger (since April 1, 2016)
+52,144
+Cash value at December 31
+Additions to provisions for pensions
+Current pension entitlement at December 31
+Pensions of Management Board Members Pursuant to IFRS
+per-
+provisions for pensions, and the cash value of pension obligations.
+The cash value of pension obligations is calculated pursuant to
+IFRS. An actuarial interest rate of 2.1 percent (prior year: 2.7 |
+cent) was used for discounting.
+The following table provides an overview of the current pension
+obligations to Management Board members, the additions to
+Management Board Pensions in 2016
+675,000
+Long-term variable compensation granted for the 2016 financial
+year totaled €4.2 million. Note 11 to the Consolidated Financial
+Statements contains additional details about stock-based com-
+pensation.
+1,202,564
+2,338,708
+245,706
+304,708
+4,820,601
+4,151,294
+Total
+265,966
+¹Consists of the LTI component (based on the target bonus) for the respective financial year for which at the time of granting no amount of shares can be determined.
+2Expense/income pursuant to IFRS 2 for performance rights and virtual shares existing in the 2016 financial year.
+3Target value for the virtual stock that was part of the LTI component of Mr. Sen's 2016 bonus. No other stock was granted under base or performance matching due to his resignation in 2017.
+405,111
+1,008,670
+2015
+The long-term variable compensation of Management Board
+members resulted in the following expenses in 2016:
+The Supervisory Board issued a new tranche of the E.ON Share
+Matching Plan (2016-2020) for the 2016 financial year and
+granted Management Board members virtual shares of E.ON
+stock. The present value assigned to the virtual shares of E.ON
+stock at the time of granting-€8.63 per share-is shown in
+the following tables entitled "Stock-based Compensation" and
+"Total Compensation." The value performance of this tranche
+will be determined by the performance of E.ON stock, the per-
+share dividends, and ROCE of the next four years. The actual
+payments made to Management Board members in 2020 may
+deviate, under certain circumstances considerably, from the
+calculated figures disclosed here.
+The annual bonuses of Management Board members for 2016
+totaled €4.3 million (2015: €4.6 million).
+Performance-Based Compensation in 2016
+The Supervisory Board reviewed the Management Board's
+compensation plan and the components of individual members'
+compensation. It determined that the Management Board's
+compensation is appropriate from both a horizontal and vertical
+perspective and passed a resolution on the performance-based
+compensation described below. It made its determination of
+customariness from a horizontal perspective by comparing the
+compensation with that of companies of a similar size. Its review
+of appropriateness included a vertical comparison of the Manage-
+ment Board's compensation with that of the Company's top
+management and the rest of its workforce. In the Supervisory
+Board's view, in 2015 there was no reason to adjust the Man-
+agement Board's compensation.
+Management Board Compensation in 2016
+The service agreements of Management Board members include
+a non-compete clause. For a period of six months after the
+termination of their service agreement, Management Board
+members are contractually prohibited from working directly
+or indirectly for a company that competes directly or indirectly
+with the Company or its affiliates. Management Board mem-
+bers receive a compensation payment for the period of the
+non-compete restriction. The prorated payment is based on
+100 percent of their contractually stipulated annual target
+compensation (without long-term variable compensation) but
+is, at a minimum, 60 percent of their most recently received
+compensation.
+accordance with the German Corporate Governance Code, the
+settlement payments for Management Board members would
+be equal to 100 percent of the above-described settlement cap.
+Stock-based Compensation
+In the event of a premature loss of a Management Board position
+due to a change of control, Management Board members are
+entitled to settlement payments. The change-of-control agree-
+ments stipulate that a change in control exists in three cases: a
+third party acquires at least 30 percent of the Company's voting
+rights, thus triggering the automatic requirement to make an
+offer for the Company pursuant to Germany's Stock Corporation
+Takeover Law; the Company, as a dependent entity, concludes
+a corporate agreement; the Company is merged with non-affili-
+ated company. Management Board members are entitled to a
+settlement payment if, within 12 months of the change of con-
+trol, their service agreement is terminated by mutual consent,
+expires, or is terminated by them (in the latter case, however, only
+if their position on the Management Board is materially affected
+by the change in control). Management Board members' settle-
+ment payment consists of their base salary and target bonus
+plus fringe benefits for two years. To reflect discounting and
+setting off of payment for services rendered to other companies
+or organizations, payments will be reduced by 20 percent. In
+Settlement Payments for Termination of Management Board
+Duties
+In line with the German Corporate Governance Code's recom-
+mendation, the Supervisory Board reviews, on a regular basis,
+the benefits level of Management Board members and the
+resulting annual and long-term expense and, if necessary, adjusts
+the payments.
+Pursuant to the provisions of the German Occupational Pensions
+Improvement Act, Management Board members' pension enti-
+tlements are not vested until they have been in effect for five
+years. This applies to both contribution-based and final-salary-
+based pension plans.
+The pension entitlements of Dr. Teyssen and Dr. Reutersberg
+provide for annual pension payments equal to 75 percent and
+70 percent, respectively, of their last annual base salary. The full
+amount of any pension entitlements from earlier employment
+is offset against these payments. In addition, the pension plan
+includes benefits for widows and widowers and for surviving
+children that are equal to 60 percent and 15 percent, respectively,
+of the deceased Management Board member's pension entitle-
+ment. Together, pension payments to a widow or widower and
+children may not exceed 100 percent of the deceased Manage-
+ment Board member's pension.
+96
+86
+Corporate Governance Report
+Term in years
+In line with the German Corporate Governance Code's recom-
+mendation, the service agreements of Management Board
+members include a settlement cap. Under the cap, settlement
+payments in conjunction with a termination of Management
+Board duties may not exceed the value of two years' total com-
+pensation or the total compensation for the remainder of the
+member's service agreement.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+2016
+2015
+97,990
+138,762
+1,965,600
+1,827,516
+Dr. Johannes Teyssen
+2016
+2015
+2016
+€
+expense (+)/income (-)2
+Cumulative
+Number of virtual
+shares granted
+Value of virtual shares
+at time of granting¹
+87
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+As a percentage
+of annual base
+compensation
+Thereof interest cost
+2016
+(until June 30, 2016)
+Dr. Bernhard Reutersberg²
+16,634,112
+832,842
+(€)
+2015
+2016
+2015
+638,785 17,112,852
+24,031 994,209
+647,067
+32,398
+2016
+70
+(€)
+478,740
+161,367
+Dr.-Ing. Leonhard Birnbaum¹
+2016
+2015
+930,000
+75 930,000
+75
+Dr. Johannes Teyssen
+2016
+(€)
+2015
+2,563,967
+303,531
+70
+490,000
+490,000
+CEO Letter
+Under a termination agreement concluded in December 2016,
+Mr. Sen's service agreement will end by mutual consent effective
+March 31, 2017, without compensation for residual claims
+under his agreement, because Mr. Sen is ending his service on the
+E.ON SE Management Board on this date at his own request.
+Because Mr. Sen did not reach the five-year vesting period, he
+forfeits the company-founded entitlement to a company pension.
+He also forfeits the virtual stock granted to him in 2015 and
+2016 as part of the E.ON Share Matching Plans with the excep-
+tion of the virtual stock included in the LTI component of his
+2015 and 2016 bonuses. The latter will continue until the nor-
+mal end of the vesting period of their respective tranches. The
+non-compete clause was waived without compensation.
+Dr. Wildberger joined the E.ON SE Management Board on April 1,
+2016. The Company paid him a lump sum of €100,000 to cover
+the costs of maintaining two residences and of relocating his
+residence. In addition, he received a one-time compensation pay-
+ment of €1.3 million for bonus payments and stock entitlements
+from his previous employer that he forfeited owing to his move
+to E.ON SE.
+In view of Dr. Reutersberg's assumption of the duties of Chairman
+of the Uniper SE Supervisory Board, he ended his service on
+the E.ON SE Management Board by mutual consent effective
+June 30, 2016. The Company concluded a severance agree-
+ment with him. Dr. Reutersberg's service agreement was termi-
+nated by mutual consent effective June 30, 2016, without
+compensation for residual claims under his agreement. The per-
+formance rights and virtual shares granted to him remain valid
+and will be calculated and paid out at the end of the respective
+vesting periods. Dr. Reutersberg has received his company pen-
+sion since July 1, 2016. The non-compete clause was waived
+without payment of compensation. The Company paid him a
+bonus of €390,000 for the first half of the year.
+The total compensation of the members of the Management
+Board in the 2016 financial year amounted to €13.8 million,
+about 11 percent below the prior-year figure of €15.6 million
+disclosed in the 2015 Annual Report.
+Total Compensation in 2016
+The cash value of Management Board pensions for which pro-
+visions are required increased relative to year-end 2015. The
+reason for the increase is that the actuarial interest rate E.ON
+uses for discounting was significantly below the prior-year figure.
+2Dr. Reutersberg retired effective July 1, 2016. At December 31, 2016, the cash value of his pension benefits as a retired individual totaled €9,446,346. The calculation of the figure shown under "Thereof interest
+cost" factored in the pension payments made in July through December of 2016.
+³Under the termination agreement concluded with Mr. Sen, the benefit amount shown here expires at the conclusion of March 31, 2017.
+¹Contribution Plan E.ON Management Board.
+226,291
+226,291
+(since April 1, 2016)
+Dr. Karsten Wildberger¹
+155,232
+404,266
+9,825,614
+377,451 419,724
+6,039
+-624,266 580,589
+249,034 155,232
+Michael Sen¹,3
+2015
+5
+2016
+compensation
+490,000
+70
+70
+(until June 30, 2016)
+Dr. Bernhard Reutersberg²
+20,696,284
+979,798
+24,011,814
+1,275,012
+(€)
+2015
+Michael Sen1,3
+2016
+2016
+558,800
+26,455
+(€)
+(€)
+2015
+1,355,305
+504,474
+2016
+2015
+2016
+2015
+75 930,000 930,000 1,338,260
+407,044
+Dr.-Ing. Leonhard Birnbaum¹
+75
+Dr. Johannes Teyssen
+2015
+459,838
+15,370
+308,563
+275,898
+263,766
+181,808
+308,563 263,766
+4,909
+Thereof interest cost
+of annual base
+As a percentage
+Cash value at December 31
+Additions to provisions for pensions
+Current pension entitlement at December 31
+Pensions of Management Board Members Pursuant to the German Commercial Code
+88
+Corporate Governance Report
+³Under the termination agreement concluded with Mr. Sen, the benefit amount shown here expires at the conclusion of March 31, 2017.
+²Dr. Reutersberg retired effective July 1, 2016. At December 31, 2016, the cash value of his pension benefits as a retired individual totaled €12,223,648. The calculation of the figure shown under "Thereof interest
+cost" factored in the pension payments made in July through December of 2016.
+¹Contribution Plan E.ON Management Board.
+292,555
+292,555
+(since April 1, 2016)
+Dr. Karsten Wildberger¹
+181,808
+523,074
+11,550,766
+(€)
+4
+490,000
+1 2
+The compensation of Management Board members consists
+of a fixed base salary, an annual bonus, and long-term variable
+remuneration. These components account for approximately
+the following percentages of total compensation:
+The Supervisory Board approves the Executive Committee's
+proposal for the Management Board's compensation plan. It
+reviews the plan and the appropriateness of the Management
+Board's total compensation as well as the individual components
+on a regular basis and, if necessary, makes adjustments. It
+considers the provisions of the German Stock Corporation Act
+and follows the German Corporate Governance Code's recom-
+mendations and suggestions.
+The purpose of the Management Board compensation plan, which
+was last revised in 2013 and was valid until year-end 2016, is
+to create an incentive for successful and sustainable corporate
+governance and to link the compensation of Management Board
+members with the Company's actual (short-term and long-term)
+performance while also factoring in their individual performance.
+Under the plan, Management Board members' compensation
+is therefore transparent, performance-based, closely aligned
+with the Company's business success, and, in particular, based
+on long-term targets. At the same time, the compensation plan
+serves to align management's and shareholders' interests and
+objectives by basing long-term variable compensation on E.ON's
+stock price.
+Basic Features of the Management Board Compensation Plan
+That Was Valid until December 31, 2016
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Management
+Board and Supervisory Board and provides information about
+the compensation granted and paid in 2016. It applies the pro-
+visions of accounting standards for capital-market-oriented
+companies (the German Commercial Code, German Accounting
+Standards, and International Financial Reporting Standards)
+and the recommendations of the German Corporate Governance
+Code dated May 5, 2015.
+Compensation Report Pursuant to Section 289,
+Paragraph 2, Item 4, and Section 315, Para-
+graph 2, Item 4 of the German Commercial
+Code
+82
+82
+27%
+Bonus
+(annual)
+Corporate Governance Report
+In view of the fundamental organizational changes under way at
+the Company, the E.ON SE Supervisory Board set a short-term
+target of zero percent for the proportion of women on the Man-
+agement Board and a deadline of December 31, 2016, for
+implementation. In 2016 the Management Board consisted of
+four and, for a time five, men. In December 2016 the Supervisory
+Board set a new target of 20 percent for the proportion of women
+on the Management Board and a deadline of December 31, 2021,
+for implementation.
+Women and Men in Leadership Positions pursuant to Section
+76, Paragraph 4, and Section 111, Paragraph 5, of the German
+Stock Corporation Act
+At the Annual Shareholders Meeting on June 8, 2016, Price-
+waterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
+was selected to be E.ON SE's independent auditor for the 2016
+financial year and the first quarter of 2017. Under German law,
+the shareholders meeting elects the company's independent
+auditor for one financial year. The independent auditors with
+signing authority for the Annual Financial Statements of E.ON SE
+and the Consolidated Financial Statements are Markus Dittmann
+(since the 2014 financial year) and Aissata Touré (since the 2015
+financial year).
+As stipulated by German law, the Annual Shareholders Meeting
+votes to elect the Company's independent auditor.
+At the Annual Shareholders Meeting, shareholders may vote their
+shares themselves, through a proxy of their choice, or through
+a Company proxy who is required to follow the shareholder's
+voting instructions.
+E.ON SE shareholders exercise their rights and vote their shares
+at the Annual Shareholders Meeting. The Company's financial
+calendar, which is published in the Annual Report, in the quarterly
+Interim Reports, and on the Internet at www.eon.com, regularly
+informs shareholders about important Company dates.
+Shareholders and Annual Shareholders Meeting
+All committees meet at regular intervals and when specific
+circumstances require it under their policies and procedures. The
+Report of the Supervisory Board (on pages 6 to 11) contains
+information about the activities of the Supervisory Board and its
+committees in 2016. Pages 222 and 223 show the composition
+of the Supervisory Board and its committees.
+For all other E.ON Group companies, targets and deadlines
+pursuant to the Law for the Equal Participation of Women and
+Men in Leadership Positions in the Private Sector and the Public
+Sector were set for the proportion of women on these companies'
+supervisory board and management board or team of managing
+directors as well as in the next two levels of management. As
+required by law, these targets and deadlines were set by Septem-
+ber 30, 2015.
+The Nomination Committee consists of three sharehold-
+er-representative members. Its Chairperson is the Chairperson
+of the Supervisory Board. Its task is to recommend to the Super-
+visory Board, taking into consideration the Supervisory Board's
+targets for its composition, suitable candidates for election
+to the Supervisory Board by the Annual Shareholders Meeting.
+13%
+Bonus
+(multi-year)
+30%
+Base salary
+Report of the Supervisory Board
+CEO Letter
+Base Salary
+Paid out
+STI component
+2/3:
+Transferred into
+virtual shares
+LTI component
+30%
+1/3:
+Granting of
+virtual shares
+Granting of virtual
+shares based on
+return on capital
+Base
+Matching
+Performance
+Matching
+Share
+Matching
+Plan
+The following graphic provides an overview of the compensation
+plan for Management Board members:
+¹Not including non-cash compensation, other benefits, and pension benefits.
+Long-term incentive
+(Share Matching Plan)
+Bonus
+If the value of any such transactions or measures exceeds
+the above-mentioned thresholds, the Finance and Investment
+Committee prepares the Supervisory Board's decision.
+81
+Summary of Financial Highlights and Explanations
+In its current composition the Supervisory Board already meets
+the targets it set for a sufficient number of independent mem-
+bers and company-specific qualification requirements. The
+Supervisory Board currently has two female members among its
+shareholder representatives and two female members among
+its employee representatives. The composition of the Supervisory
+Board therefore complies with the legally mandated minimum
+percentages for women and men.
+Supervisory Board members in their entirety are familiar with the
+sector in which the Company operates. As required by law, the
+Supervisory Board consists of at least 30 percent women and at
+least 30 percent men. This will be considered for new appointments
+to the Supervisory Board."
+In view of the E.ON Group's international orientation, the Super-
+visory Board should include a sufficient number of members who
+have spent a significant part of their professional career abroad.
+If the qualifications of several candidates for the Supervisory Board
+meet, to an equal degree, the general and company-related
+requirements, the Supervisory Board intends to consider other
+criteria in its nomination of candidates in order to increase the
+Supervisory Board's diversity.
+In addition, the Supervisory Board as a whole should have parti-
+cular expertise in the energy sector and the E.ON Group's business
+operations. Such expertise includes knowledge about the key
+markets in which the E.ON Group operates.
+The key role of the Supervisory Board is to oversee and advise the
+Management Board. Consequently, a majority of the shareholder
+representatives on the Supervisory Board should have experience
+as members of the board of management of a stock corporation
+or of a comparable company or association in order to discharge
+their duties in a qualified manner.
+As a general rule, Supervisory Board members should not be older
+than 72 at the time of their election and should not be members
+for more than three terms (15 years).
+Each Supervisory Board member must have sufficient time
+available to perform his or her directorship duties. Persons who
+are members of the board of management of a listed company
+shall therefore only be eligible as members of E.ON's Supervisory
+Board if they do not sit on more than three supervisory boards of
+listed non-Group companies or in comparable supervisory bodies
+of non-Group companies.
+In addition, under the Supervisory Board's policies and proce-
+dures, Supervisory Board members are required to disclose to
+the Supervisory Board any conflicts of interest, particularly if a
+conflict arises from their advising, or exercising a board function
+with, one of E.ON's customers, suppliers, creditors, or other
+third parties. The Supervisory Board reports any conflicts of
+interest to the Annual Shareholders Meeting and describes how
+the conflicts have been dealt with. Any material conflict of
+interest of a non-temporary nature should result in the termi-
+nation of a member's appointment to the Supervisory Board.
+There were no conflicts of interest involving members of the
+Supervisory Board in the reporting period. Any consulting or
+other service agreements between the Company and a Super-
+visory Board member require the Supervisory Board's consent.
+No such agreements existed in the reporting period.
+The Supervisory Board should not include more than two former
+members of the Management Board, and members of the Super-
+visory Board must not sit on the boards of, or act as consultants
+for, any of the Company's major competitors.
+a material, and not merely temporary, conflict of interest. The
+Supervisory Board has a sufficient number of independent mem-
+bers if sixteen of its eighteen members are independent.
+79
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+3
+Employee representatives are, as a rule, deemed independent.
+The Supervisory Board has established the following committees
+and defined policies and procedures for them:
+The Executive Committee consists of four members: the Super-
+visory Board Chairperson, his or her two Deputies, and a further
+employee representative. It prepares the meetings of the Super-
+visory Board and advises the Management Board on matters of
+general policy relating to the Company's strategic development.
+In urgent cases (in other words, if waiting for the Supervisory
+Board's prior approval would materially prejudice the Company),
+Corporate Governance Report
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+The Finance and Investment Committee consists of four mem-
+bers. It advises the Management Board on all issues of Group
+financing and investment planning. It decides on behalf of the
+Supervisory Board on the approval of the acquisition and dis-
+position of companies, equity interests, and parts of companies
+whose value exceeds €300 million but does not exceed €600 mil-
+lion. In addition, it decides on behalf of the Supervisory Board
+on the approval of financing measures whose value exceeds
+€1 billion but not €2.5 billion if such measures are not covered
+by the Supervisory Board's resolutions regarding finance plans.
+inform the Chairperson of the Audit and Risk Committee of,
+or to note in the audit report, any facts that arise during the
+audit that contradict the statements submitted by the Man-
+agement Board or Supervisory Board in connection with the
+German Corporate Governance Code.
+promptly inform the Supervisory Board of anything arising
+during the course of the audit that is of relevance to the
+Supervisory Board's duties
+manner
+promptly inform the Chairperson of the Audit and Risk Com-
+mittee should any such facts arise during the course of the
+audit unless such facts are promptly resolved in satisfactory
+•
+•
+to:
+In being assigned the audit task, the independent auditor agrees
+tested on a regular basis by our Internal Audit division; the Audit
+and Risk Committee regularly monitors the work done by the
+Internal Audit division and the definition of audit priorities. In
+addition, the Audit and Risk Committee prepares the proposal
+on the selection of the Company's independent auditor for the
+Annual Shareholders Meeting. In order to ensure the auditor's
+independence, the Audit and Risk Committee secures a statement
+from the proposed auditors detailing any facts that could lead
+to the audit firm being excluded for independence reasons or
+otherwise conflicted.
+The Audit and Risk Committee consists of four members. The
+Supervisory Board believes that, in their entirety, the members
+of the Audit and Risk Committee are familiar with the sector in
+which the Company operates. According to the AktG, the Audit
+and Risk Committee must include one Supervisory Board mem-
+ber who has expertise in accounting and/or auditing. Pursuant
+to the recommendations of the German Corporate Governance
+Code, the Chairperson of the Audit and Risk Committee should
+have special knowledge and experience in the application of
+accounting principles and internal control processes. In addition,
+this person should be independent and should not be a former
+Management Board member whose service on the Management
+Board ended less than two years ago. The Supervisory Board
+believes that the Chairman of the Audit and Risk Committee,
+Dr. Theo Siegert, fulfills these requirements. In particular, the
+Audit and Risk Committee monitors the Company's accounting
+and the accounting process; the effectiveness of internal control
+systems, internal risk management, and the internal audit sys-
+tem; compliance; and the independent audit. With regard to the
+independent audit, the committee also deals with the definition
+of the audit priorities and the agreement regarding the indepen-
+dent auditor's fees. The Audit and Risk Committee also prepares
+the Supervisory Board's decision on the approval of the Financial
+Statements of E.ON SE and the Consolidated Financial State-
+ments. It also examines the Company's quarterly Interim Reports
+and discusses the audit review of the Interim Reports with the
+independent auditor and regularly reviews the Company's risk
+situation, risk-bearing capacity, and risk management. The effec-
+tiveness of the internal control mechanisms for the accounting
+process used at E.ON SE and the global and regional units is
+the Executive Committee acts on the full Supervisory Board's
+behalf. In addition, a key task of the Executive Committee is to
+prepare the Supervisory Board's personnel decisions and reso-
+lutions for setting the respective total compensation of individual
+Management Board members within the meaning of Section 87,
+AktG. Furthermore, it is responsible for the conclusion, alteration,
+and termination of the service agreements of Management
+Board members and for presenting the Supervisory Board with
+a proposal for a resolution on the Management Board's com-
+pensation plan and its periodic review. It also deals with corpo-
+rate-governance matters and reports to the Supervisory Board,
+generally once a year, on the status and effectiveness of, and
+possible ways of improving, the Company's corporate governance
+and on new requirements and developments in this area.
+80
+80
+E.ON Stock
+Strategy and Objectives
+CEO Letter
+Consolidated Financial Statements
+Dividends
+: €
+=
+X plus
+Stock Price
+ROCE
+4-year
+average in %
+component
+1/3: LTI
+Matching
+Base
+Matching
+Performance
+Long-Term Variable Compensation: E.ON Share Matching Plan
+The long-term variable compensation that Management Board
+members receive is a stock-based compensation under the E.ON
+Share Matching Plan. At the beginning of each financial year, the
+Supervisory Board decides, based on the Executive Committee's
+recommendation, on the allocation of a new tranche, including
+the respective targets and the number of virtual shares granted
+to individual members of the Management Board. To serve as a
+long-term incentive for sustainable business performance, each
+tranche has a vesting period of four years. The tranche starts on
+April 1 of each year.
+The maximum bonus that can be attained (including any special
+compensation) is 200 percent of the target bonus (cap).
+In addition, the Supervisory Board has the discretionary power
+to make a final, overall assessment on the basis of which it may
+adjust the size of the bonus. This overall assessment does not
+refer to above-described targets or comparative parameters,
+which are not, under the Code's recommendations, supposed
+to be changed retroactively. In addition, the Supervisory Board
+may, as part of the annual bonus, grant Management Board
+members special compensation for outstanding achievements.
+In assigning Management Board members their individual perfor-
+mance factors, the Supervisory Board evaluates their individual
+contribution to the attainment of collective targets as well as
+their attainment of their individual targets. The Supervisory Board,
+at its discretion, determines the degree to which Management
+Board members have met the targets of the individual-perfor-
+mance portion of their annual bonus. In making this determi-
+nation, the Supervisory Board pays particular attention to the
+criteria of Section 87 of the German Stock Corporation Act and
+of the German Corporate Governance Code.
+84
+Corporate Governance Report
+EBITDA figures into percentages. The Supervisory Board then
+evaluates this arithmetically derived figure on the basis of certain
+qualitative criteria and, if necessary, adjusts it within a range of
++20 percentage points. The criteria for this qualitative evaluation
+are the ratio between cost of capital and ROACE, a comparison
+with prior-year EBITDA, and general market developments.
+Extraordinary events are not factored into the determination of
+target attainment.
+Vesting period: 4 years
+The metric used for the company target is our EBITDA. The
+EBITDA target for a particular financial year is the plan figure
+approved by the Supervisory Board. If E.ON's actual EBITDA is
+equal to the EBITDA target, this constitutes 100 percent attain-
+ment. If it is 30 percentage points or more below the target,
+this constitutes zero percent attainment. If it is 30 percentage
+points or more above the target, this constitutes 200 percent
+attainment. Linear interpolation is used to translate intermediate
+Following the Supervisory Board's decision to allocate a new
+tranche, Management Board members initially receive vested
+virtual shares equivalent to the amount of the LTI component
+of their bonus. The determination of the LTI component takes
+into consideration the overall target attainment of the bonus
+for the preceding financial year. The number of virtual shares is
+calculated on the basis of the amount of their LTI component
+and E.ON's average stock price during the first 60 days prior to
+the four-year vesting period. Furthermore, Management Board
+members may receive, on the basis of annual Supervisory Board
+decisions, a base matching of additional non-vested virtual
+shares in addition to the virtual shares resulting from their LTI
+component. In addition, Management Board members may,
+depending on the company's performance during the vesting
+period, receive performance matching of up to two additional
+non-vested virtual shares per share resulting from base matching.
+The arithmetical total target value allocated at the start of the
+vesting period, which begins on April 1 of the year in which
+a tranche is allocated, is therefore the sum of the value of the
+LTI component, base matching, and performance matching
+(depending on the degree of attainment of a predefined company
+performance target).
+Report of the Supervisory Board
+The Company has agreed to a pension plan based on final
+salary for the Management Board members who were appointed
+to the Management Board before 2010: Dr. Teyssen and
+Dr. Reutersberg. Dr. Reutersberg entered retirement in 2016.
+Following the end of his service for the Company, Dr. Teyssen
+is entitled to receive lifelong monthly pension payments in three
+cases: reaching the age of 60, permanent incapacitation, and
+a so-called third pension situation. The criteria for this situation
+are met if the termination or non-extension of Dr. Teyssen's
+service agreement is not due to his misconduct or rejection of an
+offer of extension that is at least on a par with his existing service
+agreement. In the third pension situation, Dr. Teyssen would
+receive an early pension as a transitional arrangement until he
+reaches the age of 60.
+The Company makes virtual contributions to Management
+Board members' pension accounts. The maximum amount of
+the annual contributions is a equal to 18 percent of pensionable
+income (base salary and annual bonus). The annual contribution
+consists of a fixed base percentage (14 percent) and a matching
+contribution (4 percent). The requirement for the matching con-
+tribution to be granted is that the Management Board member
+contributes, at a minimum, the same amount by having it with-
+held from his compensation. The company-funded matching
+contribution is suspended if and as long as the E.ON Group's
+ROACE is less than its cost of capital for three years in a row. The
+contributions are capitalized using actuarial principles (based
+on a standard retirement age of 62) and placed in Management
+Board members' pension accounts. The interest rate used for
+each year is based on the return of long-term German treasury
+notes. At the age of 62 at the earliest, a Management Board
+member (or his survivors) may choose to have the pension
+account balance paid out as a lifelong pension, in installments, or
+in a lump sum. Individual Management Board members' actual
+resulting pension entitlement cannot be calculated precisely in
+advance. It depends on a number of uncertain parameters, in
+particular the changes in their individual salary, their total years
+of service, the attainment of company targets, and interest rates.
+For a Management Board member enrolled in the plan at the
+age of 50, the company-financed, contribution-based pension
+payment is currently estimated to be between 30 and 35 percent
+of his or her base salary (without factoring in pension benefits
+accrued prior to being appointed to the Management Board).
+Combined Group Management Report
+Pension account
+Capital contributions
+Contribution-Based Plan
+Members appointed to the Management Board since 2010 are
+enrolled in the "Contribution Plan E.ON Management Board,"
+which is a contribution-based pension plan.
+Pension Entitlements
+In line with the German Corporate Governance Code's recommen-
+dation, Management Board members' cash compensation has
+an overall cap. This means that the sum of the individual com-
+pensation components in one year may not exceed 200 percent
+of the total agreed target compensation, which consists of base
+salary, target bonus, and the target allocation value of long-term
+variable compensation.
+Overall Cap
+At the end of the vesting period, the virtual shares held by
+Management Board members are assigned a cash value based
+on E.ON's average stock price during the final 60 days of the
+vesting period. To each virtual share is then added the aggregate
+per-share dividend paid out during the vesting period. This
+total-cash value plus dividends-is then paid out. Payouts are
+capped at 200 percent of the arithmetical total target value.
+Extraordinary events are not factored into the determination
+of target attainment for company performance. Depending on
+the degree of target attainment for the company performance
+metric, each virtual share resulting from base matching may be
+matched by up to two additional virtual shares at the end of
+the vesting period. If the predetermined company performance
+target is fully attained, Management Board members receive
+one additional virtual share for each virtual share resulting from
+base matching. Linear interpolation is used to translate inter-
+mediate figures.
+59
+85
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+For the purpose of performance matching, the company per-
+formance metric for tranches granted from 2013 to 2015
+was initially E.ON's average ROACE during the four-year vesting
+period compared with a target ROACE set in advance by the
+Supervisory Board for the entire four-year period at the time it
+allocates a new tranche. In April 2016 the E.ON SE Supervisory
+Board decided to adjust the performance targets for performance
+matching of these tranches. Starting in 2016 the performance
+targets are now based on ROCE. In view of the Uniper spinoff, this
+adjustment was necessary because the ROACE targets were
+based on old planning figures that did not foresee the Uniper
+spinoff. Furthermore, from the start of 2016, the Company
+no longer uses ROACE as a key performance indicator and it is
+therefore no longer available. In addition, the anticipated reduc-
+tion in E.ON's stock price resulting from the Uniper spinoff had
+to be factored in by means of a conversion method. At the time
+of these adjustments and in accordance with Section 161 of
+the German Stock Corporation Act, in April 2016 the Supervisory
+Board adopted a resolution to revise the declaration of com-
+pliance issued on December 15, 2015. The Company's current
+declaration of compliance is published in the Corporate Gover-
+nance Report on page 75 of this report. The most recent decla-
+ration of compliance and earlier versions are published on the
+Internet at eon.com.
+• If necessary, adjusted by the
+Supervisory Board
+CEO Letter
+2/3:
+200%
+Target attainment
+• Adjusted EBITDA vs. budget
+Company Performance
+(0-200%)
+(target
+bonus)
+Bonus
+Bonus Mechanism
+The annual bonus mechanism consists of two components:
+a short-term incentive component ("STI component") and a
+long-term incentive component ("LTI component"). The STI
+component generally accounts for two-thirds of the annual
+bonus. The LTI component accounts for one-third of the annual
+bonus to a maximum of 50 percent of the target bonus. The
+LTI component is not paid out at the conclusion of the financial
+year but is instead transferred into virtual shares, which have a
+four-year vesting period, based on E.ON's stock price.
+Annual Bonus
+compensation is sustainable under the criteria of Section 87 of
+the German Stock Corporation Act.
+Since 2010 more than 60 percent of Management Board
+members' long-term variable compensation depends on the
+achievement of long-term targets, ensuring that the variable
+Performance-Based Compensation
+Management Board members receive a number of contractual
+fringe benefits, including the use of a chauffeur-driven company
+car. The Company also provides them with the necessary tele-
+communications equipment, covers costs that include those for
+a periodic medical examination, and pays the premium for an
+accident insurance policy.
+Management Board members receive their fixed compensation
+in twelve monthly payments.
+Non-Performance Based Compensation
+STI
+compo-
+nent
+In addition, there is a graphic on page 92 that provides a sum-
+mary overview of the individual components of the Management
+Board's compensation described below as well as their respec-
+tive metrics and parameters.
+83
+Summary of Financial Highlights and Explanations
+Х
+150%
+The amount of the bonus is determined by the degree to which
+certain performance targets are attained. The target-setting
+mechanism consists of company performance targets and indi-
+vidual performance targets:
+50%
+(maximum
+of 200%
+100%
+LTI
+1/3:
+Bonus
+•Individual targets
+• Team targets
+Evaluation of a Management Board
+member's performance based on:
+of target
+compo-
+nent
+Х
+EBITDA
++30% Adjusted
+budget
+-30%
+0%
+Individual Performance
+50-150%
+bonus)
+Based on shares outstanding at year-end.
+10 For the respective financial year; the 2017 figure represents management's dividend proposal.
+22
+4
+Report of the Supervisory Board
+6
+14
+8Based on shares outstanding (weighted average).
+CEO Letter
+22
+¹The Uniper Group was deconsolidated effective December 31, 2016; it is shown in 2016 income statement as discontinued operation.
+6For E.ON employees; for a definition of TRIF, see the Employees chapter.
+5Change in percentage points.
+4Change in absolute terms.
+³Ratio of economic net debt and adjusted EBITDA.
+²Adjusted for non-operating effects (see Glossary).
++50
+13.1
+650
+410
+22
+19.6
++59
+'Attributable to shareholders of E.ON SE.
+23
+38
+26
+51
+Asset Situation
++43
+E.ON SE's Earnings, Financial, and Asset Situation
+43
+42
+-
+40
+40
+37
+Financial Situation
+24
+33
+Macroeconomic and Industry Environment
+Business Report
+Innovation
+Management System
+Business Model
+Corporate Profile
+Combined Group Management Report
+18 Strategy and Objectives
+E.ON Stock
+28
+26
+Earnings Situation
+0.21
+6.4
+Market capitalization (€ in billions)
+-12
+1,370
+1,211
++0,75
+4.0
+4.7
+Employees (at year-end)
+Value added
+After-tax cost of capital (%)
++0,65
+5.8
+42,699
+Pretax cost of capital (%)
+10.4
+10.6
+-12
+63,699
++421
+1,287
+-1.44
+5.3
+Other Financial and Non-Financial Performance Indicators
+3.9
+6,708
+55,950
+ROCE (%)
++0,25
+0.30
+43,138
+- Percentage of female employees
+Dividend payout
+Dividend per share 10 (€)
+-0.54
+1.85
+-4.33
+1.84
+Equity per share7.9 (€)
+Earnings per share7.8 (€)
+-8
+2.5
+2.3
+-1
+- TRIF6 (E.ON employees)
+42
+- Average age
+-0.75
+5.3
+4.6
+- Average turnover rate (%)
+19.6
+19.6
+- Percentage of female executives and senior managers
+32
+32
+42
+ROCE and Value Added
+At our meetings, we discussed the possible sale of
+E.ON's remaining 46.65-percent Uniper stake to For-
+tum, a Finnish energy company, and later approved
+the conclusion of the transaction agreement with For-
+tum. We are convinced that this is the most financially
+attractive option for E.ON and at the same time offers
+good, credible strategic prospects for Uniper and its
+employees.
+- Employees
+Report of the Supervisory Board
+CEO Letter
+In addition, there was a regular exchange of information between the Chairman of
+the Supervisory Board and the Chairman of the Management Board during the
+entire financial year. In the case of particularly pertinent issues, the Chairman of
+the Supervisory Board was kept informed at all times. He likewise maintained
+contact with the members of the Supervisory Board outside of board meetings.
+The Supervisory Board was at all times informed about the current operating per-
+formance of the major Group companies, significant business transactions, the
+development of key financial figures, and decisions under consideration.
+The Management Board regularly provided us with timely and comprehensive
+information about significant business transactions in both written and oral form.
+At the meetings of the full Supervisory Board and its committees, we had suffi-
+cient opportunity to actively discuss the Management Board's reports, motions,
+and proposed resolutions. We voted on such matters when it was required by law,
+the Company's Articles of Association, or the Supervisory Board's policies and
+procedures. After thoroughly examining and discussing the resolutions proposed
+by the Management Board, we voted on them.
+We advised the Management Board intensively about the Company's manage-
+ment and continually monitored the Management Board's activities, assuring our-
+selves that the Company's management was legal, purposeful, and orderly. We
+were directly involved in all business transactions of key importance to the Com-
+pany and discussed these transactions thoroughly based on the Management
+Board's reports. At the Supervisory Board's four regular and two extraordinary
+meetings in the 2017 financial year, we addressed in depth all issues relevant to
+the Company. In particular, we discussed the release from reliability for nucle-
+ar-waste disposal in Germany and its funding, the sale of the Company's remain-
+ing Uniper stake, the refinement of its corporate strategy, and the implementation
+of the Phoenix reorganization program. Three Supervisory Board members were
+unable to attend Supervisory Board meetings in 2017. Apart from that, all mem-
+bers attended all meetings. A table showing attendance by member is on page 78
+of this report.
+In the 2017 financial year the Supervisory Board carefully performed all its duties
+and obligations under law, the Company's Articles of Association, and its own
+policies and procedures. It thoroughly examined the Company's situation and
+devoted particular attention to its continually changing energy-policy and eco-
+nomic environment.
+2017 was a successful year for E.ON. We reduced our debt faster than anticipated
+and strengthened equity. At the same time, our operating business performed
+well. This enables E.ON to enter the future as a revitalized company, to invest more,
+and to achieve sustainable growth. Investors rewarded these achievements. E.ON's
+stock price (including reinvested dividends) rose by 39 percent in 2017. All of this
+took a lot of hard work. The Supervisory Board would therefore like to thank the
+Management Board and all employees for their enormous efforts in 2017.
+Chairman of the Supervisory Board
+Dr. Karl-Ludwig Kley,
+Dear Shareholders,
+6
+E.ON Stock
+Report of the Supervisory Board
+Dr. Johannes Teyssen
+При
+Best wishes,
+We've established a solid starting position from
+which to make even better use of the opportunities
+created by the green, distributed, and digital energy
+world. During the transaction phase, we intend to
+further strengthen our core business and then take
+a big step forward in growth by acquiring innogy
+in mid 2019. Our aim will continue to be to opti-
+mally tap the substantial opportunities of the new
+energy world for our customers and for you, our
+shareholders.
+Our very good operating results, our solid balance
+sheet, and the positive developments in our core
+businesses weren't self-evident. They're the result
+of our employees' hard work in a continued chal-
+lenging environment. The opportunities of the new
+energy world will benefit not only our customers
+and employees but also especially you, our share-
+holders. We expect our 2018 results to be stable
+and solid. We forecast that our adjusted EBIT will
+be between €2.8 and €3 billion and our adjusted
+net income between €1.3 and €1.5 billion. We will
+propose to the Annual Shareholders Meeting that
+E.ON pay out a fixed dividend for the 2017 and 2018
+financial years: 30 cents for 2017 and 43 cents
+for 2018, a year-on-year increase of 40 percent.
+This is my clear signal to you, our shareholders, that
+we will be reliable, including during the implemen-
+tation of the transaction.
+E.ON's digital renewal is taking great strides forward. We're redesigning
+customer processes and systematically introducing digital products and
+services. We're using digital technology to continue to upgrade our
+regional distribution networks to smart grids. In the future, our expertise
+in this areas will be in even greater demand. This is because only smart
+distribution grids can effectively integrate electricity, heat, and mobility.
+What's more, tomorrow's charging infrastructure for e-mobility will be
+connected to the distribution grid. The new E.ON will focus entirely on
+this increasingly converging market, thereby making an important con-
+tribution to the success of the energy transition in Germany and Europe.
+The development of our new e-mobility business has also been dynamic.
+This fast-growing market is lucrative for E.ON as well. It enables us to
+leverage our core competencies: using a reliable and intelligent network
+infrastructure as the backbone for innovative and digital products combined
+with first-class service. The future E.ON will be even better positioned to
+grow this business on a European scale.
+Our solar and battery business in Germany grew by more than 200 percent
+year on year, making us the country's fastest-growing solar company.
+In 2017 we launched E.ON SolarCloud, which enables our customers to
+store their own solar output virtually and use it when they need it, with-
+out the need for a battery storage system. In the future, our customers will
+be able to sell their output directly to other people, like their neighbors or
+friends. Or give solar energy as a gift.
+E.ON is now working closer to our customers, their needs, and their desires.
+They're at the center of everything we do. The first signs of success are
+already apparent: after some declines in the first two quarters of the year,
+especially in the United Kingdom and Germany, since mid-2017 our
+customer numbers have been rising again across all regions. Our reposi-
+tioned brand and a range of innovative products and solutions for all
+customer segments contributed to this success.
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+5
+Strategy and Objectives
+Strategy and Objectives
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Total assets
+In the 2017 financial year the Executive Committee
+met ten times. One member was unable to attend one
+meeting. Otherwise, all members took part in all of the
+committee's meetings and processes. In particular,
+this committee prepared the meetings of the full
+Supervisory Board. Furthermore, it discussed signifi-
+cant personnel matters (especially those relating to
+Management Board compensation), the Supervisory
+Board's competency profile, and the diversity concepts
+for the Management Board and Supervisory Board and
+did comprehensive preparatory work for the Supervi-
+sory Board's resolutions on these matters. In addition,
+it prepared the Supervisory Board's resolutions to
+determine that the Management Board met its targets
+for 2016 and to set the targets for 2017 and was
+To fulfill its duties carefully and efficiently, the Super-
+visory Board has created the committees described in
+detail below. Information about the committees' com-
+position and responsibilities is in the Corporate Gover-
+nance Report on pages 80 and 81. Within the scope
+permissible by law, the Supervisory Board has trans-
+ferred to the committees the authority to pass resolu-
+tions on certain matters. Committee chairpersons
+reported the agenda and results of their respective
+committee's meetings to the full Supervisory Board on
+a regular basis, typically at the Supervisory Board
+meeting subsequent to their committee meeting.
+Committee Work
+An overview of Supervisory Board members' atten-
+dance at meetings of the Supervisory Board and its
+committees is on page 78.
+In 2017 we conducted a regularly scheduled two-
+stage efficiency review of the Supervisory Board's
+work. The review consists of a standardized question-
+naire and one-on-one discussions between the Chair-
+man of the Supervisory Board and members of the
+Supervisory Board. The measures derived from the
+review are designed to further improve the Supervi-
+sory Board's work in the future.
+The targets for the Supervisory Board's composition, including a com-
+petency profile and a diversity concept, with regard to Item 5.4.1 of the
+German Corporate Governance Code and Section 289f, Paragraph 2,
+Item 6 of the German Commercial Code and the status of their achieve-
+ment are described in the Corporate Governance Report on pages 78 to 80.
+Furthermore, two education and training sessions on selected issues
+were conducted for Supervisory Board members in 2017.
+The Supervisory Board is aware of no indications of conflicts of interest
+involving members of the Management Board or the Supervisory Board.
+www.eon.com.
+The current version of the declaration of compliance is in the Corporate
+Governance Report on page 75; the current as well as earlier versions
+are continuously available to the public on the Company's website at
+Combined Group Management Report
+In the annual declaration of compliance issued at the end of the year, we
+and the Management Board declared that E.ON is in full compliance
+with the recommendations of the "Government Commission German
+Corporate Governance Code" dated February 7, 2017, published by the
+Federal Ministry of Justice and for Consumer Protection in the official
+section of the Federal Gazette (Bundesanzeiger). Furthermore, we
+declared that E.ON was in full compliance with the recommendations of
+the "Government Commission German Corporate Governance Code"
+dated May 5, 2015, published by the Federal Ministry of Justice and for
+Consumer Protection in the official section of the Federal Gazette
+(Bundesanzeiger), since the last annual declaration on December 16,
+2016, with no exceptions.
+Corporate Governance
+We thoroughly discussed the activity reports submitted by the Supervi-
+sory Board's committees.
+Finally, the Management Board provided information about the scope of
+E.ON's use of derivative financial instruments and how the regulation of
+these instruments affects E.ON's business. We also discussed E.ON's rat-
+ing situation with the Management Board on a regular basis.
+8
+Report of the Supervisory Board
+We also thoroughly discussed current developments in E.ON's core
+businesses. We discussed and passed resolutions regarding wind farm
+projects in Germany and the United States. The Supervisory Board was
+informed on an ongoing basis about E.ON's core businesses, such as cur-
+rent price developments in individual countries, new customer solutions,
+digitization, the business in Turkey, and the Phoenix reorganization pro-
+gram. The Management Board also reported on the progress of E.ON's
+legal proceedings relating to the nuclear phaseout in Germany and the
+proposals of the Commission for Organizing and Financing the Nuclear
+Energy Phaseout. In early June the German Federal Constitutional Court
+ruled that the nuclear-fuel tax was unconstitutional. The overpaid taxes
+have already been refunded to the companies. In addition, the Act Reor-
+ganizing Responsibility for Nuclear Waste Management took effect on
+June 16, 2017. On July 3, 2017, E.ON paid in full its resulting contribu-
+tion to Germany's public fund for financing nuclear-waste disposal.
+Pursuant to confirmations from the fund, E.ON and its subsidiaries are
+thus relieved of their liability for nuclear-waste disposal, which was
+transferred to the Federal Republic of Germany.
+Furthermore, in the context of the Group's current operating business, we
+discussed in detail national and international energy markets, the curren-
+cies that are important to E.ON, the impact of low interest rates on E.ON
+as well as the general business situation of the Group and its companies.
+We discussed E.ON SE's and the E.ON Group's current asset, financial,
+and earnings situation, future dividend policy, possible capital measures,
+workforce developments, and earnings opportunities and risks. In addi-
+tion, we and the Management Board thoroughly discussed the E.ON
+Group's medium-term plan for 2018-2020. The Supervisory Board was
+provided information on a regular basis about the Company's health,
+(occupational) safety, and environmental performance (in particular the
+development of key accident indicators) as well as key figures for the
+number of customers, customer satisfaction, the number of apprentices,
+and measures to foster diversity.
+The policy developments in countries in which E.ON is active constituted
+another key topic of our discussions. Alongside the overall- and economic-
+policy situation in the individual countries, we focused primarily on the
+developments in European and German energy policy and their respective
+consequences for E.ON's various business areas.
+Key Topics of the Supervisory Board's Discussions
+Sale of the Remaining Uniper Stake and
+the Refinement of Corporate Strategy
+7
+In the 2017 financial year we again had intensive discussions about the
+implementation of the recommendations of the German Corporate Gov-
+ernance Code (known by its German abbreviation, "DCGK").
+- Corporate Sustainability
+E.ON Stock
+CEO Letter
+222
+209
+208
+118 Notes
+116 Statement of Changes in Equity
+114 Consolidated Statements of Cash Flows
+112 Consolidated Balance Sheets
+111 Consolidated Statements of Recognized Income and Expenses
+110 Consolidated Statements of Income
+102 Independent Auditor's Report
+100 Consolidated Financial Statements
+224
+Compensation Report
+84
+75
+75 Corporate Governance Report
+Disclosures Regarding Takeovers
+72
+70 Internal Control System for the Accounting Process
+Business Segments
+62
+Risk and Chances Report
+54
+Forecast Report
+Corporate Governance Declaration
+Report of the Supervisory Board
+Declaration of the Management
+Members of the Supervisory Board
+We fully achieved our financial and balance-sheet targets for 2017. Our stable
+sales of €38 billion, our adjusted EBIT of €3.1 billion, and our significantly higher
+adjusted net income of €1.4 billion were all at the upper end of our forecast range.
+We substantially strengthened our balance sheet. Steadily, but much faster than
+planned, we reduced our economic net debt to just €19.5 billion, down by just over
+a quarter from roughly €26.3 billion at year-end 2016. In addition, in early July
+we made our payment, on time, into Germany's public fund for financing nuclear-
+waste disposal. We therefore not only significantly reduced our debt. Since last
+year we're also free of all future financial risks in conjunction with the intermediate
+and final storage of nuclear waste. Phoenix, our reorganization program, is nearing
+completion. It's making our setup much closer to customers, reducing unnecessary
+bureaucracy, and enabling to us to achieve annual earnings improvements of
+€400 million from 2018 onward.
+In the future, the new E.ON will be the only European company to focus on smart
+grids and innovative customer solutions. One of the most creative transactions in
+the history of German industry will put E.ON in an even better position to tap the
+growth potential of the new energy world. And make E.ON even more attractive
+to you, our shareholders.
+From this position of strength we're now embarking on E.ON's largest growth
+initiative in more than ten years: we reached an agreement with RWE under
+which we'll acquire innogy as part of an extensive asset swap. We'll obtain RWE's
+76.8-percent stake in innogy und make a voluntary public offer to innogy's other
+shareholders. In return, RWE will receive substantially all of E.ON and innogy's
+renewables business as well as a 16.67-percent stake in E.ON by means of a capital
+increase against contribution in kind from existing authorized capital.
+2017 was a successful financial year. Our earnings were at the upper end of our
+forecast range, , and we reduced our debt significantly and more than expected and
+strengthened our balance sheet. This enabled us to put the burdens of the past
+behind us faster than anticipated.
+Chairman of the Management Board
+Dr. Johannes Teyssen,
+Dear Shareholders,
+4
+CEO Letter
+Report of the
+Supervisory Board
+CEO Letter
+List of Shareholdings
+Contents
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+237 Financial Calendar
+230 Glossary of Financial Terms
+229 Summary of Financial Highlights
+228 Explanatory Report of the Management Board
+228 Summary of Financial Highlights and Explanations
+Members of the Management Board
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Equity
+In 2017 much of the Supervisory Board's work was
+again devoted to the refinement of E.ON's corporate
+strategy. At our September meeting, we discussed
+scenarios of the future energy world and business
+strategies focusing on markets and technologies, in
+particular on the growth opportunities arising from the
+ongoing electrification of all sectors of the economy.
+E.ON will continue to be active in its three core busi-
+nesses-Energy Networks, Customer Solutions, and
+Renewables-but will give these businesses a sharper
+focus. E.ON's competitiveness and differentiation will
+be based on its relevance in the respective business
+and its ability to achieve a leading position through
+improved capabilities, products, and resource alloca-
+tion. The strategy includes a clear performance com-
+mitment to customers, puts customers at the center
+of everything we do, gives employees the opportunity
+to actively shape the new energy world, and offers
+investors growth prospects and attractive dividends.
+-27
+3,112
+3,074
+Adjusted EBIT²
+-11
+1,556
+1,385
+- Merchant business
+-2
+842
+828
+- Quasi-regulated and long-term contracted business
++8
+2,541
+2,742
+-1
+4,939
+Adjusted EBITDA²
+-1
+38,173
+37,965
+Sales
++/-%
+2016
+2017
+€ in millions
+E.ON Group Financial Highlights¹
+e.on
+2017
+Annual Report
+Debt factor³
+4,955
+-Regulated business
+-Regulated business
+1,482
++58
+Investments
+3,308
+3,169
++4
+-2,952
+904
+2,961
+-2,235
+3,974
+Economic net debt (at year-end)
+19,248
+1,677
+26,320
+Cash provided by operating activities of continuing operations before interest and taxes
+1,427
+Cash provided by operating activities of continuing operations
+Adjusted net income²
++13
+- Merchant business
+Net income/loss
+Net income/loss attributable to shareholders of E.ON SE
+486
+488
+911
+- Quasi-regulated and long-term contracted business
+-20
+4,180
+-16,007
+3,925
+1,142
+-8,450
+181,065
+175,000
+17,100
+175,000
+17,100
+2017
+(max.)1,2
+175,000
+17,100
+Compensation allocated
+2016
+2017
+700,000
+181,065
+175,000
+17,100
+192,100
+192,100
+192,100
+881,065
+192,100
+780,000
+600,000
+881,065
+700,000
+1,778,471 2,496,611
+380,589
+371,568
+2,159,060 2,868,179
+2017
+300,000
+4,493,783
+371,568
+4,865,351
+Multi-year variable compensation
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Matching Plan, fifth tranche (2017-2021)
+- Performance Plan, first tranche (2017-2020)
+Total
+Service cost
+Total
+1.2See footnotes on page 94.
+Michael Sen (member of the Management Board until March 31, 2017)
+Compensation granted
+2016
+2017
+(min.)
+300,000
+735,695
+192,100
+700,000
+35,695
+700,000
+35,695
+2017
+(max.)1,2
+700,000
+Compensation allocated
+2016
+2017
+700,000
+2017
+(min.)
+35,695
+Total
+735,695
+827,117
+371,568
+1,198,685
+735,695
+735,695
+One-year variable compensation
+35,695
+Fringe benefits
+Fixed compensation
+€
+192,100
+192,100
+192,100
+192,100
+192,100
+1,661,065
+270,989
+1,932,054
+192,100
+Corporate Governance Report
+Table of Compensation Granted and Allocated
+96
+96
+Dr. Marc Spieker (member of the Management Board since January 1, 2017)
+Compensation granted
+2016
+2017
+1,781,065
+270,989
+2,052,054
+2,016,666
+2017
+2,622,114
+380,589
+3,002,703
+Service cost
+Total
+1.2See footnotes on page 94.
+Table of Compensation Granted and Allocated
+in €
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Total
+Summary of Financial Highlights and Explanations
+- Performance Plan, first tranche (2017-2020)
+- Share Matching Plan, fourth tranche (2016-2020)
+5,212,416
+779,460
+864,771
+4,458,147
+6,077,187
+¹The maximum amount disclosed under benefits granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
+2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 89, applies as well.
+Table of Compensation Granted and Allocated
+€
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, fifth tranche (2017-2021)
+1,008,333
+2,660,450
+371,568
+3,032,018
+95
+Dr.-Ing. Leonhard Birnbaum (member of the Management Board)
+827,117
+827,117
+827,117
+825,138
+27,117
+827,117
+733,333
+825,000
+1,650,000
+953,333
+1,336,500
+1,063,643 1,008,333
+2,016,666
+332,994
+332,994
+696,976
+366,667
+825,138
+95
+25,138
+27,117
+Compensation granted
+2016
+2017
+675,000
+(min.)
+2017
+(max.)1,2
+Compensation allocated
+2016
+2017
+800,000
+25,138
+800,000
+800,000
+800,000
+800,000
+800,000
+27,117
+27,117
+1,350,000
+One-year variable compensation
+Multi-year variable compensation
+- Company performance: actual EPS vs. budget
+- Individual performance factor: collective performance and individual performance
+Annual bonus corresponds to 45 percent of performance-based compensation
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the annual bonus as
+long as the total bonus remains under the cap.
+•
+Granting of virtual shares of E.ON stock with a four-year vesting period:
+Amount of bonus depends on
+- Target value for Management Board Chairman: €1,260,000 (excluding LTI components from annual bonuses)
+•
+Cap: 200 percent of the target value
+•
+•
+•
+•
+- Target value for Management Board members: €600,000-€733,333 (excluding LTI components from annual
+bonuses)
+•
+•
+Cap: 200 percent of target bonus
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+•
+Management Board Chairman: €1,240,000
+•
+Management Board members: €700,000-€800,000
+Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination
+•
+Target bonus at 100 percent target attainment:
+- Target bonus for Management Board Chairman: €1,417,500
+- Target bonus for Management Board members: €675,000-€825,000
+97
+•
+•
+Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1) + performance
+matching (1:0 to 1:2) depending on ROACE during vesting period
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+Granting of virtual shares of E.ON stock with a four-year vesting period:
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+Other compensation provisions
+Share-ownership guidelines
+Settlement cap
+Settlement for change-of-control
+Non-compete clause
+¹Only applies to Dr. Johannes Teyssen.
+Obligation to buy and hold E.ON stock until the end of service on the Management Board
+Investment in E.ON stock equaling a percentage of base compensation:
+- 200 percent (Management Board Chairperson)
+-150 percent (other Management Board members)
+Until the required investment is reached, obligation to invest net payouts from long-term compensation in E.ON stock
+Maximum of two years' total compensation or the total compensation for the remainder of the service agreement
+Settlement equal to two target salaries (base salary, target bonus, and fringe benefits), reduced by up to 20 percent.
+For six months after termination of service agreement, prorated compensation equal to fixed compensation and
+target bonus, at a minimum 60 percent of most recently received compensation
+Corporate Governance Report
+98
+Payments Made to Former Members of the Management Board
+Total payments made to former Management Board members
+and to their beneficiaries amounted to €12.4 million in 2017
+(prior year: €11.6 million). Provisions of €159.0 million (prior
+year: €172.8 million)-pursuant to IFRS-have been provided
+for pension obligations to former Management Board members
+and their beneficiaries.
+Compensation Plan for the Supervisory Board
+The compensation of Supervisory Board members is deter-
+mined by the Annual Shareholders Meeting and governed by
+Section 15 of the Company's Articles of Association. The pur-
+pose of the compensation plan is to enhance the Supervisory
+Board's independence for its oversight role. Furthermore, there
+are a number of duties that Supervisory Board members must
+perform irrespective of the Company's financial performance.
+Supervisory Board members-in addition to being reimbursed
+for their expenses-therefore receive fixed compensation and
+compensation for committee duties.
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The
+other members of the Supervisory Board receive compensation
+of €140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit and
+Risk Committee, an additional €110,000. Other committee
+chairmen receive an additional €140,000; committee mem-
+bers, an additional €70,000. Members serving on more than
+one committee receive the highest applicable committee com-
+pensation only. In contradistinction to the compensation just
+described, the Chairman and the Deputy Chairmen of the
+Supervisory Board receive no additional compensation for their
+committee duties. In addition, Supervisory Board members are
+paid an attendance fee of €1,000 per day for meetings of the
+Supervisory Board or its committees. Individuals who were
+members of the Supervisory Board or any of its committees for
+less than an entire financial year receive pro rata compensation.
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+Report of the Supervisory Board
+•
+•
+- Target value for Management Board Chairman: €1,732,500
+- Target value for Management Board members: €825,000-€1,008,333
+Final number of virtual shares depends on E.ON stock's TSR relative to the TSR of companies in the STOXX®
+Europe 600 Utilities index; 1/4 of TSR performance is locked in annually
+Allocation limit; that is, the maximum number of virtual shares: 150 percent
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+•
+Cap: 200 percent of the target value
+Annual target allocation corresponds to 55 percent of performance-based compensation
+Pension benefits
+Final-salary-based benefits¹
+•
+•
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from age of 60
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement
+Contribution-based benefits
+Virtual contributions equaling a maximum of 21 percent of fixed compensation and target bonus
+CEO Letter
+(granted from 2017)
+E.ON Performance Plan
+2016
+2017
+2017
+€
+Fixed compensation
+Fringe benefits
+525,000
+1,442,153
+Total
+1,967,153
+700,000
+67,346
+767,346
+(min.)
+700,000
+67,346
+767,346
+3,678,687
+450,000
+675,000
+Multi-year variable compensation
+Dr. Karsten Wildberger (member of the Management Board)
+Compensation granted
+675,000
+1,829,195
+33,936
+1,863,131
+3,735,695
+825,000
+1,650,000
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Share Matching Plan, fifth tranche (2017-2021)
+- Performance Plan, first tranche (2017-2020)
+Total
+Service cost
+Total
+1,2See footnotes on page 94.
+Table of Compensation Granted and Allocated
+825,000
+2,235,695
+33,936
+2,269,631
+1,650,000
+735,695
+33,936
+769,631
+33,936
+3,769,631
+1,093,500
+825,000
+Compensation allocated
+2016
+2017
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into any
+contingencies of behalf of the members of the Management
+Board in the 2017 financial year. Page 224 contains additional
+information about the members of the Management Board.
+The following table provides a summary overview of the
+above-described components of the Management Board's
+compensation as well as their metrics and parameters:
+Summary Overview of Compensation Components
+Compensation component
+Fixed compensation
+Metric/Parameter
+Base salary
+Fringe benefits
+Performance-based compensation
+Annual bonus
+Possibility of special
+compensation
+Long-term variable compensation:
+Share Matching Plan (granted until
+2016)
+Long-term variable compensation:
+1.2See footnotes on page 94.
+2017
+(max.)1,2
+700,000
+67,346
+767,346
+1,350,000
+1,650,000
+1,860,846
+350,492
+2,211,338
+1,650,000
+3,767,346
+350,492
+4,117,838
+525,000
+1,442,153
+1,967,153
+585,000
+700,000
+67,346
+767,346
+1,093,500
+- Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, first tranche (2013-2017)
+- Share Matching Plan, fourth tranche (2016-2020)
+450,000
+- Share Matching Plan, fifth tranche (2017-2021)
+225,000
+- Performance Plan, first tranche (2017-2020)
+Total
+3,092,153
+Service cost
+Total
+292,555
+3,384,708
+825,000
+2,267,346
+350,492
+2,617,838
+767,346
+350,492
+1,117,838
+2,552,153
+292,555
+2,844,708
+7,580,845
+864,771
+8,445,616
+192,100
+3,465,000
+Stock-based Compensation
+The long-term variable compensation of Management Board
+members resulted in the following expenses in 2017:
+The Supervisory Board issued the first tranche of the E.ON Per-
+formance Plan (2017-2020) for the 2017 financial year and
+granted Management Board members virtual shares of E.ON
+stock. The present value assigned to the virtual shares of E.ON
+stock at the time of granting-€5.84 per share-is shown in the
+following tables entitled "Stock-based Compensation" and
+"Total Compensation." The value performance of this tranche
+will be determined by the performance of E.ON stock, per-share
+dividends, and E.ON stock's TSR relative to the TSR of the com-
+panies in its peer index, the STOXX® 600, for the years 2017
+through 2020. The actual payments made to Management
+Board members in 2021 may deviate, under certain circum-
+stances considerably, from the calculated figures disclosed
+here.
+The annual bonuses of Management Board members for 2017
+totaled €5.8 million (2016: €4.3 million). In determining the
+performance factor, the Supervisory Board discussed and
+assessed the Management Board's overall performance.
+Performance-Based Compensation in 2017
+The Supervisory Board reviewed the Management Board's
+compensation plan and the components of individual members'
+compensation. It determined that the Management Board's
+compensation is appropriate from both a horizontal and vertical
+perspective and passed a resolution on the performance-based
+compensation described below. It made its determination of
+customariness from a horizontal perspective by comparing the
+compensation with that of companies of a similar size. Its
+review of appropriateness included a vertical comparison of the
+Management Board's compensation with that of the Company's
+top management and the rest of its workforce. In the Supervi-
+sory Board's view, in the 2017 financial year there was no rea-
+son to adjust the Management Board's compensation.
+€
+Management Board Compensation in 2017
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+91
+Dr. Johannes Teyssen
+2017
+Value of virtual shares
+at time of granting
+20161
+1,063,643
+1,008,333
+Dr.-Ing. Leonhard Birnbaum
+1,008,670
+3,423,608
+138,762
+296,661
+1,827,516
+1,732,500
+2016
+2017
+expense (+)/income (-)2
+Cumulative
+Number of virtual
+shares granted
+2016
+2017
+CEO Letter
+The service agreements of Management Board members
+include a non-compete clause. For a period of six months after
+the termination of their service agreement, Management Board
+members are contractually prohibited from working directly or
+indirectly for a company that competes directly or indirectly
+with the Company or its affiliates. Management Board mem-
+bers receive a compensation payment for the period of the
+non-compete restriction. The prorated payment is based on
+100 percent of their contractually stipulated annual target
+compensation (without long-term variable compensation) but
+is, at a minimum, 60 percent of their most recently received
+compensation.
+In the event of a premature loss of a Management Board posi-
+tion due to a change of control, Management Board members
+are entitled to settlement payments. The change-of-control
+agreements stipulate that a change in control exists in three
+cases: a third party acquires at least 30 percent of the Compa-
+ny's voting rights, thus triggering the automatic requirement to
+make an offer for the Company pursuant to Germany's Stock
+Corporation Takeover Law; the Company, as a dependent entity,
+concludes a corporate agreement; the Company is merged with
+a non-affiliated company. Management Board members are
+entitled to a settlement payment if, within 12 months of the
+change of control, their service agreement is terminated by
+mutual consent, expires, or is terminated by them (in the latter
+case, however, only if their position on the Management Board
+is materially affected by the change in control). Management
+Board members' settlement payment consists of their base sal-
+ary and target bonus plus fringe benefits for two years. To
+reflect discounting and setting off of payment for services ren-
+dered to other companies or organizations, payments will be
+reduced by 20 percent. In accordance with the German Corpo-
+rate Governance Code, the settlement payments for Manage-
+ment Board members would be equal to 100 percent of the
+above-described settlement cap.
+In line with the German Corporate Governance Code's recom-
+mendation, the service agreements of Management Board
+members include a settlement cap. Under the cap, settlement
+payments in conjunction with a termination of Management
+Board duties may not exceed the value of two years' total com-
+pensation or the total compensation for the remainder of the
+member's service agreement.
+Capital contributions
+Contribution-Based Plan
+Members appointed to the Management Board since 2010 are
+enrolled in the "Contribution Plan E.ON Management Board,"
+which is a contribution-based pension plan.
+Pension Entitlements
+Other Management
+Board members:
+150% of base
+compensation
+compensation
+Base
+Chairperson:
+200% of base
+compensation
+Until the required investment is reached, Management Board
+members are obligated to invest amounts equivalent to the net
+payouts from their long-term compensation in actual E.ON
+stock.
+To further strengthen E.ON's capital-market focus and share-
+holder-oriented culture, E.ON introduced share-ownership
+guidelines effective 2017. The guidelines obligate Management
+Board members to invest in E.ON stock equaling 200 percent of
+base compensation (for the Management Board Chairperson)
+and 150 percent of base compensation (for the other Manage-
+ment Board members), to demonstrate that they have done so,
+and to hold the stock until the end of their service on the Man-
+agement Board.
+Share-Ownership Guidelines
+In line with the German Corporate Governance Code's recommen-
+dation, Management Board members' annual compensation
+has an overall cap. This means that the sum of the individual com-
+pensation components in one year may not exceed 200 percent
+of the total agreed target compensation, which consists of base
+salary, target bonus, and the target allocation value of long-
+term variable compensation. The cap increases in accordance
+with the amounts of fringe benefits and pension benefits from
+the respective financial year.
+Overall Cap
+The last complete tranche of the E.ON Share Matching Plan
+(LTI components of prior-year bonus as well as base and perfor-
+mance matching) was granted in the 2016 financial year and
+runs through 2020 (Share Matching Plan, fourth tranche
+(2016-2020)). Because the old compensation plan was in effect
+until year-end 2016, in 2017 Management Board members
+were granted virtual shares based on the LTI components of
+their bonuses for the 2016 financial year under the terms of the
+E.ON Share Matching Plan. This tranche runs through 2021
+(Share Matching Plan, fifth tranche (2017-2021)).
+89
+Pension account
+172,660
+1
+3
+Settlement Payments for Termination of Management Board
+Duties
+In line with the German Corporate Governance Code's recom-
+mendation, the Supervisory Board reviews, on a regular basis,
+the benefits level of Management Board members and the
+resulting annual and long-term expense and, if necessary,
+adjusts the payments.
+Pursuant to the provisions of the German Occupational Pensions
+Improvement Act, Management Board members' pension enti-
+tlements are not vested until they have been in effect for five
+years. This applies to both contribution-based and final-salary-
+based pension plans.
+Dr. Johannes Teyssen's pension entitlements provide for annual
+pension payments equal to 75 percent of his annual base sal-
+ary. The full amount of any pension entitlements from earlier
+employment is offset against these payments. In addition, the
+pension plan includes benefits for widows and widowers and
+for surviving children that are equal to 60 percent and 15 per-
+cent, respectively, of the deceased Management Board mem-
+ber's pension entitlement. Together, pension payments to a
+widow or widower and children may not exceed 100 percent of
+the deceased Management Board member's pension.
+The Company has agreed to a pension plan based on final salary
+for the Management Board member, Dr. Johannes Teyssen,
+who was appointed to the Management Board before 2010.
+Following the end of his service for the Company, Dr. Johannes
+Teyssen is entitled to receive lifelong monthly pension pay-
+ments in three cases: reaching the age of 60, permanent inca-
+pacitation, and a so-called third pension situation. The criteria
+for this situation are met if the termination or non-extension of
+Dr. Johannes Teyssen's service agreement is not due to his mis-
+conduct or rejection of an offer of extension that is at least on a
+par with his existing service agreement. In the third pension sit-
+uation, Dr. Johannes Teyssen would receive an early pension as
+a transitional arrangement until he reaches the age of 60.
+company-financed, contribution-based pension payment is
+currently estimated to be between 30 and 35 percent of his or
+her base salary (without factoring in pension benefits accrued
+prior to being appointed to the Management Board).
+Individual Management Board members' actual resulting pen-
+sion entitlement cannot be calculated precisely in advance. It
+depends on a number of uncertain parameters, in particular the
+changes in their individual salary, their total years of service, the
+attainment of company targets, and interest rates. For a Man-
+agement Board member enrolled in the plan at the age of 50,
+the
+90
+90
+Corporate Governance Report
+The requirement for the matching contribution to be granted is
+that the Management Board member contributes, at a mini-
+mum, the same amount by having it withheld from his compen-
+sation. The company-funded matching contribution is sus-
+pended if and as long as the E.ON Group's ROACE is less than
+its cost of capital for three years in a row. The contributions are
+capitalized using actuarial principles (based on a standard
+retirement age of 62) and placed in Management Board mem-
+bers' pension accounts. The interest rate used for each year is
+based on the return of long-term German treasury notes. At the
+age of 62 at the earliest, a Management Board member (or his
+survivors) may choose to have the pension account balance
+paid out as a lifelong pension, in installments, or in a lump sum.
+The Company makes virtual contributions to Management
+Board members' pension accounts in an amount equal to a per-
+centage of their pensionable income (base salary and annual
+bonus). In April 2016 the Supervisory Board passed a resolution
+to increase the percentages of the virtual contributions under
+the contribution-based plan starting in 2017 in order to offset
+the reduction in the sum of base compensation and annual
+bonus under the new compensation plan that took effect in
+2017 and to leave the amount of contributions essentially
+unchanged in absolute terms. Effective the 2017 financial year,
+the contribution percentage is at most 21 percent (formerly
+18 percent). The annual contribution consists of a fixed base
+percentage (16 percent; formerly 14 percent) and a matching
+contribution (5 percent; formerly 4 percent).
+Term in years
+5
+4
+2
+80,762
+580,199
+Michael Sen (until March 31, 2017)
+Dr.-Ing. Leonhard Birnbaum¹
+2017
+2016
+2017
+(€)
+(€)
+(€)
+(€)
+2016
+930,000
+930,000
+75
+75
+Dr. Johannes Teyssen
+2017
+2016
+2017
+1,369,019 1,338,260
+398,343 407,044
+Thereof interest cost
+504,248
+26,775
+2017
+1,280,845
+864,771
+2,145,616
+6,144
+292,555
+16,367
+50,303
+356,636
+Dr. Karsten Wildberger¹
+(since January 1, 2017) 1, 2
+Dr. Marc Spieker
+523,074
+4,909
+275,898
+(until March 31, 2017)¹, 3
+Michael Sen
+24,767,846 24,011,814
+1,329,403 1,275,012
+2016
+2016
+558,800
+26,455
+Summary of Financial Highlights and Explanations
+of annual base
+compensation
+Cash value at December 31
+Total
+265,966
+641,804
+52,144
+141,268
+675,000
+825,000
+Dr. Karsten Wildberger
+276,179
+141,268
+825,000
+Dr. Marc Spieker (since January 1, 2017)
+181,636
+323,469
+300,000³
+4,390,833
+As a percentage
+3,866,159
+271,668
+Additions to provisions for pensions
+Current pension entitlement at December 31
+Pensions of Management Board Members Pursuant to IFRS
+is calculated pursuant to IFRS and the German Commercial Code.
+An actuarial interest rate of 2.1 percent (prior year: 2.1 percent)
+was used for discounting; the actuarial interest rate pursuant
+to the German Commercial Code was 3.68 percent (prior year:
+4.01 percent).
+The following table provides an overview of the current pension
+obligations to Management Board members, the additions to pro-
+visions for pensions, and the cash value of pension obligations
+for the 2017 financial year. The cash value of pension obligations
+Management Board Pensions in 2017
+92
+92
+Corporate Governance Report
+year totaled €4.4 million. Note 11 to the Consolidated
+Financial Statements contains additional details about stock-
+based compensation.
+cial
+Long-term variable compensation granted for the 2017 finan-
+¹Consists of the LTI component (based on the target bonus) for the respective financial year for which at the time of granting no amount of shares can be determined.
+2Expense/income pursuant to IFRS 2 for performance rights and virtual shares existing in the 2017 financial year.
+3Target value for the virtual stock that was part of the LTI component of Mr. Sen's 2016 bonus. No other stock was granted under base or performance matching due to his resignation in 2017.
+2,036,471
+6,525,959
+751,857
+Consolidated Financial Statements
+1,860,899
+Strategy and Objectives
+67,346 1,442,153 825,000 675,000 2,685,846 3,227,153
+188,103 1,690,765 4,390,833 3,866,159 14,013,786 12,778,257
+¹The present value assigned to the virtual shares of E.ON stock at the time of granting for the fourth tranche of the E.ON Share Matching Plan was €5.84 per share.
+Corporate Governance Report
+The following table shows the compensation granted and allo-
+cated in 2017 in the format recommended by the German Cor-
+porate Governance Code:
+Table of Compensation Granted and Allocated
+94
+Dr. Johannes Teyssen (Chairman of the Management Board)
+Compensation granted
+2016
+2017
+2017
+€
+Fixed compensation
+(min.)
+1,240,000
+1,240,000
+700,000 525,000 1,093,500 585,000
+3,615,000 3,265,000 5,819,850 3,956,333
+42,409
+Total
+2,654,195
+Value of stock-based
+compensation granted¹
+2017
+2016
+2017
+Total
+2016
+42,409 1,732,500 1,827,516
+25,138 1,008,333 1,063,643
+5,309,695 4,747,925
+3,171,950 2,842,114
+(until March 31, 2017)
+Dr. Marc Spieker
+(since January 1, 2017)
+175,000 700,000
+780,000
+17,100 181,065
+300,000
+192,100 1,961,065
+700,000
+1,093,500
+35,695
+825,000
+Dr. Karsten Wildberger
+2016
+40,845
+1,282,409
+758,278
+1,635,221
+-Share Performance Plan, seventh tranche (2012-2015)
+- Share Matching Plan, first tranche (2013-2017)
+758,278
+1,635,221
+- Share Matching Plan, fourth tranche (2016-2020)
+1,197,516
+- Share Matching Plan, fifth tranche (2017-2021)
+- Performance Plan, first tranche (2017-2020)
+Total
+630,000
+4,369,925
+Service cost
+Total
+779,460
+5,149,385
+Combined Group Management Report
+1,732,500
+4,430,845
+864,771
+5,295,616
+3,465,000
+Total
+1,732,500
+Multi-year variable compensation
+1,280,845
+1,240,000
+40,845
+1,280,845
+One-year variable compensation
+1,260,000
+1,417,500
+2017
+(max.)1,2
+1,240,000
+40,845
+1,280,845
+2,835,000
+Compensation allocated
+2016
+2017
+1,240,000
+42,409
+1,240,000
+40,845
+1,282,409
+1,280,845
+1,638,000
+2,296,350
+1,827,516
+2017
+40,845
+27,117
+Fringe benefits
+1,638,000
+953,333
+2017
+2016
+930,000 930,000
+2017
+Dr.-Ing. Leonhard Birnbaum¹
+2016
+1,823,372 478,740
+95,578 161,367
+2017
+686,225
+39,868
+(€)
+2016
+647,067
+32,398
+(€)
+2017
+2016
+18,936,224 17,112,854
+1,089,787 994,209
+Michael Sen
+(until March 31, 2017) 1,3
+249,034
+75
+6,039
+Dr. Johannes Teyssen
+Thereof interest cost
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+830,032
+518,162
+292,555
+¹Contribution Plan E.ON Management Board.
+²Dr. Spieker joined the E.ON SE Management Board effective January 1, 2017, but had been employed by the Company prior to that. Due to his previous years of service, the cash value of his pension entitlement
+was €779,388 at December 31, 2016.
+³Under the termination agreement concluded with Mr. Sen, the benefit amount shown here expires at the conclusion of March 31, 2017.
+Pensions of Management Board Members Pursuant to the German Commercial Code
+Current pension entitlement at December 31
+Additions to provisions for pensions
+Cash value at December 31
+As a percentage
+of annual base
+compensation
+2017
+404,266
+2016
+75
+Dr. Marc Spieker
+Total Compensation in 2017
+The total compensation of the members of the Management
+Board in the 2017 financial year amounted to €14.0 million,
+about 1.5 percent above the prior-year figure of €13.8 million
+based on the Management Board's total compensation dis-
+closed in the 2016 Annual Report.
+Under a termination agreement concluded in December 2016,
+Mr. Sen's service agreement ended by mutual consent effective
+March 31, 2017, without payment of contractual claims for the
+remaining period of his agreement, because Mr. Sen ended his
+service on the E.ON SE Management Board on this date at his
+own request. Because Mr. Sen did not reach the five-year vesting
+period, he forfeited the company-funded entitlement to a com-
+pany pension. He also forfeited the virtual stock granted to him
+in 2015 and 2016 as part of the E.ON Share Matching Plans
+with the exception of the virtual stock included in the LTI com-
+ponent of his 2015 and 2016 bonuses. The latter will continue
+until the normal end of the vesting period of their respective
+tranches. No bonus and no tranche under the E.ON Performance
+Plan were granted. The non-compete clause was waived with-
+out compensation.
+The individual members of the Management Board had the
+following total compensation:
+Fixed annual
+compensation
+€
+2017
+2016
+2017
+Bonus
+2016
+Other compensation
+Dr. Johannes Teyssen
+Dr.-Ing. Leonhard Birnbaum
+Michael Sen
+1,240,000 1,240,000
+2,296,350
+800,000 800,000 1,336,500
+93
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Total Compensation of the Management Board
+633,809
+415,162
+148,005
+188,871
+226,291
+19,481
+9,074
+226,291
+¹Contribution Plan E.ON Management Board.
+Combined Group Management Report
+²Dr. Spieker joined the E.ON SE Management Board effective January 1, 2017, but had been employed by the Company prior to that. Due to his previous years of service, the cash value of his pension entitlement
+was €485,804 at December 31, 2016.
+³Under the termination agreement concluded with Mr. Sen, the benefit amount shown here expires at the conclusion of March 31, 2017.
+(since January 1, 2017)1, 2
+In the case of the figures pursuant to the German Commercial
+Code, another reason is that the actuarial interest rate E.ON
+uses for discounting was significantly below the prior-year figure.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Pursuant to IFRS and the German Commercial Code, the cash
+values of Management Board pensions for which provisions are
+required increased slightly relative to year-end 2016. This
+resulted in part from increases in the number of years of service.
+Dr. Karsten Wildberger¹
+Andreas Schmitz
+231,483
+140,000
+13,483
+140,000
+13,114
+233,114
+70,000
+Fred Schulz
+9,000
+3,000
+231,500
+73,000
+140,000
+8,000
+82,500
+10,000
+10,000
+70,000
+110,000
+52,500
+81,667
+2,000
+146,000
+277,700 277,700
+202,500
+83,667
+74,705
+Baroness
+70,000
+Denise Kingsmill CBE
+3,000
+6,000
+143,000
+146,000
+Eugen-Gheorghe Luha
+140,000
+140,000
+140,000
+110,000
+Elisabeth Wallbaum
+13,000
+273,500
+218,000
+Dr. Theo Siegert
+140,000
+140,000
+180,000
+180,000
+11,000
+10,000
+331,000
+330,000
+140,000
+140,000
+6,000
+140,000
+8,000
+11,000
+70,000
+122,500
+22,243
+13,500
+287,243
+276,500
+Silvia Šmátralová
+140,000
+70,000
+15,000
+6,000
+24,367
+32,452
+170,367
+104,452
+Dr. Karen de Segundo
+140,000
+140,000
+2,000
+Carolina Dybeck Happe
+E.ON Stock
+17,700
+2017
+2016
+2017
+2016
+Dr. Karl-Ludwig Kley
+440,000
+256,667
+13,000
+7,000
+453,000
+263,667
+Prof. Dr. Ulrich Lehner
+320,000
+320,000
+12,000
+Total
+Supervisory Board
+compensation from
+affiliated companies
+Attendance fees
+2016
+2017
+Supervisory Board Compensation
+6,000
+CEO Letter
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+10,000
+99
+compensation
+Compensation for
+committee duties
+€
+2017
+2016
+2017
+2016
+Supervisory Board
+2,705
+17,700
+332,000
+Andreas Scheidt
+2,000
+147,000
+72,000
+Tibor Gila
+140,000
+70,000
+6,000
+2,000
+Thies Hansen
+140,000
+140,000
+110,000
+110,000
+10,000
+10,000
+7,000
+70,000
+140,000
+Erich Clementi
+320,000
+320,000
+13,000
+10,000
+170,853
+503,853
+330,000
+330,000
+Clive Broutta
+140,000
+70,000
+70,000
+8,000
+8,000
+218,000
+218,000
+140,000
+146,000
+•
+Ewald Woste
+the provisions for the decommissioning of nuclear plants, we
+looked, among other things, at the external expert opinions
+on which the measurement was based. We focused on the
+evaluation of the technical decommissioning concepts and
+the underlying cost assumptions, particularly with regard to
+HR costs. We evaluated the environmental remediation obli-
+gations of predecessor entities in particular with regard to
+the external legal assessments underlying the accounting
+treatment, the internal legal assessments and the technical
+concepts underlying the measurement. Furthermore, we
+evaluated whether the interest rates with matching terms
+were properly derived from market data.
+We assessed the entire calculations (including discounting)
+for the respective provisions using the applicable measure-
+ment parameters and scrutinized the planned timetable for
+utilizing the provisions. We were able to satisfy ourselves
+that the assessments and assumptions made by the execu-
+tive directors were sufficiently substantiated to justify the
+recognition and measurement of the non-current provisions.
+We consider the measurement parameters and assumptions
+used by the executive directors to be reproducible as a
+whole, and we were able to satisfy ourselves that they were
+properly included in the calculation of the provisions.
+c. The Company's disclosures relating to the non-current pro-
+visions are contained in note 25 to the consolidated financial
+statements.
+Other Information
+The executive directors are responsible for the other informa-
+tion. The other information comprises the following non-au-
+dited parts of the group management report:
+•
+•
+the statement on corporate governance pursuant to
+§ 289f HGB and § 315d HGB included in section "Corporate
+Governance Report" of the group management report.
+the separate non-financial report pursuant to § 289b Abs. 3
+HGB and § 315b Abs. 3 HGB
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+b. With the knowledge that the measurement of the provision
+is primarily based on the executive directors' assessments
+and that these have a significant effect on consolidated net
+income, we in particular assessed the reliability of the informa-
+tion used as well as the appropriateness of the assumptions
+underlying the measurement. As part of our assessment of
+a. In the consolidated financial statements of E.ON SE as of
+31 December 2017, an amount of EUR 14.4 billion is reported
+under the "Other provisions" balance sheet line item.
+EUR 10.5 billion of this amount is attributable to provisions
+for the decommissioning of nuclear plants and EUR 0.6 billion
+is attributable to provisions for environmental remediation
+obligations of predecessor entities. Both the recognition and
+the subsequent measurement of provisions, like the deter-
+mination of the underlying assumptions used in this regard,
+including the discount rate used, are highly dependent on
+estimates and assumptions by the executive directors. As a
+result, and due to the reassessment of central assumptions
+regarding the abovementioned provisions and material par-
+tial reversals in the financial year 2017, we considered these
+matters to be of particular significance for our audit.
+4. Non-current provisions
+c. The Company's disclosures relating to equity, financial liabil-
+ities, derivative financial instruments and the application of
+hedge accounting are contained, in particular, in notes 19
+and 20 and 26, 30 and 31 of the notes to the consolidated
+financial statements.
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+105
+b. As part of our audit, we assessed, in particular, the presenta-
+tion of the investment in Uniper SE as a disposal group and
+the accounting treatment of the agreement with the Fortum
+Group. Within this context, we first of all obtained an under-
+standing of the underlying contractual agreements and their
+impact on the presentation of Uniper SE and the accounting
+treatment. Regarding the classification of the sale as a
+transaction that is highly probable, we also performed inqui-
+ries with the responsible individuals involved in the transac-
+tion. Our audit then focused on the measurement of the ten-
+der option including the compensation payment if the option
+is not exercised. Within this context, we evaluated the mea-
+surement model and the parameters used for measurement
+purposes, as well as the specific calculation. We were able
+to satisfy ourselves that the investment in Uniper SE was
+presented appropriately and that the assumptions and mea-
+surement parameters underlying the valuation were suffi-
+ciently documented and supported overall.
+c. The Company's disclosures on the planned sale of Uniper SE
+are contained in note 4 of the notes to the consolidated
+financial statements.
+3. Financing activities
+Strategy and Objectives
+a. Due to the payment made to the fund for financing the nuclear
+waste disposal in the amount of around EUR 10.3 billion
+in the financial year 2017, E.ON SE had additional financing
+requirements. These requirements were partly covered
+using own funds, but in particular also using the inflow of
+EUR 3.0 billion from the refund of nuclear fuel tax. In addition,
+the Company increased the share capital within the context
+of the authorized capital by around EUR 0.2 billion, resulting
+in an increase in equity of EUR 1.34 billion in total taking the
+agreed premium into account. In addition, three euro bonds
+with a total volume of EUR 2.0 billion were placed. The
+bonds are fixed-rate bonds and have a term running up to
+2021, 2024 and 2029.
+applied. As a result, hedge accounting for this part of the
+hedging relationship was not continued at the time at which
+the bonds were issued. New derivatives were concluded
+within this context in order to reflect the changed interest
+rate risk. These derivatives were included in the hedging
+relationship together with the derivatives concluded in pre-
+vious years.
+As of 31 December 2017, the hedging instruments have a
+negative fair value of EUR 0.8 billion in total. As of 31 Decem-
+ber 2017, the "accumulated other comprehensive income"
+includes EUR 0.4 billion for the bonds issued which will be
+reversed as an expense in subsequent periods. In the financial
+year 2017, EUR 33 million were reclassified as an expense.
+From our point of view, these matters were of particular sig-
+nificance for our audit due to the volume of the financing
+activities, the complexity of the hedging relationships, the
+potential impact on profit or loss and the long term of the
+transactions.
+b. As part of our audit, we assessed the accounting treatment
+of the capital increase, in particular the inclusion of transac-
+tion costs, as well as the bonds issued, in particular with
+regard to their measurement and hedge accounting. Within
+this context, we first of all obtained an understanding of the
+contractual law, company law and financial bases and
+assessed these in terms of their accounting treatment. We
+also obtained and evaluated supporting documentation from
+the banks involved and excerpts from the commercial regis-
+ter. We assessed the continuation of hedge accounting
+regarding compliance with the requirements of international
+accounting standards. In detail, this involved assessing
+whether the requirements for the application of hedge
+accounting had been met, including the existence of corre-
+sponding effectiveness tests and hedge documentation. In
+Independent Auditor's Report
+106
+addition, we verified the accounting entries to recognize rel-
+evant balance sheet items (market values of the hedging
+instruments, other comprehensive income and reclassifica-
+tion of other comprehensive income, etc.) and their reporting
+in the balance sheet and income statement of the E.ON
+Group, and assessed their compliance with the applicable
+accounting requirements. In doing so, we were able to sat-
+isfy ourselves that the capital increase and the bonds issued
+were presented appropriately in the financial statements
+and that the conditions for the application of hedge account-
+ing are sufficiently reasonable and documented.
+The issuance of these bonds meant that, partially, there was
+no longer any hedged item for the previously designated
+interest rate hedging relationship for bonds to be issued in
+the future, to which hedge accounting (cash flow hedge) was
+Strategy and Objectives
+Combined Group Management Report
+Summary of Financial Highlights and Explanations
+•
+•
+Identify and assess the risks of material misstatement of the
+consolidated financial statements and of the group manage-
+ment report, whether due to fraud or error, design and per-
+form audit procedures responsive to those risks, and obtain
+audit evidence that is sufficient and appropriate to provide a
+basis for our audit opinions. The risk of not detecting a mate-
+rial misstatement resulting from fraud is higher than for one
+resulting from error, as fraud may involve collusion, forgery,
+intentional omissions, misrepresentations, or the override of
+internal control.
+Obtain an understanding of internal control relevant to the
+audit of the consolidated financial statements and of
+arrangements and measures (systems) relevant to the audit
+of the group management report in order to design audit
+procedures that are appropriate in the circumstances, but
+not for the purpose of expressing an audit opinion on the
+effectiveness of these systems.
+Evaluate the appropriateness of accounting policies used by
+the executive directors and the reasonableness of estimates
+made by the executive directors and related disclosures.
+Conclude on the appropriateness of the executive directors'
+use of the going concern basis of accounting and, based on
+the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast signifi-
+cant doubt on the Group's ability to continue as a going con-
+cern. If we conclude that a material uncertainty exists, we
+•
+•
+•
+are required to draw attention in the auditor's report to the
+related disclosures in the consolidated financial statements
+and in the group management report or, if such disclosures
+are inadequate, to modify our respective audit opinions. Our
+conclusions are based on the audit evidence obtained up to
+the date of our auditor's report. However, future events or
+conditions I may cause the Group to cease to be able to con-
+tinue as a going concern.
+Evaluate the overall presentation, structure and content of
+the consolidated financial statements, including the disclo-
+sures, and whether the consolidated financial statements
+present the underlying transactions and events in a manner
+that the consolidated financial statements give a true and
+fair view of the assets, liabilities, financial position and finan-
+cial performance of the Group in compliance with IFRSS as
+adopted by the EU and the additional requirements of Ger-
+man commercial law pursuant to § 315e Abs. 1 HGB.
+Obtain sufficient appropriate audit evidence regarding the
+financial information of the entities or business activities
+within the Group to express audit opinions on the consoli-
+dated financial statements and on the group management
+report. We are responsible for the direction, supervision and
+performance of the group audit. We remain solely responsi-
+ble for our audit opinions.
+Evaluate the consistency of the group management report
+with the consolidated financial statements, its conformity with
+German law, and the view of the Group's position it provides.
+Perform audit procedures on the prospective information
+presented by the executive directors in the group manage-
+ment report. On the basis of sufficient appropriate audit evi-
+dence we evaluate, in particular, the significant assumptions
+The total compensation of the members of the Supervisory Board
+amounted to €4.5 million (prior year: €3.6 million pursuant to
+the total compensation of the Supervisory Board reported in the
+2016 Annual Report). As in the prior year, no loans were out-
+standing or granted to Supervisory Board members in the 2017
+financial year.
+We exercise professional judgment and maintain professional
+skepticism throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a
+guarantee that an audit conducted in accordance with § 317 HGB
+and the EU Audit Regulation and in compliance with German
+Generally Accepted Standards for Financial Statement Audits
+promulgated by the Institut der Wirtschaftsprüfer (IDW) and
+supplementary compliance with the ISAs will always detect a
+material misstatement. Misstatements can arise from fraud or
+error and are considered material if, individually or in the aggre-
+gate, they could reasonably be expected to influence the eco-
+nomic decisions of users taken on the basis of these consolidated
+financial statements and this group management report.
+108
+Independent Auditor's Report
+107
+The other information comprises further the remaining parts of
+the annual report - excluding cross-references to external
+information -, with the exception of the audited consolidated
+financial statements, the audited group management report
+and our auditor's report.
+Our audit opinions on the consolidated financial statements and
+on the group management report do not cover the other infor-
+mation, and consequently we do not express an audit opinion or
+any other form of assurance conclusion thereon.
+In connection with our audit, our responsibility is to read the
+other information and, in so doing, to consider whether the
+other information
+⋅
+is materially inconsistent with the consolidated financial
+statements, with the group management report or our
+knowledge obtained in the audit, or
+• otherwise appears to be materially misstated.
+Consolidated Financial Statements
+If, based on the work we have performed, we conclude that
+there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in
+this regard.
+The executive directors are responsible for the preparation of the
+consolidated financial statements that comply, in all material
+respects, with IFRSS as adopted by the EU and the additional
+requirements of German commercial law pursuant to § 315e
+Abs. 1 HGB and that the consolidated financial statements, in
+compliance with these requirements, give a true and fair view of
+the assets, liabilities, financial position, and financial performance
+of the Group. In addition the executive directors are responsible
+for such internal control as they have determined necessary to
+enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud
+or error.
+In addition, they are responsible for financial reporting based on
+the going concern basis of accounting unless there is an inten-
+tion to liquidate the Group or to cease operations, or there is no
+realistic alternative but to do so.
+Furthermore, the executive directors are responsible for the
+preparation of the group management report that, as a whole,
+provides an appropriate view of the Group's position and is, in
+all material respects, consistent with the consolidated financial
+statements, complies with German legal requirements, and
+appropriately presents the opportunities and risks of future
+development. In addition, the executive directors are responsi-
+ble for such arrangements and measures (systems) as they
+have considered necessary to enable the preparation of a group
+management report that is in accordance with the applicable
+German legal requirements, and to be able to provide sufficient
+appropriate evidence for the assertions in the group manage-
+ment report.
+The supervisory board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consoli-
+dated financial statements and of the group management
+report.
+Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements and of the Group Management Report
+Our objectives are to obtain reasonable assurance about
+whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error,
+and whether the group management report as a whole provides
+an appropriate view of the Group's position and, in all material
+respects, is consistent with the consolidated financial state-
+ments and the knowledge obtained in the audit, complies with
+the German legal requirements and appropriately presents the
+opportunities and risks of future development, as well as to
+issue an auditor's report that includes our audit opinions on the
+consolidated financial statements and on the group manage-
+ment report.
+In preparing the consolidated financial statements, the execu-
+tive directors are responsible for assessing the Group's ability to
+continue as a going concern. They also have the responsibility
+for disclosing, as applicable, matters related to going concern.
+Responsibilities of the Executive Directors and the Supervisory
+Board for the Consolidated Financial Statements and the Group
+Management Report
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+276,277
+20,000
+99,841
+223,500
+4,529,777
+92,000
+3,339,174
+Other
+The Company has taken out D&O insurance for Management
+Board and Supervisory Board members. In accordance with
+the German Stock Corporation Act and the German Corporate
+Governance Code's recommendation, this insurance includes
+a deductible of 10 percent of the respective damage claim for
+Management Board and Supervisory Board members. The
+deductible has a maximum cumulative annual cap of 150 percent
+of a member's annual fixed compensation.
+Consolidated
+Financial
+Statements
+Independent Auditor's Report
+102
+To E.ON SE, Essen
+Report on the Audit of the Consolidated
+Financial Statements and of the Group
+Management Report
+Audit Opinions
+111,000
+171,000
+610,000
+20,000
+140,000
+70,000
+52,500
+10,000
+2,000
+8,000
+210,500
+We have audited the consolidated financial statements of E.ON
+SE, Essen, and its subsidiaries (the Group), which comprise the
+consolidated balance sheet, as at 31 December 2017, consoli-
+dated statement of income, consolidated statement of recog-
+nized income and expenses, consolidated statement of changes
+in equity and consolidated statement of cash flows for the
+financial year from 1 January to 31 December 2017, and notes
+to the consolidated financial statements, including a summary
+of significant accounting policies. In addition, we have audited
+the group management report of E.ON SE, which is combined
+with the Company's management report, for the financial year
+from 1 January to 31 December 2017. We have not audited the
+content of those parts of the group management report listed in
+the "Other Information" section of our auditor's report in accor-
+dance with the German legal requirements.
+72,000
+140,000
+70,000
+Total
+3,180,000 2,518,333
+52,500
+902,500
+11,000
+2,000
+Albert Zettl
+In our opinion, on the basis of the knowledge obtained in the
+audit,
+•
+the accompanying consolidated financial statements com-
+ply, in all material respects, with the IFRSS as adopted by the
+EU, and the additional requirements of German commercial
+law pursuant to § [Article] 315e Abs. [paragraph] 1 HGB
+[Handelsgesetzbuch: German Commercial Code] and, in
+compliance with these requirements, give a true and fair view
+of the assets, liabilities, and financial position of the Group
+as at 31 December 2017, and of its financial performance
+for the financial year from 1 January to 31 December 2017,
+and
+Our presentation of these key audit matters has been struc-
+tured in each case as follows:
+a. Matter and issue
+b. Audit approach and findings
+c. Reference to further information
+Hereinafter we present the key audit matters:
+1. Recoverability of goodwill, property, plant and equipment
+and intangible assets
+a. In the consolidated financial statements of E.ON SE as of
+31 December 2017, an amount of EUR 3.3 billion is reported
+under the "goodwill" balance sheet line item and an amount
+of EUR 24.8 billion under the "property, plant and equipment"
+line item and EUR 2.2 billion under the "intangible assets"
+line item. In the financial year 2017, impairment losses of
+EUR 1.0 billion were recognized in this regard, with
+4. Non-current provisions
+EUR 0.7 billion of this amount attributable to wind farms in
+Independent Auditor's Report
+104
+rate. The assumptions about the long-term development of
+the underlying prices and the relevant regulatory influencing
+factors are in particular also of importance. Due to the com-
+plexity of the measurement and the considerable uncertain-
+ties relating to the underlying assumptions, as well as the
+amount of impairment losses recognized, this matter was of
+particular significance during our audit.
+b. As part of our audit, we assessed, among other things,
+whether the measurement model for performing impair-
+ment tests properly reflects the conceptual requirements of
+the relevant standards and whether the calculations in the
+models were correctly performed. The critical assessment of
+the key assumptions underlying the measurements was the
+focal point of our audit. We evaluated the appropriateness of
+the future cash flows used for the measurement by reconcil-
+ing this data against general and sector-specific market
+expectations and by comparing it with the current budgets
+in the Group investment, finance and HR plan for 2018 pre-
+pared by management and approved by the supervisory
+board on 18 December 2017 as well as the planning for the
+years 2019 and 2020 prepared by the executive directors
+and approved by the supervisory board. Among other things,
+we assessed how the long-term growth rates used for per-
+petual annuities were derived from the market expectations.
+We also assessed the parameters used to determine the dis-
+count rate applied, and evaluated the measurement model.
+We also compared the assumptions about long-term price
+development and the relevant regulatory influencing factors
+against sector-specific expectations. Within the context of
+our assessment of the recoverability of goodwill, we also
+evaluated whether the costs for Corporate Overheads were
+properly ascertained, allocated, and included in the impair-
+ment tests of the respective cash-generating units. Finally,
+we assessed the calculation of the carrying amounts of the
+cash-generating units, which were compared against the
+corresponding recoverable amount, as well as the calcula-
+tion and recognition of the impairment losses.
+Overall, we consider the measurement inputs and assumptions
+used by management to be in line with our expectations. We
+were able to verify the inclusion in the measurement models
+and the calculation of the impairment losses that had been
+identified.
+c. The Company's disclosures relating to the recoverability of
+goodwill, property, plant and equipment and intangible
+assets are contained in note 14 of the notes to the consoli-
+dated financial statements.
+2. Planned disposal of the investment in Uniper SE
+a. In the consolidated financial statements of E.ON SE as of
+31 December 2017, an amount of EUR 3.3 billion is reported
+under the "Assets held for sale" balance sheet line item. In
+particular, EUR 3.0 billion of this amount is attributable to
+the investment in Uniper SE. At the end of September 2017,
+E.ON concluded an agreement with the Fortum Group sub-
+jecting the latter to the obligation to make a public takeover
+offer of EUR 22 (including the expected dividend of EUR 0.69
+per share in Uniper for the financial year 2017) for one share
+in Uniper and entitling E.ON to accept this offer for its
+46.65% stake in Uniper SE in January 2018 (tender option).
+If this option is not exercised, E.ON will have to make a com-
+pensation payment to the Fortum Group. The executive
+directors consider the sale of the shares in the financial year
+2018 to be highly probable and therefore discloses the
+investment in Uniper SE as disposal group according to IFRS
+5 since then. With this background, and given the consider-
+able complexity associated with the accounting treatment of
+the agreement with the Fortum Group and the significant
+effect on consolidated net income, the presentation as a dis-
+posal group and the accounting treatment of the agreement
+with the Fortum Group, in particular, were of particular sig-
+nificance for our audit.
+the United States of America. The Company allocates good-
+will to the cash-generating units or groups of cash-generat-
+ing units that are primarily equivalent to the E.ON Group's
+operating segments. These are subject to impairment tests
+on a regular basis in the fourth quarter of a given financial
+year or whenever there are indications of impairment. In the
+case of property, plant and equipment and definite life intan-
+gible assets, impairment tests are only performed based on
+the relevant cash-generating units if there are indications of
+impairment. The carrying amount of the relevant cash-gen-
+erating units - in cases involving the assessment of the
+recoverability of goodwill, including goodwill - is compared
+with the corresponding recoverable amount in the context of
+the impairment test. The present value of the future cash
+flows from the respective cash-generating unit serves as the
+basis of valuation in the context of an impairment test. The
+cash flows are based on the E.ON Group's medium-term
+planning for the years 2018 to 2020. For the purposes of
+measuring property, plant and equipment and definite life
+intangible assets, this planning period is extrapolated over
+the lifetime of the asset in question. For the purposes of
+assessing the recoverability of goodwill, the three-year
+detailed planning period is generally extended by another
+two years
+- or more, if required - and is then extrapolated
+on the basis of assumptions about long-term growth rates in
+perpetual annuity. The discount rate used is the weighted
+average cost of capital for the relevant cash-generating unit
+in each case. The result of this measurement depends to a
+large extent on management's estimates of the amount of
+future cash flows, the discount rate applied and the growth
+146,000
+3. Financing activities
+1. Recoverability of goodwill, property, plant and equipment an
+intangible assets
+the opportunities and risks of future development. Our audit
+opinion on the group management report does not cover the
+content of those parts of the group management report
+listed in the "Other Information" section of our auditor's
+report.
+Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
+that our audit has not led to any reservations relating to the
+legal compliance of the consolidated financial statements and
+of the group management report.
+Basis for the Audit Opinions
+We conducted our audit of the consolidated financial state-
+ments and of the group management report in accordance with
+§ 317 HGB and the EU Audit Regulation (No. 537/2014,
+referred to subsequently as "EU Audit Regulation") and in com-
+pliance with German Generally Accepted Standards for Finan-
+cial Statement Audits promulgated by the Institut der
+Wirtschaftsprüfer [Institute of Public Auditors in Germany]
+(IDW). We performed the audit of the consolidated financial
+statements in supplementary compliance with the International
+Standards on Auditing (ISAs). Our responsibilities under those
+requirements, principles and standards are further described in
+the "Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements and of the Group Management Report"
+section of our auditor's report. We are independent of the group
+entities in accordance with the requirements of European law
+and German commercial and professional law, and we have ful-
+filled our other German professional responsibilities in accor-
+dance with these requirements. In addition, in accordance with
+Article 10 (2) point (f) of the EU Audit Regulation, we declare
+that we have not provided non-audit services prohibited under
+Article 5 (1) of the EU Audit Regulation. We believe that the
+audit evidence we have obtained is sufficient and appropriate to
+provide a basis for our audit opinions on the consolidated finan-
+cial statements and on the group management report.
+the accompanying group management report as a whole
+provides an appropriate view of the Group's position. In all
+material respects, this group management report is consis-
+tent with the consolidated financial statements, complies
+with German legal requirements and appropriately presents
+CEO Letter
+Report of the Supervisory Board
+2. Planned disposal of the investment in Uniper SE
+E.ON Stock
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+103
+Key Audit Matters in the Audit of the Consoli-
+dated Financial Statements
+Key audit matters are those matters that, in our professional
+judgment, were of most significance in our audit of the consoli-
+dated financial statements for the financial year from 1 January
+to 31 December 2017. These matters were addressed in the
+context of our audit of the consolidated financial statements as
+a whole, and in forming our audit opinion thereon; we do not
+provide a separate audit opinion on these matters.
+In our view, the matters of most significance in our audit were
+as follows:
+Strategy and Objectives
+Supervisory Board Compensation in 2017
+140,000
+-342
+Total assets
+Current assets
+Assets held for sale
+Cash and cash equivalents
+Restricted cash and cash equivalents
+Securities and fixed-term deposits
+Liquid funds
+851
+514
+(10)
+Income tax assets
+6,719
+5,781
+(17)
+Trade receivables and other operating assets
+463
+236
+(17)
+Financial receivables and other financial assets
+785
+794
+(18)
+(16)
+5,160
+670
+113
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Equity and Liabilities
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+63,699
+55,950
+17,403
+15,786
+12
+3,301
+(4)
+5,574
+2,708
+852
+1,782
+2,147
+8,573
+Inventories
+46,296
+40,164
+25,242
+24,766
+(14)
+Non-current securities
+Equity investments
+Other financial assets
+Companies accounted for under the equity method
+Property, plant and equipment
+2,329
+2,243
+(14)
+Intangible assets
+3,463
+3,337
+(14)
+Goodwill
+2016
+2017
+Note
+€ in millions
+December 31,
+(15)
+3,547
+6,352
+(15)
+Non-current assets
+1,441
+907
+(10)
+Deferred tax assets
+7
+(10)
+Income tax assets
+1,761
+1,371
+€ in millions
+(17)
+553
+452
+(17)
+Financial receivables and other financial assets
+4,327
+2,749
+821
+792
+5,148
+3,541
+Operating receivables and other operating assets
+Note
+2017
+2016
+Income tax liabilities
+6,888
+8,099
+(26)
+Trade payables and other operating liabilities
+3,792
+3,099
+(26)
+Financial liabilities
+39,287
+35,198
+Non-current liabilities
+2,554
+1,616
+(10)
+Deferred tax liabilities
+15,609
+14,381
+(25)
+Miscellaneous provisions
+4,009
+(10)
+673
+434
+Miscellaneous provisions
+Income/Loss from discontinued operations, net
+-16,007
+4,180
+2016
+2017
+Net income/loss
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+114
+63,699
+3,620
+55,950
+23,125
+14,044
+Current liabilities
+3
+132
+(4)
+Liabilities associated with assets held for sale
+12,008
+2,041
+(25)
+Total equity and liabilities
+112
+(24)
+1,433
+(19)
+-2,048
+-2,378
+(22)
+-8,495
+-4,552
+(21)
+Reclassification related to put options
+Non-controlling interests (before reclassification)
+Equity attributable to shareholders of E.ON SE
+Treasury shares
+Accumulated other comprehensive income
+Retained earnings
+9,201
+9,862
+(20)
+Additional paid-in capital
+2,001
+2,201
+(19)
+Capital stock
+-1,126
+-1,714
+4,007
+-1,055
+969
+(10)
+Income tax liabilities
+5,247
+4,690
+(26)
+Operating liabilities
+10,435
+9,922
+(26)
+Provisions for pensions and similar obligations
+1,287
+2,342
+2,701
+(23)
+Financial liabilities
+Equity
+Non-controlling interests
+-554
+-494
+2,896
+3,195
+6,708
+E.ON SE and Subsidiaries Consolidated Balance Sheets-Assets
+-5,431
+275
+285
+716
+-7,867
+-6,475
+(7)
+Income/Loss from companies accounted for under the equity method
+Other operating expenses
+-3,823
+-2,769
+(14)
+-2,839
+-3,162
+(11)
+-32,325
+-29,788
+(8)
+7,448
+7,649
+(7)
+529
+524
+Income/Loss from continuing operations before financial results and income taxes
+Financial results
+Income/Loss from equity investments
+Income from other securities, interest and similar income
+Interest and similar expenses
+-13,842
+(4)
+-2,165
+4,180
+-440
+-440
+(10)
+-1,638
+-1,340
+343
+(6)
+1,299
+-3
+-1,314
+-44
+16
+-411
+4,664
+Net income/loss
+Income/Loss from discontinued operations, net
+Income/Loss from continuing operations
+Income taxes
+-19
+4,180
+Depreciation, amortization and impairment charges
+Cost of materials
+Düsseldorf, 6 March 2018/limited to the above mentioned
+adjustments: 12 March 2018
+We were elected as group auditor by the annual general meeting
+on 10 May 2017. We were engaged by the supervisory board
+on 23 May 2017. We have been the group auditor of the E.ON SE,
+Essen, without interruption since the Company first met the
+requirements as a public-interest entity within the meaning of
+§ 319a Abs. 1 Satz 1 HGB in the financial year 1965.
+Further Information pursuant to Article 10 of
+the EU Audit Regulation
+Other Legal and Regulatory Requirements
+The German Public Auditor responsible for the engagement is
+Aissata Touré.
+German Public Auditor Responsible for the
+Engagement
+We issue this auditor's report on the amended consolidated
+financial statements and the amended group management report
+on the basis of our audit, duly completed as of 6 March 2018,
+and our supplementary audit completed as of 12 March 2018
+related to the addition of disclosures regarding a matter that
+has become known subsequent to the preparation of the con-
+solidated financial statements and the group management
+report. We refer to the presentation of the amendments by the
+executive directors in the section "Subsequent Events" in the
+amended notes to the consolidated financial statements as well
+as in the section "Earnings Situation" and in the chapter "Fore-
+cast Report" in the amended group management report.
+Emphasis of Matter-Supplementary Audit
+We declare that the audit opinions expressed in this auditor's
+report are consistent with the additional report to the audit
+committee pursuant to Article 11 of the EU Audit Regulation
+(long-form audit report).
+From the matters communicated with those charged with gov-
+ernance, we determine those matters that were of most signifi-
+cance in the audit of the consolidated financial statements of
+the current period and are therefore the key audit matters. We
+describe these matters in our auditor's report unless law or reg-
+ulation precludes public disclosure about the matter.
+We also provide those charged with governance with a state-
+ment that we have complied with the relevant independence
+requirements, and communicate with them all relationships and
+other matters that may reasonably be thought to bear on our
+independence, and where applicable, the related safeguards.
+We communicate with those charged with governance regard-
+ing, among other matters, the planned scope and timing of the
+audit and significant audit findings, including any significant
+deficiencies in internal control that we identify during our audit.
+used by the executive directors as a basis for the prospective
+information, and evaluate the proper derivation of the pro-
+spective information from these assumptions. We do not
+express a separate audit opinion on the prospective infor-
+mation and on the assumptions used as a basis. There is a
+substantial unavoidable risk that future events will differ
+materially from the prospective information.
+109
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+Markus Dittmann
+Wirtschaftsprüfer
+(German Public Auditor)
+Other operating income
+Own work capitalized
+8
+4
+Changes in inventories (finished goods and work in progress)
+38,173
+37,965
+(5)
+-1,002
+-993
+Personnel costs
+Sales
+39,175
+2016
+2017
+38,958
+Sales including electricity and energy taxes
+Note
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Income
+110
+(German Public Auditor)
+Aissata Touré
+Wirtschaftsprüferin
+Electricity and energy taxes
+13,842
+-16,007
+-8,450
+-477
+3,939
+926
+-25
+4,865
+-25
+-401
+-64
+295
+-61
+-106
+-125
+342
+63
+-673
+135
+-331
+198
+-1,605
+522
+-202
+-87
+-474
+-229
+-3
+-4,051
+Attributable to non-controlling interests
+Discontinued operations
+Continuing operations
+-3,816
+4,055
+-7,867
+4,055
+-13,298
+4,330
+165
+Total recognized income and expenses (total comprehensive income)
+Attributable to shareholders of E.ON SE
+150
+Total income and expenses recognized directly in equity
+4,314
+-372
+Items that might be reclassified subsequently to the income statement
+Income taxes
+-27
+57
+Reclassification adjustments recognized in income
+142
+2,709
+3,925
+-2
+-1,401
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Based on weighted-average number of shares outstanding.
+from net income/loss
+-4.33
+1.84
+-3.11
+0.00
+from discontinued operations
+from continuing operations
+-1.22
+1.84
+(13)
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted¹
+in €
+Attributable to non-controlling interests
+Attributable to shareholders of E.ON SE
+-7,557
+255
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+111
+317
+-16,007
+4,180
+2016
+2017
+Companies accounted for under the equity method
+Unrealized changes
+Reclassification adjustments recognized in income
+Unrealized changes
+Currency translation adjustments
+Reclassification adjustments recognized in income
+40
+Unrealized changes
+Reclassification adjustments recognized in income
+Unrealized changes
+Cash flow hedges
+Items that will not be reclassified subsequently to the income statement
+Income taxes
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+Remeasurements of defined benefit plans
+Net income/loss
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+Available-for-sale securities
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+Changes in provisions
+December 31,
+3,823
+-976
+246
+4,978
+3,209
+Non-controlling
+interests (before
+reclassification)
+-8,645
+16,429
+of E.ON SE
+-1,714
+-168
+to shareholders
+Treasury shares
+-1,016
+293
+-1,655
+-4,552
+9,862
+2,201
+235
+-60
+Equity
+attributable
+4
+62
+CEO Letter
+-1,144
+-168
+246
+246
+0
+-3,667
+4,978
+19,077
+2,648
+-561
+Total
+interests
+Non-controlling
+related to
+put options
+Reclassification
+117
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Consolidated Financial Statements
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+-505
+62
+460
+-60
+111
+2,268
+-1,454
+111
+2,268
+-1,454
+-8,450
+-342
+111
+-342
+2,268
+-903
+-6
+hedges
+Cash flow
+-4
+13
+-5
+-976
+Balance as of December 31, 2017
+other comprehensive income
+-9,904
+2,001
+9,201
+-8,495
+-505
+460
+3,925
+235
+-60
+-505
+4,385
+-452
+13
+1,139
+200
+-3
+-478
+-1,251
+353
+-1,150
+-8,495
+9,201
+2,001
+-1,251
+353
+-1,150
+235
+Changes in accumulated
+66
+7
+-330
+522
+62
+62
+460
+150
+20
+20
+130
+-42
+4,180
+255
+3,925
+4,330
+275
+275
+4,055
+60
+60
+60
+255
+-42
+-372
+-1,126
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro-rata
+basis if they are material.
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration
+are generally not recognized. Any difference between the cost
+of the investment and the pro rata remeasured value of its net
+assets is recognized in the Consolidated Financial Statements
+as part of the carrying amount.
+Interests in associated companies are accounted for using the
+equity method.
+An associate is an investee over whose financial and operating
+policy decisions E.ON has significant influence and that is not
+controlled by E.ON or jointly controlled with E.ON. Significant
+influence is presumed if E.ON directly or indirectly holds at least
+20 percent, but not more than 50 percent, of an entity's voting
+rights.
+Associated Companies
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into line
+with those of the Group. Intercompany receivables, liabilities
+and results are eliminated in the consolidation process.
+If a subsidiary or associate sells shares to a third party, leading
+to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control
+or significant influence, gains and losses from these dilutive
+transactions are included in the income statement under other
+operating income or expenses.
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor can
+direct the activities relevant to the business performance of
+the entity, participate in this business performance in the form
+of variable returns and influence the performance and the
+related variable returns through its involvement. Control is nor-
+mally deemed established if E.ON directly or indirectly holds a
+majority of the voting rights in the investee. In structured entities,
+control can be established by means of contractual arrangements
+if control is not demonstrated through possession of a majority
+of the voting rights.
+Scope of Consolidation
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared at cost, with the excep-
+tion of available-for-sale financial assets that are measured at
+fair value and of financial assets and liabilities (including deriv-
+ative financial instruments) that are recognized in income and
+measured at fair value.
+Principles
+The Consolidated Financial Statements of E.ON SE, Essen, reg-
+istered in the Commercial Register of Essen District Court under
+number HRB 28196, have been prepared in accordance with
+Section 315e (1) of the German Commercial Code ("HGB") and
+with those International Financial Reporting Standards ("IFRS")
+and IFRS Interpretations Committee interpretations ("IFRIC")
+that were adopted by the European Commission for use in the
+EU as of the end of the fiscal year, and whose application was
+mandatory as of December 31, 2017.
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+118
+Notes
+6,708
+2,701
+-494
+3,195
+4,007
+34
+7
+21
+-225
+2,277
+2,277
+2,037
+-1,605
+-151
+-151
+-1,454
+2,769
+2,126
+4,314
+2,126
+-16,007
+-7,557
+-7,557
+-8,450
+-13,298
+-5,431
+-5,431
+-7,867
+7
+583
+-1,714
+-1,055
+2,896
+1,567
+228
+107
+21
+13
+-225
+-452
+228
+1,339
+107
+588
+0
+1,287
+2,342
+-554
+2,896
+-1,055
+-1,714
+1,287
+2,342
+-554
+-677
+Remeasurements of defined benefit plans
+2,709
+Net income/loss
+2,470
+6,382
+Proceeds from disposal of securities (> 3 months) and of financial receivables and fixed-term deposits
+-134
+-232
+Equity investments
+-3,035
+-3,076
+Intangible assets and property, plant and equipment
+Purchases of securities (> 3 months) and of financial receivables and fixed-term deposits
+-3,169
+473
+620
+363
+150
+836
+770
+Purchases of investments in
+Equity investments
+Intangible assets and property, plant and equipment
+-3,308
+-3,295
+-3,272
+Changes in restricted cash and cash equivalents
+1,537
+4,260
+-113
+-205
+Cash dividends paid to non-controlling interests
+Proceeds from financial liabilities
+-976
+-345
+429
+1,588
+-4,366
+-391
+-1,325
+-3,041
+-391
+Cash dividends paid to shareholders of E.ON SE
+Payments received/made from changes in capital²
+Cash provided by (used for) investing activities
+Cash provided by (used for) investing activities of discontinued operations
+Cash provided by (used for) investing activities of continuing operations
+94
+-940
+Proceeds from disposal of
+Repayments of financial liabilities
+5,293
+Cash provided by (used for) operating activities
+-256
+Securities (>3 months)
+-45
+-176
+Equity investments
+-42
+-50
+Intangible assets and property, plant and equipment
+-203
+-116
+-482
+-276
+-124
+Other non-cash income and expenses
+-66
+-153
+Changes in deferred taxes
+3,142
+-516
+Other comprehensive income
+Gain/Loss on disposal of
+Changes in operating assets and liabilities and in income taxes
+1,663
+-1,294
+2,332
+Cash provided by (used for) operating activities of discontinued operations
+2,961
+Cash provided by (used for) operating activities of continuing operations (operating cash flow)¹
+-10,289
+Payment to the fund for nuclear-waste management
+-861
+718
+Other operating liabilities and income taxes
+-102
+-180
+-775
+1,064
+381
+107
+63
+-46
+Trade payables
+Other operating receivables and income tax assets
+Trade receivables
+Inventories and carbon allowances
+-2,952
+-4,758
+-2,952
+Cash provided by (used for) financing activities of continuing operations
+-3,357
+419
+-5,351
+9,419
+12,558
+2,001
+Balance as of January 1, 2016
+sale securities
+adjustments
+-7,029
+earnings
+Capital stock
+€ in millions
+Available-for-
+translation
+Retained
+Additional
+other comprehensive income
+Changes in accumulated
+Currency
+paid-in capital
+1,920
+-173
+Treasury shares repurchased/sold
+Total comprehensive income
+-2,029
+related to put options
+Net additions/disposals from reclassification
+Share additions/reductions
+Dividends
+Capital increase
+Treasury shares repurchased/sold
+Change in scope of consolidation
+Balance as of January 1, 2017
+Balance as of December 31, 2016
+other comprehensive income
+Remeasurements of defined benefit plans
+Changes in accumulated
+Other comprehensive income
+Net income/loss
+Total comprehensive income
+related to put options
+Net additions/disposals from reclassification
+Share additions/reductions
+Dividends
+Capital increase
+116
+Statement of Changes in Equity
+Change in scope of consolidation
+364
+-2,803
+2016
+2017
+Net increase/decrease in cash and cash equivalents
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+115
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Additional information on operating cash flow is provided in Notes 29 and 33.
+²No material netting has taken place in either of the years presented here.
+-288
+540
+864
+Cash provided by (used for) financing activities of discontinued operations
+Cash provided by (used for) financing activities
+263
+-1,152
+540
+639
+Effect of foreign exchange rates on cash and cash equivalents
+Combined Group Management Report
+-87
+745
+445
+-1,005
+-8
+-979
+-483
+-483
+Dividends received
+Interest received
+Interest paid
+Income taxes paid (less refunds)
+³Cash and cash equivalents at the beginning of the prior year also include holdings in Uniper, which is reported as discontinued operations.
+"Cash and cash equivalents at year-end also include holdings of €55 million in Hamburg Netz GmbH, which is reported as a disposal group.
+Supplementary information on cash flows from operating activities
+5,574
+2,763
+Cash and cash equivalents at the end of the year4
+-168
+Cash and cash equivalents from the deconsolidation of discontinued operations
+Cash and cash equivalents at the beginning of the year³
+5,190
+5,574
+Strategy and Objectives
+Under IFRS, emission rights held under national and international
+emission-rights systems for the settlement of obligations are
+reported as intangible assets. Because emission rights are not
+depleted as part of the production process, they are reported
+as intangible assets not subject to amortization. Emission rights
+are capitalized at cost at the time of acquisition.
+Combined Group Management Report
+Consolidated Financial Statements
+123
+Emission Rights
+Research and Development Costs
+Under IFRS, expenditure on research is expensed as incurred,
+while costs incurred during the development phase of new prod-
+ucts, services and technologies are to be recognized as assets
+when the general criteria for recognition specified in IAS 38 are
+present. In the 2016 and 2017 fiscal years, E.ON primarily capi-
+talized costs for internally generated software in this context.
+E.ON Stock
+Summary of Financial Highlights and Explanations
+Report of the Supervisory Board
+Intangible Assets
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest iden-
+tifiable group of assets (cash-generating unit) that the intangible
+asset may be assigned to is determined. See Note 14 for addi-
+tional information about goodwill and intangible assets.
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset subject
+to amortization to exceed the amount that would have been
+determined, net of amortization, had no impairment loss been
+recognized during the period.
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use
+and its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount and
+the recoverable amount is recognized and reported in income
+under "Depreciation, amortization and impairment charges."
+Intangible assets not subject to amortization are measured at
+cost and tested for impairment annually or more frequently if
+events or changes in circumstances indicate that such assets
+may be impaired. Moreover, such assets are reviewed annually
+to determine whether an assessment of indefinite useful life
+remains applicable.
+specified in the contracts. Useful lives and amortization meth-
+ods are subject to annual verification. Intangible assets subject
+to amortization are tested for impairment whenever events or
+changes in circumstances indicate that such assets may be
+impaired.
+Acquired intangible assets subject to amortization are classified
+as marketing-related, customer-related, contract-based, and
+technology-based. Internally generated intangible assets subject
+to amortization are related to software. Intangible assets subject
+to amortization are measured at cost and are amortized using the
+straight-line method over their expected useful lives. The useful
+lives of marketing-related intangible assets range between 5 and
+30 years, between 2 and 50 years for customer-related intan-
+gible assets and between 3 and 50 years for contract-based
+intangible assets. Technology-based intangible assets are gen-
+erally amortized over a useful life of between 3 and 33 years.
+This category includes software in particular. Contract-based
+intangible assets are amortized in accordance with the provisions
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless their
+lives are considered to be indefinite. Factors such as typical
+product life cycles and legal or similar limits on use are taken
+into account in the classification.
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed in
+subsequent reporting periods.
+Zero.
+E.ON has elected to perform the annual testing of goodwill for
+impairment at the cash-generating unit level in the fourth quarter
+of each fiscal year.
+A provision is recognized for emissions produced. The provision is
+measured at the carrying amount of the emission rights held or,
+in the case of a shortfall, at the current fair value of the emission
+rights needed.
+Any additional impairment loss that would otherwise have been
+allocated to the asset concerned must instead be allocated pro
+rata to the remaining assets of the unit.
+CEO Letter
+Property, Plant and Equipment
+Leasing transactions are classified according to the lease agree-
+ments and to the underlying risks and rewards specified therein
+in line with IAS 17, "Leases" ("IAS 17"). In addition, IFRIC 4,
+"Determining Whether an Arrangement Contains a Lease,"
+("IFRIC 4") further defines the criteria as to whether an agree-
+ment that conveys a right to use an asset meets the definition
+of a lease. Certain purchase and supply contracts in the elec-
+tricity and gas business as well as certain rights of use may be
+classified as leases if the criteria are met. E.ON is party to some
+agreements in which it is the lessor and to others in which it is
+the lessee.
+Useful Lives of Property, Plant and Equipment
+All other transactions in which E.ON is the lessee are classified
+as operating leases. Payments made under operating leases are
+generally expensed over the term of the lease.
+• Value in use, or
+Leasing transactions in which E.ON is the lessor and substantially
+all the risks and rewards incident to ownership of the leased
+property are transferred to the lessee are classified as finance
+leases. In this type of lease, E.ON records the present value of
+the minimum lease payments as a receivable. Payments by the
+lessee are apportioned between a reduction of the lease receiv-
+able and interest income. The income from such arrangements
+is recognized over the term of the lease using the effective
+interest method.
+The leased property is depreciated over its useful economic life
+or, if it is shorter, the term of the lease. The liability is subsequently
+measured using the effective interest method.
+The leased property is recognized at the beginning of the lease
+term at the lower of fair value or the present value of the mini-
+mum lease payments, and the lease liability is recognized as a
+liability in an equal amount.
+Leasing transactions in which E.ON is involved as the lessee are
+classified either as finance leases or operating leases. If E.ON
+bears substantially all of the risks and rewards incident to own-
+ership of the leased property, the transaction is classified as a
+finance lease. In such case, E.ON recognizes the leased property
+and the lease liability on its balance sheet.
+Leasing
+Government grants for costs are posted as income over the
+period in which the costs are incurred.
+Government grants are recognized at fair value if the Group
+satisfies the necessary conditions for receipt of the grant and if
+it is highly probable that the grant will be issued.
+124
+Notes
+Property, plant and equipment are tested for impairment when-
+ever events or changes in circumstances indicate that an asset
+may be impaired. In such a case, property, plant and equipment
+are tested for impairment according to the principles prescribed
+for intangible assets in IAS 36. If the reasons for previously
+2 to 30 years
+Other equipment, fixtures, furniture and
+office equipment
+2 to 50 years
+Technical equipment, plant and machinery
+Buildings
+5 to 60 years
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are rec-
+ognized in income on a straight-line basis over the associated
+asset's expected useful life.
+Government Grants
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+until its entry into service are capitalized and subsequently
+amortized alongside the related asset. In the case of a specific
+financing arrangement, the respective borrowing costs incurred
+for that particular arrangement during the period are used.
+For non-specific financing arrangements, a financing rate
+uniform within the Group of 5.47 percent was applied for 2017
+(2016: 5.58 percent). Other borrowing costs are expensed.
+Borrowing Costs
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part of
+the acquisition or production cost of the asset, or else—if rele-
+vant-recognized as a separate asset if it is probable that the
+Group will receive a future economic benefit and the cost can
+be determined reliably.
+recognized impairment losses no longer exist, such impairment
+losses are reversed and recognized in income. Such reversal
+shall not cause the carrying amount to exceed the amount that
+would have resulted had no impairment taken place during the
+preceding periods.
+Property, plant and equipment are initially measured at acquisi-
+tion or production cost, including decommissioning or resto-
+ration cost that must be capitalized, and are depreciated over the
+expected useful lives of the components, generally using the
+straight-line method, unless a different method of depreciation
+is deemed more suitable in certain exceptional cases. The useful
+lives of the major components of property, plant and equipment
+are presented below:
+• Fair value less costs to sell
+CZK
+122
+309.19 311.44
+310.33 309.83
+1.05
+1.20
+USD
+HUF
+Hungarian forint
+U.S. dollar
+3.34
+4.12
+3.71
+4.55
+TRY
+1.13
+27.03
+27.02
+25.54
+Czech crown
+Turkish lira
+9.47
+9.64
+9.55
+9.84
+SEK
+Swedish krona
+All other transactions in which E.ON is the lessor are treated as
+operating leases. E.ON retains the leased property on its balance
+sheet as an asset, and the lease payments are generally recorded
+on a straight-line basis as income over the term of the lease.
+4.49
+26.33
+1.11
+Recognition of Income
+a) Revenues
+Revenues are generated primarily from the sale of electricity
+and gas to industrial and commercial customers, to retail cus-
+tomers and to wholesale markets. Revenues earned from the
+distribution of electricity and gas and from deliveries of steam
+and heat are also recognized under revenues.
+Notes
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of the
+cash-generating unit's fair value less costs to sell and its value
+in use. In a first step, E.ON determines the recoverable amount
+of a cash-generating unit on the basis of the fair value (less
+costs to sell) using generally accepted valuation procedures. This
+is based on the medium-term planning data of the respective
+cash-generating unit. Valuation is performed using the discounted
+cash flow method. In addition, market transactions or valua-
+tions prepared by third parties for comparable assets are used
+to the extent available. If needed, a calculation of value in use is
+also performed. Unlike fair value, the value in use is calculated
+from the viewpoint of management. In accordance with IAS 36,
+"Impairment of Assets," ("IAS 36") it is further ensured that
+restructuring expenses, as well as initial and subsequent capital
+investments (where those have not yet commenced), in particu-
+lar, are not included in the valuation.
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allocated
+are generally equivalent to the operating segments, since good-
+will is reported, and considered in performance metrics for con-
+trolling, only at that level. An exception to this is the allocation
+of goodwill at Renewables, where the cash-generating units are
+defined at a subsegment level. With some exceptions, goodwill
+impairment testing is performed in euro, while the underlying
+goodwill is always carried in the functional currency.
+Goodwill is not amortized, but rather tested for impairment at
+the cash-generating unit level on at least an annual basis. Impair-
+ment tests must also be performed between these annual tests
+if events or changes in circumstances indicate that the carrying
+amount of the respective cash-generating unit might not be
+recoverable.
+Goodwill and Intangible Assets
+Goodwill
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary
+shares outstanding during the relevant period. At E.ON, the com-
+putation of diluted earnings per share is identical to that of basic
+earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares.
+Earnings per Share
+The electricity tax is levied on electricity delivered to retail
+customers and is calculated on the basis of a fixed tax rate per
+kilowatt-hour ("kWh"). This rate varies between different classes
+of customers. Electricity and energy taxes paid are deducted
+from sales revenues on the face of the income statement if those
+taxes are levied upon delivery of energy to the retail customer.
+Electricity and Energy Taxes
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+c) Dividend Income
+Interest income is recognized pro rata using the effective interest
+method.
+b) Interest Income
+buyer as contractually agreed, compensation has been contrac-
+tually established and collection of the resulting receivable
+is probable. Revenues from the sale of goods and services are
+measured at the fair value of the consideration received or
+receivable. They reflect the value of the volume supplied, including
+an estimated value of the volume supplied to customers between
+the date of the last invoice and the end of the period.
+121
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The Company generally recognizes revenue upon delivery of
+goods to customers or purchasers, or upon completion of services
+rendered. Delivery is deemed complete when the risks and
+rewards associated with ownership have been transferred to the
+Revenues include the surcharge mandated by the German
+Renewable Energy Sources Act and are presented net of sales
+taxes, returns, rebates and discounts, and after elimination of
+intragroup sales.
+If the impairment thus identified exceeds the goodwill allocated
+to the affected cash-generating unit, the remaining assets of
+the unit must be written down in proportion to their carrying
+amounts. Individual assets may be written down only if their
+respective carrying amounts do not fall below the highest of the
+following values as a result:
+Financial Instruments
+or market prices at the time of acquisition in the case of market-
+able securities, for example, and in the case of land, buildings and
+major technical equipment, generally using independent expert
+reports that have been prepared by third parties. If exchange or
+market prices are unavailable for consideration, fair values are
+derived from market prices for comparable assets or comparable
+transactions. If these values are not directly observable, fair
+value is determined using appropriate valuation methods. In such
+cases, E.ON determines fair value using the discounted cash
+flow method by discounting estimated future cash flows by a
+weighted-average cost of capital. Estimated cash flows are
+consistent with the internal mid-term planning data for the next
+three years, followed by two additional years of cash flow pro-
+jections, which are extrapolated through the end of an asset's
+useful life using a growth rate based on industry and internal
+projections. The discount rate reflects the specific risks inherent
+in the acquired activities.
+Non-derivative financial instruments are recognized at fair
+value, including transaction costs, on the settlement date when
+acquired. IFRS 13, "Fair Value Measurement," ("IFRS 13") defines
+fair value as the price that would be received to sell an asset
+or paid to transfer a liability in an orderly transaction between
+market participants on the measurement date (exit price).
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside
+the European Monetary Union:
+Currencies
+€1, rate at
+year-end
+€1, annual
+average rate
+ISO
+Code
+2017
+2016
+2017
+2016
+British pound
+Danish krone
+financial instruments classified as available for sale, the foreign
+currency translation effects are recognized in equity as a compo-
+nent of other comprehensive income.
+GBP
+0.86
+0.88
+0.82
+DKK
+7.44
+7.43
+7.44
+7.35
+Romanian leu
+RON
+4.66
+0.89
+Foreign currency translation effects that are attributable to the
+cost of monetary financial instruments classified as available for
+sale are recognized in income. In the case of fair-value adjust-
+ments of monetary financial instruments and for non-monetary
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than the
+euro are translated using the exchange rates applicable on the
+balance sheet date, while items of the statements of income
+are translated using annual average exchange rates. Material
+transactions of foreign subsidiaries occurring during the fiscal
+year are translated in the financial statements using the exchange
+rate at the date of the transaction. Differences arising from
+the translation of assets and liabilities compared with the corre-
+sponding translation of the prior year, as well as exchange rate
+differences between the income statement and the balance
+sheet, are reported separately in equity as a component of other
+comprehensive income.
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the trans-
+action. At each balance sheet date monetary foreign currency
+items are adjusted to the exchange rate on the reporting date;
+any gains and losses resulting from fluctuations in the relevant
+currencies are recognized in net income and reported as other
+operating income and other operating expenses, respectively.
+Gains and losses from the translation of non-derivative financial
+instruments used in hedges of net investments in foreign opera-
+tions are recognized in equity as a component of other compre-
+hensive income. The ineffective portion of the hedging instru-
+ment is immediately recognized in net income.
+4.57
+Business combinations are accounted for by applying the pur-
+chase method, whereby the purchase price is offset against
+the proportional share in the acquired company's net assets. In
+doing so, the values at the acquisition date that corresponds to
+the date at which control of the acquired company was attained
+are used as a basis. The acquiree's identifiable assets, liabilities
+and contingent liabilities are generally recognized at their fair
+values irrespective of the extent attributable to non-controlling
+interests. The fair values are determined using published exchange
+Business Combinations
+A joint operation exists when E.ON and the other investors directly
+control this activity, but unlike in the case of a joint venture they
+do not have a claim to the changes in net assets from the opera-
+tion, but instead have direct rights to individual assets or direct
+obligations with respect to individual liabilities in connection
+with the operation. In a joint operation, assets and liabilities, as
+well as revenues and expenses, are recognized pro rata according
+to the rights and obligations attributable to E.ON.
+Joint Operations
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation
+process on a pro-rata basis if they are material.
+Joint Ventures
+The financial statements of equity interests accounted for using
+the equity method are generally prepared using accounting that
+is uniform within the Group.
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recover-
+able amount. If the carrying amount exceeds the recoverable
+amount, the carrying amount is adjusted for this difference. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed accordingly.
+119
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The
+choice of method can be made on a case-by-case basis. The
+partial goodwill method is generally used within the E.ON Group.
+Transactions with holders of non-controlling interests are treated
+in the same way as transactions with investors. Should the
+acquisition of additional shares in a subsidiary result in a differ-
+ence between the cost of purchasing the shares and the carrying
+amounts of the non-controlling interests acquired, that difference
+must be fully recognized in equity.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do not
+coincide with a loss of control.
+Intangible assets must be recognized separately if they are
+clearly separable or if their recognition arises from a contractual
+or other legal right. Provisions for restructuring measures may
+not be recorded in a purchase price allocation. If the purchase
+Notes
+120
+price paid exceeds the proportional share in the net assets at
+the time of acquisition, the positive difference is recognized as
+goodwill. No goodwill is recognized for positive differences
+attributable to non-controlling interests. A negative difference
+is recognized in net income.
+Foreign Currency Translation
+Included in gains and losses from the remeasurements of the
+net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between esti-
+mated and actual variations in underlying assumptions about
+demographic and financial variables. Additionally included is the
+difference between the actual return on plan assets and the
+expected interest income on plan assets included in the net
+interest result. Remeasurements effects are recognized in full in
+the period in which they occur and are not reported within the
+Consolidated Statements of Income, but are instead recognized
+within the Statements of Recognized Income and Expenses as
+part of equity.
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits" is based on actuarial computations
+using the projected unit credit method, with actuarial valuations
+performed at year-end. The valuation encompasses both pension
+obligations and pension entitlements that are known on the
+reporting date and economic trend assumptions such as assump-
+tions on wage and salary growth rates and pension increase
+rates, among others, that are made in order to reflect realistic
+expectations, as well as variables specific to reporting dates
+such as discount rates, for example.
+In all cases, these are commitments of the Company which pro-
+vide for cash compensation based on the share price performance
+at the end of the term. The compensation expense is recognized
+in the income statement pro rata over the vesting period.
+In fiscal year 2017, virtual shares were granted for the first time
+to members of the Management Board of E.ON SE and certain
+E.ON Group executives under the new E.ON Performance Plan.
+The E.ON Performance Plan uses a fair value determined by an
+external service provider using a Monte Carlo simulation.
+Inventories
+Primary and derivative financial instruments are netted on the
+balance sheet if E.ON has both an unconditional right—even in
+the event of the counterparty's insolvency—and the intention to
+settle offsetting positions simultaneously and/or on a net basis.
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualitative
+disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments is
+provided in Notes 30 and 31.
+Contracts that are entered into for purposes of receiving or deliv-
+ering non-financial items in accordance with E.ON's anticipated
+procurement, sale or use requirements, and held as such, can
+be classified as own-use contracts. They are not accounted for as
+derivative financial instruments at fair value in accordance with
+IAS 39, but as open transactions subject to the rules of IAS 37.
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of the
+contract are not recognized in income. They are instead deferred
+and recognized in income systematically over the term of the
+derivative. An exception to the accrual principle applies if unre-
+alized gains and losses from the initial measurement are verified
+by quoted market prices, observable prices of other current
+market transactions or other observable data supporting the val-
+uation technique. In this case the gains and losses are recognized
+in income.
+Changes in fair value of derivative instruments that must be
+recognized in income are presented as other operating income
+or expenses. Gains and losses from interest-rate derivatives are
+netted for each contract and included in interest income. Cer-
+tain realized amounts are, if related to the sale of products or
+services, also included in sales or cost of materials.
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+If a derivative instrument qualifies as a cash flow hedge under
+IAS 39, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the period
+or periods during which the cash flows of the transaction being
+hedged affect income. The hedging result is reclassified into
+income immediately if it becomes probable that the hedged under-
+lying transaction will no longer occur. For hedging instruments
+used to establish cash flow hedges, the change in fair value of
+the ineffective portion is recognized immediately in the income
+statement to the extent required. To hedge the foreign currency
+risk arising from the Company's net investment in foreign oper-
+ations, derivative as well as non-derivative financial instruments
+are used. Gains or losses due to changes in fair value and from
+foreign currency translation are recognized within equity, as a
+component of other comprehensive income, under currency
+translation adjustments. E.ON currently uses hedges in the
+framework of cashflow hedges and hedges of a net investment.
+126
+Notes
+E.ON has designated some of these derivatives as part of a
+hedging relationship. IAS 39 sets requirements for the desig-
+nation and documentation of hedging relationships, the hedging
+strategy, as well as ongoing retrospective and prospective mea-
+surement of effectiveness in order to qualify for hedge account-
+ing. The Company does not exclude any component of derivative
+gains and losses from the measurement of hedge effectiveness.
+Hedge accounting is considered to be appropriate if the assess-
+ment of hedge effectiveness indicates that the change in fair
+value of the designated hedging instrument is 80 to 125 percent
+effective at offsetting the change in fair value due to the hedged
+risk of the hedged item or transaction.
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit risk
+(debt value adjustment) and the credit risk of the corresponding
+counterparty (credit value adjustment). The counterparty risks
+thus determined are allocated to the individual financial instru-
+ments by applying the relative fair value method on a net basis.
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps and options. In commodities, the instruments used pri-
+marily include physically and financially settled forwards and
+options related to electricity, gas and oil.
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the balance sheet
+date at initial recognition and in subsequent periods. IAS 39
+requires that they be categorized as held for trading as long as
+they are not a component of a hedge accounting relationship.
+Gains and losses from changes in fair value are immediately
+recognized in net income.
+Non-derivative financial liabilities (including trade payables)
+within the scope of IAS 39 are measured at amortized cost, using
+the effective interest method. Initial measurement takes place
+at fair value, with transaction costs included in the measurement.
+In subsequent periods, the amortization and accretion of any
+premium or discount is included in financial results.
+Loans and receivables (including trade receivables) are non-
+derivative financial assets with fixed or determinable payments
+that are not traded in an active market. Loans and receivables
+are reported on the balance sheet under "Receivables and other
+assets." They are subsequently measured at amortized cost.
+Valuation allowances are provided for identifiable individual
+risks. Objective indications may be present, for example, in the
+case of default on payments.
+related deferred taxes, reported as a component of equity (other
+comprehensive income) until realized. Realized gains and losses
+are determined by analyzing each transaction individually. If
+there is objective evidence of impairment, any changes in value
+previously recognized in other comprehensive income are
+instead recognized in financial results. When estimating a possible
+impairment loss, E.ON takes into consideration all available
+information, such as market conditions and the length and extent
+of the impairment. If the value on the balance sheet date of the
+equity instruments classified as available for sale and of similar
+long-term investments is more than 20 percent below their cost,
+or if the value has been more than 10 percent below its cost for
+a period of more than twelve months, this constitutes objective
+evidence of impairment. For debt instruments, objective evidence
+of impairment is generally deemed present if one of the three
+major rating agencies has downgraded its rating from investment-
+grade to non-investment-grade. Reversals of impairment losses
+relating to equity instruments are recognized exclusively in equity,
+while reversals relating to debt instruments are recognized
+entirely in income.
+125
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Available-for-sale securities are non-derivative financial assets
+that have been allocated either to this category or to none of
+the other categories mentioned above. They are allocated to non-
+current assets as long as there is no intention to sell them within
+twelve months after the balance sheet date, and as long as the
+asset does not mature within that same period. Securities cate-
+gorized as available for sale are carried at fair value on a continuing
+basis, with any resulting unrealized gains and losses, net of
+Non-derivative financial instruments, e.g. unconsolidated
+equity investments and securities, are measured in accordance
+with IAS 39, "Financial Instruments: Recognition and Measure-
+ment" ("IAS 39"). E.ON categorizes financial assets as held for
+trading, available for sale, or as loans and receivables. Manage-
+ment determines the categorization of the financial assets at
+initial recognition.
+The Company measures inventories at the lower of acquisition
+or production cost and net realizable value. The cost of raw
+materials, finished products and goods purchased for resale is
+determined based on the average cost method. In addition to
+production materials and wages, production costs include mate-
+rial and production overheads based on normal capacity. The
+costs of general administration are not capitalized. Inventory
+risks resulting from excess and obsolescence are provided for
+using appropriate valuation allowances, whereby inventories are
+written down to net realizable value.
+Non-Derivative Financial Instruments
+Receivables and Other Assets
+CEO Letter
+In 2015 and 2016, virtual shares were granted exclusively to
+members of the Management Board of E.ON SE in the frame-
+work of base and performance matching in accordance with
+the share matching plan. Executives who in previous years had
+participated in the share matching plan were granted a multi-
+year bonus extending over a term of four years, whose payout
+amount depends on the performance of the E.ON share up to
+the payment date, instead of base and performance matching.
+The members of the Management Board of E.ON SE were
+granted virtual shares under the E.ON Share Matching Plan for
+the last time in 2017.
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2"). From 2013 to 2016, share-based payments were
+based on the E.ON Share Matching Plan. Under this plan, the
+number of allocated rights was governed by the development of
+the financial measure ROCE (ROACE until 2015).
+Share-Based Payment
+If E.ON SE or a Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attributable
+additional costs (net after income taxes), is deducted from
+E.ON SE's equity until the shares are retired, distributed or
+resold. If such treasury shares are subsequently distributed or
+sold, the consideration received, net of any directly attributable
+additional transaction costs and associated income taxes, is
+recognized in equity.
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships, for
+example), such termination rights require the reclassification of
+non-controlling interests from equity into liabilities under IAS 32.
+The liability is recognized at the present value of the expected
+settlement amount irrespective of the probability of termination.
+Changes in the value of the liability are reported within other
+operating income. Accretion of the share of the results of the
+non-controlling shareholders' share in net income is recognized
+in Net interest income/expense.
+128
+Notes
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right to
+require E.ON to purchase their shares on specified conditions.
+None of the contractual obligations has led to the transfer of
+substantially all of the risk and rewards to E.ON at the time of
+entering into the contract. In such a case, IAS 32, "Financial
+Instruments: Presentation," ("IAS 32") requires that a liability be
+recognized at the present value of the probable future exercise
+price. This amount is reclassified from a separate component
+within non-controlling interests and reported separately as a
+liability. The reclassification occurs irrespective of the probability
+of exercise. The accretion of the liability is recognized as interest
+expense. If a purchase commitment expires unexercised, the
+liability reverts to non-controlling interests. Any remaining
+difference between liabilities and non-controlling interests is
+recognized directly in retained earnings.
+IFRS defines equity as the residual interest in the Group's assets
+after deducting all liabilities. Therefore, equity is the net amount
+of all recognized assets and liabilities.
+Equity Instruments
+The income and losses resulting from the measurement of
+components held for sale as well as the gains and losses arising
+from the disposal of discontinued operations, are reported sep-
+arately on the face of the income statement under income/loss
+from discontinued operations, net, as is the income from the
+ordinary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance sheet.
+The cash flows of discontinued operations are reported sepa-
+rately in the cash flow statement, with prior-year figures adjusted
+accordingly. However, there is no reclassification of prior-year
+balance sheet line items attributable to discontinued operations.
+Non-current assets that are held for sale either individually or
+collectively as part of a disposal group, or that belong to a dis-
+continued operation, are no longer depreciated. They are instead
+accounted for at the lower of the carrying amount and the fair
+value less any remaining costs to sell. If this value is less than
+the carrying amount, an impairment loss is recognized.
+Discontinued operations are components of an entity that are
+either held for sale or have already been sold and can be clearly
+distinguished from other corporate operations, both operationally
+and for financial reporting purposes. Additionally, the component
+classified as a discontinued operation must represent a major
+business line or a specific geographic business segment of the
+Group.
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually
+taking place.
+Assets Held for Sale and Liabilities Associated with Assets
+Held for Sale and Discontinued Operations
+Restricted cash with a remaining maturity in excess of twelve
+months is classified as financial receivables and other financial
+assets.
+Liquid funds include current available-for-sale securities, checks,
+cash on hand and bank balances. Bank balances and available-
+for-sale securities with an original maturity of more than three
+months are recognized under securities and fixed-term deposits.
+Liquid funds with an original maturity of less than three months
+are considered to be cash and cash equivalents, unless they are
+restricted.
+Liquid Funds
+127
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Receivables and other assets are initially measured at fair value,
+which generally approximates nominal value. They are subse-
+quently measured at amortized cost, using the effective interest
+method. Valuation allowances, included in the reported net
+carrying amount, are provided for identifiable individual risks. If
+the loss of a certain part of the receivables is probable, valuation
+allowances are provided to cover the expected loss.
+4.54
+CEO Letter
+The remaining 46.65-percent stake in Uniper has been reclassi-
+fied as an associate since control was lost, and was accounted
+for in the consolidated financial statements using the equity
+method until reclassification at the end of September 2017.
+• Amendments to IFRS 2 "Classification and Measurement of
+Share-Based Payment Transactions," published in June 2016,
+not yet transposed into European law, expected first-time
+application in fiscal year 2018
+Amendments to IFRS 10 and IAS 28 "Sale or Contribution of
+Assets between an Investor and its Associate or Joint Ven-
+ture," published in September 2014, first-time application
+postponed indefinitely
+•
+Additional standards and interpretations have been adopted in
+addition to the new standards outlined in detail above, but no
+material impact on E.ON's consolidated financial statements is
+expected:
+Additional Standards and Interpretations Not
+Yet Applicable
+134
+Notes
+The revised presentation of leasing expenses arising from
+operating leases will result in improved cash flows from
+operating activities and a deterioration in cash flows from
+financing activities.
+In the income statement, depreciation on rights of use and
+interest expenses arising from accrued interest on leasing
+liabilities will in the future be recorded in the income state-
+ment instead of other operating expenses (including
+expenses for rentals and leases). This will lead to improved
+earnings before interest and taxes (EBIT).
+The initial application of the standard will lead to a signifi-
+cant increase in both property, plant and equipment
+(accounting for the rights of use) and financial liabilities (rec-
+ognition of the corresponding lease liabilities) in the balance
+sheet, particularly taking into account the financial obliga-
+tions arising from operating leases reported under Note 27.
+As a result of this change in the balance sheet, the equity
+ratio of the Group will decline and net financial debt will
+increase accordingly.
+•
+.
+The qualitative effects of the introduction of IFRS 16 on the
+individual components of the consolidated financial statements
+and the presentation of the net assets, financial position and
+results of operations of the Group can be described as follows:
+E.ON has set up a Group-wide project for the implementation of
+IFRS 16. Within the scope of this project, existing leasing
+arrangements of all business units are currently being analyzed
+with regard to IFRS 16 criteria.
+•
+this standard are low-value assets and leasing arrangements
+with a term of less than twelve months if the corresponding
+options are exercised. The lessor will continue to differentiate
+between finance leases and operating leases. IFRS 16 also
+contains a number of other provisions relating to recognition,
+disclosures and sale and leaseback transactions. The applica-
+tion of IFRS 16 is required for fiscal years beginning on or
+after January 1, 2019. It has been adopted by the EU into
+European law.
+IFRS 16, "Leases"
+The mandatory capitalization of directly attributable costs of
+obtaining a contract that are expected to be recovered over
+the term of the contract.
+The divergence of cash flows and revenue recognition that
+results in the recognition of contractual assets or of contrac-
+tual liabilities.
+•
+•
+Other conversion effects from IFRS 15, the cumulative effects
+of which are immaterial, also apply:
+The amended revision criteria for principal/agent relation-
+ships will result in a material change in the income statement
+for certain pass-throughs for the promotion of Renewable
+Energies. These pass-throughs are no longer recognized as
+sales revenue with an offsetting entry in cost of materials.
+This means that sales and cost of materials will decrease
+without resulting in any earnings effects. The cumulative
+effect is estimated at €4 billion to €6 billion.
+•
+in comparison with the previous revenue recognition:
+In May 2014, the IASB published IFRS 15, "Revenue from
+Contracts with Customers," which completely revises the rules
+for revenue recognition. IFRS 15 replaces the current standards
+and interpretations IAS 11, "Construction Contracts," IAS 18,
+"Revenue," IFRIC 13, "Customer Loyalty Programmes," IFRIC 15,
+"Agreements for the Construction of Real Estate," IFRIC 18,
+"Transfers of Assets from Customers," and SIC-31, "Revenue-
+Barter Transactions Involving Advertising Services." A 5-stage
+model will be used to determine in what amount and at what
+time and for how long revenue is to be recognized. IFRS 15 also
+contains additional disclosure requirements. IFRS 15, which
+has already been adopted into European law, must be applied
+for fiscal years beginning on or after January 1, 2018. The
+E.ON Group has opted for modified retrospective initial appli-
+cation. Within the framework of the project for the implementa-
+tion of IFRS 15, the following significant effect was determined
+IFRS 15, "Revenue from Contracts with Customers"
+133
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+In January 2016, the IASB published accounting standard
+IFRS 16 "Leases" which replaces the previous IAS 17 and
+IFRIC 4 (determining whether an arrangement contains a
+lease). In particular, the new standard amends the accounting
+treatment of leases with the lessee. In the future, the lessee
+will regularly be required to capitalize an asset for the right of
+use in connection with the leasing arrangement and recognize
+a corresponding leasing liability as a liability. Excluded from
+Combined Group Management Report
+Amendments to IFRS 4 "Applying IFRS 9 with IFRS 4," pub-
+lished in September 2016, not yet transposed into European
+law, expected first-time application in fiscal year 2018
+Amendments to IAS 40 "Transfers of Investment Property,"
+published in December 2016, not yet transposed into Euro-
+pean law, expected first-time application in fiscal year 2018
+Consolidated companies
+Disposals/Mergers
+80
+49
+31
+9
+8
+1
+297
+190
+107
+Total
+Foreign
+Domestic
+Omnibus Standard to Amend Multiple International Financial
+Reporting Standards (2014-2016 cycle), publication in
+December 2016, transposition into European law completed,
+first-time application for amendments to IFRS 1 and IAS 28
+in fiscal year 2018
+Additions
+Scope of Consolidation
+The number of consolidated companies changed as follows in
+2017:
+(3) Scope of Consolidation
+Omnibus Standard to Amend Multiple International Finan-
+cial Reporting Standards (2015-2017 Cycle), published in
+December 2017, not yet transposed into European law,
+expected first-time application for the amendment to IFRS 3,
+IFRS 11, IAS 12 and IAS 23 in fiscal year 2019
+Amendments to IFRS 9 "Prepayment Features with Negative
+Compensation" published in January 2017, not yet trans-
+posed into European law, expected first-time application in
+fiscal year 2019
+in October 2017, not yet transposed into European law,
+expected first-time application in fiscal year 2019
+Amendments to IAS 28 "Investments in associates" published
+•
+•
+•
+IFRIC 23 "Uncertainty over Income Tax Treatments" pub-
+lished in June 2017, not yet transposed into European law,
+expected first-time application in fiscal year 2019
+IFRS 17 "Insurance Contracts," published in May 2017, not
+yet transposed into European law, expected first-time appli-
+cation in fiscal year 2021
+•
+• IFRIC 22 "Foreign Currency Transactions and Advance Con-
+sideration," published in December 2016, not yet transposed
+into European law, expected first-time application in fiscal
+year 2018
+Consolidated companies
+as of January 1, 2016
+as of December 31, 2016
+Additions
+Strategy and Objectives
+Report of the Supervisory Board
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable
+for taxable income in the years in which temporary differences
+are expected to be recovered or settled. The effect on deferred
+Deferred tax liabilities caused by temporary differences associ-
+ated with investments in affiliated and associated companies are
+recognized unless the timing of the reversal of such temporary
+differences can be controlled within the Group and it is probable
+that, owing to this control, the differences will in fact not be
+reversed in the foreseeable future.
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are rec-
+ognized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that will
+result in taxable or deductible amounts when taxable income is
+calculated for future periods, unless those differences are the
+result of the initial recognition of an asset or liability in a trans-
+action other than a business combination that, at the time of
+the transaction, affects neither accounting nor taxable profit/
+loss. Uncertain tax positions are recognized at their most likely
+value. IAS 12 further requires that deferred tax assets be recog-
+nized for unused tax loss carryforwards and unused tax credits.
+Deferred tax assets are recognized to the extent that it is proba-
+ble that taxable profit will be available against which the
+deductible temporary differences and unused tax losses can be
+utilized. Each of the corporate entities is assessed individually
+with regard to the probability of a positive tax result in future
+years. The planning horizon is 3 to 5 years in this context. Any
+existing history of losses is incorporated in this assessment. For
+those tax assets to which these assumptions do not apply, the
+value of the deferred tax assets is reduced.
+Income Taxes
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan has
+been decided on by management and publicly announced or
+communicated to the employees or their representatives. Only
+those expenses that are directly attributable to the restructuring
+measures are used in measuring the amount of the provision.
+Expenses associated with the future operation are not taken
+into consideration.
+A more detailed description is not provided for certain contingent
+liabilities and contingent receivables, particularly in connection
+with pending litigation, as this information could influence
+further proceedings.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of resources
+embodying economic benefits is not probable or where the
+amount of the obligation cannot be measured with sufficient
+reliability. Contingent liabilities were not recognized on the
+balance sheet.
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+are recognized at the lower of the excess obligation upon per-
+formance under the contract and any potential penalties or
+compensation arising in the event of non-performance. Obliga-
+tions under an open contractual relationship are determined
+from a customer perspective.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated proba-
+bilities cannot be determined reliably.
+The estimates for nuclear decommissioning provisions are
+derived from studies, cost estimates, legally binding civil agree-
+ments and legal information. A material element in the esti-
+mates are the real interest rates applied (the applied discount
+rate, less the cost increase rate). The impact on consolidated net
+income depends on the level of the corresponding adjustment
+posted to property, plant and equipment.
+130
+Strategy and Objectives
+Notes
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period
+of their occurrence at their discounted settlement amounts, pro-
+vided that the obligation can be reliably estimated. The carrying
+amounts of the respective property, plant and equipment are
+increased by the same amounts. In subsequent periods, capital-
+ized asset retirement costs are amortized over the expected
+remaining useful lives of the assets, and the provision is accreted
+to its present value on an annual basis.
+expected settlement amounts if the interest rate effect (the differ-
+ence between present value and repayment amount) resulting
+from discounting is material; future cost increases that are
+foreseeable and likely to occur on the balance sheet date must
+also be included in the measurement. Long-term obligations
+are generally discounted at the market interest rate applicable
+as of the respective balance sheet date, provided that it is not
+negative. The accretion amounts and the effects of changes in
+interest rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually certain
+to be collected is capitalized as a separate asset. No offsetting
+within provisions is permitted. Advance payments remitted are
+deducted from the provisions.
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation towards
+third parties as a result of a past event, it is probable that E.ON
+will be required to settle the obligation, and a reliable estimate
+can be made of the amount of the obligation. The provision is
+recognized at the expected settlement amount. Long-term obli-
+gations are reported as liabilities at the present value of their
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+The amount reported on the balance sheet represents the pres-
+ent value of the defined benefit obligations reduced by the fair
+value of plan assets. If a net asset position arises from this cal-
+culation, the amount is limited to the present value of available
+refunds and the reduction in future contributions and to the
+benefit from prepayments of minimum funding requirements.
+Such an asset position is recognized as an operating receivable.
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fiscal
+year is reported under personnel costs; the net interest on the
+net liability or asset from defined benefit pension plans deter-
+mined based on the discount rate applicable at the start of the
+fiscal year is reported under financial results.
+129
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or the
+scope of the relevant obligation, and also as a result of the reg-
+ular adjustment of the discount rate to current market interest
+rates. The adjustment of provisions for the decommissioning
+and restoration of property, plant and equipment for changes
+to estimates is generally recognized by way of a corresponding
+adjustment to these assets, with no effect on income. If the
+property, plant and equipment concerned have already been
+fully depreciated, changes to estimates are recognized within
+the income statement.
+E.ON Stock
+Combined Group Management Report
+Summary of Financial Highlights and Explanations
+CEO Letter
+In July 2014, the IASB published the new standard IFRS 9,
+"Financial Instruments," which must be applied for fiscal years
+beginning on or after January 1, 2018. The changes to the new
+standard can be divided into three phases. E.ON expects higher
+income volatility from the future amendments in phase I "Clas-
+sification of Financial Instruments" since equity instruments
+and debt instruments whose contractual cash flows do not
+consist exclusively of interest and payments will be classified as
+at fair value through profit or loss. The resulting conversion
+effect at the time of initial application amounts to approximately
+€0.1 to 0.2 billion and is recognized as retained earnings in
+equity and not in profit or loss. Phase II of the project addresses
+impairment of financial assets. The new impairment model,
+which, in contrast to the rules under IAS 39, takes account not
+only of losses that have already been incurred but also expected
+losses (expected loss model), will make more use of forward-
+looking information and take losses into account at an earlier
+stage. The new model results in the subsequent recognition of
+an impairment of financial assets that is expected to amount to
+approximately €0.1 billion, which is recognized on the 2018
+balance sheet as retained earnings. The third phase of the project
+addresses rules for hedge accounting. The objective is to form a
+better connection between corporate risk management strate-
+gies, the reasons for entering into a hedging transaction and the
+resulting effects. In particular, the IASB intends to simplify the
+requirements for measuring effectiveness, and thus the eligibility
+conditions for hedge accounting. E.ON does not anticipate any
+material impact from this.
+IFRS 9, "Financial Instruments"
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. These standards and interpreta-
+tions are not yet being applied by E.ON in the 2017 fiscal year
+because their application is not yet mandatory or because adoption
+by the EU remains outstanding at this time for some of them.
+these amendments into European law. The amendments to
+IFRS 12 are to be applied retrospectively for fiscal years begin-
+ning on or after January 1, 2017. They will result in no material
+changes for E.ON affecting its Consolidated Financial State-
+ments. Consequently, the amendments for IFRS 1 and IAS 28
+shall be applied for fiscal years beginning on or after January 1,
+2018.
+Amendments to IFRS 12-Disclosure of Interests in Other
+Entities, from the Omnibus Standard to Amend Multiple Inter-
+national Financial Reporting Standards (2014-2016 Cycle)
+In the context of its Annual Improvements Process, the IAS revises
+existing standards. In December 2016, the IASB published a
+corresponding omnibus standard. It contains changes to IFRS
+and their associated Bases for Conclusions. The revisions affect
+standards IFRS 1, IFRS 12 and IAS 28. The EU has adopted
+In January 2016, the IASB published amendments to IAS 12.
+The amendments to the recognition of deferred tax assets for
+unrealized losses clarify the following issues: Unrealized losses
+on debt instruments measured at fair value but whose tax basis
+is acquisition cost result in deductible temporary differences.
+This applies regardless of whether the holder expects to recover
+the asset's carrying amount by holding it to maturity and col-
+lecting all contractual payments or whether the holder intends
+to sell the asset. The amendment has no material impact on
+E.ON's 2017 Consolidated Financial Statements.
+Amendments to IAS 12-Recognition of Deferred Tax Assets
+for Unrealized Losses
+In January 2016, the IASB published amendments to IAS 7.
+This pronouncement amends IAS 7 in respect of the disclosures
+relating to changes in liabilities arising from financing activities.
+The following changes must be recognized: changes due to
+cash flows from financing activities; changes due to the
+assumption or loss of control of subsidiaries or other business
+units; the impact of changes in exchange rates; changes in fair
+values; and other changes. E.ON complies with its new disclo-
+sure requirement by presenting a reconciliation of the opening
+balance sheet amounts to the closing balance sheet amounts
+for liabilities from financing activities in Note 26 to the consoli-
+dated financial statements for 2017.
+Amendments to IAS 7-Statement of Cash Flows
+The International Accounting Standards Board ("IASB") and the
+IFRS Interpretations Committee ("IFRS IC") have issued the
+following standards and interpretations that have been adopted
+by the EU into European law and whose application is mandatory
+in the reporting period from January 1, 2017, through Decem-
+ber 31, 2017:
+Standards and Interpretations Applicable
+in 2017
+(2) New Standards and Interpretations
+132
+Consolidated Financial Statements
+Notes
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets, the
+accounting treatment of provisions for pensions and miscella-
+neous provisions, for impairment testing in accordance with
+IAS 36, as well as for the determination of the fair value of certain
+financial instruments.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis. Adjustments to accounting estimates are recog-
+nized in the period in which the estimate is revised if the change
+affects only that period, or in the period of the revision and sub-
+sequent periods if both current and future periods are affected.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions that
+may both influence the application of accounting principles
+within the Group and affect the measurement and presentation
+of reported figures. Estimates are based on past experience and
+on current knowledge obtained on the transactions to be
+reported. Actual amounts may differ from these estimates.
+The Consolidated Statements of Income are classified using the
+nature of expense method, which is also applied for internal
+purposes.
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well as
+liabilities that are due to be settled within one year of the report-
+ing date are generally classified as current.
+Structure of the Consolidated Balance Sheets and Statements
+of Income
+In accordance with the so-called management approach required
+by IFRS 8, "Operating Segments," ("IFRS 8") the internal report-
+ing organization used by management for making decisions on
+operating matters is used to identify the Company's reportable
+segments. The internal performance measure used as the seg-
+ment result is EBIT adjusted to exclude certain non-operating
+effects (see Note 33).
+Segment Information
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7") the
+Consolidated Statements of Cash Flows are classified in cash
+flows from operating, investing and financing activities. Cash
+flows from discontinued operations are reported separately in
+the Consolidated Statement of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions and
+disposals of companies are reported net of any cash and cash
+equivalents acquired (disposed of) under investing activities if
+the respective acquisition or disposal results in a gain or loss of
+control. In the case of acquisitions and disposals that do not,
+respectively, result in a gain or loss of control, the corresponding
+cash flows are reported under financing activities. The impact on
+cash and cash equivalents of valuation changes due to exchange
+rate fluctuations is disclosed separately.
+Consolidated Statements of Cash Flows
+Note 10 shows the major temporary differences so recorded.
+Deferred taxes for the E.ON Group's major German companies
+are-unchanged from the previous year-calculated using an
+aggregate tax rate of 30 percent. This tax rate includes, in addi-
+tion to the 15 percent corporate income tax, the solidarity
+surcharge of 5.5 percent on the corporate tax and the average
+trade tax rate of 14 percent. Foreign subsidiaries use applicable
+national tax rates.
+tax assets and liabilities of changes in tax rates and tax law is
+generally recognized in net income. Equity is adjusted for
+deferred taxes that had previously been recognized directly in
+equity.
+131
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+77
+Standards and Interpretations Not Yet
+Applicable in 2017
+226
+Enovos International S.A.
+In December 2015, E.ON signed an agreement to sell its
+10-percent shareholding in Enovos International S.A., Esch-sur-
+Alzette, Luxembourg-joining with RWE AG ("RWE"), Essen,
+Germany, which also sold its stake-to a bidder consortium led
+by the Grand Duchy of Luxembourg and the independent private
+investment company Ardian, Paris, France. The carrying amount
+of the 10-percent shareholding amounted to approximately
+€0.1 billion as of December 31, 2015. The transaction closed in
+the first quarter of 2016. The parties agreed not to disclose the
+purchase price.
+AS Latvijas Gāze
+On December 22, 2015, E.ON entered into an agreement to sell
+28.974 percent of the shares of its associated shareholding
+AS Latvijas Gāze, Riga, Latvia, to the Luxembourg company
+Marguerite Gas I S.à r.l. The carrying amount of the equity inter-
+est amounted to approximately €0.1 billion as of December 31,
+2015. The transaction, which closed in January 2016 at a sale
+price of approximately €0.1 billion, resulted in a minimal gain on
+disposal.
+Grid Connection Infrastructure for the Humber Gateway
+Wind Farm
+Following the construction and entry into service of the Humber
+Gateway wind farm in the U.K. North Sea, E.ON was required
+by regulation to sell to an independent third party the associated
+grid connection infrastructure currently held by E.ON Climate &
+Renewables UK Humber Wind Ltd., Coventry, United Kingdom
+("Humber Wind"). The sale to Balfour Beatty Equitix Consortium
+(BBEC) was completed in September 2016. The sales price and
+carrying amount totaled approximately €0.2 billion each.
+Arkona Offshore Wind Farm Partnership
+E.ON has made the decision to build the Arkona offshore wind
+farm project in the Baltic Sea. The Norwegian energy company
+Statoil has acquired a 50-percent interest in the project and
+is involved from the start. E.ON is responsible for building and
+operating the wind farm. The contract on the sale of the 50-per-
+cent stake was signed in the first quarter of 2016, and the
+transaction closed in April 2016. The transaction resulted in
+a slight gain on disposal.
+Results from Discontinued Operations
+Results from discontinued operations in 2016 are primarily
+determined by the Uniper Group, with after-tax results of
+-€14.1 billion. In addition, the purchase price adjustment related
+to the sale of the Spanish and Portuguese activities made a
+significant contribution of approximately €0.2 billion to after-
+tax results from discontinued operations.
+Notes
+138
+(5) Revenues
+Revenues are generally recognized upon delivery of goods to pur-
+chasers or customers, or upon completion of services rendered.
+Delivery is considered to have occurred when the risks and
+rewards associated with ownership have been transferred to the
+buyer, compensation has been contractually established and
+collection of the resulting receivable is probable.
+In January 2016, E.ON signed an agreement to sell its British E&P
+subsidiary E.ON E&P UK Limited, London, United Kingdom,
+to Premier Oil plc, London, United Kingdom. The base sale price
+as of the January 1, 2015, effective date was approximately
+€0.1 billion ($0.12 billion). In addition, E.ON retained liquid
+funds that existed in the company as of the effective date, and
+also received other adjustments that will result in the transac-
+tion producing a net cash inflow of approximately €0.3 billion. As
+the purchase price for the British E&P business became more cer-
+tain in the fourth quarter of 2015, a charge was recognized on
+its goodwill in the amount of approximately €0.1 billion. Held as
+a disposal group in the former Exploration & Production global
+unit, the major asset and liability items of the British E&P busi-
+ness as of March 31, 2016, were goodwill (€0.1 billion) and
+other assets (€0.7 billion), as well as liabilities (€0.6 billion). The
+closing of the transaction at the end of April 2016 resulted in
+a loss on disposal of about €0.1 billion, which consisted mostly
+of realized foreign exchange translation differences reclassified
+from other comprehensive income to the income statement.
+Revenues are generated primarily from the sale of electricity
+and gas to industrial and commercial customers, to retail cus-
+tomers and to wholesale markets. Additional revenue is earned
+from the distribution of gas and electricity and from deliveries
+of steam and water.
+supplied, including an estimated value of the volume supplied to
+customers between the date of their last meter reading and
+period-end.
+At €38 billion, revenues in 2017 were roughly 1 percent lower
+than in the previous year. Sales in Customer Solutions Germany
+declined due to the transfer of wholesale customers to Uniper.
+Sales in the UK also declined due to lower volumes resulting
+from declining customer numbers and negative currency
+translation effects. By contrast, sales in the Energy Networks
+Germany segment increased, primarily because of higher
+costs charged by upstream grid operators in Germany that we
+passed through to our customers.
+The classification of revenues by segment is presented in Note 33.
+(6) Own Work Capitalized
+Own work capitalized amounted to €524 million in 2017
+(2016: €529 million) and resulted primarily from capitalized work
+performed in connection with IT projects and network assets.
+(7) Other Operating Income and Expenses
+The table below provides details of other operating income for
+the periods indicated:
+Other Operating Income
+2016
+€ in millions
+2017
+Income from exchange rate differences
+1,950
+5,039
+Revenues from the sale of electricity and gas are recognized
+when earned on the basis of a contractual arrangement with the
+customer or purchaser; they reflect the value of the volume
+Exploration and Production Business in the North Sea
+In November 2014, E.ON had announced the strategic review
+of its exploration and production business in the North Sea.
+Because of a firming commitment to divest itself of these activ-
+ities, E.ON had reported this business as a disposal group as of
+September 30, 2015.
+As part of the framework agreement and a contractual agree-
+ment building on that framework concluded in October 2016,
+E.ON received an additional payment of €0.2 billion. This pay-
+ment is included as a purchase price adjustment from discon-
+tinued operations in the fourth quarter of 2016.
+In late November 2014, E.ON entered into contracts with a con-
+sortium made up of Macquarie European Infrastructure Fund 4
+(MEIF4) and Wren House Infrastructure (WHI) on the sale of its
+Spanish and Portuguese activities. The transaction closed on
+March 25, 2015, with a minimal loss on disposal.
+149
+The following table shows selected financial information for the
+Uniper Group, which is reported as discontinued operations for
+fiscal year 2016:
+Selected Financial Information-
+Uniper (Summary)¹
+€ in millions
+Sales
+2016
+56,661
+Other income
+Other expense
+As of December 31, 2016, E.ON and Uniper entered into the
+agreement on the non-exercise of control that was included in
+the spinoff agreement. Under this agreement, E.ON undertakes
+to abstain over the long term from exercising voting rights
+relating to the election of a certain number of supervisory board
+members of Uniper. With the finalization of the agreement,
+E.ON lost control over Uniper despite the 46.65-percent stake
+retained in Uniper, which in principle would provide actual con-
+trol at the Annual Shareholders Meeting due to E.ON's expected
+majority presence there.
+4,152
+Report of the Supervisory Board
+-72,190
+Income/Loss from continuing operations before income
+taxes
+-11,377
+Income taxes
+929
+Income/Loss from discontinued operations, net
+E.ON in Spain
+137
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Gain on derivative financial instruments
+Report of the Supervisory Board
+E.ON entered into an agreement with Allianz Capital Partners in
+December 2016 to sell a 30-percent stake in E.ON Distribuţie
+România S.A. E.ON Distribuţie România S.A owns and operates
+a gas distribution network of over 20,000 kilometers and a
+power distribution network of more than 80,000 kilometers,
+supplying more than 3 million customers. After conclusion of
+the transaction on December 22, 2016, E.ON retains 56.5 per-
+cent of the shares of E.ON Distribuţie România, and another
+13.5 percent of the shares are held by the Romanian Ministry of
+Energy. The parties agreed to not disclose the purchase price.
+Since this is a sale of shares without loss of control, no profit or
+loss was realized.
+E.ON Distribuţie România S.A.
+The derecognized asset and liability items of the Uniper Group
+were intangible assets (€1.5 billion), property, plant and equip-
+ment (€8.5 billion), other assets (€32.1 billion), provisions
+(€9.2 billion) and liabilities (€26.5 billion). Taking into account
+other deconsolidation effects (€0.5 billion), the loss on disposal
+primarily results from recognition in the consolidated income
+statement of currency translation effects that were previously
+recognized in other comprehensive income.
+-10,448
+The deconsolidation of Uniper as of December 31, 2016,
+resulted in a loss on disposal of €3.6 billion.
+¹This does not include the deconsolidation loss amounting to -€3.6 billion.
+CEO Letter
+613
+In 2016, E.ON generated revenues of €2,982 million, interest
+income of €184 million and interest expenses of €11 million,
+as well as other income of €1,579 million and other expenses
+of €8,327 million, with companies of the Uniper Group.
+Gain on disposal of non-current assets and
+Enerji A.Ş. continues to retain the status of a joint venture
+between E.ON and Sabanci (40 percent each). As of the reporting
+date of December 31, 2017, there were no accounting conse-
+quences under IFRS.
+As of September 30, 2017, Enerjisa Enerji A.Ş., a major Turkish
+joint venture accounted for under the equity method, with E.ON
+and Sabanci each holding a 50-percent stake, was split into two
+at equity joint ventures (E.ON's interest is 50 percent in each),
+Enerjisa Enerji A.Ş. and Enerjisa Üretim Santralleri A.Ş. Because
+they continued to be carried at book value, there was no impact
+on earnings. On February 8, 2018, a 20-percent stake (10 percent
+E.ON stake) in Enerjisa Enerji A.Ş. was floated on the stock
+exchange. The issue price was TRY 6.25 per 100 shares. Enerjisa
+Enerjisa
+On December 19, 2017, E.ON Värme Lokala Energilösningar
+AB, including eleven small and medium-sized district heating
+networks in nine Swedish municipalities, were sold to Adven
+Sweden AB. Adven is a leading supplier of energy solutions and
+district heating in Finland, Sweden and Estonia. The parties
+agreed not to disclose the purchase price. As the contract was
+concluded retroactively to October 1, 2017, all transactions
+starting from that date have been transferred to Adven Sweden
+AB. E.ON Värme Lokala Energilösningar AB was deconsolidated
+in the Customer Solutions Sweden segment in the fourth quar-
+ter of 2017. This resulted in the derecognition of approximately
+€100 million on the consolidated balance sheet.
+E.ON Värme Lokala Energilösningar
+In July 2017, the Hamburg Senate approved the exercise of a call
+option agreed in 2014 (following a corresponding referendum)
+with the Free and Hanseatic City of Hamburg on the previous
+E.ON majority stake in Hamburg Netz GmbH (74.9 percent, HHNG).
+E.ON held this stake in the energy networks sector through
+HanseWerk AG (E.ON's ownership interest: 66.5 percent). After
+the exercise of this option on October 20, 2017, the correspond-
+ing HHNG shares were transferred effective January 1, 2018,
+to the buyer, which now holds 100 percent of the company's
+shares (operating as Gasnetz Hamburg GmbH since January
+2018). As of December 31, 2017, the balance sheet items related
+to HHNG were classified as a disposal group in accordance with
+IFRS 5. The cash inflow generated by this transaction in 2017 is
+recorded in the consolidated cash flow statement for 2017
+under disposals and does not have an effect on economic net
+debt as of December 31, 2017. HHNG will be deconsolidated in
+the first quarter of 2018.
+Hamburg Netz
+Discontinued Operations and Assets Held for
+Sale in 2017
+(4) Acquisitions, Disposals and Discontinued
+Operations
+135
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+In 2017, a total of 18 domestic and 12 foreign associated
+companies were consolidated under the equity method
+(2016: 18 domestic companies and 12 foreign companies).
+In 2017, one domestic company reported as joint operations
+was presented pro rata on the consolidated financial state-
+ments (2016: 1 domestic company).
+1,141
+8
+5
+13
+Disposals/Mergers
+1
+Uniper
+6
+Consolidated companies
+as of December 31, 2017
+84
+148
+232
+The disposals/mergers in the 2016 fiscal year primarily relate to
+the deconsolidation of the Uniper business.
+7
+E.ON and Finnish energy company Fortum Corporation, Espoo,
+Finland, entered into an agreement in September 2017 that
+enabled E.ON to decide to sell its 46.65-percent stake in Uniper
+to Fortum at a total value of €22 per share-less any interim
+dividend payment-at the beginning of 2018. In this connection
+Fortum published a takeover offer for all of the shares of Uniper
+on November 7, 2017. In January 2018, E.ON decided to exercise
+its right to sell its 46.65-percent shareholding in Uniper in the
+framework of the takeover offer. The total proceeds received
+by E.ON from the transaction will be approximately €3.76 billion.
+The completion of the takeover offer is subject to regulatory
+approvals, which are expected by mid-2018.
+E.ON Stock
+Discontinued Operations and Assets Held for
+Sale in 2016
+679
+The shares in Uniper are recognized as a disposal group with
+a book value of approximately €3.0 billion. The reciprocal
+contractual rights and obligations result in derivative financial
+instruments with a market value of -€0.7 billion as of the
+reporting date. This amount was recognized in the income
+statement in 2017. The fair value of the 46.65-percent share-
+holding in Uniper totaled €4.4 billion as of December 31, 2017
+(December 31, 2016: €2.7 billion).
+securities
+309
+Refund of nuclear-fuel tax
+2,850
+Gain on the reversal of provisions
+450
+40
+103
+94
+Miscellaneous
+1,004
+825
+Total
+Reversal of valuation allowances on loans
+and receivables
+The spinoff was legally completed with the approval of the
+spinoff of 53.35 percent of the shares of Uniper by the Annual
+Shareholders Meeting on June 8, 2016, and with entry in the
+commercial register on September 9, 2016. E.ON shareholders
+received one Uniper share for every ten E.ON shares. Uniper SE
+shares were admitted for official trading on the regulated
+market of the Frankfurt Stock Exchange on September 9, 2016.
+Trading commenced on September 12, 2016.
+In implementation of the December 2014 decision by the
+Management Board of E.ON SE, the spinoff of the conven-
+tional power generation, global energy trading, Russia and
+exploration and production activities into a separate entity
+called the Uniper Group was organizationally and legally
+completed in 2016.
+7,649
+Notes
+136
+Pursuant to IFRS 5, the carrying amounts of all of Uniper's
+assets and liabilities were required to be measured in accordance
+with applicable IFRS immediately before their reclassification.
+In the course of this measurement, based on the application of
+IAS 36, an impairment charge of €2.9 billion was recognized on
+non-current assets in the second quarter of 2016. Furthermore,
+provisions were established for anticipated losses in the amount
+of €0.9 billion.
+When trading of Uniper SE shares on the Frankfurt Stock
+Exchange commenced in the third quarter of 2016, the fair
+value of Uniper was calculated on the basis of the share price,
+taking into account a market-rate premium for presentation of
+ownership. This resulted in the recognition of an additional
+impairment of €6.1 billion, including deferred taxes, in results
+from discontinued operations.
+From the time at which the Annual Shareholders Meeting
+granted its consent to the spinoff and until deconsolidation on
+December 31, 2016, Uniper met the requirements for being
+reported as a discontinued operation.
+Income from the reversal of provisions resulted primarily from a
+reassessment of expert opinions on the firming commitment
+for long-term environmental remediation obligations.
+Gains and losses on derivative financial instruments relate to
+gains from fair value measurement from derivatives under IAS 39.
+Material impacts on the reporting date resulted from the mar-
+ket valuation of derivatives that are used to hedge operations
+against price fluctuations and from other derivatives. In the
+prior year there was an impact primarily from the change in the
+market value of gas and electricity derivatives.
+Income from exchange rate differences consisted primarily of
+realized gains from currency derivatives in the amount of
+€1,339 million (2016: €3,407 million) and from receivables
+and payables denominated in foreign currency in the amount of
+€120 million (2016: €622 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €491 million (2016: €1,010 million).
+E.ON employs derivatives to hedge commodity risks as well as
+currency and interest risks.
+7,448
+On December 31, 2016, the fair value (again taking into
+account a market-rate premium for presentation of ownership)
+was once again to be compared with the carrying amount of
+the Uniper Group. Although the market price had risen compared
+to the price on September 30, 2016, a further impairment of
+approximately €0.9 billion resulted from the increase in net
+assets at Uniper.
+Uniper
+Net interest income/loss
+Other interest income consists primarily of income from the
+above-mentioned interest relating to judicial proceedings. Other
+interest expenses include the accretion of provisions for asset
+retirement obligations in the amount of €64 million (2016:
+€770 million). Also contained in this item is the net interest cost
+from provisions for pensions in the amount of €82 million
+(2016: €84 million).
+-41
+-1,295
+Financial results
+-44
+-1,314
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+Interest expense was reduced by capitalized interest on debt
+totaling €43 million (2016: €37 million).
+Realized gains and losses from interest rate swaps are shown
+net on the face of the income statement.
+1The measurement categories are described in detail in Note 1.
+The improvement in financial results relative to the previous
+year is primarily attributable to lower interest expenses for the
+accretion of nuclear-waste management and dismantling obli-
+gations and to interest from judicial proceedings in connection
+with the refund of the nuclear-fuel tax.
+(10) Income Taxes
+-51
+-1,058
+Interest expenses also include €29 million (2016: €230 million)
+of lower positive earnings effects from non-controlling interests
+in fully consolidated partnerships, which are to be recognized
+as liabilities in accordance with IAS 32, and with legal structures
+that give their shareholders a statutory right of withdrawal com-
+bined with an entitlement to a settlement payment.
+-596
+8
+-33
+Income Taxes
+28
+53
+Held for trading
+2
+Other interest income
+1,143
+105
+Interest and similar expenses¹
+-1,340
+-1,638
+Amortized cost
+-711
+-529
+Held for trading
+Other interest expenses
+€ in millions
+Consolidated Financial Statements
+2016
+Domestic
+The tax expense in 2017 amounted to €440 million, as in the
+prior year. In 2017, positive earnings before taxes will result in a
+tax rate of 10 percent (2016: -25 percent). Significant changes
+in the tax rate compared with the previous year are due to the
+one-off effects of the nuclear-fuel tax refund and the resulting
+income tax burden in Germany. The nuclear-fuel tax effects
+lead to the use of tax loss carryforwards and are subject to the
+so-called minimum taxation.
+Of the amount reported as current taxes, -€42 million is attrib-
+utable to previous years (2016: €173 million).
+Deferred taxes reported for 2017 resulted from changes in tempo-
+rary differences, which totaled -€480 million (2016: -€84 million),
+loss carryforwards of €332 million (2016: €13 million) and tax
+credits amounting to -€5 million (2016: €5 million).
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Loans and receivables
+Summary of Financial Highlights and Explanations
+141
+Income tax assets amounted to €514 million (previous year:
+€858 million), of which €514 million was short-term (previous
+year: €851 million), while income tax liabilities amounted to
+€1,642 million (previous year: €1,867 million), of which €673 mil-
+lion was short-term (previous year: €434 million). These items
+consist primarily of income taxes for the respective current year
+and for prior-year periods that have not yet been definitively
+examined by the tax authorities.
+As of December 31, 2017, €5 million (2016: €5 million) in deferred
+tax liabilities were recognized for the differences between net
+assets and the tax bases of subsidiaries and associated companies
+(outside basis differences). Accordingly, deferred tax liabilities
+were not recognized for temporary differences of €717 million
+(2016: €483 million) at subsidiaries and associated companies,
+as E.ON is able to control the timing of their reversal and the
+temporary difference will not reverse in the foreseeable future.
+Changes in tax rates resulted in tax income of €41 million in
+total (2016: €78 million).
+440
+440
+Total income taxes
+-66
+Domestic income taxes
+507
+281
+Foreign income taxes
+86
+225
+Current taxes
+2017
+593
+-58
+-224
+Foreign
+-95
+158
+Deferred taxes
+-153
+506
+183
+2016
+Available for sale
+1,663
+4,925
+Loss on derivative financial instruments
+1,838
+231
+Taxes other than income taxes
+113
+96
+Loss on disposal of non-current assets and
+securities
+193
+105
+Miscellaneous
+2,668
+Total
+Loss from exchange rate differences
+6,475
+2016
+Miscellaneous other operating expenses included expenses for
+external consulting, audit and non-audit services in the amount
+of €225 million (2016: €246 million), advertising and marketing
+expenses in the amount of €153 million (2016: €117 million),
+write-downs of trade receivables in the amount of €200 million
+(2016: €236 million), rents and leases in the amount of €154 mil-
+lion (2016: €151 million) and other services rendered by third
+parties in the amount of €457 million (2016: €459 million). Addi-
+tionally reported in this item, among other things, are IT expendi-
+tures, insurance premiums and travel expenses. This also
+includes the obligations to pass on a portion (€327 million) of
+the refunded nuclear-fuel tax to minority shareholders of our
+jointly-owned power stations.
+Income taxes relating to discontinued operations (see also Note 4)
+are reported in the income statement under "Income from dis-
+continued operations." In the prior year they amounted to tax
+income of €929 million. There are no tax effects for the current
+year.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+The gain on the disposal of equity investments and securities
+consisted primarily of gains on the disposal of E.ON Värme
+Lokale Energilösningar AB. In the previous year, there were
+gains on the disposal of shares in ENOVOS and shares in AWE
+Arkona-Windpark Entwicklungs GmbH.
+Gains were realized on the sale of securities in the amount of
+€424 million (2016: €141 million).
+Miscellaneous other operating income in 2017 included rever-
+sals of impairment charges in property, plant and equipment,
+the proceeds of passing on charges for the provision of personnel
+and services, reimbursements, and rental and lease interest.
+The following table provides details of other operating expenses
+for the periods indicated:
+Other Operating Expenses
+€ in millions
+Losses from exchange rate differences consisted primarily of
+realized losses from currency derivatives in the amount of
+€1,166 million (2016: €3,523 million) and from receivables and
+payables denominated in foreign currency in the amount of
+€124 million (2016: €190 million). In addition, there were effects
+from foreign currency translation on the balance sheet date in
+the amount of €373 million (2016: €1,212 million).
+2017
+120
+2,510
+7,867
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity. Network usage charges and fuel supply are also
+included in this line item. Expenses for purchased services con-
+sist primarily of maintenance costs.
+2017
+2016
+Income/Loss from companies in which
+equity investments are held
+59
+76
+Impairment charges/reversals on other
+-62
+-95
+Income/Loss from equity investments
+-3
+-19
+Income/Loss from securities, interest
+and similar income¹
+1,299
+343
+€ in millions
+(8) Cost of Materials
+Financial Results
+(9) Financial Results
+E.ON posted a decrease in the cost of materials by €2.5 billion
+to €29.8 billion (2016: €32.3 billion). The reason for this was
+lower expenses for power and gas procurement in Customer
+Solutions primarily due to the transfer of the wholesale business
+to Uniper (-€0.3 billion) and lower customer numbers in the UK
+(-€0.5 billion). The slight increase in power procurement costs
+at Preussen Elektra (+€0.2 billion) is due to higher electricity pro-
+curement to cover Uniper's supply obligations, which are mainly
+attributable to decommissioning. By contrast, expenses from
+nuclear fuel fell due to a lawsuit won and the discontinuation of
+the nuclear-fuel tax (-€0.1 billion).
+Cost of Materials
+€ in millions
+2017
+Expenses for raw materials and supplies
+and for purchased goods
+27,923
+27,924
+Expenses for purchased services
+Total
+1,865
+4,401
+29,788
+32,325
+The elimination of the additional provision for waste manage-
+ment obligations at Preussen Elektra (-€2.2 billion), which was
+recognized in 2016, led to a significant reduction in nuclear
+energy costs compared with the prior year. In addition, the opti-
+mization of the dismantling activities at PreussenElektra made
+it possible to reverse the related provisions in the amount of
+€0.3 billion. In the Energy Networks Germany segment, the
+cost of materials also increased (+€0.9 billion), which is primarily
+the result of an increase in passthroughs under Germany's
+Renewable Energy Law.
+Notes
+140
+The following table provides details of financial results for the
+periods indicated:
+139
+financial assets
+2017
+The equity deferral is determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral is converted into virtual
+shares and vests immediately. In the United States, virtual shares
+were granted in the amount of the equity deferral for the first
+time in 2015. Beneficiaries were additionally granted virtual
+shares in the context of base matching and performance match-
+ing. For members of the Management Board of E.ON SE, the
+proportion of base matching to the equity deferral was deter-
+mined at the discretion of the Supervisory Board; for all other
+beneficiaries it was 2:1. The performance-matching target
+value at allocation was equal to that for base matching in terms
+of amount. Performance matching will result in a payout only
+on achievement of a minimum performance as specified at the
+beginning of the term by the Management Board and the
+Supervisory Board.
+In 2015 and 2016, virtual shares from the third and fourth tranche
+were granted in the context of base matching and performance
+matching exclusively to members of the Management Board of
+E.ON SE. Executives were granted a multi-year bonus, the
+terms of which are described further below, instead of the base
+and performance matching.
+In 2017 virtual shares were granted for the last time under the
+E.ON Share Matching Plan, only to members of the Management
+Board of E.ON SE and only to the extent of the "equity deferral."
+The total of these allocations is shown below as the fifth tranche
+of the E.ON Share Matching Plan. Additional information can be
+found on pages 88 and 89 of the compensation report.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+From 2013 to 2016, E.ON granted virtual shares to members of
+the Management Board of E.ON SE and certain executives of
+the E.ON Group under the E.ON Share Matching Plan. At the
+end of its four-year term, each virtual share is entitled to a cash
+payout linked to the final E.ON share price established at that
+time. The calculation inputs for this long-term variable compen-
+sation package are equity deferral, base matching and perfor-
+mance matching.
+145
+In 2016, the plan was changed to the effect that for periods from
+2016 onwards, ROCE was used instead of ROACE for measuring
+performance. Accordingly, new targets were defined for 2016
+and/or subsequent years. At the same time, the previous ROACE
+target achievement for the previous years will be included in
+the total performance of the respective tranches on a pro-rata
+basis. In the event of a defined underperformance, there is no
+payout under performance matching.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, all virtual shares-except for those that
+resulted from the equity deferral-expire.
+At the end of the term, the sum of the dividends paid to the ordi-
+nary shareholders during the term is added to each virtual share.
+The maximum amount to be paid out to a plan participant is
+limited to twice the sum of the equity deferral, base matching
+and the target value under performance matching.
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements. To offset the
+change in value resulting from the spinoff of Uniper SE, both
+the 60-day average price of the E.ON share and the total divi-
+dends paid to a shareholder starting from 2017 will be multi-
+plied by a correction factor at the end of the term.
+The plan also contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+The following are the base parameters of the tranches of the
+share matching plan active in 2017:
+E.ON Share Matching Virtual Shares
+Date of issuance
+Term
+Under the plan's original structure, the amount paid out under
+performance matching was to be equal to the target value at
+issuance if the E.ON share price was maintained at the end of
+the term and if the average ROACE performance matched a
+target value specified by the Management Board and the Super-
+visory Board. If the average ROACE during the four-year term
+exceeded the target value, the number of virtual shares granted
+under performance matching increases up to a maximum of
+twice the target value. If the average ROACE had fallen short
+of the target value, the number of virtual shares, and thus also
+the amount paid out, were to decrease.
+Target value at issuance
+E.ON Share Matching Plan
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation. The
+purpose of such compensation is to reward their contribution
+to E.ON's growth and to further the long-term success of the
+Company. This variable compensation component, comprising
+a long-term incentive effect along with a certain element of
+risk, provides for a sensible linking of the interests of shareholders
+and management.
+2,518
+2,231
+Social security contributions
+338
+340
+Pension costs and other employee benefits
+306
+268
+Pension costs
+301
+The following discussion includes reports on the E.ON Share
+Matching Plan introduced in 2013, on the multi-year bonus
+granted in 2015 and 2016 and on the E.ON Performance Plan
+introduced in 2017.
+263
+3,162
+2,839
+Notes
+144
+Share-Based Payment
+The expenses for share-based payment in 2017 (employee stock
+purchase programs in the United Kingdom, the E.ON Share
+Matching Plan, the multi-year bonus and the E.ON Share Perfor-
+mance Plan) amounted to €53.1 million (2016: €14.1 million).
+Employee Stock Purchase Program
+The voluntary employee stock purchase program, which through
+2015 provided employees of German Group companies the
+opportunity to purchase E.ON shares at preferential terms, was
+again suspended in 2017, as it had been in 2016, against the
+backdrop of the spinoff of Uniper.
+Since the 2003 fiscal year, employees in the United Kingdom
+have the opportunity to purchase E.ON shares through an
+employee stock purchase program and to acquire additional
+bonus shares. The expense of issuing these matching shares
+amounted to €0.5 million in 2017 (2016: €1.4 million) and is
+recorded under personnel costs as part of "Wages and salaries."
+Long-Term Variable Compensation
+Total
+5th tranche
+Apr. 1, 2017
+4 years
+€7.17
+4th tranche
+Apr. 1, 2016
+3rd tranche
+Apr. 1, 2015
+147
+shares is reduced by one fourth. If E.ON's performance is at
+the upper cap or above, the fourth of the virtual shares allocated
+for the year in question will increase, but to a maximum of
+150 percent. Linear interpolation is used to translate interme-
+diate figures into percentage.
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the agreed target.
+The virtual shares are canceled if the employment relationship
+of the beneficiary ends before the end of the term for reasons
+within the control of the beneficiary. This shall apply in particular
+in the event of termination by the beneficiary and in the event
+of extraordinary termination for good cause by the Company. If
+the employment relationship of the beneficiary is terminated
+before retirement, through the end of a limited term or for oper-
+ational reasons before the end of the term, the virtual shares do
+not expire but are settled at maturity.
+If the employment relationship ends before maturity due to death
+or permanent invalidity, the virtual shares are settled before
+maturity, whereby in this case the average TSR performance of
+the fiscal years that have already completely ended is used to
+calculate the payment amount. The same shall apply in the case
+of a change in control related to E.ON SE and also if the allocating
+company leaves the E.ON Group before maturity.
+The following are the base parameters of the tranche of the
+E.ON Performance Plan active in 2017:
+E.ON Performance Plan Virtual Shares
+Date of issuance
+Term
+Target value at issuance
+1st tranche
+Jan. 1, 2017
+4 years
+€5.84
+Summary of Financial Highlights and Explanations
+The provision for the first tranche of the E.ON Performance Plan
+as of the balance sheet date is €6.5 million. The expense for the
+first tranche amounted to €6.6 million in the 2017 fiscal year.
+During 2017, E.ON employed an average of 42,657 persons
+(2016: 42,595), not including an average of 876 apprentices
+(2016: 884).
+The breakdown by segment is shown in the following table:
+Employees¹
+Headcount
+Energy Networks
+2017
+2016
+17,222
+16,690
+Customer Solutions
+Employees
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+2nd tranche
+Apr. 1, 2014
+4 years
+€8.63
+4 years
+€13.63
+4 years
+€13.65
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual shares.
+In addition, the change in ROCE is simulated for performance
+matching. The provision for the second, third, fourth and fifth
+tranches of the E.ON Share Matching Plan as of the balance
+sheet date is €48.0 million (2016: €45.5 million). The expense
+for the second, third, fourth and fifth tranches amounted to
+€22.1 million in the 2017 fiscal year (2016: €3.6 million).
+Notes
+146
+Multi-Year Bonus
+In 2015 and 2016, E.ON extended to those executives who in
+previous years had been granted virtual shares in the context of
+base matching and performance matching a multi-year bonus
+extending over a term of four years. Beneficiaries were informed
+individually of the target value of the multi-year bonus.
+For executives in the E.ON Group, the amount paid out is equal
+to the target value if the E.ON share price at the end of the term
+is equal to the E.ON share price after the spinoff of Uniper. If
+the share price at the end of the term is higher or lower than the
+share price after the spinoff, the amount paid out relative to
+the target value will increase or decrease in equal proportion to
+the change in the share price, but in no event shall the payout
+be higher than twice the target value.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, there is no entitlement to a multi-year
+bonus payout.
+60-day average prices are used to determine both the share
+price after the spinoff and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+The plan contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+The provision for the multi-year bonus as of the balance sheet
+date is €36.4 million (2016: €13.7 million). The expense amounted
+to €23.9 million in the 2017 fiscal year (2016: €9.1 million).
+E.ON Performance Plan (EPP)
+In 2017, E.ON granted the members of the Management Board
+of E.ON SE and certain executives of the E.ON Group virtual
+shares for the first time under the E.ON Share Performance
+Plan. The vesting period of each tranche is four years. Vesting
+periods start on January 1 of each year.
+The beneficiary will receive virtual shares in the amount of the
+agreed target. The conversion into virtual shares will be based on
+the fair market value on the date when the shares are granted.
+The fair market value will be determined by applying methods
+accepted in financial mathematics, taking into account the
+expected future payout and consequently the volatility and risk
+associated with the EPP. The number of virtual shares allocated
+may change during the four-year vesting period, depending on
+the total shareholder return ("TSR") of E.ON stock compared
+with the TSR of the companies in a peer group ("relative TSR").
+The TSR is the return on E.ON stock, which takes into account
+the stock price plus the assumption of reinvested dividends,
+adjusted for changes in capital. The peer group used for relative
+TSR will be the other companies in E.ON's peer index, the
+STOXX® Europe 600 Utilities.
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON's TSR performance in a
+given year determines the final number of one fourth of the vir-
+tual shares granted at the beginning of the vesting period. For
+this purpose, the TSRS of all companies are ranked, and E.ON's
+relative position is determined based on the percentile reached.
+If target attainment in a year is below the threshold defined by
+the Supervisory Board upon allocation, the number of virtual
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Wages and salaries
+2016
+2017
+€ in millions
+taxes
+taxes
+taxes
+taxes
+taxes
+Cash flow hedges
+198
+3
+201
+-331
+income
+-10
+Available-for-sale securities
+-125
+56
+-69
+-106
+45
+-61
+Currency translation adjustments
+-25
+-25
+-341
+Income
+After
+Before
+income
+4,476
+5,589
+-2,776
+-2,776
+-3,035
+-3,035
+907
+1,616
+1,441
+2,554
+272
+178
+609
+559
+Of the deferred taxes reported, a total of -€575 million was
+charged directly to equity in 2017 (2016: -€425 million charge).
+A further €49 million in current taxes (2016: €49 million)
+was also recognized directly in equity. Currency translation
+differences with an impact on income tax within this item were
+reclassified to other comprehensive income in 2017.
+Income taxes recognized in other comprehensive income for the
+years 2017 and 2016 break down as follows:
+Income Taxes on Components of Other Comprehensive Income
+2017
+2016
+€ in millions
+Before
+income
+taxes
+Income
+After
+income
+4,865
+19,091
+-54
+Remeasurements of defined benefit plans
+Tax Loss Carryforwards
+2016
+December 31,
+€ in millions
+2017
+Domestic tax loss carryforwards
+Foreign tax loss carryforwards
+Total
+4,113
+7,923
+5,141
+9,254
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+6,800
+14,723
+The foreign tax loss carryforwards consist of corporate tax loss
+carryforwards amounting to €4,791 million (2016: €4,806 million)
+and tax loss carryforwards from local income taxes amounting
+to €350 million (2016: €1,994 million). Of the foreign tax loss
+carryforwards, a significant portion relates to previous years.
+The decline in foreign tax loss carryforwards compared with the
+previous year is mainly due to the discontinuation of tax loss
+carryforwards due to the deconsolidation of a foreign company.
+Deferred taxes were not recognized, or no longer recognized,
+on a total of €3,568 million (2016: €5,109 million) in tax loss
+carryforwards that for the most part do not expire. Deferred
+tax assets were not recognized, or no longer recognized, on
+non-expiring domestic corporate tax loss carryforwards of
+€1,299 million (2016: €3,089 million) or on domestic trade tax
+loss carryforwards of €2,756 million (2016: €4,769 million).
+Deferred tax assets were not recognized, or are no longer rec-
+ognized, in the amount of €9,980 million (2016: €10,133 million)
+for temporary differences which are recognized in income and
+equity.
+As of December 31, 2017, and December 31, 2016, E.ON
+reported deferred tax assets for companies that incurred losses
+in the current or the prior-year period that exceed the deferred
+tax liabilities by €9 million and €31 million, respectively. The
+basis for recognizing deferred tax assets is an estimate by man-
+agement of the extent to which it is probable that the respective
+companies will achieve taxable earnings in the future against
+which the as yet unused tax losses, tax credits and deductible
+temporary differences can be offset.
+(11) Personnel-Related Information
+Personnel Costs
+The following table provides details of personnel costs for the
+periods indicated:
+Personnel costs of €3,162 million were €323 million above the
+prior-year figure of €2,839 million, mainly because of the costs
+of our restructuring program, which has been under way since
+the start of the year. By contrast, personnel costs were reduced
+by lower past-service costs for pension plans.
+Personnel Costs
+Since January 1, 2004, domestic tax loss carryforwards can only
+be offset against a maximum of 60 percent of taxable income,
+subject to a full offset against the first €1 million. This minimum
+corporate taxation also applies to trade tax loss carryforwards.
+The domestic tax loss carryforwards result from adding corpo-
+rate tax loss carryforwards amounting to €1,323 million (2016:
+€3,115 million) and trade tax loss carryforwards amounting
+to €2,790 million (2016: €4,808 million). Material changes
+compared with the previous year are due to the one-off effects
+from the refund of the nuclear-fuel tax and the resulting use of
+tax loss carryforwards.
+143
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+317
+165
+482
+-1,401
+-202
+Companies accounted for under the equity method
+-437
+-2
+-439
+-89
+-8
+Total
+-72
+222
+150
+2,938
+-229
+-1,603
+-97
+2,709
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+4,811
+The base income tax rate of 30 percent applicable in Germany,
+which is unchanged from the previous year, is composed of
+corporate income tax (15 percent), trade tax (14 percent) and
+the solidarity surcharge (1 percent). The differences from the
+effective tax rate are reconciled as follows:
+18,785
+1,142
+Receivables
+Inventories
+Financial assets
+Property, plant and equipment
+Intangible assets
+€ in millions
+Deferred Tax Assets and Liabilities
+Deferred tax assets and liabilities as of December 31, 2017, and
+December 31, 2016, break down as shown in the following table:
+Notes
+-25.5
+Provisions
+440
+440
+0.8
+-14
+0.9
+40
+-1.0
+18
+-2.7
+-125
+Effective income taxes/tax rate
+9.5
+Tax effects of income taxes related to other periods
+Other
+Liabilities
+Tax credits
+162
+2,453
+172
+2,036
+206
+446
+210
+393
+179
+Tax liabilities
+Loss carryforwards
+Tax assets
+Tax assets
+December 31, 2016
+December 31, 2017
+142
+Deferred taxes (net)
+Current
+Netting
+Deferred taxes (gross)
+Changes in value
+Subtotal
+Other
+Tax liabilities
+-10.8
+186
+0.6
+18.0
+-311
+-1.6
+-75
+30.0
+-518
+30.0
+1.386
+100.0
+-1,725
+-41
+100.0
+Tax effects on tax-free income
+Changes in tax rate/tax law
+Foreign tax rate differentials
+Expected income taxes
+Income/Loss from continuing operations before taxes
+%
+€ in millions
+%
+€ in millions
+2016
+4,620
+-0.9
+-78
+4.5
+30
+-83.3
+1,437
+-21.0
+-972
+Tax effects of changes in value and non-recognition of deferred taxes
+Tax effects of other taxes on income
+0.0
+0.0
+Tax effects of goodwill impairment and elimination of negative goodwill
+4.1
+-71
+1.5
+71
+Tax effects on income from companies accounted for under the equity method
+9.8
+-167
+9.0
+418
+Tax effects of non-deductible expenses and permanent differences
+2.4
+-42
+-6.3
+-292
+185
+164
+260
+9
+20161
+2016
+Financial statement audits
+19
+30
+21
+Domestic
+14
+24
+15
+2017
+Other attestation services
+9
+18
+Domestic
+3
+7
+16
+Tax advisory services
+1
+1
+1
+4
+€ in millions
+Independent Auditor Fees
+During 2017 and 2016, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") GmbH, Wirtschafts-
+prüfungsgesellschaft, (domestic) and by companies in the inter-
+national PwC network were recorded as expenses:
+1,012
+Corporate Functions & Other²
+3,260
+4,036
+Employees, core business
+40,715
+40,523
+Non-Core business (PreussenElektra)
+1,942
+2,038
+Other (activities disposed of)
+34
+Total employees, E.ON Group
+42,657
+42,595
+¹Figures do not include board members, managing directors, or apprentices.
+2Includes E.ON Business Services.
+Notes
+148
+(12) Other Information
+German Corporate Governance Code
+On December 18, 2017, the Management Board and the Super-
+visory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+Fees and Services of the Independent Auditor
+Domestic
+Renewables
+Other services
+Total
+6,365
+361
+654
+249
+471
+12
+16
+1,414
+1,020
+630
+4,392
+1,602
+1,368
+467
+2,906
+119
+2,572
+972
+396
+764
+362
+7
+646
+7,537
+5,589
+-2,682
+Domestic
+1
+2
+2
+1
+2
+2
+25
+42
+42
+18
+33
+33
+223
+With the revision of IDW RS HFA 36 in 2017, there will be a
+change in the disclosure requirements for auditors' fees pursu-
+ant to Section 314 (1) No. 9 of the German Commercial Code
+(HGB). In addition to the audit of the Consolidated Financial
+Statements and the legally mandated financial statements of
+E.ON SE and its affiliates, the auditor's fees now also include
+fees for auditing reviews of the IFRS interim financial state-
+ments and other tests directly required by the audit. To ensure
+comparability, this adjustment in the auditors' fees is also
+shown for the prior-year figures for 2016.
+The fees for other auditing services now include all attestation
+services that are not auditing services and are not used in con-
+nection with the audit. In 2017, about half of these costs will
+be for the legally required attestation services (e.g. as a result of
+the Renewable Energy Act (EEG), the Act on Combined Heat
+and Power Generation (KWKG)) and the other half of the costs
+will be for other voluntary attestation services (primarily in
+connection with new IT systems). The fees for tax consulting
+services mainly relate to services in the area of tax compliance
+and tax consulting in connection with transfer pricing systems.
+Fees for other services consist primarily of technical support in
+connection with the implementation of new requirements in the
+areas of IT, accounting and reporting.
+List of Shareholdings
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+presented on pages 209 through 221.
+¹Tentative implementation of revised IDW RS HFA 36.
+The significant reduction in auditors' fees in 2017 is mainly due
+to the disposal of Uniper SE from the E.ON Group in 2016.
+-3,061
+Domestic
+Reconciliation to Effective Income Taxes/Tax Rate
+3,683
+4,392
+4
+4
+-103
+4
+-1,949
+-57
+2,715
+Real estate and leasehold rights
+4,117
+4,147
+Real estate and leasehold rights
+614
+-5
+-12
+2
+-14
+4
+589
+Buildings
+3,169
+6
+-38
+30
+-107
+3,060
+Technical equipment, plant and machinery
+49,892
+-681
+-1,081
+614
+Buildings
+6,557
+46
+-38,969
+-1,604
+93,020
+Property, plant and equipment
+-2,517
+-97
+4,268
+Advance payments and construction in progress
+1,017
+17
+-115
+100
+-309
+-5
+1,539
+1,329
+Other equipment, fixtures, furniture and
+49,892
+891
+-864
+3,948
+-30,743
+-1,491
+78,151
+Technical equipment, plant and machinery
+3,169
+51
+-84
+50
+-3,451
+office equipment
+1,565
+5,667
+-1,208
+49,158
+Other
+Renew-
+ables
+Non-Core
+Business
+Corporate
+Functions/
+Other¹
+E.ON
+Group
+Net carrying amount of
+goodwill as of
+January 1, 2017
+613
+100
+60
+183
+875
+103
+1,350
+0
+179
+3,463
+Changes resulting from
+acquisitions and disposals
+Impairment charges
+-6
+Other changes²
+-24
+-3
+2
+-30
+-1
+-64
+UK
+Turkey Germany
+Sweden
+Germany
+Other equipment, fixtures, furniture and
+office equipment
+1,017
+3
+-10
+87
+-156
+10
+951
+Advance payments and construction in progress
+2,115
+-58
+-9
+1,407
+697
+-20
+2,674
+Property, plant and equipment
+56,807
+-735
+-1,150
+3,065
+-1,505
+-50
+56,432
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2017
+Energy Networks
+Customer Solutions
+ECE/
+€ in millions
+-761
+-89
+-1,015
+2,115
+Dec. 31,
+Dec. 31,
+consolida-
+rate
+scope of
+Exchange
+Changes in
+Net carrying
+amounts
+Accumulated depreciation
+153
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+5Presented here are the growth rates and cost of capital after taxes for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+6Other non-current assets consist of intangible assets and of property, plant and equipment.
+4Other changes include restructuring, transfers and exchange rate differences, as well as reclassifications to assets held for sale. Also included is the goodwill impairment of discontinued operations (see also
+page 154).
+³Due to the changed structure in segment reporting, goodwill was reallocated on April 1, 2016.
+¹Also includes the goodwill of the Uniper Group, which was deconsolidated as of December 31, 2016.
+2Recognized goodwill expected to be eliminated from the scope of consolidation soon.
+57
+5
+-3,334
+-2,891
+-278
+-3
+-72
+-19
+52
+Reversals
+Jan. 1, 2016
+differences
+tion
+Additions
+-1
+28
+-70
+1,283
+-41
+-1,805
+192
+-405
+47
+-35
+50
+6
+-473
+0
+-71
+-2
+3,463
+-1,826
+0
+0
+0
+3,680
+-4
+-5,502
+2016
+2016
+Reversals
+Impairment
+Transfers
+Disposals
+-2
+Impairment
+Other non-current assets6
+3.8-4.1
+Changes resulting from
+6,441
+0
+2,929
+1,350
+60
+1,099
+525
+76
+131
+271
+January 1, 2016³
+goodwill as of
+Net carrying amount of
+acquisitions and disposals
+E.ON
+Group
+Renew- Non-Core
+ables Business¹
+Other
+UK
+Turkey Germany
+Sweden
+Germany
+€ in millions
+ECE/
+Customer Solutions
+Energy Networks
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2016
+56,807
+-52
+-1,255
+Corporate
+Functions/
+Other²
+0
+5
+Other changes4
+n.a.
+1.5
+6.6
+2.7
+Cost of capital (in %)5
+1.5
+Growth rate (in %)5
+3,463
+179
+0
+1,350
+103
+875
+183
+60
+Impairment charges
+100
+December 31, 2016
+goodwill as of
+Net carrying amount of
+-2,983
+179
+-2,929
+0
+5
+38
+-224
+-342
+-16
+-31
+342
+613
+-6
+-120
+Net carrying amount of
+252
+837
+-1,638
+1,199
+31
+-796
+14
+-31,666
+24,766
+Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment
+Changes in
+152
+Acquisition and production costs
+Exchange
+rate
+€ in millions
+Jan. 1, 2016
+differences
+scope of
+consolida-
+tion
+Dec. 31,
+Additions
+Disposals
+Transfers
+2016
+Goodwill
+11,943
+-185
+-6,469
+0
+-31,565
+2,601
+293
+-658
+-73
+517
+-1,919
+-2
+28
+-76
+99
+39
+-11
+-1,842
+1,218
+-28,811
+256
+800
+-1,477
+0
+955
+-751
+13
+-29,021
+20,137
+-720
+-3
+8
+-83
+143
+-4
+1
+-47
+-2
+-24
+-6
+-72
+0
+Marketing-related intangible assets
+Customer-related intangible assets
+120
+-3,360
+144
+-132
+115
+3,277
+Intangible assets not subject to amortization
+824
+-82
+-71
+765
+-995
+-2
+439
+Advance payments on intangible assets
+326
+-14
+-35
+242
+-6
+-112
+401
+Intangible assets
+7,540
+24
+-3,466
+1,151
+-1,133
+1
+6,390
+Intangible assets subject to amortization
+217
+83
+2
+2
+717
+-10
+-66
+3
+-47
+597
+Contract-based intangible assets
+4,664
+149
+-3,012
+56
+-41
+5,289
+19
+Technology-based intangible assets
+795
+-5
+-169
+35
+-43
+13
+626
+Internally generated intangible assets
+212
+-14
+-113
+50
+-1
+1,835
+-6
+2
+-2
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+151
+Accumulated depreciation
+Net carrying
+amounts
+Changes in
+Exchange
+scope of
+rate
+consolida-
+Dec. 31,
+Dec. 31,
+Jan. 1, 2017
+differences
+-1,826
+-2
+tion
+0
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+2017
+2017
+5Other non-current assets consist of intangible assets and of property, plant and equipment.
+³Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+"Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
+2Other changes include effects from intragroup restructuring, transfers, exchange-rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal
+groups (see also page 154).
+¹Recognized goodwill expected to be eliminated from the scope of consolidation soon.
+goodwill as of
+December 31, 2017
+589
+97
+56
+183
+845
+102
+1,286
+0
+179
+3,337
+Growth rate (in %) 3,4
+n.a.
+0
+Cost of capital (in %) 3,4
+1.5
+8.0
+n.a.
+4.6
+Other non-current assets5
+Impairment
+-10
+Reversals
+-13
+7
+-161
+-6
+-751
+10
+-952
+17
+n.a.
+-6
+0
+-1,834
+-174
+152
+-7
+-149
+0
+-1,849
+1,475
+-2
+453
+-2
+-58
+7
+2
+-7
+56
+3
+315
+-1,788
+63
+1
+-174
+154
+-7
+-156
+3
+-1,904
+2,243
+-68
+1
+1
+-53
+-135
+-1,728
+-114
+3,337
+-2
+0
+-2
+-405
+4
+-32
+-4
+-437
+154
+-741
+46
+-41
+34
+214
+5
+-811
+998
+-502
+-48
+74
+-12
+-1
+-485
+109
+-78
+2
+-53
+44
+-29
+-115
+-741
+Summary of Financial Highlights and Explanations
+-615
+1,094
+Marketing-related intangible assets
+Customer-related intangible assets
+2
+2
+597
+-6
+591
+Contract-based intangible assets
+1,835
+-81
+62
+0
+-34
+1,809
+Technology-based intangible assets
+626
+-5
+44
+-86
+15
+594
+Internally generated intangible assets
+217
+-5
+28
+-24
+-94
+5,289
+1.84
+-1.22
+0.00
+-3.11
+1.84
+-4.33
+2,129
+1,952
+Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment
+150
+Acquisition and production costs
+Changes in
+Exchange
+rate
+scope of
+consolida-
+Dec. 31,
+€ in millions
+Goodwill
+Jan. 1, 2017
+differences
+tion
+Additions
+Disposals
+Transfers
+2017
+55
+-57
+118
+328
+7
+(15) Companies Accounted for under the Equity
+Method and Other Financial Assets
+Notes
+See Note 17 for information on receivables from finance leases.
+113
+104
+42
+39
+49
+45
+22
+20
+Due in more than 5 years
+Total
+Due in 1 to 5 years
+Due within 1 year
+Nominal value of outstanding lease
+installments
+2016
+2017
+€ in millions
+E.ON as Lessor―Operating Leases
+E.ON also functions in the capacity of lessor. Contingent lease pay-
+ments received totaled €28 million in 2017 (2016: €29 million).
+Future lease installments receivable under operating leases are
+due as shown in the table at right:
+Regarding future obligations under operating leases where
+economic ownership is not transferred to E.ON as the lessee,
+see Note 27.
+The present value of the minimum lease obligations is reported
+under liabilities from leases.
+358
+357
+-879
+The changes in goodwill and intangible assets, and in property,
+plant and equipment, are presented in the tables on the
+following pages:
+1,033
+-128
+Intangible assets subject to amortization
+3,277
+-97
+-1
+161
+-177
+161
+3,324
+Intangible assets not subject to amortization
+439
+-13
+712
+-684
+1
+455
+Advance payments on intangible assets
+401
+-18
+-2
+160
+-18
+-155
+368
+Intangible assets
+4,117
+-3
+(14) Goodwill, Intangible Assets and
+Property, Plant and Equipment
+that of basic earnings per share because E.ON SE has issued no
+potentially dilutive ordinary shares.
+The computation of diluted earnings per share is identical to
+Joint ventures
+Associates
+Summarized Financial Information for Individually Non-Material Associates and Joint Ventures Accounted for
+under the Equity Method
+The following table summarizes significant line items of the aggre-
+gated statements of comprehensive income of the associates and
+joint ventures that are accounted for under the equity method:
+Investment income generated from companies accounted for
+under the equity method amounted to €294 million in 2017
+(2016: €223 million). The increase resulted primarily from the
+Uniper SE dividend (€94 million).
+The carrying amounts of the immaterial associates accounted
+for under the equity method totaled €458 million (2016:
+€480 million), and those of the joint ventures totaled €637 million
+(2016: €497 million).
+Shares in Companies Accounted for under the
+Equity Method
+€0 (2016: €744 million) in non-current securities is restricted
+for the fulfillment of legal insurance obligations of Versorgungs-
+kasse Energie i.L. ("VKE") (see Note 31).
+Impairments on other financial assets amounted to €63 million
+(2016: €48 million). The carrying amount of other financial
+assets with impairment losses was €133 million as of the end
+of the fiscal year (2016: €299 million).
+In 2017, impairment charges on companies accounted for under
+the equity method amounted to €8 million (2016: €18 million).
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+Companies accounted for under the equity method consist
+solely of associates and joint ventures.
+¹The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+2,259
+4,350
+11,500
+2,083
+1,725
+7,088
+Total
+4,327
+2,749
+Non-current securities
+3
+2,256
+Total
+4,096
+254
+€ in millions
+2016
+151
+85
+95
+17
+56
+68
+Proportional share of total comprehensive income
+9
+-44
+4
+-33
+5
+-11
+Proportional share of other comprehensive income
+142
+129
+91
+50
+51
+79
+Proportional share of net income from continuing
+operations
+2016
+2017
+2016
+2017
+2017
+157
+821
+6,352
+Income/Loss from continuing operations
+4,180
+-2,165
+Less: Non-controlling interests
+-255
+-217
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+3,925
+-2,382
+Income/Loss from discontinued operations, net
+-13,842
+Less: Non-controlling interests
+7,774
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+0
+-6,068
+Net income/loss attributable to shareholders of E.ON SE
+3,925
+-8,450
+in €
+Earnings per share (attributable to shareholders of E.ON SE)
+from continuing operations
+from discontinued operations
+from net income/loss
+Weighted-average number of shares outstanding (in millions)
+2016
+5
+2017
+Earnings per Share
+2,078
+Joint
+ventures¹
+Associates¹
+E.ON Group
+December 31, 2016
+December 31, 2017
+Joint
+ventures¹
+Associates¹
+1,469
+256
+792
+Equity investments
+3,547
+Companies accounted for under the equity method
+E.ON Group
+€ in millions
+158
+Companies Accounted for under the Equity Method and Other Financial Assets
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+(13) Earnings per Share
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+149
+€ in millions
+147
+5,171
+504
+-203
+1
+60
+770
+14
+-689
+-1
+88
+-96
+253
+4
+-720
+-47
+-968
+-28,811
+57
+-2,882
+291
+-3,291
+24,052
+922
+-47,966
+1,250
+-1,919
+-91
+21,081
+297
+2,068
+-54,023
+952
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The goodwill of all cash-generating units whose respective
+goodwill as of the balance sheet date is material in relation to
+the total carrying amount of all goodwill shows a surplus of
+recoverable amounts over the respective carrying amounts and,
+therefore, based on current assessment of the economic situa-
+tion, only a significant change in the material valuation parameters
+would necessitate the recognition of goodwill impairment.
+The goodwill impairment testing performed in 2017 resulted
+in the recognition of an impairment charge of €6 million for the
+Energy Networks Romania cash-generating unit on the recover-
+able amount of €418 million (after-tax interest rate 5.68 percent;
+2016: €3.0 billion in connection with Uniper on the goodwill
+included in the discontinued operations).
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment, and of groups of these assets. If the goodwill of a
+cash-generating unit is combined with assets or groups of
+assets for impairment testing, the assets must be tested first.
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective forecasts
+for commodity market prices, future electricity and gas prices
+in the wholesale and retail markets, E.ON's investment activity,
+changes in the regulatory framework, as well as for rates of
+growth and the cost of capital. These assumptions are based on
+external market data from established providers and on internal
+estimates.
+since 2016 without a terminal value calculation. The interest
+rates used for discounting cash flows are calculated using mar-
+ket data for each cash-generating unit, and as of December 31,
+2017, ranged between 3.5 and 8.7 percent after taxes (2016:
+2.7 and 8.0 percent).
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for
+impairment-testing purposes are generally based on the three
+planning years of the medium-term plan plus two additional
+detailed planning years. In certain justified exceptional cases, a
+longer detailed planning period is used as the calculation basis.
+The cash flow assumptions extending beyond the detailed plan-
+ning period are determined using growth rates that generally
+correspond to the inflation rates in each of the currency areas
+where the cash-generating units are tested. In 2017, the inflation
+rate used for the euro area was 1.5 percent (2016: 1.5 percent).
+The recoverable amount for Renewables has been determined
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units.
+Because there were no binding sales transactions or market
+prices for the respective cash-generating units in 2017, fair val-
+ues were calculated based on discounted cash flow methods.
+IFRS 3 prohibits the amortization of goodwill. Instead, goodwill
+is tested for impairment at least annually at the level of the
+cash-generating units. Goodwill must also be tested for impair-
+ment at the level of individual cash-generating units between
+these annual tests if events or changes in circumstances indicate
+that the recoverable amount of a particular cash-generating
+unit might be impaired. Intangible assets subject to amortization
+and property, plant and equipment must generally be tested
+for impairment whenever there are particular events or external
+circumstances indicating the possibility of impairment.
+Impairments
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 150 through 153.
+Goodwill and Non-Current Assets
+154
+Notes
+25,242
+-31,565
+57
+-3,187
+7
+514
+-3,494
+27,609
+30
+-103
+2,198
+6
+16
+-18
+1,549
+-1,728
+0
+-136
+-1
+117
+-192
+1,521
+-22
+-3,015
+139
+-78
+-1
+-27
+61
+9
+-120
+124
+-502
+42
+-60
+127
+4
+-6
+Combined Group Management Report
+1
+-2
+-3,959
+546
+-68
+-10
+45
+-4
+336
+6
+-441
+2,329
+-1,788
+-147
+117
+-191
+1,516
+-8
+-3,075
+343
+-58
+-16
+1
+1
+-2
+515
+437
+5
+Consolidated Financial Statements
+-42
+155
+2016
+2017
+Covered interest share
+Minimum lease payments
+157
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Total
+56
+years
+Due in 1 to 5
+Due within 1 year
+€ in millions
+2017
+E.ON as Lessee-Payment Obligations under Finance Leases
+2016
+174
+Present values
+2016
+2017
+19
+18
+37
+37
+202
+214
+67
+67
+135
+147
+246
+246
+61
+72
+185
+Summary of Financial Highlights and Explanations
+Some of the leases contain price-adjustment clauses, as well as
+extension and purchase options. The corresponding payment
+obligations under finance leases are due as shown below:
+Due in more than 5 years
+354
+Borrowing costs in the amount of €43 million were capitalized
+in 2017 (2016: €37 million) as part of the historical cost of
+property, plant and equipment.
+Property, Plant and Equipment
+€5 million in research and development costs as defined by
+IAS 38 were expensed in 2017 (2016: €14 million).
+Intangible assets include emission rights and green certificates
+from different trading systems with a carrying amount of
+€146 million (2016: €130 million).
+Reversals of impairments on intangible assets in the amount of
+€3 million (2016: €0 million) were recognized in the reporting
+year.
+In 2017, the Company recorded an amortization expense of
+€174 million (2016: €191 million). Impairment charges on
+intangible assets amounted to €156 million in 2017 (2016:
+€147 million).
+Intangible Assets
+156
+Depreciation amounted to €1,638 million in 2017 (2016:
+€3,494 million). The change between the two reporting years is
+mainly due to the write-down of capitalized disposal costs of
+€1,568 million in 2016. This is related to the legislative imple-
+mentation of the Commission for Organizing and Financing the
+Nuclear Energy Phaseout (KFK).
+Notes
+Reversals of impairments in the core business recognized in
+previous years amounted to €57 million in 2016, significantly
+influenced by a reduction in the corporate tax rate and regula-
+tory developments in Hungary.
+Impairments on intangible assets in the core business amounted
+to €56 million in 2016. This is primarily attributable to the
+developments in Onshore & Solar Renewable Energies.
+range between summer and winter prices. Impairments of
+€72 million were charged to the Customer Solutions UK segment.
+This affected in particular various assets from the area of com-
+bined heat and power, mainly due to lower expected profitability
+in later capacity market years.
+In fiscal year 2016, a total of €387 million in impairments was
+charged to property, plant and equipment in the core business.
+In renewable energies in the Onshore & Solar business, property,
+plant and equipment totaling €211 million was written down
+in the USA, Poland and Italy, mainly as a result of lower expected
+revenues in these countries as well as adverse regulatory devel-
+opments in Poland. In the Energy Networks Germany segment,
+impairment losses of €71 million were recognized on property,
+plant and equipment. The largest single item in this context
+was a natural gas storage facility, which was written down by
+€56 million due to the continued difficult marketing situation of
+the corresponding capacities and the development of the trading
+Reversals of impairments on property, plant and equipment and
+intangible assets recognized in previous years amounted to
+€17 million in 2017, significantly influenced by developments
+in Hungary and in Renewables.
+These impairments of property, plant and equipment and of
+intangible assets at wind farms in the United States relate to
+several individual assets with recoverable amounts totaling
+€1,186 million. The main reason for this was significantly lower
+price expectations, in particular because of the revised assess-
+ment of CO2 reduction efforts in the US.
+Impairments on intangible assets amounted to approximately
+€156 million in 2017. Of this, around €123 million was attrib-
+utable to wind farms in the onshore wind/solar energy segment
+in Renewables.
+In fiscal year 2017, a total of €796 million in impairments was
+charged to property, plant and equipment. Of this amount,
+€628 million was attributable to property, plant and equipment
+at Renewables. Of this amount, around €40 million related to
+the offshore sector. The impairment recognized in the onshore
+segment amounted to €589 million. Wind farms in the United
+States (€553 million) suffered the greatest impact. Property,
+plant and equipment in the Customer Solutions UK segment
+was written down by €133 million, mainly due to technological
+developments and the significant increase in capital costs.
+In addition, further impairments related to Uniper were recog-
+nized. Following the resolution of the Annual Shareholders
+Meeting on the spinoff of the Uniper businesses and immediately
+before reclassification of the carrying amounts of all assets and
+liabilities to discontinued operations, an impairment of €2.9 billion
+was recognized in non-current assets in the second quarter of
+2016 on the basis of IAS 36. When shares in Uniper SE began
+trading on the Frankfurt Stock Exchange, the assets and the
+carrying amounts of the Uniper Group at E.ON were to be
+reviewed on the basis of the share price plus a market-based
+premium. The resulting additional impairment in the third and
+fourth quarters of 2016 of €7.0 billion was initially allocated
+to goodwill at €3.0 billion and was then, on the basis of relative
+book values, reclassified to property, plant and equipment
+(€3.6 billion) and intangible assets (€0.6 billion). This was offset
+by deferred taxes in the amount of €0.2 billion. All impairments
+are included in income from discontinued operations.
+352
+55
+€ in millions
+Land
+Other equipment, fixtures, furniture and office equipment
+E.ON as Lessee-Carrying Amounts of Capitalized Lease Assets
+The property, plant and equipment capitalized in the framework
+of finance leases had the following carrying amounts as of
+December 31, 2017:
+Net carrying amount of capitalized lease assets
+2017
+December 31,
+2016
+4
+4
+24
+27
+In 2017 there were restrictions on disposals involving primarily
+land and buildings, as well as technical equipment and machinery,
+in the amount of €2,858 million (2016: €2,415 million).
+In addition, write-downs on property, plant and equipment in
+the amount of €796 million (2016: €3,187 million) were made
+in the year under review. Reversals of impairments on property,
+plant and equipment in the amount of €14 million (2016:
+€57 million) were recognized in the reporting year.
+271
+256
+55
+65
+Buildings
+Technical equipment, plant and machinery
+Share of OCI Attributable to Non-Controlling Interests
+The capital increase became effective on March 20, 2017,
+when its implementation was entered in the Company's com-
+mercial register. Apart from that, the Authorized Capital 2012
+has not been used.
+issuing new registered no-par value shares against contributions
+in cash and/or in kind on one or more occasions until May 9, 2022
+(authorized capital in accordance with Sections 202 et seq. of
+the German Stock Corporation Act, Authorized Capital 2017).
+The Management Board is authorized, subject to the Supervisory
+Board's approval, to exclude shareholders' subscription rights.
+The Authorized Capital 2017 has not been used.
+Conditional Capital
+Corporate Functions/Other
+E.ON Group
+280
+2,701
+2,342
+The increase in non-controlling interests in the non-core business
+resulted primarily from capital increases in the Renewables
+segment and changes in shareholdings in the Energy Networks
+Germany segment.
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests:
+€ in millions
+288
+Fixed-term deposits with an
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 3, 2012, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase until
+May 2, 2017, the Company's capital stock by a total of up to
+€460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in kind
+(authorized capital pursuant to Sections 202 et seq. AktG,
+Authorized Capital 2012). One of the components of the Autho-
+rized Capital 2012 was an authorization of the Management
+Board, with the approval of the Supervisory Board, to exclude
+shareholders' subscription rights in accordance with Section
+186 (3)(4) AktG in the case of capital increases against cash
+contributions, if the issue price of the new shares is not signifi-
+cantly lower than the stock exchange price and the shares
+issued in connection with this authorization to exclude sub-
+scription rights do not exceed a total of 10 percent of the share
+capital, either at the time the authorization becomes effective
+or at the time it is exercised.
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise
+by holders of option or conversion rights, and those arising from
+compliance with the mandatory conversion of bonds with con-
+version or option rights, profit participation rights or profit par-
+ticipating bonds that have been issued or guaranteed by E.ON SE
+or a Group company of E.ON SE as defined by Section 18 AktG
+under the authorization approved by the Annual Shareholders
+meeting of May 10, 2017, under agenda item 9, and to the
+extent that no cash settlement has been granted in lieu of con-
+version or exercise of an option.
+2,146
+Balance as of January 1, 2016
+original maturity greater than 3 months
+23
+Restricted cash and cash equivalents
+1,782
+852
+Cash and cash equivalents
+2,708
+5,574
+Total
+5,160
+8,573
+1
+In 2017, there was €17 million in restricted cash (2016:
+€27 million) with a maturity greater than three months. In addi-
+tion, cash and cash equivalents with a maturity of less than
+three months in the amount of €1,033 million (2016: €0) are
+earmarked for the fulfillment of insurance obligations of Ver-
+sorgungskasse Energie VVaG i.L. (VKE i.L.).
+VKE i.L. was already in liquidation at the end of 2017. The
+shares of the guarantee fund assets of VKE i.L. attributable to
+the E.ON Group will be transferred to the CTA (see Note 24) as
+a follow-on solution in the first half of 2018 and will be treated
+as plan assets in the future. Non-consolidated shares of the
+guarantee fund assets of VKE i.L. will be correspondingly trans-
+ferred to the respective follow-on solutions of the member
+companies concerned and thus deconsolidated in the future.
+In the prior year, VKE i.L. had earmarked short-term securities
+with an original maturity of more than three months amounting
+to €275 million for the fulfillment of legal insurance obligations,
+which were fully liquidated in the year under review (see Note 31).
+Cash and cash equivalents include €1,869 million (2016:
+€4,668 million) in checks, cash on hand and balances in Bundes-
+bank accounts and at other financial institutions with an original
+maturity of less than three months, to the extent that they are
+not restricted.
+(19) Capital Stock
+The capital stock is subdivided into 2,201,099,000 registered
+shares with no par value (no-par-value shares) and amounts to
+€2,201,099,000 (2016: €2,001,000,000). The capital stock of
+the Company was provided by way of conversion of E.ON AG
+into a European Company (SE) and through a capital increase
+carried out on March 20, 2017, partially using the Authorized
+Capital 2012, which expired on May 2, 2017.
+The authorization of the Company to acquire treasury shares by
+resolution of the Annual Shareholders Meeting of May 3, 2012,
+expired on May 2, 2017. Pursuant to a resolution by the Annual
+Shareholders Meeting of May 10, 2017, the Company is autho-
+rized to purchase own shares until May 9, 2022. The shares
+purchased, combined with other treasury shares in the posses-
+sion of the Company, or attributable to the Company pursuant
+to Sections 71a et seq. AktG, may at no time exceed 10 percent
+of its capital stock. The Management Board was authorized at
+the aforementioned Annual Shareholders Meeting to cancel any
+shares thus acquired without requiring a separate shareholder
+resolution for the cancellation or its implementation. The total
+number of outstanding shares as of December 31, 2017, was
+2,167,149,433 (December 31, 2016: 1,952,396,600). As of
+December 31, 2017, E.ON SE held a total of 33,949,567
+treasury shares (December 31, 2016: 48,603,400) having a
+book value of €1,126 million (equivalent to 1.54 percent or
+€33,949,567 of the capital stock).
+The Company has further been authorized by the Annual Share-
+holders Meeting to buy shares using put or call options, or a
+combination of both. When derivatives in the form of put or call
+options, or a combination of both, are used to acquire shares,
+the option transactions must be conducted with a financial insti-
+tution or a company operating in accordance with Section 53 (1)
+sentence 1 or Section 53b (1) sentence 1 or 7 of the German
+Banking Act (KWG) or at market terms on the stock exchange.
+No shares were acquired in 2017 using this purchase model.
+As part of the scrip dividend for the 2016 fiscal year, shareholder
+cash dividend entitlements totaling €107 million were settled
+through the issue and distribution of 14,653,833 treasury
+shares. The issue of treasury shares reduced by €588 million
+the valuation allowance for treasury shares, which is measured
+at cost. This amount represents the difference between the
+cost and the subscription price of the shares. The discount of
+€3 million granted on the current share price is charged to
+retained earnings. No scrip dividend was offered in the prior year.
+Notes
+164
+Authorized Capital
+On March 16, 2017, the Management Board decided, with the
+approval of the Supervisory Board, to make partial use of the
+Authorized Capital 2012 and to increase the Company's capital
+stock, excluding shareholder subscription rights, in accordance
+with Sections 203 (2) and 186 (3)(4) of the German Stock Cor-
+poration Act (AktG), from €2,001,000,000 by €200,099,000 to
+€2,201,099,000 through the issue of 200,099,000 new regis-
+tered shares with no-par value with profit participation rights
+as of January 1, 2016, against cash contributions. This corre-
+sponds to an increase in the Company's existing capital stock of
+slightly less than 10 percent both at the time the Authorized
+Capital 2012 becomes effective and at the time the Authorized
+Capital 2012 is used. The exclusion of subscription rights was
+necessary in order to be able to take advantage of the favorable
+market situation for such a capital measure in the short term at
+the time of the partial use of the Authorized Capital 2012 from
+the point of view of administration and to achieve the highest
+possible issue proceeds by fixing prices in line with the market.
+Changes
+-262
+Changes
+-201
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+167
+Subsidiaries with material non-controlling interests are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests as
+required by IFRS 12 for subsidiaries with material non-controlling
+interests can be found in the list of shareholdings pursuant to
+Section 313 (2) HGB (see Note 36).
+The following tables provide a summary overview of cash flow
+and significant line items of the aggregated income statements
+and of the aggregated balance sheets of subsidiaries with
+material non-controlling interests:
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data as of December 31
+E.ON România Group
+E.DIS Group
+€ in millions
+2017
+2016
+2017
+2016
+2017
+Avacon Group
+2016
+Non-controlling interests in equity
+-122
+-1
+61
+-25
+Balance as of December 31, 2017
+166
+Cash flow hedges
+Available-for-sale
+securities
+Currency translation
+adjustments
+Remeasurements of
+defined benefit plans
+6
+5
+Balance as of December 31, 2016
+-631
+2
+4
+534
+-116
+8
+9
+-97
+The Conditional Capital 2017 was not used.
+-8
+-10
+-146
+Voting Rights
+-4,552
+In accordance with the resolution passed by the Annual Share-
+holders Meeting on May 10, 2017, the Management Board was
+authorized, with the approval of the Supervisory Board, to
+increase the Company's share capital by up to €460 million by
+86
+Renewables
+Non-Core Business
+580
+376
+1
+€ in millions
+December 31,
+Non-Controlling Interests
+Non-controlling interests by segment as of the dates indicated
+are shown in the following table:
+(23) Non-Controlling Interests
+Notes
+The change in OCI attributable to companies accounted for using
+the equity method primarily results from disadvantageous
+exchange rate differences, in particular from shareholdings in
+Turkey.
+-965
+-1,404
+Balance as of December 31 (after taxes)
+-1
+-3
+2016
+-964
+2017
+-1,401
+Balance as of December 31 (before taxes)
+Taxes
+72
+€ in millions
+Other
+1
+Energy Networks
+Germany
+2017
+2016
+1,677
+1,513
+442
+1,306
+-1
+1,135
+Sweden
+ECE/Turkey
+371
+378
+Customer Solutions
+163
+166
+Germany
+90
+79
+UK
+1
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method.
+The change in other comprehensive income is primarily the
+result of exchange-rate differences recognized on the balance
+sheet. The change in the prior year was primarily the result of
+the recognition of the OCI of the Uniper Group in the amount
+of €3.7 billion (of which €2.2 billion related to non-controlling
+interests). For further information, please refer to the Consoli-
+dated Statements of Recognized Income and Expenses of the
+E.ON Group on page 111 and the Statement of Changes in
+Equity on pages 116 and 117.
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+158,672,779
+Absolute
+Voting rights
+7.21
+indirect
+Percentages
+Allocation
+rights on
+Aug. 31, 2017
+5%
+Sep. 5, 2017
+BlackRock Inc., Wilmington, U.S.
+Gained voting
+Threshold
+exceeded
+Date of notice
+Stockholder
+Information on Stockholders of E.ON SE
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+165
+(20) Additional Paid-in Capital
+(22) Changes in Other Comprehensive Income
+In 2017 shareholders were given the option of receiving their
+dividend in cash or exchanging a portion of it for shares of E.ON
+stock. Accounting for a participation rate of roughly 33 percent,
+14,653,833 treasury shares were issued for distribution. This
+reduced the cash distribution to €345 million.
+A proposal to distribute a cash dividend for 2017 of €0.30 per
+share will be submitted to the Annual Shareholders Meeting. For
+2016, shareholders at the May 10, 2017, Annual Shareholders
+Meeting voted to distribute a dividend of €0.21 for each dividend-
+paying ordinary share. Based on a €0.30 dividend, the total profit
+distribution is €650 million (2016: €410 million).
+The amount of retained earnings available for distribution is
+€1,839 million (2016: €345 million).
+pursuant to Section 150 (3) and (4) AktG. Other retained earnings
+decreased by €3 million because of the discount granted on the
+current share price in the framework of the scrip dividend.
+As of December 31, 2017, these German-GAAP retained earn-
+ings totaled €1,884 million (2016: €472 million). Of this amount,
+legal reserves of €45 million (2016: €45 million) are restricted
+Under German securities law, E.ON SE shareholders may receive
+distributions from the balance sheet profit of E.ON SE reported
+as available for distribution in accordance with the German
+Commercial Code.
+-8,540
+-8,495
+-4,597
+45
+The following notices pursuant to Section 33 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+2017
+December 31,
+2016
+Total
+Other retained earnings
+Legal reserves
+€ in millions
+Retained Earnings
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+(21) Retained Earnings
+was increased by €1,139 million. By contrast, additional paid-in
+capital decreased by €478 million primarily due to the issue
+of treasury shares as part of the scrip dividend. This amount
+represents the difference between the cost and the subscription
+price of the shares.
+Additional paid-in capital increased by €661 million during 2017,
+to €9,862 million (2016: €9,201 million). The change in addi-
+tional paid-in capital resulted from the capital increase on
+March 16, 2017. In this connection, additional paid-in capital
+45
+463
+CEO Letter
+463
+2016
+2017
+2016
+2017
+Avacon Group
+E.DIS Group
+E.ON România Group
+2016
+2017
+€ in millions
+Subsidiaries with Material Non-Controlling Interests-Earnings Data
+¹Non-controlling interests in the lead company of the respective group; share of segment in Romania.
+449
+804
+443
+580
+356
+307
+Share of earnings attributable to non-controlling interests
+Current liabilities
+38
+58
+132
+59
+Comprehensive income
+231
+146
+175
+123
+89
+Net income/loss
+3,765
+2,785
+2,760
+1,201
+1,300
+Sales
+98
+48
+39
+1,429
+1,434
+522
+151
+38
+Operating cash flow
+58
+90
+23
+35
+47
+15.50
+15.50
+46.65
+46.65
+Ownership interest (in %)
+88
+91
+104
+50
+376
+254
+504
+374
+526
+246
+260
+Non-current liabilities
+334
+690
+357
+381
+205
+772
+Current assets
+2,905
+2,978
+2,054
+2,255
+1,031
+1,077
+Non-current assets
+523
+445
+84
+༈ ། །
+-1,060
+370
+income after taxes
+Proportional share of total comprehensive
+49.00
+49.00
+36.85
+36.85
+4,009
+3,620
+36
+634
+553
+33
+3,339
+3,034
+12,383
+12,093
+87
+11
+69
+38
+Equity-method earnings
+3
+-2
+4
+1
+-10
+Consolidation adjustments
+43
+45
+17
+9
+61
+66
+476
+Proportional share of net income after taxes
+43
+45
+18
+11
+5,299
+5,137
+Total
+Other countries
+United Kingdom
+Germany
+Present value of all defined benefit obligations
+€ in millions
+Provisions for Pensions and Similar Obligations
+The present value of the defined benefit obligations, the fair
+value of plan assets and the net defined benefit liability (funded
+status) compared to the prior year are presented below:
+assets under IAS 19 but which are mostly intended for the cov-
+erage of retirement benefit obligations at E.ON Group companies
+in Germany (see Note 31). The reinsurance of pension obligations
+via VKE was terminated in the year under review. At the end of
+the reporting year, VKE was in liquidation after the meeting of
+the fund's members decided to wind it up and the closure was
+approved by the Federal Financial Supervisory Authority (BaFin).
+In addition to the reported plan assets, Versorgungskasse
+Energie VVaG i.L. (VKE), which is included in the Consolidated
+Financial Statements, administers another fund holding assets
+of €1.1 billion (2016: €1.0 billion) that do not constitute plan
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €15.7 billion,
+were covered by plan assets having a fair value of €12.1 billion
+as of December 31, 2017. This corresponds to a funded status
+of 77 percent.
+(24) Provisions for Pensions and Similar
+Obligations
+168
+Notes
+There are no major restrictions beyond those under customary
+corporate or contractual provisions.
+203
+3,326
+Fair value of plan assets
+Germany
+United Kingdom
+Other countries
+7,073
+6,945
+16,392
+15,713
+47
+5,933
+5,690
+44
+10,412
+301
+9,979
+2017
+December 31,
+Total
+Other countries
+United Kingdom
+Germany
+Net defined benefit liability/asset (-)
+Total
+2016
+560
+-2,430
+856
+452
+1,001
+921
+4,040
+3,705
+15,272
+13,744
+Non-current liabilities (including provisions)
+208
+520
+316
+304
+548
+374
+20,796
+16,395
+Current liabilities (including provisions)
+751
+194
+Equity
+6,344
+36.85
+15.50
+15.50
+46.65
+46.65
+Ownership interest (in %)
+64
+67
+582
+627
+Non-controlling interests
+32
+79
+757
+791
+2,422
+2,717
+6,981
+214
+293
+242
+€ in millions
+Západoslovenská
+energetika a.s.
+Gasag Berliner
+Gaswerke AG
+Nord Stream AG
+Uniper Group
+Material Associates-Balance Sheet Data as of December 31
+In contrast to the presentation in the 2016 Annual Report, hidden
+reserves from purchase price allocations and currency trans-
+lation effects have been allocated directly to the company data
+in the tables below. This also applies to prior-year values.
+The Group adjustments shown in the table mainly relate to
+goodwill determined as part of initial recognition, temporary
+differences and effects from the elimination of intragroup profits.
+in Uniper SE on the basis of the data published by Uniper as of
+September 30, 2017.
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of comprehen-
+sive income of the material companies accounted for under the
+equity method. The material associates in the E.ON Group are
+Nord Stream AG, Gasag Berliner Gaswerke AG, Západoslovenská
+energetika a.s. and, until the end of September 2017, Uniper SE.
+Since the end of September 2017, Uniper SE has been reported
+as an investment held for sale and no longer as a company
+accounted for at equity, so that income from the equity method
+of accounting only accrued in the first nine months of the finan-
+cial I year 2017. The tables below present a reconciliation to the
+pro rata equity result or the carrying amount of the investment
+159
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Non-current assets²
+Current assets
+20171
+2016
+589
+696
+21,672
+18,353
+797
+837
+1,781
+1,774
+36.85
+6,421
+20,740
+18,767
+2016
+2017
+2016
+2017
+2016
+2017
+6,100
+49.00
+49.00
+Proportional share of equity
+-17
+99
+Non-controlling interests in the net income/
+loss from continuing operations
+87
+91
+119
+88
+396
+426
+-3,234
+1,119
+Net income/loss from continuing operations
+1,001
+1,065
+1,167
+1,105
+1,079
+10
+10
+Net income from discontinued operations
+-52
+Total comprehensive income
+1
+47
+14
+49
+134
+804
+-263
+1,076
+Other comprehensive income
+51
+36
+8
+303
+265
+201
+Dividend paid out
+-62
+58
+466
+67,285
+Sales
+192
+193
+81
+81
+9
+10
+-10
+2,954
+Carrying amount of equity investment
+Consolidation adjustments
+16
+39
+255
+267
+375
+421
+2,688
+2,964
+2,688
+431
+384
+348
+2016
+2017
+2016
+2017
+2016
+2017
+2016
+20171
+52,938
+€ in millions
+Gasag Berliner
+Gaswerke AG
+Nord Stream AG
+Uniper Group
+Material Associates-Earnings Data
+¹Uniper value as of September 30, 2017. Since September 30, 2017, Uniper has been recognized as an investment held for sale and is no longer valued under the equity method.
+2Undisclosed accruals/provisions from acquisitions are recognized in assets.
+208
+232
+336
+Západoslovenská
+energetika a.s.
+0
+67
+65
+-794
+-737
+Balance as of December 31
+16
+7
+188
+187
+Disposals
+87
+63
+Reversals of write-downs
+-236
+-200
+129
+Change in scope of consolidation
+Write-downs
+-978
+-794
+1"Other" includes also currency translation adjustments.
+Balance as of January 1
+Other¹
+€ in millions
+2016
+2017
+Total
+Due in more than 5 years
+Due in 1 to 5 years
+Due within 1 year
+€ in millions
+E.ON as Lessor-Finance Leases
+Total trade receivables
+Net value of impaired receivables
+more than 360 days
+181 to 360 days
+91 to 180 days
+61 to 90 days
+up to 60 days
+Not impaired and past-due by
+Not impaired and not past-due
+Aging Schedule of Trade Receivables
+2016
+2017
+€ in millions
+1,553
+965
+1,228
+452
+Receivables from derivative financial instruments
+3,999
+3,879
+Trade receivables
+553
+463
+452
+236
+Financial receivables and other financial assets
+235
+409
+160
+199
+Other operating assets
+1,450
+143
+1,755
+Valuation Allowances for Trade Receivables
+Valuation allowances for trade receivables have changed as
+shown in the following table:
+The aging schedule of trade receivables is presented in the table
+below:
+As of December 31, 2017, other financial assets include receiv-
+ables from owners of non-controlling interests in jointly owned
+power plants of €50 million (2016: €297 million). The decline is
+mainly due to the implementation of the Act on the Reorganiza-
+tion of Responsibility in Nuclear Waste Disposal.
+In 2017, there were unguaranteed residual values of €9 million
+(2016: €12 million) due to E.ON as lessor under finance leases.
+Some of the leases contain price-adjustment clauses, as well as
+extension and purchase options.
+162
+Notes
+2,314
+3,183
+7,182
+6,017
+Total
+1,761
+6,719
+1,371
+5,781
+Trade receivables and other operating assets
+208
+1,823
+3,294
+584
+614
+163
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+ordinance on advance payments for the establishment of facili-
+ties for the safe custody and final storage of radioactive wastes
+in the country ("Endlagervorausleistungsverordnung"); in the
+years 1982 to 2003, excessive advance payments for final stor-
+age facilities were initially made in this connection. However,
+the refund received since then did not cover the interest claims
+in this connection. E.ON expects to receive compensation of
+€84 million.
+In addition, the E.ON Group's contingent assets as of December 31,
+2017, amount to €87 million (prior year: €17 million). These
+mainly result from the transfer of responsibility for the search,
+construction and operation of final storage to the German state.
+This releases E.ON from the regulatory scope of Germany's
+The present value of the outstanding lease payments is
+reported under receivables from finance leases.
+372
+329
+191
+164
+563
+493
+(18) Liquid Funds
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+Liquid Funds
+€ in millions
+743
+707
+Non-controlling interests in equity (in %)¹
+29.6
+28.0
+33.0
+33.0
+38.5
+186
+38.5
+647
+original maturity greater than 3 months
+Current securities with an
+2,147
+670
+2017
+December 31,
+2016
+Securities and fixed-term deposits
+Dividends paid out to non-controlling interests
+Other financial receivables and financial assets
+160
+28
+Receivables from finance leases are primarily the result of cer-
+tain electricity delivery contracts that must be treated as leases
+according to IFRIC 4. The nominal and present values of the
+outstanding lease payments have the following due dates:
+With regard to the not impaired and not past-due portfolio of
+trade receivables, there is no indication at the balance sheet
+date that the debtors will not be able to meet their payment
+obligations.
+The individual impaired receivables are due from a large number
+of retail customers from whom it is unlikely that full repayment
+will ever be received. Receivables are monitored within the vari-
+ous units.
+3,999
+3,879
+91
+112
+33
+38
+61
+54
+63
+66
+37
+38
+420
+388
+Gross investment in finance
+lease arrangements
+Unrealized interest income
+2017
+2016
+233
+188
+132
+133
+109
+103
+241
+236
+47
+54
+35
+33
+89
+69
+Present value of minimum
+lease payments
+2016
+2017
+2016
+2017
+36
+495
+318
+292
+1,354
+3,298
+1,387
+1,219
+2,464
+1,221
+455
+1,225
+433
+8
+28
+38
+1,314
+3,525
+1,732
+602
+1,857
+50.00
+1,063
+50.00
+694
+181
+915
+3,389
+2,715
+2016
+2017
+2016
+2017
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+736
+1,759
+705
+59
+110
+11
+677
+1,649
+50.00
+194
+1,099
+903
+Current financial liabilities
+Cash and cash equivalents
+Non-current liabilities (including provisions)
+Current liabilities (including provisions)
+Current assets
+Non-current assets
+€ in millions
+Material Joint Ventures-Balance Sheet Data as of December 31
+Enerjisa Üretim Santralleri A.Ş. was spun off from Enerjisa
+Enerji A.Ş. in September 2017, so that no comparative figures
+for the prior year are available. Note 4 provides additional infor-
+mation.
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income state-
+ments of the joint ventures accounted for under the equity
+method, Enerjisa Enerji A.Ş. and Enerjisa Üretim Santralleri A.Ş.
+160
+Notes
+¹Uniper value as of September 30, 2017. Since September 30, 2017, Uniper has been recognized as an investment held for sale and is no longer valued under the equity method.
+43
+48
+15
+9
+Non-current financial liabilities
+Equity
+Ownership interest (in %)
+Proportional share of equity
+3,076
+7,581
+3,279
+2016
+2017
+2016
+2017
+At the Annual Shareholders Meeting of May 10, 2017, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in
+the amount of up to €175 million.
+31
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+Interest income/expense
+Write-downs
+Net income/loss from continuing operations
+Sales
+€ in millions
+Material Joint Ventures-Earnings Data
+Carrying amount of equity investment
+Consolidation adjustments
+Income taxes
+-181
+-88
+-190
+Raw materials and supplies
+2016
+2017
+€ in millions
+December 31,
+No inventories have been pledged as collateral.
+Write-downs totaled €8 million in 2017 (2016: €7 million).
+Reversals of write-downs amounted to €11 million in 2017
+(2016: €3 million).
+Raw materials, goods purchased for resale and finished products
+are generally valued at average cost.
+Inventories
+The following table provides a breakdown of inventories as of
+the dates indicated:
+(16) Inventories
+161
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+617
+677
+Goods purchased for resale
+130
+37
+Receivables from finance leases
+Non-current
+Current
+December 31, 2016
+December 31, 2017
+Non-current
+Current
+€ in millions
+Report of the Supervisory Board
+Receivables and Other Assets
+(17) Receivables and Other Assets
+785
+794
+Total
+46
+47
+Work in progress and finished products
+62
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+54
+CEO Letter
+Of investments in associates, the shareholding in Nord Stream AG
+(carrying amount in 2017: €431 million; 2016: €384 million)
+was restricted because it was pledged as collateral for financing
+as of the balance sheet date.
+Ownership interest (in %)
+-369
+-634
+-257
+Total comprehensive income
+-188
+-665
+-438
+Other comprehensive income
+Dividend paid out
+47
+-65
+-65
+-78
+-235
+-210
+-106
+50.00
+50.00
+50.00
+Proportional share of total comprehensive income after taxes
+values 2016: €2,707 million) relate mainly to the investment
+in Uniper SE, which is reported as an asset held for sale as of
+December 31, 2017.
+As of December 31, 2017, no company accounted for under
+the equity method is marketable. The figures reported in the
+previous year (carrying amounts 2016: €2,703 million; fair
+The material associates and the material joint ventures are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests as
+required by IFRS 12 for material joint arrangements and asso-
+ciates can be found in the list of shareholdings pursuant to Sec-
+tion 313 (2) HGB (see Note 36).
+-28
+20
+24
+62
+4
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+-67
+Consolidation adjustments
+-90
+16
+91
+Proportional share of net income after taxes
+-184
+-317
+-128
+Equity-method earnings
+At the Annual Shareholders Meeting of May 3, 2012, share-
+holders approved a conditional increase of the capital stock (with
+the option to exclude shareholders' subscription rights) in the
+amount of €175 million, which was authorized until May 2, 2017
+(Conditional Capital 2012). The Conditional Capital 2012 was
+not used.
+changes in financial assumptions
+2016
+The following table lists the miscellaneous provisions as of the
+dates indicated:
+Miscellaneous Provisions
+December 31, 2017
+December 31, 2016
+€ in millions
+Nuclear-waste management obligations
+Personnel obligations
+Other asset retirement obligations
+Current
+(25) Miscellaneous Provisions
+Non-current
+Non-current
+408
+10,047
+10,530
+10,848
+135
+950
+63
+760
+28
+Current
+36
+634
+3,339
+-1,021
+-62
+-170
+Exchange rate differences
+-23
+-21
+-2
+-105
+-107
+2
+Other
+-119
+-116
+-3
+4
+6
+-2
+Net liability as of December 31
+3,620
+3,034
+553
+33
+4,009
+1,190
+-1,253
+17
+Supplier-related obligations
+To fund the pension plans for the German Group companies,
+plan assets were established in the form of Contractual Trust
+Arrangements ("CTAS"). The major part of these plan assets is
+administered by E.ON Pension Trust e.V. as trustee in accordance
+with specified investment principles. Additional domestic plan
+assets are managed by smaller German pension funds.
+Only at the pension funds and at VKE, which is now in liquidation,
+do regulatory provisions exist in relation to capital investment
+or funding requirements. Against the backdrop of ongoing liqui-
+dation, VKE's assets are being held in current, liquid form until
+they are transferred to appropriate follow-up solutions-at E.ON
+in the form of the CTAs-and reported as restricted cash at the
+end of 2017. Additional plan assets will be created upon transfer
+of the funds into the CTA in 2018.
+United Kingdom
+In the United Kingdom, there are various pension plans. Until
+2005 and 2008, respectively, employees were covered by defined
+benefit plans, which for the most part were final-pay plans and
+make up the majority of the pension obligations currently reported
+for the United Kingdom. These plans were closed to employees
+hired after these dates. Since then, new hires are offered a defined
+contribution plan. Aside from the payment of contributions,
+this plan entails no additional actuarial risks for the employer.
+Benefit payments to the beneficiaries of the currently existing
+defined benefit pension plans are adjusted for inflation as
+measured by the U.K. Retail Price Index ("RPI").
+Plan assets in the United Kingdom are administered in a pension
+trust. The trustees are selected by the members of the plan or
+appointed by the entity. In that capacity, the trustees are partic-
+ularly responsible for the investment of the plan assets.
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding conditions
+be performed every three years. The actuarial assumptions
+underlying the valuation are agreed upon by the trustees and
+E.ON UK plc. They include presumed life expectancy, wage and
+salary growth rates, investment returns, inflationary assump-
+tions and interest rate levels. The most recent technical valuation
+took place as of March 31, 2015, and resulted in a technical
+funding deficit of £967 million. In the framework of the agreed
+deficit repair plan, annual payments of £65 million will be made
+to the pension trust through 2026.
+Other Countries
+The remaining pension obligations are spread across various
+international activities of the E.ON Group.
+However, these benefit plans in Sweden, Romania, the Czech
+Republic, Italy and the United States are of minor significance
+from a Group perspective.
+in place unchanged. Based on market developments, an annual
+determination is made as to whether the minimum interest rates
+or possibly a higher interest rate is used for the formation of
+pension or capital units. Future pension increases at a rate of
+1 percent are guaranteed for a large number of active employees.
+For the remaining eligible individuals, pensions are adjusted mostly
+in line with the rate of inflation, usually in a three-year cycle.
+Description of the Benefit Obligation
+Changes in the Defined Benefit Obligation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+171
+2017
+2016
+The following table shows the changes in the present value of
+the defined benefit obligations for the periods indicated:
+170
+Notes
+The benefit expense for all the cash balance plans mentioned
+above is dependent on compensation and is determined at differ-
+ent percentage rates based on the ratio between compensation
+and the contribution limit in the statutory retirement pension
+system in Germany. Through December 31, 2016, the cash bal-
+ance plans contained different interest rate assumptions for the
+pension and capital units. Since January 1, 2017, a standard-
+ized interest rate model has been used for the BAS Plan, the
+"Zukunftssicherung" plan and the IQ plan, in which the interest
+rate is adjusted to market developments and hedged via mini-
+mum interest rates. The pension units for previous years remain
+7
+30
+3
+25
+Customer-related obligations
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+169
+Description of the Benefit Plans
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning, most
+active and former E.ON Group employees are also covered by
+occupational benefit plans. Both defined benefit plans and defined
+contribution plans are in place at E.ON. Benefits under defined
+benefit plans are generally paid upon reaching retirement age,
+or in the event of disability or death.
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates, as
+well as inflation developments and rising wages and salaries. In
+order to avoid exposure to future risks from occupational benefit
+plans, newly designed pension plans were introduced at the
+major German and foreign E.ON Group companies beginning in
+1998.
+The existing entitlements under defined benefit plans as of the
+balance sheet date cover about 48,000 retirees and their bene-
+ficiaries (2016: 50,000), about 14,000 former employees with
+vested entitlements (2016: 14,000) and about 27,000 active
+employees (2016: 28,000). The corresponding present value of
+the defined benefit obligations is attributable to retirees and their
+beneficiaries in the amount of €9.3 billion (2016: €9.8 billion),
+to former employees with vested entitlements in the amount
+of €2.5 billion (2016: €2.5 billion) and to active employees in the
+amount of €3.9 billion (2016: €4.1 billion).
+The features and risks of defined benefit plans are shaped by
+the general legal, tax and regulatory conditions prevailing in the
+respective country. The configurations of the major defined
+benefit and defined contribution plans within the E.ON Group
+are described in the following discussion.
+Germany
+Active employees at the German Group companies are predom-
+inantly covered by cash balance plans. In addition, some final-pay
+arrangements, and a small number of fixed-amount arrangements,
+still exist under individual contracts.
+The majority of the reported benefit obligation toward active
+employees is centered on the "BAS Plan," a pension unit system
+launched in 2001, and on a "provision for the future" ("Zukunfts-
+sicherung") plan, a variant of the BAS Plan that emerged from
+the harmonization in 2004 of numerous benefit plans granted
+in the past. In the "Zukunftssicherung" benefit plan, vested
+final-pay entitlements are considered in addition to the defined
+contribution pension units when determining the benefit. These
+plans are closed to new hires.
+The plans described in the preceding paragraph generally provide
+for ongoing pension benefits that generally are payable upon
+reaching the age threshold, or in the event of disability or death.
+The only benefit plan open to new hires is the E.ON IQ contribu-
+tion plan (the "IQ Plan"). This plan is a "units of capital" system
+that provides for the alternative payout options of a prorated
+single payment and payments of installments in addition to the
+payment of a regular pension.
+1,120
+€ in millions
+2
+Changes in scope of consolidation
+2
+2022
+678
+443
+233
+2
+2023-2027
+3,509
+2,283
+1,212
+228
+14
+6,823
+4,451
+2,348
+24
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 19.7 years as of
+December 31, 2017 (2016: 19.8 years).
+Notes
+Description of the Net Defined Benefit Liability
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of
+the defined benefit obligations and the fair value of plan assets:
+Changes in the Net Defined Benefit Liability
+176
+Total
+444
+674
+2021
+Benefit payments to cover defined benefit obligations totaled
+€684 million in 2017 (2016: €702 million); of this amount,
+€16 million (2016: €30 million) was not paid out of plan assets.
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2017, for the next ten years are
+shown in the following table:
+Prospective Benefit Payments
+€ in millions
+Total
+Germany
+United
+Kingdom
+Other
+countries
+2018
+645
+420
+223
+2
+2019
+651
+426
+223
+2
+2020
+666
+435
+229
+2
+2017
+2
+€ in millions
+4,009
+-308
+-9
+1
+1,712
+1,256
+419
+37
+Employer contributions to plan assets
+-195
+-61
+-316
+-134
+-437
+-433
+-1
+Net benefit payments
+-16
+-12
+-4
+-30
+-29
+-1
+-871
+Changes from remeasurements
+9
+91
+Total Germany
+3,339
+United
+Kingdom
+Other
+United
+countries
+Total
+Germany
+Kingdom
+2016
+Other
+countries
+634
+36
+4,208
+3,320
+726
+162
+Net periodic pension cost
+278
+190
+86
+2
+344
+244
+Net liability as of January 1
+Defined benefit obligation as of January 1
+Employer service cost
+16,392
+Total Germany
+10,412
+obligations
+Customer-related
+37
+-1
+1,218
+90
+-3
+13
+-8
+10
+263
+12
+Supplier-related obligations
+12
+-23
+1,137
+obligations
+Other asset retirement
+1,085
+-37
+-3
+-175
+28
+70
+-29
+-43
+-15
+-49
+27,617
+Total
+2,859
+-120
+-1,133
+2
+-825
+1,445
+4
+-7
+-26
+3,519
+Other
+507
+-13
+-27
+78
+469
+and similar obligations
+Environmental remediation
+261
+485
+68
+-8
+-493
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Changes in Miscellaneous Provisions
+The changes in the miscellaneous provisions are shown in the
+table below:
+15,609
+12,008
+14,381
+2,041
+Combined Group Management Report
+Total
+1,152
+1,628
+1,231
+Other
+446
+23
+478
+29
+Environmental remediation and similar obligations
+43
+2,367
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+177
+-10,289
+-237
+44
+52
+823
+Personnel obligations
+21,378
+obligations
+Nuclear-waste management
+2017
+mates
+cations¹ Reversals
+Utilization
+Additions
+Dec. 31,
+in esti-
+Reclassifi-
+Changes
+Unwinding
+of dis-
+counts
+Changes in
+scope of
+consolida-
+tion
+ences
+Exchange
+Jan. 1, rate differ-
+2017
+€ in millions
+10,455
+2,145
+-1,304
+-10,290
+Gains (-) and losses (+) on settlements
+Interest cost on the present value of the
+defined benefit obligations
+379
+213
+165
+1
+486
+276
+206
+6
+4
+-48
+-61
+11
+2
+2,650
+1,608
+1,007
+35
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+Remeasurements
+4
+10
+10
+United
+Kingdom
+Other
+countries
+Total
+Germany
+United
+Kingdom
+Other
+countries
+5,933
+47
+17,920
+11,453
+6,280
+187
+150
+89
+60
+1
+237
+169
+63
+5
+Past service cost
+46
+36
+-122
+-121
+-1
+ment amounts, discounted to the balance sheet date.
+Retirement and decommissioning
+203
+2017
+December 31,
+Remaining with E.ON
+€ in millions
+Nuclear Waste Management Obligations in Germany (Less Advance Payments)
+In the following, the provision items after deduction of advance
+payments are classified based on technical criteria:
+law are that E.ON, including the shares of its equity interests
+attributable to it, is to transfer financial responsibility for interim
+and final disposal to the state in return for payment of a base
+amount of about €7.6 billion. Final release of liability occurs
+against payment of an optional risk premium of approximately
+€2.6 billion. Taking into account the advantages and disadvan-
+tages, E.ON decided to pay the base amount and the risk premium
+as of July 3, 2017, as the earliest possible payment date. E.ON
+is as a result ultimately exempted from financial responsibility
+for interim and final storage. Consequently, E.ON no longer rec-
+ognizes any provisions for the costs of interim and final storage.
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are
+not based on contractual agreements. The provisions were mea-
+sured taking into account the amendments to the German
+Nuclear Energy Act of August 6, 2011, and the Act on the Reor-
+ganization of Responsibility in Nuclear Waste Disposal, passed in
+December 2016 in the Bundestag and Federal Council. The Act
+entered into force on June 16, 2017, following the EU Commis-
+sion's positive decision on state aid. The key provisions of the
+Provisions for the disposal of spent nuclear fuel rods also com-
+prise the contractual costs of finalizing reprocessing and the
+associated return of waste to interim storage, as well as costs
+incurred for expert handling, including the necessary interim
+storage containers and transport to interim storage.
+178
+Notes
+The asset retirement obligations recognized include the anticipated
+costs of post- and service operation of the facility, dismantling
+costs, and the cost of removal and disposal of the nuclear com-
+ponents of the nuclear power plant.
+The provisions for nuclear-waste management based on Ger-
+man nuclear-power legislation comprise all those nuclear obli-
+gations relating to the disposal of spent nuclear-fuel rods and
+low-level nuclear waste and to the retirement and decommis-
+sioning of nuclear power plant components that are determined
+on the basis of external studies, external and internal cost esti-
+mates and contractual agreements, as well as the supplemen-
+tary provisions of the German Act Transferring Responsibility
+for Nuclear Waste Storage and the German Disposal Fund Act.
+The provisions for nuclear-waste management obligations as
+of December 31, 2017, in the amount of €10.5 billion exclu-
+sively relate to nuclear-power activities in Germany.
+Provisions for Nuclear-Waste
+Management Obligations
+As of December 31, 2017, provisions for nuclear-waste manage-
+ment obligations exclusively relate to Germany; other provisions
+mainly relate to eurozone countries and the United Kingdom.
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 9). The provision items
+are discounted in accordance with the maturities with interest
+rates of between 0 and 2.69 percent.
+¹Reclassification of the provisions for interim and final storage costs into corresponding liabilities as a result of the passing of the Act on the Reorganization of Responsibility in Nuclear Waste Disposal.
+16,422
+-523
+-1,227
+Containers, transports, operational waste, other
+For the following fiscal year, it is expected that Group-wide
+employer contributions to plan assets will amount to a total of
+€908 million. Of this amount, €782 million is attributable to
+Germany and €126 million to the U.K. The expected employer
+contribution payments for Germany already include the trans-
+fer of the assets of VKE to the CTA for the Group companies
+concerned.
+Subtotal
+Containers, transports, operational waste, other
+Provisions, if they are non-current, are measured at their settle-
+21,378
+10,455
+169
+Further development of the payment amount from December 31, 2016 to June 30, 2017
+Total
+2,245
+Risk surcharge before transfer to minority shareholders
+7,765
+0
+Subtotal
+2,731
+1,347
+2,210
+1,477
+11,199
+10,455
+1,649
+1,583
+9,550
+8,872
+Final-storage facilities for high active waste
+Schacht Konrad final-storage facility
+Interim storage
+Transferred to disposal fund
+220
+In 2017, E.ON made employer contributions to plan assets
+totaling €195 million (2016: €871 million) to fund existing
+defined benefit obligations.
+Contributions to state plans totaled €0.2 billion (2016:
+€0.2 billion).
+2.08
+-2.03
++10
+-10
++10
+-10
+-3.14
+3.51
+-3.02
+3.38
+-1.85
+A 10-percent decrease in mortality would result in a higher life
+expectancy of beneficiaries, depending on the age of each indi-
+vidual beneficiary. As of December 31, 2017, the life expectancy
+of a 63-year-old male E.ON retiree would increase by approxi-
+mately one year if mortality were to decrease by 10 percent.
+assumptions is changed for the purpose of computing the sensi-
+tivity of results to changes in that assumption, all other actuarial
+assumptions are included in the computation unchanged.
+When considering sensitivities, it must be noted that the change
+in the present value of the defined benefit obligations resulting
+from changing multiple actuarial assumptions simultaneously
+is not necessarily equivalent to the cumulative effect of the
+individual sensitivities.
+Description of Plan Assets and the
+Investment Policy
+The defined benefit plans are funded by plan assets held in spe-
+cially created pension vehicles that legally are distinct from the
+Company. The fair value of these plan assets changed as follows:
+Changes in the Fair Value of Plan Assets
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+1.89
+-25
++25
+Change in the discount rate by (basis points)
+Change in percent
++50
+-50
++50
+-50
+-7.77
+8.69
+-8.04
+9.12
+Change in the wage and salary growth rate by (basis points)
+Change in percent
++25
+-25
++25
+-25
+0.33
+-0.32
+0.43
+-0.41
+Change in the pension increase rate by (basis points)
+Change in percent
+Change in mortality by (percent)
+Change in percent
++25
+-25
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+December 31, 2016
+173
+2016
+1
+938
+352
+588
+-2
+Return on plan assets recognized in equity,
+not including amounts contained in the
+interest income on plan assets
+268
+247
+20
+20
+938
+352
+588
+Employee contributions
+Employer contributions
+195
+61
+134
+871
+437
+1
+247
+268
+Remeasurements
+€ in millions
+Total Germany
+United
+Kingdom
+Other
+countries
+Total Germany
+United
+Kingdom
+Other
+countries
+Fair value of plan assets as of January 1
+12,383
+7,073
+5,299
+11
+13,712
+8,133
+5,554
+25
+Interest income on plan assets
+297
+148
+149
+389
+205
+184
+2017
+433
+December 31, 2017
+Sensitivities
+2
+2
+-3,290
+-2,660
+-449
+-181
+Exchange rate differences
+-209
+-207
+-2
+Changes in scope of consolidation
+-928
+1
+Other
+-315
+-292
+-23
+9
+11
+-2
+Defined benefit obligation as of December 31
+15,713
+-929
+-2
+-251
+-449
+205
+202
+3
+2,630
+1,525
+1,069
+36
+Actuarial gains (-)/losses (+) arising from
+experience adjustments
+-131
+-61
+-70
+Actuarial gains (-)/losses (+) arising from
+20
+83
+-62
+-1
+Employee contributions
+Benefit payments
+-684
+-420
+-259
+-5
+-702
+9,979
+Change in the present value of the defined benefit obligations
+5,690
+16,392
+3.40
+3.20
+Pension increase rate
+Germany¹
+1.75
+1.75
+1.75
+United Kingdom
+3.20
+3.20
+3.40
+3.00
+Notes
+172
+The discount rate assumptions used by E.ON reflect the
+currency-specific rates available at the end of the respective
+fiscal year for high-quality corporate bonds with a duration cor-
+responding to the average period to maturity of the respective
+obligation.
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+Actuarial Assumptions (Mortality Tables)
+Germany
+United Kingdom
+2005 G versions of the Klaus Heubeck biometric
+tables (2005)
+"00" series base mortality tables with the CMI
+2016 projection model for future improvements
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of the
+defined benefit obligations:
+¹The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+guarantee adjustment.
+United Kingdom
+2.50
+2.50
+10,412
+5,933
+47
+Net actuarial gains in 2017 are the result of changes in demo-
+graphic assumptions in the U.K. and experience adjustments.
+The reduction of the discount rate used in the U.K. partially offset
+this effect.
+Other changes in Germany include in particular the reclassification
+of the defined benefit obligations of Hamburg Netz GmbH to
+the "Liabilities associated with assets held for sale" line item
+(see Note 4).
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at
+E.ON's German and U.K. subsidiaries as of the respective balance
+sheet date are as follows:
+Actuarial Assumptions
+Percentages
+Discount rate
+December 31,
+2017
+2016
+2015
+Germany
+2.10
+2.10
+2.70
+United Kingdom
+2.70
+2.90
+3.80
+Wage and salary growth rate
+Germany
+2.50
+44
+Benefit payments
+-668
+-408
+2
+100
+Total
+100
+100
+100
+100
+100
+100
+100
+23
+100
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. An increase in the net defined benefit
+liability or a deterioration in the funded status following an
+unfavorable development in plan assets or in the present value
+of the defined benefit obligations is identified in these guide-
+lines as a risk that is controlled as part of a risk-budgeting con-
+cept. E.ON therefore regularly reviews the development of the
+funded status in order to monitor this risk.
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the
+structure of the benefit obligations. This long-term investment
+strategy seeks to manage the funded status, with the result
+that any changes in the defined benefit obligation, especially
+those caused by fluctuating inflation and interest rates are, to
+a certain degree, offset by simultaneous corresponding changes
+in the fair value of plan assets. The investment strategy may
+also involve the use of derivatives (for example, interest rate
+swaps and inflation swaps, as well as currency hedging instru-
+ments) to facilitate the control of specific risk factors of pension
+liabilities. In the table above, derivatives have been allocated,
+based on their substance, to the respective asset classes in
+which they are used. In order to improve the funded status of
+the E.ON Group as a whole, a portion of the plan assets will also
+be invested in a diversified portfolio of asset classes that are
+expected to provide for long-term returns in excess of those of
+fixed-income investments and thus in excess of the discount rate.
+The determination of the target portfolio structure for the indi-
+vidual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in a
+comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition of
+the capital markets and the structure of the benefit obligations,
+and is adjusted as necessary. The parameters used in the studies
+are additionally reviewed regularly, at least once each year.
+Asset managers are tasked with implementing the target port-
+folio structure. They are monitored for target achievement on
+a regular basis.
+Description of the Pension Cost
+The net periodic pension cost for defined benefit plans included
+in the provisions for pensions and similar obligations is shown
+in the table below:
+Net Periodic Pension Cost
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+¹In Germany, 7 percent (2016: 5 percent) of plan assets are invested in other debt securities, in particular mortgage bonds ("Pfandbriefe"), in addition to government and corporate bonds.
+14
+100
+2
+6
+3
+6
+Qualifying insurance policies
+2
+4
+100
+2
+3
+100
+Cash and cash equivalents
+2
+3
+1
+2
+Other
+2
+4
+2
+4
+Total unlisted plan assets
+15
+25
+Strategy and Objectives
+4
+Combined Group Management Report
+175
+Gains (-) and losses (+) on settlements
+Net interest on the net
+defined benefit liability/asset
+Total
+82
+65
+16
+1
+84
+62
+8
+21
+278
+190
+86
+2
+291
+208
+81
+2
+The past service cost consists mostly of the expenses incurred
+in the context of restructuring measures.
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €59 million in fixed contributions to
+external insurers or similar institutions was paid in 2017 (2016:
+€56 million) for pure defined contribution plans.
+1
+4
+12
+10
+2017
+2016
+€ in millions
+Total Germany
+United
+Kingdom
+Other
+countries
+United
+Total
+Germany
+Kingdom
+Other
+countries
+Employer service cost
+150
+89
+60
+1
+195
+142
+52
+1
+Past service cost
+46
+36
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Real estate
+3
+2
+12,383
+7,073
+5,299
+11
+Other changes in Germany include in particular the reclassifica-
+tion of the plan assets of Hamburg Netz GmbH to the "Liabili-
+ties associated with assets held for sale" line item (see Note 4).
+The plan assets in 2017 no longer consist of financial instruments
+of E.ON (2016: €0.1 billion). The plan assets further include vir-
+tually no owner-occupied real estate or equity and debt instru-
+ments issued by E.ON Group companies. Each of the individual
+plan asset components has been allocated to an asset class
+based on its substance.
+Notes
+The plan assets thus classified break down as shown in the
+following table:
+Classification of Plan Assets
+11
+174
+December 31, 2016
+Percentages
+Total
+Germany
+United
+Kingdom
+Other
+countries
+Total
+Germany
+United
+Kingdom
+Other
+countries
+December 31, 2017
+5,137
+6,945
+12,093
+-259
+-672
+-420
+-251
+Changes in scope of consolidation
+-2,037
+-1,639
+-387
+71778
+Exchange rate differences
+-186
+-186
+-823
+-822
+-1
+Other
+-196
+-176
+-20
+5
+5
+Fair value of plan assets
+as of December 31
+Plan assets listed in an active market
+Equity securities (stocks)
+18
+22
+6
+30
+18
+6
+34
+Total listed plan assets
+85
+75
+98
+86
+77
+98
+Plan assets not listed in an active market
+Equity securities not traded on an exchange
+4
+6
+2
+4
+5
+2
+Debt securities
+1
+2
+16
+Description of Contributions and Benefit
+Payments
+Other investment funds
+13
+13
+18
+22
+12
+Debt securities¹
+Government bonds
+Corporate bonds
+51
+47
+55
+50
+49
+52
+35
+27
+46
+38
+31
+46
+11
+13
+9
+10
+6
+58
+Report of the Supervisory Board
+7
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Financial Liabilities by Segment as of December 31
+The following table breaks down the financial liabilities by
+segment:
+Liabilities from finance leases
+Financial Liabilities by Segment
+539
+1,400
+1,238
+1,989
+2,669
+12,452
+4,617
+4,435
+Other financial liabilities
+2017
+Energy Networks
+ECE/Turkey
+339
+686
+45
+367
+248
+Financial liabilities
+270
+49
+2017
+2016
+2017
+Sweden
+Germany
+2016
+46
+1,789
+750
+after 2028
+€ in millions
+Bonds Issued by E.ON SE, E.ON International Finance B.V. and E.ON Beteiligungen GmbH
+The bonds issued by E.ON SE and those issued by EIF and E.ON
+Beteiligungen GmbH (respectively guaranteed by E.ON SE) have
+the maturities presented in the table below. Liabilities denomi-
+nated in foreign currency include the effects of economic hedges,
+and the amounts shown here may therefore vary from the
+amounts presented on the balance sheet.
+Notes
+€2.75 Billion Syndicated Revolving Credit Facility
+Effective November 13, 2017, E.ON arranged a syndicated revolv-
+ing credit facility with 18 banks in the amount of €2.75 billion
+over an original term of five years, with two renewal options for
+one year each. This replaced the previous facility in the amount
+of €3.5 billion. All 18 invited banks participated in the facility,
+and as a result they make up E.ON's core banking group. The
+facility has not been drawn on; rather, it serves as the Group's
+reliable, long-term liquidity reserve, one purpose of which is to
+function as a backup facility for the commercial paper programs.
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to two years less one day to investors. The
+U.S. commercial paper program in the amount of $10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to 366 days and extendible notes with
+original maturities of up to 397 days (and a subsequent exten-
+sion option for the investor) to investors. As of December 31,
+2017, no commercial paper was outstanding under either the
+euro commercial paper program (2016: €0 million) or the U.S.
+commercial paper program (2016: €0 million).
+December 31, 2017
+Additionally outstanding as of December 31, 2017, were private
+placements with a total volume of approximately €0.9 billion
+(2016: €1.0 billion), as well as promissory notes with a total
+volume of approximately €0.4 billion (2016: €0.4 billion).
+¹Listing: All bonds are listed in Luxembourg with the exception of the two Rule 144A/Regulation S USD bonds, which are unlisted.
+²Rule 144A/Regulation S bond.
+6.650%
+6.750%
+Jan 2039
+30 years
+GBP 700 million
+Apr 2038
+3The volume of this issue was raised from originally GBP 600 million to GBP 850 million.
+"The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.
+5The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+December 31, 2016
+Due
+182
+2028
+Due
+2022 and
+Due
+in 2021
+Due
+in 2020
+1,400
+1,221
+1,703
+in 2019
+in 2018
+in 2017
+Total
+11,298
+Due
+Due
+Due
+between
+2016
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €56 million
+(2016: €97 million). This collateral relates to amounts pledged by
+banks to limit the utilization of credit lines in connection
+with the fair value measurement of derivative transactions. The
+other financial liabilities include promissory notes in the amount
+of €370 million (2016: €370 million) and financial guarantees
+totaling €8 million (2016: €8 million). Also included is collateral
+received in connection with goods and services in the amount
+of €21 million (2016: €21 million). E.ON can use this collateral
+without restriction.
+Trade Payables and Other Operating Liabilities
+Trade payables totaled €1,800 million as of December 31, 2017
+(2016: €2,040 million).
+2016
+2017
+Germany
+Customer Solutions
+183
+13,021
+2017
+89
+-498
+14,227
+1,907
+83
+-68
+76
+-797
+UK
+2016
+Other
+Renewables
+0
+0
+11,905
+2016
+2017
+10,641
+2017 2016
+10,641 11,905
+2016
+2017
+2016
+2017
+2016
+2017
+E.ON Group
+Corporate
+Functions/Other
+Non-Core
+Business
+1,816
+30 years
+357
+-64
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Financial liabilities
+Consolidated Financial Statements
+Other financial liabilities
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Financial Liabilities
+Capital expenditure grants of €247 million (2016: €324 million)
+have not yet been recognized as revenue. The E.ON Group
+retains ownership of the assets. The grants are non-refundable
+and are recognized in other operating income over the period of
+the depreciable lives of the related assets.
+Liabilities from finance leases
+Summary of Financial Highlights and Explanations
+Exchange
+rate
+358
+116
+-32
+148
+0
+10,641
+-57
+-729
+2017
+Other
+differences
+Cash flows
+-478
+11,905
+Jan. 1, 2017
+Dec. 31,
+63
+USD 1,000 million²
+5.875%
+Oct 2037
+324
+313
+11
+247
+230
+17
+Construction grants from energy consumers
+Capital expenditure grants
+2,040
+1,800
+1,800
+Trade payables
+Total
+14,227
+10,435
+2,040
+194
+1,705
+1,899
+48
+51
+1
+50
+Advance payments
+2,867
+2,485
+382
+2,956
+2,139
+817
+Liabilities from derivatives
+1,940
+1,750
+190
+3,792
+2
+Non-current
+Total
+13,021
+Supplier-Related Obligations
+on legally binding civil agreements and public provisions, in the
+amount of €437 million (2016: €457 million) are taken into
+account here. Excluding discounting and cost-increase effects, the
+amounts for these disposal obligations would be €363 million.
+The provisions for other asset retirement obligations consist of
+obligations for renewable-energy power plants and infrastructure.
+In addition, the provisions for dismantling conventional plant
+components in the nuclear power segment, which are based
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, in-kind obligations, restructuring and other
+deferred personnel costs.
+Personnel Obligations
+There were changes in estimates for the remaining nuclear
+power business in 2017 in the amount of -€603 million (2016:
+€4,243 million). This mainly includes the effects of the imple-
+mentation of the optimization of decommissioning and disposal
+of nuclear power plants. €237 million (2016: €630 million) of
+this was used, of which €166 million (2016: €412 million)
+related to decommissioning and non-operating nuclear power
+plants based on circumstances for which decommissioning and
+dismantling costs were recognized.
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Excluding the effects of discounting and cost increases, the
+amounts for E.ON's remaining disposal obligations would be
+€9,486 million with average credit terms of approximately
+9 years.
+179
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Transfer of responsibility in 2017, in particular for interim and
+permanent storage costs, resulted in a substantial reduction in
+the duration of the disposal obligation. A risk-free discount rate
+of an average of about 0.6 percent applies to E.ON's remaining
+disposal obligations (previous year: 0.5 percent). Correspond-
+ingly, an applicable cost increase rate of 1.5 percent p.a. was
+applied to E.ON's remaining disposal obligations (previous year:
+1.4 percent), corresponding to a net interest rate of -0.9 percent
+(previous year: -0.9 percent). A change in the net interest rate of
+0.1 percent would change the amount of the provision recognized
+on the balance sheet by approximately €0.1 billion.
+Provisions for customer-related obligations consist primarily of
+potential losses on rebates and on open sales contracts.
+Environmental Remediation and Similar
+Obligations
+Provisions for environmental remediation refer primarily to
+redevelopment and water protection measures and to the reha-
+bilitation of contaminated sites.
+9,922
+3,099
+Financial liabilities
+Non-current
+Current
+€ in millions
+December 31, 2016
+December 31, 2017
+180
+Liabilities
+The following table provides a breakdown of liabilities:
+(26) Liabilities
+Notes
+The other miscellaneous provisions consist primarily of provisions
+from the electricity and gas business. These include provisions
+for Renewables Obligation Certificates (ROCs) in the amount of
+€0.4 billion, which represent an important mechanism for pro-
+moting renewable energies in the Customer Solutions UK seg-
+ment. The ROCs represent a fixed share of renewable energies
+in power sales and can be acquired either from renewable
+sources or on the market. During a twelve-month ROC period,
+the obligations accrued for this purpose are offset against the
+acquired certificates and used. Further included here are provi-
+sions for potential obligations arising from tax-related interest
+expenses and from taxes other than income taxes, as well as
+certain environmental remediation obligations of predecessor
+companies (€0.6 billion).
+Other
+Current
+2
+50
+5,221
+May 2020
+12 years
+EUR 1,400 million4
+6.000%
+Oct 2019
+12 years
+5.750%
+GBP 850 million³
+Apr 2018
+10 years
+USD 2,000 million²
+Coupon
+Repayment
+Initial term
+5.800%
+EUR 750 million
+4 years
+Aug 2021
+30 years
+GBP 900 million
+6.375%
+June 2032
+30 years
+GBP 975 million5
+1.625%
+May 2029
+12 years
+EUR 750 million
+0.875%
+May 2024
+7 years
+EUR 500 million
+0.375%
+respective currency
+Other operating liabilities
+Volume in the
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+14,612
+11,198
+12,135
+5,247
+6,888
+12,789
+25,810
+4,690
+Trade payables and other operating liabilities
+Total
+4,914
+697
+4,217
+5,836
+615
+8,099
+10,680
+15,682
+26,362
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+At year-end 2017, the following E.ON SE and EIF bonds were
+outstanding:
+A Debt Issuance Program simplifies the issuance from time to
+time of debt instruments through public and private placements
+to investors. The Debt Issuance Program of E.ON SE was most
+recently renewed in March 2017, with a total amount of
+€35 billion. E.ON SE plans to renew the program in 2018.
+€35 Billion Debt Issuance Program
+The financing activities involve the use of covenants (contractual
+obligations) consisting primarily of change-of-control clauses
+(right of cancellation upon change of ownership), negative
+pledges, pari-passu clauses and cross-default clauses, each
+referring to a restricted set of significant circumstances. Finan-
+cial covenants (that is, covenants linked to financial ratios) are
+not employed.
+Covenants
+Group Management
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+Financial Liabilities
+181
+2
+Provisions for Other Asset Retirement
+Obligations
+2
+Justice ruled that Germany's Basic Supply Ordinances for Power
+and Gas do not comply with the relevant European directives.
+The German Federal Court of Justice has issued numerous rulings
+on the legal consequences of this violation for German law.
+Although no companies of the E.ON Group are directly involved
+in these particular preliminary-ruling proceedings, there is a risk
+that claims asserted against Group companies for the restitution
+of amounts collected through such price increases might be
+successful.
+The entire sector is involved in a multitude of court proceedings
+throughout Germany in the matter of price-adjustment clauses
+and price adjustments in the retail basic supply business (tariff
+customers) and non-tariff customers in the electricity, gas and
+heating sector. These proceedings also include actions for the
+restitution of amounts collected through price increases imposed
+using price-adjustment clauses determined to be invalid. In a
+judgment delivered in October 2014, the European Court of
+sources.
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or
+may be instituted or asserted in the future against companies
+of the E.ON Group. This in particular includes legal actions and
+proceedings on contract amendments and price adjustments
+initiated in response to market upheavals and the changed
+economic situation in the electricity and gas sectors (also as a
+consequence of the energy transition) and concerning price
+increases and anticompetitive practices. Lawsuits are also
+pending in connection with the construction and operation of
+plants for generating electricity from renewable energy
+(28) Litigation and Claims
+186
+Notes
+In addition, further financial obligations in place as of December 31,
+2017, totaled approximately €1.6 billion (€1.0 billion due within
+one year). They include, among other things, financial obligations
+from services to be procured, capital obligations from joint ven-
+tures and obligations concerning the acquisition of real estate
+funds held as financial assets, as well as corporate actions.
+The expenses reported in the income statement for these leasing
+agreements amounted to €126 million (2016: €138 million).
+They include contingent rents.
+815
+856
+357
+On April 13, 2017, the Federal Constitutional Court declared
+the Nuclear Fuel Tax Act to be incompatible with the Basic Law
+and invalid. The nuclear-fuel tax plus interest paid by E.ON was
+refunded. In connection with the transfer of responsibility for
+interim and final disposal to the Federal Government, related
+lawsuits and the lawsuits relating to the nuclear moratorium
+were withdrawn.
+379
+353
+138
+124
+Minimum lease payments
+2016
+2017
+€ in millions
+Due within 1 year
+Due in 1 to 5 years
+Due in more than 5 years
+Total
+E.ON as Lessee-Operating Leases
+Additional financial obligations arose from rental and tenancy
+agreements and from operating leases. The corresponding min-
+imum lease payments are due as broken down in the table below:
+contracts amount to approximately €3.4 billion on December
+31, 2017 (€1.0 billion due within one year). Additional purchase
+commitments as of December 31, 2017, amounted to approxi-
+mately €0.7 billion (€0.1 billion due within one year). They
+include long-term contractual commitments to purchase heat
+and alternative fuels.
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2017, relate primarily to
+the purchase of electricity and natural gas. Financial obligations
+under the electricity purchase contracts amount to approxi-
+mately €3.5 billion on December 31, 2017 (€2.1 billion due
+within one year). Financial obligations under the gas purchase
+As of December 31, 2017, purchase commitments for invest-
+ments in intangible assets and in property, plant and equipment
+amounted to €1.1 billion (2016: €1.9 billion). Of these commit-
+ments, €0.8 billion are due within one year. The purchase com-
+mitment mainly includes financial obligations for as yet out-
+standing investments, in particular in the Renewables, Energy
+Networks Germany and Sweden units. On December 31, 2017,
+these obligations totaled €0.7 billion. Additional investments in
+the Renewables units are in connection with new power plant
+construction projects and the expansion and modernization of
+existing wind power plants. On December 31, 2017, these obli-
+gations totaled €0.4 billion.
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are other
+mostly long-term financial obligations arising mainly from
+contracts entered into with third parties, or on the basis of legal
+requirements.
+320
+Other Financial Obligations
+CEO Letter
+E.ON Stock
+CEO Letter
+The amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2017, produced a gain of
+€5 million (2016: €20 million gain).
+As of December 31, 2017, the hedged transactions in place
+included foreign currency cash flow hedges with maturities of
+up to 20 years (2016: up to 19 years) and interest cash flow
+hedges with maturities of up to 29 years (2016: up to 30 years).
+Planned commodity positions have maturities of up to 12 years.
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash flow
+hedge accounting.
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps, cross-currency
+interest rate swaps, swaptions and interest rate options are
+the principal instruments used to limit interest rate and currency
+risks. The purpose of these swaps is to maintain the level of
+payments arising from long-term interest-bearing receivables
+and liabilities and from capital investments denominated in
+foreign currency and euro by using cash flow hedge accounting
+in the functional currency of the respective E.ON company.
+Cash Flow Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges are
+generally reported in that line item of the income statement
+which also includes the respective hedged items.
+Fair Value Hedges
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group, as well as from anticipated
+fuel purchases and purchases and sales of gas, were hedged in
+the past.
+At the E.ON Group, hedge accounting in accordance with IAS 39
+is employed primarily in connection with hedging long-term
+liabilities and bonds to be issued in the future via interest-rate
+derivatives and for hedging long-term foreign currency receiv-
+ables and payables and foreign investments via currency deriv-
+atives. E.ON also hedges net investments in foreign operations.
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+Strategy and Objectives
+Report of the Supervisory Board
+(30) Derivative Financial Instruments and
+Hedging Transactions
+Notes
+Cash provided by financing activities of continuing operations
+amounted to €0.5 billion compared with -€1.2 billion in the
+prior year. The change of €1.7 billion was mainly due to mea-
+sures to finance the July payment into Germany's public fund
+for financing nuclear-waste disposal, which was made in July.
+The measures consisted mainly of the issuance of €2.0 billion in
+bonds, the €1.35 billion capital increase conducted by E.ON SE
+in March 2017, and a €0.6 billion reduction in the dividend pay-
+ment to E.ON SE shareholders relative to the prior year. The
+redemption of bonds (-€1.9 billion) had an offsetting effect in
+the fourth quarter of fiscal year 2017.
+repayment of financial receivables, while an increase in restricted
+cash for the fulfillment of insurance obligations of Versorgungs-
+kasse Energie VVaG i.L. (VKE i.L.) had a negative impact on
+investing cash flow. At -€2.5 billion, cash investments and dis-
+posals were slightly higher (by -€0.2 billion) than the prior-year
+figure of -€2.3 billion. Disposals related mainly to the impending
+sale of Hamburg Netz GmbH's activities in the Energy Networks
+Germany segment and the sale of E.ON Värme Lokala Energi-
+lösningar AB in the Customer Solutions segment in Sweden.
+At -€0.4 billion, cash provided by investing activities was sig-
+nificantly above the level of the prior year (-€3 billion). The
+change of +€2.6 billion was mainly due to higher net proceeds
+from the sale of securities and fixed-term deposits and from the
+Cash flow from operating activities was -€3.0 billion, which is
+€5.9 billion lower than in the prior-year period. The decrease was
+mainly due to the payment of €10.3 billion made in July into
+Germany's public fund for financing nuclear-waste disposal.
+This was offset by payments in connection with the refunds of
+the German nuclear-fuel tax, which amounts to approximately
+€3.1 billion after a portion of the refund was passed on to the
+co-owners of the plants. Additional effects resulted from the
+positive development of working capital.
+The total consideration received by E.ON in 2017 on the dis-
+posal of consolidated equity interests and activities generated
+cash inflows of €517 million (2016: €345 million). This value
+also includes the payment already made in 2017 from the sale
+of activities of Hamburg Netz GmbH, whose shares were trans-
+ferred to the buyer as of January 1, 2018. The liquid assets of
+Hamburg Netz GmbH will not be disposed of until 2018 and the
+selling price will be reduced accordingly. No other cash and
+cash equivalents were sold in this connection (2016: €21 million).
+The sale of the consolidated activities led to reductions of
+€134 million (2016: €741 million) in assets and €34 million
+(2016: €597 million) in provisions and liabilities.
+(29) Supplemental Cash Flow Disclosures
+187
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+188
+As of December 31, 2017, E.ON SE also issues collateral in the
+amount of €2.5 billion for former Group companies, which will
+be repaid or to a great extent assumed by the companies of the
+Uniper Group in the future. The largest payment guarantee on a
+pro rata basis is Uniper Energy Storage GmbH in the amount of
+€0.9 billion. This also includes guarantees in connection with
+Swedish nuclear power activities. The transfer of these guaran-
+tees and obligations from E.ON to Uniper requires the approval of
+the Swedish government, which has not yet been granted.
+In fiscal year 2017, tax liabilities were reduced by €228 million
+(2016: €88 million) through the transfer of tax credits (acceler-
+ated depreciation, so-called "MACRS" and production tax cred-
+its, "PTCs") to tax equity investors. These non-cash transactions
+had no impact on the consolidated cash flow statement.
+Summary of Financial Highlights and Explanations
+1,816
+1,907
+570
+546
+634
+304
+508
+639
+58
+51
+1
+358
+3
+357
+63
+4
+3
+20
+1
+1
+148
+116
+97
+56
+185
+3
+84
+4
+21
+79
+Combined Group Management Report
+Consolidated Financial Statements
+78
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a Soli-
+darity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement
+dated March 25, April 18, April 28, and June 1, 2011. If an
+accident occurs, the Solidarity Agreement calls for the nuclear
+power plant operator liable for the damages to receive-after
+the operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement, E.ON
+Energie's share of the liability coverage on December 31, 2017,
+remained unchanged from 2016 at 42.0 percent plus an addi-
+tional 5.0 percent charge for the administrative costs of pro-
+cessing damage claims. Sufficient liquidity has been provided
+for and is included within the liquidity plan.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million
+and €15 million for claims related to officially ordered evacuation
+measures. Group companies have agreed to place their sub-
+sidiaries operating nuclear power plants in a position to maintain
+a level of liquidity that will enable them at all times to meet their
+obligations as members of the Nuklear Haftpflicht GbR, in |
+pro-
+portion to their shareholdings in nuclear power plants.
+The guarantees of E.ON also include items related to the opera-
+tion of nuclear power plants. With the entry into force of the
+German Nuclear Energy Act ("Atomgesetz" or "AtG"), as amended,
+and of the ordinance regulating the provision for coverage under
+the Atomgesetz ("Atomrechtliche Deckungsvorsorge-Verordnung"
+or "AtDeckV") of April 27, 2002, as amended, German nuclear
+power plant operators are required to provide nuclear accident
+liability coverage of up to €2.5 billion per incident.
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+In addition, E.ON has entered into indemnification agreements,
+which as a rule are incorporated in agreements concerning the
+disposal of shareholdings and, above all, affect the customary
+representations and warranties with relation to liability risks for
+environmental damage and contingent tax risks. In some cases,
+obligations are covered in the first instance by provisions of the
+disposed companies before E.ON itself is required to make any
+payments. Guarantees issued by companies that were later sold
+by E.ON SE or its legal predecessors are usually included in the
+respective final sales contracts in the form of indemnities.
+E.ON has issued direct and indirect guarantees to third parties,
+which may trigger payment obligations based on the occurrence
+of certain events. These consist primarily of financial guarantees
+and warranties.
+The fair value of the E.ON Group's contingent liabilities was
+€0.4 billion as of December 31, 2017, and primarily includes
+contingent liabilities in connection with contingencies and
+potential long-term environmental remediation measures.
+CEO Letter
+As part of its business activities, E.ON is subject to contingent
+liabilities and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees, obliga-
+tions from litigation and claims (as discussed in more detail in
+Note 28), short- and long-term contractual, legal and other
+obligations and commitments.
+Contingent Liabilities
+638
+11,306 12,656 13,021 14,227
+511
+641
+Other operating liabilities consist primarily of accruals in the
+amount of €3,444 million (2016: €2,647 million) and interest
+payable in the amount of €451 million (2016: €499 million).
+Construction grants of €1,899 million (2016: €1,940 million)
+were paid by customers for the cost of new gas and electricity
+connections in accordance with the generally binding terms
+governing such new connections. These grants are customary
+in the industry, generally non-refundable and recognized as
+revenue according to the useful lives of the related assets.
+Notes
+184
+(27) Contingent Liabilities and Other Financial
+Obligations
+Also included in other operating liabilities are carryforwards of
+counterparty obligations to acquire additional shares in already
+consolidated subsidiaries, in the amount of €350 million (2016:
+€398 million), as well as non-controlling interests in fully con-
+solidated partnerships with legal structures that give their
+shareholders a statutory right of withdrawal combined with a
+compensation claim, in the amount of €10 million (2016:
+€95 million).
+307
+100
+110
+120
+130
+E.ON - EURO STOXX¹
+140
+150
+Utilities (+10 percent), and the broader European stock market
+Percentages
+E.ON Stock Performance
+as measured by the EURO STOXX 50 index (+9 percent).
+At the end of 2017, E.ON stock (including reinvested dividends)
+was 39 percent above its year-end closing price for 2016. It
+thereby considerably outperformed its peer index, the STOXX
+E.ON Stock in 2017
+14
+STOXX Utilities¹
+E.ON Stock
+E.ON Stock
+160
+12/30/16 1/31/17 2/28/17 3/31/17 4/30/17 5/31/17
+In addition, in 2017 shareholders were given the option of
+receiving their dividend in cash or exchanging a portion of it for
+shares of E.ON stock. The acceptance rate was about 33 per-
+cent, and E.ON consequently issued just under 15 million trea-
+sury shares. This increased the number of shares outstanding at
+December 31, 2017, to 2,167 million.
+9/30/17 10/31/17 11/30/17 12/31/17
+Twelve-month high4
+Chairman
+Dividend
+410
+650
+Dividend payout (€ in millions)
+0.21
+0.30
+Dividend³
+-4.33
+0.46
+0.67
+Earnings from adjusted net income 1, 2
+1.84
+Net income attributable to the shareholders
+of E.ON SE¹
+2016
+2017
+Per share (€)
+E.ON Stock Key Figures
+¹Based on the performance index.
+6/30/17 7/31/17 8/31/17
+Dr. Karl-Ludwig Kley
+Examination and Approval of the Financial Statements,
+Approval of the Consolidated Financial Statements, Proposal
+for Profit Appropriation for the Year Ended December 31, 2017
+4.1. m
+Furthermore, the auditor examined E.ON SE's early-warning system regarding risks.
+This examination revealed that the Management Board has taken appropriate
+measures to meet the requirements of risk monitoring and that the early-warning
+system regarding risks is fulfilling its task.
+PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, the
+independent auditor chosen by the Annual Shareholders Meeting and appointed
+by the Supervisory Board, audited and submitted an unqualified opinion on the
+Financial Statements of E.ON SE and the Combined Group Management Report
+for the year ended December 31, 2017. The Consolidated Financial Statements
+prepared in accordance with IFRS exempt E.ON SE from the requirement to pub-
+lish Consolidated Financial Statements in accordance with German law.
+10
+10
+Report of the Supervisory Board
+The Nomination Committee met once in 2017. All members of the com-
+mittee were present. The purpose of the meeting was to prepare for the
+elections to the Supervisory Board in 2018.
+independent auditor's compensation, and verified the auditor's qualifica-
+tions and independence in line with the recommendations of the German
+Corporate Governance Code. The committee assured itself that the inde-
+pendent auditor has no conflicts of interest. Topics of particularly
+detailed discussions included issues relating to accounting, the internal
+control system, and risk management. In addition, the committee thor-
+oughly discussed the Combined Group Management Report and the pro-
+posal for profit appropriation and prepared the relevant recommenda-
+tions for the Supervisory Board and reported them to the Supervisory
+Board. The committee also discussed in detail market conditions, the
+long-term changes in markets, and the resulting consequences for the
+underlying value of E.ON's operations. Other focus areas included an
+examination of E.ON's risk situation, its risk-bearing capacity, and the
+quality control of its risk-management system. This examination was
+based on consultations with the independent auditor and, among other
+things, reports from the Company's Risk Committee. On the basis of the
+quarterly risk reports, the Audit and Risk Committee noted that no risks
+were identified that might jeopardize the existence of the Company or
+individual segments. The committee also discussed the work done by
+Internal Audit including the audits conducted in 2017 as well as the
+audit plan and audit priorities for 2018. Furthermore, the committee dis-
+cussed the health, safety, and environment report, compliance reports
+and E.ON's compliance system, as well as other issues related to audit-
+ing. The Management Board also reported on ongoing legal proceedings
+and on legal and regulatory risks for the E.ON Group's business. These
+included the status of the lawsuits filed against the nuclear-fuel tax, the
+constitutional complaint against the nuclear phaseout, the lawsuit filed
+against the nuclear energy moratorium, and the proposals of the Com-
+mission for Organizing and Financing the Nuclear Energy Phaseout.
+Other topics included the planned sale of the Company's remaining Uni-
+per stake, the Phoenix reorganization program, the special audit con-
+ducted by Germany's Financial Reporting Enforcement Panel, the devel-
+opment of E.ON startups and co-investments, the Company's tax
+situation, reportable incidents at the E.ON Group, financing and insur-
+ance issues, and the separate Combined Non-Financial Report, which the
+Company was required to publish for the first time.
+The Audit and Risk Committee met five times in 2017.
+One member was unable to attend one meeting. Oth-
+erwise, all members took part in all meetings. With
+due attention to the Independent Auditor's Report and
+in discussions with the independent auditor, the com-
+mittee devoted particular attention to the 2016 Finan-
+cial Statements of E.ON SE (prepared in accordance
+with the German Commercial Code), the E.ON Group's
+2016 Consolidated Financial Statements (prepared in
+accordance with International Financial Reporting
+Standards, or "IFRS"), and the 2017 Interim Reports of
+E.ON SE. The committee discussed the recommenda-
+tion for selecting an independent auditor for the 2017
+financial year as well as the intermediate financial
+reports and assigned the tasks for the auditing ser-
+vices, established the audit priorities, determined the
+At the Supervisory Board's meeting on March 12, 2018, we thoroughly dis-
+cussed-in the presence of the independent auditor and with knowledge of, and
+reference to, the Independent Auditor's Report and the results of the preliminary
+review by the Audit and Risk Committee-E.ON SE's Financial Statements pre-
+pared in accordance with the German Commercial Code, Consolidated Financial
+Statements, Combined Group Management Report, and the Management Board's
+proposal for profit appropriation. The independent auditor was available for sup-
+plementary questions and answers. After concluding our own examination we deter-
+mined that there are no objections to the findings. We therefore acknowledged
+and approved the Independent Auditor's Report.
+The Investment and Innovation Committee (until
+March 2017: Finance and Investment Committee) met
+eight times. One member was unable to attend two
+meetings. Otherwise, all other members attended all
+meetings. The matters addressed by the committee
+included the Management Board's planned funding
+measures, the extension of the syndicated credit facil-
+ity, the post-completion audits of certain investment
+projects, and the planned sale of the remaining Uniper
+stake. In particular, at its meetings the committee pre-
+pared the Supervisory Board's resolutions on these
+matters or, for matters for which it had the authority,
+made the decision itself. Furthermore, it discussed
+innovation topics related to the Energy Networks and
+Customer Solutions segments.
+9
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+10.69
+continually informed about the progress toward these
+targets. Finally, the committee adopted a resolution
+based on the Management Board's proposal to change
+its members' respective task areas, adopted a resolu-
+tion for the capital increase the Company subsequently
+carried out, and discussed the results of the efficiency
+review. Furthermore, it discussed the medium-term
+plan for the period 2018-2020.
+We approved the Financial Statements of E.ON SE prepared by the Management
+Board and the Consolidated Financial Statements. The Financial Statements are
+thus adopted. We agree with the Combined Group Management Report and, in
+particular, with its statements concerning the Company's future development.
+We examined the Management Board's proposal for profit appropriation, which
+includes a cash dividend of €0.30 per ordinary share, also taking into consideration
+the Company's liquidity and its finance and investment plans. After examining and
+weighing all arguments, we agree with the Management Board's proposal for
+profit appropriation.
+In addition, we reviewed and approved the separate Combined Non-Financial
+Report, which the Company was required to publish for the first time.
+Best wishes,
+Essen, March 12, 2018
+The Supervisory Board
+As of December 31, 2017, Thies Hansen resigned from the E.ON SE
+Supervisory Board and therefore also from the Audit and Risk Committee.
+In his place, Elisabeth Wallbaum was newly elected to the committee
+effective January 1, 2018. The Supervisory Board would like to thank
+Mr. Hansen for his dedication and fine work on the Supervisory Board.
+As a result of the changes to the committees, shareholder representa-
+tives Carolina Dybeck Happe and Ewald Woste and employee represen-
+tative Albert Zettl were elected as new members of the Investment and
+Innovation Committee effective April 1, 2017. Employee representative
+Andreas Schmitz was elected as a new member of the Audit and Risk
+Committee effective the same date. In addition, Karen de Segundo was
+elected Chairperson of the Investment and Innovation Committee effec-
+tive April 1, 2017. Karl-Ludwig Kley resigned his membership on the
+Audit and Risk Committee and the Investment and Innovation Committee
+effective March 31, 2017.
+The E.ON SE Supervisory Board decided to revise its committees and
+make personnel changes on them. The Finance and Investment Commit-
+tee was renamed the Investment and Innovation Committee and, effec-
+tive April 1, 2017, until the conclusion of the 2018 Annual Shareholders
+Meeting, was increased from four to six members. As before, the com-
+mittee continues to decide on investment and financing measures and to
+prepare the Supervisory Board's resolutions on such measures. In addi-
+tion, it addresses issues relating to market developments, customers,
+innovation, and digitization. The medium-term plan is now discussed by
+the Executive Committee. These revisions to the committees were a con-
+sequence of the E.ON Group's new strategic direction, which involves the
+tapping of new markets.
+Revisions to, and Personnel Changes on, the Super-
+visory Board's Committees
+Page 224 of this report shows E.ON SE Management
+Board members' respective task areas as of year-end
+2017.
+In addition, in January 2018 the E.ON SE Supervisory
+Board extended the contract of Johannes Teyssen as
+Chairman of the Management Board until December 31,
+2021.
+In December 2016 the Supervisory Board appointed
+Marc Spieker to the E.ON SE Management Board
+effective January 1, 2017. He succeeded Michael Sen
+as Chief Financial Officer effective April 1, 2017.
+Michael Sen ended his service on the E.ON SE Man-
+agement Board at the conclusion of March 31, 2017.
+The Supervisory Board would like to thank Mr. Sen for
+his successful work at the E.ON Group, in particular for
+his contribution to the successful spinoff of Uniper and
+the restructuring of E.ON's finance organization. We
+wish him all the best for the future.
+Personnel Changes on the Management
+Board
+11
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+ну
+8.49
+35%
+Germany
+6.64
+16%
+United Kingdom
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2017).
+Rest of world
+5%
+10%
+France
+USA and Canada
+23%
+Shareholder Structure by Country/Region¹
+8%
+Rest of Europe
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2017).
+Institutional investors
+78%
+Shareholder Structure by Group¹
+Our most recent survey shows that we have roughly 78 percent
+institutional investors and 22 percent retail investors. Investors
+in Germany hold about 35 percent of our stock, those outside
+Germany about 65 percent. These percentages are based on
+the total number of investors we were able to identify and do
+not include treasury shares.
+Shareholder Structure
+At the 2018 Annual Shareholders Meeting, management will
+propose a cash dividend of €0.30 per share for the 2017 finan-
+cial year (prior year: €0.21). The payout ratio (as a percentage of
+adjusted net income) would be 46 percent. Based on E.ON stock's
+year-end 2017 closing price, the dividend yield is 3.3 percent.
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+22%
+Retail investors
+3%
+Switzerland
+15
+Investor Relations
+The systematic focus on three core businesses will enable E.ON
+to retain its existing strengths and advantages and build on
+them. Examples include our success at developing and building
+an international renewables portfolio consisting of 5.1 GW of
+operational capacity (supplemented by an attractive develop-
+ment pipeline and an established service business for wind
+farms) and our outstanding record of managing a total of roughly
+800,000 kilometers of energy networks. In 2017 our customer
+solutions business reached several milestones in energy stor-
+age, e-mobility, and heat supply. For the first time, we enabled
+owners of solar panels to store their output without a battery
+In addition to our three core businesses, our portfolio includes a
+nuclear power business in Germany, which is not a strategic
+business segment for E.ON and is managed by a separate oper-
+ating company, Preussen Elektra of Hanover. On July 3, 2017,
+E.ON transferred the payment amount (including a risk premium)
+totaling approximately €10.3 billion to Germany's public fund
+to finance nuclear-waste disposal. This transferred the respon-
+sibility for the intermediate and final storage of E.ON's nuclear
+waste to the Federal Republic of Germany. As the phaseout moves
+forward, E.ON will continue to ensure that its nuclear assets are
+decommissioned and dismantled safely and cost-effectively.
+Each of these core businesses has its own viable business logic.
+But combining them in a single company offers significant
+advantages. It enables E.ON to acquire and leverage a compre-
+hensive understanding of the transformation of the energy
+system and the interplay between the individual submarkets in
+regional and local energy supply systems. In an increasingly
+distributed and digital energy world, for example, we expect
+customer solutions and energy networks to converge going
+forward. Today, smart meters are already providing the basis for
+new energy-sales offerings, such as time-based electricity tar-
+iffs and energy-efficiency solutions.
+Resources and Capabilities
+Renewables: wind, solar, and other carbon-neutral technolo-
+gies are indispensable ingredients in a climate-friendly
+power mix. E.ON's objective is to make a significant contri-
+bution. E.ON's increasingly international renewables busi-
+ness will therefore continue to invest in attractive target
+regions. Capabilities in project development and execution
+and in operational excellence already give us a competitive
+advantage in this business.
+Customer Solutions: E.ON wants to become the partner of
+choice for municipal, public, industrial, commercial, and resi-
+dential customers and to create added value for them. We
+intend to achieve this through a consistently convincing cus-
+tomer experience, a strong digital orientation, and high-quality
+service. In addition, we will continually improve or redefine
+our portfolio of products and services in response to cus-
+tomers' demand for energy efficiency, distributed generation
+and storage, and sustainable mobility solutions.
+Energy Networks: distribution grids link our customers
+together and are the backbone of the energy transformation.
+In Germany, 95 percent of all renewable energy is fed into
+regional, customer-proximate distribution grids, and about
+one third of distributed generating capacity subsidized by
+the Renewable Energy Law is connected to E.ON grids. The
+energy system is complex and increasingly characterized by
+distributed generation. It connects the electricity market,
+heat market, and transport sector. This complex system is
+not possible without smart distribution grids. This means that
+grids no longer just distribute power. They are evolving into
+smart platforms that integrate processes, data, and generat-
+ing facilities. Physical infrastructure is now supplemented by
+a new digital layer. E.ON is already a leader in network effi-
+ciency and will continue to set new standards in the future.
+E.ON is based in Essen, Germany, and has around 43,000
+employees. With a clear focus on three strong core busi-
+nesses-Energy Networks, Customer Solutions, and Renew-
+ables-we aim to become the partner of choice for energy and
+customer solutions.
+Objectives and Core Businesses
+E.ON's strategy focuses our company systematically on the
+new energy world of empowered and proactive customers,
+renewables and distributed energy, energy efficiency, local
+energy systems, the increasing electrification of energy con-
+sumption, and digital solutions. By seizing the initiative, E.ON
+can-for the benefit of customers, employees, business part-
+ners, shareholders, and society in general-take advantage of
+the significant opportunities created by the transformation of
+the energy world. Our strategy reflects three fundamental mar-
+ket developments and corresponding growth businesses: the
+global trend toward sustainable energy sources (particularly
+wind and solar), the use of energy networks as a platform for
+distributed-energy solutions, and customers' changing needs in
+an increasingly electrified and efficient energy world. We aim to
+add value in all of our businesses by delivering an outstanding
+performance in all areas and by putting customers at the center
+of everything we do. Examples include continual innovation, an
+unambiguous commitment to sustainability, the expansion of
+digital architecture across the organization, and a strong brand.
+Partner for the New Energy World
+Our Strategy:
+18
+Strategy and Objectives
+Strategy and
+Objectives
+Want to find out more?
+eon.com/investors
+You can contact us at:
+investorrelations@eon.com
+The main focus in 2017 was the E.ON Group's new financial
+strategy, which included the debt-reduction plan announced in
+March. As in the past, we continually informed our shareholders
+of the steps taken and the progress made toward reducing our
+debt.
+We used the forum of E.ON's quarterly reporting to provide the
+greatest-possible transparency on the developments at our
+business units.
+Our investor relations continue to be founded on four principles:
+openness, continuity, credibility, and equal treatment of all
+investors. Our mission is to provide prompt, precise, and rele-
+vant information at our periodic conferences and road shows, at
+eon.com, and when we meet personally with investors. Contin-
+ually communicating with them and strengthening our relation-
+ships with them are essential for good investor relations.
+Strategy and Objectives
+Twelve-month low4
+E.ON Stock
+CEO Letter
+1.10
+24.5
+26.3
+E.ON stock trading volume (€ in billions)
+13.1
+19.6
+Market capitalization5 (€ in billions)
+Payout ratio¹ (%)
+1.00
+Dividend
+1,952
+2,167
+Number of shares outstanding (in millions)
+Dividend per Share
+6.70
+9.06
+Year-end closing price4
+6.04
+€ per share
+¹Based on shares outstanding (weighted average).
+²Adjusted for non-operating effects.
+³For the respective financial year; the 2017 figure represents management's dividend proposal.
+4Xetra.
+¹Payout ratio not adjusted for discontinued operations.
+The increase in the number of shares outstanding relative to
+year-end 2016 is mainly attributable to the capital increase we
+conducted in March 2017 through a partial utilization of autho-
+rized capital. This raised the number of shares outstanding by
+about 200 million shares. The capital increase yielded E.ON SE
+gross issuance proceeds of approximately €1.35 billion.
+2014 2015 2016 2017
+2013
+2012
+46
+45
+59
+59
+6On all German stock exchanges, including Xetra.
+0.30
+0.21
+51
+50
+5Based on ordinary shares outstanding at year-end.
+0.50
+0.50
+0.50
+0.60
+Report of the Supervisory Board
+CEO Letter
+4,110
+Fair value
+(netting
+agreements)
+Financial
+collateral
+received/
+pledged
+Net value
+€ in millions
+Financial assets
+Trade receivables
+3,879
+3,879
+25
+3,854
+Interest-rate and currency derivatives
+1,305
+1,305
+56
+1,249
+Commodity derivatives
+373
+373
+128
+245
+Total
+5,557
+0
+Carrying
+amount
+5,557
+Amount
+offset
+netting
+amount
+527
+Derivative financial instruments
+105
+31
+-3
+-3
+-56
+-3
+34
+105
+Total
+654
+69
+-53
+-3
+-82
+0
+-4
+51
+632
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following table:
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2017
+Conditional
+Gross
+amount
+17
+153
+5,348
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2016
+195
+Conditional
+netting
+amount
+Financial
+Gross
+amount
+Amount
+offset
+Carrying
+(netting
+collateral
+received/
+amount
+agreements)
+pledged
+Net value
+€ in millions
+Financial assets
+Trade receivables
+3,999
+3,999
+41
+3,958
+Interest-rate and currency derivatives
+Combined Group Management Report
+56
+Strategy and Objectives
+Report of the Supervisory Board
+Financial liabilities
+Trade payables
+1,800
+1,800
+25
+1,775
+Interest-rate and currency derivatives
+2,146
+2,146
+692
+1,454
+Commodity derivatives
+128
+128
+128
+Total
+4,074
+0
+4,074
+153
+692
+3,229
+CEO Letter
+E.ON Stock
+-1
+-26
+-50
+Liabilities from finance leases
+358
+358
+n/a
+481
+Other financial liabilities
+1,816
+1,279
+AmC
+1,317
+506
+811
+Trade payables and other operating liabilities
+12,135
+8,721
+Trade payables
+2,040
+2,040
+AmC
+Derivatives with no hedging relationships
+1,295
+1,295
+HFT
+51
+1,295
+97
+AmC
+6,474
+6,091
+383
+5,574
+5,574
+LaR
+852
+852
+LaR
+12
+AfS
+23,229
+22,474
+14,227
+13,690
+11,905
+11,905
+AmC
+16,930
+16,930
+Bank loans/Liabilities to banks
+148
+148
+148
+43
+1,152
+Derivatives with hedging relationships
+Sales
+Gains/
+Losses in
+Transfers
+Gains/
+Jan. 1, (including
+(including
+€ in millions
+2017
+additions)
+disposals)
+Settle-
+ments
+income
+statement
+into
+out of
+Losses in
+Dec. 31,
+Level 3
+Level 3
+OCI
+2017
+Equity investments
+549
+38
+Purchases
+Fair Value Hierarchy Level 3 Reconciliation
+The input parameters of Level 3 of the fair value hierarchy for
+equity investments are specified taking into account economic
+developments and available industry and corporate data (see
+also Note 1). The fair values determined using valuation tech-
+niques for financial instruments carried at fair value are recon-
+ciled as shown in the following table:
+In 2017, there were no material reclassifications between
+Levels 1 and 2 of the fair value hierarchy. At the end of each
+reporting period, E.ON assesses whether there might be grounds
+for reclassification between hierarchy levels.
+1,572
+1,572
+n/a
+1,572
+1,572
+Put option liabilities under IAS 322
+493
+493
+AmC
+493
+Other operating liabilities
+1,858
+6,735
+AmC
+3,321
+Total liabilities
+26,362
+22,411
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined using valua-
+tion techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+The fair value of shareholdings in unlisted companies and of
+debt instruments that are not actively traded, such as loans
+received, loans granted and financial liabilities, is determined by
+discounting future cash flows. Any necessary discounting takes
+place using current market interest rates over the remaining
+terms of the financial instruments. Fair value measurement was
+not applied in the case of shareholdings with a carrying amount
+of €92 million (2016: €56 million) as cash flows could not be
+determined reliably for them. The shareholdings are not material
+by comparison with the overall position of the Group.
+Notes
+194
+The determination of the fair value of derivative financial instru-
+ments is discussed in Note 30.
+3,321
+1,858
+97
+1,761
+Derivatives (with/without hedging relationships)
+9,349
+761
+1,284
+2,030
+Put option liabilities under IAS 32
+33
+97
+66
+335
+Other operating liabilities
+3,313
+5
+5
+2
+Cash outflows for trade payables and other operating liabilities
+14,735
+863
+1,355
+2,367
+Cash outflows for liabilities within the scope of IFRS 7
+19,190
+3,742
+2,040
+4,826
+Trade payables
+3,471
+Cash
+outflows
+from 2022
+3,277
+2,358
+3,358
+7,937
+Bank loans/Liabilities to banks
+108
+11
+10
+23
+Liabilities from finance leases
+Other financial liabilities
+Financial guarantees
+55
+111
+103
+246
+918
+399
+97
+Cash outflows for financial liabilities
+4,455
+2,879
+8,206
+10,573
+CEO Letter
+Report of the Supervisory Board
+1The categories are described in detail in Note 1.
+The net gains and losses in the held-for-trading category encom-
+pass both the changes in fair value of the derivative financial
+instruments and the gains and losses on realization. The changes
+in market value were primarily influenced by the fair value
+measurement of commodity derivatives and of realized gains
+on currency derivatives.
+Risk Management
+Principles
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within
+the confines of the Group's overall guidelines. To ensure efficient
+risk management at the E.ON Group, the Trading (Front Office),
+Financial Controlling (Middle Office) and Financial Settlement
+(Back Office) departments are organized as strictly separate units.
+Risk controlling and reporting in the areas of interest rates,
+currencies, credit and liquidity management is performed by
+the Financial Controlling department, while risk controlling and
+reporting in the area of commodities is performed at Group level
+by a separate department.
+E.ON uses a Group-wide treasury, risk management and report-
+ing system. This system is a standard information technology
+solution that is fully integrated and is continuously updated.
+The system is designed to provide for the analysis and monitor-
+ing of the E.ON Group's exposure to liquidity, foreign exchange
+and interest risks. Credit risks are monitored and controlled on
+a Group-wide basis by Financial Controlling, with the support
+of a standard software package.
+In addition to interest income from financial receivables, the
+net gains and losses in the loans and receivables category con-
+sist primarily of valuation allowances on trade receivables.
+Gains and losses on the disposal of available-for-sale securities
+and equity investments are reported under other operating
+income and other operating expenses, respectively.
+The net gains and losses in the amortized cost category are due
+primarily to interest on and currency translation of financial lia-
+bilities as well as capitalized construction-period interest.
+Notes
+198
+Separate Risk Committees are responsible for the maintenance
+and further development of the strategy set by the Management
+Board of E.ON SE with regard to commodity, treasury and credit
+risk management policies.
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON consist
+of ensuring ability to pay at all times, the timely satisfaction of
+contractual payment obligations and the optimization of costs
+within the E.ON Group.
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+E.ON SE determines the Group's financing requirements on the
+basis of short- and medium-term liquidity planning. The financing
+of the Group is controlled and implemented on a forward-looking
+basis in accordance with the planned liquidity requirement or
+surplus. Relevant planning factors taken into consideration include
+operating cash flow, capital expenditures, divestments, margin
+payments and the maturity of bonds and commercial
+paper.
+2. Price Risks
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest
+rates, commodities and asset management. These risks create
+volatility in earnings, equity, debt and cash flows from period to
+period. E.ON has developed a variety of strategies to limit or
+eliminate these risks, including the use of derivative financial
+instruments, among others.
+3. Credit Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group to
+identify, measure and control credit risks.
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from profit-at-risk ("PaR"),
+value-at-risk ("VaR") and sensitivity analyses are "forward-
+looking statements" that involve risks and uncertainties. Actual
+results could differ materially from those projected due to
+actual, unforeseeable developments in the global financial mar-
+kets. The methods used by the Company to analyze risks should
+not be considered forecasts of future events or losses. For
+example, E.ON faces certain risks that are either non-financial
+or non-quantifiable. Such risks principally include country risk,
+operational risk, regulatory risk and legal risk, which are not
+represented in the following analyses.
+Foreign Exchange Risk Management
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+Because it holds interests in businesses outside of the euro area,
+currency translation risks arise within the E.ON Group. Fluctua-
+tions in exchange rates produce accounting effects attributable
+to the translation of the balance sheet and income statement
+items of the foreign consolidated Group companies included in
+the Consolidated Financial Statements. Translation risks are
+hedged through borrowing in the corresponding local currency,
+which may also include shareholder loans in foreign currency.
+In addition, derivative and primary financial instruments are
+employed as needed. The hedges qualify for hedge accounting
+under IFRS as hedges of net investments in foreign operations.
+The Group's translation risks are reviewed at regular intervals
+and the level of hedging is adjusted whenever necessary. The
+respective debt factor, net assets and the enterprise value
+denominated in the foreign currency are the principal criteria
+governing the level of hedging.
+550
+-1,382
+Total
+745
+-736
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+197
+Financial guarantees with a total nominal volume of €8 million
+(2016: €97 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees. E.ON has
+recognized a liability for this in the amount of €8 million (2016:
+€8 million).
+For financial liabilities that bear floating interest rates, the rates
+that were fixed on the balance sheet date are used to calculate
+future interest payments for subsequent periods as well. Finan-
+cial liabilities that can be terminated at any time are assigned
+to the earliest maturity band in the same way as put options that
+are exercisable at any time. All covenants were complied with
+during 2017.
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+The net gains and losses from financial instruments by IAS 39
+category are shown in the following table:
+Net Gains and Losses by Category¹
+Cash
+outflows
+2019-2021
+€ in millions
+Available for sale
+2017
+2016
+-132
+-210
+338
+751
+Held for trading
+-1,077
+Amortized cost
+-511
+Loans and receivables
+AfS
+Cash
+outflows
+2018
+Cash
+4,907
+0
+4,907
+56
+800
+4,051
+Transactions and business relationships resulting in the deriva-
+tive financial receivables and liabilities presented are generally
+concluded on the basis of standard contracts that permit the
+netting of open transactions in the event that a counterparty
+becomes insolvent.
+The netting agreements are derived from netting clauses con-
+tained in master agreements including those of the International
+Swaps and Derivatives Association (ISDA), the German Master
+Agreement for Financial Derivatives Transactions (DRV), the
+European Federation of Energy Traders (EFET) and the Financial
+Energy Master Agreement (FEMA). Collateral pledged to and
+received from financial institutions in relation to these liabilities
+and assets limits the utilization of credit lines in the fair value
+measurement of interest-rate and currency derivatives, and is
+shown in the table. For commodity derivatives in the energy
+trading business, the netting option is not presented in the
+accounting because the legal enforceability of netting agree-
+ments varies by country. The E.ON Group did not net inter-
+est-rate and currency derivatives and non-derivative financial
+instruments.
+Notes
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities
+included in the scope of IFRS 7:
+Cash Flow Analysis as of December 31, 2017
+€ in millions
+Bonds
+Commercial paper
+Cash
+Cash
+outflows
+2018
+outflows
+2019
+Cash
+outflows
+2020-2022
+1,369
+3,103
+196
+198
+Cash
+outflows
+from 2023
+15
+213
+Commodity derivatives
+660
+660
+15
+645
+Total
+6,517
+6,517
+56
+97
+6,364
+Financial liabilities
+Trade payables
+Interest-rate and currency derivatives
+Commodity derivatives
+Total
+2,040
+2,040
+41
+1,999
+2,654
+2,654
+800
+1,854
+213
+9,469
+Bank loans/Liabilities to banks
+Liabilities from finance leases
+17
+69
+270
+100
+Other operating liabilities
+4,136
+7
+1
+3
+Cash outflows for trade payables and other operating liabilities
+11,901
+718
+1,192
+2,840
+Cash outflows for liabilities within the scope of IFRS 7
+15,151
+2,211
+4,407
+12,587
+Cash Flow Analysis as of December 31, 2016
+€ in millions
+Bonds
+Commercial paper
+Put option liabilities under IAS 32
+2,737
+921
+642
+Other financial liabilities
+Financial guarantees
+Cash outflows for financial liabilities
+77
+4
+10
+30
+56
+102
+100
+246
+outflows
+2017
+949
+2
+2
+8
+3,250
+1,493
+3,215
+9,747
+Trade payables
+1,800
+Derivatives (with/without hedging relationships)
+5,948
+18
+6,474
+2,160
+1,220
+245
+3,958
+2
+24
+-3
+8
+2
+3
+-3
+28
+33
+1
+18
+318
+13
+76
+50
+434
+49
+525
+-54
+107
+-15
+4,025
+399
+447
+(31) Additional Disclosures on Financial
+Instruments
+688
+Financial receivables and other financial assets
+Receivables from finance leases
+(Level 2)
+259
+6
+792
+AfS
+792
+792
+Equity investments
+Derived from
+active mar-
+ket prices
+prices
+(Level 1)
+Fair value
+category¹
+ment
+Determined
+using market
+measure-
+IAS 39
+Carrying
+amounts
+within the
+scope of
+IFRS 7
+Carrying
+amounts
+€ in millions
+192
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2017
+The carrying amounts of the financial instruments, their grouping
+into IAS 39 measurement categories, their fair values and their
+measurement sources by class are presented in the following
+table:
+Notes
+176
+1,466
+150
+-842
+4,533
+-203
+1,000
+36
+250
+24
+2,250
+-847
+1,793
+-866
+2,283
+-811
+2,043
+-842
+4,533
+358
+7,967
+-76
+6,857
+36
+36
+25
+3,043
+-1,014
+3,756
+-682
+893
+-1
+189
+256
+1,645
+52
+1,834
+Fair value
+Nominal
+value
+Fair value
+value
+688
+Nominal
+December 31, 2017
+-796
+29,914
+-1,522
+28,759
+-28
+55
+-682
+3,756
+-28
+55
+December 31, 2016
+36
+329
+n/a
+12,789
+Trade payables and other operating liabilities
+564
+982
+AmC
+966
+1,907
+Other financial liabilities
+467
+n/a
+357
+357
+Liabilities from finance leases
+8
+13,280
+55
+116
+AmC
+116
+116
+Bank loans/Liabilities to banks
+13,280
+AmC
+10,641
+9,226
+10,641
+Trade payables
+1,800
+6,474
+AmC
+4,110
+7,673
+Other operating liabilities
+360
+AmC
+360
+360
+Put option liabilities under IAS 322
+1,756
+1,159
+1,159
+n/a
+1,159
+1,159
+Derivatives with hedging relationships
+14
+1,797
+HFT
+1,797
+1,797
+Derivatives with no hedging relationships
+AmC
+1,800
+12,080
+13,021
+15,794
+279
+n/a
+279
+279
+29
+1,401
+HFT
+1,401
+1,401
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+LaR
+3,879
+3,879
+Trade receivables
+6,405
+7,152
+Trade receivables and other operating assets
+359
+LaR
+359
+359
+Other financial receivables and financial assets
+329
+1,240
+279
+Other operating assets
+Securities and fixed-term deposits
+Cash and cash equivalents
+19,842
+AfS
+3,301
+LaR
+1,782
+1,782
+LaR
+2,708
+2,708
+531
+2,888
+329
+3,419
+3,419
+3,419
+846
+LaR
+846
+1,593
+Bonds
+Financial liabilities
+Total assets
+Assets held for sale
+Restricted cash
+Afs
+322
+Total liabilities
+-101
+Report of the Supervisory Board
+CEO Letter
+Pursuant to the information available as of the balance sheet
+date, the following effects will accompany the reclassifications
+from accumulated other comprehensive income to the income
+statement in subsequent periods:
+21,306
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined using valua-
+tion techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable esti-
+mates of their fair values because of their short maturity.
+Where the value of a financial instrument can be derived from an
+active market without the need for an adjustment, that value is
+used as the fair value. This applies in particular to equities held
+and to bonds held and issued.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2016
+193
+€ in millions
+Carrying
+amounts
+Carrying
+amounts
+within the
+scope of
+IFRS 7
+IAS 39
+measure-
+Determined
+Derived from
+using market
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+-590
+-130
+-52
+-60
+-832
+-64
+19
+8
+-189
+-226
+>2022
+active mar-
+2020-2022
+2018
+amount
+Carrying
+Expected gains/losses
+189
+¹Other comprehensive income. Figures are pretax.
+OCI-Commodity cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Currency cash flow hedges
+€ in millions
+Timing of Reclassifications from OCI¹ to the Income Statement-2017
+2019
+46
+ment
+category¹
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+1,647
+1,647
+HFT
+1,647
+29
+871
+871
+n/a
+871
+1,413
+871
+Other operating assets
+Securities and fixed-term deposits
+Cash and cash equivalents
+Restricted cash
+Assets held for sale
+Total assets
+Financial liabilities
+Bonds
+1,963
+1,220
+LaR
+7,931
+LaR
+3,999
+3,999
+Trade receivables
+Fair value
+1)
+ket prices
+(Level 2)
+Equity investments
+821
+821
+AfS
+66
+206
+Financial receivables and other financial assets
+Receivables from finance leases
+1,016
+prices (Level
+1,016
+372
+n/a
+372
+Other financial receivables and financial assets
+644
+644
+LaR
+644
+Trade receivables and other operating assets
+8,480
+7,737
+372
+-1
+821
+7
+Gas options
+Gas swaps
+Exchange-traded gas forwards
+Gas forwards
+Electricity options
+Electricity swaps
+Exchange-traded electricity forwards
+Electricity forwards
+€ in millions
+Total Volume of Electricity, Gas, Coal, Oil and Emissions-Related Derivatives
+Total
+Subtotal
+Other derivatives
+Subtotal
+Interest rate options
+Fixed-rate receiver
+Fixed-rate payer
+Interest rate swaps
+Subtotal
+Cross-currency interest rate swaps
+Cross-currency swaps
+Subtotal
+FX forward transactions
+Coal forwards and swaps
+€ in millions
+Exchange-traded coal forwards
+Exchange-traded oil derivatives
+-112
+6,821
+1
+18,849
+78
+13,613
+-112
+18,849
+78
+13,613
+25,810
+value
+Fair value
+value
+Nominal
+Nominal
+December 31, 2016
+December 31, 2017
+191
+Total
+Other exchange-traded derivatives
+Other derivatives
+Exchange-traded emissions-related derivatives
+Oil derivatives
+Total Volume of Foreign Currency, Interest Rate and Equity-Based Derivatives
+Emissions-related derivatives
+Combined Group Management Report
+1
+-1,014
+-21
+-8
+-5
+-1,048
+13
+-232
+13
+7
+-212
+2019-2021
+2
+2018
+amount
+Carrying
+Expected gains/losses
+¹Other comprehensive income. Figures are pretax.
+OCI-Commodity cash flow hedges
+OCI-Interest cash flow hedges
+OCI-Currency cash flow hedges
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+39
+€ in millions
+Timing of Reclassifications from OCI¹ to the Income Statement-2016
+2017
+10
+>2021
+A gain of €135 million (2016: €673 million loss) was posted to
+other comprehensive income in 2017. In the same period, a
+gain of €63 million (2016: €342 million gain) was reclassified
+from OCI to the income statement.
+Report of the Supervisory Board
+CEO Letter
+Gains and losses from reclassification are generally reported
+in that line item of the income statement which also includes
+the respective hedged transaction. Gains and losses from the
+ineffective portions of cash flow hedges are classified as other
+operating income or other operating expenses. Interest cash
+flow hedges are reported under "Interest and similar expenses."
+The fair values of the designated derivatives in cash flow hedges
+totaled -€931 million (2016: -€624 million).
+Strategy and Objectives
+for IAS 39 hedge accounting treatment and those for which it is
+not used:
+The following two tables include both derivatives that qualify
+At the beginning of 2017, a net loss of €58 million from the
+initial measurement of derivatives was deferred. In the year
+under review, deferred expenses increased by €10 million to
+€68 million, which will be recognized in income during subse-
+quent periods as the contracts are settled.
+E.ON Stock
+• Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective clear-
+ing houses. Paid initial margins are disclosed under other
+assets. Variation margins received or paid during the term of
+such contracts are stated under other liabilities or other
+assets, respectively.
+Equity forwards are valued on the basis of the stock prices of
+the underlying equities, taking into consideration any timing
+components.
+The fair values of existing instruments to hedge interest risk
+are determined by discounting future cash flows using market
+interest rates over the remaining term of the instrument.
+Discounted cash values are determined for interest rate, cross-
+currency and cross-currency interest rate swaps for each
+individual transaction as of the balance sheet date. Interest
+income and expenses are recognized in income at the date of
+payment or accrual.
+•
+Certain long-term energy contracts are valued with the
+aid of valuation models that use internal data if market
+prices are not available. A hypothetical 10-percent increase
+or decrease in these internal valuation parameters as of the
+balance sheet date would lead to a theoretical decrease in
+market values of €27 million or an increase of €27 million,
+respectively.
+•
+Notes
+190
+The Company uses foreign currency forwards, foreign currency
+swaps and foreign currency loans to protect the value of its net
+investments in its foreign operations denominated in foreign cur-
+rency. For the year ended December 31, 2017, the Company
+recorded an amount of €123 million (2016: €568 million) in
+accumulated other comprehensive income due to changes in fair
+value of derivatives and to currency translation results of non-
+derivative hedging instruments. As in 2016, no ineffectiveness
+resulted from net investment hedges in 2017.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant vari-
+ables. The Company assesses and monitors the fair value of
+derivative instruments on a periodic basis. The fair value to be
+determined for each derivative instrument is the price that
+would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants on the
+measurement date (exit price). E.ON also takes into account the
+counterparty credit risk for both own credit risk (debt value
+adjustment) and the risk of the corresponding counterparty
+(credit value adjustment) when determining fair value. The fair
+values of derivative instruments are calculated using common
+market valuation methods with reference to available market
+data on the measurement date.
+Net Investment Hedges
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments in
+the Consolidated Financial Statements.
+•
+• Market prices for interest rate, electricity and gas options
+are valued using standard option pricing models commonly
+used in the market. The fair values of caps, floors and collars
+are determined on the basis of quoted market prices or on
+calculations based on option pricing models.
+Currency, electricity, gas, oil and coal forward contracts,
+swaps, and emissions-related derivatives are valued sep-
+arately at their forward rates and prices as of the balance
+sheet date. Whenever possible, forward rates and prices are
+based on market quotations, with any applicable forward
+premiums and discounts taken into consideration.
+-11
+15
+3,074
+3,112
+24
+15
+277
+55
+-1
+63
+67
+65
+-369
+-65
+553
+506
+430
+454
+-1,827
+-1,881
+1
+-95
+-91
+-148
+38,173
+-331
+282
+-366
+-342
+601
+The significant increase in other non-operating earnings is
+attributable to effects resulting from the ruling by Germany's
+highest court on the invalidity of the nuclear-fuel tax and to the
+equity earnings on our Uniper stake, which were included in this
+item until the end of September 2017. In the prior year this
+item was adversely affected by items resulting from the Act
+Reorganizing Responsibility for Nuclear Waste Management,
+which was passed by Germany's Bundestag and Bundesrat in
+December 2016. These items, including the concomitant
+impairment charges, were recorded fully in the prior year.
+-7,357
+Net book gains/losses
+Non-operating adjustments
+37,965
+EBIT
+Income/Loss from equity investments
+Income/Loss from continuing operations before financial results and income taxes
+€ in millions
+Reconciliation of Income before Financial Results and Income Taxes
+The following table shows the reconciliation of earnings before
+interest and taxes to adjusted EBIT:
+In 2017 we recorded impairment charges principally at Renew-
+ables and Customer Solutions in the United Kingdom. In the
+prior year we recorded impairment charges at Renewables and
+Customer Solutions in the United Kingdom and on a gas storage
+facility in Germany.
+The marking to market of the derivatives we use to shield our
+operating business from price fluctuations and of other deriva-
+tives resulted in a negative effect of €951 million (prior year:
++€932 million), mainly at Corporate/Other, Customer Solutions,
+and Non-Core Business. The positive effect in the prior year
+was recorded primarily at Customer Solutions.
+Restructuring expenditures rose substantially year on year. As
+in the prior-year period, they resulted mainly from restructuring
+programs and the One2two project. The increase is primarily
+attributable to higher expenditures for restructuring programs,
+in particular for Phoenix, a reorganization program.
+the sale of an equity investment at Customer Solutions in
+Sweden. In 2016 we recorded lower book gains on the sale of
+securities and a book loss on the sale of our U.K. E&P business.
+3,169
+699
+3,308
+3
+106
+53
+15
+14
+1,070
+1,225
+3,974
+-2,235
+3
+5
+-756
+-147
+93
+-21
+-4,106
+Unadjusted EBIT represents the Group's income/loss reported
+1,124
+Consolidation
+Corporate Functions/Other5
+Non-Core Business4
+Renewables
+205
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Consolidated Financial Statements
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Net book gains were significantly above the prior-year figure and
+resulted in particular from the sale of securities, which were sold
+in preparation for the payment into Germany's public fund for
+financing nuclear-waste disposal which was due in July, and from
+In addition, starting from the 2017 fiscal year, effects from the
+valuation of certain provisions on the balance sheet date are
+disclosed in non-operating earnings. The change in recognition
+results in improved presentation of sustainable earnings power.
+Due to the fundamental change in operations in 2016 and the
+structural change to these activities, there is not a reasonably
+meaningful way to correct prior-year figures.
+The non-operating earnings effects for which EBIT is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market of derivative
+financial instruments used for hedging and, where material,
+book gains/losses, certain restructuring expenses, impairment
+charges and reversals recognized in the context of impairment
+tests on non-current assets, on equity investments in affiliated
+or associated companies and on goodwill, and other contribu-
+tions to non-operating earnings. The refund of the nuclear-fuel
+tax is also reported in non-operating earnings.
+in accordance with IFRS before financial results and income
+taxes, taking into account the net income/expense from equity
+investments. To improve its meaningfulness as an indicator of
+the sustainable earnings power of the E.ON Group's business,
+unadjusted EBIT is adjusted for certain non-operating effects.
+The E.ON Management Board is convinced that adjusted EBIT is
+the most suitable key figure for assessing operating performance
+because it presents a business's operating earnings independently
+of non-operating factors, interest, and taxes.
+Adjusted EBIT, a measure of earnings before interest and taxes
+("EBIT") adjusted to exclude non-operating effects, is used at
+E.ON for purposes of internal management control and as the
+most important indicator of a business's sustainable earnings
+power.
+Adjusted EBIT
+The investments presented in the financial information by busi-
+ness segment tables are the purchases of investments reported
+in the Consolidated Statements of Cash Flows.
+-7
+¹Operating cash flow from continuing operations.
+-5,913
+2,961
+-2,952
+Operating cash flow
+-6,209
+303
+3,974
+-537
+-476
+Restructuring expenses
+Market valuation derivatives
+Impairments (+)/Reversals (-)
+Other non-operating earnings
+-483
+E.ON Group
+2017
+2016
+2017
+796
+1,538
+1,585
+1,357
+1,604
+0
+0
+-4,130
+-4,578
+685
+671
+467
+837
+38,173
+-4,577
+37,965
+1
+439
+125
+1,538
+1,585
+890
+767
+2016
+2017
+2016
+2017
+2016
+2017
+2016
+24
+Adjusted EBIT
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are
+presented on page 98 and 99 in the Compensation Report.
+2016
+Report of the Supervisory Board
+CEO Letter
+E.ON's customer structure resulted in a focus on the Germany
+region. Aside from that, there was no major concentration in
+any given geographical region or business area. Due to the large
+number of customers the Company serves and the variety of its
+business activities, there are no individual customers whose
+business volume is material compared with the Company's total
+business volume.
+343 3,547 6,352
+280
+110 2,054 2,306
+90
+3,593
+1,123
+Companies accounted for
+under the equity method
+24,766 25,242
+2,534
+2,307
+4,674 3,517 3,388
+4,679
+10,555 11,076 3,708 3,570
+equipment
+Property, plant and
+188 37,965 38,173
+203 2,243 2,329
+209
+54
+6,278
+6,169
+1,088 1,039
+2,123 2,085
+146
+133
+8,184
+380
+21,995 21,547 7,360
+560
+574
+395
+Intangible assets
+location of seller
+External sales by
+189 37,965 38,173
+211
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+208
+Wildberger
+Birnbaum
+вы
+Spieker
+keiler
+Teyssen
+Jm
+The Management Board
+Essen, March 12, 2018
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+Declaration of the Management Board
+There are no effects on E.ON's Consolidated Financial State-
+ments for fiscal year 2017. Indications relating to possible
+future effects resulting from the acquisition of innogy SE via a
+wide-ranging exchange of assets with RWE AG are currently
+not included in the Annual Report, since the transaction is also
+subject to customary antitrust clearances.
+The transaction will be implemented in several steps and is
+subject to customary antitrust clearances and is expected to
+close in mid 2019.
+6,551 6,218
+E.ON will also make a voluntary public takeover offer in cash to
+the shareholders of innogy SE. This offer includes as of today
+a total value of €40 per share for the innogy shareholders. The
+total value consists of an offer price of €36.76 per share plus
+assumed dividends of innogy SE for the fiscal years 2017 and
+2018 in the total amount of €3.24 per share. RWE will not par-
+ticipate in the offer.
+On March 12, 2018, E.ON SE agreed with RWE AG on an
+acquisition of RWE's 76.8 percent stake in innogy SE. The
+acquisition will be carried out via a wide-ranging exchange of
+assets and participations.
+(35) Subsequent Events
+Additional information about the members of the Management
+Board is provided on page 224.
+The Management Board's compensation structure and the
+amounts for each member of the Management Board are pre-
+sented on pages 84 through 97 in the Compensation Report.
+As in 2016, there were no loans to members of the Management
+Board in 2017.
+Total payments to former members of the Management Board
+and their beneficiaries amounted to €12.4 million (2016:
+€11.6 million). Provisions of €159.0 million (2016: €172.8 mil-
+lion) have been established for the pension obligations to former
+members of the Management Board and their beneficiaries.
+Total compensation of the Management Board in 2017 amounted
+to €14.0 million (2016: €13.8 million). This consisted of base
+salary, bonuses, other compensation elements and share-based
+payments.
+Management Board
+Additional information about the members of the Supervisory
+Board is provided on pages 222 and 223.
+Tax payments
+As in 2016, there were no loans to members of the Supervisory
+Board in 2017.
+Total remuneration to members of the Supervisory Board in
+2017 amounted to €4.5 million (2016: €3.6 million).
+(34) Compensation of Supervisory Board and
+Management Board
+Supervisory Board
+207
+In exchange for the 76.8 percent stake in innogy SE, E.ON will
+grant to RWE an effective participation of 16.67 percent in
+E.ON SE. The shares will be issued by way of a 20 percent capital
+increase against contribution in kind from existing authorized
+capital. Furthermore, E.ON will transfer to RWE most of E.ON's
+renewables business and also the minority interests currently
+held by E.ON's subsidiary PreussenElektra in the RWE-operated
+nuclear power plants Emsland and Gundremmingen. Further-
+more, RWE will receive the entire innogy renewables business
+and the innogy gas storage businesses and the stake in the
+Austrian energy supplier Kelag. The transfer of businesses and
+participations would be conducted with economic effect as
+of January 1, 2018. The transaction further provides for a cash
+payment from RWE to E.ON in the amount of €1.5 billion.
+2017
+2,139
+21,953 21,803 7,056 7,824
+Other
+Gas
+Electricity
+€ in millions
+Segment Information by Product
+External sales by product break down as follows:
+Additional Entity-Level Disclosures
+Pages 31 and 32 of the Combined Group Management Report
+provide a more detailed explanation of the reconciliation of
+adjusted EBIT to the net income/loss reported in the Consolidated
+Financial Statements.
+Notes
+3,112
+3,074
+3,869
+-3,620
+394
+916
+-932
+951
+274
+541
+-63
+-375
+3,542
+-1,587
+-430
+4,661
+-19
+-3
+-411
+4,664
+Total
+2017
+2016
+30,178
+location of customer
+External sales by
+2016
+2017
+2016
+2017
+2016
+2017
+2016
+2017
+Total
+Other
+Europe (other)
+Sweden
+2,194
+United Kingdom
+2016
+Germany
+2016
+2017
+€ in millions
+206
+Geographic Segment Information
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the
+equity method, by geographic area:
+The "Other" item consists in particular of revenues generated
+from services.
+38,173
+37,965
+1,948
+1,890
+6,378
+5,897
+29,847
+2017
+-234
+2017
+-2,235
+Joint ventures
+2,166
+1,771
+1,250
+Associated companies
+1,671
+Liabilities
+198
+224
+Other related parties
+1,499
+1,294
+7
+1
+Joint ventures
+643
+Associated companies
+868
+Receivables
+318
+358
+Other related parties
+29
+10
+Joint ventures
+279
+6,517
+Associated companies
+626
+6,885
+Expenses
+144
+32
+207
+54
+389
+Led by its Group Management in Essen, Germany, the E.ON
+Group comprises the seven reporting segments described
+below, as well as a segment for its Non-Core Business and
+Corporate Functions/Other, all of which are reported here in
+accordance with IFRS 8. The combined segments, which are
+not separately reportable, in the East-Central Europe/Turkey
+Energy Networks business and the Customer Solutions Other
+business are of subordinate importance and have similar eco-
+nomic characteristics with respect to customer structure, prod-
+ucts and distribution channels. Information regarding Uniper SE
+is provided in Note 4.
+(33) Segment Information
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 84 through 99.
+The members of the Supervisory Board received a total of
+€4.5 million for their activity in 2017 (2016: €3.6 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts
+with subsidiaries totaling €0.6 million (2016: €0.6 million).
+Provisions for these commitments amounted to €14.9 million as
+of December 31, 2017 (2016: €9.5 million).
+The expense determined in accordance with IFRS 2 for exist-
+ing commitments arising from share-based payment in 2017
+was €6.5 million (2016: €2.3 million).
+203
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+As of December 31, 2017, receivables totaling €463 million
+(2016: €1,136 million) and liabilities of €572 million (2016:
+€908 million) to companies of the Uniper Group consist primar-
+ily of electricity and gas transactions and the measurement of
+commodity derivatives. In addition, revenues of €2,399 million
+(2016: €2,982 million), interest income of €2 million (2016:
+€188 million), other income of €94 million (2016: €1,579 mil-
+lion), other expenses of €6,203 million (2016: €8,237 million)
+and interest expenses of €5 million (2016: €11 million) were
+generated with the fully consolidated companies of the Uniper
+Group.
+The total expense for 2017 for members of the Management
+Board amounted to €9.6 million (2016: €9.7 million) in short-
+term benefits and €2.2 million (2016: €2.3 million) in post-
+employment benefits. The cost of post-employment benefits
+is equal to the service and interest cost of the provisions for
+pensions. Additionally taken into account in 2017 were actuarial
+gains of €1.1 million (2016: actuarial losses of €1.9 million).
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory
+Board of E.ON SE) must be disclosed.
+E.ON has issued collateral for the Uniper Group. These contin-
+gencies are presented in Note 27.
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2017, include €104 million (2016: €281 million) in trade
+payables and shareholder loans to operators of jointly-owned
+nuclear power plants. These shareholder loans bear interest at
+1.0 percent (2016: 1.0 percent) and have no fixed maturity.
+E.ON continues to have in place with these power plants a
+cost-transfer agreement and a cost-plus-fee agreement for
+the procurement of electricity. The settlement of such liabilities
+occurs mainly through clearing accounts.
+In addition, E.ON generates income from transactions with
+related companies through the delivery of gas and electricity to
+distributors and municipal entities, especially municipal utilities.
+The relationships with these entities do not generally differ
+from those that exist with municipal entities in which E.ON
+does not have an interest. Expenses from transactions with
+related companies are generated mainly through electricity and
+gas deliveries.
+20
+Other related parties
+55
+34
+Associated companies
+55
+54
+Provision
+341
+Other related parties
+Other related parties
+61
+17
+Credit Risk Management
+The risk policy was updated at the beginning of 2017 with a
+focus on the Renewables and Preussen Elektra electricity genera-
+tion business and the regional distribution business. The central
+market-oriented business approach was replaced by decentral-
+ized commodity risk management with regional market access.
+Commodity exposures and risks are reported across the Group
+on a monthly basis to the members of the Risk Committee.
+A key foundation of the commodity risk management system is
+the Group-wide Commodity Risk Policy and the corresponding
+internal policies of the units. These specify the control princi-
+ples for commodity risk management, minimum required stan-
+dards and clear management and operational responsibilities.
+As of December 31, 2017, the E.ON Group primarily held elec-
+tricity and gas derivatives with a nominal value of €3,958 mil-
+lion (2016: €4,025 million).
+Due to the decentralized governance approach and the primary
+focus on procurement and purely hedging transactions, the
+allocation of risk capital is no longer necessary. The processes
+and operational management models within the trading system
+are monitored by the local market risk teams and centrally
+managed by the Risk Management department. At the end of
+2017, the open position from the procurement on the markets
+in Germany, the U.K., the Czech Republic, Sweden and Hungary
+for the reporting period from 2018 to 2020 was not more than
+400 GWh per commodity in each case.
+gains and costs. All external trading on commodity markets
+must be related to reducing open commodity positions and be
+undertaken in strict accordance with approved commodity
+hedging strategies.
+200
+Notes
+Since the spinoff of Uniper, E.ON has established procurement
+capabilities for its sales business and thus ensured market access
+for E.ON's remaining energy production. In the normal course of
+business of the underlying energy production and retail sales
+activities, E.ON's individual management units are exposed to
+uncertain commodity market prices, which impacts operating
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the value of
+the portfolio while reducing the potential negative deviation
+from target EBIT.
+The E.ON portfolio of physical assets, long-term contracts and
+end-customer sales is exposed to substantial risks from fluc-
+tuations in commodity prices. The principal commodity prices
+to which E.ON is exposed relate to electricity, gas and emission
+certificates.
+Commodity Price Risk Management
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for internal
+risk controlling and reflects the economic position of the E.ON
+Group. A one-percentage-point upward or downward change in
+interest rates (across all currencies) would raise or lower interest
+charges by €0 (2016: ±€43.7 million) in the subsequent fiscal
+year.
+As of December 31, 2017, the E.ON Group held interest rate
+derivatives with a nominal value of €4,533 million (2016:
+€3,043 million).
+interest rate of the financial liabilities, including interest rate
+derivatives, was 5.4 percent as of December 31, 2017 (2016:
+5.6 percent).
+With interest rate derivatives included, the share of financial
+liabilities with floating interest rates was 0 percent as of Decem-
+ber 31, 2017 (2016: 0 percent). Under otherwise unchanged
+circumstances, the volume of financial liabilities with fixed inter-
+est rates, which amounted to €9.7 billion at year-end 2017,
+would decline to €8.6 billion in 2018 and €7.2 billion in 2019.
+The effective interest rate duration of the financial liabilities,
+including interest rate derivatives, was 12.0 years as of Decem-
+ber 31, 2017 (2016: 9.9 years). The volume-weighted average
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities. Positions based on fixed interest rates, on the other
+hand, are subject to changes in fair value resulting from the
+volatility of market rates. E.ON seeks a specific mix of fixed-
+interest and floating-rate debt over time. This is influenced,
+among other factors, by the type of business model, existing
+liabilities as well as the regulatory framework in which E.ON
+operates. To manage the interest rate position, several instru-
+ments, including derivatives, are deployed.
+Interest Risk Management
+The one-day value-at-risk (99 percent confidence) from the
+translation of deposits and borrowings denominated in foreign
+currency, plus foreign-exchange derivatives, was €100 million
+as of December 31, 2017 (2016: €113 million) and resulted
+primarily from the positions in British pounds, US dollars and
+Swedish kronor.
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated both
+by external financing in a variety of foreign currencies, and by
+shareholder loans from within the Group denominated in foreign
+currency. Financial transaction risks are generally fully hedged.
+The E.ON Group is also exposed to operating and financial trans-
+action risks attributable to foreign currency transactions. The
+subsidiaries are responsible for controlling their operating cur-
+rency risks. E.ON SE coordinates hedging throughout the Group
+and makes use of external derivatives as needed.
+199
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In order to minimize credit risk arising from operating activities
+and from the use of financial instruments, the Company enters
+into transactions only with counterparties that satisfy the Com-
+pany's internally established minimum requirements. Maxi-
+mum credit risk limits are set on the basis of internal and (where
+available) external credit ratings. The setting and monitoring of
+credit limits is subject to certain minimum requirements, which
+are based on Group-wide credit risk management guidelines.
+Long-term operating contracts and asset management trans-
+actions are not comprehensively included in this process. They
+are monitored separately at the level of the responsible units.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature of
+the operating activities and the credit risk, additional credit risk
+monitoring and controls are performed both by the units and by
+Group Management. Monthly reports on credit limits, including
+their utilization, are submitted to the Risk Committee. Intensive,
+standardized monitoring of quantitative and qualitative early-
+warning indicators, as well as close monitoring of the credit
+quality of counterparties, enable E.ON to act early in order to
+minimize risk.
+To the extent possible, pledges of collateral are negotiated with
+counterparties for the purpose of reducing credit risk. Accepted
+as collateral are guarantees issued by the respective parent
+companies or evidence of profit and loss pooling agreements in
+combination with letters of awareness. To a lesser extent, the
+Company also requires bank guarantees and deposits of cash and
+securities as collateral to reduce credit risk. Risk-management
+collateral was accepted in the amount of €864 million.
+CEO Letter
+Joint ventures
+349
+2,825
+Associated companies
+554
+3,049
+Income
+2016
+2017
+€ in millions
+Related-Party Transactions
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, the most significant of which are
+associated companies accounted for under the equity method
+and their subsidiaries. Receivables and payables to associates
+primarily include relationships with the fully consolidated sub-
+sidiaries of the Uniper Group. By contrast, income and expenses
+from transactions with fully consolidated companies of the
+Uniper Group were still consolidated in 2016 and are therefore
+only included in 2017. Additionally reported as related parties
+are joint ventures, as well as equity interests carried at fair value
+and unconsolidated subsidiaries. Transactions with related par-
+ties are summarized as follows:
+(32) Transactions with Related Parties
+202
+Energy Networks
+In addition, the mutual insurance fund Versorgungskasse Energie
+VVaG i.L. ("VKE") manages financial assets that are almost
+exclusively dedicated to the coverage of benefit obligations at
+E.ON Group companies in Germany; these assets totaled
+€1.1 billion at year-end 2017 (2016: €1.0 billion). The assets
+at VKE do not constitute plan assets under IAS 19 (see
+Note 24) and are shown as liquid funds on the balance sheet.
+VKE is subject to the provisions of the Insurance Supervision Act
+("Versicherungsaufsichtsgesetz" or "VAG") and its operations
+are supervised by the German Federal Financial Supervisory
+Authority ("Bundesanstalt für Finanzdienstleistungsaufsicht" or
+"BaFin"). Up to the end of 2017, financial investments and con-
+tinuous risk management were conducted within the regulatory
+confines set by BaFin. VKE was already in liquidation as of
+December 31, 2017, after the meeting of the fund's members
+decided to close it and BaFin granted its approval. The three-
+month VaR with a 98-percent confidence interval for these finan-
+cial assets was €0 as of December 31, 2017 (2016: €49 million)
+because of the liquidation of all financial investments. The
+shares of VKE's guarantee fund assets attributable to the E.ON
+Group will be transferred to the CTA (see Note 24) as an equiva-
+lent follow-on solution in the first half of 2018. Non-consolidated
+shares of VKE's guarantee fund assets are correspondingly
+transferred to the respective follow-on solutions of the member
+companies concerned and thus deconsolidated in the future.
+These financial assets are invested on the basis of an accumula-
+tion strategy (total-return approach), with investments broadly
+diversified across the money market, bond, real estate and
+equity asset classes. Asset allocation studies are performed at
+regular intervals to determine the target portfolio structure.
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 25) and cash investments, financial investments totaling
+€3.3 billion (2016: €5.3 billion) were held predominantly by
+German E.ON Group companies as of December 31, 2017.
+Asset Management
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest money
+at leading local banks. Standardized credit assessment and
+limit-setting is complemented by daily monitoring of CDS levels
+at the banks and at other significant counterparties.
+There is no credit risk with respect to the exchange-traded for-
+ward and option contracts with an aggregate nominal value of
+€189 million as of December 31, 2017 (2016: €0 million). For
+the remaining financial instruments, the maximum risk of
+default is equal to their carrying amounts.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements.
+The levels and details of financial assets received as collateral
+are described in more detail in Notes 18 and 26.
+201
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+The majority of the assets is held in investment funds managed
+by external fund managers. Corporate Asset Management at
+E.ON SE, which is part of the Company's Finance Department,
+is responsible for continuous monitoring of overall risks and
+those concerning individual fund managers. Risk management
+is based on a risk budget whose usage is monitored regularly.
+The three-month VaR with a 98-percent confidence interval for
+these financial assets was €38 million (2016: €175 million).
+Interest payments
+Germany
+Sweden
+2016
+Other
+Customer Solutions
+UK
+2017
+Germany
+3|2|
+ཋ
+ཋ
+||
+| |
+gg༞སྦ།
+རྩེ༞༄༄ རྟསྦ།
+ཎྜg། ༄༄།
+282
+605
+371
+291
+605
+575
+379
+44
+417
+398
+-231
+-237
+-164
+བྷ「༄ཝ།
+ཨྰ「རུ་། ༔ལྷ
+2017
+7,707 7,147 7,689
+6,656 6,552
+58
+interest and taxes
+Operating cash flow before
+Difference
+2016
+2017
+€ in millions
+Operating Cash Flow¹
+The following table shows the reconciliation of operating cash
+flow before interest and taxes to operating cash flow:
+Includes effects from the hedging of translation risks in accordance with IAS 7. The prior-year figures have been adjusted for improved comparability.
+"Cash flow from operating activities before interest and taxes includes the payment of €10.3 billion to the Nuclear Waste Fund.
+2Under IFRS, impairments on companies accounted for under the equity method and impairments on other financial assets (and any reversals of such charges) are included in income/loss from
+companies accounted for under the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
+³Operating cash flow from continuing operations.
+¹Adjusted for non-operating effects.
+287
+309
+846
+381
+211
+403
+10
+14
+215
+158
+-136
+-144
+250
+-103
+6,910 6,796
+7,781 7,205 7,791
+244
+254
+247
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+702
+1,588
+2016
+2017
+2016
+2017
+2016
+€ in millions
+ECE/Turkey
+Energy Networks
+Sweden
+Germany
+204
+Financial Information by Business Segment
+Notes
+Corporate Functions/Other contains E.ON SE itself, the equity
+investments held directly at E.ON SE and, for part of 2016,
+some remaining contributions from the E&P activities in the
+North Sea, which have since been sold. The Uniper Group,
+which is accounted for in the consolidated financial statements
+using the equity method, is also allocated to this segment. Uni-
+per's earnings are reported under non-operating earnings.
+Corporate Functions/Other
+Held in the Non-Core Business segment are the non-strategic
+activities of the E.ON Group. This includes the operation of the
+German nuclear power plants, which are managed by the Pre-
+ussen Elektra operating unit.
+Non-Core Business
+The Renewables segment combines the Group's activities for
+production from wind power plants (onshore and offshore) as
+well as solar farms.
+Renewables
+This segment combines the corresponding Customer Solutions
+in Sweden, Italy, the Czech Republic, Hungary and Romania, as
+well as E.ON Connecting Energies.
+Other
+The segment comprises sales activities and customer solutions
+in the UK.
+UK
+This segment consists of activities that supply our customers in
+Germany with electricity, gas and heating and the distribution
+of specific products and services in areas for improving energy
+efficiency and energy independence.
+Germany
+Customer Solutions
+This segment combines the distribution network activities in
+the Czech Republic, Hungary, Romania, Slovakia and Turkey.
+East-Central Europe/Turkey
+The segment comprises the electricity and gas networks busi-
+nesses in Sweden.
+External sales
+Investments
+12,536
+1,038
+2,451
+interest and taxes³
+Operating cash flow before
+74
+Equity-method earnings²
+894
+1,050
+Adjusted EBIT
+-613
+-591
+amortization¹
+Depreciation and
+7,452
+1,658
+11,622
+1,719
+13,205
+1,014
+742
+698
+7,368
+Intersegment sales
+1,072 1,029
+1,663
+34
+15
+977
+960
+Sales
+14,199
+1,583
+Notes
+Scarweather Sands Limited, GB, Coventry
+50.0
+26.3
+99.8
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+100.0
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+Stake (%)
+Name, location
+Stake (%)
+212
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+Notes
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . *This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+100.0
+E.ON Energy Installation Services Limited, GB, Coventry¹
+E.ON Energy Projects GmbH, DE, Munich¹
+E.ON Energilösningar AB, SE, Malmö¹
+100.0
+100.0
+100.0
+E.ON Energy Trading S.p.A., IT, Milan¹
+100.0
+E.ON Nord Sverige AB, SE, Malmö¹
+100.0
+E.ON Energy Solutions Limited, GB, Coventry¹
+100.0
+E.ON NA Capital LLC, US, Wilmington¹
+100.0
+E.ON Energy Solutions GmbH, DE, Unterschleißheim²
+100.0
+E.ON Metering GmbH, DE, Munich²
+100.0
+E.ON Energy Services, LLC, US, Wilmington¹
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+E.ON Climate & Renewables UK Robin Rigg West Limited, GB,
+Coventry¹
+100.0
+100.0
+100.0
+E.ON Climate & Renewables UK Humber Wind Limited, GB,
+Coventry¹
+100.0
+100.0
+100.0
+100.0
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie AG, DE, Düsseldorf¹,8
+100.0
+100.0
+100.0
+E.ON Energidistribution AB, SE, Malmö¹
+100.0
+100.0
+E.ON Energiatermelő Kft., HU, Debrecen¹
+100.0
+100.0
+E.ON Energiaszolgáltató Kft., HU, Budapest¹
+E.ON Climate & Renewables UK Limited, GB, Coventry¹
+E.ON Climate & Renewables UK London Array Limited, GB,
+Coventry¹
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+E.ON Energie Dialog GmbH, DE, Potsdam²
+100.0
+E.ON Energienetze Datteln GmbH, DE, Essen²
+E.ON Energihandel Nordic AB, SE, Malmö¹
+100.0
+E.ON Climate & Renewables UK Robin Rigg East Limited, GB,
+Coventry¹
+100.0
+68.2
+100.0
+E.ON Energie Real Estate Investment GmbH, DE, Munich²
+E.ON Energie România S.A., RO, Târgu Mureş¹
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+E.ON Nordic AB, SE, Malmö¹
+E.ON Climate & Renewables UK Operations Limited, GB,
+Coventry¹
+E.ON Climate & Renewables UK Offshore Wind Limited, GB,
+Coventry¹
+100.0
+E.ON Energie Odnawialne Sp. z o.o., PL, Szczecin¹
+100.0
+100.0
+E.ON Energie Kundenservice GmbH, DE, Landshut¹
+100.0
+99.8
+100.0
+100.0
+100.0
+100.0
+Gemeinnützige Gesellschaft zur Förderung des E.ON Energy
+Research Center mbH, DE, Aachen6
+50.0
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG, DE,
+Emmerthal¹
+100.0
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
+Gemeinsames europäisches Unternehmen, DE, Hamm
+Högbytorp Kraftvärme AB, SE, Malmö²
+100.0
+26.0
+100.0
+Gemeinschaftskernkraftwerk Grohnde Management GmbH,
+DE, Emmerthal²
+Holsteiner Wasser GmbH, DE, Neumünster6
+50.0
+83.2
+iamsmart GmbH, DE, Essen²
+100.0
+E.ON Real Estate GmbH, DE, Essen²
+100.0
+49.0
+E.ON Gashandel Sverige AB, SE, Malmö¹
+Gemeindewerke Wietze GmbH, DE, Wietze6
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co.
+OHG, DE, Neualbenreuth6
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+Name, location
+215
+Stake (%)
+Name, location
+Stake (%)
+Gemeindewerke Leck GmbH, DE, Leck6
+49.9
+Harzwasserwerke GmbH, DE, Hildesheim5
+20.8
+Gemeindewerke Uetze GmbH, DE, Uetze
+49.0
+Havelstrom Zehdenick GmbH, DE, Zehdenick
+49.0
+Gemeindewerke Wedemark GmbH, DE, Wedemark
+49.0
+50.0
+100.0
+E.ON RE Investments LLC, US, Wilmington¹
+100.0
+E.ON Power Innovation Pty Ltd, AU, Brisbane²
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf¹, 8
+70.0
+E.ON Perspekt GmbH, DE, Düsseldorf²
+100.0
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Off Grid Solutions GmbH, DE, Düsseldorf²
+100.0
+E.ON Fastigheter 2 AB, SE, Malmö²
+100.0
+E.ON North America Finance, LLC, US, Wilmington¹
+100.0
+E.ON Fastigheter 1 AB, SE, Malmö²
+100.0
+E.ON Norge AS, NO, Stavanger²
+100.0
+E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin²
+100.0
+E.ON Power Plants Belgium BVBA, BE, Mechelen²
+E.ON Gas Sverige AB, SE, Malmö¹
+100.0
+E.ON RAG Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf¹,8
+E.ON Produzione S.p.A., IT, Milan¹
+100.0
+E.ON First Future Energy Holding B.V., NL, Rotterdam²
+100.0
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+100.0
+E.ON Finanzholding SE & Co. KG, DE, Essen 1,8
+100.0
+100.0
+Summary of Financial Highlights and Explanations
+E.ON Climate & Renewables Netherlands B.V., NL, Amsterdam²
+E.ON Climate & Renewables North America, LLC, US, Wilmington¹
+E.ON Climate & Renewables Services GmbH, DE, Essen²
+E.ON Climate & Renewables UK Biomass Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Blyth Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Developments Limited, GB,
+Coventry¹
+E.ON Energiakereskedelmi Kft., HU, Budapest¹
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+E.ON 4. Verwaltungs GmbH, DE, Essen²
+100.0
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry2
+97.5
+Celle-Uelzen Netz GmbH, DE, Celle¹
+100.0
+e.kundenservice Netz GmbH, DE, Hamburg¹
+100.0
+Cattleman Wind Farm II, LLC, US, Wilmington²
+100.0
+e.distherm Wärmedienstleistungen GmbH, DE, Potsdam¹
+100.0
+Cattleman Wind Farm, LLC, US, Wilmington²
+87.8
+100.0
+E.ON Agile Nordic AB, SE, Malmö²
+Champion WF Holdco, LLC, US, Wilmington¹
+100.0
+CHN Electrical Services Limited, GB, Coventry2
+100.0
+E.ON Bioerdgas GmbH, DE, Essen¹
+100.0
+CHN Contractors Limited, GB, Coventry²
+100.0
+E.ON Beteiligungen GmbH, DE, Düsseldorf1,8
+100.0
+Charge-ON GmbH, DE, Essen¹
+100.0
+E.ON Bayern Verwaltungs AG, DE, Essen²
+100.0
+Champion Wind Farm, LLC, US, Wilmington¹
+100.0
+E.ON Asset Management GmbH & Co. EEA KG, DE, Grünwald 1,8
+100.0
+100.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+100.0
+Carnell Wind Farm, LLC, US, Wilmington²
+100.0
+Bursjöliden Vind AB, SE, Malmö²
+50.0
+Dutch Energy Projects C.V., NL, Amsterdam6
+33.3
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth6
+100.0
+Drivango GmbH, DE, Düsseldorf²
+100.0
+Brunnshög Energi AB, SE, Malmö²
+100.0
+DOTTO MORCONE S.r.l., IT, Milan²
+100.0
+Bruenning's Breeze Wind Farm, LLC, US, Wilmington¹
+26.3
+DOTI Management GmbH, DE, Oldenburg
+100.0
+Dutchdelta Finance S.à r.l., LU, Luxembourg¹
+100.0
+Bützower Wärme GmbH, DE, Bützow
+20.0
+100.0
+e.discom Telekommunikation GmbH, DE, Rostock²
+100.0
+Cardinal Wind Farm, LLC, US, Wilmington²
+100.0
+E.DIS Netz GmbH, DE, Fürstenwalde/Spree¹
+100.0
+Camellia Solar Member LLC, US, Wilmington²
+E.ON Biofor Sverige AB, SE, Malmö¹
+67.0
+100.0
+Camellia Solar LLC, US, Wilmington²
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+Cameleon B.V., NL, Rotterdam²
+100.0
+E WIE EINFACH GmbH, DE, Cologne¹
+E.DIS AG, DE, Fürstenwalde/Spree¹
+100.0
+100.0
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+100.0
+E.ON Carbon Sourcing North America LLC, US, Wilmington²
+E.ON CDNE S.p.A., IT, Milan²
+100.0
+E.ON Distribuce, a.s., CZ, České Budějovice¹
+100.0
+100.0
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+51.0
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+100.0
+E.ON Business Services Regensburg GmbH, DE, Regensburg¹
+E.ON Business Services Slovakia spol. s.r.o., SK, Bratislava²
+E.ON Business Services Sverige AB, SE, Malmö²
+100.0
+E.ON Danmark A/S, DK, Frederiksberg¹
+100.0
+E.ON Business Services Italia S.r.l., IT, Milan²
+100.0
+100.0
+81.1
+100.0
+100.0
+E.ON Climate & Renewables Italia S.r.l., IT, Milan¹
+100.0
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+E.ON Climate & Renewables GmbH, DE, Essen¹
+100.0
+E.ON Energetikai Tanácsadó Kft., HU, Budapest²
+100.0
+E.ON Climate & Renewables France, FR, Levallois-Perret²
+100.0
+E.ON Elnät Stockholm AB, SE, Malmö¹
+100.0
+100.0
+E.ON Elektrárne s.r.o., SK, Trakovice¹
+100.0
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+E.ON Climate & Renewables Canada Ltd., CA, Saint John¹
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+100.0
+E.ON Connecting Energies SAS, FR, Levallois-Perret²
+E.ON Czech Holding AG, DE, Munich 1,8
+100.0
+E.ON Business Services Berlin GmbH, DE, Berlin¹
+Name, location
+(as of December 31, 2017)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+211
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+CHN Special Projects Limited, GB, Coventry²
+100.0
+E.ON Business Services (UK) Limited, GB, Coventry¹
+Stake (%)
+Name, location
+Stake (%)
+100.0
+E.ON Business Services lași S.A., RO, lași²
+100.0
+E.ON Business Services Hungary Kft., HU, Budapest²
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+100.0
+E.ON Business Services GmbH, DE, Hanover¹
+100.0
+CHN Group Ltd, GB, Coventry²
+E.ON Connecting Energies Italia S.r.l., IT, Milan¹
+České Budějovice²
+100.0
+100.0
+100.0
+E.ON Climate & Renewables UK Wind Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Zone Six Limited, GB, Coventry¹
+E.ON Connecting Energies GmbH, DE, Essen¹
+E.ON Business Services Czech Republic s.r.o., CZ,
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca¹
+100.0
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+EC&R Canada Ltd., CA, Saint John¹
+100.0
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+100.0
+EC&R Development, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Energy Marketing, LLC, US, Wilmington¹
+100.0
+E.ON UK Pension Trustees Limited, GB, Coventry2
+100.0
+EC&R Ft. Huachuca Solar, LLC, US, Wilmington²
+100.0
+E.ON UK plc, GB, Coventry¹
+100.0
+EC&R Grandview Holdco, LLC, US, Wilmington²
+100.0
+100.0
+E.ON UK Property Services Limited, GB, Coventry2
+E.ON UK Heat Limited, GB, Coventry²
+EC&R Asset Management, LLC, US, Wilmington¹
+100.0
+E.ON UK CoGeneration Limited, GB, Coventry¹
+EBERnetz Verwaltungs GmbH, DE, Ebersberg²
+100.0
+100.0
+EBY Immobilien GmbH & Co KG, DE, Regensburg²
+100.0
+E.ON UK Directors Limited, GB, Coventry²
+100.0
+EBY Port 1 GmbH, DE, Munich 1,8
+100.0
+E.ON UK Energy Markets Limited, GB, Coventry¹
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+100.0
+E.ON UK Energy Services Limited, GB, Coventry²
+100.0
+100.0
+100.0
+EC&R Investco EPC Mgmt, LLC, US, Wilmington¹
+100.0
+EC&R Panther Creek Wind Farm III, LLC, US, Wilmington¹
+100.0
+E.ON Vânzări S.A., RO, Târgu Mureş²
+100.0
+EC&R QSE, LLC, US, Wilmington¹
+100.0
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+100.0
+E.ON Värme Sverige AB, SE, Malmö¹
+100.0
+EC&R Services, LLC, US, Wilmington¹
+100.0
+EC&R Sherman, LLC, US, Wilmington²
+100.0
+E.ON Värme Timrå AB, SE, Sundsvall¹
+100.0
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf1,8
+100.0
+EC&R O&M, LLC, US, Wilmington¹
+E.ON UK PS Limited, GB, Coventry²
+100.0
+E.ON UK Secretaries Limited, GB, Coventry2
+EC&R Investco Mgmt, LLC, US, Wilmington¹
+100.0
+100.0
+EC&R Investco Mgmt II, LLC, US, Wilmington¹
+100.0
+E.ON UK CHP Limited, GB, Coventry¹
+E.ON UK Trustees Limited, GB, Coventry²
+EC&R Magicat Holdco, LLC, US, Wilmington¹
+100.0
+E.ON US Corporation, US, Wilmington¹
+100.0
+EC&R NA Solar PV, LLC, US, Wilmington¹
+100.0
+E.ON US Energy LLC, US, Wilmington¹
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON Servicii Clienți S.R.L., RO, Târgu Mureş¹
+100.0
+Részvénytársaság, HU, Budapest¹
+100.0
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Servicii Tehnice S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Servisní, s.r.o., CZ, České Budějovice¹
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+100.0
+E.ON Slovensko, a.s., SK, Bratislava¹
+E.ON Hungária Energetikai Zártkörűen Működő
+100.0
+100.0
+100.0
+E.ON Rhein-Ruhr Ausbildungs-GmbH, DE, Essen²
+100.0
+E.ON Gaz Furnizare S.A., RO, Târgu Mureş¹
+68.2
+E.ON România S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+100.0
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE, Düsseldorf¹
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen 1,8
+E.ON Human Resources International GmbH, DE, Hanover 1,8
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Service GmbH, DE, Essen²
+E.ON Innovation Hub S.A., RO, Târgu Mureş²
+100.0
+E.ON Smart Living AB, SE, Malmö¹
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+213
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+E.ON Telco, s.r.o., CZ, České Budějovice²
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+100.0
+100.0
+East Midlands Electricity Distribution Holdings, GB, Coventry2
+East Midlands Electricity Share Scheme Trustees Limited, GB,
+Coventry²
+100.0
+100.0
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+100.0
+E.ON Insurance Services GmbH, DE, Essen²
+100.0
+E.ON Software Development SRL, RO, Târgu Mureş²
+100.0
+E.ON INTERNATIONAL FINANCE B.V., NL, Amsterdam¹
+100.0
+E.ON Solar GmbH, DE, Essen²
+EBERnetz GmbH & Co. KG, DE, Ebersberg²
+100.0
+100.0
+E.ON Solutions GmbH, DE, Essen²
+100.0
+E.ON IT UK Limited, GB, Coventry²
+100.0
+E.ON Sverige AB, SE, Malmö¹
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+E.ON Invest GmbH, DE, Grünwald²
+EC&R Solar Development, LLC, US, Wilmington¹
+100.0
+Economy Power Limited, GB, Coventry¹
+100.0
+50.0
+Forest Creek WF Holdco, LLC, US, Wilmington¹
+100.0
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE,
+Putzbrunn6
+50.0
+Forest Creek Wind Farm, LLC, US, Wilmington¹
+100.0
+Energieversorgung Sehnde GmbH, DE, Sehnde
+30.0
+Fortuna Solar, LLC, US, Wilmington²
+100.0
+Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde
+49.0
+GASAG AG, DE, Berlin
+36.9
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching6
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+Forest Creek Investco, Inc., US, Wilmington¹
+50.0
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+Florida Solar and Power Group LLC, US, Wilmington²
+Energienetze Bayern GmbH, DE, Regensburg¹
+100.0
+Fitas Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+90.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+100.0
+Energie-Pensions-Management GmbH, DE, Hanover²
+70.0
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+90.0
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau6
+69.5
+Flatlands Wind Farm, LLC, US, Wilmington²
+100.0
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+beschränkter Haftung, DE, Halblech6
+50.0
+100.0
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen
+49.0
+50.0
+49.0
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel
+50.0
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf 1,8
+100.0
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+100.0
+55.0
+20.4
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing6
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing
+49.0
+49.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+50.0
+100.0
+50.0
+100.0
+Ergon Overseas Holdings Limited, GB, Coventry¹
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+etatherm GmbH, DE, Potsdam6
+Ergon Energia S.r.l. in liquidazione, IT, Brescia6
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach
+50.0
+49.0
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+50.0
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+49.0
+Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn¹
+100.0
+95.0
+100.0
+Gasversorgung Unterfranken Gesellschaft mit beschränkter
+Enerjisa Enerji A.Ş., TR, Istanbul4
+Haftung, DE, Würzburg5
+49.0
+50.0
+Enerjisa Üretim Santralleri A.Ş., TR, Istanbul4
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+Energy Collection Services Limited, GB, Coventry²
+Fifth Standard Solar PV, LLC, US, Wilmington²
+49.0
+100.0
+E.ON Wind Sweden AB, SE, Malmö¹
+E.ON Zweiundzwanzigste Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+100.0
+EFR Europäische Funk-Rundsteuerung GmbH, DE, Munich
+El Algodon Alto Wind Farm, LLC, US, Wilmington²
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
+39.9
+100.0
+Grünwald6
+49.0
+100.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf2
+Elevate Wind Holdco, LLC, US, Wilmington4
+100.0
+50.0
+100.0
+Elmregia GmbH, DE, Schöningen
+49.0
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . *This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+E.ON Wind Services A/S, DK, Rødby¹
+E.ON WIND SERVICE ITALIA S.r.l., IT, Milan²
+E.ON Wind Service GmbH, DE, Neubukow²
+100.0
+100.0
+E.ON Verwaltungs SE, DE, Düsseldorf²
+100.0
+EDT Energie Werder GmbH, DE, Werder (Havel)²
+100.0
+E.ON Wind Denmark AB, SE, Malmö²
+100.0
+EEP 2. Beteiligungsgesellschaft mbH, DE, Munich²
+Notes
+100.0
+100.0
+E.ON Wind Kårehamn AB, SE, Malmö¹
+100.0
+EFG Erdgas Forchheim GmbH, DE, Forchheim6
+24.9
+E.ON Wind Norway AB, SE, Malmö²
+100.0
+E.ON Wind Nysater AB, SE, Malmö²
+E.ON Wind Denmark 2 AB, SE, Malmö²
+Bruenning's Breeze Holdco, LLC, US, Wilmington²
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+214
+65.0
+Energie Vorpommern GmbH, DE, Trassenheide6
+49.0
+Farma Wiatrowa Barzowice Sp. z o.o., PL, Warsaw¹
+100.0
+Energie-Agentur Weyhe GmbH, DE, Weyhe
+50.0
+Energieerzeugungswerke Geesthacht GmbH, DE, Geesthacht
+33.4
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+Haftung (FFG), DE, Freising6
+50.0
+energielösung GmbH, DE, Regensburg²
+FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg6
+49.0
+100.0
+Energienetz Neufahrn/Eching GmbH & Co. KG, DE, Neufahrn
+bei Freising6
+FIDELIA Holding LLC, US, Wilmington¹
+Falkenbergs Biogas AB, SE, Malmö²
+50.1
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG
+(ews), DE, Bad Segeberg6
+28.8
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+EMSZET Első Magyar Szélerőmű Korlátolt Felelősségű
+Társaság, HU, Kulcs²
+74.7
+EVG Energieversorgung Gemünden GmbH, DE,
+Gemünden am Main6
+49.0
+(as of December 31, 2017)
+ENACO Energieanlagen- und Kommunikationstechnik GmbH,
+DE, Maisach6
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+46.7
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg6
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main6
+50.2
+28.9
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+35.0
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
+Wörth am Main6
+26.0
+100.0
+E.ON Gasol Sverige AB, SE, Malmö¹
+100.0
+50.0
+100.0
+50.0
+Pyron Wind Farm, LLC, US, Wilmington¹
+Radford's Run Holdco, LLC, US, Wilmington¹
+Radford's Run Wind Farm, LLC, US, Wilmington¹
+100.0
+100.0
+100.0
+Owen Prairie Wind Farm, LLC, US, Wilmington²
+100.0
+Rampion Offshore Wind Limited, GB, Coventry¹
+50.1
+OWN1 First Offshore Wind Netherlands B.V., NL, Amsterdam²
+OWN2 Second Offshore Wind Netherlands B.V., NL, Amsterdam²
+100.0
+100.0
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding2
+77.4
+OWN3 Third Offshore Wind Netherlands B.V., NL, Amsterdam²
+PannonWatt Energetikai Megoldások Zrt., HU, Győr6
+100.0
+Raymond Wind Farm, LLC, US, Wilmington²
+Oskarshamn Energi AB, SE, Oskarshamn4
+100.0
+000 E.ON IT, RU, Moscow²
+94.1
+Powergen UK Investments, GB, Coventry2
+100.0
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+49.0
+Powergen Weather Limited, GB, Coventry²
+100.0
+Offshore Trassenplanungs GmbH i.L., DE, Hanover²
+50.0
+PreussenElektra GmbH, DE, Hanover¹
+100.0
+Offshore-Windpark Delta Nordsee GmbH, DE, Hamburg²
+100.0
+Purena Consult GmbH, DE, Wolfenbüttel²
+100.0
+OMNI Energy Kft., HU, Kiskunhalas6
+50.0
+Purena GmbH, DE, Wolfenbüttel¹
+000 E.ON Connecting Energies, RU, Moscow
+49.9
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Würzburg²
+100.0
+Peiẞenberger Wärmegesellschaft mbH, DE, Peißenberg6
+50.0
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG,
+DE, Regensburg
+35.5
+regiolicht GmbH, DE, Helmstedt²
+89.8
+Perstorps Fjärrvärme AB, SE, Perstorp
+50.0
+RegioNetzMünchen GmbH & Co. KG, DE, Garching²
+100.0
+Peyton Creek Wind Farm, LLC, US, Wilmington²
+100.0
+Pinckard Solar LLC, US, Wilmington²
+100.0
+Pinckard Solar Member LLC, US, Wilmington²
+RegioNetz München Verwaltungs GmbH, DE, Garching²
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+100.0
+100.0
+50.0
+REGAS Verwaltungs-GmbH, DE, Regensburg
+Peiẞenberger Kraftwerksgesellschaft mit beschränkter
+Haftung, DE, Peiẞenberg²
+Panther Creek Solar, LLC, US, Wilmington²
+100.0
+RDE Verwaltungs-GmbH, DE, Würzburg²
+100.0
+Panther Creek Wind Farm I&II, LLC, US, Wilmington¹
+100.0
+Redsted Varmetransmission ApS, DK, Frederiksberg²
+100.0
+100.0
+Paradise Cut Battery, LLC, US, Wilmington²
+Refarmed ApS, DK, Copenhagen
+20.0
+Pawnee Spirit Wind Farm, LLC, US, Wilmington²
+100.0
+REGAS GmbH & Co KG, DE, Regensburg6
+50.0
+PEG Infrastruktur AG, CH, Zug¹
+100.0
+100.0
+33.3
+100.0
+100.0
+LSW Holding GmbH & Co. KG, DE, Wolfsburg5
+57.0
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg6
+49.0
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg6
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg6
+57.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+40.0
+57.0
+Netzgesellschaft Stuhr/Weyhe mbH i.L., DE, Helmstedt²
+100.0
+Luna Lüneburg GmbH, DE, Lüneburg6
+Magicat Holdco, LLC, US, Wilmington5
+Major Wind Farm, LLC, US, Wilmington²
+49.0
+Netzgesellschaft Syke GmbH, DE, Syke
+49.0
+20.0
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+49.0
+50.1
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
+Hohen Neuendorf6
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg6
+49.0
+Lighting for Staffordshire Limited, GB, Coventry¹
+100.0
+Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf6
+50.0
+Lillo Energy NV, BE, Brussels6
+50.0
+Limfjordens Bioenergi ApS, DK, Frederiksberg²
+78.0
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE,
+Giesen6
+49.0
+Local Energies, a.s., CZ, Zlín-Malenovice²
+100.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE,
+Giesen6
+49.0
+London Array Limited, GB, Coventry
+30.0
+57.0
+100.0
+New Cogen Sp. z o.o., PL, Warsaw²
+100.0
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+217
+(as of December 31, 2017)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Novo Innovations Limited, GB, Coventry²
+100.0
+Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee²
+Oberland Stromnetz Verwaltungs GmbH, DE,
+Murnau a. Staffelsee²
+100.0
+Powergen Power No. 1 Limited, GB, Coventry²
+Powergen Power No. 2 Limited, GB, Coventry²
+100.0
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Maricopa East Solar PV, LLC, US, Wilmington²
+100.0
+Nord Stream AG, CH, Zug5
+15.5
+Maricopa East Solar PV 2, LLC, US, Wilmington²
+Maricopa Land Holding, LLC, US, Wilmington²
+Maricopa West Solar PV 2, LLC, US, Wilmington²
+Matrix Control Solutions Limited, GB, Coventry¹
+MEON Pensions GmbH & Co. KG, DE, Grünwald 1,8
+100.0
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+Powergen Serang Limited, GB, Coventry²
+100.0
+100.0
+100.0
+Northern Orchard Solar PV, LLC, US, Wilmington²
+100.0
+100.0
+Northern Orchard Solar PV 2, LLC, US, Wilmington²
+100.0
+100.0
+NordNetz GmbH, DE, Quickborn²
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+100.0
+50.0
+Stadtwerke Bredstedt GmbH, DE, Bredstedt
+89.9
+SEC Myślibórz Sp. z o.o., PL, Myślibórz²
+41.0
+Stadtwerke Bogen GmbH, DE, Bogen
+100.0
+30.0
+Stadtwerke Blankenburg GmbH, DE, Blankenburg
+100.0
+SEC Łobez Sp. z o.o., PL, Łobez²
+SEC HR Sp. z o.o., PL, Szczecin²
+49.0
+24.9
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth5
+Stadtwerke Bergen GmbH, DE, Bergen
+100.0
+SEC H Sp. z o.o., PL, Szczecin²
+100.0
+49.9
+SEC G Sp. z o.o., PL, Szczecin²
+SEC Połczyn-Zdrój Sp. z o.o., PL, Połczyn-Zdrój²
+Stadtwerke Burgdorf GmbH, DE, Burgdorf6
+100.0
+Service Plus Recycling GmbH, DE, Neumünster²
+39.0
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+100.0
+SERVICE plus GmbH, DE, Neumünster²
+49.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden6
+100.0
+SEC Strzelce Krajeńskie Sp. z o.o., PL, Strzelce Krajeńskie²
+100.0
+SEC Słubice Sp. z o.o., PL, Słubice²
+25.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+Ebermannstadt6
+100.0
+SEC Serwis Sp. z o.o., PL, Szczecin²
+49.0
+100.0
+49.0
+Stadtwerke Barth GmbH, DE, Barth6
+100.0
+SEC Barlinek Sp. z o.o., PL, Barlinek²
+100.0
+26.7
+Magdeburg6
+SEC B Sp. z o.o., PL, Szczecin²
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+100.0
+SEC A Sp. z o.o., PL, Szczecin²
+26.7
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg5
+100.0
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+29.0
+Luckenwalde6
+81.6
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+Städtische Betriebswerke Luckenwalde GmbH, DE,
+100.0
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+Neustadt a. Rbge.6
+24.9
+SEC C Sp. z o.o., PL, Szczecin²
+SEC F Sp. z o.o., PL, Szczecin²
+36.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt6
+100.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+49.0
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen
+100.0
+Stadtwerke Garbsen GmbH, DE, Garbsen
+SEC E Sp. z o.o., PL, Szczecin²
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+100.0
+SEC Dębno Sp. z o.o., PL, Debno²
+24.9
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Neustadt a. Rbge.6
+100.0
+SEC D Sp. z o.o., PL, Szczecin²
+100.0
+49.0
+Renewables Power Netherlands B.V., NL, Amsterdam6
+24.9
+24.9
+Roadrunner, LLC, US, Wilmington²
+Powergen Luxembourg Holdings S.à r.l., LU, Luxembourg¹
+100.0
+Rødsand 2 Offshore Wind Farm AB, SE, Malmö5
+20.0
+100.0
+20.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+218
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Roscoe WF Holdco, LLC, US, Wilmington¹
+100.0
+100.0
+Powergen Limited, GB, Coventry¹
+100.0
+Pioneer Trail Wind Farm, LLC, US, Wilmington¹
+100.0
+REWAG REGENSBURGER ENERGIE- UND
+Pipkin Ranch Wind Farm, LLC, US, Wilmington²
+100.0
+WASSERVERSORGUNG AG & CO KG, DE, Regensburg5
+35.5
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+100.0
+Powergen Holdings B.V., NL, Rotterdam¹
+100.0
+R-KOM Regensburger Telekommunikationsgesellschaft mbH &
+Co. KG, DE, Regensburg
+20.0
+Powergen Holdings S.à r.l., LU, Luxembourg²
+100.0
+R-KOM Regensburger Telekommunikationsverwaltungs-
+Powergen International Limited, GB, Coventry¹
+gesellschaft mbH, DE, Regensburg
+Roscoe Wind Farm, LLC, US, Wilmington¹
+Rose Rock Wind Farm, LLC, US, Wilmington²
+100.0
+100.0
+Sand Bluff Wind Farm, LLC, US, Wilmington¹
+100.0
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+35.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+29.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+100.0
+Sjöbygden Skog AB, SE, Malmö²
+25.0
+Stadtwerke Lübz GmbH, DE, Lübz6
+100.0
+Settlers Trail Wind Farm, LLC, US, Wilmington¹
+49.9
+Stadtwerke Husum GmbH, DE, Husum6
+96.0
+Servicii Energetice pentru Acasa - SEA Complet S.A., RO,
+Târgu Mureş²
+100.0
+Sparta South, LLC, US, Wilmington²
+100.0
+Sand Bluff WF Holdco, LLC, US, Wilmington¹
+Skive GreenLab Biogas ApS, DK, Frederiksberg²
+ŠKO ENERGO, s.r.o., CZ, Mladá Boleslav6
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav
+100.0
+21.0
+42.5
+Rosengård Invest AB, SE, Malmö
+25.0
+S.C. Salgaz S.A., RO, Salonta²
+58.3
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+Snow Shoe Wind Farm, LLC, US, Wilmington²
+Söderåsens Bioenergi AB, SE, Malmö²
+63.3
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+Sønderjysk Biogas Bevtoft A/S, DK, Vojens
+50.0
+Heidelberg²
+100.0
+Sparta North, LLC, US, Wilmington²
+100.0
+100.0
+60.0
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+49.0
+20.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+100.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+25.0
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+100.0
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+49.0
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog6
+100.0
+Bayernwerk Energietechnik GmbH, DE, Regensburg²
+49.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel6
+100.0
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+49.0
+Bayernwerk Netz GmbH, DE, Regensburg¹
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede6
+100.0
+Bayernwerk Portfolio GmbH & Co. KG, DE, Regensburg²
+Eddelak GmbH, DE, St. Michaelisdonn6
+100.0
+Beteiligung N1 GmbH, DE, Helmstedt²
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+100.0
+Beteiligung H2 GmbH, DE, Helmstedt²
+49.0
+Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+100.0
+Beteiligung H1 GmbH, DE, Helmstedt²
+49.0
+Abwasserentsorgung Schladen GmbH, DE, Schladen
+100.0
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+49.0
+Diekhusen-Fahrstedt6
+100.0
+Abwasserentsorgung Marne-Land GmbH, DE,
+27.0
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide
+100.0
+100.0
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+49.0
+61.5
+0.0
+AV Packaging GmbH, DE, Munich¹
+Avacon AG, DE, Helmstedt¹
+49.0
+Abfallwirtschaft Schleswig-Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst
+Abfallwirtschaftsgesellschaft Rendsburg-Eckernförde mbH,
+49.0
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide
+100.0
+ANCO Sp. z o.o., PL, Jarocin²
+50.0
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg
+100.0
+100.0
+100.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+100.0
+DE, Borgstedt
+49.0
+Bayernwerk AG, DE, Regensburg¹
+49.0
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr6
+100.0
+BAG Port 1 GmbH, DE, Regensburg²
+49.0
+50.0
+AWE-Arkona-Windpark Entwicklungs-GmbH, DE, Hamburg4
+25.1
+49.0
+Avon Energy Partners Holdings, GB, Coventry2
+33.3
+100.0
+Avacon Netz GmbH, DE, Helmstedt¹
+39.0
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg6
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+100.0
+Avacon Natur GmbH, DE, Sarstedt¹
+100.0
+Amrum-Offshore West GmbH, DE, Düsseldorf¹
+Anacacho Holdco, LLC, US, Wilmington²
+Anacacho Wind Farm, LLC, US, Wilmington¹
+Beteiligung N2 GmbH, DE, Helmstedt²
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+100.0
+Blackbriar Battery, LLC, US, Wilmington²
+49.0
+Cremlinger Energie GmbH, DE, Cremlingen
+100.0
+Blackbeard Solar, LLC, US, Wilmington²
+100.0
+Cordova Wind Farm, LLC, US, Wilmington²
+40.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+33.3
+100.0
+100.0
+100.0
+Citigen (London) Limited, GB, Coventry¹
+Colbeck's Corner, LLC, US, Wilmington¹
+Colbeck's Corner Holdco, LLC, US, Wilmington²
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+100.0
+Biomasseverwertung Straubing GmbH, DE, Straubing²
+Cuculus GmbH, DE, Ilmenau6
+100.0
+20.4
+100.0
+100.0
+Boiling Springs Wind Farm, LLC, US, Wilmington²
+Broken Spoke Solar, LLC, US, Wilmington²
+42.5
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben
+Deutsche Gesellschaft für Wiederaufarbeitung von
+98.0
+BO Baltic Offshore GmbH, DE, Hamburg²
+56.5
+Delgaz Grid S.A., RO, Târgu Mureş¹
+25.6
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+100.0
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+100.0
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+50.0
+Dampfversorgung Ostsee-Molkerei GmbH, DE, Wismar
+Blackjack Creek Wind Farm, LLC, US, Wilmington²
+Biogas Steyerberg GmbH, DE, Steyerberg²
+80.0
+Biogas Ducherow GmbH, DE, Ducherow²
+49.0
+Abwassergesellschaft Gehrden mbH, DE, Gehrden6
+25.1
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels
+49.0
+Bardowick6
+100.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+46.3
+an der Kerntechnische Hilfsdienst GmbH GbR, DE,
+Eggenstein-Leopoldshofen
+49.0
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick
+49.0
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen6
+Beteiligungsgesellschaft der Energieversorgungsunternehmen
+25.0
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+40.7
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg6
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+49.0
+100.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+210
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+100.0
+Notes
+90.0
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+30.0
+51.0
+Bioenergie Merzig GmbH, DE, Merzig²
+25.0
+46.5
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz6
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+50.0
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg
+100.0
+Stake (%)
+Name, location
+Stake (%)
+KommEnergie GmbH, DE, Eichenau6
+61.0
+MEON Verwaltungs GmbH, DE, Grünwald²
+100.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt6
+49.0
+MFG Flughafen-Grundstücksverwaltungsgesellschaft mbH &
+Co. Gamma oHG i.L., DE, Grünwald²
+90.0
+Kommunale Klimaschutzgesellschaft Landkreis Celle
+Midlands Electricity Limited, GB, Coventry²
+100.0
+gemeinnützige GmbH, DE, Celle
+25.0
+MINUS 181 GmbH, DE, Parchim6
+Name, location
+25.1
+216
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+46.6
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+Kinneil CHP Limited, GB, Coventry²
+100.0
+100.0
+HanseGas GmbH, DE, Quickborn¹
+100.0
+Kite Power Systems Limited, GB, Chelmsford6
+20.0
+HanseWerk AG, DE, Quickborn¹
+HanseWerk Natur GmbH, DE, Hamburg¹
+66.5
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Budapest²
+100.0
+KommEnergie Erzeugungs GmbH, DE, Eichenau6
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+(as of December 31, 2017)
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+Mosoni-Duna Menti Szélerőmű Kft., HU, Győr²
+100.0
+41.7
+Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin²
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven
+100.0
+34.8
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG,
+DE, Grünwald¹
+90.0
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad
+Münder6
+49.0
+Lake Fork Wind Farm, LLC, US, Wilmington²
+100.0
+LandE GmbH, DE, Wolfsburg¹
+69.6
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+49.0
+Landwehr Wassertechnik GmbH, DE, Schöppenstedt²
+100.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden6
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen
+100.0
+Kraftzwerg GmbH, DE, Essen²
+100.0
+gemeinnützige GmbH, DE, Celle6
+25.0
+Munnsville Investco, LLC, US, Wilmington¹
+100.0
+Kraftwerk Burghausen GmbH, DE, Munich¹
+100.0
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+Hams Hall Management Company Limited, GB, Coventry
+Munnsville WF Holdco, LLC, US, Wilmington¹
+Munnsville Wind Farm, LLC, US, Wilmington¹
+100.0
+Kraftwerk Marl GmbH, DE, Munich¹
+100.0
+Nahwärme Ascha GmbH, DE, Ascha²
+90.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+100.0
+Naranjo Battery, LLC, US, Wilmington²
+100.0
+74.9
+Hamburg Netz GmbH, DE, Hamburg¹
+100.0
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG., DE,
+Inadale Wind Farm, LLC, US, Wilmington¹
+100.0
+Emmerthal¹
+66.7
+Induboden GmbH, DE, Düsseldorf²
+100.0
+Geotermisk Operaterselskab ApS, DK, Kirke Saby6
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
+Braunau am Inn6
+20.0
+20.0
+Induboden GmbH & Co. Grundstücksgesellschaft OHG, DE, Essen²
+Industriekraftwerk Greifswald GmbH, DE, Kassel
+100.0
+49.0
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein
+GmbH, DE, Kiel
+Industry Development Services Limited, GB, Coventry²
+100.0
+33.3
+100.0
+Improbed AB, SE, Malmö²
+75.0
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+:agile accelerator limited, GB, Coventry²
+100.0
+:agile accelerator GmbH, DE, Düsseldorf²
+Stake (%)
+Name, location
+Stake (%)
+209
+Name, location
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen6
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen
+GOLLIPP Bioerdgas GmbH & Co KG, DE, Gollhofen
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+Grandview Wind Farm, LLC, US, Wilmington4
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Notes
+100.0
+(36) List of Shareholdings Pursuant to Section 313 (2) HGB
+DOTI Deutsche Offshore-Testfeld- und Infrastruktur-GmbH &
+Co. KG, DE, Oldenburg5
+41.7
+InfraServ-Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz6
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+Nienburg/Weser
+Grandview Wind Farm V, LLC, US, Wilmington²
+100.0
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+33.3
+Green Sky Energy Limited, GB, Coventry¹
+100.0
+Kernkraftwerk Gundremmingen GmbH, DE, Gundremmingen5
+25.0
+greenited GmbH, DE, Hamburg
+greenXmoney.com GmbH, DE, Neu-Ulm
+50.0
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+50.0
+29.4
+GrönGas Partner A/S, DK, Hirtshals6
+50.0
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+66.7
+80.0
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+100.0
+Grandview Wind Farm IV, LLC, US, Wilmington²
+50.0
+49.9
+48.0
+50.0
+50.0
+Intelligent Maintenance Systems Limited, GB, Milton Keynes
+Iron Horse Battery Storage, LLC, US, Wilmington²
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+25.0
+100.0
+75.0
+100.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+40.0
+50.0
+Grandview Wind Farm III, LLC, US, Wilmington²
+100.0
+Kalmar Energi Holding AB, SE, Kalmar
+Kasson Manteca Solar, LLC, US, Wilmington²
+50.0
+100.0
+100.0
+Born in 1967 in Ludwigshafen, Germany
+Name, location
+Member of the Management Board since January 1, 2017
+Finance, Mergers and Acquisitions, Risk Management,
+Accounting and Controlling, Investor Relations, Tax, Uniper
+→ Uniper SE
+Tishman Speyer Real Estate Venture VI Parallel (ON), L.P., US,
+New York City²
+99.0
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+TPG Wind Limited, GB, Coventry
+50.0
+49.0
+Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling
+33.3
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE,
+Wunstorf6
+49.0
+Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling
+Turkey Run, LLC, US, Wilmington²
+49.0
+33.3
+Stromversorgung Angermünde GmbH, DE, Angermünde
+49.0
+Überlandwerk Leinetal GmbH, DE, Gronau
+48.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+220
+Name, location
+Stake (%)
+Name, location
+100.0
+Stromnetzgesellschaft Bad Salzdetfurth-Diekholzen mbH &
+Co. KG, DE, Bad Salzdetfurth6
+100.0
+Tipton Wind, LLC, US, Wilmington²
+66.5
+Strombewegung GmbH, DE, Düsseldorf²
+100.0
+Szombathelyi Erőmű Zrt., HU, Győr²
+55.0
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach
+49.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely6
+25.0
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach
+49.0
+Tech Park Solar, LLC, US, Wilmington¹
+100.0
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf.6
+49.0
+The Power Generation Company Limited, GB, Coventry²
+100.0
+Stromnetz Würmtal GmbH & Co. KG, DE, Gauting²
+74.5
+Three Rocks Solar, LLC, US, Wilmington²
+100.0
+Tierra Blanca Wind Farm, LLC, US, Wilmington²
+100.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Munich²
+100.0
+Stromnetze Peiner Land GmbH, DE, Ilsede6
+49.0
+Stake (%)
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen
+22.2
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr
+GmbH, DE, Grafenwöhr6
+Wildcat Wind Farm II, LLC, US, Wilmington²
+100.0
+Wildcat Wind Farm III, LLC, US, Wilmington²
+Member of the Management Board since 2013
+100.0
+49.0
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+49.0
+Windenergie Leinetal 2 Verwaltungs GmbH, DE, Freden (Leine)²
+Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine)6
+100.0
+26.2
+Versorgungskasse Energie (VVaG) i.L., DE, Hanover¹
+71.6
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein6
+20.0
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Budapest²
+100.0
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine)6
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg
+(Altmark)²
+24.9
+100.0
+Vici Wind Farm, LLC, US, Wilmington²
+100.0
+Vici Wind Farm II, LLC, US, Wilmington²
+100.0
+Windenergie Osterburg Verwaltungs GmbH, DE, Osterburg
+(Altmark)²
+100.0
+Vici Wind Farm III, LLC, US, Wilmington²
+100.0
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+Venado Wind Farm, LLC, US, Wilmington²
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Waldbüttelbrunn6
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+49.0
+Union Grid s.r.o., CZ, Prague
+34.0
+Uniper SE, DE, Düsseldorf5
+46.7
+WEA Schönerlinde GbR mbH Kiepsch & Bosse & Beteiligungs-
+ges. e.disnatur mbH, DE, Berlin²
+70.0
+Uranit GmbH, DE, Jülich4
+50.0
+Utility Debt Services Limited, GB, Coventry²
+100.0
+Weiẞmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+93.5
+Valencia Solar, LLC, US, Tucson¹
+100.0
+werkkraft GmbH, DE, Unterschleißheim
+50.0
+Valverde Wind Farm, LLC, US, Wilmington²
+100.0
+West of the Pecos Solar, LLC, US, Wilmington²
+100.0
+VEBA Electronics LLC, US, Wilmington¹
+100.0
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+50.2
+VEBACOM Holdings LLC, US, Wilmington²
+100.0
+50.2
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+90.0
+49.0
+Dr. Karsten Wildberger
+Born in 1969 in Gießen, Germany
+Member of the Management Board since 2016
+Regional Sales and Customer Solutions, Distributed Generation,
+Energy Management, Marketing, Digital Transformation,
+Innovation, IT
+→ E.ON Business Services GmbH¹
+(Chairman since January 6, 2017)
+→ E.ON Sverige AB²
+→ E.ON Energie A.S.2 (Chairman, since June 1, 2017)
+Unless otherwise indicated, information is as of December 31, 2017, or as of the date on which membership in the E.ON Management Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→
+→
+¹Exempted E.ON Group directorship within the meaning of Section 100, Paragraph 2, Sentence 2 of the German Stock Corporation Act. 2Other E.ON Group directorship.
+Summary of
+→ Nord Stream AG (since June 1, 2017)
+Financial Highlights
+and Explanations
+228
+Explanatory Report of the Management Board
+on the Disclosures Pursuant to Section 289a,
+Paragraph 1, and Section 315a, Paragraph 1,
+as well as Section 289, Paragraph 4, of the
+German Commercial Code
+The Management Board has read and discussed the disclosures
+pursuant to Section 289a, Paragraph 1 and Section 315a, Para-
+graph 1 of the German Commercial Code contained in the Com-
+bined Group Management Report for the year ended December
+31, 2017, and issues the following declaration regarding these
+disclosures:
+The disclosures on takeover barriers contained in the Compa-
+ny's Combined Group Management Report are correct and con-
+form with the Management Board's knowledge. The Manage-
+ment Board therefore confines itself to the following
+statements:
+Internal controls are an integral part of our accounting pro-
+cesses. Guidelines define uniform financial-reporting documen-
+tation requirements and procedures for the entire E.ON Group.
+We believe that compliance with these rules provides sufficient
+certainty to prevent error or fraud from resulting in material
+misrepresentations in the Consolidated Financial Statements,
+the Combined Group Management Report, and the Interim
+Reports.
+Essen, March 12, 2018
+E.ON SE
+Management Board
+Beyond the disclosures contained in the Combined Group Man-
+agement Report (and legal restrictions such as the exclusion of
+voting rights pursuant to Section 136 of the German Stock Cor-
+poration Act), the Management Board is not aware of any
+restrictions regarding voting rights or the transfer of shares.
+The Company is not aware of shareholdings in the Company's
+share capital exceeding ten out of one hundred voting rights, so
+that information on such shareholdings is not necessary. There
+is no need to describe shares with special control rights (since
+no such shares have been issued) or special restrictions on the
+control rights of employees' shareholdings (since employees
+who hold shares in the Company's share capital exercise their
+control rights directly, just like other shareholders).
+To the extent that the Company has agreed to settlement pay-
+ments for Management Board members in the case of a change
+of control, the purpose of such agreements is to preserve the
+independence of Management Board members.
+The Management Board also read and discussed the disclo-
+sures in the Combined Group Management Report pursuant to
+Section 289, Paragraph 4, of the German Commercial Code.
+The disclosures contained in the Combined Group Management
+Report on the key features of our internal control and risk man-
+agement system for accounting processes are complete and
+comprehensive.
+Summary of Financial Highlights and Explanations
+49.0
+Born in 1975 in Essen, Germany
+Dr. Marc Spieker
+Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg²
+Stromversorgung Penzberg Verwaltungs GmbH, DE, Penzberg²
+Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
+Pfaffenhofen6
+100.0
+Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching²
+49.9
+Stadtwerke Niebüll GmbH, DE, Niebüll6
+24.9
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald
+Stake (%)
+→ E.ON Czech Holding AG¹ (Chairman)
+Stake (%)
+Name, location
+(as of December 31, 2017)
+219
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+→ Georgsmarienhütte Holding GmbH
+→ E.ON Sverige AB² (Chairman)
+→ E.ON Hungária Zrt.2 (Chairman)
+Michael Sen (until March 31, 2017)
+Born in 1968 in Korschenbroich, Germany
+Member of the Management Board since 2015
+Finance, Mergers and Acquisitions, Risk Management,
+Accounting and Controlling, Investor Relations, Tax, Uniper
+Teyssen
+Birnbaum
+Spieker
+Wildberger
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel
+22.7
+26.0
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel6
+SüdWasser GmbH, DE, Erlangen²
+36.8
+100.0
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+49.4
+SVH Stromversorgung Haar GmbH, DE, Haar
+50.0
+Stella Holdco, LLC, US, Wilmington²
+100.0
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning6
+25.1
+Stella Wind Farm, LLC, US, Wilmington¹
+100.0
+SVO Holding GmbH, DE, Celle¹
+50.1
+Stella Wind Farm II, LLC, US, Wilmington²
+100.0
+SVO Vertrieb GmbH, DE, Celle¹
+100.0
+Stockton Solar I, LLC, US, Wilmington²
+Stockton Solar II, LLC, US, Wilmington²
+100.0
+100.0
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg6
+SWS Energie GmbH, DE, Stralsund 5
+25.1
+36.8
+Strom Germering GmbH, DE, Germering²
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG,
+DE, Brandenburg an der Havel
+Stadtwerke Wismar GmbH, DE, Wismar
+Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE,
+Olching²
+100.0
+Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH,
+DE, Pfaffenhofen6
+49.0
+Stadtwerke Parchim GmbH, DE, Parchim
+25.2
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter
+Haftung, DE, Ruhpolding²
+100.0
+Stadtwerke Premnitz GmbH, DE, Premnitz
+35.0
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk6
+49.0
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim6
+49.0
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten
+39.0
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+37.8
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Unterschleißheim
+49.0
+Stadtwerke Tornesch GmbH, DE, Tornesch
+49.0
+strotög GmbH Strom für Töging, DE, Töging am Inn
+50.0
+Stadtwerke Vilshofen GmbH, DE, Vilshofen6
+Regional Energy Networks, Renewables, Regulation Policy,
+Health/Safety and Environment, Sustainability, Procurement
+and Real Estate Management, Consulting, Preussen Elektra
+41.0
+49.0
+100.0
+100.0
+80.0
+Chairman of the Supervisory Board of
+HSBC Trinkaus & Burkhardt AG
+→ Börse Düsseldorf AG (Chairman until April 25, 2017)
+→ HSBC Trinkaus & Burkhardt AG (Chairman)
+→ Scheidt & Bachmann GmbH (Chairman)
+→ KfW
+→
+Unless otherwise indicated, information is as of December 31, 2017, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Andreas Schmitz
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Fred Schulz
+Chairman of the SE Works Council of E.ON SE
+Deputy Chairman of the E.ON Group Works Council
+Chairman of the General Works Council of E.DIS AG
+Chairman of the Works Council of E.DIS Netz GmbH-Region East
+→ E.DIS AG
+→ Szczecińska Energetyka Cieplna Sp. z o.o.
+Silvia Šmátralová
+Chairperson of the Works Council of Západoslovenská
+energetika a.s. (ZSE)
+Member of the SE Works Council of E.ON SE
+→ Západoslovenská distribučná a.s.
+→ Západoslovenská energetika a.s.
+Dr. Karen de Segundo
+Attorney
+223
+Chairman of Romanian Federation of Gas Unions at Gaz România
+Chairman of Romanian employee representatives
+Eugen-Gheorghe Luha
+→ Telecom Italia S.p.A. (until May 10, 2017)
+Erich Clementi
+Senior Vice President, Global Integrated Accounts and
+Chairman, IBM Europe
+Tibor Gila
+Chairman of the Combined Works Council of E.ON Hungária Zrt.
+Deputy Chairman of the SE Works Council of E.ON SE
+Chairman of the Works Council of E.ON Észak-dunántúli
+Áramhálózati Zrt.
+→ E.ON Észak-dunántúli Áramhálózati Zrt.
+Thies Hansen (until December 31, 2017)
+Chairman of the Combined Works Council, HanseWerk AG
+Chairman of the Works Council Hamburg of HanseWerk AG
+→HanseWerk AG
+→ Schleswig-Holstein Netz AG
+→ Hamburg Netz GmbH
+Carolina Dybeck Happe
+Chief Financial Officer of ASSA ABLOY AB
+→ ASSA ABLOY Asia Holding AB (Chairperson)
+→ ASSA ABLOY East Europe AB (Chairperson)
+→ ASSA ABLOY Entrance Systems AB (Chairperson)
+→ ASSA ABLOY Financial Services AB (Chairperson)
+→ ASSA ABLOY Finans AB (Chairperson)
+→ ASSA ABLOY IP AB (Chairperson)
+→ ASSA ABLOY Kredit AB (Chairperson)
+→ ASSA ABLOY Mobile Services AB (Chairperson)
+→ Svensk Dörrinvest AB (Chairperson until September 6, 2017)
+Baroness Denise Kingsmill CBE
+Attorney at the Supreme Court
+Member of the House of Lords
+→ Monzo Bank Ltd. (Chairperson)
+→ Inditex S.A.
+→ International Consolidated Airlines Group S.A.
+(until June 16, 2017)
+Dr. Theo Siegert
+Managing Partner, de Haen-Carstanjen & Söhne
+→ Henkel AG & Co. KGaA
+→ Merck KGaA
+(until March 31, 2017 Finance and Investment Committee)
+Dr. Karl-Ludwig Kley, Chairman (until March 31, 2017)
+Dr. Karen de Segundo, Chairperson
+(Chairperson since April 1, 2017)
+Eugen-Gheorghe Luha, Deputy Chairman
+(Deputy Chairman until August 1, 2017)
+Albert Zettl, Deputy Chairman
+(since April 1, 2017, Deputy Chairman since August 2, 2017)
+Clive Broutta
+Carolina Dybeck Happe (since April 1, 2017)
+Ewald Woste (since April 1, 2017)
+Nomination Committee
+Dr. Karl-Ludwig Kley, Chairman
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Dr. Karen de Segundo
+Unless otherwise indicated, information is as of December 31, 2017, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→
+→
+Notes
+Management Board (and Information on Other Directorships)
+224
+Dr. Johannes Teyssen
+Born in 1959 in Hildesheim, Germany
+Chairman of the Management Board and CEO since 2010
+Member of the Management Board since 2004
+Strategy and Corporate Development, Turkey, HR,
+Political Affairs and Communications, Legal and Compliance,
+Corporate Audit, Reorganization Project
+→ Deutsche Bank AG
+→ Uniper SE (until June 8, 2017)
+→ Nord Stream AG (since June 1, 2017)
+Dr.-Ing. Leonhard Birnbaum
+Investment and Innovation Committee
+Full-time Representative of the General, Municipal,
+Boilermakers, and Allied Trade Union (GMB)
+Dr. Karl-Ludwig Kley (until March 31, 2017)
+Andreas Schmitz (since April 1, 2017)
+Elisabeth Wallbaum (since January 1, 2018)
+Fred Schulz, Deputy Chairman
+→ DKSH Holding Ltd.
+E. Merck KG
+Elisabeth Wallbaum
+Expert, SE Works Council of E.ON SE and
+E.ON Group Works Council
+Ewald Woste
+Management Consultant
+→ TEAG Thüringer Energie AG (Chairman)
+→ GASAG AG
+→ GreenCom Networks AG (since August 3, 2017)
+→ Deutsche Energie-Agentur GmbH (dena)
+(since October 20, 2017)
+→ Energie Steiermark AG
+→ TEN Thüringer Energienetze GmbH & Co. KG
+Albert Zettl
+Deputy Chairman of the SE Works Council of E.ON SE
+Chairman of the E.ON Group Works Council
+Chairman of the Division Works Council of Bayernwerk AG
+Chairman of the Eastern Bavaria Works Council of Bayernwerk
+Netz GmbH
+→ Bayernwerk AG
+→ Versorgungskasse Energie VVaG i.L.
+Supervisory Board Committees
+Executive Committee
+Dr. Karl-Ludwig Kley, Chairman
+Prof. Dr. Ulrich Lehner, Deputy Chairman
+Andreas Scheidt, Deputy Chairman
+Fred Schulz
+Audit and Risk Committee
+Dr. Theo Siegert, Chairman
+Thies Hansen (until December 31, 2017)
+Kaiser-Wilhelm-Koog²
+Clive Broutta
+Member of National Board, Unified Service Sector Union, ver.di,
+Director of Utility/Waste Management Section
+50.0
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+49.0
+Wasserwerk Gifhorn Beteiligungs-GmbH, DE, Gifhorn
+49.8
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava5
+Zenit-SIS GmbH, DE, Düsseldorf²
+49.0
+100.0
+Wasserwerk Gifhorn GmbH & Co KG, DE, Gifhorn
+49.8
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+Yorkshire Windpower Limited, GB, Coventry
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2017)
+Name, location
+Consolidated investment funds
+ASF, DE, Düsseldorf¹
+HANSEFONDS, DE, Düsseldorf¹
+OB 2, DE, Düsseldorf¹
+OB 4, DE, Düsseldorf¹
+OB 5, DE, Düsseldorf¹
+E.ON Stock
+50.0
+22.2
+WVM Wärmeversorgung Maßbach GmbH, DE, Maẞbach6
+Visioncash, GB, Coventry¹
+100.0
+Windkraft Gerolsbach GmbH & Co. KG, DE, Gerolsbach6
+23.2
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+40.0
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+83.3
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH,
+DE, Königs Wusterhausen²
+50.1
+Windpark Mutzschen OHG, DE, Potsdam²
+77.8
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE,
+Goslar6
+Windpark Naundorf OHG, DE, Potsdam²
+66.7
+49.0
+Wiregrass, LLC, US, Wilmington²
+100.0
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim6
+50.0
+WIT Ranch Wind Farm, LLC, US, Wilmington²
+100.0
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+60.0
+WUN Energie GmbH, DE, Wunsiedel
+25.1
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Müden/Aller6
+VKE-FONDS, DE, Düsseldorf¹
+Name, location
+Other companies in which share investments are held
+e-werk Sachsenwald GmbH, DE, Reinbek?
+19.9
+7.2
+0.0
+10.0
+20.5
+0.0
+Stadtwerke Wertheim GmbH, DE, Wertheim?
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. . 4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Supervisory Board (and Information on Other Directorships)
+222
+Dr. Karl-Ludwig Kley
+Chairman of the E.ON SE Supervisory Board
+→ BMW AG
+→ Deutsche Lufthansa AG
+(Chairman since September 25, 2017)
+→ Verizon Communications Inc.
+Prof. Dr. Ulrich Lehner
+Member of the Shareholders' Committee of
+Henkel AG & Co. KGaA
+Deputy Chairman of the E.ON SE Supervisory Board
+→ Deutsche Telekom AG (Chairman)
+→ thyssenkrupp AG (Chairman)
+→ Porsche Automobil Holding SE
+→ Henkel AG & Co. KGaA
+Andreas Scheidt
+Deputy Chairman of the E.ON SE Supervisory Board
+0.0
+→ Uniper SE (until June 8, 2017)
+30.1
+0.0
+Herzo Werke GmbH, DE, Herzogenaurach?
+HEW HofEnergie+Wasser GmbH, DE, Hof?
+infra fürth gmbh, DE, Fürth'
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg'
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing?
+Stake (%)
+Equity
+€ in millions
+221
+Stake (%)
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+Earnings
+€ in millions
+16.0
+27.6
+4.2
+19.9
+12.8
+0.0
+19.9
+22.1
+0.0
+19.9
+70.4
+10.0
+100.0
+904
+eon.com
+14,044
+Provisions
+4,353
+4,120
+4,280
+12,008
+2,041
+Financial liabilities
+4,673
+3,883
+23,125
+2,788
+3,099
+23,487
+27,639
+26,376
+7,325
+8,904
+132,330
+125,690
+113,693
+63,699
+3,792
+33,444
+35,642
+32,513
+63,335
+61,172
+39,287
+35,198
+Provisions
+28,153
+31,376
+30,655
+19,618
+18,001
+Financial liabilities
+18,051
+15,784
+14,954
+10,435
+9,922
+Other liabilities and other
+16,975
+16,175
+15,563
+9,234
+7,275
+Current liabilities
+55,950
+Other liabilities and other
+Total assets and liabilities
+Cash flow, investments and financial ratios
+5.3
+3.9
+Cash provided by operating activities of continuing operations as a
+percentage of sales
+5.2
+5.6
+9.8
+7.8
+Stock and E.ON SE long-term ratings
+Earnings per share attributable to shareholders of E.ON SE (€)
+1.1
+-1.64
+-3.6
+-4.33
+1.84
+Equity per share (€)
+17.68
+12.72
+8.42
+-0.50
+1.85
+Twelve-month high³ (€)
+14.71
+15.46
+3.7
+63,179
+4.0
+Debt factor6
+Cash provided by operating activities of continuing operations5
+6,260
+6,354
+4,191
+2,961
+-2,952
+Cash-effective investments
+7,992
+4,637
+3,169
+3,308
+Equity ratio (%)
+28
+21
+17
+2
+12
+Economic net debt (at year-end)
+32,218
+33,394
+27,714
+26,320
+19,248
+3.5
+12.98
+Non-current liabilities
+2,342
+Adjusted EBITDA³
+37,965
+38,173
+42,656
+113,095
+119,615
+2017
+2016
+2015
+2014
+9,191
+2013
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Sales
+Sales and earnings
+€ in millions
+Summary of Financial Highlights 1,2
+229
+8,376
+5,844
+4,939
+1,076
+1,646
+2,126
+Adjusted net income³
+3,932
+-8,450
+-6,999
+-3,160
+2,091
+Net income/Net loss attributable to shareholders of E.ON SE
+4,191
+-16,007
+-6,377
+-3,130
+2,459
+Net income/Net loss
+3,074
+3,112
+3,563
+4,695
+5,642
+Adjusted EBIT³
+4,955
+Value measures
+ROACE/effective 2015 ROCE (%)
+Pretax cost of capital (%)
+Value added4
+15,786
+Total assets
+132,330
+125,690
+113,693
+63,699
+55,950
+Equity
+36,638
+26,713
+19,077
+1,287
+6,708
+Capital stock
+2,001
+2,001
+2,001
+2,001
+2,201
+Minority interests without controlling influence
+2,915
+2,128
+2,648
+17,403
+2,701
+40,081
+36,750
+9.2
+8.6
+10.9
+10.4
+10.6
+7.5
+7.4
+6.7
+5.8
+6.4
+1,031
+640
+1,217
+1,370
+1,211
+Asset and capital structure
+Non-current assets
+Current assets
+95,580
+83,065
+73,612
+46,296
+40,164
+42,625
+8.49
+10.69
+Twelve-month low³ (€)
+Standardized performance categories for an issuer's short- and long-term debt instruments
+based on the probability of interest payment and full repayment. Ratings provide investors
+and creditors with the transparency they need to compare the default risk of various financial
+investments.
+Return on equity
+The return earned on an equity investment (in this case, E.ON stock), calculated after
+corporate taxes but before an investor's individual income taxes.
+ROACE
+Acronym for return on average capital employed. A key indicator for monitoring the perfor-
+mance of E.ON's business, ROACE is the ratio between adjusted EBIT and average capital
+employed. Average capital employed represents the average interest-bearing capital tied
+up in the E.ON Group.
+234
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Rating
+Combined Group Management Report
+Summary of Financial Highlights and Explanations
+ROCE
+Acronym for return on capital employed. ROCE is the ratio between adjusted EBIT and
+capital employed. Capital employed represents the interest-bearing capital tied up in the
+E.ON Group.
+Syndicated line of credit
+Credit facility extended by two or more banks that is good for a stated period of time.
+Value added
+Key measure of E.ON's financial performance based on residual wealth calculated by
+deducting the cost of capital (debt and equity) from operating profit. It is equivalent to the
+return spread (ROACE minus the cost of capital) multiplied by capital employed, which
+represents the average interest-bearing capital tied up in the E.ON Group.
+Value at risk ("VaR")
+Risk measure that indicates the potential loss that a portfolio of investments will not exceed
+with a certain degree of probability (for example, 99 percent) over a certain period of time
+(for example, one day). Due to the correlation of individual transactions, the risk faced by a
+portfolio is lower than the sum of the risks of the individual investments it contains.
+Working Capital
+Consolidated Financial Statements
+In a business combination accounted for as a purchase, the values at which the acquired
+company's assets and liabilities are recorded in the acquiring company's balance sheet.
+Purchase price allocation
+Risk measure that indicates, with a certain degree of confidence (for example, 95 percent), that
+changes in market prices will not cause a profit margin to fall below expectations during the
+holding period, depending on market liquidity. For E.ON's business, the main market prices are
+those for power, gas, coal, and carbon.
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Fair value
+The price at which assets, debts, and derivatives pass from a willing seller to a willing
+buyer, each having access to all the relevant facts and acting freely.
+Financial derivative
+Contractual agreement based on an underlying value (reference interest rate, securities
+prices, commodity prices) and a nominal amount (foreign currency amount, a certain number
+of stock shares).
+Goodwill
+The value of a subsidiary as disclosed in the parent company's consolidated financial state-
+ments resulting from the consolidation of capital (after the elimination of hidden reserves
+and liabilities). It is calculated by offsetting the carrying amount of the parent company's
+investment in the subsidiary against the parent company's portion of the subsidiary's equity.
+Impairment test
+Periodic comparison of an asset's book value with its fair value. A company must record an
+impairment charge if it determines that an asset's fair value has fallen below its book value.
+Goodwill, for example, is tested for impairment on at least an annual basis.
+International Financial Reporting Standards ("IFRS")
+Under regulations passed by the European Parliament and European Council, capital-market-
+oriented companies in the EU must apply IFRS.
+Investments
+Cash-effective investments shown in the Consolidated Statements of Cash Flows.
+233
+Glossary of Financial Terms
+Net financial position
+Difference between total financial assets (cash and non-current securities) and total financial
+liabilities (debts to financial institutions, third parties, and associated companies, including
+effects from currency translation).
+Option
+The right, not the obligation, to buy or sell an underlying asset (such as a security or currency)
+at a specific date at a predetermined price from or to a counterparty or seller. Buy options
+are referred to as calls, sell options as puts.
+Other non-operating earnings
+Income and expenses that are unusual or infrequent, such as book gains or book losses from
+significant disposals as well as restructuring expenses (see EBIT).
+Profit at Risk ("PaR")
+The difference between a company's current operating assets and current operating liabilities.
+235
+Further information
+E.ON SE
+a responsibly managed forest certified by the Forest Stewardship Council.
+236
+Financial Calendar
+May 8, 2018
+May 9, 2018
+August 8, 2018
+November 14, 2018
+Quarterly Statement: January - March 2018
+2018 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2018
+Quarterly Statement: January – September 2018
+March 13, 2019
+May 13, 2019
+May 14, 2019
+August 7, 2019
+November 13, 2019
+Release of the 2018 Annual Report
+Quarterly Statement: January - March 2019
+2019 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2019
+Quarterly Statement: January – September 2019
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+T +49 201-184-00
+info@eon.com
+This Annual Report was printed on paper produced from fiber that comes from
+Combined Group Management Report
+FSC® C002390
+MIX
+Brüsseler Platz 1
+45131 Essen
+Germany
+T +49 (0)201-184-00
+info@eon.com
+eon.com
+Journalists
+T +49 (0)201-184-4236
+presse@eon.com
+Analysts and shareholders
+T +49 (0)201-184-2806
+investorrelations@eon.com
+Bond investors
+T +49 (0)201-184-6526
+creditorrelations@eon.com
+Only the German version of this Annual Report is legally binding.
+Production & Typesetting
+Jung Produktion, Düsseldorf
+Printing
+Picture Credit
+G. Peschke Druckerei, Parsdorf
+Foto Merck KGaA (page 6)
+Climate Partner°
+climate neutral
+Print | ID 53152-1712-1001
+√
+FSC
+www.fsc.org
+Paper from
+responsible sources
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+13.1
+19.6
+Moody's
+A3
+A3
+Baal
+Baal
+Baa2
+Standard & Poor's
+A-
+A-
+BBB+
+BBB+
+BBB
+Employees
+Employees at year-end
+61,327
+58,811
+43,162
+43,138
+42,699
+¹Adjusted for discontinued operations and for the application of IFRS 10 and 11 and IAS 32. - 2Line items from the Consolidated Statements of Income for 2016 and 2015 were adjusted to exclude
+Uniper; they include Uniper prior to 2015. Line items from the Consolidated Balance Sheets for 2016 were adjusted to exclude Uniper; they include Uniper prior to 2016..³Adjusted for non-operating
+effects. . 4As of the balance-sheet date. . 5Cash provided by operating activities of continuing operations.. 6Ratio between economic net debt and adjusted EBITDA; 2015 figure not adjusted to exclude
+Uniper. 'Attributable to shareholders of E.ON SE.. 8Xetra; 2015 and 2016 were adjusted for the Uniper spinoff.. 9At the end of December. . 10 For the respective financial year; the 2017 figure is
+management's proposed dividend.. 11 Based on shares outstanding.
+Glossary of Financial Terms
+17.4
+Actuarial gains and losses
+27.4
+Market capitalization 9, 11 (€ in billions)
+11.94
+12.56
+6.28
+6.04
+6.64
+Year-end closing price per share 8,9 (€)
+13.42
+14.2
+7.87
+6.70
+9.06
+Dividend per share 10 (€)
+0.6
+0.5
+0.5
+0.21
+0.30
+Dividend payout
+1,145
+966
+976
+410
+650
+25.6
+1,427
+The actuarial calculation of provisions for pensions is based on projections of a number of
+variables, such as projected future salaries and pensions. An actuarial gain or loss is recorded
+when the actual numbers turn out to be different from the projections.
+Adjusted earnings before interest and taxes. The EBIT figure used by E.ON is derived from
+income/loss from continuing operations before interest income and income taxes and is
+adjusted to exclude material non-operating income and expenses (see Other non-operating
+earnings). It is our key earnings figure for purposes of internal management control and as
+an indicator of our businesses' long-term earnings power.
+Accounting approach in which a parent company and its affiliates are presented as if they
+formed a single legal entity. All intracompany income and expenses, intracompany accounts
+payable and receivable, and other intracompany transactions are offset against each other.
+Share investments in affiliates are offset against their capital stock, as are all intracompany
+credits and debts, since such rights and obligations do not exist within a single legal entity.
+The adding together and consolidation of the remaining items in the annual financial state-
+ments yields the consolidated balance sheets and the consolidated statements of income.
+Contractual trust arrangement ("CTA")
+Model for financing pension obligations under which company assets are converted to
+assets of a pension plan administered by an independent trust that is legally separate from
+the company.
+231
+Glossary of Financial Terms
+Controllable costs
+Our key figure for monitoring operational costs that management can meaningfully influence:
+the controllable portions of the cost of materials (in particular, maintenance costs and the
+costs of goods and services), certain portions of other operating income and expenses, and
+most personnel costs.
+Cost of capital
+Weighted average of the costs of debt and equity financing (weighted-average cost of
+capital: "WACC"). The cost of equity is the return expected by an investor in a given stock.
+The cost of debt is based on the cost of corporate debt and bonds. The interest on corporate
+debt is tax-deductible (referred to as the tax shield on corporate debt).
+Credit default swap ("CDS")
+A credit derivative used to hedge the default risk on loans, bonds, and other debt instruments.
+Debt factor
+Ratio between economic net debt and EBITDA. Serves as a metric for managing E.ON's
+capital structure.
+Debt issuance program
+Contractual framework and standard documentation for the issuance of bonds.
+Discontinued operations
+Businesses or parts of a business that are planned for divestment or have already been
+divested. They are subject to special disclosure rules.
+Economic net debt
+Key figure that supplements net financial position with pension obligations and asset-retire-
+ment obligations. In the case of material provisions affected by negative real interest rates,
+we use the actual amount of the obligation instead of the balance-sheet figure to calculate
+our economic net debt.
+Equity method
+Method for valuing shareholdings in associated companies whose assets and liabilities are
+not fully consolidated. The proportional share of the company's annual net income (or loss)
+is reflected in the shareholding's book value. This change is usually shown in the owning
+company's income statement.
+232
+CEO Letter
+Consolidation
+Adjusted EBIT
+Unsecured, short-term debt instruments issued by commercial firms and financial institutions.
+CP is usually quoted on a discounted basis, with repayment at par value.
+Cash provided by, or used for, operating activities of continuing operations.
+Adjusted EBITDA
+Adjusted net income
+An earnings figure after interest income, income taxes, and minority interests that has
+been adjusted to exclude certain extraordinary effects. The adjustments include effects
+from the marking to market of derivatives, book gains and book losses on disposals,
+restructuring expenses, and other non-operating income and expenses of a non-recurring
+or rare nature (after taxes and non-controlling interests). Adjusted net income also excludes
+income/loss from discontinued operations, net.
+Beta factor
+Indicator of a stock's relative risk. A beta coefficient of more than one indicates that a stock
+has a higher risk than the overall market; a beta coefficient of less than one indicates that it
+has a lower risk.
+Bond
+Debt instrument that gives the holder the right to repayment of the bond's face value plus
+an interest payment. Bonds are issued by public entities, credit institutions, and companies
+and are sold through banks. They are a form of medium- and long-term debt financing.
+230
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Capital employed
+Represents the interest-bearing capital tied up in the E.ON Group. It is equal to a segment's
+non-current and current operating assets less the amount of non-interest-bearing available
+capital. Other equity interests are included at their acquisition cost, not their fair value.
+Capital stock
+The aggregate face value of all shares of stock issued by a company; entered as a liability
+in the company's balance sheet.
+Cash-conversion rate
+Operating cash flow before interest and taxes divided by adjusted EBITDA. It indicates
+whether our operating earnings are generating enough liquidity.
+Cash flow statement
+Calculation and presentation of the cash a company has generated or consumed during
+a reporting period as a result of its operating, investing, and financing activities.
+Cash provided by operating activities
+Commercial paper ("CP")
+Earnings before interest, taxes, depreciation, and amortization. It equals the EBIT figure
+used by E.ON before depreciation and amortization.
+3,227
+Our sales declined by about €0.2 billion to €38 billion in 2017.
+Energy Networks' sales surpassed the prior-year figure by
+€1.1 billion, primarily because of higher costs charged by
+upstream grid operators in Germany that we passed through to
+customers. Its sales were slightly higher in Sweden and
+East-Central Europe/Turkey owing to volume and price factors.
+Customer Solutions' sales declined by €0.8 billion, principally
+because of lower sales volume and currency-translation effects
+in the United Kingdom as well as the expiration of supply con-
+tracts for the wholesale-customer business in Germany, which
+was transferred to Uniper. Sales at our Renewables segment
+were up by about €250 million year on year, primarily because
+of an increase in owned generation following the commission-
+ing of new wind farms in the United States and favorable wind
+conditions in Poland, Germany, the United Kingdom, and Swe-
+den. Non-Core Business's sales were at the prior-year level. The
+prior-year figure for Corporate Functions/Other includes E&P
+operations in the North Sea that were sold in 2016.
+Cash-conversion rate is equal to operating cash flow before
+interest and taxes divided by adjusted EBITDA. It indicates
+whether our operating earnings are generating enough liquidity.
+Cash-effective investments are equal to the investment expen-
+ditures shown in our Consolidated Statements of Cash Flows.
+Adjusted earnings before interest and taxes ("adjusted EBIT") is
+E.ON's most important key figure for purposes of internal man-
+agement control and as an indicator of its businesses' long-
+term earnings power. The E.ON Management Board is con-
+vinced that adjusted EBIT is the most suitable key figure for
+assessing operating performance because it presents a busi-
+ness's operating earnings independently of non-operating fac-
+tors, interest, and taxes. The adjustments include net book
+gains, certain restructuring expenses, impairment charges, and
+other non-operating earnings, which include, among other
+items, the marking to market of derivatives (see the explanatory
+information on pages 37 and 38 of the Combined Group Man-
+agement Report and in Note 33 of the Consolidated Financial
+Statements).
+Our main key figures for managing our operating business are
+adjusted EBIT and cash-effective investments. Other key fig-
+ures for managing the E.ON Group-alongside adjusted net
+income, and earnings per share (based on adjusted net
+income) are cash-conversion rate and ROCE.
+Our corporate strategy aims to deliver sustainable growth in
+shareholder value. We have in place a Group-wide planning and
+controlling system to assist us in planning and managing E.ON
+as a whole and our individual businesses with an eye to increas-
+ing their value. This system ensures that our financial resources
+are allocated efficiently. We strive to enhance our sustainability
+performance efficiently and effectively as well. We have high
+expectations for our sustainability performance. We embed
+these expectations progressively more deeply into our organiza-
+tion-across all organizational entities and all processes-by
+means of binding company policies and minimum standards.
+Management System
+23
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+This segment consists of our non-strategic activities. This
+applies to the operation of our nuclear power stations in Ger-
+many (which is managed by our Preussen Elektra unit).
+Non-Core Business
+This segment consists of Onshore Wind/Solar and Offshore
+Wind/Other. We plan, build, operate, and manage renewable
+generation assets. We market their output in several ways: in
+conjunction with renewable incentive programs, under long-term
+electricity supply agreements with key customers, and directly to
+the wholesale market.
+Renewables
+customers.
+Return on capital employed ("ROCE") assesses the value perfor-
+mance of our operating business. ROCE is a pretax total return
+on capital and is defined as the ratio of adjusted EBIT to annual
+average capital employed.
+Adjusted net income is an earnings figure after interest income,
+income taxes, and non-controlling interests that has been
+adjusted to exclude non-operating effects. Also excluded are
+non-operating interest expense/income, taxes on operating
+earnings, and non-controlling interests' share of operating
+earnings.
+E.ON manages its capital structure by means of its debt factor
+(see the section entitled Finance Strategy on page 33). Debt
+factor is equal to our economic net debt divided by adjusted
+EBITDA and is therefore a dynamic debt metric. Economic net
+debt includes our net financial debt as well as our pension and
+asset-retirement obligations.
+Alongside our most important financial management key fig-
+ures, this Combined Group Management Report includes other
+financial and non-financial key performance indicators ("KPIs")
+to highlight aspects of our business performance and our
+sustainability performance vis-à-vis all our stakeholders: our
+employees, customers, shareholders, bond investors, and the
+countries in which we operate. Operating cash flow and value
+added are examples of our other financial KPIs. Among the KPIs of
+our sustainability performance is TRIF (which measures reported
+work-related injuries and illnesses). The Employees chapter
+contains explanatory information about TRIF. However, this KPI
+is not the focus of the ongoing management of our businesses.
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In 2017 we sold our stake in Greensmith, a battery solutions
+provider, to Wärtsilä of Finland, a global leader in advanced
+technologies for the marine and energy markets. E.ON began
+working with Greensmith in 2015 on a 10-MW energy-storage
+system in Tucson, Arizona. In September 2016 E.ON increased
+its stake in Greensmith and also began installing two more
+energy-storage systems in Texas.
+In 2017 these included Cuculus, a software company based in
+Ilmenau, Germany. We are partnering with Cuculus to develop
+solutions for the smart home of the future. The solutions are
+based on the Internet of Things ("IoT"), in which different
+devices and systems can communicate with and control each
+other via the Internet. Homes in the new energy world will typi-
+cally have solar panels, battery storage systems (including vir-
+tual storage solutions like the E. ON SolarCloud), electric vehi-
+cles, and charging systems. All these systems have to be
+continuously automated and coordinated so that energy is used
+as efficiently as possible. This will make energy customers more
+independent of their energy supplier and also relieve them of
+the complex task of optimizing each individual system. Smart
+meters and loT technology enable the communication neces-
+sary to coordinate the systems.
+We want to identify promising energy technologies of the
+future that will enhance our palette of offerings for our millions
+of customers around Europe and will make us a pacesetter in
+the operation of smart energy systems. We select new busi-
+nesses that offer the best opportunities for partnerships, com-
+mercialization, and equity investments. Our investments focus
+on strategic technologies and business models that enhance
+our ability to lead the move toward distributed, sustainable, and
+innovative energy offerings. These arrangements benefit new
+technology companies and E.ON, since we gain access to their
+new business models and have a share in the value growth.
+This segment serves as the platform for working with our cus-
+tomers to actively shape Europe's energy transition. This
+includes supplying customers in Europe (excluding Turkey)
+with power, gas, and heat as well as with products and ser-
+vices that enhance their energy efficiency and autonomy and
+provide other benefits. Our activities are tailored to the individ-
+ual needs of all types of customers: residential, small and
+medium-sized enterprises, large commercial and industrial,
+and public entities. E.ON's main presence in this business is in
+Germany, the United Kingdom, Sweden, Italy, the Czech
+Republic, Hungary, and Romania. E.ON Connecting Energies,
+which provides customers with turn-key distributed-energy
+solutions, is also part of this segment. We established a decen-
+tralized procurement organization in all the regions where we
+operate to procure the power and gas necessary to supply our
+Strategic Co-Investments
+Infrastructure and energy networks: develop energy-storage
+and energy-distribution solutions for an increasingly distrib-
+uted and volatile generation system
+Renewables generation: increase the cost-effectiveness of
+existing wind and solar assets and study new renewables
+technologies
+Retail and end-customer solutions: develop new business
+models for distributed-energy supply, energy efficiency, and
+mobility
+•
+•
+E.ON's innovation activities reflect its strategy of focusing sys-
+tematically on the new energy world of empowered and proac-
+tive customers, renewables and distributed energy, energy effi-
+ciency, local energy systems, and digital solutions. E.ON
+therefore has the following Innovation Hubs:
+Innovation
+24
+Corporate Profile
+Energy intelligence and energy systems: study potentially
+fundamental changes to energy systems and the role of data
+in the new energy world.
+Summary of Financial Highlights and Explanations
+Customer Solutions
+This segment consists of our power and gas distribution net-
+works and related activities. It is subdivided into three regional
+markets: Germany, Sweden, and East-Central Europe/Turkey
+(which consists of the Czech Republic, Hungary, Romania,
+The Phoenix program is making the setup of E.ON's central
+and support functions closer to customers and reducing
+unnecessary bureaucracy. For example, we scrutinized com-
+pany policies and made them much leaner. This gives our
+customer-proximate functions greater decision-making author-
+ity, enabling faster decision-making and implementation. In
+the future, support functions like IT and procurement will be
+more closely integrated with our operating business. In addi-
+tion, the results of the program will improve our bottom line
+by €400 million from 2018 onward. The discontinuation or
+outsourcing of tasks is expected to affect up to 1,300 jobs
+across the Group. E. ON is working with employee represen-
+tatives to find mutually acceptable solutions for employees
+whose jobs are being eliminated and in 2017 already imple-
+mented such solutions for a majority of the jobs affected.
+Our strategic review has ensured that the entire E.ON Group
+uses its existing strengths to successfully shape the energy
+transition for the long-term benefit of its employees, cus-
+tomers, and shareholders. This includes focusing systemati-
+cally on the electric energy world and on customers. The
+increased use of electricity will play a key role in the sustain-
+able development of the energy world. Since the future
+energy world will not only be more distributed but also more
+customer-driven, we can only achieve lasting success if cus-
+tomers perceive E.ON as trustworthy and as their partner of
+choice. We intend to sharpen the focus of our three seg-
+ments (Customer Solutions, Energy Networks, and Renew-
+ables) to enable them to respond appropriately to the trends
+in their respective businesses. We will transform our elec-
+tricity grids into a smart platform for the energy transition, a
+platform on which a variety of market participants will make
+transactions in the future. At our renewables business, we
+intend to significantly enlarge our onshore wind position and
+to enter new markets. As for customer solutions, we will
+focus on rapidly expanding our solar and battery solutions
+for residential customers. In addition, E.ON is investing in
+e-mobility, including establishing a charging infrastructure
+in Europe.
+•
+•
+In 2017, the first year after the split-off of Uniper, E.ON moved
+forward with key corporate initiatives and launched new ones
+with the aim of enhancing its competitiveness and customer
+orientation. These initiatives lay an important foundation for
+E.ON's lasting success in the years ahead. All of them are
+designed for rapid results and implementation.
+Corporate Initiatives
+Uniper Spinoff
+In August 2017 E. ON and its joint-venture partner Sabanci
+decided to split Enerjisa, which operates in the Turkish market,
+into two separate entities: Enerjisa Enerji (distribution grids and
+sales) and Enerjisa Üretim (power generation and trading). The
+reason for the split was the realization that the two businesses
+are very different in terms of customer focus, degree of regula-
+tion, growth opportunities, and financial challenges. The split
+enables two independent management teams to focus specifi-
+cally on the challenges of their respective businesses. On Feb-
+ruary 5, 2018, E. ON and Sabanci announced that 20 percent of
+their Enerjisa Enerji stock had been sold to international and
+Turkish investors. The stock (symbol: ENJSA) began trading on
+the Istanbul Stock Exchange on February 8, 2018.
+Split of Enerjisa Joint Venture
+by feeding it directly into the E.ON SolarCloud, storing it there,
+and accessing it from any location. In Denmark, where our
+1,300 charging points make us the country's leading operator, we
+surpassed one million charging transactions. We are expanding
+our charging infrastructure outside Denmark as well. Examples
+include a partnership with CLEVER to establish a network of
+180 ultra-fast charging points in seven European countries.
+19
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Sales
+Finance Strategy
+The section of the Combined Group Management Report enti-
+tled Financial Situation contains explanatory information about
+our finance strategy.
+People Strategy
+The section of the Combined Group Management Report enti-
+tled Employees contains explanatory information about our
+people strategy.
+Energy Networks
+In view of our new strategy and the Annual Shareholders
+Meeting's vote to spin off Uniper, we reported Uniper activities
+as a discontinued operation in 2016. When the Control Termi-
+nation Agreement took effect, Uniper was deconsolidated
+effective December 31, 2016. E.ON's remaining Uniper stake
+was recorded in our Consolidated Financial Statements as an
+associated company and accounted for using the equity
+method. Uniper's earnings were reported under non-operating
+earnings. In September 2017 E.ON and Finnish energy com-
+pany Fortum concluded an agreement that gave E.ON the
+option to sell its 46.65-percent stake in Uniper to Fortum in
+early 2018 pursuant to a takeover offer (see the commentary
+in Note 4 to the Consolidated Financial Statements). Effective
+the end of September 2017, we classify our Uniper stake as an
+asset held for sale. In January 2018 E.ON decided to tender its
+46.65-percent stake in Uniper pursuant to the takeover offer,
+thereby exercising its option. The closure of the transaction is
+subject to regulatory approvals.
+The main task of Group Management is to lead the E.ON
+Group. This involves charting E.ON's strategic course and man-
+aging and funding its existing business portfolio. Group Man-
+agement's tasks include optimizing E.ON's overall business
+across countries and markets from a financial, strategic, and
+risk perspective and conducting stakeholder management.
+Group Management
+E.ON is an investor-owned energy company with approximately
+43,000 employee. Led by Group Management in Essen, our
+operations are segmented into three operating units: Energy
+Networks, Customer Solutions, and Renewables. Our non-stra-
+tegic operations are reported under Non-Core Business.
+Business Model
+Corporate Profile
+22
+Corporate Profile
+Slovakia, and Turkey). This segment's main tasks include operating
+its power and gas
+networks safely and reliably, carrying out all
+necessary maintenance and repairs, and expanding its networks,
+which frequently involves adding customer connections.
+€2.8 and €3 billion
+Management to propose dividend of €0.30 per share
+Uniper stake tendered to Fortum at the start of 2018
+€10.3 billion payment into Germany's public fund for financing
+nuclear-waste disposal completely relieves E.ON of liability
+•
+• Economic net debt reduced more significantly than expected,
+balance sheet strengthened
+Adjusted net income considerably above prior-year figure
+Adjusted EBIT in core business up slightly
+•
+Combined Group
+Management Report
+⚫ 2018 adjusted EBIT expected to be between
+25
+Uniper has been an independent company since the beginning
+of 2016. In line with its intention to fully divest its Uniper stake
+over the medium term, E.ON signed an agreement with Fortum
+on September 26, 2017, to sell its Uniper stock. Under the
+agreement, Fortum would make a voluntary public takeover offer
+to Uniper's shareholders, including a cash payment of €22 per
+share. At the beginning of January 2018, E.ON decided to accept
+Fortum's voluntary takeover offer and sell its 46.65-percent
+stake in Uniper. The closure of the transaction is subject to reg-
+ulatory approvals.
+Sample Projects from 2017
+The provisions for "renters' power" introduced in the Renewable
+Energy Law of 2017 (the subsidization of electricity supplied
+directly from solar systems on apartment buildings) will enable
+both renters and property owners to benefit from the expansion
+of renewables, such as the installation of rooftop solar panels.
+This will create new growth opportunities for the distribut-
+ed-energy business.
+CHP plants that entered service after August 1, 2014, had paid
+40 percent of the full renewables levy. The European Commis-
+sion intends to rescind approval of this limitation. An enforce-
+ment ban has therefore been in effect since January 1, 2018,
+and Germany will have to enact new legislation for new CHP
+plants (Renewable Energy Law self-supply regulation pursuant
+to Section 61b, Item 2, of the Renewable Energy Law). Until
+such legislation is enacted and approved, all new CHP plants
+will have to pay the full renewables levy.
+Under the amended Combined-Heat-and-Power ("CHP") Act,
+compensation for CHP units between 1 and 50 MW is deter-
+mined by competitive tenders conducted by the Federal Net-
+work Agency. This has intensified competition, reducing com-
+pensation from 7 cents per kWh to about 4 cents per kWh.
+27
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The German Federal Constitutional Court ruled that the nucle-
+ar-fuel tax was invalid. This entitled E.ON to a tax refund of
+approximately €2,850 million. The refund, which was paid in
+full in June 2017, is recorded as other operating income and as
+cash provided by operating activities of continuing operations.
+On June 30, 2017, the German Bundestag passed the Grid Fee
+Modernization Act which lays the legal foundation for transmis-
+sion grid fees to be standardized nationwide and for changes to
+be made in the compensation for avoided grid fees pursuant to
+Section 18 of the Electricity Grid Charges Ordinance. The act,
+which will be implemented gradually, will yield considerable
+savings for our distribution-grid customers through 2023.
+Germany
+The EU continued the process of enacting the proposals con-
+tained in the "Clean Energy for All Europeans" package of
+energy and climate legislation. With a number of proposals
+about to be enacted, it is clear that the EU will increase its tar-
+gets for renewables use and energy efficiency. At the end of the
+legislative process, the EU will focus on ensuring that member
+states fulfill their obligations in the energy sector.
+The EU intends to enhance its position as the world's leading
+region for low-emission vehicles. It put forward legislative pro-
+posals aimed at reducing the carbon intensity of Europe's vehi-
+cle fleet. The proposals center on electrification with the goal of
+increasing the proportion of electric vehicles in the current fleet
+to 7 percent by 2025. This would result in a considerable
+expansion of, and demand for, the charging infrastructure for
+these vehicles.
+in the total carbon price. The agreement also includes new rules
+to support the introduction of national carbon prices. It enables
+member states to voluntarily withdraw allowances from the
+market in order to implement their own carbon-pricing policies.
+The European Union completed a two-year legislative process
+to reform the Emissions Trading System for the period 2021 to
+2030. The new agreement calls for a steady decline in the over-
+supply of emission allowances, which should lead to an increase
+Europe
+The 23rd United Nations climate change conference took place in
+Bonn, Germany, from November 6 to 17, 2017. It too focused on
+the practical implementation of the Paris Agreement. Based on
+scenarios developed by the World Energy Council and the Inter-
+national Energy Agency, the Paris Agreement's objective of limit-
+ing the increase in global temperatures to under 2 degrees Celsius
+can only be reached with greater efforts.
+The coalition agreement for the planned continuation of the
+grand coalition in Germany commits the CDU, CSU, and SPD to
+climate targets for 2030 and 2050. One target is for renewables
+to meet about 65 percent of the country's gross electricity con-
+sumption by 2030. The agreement also foresees an ambitious
+action plan for upgrading and expanding energy networks, rec-
+ognizing the increased importance of distribution networks. The
+scope for digital business models is to be expanded, with data
+protection to be a top priority.
+United Kingdom
+The U.K. government published draft legislation to cap the
+standard tariff for residential customers by 2020. It is possible
+that this deadline could be extended to 2023. Parliament is
+currently considering the draft, which is expected to become law
+in 2019. While the political scene remains dominated by the
+Brexit negotiations, Britain's future stance with regard to EU
+energy policy and regulation remains uncertain. Nevertheless,
+Britain intends to fulfill its own commitments and continue its
+carbon-reduction policies. These include the further expansion of
+electric cars, renewables, energy efficiency, and new technologies.
+Italy
+25
+Disposals resulted in cash-effective items totaling €770 million
+in 2017 (prior year: €836 million). This figure includes the sales
+price for Hamburg Netz which was paid in 2017.
+E.ON Värme Lokala Energilösningar (small and medium-sized
+district-heating networks in Sweden).
+Hamburg Netz
+•
+•
+• Uniper stake
+Acquisitions, Disposals, and Discontinued Operations in 2017
+We executed the following significant transactions in 2017.
+Note 4 to the Consolidated Financial Statements contains
+detailed information about them:
+Our investments of €3.3 billion were slightly above the prior-year
+figure of €3.2 billion but below the €3.6 billion foreseen for 2017
+in our medium-term plan. The deviation is principally attributable
+to our Renewables segment, which postponed certain payments
+to 2018.
+Energy Policy and Regulatory Environment
+Global
+Adjusted EBIT for the E.ON Group declined by €38 million to
+€3.1 billion (if disposals are factored out, adjusted EBIT was
+€9 million below the prior-year figure). Adjusted net income
+increased by about €0.5 billion to €1.4 billion. Our adjusted EBIT
+and adjusted net income were therefore at the upper end of our
+forecast range of €2.8 to €3.1 billion and €1.2 to €1.45 billion,
+respectively. In addition, our objective was to record a cash-
+conversion rate of 80 percent. Cash-conversion rate is equal to
+operating cash flow before interest and taxes divided by
+adjusted EBITDA (roughly €5 billion). Operating cash flow
+before interest and taxes, which was substantially affected by
+extraordinary items such as our payment into Germany's public
+fund for nuclear-waste disposal and the refund of nuclear-fuel
+taxes, amounted to -€2.2 billion in 2017. Adjusted for these
+effects, our cash-conversion rate surpassed 100 percent. Our
+ROCE was 10.5 percent, slightly higher than our forecast of
+8 to 10 percent.
+Business Performance in 2017
+Earnings Situation
+28
+Business Report
+In late August 2016, the Czech Republic announced that it will
+extend the current regulatory period for electricity and gas
+prices by two years to 2020. The next regulatory period starts
+in 2021. In it, the country's regulatory agency wants to pro-
+mote cost efficiency while also stimulating grid investments
+through a mechanism that provides fair and stable returns on
+investment. Romania continued its liberalization program. The
+wholesale gas and power markets were fully liberalized on
+April 1 and July 1, 2017, respectively. Hungary's new electric-
+ity and gas regulatory periods began in 2017 and had a posi-
+tive impact on the distribution-grid business. They introduced
+new methodologies for investments in power distribution net-
+works, incentives to invest in renewables, and favorable tax
+treatment for investments in energy-efficiency projects. The
+government is also discussing ways to simplify and accelerate
+grid-connection processes.
+East-Central Europe
+Sweden's energy policy is focused on the implementation of the
+targets and measures contained in the agreement on the coun-
+try's energy future reached in 2016. The extension of the sup-
+port scheme for renewables through 2030, the development
+of strategies for energy efficiency, solar energy, and demand
+flexibility will all play important roles. In addition, the Swedish
+government set ambitious climate targets for 2030 for the
+transport sector and put in place new mechanisms to promote
+e-mobility and gas-powered vehicles. Sweden's energy regula-
+tor presented proposals for new grid regulation starting in
+2020 and a new market design for electricity suppliers.
+Sweden
+The Italian Regulatory Authority for Electricity, Gas, and Water
+wants to spur competition in the end-customer market and
+intends to supplant regulated tariffs. In November 2017 the
+Italian government published a national energy strategy for the
+next ten years. The strategy seeks to promote energy-efficiency
+measures, expand renewables, enhance supply security, reduce
+Italy's energy price premium relative to the rest of Europe, pro-
+mote sustainable mobility and environmentally friendly fuels,
+and phase out coal-fired generation.
+In the 2017 financial year our operating business performed well.
+Our sales of €38 billion were at the prior-year level. Adjusted
+EBIT in our core business rose by €38 million to €2.6 billion.
+Source: OECD, 2017.
+Our operating cash flow of -€3 billion was substantially below
+the prior-year figure of €3 billion, primarily because of our pay-
+ment into Germany's public fund for nuclear-waste disposal in
+July 2017.
+5
+The OECD considers global economic activity to be more robust.
+Monetary and fiscal incentives enabled most countries to achieve
+improved economic growth. Private investments, however,
+remain stagnant. The OECD estimates that the global economy
+grew at a rate of 3.6 percent in 2017.
+Macroeconomic Environment
+Macroeconomic and Industry Environment
+26
+Business Report
+Our innovation activities include partnering with universities
+and research institutes to conduct research projects in a variety
+of areas. The purpose is to study ways to expand the horizons of
+energy conservation and sustainable energy and to draw on this
+research to develop new offerings and solutions for customers.
+This research is conducted primarily at the E.ON Energy
+Research Center, which focuses on renewables, technologically
+advanced electricity networks, and efficient technology for
+buildings.
+University Support
+InterFlex is planned to run for three years. The E.ON Energy
+Research Center is also involved in the project.
+demand response: flexibly managing the demand for power
+depending on how much of it is available on the market.
+•
+sumer
+peer-to-peer energy trading: self-generating renewable
+power and trading it directly with a neighbor or another con-
+•
+⚫ islanding: operating and controlling autonomous microgrids
+in real time, including the integration of distributed generat-
+ing units and energy-storage devices
+Distributed Networks
+The E.ON Smart Check's features have been enhanced continu-
+ally since its launch. Consumers who participated in a pilot proj-
+ect in 2017 were able to automatically connect all electrical
+appliances in their household to the app and receive important
+information about them. In the project, for example, the app
+was capable of indicating whether a washing machine was cal-
+cified or living-room lighting was inefficient. E.ON Smart Check
+is already used by more than 120,000 customers.
+6
+Since 2015 E.ON customers have been able to use E.ON Smart
+Check, an app that provides transparency on their energy use.
+Customers can use the app to compare and analyze their energy
+consumption on a regular basis and thus, for example, avoid
+unexpected supplementary payments.
+Customer Solutions
+2017 GDP Growth in Real Terms
+Annual change in percent
+E.ON is one of 20 partners in InterFlex, a European smart-grid
+project that is part of Horizon 2020, an EU framework program for
+research and innovation. The purpose of InterFlex is to find new
+ways to make the power supply more flexible and to optimize it at
+the local level. In 2017 we launched two major InterFlex initiatives
+in which we are testing a number of state-of-the-art solutions in
+three demonstration projects in Germany and Sweden. They
+include:
+Italy
+3
+Germany
+1
+4
+6.1
+3.1
+2.4
+2.2
+2.4
+2.5
+0
+OECD
+Euro zone
+1.6
+Turkey
+Sweden
+United
+2
+Kingdom
+USA
+1.5
+Marking to market of derivative financial instruments
+Restructuring and cost-management expenses
+Net book gains (-)/losses (+)
+-3,220
+Non-operating adjustments
+-430
+4,661
+-3,230
+195
+EBIT
+-19
+-10
+-52
+Income/Loss from equity investments
+-411
+4,664
+-3
+-1,587
+Other non-operating earnings
+498
+274
+247
+541
+53
+368
+-63
+-375
+-62
+-87
+3,542
+4,031
+762
+Adjusted EBITDA
+Scheduled depreciation and amortization
+Impairments (+)/Reversals (-)
+Adjusted EBIT
+Impairments (+)/Reversals (-)
+Income/Loss from continuing operations before financial results and income taxes
+-2,206
+44
+3,925
+-4,502
+219
+Attributable to shareholders of E.ON SE
+-16,007
+4,180
+-6,708
+-8,450
+277
+2017
+2016
+2017
+Net income/loss
+€ in millions
+-164
+Full year
+2016
+1,314
+Attributable to non-controlling interests
+255
+123
+134
+Financial results
+440
+440
+-184
+-164
+58
+Income taxes
+4,180
+-3,159
+277
+Income/Loss from continuing operations
+13,842
+Income/Loss from discontinued operations, net
+-7,557
+-2,165
+951
+4,664
+921
+3,542
+-1,587
+4,031
+762
+Non-operating adjustments
+-430
+4,661
+Adjusted EBIT
+-3,230
+EBIT
+-19
+-3
+-10
+-52
+-411
+-3,220
+195
+247
+957
+3,074
+Fourth quarter
+2,330
+467
+788
+Operating earnings before interest and taxes
+-157
+-703
+801
+-221
+Interest expense (+)/income (-) not affecting net income
+-1,295
+-41
+-113
+-82
+Interest expense shown in the consolidated statements of income
+3,112
+-87
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+2016
+2017
+425
+48
+75
+44
+33
+3,112
+3,074
+454
+801
+3,869
+-3,620
+3,854
+-938
+394
+916
+350
+957
+1,806
+1,779
+1,415
+2016
+2017
+€ in millions
+Full year
+Fourth quarter
+Adjusted Net Income
+As a rule, the E.ON Management Board uses this figure generally
+in conjunction with its consistent dividend policy. E.ON will
+therefore aim for a payout ratio that is on par with its relevant
+peer companies. E.ON will propose a dividend of €0.30 per
+share for the 2017 financial year. In conjunction with the planned
+acquisition of innogy via a wide-ranging exchange of assets with
+RWE we decided to propose a fix dividend of €0.43 per share
+for the 2018 fiscal year.
+Like EBIT, net income also consists of non-operating effects,
+such as the marking to market of derivatives. Adjusted net
+income is an earnings figure after interest income, income taxes,
+and non-controlling interests that has been adjusted to exclude
+non-operating effects. In addition to the marking to market of
+derivatives, the adjustments include book gains and book losses
+on disposals, certain restructuring expenses, other material
+non-operating income and expenses (after taxes and non-con-
+trolling interests), and interest expense/income not affecting net
+income, which consists of the interest expense/income resulting
+from non-operating effects. Adjusted net income also does not
+include income/loss from discontinued operations.
+Adjusted Net Income
+The significant increase in other non-operating earnings is attrib-
+utable to effects resulting from the ruling by Germany's highest
+court on the invalidity of the nuclear-fuel tax and to the equity
+earnings on our Uniper stake, which were included in this item
+until the end of September 2017. In the prior year this line item
+was adversely affected by items resulting from the Act Reorga-
+nizing Responsibility for Nuclear Waste Management, which was
+passed by Germany's Bundestag and Bundesrat in December
+2016. These items, including the concomitant impairment
+charges, were recorded fully in the prior year.
+In 2017 we recorded impairment charges principally at Renew-
+ables and Customer Solutions in the United Kingdom. In the prior
+year we recorded impairment charges at Renewables and Cus-
+tomer Solutions in the United Kingdom and on a gas storage
+facility in Germany.
+The marking to market of the derivatives we use to shield our
+operating business from price fluctuations and of other deriva-
+tives resulted in a negative effect of €951 million (prior year:
++€932 million), mainly at Corporate Functions/Other, Customer
+Solutions, and Non-Core Business. The positive effect in the prior
+year was recorded primarily at Customer Solutions.
+32
+Business Report
+4,939
+4,955
+1,299
+-932
+Net Income/Loss
+Depreciation charges declined substantially year on year, from
+€3,823 million to €2,769 million. In particular, depreciation
+charges on capitalized dismantling costs for nuclear-waste dis-
+posal recorded in 2016 pursuant to Germany's Act Reorganizing
+Responsibility for Nuclear Waste Management did not recur.
+Impairment charges were higher than in the prior year and were
+recorded primarily at Renewables and Customer Solutions in the
+United Kingdom.
+Net book gains were significantly above the prior-year figure and
+resulted in particular from the sale of securities, which were sold
+in preparation for the payment into Germany's public fund for
+financing nuclear-waste disposal which was due in July, and
+from the sale of an equity investment at Customer Solutions in
+Sweden. In 2016 we recorded book gains on the sale of securi-
+ties and a book loss on the sale of our U.K. E&P business.
+-4,106
+-4,577
+-1,083
+-1,246
+Consolidation
+-29
+1,124
+E.ON Group
+796
+279
+234
+Corporate Functions/Other
++3
+1,538
+1,585
+-24
+-16
+470
+10,028
++1
+Adjusted EBIT for the E.ON Group declined by €38 million. In
+addition to the items mentioned above in the commentary on
+adjusted EBIT in our core businesses, other adverse factors
+In 2017 adjusted EBIT in our core business increased by
+€38 million year on year. Energy Networks' adjusted EBIT rose
+by €270 million, primarily because of the delayed repayment
+of personnel costs in Germany due to regulatory reasons along
+with an improved gross power margin due to higher tariffs in
+Sweden. Earnings at Energy Networks' East-Central Europe/
+Turkey unit were above the prior-year level. Adjusted EBIT in the
+Czech Republic and Hungary was higher in particular due to
+wider margins; this was partially offset by lower earnings from
+our stake in Turkey, which is accounted for using the equity
+method. Customer Solutions' adjusted EBIT declined by about
+€286 million year on year. The principal reasons were a weath-
+er-driven decline in sales volume and higher costs in the United
+Kingdom along with extraordinary items, lower gas sales prices,
+and persistently intense competitive and margin pressure in
+Germany. In addition, earnings were adversely affected by
+higher power and gas procurement costs (primarily in Romania)
+and lower sales prices and higher procurement costs in Hun-
+gary. Renewables' adjusted EBIT was €24 million higher, princi-
+pally because of a decline in scheduled depreciation charges at
+Offshore Wind/Other due to improved asset availability and
+higher wind yield.
+Adjusted EBIT
+30
+30
+Business Report
+Income from companies accounted for under the equity method
+of €716 million was substantially above the prior-year figure of
+€285 million. The increase in the amount of €431 million
+resulted primarily from the inclusion of our stake in Uniper SE
+as a company accounted for using the equity method during the
+first three quarters of 2017 (+€466 million). Since the end of
+September 2017, our Uniper SE stake has been recorded as an
+asset held for sale. Consequently, the book value of this stake
+was not recorded in equity in the fourth quarter of 2017.
+9,975
+Other operating expenses declined by 18 percent, from
+€7,867 million to €6,475 million. This was principally because
+expenditures relating to derivative financial instruments
+decreased substantially, from €4,925 million to €1,663 million.
+By contrast, expenditures relating to currency-translation effects
+rose from €231 million to €1,838 million. In addition, other
+operating expenses increased owing to our obligation to pass
+on a portion (€327 million) of the refunded nuclear-fuel tax to
+minority shareholders of our jointly owned power stations.
+Personnel costs of €3,162 million were €323 million above the
+prior-year figure of €2,839 million, mainly because of the costs of
+our reorganization program, which has been under way since the
+start of 2017. By contrast, personnel costs were reduced by
+lower past-service costs for pension plans.
+Costs of materials of €29,788 million were significantly below
+the prior-year level of €32,325 million. In the prior year this item
+was adversely affected by the provisions for nuclear-asset-retire-
+ment obligations that had to be recorded after Germany's Bunde-
+stag and Bundesrat passed the Act Reorganizing Responsibility
+for Nuclear Waste Management in December 2016.
+Other operating income increased by 3 percent, from
+€7,448 million to €7,649 million, mainly because of the refund
+of nuclear-fuel taxes paid in previous years (€2,850 million). In
+addition, the sale of securities and the release of provisions
+resulted in higher income than in the prior year. By contrast,
+income from currency-translation effects declined from
+€5,039 million to €1,950 million, and income from derivative
+financial instruments decreased from €1,141 million to
+€613 million. Corresponding amounts resulting from currency-
+translation effects and derivative financial instruments are
+recorded under other operating expenses.
+Other Line Items from the Consolidated Statements of Income
+Own work capitalized of €524 million was at the prior-year level
+(€529 million) and predominantly reflects the completion of IT
+projects and grid investments.
+-1
+38,173
+37,965
+1,660
+355
+Non-Core Business
++18
+2016
+2017
++1-%
+2016
+2017
+€ in millions
+Full year
++/-%
+Fourth quarter
+29
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+29
+Energy Networks
+4,123
+3,685
+1,357
+1,604
++41
+335
+474
+Renewables
+-4
+22,368
+21,567
+-3
+6,289
+6,088
+Customer Solutions
++7
+15,892
+16,990
++12
+included the unplanned outage of Brokdorf nuclear power sta-
+tion and lower sales prices at Preussen Elektra and the absence
+of earnings streams from E&P operations in the North Sea
+divested in 2016.
+Restructuring and cost-management expenditures rose substan-
+tially year on year. As in the prior-year period, they resulted
+mainly from restructuring programs and the One2two project.
+The increase is primarily attributable to higher expenditures for
+restructuring programs, in particular for the Phoenix reorganiza-
+tion program.
+E.ON generates a significant portion of its adjusted EBIT in very
+stable businesses. Regulated, quasi-regulated, and long-term
+contracted businesses accounted for the overwhelming propor-
+tion of our adjusted EBIT in 2017.
+Our quasi-regulated and long-term contracted business con-
+sists of operations in which earnings have a high degree of pre-
+dictability because key determinants (price and/or volume) are
+largely set by law or by individual contractual arrangements for
+the medium to long term. Examples of such legal or contractual
+arrangements include incentive mechanisms for renewables
+and the sale of contracted generating capacity.
+Other (divested operations)
+-8
+553
+506
+-28
+208
+149
+29
+Non-Core Business (PreussenElektra)
+2,530
+2,568
++36
+593
+808
+Adjusted EBIT from core business
+15
++2
+-11
+Adjusted EBIT
+801
+As in the prior year, we had a tax expense of €0.4 billion. With
+positive pretax income, our tax rate in 2017 was 10 percent
+(2016: -25 percent). One-off items relating to the refund of the
+nuclear-fuel tax and the resulting income tax levied in Germany
+were the main reasons for the change in our tax rate. The effects
+relating to the nuclear-fuel tax, which led us to use tax loss carry-
+forwards, are subject to a minimum tax rate.
+Pursuant to IFRS, income/loss from discontinued operations, net,
+is reported separately in the Consolidated Statements of Income
+and, in the prior year, primarily includes our earnings related to
+Uniper. Note 4 to the Consolidated Financial Statements contains
+more information.
+In 2017 we recorded net income attributable to shareholders of
+E.ON SE of €3.9 billion and corresponding earnings per share of
+€1.84. In the prior year we recorded a net loss of €8.5 billion and
+negative earnings per share of €4.33.
+Net Income/Loss
+31
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+957
+Combined Group Management Report
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+-1
+3,112
+3,074
++19
+Strategy and Objectives
+-6
+-3
+Consolidation
+1,941
++10
+475
+524
++/-%
+2016
+2017
+1,671
++/-%
+2017
+Energy Networks
+€ in millions
+Full year
+Fourth quarter
+Adjusted EBIT
+Our merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+2016
++16
+Customer Solutions
+173
+-398
+-342
+-261
+-92
+Corporate Functions/Other
++6
+430
+454
++70
+121
+206
+Renewables
+-35
+812
+526
+-34
+264
+Our regulated business consists of operations in which reve-
+nues are largely set by law and based on costs. The earnings on
+these revenues are therefore extremely stable and predictable.
+Taxes on operating earnings
+1.9
+-91
+Consolidated Assets, Liabilities, and Equity
+In line with Germany's Act Reorganizing Responsibility for
+Nuclear Waste Management, existing nuclear-asset-retirement
+obligations at the end of 2016 were met through payment,
+resulting in a substantial reduction-€9.1 billion-in current
+liabilities relative to year-end 2016.
+Our equity ratio (including non-controlling interests) at year-end
+2017 was 12 percent, which is about 10 percentage points
+higher than at year-end 2016. This change reflects the already-
+mentioned capital increase, the reduction in total assets and lia-
+bilities, as well as our positive net income in 2017. In particular,
+the refund of nuclear-fuel taxes paid in previous years had a
+positive impact on net income. Equity attributable to shareholders
+of E.ON SE was about €4 billion at year-end 2017. Equity
+attributable to non-controlling interests was roughly €2.7 billion.
+Non-current liabilities decreased by €4.1 billion, or 10 percent,
+owing in particular to a reduction in liabilities relating to derivative
+financial instruments, lower pension obligations, and a decline in
+nuclear-asset-retirement obligations.
+Current assets decreased by 9 percent, from €17.4 billion to
+€15.8 billion. A roughly €3.4 billion decline in liquid funds and a
+roughly €1 billion decline in operating receivables and other
+operating assets were largely offset, primarily by the reclassifi-
+cation of the book value of our Uniper SE stake as an asset held
+for sale. The decline in liquid funds is chiefly attributable to the
+payment of €10.3 billion into Germany's public fund for financ-
+ing nuclear-waste disposal. To finance this payment, E.ON SE
+conducted a roughly €1.35 billion capital increase in the first
+quarter of 2017. Furthermore, liquid funds were increased by
+the €2 billion bond issuance in the second quarter and the
+refund of nuclear-fuel taxes paid in previous years plus interest.
+Non-current assets of €40.3 billion were €6.1 billion lower rel-
+ative to year-end 2016. The principal factors were the reclassi-
+fication of the book value of our Uniper SE stake as an asset
+held for sale and the sale of non-current securities.
+Our total assets and liabilities of €56 billion were about €7.6 billion,
+or 12 percent, below the figure from year-end 2016, mainly
+because of developments at our nuclear energy business in
+Germany which were described above in the commentary on
+the change in our economic net debt.
+Asset Situation
+€ in millions
+37
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Cash provided by financing activities of continuing operations
+amounted to +€0.5 billion compared with -€1.2 billion in the
+prior year. The change of +€1.7 billion is primarily attributable
+to measures to fund the payment we made in July into Germa-
+ny's public fund for financing nuclear-waste disposal. The mea-
+sures consisted mainly of the issuance of €2 billion in bonds,
+the €1.35 billion capital increase conducted by E.ON SE in
+March 2017, and a €0.6 billion reduction in the dividend payout
+to E.ON SE shareholders relative to the prior year. These items
+were offset by the repayment of bonds in the fourth quarter of
+2017 (-€1.9 billion).
+Summary of Financial Highlights and Explanations
+¹From continuing operations.
+Non-current assets
+Total assets
+15,786
+73
+46,296
+72
+40,164
+%
+Dec. 31,
+2016
+Current assets
+%
+Dec. 31,
+Notes 4 to 26 to the Consolidated Financial Statements.
+Additional information about our asset situation is contained in
+Total equity and liabilities
+Current liabilities
+Non-current liabilities
+Equity
+2017
+-1,152
+540
+Cash provided by (used for) financing
+activities
+Business Report
+Customer Solutions' investments were slightly higher. In Sweden
+we invested significantly more in the maintenance, upgrade, and
+expansion of existing assets and in the heat distribution network.
+By contrast, the already-mentioned reassignment of investment
+projects in the Czech Republic from this segment to Energy Net-
+works led to a significant decline in this segment's investments. In
+addition, investments at E.ON Connecting Energies were lower.
+Energy Networks' investments were at the prior-year level.
+Investments of €345 million to upgrade and maintain networks
+in Sweden were €54 million above the prior-year figure. Invest-
+ments at East-Central Europe/Turkey were €89 million higher
+due principally to the reassignment of investment projects
+(such as grid maintenance, repair, and connections) in the Czech
+Republic from Customer Solutions to Energy Networks. By con-
+trast, Energy Networks' investments in Germany of €702 million
+were significantly lower than in the prior year (€846 million).
++4
+3,169
+3,308
+E.ON Group investments
+36
+8
+-7
+15
+14
+(PreussenElektra)
+Non-Core Business
++5
+3,146
+Other (divested operations)
+Investments at Renewables were €155 million higher. Onshore
+Wind/Solar's investments increased by €103 million, primarily
+because of expenditures for two large new-build projects (Rad-
+ford's Run and Bruenning's Breeze), which entered service at
+the end of 2017. Offshore Wind/Other's investments increased
+by a total of €52 million owing to expenditures in line with our
+stake in the Arkona project.
+Investments at Non-Core Business (nuclear energy operations
+in Germany) were €1 million below the prior-year level.
+Cash Flow
+-3,041
+-391
+Cash provided by (used for) investing
+activities
+3,974
+-2,235
+taxes
+Operating cash flow before interest and
+2,961
+-2,952
+Cash provided by (used for) operating
+activities of continuing operations
+(operating cash flow)
+2016
+2017
+€ in millions
+Cash Flow¹
+("VKE i.L."). Cash-effective investments and disposals of
+-€2.5 billion were slightly (-€0.2 billion) above the prior-year level
+of -€2.3 billion. Disposals consisted mainly of the upcoming sale
+of the operations of Hamburg Netz GmbH at Energy Networks
+in Germany and the sale of E.ON Värme Lokala Energilösningar
+AB at Customer Solutions in Sweden.
+Cash provided by investing activities of continuing operations of
+-€0.4 billion was substantially higher than the prior-year figure
+of -€3 billion. The +€2.6 billion change is mainly attributable to
+higher net cash inflow from the sale of securities and fixed
+deposits as well as the repayment of financial liabilities. Cash
+provided by investing activities of continuing operations was
+adversely affected by an increase in restricted funds to fulfill
+insurance obligations of Versorgungskasse Energie VVaG i.L.
+Cash provided by operating activities of continuing operations
+of -€3 billion was €5.9 billion below the prior-year level. The
+decline resulted primarily from the €10.3 billion payment made
+in July 2017 into Germany's public fund for financing nucle-
+ar-waste disposal. This was partially offset by cash inflow in
+conjunction with the refund of nuclear-fuel taxes, which, after a
+portion of the refund was passed on to co-owners, amounts to
+€3.1 billion. An improvement in working capital was another
+positive factor.
+28
+3,294
+17,403
+55,950
+Equity
+48,478
+Total assets
+15
+1
+obligations
+Asset surplus after offsetting of benefit
+9,029
+30
+Accrued expenses
+1,734
+4,664
+14,487
+11,071
+Current assets
+2,025
+Liquid funds
+1,349
+36
+Other receivables and assets
+Provisions
+51,914
+5,384
+2,578
+Equity, which most recently had been significantly reduced by
+the Uniper spinoff, was strengthened in the 2017 financial year.
+In addition to the aforementioned capital increase decided on by
+the Management Board and approved by the Supervisory Board
+on March 16, 2017, positive net income of €2,640 million con-
+tributed to this significant increase. The scrip dividend for the
+2016 financial year enabled E.ON SE to meet €107 million of its
+dividend obligations through the issuance of treasury shares.
+The payment into Germany's public fund for financing nuclear-
+waste disposal in July and the concomitant financing were of
+central importance to E.ON SE's financial position last year.
+Two significant items in this context were the capital increase
+of €1,349 million in March 2017 and the issuance of euro-
+denominated bonds with a total nominal value of €2,000 million.
+The reduction of liquid funds in the amount of €2,639 million
+was another factor related to this matter. On balance, E.ON SE
+recorded positive income from equity interests of €4,676 million.
+Profit transfers and loss-transfer obligations yielding this figure
+led to a decline in liabilities to affiliated companies.
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings, financial, and asset situation is affected by income
+from equity interests. The positive figure recorded for this item
+in 2017 reflects, in particular, profit transfers of €3,414 million
+from E.ON Energie AG and €2,118 million from E.ON Beteiligun-
+gen GmbH. The main countervailing factors were loss transfers
+of €752 million from E.ON Finanzanlagen GmbH, €56 million
+from E.ON Climate & Renewables GmbH, and €47 million from
+E.ON US Holding GmbH.
+51,914
+5
+845
+Total equity and liabilities
+2,127
+48,478
+Deferred income
+Other liabilities
+43,102
+34,350
+Liabilities to affiliated companies
+2,000
+Bonds
+970
+2
+8,089
+7,697
+Receivables from affiliated companies
+55,950
+36
+23,125
+25
+14,044
+62
+39,287
+100
+63
+2
+1,287
+12
+6,708
+100
+63,699
+100
+35,198
+63,699
+100
+Business Report
+37,382
+37,370
+Non-current assets
+37,368
+37,358
+Financial assets
+12
+equipment
+Intangible assets and property, plant and
+2017
+€ in millions
+14
+December 31
+2016
+Balance Sheet of E.ON SE (Summary)
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the Electricity and
+Gas Supply Act (Energy Industry Act).
+E.ON SE's Earnings, Financial, and Asset
+Situation
+38
+27
+Investments in core business
+-21
+3
+3.9
+4,955
+-26,320
+-19,248
+Economic net debt
+Adjusted EBITDA
+Debt factor
+-21,374
+-10,630
+4,939
+5.3
+-4,009
+-937
+-4,998
+390
+114
+FX hedging adjustment
+Net financial position
+Provisions for pensions
+Asset-retirement obligations¹
+-14,227
+-13,021
+-3,620
+4,327
+¹These figures are not the same as the asset-retirement obligations shown in our Consolidated
+Balance Sheet (December 31, 2017: -€11,673; December 31, 2016: -€22,515 million). This
+is because we calculate our economic net debt in part based on the actual amount of our
+obligations.
+34
+USD
+4.0
+3.9
+GBP
+4.7
+4.0
+EUR
+Business Report
+11.9
+Bonds¹
+December 31
+2016
+2017
+€ in billions
+Financial Liabilities
+The key objective of our funding policy is for E.ON to have access
+to a variety of financing sources at all times. We achieve this
+objective through different markets and debt instruments to
+maximize the diversity of our investor base. We issue bonds with
+tenors that give our debt portfolio a balanced maturity profile.
+Moreover, we combine large-volume benchmark issues with
+smaller issues that take advantage of market opportunities as
+they arise. External funding is generally carried out by E.ON SE,
+and the funds are subsequently on-lent in the Group. In the past,
+external funding was also carried out by our Dutch finance sub-
+sidiary, E.ON International Finance B.V. ("EIF"), under guarantee
+of E.ON SE. In May 2017 E.ON SE issued a total of €2 billion in
+bonds with maturities of 4.25, 7, and 12 years. In 2017 we also
+paid back in full bonds of €0.9 billion and roughly €1.8 billion
+that matured in May and October, respectively.
+Funding Policy and Initiatives
+10.7
+2,749
+Non-current securities
+Financial liabilities
+8,573
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+904
+1,427
+263
+Combined Group Management Report
+462
+-278
+-290
+-113
+-99
+Operating earnings attributable to non-controlling interests
+-478
+-613
+Adjusted net income
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+33
+5,160
+2016
+2017
+December 31
+€ in millions
+Liquid funds
+Economic Net Debt
+The change in our net financial position predominantly reflects
+the capital increase we conducted in March 2017 and our nega-
+tive operating cash flow. The latter includes positive effects
+from the refund of the nuclear-fuel tax and from our continuing
+operations as well as negative effects from the payment into
+Germany's public fund for financing nuclear-waste disposal.
+However, because we removed provisions for nuclear-waste
+management in the same amount from our balance sheets, the
+payment into the fund had no effect on our economic net debt.
+Compared with the figure recorded at December 31, 2016
+(€26.3 billion), our economic net debt declined significantly-by
+€7.1 billion-to €19.2 billion.
+Economic Net Debt
+For the medium term, we target a debt factor of 4.
+The interest-rate environment remained extremely low. In some
+cases this led to negative real interest rates on asset-retirement
+obligations. As in the prior year, our provisions therefore
+exceeded the amount of our asset-retirement obligations as
+they stood at year-end 2017 without factoring in discounting
+and cost-escalation effects. This limits the relevance of eco-
+nomic net debt as a key figure. We want economic net debt to
+serve as a useful key figure that aptly depicts our debt situation.
+In the case of material provisions affected by negative real
+interest rates, we therefore used the aforementioned actual
+amount of the obligation instead of the balance-sheet figure to
+calculate our economic net debt since the 2016 financial year.
+We manage E.ON's capital structure using our debt factor,
+which is equal to our economic net debt divided by adjusted
+EBITDA; it is therefore a dynamic debt metric. Economic net
+debt includes not only our financial liabilities but also our provi-
+sions for pensions and asset-retirement obligations.
+With our target capital structure we aim to sustainably secure a
+strong BBB/Baa rating.
+Our finance strategy focuses on E.ON's capital structure. Ensur-
+ing that E.ON has unrestricted access to capital markets is at
+the forefront of this strategy.
+Finance Strategy
+E.ON presents its financial condition using, among other finan-
+cial measures, economic net debt, debt factor, and operating
+cash flow.
+Financial Situation
+2.5
+2.8
+JPY
+0.2
+Investments
+2026+
+2025
+2024
+2023
+2022
+2021
+Investments in our core business and the E.ON Group's total
+investments in 2017 were above the prior-year level. We
+invested €3.1 billion in property, plant, and equipment and
+intangible assets (prior year: €3 billion). Share investments
+totaled €232 million versus €134 million in the prior year.
+2020
+2018
+1.0
+2.0
+3.0
+4.0
+40
+December 31, 2017
+2019
+Investments
++1-%
+-46
+Consolidation
+98
+53
+Corporate Functions/Other
++3
++14
+1,070
+1,225
+Renewables
+580
+595
+Customer Solutions
+1,419
+1,418
+Energy Networks
+2016
+2017
+€ in millions
+€ in billions
+-227
+Maturity Profile of Bonds and Promissory Notes Issued by E.ON SE and E.ON International Finance B.V.
+E.ON strives to maintain rating agencies and investors' trust by
+means of a clear strategy and transparent communications. To
+achieve this purpose, we hold E.ON debt investor updates in
+In addition to our DIP, we have a €10 billion European Commer-
+cial Paper ("CP") program and a $10 billion U.S. CP program
+under which we can issue short-term notes. As in the prior year,
+E.ON had no CP outstanding at year-end 2017.
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE and EIF's currently outstanding bonds
+were issued under our Debt Issuance Program ("DIP"). The DIP
+enables us to issue debt to investors in public and private place-
+ments. E.ON SE's DIP was last updated in March 2017 with a
+total volume of €35 billion, of which about €9 billion was utilized
+at year-end 2017. E.ON SE intends to renew the DIP in 2018.
+¹Includes private placements.
+14.2
+13.0
+Total
+CEO Letter
+E.ON also has access to a five-year, €2.75 billion syndicated
+revolving credit facility, which was concluded with 18 banks on
+November 13, 2017, and which includes two options to extend
+the facility, in each case for one year. This facility replaced the
+former €3.5 billion facility. This facility is undrawn on and
+rather serves as a reliable, ongoing general liquidity reserve for
+the E.ON Group. The 18 banks that were invited all participate
+in the credit facility and therefore constitute E.ON's core group
+of banks.
+1.9
+Commercial paper
+0.4
+0.4
+Promissory notes
+0.2
+0.2
+0.1
+Other currencies
+Other liabilities
+Alongside financial liabilities, E.ON has, in the course of its busi-
+ness operations, entered into contingencies and other financial
+obligations. These include, in particular, guarantees, obligations
+from legal disputes and damage claims, current and non-cur-
+rent contractual, legal, and other obligations. Notes 26, 27, and
+31 to the Consolidated Financial Statements contain more
+information about E.ON's bonds as well as liabilities, contingen-
+cies, and other commitments.
+E.ON's creditworthiness has been assessed by Standard &
+Poor's ("S&P") and Moody's with long-term ratings of BBB and
+Baa2, respectively. In March 2017 both S&P and Moody's
+downgraded E.ON's rating from BBB+ and Baal with a negative
+outlook, respectively. The outlook on both ratings is now stable.
+The new ratings reflect both agencies' anticipation that in the
+near to medium term E.ON will be able to maintain a leverage
+ratio as required for these ratings. E.ON's short-term ratings
+have been unchanged with A-2 (S&P) and P-2 (Moody's).
+E.ON SE Ratings
+35
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Stable
+A-2
+BBB
+Stable
+P-2
+Outlook
+Short term
+Long term
+Baa2
+Standard & Poor's
+Moody's
+major European financial centers, conference calls for debt
+analysts and investors, and annual informational meetings for
+our core group of banks.
+Sales
+3,549
+Strategy and Objectives
+1.25%
+Risk-free interest rate
+2016
+2017
+Cost of Capital
+Value added (ROCE - cost of capital) x annual average capital
+employed.
+|=
+Value added measures the return that exceeds the cost of capi-
+tal employed. It is calculated as follows:
+Annual average capital employed does not include the marking
+to market of other share investments. The purpose of excluding
+this item is to provide us with a more consistent picture of our
+ROCE performance.
+Annual average capital employed represents the interest-bear-
+ing capital invested in our operating business. It is calculated by
+subtracting non-interest-bearing available capital from
+non-current and current operating assets. Goodwill from acqui-
+sitions is included at acquisition cost, as long as this reflects its
+fair value. Changes to E.ON's portfolio during the course of the
+year are factored into capital employed.
+Analyzing Value Creation by Means of ROCE and Value Added
+ROCE is a pretax total return on capital and is defined as the
+ratio of our adjusted EBIT to annual average capital employed.
+Our review of the parameters in 2017 led us to increase our
+after-tax cost of capital from 4 percent to 4.7 percent, mainly
+because of a higher risk-free interest rate which reflected the
+development of the overall interest-rate environment. By contrast,
+the accompanying decline in the market-risk premium reduced
+the cost of equity. The table below shows the derivation of cost
+of capital before and after taxes.
+The cost of capital is determined by calculating the weighed-
+average cost of equity and debt. This average represents the
+market-rate returns expected by stockholders and creditors.
+The cost of equity is the return expected by an investor in E.ON
+stock. The cost of debt equals the long-term financing terms
+that apply in the E.ON Group. The parameters of the
+cost-of-capital determination are reviewed on an annual basis.
+Cost of Capital
+ROCE and Value Added
+Other Financial and Non-Financial Performance
+Indicators
+40
+Business Report
+The complete Financial Statements of E.ON SE, with an unqual-
+ified opinion issued by the auditor, PricewaterhouseCoopers
+GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, will be
+announced in the Bundesanzeiger. Copies are available on
+request from E.ON SE and at www.eon.com.
+Management's proposal for the use of net income available for
+distribution is based on the number of ordinary shares on
+March 12, 2018, the date the Financial Statements of E.ON SE
+were prepared.
+At the Annual Shareholders Meeting on May 9, 2018, manage-
+ment will propose that net income available for distribution be
+used to pay a cash dividend of €0.30 per ordinary share and
+remaining income available for distribution of €670 million to
+be brought forward as retained earnings.
+0.50%
+Tax expenses consist primarily of income taxes. Applying the
+minimum tax rate resulted in corporate taxes of €147 million, a
+solidarity surcharge of €8 million, and trade taxes of €167 million
+in 2017. Tax income for previous years amounted to €165 million.
+This item also includes an expense of €15 million for other taxes.
+Market premium¹
+6.75%
+31%
+27%
+Marginal tax rate
+2.6%
+2.4%
+Cost of debt before taxes
+9.7%
+10.3%
+Cost of equity before taxes
+31%
+27%
+Average tax rate
+6.70%
+7.50%
+Cost of equity after taxes
+0.92
+1.01
+Indebted beta factor²
+0.50
+0.50
+Debt-free beta factor
+6.25%
+Cost of debt after taxes
+expenditures of €157 million for consulting and auditing services,
+and income of €88 million from a necessary adjustment for
+certain environmental remediation obligations of predecessor
+entities.
+The decline in interest income is primarily attributable to the
+payment of €754 million to compensate for market-value differ-
+ences relating to the transfer of loans to E.ON Finanzholding SE &
+Co. KG for the purpose of restructuring liabilities within the Group.
+2016
+2017
+€ in millions
+Income Statement of E.ON SE (Summary)
+Information on treasury shares can be found in Note 19 to the
+Consolidated Financial Statements.
+This increased equity by the same amount. By contrast, equity
+was reduced by the use of prior-year net income available for
+distribution in the amount of €452 million.
+99
+39
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+27
+28
+55
+54
+18
+18
+2016
+Income from equity interests
+The negative figure recorded under other expenditures and
+income results primarily from expenditures of €291 million for
+third-party services, personnel expenditures of €163 million,
+4,676
+Interest income
+452
+1,320
+Net income available for distribution
+-425
+-1,320
+Net income transferred to retained earnings
+-6,969
+Income reduction from spinoff
+3,612
+Withdrawals from retained earnings
+3,357
+Withdrawal from capital reserve
+877
+2,640
+Net income
+-546
+-551
+-160
+-171
+Taxes
+-497
+Other expenditures and income
+-1,368
+2,134
+1.80%
+1.80%
+Share of equity
+1,370
+1,211
+5.8%
+6.4%
+10.4%
+10.6%
+3,083
+3,074
+29,546
+29,112
+6ROCE = adjusted EBIT divided by annual average capital employed.
+5Adjusted for non-operating effects, discontinued operations, and divested operations.
+4In order to better depict intraperiod fluctuations in average capital employed, annual average capital employed is calculated as the arithmetic average of the amounts at the beginning of the year
+and the end of the year.
+¹Depreciable non-current assets are included at their book value. Goodwill from acquisitions is included at acquisition cost, as long as this reflects its fair value.
+2Examples of other non-interest-bearing assets/liabilities include income tax receivables and income taxes as well as receivables and payables relating to derivatives.
+³Non-interest-bearing provisions mainly include current provisions, such as those relating to sales and procurement market obligations. They do not include provisions for pensions or nuclear-waste
+management.
+Value added7
+Cost of capital before taxes
+ROCE6
+Capital employed in continuing operations (annual average)4
+Adjusted EBIT5
+29,974
+28,250
+Capital employed in continuing operations (at year-end)
+Value added (ROCE - cost of capital) x annual average capital employed.
+-1,402
+Business Report
+Corporate Sustainability
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Direct link to the separate Combined Non-Financial Report 2017: www.eon.com/content/dam/eon/eon-com/Documents/en/sustainability-report/nonfinancial report 2017.pdf.
+Information about our sustainability approach, programs, and
+progress as well as detailed information about our emissions
+and climate-protection efforts can be found in our 2017 Sus-
+tainability Report and the CNFR, which were published online
+at eon.com/sustainabilityreport at the same time as this
+Annual Report.¹ The Sustainability Report and CNFR are not
+part of the Combined Group Management Report.
+These activities also support the achievement of the United
+Nations' Sustainable Development Goals. In particular, we help
+give access to affordable, reliable, sustainable, and clean
+energy and help protect the earth's climate.
+We foster diversity and inclusion in our workforce.
+We protect the health and safety of our customers and
+colleagues.
+We build and integrate renewable generating capacity.
+We help customers optimize their energy usage.
+We listen to our customers and treat them fairly.
+•
+•
+•
+We conduct our sustainability activities to address environ-
+mental, social, and governance issues in a balanced way. Our
+objective is to achieve continual improvement, thereby becom-
+ing a leading sustainability company in our industry. We have
+defined five material areas that are the focus of our Group-
+wide sustainability activities:
+Highlights in 2017
+investor organizations. It helps investors assess whether a com-
+pany adequately addresses climate change in its decisions and
+business processes. Furthermore, E.ON continues to be listed in
+both the European "Euronext Vigeo 120" indices.
+In 2017 we were again included in the RobecoSAM Sustainabil-
+ity Yearbook and, as a leading company, received a silver rating.
+In addition, CDP (formerly the Carbon Disclosure Project)
+awarded E.ON a high grade of A- for the quality, processes, and
+transparency of our reporting on our carbon emissions and cli-
+mate change. The CDP is one of the world's largest international
+Sustainability Ratings and Rankings
+In addition, this year we are disclosing, for the first time, a sepa-
+rate Combined Non-Financial Report ("CNFR"), which will be
+published as a separate document on our website. It too is based
+on the GRI SRS and describes how we address environmental,
+employee, and social matters as well as human rights and
+anti-corruption. The CNFR complies with the reporting require-
+ments of the German CSR Directive Implementation Act (Sec-
+tions 289b-e, Section 315b-c of the German Commercial Code).
+Many and diverse stakeholders-customers and suppliers, poli-
+cymakers and government agencies, employees and trade
+unions, non-governmental organizations and regional interest
+groups, equity analysts and investors-have high expectations of
+us and the entire energy industry. We have therefore conducted
+a systematic process at regular intervals since 2006. Its purpose
+is to identify our stakeholders' expectations of us. Our annual
+online Sustainability Report describes the issues that are mate-
+rial to our stakeholders and to us as a company as well as how
+we address these issues. Our reporting is based on the Global
+Reporting Initiative's most recent Sustainability Reporting Stan-
+dards ("GRI SRS") from 2016.
+42
+-1,541
+Non-interest-bearing provisions³
+-4,144
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+signals a higher risk than the risk level of the overall market; a beta factor of less than one
+signals a lower risk.
+2The beta factor is used as an indicator of a stock's relative risk. A beta of more than one
+with German treasury notes.
+¹The market premium reflects the higher long-term returns of the stock market compared
+5.80%
+6.40%
+Cost of capital before taxes
+4.00%
+4.70%
+Cost of capital after taxes
+55%
+50%
+Share of debt
+45%
+50%
+Summary of Financial Highlights and Explanations
+41
+ROCE Performance in 2017
+ROCE increased from 10.4 percent in 2016 to 10.6 percent in
+2017, primarily because of lower average capital employed.
+This resulted mainly from a reduction in the book value of prop-
+erty, plant, and equipment, in particular at Renewables, and the
+-4,893
+-4,929
+-5,688
+Other non-interest-bearing assets/liabilities, including deferred income and deferred tax assets²
+Current assets
+785
+794
+Inventories
+35,520
+34,684
+4,486
+2017
+4,339
+Shares in affiliated and associated companies and other share investments
+31,034
+30,345
+2016
+2017
+Goodwill, intangible assets, and property, plant, and equipment¹
+€ in millions
+ROCE
+The table below shows the E.ON Group's ROCE, value added,
+and their derivation.
+favorable development of working capital at our network busi-
+ness in Germany.
+Non-current assets
+¹Includes E.ON Business Services.
+Our commitment to transparency includes subjecting our sus-
+tainability performance to independent, detailed assessments
+by specialized agencies and capital-market analysts. The results
+of these assessments provide important guidance to investors
+and to us. They help us identify our strengths and weaknesses
+and further improve our performance.
+32
+More information about E.ON's compliance with Germany's
+Law for the Equal Participation of Women and Men in Leader-
+ship Positions in the Private Sector and the Public Sector can be
+found in the management's statement regarding this law.
+Many of these measures are already having an impact. Our
+progress is receiving recognition outside our company as well.
+For example, E.ON received the Total E-Quality Seal for exem-
+plary HR policies based on equal opportunity and diversity for
+the third year in a row.
+We conducted activities and initiatives throughout 2017 to
+enable all of our employees to experience difference and diver-
+sity and to raise their awareness of the contribution made by
+each individual. For example, we hosted an exhibition on dis-
+ability and commemorated International Women's Day across
+our company.
+47
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In 2017 we again implemented numerous measures to pro-
+mote diversity at E.ON. An important purpose of these mea-
+sures is to foster the career development of female managers.
+We set new, ambitious targets to increase the proportion of
+women in management positions. By year-end 2026, we want
+the proportion of women in management positions to be the
+same-32 percent-as the proportion of women in our overall
+workforce was at year-end 2016. Each unit has specific targets,
+and progress towards these targets is monitored at regular
+intervals. We also have Group-wide recruiting and hiring guide-
+lines for management positions. These guidelines require that
+least one male and one female must be on the short list for a
+vacant management position. Through these measures, the
+proportion of women in management positions rose from just
+over 11 percent in 2010 to 19.6 percent at year-end 2017 for
+the Group as a whole and from 9 percent to 15.3 percent for
+Germany. Our units have had support mechanisms for female
+managers in place for a number of years. These mechanisms
+include mentoring programs for female next-generation man-
+agers, coaching, unconscious-bias training, the provision of
+daycare, and flexible work schedules. Increasing the percentage
+of women in our internal talent pool is a further prerequisite for
+raising, over the long term, their percentage in management
+and top executive positions.
+Our approach to promoting diversity is holistic, encompassing
+all dimensions of diversity. It ensures equal opportunity for all
+employees and fosters and harnesses diversity in an individual
+way. However, we prioritize three dimensions: gender, age, and
+internationality.
+Diversity is a key element of E.ON's competitiveness. Diversity
+and an appreciative corporate culture promote creativity and
+innovation. This is a central aspect of the E.ON vision as well.
+E.ON brings together a diverse team of people who differ by
+nationality, age, gender, disability, religion, and/or cultural and
+social background. We foster and utilize diversity in specific
+ways and create an inclusive work environment. Diversity is a
+key success factor. Numerous studies have shown that hetero-
+geneous teams outperform homogenous ones. Diversity is
+equally crucial in view of demographic trends. Going forward,
+only those companies that embrace diversity will be able to
+remain attractive employers and be less affected by the short-
+age of skilled workers. In addition, a diverse workforce enables
+us to do an even better job of meeting our customers' needs
+and requirements. In 2006 we issued a Group Policy on Equal
+Opportunity and Diversity. In 2016 E.ON along with the SE
+Works Council of E.ON SE renewed this commitment to diver-
+sity. In 2008 E.ON publicly affirmed its commitment to fairness
+and respect by signing the German Diversity Charter, which
+now has about 2,700 signatories. E.ON therefore belongs to a
+large network of companies committed to diversity, tolerance,
+fairness, and respect.
+Diversity
+Our central Learning Management System recorded 119,893
+enrollments (prior year: 109,036) in formal learning offerings in
+2017. This equals 91,503 days (prior year: 72,805 days) of
+classroom training, which accounted for 60 percent (prior year:
+70 percent) of our total training offerings. On average, each
+employee received 2.1 days of training in 2017 (prior year:
+1.7 days). We do not record the duration of use of our online
+learning programs.
+46
+Business Report
+Following the announcement of the Phoenix reorganization pro-
+gram in March 2017, professional development at E.ON was
+also largely decentralized. Group HR supported the program
+with accompanying measures. For example, we adjusted the
+HR Online Learning App, our learning platform launched in 2016,
+and all its processes and data to meet the requirements of
+decentralization. We also introduced CrossKnowledge, a new
+Group-wide digital platform that makes selected e-Learning
+programs available to E.ON employees. Furthermore, HR sup-
+ported the Phoenix change process by making an online change
+support package available to managers and employees. The
+package contains tools that help them deal with the special
+challenges of restructuring. Leadership 2020, a program launched
+in 2016 to systematically prepare our leaders for the new lead-
+ership requirements in the digital age, continued in 2017, as did
+a streamlined version of our Learning Take-Away Days.
+Professional Development
+vision continue to be translated into specific behaviors. In addi-
+tion, we completely revised our talent landscape in order to give
+all parts of E.ON the flexibility to individually plan professional
+and career development and to provide them with tools to iden-
+tify talented employees.
+Workforce Figures
+In 2017 we also introduced grow@E.ON, our new Group-wide
+competency model, and embedded it into our processes. Feed-
+back is an important part of our corporate culture and is now
+provided through grow@E.ON, which includes solutions to sup-
+port our employees' development. Grow@E.ON also plays a
+role in filling vacancies, helping to ensure that the values of our
+At year-end 2017 the E.ON Group had 42,699 employees
+worldwide, slightly less (-1 percent) than at year-end 2016.
+E.ON also had 942 apprentices in Germany and 129 board
+members and managing directors worldwide.
+The number of employees at Customer Solutions increased
+slightly. Although the transfer of employees to Uniper, to
+non-consolidated companies, and to Energy Networks in the
+Czech Republic reduced Customer Solutions' headcount, this
+was more than offset by the filling of vacancies in Hungary and
+Romania and the hiring of staff for our service business in the
+United Kingdom and for our sales business in Italy.
+4,102
+3,078
+Corporate Functions/Other2
+1,082
+1,206
+Renewables
+19,106
+19,222
+Customer Solutions
+16,814
+17,281
+Energy Networks
++1-%
+2016
+2017
+Headcount
+December 31
+Employees¹
+Non-Core Business consists of our nuclear energy business in
+Germany. Its headcount decreased mainly because of retire-
+ments and the expiration of temporary employment contracts.
+This was partially counteracted by the hiring of apprentices
+who had completed their training.
+In particular, the transfer of E.ON Business Services employees
+to Uniper led to the significant decline in the number of
+employees at Corporate Functions/Other.
+The expansion of Renewables' business in the United States led
+to a slight increase in its headcount.
+Energy Networks' headcount increased principally because of
+the transfer of employees from Customer Solutions in the
+Czech Republic and the filling of vacancies (in Germany, pre-
+dominantly with apprentices who had completed their training).
+Core business
+The foundation of our strategic, needs-oriented talent manage-
+ment is the Management Review Process, which we conducted
+again in 2017. It helps ensure the continued professional devel-
+opment of managers and executives, our various units and job
+families, and the entire organization. It also creates transparency
+about our current talent situation and our needs for the future.
+E.ON's status as a top employer was again confirmed by "Top
+Employer" and other prestigious rankings.
+•
+where employees can achieve outstanding results and realize
+their potential
+where E. ON's values and leadership principles are put into
+practice
+•
+•
+we treat our employees. These principles are binding for the
+entire E.ON Group. At the same time, we provide support to
+E.ON units so that they can adopt these principles in a way that
+reflects their particular legal, cultural, and business environment.
+The goal of the People Commitments is to create a workplace:
+In 2017 the HR team and the E.ON SE Management Board
+developed and approved People Commitments to adopt an
+appropriate approach to decentralization, which is a basic
+principle of the Phoenix program. The People Commitments
+establish twelve principles that articulate our values and how
+In addition, we continued the process of digitizing our HR offer-
+ings. In particular, the basic components of grow@E.ON consist
+of modern applications harnessing the potential of advanced IT
+solutions, such as Cloud-based platforms that can be accessed
+from anywhere.
+introducing the YES! Awards, a way we recognize outstand-
+ing achievements as they happen and further motivate
+employees (Recognizing Performance).
+expanding our existing talent programs and establishing tal-
+ent boards to ensure that the personal development plans of
+our employees and managers are optimally tailored to
+E.ON's needs (Providing Opportunities)
+implementing grow@E.ON, a Group-wide framework for the
+personal and professional development of our employees
+and managers (Preparing for the Future)
+•
+•
+The three focus areas of our People Strategy are: Preparing Our
+People for the Future, Providing Opportunities, and Recognizing
+Performance. In 2017 we continued to bring these focus areas
+to life. The initiatives we implemented during the year included:
+We developed our People Strategy to enable E.ON to maintain
+continuity in times of change, independent of how the organiza-
+tion structures its business or how we adjust our strategic pri-
+orities in order to meet customer needs.
+People Strategy
+Employees
+43
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+32
+where employees can develop their skills and talents
+This recognition was one of the reasons we were able to attract
+outstanding talent, including recent university graduates. The
+E.ON Graduate Program remained a very compelling offer for
+graduates to join our company. Participants are assigned a
+mentor, receive special training, and gain experience during
+placements at their home E.ON unit as well as at other units in
+the same country and elsewhere.
+•
+•
+In 2017 E.ON again took a variety of successful steps to hire
+highly qualified people and to foster our employees' ongoing
+personal and professional development.
+Talent Management
+Consequently, the mechanisms are in place for mutually trustful,
+respectful, and transparent dialog between management and
+employee representatives at a European and national level. For
+the benefit of our employees and our company, management
+and employee representatives' shared objective is for this proven
+collaborative partnership to continue in the future.
+45
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Prior to E.ON's adoption of a functionally oriented management
+model, in 2014 management and the Group Works Council in
+Germany concluded the Agreement on Future Social Partnership
+in the Context of the Functionally Oriented Management Model.
+The agreement, which stipulates the principles of the social
+partnership at E.ON's operations in Germany, manifests a shared
+responsibility for the Company and its employees. It has proven
+its worth and remains to this day the foundation for a successful
+social partnership at E.ON.
+At a European level, E.ON management works closely with the
+SE Works Council of E.ON SE, which consists of representatives
+from all European countries in which E.ON operates. Under
+the SE Agreement, the SE Works Council of E.ON SE is informed
+and consulted about issues that transcend national borders.
+A special emphasis is placed on early and open discussion of
+employee matters.
+Collaborative Partnership with Employee Representatives
+Working with employee representatives as partners has a long
+tradition at E.ON. This collaborative partnership is integral to our
+corporate culture.
+In addition, the Company and the Group Works Council of E.ON
+SE concluded a Supplementary Agreement to the above-men-
+tioned Joint Declaration and Framework Agreement of the
+Management Board of E.ON SE, the Executive Committee of
+the SE Works Council of E.ON SE, and the Group Works Council
+of E.ON SE. The Supplementary Agreement affects E.ON
+employees in Germany. It named the negotiators for the negoti-
+ation of reconciliations of interests, created a mechanism for
+early voluntary termination, established measures to ensure
+business continuity for Group companies affected by Phoenix,
+and defined principles for filling vacancies.
+Phoenix too has been conducted in keeping with our well-es-
+tablished tradition of working with employee representatives
+and involving them early. A Joint Declaration and Framework
+Agreement of the Management Board of E.ON SE, the Executive
+Committee of the SE Works Council of E.ON SE, and the Group
+Works Council of E.ON SE was agreed on in November 2016
+and thus at a very early stage of Phoenix. This document will
+serve as the foundation for management and employee repre-
+sentatives to work together openly and constructively through-
+out Phoenix. A Project Council consisting of high-ranking
+employee representatives from the European SE Works Council
+of E.ON SE and the German Group Works Council of E.ON SE
+met periodically, was informed in advance of implementation
+measures, and was thus actively involved in the project. If the
+Project Council had suggestions about a measure, management
+discussed these suggestion with the council and evaluated and
+considered them before the measure was implemented.
+Phoenix and the Involvement of Employee Representatives
+E.ON designed the Phoenix program in 2016 to make itself fit
+for the future in the wake of the Uniper spinoff. The program
+aims to optimize E.ON's organizational setup and processes, to
+reduce bureaucracy and complexity, to delegate authority, and
+to make us faster, more agile, and closer to our customers. This
+will give more decision-making authority to customer-proximate
+functions and integrate support functions like IT and Procure-
+ment more closely with our operating business. This restructuring
+is aimed at eliminating tasks and thus up to 1,300 jobs across
+E.ON, including up to 1,000 in Germany. In 2017 we negotiated
+about 700 staff reductions with employee representatives. To
+achieve these staff reductions we concluded individual, mutu-
+ally acceptable agreements with employees. Negotiations for IT
+(outsourcing) and Procurement will be concluded in 2018. In
+the interest of all employees, new hiring will be actively limited
+during Phoenix.
+44
+Business Report
+The employees assigned to E.ON remained at the same legal
+entities; those assigned to Uniper were transferred to the
+respective Uniper companies.
+Completion of Employee Assignments under One2two
+As planned, the assignment of employees under the One2two
+program was completed in 2016. To ensure the continuity of IT
+support, however, E.ON Business Services was not divided until
+after the Uniper split. All employees of E.ON Business Services
+were assigned to E.ON or Uniper. In line with the rules worked out
+for One2two and by mutual agreement between management
+and local employee representatives, employees were transferred
+in two stages, on January 1 and July 1, 2017, respectively.
+that systematically ensures that we comply with the law and
+meet our customers' needs.
+that promotes a fair, diverse, and equitable work culture
+40,787
+•
+Non-Core Business
+Percentages at year-end
+Proportion of Female Employees
+Employees by Age
+The average E.ON Group employee was about 42 years old and
+had worked for us for about 14 years.
+As at the end of 2016, 32 percent of our employees were women
+at the end of 2017.
+Gender and Age Profile, Part-Time Staff
+702
+647
+710
+656
+475
+585
+475
+585
+1,967
+1,968
+1,999
+1,990
+2,387
+2,549
+2,401
+Percentages
+2,563
+2017
+30 and younger
+E.ON Group
+41,104
+13
+13
+Non-Core Business (PreussenElektra)
+33
+32
+45
+45
+Corporate Functions/Other¹
+21
+21
+Renewables
+51 and older
+43
+43
+Customer Solutions
+31 to 50
+20
+20
+Energy Networks
+2016
+4,992
+Core business
+5,000
+Other²
+USA
+Sweden
+Czechia
+Hungary
+Romania
+United Kingdom
+Germany
+Employees by Country¹
+At year-end 2017, 26,561 employees, or 62 percent of all staff,
+were working outside Germany, slightly more than the 60 percent
+at year-end 2016.
+Geographic Profile
+Business Report
+¹Does not include board members, managing directors, or apprentices.
+²Includes E.ON Business Services.
++3
+In ostos
+42,699
+2,034
+1,912
+(PreussenElektra)
+5,073
+E.ON Group
+¹Figures do not include board members, managing directors, or apprentices.
+2Includes Poland, Italy, Denmark, and other countries.
+43,138
+48
+³Full-time equivalent.
+5,648
+5,464
+5,711
+9,504
+9,850
+9,975
+16,695
+15,635
+17,239
+9,363
+2016
+Headcount
+16,138
+Dec. 31,
+Dec. 31,
+Dec. 31,
+5,081
+5,415
+FTE3
+Dec. 31,
+2017
+2016
+2017
+Our ERM is based on a centralized governance approach which
+defines standardized processes and tools covering the identifi-
+cation, evaluation, countermeasures, monitoring, and reporting
+of risks and chances. Overall governance is provided by Group
+Risk Management on behalf of the E.ON SE Risk Committee.
+preventive measures
+•
+•
+a management information system
+•
+an internal monitoring system
+Our risk management system in the broader sense has a total of
+four components:
+Scope
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+transparency on risk exposures in compliance with legal
+requirements including KonTraG, BilMoG, and BilReG.
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+meaningful information about risks and chances to the
+business, thereby enabling the business to derive individual
+risks/chances as well as aggregate risk profiles within the
+time horizon of the medium-term plan (three years)
+CEO Letter
+All risks and chances have an accountable member of the Man-
+agement Board, have a designated risk owner who remains
+operationally responsible for managing that risk/chance, and
+are identified in a dedicated bottom-up process.
+a risk management system in the narrow sense.
+55
+Report of the Supervisory Board
+Our IT systems are maintained and optimized by qualified E.ON
+Group experts, outside experts, and a wide range of technologi-
+cal security measures. In addition, the E.ON Group has in place
+a range of technological and organizational measures to counter
+the risk of unauthorized access to data, the misuse of data, and
+data loss.
+The E.ON internal management information system identifies
+risks early so that steps can be taken to actively address them.
+Reporting by the Controlling, Finance, and Accounting depart-
+ments as well as Internal Audit reports are of particular impor-
+tance in early risk detection.
+•
+company guidelines as well as work and process instructions
+•
+•
+regular facility and network maintenance and inspection
+⋅
+further refinement of our production procedures, processes,
+and technologies
+systematic employee training, advanced training, and quali-
+fication programs
+•
+•
+The following are among the comprehensive measures we take
+to address HSSE, HR, and other risks (also in conjunction with
+operational and IT risks):
+Managing Health, Safety, Security, and Environmental
+("HSSE"), Human Resources ("HR"), and Other Risks
+To limit operational and IT risks, we will continue to improve our
+network management and the optimal dispatch of our assets.
+At the same time, we are implementing operational and infra-
+structure improvements that will enhance the reliability of our
+generation assets and distribution networks, even under
+extraordinarily adverse conditions. In addition, we have factored
+the operational and financial effects of environmental risks into
+our emergency plan. They are part of a catalog of crisis and sys-
+tem-failure scenarios prepared for the Group by our incident
+and crisis management team.
+Managing Operational and IT Risks
+We attempt to minimize the operational risks of legal proceedings
+and ongoing planning processes by managing them appropriately
+and by designing appropriate contracts beforehand.
+We engage in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, we strive to conduct proper project
+management so as to identify early and minimize the risks
+attending our new-build projects.
+Managing Legal and Regulatory Risks
+We take the following general preventive measures to limit risks.
+General Measures to Limit Risks
+The purpose of the internal monitoring system is to ensure the
+proper functioning of business processes. It consists of organi-
+zational preventive measures (such as policies and work
+instructions) and internal controls and audits (particularly by
+Internal Audit).
+Our Enterprise Risk Management ("ERM") provides the man
+agement of all units as well as the E.ON Group with a fair and
+realistic view of the risks and chances resulting from their
+planned business activities. It provides:
+Decision-Making
+Internal Audit
+Enterprise Risk Management System in the
+Risk and Chances Report
+This Combined Group Management Report contains certain forward-looking statements based on E.ON management's current assumptions and forecasts and other currently available information.
+Various known and unknown risks, uncertainties, and other factors could lead to material differences between E.ON's actual future results, financial situation, development, or performance and the
+estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
+Indications relating to possible future effects resulting from the
+acquisition of innogy via a wide-ranging exchange of assets
+with RWE are currently not included, since the transaction is
+also subject to customary antitrust clearances.
+Our growth targets for E.ON and our strategy for achieving
+them will enable our core businesses to continue to actively
+shape tomorrow's energy world: by making electricity grids
+smarter, by designing individually tailored energy solutions for
+our customers, and by adding more renewables. Each of these
+businesses has a lot of potential. As we move forward, we
+intend to make clearer what E.ON will stand for in the future.
+The planned sale of our Uniper stake is another important step
+in the consolidation of our balance sheet. We now see an oppor-
+tunity to surpass our debt-reduction target and invest in growth.
+"Let's create a better tomorrow" and "Improve people's lives"
+are our promises for a better future. We want our customers to
+feel that they are in better hands with us than with our compet-
+itors. In addition, E.ON needs to be perceived as an even more
+attractive employer by current and future employees. To get
+there, we will continue to work together closely, including with
+our employee representatives.
+A tangible improvement in our safety performance will help us
+prevent serious accidents and, especially, fatalities among our
+employees and contractors. We will therefore conduct safety
+initiatives across E.ON. For example, all managers will receive
+special HSE training. Managers bear a great deal of responsibility
+for the health and safety of their employees.
+The business environment in the energy industry-regulatory
+interventions in Germany and the United Kingdom, the low-in-
+terest-rate environment, and increasingly fierce competition in
+our core markets, to name some examples-will continue to
+adversely affect our operating business. But E.ON can look into
+the future with optimism, even though we have forecast a
+decline in the E.ON Group's 2018 adjusted EBIT. We're on the
+right track. 2017 demonstrated this. We significantly reduced
+our debt and strengthened our equity. We can invest more. We
+can do so because we not only achieved our various financial
+targets, we surpassed them by a wide margin. These are our
+priorities in 2018:
+General Statement on E.ON's Future
+Development
+53
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+quality management, control, and assurance
+Report of the Supervisory Board
+CEO Letter
+Narrow Sense
+Objective
+Group
+Committee
+54
+Identify,
+Evaluate
+and
+Manage
+Consolidate
+Govern
+and
+Steer
+Local Risk Committees
+Non-Core Corporate
+Business Functions
+Renew-
+ables
+Networks
+Customer Energy
+Solutions
+Units and
+Departments
+Central Enterprise Risk Management
+Group
+Audit and Risk
+Committee
+Board
+E.ON SE
+Supervisory
+E.ON SE
+Management
+Board
+Bodies
+Risk
+•
+Risks and chances from investments and disposals
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+Legal and regulatory risks
+Risk Category
+Risk Category
+The table below shows the average annual aggregated risk
+position (aggregated risk position) across the time horizon of
+the medium-term plan for all quantifiable risks and chances
+(excluding tail events) for each risk category based on our most
+important financial key figure, adjusted EBIT:
+General Risk Situation
+Risk and Chances Report
+€10 million ≤ x < €50 million
+€50 million ≤ x < €200 million
+€200 million ≤ x < €1 billion
+x ≥ €1 billion
+x < €10 million
+High
+Major
+Moderate
+Medium
+Low
+Impact Classes
+The last step is to assign, in accordance with the 5 and 95 percent
+percentiles, the aggregated risk distribution to impact classes-
+low, moderate, medium, major, and high-according to their
+quantitative impact on adjusted EBIT. The impact classes are
+shown in the table below:
+We use the 5 and 95 percent percentiles of this aggregated
+risk distribution as the best case and worst case, respectively.
+Statistically, this means that with this risk distribution there is a
+90-percent likelihood that the deviation from our current earn-
+ings plan for adjusted EBIT will remain within these extremes.
+This statistical distribution makes it possible for our IT-based
+risk management system to conduct a Monte Carlo simulation
+of quantifiable risks/chances. This yields an aggregated risk dis-
+tribution that is quantified as the deviation from our current
+earnings plan for adjusted EBIT.
+We then evaluate the likelihood of occurrence of quantifiable
+risks and chances. For example, the wind may blow more or less
+hard at a wind farm. This type of risk is modeled with a normal
+distribution. Modeling is supported by a Group-wide IT-based
+system. Extremely unlikely events-those whose likelihood of
+occurrence is 5 percent or less-are classified as tail events. Tail
+events are not included in the simulation described below.
+E.ON uses a multistep process to identify, evaluate, simulate,
+and classify risks and chances. Risks and chances are generally
+reported on the basis of objective evaluations. If this is not
+possible, we use internal estimates by experts. The evaluation
+measures a risk/chance's financial impact on our current earnings
+plan while factoring in risk-reducing countermeasures. The
+evaluation therefore reflects the net risk.
+Credit, interest-rate, foreign-currency, tax, and asset-management risks and chances
+Worst Case (5 percent percentile)
+Major
+Risks and chances from the development of commodity prices and margins and from changes
+in market liquidity
+Operational and IT risks
+HSSE, HR, and other
+may also be final but major risks from obligations arising from
+regulatory requirements following the Uniper split. Besides
+these governmental risks and chances, this also includes the
+risk of litigation, fines, and claims, governance- and compli-
+ance-related issues as well as risks and chances related to con-
+tracts and permits. Changes to this environment can lead to
+considerable uncertainty with regard to planning and, under
+certain circumstances, to impairment charges but also can cre-
+ate chances. This results in a major risk position and a moderate
+chance position.
+The main focus of Renewables' investments will be on offshore
+wind farms in Europe (such as Rampion and Arkona) and
+onshore wind farms in the United States (such as Stella). Other
+investments will go toward solar projects.
+The policy, legal, and regulatory environment in which the E.ON
+Group does business is also a source of external risks, such as
+decisions by governments to phase out power generation using
+certain fuels. As a result of the economic and financial crisis in
+many EU member states, policy and regulatory intervention-
+such as additional taxes, additional reporting requirements (for
+example, EMIR, REMIT, MiFID2), price moratoriums, regulatory
+price reductions, and changes to support schemes for renew-
+ables-is becoming increasingly apparent. Such intervention
+could pose a risk to E.ON's operations in these countries. There
+Legal and Regulatory Risks
+E.ON's major risks and chances by risk category are described
+below. Also described are major risks and chances stemming
+from tail events as well as qualitative risks that would impact
+adjusted EBIT by more than €200 million. Risks and chances
+that would affect net income and/or cash flow by more than
+€200 million are included as well.
+Risks and Chances by Category
+The E.ON Group has major risk positions in the following cate-
+gories: legal and regulatory risks and market risks. As a result,
+the aggregate risk position of E.ON SE as a Group is major. In
+other words, the E.ON Group's average annual adjusted EBIT
+risk ought not to exceed -€200 million to -€1 billion in 95 percent
+of all cases.
+58
+Medium
+Low
+Major
+Low
+Moderate
+Best Case (95 percent percentil)
+Moderate
+Moderate
+Medium
+Major
+Low
+Finance and treasury risks
+Strategic risks
+Market risks
+Medium
+•
+Health, safety, and environmental risks and chances
+Policy and legal risks and chances, regulatory risks, risks from public consents processes
+management and monitoring of risks and chances by
+analyzing and evaluating countermeasures and preventive
+systems
+risk and chance analysis and evaluation
+•
+•
+• systematic risk and chance identification
+Our risk management system, which is the basis for the risks
+and chances described in the next section, encompasses:
+Enterprise Risk Management ("ERM")
+Note 30 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial instru-
+ments and hedging transactions. Note 31 describes the general
+principles of our risk management and applicable risk metrics
+for quantifying risks relating to commodities, credit, liquidity,
+interest rates, and currency translation.
+We use a Group-wide credit risk management system to sys-
+tematically measure and monitor the creditworthiness of our
+business partners on the basis of Group-wide minimum stan-
+dards. We manage our credit risk by taking appropriate measures,
+which include obtaining collateral and setting limits. The E.ON
+Group's Risk Committee is regularly informed about all credit
+risks. A further component of our risk management is a conser-
+vative investment strategy for financial funds and a broadly
+diversified portfolio.
+This category encompasses credit, interest-rate, currency, tax,
+and asset-management risks and chances. We use systematic
+risk management to monitor and control our interest-rate and
+currency risks and manage these risks using derivative and
+non-derivative financial instruments. Here, E.ON SE plays a cen-
+tral role by aggregating risk positions through intragroup trans-
+actions and hedging these risks in the market. Due to E.ON SE's
+intermediary role, its risk position is largely closed.
+Managing Finance and Treasury Risks
+We have comprehensive preventive measures in place to manage
+potential risks relating to acquisitions and investments. To the
+degree possible, these measures include, in addition to the rele-
+vant company guidelines and manuals, comprehensive due dili-
+gence, legally binding contracts, a multi-stage approvals process,
+and shareholding and project controlling. Comprehensive post-
+acquisition projects also contribute to successful integration.
+Managing Strategic Risks
+In order to limit our exposure to commodity price risks, we con-
+duct systematic risk management. The key elements of our risk
+management are, in addition to binding Group-wide policies
+and a Group-wide reporting system, the use of quantitative key
+figures, the limitation of risks, and the strict separation of func-
+tions between departments. Furthermore, we utilize derivative
+financial instruments that are commonly used in the market-
+place. These instruments are transacted with financial institu-
+tions, brokers, power exchanges, and third parties whose cred-
+itworthiness we monitor on an ongoing basis. Our local sales
+units and the remaining generation assets have set up local risk
+management under central governance standards to monitor
+these underlying commodity exposures and reduce them to
+acceptable levels through forward hedging.
+We use a comprehensive sales-management system and inten-
+sive customer management to manage margin risks.
+Managing Market Risks
+56
+Risk and Chances Report
+Should an accident occur despite the measures we take, we
+have a reasonable level of insurance coverage.
+As required by law, our ERM's effectiveness is reviewed regularly
+by Internal Audit. In compliance with the provisions of Section
+91, Paragraph 2, of the German Stock Corporation Act relating to
+the establishment of a risk-monitoring and early warning system,
+E.ON has a Risk Committee for the E.ON Group and for each of
+its segments. The Risk Committee's mission is to achieve a com-
+prehensive view of our risk exposure at the Group and unit level
+and to actively manage risk exposure in line with our risk strategy.
+IT and process risks and chances, risks and chances relating to the operation of generation
+assets, networks, and other facilities, new-build risks
+Our ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose book value in E.ON's
+Consolidated Financial Statements is greater than €50 million.
+We take an inventory of our risks and chances at each quarterly
+balance-sheet date.
+Risks and Chances
+Examples
+Finance and treasury risks
+Strategic risks
+Market risks
+HSSE, HR, and other
+Operational and IT risks
+Legal and regulatory risks
+Risk Category
+Risk Category
+57
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+following risk categories:
+Our IT-based system for reporting risks and chances has the
+Methodology
+To promote uniform financial reporting Group-wide, in 2017 we
+put in place a central, standardized system that enables effective
+and automated risk reporting. Company data are systematically
+collected, transparently processed, and made available for analy-
+sis both centrally and decentrally at the units.
+Investments at Customer Solutions will go toward metering,
+upgrade, and efficiency projects. We will also invest in our heat
+business in Sweden, the United Kingdom, and Germany.
+2017
+100
+E.ON Group
+1.7
+2.1
+Non-Core Business (PreussenElektra)
+5.5
+4.8
+Core business
+7.7
+4.6
+8.6
+8.1
+9.3
+Renewables
+6.0
+6.7
+Customer Solutions
+4.1
+1.7
+Corporate Functions/Other¹
+5.3
+¹Includes E.ON Business Services.
+The healthcare systems of the countries we operate in differ con-
+siderably in terms of their delivery of medical care, their health-
+insurance and pension systems, and their legal requirements for
+8.5
+821
+846
+2016
+2016
+2017
+Percentage of workforce
+Headcount
+Energy Networks
+At year-end
+Apprentices in Germany
+E.ON provides vocational training in more than 20 careers and
+work-study programs in order to meet its own needs for skilled
+workers and to take targeted action to address the consequences
+of demographic change. In 2017 the E.ON training initiative
+to combat youth unemployment helped 250 young people in
+Germany get a start on their careers through internships that
+prepare them for an apprenticeship as well as school projects
+and other programs. The number of participants declined from
+460 in 2016, owing mainly to the Uniper spinoff.
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 942 apprentices and
+work-study students in Germany at year-end 2017. This repre-
+sented 5.5 percent of E.ON's total workforce in Germany,
+slightly higher than at the end of the prior year (5.3 percent).
+Apprenticeships
+Company contributions to employee pension plans represent an
+important component of an employee's compensation package
+and have long had a prominent place in the E.ON Group. They
+are an important foundation of employees' future financial
+security and also foster employee retention. E.ON companies
+supplement their company pension plans with attractive pro-
+grams to help their employees save for the future.
+Compensation, Pension Plans, Employee Participation
+Attractive compensation and appealing fringe benefits are
+essential to a competitive work environment. The compensation
+plans of nearly all our employees contain an element that reflects
+the company's performance. This element is typically based on
+the same key figures that are also used in the Management
+Board's compensation plan.
+occupational health and safety. Nevertheless, the most com-
+mon illnesses resulting in an inability to work are the same in all
+countries: musculoskeletal disorders, psychological problems,
+and respiratory infections. The leading causes of death are the
+same as well: heart disease and cancer. E.ON's health manage-
+ment focuses on preventing these diseases. We strive to prevent
+psychological problems by providing mental-health training and
+by conducting employee-assistance programs. Check-ups and
+preventive care (fit-for-work examinations) by our company
+doctors help to reduce general and workplace-specific risks. We
+also conduct campaigns to raise awareness of diseases such as
+skin and bowel cancer and the importance of early cancer
+detection. Flu vaccination programs help to prevent dangerous
+respiratory illnesses. Together, these programs address the
+increasingly important issue of maintaining our employees'
+health and their ability to work.
+50
+Business Report
+Energy Networks
+2016
+2017
+Percentages
+11
+Customer Solutions
+5
+2017
+4
+2016
+Energy Networks
+Percentages
+Part-Time Rate
+A total of 3,395 employees, or 8 percent of all E.ON Group
+employees, were on a part-time schedule. Of these, 2,794, or
+82 percent, were women.
+49
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+PreussenElektra
+11
+8.4
+Renewables
+3
+Turnover Rate
+To continually improve their safety performance, our units have
+in place certified health, safety, and environment ("HSE") man-
+agement systems in accordance with international standards.
+They also develop HSE improvement plans based on a manage-
+ment review. In addition, all units were required to participate in
+a specially designed HSE leadership training module developed
+in the prior year and to review risks posed by new customer
+solutions.
+Unfortunately, three E.ON employees, one of whom was an
+apprentice, died on the job in 2017, and another suffered fatal
+injuries in a traffic accident. In addition, a contractor employee
+died while working for us. The accidents occurred in Germany,
+the United Kingdom, and Romania; regrettably, two employees
+died in Turkey.
+Occupational health and safety have the highest priority at
+E.ON. A key performance indicator ("KPI") for our safety is total
+recordable injury frequency ("TRIF")-which measures the
+number of reported fatalities, lost-time injuries, restricted-work
+injuries, and medical-treatment injuries that occur on the job-per
+million hours of work. Our TRIF figures also include E.ON com-
+panies that are not fully consolidated but over which E.ON has
+operational control. E.ON employees' TRIF in 2017 was 2.3, the
+same low level as in the prior year (2.5).
+Occupational Health and Safety
+The turnover rate resulting from voluntary terminations aver-
+aged 4.6 percent across the organization, lower than in the prior
+year (5.3 percent).
+¹Includes E.ON Business Services.
+8
+8
+E.ON Group
+5
+6
+Non-Core Business (PreussenElektra)
+8
+8
+Core business
+12
+12
+Corporate Functions/Other¹
+3
+20
+17
+0.8
+We anticipate that Customer Solutions' adjusted EBIT will be
+below the prior-year level. Earnings in the United Kingdom will
+be lower, primarily because of the intervention of the U.K. Com-
+petition and Markets Authority and restructuring expenditures.
+Earnings in Germany will be higher amid keen competition in
+the power and gas retail market owing to the non-recurrence of
+adverse items recorded in the prior year.
+52
+Forecast Report
+We expect Energy Networks' 2018 adjusted EBIT to be below
+the prior-year figure. Operating earnings in Germany will be
+stable. On balance, however, the positive regulatory one-off
+item recorded in 2017 relating to the delayed repayment of
+personnel costs and the deconsolidation of Hamburg Netz will
+lead to a substantial decline in earnings. The next regulatory
+period for gas networks in Romania will have an adverse impact
+as well. By contrast, improved power and gas tariffs in Sweden
+will have a positive impact.
+¹Adjusted for non-operating effects.
+3.1
+0.4
+-0.3
+Significantly above prior year
+Significantly below prior year
+2.8 to 3
+Corporate Functions/Other
+Non-Core Business
+E.ON Group
+0.5
+Above prior year
+0.5
+Below prior year
+2.0
+2017
+pro forma
+2018 (forecast)
+Below prior year
+Energy Networks
+Customer Solutions
+Renewables
+€ in billions
+We expect Renewables' adjusted EBIT to be above the prior-year
+level. In particular, Rampion offshore wind farm will contribute
+to earnings after it enters service.
+Adjusted EBIT¹
+We anticipate that adjusted EBIT at Corporate Functions/Other
+will improve and thus significantly exceed the previous year's
+level, primarily because of cost savings delivered by the Phoenix
+reorganization program as well as the restructuring of the pen-
+sion scheme in Germany.
+Anticipated Financial Situation
+3.8
+29
+1.1
+26
+1.0
+45
+1.7
+Percentages
+€ in billions
+Total
+Corporate Functions/Other
+Non-Core Business
+Energy Networks
+Customer Solutions
+Renewables
+Cash-Effective Investments: 2018 Plan
+Our medium-term plan calls for investments of €3.8 billion in
+2018. 2017 was a successful year for us. We reduced our debt
+faster than planned and strengthened our equity. E.ON can
+therefore invest more and achieve lasting growth. Our capital
+allocation will of course continue to be selective and disciplined.
+Planned Investments
+E.ON will propose a dividend of €0.30 per share for the 2017
+financial year. In conjunction with the planned acquisition of
+innogy via a wide-ranging exchange of assets with RWE we
+decided to propose a fix dividend of €0.43 per share for the
+2018 fiscal year.
+Dividend
+In addition to our investments planned for 2018 and the divi-
+dend for 2017, in 2018 we will make payments for bonds that
+have matured. Over the course of the year, these payments will
+be funded primarily with available liquid funds, the anticipated
+sale of Uniper SE stock, and the sale of securities.
+Planned Funding Measures
+At Non-Core Business we expect Preussen Elektra's adjusted
+EBIT to be significantly lower than the prior-year level due to
+declining sales prices.
+Energy Networks' investments will consist in particular of
+numerous individual investments to expand our intermediate-
+and low-voltage networks, switching equipment, and metering
+and control technology as well as other investments to ensure
+the reliable and uninterrupted transmission and distribution of
+electricity.
+Our forecast by segment:
+We expect the E.ON Group's 2018 adjusted EBIT to be between
+€2.8 and €3 billion and its 2018 adjusted net income to be
+between €1.3 and €1.5 billion. In addition, we expect to achieve
+a cash-conversion rate of at least 80 percent and ROCE of 8 to
+10 percent.
+E.ON Group
+3.3
+2.4
+70
+47
+Non-Core Business (Preussen Elektra)
+Core business
+5.6
+5.9
+901
+895
+2.0
+1.3
+63
+29
+Corporate Functions/Other
+Renewables
+Customer Solutions
+0.6
+942
+Indications relating to possible future effects resulting from the
+acquisition of innogy via a wide-ranging exchange of assets
+with RWE are currently not included, since the transaction is
+also subject to customary antitrust clearances.
+971
+5.3
+We continue to aim for our core businesses to actively shape
+tomorrow's energy world. At the beginning of 2018, we there-
+fore made a number of reclassifications that are already factored
+into our earnings forecast for 2018. The generation business in
+Turkey is now reported under Non-Core Business. Customer
+Solutions' heat business in Germany is now reported at its Other
+unit. In addition, costs for the ongoing expansion of our business
+of providing new digital products and services as well as innova-
+tive projects, which were previously allocated to Corporate
+Functions/Other, are now allocated to the appropriate operating
+units at Customer Solutions. We adjusted the prior-year figures
+accordingly.
+Our forecasts for the 2018 financial year continue to be influ-
+enced by the business environment in the energy industry.
+Examples include regulatory intervention in Germany and the
+United Kingdom. The current low-interest-rate environment and
+increasingly fierce competition in our core markets continue to
+put downward pressure on achievable returns.
+Forecast Earnings Performance
+Anticipated Earnings Situation
+The number of employees in the E.ON Group (excluding appren-
+tices and board members/managing directors) will increase
+slightly to meet the demands of the business.
+Employees
+The corresponding figures for the United States are 2.5 percent
+and 2.1 percent, whereas slightly weaker growth (2.1 percent
+and 1.9 percent) is forecast for the euro zone.
+The OECD forecasts a further increase in global economic
+growth in 2018 and 2019. It expects the global economy to
+grow by 3.7 percent in 2018 and by 3.6 percent in 2019.
+Macroeconomic Situation
+Business Environment
+Forecast Report
+51
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+5.5
+Preussen Elektra's business is substantially influenced by regu-
+lation. In general, regulation can result in risks for its remaining
+business activities. One example is the Fukushima nuclear acci-
+dent. Policy measures taken in response to such events could
+have a direct impact on the further operation of a nuclear power
+plant ("NPP") or trigger liabilities and significant payment obli-
+gations stemming from the solidarity obligation agreed on
+among German NPP operators. Furthermore, new regulatory
+requirements, such as additional mandatory safety measures,
+documentation and reporting.
+129
+2016
+2017
+2016
+2017
+2016
+Fourth quarter
+Sales
+2,028
+2,255
+2,122
+2,115
+1,938
+1,919
+6,088
+6,289
+Adjusted EBITDA
+45
+107
+135
+2017
+163
+2016
+Total
+In 2017 this segment's power and gas sales declined by
+7.3 billion kWh and 1.7 billion kWh, respectively.
+Power sales in Germany of 39.9 billion kWh were 14 percent
+below the prior-year level. Power sales to residential and small
+and medium enterprise ("SME") customers were lower due to
+keener competition. The decline in power sales to industrial and
+commercial ("I&C") customers resulted mainly from the transfer
+of the remaining wholesale customers to Uniper. Power sales to
+sales partners were lower, chiefly because of the end of deliveries
+to a municipal utility and changes in reporting. Power sales to
+the wholesale market were below the prior-year level due to the
+expiration of procurement contracts for wholesale customers,
+which were reassigned from E.ON to Uniper. Gas sales volume
+of 43.9 billion kWh increased by 7 percent. Gas sales to residen-
+tial and SME customers were lower due to keener competition.
+Gas sales to the wholesale market were higher due to a change
+in how we classify resales to Uniper, which in 2016 were
+included on the procurement side.
+Power sales in the United Kingdom decreased by 2.6 billion kWh.
+Declining customer numbers led to lower power sales to resi-
+dential and SME customers. A reduction in sales volume and in
+the number of customer facilities served was the reason for the
+decline in power sales to I&C customers. Gas sales decreased
+by 5.9 billion kWh. Lower customer numbers and, in part, a
+weather-driven decline in demand were responsible for the reduc-
+tion in gas sales to residential and SME customers. The reason
+for the decline in gas sales to I&C customers is the same as for
+power.
+Power sales at the Other unit (Sweden, Hungary, the Czech
+Republic, Romania, and Italy) rose by 1.7 billion kWh, primarily
+because of the acquisition of new customers in Romania and
+Hungary. By contrast, power sales in Italy declined owing to
+lower demand. Gas sales were 1.2 billion kWh higher. This is
+chiefly attributable to a weather-driven increase in sales vol-
+ume to residential and SME and I&C customers in Romania and
+slightly higher demand from I&C and sales-partner customers
+in Italy. By contrast, gas sales were lower in Sweden due to the
+end of deliveries to a large customer.
+Customer Numbers
+This segment had about 21.1 million customers at year-end 2017,
+fewer than the prior-year figure of 21.4 million. The number of
+customers in the United Kingdom declined from 7 to 6.8 million;
+power customers accounted most of the customer losses. In
+Germany they decreased from 6.1 million in 2016 to 5.9 million
+in 2017; of these, 5.1 million were power customers and
+0.8 million gas customers (2016: 5.3 million power customers,
+0.8 million gas customers). The positive trend in customer
+acquisition limited customer losses in an increasingly competi-
+tive marketplace.
+Business Segments
+66
+99
+Sales and Adjusted EBIT
+Customer Solutions' sales and adjusted EBIT decreased by
+€801 million and €286 million, respectively.
+Sales in Germany declined, primarily because of the expiration
+of procurement contracts of wholesale customers who were
+reassigned to Uniper. Lower power sales volume to residential
+customers and lower gas sales volume to residential and SME
+customers also had an adverse impact on sales. Adjusted EBIT
+was below the prior-year level, primarily because of extraordinary
+items. Earnings were also adversely affected by a reduction in
+gas sales prices in November 2016 and by persistently intense
+competitive and margin pressure.
+Lower sales volume due to regulatory intervention, declining
+customer numbers, reduced demand, unfavorable weather con-
+ditions, and currency-translation effects caused sales in the
+United Kingdom to decline by €586 million. Adjusted EBIT
+decreased owing to a weather-driven decline in sales volume
+and higher costs in conjunction with regulatory energy-effi-
+ciency obligations.
+Other's sales rose by €114 million, primarily because of a
+weather-driven increase in sales volume in Romania and the
+taking on of a company from Energy Networks in Sweden.
+Sales declined in Italy on lower price. Adjusted EBIT decreased
+by €57 million, principally because of higher power and gas
+procurement costs, primarily in Romania. In addition, lower
+sales prices and higher procurement costs adversely affected
+earnings in Hungary.
+Customer Solutions
+€ in millions
+Germany
+United Kingdom
+Other
+2017
+83
+77
+263
+460
+302
+351
+847
+1,110
+Adjusted EBIT
+118
+232
+250
+365
+158
+215
+526
+812
+Renewables
+454
+338
+337
+92
+353
+299
+192
+Adjusted EBITDA
+347
+Adjusted EBIT
+25
+88
+106
+138
+42
+38
+173
+Power and Gas Sales Volume
+264
+Sales
+7,452
+7,781
+7,205
+7,791
+6,910
+6,796
+21,567
+22,368
+Full year
+117
+65
+Consolidated Financial Statements
+0.5
+4.7
+4.0
+Total
+12.1
+13.1
+13.9
+15.2
+18.9
+18.8
+44.9
+47.1
+Full year
+Residential and SME
+23.9
+34.8
+39.8
+28.9
+28.0
+1.2
+85.6
+3.5
+Wholesale market
+2.4
+6.4
+6.9
+10.1
+10.7
+Sales partners
+1.5
+0.5
+1.5
+0.5
+Customer groups
+8.6
+9.6
+13.9
+15.2
+17.7
+18.3
+40.2
+43.1
+3.5
+91.7
+I&C
+5.0
+2.7
+4.0
+19.7
+16.0
+Total
+43.9
+40.9
+42.5
+48.4
+54.7
+53.5
+141.1
+142.8
+¹Excludes E.ON Connecting Energies.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+12.0
+17.0
+Wholesale market
+126.8
+5.0
+7.7
+8.6
+20.9
+20.2
+33.6
+33.8
+Sales partners
+2.2
+Summary of Financial Highlights and Explanations
+1.3
+1.3
+Customer groups
+26.9
+28.9
+42.5
+48.4
+52.0
+49.5
+121.4
+2.2
+Adjusted EBIT
+796
+785
+2016
+2017
+2016
+2017
+Total
+Offshore Wind/Other
+Onshore Wind/Solar
+Billion kWh
+Power Generation
+availability of 97.6 percent in 2017 surpassed the prior-year
+figure of 96.7 percent, in particular because of an improved
+performance by Amrumbank, Humber, and Robin Rigg.
+Offshore Wind/Other's owned generation increased compared
+with the prior year, mainly because of more favorable wind condi-
+tions and higher asset availability in the United Kingdom. Asset
+68
+Business Segments
+Onshore Wind/Solar's owned generation was 0.7 billion kWh
+higher. The principal factors in the United States were the com-
+missioning of Bruenning's Breeze and Radford's Run wind farms
+and the fact that in 2017 Colbeck's Corner wind farm was, for
+the first time, operational for the entire year. Output in Europe
+was higher due to favorable wind conditions, particularly in the
+United Kingdom, Sweden, Germany, and Poland. This unit's
+fourth-quarter owned generation rose year on year owing to
+favorable wind conditions in Poland and the United Kingdom
+and the addition of new wind farms in the United States. At
+94.6 percent, asset availability in 2017 was at the prior-year
+level of 94.2 percent.
+This segment's owned generation rose by 0.9 billion kWh.
+Power Generation and Sales Volume
+At year-end 2017 this segment's fully consolidated generating
+capacity rose by 13 percent to 4,716 MW (2016: 4,176 MW); its
+attributable generating capacity rose by 12 percent to 5,131 MW
+(2016: 4,574 MW). The principal reason for the increase was the
+commissioning of Bruenning's Breeze and Radford's Run wind
+farms at the end of 2017.
+Generating Capacity
+4,574
+2017
+5,131
+2016
+Owned generation
+Third parties
+Jointly owned power plants
+0.2
+0.3
+0.2
+0.3
+0.6
+0.8
+0.2
+0.3
+0.4
+0.5
+Purchases
+3.1
+3.8
+0.9
+1.2
+2.2
+2.6
+Fourth quarter
+4,176
+4,716
+4,103
+Fully Consolidated
+67
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Generating capacity
+Outside Germany
+Solar
+Wind
+Germany
+Solar
+Wind
+MW
+December 31
+Fully Consolidated and Attributable Generating Capacity
+Below we report on a number of important non-financial key
+figures for this segment, such as generating capacity, power
+generation, and power sales volume.
+Attributable
+2017
+2016
+2017
+4,652
+3,666
+4,194
+19
+27
+19
+15
+4,084
+4,625
+0.5
+3,647
+471
+479
+510
+522
+471
+479
+510
+522
+2016
+4,179
+0.4
+0.5
+0.4
+79
+90
+Adjusted EBITDA
+335
+474
+174
+238
+161
+236
+Sales
+Fourth quarter
+2016
+2017
+2016
+2017
+2016
+2017
+Total
+Offshore Wind/Other
+187
+133
+277
+212
+488
+486
+308
+299
+Adjusted EBITDA
+1,357
+1,604
+629
+677
+Onshore Wind/Solar
+728
+Sales
+Full year
+121
+206
+95
+151
+26
+55
+Adjusted EBIT
+927
+2.1
+€ in millions
+Offshore Wind/Other's sales decreased by €48 million. Adjusted
+EBIT was at the prior-year level. The positive effect of favorable
+wind conditions in the United Kingdom was offset by the non-
+recurrence of a book gain recorded in the prior year.
+1.4
+1.5
+Purchases
+11.6
+12.5
+3.4
+3.6
+8.2
+8.9
+110
+Owned generation
+Full year
+Power sales
+3.7
+4.6
+1.1
+1.5
+2.6
+3.1
+0.9
+0.7
+2.4
+2.1
+Onshore Wind/Solar's sales increased owing primarily to higher
+owned generation resulting from the commissioning of new
+wind farms and to favorable wind conditions in Poland, Germany,
+the United Kingdom, and Sweden. Its adjusted EBIT was signifi-
+cantly higher year on year.
+Renewables' sales and adjusted EBIT were up by €247 million
+and €24 million, respectively.
+Sales and Adjusted EBIT
+13.7
+14.9
+4.1
+4.5
+9.6
+10.4
+Renewables
+Power sales
+1.5
+1.4
+1.5
+Third parties
+0.7
+0.9
+0.7
+0.9
+Jointly owned power plants
+1.4
+1.4
+21.9
+I&C
+2016
+2017
+2016
+2017
+2016
+2017
+Total
+East-Central Europe/
+Turkey
+Sweden
+Germany
+62
+Energy Passthrough
+Below we report on a number of important non-financial key
+figures for this segment, such as power and gas passthrough,
+system length, and number of connections.
+Energy Networks
+Business Segments
+The overall risk situation of the E.ON Group's operating busi-
+ness at year-end 2017 remained nearly unchanged relative to
+year-end 2016. Although the average annual risk for the E.ON
+Group's adjusted EBIT is classified as major, from today's per-
+spective we do not perceive any risk position that could threaten
+the existence of the E.ON Group or individual segments.
+This category's overall risk and chance position is not major.
+Management Board's Evaluation of the Risk
+Situation
+In principle, E.ON could also encounter tax risks and chances; in
+individual cases, the chances could be high.
+Declining or rising discount rates could lead to increased or
+reduced provisions for pensions and asset-retirement obliga-
+tions, including non-current liabilities. This can create a high
+degree of uncertainty for E.ON.
+2017
+In addition, the price changes and other uncertainty relating
+to the current and non-current investments E.ON makes to
+cover its non-current obligations (particularly pension and
+asset-retirement obligations) could, in individual cases, be major.
+2016
+Fourth quarter
+Gas
+2.3
+2.1
+0.8
+0.7
+0.4
+0.3
+1.1
+1.1
+Line loss, station use, etc.
+54.4
+54.9
+9.5
+9.7
+9.8
+9.6
+35.1
+35.6
+Power
+Billion kWh
+E.ON faces earnings risks from financial liabilities and interest-
+rate derivatives that are based on variable interest rates and
+from asset-retirement obligations.
+E.ON's international business operations expose it to risks from
+currency fluctuation. One form of this risk is transaction risk,
+which arises when payments are made in a currency other than
+E.ON's functional currency. Another form of risk is translation
+risk, which arises when currency fluctuations lead to accounting
+effects when assets/liabilities and income/expenses of E.ON
+companies outside the euro zone are translated into euros and
+entered into our Consolidated Financial Statements. Currency-
+translation risk results mainly from our positions in U.S. dollars,
+pounds sterling, Swedish kronor, Czech krona, Romanian leus,
+Hungarian forints, and Turkish lira. Positive developments in for-
+eign-currency rates can also create chances for our operating
+business.
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results from
+non-delivery or partial delivery by a counterparty of the agreed
+consideration for services rendered, from total or partial failure
+to make payments owing on existing accounts receivable, and
+from replacement risks in open transactions. For example, E.ON's
+historical connection with Uniper continues to pose major, albeit
+unlikely, risks. In addition, in unlikely cases joint and several lia-
+bility for jointly operated power plants could lead to a high risk.
+60
+Risk and Chances Report
+General project risks can include a delay in projects and increased
+capital requirements. For our Renewables segment, a project
+delay could lead to the loss of government subsidies and cause
+potential partners to exit the project, which could, in unlikely
+cases, likewise lead to a high risk.
+Technologically complex production facilities are used in the
+production and distribution of energy, resulting in risks from
+procurement and logistics, construction, operations and main-
+tenance of assets as well as general project risks. In case of
+PreussenElektra, this also includes dismantling activities. Our
+operations in and outside Germany could experience unantici-
+pated operational or other problems leading to a power failure
+or shutdown and/or higher costs and additional investments.
+Operational failures or extended production stoppages of facilities
+or components of facilities as well as environmental damage
+could negatively impact our earnings, affect our cost situation,
+and/or result in the imposition of fines. In unlikely cases, this
+could lead to a high risk. Overall, it results in a medium risk posi-
+tion and a moderate chance position in this category.
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology. This includes
+risks and chances arising from information security.
+Operational and IT Risks
+Regulatory and legal risks attend our renewables business as
+well. For example, legal proceedings and approvals could pose a
+major risk.
+Renewables
+The operation of energy networks in Germany, in Sweden, but
+also in other countries is subject to a large degree of regulation.
+New laws and regulatory periods cause uncertainty in this busi-
+ness. For example, matters related to Germany's Renewable
+Energy Law, such as issues regarding solar energy, can cause
+temporary fluctuations in our cash flow and adjusted EBIT. This
+could create major chances and pose major risks.
+Energy Networks
+The E.ON Group's operations subject it to certain risks relating to
+legal proceedings, ongoing planning processes, and regulatory
+changes. For example, the current discussion about price caps in
+the United Kingdom is causing additional uncertainty in the mar-
+ketplace. But these risks also relate in particular to legal actions
+and proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of the
+transformation of Germany's energy system) an altered business
+climate in the power and gas business, price increases, alleged
+market-sharing agreements, and anticompetitive practices. This
+could pose a major and a high risk.
+Customer Solutions
+On December 6, 2016, Germany's Federal Constitutional Court
+in Karlsruhe ruled that the thirteenth amended version of Ger-
+many's Atomic Energy Act ("the Act") is fundamentally consti-
+tutional. The Act's only unconstitutional elements are that cer-
+tain NPP operators will be unable to produce their electricity
+allotment from 2002 and that it contains no mechanism for
+compensating operators for investments to extend NPP operat-
+ing lifetimes. Lawmakers have until June 30, 2018, to pass leg-
+islation that redresses these elements. In addition, NPPs need
+to have production rights, also known as a residual electricity
+allotment, in order to operate until their closure dates prescribed
+by law. These matters could yield a major chance and a major risk.
+In 2003, Section 6 of Germany's Atomic Energy Act granted
+consent for Unterweser NPP to store radioactive spent nuclear
+fuel in an on-site intermediate storage facility. Lawsuits were
+filed against the consent. The complainants asked that the
+court rescind the consent on the grounds that the storage facil-
+ity is not sufficiently protected against terrorist attacks. Settle-
+ment talks are currently under way between the complainants
+and the defendant agency. If the court rules definitively in favor
+of the complainants, nuclear fuel could not be removed from
+Unterweser NPP on schedule. This would significantly prolong
+dismantling, thereby leading to higher costs. This could pose a
+major risk.
+could lead to production outages and higher costs. In addition,
+there may be lawsuits that fundamentally challenge the opera-
+tion of NPPs. Regulation can also require an increase in provi-
+sions for dismantling. This could pose major risks for E.ON.
+59
+59
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+60
+We could also be subject to environmental liabilities associated
+with our power generation operations that could materially and
+adversely affect our business. In addition, new or amended
+environmental laws and regulations may result in increases in
+our costs.
+HSSE, HR, and Other Risks
+Health and safety are important aspects of our day-to-day busi-
+ness. Our operating activities can therefore pose risks in these
+areas and create social and environmental risks and chances. In
+addition, our operating business potentially faces risks resulting
+from human error and employee turnover. It is important that
+we act responsibly along our entire value chain and that we
+communicate consistently, enhance the dialog, and maintain
+good relationships with our key stakeholders. We actively con-
+sider environmental, social, and corporate-governance issues.
+These efforts support our business decisions and our public
+relations. Our objective is to minimize our reputational risks and
+garner public support so that we can continue to operate our
+business successfully. These matters do not result in a major
+risk or chance position.
+Finance and Treasury Risks
+The risk and chance position in this category was not major at the
+balance-sheet date.
+In the case of planned disposals, E.ON faces the risk of disposals
+not taking place or being delayed and the risk that E.ON receives
+lower-than-anticipated disposal proceeds. In addition, after
+transactions close we could face liability risks resulting from
+contractual obligations.
+achieve the returns we expect from any acquisition or invest-
+ment. It is also possible that we will not be able to realize our
+strategic ambition of enlarging our investment pipeline and that
+significant amounts of capital could be used for other opportu-
+nities. Furthermore, investments and acquisitions in new geo-
+graphic areas or lines of business require us to become familiar
+with new sales markets and competitors and to address the
+attending business risks.
+61
+Summary of Financial Highlights and Explanations
+1.6
+Combined Group Management Report
+Strategy and Objectives
+35.1
+E.ON Stock
+CEO Letter
+Our business strategy involves acquisitions and investments in
+our core business as well as disposals. This strategy depends in
+part on our ability to successfully identify, acquire, and inte-
+grate companies that enhance, on acceptable terms, our energy
+business. In order to obtain the necessary approvals for acquisi-
+tions, we may be required to divest other parts of our business
+or to make concessions or undertakings that affect our business.
+In addition, there can be no assurance that we will be able to
+Strategic Risks
+E.ON's portfolio of physical assets, long-term contracts, and
+end-customer sales is exposed to uncertainty resulting from
+fluctuations in commodity prices. This yields a major risk and a
+major chance, although only for Preussen Elektra. After the
+Uniper spinoff, E.ON established procurement capabilities for
+its sales business and thus ensured market access for its
+remaining energy production in order to manage the remaining
+commodity risks accordingly.
+The demand for electric power and natural gas is seasonal, with
+our operations generally experiencing higher demand during
+the cold-weather months of October through March and lower
+demand during the warm-weather months of April through
+September. As a result of these seasonal patterns, our sales and
+results of operations are higher in the first and fourth quarters
+and lower in the second and third quarters. Sales and results of
+operations for all of our energy operations can be negatively
+affected by periods of unseasonably warm weather during the
+autumn and winter months. We expect seasonal and weather-
+related fluctuations in sales and results of operations to con-
+tinue. Periods of exceptionally cold weather-very low average
+temperatures or extreme daily lows-in the fall and winter
+months can have a positive impact owing to higher demand for
+electricity and natural gas.
+higher customer churn rates, and temporary volume effects in
+the network business. This results in a major risk position and a
+major chance position in this category.
+Our units operate in an international market environment that
+is characterized by general risks relating to the business cycle.
+In addition, the entry of new suppliers into the marketplace
+along with more aggressive tactics by existing market partici-
+pants and reputational risks have created a keener competitive
+environment for our electricity business in and outside Ger-
+many, , which could reduce our margins. However, market devel-
+opments could also have a positive impact on our business.
+Such factors include wholesale and retail price developments,
+Market Risk
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia
+and Bavaria. E.ON SE can be held responsible for damage. This
+could lead to major individual risks that we currently only
+evaluate qualitatively.
+Report of the Supervisory Board
+31.8
+0.8
+1.0
+2016
+2017
+2016
+2017
+2016
+2017
+€ in millions
+Total
+East-Central Europe/
+Turkey
+Sweden
+Germany
+Energy Networks
+Sales at East-Central Europe/Turkey were €61 million above
+the prior-year level due to volume and price effects in the Czech
+Republic as well as higher sales volume in Hungary. Adjusted
+EBIT was €38 million higher. Wider margins and lower costs for
+services provided by our Customer Solutions segment led to
+higher earnings in the Czech Republic. Improved margins along
+with higher sales volume and a regulation-driven increase in
+prices led to higher earnings in Hungary as well. These positive
+developments were partially offset by lower earnings on our
+equity stake in Turkey, which principally reflect a book loss on
+the sale of a hydroelectric station and adverse currency-trans-
+lation effects. The earnings decline was partially counteracted
+by higher regulated prices.
+Sales in Sweden were slightly higher due to price factors.
+Adjusted EBIT was significantly higher thanks to an improved
+gross margin in the power business, which resulted from tariff
+increases.
+Sales in Germany were above the prior-year level, primarily
+because of higher costs charged by upstream power grid opera-
+tors that we passed through to customers. These passthrough
+costs do not affect earnings. By contrast, the amount of elec-
+tricity delivered onto our network in conjunction with the
+Renewable Energy Law (including generation management)
+was slightly lower. Sales in the gas business were roughly at the
+prior-year level. Adjusted EBIT of €1,050 million was signifi-
+cantly above the prior-year figure, primarily because of the
+delayed repayment of personnel costs due to regulatory reasons.
+Energy Networks' sales and adjusted EBIT rose by €1,098 mil-
+lion and €270 million, respectively.
+Sales and Adjusted EBIT
+63
+Summary of Financial Highlights and Explanations
+2017
+2016
+Fourth quarter
+Sales
+256
+262
+Adjusted EBIT
+756
+792
+182
+203
+151
+165
+Consolidated Financial Statements
+423
+Adjusted EBITDA
+3,685
+4,123
+475
+480
+293
+241
+2,917
+3,402
+424
+Strategy and Objectives
+Combined Group Management Report
+E.ON Stock
+1.1
+1.1
+3.7
+3.8
+Line loss, station use, etc.
+190.8
+193.4
+36.3
+37.3
+37.3
+36.9
+117.2
+119.2
+Power
+Full year
+49.5
+51.1
+16.7
+15.2
+2.8
+2.8
+7.7
+7.6
+Report of the Supervisory Board
+CEO Letter
+System length in East-Central Europe/Turkey-about 232,000
+kilometers for power and about 45,000 kilometers for gas-was
+at the prior-year level, as were the roughly 4.7 million connec-
+tion points for power and the roughly 1.3 million for gas.
+The length of our power system in Sweden was roughly
+136,900 kilometers, slightly higher than the prior-year figure
+of 136,400 kilometers. The length of the gas distribution
+system was 1,900 kilometers, less than the prior-year figure of
+2,100 kilometers. The number of connection points in the
+power distribution system was unchanged at roughly 1 million.
+System length in Germany-about 350,000 kilometers for
+power and about 60,000 kilometers for gas-was roughly at the
+prior-year level. At year-end we had about 5.7 million connection
+points for power and about 0.9 million for gas.
+System Length and Connections
+At East-Central Europe/Turkey, power passthrough in the Czech
+Republic, Romania, and Hungary was at the prior-year level.
+Power passthrough in Sweden was at the prior-year level,
+whereas gas passthrough declined owing to the closure of a
+power station in Malmö and the transfer of a company to
+Customer Solutions.
+Power passthrough and system losses in Germany of
+119.2 billion kWh and 3.8 billion kWh, respectively, were at the
+prior-year level. Gas passthrough was also at the prior-year level.
+Strategy and Objectives
+Power passthrough in 2017 was about 2.6 billion kWh above
+the prior-year level. Unlike in the prior year, power passthrough
+in 2017 includes the 110 kV level of the network. This also applies
+to system losses and station use. We adjusted the prior-year
+figures accordingly. Gas passthrough rose by 3.7 billion kW.
+156.0
+159.7
+44.3
+45.2
+4.9
+3.9
+106.8
+110.6
+Gas
+Power and Gas Passthrough
+E.ON Stock
+Consolidated Financial Statements
+CEO Letter
+9.4
+14.8
+15.1
+26.4
+27.6
+49.5
+52.1
+Sales partners
+0.4
+0.9
+2.2
+2.3
+2.6
+3.2
+Report of the Supervisory Board
+25.7
+28.3
+33.7
+36.3
+8.3
+50.3
+I&C
+57.6
+7.8
+7.0
+Total
+10.9
+12.3
+9.4
+9.9
+16.1
+15.4
+36.4
+37.6
+Full year
+Residential and SME
+17.0
+18.0
+18.9
+21.2
+21.7
+21.0
+60.2
+50.9
+109.7
+115.5
+2017
+2016
+2017
+2016
+2017
+2016
+2017
+2016
+Billion kWh
+Fourth quarter
+Residential and SME
+7.0
+8.2
+11.8
+12.8
+9.8
+10.9
+28.6
+31.9
+Total
+Other¹
+United Kingdom
+Germany
+Wholesale market
+14.2
+18.0
+1.1
+1.1
+9.5
+7.2
+24.8
+26.3
+1.9
+Total
+46.3
+34.8
+37.4
+59.8
+58.1
+134.5
+141.8
+¹Excludes E.ON Connecting Energies.
+Gas Sales
+39.9
+2.8
+Customer groups
+0.5
+Adjusted EBIT
+1,050
+894
+474
+398
+417
+379
+1,941
+1,671
+Business Segments
+Customer Solutions
+Below we report on a number of important non-financial key
+figures for this segment, such as power and gas sales volume
+and customer numbers.
+Power Sales
+64
+Germany
+United Kingdom
+Other¹
+Total
+2017
+2,679
+2016
+2,927
+654
+133
+109
+524
+475
+Full year
+Sales
+0.4
+13,205
+1,072
+1,029
+1,719
+1,658
+16,990
+15,892
+Adjusted EBITDA
+1,641
+1,507
+632
+562
+610
+2017
+14,199
+2017
+Sales partners
+0.1
+430
+0.1
+0.5
+0.6
+0.6
+0.7
+Customer groups
+13.2
+6.4
+8.9
+9.5
+13.3
+13.5
+28.6
+Wholesale market
+4.5
+4.7
+2016
+7.6
+12.2
+30.6
+6.9
+7.0
+2017
+2016
+Billion kWh
+Fourth quarter
+Residential and SME
+4.7
+5.1
+5.2
+2016
+5.9
+5.7
+3.7
+1.6
+I&C
+2.4
+15.8
+5.9
+16.7
+3.8
+1.1
+0.5
+0.8
+Third parties
+0.3
+0.3
+Jointly owned power plants
+Owned generation
+Purchases
+9.3
+8.6
+Fourth quarter
+553
+506
+Adjusted EBIT
+2016
+1.4
+Total power procurement
+Owned generation
+10.1
+Third parties
+2017
+1.3
+1.3
+Jointly owned power plants
+4.3
+9.9
+10.0
+Purchases
+27.5
+Full year
+10.1
+9.9
+Power sales
+-0.1
+Station use, line loss, etc.
+32.4
+Billion kWh
+Non-Core Business
+654
+This segment's sales were up €47 million year on year. The
+adverse impact of lower sales prices and the expiration of
+supply contracts was more than offset by higher sales volume
+to Uniper and one-off items, in particular in conjunction with a
+legal proceeding. The decline in fourth-quarter sales is attrib-
+utable to lower sales prices.
+Sales and Adjusted EBIT
+This segment's power procured (owned generation and pur-
+chases) of 37.4 billion kWh was at the prior-year level. The
+reduction in owned generation is principally attributable to the
+unplanned extension of the overhaul at Brokdorf nuclear power
+station due to a thicker oxide layer on some fuel elements.
+The increase in power procured reflects the purchase of power
+to meet delivery obligations. Fourth-quarter power procured
+was also at the prior-year level. Power sales in 2017 and in the
+fourth quarter of 2017 were at the prior-year level as well.
+Power Generation and Sales Volume
+Fully Consolidated and Attributable Generating Capacity
+PreussenElektra's fully consolidated generating capacity declined
+to 4,150 MW from the prior year owing to the scheduled
+decommissioning of Gundremmingen B nuclear power station
+on December 31, 2017, as stipulated by Germany's Atomic
+Energy Act. Its attributable generating capacity declined to
+3,808 MW for the same reason.
+Below we report on a number of important non-financial key
+figures for this segment, such as generating capacity, power
+generation, and power sales volume.
+Non-Core Business (PreussenElektra)
+Adjusted EBIT of €506 million was below the prior-year figure
+of €553 million. The adverse impact of the unplanned outage
+at Brokdorf, lower sales prices, and higher depreciation
+charges on fixed assets was partially offset by the expiration
+of the nuclear-fuel tax at the end of 2016 and by one-off items.
+The decline in fourth-quarter adjusted EBIT is attributable to
+lower sales prices.
+69
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+8.6
+69
+€ in millions
+Fourth quarter
+PreussenElektra
+2017
+Adjusted EBITDA
+PreussenElektra
+1,538
+1,585
+Sales
+Full year
+Power Generation
+208
+149
+Adjusted EBIT
+234
+157
+Adjusted EBITDA
+470
+355
+Sales
+2016
+644
+3.0
+by shareholders who hold more than 25 percent of the Com-
+pany's voting rights.
+37.4
+Integrity
+Persons with executive responsibilities, in particular members
+of E.ON SE's Management Board and Supervisory Board, and
+persons closely related to them, must disclose specific dealings
+in E.ON stock or bonds, related derivatives, or other related
+financial instruments pursuant to Article 19 of the EU Market
+Abuse Regulation in conjunction with Section 26, Paragraph 2, of
+the German Securities Trading Act. Such dealings that took place
+in 2017 have been disclosed on the Internet at www.eon.com.
+Managers' Transactions
+76
+Corporate Governance Report
+E.ON views good corporate governance as a central foundation
+of responsible and value-oriented management, efficient
+collaboration between the Management Board and the Super-
+visory Board, transparent disclosures, and appropriate risk
+management.
+Relevant Information about Management Practices
+Corporate Governance
+The financial calendar and ad hoc statements are available on
+the Internet at www.eon.com.
+In addition to the Company's periodic financial reports, the
+Company issues ad hoc statements when events or changes
+occur at E.ON SE that could have a significant impact on the
+price of E.ON stock.
+A financial calendar lists the dates on which the Company's
+financial reports are released.
+at www.eon.com.
+This declaration and those of the previous five years are contin-
+uously available to the public on the Company's Internet page
+(Chairman of the Management Board of E.ON SE)
+For the Management Board of E.ON SE
+Dr. Johannes Teyssen
+(Chairman of the Supervisory Board of E.ON SE)
+Dr. Karl-Ludwig Kley
+For the Supervisory Board of E.ON SE
+Numerous events for financial analysts in and outside Germany.
+•
+Our actions are grounded in integrity and a respect for the law.
+The basis for this is the Code of Conduct established by the Man-
+agement Board. It emphasizes that all employees must comply
+with laws and regulations and with Company policies. These
+relate to dealing with business partners, third parties, and govern-
+ment institutions, particularly with regard to antitrust law, the
+granting and accepting of benefits, the involvement of intermedi-
+aries, and the selection of suppliers and service providers. Other
+rules address issues such as the avoidance of conflicts of interest
+(such as the prohibition to compete, secondary employment,
+material financial investments) and handling company informa-
+tion, property, and resources. The policies and procedures of our
+compliance organization ensure the investigation, evaluation, ces-
+sation, and punishment of reported violations by the appropriate
+Compliance Officers and the E.ON Group's Chief Compliance Offi-
+cer. Violations of the Code of Conduct can also be reported anony-
+mously (for example, by means of a whistleblower report). The
+Code of Conduct is published on www.eon.com.
+Description of the Functioning of the Management Board and
+Supervisory Board and of the Composition and Functioning of
+Their Committees
+Management Board
+The E.ON SE Management Board manages the Company's
+businesses, with all its members bearing joint responsibility for
+its decisions. It establishes the Company's objectives, sets its
+fundamental strategic direction, and is responsible for corpo-
+rate policy and Group organization.
+•
+The E.ON SE Supervisory Board had eighteen members in the
+2017 financial year. Pursuant to E.ON SE's Articles of Associa-
+tion, it is composed of an equal number of shareholder and
+employee representatives. The shareholder representatives are
+elected by the shareholders at the Annual Shareholders Meet-
+ing; the Supervisory Board nominates candidates for this pur-
+pose. As a rule, the Annual Shareholders Meeting decides on
+the elections by individual vote. Pursuant to the agreement
+regarding employees' involvement in E.ON SE, the other cur-
+rently nine members of the Supervisory Board are appointed by
+the SE Works Council, with the provision that at least three dif-
+ferent countries are represented and one member is selected by
+a trade union that is represented at E.ON SE or one of its sub-
+sidiaries in Germany. Persons are not eligible as Supervisory
+Board members if they:
+Supervisory Board
+A Risk Committee ensures the correct application and imple-
+mentation of the legal requirements of Section 91 of the Ger-
+man Stock Corporation Act ("AktG"). This committee monitors
+the E.ON Group's risk situation and its risk-bearing capacity and
+devotes particular attention to the early-warning system to
+ensure the early identification of going-concern risks in order to
+avoid developments that could potentially threaten the Group's
+continued existence. In this context, the Risk Committee also
+deals with risk-mitigation strategies (including hedging strate-
+gies). In collaboration with relevant departments, the committee
+ensures and refines the implementation of, and compliance with,
+the Company's reporting policies with regard to commodity
+risks, credit risks, and enterprise risk management.
+The Management Board has established a Disclosure Commit-
+tee and an Ad Hoc Committee for issues relating to financial dis-
+closures. These committees ensure that such information is dis-
+closed in a correct and timely fashion.
+77
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Telephone conferences held on release of the quarterly Interim
+Reports and the Annual Report
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+The Management Board has no board committees but has estab-
+lished a number of committees that support it in the fulfillment of
+its tasks. The members of these committees are senior represen-
+tatives of various departments of E.ON SE whose experience,
+responsibilities, and expertise make them particularly suited for
+their committee's tasks. Among these committees are the follow-
+ing:
+Members of the Management Board are also required to promptly
+report conflicts of interest to the Executive Committee of the
+Supervisory Board and to inform the other members of the Man-
+agement Board. Members of the Management Board may only
+assume other corporate positions, particularly appointments to
+the supervisory boards of non-Group companies, with the con-
+sent of the Executive Committee of the Supervisory Board. There
+were no conflicts of interest involving members of the E.ON SE
+Management Board in 2017. Any material transactions between
+the Company and members of the Management Board, their rela-
+tives, or entities with which they have close personal ties require
+the consent of the Executive Committee of the Supervisory Board.
+No such transactions took place in the reporting period.
+manner.
+The Chairperson of the Management Board informs, without
+undue delay, the Chairperson of the Supervisory Board of import-
+ant events that are of fundamental significance in assessing the
+Company's situation, development, and management and of any
+defects that have arisen in the Company's monitoring systems.
+Transactions and measures requiring the Supervisory Board's
+approval are also submitted to the Supervisory Board in a timely
+The Management Board regularly reports to the Supervisory
+Board on a timely and comprehensive basis on all relevant issues
+of strategy, planning, business development, risk situation, risk
+management, and compliance. It also submits the Group's invest-
+ment, finance, and personnel plan for the next financial year as
+well as the medium-term plan to the Supervisory Board, generally
+at the last meeting of each financial year.
+Someone who has reached the general retirement age should
+not be a member of the Management Board. The Management
+Board has in place policies and procedures for the business it
+conducts and, in consultation with the Supervisory Board, has
+assigned task areas to its members.
+In 2017 the Management Board consisted of five members ini-
+tially and, after the end of Mr. Sen's service, effective April 1,
+2017, of four members. It had one Chairman. No Management
+Board member has more than three supervisory board member-
+ships in listed non-Group companies or on the supervisory bodies
+of non-Group companies that require a similar commitment.
+E.ON Stock
+⋅
+•
+Essen, December 18, 2017
+Settlement Agreements between the Company and
+Management Board Members or Employees in the Case
+of a Change-of-Control Event
+Debt issued since 2007 contains change-of-control clauses
+that give the creditor the right of cancellation. This applies, inter
+alia, to bonds issued by E.ON SE and E.ON International Finance
+B.V. and guaranteed by E.ON SE, promissory notes issued by
+E.ON SE, and other instruments such as credit contracts. Granting
+change-of-control rights to creditors is considered good corpo-
+rate governance and has become standard market practice.
+Further information about financial liabilities is contained in the
+section of the Combined Group Management Report entitled
+Financial Situation and in Note 26 to the Consolidated Financial
+Statements.
+Significant Agreements to which the Company Is a Party That
+Take Effect on a Change of Control of the Company Following a
+Takeover Bid
+In 2017 E.ON SE shareholders were again given the option of
+exchanging a portion of their €0.21 dividend for shares of E.ON SE
+stock. Shareholders could exchange €0.15 of their per share
+dividend. The remaining €0.06 was paid out in cash or, if neces-
+sary, withheld to cover tax obligations. Shareholders' formal
+subscription rights were excluded. The acceptance rate was
+about 33 percent. A total of 14,653,833 shares of stock were
+used for the scrip dividend and issued to shareholders.
+Scrip Dividend in 2017
+At the Annual Shareholders Meeting of May 10, 2017, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in
+the amount of €175 million, which is authorized until May 9,
+2022. The conditional capital increase will be implemented
+only to the extent that holders of option or conversion rights or
+persons obliged to conversion under option or convertible
+bonds, profit-participation rights or profit-participating bonds
+issued or guaranteed by the Company or a Group company of
+the Company as defined in Section 18 AktG exercise their
+option or conversion rights or, if they are obliged to conversion
+or exercise of the option, fulfill their conversion obligation or,
+as the case may be, their obligation to exercise the option. The
+conditional capital increase was not utilized.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 10, 2017, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 9, 2022, the Company's share capital by a total of up
+to €460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in
+kind (authorized capital pursuant to Sections 202 et seq. AktG,
+Authorized Capital 2017). Subject to the Supervisory Board's
+approval, the Management Board is authorized to exclude share-
+holders' subscription rights. Authorized Capital 2017 was not
+utilized.
+In each case, the Management Board will inform the Share-
+holders Meeting about the utilization of the aforementioned
+authorization, in particular about the reasons for and the purpose
+of the acquisition of treasury shares, the number of treasury
+shares acquired, the amount of the registered share capital
+attributable to them, the portion of the registered share capital
+represented by them, and their equivalent value.
+In addition, the Management Board is authorized to cancel trea-
+sury shares, without such cancellation or its implementation
+requiring an additional resolution by the Shareholders Meeting.
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, separately or collectively,
+including with respect to treasury shares acquired by affiliated
+companies or companies majority-owned by the Company or by
+third parties for their account or the Company's account.
+74
+Disclosures Regarding Takeovers
+to be used for the purpose of a scrip dividend where share-
+holders may
+choose to contribute their dividend entitlement
+to the Company in the form of a contribution in kind in
+exchange for new shares.
+to be offered, with or without consideration, for purchase
+and transferred to individuals who are or were employed
+by the Company or one of its affiliates as well as to board
+members of affiliates of the Company
+or
+to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+to be sold and transferred against contribution in kind
+to be sold and transferred against cash consideration
+•
+In the event of a premature loss of a Management Board posi-
+tion due to a change-of-control event, the service agreements
+of Management Board members entitle them to severance and
+settlement payments (see the detailed presentation in the
+Compensation Report).
+A change-of-control event would also result in the early payout
+of virtual shares under the E.ON Share Matching Plan and the
+E.ON Performance Plan.
+CEO Letter
+Report of the Supervisory Board
+Annual press conference
+•
+Annual Reports
+Total power procurement
+Interim Reports
+•
+E.ON SE issues reports about its situation and earnings by the
+following means:
+Transparency is a high priority of the Management Board and
+Supervisory Board. Our shareholders, all capital market partici-
+pants, financial analysts, shareholder associations, and the media
+regularly receive up-to-date information about the situation of,
+and any material changes to, the Company. We primarily use the
+Internet to help ensure that all investors have equal access to
+comprehensive and timely information about the Company.
+Transparent Management
+. Press releases
+In the past financial year the Management Board and Super-
+visory Board paid close attention to E.ON's compliance with the
+German Corporate Governance Code's recommendations and
+suggestions. They determined that E.ON SE fully complies with
+all of the Code's recommendations and with nearly all of its
+suggestions.
+The Board of Management and the Supervisory Board hereby
+declare that E.ON SE will comply in full with the recommen-
+dations of the "Government Commission German Corporate
+Governance Code," dated February 7, 2017, published by the
+Federal Ministry of Justice and for Consumer Protection in the
+official section of the Federal Gazette (Bundesanzeiger).
+Declaration Made in Accordance with Section 161 of the
+German Stock Corporation Act by the Management Board and
+the Supervisory Board of E.ON SE
+Corporate Governance Declaration in Accor-
+dance with Section 289f and Section 315d of
+the German Commercial Code
+75
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+The Board of Management and the Supervisory Board further-
+more declare that E.ON SE has been in compliance in full with
+the recommendations of the "Government Commission German
+Corporate Governance Code," dated May 5, 2015, published by
+the Federal Ministry of Justice and for Consumer Protection in
+the official section of the Federal Gazette (Bundesanzeiger)
+since the last declaration on December 16, 2016.
+•
+are already supervisory board members in ten commercial
+companies that are required by law to form a supervisory
+board,
+are legal representatives of an enterprise controlled by the
+Company,
+5/5
+9/10
+6/6
+8/8
+6/6
+5/5
+6/6
+6/6
+6/8
+6/6
+10/10
+6/6
+Schulz, Fred
+Luha, Eugen-Gheorghe
+Hansen, Thies
+Gila, Tibor
+Broutta, Clive
+Scheidt, Andreas
+7/84
+Šmátralová, Silvia
+Wallbaum, Elisabeth
+Zettl, Albert
+6/6
+Supervisory Board membership shall usually be limited to no
+more than three full terms of office (15 years).
+Members of the Supervisory Board must not have seats on the
+boards of, or act as consultants for, any of the Company's
+major competitors.
+The Supervisory Board shall not include more than two former
+members of the Board of Management.
+company affiliated with the latter, where such relationship
+may give rise to a material and not merely temporary conflict
+of interests. If the total number of Supervisory Board members
+is 12, a reasonable number of independent members will be
+eight. In this context, employee representatives will always be
+regarded as independent members.
+•
+•
+•
+The Supervisory Board shall include a reasonable number of
+independent members. Members shall be deemed to be inde-
+pendent if they have no personal or business relationship with
+the Company, its corporate bodies, a major shareholder or any
+•
+6/6
+a) In this context, the following general objectives shall be obser-
+ved:
+In view of Item 5.4.1 of the German Corporate Governance Code
+and Section 289f, Paragraph 2, Item 6, of the German Commer-
+cial Code, in December 2017 the Supervisory Board defined tar-
+gets for its composition, including a diversity concept and a com-
+petency profile, that go beyond the applicable legal requirements.
+They are as follows:
+"Member since April 1, 2017.
+3Member until March 31, 2017.
+2Thereof once as a guest.
+¹Until March 31, 2017: Finance and Investment Committee
+7/84
+1/10 (guest)
+6/6
+6/6
+"The composition of the Supervisory Board of E.ON SE shall com-
+ply with the specific SE requirements and Germany's Stock Cor-
+poration Act, and with the recommendations of the German Cor-
+porate Governance Code.
+Woste, Ewald
+5/5
+1/10 (guest)
+Investment and
+Innovation Com-
+mittee¹
+1/83
+1/53
+10/10
+6/6
+Kley, Dr. Karl-Ludwig
+Audit and Risk
+Committee
+Executive
+Committee
+Meetings
+Supervisory Board member
+Nomination
+Committee
+Supervisory Board
+Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board
+and Its Committees
+Furthermore, the Supervisory Board's policies and procedures
+gave it the option, if necessary, of holding executive sessions;
+that is, to meet without the Management Board.
+Corporate Governance Report
+The Supervisory Board has established policies and procedures
+for itself, which are available on the Company's Internet page. It
+holds at least four regular meetings in each financial year. Its
+policies and procedures include mechanisms by which, if neces-
+sary, a meeting of the Supervisory Board or one of its commit-
+tees can be called at any time by a member or by the Manage-
+ment Board. Shareholder representatives and employee
+representatives can prepare for Supervisory Board meetings
+separately. In the event of a tie vote on the Supervisory Board,
+the Chairperson has the tie-breaking vote.
+The Supervisory Board oversees the Company's management
+and advises the Management Board on an ongoing basis. The
+Management Board requires the Supervisory Board's prior
+approval for significant transactions and measures, such as the
+Group's investment, finance, and personnel plans; the acquisi-
+tion or sale of companies, equity interests, or parts of compa-
+nies whose fair value or, in the absence of a fair value, whose
+book value exceeds €300 million; financing measures that
+exceed €1 billion and have not been covered by Supervisory
+Board resolutions regarding finance plans; and the conclusion,
+amendment, or termination of affiliation agreements. The
+Supervisory Board examines the Financial Statements of E.ON
+SE, the Management Report, and the proposal for profit appro-
+priation and, on the basis of the Audit and Risk Committee's
+preliminary review, the Consolidated Financial Statements and
+the Combined Group Management Report and the separate
+Non-Financial Report and the separate Combined Non-Finan-
+cial Report. The Supervisory Board provides to the Annual
+Shareholders Meeting a written report on the results of this
+examination.
+The members of the E.ON SE Supervisory Board fulfill these
+requirements. Pursuant to the AktG, at least one member of the
+Supervisory Board must have expertise in preparing or auditing
+financial statements. The Supervisory Board believes that, in
+particular, Dr. Theo Siegert and Andreas Schmitz meet this
+requirement. The Supervisory Board believes that its members
+in their entirety are familiar with the sector in which the Com-
+pany operates.
+past two years, unless the person concerned is nominated
+were a member of the Company's Management Board in the
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Management Board, or
+78
+•
+1/1
+5/6
+6/6
+Siegert, Dr. Theo
+1/1
+8/8
+2/10 (guest)
+5/6
+Segundo, Dr. Karen de
+4/52,4
+6/6
+Lehner, Prof. Dr. Ulrich
+Schmitz, Andreas
+Kingsmill, Baroness Denise
+7/84
+6/6
+Dybeck Happe, Carolina
+3/8 (guest)
+6/6
+Clementi, Erich
+1/1
+10/10
+3/6
+•
+.
+•
+Legal Provisions and Rules of the Company's Articles of Associ-
+ation Regarding the Appointment and Removal of Management
+Board Members and Amendments to the Articles of Association
+Pursuant to the Company's Articles of Association, the Man-
+agement Board consists of at least two members. The Super-
+visory Board decides on the number of members as well as on
+their appointment and dismissal.
+Pursuant to Section 71b of the German Stock Corporation Act
+("AktG"), the Company's treasury shares give it no rights, includ-
+ing no voting rights.
+Restrictions on Voting Rights or the Transfer of Shares
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the
+next calendar year plus one. As a rule, an employee may not sell
+such shares until the blackout period has expired.
+The share capital totals €2,201,099,000.00 and consists of
+2,201,099,000 registered shares without nominal value. In the
+2017 financial year, the share capital was increased by
+€200,099,000.00, from 2,001,000,000.00 to €2,201,099,000.00,
+through partial use of Authorized Capital 2012. Information
+about the capital increase can be found in Note 19 to the Con-
+solidated Financial Statements. Each share of stock grants the
+same rights and one vote at a Shareholders Meeting.
+Composition of Share Capital
+Disclosures Pursuant to Section 289a,
+Paragraph 1, and Section 315a, Paragraph 1,
+of the German Commercial Code
+•
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is per-
+missible. If more than one person is appointed as a member of
+the Management Board, the Supervisory Board may appoint
+one of the members as Chairperson of the Management Board.
+If there is a vacancy on the Management Board for a required
+member, the court makes the necessary appointment upon
+petition by a concerned party in the event of an urgent matter.
+The Supervisory Board may revoke the appointment of a mem-
+ber of the Management Board and of the Chairperson of the
+Management Board for serious cause (for further details, see
+Sections 84 and 85 of the AktG).
+Disclosures Regarding Takeovers
+General IT Controls
+Internal Audit regularly informs the E.ON SE Supervisory Board's
+Audit and Risk Committee about the internal control system for
+financial reporting and any significant issue areas it identifies in
+the E.ON Group's various processes.
+The final step of the internal evaluation process is the submission
+of a formal written declaration called a Sign-Off confirming the
+effectiveness of the internal control system. The Sign-Off pro-
+cess is conducted at all levels of the Group before E.ON SE, as
+the final step, conducts it for the Group as a whole. The Chair-
+man of the E.ON SE Management Board and the Chief Financial
+Officer make the final Sign-Off for the E.ON Group.
+Sign-Off Process
+The management of E.ON units relies on the assessment per-
+formed by the process owners and on testing of the internal
+control system performed by Internal Audit. These tests are a
+key part of the process. Using a risk-oriented audit plan, Inter-
+nal Audit tests the E.ON Group's internal control system and
+identifies potential deficiencies (issues). On the basis of its own
+evaluation and the results of tests performed by Internal Audit,
+an E.ON unit's management carries out the final Sign-Off.
+Tests Performed by Internal Audit
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment of
+the design and the operational effectiveness of the processes as
+well as the controls embedded in these processes.
+An E.ON unit called E.ON Business Services and external service
+providers provide IT services for the majority of the units at the
+E.ON Group. The effectiveness of the automated controls in the
+standard accounting software systems and in key additional appli-
+cations depends to a considerable degree on the proper function-
+ing of IT systems. Consequently, IT controls are embedded in our
+documentation system. These controls primarily involve ensuring
+the proper functioning of IT-related access-control mechanisms
+of systems and applications, of daily IT operations (such as emer-
+gency measures), of the program change process.
+Assessment
+Resolutions of the Shareholders Meeting require a majority of
+the valid votes cast unless mandatory law or the Articles of
+Association explicitly prescribe otherwise. An amendment to
+the Articles of Association requires a two-thirds majority of
+the votes cast or, in cases where at least half of the share cap-
+ital is represented, a simple majority of the votes cast unless
+mandatory law explicitly prescribes another type of majority.
+CEO Letter
+by use of derivatives (put or call options or a combination of
+both).
+by means of a public offer or a public solicitation to submit
+offers for the exchange of liquid shares that are admitted to
+trading on an organized market, within the meaning of the
+German Securities Purchase and Takeover Law, for Company
+shares
+by means of a public offer directed at all shareholders or a
+public solicitation to submit offers
+.
+•
+through a stock exchange
+•
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utiliza-
+tion of authorized or conditional capital.
+At the Management Board's discretion, the acquisition may be
+conducted:
+73
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Management Board's Power to Issue or Buy Back Shares
+Pursuant to a resolution of the Shareholders Meeting of May 10,
+2017, the Company is authorized, until May 9, 2022, to acquire
+treasury shares. The shares acquired and other treasury shares
+that are in possession of or to be attributed to the Company
+pursuant to Sections 71a et seq. of the AktG must altogether at
+no point account for more than 10 percent of the Company's
+share capital.
+The E.ON units to which the internal control system applies use
+a central documentation system to document key controls. The
+system defines the scope, detailed documentation require-
+ments, the assessment requirements for process owners, and
+the final Sign-Off process.
+Central Documentation System
+Each year, we conduct a process using qualitative criteria and
+quantitative materiality metrics to define which E.ON units
+must document and evaluate their financial-reporting-related
+processes and controls in a central documentation system.
+Accounting Process
+We prepare a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunc-
+tion with the German Stock Corporation Act), and the German
+Energy Act.
+We apply Section 315e, Paragraph 1, of the German Commer-
+cial Code and prepare our Consolidated Financial Statements in
+accordance with International Financial Reporting Standards
+("IFRS") and the interpretations of the IFRS Interpretations
+Committee that were adopted by the European Commission for
+use in the EU as of the end of the fiscal year and whose applica-
+tion was mandatory as of the balance-sheet date (see Note 1
+to the Consolidated Financial Statements). Energy Networks
+(Germany, Sweden, and East-Central Europe/Turkey), Customer
+Solutions (Germany, United Kingdom, Other), Renewables, Non-
+Core Business, and Corporate Functions/Other are our IFRS
+reportable segments.
+General Principles
+Disclosures Pursuant to Section 289, Para-
+graph 4, and Section 315, Paragraph 4 of
+the German Commercial Code on the Internal
+Control System for the Accounting Process
+70
+All companies included in the Consolidated Financial Statements
+must comply with our uniform Accounting and Reporting Guide-
+lines for the Annual Consolidated Financial Statements and the
+Interim Consolidated Financial Statements. These guidelines
+describe applicable IFRS accounting and valuation principles.
+They also explain accounting principles typical in the E.ON
+Group, such as those for nuclear-waste management, the treat-
+ment of financial instruments, and the treatment of regulatory
+obligations. We continually analyze amendments to laws, new
+or amended accounting standards, and other pronouncements
+for their relevance to, and consequences for, our Consolidated
+Financial Statements and, if necessary, update our guidelines
+and systems accordingly.
+70
+36.6
+37.2
+Power sales
+-0.1
+-0.2
+Station use, line loss, etc.
+36.7
+Internal Control System for the Accounting Process
+Group Management defines and oversees the roles and respon-
+sibilities of various Group entities in the preparation of E.ON SE's
+Financial Statements and the Consolidated Financial Statements.
+These roles and responsibilities are described in detail in a
+Group Policy document.
+E.ON Group companies are responsible for preparing their finan-
+cial statements in a proper and timely manner. They receive
+substantial support from Business Service Centers in Regens-
+burg, Germany, and Cluj, Romania. The financial statements of
+subsidiaries belonging to E.ON's scope of consolidation are
+audited by the subsidiaries' respective independent auditor.
+E.ON SE then combines these statements into its Consolidated
+Financial Statements using uniform SAP consolidation soft-
+ware. Group Accounting is responsible for conducting the con-
+solidation and for monitoring adherence to guidelines for
+scheduling, processes, and contents. Monitoring of system-
+based automated controls is supplemented by manual checks.
+Scope
+The Catalog of ICS Principles is another key component of our
+internal control system, defining the minimum requirements
+for the system to function. These principles encompass over-
+arching principles for matters such as authorization, segregation
+of duties, and master data management as well as specific
+requirements for managing risks in a range of issue areas and
+processes, such as contractor management, project manage-
+ment, audit, and transactions.
+Our internal control system is based on the globally recognized
+COSO framework, in the version published in May 2013 (COSO:
+The Committee of Sponsoring Organizations of the Treadway
+Commission). The Central Risk Catalog (ICS Model), which
+encompasses company- and industry-specific aspects, defines
+possible risks for accounting (financial reporting) in the functional
+areas of our units and thus serves as a check list and provides
+guidance for the establishment, documentation, and implemen-
+tation of internal controls.
+COSO Framework
+and evaluating internal controls; a Catalog of ICS Principles; a
+description of the test activities of our Internal Audit division;
+and a description of the final Sign-Off process. We believe that
+compliance with these rules provides sufficient certainty to pre-
+vent error or fraud from resulting in material misrepresentations
+in the Financial Statements, the Combined Group Management
+Report, and the Interim Reports.
+71
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Internal controls are an integral part of our accounting processes.
+Guidelines define uniform financial-reporting requirements and
+procedures for the entire E.ON Group. These guidelines encom-
+pass a definition of the guidelines' scope of application; a Risk
+Catalog ("ICS Model"); standards for establishing, documenting,
+Internal Control System
+The following explanations about our internal control system,
+and our general IT controls apply to the Consolidated Financial
+Statements and E.ON SE's Financial Statements.
+E.ON SE's Financial Statements are also prepared with SAP
+software. The accounting and preparation processes are divided
+into discrete functional steps. Bookkeeping processes are han-
+dled by our Business Service Centers: Cluj has responsibility for
+processes relating to subsidiary ledgers and several bank activi-
+ties, Regensburg for those relating to the general ledgers. Auto-
+mated or manual controls are integrated into each step. Defined
+procedures ensure that all transactions and the preparation of
+E.ON SE's Financial Statements are recorded, processed,
+assigned on an accrual basis, and documented in a complete,
+timely, and accurate manner. Relevant data from E.ON SE's
+Financial Statements are, if necessary, adjusted to conform
+with IFRS and then transferred to the consolidation software
+system using SAP-supported transfer technology.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information is compiled. Further-
+more, dedicated quality-control processes are in place for all
+relevant departments to discuss and ensure the completeness
+of relevant information on a regular basis.
+These authorizations may y be utilized on one or several occasions,
+in whole or in partial amounts, in pursuit of one or more objec-
+tives by the Company and also by its affiliated companies or by
+third parties for the Company's account or one of its affiliate's
+account.
+With regard to treasury shares that will be or have been acquired
+based on the above-mentioned authorization and/or prior
+authorizations by the Shareholders Meeting, the Management
+Board is authorized, subject to the Supervisory Board's consent
+and excluding shareholder subscription rights, to use these
+shares-in addition to a disposal through a stock exchange or an
+offer granting a subscription right to all shareholders-as follows:
+72
+a) The Supervisory Board believes that all of its members are
+independent. No former Management Board member sits on
+the Supervisory Board. Furthermore, no member has a seat on
+the boards of, or acts as a consultant for, any of the Company's
+major competitors or has been on the Supervisory Board for
+more than three full terms of office (15 years). The Supervisory
+Board believes that in the case of no Supervisory Board mem-
+ber is there specific indications of relevant situations or rela-
+tionships that could give rise to a conflict of interests. No man-
+agement board member of a listed company sits on the
+Supervisory Board.
+Depends on:
+Actual EPS vs. budget
+Individual performance
+Bonus
+to LTI:
+45:55
+Reasons for Adjustment
+General:
+• Reduce complexity
+• Reflect new business model
+• Enhance capital-market
+perspective
+• Introduce relative total shareholder
+return (TSR), an accepted,
+proven performance indicator
+from investors' viewpoint
+• Factor in performance relative
+to competitors
+• Introduce earnings per share (EPS)
+as key performance indicator for
+management purposes
+•Reflect corporate strategy
+• Serve as an indicator of
+profitability
+Base salary
+(-30%)
+Base salary
+(-30%)
+• No adjustment
+STI components
+LTI components
+(virtual shares)
+2/3:
+performance
+Depends on:
+Adjusted EBITDA
+vs. budget
+Individual
+Corporate Governance Report
+84
+Compensation Report Pursuant to Section
+289a, Paragraph 2, and Section 315a, Para-
+graph 2 of the German Commercial Code
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Management
+Board and Supervisory Board and provides information about
+the compensation granted and paid in 2017. It applies the pro-
+visions of accounting standards for capital-market-oriented
+companies (the German Commercial Code, German Accounting
+Standards, and International Financial Reporting Standards)
+and the recommendations of the German Corporate Gover-
+nance Code dated February 7, 2017.
+Basic Features of the Management Board Compensation Plan
+The Management Board's compensation plan was revised in
+2016 in light of the E.ON Group's new direction. The purpose of
+the revision was to make the plan simpler and to reflect the
+Company's new strategy. The Management Board compensation
+plan that took effect on January 1, 2017, is supposed to create
+an incentive for successful and sustainable corporate gover-
+nance and to link the compensation of Management Board
+members with the Company's short-term and long-term per-
+formance while also factoring in their individual performance.
+The new plan's parameters are therefore transparent, perfor-
+mance-based, and aligned with the Company's business suc-
+cess; variable compensation is based predominantly on multi-
+year metrics. In order to align management's and shareholders'
+interests and objectives, long-term variable compensation is
+based not only on the development of E.ON's stock price in
+absolute terms but also on a comparison with competitors. The
+introduction of share-ownership guidelines further strengthens
+E.ON's capital-market orientation and shareholder culture.
+Old Plan
+Long-term compensation (LTI),
+Unlike the compensation plan that was in effect until December 31,
+2016, the revised plan dispenses with the Supervisory Board's
+additional discretionary power in the assessment of the Compa-
+ny's performance.
+Share-ownership guidelines
+stock-based (-30%)
+4-year average of ROCE
+Bonus (-40%)
+1/3:
+New Plan
+Long-term compensation (LTI),
+stock-based (- 39%)
+Depends on:
+TSR performance relative
+to peer companies
+Bonus (-31%)
+Depends on:
+•Strengthening of shareholder
+culture and capital-market
+orientation
+CEO Letter
+Report of the Supervisory Board
+Compensation Structure¹
+30%
+Base salary
+31%
+Bonus
+(annual)
+¹Not including fringe, other, and pension benefits.
+39%
+E.ON Performance
+Plan (multi-year)
+In addition, a graphic on page 97 provides a summary overview
+of the individual components of the Management Board's com-
+pensation described below as well as their respective metrics
+and parameters.
+Non-Performance-Based Compensation
+compensation
+(-30%)
+No revisions were made to non-performance-based compensa-
+tion.
+Management Board members receive a number of contractual
+fringe benefits, including the use of a chauffeur-driven com-
+pany car. The Company also provides them with the necessary
+telecommunications equipment, covers costs that include those
+for a periodic medical examination, and pays the premium for
+an accident insurance policy.
+Corporate Governance Report
+86
+96
+Performance-Based Compensation
+55 percent of performance-based compensation depends on
+the achievement of long-term targets, ensuring that the variable
+compensation is sustainable under the criteria of Section 87 of
+the German Stock Corporation Act.
+Annual Bonus
+Under the revised compensation plan, Management Board
+members' annual bonus (45 percent of the performance-based
+compensation) consists only of a cash payment made after the
+end of the financial year.
+The amount of the annual bonus is determined by the degree to
+which certain performance targets are attained. The target-set-
+ting mechanism consists of company performance targets and
+individual performance targets.
+Management Board members receive their fixed compensation
+in twelve monthly payments.
+With the exception of the target quota regarding the share of
+women, which is to be achieved by December 31, 2021, the
+current composition of the Management Board already meets
+the appointment objectives described above.
+based
+of the financial
+year
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+85
+59
+The Supervisory Board approves the Executive Committee's
+proposal for the Management Board's compensation plan. It
+reviews the plan and the appropriateness of the Management
+Board's total compensation as well as the individual compo-
+nents on a regular basis and, if necessary, makes adjustments.
+It considers the provisions of the German Stock Corporation Act
+and follows the German Corporate Governance Code's recom-
+mendations and suggestions. In its review of the compensation
+plan's market conformity and the appropriateness of compen-
+sation levels, the Supervisory Board was supported by an exter-
+nal compensation expert.
+The compensation plan that took effect on January 1, 2017,
+was presented to the 2016 Annual Shareholders Meeting and
+approved by a majority of 91.14 percent.
+Non-performance- Base salary
+The compensation of Management Board members consists of
+a fixed base salary, an annual bonus, and long-term variable
+remuneration. The revision of the compensation plan left the
+sum of these components unchanged from the previous plan.
+The components account for the following percentages of total
+compensation:
+Variable
+compensation
+(-70%)
+55%
+45%
+E.ON Performance
+Plan (LTI)
+Granting
+of virtual
+shares (with
+performance
+requirement)
+Bonus (STI)
+Paid out after
+the conclusion
+The following graphic provides an overview of the compensa-
+tion plan for Management Board members:
+Achievement of Objectives
+The appointment period of a member of the Management
+Board shall generally end at the end of the month on which
+the Management Board member reaches the general retire-
+ment age but at the close of the subsequent Annual Share-
+holders Meeting at the latest.
+Attention shall be paid to diversity when appointing mem-
+bers of the Management Board. For the Supervisory Board,
+diversity means, in particular, different complementary aca-
+demic profiles, professional and personal experience, per-
+sonalities, as well as internationality and a reasonable age
+and gender structure. The Supervisory Board has therefore
+adopted a target quota of 20 percent for the share of women
+on the Management Board; this target shall be achieved by
+December 31, 2021.
+CEO Letter
+c) The members bring a wide range of specific knowledge to
+committee work and have special expertise in one or more busi-
+nesses and markets relevant to the Company.
+Current CVs of Supervisory Board members are published on
+the Company's Internet page.
+•
+At least two members shall be familiar, in particular, with
+innovation, disruption and digitization and the associated new
+business models and cultural change.
+Corporate Governance Report
+80
+80
+At the close of the 2018 Annual Shareholders Meeting, the
+Supervisory Board will be reduced to twelve members in accor-
+dance with Sections 8 and 8a of E.ON SE's Articles of Associa-
+tion. The Management Board and the Supervisory Board intend
+to propose to the Annual Shareholders Meeting that the num-
+ber of Supervisory Board members be increased by two persons
+so that in the future the Supervisory Board can continue to fully
+meet the objectives for its composition, including the diversity
+concept and the competency profile, despite the end of service
+of long-standing members. In view of continually changing
+business requirements, the Supervisory Board will continue to
+identify necessary competencies early to ensure that it has
+Report of the Supervisory Board
+them.
+The Executive Committee consists of four members: the Super-
+visory Board Chairperson, his or her two Deputies, and a further
+employee representative. It prepares the meetings of the
+Supervisory Board and advises the Management Board on mat-
+ters of general policy relating to the Company's strategic devel-
+opment. In urgent cases (in other words, if waiting for the
+Supervisory Board's prior approval would materially prejudice
+the Company), the Executive Committee acts on the full Super-
+visory Board's behalf. In addition, a key task of the Executive
+Committee is to prepare the Supervisory Board's personnel
+decisions and resolutions for setting the respective total com-
+pensation of individual Management Board members within the
+meaning of Section 87, AktG. Furthermore, it is responsible for
+the conclusion, alteration, and termination of the service agree-
+ments of Management Board members and for presenting the
+Supervisory Board with a proposal for a resolution on the Man-
+agement Board's compensation plan and its periodic review. In
+addition, it prepares the Supervisory Board's decision on the
+Group's investment, financial, and personnel plan for the next
+financial year. It also deals with corporate-governance matters
+and reports to the Supervisory Board, generally once a year, on
+the status and effectiveness of, and possible ways of improving,
+the Company's corporate governance and on new requirements
+and developments in this area.
+The Audit and Risk Committee consists of four members. The
+Supervisory Board believes that, in their entirety, the members
+of the Audit and Risk Committee are familiar with the sector in
+which the Company operates. According to the AktG, the Audit
+and Risk Committee must include one Supervisory Board mem-
+ber who has expertise in accounting and/or auditing. The
+Supervisory Board believes that Dr. Theo Siegert and Andreas
+Schmitz fulfill these requirements. Pursuant to the recommen-
+dations of the German Corporate Governance Code, the Chair-
+person of the Audit and Risk Committee should have special
+knowledge and experience in the application of accounting
+principles and internal control processes. In addition, this per-
+son should be independent and should not be a former Man-
+agement Board member whose service on the Management
+Board ended less than two years ago. The Supervisory Board
+believes that the Chairman of the Audit and Risk Committee, Dr.
+Theo Siegert, fulfills these requirements. In particular, the Audit
+and Risk Committee deals with accounting issues (including the
+accounting process), risk management, compliance, the neces-
+sary independence of the independent auditor, the issuance of
+the audit mandate to the independent auditor, the definition of
+the audit priorities, the agreement regarding the independent
+auditor's fees, and any additional services performed by the
+independent auditor. The committee's monitoring of risk man-
+agement encompasses reviewing the effectiveness of the inter-
+nal control system, internal risk management, and the internal
+audit system. The committee also prepares the Supervisory
+Board's decision on the approval of the Financial Statements of
+E.ON SE and the Consolidated Financial Statements. It is
+responsible for the preliminary review of the Financial State-
+ments of E.ON SE, the Management Report, the Consolidated
+Financial Statements, the Combined Group Management
+Report and the proposal for profit appropriation of profits as
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+The Supervisory Board has established the following commit-
+tees and defined policies and procedures for them:
+81
+E.ON Stock
+Combined Group Management Report
+Current Composition
+At least two members shall be familiar with legal and compli-
+ance, HR, IT and sustainability."
+At least two independent representatives of the shareholders
+shall have expertise in the fields of accounting, risk manage-
+ment and auditing of financial statements.
+At least four members shall have specific expertise in the busi-
+nesses and markets that are particularly relevant for E.ON.
+This includes in particular the energy sector, the sales and
+retail business, regulated industries, new technology as well as
+relevant customer sectors.
+•
+•
+•
+kets.
+The shareholders' representatives should have leadership
+experience in companies or other large organizations by the
+majority. At least four members shall have experience, as
+management or supervisory board members, in the strategic
+management or supervision of listed organizations and shall
+be familiar with the functioning of capital and financial mar-
+Strategy and Objectives
+c) In addition, the following skills profile shall apply; especially the
+Nominations Committee will strive to apply the skills profile when
+preparing nominations of candidates for the shareholders' repre-
+sentatives to be proposed to the Annual General Meeting.
+An upper age limit of 75 years shall apply to members of the
+Supervisory Board; candidates shall not be older than 72 years
+when they are elected.
+•
+• In the search for qualified Supervisory Board members, due
+consideration shall be given to diversity. When preparing nom-
+inations for the election of Supervisory Board members, due
+consideration shall be given in each case to the question as to
+whether complementary academic profiles, professional and
+life experience, a balanced age mix, various personalities and
+a reasonable gender balance benefit the Supervisory Board's
+work. In this context, care shall be taken to ensure that a gen-
+der quota of 30 percent will be achieved; this shall apply to the
+Supervisory Board as a whole and to the shareholders' and
+employees' representatives separately.
+b) In addition, the Supervisory Board has adopted the following
+diversity concept so as to ensure a balanced structure of the
+Supervisory Board in terms of age, gender, personality, educatio-
+nal background and professional experience.
+All Supervisory Board members must have sufficient time
+available to perform their duties on the boards of various com-
+panies. Persons who are members of the board of manage-
+ment of a listed company shall only be eligible as members of
+E.ON's Supervisory Board if they do not have seats on a total
+of more than two supervisory boards of listed non-Group com-
+panies or of comparable supervisory bodies.
+•
+79
+Summary of Financial Highlights and Explanations
+Consolidated Financial Statements
+Four Supervisory Board members shall have international
+experience, i.e. they shall have spent, for instance, many years
+of their professional career outside Germany.
+b) In its current composition the Supervisory Board meets the
+objectives of its diversity concept. The Supervisory Board's com-
+position of women and men complies with the legal require-
+ments for minimum percentages, although separate compliance
+with the statutory gender quota is not expected to occur until
+the Annual Shareholders Meeting in 2018. The age range of the
+Supervisory Board is currently between 42 and 71 years, with
+an average age of 59. At least four members have international
+experience.
+well as-if these are not already part of the (Combined Group)
+Management Report-the separate Non-Financial Report and
+the separate Combined Non-Financial Report. It discusses the
+half-yearly reports and quarterly notifications or financial
+reports with the Management Board prior to their publication.
+The effectiveness of the internal control mechanisms for the
+accounting process used at E.ON SE and its units is tested on a
+regular basis by our Internal Audit division; the Audit and Risk
+Committee regularly monitors the work done by the Internal
+Audit division and the definition of audit priorities. The Audit
+and Risk Committee may commission an external review of the
+contents of the Non-Financial Statement or the separate
+Non-Financial Report or the Combined Non-Financial State-
+ment or the separate Combined Non-Financial Report. In addi-
+tion, the Audit and Risk Committee prepares the proposal on
+the selection of the Company's independent auditor for the
+Annual Shareholders Meeting. In order to ensure the auditor's
+independence, the Audit and Risk Committee secures a state-
+ment from the proposed auditor detailing any facts that could
+lead to the audit firm being excluded for independence reasons
+or otherwise conflicted.
+to:
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Consolidated Financial Statements
+Summary of Financial Highlights and Explanations
+83
+For all other E.ON Group companies concerned, targets and dead-
+lines pursuant to the Law for the Equal Participation of Women
+and Men in Leadership Positions in the Private Sector and the
+Public Sector were set for the proportion of women on these com-
+panies' supervisory board and management board or team of
+managing directors as well as in the next two levels of manage-
+ment. The deadline for achieving these targets is June 30, 2022.
+Diversity Concept for the Management Board
+CEO Letter
+At its meeting in December 2017 the E.ON SE Supervisory
+Board passed a resolution on the following succession plan-
+ning/diversity concept for the Management Board:
+Appointment Objectives
+•
+When appointing members of the Management Board, the
+candidates' outstanding professional qualifications, long-
+term leadership experience and past performance, as well as
+value-driven management shall be of paramount impor-
+tance. Members shall be capable of taking forward-looking
+strategic decisions. In particular, they shall be capable of
+managing businesses sustainably and of ensuring that they
+are consistently focused on customer needs.
+•
+⋅
+•
+•
+The Management Board as a whole must have expertise and
+experience in the energy sector as well as in the fields of
+finance and digitization.
+The members of the Management Board shall be leaders
+and as such shall act as role models for the employees
+through their own performance and conduct.
+In cooperation with the Executive Committee and the Manage-
+ment Board, the Supervisory Board is in charge of long-term
+succession planning for the Management Board. With regard to
+the Management Board's composition, the Supervisory Board
+of E.ON SE has developed a diversity concept that is in line with
+the relevant recommendations of the German Corporate Gover-
+nance Code.
+In being assigned the audit task, the independent auditor agrees
+In May 2017 the Management Board set new targets of 30 per-
+cent for the proportion of women in the first level of manage-
+ment below the Management Board and a target of 35 percent
+for the second level of management below the Management
+Board. The deadline for achieving both targets is June 30, 2022.
+In the reporting period, the Management Board consisted ini-
+tially of five and subsequently of four men. In December 2016
+the Supervisory Board set a new target of 20 percent for the
+proportion of women on the Management Board and a deadline
+of December 31, 2021, for implementation.
+•
+•
+•
+promptly inform the Chairperson of the Audit and Risk Com-
+mittee should any such facts arise during the course of the
+audit unless such facts are resolved in a satisfactory manner
+promptly inform the Supervisory Board of anything it
+becomes aware of during the course of the audit that is of
+relevance to the Supervisory Board's duties
+inform the Chairperson of the Audit and Risk Committee, or
+to note in the audit report, if the audit has led to findings
+that contradict the Declaration of Compliance with the Ger-
+man Corporate Governance Code by the Management Board
+or Supervisory Board.
+The Investment and Innovation Committee (until March 31,
+2017: the Finance and Investment Committee) generally con-
+sists of four members; from April 1, 2017, to the end of the
+2018 Annual Shareholders Meeting it consists of six members.
+It advises the Management Board on all issues of Group
+financing and investment planning as well as issues relating to
+market developments and innovation. It decides on behalf of
+the Supervisory Board on the approval of the acquisition and
+disposition of companies, equity interests, and parts of compa-
+nies whose value exceeds €300 million but does not exceed
+€600 million. In addition, it decides on behalf of the Supervi-
+sory Board on the approval of financing measures whose value
+exceeds €1 billion but not €2.5 billion if such measures are not
+covered by the Supervisory Board's resolutions regarding
+finance plans. If the value of any such transactions or measures
+exceeds the above-mentioned thresholds, the committee pre-
+pares the Supervisory Board's decision.
+In 2015, for E.ON SE the Management Board set a target of
+23 percent for the proportion of women in the first level of
+management below the Management Board and a target of
+17 percent for the second level of management below the
+Management Board. The deadline for achieving both targets
+was June 30, 2017. At the time of the deadline, the proportion
+of women in first and second levels of management below the
+Management Board was 19 percent and 27 percent, respec-
+tively. During the implementation period, E.ON took specific
+steps to increase the proportion of women in management
+positions. However, turnover in management was lower than in
+previous years. Despite the positive trend, not yet all targets
+were achieved.
+The Nomination Committee consists of three shareholder-rep-
+resentative members. Its Chairperson is the Chairperson of the
+Supervisory Board. Its task is to recommend to the Supervisory
+Board, taking into consideration the Supervisory Board's tar-
+gets for its composition, suitable candidates for election to the
+Supervisory Board by the Annual Shareholders Meeting.
+Corporate Governance Report
+82
+82
+Shareholders and Annual Shareholders Meeting
+E.ON SE shareholders exercise their rights and vote their shares
+at the Annual Shareholders Meeting. The convening of the
+Annual Shareholders Meeting and the reports and documents
+required by law for the Annual Shareholders Meeting, including
+the Annual Report, are published on the Company's Internet
+page together with the agenda and the explanation of the con-
+ditions of participation, shareholders' rights, and any counter-
+motions and election proposals submitted by shareholders. The
+Company's financial calendar, which is published in the Annual
+Report, in the quarterly notifications or financial reports, and on
+the Internet at www.eon.com, regularly informs shareholders
+about important Company dates.
+At the Annual Shareholders Meeting, shareholders may vote
+their shares themselves, through a proxy of their choice, or
+through a Company proxy who is required to follow the share-
+holder's voting instructions.
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+At the Annual Shareholders Meeting on May 10, 2017, Price-
+waterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
+was selected to be E.ON SE's independent auditor for the 2017
+financial year and to audit the Condensed Consolidated Interim
+Financial Statements and Interim Group Management Report
+for the 2017 financial year and the first quarter of 2018. The
+independent auditors with signing authority for the Annual
+Financial Statements of E.ON SE and the Consolidated Financial
+Statements are Markus Dittmann (since the 2014 financial
+year) and Aissata Touré (since the 2015 financial year).
+Women and Men in Leadership Positions Pursuant to Section 76,
+Paragraph 4, and Section 111, Paragraph 5, of the German
+Stock Corporation Act
+All committees meet at regular intervals and when specific cir-
+cumstances require it under their policies and procedures. The
+Report of the Supervisory Board (on pages 8 to 9) contains
+information about the activities of the Supervisory Board and
+its committees in 2017. Pages 222 and 223 show the compo-
+sition of the Supervisory Board and its committees.
+Bonus
+•
+bonus)
+Share Price
+Х
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the contractually agreed-on target.
+Upper threshold
+Lower threshold Target value
+Percentile
+achieved
+by E.ON
+0%
+25%
+50%
+75%
+100%
+125%
+150%
+Х
+175%
+200%
+Target achievement
++
+Dividends
+Payout Amount
+Cap at 200%
+of target value
+88
+(target
+At the end of the vesting period, the virtual shares held by Man-
+agement Board members are assigned a cash value based on
+E.ON's average stock price during the final 60 days of the vest-
+ing period. To each virtual share is then added the aggregate
+per-share dividend paid out during the vesting period. This
+total-cash value plus dividends—is then paid out. Payouts are
+capped at 200 percent of the arithmetical total target value.
+Extraordinary events are not factored into the determination of
+target attainment for company performance. Depending on the
+degree of target attainment for the company performance met-
+ric, each virtual share resulting from base matching may be
+matched by up to two additional virtual shares at the end of the
+vesting period. If the predetermined company performance tar-
+get is fully attained, Management Board members receive one
+additional virtual share for each virtual share resulting from
+base matching. Linear interpolation is used to translate inter-
+mediate figures.
+For the purpose of performance matching, the company perfor-
+mance metric for tranches granted from 2013 to 2015 was ini-
+tially E.ON's average ROACE during the four-year vesting period
+compared with a target ROACE set in advance by the Supervi-
+sory Board for the entire four-year period at the time it allo-
+cated a new tranche. Pursuant to a Supervisory Board resolu-
+tion, from the 2016 financial year onward these performance
+targets were based on ROCE. In view of the Uniper spinoff, this
+adjustment was necessary because the ROACE targets were
+based on old planning figures that did not foresee the Uniper
+spinoff. Furthermore, from the start of 2016, the Company no
+longer used ROACE as a key performance indicator and it was
+therefore no longer available. In addition, the anticipated reduc-
+tion in E.ON's stock price resulting from the Uniper spinoff had
+to be factored in by means of a conversion method.
+share that resulted from base matching. The arithmetical total
+target value allocated at the start of the vesting period, which
+began on April 1 of the year in which a tranche was allocated,
+was therefore the sum of the value of the LTI component, base
+matching, and performance matching (depending on the degree
+of attainment of a predefined company performance target).
+Following the Supervisory Board's decision to allocate a new
+tranche, Management Board members initially received vested
+virtual shares equivalent to the amount of the LTI component of
+their bonus. The determination of the LTI component took into
+consideration the overall target attainment of the old compen-
+sation plan's bonus for the preceding financial year. The number
+of virtual shares was calculated on the basis of the amount of
+their LTI component and E.ON's average stock price during the
+first 60 days prior to the four-year vesting period. Furthermore,
+Management Board members could receive, on the basis of
+annual Supervisory Board decisions, a base matching of addi-
+tional non-vested virtual shares in addition to the virtual shares
+that resulted from their LTI component. In addition, Manage-
+ment Board members could, depending on the company's per-
+formance during the vesting period, receive performance
+matching of up to two additional non-vested virtual shares per
+= €
+Vesting period: 4 years
+of the STOXX® Europe 600 Utilities index (yearly lock-in)
+Dividends
+ROCE
+4-year
+average in % X plus
+Х
+1/3: LTI
+component
+Matching
+Base
+Performance
+Matching
+Until the introduction of the new compensation plan on January 1,
+2017, Management Board members received stock-based
+compensation under the E.ON Share Matching Plan. At the
+beginning of each financial year, the Supervisory Board decided,
+based on the Executive Committee's recommendation, on the
+allocation of a new tranche, including the respective targets and
+the number of virtual shares granted to individual members of
+the Management Board. To serve as a long-term incentive for
+sustainable business performance, each tranche had a vesting
+period of four years. The tranche started on April 1 of each year.
+E.ON Share Matching Plan (Granted until 2016)
+Stock Price
+TSR of the E.ON share compared to the companies
+Corporate Governance Report
+TSR Performance Relative to
+Cap at 200% of
+target bonus
+Bonus
+||
+⚫ Individual performance
+Х
+• Overall performance of
+Management Board
+Evaluation of a Management Board
+member's performance based on:
+-37.5% budget +37.5% EPS
+0%
+50%
+100%
+150%
+200%
+Target attainment
+• Actual EPS vs. budget:
+Company Performance
+(0-200%)
+Peer Group
+100%
+Payout in Cash
+Effective 2017, the Company's performance is assessed on the
+basis of earnings per share ("EPS"), E.ON's key performance
+indicator. EPS used for this purpose will be derived from
+adjusted net income as disclosed in this report. The EPS target
+for each year is set by the Supervisory Board, taking into account
+the approved budget. The target is fully achieved if actual EPS
+is equal to the target. If actual EPS is 37.5 percentage points or
+more below the target, this constitutes zero percent attainment.
+If actual EPS is 37.5 percentage points or more above the target,
+this constitutes 200 percent attainment. Linear interpolation is
+used to translate intermediate EPS figures into percentages.
+Individual Performance Factor
+50-150%
+E.ON's Performance Plan (Granted from 2017)
+The Supervisory Board determines the degree to which Man-
+agement Board members have attained the targets of their indi-
+vidual performance factors, giving adequate consideration to
+their individual and collective contributions. The factors range
+between 50 and 150 percent. In addition, the Supervisory
+Board may, as part of the annual bonus, grant Management
+Board members special compensation for outstanding achieve-
+ments. In assigning Management Board members their individ-
+ual performance factors and in granting special compensation,
+Initial Number
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON SE's TSR performance in
+a given year determines the final number of one fourth of the
+virtual shares granted at the beginning of the vesting period.
+For this purpose, the TSRS of all companies are ranked, and
+E.ON SE's relative position is determined based on the percen-
+tile reached. If target attainment in a year is below the threshold
+defined by the Supervisory Board at the time of granting, the
+number of virtual shares granted is reduced by one quarter. If
+E.ON's performance is at the upper cap or above, the quarter of
+virtual shares granted for that particular year increases to a
+maximum of 150 percent. Linear interpolation is used to trans-
+late intermediate figures into percentage.
+TSR is the yield of E.ON stock. It takes into account the stock
+price, including the assumption that dividends are reinvested,
+and is adjusted to exclude changes in capital. The peer group
+used for relative TSR will be the other companies in E.ON's peer
+index, the STOXX® Europe 600 Utilities.
+The Supervisory Board grants virtual shares to each member of
+the Management Board in the amount of the contractually
+agreed-on target. The conversion into virtual shares is based on
+the fair market value on the date when the shares are granted.
+The fair market value is determined by applying methods
+accepted in financial mathematics, taking into account the
+expected future payout, and hence, the volatility and risk asso-
+ciated with the E.ON Performance Plan. The number of granted
+virtual shares may change in the course of the four-year vesting
+period depending on the total shareholder return ("TSR") of
+E.ON stock compared with the TSR of the companies in a peer
+group ("relative TSR").
+Management Board members receive stock-based, long-term
+variable compensation under the E.ON Performance Plan, which
+replaced the E.ON Share Matching Plan as the Company's new
+long-term compensation plan effective January 1, 2017. Each
+tranche of the E.ON Performance Plan has a vesting period of
+four years to serve as a long-term incentive for sustainable
+business performance. Vesting periods start on January 1.
+87
+Summary of Financial Highlights and Explanations
+of Granted
+Share Units
+Consolidated Financial Statements
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The long-term variable compensation currently consists of
+tranches from several financial years granted under two differ-
+ent plans. First, the first tranche of the new E.ON Performance
+Plan-Performance Plan, first tranche (2017-2020)-was
+granted. It will be paid out in April 2021 on the basis of target
+attainment and E.ON's stock price. Second, there are still
+tranches of the E.ON Share Matching Plans outstanding. The
+last tranche of the E.ON Share Matching Plan-Share Matching
+Plan, fourth tranche (2016-2020) and the LTI components of
+the bonus from 2016 (Share Matching Plan, fifth tranche
+(2017-2021)-was granted in 2016.
+Long-Term Variable Compensation
+As before, the maximum bonus that can be attained (including
+any special compensation) is 200 percent of the target bonus
+(cap).
+the Supervisory Board pays attention to the criteria of Section 87
+of the German Stock Corporation Act and of the German Corpo-
+rate Governance Code.
+39
+41
+38
+41
+E.ON Stock
+50
+34
+52
+43
+29
+18 Strategy and Objectives
+26
+26
+25
+24
+22
+22 Corporate Profile
+Combined Group Management Report
+22
+60
+29
+68
+Business Segments
+73
+14
+Disclosures Regarding Takeovers
+Internal Control System for the Accounting Process
+Risk and Chances Report
+Forecast Report
+- Employees
+- ROCE and Value Added
+Other Financial and Non-Financial Performance Indicators
+E.ON SE's Earnings, Financial, and Asset Situation
+70
+Asset Situation
+Earnings Situation
+Business Performance
+Macroeconomic and Industry Environment
+Business Report
+Innovation
+Management System
+Business Model
+82
+73
+Financial Situation
+Report of the Supervisory Board
+42
+CEO Letter
+1.85
+2.66
+Equity per share7.9 (€)
++3
+0.67
+0.69
+Adjusted net income per share 1,7,8
+-19
+1.84
++44
+1.49
+2.3
+2.5
+Earnings per share 7.8 (€)
+- TRIF6
+Corporate Governance Report
+42
+- Average age
++0.25
+4.6
++9
+6
+Dividend per share 10 (€)
+Market capitalization (€ in billions)
+4
+10 For the respective financial year; the 2018 figure represents management's dividend proposal.
+9Based on shares outstanding at year-end.
+8Based on shares outstanding (weighted average).
+-5
+19.6
+18.7
++43
+650
+Dividend payout
+932
+0.30
+0.43
+"Attributable to shareholders of E.ON SE.
+6For E.ON employees; for a definition of TRIF, see the Employees chapter.
+5Change in percentage points.
+4Change in absolute terms.
+³Ratio of economic net debt and adjusted EBITDA.
+²Adjusted for non-operating effects (see Glossary).
+¹Includes the discontinued operations in the Renewables segment (see Note 4 to the Consolidated Financial Statements).
++43
+Corporate Governance Declaration
+E.ON Stock
+100 Separate Combined Non-Financial Report
+Takeover of innogy SE and Extensive
+Asset Swap with RWE
+7
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In addition, there was a regular exchange of information between the Chairman of
+the Supervisory Board and the members of the Management Board, in particular
+the Chairman, during the entire financial year. In the case of particularly pertinent
+issues, the Chairman of the Supervisory Board was kept informed at all times. He
+likewise maintained contact with the members of the Supervisory Board outside of
+board meetings. The Supervisory Board was at all times informed about the current
+operating performance of the major Group companies, significant business trans-
+actions, the development of key financial figures, and decisions under consideration.
+The Management Board regularly provided us with timely and comprehensive
+information about significant business transactions in both written and oral form.
+At the meetings of the full Supervisory Board and its committees, we had sufficient
+opportunity to actively discuss the Management Board's reports, motions, and
+proposed resolutions. After thoroughly examining and discussing the resolutions
+proposed by the Management Board, we voted on such matters when it was
+required by law, the Company's Articles of Association, or the Supervisory Board's
+policies and procedures.
+At its meeting in March 2018, the Supervisory Board
+dealt comprehensively with the planned takeover of
+innogy SE. Supported by outside consultants, the Man-
+agement Board gave the Supervisory Board a detailed
+presentation of the structure and the modalities of
+the planned takeover. The presentation described the
+financial parameters as well as the main economic
+and strategic aspects of the agreement with RWE.
+On this basis, the Supervisory Board is convinced that
+this decision was and is the right one for the Company.
+The transaction was a topic of discussion at all of the
+Supervisory Board's remaining meetings last year, at
+which the Management Board kept us continually
+informed about a variety of related matters, including
+the status of the voluntary public takeover offer, the
+merger-control procedure, and the progress of the
+preparations for the integration.
+We advised the Management Board intensively about the Company's manage-
+ment and continually monitored the Management Board's activities, assuring
+ourselves that the Company's management was legal, purposeful, and orderly.
+We were directly involved in all business transactions of key importance to the
+Company and discussed these transactions thoroughly based on the Management
+Board's reports. At the Supervisory Board's six regular meetings, we addressed in
+depth all issues relevant to the Company. In particular, we discussed the planned
+takeover of innogy SE and the related asset swap with RWE, the closing of the sale
+of the Company's remaining Uniper stake, the refinement of its corporate strategy,
+and the E.ON Group's medium-term plan for 2019-2021. Two Supervisory Board
+members were unable to attend Supervisory Board meetings in 2018. Apart from
+that, all members attended all meetings. A table showing attendance by member
+is on page 76 of this report.
+In 2018 E.ON again made German industrial history. The resolution adopted in
+March to take over innogy will begin a new chapter in our company's history.
+In addition, E.ON also sold its remaining stake in Uniper SE and thus completed
+its exit from conventional energy generation. The Supervisory Board would like
+to thank the Management Board and all employees for their enormous efforts
+connected with E.ON's new strategic course.
+Dr. Karl-Ludwig Kley,
+Chairman of the Supervisory Board
+Dear Shareholders,
+6
+Report of the Supervisory Board
+5
+Dr. Johannes Teyssen
+кори
+Best wishes,
+In the 2018 financial year the Supervisory Board carefully performed all its duties
+and obligations under law, the Company's Articles of Association, and its own
+policies and procedures. It thoroughly examined the Company's situation and
+devoted particular attention to its continually evolving energy-policy and economic
+environment.
+We've put ourselves into a solid starting position
+so that we can be even better at seizing the oppor-
+tunities of the green, distributed, and digital energy
+world. Our ambition is and will remain to do the
+best job possible of making the great opportunities
+in the new energy world available to our customers
+and to you, our shareholders. Something that's
+particularly important to my Management Board
+colleagues and me, especially in the time ahead, is
+that leadership and cultural adaptation are essential
+for the integration of innogy to succeed and for
+the new company to be more than the sum of its
+parts. Success will depend on our willingness to
+learn and actively shape change. I'm convinced that
+E.ON will succeed in this task. I also sense that
+innogy is willing to try something new. E.ON has
+highly knowledgeable and dedicated employees
+who work hard every day to enhance our company's
+performance and to propel its reorientation. And
+we on the Management Board are convinced that
+openness and diversity, mutual respect, and a
+strong performance culture are the decisive factors
+that will make the new E.ON even more customer-
+oriented and successful. For our customers, for our
+employees, and for you, our shareholders.
+Sale of the Remaining Uniper Stake and
+the Refinement of Corporate Strategy
+The Supervisory Board dealt in detail with the refine-
+ment of E.ON's corporate strategy. At our September
+meeting, we focused on the future strategic course
+of the Energy Networks and Customer Solutions seg-
+ments. As a network operator, E.ON will remain a reli-
+able partner of policymakers and the general public in
+the joint effort to make the energy transition a success.
+Alongside making the investments necessary to main-
+tain and expand its networks, E.ON is focusing on
+developing innovative solutions for network operations.
+On the customer solutions side, E.ON will continue to
+be a leading provider of energy solutions for residential
+To fulfill its duties carefully and efficiently, the Super-
+visory Board has created the committees described
+in detail below. Information about the committees'
+composition and responsibilities is in the Corporate
+Governance Report on pages 78 and 79. Within the
+scope permissible by law, the Supervisory Board has
+transferred to the committees the authority to adopt
+resolutions. Committee chairpersons reported the
+agenda and results of their respective committee's
+meetings to the full Supervisory Board on a regular
+basis, typically at the Supervisory Board meeting sub-
+sequent to their committee meeting.
+Committee Work
+An overview of Supervisory Board members' atten-
+dance at meetings of the Supervisory Board and its
+committees is on page 76.
+In 2018 we conducted a regularly scheduled efficiency
+review of the Supervisory Board's work. Drawing on
+suggestions from the Supervisory Board members, we
+designed and implemented measures to improve the
+Supervisory Board's work. The measures are mainly
+aimed at improving the discussion culture and thus time
+management at Supervisory Board meetings as well
+as extending the preliminary discussions of the share-
+holder and employee representatives. In addition, in
+the future the Management Board's reports will devote
+more attention to the analysis of industry-specific and
+technological trends.
+The targets for the Supervisory Board's composition,
+including a competency profile and a diversity concept,
+with regard to Item 5.4.1 of the German Corporate
+Governance Code and Section 289f, Paragraph 2, Item 6
+of the German Commercial Code and the status of their
+achievement are described in the Corporate Governance
+Report on pages 76 to 78.
+Two comprehensive education and training sessions
+on selected operational issues were conducted for
+Supervisory Board members in 2018.
+One member of the Supervisory Board had a conflict of interest in the
+2018 financial year in conjunction with the innogy transaction owing
+to his position with another company. In accordance with Supervisory
+Board rules, the member alerted the Chairman prior to the meeting on
+March 11, 2018, and officially resigned this position before the meeting,
+thus eliminating the conflict of interest. In addition, two members had
+a conflict of interest in conjunction with a possible transaction owing
+to their positions with other companies. In accordance with Supervisory
+Board rules, the members made this known prior to the meeting on
+December 18, 2018, and did not take part in the Supervisory Board's
+adoption of a resolution. Otherwise, the Supervisory Board is aware of
+no indications of conflicts of interest involving members of the Manage-
+ment Board or the Supervisory Board.
+The current version of the declaration of compliance is in the Corporate
+Governance Report on page 73; the current as well as earlier versions are
+published online at www.eon.com.
+In the declaration of compliance issued at the end of the year, we and the
+Management Board declared that E.ON is in full compliance with the
+recommendations of the "Government Commission German Corporate
+Governance Code" dated February 7, 2017, published by the Federal
+Ministry of Justice and for Consumer Protection in the official section of
+the Federal Gazette (Bundesanzeiger), since the last annual declaration
+on December 18, 2017, with no exceptions.
+At our January meeting, we approved the Management
+Board's decision to sell E.ON's remaining 46.65-percent
+Uniper stake to Fortum, a Finnish energy company.
+Fortum's payment of the purchase price along with the
+antitrust approvals in June completed the execution of
+E.ON's decision to spin off its conventional generation
+business.
+In the 2018 financial year the Supervisory Board again duly addressed
+the implementation of the recommendations of the German Corporate
+Governance Code (known by its German abbreviation, "DCGK").
+We thoroughly discussed the activity reports submitted by the Supervisory
+Board's committees.
+Furthermore, the Supervisory Board discussed E.ON's future funding
+needs and, where necessary, adopted resolutions. We also discussed
+E.ON's current and future rating situation with the Management Board
+on a regular basis. Finally, we examined the Group's non-financial report-
+ing (CSR), assured ourselves that it is legal, orderly, and purposeful, and
+approved it. The report defines climate protection, occupational health and
+safety, diversity, security of supply, customer satisfaction, the general
+significance of human rights, and the general significance of compliance
+as material topics for E.ON and describes the Company's management
+approach, key performance indicators, and risk estimates for each.
+8
+Report of the Supervisory Board
+We also thoroughly discussed current developments in E.ON's core
+businesses. Topics of discussion included the regulatory environment
+in individual markets, the development of customer numbers, new cus-
+tomer solutions, and the digitalization of E.ON's business. In addition,
+the Management Board reported on the successful initial public offering
+of Enerjisa Enerji A.S., the network and sales business in Turkey, in early
+February 2018.
+Furthermore, in the context of the Group's current operating business,
+we discussed in detail national and international energy markets, the
+currencies that are important to E.ON, the impact of low interest rates
+on E.ON as well as the general business situation of the Group and its
+companies. We discussed E.ON SE's and the E.ON Group's asset, financial,
+and earnings situation, future dividend policy, workforce developments,
+and earnings opportunities and risks. In addition, we and the Manage-
+ment Board thoroughly discussed the E.ON Group's medium-term plan
+for 2019-2021. The Supervisory Board was provided information on
+a regular basis about the Company's health, (occupational) safety, and
+environmental performance (in particular, the development of key accident
+indicators) as well as the number of apprentices and measures to foster
+diversity.
+Policy and regulatory developments in countries in which E.ON is active
+constituted another key topic of our discussions. Alongside the overall-
+and economic-policy situation in the individual countries, we focused
+primarily on the developments in European and German energy policy
+and their respective consequences for E.ON's business areas. In particular,
+the Supervisory Board discussed the United Kingdom's upcoming depar-
+ture from the European Union and the various Brexit scenarios' economic
+consequences for E.ON. In addition, we dealt repeatedly with the intro-
+duction of a price cap for electricity tariffs in the United Kingdom. Further-
+more, developments in Turkey's macroeconomic environment and elec-
+tricity market were topics of the Supervisory Board's deliberations.
+Other Key Topics of the Supervisory Board's
+Discussions
+and business customers and for cities and communities. It identified
+heating solutions as an additional strategic focus area. E.ON's objective
+is to satisfy customers' needs in an efficient, smart, and sustainable
+energy world.
+Corporate Governance
+We want to continue our success story. For 2019,
+we anticipate adjusted EBIT of €2.9 to €3.1 billion
+and adjusted net income of €1.4 to €1.6 billion.
+We want the positive development of our dividend
+to continue as well. We'll recommend to the Annual
+Shareholders Meeting a fixed dividend of 43 cents
+per share for the 2018 financial year. We intend
+to propose a fixed dividend of 46 cents per share
+for 2019 financial year. Our high proportion of
+regulated businesses and our clear commitment to
+a consistent dividend policy make E.ON a highly
+attractive investment, particularly once again for
+long-term, sustainability-oriented investors.
+Our Renewables segment delivered particularly strong earnings, even
+though the wind yield was low. The significant 15-percent earnings
+increase and our highly motivated employees demonstrate that E.ON has
+an outstanding performance culture that we can be proud of. It's this
+performance culture that, across our business, makes us a little bit better
+than many competitors and that gives me the certainty that we'll actively
+shape tomorrow's energy world.
+Our customers have long since embraced the objectives of the energy
+transition. Increasingly, they're opting for innovative, efficient, and dis-
+tributed solutions. We provide them with the equipment, products, and
+services. Although this business is fragmented and competition is tough,
+we're a partner of choice for municipalities and for commercial and
+industrial customers. In 2018 we enlarged our customer base in nearly
+all markets. Even in the highly competitive retail business we managed
+to keep the overall number of customers stable and actually added about
+100,000 customers on a net basis in Germany. This is doubtless partly
+because we've significantly improved our service and because customer
+satisfaction, which we measure regularly, again increased substantially.
+Moreover, new strategic partnerships-like the one with Microsoft-are
+further raising our profile in the new energy world.
+Report of the Supervisory Board
+CEO Letter
+253 Financial Calendar
+246 Glossary of Financial Terms
+245 Summary of Financial Highlights
+244 Members of the Management Board
+242 Members of the Supervisory Board
+240 Independent Practitioner's Report on Non-Financial Reporting
+233 Independent Auditor's Report
+E.ON Stock
+232 Declaration of the Management
+List of Shareholdings
+216
+122 Notes
+120 Statement of Changes in Equity
+118 Consolidated Statements of Cash Flows
+116 Consolidated Balance Sheets
+115 Consolidated Statements of Recognized Income and Expenses
+114 Consolidated Statements of Income
+114 Consolidated Financial Statements
+232 Further Information
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Contents
+The Energy Networks segment is the undisputed mainstay of our earn-
+ings, delivering stable earnings of €1.8 billion. In this regulated business,
+efficiency is the decisive profitability driver. Consequently, I'm particularly
+proud that the German Federal Network Agency's most recent bench-
+marking assigned all of our regional network companies a particularly high
+efficiency factor of 100 percent. This again ranks them among the most
+efficient of Germany's nearly 900 electricity network operators. Two of
+our network companies were awarded an additional efficiency bonus by
+which they can increase their returns in the next regulation period. Through
+expansions and upgrades, we're already creating smart distribution grids
+that actively promote the convergence of power, heat, and mobility. We're
+thus paving the way for today's trend toward lower-carbon power gener-
+ation to become the true energy transformation of tomorrow. This pre-
+supposes, however, that policymakers in Berlin and Brussels finally make
+the necessary decisions. Instead of a patchwork of climate- and energy-
+policy regulations and subsidy scheme, the right approach is a carbon tax.
+If this isn't possible at the EU level, then individual countries will have
+to take action. We'll advocate this on our customers' behalf because only
+then will their efforts to modernize and decarbonize their energy systems
+be worthwhile.
+actually surpassed the prior-year figure and was likewise at the upper end
+of our forecast range. What makes me particularly optimistic for the
+future is that 2018 was again a strong year operationally: our earnings
+were driven predominantly by the improvement of our business.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+4.8
+Report of the Supervisory Board
+CEO Letter
+E.ON is entering the new financial year and is approaching the next steps of the
+innogy takeover with strong earnings and confidence. We delivered an outstanding
+operating and financial performance for the third year in a row. As anticipated,
+our 2018 adjusted EBIT of roughly €3 billion was slightly lower than in the prior
+year and at the upper end of our forecast range. Adjusted net income of €1.5 billion
+We're conceiving the new E.ON to be radically customer-led. Our customers-
+municipalities, companies, and households-are the ones who will decide how
+successful we'll be in the new energy world. They determine which energy products
+and services are important and to whom they entrust their energy project or the
+management of their energy network. This viewpoint alone guides us. We're deter-
+mined to provide our customers with the best there is in the new digital energy
+world. How far have we come in realizing this ambition?
+Going forward, the new E.ON will be Europe's first company to focus exclusively
+on smart grids and innovative customer solutions. We want to implement one of
+the most creative transactions in German industrial history, to seize the growth
+potential in the new energy world every more effectively, and thus to become even
+more attractive for you, our shareholders.
+Filing the transaction with the European Commission in January marked another
+milestone. We're firmly convinced that the takeover of innogy raises no antitrust
+issues overall and can be completed from mid-year onward. In addition, we've
+already made a series of decisions about the new E.ON's future organizational setup.
+It's clear, for example, that your company will continue to be called E.ON, have its
+headquarters in Essen, and have a very customer-proximate setup. In addition,
+we want to further enhance our innovativeness and to manage all of our network
+companies as we already do E.ON's. These early decisions will help us swiftly
+conclude the transaction after the approval from Brussels. And we continue to
+expect to realize all of the anticipated €600 to €800 million in synergies from
+2022 onward. The planned integration measures will be carried out in a socially
+responsible manner, in keeping with the tradition of the companies involved.
+About a year ago, E.ON and RWE reached an extensive asset-swap agreement
+under which E.ON will acquire RWE's 76.8-percent stake in innogy and, in turn,
+transfer substantially all of our renewables business to RWE. Since then, we've
+taken all the intermediate steps as planned. In June we made a voluntary public
+takeover offer for the stock of innogy's other shareholders, who tendered about
+9.4 percent of the stock to us. We're very satisfied with this result. The preparations
+for the integration and the antitrust approvals process are also fully on track.
+At our Annual Shareholders Meeting in May 2018, a large majority of you gave us
+the green light to acquire innogy and thus to give your E.ON an even sharper profile
+and even better growth prospects. We will be the energy company fully dedicated
+to the new energy world in which climate protection and customer benefit go hand
+in hand. For my Management Board colleagues and me, your trust confers an
+obligation to resolutely bring the vision of the new E.ON to life.
+Chairman of the Management Board
+Dr. Johannes Teyssen,
+Dear Shareholders,
+4
+CEO Letter
+Report of the
+Supervisory Board
+CEO Letter
+Compensation Report
+- Average turnover rate (%)
+Strategy and Objectives
+Cash provided by operating activities before interest and taxes¹
++1
+42,699
+43,302
+-5
+1,211
+1,145
+4.7
+4.7
+Employees (at year-end)¹
+Value added¹
+- Percentage of female employees
+After-tax cost of capital (%)
+6.4
+Pretax cost of capital (%)
+-0.25
+10.6
+10.4
+-3
+55,950
+54,324
++27
+6,708
+6.4
+8,518
+32
+- Percentage of female executives and senior managers
+e.on
+E.ON Group Financial Highlights
+€ in millions
+2018
+2017
++/-%
+Sales¹
+30,253
+37,965
+-20
+32
+Adjusted EBITDA¹, 2
+4,955
+-2
+-Regulated business
+2,783
+2,742
++1
+- Quasi-regulated and long-term contracted business
++1.65
+19.6
+21.2
+4,840
+ROCE (%)¹
+Total assets
+Equity
+3,524
+Net income/loss
+-18
+911
+745
+- Merchant business
++2
+486
+494
+- Quasi-regulated and long-term contracted business
+4,180
++4
+1,750
+-Regulated business
+-3
+3,074
+2,989
+828
+Adjusted EBIT1.2
+-16
+1,385
+1,162
+1,677
+-16
+Net income/loss attributable to shareholders of E.ON SE
+Adjusted net income¹, 2
+3,223
+-0.54
+3.9
+3.4
+Debt factor³
+-14
+19,248
+16,580
+Economic net debt (at year-end)¹
+-2,235
+4,087
+895
+-2,952
+2,853
+Cash provided by operating activities¹
++6
+3,308
+3,523
+Investments¹
++5
+1,427
+1,505
+-18
+3,925
+2018
+- Merchant business
++8
+Annual Report
+700,000
+43,456
+743,456
+700,000
+35,695
+735,695
+1,093,500 1,188,000
+(max.)1,2
+700,000
+43,456
+743,456
+1,350,000
+1,650,000
+825,000
+825,000
+675,000
+675,000
+- Share Matching Plan, first tranche (2013-2017)
+743,456
+700,000
+43,456
+743,456
+735,695
+700,000
+35,695
+(min.)
+2018
+Compensation allocated
+2017
+2018
+700,000
+43,456
+2018
+- Share Matching Plan, second tranche (2014-2018)
+825,000
+1,2See footnotes on page 93.
+2,151,523
+220,067
+1,931,456
+1,829,195
+33,936
+1,863,131
+3,743,456
+220,067
+3,963,523
+743,456
+220,067
+963,523
+- Performance Plan, first tranche (2017-2020)
+220,067
+2,463,523
+Total
+Service cost
+2,243,456
+2,235,695
+1,650,000
+825,000
+- Performance Plan, second tranche (2018-2021)
+Total
+33,936
+2,269,631
+Table of Compensation Granted and Allocated
+700,000
+Dr. Marc Spieker (member of the Management Board)
+Compensation granted
+- Share Matching Plan, first tranche (2013-2017)
+962,500
+481,250
+693,000
+787,500
+393,750
+434,109
+- Share Matching Plan, second tranche (2014-2018)
+434,109
+434,109
+25,776
+25,776
+25,776
+25,776
+408,333
+(max.)1,2
+408,333
+434,109
+2017
+- Performance Plan, first tranche (2017-2020)
+481,250
+Multi-year variable compensation
+One-year variable compensation
+Total
+Fringe benefits
+Fixed compensation
+€
+Table of Compensation Granted and Allocated
+- Performance Plan, second tranche (2018-2021)
+1,127,109
+54,807
+1,181,916
+434,109
+54,807
+488,916
+1,309,109
+54,807
+1,363,916
+1.2 See footnotes on page 93.
+Total
+Service cost
+Total
+962,500
+2,184,109
+54,807
+2,238,916
+2018
+Report of the Supervisory Board
+E.ON Stock
+- Performance Plan, second tranche (2018-2021)
+Total
+825,000
+1,650,000
+2,267,346
+Service cost
+Total
+700,000
+825,000
+2,267,442
+279,842
+2,547,284
+3,767,442
+279,842
+4,047,284
+1,860,846
+350,492
+2,211,338
+1,955,442
+279,842
+2,235,284
+1,2See footnotes on page 93.
+Corporate Governance Report
+96
+96
+767,442
+279,842
+1,047,284
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into any
+contingencies on behalf of the members of the Management
+Board in the 2018 financial year. Page 244 contains additional
+information about the members of the Management Board.
+- Performance Plan, first tranche (2017-2020)
+- Share Matching Plan, first tranche (2013-2017)
+700,000
+67,346
+67,442
+67,442
+767,346
+767,442
+767,442
+- Share Matching Plan, second tranche (2014-2018)
+675,000
+825,000
+825,000
+67,442
+767,442
+1,350,000
+1,650,000
+700,000
+67,346
+767,346
+700,000
+1,093,500
+67,442
+767,442
+1,188,000
+675,000
+Payments Made to Former Members of the Management Board
+Total payments made to former Management Board members
+and to their beneficiaries amounted to €12.5 million (prior
+year: €12.4 million). Provisions of €155.8 million (prior year:
+€159 million)-pursuant to IFRS-have been provided for
+pension obligations to former Management Board members
+and their beneficiaries.
+Compensation Plan for the Supervisory Board
+The compensation of Supervisory Board members is determined
+by the Annual Shareholders Meeting and governed by Section 15
+of the Company's Articles of Association. The purpose of the
+compensation plan is to enhance the Supervisory Board's inde-
+pendence for its oversight role. Furthermore, there are a num-
+ber of duties that Supervisory Board members must perform
+irrespective of the Company's financial performance. Supervisory
+Board members-in addition to being reimbursed for their
+expenses-therefore receive fixed compensation and compen-
+sation for committee duties.
+Fixed compensation
+€
+2018
+2017
+2018
+2018
+2018
+Fringe benefits
+2017
+Compensation granted
+Dr. Karsten Wildberger (member of the Management Board)
+95
+95
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+Compensation allocated
+Total
+One-year variable compensation
+Multi-year variable compensation
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The
+other members of the Supervisory Board receive compensation
+of €140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit and
+Risk Committee, an additional €110,000. Other committee
+chairmen receive an additional €140,000; committee members, an
+additional €70,000. Members serving on more than one com-
+mittee receive the highest applicable committee compensation
+only. In contradistinction to the compensation just described,
+the Chairman and the Deputy Chairmen of the Supervisory Board
+receive no additional compensation for their committee duties.
+In addition, Supervisory Board members are paid an attendance
+fee of €1,000 per day for meetings of the Supervisory Board
+or its committees. Individuals who were members of the Super-
+visory Board or any of its committees for less than an entire
+financial year receive pro rata compensation.
+Supervisory Board Compensation in 2018
+The total compensation of the members of the Supervisory
+Board amounted to €4.1 million (prior year: €4.5 million).
+As in the prior year, no loans were outstanding or granted to
+Supervisory Board members in the 2018 financial year.
+Supervisory Board Compensation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+97
+Supervisory Board
+compensation
+Compensation for
+committee duties
+Attendance fees
+Supervisory Board
+compensation from
+affiliated companies
+Total
+(max.)1,2
+(min.)
+700,000
+350,492
+2,617,838
+Pensions of Management Board Members Pursuant to IFRS
+2018
+13,000
+15,000
+24,469
+22,243
+287,469
+287,243
+Silvia Šmátralová
+(until May 9, 2018)
+58,333
+140,000
+4,000
+6,000
+8,938
+24,367
+71,271
+170,367
+Dr. Karen de Segundo
+140,000
+140,000
+110,000
+140,000
+110,000
+140,000
+13,114
+233,821
+233,114
+Szilvia Pinczésné Márton
+(since May 9, 2018)
+93,333
+3,000
+Andreas Schmitz
+140,000
+140,000
+156,667
+82,500
+10,000
+9,000
+96,333
+306,667
+231,500
+Fred Schulz
+(until May 9, 2018;
+since May 29, 2018)
+140,000
+15,821
+122,500
+11,000
+52,500
+8,000
+10,000
+Albert Zettl
+140,000
+140,000
+70,000
+52,500
+8,000
+11,000
+Total
+2,833,331 3,180,000 1,015,001
+902,500
+138,000
+171,000
+15,808
+20,000
+85,036
+8,000
+20,000
+233,808 210,500
+238,000 223,500
+276,277 4,071,368 4,529,777
+70,000
+9,000
+140,000
+Ewald Woste
+289,000
+273,500
+Dr. Theo Siegert
+(until May 9, 2018)
+58,333
+140,000
+75,000
+180,000
+7,000
+11,000
+140,333
+331,000
+Elisabeth Wallbaum
+140,000
+140,000
+110,000
+10,000
+6,000
+260,000 146,000
+140,000
+€
+10,000
+70,000
+332,000
+Erich Clementi
+260,000
+140,000
+9,000
+7,000
+269,000
+147,000
+Andreas Scheidt
+320,000 320,000
+9,000
+13,000
+170,853
+329,000 503,853
+Clive Broutta
+140,000
+140,000
+70,000
+70,000
+138,333
+8,000
+12,000
+320,000
+2018
+Dr. Karl-Ludwig Kley
+440,000
+2017
+440,000
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+8,000
+13,000
+448,000
+453,000
+Prof. Dr. Ulrich Lehner
+(until May 9, 2018)
+133,333
+5,000
+8,000
+8,000
+218,000
+140,000
+96,667
+52,500
+9,000
+10,000
+245,667
+202,500
+Baroness
+Denise Kingsmill CBE
+(until May 9, 2018)
+58,333
+140,000
+4,000
+3,000
+62,333
+143,000
+Eugen-Gheorghe Luha
+140,000
+140,000
+70,000
+140,000
+218,000
+Carolina Dybeck Happe
+17,700
+Klaus Fröhlich
+(since May 29, 2018)
+93,333
+46,667
+2,000
+142,000
+Tibor Gila
+(until May 9, 2018)
+58,333
+140,000
+4,000
+6,000
+62,333
+146,000
+Thies Hansen
+(until Dec. 31, 2017)
+140,000
+110,000
+10,000
+277,700
+Compensation allocated
+2017
+Fixed compensation
+2018
+(min.)
+408,333
+3,608,182
+751,857
+760,078
+4,390,833
+4,872,083
+Total
+641,804
+577,297
+141,268
+128,706
+825,000
+825,000
+Dr. Karsten Wildberger
+276,179
+412,378
+141,268
+128,706
+6,202,490
+¹Expense/income pursuant to IFRS 2 for performance rights and virtual shares existing in the 2018 financial year.
+Long-term variable compensation granted for the 2018 financial
+year totaled €4.9 million. Note 11 to the Consolidated Financial
+The total compensation of the members of the Management
+Board in the 2018 financial year amounted to €15.9 million,
+about 13.6 percent above the prior-year figure of €14.0 million
+based on the Management Board's total compensation disclosed
+in the 2017 Annual Report.
+The individual members of the Management Board had the
+following total compensation.
+Total Compensation of the Management Board
+92
+Fixed annual
+compensation
+Value of stock-based
+Bonus
+Other compensation
+825,000
+compensation granted¹
+91
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Statements contains additional details about stock-based
+compensation.
+Management Board Pensions in 2018
+Total Compensation in 2018
+825,000
+104,171
+Expense (+)/income (-) 1
+Number of virtual
+shares granted
+at time of granting
+Value of virtual shares
+Stock-based Compensation
+The long-term variable compensation of Management Board
+members resulted in the following expenses in 2018:
+The Supervisory Board issued the second tranche of the E.ON
+Performance Plan (2018-2021) for the 2018 financial year and
+granted Management Board members virtual shares of E.ON
+stock. The present value assigned to the virtual shares of E.ON
+stock at the time of granting-€6.41 per share-is shown in
+the following tables entitled "Stock-based Compensation" and
+"Total Compensation of the Management Board." The value per-
+formance of this tranche will be determined by the performance
+of E.ON stock, per-share dividends, and E.ON TSR relative to
+the TSR of the companies in its peer index, the STOXX® Europe
+600 Utilities, for the years 2018 through 2021. The actual
+payments made to Management Board members in 2022 may
+deviate, under certain circumstances considerably, from the
+calculated figures disclosed here.
+The annual bonuses of Management Board members for 2018
+totaled €7.0 million (prior year: €5.8 million). In determining
+the performance factor, the Supervisory Board discussed and
+assessed the Management Board's overall performance.
+Performance-Based Compensation in 2018
+The Supervisory Board reviewed the Management Board's
+compensation plan and the components of individual members'
+compensation. It determined that the Management Board's
+compensation is appropriate from both a horizontal and vertical
+perspective and passed a resolution on the performance-based
+compensation described below. It made its determination of
+customariness from a horizontal perspective by comparing
+the compensation with that of companies of a similar size. Its
+review of appropriateness included a vertical comparison of
+the Management Board's compensation with that of the Com-
+pany's top management and the rest of its workforce. In the
+Supervisory Board's view, in the 2018 financial year there was
+no reason to adjust the Management Board's compensation.
+Management Board Compensation in 2018
+96
+90
+Corporate Governance Report
+The service agreements of Management Board members
+include a non-compete clause. For a period of six months after
+the termination of their service agreement, Management Board
+members are contractually prohibited from working directly
+or indirectly for a company that competes directly or indirectly
+with the Company or its affiliates. Management Board mem-
+bers receive a compensation payment for the period of the
+non-compete restriction. The prorated payment is based on
+100 percent of their contractually stipulated annual target
+compensation (without long-term variable compensation) but
+is, at a minimum, 60 percent of their most recently received
+compensation.
+In the event of a premature loss of a Management Board position
+due to a change of control, Management Board members are
+entitled to settlement payments. The change-of-control agree-
+ments stipulate that a change in control exists in three cases: a
+third party acquires at least 30 percent of the Company's voting
+rights, thus triggering the automatic requirement to make an
+offer for the Company pursuant to Germany's Stock Corporation
+Takeover Law; the Company, as a dependent entity, concludes
+a corporate agreement; the Company is merged with a non-affili-
+ated company. Management Board members are entitled to a
+settlement payment if, within 12 months of the change of con-
+trol, their service agreement is terminated by mutual consent,
+expires, or is terminated by them (in the latter case, however, only
+if their position on the Management Board is materially affected
+by the change in control). Management Board members' settle-
+ment payment consists of their base salary and target bonus
+plus fringe benefits for two years. In accordance with the German
+Corporate Governance Code, the settlement payments for
+Management Board members may not exceed 100 percent
+of the above-described settlement cap.
+In line with the German Corporate Governance Code's recommen-
+dation, the service agreements of Management Board members
+include a settlement cap. Under the cap, settlement payments
+in conjunction with a termination of Management Board duties
+may not exceed the value of two years' total compensation
+or the total compensation for the remainder of the member's
+service agreement.
+€
+2018
+2017
+2018
+75,078
+481,250
+Dr. Thomas König (since June 1, 2018)
+1,860,899
+2017
+3,423,608
+1,570,520
+943,816
+172,660
+157,307
+Dr. Marc Spieker
+1,008,333
+Dr.-Ing. Leonhard Birnbaum
+296,661
+270,281
+1,732,500
+1,732,500
+Dr. Johannes Teyssen
+2018
+2017
+1,008,333
+Settlement Payments for Termination of Management Board
+Duties
+Corporate Governance Report
+2Dr. König was already employed by the Company in the prior year. Due to his previous years of service, the cash value of his pension entitlement was €1,584,306 at December 31, 2017.
+2018
+2017
+504,248 26,250,050 24,767,846
+26,775 1,450,521 1,329,403
+Dr. Thomas König¹, 2
+(since June 1, 2018)
+Dr. Marc Spieker¹
+Dr. Karsten Wildberger¹
+79,088
+237,498
+290,723
+50,303
+356,636
+24,281
+17,431
+10,881
+16,367
+6,144
+2,234,273
+861,135
+719,674
+830,032
+518,162
+¹Contribution Plan E.ON Management Board.
+²Dr. König was already employed by the Company in the prior year. Due to his previous years of service, the cash value of his pension entitlement was €1,982,076 at December 31, 2017.
+(€)
+(€)
+2017
+2018
+520,125
+27,917
+1,369,019
+398,343
+Current pension entitlement at December 31
+Additions to provisions for pensions
+Cash value at December 31
+As a percentage
+of annual base
+compensation
+Thereof interest cost
+2018
+2017
+Pensions of Management Board Members Pursuant to the German Commercial Code
+Dr. Johannes Teyssen
+75
+2018
+930,000
+(€)
+2017
+2018
+(€)
+2017
+930,000
+Dr.-Ing. Leonhard Birnbaum¹
+1,378,642
+332,609
+75
+Pursuant to IFRS and the German Commercial Code, the cash
+values of Management Board pensions for which provisions
+are required increased as of December 31, 2018, relative to year-
+end 2017. This resulted in part from increases in the number
+of years of service and from the fact that there were five active
+members of the Management Board (prior year: four members).
+Another reason is that the actuarial interest rate E.ON uses
+for discounting was significantly below the prior-year figure.
+Current pension entitlement at December 31
+Dr.-Ing. Leonhard Birnbaum¹
+2,558,564
+156,636
+2018
+1,823,372 696,853
+95,578 40,104
+(€)
+2017
+686,225
+39,868
+(€)
+2018
+2017
+21,494,788 18,936,224
+1,246,423 1,089,787
+356,229
+58,302
+1,940,535
+66,048
+190,863
+148,005
+188,871
+23,324
+15,278
+19,481
+9,074
+699,857
+606,025
+633,809
+415,162
+2017
+2018
+(€)
+(€)
+2017
+930,000
+Dr. Thomas König¹, 2
+(since June 1, 2018)
+Dr. Marc Spieker¹
+Dr. Karsten Wildberger¹
+¹Contribution Plan E.ON Management Board.
+Additions to provisions for pensions
+Cash value at December 31
+The following table provides an overview of the current pension
+obligations to Management Board members, the additions to
+provisions for pensions, and the cash value of pension obligations
+for the 2018 financial year. The cash value of pension obligations
+Dr. Johannes Teyssen
+As a percentage
+Thereof interest cost
+compensation
+2018
+2017
+2018
+75
+75
+930,000
+of annual base
+In line with the German Corporate Governance Code's recommen-
+dation, the Supervisory Board reviews, on a regular basis, the
+benefits level of Management Board members and the resulting
+annual and long-term expense and, if necessary, adjusts the
+payments.
+Pursuant to the provisions of the German Occupational Pensions
+Improvement Act, Management Board members' pension entitle-
+ments are not vested until they have been in effect for five years.
+This applies to both contribution-based and final-salary-based
+pension plans.
+The Company has agreed to a pension plan based on final salary
+for the Management Board member, Dr. Johannes Teyssen, who
+was appointed to the Management Board before 2010. Following
+the end of his service for the Company, Dr. Johannes Teyssen is
+entitled to receive lifelong monthly pension payments in three
+cases: reaching the age of 60, permanent incapacitation, and a
+so-called third pension situation. The criteria for this situation are
+met if the termination or non-extension of Dr. Johannes Teyssen's
+service agreement is not due to his misconduct or rejection
+of an offer of extension that is at least on a par with his existing
+service agreement. In the third pension situation, Dr. Johannes
+Teyssen would receive an early pension during the period between
+the end of his service and his reaching 60 years of age (transi-
+tional allowance). Dr. Johannes Teyssen's pension entitlements
+provide for annual pension payments equal to 75 percent of his
+annual base salary. The full amount of any pension entitlements
+from earlier employment is offset against these payments. In
+addition, in the case of a Management Board member's death,
+the pension plan includes benefits for the widow and each child
+that are equal to 60 percent and 15 percent, respectively, of
+the deceased's pension entitlement. Together, pension payments
+to a widow or widower and children may not exceed 100 percent
+of the deceased Management Board member's pension.
+8,439,882
+6,077,187
+6,673,827
+1The maximum amount disclosed under benefits granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
+2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 88, applies as well.
+Table of Compensation Granted and Allocated
+2017
+2018
+2018
+€
+is calculated pursuant to IFRS and the German Commercial
+Code. An actuarial interest rate according to IFRS of 2.0 percent
+(prior year: 2.1 percent) was used for discounting; the actuarial
+interest rate pursuant to the German Commercial Code was
+3.21 percent (prior year: 3.68 percent).
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+(min.)
+800,000
+27,117
+827,117
+800,000
+27,212
+827,212
+858,517
+864,771
+858,517
+858,517
+2,139,882
+3,465,000
+1,635,221
+2,039,145
+- Share Matching Plan, first tranche (2013-2017)
+1,635,221
+- Share Matching Plan, second tranche (2014-2018)
+2,039,145
+- Performance Plan, first tranche (2017-2020)
+- Performance Plan, second tranche (2018-2021)
+Total
+800,000
+27,212
+827,212
+1,732,500
+Total
+4,430,845
+864,771
+5,295,616
+1,732,500
+4,431,365
+858,517
+5,289,882
+3,465,000
+1,281,365
+7,581,365
+5,212,416
+5,815,310
+Service cost
+1,732,500
+825,000
+1,008,333
+3,218,714
+304,692
+3,523,406
+1,2See footnotes above.
+Corporate Governance Report
+Table of Compensation Granted and Allocated
+94
+Dr. Thomas König (member of the Management Board since June 1, 2018)
+Compensation granted
+2017
+2018
+€
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+408,333
+2,496,611
+371,568
+2,868,179
+4,493,878
+304,692
+4,798,570
+827,212
+304,692
+1,131,904
+2,016,666
+1,008,333
+2018
+(max.)1,2
+800,000
+27,212
+827,212
+1,650,000
+2,016,666
+Dr.-Ing. Leonhard Birnbaum (member of the Management Board)
+Compensation granted Compensation allocated
+2017
+2018
+800,000
+27,117
+827,117
+1,336,500
+800,000
+27,212
+827,212
+1,452,000
+- Share Matching Plan, first tranche (2013-2017)
+332,994
+332,994
+939,502
+825,000
+- Share Matching Plan, second tranche (2014-2018)
+- Performance Plan, first tranche (2017-2020)
+1,008,333
+- Performance Plan, second tranche (2018-2021)
+Total
+2,660,450
+Service cost
+Total
+371,568
+3,032,018
+1,008,333
+2,660,545
+304,692
+2,965,237
+939,502
+1,732,500
+2,494,800
+2,296,350
+2018
+2017
+2018
+2017
+40,845 1,732,500 1,732,500
+27,117 1,008,333 1,008,333
+5,508,665
+3,287,545
+5,309,695
+3,171,950
+Dr. Thomas König
+(since June 1, 2018)²
+408,333
+693,000
+25,776
+481,250
+1,608,359
+Dr. Marc Spieker
+700,000 700,000 1,188,000 1,093,500
+43,456
+2017
+2018
+41,365
+27,212
+800,000 800,000 1,452,000 1,336,500
+2,296,350
+of service, the attainment of company targets, and interest rates.
+For a Management Board member enrolled in the plan at the
+age of 50, the company-financed, contribution-based pension
+payment is currently estimated to be between 30 and 35 percent
+of his or her base salary (without factoring in pension benefits
+accrued prior to being appointed to the Management Board).
+89
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Dr. Karsten Wildberger
+Total
+Other
+€
+2018
+2017
+2018
+2017
+Dr. Johannes Teyssen
+Dr.-Ing. Leonhard Birnbaum
+1,240,000 1,240,000
+2,494,800
+Total
+700,000 700,000 1,188,000 1,093,500
+3,848,333 3,440,000 7,015,800 5,819,850
+67,442
+205,251
+1,240,000
+2018
+(min.)
+1,240,000
+40,845
+1,280,845
+41,365
+1,281,365
+41,365
+1,281,365
+2018
+(max.)1,2
+1,240,000
+41,365
+1,281,365
+1,240,000
+Compensation allocated
+2017
+1,240,000
+40,845
+1,240,000
+41,365
+1,280,845
+1,281,365
+1,417,500
+1,417,500
+2,835,000
+2018
+2018
+Multi-year variable compensation
+Total
+35,695 825,000 825,000 2,756,456 2,654,195
+67,346 825,000 825,000 2,780,442 2,685,846
+171,003 4,872,083 4,390,833 15,941,467 13,821,686
+¹The present value assigned to the virtual shares of E.ON stock at the time of granting for the second tranche of the E.ON Performance Plan was €6.41 per share.
+2Prorated compensation because joined Management Board at roughly mid-year.
+The following table shows the compensation granted and
+allocated in 2018 in the format recommended by the German
+Corporate Governance Code:
+Table of Compensation Granted and Allocated
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+One-year variable compensation
+Combined Group Management Report
+93
+Dr. Johannes Teyssen (Chairman of the Management Board)
+Compensation granted
+2017
+2018
+€
+Fixed compensation
+Fringe benefits
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+The Company has taken out D&O insurance for Management
+Board and Supervisory Board members. In accordance with
+the German Stock Corporation Act and the German Corporate
+Governance Code's recommendation, this insurance includes
+a deductible of 10 percent of the respective damage claim
+for Management Board and Supervisory Board members. The
+deductible has a maximum cumulative annual cap of 150 percent
+of a member's annual fixed compensation.
+CEO Letter
+CEO Letter
+In the first quarter of 2018 all top 100 executives took part in a
+mandatory HSE upskilling workshop. The purpose was to expand
+or refresh their HSE skills, reinforce their awareness of their
+personal responsibility for HSE, and communicate the main ele-
+ments of our HSE caring culture.
+and E.ON Connecting Energies in Germany and at our distribu-
+tion system operator in Romania in 2018. It trains managers
+to recognize safety risks early and to motivate their employees
+to work safely and responsibly.
+We place great emphasis on continually providing our senior
+managers with training to enable them to live up to their respon-
+sibility for H&S and to ensure that the workplaces for which they
+are responsible are healthy and safe. The one-day workshop for
+senior managers at our operating units, which was developed in
+2017, was conducted at our four distribution system operators
+To live up to our commitment to our employees' H&S, our HSE
+management assigns responsibilities clearly and sets minimum
+standards (see HSE Management below). These apply not only
+to our employees but also to contractor employees who do work
+on our behalf. All E.ON operating units are required to have an
+H&S management system certified to ISO 45001 (ISO 45001
+replaced OHSAS 18001), a globally recognized standard for such
+systems. Certification requires an annual management review.
+The reviews are conducted by the units themselves and are a
+prerequisite for certification to be renewed. If necessary, Corpo-
+rate Audit and HSE at our corporate headquarters conduct HSE
+audits to determine whether our standards are being met. To
+decide whether an audit of a unit is necessary, we analyze its
+accidents from the previous year as well as current risk assess-
+ments. In addition to audits, performance indicators for lost time,
+accidents, and dangerous situations also help us investigate
+accident causes and conduct comprehensive risk analyses. The
+E.ON Management Board is informed about severe accidents,
+developments relating to accidents, and related measures and
+programs by means of monthly reports from HSE and periodic
+consultations with the Senior Vice President for Sustainability &
+HSE. In addition, the member of the E.ON Management Board
+responsible for HSE receives a weekly safety update and presents
+it at the board meetings. The update contains major incidents
+that could have led to the death of employees, contractors, cus-
+tomers, or third parties. E.ON investigates all accidents carefully,
+learns from them, and takes steps to avoid them in the future.
+Our approach to H&S is proactive and preventive, and we have
+zero tolerance for accidents. Consequently, our overriding objec-
+tive is to prevent accidents from ever happening. By signing the
+Düsseldorf Statement on the Seoul Declaration on Safety and
+Health at Work and the Luxembourg Declaration on Workplace
+Health Promotion in 2009, we pledged to promote a culture of
+prevention.
+105
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Our employees' health and safety ("H&S") are essential for their
+well-being and thus for our company's success. Some of our
+employees perform potentially risky tasks, such as working on
+power distribution networks. Strict safety standards are there-
+fore of particular importance to us. First and foremost, accidents
+endanger our employees' health. But accidents may also dam-
+age property, cause work stoppages, and harm our reputation.
+Demographic change and a rapidly changing work environment
+present additional challenges: we need to address the needs
+of an aging workforce and maintain our people's ability to work.
+Occupational Health and Safety
+Our 2018 materiality analysis showed that diversity narrowly
+missed the threshold for materiality and that other employee
+issues currently have a higher priority. Consequently, although
+diversity remains an important issue for us, it is no longer mate-
+rial for our non-financial reporting. Moreover, diversity is a broad
+issue, and the challenges vary by country and sometimes even
+by region. Country-specific initiatives and targets are therefore
+more impactful than a single uniform approach. In the wake of
+our Phoenix reorganization program, we have therefore adopted
+a different approach to managing diversity and now delegate it
+to our units.
+Information in our strategy and measures concerning employee
+development and providing attractive working conditions can
+be found in the Employees chapter in our Combined Group
+Management Report on pages 44 and 45.
+To shape tomorrow's energy world, remain competitive, and
+launch new businesses, we need talented, dedicated people
+whose personal and professional skills match our current and
+future needs. Yet with demographic change affecting the labor
+market, skilled workers are more in demand than ever. We need
+to maintain an attractive, supportive, and inclusive work envi-
+ronment in which our people can realize their potential. It is the
+only way we will be able to attract great employees and retain
+those we already have. Doing all this in a rapidly changing busi-
+ness environment and amid technological developments and
+corporate restructuring poses challenges for our human resources
+("HR") management.
+Aspect 2: Employee Matters
+Our energy consumption in 2018 increased by 38 million giga-
+joules year on year to 239 million gigajoules. An extension of
+the survey method was responsible for all of the increase. This
+will limit the information value of a comparison with the sub-
+sequent year's figures.
+We had one serious environmental incident in 2018. It occurred
+at Avacon, a subsidiary in Germany. The depressurization of a
+high-pressure gas pipeline resulted in the unintentional release
+of oil in aerosol form in the immediate vicinity. This affected our
+equipment, an adjacent walking path, and part of a nearby field.
+When the oil leak was detected, it was stopped immediately by
+closing the blow-out valve.
+The E.ON Management Board is informed about serious (cate-
+gory 3) environmental incidents by means of monthly reports
+from HSE and periodic consultations with the Senior Vice Presi-
+dent for Sustainability & HSE. In the case of a major incident
+(category 4), the unit at which it occurred report it directly to
+the Management Board within 24 hours.
+In several countries where we operate, employees who have
+questions or concerns about their physical or mental health
+cancontact a free, independent, and strictly confidential health
+advisory service (employee assistance program). In Germany,
+this service is a central component of the Group Works Health
+Agreement, which was concluded between management and
+the Group Works Council in 2015.
+new E.ON Health, Safety, Environment, & Climate Protection
+Policy Statement, which supersedes previous statement and is
+signed by our Management Board. It articulates our commitment
+to comply with all HSE laws and regulations and defines the
+appropriate management systems for this. It pledges us to pro-
+tect the environment and the earth's climate, reduce our energy
+consumption, conserve resources, operate responsibly, and strive
+for continual improvement in our environmental performance.
+Energy management - continually looking for ways to reduce
+our own energy consumption - plays an important role as part of
+our environmental management and helps us to reduce our GHG
+emissions. At all sites at which we have implemented energy
+efficiency management systems according to ISO 50001, we
+measure and analyze the energy consumed by our facilities and
+office buildings. The findings help us identify opportunities to
+conserve energy and recommend cost-effective energy-efficiency
+measures. We've already implemented several, such as installing
+smart LED lighting in buildings, and other smart building controls.
+In 2018 we developed a new campaign called HOW WE CARE
+to foster a caring culture. It will be carried out by managers
+across E.ON at the start of 2019. It is supported by a safety-walk
+app that helps managers dialogue with employees to identify
+H&S risks and issues in the workplace. As part of the campaign,
+we will issue guidelines for the use of mobile phones in vehicles.
+By instructing employees, for example, to avoid calls and refrain
+from listening to machine-read email messages while driving,
+we aim to reduce the risk of traffic accidents.
+Separate Combined Non-Financial Report
+Part of our corporate strategy is to adapt our distribution grids
+to the emerging distributed energy world. They form a crucial
+link between electricity producers and consumers. Only if our
+distribution grids function properly and we equip them to meet
+the challenges of the new energy world can we continue to
+ensure a reliable electricity supply in the future. For this purpose,
+we continually upgrade our existing infrastructure with smart-
+grid technology. This will enable us to better manage energy
+generation, distribution, and storage.
+Our task as an energy company and distribution grid operator is
+to ensure that our customers have a secure supply of electricity.
+A reliable electricity supply is essential for industrialized countries
+to be able to maintain their infrastructure and meet their inhab-
+itants' needs. For example, industrial customers that operate
+a high-precision production facility require a constant network
+frequency. If the frequency fluctuates, machinery can break
+down, resulting in higher costs. A power outage can have serious
+consequences, and not just for industrial customers. Whether at
+companies, government agencies, or households, most processes
+are no longer possible without electricity. One of the challenges
+in energy supply is that, increasingly, electricity comes from dis-
+tributed sources. As a result, electricity is fed into our networks
+at many different points. Moreover, renewables feed-in fluctuates
+because it depends on the weather and other factors beyond
+our control.
+Security of Supply
+Aspect 3: Social Matters
+Our employees' health rate was 96.3 percent in 2018. It reflects
+the number of days actually worked in relation to agreed-on work
+time. The 2018 figure was again high (2017: 96.6 percent).
+Despite our extensive safety measures, we very much regret to
+report that three of our employees and two contractor employees
+died in 2018 while working for us. We immediately investigate
+all fatal accidents to determine the exact chain of events that led
+up to them. In addition, within 24 hours a report must be sub-
+mitted to the Management Board of the unit where the accident
+occurred and to the member of the E.ON Management Board
+responsible for H&S. The aim is to identify accident root causes
+and to take all necessary steps to prevent similar accidents in
+the future.
+In 2018 our employee TRIF of 2.5 was slightly higher than the
+prior-year figure (2.3). By contrast, contractor TRIF declined
+in 2018. The different direction of these two trends may be due
+to the fact that in 2018 our Renewables segment in particular
+hired as employees a number of technicians who had previously
+worked for us as contractors. This segment has an above-average
+number of accidents compared with our other segments, which
+led to the increase in employee TRIF. We also assume that the
+introduction of our new online incident management system
+improved our reporting culture.
+¹TRIF measures the number of reported fatalities and occupational injuries and illnesses per
+million hours of work. It includes injuries that occur during work-related travel that result in
+lost time or no lost time and/or that lead to medical treatment, restricted work, or work at a
+substitute work station.
+3
+2.5
+2.5
+2
+2.3
+1
+0
+2016
+2017
+2018
+Employee TRIF¹
+Total recordable injury frequency (TRIF) is our key performance
+indicator for safety. It measures the number of recordable work-
+related injuries and illnesses per million hours of work. We have
+included contractor employees' in our safety performance since
+2011 (combined TRIF). The HSE improvement plans of many
+of our units set annual targets for combined TRIF, which aim to
+reach our goal of zero accidents. Our most direct influence is on
+reducing the number of accidents involving our own employees.
+We therefore present below our employee TRIF performance for
+the past three years.
+106
+The findings of our 2018 audits show that our H&S management
+systems are largely effective. In some cases, however, we iden-
+tified room for improvement. Examples included a gap in the
+effectiveness of how H&S is communicated to engineers, project
+managers, and contractors on the operational side of the business
+and a failure of some employees to carry out a risk assessment
+prior to performing a task or putting on their personal protective
+equipment. We initiated training courses for employees and
+managers at these units and took steps to eliminate weaknesses
+in their processes.
+104
+Separate Combined Non-Financial Report
+We address all environmental requirements in the framework of
+our HSE management (see above) and have also defined our own
+requirements, which are mandatory across E.ON. Our Sustain-
+ability & HSE Function Policy requires all E.ON units (except for
+very small negligible entities) to have in place an environmental
+management system certified to ISO 14001 or EMAS, interna-
+tionally recognized standards for such systems. These certifica-
+tions require us to evaluate environmental aspects and impacts
+and strive for continual improvement. In 2018, we adopted a
+In mid-2017 the E.ON Management Board set new climate tar-
+gets for 2030. We now aim to reduce our carbon footprint by
+30 percent and that of our customers (their carbon emissions per
+kWh of power we sell them) by 50 percent, both relative to a
+2016 baseline. Indirect carbon emissions (Scope 3), which arise
+We calculate emissions using the globally recognized WRI/
+WBCSD Greenhouse Gas Protocol Corporate Accounting and
+Reporting Standard ("GHG Protocol").
+103
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The activities of our core businesses reflect the key emerging
+energy trends and help protect the earth's climate. But we also
+want to shrink our own carbon footprint. We measure the annual
+carbon emissions from our power and heat generation and from
+our business activities that are not directly related to energy
+generation. We disclose these figures in our sustainability report-
+ing. We factor in upstream and downstream emissions as well.
+Distribution networks like ours are the backbone of the energy
+transition. They facilitate low-carbon energy generation and the
+deployment of innovative, efficient energy solutions: wind farms,
+battery-storage systems, and other climate-friendly technologies
+are connected to our distribution grids. Going forward, smart
+grids will serve as the transformative platform for the innovative
+technologies and business models that are essential to the
+energy transition's success.
+Our Chief Operating Officer - Commercial, who is a member
+of the E.ON Management Board, has overall responsibility for
+our customer-oriented businesses, including solutions enabling
+customers to generate their own climate-friendly energy. Our
+regional units' sales teams implement and market energy and
+e-mobility solutions for all classes of customers. Cross-regional
+teams at corporate headquarters coordinate these activities in
+technical, commercial, and strategical terms. E.ON Connecting
+Energies is responsible for the design of technical solutions for
+commercial customers in Western and Central Europe, the
+United Kingdom, and Scandinavia. The E.ON Management Board
+is informed on an ongoing basis about developments at all our
+customer-oriented businesses through financial performance
+reports as well as presentations at its meetings describing oper-
+ational progress using key performance indicators.
+energy consumption. We design embedded cogeneration solu-
+tions and energy-efficiency plans for commercial customers.
+And we develop integrated solutions for cities, district developers,
+and housing companies that encompass elements like efficient
+heating and cooling, low-carbon generation, and smart energy
+management. In addition, we offer e-mobility solutions such
+as electric-vehicle charging systems for homes and businesses
+as well as public charging infrastructure for cities that help
+make transport less dependent on fossil fuels and thus less car-
+bon-intensive.
+GHG emissions can be reduced not only by low-carbon generation
+technologies but also by energy conservation and recovery. Our
+energy solutions help our customers use energy more efficiently
+and recover energy. We offer individually tailored solutions to
+residential, industrial, commercial, and public sector customers.
+Our portfolio includes easy-to-use online energy audits and
+apps that help residential customers better understand their
+Continuing to expand our renewables business helps society
+move toward a climate-friendly energy supply. This business is
+managed by E.ON Climate & Renewables ("EC&R"). Founded in
+2007, EC&R develops, builds, and operates large offshore and
+onshore wind farms as well as solar farms and energy-storage
+systems. Its Chief Executive Officer reports directly to our Chief
+Operating Officer - Integration, a member of the E.ON Manage-
+ment Board. She informs him of EC&R's key financial and techni-
+cal performance indicators, which can be found in our Combined
+Group Management Report. In 2018 EC&R was active in the
+United States, the United Kingdom, Germany, Denmark, Sweden,
+Italy, and Poland. In addition to these large-scale projects, we
+also deliver solutions that enable medium-sized companies, resi-
+dential customers, and public entities to generate their own
+climate-friendly energy.
+Climate change and environmental damage caused by it are
+serious and affect us all. The generation and use of conventional
+energy are accompanied by greenhouse gas ("GHG") emissions.
+Low-carbon energy generation and the efficient use of energy
+therefore play key roles in reducing emissions and limiting global
+warming. E.ON is an energy company focused entirely on the
+new energy world, climate protection is therefore a crucial issue
+for us. The transition to a low-carbon economy will require the
+concerted efforts of everyone who makes or consumes energy.
+It poses challenges for our competitiveness but also creates
+opportunities for us to grow our business. Many countries, com-
+munities, and companies have already embraced climate-friendly
+energy production and energy efficiency to achieve their car-
+bon-reduction targets. Our strategic focus on renewables and
+energy-efficient customer solutions is fully in line with these
+global trends.
+Climate Protection
+Aspect 1: Environmental Matters
+102
+Separate Combined Non-Financial Report
+HSE incidents are reported via our online incident management
+system PRISMA (Platform for Reporting on Incident and Sustain-
+ability Management and Audits) in five categories of incidents:
+They range from 0 (low) to 4 (major). According to our HSE
+Standard on Incident Management, units must use PRISMA to
+report category 4 incidents to the HSE division at corporate
+headquarters within 24 hours. We systematically investigate
+and analyze incidents depending on their severity and/or poten-
+tial to end up in an actual incident and use the findings to take
+preventive action. All E.ON units must adopt and use PRISMA.
+primarily in connection with the purchase and use of power and
+gas in our energy sales business, account for most of our carbon
+footprint. To meet these targets, we have defined measures
+to reduce our emissions in all three scopes of the GHG Protocol.
+We intend to reduce our direct emissions (Scope 1) by updating
+and optimizing our gas networks and our indirect emissions
+(Scope 2) by conserving energy ourselves and reducing line losses
+in our network business. Our Scope 3 objective is to increase the
+share of renewable energy we offer our customers.
+CO2 Emissions (total CO2 equivalents in million metric tons)
+Scope 1: Direct emissions from our own business operations
+Scope 2: Indirect emissions associated with our electricity and heat consumption²
+Scope 3: Indirect emissions from all other business operations
+Alongside climate protection, it is our objective to prevent envi-
+ronmental damage and to have as little environmental impact
+as possible. Even if we do not operate large-scale conventional
+assets any longer, we still build and operate distribution networks
+and large-scale renewable assets and also consume energy
+and other resources at our facilities and offices. In order to retain
+our stakeholders' trust and license to operate we have to ensure
+we comply with all international and national environmental
+laws and regulations. Our environmental management is guided
+by the precautionary principle endorsed by the United Nations.
+Environmental Management
+82.75
+79.20
+69.06
+74.02
+71.02
+61.31
+3.36
+3.371
+Our distribution system operators ("DSOS") are responsible for
+the safe and reliable operation of our distribution networks.
+Their network control centers oversee network operations. They
+are also responsible for resolving unforeseen outages in their
+network territory. In case of widespread outages, our crisis
+management system stipulates responsibilities and processes
+2.88
+4.81¹
+4.87
+2016
+2017
+2018
+In 2016 we began taking action to help us achieve our new cli-
+mate-protection targets for 2030. However, year-on-year com-
+parisons can be affected by temporary fluctuations. A period
+of several years is necessary to determine whether the action
+we are taking is effective and where we stand with regard to
+our targets. We will therefore assess the trend every three years,
+for the first time after year-end 2019. If these findings indicate
+that corrective measures are necessary, we will work with our
+units to take such measures to ensure that we meet our targets.
+Information about the progress we make toward our climate
+targets is presented first to our Sustainability Council, which met
+three times in 2018. Our Chief Sustainability Officer, who chairs
+the council, reports the information to the E.ON Management
+Board on a regular basis.
+Our direct and indirect carbon emissions totaled 69.1 million
+tons of CO₂e in 2018, a decline from the prior-year figure. This
+was mainly due to an update of the emission factors we use
+to calculate power distribution losses (Scope 2) and emissions
+related to our power and gas sales (Scope 3).
+2Excludes our consumption of district heating due to the immateriality of the quantity compared with the other Scope 2 categories.
+¹Prior-year figures have been adjusted due to the subsequent adjustment of certain figures.
+Total
+5.37
+We expect our HSE standards to be met further up the value chain
+as well, for example by our suppliers. New suppliers must first
+undergo a qualification process if there is an increased risk that
+their business activities could have a negative impact on HSE.
+Depending on their size, we sometimes also require them to be
+certified to international environmental and occupational health
+and safety standards (ISO 14001 or EMAS III; OHSAS 18001
+or ISO 45001) or we conduct HSE audits of them.
+CEO Letter
+E.ON Stock
+604
+426
+178
+582
+3202
+262
+588
+249
+339
+223
+44
+179
+232
+70
+162
+203
+49
+155
+Romania
+Czech Republic
+178
+97
+57
+79
+91
+Our average NPS for residential customers increased in 2018
+and was slightly above the competitor average at the end of
+the year. In six out of seven countries the number of promoters
+(customers who speak positively about us and recommend us
+The Customer Immersion program brings our senior managers
+and employees into direct contact with residential and business
+customers. Its purpose is to bring the customer's voice into our
+organization and enhance our employees' customer orientation.
+The program, which has been offered in all our markets since
+2015, has been coordinated centrally by COO-C since 2016.
+The Chief Operating Office - Commercial ("COO-C") at corporate
+headquarters coordinates our marketing strategy with the aim
+of bringing the E.ON brand to life. COO-C supports our energy-
+sales and solutions businesses for all customer divisions, in all
+our markets. Our customer experience teams serve as our ambas-
+sadors for customer loyalty in their respective unit. They take
+the lead on related projects and activities in their sales territory
+and share information about successful programs and service
+improvements on a monthly basis. We have customer experience
+teams in Germany, the United Kingdom, Italy, Romania, Sweden,
+the Czech Republic, and Hungary.
+We define company-wide targets for strategic NPS and journey
+NPS annually and use both at segment level for steering purposes.
+Strategic NPS is highly significant for management purposes
+because of the information collected about competitors. The
+Management Board holds quarterly discussions with the units
+to evaluate their NPS and, if necessary, to decide what action
+they should take to achieve their NPS target. The variable com-
+pensation of senior managers has two components: a company
+factor and a factor reflecting a manager's individual performance.
+In 2018 strategic NPS accounted for 20 percent of the company
+factor and journey NPS was included in the individual perfor-
+mance factor of our senior managers' compensation. The E.ON
+Management Board's compensation does, nevertheless, not
+depend on NPS targets. Furthermore, each unit has a set of
+Game-Changing Initiatives in place to systematically improve
+its customer experience. They're sponsored by the unit's CEOs
+and board, who are personally responsible for improving their
+unit's NPS. The initiatives, which are defined annually, may span
+multiple years depending on the level of transformation required.
+We introduced these initiatives in 2017 and initially called them
+CEO-led signature actions.
+We measure customer loyalty by means of Net Promoter Score
+("NPS"), which we introduced in 2013. NPS indicates our cus-
+tomers' willingness to recommend us to their family and friends.
+It also helps us identify which issues are currently of particular
+importance to our customers. This enables us to adapt our activ-
+ities to current customer needs. We distinguish between three
+types of NPS. Strategic NPS or top-down NPS compares our
+performance to that of our competitors and is based on the feed-
+back of customers regardless of if they have had an interaction
+with us. Bottom-up NPS is based on the feedback of customers
+who have had a specific interaction with us, like talking to a call
+center agent. Journey NPS measures the loyalty of customers
+who have completed a journey with us, such as transferring their
+energy service to their new residence when they move. NPS is
+used by our units in all our markets. In September 2017 we intro-
+duced a new methodology that enables us to measure strategic
+NPS consistently across all our markets. It allows us to identify
+and resolve cross-market customer issues and also targets areas
+where we could provide useful innovations for our customers.
+Furthermore, automated reporting eliminates the errors of man-
+ual data entry, thereby improving data quality and auditability.
+Our internal NPS ("iNPS") program aims to sensitize employees
+who have no contact with customers to the importance of cus-
+tomer loyalty. iNPS was rolled out across the Group in 2014.
+It has been implemented in IT, human resources, supply chain
+management, finance, and other support functions.
+We put our customers at the center of everything we do. This
+pledge is an E.ON corporate value and is embedded in our cus-
+tomer experience principles, brand personality, and Grow@E.ON,
+our Group-wide competency framework. Our objective is to con-
+tinually enhance customer loyalty and to become a customer-led
+business and the energy-solutions leader in our markets.
+Our ability to acquire new customers and retain our existing
+ones is crucial for the success of our business. Global trends
+like climate protection and digitization are not only altering the
+energy landscape. They are also creating new customer needs.
+Only by adapting our products and services to meet these needs
+and by continually improving our performance will we remain
+successful in the marketplace.
+Customer Experience
+108
+Separate Combined Non-Financial Report
+Like the reliable operation of our distribution networks, the high
+availability of our renewable facilities helps ensure security of
+supply. In 2018 Onshore Wind achieved an availability factor of
+94.8 percent (2017: 94.6 percent); Offshore Wind, 96.8 percent
+(2017: 97.6 percent).
+In 2018 our SAIDI was comparable to the 2017 figure in most
+countries. The only noteworthy change was in the Czech Republic
+and Slovakia, where, on average, our customers were less
+affected by power outages than in the previous years. In Romania,
+scheduled interruptions increased because of temporary shut-
+downs that enabled us to invest more in grid renewal and auto-
+mation. This resulted in fewer unscheduled interruptions. As in
+previous years, our grids in Germany were our most reliable.
+3DSO in which we have a 49 percent stake.
+²In 2018 the Romanian regulatory agency changed the definition of unscheduled outage, which now excludes interruptions caused by natural phenomena like storms. We adjusted prior-year figure
+accordingly.
+¹Totals may deviate due to rounding.
+Slovakia³
+185
+79
+106
+267
+176
+176
+121
+189
+In 2018 we conducted a formalized analysis of our non-financial
+risks mapped against the five mandatory aspects. In consulta-
+tion with experts from other departments, the Sustainability
+function at corporate headquarters identified 26 risks. Then our
+Sustainability Council analyzed each risk individually, considering
+its likelihood of occurrence, potential impact, and the mitigation
+measures we have in place to address it. As a result of our non-
+financial risk process in 2018, it can be stated that E.ON has no
+overall reportable non-financial net risk
+exposure. The
+process
+and findings of our non-financial risk analysis were presented to
+Un-
+scheduled
+Scheduled
+Total
+Un-
+scheduled
+Scheduled
+Total
+Un-
+scheduled
+Scheduled
+Minutes per year
+2016
+2017
+2018
+SAIDI power¹
+We record all planned and unplanned outages at our distribution
+networks. We use these data to calculate the system average
+interruption duration index ("SAIDI"), which measures the aver-
+age outage duration per customer per year. Although this figure
+is not relevant for management purposes, it provides us with
+information on the reliability of our networks. Some countries
+where we operate have strict legal thresholds for SAIDI. If we
+do not meet these requirements, we may have to pay fines or
+compensation. Some of our regional units therefore set their
+own SAIDI targets on an annual basis. At regular intervals, the
+unit managing directors inform the member of the E.ON Man-
+agement Board responsible for network operations about their
+achievement of these targets. The SAIDI of all regional units
+are included in a quarterly performance report to the E.ON Man-
+agement Board.
+always focus on efficiency as well as security of supply. We
+choose the solutions that make the most technical and economic
+sense. This is because grid investments affect the grid fees
+included in the electricity price paid by customers.
+We have in place investment and maintenance plans to maintain
+and expand our grids to ensure that all of our network customers
+are connected and have a reliable energy supply. Our regional
+network companies are responsible for implementing these
+plans, which encompass one or more years. The amount of the
+investments is approved centrally. Final approval comes from
+the E.ON Management Board at the end of the annual medium-
+term planning and budgeting process. A portion of the invest-
+ment budget goes towards making our grids smarter. The
+increasing use of smart-grid technologies makes it possible for
+us to avoid or delay costly investments in conventional networks
+by, for example, using this technology to maximize the distribu-
+tion capacity of existing overhead lines. Investment decisions
+in accordance with the instructions contained in our Incident and
+Crisis Management Policy. A member of the E.ON Management
+Board oversees our Energy Networks segment. Under his lead-
+ership, two departments at our corporate headquarters actively
+manage Energy Networks' regional units. This includes strategic
+development, capital allocation, business controlling, and so forth.
+107
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+Total
+Germany
+14
+20
+126
+192
+60
+132
+Hungary
+121
+91
+30
+120
+89
+Report of the Supervisory Board
+32
+120
+24
+Sweden
+37
+25
+13
+34
+20
+14
+34
+144
+The E.ON Management Board and the management of our units
+are responsible for our HSE performance. They set our strategic
+objectives and adopt policies to promote continual improvement.
+They are supported and advised by the HSE division at corpo-
+rate headquarters, our employee representatives, and the
+HSE Council. The council is composed of senior executives and
+employee representatives from different business areas and
+countries where we operate. It meets at least three times a year
+and is chaired by the member of the Management Board respon-
+sible for HSE. Our units have HSE committees and expert teams
+as well. They draw up framework specifications to ensure that
+their unit meets our HSE standards. Our units also design HSE
+improvement plans, which contain specific HSE targets for one
+or more years.
+63
+Annual Sustainability Report
+Customer loyalty
+•
+Data protection
+•
+General significance of compliance
+In the following sections we explain our approach to each issue
+and our progress in 2018. E.ON takes a comprehensive approach
+to occupational health and safety (Aspect 2: employee matters)
+and environmental management (Aspect 1: environmental mat-
+ters), which is explained below. Our description of all approaches
+is guided by the most recent version (2016) of the Global Report-
+ing Initiative's Sustainability Reporting Standards ("GRI SRS"),
+in particular GRI standard 103: Management Approach 2016.
+E.ON's HSE organization, which has developed over the course of
+many years, centrally manages all our activities for the material
+issues of climate protection, environmental management, and
+occupational health and safety. Our overarching HSE policy and
+the Function Policy "Sustainability and HSE" set minimum stan-
+dards, assign responsibilities, and define management tools and
+reporting pathways. These policies are binding across E.ON.
+Approach to Health, Safety, and the
+Environment (HSE)
+Our commitment to transparency includes subjecting our sus-
+tainability performance to independent, detailed assessments
+by specialized agencies and capital-market analysts. The results
+of these assessments provide important guidance to investors
+and to us. They help us identify our strengths and weaknesses
+and further improve our performance. Our Sustainability Channel
+on our corporate website contains a list of current sustainability
+ratings and rankings results.
+•
+Sustainability Ratings and Rankings
+Our sustainability efforts are guided by internationally recognized
+standards, which provide orientation and help ensure that we
+consider all essential aspects of responsible corporate governance.
+We have been committed to the ten principles of the United
+Nations Global Compact since 2005. Our sustainability activities
+also support the achievement of the United Nations' Sustainable
+Development Goals. In particular, we help give access to afford-
+able, reliable, sustainable, and clean energy, support cities and
+communities to become sustainable, and help protect the earth's
+climate.
+The policies mentioned below set minimum standards, assign
+responsibilities, and define management tools for the various
+non-financial issues. They issue instructions and are reviewed on
+an ongoing basis. Group policies are binding for all companies
+in which E.ON holds a majority stake and for projects and partner-
+ships for which E.ON has operational responsibility. Our con-
+tractors and suppliers are also required to meet our minimum
+standards.
+and approved by the E.ON Group Risk Committee. Information
+about our financial risks and opportunities can be found in the
+Risk and Chances Report in the Combined Group Management
+Report.
+101
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+We have published a Sustainability Report annually since 2004.
+The report, which has been based on GRI standards since 2005,
+serves as our annual Communication on Progress to the Global
+Compact. It describes the issues that are material to our stake-
+holders and to us as a company as well as how we address these
+issues. It also reports on topics not included in this Combined
+Non-Financial Report for reasons of materiality and contains
+information about our sustainability strategy and organization.
+Security of supply
+General significance of human rights
+Employee development and working conditions
+Separate Combined
+Non-Financial Report
+Separate Combined Non-Financial Report
+100
+Editorial Note
+This separate Combined Non-Financial Report complies with
+the reporting requirements of the German CSR Directive Imple-
+mentation Act (Sections 315b and 315c as well as Sections
+289b to e of the German Commercial Code). It applies to both
+the E.ON Group and E.ON SE (hereinafter: E.ON). In addition
+to general information, the report contains information on the
+five mandatory aspects: the environment, employees, social
+matter, human rights, and anti-corruption. This information is for
+the reporting period from January 1 to December 31, 2018. The
+report encompasses all subsidiaries that are fully consolidated
+in E.ON's Consolidated Financial Statements. Any deviations from
+this are indicated.
+•
+Our three core businesses energy networks, customer solutions,
+and renewables promote the sustainable development of the
+energy industry. Detailed information about E.ON's business
+model can be found in the Corporate Profile section of the Com-
+bined Group Management Report.
+General Information
+As a responsible company, we monitor all material impacts of
+our business operations. We consider not only financial aspects
+but also environmental and social issues along our entire value
+chain. The systematic consideration of non-financial issues
+enables us to identify opportunities and risks for our business
+development early. Risks are defined as a potential negative
+deviation from a target value of a material non-financial KPI.
+In addition to the expectations of investors, E.ON takes into
+account the expectations of other key stakeholders like cus-
+tomers and employees.
+In 2018 we again conducted a materiality assessment to deter-
+mine which non-financial issues are essential for understanding
+E.ON's business performance, financial results, and situation and
+to evaluate the impact of our business operations. The assess-
+ment used a combination of internal and external factors to
+decide whether an issue is material. We analyzed the expectations
+of our stakeholders on the basis of existing sources and deter-
+mined the significance of E.ON's economic, environmental, and
+social impacts on various non-financial issues. The materiality
+assessment identified the following non-financial issues as
+material for E.ON.
+Business Model
+Environmental matters
+Employee matters
+•
+Climate protection
+Environmental management
+Occupational health and safety
+Social matters
+Human rights
+Anti-corruption
+•
+E.ON's material issues subsumed under the five mandatory aspects
+-543
+165
+-54
+40
+-1
+317
+Income taxes
+Unrealized changes-hedging reserve¹
+Cash flow hedges
+Items that will not be reclassified subsequently to the income statement
+522
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+-488
+53
+2018
+30,258
+-15
+-48
+Unrealized changes-reserve for hedging costs¹
+Reclassification adjustments recognized in income
+Fair value measurement of financial instruments
+Unrealized changes
+Reclassification adjustments recognized in income
+Currency-translation adjustments
+Unrealized changes-hedging reserve¹/other
+Unrealized changes-reserve for hedging costs¹
+Reclassification adjustments recognized in income
+Companies accounted for under the equity method
+Unrealized changes
+Reclassification adjustments recognized in income
+Income taxes
+Items that might be reclassified subsequently to the income statement
+Total income and expenses recognized directly in equity
+Remeasurements of defined benefit plans
+198
+Net income
+from discontinued operations
+3,524
+in €
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted³
+(13)
+from continuing operations
+1.37
+1.83
+Total recognized income and expenses (total comprehensive income)
+0.12
+0.01
+from net income
+1.49
+1.84
+Weighted-average number of shares outstanding (in millions)
+2,167
+2,129
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+2The presentation of our sales and costs of materials in 2018 was substantially affected by the initial application of IFRS 15, "Revenue from Contracts with Customers" (see the commentary on Note 2).
+3Based on weighted-average number of shares outstanding.
+CEO Letter
+115
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+€ in millions
+2018
+2017
+4,180
+Attributable to shareholders of E.ON SE
+329
+Discontinued operations
+4,055
+2,413
+3,984
+197
+71
+Attributable to non-controlling interests
+229
+275
+¹IFRS 9, which we are applying for the first time in 2018, requires us to divide the unrealized change in cash flow hedges and in the curreny-translation adjustments into two categories. We adjusted
+the prior-year figures accordingly.
+E.ON SE and Subsidiaries Balance Sheets-Assets
+116
+December 31,
+€ in millions
+Note
+2018
+2017
+Goodwill
+(14)
+2,054
+3,337
+Intangible assets
+(14)
+2,243
+Property, plant and equipment
+(14)
+18,057
+24,766
+2,610
+4,330
+2,839
+150
+59
+64
+9
+182
+-63
+-125
+-24
+-61
+-39
+-64
+-84
+-25
+-99
+Continuing operations
+-27
+2
+13
+-40
+-477
+-369
+-474
+Attributable to non-controlling interests
+-3
+-8
+57
+-142
+-372
+-685
+2
+Attributable to shareholders of E.ON SE
+523
+301
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+111
+stakeholders' lasting trust, we closely monitor compliance with
+laws and our own policies. If violations occur, we deal with them
+transparently and, if necessary, take disciplinary action.
+The Management Board has the ultimate responsibility for
+ensuring compliance with applicable laws and for monitoring
+compliance risks. The E.ON Group has an effective compliance
+management system ("CMS"). The CMS sets uniform Group-
+wide minimum standards for certain compliance issues, such
+as anti-corruption. Pursuant to a Group-wide policy, the Chief
+Compliance Officer ("CCO"), the Group Compliance division,
+and the business units' Compliance Officers are responsible for
+refining and optimizing the CMS on a continual basis.
+The CCO reports to the E.ON Management Board and the Super-
+visory Board's Audit and Risk Committee on a quarterly basis on
+the status of the CMS and current developments and incidents.
+In the event of serious incidents, the Management Board and
+the Audit and Risk Committee are informed immediately. The
+same applies to important new laws. Potential violations are
+investigated centrally by Group Audit and Group Compliance.
+Our updated Code of Conduct, entered in force on January 1,
+2018, is considerably shorter and clearer, concentrating on our
+guiding principles ("Doing the right thing"). It is supplemented
+by several People Guidelines that lay down specific rules ("Doing
+things right"). As a compulsory reference, the code helps our
+employees make the right decisions in various professional situ-
+ations and remain true to our values. In the preface, the E.ON
+Management Board calls on all employees to act in a correct
+manner in order to protect themselves and the company. The
+introduction explains why a Code of Conduct is needed. The main
+body of the Code contains comprehensible guidance on all
+issues that are of particular concern to us. These include human
+rights, anti-corruption, fair competition, and good relationships
+with business partners. The Code also contains an integrity test.
+By answering just a few questions, employees can check whether
+their assessments are in compliance with E.ON principles and
+values. The Code clearly states our prohibition against company
+donations to political parties, political candidates, managers of
+political offices, or representatives of public agencies.
+Managers and employees may be invited to events and restau-
+rants, especially by business partners, or receive gifts. The
+updated version of our Anti-Corruption People Guideline contains
+a decision-making scheme that uses the familiar green, amber,
+and red of traffic lights to indicate when accepting or granting
+such offers or gifts is permissible, potentially problematic, or
+forbidden. Gratuities above a certain threshold, which varies by
+country, must receive Compliance Officer approval. Particularly
+strict requirements apply to invitations and gifts from public,
+elected, or government officials and their representatives.
+To determine in which functions the risk for some compliance
+violations is particularly high, we conduct compliance risk
+assessments on a regular basis. Based on their findings, we
+take preventive measures.
+If employees suspect misconduct or a violation of laws or
+company policies, they are instructed to report it immediately.
+If they wish, they may do so anonymously through internal
+reporting channels or a Group-wide external whistle-blower
+hotline, which we operate with an external law firm. Group
+Compliance forwards the information to the relevant depart-
+ment or unit.
+We want to ensure compliance standards in our supply chain as
+well. All non-fuel suppliers and all suppliers of uranium and
+solid biomass must therefore sign our Supplier Code of Con-
+duct, which contains binding standards for ethical business
+practices. In addition, we conduct compliance checks to deter-
+mine whether potential suppliers act in accordance with our
+values and principles.
+The effectiveness of our CMS is the main indicator of our com-
+pliance performance for purposes of management control. All
+compliance measures, policies, processes, controls, and so forth
+are assessed and guided by this criterion. The CMS's effective-
+ness is also monitored by the E.ON Management Board, the
+Supervisory Board's Audit and Risk Committee, and Group Audit.
+The latter, an independent entity, is our third line of defense for
+monitoring the CMS. The criteria we use for monitoring effective-
+ness include assessing whether and how prescribed measures
+are implemented across E.ON. The Management Board and the
+Audit and Risk Committee are convinced that our CMS was
+again effective in 2018. Their assessment was based in part on
+audits, surveys of employees, and stakeholders.
+Consolidated
+Financial
+Statements
+114
+E.ON SE and Subsidiaries Consolidated Statements of Income
+€ in millions
+Note
+Sales including electricity and energy taxes
+20171
+38,291
+Electricity and energy taxes
+Sales2
+-693
+-994
+(5)
+29,565
+Combined Group Management Report
+37,297
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+109
+to friends and family) rose, while the number of detractors
+(customers who speak negatively about us) declined. Our average
+NPS for small and medium-sized enterprises ("SMEs") continued
+to improve, as did that of our competitors. We need to focus even
+more on these businesses in order to not just be slightly ahead
+of our competitors. Our top-down NPS for SME customers was
+below expectations in five of seven countries. Our strategic NPS
+is calculated by weighting E.ON's top-down NPS in six countries
+(Germany, the United Kingdom, Sweden, Czech Republic, Italy,
+Romania, and Hungary) equally.
+Data Protection
+Greater digitization opens a wide range of opportunities for
+offering smart solutions and optimizing our business, technical
+solutions, and processes. It also potentially poses a risk to the
+integrity, confidentiality, and availability of personal data.
+"Personal data" means any information relating to an identified
+or identifiable natural person. The EU General Data Protection
+Regulation ("GDPR") and Germany's new Federal Data Protection
+Act came into effect in May 2018. The former harmonizes the
+rules for the processing of personal data by organizations in the
+EU and the wider European Economic Area; the latter establishes
+specific regulations for Germany. We have an obligation to
+safeguard personal data in order to protect the persons whose
+data we process from harm. In addition, data breaches could
+damage our reputation and lead to fines.
+In 2018 we updated our business directives, policies, guidelines,
+and processes to comply with the GDPR. We implemented a
+data protection management system ("DPMS") that provides
+guidance on data protection issues and is intended to ensure
+that, to the degree possible, we take a structured, coordinated,
+and consistent approach to data protection across the Group.
+Our latest data protection policy adopted in 2018 defines roles
+and responsibilities in a uniform manner E.ON-wide. The mini-
+mum standard all units must meet is to implement, where
+necessary, an adapted version of our DPMS. We have in place
+a comprehensive set of processes, including those to fulfill the
+data subject's rights (for information, deletion, and so forth), to
+consider data protection requirements in relation to our suppliers
+and other enterprise partners, and to report and handle personal
+data breaches. We assess a breach's severity using a method
+developed by the European Union Agency for Data Network
+and Information Security. In addition, these processes provide
+guidance to our units, which have implemented the necessary
+processes in their organizations as well. Our units are responsible
+for dealing with all data protection issues related to their business
+and with the claims that individuals address to them pursuant
+to the individuals' rights under the GDPR, such as information,
+rectification, deletion, and data portability. Where required by
+law, the units have appointed Data Protection Officers ("DPOS").
+In Germany, for example, an organization with more than ten
+employees handling personal data must have a DPO. However,
+the requirements for appointing DPOs vary by country. The
+DPOs share information with each other on a regular basis and
+report regularly to our Chief DPO at our corporate headquarters
+on the following dimensions of data protection: the rights of the
+data subject, relations to third parties, company documentation,
+and relations to data protection agencies. The Chief DPO's duties
+include coordinating data protection activities across the Group.
+The Chief DPO reports periodically to the Information Security
+and Data Protection Council, which includes two Management
+Board members and, if the need arises, to the entire Management
+Board.
+Internal stakeholders are regularly informed about relevant
+developments in data protection, such as legislation, technology,
+decisions issued by regulatory agencies, and so forth. This infor-
+mation is disseminated by email or, where appropriate, through
+internal communications channels, including Connect, our cor-
+porate social media platform. Our employees receive training in
+data protection every two to three years. New employees typically
+receive such training in their first year. In addition, individual
+departments and teams - such as call centers and sales organi-
+zations - provide training to meet their special data protection
+requirements. In 2018 we rolled out a Group-wide e-learning
+module to familiarize our employees with the GDPR's new rules.
+Our DPMS uses the plan-do-check-act ("PDCA") method, which
+helps us to plan, implement, manage, and improve our processes,
+which is mandatory under the GDPR. The PDCA cycle includes
+continuously monitoring the DPMS's effectiveness and taking
+action if the need for improvement arises. Where necessary we
+align changes of the DPMS with the board. We therefore consider
+the DPMS to be effective.
+Separate Combined Non-Financial Report
+110
+Aspect 4: Human Rights
+We are committed to respecting and protecting human rights
+in all our business processes. Failure to respect people's funda-
+mental rights and needs may have serious consequences for
+those affected and may damage our reputation. Compliance with
+social standards also plays an important role in the business
+relationships with our enterprise partners. In addition, there are
+increasing regulatory requirements for corporate transparency
+and control. For example, the U.K. Modern Slavery Act obliges
+us to report on the steps we take to prevent international human
+trafficking.
+To prevent human rights violations, we adhere to external stan-
+dards and define our own principles and policies. Our Code of
+Conduct (see "Aspect 5: Anti-corruption"), a revised version of
+which took effect at the start of 2018, obliges all our employees
+to contribute to a non-discriminatory and safe working environ-
+ment and to respect human rights. The revised Code of Conduct
+for employees incorporates the standards of our Human Rights
+Policy Statement. The standards we are guided by include the
+Universal Declaration of Human Rights of the United Nations,
+the principles of the UN Global Compact, and the European
+Convention for the Protection of Human Rights. Our Chief Sus-
+tainability Officer, who is a member of the E.ON Management
+Board, is also our Chief Human Rights Officer. The standards
+for human rights and ethical business practices we require our
+suppliers to meet are defined in our Supplier Code of Conduct,
+which is binding for all non-fuel suppliers; in addition, all our
+suppliers of uranium and solid biomass are contractually obli-
+gated to adhere to these standards. As part of our prequalifi-
+cation process (supplier onboarding) and performance reviews,
+we systematically assess potential and current suppliers'
+potential risks relating to corporate social responsibility ("CSR"),
+including human rights aspects.
+In 2018 we completely revised our supplier qualification process
+and adopted a fully digital supplier onboarding solution, which is
+integrated into our enterprise resource planning system. Supplier
+onboarding is the step in which we ensure that existing and
+new suppliers comply with our minimum requirements. Every
+non-fuel supplier whose individual transaction volume exceeds
+€25,000 or whose health, safety, and environment risk is
+medium or high must complete an online onboarding process.
+In some cases, we may take additional steps during the supplier
+onboarding process, such as conducting a supplier audit to
+assess, among other issues, whether the supplier complies
+with our standards for human rights. The procurement team
+at our corporate headquarters conducted and supported more
+than three times as many supplier audits than in 2017. Between
+the tool's launch in October 2018 and year-end, we invited
+289 new suppliers to take part in onboarding and completed
+67 onboardings. In addition, we periodically conduct supplier
+performance reviews of our key non-fuel suppliers using five key
+performance indicators ("KPIs"): quality, cost, delivery, innova-
+tion, and CSR; the latter includes the protection of human rights.
+We share the results with each supplier during a performance
+review meeting. The outcome of the meeting may trigger a
+change in a supplier's status (including disqualification) and/or
+result in us requiring a supplier to take specific actions to improve
+its performance in one or more of the KPIs if it wants to continue
+doing business with us. In 2018 we increased the number of
+supplier performance reviews by 46 percent relative to 2017.
+Our employees can report potential violations of human rights
+through internal reporting channels or a Group-wide external
+whistle-blower hotline. Group Compliance forwards the infor-
+mation to the relevant department or unit. Depending on the
+nature and severity of the potential violation, Group Compliance
+may report it immediately to the E.ON Management Board,
+notify law enforcement, initiate its own investigation, or take
+other appropriate action. In 2018 no violation of human rights
+was reported through these channels
+Furthermore, in November 2018 we took the first step toward
+determining which factors are relevant in the design and imple-
+mentation of a human rights due diligence process at E.ON. The
+next step will be to define a focus area in which we will deepen
+our analysis and, where necessary, develop measures to improve
+our performance.
+Aspect 5: Anti-corruption
+We are committed to combating corruption in all its manifesta-
+tions worldwide and support national and international efforts
+directed against it. We reject it as a member of the UN Global
+Compact as well. Corruption leads to decisions being made for
+the wrong reasons. It can thus impede progress and innovation,
+distort competition, and do long-term damage to companies.
+Employees, managers, and board members guilty of corruption
+may be subject to fines and criminal prosecution. To earn our
+CEO Letter
+E.ON Stock
+Changes in inventories (finished goods and work in progress)
+16
+4
+4,932
+16
+-669
+28
+44
+-5
+Companies accounted for under the equity method
+1,370
+Interest and similar expenses
+Income taxes
+Income from continuing operations
+Income/Loss from discontinued operations, net
+Net income
+-1,236
+-1,337
+(10)
+-46
+-803
+3,238
+4,157
+(4)
+286
+23
+3,524
+4,180
+3,223
+3,925
+3,953
+720
+269
+-6,279
+Own work capitalized
+Other operating income
+Cost of materials²
+Personnel costs
+(6)
+394
+513
+(7)
+5,107
+7,371
+(8)
+-22,813
+-29,961
+255
+(11)
+-3,033
+Depreciation, amortization and impairment charges
+Other operating expenses
+Income from companies accounted for under the equity method
+Income from continuing operations before financial results and income taxes
+Financial results
+Income/Loss from equity investments
+Income from other securities, interest and similar income
+(14)
+-1,575
+-1,700
+(7)
+-4,550
+-2,460
+(15)
+2,162
+3,547
+Securities (>3 months)
+Equity investments
+-47
+-51
+-479
+-926
+Changes in operating assets and liabilities and in income taxes
+Gain/Loss on disposal of intangible assets and property, plant and equipment, equity investments and securities (> 3 months)
+Intangible assets and property, plant and equipment
+57
+Other non-cash income and expenses
+73
+205
+-526
+-397
+-139
+Inventories and carbon allowances
+Trade receivables
+Other operating receivables and income tax assets
+119
+-243
+-45
+63
+1,994
+-1,457
+-256
+-80
+-176
+-795
+Cash provided by (used for) operating activities of discontinued operations
+Cash provided by (used for) operating activities of continuing operations
+Payment to the fund for nuclear-waste management
+Other operating liabilities and income taxes
+Trade payables
+Changes in deferred taxes
+-232
+Changes in provisions
+1,575
+132
+3,682
+(4)
+Liabilities associated with assets held for sale
+2,041
+2,117
+Current liabilities
+(25)
+673
+2,603
+(10)
+Income tax liabilities
+8,099
+7,637
+Miscellaneous provisions
+15,261
+14,044
+Total equity and liabilities
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+-23
+-286
+4,180
+3,524
+20171
+2018
+Income/Loss from discontinued operations, net
+Net income
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+118
+¹Thereof relating to discontinued operations (December 31, 2018): €2 million.
+55,950
+54,324
+1,700
+(26)
+979
+-173
+1,011
+-1,170
+-1,027
+779
+2,038
+Cash provided by (used for) financing activities of continuing operations
+-391
+Repayments of financial liabilities
+Cash dividends paid to non-controlling interests
+Cash dividends paid to shareholders of E.ON SE
+Payments received/made from changes in capital²
+Cash provided by (used for) investing activities
+Cash provided by (used for) investing activities of discontinued operations
+Cash provided by (used for) investing activities of continuing operations
+Proceeds from financial liabilities
+6
+1,361
+-650
+1The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+²No material netting has taken place in either of the years presented here.
+540
+-2,637
+851
+95
+Cash provided by (used for) financing activities of discontinued operations
+Cash provided by (used for) financing activities
+-311
+-2,732
+-4,966
+-3,674
+3,844
+1,819
+-205
+-233
+-345
+-940
+-47
+1,122
+-3,290
+750
+4,306
+-2,952
+2,853
+Intangible assets and property, plant and equipment
+Cash provided by (used for) operating activities (operating cash flow)
+118
+Proceeds from disposal of
+558
+-3,509
+2,295
+-10,289
+1,114
+-998
+557
+139
+Equity investments
+4,188
+-3,533
+Purchases of securities (> 3 months) and of financial receivables and fixed-term deposits
+6,354
+2,630
+Proceeds from disposal of securities (> 3 months) and of financial receivables and fixed-term deposits
+-44
+-207
+Equity investments
+-2,051
+-2,280
+Intangible assets and property, plant and equipment
+-2,095
+-2,487
+Purchases of investments in
+611
+Changes in restricted cash and cash equivalents
+Trade payables and other operating liabilities
+262
+1,563
+Total assets
+Current assets
+Assets held for sale
+Cash and cash equivalents
+Restricted cash and cash equivalents
+Securities and fixed-term deposits
+(18)
+Liquid funds
+229
+(10)
+Income tax assets
+5,781
+5,445
+(17)
+514
+5,357
+5,160
+774
+Report of the Supervisory Board
+CEO Letter
+E.ON SE and Subsidiaries Balance Sheets-Equity and Liabilities
+55,950
+3,099
+15,786
+23,441
+3,301
+11,442
+(4)
+2,708
+3.924
+1,782
+659
+670
+Trade receivables and other operating assets
+E.ON Stock
+Strategy and Objectives
+236
+(17)
+452
+427
+(17)
+Financial receivables and other financial assets
+2,749
+2,240
+Operating receivables and other operating assets
+Non-current securities
+664
+Equity investments
+3,541
+2,904
+(15)
+Other financial assets
+792
+(17)
+1,474
+1,371
+Financial receivables and other financial assets
+794
+684
+(16)
+Inventories
+40,164
+30,883
+Non-current assets
+7
+(10)
+Income tax assets
+907
+1,195
+(10)
+Deferred tax assets
+284
+Combined Group Management Report
+54,324
+117
+(10)
+Income tax liabilities
+4,690
+4,506
+(26)
+Operating liabilities
+304
+9,922
+(26)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+8,518
+2,701
+2,760
+(23)
+8,323
+969
+Provisions for pensions and similar obligations
+(24)
+(26)
+Financial liabilities
+35,198
+30,545
+Non-current liabilities
+1,616
+1,706
+(10)
+Deferred tax liabilities
+14,381
+12,459
+(25)
+Miscellaneous provisions
+3,620
+3,247
+Financial liabilities
+Equity
+6,708
+-494
+Accumulated other comprehensive income¹
+Retained earnings
+9,862
+9,862
+Non-controlling interests
+2,201
+2,201
+(19)
+2017
+2018
+Note
+Additional paid-in capital
+Capital stock
+€ in millions
+December 31,
+Treasury shares
+Equity attributable to shareholders of E.ON SE
+(20)
+Reclassification related to put options
+-430
+Non-controlling interests (before reclassification)
+3,190
+4,007
+5,758
+-1,126
+-1,126
+3,195
+-2,378
+-2,718
+(22)
+-4,552
+-2,461
+(21)
+(19)
+The leased property is recognized at the beginning of the lease
+term at the lower of fair value or the present value of the mini-
+mum lease payments, and the lease liability is recognized as a
+liability in an equal amount.
+The leased property is depreciated over its useful economic life
+or, if it is shorter, the term of the lease. The liability is subsequently
+measured using the effective interest method.
+All other transactions in which E.ON is the lessee are classified
+as operating leases. Payments made under operating leases are
+generally expensed over the term of the lease.
+Leasing transactions in which E.ON is the lessor and substantially
+all the risks and rewards incident to ownership of the leased
+property are transferred to the lessee are classified as finance
+leases. In this type of lease, E.ON records the present value of
+the minimum lease payments as a receivable. Payments by the
+lessee are apportioned between a reduction of the lease receiv-
+able and interest income. The income from such arrangements
+is recognized over the term of the lease using the effective
+interest method.
+All other transactions in which E.ON is the lessor are treated as
+operating leases. E.ON retains the leased property on its balance
+sheet as an asset, and the lease payments are generally recorded
+on a straight-line basis as income over the term of the lease.
+E.ON replaced the previous categories under IAS 39 of financial
+assets held for trading (HfT), available-for-sale securities (AFS)
+and loans and receivables (LaR), which had been valid until
+December 31, 2017, with the new categories under IFRS 9 of
+financial assets measured at amortized cost (AmC), financial
+assets measured at fair value through other comprehensive
+income (FVOCI) and financial assets measured at fair value
+through profit and loss (FVPL).
+Non-Derivative Financial Instruments
+Non-derivative financial instruments are measured in accordance
+with IFRS 9, "Financial Instruments" ("IFRS 9"). They are recog-
+nized at fair value, including transaction costs, on the settlement
+date when acquired, provided they are not recognized at fair
+value through profit and loss.
+The classification of financial assets is based on the business
+model and the characteristics of the cash flows.
+If a financial asset is held for the purpose of collecting contractual
+cash flows and the cash flows of the financial asset represent
+exclusively interest and principal payments, then the financial
+asset is measured at amortized cost (AmC).
+123
+Leasing transactions in which E.ON is involved as the lessee are
+classified either as finance leases or operating leases. If E.ON
+bears substantially all of the risks and rewards incident to own-
+ership of the leased property, the transaction is classified as a
+finance lease. In such case, E.ON recognizes the leased property
+and the lease liability on its balance sheet.
+Financial Instruments
+Leasing transactions are classified according to the lease agree-
+ments and to the underlying risks and rewards specified therein
+in line with IAS 17, "Leases" ("IAS 17"). In addition, IFRIC 4,
+"Determining Whether an Arrangement Contains a Lease,"
+("IFRIC 4") further defines the criteria as to whether an agreement
+that conveys a right to use an asset meets the definition of a
+lease. Certain purchase and supply contracts in the electricity and
+gas business as well as certain rights of use may be classified as
+leases if the cumulative criteria in IFRIC 4 are met. E.ON is party
+to some agreements in which it is the lessor and to others in
+which it is the lessee.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+128
+8
+293
+-943
+-73
+IFRS 9, IFRS 15 adjustment
+Balance as of January 1, 2018
+Change in scope of consolidation
+-9
+-1,663
+-203
+9,862
+-4,561
+-1,663
+8
+90
+-943
+2,201
+-4,552
+9,862
+2,201
+460
+-507
+2
+-60
+171
+64
+460
+other comprehensive
+income
+-507
+2
+-60
+171
+64
+Balance as of December 31, 2017
+Leasing
+Treasury shares repurchased/sold
+Capital increase
+Capital decrease
+-51
+-35
+59
+3,223
+-476
+-112
+2
+-51
+-35
+59
+-476
+-2,461
+-112
+2
+-51
+2
+64
+-112
+3
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to put
+options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Remeasurements of defined
+benefit plans
+Changes in accumulated
+other comprehensive
+income
+Balance as of December 31, 2018
+2,201
+9,862
+-650
+2,747
+171
+-60
+2
+Changes in accumulated other comprehensive income
+Currency translation
+Fair value
+adjustments
+Cash flow hedges
+measure-
+Additional
+Hedging
+Reserve for
+Capital
+paid-in
+Retained
+reserve¹/
+€ in millions
+stock
+120
+capital
+Statement of Changes in Equity
+¹The comparative prior-year figures have been adjusted to account for the reporting of discontinued operations (see also Note 4).
+3Cash and cash equivalents at the beginning of the year also includes holdings of €90 million in companies in the Renewables segment (which is reported as a discontinued operation), and €55 million
+from Hamburg Netz GmbH, which was deconsolidated in the first quarter of 2018.
+3,924
+2,673
+Supplementary information on cash flows from operating activities
+Income taxes paid (less refunds)
+Interest paid
+Interest received
+Dividends received
+-628
+-483
+-784
+-979
+178
+745
+331
+364
+4Cash and cash equivalents of continuing operations at year-end also include the holdings of €55 million in Hamburg Netz GmbH, which was deconsolidated in the first quarter of 2018.
+-35
+earnings
+hedging
+costs¹
+-3
+Capital decrease
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to put
+options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Remeasurements of defined
+benefit plans
+Changes in accumulated
+-452
+13
+4,385
+3,925
+-507
+-478
+1,139
+other
+200
+Treasury shares repurchased/sold
+ment of
+financial
+instruments
+Reserve for
+Hedging
+hedging
+reserve¹
+costs¹
+Balance as of January 1, 2017
+Change in scope of consolidation
+2,001
+9,201
+-8,495
+-1,156
+6
+353
+-1,114
+-137
+Capital increase
+59
+-1,775
+10
+8
+64
+64
+64
+2,610
+229
+229
+2,839
+3,223
+301
+301
+3,524
+-613
+-72
+-72
+5
+-685
+-930
+5
+3,195
+-494
+2,701
+6,496
+-43
+-43
+-43
+0
+84
+84
+84
+0
+-650
+-280
+3
+-280
+3,795
+-476
+-67
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+If a subsidiary or associate sells shares to a third party, leading
+to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control
+or significant influence, gains and losses from these dilutive
+transactions are included in the income statement under other
+operating income or expenses.
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into line
+with those of the Group. Intercompany receivables, liabilities
+and results are eliminated in the consolidation process.
+Associated Companies
+An associate is an investee over whose financial and operating
+policy decisions E.ON has significant influence and that is not
+controlled by E.ON or jointly controlled with E.ON. Significant
+influence is presumed if E.ON directly or indirectly holds at least
+20 percent, but not more than 50 percent, of an entity's voting
+rights.
+Interests in associated companies are accounted for using the
+equity method.
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration
+are generally not recognized. Any difference between the cost
+of the investment and the pro rata remeasured value of its net
+assets is recognized in the Consolidated Financial Statements
+as part of the carrying amount.
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro rata
+basis if they are material.
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recover-
+able amount. If the carrying amount exceeds the recoverable
+amount, the carrying amount is adjusted for this difference. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed accordingly.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor can
+direct the activities relevant to the business performance of
+the entity, participate in this business performance in the form
+of variable returns and influence the performance and the
+related variable returns through its involvement. Control is nor-
+mally deemed established if E.ON directly or indirectly holds a
+majority of the voting rights in the investee. In structured entities,
+control can be established by means of contractual arrangements
+if control is not demonstrated through possession of a majority
+of the voting rights.
+-67
+Scope of Consolidation
+Principles
+-543
+-137
+-5
+-5
+-142
+-1,126
+5,758
+3,190
+-430
+2,760
+8,518
+Notes
+122
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+The Consolidated Financial Statements of E.ON SE, Essen, reg-
+istered in the Commercial Register of Essen District Court under
+number HRB 28196, have been prepared in accordance with
+Section 315e (1) of the German Commercial Code ("HGB") and
+with those International Financial Reporting Standards ("IFRS")
+and IFRS Interpretations Committee interpretations ("IFRIC")
+that were adopted by the European Commission for use in the
+EU as of the end of the fiscal year, and whose application was
+mandatory as of December 31, 2018.
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared at cost, with the exception
+of financial assets that are measured at fair value through OCI
+(FVOCI) and of financial assets and liabilities (including deriva-
+tive financial instruments) that are recognized in income and
+measured at fair value through profit or loss (FVPL).
+Cash and cash equivalents at the end of the period
+-1,126
+-212
+to put options
+Non-controlling
+interests
+Total
+2,896
+-554
+2,342
+1,287
+0
+588
+107
+107
+1,339
+228
+228
+1,567
+Reclassification related
+0
+Non-controlling
+interests (before
+reclassification)
+-1,055
+39
+-978
+-14
+¹IFRS 9, which we are applying for the first time in 2018, requires us to divide the unrealized change in cash flow hedges and in net investment hedges into two categories. We adjusted the prior-year
+figures accordingly.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+121
+Treasury shares
+-1,714
+Equity attributable
+E.ON SE
+to shareholders of
+-212
+-452
+13
+150
+460
+62
+62
+522
+-330
+-42
+-42
+-372
+-1,126
+4,007
+3,195
+-494
+2,701
+6,708
+20
+-225
+20
+4,180
+21
+-225
+-677
+21
+34
+60
+60
+60
+4,055
+275
+275
+4,330
+3,925
+255
+255
+130
+-90
+-73
+Cash and cash equivalents from the deconsolidation of discontinued operations
+7.44
+7.45
+7.44
+Romanian leu
+RON
+4.66
+4.66
+4.65
+4.57
+Swedish krona
+SEK
+10.25
+9.84
+10.26
+9.64
+Czech crown
+CZK
+Revenues are generally recognized when E.ON fulfills its perfor-
+mance obligation by transferring a promised good or service to
+a customer. An asset is deemed to be transferred when the cus-
+tomer obtains control of the asset. The majority of the E.ON
+Group's performance obligations are fulfilled over time. The rel-
+atively subordinate point-in-time revenue recognition occurs
+primarily in the "Build & Sell" segment. Revenue is recognized
+when control is transferred to the customer, which means that
+no significant discretionary decisions are required. For all such
+revenues, progress is measured using output-based methods.
+The methods used appropriately reflect the pattern of transfer
+of goods to customers or provision of services for customers.
+Revenues from the sale of goods and services are measured using
+the transaction prices allocated to these goods and services.
+They reflect the value of the volume supplied, including an
+Due to the changed revision criteria for principal-agent relation-
+ships, revenues no longer include the fees for the promotion of
+Renewables because under IFRS 15 these revenues are netted
+with the corresponding cost of materials (net disclosure). E.ON
+acts as an agent if another party is essentially responsible for ful-
+filling the contract (in the case of the fee mandated by the German
+Renewable Energy Sources Act, E.ON only transmits electricity
+generated from renewable energy sources by third parties),
+E.ON bears no inventory or default risk, E.ON cannot influence
+the pricing, and E.ON receives a commission as remuneration.
+Revenues are generated primarily from the sale of electricity
+and gas to retail customers, industrial and commercial cus-
+tomers and wholesale markets. Revenues earned from the dis-
+tribution of electricity and gas and from deliveries of steam and
+heat are also primarily recognized under revenues.
+a) Revenues
+Recognition of Income
+25.65 26.33
+6.06 4.55 5.71 4.12
+320.98 310.33 318.89 309.19
+1.20
+1.18
+1.13
+7.47
+1.15
+U.S. dollar
+HUF
+Hungarian forint
+TRY
+Turkish lira
+25.72 25.54
+USD
+CEO Letter
+DKK
+0.88
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation
+process on a pro rata basis if they are material.
+Joint Operations
+A joint operation exists when E.ON and other investors directly
+control an operation, but unlike a joint venture, they do not have
+a claim to the changes in net assets from the operation. Instead,
+they have direct rights to individual assets or direct obligations
+with respect to individual liabilities in connection with the oper-
+ation. E.ON recognizes assets and liabilities as well as revenues
+and expenses in a joint operation pro rata according to the rights
+and obligations attributable to E.ON.
+Business Combinations
+Business combinations are accounted for using the purchase
+method, under which the purchase price is offset against the
+proportional share in the acquired company's net assets. The
+values at the acquisition date that corresponds to the date at
+which control of the acquired company was attained are used
+as a basis. The acquiree's identifiable assets, liabilities and con-
+tingent liabilities are generally recognized at their fair values
+irrespective of the extent attributable to non-controlling inter-
+ests. The fair values are determined using published exchange or
+market prices at the time of acquisition in the case of marketable
+securities, for example, and in the case of land, buildings and
+major technical equipment, generally using independent expert
+reports that have been prepared by third parties. If exchange or
+market prices are unavailable for consideration, fair values are
+derived from market prices for comparable assets or comparable
+transactions. If these values are not directly observable, fair
+value is determined using appropriate valuation methods. In such
+cases, E.ON determines fair value using the discounted cash
+flow method by discounting estimated future cash flows by
+a weighted-average cost of capital. Estimated cash flows are
+consistent with the internal mid-term planning data for the
+next three years, followed by two additional years of cash flow
+projections, which are extrapolated through the end of an asset's
+useful life using a growth rate based on industry and internal
+projections. In certain justified exceptional cases, a longer detailed
+planning period is used as the calculation basis. The discount
+rate reflects the specific risks inherent in the acquired activities.
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The
+choice of method can be made on a case-by-case basis. The
+partial goodwill method is generally used within the E.ON Group.
+Transactions with holders of non-controlling interests are treated
+in the same way as transactions with investors. Should the
+acquisition of additional shares in a subsidiary result in a differ-
+ence between the cost of purchasing the shares and the carrying
+amounts of the non-controlling interests acquired, that difference
+must be fully recognized in equity.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do not
+coincide with a loss of control.
+Intangible assets must be recognized separately if they are
+clearly separable or if their recognition arises from a contractual
+or other legal right. Provisions for restructuring measures may
+not be recorded in a purchase price allocation. If the purchase
+price paid exceeds the proportional share in the net assets at
+the time of acquisition, the positive difference is recognized as
+goodwill. No goodwill is recognized for positive differences
+attributable to non-controlling interests. A negative difference
+is recognized in net income.
+Foreign Currency Translation
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the trans-
+action. At each balance sheet date monetary foreign currency
+items are adjusted to the exchange rate on the reporting date;
+any gains and losses resulting from fluctuations in the relevant
+currencies are recognized in net income and reported as other
+operating income and other operating expenses, respectively.
+Gains and losses from the translation of non-derivative financial
+instruments used in hedges of net investments in foreign
+operations are recognized in equity as a component of other
+comprehensive income. The ineffective portion of the hedging
+instrument is immediately recognized in net income.
+Notes
+124
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than the
+euro are translated using the exchange rates applicable on the
+balance sheet date, while items of the statements of income
+are translated using annual average exchange rates. Material
+transactions of foreign subsidiaries occurring during the fiscal
+year are translated in the financial statements using the exchange
+rate at the date of the transaction. Differences arising from
+the translation of assets and liabilities compared with the corre-
+sponding translation of the prior year, as well as exchange rate
+differences between the income statement and the balance
+sheet, are reported separately in equity as a component of other
+comprehensive income.
+Foreign currency translation effects that are attributable to the
+cost of monetary financial instruments classified as at fair value
+through OCI are recognized in income. In the case of fair-value
+adjustments of monetary financial instruments, the foreign cur-
+rency translation effects are recognized in equity as a component
+of other comprehensive income.
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside
+the European Monetary Union:
+0.88
+0.89
+0.89
+GBP
+British pound
+2018
+Danish krone
+2017
+Code
+ISO-
+€1, rate at
+year-end
+2017
+€1, annual
+average rate
+Currencies
+2018
+Joint Ventures
+Report of the Supervisory Board
+Strategy and Objectives
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+127
+Research and Development Costs
+Under IFRS, expenditure on research is expensed as incurred,
+while costs incurred during the development phase of new prod-
+ucts, services and technologies are to be recognized as assets
+when the general criteria for recognition specified in IAS 38 are
+present. In the 2017 and 2018 fiscal years, E.ON capitalized
+costs for internally generated software and other technologies
+in this context.
+Emission Rights
+Under IFRS, emission rights held under national and international
+emission-rights systems for the settlement of obligations are
+reported as intangible assets. Because emission rights are not
+depleted as part of the production process, they are reported
+as intangible assets not subject to amortization. Emission rights
+are capitalized at cost at the time of acquisition.
+A provision is recognized for emissions produced. The provision is
+measured at the carrying amount of the emission rights held or,
+in the case of a shortfall, at the current fair value of the emission
+rights needed.
+Property, Plant and Equipment
+Property, plant and equipment are initially measured at acquisi-
+tion or production cost, including decommissioning or resto-
+ration cost that must be capitalized, and are depreciated over the
+expected useful lives of the components, generally using the
+straight-line method, unless a different method of depreciation
+is deemed more suitable in certain exceptional cases. The useful
+lives of the major asset classes of property, plant and equipment
+are presented below:
+Useful Lives of Property, Plant and Equipment
+Buildings
+Technical equipment, plant and machinery
+5 to 60 years
+Notes
+Government grants for costs are posted as income over the
+period in which the costs are incurred.
+Government grants are recognized at fair value if the Group
+satisfies the necessary conditions for receipt of the grant and if
+it is highly probable that the grant will be issued.
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are rec-
+ognized in income on a straight-line basis over the associated
+asset's expected useful life.
+Government Grants
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+until its entry into service are capitalized and subsequently
+amortized alongside the related asset. In the case of a specific
+financing arrangement, the respective borrowing costs incurred
+for that particular arrangement during the period are used.
+For non-specific financing arrangements, a financing rate
+uniform within the Group of 5.37 percent was applied for 2018
+(2017: 5.47 percent). Other borrowing costs are expensed.
+CEO Letter
+Borrowing Costs
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part of
+the acquisition or production cost of the asset, or else—if rele-
+vant-recognized as a separate asset if it is probable that the
+Group will receive a future economic benefit and the cost can
+be determined reliably.
+recognized impairment losses no longer exist, such impairment
+losses are reversed and recognized in income. Such reversal
+shall not cause the carrying amount to exceed the amount that
+would have resulted had no impairment taken place during the
+preceding periods.
+Property, plant and equipment are tested for impairment when-
+ever events or changes in circumstances indicate that an asset
+may be impaired. In such a case, property, plant and equipment
+are tested for impairment according to the principles prescribed
+for intangible assets in IAS 36. If the reasons for previously
+2 to 30 years
+Other equipment, fixtures, furniture and office
+equipment
+2 to 50 years
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+E.ON Stock
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest iden-
+tifiable group of assets (cash-generating unit) that the intangible
+asset may be assigned to is determined. See Note 14 for addi-
+tional information about goodwill and intangible assets.
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use
+and its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount and
+the recoverable amount is recognized and reported in income
+under "Depreciation, amortization and impairment charges."
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+125
+estimated value of the volume supplied to customers between
+the date of the last invoice and the end of the period. Monthly
+advance payments for B2C customers are generally determined
+on the basis of historical consumption data and peak payments
+are settled at the end of the year. In B2B, a bottom-up approach
+is used to calculate individual rates. E.ON's sales transactions
+generally are not based on any material finance components.
+The average target payment period is between 14 and 45 days.
+Refunds to customers are an exception and are only granted
+if the customer is disconnected from the power supply for an
+extended period of time. Similarly, as a rule, no warranties are
+granted in the Core Business. Warranties are only granted in the
+"Build & Sell" activities.
+b) Interest Income
+Interest income is recognized pro rata using the effective interest
+method.
+c) Dividend Income
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+Electricity and Energy Taxes
+Electricity and energy taxes are levied on electricity and natural
+gas delivered to retail customers and are calculated on the basis
+of a fixed tax rate per kilowatt-hour ("kWh"). This rate varies
+between different classes of customers. Electricity and energy
+taxes payable are deducted from sales revenues on the face
+of the income statement if those taxes are levied upon delivery
+of energy to the retail customer.
+Earnings per Share
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary
+shares outstanding during the relevant period. At E.ON, the com-
+putation of diluted earnings per share is identical to that of basic
+earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares.
+Goodwill and Intangible Assets
+Goodwill
+Goodwill is not amortized, but rather tested for impairment at
+the cash-generating unit level on at least an annual basis. Impair-
+ment tests must also be performed between these annual tests
+if events or changes in circumstances indicate that the carrying
+amount of the respective cash-generating unit might not be
+recoverable.
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allocated
+are generally equivalent to the operating segments, since good-
+will is reported, and considered in performance metrics for
+controlling, only at that level. Goodwill impairment testing is
+performed in euro, while the underlying goodwill is always carried
+in the functional currency.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of the
+cash-generating unit's fair value less costs to sell and its value
+in use. In a first step, E.ON determines the recoverable amount
+of a cash-generating unit on the basis of the fair value (less
+costs to sell) using generally accepted valuation procedures. This
+is based on the medium-term planning data of the respective
+cash-generating unit. Valuation is performed using the discounted
+cash flow method. In addition, market transactions or valuations
+prepared by third parties for comparable assets are used to
+the extent available. If needed, a calculation of value in use is
+also performed. Unlike fair value, the value in use is calculated
+from the viewpoint of management. In accordance with IAS 36,
+"Impairment of Assets," ("IAS 36") it is further ensured that
+restructuring expenses, as well as initial and subsequent capital
+investments (where those have not yet commenced), in particu-
+lar, are not included in the valuation.
+Notes
+Intangible assets not subject to amortization are measured at
+cost and tested for impairment annually or more frequently if
+events or changes in circumstances indicate that such assets
+may be impaired. Moreover, such assets are reviewed annually
+to determine whether an assessment of indefinite useful life
+remains applicable.
+reflects an appropriate level of depletion. Technology-based
+intangible assets are generally amortized over a useful life of
+between 3 and 33 years. This category includes software in
+particular. Contract-based intangible assets are amortized in
+accordance with the provisions specified in the contracts.
+Useful lives and amortization methods are subject to annual
+verification. Intangible assets subject to amortization are tested
+for impairment whenever events or changes in circumstances
+indicate that such assets may be impaired.
+Acquired intangible assets subject to amortization are classified
+as marketing-related, customer-related, contract-based, and
+technology-based. Internally generated intangible assets subject
+to amortization are related to software. Intangible assets subject
+to amortization are measured at cost and are generally amortized
+using the straight-line method over their expected useful lives.
+The useful lives of marketing-related intangible assets range
+between 5 and 30 years, between 2 and 50 years for customer-
+related intangible assets and between 3 and 50 years for con-
+tract-based intangible assets, unless depreciation based on use
+-66
+Intangible Assets
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed in
+subsequent reporting periods.
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset subject
+to amortization to exceed the amount that would have been
+determined, net of amortization, had no impairment loss been
+recognized during the period.
+E.ON has elected to perform the annual testing of goodwill for
+impairment at the cash-generating unit level in the fourth quarter
+of each fiscal year.
+Value in use, or
+Zero.
+•
+• Fair value less costs to sell
+If the impairment thus identified exceeds the goodwill allocated
+to the affected cash-generating unit, the remaining assets of
+the unit must be written down in proportion to their carrying
+amounts. Individual assets may be written down only if their
+respective carrying amounts do not fall below the highest of the
+following values as a result:
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+126
+Any additional impairment loss that would otherwise have been
+allocated to the asset concerned must instead be allocated pro
+rata to the remaining assets of the unit.
+The financial statements of equity interests accounted for using
+the equity method are generally prepared using accounting that
+is uniform within the Group.
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless their
+lives are considered to be indefinite. Factors such as typical
+product life cycles and legal or similar limits on use are taken
+into account in the classification.
+119
+5,574
+2,763
+Cash and cash equivalents at the beginning of the year³
+Effect of foreign exchange rates on cash and cash equivalents
+1,227
+20171
+2018
+-2,803
+-8
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Report of the Supervisory Board
+CEO Letter
+Net increase/decrease in cash and cash equivalents
+IFRS 9
+IFRS 15
+Jan. 1, 2018
+40,164
+6
+88
+2,243
+Effects from
+24,766
+-35
+Effects from
+Dec. 31,
+2017
+of which equity investments
+Consolidated Statements of Cash Flows
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7") the
+Consolidated Statements of Cash Flows are classified in cash
+flows from operating, investing and financing activities. Cash
+flows from discontinued operations are reported separately in
+the Consolidated Statements of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions and
+disposals of companies are reported net of any cash and cash
+equivalents acquired (disposed of) under investing activities
+if the respective acquisition or disposal results in a gain or loss
+of control. In the case of acquisitions and disposals that do not,
+respectively, result in a gain or loss of control, the corresponding
+cash flows are reported under financing activities. The impact on
+cash and cash equivalents of valuation changes due to exchange
+rate fluctuations is disclosed separately.
+Segment Information
+In accordance with the so-called management approach required
+by IFRS 8, "Operating Segments," ("IFRS 8") the internal report-
+ing organization used by management for making decisions on
+operating matters is used to identify the Company's reportable
+segments. The internal performance measure used as the seg-
+ment result is EBIT adjusted to exclude certain non-operating
+effects (see Note 33).
+Structure of the Consolidated Balance Sheets and Statements
+of Income
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well as
+liabilities that are due to be settled within one year of the report-
+ing date are generally classified as current.
+The Consolidated Statements of Income are classified using the
+nature of expense method, which is also applied for internal
+purposes.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions that
+may both influence the application of accounting principles
+within the Group and affect the measurement and presentation
+of reported figures. Estimates are based on past experience and
+on current knowledge obtained on the transactions to be
+reported. Actual amounts may differ from these estimates.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis. Adjustments to accounting estimates are recog-
+nized in the period in which the estimate is revised if the change
+affects only that period, or in the period of the revision and sub-
+sequent periods if both current and future periods are affected.
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets, the
+accounting treatment of provisions for pensions and miscella-
+neous provisions, for impairment testing in accordance with
+IAS 36, for the determination of the fair value of certain financial
+instruments, and in the application of IFRS 15.
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+Notes
+136
+(2) New Standards and Interpretations
+Significant Standards and Interpretations
+Applicable in 2018
+The International Accounting Standards Board ("IASB") and the
+IFRS Interpretations Committee ("IFRS IC") have issued the
+following standards and interpretations that have been adopted
+by the EU into European law and whose application is mandatory
+in the reporting period from January 1, 2018, through Decem-
+ber 31, 2018.
+Since January 1, 2018, E.ON has applied IFRS 9, "Financial
+Instruments," (IFRS 9) and IFRS 15, "Revenue from Contracts
+with Customers" (IFRS 15). IFRS 9 replaces the accounting for
+financial instruments previously regulated in IAS 39, "Financial
+Instruments: Recognition and Measurement." In accordance with
+the transition provisions of IFRS 9, E.ON has applied the standard
+retrospectively without changing the prior-year figures, with the
+exception of certain aspects of hedge accounting.
+IFRS 15 replaces the previous standards and interpretations
+IAS 11, "Construction Contracts," IAS 18, "Revenue," IFRIC 13
+"Customer Loyalty Programmes," IFRIC 15, "Agreements for
+the Construction of Real Estate," IFRIC 18, "Transfers of Assets
+from Customers," and SIC-31, "Revenue-Barter Transactions
+Involving Advertising Services." The E.ON Group applies IFRS 15
+using the modified retrospective method.
+The transition effects from the first-time application of IFRS 9
+and IFRS 15 were recognized directly in equity. The effects of the
+transition on the balance sheet, retained earnings and accumu-
+lated other comprehensive income are shown in the following
+tables:
+Reconciliation of the Consolidated Balance Sheet Due to the Effects of IFRS 9 and IFRS 15
+€ in millions
+Non-current assets
+of which other intangible assets
+of which property, plant and equipment
+-14
+40,217
+2,249
+24,752
+AmC
+-46
+5,781
+-66
+31
+5,746
+55,950
+-101
+119
+55,968
+Equity
+of which retained earnings
+6,708
+-101
+-111
+6,496
+-4,552
+102
+-111
+of which trade receivables and other operating assets
+Total assets
+15,751
+31
+-66
+746
+Note 10 shows the major temporary differences so recorded.
+of which financial receivables and other financial assets
+452
+-1
+8
+459
+of which operating receivables and other operating assets
+792
+1,371
+1,410
+of which deferred tax assets
+907
+12
+49
+968
+Current assets
+15,786
+39
+-4,561
+Deferred taxes for the E.ON Group's major German companies
+are - unchanged from the previous year - calculated using an
+aggregate tax rate of 30 percent. This tax rate includes, in addi-
+tion to the 15 percent corporate income tax, the solidarity
+surcharge of 5.5 percent on the corporate tax and the average
+trade tax rate of 14 percent. Foreign subsidiaries use applicable
+national tax rates.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+CEO Letter
+Changes in fair value of derivative instruments that are recog-
+nized in income are presented as other operating income or
+expenses. Gains and losses from interest-rate derivatives are
+netted for each contract and included in interest income.
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of the
+contract are not recognized in income. They are instead deferred
+and recognized in income systematically over the term of the
+derivative. An exception to the accrual principle applies if unre-
+alized gains and losses from the initial measurement are verified
+by quoted market prices, observable prices of other current
+market transactions or other observable data supporting the val-
+uation technique. In this case the gains and losses are recognized
+in income.
+Contracts that are entered into for purposes of receiving or deliv-
+ering non-financial items in accordance with E.ON's anticipated
+procurement, sale or use requirements, and held as such, can
+be classified as own-use contracts. They are not accounted for as
+derivative financial instruments at fair value through profit and
+loss (FVPL) in accordance with IFRS 9, but as open transactions
+subject to the rules of IAS 37.
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualitative
+disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments is
+provided in Notes 30 and 31.
+Primary and derivative financial instruments are netted on the
+balance sheet if under IAS 32 E.ON has both an unconditional
+right-even in the event of the counterparty's insolvency-and
+the intention to settle offsetting positions simultaneously and/or
+on a net basis.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+131
+Inventories
+Inventories are measured at the lower of acquisition or production
+cost and net realizable value. The cost of raw materials, finished
+products and goods purchased for resale is determined based on
+the average cost method. In addition to production materials and
+wages, production costs include material and production over-
+heads based on normal capacity. The costs of general adminis-
+tration are not capitalized. Inventory risks resulting from excess
+and obsolescence are provided for using appropriate valuation
+allowances, whereby inventories are written down to net real-
+izable value.
+Receivables, Contract Assets and Other Assets
+A receivable is recognized under IFRS 15 when the goods or
+services are delivered, provided that the right to consideration
+is unconditional, i.e., is only related to the passage of time.
+However, if the right to receive the consideration is contingent
+upon conditions other than the passage of time, a contract asset
+is recognized. An asset is recognized under other assets under
+IFRS 15 if the cost of obtaining the contract is expected to be
+recovered and the amortization period is longer than one year.
+Receivables and other assets are initially measured at fair value,
+which generally approximates nominal value. They are subse-
+quently measured at amortized cost, using the effective interest
+method. Valuation allowances, included in the reported net car-
+rying amount, are provided for identifiable individual risks. If the
+loss of a certain part of the receivables is probable, valuation
+allowances are provided to cover the expected loss. Impairments
+must also be recognized for expected future credit losses.
+Liquid Funds
+Liquid funds include current securities, checks, cash on hand and
+bank balances. Bank balances and securities with an original
+maturity of more than three months are recognized under secu-
+rities and fixed-term deposits. Liquid funds with an original
+maturity of less than three months are considered to be cash
+and cash equivalents, unless they are restricted.
+Restricted cash with a remaining maturity in excess of twelve
+months is classified as financial receivables and other financial
+assets.
+Assets Held for Sale and Liabilities Associated with Assets
+Held for Sale and Discontinued Operations
+Report of the Supervisory Board
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually
+taking place. The reclassification to the separate balance sheet
+items is shown under Changes in scope of consolidation.
+E.ON Stock
+Combined Group Management Report
+The hedging result is reclassified into income during the period
+in which the cash flows of the hedged asset are recognized in
+income. The result is recognized immediately in income if it
+becomes probable that the hedged underlying transaction will
+no longer occur. For hedging instruments used to establish
+cash flow hedges, the change in fair value of the ineffective
+portion is recognized immediately in the income statement to
+the extent required.
+If a derivative instrument qualifies as a cash flow hedge under
+IFRS 9, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the period
+or periods during which the cash flows of the transaction being
+hedged affect income. In accordance with IFRS 9, the currency
+basis spread (hedging costs) will from now on be separated from
+the hedging instrument and reported separately as an excluded
+component in accumulated other comprehensive income in the
+reserve for hedging costs as a component of equity.
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+E.ON has designated some of these derivatives as part of a
+hedging relationship. IFRS 9 sets requirements for the admissi-
+bility of hedging instruments and the underlyings, the formal
+designation and documentation of hedging relationships, the
+hedging strategy, as well as fulfilling requirements of effective-
+ness in order to qualify for hedge accounting. The designated
+hedged items and hedging instruments are subject to the same
+risk. This economic relationship ensures that the amounts of the
+hedged items and hedging instruments are offset against each
+other and that the hedging relationships are therefore effective.
+The hedge ratio of the hedges is 1:1. Ineffectiveness arises only
+if the measurement parameters of the hedged item and the
+hedging instrument differ from one another. All components of
+derivative gains and losses from the measurement of hedge
+ineffectiveness are taken into consideration during recognition.
+130
+Notes
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit risk
+(debt value adjustment) and the credit risk of the corresponding
+counterparty (credit value adjustment). The counterparty risks
+thus determined are allocated to the individual financial instru-
+ments by applying the relative fair value method on a net basis.
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps. In commodities, the instruments used primarily include
+physically and financially settled forwards and options related
+to electricity and gas.
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the balance sheet
+date at initial recognition and in subsequent periods. Under
+IFRS 9, they are classified as at fair value through profit and
+loss (FVPL) as long as they are not a component of a hedge
+accounting relationship. Gains and losses from changes in fair
+value are immediately recognized in net income.
+Derivative Financial Instruments and Hedging
+If E.ON has already received consideration but the obligation to
+deliver a good or service still exists, a contractual liability is rec-
+ognized in accordance with IFRS 15.
+at fair value, with transaction costs included in the measurement.
+In the subsequent measurement, the residual carrying amount
+is adjusted by the amortization and accretion of any premium
+or discount remaining until maturity. The premium or discount
+is recognized in financial results over its term.
+Non-derivative financial liabilities (including trade payables)
+within the scope of IFRS 9 are measured at amortized cost, using
+the effective interest method. Initial measurement takes place
+The expected future credit loss is calculated by multiplying the
+probability of default by the carrying amount of the financial
+asset (exposure at default) and the expected loss ratio (loss given
+default). For information on the treatment of impairments under
+IFRS 9, please see Note 31.
+Under IFRS 9, impairments of financial assets must no longer be
+recognized only for losses already incurred, but also for expected
+future credit defaults. The amount of the impairment loss calcu-
+lated in the determination of expected credit losses is recognized
+on the income statement.
+Debt instruments that do not exclusively serve to collect contrac-
+tual cash flows or to both generate contractual cash flows and
+sales revenue, or whose cash flows do not exclusively consist of
+interest and principal payments are measured at fair value
+through profit and loss (FVPL). For equity instruments that are
+not held for trading purposes, E.ON has uniformly exercised the
+option of recognizing changes in fair value through profit or loss
+(FVPL).
+Unrealized gains and losses from financial assets measured at
+fair value through other comprehensive income (FVOCI), net of
+related deferred taxes, are reported as a component of equity
+(other comprehensive income) until realized. Realized gains and
+losses are determined by analyzing each transaction individually.
+ments.
+A financial asset is measured at fair value through other compre-
+hensive income (FVOCI) if it is used both to collect contractual
+cash flows and for sales purposes and the cash flows of the
+financial asset consist exclusively of interest and principal pay-
+129
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Strategy and Objectives
+135
+Discontinued operations are components of an entity that are
+either held for sale or have already been sold and can be clearly
+distinguished from other corporate operations, both operationally
+and for financial reporting purposes. Additionally, the component
+classified as a discontinued operation must represent a major
+business line or a specific geographic business segment of the
+Group.
+The income and losses resulting from the measurement of
+components held for sale as well as the gains and losses arising
+from the disposal of discontinued operations, are reported sep-
+arately on the face of the income statement under income/loss
+from discontinued operations, net, as is the income from the
+ordinary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance sheet.
+The cash flows of discontinued operations are reported sepa-
+rately in the cash flow statement, with prior-year figures adjusted
+accordingly. However, there is no reclassification of prior-year
+balance sheet line items attributable to discontinued operations.
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation towards
+third parties as a result of a past event, it is probable that E.ON
+will be required to settle the obligation, and a reliable estimate
+can be made of the amount of the obligation. The provision is
+recognized at the expected settlement amount. Long-term obli-
+gations are reported as liabilities at the present value of their
+expected settlement amounts if the interest rate effect (the differ-
+ence between present value and repayment amount) resulting
+from discounting is material; future cost increases that are fore-
+seeable and likely to occur on the balance sheet date at year-end
+must also be included in the measurement. Long-term obligations
+are generally discounted at the market interest rate applicable
+as of the respective balance sheet date, provided that it is not
+negative. The accretion amounts and the effects of changes in
+interest rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually certain
+to be collected is capitalized as a separate asset. No offsetting
+within provisions is permitted. Advance payments remitted are
+deducted from the provisions.
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period
+of their occurrence at their discounted settlement amounts, pro-
+vided that the obligation can be reliably estimated. The carrying
+amounts of the respective property, plant and equipment are
+increased by the same amounts. In subsequent periods, capital-
+ized asset retirement costs are amortized over the expected
+remaining useful lives of the assets, and the provision is accreted
+to its present value on an annual basis.
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or the
+scope of the relevant obligation, and also as a result of the reg-
+ular adjustment of the discount rate to current market interest
+rates. The adjustment of provisions for the decommissioning
+and restoration of property, plant and equipment for changes
+to estimates is generally recognized by way of a corresponding
+adjustment to these assets, with no effect on income. If the
+property, plant and equipment concerned have already been
+fully depreciated, changes to estimates are recognized within
+the income statement.
+Notes
+134
+The estimates for nuclear decommissioning provisions are
+derived from studies, cost estimates, legally binding civil agree-
+ments and legal information. A material element in the esti-
+mates are the real interest rates applied (the applied discount
+rate, less the cost increase rate). The impact on consolidated net
+income depends on the level of the corresponding adjustment
+posted to property, plant and equipment.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated proba-
+bilities cannot be determined reliably.
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+are recognized at the lower of the excess obligation upon per-
+formance under the contract and any potential penalties or
+compensation arising in the event of non-performance. Obliga-
+tions under an open contractual relationship are determined
+from a customer perspective.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of resources
+embodying economic benefits is not probable or where the
+amount of the obligation cannot be measured with sufficient
+reliability. Contingent liabilities were not recognized on the
+balance sheet.
+A more detailed description is not provided for certain contingent
+liabilities and contingent receivables, particularly in connection
+with pending litigation, as this information could influence
+further proceedings.
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan has
+been decided on by management and publicly announced or
+communicated to the employees or their representatives. Only
+those expenses that are directly attributable to the restructuring
+measures are used in measuring the amount of the provision.
+Expenses associated with the future operation are not taken
+into consideration.
+Income Taxes
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are rec-
+ognized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that will
+result in taxable or deductible amounts when taxable income is
+calculated for future periods, unless those differences are the
+result of the initial recognition of an asset or liability in a trans-
+action other than a business combination that, at the time of
+the transaction, affects neither accounting nor taxable profit/
+loss. Uncertain tax positions are recognized at their most likely
+value. IAS 12 further requires that deferred tax assets be recog-
+nized for unused tax loss carryforwards and unused tax credits.
+Deferred tax assets are recognized to the extent that it is proba-
+ble that taxable profit will be available against which the
+deductible temporary differences and unused tax losses can be
+utilized. Each of the corporate entities is assessed individually
+with regard to the probability of a positive tax result in future
+years. The planning horizon is basically three to five years in this
+context. Any existing history of losses is incorporated in this
+assessment. For those tax assets to which these assumptions
+do not apply, the value of the deferred tax assets is reduced.
+Deferred tax liabilities caused by temporary differences associ-
+ated with investments in affiliated and associated companies are
+recognized unless the timing of the reversal of such temporary
+differences can be controlled within the Group and it is probable
+that, owing to this control, the differences will in fact not be
+reversed in the foreseeable future.
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable for
+taxable income in the years in which temporary differences are
+expected to be recovered or settled. The effect on deferred tax
+assets and liabilities of changes in tax rates and tax law is gener-
+ally recognized in net income. Equity is adjusted for deferred
+taxes that had previously been recognized directly in equity. The
+change is generally recognized in the period in which the material
+legislative process is completed.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+Non-current assets that are held for sale either individually or
+collectively as part of a disposal group, or that belong to a dis-
+continued operation, are no longer depreciated. They are instead
+accounted for at the lower of the carrying amount and the fair
+value less any remaining costs to sell. If this value is less than
+the carrying amount, an impairment loss is recognized.
+The amount reported on the balance sheet represents the pres-
+ent value of the defined benefit obligations reduced by the fair
+value of plan assets. If a net asset position arises from this cal-
+culation, the amount is limited to the present value of available
+refunds and the reduction in future contributions and to the
+benefit from prepayments of minimum funding requirements.
+Such an asset position is recognized as an operating receivable.
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fiscal
+year is reported under personnel costs; the net interest on the
+net liability or asset from defined benefit pension plans deter-
+mined based on the discount rate applicable at the start of the
+fiscal year is reported under financial results.
+Notes
+132
+Equity Instruments
+IFRS defines equity as the residual interest in the Group's assets
+after deducting all liabilities. Therefore, equity is the net amount
+of all recognized assets and liabilities.
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right to
+require E.ON to purchase their shares on specified conditions.
+None of the contractual obligations has led to the transfer of
+substantially all of the risk and rewards to E.ON at the time of
+entering into the contract. In such a case, IAS 32, "Financial
+Instruments: Presentation," ("IAS 32") requires that a liability be
+recognized at the present value of the probable future exercise
+price. This amount is reclassified from a separate component
+within non-controlling interests and reported separately as a
+liability. The reclassification occurs irrespective of the probability
+of exercise. The accretion of the liability is recognized as interest
+expense. If a purchase commitment expires unexercised, the
+liability reverts to non-controlling interests. Any remaining
+difference between liabilities and non-controlling interests is
+recognized directly in retained earnings.
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships, for
+example), such termination rights require the reclassification of
+non-controlling interests from equity into liabilities under IAS 32.
+The liability is recognized at the present value of the expected
+settlement amount irrespective of the probability of termination.
+Changes in the value of the liability are reported within other
+operating income. Accretion of the share of the results of the
+non-controlling shareholders' share in net income is recognized
+in Net interest income/expense.
+If E.ON SE or a Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attributable
+additional costs (net after income taxes), is deducted from
+E.ON SE's equity until the shares are retired, distributed or resold.
+If such treasury shares are subsequently distributed or sold, the
+consideration received, net of any directly attributable additional
+transaction costs and associated income taxes, is recognized in
+equity.
+Share-Based Payment
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2"). From 2013 to 2016, share-based payments were
+based on the E.ON Share Matching Plan. Under this plan, the
+number of allocated rights was governed by the development
+of the financial measure ROCE (ROACE until 2015).
+In 2015 and 2016, virtual shares were granted exclusively to
+members of the Management Board of E.ON SE in the frame-
+work of base and performance matching in accordance with
+the share matching plan. Executives who in previous years had
+participated in the share matching plan were granted a multi-
+year bonus extending over a term of four years, whose payout
+amount depends on the performance of the E.ON share up to
+the payment date, instead of base and performance matching.
+The members of the Management Board of E.ON SE were
+granted virtual shares under the E.ON Share Matching Plan for
+the last time in 2017.
+In fiscal years 2017 and 2018, virtual shares were granted
+to members of the Management Board of E.ON SE and certain
+E.ON Group executives under the E.ON Performance Plan.
+The E.ON Performance Plan uses a fair value determined by
+an external service provider using a Monte Carlo simulation.
+In all cases, these are commitments of the Company which pro-
+vide for cash compensation based on the share price performance
+at the end of the term. The compensation expense is recognized
+in the income statement pro rata over the vesting period.
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits," ("IAS 19") is based on actuarial com-
+putations using the projected unit credit method, with actuarial
+valuations performed at year-end. The valuation encompasses
+both pension obligations and pension entitlements that are
+known on the reporting date and economic trend assumptions
+such as assumptions on wage and salary growth rates and
+pension increase rates, among others, that are made in order
+to reflect realistic expectations, as well as variables specific
+to reporting dates such as discount rates, for example.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+133
+Included in gains and losses from the remeasurements of the
+net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between esti-
+mated and actual variations in underlying assumptions about
+demographic and financial variables. Additionally included is the
+difference between the actual return on plan assets and the
+expected interest income on plan assets included in the net
+interest result. Remeasurements effects are recognized in full in
+the period in which they occur and are not reported within the
+Consolidated Statements of Income, but are instead recognized
+within the Statements of Recognized Income and Expenses as
+part of equity.
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+of which accumulated other comprehensive income
+3,301
+-203
+792
+IAS 39
+measurement
+category
+Afs
+Revaluation
+due to change
+in scope
+Revaluation
+due to the
+application of
+the impair-
+ment model
+Other share investments
+Equity investments that fall within the scope of IFRS 10
+and IFRS 11 and are accounted for at cost on materiality
+grounds
+Financial receivables and other financial assets
+688
+Receivables from finance leases
+329
+n/a
+Other financial receivables and financial assets
+359
+LaR
+Carrying
+amounts,
+January 1,
+2018
+746
+154
+FVPL
+Equity investments
+IFRS 9
+2017
+Carrying
+amounts,
+December 31,
+293
+-196
+-46
+39
+Revaluation due to change in scope
+Deferred tax liabilities
+Non-controlling interests
+Fair value measurement of financial instruments,
+January 1, 2018
+90
+The first-time application of IFRS 9 and IFRS 15 had no material
+effect on earnings per share under IAS 33.
+IFRS 9-Effect of First-Time Adoption
+Classification and measurement
+IFRS 9 introduces new regulations for the classification and
+measurement of financial assets. E.ON has replaced the previous
+categories under IAS 39 of financial assets held for trading (HfT),
+available-for-sale securities (AFS) and loans and receivables (LaR)
+with the new categories under IFRS 9 of financial assets mea-
+sured at amortized cost (AmC), financial assets measured at fair
+value through other comprehensive income (FVOCI) and financial
+assets measured at fair value through profit and loss (FVPL).
+The classification of financial assets is based on the business
+model and the characteristics of the cash flows.
+If a financial asset is held for the purpose of collecting contractual
+cash flows and the cash flows of the financial asset represent
+exclusively interest and principal payments, then the financial
+asset is measured at amortized cost (AmC).
+A financial asset is measured at fair value through other compre-
+hensive income (FVOCI) if it is used both to collect contractual cash
+flows and for sales purposes and the cash flows of the financial
+asset consist exclusively of interest and principal payments.
+Derivatives and debt instruments that do not exclusively serve
+to collect contractual cash flows or to both generate contractual
+cash flows and sales revenue, or whose cash flows do not exclu-
+sively consist of interest and principal payments are measured at
+fair value through profit and loss (FVPL). For equity instruments
+that are not held for trading purposes, E.ON has uniformly exer-
+cised the option of recognizing changes in fair value through profit
+and loss (FVPL). Changes in fair value previously recognized in
+accumulated other comprehensive income were reclassified to
+retained earnings at the date of transition. The classification into
+different measurement categories for certain financial instruments
+resulted in particular from the reassessment of business mod-
+els.
+Notes
+The following table presents a reconciliation of the carrying
+amounts of financial assets and the corresponding measure-
+ment categories from IAS 39 to IFRS 9 at the date of first-time
+adoption.
+Reconciliation of the Measurement Categories of Financial Assets from IAS 39 to IFRS 9
+138
+€ in millions
+Reclassification to retained earnings
+measurement
+-46
+AmC
+820
+LaR
+846
+1,593
+1,593
+Other operating assets
+n/a
+279
+n/a
+279
+Derivatives with hedging relationships
+FVPL
+1,401
+HfT
+1,401
+Derivatives with no hedging relationships
+n/a¹
+56
+747
+category
+n/a
+-66
+592
+n/a
+-1
+687
+-1
+328
+n/a
+359
+241
+AmC
+118
+n/a¹
+Trade receivables and other operating assets
+Trade receivables
+7,152
+-66
+7,086
+3,879
+LaR
+3,813
+Fair value measurement of financial instruments,
+December 31, 2017
+€ in millions
+Reconciliation of Accumulated Other Comprehensive Income
+(Fair Value Measurement of Financial Instruments)-IFRS 9
+LaR
+2,708
+Cash and cash equivalents
+AmC
+203
+FVOCI
+2,225
+FVPL
+991
+3,419
+AfS
+3,419
+Securities and fixed-term deposits
+n/a
+773
+To hedge the foreign currency risk arising from the Company's
+net investment in foreign operations, derivative as well as non-
+derivative financial instruments are used. Gains or losses due
+to changes in fair value and from foreign currency translation
+are recognized within equity, as a component of other compre-
+hensive income, under currency translation adjustments.
+-2,581
+of which non-controlling interests (before reclassification)
+3,195
+2,708
+3,195
+2,192
+516
+liabilities.
+The first-time application of IFRS 9 had no effect on financial
+¹Relates to receivables from equity investments that fall within the scope of IFRS 10 and IFRS 11 and are accounted for at cost on materiality grounds.
+19,729
+-67
+n/a
+3,757
+AmC
+1,782
+-46
+19,842
+n/a
+3,301
+LaR
+1,782
+Total financial assets
+Assets held for sale
+Restricted cash and cash equivalents
+FVPL
+AmC
+Non-current liabilities
+35,198
+199
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+137
+Reconciliation of Retained Earnings-IFRS 9 and IFRS 15
+€ in millions
+Retained earnings, December 31, 2017
+Effects from IFRS 9
+-4,552
+102
+Reclassification from accumulated other comprehensive
+income (fair value measurement of financial instruments)
+Allocation to provisions for expected future credit losses
+Deferred tax liabilities
+196
+-27
+Non-controlling interests
+Effects from IFRS 15
+Retained earnings, January 1, 2018
+-111
+-4,561
+Report of the Supervisory Board
+CEO Letter
+55,968
+119
+35,397
+of which operating liabilities
+4,690
+196
+4,886
+of which deferred tax liabilities
+1,616
+3
+1,619
+-2,378
+Current liabilities
+31
+14,075
+of which trade payables and other operating liabilities
+8,099
+31
+8,130
+Total equity and liabilities
+55,950
+-101
+14,044
+-67
+E.ON currently uses hedges in the framework of cash flow hedges
+and hedges of a net investment.
+In fiscal year 2018, E.ON generated revenues of €81 million
+(2017: €83 million), interest income of €83 million (2017:
+€72 million), no material interest expenses (2017: €1 million),
+and other income of €243 million (2017: €309 million) and other
+expenses of €1,050 million (2017: €975 million), with the fully
+consolidated companies to be transferred in the Renewables
+segment.
+121
+1,370
+Income/Loss from securities, interest and similar income
+Available for sale
+109
+Amortized cost
+523
+Income/Loss from securities, interest and similar income
+-5
+-64
+Impairment charges/reversals on other financial assets
+Income/Loss from equity investments
+44
+Income/Loss from equity investments
+-30
+Impairment charges/reversals on other financial assets
+15
+Other
+59
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+147
+Financial Results
+Financial Results
+Fair value through P&L
+€ in millions
+2017
+Income/Loss from companies in which equity investments
+are held
+74
+Income/Loss from companies in which equity investments
+are held
+59
+Fair value through P&L
+€ in millions
+Report of the Supervisory Board
+111
+21
+The decline in financial results relative to the previous year is
+primarily attributable to the discontinuation of the refund of
+interest from judicial proceedings in connection with the refund
+of the nuclear-fuel tax in the prior year.
+28
+Financial results
+-669
+33
+Net interest income/loss
+-713
+-586
+Other interest expenses
+-517
+-33
+Held for trading
+-126
+-718
+Amortized cost
+-593
+-1,337
+Held for trading
+Other interest income
+Interest and similar expenses
+Amortized cost
+Fair value through P&L
+Other interest expenses
+Net interest income/loss
+Financial results
+Fair value through OCI
+282
+Loans and receivables
+Other interest income
+Interest and similar expenses
+99
+8
+1,142
+-1,236
+Other interest income in the prior year consists primarily of
+income from the above-mentioned interest relating to judicial
+proceedings. Other interest expenses include the accretion of
+provisions for asset retirement obligations in the amount of
+€61 million (2017: €55 million). Also contained in this item is
+the net interest cost from provisions for pensions in the amount
+of €62 million (2017: €82 million).
+CEO Letter
+(9) Financial Results
+2018
+2017
+€ in millions
+Other Operating Expenses
+The following table provides details of other operating expenses
+for the periods indicated:
+146
+Notes
+Miscellaneous other operating income included reversals of
+impairment charges in property, plant and equipment, the
+proceeds of passing on charges for the provision of personnel
+and services, reimbursements, and rental and lease interest.
+Gains were realized on the sale of securities in the amount of
+€91 million (2017: €424 million).
+Income from the reversal of provisions resulted primarily from
+the adjustment of long-term environmental remediation obliga-
+tions due to the clarification of measures and payment dates.
+The gain on the disposal of equity investments and securities
+consisted primarily of gains on the disposal of Uniper in the
+amount of €593 million. In addition, there were gains on the
+disposal of Hamburg Netz in the amount of €154 million and
+E.ON Gas Sverige AB in the amount of €134 million.
+Corresponding items from exchange rate differences and
+derivative financial instruments are included in other operating
+expenses.
+Gains and losses on derivative financial instruments relate to
+gains from fair value measurement from derivatives under IFRS 9.
+Material impacts on the reporting date resulted in particular
+from the derecognition in income of financial derivatives in con-
+nection with the disposal of Uniper (see Note 4).
+Income from exchange rate differences consisted primarily of
+realized gains from currency derivatives in the amount of
+€1,170 million (2017: €1,359 million) and from receivables
+and payables denominated in foreign currency in the amount of
+€47 million (2017: €121 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €389 million (2017: €480 million).
+E.ON employs derivatives to hedge commodity risks as well as
+currency and interest risks.
+Other operating income declined by 31 percent from €7,371 mil-
+lion in the previous year to €5,107 million. The decline is mainly
+due to the refund of nuclear-fuel taxes paid in the amount of
+€2,850 million that was received in the previous year.
+767
+7,371
+1,068
+674
+Refund of nuclear-fuel tax
+2,850
+Gain on the reversal of provisions
+388
+Loss from exchange rate differences
+449
+53
+76
+Miscellaneous
+688
+Total
+5,107
+Reversal of valuation allowances on loans
+and receivables
+The following table provides details of financial results for the
+periods indicated:
+1,626
+Loss on derivative financial instruments
+1,745
+29,961
+22,813
+1,938
+Expenses for purchased services
+Total
+28,216
+20,875
+Expenses for raw materials and supplies
+and for purchased goods
+2017
+2018
+€ in millions
+Cost of Materials
+Cost of materials of €22,813 million was well below the prior-
+year level of €29,961 million. The decrease is primarily attrib-
+utable to the netting effects described above (€7.9 billion) in
+connection with the first-time application of IFRS 15 in 2018.
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity. Network usage charges and fuel supply are also
+included in this line item. Expenses for purchased services consist
+primarily of maintenance costs.
+(8) Cost of Materials
+Miscellaneous other operating expenses included expenses for
+external consulting, audit and non-audit services in the amount
+of €162 million (2017: €214 million), advertising and marketing
+expenses in the amount of €176 million (2017: €151 million),
+write-downs of trade receivables in the amount of €181 million
+(2017: €200 million), rents and leases in the amount of €130 mil-
+lion (2017: €128 million) and other services rendered by third
+parties in the amount of €537 million (2017: €427 million). This
+item also includes IT expenditures, insurance premiums and travel
+expenses. In addition, other operating expenses decreased
+owing to prior-year obligation to pass on a portion (€327 million)
+of the refunded nuclear-fuel tax to minority shareholders of our
+jointly owned power stations.
+Losses from exchange rate differences consisted primarily
+of realized losses from currency derivatives in the amount
+of €1,122 million (2017: €1,180 million) and from receivables
+and payables denominated in foreign currency in the amount
+of €293 million (2017: €123 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €211 million (2017: €365 million).
+Other operating expenses of €4,550 million were 28 percent
+below the prior-year level of €6,279 million. This is principally
+because expenditures relating to derivative financial instruments
+decreased substantially, from €1,828 million to €630 million.
+This was primarily due to derivative expenses in the prior year
+(€680 million) related to the reciprocal rights and obligations
+arising from the agreement with Fortum. Expenses from
+exchange rate differences in the amount of €1,626 million
+remained almost at the same level as the previous year of
+€1,668 million.
+630
+1,828
+Taxes other than income taxes
+68
+91
+Loss on disposal of non-current assets and
+securities
+1,668
+141
+Miscellaneous
+2,085
+2,500
+Total
+4,550
+6,279
+192
+Gain on disposal of non-current assets and
+securities
+Interest expenses also include €3 million (2017: €29 million)
+of lower positive earnings effects from non-controlling interests
+in fully consolidated partnerships, which are to be recognized
+as liabilities in accordance with IAS 32, and with legal structures
+that give their shareholders a statutory right of withdrawal com-
+bined with an entitlement to a settlement payment.
+Realized gains and losses from interest rate swaps are shown
+net on the face of the income statement.
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. These standards and interpreta-
+tions are not yet being applied by E.ON because their application
+is not yet mandatory or, in some cases, because adoption by the
+EU remains outstanding at this time.
+Significant Standards and Interpretations Not
+Yet Applicable in 2018
+• Amendments to IAS 40, "Transfers of Investment Property"
+Amendments to IFRS 4, "Applying IFRS 9 with IFRS 4"
+Amendments to IFRS 2, "Classification and Measurement of
+Share-Based Payment"
+Omnibus Standard to Amend Multiple International Financial
+Reporting Standards (2014-2016 Cycle), Application of the
+Amendments to IFRS 1 and IAS 28
+IFRIC 22, "Foreign Currency Transactions and Advance
+Consideration"
+•
+•
+In addition to the new standards described in detail above,
+other standards and interpretations are to be applied that do
+not have a material impact on E.ON's Consolidated Financial
+Statements as of December 31, 2018:
+Additional Standards and Interpretations
+Applicable in 2018
+The E.ON Group recognizes the majority of its revenue from
+contracts with customers over time and not point in time.
+Revenue is broken down in detail in the information by segment
+(see Note 33) into external and internal revenue per segment,
+as well as by material regions and technologies. This overview
+also shows how sales are reflected in operating cash flow
+before interest and taxes.
+offsetting entry in cost of materials, but instead are netted
+directly. The netting effects led to a €7.9 billion reduction in the
+income statement in 2018; the change has no impact on earn-
+ings. Starting from the fourth quarter of 2018, netting was carried
+out both for the direct marketing model as well as, for the first
+time, the EEG feed-in model (the previous quarters were adjusted
+accordingly; €3.1 billion reduction in revenue for 2018 as a
+whole). The change has no impact on earnings. Other conversion
+effects from IFRS 15 related primarily to the divergence of cash
+flows and revenue recognition, which led to the recognition of
+contract assets (€9 million) and contract liabilities (€227 million),
+as well as the compulsory capitalization of directly attributable
+costs of contract acquisition, which are expected to be amortized
+over the term of the contract (€61 million). This reduced retained
+earnings by €111 million as of January 1, 2018, taking deferred
+taxes into account.
+140
+Notes
+The amended revision criteria for principal/agent relationships
+result in a material change in the income statement for certain
+passthroughs for the promotion of Renewables. These pass-
+throughs are no longer recognized as sales revenues with an
+IFRS 15-Effect of First-Time Adoption
+The effects of determining expected future credit losses in
+connection with the initial application of the new impairment
+model are shown in the following table:
+Reconciliation of Valuation Allowances-IFRS 9
+€ in millions
+Trade receivables
+Financial receivables and other financial assets
+Accumulated valuation
+allowances under IAS 39
+as of December 31, 2017
+IFRS 16, "Leases"
+Change in valuation allow-
+ances due to the application
+of the new impairment model
+in accordance with IFRS 9
+-737
+-99
+-66
+-1
+-803
+-100
+Derivatives and Hedging
+All derivative financial instruments in place as of December 31,
+2017, which were used as hedging transactions in a cash flow
+hedge or in a hedge of a net investment, meet the requirements
+of IFRS 9 for hedge accounting and are therefore being carried
+forward unchanged, taking into account a change in designation.
+However, in accordance with IFRS 9, the currency basis spread
+(hedging costs) will from now on be separated from the hedging
+instrument and reported separately as an excluded component
+in accumulated other comprehensive income in the reserve for
+hedging costs as a component of equity.
+This change was applied retrospectively to all foreign currency
+derivatives that are part of cash flow hedges or hedges of a net
+investment and resulted in a reclassification of €73 million from
+the hedging reserve to the hedging cost reserve as of January 1,
+2018. The corresponding prior-year figures were restated retro-
+spectively.
+Accumulated valuation
+allowances as of
+January 1, 2018
+For trade receivables, expected credit losses are recognized over
+their entire residual term using the simplified method. For other
+financial assets, E.ON first determines the credit loss expected
+within the first twelve months. In derogation of this, in the event
+of a significant increase in the default risk, the expected credit
+loss over the entire residual term of the respective instrument is
+recognized. A significant increase in the default risk is assumed
+if the internally determined counterparty risk has been down-
+graded by at least three levels since initial recognition. If external
+or internal rating information is available, the expected credit
+loss is determined on the basis of this data. If no rating informa-
+tion is available, E.ON determines default ratios on the basis
+of historical default rates, taking into account forward-looking
+information on economic developments. In the E.ON Group,
+a default or the classification of a receivable as uncollectible is
+assumed after 180 or 360 days, depending on the region.
+In January 2016, the IASB published the accounting standard
+IFRS 16, "Leases," which replaces the previous standard IAS 17,
+"Leases," and IFRIC 4, "Determining Whether an Arrangement
+Contains a Lease." The application of IFRS 16 is required for fiscal
+years beginning on or after January 1, 2019.
+The effects of the introduction of IFRS 16 on the individual
+components of the consolidated financial statements and the
+presentation of the financial position and performance of the
+Group can be described as follows:
+⋅
+•
+•
+•
+Amendments to IFRS 9, "Prepayment Features with Negative
+Compensation," published in October 2017, transposed into
+European law, first-time application in fiscal year 2019
+Amendments to IFRS 3, "Definition of a Business," published
+in October 2018, not yet transposed into European law,
+expected first-time application in fiscal year 2020
+Amendments to IAS 28, "Long-term Interests in Associates
+and Joint Ventures," published in January 2017, transposed
+into European law, first-time application in fiscal year 2019
+Amendments to IAS 19, "Plan Amendment, Curtailment or
+Settlement," published in February 2018, not yet transposed
+into European law, expected first-time application in fiscal
+year 2019
+Amendments to IAS 1 and IAS 8, "Definition of Material,"
+published in October 2018, not yet transposed into European
+law, expected first-time application in fiscal year 2020
+•
+•
+•
+•
+•
+Additional standards and interpretations have been adopted in
+addition to the new standards outlined in detail above, but no
+material impact on E.ON's consolidated financial statements
+is expected:
+Additional Standards and Interpretations Not
+Yet Applicable
+The revised presentation of lease payments arising from
+operating leases will result in improved cash flows from
+operating activities and a deterioration in cash flow from
+financing activities. Interest payments are presented in cash
+flow from operating activities.
+•
+The first-time application of the standard will lead to an
+increase in both property, plant and equipment (accounting
+for the rights of use) and financial liabilities (recognition of
+the corresponding lease liabilities) in the balance sheet, par-
+ticularly taking into account the financial obligations arising
+from operating leases reported under Note 27. Taking into
+account existing accruals and deferrals, the impact of the
+transition on the amount of leasing liabilities and rights of use
+for continuing activities at the time of first-time application
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+E.ON is applying the modified retrospective approach to its
+transition to IFRS 16; prior-year figures have not been restated.
+Low-value leased assets and short-term leases (less than twelve
+months) are accounted for using the options to facilitate appli-
+cation. The Group has also decided to apply various simplification
+options for the transition. Agreements entered into before
+January 1, 2019, and still valid at the date of transition have not
+been reviewed to determine whether they qualify as leases under
+IFRS 16. E.ON is conducting a Group-wide project for the imple-
+mentation of IFRS 16. The analysis of existing agreements, the
+drafting of agreements and the impact analysis were largely
+completed at the end of 2018.
+Combined Group Management Report
+141
+•
+•
+is expected to be €0.5 to €0.7 billion. As a result of this
+change in the balance sheet, the equity ratio of the Group will
+decline slightly and net financial debt will increase slightly.
+In the future, instead of other operating expenses, depreciation
+on rights of use and interest expenses will be recognized in
+the income statement from the accretion of lease liabilities
+(unless they relate to expenses from short-term and low-value
+leases). This will lead to slightly improved earnings before
+interest and taxes (EBIT).
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Interest expense was reduced by capitalized interest on debt
+totaling €12 million (2017: €5 million).
+The expected future credit loss is calculated by multiplying the
+probability of default by the carrying amount of the financial
+asset (exposure at default) and the expected loss ratio (loss given
+default). The probability of default describes the probability that
+a debtor will not meet their payment obligations and the receiv-
+able will therefore default. Exposure at default is the amount of
+the financial asset to be allocated to E.ON at the time of default.
+Loss given default is the expectation of what portion of a financial
+asset is no longer recoverable in the event of default and is
+determined taking into account guarantees, other loan collateral
+and, if appropriate, insolvency ratios.
+Impairment of financial assets
+Of the amount reported as current taxes, -€570 million is
+attributable to previous years (2017: -€43 million).
+The tax expense in 2018 amounted to €46 million (2017: €803
+million). In 2018, the tax rate was 1 percent (2017: 16 percent).
+In the reporting year, higher tax-free earnings components or
+deferred tax liabilities and the reversal of tax provisions for pre-
+vious years led to a reduction in the tax rate. Significant changes
+in the tax rate compared with the previous year are also due to
+the one-off effects in 2017 of the nuclear-fuel tax refund and
+the resulting income tax burden in Germany. The nuclear-fuel tax
+effects led to the use of tax loss carryforwards and were subject
+to the so-called minimum taxation.
+148
+Notes
+803
+46
+Total income taxes
+73
+205
+Deferred taxes
+131
+125
+Foreign
+-58
+80
+Domestic
+730
+(10) Income Taxes
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+Income Taxes
+€ in millions
+2018
+2017
+Deferred taxes resulted from changes in temporary differences,
+which totaled €376 million (2017: -€334 million), loss carry-
+forwards of -€171 million (2017: €412 million) and tax credits
+amounting to €0 million (2017: -€5 million).
+Domestic income taxes
+507
+Foreign income taxes
+-49
+223
+Current taxes
+-159
+-110
+According to IFRS 9, impairments of financial assets must no
+longer be recognized only for losses already incurred, but also
+for expected future credit defaults. E.ON takes into account
+expected future credit losses on initial recognition of financial
+assets carried at amortized cost, financial assets measured at
+fair value through other comprehensive income, and receivables
+from finance leases.
+Income tax assets amounted to €236 million (previous year:
+€514 million), of which €229 million was short-term (previous
+year: €514 million), while income tax liabilities amounted to
+€566 million (previous year: €1,642 million), of which €262 mil-
+lion was short-term (previous year: €673 million). These items
+consist primarily of income taxes for the respective current year
+and for prior-year periods that have not yet been definitively
+examined by the tax authorities.
+Changes in tax rates resulted in tax income of €46 million in
+total (2017: tax expense of €129 million).
+139
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+-0.7
+-36
+-3.9
+-129
+Foreign tax rate differentials
+30.0
+1,488
+30.0
+985
+Expected income taxes
+Income taxes relating to discontinued operations (see also Note 4)
+are reported in the income statement under "Income from dis-
+continued operations." In the fiscal year they amounted to tax
+expense of €156 million (2017: tax income of €364 million).
+The base income tax rate of 30 percent applicable in Germany,
+which is unchanged from the previous year, is composed of
+corporate income tax (15 percent), trade tax (14 percent) and
+the solidarity surcharge (1 percent). The differences from the
+effective tax rate are reconciled as follows:
+Reconciliation to Effective Income Taxes/Tax Rate
+2018
+2017
+€ in millions
+As of December 31, 2018, €5 million (2017: €5 million) in deferred
+tax liabilities were recognized for the differences between net
+assets and the tax bases of subsidiaries and associated companies
+(outside basis differences). Accordingly, deferred tax liabilities
+were not recognized for temporary differences of €259 million
+(2017: €717 million) at subsidiaries and associated companies,
+as E.ON is able to control the timing of their reversal and the
+temporary difference will not reverse in the foreseeable future.
+%
+%
+Income/Loss from continuing operations before taxes
+3,284
+100.0
+4,960
+100.0
+€ in millions
+593
+2018
+Gain on derivative financial instruments
+7
+6
+1
+13
+5
+8
+226
+149
+77
+Disposals/Mergers
+Additions
+Consolidated companies
+as of January 1, 2017
+Total
+Foreign
+Domestic
+Scope of Consolidation
+The number of consolidated companies changed as follows in
+2018:
+(3) Scope of Consolidation
+Amendments to the references to the accounting framework,
+published in March 2018, not yet transposed into European
+law, expected first-time application in fiscal year 2020
+Consolidated companies
+as of December 31, 2017
+Additions
+84
+148
+232
+Renewables
+On March 12, 2018, E.ON SE entered into an agreement with
+RWE AG to acquire the 76.8-percent stake in innogy SE held by
+RWE. The acquisition is to take place within the framework of a
+comprehensive exchange of business activities and investments.
+In this context, E.ON will transfer to RWE most of its Renewables
+business and the minority interests held by E.ON subsidiary
+PreussenElektra in the Emsland and Gundremmingen nuclear
+power plants operated by RWE. However, certain Renewables
+business activities of e.disnatur, in Germany and Poland, and a
+20-percent interest in the Rampion offshore wind farm will remain
+with the E.ON Group. In exchange for the shareholding in innogy,
+RWE will be granted a 16.67-percent shareholding in E.ON SE
+by way of a 20-percent capital increase against contribution in
+kind from existing authorized capital. RWE will also make a cash
+payment of €1.5 billion to E.ON. Furthermore, RWE will receive
+the innogy gas storage businesses and the stake in the Austrian
+energy supplier Kelag. The transaction, which was notified to
+the EU Commission in January 2019, will be completed in mul-
+tiple steps and is subject to the usual antitrust approvals.
+Exchange of Business Activities with RWE
+Discontinued Operations and Assets Held for
+Sale in 2018
+(4) Acquisitions, Disposals and Discontinued
+Operations
+142
+Notes
+In 2018, a total of 17 domestic and 14 foreign associated
+companies were consolidated under the equity method (2017:
+18 domestic companies and 12 foreign companies). In 2018,
+one domestic company reported as joint operations was pre-
+sented pro rata on the consolidated financial statements (2017:
+one domestic company).
+232
+Omnibus Standard to Amend Multiple International Finan-
+cial Reporting Standards (2015-2017 Cycle), published
+in December 2017, not yet transposed into European law,
+expected first-time application in fiscal year 2019
+148
+as of December 31, 2018
+Consolidated companies
+Disposals/Mergers
+9
+4
+5
+Tax effects of other taxes on income
+4
+5
+84
+The parts of the Renewables business to be transferred to RWE
+have been presented as discontinued operations since June 30,
+2018. The expenses and income attributable to these activities
+were reported separately on the face of the Group's income
+statement under income/loss from discontinued operations, net.
+The prior-year figures were adjusted accordingly. The relevant
+assets and liabilities are reported in a separate line on the bal-
+ance sheet; prior-year figures are not to be adjusted. The cash
+flows of the parts of the Renewables business to be transferred
+are also reported separately in the cash flow statement. As in
+the income statement, the previous year's figures were adjusted
+accordingly in the cash flow statement.
+IFRIC 23, "Uncertainty over Income Tax Treatments," pub-
+lished in June 2017, not yet transposed into European law,
+first-time application in fiscal
+year 2019
+IFRS 17, "Insurance Contracts," published in May 2017, not
+0.7
+33
+1
+-2.9
+-145
+-17.4
+-571
+1.4
+70
+1.0
+31
+-19.7
+-978
+2.7
+1,303
+89
+Effective income taxes/tax rate
+Other
+Tax effects of income taxes related to other periods
+46
+1.4
+803
+16.2
+Changes in tax rate/tax law
+-46
+-1.4
+129
+2.6
+Tax effects on tax-free income
+-124
+-3.8
+-240
+yet transposed into European law, expected first-time appli-
+cation in fiscal year 2021
+-4.8
+-212
+-6.5
+411
+8.3
+Tax effects on income from companies accounted for under the equity method
+Tax effects of goodwill impairment and elimination of negative goodwill
+22
+0.7
+71
+1.4
+Tax effects of non-deductible expenses and permanent differences
+All intragroup receivables, payables, expenses and income
+between the companies of the discontinued operation and the
+remaining E.ON Group companies will be eliminated. For deliv-
+eries, goods and services that were previously intragroup in
+nature, but which after deconsolidation will be continued either
+9
+The key figures presented in the segment reporting also include
+the business activities in the Renewables segment which are
+to be transferred to RWE. These figures are presented as if the
+transferred operation had not been reclassified in accordance
+with IFRS 5. Note 33 provides additional information and pre-
+sents the corresponding reconciliations.
+On February 8, 2018, a 20-percent stake (10 percent E.ON stake)
+in Enerjisa Enerji A.Ş. was floated on the stock exchange. The
+issue price was TRY 6.25 per 100 shares. Enerjisa Enerji A.Ş.
+continues to retain the status of a joint venture between E.ON
+and Sabanci (40 percent each).
+Enerjisa
+After the exercise of this option on October 20, 2017, the corre-
+sponding HHNG shares were transferred to the buyer effective
+January 1, 2018. As of December 31, 2017, the balance sheet
+items related to HHNG were classified as a disposal group in
+accordance with IFRS 5. The cash inflow of €0.3 billion that
+occurred in 2017 is recorded in the consolidated cash flow state-
+ment for 2017 under disposals and does not have an effect on
+economic net debt as of December 31, 2017. HHNG was decon-
+solidated in the first quarter of 2018. The gain on deconsolidation
+amounted to €154 million.
+144
+Notes
+In July 2017, the Hamburg Senate approved the exercise of a call
+option agreed in 2014 (following a corresponding referendum)
+with the Free and Hanseatic City of Hamburg on the previous
+E.ON majority stake in Hamburg Netz GmbH (74.9 percent,
+HHNG). E.ON held this stake in the Energy Networks segment
+through HanseWerk AG (E.ON's ownership interest: 66.5 percent).
+Hamburg Netz
+On April 25, 2018, the E.ON Group completed the sale of its
+Swedish gas distribution company E.ON Gas Sverige AB, which
+is part of the Energy Networks segment. The transaction was
+completed with retroactive economic effect to January 1, 2018.
+The buyer was the European Diversified Infrastructure Fund II.
+The gain on deconsolidation amounted to around €0.1 billion.
+E.ON Gas Sverige
+On July 26, 2018, E.ON sold its interest in E.ON Elektrárne s.r.o.
+to Západoslovenská energetika a.s. (ZSE). The parties agreed not
+to disclose the sale price. The transaction also resulted in the
+repayment of shareholder loans. ZSE is owned by the Slovak state
+(51 percent) and the E.ON Group (49 percent). The assets of E.ON
+Elektrárne s.r.o. primarily include the Malženice gas and steam
+power plant. The transaction was closed on August 15, 2018.
+E.ON Elektrárne
+After derecognition of the Uniper shares of approximately
+€3.0 billion reported as assets held for sale prior to completion of
+the transaction and the recognition in income of effects from the
+equity valuation previously recognized in other comprehensive
+income, the gain on disposal amounted to €0.6 billion. Upon
+completion of the transaction, derivative financial instruments
+with a negative fair value of €0.5 billion were also derecognized
+through profit and loss. The derivative financial instruments
+were related to the reciprocal rights and obligations arising from
+the agreement with Fortum. This also resulted in derivative
+financial instruments with a market value of -€0.7 billion as of
+December 31, 2017. This amount was recognized in the income
+statement in 2017. The fair value of the 46.65-percent share-
+holding in Uniper totaled €4.4 billion as of December 31, 2017.
+E.ON and Finnish energy company Fortum Corporation, Espoo,
+Finland, entered into an agreement in September 2017 that
+enabled E.ON to decide to sell its 46.65-percent stake in Uniper
+to Fortum at a total value of €22 per share at the beginning of
+2018. In this connection Fortum published a takeover offer for
+all of the shares of Uniper on November 7, 2017. In January
+2018, E.ON decided to offer its shareholding in Uniper for sale
+in the framework of the takeover bid. After all regulatory approv-
+als and conditions for the completion of the voluntary public
+takeover bid had been met, the sale of the stake in Uniper to
+Fortum was completed on June 26, 2018. The purchase price
+was €3.8 billion. This includes the dividends paid by Uniper to
+E.ON in 2018.
+Uniper
+In addition to the transfer of the majority of the Renewables
+business, under the agreement RWE will acquire the minority
+interests held by E.ON in the nuclear power plants operated
+by RWE, Kernkraftwerke Lippe-Ems GmbH and Kernkraftwerk
+Gundremmingen GmbH. The minority interests included in the
+Non-Core Business segment and related liabilities were classified
+as a disposal group from June 30, 2018. In total, assets in the
+amount of €0.2 billion, provisions in the amount of €0.8 billion
+and liabilities in the amount of €0.2 billion were reclassified to
+the disposal group.
+Minority Interests in Nuclear Power Plants
+The preceding figures do not include receivables from or liabilities
+to the E.ON Group.
+-2,732
+-675
+Discontinued Operations and Assets Held for
+Sale in 2017
+In addition to the disposals of Uniper and Hamburg Netz
+described above, the following significant transactions were
+carried out in 2017:
+E.ON Värme Lokala Energilösningar
+On December 19, 2017, E.ON Värme Lokala Energilösningar AB,
+including eleven small and medium-sized district heating
+networks in nine Swedish municipalities, were sold to Adven
+Sweden AB. Adven is a leading supplier of energy solutions and
+district heating in Finland, Sweden and Estonia. The parties
+agreed not to disclose the purchase price. As the contract was
+concluded retroactively to October 1, 2017, all transactions
+starting from that date have been transferred to Adven Sweden
+AB. E.ON Värme Lokala Energilösningar AB was deconsolidated
+in the Customer Solutions Sweden segment in the fourth quar-
+ter of 2017. This resulted in the derecognition of approximately
+€100 million on the consolidated balance sheet.
+1,962
+1,607
+Income from exchange rate differences
+2017
+2018
+€ in millions
+Other Operating Income
+The table below provides details of other operating income for
+the periods indicated:
+(7) Other Operating Income and Expenses
+between the companies to be transferred or with third parties, the
+elimination entries required for the consolidation of income and
+expenses were allocated entirely to the discontinued operation.
+145
+E.ON Stock
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+Own work capitalized amounted to €394 million in 2018
+(2017: €513 million) and resulted primarily from capitalized work
+performed in connection with IT projects and network assets.
+(6) Own Work Capitalized
+Revenues are broken down into intragroup and external revenues
+in the segment information (Note 33). They are also broken
+down into key regions and technologies. The overview also shows
+the effect of revenues on operating cash flow before interest
+and taxes.
+Revenues recognized in the current reporting period arising
+from performance obligations that have been fully or partially
+settled in prior reporting periods amounted to €1.0 billion. The
+total amount of benefit obligations already contracted but still
+outstanding (excluding expected contract renewals and expected
+new contracts) was €9.5 billion as of December 31, 2018.
+The majority of these benefit obligations are expected to be
+met within the next three
+years.
+At €30.3 billion, revenues in 2018 were roughly 20 percent lower
+than in the previous year. Revenues in the Energy Networks
+Germany segment were significantly lower than in the previous
+year. . The main factors reducing sales were the netting effects in
+connection with IFRS 15 (€7.6 billion) and the sale of Hamburg
+Netz with effect from January 1, 2018. Revenues also declined
+at Customer Solutions Germany. Sales declined primarily due
+to the expiration of procurement contracts for certain Uniper
+wholesale customers, price adjustments and a decline in electric-
+ity sales to residential and smaller business customers. The sale
+of E.ON Gas Sverige AB in the second quarter of 2018 also
+had a negative impact on sales in Energy Networks Sweden.
+By contrast, sales in the UK rose as a result of price increases
+and weather-driven volume increases in the gas business.
+(5) Revenues
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+-2,057
+Tax effects of changes in value and non-recognition of deferred taxes
+1,549
+7,321
+2,408
+operations, net
+286
+23
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+143
+The following table shows major balance sheet line items for
+the discontinued operation in the Renewables segment:
+Major Balance Sheet Line Items-Renewables
+(Summary)
+€ in millions
+Intangible assets and goodwill
+Property, plant and equipment
+Miscellaneous assets
+Assets held for sale
+Income/Loss from discontinued
+11,278
+Income taxes
+364
+Pursuant to IFRS 5.18, the carrying amounts of all of the dis-
+continued operation's assets and liabilities must be measured
+in accordance with applicable IFRS immediately before their
+reclassification. In the course of this measurement, no material
+impairments or need for reversals were recognized. In addition,
+the carrying amount of the discontinued operation as a whole
+must be tested for impairment by comparing it with the fair value
+less costs to sell. The fair value less costs to sell is determined
+from the transaction price agreed with RWE for the parts of the
+Renewables business to be transferred less the expected trans-
+action costs. The comparison did not result in the recognition of
+any additional impairment as of December 31, 2018.
+The following table shows the main items of the income state-
+ment of the discontinued operation in the Renewables segment
+(after allocation of elimination entries):
+Income Statement-Renewables (Summary)
+€ in millions
+Sales
+Other income
+2018
+2017
+688
+668
+140
+218
+-386
+-1,227
+Income/Loss from discontinued operations
+before income taxes
+442
+-341
+-156
+Other expense
+Provisions
+Liabilities
+Dec. 31,
+2018
+Liabilities associated with assets held for sale
+154
+-25
+Remeasurements of defined benefit plans
+-488
+-54
+-542
+317
+Notes
+(12) Other Information
+165
+Companies accounted for under the equity method
+-41
+Independent Auditor Fees
+During 2018 and 2017, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") GmbH, Wirtschafts-
+prüfungsgesellschaft, (domestic) and by companies in the inter-
+national PwC network were recorded as expenses:
+Fees and Services of the Independent Auditor
+On December 18, 2018, the Management Board and the Super-
+visory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+German Corporate Governance Code
+-25
+482
+Before
+income
+Currency translation adjustments
+2017
+After
+taxes
+taxes
+taxes
+Income
+taxes
+income
+taxes
+53
+-84
+-15
+198
+3
+201
+-63
+-63
+-125
+56
+-69
+38
+-84
+3,901
+Financial statement audits
+Fees for other services consist primarily of technical support
+in connection with the implementation of new requirements in
+the areas of IT and accounting issues.
+List of Shareholdings
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+presented on pages 216 through 229.
+(13) Earnings per Share
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+155
+Earnings per Share
+€ in millions
+2018
+2017
+Income/Loss from continuing operations
+3,238
+4,157
+Less: Non-controlling interests
+-263
+-256
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+2,975
+¹Figures do not include board members, managing directors, or apprentices.
+²Includes E.ON Business Services.
+Income/Loss from discontinued operations, net
+286
+23
+Less: Non-controlling interests
+The fees for tax consulting services mainly relate to services in
+the area of tax compliance.
+The fees for other auditing services include all attestation ser-
+vices that are not auditing services and are not used in connection
+with the audit. In 2018, these costs are for the legally required
+attestation services (e.g., as a result of the Renewable Energy Act
+(EEG), the Act on Combined Heat and Power Generation (KWKG))
+and the other half of the costs will be for other voluntary attes-
+tation services (primarily in connection with new IT systems).
+The auditor's fees relate to the audit of the Consolidated Financial
+Statements and the legally mandated financial statements of
+E.ON SE and its affiliates. They also include fees for auditing
+reviews of the IFRS interim financial statements and other tests
+directly required by the audit.
+18
+Domestic
+Other attestation services
+Domestic
+Tax advisory services
+Domestic
+Other services
+Domestic
+Total
+Domestic
+225
+2017
+2018
+20
+€ in millions
+19
+14
+4
+3
+1
+3 2
+1
+1
+1
+1
+24
+18
+100
+25
+15
+42,657
+the 60-day average price of the E.ON share and the total divi-
+dends paid to a shareholder starting from 2017 will be multiplied
+by a correction factor at the end of the term.
+1,942
+222
+150
+Notes
+150
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+Tax Loss Carryforwards
+-72
+December 31,
+2017
+2018
+Domestic tax loss carryforwards
+Foreign tax loss carryforwards
+Total
+2,614
+4,113
+5,466
+8,080
+€ in millions
+-685
+-62
+-623
+In 2015 and 2016, virtual shares from the third and fourth tranche
+were granted in the context of base matching and performance
+matching exclusively to members of the Management Board of
+E.ON SE. Executives were granted a multi-year bonus, the terms
+of which are described further below, instead of the base and
+performance matching.
+The equity deferral is determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral is converted into virtual
+shares and vests immediately. In the United States, virtual shares
+were granted in the amount of the equity deferral for the first
+time in 2015. Beneficiaries were additionally granted virtual
+shares in the context of base matching and performance match-
+ing. For members of the Management Board of E.ON SE, the
+proportion of base matching to the equity deferral was deter-
+mined at the discretion of the Supervisory Board; for all other
+beneficiaries it was 2:1. The performance-matching target
+value at allocation was equal to that for base matching in terms
+of amount. Performance matching will result in a payout only
+on achievement of a minimum performance as specified at
+the beginning of the term by the Management Board and the
+Supervisory Board.
+From 2013 to 2016, E.ON granted virtual shares to members of
+the Management Board of E.ON SE and certain executives of
+the E.ON Group under the E.ON Share Matching Plan. At the
+end of its four-year term, each virtual share is entitled to a cash
+payout linked to the final E.ON share price established at that
+time. The calculation inputs for this long-term variable compen-
+sation package are equity deferral, base matching and perfor-
+mance matching.
+E.ON Share Matching Plan
+The following discussion includes reports on the E.ON Share
+Matching Plan introduced in 2013, on the multi-year bonus
+granted in 2015 and 2016 and on the E.ON Performance Plan
+introduced in 2017.
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation. The
+purpose of such compensation is to reward their contribution
+to E.ON's growth and to further the long-term success of the
+Company. This variable compensation component, comprising
+a long-term incentive effect along with a certain element of
+risk, provides for a sensible linking of the interests of shareholders
+and management.
+Long-Term Variable Compensation
+From fiscal years 2003 to 2017, employees in the United King-
+dom had the opportunity to purchase E.ON shares through an
+employee stock purchase program and to acquire additional bonus
+shares. The program was suspended in 2018. The expense of
+issuing these matching shares amounted to €0.5 million in 2017.
+151
+7
+-34
+-437
+-2
+-439
+Total
+5,141
+9,254
+Since January 1, 2004, domestic tax loss carryforwards can only
+be offset against a maximum of 60 percent of taxable income,
+subject to a full offset against the first €1 million. This minimum
+corporate taxation also applies to trade tax loss carryforwards.
+The domestic tax loss carryforwards result from adding corpo-
+rate tax loss carryforwards amounting to €495 million (2017:
+€1,323 million) and trade tax loss carryforwards amounting to
+€2,119 million (2017: €2,790 million).
+The foreign tax loss carryforwards consist of corporate tax loss
+carryforwards amounting to €5,064 million (2017: €4,791 million)
+and tax loss carryforwards from local income taxes amounting
+to €402 million (2017: €350 million).
+Of the foreign tax loss carryforwards, a significant portion
+relates to previous years.
+Total
+2,460
+301
+296
+3,033
+reorganization program from the prior year. In addition, an
+adjustment to the pension commitments in the United Kingdom
+resulted in negative past service cost.
+Share-Based Payment
+The expenses for share-based payment in 2018 (the E.ON Share
+Matching Plan, the multi-year bonus and the E.ON Performance
+Plan) amounted to €21.9 million (2017: €53.1 million).
+Employee Stock Purchase Program
+The voluntary employee stock purchase program, which through
+2015 provided employees of German Group companies the
+opportunity to purchase E.ON shares at preferential terms, was
+again suspended in 2018, as it had been in 2016 and 2017.
+Personnel costs of €2,460 million were €573 million lower
+than the prior-year figure of €3,033 million, mainly because of
+lower expenses from the Group's new strategic direction and
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+-38
+53
+In 2017 virtual shares were granted for the last time under the
+E.ON Share Matching Plan, only to members of the Management
+Board of E.ON SE and only to the extent of the "equity deferral."
+The total of these allocations is shown below as the fifth tranche
+of the E.ON Share Matching Plan. Additional information can be
+found on pages 87 and 88 of the compensation report.
+58
+325
+Deferred taxes were not recognized, or no longer recognized,
+on a total of €4,006 million (2017: €3,568 million) in tax loss
+carryforwards that for the most part do not expire. Deferred
+tax assets were not recognized, or no longer recognized, on
+non-expiring domestic corporate tax loss carryforwards of
+€477 million (2017: €1,299 million) or on domestic trade tax
+loss carryforwards of €2,092 million (2017: €2,756 million).
+Deferred tax assets were not recognized, or are no longer recog-
+nized, in the amount of €9,831 million (2017: €9,980 million) for
+temporary differences which are recognized in income and equity.
+As of December 31, 2018, and December 31, 2017, E.ON
+reported deferred tax assets for companies that incurred losses
+in the current or the prior-year period that exceed the deferred
+tax liabilities by €21 million and €9 million, respectively. The
+basis for recognizing deferred tax assets is an estimate by man-
+agement of the extent to which it is probable that the respective
+companies will achieve taxable earnings in the future against
+which the as yet unused tax losses, tax credits and deductible
+temporary differences can be offset.
+(11) Personnel-Related Information
+Personnel Costs
+The following table provides details of personnel costs for the
+periods indicated:
+Personnel Costs
+€ in millions
+2018
+2017
+Wages and salaries
+2,086
+2,407
+Social security contributions
+316
+Pension costs and other employee benefits
+Pension costs
+42,949
+Under the plan's original structure, the amount paid out under
+performance matching was to be equal to the target value
+at issuance if the E.ON share price was maintained at the end
+of the term and if the average ROACE performance matched
+a target value specified by the Management Board and the Super-
+visory Board. If the average ROACE during the four-year term
+exceeded the target value, the number of virtual shares granted
+under performance matching increased up to a maximum of
+twice the target value. If the average ROACE had fallen short
+of the target value, the number of virtual shares, and thus also
+the amount paid out, were to decrease.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, all virtual shares-except for those that
+resulted from the equity deferral-expire.
+Headcount
+Employees¹
+The breakdown by segment is shown in the following table:
+During 2018, E.ON employed an average of 42,949 persons
+(2017: 42,657), not including an average of 816 apprentices
+(2017:876).
+Employees
+The provision for the first and second tranche of the E.ON
+Performance Plan as of the balance sheet date is €16.2 million
+(2017: €6.5 million). The expense for the first and second
+tranches amounted to €9.8 million in the 2018 fiscal year
+(2017: €6.6 million).
+Energy Networks
+4 years
+€5.84
+2nd tranche
+Jan. 1, 2018
+4 years
+€6.41
+Target value at issuance
+Date of issuance
+Term
+E.ON Performance Plan Virtual Shares
+The following are the base parameters of the tranches of the
+E.ON Performance Plan active in 2018:
+If the employment relationship ends before maturity due to death
+or permanent invalidity, the virtual shares are settled before
+maturity, whereby in this case the average TSR performance of
+the fiscal years that have already completely ended is used to
+calculate the payment amount. The same shall apply in the case
+of a change in control related to E.ON SE and also if the allocating
+company leaves the E.ON Group before maturity.
+1st tranche
+Jan. 1, 2017
+2018
+2017
+17,519
+1,891
+Non-core business (Preussen Elektra)
+Total employees, E.ON Group
+40,715
+41,058
+Employees, core business
+2,829
+2,456
+Corporate Functions & Other²
+1,142
+1,332
+Renewables
+19,408
+19,751
+Customer Solutions
+17,336
+The virtual shares are canceled if the employment relationship
+of the beneficiary ends before the end of the term for reasons
+within the control of the beneficiary. This shall apply in particular
+in the event of termination by the beneficiary and in the event
+of extraordinary termination for good cause by the Company.
+If the employment relationship of the beneficiary is terminated
+before retirement, through the end of a limited term or for oper-
+ational reasons before the end of the term, the virtual shares do
+not expire but are settled at maturity.
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the agreed target.
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON's TSR performance in a
+given year determines the final number of one fourth of the vir-
+tual shares granted at the beginning of the vesting period. For
+this purpose, the TSRS of all companies are ranked, and E.ON's
+relative position is determined based on the percentile reached.
+If target attainment in a year is below the threshold defined by
+the Supervisory Board upon allocation, the number of virtual
+shares is reduced by one fourth. If E.ON's performance is at
+the upper cap or above, the fourth of the virtual shares allocated
+for the year in question will increase, but to a maximum of
+150 percent. Linear interpolation is used to translate interme-
+diate figures into percentage.
+The TSR is the return on E.ON stock, which takes into account
+the stock price plus the assumption of reinvested dividends,
+adjusted for changes in capital. The peer group used for relative
+TSR will be the other companies in E.ON's peer index, the
+STOXX® Europe 600 Utilities.
+4 years
+4 years
+€8.63
+3rd tranche
+Apr. 1, 2015
+4th tranche
+Apr. 1, 2016
+5th tranche
+Apr. 1, 2017
+4 years
+€7.17
+Target value at issuance
+Term
+Date of issuance
+E.ON Share Matching Virtual Shares
+The following are the base parameters of the tranches of the
+share matching plan active in 2018:
+The plan also contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements. To offset the
+change in value resulting from the spinoff of Uniper SE, both
+At the end of the term, the sum of the dividends paid to the ordi-
+nary shareholders during the term is added to each virtual share.
+The maximum amount to be paid out to a plan participant is
+limited to twice the sum of the equity deferral, base matching
+and the target value under performance matching.
+152
+Notes
+€13.63
+In 2016, the plan was changed to the effect that for periods from
+2016 onwards, ROCE was used instead of ROACE for measuring
+performance. Accordingly, new targets were defined for 2016
+and/or subsequent years. At the same time, the previous ROACE
+target achievement for the previous years will be included in
+the total performance of the respective tranches on a pro-rata
+basis. In the event of a defined underperformance, there is no
+payout under performance matching.
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual shares.
+In addition, the change in ROCE is simulated for performance
+matching. The provision for the third, fourth and fifth tranches
+of the E.ON Share Matching Plan as of the balance sheet date
+is €14.1 million (2017: €48.0 million). The income for the third,
+fourth and fifth tranches amounted to €0.7 million in the 2018
+fiscal year (2017: expense of €22.1 million).
+In 2015 and 2016, E.ON extended to those executives who in
+previous years had been granted virtual shares in the context of
+base matching and performance matching a multi-year bonus
+extending over a term of four years. Beneficiaries were informed
+individually of the target value of the multi-year bonus.
+The beneficiary will receive virtual shares in the amount of the
+agreed target. The conversion into virtual shares will be based on
+the fair market value on the date when the shares are granted.
+The fair market value will be determined by applying methods
+accepted in financial mathematics, taking into account the
+expected future payout and consequently the volatility and risk
+associated with the EPP. The number of virtual shares allocated
+may change during the four-year vesting period, depending on
+the total shareholder return ("TSR") of E.ON stock compared
+with the TSR of the companies in a peer group ("relative TSR").
+153
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In 2017 and 2018, E.ON granted the members of the Manage-
+ment Board of E.ON SE and certain executives of the E.ON
+Group virtual shares for the first time under the E.ON Share
+Performance Plan. The vesting period of each tranche is four
+years. Vesting periods start on January 1 of each year.
+The provision for the multi-year bonus as of the balance sheet
+date is €47.3 million (2017: €36.4 million). The expense amounted
+to €12.8 million in the 2018 fiscal year (2017: €23.9 million).
+E.ON Performance Plan (EPP)
+The plan contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+60-day average prices are used to determine both the share
+price after the spinoff and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+grounds or expires during the term. A payout before the end
+of the term will take place in the event of a change of control
+or on the death of the beneficiary. If the service or employment
+relationship ends before the end of the term for reasons within
+the control of the beneficiary, there is no entitlement to a multi-
+year bonus payout.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+For executives in the E.ON Group, the amount paid out is equal
+to the target value if the E.ON share price at the end of the term
+is equal to the E.ON share price after the spinoff of Uniper. If
+the share price at the end of the term is higher or lower than the
+share price after the spinoff, the amount paid out relative to
+the target value will increase or decrease in equal proportion to
+the change in the share price, but in no event shall the payout
+be higher than twice the target value.
+Multi-Year Bonus
+1
+1,236
+248
+-31,666
+187
+4,025
+-1,452
+391
+5
+1,879
+-49
+-28,526
+18,057
+Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment
+158
+Acquisition and production costs
+33
+239
+14,373
+-26,118
+-596
+-42
+203
+-20
+-15
+33
+-658
+2
+19
+-81
+120
+2
+-73
+9
+29
+24
+-31
+Changes in
+-1,297
+Exchange
+rate
+€ in millions
+Contract-based intangible assets
+1,835
+-81
+62
+-34
+28
+591
+1,809
+626
+-5
+44
+-86
+15
+594
+Technology-based intangible assets
+-6
+597
+2
+Goodwill
+Jan. 1, 2017
+differences
+tion
+Additions
+Disposals
+Transfers
+Dec. 31,
+2017
+5,289
+-94
+-24
+0
+5,171
+Marketing-related intangible assets
+Customer-related intangible assets
+2
+scope of
+consolida-
+3,830
+169
+-29,021
+-30
+-184
+212
+-1,849
+3
+567
+-1
+-186
+-2
+-62
+3
+-1,447
+1,339
+-2
+79
+30
+-73
+1
+-2
+3
+-302
+934
+-485
+3
+17
+-48
+2
+-1
+-4
+-516
+97
+-114
+3
+-2
+2
+1
+-1
+3
+1
+-1
+10
+-59
+480
+-1,842
+13
+166
+-73
+29
+-1
+-3
+-1,711
+1,086
+-72
+Internally generated intangible assets
+2,162
+-66
+453
+-53
+-2
+57
+2
+1
+-5
+0
+370
+-1,904
+-1
+626
+-186
+81
+-1
+-1,448
+217
+-5
+55
+Renew-
+ables
+Preussen
+Elektra
+Genera-
+tion
+Turkey
+Func-
+tions/
+E.ON
+Other
+Other¹
+Net carrying amount of
+goodwill as of
+January 1, 2017
+613
+100
+60
+Group
+UK
+Sales
+ECE/ Germany
+Turkey
+-735
+-1,150
+3,065
+-1,505
+-50
+56,432
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2017
+Energy Networks
+Customer Solutions
+Non-Core Business
+Corpo-
+rate
+€ in millions
+Germany
+Sweden
+183
+875
+103
+1,350
+goodwill as of
+December 31, 2017
+589
+97
+56
+183
+845
+102
+1,286
+179
+3,337
+Growth rate (in %)3,4
+n.a.
+1.5
+n.a.
+Net carrying amount of
+56,807
+-120
+0
+0
+0
+179
+3,463
+Changes resulting from
+acquisitions and disposals
+Impairment charges
+-6
+Other changes²
+-24
+-3
+2
+-30
+-1
+-64
+-6
+-33
+Property, plant and equipment
+-761
+401
+-18
+-2
+160
+-18
+-155
+Advance payments on intangible assets
+368
+4,117
+-128
+-3
+1,033
+-879
+7
+Intangible assets
+455
+1
+-684
+-57
+118
+328
+Intangible assets subject to amortization
+3,277
+-97
+-1
+161
+-177
+161
+3,324
+Intangible assets not subject to amortization
+439
+-13
+712
+4,147
+Real estate and leasehold rights
+614
+-5
+49,158
+Other equipment, fixtures, furniture and office equipment
+1,017
+3
+-10
+87
+-156
+10
+951
+Advance payments and construction in progress
+2,115
+-58
+-9
+1,407
+-20
+697
+2,674
+-1,208
+-1,081
+-12
+2
+-14
+4
+589
+Buildings
+3,169
+6
+-38
+30
+-107
+3,060
+Technical equipment, plant and machinery
+49,892
+-681
+1,539
+549
+-8
+-811
+-8
+-739
+103
+-82
+182
+2,786
+3,330
+455
+-3
+735
+-734
+6
+454
+Advance payments on intangible assets
+-5
+Intangible assets subject to amortization
+Intangible assets not subject to amortization
+396
+92
+Other non-current assets5
+4.6
+8.0
+-5
+-33
+33
+-4
+28
+613
+Internally generated intangible assets
+328
+-5
+-4
+15
+-30
+368
+2
+-112
+278
+Buildings
+3,060
+-20
+-270
+28
+-41
+40
+2,797
+Technical equipment, plant and machinery
+49,144
+-328
+-10,845
+1,181
+-298
+1,637
+539
+Impairment
+-2
+3
+-5
+-161
+370
+Intangible assets
+4,153
+-11
+-854
+1,116
+-821
+27
+3,610
+Real estate and leasehold rights
+589
+-7
+-13
+-31
+40,491
+-10
+-13
+7
+1.84
+2,167
+2,129
+Notes
+Goodwill, Intangible Assets and Property, Plant and Equipment¹
+156
+1.49
+Acquisition and production costs
+Exchange
+rate
+€ in millions
+Jan. 1, 2018
+differences
+scope of
+consolida-
+tion
+Dec. 31,
+Changes in
+0.01
+0.12
+1.83
+24
+Net income/loss attributable to shareholders of E.ON SE
+3,223
+3,925
+in €
+Earnings per share (attributable to shareholders of E.ON SE)
+from continuing operations
+from discontinued operations
+from net income/loss
+Weighted-average number of shares outstanding (in millions)
+The computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued no
+potentially dilutive ordinary shares.
+(14) Goodwill, Intangible Assets and
+Property, Plant and Equipment
+The changes in goodwill and intangible assets, and in property,
+plant and equipment, are presented in the tables on the
+following pages:
+1.37
+Additions
+Disposals
+Transfers
+2018
+-1
+62
+2018
+After
+income
+Technology-based intangible assets
+594
+³Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+"Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the regulatory period for gas in 2018 and the upcoming regulatory period for electricity in 2019.
+5Other non-current assets consist of intangible assets and of property, plant and equipment.
+²Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+¹Recognized goodwill expected to be eliminated from the scope of consolidation soon.
+17
+-952
+-9
+-751
+10
+-6
+-161
+-2
+55
+Reversals
+-702
+1,815
+Goodwill
+5,171
+-2
+-1,322
+0
+3,847
+Marketing-related intangible assets
+Customer-related intangible assets
+2
+-1
+1
+591
+-4
+-47
+540
+Contract-based intangible assets
+7
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+Other equipment, fixtures, furniture and office equipment
+-4
+4
+21
+9
+23
+115
+36
+¹Recognized goodwill expected to be eliminated from the scope of consolidation soon.
+23
+²Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+³Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+"Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the start of the third regulatory period for gas in 2018 and the upcoming regulatory period for electricity in 2019.
+5Other non-current assets consist of intangible assets and of property, plant and equipment.
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+157
+CEO Letter
+Reversals
+38
+27
+152
+838
+131
+19
+179
+2,054
+Growth rate (in %)3,4
+n.a.
+Cost of capital (in %) 3,4
+n.a.
+1.25
+7.6
+Other non-current assets5
+Impairment
+5
+1
+Accumulated depreciation
+Net carrying
+amounts
+Changes in
+Exchange
+0
+0
+-1,793
+2,054
+-1
+0
+-2
+1
+-437
+4
+-32
+47
+-26
+-444
+96
+0
+56
+39
+-1,834
+scope of
+rate
+consolida-
+Dec. 31,
+Dec. 31,
+Jan. 1, 2018
+differences
+tion
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+2018
+2018
+2
+951
+90
+December 31, 2018
+46,583
+¹The first-time application of IFRS 15 in 2018 resulted in adjustments to the initial inventories (see Note 2).
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment
+from January 1, 2018
+Energy Networks
+Customer Solutions
+Non-Core Business
+0
+Corpo-
+€ in millions
+Germany
+Sweden
+ECE/ Germany
+Turkey
+Sales
+UK
+rate
+-612
+2,578
+-11,438
+-33
+87
+-176
+10
+Advance payments and construction in progress
+2,674
+-4
+-277
+1,279
+-66
+-1,685
+835
+1,921
+Property, plant and equipment
+56,418
+-363
+Other
+Renew-
+ables
+Preussen
+Elektra
+Genera-
+tion
+Turkey
+Changes resulting from
+acquisitions and disposals
+-2
+Impairment charges
+Other changes²
+-5
+-31
+-7
+29
+-1,267
+-2
+0
+-1,281
+Net carrying amount of
+goodwill as of
+3,337
+589
+179
+0
+Func-
+tions/
+E.ON
+Other¹
+Group
+Net carrying amount of
+goodwill as of
+January 1, 2018
+589
+97
+56
+183
+845
+102
+1,286
+0
+Income
+n.a.
+Securities
+149
+December 31, 2018
+December 31, 2017
+Tax assets
+Tax liabilities
+Tax assets
+Tax liabilities
+89
+365
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+179
+115
+1,579
+206
+2,036
+174
+110
+162
+185
+14
+393
+Combined Group Management Report
+E.ON Stock
+Strategy and Objectives
+Report of the Supervisory Board
+income
+taxes
+Cost of capital (in %) 3,4
+Deferred tax assets and liabilities as of December 31, 2018, and
+December 31, 2017, break down as shown in the following table:
+Deferred Tax Assets and Liabilities
+€ in millions
+Intangible assets
+Property, plant and equipment
+Financial assets
+Inventories
+Receivables
+Provisions
+Liabilities
+Loss carryforwards
+Tax credits
+Other
+Subtotal
+Changes in value
+Deferred taxes (gross)
+Netting
+Deferred taxes (net)
+CEO Letter
+9
+241
+Current
+362
+3,683
+4,392
+-2,190
+-2,190
+-2,776
+-2,776
+1,195
+1,706
+907
+3,896
+563
+272
+178
+Of the deferred taxes reported, a total of -€564 million was
+charged directly to equity in 2018 (2017: -€595 million charge).
+A further €49 million in current taxes (2017: €49 million)
+was also recognized directly in equity. Currency translation
+differences with an impact on income tax within this item were
+reclassified to other comprehensive income.
+Income taxes recognized in other comprehensive income for the
+years 2018 and 2017 break down as follows:
+Income Taxes on Components of Other Comprehensive Income
+Before
+€ in millions
+921
+Cash flow hedges
+227
+3,385
+1,616
+-2,716
+764
+2,605
+-2,682
+78
+2,572
+119
+1,298
+1,368
+646
+1,068
+1,020
+528
+17
+16
+480
+315
+471
+249
+6,101
+3,896
+4,392
+6,365
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+In 2018, impairment charges on companies accounted for under
+the equity method amounted to €7 million (2017: €8 million).
+Impairments on other financial assets amounted to €30 million
+(2017: €63 million). The carrying amount of other financial
+assets with impairment losses was €16 million as of the end of
+the fiscal year (2017: €133 million).
+Shares in Companies Accounted for under the
+Equity Method
+The following table summarizes significant line items of the aggre-
+gated statements of comprehensive income of the associates and
+joint ventures that are accounted for under the equity method:
+€ in millions
+Investment income generated from companies accounted for
+under the equity method amounted to €235 million in 2018
+(2017: €277 million). The prior-year figure includes the Uniper SE
+dividend and the shareholdings of the Renewables segment.
+Associates
+Summarized Financial Information for Individually Non-Material Associates and Joint Ventures Accounted for
+under the Equity Method
+Companies accounted for under the equity method consist
+solely of associates and joint ventures. The decline in joint ven-
+tures is primarily due to the ongoing measurement of the Turkish
+activities and the reclassification of AWE-Arkona-Windpark
+Entwicklungs-GmbH as assets held for sale.
+The carrying amounts of the immaterial associates accounted
+for under the equity method totaled €363 million (2017:
+€458 million), and those of the joint ventures totaled €102 million
+(2017: €637 million). The significant decline in the carrying
+amounts resulted from the reclassification of the investments
+of the Renewables segment to assets held for sale.
+¹The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+Non-current securities
+1,725
+7,088
+1,202
+1,671
+2,749
+2,240
+5,507
+Total
+5
+256
+2018
+792
+2,083
+2017
+23
+Joint ventures
+2017
+20
+Report of the Supervisory Board
+CEO Letter
+89
+109
+41
+66
+68
+Proportional share of total comprehensive income
+-44
+-5
+-33
+-5
+-11
+Proportional share of other comprehensive income
+133
+114
+56
+46
+77
+68
+Proportional share of net income from continuing operations
+2017
+2018
+Total
+2018
+Joint
+ventures¹
+2,078
+185
+3,547
+Due within 1 year
+Nominal value of outstanding lease
+installments
+2017
+2018
+€ in millions
+E.ON as Lessor―Operating Leases
+E.ON also functions in the capacity of lessor. Contingent lease pay-
+ments received totaled €19 million in 2018 (2017: €13 million).
+Future lease installments receivable under operating leases are
+due as shown in the table at right:
+Regarding future obligations under operating leases where
+economic ownership is not transferred to E.ON as the lessee,
+see Note 27.
+The present value of the minimum lease obligations is reported
+under liabilities from leases.
+357
+327
+147
+140
+504
+467
+E.ON Stock
+197
+61
+58
+246
+255
+135
+98
+67
+62
+Due in 1 to 5 years
+1,469
+Due in more than 5 years
+Total
+20
+1,182
+1,421
+250
+664
+Equity investments
+2,603
+Companies accounted for under the equity method
+Associates¹
+E.ON Group
+December 31, 2017
+December 31, 2018
+Joint
+ventures¹
+Associates¹
+E.ON Group
+€ in millions
+164
+Companies Accounted for under the Equity Method and Other Financial Assets
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+(15) Companies Accounted for under the Equity
+Method and Other Financial Assets
+Notes
+See Note 17 for information on receivables from finance leases.
+104
+142
+39
+22
+45
+81
+39
+Strategy and Objectives
+883
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+81
+80
+10
+10
+-10
+Consolidation adjustments
+39
+50
+267
+282
+421
+447
+2,964
+Proportional share of equity
+49.00
+49.00
+36.85
+36.85
+15.50
+15.50
+46.65
+Ownership interest (in %)
+67
+70
+627
+190
+Non controlling interests
+193
+0
+Uniper Group
+Equity-method earnings
+Consolidation adjustments
+Proportional share of net income after taxes
+income after taxes
+Proportional share of total comprehensive
+Ownership interest (in %)
+Total comprehensive income
+Other comprehensive income
+Dividend paid out
+Net income from discontinued operations
+loss from continuing operations
+Non-controlling interests in the net income/
+Net income/loss from continuing operations
+Sales
+€ in millions
+Material Associates-Earnings Data
+¹Uniper value as of September 30, 2017. Since end of September 2017, Uniper has been recognized as an investment held for sale and is no longer valued under the equity method.
+2Undisclosed accruals/provisions from acquisitions are recognized in assets.
+232
+240
+348
+362
+431
+457
+2,954
+Carrying amount of equity investment
+Combined Group Management Report
+79
+792
+1,761
+1,845
+6,100
+5,775
+18,767
+2017
+2018
+2017
+2018
+2017
+2018
+20171
+2018
+Current assets
+Non-current assets²
+€ in millions
+Západoslovenská
+energetika a.s.
+Gasag Berliner
+Gaswerke AG
+Nord Stream AG
+Uniper Group
+Material Associates-Balance Sheet Data as of December 31
+The Group adjustments shown in the table mainly relate to
+goodwill determined as part of initial recognition, temporary
+differences and effects from the elimination of intragroup profits.
+of accounting only accrued in the first nine months of fiscal
+year 2017. The tables below present a reconciliation to the pro
+rata equity result or the carrying amount of the investment
+in Uniper SE on the basis of the data published by Uniper as
+of September 30, 2017.
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of comprehen-
+sive income of the material companies accounted for under the
+equity method. The material associates in the E.ON Group are
+Nord Stream AG, Gasag Berliner Gaswerke AG, Západoslovenská
+energetika a.s. and, until the end of September 2017, Uniper SE.
+Since the end of September 2017, Uniper SE has been reported
+as an investment held for sale and no longer as a company
+accounted for at equity, so that income from the equity method
+165
+887
+102
+837
+801
+836
+2,717
+2,884
+6,981
+Equity
+452
+793
+913
+202
+3,705
+3,300
+13,744
+520
+233
+305
+351
+374
+392
+16,395
+Current liabilities (including provisions)
+Non-current liabilities (including provisions)
+214
+241
+249
+225
+696
+18,353
+160
+In addition, write-downs on property, plant and equipment in
+the amount of €49 million (2017: €796 million) were made
+in the year under review. Reversals of impairments on property,
+plant and equipment in the amount of €33 million (2017:
+€14 million) were recognized in the reporting year.
+32
+-53
+3
+-7
+2
+7
+-58
+-2
+453
+-2
+1,475
+-1,849
+-149
+-7
+152
+-174
+56
+-1,728
+214
+-114
+-29
+44
+-53
+2
+-78
+109
+315
+-485
+-1,788
+1
+-28,811
+1,218
+-1,842
+-11
+39
+99
+-76
+28
+-2
+-1,919
+517
+-72
+-6
+2
+-2
+1
+1
+-68
+2,243
+-1,904
+3
+-156
+-7
+154
+-174
+63
+256
+-1
+74
+2017
+Reversals
+Impairment
+Transfers
+Disposals
+Additions
+tion
+differences
+Jan. 1, 2017
+Dec. 31,
+Dec. 31,
+consolida-
+rate
+scope of
+Exchange
+Changes in
+Net carrying
+amounts
+Accumulated depreciation
+159
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+2017
+-12
+-1,826
+0
+-48
+4
+-502
+998
+-811
+-115
+5
+34
+-41
+46
+-741
+154
+-437
+-4
+-32
+4
+-405
+-2
+0
+-2
+3,337
+-1,834
+0
+-6
+0
+-2
+800
+-1,477
+955
+271
+297
+24
+22
+4
+3
+December 31,
+2017
+2018
+Net carrying amount of capitalized lease assets
+Other equipment, fixtures, furniture and office equipment
+Technical equipment, plant and machinery
+Buildings
+Land
+€ in millions
+E.ON as Lessee-Carrying Amounts of Capitalized Lease Assets
+The property, plant and equipment capitalized in the framework
+of finance leases had the following carrying amounts as of
+December 31, 2018:
+Nord Stream AG
+Depreciation amounted to €1,452 million in 2018 (2017:
+€1,638 million).
+Borrowing costs in the amount of €12 million were capitalized
+in 2018 (2017: €43 million) as part of the historical cost of
+property, plant and equipment.
+Most of the change relates to the reclassification of discontinued
+operations in the Renewables segment in accordance with IFRS 5.
+Property, Plant and Equipment
+€2 million in research and development costs as defined by
+IAS 38 were expensed in 2018 (2017: €5 million).
+Intangible assets include emission rights and Green Certificates
+from different trading systems with a carrying amount of
+€137 million (2017: €146 million).
+Reversals of impairments on intangible assets in the amount
+of €3 million (2017: €3 million) were recognized in the reporting
+year.
+In 2018, the Company recorded an amortization expense of
+€186 million (2017: €174 million). Impairment charges on
+intangible assets amounted to €66 million (2017: €156 million).
+55
+Most of the change relates to the reclassification of discontinued
+operations in the Renewables segment in accordance with IFRS 5.
+322
+Some of the leases contain price-adjustment clauses, as well
+as extension and purchase options. The corresponding payment
+obligations under finance leases are due as shown below:
+19
+20
+56
+52
+Present values
+2017
+2018
+2017
+2018
+2017
+2018
+Covered interest share
+Minimum lease payments
+163
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+E.ON Stock
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+Total
+Due in more than 5 years
+years
+Due in 1 to 5
+Due within 1 year
+€ in millions
+E.ON as Lessee-Payment Obligations under Finance Leases
+354
+Intangible Assets
+162
+Notes
+14
+-796
+31
+1,199
+-1,638
+837
+252
+-31,565
+2,601
+293
+20,137
+-29,021
+-658
+-73
+-24
+-2
+-47
+1
+-4
+143
+-83
+8
+-3
+-720
+13
+-751
+-6
+-31,666
+24,766
+Notes
+160
+Reversals of impairments on property, plant and equipment
+and intangible assets recognized in previous years amounted to
+€17 million in 2017, significantly influenced by developments
+in Hungary and in Renewables.
+These impairments of property, plant and equipment and of
+intangible assets at wind farms in the United States in the prior
+year
+relate to several individual assets with recoverable
+amounts totaling €1,186 million. The main reason for this was
+significantly lower price expectations, in particular because of
+the revised assessment of CO2 reduction efforts in the US.
+€156 million in 2017. Of this, around €123 million was attrib-
+utable to wind farms in the onshore wind/solar energy segment
+in Renewables.
+Impairments on intangible assets amounted to approximately
+In fiscal year 2017, a total of €796 million in impairments was
+charged to property, plant and equipment. Of this amount,
+€628 million was attributable to property, plant and equipment
+at Renewables. Of this amount, around €40 million related to
+the offshore sector. The impairment recognized in the onshore
+segment amounted to €589 million. Wind farms in the United
+States (€553 million) suffered the greatest impact. Property,
+plant and equipment in the Customer Solutions UK segment
+was written down by €133 million, mainly due to technological
+developments and the significant increase in capital costs.
+Reversals of impairments on property, plant and equipment
+and intangible assets recognized in previous years amounted to
+€36 million in 2018, significantly influenced by developments
+in Hungary.
+Impairments on intangible assets amounted to approximately
+€66 million in 2018. Developments in the retail customer busi-
+ness at ECT UK (around €26 million) and the impairment of
+capitalized IT costs at the holding company (around €16 million)
+had the greatest impact.
+In fiscal year 2018, a total of €49 million in impairments
+was charged to property, plant and equipment, primarily from
+€20 million in impairments in the UK.
+The goodwill of all cash-generating units whose respective
+goodwill as of the balance sheet date is material in relation to
+the total carrying amount of all goodwill shows a surplus of
+recoverable amounts over the respective carrying amounts and,
+therefore, based on current assessment of the economic situa-
+tion, only a significant change in the material valuation parameters
+would necessitate the recognition of goodwill impairment.
+161
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+37
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+The goodwill impairment testing performed in 2018 resulted
+in the recognition of no impairment charges. In 2017, there
+was an impairment charge of €6 million for the Energy Networks
+Romania cash-generating unit on the recoverable amount of
+€418 million (after-tax interest rate 5.68 percent).
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment, and of groups of these assets. If the goodwill of a
+cash-generating unit is combined with assets or groups of
+assets for impairment testing, the assets must be tested first.
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective forecasts
+for commodity market prices, future electricity and gas prices
+in the wholesale and retail markets, E.ON's investment activity,
+changes in the regulatory framework, as well as for rates of
+growth and the cost of capital. These assumptions are based on
+external market data from established providers and on internal
+estimates.
+correspond to the inflation rates in each of the currency areas
+where the cash-generating units are tested. In 2018, the inflation
+rate used for the euro area was 1.25 percent (2017: 1.5 percent).
+The interest rates used for discounting cash flows are calculated
+using market data for each cash-generating unit, and as of
+December 31, 2018, ranged between 3.5 and 8.7 percent after
+taxes (2017: 3.5 and 8.7 percent).
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for
+impairment-testing purposes are generally based on the three
+planning years of the medium-term plan plus two additional
+detailed planning years. In certain justified exceptional cases, a
+longer detailed planning period is used as the calculation basis.
+The cash flow assumptions extending beyond the detailed plan-
+ning period are determined using growth rates that generally
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units.
+Because there were no binding sales transactions or market
+prices for the respective cash-generating units in 2018, fair val-
+ues were calculated based on discounted cash flow methods.
+IFRS 3 prohibits the amortization of goodwill. Instead, goodwill
+is tested for impairment at least annually at the level of the
+cash-generating units. Goodwill must also be tested for impair-
+ment at the level of individual cash-generating units between
+these annual tests if events or changes in circumstances indicate
+that the recoverable amount of a particular cash-generating
+unit might be impaired. Intangible assets subject to amortization
+and property, plant and equipment must generally be tested
+for impairment whenever there are particular events or external
+circumstances indicating the possibility of impairment.
+Impairments
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 156 through 159.
+Goodwill and Non-Current Assets
+E.ON Stock
+Gasag Berliner
+Gaswerke AG
+91
+2018
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+Of investments in associates, the shareholding in Nord Stream AG
+(carrying amount in 2018: €457 million; 2017: €431 million)
+was restricted because it was pledged as collateral for financing
+as of the balance sheet date.
+were marketable, and a 20-percent shareholding in Enerjisa
+Enerji A.Ş. was listed on the stock exchange on February 8, 2018.
+As of December 31, 2018, the investment in Enerjisa Enerji A.Ş. is
+marketable. The pro rata market value amounted to €398 million
+as of December 31, 2018. At the end of 2017, no associates
+The material associates and the material joint ventures are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests
+as required by IFRS 12 for material joint arrangements and
+associates can be found in the list of shareholdings pursuant
+to Section 313 (2) HGB (see Note 35).
+-113
+-17
+108
+52
+-11
+5
+8
+Equity-method earnings
+Consolidation adjustments
+-102
+-17
+103
+44
+Proportional share of net income after taxes
+-196
+-260
+-116
+Strategy and Objectives
+-98
+Combined Group Management Report
+167
+December 31, 2018
+Receivables and Other Assets
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+(17) Receivables and Other Assets
+794
+684
+Total
+47
+62
+Work in progress and finished products
+130
+111
+Goods purchased for resale
+617
+511
+Raw materials and supplies
+2017
+2018
+€ in millions
+December 31,
+Inventories
+No inventories have been pledged as collateral.
+Write-downs totaled €9 million in 2018 (2017: €8 million).
+Reversals of write-downs amounted to €14 million in 2018
+(2017: €11 million).
+The following table provides a breakdown of inventories as of
+the dates indicated:
+(16) Inventories
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+December 31, 2017
+Proportional share of total comprehensive income after taxes
+50.00
+-33
+205
+111
+915
+875
+2,715
+3,029
+Interest income/expense
+Write-downs
+Net income/loss from continuing operations
+Sales
+2017
+2018
+2017
+2018
+€ in millions
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+736
+629
+705
+451
+59
+43
+11
+11
+-205
+50.00
+-55
+-108
+50.00
+40.00
+Ownership interest (in %)
+-393
+-519
+-233
+-244
+-188
+-486
+-438
+-355
+65
+Total comprehensive income
+Other comprehensive income
+Dividend paid out
+47
+65
+-65
+-95
+Income taxes
+-78
+-53
+-210
+-246
+-130
+-64
+677
+€ in millions
+Non-current
+69
+2017
+2018
+2017
+2018
+2017
+2018
+Due within 1 year
+€ in millions
+Present value of minimum
+lease payments
+Unrealized interest income
+Gross investment in finance
+lease arrangements
+E.ON as Lessor-Finance Leases
+Receivables from finance leases are primarily the result of cer-
+tain electricity delivery contracts that must be treated as leases
+according to IFRIC 4. The nominal and present values of the
+outstanding lease payments have the following due dates:
+10
+9
+2018
+165
+138
+¹New account due to IFRS 15 implementation, no prior-year figures.
+2018
+Balance as of December 31
+Balance as of January 1
+¹New account due to IFRS 15 implementation, no prior-year figures.
+Balance as of December 31
+69
+Amortization and impairment
+33
+36
+2018, amount to €0 million (prior year: €87 million).
+In addition, the E.ON Group's contingent assets as of December 31,
+The present value of the outstanding lease payments is reported
+under receivables from finance leases.
+329
+329
+164
+145
+493
+474
+160
+140
+28
+13
+188
+153
+133
+153
+103
+99
+236
+252
+Total
+Due in more than 5 years
+Due in 1 to 5 years
+36
+33
+Current
+€ in millions
+€ in millions
+452
+1,213
+324
+Other assets
+Contract assets
+3,879
+3,896
+Trade receivables
+452
+236
+427
+284
+Financial receivables and other financial assets
+160
+199
+136
+246
+Other financial receivables and financial assets
+292
+37
+291
+38
+Receivables from finance leases
+Non-current
+Current
+1,228
+Other Assets¹
+3
+Receivables from derivative financial instruments
+Contract Assets¹
+The following table shows the opening and closing balances of
+contractual assets under IFRS 15:
+Other assets under IFRS 15 changed as follows:
+As of December 31, 2018, other financial assets include receiv-
+ables from owners of non-controlling interests in jointly owned
+power plants of €53 million (2017: €50 million).
+168
+Notes
+In 2018, there were unguaranteed residual values of €8 million
+(2017: €9 million) due to E.ON as lessor under finance leases.
+Some of the leases contain price-adjustment clauses, as well
+as extension and purchase options.
+Receivables arising from IFRS 15 primarily consist of trade
+receivables.
+1,823
+6,017
+1,901
+5,729
+1,371
+5,781
+1,474
+5,445
+Total
+Trade receivables and other operating assets
+143
+1,450
+112
+1,199
+Other operating assets
+142
+23
+7
+586
+694
+440
+82
+-263
+51
+71
+8
+13
+265
+334
+201
+-54
+8
+7
+99
+0
+91
+92
+89
+2018
+2017
+2017
+52,938
+1,074
+1,076
+134
+1,198
+1,135
+1,065
+1,119
+434
+426
+35
+1,105
+2017
+4
+1
+1
+-2
+-10
+45
+45
+9
+10
+66
+67
+476
+45
+46
+18
+14
+87
+80
+370
+856
+516
+560
+39
+50
+93
+15
+46.65
+15.50
+15.50
+36.85
+36.85
+49.00
+49.00
+Západoslovenská
+energetika a.s.
+2018
+2018
+3
+38
+93
+1,314
+888
+1,732
+1,541
+180
+602
+1,063
+1,235
+194
+20171
+903
+1,056
+505
+3,076
+8
+433
+50.00
+50.00
+50.00
+40.00
+1,354
+1,171
+563
+1,387
+1,219
+879
+1,221
+1,015
+455
+337
+1,100
+2,233
+331
+2,820
+466
+65
+67
+10
+9
+45
+48
+¹Uniper value as of September 30, 2017. Since end of September 2017, Uniper has been recognized as an investment held for sale and is no longer valued under the equity method.
+Notes
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income state-
+ments of the joint ventures accounted for under the equity
+method, Enerjisa Enerji A.Ş. and Enerjisa Üretim Santralleri A.Ş.
+3,279
+€ in millions
+Non-current assets
+Current assets
+Current liabilities (including provisions)
+Material Joint Ventures-Balance Sheet Data as of December 31
+Cash and cash equivalents
+2017
+2018
+Non-current liabilities (including provisions)
+2018
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+166
+Material Joint Ventures-Earnings Data
+2017
+Consolidation adjustments
+Proportional share of equity
+Ownership interest (in %)
+Equity
+Non-current financial liabilities
+Current financial liabilities
+Carrying amount of equity investment
+2016
+2017
+2018
+December 31,
+The net actuarial gains shown in the table for the development
+of the present value of the defined benefit obligations are attrib-
+utable to an increase in the discount rate used in the UK and
+the inclusion of updated mortality tables in the calculation of the
+pension obligations reported for the UK. Actuarial losses resulting
+from the calculation of pension obligations in Germany on the
+basis of a lower discount rate and new mortality tables had a
+largely offsetting effect.
+Actuarial Assumptions
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at
+E.ON's German and U.K. subsidiaries as of the respective balance
+sheet date are as follows:
+44
+Discount rate
+Percentages
+Germany
+2018 G versions of the Heubeck biometric tables
+(2018)
+2.10
+Change in the pension increase rate by (basis points)
+-0.32
+0.33
+-0.24
+0.25
+-25
++25
+Change in percent
+-25
+Change in the wage and salary growth rate by (basis points)
+Change in percent
+8.69
+-7.77
+8.34
+-7.35
+-50
++50
++25
+Change in mortality by (percent)
+Change in percent
++25
+-25
+When considering sensitivities, it must be noted that the change
+in the present value of the defined benefit obligations resulting
+from changing multiple actuarial assumptions simultaneously
+is not necessarily equivalent to the cumulative effect of the
+individual sensitivities.
+assumptions is changed for the purpose of computing the sensi-
+tivity of results to changes in that assumption, all other actuarial
+assumptions are included in the computation unchanged.
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+A 10-percent decrease in mortality would result in a higher life
+expectancy of beneficiaries, depending on the age of each indi-
+vidual beneficiary. As of December 31, 2018, the life expectancy
+of a 63-year-old male E.ON retiree would increase by approxi-
+mately one year if mortality were to decrease by 10 percent.
+3.51
+-3.14
+3.54
+-10
++10
+-10
++10
+-3.16
+-1.85
+1.89
+-1.66
+1.72
+-25
++25
+-50
+2.00
++50
+December 31, 2017
+Germany¹
+Pension increase rate
+3.40
+3.40
+2.00
+United Kingdom
+2.50
+1.75
+2.50
+Germany
+Wage and salary growth rate
+2.90
+2.70
+2.90
+United Kingdom
+2.10
+2.50
+1.75
+1.75
+United Kingdom
+December 31, 2018
+Change in the present value of the defined benefit obligations
+Sensitivities
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of the
+defined benefit obligations:
+"S2" series base mortality tables with the CMI 2017
+projection model for future improvements
+United Kingdom
+Germany
+Actuarial Assumptions (Mortality Tables)
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+The discount rate assumptions used by E.ON reflect the
+currency-specific rates available at the end of the respective
+fiscal year for high-quality corporate bonds with a duration cor-
+responding to the average period to maturity of the respective
+obligation.
+178
+Notes
+guarantee adjustment.
+¹The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+3.20
+3.20
+3.20
+Change in the discount rate by (basis points)
+Change in percent
+CEO Letter
+10,180
+9,979
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+€ in millions
+2017
+Schleswig-Holstein
+Netz AG
+E.DIS AG¹
+Delgaz Grid S.A.
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data as of December 31
+flow items. The list of shareholdings pursuant to Section 313 (2)
+HGB (see Note 35) contains information on the registered office
+of the company and disclosures on equity interests.
+In compliance with IFRS 12, the following tables include sub-
+sidiaries with significant non-controlling interests and provide an
+overview of significant items on the aggregated balance sheet
+and on the aggregated income statement, and significant cash
+173
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Avacon AG¹
+Strategy and Objectives
+Non-controlling interests in equity
+371
+31
+86
+Dividends paid out to non-controlling interests
+48.1
+48.5
+38.5
+38.5
+33.0
+311
+33.0
+43.5
+Non-controlling interests in equity (in %)
+227
+241
+568
+557
+504
+517
+43.5
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Changes
+Balance as of January 1, 2017
+€ in millions
+Share of OCI Attributable to Non-Controlling Interests
+2,701
+2,760
+280
+284
+Balance as of December 31, 2017
+Corporate Functions/Other
+E.ON Group
+Non-Core Business
+580
+663
+72
+83
+1
+2
+UK
+Other
+Renewables
+1
+Changes
+Balance as of December 31, 2018
+Cash flow hedges
+-249
+-129
+-48
+-7
+1
+-201
+-122
+-1
+61
+-25
+-10
+-8
+-262
+-97
+9
+8
+Remeasurements of
+defined benefit plans
+Currency translation
+adjustments
+Securities
+33
+33
+58
+74
+26
+non-controlling interests
+Share of earnings attributable to
+2017
+2018
+Netz AG
+Avacon AG1
+2017
+2018
+34
+2017
+2017
+2018
+€ in millions
+E.DIS AG1
+Delgaz Grid S.A.
+Schleswig-Holstein
+Subsidiaries with Material Non-Controlling Interests—Earnings Data
+Holding Company without operational business.
+2018
+47
+56
+24
+238
+87
+158
+134
+85
+61
+Net income/loss
+2,540
+912
+12
+12
+1
+2
+398
+390
+Sales
+6
+33
+82
+683
+90
+722
+257
+1,414
+1,460
+1,652
+1,621
+1,505
+1,483
+986
+1,053
+Current assets
+Non-current assets
+228
+-68
+-97
+12
+-42
+121
+104
+Operating cash flow
+167
+103
+118
+192
+191
+64
+111
+125
+Current liabilities
+470
+464
+107
+75
+12
+9
+236
+411
+Non-current liabilities
+326
+329
+314
+236
+268
+294
+-1
+Germany
+163
+Reporting entity
+Voting rights
+171
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+E.ON Stock
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+Date of notice
+Information on Stockholders of E.ON SE
+Voting Rights
+The Conditional Capital 2017 was not used.
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise
+by holders of option or conversion rights, and those arising from
+compliance with the mandatory conversion of bonds with con-
+version or option rights, profit participation rights or profit par-
+ticipating bonds that have been issued or guaranteed by E.ON SE
+or a Group company of E.ON SE as defined by Section 18 AktG
+under the authorization approved by the Annual Shareholders
+meeting of May 10, 2017, under agenda item 9, and to the
+extent that no cash settlement has been granted in lieu of con-
+version or exercise of an option.
+The conditional capital increase will be used to grant registered
+no-par value shares to the holders of convertible bonds or bonds
+with warrants, profit participation rights or income bonds (or
+combinations of these instruments), in each case with option
+rights, conversion rights, option obligations and/or conversion
+obligations, which are issued by the Company or a group com-
+pany of the Company as defined by Section 18 of the German
+Stock Corporation Act (AktG), under the authorization approved
+by the Annual Shareholders Meeting on May 10, 2017, under
+agenda item 9, through May 9, 2022. The new shares will be
+issued at the conversion or option price to be determined in
+accordance with the authorization resolution.
+At the Annual Shareholders Meeting of May 10, 2017, share-
+holders approved a conditional increase of the capital stock (with
+the option to exclude shareholders' subscription rights) in the
+amount of up to €175 million.
+of the capital increase and its entry in the commercial register
+of E.ON SE. With the approval of the Supervisory Board, the
+Management Board has made use of the option granted to it by
+the Annual Shareholders Meeting to exclude subscription rights
+in the case of capital increases against contributions in kind.
+Conditional Capital
+Only RWE Downstream Beteiligungs GmbH, with its registered
+office in Essen and registered in the commercial register of
+Essen District Court under number HRB 26911, was permitted
+to subscribe for and acquire the new shares. RWE Downstream
+Beteiligungs GmbH is a wholly-owned subsidiary of RWE AG.
+The object of the contribution in kind is the contribution of a total
+of 100,714,051 no-par value bearer shares (shares without par
+value) in innogy SE, Essen, registered in the Commercial Register
+of Essen District Court under number HRB 27091, with a pro
+rata amount of the share capital of €2.00 each by way of trans-
+fer of ownership by RWE Downstream Beteiligungs GmbH to
+E.ON SE. Application has not yet been made for registration of
+the capital increase and its entry in the commercial register.
+Application will be made after the occurrence of certain condi-
+tions precedent, in particular the necessary antitrust approvals
+of the entire transaction. The capital increase and the issue of
+the new shares will only become effective upon implementation
+By the resolution that took effect on March 12, 2018, the Man-
+agement Board resolved, with the approval of the Supervisory
+Board, to make almost full use of the Authorized Capital 2017
+resolved by the Annual Shareholders Meeting of May 10, 2017,
+and to increase the share capital of E.ON SE, excluding share-
+holder subscription rights, in accordance with Sections 203 (2)
+and 186 (3) of the German Stock Corporation Act (AktG), from
+€2,201,099,000 by €440,219,800 to €2,641,318,800 through
+the issue of 440,219,800 new registered shares with no par
+value, against contributions in kind.
+The following notices pursuant to Section 33 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received since the beginning of 2018:
+Threshold
+exceeded
+Over and
+under
+Gained voting
+rights on
+indirect
+65,045,991
+2.96
+indirect
+Feb. 8, 2018
+Apr. 27, 2018
+Jul. 30, 2018
+over
+5%
+Aug. 2, 2018
+BlackRock Inc., Wilmington, U.S.
+under
+3%
+May 2, 2018
+Amundi S.A., Paris, France²
+under
+3%
+Feb. 9, 2018
+5,690
+Absolute
+Allocation Percentages
+Subject to the Supervisory Board's approval, the Management
+Board is authorized to exclude shareholders' subscription rights.
+2.93
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 10, 2017, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 9, 2022, the Company's capital stock by a total of up
+to €460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in
+kind (authorized capital pursuant to Sections 202 et seq. AktG,
+Authorized Capital 2017).
+170
+774
+original maturity greater than 3 months
+Current securities with an
+670
+774
+2018
+2017
+December 31,
+647
+Securities and fixed-term deposits
+Liquid Funds
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+(18) Liquid Funds
+169
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+€ in millions
+Fixed-term deposits with an
+original maturity greater than 3 months
+23
+Notes
+Neither a scrip dividend nor an employee stock purchase program
+was offered in the 2018 fiscal year.
+The Company has further been authorized by the Annual Share-
+holders Meeting to buy shares using put or call options, or a
+combination of both. When derivatives in the form of put or call
+options, or a combination of both, are used to acquire shares,
+the option transactions must be conducted with a financial insti-
+tution or a company operating in accordance with Section 53 (1)
+sentence 1 or Section 53b (1) sentence 1 or 7 of the German
+Banking Act (KWG) or at market terms on the stock exchange.
+No shares were acquired in 2018 using this purchase model.
+shares as of December 31, 2018, was 2,167,149,433 (Decem-
+ber 31, 2017: 2,167,149,433). As of December 31, 2018, E.ON SE
+held a total of 33,949,567 treasury shares (December 31, 2017:
+33,949,567) having a book value of €1,126 million (equivalent
+to 1.54 percent or €33,949,567 of the capital stock).
+Pursuant to a resolution by the Annual Shareholders Meeting
+of May 10, 2017, the Company is authorized to purchase own
+shares until May 9, 2022. The shares purchased, combined with
+other treasury shares in the possession of the Company, or
+attributable to the Company pursuant to Sections 71a et seq.
+AktG, may at no time exceed 10 percent of its capital stock. The
+Management Board was authorized at the aforementioned
+Annual Shareholders Meeting to cancel any shares thus acquired
+without requiring a separate shareholder resolution for the can-
+cellation or its implementation. The total number of outstanding
+The capital stock is subdivided into 2,201,099,000 registered
+shares with no par value (no-par-value shares) and amounts to
+€2,201,099,000 (2017: €2,201,099,000). The capital stock of
+the Company was provided by way of conversion of E.ON AG
+into a European Company (SE) and through a capital increase
+carried out on March 20, 2017, partially using the Authorized
+Capital 2012, which expired on May 2, 2017.
+(19) Capital Stock
+In 2018, there was €17 million in restricted cash (2017:
+€17 million) with a maturity greater than three months.
+Cash and cash equivalents include €2,881 million (2017:
+€1,869 million) in checks, cash on hand and balances at financial
+institutions with an original maturity of less than three months,
+to the extent that they are not restricted.
+The reinsurance of domestic pension obligations via VKE i.L.
+was terminated in 2017. The cash and cash equivalents held
+by VKE i.L. at the end of 2017 were reported as restricted cash.
+The transfer of cash and cash equivalents to suitable follow-on
+solutions essentially explains the decline in restricted cash in the
+2018 reporting year. The shares of VKE i.L.'s assets attributable
+to the E.ON Group were mostly transferred to the Contractual
+Trust Arrangement (CTA), which created additional plan assets
+in accordance with IAS 19 (see Note 24). Non-consolidated
+shares of the assets of VKE i.L. were transferred to the respec-
+tive follow-on solutions of the member companies concerned
+and thus deconsolidated.
+5,160
+5,357
+Total
+2,708
+3,924
+Cash and cash equivalents
+1,782
+659
+Restricted cash and cash equivalents
+Authorized Capital
+66
+64,505,533
+6.50
+-1,438
+Balance as of December 31 (after taxes)
+-3
+3
+-1,401
+-1,441
+Balance as of December 31 (before taxes)
+Taxes
+2017
+-1,404
+2018
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+The change in other comprehensive income is primarily the
+result of exchange rate differences recognized on the balance
+sheet.
+(22) Changes in Other Comprehensive Income
+172
+Notes
+Under German securities law, E.ON SE shareholders may
+receive distributions from the balance sheet profit of E.ON SE
+reported as available for distribution in accordance with the
+German Commercial Code.
+A proposal to distribute a cash dividend for 2018 of €0.43 per
+share will be submitted to the Annual Shareholders Meeting. For
+2017, shareholders at the May 9, 2018, Annual Shareholders
+Meeting voted to distribute a dividend of €0.30 for each dividend-
+paying ordinary share. Based on a €0.43 dividend, the total profit
+distribution is €932 million (2017: €650 million).
+The amount of retained earnings available for distribution is
+€2,509 million (2017: €1,839 million).
+€ in millions
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method.
+The sale of the investment in Uniper SE and the IPO of Enerjisa
+Enerji A.Ş. resulted primarily in the recognition of cumulative
+exchange rate differences in the amount of €329 million. Exchange
+rate losses from the devaluation of the Turkish lira, which were
+recognized directly in equity, had an offsetting effect.
+(23) Non-Controlling Interests
+84
+Customer Solutions
+371
+311
+ECE/Turkey
+Sweden
+1,306
+1,418
+1,677
+1,729
+2017
+2018
+December 31,
+Germany
+€ in millions
+Energy Networks
+Non-Controlling Interests
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests:
+The increase in non-controlling interests in the Non-Core Business
+resulted primarily from capital increases in the Renewables
+segment.
+Non-controlling interests by segment as of the dates indicated
+are shown in the table at right:
+As of December 31, 2018, these German-GAAP retained earnings
+totaled €2,554 million (2017: €1,884 million). Of this amount,
+legal reserves of €45 million (2017: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG.
+indirect
+-4,597
+-4,552
+45
+3.04
+direct
+Nov. 8, 2018
+over
+3%
+Nov. 13, 2018
+Wilmington, U.S.
+Capital Income Builder,
+66,805,993
+68,831,843
+direct/indirect
+Sep. 27, 2018
+over
+3%
+Oct. 4, 2018
+Board, Toronto, Canada
+Canada Pension Plan Investment
+143,099,216
+3.13
+The Capital Group Companies
+Inc., Los Angeles, U.S.
+Jan. 31, 2019
+2018
+45
+December 31,
+2017
+Total
+Other retained earnings
+Legal reserves
+€ in millions
+Retained Earnings
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+(21) Retained Earnings
+Additional paid-in capital was unchanged during 2018, at
+€9,862 million (2017: €9,862 million).
+(20) Additional Paid-in Capital
+¹The threshold of 3.0 percent was exceeded on February 7, 2018.
+2The threshold of 3.0 percent was exceeded on April 24, 2018.
+110,324,229
+5.01
+indirect
+Jan. 28, 2019
+over
+5%
+-2,506
+-2,461
+11
+Norwegian Ministry of Finance,
+Oslo, Norway¹
+61
+defined benefit obligations
+358
+206
+151
+1
+379
+213
+165
+1
+Remeasurements
+-66
+298
+-362
+-2
+-48
+-61
+11
+2
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+-47
+98
+-145
+-131
+-122
+Gains (-) and losses (+) on settlements
+36
+United
+Total
+Germany Kingdom
+Other
+countries
+5,690
+44
+16,392
+10,412
+5,933
+47
+135
+84
+50
+1
+150
+89
+60
+1
+Past service cost
+-150
+9
+-159
+46
+10
+Other
+countries
+-121
+Actuarial gains (-)/losses (+) arising from
+-209
+-40
+-40
+Exchange rate differences
+2
+2
+1
+57
+58
+Changes in scope of consolidation
+-5
+-259
+-420
+-684
+-3
+-250
+-410
+-663
+Benefit payments
+Employee contributions
+-70
+42
+-50
+-207
+-1
+-2
+-44
+changes in financial assumptions
+-11
+158
+-167
+-2
+205
+202
+3
+Actuarial gains (-)/losses (+) arising from
+experience adjustments
+-8
+Comprehensive Income
+15,713
+41
+5,080
+Report of the Supervisory Board
+15,301
+Defined benefit obligation as of December 31
+-23
+-292
+-315
+-1
+-43
+Other
+United
+Kingdom
+Interest cost on the present value of the
+-61
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning, most
+active and former E.ON Group employees are also covered by
+occupational benefit plans. Both defined benefit plans and defined
+contribution plans are in place at E.ON. Benefits under defined
+benefit plans are generally paid upon reaching retirement age,
+or in the event of disability or death.
+Description of the Benefit Plans
+175
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+3,620
+3,247
+33
+553
+200
+31
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates, as well
+as inflation developments and rising wages and salaries. In order
+to avoid exposure to future risks from occupational benefit plans,
+newly designed pension plans were introduced at the major
+German and foreign E.ON Group companies beginning in 1998.
+3,034
+Total
+Other countries
+United Kingdom
+Germany
+Net defined benefit liability/asset (-)
+12,093
+12,054
+Total
+11
+10
+Other countries
+5,137
+6,945
+4,880
+3,016
+The existing entitlements under defined benefit plans as of the
+balance sheet date cover about 47,000 retirees and their bene-
+ficiaries (2017: 48,000), about 14,000 former employees with
+vested entitlements (2017: 14,000) and about 28,000 active
+employees (2017: 27,000). The corresponding present value of
+the defined benefit obligations is attributable to retirees and their
+beneficiaries in the amount of €9.2 billion (2017: €9.3 billion),
+to former employees with vested entitlements in the amount of
+€2.4 billion (2017: €2.5 billion) and to active employees in the
+amount of €3.7 billion (2017: €3.9 billion).
+The features and risks of defined benefit plans are shaped by
+the general legal, tax and regulatory conditions prevailing in
+the respective country. The configurations of the major defined
+benefit and defined contribution plans within the E.ON Group
+are described in the following discussion.
+Germany
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+2018
+177
+2017
+€ in millions
+Defined benefit obligation as of January 1
+Employer service cost
+15,713
+Total Germany
+9,979
+Changes in the Defined Benefit Obligations
+The following table shows the changes in the present value of
+the defined benefit obligations for the periods indicated:
+Description of the Benefit Obligation
+However, these benefit plans in Sweden, Romania, the Czech
+Republic, Italy and the United States are of minor significance
+from a Group perspective.
+The remaining pension obligations are spread across various
+international activities of the E.ON Group.
+Other Countries
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding status be
+performed every three years. The actuarial assumptions under-
+lying the valuation are agreed upon by the trustees and E.ON
+UK plc. They include presumed life expectancy, wage and salary
+growth rates, investment returns, inflationary assumptions and
+interest rate levels. The most recent completed technical valuation
+took place as of March 31, 2015, and resulted in a technical
+funding deficit of £967 million. In the framework of the agreed
+deficit repair plan, annual payments of £65 million will be made
+to the pension trust through 2026. The remeasurement of the
+technical funding status was begun on the measurement date
+of March 31, 2018, and was not yet completed as of the report-
+ing date.
+Active employees at the German Group companies are predom-
+inantly covered by cash balance plans. In addition, some final-pay
+arrangements, and a small number of fixed-amount arrangements,
+still exist under individual contracts.
+The majority of the reported benefit obligation toward active
+employees is centered on the "BAS Plan," a pension unit system
+launched in 2001, and on a "provision for the future" ("Zukunfts-
+sicherung") plan, a variant of the BAS Plan that emerged from
+the harmonization in 2004 of numerous benefit plans granted
+in the past. In the "Zukunftssicherung" benefit plan, vested
+final-pay entitlements are considered in addition to the defined
+contribution pension units when determining the benefit. These
+plans are closed to new hires.
+The plans described in the preceding paragraph generally provide
+for ongoing pension benefits that generally are payable upon
+reaching the age threshold, or in the event of disability or death.
+The only benefit plan open to new hires is the E.ON IQ contribu-
+tion plan (the "IQ Plan"). This plan is a "units of capital" system
+that provides for the alternative payout options of a prorated
+single payment and payments of installments in addition to the
+payment of a regular pension.
+The benefit expense for all the cash balance plans mentioned
+above is dependent on compensation and is determined at differ-
+ent percentage rates based on the ratio between compensation
+and the contribution limit in the statutory retirement pension
+system in Germany. Through December 31, 2016, the cash
+balance plans contained different interest rate assumptions for
+the pension and capital units. Since January 1, 2017, a standard-
+ized interest rate model has been used for the BAS Plan, the
+Notes
+United Kingdom
+176
+To fund the pension plans for the German Group companies,
+plan assets were established in the form of Contractual Trust
+Arrangements ("CTAS"). The major part of these plan assets is
+administered by E.ON Pension Trust e.V. as trustee in accordance
+with specified investment principles. Additional domestic plan
+assets are managed by smaller German pension funds.
+Only at the pension funds and for the assets formerly adminis-
+tered by VKE i.L. and now transferred to the CTA do regulatory
+provisions, or contractual provisions based on those regulatory
+provisions, exist in relation to capital investment or funding
+requirements.
+United Kingdom
+In the United Kingdom, there are various pension plans. Until
+2005 and 2008, respectively, employees were covered by
+defined benefit plans, which for the most part were final-pay
+plans and make up the majority of the pension obligations
+currently reported for the United Kingdom. These plans were
+closed to employees newly hired after these dates. Since then,
+new hires are offered a defined contribution plan. Aside from the
+payment of contributions, this plan entails no additional actuarial
+risks for the employer.
+Benefit payments to the beneficiaries of the currently existing
+defined benefit pension plans are adjusted for inflation on a lim-
+ited basis.
+Plan assets in the United Kingdom are administered in a pension
+trust. The trustees are selected by the members of the plan or
+appointed by the entity. In that capacity, the trustees are partic-
+ularly responsible for the investment of the plan assets.
+"Zukunftssicherung" plan and the IQ plan, in which the interest
+rate is adjusted to market developments and hedged via mini-
+mum interest rates. The pension units for previous years remain
+in place unchanged. Based on market developments, an annual
+determination is made as to whether the minimum interest rates
+or possibly a higher interest rate is used for the formation of
+pension or capital units. Future pension increases at a rate of
+1 percent are guaranteed for a large number of active employees.
+For the remaining eligible individuals, pensions are adjusted mostly
+in line with the rate of inflation, usually in a three-year cycle.
+Report of the Supervisory Board
+CEO Letter
+Present value of all defined benefit obligations
+Germany
+United Kingdom
+Other countries
+Total
+Fair value of plan assets
+Germany
+December 31,
+2018
+2017
+10,180
+9,979
+5,080
+5,690
+41
+44
+7,164
+€ in millions
+Provisions for Pensions and Similar Obligations
+The present value of the defined benefit obligations, the fair
+value of plan assets and the net defined benefit liability (funded
+status) compared to the prior year are presented below:
+63
+132
+160
+84
+248
+22
+22
+15,301
+¹Holding Company without operational business.
+corporate or contractual provisions.
+Notes
+174
+(24) Provisions for Pensions and Similar
+Obligations
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €15.3 billion,
+were covered by plan assets having a fair value of €12.1 billion
+as of December 31, 2018. This corresponds to a funded status
+of 79 percent.
+Until the beginning of the 2018 fiscal year, Versorgungskasse
+Energie VVaG i.L. (VKE i.L.), which is included in the Consolidated
+Financial Statements, administered a fund holding assets of
+€1.1 billion that did not constitute plan assets under IAS 19 but
+which were also primarily intended for the hedging of retirement
+benefit obligations at E.ON Group companies in Germany (see
+Note 31). In the first quarter of 2018, the assets were transferred
+to the Contractual Trust Arrangement (CTA) for the affected
+Group companies and thus additional plan assets were created.
+There are no major restrictions beyond those under customary
+15,713
+3,247
+-195
+-61
+-134
+Net benefit payments
+-119
+-116
+Other asset retirement obligations
+Personnel obligations
+Nuclear-waste management obligations
+€ in millions
+Miscellaneous Provisions
+dates indicated:
+The following table lists the miscellaneous provisions as of the
+(25) Miscellaneous Provisions
+-3
+553
+3,034
+3,620
+31
+200
+3,016
+-1
+-12
+-13
+Other
+-6
+-4
+-2
+-16
+-12
+-4
+Changes in scope of consolidation
+49
+Net liability as of December 31
+48
+2
+2
+Exchange rate differences
+-1
+-1
+-23
+-21
+-2
+1
+33
+December 31, 2018
+Non-current
+Customer-related obligations
+159
+5
+-1
+1,085
+Personnel obligations
+9,888
+379
+-308
+43
+58
+-739
+10,455
+obligations
+Nuclear-waste management
+Dec. 31,
+2018
+Changes
+in esti-
+mates
+Reversals
+Reclassifi-
+cations
+Additions Utilization
+Unwinding
+of dis-
+counts
+Changes in
+scope of
+consolida-
+tion
+-213
+-15
+-93
+927
+50
+-1
+261
+obligations
+Customer-related
+33
+-4
+652
+27
+-2
+ences
+-7
+37
+Supplier-related obligations
+-9
+4
+8
+-596
+2
+1,218
+obligations
+Other asset retirement
+7
+2018
+€ in millions
+Exchange
+rate differ-
+135
+830
+97
+10,047
+408
+9,463
+425
+Non-current
+Current
+December 31, 2017
+950
+-130
+183
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Report of the Supervisory Board
+CEO Letter
+Changes in Miscellaneous Provisions
+The changes in the miscellaneous provisions are shown in the
+table below:
+Total
+Other
+Environmental remediation and similar obligations
+Current
+Supplier-related obligations
+15
+28
+Jan. 1,
+14,381
+2,041
+12,459
+2,117
+1,628
+1,231
+938
+1,362
+478
+637
+29
+28
+58
+203
+71
+185
+30
+7
+28
+5
+1,190
+492
+-807
+Total
+Employer contributions to plan assets
+148
+1
+50
+82
+133
+Employer service cost
+Other
+countries
+United
+Kingdom
+Germany
+Total
+Other
+countries
+United
+Kingdom
+Germany
+Total
+€ in millions
+2017
+2018
+Net Periodic Pension Cost
+The net periodic pension cost for defined benefit plans included
+in the provisions for pensions and similar obligations is shown
+in the table below:
+87
+60
+1
+Past service cost
+139
+45
+1
+16
+65
+82
+1
+13
+48
+Description of the Pension Cost
+62
+defined benefit liability/asset
+Net interest on the net
+Gains (-) and losses (+) on settlements
+10
+36
+46
+-159
+9
+-150
+Total
+The determination of the target portfolio structure for the indi-
+vidual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in a
+comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition of
+the capital markets and the structure of the benefit obligations,
+and is adjusted as necessary. The parameters used in the studies
+are additionally reviewed regularly, at least once each year.
+Asset managers are tasked with implementing the target port-
+folio structure. They are monitored for target achievement on
+a regular basis.
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the
+structure of the benefit obligations. This long-term investment
+strategy seeks to manage the funded status, with the result
+that any changes in the defined benefit obligation, especially
+those caused by fluctuating inflation and interest rates are, to
+a certain degree, offset by simultaneous corresponding changes
+in the fair value of plan assets. The investment strategy may
+also involve the use of derivatives (for example, interest rate
+swaps and inflation swaps, as well as currency hedging instru-
+ments) to facilitate the control of specific risk factors of pension
+liabilities. In the table above, derivatives have been allocated,
+based on their substance, to the respective asset classes. In
+order to improve the funded status of the E.ON Group as a whole,
+a portion of the plan assets will also be invested in a diversified
+portfolio of asset classes that are expected to provide for long-
+term returns in excess of those of fixed-income investments and
+the discount rate.
+181
+30
+19
+4
+2
+4
+2
+3
+2
+9
+3
+5
+2
+100
+6
+4
+2
+1
+2
+6
+4
+4
+-96
+100
+25
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+of the defined benefit obligations is identified in these guidelines
+as a risk that is controlled as part of a risk-budgeting concept.
+E.ON therefore regularly reviews the development of the funded
+status in order to monitor this risk.
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. An increase in the net defined benefit
+liability or a deterioration in the funded status following an
+unfavorable development in plan assets or in the present value
+¹In Germany, 7 percent (2017: 7 percent) of plan assets are invested in other debt securities, in particular mortgage bonds ("Pfandbriefe"), in addition to government and corporate bonds.
+15
+100
+100
+100
+100
+100
+100
+100
+100
+100
+2
+100
+2
+276
+188
+553
+3,034
+3,620
+Net liability as of January 1
+2017
+2018
+Other
+countries
+United
+Kingdom
+Total unlisted plan assets
+Total
+33
+€ in millions
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of
+the defined benefit obligations and the fair value of plan assets:
+Description of the Net Defined Benefit Liability
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 18.2 years as of
+December 31, 2018 (2017: 19.7 years).
+23
+2,216
+4,452
+6,691
+Total
+13
+Changes in the Net Defined Benefit Liability
+1,127
+Net periodic pension cost
+141
+1
+-9
+།
+-308
+-316
+-2
+-126
+616
+488
+47
+Changes from remeasurements
+86
+36
+634
+Other
+countries
+United
+Kingdom
+Total Germany
+4,009
+3,339
+190
+278
+2
+-96
+2
+-937
+2,273
+2024-2028
+2019
+Other
+countries
+United
+Kingdom
+Germany
+Total
+€ in millions
+Prospective Benefit Payments
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2018, for the next ten years are
+shown in the following table:
+Benefit payments to cover defined benefit obligations totaled
+€663 million in 2018 (2017: €684 million); of this amount,
+€6 million (2017: €16 million) was not paid out of plan assets.
+648
+For the following fiscal year, it is expected that Group-wide
+employer contributions to plan assets will amount to a total of
+€258 million.
+Description of Contributions and Benefit
+Payments
+Contributions to state plans totaled €0.2 billion (2017: €0.2 billion).
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €59 million in fixed contributions to
+external insurers or similar institutions was paid in 2018 (2017:
+€56 million) for pure defined contribution plans.
+182
+Notes
+in Germany had a partially offsetting effect.
+The negative past service cost primarily results from the
+amendment of pension plans in the U.K. Restructuring measures
+2
+86
+In 2018 E.ON made employer contributions to plan assets total-
+ing €937 million (2017: €195 million) to fund existing defined
+benefit obligations. The employer contributions paid include the
+one-off effect of the transfer of the assets of VKE i.L. to the CTA
+for the German Group companies concerned.
+3,413
+421
+2
+2
+220
+456
+678
+2023
+2
+218
+438
+658
+225
+2022
+215
+434
+651
+2021
+2
+211
+430
+643
+2020
+2
+Germany
+December 31, 2018
+-30
+20
+אויוי
+3
+99
+304
+99
+307
+56
+E.ON Group
+8,958 10,641
+138
+116
+327
+6in
+63
+210
+546
+9,188
+11,306
+8,958 10,641
+Corporate Functions/Other
+Non-Core Business
+641
+81
+2
+59
+IN
+7
+25
+72
+1
+3
+357
+3
+31
+31
+20
+46
+51
+130
+78
+2
+639
+3
+164
+463
+9,886 13,021
+0.875%
+May 2024
+7 years
+EUR 500 million
+0.375%
+Aug 2021
+4 years
+EUR 750 million
+5.750%
+May 2020
+12 years
+EUR 1,400 million4
+6.000%
+Oct 2019
+12 years
+GBP 850 million³
+Coupon
+Repayment
+Initial term
+EUR 750 million
+12 years
+May 2029
+1.625%
+€2.75 Billion Syndicated Revolving Credit Facility
+Effective November 13, 2017, E.ON arranged a syndicated
+revolving credit facility in the amount of €2.75 billion over an
+original term of five years, with two renewal options for one
+Additionally outstanding as of December 31, 2018, were private
+placements with a total volume of approximately €0.9 billion
+(2017: €0.9 billion), as well as promissory notes with a total
+volume of approximately €0.1 billion (2017: €0.4 billion).
+³The volume of this issue was raised from originally GBP 600 million to GBP 850 million.
+"The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.
+5The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+¹Listing: All bonds are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+²Rule 144A/Regulation S bond.
+6.750%
+Jan 2039
+30 years
+GBP 700 million
+6.650%
+1,907
+Apr 2038
+USD 1,000 million²
+5.875%
+Oct 2037
+30 years
+GBP 900 million
+6.375%
+Jun 2032
+30 years
+GBP 975 million5
+30 years
+51
+80
+21
+2021
+2022
+2029
+2029
+9,618
+1,218
+1,400
+750
+100
+1,689
+4,461
+11,298
+1,703
+1,221
+1,400
+750
+100
+1,689
+4,435
+2020
+2019
+after
+2023 and
+year each. The first option to renew the credit facility for an
+additional year was exercised in November 2018. The facility
+was granted by 18 banks, which make up E.ON's core banking
+group. The facility has not been drawn; rather, it serves as
+the Group's reliable, long-term liquidity reserve, one purpose of
+which is to function as a backup facility for the commercial paper
+programs.
+Notes
+188
+Acquisition Financing of €1.75 Billion
+To finance the voluntary public tender offer for innogy SE stock,
+E.ON originally secured a €5 billion acquisition facility to fund
+the acquisition of innogy stock not held by RWE. Considering the
+tender ratio of the voluntary public takeover offer, E.ON reduced
+the facility to €1.75 billion.
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE to issue from time to time commercial
+paper
+with maturities of up to two years less one day to investors.
+The U.S. commercial paper program in the amount of $10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to 366 days and extendible notes with
+original maturities of up to 397 days (and a subsequent extension
+option for the investor) to investors. As in the prior year, as
+of December 31, 2018, no commercial paper was outstanding
+under either the euro commercial paper program or the U.S.
+commercial paper program.
+The bonds issued by E.ON SE and EIF (guaranteed by E.ON SE)
+have the maturities presented in the table below. Liabilities
+denominated in foreign currency include the effects of economic
+hedges, and the amounts shown here may therefore vary from
+the amounts presented on the balance sheet.
+Bonds Issued by E.ON SE and E.ON International Finance B.V.
+Financial Liabilities by Segment
+€ in millions
+December 31, 2017
+Due
+between
+Due
+Total
+Due in
+2018
+Due in
+Due in
+Due in
+Due in
+December 31, 2018
+The following table breaks down the financial liabilities by
+segment:
+Financial Liabilities by Segment as of December 31
+€ in millions
+367
+435
+686
+59
+49
+302
+270
+74
+367
+74
+435
+ECE/Turkey
+Customer Solutions
+Germany Sales
+UK
+Other
+Renewables
+59
+9
+25
+686
+Volume in the
+respective currency
+270
+49
+Energy Networks
+Germany
+Sweden
+Bank loans/
+Bonds
+Liabilities to banks
+Liabilities from
+finance leases
+Other financial
+liabilities
+Financial liabilities
+302
+2018
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+59
+2017
+-24
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+A Debt Issuance Program simplifies the issuance from time to
+time of debt instruments through public and private placements
+to investors. The Debt Issuance Program of E.ON SE was most
+recently renewed in April 2018, with a total amount of €35 billion.
+E.ON SE plans to renew the program in 2019.
+Personnel Obligations
+There were changes in estimates for the remaining nuclear
+power business in 2018 in the amount of €379 million (2017:
+-€603 million). This mainly includes the effects of the imple-
+mentation of the increase in the cost increase rate, the reduction
+in the discount interest rate, with counteracting effects from
+the optimization of decommissioning and disposal of nuclear
+power plants. €308 million (2017: €237 million) of this was used,
+of which €220 million (2017: €166 million) related to decom-
+missioning and non-operating nuclear power plants based on
+circumstances for which decommissioning and dismantling costs
+were recognized.
+185
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Excluding the effects of discounting and cost increases, the
+amounts for E.ON's remaining disposal obligations would
+be €8,516 million with average credit terms of approximately
+9 years. The amount disclosed under economic net debt,
+including the nuclear power provisions to be transferred to
+RWE, amounts to €9,147 million.
+Provisions in the amount of €739 are reported as liabilities held
+for sale with respect to the sale of certain nuclear power activi-
+ties to RWE.
+Transfer of responsibility in 2017, in particular for interim and
+permanent storage costs, resulted in a substantial reduction in
+the duration of the disposal obligation. A risk-free discount rate
+of an average of about 0.4 percent applies to E.ON's remaining
+disposal obligations (previous year: 0.6 percent). Correspond-
+ingly, an applicable cost increase rate of 2.0 percent p.a. was
+applied to E.ON's remaining disposal obligations (previous year:
+1.5 percent), corresponding to a net interest rate of -1,6 percent
+(previous year: -0.9 percent). A change in the net interest rate of
+0.1 percent would change the amount of the provision recognized
+on the balance sheet by approximately €0.1 billion.
+Provisions, if they are non-current, are measured at their settle-
+ment amounts, discounted to the balance sheet date.
+Total
+10,455
+9,888
+1,583
+1,484
+Containers, transports, operational waste,
+other
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, in-kind obligations, restructuring and other
+deferred personnel costs.
+Provisions for Other Asset Retirement
+Obligations
+The provisions for other asset retirement obligations consist of
+obligations for renewable-energy power plants and infrastructure.
+In addition, the provisions for dismantling conventional plant
+components in the nuclear power segment, which are based
+on legally binding civil agreements and public provisions, in the
+amount of €440 million (2017: €437 million) are taken into
+account here. Excluding discounting and cost-increase effects, the
+amounts for these disposal obligations would be €329 million.
+The amount disclosed under economic net debt, including the
+nuclear-waste management obligations to be transferred
+to RWE, amounts to €352 million. The decrease in other asset
+retirement obligations is mainly due to the reclassification of
+discontinued operations in the Renewables segment.
+The amount of other asset retirement obligations disclosed
+under economic net debt, not including the provisions for dis-
+mantling conventional plant components in the nuclear power
+segment, amounts to €789 million. This amount also includes
+provisions for discontinued activities in the Renewables segment.
+1,563
+Non-current
+Current
+Non-current
+Current
+Financial liabilities
+€ in millions
+December 31, 2017
+186
+8,872
+Liabilities
+(26) Liabilities
+Notes
+The other miscellaneous provisions consist primarily of provisions
+from the electricity and gas business. These include provisions
+for Renewables Obligation Certificates (ROCs) in the amount
+of €0.3 billion, which represent an important mechanism for
+promoting renewable energies in the Customer Solutions UK
+segment. The ROCs represent a fixed share of renewable ener-
+gies in power sales and can be acquired either from renewable
+sources or on the market. During a twelve-month ROC period,
+the obligations accrued for this purpose are offset against the
+acquired certificates and used. Further included here are provi-
+sions for potential obligations arising from certain environmental
+remediation obligations of predecessor companies (€0.3 billion)
+as well as tax-related interest expenses and from taxes other
+than income taxes.
+Other
+Provisions for environmental remediation refer primarily
+to redevelopment protection measures and the rehabilitation
+of contaminated sites.
+Environmental Remediation and Similar
+Obligations
+Provisions for customer-related obligations consist primarily
+of potential losses on rebates and open sales contracts as well
+as from pending meter readings.
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Supplier-Related Obligations
+The following table provides a breakdown of liabilities:
+8,323
+8,404
+2017
+155
+-1,386
+-6
+16,422
+Total
+82
+-51
+-6
+2,859
+Other
+520
+-10
+-25
+46
+2
+507
+and similar obligations
+Environmental remediation
+256
+1,445
+1,754
+-1,297
+-1,883
+23
+-755
+2018
+December 31,
+€ in millions
+Nuclear Waste Management Obligations in Germany
+(Less Advance Payments)
+In the following, the provision items after deduction of advance
+payments are classified based on technical criteria:
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are not
+based on contractual agreements. The provisions were measured
+taking into account the amendments to the German Nuclear
+Energy Act of August 6, 2011, and the early decommissioning of
+individual nuclear power plants related to those amendments, as
+well as the Act on the Reorganization of Responsibility in Nuclear
+Waste Disposal, which entered into force in June 2017. E.ON is
+as a result ultimately exempted from financial responsibility for
+interim and final storage. Consequently, E.ON no longer recog-
+nizes any provisions for the costs of interim and final storage.
+Provisions for the disposal of spent nuclear fuel rods also com-
+prise the contractual costs of finalizing reprocessing and the
+associated return of waste to interim storage, as well as costs
+incurred for expert handling, including the necessary interim
+storage containers and transport to interim storage.
+The asset retirement obligations recognized include the anticipated
+costs of post- and service operation of the facility, dismantling
+costs, and the cost of removal and disposal of the nuclear com-
+ponents of the nuclear power plant.
+The provisions for nuclear-waste management based on nuclear-
+power legislation comprise all those nuclear obligations relating
+to the disposal of spent nuclear-fuel rods and low-level nuclear
+waste and to the retirement and decommissioning of nuclear
+power plant components that are determined on the basis of
+external studies, external and internal cost estimates and con-
+tractual agreements, as well as the supplementary provisions
+of the German Act Transferring Responsibility for Nuclear Waste
+Storage and the German Disposal Fund Act.
+Retirement and decomissioning
+The provisions for nuclear-waste management obligations as
+of December 31, 2018, in the amount of €9.9 billion exclusively
+relate to nuclear-power activities in Germany.
+184
+Notes
+As of December 31, 2018, provisions for nuclear-waste manage-
+ment obligations exclusively relate to Germany; other provisions
+mainly relate to eurozone countries and the United Kingdom.
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 9). The provision items
+are discounted in accordance with the maturities with interest
+rates of between 0 and 3.29 percent.
+14,576
+406
+-894
+8
+2,300
+Provisions for Nuclear-Waste Management
+Obligations
+3,099
+9,922
+Trade payables
+-3
+-367
+1,907
+327
+23
+-53
+357
+138
+-2
+24
+116
+8,958
+-223
+-1,460
+10,641
+Other Dec. 31, 2018
+Changes in
+scope of
+consolidation
+differences
+Cash flows
+-1,096
+22
+463
+13,021
+€35 Billion Debt Issuance Program
+referring to a restricted set of significant circumstances. Financial
+covenants (that is, covenants linked to financial ratios) are not
+employed.
+The financing activities involve the use of covenants (contractual
+obligations) consisting primarily of change-of-control clauses
+(right of cancellation upon change of ownership), negative
+pledges, pari-passu clauses and cross-default clauses, each
+Covenants
+Corporate Headquarters
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+187
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Jan. 1, 2018
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+of €50 million (2017: €370 million) and financial guarantees
+totaling €8 million (2017: €8 million). Also included is collateral
+received in connection with goods and services in the amount
+of €22 million (2017: €21 million). E.ON can use this collateral
+without restriction.
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €20 million
+(2017: €56 million). This collateral relates to amounts pledged
+by banks to limit the utilization of credit lines in connection
+with the fair value measurement of derivative transactions. The
+other financial liabilities include promissory notes in the amount
+9,886
+43
+-1,096
+-226
+-1,856
+E.ON Stock
+rate
+Exchange
+Financial liabilities
+50
+82
+Advance payments
+2,139
+817
+1,986
+427
+Liabilities from derivatives
+1,705
+1
+194
+248
+Construction grants from energy consumers
+230
+17
+95
+8
+Capital expenditure grants
+1,800
+1,660
+1,898
+At year-end 2018, the following E.ON SE and EIF bonds were
+outstanding:
+Other operating liabilities
+527
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Bonds
+€ in millions
+Financial Liabilities
+The following table presents the changes to financial liabilities
+in fiscal year 2018:
+Financial Liabilities
+14,612
+5,212
+11,198
+9,200
+Total
+4,690
+8,099
+4,506
+7,637
+Trade payables and other operating liabilities
+615
+5,221
+12,829
+Cash and cash equivalents
+Other
+11
+807
+937
+Employer contributions
+Employee contributions
+1
+20
+247
+130
+268
+-318
+-554
+interest income on plan assets
+not including amounts contained in the
+Return on plan assets recognized in equity,
+1
+20
+-236
+195
+61
+134
+-186
+-31
+-31
+Other
+-39
+-39
+Exchange rate differences
+9
+9
+Changes in scope of consolidation
+-259
+-408
+-668
+-250
+-406
+-657
+Benefit payments
+247
+-186
+268
+-554
+Other
+countries
+United
+Kingdom
+Germany
+Total
+€ in millions
+2017
+2018
+Total
+179
+Qualifying insurance policies
+Description of Plan Assets and the
+Investment Policy
+The defined benefit plans are funded by plan assets held in spe-
+cially created pension vehicles that legally are distinct from the
+Company. The fair value of these plan assets changed as follows:
+Changes in the Fair Value of Plan Assets
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Germany
+United
+Kingdom
+Other
+countries
+Remeasurements
+149
+148
+297
+138
+158
+296
+Interest income on plan assets
+11
+5,299
+7,073
+12,383
+11
+5,137
+6,945
+12,093
+Fair value of plan assets as of January 1
+-318
+-196
+-236
+-20
+Other investment funds
+9
+13
+11
+2
+12
+46
+6
+27
+47
+55
+47
+51
+49
+422
+8
+35
+34
+16
+6
+7
+Real estate
+Debt securities
+3
+6
+5
+Equity securities not traded on an exchange
+-176
+Plan assets not listed in an active market
+98
+75
+85
+97
+70
+81
+Total listed plan assets
+30
+26
+34
+18
+following table:
+December 31, 2018
+180
+Classification of Plan Assets
+The plan assets thus classified break down as shown in the
+Notes
+The plan assets include virtually no owner-occupied real estate
+or equity and debt instruments issued by E.ON Group companies.
+Each of the individual plan asset components has been allocated
+to an asset class based on its substance.
+11
+5,137
+Fair value of plan assets
+as of December 31
+12,054
+7,164
+4,880
+10
+12,093
+45
+6,945
+Percentages
+Total
+December 31, 2017
+19
+Government bonds
+Debt securities¹
+13
+22
+18
+14
+Germany
+17
+Corporate bonds
+Equity securities (stocks)
+Other
+countries
+United
+Kingdom
+Germany
+Total
+Other
+countries
+United
+Kingdom
+Plan assets listed in an active market
+46
+2014 2015 2016 2017
+2018
+46
+45
+¹Payout ratio in relation to adjusted net income; not adjusted for discontinued operations.
+2013
+CEO Letter
+- Dividend
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+51
+Shareholder Structure
+Report of the Supervisory Board
+6On all German stock exchanges, including Xetra.
+0.60
+0.25
+Our most recent survey shows that-based on the total number
+of shareholders identified and not including treasury shares-we
+have roughly 80 percent institutional investors and 20 percent
+retail investors. Investors in Germany hold about 31 percent of
+our stock, those outside Germany about 69 percent.
+Payout ratio¹ (%)
+Market capitalization5 (€ in billions)
+18.7
+19.6
+E.ON stock trading volume (€ in billions)
+28.9
+26.3
+0.50
+0.50
+0.50
+¹Based on shares outstanding (weighted average).
+0.43
+2Adjusted for non-operating effects.
+³For the respective financial year; the 2018 figure represents management's dividend proposal.
+0.21
+0.30
+59
+59
+62
+4Xetra.
+5Based on ordinary shares outstanding at year-end.
+Shareholder Structure by Group¹
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2018).
+32%
+The predominant issue in 2018 was the announcement that
+E.ON plans to take over innogy. As in the past, we continually
+informed our shareholders of the steps taken and the progress
+made toward the transaction.
+We used the forum of E.ON's quarterly reporting to provide the
+greatest-possible transparency on the developments at our
+business units.
+Our investor relations continue to be founded on four principles:
+openness, continuity, credibility, and equal treatment of all
+investors. Our mission is to provide prompt, precise, and rele-
+vant information at our periodic conferences and road shows,
+at eon.com, and when we meet personally with investors. Con-
+tinually communicating with them and strengthening our rela-
+tionships with them are essential for good investor relations.
+Investor Relations
+15
+2%
+Switzerland
+6%
+France
+15%
+United Kingdom
+Rest of world
+6%
+8%
+Rest of Europe
+31%
+Germany
+¹Percentages based on total investors identified (excluding treasury shares).
+Sources: share register and Ipreo (as of December 31, 2018).
+20%
+Retail investors
+Institutional investors
+80%
+€ per share
+Want to find out more?
+eon.com/investors
+You can contact us at:
+investorrelations@eon.com
+Strategy and
+Objectives
+Strategy and Objectives
+18
+USA and Canada
+Each of these core businesses has its own viable business logic.
+But combining them in a single company offers significant
+advantages. It enables E.ON to acquire and leverage a compre-
+hensive understanding of the transformation of the energy
+system and the interplay between the individual submarkets
+in regional and local energy supply systems. In an increasingly
+distributed and digital energy world, customer solutions and
+Resources and Capabilities
+Customer Solutions: the integration of innogy's customer-
+solutions business will expand our customer base to around
+50 million. Thus strengthened, E.ON intends to become
+the partner of choice for public, commercial, and residential
+customers and to create added value for them. We will con-
+tinually improve or redefine our portfolio of products and
+services for innovative heating solutions, energy efficiency,
+distributed generation and storage, and sustainable mobility
+solutions. We intend to achieve this through a consistently
+convincing customer experience, a strong digital orientation,
+and high-quality service.
+Energy Networks: distribution grids link our customers
+together and are the backbone of the energy transformation.
+After the integration of innogy, E.ON will operate distribution
+grids in eight European countries with a regulated asset base
+of €34 billion. The energy system is complex and increasingly
+characterized by distributed generation. It connects the elec-
+tricity market, heat market, and mobility. This complex system
+is not possible without smart distribution grids. This means
+that grids no longer only distribute power. They are evolving
+into smart platforms that integrate processes, data, and
+generation assets. E.ON is already a leader in network effi-
+ciency and will continue to set new standards in the future.
+•
+•
+Going forward, E.ON will concentrate on energy networks and
+customer solutions. With a clear focus on two strong core busi-
+nesses, we aim to become the partner of choice for energy and
+customer solutions.
+Shareholder Structure by Country/Region¹
+Objectives and Core Businesses
+The planned acquisition is a fundamental step in the implemen-
+tation of our strategy and offers the opportunity to achieve our
+strategic objectives within the constraints of our balance sheet.
+Success in energy networks and customer solutions can only
+be ensured through a systematic customer focus (municipalities,
+residential customers, and commercial customers). New dis-
+tributed customer solutions are based on a deep understanding
+of the customer business as well as energy networks. Regulated
+network assets together with growth opportunities in customer
+solutions create an attractive and balanced portfolio.
+After the transaction closes, E.ON will focus on two business
+segments: regulated, highly efficient energy networks and
+innovative customer solutions. We will be able to combine our
+expertise and innovativeness in these two segments with innogy's.
+The takeover of innogy will also enable us to achieve significant
+cost advantages.
+In March 2018 E.ON and RWE reached an extensive asset-swap
+agreement under which E.ON will acquire RWE's 76.8-percent
+stake in innogy and transfer to RWE substantially all of its renew-
+able energy business. In response to a voluntary public takeover
+offer, innogy's other shareholders tendered 9.4 percent of innogy
+stock to E.ON (for more details on the planned transaction, see
+pages 22 and 23 of the Combined Group Management Report).
+Transaction with RWE
+Through the planned acquisition of innogy, E.ON is seizing the
+initiative and-for the benefit of customers, employees, business
+partners, shareholders, and society in general-taking advantage
+of the significant opportunities created by the transformation
+of the energy world. Examples include continual innovation, an
+unambiguous commitment to sustainability, the expansion of
+digital architecture across our organization, and a strong brand.
+Health and safety remain indispensable corporate values. Our
+unequivocal objective is to avoid accidents and to minimize
+adverse health impacts on our employees.
+E.ON's strategy focuses the Company systematically on the
+new energy world of increasingly empowered and proactive
+customers. The planned acquisition of innogy and the planned
+sale of the renewable energy business to RWE strengthens
+this strategy. The energy world is becoming more electric and
+customer-driven. Going forward, we intend to focus on energy
+networks in a distributed energy world and more on customer
+solutions that emphasize sustainability and energy efficiency.
+Partner for the New Energy World
+Our Strategy:
+Increasingly, the renewable energy business worldwide is exposed
+to market price risks and needs to interact with the wholesale
+market. Moreover, it is becoming more global, and critical mass
+is becoming a more important factor. Combining innogy and
+E.ON's renewables businesses at RWE will create a bigger plat-
+form, one that has the critical mass that is indispensable for
+successful business development on an international scale.
+2,167
+2017
+Number of shares outstanding (in millions)
+At the Supervisory Board's meeting on March 12, 2019, we thoroughly dis-
+cussed-in the presence of the independent auditor and with knowledge of, and
+reference to, the Independent Auditor's Report and the results of the preliminary
+review by the Audit and Risk Committee-E.ON SE's Financial Statements prepared
+in accordance with the German Commercial Code, Consolidated Financial State-
+ments, and Combined Group Management Report as well as the Management
+Board's proposal for profit appropriation. In this context, we considered in detail
+the implications of the conclusion of the transaction agreement with RWE on the
+Company's financial statements. The independent auditor was available for sup-
+plementary questions and answers. After concluding our own examination we
+determined that there are no objections to the findings. We therefore acknowledged
+and approved the Independent Auditor's Report.
+Furthermore, the auditor examined E.ON SE's early-warning system regarding
+risks. This examination revealed that the Management Board has taken appropriate
+measures to meet the requirements of risk monitoring and that the early-warning
+system regarding risks is fulfilling its task.
+PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, the
+independent auditor chosen by the Annual Shareholders Meeting and appointed
+by the Supervisory Board, audited and submitted an unqualified opinion on the
+Financial Statements of E.ON SE and the Combined Group Management Report
+for the year ended December 31, 2018. The Consolidated Financial Statements
+prepared in accordance with IFRS exempt E.ON SE from the requirement to publish
+Consolidated Financial Statements in accordance with German law.
+Examination and Approval of the Financial Statements,
+Approval of the Consolidated Financial Statements, Proposal
+for Profit Appropriation for the Year Ended December 31, 2018
+10
+2,167
+10
+Report of the Supervisory Board
+The Nomination Committee met once in 2018 and carried out one written
+resolution procedure. All members of the committee took part. The
+purpose of the resolution process and the meeting was to prepare for
+the elections to the Supervisory Board and for its expansion.
+of E.ON SE. The committee discussed the recommendation for selecting
+an independent auditor for the 2018 financial year as well as the inter-
+mediate financial reports and assigned the tasks for the auditing services,
+established the audit priorities, determined the independent auditor's
+compensation, and verified the auditor's qualifications and independence
+in line with the recommendations of the German Corporate Governance
+Code. The committee assured itself that the independent auditor has no
+conflicts of interest. It also adopted a resolution regarding the mandatory
+rotation of the independent auditor. Topics of particularly detailed discus-
+sions included issues relating to accounting, the internal control system,
+and risk management. In addition, the committee thoroughly discussed
+the Combined Group Management Report and the proposal for profit
+appropriation and prepared the relevant recommendations for the Super-
+visory Board and reported them to the Supervisory Board. The committee
+also discussed in detail market conditions, the long-term changes in
+markets, and the resulting consequences for the underlying value of E.ON's
+operations. Other focus areas included an examination of E.ON's risk sit-
+uation, its risk-bearing capacity, and the quality control of its risk-manage-
+ment system. This examination was based on consultations with the
+independent auditor and, among other things, reports from the Company's
+Risk Committee. On the basis of the quarterly risk reports, the Audit and
+Risk Committee noted that no risks were identified that might jeopardize
+the existence of the Company or individual segments. The committee
+also discussed the work done by Internal Audit including the audits con-
+ducted in 2018 as well as the audit plan and audit priorities for 2019.
+Furthermore, the committee discussed the health, safety, and environ-
+ment report, compliance reports and E.ON's compliance system, as well
+as other issues related to auditing. The Management Board also reported
+on ongoing legal proceedings and on legal and regulatory risks for the
+E.ON Group's business. In addition, the committee discussed E.ON's cur-
+rent rating and its development on a regular basis. Other topics included
+the sale of the remaining Uniper stake, the progress of E.ON's wind farm
+projects, the relevance of cyber risks for E.ON's business, the Company's
+tax situation, reportable incidents at the E.ON Group, financing and
+insurance issues, and the Separate Combined Non-Financial Report.
+The Audit and Risk Committee met four times in 2018.
+All members took part in all meetings. With due atten-
+tion to the Independent Auditor's Report and in dis-
+cussions with the independent auditor, the committee
+devoted particular attention to the 2017 Financial
+Statements of E.ON SE (prepared in accordance with
+the German Commercial Code), the E.ON Group's 2017
+Consolidated Financial Statements (prepared in accor-
+dance with International Financial Reporting Standards,
+or "IFRS"), and the 2018 intermediate financial reports
+The Investment and Innovation Committee met four
+times. All members attended all meetings. The matters
+addressed by the committee included the planned sale
+of the remaining Uniper stake and the Management
+Board's planned funding measures. In particular, at
+its meetings the committee prepared the Supervisory
+Board's resolutions on these matters or, for matters for
+which it had the authority, made the decision itself.
+Furthermore, it discussed innovation topics related to
+the Energy Networks and Customer Solutions seg-
+ments. It addressed in detail the opportunities and risks
+of selected innovative business activities.
+In the 2018 financial year the Executive Committee met
+three times and conducted one written resolution pro-
+cedure. All members took part in all of the committee's
+meetings and procedures. In particular, this committee
+prepared the meetings of the full Supervisory Board.
+At its March meeting, the committee discussed in detail
+the planned takeover of innogy. In addition, the Execu-
+tive Committee discussed significant personnel matters,
+especially those relating to Management Board com-
+pensation. Furthermore, it prepared the Supervisory
+Board's resolution to appoint Dr. Thomas König to the
+Management Board and adopted a resolution based
+on the Management Board's proposal to change its
+members' respective task areas. Additionally, the Exec-
+utive Committee was continually informed about the
+progress toward the Management Board's targets for
+2018. The Committee also discussed the findings of
+the efficiency review. Finally, it discussed the medium-
+term plan for the period 2019-2021.
+9
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+We approved the Financial Statements of E.ON SE prepared by the Management
+Board and the Consolidated Financial Statements. The Financial Statements are
+thus adopted. We agree with the Combined Group Management Report and, in
+particular, with its statements concerning the Company's future development.
+We examined the Management Board's proposal for profit appropriation, which
+includes a cash dividend of €0.43 per ordinary share, also taking into consideration
+the Company's liquidity and its finance and investment plans. After examining
+and weighing all arguments, we agree with the Management Board's proposal for
+profit appropriation.
+In addition, we reviewed and approved the Separate Combined Non-Financial
+Report.
+CEO Letter
+Personnel Changes on the Management
+Board
+The Supervisory Board appointed Dr. Thomas König to
+the E.ON SE Management Board effective June 1, 2018.
+Page 244 of this report shows E.ON SE Management
+Board members' respective task areas as of year-end
+2018.
+Personnel Changes on the Supervisory
+Board
+As a result of the resolution by the 2018 Annual Share-
+holders Meeting to reduce the Supervisory Board
+from 18 to 14 members, shareholder representatives
+Prof. Dr. Ulrich Lehner, Dr. Theo Siegert, and Baroness
+Denise Kingsmill ended their service on the Supervisory
+Board effective May 9, 2018; employee representa-
+tives Tibor Gila and Silvia Šmátralová ended their service
+effective the same date. Employee representative
+Thies Hansen had already ended his service effective
+December 31, 2017. Klaus Fröhlich was elected as
+a new member of the Supervisory Board on the share-
+holder side effective May 29, 2018; Szilvia Pinczésné
+Márton, as a new member on the employee side effec-
+tive May 9, 2018.
+Personnel Changes on the Supervisory Board's
+Committees
+Klaus Fröhlich was elected as a new member of the Investment and
+Innovation Committee effective May 29, 2018. Carolina Dybeck Happe
+left the committee effective May 9, 2018. Shareholder representative
+Carolina Dybeck Happe was elected as a new member of the Audit and Risk
+Committee effective May 9, 2018; employee representatives Elisabeth
+Wallbaum and Fred Schulz were reelected to the committee effective
+May 9 and May 29, 2018, respectively. Fred Schulz, who in the new elec-
+tions to the Supervisory Board was reelected to the Supervisory Board
+pending the entry of the Supervisory Board's enlargement into the Com-
+mercial Register, was also reelected to the Executive Committee effective
+May 29, 2018. In addition, Andreas Schmitz was elected Chairman of
+the Audit and Risk Committee effective May 9, 2018. By being elected
+Vice-Chairman of the Supervisory Board effective May 9, 2018, Erich
+Clementi simultaneously became a member of the Executive Committee
+and the Nomination Committee.
+Essen, March 12, 2019
+The Supervisory Board
+CEO Letter
+Best wishes,
+Dr. Karl-Ludwig Kley
+Chairman
+E.ON Stock
+E.ON Stock
+14
+E.ON Stock in 2018
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+4.1. m
+11
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+100
+1.49
+Utilities (+2 percent), but outperformed the broader European
+stock market as measured by the EURO STOXX 50 index
+(-12 percent).
+of E.ON SE1
+Net income attributable to the shareholders
+2018
+Per share (€)
+E.ON Stock Key Figures
+6/30/18 7/31/18 8/31/18 9/30/18 10/31/18 11/30/18 12/31/18
+1.84
+My
+EURO STOXX¹
+E.ON Stock Performance
+Percentages
+110
+105
+E.ON
+95
+90
+- STOXX Utilities¹
+12/29/17 1/31/18 2/28/18 3/31/18 4/30/18 5/31/18
+Earnings from adjusted net income 1,2
+0.67
+Dividend per Share
+9.06
+8.63
+Year-end closing price4
+6.64
+7.89
+Twelve-month low4
+10.69
+9.93
+0.69
+At the 2019 Annual Shareholders Meeting, management will
+propose a cash dividend of €0.43 per share for the 2018 financial
+year (prior year: €0.30). The payout ratio (as a percentage
+of adjusted net income) would be 62 percent. Based on E.ON
+stock's year-end 2018 closing price, the dividend yield would
+be 5 percent.
+Twelve-month high4
+650
+932
+Dividend payout³ (€ in millions)
+At the end of 2018, E.ON stock (including reinvested dividends)
+was 2 percent below its year-end closing price for 2017. It
+thereby somewhat underperformed its peer index, the STOXX
+0.30
+0.43
+Dividend³
+Dividend
+¹Based on the performance index.
+Other financial liabilities
+n/a
+846
+10,641
+10,641
+AmC
+13,280
+Bank loans/Liabilities to banks
+116
+12,080
+116
+116
+13,280
+55
+8
+Liabilities from finance leases
+357
+357
+AmC
+467
+15,794
+Afs
+LaR
+846
+3,419
+3,419
+AfS
+3,419
+19,842
+2,888
+2,708
+LaR
+1,782
+1,782
+LaR
+3,301
+531
+13,021
+279
+Bonds
+688
+688
+Financial receivables and other financial assets
+Receivables from finance leases
+259
+6
+792
+AfS
+792
+792
+Equity investments
+(Level 2)
+prices
+active market
+Derived from
+Determined
+using market
+prices
+(Level 1)
+Fair value
+category¹
+IAS 39
+measure-
+ment
+scope of
+IFRS 7
+amounts
+€ in millions
+Carrying
+Carrying
+amounts
+within the
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2017
+Where the value of a financial instrument can be derived from
+an active market without the need for an adjustment, that value
+is used as the fair value. This applies in particular to equities held
+and to bonds held and issued.
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable esti-
+mates of their fair values because of their short maturity.
+197
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+1,907
+329
+1,593
+329
+329
+Financial liabilities
+Total assets
+Assets held for sale
+Restricted cash
+Cash and cash equivalents
+Securities and fixed-term deposits
+Other operating assets
+1,240
+279
+279
+n/a
+279
+29
+1,401
+HfT
+1,401
+1,401
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+LaR
+3,879
+3,879
+Trade receivables
+6,405
+7,152
+Trade receivables and other operating assets
+359
+LaR
+359
+359
+Other financial receivables and financial assets
+n/a
+966
+206
+982
+Carrying
+amount
+Conditional
+netting
+amount
+(netting
+agreements)
+Financial
+collateral
+received/
+pledged
+Net value
+Amount
+offset
+€ in millions
+Trade receivables
+3,786
+3,786
+3,786
+Interest-rate and currency derivatives
+1,203
+Financial assets
+Gross
+amount
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2018
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following table:
+12
+-78
+Total
+632
+-380
+252
+10
+-40
+0
+-79
+6
+39
+0
+149
+The sales (including disposals) exclusively relate to the minority
+shareholdings in nuclear power plants reclassified to the dis-
+posal group and the derivative financial instruments of the dis-
+continued operation in the Renewables segment.
+1,203
+20
+1,183
+Commodity derivatives
+2,207
+580
+1,627
+Commodity derivatives
+321
+115
+206
+206
+Total
+4.182
+115
+4,067
+Combined Group Management Report
+580
+3,281
+2,207
+105
+Interest-rate and currency derivatives
+1,654
+449
+115
+334
+206
+128
+Total
+5,438
+115
+5,323
+206
+20
+5,097
+Financial liabilities
+Trade payables
+1,654
+1,654
+105
+instruments
+Derivative financial
+1,756
+1,159
+Put option liabilities under IAS 322
+360
+360
+AmC
+360
+Other operating liabilities
+Total liabilities
+7,673
+25,810
+4,110
+AmC
+4,110
+21,306
+¹AfS: Available for sale; LaR: Loans and receivables; HfT: Held for trading; AmC: Amortized cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation
+techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+The fair value of shareholdings in unlisted companies and of
+debt instruments that are not actively traded, such as loans
+received, loans granted and financial liabilities, is determined by
+discounting future cash flows. Any necessary discounting takes
+place using current market interest rates over the remaining
+terms of the financial instruments.
+1,159
+The determination of the fair value of derivative financial instru-
+ments is discussed in Note 30.
+n/a
+1,159
+564
+Trade payables and other operating liabilities
+12,789
+9,226
+Trade payables
+1,800
+1,800
+AmC
+Derivatives with no hedging relationships
+1,797
+1,797
+HFT
+1,797
+14
+Derivatives with hedging relationships
+1,159
+AmC
+Notes
+In 2018, there were no material reclassifications between
+Levels 1 and 2 of the fair value hierarchy. At the end of each
+reporting period, E.ON assesses whether there might be grounds
+for reclassification between hierarchy levels.
+state-
+ment
+into
+Level 3
+out of
+Level 3
+Gains/
+Losses in
+OCI
+Dec. 31,
+2018
+Equity investments
+527
+-380
+147
+10
+-52
+-1
+6
+110
+ments
+198
+als)
+Settle-
+The input parameters of Level 3 of the fair value hierarchy for
+equity investments are specified taking into account economic
+developments and available industry and corporate data (see
+also Note 1). A hypothetical 10-percent increase or decrease in
+these key internal valuation parameters as of the balance sheet
+date would lead to a theoretical decrease in market values of
+€13 million or an increase of €14 million, respectively.
+The fair values determined using valuation techniques for financial
+instruments carried at fair value are reconciled as shown in the
+following table:
+Fair Value Hierarchy Level 3 Reconciliation
+Pur-
+Dec. 31,
+€ in millions
+2017
+Effects
+from
+IFRS 9
+chases
+Jan. 1, (including
+2018
+Sales
+(including
+dispos-
+Gains/
+Losses in
+Transfers
+income
+additions)
+Strategy and Objectives
+2,708
+Report of the Supervisory Board
+Equity forwards are valued on the basis of the stock prices of
+the underlying equities, taking into consideration any timing
+components.
+The fair values of existing instruments to hedge interest risk
+are determined by discounting future cash flows using market
+interest rates over the remaining term of the instrument.
+Discounted cash values are determined for interest rate, cross-
+currency and cross-currency interest rate swaps for each
+individual transaction as of the balance sheet date. Interest
+income and expenses are recognized in income at the date of
+payment or accrual.
+•
+•
+•
+•
+• Currency, electricity, gas and oil forward contracts, swaps,
+and emissions-related derivatives are valued separately at
+their forward rates and prices as of the balance sheet date.
+Whenever possible, forward rates and prices are based on
+market quotations, with any applicable forward premiums
+and discounts taken into consideration.
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments in
+the Consolidated Financial Statements.
+Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective clear-
+ing houses. Paid initial margins are disclosed under other
+assets. Variation margins received or paid during the term of
+such contracts are stated under other liabilities or other
+assets, respectively.
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant vari-
+ables. The Company assesses and monitors the fair value of
+derivative instruments on a periodic basis. The fair value to be
+determined for each derivative instrument is the price that
+would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants on the
+measurement date (exit price). E.ON also takes into account the
+counterparty credit risk for both own credit risk (debt value
+adjustment) and the risk of the corresponding counterparty
+(credit value adjustment) when determining fair value. The fair
+values of derivative instruments are calculated using common
+market valuation methods with reference to available market
+data on the measurement date.
+As a rule, reclassifications recognized in income are reported
+under other operating income and expenses. The nominal vol-
+ume of hedging instruments in net investment hedges
+amounted to €7,122 million as of December 31, 2018 (2017:
+€8,038 million). Since the currency risk of net investment
+hedges is hedged through the ongoing rollover of the hedging
+instruments, the majority are concluded with a remaining term
+of less than one year.
+195
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+E.ON Stock
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Valuation of Derivative Instruments
+Certain long-term energy contracts are valued with the
+aid of valuation models that use internal data if market
+prices are not available. A hypothetical 10-percent increase
+or decrease in these internal valuation parameters as of the
+balance sheet date would lead to a theoretical decrease
+in market values of €2 million or an increase of €2 million,
+respectively.
+At the beginning of 2018, a net loss of €68 million from the initial
+measurement of derivatives was deferred. Deferred expenses
+decreased to €0 million in the reporting year. The reduction is
+primarily due to the recognition of the Renewables business as
+a discontinued operation.
+•
+€ in millions
+prices
+prices
+scope of
+scope of
+Carrying
+using market active market
+within the
+Derived from
+Determined
+amounts
+Carrying
+Carrying
+amounts
+within the
+196
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2018
+The carrying amounts of the financial instruments, their grouping
+into IFRS 9 (prior year: IAS 39) measurement categories, their
+fair values and their measurement sources by class are presented
+in the following table:
+(31) Additional Disclosures on Financial
+Instruments
+Notes
+Market prices for electricity options are valued using stan-
+dard option pricing models commonly used in the market.
+¹As of December 31, 2018, includes -€71 million (2017: -€71 million) from terminated net
+investment hedges.
+-77
+Balance as of December 31, 2018¹
+Income taxes
+56
+38
+18
+4,495
+4,492
+4,000
+296
+196
+3,662
+2,845
+1,184
+350
+1,311
+2017
+2018
+> 5 years
+1-5 years
+< 1 year
+Total
+Net Investment Hedges
+amounts
+The Company uses foreign currency forwards, foreign currency
+swaps and foreign currency loans to protect the value of its net
+investments in its foreign operations denominated in foreign
+currency.
+As in 2017, no ineffectiveness resulted from net investment
+hedges in 2018.
+Reclassification adjustments recognized in income
+2
+Unrealized changes-reserve for hedging costs
+45
+Unrealized changes-hedging reserve
+-124
+Balance as of January 1, 2018
+-124
+Balance as of December 31, 2017¹
+-2
+2
+444
+-568
+Currency risk
+Unrealized changes-hedging reserve
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Income taxes
+Balance as of January 1, 2017
+€ in millions
+Changes in OCI Arising from Net Investment Hedges
+The development of OCI arising from net investment hedges
+is as follows:
+The carrying amount of the assets used as hedging instruments
+as of December 31, 2018, was €12 million (2017: €74 million)
+and the carrying amount of the liabilities used as hedging instru-
+ments was €1,131 million (2017: €1,857 million). The fair values
+of the designated portion of the hedging instruments changed
+by €50 million in the reporting period (2017: €445 million).
+IFRS 7
+IFRS 9
+Fair value
+3,924
+Cash and cash equivalents
+247
+247
+AmC
+247
+42
+1,113
+1,155
+FVOCI
+1,155
+310
+1,302
+1,612
+FVPL
+1,612
+599
+2,415
+3,014
+3,924
+3,014
+3,226
+698
+Total assets
+69
+1
+144
+FVPL
+144
+269
+AmC
+269
+413
+11,442
+AmC
+659
+659
+Assets held for sale
+Restricted cash
+698
+698
+FVPL
+AmC
+Maturity
+3,014
+AmC
+180
+AmC
+180
+382
+Other financial receivables and financial assets
+305
+n/a
+305
+329
+485
+711
+Financial receivables and other financial assets
+Receivables from finance leases
+110
+FVPL
+110
+664
+Equity investments
+(Level 2)
+(Level 1)
+Trade receivables and other operating assets
+416
+6,919
+Trade receivables
+416
+1,486
+Securities and fixed-term deposits
+Other operating assets
+168
+1,293
+35
+2
+170
+n/a
+170
+170
+1,367
+FVPL
+1,367
+1,367
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+AmC
+3,786
+3,896
+5,739
+194
+Commodity price change risk
+Interest-rate risk
+This was offset by lower net cash inflows from the sale of secu-
+rities and changes in financial receivables (-€1.9 billion) and an
+increase in cash investments (-€0.2 billion).
+Cash provided by investing activities from continuing and dis-
+continued operations amounted to roughly +€1.0 billion in
+2018 (2017: -€0.4 billion). The disposal of the shareholding in
+Uniper SE (+€3.8 billion) had a particular impact in this regard.
+At €4.1 billion, cash provided by operating activities before
+interest and taxes from continuing and discontinued operations
+was €6.3 billion higher than in the prior-year period. A material
+factor in this increase was the July 2017 payment of around
+€10.3 billion into Germany's public fund for financing nuclear-
+waste disposal. The €2.85 billion nuclear-fuel tax refunded in
+June 2017 and positive effects on working capital in the previous
+year had an offsetting effect. Cash provided by operating activi-
+ties from continuing and discontinued operations also declined
+due to higher interest and tax payments.
+The total consideration received by E.ON in 2018 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €239 million (2017: €517 million). Cash and cash equiv-
+alents sold amounted to €20 million (2017: €0 million). The sale
+of the consolidated activities led to reductions of €167 million
+(2017: €134 million) in assets and €62 million (2017: €34 million)
+in provisions and liabilities.
+(29) Supplemental Cash Flow Disclosures
+On April 13, 2017, the Federal Constitutional Court declared
+the Nuclear Fuel Tax Act to be incompatible with the Basic Law
+and invalid. The nuclear-fuel tax plus interest paid by E.ON was
+refunded. Nuclear operators use two models for the calculation
+of interest with the German customs authorities, one of which
+is used by PreussenElektra. With the 16th amendment to the
+German Nuclear Energy Act, the German Federal Government
+has implemented the ruling of the German Federal Constitutional
+Court on the phase-out of nuclear energy. This amendment
+regulated compensation claims for certain investments and
+residual volumes of electricity, and created an obligation to offer
+these residual volumes at reasonable terms and conditions.
+PreussenElektra sued Krümmel GmbH & Co. OHG and Vattenfall
+Nuclear GmbH with the aim of transferring, without compen-
+sation, the residual volumes of electricity from the Krümmel
+nuclear power plant corresponding to the ownership interest.
+Lawsuits are also pending in connection with the construction
+and operation of plants for generating electricity from renewable
+energy sources.
+In the Energy Networks segment, Group companies are involved
+in proceedings for the award of concessions, the insolvency of
+energy suppliers and in connection with grid connections and
+the calculation of the grid fee. Official regulations and changes
+in regulatory practice have given rise to legal disputes. The
+national regulatory regimes within Europe are also subject to
+significant changes. The changes to the legal and regulatory
+framework can in some cases significantly impact subsidies and
+remuneration practices, which in turn are the object of regulatory
+or court proceedings.
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or may
+be instituted or asserted in the future against companies of the
+E.ON Group. This in particular includes legal actions and proceed-
+ings on contract amendments and price adjustments initiated
+in response to market upheavals and the changed economic sit-
+uation in the electricity and gas sectors (also as a consequence
+of the energy transition) and concerning price increases and
+anticompetitive practices.
+(28) Litigation and Claims
+191
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+In addition, further financial obligations in place as of December 31,
+2018, totaled approximately €3.3 billion (€2.6 billion due within
+one year). This item also includes financial obligations from ser-
+vices to be procured, capital obligations from joint ventures and
+obligations concerning the acquisition of real estate funds held
+as financial assets, as well as corporate actions. Also included
+is the financial obligation from the voluntary public takeover bid
+for the shares of innogy SE in the amount of €1.9 billion, which
+is an open transaction.
+The expenses reported in the income statement for these leasing
+agreements amounted to €125 million (2017: €115 million).
+They include contingent rents.
+At -€2.6 billion, cash provided by financing activities from
+continuing and discontinued operations was €3.1 billion less
+than the prior-year figure of +€0.5 billion. This was due in par-
+ticular to the €2.0 billion bond issued in the first half of 2017
+and the €1.35 billion capital increase carried out in 2017. In
+addition, E.ON SE's dividend payment in 2018 was approximately
+€0.3 billion higher than in the prior year. This was offset by lower
+payouts on the redemption of bonds.
+450
+In fiscal year 2018, tax liabilities were reduced by €143 million
+(2017: €228 million) through the transfer of tax credits (accel-
+erated depreciation, so-called "MACRS" and production tax
+credits, "PTCs") to tax equity investors. These non-cash trans-
+actions had no impact on the consolidated cash flow statement.
+192
+Carrying Amounts of Hedging Instruments and Changes in Fair Value of Hedging Instruments and
+Hedged Items in Connection with Cash Flow Hedges
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+E.ON Stock
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+The following table presents the carrying amounts of the
+hedging instruments and the changes in the fair values of the
+hedging instruments and hedged items by hedged risk type:
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash flow
+hedge accounting.
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps and cross-currency
+interest rate swaps are the principal instruments used to limit
+interest rate and currency risks. The purpose of these swaps is to
+maintain the level of payments arising from long-term interest-
+bearing receivables and liabilities and from capital investments
+denominated in foreign currency and euro by using cash flow
+hedge accounting in the functional currency of the respective
+E.ON company.
+Cash Flow Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges are
+generally reported in that line item of the income statement
+which also includes the respective hedged items.
+Fair Value Hedges
+rate of 3.53 percent (2017: 3.53 percent) to hedge the interest
+rate risk in the euro zone. The average hedging price for hedging
+commodity price change risks amounted to €52.63/MWh in
+the year under review (2017: €0/MWh).
+To hedge currency risk, E.ON entered into hedging transactions in
+the reporting year in pounds sterling at an average hedging rate
+of GBP 0.84/EUR (2017: GBP 0.84/EUR) and in U.S. dollars at an
+average hedging rate of USD 1.22/EUR (2017: USD 1.26/EUR).
+Hedging transactions were concluded at an average interest
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group are hedged.
+At the E.ON Group, hedge accounting in accordance with IFRS 9
+is employed primarily in connection with hedging long-term
+liabilities and bonds to be issued in the future via interest-rate
+derivatives and for hedging long-term foreign currency receiv-
+ables and payables and foreign investments via currency deriv-
+atives. E.ON also hedges net investments in foreign operations.
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+Strategy and Objectives
+(30) Derivative Financial Instruments and
+Hedging Transactions
+Notes
+€ in millions
+585
+181
+In addition, E.ON has entered into indemnification agreements,
+which as a rule are incorporated in agreements concerning the
+disposal of shareholdings and, above all, affect the customary
+representations and warranties with relation to liability risks for
+environmental damage and contingent tax risks. In some cases,
+obligations are covered in the first instance by provisions of the
+disposed companies before E.ON itself is required to make any
+payments. Guarantees issued by companies that were later sold
+by E.ON SE or its legal predecessors are usually included in the
+respective final sales contracts in the form of indemnities.
+E.ON has issued direct and indirect guarantees to third parties,
+which may trigger payment obligations based on the occurrence
+of certain events. These consist primarily of financial guarantees
+and warranties.
+The fair value of the E.ON Group's contingent liabilities was
+€0.54 billion as of December 31, 2018, and primarily includes
+contingent liabilities in connection with contingencies and
+potential long-term environmental remediation measures.
+Contingent Liabilities
+As part of its business activities, E.ON is subject to contingent
+liabilities and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees, obliga-
+tions from litigation and claims (as discussed in more detail in
+Note 28), short- and long-term contractual, legal and other
+obligations and commitments.
+(27) Contingent Liabilities and Other Financial
+Obligations
+Other operating liabilities consist primarily of accruals in the
+amount of €3,700 million (2017: €3,444 million) and interest
+payable in the amount of €360 million (2017: €451 million).
+Also included in other operating liabilities are carryforwards of
+counterparty obligations to acquire additional shares in already
+consolidated subsidiaries as well as non-controlling interests
+in fully consolidated partnerships with legal structures that give
+their shareholders a statutory right of withdrawal combined with
+a compensation claim, in the amount of €289 million (2017:
+€360 million).
+for the first time upon implementation of IFRS 15 due to their
+realization over a specific period of time. These grants are cus-
+tomary in the industry, generally non-refundable and recognized
+as revenue in the amount of €262 million according to the useful
+lives of the related assets.
+Construction grants of €2,146 million (2017: €1,899 million)
+were paid by customers for the cost of new gas and electricity
+connections in accordance with the generally binding terms
+governing such new connections and represent contractual
+liabilities under IFRS 15. This includes €200 million in grid
+connection fees, which were recognized as contract liabilities
+Capital expenditure grants of €103 million (2017: €247 million)
+have not yet been recognized as revenue. The E.ON Group
+retains ownership of the assets. The grants are non-refundable
+and are recognized in other operating income over the period of
+the depreciable lives of the related assets.
+Trade payables totaled €1,660 million as of December 31, 2018
+(2017: €1,800 million).
+Trade Payables and Other Operating Liabilities
+189
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+81
+The guarantees of E.ON also include items related to the opera-
+tion of nuclear power plants. With the entry into force of the
+German Nuclear Energy Act ("Atomgesetz" or "AtG"), as amended,
+and of the ordinance regulating the provision for coverage under
+the Atomgesetz ("Atomrechtliche Deckungsvorsorge-Verordnung"
+or "AtDeckV") of April 27, 2002, as amended, German nuclear
+power plant operators are required to provide nuclear accident
+liability coverage of up to €2.5 billion per incident.
+190
+Due in more than 5 years
+Total
+262
+295
+107
+109
+2017
+2018
+Minimum lease payments
+€ in millions
+Due within 1 year
+Due in 1 to 5 years
+E.ON as Lessee-Operating Leases
+Additional financial obligations arose from rental and tenancy
+agreements and from operating leases. The corresponding min-
+imum lease payments are due as broken down in the table below:
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2018, relate primarily to the
+purchase of electricity and natural gas. Financial obligations
+under the electricity purchase contracts amount to approximately
+€4.0 billion on December 31, 2018 (€2.8 billion due within
+one year). Financial obligations under the gas purchase contracts
+amount to approximately €2.9 billion on December 31, 2018
+(€1.4 billion due within one year). Additional purchase commit-
+ments as of December 31, 2018, amounted to approximately
+€0.6 billion (€0.1 billion due within one year). They include long-
+term contractual commitments to purchase heat and alterna-
+tive fuels.
+commitment mainly includes financial obligations for as yet
+outstanding investments, in particular in the Energy Networks
+Germany and Sweden segments. On December 31, 2018, these
+obligations totaled €0.7 billion.
+As of December 31, 2018, purchase commitments for invest-
+ments in intangible assets and in property, plant and equipment
+amounted to €0.8 billion (2017: €1.1 billion). Of these com-
+mitments, €0.6 billion are due within one year. The purchase
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are other
+mostly long-term financial obligations arising mainly from
+contracts entered into with third parties, or on the basis of legal
+requirements.
+Other Financial Obligations
+As of December 31, 2018, E.ON SE also issues collateral in the
+amount of €1.8 billion for former Group companies, which will
+be repaid or to a great extent assumed by the companies of the
+Uniper Group in the future. The largest payment guarantee on
+a pro rata basis is Uniper Energy Storage GmbH in the amount
+of €0.9 billion. This also includes guarantees in connection with
+Swedish nuclear power activities. These guarantees and obliga-
+tions will be transferred from E.ON to Uniper in the first quarter
+of 2019.
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a Soli-
+darity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement
+dated March 25, April 18, April 28, and June 1, 2011. If an
+accident occurs, the Solidarity Agreement calls for the nuclear
+power plant operator liable for the damages to receive-after
+the operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement, E.ON
+Energie's share of the liability coverage on December 31, 2018,
+was 44.6 percent (prior year: 42.0 percent) and 46.8 percent
+from January 1, 2019, plus an additional 5.0 percent charge
+for the administrative costs of processing damage claims. Suffi-
+cient liquidity has been provided for and is included within the
+liquidity plan.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million
+and €15 million for claims related to officially ordered evacuation
+measures. Group companies have agreed to place their sub-
+sidiaries operating nuclear power plants in a position to maintain
+a level of liquidity that will enable them at all times to meet their
+obligations as members of the Nuklear Haftpflicht GbR, in pro-
+portion to their shareholdings in nuclear power plants.
+Notes
+Financial liabilities
+Currency risk
+Commodity price change risk
+-2
+-15
+Unrealized changes-hedging reserve
+-1,016
+Balance as of January 1, 2018
+-1,016
+Balance as of December 31, 2017¹
+26
+Income taxes
+3
+Companies accounted for under the equity method
+33
+149
+182
+Reclassification adjustments recognized in income
+64
+64
+Unrealized changes-reserve for hedging costs
+174
+-13
+-222
+Unrealized changes-reserve for hedging costs
+Companies accounted for under the equity method
+Currency risk
+€ in millions
+Nominal Values of Hedging Instruments in Connection with Cash Flow Hedges
+in the following table:
+The nominal volume of the hedging instruments is presented
+Reclassifications recognized in income are generally reported
+in that line item of the income statement which also includes
+the respective hedged transaction.
+Notes
+The balance of the OCI arising from cash flow hedges as of
+December 31, 2018, contains €0.8 billion relating to hedging of
+interest-rate risk (2017: €0.8 billion).
+¹As of December 31, 2018, includes -€249 million (2017: -€304 million) from terminated cash flow hedges.
+-992
+Balance as of December 31, 2018¹
+-14
+Income taxes
+-15
+54
+-45
+9
+59
+59
+Reclassification adjustments recognized in income
+Interest-rate risk
+-48
+Currency risk
+298
+257
+205
+135
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+Change in the fair value
+of hedged items
+Change in the fair value
+of the designated portion
+of hedging instruments
+Liabilities from
+derivatives
+instruments
+Receivables from
+derivative financial
+Carrying amount
+193
+23
+risk
+-293
+289
+Total
+-1,243
+Unrealized changes-hedging reserve
+Balance as of January 1, 2017
+€ in millions
+Interest-rate
+Changes in OCI Arising from Cash Flow Hedges
+The development of OCI arising from cash flow hedges, broken
+down by hedged risk type, is as follows:
+expenses. Interest cash flow hedges are reported under other
+interest income or expenses.
+Gains and losses from the ineffective portions of cash flow hedges
+are classified as other operating income or other operating
+The amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2018, produced an expense
+of €4 million (2017: €5 million gain). Of this amount, €3 million
+relates to hedging of interest-rate risk (2017: €0 million).
+3
+2
+9
+64
+-9
+-67
+836
+911
+29
+-24
+Bonds
+Strategy and Objectives
+427
+1,241
+36
+Derivatives with hedging relationships
+1,172
+1,172
+n/a
+1,172
+2
+1,205
+1,170
+Put option liabilities under IAS 322
+289
+289
+AmC
+289
+Other operating liabilities
+7,781
+4,401
+19,587
+25,711
+Total liabilities
+36
+52
+FVPL
+FVPL
+52
+AmC
+1,125
+3,682
+Liabilities associated with assets held for sale
+4,401
+AmC
+1,073
+1,241
+1,241
+Derivatives with no hedging relationships
+11,116
+58
+138
+AmC
+138
+138
+Bank loans/Liabilities to banks
+20
+11,116
+8,958
+8,958
+9,705
+9,886
+14,344
+27,333
+AmC
+¹FVPL: fair value through P&L; FVOCI: fair value through OCI; AmC: amortized cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques
+with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+20
+327
+AmC
+1,654
+1,660
+Trade payables
+8,757
+12,143
+Liabilities from finance leases
+Trade payables and other operating liabilities
+AmC
+282
+463
+Other financial liabilities
+n/a
+327
+282
+CEO Letter
+1,073
+(netting
+Held for trading
+Available for sale
+Loans and receivables
+For trade receivables, expected credit losses are recognized over
+their entire residual term using the simplified method (lifetime
+ECL trade receivables). For other financial assets, E.ON first deter-
+mines the credit loss expected within the first twelve months
+(stage 1-12 month ECL). In derogation of this, in the event of
+a significant increase in the default risk, the expected credit loss
+over the entire residual term of the respective instrument is
+recognized (stage 2-lifetime ECL). A significant increase in the
+default risk is assumed if the internally determined counterparty
+risk has been downgraded by at least three levels since initial
+recognition. If there are objective indications of an actual default,
+an individual impairment loss must be recognized on the income
+statement (stage 3-losses already incurred).
+Impairment losses on financial assets must be recognized not
+only for losses already incurred but also for expected future
+credit losses. E.ON takes into account expected future credit
+losses of financial assets carried at amortized cost, financial
+assets measured at fair value through other comprehensive
+income, and receivables from finance leases.
+Impairments of Financial Assets
+from 2024
+Cash
+outflows
+Cash
+outflows
+2021-2023
+outflows
+2020
+Cash
+Cash
+outflows
+2019
+Cash outflows for financial liabilities
+Financial guarantees
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+200
+Cash Flow Analysis as of December 31, 2018
+(undiscounted) cash outflows arising from the liabilities included
+in the scope of IFRS 7:
+The following two tables illustrate the contractually agreed
+Notes
+Agreement for Financial Derivatives Transactions (DRV), the
+European Federation of Energy Traders (EFET) and the Financial
+Energy Master Agreement (FEMA). Collateral pledged to and
+received from financial institutions in relation to these liabilities
+and assets limits the utilization of credit lines in the fair value
+measurement of interest-rate and currency derivatives, and is
+shown in the table. The E.ON Group did not net interest-rate and
+currency derivatives and non-derivative financial instruments.
+The netting agreements are derived from netting clauses con-
+tained in master agreements including those of the International
+Swaps and Derivatives Association (ISDA), the German Master
+Amortized cost
+Total
+2017
+-64
+Balance as of December 31 of the previous
+€ in millions
+Valuation Allowances for Trade Receivables
+2017
+1,910
+5,417
+6
+Gross carrying amount default grade
+Total
+2018
+37
+43
+5,374
+Gross carrying amount investment grade
+Gross carrying amount non investment
+grade
+Transactions and business relationships resulting in the deriva-
+tive financial receivables and liabilities presented are generally
+concluded on the basis of standard contracts that permit the
+netting of open transactions in the event that a counterparty
+becomes insolvent.
+month ECL
+Lifetime
+ECL trade
+receivables
+1,867
+€ in millions
+Credit Risk Exposure for Financial Assets for Which Rating
+Information Is Available
+The default risks for financial assets for which rating information
+is available can be found in the following table for each rating
+grade and separately according to the stages of impairment
+existing in 2018:
+In 2018, valuation allowances for trade receivables changed as
+shown in the following table:
+E.ON distinguishes between two approaches when calculating
+expected future credit losses. If external or internal rating infor-
+mation is available, the expected credit loss is determined on
+the basis of this data. If no rating information is available, E.ON
+determines default ratios on the basis of historical default rates,
+taking into account forward-looking information on economic
+developments. In the E.ON Group, a default or the classification
+of a receivable as uncollectible is assumed after 180 or 360 days,
+depending on the region.
+202
+Notes
+The net result of the category fair value through OCI results in
+particular from interest income and proceeds from the sale of
+fair value through OCI securities.
+-1,331
+-517
+-1,084
+334
+Stage 1-12
+Financial
+collateral
+received/
+3,229
+153
+1,305
+year
+Interest-rate and currency derivatives
+3,854
+25
+3,879
+3,879
+Trade receivables
+Financial assets
+€ in millions
+Net value
+pledged
+agreements)
+1
+150
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2017
+199
+Conditional
+netting
+amount
+Gross
+amount
+Amount
+offset
+Carrying
+amount
+1,305
+56
+1,249
+Commodity derivatives
+4,074
+0
+4,074
+128
+128
+128
+1,454
+692
+2,146
+2,146
+1,775
+25
+1,800
+692
+1,800
+Interest-rate and currency derivatives
+Commodity derivatives
+Trade payables
+Financial liabilities
+5,348
+56
+153
+5,557
+5,557
+Total
+245
+128
+373
+373
+Total
+1,430
+-737
+Effects from IFRS 9
+208
+(32) Transactions with Related Parties
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, the most significant of which are
+associated companies accounted for under the equity method
+and their subsidiaries. Receivables and payables consist primar-
+ily of trade receivables and lease obligations from leaseback
+models. Income and expenses from transactions with associated
+companies mainly related to companies of the Uniper Group, until
+their sale to Fortum. Additionally reported as related parties are
+joint ventures, as well as equity interests carried at fair value and
+unconsolidated subsidiaries. Transactions with related parties
+are summarized as follows:
+Related-Party Transactions
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 82 through 97.
+The members of the Supervisory Board received a total of
+€4.1 million for their activity in 2018 (2017: €4.5 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts
+with subsidiaries totaling €0.5 million (2017: €0.6 million).
+Provisions for these commitments amounted to €12.8 million
+as of December 31, 2018 (2017: €14.9 million).
+The expense determined in accordance with IFRS 2 for existing
+commitments arising from share-based payment in 2018 was
+€3.6 million (2017: €6.5 million).
+The total expense for 2018 for members of the Management
+Board amounted to €11.1 million (2017: €9.7 million) in short-
+term benefits and €2.3 million (2017: €2.2 million) in post-
+employment benefits. The cost of post-employment benefits
+is equal to the service and interest cost of the provisions for
+pensions. Additionally taken into account in 2018 were actuarial
+gains of €0.4 million (2017: €1.1 million).
+Notes
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory
+Board of E.ON SE) must be disclosed.
+those that exist with municipal entities in which E.ON does not
+have an interest. Expenses from transactions with related
+companies are generated mainly through electricity and gas
+deliveries as well as through management fees, IT services
+and third-party services.
+In addition, E.ON generates income from transactions with
+related companies through the delivery of gas and electricity to
+distributors and municipal entities, especially municipal utilities.
+The relationships with these entities do not generally differ from
+In 2018, revenues of €820 million (2017: €2,325 million),
+interest income of €0 million (2017: €2 million) as well as other
+income of €100 million (2017: €94 million), other expenses of
+€1,957 million (2017: €6,202 million) and interest expenses of
+€6 million (2017: €5 million) were generated with the companies
+of the Uniper Group for half a year until their sale to Fortum.
+20
+Other related parties
+34
+20
+Associated companies
+54
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2018, include €48 million (2017: €104 million) in trade
+payables and shareholder loans to operators of jointly-owned
+nuclear power plants. These shareholder loans bear interest
+based on Euribor at 1.0 percent (2017: 1.0 percent) and have
+no fixed maturity. E.ON continues to have in place with these
+power plants a cost-transfer agreement and a cost-plus-fee
+agreement for the procurement of electricity. The settlement of
+such liabilities occurs mainly through clearing accounts.
+In addition, the mutual insurance fund Versorgungskasse Energie
+VVaG i.L. ("VKE i.L."), which is currently in liquidation, still man-
+ages financial assets totaling €78.8 million at year-end 2018
+(2017: €1.1 billion). The shares of VKE i.L.'s guarantee fund
+assets attributable to the E.ON Group were transferred to the
+CTA (see Note 24) as an equivalent follow-on solution in the first
+half of 2018. Non-consolidated shares of VKE i.L.'s guarantee
+fund assets were correspondingly transferred to the respective
+follow-on solutions of the member companies of VKE i.L. con-
+cerned and thus deconsolidated.
+These financial assets are invested on the basis of an accumula-
+tion strategy (total-return approach), with investments broadly
+diversified across the various asset classes, for example the
+money market, bond and equity asset classes, as well as alter-
+native asset classes like real estate. The majority of the assets are
+held in investment funds managed by external fund managers.
+Corporate Asset Management at E.ON SE, which is part of the
+Company's Finance Department, is responsible for continuous
+monitoring of overall risks and those concerning individual fund
+managers. The three-month VaR with a 98-percent confidence
+interval for these financial assets was €54 million (2017:
+€38 million).
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 25) and cash investments, financial investments totaling
+€1.4 billion (2017: €3.3 billion) were held predominantly by
+German E.ON Group companies as of December 31, 2018.
+As of December 31, 2018, the E.ON Group primarily held elec-
+tricity and gas derivatives with a nominal value of €4,076 million
+(2017: €3,958 million).
+A key foundation of the commodity risk management system is
+the Group-wide Commodity Risk Policy and the corresponding
+internal policies of the units. These specify the control principles
+for commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+The risk policy was updated at the beginning of 2017 with a focus
+on the Renewables and Preussen Elektra electricity generation
+business and the regional distribution business. The central
+market-oriented business approach was replaced by decentral-
+ized commodity risk management with regional market access.
+Commodity exposures and risks are reported across the Group
+on a monthly basis to the members of the Risk Committee.
+Credit Risk Management
+In order to minimize credit risk arising from operating activities
+and from the use of financial instruments, the Company enters
+into transactions only with counterparties that satisfy the Com-
+pany's internally established minimum requirements. Maxi-
+mum credit risk limits are set on the basis of internal and (where
+available) external credit ratings. The setting and monitoring of
+credit limits is subject to certain minimum requirements, which
+are based on Group-wide credit risk management guidelines.
+Long-term operating contracts and asset management trans-
+actions are not comprehensively included in this process. They
+are monitored separately at the level of the responsible units.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature of
+the operating activities and the credit risk, additional credit risk
+monitoring and controls are performed both by the units and
+by Corporate Headquarters. Monthly reports on credit limits,
+including their utilization, are submitted to the Risk Committee.
+Intensive, standardized monitoring of quantitative and qualita-
+tive early-warning indicators, as well as close monitoring of
+the credit quality of counterparties, enable E.ON to act early in
+order to minimize risk.
+To the extent possible, pledges of collateral are negotiated with
+counterparties for the purpose of reducing credit risk. Accepted
+as collateral are guarantees issued by the respective parent
+companies or evidence of profit and loss pooling agreements in
+combination with letters of awareness. To a lesser extent, the
+Company also requires bank guarantees and deposits of cash and
+securities as collateral to reduce credit risk. Risk-management
+collateral was accepted in the amount of €1,301 million.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+207
+The levels and details of financial assets received as collateral
+are described in more detail in Notes 18 and 26.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements.
+There is no credit risk with respect to the exchange-traded for-
+ward and option contracts with an aggregate nominal value of
+€630 million as of December 31, 2018 (2017: €189 million).
+For the remaining financial instruments, the maximum risk of
+default is equal to their carrying amounts.
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest money
+at leading local banks. Standardized credit assessment and
+limit-setting is complemented by daily monitoring of CDS levels
+at the banks and at other significant counterparties.
+Asset Management
+20
+206
+Provisions
+430
+6,398
+1
+4
+Joint ventures
+2,112
+Associated companies
+6,723
+2,496
+Expenses
+144
+Other related parties
+Other related parties
+Joint ventures
+2,723
+1,224
+Associated companies
+2,874
+1,379
+Income
+2017
+2018
+11
+380
+324
+Receivables
+Other related parties
+32
+15
+Joint ventures
+1,250
+568
+Associated companies
+1,671
+1,013
+Liabilities
+224
+205
+Other related parties
+1
+3
+Joint ventures
+643
+166
+Associated companies
+868
+374
+389
+Notes
+Due to the decentralized governance approach and the primary
+focus on procurement and purely hedging transactions, the
+allocation of risk capital is no longer necessary. The processes
+and operational management models within the trading system
+are monitored by the local market risk teams and centrally
+managed by the Risk Management department. At the end of
+2018, the open position from the procurement on the markets
+in Germany, the U.K., the Czech Republic, Sweden, Romania
+and Hungary for the reporting period from 2019 to 2021 was
+not more than 2,400 GWh per commodity in each case. The
+biggest drivers primarily relate to the special market conditions
+in Romania, where hedging activities are carried out within the
+approved commodity hedging strategy.
+Since the spinoff of Uniper, E.ON has established procurement
+capabilities for its sales business and thus ensured market access
+for E.ON's remaining energy production. In the normal course
+of business of the underlying energy production and retail sales
+activities, E.ON's individual management units are exposed to
+uncertain commodity market prices, which impacts operating
+gains and costs. All external trading on commodity markets
+must be related to reducing open commodity positions and be
+undertaken in strict accordance with approved commodity
+hedging strategies.
+1 The item Other includes currency translation differences.
+There were no significant changes in valuation allowances in
+2018 for other financial assets measured at amortized cost or at
+fair value through other comprehensive income, or for receivables
+from finance leases.
+Not past-due
+Past-due by
+up to 30 days
+31 to 60 days
+1,923
+31
+388
+109
+Lifetime
+ECL trade
+receivables
+129
+47
+6
+61 to 90 days
+21
+4
+91 to 180 days
+38
+8
+more than 180 days
+5
+Gross carry-
+ing amount
+€ in millions
+-737
+-66
+Balance as of January 1
+-803
+-794
+Change in scope of consolidation
+The default risks for trade receivables for which no rating infor-
+mation is available and the amount of expected credit losses
+over the remaining term are shown in the following matrix for
+each maturity class:
+Net additions/disposals
+150
+187
+Changes in expected credit losses (stage 1
+and stage 2)
+17
+Change in incurred losses (stage 3)
+-177
+-137
+Credit Risk Exposure for Trade Receivables for Which No
+Rating Information Is Available
+Other¹
+8
+7
+Balance as of December 31
+-805
+153
+86
+Total
+2,311
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+Because it holds interests in businesses outside of the euro area,
+currency translation risks arise within the E.ON Group. Fluctua-
+tions in exchange rates produce accounting effects attributable
+to the translation of the balance sheet and income statement
+items of the foreign consolidated Group companies included in
+the Consolidated Financial Statements. Translation risks are
+hedged through borrowing in the corresponding local currency,
+which may also include shareholder loans in foreign currency.
+In addition, derivative and primary financial instruments are
+employed as needed. The hedges qualify for hedge accounting
+under IFRS as hedges of net investments in foreign operations.
+The Group's translation risks are reviewed at regular intervals
+and the level of hedging is adjusted whenever necessary. The
+respective debt factor, net assets and the enterprise value
+denominated in the foreign currency are the principal criteria
+governing the level of hedging.
+The E.ON Group is also exposed to operating and financial trans-
+action risks attributable to foreign currency transactions. The
+subsidiaries are responsible for controlling their operating cur-
+rency risks. E.ON SE coordinates hedging throughout the Group
+and makes use of external derivatives as needed.
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated both
+by external financing in a variety of foreign currencies, and by
+shareholder loans from within the Group denominated in foreign
+currency. Financial transaction risks are generally fully hedged.
+The one-day value-at-risk (99 percent confidence) from the
+translation of deposits and borrowings denominated in foreign
+currency, plus foreign-exchange derivatives, was €67 million
+as of December 31, 2018 (2017: €100 million) and resulted
+primarily from the positions in British pounds, US dollars and
+Swedish kronor.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+205
+Interest Risk Management
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities. Positions based on fixed interest rates, on the other
+hand, are subject to changes in fair value resulting from the
+volatility of market rates. E.ON seeks a specific mix of fixed-
+interest and floating-rate debt over time. This is influenced,
+among other factors, by the type of business model, existing
+liabilities as well as the regulatory framework in which E.ON
+operates. To manage the interest rate position, several instru-
+ments, including derivatives, are deployed.
+With interest rate derivatives included, the share of financial
+liabilities with floating interest rates was 0 percent as of Decem-
+ber 31, 2018 (2017: 0 percent). Under otherwise unchanged
+circumstances, the volume of financial liabilities with fixed inter-
+est rates, which amounted to €8.6 billion at year-end 2018,
+would decline to €7.2 billion in 2019 and €7.2 billion in 2020.
+The effective interest rate duration of the financial liabilities,
+including interest rate derivatives, was 13.5 years as of Decem-
+ber 31, 2018 (2017: 12.0 years). The volume-weighted average
+interest rate of the financial liabilities, including interest rate
+derivatives, was 5.3 percent as of December 31, 2018 (2017:
+5.4 percent).
+As of December 31, 2018, the E.ON Group held interest rate
+derivatives with a nominal value of €4,495 million (2017:
+€4,533 million).
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for internal
+risk controlling and reflects the economic position of the E.ON
+Group. A one-percentage-point upward or downward change in
+interest rates (across all currencies) would raise or lower interest
+charges by ±€8.0 million (2017: ±€0 million) in the subsequent
+fiscal year.
+Commodity Price Risk Management
+The E.ON portfolio of physical assets, long-term contracts
+and end-customer sales is exposed to substantial risks from
+fluctuations in commodity prices. The principal commodity
+prices to which E.ON is exposed relate to electricity, gas and
+emission certificates.
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the value
+of the portfolio while reducing the potential negative deviation
+from target EBIT.
+Foreign Exchange Risk Management
+-794
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from profit-at-risk ("PaR"),
+value-at-risk ("VaR") and sensitivity analyses are "forward-
+looking statements" that involve risks and uncertainties. Actual
+results could differ materially from those projected due to
+actual, unforeseeable developments in the global financial mar-
+kets. The methods used by the Company to analyze risks should
+not be considered forecasts of future events or losses. For
+example, E.ON faces certain risks that are either non-financial
+or non-quantifiable. Such risks principally include country risk,
+operational risk, regulatory risk and legal risk, which are not
+represented in the following analyses.
+3. Credit Risks
+140
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+203
+Risk Management
+Principles
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within
+the confines of the Group's overall guidelines. To ensure efficient
+risk management at the E.ON Group, the Trading (Front Office),
+Financial Controlling (Middle Office) and Financial Settlement
+(Back Office) departments are organized as strictly separate units.
+Risk controlling and reporting in the areas of interest rates,
+currencies and credit area for banks and liquidity management
+is performed by the Financial Controlling department, while risk
+controlling and reporting in the area of commodities and in the
+credit area for industrial enterprises is performed at Group level
+by a separate department.
+E.ON uses a Group-wide treasury, risk management and report-
+ing system. This system is a standard information technology
+solution that is fully integrated and is continuously updated.
+The system is designed to provide for the analysis and monitor-
+ing of the E.ON Group's exposure to liquidity, foreign exchange
+and interest risks. On a Group-wide basis, Financial Controlling
+monitors and controls credit risks for banks, and Risk Manage-
+ment monitors and controls industrial enterprises. These activ-
+ities are carried out using a uniform standard software package.
+Separate Risk Committees are responsible for the maintenance
+and further development of the strategy set by the Management
+Board of E.ON SE with regard to commodity, treasury and credit
+risk management policies.
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON consist
+of ensuring ability to pay at all times, the timely satisfaction of
+contractual payment obligations and the optimization of costs
+within the E.ON Group.
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+E.ON SE determines the Group's financing requirements on the
+basis of short- and medium-term liquidity planning. The financing
+of the Group is controlled and implemented on a forward-looking
+basis in accordance with the planned liquidity requirement or
+surplus. Relevant planning factors taken into consideration include
+operating cash flow, capital expenditures, divestments, margin
+payments and the maturity of bonds and commercial paper.
+2. Price Risks
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest
+rates, commodities and asset management. These risks create
+volatility in earnings, equity, debt and cash flows from period
+to period. E.ON has developed a variety of strategies to limit or
+eliminate these risks, including the use of derivative financial
+instruments, among others.
+Notes
+204
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group to
+identify, measure and control credit risks.
+1,749
+€ in millions
+8,801
+718
+11,901
+Cash outflows for trade payables and other operating liabilities
+3
+1
+7
+4,136
+Other operating liabilities
+100
+270
+69
+17
+2,737
+921
+642
+5,948
+Derivatives (with/without hedging relationships)
+1,800
+Trade payables
+9,747
+3,215
+1,493
+3,250
+Cash outflows for financial liabilities
+8
+2
+2
+18
+949
+1,192
+2,840
+Cash outflows for liabilities within the scope of IFRS 7
+1,739
+Put option liabilities under IAS 32
+The net gains and losses in the fair value through profit or loss
+measurement category encompass both the changes in fair value
+of equity instruments, from derivative financial instruments and
+gains and losses on realization. The changes in market value in
+2018 were primarily influenced by the derecognition in income
+of derivative financial instruments related to the sale of Uniper
+(see Note 4).
+In addition to impairments of financial assets, net gains and
+losses in the amortized cost category are due primarily to interest
+income from financial assets and liabilities and effects from the
+currency translation of financial liabilities.
+92
+65
+-25
+-659
+711
+2018
+€ in millions
+Net Gains and Losses by Category
+Total
+Fair value through OCI
+Fair value through P&L
+Financial liabilities amortized cost
+Financial assets amortized cost
+246
+€ in millions
+The net gains and losses from financial instruments by IFRS 9
+(prior year: by IAS 39) category are shown in the following
+table:
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+For financial liabilities that bear floating interest rates, the rates
+that were fixed on the balance sheet date are used to calculate
+future interest payments for subsequent periods as well. Finan-
+cial liabilities that can be terminated at any time are assigned
+to the earliest maturity band in the same way as put options that
+are exercisable at any time. All covenants were complied with
+during 2018.
+Financial guarantees with a total nominal volume of €8 million
+(2017: €8 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees. E.ON has
+recognized a liability for this in the amount of €8 million (2017:
+€8 million).
+201
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+12,587
+4,407
+2,211
+Net Gains and Losses by Category
+100
+15,151
+56
+728
+2,614
+Put option liabilities under IAS 32
+20
+128
+180
+Other operating liabilities
+4,512
+2
+1
+2
+Cash outflows for trade payables and other operating liabilities
+9,573
+690
+909
+2,662
+Cash outflows for liabilities within the scope of IFRS 7
+11,585
+2,512
+560
+2,777
+3,387
+1,654
+86
+102
+5
+13
+42
+52
+45
+115
+255
+436
+23
+1
+1
+8
+2,012
+1,822
+1,868
+9,099
+Trade payables
+Derivatives (with/without hedging relationships)
+11,761
+46
+€ in millions
+Cash
+outflows
+2018
+2,160
+Cash
+outflows
+2019
+1,369
+Cash
+outflows
+2020-2022
+Cash
+outflows
+from 2023
+3,103
+Commercial paper
+9,469
+Cash Flow Analysis as of December 31, 2017
+4
+10
+30
+Liabilities from finance leases
+Other financial liabilities
+Financial guarantees
+Bank loans/Liabilities to banks
+Bonds
+77
+46.3
+100.0
+Citigen (London) Limited, GB, Coventry¹
+100.0
+Biogas Ducherow GmbH, DE, Ducherow²
+80.0
+Clinton Wind, LLC, US, Wilmington²
+100.0
+Biogas Steyerberg GmbH, DE, Steyerberg²
+100.0
+Colbeck's Corner, LLC, US, Wilmington¹
+100.0
+Biomasseverwertung Straubing GmbH, DE, Straubing²
+100.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+40.0
+Bioenergie Merzig GmbH, DE, Merzig²
+Colbeck's Corner Holdco, LLC, US, Wilmington²
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+100.0
+33.3
+Blackbeard Solar, LLC, US, Wilmington²
+100.0
+Cordova Wind Farm, LLC, US, Wilmington²
+100.0
+Blackbriar Battery, LLC, US, Wilmington²
+100.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf²
+100.0
+CHN Special Projects Limited, GB, Coventry²
+90.0
+87.8
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+an der Kerntechnische Hilfsdienst GmbH GbR, DE,
+Eggenstein-Leopoldshofen
+100.0
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+Beteiligungsgesellschaft der Energieversorgungsunternehmen
+100.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+100.0
+Cranell Holdco, LLC, US, Wilmington¹
+Champion Wind Farm, LLC, US, Wilmington¹
+100.0
+Champion WF Holdco, LLC, US, Wilmington¹
+51.0
+25.1
+Charge-ON GmbH, DE, Essen¹
+100.0
+40.7
+CHN Contractors Limited, GB, Coventry²
+100.0
+46.5
+CHN Electrical Services Limited, GB, Coventry2
+CHN Group Ltd, GB, Coventry²
+100.0
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+100.0
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld6
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz
+100.0
+Stake (%)
+100.0
+100.0
+97.5
+-153
+-275
+-18
+-11
+2,989
+3,074
+44
+24
+53
+55
+E.ON Business Services laşi S.A., RO, laşi²
+-17
+65
+67
+-1
+-1
+320
+277
+657
+1,037
+601
+199
+-7,357
+1,225
+15
+-113
+Deutsche Gesellschaft für Wiederaufarbeitung von
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben
+Name, location
+Stake (%)
+Cranell Wind Farm, LLC, US, Wilmington¹
+100.0
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+100.0
+Cremlinger Energie GmbH, DE, Cremlingen
+49.0
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+25.6
+Cuculus GmbH, DE, Ilmenau6
+20.4
+BO Baltic Offshore GmbH, DE, Hamburg²
+98.0
+Dampfversorgung Ostsee-Molkerei GmbH, DE, Wismar6
+50.0
+Boiling Springs Wind Farm, LLC, US, Wilmington²
+Broken Spoke Solar, LLC, US, Wilmington²
+Bruenning's Breeze Holdco, LLC, US, Wilmington²
+Bruenning's Breeze Wind Farm, LLC, US, Wilmington¹
+100.0
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+100.0
+100.0
+Delgaz Grid S.A., RO, Târgu Mureş¹
+56.5
+100.0
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. 4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2018)
+Name, location
+218
+Blackjack Creek Wind Farm, LLC, US, Wilmington²
+Celle-Uelzen Netz GmbH, DE, Celle¹
+Stake (%)
+Beteiligung N2 GmbH, DE, Helmstedt²
+Anacacho Holdco, LLC, US, Wilmington²
+49.0
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide
+100.0
+Amrum-Offshore West GmbH, DE, Düsseldorf¹
+50.0
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg
+100.0
+100.0
+50.0
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg
+30.0
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+50.0
+Aabenraa- og Tønderegnens Biogas ApS, DK, Bevtoft
+25.0
+Alcamo II S.r.l., IT, Milan²
+Abfallwirtschaft Schleswig-Flensburg GmbH, DE, Schleswig6
+49.0
+Anacacho Wind Farm, LLC, US, Wilmington¹
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+33.3
+61.5
+Avacon AG, DE, Helmstedt¹
+39.0
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr6
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide6
+0.0
+AV Packaging GmbH, DE, Munich¹
+49.0
+DE, Borgstedt
+100.0
+Aurum Solaris 4 GmbH & Co. KG, DE, Kassel²
+100.0
+ANCO Sp. z o.o., PL, Jarocin²
+49.0
+Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst
+Abfallwirtschaftsgesellschaft Rendsburg-Eckernförde mbH,
+100.0
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg
+100.0
+49.0
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck6
+100 Kilowatt Naperőmű Delta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+49.0
+49.0
+Abwasserentsorgung Schladen GmbH, DE, Schladen6
+Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+100 Kilowatt Naperőmű Béta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+100 Kilowatt Naperőmű Alfa Korlátolt Felelősségű Társaság,
+HU, Budapest²
+49.0
+Abwasserentsorgung Marne-Land GmbH, DE,
+Diekhusen-Fahrstedt6
+100.0
+:agile accelerator GmbH, DE, Düsseldorf²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+(as of December 31, 2018)
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+Eddelak GmbH, DE, St. Michaelisdonn
+100.0
+25.1
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+100 Kilowatt Naperőmű Kappa Korlátolt Felelősségű Társaság,
+HU, Budapest²
+49.0
+Abwassergesellschaft Gehrden mbH, DE, Gehrden
+100.0
+100 Kilowatt Naperőmű Gamma Korlátolt Felelősségű Társaság,
+HU, Budapest²
+49.0
+Bardowick6
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+100.0
+100 Kilowatt Naperőmű Éta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+49.0
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick
+100.0
+49.0
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+100 Kilowatt Naperőmű Epszilon Korlátolt Felelősségű Társaság,
+HU, Budapest²
+25.0
+100.0
+49.0
+Avacon Connect GmbH, DE, Laatzen¹
+100.0
+100.0
+Bayernwerk Portfolio GmbH & Co. KG, DE, Regensburg²
+20.0
+Bützower Wärme GmbH, DE, Bützow6
+100.0
+Bayernwerk Netz GmbH, DE, Regensburg¹
+100.0
+Bursjöliden Vind AB, SE, Malmö²
+100.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+33.3
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth
+100.0
+100.0
+Brunnshög Energi AB, SE, Malmö²
+100.0
+Bayernwerk Energietechnik GmbH, DE, Regensburg²
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+Cameleon B.V., NL, Rotterdam²
+Stake (%)
+100.0
+100.0
+100.0
+100.0
+Cattleman Wind Farm, LLC, US, Wilmington²
+Cattleman Wind Farm II, LLC, US, Wilmington²
+100.0
+Beteiligung N1 GmbH, DE, Helmstedt²
+100.0
+Beteiligung H2 GmbH, DE, Helmstedt²
+100.0
+Cardinal Wind Farm, LLC, US, Wilmington²
+100.0
+Beteiligung H1 GmbH, DE, Helmstedt²
+100.0
+Camellia Solar Member LLC, US, Wilmington²
+100.0
+Bayernwerk Regio Energie GmbH, DE, Regensburg²
+100.0
+Camellia Solar LLC, US, Wilmington²
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+100.0
+Name, location
+Name, location
+49.0
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog
+49.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel
+100.0
+Avon Energy Partners Holdings, GB, Coventry²
+49.0
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede
+100.0
+Avacon Netz GmbH, DE, Helmstedt¹
+27.0
+100.0
+Avacon Natur GmbH, DE, Sarstedt¹
+49.0
+100.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+49.0
+AWE-Arkona-Windpark Entwicklungs-GmbH, DE, Hamburg4
+BAG Port 1 GmbH, DE, Regensburg²
+14
+50.0
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+217
+(as of December 31, 2018)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11..4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+20.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+100.0
+Bayernwerk AG, DE, Regensburg¹
+25.0
+100.0
+154
+Reclassified businesses at Renewables
+-81
+E.ON Business Services Hungary Kft., HU, Budapest²
+100.0
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+E.ON Connecting Energies SAS, FR, Levallois-Perret²
+100.0
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+216
+E.ON Business Services GmbH, DE, Hanover¹
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Notes
+215
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+E.ON Stock
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+(35) List of Shareholdings Pursuant to Section 313 (2) HGB
+100.0
+E.ON Connecting Energies Italia S.r.l., IT, Milan¹
+100.0
+E.ON Climate & Renewables UK Robin Rigg West Limited, GB,
+Coventry¹
+100.0
+E.ON Beteiligungen GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Bioerdgas GmbH, DE, Essen¹
+100.0
+E.ON Climate & Renewables UK Wind Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Zone Six Limited, GB, Coventry¹
+100.0
+100.0
+100.0
+E.ON Climate & Renewables Windparks Deutschland GmbH,
+DE, Essen²
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca¹
+100.0
+E.ON Connecting Energies GmbH, DE, Essen¹
+100.0
+E.ON Business Services Czech Republic s.r.o., CZ,
+České Budějovice²
+Additional information about the members of the Management
+Board is provided on page 244.
+The Management Board's compensation structure and the indi-
+vidual amounts for each member of the Management Board as
+well as additional disclosures on the amounts are presented on
+pages 82 through 95 in the Compensation Report.
+As in 2017, there were no loans to members of the Management
+Board in 2018.
+Total payments to former members of the Management Board
+and their beneficiaries amounted to €12.5 million (2017:
+€12.4 million). Provisions of €155.8 million (2017: €159 million)
+have been established for the pension obligations to former
+members of the Management Board and their beneficiaries.
+9,557 10,555
+equipment
+Property, plant and
+209 30,253 37,965
+54 2,162 2,243
+280
+6,224 6,278
+146 1,130 1,088
+2,123
+2,232
+145
+7,360
+395
+13,651 21,995 7,866
+600
+560
+287
+Intangible assets
+location of seller
+External sales by
+211 30,253 37,965
+283
+6,551
+6,666
+620 3,708
+100.0
+4,593
+2,307 18,057 24,766
+In 2018, the members of the Management Board were granted
+second-tranche virtual shares under the E.ON Performance
+Plan (2017: first tranche of the E.ON Performance Plan) with
+a value of €4.9 million (2017: €4.4 million) and a total number
+of shares of 760,078 (2017: 751,857).
+Total compensation of the Management Board in 2018 amounted
+to €15.9 million (2017: €14 million). This consisted of base
+salary, bonuses, other compensation elements and share-based
+payments.
+Management Board
+Additional information about the members of the Supervisory
+Board is provided on pages 242 and 243.
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are
+presented on page 96 and 97 in the Compensation Report.
+As in 2017 there were no loans to members of the Supervisory
+Board in 2018.
+Total remuneration to members of the Supervisory Board in
+2018 amounted to €4.1 million (2017: €4.5 million).
+Supervisory Board
+(34) Compensation of Supervisory Board and
+Management Board
+E.ON's customer structure resulted in a focus on the Germany
+region. Aside from that, there was no major concentration in
+any given geographical region or business area. Due to the large
+number of customers the Company serves and the variety of
+its business activities, there are no individual customers whose
+business volume is material compared with the Company's total
+business volume.
+280 2,603 3,547
+1,745 2,054
+90
+71
+1,123
+787
+Companies accounted for
+under the equity method
+4,679 3,287 3,517
+E.ON Bayern Verwaltungs AG, DE, Essen²
+100.0
+E.ON Asset Management GmbH & Co. EEA KG, DE, Grünwald 1,8
+E WIE EINFACH GmbH, DE, Cologne¹
+100.0
+E.ON Climate & Renewables France, FR, Levallois-Perret²
+E.ON Climate & Renewables GmbH, DE, Essen¹
+100.0
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+E.ON Climate & Renewables Italia S.r.l., IT, Milan¹
+100.0
+E.DIS AG, DE, Fürstenwalde/Spree¹
+67.0
+E.DIS Bau- und Energieservice GmbH, DE, Fürstenwalde/Spree²
+100.0
+E.ON Climate & Renewables North America, LLC, US, Wilmington¹
+E.ON Climate & Renewables Services GmbH, DE, Essen²
+100.0
+100.0
+E.DIS Netz GmbH, DE, Fürstenwalde/Spree¹
+100.0
+100.0
+Dutchdelta Finance S.à r.l., LU, Luxembourg¹
+E.ON Climate & Renewables Canada Ltd., CA, Saint John¹
+42.5
+DOTI Deutsche Offshore-Testfeld- und Infrastruktur-GmbH &
+Co. KG, DE, Oldenburg5
+E.ON Business Services Regensburg GmbH, DE, Regensburg 1,8
+E.ON Business Services Sverige AB, SE, Malmö²
+100.0
+100.0
+26.3
+DOTI Management GmbH, DE, Oldenburg6
+26.3
+E.ON Carbon Sourcing North America LLC, US, Wilmington²
+E.ON CDNE. S.p.A., IT, Milan²
+100.0
+81.1
+DOTTO MORCONE S.r.l., IT, Milan²
+100.0
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+100.0
+Drivango GmbH, DE, Düsseldorf²
+100.0
+100.0
+2,194
+e.discom Telekommunikation GmbH, DE, Rostock²
+E.ON Climate & Renewables UK Biomass Limited, GB, Coventry¹
+E.ON Climate & Renewables UK Blyth Limited, GB, Coventry¹
+100.0
+E.ON Climate & Renewables UK London Array Limited, GB,
+Coventry¹
+100.0
+E.ON 9. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Climate & Renewables UK Offshore Wind Limited, GB,
+Coventry¹
+100.0
+E.ON 11. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Climate & Renewables UK Operations Limited, GB, Coventry¹
+100.0
+E.ON 12. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Agile Nordic AB, SE, Malmö²
+100.0
+E.ON Climate & Renewables UK Robin Rigg East Limited, GB,
+Coventry¹
+100.0
+E.ON 8. Verwaltungs GmbH, DE, Essen²
+100.0
+100.0
+100.0
+100.0
+100.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+100.0
+e.distherm Wärmedienstleistungen GmbH, DE, Potsdam¹
+100.0
+E.ON Climate & Renewables UK Developments Limited, GB,
+Coventry¹
+100.0
+e.kundenservice Netz GmbH, DE, Hamburg¹
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+100.0
+E.ON Climate & Renewables UK Humber Wind Limited, GB,
+Coventry¹
+100.0
+E.ON 6. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Climate & Renewables UK Limited, GB, Coventry¹
+E.ON 7. Verwaltungs GmbH, DE, Essen²
+-328
+2,238
+13,359 21,953
+Net book gains in 2018 were significantly above the prior-year
+level. The increase resulted primarily from the disposal of our
+Uniper shareholding, Hamburg Netz, and E.ON Gas Sverige. By
+contrast, the IPO of Enerjisa Enerji in Turkey resulted in an over-
+all loss. The prior-year figure also included income from the
+sale of an interest in Customer Solutions in Sweden. In addition,
+income from the disposal of securities was significantly lower
+than in the prior year.
+In addition, earnings from discontinued operations in the Renew-
+ables segment, adjusted for non-operating effects, are also
+included in adjusted EBIT. Pursuant to IFRS 5, equity carried
+forward from investments in discontinued operations is to be
+terminated. However, this will be continued within the frame-
+work of internal management and will then also be included in
+adjusted EBIT. As with the treatment of the effects of the equity
+carried forward, depreciation in discontinued operations, which
+is generally to be deferred in accordance with IFRS 5, is continued
+and carried forward in adjusted EBIT.
+The non-operating earnings effects for which EBIT is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market of derivative
+financial instruments used for hedging and, where material,
+book gains/losses, certain restructuring expenses, impairment
+charges and reversals recognized in the context of impairment
+tests on non-current assets, on equity investments in affiliated or
+associated companies and on goodwill, and other contributions
+to non-operating earnings. The refund of the nuclear-fuel tax
+was also reported in non-operating earnings in the prior year.
+In addition, since the 2017 fiscal year, effects from the valuation
+of certain provisions on the balance sheet date are disclosed
+in non-operating earnings. The change in recognition results in
+improved presentation of sustainable earnings power.
+Operating earnings also include income from investment subsi-
+dies for which liabilities are recognized.
+Unadjusted EBIT represents the Group's income/loss reported
+in accordance with IFRS before financial results and income
+taxes, taking into account the net income/expense from equity
+investments. To improve its meaningfulness as an indicator of
+the sustainable earnings power of the E.ON Group's business,
+unadjusted EBIT is adjusted for certain non-operating effects.
+The E.ON Management Board is convinced that adjusted EBIT is
+the most suitable key figure for assessing operating performance
+because it presents a business's operating earnings independently
+of non-operating factors, interest, and taxes.
+Adjusted EBIT, a measure of earnings before interest and taxes
+("EBIT") adjusted to exclude non-operating effects, is used at
+E.ON for purposes of internal management control and as the
+most important indicator of a business's sustainable earnings
+power.
+Restructuring expenditures decreased substantially year on year.
+Among other factors, the decline is attributable to significantly
+lower expenses in connection with Group-wide cost reduction
+programs. In contrast, expenses in connection with the planned
+acquisition of innogy were included for the first time in 2018.
+Adjusted EBIT
+Notes
+The equity result in the Renewables segment, which is reported
+in the segment information, is fully attributable to discontinued
+operations.
+-3,509
+2,295
+operations
+Operating cash flow from continuing
+-557
+212
+Marking to market of derivatives used to protect our operating
+business from price fluctuations, as well as other derivatives,
+resulted in a positive effect of €610 million as of December 31,
+2018 (previous year: -€954 million). The positive value in 2018
+is mainly attributable to the derecognition of derivative financial
+CEO Letter
+Report of the Supervisory Board
+4,932
+3,953
+Income/Loss from equity investments
+Income/Loss from continuing operations before financial results and income taxes
+2017
+2018
+€ in millions
+Reconciliation of Income before Financial Results and Income Taxes
+The following table shows the reconciliation of earnings before
+interest and taxes to adjusted EBIT or adjusted EBITDA:
+The significant decrease in other non-operating earnings is pri-
+marily attributable to the refund of the nuclear-fuel tax included
+in the previous year. The equity earnings contribution of Uniper
+is also included in 2017. Effective the end of September 2017,
+we classify Uniper as an asset held for sale. The equity method
+has not been used since then.
+In the 2018 reporting period, impairments were recognized
+in particular in the areas of Customer Solutions in the United
+Kingdom and E.ON Connecting Energies. In the prior year,
+impairments were incurred primarily in the UK Customer Solu-
+tions segment.
+instruments in connection with contractual rights and obligations
+from the sale of the Uniper shares in the second quarter. As in
+the previous year, other effects arose from hedging price fluctu-
+ations, particularly in Customer Solutions.
+213
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+-558
+2,096
+2,487
+-1,212
+Reconciliation of Investments
+2017
+2018
+€ in millions
+Reconciliation of Operating Cash Flow
+The following table shows the reconciliation in segment reporting
+of the investments shown in segment reporting to the investments
+of continuing operations. The latter correspond to payments for
+investments reported in the Consolidated Statements of Cash
+Flows.
+The following table shows the reconciliation of operating cash
+flow before interest and taxes to operating cash flow from
+continuing operations:
+3,308
+3,523
+1
+-3
+53
+86
+-2,235
+4,087
+6
+1
+Operating cash flow before interest and
+44
+taxes
+-2,235
+-1,036
+Reclassified businesses at Renewables
+Investments from continuing operations
+-2,952
+2,853
+Operating cash flow
+-483
+-628
+Tax payments
+3,308
+3,523
+Investments
+-234
+-606
+Interest payments
+2017
+2018
+€ in millions
+4,087
+-5
+EBIT
+Non-operating adjustments
+Geographic Segment Information
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the equity
+method, by geographic area:
+The "Other" item consists in particular of revenues generated
+from services.
+37,965
+30,253
+1,890
+1,829
+5,897
+5,825
+30,178
+22,599
+2017
+2018
+Total
+Other
+Gas
+Electricity
+214
+€ in millions
+Germany
+Sweden
+External sales by
+location of customer
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+€ in millions
+Total
+Other
+Europe (other)
+United Kingdom
+7,707 7,056
+Segment Information by Product
+Additional Entity-Level Disclosures
+Other non-operating earnings
+171
+61
+Impairments (+)/Reversals (-)
+954
+-610
+Market valuation derivatives
+539
+64
+Restructuring/cost-management expenses
+-375
+-857
+-2,293
+-1,521
+4,927
+3,997
+Net book gains/losses
+-179
+External sales by product break down as follows:
+-3,582
+513
+Notes
+Pages 32 and 33 of the Combined Group Management Report
+provide a more detailed explanation of the reconciliation of
+adjusted EBIT to the net income/loss reported in the Consolidated
+Financial Statements.
+4,955
+4,840
+321
+331
+Reclassified businesses of Renewables (scheduled depreciation and amortization, impairments and reversals)
+Adjusted EBITDA
+1,488
+1,475
+Scheduled depreciation and amortization
+72
+45
+Impairments (+)/Reversals (-)
+3,074
+2,989
+Adjusted EBIT
+440
+Reclassified businesses of Renewables (scheduled depreciation)
+E.ON Biofor Sverige AB, SE, Malmö¹
+34
+East-Central Europe/Turkey
+བྷ」༄༅།
+1,030
+74
+1,559
+Investments
+2,429
+703
+ཧྰ༄་། ཛ」
+Operating cash flow before
+-593
+-150
+-158
+-232
+-237
+498
+474
+-591
+530
+Equity-method earnings4
+amortization³
+28
+59
+58
+312
+319
+Sales²
+Adjusted EBIT
+6,243
+989
+1,072
+1,537
+1,719 6,768 7,014
+7,758 7,205 7,601 7,357
+Depreciation and
+14,199
+157
+451
+97
+111
+129
+14
+284
+92
+401
+248
+211
+25
+207
+211
+395
+360
+199||||
+237
+142
+102
+-183
+771
+640
+652
+605
+341
+345
+454
+371
+དྷ།
+ཙིཚི།
+ཥྭ」༄། 」ཋ」
+-30
+-95
+-103
+-183
+120
+977
+939
+11
+The segment comprises sales activities and customer solutions
+in the U.K.
+Other
+This segment combines sales activities and the corresponding
+Customer Solutions in Sweden, Italy, the Czech Republic, Hungary
+and Romania and E.ON Connecting Energies as well as the
+heating business in Germany.
+Renewables
+The Renewables segment combines the Group's activities for
+the production of wind power plants (onshore and offshore) as
+well as solar farms.
+On March 12, 2018, E.ON SE entered into an agreement with
+RWE AG to acquire the 76.8-percent stake in innogy SE held by
+RWE. The acquisition is to take place within the framework of a
+comprehensive exchange of business activities and investments.
+In this context, E.ON will transfer the majority of its Renewables
+business to RWE. Since June 30, 2018, the transferred business
+has been reported as a discontinued operation in E.ON's consoli-
+dated financial statements in accordance with IFRS 5 (see Note 4
+for further information).
+United Kingdom
+However, until the final transfer to RWE, the activities in the
+Renewables business will continue unchanged. For internal
+management purposes, these activities will therefore continue
+to be fully included in the relevant key performance indicators.
+The presentation of key performance indicators in segment
+reporting therefore also includes the components attributable to
+discontinued operations in the Renewables business. Recon-
+ciliations of these figures to the information in the E.ON Group's
+consolidated income statement and consolidated statement of
+cash flows are provided on pages 210, 211 and 213.
+Non-Core Business comprises the non-strategic activities of the
+E.ON Group. This includes the operation of the German nuclear
+power plants, which are managed by the PreussenElektra oper-
+ating unit, and the electricity generation business in Turkey.
+Corporate Functions/Other
+Corporate Functions/Other contains E.ON SE itself and the
+interests held directly by E.ON SE. Until June 26, 2018, the
+Uniper Group, which was accounted for in the consolidated
+financial statements using the equity method, was also allo-
+cated to this segment. Uniper's earnings were reported under
+non-operating earnings. Additional information regarding the
+Uniper Group is provided in Note 4.
+Notes
+Financial Information by Business Segment¹
+210
+Non-Core Business
+This segment consists of activities that supply our customers in
+Germany with electricity and gas and the distribution of specific
+products and services in areas for improving energy efficiency
+and energy independence.
+Customer Solutions
+Germany
+This segment combines the distribution network activities in
+the Czech Republic, Hungary, Romania, Slovakia and Turkey.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+209
+(33) Segment Reporting
+Segment Information
+Led by its Corporate Headquarters in Essen, Germany, the E.ON
+Group comprises the seven reporting segments described below,
+and the Non-Core Business and Corporate Functions/Other, all
+of which are reported here in accordance with IFRS 8. The com-
+bined segments, which are not separately reportable, in the
+East-Central Europe/Turkey Energy Networks unit and the Cus-
+tomer Solutions Other unit are of subordinate importance and
+have similar economic characteristics with respect to customer
+structure, products and distribution channels.
+In addition, changes were made to segment reporting in 2018.
+The generation business in Turkey is now reported in Non-Core
+Business. Within the Customer Solutions unit, the German heating
+business is no longer reported under Germany, but under Other.
+In addition, costs for the further development of the business with
+new digital products and services as well as innovative projects
+that were previously included under Corporate Functions/Other
+are allocated to the operating units in the Customer Solutions
+unit. The prior-year figures were adjusted accordingly.
+Energy Networks
+Germany
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+Sweden
+This segment comprises the electricity networks businesses in
+Sweden.
+Energy Networks
+¹Because of the changes in our reporting, the prior-year figure was adjusted accordingly.
+Customer Solutions
+Sweden
+12,536
+978
+1,038
+598
+742
+6,648
+4,819
+6,986
+7,147
+7,289
+7,038
+Intersegment sales
+1,424
+1,663
+7,699
+External sales
+2017
+2018
+ECE/Turkey
+Germany Sales
+United Kingdom
+Other
+€ in millions
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+Germany
+2The presentation of our sales in 2018 was substantially affected by the initial application of IFRS 15, "Revenue from Contracts with Customers" (see the commentary in Note 2).
+³Adjusted for non-operating effects.
+interest and taxes
+The following table shows the reconciliation in segment report-
+1,754
+0
+0
+-4,587
+-4,441
+671
+606
+837
+970
+37,965
+30,253
+1
+1
+125
+38
+1,585
+1,399
+767
+784
+1,604
+1,399
+1,585
+644
+4Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in
+income/loss from companies accounted for using the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
+5Operating business including the divisions in the Renewables segment reclassified as discontinued operations in accordance with IFRS 5.
+-113
+-17
+506
+399
+454
+521
+-1,881
+-1,851
+2017
+4
+-72
+-148
+-157
+-331
+-340
+37,965
+-4,586 30,253
+-4,440
+796
+-100
+2018
+-
+2018
+CEO Letter
+37,297
+29,565
+-668
+-688
+2017
+2018
+2017
+2018
+Report of the Supervisory Board
+2017
+37,965
+2018
+E.ON Group
+(continuing operations)
+E.ON Group
+Reclassified businesses
+Sales
+€ in millions
+Reconciliation of Sales
+2017
+ing of operating cash flow before interest and taxes to operating
+cash flow:
+30,253
+E.ON Stock
+at Renewables
+Combined Group Management Report
+Strategy and Objectives
+2018
+2017
+2017
+2017
+2018
+2017
+2018
+E.ON Group5
+2018
+Other
+Generation Turkey
+PreussenElektra
+Renewables5
+Corporate Functions/
+Non-Core Business
+211
+Consolidation
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Name, location
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
+Hohen Neuendorf6
+Magicat Holdco, LLC, US, Wilmington5
+Major Wind Farm, LLC, US, Wilmington²
+March Road Solar, LLC, US, Wilmington²
+Luna Lüneburg GmbH, DE, Lüneburg6
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+Name, location
+SmartSim GmbH, DE, Essen
+Snow Shoe Wind Farm, LLC, US, Wilmington²
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald
+24.9
+100.0
+Stadtwerke Niebüll GmbH, DE, Niebüll6
+Stake (%)
+Söderåsens Bioenergi AB, SE, Malmö²
+49.9
+24.0
+57.0
+100.0
+Maricopa Land Holding, LLC, US, Wilmington²
+Maricopa West Solar PV 2, LLC, US, Wilmington²
+Matrix Control Solutions Limited, GB, Coventry¹
+New Cogen Sp. z o.o., PL, Warsaw²
+100.0
+63.3
+100.0
+Maricopa East Solar PV 2, LLC, US, Wilmington²
+50.1
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+100.0
+Maricopa East Solar PV, LLC, US, Wilmington²
+49.0
+40.0
+49.0
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Helmstedt²
+Netzgesellschaft Syke GmbH, DE, Syke
+100.0
+100.0
+20.0
+49.0
+49.0
+Solar Supply Sweden AB, SE, Karlshamn²
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten
+49.0
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+37.8
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg5
+26.7
+Stadtwerke Tornesch GmbH, DE, Tornesch6
+49.0
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+29.0
+Magdeburg
+Stadtwerke Vilshofen GmbH, DE, Vilshofen
+41.0
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+100.0
+Stadtwerke Wismar GmbH, DE, Wismar
+49.0
+Neustadt a. Rbge.6
+26.7
+Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching6
+39.0
+35.0
+100.0
+Sønderjysk Biogas Bevtoft A/S, DK, Vojens
+50.0
+Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE, Olching
+49.0
+Stadtwerke Parchim GmbH, DE, Parchim
+25.2
+Städtische Betriebswerke Luckenwalde GmbH, DE, Luckenwalde6
+Sparta North, LLC, US, Wilmington²
+Stadtwerke Premnitz GmbH, DE, Premnitz6
+35.0
+Sparta South, LLC, US, Wilmington²
+100.0
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk
+49.0
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+100.0
+100.0
+34.8
+100.0
+49.0
+Nahwärme Ascha GmbH, DE, Ascha²
+90.0
+Offshore-Windpark Delta Nordsee GmbH, DE, Hamburg²
+100.0
+Naranjo Battery, LLC, US, Wilmington²
+100.0
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin²
+OMNI Energy Kft., HU, Kiskunhalas
+50.0
+000 E.ON Connecting Energies, RU, Moscow4
+50.0
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven
+OOO E.ON IT, RU, Moscow²
+100.0
+100.0
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad Münder6
+100.0
+50.0
+MINUS 181 GmbH, DE, Parchim6
+24.9
+100.0
+25.1
+Novo Innovations Limited, GB, Coventry²
+100.0
+Mosoni-Duna Menti Szélerőmű Kft., HU, Budapest²
+Munnsville Wind Farm, LLC, US, Wilmington¹
+100.0
+100.0
+Nysäter Wind AB, SE, Malmö
+20.0
+Munnsville WF Holdco, LLC, US, Wilmington¹
+100.0
+Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee6
+ocean5 Digital Service GmbH, DE, Kiel
+33.9
+Munnsville Investco, LLC, US, Wilmington¹
+49.0
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Oskarshamn Energi AB, SE, Oskarshamn4
+90.0
+Co. Gamma oHG i.L., DE, Grünwald²
+100.0
+Northern Orchard Solar PV, LLC, US, Wilmington²
+MFG Flughafen-Grundstücksverwaltungsgesellschaft mbH &
+100.0
+NordNetz GmbH, DE, Quickborn²
+Midlands Electricity Limited, GB, Coventry²
+100.0
+100.0
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+MEON Pensions GmbH & Co. KG, DE, Grünwald 1,8
+15.5
+Nord Stream AG, CH, Zug5
+100.0
+MEON Verwaltungs GmbH, DE, Grünwald²
+Northern Orchard Solar PV 2, LLC, US, Wilmington²
+100.0
+100.0
+50.0
+Northern Orchard Solar PV 3, LLC, US, Wilmington²
+Barsinghausen
+49.0
+OurGreenCar Sweden AB, SE, Malmö
+30.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden
+49.0
+Owen Prairie Wind Farm, LLC, US, Wilmington²
+100.0
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+49.0
+PannonWatt Energetikai Megoldások Zrt., HU, Győr
+49.9
+Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf6
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE, Giesen
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE,
+Giesen6
+50.0
+49.0
+NIS Norddeutsche Informations-Systeme Gesellschaft mbH,
+DE, Schwentinental²
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Panther Creek I&II Retrofit, LLC, US, Wilmington²
+Panther Creek Solar, LLC, US, Wilmington²
+100.0
+E.ON Energie Odnawialne Sp. z o.o., PL, Szczecin¹
+100.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Energie Dialog GmbH, DE, Potsdam²
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+99.8
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+100.0
+100.0
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen¹,8
+E.ON Human Resources International GmbH, DE, Hanover 1,8
+E.ON Hungária Energetikai Zártkörűen Működő Részvénytársaság,
+HU, Budapest¹
+100.0
+100.0
+100.0
+100.0
+E.ON Energilösningar AB, SE, Malmö¹
+100.0
+E.ON INTERNATIONAL FINANCE B.V., NL, Amsterdam¹
+100.0
+E.ON Energihandel Nordic AB, SE, Malmö¹
+100.0
+E.ON Energie Real Estate Investment GmbH, DE, Munich²
+E.ON Insurance Services GmbH, DE, Essen²
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+E.ON Innovation Hub S.A., RO, Târgu Mureş²
+68.2
+E.ON Energie România S.A., RO, Târgu Mureş¹
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+100.0
+E.ON Energie AG, DE, Düsseldorf¹,8
+100.0
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich²
+E.ON Gas Mobil GmbH, DE, Essen²
+50.0
+EC&R Canada Ltd., CA, Saint John¹
+100.0
+energielösung GmbH, DE, Regensburg²
+100.0
+EC&R Development, LLC, US, Wilmington¹
+EC&R Energy Marketing, LLC, US, Wilmington¹
+EC&R Ft. Huachuca Solar, LLC, US, Wilmington²
+EC&R Grandview Holdco, LLC, US, Wilmington²
+EC&R Investco EPC Mgmt, LLC, US, Wilmington¹
+EC&R Investco Mgmt, LLC, US, Wilmington¹
+EC&R Investco Mgmt II, LLC, US, Wilmington¹
+EC&R Magicat Holdco, LLC, US, Wilmington¹
+100.0
+100.0
+Energienetz Neufahrn/Eching GmbH & Co. KG, DE,
+Neufahrn bei Freising
+49.0
+100.0
+Energienetze Bayern GmbH, DE, Regensburg¹
+100.0
+100.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+100.0
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö¹
+100.0
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE,
+Düsseldorf1,8
+100.0
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Energidistribution AB, SE, Malmö¹
+68.2
+E.ON Gaz Furnizare S.A., RO, Târgu Mureş¹
+100.0
+E.ON Energiatermelő Kft., HU, Budapest¹
+100.0
+E.ON Gasol Sverige AB, SE, Malmö¹
+100.0
+E.ON Energiakereskedelmi Kft., HU, Budapest¹
+100.0
+E.ON Invest GmbH, DE, Grünwald²
+22.7
+100.0
+100.0
+(as of December 31, 2018)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Stella Wind Farm, LLC, US, Wilmington¹
+100.0
+227
+SVO Holding GmbH, DE, Celle¹
+Stillwater Energy Storage, LLC, US, Wilmington²
+100.0
+SVO Vertrieb GmbH, DE, Celle¹
+100.0
+Stockton Solar I, LLC, US, Wilmington²
+100.0
+SWG Glasfaser Netz GmbH, DE, Geesthacht
+50.1
+33.4
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Group Management Report
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel
+26.0
+Neustadt a. Rbge.6
+24.9
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+49.0
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+Stella Holdco, LLC, US, Wilmington²
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+49.4
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen6
+49.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11..4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . "This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+100.0
+Stockton Solar II, LLC, US, Wilmington²
+100.0
+Strom Germering GmbH, DE, Germering2
+99.8
+E.ON Mälarkraft Värme AB, SE, Håbo kommun¹
+100.0
+E.ON Energy Services, LLC, US, Wilmington¹
+100.0
+99.9
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+100.0
+100.0
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+E.ON Energy Installation Services Limited, GB, Coventry¹
+100.0
+E.ON IT UK Limited, GB, Coventry²
+E.ON Energy Projects GmbH, DE, Munich¹
+Notes
+Tech Park Solar, LLC, US, Wilmington¹
+49.0
+90.0
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg6
+SWS Energie GmbH, DE, Stralsund5
+25.1
+49.0
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach
+49.0
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+66.5
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach6
+49.0
+Szombathelyi Erőmű Zrt., HU, Budapest²
+55.0
+Stromnetz Pullach GmbH, DE, Pullach im Isartal²
+100.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely6
+25.0
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i. d. OPf.6
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+100.0
+SEC B Sp. z o.o., PL, Szczecin²
+Panther Creek Wind Farm I&II, LLC, US, Wilmington¹
+E.ON Rhein-Ruhr Werke GmbH, DE, Essen²
+100.0
+E.ON US Corporation, US, Wilmington¹
+100.0
+E.ON Rhein-Ruhr Ausbildungs-GmbH, DE, Essen²
+100.0
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+100.0
+100.0
+E.ON UK Steven's Croft Limited, GB, Coventry²
+100.0
+E.ON RE Investments LLC, US, Wilmington¹
+100.0
+E.ON UK Secretaries Limited, GB, Coventry²
+100.0
+E.ON Real Estate GmbH, DE, Essen²
+E.ON RAG Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+E.ON US Energy LLC, US, Wilmington¹
+E.ON România S.R.L., RO, Târgu Mureş¹
+E.ON Service GmbH, DE, Essen²
+100.0
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Värme Sverige AB, SE, Malmö¹
+100.0
+100.0
+100.0
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf 1,8
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON UK Energy Markets Limited, GB, Coventry¹
+E.ON UK Energy Services Limited, GB, Coventry²
+E.ON UK Heat Limited, GB, Coventry²
+100.0
+E.ON Nutzenergie GmbH i. Gr., DE, Essen²
+100.0
+E.ON North America Finance, LLC, US, Wilmington¹
+100.0
+100.0
+100.0
+100.0
+E.ON UK CoGeneration Limited, GB, Coventry¹
+E.ON UK Directors Limited, GB, Coventry²
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+100.0
+E.ON Norge AS, NO, Stavanger²
+E.ON UK PS Limited, GB, Coventry²
+E.ON Off Grid Solutions GmbH, DE, Düsseldorf²
+E.ON Perspekt GmbH, DE, Düsseldorf²
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON UK Property Services Limited, GB, Coventry²
+100.0
+E.ON Produzione S.p.A., IT, Milan¹
+100.0
+E.ON UK plc, GB, Coventry¹
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry2
+E.ON UK Pension Trustees Limited, GB, Coventry²
+100.0
+E.ON Power Plants Belgium BVBA, BE, Mechelen¹
+70.0
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+E.ON Verwaltungs SE, DE, Düsseldorf¹,8
+100.0
+E.ON Servicii Clienți S.R.L., RO, Târgu Mureş¹
+East Midlands Electricity Share Scheme Trustees Limited, GB,
+Coventry²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+(as of December 31, 2018)
+221
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11..4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+East Midlands Electricity Distribution Holdings, GB, Coventry²
+EMSZET Első Magyar Szélerőmű Korlátolt Felelősségű Társaság,
+HU, Kulcs²
+EBERnetz GmbH & Co. KG, DE, Ebersberg6
+EC&R Asset Management, LLC, US, Wilmington¹
+49.0
+Energie Vorpommern GmbH, DE, Trassenheide
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+50.1
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG
+(ews), DE, Bad Segeberg6
+74.7
+100.0
+35.0
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+100.0
+EBY Immobilien GmbH & Co KG, DE, Regensburg²
+46.7
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+49.0
+EBY Port 1 GmbH, DE, Munich¹,8
+100.0
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+100.0
+E.ON Slovensko, a.s., SK, Bratislava¹
+100.0
+E.ON Wind Norway AB, SE, Malmö²
+100.0
+E.ON Servisní, s.r.o., CZ, České Budějovice¹
+100.0
+E.ON Wind Kårehamn AB, SE, Malmö¹
+100.0
+100.0
+100.0
+E.ON Wind Denmark 2 AB, SE, Malmö²
+100.0
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Wind Denmark AB, SE, Malmö²
+100.0
+E.ON Servicii Tehnice S.R.L., RO, Târgu Mureş¹
+E.ON Wind Service GmbH, DE, Neubukow²
+100.0
+E.ON Software Development SRL, RO, Târgu Mureş²
+100.0
+E.ON Zweiundzwanzigste Verwaltungs GmbH, DE, Düsseldorf¹,8
+E3 Haustechnik GmbH, DE, Magdeburg²
+100.0
+E.ON Telco, s.r.o., CZ, České Budějovice²
+100.0
+E.ON Sverige AB, SE, Malmö¹
+100.0
+E.ON Wind Sweden AB, SE, Malmö¹
+100.0
+E.ON Solutions GmbH, DE, Essen 1,8
+100.0
+E.ON Wind Services A/S, DK, Rødby¹
+100.0
+E.ON Solar GmbH, DE, Essen²
+100.0
+E.ON WIND SERVICE ITALIA S.r.l., IT, Milan²
+100.0
+100.0
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+100.0
+gesellschaft mbH, DE, Regensburg
+100.0
+Powergen Holdings B.V., NL, Rotterdam¹
+R-KOM Regensburger Telekommunikationsverwaltungs-
+100.0
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+20.0
+20.0
+R-KOM Regensburger Telekommunikationsgesellschaft mbH &
+Co. KG, DE, Regensburg
+Pipkin Ranch Wind Farm, LLC, US, Wilmington²
+100.0
+Pioneer Trail Wind Farm, LLC, US, Wilmington¹
+35.5
+REWAG REGENSBURGER ENERGIE- UND WASSERVER-
+SORGUNG AG & CO KG, DE, Regensburg5
+100.0
+Pinckard Solar Member LLC, US, Wilmington²
+100.0
+33.3
+Powergen International Limited, GB, Coventry¹
+Rødsand 2 Offshore Wind Farm AB, SE, Malmö
+Rosengård Invest AB, SE, Malmö6
+100.0
+Powergen Power No. 2 Limited, GB, Coventry²
+100.0
+Rose Rock Wind Farm, LLC, US, Wilmington²
+100.0
+Powergen Power No. 1 Limited, GB, Coventry²
+100.0
+100.0
+100.0
+Powergen Luxembourg Holdings S.à r.l., LU, Luxembourg¹
+100.0
+Roscoe WF Holdco, LLC, US, Wilmington¹
+100.0
+Powergen Limited, GB, Coventry¹
+20.0
+Roscoe Wind Farm, LLC, US, Wilmington¹
+50.0
+50.0
+RegioNetz München GmbH & Co. KG, DE, Garching6
+RegioNetz München Verwaltungs GmbH, DE, Garching6
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+225
+(as of December 31, 2018)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Name, location
+Report of the Supervisory Board
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . ³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+Pawnee Spirit Wind Farm, LLC, US, Wilmington²
+100.0
+Paradise Cut Battery, LLC, US, Wilmington²
+49.0
+100.0
+CEO Letter
+Stake (%)
+Name, location
+Stake (%)
+100.0
+Pinckard Solar LLC, US, Wilmington²
+100.0
+Peyton Creek Wind Farm, LLC, US, Wilmington²
+50.0
+Perstorps Fjärrvärme AB, SE, Perstorp6
+89.8
+regiolicht GmbH, DE, Helmstedt²
+50.0
+Pei��enberger Wärmegesellschaft mbH, DE, Peißenberg6
+35.5
+50.0
+REGAS Verwaltungs-GmbH, DE, Regensburg
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG,
+DE, Regensburg
+100.0
+Peiẞenberger Kraftwerksgesellschaft mit beschränkter
+Haftung, DE, Peiẞenberg²
+100.0
+PEG Infrastruktur AG, CH, Zug¹
+25.0
+100.0
+Powergen Serang Limited, GB, Coventry²
+Powergen UK Investments, GB, Coventry²
+PreussenElektra GmbH, DE, Hanover¹
+Purena Consult GmbH, DE, Wolfenbüttel²
+Pyron Wind Farm, LLC, US, Wilmington¹
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11..4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+100.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+SEC F Sp. z o.o., PL, Szczecin²
+20.0
+50.0
+REGAS GmbH & Co KG, DE, Regensburg
+Refarmed ApS, DK, Copenhagen
+Notes
+100.0
+100.0
+SEC E Sp. z o.o., PL, Szczecin²
+100.0
+RDE Verwaltungs-GmbH, DE, Veitshöchheim²
+100.0
+SEC D Sp. z o.o., PL, Szczecin²
+100.0
+Redsted Varmetransmission ApS, DK, Frederiksberg²
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+226
+Stake (%)
+Name, location
+Stake (%)
+E.ON Nord Sverige AB, SE, Malmö¹
+E.ON NA Capital LLC, US, Wilmington¹
+E.ON Metering GmbH, DE, Munich²
+Name, location
+(as of December 31, 2018)
+(as of December 31, 2018)
+220
+SEC H Sp. z o.o., PL, Szczecin²
+SEC G Sp. z o.o., PL, Szczecin²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+SEC C Sp. z o.o., PL, Szczecin²
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Veitshöchheim²
+100.0
+100.0
+Sand Bluff WF Holdco, LLC, US, Wilmington¹
+100.0
+94.1
+100.0
+Safetec-Swiss GmbH, CH, Stans²
+100.0
+Radford's Run Holdco, LLC, US, Wilmington¹
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+Heidelberg²
+100.0
+100.0
+Safekont GmbH, DE, Munich²
+100.0
+56.7
+S.C. Salgaz S.A., RO, Salonta²
+100.0
+100.0
+100.0
+Sand Bluff Wind Farm, LLC, US, Wilmington¹
+100.0
+100.0
+100.0
+Raymond Wind Farm, LLC, US, Wilmington²
+100.0
+SEC A Sp. z o.o., PL, Szczecin²
+77.4
+100.0
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding2
+81.1
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+50.1
+Rampion Offshore Wind Limited, GB, Coventry¹
+50.0
+Scarweather Sands Limited, GB, Coventry
+100.0
+Radford's Run Wind Farm, LLC, US, Wilmington¹
+Purena GmbH, DE, Wolfenbüttel¹
+100.0
+Emmerthal¹
+70.0
+Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling
+Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling
+Turkey Run, LLC, US, Wilmington²
+33.3
+33.3
+100.0
+49.0
+Überlandwerk Leinetal GmbH, DE, Gronau
+48.0
+49.0
+Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH,
+DE, Pfaffenhofen
+Ultra-Fast Charging Joint Venture Scandinavia ApS, DK,
+Copenhagen6
+50.0
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter
+Haftung, DE, Ruhpolding²
+100.0
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen
+Union Grid s.r.o., CZ, Prague6
+22.2
+49.0
+34.0
+Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg6
+Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
+Pfaffenhofen
+Stromversorgung Angermünde GmbH, DE, Angermünde
+Tierra Blanca Wind Farm, LLC, US, Wilmington²
+100.0
+Stromnetzgesellschaft Bad Salzdetfurth - Diekholzen mbH &
+Co. KG, DE, Bad Salzdetfurth6
+Tipton Wind, LLC, US, Wilmington²
+100.0
+49.0
+TPG Wind Limited, GB, Coventry
+49.0
+50.0
+Triangeln 10 i Norrköping Fastighets AB, SE, Sundsvall¹
+100.0
+49.0
+Triangeln 15 i Norrköping Fastighets AB, SE, Malmö²
+100.0
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf6
+49.0
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+49.0
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim6
+50.0
+VEBA Electronics LLC, US, Wilmington¹
+100.0
+SüdWasser GmbH, DE, Erlangen²
+100.0
+SVH Stromversorgung Haar GmbH, DE, Haar6
+50.0
+VEBACOM Holdings LLC, US, Wilmington²
+Venado Wind Farm, LLC, US, Wilmington²
+36.8
+100.0
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning6
+25.1
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2018)
+228
+Name, location
+100.0
+Uranit GmbH, DE, Jülich4
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel
+VDE Projects GmbH, DE, Kassel²
+49.0
+Utility Debt Services Limited, GB, Coventry²
+100.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Unterschleißheim6
+49.0
+Valencia Solar, LLC, US, Tucson¹
+100.0
+100.0
+strotög GmbH Strom für Töging, DE, Töging am Inn
+Valverde Wind Farm, LLC, US, Wilmington²
+100.0
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG,
+VDE Komplementär GmbH, DE, Kassel²
+100.0
+DE, Brandenburg an der Havel5
+36.8
+50.0
+Stromnetze Peiner Land GmbH, DE, Ilsede6
+100.0
+Three Rocks Solar, LLC, US, Wilmington²
+69.6
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+Nienburg/Weser
+Landwehr Wassertechnik GmbH, DE, Schöppenstedt²
+100.0
+49.9
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+60.0
+100.0
+Intelligent Maintenance Systems Limited, GB, Milton Keynes
+Lighting for Staffordshire Limited, GB, Coventry¹
+100.0
+IPP ESN Power Engineering GmbH, DE, Kiel²
+51.0
+Liikennevirta Oy, FI, Helsinki6
+34.9
+Iron Horse Battery Storage, LLC, US, Wilmington²
+25.0
+100.0
+Lake Fork Wind Farm, LLC, US, Wilmington²
+LandE GmbH, DE, Wolfsburg¹
+InfraServ - Bayernwerk Gendorf GmbH, DE, Burgkirchen a. d. Alz6
+Inadale Wind Farm, LLC, US, Wilmington¹
+100.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+100.0
+Induboden GmbH, DE, Düsseldorf²
+100.0
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen6
+50.0
+41.7
+100.0
+Industriekraftwerk Greifswald GmbH, DE, Kassel6
+49.0
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG,
+DE, Grünwald¹
+90.0
+Industry Development Services Limited, GB, Coventry²
+100.0
+Induboden GmbH & Co. Grundstücksgesellschaft oHG, DE, Essen²
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+Kalmar Energi Försäljning AB, SE, Kalmar
+Kalmar Energi Holding AB, SE, Kalmar4
+57.0
+33.3
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. . 4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+224
+Stake (%)
+57.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+100.0
+Stromnetz Würmtal GmbH & Co. KG, DE, Planegg²
+74.5
+The Power Generation Company Limited, GB, Coventry²
+100.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Planegg²
+100.0
+(as of December 31, 2018)
+LSW Holding GmbH & Co. KG, DE, Wolfsburg5
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg6
+80.0
+100.0
+Kasson Manteca Solar, LLC, US, Wilmington²
+Lillo Energy NV, BE, Brussels
+50.0
+100.0
+40.0
+Limfjordens Bioenergi ApS, DK, Frederiksberg²
+78.0
+Local Energies, a. s., CZ, Zlín - Malenovice²
+100.0
+50.0
+London Array Limited, GB, Tunbridge Wells
+30.0
+100.0
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg6
+57.0
+Kemsley CHP Limited, GB, Coventry¹
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Stake (%)
+Name, location
+Stake (%)
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Waldbüttelbrunn6
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+100.0
+100.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt6
+Stadtwerke Barth GmbH, DE, Barth
+36.0
+49.0
+100.0
+100.0
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth5
+100.0
+Stadtwerke Bergen GmbH, DE, Bergen6
+49.0
+SEC J Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Blankenburg GmbH, DE, Blankenburg6
+30.0
+24.9
+SEC K Sp. z o.o., PL, Szczecin²
+West of the Pecos Solar, LLC, US, Wilmington²
+49.0
+100.0
+29.0
+WUN Pellets GmbH, DE, Wunsiedel
+25.1
+WEA Schönerlinde GbR mbH Kiepsch & Bosse &
+Beteiligungsges. e.disnatur mbH, DE, Berlin²
+70.0
+100.0
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach
+Weiẞmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+Yorkshire Windpower Limited, GB, Coventry
+50.0
+93.5
+werkkraft GmbH, DE, Unterschleißheim6
+50.0
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava5
+Zenit-SIS GmbH i.L., DE, Düsseldorf²
+22.2
+100.0
+Stadtwerke Bogen GmbH, DE, Bogen
+41.0
+39.0
+24.9
+Settlers Trail Wind Farm, LLC, US, Wilmington¹
+100.0
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+24.9
+Skive GreenLab Biogas ApS, DK, Frederiksberg²
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+Stadtwerke Garbsen GmbH, DE, Garbsen
+100.0
+49.9
+ŠKO ENERGO, s.r.o., CZ, Mladá Boleslav
+21.0
+Stadtwerke Lübz GmbH, DE, Lübz6
+25.0
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav5
+42.5
+Stadtwerke Husum GmbH, DE, Husum6
+96.0
+Servicii Energetice pentru Acasa - SEA Complet S.A., RO,
+Târgu Mureş²
+100.0
+SEC Myślibórz Sp. z o.o., PL, Myślibórz²
+89.9
+Stadtwerke Bredstedt GmbH, DE, Bredstedt
+49.9
+SEC Region Sp. z o.o., PL, Barlinek²
+100.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf6
+49.0
+SEC Serwis Sp. z o.o., PL, Szczecin²
+100.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+Ebermannstadt6
+25.0
+SERVICE plus GmbH, DE, Neumünster²
+100.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+49.0
+Service Plus Recycling GmbH, DE, Neumünster²
+WR Graceland Solar, LLC, US, Wilmington²
+100.0
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr GmbH,
+DE, Grafenwöhr6
+WIT Ranch Wind Farm, LLC, US, Wilmington²
+Vici Wind Farm II, LLC, US, Wilmington²
+100.0
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine)6
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg (Altmark)6
+24.9
+49.0
+Vici Wind Farm III, LLC, US, Wilmington²
+100.0
+100.0
+Windenergie Osterburg Verwaltungs GmbH, DE,
+100.0
+Osterburg (Altmark)6
+49.0
+Vortex Energy Deutschland GmbH, DE, Kassel²
+100.0
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+Kaiser-Wilhelm-Koog²
+Visioncash, GB, Coventry¹
+80.0
+Vici Wind Farm, LLC, US, Wilmington²
+100.0
+49.0
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+50.2
+50.2
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+49.0
+Versorgungskasse Energie (VVaG) i. L., DE, Hanover¹
+26.2
+70.3
+100.0
+100.0
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein
+20.0
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Budapest²
+100.0
+Windenergie Leinetal 2 Verwaltungs GmbH, DE, Freden (Leine)²
+Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine)6
+Wildcat Wind Farm II, LLC, US, Wilmington²
+Wildcat Wind Farm III, LLC, US, Wilmington²
+Vortex Energy Windpark GmbH & Co. KG, DE, Kassel²
+100.0
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Müden/Aller6
+Windpark Rotenburg GmbH & Co. KG, DE, Kassel
+50.0
+50.0
+Windpark Schapen GmbH & Co. KG, DE, Kassel
+50.0
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+66.7
+49.0
+100.0
+Wasserwerk Gifhorn Beteiligungs-GmbH, DE, Gifhorn6
+49.8
+Wiregrass, LLC, US, Wilmington²
+100.0
+Wasserwerk Gifhorn GmbH & Co KG, DE, Gifhorn6
+49.8
+Windpark Winterlingen-Alb GmbH & Co. KG, DE, Kassel²
+Windpark Naundorf OHG, DE, Potsdam²
+60.0
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+40.0
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+83.3
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH,
+DE, Königs Wusterhausen²
+Windpark Fresenhede GmbH & Co. KG, DE, Kassel
+50.0
+50.1
+Windpark Herẞum-Vinnen Projekt GmbH & Co. KG, DE, Kassel
+50.0
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE, Goslar
+49.0
+Windpark Hölzerberg GmbH & Co. KG, DE, Kassel²
+100.0
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim6
+50.0
+Windpark Mutzschen OHG, DE, Potsdam²
+77.8
+100.0
+Energie-Pensions-Management GmbH, DE, Hanover²
+Kraftwerk Marl GmbH, DE, Munich¹
+Improbed AB, SE, Malmö²
+49.0
+Falkenbergs Biogas AB, SE, Malmö²
+65.0
+Gemeindewerke Wedemark GmbH, DE, Wedemark
+49.0
+Farma Wiatrowa Barzowice Sp. z o.o., PL, Warsaw¹
+100.0
+Gemeindewerke Uetze GmbH, DE, Uetze6
+Gemeindewerke Wietze GmbH, DE, Wietze6
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+Haftung (FFG), DE, Freising
+50.0
+Gemeinnützige Gesellschaft zur Förderung des E.ON Energy
+Research Center mbH, DE, Aachen
+50.0
+FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg6
+49.0
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG, DE,
+49.0
+29.0
+28.8
+49.9
+Stake (%)
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+49.0
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+100.0
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg6
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
+Wörth am Main6
+50.2
+49.0
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing6
+49.0
+Wörth am Main
+28.9
+Gemeindewerke Leck GmbH, DE, Leck
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+Name, location
+100.0
+100.0
+Forest Creek Investco, Inc., US, Wilmington¹
+100.0
+Forest Creek WF Holdco, LLC, US, Wilmington¹
+100.0
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein
+GmbH, DE, Kiel6
+33.3
+Forest Creek Wind Farm, LLC, US, Wilmington¹
+20.0
+100.0
+100.0
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+41.7
+75.0
+Frazier Solar, LLC, US, Wilmington²
+Frendi AB, SE, Malmö¹
+100.0
+100.0
+Fortuna Solar, LLC, US, Wilmington²
+FIDELIA Holding LLC, US, Wilmington¹
+20.0
+100.0
+Fifth Standard Solar PV, LLC, US, Wilmington²
+100.0
+Gemeinschaftskernkraftwerk Grohnde Management GmbH,
+DE, Emmerthal²
+83.2
+Fitas Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+75.0
+Geotermisk Operaterselskab ApS, DK, Kirke Saby6
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
+Braunau am Inn6
+90.0
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+Emmerthal¹
+66.7
+90.0
+Flatlands Wind Farm, LLC, US, Wilmington²
+100.0
+Florida Solar and Power Group LLC, US, Wilmington²
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG, DE,
+Stake (%)
+EVG Energieversorgung Gemünden GmbH, DE,
+Gemünden am Main6
+Name, location
+30.0
+EC&R Services, LLC, US, Wilmington¹
+100.0
+EC&R Sherman, LLC, US, Wilmington²
+100.0
+EC&R Solar Development, LLC, US, Wilmington¹
+100.0
+Energieversorgung Sehnde GmbH, DE, Sehnde
+Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching6
+50.0
+50.0
+Economy Power Limited, GB, Coventry¹
+100.0
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+49.0
+EDT Energie Werder GmbH, DE, Werder (Havel)²
+49.0
+100.0
+100.0
+100.0
+100.0
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau6
+69.5
+100.0
+100.0
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+beschränkter Haftung, DE, Halblech
+50.0
+EC&R QSE, LLC, US, Wilmington¹
+EC&R NA Solar PV, LLC, US, Wilmington¹
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+50.0
+EC&R O&M, LLC, US, Wilmington¹
+100.0
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE,
+Putzbrunn6
+50.0
+EC&R Panther Creek Wind Farm III, LLC, US, Wilmington¹
+100.0
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+49.0
+EEP 2. Beteiligungsgesellschaft mbH, DE, Munich²
+Ergon Overseas Holdings Limited, GB, Coventry¹
+ErwärmBAR GmbH, DE, Eberswalde
+100.0
+50.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+Elevate Wind Holdco, LLC, US, Wilmington4
+100.0
+50.0
+Elmregia GmbH, DE, Schöningen6
+49.0
+49.0
+55.0
+100.0
+20.4
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3Joint operations pursuant to IFRS 11. . 4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality). Other companies in which share investments are held. . 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Notes
+222
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2018)
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+ESN Sicherheit und Zertifizierung GmbH, DE, Schwentinental²
+etatherm GmbH, DE, Potsdam6
+Grünwald6
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
+50.0
+100.0
+Energy Collection Services Limited, GB, Coventry²
+100.0
+EFG Erdgas Forchheim GmbH, DE, Forchheim
+24.9
+Enerjisa Enerji A.Ş., TR, Istanbul4
+40.0
+EFR Europäische Funk-Rundsteuerung GmbH, DE, Munich
+39.9
+Enerjisa Üretim Santralleri A.Ş., TR, Istanbul4
+50.0
+El Algodon Alto Wind Farm, LLC, US, Wilmington²
+ElbEnergie GmbH, DE, Quickborn²
+100.0
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+Ergon Energia S.r.l. in liquidazione, IT, Brescia6
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen6
+GOLLIPP Bioerdgas GmbH & Co. KG, DE, Gollhofen
+48.0
+50.0
+GASAG AG, DE, Berlin5
+E.ON Flash S.R.L., RO, Târgu Mureş²
+100.0
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+100.0
+E.ON First Future Energy Holding B.V., NL, Rotterdam²
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+100.0
+100.0
+100.0
+100.0
+E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin²
+100.0
+E.ON Drive Infrastructure GmbH, DE, Essen 1,8
+E.ON Drive Infrastructure UK Limited, GB, Coventry2
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf¹,8
+E.ON Finanzholding SE & Co. KG, DE, Essen 1,8
+100.0
+E.ON Elnät Stockholm AB, SE, Malmö¹
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf¹,8
+100.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt
+49.0
+HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
+Gemeinsames europäisches Unternehmen, DE, Hamm6
+Kommunale Klimaschutzgesellschaft Landkreis Celle
+26.0
+gemeinnützige GmbH, DE, Celle6
+100.0
+25.0
+50.0
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+gemeinnützige GmbH, DE, Celle6
+25.0
+Home.ON GmbH, DE, Aachen
+100.0
+E.ON Energetikai Tanácsadó Kft., HU, Budapest²
+100.0
+Holsteiner Wasser GmbH, DE, Neumünster6
+100.0
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+Name, location
+(as of December 31, 2018)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+219
+Report of the Supervisory Board
+iamsmart GmbH, DE, Essen²
+45.0
+Kraftwerk Burghausen GmbH, DE, Munich¹
+100.0
+100.0
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+CEO Letter
+Stake (%)
+Name, location
+Stake (%)
+100.0
+E.ON Fastigheter 2 AB, SE, Malmö²
+100.0
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+E.ON Dialog S.R.L., RO, Şelimbăr²
+E.ON Distribuce, a.s., CZ, České Budějovice¹
+100.0
+E.ON Fastigheter 1 AB, SE, Malmö²
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+100.0
+E.ON Danmark A/S, DK, Frederiksberg¹
+100.0
+100.0
+E.ON Energy Solutions GmbH, DE, Unterschleißheim²
+E.ON Energy Solutions Limited, GB, Coventry¹
+100.0
+100.0
+E.ON Control Solutions Limited, GB, Coventry¹
+E.ON Country Hub Germany GmbH, DE, Berlin 1,8
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+100.0
+50.0
+KommEnergie GmbH, DE, Eichenau6
+100.0
+Haftung, DE, Würzburg5
+49.0
+Grandview Wind Farm IV, LLC, US, Wilmington²
+100.0
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+49.0
+Grandview Wind Farm III, LLC, US, Wilmington²
+Grandview Wind Farm V, LLC, US, Wilmington²
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel
+50.0
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf¹, 8
+100.0
+Green Sky Energy Limited, GB, Coventry¹
+greenited GmbH, DE, Hamburg6
+100.0
+50.0
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11..4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held. . "This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Gasversorgung Unterfranken Gesellschaft mit beschränkter
+Grandview Wind Farm, LLC, US, Wilmington4
+36.9
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen
+49.0
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen6
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+50.0
+100.0
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+50.0
+50.0
+49.9
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt6
+50.0
+Gottburg Verwaltungs GmbH, DE, Leck6
+49.9
+Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn¹
+95.0
+Gottburg Energie- und Wärmetechnik GmbH & Co. KG, DE, Leck
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Harzwasserwerke GmbH, DE, Hildesheim5
+100.0
+20.8
+Kernkraftwerk Gundremmingen GmbH, DE, Gundremmingen5
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+Kite Power Systems Limited, GB, Chelmsford
+25.0
+50.0
+66.7
+100.0
+HanseWerk Natur GmbH, DE, Hamburg¹
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Budapest²
+100.0
+Havelstrom Zehdenick GmbH, DE, Zehdenick
+49.0
+KommEnergie Erzeugungs GmbH, DE, Eichenau6
+100.0
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co.
+OHG, DE, Neualbenreuth6
+20.0
+66.5
+HanseWerk AG, DE, Quickborn¹
+100.0
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2018)
+Name, location
+223
+Stake (%)
+Name, location
+Stake (%)
+greenXmoney.com GmbH i. L., DE, Neu-Ulm²
+100.0
+GrönGas Partner A/S, DK, Hirtshals6
+50.0
+Hams Hall Management Company Limited, GB, Coventry
+44.8
+HanseGas GmbH, DE, Quickborn¹
+61.0
+SEC HR Sp. z o.o., PL, Szczecin²
+SECI Sp. z o.o., PL, Szczecin²
+Energie-Agentur Weyhe GmbH, DE, Weyhe
+100.0
+Declaration of the Management Board
+Information
+Further
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. Other companies in which share investments are held.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.
+Thermondo GmbH, DE, Berlin'
+-11.8
+20.3
+19.4
+0.0
+20.5
+10.0
+Stadtwerke Wertheim GmbH, DE, Wertheim'
+0.0
+10.8
+19.9
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing'
+0.0
+232
+30.1
+Declaration of the Management Board
+Essen, February 28, 2019
+Report on the Audit of the Consolidated
+Financial Statements and of the Group
+Management Report
+To E.ON SE, Essen
+233
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+Independent Auditor's Report
+Wildberger
+Spieker
+König
+سال سایید
+Birnbaum
+Teyssen
+вы
+Jm
+The Management Board
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+10.0
+100.0
+0.0
+100.0
+100.0
+Stake (%)
+229
+OB 5, DE, Düsseldorf¹
+OB 2, DE, Düsseldorf¹
+HANSEFONDS, DE, Düsseldorf¹
+ASF, DE, Düsseldorf¹
+Consolidated investment funds
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2018)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+100.0
+Name, location
+Other companies in which share investments are held
+e-werk Sachsenwald GmbH, DE, Reinbek?
+72.9
+19.9
+infra fürth gmbh, DE, Fürth?
+0.0
+22.1
+19.9
+HEW HofEnergie+Wasser GmbH, DE, Hof?
+0.0
+Audit Opinions
+12.8
+Herzo Werke GmbH, DE, Herzogenaurach
+4.5
+28.4
+16.0
+€ in millions
+Earnings
+Equity
+€ in millions
+Stake (%)
+19.9
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg?
+We have audited the consolidated financial statements of
+E.ON SE, Essen, and its subsidiaries (the Group), which comprise
+the consolidated balance sheet as at December 31, 2018, and
+the consolidated statement of income, consolidated statement
+of recognized income and expenses, consolidated statement
+of changes in equity and consolidated statement of cash flows
+for the financial year from January 1 to December 31, 2018,
+and notes to the consolidated financial statements, including
+a summary of significant accounting policies. In addition, we
+have audited the group management report of E.ON SE, which
+is combined with the Company's management report, for the
+financial year from January 1 to December 31, 2018. In accor-
+dance with the German legal requirements, we have not audited
+the content of the statement on corporate governance pursuant
+to § [Article] 289f HGB [Handelsgesetzbuch: German Commer-
+cial Code] and § 315d HGB.
+•
+In connection with our audit, our responsibility is to read the
+other information and, in so doing, to consider whether the other
+information
+Our audit opinions on the consolidated financial statements and
+on the group management report do not cover the other infor-
+mation, and consequently we do not express an audit opinion
+or any other form of assurance conclusion thereon.
+The other information comprises further the remaining parts
+of the annual report - excluding cross-references to external
+information - with the exception of the audited consolidated
+financial statements, the audited group management report
+and our auditor's report, and the separate non-financial report
+pursuant to § 289b Abs. 3 HGB and § 315b Abs. 3 HGB.
+The executive directors are responsible for the other information.
+The other information comprises the statement on corporate
+governance pursuant to § 289f HGB and § 315d HGB.
+Other Information
+237
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+c. The Company's disclosures relating to the non-current pro-
+visions are contained in note 25 to the consolidated financial
+statements.
+We assessed the entire calculations (including discounting)
+for the respective provisions using the applicable measure-
+ment parameters and scrutinized the planned timetable for
+utilizing the provisions. We were able to satisfy ourselves
+that the assessments and assumptions made by the execu-
+tive directors were sufficiently substantiated to justify the
+recognition and measurement of the non-current provisions.
+We consider the measurement parameters and assumptions
+used by the executive directors to be reproducible as a whole,
+and we were able to satisfy ourselves that they were properly
+included in the calculation of the provisions.
+b. With the knowledge that the measurement of provisions is
+primarily based on the executive directors' assessments
+and that these have a significant effect on consolidated net
+income, in particular we assessed the reliability of the informa-
+tion used as well as the appropriateness of the assumptions
+underlying the measurement. As part of our assessment of
+the provisions for the decommissioning of nuclear plants,
+we looked, among other things, at the external expert opinions
+on which the measurement was based. We focused on the
+evaluation of the technical decommissioning concepts and
+the underlying cost assumptions, particularly with regard to
+HR costs. Furthermore, we evaluated whether the rates
+of cost increases and the interest rates with matching terms
+were properly derived from market data.
+a. In the consolidated financial statements of E.ON SE as of
+December 31, 2018, an amount of EUR 12.5 billion is
+reported under the "Other provisions" balance sheet item.
+EUR 9.5 billion of this amount is attributable to provisions
+for the decommissioning of nuclear plants. Both the recog-
+nition and the subsequent measurement of provisions, like
+the determination of the underlying assumptions used in this
+regard, including the rates of cost increases and discount rate
+used, are highly dependent on estimates and assumptions
+by the executive directors. We therefore consider this matter
+to be of particular significance for our audit.
+3. Non-current provisions
+is materially inconsistent with the consolidated financial
+statements, with the group management report or our
+knowledge obtained in the audit, or
+c. The Company's disclosures relating to the recoverability of
+goodwill are contained in note 14 to the consolidated financial
+statements.
+otherwise appears to be materially misstated.
+Responsibilities of the Executive Directors and the Supervisory
+Board for the Consolidated Financial Statements and the Group
+Management Report
+Conclude on the appropriateness of the executive directors'
+use of the going concern basis of accounting and, based on
+the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast signifi-
+cant doubt on the Group's ability to continue as a going con-
+cern. If we conclude that a material uncertainty exists, we
+are required to draw attention in the auditor's report to the
+related disclosures in the consolidated financial statements
+and in the group management report or, if such disclosures
+are inadequate, to modify our respective audit opinions. Our
+conclusions are based on the audit evidence obtained up
+to the date of our auditor's report. However, future events
+or conditions may cause the Group to cease to be able to
+continue as a going concern.
+Evaluate the overall presentation, structure and content of
+the consolidated financial statements, including the disclo-
+sures, and whether the consolidated financial statements
+present the underlying transactions and events in a manner
+that the consolidated financial statements give a true and
+fair view of the assets, liabilities, financial position and finan-
+cial performance of the Group in compliance with IFRSS
+as adopted by the EU and the additional requirements of
+German commercial law pursuant to § 315e Abs. 1 HGB.
+•
+•
+•
+•
+Identify and assess the risks of material misstatement of the
+consolidated financial statements and of the group manage-
+ment report, whether due to fraud or error, design and per-
+form audit procedures responsive to those risks, and obtain
+audit evidence that is sufficient and appropriate to provide a
+basis for our audit opinions. The risk of not detecting a mate-
+rial misstatement resulting from fraud is higher than for one
+resulting from error, as fraud may involve collusion, forgery,
+intentional omissions, misrepresentations, or the override of
+internal control.
+We exercise professional judgment and maintain professional
+skepticism throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a
+guarantee that an audit conducted in accordance with § 317 HGB
+and the EU Audit Regulation and in compliance with German
+Generally Accepted Standards for Financial Statement Audits
+promulgated by the Institut der Wirtschaftsprüfer (IDW) and
+supplementary compliance with the ISAs will always detect a
+material misstatement. Misstatements can arise from fraud or
+error and are considered material if, individually or in the aggre-
+gate, they could reasonably be expected to influence the eco-
+nomic decisions of users taken on the basis of these consolidated
+financial statements and this group management report.
+Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements and of the Group Management Report
+Our objectives are to obtain reasonable assurance about
+whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error,
+and whether the group management report as a whole provides
+an appropriate view of the Group's position and, in all material
+respects, is consistent with the consolidated financial state-
+ments and the knowledge obtained in the audit, complies with
+the German legal requirements and appropriately presents the
+opportunities and risks of future development, as well as to
+issue an auditor's report that includes our audit opinions on the
+consolidated financial statements and on the group manage-
+ment report.
+238
+Independent Auditor's Report
+The supervisory board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consolidated
+financial statements and of the group management report.
+Furthermore, the executive directors are responsible for the
+preparation of the group management report that, as a whole,
+provides an appropriate view of the Group's position and is, in
+all material respects, consistent with the consolidated financial
+statements, complies with German legal requirements, and
+appropriately presents the opportunities and risks of future
+development. In addition, the executive directors are responsible
+for such arrangements and measures (systems) as they have
+considered necessary to enable the preparation of a group man-
+agement report that is in accordance with the applicable Ger-
+man legal requirements, and to be able to provide sufficient
+appropriate evidence for the assertions in the group manage-
+ment report.
+In preparing the consolidated financial statements, the execu-
+tive directors are responsible for assessing the Group's ability
+to continue as a going concern. They also have the responsibility
+for disclosing, as applicable, matters related to going concern.
+In addition, they are responsible for financial reporting based on
+the going concern basis of accounting unless there is an inten-
+tion to liquidate the Group or to cease operations, or there is no
+realistic alternative but to do so.
+of the assets, liabilities, financial position, and financial perfor-
+mance of the Group. In addition the executive directors are
+responsible for such internal control as they have determined
+necessary to enable the preparation of consolidated financial
+statements that are free from material misstatement, whether
+due to fraud or error.
+The executive directors are responsible for the preparation of
+the consolidated financial statements that comply, in all material
+respects, with IFRSS as adopted by the EU and the additional
+requirements of German commercial law pursuant to § 315e
+Abs. 1 HGB and that the consolidated financial statements, in
+compliance with these requirements, give a true and fair view
+If, based on the work we have performed, we conclude that
+there is a material misstatement of this other information,
+we are required to report that fact. We have nothing to report
+in this regard.
+Overall, we consider the measurement inputs and assump-
+tions used by the executive directors to be in line with our
+expectations. We were able to verify the inclusion in the
+measurement models and the calculation of the impairment
+losses that had been identified.
+b. As part of our audit, we assessed, among other things,
+whether the measurement model for performing impairment
+tests properly reflects the conceptual requirements of the
+relevant standards and whether the calculations in the mod-
+els were correctly performed. The critical assessment of
+the key assumptions underlying the measurements was the
+focal point of our audit. We evaluated the appropriateness
+of the future cash flows used for the measurement by recon-
+ciling this data against general and sector-specific market
+expectations and by comparing it with the current budgets
+in the Group investment, finance and HR plan for 2019 pre-
+pared by the executive directors and approved by the super-
+visory board on December 18, 2018 as well as the planning
+for the years 2020 and 2021 prepared by the executive direc-
+tors and acknowledged by the supervisory board. Among
+other things, we assessed how the long-term growth rates
+used for perpetual annuities were derived from the observable
+market data and market expectations. We also assessed the
+parameters used to determine the discount rate applied, and
+evaluated the measurement model. In addition, we compared
+the assumptions about long-term price development and
+the relevant regulatory influencing factors against sector-
+specific expectations. Within the context of our assessment
+of the recoverability of goodwill, we also evaluated whether
+the costs for corporate overheads were properly ascertained,
+allocated, and included in the impairment tests of the
+respective cash-generating units. Finally, we assessed the
+calculation of the carrying amounts of the cash-generating
+units, which were compared against the corresponding
+recoverable amount, as well as the mathematical comparison.
+236
+b. Audit approach and findings
+a. Matter and issue
+Our presentation of these key audit matters has been structured
+in each case as follows:
+3. Non-current provisions
+2. Recoverability of goodwill
+1. Exchange of business activities with RWE
+In our view, the matters of most significance in our audit were
+as follows:
+234
+Independent Auditor's Report
+Key audit matters are those matters that, in our professional
+judgment, were of most significance in our audit of the consoli-
+dated financial statements for the financial year from January 1,
+to December 31, 2018. These matters were addressed in the
+context of our audit of the consolidated financial statements as
+a whole, and in forming our audit opinion thereon; we do not
+provide a separate audit opinion on these matters.
+Key Audit Matters in the Audit of the
+Consolidated Financial Statements
+We conducted our audit of the consolidated financial state-
+ments and of the group management report in accordance with
+§ 317 HGB and the EU Audit Regulation (No. 537/2014, referred
+to subsequently as "EU Audit Regulation") in compliance with
+German Generally Accepted Standards for Financial Statement
+Audits promulgated by the Institut der Wirtschaftsprüfer [Insti-
+tute of Public Auditors in Germany] (IDW). We performed the
+audit of the consolidated financial statements in supplementary
+compliance with the International Standards on Auditing (ISAs).
+Our responsibilities under those requirements, principles and
+standards are further described in the "Auditor's Responsibilities
+for the Audit of the Consolidated Financial Statements and of
+the Group Management Report" section of our auditor's report.
+We are independent of the group entities in accordance with
+the requirements of European law and German commercial and
+professional law, and we have fulfilled our other German pro-
+fessional responsibilities in accordance with these requirements.
+In addition, in accordance with Article 10 (2) point (f) of the EU
+Audit Regulation, we declare that we have not provided non-audit
+services prohibited under Article 5 (1) of the EU Audit Regulation.
+We believe that the audit evidence we have obtained is sufficient
+and appropriate to provide a basis for our audit opinions on the
+consolidated financial statements and on the group management
+report.
+Basis for the Audit Opinions
+Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
+that our audit has not led to any reservations relating to the
+legal compliance of the consolidated financial statements and
+of the group management report.
+the accompanying group management report as a whole
+provides an appropriate view of the Group's position. In all
+material respects, this group management report is consis-
+tent with the consolidated financial statements, complies
+with German legal requirements and appropriately presents
+the opportunities and risks of future development. Our audit
+opinion on the group management report does not cover the
+content of the statement on corporate governance referred
+to above.
+the accompanying consolidated financial statements comply,
+in all material respects, with the IFRSS as adopted by the
+EU, and the additional requirements of German commercial
+law pursuant to § 315e Abs. [paragraph] 1 HGB and, in com-
+pliance with these requirements, give a true and fair view of
+the assets, liabilities, and financial position of the Group as
+at December 31, 2018, and of its financial performance for
+the financial year from January 1 to December 31, 2018, and
+•
+c. Reference to further information
+Hereinafter we present the key audit matters:
+1. Exchange of business activities with RWE
+a. In the consolidated financial statements of E.ON SE as of
+December 31, 2018, an amount of EUR 11.4 billion is recog-
+nized under the "Assets held for sale" balance sheet item,
+and an amount of EUR 3.7 billion is recognized under the
+"Liabilities associated with assets held for sale" balance sheet
+item. Of these, EUR 11.3 billion and EUR 2.7 billion, respec-
+tively, relate in particular to the renewables business and
+EUR 0.2 billion and EUR 1.0 billion, respectively, to two minor-
+ity stocks in the Emsland and Gundremmingen nuclear power
+plants operated by RWE AG, Essen (RWE) as well as further
+assets connected with operating and decommissioning those
+power plants, including the associated decommissioning
+obligations (nuclear power equity interests).
+Independent Auditor's Report
+a. Following reclassification of the EUR 1.3 billion in goodwill
+attributable to renewables to "Assets held for sale", a remain-
+ing amount of EUR 2.1 billion is reported under the "Goodwill"
+balance sheet item in the consolidated financial statements
+of E.ON SE as of December 31, 2018. In financial year 2018,
+no impairment loss was to be recognized. The Company
+allocates goodwill to cash-generating units or groups of
+cash-generating units that are primarily equivalent to the
+E.ON Group's operating segments. These are subject to
+impairment tests on a regular basis in the fourth quarter
+of a given financial year or whenever there are indications
+of impairment. The carrying amount of the relevant cash-
+generating units, including goodwill, is compared with the
+corresponding recoverable amount in the context of the
+impairment test. The present value of the future cash flows
+from the respective cash-generating unit serves as the basis
+of valuation in the context of an impairment test. The cash
+flows are based on the E.ON Group's medium-term planning
+for the years 2019 to 2021. For the purposes of assessing
+the recoverability of goodwill, the three-year detailed plan-
+ning period is generally extended by another two years - or
+more, if required - and is then extrapolated on the basis of
+assumptions about long-term growth rates in perpetual
+annuity. The discount rate used is the weighted average cost
+of capital for the relevant cash-generating unit in each case.
+The result of this measurement depends to a large extent on
+the executive directors' estimates of the amount of future
+cash flows, the discount rate applied and the growth rate.
+The assumptions about the long-term development of the
+underlying prices and the relevant regulatory influencing
+factors are also of particular importance. Due to the com-
+plexity of the measurement and the considerable uncertainties
+relating to the underlying assumptions this matter was of
+particular significance in the context of our audit.
+2. Recoverability of goodwill
+c. The Company's disclosures on the planned disposal of the
+renewables business and the minority stocks are contained in
+notes 4, 27 and 33 to the consolidated financial statements.
+We also focused on the reporting of the public takeover offer
+and E.ON's resulting obligation in the consolidated financial
+statements. For this purpose, we looked in particular at the
+legal basis for such a takeover offer in the context of the
+overall transaction, which is aimed at acquiring control. In
+addition, we assessed the value of the offer and its com-
+position against the background of innogy's current market
+value. We were able to satisfy ourselves that there was no
+need to recognize the public takeover offer or E.ON's resulting
+obligation in the balance sheet, but that the obligation was
+correctly disclosed as an "other financial obligation" in the
+notes to the consolidated financial statements.
+In evaluating the estimate that the transaction was highly
+probably to close, we took into particular consideration the
+public takeover offer made by E.ON to innogy's minority
+shareholders, the cooperation agreement between innogy,
+RWE and E.ON, and the executive directors' assessments
+with respect to approval from the antitrust authorities.
+A subsequent focal point for our audit was the measurement
+of the assets and liabilities of both disposal groups, as well
+as the impairment testing on the renewables business.
+We assessed the measurement models and the underlying
+assumptions, as well as the specific calculation. We also
+evaluated how the transaction was reported in the notes,
+in particular the disclosures on the discontinued operation
+within the segment reporting. We were able to satisfy our-
+selves that the renewables business and the minority equity
+interests were properly presented, that the assumptions
+and parameters underlying the measurement were suffi-
+ciently documented and substantiated overall, and that the
+disclosures on the discontinued operation within the seg-
+ment information were appropriate.
+operation/disposal group as of June 30, 2018 was appropriate
+and whether the presentation in the balance sheet, income
+statement and statement of cash flows complied with the
+relevant standards and the generally accepted professional
+interpretations. For this purpose we first of all obtained an
+understanding of the underlying contractual agreements and
+evaluated their impact on the presentation of the renewables
+business and the nuclear power equity interests, and on the
+accounting treatment.
+235
+In our opinion, on the basis of the knowledge obtained in the audit,
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+b. As part of our audit, we assessed in particular the presenta-
+tion of the renewables business as a discontinued operation
+and the nuclear power minority stocks as a disposal group.
+We assessed whether the classification as a discontinued
+Based on the assessment by the Company's executive direc-
+tors that the overall transaction is highly probable to close,
+the renewables business subject to transfer is presented as
+a discontinued operation and the nuclear power minority
+stocks as a disposal group effective June 30, 2018, in accor-
+dance with IFRS 5. Since E.ON will manage the renewables
+business until the disposal takes effect, the activities will
+continue to be fully included in the relevant key performance
+indicators and the segment reporting. In connection with the
+mandatory impairment testing of the two disposal groups'
+assets prior to reclassification, no material impairment losses
+or reversals were identified. The subsequent impairment test
+on the renewables business as a whole did not identify any
+further impairment. Due to the highly complex nature of the
+overall transaction and the accounting treatment of the
+agreement with RWE as well as the underlying assumptions
+and estimates the presentation as a discontinued operation/
+disposal group, the associated impairment testing, and E.ON's
+reporting of the public takeover offer in its consolidated
+financial statements were of particular significance in the
+context of our audit.
+On April 27, 2018, E.ON made a voluntary public takeover
+offer to acquire all shares of innogy SE for EUR 36.76 per
+share. If the transaction closes before the date of innogy's
+annual general meeting resolving on the appropriation of net
+profit for financial year 2018, the consideration will increase
+by EUR 1.64 per innogy share. The closing of the transaction
+and the public takeover offer are subject to conditions prece-
+dent and require approval from antitrust authorities. 9.4%
+of the shares have been tendered under the takeover offer.
+E.ON's obligation arising from the takeover offer is reported
+under other financial obligations in the notes to the consoli-
+dated financial statements.
+On March 12, 2018, E.ON and RWE entered into an agree-
+ment on a comprehensive exchange of business activities.
+The agreement is subject to conditions precedent, in par-
+ticular approval from antitrust authorities. In accordance
+with the agreement, E.ON acquires RWE's 76.8% interest
+in innogy SE, Essen (innogy), and receives a cash payment
+of EUR 1.5 billion. In return, E.ON will transfer substantially
+all of its current renewables business, the nuclear power
+minority stocks and (following closing of the innogy takeover)
+innogy's complete renewables and gas storage businesses
+as well as its equity interests in KELAG-Kärntner Elektri-
+zitäts-Aktiengesellschaft to RWE. In addition, RWE obtains
+440,219,800 new shares of E.ON SE created from the latter's
+authorized capital, corresponding to an approx. 16.67%
+interest in E.ON's share capital.
+Combined Group Management Report
+Evaluate the appropriateness of accounting policies used by
+the executive directors and the reasonableness of estimates
+made by the executive directors and related disclosures.
+Obtain an understanding of internal control relevant to the
+audit of the consolidated financial statements and of
+arrangements and measures (systems) relevant to the audit
+of the group management report in order to design audit
+procedures that are appropriate in the circumstances, but
+not for the purpose of expressing an audit opinion on the
+effectiveness of these systems.
+58,811
+→ Energie Steiermark AG
+→ TEN Thüringer Energienetze GmbH & Co. KG
+(until June 20, 2018)
+Albert Zettl
+Deputy Chairman of the SE Works Council of E.ON SE
+Chairman of the E.ON Group Works Council
+Chairman of the Division Works Council of Bayernwerk AG
+Chairman of the Eastern Bavaria Works Council of Bayernwerk
+Netz GmbH
+→ Bayernwerk AG
+→ Versorgungskasse Energie VVaG i.L.
+Supervisory Board Committees
+Executive Committee
+Dr. Karl-Ludwig Kley, Chairman
+Andreas Scheidt, Deputy Chairman
+Erich Clementi (since May 9, 2018)
+Prof. Dr. Ulrich Lehner (until May 9, 2018)
+Fred Schulz (until May 9, 2018, since May 29, 2018)
+Audit and Risk Committee
+Andreas Schmitz, Chairman since May 9, 2018
+Dr. Theo Siegert, Chairman (until May 9, 2018)
+Fred Schulz, Deputy Chairman
+(until May 9, 2018, since May 29, 2018)
+Caroline Dybeck Happe (since May 9, 2018)
+Elisabeth Wallbaum (since January 1, 2018)
+Glossary of Financial Terms
+Cost of capital
+Weighted average of the costs of debt and equity financing (weighted-average cost of
+capital: "WACC"). The cost of equity is the return expected by an investor in a given stock.
+The cost of debt is based on the cost of corporate debt and bonds. The interest on corporate
+debt is tax-deductible (referred to as the tax shield on corporate debt).
+Prof. Dr. Ulrich Lehner, Deputy Chairman (until May 9, 2018)
+Dr. Karen de Segundo
+Erich Clementi, Deputy Chairman (since May 9, 2018)
+Dr. Karl-Ludwig Kley, Chairman
+→ Deutsche Energie-Agentur GmbH (dena)
+Nomination Committee
+Eugen-Gheorghe Luha
+Carolina Dybeck Happe (until May 9, 2018)
+Klaus Fröhlich (since May 29, 2018)
+Clive Broutta
+Albert Zettl, Deputy Chairman
+Dr. Karen de Segundo, Chairperson
+Investment and Innovation Committee
+Ewald Woste
+→ GreenCom Networks AG
+→ Bayernwerk AG (since June 25, 2018)
+→ GASAG AG
+Chairperson of the Works Council of Západoslovenská
+Silvia Šmátralová (until May 9, 2018)
+243
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+energetika a.s. (ZSE)
+E.ON Stock
+CEO Letter
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→ Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+Unless otherwise indicated, information is as of December 31, 2018, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Szczecińska Energetyka Cieplna Sp. z o.o.
+Chairman of the Works Council of E.DIS Netz GmbH-Region East
+→ E.DIS AG
+Report of the Supervisory Board
+247
+Member of the SE Works Council of E.ON SE
+→ Západoslovenská energetika a.s.
+→ TEAG Thüringer Energie AG (Chairman, until June 20, 2018)
+Management Consultant
+Ewald Woste
+E.ON Group Works Council
+Expert, SE Works Council of E.ON SE and
+Elisabeth Wallbaum
+→ Západoslovenská distribučná a.s.
+→ E. Merck KG
+→ Merck KGaA
+→ Henkel AG & Co. KGaA
+Managing Partner, de Haen-Carstanjen & Söhne
+Dr. Theo Siegert (until May 9, 2018)
+Attorney
+Dr. Karen de Segundo
+→ DKSH Holding Ltd.
+Fred Schulz (until May 9, 2018, since May 29, 2018)
+Chairman of the SE Works Council of E.ON SE
+Deputy Chairman of the E.ON Group Works Council
+Chairman of the General Works Council of E.DIS AG
+¹For the purpose of internal management control, it includes the E.ON Group's continuing operations as well as the discontinued operations in the Renewables segment.
+Contractual trust arrangement ("CTA")
+43,302
+42,699
+43,162
+Unless otherwise indicated, information is as of December 31, 2018, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+Boards
+Management Board (and Information on Other Directorships)
+244
+Dr. Johannes Teyssen
+Born in 1959 in Hildesheim, Germany
+Chairman of the Management Board and CEO since 2010
+Member of the Management Board since 2004
+Strategy and Corporate Development, Turkey, HR,
+Political Affairs and Communications, Legal and Compliance,
+Corporate Audit
+→ Deutsche Bank AG (until May 24, 2018)
+→ Nord Stream AG
+Dr.-Ing. Leonhard Birnbaum
+Born in 1967 in Ludwigshafen, Germany
+Member of the Management Board since 2013
+→ Bayernwerk AG¹ (Chairman)
+→ Avacon AG¹ (Chairman)
+Regional Energy Networks, Procurement, Consulting
+Member of the Management Board since June 1, 2018
+Born in 1965 in Finnentrop, Germany
+Dr. Thomas König
+¹Adjusted for discontinued operations and for the application of IFRS 10 and 11 and IAS 32. - 2Line items from the Consolidated Statements of Income for 2016 and 2015 were adjusted to exclude
+Uniper; they include Uniper prior to 2015. Line items from the Consolidated Balance Sheets for 2016 were adjusted to exclude Uniper; they include Uniper prior to 2016.. ³Adjusted for non-operating
+effects. . "As of the balance-sheet date. 5Cash provided by operating activities of continuing operations; the 2018 figure includes the entire Renewables segment. 6Ratio between economic net debt
+and adjusted EBITDA; 2015 figure not adjusted to exclude Uniper.. "Attributable to shareholders of E.ON SE.. 8Xetra; 2015 and 2016 were adjusted for the Uniper spinoff. 9At the end of December.
+10 For the respective financial year; the 2018 figure is management's proposed dividend.. 11Based on shares outstanding.
+→ E.ON Distribuce, a.s.2 (Chairman, until August 31, 2018)
+→ E.ON Česká republika s.r.o.²
+→ E.ON Hungária Zrt.² (Chairman, until August 2, 2018)
+→ E.ON Sverige AB² (Chairman, until August 21, 2018)
+→ Georgsmarienhütte Holding GmbH
+→ E.ON Czech Holding AG¹ (Chairman, until July 10,2018)
+innogy integration project, Renewables, Health/Safety and
+Environment, Sustainability, Preussen Elektra
+(Chairman, until September 30, 2018)
+Glossary of Financial Terms
+Actuarial gains and losses
+The actuarial calculation of provisions for pensions is based on projections of a number of
+variables, such as projected future salaries and pensions. An actuarial gain or loss is recorded
+when the actual numbers turn out to be different from the projections.
+Capital employed¹
+Represents the interest-bearing capital tied up in the E.ON Group. It is equal to a segment's
+non-current and current operating assets less the amount of non-interest-bearing available
+capital. Other equity interests are included at their acquisition cost, not their fair value.
+Capital stock
+The aggregate face value of all shares of stock issued by a company; entered as a liability
+in the company's balance sheet.
+Cash-conversion rate¹
+Operating cash flow before interest and taxes divided by adjusted EBITDA. It indicates
+whether our operating earnings are generating enough liquidity.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Cash flow statement
+Cash provided by operating activities
+Cash provided by, or used for, operating activities of continuing and discontinued operations.
+Commercial paper ("CP")
+Unsecured, short-term debt instruments issued by commercial firms and financial institutions.
+CP is usually quoted on a discounted basis, with repayment at par value.
+Consolidation
+Accounting approach in which a parent company and its affiliates are presented as if they
+formed a single legal entity. All intracompany income and expenses, intracompany accounts
+payable and receivable, and other intracompany transactions are offset against each other.
+Share investments in affiliates are offset against their capital stock, as are all intracompany
+credits and debts, since such rights and obligations do not exist within a single legal entity.
+The adding together and consolidation of the remaining items in the annual financial state-
+ments yields the consolidated balance sheets and the consolidated statements of income.
+Calculation and presentation of the cash a company has generated or consumed during
+a reporting period as a result of its operating, investing, and financing activities.
+Model for financing pension obligations under which company assets are converted to
+assets of a pension plan administered by an independent trust that is legally separate from
+the company.
+Combined Group Management Report
+E.ON Stock
+Adjusted EBIT¹
+Adjusted earnings before interest and taxes is our most important earnings figure for the
+purpose of internal management control and as an indicator of our businesses' long-term
+earnings power. Adjusted EBIT used by E.ON is adjusted to exclude material non-operating
+income and expenses (see Non-operating effects).
+Adjusted EBITDA¹
+Earnings before interest, taxes, depreciation, and amortization. It is adjusted to exclude
+material non-operating income and expenses (see Non-operating effects).
+Adjusted net income¹
+An earnings figure after interest income, income taxes, and minority interests that has
+been adjusted to exclude non-operating effects.
+Strategy and Objectives
+Beta factor
+Bond
+Debt instrument that gives the holder the right to repayment of the bond's face value plus
+an interest payment. Bonds are issued by public entities, credit institutions, and companies
+and are sold through banks. They are a form of medium- and long-term debt financing.
+¹For the purpose of internal management control, it includes the E.ON Group's continuing operations as well as the discontinued operations in the Renewables segment.
+246
+CEO Letter
+Report of the Supervisory Board
+Indicator of a stock's relative risk. A beta coefficient of more than one indicates that a stock
+has a higher risk than the overall market; a beta coefficient of less than one indicates that
+it has a lower risk.
+→ E.DIS AG¹ (Chairman)
+→ Andersch AG (Chairman, since April 23, 2018)
+→ HSBC Trinkaus & Burkhardt AG (Chairman)
+Düsseldorf, March 5, 2019
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+(Markus Dittmann)
+Wirtschaftsprüfer
+(German Public Auditor)
+(Aissata Touré)
+Wirtschaftsprüferin
+(German Public Auditor)
+Independent Practitioner's Report
+on Non-financial Reporting
+240
+Independent Practitioner's Report on a Limited
+Assurance Engagement on Non-financial
+Reporting
+To E.ON SE, Essen
+We have performed a limited assurance engagement on the
+combined separate non-financial report pursuant to §§ (Arti-
+cles) 289b Abs. (paragraph) 3 and 315b Abs. 3 HGB ("Handels-
+gesetzbuch": "German Commercial Code") of E.ON SE, Essen
+(hereinafter the "Company") for the period from 1st January to
+31st December 2018 (hereinafter the "Non-financial Report").
+Responsibilities of the Executive Directors
+The executive directors of the Company are responsible for
+the preparation of the Non-financial Report in accordance with
+§§ 315b and 315c in conjunction with 289b to 289e HGB.
+This responsibility of Company's executive directors includes
+the selection and application of appropriate methods of non-
+financial reporting as well as making assumptions and estimates
+related to individual non-financial disclosures which are reason-
+able in the circumstances. Furthermore, the executive directors
+are responsible for such internal control as they have considered
+necessary to enable the preparation of a Non-financial Report
+that is free from material misstatement whether due to fraud
+or error.
+Independence and Quality Control of the Audit
+Firm
+We have complied with the German professional provisions
+regarding independence as well as other ethical requirements.
+Our audit firm applies the national legal requirements and
+professional standards - in particular the Professional Code
+for German Public Auditors and German Chartered Auditors
+("Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
+prüfer": "BS WP/vBP") as well as the Standard on Quality Con-
+trol 1 published by the Institut der Wirtschaftsprüfer (Institute
+of Public Auditors in Germany; IDW): Requirements to quality
+control for audit firms (IDW Qualitätssicherungsstandard 1:
+Anforderungen an die Qualitätssicherung in der Wirtschafts-
+prüferpraxis - IDW QS 1) - and accordingly maintains a compre-
+hensive system of quality control including documented policies
+and procedures regarding compliance with ethical requirements,
+professional standards and applicable legal and regulatory
+requirements.
+Practitioner's Responsibility
+Our responsibility is to express a limited assurance conclusion
+on the Non-financial Report based on the assurance engagement
+we have performed.
+•
+•
+•
+Within the scope of our assurance engagement, we performed
+amongst others the following assurance procedures and further
+activities:
+In a limited assurance engagement the assurance procedures
+are less in extent than for a reasonable assurance engagement,
+and therefore a substantially lower level of assurance is obtained.
+The assurance procedures selected depend on the practitioner's
+judgment.
+241
+The German Public Auditor responsible for the engagement is
+Aissata Touré.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+We conducted our assurance engagement in accordance with
+the International Standard on Assurance Engagements (ISAE)
+3000 (Revised): Assurance Engagements other than Audits or
+Reviews of Historical Financial Information, issued by the IAASB.
+This Standard requires that we plan and perform the assurance
+engagement to allow us to conclude with limited assurance
+that nothing has come to our attention that causes us to believe
+that the Company's Non-financial Report for the period from
+1st January to 31st December 2018 has not been prepared, in
+all material aspects, in accordance with §§ 315b and 315c in
+conjunction with 289b to 289e HGB.
+Within the scope of our engagement we did not perform an
+audit on external sources of information or expert opinions,
+referred to in the Non-financial Report.
+Combined Group Management Report
+German Public Auditor Responsible for the
+Engagement
+We declare that the audit opinions expressed in this auditor's
+report are consistent with the additional report to the audit
+committee pursuant to Article 11 of the EU Audit Regulation
+(long-form audit report).
+We were elected as group auditor by the annual general meeting
+on May 9, 2018. We were engaged by the supervisory board on
+June 25, 2018. We have been the group auditor of the E.ON SE,
+Essen, without interruption since the Company first met the
+requirements as a public-interest entity within the meaning of
+§ 319a Abs. 1 Satz 1 HGB in the financial year 1965.
+A credit derivative used to hedge the default risk on loans, bonds, and other debt instruments.
+Debt factor¹
+Ratio between economic net debt and EBITDA. Serves as a metric for managing E.ON's
+capital structure.
+Debt issuance program
+Contractual framework and standard documentation for the issuance of bonds.
+Discontinued operations
+Credit default swap ("CDS")
+Businesses or parts of a business that are planned for divestment or have already been
+divested. They are subject to special disclosure rules.
+Key figure that supplements net financial position with pension obligations as well as
+asset-retirement and dismantling obligations. In the case of material provisions affected
+by negative real interest rates, we use the actual amount of the obligation instead of the
+balance-sheet figure to calculate our economic net debt.
+Equity method
+Method for valuing shareholdings in associated companies whose assets and liabilities are
+not fully consolidated. The proportional share of the company's annual net income (or loss)
+is reflected in the shareholding's book value. This change is usually shown in the owning
+company's income statement.
+248
+¹For the purpose of internal management control, it includes the E.ON Group's continuing operations as well as the discontinued operations in the Renewables segment as well as the waste-disposal
+and dismantling obligations associated with our stakes in Emsland and Gundremmingen nuclear power stations, which are classified as a disposal group at PreussenElektra.
+Economic net debt¹
+.
+CEO Letter
+E.ON Stock
+Further Information pursuant to Article 10
+of the EU Audit Regulation
+Other Legal and Regulatory Requirements
+From the matters communicated with those charged with gov-
+ernance, we determine those matters that were of most signifi-
+cance in the audit of the consolidated financial statements of
+the current period and are therefore the key audit matters. We
+describe these matters in our auditor's report unless law or reg-
+ulation precludes public disclosure about the matter.
+We also provide those charged with governance with a state-
+ment that we have complied with the relevant independence
+requirements, and communicate with them all relationships and
+other matters that may reasonably be thought to bear on our
+independence, and where applicable, the related safe-guards.
+We communicate with those charged with governance regard-
+ing, among other matters, the planned scope and timing of the
+audit and significant audit findings, including any significant
+deficiencies in internal control that we identify during our audit.
+Perform audit procedures on the prospective information
+presented by the executive directors in the group manage-
+ment report. On the basis of sufficient appropriate audit evi-
+dence we evaluate, in particular, the significant assumptions
+used by the executive directors as a basis for the prospective
+information, and evaluate the proper derivation of the pro-
+spective information from these assumptions. We do not
+express a separate audit opinion on the prospective infor-
+mation and on the assumptions used as a basis. There is
+a substantial unavoidable risk that future events will differ
+materially from the prospective information.
+Report of the Supervisory Board
+Evaluate the consistency of the group management report
+with the consolidated financial statements, its conformity with
+German law, and the view of the Group's position it provides.
+•
+•
+239
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+Obtain sufficient appropriate audit evidence regarding the
+financial information of the entities or business activities
+within the Group to express audit opinions on the consolidated
+financial statements and on the group management report.
+We are responsible for the direction, supervision and perfor-
+mance of the group audit. We remain solely responsible for
+our audit opinions.
+→ Scheidt & Bachmann GmbH (Chairman)
+•
+Inquiries of personnel involved in the preparation of the
+Non-financial Report regarding the preparation process, the
+internal control system relating to this process and selected
+disclosures in the Non-financial Report,
+Member of National Board, Unified Service Sector Union, ver.di,
+Director of Utility/Waste Management Section
+Clive Broutta
+Full-time Representative of the General, Municipal,
+Boilermakers, and Allied Trade Union (GMB)
+Klaus Fröhlich (since May 29, 2018)
+Member of the Board of Management of
+Bayerische Motoren Werke AG
+→ Here BV (until February 28, 2018)
+Tibor Gila (until May 9, 2018)
+Chairman of the Combined Works Council of E.ON Hungária Zrt.
+Deputy Chairman of the SE Works Council of E.ON SE
+Chairman of the Works Council of E.ON Észak-dunántúli
+Áramhálózati Zrt.
+→ E.ON Észak-dunántúli Áramhálózati Zrt.
+Carolina Dybeck Happe
+Chief Financial Officer of ASSA ABLOY AB
+→ ASSA ABLOY Asia Holding AB (Chairperson)
+→ ASSA ABLOY East Europe AB (Chairperson)
+→ ASSA ABLOY Entrance Systems AB (Chairperson)
+→ ASSA ABLOY Financial Services AB (Chairperson)
+Attorney and bank clerk
+Andreas Schmitz
+Chairperson of the Works Council of E.ON Dél-dunántúli
+Áramhálózati Zrt.
+Szilvia Pinczésné Márton (since May 9, 2018)
+Chairman of Romanian Federation of Gas Unions at Gaz România
+Chairman of Romanian employee representatives
+Eugen-Gheorghe Luha
+Deputy Chairman of the E.ON SE Supervisory Board
+→ Monzo Bank Ltd. (Chairperson, until May 30, 2018)
+→ Inditex S.A.
+Attorney at the Supreme Court
+Baroness Denise Kingsmill CBE (until May 9, 2018)
+→ ASSA ABLOY Mobile Services AB (Chairperson)
+→ ASSA ABLOY Kredit AB (Chairperson)
+→ ASSA ABLOY IP AB (Chairperson)
+→ ASSA ABLOY Finans AB (Chairperson)
+Member of the House of Lords
+Andreas Scheidt
+Senior Vice President, Global Integrated Accounts and
+Chairman, IBM Europe
+Deputy Chairman of the E.ON SE Supervisory Board
+(since May 9, 2018)
+(German Public Auditor)
+Hendrik Fink
+Wirtschaftsprüfer
+(German Public Auditor)
+Wirtschaftsprüfer
+Markus Dittmann
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+•
+Essen, 5 March 2019
+Based on the assurance procedures performed and assurance
+evidence obtained, nothing has come to our attention that
+causes us to believe that the Company's Non-financial Report
+for the period from 1st January to 31st December 2018 has
+not been prepared, in all material aspects, in accordance with
+§§ 315b and 315c in conjunction with 289b to 289e HGB.
+Intended Use of the Assurance Report
+Assurance Conclusion
+Comparison of selected disclosures with corresponding data
+in the consolidated financial statements and in the group
+management report, and
+Survey regarding local data gathering and approval of GHG
+emissions FY18 in order to obtain an understanding of how
+the data has been gathered in the first place and how poten-
+tial sources of error have been dealt with (e.g. incomplete or
+wrong data),
+Analytical evaluation of selected disclosures in the Non-
+financial Report,
+Identification of the likely risks of material misstatement of
+the Non-financial Report,
+We issue this report on the basis of the engagement agreed with
+the Company. The assurance engagement has been performed
+for purposes of the Company and the report is solely intended
+to inform the Company about the results of the limited assurance
+engagement. The report is not intended for any third parties to
+base any (financial) decision thereon. Our responsibility lies only
+with the Company. We do not assume any responsibility
+towards third parties.
+Obtaining an understanding of the structure of the sustain-
+ability organization and of the stakeholder engagement,
+Evaluation of the presentation of the non-financial information.
+Supervisory Board (and Information on Other Directorships)
+Erich Clementi
+→ Henkel AG & Co. KGaA
+→ Porsche Automobil Holding SE
+→ ThyssenKrupp AG (Chairman, until July 31, 2018)
+→ Deutsche Telekom AG (Chairman)
+Member of the Shareholders' Committee of
+Henkel AG & Co. KGaA
+Boards
+Deputy Chairman of the E.ON SE Supervisory Board
+(until May 9, 2018)
+→ Verizon Communications Inc. (until May 3, 2018)
+→ Deutsche Lufthansa AG (Chairman)
+→ BMW AG
+Chairman of the E.ON SE Supervisory Board
+Dr. Karl-Ludwig Kley
+242
+Prof. Dr. Ulrich Lehner (until May 9, 2018)
+→Hansewerk AG¹ (Chairman)
+→ GASAG AG (until September 28, 2018)
+→ e.kundenservice Netz GmbH¹
+26,376
+27,639
+1,563
+3,099
+3,792
+2,788
+3,883
+Financial liabilities
+→ E.ON Dialog Netz GmbH¹ (Chairman, until October 31, 2018)
+2,041
+12,008
+4,280
+4,120
+Provisions
+15,261
+14,044
+23,125
+7,325
+33,444
+8,904
+125,690
+3,169
+3,227
+4,637
+Cash-effective investments
+2,853
+-2,952
+2,961
+4,191
+6,354
+Cash provided by operating activities of continuing operations5
+Cash flow, investments and financial ratios
+Total assets and liabilities
+Other liabilities and other
+54,324
+55,950
+63,699
+113,693
+11,581
+35,642
+Current liabilities
+6,516
+Non-current liabilities
+2,760
+2,701
+2,342
+2,648
+2,128
+Minority interests without controlling influence
+2,201
+2,201
+2,001
+2,001
+2,001
+Capital stock
+8,518
+6,708
+1,287
+19,077
+63,335
+61,172
+39,287
+35,198
+7,275
+9,234
+15,563
+16,175
+Other liabilities and other
+8,323
+9,922
+10,435
+3,308
+14,954
+Financial liabilities
+15,706
+18,001
+19,618
+30,655
+31,376
+Provisions
+30,545
+15,784
+3,523
+Equity ratio (%)
+21
+410
+976
+966
+Dividend payout
+0.43
+0.30
+0.21
+0.50
+0.50
+Dividend per share 10 (€)
+8.63
+9.06
+6.70
+7.87
+14.2
+Year-end closing price per share 8,9 (€)
+7.89
+650
+932
+Market capitalization 9, 11 (€ in billions)
+27.4
+Employees at year-end
+Employees
+BBB
+BBB
+BBB+
+BBB+
+A-
+Standard & Poor's
+6.64
+Baa2
+Baa1
+Baal
+A3
+Moody's
+18.7
+19.6
+13.1
+17.4
+Baa2
+26,713
+6.04
+12.56
+9.8
+5.6
+Cash provided by operating activities of continuing operations
+as a percentage of sales
+3.4
+16,580
+19,248
+3.9
+26,320
+5.3
+3.7
+4.0
+Debt factor6
+27,714
+33,394
+Economic net debt (at year-end)
+16
+12
+2
+17
+7.8
+9
+Stock and E.ON SE long-term ratings
+Earnings per share attributable to shareholders of E.ON SE (€)
+Twelve-month low³ (€)
+9.93
+10.69
+8.49
+12.98
+15.46
+Twelve-month high³ (€)
+2.66
+6.28
+1.85
+8.42
+12.72
+Equity per share (€)
+1.49
+1.84
+-4.33
+-3.6
+-1.64
+-0.50
+Equity
+2,117
+55,950
+Summary of Financial Highlights 1,2
+Member of the Management Board since 2017
+Sales and earnings
+245
+2014
+2015
+2016
+2017
+2018
+Sales
+113,095
+(Chairman, until October 31, 2018)
+42,656
+37,965
+30,253
+Adjusted EBITDA³
+8,376
+5,844
+4,939
+4,955
+4,840
+Adjusted EBIT³
+4,695
+3,563
+38,173
+3,112
+43,138
+→ E.ON Hungária Zrt.² (Chairman, since August 2, 2018)
+Finance, Mergers and Acquisitions and Investment Management,
+Risk Management, Accounting and Controlling, Investor
+Relations, Tax
+→ Uniper SE (until July 16, 2018)
+→ E.ON Verwaltungs SE (since March 8, 2018)
+→ Nord Stream AG
+Dr. Karsten Wildberger
+Born in 1969 in Gießen, Germany
+Member of the Management Board since 2016
+Regional Sales and Customer Solutions, Distributed Generation,
+Energy Management, Marketing, Digital Transformation,
+Innovation, IT
+→ E.ON Business Services GmbH¹ (Chairman)
+→ E.ON Sverige AB²
+→ E.ON Energie A.S.² (Chairman)
+Unless otherwise indicated, information is as of December 31, 2018, or as of the date on which membership in the E.ON Management Board ended.
+→ E.ON Sverige AB² (Chairman, since August 21, 2018)
+→ Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+¹Exempted E.ON Group directorship within the meaning of Section 100, Paragraph 2, Sentence 2 of the German Stock Corporation Act.
+2Other E.ON Group directorship.
+Summary of Financial Highlights
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+54,324
+Dr. Marc Spieker
+(since October 1, 2018, Chairman since October 11, 2018)
+→ E.ON Distribuce, a.s.² (Chairman, since September 11, 2018)
+→ E.ON Česká republika s.r.o.²
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+3,074
+€ in millions
+Net income/Net loss
+7.4
+6.7
+5.8
+6.4
+6.4
+640
+1,217
+1,370
+1,211
+1,145
+Value added4
+Asset and capital structure
+Non-current assets
+2,989
+Current assets
+73,612
+46,296
+40,164
+30,883
+42,625
+40,081
+17,403
+15,786
+23,441
+Total assets
+125,690
+113,693
+63,699
+83,065
+10.4
+Born in 1975 in Essen, Germany
+1,505
+10.6
+10.4
+10.9
+8.6
+Pretax cost of capital (%)
+ROACE/effective 2015 ROCE (%)
+Value measures
+1,427
+904
+1,646
+Adjusted net income³
+1,076
+3,925
+-8,450
+-6,999
+-3,160
+Net income/Net loss attributable to shareholders of E.ON SE
+3,524
+4,180
+-16,007
+-6,377
+-3,130
+3,223
+Report of the Supervisory Board
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+CEO Letter
+Strategy and Objectives
+Acronym for return on capital employed. A key indicator for periodically monitoring the
+performance of E.ON's operating business, ROCE is the ratio between adjusted EBIT and
+average capital employed. Capital employed is equal to the book value of the E.ON Group's
+total assets.
+Syndicated line of credit
+Credit facility extended by two or more banks that is good for a stated period of time.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+ROCE¹
+Combined Group Management Report
+Fair value
+Financial derivative
+Risk measure that indicates, with a certain degree of confidence (for example, 95 percent),
+that changes in market prices will not cause a profit margin to fall below expectations
+during the holding period, depending on market liquidity. For E.ON's business, the main
+market prices are those for power, gas, and carbon.
+Purchase price allocation
+In a business combination accounted for as a purchase, the values at which the acquired
+company's assets and liabilities are recorded in the acquiring company's balance sheet.
+Rating
+Standardized performance categories for an issuer's short- and long-term debt instruments
+based on the probability of interest payment and full repayment. Ratings provide investors
+and creditors with the transparency they need to compare the default risk of various financial
+investments.
+Return on equity
+Profit at Risk ("PaR")
+The return earned on an equity investment (in this case, E.ON stock), calculated after
+corporate taxes but before an investor's individual income taxes.
+Acronym for return on average capital employed. A key indicator for periodically monitoring
+the performance of E.ON's operating business, ROACE is the ratio between adjusted EBIT
+and average capital employed. Capital employed is equal to the E.ON Group's total assets at
+half their historical acquisition or production cost.
+¹For the purpose of internal management control, it includes the E.ON Group's continuing operations as well as the discontinued operations in the Renewables segment.
+250
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+ROACE
+The right, not the obligation, to buy or sell an underlying asset (such as a security or currency)
+at a specific date at a predetermined price from or to a counterparty or seller. Buy options
+are referred to as calls, sell options as puts.
+Option
+In particular, income and expenses from the marking to market of derivatives used for
+hedging, as well as any material book gains and book losses on disposals, certain restructuring
+expenses, impairment charges and/or reversals on fixed assets, on share investments in
+affiliated and associated companies, and on goodwill in the context of an impairment test,
+and other non-operating income and expenses.
+Contractual agreement based on an underlying value (reference interest rate, securities
+prices, commodity prices) and a nominal amount (foreign currency amount, a certain number
+of stock shares).
+Goodwill
+The value of a subsidiary as disclosed in the parent company's consolidated financial state-
+ments resulting from the consolidation of capital (after the elimination of hidden reserves
+and liabilities). It is calculated by offsetting the carrying amount of the parent company's
+investment in the subsidiary against the parent company's portion of the subsidiary's equity.
+Impairment test
+Periodic comparison of an asset's book value with its fair value (its net sales value or value
+in use, whichever is higher). A company must record an impairment charge if it determines
+that an asset's fair value has fallen below its book value. This is particularly relevant for
+goodwill, which is tested for impairment on at least an annual basis.
+International Financial Reporting Standards ("IFRS")
+Under regulations passed by the European Parliament and European Council, capital-
+market-oriented companies in the EU must apply IFRS.
+Investments¹
+Cash-effective investments shown in the Consolidated Statements of Cash Flows.
+¹For the purpose of internal management control, it includes the E.ON Group's continuing operations as well as the discontinued operations in the Renewables segment.
+249
+Glossary of Financial Terms
+Net financial position¹
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Non-operating effects
+The price at which assets, debts, and derivatives pass from a willing seller to a willing buyer,
+each having access to all the relevant facts and acting freely.
+Difference between total financial assets (cash and non-current securities) and total financial
+liabilities (debts to financial institutions, third parties, and associated companies, including
+effects from currency translation).
+ClimatePartner.com/53152-1902-1001
+Risk measure that indicates the potential loss that a portfolio of investments will not exceed
+with a certain degree of probability (for example, 99 percent) over a certain period of time
+(for example, one day). Due to the correlation of individual transactions, the risk faced by a
+portfolio is lower than the sum of the risks of the individual investments it contains.
+Paper from
+responsible sources
+FSC® C002390
+This Annual Report was printed on paper produced from fiber that comes from
+a responsibly managed forest certified by the Forest Stewardship Council.
+252
+Financial Calendar
+May 13, 2019
+May 14, 2019
+August 7, 2019
+November 13, 2019
+Quarterly Statement: January - March 2019
+2019 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2019
+Quarterly Statement: January – September 2019
+March 25, 2020
+May 12, 2020
+May 13, 2020
+August 12, 2020
+November 11, 2020
+Release of the 2019 Annual Report
+Quarterly Statement: January - March 2020
+2020 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2020
+Quarterly Statement: January – September 2020
+This Annual Report was published on March 13, 2019.
+This Annual Report contains certain forward-looking statements based on E.ON management's current assumptions and
+forecasts and other currently available information. Various known and unknown risks, uncertainties, and other factors
+could lead to material differences between E.ON's actual future results, financial situation, development, or performance
+and the estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to
+conform them to future events or developments.
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+T +49 201-184-00
+info@eon.com
+eon.com
+MIX
+Value at Risk ("VaR")
+FSC
+www.fsc.org
+Print product
+Working capital
+The difference between a company's current operating assets and current operating liabilities.
+¹For the purpose of internal management control, it includes the E.ON Group's continuing operations as well as the discontinued operations in the Renewables segment.
+251
+Contact
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+T +49 201-184-00
+info@eon.com
+eon.com
+Journalists
+T +49 201-184-4236
+eon.com/en/about-us/media.html
+Analysts and shareholders
+T +49 201-184-2806
+investorrelations@eon.com
+Bond investors
+T +49 201-184-7230
+creditorrelations@eon.com
+Only the German version of this Annual Report is legally binding.
+Production & Typesetting
+Jung Produktion, Düsseldorf
+Printing
+G. Peschke Druckerei, Parsdorf
+Climate neutral
+Value added
+Key measure of E.ON's financial performance based on residual wealth calculated by
+deducting the cost of capital (debt and equity) from operating profit. It is equivalent
+to the return spread (ROCE minus the cost of capital) multiplied by capital employed,
+which represents the average interest-bearing capital tied up in the E.ON Group.
+East-Central Europe
+Sweden
+2
+1
+0
+2.9
+2.4
+2.5
+1.9
+1.6
+Turkey
+OECD
+USA
+1.3
+United
+Kingdom
+Sweden
+Euro zone
+1.0
+Italy
+Germany
+2018 GDP Growth in Real Terms
+Annual change in percent
+Macroeconomic Environment
+Macroeconomic and Industry Environment
+Our innovation activities include partnering with universities
+and research institutes to conduct research projects in a variety
+of areas. The purpose is to study ways to expand the horizons
+of energy conservation and sustainable energy and to draw on
+this research to develop new offerings and solutions for cus-
+tomers. This research is conducted primarily at the E.ON Energy
+Research Center at RWTH Aachen University, which focuses
+on renewables, technologically advanced electricity networks,
+and efficient technology for buildings.
+Partnerships with Universities
+Virta is a Finnish company with a powerful IT platform for con-
+necting electric vehicles to charging infrastructures and energy
+grids. E.ON uses the platform as the digital backbone for its
+offerings to B2B customers and for supplementing billing with
+vehicle-to-grid and other value-added services.
+Germany-based tado is redefining how households use energy
+by enhancing comfort, savings, and well-being. Its smart wall
+and radiator thermostats along with the Climate Assistant app
+offer functions like geofencing, weather adaption, open-window
+detection, air comfort, and repair service for boilers.
+3
+Sweden's energy policy is focused on the 2016 cross-party
+energy agreement that foresees a fully renewable electricity
+system over the long term. The agreement features a number
+of climate policies, including a target of 100 percent renewable
+electricity generation by 2040. The main policy instrument, the
+elcertificate market scheme, has resulted in substantial growth
+in wind power and the conversion of fossil fuel to biomass. With
+nearly 9.5 TWh of new wind power capacity under construction
+as of October 2018, Sweden will likely achieve its 2030 renew-
+ables target in the early 2020s. General elections were held in
+September 2018. A government was formed in January 2019.
+Source: OECD, 2018.
+3.3
+implementation in September 2018 owing to the potential risk
+that the proposed capacity market will favor carbon-intensive
+generation technologies such as coal.
+The Italian government aims for renewables to meet 55 percent
+of the country's electricity consumption by 2030. To achieve
+this goal, the government intends to put in place a direct subsidy
+scheme based on bilateral contracts for differences in the short
+term and a market for efficient power purchase agreements in
+the long term. Alongside growth in renewables, the Italian market
+faces a decline in installed thermal capacity. To ensure supply
+security and system stability and to continue the phaseout of
+coal-fired generation, the Italian government proposed estab-
+lishing a capacity market. Although the European Commission
+approved the most recent version of the proposal in February
+2018, the timetable for implementation remains uncertain.
+This is because the Italian government temporarily suspended
+Italy
+The Court of Justice of the European Union ruled the European
+Commission's approval of the introduction of a capacity market in
+the United Kingdom invalid. The market is therefore suspended.
+Until state aid approval is again obtained, no capacity auctions
+can be held and no capacity payments can be made to market
+participants holding contracts from previous auctions. The U.K.
+government is working with the European Commission to sup-
+port its investigation and ensure a timely relaunch of the capacity
+market. It is unclear at this stage what impact Brexit could have
+on the European Commission's jurisdiction over the U.K. capacity
+market.
+Following a period of negotiations, on November 25, 2018, the
+U.K. Government and the European Union formally approved the
+Withdrawal Agreement and Political Declaration on the future
+relationship between the U.K. and the EU. If approved by the
+House of Commons, the agreement will be transposed into U.K.
+law and then ratified by the EU before March 29, 2019. If the
+agreement is rejected by the House of Commons, a number of
+scenarios are possible. They include a revised deal, a second
+Brexit referendum, and a disorderly no-deal exit. There remains
+substantial uncertainty over the details of Brexit.
+Great Britain
+28
+Business Report
+At the end of 2018 the Bundestag and the Bundesrat passed
+the Omnibus Energy Act, which makes various amendments to
+energy legislation, such as the Renewable Energy Act and the
+CHP Act. The Omnibus Energy Act extends the aforementioned
+preferential treatment of self-supply for new CHP plants and
+establishes special tenders for 4 GW of onshore wind and solar
+capacity, as foreseen by the coalition agreement. The special ten-
+ders will be conducted between 2019 and 2021. Furthermore,
+the Omnibus Energy Act gradually reduces the remuneration for
+solar arrays between 40 kW and 750 kW to 8.9 cents per kWh
+by April 2019.
+Effective January 1, 2018, the preferential treatment of self-
+supply combined-heat-and-power ("CHP") units that entered
+service after August 1, 2014, was rescinded. After the European
+Commission and the German federal government reached an
+agreement in principle during the year, the rescission was reversed
+with retroactive effect for CHP units of less than 1 MW and
+more than 10 MW, which received EU state aid approval. These
+units will continue to pay 40 percent of the renewables levy.
+Depending on their number of full-use hours, newer CHP units
+between 1 and 10 MW will have to pay between 40 and
+100 percent of the renewables levy unless they are used for
+self-supply by specially approved enterprises.
+a target date for the phaseout of coal-fired power generation.
+On January 26, 2019, the commission issued its final report, in
+which it recommends to the German federal government that
+the country completely phase out coal-fired generation by 2038
+at the latest. The commission calls for the phaseout to be gradual.
+It proposes that in 2022 a total of no more than 15 GW of lignite-
+fired generating capacity and 15 GW of hard-coal-fired capacity
+should be operational. By 2030 the figures are to decline to
+9 GW for lignite and 8 GW for hard coal. The phaseout plan is
+to be reviewed at regular intervals. In addition, the commission
+recommends leaving the option open in 2032 to move the com-
+plete phaseout of coal-fired generation forward to 2035.
+On June 6, 2018, the German federal government appointed a
+Commission for Growth, Structural Change, and Employment
+to assist with its climate-protection plans. The commission came
+up with economic-development measures for lignite mining
+regions in Germany and worked out a timetable and, in particular,
+Following the 2017 Bundestag elections, the CDU, CSU, and SPD
+decided to continue the grand coalition. The coalition agreement
+affirmed the climate targets for 2030 and 2050. One target is
+for renewables to meet about 65 percent of the country's gross
+electricity consumption by 2030. The agreement also foresees
+an ambitious action plan for upgrading and expanding energy
+networks, recognizing the increased importance of distribution
+networks. The scope for digital business models is to be expanded,
+with data protection to be a top priority.
+Germany
+By contrast, the EU did not revise its binding decarbonization
+targets. The newly adopted targets for energy efficiency and the
+share of renewables are expected to raise the emission reduction
+to 45 percent compared with 1990. At the end of 2018 the EU
+set an emission-reduction target for personal transport. The dis-
+cussion between the European Parliament, the European Com-
+mission, and the member states resulted in a target of reducing
+these emissions by 37.5 percent by 2030 compared with 2021.
+In 2018 the EU made important progress in enacting the pro-
+posals contained in the Clean Energy for All Europeans package
+of energy and climate legislation. The adoption of the gover-
+nance regulation introduced a new instrument for monitoring
+the member states' climate policies. It obliges them to submit,
+by the end of 2019, national energy and climate plans for 2021
+to 2030. The new versions of the Energy Efficiency and Renew-
+able Energy Directives set new binding EU-wide targets for 2030.
+The EU intends to achieve energy savings of 32.5 percent rela-
+tive to forecast primary energy consumption and for renewables
+to meet 32 percent of gross final energy consumption in the
+electricity, heat, and transport sectors. Both targets could be
+reviewed and, if necessary, revised upward in 2023.
+Europe
+27
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+The 24th United Nations climate change conference took place
+in Katowice, Poland, from December 2 to 15, 2018. It too focused
+on defining measures to limit the increase in global temperatures
+to under 2 degrees Celsius. The conference agreed on a rulebook
+for the implementation of the Paris Agreement and for countries'
+reporting obligations.
+Energy Policy and Regulatory Environment
+Global
+The OECD believes the global economy experienced a growth
+spike in 2018. Labor market growth remained stable, whereas
+risks relating to international trade and private investments
+served as a slight damper. The OECD estimates that the global
+economy grew at a rate of 3.7 percent in 2018.
+Strategy and Objectives
+Sight Machine is a software startup based in the United States
+that has created an Internet of Things digital manufacturing
+platform that uses artificial intelligence, machine learning, and
+advanced analytics, which will help our B2B customers address
+critical challenges in quality, productivity, and visualization.
+Corporate Profile
+22
+Corporate Profile
+Business Model
+E.ON is an investor-owned energy company with approximately
+43,000 employees. Led by corporate headquarters in Essen,
+our operations are segmented into three operating units: Energy
+Networks, Customer Solutions, and Renewables. Our non-
+strategic operations are reported under Non-Core Business.
+Corporate Headquarters
+Corporate headquarters' main task is to lead the E.ON Group.
+This involves charting E.ON's strategic course and managing and
+funding its existing business portfolio. Corporate headquarters'
+tasks include optimizing E.ON's overall business across countries
+and markets from a financial, strategic, and risk perspective and
+conducting stakeholder management.
+Energy Networks
+This segment consists of our power and gas distribution net-
+works and related activities. It is subdivided into three regional
+markets: Germany, Sweden, and East-Central Europe/Turkey
+(which consists of the Czech Republic, Hungary, Romania, Slo-
+vakia, and Turkey). This segment's main tasks include operating
+its power and gas networks safely and reliably, carrying out any
+necessary maintenance and repairs, and expanding its networks,
+which frequently involves adding customer connections.
+Customer Solutions
+This segment serves as the platform for working with our
+customers to actively shape Europe's energy transition. This
+includes supplying customers in Europe (excluding Turkey)
+with power, gas, and heat as well as with products and services
+that enhance their energy efficiency and autonomy and provide
+other benefits. Our activities are tailored to the individual needs
+of customers across all segments: residential, small and medium-
+sized enterprises, large commercial and industrial, and public
+entities. E.ON's main presence in this business is in Germany, the
+United Kingdom, Sweden, Italy, the Czech Republic, Hungary,
+and Romania. E.ON Connecting Energies, which provides cus-
+tomers with turn-key distributed-energy solutions, is also part
+of this segment.
+Renewables
+⚫ 2019 adjusted EBIT expected to be between
+€2.9 and €3.1 billion, adjusted net income
+between €1.4 and €1.6 billion
+This segment consists of Onshore Wind/Solar and Offshore
+Wind/Other. We plan, build, operate, and manage renewable
+generation assets. We market their output in several ways:
+in conjunction with renewable incentive programs, under long-
+term electricity supply agreements with key customers, and
+directly to the wholesale market. Substantially all of the opera-
+tions in this segment are classified as discontinued operations
+effective June 30, 2018 (for more information, see pages 22
+and 23 of the Combined Group Management Report and Note 4
+to the Consolidated Financial Statements).
+This segment consists of our non-strategic activities. This
+applies to the operation of our nuclear power stations in
+Germany (which is managed by our Preussen Elektra unit) and
+the generation business in Turkey.
+Special Events in the Reporting Period
+Asset Swap with RWE
+On March 12, 2018, E.ON SE and RWE AG reached an agree-
+ment under which E.ON will acquire RWE's 76.8-percent stake
+in innogy SE as part of an extensive asset swap. As part of this
+swap, E.ON will transfer to RWE substantially all of its renew-
+ables business as well as the minority stakes, held by its subsid-
+iary PreussenElektra, in Emsland und Gundremmingen nuclear
+power stations, which are operated by RWE. However, the
+E.ON Group will retain certain assets reported in its Renewables
+segment, namely: businesses operated by e.disnatur in Germany
+and Poland as well as a 20-percent stake in Rampion offshore
+wind farm. In return for its innogy stake, RWE will receive a
+16.67-percent stake in E.ON. The stock will be issued by means
+of a 20-percent capital increase against contributions in kind
+from E.ON SE's existing authorized capital. In addition, RWE will
+make a cash payment of €1.5 billion to E.ON. Furthermore, RWE
+will receive innogy's gas storage business and its stake in Kelag,
+an Austria-based energy supplier. The transaction, which was filed
+with the European Commission in January 2019, will take place
+in several steps and is subject to the usual antitrust approvals.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+The Romanian electricity market has been fully liberalized since
+January 1, 2018. However, a government ordinance took effect
+on December 29, 2018, that places the residential power supply
+under the oversight of the Romanian Energy Regulatory Author-
+ity from March 1, 2019, to February 28, 2022. In addition,
+in September 2018 the Romanian Energy Ministry presented
+its draft energy strategy for 2018-2030 looking toward 2050.
+It identifies a number of projects of strategic national interest,
+including significant investments in nuclear and hydroelectric
+capacity. Hungary announced that it will phase out coal-fired
+generation by 2030. The gap will be made up by an existing
+nuclear power plant ("NPP") and two new units at Paks II NPP,
+which are in the preparatory phase of construction. Slovakia
+is preparing a national 2050 low-carbon strategy aided by the
+World Bank, which may include the commissioning of two NPPs.
+The Czech Republic is also considering nuclear as part of the
+transition from coal-fired generation. It intends to decide in the
+near future whether to build, and how to finance, a new unit at
+one of its existing NPPs.
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+23
+Renewables
+Non-Core Business
+filed with European Commission
+• Transaction with RWE for acquisition of innogy
+for the 2018 financial year
+Lumenaza is a German software provider for the new, distributed,
+and digitized energy world. Its modular software platform func-
+tions as a utility-in-a-box, offering all the functionalities needed
+in the energy market. Lumenaza can connect and intelligently
+manage all participants in the new energy world in a single digital
+marketplace. It provides the platform for a peer-to-peer energy
+market.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+19
+energy networks are already beginning to converge. For example,
+smart meters are already providing the basis for new energy-
+sales offerings, such as time-based electricity tariffs and
+energy-efficiency solutions.
+Focusing on two core businesses will enable E.ON to retain its
+existing strengths and advantages and to build on them. Examples
+include our outstanding record of managing energy networks
+and systematically developing customer solutions. In 2018 our
+customer solutions business compiled several achievements
+in heat supply, e-mobility, energy efficiency, and energy storage.
+For example, E.ON and Berliner Stadtwerke were awarded the
+concession to provide heat and cooling to an urban development
+project at the site of Tegel airport in Berlin thanks to a plan fea-
+turing an innovative low-temperature network. The European
+Spallation Source ("ESS"), a major research institute in Lund,
+Sweden, chose E.ON as its partner for sustainable cooling, heat,
+and compressed air.
+On the e-mobility side, at year-end 2018 E.ON could already
+offer its customers 4,000 charging points in Germany. In late
+2018 E.ON joined EV100, a global initiative to accelerate the
+transition to electric vehicles ("EVs"), and pledged to convert all
+company vehicles under 3.5 metric tons to EVs by 2030. In
+other e-mobility milestones in 2018, we entered the Norwegian
+market, forged a strategic partnership with Nissan, and intro-
+duced a digital platform that makes our charging network easier
+to access and use. To promote energy efficiency, E.ON partnered
+with European banks to offer standardized loans that make it
+easier for property owners to finance energy-efficiency improve-
+ments. This creates additional incentives for efficient energy
+use. In energy storage, in early 2018 we launched E.ON Solar-
+Cloud, which enables customers with solar panels to use
+100 percent of the green power they produce, even if they
+do not have a battery.
+The network business achieved advances in 2018 as well. Avacon,
+an E.ON subsidiary in north-central Germany, is testing a smart
+grid hub that can control equipment like solar panels and battery
+storage devices remotely. Part of the EU's Interflex project,
+the hub is a cost-effective way to help ensure stable network
+operations. In the Czech Republic E.ON launched a project called
+ACON, which stands for "again connected networks." Its purpose
+is to enhance the distribution networks in the regions along
+the Czech-Slovak border and to upgrade them using smart-grid
+technology.
+Corporate Initiatives
+The agreement with RWE was the dominant event of 2018.
+Yet E.ON also moved forward with key corporate initiatives and
+launched new ones with the aim of enhancing its competitiveness
+and customer orientation. These initiatives lay an important
+foundation for E.ON's lasting success in the years ahead. All of
+them are designed for rapid results and implementation. Below
+are two examples of such initiatives.
+•
+•
+Launched at the end of 2016, the Phoenix program redesigned
+the setup of E.ON's corporate and support functions to make
+them closer to customers and to reduce unnecessary bureau-
+cracy and inefficiency. We are giving our customer-proximate
+functions greater decision-making authority, enabling faster
+decision-making and implementation. We successfully
+completed the program in 2018, substantially reducing our
+cost base.
+Sustainability is not only an important criterion in the design
+of our corporate strategy, but also for our actions. In 2018
+the Management Board pledged E.ON's support for the UN
+Sustainable Development Goals ("SDGs"), thereby under-
+scoring our commitment to sustainability. E.ON's business
+operations contribute directly to the achievement of SDG 7
+(affordable and clean energy), 11 (sustainable cities and
+communities), and 13 (climate action). In 2018 E.ON also
+launched a climate-protection initiative and set a target of
+making all its buildings climate-neutral by 2030.
+Finance Strategy
+The section of the Combined Group Management Report entitled
+Financial Situation contains explanatory information about our
+finance strategy.
+People Strategy
+Combined Group
+Management Report
+•
+Adjusted EBIT and adjusted net income both
+at upper end of forecast range
+Economic net debt reduced significantly
+• Management to propose dividend of €0.43 per share
+Pursuant to IFRS 5, the operations in the Renewables segment
+that will be transferred are reported as discontinued operations
+effective June 30, 2018 (for more information, see Note 4 to
+the Consolidated Financial Statements). Until their final transfer
+to RWE, however, these operations will be managed as before.
+For the purpose of internal management control, their results
+will therefore be fully included in the relevant key performance
+indicators. In addition, the scheduled depreciation charges
+required by IFRS 5 and the carrying amount of these discontinued
+operations will be recorded in equity and disclosed accordingly.
+The Combined Group Management Report's presentation of the
+key performance indicators relevant for management control and
+of sales therefore includes the results of discontinued operations
+in the Renewables segment. Pages 32 to 34 of the Combined
+Group Management Report and Note 33 to the Consolidated
+Financial Statements contain reconciliations of these indicators
+to the disclosures in the E.ON SE and Subsidiaries Consolidated
+Statements of Income, Consolidated Balance Sheets, and Con-
+solidated Statements of Cash Flows.
+Minority Stakes in Nuclear Power Stations
+The section of the Combined Group Management Report entitled
+Employees contains explanatory information about our people
+strategy.
+Voluntary Public Takeover Offer for innogy SE Stock
+Following approval of the offer documents by the German
+Federal Financial Supervisory Authority (known by its German
+acronym, "BaFin"), on April 27, 2018, E.ON published its vol-
+untary public takeover offer ("PTO") for innogy SE stock. The
+PTO's extended acceptance period ended on July 25, 2018.
+In addition to the 76.8-percent stake to be acquired from RWE,
+9.4 percent of innogy stock was tendered under the PTO.
+25
+Cash-conversion rate is equal to operating cash flow before
+interest and taxes divided by adjusted EBITDA. It indicates
+whether our operating earnings are generating enough liquidity.
+Return on capital employed ("ROCE") assesses the value perfor-
+mance of our operating business. ROCE is a pretax total return
+on capital and is defined as the ratio of adjusted EBIT to annual
+average capital employed.
+Adjusted net income is an earnings figure after interest income,
+income taxes, and non-controlling interests that has likewise
+been adjusted to exclude non-operating effects (see the explan-
+atory information on page 33 of the Combined Group Manage-
+ment Report).
+E.ON manages its capital structure by means of its debt factor
+(see the section entitled Finance Strategy on page 34). Debt
+factor is equal to our economic net debt divided by adjusted
+EBITDA and is therefore a dynamic debt metric. Economic net
+debt includes our net financial debt as well as our pension and
+asset-retirement obligations.
+Other KPIs
+Alongside our most important financial management KPIs, the
+Combined Group Management Report includes other financial
+and non-financial KPIs to highlight aspects of our business per-
+formance and our sustainability performance vis-à-vis all our
+stakeholders: our employees, customers, shareholders, bond
+investors, and the countries in which we operate. Operating
+cash flow and value added are examples of our other financial
+KPIs. Our sustainability KPIs include total recordable frequency
+index ("TRIF"), which measures reported work-related injuries
+and illnesses. The section entitled Employees contains explana-
+tory information about this KPI.
+In addition, some KPIs are important for E.ON as a customer-
+focused company. For example, we see our ability to acquire new
+customers and retain existing ones as crucial to our success.
+Net promoter score ("NPS") measures customers' willingness to
+recommend E.ON to a friend or colleague. Our Sustainability
+Report and the Separate Combined Non-Financial Report
+describe how NPS fits into our management approach.
+However, these other KPIs are not the focus of the ongoing
+management of our businesses.
+Innovation
+E.ON's innovation activities reflect its strategy of focusing
+systematically on the new energy world of empowered and
+proactive customers, renewables and distributed energy,
+energy efficiency, local energy systems, and digital solutions.
+E.ON therefore has the following Innovation Hubs:
+25
+•
+•
+Retail and end-customer solutions: develop new business
+models for distributed-energy supply, energy efficiency, and
+mobility
+Renewables generation: increase the cost-effectiveness of
+existing wind and solar assets and study new renewables
+technologies
+Infrastructure and energy networks: develop energy-storage
+and energy-distribution solutions for an increasingly distrib-
+uted and volatile generation system
+Energy intelligence and energy systems: study potentially
+fundamental changes to energy systems and the role of data
+in the new energy world.
+Strategic Co-Investments
+We want to identify promising energy technologies of the
+future that will enhance our palette of offerings for our millions
+of customers around Europe and will make us a pacesetter in
+the operation of smart energy systems. We select new busi-
+nesses that offer the best opportunities for partnerships, com-
+mercialization, and equity investments. Our investments focus
+on strategic technologies and business models that enhance
+Business Report
+26
+our ability to lead the move toward distributed, sustainable, and
+innovative energy offerings. These arrangements benefit new
+technology companies and E.ON, since we gain access to their
+new business models and have a share in the value growth.
+Under the agreement with E.ON, RWE will acquire not only
+substantially all of E.ON's renewables business but also its
+minority stakes in Kernkraftwerke Lippe-Ems GmbH and
+Kernkraftwerk Gundremmingen GmbH nuclear power stations,
+which are operated by RWE. These minority stakes and the
+associated debt, which had previously been reported at Non-
+Core Business, were reclassified as a disposal group effective
+June 30, 2018.
+In 2018 we invested in Sight Machine, Lumenaza, tado°, and
+Virta.
+•
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+•
+Strategy and Objectives
+innogy's Agreements in Principle with E.ON and RWE
+On July 18, 2018, innogy concluded two legally binding agree-
+ments-one with E.ON, another with RWE-on the planned
+integration of innogy into E.ON and the planned integration of
+innogy's renewables business into RWE. The agreements call
+for the planned transaction to be implemented in a transparent
+process in which all employees will be treated fairly and as
+equally as possible, regardless of which company they currently
+work for. In addition, the integrations will take into account the
+companies' respective strengths. Essen will remain the regis-
+tered office and headquarters of the new E.ON. innogy will play
+a positive role in supporting the swift implementation of the
+planned transaction between RWE and E.ON.
+Combined Group Management Report
+Sale of Uniper Stake
+In September 2017 E.ON and Fortum Corporation of Espoo,
+Finland, concluded an agreement under which E.ON had the
+right to sell its 46.65-percent stake in Uniper to Fortum in early
+2018. Until the end of September 2017 we classified this stake
+as an associated company and accounted for it using the equity
+method. We then reclassified it as an asset held for sale. In
+January 2018 E.ON decided to exercise its option to tender its
+Uniper stake. After all the necessary antitrust approvals were
+obtained, the transaction closed on June 26, 2018, with E.ON
+receiving liquid funds totaling €3.8 billion. The disposal of the
+stake and the derecognition of the associated derivative financial
+instruments resulted in income totaling €1.1 billion. Note 4 to the
+Consolidated Financial Statements contains more information.
+Changes in Segment Reporting
+At the beginning of 2018 we made a number of reclassifications.
+The generation business in Turkey is now reported under Non-
+Core Business. Customer Solutions' heat business in Germany
+is no longer reported at its Germany unit but rather at its Other
+unit. In addition, costs for the ongoing expansion of our business
+of providing new digital products and services as well as inno-
+vative projects, which were previously allocated to Corporate
+Functions/Other, are now allocated to the appropriate operating
+units at Customer Solutions. We adjusted the prior-year figures
+accordingly. These reclassifications were already factored into
+the earnings forecast for 2018 contained in our 2017 Annual
+Report.
+Corporate Profile
+To finance the PTO, E.ON originally secured a €5 billion acquisi-
+tion facility, which will fund the acquisition of innogy stock not
+held by RWE. Considering the tender ratio under the PTO, E.ON
+reduced the facility to €1.75 billion.
+IFRS 9, "Financial Instruments," and IFRS 15, "Revenue from
+Contracts with Customers"
+We apply IFRS 9, "Financial Instruments," and IFRS 15, "Revenue
+from Contracts with Customers," for the first time effective
+the start of 2018. The impact of the initial application of these
+standards on E.ON SE and Subsidiaries Consolidated Financial
+Statements as of December 31, 2018-in particular, on sales,
+costs of materials, and a reduction in the value of financial
+assets-is explained in detail in Note 2 to the Consolidated
+Financial Statements.
+Sale of E.ON Elektrárne
+On July 26, 2018, E.ON sold its stake in E.ON Elektrárne s.r.o. to
+Západoslovenská energetika a.s. ("ZSE"). The parties agreed not
+to disclose the sales price. The transaction included the repay-
+ment of shareholder loans. ZSE is owned jointly by the Slovakian
+state (51 percent) and the E.ON Group (overall, 49 percent).
+The assets of E.ON Elektrárne s.r.o. include primarily Malženice
+combined-cycle gas turbine.
+Sale of E.ON Gas Sverige
+On April 25, 2018, the E.ON Group closed the sale of E.ON Gas
+Sverige AB, its gas distribution network company in Sweden,
+with retroactive economic effect to January 1, 2018. The buyer
+was the European Diversified Infrastructure Fund II.
+24
+In 2017 E.ON agreed to sell its 74.9-percent stake in Hamburg
+Netz GmbH to the Free and Hanseatic City of Hamburg. The
+transaction closed on January 1, 2018. The payment was
+received in 2017.
+Report of the Supervisory Board
+Sale of Hamburg Netz
+CEO Letter
+Cash-effective investments are equal to the investment expen-
+ditures shown in our Consolidated Statements of Cash Flows.
+These include the investments of discontinued operations in
+the Renewables segment.
+E.ON Stock
+Our most important key performance indicators ("KPIs") for
+managing our operating business are adjusted EBIT and cash-
+effective investments. Other KPIs for managing the E.ON Group
+are cash-conversion rate, ROCE, adjusted net income, earnings
+per share (based on adjusted net income), and debt factor. The
+Combined Group Management Report's presentation of the
+KPIs relevant for management control includes the results of
+discontinued operations in the Renewables segment (for more
+information, see pages 22 and 23 of the Combined Group Man-
+agement Report).
+Adjusted earnings before interest and taxes ("adjusted EBIT")
+is E.ON's most important KPI for purposes of internal manage-
+ment control and as an indicator of its businesses' long-term
+earnings power. The E.ON Management Board is convinced that
+adjusted EBIT is the most suitable KPI for assessing operating
+performance because it presents a business's operating earnings
+independently of non-operating factors, interest, and taxes.
+The adjustments include net book gains, certain restructuring
+expenses, impairment charges, the marking to market of deriv-
+atives, and other non-operating earnings (see the explanatory
+information on pages 31 to 33 to the Combined Group Man-
+agement Report and in Note 33 of the Consolidated Financial
+Statements).
+Key Performance Indicators
+Our corporate strategy aims to deliver sustainable growth in
+shareholder value. We have in place a Group-wide planning and
+controlling system to assist us in planning and managing E.ON
+as a whole and our individual businesses with an eye to increas-
+ing their value. This system ensures that our financial resources
+are allocated efficiently. We strive to enhance our sustainability
+performance efficiently and effectively as well. We have high
+expectations for our sustainability performance. We embed these
+expectations progressively more deeply into our organization-
+across all organizational entities and all processes-by means of
+binding company policies and minimum standards.
+Management System
+A 20-percent stake (E.ON's share: 10 percentage points) of
+Enerjisa Enerji A.Ş. was successfully placed on the stock market
+on February 8, 2018. The issuance price was TRY 6.25 per
+100 shares. Enerjisa Enerji A.Ş. continues to be a joint venture
+between E.ON and Sabanci, each of which holds 40 percent.
+The book gain on this transaction was more than offset by cumu-
+lative adverse currency-translation effects.
+Initial Public Offering of Enerjisa Enerji
+To finance the voluntary public takeover offer for innogy SE stock,
+E.ON originally secured a €5 billion acquisition facility to fund
+the acquisition of innogy stock not held by RWE. Considering
+the tender ratio under the voluntary public takeover offer, E.ON
+reduced the facility to €1.75 billion.
+Alongside financial liabilities, E.ON has, in the course of its busi-
+ness operations, entered into contingencies and other financial
+obligations. These include, in particular, guarantees, obligations
+from legal disputes and damage claims, as well as current and
+non-current contractual, legal, and other obligations. Notes 26,
+27, and 31 to the Consolidated Financial Statements contain
+more information about E.ON's bonds as well as liabilities, con-
+tingencies, and other commitments.
+E.ON's creditworthiness has been assessed by Standard & Poor's
+(S&P) and Moody's with long-term ratings of BBB and Baa2,
+respectively. The outlook for both ratings is stable. Both S&P
+and Moody's anticipate that over the near and medium term
+E.ON will be able to take over innogy and to maintain a debt
+ratio commensurate with these ratings. S&P's and Moody's
+short-term ratings are unchanged at A-2 and P-2, respectively.
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE's and EIF's currently outstanding bonds
+were issued under our Debt Issuance Program ("DIP"). The DIP
+simplifies our ability to issue debt to investors in public and
+private placements in flexible time frames. E.ON SE's DIP was
+last updated in April 2018 with a total volume of €35 billion, of
+which about €9 billion was utilized at year-end 2018. E.ON SE
+intends to renew the DIP in 2019.
+E.ON SE Ratings
+E.ON also has access to a five-year, €2.75 billion syndicated
+revolving credit facility, which was concluded on November 13,
+2017, and which includes two options to extend the facility,
+in each case for one year. The first option to extend the credit facil-
+ity was exercised in November 2018. The facility is undrawn
+and rather serves as a reliable, ongoing general liquidity reserve
+for the E.ON Group. The credit facility is made available by
+18 banks which constitute E.ON's core group of banks.
+Long term
+Stable
+Outlook
+Baa2
+P-2
+BBB
+A-2
+Moody's
+Stable
+Short term
+¹Includes private placements.
+0.2
+10.7
+USD
+Standard & Poor's
+0.9
+2.5
+JPY
+0.2
+Other currencies
+13.0
+0.1
+Promissory notes
+0.1
+0.4
+Other liabilities
+1.6
+1.9
+Total
+0.1
+In addition to our DIP, we have a €10 billion European Commer-
+cial Paper ("CP") program and a $10 billion U.S. CP program
+under which we can issue short-term notes. At year-end 2018
+E.ON again had no CP outstanding.
+Energy Networks
+36
+Investments
+Energy Networks' investments were substantially above the
+prior-year level. Investments in Germany of €802 million were
+significantly above the prior-year figure of €703 million, primarily
+because of expansion, upgrades, and replacements in our power
+grids there. Investments in Sweden were at the prior-year level.
+Investments in East-Central Europe/Turkey were €83 million
+higher, in particular because of the transfer of investment projects
+(especially for replacement investments) in the Czech Republic
+from Customer Solutions to Energy Networks.
+€ in millions
+2018
+2017
++1-%
+1,597
+In 2018 investments in our core business and in the E.ON Group
+as a whole were above the prior-year level. We invested about
+€3 billion in property, plant, and equipment and intangible assets
+(prior year: €3.1 billion). Share investments totaled €493 million
+versus €232 million in the prior year.
+1,419
+Customer Solutions
+637
+596
++7
+Renewables
+1,037
+3.9
++13
+Business Report
+Investments
+2026
+E.ON strives to maintain rating agencies and investors' trust by
+means of a clear strategy and transparent communications.
+To achieve this purpose, we hold E.ON debt investor updates in
+major European financial centers and an annual informational
+meeting for our core group of banks.
+Maturity Profile of Bonds and Promissory Notes Issued by E.ON SE and E.ON International Finance B.V.
+€ in billions
+4.0
+3.0
+2.0
+2027+
+1.0
+2019
+2020
+2021
+2022
+2023
+2024
+2025
+December 31, 2018
+3.8
+2018
+4.0
+2017
+Non-Core Business
+5,423
+5,160
+Non-current securities
+Financial liabilities
+2,295
+2,749
+1,225
+-10,721
+FX hedging adjustment
+Net financial position
+Provisions for pensions
+Asset-retirement obligations¹
+-28
+114
+-3,031
+-4,998
+-3,261
+-3,620
+-13,021
+-10,288
+December 31,
+Economic Net Debt
+1,505
+1,427
+Business Report
+34
+Financial Situation
+E.ON presents its financial condition using, among other financial
+measures, economic net debt, debt factor, and operating cash
+flow.
+Finance Strategy
+€ in millions
+Liquid funds
+Our finance strategy focuses on E.ON's capital structure. Ensuring
+that E.ON has unrestricted access to capital markets is at the
+forefront of this strategy.
+We manage E.ON's capital structure using our debt factor, which
+is equal to our economic net debt divided by adjusted EBITDA;
+it is therefore a dynamic debt metric. Economic net debt includes
+not only our financial liabilities but also our provisions for pensions
+and asset-retirement obligations. For the purpose of internal
+management control, economic net debt includes the discon-
+tinued operations at Renewables as well as the waste-disposal
+and dismantling obligations associated with E.ON's stakes
+in Emsland and Gundremmingen nuclear power stations at
+PreussenElektra, which are classified as a disposal group (see
+Note 4 to the Consolidated Financial Statements).
+The low interest-rate environment continued. In some cases
+this led to negative real interest rates on asset-retirement obli-
+gations. As in prior years, our provisions therefore exceeded the
+amount of our asset-retirement obligations at year-end without
+factoring in discounting and cost-escalation effects. This limits
+the relevance of economic net debt as a key figure. We want
+economic net debt to serve as a useful key figure that aptly depicts
+our debt situation. In the case of material provisions affected
+by negative real interest rates, we have therefore used the
+aforementioned actual amount of the obligations instead of the
+balance-sheet figure to calculate our economic net debt since
+the 2016 financial year.
+Without factoring in the innogy takeover, we target a debt factor
+of 4 for the medium term. After the innogy transaction closes,
+we will adjust the debt factor for the future E.ON.
+Due to the development of our economic net debt described in
+the next paragraph, our debt factor at year-end 2018 was 3.4,
+which is below our medium-term target of 4.
+Economic Net Debt
+Compared with the figure recorded at December 31, 2017
+(€19.2 billion), our economic net debt declined by €2.7 billion
+to €16.6 billion, in particular because of the proceeds from
+the sale of our Uniper stake. In addition, liquid funds were used
+to repay €2 billion in financial liabilities on schedule.
+Our net financial position at the balance-sheet date was also
+influenced by the dissolution of Versorgungskasse Energie
+VVaG i.L. ("VKE i.L.") in the first quarter of 2018 and the transfer
+of these assets to other investment vehicles. Because most of
+these assets were transferred to our contractual trust arrange-
+ment ("CTA"), this affected our economic net debt only slightly,
+since our provisions for pensions were reduced by the nearly
+same amount. The impact on our economic net debt of the trans-
+fer of the remaining VKE i.L. assets to other share investments
+and third parties was offset by positive effects from the sale of
+Hamburg Netz.
+With our target capital structure we aim to sustainably secure
+a strong BBB/Baa rating.
+GBP
+-10,630
+-19,248
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+35
+Funding Policy and Initiatives
+The key objective of our funding policy is for E.ON to have access
+to a variety of financing sources at all times. We achieve this
+objective through different markets and debt instruments to
+maximize the diversity of our investor base. We issue bonds with
+tenors that give our debt portfolio a balanced maturity profile.
+Moreover, we combine large-volume benchmark issues with
+smaller issues that take advantage of market opportunities as
+they arise. External funding is generally carried out by E.ON SE,
+and the funds are subsequently on-lent in the Group. In the past,
+external funding was also carried out by our Dutch finance sub-
+sidiary, E.ON International Finance B.V. ("EIF"), under guarantee
+of E.ON SE. In 2018 we paid back in full maturities of €2 billion.
+We issued no new debt.
+Financial Liabilities
+E.ON Stock
+December 31,
+2018
+2017
+Bonds¹
+9.0
+10.7
+EUR
+4.0
+€ in billions
+-16,580
+Report of the Supervisory Board
+-19,248
+4,840
+3.4
+4,955
+3.9
+Economic net debt
+Adjusted EBITDA
+Debt factor
+¹These figures are not the same as the asset-retirement obligations shown in our Consoli-
+dated Balance Sheet from continuing and discontinued operations (December 31, 2018:
+€11,889 million; December 31, 2017: €11,673 million). This is because we calculate our
+economic net debt in part based on the actual amount of our obligations.
+Reconciliation of Economic Net Debt
+€ in millions
+CEO Letter
+2018
+Economic net debt
+-16,580
+-19,248
+Reclassified businesses of Renewables and
+PreussenElektra
+1,961
+Economic net debt (continuing operations)
+-14,619
+December 31,
+2017
+-15
+Current assets
+86
+1,754
++14
+474
+541
+Renewables
++3
+21,576
+1,604
+22,127
+6,091
+6,320
+Customer Solutions
+-48
+16,990
+8,769
+-43
++4
+4,123
++9
+55,950
+55,950
+100
+8,518
+16
+6,708
+12
+30,545
+100
+56
+63
+15,261
+28
+14,044
+25
+54,324
+100
+35,198
+100
+2,355
++1-%
+.
+•
+Acquisitions, Disposals, and Discontinued Operations in 2018
+We executed the following significant transactions in 2018.
+Note 4 to the Consolidated Financial Statements contains
+detailed information about them:
+Cash provided by operating activities of continuing and discon-
+tinued operations of €2.9 billion was substantially above the
+prior-year figure of -€3 billion, primarily because of our payment
+into Germany's public fund for nuclear-waste disposal in July
+2017. The non-recurrence of the nuclear-fuel-tax refund recorded
+in 2017 was an adverse factor.
+Our investments of €3.5 billion were slightly above the prior-
+year figure of €3.3 billion but below the €3.8 billion forecasted
+for 2018. The deviation is principally attributable to changes in
+project planning at our Customers Solutions and Renewables
+segments.
+Adjusted EBIT for the E.ON Group declined by €0.1 billion to
+€3 billion. Adjusted net income increased by about €0.1 billion
+to €1.5 bllion. Adjusted EBIT and adjusted net income were
+therefore at the upper end of our forecast range of €2.8 to
+€3 billion and €1.3 to €1.5 billion, respectively. In addition,
+our objective was to record a cash-conversion rate of at least
+80 percent. Cash-conversion rate is equal to operating cash
+flow before interest and taxes (€4.1 billion) divided by adjusted
+EBITDA (roughly €4.8 billion). Our cash-conversion rate was
+therefore 84 percent. Our ROCE was 10.4 percent, slightly higher
+than our forecast of 8 to 10 percent.
+E.ON's operating business continued to deliver a positive per-
+formance in 2018. Nevertheless, our sales of €30.3 billion were
+€7.7 billion below the prior-year figure. The decline resulted
+largely from changes in the accounting treatment of certain
+renewables-support payments pursuant to IFRS 15, which was
+applied for the first time in 2018. These payments are no longer
+reported in full but rather are netted against the corresponding
+costs of materials.
+Reclassification of substantially all of our Renewables
+segment as discontinued operations in conjunction with
+the planned transaction with RWE
+Business Performance
+29
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+CEO Letter
+29
+Energy Networks²
+Sale of our 46.65-percent Uniper stake
+Sale of Hamburg Netz.
+2017
+2018
++1-%
+2017
+2018
+€ in millions
+Full year
+Sale of E.ON Gas Sverige
+Fourth quarter
+30
+Sales¹
+Business Report
+We recorded sales of €30.3 billion in 2018, €7.7 billion less
+than the prior-year figure. The initial application of IFRS 15
+reduced sales by €7.9 billion. Energy Networks' sales declined
+by €8.2 billion, primarily because of the aforementioned netting
+effects in conjunction with IFRS 15 in Germany and the Czech
+Republic and by the sale of gas operations in Sweden and Ger-
+many. Customer Solutions' sales rose by about €0.6 billion, in
+particular owing to price increases and a weather-driven increase
+in gas sales volume in the United Kingdom. Higher sales prices
+in Sweden, Italy, and Hungary along with the transfer of the gas
+business in Sweden from Energy Networks were also positive
+factors. By contrast, sales were adversely affected by netting
+effects pursuant to IFRS 15 in the Czech Republic and the expi-
+ration of sales contracts to certain wholesale customers in Ger-
+many that were transferred to Uniper. Renewables' sales rose
+by €150 million year on year, owing primarily to an increase in
+owned generation. This was because in 2018 some wind farms
+in the United States were, for the first time, operational for the
+entire year and because a wind farm came online in the United
+Kingdom. Sales at Non-Core Business declined by €186 million,
+principally because of lower sales prices and the absence of one-
+off items in conjunction with legal proceedings. Sales recorded
+under Corporate Functions/Other resulted mainly from intra-
+group IT, finance, and HR services. The decline relative to the
+prior year is due in part to the expiration of a service contract
+with Uniper.
+Sales
+Earnings Situation
+Cash provided by investing activities of continuing operations
+includes cash-effective disposal proceeds totaling €4,306 mil-
+lion in 2018 (prior year: €750 million).
+30
+54,324
+28
+15,786
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+37
+Customer Solutions invested €41 million more than in the prior
+year. Investments in Sweden were significantly higher, partic-
+ularly for the maintenance, upgrade, and expansion of existing
+assets and for the heat distribution network. By contrast, the
+aforementioned transfer of investment projects from Customer
+Solutions to Energy Networks led to significantly lower invest-
+ments in the Czech Republic. In addition, E.ON Connecting
+Energies invested in embedded power plants at customers'
+facilities. On balance, investments in Germany and the United
+Kingdom were at the prior-year level.
+Investments at Renewables were €188 million lower. Invest-
+ments in property, plant, and equipment and intangible assets
+declined by €286 million year on year, primarily because of
+the completion of large new-build projects (Radford's Run,
+Bruenning's Breeze, and Rampion); the first two entered service
+at the end of 2017, the third in April 2018. By contrast, invest-
+ments in shareholdings were €98 million higher, due principally
+to expenditures for the Arkona project.
+Investments at Non-Core Business were €155 million above
+the prior-year level, primarily because of a capital increase at
+Enerjisa Üretim in Turkey, which we account for using the equity
+method. The capital increase was covered by cash inflow from
+the initial public offering of Enerjisa Enerji.
+Cash Flow
+Strategy and Objectives
+Cash provided by operating activities of continuing and discon-
+tinued operations before interest and taxes of €4.1 billion was
+€6.3 billion above the prior-year level. The main reason for the
+increase is that in July 2017 we paid about €10.3 billion into
+Germany's public fund to finance nuclear-waste disposal. This
+amount was partially offset by the roughly €2.85 billion nuclear-
+fuel-tax refund we received in June 2017 and positive working-
+capital effects in 2017. The adverse factors affecting cash
+provided by operating activities of continuing and discontinued
+operations included higher interest and tax payments.
+Cash Flow¹
+€ in millions
+2018
+2017
+Cash provided by (used for) operating
+activities (operating cash flow)
+Operating cash flow before interest and taxes
+Cash provided by (used for) investing
+activities
+2,853
+-2,952
+Cash provided by investing activities of continuing and discon-
+tinued operations totaled approximately +€1 billion versus
+-€0.4 billion in the prior year. The sale of our stake in Uniper SE
+was the principal factor (+€3.8 billion). This was partially offset
+by a year-on-year reduction in the net cash inflow from the sale
+of securities and changes in financial liabilities (-€1.9 billion)
+and an increase in cash-effective investments (-€0.2 billion).
+4,087
+E.ON Stock
+CEO Letter
+53
++62
+Consolidation
+-3
+1
+Investments in core business
+3,354
+Report of the Supervisory Board
+3,294
+Non-Core Business
+169
+14
+E.ON Group investments
+3,523
+3,308
++6
++2
+-2,235
+1,011
+-391
+Current liabilities
+Total equity and liabilities
+Additional information about our asset situation is contained in
+Notes to the Consolidated Financial Statements.
+Dec. 31,
+Dec. 31,
+2018
+Non-current liabilities
+%
+%
+30,883
+57
+40,164
+72
+23,441
+43
+2017
+Equity
+Total assets
+462
+Cash provided by (used for) financing
+activities
+¹From continuing and discontinued operations.
+-2,637
+540
+Cash provided by financing activities of continuing and discon-
+tinued operations of -€2.6 million was €3.1 billion below the
+prior-year figure of +€0.5 billion. This is principally attributable
+to the issuance of €2 billion in bonds in the first half of 2017
+and the roughly €1.35 billion capital increase conducted in
+March 2017. In addition, E.ON SE's dividend payout was about
+€0.3 billion higher than in the prior year. These items were par-
+tially offset by a reduction in cash outflow to repay bonds.
+Business Report
+38
+Asset Situation
+Our total assets and liabilities of €54.3 billion were about
+€1.6 billion, or 3 percent, below the figure from year-end 2017.
+Non-current assets of €30.9 billion were €9.3 billion lower than
+at year-end 2017, in particular because of the reclassification
+of operations at Renewables that are to be transferred to RWE.
+This resulted in the reclassification of non-current assets as
+assets held for sale, which are reported under current assets.
+This reclassification led, in particular, to a significant reduction
+in fixed assets.
+Current assets increased by 48 percent, from €15.8 billion to
+€23.4 billion, mainly because of the aforementioned reclassifi-
+cation of assets at Renewables in the amount of €11.3 billion.
+The derecognition of our Uniper stake in the amount of €3 billion,
+which had been classified as an asset held for sale, had a counter-
+vailing effect.
+Our equity ratio (including non-controlling interests) at Decem-
+ber 31, 2018, was 16 percent, which is 4 percentage points
+higher than at year-end 2017. This change primarily reflects our
+positive net income in 2018. The dividend payout of €0.9 billion
+and the revaluation of pension obligations in the amount of
+€0.5 billion due to altered actuarial assumptions were counter-
+vailing factors. Equity attributable to shareholders of E.ON SE
+was about €5.8 billion at year-end 2018. Equity attributable to
+non-controlling interests was roughly €2.8 billion.
+Non-current debt decreased by €4.7 billion, or 13 percent. This
+was likewise attributable to the aforementioned reclassification
+of operations at Renewables as discontinued operations. In addi-
+tion, the waste-disposal and dismantling obligations associated
+with our stakes in Emsland and Gundremmingen nuclear power
+stations, which are to be transferred to RWE, were reclassified
+as current debt. A decline in provisions for pensions was another
+reason that non-current debt was lower.
+Current debt of €15.3 billion was 9 percent above the figure at
+year-end 2017, due mainly to the aforementioned effects of
+the reclassification of debt at Renewables and PreussenElektra.
+By contrast, the repayment of a dollar-denominated bond in
+the amount of roughly €1.7 billion in April 2018 and a decline
+in operating liabilities served to reduce current debt.
+Consolidated Assets, Liabilities, and Equity
+€ in millions
+Non-current assets
+Corporate Functions/Other
+297
+4,932
+-45
+-3
+Adjusted EBIT
+637
+957
+-33
+2,989
+3,074
+393
+-3
+32
+Net Income/Loss
+We recorded net income attributable to shareholders of E.ON SE
+of €3.2 billion and corresponding earnings per share of €1.49.
+In the prior year we recorded net income of €3.9 billion and
+earnings per share of €1.84.
+Pursuant to IFRS 5, income/loss from discontinued operations,
+net, is reported separately in the Consolidated Statements of
+Income and includes the earnings from the discontinued opera-
+tions at Renewables. Note 4 to the Consolidated Financial
+Statements contains more information.
+The tax expense in 2018 amounted to €46 million (2017:
+€803 million). In 2018 the tax rate was 1 percent (2017:
+16 percent). In the year under review, an increase in tax-free
+and tax-exempt earnings components and the reversal of tax
+provisions for previous years led to a reduction in the tax rate.
+Significant changes in the tax rate relative to the prior year also
+reflect one-off items relating to the refund of the nuclear-fuel
+tax and the resulting increase in income taxes in Germany. The
+effects relating to the nuclear-fuel tax led to the utilization of
+tax loss carryforwards and were subject to a minimum tax.
+Financial results declined by €0.7 billion year on year, mainly
+because interest pending during legal proceedings was paid
+back in the prior year in conjunction with the refund of the
+nuclear-fuel tax.
+Business Report
+Net book gains in 2018 were substantially above the prior-year
+figure, mainly because of the disposal of our Uniper stake,
+Hamburg Netz, and E.ON Gas Sverige. Overall, the initial public
+offering of Enerjisa Enerji in Turkey resulted in a book loss. By
+contrast, the prior-year figure contains the proceeds from the
+sale of a shareholding at Customer Solutions in Sweden as well
+as significantly higher book gains on the sale of securities.
+382
+129
+-153
+-275
+Consolidation
+-21
+-3
+-18
+-11
+-47
+Adjusted EBIT from core business
+828
+-31
+2,607
+2,681
+-3
+Non-Core Business
+68
+569
+-43
+Restructuring expenses declined substantially year on year. The
+decrease is in part attributable to considerably lower expendi-
+tures in conjunction with Group-wide cost-reduction programs.
+Fourth quarter
+301
+255
+-116
+127
+-286
+-23
+Income/Loss from continuing operations
+58
+253
+3,238
+4,157
+Income taxes
+-152
+263
+46
+803
+404
+Net Income/Loss
+66
+3,223
+Full year
+€ in millions
+Net income/loss
+Attributable to shareholders of E.ON SE
+Attributable to non-controlling interests
+Income/Loss from discontinued operations, net
+2018
+3,925
+2017
+2017
+369
+277
+3,524
+4,180
+303
+219
+2018
+Financial results
+-73
++15
+37,965
+30,253
+-14
+10,028
+8,607
+E.ON Group
+-4,586
+-20
+Our regulated business consists of operations in which reve-
+nues are largely set by law and based on costs. The earnings on
+these revenues are therefore extremely stable and predictable.
+-1,249
+-1,169
+Consolidation
+-19
+796
+644
+-38
+-4,440
+234
+¹Includes the discontinued operations in the Renewables segment. Sales from continuing operations amounted to €29.6 billion in 2018 (prior year: €37.3 billion).
+²Income and expenses resulting from the Renewable Energy Law's feed-in scheme have been netted out; we adjusted the prior-year quarters accordingly (see Note 2 to the Consolidated Financial
+Statements).
+Other operating income declined by 31 percent, from €7,371 mil-
+lion to €5,107 million, mainly because of the refund of roughly
+€2.85 billion in nuclear-fuel taxes recorded in the prior year. In
+addition, the sale of securities resulted in lower income than
+in the prior year. Income from currency-translation effects of
+€1,607 million declined by 18 percent, whereas income from
+derivative financial instruments rose by 120 percent, from
+€593 million to €1,303 million. Corresponding amounts result-
+ing from currency-translation effects and derivative financial
+instruments are recorded under other operating expenses. In
+addition, 2018 income from derivative financial instruments
+includes the derecognition of a derivative in conjunction with
+contractual rights and obligations relating to the sale of our
+Uniper stake. The sale of equity interests yielded income of
+€899 million, which includes €593 million from the sale of our
+remaining Uniper stake to Fortum as well as €154 million and
+€134 million from the sale of Hamburg Netz and E.ON Gas
+Sverige AB, respectively.
+E.ON generates a significant portion of its adjusted EBIT in very
+stable businesses. Regulated, quasi-regulated, and long-term
+contracted businesses accounted for the overwhelming propor-
+tion of our adjusted EBIT in 2018.
+The E.ON Group's adjusted EBIT was €85 million below the prior-
+year figure. In addition to the aforementioned factors affecting
+adjusted EBIT in our core businesses, Preussen Elektra's earnings
+were adversely impacted by lower sales prices and one-off
+effects. This was almost completely offset by higher earnings
+from the generation business in Turkey.
+In 2018 adjusted EBIT in our core business was €74 million
+below the prior-year figure. Energy Networks' adjusted EBIT
+declined by €190 million. The principal reasons were the non-
+recurrence of a positive one-off item involving the delayed
+repayment of personnel costs for regulatory reasons, the sale of
+Hamburg Netz, and the beginning of the third regulatory period
+for gas in Germany. A reduction in earnings at the East-Central
+Europe/Turkey unit resulting from lower equity earnings on our
+stake in Enerjisa Enerji in Turkey was another adverse factor.
+These items were partially offset by an improved gross margin
+in the power business in Sweden, which resulted from tariff
+increases. Adjusted EBIT at Customer Solutions declined by
+€66 million. The principal causes were persistently challenging
+market conditions, a weather-driven reduction in power sales
+volume, regulatory effects and higher restructuring expenditures
+in the United Kingdom, and the unavailability of a cogeneration
+plant that Customer Solutions' Other unit operates for a cus-
+tomer. By contrast, the transfer of the gas business in Sweden
+from Energy Networks had a positive effect on earnings. Adjusted
+EBIT in Germany was significantly higher primarily because of a
+wider
+gross margin in the power and gas business. Renewables'
+adjusted EBIT rose by €67 million, owing in particular to an
+increase in owned generation. This was because in 2018 some
+wind farms in the United States were, for the first time, opera-
+tional for the entire year and because a new wind farm came
+online in the United Kingdom.
+Adjusted EBIT
+31
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Other Line Items from the Consolidated Statements of Income
+Own work capitalized of €394 million (2017: €513 million)
+resulted mainly from the capitalization of IT projects and network
+investments.
+Strategy and Objectives
+Report of the Supervisory Board
+CEO Letter
+Income from companies accounted for under the equity method
+of €269 million was below the prior-year figure of €720 million.
+In 2018 we recorded no equity earnings from our Uniper stake
+(prior year: €466 million). This effect was partially counteracted
+by overall higher earnings from our equity investments in Turkey
+(Enerjisa Enerji: -€56 million; Enerjisa Üretim: +€96 million).
+Other operating expenses of €4,550 million were 28 percent
+below the prior-year level of €6,279 million. This is chiefly
+because expenditures relating to derivative financial instruments
+decreased substantially, from €1,828 million to €630 million.
+Expenditures relating to currency-translation effects totaled
+€1,626 million (prior year: €1,668 million). The prior-year figure
+was adversely affected by our obligation to pass on a portion
+of the refunded nuclear-fuel tax to the minority shareholders
+of our jointly owned power stations (€327 million).
+Depreciation charges declined significantly, from €1,700 million
+to €1,575 million, primarily because of a reduction in impair-
+ment charges. In 2018 scheduled depreciation charges were
+recorded in particular at Energy Networks. In 2018 impairment
+charges were recorded primarily at Customer Solutions' busi-
+ness in the United Kingdom.
+Personnel costs of €2,460 million were €573 million below the
+prior-year figure of €3,033 million. The decline resulted mainly
+from lower expenditures for strategic renewal and reorganization
+programs from prior years. In addition, an adjustment to pension
+commitments in the United Kingdom resulted in negative past
+service costs.
+Costs of materials of €22,813 million were significantly below
+the prior-year level of €29,961 million. The decline is mainly
+attributable to the aforementioned netting effects in conjunction
+with the initial application of IFRS 15 in 2018.
+E.ON Stock
+Corporate Functions/Other
+144
+-12
+1,844
+2,034
+-9
+Customer Solutions
+53
+137
+-61
+-30
+413
+-14
+Renewables
+238
+206
++16
+521
+454
+479
+Corporate Functions/Other
+531
+Full year
++/-%
+1,585
+1,399
++17
+355
+416
+Our quasi-regulated and long-term contracted business consists
+of operations in which earnings have a high degree of predict-
+ability because key determinants (price and/or volume) are largely
+set by law or by individual contractual arrangements for the
+medium to long term. Examples of such legal or contractual
+arrangements include incentive mechanisms for renewables
+and the sale of contracted generating capacity.
+Our merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+372
+Adjusted EBIT
+€ in millions
+Energy Networks
+2018
+2017
++/-%
+2018
+2017
+Fourth quarter
+215
+111
+669
+-48
+44
+-5
+EBIT
+292
+730
+3,997
+-24
+4,927
+110
+27
+-1,521
+-2,293
+Reclassified businesses of Renewables (adjusted EBIT)
+235
+200
+Non-operating adjustments
+513
+3,953
+316
+By contrast, in 2018 we for the first time recorded expenditures
+in conjunction with the planned acquisition of innogy.
+At December 31, 2018, the marking to market of the derivatives
+we use to shield our operating business from price fluctuations
+as well as other derivatives resulted in a positive effect of
+€610 million (prior year: -€954 million). The positive figure in
+2018 is mainly attributable to the derecognition, in the second
+quarter, of derivative financial instruments in conjunction with
+contractual rights and obligations relating to the sale of our Uniper
+stake. As in the prior year, there were also effects resulting from
+hedging against price fluctuations, in particular at Customer
+Solutions.
+In 2018 we recorded impairment charges principally at Cus-
+tomer Solutions' operations in the United Kingdom and at E.ON
+Connecting Energies. In the prior year we recorded impairment
+charges primarily at Customer Solutions' operations in the
+United Kingdom.
+The substantial decline in other non-operating earnings is
+chiefly attributable to our receipt of the refund of the nucle-
+ar-fuel tax in the prior year, which also includes the equity earn-
+ings on our Uniper stake. This stake was reclassified as an asset
+held for sale as of the end of September 2017. Since this date,
+its book value is no longer recorded in equity.
+Adjusted Net Income
+Like EBIT, net income also consists of non-operating effects,
+such as the marking to market of derivatives. Adjusted net
+income is an earnings figure after interest income, income taxes,
+and non-controlling interests that has been adjusted to exclude
+non-operating effects. In addition to the marking to market of
+derivatives, the adjustments include book gains and book losses
+on disposals, restructuring expenses, other material non-oper-
+ating income and expenses (after taxes and non-controlling
+interests), and interest expense/income not affecting net income,
+which consists of the interest expense/income resulting from
+non-operating effects. Adjusted net income includes the earnings
+(adjusted to exclude non-operating effects) of the discontinued
+operations at Renewables as if they had not been reclassified and
+valued pursuant to IFRS 5. Pages 22 and 23 of the Combined
+Group Management Report and Notes 4 and 33 of the Consoli-
+dated Financial Statements contain more information.
+As a rule, the E.ON Management Board uses this figure in
+conjunction with its consistent dividend policy and aims for a
+continual increase in dividend per share. In view of the planned
+acquisition of innogy as part of an extensive asset swap with
+RWE, we intend to propose to the Annual Shareholders Meeting
+that E.ON pay a dividend of €0.43 per share for the 2018 financial
+year. Furthermore, in line with the current dividend policy, the
+E.ON Management Board and Supervisory Board will propose
+paying shareholders a dividend of €0.46 per share for the 2019
+financial year.
+778
+Adjusted Net Income
+Full year
+€ in millions
+2018
+2017
+2018
+2017
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+Fourth quarter
+33
+440
+637
+788
+2,315
+2,330
+Taxes on operating earnings
+-126
+-631
+-544
+463
+-970
+-54
+-93
+-221
+-278
+Reclassified businesses of Renewables (taxes and minority interests on operating earnings)
+Adjusted net income
+14
+398
+Operating earnings attributable to non-controlling interests
+Adjusted EBIT
+Operating earnings before taxes
+-135
+957
+2,989
+3,074
+Net interest income/loss
+-191
+-62
+-713
+-74
+33
+53
+-87
+174
+-703
+Reclassified businesses of Renewables (operating interest expense (+)/income (-))
+-36
+-20
+Non-operating interest expense (+)/income (-)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+Restructuring expenses
+Marking to market of derivative financial instruments
+Impairments (+)/Reversals (-)
+Other non-operating earnings
+Reclassified businesses of Renewables (adjusted EBIT)
+Adjusted EBIT
+2
+Net book gains (-)/losses (+)
+-87
+-2,293
+-375
+12
+367
+64
+539
+295
+-1,521
+-857
+471
+27
+4,927
+-28
+Income/Loss from continuing operations before financial results and income taxes
+316
+778
+3,953
+4,932
+Income/Loss from equity investments
+110
+-24
+44
+-5
+EBIT
+Non-operating adjustments
+292
+730
+3,997
+-48
+-610
+954
+61
+1,475
+72
+1,488
+Reclassified businesses of Renewables
+(scheduled depreciation and amortization, impairment charges and reversals)
+87
+69
+331
+356
+321
+1,165
+1,415
+4,840
+4,955
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Adjusted EBITDA
+414
+Scheduled depreciation and amortization
+45
+171
+61
+171
+-260
+-895
+-179
+-3,582
+235
+200
+513
+637
+957
+2,989
+440
+3,074
+Impairments (+)/Reversals (-)
+27
+33
+345
+2017
+30,345
+Percentages
+The table below shows the E.ON Group's ROCE, value added,
+and their derivation.
+42
+ROCE
+€ in millions
+Goodwill, intangible assets, and property, plant, and equipment¹
+2018
+30,915
+To continually improve their safety performance, our units have
+in place health, safety, and environmental ("HSE") management
+systems certified to internationally recognized standards. They
+also develop HSE improvement plans based on a management
+review. Centrally mandated HSE activities for all E.ON companies
+in 2018 included conducting one-day HSE culture workshops
+for our 100 most senior executives including other culture initia-
+tives, rolling out a Group-wide software solution for reporting
+and investigating incidents (PRISMA), and refining our processes
+for incident management through stricter standards and special
+training in root-cause analysis for investigators. In addition, all
+units were required to continue conducting the HSE leadership
+training begun in 2017 and to review risks posed by new cus-
+tomer solutions.
+Unfortunately, three E.ON employees died on the job in 2018.
+In addition, two contractor employees died while working for us.
+The accidents occurred in Germany, Romania, Sweden, the
+Czech Republic, and Hungary.
+TRIF measures the number of reported fatalities and occupa-
+tional injuries and illnesses per million hours of work. It includes
+injuries that occur during work-related travel that result in
+lost time or no lost time and/or that lead to medical treatment,
+restricted work, or work at a substitute workstation.
+Occupational health and safety have the highest priority at E.ON.
+E.ON employees' total recordable injury frequency ("TRIF") was
+2.5 in 2018, similarly low as in the prior year (2.3).
+Occupational Health and Safety
+¹Includes E.ON Business Services.
+4.6
+4.8
+E.ON Group
+2.1
+1.6
+Non-Core Business
+4.8
+4.9
+Core business
+8.6
+7.6
+Corporate Functions/Other¹
+9.3
+8.7
+Renewables
+6.7
+7.2
+ROCE decreased from 10.6 percent in 2017 to 10.4 percent
+in 2018 owing to the decline in adjusted EBIT and the increase
+in capital employed. Overall, ROCE of 10.4 percent surpassed
+pretax cost of capital, which was unchanged relative to the prior
+year, yielding value added of about €1.15 billion.
+Customer Solutions
+ROCE Performance in 2018
+signals a higher risk than the risk level of the overall market; a beta factor of less than one
+signals a lower risk.
+Average tax rate
+27%
+27%
+Cost of equity before taxes
+9.9%
+10.3%
+Cost of debt before taxes
+2.9%
+2.4%
+Marginal tax rate
+27%
+27%
+Cost of debt after taxes
+2.10%
+1.80%
+Share of equity
+50%
+50%
+Share of debt
+50%
+50%
+Cost of capital after taxes
+4.70%
+4.70%
+Cost of capital before taxes
+6.40%
+6.40%
+¹The market premium reflects the higher long-term returns of the stock market compared
+with government bonds.
+2The beta factor is used as an indicator of a stock's relative risk. A beta of more than one
+Business Report
+7.50%
+1.7
+Energy Networks
+Business Report
+28
+28
+54
+53
+18
+19
+2017
+2018
+¹Includes E.ON Business Services.
+32
+32
+E.ON Group
+13
+13
+Non-Core Business
+32
+32
+Core business
+45
+49
+Corporate Functions/Other¹
+21
+20
+Renewables
+51 and older
+43
+43
+Customer Solutions
+48
+1.8
+A total of 3,328 employees, or 8 percent of all E.ON Group
+employees, were on a part-time schedule. Of these, 2,673, or
+80 percent, were women.
+Percentages
+2017
+2018
+Percentages
+Turnover Rate
+The turnover rate resulting from voluntary terminations averaged
+4.8 percent across the organization, slightly higher than in the
+prior year (4.6 percent).
+¹Includes E.ON Business Services.
+8
+8
+E.ON Group
+6
+8
+Non-Core Business
+8
+7
+Core business
+12
+12
+Corporate Functions/Other¹
+3
+3
+Renewables
+11
+10
+Customer Solutions
+5
+Energy Networks
+2017
+2018
+5
+Part-Time Rate
+31 to 50
+7.20%
+1.01
+36
+Asset surplus after offsetting of benefit
+1
+obligations
+Total assets
+45,724
+48,478
+Equity
+9,432
+Provisions
+1,480
+9,029
+2,127
+Bonds
+2,000
+2,000
+Liabilities to affiliated companies
+32,456
+34,350
+Other liabilities
+354
+Deferred income
+2
+45,724
+Total equity and liabilities
+970
+2
+48,478
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings, financial, and asset situation is affected by income
+from equity interests. The positive figure recorded for this item
+in 2018 reflects, in particular, the in-phase distribution of net
+income available for distribution from E.ON Beteiligungen
+GmbH resulting from the release of capital reserves, of which
+€2,320 million was recorded in earnings, and a profit transfer
+of €725 million from E.ON Beteiligungen GmbH. The primary
+countervailing factors were the expenditures from loss trans-
+fers of €1,017 million from E.ON Finanzanlagen GmbH and of
+€787 million from E.ON US Holding GmbH.
+The change in liabilities resulted mainly from the aforementioned
+distribution of net profit from E.ON Beteiligungen GmbH, as well
+as, by contrast, from the sale of Uniper stock to energy company
+Fortum Corporation, Espoo, Finland, by E.ON Beteiligungen GmbH
+in June 2018 (€3.8 billion). Due to cash pooling, this led to an
+increase in intragroup liabilities. Considering these items as well
+as the repayment of mature bonds and the €650 million dividend
+payout, on balance liquid funds increased by €1,016 million.
+28
+In addition, the aforementioned repayment of €755 million in
+bonds and the €3,480 million of the distribution of net income
+from E.ON Beteiligungen GmbH that was not recorded in earn-
+ings were the main factors in the reduction in financial assets.
+Accrued expenses
+12,445
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+39
+99
+E.ON SE's Earnings, Financial, and Asset
+Situation
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the Electricity and
+Gas Supply Act (Energy Industry Act).
+Balance Sheet of E.ON SE (Summary)
+December 31,
+2017
+12
+€ in millions
+2018
+Intangible assets and property, plant, and
+equipment
+10
+Financial assets
+33,241
+37,358
+Non-current assets
+33,251
+37,370
+Receivables from affiliated companies
+7,472
+Other receivables and assets
+1,932
+7,697
+1,349
+Liquid funds
+3,041
+Current assets
+2,025
+11,071
+Cost of equity after taxes
+The change in equity results from net income and the divided
+payout in 2018.
+Business Report
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+41
+Other Financial and Non-Financial Performance
+Indicators
+ROCE and Value Added
+Cost of Capital
+The cost of capital is determined by calculating the weighted-
+average cost of equity and debt. This average represents the
+market-rate returns expected by stockholders and creditors.
+The cost of equity is the return expected by an investor in E.ON
+stock. The cost of debt equals the long-term financing terms that
+apply in the E.ON Group. The parameters of the cost-of-capital
+determination are reviewed on an annual basis.
+Our review of the parameters in 2018 led to no change in the
+after-tax cost of capital, which remained 4.7 percent. This
+was mainly because general interest-rate levels were almost
+unchanged, resulting in a stable risk-free interest rate and a
+constant market-risk premium. The table below shows the deri-
+vation of cost of capital before and after taxes.
+Cost of Capital
+Analyzing Value Creation by Means of ROCE and Value Added
+ROCE is a pretax total return on capital and is defined as the
+ratio of our adjusted EBIT to annual average capital employed.
+Annual average capital employed represents the interest-bearing
+capital invested in our operating business. It is calculated by sub-
+tracting non-interest-bearing available capital from non-current
+and current operating assets. Depreciable non-current assets
+are included at their book value. Goodwill from acquisitions is
+included at acquisition cost, as long as this reflects its fair value.
+Changes to E.ON's portfolio during the course of the year are
+factored into average capital employed. For purposes of internal
+management control, average capital employed includes activi-
+ties at Renewables classified as discontinued operations.
+Annual average capital employed does not include the marking
+to market of other share investments and derivatives. The
+purpose of excluding these items is to provide us with a more
+consistent picture of our ROCE performance.
+Value added measures the return that exceeds the cost of capi-
+tal employed. It is calculated as follows:
+Value added (ROCE - cost of capital) x annual average capital
+employed.
+2018
+2017
+Risk-free interest rate
+1.25%
+1.25%
+Market premium¹
+6.25%
+6.25%
+Debt-free beta factor
+0.48
+0.50
+Indebted beta factor²
+0.95
+E.ON Stock
+Information on treasury shares can be found in Note 19 to the
+Consolidated Financial Statements.
+Report of the Supervisory Board
+The complete Financial Statements of E.ON SE, with an unqual-
+ified opinion issued by the auditor, PricewaterhouseCoopers
+GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, will be
+announced in the Bundesanzeiger. Copies are available on request
+from E.ON SE and at www.eon.com.
+40
+Income Statement of E.ON SE (Summary)
+€ in millions
+2018
+Income from equity interests
+1,171
+2017
+4,676
+Interest income/loss
+-140
+-1,368
+Other expenditures and income
+-225
+-497
+Taxes
+247
+Net income
+1,053
+-171
+2,640
+Net income transferred to retained earnings
+Net income available for distribution
+-1,320
+1,053
+1,320
+The increase in interest income/loss is primarily attributable to
+the market-value adjustment carried out in the previous year,
+which resulted from the intragroup restructuring of liabilites due
+to the transfer of loans to E.ON Finanzholding SE & Co. KG.
+The negative figure recorded under other expenditures and
+income results primarily from expenditures of €171 million for
+third-party services, personnel expenditures of €138 million,
+net currency translation losses of €106 million, expenditures
+of €93 million for consulting and auditing services, and income
+of €271 million from a necessary adjustment for certain environ-
+mental remediation obligations of predecessor entities.
+The Company recorded total income taxes of roughly
+€248 million (income) in 2018. Applying the minimum tax
+rate resulted in corporate taxes of €14 million, a solidarity
+surcharge of about €1 million, and trade taxes of €10 million in
+2018. Tax income for previous years amounted to €273 million.
+At the Annual Shareholders Meeting on May 14, 2019, manage-
+ment will propose that net income available for distribution
+be used to pay a dividend of €0.43 per ordinary share and the
+remaining amount of €121 million to be brought forward as
+retained earnings.
+Management's proposal for the use of net income available
+fordistribution is based on the number of ordinary shares on
+February 28, 2019, the date the Financial Statements of E.ON SE
+were prepared.
+Furthermore, in line with the current dividend policy, the E.ON
+Management Board and Supervisory Board will propose paying
+shareholders a dividend of €0.46 per share for the 2019 financial
+year.
+CEO Letter
+Report of the Supervisory Board
+20
+Energy Networks
+Employee Development and Working Conditions
+In November innogy's Group Works Council and SE Works Council
+acceded to the Agreement. This now establishes that the Agree-
+ment will apply to all employees of the future E.ON, regardless
+of which company they work for prior to the planned integration.
+It reflects the close and trusting collaboration between E.ON
+and innogy's codetermination councils. As soon as legally permis-
+sible, innogy employee representatives will be involved in the
+project work and in shaping overarching strategic processes.
+retaining current social support agreements, unless they are
+superseded by other agreements.
+•
+• continuing to place a particular emphasis on training young
+people
+generally ensuring economically equivalent working condi-
+tions when transferring employees
+44
+Business Report
+taking into account the interests of severely disabled
+employees when allocating jobs and filling positions
+mutually agreeing that management and employee repre-
+sentatives will seek to reach consensus-based solutions to
+necessary organizational changes
+placing a strong and comprehensive focus on providing the
+required training to employees
+ensuring early and comprehensive transparency regarding
+the project
+•
+•
+Specific points covered by the Agreement include:
+In essence, the Framework Agreement provides that the close
+cooperation and partnership which the Company and its employee
+representatives have practiced for many years in Group-wide
+transformation projects will be continued in the planned inte-
+gration of innogy. In addition, the Agreement lays down key
+principles for the social protection of employees affected by
+changes. It also defines the key elements of a binding operational
+framework for the future involvement of employee represen-
+tatives and for change management related to the integration
+process during the years ahead.
+Social partnership is particularly important in times of change.
+The planned integration of innogy into the E.ON Group also will
+be conducted in a close, collaborative partnership between the
+Company and its employee representatives. In July the E.ON
+Management Board, the SE Works Council, and the Group Works
+Council therefore concluded a Framework Agreement, which
+applies to all E.ON companies in Europe.
+innogy Integration and the Involvement of Employee
+Representatives
+Consequently, the mechanisms are in place for mutually trustful,
+respectful, and transparent dialog between management and
+employee representatives at a European and national level. For
+the benefit of our employees and our company, management
+and employee representatives' shared objective is for this proven
+collaborative partnership to continue and further develop in the
+future.
+thus manifests a shared responsibility for the Company and its
+employees. It has proven its worth and remains to this day the
+foundation for a successful social partnership at E.ON.
+In 2014 management and the Group Works Council in Germany
+concluded the Agreement on the Future Social Partnership. The
+agreement stipulates key principles of the social partnership
+between the Company and its employee representatives and
+At a European level, E.ON management works closely together
+with the SE Works Council of E.ON SE, which consists of repre-
+sentatives from all European countries in which E.ON operates.
+Under the SE Agreement, the SE Works Council of E.ON SE is
+informed and consulted about issues that transcend national
+borders. A special emphasis is placed on the early and open dis-
+cussion of employee matters.
+Collaborative Partnership with Employee Representatives
+Working with employee representatives as partners has a long
+tradition at E.ON. This collaborative partnership is integral to
+our corporate culture.
+We aim to attract talented people to our company and provide
+them with a work environment that enables them to do their
+best. Our People Strategy helps us do this, especially in times
+of change. Its three focus areas-Preparing Our People for the
+Future, Providing Opportunities, and Recognizing Performance-
+are crucial for maintaining attractive working conditions and
+fostering our employees' personal and professional development.
+A key enabler for the latter is Grow@E.ON, a Group-wide compe-
+tency framework that is integrated into all our HR mechanisms.
+It helps ensure that we recruit, retain, and develop the people
+who will continue to drive E.ON's success. We offer a range of
+career paths. This ensures that we are an attractive employer
+to people who wish to pursue a specialist or a generalist career.
+In 2018 we decentralized our HR activities to be closer to the
+business. One important function of Group HR is the HR man-
+agement of our company's top 100 leaders. These tasks include
+executive development, placement, succession planning, and
+talent pipeline management. Each unit must have in place its
+own mechanisms to identify and develop talent and to conduct
+succession planning. Its management's responsibilities include
+ensuring that all new employees receive a company orientation
+as well as training on essential topics like health and safety. For
+this purpose, the units may use standardized E.ON e-learning
+modules. These and other virtual learning tools as well as courses
+and training programs are offered by the HR Business Solutions
+team in Group HR. E-Learning is an effective, flexible, and up-to-
+date way of delivering learning to our employees.
+The Senior Vice President for HR is periodically invited to attend
+Management Board meetings to talk about employee issues.
+The Management Board discusses the current status of our talent
+pool each time a top executive position is filled. Once or twice
+a year, it gets an overview of our entire talent pool, including
+lower levels of management.
+More information about E.ON's compliance with Germany's Law
+for the Equal Participation of Women and Men in Leadership
+Positions in the Private Sector and the Public Sector can be found
+in management's statement regarding this law.
+had support mechanisms for female managers in place for a
+number of years. These mechanisms include mentoring programs
+for female next-generation managers, coaching, training to
+prevent unconscious bias, the provision of daycare, and flexible
+work schedules. Increasing the percentage of women in our
+internal talent pool is a further prerequisite for raising, over the
+long term, their percentage in management and top executive
+positions.
+46
+Business Report
+In 2018 we again implemented numerous measures to promote
+diversity at E.ON. An important purpose of these measures is
+to foster the career development of female managers. We set
+new, ambitious targets to increase the proportion of women in
+management positions. By year-end 2026, we want the propor-
+tion of women in management positions to be the same-32 per-
+cent-as the proportion of women in our overall workforce was
+at year-end 2016. Each unit has specific targets, and progress
+towards these targets is monitored at regular intervals. We also
+have Group-wide recruiting and hiring guidelines for management
+positions. These guidelines require that at least one male and
+one female must be on the short list for a vacant management
+position. Through these measures, the proportion of women in
+management positions rose from just over 11 percent in 2010
+to 21.2 percent at year-end 2018 for the Group as a whole
+and from 9 percent to 15.9 percent for Germany. Our units have
+Our approach to promoting diversity is holistic, encompassing
+all dimensions of diversity. It ensures equal opportunity for all
+employees and fosters and harnesses diversity in an individual
+way. However, we prioritize three dimensions: gender, age, and
+internationality.
+In 2008 E.ON publicly affirmed its commitment to fairness and
+respect by signing the German Diversity Charter, which now
+has about 2,700 signatories. E.ON therefore belongs to a large
+network of companies committed to diversity, tolerance, fairness,
+and respect.
+In April 2018 the E.ON Management Board, the German Groups
+Works Council, and the Group representation for severely dis-
+abled persons signed the Shared Understanding of Implementing
+Inclusion at E.ON, creating a strong foundation for integrating
+people with disabilities into our organization.
+of skilled workers. In addition, a diverse workforce enables us
+to do an even better job of meeting our customers' needs and
+requirements. In 2006 we issued a Group Policy on Equal Oppor-
+tunity and Diversity. In late 2016 E.ON along with the SE Works
+Council of E.ON SE renewed this commitment to diversity.
+Going forward, diversity will remain a key element of E.ON's
+competitiveness. Diversity and an appreciative corporate culture
+promote creativity and innovation. This is a central aspect of
+the E.ON vision as well. E.ON brings together a diverse team of
+people who differ by nationality, age, gender, disability, religion,
+and/or cultural and social background. We foster and utilize
+diversity in specific ways and create an inclusive work environ-
+ment. Diversity is a key success factor. Studies have shown that
+heterogeneous teams outperform homogenous ones. Diversity
+is equally crucial in view of demographic trends. Going forward,
+only those companies that embrace diversity will be able to
+remain attractive employers and be less affected by the shortage
+Diversity
+In addition, we continued the process of digitizing our HR offer-
+ings. In particular, the basic components of grow@E.ON consist
+of modern applications harnessing the potential of advanced IT
+solutions, such as Cloud-based platforms that can be accessed
+from anywhere.
+E.ON has a long tradition of maintaining a constructive, mutually
+trusting partnership with employee representatives (see the
+section above entitled Collaborative Partnership with Employee
+Representatives). Our relationship with employees and their rep-
+resentatives is founded on a social partnership.
+We use a single management hiring process throughout the
+Group. It is designed to improve how we fill senior management
+positions, make hiring more transparent, and ensure equal
+opportunity. Its main component is a biweekly placement con-
+ference at which HR managers from around our company dis-
+cuss vacancies and potential candidates. We also conduct an
+annual management review. These mechanisms ensure that our
+managers are engaged in ongoing professional development
+and that we have a transparent view of our current talent situa-
+tion and our needs for the future.
+of our business through three to six deployments in different
+E.ON units and departments. In 2018 we offered the EGP in
+the United Kingdom, Sweden, the Czech Republic, Hungary, and
+Romania.
+45
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+21
+CEO Letter
+We have in place a wide range of measures to make working
+at E.ON attractive and to develop our employees. E.ON offers
+vocational training in numerous careers and work-study pro-
+grams. One example is the E.ON training initiative in Germany,
+which helps school-leavers get a start on their careers through
+internships that prepare them for an apprenticeship as well
+as school projects and other programs. The E.ON Graduate Pro-
+gram ("EGP") recruits highly qualified university graduates for a
+24-month program during which they receive a broad overview
+To ensure our people have a consistent framework within our
+decentralized management approach, the HR team and the
+E.ON Management Board developed and approved our People
+Commitments in 2017. They establish twelve principles that
+articulate our values and how we treat our employees. These
+principles are binding for the entire E.ON Group and are fully
+supported by the SE Works Council of E.ON SE. Units have
+adopted these principles in a way that reflects their particular
+legal, cultural, and business environment. Our People Guidelines
+and our People Commitments encompass a number of policies
+and guidelines. Examples include agreements on remote working
+and flexible work arrangements, such as sabbaticals, part-time
+work, and special holidays. Our international transfer policy
+governs the temporary foreign deployment of our employees.
+The average length of a foreign deployment is between two
+and three years.
+We believe that an attractive compensation package including
+appealing fringe benefits is essential for rewarding our employ-
+ees. The compensation plans of nearly all our employees contain
+an element that reflects the company's performance. This element
+is typically based on the same key performance indicators that
+are also used in the Management Board's compensation plan.
+Workforce Figures
+Embedding YES! Awards, a way we recognize outstanding
+achievements as they happen and further motivate employ-
+ees (Recognizing Performance).
+Continuing to implement grow@E.ON, a Group-wide frame-
+work for the personal and professional development of our
+employees and managers (Preparing for the Future)
+29,112
+28,811
+Capital employed in continuing and discontinued operations (annual average)4
+Adjusted EBIT5
+28,250
+29,371
+Capital employed in continuing and discontinued operations (at year-end)4
+-1,541
+-1,655
+Non-interest-bearing provisions³
+-4,893
+-4,152
+-5,688
+-4,862
+Other non-interest-bearing assets/liabilities, including deferred income and deferred tax assets²
+Current assets
+794
+710
+Inventories
+34,684
+35,178
+Non-current assets
+4,339
+4,263
+Shares in affiliated and associated companies and other share investments
+2,989
+3,074
+ROCE6
+Cost of capital before taxes
+•
+The three focus areas of our People Strategy are: Preparing Our
+People for the Future, Providing Opportunities, and Recognizing
+Performance. In 2018 we continued to bring these focus areas
+to life through a combination of local unit-level activity and
+Group-wide projects:
+We developed our People Strategy to enable E.ON to maintain
+continuity in times of change, regardless of how the organiza-
+tion structures its business or how we adjust our strategic pri-
+orities in order to meet customer needs.
+People Strategy
+Employees
+43
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Developing and rolling out a Group-wide employee value
+proposition (Providing Opportunities)
+CEO Letter
+1,145
+6.4%
+6.4%
+10.6%
+10.4%
+8Value added = (ROCE - cost of capital) x annual average capital employed.
+6Adjusted for non-operating effects; for purposes of internal management control, adjusted EBIT includes the earnings from activities at Renewables classified as discontinued operations.
+'ROCE adjusted EBIT divided by annual average capital employed.
+5In order to better depict intraperiod fluctuations in average capital employed, annual average capital employed is calculated as the arithmetic average of the amounts at the beginning of the year
+and the end of the year.
+4For purposes of internal management control, average capital employed includes activities at Renewables classified as discontinued operations.
+¹Depreciable non-current assets are included at their book value. Goodwill from acquisitions is included at acquisition cost, as long as this reflects its fair value.
+2Examples of other non-interest-bearing assets/liabilities include income tax receivables and income taxes as well as receivables and payables relating to derivatives.
+³Non-interest-bearing provisions mainly include current provisions, such as those relating to sales and procurement market obligations. They do not include provisions for pensions or nuclear-waste
+management.
+Value added
+1,211
+At year-end 2018 the E.ON Group had 43,302 employees world-
+wide, slightly more (+1.4 percent) than at year-end 2017. E.ON
+also had 899 apprentices in Germany and 132 board members
+and managing directors worldwide.
+Report of the Supervisory Board
+Headcount
+5,244
+5,648
+Employees¹
+5,711
+6,427
+9,504
+9,077
+9,975
+9,502
+15,635
+15,400
+16,138
+15,903
+2017
+2018
+2017
+Dec. 31,
+Dec. 31,
+Dec. 31,
+Dec. 31,
+2018
+FTE³
+Headcount
+47
+5,081
+5,234
+5,073
+2,771
+30 and younger
+2017
+2018
+Percentages at year-end
+Proportion of Female Employees
+Employees by Age
+At year-end 2018 the average E.ON Group employee was about
+42 years old and had worked for us for just under 14 years.
+As at the end of 2017, 32 percent of our employees were women
+at the end of 2018.
+Gender and Age Profile, Part-Time Staff
+647
+703
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+656
+585
+679
+585
+681
+1,968
+2,027
+1,990
+2,058
+2,549
+2,758
+2,563
+716
+Combined Group Management Report
+6,363
+Report of the Supervisory Board
+1,893
+Non-Core Business
++2
+40,787
+41,409
+Core business
+-9
+2,683
+2,447
+Corporate Functions/Other²
++14
+1,206
+1,374
+Renewables
++3
++1
+19,519
+19,692
+Customer Solutions
++1-%
+E.ON Stock
+Strategy and Objectives
+17,896
+Energy Networks
+2018
+1,912
+-1
+December 31,
+2017
+17,379
+43,302
+E.ON Group
+CEO Letter
+3Full-time equivalent.
+2Includes Poland, Italy, Denmark, and other countries.
+¹Figures do not include board members, managing directors, or apprentices.
+Other²
+USA
+Sweden
+Czech Republic
+Hungary
+Romania
+United Kingdom
+CEO Letter
+Employees by Country¹
+Germany
+The main reason for the increase in Energy Networks' headcount
+was the filling of vacancies (in Germany, predominantly with
+apprentices who had successfully completed their training) to
+expand the business and the integration of formerly outsourced
+activities in Romania. In the Czech Republic, employees were
+transferred to this segment from Customer Solutions. These
+effects were partially offset by the sale of Hamburg Netz GmbH.
+The increase in the number of employees at Customer Solutions
+mainly reflects the transfer of employees who were previously
+reported under Corporate Functions/Other and new hiring in the
+Czech Republic, Romania, and Sweden. The increase was par-
+tially offset by the impact of restructuring projects in Germany
+and, in particular, the United Kingdom.
+The expansion of onshore operations (particularly in the United
+States), offshore operations in Germany and the United King-
+dom, and support functions led to an increase in Renewables'
+headcount.
+The transfer of employees to other segments, in particular Cus-
+tomer Solutions, was the main reason for the significant decline
+in the number of employees at Corporate Functions/Other. The
+Phoenix reorganization program also led to staff reductions.
++1
+¹Does not include board members, managing directors, or apprentices.
+2Includes E.ON Business Services.
+Geographic Profile
+At year-end 2018, 27,399 employees, or 63 percent of all
+employees, were working outside Germany, slightly more than
+the 62 percent at year-end 2017.
+Non-Core Business consists of our nuclear energy business in
+Germany. Its headcount decreased because of the ongoing
+transition from power generation to asset dismantling, which
+requires fewer employees.
+42,699
+58
+Energy Networks
+The operation of energy networks in Germany, in Sweden, but
+also in other countries is subject to a large degree of regulation.
+New laws and regulatory periods cause uncertainty as well as
+chances in this business. For example, matters related to Ger-
+many's Renewable Energy Law, such as issues regarding solar
+energy, can cause temporary fluctuations in our cash flow and
+adjusted EBIT. This could create major chances as well as pose
+a major risk. The rapid growth of renewables is also creating
+new risks for the network business. For example, insolvencies
+among renewables operators or feed-in tariffs unduly paid by
+grid operators could lead to court or regulatory proceedings.
+Renewables
+Regulatory and legal risks attend our renewables business as
+well. For example, legal proceedings and approvals could pose a
+major risk. Furthermore, the various national regulatory regimes
+in Europe can in some cases undergo considerable change.
+Changes to legislation and regulations sometimes have a consid-
+erable impact on subsidy and remuneration mechanisms, which
+result in a major chance and a major risk. New and amended
+laws can themselves become the subject of administrative or
+court proceedings.
+Operational and IT Risks
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology. This includes
+risks and chances arising from information security.
+Technologically complex production facilities are used in the
+production and distribution of energy, resulting in major risks
+from procurement and logistics, construction, operations and
+maintenance of assets as well as general project risks. In the case
+of PreussenElektra, this also includes dismantling activities.
+Our operations in and outside Germany face major risks of unan-
+ticipated operational or other problems leading to a power failure
+or shutdown and/or higher costs and additional investments.
+Operational failures or extended production stoppages of facilities
+or components of facilities as well as environmental damage
+Risk and Chances Report
+Health and safety are important aspects of our day-to-day busi-
+ness. Our operating activities can therefore pose risks in these
+areas and create social and environmental risks and chances. In
+addition, our operating business potentially faces risks resulting
+from human error and employee turnover. It is important that
+we act responsibly along our entire value chain and that we
+communicate consistently, enhance the dialog, and maintain
+good relationships with our key stakeholders. We actively con-
+sider environmental, social, and corporate-governance issues.
+These efforts support our business decisions and our public
+relations. Our objective is to minimize our reputational risks and
+garner public support so that we can continue to operate our
+business successfully. These matters do not result in a major
+risk or chance position.
+General project risks can include a delay in projects and increased
+capital requirements. For our Renewables segment, a project
+delay could lead to the loss of government subsidies and cause
+potential partners to exit the project, which could likewise lead
+to risks.
+We could also be subject to environmental liabilities associated
+with our power generation operations that could materially and
+adversely affect our business. In addition, new or amended
+environmental laws and regulations may result in increases in
+our costs.
+HSE, HR, and Other Risks
+The E.ON Group's operations subject it to certain risks relating to
+legal proceedings, ongoing planning processes, and regulatory
+changes. But these risks also relate, in particular, to legal actions
+and proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of the
+transformation of Germany's energy system) an altered business
+climate in the power and gas business, price increases, alleged
+market-sharing agreements, and anticompetitive practices. This
+could pose a major risk.
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia
+and Bavaria. E.ON SE can be held responsible for damage. This
+could lead to major individual risks that we currently only evalu-
+ate qualitatively.
+Market Risk
+Our units operate in an international market environment that
+is characterized by general risks relating to the business cycle.
+In addition, the entry of new suppliers into the marketplace
+along with more aggressive tactics by existing market partici-
+pants and reputational risks have created a keener competitive
+environment for our electricity business in and outside Ger-
+many, which could reduce our margins. However, market devel-
+opments could also have a positive impact on our business.
+Such factors include wholesale and retail price developments,
+customer churn rates, and temporary volume effects in the net-
+work business. This results in a major risk position and a major
+chance position in this category.
+The demand for electric power and natural gas is seasonal, with
+our operations generally experiencing higher demand during
+the cold-weather months of October through March and lower
+demand during the warm-weather months of April through
+September. As a result of these seasonal patterns, our sales and
+results of operations are higher in the first and fourth quarters
+and lower in the second and third quarters. Sales and results of
+operations for all of our energy operations can be negatively
+affected by periods of unseasonably warm weather during the
+autumn and winter months. We expect seasonal and weather-
+related fluctuations in sales and results of operations to con-
+tinue. Periods of exceptionally cold weather-very low average
+temperatures or extreme daily lows-in the fall and winter
+months can have a positive impact owing to higher demand for
+electricity and natural gas.
+E.ON's portfolio of physical assets, long-term contracts, and
+end-customer sales is exposed to uncertainty resulting from
+fluctuations in commodity prices. This yields a major risk and
+a major chance, although only for Preussen Elektra. After the
+Uniper spinoff, E.ON established procurement capabilities for
+its sales business and ensured market access for the output of
+its remaining energy production in order to manage the remain-
+ing commodity risks accordingly.
+could negatively impact our earnings, affect our cost situation,
+and/or result in the imposition of fines. In unlikely cases, this
+could lead to a high risk. Overall, it results in a medium risk posi-
+tion and a moderate chance position in this category.
+Customer Solutions
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+In 2003, Section 6 of Germany's Atomic Energy Act ("the Act")
+granted consent for Unterweser NPP to store radioactive spent
+nuclear fuel in an on-site intermediate storage facility. Lawsuits
+were filed against the consent. The complainants asked that the
+court rescind the consent on the grounds that the storage facil-
+ity is not sufficiently protected against terrorist attacks. Settle-
+ment talks are currently under way between the complainants
+and the defendant agency. If the court rules definitively in favor
+of the complainants, nuclear fuel could not be removed from
+Unterweser NPP on schedule. This would significantly prolong
+dismantling, thereby leading to higher costs. This could pose a
+major risk.
+Medium
+Best case (95th percentile)
+Medium
+Moderate
+Low
+Major
+Low
+Moderate
+56
+The E.ON Group has major risk positions in the following cate-
+gories: legal and regulatory risks and market risks. As a result,
+the aggregate risk position of E.ON SE as a Group is major. In
+other words, the E.ON Group's average annual adjusted EBIT
+risk ought not to exceed -€200 million to -€1 billion in 95 percent
+of all cases.
+Risks and Chances by Category
+E.ON's major risks and chances by risk category are described
+below. Also described are major risks and chances stemming
+from tail events as well as qualitative risks that would impact
+adjusted EBIT by more than €200 million. Risks and chances
+that would affect net income and/or cash flow by more than
+€200 million are included as well.
+Legal and Regulatory Risks
+particular, the EU package of climate-protection measures and
+the recommendations regarding the phaseout of hard-coal- and
+lignite-fired power generation made by the commission appointed
+by the German federal government. In addition, in the wake
+of the economic and financial crisis in many EU member states,
+interventionist policies and regulations have been adopted in
+recent years, such as additional taxes, additional reporting require-
+ments (for example, EMIR, REMIT, MiFID2), price moratoriums,
+regulatory price reductions, and changes to support schemes
+for renewables. Such intervention could pose major risks to, as
+well as opportunities for, E.ON's operations in these countries.
+There may also be final risks from obligations arising from regu-
+latory requirements following the Uniper split. This risk category
+also includes the risk of litigation, fines, and claims, governance-
+and compliance-related issues as well as risks and chances
+related to contracts and permits. Changes to this environment
+can lead to considerable uncertainty with regard to planning
+and, under certain circumstances, to impairment charges but
+can also create chances. This results in a major risk position and
+a medium chance position.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+57
+PreussenElektra
+PreussenElektra's business is substantially influenced by regu-
+lation. In general, regulation can result in risks for its remaining
+operating and dismantling activities. One example is the
+Fukushima nuclear accident. Policy measures taken in response
+to such events could have a direct impact on the further opera-
+tion of a nuclear power plant ("NPP") or trigger liabilities and
+significant payment obligations stemming from the solidarity
+obligation agreed on among German NPP operators. Further-
+more, new regulatory requirements, such as additional manda-
+tory safety measures or delays in dismantling, could lead to
+production outages and higher costs. In addition, there may be
+lawsuits that fundamentally challenge the operation of NPPs.
+Regulation can also require an increase in provisions for disman-
+tling. These factors could pose major risks for E.ON.
+On December 6, 2016, Germany's Federal Constitutional Court
+in Karlsruhe ruled that the thirteenth amended version of the Act
+is fundamentally constitutional. The Act's only unconstitutional
+elements are that certain NPP operators will be unable to pro-
+duce their electricity allotment from 2002 and that it contains
+no mechanism for compensating operators for investments to
+extend NPP operating lifetimes. Lawmakers established a new
+compensation mechanism in the sixteenth amended version of
+the Act. In addition, NPPs need to acquire production rights, also
+known as a residual electricity allotment, in order to operate
+until their closure dates prescribed by law. These matters could
+yield major chances and major risks.
+The political, legal, and regulatory environment in which the
+E.ON Group does business is a source of external risks, such as
+the uncertainty surrounding Brexit and the possibility that the
+United Kingdom could leave the European Union without an
+agreement. This would confront E.ON with direct and indirect con-
+sequences that could potentially lead to financial disadvantages.
+Other risks result from decisions by governments to phase out
+power generation using certain energy sources. In the recent past,
+these decisions have been supplemented by energy-policy deci-
+sions at the European and national level. These include, in
+Local Risk Committees
+22
+To promote uniform financial reporting Group-wide, we have in
+place a central, standardized system that enables effective and
+automated risk reporting. Company data are systematically col-
+lected, transparently processed, and made available for analysis
+both centrally and decentrally at the units.
+Risks and Chances
+Methodology
+Our IT-based system for reporting risks and chances has the
+following risk categories:
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+55
+Risk Category
+Risk Category
+Legal and regulatory risks
+Our ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose book value in E.ON's
+Consolidated Financial Statements is greater than €50 million.
+We take an inventory of our risks and chances at each quarterly
+balance-sheet date.
+Operational and IT risks
+Market risks
+Strategic risks
+Finance and treasury risks
+Examples
+Policy and legal risks and chances, regulatory risks, risks from public consents processes
+IT and process risks and chances, risks and chances relating to the operation of generation
+assets, networks, and other facilities, new-build risks
+Health, safety, and environmental risks and chances
+Risks and chances from the development of commodity prices and margins and from changes
+in market liquidity
+Risks and chances from investments and disposals
+Credit, interest-rate, foreign-currency, tax, and asset-management risks and chances
+E.ON uses a multistep process to identify, evaluate, simulate,
+and classify risks and chances. Risks and chances are generally
+reported on the basis of objective evaluations. If this is not
+possible, we use internal estimates by experts. The evaluation
+measures a risk/chance's financial impact on our current earnings
+plan while factoring in risk-reducing countermeasures. The
+evaluation therefore reflects the net risk.
+We then evaluate the likelihood of occurrence of quantifiable
+risks and chances. For example, the wind may blow more or less
+hard at a wind farm. This type of risk is modeled with a normal
+distribution. Modeling is supported by a Group-wide IT-based
+system. Extremely unlikely events-those whose likelihood of
+occurrence is 5 percent or less-are classified as tail events. Tail
+events are not included in the simulation described below.
+This statistical distribution makes it possible for our IT-based
+risk management system to conduct a Monte Carlo simulation
+of quantifiable risks/chances. This yields an aggregated risk
+distribution that is quantified as the deviation from our current
+earnings plan for adjusted EBIT.
+We use the 5th and 95th percentiles of this aggregated risk
+distribution as the worst case and best case, respectively. Statis-
+tically, this means that with this risk distribution there is a
+90-percent likelihood that the deviation from our current earn-
+ings plan for adjusted EBIT will remain within these extremes.
+HSE, HR, and other
+As required by law, our ERM's effectiveness is reviewed regularly
+by Internal Audit. In compliance with the provisions of Section 91,
+Paragraph 2, of the German Stock Corporation Act relating to
+the establishment of a risk-monitoring and early warning system,
+E.ON has a Risk Committee for the E.ON Group and for each of
+its business units. The Risk Committee's mission is to achieve a
+comprehensive view of our risk exposure at the Group and unit
+level and to actively manage risk exposure in line with our risk
+strategy.
+documentation and reporting.
+management and monitoring of risks and chances by
+analyzing and evaluating countermeasures and preventive
+systems
+systematic employee training, advanced training, and quali-
+fication programs for our employees
+further refinement of our production procedures, processes,
+and technologies
+•
+regular facility and network maintenance and inspection
+•
+•
+•
+•
+company guidelines as well as work and process instructions
+quality management, control, and assurance
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+Should an accident occur despite the measures we take, we
+have a reasonable level of insurance coverage.
+Risk and Chances Report
+54
+Managing Market Risks
+We use a comprehensive sales-management system and inten-
+sive customer management to manage margin risks.
+In order to limit our exposure to commodity price risks, we con-
+duct systematic risk management. The key elements of our risk
+management are, in addition to binding Group-wide policies
+and a Group-wide reporting system, the use of quantitative key
+figures, the limitation of risks, and the strict separation of func-
+tions between departments. Furthermore, we utilize derivative
+financial instruments that are commonly used in the marketplace.
+These instruments are transacted with financial institutions,
+brokers, power exchanges, and third parties whose creditwor-
+thiness we monitor on an ongoing basis. Our local sales units
+and the remaining generation operations have set up local risk
+management under central governance standards to monitor
+these underlying commodity risks and to minimize them through
+hedging.
+risk and chance analysis and evaluation
+systematic risk and chance identification
+.
+•
+•
+•
+The last step is to assign, in accordance with the 5th and 95th
+percentiles, the aggregated risk distribution to impact classes-
+low, moderate, medium, major, and high-according to their
+quantitative impact on adjusted EBIT. The impact classes are
+shown in the table below.
+Our risk management system, which is the basis for the risks
+and chances described in the next section, encompasses:
+Note 30 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial instru-
+ments and hedging transactions. Note 31 describes the general
+principles of our risk management and applicable risk metrics
+for quantifying risks relating to commodities, credit, liquidity,
+interest rates, and currency translation.
+We use a Group-wide credit risk management system to system-
+atically measure and monitor the creditworthiness of our busi-
+ness partners on the basis of Group-wide minimum standards.
+We manage our credit risk by taking appropriate measures,
+which include obtaining collateral and setting limits. The E.ON
+Group's Risk Committee is regularly informed about all credit
+risks. A further component of our risk management is a conser-
+vative investment strategy for financial funds and a broadly
+diversified portfolio.
+This category encompasses credit, interest-rate, currency, tax,
+and asset-management risks and chances. We use systematic
+risk management to monitor and control our interest-rate and
+currency risks and manage these risks using derivative and
+non-derivative financial instruments. Here, E.ON SE plays a cen-
+tral role by aggregating risk positions through intragroup trans-
+actions and hedging these risks in the market. Due to E.ON SE's
+intermediary role, its risk position is largely closed.
+Managing Finance and Treasury Risks
+We have comprehensive preventive measures in place to manage
+potential risks relating to acquisitions and investments. To the
+degree possible, these measures include, in addition to the rele-
+vant company guidelines and manuals, comprehensive due dili-
+gence, legally binding contracts, a multi-stage approvals process,
+and shareholding and project controlling. Comprehensive post-
+acquisition projects also contribute to successful integration.
+Managing Strategic Risks
+Enterprise Risk Management ("ERM")
+Impact Classes
+Low
+Moderate
+Renewables
+0.8
+0.9
+20
+24
+8.5
+8.4
+846
+818
+2017
+2018
+2017
+2018
+Percentage of workforce
+Headcount
+Customer Solutions
+Energy Networks
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+49
+Corporate Functions/Other
+The healthcare systems of the countries we operate in differ
+considerably in terms of their delivery of medical care, their
+health-insurance and pension systems, and their legal require-
+ments for occupational health and safety. Nevertheless, the
+most common illnesses resulting in an inability to work are the
+same in all countries: musculoskeletal disorders, psychological
+problems, and respiratory infections. The leading causes of
+death are the same as well: heart disease and cancer. E.ON's
+health management focuses on preventing these diseases. We
+strive to prevent psychological problems by providing mental-
+health training and by conducting an employee-assistance
+program, which gives employees free access to outside health
+consultants and social counseling. Checkups and preventive
+care (fit-for-work examinations) by our company doctors help
+to reduce general and workplace-specific risks. We also con-
+duct campaigns to raise awareness of diseases such as bowel
+cancer and the importance of early cancer detection. Flu vacci-
+nation programs help to prevent dangerous illnesses. Together,
+these programs address the increasing significance of health
+and well-being for maintaining our employees' ability to work,
+in particular by focusing on their mental health.
+Company contributions to employee pension plans represent an
+important component of an employee's compensation package
+and have long had a prominent place in the E.ON Group. They are
+an important foundation of employees' future financial security
+and also foster employee retention.
+Apprenticeships
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 899 apprentices and
+work-study students in Germany at year-end 2018. This repre-
+sented 5.4 percent of E.ON's total workforce in Germany, slightly
+less than at the end of the prior year (5.5 percent).
+E.ON provides vocational training in more then 20 careers and
+work-study programs in order to meet its own needs for skilled
+workers and to take targeted action to address the consequences
+of demographic change.
+Apprentices in Germany
+At year-end
+Compensation, Pension Plans, Employee Participation
+Attractive compensation and appealing fringe benefits are
+essential to a competitive work environment. The compensation
+plans of nearly all our employees contain an element that reflects
+the company's performance. This element is typically based
+on the same key performance indicators that are also used in
+the Management Board's compensation plan.
+•
+14
+0.7
+Medium
+Major
+High
+x < €10 million
+€10 million ≤ x < €50 million
+€50 million ≤ x < €200 million
+€200 million ≤ x < €1 billion
+x ≥ €1 billion
+Risk and Chances Report
+General Risk Situation
+The table below shows the average annual aggregated risk
+position (aggregated risk position) across the time horizon of
+the medium-term plan for all quantifiable risks and chances
+(excluding tail events) for each risk category based on our most
+important financial key performance indicator, adjusted EBIT.
+Risk Category
+Risk category
+Legal and regulatory risks
+Operational and IT risks
+HSE, HR, and other
+Market risks
+Strategic risks
+Finance and treasury risks
+Worst case (5th percentile)
+Major
+1.3
+Core business
+856
+895
+5.8
+5.9
+29
+Non-Core Business
+47
+2.2
+Medium
+Major
+Low
+Medium
+43
+.
+The following are among the comprehensive measures we take
+to address HSE, HR, and other risks (also in conjunction with
+operational and IT risks):
+Managing Health, Safety, and Environmental ("HSE"), Human
+Resources ("HR"), and Other Risks
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+51
+We expect Non-Core Business's adjusted EBIT to be at the prior-
+year level. We anticipate positive operating developments at
+the generation business in Turkey accompanied by a deterioration
+of the exchange rate. We expect Preussen Elektra's earnings to
+reflect rising market prices counteracted by higher depreciation
+charges in conjunction with our dismantling obligations along
+with the absence of one-off items recorded in 2018.
+Anticipated Financial Situation
+Planned Funding Measures
+In addition to our investments planned for 2019 and the divi-
+dend for 2018, in 2019 we will make payments for bonds that
+have matured. We also expect to have increased funding needs
+due to the innogy acquisition. Over the course of the year, these
+payments will be funded with available liquid funds and debt.
+Dividend
+E.ON will propose paying its shareholders a dividend of €0.43
+per share for the 2018 financial year in view of the planned
+acquisition of innogy as part of an extensive asset swap with
+RWE. In addition, in line with the current dividend policy, the
+E.ON Management Board and Supervisory Board intend to
+propose paying shareholders a dividend of €0.46 per share for
+the 2019 financial year.
+Planned Investments
+For the 2019 financial year we plan cash-effective investments
+of €3.7 billion. E.ON will continue its strategy aimed at delivering
+sustainable growth. Our capital allocation will of course continue
+to be selective and disciplined.
+Energy Networks' investments will consist in particular of
+numerous individual investments to expand our networks,
+switching equipment, and metering and control technology
+as well as other investments to continue to ensure the reliable
+and uninterrupted transmission and distribution of electricity.
+Investments at Customer Solutions will go toward metering
+and upgrade projects as well as the expansion of our e-mobility
+activities. We will also invest in our heat business in Sweden,
+Germany, and the United Kingdom.
+Renewables' investments in onshore wind will serve primarily
+to expand its business in the United States. In addition, it will
+continue to maintain and expand its offshore-wind and solar
+portfolio.
+Renewables
+E.ON Group
+0.8
+Customer Solutions
+46
+1.7
+CEO Letter
+Energy Networks
+€ in billions
+Cash-Effective Investments: 2019 Plan
+The 2019 financial year too will reflect our high proportion of
+regulated businesses and our clear commitment to a consistent
+dividend policy. On balance, we expect a stable performance
+and want to be even better at seizing the opportunities of the
+green, distributed, and digital energy world. Our ambition is
+and will remain to do the best job possible of making the great
+opportunities in the new energy world available to our customers
+and shareholders.
+General Statement of E.ON's Future
+Development
+The number of employees in the E.ON Group (excluding appren-
+tices and board members/managing directors) will increase
+slightly to meet the demands of the business.
+Employees
+Percentages
+1.1
+We anticipate that adjusted EBIT at Corporate Functions/Other
+will improve and thus exceed the previous year's level, primarily
+because of additional cost savings.
+We anticipate that Customer Solutions' adjusted EBIT will be
+significantly below the prior-year level. The intervention of the
+U.K. Competition and Markets Authority will be the primary
+negative factor.
+5.4
+5.5
+Forecast Report
+50
+50
+Forecast Report
+Business Environment
+Macroeconomic Situation
+In November 2018 the OECD predicted that global economic
+growth will remain strong in 2019 and in 2020, although it will
+be slightly below the peak of 2018. It expects the global economy
+to grow by 3.5 percent in 2019 and 2020. The corresponding
+figures for the United States are 2.7 percent and 2.1 percent,
+whereas weaker growth (1.8 percent and 1.6 percent) is forecast
+for the euro zone.
+Anticipated Earnings Situation
+Forecast Earnings Performance
+In line with our corporate strategy as well as the macroeco-
+nomic and industry-specific environment, we are addressing
+the challenges in our operating business. We want to make
+Energy Networks even more high-performing, in particular
+through innovative digital solutions at all of our network com-
+panies. We want to expand Customer Solutions' market share
+and make it more profitable.
+Against this backdrop, we expect the E.ON Group's 2019
+adjusted EBIT to be between €2.9 and €3.1 billion and its 2019
+adjusted net income to be between €1.4 and €1.6 billion. In
+addition, we expect to achieve a cash-conversion rate of at least
+80 percent and ROCE of 8 to 10 percent.
+At this time, we are issuing no statements about the possible
+future implications of the acquisition of innogy as part of a
+extensive asset swap with RWE, in particular because it is sub-
+ject to the usual antitrust approvals.
+Our forecast by segment:
+Adjusted EBIT¹
+€ in billions
+Energy Networks
+Customer Solutions
+Renewables
+We expect Energy Networks' 2019 adjusted EBIT to be slightly
+above the prior-year figure. The network business in Germany
+will deliver a positive performance and benefit from additional
+investments in its regulated asset base. In addition, higher power
+tariffs in Sweden will increase earnings. The new regulatory
+period for gas networks in Romania will have an adverse impact.
+0.4
+3.0
+At prior-year level
+2.9 to 3.1
+-0.2
+Above prior year
+0.4
+0.5
+We expect Renewables' adjusted EBIT to be above the prior-year
+level. The completion of Arkona offshore wind farm in December
+2018 and the expansion of onshore wind capacity in North
+America will have a positive impact on earnings.
+Above prior year
+Slightly above prior year
+Significantly below prior year
+2018
+2019 (forecast)
+¹Adjusted for non-operating effects.
+E.ON Group
+Corporate Functions/Other
+Non-Core Business
+1.8
+CEO Letter
+29
+0.1
+meaningful information about risks and chances to the
+business, thereby enabling the business to derive individual
+risks/chances as well as aggregate risk profiles within the
+time horizon of the medium-term plan (three years)
+transparency on risk exposures in compliance with legal
+requirements including KonTraG, BilMoG, and BilReG.
+Our ERM is based on a centralized governance approach which
+defines standardized processes and tools covering the identifi-
+cation, evaluation, countermeasures, monitoring, and reporting
+of risks and chances. Overall governance is provided by Group
+Risk Management on behalf of the E.ON SE Risk Committee.
+All risks and chances have an accountable member of the Man-
+agement Board, have a designated risk owner who remains
+operationally responsible for managing that risk/chance, and
+are identified in a dedicated bottom-up process.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+53
+Scope
+Our risk management system in the broader sense has a total of
+four components:
+an internal monitoring system
+•
+a management information system
+•
+Our IT systems are maintained and optimized by qualified E.ON
+Group experts, outside experts, and a wide range of technologi-
+cal security measures. In addition, the E.ON Group has in place
+a range of technological and organizational measures to counter
+the risk of unauthorized access to data, the misuse of data, and
+data loss.
+To limit operational and IT risks, we continually improve our
+network management and the optimal dispatch of our assets.
+At the same time, we are implementing operational and infra-
+structure improvements that will enhance the reliability of our
+generation assets and distribution networks, even under extraor-
+dinarily adverse conditions. In addition, we have factored the
+operational and financial effects of environmental risks into our
+emergency plan. They are part of a catalog of crisis and system-
+failure scenarios prepared for the Group by our Incident and
+Crisis Management team.
+Managing Operational and IT Risks
+We attempt to minimize the operational risks of legal proceedings
+and ongoing planning processes by managing them appropriately
+and by designing appropriate contracts beforehand.
+We engage in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, we strive to conduct proper project
+management so as to identify early and minimize the risks
+attending our new-build projects.
+Managing Legal and Regulatory Risks
+•
+We take the following general preventive measures to limit risks.
+The E.ON internal management information system identifies
+risks early so that steps can be taken to actively address them.
+Reporting by the Controlling, Finance, and Accounting depart-
+ments as well as Internal Audit reports are of particular impor-
+tance in early risk detection.
+The purpose of the internal monitoring system is to ensure the
+proper functioning of business processes. It consists of organi-
+zational preventive measures (such as policies and work
+instructions) and internal controls and audits (particularly by
+Internal Audit).
+sense.
+the ERM, which is a risk management system in the narrow
+preventive measures
+⋅
+General Measures to Limit Risks
+Corporate Functions/Other
+Our Enterprise Risk Management ("ERM") provides the man
+agement of all units as well as the E.ON Group with a fair and
+realistic view of the risks and chances resulting from their
+planned business activities. It provides:
+Internal Audit
+3
+Non-Core Business
+Total
+3.7
+100
+Risk and Chances Report
+Enterprise Risk Management System in the
+Narrow Sense
+Group
+Risk
+Decision-Making
+Committee
+Bodies
+Board
+E.ON SE
+Management
+E.ON SE
+Supervisory
+Board
+52
+Identify,
+Evaluate
+and
+Manage
+Consolidate
+Govern
+and
+Steer
+2.4
+Objective
+Non-Core Corporate
+Business Functions
+Networks
+Customer Energy
+Solutions
+Units and
+Departments
+Central Enterprise Risk Management
+Group
+Audit and Risk
+Committee
+Renew-
+ables
+942
+899
+3
+Owned generation
+31.2
+27.5
+Purchases
+8.1
+9.9
+Jointly owned power plants
+Third parties
+1.4
+1.3
+6.7
+8.6
+Total power procurement
+39.3
+37.4
+Station use, line loss, etc.
+-0.1
+-0.2
+Power sales
+39.2
+9.9
+10.6
+-0.1
+Station use, line loss, etc.
+Power sales
+2017
+861
+785
+Fourth quarter
+521
+454
+Owned generation
+8.5
+8.6
+37.2
+Purchases
+1.4
+Jointly owned power plants
+Third parties
+0.4
+0.3
+1.7
+1.1
+Total power procurement
+10.6
+10.0
+2.1
+This segment's sales and adjusted EBIT rose year on year, in
+particular owing to an increase in owned generation. This was
+because Bruenning's Breeze and Radford's Run onshore wind
+farms in the United States were for the first time operational for
+the entire year and Rampion offshore wind farm in the United
+Kingdom entered service. This was partially offset by adverse
+price effects in the United States and Europe.
+Non-Core Business
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as generating
+capacity, power generation, and power sales volume.
+Fourth quarter
+Sales
+416
+355
+416
+355
+Adjusted EBITDA
+120
+157
+2017
+23
+143
+137
+45
+149
+23
+-20
+68
+129
+Full year
+-20
+2018
+2018
+2018
+Fully Consolidated and Attributable Generating Capacity
+PreussenElektra's fully consolidated and attributable generating
+capacity of 4,150 MW and 3,808 MW, respectively, were
+unchanged from the prior year.
+Full year
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+67
+2017
+Sales and Adjusted EBIT
+Adjusted EBIT decreased from €393 million to €382 million.
+The decline is mainly attributable to lower sales prices and the
+absence of one-off items at Preussen Elektra. This was partially
+offset by lower expenditures to procure power to cover delivery
+obligations due to the increase in owned generation.
+By contrast, adjusted EBIT at the generation business in Turkey
+was higher because prior-year equity earnings on our stake in
+Enerjisa Üretim were adversely affected in particular by a book
+loss on the sale of a hydroelectric station. In addition, Enerjisa
+Üretim recorded a volume- and price-driven increase in earnings
+in 2018.
+Non-Core Business
+€ in millions
+Preussen Elektra
+Generation/Turkey
+Total
+2018
+2017
+PreussenElektra's sales declined by €186 million, mainly because
+of lower sales prices and the absence of one-off items in con-
+junction with legal proceedings.
+Sales
+PreussenElektra
+1,604
+Power Generation
+Power Production and Sales
+This segment's sales volume rose by 2.8 billion kWh.
+Owned generation was 2.2 billion kWh higher, in particular
+because Bruenning's Breeze and Radford's Run onshore wind
+farms in the United States were for the first time operational
+for the entire year, Stella onshore wind farm in the United States
+entered service in December 2018, and Rampion offshore
+wind farm in the United Kingdom entered service in April 2018.
+Unfavorable wind conditions, especially in Germany, had an
+adverse impact on owned generation.
+Power procurement increased, principally because of new
+power supply contracts at our onshore business in the United
+Kingdom. This was partially offset by a reduction in power
+procurement due to adverse wind conditions in Denmark.
+Billion kWh
+Renewables
+2018
+2017
+Fourth quarter
+Owned generation
+4.2
+3.8
+Purchases
+1.0
+0.8
+Jointly owned power plants
+0.2
+0.3
+Third parties
+Onshore Wind/Solar's availability factor of 94.8 percent was at
+the prior-year level of 94.6 percent. Offshore Wind/Other's avail-
+ability factor declined from 97.6 to 96.8 percent because of
+lower availability at Amrumbank West in Germany and certain
+assets in the United Kingdom.
+At 5,334 MW, this segment's fully consolidated generating
+capacity at year-end 2018 was by 13 percent higher (prior year:
+4,716 MW); its attributable generating capacity of 5,742 MW
+was 12 percent higher (prior year: 5,131 MW). The principal
+reason for the increase was the commissioning of Stella and
+Arkona wind farms at the end of 2018.
+Generating Capacity
+5,131
+479
+523
+523
+672
+479
+4,776
+4,178
+5,023
+4,625
+0.8
+35
+47
+27
+4,811
+4,193
+5,070
+4,652
+5,334
+4,716
+5,742
+15
+0.5
+5.2
+4.6
+2017
+Power Generation and Sales Volume
+This segment's power procured (owned generation and pur-
+chases) of 39.3 billion kWh was slightly above the prior-year level.
+The increase in owned generation is principally attributable to
+the unplanned outage of Brokdorf nuclear power station in 2017.
+Consequently, less power was purchased to meet delivery
+obligations than in the prior year. The increase in sales volume
+relative to 2017 resulted primarily from the aforementioned
+outage at Brokdorf.
+€ in millions
+Fourth quarter
+Sales
+541
+474
+Adjusted EBITDA
+2018
+327
+Adjusted EBIT
+238
+206
+Power Generation
+Full year
+Sales
+Adjusted EBITDA
+Adjusted EBIT
+1,754
+277
+Billion kWh
+Renewables
+Sales and Adjusted EBIT
+Power sales
+Full year
+Owned generation
+14.7
+12.5
+Purchases
+3.0
+2.4
+Jointly owned power plants
+Renewables' sales and adjusted EBIT were up by €150 million
+and €67 million, respectively.
+0.7
+Third parties
+2.3
+1.5
+Power sales
+17.7
+14.9
+Business Segments
+66
+99
+0.9
+1,399
+1,585
+1,399
+44.1
+42.5
+58.0
+54.7
+135.1
+141.1
+¹Includes passthrough not recorded in sales pursuant to IFRS 15 (for more information, see Note 2 to the Consolidated Financial Statements).
+2Excludes E.ON Connecting Energies.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+63
+Power and Gas Sales Volume
+This segment's power and gas sales declined by 5.1 billion kWh
+and 6 billion kWh, respectively.
+Power sales in Germany of 38.1 billion kWh were 4 percent
+below the prior-year level. Power sales to the wholesale market
+declined owing to lower sales volume on already-contracted
+deliveries to some Uniper wholesale customers relative to 2017.
+By contrast, buybacks through the direct marketing of output in
+conjunction with Germany's Renewable Energy Law were higher.
+Power sales to residential and small and medium enterprise
+("SME") customers and to industrial and commercial ("I&C") cus-
+tomers were at the prior-year level. Gas sales of 33 billion kWh
+were 25 percent below the prior-year level. The reason for
+the significant decline in gas sales to the wholesale market
+(-12.4 billion kWh) is the same as for power. Residential and
+SME customers consumed about as much gas as in the prior
+year. By contrast, gas sales to I&C customers rose.
+137
+Power sales at the Other unit (Sweden, Hungary, the Czech
+Republic, Romania, and Italy) declined by 1.2 billion kWh.
+Power sales to I&C customers in the Czech Republic declined
+owing primarily to keener competition. The expiration of a sales
+contract in the Czech Republic was the principal factor in the
+significant decline in power sales to the wholesale market. This
+was partially offset by increased deliveries to existing wholesale
+customers in Hungary. Power sales to residential and SME cus-
+tomers were higher, due in particular to the acquisition of new
+customers in Italy and Sweden. Gas sales were 3.3 billion kWh
+higher. Gas sales to I&C customers rose mainly because of the
+transfer of the gas business in Sweden, which in the prior year
+was reported at Energy Networks. This was partially offset by a
+weather-driven decline in gas sales to I&C customers in Romania.
+The increase in gas sales to the wholesale market is attributable
+to weather-driven demand spikes in Romania and the advent of
+direct market access in Italy. By contrast, gas sales to residential
+and SME customers declined owing to weather factors, partic-
+ularly in Romania.
+43.9
+33.0
+Total
+19.7
+Sales partners
+1.7
+2.2
+1.7
+2.2
+Customer groups
+28.4
+26.9
+44.1
+Customer Numbers
+42.5
+52.0
+124.7
+121.4
+Wholesale market
+4.6
+17.0
+5.8
+2.7
+10.4
+52.2
+This segment had about 21 million customers at year-end 2018,
+fewer than the prior-year figure of 21.1 million. The number of
+customers in the United Kingdom declined form 6.8 to 6.6 million;
+power customers accounted for most of the customer losses. In
+Germany they increased from 5.9 million in 2017 to 6 million in
+2018; of these, 5.1 million were power customers and 0.9 million
+gas customers (2017: 5.1 million power customers, 0.8 million
+gas customers). We had a total of 8.5 million customers in the
+other countries where this segment operates, about as many as
+in 2017.
+Business Segments
+64
+2,122
+2,118
+2,077
+6,320
+6,091
+Adjusted EBITDA
+45
+33
+26
+2,326
+137
+57
+134
+227
+Adjusted EBIT
+36
+26
+-1
+108
+18
+63
+33.6
+1,892
+Sales
+Sales and Adjusted EBIT
+Customer Solutions' sales rose by €551 million. Its adjusted
+EBIT decreased by €66 million.
+Sales in Germany declined primarily because of the expiration
+of sales contracts to certain wholesale customers that were
+transferred to Uniper. Price adjustments and a decline in power
+sales to residential and SME customers were additional adverse
+factors. These effects were partially offset by an increase in gas
+sales to I&C customers. Adjusted EBIT was significantly above
+the prior-year level, primarily because of a wider gross margin
+in the power and gas sales business.
+Sales in the United Kingdom were higher due to price increases
+and a weather-driven increase in gas sales volume. This was
+partially offset by a reduction in power sales volume and adverse
+currency-translation effects. Adjusted EBIT declined owing to
+persistently challenging market conditions, higher restructuring
+expenditures, regulatory effects, and a weather-driven decline
+in power sales volume.
+Sales at this segment's Other unit rose by €244 million, princi-
+pally because of higher sales prices in Sweden, Italy, and Hun-
+gary. The transfer of the gas business in Sweden from Energy
+Networks and higher sales volume in Italy were also positive
+factors. Sales in the Czech Republic declined, mainly because of
+netting effects pursuant to IFRS 15. Adverse currency-transla-
+tion effects in Sweden had a negative impact as well. Adjusted
+EBIT declined year on year, in particular because of the unavail-
+ability of a cogeneration plant at E.ON Connecting Energies that
+this unit operates for a customer. In addition, an improved gross
+power margin in Romania was more than offset by a narrower
+gas margin resulting from higher procurement costs. By contrast,
+the aforementioned transfer of the gas sales business in Sweden
+had a positive impact on adjusted EBIT.
+Customer Solutions
+€ in millions
+Germany Sales
+United Kingdom
+1,876
+Other
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+Fourth quarter
+Total
+36.9
+20.9
+22.3
+Corporate headquarters defines and oversees the roles and
+responsibilities of various Group entities in the preparation of
+E.ON SE's Financial Statements and the Consolidated Financial
+Statements. These roles and responsibilities are described in a
+Group Policy document.
+E.ON Group companies are responsible for preparing their
+financial statements in a proper and timely manner. They receive
+substantial support from Business Service Centers in Regensburg,
+Germany, and Cluj, Romania. E.ON SE combines the financial
+statements of subsidiaries belonging to its scope of consolida-
+tion into its Consolidated Financial Statements using standard
+consolidation software. Group Accounting is responsible for
+conducting the consolidation and for monitoring adherence to the
+guidelines for scheduling, processes, and contents. Monitoring
+of system-based automated controls is supplemented by manual
+checks.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information relevant for accounting
+is compiled. Furthermore, dedicated quality-control processes
+are in place for all relevant departments to discuss and ensure
+the completeness of relevant information on a regular basis.
+E.ON SE's Financial Statements are prepared with SAP software.
+The accounting and preparation processes are divided into
+discrete functional steps. Bookkeeping processes are handled
+by our Business Service Centers: Cluj has responsibility for pro-
+cesses relating to subsidiary ledgers and several bank activities,
+Regensburg for those relating to the general ledgers. Automated
+or manual controls are integrated into each step. Defined proce-
+dures ensure that all transactions and the preparation of E.ON SE's
+Financial Statements are recorded, processed, assigned on an
+accrual basis, and documented in a complete, timely, and accu-
+rate manner. Relevant data from E.ON SE's Financial Statements
+are, if necessary, adjusted to conform with IFRS and then trans-
+ferred to the consolidation software system using SAP-supported
+transfer technology.
+The following explanations about our internal control system
+and our general IT controls apply equally to the Consolidated
+Financial Statements and to E.ON SE's Financial Statements.
+Internal Control System
+Internal controls are an integral part of our accounting processes.
+Guidelines define uniform financial-reporting requirements and
+procedures for the entire E.ON Group. These guidelines encom-
+pass a definition of the guidelines' scope of application; a Risk
+Catalog (ICS Model); standards for establishing, documenting,
+and evaluating internal controls; a Catalog of ICS Principles;
+a description of the test activities of our Internal Audit division;
+672
+All companies included in the Consolidated Financial Statements
+must comply with our uniform Accounting and Reporting Guide-
+lines for the Annual Consolidated Financial Statements and
+the Interim Consolidated Financial Statements. These guidelines
+describe applicable IFRS accounting and valuation principles.
+They also explain accounting principles typical in the E.ON Group,
+such as those for provisions for nuclear-waste management,
+the treatment of financial instruments, and the treatment of
+regulatory obligations. We continually analyze amendments
+to laws, new or amended accounting standards, and other pro-
+nouncements for their relevance to, and consequences for, our
+Consolidated Financial Statements and, if necessary, update our
+guidelines and systems accordingly.
+523
+2017
+2018
+2017
+2018
+Attributable
+Fully consolidated
+65
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+523
+Report of the Supervisory Board
+Accounting Process
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the German
+Energy Act.
+1,585
+Adjusted EBITDA
+556
+654
+-17
+-113
+539
+541
+Adjusted EBIT
+We prepare a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+399
+-17
+-113
+382
+393
+Internal Control System for the Accounting Process
+68
+Disclosures Pursuant to Section 289, Para-
+graph 4, and Section 315, Paragraph 4 of
+the German Commercial Code on the Internal
+Control System for the Accounting Process
+General Principles
+We apply Section 315e, Paragraph 1, of the German Commercial
+Code and prepare our Consolidated Financial Statements in
+accordance with International Financial Reporting Standards
+("IFRS") and the interpretations of the IFRS Interpretations
+Committee that were adopted by the European Commission for
+use in the EU as of the end of the fiscal year and whose appli-
+cation was mandatory as of the balance-sheet date (see Note 1
+to the Consolidated Financial Statements). Energy Networks
+(Germany, Sweden, and East-Central Europe/Turkey), Customer
+Solutions (Germany, United Kingdom, Other), Renewables, Non-
+Core Business, and Corporate Functions/Other are our IFRS
+reportable segments.
+506
+53
+CEO Letter
+Outside Germany
+351
+237
+132
+193
+Adjusted EBITDA
+21,576
+22,127
+7,357
+7,601
+294
+7,205
+7,014
+6,768
+Sales
+Full year
+I&C
+6.4
+5.0
+8.2
+7.7
+7,758
+Total
+312
+795
+Solar
+Wind
+Germany
+85.6
+Solar
+Wind
+MW
+December 31
+Fully Consolidated and Attributable Generating Capacity
+724
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as generating
+capacity, power generation, and power sales volume.
+479
+413
+129
+111
+248
+142
+102
+160
+Adjusted EBIT
+Renewables
+Power sales in the United Kingdom declined by 2.5 billion kWh.
+Lower average consumption and lower customer numbers were
+the principal factors for residential and SME customers. Power
+sales to I&C customers likewise decreased owing to lower
+average offtake per customer. By contrast, gas sales rose by
+1.6 billion kWh. Gas sales to residential and SME customers and
+to I&C customers increased mainly because of weather factors.
+Adjusted EBIT
+86.1
+Energy Networks
+Germany
+Sweden
+East-Central Europe/
+Turkey
+Total
+€ in millions
+2018¹
+2017
+2018
+Sales in East-Central Europe/Turkey declined significantly,
+primarily owing to netting effects in conjunction with IFRS 15
+in the Czech Republic (€0.2 billion). Adjusted EBIT fell signifi-
+cantly-by €79 million-year on year, in particular because of a
+decline in equity earnings on our stake in Enerjisa Enerji in Turkey.
+Higher operating earnings were more than offset, primarily by
+higher refinancing costs. The initial public offering reduced our
+stake by 10 percentage points, which also adversely affected
+earnings relative to the prior year. In addition, adjusted EBIT in
+Romania was significantly lower, mainly because of higher costs
+(primarily for maintenance) and lower prices.
+2017
+2017
+2018
+2017
+Fourth quarter
+Sales
+1,683
+3,402
+260
+241
+2018
+412
+gross margin in the power business, which resulted from tariff
+increases. This was partially offset by adverse currency-transla-
+tion effects.
+Sales in Germany declined by 56 percent, from €14.2 billion to
+€6.2 billion. They were reduced primarily by netting effects in
+conjunction with IFRS 15 (€7.6 billion). In addition, sales in gas
+distribution were reduced by the sale of Hamburg Netz. Adjusted
+EBIT declined by €135 million year on year to €895 million. The
+principal reasons were the non-recurrence of a positive one-off
+item involving the delayed repayment of personnel costs in
+Germany for regulatory reasons, the sale of Hamburg Netz, and
+the beginning of the third regulatory period for gas. These factors
+were partially offset by a positive one-off item in 2018.
+159.7
+¹Includes passthrough not recorded in sales pursuant to IFRS 15 (for more information, see Note 2 to the Consolidated Financial Statements).
+2Power passthrough, line losses, and so forth, not including power fed back into upstream systems (2017 adjusted retroactively).
+Power and Gas Passthrough
+Power passthrough in 2018 of 181.9 billion kWh was at the
+prior-year level. Gas passthrough declined by 24.3 billion kWh.
+Power passthrough and line losses in Germany of 106.9 billion kWh
+and 3.8 billion kWh, respectively, were at the prior-year level. Gas
+passthrough declined by 21.2 billion to 89.4 billion kWh, owing
+primarily to the sale of Hamburg Netz effective January 1, 2018.
+Power passthrough in Sweden was at the prior-year level. Gas
+passthrough declined because of the sale of the gas distribution
+network in April 2018.
+On balance, power and gas passthrough at East-Central Europe/
+Turkey were at the prior-year level in the Czech Republic, Roma-
+nia, and Hungary.
+System Length and Connections
+Our power system in Germany was about 350,000 kilometers
+long, roughly the same as in the prior year. At year-end we
+had about 5.8 million connection points for power (prior year:
+5.7 million). The sale of Hamburg Netz shortened our gas system
+from about 60,000 to about 51,000 kilometers and reduced the
+number of connection points from 0.9 to 0.7 million.
+Sales in Sweden were below the prior-year level due to adverse
+currency-translation effects, the transfer of the gas business
+to Customer Solutions, and the sale of the gas distribution net-
+work in April 2018. Adjusted EBIT rose owing to an improved
+The length of our power system in Sweden was roughly
+137,900 kilometers, slightly more than the prior-year figure of
+136,900 kilometers. The number of connection points in the
+power distribution system was unchanged at roughly 1 million.
+We sold our gas network in 2018.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+61
+Sales and Adjusted EBIT
+Energy Networks' sales were €8.2 billion below the prior-year
+figure. Adjusted EBIT declined by €190 million.
+System length in East-Central Europe/Turkey-about 231,000
+kilometers for power and about 45,000 kilometers for gas-
+was almost unchanged from the prior year, as were the roughly
+4.7 million connection points for power and the roughly
+1.3 million for gas.
+135.4
+480
+4,123
+1,072
+1,537
+1,719
+8,769
+16,990
+1,488
+895
+1,621
+1,030
+648
+989
+632
+767
+2,819
+3,020
+498
+474
+451
+530
+1,844
+2,034
+683
+2,355
+14,199
+Adjusted EBIT
+Adjusted EBITDA
+306
+411
+172
+154
+223
+632
+799
+Adjusted EBIT
+6,243
+140
+135
+129
+97
+153
+372
+531
+Full year
+Sales
+Adjusted EBITDA
+249
+¹Income and expenses resulting from the Renewable Energy Law's feed-in scheme in Germany have been netted out; we adjusted the prior-year quarters accordingly (see Note 2 to the Consolidated
+Financial Statements).
+45.2
+3.9
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as power and
+gas passthrough, system length, and number of connections.
+Energy Passthrough¹
+60
+60
+East-Central Europe/
+Germany
+Sweden
+Turkey
+Total
+Energy Networks
+2018
+2018
+2017
+2018
+2017
+2018
+2017
+Billion kWh
+Fourth quarter
+Power
+20172
+27.8
+Business Segments
+This category's overall risk and chance position is not major.
+Management Board's Evaluation of the Risk
+and Chances Situation
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+59
+59
+Strategic Risks
+The overall risk and chances situation of the E.ON Group's oper-
+ating business at year-end 2018 remained nearly unchanged
+relative to year-end 2017. Although the average annual risk
+for the E.ON Group's adjusted EBIT is classified as major, from
+today's perspective we do not perceive any risk position that
+could threaten the existence of the E.ON Group or individual
+segments.
+Our business strategy involves acquisitions and investments in
+our core business as well as disposals. This strategy depends in
+part on our ability to successfully identify, acquire, and integrate
+companies that enhance, on acceptable terms, our energy busi-
+ness. In order to obtain the necessary approvals for acquisitions,
+we may be required to divest other parts of our business or to
+make concessions or undertakings that affect our business. In
+addition, there can be no assurance that we will be able to achieve
+the returns we expect from any acquisition or investment. It
+is also possible that we will not be able to realize our strategic
+ambition of enlarging our investment pipeline and that signifi-
+cant amounts of capital could be used for other opportunities.
+Furthermore, investments and acquisitions in new geographic
+areas or lines of business require us to become familiar with new
+sales markets and competitors and to address the attending
+business risks.
+The overall risk and chance position in this category was not
+major at the balance-sheet date.
+Finance and Treasury Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results from
+non-delivery or partial delivery by a counterparty of the agreed
+consideration for services rendered, from total or partial failure
+to make payments owed on existing accounts receivable, and
+from replacement risks in open transactions. For example, E.ON'S
+historical connection with Uniper continues to pose major, albeit
+unlikely, risks. In addition, in unlikely cases joint and several lia-
+bility for jointly operated power plants could lead to a major risk.
+E.ON's international business operations expose it to risks from
+currency fluctuation. One form of this risk is transaction risk,
+which arises when payments are made in a currency other than
+E.ON's functional currency. Another form of risk is translation
+risk, which arises when currency fluctuations lead to accounting
+effects when assets/liabilities and income/expenses of E.ON
+companies outside the euro zone are translated into euros and
+entered into our Consolidated Financial Statements. Currency-
+translation risk results mainly from our positions in U.S. dollars,
+pounds sterling, Swedish kronor, Czech krona, Romanian leus,
+Hungarian forints, and Turkish lira. Positive developments in
+foreign-currency rates can also create chances for our operating
+business.
+E.ON faces earnings risks from financial liabilities and interest-
+rate derivatives that are based on variable interest rates and
+from asset-retirement obligations.
+In addition, the price changes and other uncertainty relating to
+the current and non-current investments E.ON makes to cover
+its non-current obligations (particularly pension and asset-
+retirement obligations) could, in individual cases, be major.
+Declining or rising discount rates could lead to increased or
+reduced provisions for pensions and asset-retirement obliga-
+tions, including non-current liabilities. This can create a high
+risk for E.ON.
+In principle, E.ON could also encounter tax risks and chances;
+in one case, the chance could be high.
+In the case of planned disposals, E.ON faces the risk of dispos-
+als not taking place or being delayed and the risk that E.ON
+receives lower-than-anticipated disposal proceeds. In addition,
+after transactions close we could face major liability risks
+resulting from contractual obligations.
+44.5
+27.7
+9.6
+Gas
+106.9
+107.6
+37.1
+36.9
+37.9
+37.3
+181.9
+181.8
+Line loss, station use, etc.
+3.8
+1.1
+1.1
+2.6
+2.8
+7.5
+7.7
+89.4
+110.6
+1.5
+3.8
+10.1
+Power
+51.1
+10.0
+9.7
+47.9
+47.0
+Line loss, station use, etc.
+1.1
+1.0
+0.3
+0.3
+Full year
+0.6
+2.0
+2.0
+Gas
+26.7
+35.1
+0.8
+15.7
+15.2
+42.4
+0.7
+Business Segments
+165
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as power and
+gas sales volume and customer numbers.
+39.5
+32.3
+34.8
+57.7
+58.9
+128.1
+133.2
+¹Includes passthrough not recorded in sales pursuant to IFRS 15 (for more information, see Note 2 to the Consolidated Financial Statements).
+2Excludes E.ON Connecting Energies.
+Gas Sales¹
+Germany Sales
+United Kingdom
+Other²
+Total
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+Billion kWh
+Fourth quarter
+38.1
+Total
+25.1
+22.8
+26.6
+47.7
+49.7
+Sales partners
+0.7
+0.8
+0.7
+0.8
+Customer groups
+25.1
+25.3
+Residential and SME
+31.4
+48.8
+49.1
+105.3
+108.1
+Wholesale market
+13.0
+14.2
+0.9
+1.1
+8.9
+9.8
+33.7
+7.4
+Customer Solutions
+11.7
+Wholesale market
+1.2
+4.2
+1.6
+1.2
+2.8
+5.4
+Total
+10.6
+12.8
+14.0
+40.2
+13.9
+18.9
+43.1
+45.6
+Full year
+Residential and SME
+22.0
+21.9
+35.9
+34.8
+28.2
+28.9
+18.5
+25.6
+40.3
+16.9
+11.8
+9.8
+9.8
+29.0
+28.6
+I&C
+2.0
+1.6
+2.3
+2.1
+6.3
+17.7
+6.4
+10.1
+Sales partners
+0.7
+1.5
+0.7
+1.5
+Customer groups
+9.4
+8.6
+14.0
+13.9
+10.6
+14.8
+7.0
+8.3
+5.2
+6.0
+5.9
+15.5
+I&C
+2.0
+2.0
+3.1
+3.7
+6.3
+7.1
+11.4
+12.8
+Sales partners
+0.2
+0.2
+0.2
+4.7
+0.2
+4.6
+Residential and SME
+13.7
+Power Sales¹
+62
+Germany Sales
+United Kingdom
+Other²
+Total
+2018
+2017
+2018
+2017
+2018
+2017
+2018
+2017
+Billion kWh
+Fourth quarter
+4.8
+Customer groups
+15.7
+9.4
+8.0
+15.1
+15.9
+33.4
+I&C
+57.6
+56.9
+10.7
+21.7
+18.9
+17.7
+6.8
+17.0
+16.7
+Residential and SME
+Full year
+22.5
+36.0
+10.3
+7.3
+6.6
+7.8
+8.9
+12.5
+13.2
+27.1
+28.7
+Wholesale market
+3.5
+4.1
+0.2
+0.5
+2.6
+8.4
+2.7
+6.3
+Total
+Supervisory Board member
+76
+Investment and
+Supervisory Board
+The Management Board has no board committees but has
+established a number of committees that support it in the
+fulfillment of its tasks. The members of these committees are
+senior representatives of various departments of E.ON SE
+whose experience, responsibilities, and expertise make them
+particularly suited for their committee's tasks. Among these
+committees are the following:
+Audit and Risk
+Committee
+Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board
+and Its Committees
+Innovation
+Committee
+Executive
+Committee
+Furthermore, the Supervisory Board's policies and procedures
+gave it the option, if necessary, of holding executive sessions;
+that is, to meet without the Management Board.
+A Risk Committee ensures the correct application and implemen-
+tation of the legal requirements of Section 91 of the German
+Stock Corporation Act (known by its German abbreviation, "AktG").
+This committee monitors the E.ON Group's risk situation and
+its risk-bearing capacity and devotes particular attention to the
+early-warning system to ensure the early identification of
+going-concern risks in order to avoid developments that could
+potentially threaten the Group's continued existence. In this
+context, the Risk Committee also deals with risk-mitigation
+strategies (including hedging strategies). In collaboration with
+relevant departments, the committee ensures and refines the
+implementation of, and compliance with, the Company's report-
+ing policies with regard to commodity risks, credit risks, and
+enterprise risk management.
+The Supervisory Board has established policies and procedures
+for itself, which are available on the Company's Internet page.
+Itholds at least four regular meetings in each financial year. Its
+policies and procedures include mechanisms by which, if neces-
+sary, a meeting of the Supervisory Board or one of its committees
+can be called at any time by a member or by the Management
+Board. Shareholder representatives and employee representatives
+can prepare for Supervisory Board meetings separately. In the
+event of a tie vote on the Supervisory Board, the Chairperson has
+the tie-breaking vote.
+Nomination
+Committee
+Members of the Management Board are also required to promptly
+report conflicts of interest to the Executive Committee of the
+Supervisory Board and to inform the other members of the Man-
+agement Board. Members of the Management Board may only
+assume other corporate positions, particularly appointments
+to the supervisory boards of non-Group companies, with the
+consent of the Executive Committee of the Supervisory Board.
+There were no conflicts of interest involving members of the
+E.ON SE Management Board in the year under review. Any mate-
+rial transactions between the Company and members of the
+Management Board, their relatives, or entities with which they
+have close personal ties require the consent of the Executive
+Committee of the Supervisory Board. No such transactions took
+place in the reporting period.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+75
+Corporate Governance Report
+The Management Board has established a Disclosure Committee
+and an Ad Hoc Committee for issues relating to financial
+disclosures. These committees ensure that such information
+is disclosed in a correct and timely fashion.
+Pursuant to E.ON SE's then-valid Articles of Association, effective
+the conclusion of the 2018 Annual Shareholders Meeting the
+Supervisory Board was reduced to 12 members. At the recom-
+mendation of the Supervisory Board and Management Board,
+the 2018 Annual Shareholders Meeting adopted a resolution to
+expand the Supervisory Board to 14 members. After the effective
+date of this change to the Articles of Association, the E.ON SE
+Supervisory Board has 14 members. Pursuant to E.ON SE's
+Articles of Association, it is composed of an equal number of
+shareholder and employee representatives. The shareholder
+representatives are elected by the shareholders at the Annual
+Shareholders Meeting; the Supervisory Board nominates can-
+didates for this purpose. As a rule, the Annual Shareholders
+Meeting decides on the elections by individual vote. Pursuant
+to the agreement regarding employees' involvement in E.ON SE,
+the other currently seven members of the Supervisory Board
+are appointed by the SE Works Council, with the provision that
+at least three different countries are represented and one mem-
+ber is selected by a trade union that is represented at E.ON SE
+or one of its subsidiaries in Germany. Persons are not eligible as
+Supervisory Board members if they:
+•
+are already supervisory board members in ten commercial
+companies that are required by law to form a supervisory
+board,
+are legal representatives of an enterprise controlled by the
+Company,
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Management Board, or
+•
+were a member of the Company's Management Board in the
+past two years, unless the person concerned is nominated
+by shareholders who hold more than 25 percent of the Com-
+pany's voting rights.
+The members of the E.ON SE Supervisory Board fulfill these
+requirements. Pursuant to the AktG, at least one member of the
+Supervisory Board must have expertise in preparing or auditing
+financial statements. The Supervisory Board believes that, in
+particular, Andreas Schmitz meets this requirement. The Super-
+visory Board believes that its members in their entirety are
+familiar with the sector in which the Company operates.
+The Supervisory Board oversees the Company's management
+and advises the Management Board on an ongoing basis. The
+Management Board requires the Supervisory Board's prior
+approval for significant transactions and measures, such as the
+Group's investment, finance, and personnel plans; the acquisition
+or sale of companies, equity interests, or parts of companies
+whose fair value or, in the absence of a fair value, whose book
+value exceeds €300 million; financing measures that exceed
+€1 billion and have not been covered by Supervisory Board
+resolutions regarding finance plans; and the conclusion, amend-
+ment, or termination of affiliation agreements. The Supervisory
+Board examines the Financial Statements of E.ON SE, the Man-
+agement Report, and the proposal for profit appropriation and,
+on the basis of the Audit and Risk Committee's preliminary
+review, the Consolidated Financial Statements and the separate
+Combined Non-Financial Report. The Supervisory Board provides
+to the Annual Shareholders Meeting a written report on the
+results of this examination.
+Supervisory Board
+Kley, Dr. Karl-Ludwig
+4/4
+3/3
+Schmitz, Andreas
+6/6
+4/4
+Segundo, Dr. Karen de
+6/6
+1/1 (guest)
+3/3
+to be sold and transferred against cash consideration
+Siegert, Dr. Theo
+3/3
+1/1 (guest)
+2/2
+Woste, Ewald
+6/6
+1/1
+5/6
+Kingsmill, Baroness Denise
+1/25
+1/1
+Lehner, Prof. Dr. Ulrich
+3/3
+1/1
+Clementi, Erich
+6/6
+2/24
+2/23
+1/13
+Dybeck Happe, Carolina
+6/6
+2/23
+2/22
+Fröhlich, Klaus
+1/1 (guest)
+to be sold and transferred against contributions in kind
+Transparent Management
+to be offered, with or without consideration, for purchase
+and transferred to individuals who are or were employed
+by the Company or one of its affiliates as well as to board
+members of affiliates of the Company
+The Company issues ad hoc statements when events or
+changes occur at E.ON SE that could have a significant impact
+on the price of E.ON stock.
+A financial calendar lists the dates on which the Company's
+periodic financial reports are released.
+Numerous events for financial analysts in and outside Germany.
+Telephone conferences held on release of the quarterly and
+annual results
+•
+•
+The financial calendar and ad hoc statements are available on
+the Internet at www.eon.com.
+. Press releases
+Half-Year Financial Report and Quarterly Statements
+Annual Report
+⋅
+.
+•
+E.ON SE issues reports about its situation and earnings by the
+following means:
+Transparency is a high priority of the Management Board and
+Supervisory Board. Our shareholders, all capital market partici-
+pants, financial analysts, shareholder associations, and the media
+regularly receive up-to-date information about the situation of,
+and any material changes to, the Company. We primarily use the
+Internet to help ensure that all investors have equal access to
+comprehensive and timely information about the Company.
+Annual press conference
+In the past financial year the Management Board and Super-
+visory Board paid close attention to E.ON's compliance with the
+German Corporate Governance Code's recommendations and
+suggestions. They determined that E.ON SE fully complies with
+all of the Code's recommendations and with nearly all of its
+suggestions.
+Relevant Information about Management Practices
+Corporate Governance
+Corporate Governance Report
+The Chairperson of the Management Board informs, without
+undue delay, the Chairperson of the Supervisory Board of import-
+ant events that are of fundamental significance in assessing
+the Company's situation, development, and management and
+of any defects that have arisen in the Company's monitoring
+systems. Transactions and measures requiring the Supervisory
+Board's approval are also submitted to the Supervisory Board
+in a timely manner.
+4/4
+The Management Board regularly reports to the Supervisory
+Board on a timely and comprehensive basis on all relevant issues
+of strategy, planning, business development, risk situation, risk
+management, and compliance. It also submits the Group's
+investment, finance, and personnel plan for the next financial
+year as well as the medium-term plan to the Supervisory Board,
+generally at the last meeting of each financial year.
+age should not be a member of the Management Board. The
+Management Board has in place policies and procedures for the
+business it conducts and, in consultation with the Supervisory
+Board, has assigned task areas to its members.
+In 2018 the Management Board consisted of four members
+initially and, after the appointment of Thomas König effective
+June 1, 2018, of five members. It had one Chairman. No Manage-
+ment Board member has more than three supervisory board
+memberships in listed non-Group companies or on the super-
+visory bodies of non-Group companies that require a similar
+commitment. Someone who has reached the general retirement
+The E.ON SE Management Board manages the Company's
+businesses, with all its members bearing joint responsibility for
+its decisions. It establishes the Company's objectives, sets its
+fundamental strategic direction, and is responsible for corporate
+policy and Group organization.
+E.ON views good corporate governance as a central foundation
+of responsible and value-oriented management, efficient
+collaboration between the Management Board and the Super-
+visory Board, transparent disclosures, and appropriate risk
+management.
+Management Board
+www.eon.com.
+Our actions are grounded in integrity and a respect for the law.
+The basis for this is the Code of Conduct established by the Man-
+agement Board. It emphasizes that all employees must comply
+with laws and regulations and with Company policies. These
+relate to dealing with business partners, third parties, and gov-
+ernment institutions (particularly with regard to antitrust law),
+the granting and accepting of benefits (anti-corruption), and
+the selection of suppliers and service providers. Other matters
+addressed include human rights and the handling of company
+information, property, and resources. The policies and proce-
+dures of our compliance organization ensure the investigation,
+evaluation, cessation, and punishment of reported violations
+by the appropriate Compliance Officers and the E.ON Group's
+Chief Compliance Officer. Violations of the Code of Conduct
+can also be reported anonymously (for example, by means of
+a whistleblower report). The Code of Conduct is published on
+Integrity
+Persons with executive responsibilities, in particular members
+of E.ON SE's Management Board and Supervisory Board, and
+persons closely related to them, must disclose specific dealings
+in E.ON stock or bonds, related derivates, or other related finan-
+cial instruments pursuant to Article 19 of the EU Market Abuse
+Regulation in conjunction with Section 26, Paragraph 2, of the
+German Securities Trading Act. Such dealings that took place in
+2018 have been disclosed on the Internet at www.eon.com.
+Managers' Transactions
+74
+Description of the Functioning of the Management Board and
+Supervisory Board and of the Composition and Functioning of
+Their Committees
+at www.eon.com.
+This declaration and those of the previous five years are contin-
+uously available to the public on the Company's Internet page
+(Chairman of the Management Board of E.ON SE)
+To the extent that the Company has agreed to settlement pay-
+ments for Management Board members in the case of a change
+of control, the purpose of such agreements is to preserve the
+independence of Management Board members.
+In the event of a premature loss of a Management Board posi-
+tion due to a change-of-control event, the service agreements
+of Management Board members entitle them to severance and
+settlement payments (see the detailed presentation in the
+Compensation Report).
+Settlement Agreements between the Company and
+Management Board Members or Employees in the Case
+of a Change-of-Control Event
+The underlying contracts of debt issued since 2007 contain
+change-of-control clauses that give the creditor the right of can-
+cellation. This applies, inter alia, to bonds issued by E.ON SE
+and E.ON International Finance B.V. and guaranteed by E.ON SE,
+promissory notes issued by E.ON SE, and other instruments
+such as credit contracts. Granting change-of-control rights
+to creditors is considered good corporate governance and has
+become standard market practice. More information about
+financial liabilities is contained in the section of the Combined
+Group Management Report entitled Financial Situation and in
+Note 26 to the Consolidated Financial Statements.
+Significant Agreements to which the Company Is a Party That
+Take Effect on a Change of Control of the Company Following
+a Takeover Bid
+At the Annual Shareholders Meeting of May 10, 2017, share-
+holders approved a conditional increase of the share capital
+(with the option to exclude shareholders' subscription rights)
+up to the amount of €175 million (Conditional Capital 2017).
+Note 19 to the Consolidated Financial Statements contains more
+information about Conditional Capital 2017.
+A change-of-control event would also result in the early payout
+of virtual shares under the E.ON Share Matching Plan and the
+E.ON Performance Plan.
+With the Supervisory Board's approval, the Management Board
+adopted a resolution that took effect on March 12, 2018, to
+utilize almost all of Authorized Capital 2017, which had been
+resolved by the Annual Shareholders Meeting of May 10, 2017,
+to increase E.ON SE's share capital-excluding shareholders'
+subscription rights pursuant to Section 203, Paragraph 2, and
+Section 186, Paragraph 3 of the AktG-from €2,201,099,000
+to €2,641,318,800 through the issuance of 440,219,800 new
+registered no-par-value shares against contributions in kind.
+The capital increase and its implementation have not yet been
+filed for entry into the Commercial Register. This is to take place
+after certain conditions precedent are met. The capital increase
+and the issuance of new stock will not take effect until the
+capital increase has been implemented and entered into the
+Commercial Register of E.ON SE. Note 19 to the Consolidated
+Financial Statements contains more information about Autho-
+rized Capital 2017.
+In each case, the Management Board will inform the Share-
+holders Meeting about the utilization of the aforementioned
+authorization, in particular about the reasons for and the purpose
+of the acquisition of treasury shares, the number of treasury
+shares acquired, the amount of the registered share capital
+attributable to them, the portion of the registered share capital
+represented by them, and their equivalent value.
+In addition, the Management Board is authorized to cancel
+treasury shares, without such cancellation or its implementation
+requiring an additional resolution by the Shareholders Meeting.
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, separately or collectively,
+including with respect to treasury shares acquired by affiliated
+companies or companies majority-owned by the Company or
+by third parties for their account or the Company's account.
+72
+Disclosures Regarding Takeovers
+to be used for the purpose of a scrip dividend where share-
+holders may choose to contribute their dividend entitlement
+to the Company in the form of a contribution in kind in
+exchange for new shares.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 10, 2017, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 9, 2022, the Company's share capital by a total of up
+to €460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in
+kind (authorized capital pursuant to Sections 202 et seq. AktG;
+Authorized Capital 2017). Subject to the Supervisory Board's
+approval, the Management Board is authorized to exclude share-
+holders' subscription rights.
+Other Disclosures Relevant to Takeovers
+The Company has not been informed about, nor is it aware of,
+any direct or indirect interests in its share capital that exceed
+10 percent of the voting rights. Note 19 to the Consolidated
+Financial Statements contains more information about the
+planned acquisition of E.ON SE stock by RWE Downstream
+Beteiligungs GmbH. Stock with special rights granting power
+of control has not been issued. In the case of stock given by the
+Company to employees, employees exercise their rights of con-
+trol directly and in accordance with legal provisions and the pro-
+visions of the Articles of Association, just like other shareholders.
+CEO Letter
+For the Management Board of E.ON SE
+Dr. Johannes Teyssen
+(Chairman of the Supervisory Board of E.ON SE)
+Dr. Karl-Ludwig Kley
+For the Supervisory Board of E.ON SE
+Essen, December 18, 2018
+The Board of Management and the Supervisory Board further-
+more declare that E.ON SE has been in compliance in full with
+the recommendations of the "Government Commission German
+Corporate Governance Code," dated February 7, 2017, published
+by the Federal Ministry of Justice and for Consumer Protection
+in the official section of the Federal Gazette (Bundesanzeiger)
+since the last declaration on December 18, 2017.
+The Board of Management and the Supervisory Board hereby
+declare that E.ON SE will comply in full with the recommen-
+dations of the "Government Commission German Corporate
+Governance Code," dated February 7, 2017, published by the
+Federal Ministry of Justice and for Consumer Protection in the
+official section of the Federal Gazette (Bundesanzeiger).
+Declaration Made in Accordance with Section 161 of the
+German Stock Corporation Act by the Management Board and
+the Supervisory Board of E.ON SE
+Corporate Governance Declaration in Accor-
+dance with Section 289f and Section 315d of
+the German Commercial Code
+73
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Combined Group Management Report
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+Scheidt, Andreas
+Pursuant to Section 71b of the German Stock Corporation Act
+(known by its German abbreviation, "AktG"), the Company's
+treasury shares give it no rights, including no voting rights.
+3/3
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utiliza-
+tion of authorized or conditional capital.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+71
+Management Board's Power to Issue or Buy Back Shares
+Pursuant to a resolution of the Shareholders Meeting of May 10,
+2017, the Company is authorized, until May 9, 2022, to acquire
+treasury shares. The shares acquired and other treasury shares
+that are in possession of or to be attributed to the Company
+pursuant to Sections 71a et seq. of the AktG must altogether
+at no point account for more than 10 percent of the Company's
+share capital.
+At the Management Board's discretion, the acquisition may be
+conducted:
+•
+through a stock exchange
+•
+•
+by means of a public offer directed at all shareholders or a
+public solicitation to submit offers
+by means of a public offer or a public solicitation to submit
+offers for the exchange of liquid shares that are admitted to
+trading on an organized market, within the meaning of the
+German Securities Purchase and Takeover Law, for Company
+shares
+by the use of derivatives (put or call options or a combination
+of both).
+Corporate Governance Report
+78
+The Management Board and the Supervisory Board intend to
+propose to the 2019 Annual Shareholders Meeting that the
+number of Supervisory Board members be increased by six per-
+sons to make it possible for innogy employee representatives
+to join the Supervisory Board of the parent company, E.ON SE,
+shortly after the takeover of innogy SE. This would prevent half
+the workforce not being represented on the E.ON SE Super-
+visory Board after the implementation of the innogy takeover.
+The enlargement of the Supervisory Board is to take effect
+with the implementation of the innogy takeover. From the 2023
+Annual Shareholders Meeting onward, the E.ON SE Supervisory
+Board is to have a total of twelve members. In view of continually
+changing business requirements, the Supervisory Board will
+continue to identify necessary competencies early to ensure that
+it has them.
+The Supervisory Board has established the following committees
+and defined policies and procedures for them:
+The Executive Committee consists of four members: the Super-
+visory Board Chairperson, his or her two Deputies, and a further
+employee representative. It prepares the meetings of the Super-
+visory Board and advises the Management Board on matters of
+general policy relating to the Company's strategic development.
+In urgent cases (in other words, if waiting for the Supervisory
+Board's prior approval would materially prejudice the Company),
+the Executive Committee acts on the full Supervisory Board's
+behalf. In addition, a key task of the Executive Committee is to
+prepare the Supervisory Board's personnel decisions and reso-
+lutions for setting the respective total compensation of individual
+Management Board members within the meaning of Section 87,
+AktG. Furthermore, it is responsible for the conclusion, alteration,
+and termination of the service agreements of Management
+Board members and for presenting the Supervisory Board with
+a proposal for a resolution on the Management Board's com-
+pensation plan and its periodic review. In addition, it prepares
+the Supervisory Board's decision on the Group's investment,
+financial, and personnel plan for the next financial year. It also
+deals with corporate-governance matters and reports to the
+Supervisory Board, generally once a year, on the status and
+effectiveness of, and possible ways of improving, the Company's
+corporate governance and on new requirements and develop-
+ments in this area.
+Resolutions of the Shareholders Meeting require a majority of
+the valid votes cast unless mandatory law or the Articles of
+Association explicitly prescribe otherwise. An amendment to
+the Articles of Association requires a two-thirds majority of the
+votes cast or, in cases where at least half of the share capital is
+represented, a simple majority of the votes cast unless manda-
+tory law explicitly prescribes another type of majority.
+The Audit and Risk Committee consists of four members. The
+Supervisory Board believes that, in their entirety, the members
+of the Audit and Risk Committee are familiar with the sector in
+which the Company operates. According to the AktG, the Audit
+and Risk Committee must include one Supervisory Board mem-
+ber who has expertise in accounting or auditing. The Super-
+visory Board believes that in particular Andreas Schmitz fulfills
+this requirement. Pursuant to the recommendations of the Ger-
+man Corporate Governance Code, the Chairperson of the Audit
+and Risk Committee should have special knowledge and experi-
+ence in the application of accounting principles and internal
+control processes. In addition, this person should be independent
+and should not be a former Management Board member whose
+service on the Management Board ended less than two years
+ago. The Supervisory Board believes that the Chairman of the
+Audit and Risk Committee, Andreas Schmitz, fulfills these require-
+ments. In particular, the Audit and Risk Committee deals with
+accounting issues (including the accounting process), risk
+management, compliance, the necessary independence of the
+independent auditor, the issuance of the audit mandate to
+the independent auditor, the definition of the audit priorities,
+the agreement regarding the independent auditor's fees, and
+any additional services performed by the independent auditor.
+The committee's monitoring of risk management encompasses
+reviewing the effectiveness of the internal control system, inter-
+nal risk management, and the internal audit system. The com-
+mittee also prepares the Supervisory Board's decision on the
+approval of the Financial Statements of E.ON SE and the Consol-
+idated Financial Statements. It is responsible for the preliminary
+review of the Financial Statements of E.ON SE, the Management
+Report, the Consolidated Financial Statements, the Combined
+Group Management Report and the proposal for profit appro-
+priation of profits as well as--if these are not already part of the
+•
+•
+•
+With regard to treasury shares that will be, or have been, acquired
+based on the aforementioned authorization and/or prior autho-
+rizations by the Shareholders Meeting, the Management Board
+is authorized, subject to the Supervisory Board's consent and
+excluding shareholder subscription rights, to use these shares-
+in addition to a disposal through a stock exchange or an offer
+granting a subscription right to all shareholders-as follows:
+account.
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, in pursuit of one or more objec-
+tives by the Company and also by its affiliated companies or by
+third parties for the Company's account or one of its affiliate's
+•
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is per-
+missible. If more than one person is appointed as a member of
+the Management Board, the Supervisory Board may appoint
+one of the members as Chairperson of the Management Board.
+If there is a vacancy on the Management Board for a required
+member, the court makes the necessary appointment upon
+petition by a concerned party in the event of an urgent matter.
+The Supervisory Board may revoke the appointment of a mem-
+ber of the Management Board and of the Chairperson of the
+Management Board for serious cause (for further details, see
+Sections 84 and 85 of the AktG).
+6/6
+CEO Letter
+Tests Performed by Internal Audit
+The management of E.ON units relies on the assessment per-
+formed by the process owners and on the testing of the internal
+control system performed by Internal Audit. These tests are a
+key part of the process. Using a risk-oriented audit plan, Inter-
+nal Audit tests the E.ON Group's internal control system and
+identifies potential deficiencies (issues). On the basis of its own
+evaluation and the results of tests performed by Internal Audit,
+an E.ON unit's management carries out the final Sign-Off.
+Sign-Off Process
+The final step of the internal evaluation process is the submission
+of a formal written declaration called a Sign-Off confirming the
+effectiveness of the internal control system. The Sign-Off process
+is conducted at all levels of the Group before E.ON SE, as the
+final step, conducts it for the Group as a whole. The Chairman of
+the E.ON SE Management Board and the Chief Financial Officer
+make the final Sign-Off for the E.ON Group.
+Internal Audit regularly informs the E.ON SE Supervisory Board's
+Audit and Risk Committee about the internal control system
+for financial reporting and any significant issue areas it identifies
+in the E.ON Group's various processes.
+General IT Controls
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment
+of the design and the operational effectiveness of the processes
+as well as the controls embedded in these processes.
+A functionally managed digital organization and third-party
+service providers provide digital and IT services for the E.ON
+Group. IT systems used for accounting are subject to provisions
+of the internal control system, which encompasses the general
+IT controls. These include access controls, the separation of
+functions, processing controls, measures to prevent the inten-
+tional and unintentional falsification of the programs, data,
+and documents as well as controls related to contractor manage-
+ment. The documentation of the general IT controls is stored
+in our documentation system.
+70
+70
+Disclosures Pursuant to Section 289a,
+Paragraph 1, and Section 315a, Paragraph 1,
+of the German Commercial Code and Explana-
+tory Report
+Composition of Share Capital
+The share capital totals €2,201,099,000.00 and consists of
+2,201,099,000 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a Share-
+holders Meeting.
+Restrictions on Voting Rights or the Transfer of Shares
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the
+next calendar year plus one. As a rule, an employee may not sell
+such shares until the blackout period has expired. The employee
+stock purchase program was not offered in 2018.
+Disclosures Regarding Takeovers
+Current CVs of Supervisory Board members are published on
+the Company's Internet page.
+Assessment
+Central Documentation System
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+69
+The E.ON units to which the internal control system applies use
+a central documentation system to document key controls. The
+system defines the scope, detailed documentation requirements,
+the assessment requirements for process owners, and the final
+Sign-Off process.
+69
+ments.
+COSO Framework
+Our internal control system is based on the globally recognized
+COSO framework, in the version published in May 2013 (COSO:
+The Committee of Sponsoring Organizations of the Treadway
+Commission). The Central Risk Catalog (ICS Model), which
+encompasses company- and industry-specific aspects, defines
+possible risks for accounting (financial reporting) in the functional
+areas of our units and thus serves as a check list and provides
+guidance for the establishment, documentation, and implemen-
+tation of internal controls.
+The Catalog of ICS Principles, which is another key component
+of our internal control system, defines the minimum require-
+ments for the system to function. These principles encompass
+overarching principles for matters such as authorization, the
+separation of functions, and master data management as well
+as specific requirements for managing risks in a range of issue
+areas and processes, such as contractor management, project
+management, audit, and transactions.
+Scope
+Each year we conduct a process using qualitative criteria and
+quantitative materiality metrics to define which E.ON units
+must document and evaluate their financial-reporting-related
+processes and controls in a central documentation system.
+and a description of the final Sign-Off process. We believe that
+compliance with these rules provides sufficient certainty to pre-
+vent error or fraud from resulting in material misrepresentations
+in the Financial Statements, the Combined Group Management
+Report, the Half-Year Financial Report, and the Quarterly State-
+Legal Provisions and Rules of the Company's Articles of Associ-
+ation Regarding the Appointment and Dismissal of Management
+Board Members and Amendments to the Articles of Association
+Pursuant to the Company's Articles of Association, the Manage-
+ment Board consists of at least two members. The Supervisory
+Board decides on the number of members as well as on their
+appointment and dismissal.
+•
+Current Composition
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+company affiliated with the latter, where such relationship
+may give rise to a material and not merely temporary conflict
+of interests. If the total number of Supervisory Board members
+is 12, a reasonable number of independent members will be 8;
+if the total number of Supervisory Board members is 14, a rea-
+sonable number of independent members will be 10. In this
+context, employee representatives will always be regarded as
+independent members.
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+c) The members bring a wide range of specific knowledge to
+committee work and have special expertise in one or more busi-
+nesses and markets relevant to the Company.
+77
+•
+b) In its current composition the Supervisory Board meets the
+objectives of its diversity concept. The Supervisory Board's
+composition of women and men complies with the legal require-
+ments for minimum percentages; separate compliance with
+the statutory gender quota occurred from the 2018 Annual
+Shareholders Meeting. The age range of the Supervisory Board
+is currently 43 to 72 years, with an average age of 57. At least
+four members have international experience.
+a) The Supervisory Board believes that all of its members are
+independent. No former Management Board member sits on
+the Supervisory Board. Furthermore, no member has a seat on
+the boards of, or acts as a consultant for, any of the Company's
+major competitors or has been on the Supervisory Board for
+more than three full terms of office (15 years). The Supervisory
+Board believes that in the case of no Supervisory Board member
+is there specific indications of relevant situations or relationships
+that could give rise to a conflict of interests. Only one manage-
+ment board member of a listed company, Klaus Fröhlich, a mem-
+ber of the Board of Management of Bayerische Motoren Werke
+Aktiengesellschaft, sits on the Supervisory Board.
+Supervisory Board membership shall usually be limited to no
+more than three full terms of office (15 years).
+At least two members shall be familiar with legal and compli-
+ance, HR, IT and sustainability."
+At least two independent representatives of the shareholders
+shall have expertise in the fields of accounting, risk manage-
+ment and auditing of financial statements.
+At least four members shall have specific expertise in the
+businesses and markets that are particularly relevant for
+E.ON. This includes in particular the energy sector, the sales
+and retail business, regulated industries, new technology as
+well as relevant customer sectors.
+•
+•
+In the search for qualified Supervisory Board members, due
+consideration shall be given to diversity. When preparing nom-
+inations for the election of Supervisory Board members, due
+consideration shall be given in each case to the question as to
+whether complementary academic profiles, professional and
+life experience, a balanced age mix, various personalities and
+a reasonable gender balance benefit the Supervisory Board's
+work. In this context, care shall be taken to ensure that a gen-
+der quota of 30 percent will be achieved; this shall apply to the
+Supervisory Board as a whole and to the shareholders' and
+employees' representatives separately.
+• An upper age limit of 75 years shall apply to members of the
+Supervisory Board; candidates shall not be older than 72 years
+when they are elected.
+•
+Four Supervisory Board members shall have international
+experience, i.e. they shall have spent, for instance, many years
+of their professional career outside Germany.
+c) In addition, the following skills profile shall apply; especially
+the Nominations Committee will strive to apply the skills profile
+when preparing nominations of candidates for the shareholders'
+representatives to be proposed to the Annual General Meeting.
+Members of the Supervisory Board must not have seats on the
+boards of, or act as consultants for, any of the Company's
+major competitors.
+⋅
+The shareholders' representatives should have leadership
+experience in companies or other large organizations by the
+majority. At least four members shall have experience, as
+management or supervisory board members, in the strategic
+management or supervision of listed organizations and shall
+be familiar with the functioning of capital and financial markets.
+At least two members shall be familiar, in particular, with
+innovation, disruption and digitization and the associated new
+business models and cultural change.
+•
+•
+•
+•
+b) In addition, the Supervisory Board has adopted the following
+diversity concept so as to ensure a balanced structure of the
+Supervisory Board in terms of age, gender, personality, educatio-
+nal background and professional experience.
+The Supervisory Board shall not include more than two former
+members of the Board of Management.
+The Supervisory Board shall include a reasonable number of
+independent members. Members shall be deemed to be inde-
+pendent if they have no personal or business relationship with
+the Company, its corporate bodies, a major shareholder or any
+Broutta, Clive
+6/6
+4/4
+Gila, Tibor
+3/3
+Luha, Eugen-Gheorghe
+6/6
+4/4
+Pinczésné Márton, Szilvia
+3/35
+Schulz, Fred
+5/55
+3/3
+4/4
+Šmátralová, Silvia
+3/3
+Wallbaum, Elisabeth
+•
+a) In this context, the following general objectives shall be observed:
+comply with the specific SE requirements and Germany's Stock
+Corporation Act, and with the recommendations of the German
+Corporate Governance Code.
+"The composition of the Supervisory Board of E.ON SE shall
+In view of Item 5.4.1 of the German Corporate Governance Code
+and Section 289f, Paragraph 2, Item 6, of the German Commer-
+cial Code, in December 2017 the Supervisory Board defined
+targets for its composition, including a diversity concept and a
+competency profile, that go beyond the applicable legal require-
+ments. They are as follows:
+"Member since May 29, 2018.
+5Once as a guest.
+•
+3Member since May 9, 2018.
+¹Member since January 1, 2018.
+Zettl, Albert
+4/4
+4/41
+6/6
+6/6
+2Member until May 9, 2018.
+• All Supervisory Board members must have sufficient time
+available to perform their duties on the boards of various com-
+panies. Persons who are members of the board of manage-
+ment of a listed company shall only be eligible as members of
+E.ON's Supervisory Board if they do not have seats on a total
+of more than two supervisory boards of listed non-Group com-
+panies or of comparable supervisory bodies.
+Corporate Governance Report
+Until the required investment is reached, obligation to invest net payouts from long-term compensation in E.ON stock
+Maximum of two years' total compensation or the total compensation for the remainder of the service agreement
+Settlement equal to two or three target salaries (base salary, target bonus, and fringe benefits), reduced by up to
+20 percent
+For six months after termination of service agreement, prorated compensation equal to fixed compensation and
+target bonus, at a minimum 60 percent of most recently received compensation
+The Supervisory Board's right pursuant to Section 87, Paragraph 2 of the German Stock Corporation Act to reduce
+compensation if the Company's situation deteriorates
+¹Only applies to Dr. Johannes Teyssen.
+84
+Components and Compensation Structure
+The compensation of Management Board members consists
+of a fixed base salary, an annual bonus, and long-term variable
+compensation. The components account for the following per-
+centages of total compensation:¹
+30%
+Base salary
+31%
+- 150 percent (other Management Board members)
+- 200 percent (Management Board Chairperson)
+Bonus
+Non-compete clause
+Bonus
+(annual)
+Settlement for change-of-control
+Settlement cap
+Obligation to buy and hold E.ON stock until the end of service on the Management Board
+Investment in E.ON stock equaling a percentage of base compensation:
+•
+•
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+Share Ownership Guidelines
+Other compensation provisions
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+•
+Virtual contributions equaling a maximum of 21 percent of fixed compensation and target bonus
+Clawback rule
+¹Not including fringe, other, and pension benefits.
+No revisions were made to non-performance-based compensa-
+tion relative to the previous financial year.
+E.ON Performance
+Plan (multi-year)
+Target attainment
+200%
+150%
+100%
+50%
+0%
+-37.5% budget +37.5% EPS
+Х
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+• Actual EPS vs. budget:
+85
+Individual Performance Factor
+50-150%
+Evaluation of a Management Board
+member's performance based on:
+• Overall performance of
+Management Board
+• Individual performance
+(bonus/malus adjustment)
+Cap at 200% of
+target bonus
+100%
+Payout in Cash
+The Company's performance is assessed on the basis of earnings
+per share ("EPS"), E.ON's key performance indicator. EPS used
+for this purpose will be derived from adjusted net income as dis-
+closed in this report. The EPS target for each year is set by the
+Supervisory Board, taking into account the approved budget.
+Because the budget is derived from the Company's corporate
+strategy, no specific target figures are disclosed for competitive
+reasons. The target is fully achieved if actual EPS is equal to
+the target. If actual EPS is 37.5 percentage points or more below
+the target, this constitutes zero percent attainment. If actual
+EPS is 37.5 percentage points or more above the target, this
+constitutes 200 percent attainment. Linear interpolation is used
+to translate intermediate EPS figures into percentages.
+The Supervisory Board determines the degree to which Man-
+agement Board members have attained the targets of their indi-
+vidual performance factors, giving adequate consideration to
+their individual and collective contributions. The factors range
+between 50 and 150 percent. The amount of the bonus can
+therefore be adjusted up or down depending on performance
+(in the sense of a "bonus/malus adjustment").
+The targets for individual performance factors are set at the
+beginning of each financial year and are exclusively strategic in
+nature. Here too, therefore, no specific target figures are dis-
+closed for competitive reasons. The Supervisory Board may also
+factor in, for example, quantitative and qualitative customer
+targets as well as performance indicators for the Company's
+core businesses or matters such as health, safety, and environ-
+ment and personnel management.
+In addition, the Supervisory Board may, as part of the annual
+bonus, grant Management Board members special compensation
+for outstanding achievements. In assigning Management Board
+members their individual performance factors and in granting
+special compensation, the Supervisory Board pays attention to
+the criteria of Section 87 of the German Stock Corporation Act
+and of the German Corporate Governance Code.
+As before, the maximum bonus that can be attained (including any
+special compensation) is 200 percent of the target bonus (cap).
+Corporate Governance Report
+86
+59
+Company Performance
+0-200%
+Bonus
+(target
+bonus)
+The Supervisory Board has no additional discretionary power
+in the assessment of the Company's performance.
+The following graphic provides an overview of the compensation
+plan for Management Board members:
+Variable compensation
+(-70%)
+55%
+E.ON Performance Plan
+(LTI)-stock-based
+Depends on:
+TSR performance
+relative to
+peer companies
+Bonus (STI)
+Depends on:
+Actual EPS
+45%
+versus budget
+individual
+performance
+Granting
+of virtual
+shares (with
+performance
+requirement)
+Paid out after
+the conclusion
+of the financial
+year
+Non-Performance-Based Compensation
+•
+Management Board members receive their fixed compensation
+in twelve monthly payments.
+Management Board members receive a number of contractual
+fringe benefits, including the use of a chauffeur-driven company
+car. The Company also provides them with the necessary tele-
+communications equipment, covers costs that include those for
+a periodic medical examination, and pays the premium for an
+accident insurance policy.
+Performance-Based Compensation
+No revisions were made to performance-based compensation
+relative to the previous financial year.
+55 percent of performance-based compensation depends on
+the achievement of long-term targets, ensuring that the variable
+compensation is sustainable under the criteria of Section 87 of
+the German Stock Corporation Act.
+Annual Bonus
+Management Board members' annual bonus (45 percent of the
+performance-based compensation) consists of a cash payment
+made after the end of the financial year.
+The amount of the annual bonus is determined by the degree
+to which certain performance targets are attained. The target-
+setting mechanism consists of company performance targets
+and individual performance targets.
+Non-performance-
+based compensation
+(-30%)
+Base salary
+Share Ownership Guidelines
+39%
+Contribution-based benefits
+•
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from the age of 60
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+81
+Diversity Concept for the Management Board
+At its meeting in December 2017 the E.ON SE Supervisory
+Board adopted a resolution on the following succession plan-
+ning/diversity concept for the Management Board:
+In cooperation with the Executive Committee and the Manage-
+ment Board, the Supervisory Board is in charge of long-term
+succession planning for the Management Board. With regard to
+the Management Board's composition, the Supervisory Board
+of E.ON SE has developed a diversity concept that is in line with
+the relevant recommendations of the German Corporate Gover-
+nance Code.
+Appointment Objectives
+• When appointing members of the Management Board, the
+candidates' outstanding professional qualifications, long-
+term leadership experience and past performance, as well as
+value-driven management shall be of paramount importance.
+Members shall be capable of taking forward-looking strate-
+gic decisions. In particular, they shall be capable of managing
+businesses sustainably and of ensuring that they are consis-
+tently focused on customer needs.
+⋅
+•
+The Management Board as a whole must have expertise and
+experience in the energy sector as well as in the fields of
+finance and digitization.
+The members of the Management Board shall be leaders and
+as such shall act as role models for the employees through
+their own performance and conduct.
+•
+.
+Attention shall be paid to diversity when appointing mem-
+bers of the Management Board. For the Supervisory Board,
+diversity means, in particular, different complementary
+academic profiles, professional and personal experience,
+personalities, as well as internationality and a reasonable age
+and gender structure. The Supervisory Board has therefore
+adopted a target quota of 20 percent for the share of women
+on the Management Board; this target shall be achieved by
+December 31, 2021.
+The appointment period of a member of the Management
+Board shall generally end at the end of the month on which
+the Management Board member reaches the general retire-
+ment age but at the close of the subsequent Annual Share-
+holders Meeting at the latest.
+Achievement of Objectives
+With the exception of the target quota regarding the share of
+women, which is to be achieved by December 31, 2021, the
+current composition of the Management Board already meets
+the appointment objectives described above.
+Corporate Governance Report
+82
+82
+Compensation Report Pursuant to Section 289a,
+Paragraph 2, and Section 315a, Paragraph 2 of
+the German Commercial Code
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Management
+Board and Supervisory Board and provides information about
+the compensation granted and paid in 2018. It applies the pro-
+visions of accounting standards for capital-market-oriented
+companies (the German Commercial Code, German Accounting
+Standards, and International Financial Reporting Standards) and
+the recommendations of the German Corporate Governance
+Code dated February 7, 2017.
+Basic Features of the Management Board Compensation Plan
+The Management Board compensation plan that took effect on
+January 1, 2017, is supposed to create an incentive for success-
+ful and sustainable corporate governance and to link the com-
+pensation of Management Board members with the Company's
+short-term and long-term performance while also factoring in
+their individual performance. The plan's parameters are there-
+fore transparent, performance-based, and aligned with the
+Company's business success; variable compensation is based
+predominantly on multi-year metrics. In order to align manage-
+ment's and shareholders' interests and objectives, long-term
+variable compensation is based not only on the development of
+E.ON's stock price in absolute terms but also on a comparison
+with competitors. Share ownership guidelines further strengthen
+E.ON's capital-market orientation and shareholder culture.
+The Supervisory Board approves the Executive Committee's
+proposal for the Management Board's compensation plan. It
+reviews the plan and the appropriateness of the Management
+Board's total compensation as well as the individual components
+on a regular basis and, if necessary, makes adjustments. It con-
+siders the provisions of the German Stock Corporation Act and
+follows the German Corporate Governance Code's recommen-
+dations and suggestions. In its review of the compensation plan's
+market conformity and the appropriateness of compensation
+levels, the Supervisory Board was supported by an external com-
+pensation expert.
+Report of the Supervisory Board
+The compensation plan that took effect on January 1, 2017,
+was presented to the 2016 Annual Shareholders Meeting and
+approved by a majority of 91.14 percent.
+CEO Letter
+In May 2017 the Management Board set targets of 30 percent
+for the proportion of women in the first level of management
+below the Management Board and a target of 35 percent for the
+second level of management below the Management Board.
+The deadline for achieving both targets is June 30, 2022. At year-
+end 2018, the proportion of women in first and second levels
+of management below the Management Board was roughly
+24 percent and roughly 18 percent, respectively.
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+79
+(Combined Group) Management Report—the separate Non-
+Financial Report and the separate Combined Non-Financial
+Report. It discusses the half-yearly reports and quarterly state-
+ments or financial reports with the Management Board prior
+to their publication. The effectiveness of the internal control
+mechanisms for the accounting process used at E.ON SE and
+the Group's units is tested on a regular basis by our Internal
+Audit division; the Audit and Risk Committee regularly monitors
+the work done by the Internal Audit division and the definition
+of audit priorities. The Audit and Risk Committee may commis-
+sion an external review of the contents of the Non-Financial
+Statement or the separate Non-Financial Report or the Com-
+bined Non-Financial Statement or the separate Combined
+Non-Financial Report. In addition, the Audit and Risk Committee
+prepares the proposal on the selection of the Company's inde-
+pendent auditor for the Annual Shareholders Meeting. In order
+to ensure the auditor's independence, the Audit and Risk Com-
+mittee secures a statement from the proposed auditor detailing
+any facts that could lead to the audit firm being excluded for
+independence reasons or otherwise conflicted.
+In being assigned the audit task, the independent auditor agrees
+to:
+⋅
+promptly inform the Chairperson of the Audit and Risk Com-
+mittee should any such facts arise during the course of the
+audit unless such facts are resolved in a satisfactory manner
+• promptly inform the Supervisory Board of anything it
+becomes aware of during the course of the audit that is of
+relevance to the Supervisory Board's duties
+⋅
+inform the Chairperson of the Audit and Risk Committee,
+or to note in the audit report, if the audit has led to findings
+that contradict the Declaration of Compliance with the
+German Corporate Governance Code by the Management
+Board or Supervisory Board.
+The Investment and Innovation Committee consists of six
+members. It advises the Management Board on all issues of
+Group financing and investment planning as well as issues
+relating to market developments and innovation. It decides on
+behalf of the Supervisory Board on the approval of the acqui-
+sition and disposition of companies, equity interests, and parts
+of companies whose value exceeds €300 million but does not
+exceed €600 million. In addition, it decides on behalf of the
+Supervisory Board on the approval of financing measures whose
+value exceeds €1 billion but not €2.5 billion if such measures
+are not covered by the Supervisory Board's resolutions regarding
+finance plans. If the value of any such transactions or measures
+exceeds the aforementioned thresholds, the committee prepares
+the Supervisory Board's decision.
+The Nomination Committee consists of three sharehold-
+er-representative members. Its Chairperson is the Chairperson
+of the Supervisory Board. Its task is to recommend to the Super-
+visory Board, taking into consideration the Supervisory Board's
+targets for its composition, suitable candidates for election to
+the Supervisory Board by the Annual Shareholders Meeting.
+All committees meet at regular intervals and when specific cir-
+cumstances require it under their policies and procedures. The
+Report of the Supervisory Board (on pages 8 to 9) contains infor-
+mation about the activities of the Supervisory Board and its
+committees in the year under review. Pages 242 and 243 show
+the composition of the Supervisory Board and its committees.
+Corporate Governance Report
+80
+80
+Shareholders and Annual Shareholders Meeting
+E.ON SE shareholders exercise their rights and vote their shares
+at the Annual Shareholders Meeting. The convening of the
+Annual Shareholders Meeting and the reports and documents
+required by law for the Annual Shareholders Meeting, including
+the Annual Report, are published on the Company's Internet
+page together with the agenda and the explanation of the con-
+ditions of participation, shareholders' rights, and any counter-
+motions and election proposals submitted by shareholders. The
+Company's financial calendar, which is published in the Annual
+Report, in the quarterly statements or financial reports, and on
+the Internet at www.eon.com, regularly informs shareholders
+about important Company dates.
+At the Annual Shareholders Meeting, shareholders may vote
+their shares themselves, through a proxy of their choice, or
+through a Company proxy who is required to follow the share-
+holder's voting instructions.
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+At the Annual Shareholders Meeting on May 9, 2018, Price-
+waterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
+was selected to be E.ON SE's independent auditor for the 2018
+financial year and to audit the Condensed Consolidated Interim
+Financial Statements and Interim Group Management Report
+for the 2018 financial year and the first quarter of 2019. The
+independent auditors with signing authority for the Annual
+Financial Statements of E.ON SE and the Consolidated Financial
+Statements are Markus Dittmann (since the 2014 financial year)
+and Aissata Touré (since the 2015 financial year).
+Women and Men in Leadership Positions Pursuant to Section 76,
+Paragraph 4, and Section 111, Paragraph 5, of the German
+Stock Corporation Act
+In the reporting period, the Management Board consisted ini-
+tially of four and subsequently of five men. In December 2016
+the Supervisory Board set a new target of 20 percent for the
+proportion of women on the Management Board and a deadline
+of December 31, 2021, for implementation.
+For all other E.ON Group companies concerned, targets and dead-
+lines pursuant to the Law for the Equal Participation of Women
+and Men in Leadership Positions in the Private Sector and the
+Public Sector were set for the proportion of women on these com-
+panies' supervisory board and management board or team of
+managing directors as well as in the next two levels of manage-
+ment. The deadline for achieving these targets is June 30, 2022.
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement
+The following table provides a summary overview of the individ-
+ual components of the Management Board's compensation as
+well as their respective metrics and parameters:
+Compensation component
+- Individual performance factor: collective performance and individual performance
+(up/down or "bonus/malus adjustment")
+Annual bonus corresponds to 45 percent of performance-based compensation
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the annual bonus
+as long as the total bonus remains under the cap
+•
+Granting of virtual shares of E.ON stock with a four-year vesting period
+- Target value for Management Board Chairman: €1,260,000 (excluding LTI components from annual bonuses)
+- Target value for Management Board members: €600,000-€733,333 (excluding LTI components from annual
+bonuses)
+•
+Cap: 200 percent of the target value
+•
+•
+•
+•
+Long-Term Variable Compensation
+Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1) + performance
+matching (1:0 to 1:2) depending on ROCE during vesting period
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+Granting of virtual shares of E.ON stock with a four-year vesting period
+- Target value for Management Board Chairman: €1,732,500
+- Target value for Management Board members: €825,000-€1,008,333
+Final number of virtual shares depends on E.ON stock's TSR relative to the TSR of companies in the STOXX®
+Europe 600 Utilities index; 14 of TSR performance is locked in annually
+Allocation limit; that is, the maximum number of virtual shares: 150 percent
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+Cap: 200 percent of the target value
+Annual target allocation corresponds to 55 percent of performance-based compensation
+Pension benefits
+Final-salary-based benefits¹
+•
+- Company performance: actual earnings per share ("EPS") versus budget
+Summary Overview of Compensation Components
+Amount of bonus depends on:
+83
+Non-performance-based
+compensation
+Base salary
+Fringe benefits
+Performance-based compensation
+Annual bonus
+Metric/Parameter
+.
+Possibility of special
+compensation
+Long-term variable compensation:
+E.ON Share Matching Plan (granted
+until 2016)
+Long-term variable compensation:
+•
+E.ON Performance Plan
+(granted from 2017)
+CEO Letter
+Report of the Supervisory Board
+E.ON Stock
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Management Board Chairman: €1,240,000
+Management Board members: €700,000-€800,000
+Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination
+Target bonus at 100 percent target attainment:
+- Target bonus for Management Board Chairman: €1,417,500
+- Target bonus for Management Board members: €675,00-€825,000
+•
+Cap: 200 percent of target bonus
+•
+Long-term variable compensation currently consists of tranches
+from several financial years granted under two different plans.
+First, tranches of the E.ON Performance Plan-Performance Plan,
+first tranche (2017-2020) and second tranche (2018-2021)-
+were granted in 2017 and 2018. Second, there are still tranches
+of the E.ON Share Matching Plan outstanding. The last tranche
+of the E.ON Share Matching Plan-Share Matching Plan, fourth
+tranche (2016-2020) and the LTI components of the bonus
+from 2016 Share Matching Plan, fifth tranche (2017-2021)-
+was granted in 2016.
+75th percentile
+The Supervisory Board grants virtual shares to each member
+of the Management Board in the amount of the contractually
+agreed-on target. The conversion into virtual shares is based on
+the fair market value on the date when the shares are granted.
+The fair market value is determined by applying methods accepted
+in financial mathematics, taking into account the expected future
+payout, and hence, the volatility and risk associated with the
+E.ON Performance Plan. The number of granted virtual shares
+The last complete tranche of the E.ON Share Matching Plan
+(LTI components of prior-year bonus as well as base and perfor-
+mance matching) was granted in the 2016 financial year and
+runs through 2020 (Share Matching Plan, fourth tranche
+[2016-2020]). Because the old compensation plan was in effect
+until year-end 2016, in 2017 Management Board members
+were granted virtual shares based on the LTI components of
+their bonuses for the 2016 financial year under the terms of
+the E.ON Share Matching Plan. This tranche runs through 2021
+(Share Matching Plan, fifth tranche [2017-2021]).
+88
+Corporate Governance Report
+At the end of the vesting period, the virtual shares held by Man-
+agement Board members are assigned a cash value based on
+E.ON's average stock price during the final 60 days of the vest-
+ing period. To each virtual share is then added the aggregate
+per-share dividend paid out during the vesting period. This
+total-cash value plus dividends-is then paid out. Payouts are
+capped at 200 percent of the arithmetical total target value.
+Extraordinary events are not factored into the determination
+of target attainment for company performance. Depending on
+the degree of target attainment for the company performance
+metric, each virtual share resulting from base matching may be
+matched by zero to two additional virtual shares at the end of
+the vesting period. If the predetermined company performance
+target is fully attained, Management Board members receive
+one additional virtual share for each virtual share resulting from
+base matching. Linear interpolation is used to translate inter-
+mediate figures.
+For the purpose of performance matching, the company perfor-
+mance metric for tranches granted from 2013 to 2015 was ini-
+tially E.ON's average ROACE during the four-year vesting period
+compared with a target rate of return set in advance by the
+Supervisory Board for the entire period at the time it allocated
+a new tranche. Pursuant to a Supervisory Board resolution,
+from the 2016 financial year onward these performance targets
+were based on ROCE. In view of the Uniper spinoff, this adjust-
+ment was necessary because the ROACE targets were based
+on old planning figures that did not foresee the Uniper spinoff.
+Furthermore, from the start of 2016, the Company no longer
+used ROACE as a key performance indicator and it was therefore
+no longer available. In addition, the anticipated reduction in
+E.ON's stock price resulting from the Uniper spinoff had to be
+factored in by means of a conversion method.
+The arithmetical total target value allocated at the start of the
+vesting period, which began on April 1 of the year in which a
+tranche was allocated, was therefore the sum of the value of the
+LTI component, base matching, and performance matching
+(depending on the degree of attainment of a predefined company
+performance target).
+Board members could, depending on the company's performance
+during the vesting period, receive performance matching of up
+to two additional non-vested virtual shares per share that resulted
+from base matching.
+Following the Supervisory Board's decision to allocate a new
+tranche, Management Board members initially received vested
+virtual shares equivalent to the amount of the LTI component
+of their bonus. The determination of the LTI component took into
+consideration the overall target attainment of the old compen-
+sation plan's bonus for the preceding financial year. The number
+of virtual shares was calculated on the basis of the amount of
+the LTI component and E.ON's average stock price during the
+first 60 days prior to the four-year vesting period. Furthermore,
+Management Board members could receive, on the basis of
+annual Supervisory Board decisions, a base matching of additional
+non-vested virtual shares in addition to the virtual shares that
+resulted from their LTI component. In addition, Management
+Vesting period: 4 years
+Dividends
+= €
+average in % × plus
+☑
+Stock Price
+ROCE
+4-year
+1/3: LTI
+component
+Overall Cap
+In line with the German Corporate Governance Code's recommen-
+dation, Management Board members' annual compensation
+has an overall cap. This means that the sum of the individual com-
+pensation components in one year may not exceed 200 percent
+of the total agreed-on target compensation, which consists of
+base salary, target bonus, and the target allocation value of long-
+term variable compensation. The cap increases in accordance
+with the amounts of fringe benefits and pension benefits from
+the respective financial year.
+Share Ownership Guidelines
+To strengthen E.ON's capital-market focus and shareholder-
+oriented culture, effective 2017 share ownership guidelines
+apply to Management Board members. The guidelines obligate
+Management Board members to invest in E.ON stock equaling
+200 percent of base compensation (for the Management Board
+Chairperson) and 150 percent of base compensation (for the
+other Management Board members), to demonstrate that they
+have done so, and to hold the stock until the end of their service
+on the Management Board.
+E.ON Performance Plan (Granted from 2017)
+Management Board members receive stock-based, long-term
+variable compensation under the E.ON Performance Plan, which
+replaced the E.ON Share Matching Plan as the Company's new
+long-term compensation plan effective January 1, 2017. Each
+tranche of the E.ON Performance Plan has a vesting period
+of four years to serve as a long-term incentive for sustainable
+business performance. Vesting periods start on January 1.
+compensation
+Other Management
+Board members:
+150% of base
+compensation
+Base
+200% of base
+compensation
+Chairperson:
+The Company makes virtual contributions to Management Board
+members' pension accounts in an amount equal to a percentage
+of their pensionable income (base salary and annual bonus).
+The contribution percentage is at most 21 percent. The annual
+contribution consists of a fixed base percentage (16 percent)
+and a matching contribution (5 percent). The requirement for the
+matching contribution to be granted is that the Management
+Board member contributes, at a minimum, the same amount by
+having it withheld from his compensation. The company-funded
+matching contribution is suspended if and as long as the E.ON
+Group's ROCE is less than its cost of capital for three years in a
+row. The contributions are capitalized using actuarial principles
+(based on a standard retirement age of 62) and placed in Man-
+agement Board members' pension accounts. The interest rate
+used for each year is based on the return of long-term German
+treasury notes. At the age of 62 at the earliest, a Management
+Board member (or his survivors) may choose to have the pension
+account balance paid out as a lifelong pension, in installments,
+or in a lump sum. Individual Management Board members' actual
+resulting pension entitlement cannot be calculated precisely in
+advance. It depends on a number of uncertain parameters, in
+particular the changes in their individual salary, their total years
+Matching
+Term in years
+4
+3
+2
+1
+Capital contributions
+Members appointed to the Management Board since 2010 are
+enrolled in the "Contribution Plan E.ON Management Board,"
+which is a contribution-based pension plan.
+Pension Entitlements
+Until the required investment is reached, Management Board
+members are obligated to invest amounts equivalent to the net
+payouts from their long-term compensation in actual E.ON
+stock. At December 31, 2018, the Management Board fulfilled
+the share ownership guidelines at a rate of 84.42 percent.
+5
+Base
+Pension account
+Performance
+25%
+50%
+75%
+100%
+125%
+150%
+Х
+175%
+200%
+of the STOXX® Europe 600 Utilities index (yearly lock-in)
+TSR of the E.ON share compared to the companies
+TSR Performance Relative to
+Peer Group
+Initial Number
+of Granted
+Share Units
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON SE's TSR performance
+in a given year determines the final number of one fourth of the
+virtual shares granted at the beginning of the vesting period.
+For this purpose, the TSRS of all companies are ranked, and
+E.ON SE's relative position is determined based on the percentile
+reached. Target attainment is 100 percent if E.ON SE's TSR is
+equal to the median of the peer group. The lower threshold is the
+25th percentile; a TSR performance below this threshold would
+reduce the number of virtual shares granted by one quarter. If
+E.ON's performance is at or above the 75th percentile (upper
+cap) the quarter of virtual shares granted for that particular year
+increases to a maximum of 150 percent. Linear interpolation is
+used to translate intermediate figures into percentage.
+TSR is the yield of E.ON stock. It takes into account the stock
+price, including the assumption that dividends are reinvested,
+and is adjusted to exclude changes in capital. The peer group
+used for relative TSR will be the companies in E.ON's peer index,
+the STOXX® Europe 600 Utilities.
+Matching
+may change in the course of the four-year vesting period
+depending on the total shareholder return ("TSR") of E.ON
+stock compared with the TSR of the companies in a peer group
+("relative TSR").
+0%
+25th percentile
+Lower
+Target achievement
+50th percentile
+(Median)
+Target value
+E.ON Share Matching Plan (Granted until 2016)
+Until the introduction of the new compensation plan on January 1,
+2017, Management Board members received stock-based com-
+pensation under the E.ON Share Matching Plan. At the beginning
+of each financial year, the Supervisory Board decided, based on
+the Executive Committee's recommendation, on the allocation of
+a new tranche, including the respective targets and the number
+of virtual shares granted to individual members of the Manage-
+ment Board. To serve as a long-term incentive for sustainable
+business performance, each tranche had a vesting period of four
+years. The tranche started on April 1 of each year.
+threshold
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the contractually agreed-on target.
+87
+Combined Non-Financial Report
+Consolidated Financial Statements
+Further Information
+Strategy and Objectives
+E.ON Stock
+Report of the Supervisory Board
+Combined Group Management Report
+Payout Amount
+Cap at 200%
+of target value
+Dividends
++
+Percentile
+achieved
+by E.ON
+Share Price
+Upper
+☑
+CEO Letter
+threshold
+54,324
++81
+ROCE (%)¹
+- Average age
+- Percentage of female employees
+8.4
+-2.04
+98,566
+10.4
+Employees (at year-end)¹
+Total assets
++8
+8,518
+13,085
+Equity
++138
+16,580
+39,430
+Economic net debt (at year-end)¹
+4,087
+4,407
+Cash provided by operating activities before interest and taxes¹
+78,948
++3
++54
+43,302
+1,199
+33
+2,853
+Strategy and Objectives
+'For the respective financial year; the 2019 figure represents management's dividend proposal.
+6Based on shares outstanding (weighted average).
+5Attributable to shareholders of E.ON SE.
+3E.ON and innogy's definitions of regulated, quasi-regulated businesses, and so forth were harmonized and the prior-year figures adjusted accordingly.
+4Change in percentage points.
+¹Includes until September 18, 2019, the discontinued operations in the Renewables segment (see Note 4 to the Consolidated Financial Statements).
+²Adjusted for non-operating effects.
++29
+932
+Dividend payout
++7
+0.43
++82
+0.46
+-3
+0.69
+0.67
+Adjusted net income per share 1, 5,6 (€)
+-54
+1.49
+0.68
+Earnings per share 5, 6 (€)
+42
+42
++1.04
+32
+Dividend per share? (€)
+2,965
+65
++56
+Adjusted EBIT1.2
+22
+22
+- Merchant business³ (%)
+-84
+21
+13
++84
+57
+Combined Group Management Report
+- Quasi-regulated and long-term contracted business³ (%)
+- Regulated business³ (%)
+3,235
++15
+5,558
++38
+30,084
+41,484
++/-%
+2018
+2019
+Adjusted EBITDA¹, 2
+€ in millions
+Sales¹
+E.ON Group Financial Highlights
+e.on
+2019
+4,840
+Cash provided by operating activities¹
+2,989
+-Regulated business³ (%)
+3,523
+5,492
+Investments¹
++2
+1,505
+1,536
+Adjusted net income¹, 2
+-51
+3,223
+1,566
+Net income/loss attributable to shareholders of E.ON SE
+-49
++8
+3,524
+Net income/loss
+-34
+22
+19
+- Merchant business³ (%)
+-94
+20
+11
+- Quasi-regulated and long-term contracted business³ (%)
++124
+58
+70
+1,808
+Corporate Profile
+In line with the 2019 Annual Shareholders Meeting's resolution to expand
+the Supervisory Board from 14 to 20 members, the court appointed
+Ulrich Grillo, Dr. Rolf Martin Schmitz, and Deborah Wilkens to the Super-
+visory Board as shareholder representatives effective October 1, 2019.
+Stefan May, Monika Krebber, and René Pöhls were elected to the Super-
+visory Board as employee representatives effective September 24, 2019.
+Furthermore, on the employee side Clive Broutta ended his service on
+the Supervisory Board at the conclusion of January 31, 2020, owing to
+the United Kingdom's departure from the European Union. Christoph
+Schmitz was elected to succeed him effective February 1, 2020. Pages
+240 to 241 of this report provide an overview of all members of the
+Supervisory Board as of December 31, 2019.
+Management System
+4
+Dear Shareholders,
+Dr. Karl-Ludwig Kley,
+Chairman of the Supervisory Board
+The year 2019 was characterized predominantly by the takeover of innogy SE. The
+closing of the transaction in September marked the beginning of a new chapter in
+E.ON's history. The Supervisory Board would like to thank the Management Board
+and all employees for the enormous efforts that were and are connected with the
+transaction as well as the integration.
+In the 2019 financial year the Supervisory Board carefully performed all its duties
+and obligations under law, the Company's Articles of Association, and its own rules
+and procedures. The Supervisory Board advised the Management Board intensively
+about the Company's management and continually monitored the Management
+Board's activities, assuring itself that the Company's management was legal, pur-
+poseful, and orderly. At four regular and two extraordinary meetings, it addressed
+all issues relevant to the Company. On a regular basis, the shareholder representatives
+and the employee representatives made separate preparations for these meetings
+with the participation of one or all members of the Management Board. Two
+Supervisory Board members were unable to attend individual Supervisory Board
+meetings in 2019. Apart from that, all members attended all meetings.
+The Management Board regularly provided the Supervisory Board with timely and
+comprehensive information about significant business transactions in both written
+and oral form. At the meetings of the full Supervisory Board and its committees, the
+Supervisory Board had sufficient opportunity to actively discuss the Management
+Board's reports, motions, and proposed resolutions. After thoroughly examining
+and discussing the resolutions proposed by the Management Board, the Supervisory
+Board voted on them when it was required by law, the Company's Articles of
+Association, or the Supervisory Board's rules and procedures.
+In addition, there was a regular exchange of information between the Chairman of
+the Supervisory Board and the members of the Management Board, in particular
+the Chairman, during the entire financial year. In the case of particularly pertinent
+issues, the Chairman of the Supervisory Board was kept informed at all times.
+He likewise maintained contact with the members of the Supervisory Board outside
+of board meetings.
+Takeover of innogy SE and Far-reaching Asset Swap with RWE
+The Supervisory Board dealt with the status of the innogy SE takeover at all of its
+meetings in 2019 and adopted any necessary resolutions. The Management Board
+kept the Supervisory Board continually informed about a variety of related matters,
+including the status of the voluntary public takeover offer, the merger-control
+procedure, and the progress of the integration preparations and measures. In this
+context, the Supervisory Board also discussed the European Commission's antitrust
+conditions for selected markets in which E.ON operates and, where necessary,
+adopted resolutions. In addition, the Supervisory Board examined the options for
+the legal integration of innogy SE and adopted corresponding resolutions. Likewise
+in the context of the innogy SE takeover, the Supervisory Board carried out its
+expansion to 20 members and made personnel decisions regarding the composition
+of the E.ON Management Board.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+5
+Other Key Topics of the Supervisory
+Board's Discussions
+Policy and regulatory developments in countries in
+which E.ON is active constituted another key topic of
+the Supervisory Board's discussions. Alongside the
+overall and economic policy situation in the individual
+countries, the Supervisory Board focused primarily on
+the developments in European and German energy
+policy and their respective consequences for E.ON's
+business areas.
+Furthermore, in the context of the Group's current
+operating business, the Supervisory Board addressed
+in detail the impact of low interest rates on E.ON, the
+general business situation of the Group and its compa-
+nies, national and international energy markets, as well
+as the currencies that are important to E.ON. It discussed
+E.ON SE's and the E.ON Group's asset, financial, and
+earnings situation, future dividend policy, workforce
+developments, and earnings opportunities and risks. In
+addition, the Supervisory Board and the Management
+Board thoroughly discussed the E.ON Group's medium-
+term plan for 2020-2022. The Supervisory Board was
+provided with information on a regular basis about the
+Company's health, (occupational) safety, and environ-
+mental performance (in particular, key accident indica-
+tors) as well as current customer numbers, customer
+satisfaction, and the number of apprentices. Further-
+more, the Supervisory Board dealt comprehensively with
+the Company's future energy-procurement strategy.
+In addition, the Supervisory Board discussed E.ON'S
+future funding needs and, where necessary, adopted
+resolutions. It also discussed E.ON's current and future
+rating situation with the Management Board on a reg-
+ular basis. Finally, it examined and approved the Group's
+non-financial reporting ("CSR").
+Corporate Governance
+In the declaration of compliance issued at the end of the year, the Super-
+visory Board and the Management Board declared that E.ON is in full
+compliance with the recommendations of the "Government Commission
+German Corporate Governance Code" dated February 7, 2017, published
+by the Federal Ministry of Justice and for Consumer Protection in the
+official section of the Federal Gazette (Bundesanzeiger), since the last
+annual declaration in December 2018, with two exceptions regarding the
+recommendations in Section 7.1.2, Sentence 3, and Section 4.2.3, Para-
+graph 2, Sentence 8. The current version of the declaration of compliance
+as well as earlier versions are published online at www.eon.com.
+In the 2019 financial year, two members of the Innovation and Sustain-
+ability Committee (formerly: Investment and Innovation Committee) had
+a conflict of interest in conjunction with a possible transaction owing
+to their position with another company. In accordance with Supervisory
+Board rules, the members made this known prior to the meeting on
+March 11, 2019, and did not take part in the committee's adoption of a
+resolution. In addition, in his capacity as Chairman of the RWE AG Manage-
+ment Board, Rolf Martin Schmitz had conflicts of interest in relation to
+certain operational matters and for this reason did not participate in the
+discussion of selected agenda items. Otherwise, the Supervisory Board
+is aware of no indications of conflicts of interest involving members of the
+Management Board or the Supervisory Board.
+In the 2019 financial year, three comprehensive education and training
+sessions on selected operating and non-operating issues of E.ON's busi-
+ness were conducted for Supervisory Board members. Furthermore, an
+on-boarding program gave new members of the Supervisory Board the
+opportunity to receive a comprehensive introduction to the Company's
+business operations.
+In 2019 the Supervisory Board conducted a regularly scheduled efficiency
+review of the Supervisory Board's work. An online questionnaire and
+one-on-one conversations with the Chairman of the Supervisory Board
+provided the Supervisory Board members with the opportunity to evaluate
+the efficiency of the Supervisory Board's work and to make suggestions
+for improving it. The findings were used to design specific measures to
+improve the Supervisory Board's work, which are being implemented on
+an ongoing basis. They relate primarily to the Supervisory Board devoting
+more attention to selected strategic and operational issues, technological
+and industry-specific trends, and the monitoring of E.ON's competitive
+environment. In addition, the Supervisory Board appointed some members
+to serve as theme sponsors for selected operational themes.
+Report of the Supervisory Board
+6
+Report of the Supervisory Board
+Report of the
+Supervisory Board
+Contents
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+238 Independent Practitioner's Report on Non-Financial Reporting
+231 Independent Auditor's Report
+230 Declaration of the Management
+230 Other Information
+List of Shareholdings
+210
+112 Notes
+110 Statement of Changes in Equity
+108 Consolidated Statements of Cash Flows
+106 Consolidated Balance Sheets
+105 Consolidated Statements of Recognized Income and Expenses
+104 Consolidated Statements of Income
+Furthermore, the Supervisory Board extended its competency profile to
+include the category of sustainability dimensions: environmental, social,
+and governance ("ESG"). The targets for the Supervisory Board's compo-
+sition, including a competency profile and a diversity concept, with regard
+to Item 5.4.1 of the German Corporate Governance Code and Section 289f,
+Paragraph 2, Item 6 of the German Commercial Code and the status of
+their achievement are available in the Corporate Governance Declaration
+on pages at 65 and 66.
+104 Consolidated Financial Statements
+Compensation Report
+Corporate Governance Declaration
+70
+62
+62 Corporate Governance Report
+Disclosures Regarding Takeovers
+Internal Control System for the Accounting Process
+Business Segments
+Forecast Report
+240 Members of the Supervisory Board
+242 Members of the Management Board
+243 Summary of Financial Highlights
+245 Financial Calendar
+88 Separate Combined Non-Financial Report
+Committee Work
+To fulfill its duties carefully and efficiently, the Supervisory Board has
+created the committees described in detail below.
+In the 2019 financial year the Executive Committee met eight times. All
+members took part in all of the committee's meetings. At its meetings,
+the committee discussed in detail the planned takeover of innogy and the
+related antitrust conditions and, in accordance with the authority granted
+by the Supervisory Board, adopted the necessary resolutions regarding
+the legal integration of innogy SE. In addition, it discussed significant
+personnel matters, especially those relating to Management Board com-
+pensation and Dr.-Ing. Birnbaum's appointment to the innogy SE Manage-
+ment Board; where necessary, it adopted resolutions. Furthermore, it
+prepared the Supervisory Board's resolutions regarding the composition
+of the E.ON SE Management Board and adopted a resolution based on the
+Management Board's proposal to change its members' respective areas
+of responsibility. Additionally, the Executive Committee was periodically
+informed about the progress toward the Management Board's targets
+for 2019. Finally, the Executive Committee thoroughly discussed the
+medium-term plan for the period 2020-2022.
+42
+40
+37
+36
+36
+34
+Asset Situation
+33
+29
+24
+23
+20
+Risk and Chances Report
+20
+18
+17
+14
+14
+14
+10
+Report of the Supervisory Board
+4
+Earnings Situation
+Business Performance
+Macroeconomic and Industry Environment
+Business Report
+Innovation
+Business Model
+50
+59
+The Innovation and Sustainability Committee (formerly: Investment and
+Innovation Committee) met five times and carried out one written reso-
+lution procedure in 2019. All members took part in all of the committee's
+meetings and procedures. The matters addressed by the committee
+included the investment in Big Raymond wind farm in the United States
+and the Management Board's planned refinancing of the syndicated credit
+facility. Furthermore, in particular E.ON's approach to innovation and
+inorganic growth options were topics of discussion. Finally, in conjunction
+with the ESG sustainability dimensions, the committee addressed in detail
+the Group's climate strategy and its activities related to sustainability.
+The Audit and Risk Committee met four times in 2019. All members
+took part in all meetings. The committee conducted a thorough review,
+in particular of the 2018 Financial Statements of E.ON SE (prepared in
+accordance with the German Commercial Code), the E.ON Group's 2018
+Consolidated Financial Statements (prepared in accordance with Interna-
+tional Financial Reporting Standards, or "IFRS"), and the 2019 intermediate
+financial reports of E.ON SE. The committee discussed the recommen-
+dation for selecting an independent auditor for the 2019 financial year as
+well as the intermediate financial reports and assigned the tasks for the
+independent auditor's auditing services, established the
+audit priorities, determined the independent auditor's
+compensation, and verified the auditor's qualifications
+and independence in line with the recommendations
+of the German Corporate Governance Code. The com-
+mittee also assured itself that the independent auditor
+has no conflicts of interest and did the preparatory work
+for the Supervisory Board's decision regarding the man-
+datory rotation of the independent auditor. In addition,
+the committee addressed other matters assigned to it
+by law, the Company's Articles of Association, or the
+Supervisory Board's rules and procedures, in particular
+Internal Audit's activities and reports, accounting issues,
+risk management, and developments in the area of
+compliance. Furthermore, the committee thoroughly
+discussed the Combined Group Management Report
+and the proposal for profit appropriation and prepared
+the relevant recommendations for the Supervisory
+Board and reported them to the Supervisory Board. On
+the basis of the quarterly risk reports, the committee
+noted that no risks were identified that might jeopardize
+the existence of the Company or individual segments.
+The Nomination Committee carried out one written
+resolution procedure in 2019 regarding the court
+appointment of the new shareholder representatives to
+the Supervisory Board. All members of the committee
+took part.
+Committee chairpersons reported the agenda and
+results of their respective committee's meetings to the
+full Supervisory Board on a regular basis. Information
+about the committees' composition and responsibilities
+is in the Corporate Governance Declaration on pages
+67 to 68. An overview of Supervisory Board members'
+attendance at meetings of the Supervisory Board and
+its committees can also be found there.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+7
+Examination and Approval of the Financial
+Statements, Approval of the Consolidated
+Financial Statements, Proposal for
+Profit Appropriation for the Year Ended
+December 31, 2019
+PricewaterhouseCoopers GmbH, Wirtschaftsprüfungs-
+gesellschaft, Düsseldorf, audited and submitted an
+unqualified opinion on the Consolidated Financial State-
+ments of E.ON SE prepared in accordance with IFRS
+and the Combined Group Management Report for the
+year ended December 31, 2019. The IFRS Consolidated
+Financial Statements exempt E.ON SE from the require-
+ment to publish Consolidated Financial Statements in
+accordance with German law.
+The Supervisory Board reviewed and, at its annual-results
+meeting on March 24, 2019, thoroughly discussed-in
+the presence of the independent auditor and with
+knowledge of, and reference to, the Independent Audi-
+tor's Report and the results of the preliminary review
+by the Audit and Risk Committee-E.ON SE's Financial
+Statements prepared in accordance with the German
+Commercial Code, Consolidated Financial Statements,
+and Combined Group Management Report as well as the
+Management Board's proposal for profit appropriation.
+The independent auditor was available for supplemen-
+tary questions and answers. After concluding its own
+examination, the Supervisory Board determined that
+there are no objections to the findings. It therefore
+acknowledged and approved the Independent Auditor's
+Report. In addition, the Supervisory reviewed and
+approved the Separate Combined Non-Financial Report.
+57
+The Supervisory Board approved the Financial State-
+ments of E.ON SE prepared by the Management Board
+and the Consolidated Financial Statements. The Finan-
+cial Statements are thus adopted. The Supervisory
+Board agrees with the Combined Group Management
+Report and, in particular, with its statements concerning
+the Company's future development.
+Personnel Changes on the Management Board
+There were no personnel changes on the E.ON SE Management Board in
+2019. Page 242 of this report shows E.ON SE Management Board
+members' respective areas of responsibility as of year-end 2019.
+Personnel Changes on the Supervisory Board
+Essen, March 24, 2020
+The Supervisory Board
+Best wishes,
+4.1. my
+Dr. Karl-Ludwig Kley
+Chairman
+- Employees
+- Analyzing Value Creation
+Other Financial and Non-Financial Performance Indicators
+E.ON SE's Earnings, Financial, and Asset Situation
+Financial Situation
+The Supervisory Board examined the Management
+Board's proposal for profit appropriation, which includes
+a cash dividend of €0.46 per ordinary share, also taking
+into consideration the Company's liquidity and its
+finance and investment plans. After examining and
+weighing all arguments, the Supervisory Board agrees
+with the Management Board's proposal for profit
+appropriation.
+Annual Report
+•
+7
+Total
+scheduled
+Scheduled
+Total³
+scheduled
+Scheduled
+Total
+scheduled
+Scheduled
+Minutes per year
+Un-
+Un-
+Un-
+E.ON 2018
+innogy 2019²
+E.ON 2019
+97
+Other Information
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Report of the Supervisory Board
+Strategy and Objectives
+SAIDI power¹
+E.ON records all planned and unplanned outages at its distribu-
+tion networks. It uses these data to calculate the system average
+interruption duration index ("SAIDI"), which measures the aver-
+age outage duration per customer per year. This figure is not
+relevant for management purposes but provides information on
+the reliability of E.ON's networks. Some countries where E.ON
+operates have strict legal thresholds for SAIDI. Not meeting
+these requirements may lead to fines or compensation payments.
+Some E.ON regional units therefore set their own SAIDI targets
+on an annual basis. At regular intervals, the unit managing
+directors inform the member of the E.ON Management Board
+responsible for network operations about their achievement of
+these targets. The SAIDI of all regional units are included in a
+quarterly performance report to the E.ON Management Board.
+E.ON has in place investment and maintenance plans to maintain
+and expand its grids to ensure that all of its network customers
+are connected and have a reliable energy supply. E.ON's DSOS
+are responsible for implementing these plans, which encompass
+one or more years. Their investment budgets are approved cen-
+trally. Final approval comes from the E.ON Management Board
+at the end of the annual medium-term planning and budgeting
+process. A portion of the investment budgets goes towards
+making E.ON's grids smarter by equipping them with sensors
+and command-and-control technology and by augmenting
+them with a digital layer. The increasing use of smart-grid tech-
+nologies makes it possible to avoid or delay costly investments
+in conventional networks by, for example, using this technology
+to maximize the distribution capacity of existing overhead lines.
+Investment decisions always focus on efficiency as well as
+security of supply. E.ON chooses the solutions that make the
+most technical and economic sense. This is because grid invest-
+ments affect the grid fees included in the electricity price paid
+by customers.
+instructions contained in the Incident and Crisis Management
+Policy. A member of the E.ON Management Board oversees the
+Energy Networks segment. Under his leadership, two depart-
+ments at E.ON's corporate headquarters actively manage Energy
+Networks' regional units. This includes strategic development,
+capital allocation, business controlling, and so forth.
+E.ON's DSOs are responsible for the safe and reliable operation
+of its distribution networks. Their network control centers over-
+see network operations. E.ON's DSOs are also responsible for
+resolving unforeseen outages in their network territory. In case
+of widespread outages, E.ON's crisis management system stip-
+ulates responsibilities and processes in accordance with the
+Part of E.ON's corporate strategy is to adapt its distribution grids
+to the emerging distributed energy world. They form a crucial
+link between electricity producers and consumers. E.ON's distri-
+bution grids must function properly and be equipped to meet
+the challenges of the new energy world for E.ON to continue to
+ensure a reliable electricity supply in the future. For this purpose,
+E.ON continually upgrades its existing infrastructure with smart-
+grid technology. This enables E.ON to better manage energy
+generation, distribution, and storage.
+One of E.ON's main tasks as an energy company and distribution
+grid operator is to ensure that its customers have a secure supply
+of electricity. A reliable electricity supply is essential for indus-
+trialized countries to be able to maintain their infrastructure and
+meet their inhabitants' needs. For example, industrial customers
+that operate a high-precision production facility require a con-
+stant network frequency. If the frequency fluctuates, machinery
+can break down, resulting in higher costs. A power outage can
+have serious consequences, and not just for industrial customers.
+Whether at companies, government agencies, or households,
+most processes are no longer possible without electricity. One of
+the challenges in energy supply is that, increasingly, electricity
+comes from distributed sources. As a result, electricity is fed into
+the networks at many different points. Moreover, renewables
+feed-in fluctuates because it depends on the weather and other
+factors beyond E.ON's control.
+Security of Supply
+Aspect 3: Social Matters
+Germany4
+10
+20
+29
+183
+n/a
+n/a
+n/a
+97
+79
+176
+Slovakia5
+¹Totals may deviate due to rounding.
+2Figures for all of 2019 and not included in E.ON's 2019 figures; see Purpose and Scope on page 88. The table does not include innogy's SAIDI in Poland (scheduled 9, unscheduled 42) for lack of
+materiality. innogy's network business in Poland is confined to the Warsaw region.
+3Unaudited figures.
+4Figures for Germany are for the respective previous year: 2019 for 2018, 2018 for 2017.
+5DSO in which E.ON has a 49-percent stake.
+In 2019 E.ON'S SAIDI was comparable to the 2018 figure in
+most countries. A noteworthy change was in Sweden, where,
+on average, customers were more affected by power outages
+than in the previous years owing to a hurricane and severe
+thunderstorms in the summer. A tangible positive change was
+in Romania, where the overall interruption duration was reduced
+by over 100 minutes per customer. This was likely attributable
+to ongoing investments in automation and improvements in
+maintenance crews' work methods. As in previous years, E.ON's
+grids in Germany were its most reliable.
+Customer Experience
+E.ON employees' health rate was 96.0 percent in 2019 (includ-
+ing innogy since October 1, 2019). It reflects the number of days
+actually worked in relation to agreed-on work time. The 2019
+figure was again high (E.ON 2018: 96.3 percent).
+E.ON's ability to acquire new customers and retain existing ones
+is crucial for its business success. Global trends like climate
+protection and digitization are not only altering the energy land-
+scape. They are also creating new customer needs. E.ON will only
+remain successful in the marketplace by adapting its products
+and services to meet these needs and by continually improving
+its performance.
+E.ON measures customer loyalty by means of Net Promoter
+Score (NPS), which was introduced in 2009 and rolled out as
+Group-wide program in 2013. NPS indicates customers' will-
+ingness to recommend E.ON to their family and friends. It also
+helps E.ON identify which issues are currently of particular
+importance to its customers and thus adapt its activities to cur-
+rent customer needs. There are three types of NPS. Strategic
+NPS or top-down NPS compares E.ON's performance to com-
+petitors' and is based on the feedback of customers regardless
+of whether they have had an interaction with E.ON. Bottom-up
+NPS is based on the feedback of customers who have had a
+specific interaction with E.ON, like talking to a call center agent.
+Journey NPS measures the loyalty of customers who have com-
+pleted a journey with E.ON, such as transferring their energy
+service to their new residence when they move. NPS is used by
+the units in all E.ON's markets. A methodology adopted in Sep-
+tember 2017 enables E.ON to measure strategic NPS consis-
+tently across all its markets. This, in turn, makes it possible for
+E.ON to identify and resolve cross-market customer issues and
+also targets areas where it could provide useful innovations for
+its customers. Furthermore, automated reporting eliminates
+the errors of manual data entry, thereby improving data quality
+and auditability. The internal NPS ("iNPS") program aims to
+sensitize employees who have no contact with customers to the
+importance of customer loyalty. iNPS was rolled out across the
+Group in 2014. It has been implemented in IT, human resources,
+supply chain management, finance, and other support functions.
+Earning customers' loyalty by continually improving their expe-
+rience is a major priority for innogy as well. Although innogy
+does not use NPS, it has a similar process in place. E.ON is
+working closely with innogy to adopt a single methodology.
+E.ON defines Group-wide targets for strategic NPS and journey
+NPS annually and uses both at the segment level for manage-
+ment purposes. Strategic NPS is highly significant for manage-
+ment purposes because of the information collected about
+competitors. The Management Board holds quarterly discussions
+with the units to evaluate their NPS and, if necessary, to decide
+what action they should take to achieve their NPS target. The
+variable compensation of senior managers has two components:
+a company factor and a factor reflecting a manager's individual
+Separate Combined Non-Financial Report
+98
+performance. In 2019 strategic NPS accounted for 20 percent of
+the company factor and journey NPS was included in the individ-
+ual performance factor of E.ON's senior managers' compensation.
+By contrast, the E.ON Management Board's compensation does
+not depend on NPS targets. Beyond the NPS program, each unit
+has a set of Game-Changing Initiatives in place to systematically
+improve its customer experience. They are sponsored by the
+respective unit's CEO and board, who are personally responsible
+for improving their unit's NPS. The initiatives, which are defined
+annually, may span multiple years depending on the level of trans-
+formation required. E.ON introduced these initiatives in 2017
+and initially called them CEO-led signature actions.
+The Chief Operating Office-Commercial ("COO-C") at corporate
+headquarters coordinates the Company's marketing strategy
+with the aim of bringing the E.ON brand to life. COO-C supports
+the energy sales and solutions businesses for all customer divi-
+sions, in all markets. E.ON's customer experience teams serve
+as ambassadors for customer loyalty in their respective unit.
+They take the lead on related projects and activities in their sales
+territory and share information about successful programs and
+service improvements on a monthly basis. E.ON has customer
+experience teams in Germany, the United Kingdom, Italy, Romania,
+Sweden, the Czech Republic, and Hungary.
+The Customer Immersion program enables senior managers and
+employees to interact directly with residential and business
+customers. Its purpose is to bring the customer's voice into the
+organization and enhance employees' customer orientation. In
+2019 E.ON put together an interactive video installation con-
+sisting of 24 screens playing the recorded statements and stories
+of real E.ON customers from a variety of countries.
+E.ON's average strategic NPS for residential customers increased
+at the beginning of 2019, was steady for most of the year, and
+reached its highest level at the end of the year. It was above the
+competitor average throughout the year. In five of seven countries
+where E.ON operates, the percentage of promoters (customers
+who speak positively about E.ON and recommend it to friends
+and family) rose. The percentage of detractors (customers who
+speak negatively about E.ON) declined in six countries.
+E.ON's average strategic NPS for small and medium-sized
+enterprises (SME) rose at the beginning of the year, continued to
+improve over the course of the year, and finished the year at its
+highest level. Like E.ON's average strategic NPS for residential
+customers, it was above the competitor average throughout the
+year. The percentage of promoters rose in five of seven countries
+and remained stable in two. The percentage of detractors
+decreased in six countries and was largely unchanged in one.
+Data Protection
+Greater digitization opens a wide range of opportunities for
+offering smart solutions and optimizing E.ON's business, tech-
+nical solutions, and processes. It also potentially poses a risk
+to the integrity, confidentiality, and availability of personal data.
+"Personal data" means any information relating to an identified
+or identifiable natural person. The EU General Data Protection
+Regulation ("GDPR") and the new German Federal Data Protec-
+tion Act came into force in 2018. The former harmonizes the
+rules for the processing of personal data by organizations in the
+EU and the wider European Economic Area; the latter establishes
+specific regulations for Germany. E.ON has an obligation to
+safeguard personal data in order to protect the persons whose
+data the Company processes. In addition, data breaches could
+damage E.ON's reputation and lead to fines.
+In 2019 E.ON started to update its business directives, policies,
+guidelines and processes to comply with the GDPR in light
+of the experience E.ON and innogy gained since it took effect.
+The existing Data Protection Management System ("DPMS")
+provides guidance on data protection issues and is intended to
+ensure that, to the extent possible, E.ON takes a structured,
+coordinated, and consistent approach to data protection across
+the Group. The DPMS has been audited by a law firm. In 2019
+internal audits of several E.ON units regarding the status of the
+data protection management took place. They too confirmed
+that the approach to data protection is effective. The existing
+data protection policy came into force in 2018. It defines roles
+and responsibilities in a uniform manner E.ON-wide. In 2019
+E.ON continued to take all steps necessary to comply with the
+GDPR with regard to its business partners, stakeholders, cus-
+tomers, and other relevant parties, including those affected by
+the innogy transaction. The minimum standard all units must
+meet is to implement, where necessary, an adapted version of
+the DPMS. E.ON has in place an appropriate set of | processes,
+E.ON puts customers at the center of everything it does. This
+pledge is a corporate value and is embedded in E.ON's customer
+experience principles, brand personality, and Grow@E.ON, its
+Group-wide competency framework. E.ON's objective is to con-
+tinually enhance customer loyalty and to become a customer-
+led business and the energy-solutions leader in its markets.
+Regrettably, two contractor employees and one innogy employee
+died in 2019. After a fatal accident, E.ON immediately initiates
+an investigation to understand the exact course of events that
+led to it. In addition, within 24 hours a report must be submitted
+to the Management Board of the unit where the accident occurred
+and to the member of the E.ON Management Board responsible
+for H&S. The aim is to identify the root causes and to take all
+necessary measures to prevent comparable accidents in future.
+96
+96
+Metrics and Targets
+E.ON's current climate metrics consist mainly of the emission
+figures for its carbon footprint categories (Scope 1, 2, and 3)
+and the measurement of progress toward its climate targets.
+In light of the innogy takeover and the intention to gradually
+adopt the TCFD's recommendations, E.ON will enhance its
+climate metrics and targets in 2020 as part of the revision of
+its sustainability.
+More detailed information on E.ON's TCFD reporting can be
+found in the "Climate protection" chapter of the 2019 Sustain-
+ability Report on E.ON's corporate website and in the context
+of E.ON's CDP climate reporting. CDP is one of the largest inter-
+national associations of investors that independently assess the
+transparency and detail of companies' climate reporting.
+Environmental Management
+Alongside climate protection, it is E.ON's objective to prevent
+environmental damage and to have as little environmental
+impact as possible. Even if E.ON does not operate large-scale
+conventional assets any longer, it still builds and operates distri-
+bution networks and also consumes energy and other resources
+at its facilities and offices. E.ON built and operated large-scale
+renewable assets until late September 2019. At this time sub-
+stantially all of this business was transferred to RWE. In order
+to retain stakeholders' trust and its license to operate, E.ON
+has to ensure that it complies with all international and national
+environmental laws and regulations. E.ON's environmental
+management is guided by the precautionary principle endorsed
+by the United Nations.
+E.ON addresses all environmental requirements in the frame-
+work of its HSE management (see above) and has also defined
+its own requirements, which are mandatory across E.ON. The
+Sustainability & HSE Function Policy requires all E.ON units
+(except for very small ones that are negligible from an environ-
+mental management standpoint) to have in place an environ-
+mental management system certified to ISO 14001 or EMAS,
+internationally recognized standards for such systems. As of
+year-end 2019, all units covered by this requirement had such
+a system in place. These certifications require E.ON to evaluate
+environmental aspects and impacts and strive for continual
+improvement as defined in a management handbook. In 2018,
+E.ON adopted a Policy Statement, which supersedes the pre-
+vious statement and is signed by the Management Board. It
+articulates E.ON's commitment to comply with all HSE laws and
+regulations and defines the appropriate management systems
+for this. It pledges E.ON to protect the environment and the earth's
+climate, reduce its energy consumption, conserve resources,
+operate responsibly, and strive for continual improvement in its
+environmental performance. Energy management-continually
+looking for ways to reduce its own energy consumption-plays
+an important role as part of environmental management and
+helps E.ON reduce its GHG emissions. At all sites at which ener-
+gy-efficiency management systems according to ISO 50001 are
+in place, E.ON measures and analyzes the energy consumed by
+its facilities and office buildings. The findings help E.ON identify
+opportunities to conserve energy and recommend cost-effective
+energy-efficiency measures. E.ON has already implemented
+several, such as installing smart LED lighting, and other smart
+building technology.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+93
+The E.ON Management Board is informed about serious (cate-
+gory 3) environmental incidents by means of monthly reports
+from HSE and periodic consultations with the Senior Vice Presi-
+dent for Sustainability & HSE. In the case of a major incident
+(category 4), the unit at which it occurred reports it directly to
+the Management Board within 24 hours.
+E.ON had one serious environmental incident in 2019. It occurred
+at E.ON Business Solutions in the United Kingdom. A cracked
+oil line in a combined-heat-power (CHP) plant led to engine oil
+leaking into a nearby pond and river. The leak was quickly isolated
+and repaired in the days that followed. Most of the leaked oil
+was removed in the next two days. A specialist firm conducted
+additional cleanup operations in the next two weeks.
+E.ON consumed 228 million GJ of energy in 2019, 11 million GJ
+less than in 2018 (which does not include innogy). The main
+factor was lower electricity output due to the fact that E.ON now
+operates fewer nuclear power stations and transferred substan-
+tially all of its renewables operations in September. To further
+reduce the electricity consumed by company buildings, in 2018
+E.ON set the target of making them all carbon-neutral by 2030.
+Aspect 2: Employee Matters
+To shape tomorrow's energy world, remain competitive, and
+launch new businesses, E.ON needs talented, dedicated people
+whose personal and professional skills match its current and
+future needs. Yet with demographic change affecting the labor
+market, skilled workers are more in demand than ever. E.ON
+needs to maintain an attractive, supportive, and inclusive work
+environment in which its people can realize their potential. It is
+the only way to attract and retain great employees. Doing all this
+in a rapidly changing business environment and amid technologi-
+cal developments and corporate restructuring poses challenges
+for human resources ("HR") management.
+E.ON plans to continually monitor and assess its sustainabil-
+ity, climate, and other non-financial risks and opportunities
+and their potential impact in the short, medium, and long
+term. In 2018 E.ON began to integrate the assessment and
+management of these risks more systematically into its
+overall risk management. This process is ongoing and, from
+2020 onward, will reflect the TCFD's recommendations.
+Employee Development and Working Conditions
+It helps ensure that E.ON recruits, retains, and develops the
+people who will continue to drive E.ON's success. Offering
+a range of career paths ensures that E.ON is an attractive
+employer to people who wish to pursue a specialist or a general-
+ist career.
+In 2018 E.ON decentralized its HR activities to bring them
+closer to the business. One important function of Group HR is
+the HR management of E.ON's top 100 leaders. This includes
+executive development, placement, succession planning, and
+talent pipeline management. Each unit must have in place its
+own mechanisms to identify and develop talent and to conduct
+local succession planning. It is a management responsibility to
+ensure that all new employees receive a company orientation
+as well as training on essential topics like health and safety. For
+this purpose, the units may use standardized E.ON eLearning
+modules. These and other virtual learning tools as well as courses
+and training programs are offered by the HR Business Solutions
+team in Group HR. eLearning is an effective, flexible, and modern
+way of delivering learning to employees.
+The Senior Vice President for HR is regularly invited to attend
+Management Board meetings to talk about people matters. The
+Management Board discusses the current status of the talent
+pool each time a top executive position is filled. Twice a year the
+Management Board receives an overview of the entire talent
+pool, including lower levels of management.
+To ensure E.ON's people have a consistent framework within
+the Company's decentralized management approach, in 2017
+the HR team and the E.ON Management Board developed and
+approved the People Commitments. The People Commitments
+establish twelve principles that articulate E.ON's values with
+respect to its people. These principles are binding for the entire
+E.ON Group and are agreed with the SE Works Council of E.ON
+SE. Units apply these principles in a way that reflects their
+particular legal, cultural, and business environment. The People
+Guidelines and People Commitments encompass a number of
+policies and guidelines. Examples include agreements on remote
+working and flexible work arrangements, such as sabbaticals,
+part-time work, and special holidays. E.ON's international
+transfer policy governs the temporary foreign deployment of
+its employees. The average length of a foreign deployment is
+between two and three years.
+Separate Combined Non-Financial Report
+94
+E.ON has in place a wide range of measures to make working
+at E.ON attractive and to develop its employees. E.ON offers
+vocational training in numerous careers as well as work-study
+programs. One example is the E.ON training initiative in Germany,
+which helps school-leavers get a start on their careers through
+internships that prepare them for an apprenticeship as well as
+school projects and other programs. The E.ON Graduate Program
+("EGP") recruits highly qualified university graduates for a
+24-month program during which they receive a broad overview
+of E.ON's business through three to six deployments in different
+E.ON units and departments. In 2019 E.ON offered the EGP
+in Germany, the United Kingdom, Sweden, the Czech Republic,
+Hungary, and Romania.
+E.ON periodically conducts employee surveys-called Pulse-
+Checks-to find out how its people feel about their job, their super-
+visor, the work atmosphere in their unit, and other topics. E.ON's
+2019 Pulse Check survey shows that the Group-wide health
+and safety campaigns were effective in reinforcing employees'
+awareness. Employees ranked health and safety and the unac-
+ceptability of unethical or improper behavior above all other
+topics in the survey and much higher than in previous surveys.
+E.ON uses a single management hiring process throughout the
+Group. It is designed to improve how E.ON fills senior manage-
+ment positions, make hiring more transparent, and ensure equal
+opportunity. Its main component is a biweekly placement
+conference at which talent leaders from around the Company
+discuss vacancies and potential candidates. E.ON also conducts
+an annual management review. These mechanisms ensure that
+managers are engaged in ongoing professional development,
+that E.ON has a transparent view of its current talent situation
+and the needs for the future, and that leaders across the E.ON
+Group have development opportunities. Since feedback is
+essential for empowering people to perform at their best, E.ON
+also provides employees with periodic performance and career-
+development reviews.
+E.ON believes that an attractive compensation package includ-
+ing appealing and up-to-date fringe benefits is essential for
+rewarding its employees. The compensation plans of nearly all
+employees contain an element that reflects E.ON's performance.
+This element is typically based on the same key performance
+indicators that are also used in the Management Board's com-
+pensation plan.
+A motivated, healthy, and diverse workforce is a key success
+factor. The innogy integration marks the beginning of a change
+process for all employees. E.ON is addressing it as part of HR
+management and takes employees' interests very seriously.
+E.ON will actively involve its workforce in all upcoming changes
+and work closely with employee representatives. E.ON has a
+long tradition of maintaining a constructive, mutually trusting
+partnership with employee representatives. Its collaborative
+relationship with employees and their representatives lays the
+foundation for a successful social partnership, particularly in
+times of change. This partnership helps ensure that the integra-
+tion of innogy employees and all other change initiatives remain
+transparent and fair for every employee. In this way, E.ON
+wants to ensure smooth restructuring. You'll find more details
+on page 27.
+Occupational Health and Safety
+E.ON's employees' health and safety ("H&S") are essential
+for their well-being and thus for the Company's success. Some
+employees perform potentially risky tasks, such as working on
+power distribution networks. Strict safety standards are therefore
+of particular importance to E.ON. First and foremost, accidents
+endanger employees' health. But accidents may also damage
+property, cause work stoppages, and harm E.ON's reputation.
+Demographic change and a rapidly changing work environment
+present additional challenges: E.ON needs to address the needs
+of an aging workforce and maintain its people's ability to work.
+E.ON aims to attract talented people to the company and provide
+them with a work environment that enables them to do their
+best. A people strategy helps E.ON do this, especially in times of
+change. Its three focus areas-Preparing Our People for the
+Future, Providing Opportunities, and Recognizing Performance-
+are crucial for maintaining attractive working conditions and
+fostering employees' personal and professional development.
+A key enabler for the latter is Grow@E.ON, a Group-wide com-
+petency framework that is integrated into all HR mechanisms.
+96
+Risk Management
+Report of the Supervisory Board
+Strategy and Objectives
+•
+Separate Combined Non-Financial Report
+Employee TRIF of 2.3 in 2019 was slightly lower than the prior-
+year figure of 2.5. Contractor TRIF increased from 2.1 to 2.6.
+E.ON thinks that the increase in contractor TRIF may be due to
+a better reporting culture. E.ON worked hard in 2019 to improve
+its contractor management and thus its knowledge of contractor's
+accidents while working for E.ON.
+15
+2Figure for October 1 to December 31, 2019 and not included in E.ON's 2019 figure; see
+Purpose and Scope on page 88.
+¹TRIF measures the number of reported fatalities and occupational injuries and illnesses
+per million hours of work. It includes injuries that occur during work-related travel that
+result in lost time or no lost time and/or that lead to medical treatment, restricted work,
+or work at a substitute work station.
+4
+3
+2.5
+2
+2.3
+3.9
+2.3
+1
+E.ON's business operations promote sustainability: its current
+climate strategy includes emission-reduction targets for
+2030 and 2050. The acquisition of innogy substantially
+strengthens E.ON's core businesses and therefore enhances
+its ability to promote sustainability. Going forward, E.ON
+will continually expand its TCFD reporting. The reporting for
+2020, for example, will provide additional detailed TCFD-
+related information and include innogy's data. Since climate
+change could create risks as well as opportunities for E.ON's
+business, a range of climate scenarios is reviewed on an
+ongoing basis.
+0
+E.ON 2018
+innogy 20192
+E.ON 2019
+Employee TRIF¹
+Total recordable injury frequency ("TRIF") is E.ON's key perfor-
+mance indicator for safety. It measures the number of recordable
+work-related injuries and illnesses per million hours of work.
+E.ON has included contractor employees' in its safety perfor-
+mance since 2011 (combined TRIF). The HSE improvement
+plans of many of E.ON's units set annual targets for combined
+TRIF as the Group strives to reach the goal of zero accidents.
+E.ON's most direct influence is on reducing the number of acci-
+dents involving its own employees. E.ON therefore presents
+below its employee TRIF performance for the past three years.
+documented and disseminated. This relates in particular to
+E.ON's internal H&S rules at its DSOs in Germany. Isolated
+safety deficiencies that could put employees, contractors, and
+members of the public at risk were found at some E.ON units
+outside Germany. The deficiencies were prioritized and are
+gradually in the process of being rectified. On balance, there
+has been a steady improvement in recent years. E.ON views
+audits and the findings and recommendations they yield-as
+opportunities to foster continuous improvement.
+The findings of the incident investigations and HSE audits com-
+pleted in 2019 show that E.ON's H&S management systems
+are largely effective. Most of the deficiencies identified were
+rectified without delay. However, there remains work to do to
+ensure that all new or revised policies and processes are fully
+In 2019 E.ON started to harmonize the respective H&S manage-
+ment systems and guidelines in place at the E.ON und innogy
+parts of the Group. In addition, virtual working groups were
+formed to address selected key H&S topics. These steps will
+help ensure a seamless integration in 2020.
+In several countries where E.ON operates, employees who have
+questions or concerns about their physical or mental health
+can contact a free, independent, and strictly confidential health
+advisory service (employee assistance program). In Germany,
+this service is a central component of the Group Works Health
+Agreement, which was concluded between management and
+the Group Works Council in 2015.
+E.ON places great emphasis on continually providing senior
+managers with training and several tools to enable them to live
+up to their responsibility for H&S and to ensure that the work-
+places for which they are responsible are healthy and safe. In
+2017 E.ON developed a one-day workshop to help managers at
+its operating units recognize safety risks early and to motivate
+their employees to work safely and responsibly. E.ON conducted
+the workshop at its four distribution system operators ("DSO")
+in Germany and at E.ON Business Solutions in 2017 and 2018
+and at other E.ON units in 2019. In 2019 E.ON added new mate-
+rial to emphasize the importance of interpersonal relationships
+in promoting safety. It trains managers to conduct how-we-care
+workshops that help teams to develop a shared understanding
+of what it means to take care of one another. In addition, one
+of E.ON's DSOs in Germany launched an initiative that brings
+together managers and operational staff to discuss concerns
+openly and identify new ways to improve the safety culture. E.ON
+plans to emulate this approach at other units in 2020.
+E.ON Management Board is always informed about severe
+accidents, developments relating to accidents, and related
+measures and programs by means of monthly reports from HSE
+and periodic consultations with the Senior Vice President for
+Sustainability & HSE. In addition, the member of the E.ON Man-
+agement Board responsible for HSE receives a weekly safety
+update and presents it at board meetings. The update contains
+major incidents that could have led to the death of employees,
+contractors, customers, or third parties. E.ON investigates all
+accidents carefully, learns from them and takes steps to avoid
+them in the future.
+95
+95
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+E.ON 2017
+E.ON's approach to H&S is proactive and preventive, and the
+Company has zero tolerance for accidents. Consequently, the
+overriding objective is to prevent accidents from ever happening.
+By signing the Düsseldorf Statement on the Seoul Declaration
+on Safety and Health at Work and the Luxembourg Declaration
+on Workplace Health Promotion in 2009, E.ON pledged to pro-
+mote a culture of prevention.
+87
+249
+Scope 2: Indirect emissions associated with E.ON's electricity and heat consumption³
+Scope 3: Indirect emissions from all other business operations
+Scope 1: Direct emissions from own business operations
+Total CO2 Equivalents in Million Metric Tons
+In mid-2017 the E.ON Management Board set new climate
+targets for 2030. E.ON aims to reduce its total carbon footprint
+by 30 percent and that of its customers (their carbon emissions
+per kWh of power E.ON sells them) by 50 percent, both relative
+to a 2016 baseline. Indirect carbon emissions (Scope 3), which
+arise primarily in conjunction with the purchase and use of power
+and I gas in the energy sales business, account for most of E.ON's
+carbon footprint. To meet these targets, E.ON has defined
+measures to reduce emissions in all three scopes of the GHG
+Protocol. E.ON intends to reduce its direct emissions (Scope 1)
+by updating and optimizing its gas networks and indirect emis-
+sions (Scope 2) by conserving energy itself and by reducing line
+losses in its power network business. E.ON's main Scope 3
+objective is to increase the proportion of renewable energy it
+provides to its customers.
+The activities of E.ON's core businesses reflect the key emerging
+energy trends and help protect the earth's climate. But E.ON
+also wants to shrink its own carbon footprint. E.ON measures the
+annual carbon emissions from its distributed power and heat
+generation and from its business activities that are not directly
+related to power generation. E.ON discloses these figures in
+its sustainability reporting. E.ON factors in upstream and down-
+stream emissions as well. It calculates emissions using the
+globally recognized WRI/WBCSD Greenhouse Gas Protocol
+Corporate Accounting and Reporting Standard ("GHG Protocol").
+Distribution networks like E.ON's are the backbone of the energy
+transition. They facilitate low-carbon power generation and the
+deployment of innovative, efficient energy solutions. Wind farms,
+solar arrays, battery-storage systems, and other climate-friendly
+technologies are connected to E.ON's distribution grids. Going
+forward, smart grids will serve as the transformative platform
+for the innovative technologies and business models that are
+essential to the energy transition's success.
+16
+91
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+The Chief Operating Officer-Commercial, who is a member of
+the E.ON Management Board, has overall responsibility for E.ON's
+customer-oriented businesses, including solutions enabling
+customers to generate their own climate-friendly energy. The
+regional units' sales teams implement and market energy and
+eMobility solutions for all classes of customers. Cross-regional
+teams at corporate headquarters coordinate these activities in
+technical, commercial, and strategical terms. E.ON Business
+Solutions is responsible for the design of technical solutions for
+commercial customers in Western and Central Europe, the
+United Kingdom, and Scandinavia. The E.ON Management
+Board is informed on an ongoing basis about developments at
+all customer-oriented businesses through financial performance
+reports, such as expected project turnover or EBIT, as well as
+presentations at its meetings describing operational progress
+using these key performance indicators.
+GHG emissions can be reduced not only by low-carbon generation
+technologies but also by energy conservation and recovery. E.ON's
+energy solutions help its customers use energy more efficiently
+and recover energy. E.ON offers individually tailored solutions to
+residential, industrial, commercial, and public sector customers.
+Its portfolio includes easy-to-use online energy audits and apps
+that help residential customers better understand their energy
+consumption. E.ON designs embedded cogeneration solutions
+and energy-efficiency plans for commercial customers. It also
+develops integrated solutions for cities, district developers, and
+housing companies that encompass elements like efficient
+heating and cooling, low-carbon generation, and smart energy
+management. In addition, E.ON offers eMobility solutions such
+as electric-vehicle charging systems for homes and businesses
+as well as public charging infrastructure for cities that help
+make transport less dependent on fossil fuels and thus less
+carbon-intensive.
+challenges for E.ON's competitiveness but also creates oppor-
+tunities to grow the business. Many countries, communities,
+and companies have already embraced climate-friendly energy
+production and energy efficiency to achieve their carbon-reduc-
+tion targets. E.ON's strategic focus on energy-efficient customer
+solutions and reliable, smart grids is fully in line with these
+global trends.
+Climate change and the environmental damage caused by it are
+serious and affect everyone. The use of fossil-based energy is
+accompanied by greenhouse gas ("GHG") emissions. Low-carbon
+power generation and the efficient use of energy therefore play
+key roles in reducing emissions and limiting global warming. For
+E.ON as an energy company that intends to focus entirely on
+the new energy world, climate protection is a crucial issue. The
+transition to a low-carbon economy will require the concerted
+efforts of everyone who makes or consumes energy. It poses
+Climate Protection
+Aspect 1: Environmental Matters
+HSE incidents are reported via PRISMA (Platform for Reporting
+on Incident and Sustainability Management and Audits), E.ON's
+Group-wide online incident management system, in five cate-
+gories of incidents. They range from 0 (low) to 4 (major). Pursuant
+to E.ON's HSE Standard on Incident Management, units must
+use PRISMA to report category 4 incidents to the HSE division
+at corporate headquarters within 24 hours. E.ON systematically
+investigates and analyzes incidents depending on their severity
+and/or potential to end up in an actual incident and use the
+findings to take preventive action.
+E.ON expects its HSE standards to be met further up the value
+chain as well, for example by suppliers. New suppliers must
+first undergo a qualification process if there is an increased risk
+that their business activities could have a negative impact on
+HSE. Depending on their size, E.ON sometimes also requires
+them to be certified to international environmental and occupa-
+tional health and safety standards (ISO 14001 or EMAS III;
+OHSAS 18001 or ISO 45001) or conducts HSE audits of them.
+The E.ON Management Board and the management of E.ON's
+units are responsible for HSE performance. They set strategic
+objectives and adopt policies to promote continual improvement.
+They are supported and advised by the HSE division at corporate
+headquarters, employee representatives, and the HSE Council.
+The council is composed of senior executives and employee
+representatives from different business areas and countries
+where E.ON operates. It meets at least three times a year and is
+chaired by the Management Board member responsible for HSE.
+The units have HSE committees and expert teams as well. They
+draw up framework specifications to ensure that their unit meets
+its HSE standards. The units also design HSE improvement
+plans, which contain specific HSE targets for one or more years.
+90
+90
+Separate Combined Non-Financial Report
+E.ON's HSE organization, which has developed over the course
+of many years, centrally manages all activities for the material
+issues of climate protection, environmental management, and
+occupational health and safety. E.ON's overarching HSE policy
+and the Function Policy "Sustainability and HSE" set minimum
+standards, assign responsibilities, and define management
+tools and reporting pathways. These policies are binding across
+E.ON.
+Approach to Health, Safety, and the
+Environment ("HSE")
+E.ON's commitment to transparency includes subjecting its sus-
+tainability performance to independent, detailed assessments
+by specialized agencies and capital-market analysts. The results
+of these assessments provide important guidance to investors
+and to E.ON. They help E.ON identify its strengths and weak-
+nesses and further improve its performance. The Sustainability
+Channel on E.ON's corporate website contains a list of current
+sustainability ratings and rankings results.
+Sustainability Ratings and Rankings
+E.ON has published a Sustainability Report annually since 2004,
+innogy since 2016. The report, which has been based on GRI
+standards since 2005, serves as E.ON's annual Communication
+on Progress to the UNGC. It describes the issues that are material
+to E.ON's stakeholders and to E.ON as a company as well as
+how these issues are addressed. It also reports on topics not
+included in this Combined Non-Financial Report for reasons of
+materiality and contains information about E.ON's sustainability
+strategy and organization.
+Annual Sustainability Report
+E.ON's sustainability efforts are guided by internationally recog-
+nized standards, which provide orientation and help ensure that
+E.ON considers all essential aspects of responsible corporate
+governance. E.ON has been committed to the ten principles of
+the United Nations Global Compact ("UNGC") since 2005. Its
+sustainability activities also support the achievement of the
+United Nations' SDGs. In particular, E.ON helps give access to
+affordable, reliable, sustainable, and clean energy, support cities
+and communities to become sustainable, and help protect the
+earth's climate.
+Total
+E.ON 2019
+innogy 20191
+E.ON 2018
+Strategy
+•
+The importance of climate change for E.ON is reflected in
+its governance. The Management Board has overall respon-
+sibility for E.ON's sustainability strategy, including its climate
+strategy. The Supervisory Board is informed about E.ON's
+sustainability performance by its Audit and Risk Committee
+and by the Management Board. Furthermore, it established
+the Innovation and Sustainability Committee which started
+its work in December 2019.
+Governance
+reporting transparently on all these matters. The recommenda-
+tions of the Task Force on Climate-related Financial Disclosures
+("TCFD") provide important guidance for its reporting. Established
+in 2015, the TCFD aims to develop consistent, comparable, and
+accurate climate-related financial risk disclosures that companies
+can use to provide information to investors, lenders, insurers,
+and other stakeholders. E.ON became an official TCFD supporter
+in 2019, which marks the start of its TCFD reporting below:
+92
+92
+Separate Combined Non-Financial Report
+E.ON is committed to acting sustainably in all respects. This
+includes making steady progress toward its climate targets,
+effectively managing its climate-related risks, seizing climate-
+related opportunities that fit with its corporate strategy, and
+necessary at this point. Combining innogy's GHG data with E.ON's
+will change key parameters for calculating emissions. E.ON will
+revise its climate strategy in 2020 after this process is com-
+pleted. Information about the progress E.ON makes toward its
+climate targets is presented first to the Sustainability Council,
+which met two times in 2019. The Chief Sustainability Officer,
+who chairs the council, reports the information to the E.ON
+Management Board on a regular basis.
+The adoption of a climate strategy set in motion actions to help
+E.ON achieve its climate-protection targets for 2030. However,
+year-on-year comparisons can be affected by temporary fluc-
+tuations. A period of several years is necessary to determine
+whether the action E.ON is taking is effective and where it stands
+with regard to its targets. E.ON therefore assesses the trend
+every three years. The first assessment was at year-end 2019.
+The trend (in absolute terms and with regard to E.ON's carbon
+intensity target) indicated that the reduction rate is in line with
+E.ON's forecasts. Consequently, no corrective measures are
+E.ON's direct and indirect CO2e emissions totaled 67.31 million
+tons in 2019, a slight reduction relative to the prior-year figure
+of 68.78 million tons. The emission factors for innogy data
+deviate in some cases from E.ON's, leading principally to higher
+Scope 3 figures. A harmonization of emission factors is planned
+for 2020.
+¹Figures for all of 2019 and not included in E.ON's figures for 2019; see "Purpose and Scope" on page 88.
+²Prior-year figures have been adjusted due to the subsequent adjustment of certain figures.
+³Excludes the consumption of district heating due to the immateriality of the quantity compared with the other Scope 2 categories.
+78.92
+Since 2018, E.ON's management of non-financial risks has
+been aligned with the five mandatory aspects. In 2019 E.ON
+focused in particular on human rights and environmental and
+climate matters in order to prepare to comply with possible new
+regulatory requirements in these areas. E.ON also made signifi-
+cant progress in further integrating non-financial risks into its
+broader risk management processes. The process and findings
+of the non-financial risk analysis for 2019 were presented to,
+and approved by, the E.ON Group Risk Committee on December
+2, 2019. The findings indicated that, on balance, as of year-end
+2019 E.ON had no reportable non-financial net risk exposure.
+Information about E.ON's financial risks and chances can be
+found in the Risk and Chances Report in the Combined Group
+Management Report for the 2019 financial year.
+68.78
+67.31
+71.02
+61.31
+88.13
+59.67
+3.37
+2.892
+3.05
+2.73
+4.532
+4.582
+0.87
+4.91
+E.ON 2017
+92.05
+E.ON's approach to each issue and its progress in 2019 are
+explained in the following sections. E.ON takes a comprehensive
+approach to occupational health and safety (Aspect 2: employee
+matters) and environmental management (Aspect 1: environ-
+mental matters), which is explained below. The description of
+all approaches is guided by the Global Reporting Initiative's
+Sustainability Reporting Standards ("GRI SRS"), in particular
+GRI standard 103: Management Approach 2016.
+69
+89
+120
+144
+Hungary
+120
+63
+182
+113
+53
+166
+132
+60
+192
+Czech Republic
+Romania
+24
+152
+200
+n/a
+n/a
+n/a
+155
+49
+203
+288
+185
+473
+n/a
+n/a
+n/a
+339
+48
+588
+n/a
+n/a
+General significance of compliance
+General significance of human rights
+•
+Human rights
+Anti-corruption
+Data protection
+•
+Customer loyalty
+⋅
+Security of supply
+•
+Social matters
+Employee development and working conditions
+•
+Occupational health and safety
+n/a
+Environmental management
+•
+•
+Employee matters
+Environmental matters
+E.ON's Material Issues Subsumed under the Five Mandatory Aspects
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+22
+14
+20
+34
+Sweden
+28
+142
+170
+Climate protection
+To live up to E.ON's commitment to employees' H&S, its HSE
+management assigns responsibilities clearly and sets minimum
+standards (see HSE Management below). These apply not only
+to E.ON's employees but also to contractor employees who do
+work on E.ON's behalf. With few exceptions, all E.ON units are
+required to have an H&S management system certified to
+ISO 45001 (ISO 45001 replaced OHSAS 18001), a globally rec-
+ognized standard for such systems. The annual management
+review is an important part of this management system. The
+reviews are conducted by the units themselves and are a pre-
+requisite for certification to be renewed. If necessary, Corporate
+Audit and HSE at corporate headquarters conduct HSE audits
+to determine whether E.ON's standards are being met. To decide
+whether an audit of a unit is necessary, E.ON analyzes its acci-
+dents from the previous year as well as current risk assessments.
+In addition to audits, performance indicators for lost time,
+accidents, and dangerous situations also help E.ON investigate
+accident causes and conduct comprehensive risk analyses. The
+2,904
+Liquid funds
+Income taxes
+-8
+10
+329
+-7
+Reclassification adjustments recognized in income
+Items that might be reclassified subsequently to the income statement
+-369
+-40
+-123
+13
+-390
+2
+1
+-116
+-99
+-1,189
+Total income and expenses recognized directly in equity
+544
+2,413
+-371
+Attributable to non-controlling interests
+Discontinued operations
+Continuing operations
+-142
+2,610
+Attributable to shareholders of E.ON SE
+2,839
+448
+Total recognized income and expenses (total comprehensive income)
+-685
+-1,360
+173
+197
+-233
+-622
+Unrealized changes-hedging reserve
+53
+-453
+-543
+-171
+-54
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+-36
+11
+Cash flow hedges
+Items that will not be reclassified subsequently to the income statement
+Income taxes
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+-488
+-1
+-84
+Fair value measurement of financial instruments
+Unrealized changes
+Currency-translation adjustments
+-39
+-30
+-24
+29
+-63
+-1
+Reclassification adjustments recognized in income
+9
+59
+-3
+-15
+-438
+Companies accounted for under the equity method
+Unrealized changes
+Unrealized changes-hedging reserve/other
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+-12
+Securities and fixed-term deposits
+275
+E.ON SE and Subsidiaries Balance Sheets-Assets
+Non-current assets
+7
+34
+(10)
+Income tax assets
+1,195
+76,444
+2,212
+1,474
+3,593
+(17)
+Operating receivables and other operating assets
+427
+699
+Deferred tax assets
+(17)
+30,883
+(16)
+229
+1,377
+(10)
+Income tax assets
+5,445
+14,319
+Inventories
+(17)
+284
+490
+(17)
+Financial receivables and other financial assets
+684
+1,252
+Trade receivables and other operating assets
+229
+Financial receivables and other financial assets
+2,353
+2,162
+4,138
+(14)
+Intangible assets
+2,054
+17,512
+Right-of-use assets²
+(14)
+2018
+2019
+Note
+€ in millions
+December 31,
+106
+Goodwill¹
+2,240
+(32)
+Property, plant and equipment
+Non-current securities
+664
+1,730
+Equity investments
+4,083
+(15)
+3,109
+Other financial assets
+5,232
+(15)
+Companies accounted for under the equity method
+18,057
+35,832
+(14)
+2,603
+(10)
+3,602
+Cash and cash equivalents
+Trade payables
+Other operating liabilities and income taxes
+Cash provided by (used for) operating activities of continuing operations
+Cash provided by (used for) operating activities of discontinued operations
+-392
+-795
+-36
+-80
+70
+-1,457
+-1
+63
+Other operating receivables and income tax assets
+-867
+830
+-232
+431
+-47
+-323
+-998
+2,813
+2,295
+152
+558
+Cash provided by (used for) operating activities (operating cash flow)
+2,965
+-243
+Trade receivables
+Inventories and carbon allowances
+Changes in operating assets and liabilities and in income taxes
+Net income
+Income/Loss from discontinued operations, net
+2019
+2018
+1,808
+3,524
+-1,064
+-286
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+2,502
+1,575
+Changes in provisions
+Changes in deferred taxes
+497
+-397
+-242
+205
+Other non-cash income and expenses
+-292
+57
+Gain/Loss on disposal of intangible assets and property, plant and equipment, equity investments and securities (>3 months)
+Intangible assets and property, plant and equipment
+-466
+-926
+-38
+-51
+Equity investments
+Securities (>3 months)
+2,853
+Proceeds from disposal of
+Intangible assets and property, plant and equipment
+Equity investments
+Repayments of financial liabilities
+-5,104
+2,038
+-716
+-1,027
+-5,820
+1,011
+-342
+6
+-932
+-650
+-188
+-233
+5,824
+1,819
+-3,377
+-3,674
+Cash provided by (used for) financing activities of continuing operations
+985
+-2,732
+Cash provided by (used for) financing activities of discontinued operations
+-193
+95
+Cash provided by (used for) financing activities
+792
+-2,637
+¹No material netting has taken place in either of the years presented here.
+Proceeds from financial liabilities
+€ in millions
+Cash dividends paid to non-controlling interests
+Payments received/made from changes in capital¹
+Purchases of investments in
+256
+4,306
+192
+118
+64
+4,188
+-4,784
+-2,487
+Intangible assets and property, plant and equipment
+-3,241
+-2,280
+Equity investments
+-1,543
+-207
+Proceeds from disposal of securities (>3 months) and of financial receivables and fixed-term deposits
+1,803
+2,630
+Purchases of securities (>3 months) and of financial receivables and fixed-term deposits
+-2,576
+-3,533
+Changes in restricted cash and cash equivalents
+197
+1,122
+Cash provided by (used for) investing activities of continuing operations
+Cash provided by (used for) investing activities of discontinued operations
+Cash provided by (used for) investing activities
+Cash dividends paid to shareholders of E.ON SE
+Restricted cash and cash equivalents
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+54,324
+(19)
+2,641
+2,201
+Additional paid-in capital
+(20)
+13,368
+9,862
+Retained earnings
+Accumulated other comprehensive income³
+Treasury shares
+Equity attributable to shareholders of E.ON SE
+Non-controlling interests (before reclassification)
+Capital stock
+Reclassification related to put options
+(21)
+-1,897
+-2,461
+(22)
+-3,909
+-2,718
+(19)
+-1,126
+-1,126
+9,077
+5,758
+5,491
+Non-controlling interests
+2018
+2019
+Note
+Assets held for sale
+Current assets
+(18)
+-146
+5,357
+1,197
+774
+511
+659
+1,894
+3,924
+(4)
+1,082
+11,442
+22,122
+23,441
+Total assets
+98,566
+54,324
+¹Includes the preliminary differential amount from the innogy purchase price allocation.
+2New account due to IFRS 16 implementation, no prior-year figures, including finance leases previously recognized in accordance with IAS 17 (see the explanations in Note 2 and 32).
+E.ON SE and Subsidiaries Balance Sheets-Equity and Liabilities
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+107
+December 31,
+€ in millions
+3,190
+-1,483
+-430
+(23)
+30,545
+Financial liabilities
+(26)
+3,923
+1,563
+Trade payables and other operating liabilities
+(26)
+16,686
+7,637
+Income tax liabilities
+(10)
+787
+262
+Miscellaneous provisions
+(25)
+4,019
+2,117
+Liabilities associated with assets held for sale
+(4)
+602
+3,682
+Current liabilities
+26,017
+15,261
+Total equity and liabilities
+³Thereof relating to discontinued operations (December 31, 2019): -€36 million.
+98,566
+59,464
+108
+Non-current liabilities
+2,538
+4,008
+2,760
+Equity
+Financial liabilities
+13,085
+8,518
+(26)
+28,025
+8,323
+Operating liabilities
+(26)
+7,939
+4,506
+Income tax liabilities
+(10)
+293
+304
+Provisions for pensions and similar obligations
+(24)
+7,201
+3,247
+Miscellaneous provisions
+(25)
+13,468
+12,459
+Deferred tax liabilities
+(10)
+1,706
+Remeasurements of defined benefit plans
+5,334
+1,808
+(5)
+-693
+-1,389
+Sales¹
+Electricity and energy taxes
+30,089
+41,003
+42,392
+2018
+2019
+Note
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Income
+104
+Sales including electricity and energy taxes
+Statements
+29,396
+-125
+-22,635
+-32,126
+(8)
+5,649
+(7)
+394
+Changes in inventories (finished goods and work in progress)
+487
+Depreciation, amortization and impairment charges
+Personnel costs
+Cost of materials¹
+Other operating income¹
+Own work capitalized
+16
+(6)
+Financial
+Consolidated
+The effectiveness of E.ON's CMS is the main indicator of the
+Company's compliance performance for purposes of manage-
+ment control. All compliance measures, policies, processes,
+controls, and so forth are assessed and guided by this criterion.
+The CMS's effectiveness is also monitored by the E.ON Manage-
+ment Board, the Supervisory Board's Audit and Risk Committee,
+and Group Audit. The latter, an independent entity, is E.ON's
+third line of defense for monitoring the CMS. The criteria E.ON
+uses for monitoring effectiveness include assessing whether
+and how prescribed measures are implemented across E.ON.
+The Management Board and the Audit and Risk Committee are
+convinced that the CMS was again effective in 2019. Their
+assessment was based in part on audits as well as surveys of
+employees and stakeholders.
+self-registration, formal agreement to adhere to the Supplier
+Code of Conduct, and a compliance check. Non-fuel suppliers
+who are not subject to supplier onboarding must agree to the
+Company's General Terms and Conditions for Purchase Contracts,
+which are legally binding. These oblige non-fuel suppliers, among
+other things, to comply with the Supplier Code of Conduct and
+to endorse the principles of the UNGC. In addition, the Supply
+Chain Function Policy and Supply Chain Handbook define Group-
+wide principles, processes, and responsibilities for non-fuel
+procurement, excluding the exceptional cases covered under the
+exception list (such as commodity, financial and real estate
+transactions, insurances, taxes).
+100
+Separate Combined Non-Financial Report
+To prevent human rights violations, E.ON adheres to external
+standards and defines its own principles and policies. The E.ON
+Code of Conduct (see "Aspect 5: Anti-corruption"), a revised
+version of which took effect in 2018, obliges all employees to
+contribute to a non-discriminatory and safe working environ-
+ment and to respect human rights. In 2019 E.ON updated its
+Human Rights Policy Statement from 2008. The statement
+acknowledges the International Bill of Human Rights and the
+Declaration on Fundamental Principles and Rights at Work of
+the International Labour Organisation (ILO) and its fundamental
+conventions and makes reference to E.ON's own policies, such
+as the Supplier Code of Conduct. The standards E.ON is guided
+by include the Universal Declaration of Human Rights of the
+United Nations, the principles of the UN Global Compact (UNGC),
+and the European Convention for the Protection of Human Rights.
+The Chief Sustainability Officer, who is a member of the E.ON
+Management Board, is also the Chief Human Rights Officer. The
+standards for human rights and ethical business practices E.ON
+requires its suppliers to meet are defined in the Supplier Code
+of Conduct. The supplier prequalification process consists of
+E.ON is committed to respecting human rights in all its business
+processes. Failure to respect people's fundamental rights and
+needs may have serious consequences for those affected and
+may damage the Company's reputation. Compliance with social
+standards also plays an important role in the business relation-
+ships with enterprise partners. In addition, there are increasing
+regulatory requirements for corporate transparency and control.
+For example, the U.K. Modern Slavery Act obliges E.ON to report
+on the steps it takes to prevent international human trafficking.
+Aspect 4: Human Rights
+At the end of 2018 E.ON put in place a revised and fully digital
+supplier onboarding solution that is integrated into the Company's
+enterprise resource planning system. In 2019 E.ON focused
+on monitoring existing and new suppliers to ensure that they
+comply with its minimum requirements. Every non-fuel supplier
+whose individual transaction volume exceeds €25,000 or whose
+health, safety, and environment risk is medium or high must
+complete an online onboarding process. In some cases, E.ON may
+take additional steps during the supplier onboarding process,
+such as conducting a supplier audit to assess, among other issues,
+whether the supplier complies with E.ON's standards for human
+rights. As of year-end 2019, 98 percent of E.ON's purchase order
+and contract call-offs had completed the onboarding process.
+The DPMS uses the plan-do-check-act ("PDCA") method, which
+helps the Company plan, implement, manage, and improve
+processes, which is mandatory under the GDPR. The PDCA cycle
+includes continuously monitoring the DPMS's effectiveness and
+taking action if the need for improvement arises. Where necessary
+E.ON aligns changes of the DPMS with the E.ON Management
+Board. E.ON therefore considers the existing DPMS to be
+appropriate and effective. Nevertheless, E.ON and innogy's data
+protection team will review the DPMS as part of the innogy
+integration process.
+The Chief DPO reports periodically to the Information Security
+and Data Protection Council, which includes inter alia two
+Management Board members and, if the need arises, to the
+entire Management Board.
+including those to fulfil the data subject's rights (for information,
+deletion, and so forth), to consider data protection requirements
+in relation to its suppliers and other business partners, and
+to report and handle personal data breaches. E.ON assesses a
+breach's severity using a method developed by the European
+Network and Information Security Agency (ENISA). In addition,
+these processes provide guidance to the units, which have
+implemented the necessary processes in their organizations as
+well. E.ON's units are responsible for dealing with all data pro-
+tection issues related to their business and with the claims that
+individuals address to them pursuant to the individuals' rights
+under the GDPR, such as information, rectification, deletion,
+and data portability. Where required by law, the units have
+appointed Data Protection Officers ("DPOs"). In Germany, for
+example, an organization handling sensitive personal data,
+working in the business of address trading or having more than
+twenty employees handling personal data must have a DPO.
+However, the requirements for appointing DPOs vary by country.
+The DPOs share information with each other on a regular basis
+and report regularly to the Chief DPO at corporate headquarters
+on the following dimensions of data protection: the rights of the
+data subject, relations to third parties, company documentation,
+and correspondence with supervisory authorities. The Chief
+DPO's duties include coordinating data protection activities across
+the Group.
+99
+99
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+3,524
+Internal stakeholders are regularly informed about relevant
+developments in data protection, such as legislation, technology,
+decisions issued by regulatory agencies, and so forth. This
+information is disseminated by email or, where appropriate,
+through internal communications channels, including Connect,
+E.ON's corporate social media platform. E.ON's employees
+receive training in data protection every two to three years. New
+employees typically receive such training in their first year. In
+addition, individual departments and teams-such as call centers
+and sales organizations-provide training to meet their special
+data protection requirements. There is a Group-wide eLearning
+module to familiarize employees with the GDPR's rules.
+In addition, E.ON periodically conducts supplier performance
+reviews of its key non-fuel suppliers using five key performance
+indicators ("KPIs"): quality, cost, delivery, innovation, and CSR;
+the latter includes the protection of human rights. E.ON shares
+the results with each supplier during a performance review
+meeting. The outcome of the meeting may trigger specific actions
+for the supplier to take to improve its performance in one or more
+of the KPIs if it wants to continue doing business with E.ON.
+E.ON's goal is to prevent human rights, environmental and cor-
+porate governance abuses by identifying associated risks along
+its value chain from a holistic point of view. Onboarding assess-
+ments help E.ON do business exclusively with suppliers com-
+mitted to its standards, and periodic risk assessments enable
+E.ON to identify violations or suspected violations. In such cases,
+the Supply Chain Compliance Officer and the respective Supply
+Chain Director are notified, and a process is set in motion to
+ensure that the situation is rectified without delay. If it is not,
+E.ON terminates its business dealings with the supplier.
+E.ON's employees can report potential violations of human rights
+through internal reporting channels or a Group-wide external
+whistle-blower hotline. In December 2019 E.ON extended the
+hotline service and published the hotline number online. Not only
+E.ON employees, but also business partners, their employees
+and other third parties can contact this hotline confidentially.
+Group Compliance forwards the information to the relevant
+department or unit. Depending on the nature and severity of the
+potential violation, Group Compliance may report it immediately
+to the E.ON Management Board, notify law enforcement, initiate
+its own investigation, or take other appropriate action. In 2019
+no violation of human rights was reported through these channels.
+E.ON wants to ensure compliance standards in its supply chain
+as well. All non-fuel suppliers and all suppliers of uranium and
+solid biomass must therefore sign the Supplier Code of Conduct,
+which contains binding standards for ethical business practices.
+In addition, E.ON conducts compliance checks to determine
+whether potential suppliers act in accordance with the company's
+values and principles.
+If employees suspect misconduct or a violation of laws or com-
+pany policies, they are instructed to report it immediately. If they
+wish, they may do so anonymously through internal reporting
+channels or a Group-wide external whistle-blower hotline, which
+E.ON operates with a law firm. Not only E.ON employees, but
+also business partners, their employees and other third parties
+can contact the hotline confidentially. Group Compliance forwards
+the information to the relevant department or unit.
+To determine in which functions the risk for some compliance
+violations is particularly high, E.ON conducts compliance risk
+assessments on a regular basis. Based on their findings, preven-
+tive measures are taken.
+Managers and employees may be invited to events and restau-
+rants, especially by business partners, or receive gifts. The
+Anti-Corruption People Guideline contains a decision-making
+scheme that uses the familiar green, amber, and red of traffic
+lights to indicate when accepting or granting such offers or
+E.ON's Code of Conduct focuses on the guiding principle, "Doing
+the right thing." It is supplemented by several People Guidelines
+that lay down specific rules ("Doing things right"). As a compulsory
+reference, the code helps employees make the right decisions in
+various professional situations and remain true to the Company's
+values. In the preface, the E.ON Management Board calls on all
+employees to act in a correct manner in order to protect them-
+selves and the company. The introduction explains why a Code
+of Conduct is needed. The main body of the Code contains com-
+prehensible guidance on all issues that are of particular concern
+to E.ON. These include human rights, anti-corruption, fair com-
+petition, and good relationships with business partners. The Code
+also contains an integrity test. By answering just a few questions,
+employees can check whether their assessments are in com-
+pliance with E.ON principles and values. The Code clearly states
+E.ON's prohibition against company donations to political parties,
+political candidates, managers of political offices, or represen-
+tatives of public agencies.
+The CCO reports biannually to the E.ON Management Board and
+on a quarterly basis to the Supervisory Board's Audit and Risk
+Committee on the status of the CMS's effectiveness and current
+developments and incidents. In the event of serious incidents,
+the Management Board and the Audit and Risk Committee are
+informed immediately. The same applies to important new laws.
+Potential violations are investigated centrally by Group Audit
+and Group Compliance.
+The Management Board has the ultimate responsibility for
+ensuring compliance with applicable laws and for monitoring
+compliance risks. The E.ON Group has an effective compliance
+management system ("CMS"). The CMS sets uniform Group-
+wide minimum standards for certain compliance issues, such
+as anti-corruption. Pursuant to a Group-wide policy, the Chief
+Compliance Officer ("CCO"), the Group Compliance division,
+and the business units' Compliance Officers are responsible for
+refining and optimizing the CMS on a continual basis.
+managers, and board members guilty of corruption may be
+subject to fines and criminal prosecution. To earn stakeholders'
+lasting trust, E.ON closely monitors compliance with laws and
+its own policies. If violations occur, E.ON deals with them trans-
+parently and, if necessary, takes disciplinary action.
+101
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+E.ON is committed to combating corruption in all its manifesta-
+tions and support national and international efforts directed
+against it. E.ON rejects it as a member of the UN Global Compact
+as well. Corruption leads to decisions being made for the wrong
+reasons. It can thus impede progress and innovation, distort
+competition, and do long-term damage to companies. Employees,
+Aspect 5: Anti-corruption
+Begun in 2017, the German National Action Plan on Business
+and Human Rights (NAP) serves as a forum for companies, trade
+associations, policymakers, non-governmental organizations,
+and academia to promote respect for human rights along the
+value chain. The NAP, which has defined guiding principles for
+embedding human rights due diligence (HRDD) into corporate
+strategy and business processes, encourages companies to
+conduct voluntary HRDD. In September 2019 E.ON participated
+in voluntary NAP monitoring conducted by the German govern-
+ment. This provided useful insights into the status of E.ON's
+implementation of the NAP. With support from a consulting firm,
+E.ON also assessed the maturity of its HRDD processes and
+practices. Based on the assessment's findings, the Company
+defined measures to improve HRDD at E.ON and presented them
+to the Sustainability Council and Management Board. E.ON began
+implementing them in 2019. They include an updated Human
+Rights Policy Statement and, as stated above, making the whistle-
+blower hotline available to third parties. E.ON also refined its
+human rights risk matrix, which in the future will enable the Com-
+pany to adopt an even more structured approach to assessing
+human rights risks. At the start of 2020 E.ON prepared to take
+additional steps, which are expected to be implemented during
+the rest of the year.
+(11)
+-4,101
+gifts is permissible, potentially problematic, or forbidden. Gra-
+tuities above a certain threshold, which varies by country and
+national regulations, must receive Compliance Officer approval.
+Particularly strict requirements apply to invitations and gifts
+from public, elected, or government officials and their represen-
+tatives.
+(14)
+1.37
+0.24
+from continuing operations
+(13)
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted²
+in €
+from discontinued operations
+Attributable to non-controlling interests
+301
+242
+3,223
+1,566
+3,524
+1,808
+Attributable to shareholders of E.ON SE
+0.44
+from net income
+0.68
+Net income
+-2,460
+2018
+2019
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+105
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+¹Failed-own-use contracts are included due to the change in accounting method. The prior year was adjusted accordingly (see the explanations in Note 2).
+2Based on weighted-average number of shares outstanding.
+2,167
+2,293
+Weighted-average number of shares outstanding (in millions)
+1.49
+286
+1,064
+0.12
+3,238
+3,953
+1,351
+269
+421
+-4,786
+(7)
+Income from other securities, interest and similar income
+Income/Loss from equity investments
+Financial results
+Income from continuing operations before financial results and income taxes
+Income from companies accounted for under the equity method
+Other operating expenses¹
+(4)
+-1,575
+-2,502
+6
+-554
+-7,355
+-1,677
+(10)
+744
+-1,236
+-46
+Net income
+-53
+Income/Loss from discontinued operations, net
+Income from continuing operations
+Income taxes
+Interest and similar expenses
+523
+44
+58
+1,065
+-669
+118
+Leasing
+Notes
+Property, plant and equipment are tested for impairment when-
+ever events or changes in circumstances indicate that an asset
+may be impaired. In such a case, property, plant and equipment
+are tested for impairment according to the principles prescribed
+for intangible assets in IAS 36. If the reasons for previously
+recognized impairment losses no longer exist, such impairment
+losses are reversed and recognized in income. Such reversal
+shall not cause the carrying amount to exceed the amount that
+would have resulted had no impairment taken place during the
+preceding periods.
+Transactions in which E.ON acts as a lessee are accounted for on
+the basis of the right-of-use model, irrespective of the economic
+(ownership) relationship to the leased asset at the beginning of
+the lease term. The option to facilitate the application of IFRS 16.5
+is used for low-value leases and for lease agreements with a term
+of less than twelve months (short-term leases). Accordingly, there
+is no recognition of the right-of-use asset and the lease ability.
+Instead, the payments are recognized on a straight-line basis in
+income. In line with internal management practice, intragroup
+leases are recognized as current expenses in the segment report.
+A lease liability is recognized in the amount of the present value
+of the existing payment obligation. Where an arrangement
+provides for payments for lease components and non-lease
+components, the payments are not separated using the option
+under IFRS 16.15 (with the exception of real estate leases);
+the lease liability is measured from the total amount of the pay-
+ments. Present value is determined by discounting with an
+incremental borrowing rate that is equivalent in terms of risk
+and term if the implicit interest rate cannot be determined. The
+liability is subsequently measured using the effective interest
+method. The current portion of the lease liability to be recognized
+separately in the balance sheet is measured on the basis of the
+repayment portion of the next twelve months included in the
+lease payments. A right-of-use asset corresponding with the
+lease liability is recognized in the amount of the present value of
+the lease liability. The initial recognition of the right-of-use asset
+is also increased by the amount of the initial direct costs and
+expected costs resulting from asset retirement obligations when
+they do not relate to an item from property, plant and equipment;
+prepayments increase the amount of the initial recognition and
+lease incentives decrease the amount. A right-of-use asset is
+subsequently recognized at amortized cost. Amortization is
+carried out on a straight-line basis over the shorter of the lease
+term or the useful life of the identified asset. An impairment
+test is carried out in accordance with IAS 36 if events or changed
+circumstances indicate an impairment.
+Lease agreements are accounted for in accordance with IFRS 16,
+"Leases" ("IFRS 16"). A lease is an agreement that conveys the
+right to use an identified asset for a specified period in exchange
+for consideration. A right-of-use asset for an identified asset,
+regardless of its formal structure, can arise in many agreements,
+e.g., rental, lease and service agreements as well as in the frame-
+work of outsourcing transactions. The formal designation of an
+agreement is not relevant for the identification of a lease. E.ON is
+party to some agreements in which it is the lessor and to others
+in which it is the lessee.
+Government grants for costs are posted as income over the
+period in which the costs are incurred.
+Borrowing Costs
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are rec-
+ognized in income on a straight-line basis over the associated
+asset's expected useful life.
+Government Grants
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+until its entry into service are capitalized and subsequently
+amortized alongside the related asset. In the case of a specific
+financing arrangement, the respective borrowing costs incurred
+for that particular arrangement during the period are used.
+For non-specific financing arrangements, a financing rate
+uniform within the Group of 3.86 percent was applied for 2019
+(2018: 5.37 percent). Other borrowing costs are expensed.
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part of
+the acquisition or production cost of the asset, or else—if rele-
+vant-recognized as a separate asset if it is probable that the
+Group will receive a future economic benefit and the cost can
+be determined reliably.
+Other equipment, fixtures, furniture and office
+equipment
+2 to 30 years
+E.ON protects its operational flexibility when concluding leasing
+agreements through the use of extension and termination options.
+In determining the lease term, E.ON considers all facts and
+circumstances that provide an economic incentive to exercise
+existing options. The assumed term therefore also includes
+periods covered by extension options if it is assumed with reason-
+able certainty that they will be exercised. A modification of the
+term is taken into account if there is a change with regard to
+whether an existing option will be exercised or not with reason-
+able certainty.
+Government grants are recognized at fair value if the Group
+satisfies the necessary conditions for receipt of the grant and
+if it is highly probable that the grant will be issued.
+Lease transactions in which E.ON acts as lessor are classified
+as operating or finance leases depending on the distribution of
+risks and rewards. If a lease is classified as an operating lease,
+E.ON recognizes the identified asset and recognizes the lease
+payments as other operating income on a straight-line basis
+over the lease term. For finance leases, the identified asset is
+derecognized and a receivable is recognized in the amount of
+the net investment value. Payments made by the lessee are
+treated as a reduction of the lease receivable or interest income.
+The income from such arrangements is recognized over the term
+of the lease using the effective interest method. Subleases are
+classified based on the right-of-use asset under the head lease.
+-43
+8
+-494
+3,195
+2 to 80 years
+3,795
+2,701
+6,496
+-43
+-43
+Financial Instruments
+84
+84
+-650
+-280
+-280
+-930
+3
+5
+5
+84
+Technical equipment, plant and machinery
+Earnings per Share
+Buildings
+If the impairment thus identified exceeds the goodwill allocated
+to the affected cash-generating unit, the remaining assets of
+the unit must be written down in proportion to their carrying
+amounts. Individual assets may be written down only if their
+respective carrying amounts do not fall below the highest of the
+following values as a result:
+116
+Notes
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of the
+cash-generating unit's fair value less costs to sell and its value in
+use. In a first step, E.ON determines the recoverable amount of
+a cash-generating unit on the basis of the fair value (less costs
+to sell) using generally accepted valuation procedures. Valuation
+is performed using the discounted cash flow method unless
+market transactions or valuations prepared by third parties for
+comparable assets which are higher-level in the fair value hier-
+archy according to IFRS 13 are available. If needed, a calculation
+of value in use is also performed. Unlike fair value, the value in
+use is calculated from the viewpoint of management. In accor-
+dance with IAS 36, "Impairment of Assets," ("IAS 36") it is
+further ensured that restructuring expenses, as well as initial
+and subsequent capital investments (where those have not
+yet commenced), in particular, are not included in the valuation.
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allocated
+are generally equivalent to the operating segments, since good-
+will is reported, and considered in performance metrics for
+controlling, only at that level. Goodwill impairment testing is
+performed in euro, while the underlying goodwill is always carried
+in the functional currency.
+Goodwill is not amortized, but rather tested for impairment at
+the cash-generating unit level on at least an annual basis. Impair-
+ment tests must also be performed between these annual tests
+if events or changes in circumstances indicate that the carrying
+amount of the respective cash-generating unit might not be
+recoverable.
+Goodwill and Intangible Assets
+Goodwill
+• Fair value less costs to sell
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary
+shares outstanding during the relevant period. At E.ON, the com-
+putation of diluted earnings per share is identical to that of basic
+earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares.
+Electricity and Energy Taxes
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+c) Dividend Income
+Interest income is recognized pro rata using the effective interest
+method.
+b) Interest Income
+-1,126
+the date of the last invoice and the end of the period. Monthly
+advance payments for B2C customers are generally determined
+on the basis of historical consumption data and peak payments
+are settled at the end of the year. In B2B, a bottom-up approach
+is used to calculate individual rates. E.ON's sales transactions
+generally are not based on any material finance components.
+The average target payment period is between 14 and 45 days.
+In individual cases, the payment period can also be below the
+specified range. This may be the case, for example, if an agree-
+ment provides for payment on the fifth calendar day of the fol-
+lowing month. Refunds to customers are an exception and are
+granted if the customer is disconnected from the power supply
+for an extended period of time. Cash bonuses or bonus payments
+to customers are recognized as refund liabilities and presented
+as a decrease in revenues uniformly over the term of the contract.
+As a rule, no warranties are granted in the Core Business. Warran-
+ties are only granted in the "Build & Sell" activities.
+115
+Electricity and energy taxes are levied on electricity and natural
+gas delivered to retail customers and are calculated on the basis
+of a fixed tax rate per kilowatt-hour ("kWh"). This rate varies
+between different classes of customers. Electricity and energy
+taxes payable are deducted from sales revenues on the face
+of the income statement if those taxes are levied upon delivery
+of energy to the retail customer.
+• Value in use, or
+Zero.
+Any additional impairment loss that would otherwise have been
+allocated to the asset concerned must instead be allocated pro
+rata to the remaining assets of the unit.
+Useful Lives of Property, Plant and Equipment
+Property, plant and equipment are initially measured at acquisi-
+tion or production cost, including decommissioning or resto-
+ration cost that must be capitalized, and are depreciated over the
+expected useful lives of the components, generally using the
+straight-line method, unless a different method of depreciation
+is deemed more suitable in certain exceptional cases. The useful
+lives of the major asset classes of property, plant and equipment
+are presented below:
+Property, Plant and Equipment
+Under IFRS, expenditure on research is expensed as incurred,
+while costs incurred during the development phase of new prod-
+ucts, services and technologies are to be recognized as assets
+when the general criteria for recognition specified in IAS 38 are
+present. In the 2018 and 2019 fiscal years, E.ON capitalized
+costs for internally generated software and other technologies
+in this context.
+Research and Development Costs
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest iden-
+tifiable group of assets (cash-generating unit) that the intangible
+asset may be assigned to is determined. See Note 14 for addi-
+tional information about goodwill and intangible assets.
+117
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset subject
+to amortization to exceed the amount that would have been
+determined, net of amortization, had no impairment loss been
+recognized during the period.
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use
+and its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount and
+the recoverable amount is recognized and reported in income
+under "Depreciation, amortization and impairment charges."
+Intangible assets not subject to amortization or intangible assets
+whose use has not yet started are measured at cost and tested
+for impairment annually or more frequently if events or changes in
+circumstances indicate that such assets may be impaired. More-
+over, such assets are reviewed annually to determine whether
+an assessment of indefinite useful life remains applicable.
+Acquired intangible assets subject to amortization are classified
+as customer relationships and similar assets as well as conces-
+sions, industrial property rights, licenses and similar rights (this
+category also includes contractual claims). Internally generated
+intangible assets subject to amortization are related to software
+and are recognized as development costs. Intangible assets
+subject to amortization are measured at cost and are generally
+amortized using the straight-line method over their expected
+useful lives. The useful lives of customer relationships and simi-
+lar assets range between 2 and 50 years, and between 3 and
+50
+years for concessions, industrial property rights, licenses
+and similar rights, unless depreciation based on use reflects an
+appropriate level of depletion. This latter category includes soft-
+ware in particular. Useful lives and amortization methods are
+subject to annual verification. Intangible assets subject to amor-
+tization are tested for impairment whenever events or changes
+in circumstances indicate that such assets may be impaired.
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless their
+lives are considered to be indefinite. Factors such as typical
+product life cycles and legal or similar limits on use are taken
+into account in the classification.
+Intangible Assets
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed in
+subsequent reporting periods.
+The purchase price allocation to the identified assets and liabilities
+was made on a provisional basis (see Note 4 for further infor-
+mation) due to the proximity of the acquisition of the distribution
+and network business of innogy to the reporting date in Q3 2019
+and the ongoing process of preparing the underlying financial
+information in Q4 2019. Antitrust law factors also played a
+role in this consideration. As a result, it was not yet possible to
+allocate the preliminary goodwill of €15.5 billion to the cash
+generating units. The unallocated goodwill was not tested for
+impairment as there were no indications of impairment. The
+preliminary goodwill will be tested for impairment in the annual
+impairment test in 2020 as part of the standard test cycle.
+E.ON performs the annual testing of goodwill for impairment at
+the cash-generating unit level in the fourth quarter of each fiscal
+year.
+5 to 60 years
+-212
+-2,460
+6,708
+-2
+Capital increase
+440
+3,506
+Dividends
+-932
+Share additions/reductions
+133
+-14
+Net additions/disposals from
+options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Remeasurements of defined
+benefit plans
+Changes in accumulated
+other comprehensive
+1,364
+reclassification related to put
+-978
+39
+10
+-51
+-35
+59
+Balance as of December 31, 2018
+2,201
+9,862
+-2,461
+-1,775
+10
+39
+-978
+-14
+IFRS 16 adjustment
+1
+Balance as of January 1, 2019
+Change in scope of consolidation
+2,201
+9,862
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+-1,775
+-743
+1
+-6
+-440
+-17
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+111
+Equity attributable to
+Treasury shares
+-1,126
+shareholders of
+E.ON SE
+Non-controlling
+interests (before
+Reclassification related
+reclassification)
+to put options
+Non-controlling
+interests
+Total
+4,007
+3,195
+-494
+2,701
+-1,418
+-212
+33
+-2,518
+-3
+1,566
+-202
+-743
+1
+-6
+-440
+-3
+-202
+income
+-743
+1
+-6
+-440
+-3
+Balance as of December 31, 2019
+2,641
+13,368
+-1,897
+11
+Combined Group Management Report
+Joint Ventures
+Revenues are generally recognized when E.ON fulfills its perfor-
+mance obligation by transferring a promised good or service to
+a customer. An asset is deemed to be transferred when the cus-
+tomer obtains control of the asset. The majority of the E.ON
+Group's performance obligations are fulfilled over time. The rel-
+atively subordinate point-in-time revenue recognition occurs
+primarily in the "Build & Sell" segment and for so-called linear
+products, where a fixed amount of energy is provided to com-
+mercial customers at a specific point in time. Revenue is recog-
+nized when control is transferred to the customer, which means
+that no significant discretionary decisions are required. For all
+such revenues, progress is measured using output-based meth-
+ods. The methods used appropriately reflect the pattern of trans-
+fer of goods to customers or provision of services for customers.
+Revenues from the sale of goods and services are measured
+using the transaction prices allocated to these goods and services.
+They reflect the value of the volume supplied, including an esti-
+mated value of the volume supplied to customers between
+1,566
+448
+275
+275
+173
+-1,053
+-1,053
+-1,053
+242
+-231
+-364
+133
+-1,172
+-240
+-240
+-932
+3,962
+16
+-364
+242
+1,808
+-1,393
+112
+Notes
+13,085
+4,008
+-1,483
+5,491
+9,077
+-1,126
+-1,189
+2
+2
+-1,191
+-171
+31
+31
+-202
+-1,360
+33
+33
+16
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+3,946
+2,613
+-67
+-67
+-685
+-72
+-72
+-613
+3,524
+301
+-543
+301
+2,839
+229
+229
+2,610
+64
+64
+64
+2
+3,223
+-137
+-5
+-5
+2,613
+-2
+8,520
+2,761
+-430
+3,191
+5,759
+-1,126
+2
+1
+1
+1
+8,518
+2,760
+-430
+3,190
+5,758
+-1,126
+-142
+2,611
+Report of the Supervisory Board
+Strategy and Objectives
+The Consolidated Financial Statements of E.ON SE, Essen, reg-
+istered in the Commercial Register of Essen District Court under
+number HRB 28196, have been prepared in accordance with
+Section 315e (1) of the German Commercial Code ("HGB") and
+with those International Financial Reporting Standards ("IFRS")
+and IFRS Interpretations Committee interpretations ("IFRIC")
+that were adopted by the European Commission for use in the
+EU as of the end of the fiscal year, and whose application was
+mandatory as of December 31, 2019.
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared at cost, with the exception
+of financial assets that are measured at fair value through OCI
+(FVOCI) and of financial assets and liabilities (including deriva-
+tive financial instruments) that are recognized in income and
+measured at fair value through profit or loss (FVPL).
+4.78
+RON
+Romanian leu
+4.26
+4.30
+4.30
+4.26
+PLN
+4.66
+Polish złoty
+7.47
+7.47
+7.47
+DKK
+Danish krone
+0.88
+0.88
+0.89
+7.45
+4.75
+Swedish krona
+SEK
+Since the introduction of IFRS 15 with effect from January 1,
+2018, revenues no longer include the fees for the promotion of
+Renewables because these revenues are netted with the corre-
+sponding cost of materials (net disclosure). E.ON acts as an agent
+if another party is essentially responsible for fulfilling the con-
+tract (in the case of the fee mandated by the German Renewable
+Energy Sources Act, E.ON only transmits electricity generated
+from renewable energy sources by third parties), E.ON bears no
+inventory or default risk, E.ON cannot influence the pricing, and
+E.ON receives a commission as remuneration.
+Revenues are generated primarily from the sale of electricity
+and gas to retail customers, industrial and commercial cus-
+tomers and wholesale markets. Revenues earned from the dis-
+tribution of electricity and gas and from deliveries of steam and
+heat are also primarily recognized under revenues.
+a) Revenues
+Recognition of Income
+5.71
+318.89
+1.18
+4.65
+10.26
+25.65
+25.41 25.72 25.67
+6.68 6.06
+6.36
+330.53 320.98 325.30
+1.15
+1.12
+1.12
+USD
+U.S. dollar
+HUF
+Hungarian forint
+TRY
+Turkish lira
+CZK
+Czech crown
+10.59
+10.25
+10.45
+0.85
+Principles
+GBP
+€1, annual
+average rate
+2018
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation
+process on a pro rata basis if they are material.
+The financial statements of equity interests accounted for using
+the equity method are generally prepared using accounting that
+is uniform within the Group.
+113
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recover-
+able amount. If the carrying amount exceeds the recoverable
+amount, the carrying amount is adjusted for this difference. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed accordingly.
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro rata
+basis if they are material.
+Joint Operations
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration
+are generally not recognized. Any difference between the cost
+of the investment and the pro rata remeasured value of its net
+assets is recognized in the Consolidated Financial Statements
+as part of the carrying amount.
+An associate is an investee over whose financial and operating
+policy decisions E.ON has significant influence and that is not
+controlled by E.ON or jointly controlled with E.ON. Significant
+influence is presumed if E.ON directly or indirectly holds at least
+20 percent, but not more than 50 percent, of an entity's voting
+rights.
+Associated Companies
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into line
+with those of the Group. Intercompany receivables, liabilities
+and results are eliminated in the consolidation process.
+or significant influence, gains and losses from these dilutive
+transactions are included in the income statement under other
+operating income or expenses.
+If a subsidiary or associate sells shares to a third party, leading
+to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor can
+direct the activities relevant to the business performance of
+the entity, participate in this business performance in the form
+of variable returns and influence the performance and the
+related variable returns through its involvement. Control is nor-
+mally deemed established if E.ON directly or indirectly holds a
+majority of the voting rights in the investee. In structured entities,
+control can be established by means of contractual arrangements
+if control is not demonstrated through possession of a majority
+of the voting rights.
+Scope of Consolidation
+Interests in associated companies are accounted for using the
+equity method.
+A joint operation exists when E.ON and other investors directly
+control an operation, but unlike a joint venture, they do not have
+a claim to the changes in net assets from the operation. Instead,
+they have direct rights to individual assets or direct obligations
+with respect to individual liabilities in connection with the oper-
+ation. E.ON recognizes assets and liabilities as well as revenues
+and expenses in a joint operation pro rata according to the rights
+and obligations attributable to E.ON.
+Business Combinations
+Business combinations are accounted for using the purchase
+method, under which the purchase price is offset against the
+proportional share in the acquired company's net assets. The
+values at the acquisition date that corresponds to the date at
+which control of the acquired company was attained are used
+as a basis. The acquiree's identifiable assets, liabilities and con-
+tingent liabilities are generally recognized at their fair values
+irrespective of the extent attributable to non-controlling inter-
+ests. The fair values are determined using published exchange or
+market prices at the time of acquisition in the case of marketable
+securities or commodities, for example, and in the case of land,
+buildings and major technical equipment, generally using inde-
+pendent expert reports that have been prepared by third parties.
+If exchange or market prices are unavailable for consideration,
+fair values are derived from market prices for comparable assets
+or comparable transactions. If these values are not directly
+observable, fair value is determined using appropriate valuation
+methods. In such cases, E.ON determines fair value using the
+discounted cash flow method by discounting estimated future
+cash flows by a weighted-average cost of capital. Estimated
+cash flows are consistent with the internal mid-term planning
+data for the next three years, followed by two additional years
+of cash flow projections, which are extrapolated through the end
+of an asset's useful life using a growth rate based on industry
+and internal projections. In certain justified exceptional cases,
+a longer detailed planning period is used as the calculation basis.
+2019
+2018
+2019
+code
+ISO-
+€1, rate at
+year-end
+Currencies
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside
+the European Monetary Union:
+Foreign currency translation effects that are attributable to the
+cost of monetary financial instruments classified as at fair value
+through OCI are recognized in income. In the case of fair-value
+adjustments of monetary financial instruments, the foreign cur-
+rency translation effects are recognized in equity as a component
+of other comprehensive income.
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than the
+euro are translated using the exchange rates applicable on the
+balance sheet date, while items of the statements of income
+are translated using annual average exchange rates. Material
+transactions of foreign subsidiaries occurring during the fiscal
+year are translated in the financial statements using the exchange
+rate at the date of the transaction. Differences arising from
+the translation of assets and liabilities compared with the corre-
+sponding translation of the prior year, as well as exchange rate
+differences between the income statement and the balance
+sheet, are reported separately in equity as a component of other
+comprehensive income.
+114
+Notes
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the trans-
+action. At each balance sheet date monetary foreign currency
+items are adjusted to the exchange rate on the reporting date;
+any gains and losses resulting from fluctuations in the relevant
+currencies are recognized in net income and reported as other
+operating income and other operating expenses, respectively.
+Gains and losses from the translation of non-derivative financial
+instruments used in hedges of net investments in foreign
+operations are recognized in equity as a component of other
+comprehensive income. The ineffective portion of the hedging
+instrument is immediately recognized in net income.
+Foreign Currency Translation
+Intangible assets must be recognized separately if they are
+clearly separable or if their recognition arises from a contractual
+or other legal right. Provisions for restructuring measures may
+not be recorded in a purchase price allocation. If the purchase
+price paid exceeds the proportional share in the net assets at
+the time of acquisition, the positive difference is recognized as
+goodwill. No goodwill is recognized for positive differences
+attributable to non-controlling interests. A negative difference
+is recognized in net income.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do not
+coincide with a loss of control.
+Transactions with holders of non-controlling interests are treated
+in the same way as transactions with investors. Should the
+acquisition of additional shares in a subsidiary result in a differ-
+ence between the cost of purchasing the shares and the carrying
+amounts of the non-controlling interests acquired, that difference
+must be fully recognized in equity.
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The
+choice of method can be made on a case-by-case basis. The
+partial goodwill method is generally used within the E.ON Group.
+The discount rate reflects the specific risks inherent in the
+acquired activities. In the network area, fair values are generally
+determined by means of fair values in kind. The valuation of
+customer groups also deviates from the general procedure
+described above.
+British pound
+-112
+-476
+other comprehensive
+-754
+-628
+-1,219
+-784
+568
+178
+448
+331
+2Cash and cash equivalents of continuing operations at the beginning of the prior year also includes holdings of €90 million in companies in the Renewables segment (which is reported as a
+discontinued operation), and €55 million from Hamburg Netz GmbH, which was deconsolidated in the first quarter of 2018.
+3Cash and cash equivalents of continuing operations at the balance-sheet date also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal group in the
+third quarter of 2019, and €4 million attributable to the sales operations of the heating electricity business in Germany that were reclassified as a disposal group in the fourth quarter of 2019.
+Statement of Changes in Equity
+110
+Changes in accumulated other comprehensive income
+Currency translation
+Fair value
+adjustments
+Cash flow hedges
+measure-
+Additional
+Hedging
+Reserve for
+Capital
+paid-in
+Retained
+reserve/
+Divdends received
+hedging
+Interest received
+3,924
+income
+Non-Derivative Financial Instruments
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+109
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+€ in millions
+Net increase/decrease in cash and cash equivalents
+Effect of foreign exchange rates on cash and cash equivalents
+2019
+2018
+-2,063
+1,227
+-11
+Cash and cash equivalents at the beginning of the year²
+3,924
+2,673
+Cash and cash equivalents of discontinued operations at the beginning of the period
+Cash and cash equivalents at the end of the period
+66
+90
+1,916
+3,990
+Less: Cash and cash equivalents of discontinued operations at the end of the period
+Cash and cash equivalents of continuing operations at the end of the period³
+Supplementary information on cash flows from operating activities
+Income taxes paid (less refunds)
+-14
+-66
+1,902
+Interest paid
+€ in millions
+Non-derivative financial instruments are measured in accordance
+with IFRS 9, "Financial Instruments" ("IFRS 9"). They are recog-
+nized at fair value, including transaction costs, on the settlement
+date when acquired, provided they are not recognized at fair
+value through profit and loss.
+capital
+Capital increase
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to put
+options
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Remeasurements of defined
+benefit plans
+-650
+3
+2,747
+2
+-51
+-35
+59
+3,223
+-476
+-112
+2
+-51
+-35
+59
+-476
+Changes in accumulated
+stock
+-73
+-943
+-112
+8
+other
+90
+earnings
+costs
+ment of
+financial
+instruments
+Reserve for
+Hedging
+hedging
+costs
+Balance as of December 31, 2017
+IFRS 9, IFRS 15 adjustment
+2,201
+9,862
+-4,552
+reserve
+9,862
+-1,663
+-4,561
+-1,663
+2,201
+-203
+Balance as of January 1, 2018
+Change in scope of consolidation
+-73
+-943
+293
+8
+-9
+Combined Group Management Report
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are rec-
+ognized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that will
+result in taxable or deductible amounts when taxable income is
+calculated for future periods, unless those differences are the
+result of the initial recognition of an asset or liability in a trans-
+action other than a business combination that, at the time of
+the transaction, affects neither accounting nor taxable profit/
+loss (initial differences). Uncertain tax positions are recognized
+at their most likely value. IAS 12 further requires that deferred
+tax assets be recognized for unused tax loss carryforwards and
+unused tax credits. Deferred tax assets are recognized to the
+extent that it is probable that taxable profit will be available
+against which the deductible temporary differences and unused
+tax losses can be utilized. Each of the corporate entities is
+assessed individually with regard to the probability of a positive
+tax result in future years. The planning horizon is basically three
+to five years in this context. Any existing history of losses is
+incorporated in this assessment. For those tax assets to which
+these assumptions do not apply, the value of the deferred tax
+assets is reduced.
+Deferred tax liabilities caused by temporary differences associ-
+ated with investments in affiliated and associated companies are
+recognized unless the timing of the reversal of such temporary
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+To the extent that they are material, income taxes for transaction
+costs of an equity transaction are recognized directly in equity
+under IAS 12.
+differences can be controlled within the Group and it is probable
+that, owing to this control, the differences will in fact not be
+reversed in the foreseeable future.
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable for
+taxable income in the years in which temporary differences are
+expected to be recovered or settled. The effect on deferred tax
+assets and liabilities of changes in tax rates and tax law is gener-
+ally recognized in net income. Equity is adjusted for deferred
+taxes that had previously been recognized directly in equity. The
+change is generally recognized in the period in which the material
+legislative process is completed.
+Deferred taxes for the E.ON Group's major German companies
+are-unchanged from the previous year-calculated using an
+aggregate tax rate of 30 percent. This tax rate includes, in addi-
+tion to the 15 percent corporate income tax, the solidarity
+surcharge of 5.5 percent on the corporate tax and the average
+trade tax rate of 14 percent. Foreign subsidiaries use applicable
+national tax rates.
+Income Taxes
+125
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan has
+been decided on by management and publicly announced or
+communicated to the employees or their representatives. Only
+those expenses that are directly attributable to the restructuring
+measures are used in measuring the amount of the provision.
+Expenses associated with the future operation are not taken
+into consideration.
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of resources
+embodying economic benefits is not probable or where the
+amount of the obligation cannot be measured with sufficient
+reliability. Contingent liabilities were not recognized on the
+balance sheet.
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+are recognized at the lower of the excess obligation upon per-
+formance under the contract and any potential penalties or
+compensation arising in the event of non-performance. Obliga-
+tions under an open contractual relationship are determined
+from a customer perspective.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated proba-
+bilities cannot be determined reliably.
+The estimates for nuclear decommissioning provisions are
+derived from studies, cost estimates, legally binding civil agree-
+ments and legal information. A material element in the estimates
+are the real interest rates applied (the applied discount rate, less
+the cost increase rate). The impact on consolidated net income
+depends on the level of the corresponding adjustment posted to
+property, plant and equipment.
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or the
+scope of the relevant obligation, and also as a result of the reg-
+ular adjustment of the discount rate to current market interest
+rates. The adjustment of provisions for the decommissioning
+and restoration of property, plant and equipment for changes
+to estimates is generally recognized by way of a corresponding
+adjustment to these assets, with no effect on income. If the
+property, plant and equipment concerned have already been
+fully depreciated, changes to estimates are recognized within
+the income statement.
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period
+of their occurrence at their discounted settlement amounts, pro-
+vided that the obligation can be reliably estimated. The carrying
+amounts of the respective property, plant and equipment are
+increased by the same amounts. In subsequent periods, capital-
+ized asset retirement costs are amortized over the expected
+remaining useful lives of the assets, and the provision is accreted
+to its present value on an annual basis.
+124
+Notes
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation towards
+third parties as a result of a past event, it is probable that E.ON
+will be required to settle the obligation, and a reliable estimate
+can be made of the amount of the obligation. The provision is
+recognized at the expected settlement amount. Long-term obli-
+gations are reported as liabilities at the present value of their
+expected settlement amounts if the interest rate effect (the differ-
+ence between present value and repayment amount) resulting
+from discounting is material; future cost increases that are fore-
+seeable and likely to occur on the balance sheet date at year-end
+must also be included in the measurement. Long-term obligations
+are generally discounted at the market interest rate applicable
+as of the respective balance sheet date, provided that it is not
+negative. The accretion amounts and the effects of changes in
+interest rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually certain
+to be collected is capitalized as a separate asset. No offsetting
+within provisions is permitted. Advance payments remitted are
+deducted from the provisions.
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+The amount reported on the balance sheet represents the pres-
+ent value of the defined benefit obligations reduced by the fair
+value of plan assets. If a net asset position arises from this cal-
+culation, the amount is limited to the present value of available
+refunds and the reduction in future contributions and to the
+benefit from prepayments of minimum funding requirements.
+Such an asset position is recognized as an operating receivable.
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+Note 10 shows the major temporary differences so recorded.
+A more detailed description is not provided for certain contingent
+liabilities and contingent receivables, particularly in connection
+with pending litigation, as this information could influence
+further proceedings.
+Consolidated Statements of Cash Flows
+The transition effects from the first-time application of IFRS 16
+were recognized directly in equity. The effects of the transition
+on the balance sheet are shown in the following table:
+Segment Information
+Reconciliation of the Consolidated Balance Sheet Due to the Effects of IFRS 16
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fiscal
+year is reported under personnel costs; the net interest on the
+net liability or asset from defined benefit pension plans deter-
+mined based on the discount rate applicable at the start of the
+fiscal year is reported under financial results.
+E.ON also operates as a lessor for networks and generation
+plants. The transition to IFRS 16 resulted in only minor changes
+in the accounting treatment for lessors. If E.ON transfers sub-
+stantially all the risks and rewards incidental to ownership of
+the leased asset to the counterparty, the lease is classified as a
+finance lease. The present value of the outstanding minimum
+lease payments is recognized as a receivable and the payments
+made are treated as payments received or interest income. The
+income from such arrangements is recognized over the term of
+the lease using the effective interest method. If E.ON retains
+substantially all the risks and rewards incidental to ownership
+of the leased asset and they are not transferred to the counter-
+party, the lease is classified as an operating lease. Consequently,
+E.ON continues to recognize the leased asset on its balance sheet
+and the lease payments collected are recognized as income on
+a straight-line basis over the term of the lease.
+E.ON operates as a lessee in the areas of land and buildings,
+networks and vehicle fleets, in particular. Lease payments are
+broken down into principal and interest using the effective
+interest method. The right-of-use asset is generally depreciated
+on a straight-line basis over the shorter of the term of the lease
+or the useful life of the leased asset. The provisions of IAS 36
+concerning impairment testing also apply to capitalized right-
+of-use assets. The liability should be remeasured as a reassess-
+ment event whenever the expected lease payments or the lease
+term change, for example, because of a change in the estimate
+regarding the exercise of a contractual option. The carrying
+amount of the right-of-use asset will be adjusted correspondingly
+as subsequent acquisition costs. Modification of a contractual
+arrangement may also affect the measurement of the lease lia-
+bility and the right-of-use asset.
+The incremental borrowing rate is used to discount future lease
+payments when the lease's implicit refinancing rate cannot be
+reliably determined. The incremental borrowing rate is derived
+on the basis of an essentially risk-free yield curve for a period of
+up to 30 years, adjusted for the credit and country risk specific
+to E.ON.
+In determining the lease term, E.ON considered hindsight
+when expectations with regard to the exercise of options
+changed.
+No impairment test was carried out for right-of-use assets
+recognized for the first time; instead right-of-use assets were
+adjusted by the amount of provisions for onerous contracts.
+Agreements entered into before January 1, 2019, with a
+term of less than twelve months at the date of transition
+were accounted for as short-term leases; no right-of-use
+assets and liabilities are recognized.
+•
+• Agreements entered into before January 1, 2019, and still
+valid at the date of transition were not reviewed to determine
+whether they qualify as leases under IFRS 16.
+The Group has also decided to apply various practical expedients
+for the transition:
+We are applying IFRS 16 "Leases" for the first time in 2019.
+IFRS 16 replaces the previous IAS 17 "Leases" and IFRIC 4
+"Determining whether an arrangement contains a lease." E.ON
+applied the modified retrospective approach to its transition
+to IFRS 16; prior-year figures were not restated and no com-
+parative information will be presented. As at the date of initial
+transition the outstanding payment obligations with regard to
+existing operating leases are discounted using the relevant
+incremental borrowing rate and recognized as a lease liability.
+Correspondingly, right-of-use assets were capitalized with an
+amount equaling the present value of the lease payments,
+adjusted by the amount of the prepaid or accrued lease payments.
+Existing finance leases previously recognized in accordance with
+IAS 17 were carried forward as right-of-use assets with their
+carrying amounts as at December 31, 2018. The option to facil-
+itate application is used for low-value assets and short-term
+leases (with a maturity of less than twelve months); no right-of-
+use assets and liabilities are recognized. In addition, E.ON will
+not separate lease components from non-lease components for
+any asset classes other than buildings.
+IFRS 16, "Leases"
+Significant Standards and Interpretations
+Applicable in 2019
+(2) New Standards and Interpretations
+126
+Notes
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets, the
+accounting treatment of provisions for pensions and miscella-
+neous provisions, for impairment testing in accordance with
+IAS 36, for the determination of the fair value of certain financial
+instruments, and in the application of IFRS 15. Estimates also
+arise from the application of IFRS 16, namely in connection with
+the determination of the lease terms and the calculation of the
+discount rate.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis. Adjustments to accounting estimates are recog-
+nized in the period in which the estimate is revised if the change
+affects only that period, or in the period of the revision and sub-
+sequent periods if both current and future periods are affected.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions that
+may both influence the application of accounting principles
+within the Group and affect the measurement and presentation
+of reported figures. Estimates are based on past experience and
+on current knowledge obtained on the transactions to be
+reported. Actual amounts may differ from these estimates.
+The Consolidated Statements of Income are classified using the
+nature of expense method, which is also applied for internal
+purposes.
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well as
+liabilities that are due to be settled within one year of the report-
+ing date are generally classified as current.
+Structure of the Consolidated Balance Sheets and Statements
+of Income
+In accordance with the so-called management approach required
+by IFRS 8, "Operating Segments," ("IFRS 8") the internal report-
+ing organization used by management for making decisions on
+operating matters is used to identify the Company's reportable
+segments. The internal performance measure used as the seg-
+ment result is EBIT adjusted to exclude certain non-operating
+effects (see Note 34).
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7") the
+Consolidated Statements of Cash Flows are classified in cash
+flows from operating, investing and financing activities. Cash
+flows from discontinued operations are reported separately in
+the Consolidated Statements of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions and
+disposals of companies are reported net of any cash and cash
+equivalents acquired (disposed of) under investing activities
+if the respective acquisition or disposal results in a gain or loss
+of control. In the case of acquisitions and disposals that do not,
+respectively, result in a gain or loss of control, the corresponding
+cash flows are reported under financing activities. The impact on
+cash and cash equivalents of valuation changes due to exchange
+rate fluctuations is disclosed separately.
+Included in gains and losses from the remeasurements of the
+net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between esti-
+mated and actual variations in underlying assumptions about
+demographic and financial variables. Additionally included is the
+difference between the actual return on plan assets and the
+expected interest income on plan assets included in the net
+interest result. Remeasurements effects are recognized in full in
+the period in which they occur and are not reported within the
+Consolidated Statements of Income, but are instead recognized
+within the Statements of Recognized Income and Expenses as
+part of equity.
+A receivable is recognized under IFRS 15 when the goods or
+services are delivered, provided that the right to consideration
+is unconditional, i.e., is only related to the passage of time.
+However, if the right to receive the consideration is contingent
+upon conditions other than the passage of time, a contract asset
+is recognized. An asset is recognized under other assets under
+IFRS 15 if the cost of obtaining the contract is expected to be
+recovered and the amortization period is longer than one year.
+Other assets are amortized over the estimated term of the con-
+tract depending on how the goods or services to which the costs
+relate are transferred to the customer. If the estimated term
+of the contract is less than one year, the costs are immediately
+recognized as an expense on the income statement. Receivables
+and other assets are initially measured at fair value, which
+generally approximates nominal value. They are subsequently
+measured at amortized cost, using the effective interest method.
+In all cases, these are commitments of the Company which pro-
+vide for cash compensation based on the share price performance
+at the end of the term. The compensation expense is recognized
+in the income statement pro rata over the vesting period.
+121
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualitative
+disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments is
+provided in Notes 30 and 31.
+Agreements to buy or sell non-financial items that cannot be
+classified as own-use contracts under IFRS 9 and that are required
+to be accounted for as derivatives (so-called "failed own use"
+contracts) must be realized or recognized in the balance sheet
+at the market price applicable at the time of physical settlement.
+Embedded derivatives in own-use contracts must be separated
+from the host contract and accounted for as derivatives in accor-
+dance with IFRS 9 if the economic characteristics and risks of
+these derivatives are not closely related to those of the host
+contract. The contract is assessed upon conclusion to determine
+whether a derivative is required to be separated. A reassessment
+must be carried out if there is a significant change in the terms
+of the contract or in the context of business combinations.
+Contracts that are entered into for purposes of receiving or deliv-
+ering non-financial items in accordance with E.ON's anticipated
+procurement, sale or use requirements, and held as such, can
+be classified as own-use contracts. They are not accounted for as
+derivative financial instruments at fair value through profit and
+loss (FVPL) in accordance with IFRS 9, but as open transactions
+subject to the rules of IAS 37.
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of the
+contract are not recognized in income. They are instead deferred
+and recognized in income systematically over the term of the
+derivative. An exception to the accrual principle applies if unre-
+alized gains and losses from the initial measurement are verified
+by quoted market prices, observable prices of other current
+market transactions or other observable data supporting the val-
+uation technique. In this case the gains and losses are recognized
+in income.
+Changes in fair value of derivative instruments that are recognized
+in income are presented as other operating income or expenses.
+Gains and losses from interest-rate derivatives are included in
+interest income.
+E.ON currently uses hedges in the framework of cash flow hedges
+and hedges of a net investment.
+To hedge the foreign currency risk arising from the Company's
+net investment in foreign operations, derivative as well as non-
+derivative financial instruments are used. Gains or losses due
+to changes in fair value and from foreign currency translation
+are recognized within equity, as a component of other compre-
+hensive income, under currency translation adjustments.
+The hedging result is reclassified into income during the period
+in which the cash flows of the hedged asset are recognized in
+income. The result is recognized immediately in income if it
+becomes probable that the hedged underlying transaction will
+no longer occur. For hedging instruments used to establish
+cash flow hedges, the change in fair value of the ineffective
+portion is recognized immediately in the income statement to
+the extent required.
+If a derivative instrument qualifies as a cash flow hedge under
+IFRS 9, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the period
+or periods during which the cash flows of the transaction being
+hedged affect income. In accordance with IFRS 9, the currency
+basis spread (hedging costs) will be separated from the hedging
+instrument and reported separately as an excluded component
+in accumulated other comprehensive income in the reserve for
+hedging costs as a component of equity.
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+E.ON has designated some of these derivatives as part of a
+hedging relationship. IFRS 9 sets requirements for the admissi-
+bility of hedging instruments and the underlyings, the formal
+designation and documentation of hedging relationships, the
+hedging strategy, as well as fulfilling requirements of effective-
+ness in order to qualify for hedge accounting. The designated
+hedged items and hedging instruments are subject to the same
+risk. This economic relationship ensures that the amounts of the
+hedged items and hedging instruments are offset against each
+other and that the hedging relationships are therefore effective.
+The hedge ratio of the hedges is 1:1. Ineffectiveness arises only
+if the measurement parameters of the hedged item and the
+hedging instrument differ from one another. All components of
+derivative gains and losses from the measurement of hedge
+ineffectiveness are taken into consideration during recognition.
+120
+Notes
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit risk
+(debt value adjustment) and the credit risk of the corresponding
+counterparty (credit value adjustment). The counterparty risks
+thus determined are allocated to the individual financial instru-
+ments by applying the relative fair value method on a net basis.
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps. In commodities, the instruments used primarily include
+physically and financially settled forwards and options related
+to electricity and gas.
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the balance sheet
+date at initial recognition and in subsequent periods. Under
+IFRS 9, they are classified as at fair value through profit and
+loss (FVPL) as long as they are not a component of a hedge
+accounting relationship. Gains and losses from changes in fair
+value are immediately recognized in net income.
+Non-derivative financial liabilities (including trade payables)
+within the scope of IFRS 9 are measured at amortized cost, using
+the effective interest method. Initial measurement takes place
+at fair value, with transaction costs included in the measurement.
+In the subsequent measurement, the residual carrying amount
+is adjusted by the amortization and accretion of any premium
+or discount remaining until maturity. The premium or discount
+is recognized in financial results over its term.
+The expected future credit loss is calculated by multiplying the
+probability of default by the carrying amount of the financial
+asset (exposure at default) and the expected loss ratio (loss given
+default). For information on the treatment of impairments under
+IFRS 9, please see Note 31.
+Impairments of financial assets are both recognized for losses
+already incurred and for expected future credit defaults. The
+amount of the impairment loss calculated in the determination
+of expected credit losses is recognized on the income statement.
+Debt instruments that do not exclusively serve to collect contrac-
+tual cash flows or to both generate contractual cash flows and
+sales revenue, or whose cash flows do not exclusively consist of
+interest and principal payments are measured at fair value through
+profit and loss (FVPL). For equity instruments that are not held
+for trading purposes, E.ON has uniformly exercised the option
+of recognizing changes in fair value through profit or loss (FVPL).
+Unrealized gains and losses from financial assets measured at
+fair value through other comprehensive income (FVOCI), net of
+related deferred taxes, are reported as a component of equity
+(other comprehensive income) until realized. Realized gains and
+losses are determined by analyzing each transaction individually.
+ments.
+Non-derivative and derivative financial instruments are netted
+on the balance sheet if under IAS 32 E.ON has both an uncon-
+ditional right—even in the event of the counterparty's insol-
+vency-and the intention to settle offsetting positions simulta-
+neously and/or on a net basis.
+Inventories
+Inventories are measured at the lower of acquisition or production
+cost and net realizable value. The cost of raw materials, finished
+products and goods purchased for resale is determined based on
+the average cost method. In addition to production materials and
+wages, production costs include material and production over-
+heads based on normal capacity. The costs of general adminis-
+tration are not capitalized. Inventory risks resulting from excess
+and obsolescence are provided for using appropriate valuation
+allowances, whereby inventories are written down to net real-
+izable value.
+Emission Rights
+123
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+In fiscal years 2017, 2018 and 2019, virtual shares were
+granted to members of the Management Board of E.ON SE and
+certain E.ON Group executives under the E.ON Performance
+Plan. The E.ON Performance Plan uses a fair value determined
+by an external service provider using a Monte Carlo simulation.
+In 2015 and 2016, virtual shares were granted exclusively to
+members of the Management Board of E.ON SE in the frame-
+work of base and performance matching in accordance with the
+share matching plan. Executives who in previous years had
+participated in the share matching plan were granted a multi-year
+bonus extending over a term of four years, whose payout amount
+depends on the performance of the E.ON share up to the pay-
+ment date, instead of base and performance matching. The
+members of the Management Board of E.ON SE were granted
+virtual shares under the E.ON Share Matching Plan for the last
+time in 2017.
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2"). From 2013 to 2016, share-based payments were
+based on the E.ON Share Matching Plan. Under this plan, the
+number of allocated rights was governed by the development
+of the financial measure ROCE (ROACE until 2015).
+Share-Based Payment
+If E.ON SE or a Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attributable
+additional costs (net after income taxes), is deducted from
+E.ON SE's equity until the shares are retired, distributed or resold.
+If such treasury shares are subsequently distributed or sold, the
+consideration received, net of any directly attributable additional
+transaction costs and associated income taxes, is recognized in
+equity.
+settlement amount irrespective of the probability of termination.
+Changes in the value of the liability are reported within other
+operating income. Accretion of the share of the results of the
+non-controlling shareholders' share in net income is recognized
+in Net interest income/expense.
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships, for
+example), such termination rights require the reclassification of
+non-controlling interests from equity into liabilities under IAS 32.
+The liability is recognized at the present value of the expected
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right to
+require E.ON to purchase their shares on specified conditions.
+None of the contractual obligations has led to the transfer of
+substantially all of the risk and rewards to E.ON at the time of
+entering into the contract. In such a case, IAS 32, "Financial
+Instruments: Presentation," ("IAS 32") requires that a liability be
+recognized at the present value of the probable future exercise
+price. This amount is reclassified from a separate component
+within non-controlling interests and reported separately as a
+liability. The reclassification occurs irrespective of the probability
+of exercise. The accretion of the liability is recognized as interest
+expense. If a purchase commitment expires unexercised, the
+liability reverts to non-controlling interests. Any remaining
+difference between liabilities and non-controlling interests is
+recognized directly in retained earnings.
+IFRS defines equity as the residual interest in the Group's assets
+after deducting all liabilities. Therefore, equity is the net amount
+of all recognized assets and liabilities.
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits," ("IAS 19") is based on actuarial com-
+putations using the projected unit credit method, with actuarial
+valuations performed at year-end. The valuation encompasses
+both pension obligations and pension entitlements that are
+known on the reporting date and economic trend assumptions
+such as assumptions on wage and salary growth rates and
+pension increase rates, among others, that are made in order
+to reflect realistic expectations, as well as variables specific
+to reporting dates such as discount rates, for example.
+Equity Instruments
+122
+Notes
+Non-current assets that are held for sale either individually or
+collectively as part of a disposal group, or that belong to a dis-
+continued operation, are no longer depreciated. They are instead
+accounted for at the lower of the carrying amount and the fair
+value less any remaining costs to sell. If this value is less than
+the carrying amount, an impairment loss is recognized.
+Discontinued operations are components of an entity that are
+either held for sale or have already been sold and can be clearly
+distinguished from other corporate operations, both operationally
+and for financial reporting purposes. Additionally, the component
+classified as a discontinued operation must represent a major
+business line or a specific geographic business segment of the
+Group.
+Assets Held for Sale and Liabilities Associated with Assets
+Held for Sale and Discontinued Operations
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually
+taking place. The reclassification to the separate balance sheet
+items is shown under Changes in scope of consolidation.
+Restricted cash with a remaining maturity in excess of twelve
+months is classified as financial receivables and other financial
+assets.
+Liquid funds include current securities, checks, cash on hand and
+bank balances. Bank balances and securities with an original
+maturity of more than three months are recognized under secu-
+rities and fixed-term deposits. Liquid funds with an original
+maturity of less than three months are considered to be cash
+and cash equivalents, unless they are restricted.
+Liquid Funds
+Valuation allowances, included in the reported net carrying
+amount, are provided for identifiable individual risks. If the loss
+of a certain part of the receivables is probable, valuation allow-
+ances are provided to cover the expected loss. Impairments
+must also be recognized for expected future credit losses.
+€ in millions
+Receivables, Contract Assets and Other Assets
+A provision is recognized for emissions produced. The provision is
+measured at the carrying amount of the emission rights held or,
+in the case of a shortfall, at the current fair value of the emission
+rights needed.
+Emission rights held under national and international emission-
+rights systems for the settlement of obligations are reported
+as other operating assets. Emission rights are capitalized at
+cost at the time of acquisition.
+The income and losses resulting from the measurement of
+components held for sale as well as the gains and losses arising
+from the disposal of discontinued operations, are reported sep-
+arately on the face of the income statement under income/loss
+from discontinued operations, net, as is the income from the
+ordinary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance sheet.
+The cash flows of discontinued operations are reported sepa-
+rately in the cash flow statement, with prior-year figures adjusted
+accordingly. However, there is no reclassification of prior-year
+balance sheet line items attributable to discontinued operations.
+Non-current assets
+870
+of which property, plant and equipment
+Operating lease obligations as of December 31, 2018
+€ in millions
+Reconciliation
+Calculated on the basis of the operating lease obligations as of
+December 31, 2018, the following table shows the reconciliation
+to the opening balance of the lease liability as of January 1, 2019:
+In connection with initial application, deferred taxes were recog-
+nized at the respective national tax rates on the revised amounts
+for lease liabilities and the right-of-use assets reported in the
+balance sheet, provided they relate to temporary differences.
+Gross deferred tax assets and liabilities for operating leases each
+totaled €148 million; there were no net effects.
+128
+Notes
+The revised presentation of lease payments arising from oper-
+ating leases results in improved cash flows from operating
+activities and a corresponding deterioration in cash flows from
+financing activities. E.ON presents interest payments in cash
+flow from operating activities.
+Since January 1, 2019, depreciation expenses for right-of-
+use assets and interest expenses from the accretion of lease
+liabilities have been recognized in the income statement
+instead of other operating expenses (unless they relate to
+expenses from short-term and low-value leases). In fiscal
+year 2019, this led to an increase in interest expenses of
+€11 million, an increase in depreciation of €105 million and
+a decrease in other operating expenses of €141 million.
+Consequently, there was no material effect on earnings per
+share for fiscal year 2019.
+•
+The first-time application of the standard resulted in an
+increase in non-current assets (recognition of right-of-use
+assets) and financial liabilities (recognition of the corresponding
+lease liabilities) in the balance sheet. Financial obligations
+from operating leases were previously reported off-balance
+sheet. Taking into account existing accruals and deferrals
+but excluding finance leases, the impact of the transition at
+the time of initial application totaled around €0.8 billion for
+lease liabilities and around €0.8 billion for right-of-use assets.
+These effects totaled €0.3 billion for right-of-use assets and
+lease liabilities for discontinued operations. This increased
+retained earnings by €2 million as of January 1, 2019, taking
+deferred taxes into account. As a result of the change in the
+balance sheet, the equity ratio of the Group declined slightly
+and net financial debt increased slightly.
+•
+The effects of the introduction of IFRS 16 on the individual
+components of the consolidated financial statements and the
+presentation of the financial position and performance of the
+Group can be described as follows:
+55,150
+826
+54,324
+3,971
+289
+3,682
+7,638
+1
+7,637
+1,682
+119
+1,563
+15,670
+409
+Minimum lease payments (notional amount) on finance leases liabilities as of December 31, 2018
+Relief option for short-term leases
+15,261
+Adjustments of the obligation due to a revised lease term
+Gross lease liabilities as of January 1, 2019
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+119
+Financial assets are classified as financial assets measured at
+amortized cost (AmC), financial assets measured at fair value
+through other comprehensive income (FVOCI) and financial
+assets measured at fair value through profit and loss (FVPL) based
+on the business model and the characteristics of the cash flows.
+For fiscal year 2019, the difference between contract values
+and market prices results in a €232 million reduction in sales
+and a €195 million reduction in cost of materials as well as a
+€22 million increase in current assets. This is offset by an
+increase in other operating income of €950 million and other
+operating expenses of €891 million. The adjustment consequently
+resulted in a pretax effect on earnings of €22 million and no
+material effect on earnings per share for fiscal year 2019.
+The restatement effect for fiscal year 2018 will result in a reduc-
+tion in revenue of €169 million and a €178 million reduction in
+cost of materials. In addition, other operating income increased
+by €227 million and other operating expenses increased by
+€236 million. The adjustment has no effect on earnings for the
+2018 fiscal year.
+E.ON has accordingly adopted this change in accounting policy
+as of the 2019 fiscal year. In addition, a retrospective adjustment
+was made for the 2018 fiscal year.
+The adjustment results in higher volatility in revenue, cost of
+materials and current assets. This is offset by a corresponding
+change in other operating income and other operating expenses.
+In March 2019, the IFRS Interpretations Committee (IFRS IC)
+clarified in an agenda decision that agreements to buy or sell
+non-financial items that cannot be classified as own-use con-
+tracts under IFRS 9 and that are required to be accounted for
+as derivatives (so-called "failed own use" contracts) must be
+realized or recognized in the balance sheet at the market price
+applicable at the time of physical settlement. Industry practice
+to date has provided for contracts to be recognized at their con-
+tract value.
+IFRIC Update to IFRS 9-Physical Settlement of Contracts to
+Buy or Sell a Non-Financial Item
+The weighted-average incremental borrowing rate for the lease
+liabilities recognized for the first time as of January 1, 2019,
+was 3.7 percent.
+536
+327
+A financial asset is measured at fair value through other com-
+prehensive income (FVOCI) if it is used both to collect contractual
+cash flows and for sales purposes and the cash flows of the
+financial asset consist exclusively of interest and principal pay-
+863
+207
+1,070
+17
+4
+-3
+467
+585
+Additional lease liabilities as a result of the initial application of IFRS 16 as of January 1, 2019
+Present value of finance lease liabilities as of December 31, 2018
+Lease liabilities as of January 1, 2019
+Discounting
+Other
+of which right-of-use assets
+1,706
+12,457
+-311
+18,057
+870
+31,421
+538
+30,883
+Jan. 1, 2019
+Effects from
+IFRS 16
+Dec. 31,
+2018
+127
+Total equity and liabilities
+of which liabilities associated with assets held for sale
+of which trade payables and other operating liabilities
+of which financial liabilities
+Current liabilities
+of which deferred tax liabilities
+of which miscellaneous provisions
+of which financial liabilities
+Non-current liabilities
+of which retained earnings
+Equity
+Total assets
+of which assets held for sale
+of which trade receivables and other operating assets
+Current assets
+of which deferred tax assets
+of which operating receivables and other operating assets
+17,746
+1,706
+1,474
+1,453
+-2
+12,459
+8,740
+417
+8,323
+415
+30,545
+-2,459
+2
+-2,461
+8,520
+2
+8,518
+55,150
+826
+54,324
+11,731
+289
+11,442
+5,444
+-1
+5,445
+23,729
+288
+23,441
+1,195
+1,195
+-21
+30,960
+If a financial asset is held for the purpose of collecting contractual
+cash flows and the cash flows of the financial asset represent
+exclusively interest and principal payments, then the financial
+asset is measured at amortized cost (AmC).
+Major Balance Sheet Line Items-Customer
+Solutions-Czech Republic innogy (Summary)
+9
+5
+4
+9
+Disposals/Mergers
+Consolidated companies
+as of December 31, 2018
+Additions
+84
+148
+4
+232
+131
+228
+Disposals/Mergers
+7
+76
+83
+Consolidated companies
+as of December 31, 2019
+174
+203
+97
+5
+232
+148
+•
+Amendments to IAS 1 and IAS 8, "Definition of Material,”
+published in October 2018, adopted into European law,
+first-time application in fiscal year 2020
+Amendments to IFRS 3, "Definition of a business," published
+in October 2018, not yet transposed into European law,
+expected first-time application in fiscal year 2020
+•
+⋅
+•
+Amendments to the references to the accounting framework,
+published in March 2018, adopted into European law, first-
+time application in fiscal year 2020
+Amendments to IFRS 9, IAS 39 and IFRS 7, "Interest rate
+benchmark reform," published in September 2019, adopted
+into European law, first-time application in fiscal year 2020
+IFRS 17, "Insurance Contracts," published in May 2017,
+not yet transposed into European law, expected first-time
+application in fiscal year 2021
+(3) Scope of Consolidation
+The number of consolidated companies changed as follows in
+2019:
+Scope of Consolidation
+Domestic
+Foreign
+Total
+Consolidated companies
+as of January 1, 2018
+Additions
+84
+377
+⋅
+In 2019, a total of 78 domestic and 15 foreign associated
+companies were consolidated under the equity method (2018:
+17 domestic companies and 14 foreign companies). In 2019,
+one domestic company reported as joint operations was pre-
+sented pro rata on the consolidated financial statements (2018:
+one domestic company).
+130
+Subsidiary PreussenElektra's minority stakes in
+Gundremmingen and Emsland nuclear power stations
+(25 percent and 12.5 percent, respectively)
+Consideration for public takeover offer and innogy dividend
+settlement payment to RWE and minority shareholders¹
+Fulfillment of preexisting business relationships between
+E.ON and innogy
+784
+Acquisition of intra group receivables between innogy SE
+and RWE¹
+702
+Agreed payment from RWE to E.ON
+-1,521
+Consideration transferred
+13,660
+Operations from the Renewables segment
+19.41 percent of innogy shares tendered under the takeover offer
+Notes
+The preliminary calculations of the fair values of the acquired
+assets and liabilities at the acquisition date and their adjustments
+are as follows:
+Acquired Net Assets at Fair Value
+132
+€ in millions
+September 18,
+2019
+Adjustments
+September 18,
+2019 adjustments
+included
+On March 12, 2018, E.ON made an offer to the remaining share-
+holders of innogy SE to acquire all registered no-par value shares
+of innogy SE in a voluntary public takeover offer. Subsequently,
+a further 9.41 percent of innogy shares were tendered for a
+total consideration of €37.59 per share. This figure included the
+In particular due to the still preliminary determination of the
+value of the consideration paid, the final determination of the fair
+value of the net assets of innogy's network and sales business,
+and the allocation of the goodwill to the cash-generating units.
+Consequently, changes to the allocation of the purchase price
+to the individual assets and liabilities may still be made within
+the agreed IFRS adjustment period of up to twelve months from
+the completion of initial consolidation. Changes may arise in
+particular in the valuation of right-of-use assets.
+2,068
+-838
+(4) Acquisitions, Disposals and Discontinued
+Operations
+Significant transactions in 2019
+Transfer of Business Activities with RWE
+In March 2018, E.ON concluded an agreement with RWE to
+acquire the network and sales business of innogy. Within this
+framework, the 76.8-percent stake in innogy SE held by RWE
+was transferred from RWE to E.ON following approval by the
+antitrust authorities. The entire Renewables and Gas Storage
+business of innogy as well as the 37.9-percent stake that innogy
+holds in Austrian energy supplier KELAG will remain within the
+RWE Group. The acquisition was concluded through a compre-
+hensive transfer of business activities following the approval
+of the EU Commission and the competent antitrust authorities
+on September 18, 2019. The approval was granted subject to
+conditions, the sale of various business activities of E.ON and
+innogy. These include innogy's electricity and gas customer busi-
+ness in the Czech Republic and disposals in E.ON's electricity
+customer business in Hungary. For Germany, the conditions
+primarily relate to significant parts of E.ON's heating customer
+business and to the construction and operation of individual
+electric vehicle charging stations on motorways. Until the dis-
+posals are completed, these business activities will be continued
+in compliance with antitrust requirements.
+The overall transaction reflects current developments in the
+energy industry and, by combining the businesses of the E.ON
+and innogy Group, it has created a clear and attractive energy
+network and customer solutions business portfolio.
+As consideration for innogy's network and sales business, RWE
+was granted a 16.7-percent shareholding in E.ON SE by way of
+a 20-percent capital increase against contribution in kind from
+existing authorized capital. The fair value of the 440,219,800
+shares issued to RWE within the scope of the transaction is based
+on the average daily price (Xetra) of €8.98 at the acquisition date.
+The issue costs in the amount of €5 million, which are directly
+attributable to the issue of the shares, were recognized directly
+in equity as a reduction of the share premium. Other costs
+associated with the business combination in the amount of
+€134 million not directly attributable to the issue of the shares
+are recognized in income under other operating expenses. The
+costs were mainly incurred for consulting services.
+As of December 31, 2019, RWE has reduced its shareholding
+in E.ON SE to 15 percent through the disposal of shares.
+E.ON has also transferred to RWE most of its Renewables
+business and the minority interests held by E.ON subsidiary
+PreussenElektra in the Lippe-Ems GmbH and Gundremmingen
+GmbH nuclear power plants operated by RWE. Certain business
+activities in the Renewables segment of e.disnatur in Germany
+and Poland and a 20-percent shareholding in the Rampion off-
+shore wind farm in the UK remained with the E.ON Group. The
+transfer was executed with retroactive economic effect as of
+January 1, 2018, and was completed in September 2019. The
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+131
+portion of the Renewables business to be transferred and the
+minority interests included in Non-Core Business were presented
+as discontinued operations or as a disposal group as of June 30,
+2018. The gain on disposal amounted to €702 million. This also
+includes the effect from the remeasurement of the remaining
+interest in the Rampion offshore wind farm (€436 million). The
+purchase prices for the deconsolidated activities were not recog-
+nized in the cash flow statement. The deconsolidation of the
+Renewables activities resulted in the derecognition of cash and
+cash equivalents in the amount of €127 million.
+Consideration Transferred
+€ in millions
+Equity instruments (440,219,800 shares)
+2019
+3,952
+8,513
+€0.24 per share increase in the consideration paid in connection
+with the agreed dividend payment for 2018 as well as the
+€0.59 share price compensation resulting from the issue of
+equity instruments to RWE and the increase in the price of
+E.ON shares from the date of the agreement until its execution.
+The E.ON Group and the innogy Group had already established
+a variety of business relationships prior to the acquisition. Espe-
+cially, these include a bond issued by innogy SE and subscribed
+by E.ON SE (fair value as of September 30, 2019: €773 million).
+E.ON also acquired one of RWE's existing intragroup loan
+receivables from innogy. All business relationships between
+the E.ON Group and the innogy Group were eliminated as part
+of the consolidation measures in E.ON's consolidated financial
+statements.
+Notes
+Concessions, commercial property rights, licenses, and similar rights
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. E.ON does not apply these rules
+because their application is not yet mandatory in some cases or
+their recognition by the EU is still pending in others. Currently,
+however, these adjustments are not expected to have a material
+impact on the consolidated financial statements of E.ON:
+• Omnibus Standard to Amend Multiple International Financial
+Reporting Standards (2015-2017 Cycle)
+Income from exchange rate differences
+2018
+2019
+€ in millions
+Other Operating Income
+The table below provides details of other operating income for
+the periods indicated:
+(7) Other Operating Income and Expenses
+138
+Own work capitalized amounted to €487 million in 2019
+(2018: €394 million) and resulted primarily from capitalized
+work performed in connection with IT projects and network
+assets. The increase is primarily due to the inclusion of innogy.
+1,861
+(6) Own Work Capitalized
+In the 2019 fiscal year, revenues include effects from so-called
+"failed own use" contracts. The prior-year figures were adjusted
+accordingly. Note 2 provides additional information.
+Revenues are broken down into intragroup and external revenues
+in the segment information (Note 34). They are also broken
+down into key regions and technologies. The overview also shows
+the effect of revenues on operating cash flow before interest
+and taxes.
+new contracts) was €20.6 billion as of December 31, 2019
+(December 31, 2018: €9.5 billion). The majority of these benefit
+obligations are expected to be met within the next three years.
+Revenues recognized in the current reporting period arising
+from performance obligations that have been fully or partially
+settled in prior reporting periods amounted to €0.2 billion. The
+total amount of benefit obligations already contracted but still
+outstanding (excluding expected contract renewals and expected
+At €41.0 billion, revenues in 2019 were roughly €11.6 billion
+higher than in the previous year, primarily due to the acquisition
+of the innogy Group in September 2019. Revenue also increased
+compared to the previous year in the Customer Solutions
+Germany Sales segment, primarily due to higher sales volumes
+in the electricity and gas business.
+(5) Revenues
+On February 8, 2018, a 20-percent stake (10 percent E.ON stake)
+in Enerjisa Enerji A.Ş. was floated on the stock exchange. The
+issue price was TRY 6.25 per 100 shares. Enerjisa Enerji A.Ş.
+continues to retain the status of a joint venture between E.ON
+and Sabanci (40 percent each).
+Enerjisa
+E.ON majority stake in Hamburg Netz GmbH (74.9 percent,
+HHNG). E.ON held this stake in the Energy Networks segment
+through HanseWerk AG (E.ON's ownership interest: 66.5 percent).
+After the exercise of this option on October 20, 2017, the corre-
+sponding HHNG shares were transferred to the buyer effective
+January 1, 2018. As of December 31, 2017, the balance sheet
+items related to HHNG were classified as a disposal group in
+accordance with IFRS 5. The cash inflow of €0.3 billion that
+occurred in 2017 is recorded in the consolidated cash flow state-
+ment for 2017 under disposals and does not have an effect on
+economic net debt as of December 31, 2017. HHNG was decon-
+solidated in the first quarter of 2018. The gain on deconsolidation
+amounted to €154 million.
+Notes
+Gain on derivative financial instruments
+1,581
+1,607
+1,530
+€ in millions
+Miscellaneous other operating income included effects from
+the reversal of own-use contracts recognized as liabilities in the
+amount of €755 million in the framework of the preliminary
+innogy purchase price allocation, the proceeds of passing on
+charges for the provision of personnel and services, reimburse-
+ments, and rental and lease interest.
+Income from the reversal of provisions in the prior year resulted
+primarily from the adjustment of long-term environmental
+remediation obligations due to the clarification of measures and
+payment dates.
+The gain on the disposal of property, plant and equipment and
+securities consisted primarily of gains on the disposal of PEGI
+in the amount of €390 million. In addition, in 2018 there were
+gains on the disposal of Uniper in the amount of €593 million,
+Hamburg Netz (€154 million) and E.ON Gas Sverige in the
+amount of €134 million. Gains were realized on the sale of
+securities in the amount of €42 million (2018: €91 million).
+Corresponding items from exchange rate differences and
+derivative financial instruments are included in other operating
+expenses.
+Income and expenses from derivative financial instruments
+relate to fair value measurement under IFRS 9. Income from
+derivative financial instruments in the amount of €950 million
+(2018: €227 million) resulted from the change in accounting
+method when accounting for "failed own use" contracts (see
+Note 2 for more information).
+Other operating income increased by €315 million to €5,649 mil-
+lion (2018: €5,334 million). Income from exchange rate differ-
+ences consisted primarily of realized gains from currency deriv-
+atives in the amount of €1,543 million (2018: €1,170 million)
+and from receivables and payables denominated in foreign cur-
+rency in the amount of €265 million (2018: €47 million). In
+addition, there were effects from foreign currency translation
+on the balance sheet date in the amount of €49 million (2018:
+€389 million).
+5,334
+5,649
+Total
+53
+688
+1,540
+Miscellaneous
+37
+Gain on reversal of valuation allowances on
+loans and receivables
+388
+18
+Gain on the reversal of provisions
+1,068
+612
+Gain on disposal of non-current assets and
+securities
+In July 2017, the Hamburg Senate approved the exercise of a call
+option agreed in 2014 (following a corresponding referendum)
+with the Free and Hanseatic City of Hamburg on the previous
+Standards and Interpretations Not Yet
+Applicable in 2019
+Hamburg Netz
+E.ON Gas Sverige
+314
+2019
+Dec. 31,
+Liabilities associated with assets held for sale
+Provisions
+Intangible assets and goodwill
+Property, plant and equipment
+Miscellaneous assets
+Assets held for sale
+Liabilities
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+140
+129
+In addition to the new standards and interpretations described
+in detail above, other standards and interpretations are to be
+applied that do not have a material impact on E.ON's Consolidated
+Financial Statements as of December 31, 2019:
+•
+•
+•
+•
+First-time application of IFRIC 23, "Uncertainty over Income
+Tax Treatment"
+Amendments to IAS 19, "Plan Amendment, Curtailment or
+Settlement"
+Amendments to IAS 28, "Long-Term Investments in Associates
+and Joint Ventures"
+Amendments to IFRS 9, "Prepayment Features with Negative
+Compensation"
+Additional Standards and Interpretations
+Applicable in 2019
+212
+666
+-419
+On July 26, 2018, E.ON sold its interest in E.ON Elektrárne s.r.o.
+to Západoslovenská energetika a.s. (ZSE). The parties agreed not
+to disclose the sale price. The transaction also resulted in the
+repayment of shareholder loans. ZSE is owned by the Slovak state
+(51 percent) and the E.ON Group (49 percent). The assets of E.ON
+Elektrárne s.r.o. primarily include the Malženice gas and steam
+power plant. The transaction was closed on August 15, 2018.
+E.ON Elektrárne
+137
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+After derecognition of the Uniper shares of approximately
+€3.0 billion reported as assets held for sale prior to completion of
+the transaction and the recognition in income of effects from the
+equity valuation previously recognized in other comprehensive
+income, the gain on disposal amounted to €0.6 billion. Upon
+completion of the transaction, derivative financial instruments
+with a negative fair value of €0.5 billion were also derecognized
+through profit and loss. The derivative financial instruments
+were related to the reciprocal rights and obligations arising from
+the agreement with Fortum.
+E.ON and Finnish energy company Fortum Corporation, Espoo,
+Finland, entered into an agreement in September 2017 that
+enabled E.ON to decide to sell its 46.65-percent stake in Uniper
+to Fortum at a total value of €22 per share at the beginning of
+2018. In this connection Fortum published a takeover offer for
+all of the shares of Uniper on November 7, 2017. In January
+2018, E.ON decided to offer its shareholding in Uniper for sale
+in the framework of the takeover bid. After all regulatory approv-
+als and conditions for the completion of the voluntary public
+takeover bid had been met, the sale of the stake in Uniper to
+Fortum was completed on June 26, 2018. The purchase price
+was €3.8 billion. This includes the dividends paid by Uniper to
+E.ON in 2018.
+Uniper
+On July 11, 2019, the E.ON Group concluded the takeover of
+Swedish service provider Coromatic, a leading Nordic supplier
+of critical building infrastructure. The seller was the EQT Group.
+Coromatic has its registered office in Stockholm and has around
+500 employees. The company has more than 5,000 customers
+in Scandinavia that are active in a wide variety of industries,
+including data centers, healthcare, the public sector, transport,
+industry, telecommunications, finance and retail. The parties
+agreed not to disclose the purchase price. Overall, the transaction
+is not significant for the Group.
+Coromatic
+The agreement is expected to be fully implemented in 2021.
+Subsequently, MVM will hold 100 percent of the ÉMÁSZ distri-
+bution network operator and a 25-percent investment in E.ON
+Hungária, which will be the sole owner of ELMŰ. Opus will
+also be the owner of E.ON's current subsidiary E.ON Tiszántúli
+Áramhálózati Zrt. ("E.ON ETI"). E.ON ETI was reported as a dis-
+posal group in accordance with IFRS 5 as of December 31, 2019.
+In total, assets totaling €0.3 billion, primarily property, plant and
+equipment and other assets, and liabilities totaling €0.1 billion,
+primarily liabilities and provisions, were reclassified to the dis-
+posal group.
+E.ON acquired the 27-percent stake held by EnBW in ELMŰ Nyrt.
+("ELMŰ") and ÉMÁSZ Nyrt. ("ÉMÁSZ") at the beginning of
+October 2019. A framework agreement was subsequently signed
+between E.ON, MVM Magyar Villamos Művek Zrt. (a shareholder
+of ELMŰ and ÉMÁSZ) ("MVM") and Opus Global Nyrt. ("Opus").
+Under this agreement, E.ON intends to create a balanced and
+optimized portfolio in Hungary, which will also facilitate the rapid
+integration of innogy's facilities.
+Reorganization of the Hungary Business
+E.ON Beteiligungen GmbH held all of the shares of PEG Infra-
+struktur AG (PEGI), and consequently also holds an indirect
+interest in Nord Stream AG (15.5 percent). Nord Stream AG,
+a project company founded in 2005, owns and operates two
+pipelines, each 1,224 km long, that transport natural gas from
+Russia to Germany. Under an agreement dated December 18,
+2019, E.ON Beteiligungen GmbH transferred and sold all of the
+shares of PEGI, and consequently the indirect interest in Nord
+Stream AG, to E.ON Pension Trust e.V. (EPT), with effect on and
+for account of the trust assets of MEON Pensions GmbH & Co.
+KG (MEON). EPT acts as trustee under the Contractual Trust
+Arrangements (CTA), with MEON as trustor, which has bundled
+the benefit obligations and the plan assets of companies of the
+E.ON Group and is responsible for fulfillment of the acquired
+benefit obligations and the investment of the plan assets trans-
+ferred for this purpose. There are additional CTA trust agree-
+ments with EPT as trustee with companies of the E.ON Group
+as trustors. Based on the assets, as of the end of 2019 MEON,
+with a volume of €2.9 billion, is the largest trustor within the
+framework of the CTAs with EPT. The shares were transferred
+to PEGI with effect from the close of December 31, 2019. The
+preliminary purchase price of the PEGI interest is €1.1 billion and
+the gains on consolidation are €0.4 billion.
+Nord Stream
+136
+Notes
+The preceding figures do not include receivables from or liabilities
+to the E.ON Group.
+-426
+-7
+On April 25, 2018, the E.ON Group completed the sale of its
+Swedish gas distribution company E.ON Gas Sverige AB, which
+is part of the Energy Networks segment. The transaction was
+completed with retroactive economic effect to January 1, 2018.
+The buyer was the European Diversified Infrastructure Fund II.
+The gain on deconsolidation amounted to around €0.1 billion.
+356
+Material transactions in 2018
+371
+E.ON and RWE entered into an agreement on a compensatory
+payment by RWE to E.ON in the amount of €1.5 billion as part
+of the acquisition and the comprehensive transfer of assets
+and business activities. This payment was offset against E.ON's
+payment obligations and indemnification assets with respect
+to RWE as part of a shortened payment procedure. In addition,
+cash and cash equivalents of €275 million were acquired.
+By the acquisition date, E.ON had also acquired an additional
+3.79 percent of innogy shares on the market. As a result, in total
+E.ON held a 90-percent interest in innogy SE as of September 18,
+2019 and as of December 31, 2019. The remeasurement of the
+shares previously acquired on the market at the acquisition date
+resulted in income of €115 million in 2018 and 2019, which is
+reported in net interest income.
+On March 4, 2020, the extraordinary general shareholders
+meeting of innogy SE in Essen approved the squeeze-out of the
+minority shareholders of innogy SE. Under the terms of the
+squeeze-out, the shares of the minority shareholders will be
+transferred to E.ON SE as majority shareholder against payment
+of a cash settlement. The squeeze-out, implemented in accor-
+dance with German merger law, will enter into effect with entry
+in the commercial register (see Note 36).
+The goodwill identified on a preliminary base results primarily
+from the strategic reorientation of the customer business and
+the energy networks as well as the expected synergies from
+the integration of innogy SE into the Group. E.ON has not made
+the assumption that the preliminary goodwill will be deductible
+for tax purposes.
+The acquisition contributed €10,444 million to revenue and
+-€458 million to consolidated net income from September 18,
+2019, to December 31, 2019. If the acquisition had been effec-
+tive from January 1, 2019, revenue would have totaled about
+€33 billion and the contribution to consolidated net income
+would have been about -€140 million as of December 31, 2019.
+Renewables
+The portions of the Renewables business to be transferred to RWE
+have been presented as discontinued operations since June 30,
+2018 and were deconsolidated as of September 18, 2019.
+The expenses and income attributable to this were reported
+separately on the face of the Group's income statement under
+income/loss from discontinued operations, net. The prior-year
+figures were adjusted accordingly. The relevant assets and lia-
+bilities were reported in a separate line on the balance sheet;
+prior-year figures are not to be adjusted. The cash flows of the
+parts of the Renewables business to be transferred are also
+reported separately in the cash flow statement and adjusted
+accordingly to the prior-year values.
+Notes
+Non-controlling interests were measured using the partial
+goodwill method for identified pro rata net assets.
+134
+The key figures presented in the segment reporting also include
+the business activities in the Renewables segment which were
+transferred to RWE. These figures are presented as if the trans-
+ferred operation had not been reclassified in accordance with
+IFRS 5. Note 34 provides additional information and the corre-
+sponding reconciliations.
+Pursuant to IFRS 5.18, the carrying amounts of all of the dis-
+continued operation's assets and liabilities must be measured
+in accordance with applicable IFRS immediately before their
+reclassification. In the course of this measurement, no material
+impairments or need for reversals were recognized. In addition,
+the carrying amount of the discontinued operation as a whole
+must be tested for impairment by comparing it with the fair value
+less costs to sell. The fair value less costs to sell is determined
+from the transaction price agreed with RWE for the parts of the
+Renewables business to be transferred less the expected trans-
+action costs. The comparison did not result in the recognition of
+any additional impairment as of the disposal date.
+In fiscal year 2019, E.ON generated revenues of €37 million
+(2018: €81 million), interest income of €70 million (2018:
+€83 million), interest expenses of €1 million (2018: €1 million),
+as well as other income of €14 million (2018: €243 million)
+and other expenses of €441 million (2018: €1,050 million),
+with the fully consolidated companies to be transferred in the
+Renewables segment.
+The following table shows the main items of the income state-
+ment of the discontinued operation in the Renewables segment
+(after allocation of elimination entries) until the date of decon-
+solidation:
+Income Statement-Renewables (Summary)¹
+€ in millions
+Sales
+Other income
+Other expense
+2019
+All intragroup receivables, payables, expenses and income
+between the companies of the discontinued operation and the
+remaining E.ON Group companies will be eliminated. For deliv-
+eries, goods and services that were previously intragroup in
+nature, but which after the deconsolidation will be continued
+either between the companies to be transferred or with third
+parties, the elimination entries required for the consolidation of
+income and expenses were allocated entirely to the discontinued
+operation.
+2,010
+15,474
+Goodwill
+Deferred tax liabilities
+The largest change in terms of amount resulted from an adjust-
+ment of the maturities of operating liabilities and trade payables
+and other operating liabilities.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+133
+As of the acquisition date, the nominal value of the trade receiv-
+ables acquired is €5,105 million. An impairment of €332 million
+was already recognized on the nominal value of the receivables
+before the acquisition. The impaired portion of the receivables
+continued to be classified as uncollectible within the framework
+of the purchase price allocation. Consequently, the fair value of
+the trade receivables acquired totals €4,773 million.
+Goodwill
+€ in millions
+Consideration transferred
+13,660
+949
+Fair value of shares in innogy SE that were previously
+acquired and held on the market
+Amount to be allocated as part of the purchase price
+allocation
+Fair Value of the negative net assets acquired
+14,609
+-2,773
+Acquisition of RWE's intragroup receivables from innogy SE
+-702
+Non-controlling shares
+2,330
+2018
+763
+481
+9
+In the course of the measurement under IFRS 5.18 directly
+before the reclassification of all assets and liabilities of the
+activities to be disposed of, no material impairments or need for
+reversals were recognized. In addition, the comparison of the
+carrying amount of the discontinued operation as a whole with
+the fair value less costs to sell did not result in the recognition
+of
+any additional impairment as of the reporting date.
+In the 2019 fiscal year, E.ON generated revenues of €19 million,
+interest income of €5 million, interest expense of €8 million
+and other expenses of €2 million with the fully consolidated
+companies to be transferred.
+The following table shows the main items of the income state-
+ment of the discontinued operation (after allocation of elimination
+entries):
+Income Statement-
+€ in millions
+Sales
+Other income
+Other expense
+Customer Solutions-Czech Republic innogy (Summary)
+2019
+384
+All intragroup receivables, payables, expenses and income
+between the companies to be disposed of and the remaining
+E.ON Group companies will be eliminated. For deliveries, goods
+and services that were previously intragroup in nature, but which
+after the deconsolidation will be continued either between the
+companies to be transferred or with third parties, the elimination
+entries required for the consolidation of income and expenses
+were allocated entirely to the discontinued operation.
+52
+Income/Loss from discontinued operations before income
+17
+-2
+15
+taxes
+Income taxes
+Income/Loss from discontinued operations, net
+The following table shows major balance sheet line items for
+the discontinued operation:
+15
+-419
+The expenses and income attributable to this were reported
+separately on the face of the Group's income statement under
+income/loss from discontinued operations, net. The relevant
+assets and liabilities were reported in a separate line on the
+balance sheet. The cash flows of the parts to be transferred are
+also reported separately in the cash flow statement.
+The EU approval of the acquisition of RWE's innogy shares was
+subject to conditions which include the sale of various business
+activities of E.ON and innogy. Because innogy's electricity and
+gas customer business in the Czech Republic, which is to be sold,
+consists of four subsidiaries acquired exclusively with the inten-
+tion of reselling them, they have been presented as a discontinued
+operation in the E.ON Group since September 30, 2019. The
+disposal is expected in the course of the 2020 fiscal year.
+innogy in the Czech Republic
+140
+-125
+-386
+Income/Loss from discontinued operations
+before income taxes
+365
+442
+Income taxes
+-101
+-156
+Income/Loss from discontinued
+operations, net
+264
+286
+¹This does not include the deconsolidation income amounting to €784 million.
+The disposed assets and liabilities in the Renewables segment
+related to intangible assets (€0.3 billion), right-of-use assets
+(€0.3 billion), property, plant and equipment (€8.0 billion), other
+assets (€4.2 billion), provisions (€0.8 billion) and liabilities
+(€8.3 billion).
+Since the loss of control, the remaining 40-percent stake in
+Rampion Renewables Limited, which itself holds 50 percent of
+the Rampion offshore wind farm, has qualified as an associated
+company and been included in the consolidated financial state-
+ments using the equity method.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+135
+Minority Interests in Nuclear Power Plants
+In addition to the transfer of the majority of the Renewables
+business, under the agreement RWE will acquire the minority
+interests held by E.ON in the nuclear power plants operated
+by RWE, Kernkraftwerke Lippe-Ems GmbH and Kernkraftwerk
+Gundremmingen GmbH. The minority interests included in the
+Non-Core Business segment and related liabilities were classified
+as a disposal group from June 30, 2018. In total, assets in the
+amount of €0.2 billion, provisions in the amount of €0.8 billion
+and liabilities in the amount of €0.2 billion were transferred to
+RWE in September 2019.
+688
+122
+The deconsolidation gain results mainly from the recognition in
+income of currency translation effects (€0.5 billion) previously
+recognized in other comprehensive income.
+Acquired net assets
+Operating receivables and other operating assets
+2,065
+3
+2,068
+Deferred tax assets
+1,228
+115
+1,343
+Non-current assets
+29,234
+43
+29,277
+Inventories
+612
+1
+613
+Receivables and other assets
+849
+-136
+713
+Trade receivables and other operating assets
+205
+8,250
+-10
+Financial receivables and other financial assets
+Customer relationships and similar items
+641
+1,994
+-7
+1,987
+Advance payments
+Right-of-use assets
+Property, plant, and equipment
+6
+6
+2,128
+2,128
+17,618
+-94
+17,524
+Companies accounted for under the equity method
+2,548
+Other financial assets
+1,076
+21
+1,097
+215
+20
+2,548
+Liquid funds
+1,388
+Non-current liabilities
+30,045
+-1,937
+28,108
+Financial liabilities
+1,774
+74
+1,848
+Trade payables and other operating liabilities
+1,678
+8,890
+Miscellaneous provisions
+1,667
+-9
+1,658
+Current liabilities
+8,270
+10,653
+1,743
+12,396
+99
+1,289
+7,212
+769
+12,105
+2,394
+Deferred tax liabilities
+2,394
+-115
+11,990
+Financial liabilities
+Current assets
+-6
+17,949
+Operating liabilities
+17,955
+-1,648
+3,618
+-382
+Provisions for pensions and similar obligations
+4,384
+4,384
+5,266
+1,151
+Miscellaneous provisions
+-124
+-6.4
+-51
+Tax effects on income from companies accounted for under the equity method
+-6.5
+-377
+-47.3
+Tax effects of non-deductible expenses and permanent differences
+-140
+-17.6
+-3.8
+-212
+22
+17
+Tax effects of changes in value and non-recognition of deferred taxes
+-47.4
+-571
+Tax effects on tax-free income
+-17.4
+-378
+Tax effects of income taxes related to other periods
+0.7
+1.0
+2.1
+Tax effects of other taxes on income
+2.7
+89
+64.6
+515
+31
+-1.4
+€ in millions
+-3.4
+Of the amount reported as current taxes, -€309 million is
+attributable to previous years (2018: -€570 million).
+Deferred taxes resulted from changes in temporary differ-
+ences affecting net income, which totaled -€571 million (2018:
+€376 million), loss carryforwards of €314 million (2018:
+-€171 million) and tax credits amounting to €15 million (2018:
+€0 million). There were also changes recognized directly in
+equity and disposal effects for deferred taxes from discontinued
+operations totaling €56 million.
+Other
+Income tax assets amounted to €1,411 million (previous year:
+€236 million), of which €1,377 million was short-term (previous
+year: €229 million), while income tax liabilities amounted to
+€1,080 million (previous year: €566 million), of which €787 mil-
+lion was short-term (previous year: €262 million). These items
+consist primarily of income taxes for the respective current year
+and for prior-year periods that have not yet been definitively
+examined by the tax authorities.
+As of December 31, 2019, €32 million (2018: €5 million) in
+deferred tax liabilities were recognized for the differences between
+net assets and the tax bases of subsidiaries and associated
+companies (outside basis differences). Accordingly, deferred tax
+liabilities were not recognized for temporary differences of
+€538 million (2018: €259 million) at subsidiaries and associated
+companies, as E.ON is able to control the timing of their reversal
+and the temporary difference will not reverse in the foreseeable
+future.
+Changes in tax rates resulted in deferred tax income of
+€27 million in total (2018: tax income of €46 million).
+Income taxes relating to discontinued operations (see also Note 4)
+are reported in the income statement under "Income from dis-
+continued operations." In the fiscal year they amounted to tax
+expense of €103 million (2018: tax expense of €156 million).
+The base income tax rate of 30 percent applicable in Germany,
+which is unchanged from the previous year, is composed of
+corporate income tax (15 percent), trade tax (14 percent) and
+the solidarity surcharge (1 percent). The differences from the
+effective tax rate are reconciled as follows:
+Reconciliation to Effective Income Taxes/Tax Rate
+2019
+2018
+€ in millions
+in %
+in %
+Income/Loss from continuing operations before taxes
+797
+100.0
+-27
+Changes in tax rate/tax law
+-3.9
+-129
+29.1
+231
+-46
+Foreign tax rate differentials
+985
+30.0
+239
+Expected income taxes
+100.0
+3,284
+30.0
+Effective income taxes/tax rate
+174
+2.9
+Tax liabilities
+89
+365
+923
+170
+4,152
+115
+1,579
+196
+270
+110
+33
+1
+14
+Tax assets
+764
+921
+3,183
+20
+1,364
+8
+1,878
+107
+1,241
+70
+3,063
+397
+1,298
+The tax expense in 2019 amounted to €53 million (2018:
+€46 million). In 2019, the tax rate was 7 percent (2018: 1 percent).
+In the reporting year as well as in fiscal year 2018, the reversal
+of tax provisions and liabilities for previous years led to a reduc-
+tion in the tax rate. In addition, higher tax-free earnings com-
+ponents or deferred tax liabilities led to a reduction in the 2018
+tax rate.
+528
+1,234
+Tax liabilities
+1,046
+581
+Tax assets
+1
+0.0
+53
+6.6
+46
+1.4
+Notes
+Deferred tax assets and liabilities as of December 31, 2019, and
+December 31, 2018, break down as shown in the following table:
+Deferred Tax Assets and Liabilities
+€ in millions
+Intangible assets
+Right-of-use assets
+Property, plant and equipment
+Financial assets
+Inventories
+Receivables
+Provisions for pensions and similar obligations
+December 31, 2018
+December 31, 2019
+142
+Current
+Deferred taxes (net)
+Netting
+24
+Deferred taxes (gross)
+Subtotal
+Other
+Tax credits
+Loss carryforwards
+Liabilities
+Miscellaneous provisions
+Changes in value
+141
+11,385
+Combined Group Management Report
+2019
+2018
+Expenses for raw materials and supplies
+and for purchased goods
+20,741
+20,697
+Expenses for purchased services
+Total
+1,938
+32,126
+22,635
+In the 2019 fiscal year, cost of materials includes effects from
+so-called "failed own use" contracts. The prior-year figures were
+adjusted accordingly. Note 2 provides additional information.
+Notes
+140
+(9) Financial Results
+The following table provides details of financial results for the
+periods indicated:
+€ in millions
+Financial Results
+54
+2019
+2018
+Income/Loss from companies in which
+equity investments are held
+55
+74
+Fair value through P&L
+47
+Other
+8
+59
+15
+Impairment charges/reversals on other
+financial assets
+€ in millions
+Cost of Materials
+Cost of materials of €32,126 million was significantly higher
+than the prior-year level of €22,635 million. The increase is
+primarily attributable to the acquisition of the innogy Group in
+September 2019. The cost of materials also rose, especially in
+the German sales business, due to increased customer numbers
+and higher grid fees.
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity. Fuel supply is also included in this line item. Expenses
+for purchased services consist primarily of network usage
+charges and maintenance costs. The first of these amounted to
+€8,575 million in the reporting year and was reclassified in
+2019 from cost of raw materials and supplies to expenses for
+purchased services within cost of materials. In the previous
+year, the cost of materials included network usage fees in the
+amount of €6,452 million.
+824
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+139
+The following table provides details of other operating expenses
+for the periods indicated:
+Other Operating Expenses
+€ in millions
+2019
+2018
+Loss from exchange rate differences
+1,775
+1,626
+Loss on derivative financial instruments
+2,270
+866
+Taxes other than income taxes
+91
+68
+(8) Cost of Materials
+Miscellaneous other operating expenses include effects in the
+amount of €725 million from the reversal of own-use contracts
+capitalized as part of the preliminary innogy purchase price allo-
+cation. Also included are external consulting and audit services
+expenses in the amount of €229 million (2018: €162 million),
+advertising and marketing expenses in the amount of €131 million
+(2018: €176 million), write-downs of trade receivables, loans and
+other assets in the amount of €322 million (2018: €188 million),
+rents and leases in the amount of €46 million (2018: €130 million)
+and other services rendered by third parties in the amount of
+€597 million (2018: €537 million). This item also includes IT
+expenditures in the amount of €344 million (2018: €131 million),
+insurance premiums in the amount of €43 million (2018:
+€38 million) and travel expenses in the amount of €76 million
+(2018: €80 million).
+of realized losses from currency derivatives in the amount
+of €1, 350 million (2018: €1,122 million) and from receivables
+and payables denominated in foreign currency in the amount
+of €71 million (2018: €293 million). In addition, there were
+effects from foreign currency translation on the balance sheet
+date in the amount of €354 million (2018: €211 million).
+Losses from exchange rate differences consisted primarily
+Other operating expenses of €7,355 million were 54 percent
+above the prior-year level of €4,786 million. This is principally
+because expenditures relating to derivative financial instruments
+increased by €1,404 million to €2,270 million. Expenses from
+derivative financial instruments in the amount of €891 million
+(2018: €236 million) resulted from the change in accounting
+method when accounting for "failed own use" contracts (see
+Note 2 for more information). Expenses from exchange rate differ-
+ences in the amount of €1,775 million increased by €149 million
+compared to the previous year (€1,626 million).
+4,786
+3
+7,355
+2,085
+3,075
+Miscellaneous
+141
+144
+Loss on disposal of non-current assets and
+securities
+Total
+-30
+Income/Loss from equity investments
+58
+The increase in financial results relative to the previous year is
+primarily attributable to the positive effect from the elimination
+of the measurement differences between the nominal value
+and the fair value recognized during initial consolidation of the
+bonds of innogy SE and innogy Finance B.V. in the amount of
+€142 million. Financial results in fiscal year 2019 also include
+positive operating earnings effects from the change in fair value
+of securities, which was offset by the negative valuation effects
+of the long-term provisions.
+Other interest income consists primarily of effects from the
+reversal of provisions. Other interest expenses include the
+accretion of provisions for asset retirement obligations in the
+amount of €44 million (2018: €61 million). Also contained in
+this item is the net interest cost from provisions for pensions in
+the amount of €73 million (2018: €62 million).
+Interest expenses also include €9 million of negative earnings
+effects (2018: €3 million of positive earnings effects) from non-
+controlling interests in fully consolidated partnerships, which
+are to be recognized as liabilities in accordance with IAS 32,
+and with legal structures that give their shareholders a statutory
+right of withdrawal combined with an entitlement to a settle-
+ment payment.
+Interest expense was reduced by capitalized interest on debt
+totaling €13 million (2018: €12 million).
+(10) Income Taxes
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+Income Taxes
+€ in millions
+2019
+2018
+Domestic income taxes
+Foreign income taxes
+320
+-110
+-25
+-49
+Current taxes
+Domestic
+Report of the Supervisory Board
+Strategy and Objectives
+46
+53
+Total income taxes
+205
+-242
+-593
+Deferred taxes
+193
+Foreign
+80
+-435
+-159
+295
+125
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+-669
+Financial results
+44
+Income/Loss from securities, interest and
+similar income
+1,065
+523
+Amortized cost
+472
+109
+Fair value through P&L
+443
+111
+Fair value through OCI
+13
+21
+Other interest income
+137
+282
+-713
+-612
+Net interest income/loss
+-517
+-562
+Other interest expenses
+-554
+-126
+Fair value through P&L
+-939
+Amortized cost
+-1,236
+-1,677
+Interest and similar expenses
+-176
+1,068
+2019
+17
+upper cap or above, the fourth of the virtual shares allocated
+for the year in question will increase, but to a maximum of
+150 percent. Linear interpolation is used to translate interme-
+diate figures into percentage.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+147
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the agreed target.
+The virtual shares are canceled if the employment relationship
+of the beneficiary ends before the end of the term for reasons
+within the control of the beneficiary. This shall apply in particular
+in the event of termination by the beneficiary and in the event
+of extraordinary termination for good cause by the Company.
+If the employment relationship of the beneficiary is terminated
+before retirement, through the end of a limited term or for oper-
+ational reasons before the end of the term, the virtual shares do
+not expire but are settled at maturity.
+If the employment relationship ends before maturity due to death
+or permanent invalidity, the virtual shares are settled before
+maturity, whereby in this case the average TSR performance of
+the fiscal years that have already completely ended is used to
+calculate the payment amount. The same shall apply in the case
+of a change in control related to E.ON SE and also if the allocating
+company leaves the E.ON Group before maturity.
+The following are the base parameters of the tranches of the
+E.ON Performance Plan active in 2019:
+The provision for the first, second and third tranche of the E.ON
+Performance Plan as of the balance sheet date is €26.8 million
+(2018: €16.2 million). The expense for the first, second and third
+tranches amounted to €11.9 million in the 2019 fiscal year
+(2018: €9.8 million).
+Employees
+During 2019, E.ON employed an average of 61,050 persons
+(2018: 42,949), not including an average of 1,656 apprentices
+(2018: 816).
+The breakdown by segment is shown in the following table:
+Employees¹
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON's TSR performance in a
+given year determines the final number of one fourth of the vir-
+tual shares granted at the beginning of the vesting period. For
+this purpose, the TSRs of all companies are ranked, and E.ON's
+relative position is determined based on the percentile reached.
+If target attainment in a year is below the threshold defined by
+the Supervisory Board upon allocation, the number of virtual
+shares is reduced by one fourth. If E.ON's performance is at
+the
+Headcount
+Customer Solutions
+innogy
+Combined Group Management Report
+2018
+20,058
+17,519
+17,615
+19,751
+18,343
+Renewables
+742
+1,332
+Corporate Functions & Other²
+2,414
+Energy Networks
+The TSR is the return on E.ON stock, which takes into account
+the stock price plus the assumption of reinvested dividends,
+adjusted for changes in capital. The peer group used for relative
+TSR will be the other companies in E.ON's peer index, the
+STOXX® Europe 600 Utilities. Only companies included in the
+STOXX® Europe 600 Utilities for which no takeover offer pursu-
+ant to Section 29(1) of the German Securities Acquisition and
+Takeover Act (WpÜG) or pursuant to an applicable comparable
+regulation of a foreign legal system was or is effective during
+the fiscal year in question and in which E.ON does not hold or
+did not hold a significant portion of shares during the fiscal year
+in question will be taken into consideration for the tranche allo-
+cated in 2019. The peer group for the tranche allocated in 2019
+is also adjusted for companies that have not been in the index
+for the full year.
+may change during the four-year vesting period, depending on
+the total shareholder return ("TSR") of E.ON stock compared
+with the TSR of the companies in a peer group ("relative TSR").
+The beneficiary will receive virtual shares in the amount of the
+agreed target. The conversion into virtual shares will be based on
+the fair market value on the date when the shares are granted.
+The fair market value will be determined by applying methods
+accepted in financial mathematics, taking into account the
+expected future payout and consequently the volatility and risk
+associated with the EPP. The number of virtual shares allocated
+In 2017 virtual shares were granted for the last time under the
+E.ON Share Matching Plan, only to members of the Management
+Board of E.ON SE and only to the extent of the "equity deferral."
+The total of these allocations is shown below as the fifth tranche
+of the E.ON Share Matching Plan. Additional information can be
+found on pages 75 and 76 of the compensation report.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+145
+Under the plan's original structure, the amount paid out under
+performance matching was to be equal to the target value
+at issuance if the E.ON share price was maintained at the end
+of the term and if the average ROACE performance matched
+a target value specified by the Management Board and the Super-
+visory Board. If the average ROACE during the four-year term
+exceeded the target value, the number of virtual shares granted
+under performance matching increased up to a maximum of
+twice the target value. If the average ROACE had fallen short
+of the target value, the number of virtual shares, and thus also
+the amount paid out, were to decrease.
+In 2016, the plan was changed to the effect that for periods from
+2016 onwards, ROCE was used instead of ROACE for measuring
+performance. Accordingly, new targets were defined for 2016
+and/or subsequent years. At the same time, the previous ROACE
+target achievement for the previous years will be included in
+the total performance of the respective tranches on a pro rata
+basis. In the event of a defined underperformance, there is no
+payout under performance matching.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, all virtual shares-except for those that
+resulted from the equity deferral-expire.
+At the end of the term, the sum of the dividends paid to the ordi-
+nary shareholders during the term is added to each virtual share.
+The maximum amount to be paid out to a plan participant is
+limited to twice the sum of the equity deferral, base matching
+and the target value under performance matching.
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements. To offset the
+change in value resulting from the spinoff of Uniper SE, both
+the 60-day average price of the E.ON share and the total divi-
+dends paid to a shareholder starting from 2017 will be multiplied
+by a correction factor at the end of the term.
+The plan also contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+The following are the base parameters of the tranches of the
+share matching plan active in 2019:
+E.ON Share Matching Virtual Shares
+Date of issuance
+Term
+Target value at issuance
+5th tranche
+Apr. 1, 2017
+4 years
+€7.17
+In 2017, 2018 and 2019, E.ON granted the members of the
+Management Board of E.ON SE and certain executives of the
+E.ON Group virtual shares under the E.ON Performance Plan.
+The vesting period of each tranche is four years. Vesting periods
+start on January 1 of each year.
+E.ON Performance Plan (EPP)
+The provision for the multi-year bonus as of the balance sheet
+date is €28.8 million (2018: €47.3 million). The expense amounted
+to €8.7 million in the 2019 fiscal year (2018: €12.8 million).
+The plan contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+60-day average prices are used to determine both the share
+price after the spinoff and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end
+of the term will take place in the event of a change of control
+or on the death of the beneficiary. If the service or employment
+relationship ends before the end of the term for reasons within
+the control of the beneficiary, there is no entitlement to a multi-
+year bonus payout.
+2,456
+146
+For executives in the E.ON Group, the amount paid out is equal
+to the target value if the E.ON share price at the end of the term
+is equal to the E.ON share price after the spinoff of Uniper. If
+the share price at the end of the term is higher or lower than the
+share price after the spinoff, the amount paid out relative to
+the target value will increase or decrease in equal proportion to
+the change in the share price, but in no event shall the payout
+be higher than twice the target value.
+In 2015 and 2016, E.ON extended to those executives who in
+previous years had been granted virtual shares in the context of
+base matching and performance matching a multi-year bonus
+extending over a term of four years. Beneficiaries were informed
+individually of the target value of the multi-year bonus.
+Multi-Year Bonus
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual shares.
+In addition, the change in ROCE is simulated for performance
+matching. The provision for the fourth and fifth tranches
+of the E.ON Share Matching Plan as of the balance sheet date
+is €9.3 million (2018: €14.1 million). The income for the fourth
+and fifth tranches amounted to €0.5 million in the 2019 fiscal
+year (2018: income of €0.7 million).
+4 years
+€8.63
+4th tranche
+Apr. 1, 2016
+Notes
+Employees, core business
+59,172
+41,058
+28
+15
+Other attestation services
+4
+3
+Domestic
+4
+2
+Tax advisory services
+Domestic
+The auditor's fees relate to the audit of the Consolidated Financial
+Statements and the legally mandated financial statements of
+E.ON SE and its affiliates. They also include fees for auditing
+reviews of the IFRS interim financial statements and other tests
+directly required by the audit. This figure also includes additional
+auditing services in relation to the innogy transaction.
+The fees for other auditing services include all attestation ser-
+vices that are not auditing services and are not used in connection
+with the audit. In 2019, these costs are for the legally required
+attestation services (e.g., as a result of the Renewable Energy Act
+[EEG], the Act on Combined Heat and Power Generation [KWKG])
+and the other half of the costs will be for other voluntary attes-
+tation services (primarily in connection with new IT systems).
+The fees for tax consulting services mainly relate to services in
+the area of tax compliance.
+Fees for other services consist primarily of technical support
+in connection with the implementation of transactions and new
+requirements in the areas of IT and accounting issues.
+The fees indicated take into consideration the innogy subsidiaries
+from the acquisition date and the companies transferred to RWE
+from the date of deconsolidation.
+List of Shareholdings
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+18
+33
+24
+23
+42
+1
+Domestic
+1
+1
+Domestic
+Total
+Domestic
+Other services
+presented on pages 210 through 227.
+1
+In 2015 and 2016, virtual shares from the third and fourth tranche
+were granted in the context of base matching and performance
+matching exclusively to members of the Management Board of
+E.ON SE. Executives were granted a multi-year bonus, the terms
+of which are described further below, instead of the base and
+performance matching.
+20
+Financial statement audits
+Non-Core Business (Preussen Elektra)
+1,878
+1,891
+Total employees, E.ON Group
+61,050
+42,949
+E.ON Performance Plan Virtual Shares
+Date of issuance
+Term
+Target value at issuance
+3rd tranche
+Jan. 1, 2019
+2nd tranche
+Jan. 1, 2018
+1st tranche
+Jan. 1, 2017
+4 years
+€6.68
+4 years
+€6.41
+4 years
+2018
+2019
+€ in millions
+Independent Auditor Fees
+During 2019 and 2018, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") GmbH, Wirtschafts-
+prüfungsgesellschaft, (domestic) and by companies in the inter-
+national PwC network were recorded as expenses:
+Fees and Services of the Independent Auditor
+37
+On December 11, 2019, the Management Board and Supervisory
+Board of innogy SE issued a statement of compliance pursuant to
+Section 161 of the German Stock Corporation Act and published
+it on the Internet at www.innogy.com to make it permanently and
+publicly accessible to the Company's stockholders.
+German Corporate Governance Code
+(12) Other Information
+148
+Notes
+¹Figures do not include board members, managing directors, or apprentices.
+²Includes E.ON Business Services.
+€5.84
+On December 18, 2019, the Management Board and the Super-
+visory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+2
+The equity deferral is determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral is converted into virtual
+shares and vests immediately. Beneficiaries were additionally
+granted virtual shares in the context of base matching and per-
+formance matching. For members of the Management Board of
+E.ON SE, the proportion of base matching to the equity deferral
+was determined at the discretion of the Supervisory Board; for
+all other beneficiaries it was 2:1. The performance-matching
+target value at allocation was equal to that for base matching in
+terms of amount. Performance matching will result in a payout
+only on achievement of a minimum performance as specified at
+the beginning of the term by the Management Board and the
+Supervisory Board.
+E.ON Share Matching Plan
+After
+Income
+income
+taxes
+taxes
+taxes
+taxes
+taxes
+Cash flow hedges
+-453
+9
+-444
+53
+-15
+Before
+income
+38
+-1
+1
+-63
+-63
+Currency translation adjustments
+-622
+-622
+-84
+-84
+Remeasurements of defined benefit plans
+-146
+-33
+-179
+-488
+Securities (IFRS 9)
+After
+income
+Income
+Before
+income
+taxes
+680
+966
+480
+315
+11,374
+9,116
+6,101
+3,896
+-2,584
+-2,716
+8,790
+9,116
+3,385
+3,896
+-6,578
+-6,578
+-2,190
+€ in millions
+2018
+2019
+Income Taxes on Components of Other Comprehensive Income
+Income taxes recognized in other comprehensive income for the
+years 2019 and 2018 break down as follows:
+Of the deferred taxes reported, a total of -€538 million was
+charged directly to equity in 2019 (2018: -€564 million charge).
+A further €49 million in current taxes (2018: €49 million)
+was also recognized directly in equity. Currency translation
+differences with an impact on income tax within this item were
+reclassified to other comprehensive income.
+-54
+1,706
+227
+271
+717
+1,195
+2,538
+2,212
+-2,190
+563
+-542
+Companies accounted for under the equity method
+-112
+Income tax items are regularly assessed in particular against
+the backdrop of numerous changes in tax laws, tax regulations,
+legal decisions and ongoing tax audits. E.ON is responding to this
+circumstance, in particular through the application of IFRIC 23,
+by continuously identifying and assessing the tax environment
+and the resulting effects. The most current information is then
+incorporated into the estimate parameters necessary for mea-
+suring the tax provisions. Related potential interest rate effects
+are also assessed and measured accordingly. They are presented
+in separate items.
+Notes
+144
+(11) Personnel-Related Information
+Personnel Costs
+The following table provides details of personnel costs for the
+periods indicated:
+Personnel Costs
+€ in millions
+2019
+2018
+Wages and salaries
+3,301
+2,086
+Social security contributions
+436
+316
+Pension costs and other employee benefits
+Pension costs
+The following discussion includes reports on the E.ON Share
+Matching Plan introduced in 2013, on the multi-year bonus
+granted in 2015 and 2016 and on the E.ON Performance Plan
+introduced in 2017.
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation. The
+purpose of such compensation is to reward their contribution
+to E.ON's growth and to further the long-term success of the
+Company. This variable compensation component, comprising
+a long-term incentive effect along with a certain element of
+risk, provides for a sensible linking of the interests of shareholders
+and management.
+Long-Term Variable Compensation
+The voluntary employee stock purchase program, which through
+2015 provided employees of German Group companies the
+opportunity to purchase E.ON shares at preferential terms, was
+again suspended in 2019, as it had been from 2016 to 2018.
+Employee Stock Purchase Program
+The expenses for share-based payment in 2019 (the E.ON Share
+Matching Plan, the multi-year bonus and the E.ON Performance
+Plan) amounted to €21.2 million (2018: €21.9 million). Expenses
+of €10 million were also incurred in the 2019 reporting period
+in connection with innogy SE's share-based payment system.
+As of December 31, 2019, and December 31, 2018, E.ON
+reported deferred tax assets for companies that incurred losses
+in the current or the prior-year period that exceed the deferred
+tax liabilities by €74 million and €21 million, respectively. The
+basis for recognizing deferred tax assets is an estimate by manage-
+ment based on the development of temporary reversal effects
+and concrete tax structuring measures of the extent to which it
+is probable that the respective companies will achieve taxable
+earnings in the future against which the as yet unused tax losses,
+tax credits and deductible temporary differences can be offset.
+Share-Based Payment
+2,460
+4,101
+Total
+58
+53
+355
+364
+Personnel costs of €4,101 million were €1,641 million higher
+than the prior-year figure of €2,460 million, mainly because of
+the takeover of innogy. This also resulted in increased expenses
+from personnel reorganization.
+From 2013 to 2016, E.ON granted virtual shares to members of
+the Management Board of E.ON SE and certain executives of
+the E.ON Group under the E.ON Share Matching Plan. At the
+end of its four-year term, each virtual share is entitled to a cash
+payout linked to the final E.ON share price established at that
+time. The calculation inputs for this long-term variable compen-
+sation package are equity deferral, base matching and perfor-
+mance matching.
+Deferred tax assets were not recognized, or are no longer recog-
+nized, in the amount of €12,142 million (2018: €9,831 million) for
+temporary differences which are recognized in income and equity.
+Of the foreign tax loss carryforwards, a significant portion
+relates to previous years.
+-3
+-115
+-41
+7
+-34
+Total
+-1,334
+-26
+-1,360
+-623
+-62
+-685
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+143
+The preliminary purchase price allocation to the acquisition of
+innogy SE resulted in deferred tax assets of €655 million and
+deferred tax liabilities of €2,657 million as of December 31, 2019.
+The foreign tax loss carryforwards consist of corporate tax loss
+carryforwards amounting to €8,738 million (2018: €5,064 million)
+and tax loss carryforwards from local income taxes amounting
+to €65 million (2018: €402 million).
+Since January 1, 2004, domestic tax loss carryforwards can only
+be offset against a maximum of 60 percent of taxable income,
+subject to a full offset against the first €1 million. This minimum
+corporate taxation also applies to trade tax loss carryforwards.
+The domestic tax loss carryforwards result from adding corpo-
+rate tax loss carryforwards amounting to €162 million (2018:
+€495 million) and trade tax loss carryforwards amounting to
+€1,773 million (2018: €2,119 million).
+8,080
+10,738
+2018
+2,614
+5,466
+8,803
+Deferred taxes were not recognized, or no longer recognized,
+on a total of €7,813 million (2018: €4,006 million) in tax loss
+carryforwards that for the most part do not expire. Deferred
+tax assets were not recognized, or no longer recognized, on
+non-expiring domestic corporate tax loss carryforwards of
+€142 million (2018: €477 million) or on domestic trade tax
+loss carryforwards of €1,742 million (2018: €2,092 million).
+1,935
+2019
+€ in millions
+December 31,
+Tax Loss Carryforwards
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+In connection with the acquisition of the Swedish service pro-
+vider Coromatic, deferred tax assets of €4 million and deferred
+tax liabilities of €18 million resulted from the purchase price
+allocation as of December 31, 2019.
+Domestic tax loss carryforwards
+Foreign tax loss carryforwards
+Total
+Report of the Supervisory Board
+Strategy and Objectives
+241
+2,054
+15,414
+0
+44
+0
+0
+15,481
+19
+0
+0
+17,512
+216
+330
+3
+Notes
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+152
+15,481
+Acquisition and production costs
+E.ON Group
+0
+274
+612
+-84
+3
+-28,846
+35,832
+Non-Core Business
+Corporate Functions/
+innogy
+Renewables
+PreussenElektra
+Generation Turkey
+0
+19
+0
+Other
+179
+-179
+Changes in
+Exchange
+rate
+€ in millions
+-6
+-738
+824
+-739
+97
+2,303
+Development expenditures
+327
+-1
+-5
+14
+-30
+91
+396
+Advance payments
+2,865
+Concessions, commercial property rights, licenses, and
+similar rights
+541
+-47
+Goodwill
+Customer relationships and similar items
+Jan. 1, 2018
+differences
+scope of
+consolida-
+tion
+Dec. 31,
+Additions
+-1,619
+Disposals
+2018
+5,171
+-2
+-1,322
+3,847
+591
+-3
+Transfers
+438
+56
+-28,526
+-45
+2
+-1
+-3
+-43
+124
+-1
+2
+-204
+3
+-6
+-23
+-229
+3,109
+-58
+2
+2
+34
+-3
+-78
+1
+-2
+-20
+-100
+627
+-78
+1
+-3
+2,316
+-1
+-1
+-2
+8
+-1
+-2
+-81
+370
+5
+-54
+1
+-2
+-100
+34
+-6
+-10
+-680
+569
+-42
+-2
+9
+-16
+3
+-48
+2,577
+-597
+29,801
+-26,337
+-55
+831
+-1,710
+4
+37
+-102
+25
+20
+-2
+-1
+2,054
+-26,119
+53
+402
+-1,417
+210
+589
+-1,727
+-1
+0
+278
+1.3
+Cost of capital (in %) 3,4
+n/a
+7.6
+Other non-current assets5
+Impairment
+5
+Reversals
+1
+27
+38
+23
+4.0
+¹Recognized goodwill expected to be eliminated from the scope of consolidation soon.
+2Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal groups.
+³Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+4Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
+n/a
+5Other non-current assets consist of intangible assets and of property, plant and equipment.
+Growth rate (in %)3,4
+838
+845
+102
+Changes resulting from acquisitions and disposals
+-2
+Impairment charges
+Other changes²
+-5
+-31
+-7
+29
+Net carrying amount of goodwill as of December 31, 2018
+589
+90
+56
+152
+131
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+2
+39
+-1,793
+2,054
+-437
+-32
+47
+0
+-26
+-445
+96
+-1,300
+-3
+568
+-82
+-1,834
+2018
+Dec. 31,
+Dec. 31,
+2018
+153
+Accumulated depreciation
+Net carrying
+amounts
+Changes in
+Exchange
+scope of
+rate
+183
+consolida-
+differences
+tion
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+Jan. 1, 2018
+56
+97
+589
+-13
+3
+-31
+-2
+539
+Buildings
+3,060
+-20
+-270
+28
+-41
+40
+2,797
+Technical equipment, plant and machinery
+49,144
+-7
+589
+Real estate and leasehold rights
+Right-of-use assets
+-5
+-161
+370
+Intangible assets
+4,153
+-11
+-854
+-328
+1,116
+27
+3,610
+Land and buildings
+Networks
+Storage, e-charging and production capacities
+Technical equipment and machinery
+Fleet, office and business equipment
+-821
+-112
+-10,845
+-298
+2,578
+-612
+0
+40,491
+835
+1,921
+46,583
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2018
+Energy Networks
+Customer Solutions
+€ in millions
+Germany
+Sweden
+ECE/Turkey
+Germany Sales
+UK
+Other
+Net carrying amount of goodwill as of January 1, 2018
+-11,438
+-363
+56,418
+Property, plant and equipment
+1,637
+Other equipment, fixtures, furniture and office equipment
+951
+-4
+-33
+87
+-176
+1,181
+10
+progress
+2,674
+-4
+-277
+1,279
+-66
+-1,685
+Advance payments and construction in
+4,138
+-1,921
+-223
+-213
+379
+Intangible assets
+3,610
+14
+2,202
+1,489
+-884
+-372
+6,059
+Land and buildings
+361
+5
+282
+90
+-7
+-14
+218
+5
+-16
+446
+1,204
+-816
+-379
+2,742
+Development expenditures
+396
+13
+66
+-14
+259
+720
+Advance payments
+370
+6
+3
+727
+Networks
+26
+42
+-6
+1
+167
+Right-of-use assets¹
+870
+7
+2,117
+374
+-26
+-4
+3,338
+Real estate and leasehold rights
+539
+-1
+105
+Fleet, office and business equipment
+37
+387
+1
+1,778
+242
+-3
+-8
+2,397
+2,303
+Storage, e-charging and production capacities
+1
+-3
+10
+Technical equipment and machinery
+5
+1
+31
+12
+Concessions, commercial property rights, licenses, and
+similar rights
+2,218
+-39
+1,064
+286
+Less: Non-controlling interests
+-53
+-38
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+1,011
+248
+Net income/loss attributable to shareholders of E.ON SE
+1,566
+3,223
+in €
+Earnings per share (attributable to shareholders of E.ON SE)
+from continuing operations
+from discontinued operations
+Income/Loss from discontinued operations, net
+2,975
+555
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+(13) Earnings per Share
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+149
+Earnings per Share
+from net income/loss
+€ in millions
+2018
+Income/Loss from continuing operations
+744
+3,238
+Less: Non-controlling interests
+-189
+-263
+2019
+-1
+Weighted-average number of shares outstanding (in millions)
+The increase in the weighted-average number of shares out-
+standing resulted primarily from the capital increase carried out
+in September. As a result, E.ON increased the share capital from
+€2,201,099,000 to €2,641,318,800 through the majority utili-
+zation of its authorized capital via the issue of 440,219,800
+new, registered ordinary shares against a contribution in kind.
+3,847
+43
+scope of
+consolida-
+tion
+15,413
+Dec. 31,
+Additions
+Disposals
+Transfers
+2019
+19,303
+Customer relationships and similar items
+541
+12
+1,750
+1
+-47
+Goodwill
+differences
+Jan. 1, 2019
+€ in millions
+(14) Goodwill, Intangible Assets, Right-of-use
+Assets and Property, Plant and Equipment
+The changes in goodwill and intangible assets, in right-of-use
+assets, and in property, plant and equipment, are presented in
+the tables on the following pages:
+0.24
+1.37
+0.44
+0.12
+0.68
+The computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued no
+potentially dilutive ordinary shares.
+1.49
+2,167
+Notes
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment¹
+150
+Acquisition and production costs
+Changes in
+Exchange
+rate
+2,293
+353
+14
+-32
+consolida-
+Jan. 1, 2019
+differences
+tion
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+Dec. 31,
+2019
+Dec. 31,
+2019
+-1,793
+2
+-1,791
+rate
+scope of
+Exchange
+Changes in
+n/a
+5.9
+Other non-current assets4
+Impairment
+39
+63
+12
+17,512
+3
+¹Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+3Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
+4Other non-current assets consist of intangible assets, of right-of-use assets and of property, plant and equipment.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+151
+Accumulated depreciation
+Net carrying
+amounts
+Reversals
+Cost of capital (in %)2,3
+-445
+-93
+-357
+363
+-3
+0
+3
+-2
+-71
+-73
+306
+-1,448
+-3
+23
+-363
+106
+-13
+-10
+-44
+6
+-119
+47
+-1
+-128
+-625
+1,593
+-818
+10
+-5
+23
+50
+34
+-14
+-866
+1,876
+-185
+-5
+-151
+2
+0.5
+Growth rate (in %) 2,3
+310
+116
+-38
+24
+1,249
+Advance payments and construction in
+progress
+1,921
+-8
+875
+1,141
+-30
+-1,274
+2,625
+Property, plant and equipment²
+2
+835
+Other equipment, fixtures, furniture and office equipment
+56,138
+12
+885
+Buildings
+2,780
+925
+94
+-57
+46,272
+39
+Technical equipment, plant and machinery
+40,197
+-76
+14,193
+1,727
+-325
+422
+3,781
+n/a
+-83
+3,092
+112
+Changes resulting from acquisitions and disposals
+Impairment charges
+Other changes¹
+-2
+1
+43
+2
+Net carrying amount of goodwill as of December 31, 2019
+589
+88
+57
+152
+881
+245
+131
+838
+152
+56
+-482
+-777
+64,678
+¹New account due to IFRS16. Please see Note 32 for more information on rights of use.
+2The first-time application of IFRS 16 resulted in adjustments to the initial inventories (see Note 2).
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2019
+Energy Networks
+Customer Solutions
+16,656
+€ in millions
+Sweden
+ECE/Turkey Germany Sales
+UK
+Other
+Net carrying amount of goodwill as of January 1, 2019
+589
+90
+Germany
+-1
+3
+3
+Proportional share of net income from continuing operations
+2018
+2019
+2018
+2019
+2018
+2019
+€ in millions
+Total
+Joint ventures
+Associates
+Summarized Financial Information for Individually Non-Material Associates and Joint Ventures Accounted for
+under the Equity Method
+The following table summarizes significant line items of the aggre-
+gated statements of comprehensive income of the associates and
+joint ventures that are accounted for under the equity method:
+Investment income generated from companies accounted for
+under the equity method amounted to €330 million in 2019
+(2018: €235 million). The increase results in particular from the
+increased dividend paid by Nord Stream AG and the initial inclu-
+sion of the equity interests of innogy SE.
+The carrying amounts of the immaterial associates accounted
+for under the equity method totaled €1,905 million (2018:
+€363 million), and those of the joint ventures totaled €896 million
+(2018: €102 million). The increase resulted primarily from the
+addition of the equity interests of innogy SE.
+88
+Shares in Companies Accounted for under the
+Equity Method
+68
+46
+Report of the Supervisory Board
+Strategy and Objectives
+109
+202
+41
+114
+68
+88
+Proportional share of total comprehensive income
+-5
+1
+-5
+1
+Proportional share of other comprehensive income
+114
+201
+113
+Impairments on other financial assets amounted to €15 million
+(2018: €30 million). The carrying amount of other financial
+assets with impairment losses was €22 million as of the end of
+the fiscal year (2018: €16 million).
+In 2019, impairment charges on companies accounted for under
+the equity method amounted to €3 million (2018: €7 million).
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+1,952
+3,280
+5,232
+Companies accounted for under the equity method
+Joint
+ventures¹
+Associates¹
+E.ON Group
+ventures¹
+Associates¹
+E.ON Group
+€ in millions
+December 31, 2018
+December 31, 2019
+Joint
+156
+Companies Accounted for under the Equity Method and Other Financial Assets
+2,603
+Equity investments
+1,730
+556
+Companies accounted for under the equity method consist
+solely of associates and joint ventures.
+1The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+1,202
+1,671
+5,507
+2,107
+3,836
+Combined Group Management Report
+9,315
+2,240
+2,353
+Non-current securities
+1,182
+20
+1,421
+250
+664
+155
+Total
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+157
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of compre-
+hensive income of the material companies accounted for under
+the equity method. The material associates in the E.ON Group
+are RheinEnergie AG, Rampion Renewables Limited, GASAG
+Berliner Gaswerke AG and, until its sale to E.ON Pension Trust e.V.
+the end of December 2019, Nord Stream AG. PEGI, as parent
+company of Nord Stream AG, was sold to E.ON Pension Trust e.V.
+36.85
+Proportional share of total comprehensive
+income after taxes
+10
+12
+80
+80
+-9
+16
+Proportional share of net income after taxes
+6
+-7
+70
+67
+11
+36.85
+15.50
+15.50
+39.931
+Other comprehensive income
+19
+48
+63
+82
+-56
+5
+11
+Total comprehensive income
+-6
+514
+516
+-25
+43
+Ownership interest (in %)
+20.00
+48
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+Consolidation adjustments
+-2
+Non-current assets¹
+2018
+2019
+2018
+2019
+GASAG Berliner
+Gaswerke AG
+Nord Stream AG
+Ltd.
+2018
+2019
+RheinEnergie AG
+2018
+2019
+€ in millions
+Rampion Renewables
+Material Associates-Balance Sheet Data as of December 31
+The Group adjustments shown in the table mainly relate to
+goodwill determined as part of initial recognition, temporary
+differences, changes in ownership interests, exchange-rate
+effects and effects from the elimination of intragroup profits.
+3,419
+672
+5,775
+1,882
+Equity-method earnings
+6
+-1
+70
+65
+11
+11
+6
+¹Rampion Renewables Ltd. holds 50,1 percent on Rampion Offshore Wind Ltd.
+237
+230
+801
+31
+577
+Current assets
+1,775
+Notes
+(15) Companies Accounted for under the Equity
+Method and Other Financial Assets
+Notes
+In addition, write-downs on property, plant and equipment in
+the amount of €84 million (2018: €49 million) were made in the
+year under review. Reversals of impairments on property, plant
+and equipment in the amount of €3 million (2018: €33 million)
+were recognized in the reporting year.
+137
+-33
+-67
+-55
+-106
+-108
+Write-downs
+-250
+-246
+-51
+-53
+Interest income/expense
+-54
+-95
+-16
+111
+143
+875
+981
+40
+43
+438
+451
+618
+629
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+65
+2019
+2019
+2018
+€ in millions
+Sales
+Net income/loss from continuing operations
+2,910
+3,029
+2018
+11
+Income taxes
+71
+-260
+Proportional share of net income after taxes
+57
+44
+69
+-17
+3
+8
+5
+Consolidation adjustments
+60
+52
+74
+-17
+Equity-method earnings
+-16
+-98
+12
+Proportional share of total comprehensive income after taxes
+65
+-113
+-355
+-170
+-486
+Other comprehensive income
+31
+Dividend paid out
+-244
+-519
+Total comprehensive income
+Ownership interest (in %)
+40.00
+40.00
+50.00
+50.00
+-33
+13
+12
+578
+Non-current liabilities (including provisions)
+Cash and cash equivalents
+Current financial liabilities
+Non-current financial liabilities
+Equity
+Ownership interest (in %)
+Proportional share of equity
+Consolidation adjustments
+Carrying amount of equity investment
+Material Joint Ventures-Earnings Data
+158
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+2019
+2018
+2019
+Current liabilities (including provisions)
+Current assets
+Non-current assets
+€ in millions
+Depreciation amounted to €1,619 million in 2019 (2018:
+€1,452 million).
+Borrowing costs in the amount of €13 million were capitalized
+in 2019 (2018: €12 million) as part of the historical cost of
+property, plant and equipment.
+Most of the change results from the takeover of innogy.
+Scheduled depreciation amounted to €204 million in 2019.
+Impairments on right-of-use assets amounted to €23 million.
+Property, Plant and Equipment
+Right-of-use Assets
+€68 million in research and development costs as defined by
+IAS 38 were expensed in 2019 (2018: €2 million).
+The closing balance of intangible assets not subject to amorti-
+zation as of December 31, 2019, amounted to €299 million.
+2018
+Reversals of impairments on intangible assets in the amount of
+€0 million (2018: €3 million) were recognized in the reporting
+year.
+Most of the change results from the takeover of innogy.
+Intangible Assets
+Reversals of impairments on property, plant and equipment
+and intangible assets recognized in previous years amounted to
+€36 million in 2018, significantly influenced by developments
+in Hungary.
+Impairments on intangible assets amounted to approximately
+€66 million in 2018. Developments in the retail customer busi-
+ness at E.ON Business Solutions in the UK (around €26 million)
+and the impairment of capitalized IT costs at the holding com-
+pany (around €16 million) had the greatest impact.
+In fiscal year 2018, a total of €49 million in impairments
+was charged to property, plant and equipment, primarily from
+€20 million in impairments in the UK.
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income state-
+ments of the joint ventures accounted for under the equity
+method, Enerjisa Enerji A.Ş. and Enerjisa Üretim Santralleri A.Ş.
+Material Joint Ventures-Balance Sheet Data as of December 31
+In 2019, the Company recorded an amortization expense of
+€363 million (2018: €186 million). Impairment charges on
+intangible assets amounted to €223 million (2018: €66 million).
+586
+2,678
+1,980
+337
+850
+1,015
+604
+879
+1,065
+1,100
+1,156
+1,171
+40.00
+40.00
+50.00
+50.00
+426
+440
+319
+563
+560
+180
+2,233
+865
+1,056
+299
+331
+1,097
+1,235
+2,820
+467
+1,381
+1,541
+656
+888
+70
+93
+146
+505
+29
+30
+667
+3,830
+-1,297
+203
+-20
+-15
+33
+-658
+2
+19
+-81
+120
+169
+2
+9
+29
+24
+-31
+-59
+-1,711
+-26,118
+-596
+-42
+480
+1,086
+14,373
+239
+-31,666
+187
+-73
+334
+-29,021
+-1
+0
+2
+1
+-5
+370
+-1,904
+-1
+626
+-186
+81
+-1
+-3
+-66
+2,162
+-72
+3
+1
+-1
+10
+-1,842
+13
+166
+-73
+29
+-1,448
+4,025
+-1,452
+391
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units.
+Because, with the exception of the inclusion of the interest in
+Nord Stream in the CTA, there were no binding sales transactions
+or market prices for the respective cash-generating units in
+2019, fair values were otherwise calculated based on discounted
+cash flow methods.
+IFRS 3 prohibits the amortization of goodwill. Instead, goodwill
+is tested for impairment at least annually at the level of the
+cash-generating units. Goodwill must also be tested for impair-
+ment at the level of individual cash-generating units between
+these annual tests if events or changes in circumstances indicate
+that the recoverable amount of a particular cash-generating
+unit might be impaired. Intangible assets subject to amortization
+and property, plant and equipment must generally be tested
+for impairment whenever there are particular events or external
+circumstances indicating the possibility of impairment.
+Impairments
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 150 through 153.
+Goodwill and Non-Current Assets
+154
+Notes
+36
+0
+9
+115
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for
+impairment-testing purposes are generally based on the three
+planning years of the medium-term plan plus two additional
+detailed planning years. In certain justified exceptional cases, a
+longer detailed planning period is used as the calculation basis.
+The cash flow assumptions extending beyond the detailed plan-
+ning period are determined using growth rates that generally
+correspond to the growth rates in each of the currency areas
+where the cash-generating units are tested. In 2019, the inflation
+rate used for the euro area was 0.5 percent (2018: 1.25 percent).
+23
+21
+2,054
+179
+0
+-1,281
+0
+0
+19
+-1,267
+-2
+3,337
+0
+The interest rates used for discounting cash flows in the annual
+impairment test are calculated using market data for each cash-
+generating unit, and as of December 31, 2019, ranged between
+3.3 and 7.1 percent after taxes (2018: 3.5 and 8.7 percent).
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective forecasts
+for commodity market prices, future electricity and gas prices
+in the wholesale and retail markets, E.ON's investment activity,
+changes in the regulatory framework, as well as for rates of
+growth and the cost of capital. These assumptions are based on
+external market data from established providers and on internal
+estimates.
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment, and of groups of these assets. If the goodwill of a
+cash-generating unit is combined with assets or groups of
+assets for impairment testing, the assets must be tested first.
+5
+-49
+33
+-28,526
+1,879
+18,057
+innogy
+0
+Non-Core Business
+Renewables
+PreussenElektra
+Generation Turkey
+Corporate Functions/
+Other¹
+E.ON Group
+1,286
+0
+Reversals of impairments on property, plant and equipment
+and intangible assets recognized in previous years amounted to
+around €3 million in 2019, significantly influenced by the posi-
+tive outcome of litigation in the UK.
+In fiscal year 2019, a total of €23 million in impairments was
+charged to right-of-use assets. About €19 million again resulted
+from the restructuring at innogy in the UK.
+Approximately €223 million of impairments were recognized
+on intangible assets. The largest effect in terms of amount
+(€159 million) arose at innogy, again mainly from business in
+the UK for the reasons outlined above. Impairments were recog-
+nized in particular for IT infrastructure in the private customer
+segment. E.ON's UK business was also impacted, with around
+€55 million. Impairments were recognized primarily on IT projects
+that are currently being discontinued because of a management
+decision, with the result that they are no longer expected to
+generate any economic advantages.
+155
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Impairments of property, plant and equipment in 2019 totaled
+around €84 million, of which around €38 million were in the
+German network business, mainly in connection with the decom-
+missioning of a gas storage facility, and also around €38 million
+for innogy, primarily due to the optimization and restructuring
+of the joint UK business of innogy and E.ON. In this connection,
+an impairment loss was recognized for several innogy buildings
+in the UK.
+The tested goodwill of all cash-generating units whose respec-
+tive goodwill as of the balance sheet date is material in relation
+to the total carrying amount of all goodwill shows a surplus of
+recoverable amounts over the respective carrying amounts and,
+therefore, based on current assessment of the economic situa-
+tion, only a significant change in the material valuation parame-
+ters would necessitate the recognition of goodwill impairment.
+As in 2018, the goodwill impairment testing performed in 2019
+resulted in the recognition of no impairment charges.
+57
+179
+-1
+39.93
+Ltd.
+RheinEnergie AG
+Rampion Renewables
+Material Associates-Earnings Data
+¹Undisclosed accruals/provisions from acquisitions are recognized in assets.
+362
+342
+457
+462
+571
+Carrying amount of equity investment
+Nord Stream AG
+80
+10
+181
+166
+Consolidation adjustments
+282
+248
+447
+281
+405
+Proportional share of equity
+36.85
+94
+36.85
+GASAG Berliner
+Gaswerke AG
+2019
+42
+Dividend paid out
+Net income from discontinued operations
+9
+4
+Non-controlling interests in the net income/
+loss from continuing operations
+39
+31
+434
+451
+-18
+€ in millions
+29
+1,197
+2018
+2019
+1,253
+2018
+1,074
+1,074
+694
+Sales
+2019
+2018
+2019
+2018
+Net income/loss from continuing operations
+15.50
+0
+20.00
+-819
+1,484
+-113
+1
+-54
+-72
+30
+-1
+-29
+-184
+212
+Current liabilities (including provisions)
+563
+542
+358
+392
+1,410
+Ownership interest (in %)
+70
+24
+Non controlling interests
+Non-current liabilities (including provisions)
+674
+2,884
+841
+2,023
+Equity
+813
+896
+3,300
+703
+138
+2019
+2018
+Amortization and impairment
+176
+Balance as of December 31
+Cash and cash equivalents include €1,880 million (2018:
+€2,881 million) in checks, cash on hand and balances at financial
+institutions with an original maturity of less than three months,
+to the extent that they are not restricted.
+165
+1,197
+Securities and fixed-term deposits
+2018
+2019
+€ in millions
+December 31,
+386
+In 2019, there was €49 million in restricted cash (2018:
+€17 million) with a maturity greater than three months.
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+(18) Liquid Funds
+161
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Liquid Funds
+774
+1,901
+In addition, the E.ON Group had no contingent assets as of
+December 31, 2019, as in the prior year.
+62
+Total
+1,252
+684
+Notes
+(17) Receivables and Other Assets
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+Receivables and Other Assets
+160
+December 31, 2019
+December 31, 2018
+€ in millions
+Current
+Non-current
+Current
+Non-current
+Receivables from finance leases¹
+50
+320
+38
+291
+Other financial receivables and financial assets
+440
+383
+379
+Work in progress and finished products
+199
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+159
+The material associates and the material joint ventures are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests
+as required by IFRS 12 for material joint arrangements and
+associates can be found in the list of shareholdings pursuant
+to Section 313 (2) HGB (see Note 37).
+As of December 31, 2019, the investment in Enerjisa Enerji A.Ş. is
+marketable. The pro rata market value amounted to €522 million
+as of December 31, 2019 (2018: €398 million). The carrying
+amount is €438 million as of December 31, 2019.
+Of investments in associates, the shareholding in companies
+with a carrying amount of €573 million (2018: €457 million)
+are restricted because it was pledged as collateral for financing
+as of the balance sheet date.
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+(16) Inventories
+The following table provides a breakdown of inventories as of
+the dates indicated:
+Inventories
+The cost of raw materials, finished products and goods purchased
+for resale is determined based on the average cost method.
+Write-downs totaled €5 million in 2019 (2018: €9 million).
+Reversals of write-downs amounted to €17 million in 2019
+(2018: €14 million).
+The increase in inventories compared to December 31, 2018, is
+primarily due to the acquisition of innogy.
+€ in millions
+2019
+December 31,
+2018
+Raw materials and supplies
+670
+511
+€ in millions
+No inventories have been pledged as collateral.
+Goods purchased for resale
+111
+246
+136
+Financial receivables and other financial assets
+14,319
+3,593
+5,445
+1,474
+14,809
+4,292
+5,729
+¹See also Note 32.
+Receivables arising from IFRS 15 primarily consist of trade
+receivables. Impairments on receivables arising from IFRS 15
+totaled €0.3 billion in 2019 (2018: €0.2 billion).
+As of December 31, 2019, other financial assets include receiv-
+ables from owners of non-controlling interests in jointly owned
+power plants of €74 million (2018: €53 million).
+The increase in other operating assets compared to December 31,
+2018, is primarily due to the acquisition of innogy. In addition,
+a purchase price receivable in the amount of €1.1 billion is due
+from E.ON Pension Trust e.V. from the sale of shares in PEG
+Infrastruktur AG and its interest in Nord Stream AG as of
+December 31, 2019.
+Other assets under IFRS 15 changed as follows:
+The following table shows the opening and closing balances of
+contractual assets under IFRS 15:
+Contract Assets
+€ in millions
+Balance as of January 1
+Balance as of December 31
+2019
+2018
+10
+9
+24
+10
+The increase in contractual assets is mainly due to the takeover
+of innogy.
+Trade receivables and other operating assets
+Total
+112
+1,199
+835
+490
+699
+284
+427
+Trade receivables
+8,438
+3,896
+Contract assets
+907
+2,378
+324
+Other Assets
+1,213
+Receivables from derivative financial instruments
+Other operating assets
+16
+8
+3
+7
+14
+372
+23
+142
+4,944
+Other assets
+Current securities with an original
+4,776
+1,197
+68
+125
+120
+19,509
+Current liabilities
+75
+82
+9
+11
+411
+433
+4,610
+Non-current liabilities
+236
+66
+192
+79
+103
+97
+8,957
+Current assets
+64
+1,621
+91
+¹Holding companies without operational business.
+54
+47
+36
+26
+10
+-122
+non-controlling interests
+Share of earnings attributable to
+€ in millions
+Avacon AG¹
+2018
+2019
+2018
+2019
+2018
+2019
+2018
+2019
+E.DIS AG¹
+Delgaz Grid S.A.
+innogy SE
+Subsidiaries with Material Non-Controlling Interests-Earnings Data
+257
+24
+1,649
+1,622
+Non-controlling interests in equity (in %)
+557
+562
+517
+523
+311
+313
+487
+Non-controlling interests in equity
+2018
+2019
+2018
+2019
+2018
+2019
+2018
+2019
+€ in millions
+Avacon AG1
+E.DIS AG¹
+Delgaz Grid S.A.
+10,0
+1,483
+43,5
+33,0
+1,053
+1,081
+19,104
+Non-current assets
+-97
+-63
+-42
+44
+104
+105
+-550
+Operating cash flow
+58
+50
+33
+30
+86
+Dividends paid out to non-controlling interests
+38,5
+38,5
+33,0
+43,5
+innogy SE
+From the perspective of the Group, however, the benefit plans
+are relatively insignificant in the above-mentioned countries.
+The remaining pension obligations are divided between Belgium,
+the Netherlands, Luxembourg, Sweden, Italy, Poland, Romania,
+the Czech Republic and the USA.
+166
+(24) Provisions for Pensions and Similar
+Obligations
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €28.8 billion,
+were covered by plan assets having a fair value of €21.6 billion
+as of December 31, 2019. This corresponds to a funded status
+of 75 percent.
+The present value of the defined benefit obligations, the fair
+value of plan assets and the net defined benefit liability (funded
+status) are presented in the table below. A significant component
+of the change compared to December 31, 2018, is the first-time
+consolidation of the innogy companies, which is presented under
+Changes in scope of consolidation in the tables below on the
+development of the present value, the fair value of the plan assets
+and the net liability.
+Provisions for Pensions and Similar Obligations
+€ in millions
+Present value of all defined benefit obligations
+Germany
+United Kingdom
+Other countries
+Total
+Fair value of plan assets
+Germany
+United Kingdom
+Other countries
+Total
+Net defined benefit liability/asset (-)
+Germany
+United Kingdom
+Other countries
+Total
+Notes
+2019
+There are no major restrictions beyond those under customary
+corporate or contractual provisions.
+84
+379
+390
+6
+2
+11
+12
+Net income/loss
+-1,007
+24
+61
+110
+134
+148
+87
+Comprehensive Income
+-908
+5
+61
+109
+132
+149
+¹Holding companies without operational business.
+The defined benefit plan in the Netherlands consists of commit-
+ments made by various employers within the framework of a
+sector-specific fund and does not permit a pro rata allocation of
+the obligations, plan assets and service cost. The E.ON Group
+accordingly accounts for this obligation as a defined contribution
+plan. There are no minimum funding requirements in this respect.
+Benefits may be reduced or contributions increased if there is
+insufficient funding.
+December 31,
+2018
+10,180
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+167
+Description of the Benefit Plans
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning, most
+active and former E.ON Group employees are also covered by
+occupational benefit plans. Both defined benefit plans and defined
+contribution plans are in place at E.ON. Benefits under defined
+benefit plans are generally paid upon reaching retirement age,
+or in the event of disability or death.
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates, as well
+as inflation developments and rising wages and salaries.
+The existing entitlements under defined benefit plans as of the
+balance sheet date cover about 71,000 retirees and their bene-
+ficiaries (2018: 47,000), about 18,000 former employees with
+vested entitlements (2018: 14,000) and about 50,000 active
+employees (2018: 28,000). The corresponding present value of
+the defined benefit obligations is attributable to retirees and their
+beneficiaries in the amount of €15.7 billion (2018: €9.2 billion),
+to former employees with vested entitlements in the amount of
+€3.4 billion (2018: €2.4 billion) and to active employees in the
+amount of €9.7 billion (2018: €3.7 billion).
+The features and risks of defined benefit plans are shaped by
+the general legal, tax and regulatory conditions prevailing in
+the respective country. The configurations of the major defined
+benefit and defined contribution plans within the E.ON Group
+are described in the following discussion.
+Germany
+Active employees at the German Group companies are covered by
+both cash balance plans and pension plans based on final salary.
+Pension plans based on final salary are closed to new hires. All
+new hires will receive cash balance plans in accordance with
+a capital or pension module system, which, depending on the
+pension plan, can provide for alternative payout options of a
+prorated single payment and payments of installments in addi-
+tion to the payment of a regular pension. The cash balance plans
+use different interest rules. Depending on the underlying pension
+plan, either interest rates adjusted to market developments
+with a fixed lower limit or guaranteed interest rates are used to
+determine the capital or pension modules. The benefit expense
+for the cash balance plans is determined at different percentage
+rates based on the ratio between compensation and the con-
+tribution limit in the statutory retirement pension system in
+Germany. Employees can additionally choose to defer compen-
+sation. Future pension adjustments are either guaranteed at
+1 percent per annum or largely track the development of the
+inflation rate, usually in a three-year cycle.
+To fund the pension plans for the German Group companies, plan
+assets were established. The major part of these plan assets is
+administered in the form of Contractual Trust Arrangements
+("CTAS") in accordance with specified investment principles. There
+are additional plan assets available through the implementation
+channels of the pension fund ("Pensionsfonds") and smaller
+German pension vehicles ("Pensions- und Unterstützungskassen").
+Only the pension fund and the "Pensionskassen" vehicles are
+subject to regulatory provisions in relation to the investment of
+capital and funding requirements.
+Notes
+168
+United Kingdom
+In the United Kingdom, there are various pension plans. In the
+past, employees were covered by defined benefit plans, which
+for the most part were final-pay plans and make up the majority
+of the pension obligations currently reported for the United
+Kingdom. Benefit payments to the beneficiaries are adjusted for
+inflation on a limited basis. These pension plans were closed
+to new hires. Since then, new hires are offered a defined contri-
+bution plan. Aside from the payment of contributions, this plan
+entails no additional risks for the employer.
+Plan assets in the United Kingdom are administered by inde-
+pendent trustees for E.ON UK and innogy UK, respectively, in
+independent special-purpose sections of the Electricity Supply
+Pension Scheme (ESPS). The trustees are selected by the mem-
+bers of the plan or appointed by the respective entity. In that
+capacity, the trustees are particularly responsible for the invest-
+ment of the plan assets.
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding status be
+performed every three years. The actuarial assumptions under-
+lying the valuation are agreed upon by the trustees and the
+entities. They include presumed life expectancy, wage and sal-
+ary growth rates, investment returns, inflationary assumptions
+and interest rate levels.
+E.ON UK's most recent completed technical valuation took place
+as of March 31, 2018, and resulted in a technical funding deficit
+of £502 million. In the framework of the agreed deficit repair
+plan, in 2019 payments of £299 million were made. Depending on
+the future remeasurement of the technical deficit on March 31,
+2021, two payments of a maximum of £92 million to the Pen-
+sion Trust are planned in 2022 and 2023.
+The most recent technical valuation for the entire innogy section
+was completed on March 31, 2016. The innogy section was
+split into two sections (Retail section and innogy section) at the
+beginning of 2018 in preparation for the originally planned
+merger of the UK retail activities with Scottish energy supplier
+SSE. An agreement was reached with RWE in the context of the
+innogy takeover that the innogy section will be transferred to
+RWE in the course of 2020. For this reason, it is not part of the
+benefit obligation described above. The technical funding deficit
+of the Retail section relevant to the E.ON Group was in the low
+double-digit million range at the time the overall plan was split.
+The technical financing status of the retail section will be
+remeasured as of the measurement date of March 31, 2019.
+This had not yet been concluded as of the balance sheet date.
+Other Countries
+3,247
+22,483
+6,222
+7,201
+Presented as operating receivables
+5,080
+49
+41
+28,754
+15,301
+15,471
+7,164
+6,154
+4,880
+9
+10
+21,634
+12,054
+7,012
+3,016
+68
+200
+40
+31
+7,120
+3,247
+Presented as provisions for pensions and similar obligations
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data as of December 31
+flow items. The list of shareholdings pursuant to Section 313 (2)
+HGB (see Note 37) contains information on the registered office
+of the company and disclosures on equity interests.
+In compliance with IFRS 12, the following tables include sub-
+sidiaries with significant non-controlling interests and provide an
+overview of significant items on the aggregated balance sheet
+and on the aggregated income statement, and significant cash
+RWE Aktiengesellschaft, Essen,
+Germany¹
+116,368,320
+4,41
+indirect
+111,607,922
+5,073
+direct
+Jul. 23, 2019
+Sep. 19, 2019
+under
+5%
+Sep. 24, 2019
+BlackRock Inc., Wilmington, USA
+over
+5%
+Jul. 30, 2019
+Capital Income Builder,
+Wilmington, USA
+68,831,843
+3,133
+direct/indirect
+Sep. 27, 2018
+over
+Oct. 2, 2019
+3%
+15%
+Oct. 1, 2019
+Total
+Other retained earnings
+Legal reserves
+€ in millions
+Retained Earnings
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+(21) Retained Earnings
+in connection with the capital increase through contributions
+in kind (using the existing authorized capital), which exceeds
+the nominal value of the new E.ON SE shares issued
+(€440,219,800).
+Additional paid-in capital rose to €13,368 million (2018:
+€9,862 million) as of December 31. The change of €3.5 billion
+results mainly from the valuation of innogy SE shares received
+(20) Additional Paid-in Capital
+¹Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: GBV Vierunddreißigste Gesellschaft für Beteiligungsverwaltung mbH.
+²Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: Capital Income Builder.
+³Notification before the increase of the share capital on September 19, 2019.
+10,16 268,341,921
+indirect
+Oct. 1, 2019
+over
+10%
+Oct. 4, 2019
+The Capital Group Companies Inc.,
+Los Angeles, USA²
+396,197,820
+15,00
+indirect
+exceeded
+December 31,
+2018
+Oct. 4, 2018
+Canada Pension Plan Investment
+Subject to the Supervisory Board's approval, the Management
+Board is authorized to exclude shareholders' subscription rights.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 10, 2017, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 9, 2022, the Company's capital stock by a total of up
+to €460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in
+kind (authorized capital pursuant to Sections 202 et seq. AktG,
+Authorized Capital 2017).
+Authorized Capital
+162
+Notes
+Neither a scrip dividend nor an employee stock purchase program
+was offered in the 2019 fiscal year.
+The Company has further been authorized by the Annual Share-
+holders Meeting to buy shares using put or call options, or a
+combination of both. When derivatives in the form of put or call
+options, or a combination of both, are used to acquire shares,
+the option transactions must be conducted with a financial insti-
+tution or a company operating in accordance with Section 53 (1)
+sentence 1 or Section 53b (1) sentence 1 or 7 of the German
+Banking Act (KWG) or at market terms on the stock exchange.
+No shares were acquired in 2019 using this purchase model.
+without requiring a separate shareholder resolution for the can-
+cellation or its implementation. The total number of outstanding
+shares as of December 31, 2019, was 2,607,369,233 (Decem-
+ber 31, 2018: 2,167,149,433). As of December 31, 2019, E.ON SE
+held a total of 33,949,567 treasury shares (December 31, 2018:
+33,949,567) having a book value of €1,126 million (equivalent to
+approximately 1.29 percent or €33,949,567 of the capital stock).
+Pursuant to a resolution by the Annual Shareholders Meeting
+of May 10, 2017, the Company is authorized to purchase own
+shares until May 9, 2022. The shares purchased, combined with
+other treasury shares in the possession of the Company, or
+attributable to the Company pursuant to Sections 71a et seq.
+AktG, may at no time exceed 10 percent of its capital stock. The
+Management Board was authorized at the aforementioned
+Annual Shareholders Meeting to cancel any shares thus acquired
+The capital stock is subdivided into 2,641,318,800 registered
+shares with no par value (no-par-value shares) and amounts to
+€2,641,318,800 (2018: €2,201,099,000). The capital stock of
+the Company was provided by way of conversion of E.ON AG
+into a European Company (SE), through a capital increase carried
+out on March 20, 2017, partially using the Authorized Capital
+2012, which expired on May 2, 2017, and through a capital
+increase registered in the commercial register of the Company
+on September 19, 2019, with majority use of the Authorized
+Capital 2017.
+(19) Capital Stock
+5,357
+3,602
+Total
+3,924
+1,894
+Cash and cash equivalents
+659
+511
+Restricted cash and cash equivalents
+774
+By the resolution that took effect on March 12, 2018, and that
+was clarified by the Management Board on September 18, 2019,
+the Management Board resolved, with the approval of the Super-
+visory Board, to make almost full use of the Authorized Capital
+2017 resolved by the Annual Shareholders Meeting of May 10,
+2017, and to increase the share capital of E.ON SE, excluding
+shareholder subscription rights, in accordance with Sections
+203 (2) and 186 (3) of the German Stock Corporation Act (AktG),
+from €2,201,099,000 by €440,219,800 to €2,641,318,800
+through the issue of 440,219,800 new registered shares
+with no par value, against contributions in kind. The Executive
+Committee approved this use of the Authorized Capital on
+September 18, 2019.
+Board, Toronto, Canada
+Only RWE Downstream Beteiligungs GmbH, with its registered
+office in Essen and registered in the commercial register of
+Essen District Court under number HRB 26911, was permitted
+to subscribe for and acquire the new shares. RWE Downstream
+Beteiligungs GmbH is a wholly-owned subsidiary of RWE AG. It
+was merged into GBV Vierunddreißigste Gesellschaft für Beteil-
+igungsverwaltung mbH, another wholly-owned subsidiary of
+RWE AG, with effect from December 4, 2018. The object of the
+contribution in kind is the contribution of a total of 100,714,051
+no-par-value bearer shares (shares without par value) in innogy SE,
+Essen, registered in the Commercial Register of Essen District
+Court under number HRB 27091, with a pro rata amount of the
+share capital of €2.00 each by way of transfer of ownership to
+E.ON SE. With the approval of the Supervisory Board, the Manage-
+ment Board has made use of the option granted to it by the
+Annual Shareholders Meeting to exclude subscription rights in
+the case of capital increases against contributions in kind. The
+capital increase and its implementation were entered in the
+commercial register on September 19, 2019. The remaining
+Authorized Capital 2017 totals €19.8 million.
+Absolute
+Percentages
+Allocation
+Voting rights
+Gained voting
+rights on
+Over and
+under
+Threshold
+Date of notice
+Reporting entity
+163
+Other Information
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Report of the Supervisory Board
+Strategy and Objectives
+Information on Stockholders of E.ON SE
+The following notices pursuant to Section 33 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+Voting Rights
+The Conditional Capital 2017 was not used.
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise
+by holders of option or conversion rights, and those arising from
+compliance with the mandatory conversion of bonds with con-
+version or option rights, profit participation rights or profit par-
+ticipating bonds that have been issued or guaranteed by E.ON SE
+or a Group company of E.ON SE as defined by Section 18 AktG
+under the authorization approved by the Annual Shareholders
+meeting of May 10, 2017, under agenda item 9, and to the
+extent that no cash settlement has been granted in lieu of con-
+version or exercise of an option.
+The conditional capital increase will be used to grant registered
+no-par-value shares to the holders of convertible bonds or bonds
+with warrants, profit participation rights or income bonds (or
+combinations of these instruments), in each case with option
+rights, conversion rights, option obligations and/or conversion
+obligations, which are issued by the Company or a Group com-
+pany of the Company as defined by Section 18 of the German
+Stock Corporation Act (AktG), under the authorization approved
+by the Annual Shareholders Meeting on May 10, 2017, under
+agenda item 9, through May 9, 2022. The new shares will be
+issued at the conversion or option price to be determined in
+accordance with the authorization resolution.
+At the Annual Shareholders Meeting of May 10, 2017, share-
+holders approved a conditional increase of the capital stock (with
+the option to exclude shareholders' subscription rights) in the
+amount of up to €175 million.
+Conditional Capital
+Sales
+2019
+45
+45
+Currency translation
+adjustments
+securities
+Cash flow hedges
+Balance as of January 1, 2018
+€ in millions
+Available-for-sale
+Share of OCI Attributable to Non-Controlling Interests
+innogy
+2,760
+4,008
+284
+267
+Corporate Functions/Other
+E.ON Group
+-57
+Non-Core Business
+663
+7
+Renewables
+2,025
+83
+77
+Remeasurements of
+defined benefit plans
+Other
+-1
+-201
+165
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+-221
+-82
+1
+1
+Balance as of December 31, 2019
+28
+47
+1
+1
+Changes
+-249
+-129
+Balance as of December 31, 2018
+-48
+-7
+1
+Changes
+-122
+2
+2
+UK
+Balance as of December 31 (after taxes)
+3
+-1
+-1,441
+-1,552
+2018
+2019
+Balance as of December 31 (before taxes)
+Taxes
+€ in millions
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method.
+The change in other comprehensive income is primarily the
+result of exchange rate differences recognized on the balance
+sheet.
+(22) Changes in Other Comprehensive Income
+164
+Notes
+Under German securities law, E.ON SE shareholders may
+receive distributions from the balance sheet profit of E.ON SE
+reported as available for distribution in accordance with the
+German Commercial Code.
+A proposal to distribute a cash dividend for 2019 of €0.46 per
+share will be submitted to the Annual Shareholders Meeting. For
+2018, shareholders at the May 14, 2019, Annual Shareholders
+Meeting voted to distribute a dividend of €0.43 for each dividend-
+paying ordinary share. Based on a €0.46 dividend, the total profit
+distribution is €1,199 million (2018: €932 million).
+The amount of retained earnings available for distribution is
+€2,086 million (2018: €2,400 million).
+As of December 31, 2019, these German-GAAP retained earnings
+totaled €2,254 million (2018: €2,554 million). Of this amount,
+legal reserves of €45 million (2018: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG.
+-2,506
+-2,461
+-1,942
+-1,897
+-1,553
+-1,438
+(23) Non-Controlling Interests
+Non-controlling interests by segment as of the dates indicated
+are shown in the table at right.
+-1
+6
+Germany
+84
+85
+Customer Solutions
+311
+311
+ECE/Turkey
+Sweden
+maturity greater than 3 months
+1,418
+1,729
+1,681
+2018
+2019
+December 31,
+Germany
+€ in millions
+Energy Networks
+Non-Controlling Interests
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests:
+The increase in non-controlling interests in the Non-Core
+Business resulted primarily from the acquisition of innogy. The
+transfer of significant portions of the Renewables business to
+RWE has an offsetting effect.
+1,370
+-81
+The following table lists the miscellaneous provisions as of the
+The following table shows the changes in the present value of
+the defined benefit obligations for the periods indicated:
+100
+100
+100
+100
+3
+30
+19
+100
+8
+100
+20
+4
+2
+1
+4
+3
+9
+5
+6
+5
+18
+100
+100
+100
+Total
+countries
+Other
+United
+Kingdom
+Total Germany
+€ in millions
+2018
+2019
+173
+Other Information
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Report of the Supervisory Board
+Strategy and Objectives
+Net Periodic Pension Cost
+The net periodic pension cost for defined benefit plans included
+in the provisions for pensions and similar obligations and in
+operating receivables is shown in the table below:
+Description of the Pension Cost
+The determination of the target portfolio structure for the indi-
+vidual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in a
+comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition of
+the capital markets and the structure of the benefit obligations,
+and is adjusted as necessary. The parameters used in the studies
+are additionally reviewed regularly, at least once each year.
+Asset managers are tasked with implementing the target port-
+folio structure. They are monitored for target achievement on
+a regular basis.
+liabilities. In the table above, derivatives have been allocated,
+based on their substance, to the respective asset classes. In
+order to improve the funded status of the E.ON Group as a whole,
+a portion of the plan assets will also be invested in a diversified
+portfolio of asset classes that are expected to provide for long-
+term returns in excess of those of fixed-income investments and
+the discount rate.
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the
+structure of the benefit obligations. This long-term investment
+strategy seeks to manage the funded status, with the result
+that any changes in the defined benefit obligation, especially
+those caused by fluctuating inflation and interest rates are, to
+a certain degree, offset by simultaneous corresponding changes
+in the fair value of plan assets. The investment strategy may
+also involve the use of derivatives (for example, interest rate
+swaps and inflation swaps, as well as currency hedging instru-
+ments) to facilitate the control of specific risk factors of pension
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. An increase in the net defined benefit
+liability or a deterioration in the funded status following an
+unfavorable development in plan assets or in the present value
+of the defined benefit obligations is identified in these guidelines
+as a risk. E.ON therefore regularly reviews the development of
+the funded status in order to monitor this risk.
+¹The table shows the percentage allocation of the plan assets as at December 31, 2019. At the end of the 2019 fiscal year, 100 percent of the shares of PEG Infrastruktur AG ("PEGI"), including the
+shareholding in Nord Stream AG held by PEGI, were acquired by E.ON Pension Trust e.V. for the plan assets. The purchase price was not paid to the seller, E.ON Beteiligungen GmbH,
+until January 15, 2020; a corresponding liability therefore existed on December 31, 2019.
+100
+100
+100
+11
+7
+Total listed plan assets
+34
+6
+18
+27
+3
+9
+Other investment funds
+2
+12
+8
+5
+47
+26
+34
+45
+49
+45
+46
+50
+$g|
+82
+Germany
+80
+81
+Total
+Total unlisted plan assets
+Other
+Cash and cash equivalents
+Qualifying insurance policies
+7
+5
+Real estate
+3
+1
+Debt securities
+3
+6
+5
+4
+3
+4
+Equity securities not traded on an exchange
+Plan assets not listed in an active market
+97
+70
+92
+United
+Kingdom
+Other
+countries
+Employer service cost
+847
+1,084
+2024
+3
+231
+843
+1,077
+2023
+2
+229
+824
+1,055
+2022
+2
+228
+802
+1,032
+2021
+2
+248
+802
+234
+1,052
+3
+5,562
+2018
+2019
+Other
+countries
+United
+Kingdom
+Germany
+Total
+€ in millions
+Changes in the Net Defined Benefit Liability
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of
+the defined benefit obligations and the fair value of plan assets:
+Description of the Net Defined Benefit Liability
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 18.4 years as of
+December 31, 2019 (2018: 18.2 years).
+For the following fiscal year, it is expected that Group-wide
+employer contributions to plan assets for new and existing obli-
+gations will amount to a total of €300 million.
+174
+Notes
+28
+2,351
+8,483
+10,862
+Total
+16
+1,181
+4,365
+2025-2029
+222
+2020
+United
+Kingdom
+73
+defined benefit liability/asset
+Net interest on the net
+-1
+-1
+Gains (-) and losses (+) on settlements
+-159
+9
+-150
+34
+32
+66
+Past service cost
+1
+50
+82
+133
+1
+33
+152
+186
+71
+Other
+countries
+1
+62
+Germany
+Total
+€ in millions
+Prospective Benefit Payments
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2019, for the next ten years are
+shown in the following table:
+Description of Contributions and Benefit
+Payments
+Contributions to state plans totaled €0.2 billion (2018: €0.2 billion).
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €77 million in fixed contributions to
+external insurers or similar institutions was paid in 2019 (2018:
+€59 million) for defined contribution plans.
+The past service cost consists mostly of the expenses incurred
+in the context of restructuring measures. In 2018, the negative
+past service cost resulted from an adjustment to the pension
+plans in the UK.
+2
+-96
+139
+45
+2
+68
+254
+324
+Total
+1
+13
+48
+1
+25
+20
+20
+3.73
+-3.50
+- 10
++10
+- 10
++10
+-1.66
+1.72
+-2.10
+2.22
+- 25
++25
+-25
++25
+Change in mortality by (percent)
+Change in percent
+Change in percent
+Change in the pension increase rate by (basis points)
+-0.24
+0.25
+-0.35
+0.36
+-3.16
+- 25
+3.54
+When considering sensitivities, it must be noted that the change
+in the present value of the defined benefit obligations resulting
+from changing multiple actuarial assumptions simultaneously
+is not necessarily equivalent to the cumulative effect of the
+individual sensitivities.
+10
+4,880
+Other
+countries
+United
+Kingdom
+Germany
+Total
+Other
+countries
+United
+Kingdom
+Total Germany
+7,164
+12,054
+Fair value of plan assets as of January 1
+Interest income on plan assets
+€ in millions
+2018
+2019
+171
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Changes in the Fair Value of Plan Assets
+The defined benefit plans are funded by plan assets held in spe-
+cially created pension vehicles that legally are distinct from the
+Company. The fair value of these plan assets changed as follows:
+Description of Plan Assets and the
+Investment Policy
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+assumptions is changed for the purpose of computing the sensi-
+tivity of results to changes in that assumption, all other actuarial
+assumptions are included in the computation unchanged.
+12,093
++25
++25
+3.20
+2.90
+1.75
+1.75
+1.60
+United Kingdom
+Germany²
+Pension increase rate
+3.40
+2.00
+1.80/2.90
+2.50
+2.50
+2.35
+United Kingdom¹
+Germany
+Wage and salary growth rate
+2.70
+2.90
+2.00
+2.10
+3.20
+- 25
+¹Different salary growth rates were applied in 2019 due to different benefit plans
+(E.ON: 1.80 percent; innogy: 2.90 percent).
+Notes
+Change in the wage and salary growth rate by (basis points)
+Change in percent
+8.34
+- 50
++50
+-7.35
+9.04
+-7.85
+Change in percent
+- 50
++50
+Change in the discount rate by (basis points)
+December 31, 2018
+December 31, 2019
+Change in the present value of the defined benefit obligations
+Sensitivities
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of the
+defined benefit obligations:
+2018 G versions of the Heubeck biometric tables (2018)
+"S2" series base mortality tables with the CMI 2018
+projection model for future improvements
+Germany
+United Kingdom
+Actuarial Assumptions (Mortality Tables)
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+The discount rate assumptions used by E.ON reflect the currency-
+specific rates available at the end of the respective fiscal year
+for high-quality corporate bonds. Since the third quarter of 2019,
+interest rates for the EUR and GBP currency areas have been
+determined on the basis of the so-called single equivalent dis-
+count rate method instead of the duration method that was
+previously used. The full interest curve is used to determine the
+present value of the defined benefit obligation, and the IAS 19
+discount rate disclosed is determined retrospectively as the dis-
+count rate that leads to the identical present value of the
+defined benefit obligation when applied uniformly. This adjust-
+ment will result in an increase of 10 basis points in the discount
+rate in Germany and a decrease of 10 basis points in the UK
+as of December 31, 2019. This results in a net actuarial gain of
+€288 million. In the following year there will be a reduction in
+service cost of €8 million and an increase in net interest expense
+of €4 million.
+170
+2The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+guarantee adjustment.
+Total Germany
+6,945
+11
+December 31, 2019
+172
+Classification of Plan Assets¹
+following table:
+The plan assets thus classified break down as shown in the
+Notes
+The plan assets include virtually no owner-occupied real estate
+or equity and debt instruments issued by E.ON Group companies.
+Each of the individual plan asset components has been allocated
+to an asset class based on its substance.
+10
+4,880
+7,164
+12,054
+9
+6,154
+15,471
+21,634
+Fair value of plan assets as of December 31
+-31
+-31
+-88
+-88
+Other
+United
+-39
+Percentages
+Germany
+27
+49
+49
+Corporate bonds
+Government bonds
+Debt securities
+14
+19
+17
+15
+28
+24
+Equity securities (stocks)
+Plan assets listed in an active market
+Other
+countries
+December 31, 2018
+United
+Kingdom
+Germany
+Total
+Other
+countries
+Kingdom
+Total
+5,137
+-39
+287
+-318
+-554
+363
+738
+1,101
+interest income on plan assets
+not including amounts contained in the
+Return on plan assets recognized in equity,
+-236
+-318
+-554
+363
+738
+1,101
+Remeasurements
+138
+158
+296
+148
+168
+316
+-236
+287
+Employee contributions
+1
+Exchange rate differences
+9
+9
+420
+7,277
+7,697
+Changes in scope of consolidation
+-250
+-406
+-657
+-267
+-507
+-775
+Benefit payments
+130
+807
+937
+410
+631
+1,041
+Employer contributions
+1
+2.00
+United
+Kingdom
+Net liability as of January 1
+198
+24
+5,104
+8,782
+8,323
+1,563
+28,025
+3,923
+December 31, 2018
+Non-current
+8
+Current
+Current
+Capital expenditure grants
+Trade payables
+Financial liabilities
+€ in millions
+December 31, 2019
+Liabilities
+The following table provides a breakdown of liabilities:
+(26) Liabilities
+Non-current
+Liabilities from derivatives
+1,418
+3,571
+Total
+4,506
+7,637
+7,939
+16,686
+Trade payables and other operating liabilities
+527
+1,768
+1,195
+5,446
+Other operating liabilities
+1,898
+248
+2,975
+527
+Contract liabilities (IFRS 15)
+82
+489
+Advance payments
+95
+1,986
+427
+The other miscellaneous provisions consist primarily of provisions
+from the electricity and gas business. These include provisions
+for Renewables Obligation Certificates (ROCs) in the amount of
+€1.1 billion (prior year: €0.3 billion), which represent an important
+mechanism for promoting Renewables. The ROCs represent a
+fixed share of renewable energies in power sales and can be
+acquired either from renewable sources or on the market. During
+a twelve-month ROC period, the obligations accrued for this
+purpose are offset against the acquired certificates and used.
+Provisions for ROCs were increased by €0.7 billion through the
+takeover of innogy. Further included here are certain environ-
+mental remediation obligations from predecessor companies
+(€0.4 billion) and provisions for potential obligations arising
+from tax-related interest expenses and from taxes other than
+income taxes.
+Other
+Provisions for environmental remediation refer primarily
+to redevelopment protection measures and the rehabilitation
+of contaminated sites.
+Environmental Remediation and Similar
+Obligations
+Containers, transports, operational waste,
+8,269
+Retirement and decomissioning
+2019
+€ in millions
+Nuclear-Waste Management Obligations in Germany
+(Less Advance Payments)
+In the following, the provision items after deduction of advance
+payments are classified based on technical criteria:
+176
+Notes
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are not
+based on contractual agreements.
+Provisions for the disposal of spent nuclear-fuel rods also com-
+prise the contractual costs of finalizing reprocessing and the
+associated return of waste to interim storage, as well as costs
+incurred for expert handling, including the necessary interim
+storage containers and transport to interim storage.
+The asset retirement obligations recognized include the anticipated
+costs of post- and service operation of the facility, dismantling
+costs, and the cost of removal and disposal of the nuclear com-
+ponents of the nuclear power plant.
+external studies, external and internal cost estimates and con-
+tractual agreements, as well as the supplementary provisions
+of the German Act Transferring Responsibility for Nuclear Waste
+Storage and the German Disposal Fund Act.
+The provisions for nuclear-waste management based on nuclear-
+power legislation comprise all those nuclear obligations relating
+to the disposal of spent nuclear-fuel rods and low-level nuclear
+waste and to the retirement and decommissioning of nuclear
+power plant components that are determined on the basis of
+The provisions for nuclear-waste management obligations as
+of December 31, 2019, in the amount of €9.8 billion exclusively
+relate to nuclear-power activities in Germany.
+Provisions for Nuclear-Waste Management
+Obligations
+As of December 31, 2019, provisions for nuclear-waste manage-
+ment obligations exclusively relate to Germany; other provisions
+mainly relate to euro zone countries and the United Kingdom.
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 9). The provision items
+are discounted in accordance with the maturities with interest
+rates of between 0 and 2.55 percent.
+17,487
+203
+-553
+other
+20,609
+1,492
+9,761
+Provisions for customer-related obligations consist primarily
+of potential losses on rebates and open sales contracts as well
+as from pending meter readings.
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Supplier-Related Obligations
+177
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+The amount of other asset retirement obligations disclosed
+under economic net debt, not including the provisions for dis-
+mantling conventional plant components in the nuclear power
+segment, amounts to €336 million.
+The provisions for other asset retirement obligations consist of
+obligations for renewable-energy power plants and infrastructure.
+In addition, the provisions for dismantling conventional plant
+components in the nuclear power segment, which are based
+on legally binding civil agreements and public provisions, in the
+amount of €475 million (2018: €440 million) are taken into
+account here. Excluding discounting and cost-increase effects, the
+amounts for these disposal obligations would be €338 million.
+This amount flows into the economic net debt. The increase in
+other asset retirement obligations is mainly due to the takeover
+of innogy.
+Provisions for Other Asset Retirement
+Obligations
+At the end of November 2019, E.ON announced proposals to
+restructure npower. The plan calls for npower's household and
+small commercial customers (B2C) to be successively brought
+together on a common IT platform with the B2C customers of
+E.ON UK. In February 2020, an agreement between npower
+and E.ON UK was concluded on the sale of the B2C customer
+contracts of npower. There are also plans to spin off npower's
+business with industrial and large commercial customers (B2B).
+npower's remaining activities will be restructured over the next
+two years. This includes the closure of most of npower's sites
+and the resulting headcount reduction.
+In connection with the acquisition of innogy, E.ON has announced
+the elimination of up to 5,000 jobs across the Group. Against
+this backdrop, the "Collective Agreement on the Future and Job
+Security" was concluded in 2019 with employer associations
+and unions as well as ver.di and the Mining, Chemical and Energy
+Industrial Union. This collective agreement will initially apply to
+personnel changes and adjustment measures implemented in
+Germany as a result of the integration of the innogy Group into
+the E.ON Group. Among other aspects, it includes regulations
+on severance payments for employees who voluntarily depart,
+early retirement and the possibility of transferring to an Employ-
+ment and Qualification Company. These measures were further
+specified by the end of the year 2019 and they have been available
+for selection at selected locations since February 2020.
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, restructuring and other deferred personnel costs.
+Restructuring provisions were made in Germany and the UK,
+in particular:
+Personnel Obligations
+There were changes in estimates for the remaining nuclear-
+power business in 2019 in the amount of €149 million (2018:
+€379 million). This mainly includes the effects of the reduction
+in the discount interest rate, with counteracting effects from
+the optimization of decommissioning and disposal of nuclear
+power plants. €351 million (2018: €308 million) of this was
+used, of which €250 million (2018: €220 million) related to
+decommissioning and non-operating nuclear power plants
+based on circumstances for which decommissioning and dis-
+mantling costs were recognized.
+Excluding the effects of discounting and cost increases, the
+amounts for E.ON's remaining disposal obligations would
+be €8,195 million with average credit terms of approximately
+9
+years. This amount flows into the economic net debt.
+A risk-free discount rate of an average of about 0.0 percent is
+used for the measurement of E.ON's disposal obligations (previous
+year: 0.4 percent). Correspondingly, an applicable cost increase
+rate of 2.0 percent per annum was applied to E.ON's remaining
+disposal obligations (previous year: 2.0 percent), corresponding
+to a net interest rate of -2.0 percent (previous year: -1.6 percent).
+A change in the net interest rate of 0.1 percent would change
+the amount of the provision recognized on the balance sheet by
+approximately €0.1 billion.
+Provisions, if they are non-current, are measured at their settle-
+ment amounts, discounted to the balance sheet date.
+1,484
+9,888
+8,404
+December 31,
+2018
+Total
+35,964
+9,200
+12,829
+24
+116
+8,958
+-223
+2018
+Other
+Dec. 31,
+Changes in
+scope of
+consolidation
+differences
+Cash flows
+-1,460
+10,641
+Jan. 1, 2018
+Exchange
+rate
+31,948
+399
+18,307
+411
+2,409
+10,422
+557
+-193
+-2
+65
+138
+-53
+A Debt Issuance Program simplifies the issuance from time to
+time of debt instruments through public and private placements
+to investors. The Debt Issuance Program of E.ON SE was
+most recently renewed in March 2019, with a total amount of
+€35 billion. E.ON SE plans to renew the program in 2020.
+€35 Billion Debt Issuance Program
+The financing activities involve the use of covenants (contractual
+obligations) consisting primarily of change-of-control clauses
+(right of cancellation upon change of ownership), negative pledges,
+pari-passu clauses and cross-default clauses, each referring to
+a restricted set of significant circumstances. Financial covenants
+(that is, covenants linked to financial ratios) are not employed.
+Corporate Headquarters
+Covenants
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+The financial liabilities of innogy recognized at the date of initial
+consolidation were marked to market under IFRS. This market
+value was considerably higher than the nominal value because
+market interest rates had fallen since the bonds were issued.
+The difference between the nominal value and the market value
+calculated during the preliminary purchase price allocation
+totaled €2,466 million as of December 31, 2019. This difference
+is not taken into account in the economic net debt.
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €68 million
+(2018: €20 million). This collateral relates to amounts pledged
+by banks to limit the utilization of credit lines in connection
+with the fair value measurement of derivative transactions. The
+other financial liabilities include promissory notes in the amount
+of €0 million (2018: €50 million) and financial guarantees
+totaling €8 million (2018: €8 million). Also included is collateral
+received in connection with goods and services in the amount
+of €10 million (2018: €22 million). E.ON can use this collateral
+without restriction.
+9,886
+43
+-1,096
+-226
+-1,856
+13,021
+463
+22
+-1,096
+-3
+-367
+1,907
+327
+23
+357
+-121
+222
+3,144
+Exchange
+178
+Financial liabilities
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Bonds
+€ in millions
+Financial Liabilities
+¹For more information see Note 32.
+Financial liabilities
+Other financial liabilities
+Lease obligations¹
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Financial Liabilities
+The following tables present the changes to financial liabilities
+in fiscal years 2019 and 2018:
+Financial Liabilities
+Notes
+rate
+463
+Jan. 1, 2019
+differences
+399
+2,169
+5
+-292
+863
+1,138
+1,394
+-2
+-392
+138
+50
+200
+-150
+27,059
+14,737
+343
+3,021
+8,958
+Dec. 31,
+2019
+Other
+Changes in
+scope of
+consolidation
+Cash flows
+-2,239
+3,969
+-365
+(25) Miscellaneous Provisions
+31
+200
+3,016
+3,247
+40
+68
+7,012
+7,120
+Net liability as of December 31
+-1
+-12
+-13
+3
+-8
+171
+166
+Other
+-1
+-1
+7
+dates indicated:
+7
+Miscellaneous Provisions
+December 31, 2018
+Supplier-related and customer-related obligations
+637
+15
+766
+44
+Other asset retirement obligations
+830
+97
+1,180
+742
+Personnel obligations
+9,463
+425
+9,363
+398
+Nuclear-waste management obligations
+Non-current
+Current
+Non-current
+Current
+€ in millions
+December 31, 2019
+386
+Exchange rate differences
+48
+Description of the Benefit Obligation
+-41
+132
+Changes from remeasurements
+2
+-96
+141
+47
+2
+68
+254
+324
+Net periodic pension cost
+33
+553
+3,034
+3,620
+31
+200
+3,016
+3,247
+5
+1
+488
+-126
+49
+1
+43
+4,275
+4,319
+Changes in scope of consolidation
+-2
+-4
+-6
+-2
+-32
+-34
+Net benefit payments
+-130
+-807
+-937
+-410
+-631
+-1,041
+Employer contributions to plan assets
+-2
+616
+Other
+countries
+110
+99
+-3
+-98
+108
+236
+1
+287
+customer-related obligations
+Supplier-related and
+810
+54
+-1
+-9
+20
+20
+3
+90
+1
+652
+obligations
+Other asset retirement
+1,922
+-35
+-88
+496
+and similar obligations
+64
+-1,396
+1,921
+2,930
+185
+2,440
+68
+14,574
+122
+1,263
+60
+2,300
+529
+-64
+-39
+62
+6
+45
+-1
+520
+Total
+Other
+Environmental remediation
+190
+-182
+781
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+€ in millions
+Changes in Miscellaneous Provisions
+table below:
+The changes in the miscellaneous provisions are shown in the
+12,459
+2,117
+13,468
+4,019
+Total
+938
+1,362
+1,579
+2,390
+Other
+492
+28
+470
+59
+Environmental remediation and similar obligations
+175
+-346
+Exchange
+Jan. 1, rate differ-
+2019
+Changes in
+scope of
+consolida-
+tion
+12
+811
+7
+927
+Personnel obligations
+9,761
+149
+-351
+38
+42
+-5
+9,888
+obligations
+Nuclear-waste management
+2019
+Dec. 31,
+Changes in
+estimates
+Reversals
+Reclassifi-
+cations¹
+Additions Utilization
+Unwinding
+of dis-
+counts
+ences
+1.30
+168
+2018
+-150
+9
+-159
+Gains (-) and losses (+) on settlements
+-1
+-1
+Interest cost on the present value of the
+defined benefit obligations
+389
+239
+149
+1
+358
+206
+151
+1
+Remeasurements
+1,233
+697
+531
+5
+-66
+298
+-362
+-2
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+Actuarial gains (-)/losses (+) arising from
+-14
+-12
+-2
+-47
+34
+98
+32
+Past service cost
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+Changes in the Defined Benefit Obligations
+2017
+169
+2019
+€ in millions
+Defined benefit obligation as of January 1
+Employer service cost
+15,301
+Total Germany
+10,180
+United
+Kingdom
+Other
+countries
+Total
+5,080
+41
+15,713
+Germany
+9,979
+United
+Kingdom
+2018
+Other
+countries
+5,690
+186
+152
+33
+1
+135
+84
+50
+1
+66
+-145
+44
+1,270
+1
+Exchange rate differences
+Other¹
+294
+78
+294
+-40
+-40
+171
+-96
+3
+-44
+-43
+-1
+Defined benefit obligation as of December 31
+28,754
+22,483
+49
+15,301
+10,180
+5,080
+41
+¹In the current reporting year, the item in Germany primarily comprises the reclassification of benefit plans.
+The net actuarial losses shown in the table for the development
+of the present value of the defined benefit obligations are largely
+attributable to a decrease in the discount rates used.
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at
+E.ON's German and UK subsidiaries as of the respective balance
+sheet date are as follows:
+changes in financial assumptions
+Actuarial Assumptions
+2019
+December 31,
+Percentages
+Discount rate
+Germany
+United Kingdom
+57
+58
+6,222
+463
+158
+-11
+1
+6
+543
+721
+-167
+-2
+Actuarial gains (-)/losses (+) arising from
+-23
+-24
+1
+-8
+42
+-50
+experience adjustments
+1
+11,552
+12,016
+Changes in scope of consolidation
+-3
+-250
+Employee contributions
+-663
+-3
+-410
+1
+-539
+-809
+Benefit payments
+-267
+5
+5
+435
+630
+74
+71
+302
+59
+504
+55
+548
+435
+674
+74
+71
+302
+39
+3
+85
+31
+59
+93
+31
+33
+93
+Other
+UK
+3
+39
+17
+5
+2
+164
+397
+80
+70
+25
+242
+59
+10
+55
+1,400
+Customer Solutions
+350
+100
+750
+1,218
+9,618
+8,448
+8,382
+923
+2,688
+2,420
+2,150
+25,011
+2030
+2030
+2023
+2022
+2021
+2020
+83
+1,339
+4,461
+Financial Liabilities by Segment
+The following table breaks down the financial liabilities by
+segment:
+ECE/Turkey
+Sweden
+Germany
+Energy Networks
+2019 2018
+2018
+2019
+2018
+2019
+Germany Sales
+Financial liabilities
+Lease obligations¹
+Bank loans/
+Liabilities to banks
+2019 2018
+2018
+2019
+2018
+2019
+€ in millions
+Bonds Commercial paper
+Financial Liabilities by Segment as of December 31
+Other financial
+liabilities
+59
+Electricity price change risk
+25
+instruments
+Receivables from
+derivative financial
+Carrying amount
+185
+after
+Interest-rate risk
+Currency risk
+€ in millions
+Liabilities from
+derivatives
+Carrying Amounts of Hedging Instruments and Changes in Fair Value of Hedging Instruments and Hedged
+Items in Connection with Cash Flow Hedges
+Report of the Supervisory Board
+Strategy and Objectives
+hedging instruments and the changes in the fair values of the
+hedging instruments and hedged items by hedged risk type:
+The following table presents the carrying amounts of the
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash flow
+hedge accounting.
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps and cross-currency
+interest rate swaps are the principal instruments used to limit
+interest rate and currency risks. The purpose of these swaps is to
+maintain the level of payments arising from long-term interest-
+bearing receivables and liabilities and from capital investments
+denominated in foreign currency and euro by using cash flow
+hedge accounting in the functional currency of the respective
+E.ON company.
+Cash Flow Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges are
+generally reported in that line item of the income statement
+which also includes the respective hedged items.
+Fair Value Hedges
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Change in the fair value
+of the designated portion
+of hedging instruments
+Change in the fair value
+of hedged items
+2019
+911
+1,350
+29
+86
+-24
+-8
+23
+9
+257
+64
+135
+140
+2018
+2019
+2018
+2019
+2018
+2019
+2018
+To hedge currency risk, E.ON entered into hedging transactions in
+the reporting year in pounds sterling at an average hedging rate
+of GBP 0.86/EUR (2018: GBP 0.84/EUR) and in U.S. dollars at an
+average hedging rate of USD 1.17/EUR (2018: USD 1.22/EUR).
+Hedging transactions were concluded at an average interest
+rate of 3.43 percent (2018: 3.53 percent) to hedge the interest
+rate risk in the euro zone. The average hedging price for hedging
+electricity price change risks amounted to €47.10/MWh in the
+year under review (2018: €52.63/MWh).
+144
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group are hedged.
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+86
+99
+83
+3
+Non-Core Business
+10
+10
+Renewables
+99
+18,386
+2,299
+958
+14,968
+innogy
+130
+287
+46
+60
+161
+Corporate Functions/Other 12,091 8,958
+E.ON-Group
+50
+40
+Strategy and Objectives
+(30) Derivative Financial Instruments and
+Hedging Transactions
+Report of the Supervisory Board
+Strategy and Objectives
+¹The previous year included liabilities from finance leases.
+9,886
+463 31,948
+557
+327
+3,144
+138
+1,138
+50
+27,059 8,958
+9,188
+12,395
+210
+172
+42
+20
+At the E.ON Group, hedge accounting in accordance with IFRS 9
+is employed primarily in connection with hedging long-term
+liabilities and bonds to be issued in the future via interest-rate
+derivatives and for hedging long-term foreign currency receiv-
+ables and payables and foreign investments via currency deriv-
+atives. E.ON also hedges net investments in foreign operations.
+2024 and
+6.250%
+Due in
+Jan 2024
+10 years
+EUR 800 million
+innogy Finance B.V.
+5.625%
+Dec 2023
+20 years
+GBP 488 million
+3.000%
+innogy Finance B.V.
+Nov 2022
+5 years
+EUR 750 million
+innogy Finance B.V.
+0.000%
+Oct 2022
+3 years
+EUR 750 million
+0.750%
+E.ON SE
+EUR 500 million
+7 years
+EUR 750 million
+E.ON SE
+1.625%
+May 2026
+8 years
+EUR 500 million
+innogy Finance B.V.
+1.000%
+Apr 2025
+8 years
+EUR 750 million
+innogy Finance B.V.
+0.000%
+Aug 2024
+5 years
+EUR 750 million
+E.ON SE
+0.875%
+May 2024
+E.ON SE
+7 years
+0.000%
+3 years
+May 2020
+12 years
+EUR 1,400 million
+E.ON International Finance B.V.3
+1.875%
+Jan 2020
+7 years
+EUR 750 million
+5.750%
+innogy Finance B.V.
+Repayment
+Initial term
+respective currency
+Issuer
+Volume in the
+Major Bond Issues of E.ON SE, E.ON International Finance B.V., innogy SE and innogy Finance B.V.¹
+179
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Coupon
+innogy Finance B.V.
+GBP 570 million
+20 years
+EUR 500 million
+E.ON SE
+5.500%
+Jul 2022
+13 years
+GBP 500 million
+innogy Finance B.V.
+0.375%
+Aug 2021
+4 years
+EUR 750 million
+6.500%
+Aug 2021
+13 years
+EUR 1,000 million
+E.ON SE
+innogy Finance B.V.
+6.500%
+Apr 2021
+Sep 2022
+Due in
+Oct 2026
+innogy Finance B.V.
+6.750%
+6.125%
+Jul 2039
+30 years
+GBP 1,000 million
+innogy Finance B.V.
+Jan 2039
+30 years
+GBP 700 million
+¹Listing: All bonds ≥ 500 million EUR are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+2Rule 144A/Regulation S bond.
+E.ON International Finance B.V.
+Apr 2038
+30 years
+USD 1,000 million
+E.ON International Finance B.V.2
+5.875%
+Oct 2037
+30 years
+GBP 900 million
+6.650%
+3The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.
+"The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+Additionally outstanding as of December 31, 2019, were private
+placements with a total volume of approximately €1.7 billion
+(2018: €0.9 billion).
+€3.5 Billion Syndicated Revolving Credit Facility
+Effective October 24, 2019, E.ON arranged a syndicated
+revolving credit facility in the amount of €3.5 billion over an
+original term of five years, with two renewal options for one
+year each. The facility replaces both of the existing syndicated
+credit facilities of €2.75 billion for E.ON and of €2.0 billion for
+Due in
+Due in
+Due in
+2019
+Total
+Due
+between
+Due
+December 31, 2018
+December 31, 2019
+€ in millions
+Bonds Issued by E.ON SE, E.ON International Finance B.V., innogy SE and innogy Finance B.V.
+The bonds issued by E.ON SE and E.ON International Finance B.V.
+(guaranteed by E.ON SE) as well as innogy SE and innogy
+Finance B.V. (guaranteed by innogy SE) have the maturities
+presented in the table below. Liabilities denominated in foreign
+currency include the effects of economic hedges, and the
+amounts shown here may therefore vary from the amounts
+presented on the balance sheet.
+original maturities of up to 397 days (and a subsequent extension
+option for the investor) to investors. As of December 31, 2019,
+€50 million in commercial paper was outstanding under the euro
+commercial paper program (2018: €0). As in the prior year, no
+commercial paper was outstanding under the U.S. commercial
+paper program.
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to two years less one day to investors.
+The U.S. commercial paper program in the amount of $10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to 366 days and extendible notes with
+In connection with the acquisition of innogy SE, on April 6, 2018,
+E.ON originally secured a €5 billion acquisition facility, which
+was reduced to €1.75 billion by August 2018. The credit facility
+has not been drawn on and remains available to the Group.
+Acquisition Financing of €1.75 Billion
+180
+Notes
+innogy. The credit margin is in part coupled with the develop-
+ment of certain ESG ratings on which E.ON bases financial
+incentives for a sustainable corporate strategy. The ESG ratings
+are calculated by three prominent agencies: ISS ESG, MSCI ESG
+Research, and Sustainalytics. The facility was granted by
+21 banks, which make up E.ON's core banking group. The facility
+has not been drawn; rather, it serves as the Group's reliable,
+long-term liquidity reserve, one purpose of which is to function
+as a backup facility for the commercial paper programs.
+E.ON International Finance B.V.
+0.250%
+4.750%
+22 years
+Feb 2030
+11 years
+EUR 750 million
+E.ON SE
+1.500%
+Jul 2029
+12 years
+EUR 1,000 million
+0.350%
+innogy Finance B.V.
+May 2029
+12 years
+EUR 750 million
+E.ON SE
+1.250%
+Oct 2027
+10 years
+EUR 850 million
+1.625%
+innogy Finance B.V.
+GBP 760 million
+28 years
+GBP 600 million
+innogy Finance B.V.
+5.750%
+Feb 2033
+30 years
+EUR 600 million
+innogy Finance B.V.
+6.375%
+Jun 2032
+30 years
+GBP 975 million
+E.ON International Finance B.V.4
+0.625%
+Nov 2031
+12 years
+EUR 500 million
+E.ON SE
+-435
+Jun 2030
+Jan 2034
+-67
+Reclassifications recognized in income are generally reported
+in that line item of the income statement which also includes
+the respective hedged transaction.
+64
+20,473
+27,868
+15
+AmC
+15
+1,082
+AmC
+511
+Financial liabilities
+511
+1,894
+1,894
+Total assets
+Assets held for sale
+Restricted cash
+Cash and cash equivalents
+96
+1,520
+AmC
+31,948
+31,655
+Bonds
+AmC
+325
+607
+Other financial liabilities
+3,232
+n/a
+3,133
+3,144
+Lease obligations
+1,256
+64
+28,679
+70
+29,935
+1,147
+AmC
+1,138
+1,138
+Bank loans/Liabilities to banks
+AmC
+27,059
+27,059
+1,615
+FVOCI
+1,615
+424
+3,049
+FVPL
+3,049
+3,049
+AmC
+8,250
+8,438
+13,231
+17,912
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Trade receivables
+Trade receivables and other operating assets
+140
+FVPL
+140
+160
+1
+341
+AmC
+236
+325
+236
+236
+1,511
+1,935
+FVPL
+1,935
+520
+3,031
+3,550
+3,550
+3,550
+95
+2,597
+226
+10
+4230
+1,700
+AmC
+1,696
+6,189
+Securities and fixed-term deposits
+Other operating assets
+n/a
+341
+1
+Trade payables and other operating liabilities
+Put option liabilities under IAS 322
+3,158
+1,414
+25
+Cash provided by investing activities from continuing and discon-
+tinued operations amounted to roughly -€5.8 billion in 2019
+(2018: +€1.0 billion). The disposal of the shareholding in Uniper SE
+(-€3.8 billion) in the prior year had a particular impact in this
+regard. In fiscal year 2019, the acquisition of the innogy shares
+Cash provided by operating activities before interest and taxes
+from continuing and discontinued operations, at €4.4 billion, was
+€0.3 billion higher than in the prior-year period. At the same
+time, negative working capital adjustments during fiscal year
+2019 were more than offset by the initial inclusion of innogy.
+Cash provided by operating activities from continuing and dis-
+continued operations also declined due to higher interest and
+tax payments.
+184
+Notes
+The total consideration received by E.ON in 2019 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €37 million (2018: €239 million). Cash and cash equiva-
+lents sold amounted to €32 million (2018: €20 million). The sale
+of the consolidated activities led to reductions of €742 million
+(2018: €167 million) in assets and €10 million (2018: €62 million)
+in provisions and liabilities. The derecognition of assets and liabili-
+ties primarily relates to the sale of PEGI, as parent company of
+Nord Stream AG, to E.ON Pension Trust e.V., for which payment
+will be received in 2020.
+2,069
+Not including the acquisition of innogy, E.ON paid a total of
+€92 million for additions to consolidated equity interests. The
+cash acquired totaled €16 million. Assets in the amount of
+€166 million and provisions and liabilities in the amount of
+€161 million were recognized. This primarily includes additions
+from the acquisition of the Coromatic Group in the Customer
+Solutions Sweden segment.
+(29) Supplemental Cash Flow Disclosures
+On April 13, 2017, the Federal Constitutional Court declared
+the Nuclear Fuel Tax Act to be incompatible with the Basic Law
+and invalid. The nuclear-fuel tax plus interest paid by E.ON was
+refunded. Nuclear operators use two models for the calculation
+of interest with the German customs authorities, one of which
+is used by Preussen Elektra. With the 16th amendment to the
+German Nuclear Energy Act, the German Federal Government
+has implemented the ruling of the German Federal Constitutional
+Court on the phase-out of nuclear energy. This amendment
+regulated compensation claims for certain investments and
+residual volumes of electricity, and created an obligation to offer
+these residual volumes at reasonable terms and conditions.
+PreussenElektra sued Krümmel GmbH & Co. OHG and Vattenfall
+Nuclear GmbH with the aim of transferring, without compen-
+sation, the residual volumes of electricity from the Krümmel
+nuclear power plant corresponding to the ownership interest.
+The changes to the legal and regulatory framework can in some
+cases also significantly impact subsidies and remuneration
+practices in the area of Renewables, which in turn are the object
+of regulatory or court proceedings. Lawsuits are also pending
+in connection with the construction and operation of plants for
+generating electricity from renewable energy sources.
+In the Energy Networks segment, Group companies are involved
+in proceedings for the award of concessions, the insolvency of
+energy suppliers and in connection with grid connections and
+the calculation of the grid fee. Official regulations and changes
+in regulatory practice have given rise to legal disputes. The
+national regulatory regimes within Europe are also subject to
+changes, some of which have a significant impact on network
+operations. Of particular note here are effects in connection
+with the regulatory treatment of capital costs and return on
+equity. Owing to a number of factors, including regulatory and
+legal decisions, the regulatory framework has increased here.
+However, these regulatory interventions are not restricted to the
+network area; distribution activities in the customer solutions
+area have also been affected by regulatory measures.
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or may
+be instituted or asserted in the future against companies of the
+E.ON Group. This in particular includes legal actions and proceed-
+ings on contract amendments and price adjustments initiated
+in response to market upheavals and the changed economic sit-
+uation in the electricity and gas sectors (also as a consequence
+of the energy transition) and concerning price increases and
+anticompetitive practices. The courts and authorities are also
+subjecting competitive practices to stricter reviews.
+(28) Litigation and Claims
+183
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Note 4 provides a detailed presentation of the acquisition of the
+shares in innogy. The agreement with RWE includes a provision
+for the cash settlement of fractional shares. innogy shares were
+also acquired within the framework of a public takeover offer
+and through additional purchases on the market. On balance, this
+results in a cash purchase price of €1.3 billion in connection with
+the innogy transaction in 2019. Of this amount, €0.2 billion is
+attributable to payments made in connection with the transfer
+of minority interests in nuclear power plants.
+2,069
+AmC
+2,069
+¹FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques
+with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+49,396
+57,175
+Total liabilities
+31
+31
+FVPL
+31
+214
+AmC
+214
+245
+602
+Liabilities associated with assets held for sale
+1,752
+AmC
+1,729
+8,785
+Other operating liabilities
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+In addition, further financial obligations in place as of Decem-
+ber 31, 2019, totaled approximately €2.4 billion (€2.0 billion
+due within one year). These include financial obligations from
+services to be procured, capital obligations from joint ventures
+and obligations concerning the acquisition of real estate funds
+held as financial assets, as well as corporate actions.
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2019, relate primarily to the
+purchase of electricity and natural gas. Financial obligations
+under the electricity purchase contracts amount to approximately
+€6.5 billion on December 31, 2019 (€3.7 billion due within
+one year). Financial obligations under the gas purchase contracts
+amount to approximately €4.4 billion on December 31, 2019
+(€2.4 billion due within one year). Additional purchase commit-
+ments as of December 31, 2019, amounted to approximately
+€0.6 billion (€0.1 billion due within one year). They include long-
+term contractual commitments to purchase heat and alterna-
+tive fuels.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+1,439
+n/a
+1,439
+1,439
+Derivatives with hedging relationships
+65
+3,550
+FVPL
+3,550
+3,550
+Derivatives with no hedging relationships
+AmC
+8,709
+8,782
+Trade payables
+17,496
+24,625
+181
+92
+Trade Payables and Other Operating Liabilities
+Capital expenditure grants of €222 million (2018: €103 million)
+have not yet been recognized as revenue. The E.ON Group
+retains ownership of the assets. The grants are non-refundable
+and are recognized in other operating income over the period of
+the depreciable lives of the related assets.
+As of December 31, 2019, purchase commitments for invest-
+ments in intangible assets and in property, plant and equipment
+amounted to €1.9 billion (2018: €0.8 billion). Of these com-
+mitments, €1.2 billion are due within one year. The purchase
+commitment mainly includes financial obligations for as yet
+outstanding investments, in particular in the Energy Networks
+Germany and Sweden segments. On December 31, 2019, these
+obligations totaled €1.4 billion.
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are other
+mostly long-term financial obligations arising mainly from
+contracts entered into with third parties, or on the basis of legal
+requirements.
+Other Financial Obligations
+Furthermore, as of December 31, 2019, E.ON is continuing to
+provide collateral in the amount of €3,011.3 million for the former
+Group companies transferred to RWE which will be repaid or
+assumed by RWE Group companies in the short term.
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a Soli-
+darity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement
+dated March 25, April 18, April 28, and June 1, 2011. If an
+accident occurs, the Solidarity Agreement calls for the nuclear
+power plant operator liable for the damages to receive-after
+the operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement, E.ON
+Energie's share of the liability coverage on December 31, 2019,
+was 46.8 percent (prior year: 44.6 percent), plus an additional
+5.0 percent charge for the administrative costs of processing
+damage claims; this share will change to 47.1 percent starting
+from January 1, 2020. Sufficient liquidity has been provided for
+and is included within the liquidity plan.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million
+and €15 million for claims related to officially ordered evacuation
+measures. Group companies have agreed to place their sub-
+sidiaries operating nuclear power plants in a position to maintain
+a level of liquidity that will enable them at all times to meet their
+obligations as members of the Nuklear Haftpflicht GbR, in
+pro-
+portion to their shareholdings in nuclear power plants.
+The guarantees of E.ON also include items related to the
+opera-
+tion of nuclear power plants. With the entry into force of the
+German Nuclear Energy Act ("Atomgesetz" or "AtG"), as amended,
+and of the ordinance regulating the provision for
+coverage under
+the Atomgesetz ("Atomrechtliche Deckungsvorsorge-Verordnung"
+or "AtDeckV") of April 27, 2002, as amended, German nuclear
+power plant operators are required to provide nuclear accident
+liability coverage of up to €2.5 billion per incident.
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+182
+Notes
+In addition, E.ON has entered into indemnification agreements,
+which as a rule are incorporated in agreements concerning the
+disposal of shareholdings and, above all, affect the customary
+representations and warranties with relation to liability risks for
+environmental damage and contingent tax risks. In some cases,
+obligations are covered in the first instance by provisions of the
+disposed companies before E.ON itself is required to make any
+payments. Guarantees issued by companies that were later sold
+by E.ON SE or its legal predecessors are usually included in the
+respective final sales contracts in the form of indemnities.
+E.ON has issued direct and indirect guarantees and surety bonds
+to third parties in connection with its own operations or the
+operations of affiliated companies, which may trigger payment
+obligations based on the occurrence of certain events. These
+instruments include both financial guarantees as well as opera-
+tional guarantees, which primarily secure contractual obligations
+and benefit obligations for active and former employees.
+The fair value of the E.ON Group's contingent liabilities was
+€1.3 billion as of December 31, 2019 (December 31, 2018:
+€0.5 billion), and primarily includes contingent liabilities in con-
+nection with contingencies and potential long-term environ-
+mental remediation measures.
+Contingent Liabilities
+As part of its business activities, E.ON is subject to contingent
+liabilities and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees, obliga-
+tions from litigation and claims (as discussed in more detail in
+Note 28), short- and long-term contractual, legal and other
+obligations and commitments.
+(27) Contingent Liabilities and Other Financial
+Obligations
+Other operating liabilities consist primarily of other tax liabilities
+in the amount of €1,276 million (2018: €472 million) and inter-
+est payable in the amount of €469 million (2018: €360 million).
+Also included in other operating liabilities are carryforwards of
+counterparty obligations to acquire additional shares in already
+consolidated subsidiaries as well as non-controlling interests
+in fully consolidated partnerships with legal structures that give
+their shareholders a statutory right of withdrawal combined with
+a compensation claim, in the amount of €2,069 million (2018:
+€289 million).
+Liabilities under IFRS 15 in the amount of €3,502 million
+(2018: €2,146 million) consist primarily of construction grants
+that were paid by customers for the cost of new gas and electric-
+ity connections in accordance with the generally binding terms
+governing such new connections. These grants are customary
+in the industry, generally non-refundable and recognized as
+revenue in the amount of €239 million according to the useful
+lives of the related assets. The significant increase in liabilities
+under IFRS 15 compared to the prior year is primarily due to the
+takeover of innogy.
+The change in derivative liabilities from €2,413 million as of
+December 31, 2018, to €4,989 million as of December 31, 2019,
+is primarily due to the takeover of innogy.
+Trade payables totaled €8,782 million as of December 31,
+2019 (2018: €5,104 million). The increase over the prior year
+is primarily due to the takeover of innogy. Accruals, formerly
+accounted for as a component of other operating liabilities, are
+now included in trade payables. The prior-year figures were
+adjusted accordingly.
+423
+481
+819
+186
+in the following table:
+The nominal volume of the hedging instruments is presented
+Report of the Supervisory Board
+Strategy and Objectives
+Notes
+The balance of the OCI arising from cash flow hedges as of
+December 31, 2019, contains -€1.2 billion relating to hedging
+of interest-rate risk (2018: -€0.8 billion).
+¹The balance as of December 31, 2019, includes -€241 million (2018: -€249 million) from terminated cash flow hedges.
+-1,435
+Nominal Values of Hedging Instruments in Connection with Cash Flow Hedges
+1
+8
+54
+-74
+-12
+-3
+-3
+Balance as of December 31, 2019¹
+Income taxes
+9
+Maturity
+Total
+€ in millions
+242
+110
+Electricity price change risk
+Interest-rate risk
+4,492
+4,304
+2,750
+1,554
+2,845
+1,903
+894
+855
+154
+2018
+2019
+>5 years
+1-5 years
+<1 year
+Currency risk
+Companies accounted for under the equity method
+Reclassification adjustments recognized in income
+Unrealized changes-reserve for hedging costs
+-43
+risk
+risk
+Currency risk
+Total
+Unrealized changes-hedging reserve
+Balance as of January 1, 2018
+€ in millions
+Electricity
+price change
+Interest-rate
+Changes in OCI Arising from Cash Flow Hedges
+The development of OCI arising from cash flow hedges, broken
+down by hedged risk type, is as follows:
+Gains and losses from the ineffective portions of cash flow hedges
+are classified as other operating income or other operating
+expenses.
+The amount of ineffectiveness for cash flow hedges recorded for
+the year ended December 31, 2018, produced an expense of
+€12 million (2018: €4 million gain). Of this amount, €12 million
+relates to hedging of interest-rate risk (2018: €3 million).
+15
+-15
+3
+25
+2
+10
+-1,016
+352
+-15
+-13
+-370
+-25
+-438
+Unrealized changes-hedging reserve
+-992
+Balance as of January 1, 2019
+-992
+Balance as of December 31, 2018¹
+-14
+Income taxes
+-15
+Companies accounted for under the equity method
+54
+-45
+9
+Reclassification adjustments recognized in income
+59
+59
+Unrealized changes-reserve for hedging costs
+-2
+481
+56
+The Company uses foreign currency forwards, foreign currency
+swaps and foreign currency loans to protect the value of its net
+investments in its foreign operations denominated in foreign
+currency.
+scope of
+Carrying
+using market active market
+within the
+Derived from
+Determined
+amounts
+Carrying
+scope of
+Carrying
+amounts
+within the
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2019
+The carrying amounts of the financial instruments, their grouping
+into IFRS 9 measurement categories, their fair values and their
+measurement sources by class are presented in the following
+table:
+(31) Additional Disclosures on Financial
+Instruments
+Notes
+The measurement of weather derivatives used to hedge
+temperature-dependent fluctuations in demand is particularly
+dependent on temperature developments. In general, under
+otherwise equivalent conditions, the fair value of these deriv-
+atives increases with rising temperatures and decreases
+with falling temperatures. Assumptions about the extent to
+which the future development during the remaining term of
+the derivatives will deviate from the historically observed
+long-term average temperatures can only be made for an
+extremely short period of time. Consequently, the fair value
+is primarily determined on the basis of the long-term average
+temperatures. A change in temperature of ±0.1°C as of the
+balance sheet date would lead to an increase in fair value of
+€3 million or a decrease of €3 million.
+in market values of €16 million or an increase of €12 million,
+respectively.
+Certain long-term energy contracts are valued with the
+aid of valuation models that use internal data if market
+prices are not available. A hypothetical 10-percent increase
+or decrease in these internal valuation parameters as of the
+balance sheet date would lead to a theoretical decrease
+Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective clear-
+ing houses. Paid initial margins are disclosed under other
+assets. Variation margins received or paid during the term of
+such contracts are stated under other liabilities or other
+assets, respectively.
+188
+prices
+€ in millions
+amounts
+Other financial receivables and financial assets
+336
+n/a
+336
+370
+817
+1,189
+Financial receivables and other financial assets
+Receivables from finance leases
+66
+455
+FVPL
+455
+1,730
+Equity investments
+prices
+(Level 2)
+(Level 1)
+Fair value
+IFRS 9
+IFRS 7
+Equity forwards are valued on the basis of the stock prices of
+the underlying equities, taking into consideration any timing
+components.
+Discounted cash values are determined for interest rate, cross-
+currency and cross-currency interest rate swaps for each
+individual transaction as of the balance sheet date. Interest
+income and expenses are recognized in income at the date of
+payment or accrual.
+•
+•
+1
+Unrealized changes-reserve for hedging costs
+-140
+Unrealized changes-hedging reserve
+-77
+Balance as of January 1, 2019
+-77
+Balance as of December 31, 2018¹
+2
+45
+-124
+Currency risk
+Unrealized changes-hedging reserve
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Income taxes
+Balance as of January 1, 2018
+€ in millions
+Changes in OCI Arising from Net Investment Hedges
+The development of OCI arising from net investment hedges
+is as follows:
+As in 2018, no ineffectiveness resulted from net investment
+hedges in 2019.
+The carrying amount of the assets used as hedging instruments
+as of December 31, 2019, was €27 million (2018: €12 million)
+and the carrying amount of the liabilities used as hedging instru-
+ments was €1,220 million (2018: €1,131 million). The fair values
+of the designated portion of the hedging instruments changed
+by -€87 million in the reporting period (2018: €50 million).
+Reclassification adjustments recognized in income
+Net Investment Hedges
+Income taxes
+Balance as of December 31, 2019¹
+•
+•
+are determined by discounting future cash flows using market
+interest rates over the remaining term of the instrument.
+The fair values of existing instruments to hedge interest risk
+Market prices for electricity options are valued using standard
+option pricing models commonly used in the market.
+Currency, electricity, gas and oil forward contracts, swaps,
+and emissions-related derivatives are valued separately at
+their forward rates and prices as of the balance sheet date.
+Whenever possible, forward rates and prices are based on
+market quotations, with any applicable forward premiums
+and discounts taken into consideration.
+•
+•
+•
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments in
+the Consolidated Financial Statements.
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant vari-
+ables. The Company assesses and monitors the fair value of
+derivative instruments on a periodic basis. The fair value to be
+determined for each derivative instrument is the price that
+would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants on the
+measurement date (exit price). E.ON also takes into account the
+counterparty credit risk for both own credit risk (debt value
+adjustment) and the risk of the corresponding counterparty
+(credit value adjustment) when determining fair value. The fair
+values of derivative instruments are calculated using common
+market valuation methods with reference to available market
+data on the measurement date.
+Valuation of Derivative Instruments
+As a rule, reclassifications recognized in income are reported
+under other operating income and expenses. The nominal volume
+of hedging instruments in net investment hedges amounted to
+€7,891 million as of December 31, 2019 (2018: €7,122 million).
+Since the currency risk of net investment hedges is hedged
+through the ongoing rollover of the hedging instruments, the major-
+ity are concluded with a remaining term of less than one year.
+187
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+¹The balance as of December 31, 2019, includes -€71 million (2018: -€71 million) from
+terminated net investment hedges.
+350
+565
+1
+At year-end 2019, the following E.ON SE, E.ON International
+Finance B.V., innogy SE and innogy Finance B.V. bonds were
+outstanding:
+in particular had the effect of reducing cash flow from investing
+activities. The purchase and sale of securities as well as changes
+in financial receivables and restricted cash resulted in a net
+cash outflow (-€0.6 billion) in fiscal 2019, compared with a net
+cash inflow (+€0.2 billion) in the prior year.
+At +€0.8 billion, cash provided by financing activities from
+continuing and discontinued operations was €3.4 billion higher
+than the prior-year figure of -€2.6 billion. This development
+was mainly due to the repayment of bonds in the 2018 fiscal
+year and bond issues in the 2019 reporting period. By contrast,
+dividends paid out rose from €0.9 billion in 2018 to €1.1 billion
+in fiscal 2019.
+This segment consists of onshore wind, offshore wind, and solar
+farms. E.ON planned, built, operated, and managed renewable
+generation assets. Their output was marketed in several ways:
+in conjunction with renewable incentive programs, under long-
+term electricity supply agreements with key customers, and
+directly to the wholesale market. Substantially all of the opera-
+tions in this segment were classified as discontinued operations
+effective June 30, 2018, and deconsolidated effective Septem-
+ber 18, 2019 (more information is available on pages 15, 27,
+and 28 of the Combined Group Management Report and in
+Note 4 to the Consolidated Financial Statements). Certain busi-
+ness operations of e.disnatur in Germany and Poland as well
+as a 20-percent stake in Rampion offshore wind farm in the
+United Kingdom were not transferred to RWE and continued to
+be reported here in the 2019 financial year.
+People Strategy
+The section of the Combined Group Management Report entitled
+Employees contains explanatory information about our people
+strategy.
+Combined Group
+Management Report
+⚫ innogy takeover closed
+• Adjusted EBIT and adjusted net income within the forecast
+range for 2019 that was adjusted in November owing to
+changes in E.ON's setup
+.
+As anticipated, economic net debt significantly higher due to
+the innogy takeover
+• 2020 adjusted EBIT expected to be between €3.9 and €4.1 billion,
+2020 adjusted net income between €1.7 and €1.9 billion
+Proposed dividend of €0.46 per share for the 2019 financial year
+• Annual growth of dividend per share of up to 5 percent through
+the dividend for the 2022 financial year decided
+Corporate Profile
+14
+Corporate Profile
+Business Model
+E.ON is an investor-owned energy company with approximately
+79,000 employees. Led by corporate headquarters in Essen,
+our operations are segmented into four operating units: Energy
+Networks, Customer Solutions, innogy, and Renewables. Our
+non-strategic operations are reported under Non-Core Business.
+Corporate Headquarters
+Corporate headquarters' main task is to lead the E.ON Group.
+This involves charting E.ON's strategic course and managing and
+funding its existing business portfolio. Corporate headquarters'
+tasks include optimizing E.ON's overall business across countries
+and markets from a financial, strategic, and risk perspective and
+conducting stakeholder management.
+Energy Networks
+This segment consists of our power and gas distribution net-
+works and related activities. It is subdivided into three regional
+markets: Germany, Sweden, and East-Central Europe/Turkey
+(which consists of the Czech Republic, Hungary, Romania, Slo-
+vakia, and Turkey). This segment's main tasks include operating
+its power and gas networks safely and reliably, carrying out any
+necessary maintenance and repairs, and expanding its power
+and gas networks, which frequently involves adding customer
+connections. innogy's network business is not reported here in
+the 2019 financial year.
+Customer Solutions
+This segment serves as the platform for working with our
+customers to actively shape Europe's energy transition. This
+includes supplying customers in Europe (excluding Turkey)
+with power, gas, and heat as well as with products and services
+that enhance their energy efficiency and autonomy and provide
+other benefits. Our activities are tailored to the individual needs
+of customers across all categories: residential, small and medium-
+sized enterprises, large commercial and industrial, and public
+entities. E.ON's main presence in this business is in Germany,
+the United Kingdom, Sweden, Italy, the Czech Republic, Hungary,
+and Romania. E.ON Business Solutions, which provides cus-
+tomers with turn-key distributed-energy solutions, is also part
+of this segment. innogy's sales business is not reported here in
+the 2019 financial
+year.
+innogy
+This segment consists in particular of the network and sales busi-
+nesses as well as the corporate functions and internal services
+of the innogy Group, which E.ON took over in September 2019.
+innogy operates its network business primarily in Germany,
+Poland, Hungary, and Croatia. Its sales business is engaged
+principally in Germany, the United Kingdom, the Netherlands,
+Belgium, Hungary, and Poland. This segment does not contain
+innogy's renewables and gas-storage businesses or its stake
+in Austrian energy utility KELAG, which are still to be transferred
+to RWE.
+Infrastructure and energy networks: develop energy-storage
+and energy-distribution solutions for an increasingly distrib-
+uted and volatile generation system
+The section of the Combined Group Management Report entitled
+Financial Situation contains explanatory information about our
+finance strategy.
+Finance Strategy
+A sustainable energy supply is also the objective of Green Gas
+from Green Power, an E.ON initiative to reduce carbon emissions
+in heat generation, transport, and industry. The German Federal
+Ministry for Economic Affairs and Energy selected the initiative
+for funding under its Real-life Laboratory for the Energy Transi-
+tion project. Our energy-transition laboratory will involve installing
+and operating a power-to-gas ("P2G") plant. The purpose is to
+test and refine intelligent combinations of various technologies
+for renewable energy production, conversion, storage, and dis-
+tribution in order to further propel decarbonization (for further
+details about sustainability, see the Separate Combined Non-
+Financial Report).
+Good corporate governance, corporate social responsibility, and
+environmental responsibility are essential for E.ON to generate
+sustainable business value over the long term. E.ON has there-
+fore decided to be climate-neutral with regard to Scope 1 and
+Scope 2 emissions by 2040. To underscore E.ON's commitment
+to sustainability, the Management Board has also pledged E.ON'S
+support for the UN Sustainable Development Goals ("SDGs").
+Our success at embracing sustainability is reflected in our
+performance in environmental, social, and governance ("ESG")
+ratings. Leading sustainability rating agencies like MSCI and
+Sustainalytics gave us high ratings.
+Renewables
+Strategy and
+Objectives
+Strategy and Objectives
+10
+Strategy and Objectives
+Our Strategy:
+Leading Partner for the New Energy World
+Decarbonization, decentralization, and digitization profoundly
+shaped the energy market in 2019 and will continue to do so in
+the decade ahead. We use these trends to enhance our position
+as a leading player in Europe's energy market, to successfully
+tap new businesses, and to make our processes more efficient.
+Our objective is to systematically focus the Company on the
+new energy world of increasingly empowered and proactive
+customers. We will create new markets for our customers by
+providing them with new products, services, and technologies.
+We will be policymakers and regulators' partner of choice for
+the energy transition. Our efforts will be guided by our principles
+of integration, focus, efficiency, and growth.
+We began integrating innogy SE last year and, after the squeeze-
+out and acquisition of its remaining stock, will accelerate this
+process in the current year. Our focus is on combining the respec-
+tive organizational entities in line with our Target Operating
+Model. We will use benchmarking analyses to further optimize
+business units' core processes or reorganize them to reflect
+best practices.
+Going forward, our business operations will focus on the key
+segments of the new energy world: regulated, highly efficient
+energy networks and innovative customer solutions. The acqui-
+sition of innogy SE significantly strengthened these segments.
+After the transaction is completed, the new E.ON will be the first
+European player to focus exclusively on municipal, commercial,
+and residential customers and will generate a large part of its
+EBIT with regulated businesses. The combination of energy net-
+works and customer solutions fits with the trend that, in an
+increasingly distributed and digital energy world, these business
+segments are converging. For example, smart meters make it
+possible to improve the coordination of energy networks and
+provide the basis for new sales offerings, such as time-based
+electricity tariffs and energy-trading options for distributed
+generating units.
+In addition to strengthening our core businesses, the innogy
+takeover will enable us to leverage substantial synergies of
+about €740 million by 2022, thereby making important prog-
+ress toward our efficiency targets. We expect the systematic
+optimization and digitization of our business processes to deliver
+additional efficiency gains.
+Our growth strategy calls for extensive investments in both
+business segments. The main focus will be on Energy Networks,
+in which we will invest about €3.2 billion in 2020. We plan to
+invest about €0.9 billion in Customer Solutions. Here, funds will
+mainly go toward City Energy Solutions and our business of
+providing solutions to industrial customers. We expect additional
+growth to come from the innovation activities in our retail and
+network operations as well as investments in startups (these
+are described in greater detail in the Innovation chapter of the
+Combined Group Management Report).
+Energy Networks
+The integration of innogy will result in E.ON operating regulated
+distribution networks in eight European countries, making it
+one of Europe's biggest distribution system operator ("DSO").
+Excluding innogy, E.ON has a regulated asset base ("RAB") of
+€21 billion. Energy Networks' principal objectives are to con-
+tinually enhance its efficiency and to increase its RAB. All four
+of E.ON's DSOs in Germany achieved efficiency rates of
+100 percent. innogy's DSOs had a weighted-average efficiency
+rate of 98.4 percent.
+The further increase in the investment budget for our networks
+will secure their asset integrity and expend their RAB. Distribution
+networks connect our customers with one another and provide
+the backbone for a successful energy transition. Our focus is
+on evolving from a pure DSO to a smart platform provider. The
+digitization of distribution networks plays an important role here.
+For example, around 2,700 smart substations entered service
+at E.ON and innogy's DSOs in Germany. They will help ensure
+that tomorrow's smart grid operates reliably despite increasing
+complexity and variable feed-in. A cooperative arrangement
+with a startup called envelio gives E.ON the ability to transmit
+information about a network connection directly to market par-
+ticipants, which will greatly simplify the planning of distributed
+generating units.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+11
+Together with innogy, E.ON will also make significant investments
+to expand its broadband activities. By expanding its network
+of fiber-to-the-home broadband connections, E.ON will bring
+high-speed Internet with broad bandwidth to rural areas as well.
+Customer Solutions
+The integration of innogy will give the new E.ON a customer base
+of 40 million (including 19 million innogy customers), making it
+one of Europe's biggest end-customer suppliers. Enerjisa Enerji,
+our equity interst in Turkey, supplies an additional 10 million
+customers.
+Our objective for new customer solutions that go beyond power
+and gas sales is to continually improve and renew our portfolio
+of products and services for innovative heat solutions, energy
+efficiency, distributed generation and storage, and sustainable
+mobility solutions. This will enable E.ON to become the partner
+of choice for public, commercial, and residential customers:
+Several projects exemplified how E.ON is implementing its
+strategy of helping customers become more sustainable. An
+international paper manufacturer chose E.ON to install a biomass-
+fired combined-heat-and-power ("CHP") plant in Hürth, a
+suburb of Cologne, Germany. The plant will supply heat to the
+paper mill and feed renewable power into the public grid. We
+also installed an advanced material and energy recycling system
+in Högbytorp outside Stockholm, Sweden. It will help ensure
+that one of Sweden's fastest-growing regions can be supplied
+with climate-neutral heat, power, and biogas. In addition, a
+multinational packaging producer awarded E.ON a major contract
+to install a CHP plant at its facility in Kent in the United Kingdom.
+The plant, which is expected to enter service in 2021, will reduce
+carbon emissions by 36,000 metric tons per year.
+Sustainability
+Retail and end-customer solutions: develop new business
+models for distributed-energy supply for end-customers and
+industry, energy efficiency, sustainable city and city-district
+solution, and mobility
+•
+Our objective in power and gas sales is to further strengthen our
+competitive position through maximal cost-efficiency, innovation,
+and relentless customer orientation. Digitization will be decisive
+here as well: going forward, highly efficient digital systems will
+make it possible for us to achieve lasting reductions in our oper-
+ating costs.
+E.ON's innovation activities reflect its strategy of focusing sys-
+tematically on the new energy world of empowered and proactive
+customers, renewables and distributed energy, energy efficiency,
+local energy systems, and digital solutions. The innovation
+activities in the Group therefore have the following focus areas:
+In October 2019 E.ON issued two more €750 million bonds. High
+investor demand enabled E.ON to secure favorable interest terms
+for both maturities (2022 and 2026) with coupons of 0 percent
+and 0.25 percent per year, respectively. Following the first Green
+Bond in August, this was another placement of a bond with a
+zero-percent coupon.
+More Corporate Bonds Issued
+In August 2019 E.ON issued two €750 million Green Bonds that
+mature in 2024 and 2030, respectively. High investor demand
+enabled E.ON to secure favorable interest terms with coupons of
+O percent and 0.35 percent per year, respectively. A Green Bond
+is a fixed-interest security whose issuance proceeds are used to
+fund sustainable infrastructure and energy-efficiency projects.
+Green Bonds Issued
+Syndicated Credit Facility with ESG Component Concluded
+In October 2019 E.ON concluded a new €3.5 billion syndicated
+credit facility with a term of five years and two options to extend
+the maturity by one year each. In addition, the volume can be
+increased by up to €0.75 billion during the facility's lifetime. The
+facility replaced two previously existing syndicated credit facili-
+ties: E.ON SE's €2.75 billion facility and innogy SE's €2 billion
+facility. The credit margin is linked in part to the development of
+certain ESG ratings, which also gives E.ON financial incentives
+to pursue a sustainable corporate strategy.
+The agreement is expected to be fully implemented in 2021.
+This will give MVM 100 percent of distribution operator ÉMÁSZ
+and a 25-percent stake in E.ON Hungária, which will then be
+ELMŰ's sole owner. In addition, Opus will be owner of current
+E.ON subsidy E.ON Tiszántúli Áramhálózati Zrt. ("E.ON ETI”).
+16
+Corporate Profile
+In early October 2019 E.ON acquired EnBW's 27-percent stake
+in ELMŰ Nyrt. ("ELMŰ") and ÉMÁSZ Nyrt. ("ÉMÁSZ"). Subse-
+quently, E.ON, MVM Magyar Villamos Művek Zrt. ("MVM," a
+shareholder of ELMŰ and ÉMÁSZ), and Opus Global Nyrt. ("Opus")
+signed a framework agreement. Under the agreement, E.ON
+intends to give itself a balanced and optimized portfolio in Hun-
+gary that will also make it possible to swiftly integrate innogy's
+operations there.
+Framework Agreement Signed with MVM and Opus to
+Reorganize Business in Hungaria
+In late November 2019 E.ON announced proposals to restructure
+npower. These proposals call for npower's residential and small
+and medium-size enterprise customers ("B2C") to be gradually
+combined with E.ON UK's B2C customers on a shared IT plat-
+form. In addition, in February 2020 npower and E.ON UK con-
+cluded an agreement on the sale of npower's B2C customer
+contracts. Furthermore, the plan is for npower's business with
+industrial and commercial customers to be carved out. npower's
+remaining operations will be restructured over the next two years.
+This includes closing most npower offices and thus reducing staff.
+In conjunction with the innogy takeover, E.ON announced that it
+would make up to 5,000 jobs redundant Group-wide. Before this
+backdrop, in May 2019 the Collective Bargaining Agreement for
+the Future and Job Security was concluded with employee repre-
+sentatives and two trade unions, ver.di and IGBCE. The collective
+bargaining agreement will initially apply to personnel changes
+and adjustment initiatives carried out in Germany as a result of
+the integration of the innogy Group into the E.ON Group. Among
+other things, it includes provisions for severance payments for
+employees who leave voluntarily, early retirement arrangements,
+and the possibility of transfer to a special company for further
+employment and qualifications. These measures were further
+specified by the end of the year 2019 and they have been available
+for selection at selected locations since February 2020.
+Restructuring Measures Initiated, including in Germany and
+the United Kingdom
+As decided at E.ON's Annual Shareholders Meeting in May 2019,
+after the closure of the innogy takeover E.ON increased the
+E.ON Supervisory Board to 20 members. E.ON appointed RWE
+CEO Rolf Martin Schmitz, entrepreneur Ulrich Grillo, and U.S.
+management consultant Deborah B. Wilkens as shareholder
+representatives. In addition, Monika Krebber, Stefan May, and
+René Pöhls joined the E.ON Supervisory Board as employee repre-
+sentatives. The leadership of the new E.ON remains in the hands
+of the current members of the Company's Management Board.
+E.ON Supervisory Board Enlarged, Composition of
+E.ON Management Board Unchanged
+This Annual Report's presentation of sales and the key perfor-
+mance indicators relevant for management control therefore
+also includes the results of discontinued operations in the
+Renewables segment. Pages 27 and 28 of the Combined Group
+Management Report and Note 34 to the Consolidated Financial
+Statements contain reconciliations of these indicators to the
+disclosures in the E.ON SE and Subsidiaries Consolidated State-
+ments of Income, Consolidated Balance Sheets, and Consolidated
+Statements of Cash Flows.
+Renewables
+The 76.8-percent stake in innogy previously held by RWE was
+transferred to E.ON on September 18, 2019. In late September
+E.ON also completed the voluntary public takeover offer to
+innogy's minority shareholders, thereby acquiring a further
+9.4 percent of innogy stock. Together with the 3.8 percent of
+innogy stock acquired on-market, E.ON holds 90 percent of
+all innogy stock and thus fulfills the necessary requirement for
+a merger squeeze-out (Note 4 to the Consolidated Financial
+Statements contains additional details of the transaction).
+Acquisition of RWE's innogy Stake Closed
+Special Events in the Reporting Period
+15
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Non-Core Business
+This segment consists of the E.ON Group's non-strategic activities.
+This applies to the operation and dismantling of nuclear power
+stations in Germany (which is managed by our PreussenElektra
+unit) and the generation business in Turkey.
+•
+In addition, in November 2019 E.ON issued a €500 million bond
+with a 12-year maturity and a coupon of 0.625 percent per year.
+In December 2019 E.ON issued another €500 million bond with
+a three-year maturity and a coupon of 0 percent per year.
+Pursuant to IFRS 5, the operations in the Renewables segment
+transferred as part of the transaction with RWE were reported as
+discontinued operations effective June 30, 2018. For the purpose
+of internal management control, these operations were fully
+included in the relevant key performance indicators until Septem-
+ber 18, 2019. In addition, the scheduled depreciation charges
+required by IFRS 5 and the carrying amount of these discontinued
+operations were recorded in equity and disclosed accordingly.
+On July 11, 2019, E.ON concluded the acquisition of 100 percent
+of Coromatic, a leading Sweden-based provider of facility-critical
+services. The EQT Group was the seller. Coromatic has its head-
+quarters in Stockholm and about 500 employees. The company
+has more than 5,000 customers in Scandinavia in a wide variety
+of sectors, such as data centers, healthcare, the public sector,
+transportation, manufacturing, telecommunications, finance, and
+retail. The parties agreed not to disclose the purchase price. For
+the E.ON Group as a whole, the transaction volume is insignificant.
+However, these other KPIs are not the focus of the ongoing
+management of our businesses.
+Innovation
+In addition, some KPIs are important for E.ON as a customer-
+focused company. For example, we see our ability to acquire new
+customers and retain existing ones as crucial to our company's
+success. Net promoter score ("NPS") measures customers'
+willingness to recommend E.ON to a friend or colleague. Our
+Sustainability Report and the Separate Combined Non-Financial
+Report describe how NPS fits into our management approach.
+Coromatic Acquisition
+Alongside our most important financial management KPIs, the
+Combined Group Management Report includes other financial
+and non-financial KPIs to present the performance of E.ON's
+operating business and part of E.ON's responsibility for all our
+stakeholders: our employees, customers, shareholders, bond
+investors, and the countries in which we operate. Operating
+cash flow, power and gas passthrough, and selected employee
+information are examples of other KPIs.
+Other KPIs
+E.ON manages its capital structure by means of its debt factor
+(see the section entitled Finance Strategy on page 29). Debt
+factor is equal to economic net debt divided by adjusted EBITDA
+and is therefore a dynamic debt metric. Economic net debt
+includes net financial debt as well as pension and asset-retire-
+ment obligations.
+Return on capital employed ("ROCE") assesses the value perfor-
+mance of E.ON's operating business. ROCE is a pretax total return
+on capital and is defined as the ratio of adjusted EBIT to annual
+average capital employed. From the 2020 financial year onward,
+ROCE will not be factored into components of the E.ON SE Man-
+agement Board's compensation. In the 2020 financial year, ROCE
+is therefore no longer one of E.ON's most important KPIs. In the
+future, it will instead be reported as one of E.ON's other KPIs.
+Cash-conversion rate is equal to operating cash flow before inter-
+est and taxes divided by adjusted EBITDA. It indicates whether
+E.ON's operating earnings are generating enough liquidity.
+From the 2020 financial year onward, the expenditures for the
+dismantling of nuclear power stations that are included in oper-
+ating cash flow before interest and taxes will no longer be fac-
+tored into cash-conversion rate. To balance out fluctuations
+that result primarily from payments around the balance-sheet
+date, E.ON will manage its cash-conversion rate by means of a
+target figure over the three years of the medium-term plan.
+Cash-effective investments are equal to the investment expen-
+ditures shown in the E.ON Group's Consolidated Statements
+of Cash Flows. These include the investments of discontinued
+operations in the Renewables segment until they were decon-
+solidated effective September 18, 2019.
+18
+Corporate Profile
+Adjusted earnings before interest and taxes ("adjusted EBIT")
+is E.ON's most important KPI for purposes of internal manage-
+ment control and as an indicator of its businesses' long-term
+earnings power. The E.ON Management Board is convinced that
+adjusted EBIT is the most suitable KPI for assessing operating
+performance because it presents a business's operating earnings
+independently of non-operating factors, interest, and taxes.
+The adjustments include net book gains, certain restructuring
+expenses, impairment charges and reversals, the marking to
+market of derivatives, and other non-operating earnings (see the
+explanatory information on pages 27 and 28 of the Combined
+Group Management Report and in Note 34 to the Consolidated
+Financial Statements). In addition, the effects of the subsequent
+valuation of hidden reserves and liabilities that were identified
+as part of the purchase-price calculation and allocation for the
+innogy transaction are disclosed separately.
+Adjusted net income is an earnings figure after interest income,
+income taxes, and non-controlling interests that has likewise
+been adjusted to exclude non-operating effects (see the explan-
+atory information on pages 27 and 28 of the Combined Group
+Management Report).
+Key Performance Indicators
+In July 2019, 10 TWh of residual power output rights was
+acquired from Krümmel nuclear power station and transferred to
+Grohnde nuclear power station, which is operated by Preussen-
+Elektra. The legal framework ensures that Grohnde and the
+other nuclear power stations operated by E.ON have a supply
+of other residual power output rights.
+For the 2019 financial year, E.ON's most important key perfor-
+mance indicators ("KPIs") for managing its operating business
+are adjusted EBIT and cash-effective investments. Other KPIs
+for managing the E.ON Group are cash-conversion rate, ROCE,
+adjusted net income, earnings per share (based on adjusted net
+income), and debt factor. The Combined Group Management
+Report's presentation of sales and the KPIs relevant for manage-
+ment control also includes the results of discontinued operations
+in the Renewables segment that were deconsolidated effective
+September 18, 2019 (for more information, see page 15 of the
+Combined Group Management Report). Pages 27 and 28 of the
+Combined Group Management Report and Note 34 to the Con-
+solidated Financial Statements contain reconciliations of these
+indicators to the disclosures in the E.ON SE and Subsidiaries Con-
+solidated Statements of Income, Consolidated Balance Sheets,
+and Consolidated Statements of Cash Flows. E.ON plans to
+make changes to the KPIs for the 2020 financial year. These are
+likewise described below.
+Transfer of Residual Power Output Rights
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+17
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+IFRS 16 Leases
+We apply IFRS 16 Leases for the first time effective the start
+of 2019. It supersedes IAS 17 Leases and IFRIC 4 Determining
+whether an Arrangement Contains a Lease. The application of
+IFRS 16's main impact on our Consolidated Balance Sheets is
+an increase in fixed assets (due to the capitalization of right-of-
+use assets) and of financial liabilities (due to the disclosure of
+the corresponding lease liabilities). Initial application resulted in
+lease liabilities of €0.8 billion and right-of-use assets of roughly
+€0.8 billion, based on existing accruals and deferrals. In each case,
+€0.3 billion of the amount was recorded at the discontinued oper-
+ations at Renewables. In the Consolidated Statements of Income,
+the application of IFRS 16 in the year under review resulted in
+depreciation charges on right-of-use assets of €0.1 billion and
+a decline in other operating expenses of likewise €0.1 billion.
+The resulting earnings effect was insignificant (Note 2 to the
+Consolidated Financial Statements contains more information
+about the aforementioned reclassification effects resulting
+from the initial application of IFRS 16).
+Right-of-use assets and corresponding leasing liabilities both
+totaled €3.1 billion at December 31, 2019. Leasing liabilities are
+recorded under economic net debt. In addition, leasing agree-
+ments resulted in cash outflow of €0.4 billion in 2019. Of this,
+€0.1 billion was recorded under operating cash flow, €0.3 billion
+under cash provided by financing activities. Note 32 to the
+Consolidated Financial Statements contains more information
+about the effects of the initial application of IFRS 16.
+Management System
+Our corporate strategy aims to deliver sustainable growth in
+shareholder value. We have in place a Group-wide planning and
+controlling system to assist us in planning and managing E.ON
+as a whole and our individual businesses with an eye to increas-
+ing their value. This system ensures that our financial resources
+are allocated efficiently. We strive to enhance our sustainability
+performance efficiently and effectively as well. We embed
+these expectations progressively more deeply into our organiza-
+tion-across all organizational entities and all processes-by
+means of binding Group-wide policies that set minimum standards
+(for more information, see the Separate Combined Non-Financial
+Report on pages 88 to 101).
+Nord Stream Stake Transferred to Contractual Trust Arrangement
+E.ON Beteiligungen GmbH held all of the shares of PEG Infra-
+struktur AG ("PEGI") and thus an indirect, 15.5-percent stake in
+Nord Stream AG. Nord Stream AG, a project company founded
+in 2005, owns and operates two offshore gas pipelines, each
+with a length of 1,224 kilometers, that transport natural gas
+from Russia to Germany. In a contract dated December 18, 2019,
+E.ON Beteiligungen GmbH sold all of its PEGI shares and thus
+its indirect stake in Nord Stream AG to E.ON Pension Trust e.V.
+("EPT") with effect and for the account of the trust assets of
+MEON Pensions GmbH & Co. KG ("MEON"). The shares were
+transferred at the end of the year (for more information, see
+Note 4 to the Consolidated Financial Statements).
+-3
+-41
+429
+-20
+149
+Total
+39
+-3
+97
+instruments
+Derivative financial
+389
+-1
+-39
+-11
+-9
+85
+Financial
+collateral
+received/
+-1
+-41
+8,250
+8,250
+Trade receivables
+Financial assets
+€ in millions
+Net value
+pledged
+(netting
+agreements)
+Carrying
+amount
+Amount
+offset
+Gross
+amount
+netting
+amount
+Conditional
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2019
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following tables:
+474
+-39
+332
+190
+Equity investments
+The input parameters of Level 3 of the fair value hierarchy for
+equity investments are specified taking into account economic
+developments and available industry and corporate data (see
+also Note 1). A hypothetical 10-percent increase or decrease in
+these key internal valuation parameters as of the balance sheet
+date would lead to a theoretical decrease in market values of
+€52 million or an increase of €64 million, respectively.
+reclassified from hierarchy level 3 to hierarchy level 2 because
+fair values are no longer determined using valuation techniques
+but can be derived from active market prices.
+In 2019, there were no material reclassifications between
+Levels 1 and 2 of the fair value hierarchy. At the end of each
+reporting period, E.ON assesses whether there might be grounds
+for reclassification between hierarchy levels. In 2019, derivative
+financial instruments with a fair value of €39 million were
+The determination of the fair value of derivative financial instru-
+ments is discussed in Note 30.
+The fair value of shareholdings in unlisted companies and of
+debt instruments that are not actively traded, such as loans
+received, loans granted and financial liabilities, is determined by
+discounting future cash flows. Any necessary discounting takes
+place using current market interest rates over the remaining
+terms of the financial instruments.
+8,250
+Notes
+¹FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques
+with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 26).
+19,587
+25,711
+Total liabilities
+36
+1,073
+52
+FVPL
+52
+AmC
+1,073
+The fair values determined using valuation techniques for financial
+instruments carried at fair value are reconciled as shown in the
+following table:
+110
+Fair Value Hierarchy Level 3 Reconciliation
+Jan. 1,
+Dec. 31,
+2019
+OCI
+Losses in
+out of
+Level 3
+Level 3
+into
+income
+statement
+Settlements
+disposals)
+additions)
+2019
+€ in millions
+Gains/
+Transfers
+Gains/
+Losses in
+Sales
+(including
+(including
+Purchases
+Interest-rate and currency derivatives
+Commodity derivatives
+1,585
+Financial assets
+€ in millions
+Net value
+pledged
+agreements)
+Financial
+collateral
+received/
+(netting
+Trade receivables
+Carrying
+amount
+amount
+Gross
+netting
+amount
+Conditional
+191
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2018
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Amount
+offset
+3,786
+3,786
+3,786
+20
+206
+5,323
+115
+5,438
+Total
+128
+206
+334
+115
+449
+Commodity derivatives
+1,183
+20
+1,203
+1,203
+Interest-rate and currency derivatives
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+12,030
+639
+Financial liabilities
+10,393
+78
+1,064
+11,535
+678
+12,213
+Total
+626
+10
+1,064
+1,700
+678
+2,378
+Commodity derivatives
+1,517
+68
+Trade payables
+1,585
+8,709
+8,709
+1,029
+13,698
+678
+14,376
+Total
+980
+178
+1,029
+2,187
+678
+2,865
+1,125
+2,341
+461
+2,802
+2,802
+Interest-rate and currency derivatives
+8,709
+3,682
+Trade payables
+4,401
+1,293
+35
+2
+170
+n/a
+170
+170
+Securities and fixed-term deposits
+Other operating assets
+Derivatives with hedging relationships
+1,367
+FVPL
+1,367
+1,367
+Derivatives with no hedging relationships
+AmC
+3,786
+3,896
+168
+Trade receivables
+1,486
+AmC
+247
+42
+1,113
+1,155
+FVOCI
+1,155
+310
+1,302
+1,612
+FVPL
+1,612
+599
+2,415
+3,014
+3,014
+3,014
+416
+416
+AmC
+5,739
+Trade receivables and other operating assets
+Determined
+using market
+prices
+(Level 1)
+Fair value
+category¹
+ment
+scope of
+IFRS 7
+amounts
+€ in millions
+Carrying
+IAS 39
+measure-
+Carrying
+amounts
+within the
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2018
+Where the value of a financial instrument can be derived from
+an active market without the need for an adjustment, that value
+is used as the fair value. This applies in particular to equities held
+and to bonds held and issued.
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable esti-
+mates of their fair values because of their short maturity.
+189
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Derived from
+6,919
+active market
+(Level 2)
+180
+AmC
+180
+382
+Other financial receivables and financial assets
+305
+n/a
+305
+329
+485
+711
+Financial receivables and other financial assets
+Receivables from finance leases
+110
+FVPL
+110
+664
+Equity investments
+prices
+247
+247
+Cash and cash equivalents
+1,241
+Derivatives with no hedging relationships
+AmC
+1,654
+1,660
+5,097
+8,757
+12,143
+Trade payables and other operating liabilities
+282
+AmC
+282
+463
+Other financial liabilities
+427
+n/a
+327
+1,241
+327
+FVPL
+36
+AmC
+4,401
+7,781
+Other operating liabilities
+289
+AmC
+289
+289
+Put option liabilities under IAS 322
+1,170
+2
+1,172
+n/a
+1,172
+1,172
+Derivatives with hedging relationships
+1,205
+1,241
+Lease obligations
+20
+11,116
+58
+AmC
+269
+413
+11,442
+AmC
+659
+659
+Assets held for sale
+Restricted cash
+698
+698
+FVPL
+698
+AmC
+3,226
+3,924
+3,924
+269
+144
+FVPL
+144
+138
+AmC
+138
+138
+Bank loans/Liabilities to banks
+11,116
+AmC
+8,958
+Liabilities associated with assets held for sale
+8,958
+9,705
+9,886
+Financial liabilities
+14,344
+27,333
+Total assets
+69
+1
+Bonds
+Financial liabilities
+192
+Interest-rate and currency derivatives
+92
+43
+1,867
+1,682
+5,374
+6,829
+68
+2018
+37
+2019
+2019
+Lifetime-ECL trade receivables
+Stage 1-12 month ECL
+The default risks for trade receivables for which no rating infor-
+mation is available and the amount of expected credit losses
+over the remaining term are shown in the following matrix for
+each maturity class:
+Total
+Gross carrying amount default grade
+Gross carrying amount non investment grade
+2018
+622
+6
+6,897
+Past-due by
+31
+41
+1,923
+5,279
+2018
+2019
+2018
+2019
+Not past-due
+€ in millions
+Lifetime-ECL trade receivables
+Gross carrying amount
+Credit Risk Exposure for Trade Receivables for Which No Rating Information Is Available as of December 31, 2019
+1,910
+2,396
+5,417
+Gross carrying amount investment grade
+€ in millions
+Credit Risk Exposure for Financial Assets for Which Rating Information Is Available as of December 31, 2019
+The default risks for financial assets for which rating information
+is available can be found in the following table for each rating
+grade and separately according to the stages of impairment
+existing in 2019:
+€ in millions
+Valuation Allowances for Trade Receivables
+In 2019, valuation allowances for trade receivables changed as
+shown in the following table:
+E.ON distinguishes between two approaches when calculating
+expected future credit losses. If external or internal rating infor-
+mation is available, the expected credit loss is determined on
+the basis of this data. If no rating information is available, E.ON
+determines default ratios on the basis of historical default rates,
+taking into account forward-looking information on economic
+developments. In the E.ON Group, a default or the classification
+of a receivable as uncollectible is assumed after 180 or 360 days,
+depending on the region.
+For trade receivables, expected credit losses are recognized over
+their entire residual term using the simplified method (lifetime
+ECL trade receivables). For other financial assets, E.ON first deter-
+mines the credit loss expected within the first twelve months
+(stage 1-12 month ECL). In derogation of this, in the event of
+a significant increase in the default risk, the expected credit loss
+over the entire residual term of the respective instrument is
+recognized (stage 2-lifetime ECL). A significant increase in the
+default risk is assumed if the internally determined counterparty
+risk has been downgraded by at least three levels since initial
+recognition. If there are objective indications of an actual default,
+an individual impairment loss must be recognized on the income
+statement (stage 3-losses already incurred).
+Impairment losses on financial assets must be recognized not
+only for losses already incurred but also for expected future
+credit losses. E.ON takes into account expected future credit
+losses of financial assets carried at amortized cost, financial
+assets measured at fair value through other comprehensive
+income, and receivables from finance leases.
+Impairments of Financial Assets
+The net gains and losses in the fair value through profit or loss
+measurement category encompass both the changes in fair value
+of equity instruments, from derivative financial instruments and
+gains and losses on realization.
+In addition to impairments of financial assets, net gains and
+losses in the amortized cost category are due primarily to interest
+income from financial assets and liabilities and effects from the
+currency translation of financial liabilities.
+The net result of the category fair value through OCI results in
+particular from interest income and proceeds from the sale of
+fair value through OCI securities.
+92
+-965
+65
+41
+Fair Value through OCI
+Total
+711
+-136
+Balance as of January 1
+61 to 90 days
+Disposals
+Other¹
+There were no significant changes in valuation allowances in
+2019 for other financial assets measured at amortized cost or at
+fair value through other comprehensive income, or for receivables
+from finance leases.
+194
+Notes
+-805
+-957
+8
+-5
+-160
+-283
+150
+136
+-803
+-805
+2018
+2019
+¹The item Other includes currency translation differences.
+Balance as of December 31
+Write-downs
+1,427
+388
+254
+197
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated both
+by external financing in a variety of foreign currencies, and by
+shareholder loans from within the Group denominated in foreign
+currency. Financial transaction risks are generally hedged.
+The E.ON Group is also exposed to operating and financial
+transaction risks attributable to foreign currency transactions.
+The subsidiaries are responsible for managing their operating
+currency risks and are generally required to hedge their currency
+risks through E.ON SE. E.ON SE coordinates hedging throughout
+the Group companies and makes use of external derivatives as
+needed. It may either directly close out foreign currency positions
+that have been tendered, in whole or in part, through external
+transactions, or keep the position open within approved limits.
+The one-day value-at-risk (95 percent confidence) for transactional
+foreign currency positions totaled €1.1 million as of December 31,
+2019. In the prior year, the one-day value-at-risk (99 percent
+confidence) from the translation of deposits and borrowings
+denominated in foreign currency, plus foreign-exchange deriv-
+atives, was €67 million as of December 31, 2018. The reason
+for the change in method is the harmonization of the level of risk
+used for quantifying currency risks at E.ON and innogy.
+are employed as needed. The hedges qualify for hedge accounting
+under IFRS as hedges of net investments in foreign operations.
+The Group's translation risks are reviewed at regular intervals
+and the level of hedging is adjusted whenever necessary. The
+respective debt factor, net assets and the enterprise value
+denominated in the foreign currency are the principal criteria
+governing the level of hedging.
+Because it holds interests in businesses outside of the euro area,
+currency translation risks arise within the E.ON Group. Fluctua-
+tions in exchange rates produce accounting effects attributable
+to the translation of the balance sheet and income statement
+items of the foreign consolidated Group companies included in
+the Consolidated Financial Statements. Translation risks are
+hedged through borrowing in the corresponding local currency,
+which may also include shareholder loans in foreign currency.
+In addition, derivative and non-derivative financial instruments
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+Foreign Exchange Risk Management
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from value-at-risk ("VaR")
+and sensitivity analyses are "forward-looking statements" that
+involve risks and uncertainties. Actual results could differ mate-
+rially from those projected due to actual, unforeseeable develop-
+ments in the global financial markets. The methods used by the
+Company to analyze risks should not be considered forecasts of
+future events or losses. For example, E.ON faces certain risks that
+are either non-financial or non-quantifiable. Such risks princi-
+pally include country risk, operational risk, regulatory risk and
+legal risk, which are not represented in the following analyses.
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group to
+identify, measure and control credit risks.
+3. Credit Risks
+196
+Notes
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest
+rates, commodities and asset management. These risks create
+volatility in earnings, equity, debt and cash flows from period
+to period. E.ON has developed a variety of strategies to limit or
+eliminate these risks, including the use of derivative financial
+instruments, among others.
+2. Price Risks
+Interest Risk Management
+E.ON SE determines the Group's financing requirements on the
+basis of short- and medium-term liquidity planning. The financing
+of the Group is controlled and implemented on a forward-looking
+basis in accordance with the planned liquidity requirement or
+surplus. Relevant planning factors taken into consideration include
+operating cash flow, capital expenditures, divestments, margin
+payments and the maturity of bonds and commercial paper.
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities. Positions based on fixed interest rates, on the other
+hand, are subject to changes in fair value resulting from the
+volatility of market rates. E.ON seeks a specific mix of fixed-
+interest and floating-rate debt over time. This is influenced,
+among other factors, by the type of business model, existing
+liabilities as well as the regulatory framework in which E.ON
+operates. To manage the interest rate position, several instru-
+ments, including derivatives, are deployed.
+As of December 31, 2019, the E.ON Group held interest rate
+derivatives with a nominal value of €4,306 million (2018:
+€4,495 million).
+To the extent possible, pledges of collateral are negotiated with
+counterparties for the purpose of reducing credit risk. Accepted
+as collateral are guarantees issued by the respective parent
+companies or evidence of profit and loss pooling agreements in
+combination with letters of awareness. To a lesser extent, the
+Company also requires bank guarantees and deposits of cash and
+securities as collateral to reduce credit risk. Risk-management
+collateral was accepted in the amount of €1,481 million.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature of
+the operating activities and the credit risk, additional credit risk
+monitoring and controls are performed both by the units and
+by Corporate Headquarters. Regular reports on credit limits,
+including their utilization, are submitted to the Risk Committee.
+Intensive, standardized monitoring of quantitative and qualita-
+tive early-warning indicators, as well as close monitoring of
+the credit quality of counterparties, enable E.ON to act early in
+order to minimize risk.
+credit limits is subject to certain minimum requirements, which
+are based on Group-wide credit risk management guidelines.
+Long-term operating contracts and asset management trans-
+actions are not comprehensively included in this process. They
+are monitored separately at the level of the responsible units.
+In order to minimize credit risk arising from operating activities
+and from the use of financial instruments, the Company enters
+into transactions only with counterparties that satisfy the Com-
+pany's internally established minimum requirements. Maxi-
+mum credit risk limits are set on the basis of internal and (where
+available) external credit ratings. The setting and monitoring of
+Credit Risk Management
+Commodity exposures and risks are reported across the Group
+on a monthly basis to the members of the Risk Committee for
+both the E.ON and the innogy portfolios.
+Commodity risks at the innogy distribution companies are
+hedged in accordance with the hedging guidelines of innogy SE.
+Commodity risks are hedged using limits. Policies applicable to the
+entire Group specify clear structures and processes for handling
+commodity risks. They are consistent with the basic requirements
+for commodity risk management within the E.ON Group.
+A key foundation of the commodity risk management system is
+the Group-wide Commodity Risk Policy and the corresponding
+internal policies of the units. These specify the control principles
+for commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+As of December 31, 2019, the E.ON Group primarily held elec-
+tricity and gas derivatives with a nominal value of €32,831 million
+(2018: €4,076 million).
+198
+Notes
+Due to the decentralized governance approach and the primary
+focus on procurement and purely hedging transactions, the
+allocation of risk capital is no longer necessary. The processes
+and operational management models within the trading system
+are monitored by the local market risk teams and centrally
+managed by the Risk Management department. At the end of
+2019, the open position from the procurement on the markets
+in Germany, the UK, the Czech Republic, Sweden, Romania,
+Hungary and the innogy companies for the reporting period from
+2020 to 2022 was not more than 4,100 GWh per commodity
+in each case. The biggest drivers primarily relate to the special
+market conditions in Romania, where hedging activities are
+carried out within the approved commodity hedging strategy.
+Since the spinoff of Uniper, E.ON has established procurement
+capabilities for its sales business and thus ensured market access
+for E.ON's remaining energy production. In the normal course
+of business of the underlying energy production and retail sales
+activities, E.ON's individual management units are exposed to
+uncertain commodity market prices, which impacts operating
+gains and costs. All external trading on commodity markets
+must be related to reducing open commodity positions and be
+undertaken in strict accordance with approved commodity
+hedging strategies.
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the value
+of the portfolio while reducing the potential negative deviation
+from target EBIT.
+The E.ON portfolio of physical assets, long-term contracts
+and end-customer sales is exposed to substantial risks from
+fluctuations in commodity prices. The principal commodity
+prices to which E.ON is exposed relate to electricity, gas, green
+and emission certificates.
+Commodity Price Risk Management
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for internal
+risk controlling and reflects the economic position of the E.ON
+Group. A one-percentage-point upward or downward change in
+interest rates (across all currencies) would raise or lower interest
+charges by ±€59.3 million (2018: ±€8.0 million) in the subse-
+quent fiscal year.
+With interest rate derivatives included, the share of financial
+liabilities with floating interest rates was 10 percent as of Decem-
+ber 31, 2019 (2018: 0 percent). Under otherwise unchanged
+circumstances, the volume of financial liabilities with fixed interest
+rates, which amounted to €25.8 billion at year-end 2019, would
+decline to €24.2 billion in 2020 and €21.5 billion in 2021. The
+effective interest rate duration of the financial liabilities, including
+interest rate derivatives, was 10.1 years as of December 31,
+2019 (2018: 13.5 years). The volume-weighted average interest
+rate of the financial liabilities, including interest rate derivatives,
+was 3.8 percent as of December 31, 2019 (2018: 5.3 percent).
+Fair Value through P&L
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+1. Liquidity Management
+29
+38
+188
+91 to 180 days
+4
+10
+21
+75
+6
+10
+47
+130
+5
+18
+129
+389
+109
+8
+The primary objectives of liquidity management at E.ON consist
+of ensuring ability to pay at all times, the timely satisfaction of
+contractual payment obligations and the optimization of costs
+within the E.ON Group.
+more than 180 days
+153
+Due to legal restrictions, innogy SE and innogy subsidiaries are
+not currently fully integrated into E.ON Group risk management.
+Risks at innogy are additionally managed by innogy SE and
+reported to E.ON. innogy uses separate IT systems for some
+aspects of the management and quantification of its risks.
+Separate Risk Committees are responsible for the maintenance
+and further development of the strategy set by the Management
+Board of E.ON SE with regard to commodity, treasury and credit
+risk management policies.
+E.ON uses a Group-wide treasury, risk management and report-
+ing system. This system is a standard information technology
+solution that is fully integrated and is continuously updated.
+The system is designed to provide for the analysis and monitor-
+ing of the E.ON Group's exposure to liquidity, foreign exchange
+and interest risks. On a Group-wide basis, Financial Controlling
+monitors and controls credit risks for banks, and Risk Manage-
+ment monitors and controls industrial enterprises. These activ-
+ities are carried out using a uniform standard software package.
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within
+the confines of the Group's overall guidelines. To ensure efficient
+risk management at the E.ON Group, the Trading (Front Office),
+Financial Controlling (Middle Office) and Financial Settlement
+(Back Office) departments are organized as strictly separate units.
+Risk controlling and reporting in the areas of interest rates,
+currencies and credit for banks and liquidity management is
+performed by the Financial Controlling department, while risk
+controlling and reporting in the area of commodities and in the
+credit area for industrial enterprises is performed at Group level
+by a separate department.
+Principles
+Risk Management
+195
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+140
+295
+2,311
+6,706
+Total
+86
+187
+645
+Trade payables
+-659
+Financial liabilities Amortized Cost
+6,213
+8
+20
+29
+1,479
+1,909
+1,017
+3,894
+415
+139
+63
+23
+946
+50
+20,102
+7,455
+454
+8,555
+22,233
+Trade payables
+21,437
+Cash outflows for trade payables and other operating liabilities
+26
+3
+21
+5,473
+Other operating liabilities
+57
+318
+1,724
+Put option liabilities under IAS 32
+2,687
+689
+673
+5,531
+Derivatives (with/without hedging relationships)
+8,709
+3,427
+3,276
+Cash
+outflows
+from 2025
+Cash
+outflows
+2022-2024
+206
+4,067
+115
+4,182
+206
+206
+115
+321
+1,627
+580
+2,207
+2,207
+1,654
+1,654
+1,654
+Total
+Commodity derivatives
+580
+1,012
+3,281
+Transactions and business relationships resulting in the deriva-
+tive financial receivables and liabilities presented are largely
+concluded on the basis of standard contracts that permit the
+conditional netting of open transactions in the event that a
+counterparty becomes insolvent.
+outflows
+2021
+outflows
+2020
+Cash outflows for financial liabilities
+Financial guarantees
+Other financial liabilities
+Lease obligations
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Cash
+Cash
+Cash Flow Analysis as of December 31, 2019
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities included
+in the scope of IFRS 7:
+Notes
+Collateral pledged to and received from financial institutions in
+relation to these liabilities and assets limits the utilization of
+credit lines in the fair value measurement of interest-rate and
+currency derivatives, and is shown in the table. The collateral for
+commodity derivatives presented in the table relate to variation
+margin payments.
+The netting agreements are derived from netting clauses con-
+tained in master agreements including those of the International
+Swaps and Derivatives Association (ISDA), the German Master
+Agreement for Financial Derivatives Transactions (DRV), the
+European Federation of Energy Traders (EFET) and the Financial
+Energy Master Agreement (FEMA).
+The E.ON Group did not net interest-rate and currency derivatives
+and non-derivative financial instruments. Compulsory netting
+is carried out for commodity derivatives if the netting criteria
+pursuant to IAS 32.42 are met cumulatively.
+692
+2,770
+Cash outflows for liabilities within the scope of IFRS 7
+9,573
+11,585
+2
+1
+2
+4,512
+46
+180
+128
+20
+2,614
+728
+560
+3,387
+1,654
+9,099
+1,868
+1,822
+690
+2,012
+909
+2,512
+189
+Financial assets Amortized Cost
+2018
+2019
+€ in millions
+-25
+Net Gains and Losses by Category
+The net gains and losses from financial instruments by IFRS 9
+category are shown in the following table:
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+193
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+For financial liabilities that bear floating interest rates, the rates
+that were fixed on the balance sheet date are used to calculate
+future interest payments for subsequent periods as well. Finan-
+cial liabilities that can be terminated at any time are assigned
+to the earliest maturity band in the same way as put options that
+are exercisable at any time. All covenants were complied with
+during 2019.
+Financial guarantees with a total nominal volume of €8 million
+(2018: €8 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees. E.ON has
+recognized a liability for this in the amount of €8 million (2018:
+€8 million).
+11,761
+2,777
+2,662
+-1,059
+8
+1
+Other operating liabilities
+Put option liabilities under IAS 32
+Derivatives (with/without hedging relationships)
+Trade payables
+Cash outflows for financial liabilities
+Financial guarantees
+Other financial liabilities
+Liabilities from finance leases
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Cash Flow Analysis as of December 31, 2018
+25,003
+9,247
+4,906
+27,650
+Cash outflows for trade payables and other operating liabilities
+Cash outflows for liabilities within the scope of IFRS 7
+1
+Cash
+2019
+23
+436
+255
+115
+45
+52
+42
+13
+5
+86
+8,801
+1,739
+1,749
+1,430
+Cash
+outflows
+from 2024
+Cash
+outflows
+2021-2023
+Cash
+outflows
+2020
+outflows
+83
+up to 30 days
+31 to 60 days
+2,176
+-153
+-17
+70
+65
+154
+-413
+1,305
+-328
+86
+-107
+4
+-1,851
+-18
+-1
+-1
+3,235 2,989
+495
+320
+།
+1
+-2,323
+-3
+-17
+-53
+347
+521
+56
+44
+292
+51
+-157
+399
+ཡཱརྨཱ།
+འ ་「་」
+-72
+199
+||||
+690
+657
+313
+722
+1,037
+207
+.. ..
+ནཱཡ」
+4,407
+5,492 3,523
+4,087
+The following table shows the reconciliation of operating cash
+flow before interest and taxes to operating cash flow from
+continuing operations:
+-708
+-1,036
+4,784
+2,487
+Republic (operating cash flow)
+52
+Operating cash flow
+2,965
+Reclassified businesses at Renewables¹
+Investments from continuing operations
+Reclassified businesses at Renewables¹
+2,853
+-558
+¹Deconsolidated as of September 18, 2019.
+Reclassified innogy business in the Czech
+Republic
+-52
+Operating cash flow from continuing
+operations
+2,813
+2,295
+-100
+Reclassified innogy business in the Czech
+-628
+-754
+The following table shows the reconciliation in segment reporting
+of the investments shown in segment reporting to the investments
+of continuing operations. The latter correspond to payments for
+investments reported in the Consolidated Statements of Cash
+Flows.
+Reconciliation of Operating Cash Flow
+€ in millions
+2019
+2018
+Reconciliation of Investments
+Operating cash flow before interest and
+taxes
+4,407
+4,087
+2019
+2018
+Interest payments
+-740
+-606
+Investments
+5,492
+3,523
+Tax payments
+-251
+-340
+-281
+བྷབྷཝ།
+41,003
+2018
+29,396
+¹Deconsolidated as of September 18, 2019.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+205
+innogy
+-688
+Renewables³
+Non-Core Business
+Generation Turkey
+Corporate
+Functions/Other
+Consolidation
+E.ON Group³
+2019
+2018
+2019
+PreussenElektra
+-481
+30,084
+41,484
+207
+507
+395
+¹Adjusted for non-operating effects.
+2Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in
+income/loss from companies accounted for using the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
+3Operating business including the divisions in the Renewables segment reclassified as discontinued operations in accordance with IFRS 5 and deconsolidated as of September 18, 2019
+The following table shows the reconciliation in segment report-
+ing of operating cash flow before interest and taxes to operating
+cash flow:
+Reconciliation of Sales
+E.ON Group
+Reclassified businesses
+at Renewables¹
+E.ON Group
+(continuing operations)
+€ in millions
+2019
+2018
+2019
+2018
+2019
+Sales
+2018
+Of the equity result, which is reported in the segment information,
+€57 million (2018: €44 million) is attributable to discontinued
+operations and the activities in the Renewables segment that
+were deconsolidated with effect from September 18, 2019.
+2019
+2019
+-4,441
+0
+0
+10,444
+1,596
+1,754
+1,174
+1,370
+-4,501
+622
+-4,501
+-4,440
+41,484
+30,084
+-335
+421
+55
+1,277
+878
+644
+606
+608
+970
+2018
+2019
+2018
+2019
+2018
+2019
+2018
+10,381
+682
+784
+1,174
+1,370
+14
+38
+1
+41,484
+30,084
+63
+914
+2018
+154
+¹Deconsolidated as of September 18, 2019.
+206
+2,209
+8,758
+6,667
+284
+282 41,484 30,084
+External sales by
+location of seller
+19,281 13,653 10,713
+7,702
+7,740
+2,203 9,057
+6,208
+Intangible assets
+1,634
+600
+355
+287
+Right-of-use assets
+2,138
+2,718
+10,068
+External sales by
+location of customer
+Geographic Segment Information
+208
+Germany
+United Kingdom
+Sweden
+Europe (other)
+€ in millions
+2019
+20,198 13,224
+2018
+2018
+2019
+2018
+2019
+2018
+2019
+Other
+2018 2019
+Total
+2018
+2019
+126
+183
+48
+145 1,947 1,130
+214
+1,745
+5,232
+2,603
+E.ON's customer structure resulted in a focus on the Germany
+region. Aside from that, there was no major concentration in
+any given geographical region or business area. Due to the large
+number of customers the Company serves and the variety of
+its business activities, there are no individual customers whose
+business volume is material compared with the Company's total
+business volume.
+(35) Compensation of Supervisory Board and
+Management Board
+Supervisory Board
+Total remuneration to members of the Supervisory Board in
+2019 amounted to €4.3 million (2018: €4.1 million).
+71 1,509
+As in 2018, there were no loans to members of the Supervisory
+Board in 2019.
+Additional information about the members of the Supervisory
+Board is provided on pages 240 and 241.
+Management Board
+Total compensation of the Management Board in 2019 amounted
+to €15.6 million (2018: €15.9 million). This consisted of base
+salary, bonuses, other compensation elements and share-based
+payments.
+In 2019, the members of the Management Board were granted
+third-tranche virtual shares under the E.ON Performance Plan
+(2018: second tranche of the E.ON Performance Plan) with
+a value of €5.2 million (2018: €4.9 million) and a total number
+of shares of 780,815 (2018: 760,078).
+Total payments to former members of the Management Board
+and their beneficiaries amounted to €10.8 million (2018:
+€12.5 million). Provisions of €161.3 million (2018: €155.8 million)
+have been established for the pension obligations to former
+members of the Management Board and their beneficiaries.
+As in 2018, there were no loans to members of the Management
+Board in 2019.
+The Management Board's compensation structure and the indi-
+vidual amounts for each member of the Management Board as
+well as additional disclosures on the amounts are presented on
+pages 70 through 85 in the Compensation Report.
+Additional information about the members of the Management
+Board is provided on page 242.
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are
+presented on page 84 and 85 in the Compensation Report.
+70
+461
+787
+295
+19
+280 41,484 30,084
+3
+4,138 2,162
+3,109
+Property, plant and
+equipment
+25,135
+9,557
+697
+620
+4,762
+4,593 5,235
+3,287
+3
+35,832
+18,057
+Companies accounted for
+under the equity method
+3,192
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the equity
+method, by geographic area:
+Notes
+from services.
+The "Other" item consists in particular of revenues generated
+3,953
+Income/Loss from equity investments
+58
+44
+EBIT
+Non-operating adjustments
+Net book gains/losses
+1,409
+1,351
+3,997
+-1,521
+-366
+-857
+Restructuring/cost-management expenses
+Effects from market valuation derivatives
+Impairments (+)/Reversals (-)
+Carryforward of hidden reserves (-) and liabilities (+) from the innogy transaction
+Other non-operating earnings
+1,526
+Income/Loss from continuing operations before financial results and income taxes
+2018
+2019
+Adjusted EBIT
+Adjusted EBIT, a measure of earnings before interest and taxes
+("EBIT") adjusted to exclude non-operating effects, is used at
+E.ON for purposes of internal management control and as the
+most important indicator of a business's sustainable earnings
+power.
+The E.ON Management Board is convinced that adjusted EBIT is
+the most suitable key figure for assessing operating performance
+because it presents a business's operating earnings independently
+of non-operating factors, interest, and taxes.
+Unadjusted EBIT represents the Group's income/loss reported
+in accordance with IFRS before financial results and income
+taxes, taking into account the net income/expense from equity
+investments. To improve its meaningfulness as an indicator of
+the sustainable earnings power of the E.ON Group's business,
+unadjusted EBIT is adjusted for certain non-operating effects.
+Operating earnings also include income from investment sub-
+sidies for which liabilities are recognized.
+The non-operating earnings effects for which EBIT is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market of derivative
+financial instruments used for hedging and, where material,
+book gains/losses, certain restructuring expenses, impairment
+charges and reversals recognized in the context of impairment
+tests on non-current assets, on equity investments in affiliated or
+associated companies and on goodwill, and other contributions
+to non-operating earnings. In addition, effects from the valuation
+of certain provisions on the balance sheet date are disclosed in
+non-operating earnings.
+In addition, earnings from discontinued operations and activities
+in the Renewables segment that were deconsolidated with effect
+from September 18, 2019, adjusted for non-operating effects,
+are also included in adjusted EBIT. Pursuant to IFRS 5, equity
+carried forward from investments in discontinued operations is
+to be terminated. However, this was continued within the frame-
+work of internal management and was then also included in
+adjusted EBIT. As with the treatment of the effects of the equity
+carried forward, depreciation in discontinued operations, which
+is generally to be deferred in accordance with IFRS 5, is continued
+and carried forward in adjusted EBIT.
+Net book gains declined significantly in the 2019 fiscal year. They
+mainly comprise the effects of the deconsolidation of PEGI as
+parent company of Nord Stream. The prior-year figure included
+positive effects from the disposal of Uniper, Hamburg Netz, and
+E.ON Gas Sverige and, offsetting these effects, the overall nega-
+tive gain on the disposal of Enerjisa Enerji. In addition, income
+from the disposal of securities was lower than in the prior year.
+Restructuring expenses were significantly above the level of the
+2018 reporting period and in 2019 mainly included expenses in
+connection with the acquisition of innogy. This item also includes
+the expenses incurred in connection with the restructuring
+measures initiated at npower, the UK sales business of innogy.
+Derivative financial instruments resulted in a non-operating
+effect of -€707 million in fiscal year 2019 (previous year:
++€610 million). Negative effects in the 2019 reporting period
+resulted primarily from hedging price fluctuations, particularly
+in Customer Solutions, and from the marking to market of
+derivatives in the innogy segment. The value in 2018 is mainly
+attributable to the derivative financial instruments in connection
+with contractual rights and obligations from the sale of the
+Uniper shares. In addition, all effects resulting from so-called
+"failed own use" contracts (see Note 2 for further information)
+in non-operating earnings are summarized in the item "Effects
+from derivative financial instruments."
+In the 2019 reporting period, impairments were recognized in
+particular in the areas of Customer Solutions in the United
+Kingdom, Energy Networks Germany and innogy. In the prior
+year, impairments were incurred primarily in the UK Customer
+Solutions segment and E.ON Business Solutions.
+Effects that are to be initially recognized from the subsequent
+measurement of hidden reserves and charges in connection with
+the preliminary innogy purchase price allocation and newly
+recognized effects from the measurement of financial assets in
+the innogy segment are presented separately. These effects will
+be balanced out in subsequent periods.
+Other non-operating earnings were on a par with the previous
+year and in 2019 include, among other elements, positive effects
+from realized hedging transactions for certain currency risks.
+The following table shows the reconciliation of earnings before
+interest and taxes to adjusted EBIT or adjusted EBITDA:
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+207
+Reconciliation of Income before Financial Results and Income Taxes
+€ in millions
+Reclassified businesses of Renewables (adjusted EBIT)
+Notes
+Adjusted EBIT
+64
+Additional Entity-Level Disclosures
+External sales by product break down as follows:
+Segment Information by Product
+€ in millions
+Electricity
+Gas
+Other
+Total
+Page 27 of the Combined Group Management Report provide a
+more detailed explanation of the reconciliation of adjusted EBIT
+to the net income/loss reported in the Consolidated Financial
+Statements.
+2019
+30,166
+22,456
+8,178
+5,799
+3,140
+1,829
+41,484
+30,084
+2018
+4,840
+5,558
+331
+707
+-610
+275
+61
+252
+-161
+-179
+300
+513
+3,235
+2,989
+Impairments (+)/Reversals (-)
+66
+45
+Scheduled depreciation and amortization
+1,986
+1,475
+Reclassified businesses of Renewables (scheduled depreciation and amortization, impairments and reversals)
+Adjusted EBITDA
+271
+819
+35
+€ in millions
+454
+Undiscounted lease payments
+Income of variable lease payments
+1
+2019
+€ in millions
+Operating-Lease
+Income from leasing
+69
+11
+Due within 1 year
+Thereof income of variable lease payments
+Due in 1 to 2 years
+72
+¹New account due to IFRS 16 implementation, no prior-year figures.
+Due in 2 to 3 years
+62
+55
+Due in 3 to 4 years
+86
+Financial income from net investments
+E.ON as Lessor-Operating Leases¹
+Gain/loss on the disposal of assets
+47
+56
+12
+44
+143
+27
+15
+131
+484
+129
+15
+370
+The following effects from activity as a lessor are recognized for
+the period under review:
+E.ON as Lessor-Effects within the Income
+Statement¹
+finance leases with variable lease payments. Payments recog-
+nized as financing income from net investments increase oper-
+ating cash flow.
+The following payments are expected from existing operating
+leases:
+2019
+€ in millions
+Finance-Lease
+Results from the disposal of assets were recognized in income.
+Cash flows from operating leases are allocated to cash flow
+before interest and taxes. This also applies to flows from
+16
+Due in 4 to 5 years
+49
+144
+Expenses
+560
+2,496
+Associated companies
+216
+2,112
+Joint ventures
+96
+107
+Other related parties
+237
+380
+Receivables
+627
+374
+Associated companies
+456
+4
+Other related parties
+11
+38
+123
+447
+Total
+¹New account due to IFRS 16 implementation, no prior-year figures.
+Notes
+202
+(33) Transactions with Related Parties
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, including associated companies
+accounted for under the equity method and their subsidiaries.
+Receivables and payables consist primarily of lease obligations
+from leaseback models and trade receivables. Joint ventures
+and subsidiaries that are not fully consolidated continue to be
+accounted for as associated companies. Transactions with related
+parties in the reporting year and in the previous year are sum-
+marized as follows:
+Related-Party Transactions
+2018
+€ in millions
+2019
+Income
+676
+1,379
+Associated companies
+542
+1,224
+Joint ventures
+Due in more than 5 years
+166
+63
+20
+Networks
+Storage and production capacities
+Technical equipment and machinery
+Fleet, office and business equipment
+¹New account due to IFRS 16 implementation, no prior-year figures.
+Accumulated
+depreciation
+2019
+E.ON as Lessee-Effects within the Income Statement¹
+€ in millions
+Expenses from short-term leases (<12 months)
+Land and buildings
+2019
+100
+Expense for low-value leases not included in the above
+short-term leases
+16
+81
+Variable lease payments
+2
+2
+Interest expense from leasing
+63
+€ in millions
+Right-of-use Assets¹
+Due to the simplification provisions used, the recognition of a
+right-of-use asset is not necessary for low-value leases and
+leases with a term of less than twelve months. Instead, a lease
+expense is recognized in these cases. The following amounts
+are recognized in the income statement in connection with
+leases in the fiscal year:
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+199
+The levels and details of financial assets received as collateral
+are described in more detail in Notes 18 and 26.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements
+and exchange clearing.
+There is no credit risk with respect to the exchange-traded for-
+ward and option contracts with an aggregate nominal value of
+€1,073 million as of December 31, 2019 (2018: €630 million).
+For the remaining financial instruments, the maximum risk of
+default is equal to their carrying amounts.
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest money
+at leading local banks. Standardized credit assessment and
+limit-setting is complemented by daily monitoring of CDS levels
+at the banks and at other significant counterparties.
+Asset Management
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 25) and cash investments, financial investments totaling
+€3.5 billion (2018: €1.4 billion) were held predominantly by
+German E.ON Group companies as of December 31, 2019. The
+increase of €2.1 billion is related to the recognition of investments
+of the innogy companies.
+These financial assets are invested on the basis of an accumula-
+tion strategy (total-return approach), with investments broadly
+diversified across the various asset classes, for example the
+money market, bond and equity asset classes, as well as alter-
+native asset classes like real estate. The majority of the assets are
+held in investment funds managed by external fund managers.
+Corporate Asset Management at E.ON SE, which is part of the
+Company's Finance Department, is responsible for continuous
+monitoring of overall risks and those concerning individual fund
+managers. The three-month VaR with a 98-percent confidence
+interval for these financial assets was €109 million (2018:
+€54 million). The increase resulted primarily from the above-
+mentioned additional asset investments and, to a lesser extent,
+from changes to the market situation or risk assumption.
+As of December 31, 2018, Versorgungskasse Energie VVaG was
+in liquidation (VKE i.L.); at that date, it managed €78.8 million
+in financial investments. The company was deconsolidated on
+June 30, 2019.
+Notes
+200
+(32) Leasing
+E.ON as Lessee
+Since 2019, transactions in which E.ON is the lessee have been
+recognized under the right-of-use model pursuant to IFRS 16.
+Initial application of the standard was made using the modified
+retrospective method. In addition to reclassified arrangements
+that had previously been classified as finance leases with a
+present value of €327 million, the right-of-use assets as of
+January 1, 2019, also include the initial recognition of previous
+operating leases with a present value of €536 million after
+taking into consideration prepayments and accruals (see Note 2).
+The tables in Note 14 present the changes in the assets in the
+reporting year. The conclusion of new agreements and the
+presentation of changes in estimates as well as modifications
+resulted in an addition of €374 million in the reporting year.
+Impairments of right-of-use assets in the amount of €229 million
+are allocated among the asset classes as follows:
+issue residual value guarantees. Leases in which E.ON is the lessee
+but where the lease has not yet begun result in potential future
+cash outflows of €556 million. The existing lease liabilities do not
+contain any covenant clauses that are linked to financial ratios.
+As of the balance sheet date of December 31, 2019, right-of-use
+assets in the amount of €3,109 million are offset by lease liabil-
+ities with a present value of €3,144 million. This is recognized
+under financial liabilities (see Note 26); the short-term portion
+of the lease liabilities totals €411 million. The maturity structure
+of the future payment obligations from leases is presented in
+Note 31.
+49
+48
+3
+1
+New account due to IFRS 16 implementation, no prior-year figures.
+Undiscounted
+lease payments
+Unrealized
+interest income
+Discounted
+non-guaranteed
+residual value
+Present value
+of minimum
+lease payments
+2019
+Total
+2019
+2019
+79
+29
+50
+75
+25
+50
+68
+2019
+Due in more than 5 years
+Due in 4 to 5 years
+Due in 3 to 4 years
+43
+Gain/Loss from sale and leaseback transactions
+E.ON operates as a lessee in the areas of land and buildings, net-
+works and vehicle fleets, in particular. To ensure operative flexi-
+bility, E.ON enters into agreements relating to the extension and
+termination of real estate leases, in particular. In determining
+the term of the contract, E.ON considers all facts and circum-
+stances that have an economic influence on the exercise of the
+extension option or the non-exercise of the termination option.
+In the determination of the lease liability, and correspondingly,
+of the right-of-use assets, all reasonably certain cash outflows
+are taken into consideration. As of December 31, 2019, potential
+future cash outflows in the amount of €322 million were not
+included in the lease liability as it is not reasonably certain that
+the leases will be renewed or not terminated. Variable lease
+payments occur in only immaterial amounts and E.ON does not
+¹New account due to IFRS 16 implementation, no prior-year figures.
+The liabilities from short-term agreements with a term of less
+than twelve months entered into for the next fiscal year do not
+vary materially from the expenses of the current fiscal year.
+Cash outflows from lease agreements totaled €377 million in
+the fiscal year; this will be allocated to operating cash flow in
+the amount of €85 million. This includes the lease expense for
+short-term and low-value leases as well as the expense from
+variable lease payments and interest expense for the period.
+Payments allocated to payments for the lease liability are recog-
+nized in cash flows from financing activities in the amount of
+€292 million.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+201
+E.ON as Lessor
+E.ON enters into leases as lessor to a limited extent. Finance
+leases includes technical equipment and machinery, in particular
+generation plants, that has been transferred to customers for
+use. Operating leases includes assets that have been transferred
+for use, in particular real estate, heat and electricity generation
+plants and lines. There are no material risks in connection with
+rights retained to the assets temporarily transferred for use,
+with the result that risk management strategies, in particular,
+are not necessary. Residual-value guarantees are only entered
+into on an individual basis for purposes of additional hedging.
+The present value of minimum lease payments is recognized
+under receivables from finance leases. The short-term portion
+totals €50 million (see Note 17). There were no material changes
+to net investments in the period under review. The nominal and
+present values of the lease payments had the following maturities:
+E.ON as Lessor-Finance Leases¹
+€ in millions
+Due within 1 year
+Due in 1 to 2 years
+Due in 2 to 3 years
+Lease income sublease
+Joint ventures
+18
+3
+Sales
+6,263
+6,243
+1,024
+989
+1,583
+1,537
+7,313
+312
+6,798
+7,633
+8,283
+7,556
+Depreciation and
+amortization¹
+Adjusted EBIT
+Equity-method earnings²
+Operating cash flow before
+7,683
+332
+59
+57
+4,819 1,018
+978
+670
+598
+7,178
+6,678
+7,626
+7,574
+7,951
+7,244
+Intersegment sales
+1,473
+1,424
+6
+11
+913
+939
+135
+120
+interest and taxes
+4,790
+Investments
+བྷ༄།
+921
+62
+451
+159
+160
+11
+142
+143
+111
+-183
+12
+652
+166
+273
+-86
+92
+199
+211
+9
+10
+-210
+-95
+-122
+||||
+770
+1,559
+947
+802
+895
+69
+539
+771
+341
+བྷི」། ༄」ཚོ」
+|| 9|3|
+-644
+-593
+-153
+-150
+-239
+-232
+-39
+-33
+བྷ」བྷ། ཟ」
+External sales
+498
+2019
+20
+In 2019, E.ON generated income from transactions with related
+companies through the delivery of gas and electricity to distrib-
+utors and municipal entities, especially municipal utilities. The
+relationships with these entities do not generally differ from those
+that exist with municipal entities in which E.ON does not have
+an interest. Expenses from transactions with related companies
+are generated mainly through electricity and gas deliveries as
+well as through management fees, IT services and third-party
+services.
+For the first six months of 2018, until their sale to Fortum, the
+companies of the Uniper Group generated revenue in the amount
+€820 million, interest income of €0 million and other income
+of €100 million, as well as other expenses in the amount of
+€1,957 million and interest expenses in the amount of €6 million.
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2019, include €21 million (2018: €48 million) in trade
+payables and shareholder loans to operators of jointly-owned
+nuclear power plants. These shareholder loans bear interest
+based on Euribor at 1.0 percent (2018: 1.0 percent) and have
+no fixed maturity. E.ON continues to have in place with these
+power plants a cost-transfer agreement and a cost-plus-fee
+agreement for the procurement of electricity. The settlement of
+such liabilities occurs mainly through clearing accounts.
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory
+Board of E.ON SE) must be disclosed.
+The total expense for 2019 for members of the Management
+Board amounted to €10.3 million (2018: €11.1 million) in short-
+term benefits and €2.6 million (2018: €2.3 million) in post-
+employment benefits. The cost of post-employment benefits
+is equal to the service and interest cost of the provisions for
+pensions. Additionally taken into account in 2019 were actuarial
+losses of €1.4 million (2018: actuarial gains of €0.4 million).
+The expense determined in accordance with IFRS 2 for existing
+commitments arising from share-based payment in 2019 was
+€5.4 million (2018: €3.6 million).
+Provisions for these commitments amounted to €14.5 million
+as of December 31, 2019 (2018: €12.8 million).
+32
+The members of the Supervisory Board received a total of
+€4.3 million for their activity in 2019 (2018: €4.1 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts
+with subsidiaries totaling €0.6 million (2018: €0.5 million).
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+203
+(34) Segment Reporting
+Segment Information
+Led by its Corporate Headquarters in Essen, Germany, the E.ON
+Group comprises the eight reporting segments described below,
+and the Non-Core Business and Corporate Functions/Other, all
+of which are reported here in accordance with IFRS 8. The com-
+bined segments, which are not separately reportable, in the
+East-Central Europe/Turkey Energy Networks unit and the Cus-
+tomer Solutions Other unit are of subordinate importance and
+have similar economic characteristics with respect to customer
+structure, products and distribution channels.
+Energy Networks
+Germany
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 70 through 85.
+Other related parties
+5
+26
+Other related parties
+2018
+162
+205
+Liabilities
+1,278
+1,013
+Associated companies
+726
+568
+177
+15
+Other related parties
+375
+430
+Provisions
+31
+20
+Associated companies
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+Sweden
+Joint ventures
+Sweden.
+Energy Networks
+Customer Solutions
+Germany
+Sweden
+ECE/Turkey
+Germany
+United Kingdom
+Other
+€ in millions
+2019
+2018
+2018
+2019
+2018
+2019
+2018
+2018
+This segment comprises the electricity networks businesses in
+2019
+204
+Financial Information by Business Segment
+2019
+Corporate Functions/Other contains E.ON SE itself and the
+interests held directly by E.ON SE. Until June 26, 2018, the
+Uniper Group, which was accounted for in the consolidated
+financial statements using the equity method, was also allo-
+cated to this segment. Additional information regarding the
+Uniper Group is provided in Note 4.
+Customer Solutions
+Germany
+Notes
+This segment consists of activities that supply our customers in
+Germany with electricity and gas and the distribution of specific
+products and services in areas for improving energy efficiency
+and energy independence.
+United Kingdom
+The segment comprises sales activities and customer solutions
+in the UK.
+This segment combines sales activities and the corresponding
+Customer Solutions in Sweden, Italy, the Czech Republic, Hungary
+and Romania and E.ON Business Solutions as well as the heating
+business in Germany.
+innogy
+The innogy segment comprises, in particular, the network and
+sales distribution business, as well as the holding functions and
+internal service providers of the innogy Group, which was taken
+over in September 2019. innogy operates its network business
+primarily in Germany, Poland, Hungary and Croatia. innogy main-
+tains its sales business primarily in the markets of Germany, the
+UK, the Netherlands, Belgium, Hungary and Poland.
+Renewables
+Other
+This segment combines the distribution network activities in
+the Czech Republic, Hungary, Romania, Slovakia and Turkey.
+The Renewables segment combines the Group's activities for
+the production of wind power plants (onshore and offshore) as
+well as solar farms.
+In connection with the takeover of innogy, E.ON will transfer the
+majority of its Renewables business to RWE. Since June 30,
+2018, the transferred businesses were reported as a discontinued
+operation in E.ON's consolidated financial statements in accor-
+dance with IFRS 5 (see Note 4 for further information).
+For internal management purposes, these activities therefore
+continued to be fully included in the relevant key performance
+indicators. The presentation of key performance indicators and
+revenue in segment reporting therefore also includes the compo-
+nents attributable to discontinued operations in the Renewables
+business. Reconciliations of these figures to the information in
+the E.ON Group's consolidated income statement and consoli-
+dated statement of cash flows are provided on pages 204, 205
+and 207.
+Non-Core Business
+Non-Core Business comprises the non-strategic activities of
+the E.ON Group. This includes the operation and retirement of
+the German nuclear power plants, which are managed by the
+PreussenElektra operating unit, and the electricity generation
+business in Turkey.
+East-Central Europe/Turkey
+Corporate Functions/Other
+100.0
+energielösung GmbH, DE, Regensburg²
+100.0
+Economy Power Limited, GB, Coventry¹
+100.0
+74.9
+74.9
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+100.0
+Energiegesellschaft Leimen GmbH & Co.KG, DE, Leimen²
+EDT Energie Werder GmbH, DE, Werder (Havel)²
+EBY Port 1 GmbH, DE, Munich1,8
+Leimen²
+Energiegesellschaft Leimen Verwaltungsgesellschaft mbH, DE,
+100.0
+EE1 Erneuerbare Energien GmbH & Co. KG, DE, Lützen²
+100.0
+Energienetze Bayern GmbH, DE, Regensburg¹
+EFR Europäische Funk-Rundsteuerung GmbH, DE, Munich6
+EGD-Energiewacht Facilities B.V., NL, Assen¹
+24.9
+EBY Immobilien GmbH & Co KG, DE, Regensburg²
+EFG Erdgas Forchheim GmbH, DE, Forchheim6
+49.0
+49.0
+Neufahrn bei Freising
+EfD Energie-für-Dich GmbH, DE, Potsdam
+Energienetz Neufahrn/Eching GmbH & Co. KG, DE,
+EE2 Erneuerbare Energien GmbH & Co. KG, DE, Lützen²
+44.0
+energienatur Gesellschaft für Erneuerbare Energien mbH, DE,
+Siegburg6
+100.0
+100.0
+100.0
+100.0
+49.0
+E+ Operatie Noord-Oost BV, NL, 's-Hertogenbosch²
+49.0
+Energie Mechernich Verwaltungs-GmbH, DE, Mechernich6
+90.0
+E.ON-CAPNET S.R.L., IT, Milan²
+49.0
+Energie Mechernich GmbH & Co. KG, DE, Mechernich
+49.9
+Energie BOL GmbH, DE, Ottersweier
+100.0
+E.ON Verwaltungs SE, DE, Essen 1.8
+39.9
+100.0
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+46.7
+100.0
+Energiedirect B.V., NL, Waalre¹
+E3 Haustechnik GmbH, DE, Magdeburg²
+44.0
+EBERnetz GmbH & Co. KG, DE, Ebersberg
+50.0
+Energie-Agentur Weyhe GmbH i. L., DE, Weyhe6
+49.0
+Energie Vorpommern GmbH, DE, Trassenheide
+100.0
+easyOptimize GmbH, DE, Essen²
+100.0
+50.1
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG
+(ews), DE, Bad Segeberg6
+East Midlands Electricity Share Scheme Trustees Limited, GB,
+Coventry²
+100.0
+East Midlands Electricity Distribution Holdings, GB, Coventry²
+35.0
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+Energie Schmallenberg GmbH, DE, Schmallenberg6
+Energienetze Berlin GmbH, DE, Berlin¹
+Elmregia GmbH, DE, Schöningen
+100.0
+EnergieRevolte GmbH, DE, Düren²
+100.0
+ELMŰ-ÉMÁSZ Energiakereskedő Kft., HU, Budapest¹
+49.0
+EnergieRegion Taunus - Goldener Grund - GmbH & Co. KG, DE,
+Bad Camberg6
+100.0
+100.0
+ELMŰ Hálózati Elosztó Kft., HU, Budapest¹
+70.0
+Energie-Pensions-Management GmbH, DE, Hanover²
+ELMŰ DSO Holding Korlátolt Felelősségű Társaság, HU, Budapest¹
+49.0
+30.0
+Energiepartner Wesseling GmbH, DE, Wesseling
+100.0
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. 9Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12..13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Report of the Supervisory Board
+Strategy and Objectives
+ENERVENTIS GmbH & Co. KG, DE, Saarbrücken6
+Enervolution GmbH, DE, Bochum²
+25.1
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+69.5
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau
+50.0
+Energie-Service-Saar GmbH, DE, Völklingen6
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+215
+(as of December 31, 2019)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+30.0
+100.0
+ELE-Scholven-Wind GmbH, DE, Gelsenkirchen6
+Energiepartner Solar Kreuztal GmbH, DE, Kreuztal6
+Energiepartner Dörth GmbH, DE, Dörth6
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
+100.0
+100.0
+Energienetze Ingolstadt GmbH, DE, Regensburg²
+Energienetze Schaafheim GmbH, DE, Regensburg2
+100.0
+49.0
+49.0
+25.1
+Energienetze Holzwickede GmbH, DE, Holzwickede6
+100.0
+ElbEnergie GmbH, DE, Seevetal¹
+31.7
+Energienetze Großostheim GmbH & Co. KG, DE, Groẞostheim6
+ELE - GEW Photovoltaikgesellschaft mbH, DE, Gelsenkirchen6
+ELE Verteilnetz GmbH, DE, Gelsenkirchen¹
+Grünwald6
+49.0
+Energiepartner Elsdorf GmbH, DE, Elsdorf6
+49.0
+Energiepartner Projekt GmbH, DE, Essen
+50.0
+ELE-RAG Montan Immobilien Erneuerbare Energien GmbH, DE,
+Bottrop6
+49.0
+Energiepartner Niederzier GmbH, DE, Niederzier
+100.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+49.0
+Energiepartner Kerpen GmbH, DE, Kerpen6
+100.0
+20.0
+Energiepartner Hermeskeil GmbH, DE, Hermeskeil
+Elektrizitätswerk Landsberg Gesellschaft mit beschränkter
+Haftung, DE, Landsberg am Lech¹
+40.0
+40.0
+100.0
+100.0
+74.7
+E.ON Telco, s.r.o., CZ, České Budějovice²
+100.0
+100.0
+E.ON Sverige AB, SE, Malmö¹
+E.ON Hungária Energetikai Zártkörűen Működő Részvénytársaság,
+HU, Budapest¹
+100.0
+100.0
+E.ON Solutions GmbH, DE, Essen 1,8
+E.ON Hrvatska d.o.o., HR, Zagreb¹
+100.0
+E.ON Solar GmbH, DE, Essen²
+100.0
+E.ON Heizstrom Süd GmbH, DE, Essen¹
+100.0
+100.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+E.ON UK CoGeneration Limited, GB, Coventry¹
+100.0
+E.ON Insurance Services GmbH, DE, Essen²
+100.0
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+E.ON Innovation Hub S.A., RO, Târgu Mureş²
+100.0
+E.ON UK Blackburn Meadows Limited, GB, Coventry¹
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Solar d.o.o., HR, Zagreb¹
+100.0
+100.0
+100.0
+68.2
+E.ON Gaz Furnizare S.A., RO, Târgu Mureş¹
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö²
+E.ON Service GmbH, DE, Essen²
+100.0
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+100.0
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Software Development SRL, RO, Târgu Mureş²
+100.0
+E.ON Grund&Boden Beteiligungs GmbH, DE, Essen²
+100.0
+E.ON Slovensko, a.s., SK, Bratislava¹
+100.0
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen 1,8
+100.0
+E.ON Servicii Tehnice S.R.L., RO, Târgu Mureş¹
+100.0
+100.0
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE,
+Düsseldorf1,8
+100.0
+E.ON Servicii Clienţi S.R.L., RO, Târgu Mureş¹
+E.ON Heizstrom Nord GmbH, DE, Essen¹
+E.ON Värme Sverige AB, SE, Malmö¹
+E.ON INTERNATIONAL FINANCE B.V., NL, Amsterdam¹
+E.ON UK Directors Limited, GB, Coventry²
+100.0
+ELMŰ-ÉMÁSZ Solutions Kft., HU, Budapest¹
+100.0
+E.ON UK Steven's Croft Limited, GB, Coventry¹
+100.0
+100.0
+E.ON UK Trustees Limited, GB, Coventry²
+Elmű-Émász Energiaszolgáltató Zrt., HU, Budapest¹
+ELMŰ-ÉMÁSZ Energiatároló Kft., HU, Budapest¹
+E.ON UK Secretaries Limited, GB, Coventry²
+100.0
+E.ON UK PS Limited, GB, Coventry2
+Stake (%)
+Name, location
+Stake (%)
+100.0
+100.0
+ELMŰ-ÉMÁSZ Telco Kft., HU, Budapest¹
+100.0
+EMSZET Első Magyar Szélerőmű Korlátolt Felelősségű Társaság,
+HU, Kulcs²
+100.0
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+50.1
+Emscher Lippe Energie GmbH, DE, Gelsenkirchen¹
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf1,8
+100.0
+ÉMÁSZ Hálózati Kft., HU, Miskolc¹
+100.0
+E.ON US Energy LLC, US, Wilmington¹
+100.0
+ELMŰ-ÉMÁSZ Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+E.ON US Corporation, US, Wilmington¹
+Name, location
+100.0
+214
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+99.9
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+100.0
+100.0
+100.0
+E.ON UK Energy Markets Limited, GB, Coventry¹
+E.ON UK Energy Services Limited, GB, Coventry²
+E.ON UK Heat Limited, GB, Coventry¹
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON IT UK Limited, GB, Coventry²
+100.0
+E.ON Invest GmbH, DE, Grünwald²
+100.0
+100.0
+E.ON Ljubljana d.o.o., SI, Ljubljana¹
+100.0
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+E.ON UK Pension Trustees Limited, GB, Coventry²
+Notes
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . ⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+100.0
+E.ON UK Property Services Limited, GB, Coventry²
+100.0
+E.ON NA Capital LLC, US, Wilmington¹
+E.ON Metering GmbH, DE, Munich²
+100.0
+E.ON UK plc, GB, Coventry¹
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+100.0
+100.0
+(as of December 31, 2019)
+Energieversorgung Bad Bentheim GmbH & Co. KG, DE,
+Bad Bentheim6
+25.0
+ENNI Energie & Umwelt Niederrhein GmbH, DE, Moers5
+Ense Stromnetz GmbH & Co. KG, DE, Ense
+50.0
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+Haftung (FFG), DE, Freising6
+49.0
+FAMOS - Facility Management Osnabrück GmbH, DE, Osnabrück6
+100.0
+FAMIS GmbH, DE, Saarbrücken¹
+Fernwärmeversorgung Saarlouis- Steinrausch Investitions-
+gesellschaft mbH, DE, Saarlouis²
+65.0
+28.8
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
+Wörth am Main6
+49.0
+Gas-Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH,
+DE, Rheda-Wiedenbrück
+28.9
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main6
+Falkenbergs Biogas AB, SE, Malmö²
+Gasnetzgesellschaft Warburg GmbH & Co. KG, DE, Warburg
+Gasnetzgesellschaft Windeck mbH & Co. KG, DE, Siegburg²
+Gasnetzgesellschaft Wörrstadt mbH & Co. KG, DE, Saulheim6
+Gasnetzgesellschaft Wörrstadt Verwaltung mbH, DE, Saulheim
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn¹
+49.0
+100.0
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel6
+49.0
+FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg6
+FIDELIA Holding LLC, US, Wilmington¹
+49.0
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+50.0
+49.0
+Gasversorgung Unterfranken Gesellschaft mit beschränkter
+Haftung, DE, Würzburg5
+Fernwärmeversorgung Zwönitz GmbH (FVZ), DE, Zwönitz
+100.0
+95.0
+50.0
+50.0
+49.0
+49.0
+49.0
+50.0
+Gas-Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG,
+DE, Rheda-Wiedenbrück
+EWV Energie- und Wasser-Versorgung GmbH, DE, Stolberg¹
+25.1
+Gas-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg6
+Gas-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+Gas-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+1.3
+EWR Aktiengesellschaft, DE, Worms 5, 11
+100.0
+EWIS BV, NL, Ede¹
+25.1
+33.2
+Stake (%)
+Name, location
+Stake (%)
+216
+Name, location
+(as of December 31, 2019)
+evm Windpark Höhn GmbH & Co. KG, DE, Höhn
+Kerpen6
+25.1
+EWR Dienstleistungen GmbH & Co. KG, DE, Worms5
+45.0
+EWV Baesweiler Verwaltungs GmbH, DE, Baesweiler
+25.1
+Gasnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann
+45.0
+49.0
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen
+50.2
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg
+EWV Baesweiler GmbH & Co. KG, DE, Baesweiler6
+25.1
+Bergheim
+20.0
+EWR GmbH, DE, Remscheid5
+Gas-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE,
+25.0
+53.7
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+100.0
+100.0
+100.0
+Fundacja innogy w Polsce, PL, Warsaw²
+49.0
+Gemeindewerke Wedemark GmbH, DE, Wedemark6
+94.0
+Recklinghausen Kommanditgsellschaft, DE, Düsseldorf²
+Gemeindewerke Wietze GmbH, DE, Wietze
+49.0
+FUCATUS Vermietungsgesellschaft mbH & Co. Objekt
+49.0
+Haftung, DE, Namborn6
+50.0
+FSO Verwaltungs-GmbH, DE, Oberhausen
+Gemeindewerke Namborn, Gesellschaft mit beschränkter
+Gemeindewerke Uetze GmbH, DE, Uetze6
+49.0
+G&L Gastro-Service GmbH, DE, Augsburg6
+35.0
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf¹,8
+100.0
+Emmerthal¹
+GasLine Telekommunikationsnetz-Geschäftsführungsgesellschaft
+deutscher Gasversorgungsunternehmen mbH, DE, Straelen
+GasLINE Telekommunikationsnetzgesellschaft deutscher
+Gasversorgungsunternehmen mbH & Co. KG, DE, Straelen5
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. OHG, DE,
+49.0
+Gasgesellschaft Kerken Wachtendonk mbH, DE, Kerken6
+50.0
+Gemeinnützige Gesellschaft zur Förderung des E.ON Energy
+Research Center mbH, DE, Aachen6
+36.9
+GASAG AG, DE, Berlin5
+49.0
+Gas- und Wasserwerke Bous-Schwalbach GmbH, DE, Bous5
+100.0
+Gemeindewerke Windeck GmbH & Co. KG, DE, Siegburg²
+50.0
+GasWacht Friesland Facilities B.V., NL, Leeuwarden¹
+FSO GmbH & Co. KG, DE, Oberhausen
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing6
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+100.0
+100.0
+Fraku Installaties B.V., NL, Venlo¹
+Foton Technik Sp. z o.o., PL, Warsaw¹
+100.0
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+90.0
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf 1,8
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+100.0
+Geas Energiewacht B.V., NL, Enschede¹
+90.0
+Fitas Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+100.0
+Fraku Service B.V., NL, Venlo¹
+100.0
+Gemeindewerke Bissendorf Netze GmbH & Co. KG, DE,
+Bissendorf6
+49.0
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+52.8
+Fresh Energy GmbH, DE, Berlin²
+100.0
+Frendi AB, SE, Malmö¹
+45.0
+Gemeindewerke Everswinkel GmbH, DE, Everswinkel6
+30.0
+Freiberger Stromversorgung GmbH (FSG), DE, Freiberg5
+49.0
+Gemeindewerke Bissendorf Netze Verwaltungs-GmbH, DE,
+Bissendorf6
+100.0
+Free Electrons LLC, US, Palo Alto²
+49.0
+49.0
+25.1
+Notes
+100.0
+Erdgasversorgung Schwalmtal GmbH & Co. KG, DE, Viersen
+49.0
+Niederkassel6
+Energieversorgung Niederkassel GmbH & Co. KG, DE,
+50.0
+Erdgasversorgung Industriepark Leipzig Nord GmbH, DE, Leipzig6
+50.0
+49.0
+100.0
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+25.1
+100.0
+eprimo GmbH, DE, Neu-Isenburg¹
+Energieversorgung Kranenburg Netze Verwaltungs GmbH, DE,
+Kranenburg
+Energieversorgung Marienberg GmbH, DE, Marienberg6
+Energieversorgung Oberhausen Aktiengesellschaft, DE,
+Erdgasversorgung Schwalmtal Verwaltungs-GmbH, DE, Viersen
+50.0
+Erneuerbare Energien Rheingau-Taunus GmbH, DE,
+Bad Schwalbach6
+30.0
+Energieversorgung Sehnde GmbH, DE, Sehnde
+50.0
+100.0
+Ergon Overseas Holdings Limited, GB, Coventry¹
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE,
+Putzbrunn6
+50.0
+Ergon Energia S.r.l. in liquidazione, IT, Milan6
+50.0
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+40.5
+e-regio GmbH & Co. KG, DE, Euskirchen5
+10.0
+Oberhausen 5, 11
+100.0
+25.1
+enviaM Zweite Neue Energie Management GmbH, DE, Lützen²
+100.0
+34.0
+Energieversorgung Beckum Verwaltungs-GmbH, DE, Beckum
+(Westf.)6
+100.0
+envia SERVICE GmbH, DE, Cottbus¹
+34.0
+Energieversorgung Beckum GmbH & Co. KG, DE, Beckum (Westf.)6
+envia TEL GmbH, DE, Markkleeberg¹
+58.6
+25.1
+24.2
+ENTRO GmbH Marktbergel, DE, Marktbergel
+Energieversorgung Bad Bentheim Verwaltungs-GmbH, DE,
+Bad Bentheim6
+25.1
+20.0
+envia Mitteldeutsche Energie AG, DE, Chemnitz¹
+100.0
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+beschränkter Haftung, DE, Halblech6
+envia THERM GmbH, DE, Bitterfeld-Wolfen¹
+enviaM Neue Energie Management GmbH, DE, Lützen²
+Energieversorgung Kranenburg Netze GmbH & Co. KG, DE,
+Kranenburg6
+100.0
+enviaM Erneuerbare Energien Verwaltungsgesellschaft mbH,
+DE, Lützen²
+24.9
+Energieversorgung Hürth GmbH, DE, Hürth5
+49.0
+Energieversorgung Horstmar/Laer GmbH & Co. KG, DE, Horstmar
+100.0
+100.0
+enviaM Beteiligungsgesellschaft Chemnitz GmbH, DE, Chemnitz¹
+enviaM Beteiligungsgesellschaft mbH, DE, Essen¹
+45.0
+Energieversorgung Guben GmbH, DE, Guben5
+50.0
+100.0
+25.1
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Energieversorgung Timmendorfer Strand GmbH & Co. KG, DE,
+Timmendorfer Strand²
+50.0
+Energy Collection Services Limited, GB, Coventry²
+100.0
+Essent Rights B.V., NL, 's-Hertogenbosch¹
+100.0
+energis-Netzgesellschaft mbH, DE, Saarbrücken¹
+100.0
+100.0
+Essent Retail Energie B.V., NL, 's-Hertogenbosch¹
+energis GmbH, DE, Saarbrücken¹
+100.0
+Essent Nederland B.V., NL, Arnhem¹
+100.0
+Energiewerken B.V., NL, Almere¹
+100.0
+71.9
+Essent Sales Portfolio Management B.V., NL, 's-Hertogenbosch¹
+100.0
+Energy Ventures GmbH, DE, Saarbrücken²
+49.0
+EVIP GmbH, DE, Bitterfeld-Wolfen¹
+60.0
+EVG Energieversorgung Gemünden GmbH, DE,
+Gemünden am Main6
+50.0
+Enerjisa Üretim Santralleri A.Ş., TR, Istanbul4
+enermarket GmbH, DE, Frankfurt am Main6
+40.0
+Enerjisa Enerji A.Ş., TR, Istanbul4
+51.0
+EuroSkyPark GmbH, DE, Saarbrücken¹
+49.0
+energy4u GmbH & Co. KG, DE, Siegburg6
+97.1
+Észak-magyarországi Áramszolgáltató Nyrt., HU, Miskolc¹
+100.0
+Essent N.V., NL, 's-Hertogenbosch¹
+ErwärmBAR GmbH, DE, Eberswalde
+49.0
+100.0
+Energiewacht N.V., NL, Veendam¹
+100.0
+Energiewacht Groep B.V., NL, Meppel¹
+55.0
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+100.0
+100.0
+Energiewacht Facilities B.V., NL, Zwolle¹
+ESK GmbH, DE, Dortmund²
+49.0
+Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde6
+25.1
+eShare.one GmbH, DE, Dortmund 6
+51.0
+100.0
+ESN Sicherheit und Zertifizierung GmbH, DE, Schwentinental²
+Essent Belgium N.V., BE, Antwerp¹
+100.0
+100.0
+Essent IT B.V., NL, Arnhem¹
+49.0
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+100.0
+Essent Energy Group B.V., NL, Arnhem¹
+50.0
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching6
+100.0
+Essent EnergieBewust Holding B.V., NL, 's-Hertogenbosch¹
+50.0
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+100.0
+Essent Energie Verkoop Nederland B.V., NL, 's-Hertogenbosch¹
+100.0
+Energiewacht West Nederland B.V., NL, Assen¹
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+100.0
+Cegecom S.A., LU, Luxembourg¹
+100.0
+33.3
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth6
+100.0
+Bayernwerk Netz GmbH, DE, Regensburg¹
+100.0
+Brunnshög Energi AB, SE, Malmö²
+Bayernwerk Portfolio GmbH & Co. KG, DE, Regensburg²
+100.0
+25.1
+25.1
+Brüggen.E-Netz GmbH & Co. KG, DE, Brüggen
+Brüggen.E-Netz Verwaltungs-GmbH, DE, Brüggen
+100.0
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+100.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+Bayernwerk Energietechnik GmbH, DE, Regensburg²
+100.0
+100.0
+50.0
+Budapesti Dísz- és Közvilágítási Korlátolt Felelősségű Társaság,
+HU, Budapest4
+100.0
+Beteiligung H2 GmbH, DE, Helmstedt²
+100.0
+100.0
+BTB-Blockheizkraftwerks, Träger- und
+BTC POWER EUROPE SL, ES, Altea²
+100.0
+BTC Power Cebu Inc., PH, Lapu-Lapu City²
+100.0
+Bayernwerk Regio Energie GmbH, DE, Regensburg²
+100.0
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+Beteiligung H1 GmbH, DE, Helmstedt²
+Stake (%)
+Name, location
+Stake (%)
+49.0
+Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+49.0
+Abwasserentsorgung Schladen GmbH, DE, Schladen6
+49.0
+Bayerische Ray Energietechnik GmbH, DE, Garching6
+Bayerische-Schwäbische Wasserkraftwerke Beteiligungs-
+gesellschaft mbH, DE, Gundremmingen¹
+49.0
+100.0
+Bayerische Elektrizitätswerke GmbH, DE, Augsburg²
+Abwasserentsorgung Marne-Land GmbH, DE,
+100.0
+Bayerische Bergbahnen-Beteiligungs-Gesellschaft mbH, DE,
+Gundremmingen¹
+20.0
+Diekhusen-Fahrstedt
+62.2
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+Bayernwerk AG, DE, Regensburg¹
+Name, location
+211
+(as of December 31, 2019)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Strategy and Objectives
+Report of the Supervisory Board
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. Control by virtue of company contract. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+25.1
+25.0
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+Eddelak GmbH, DE, St. Michaelisdonn6
+100.0
+Beteiligung N1 GmbH, DE, Helmstedt²
+100.0
+Budapesti Elektromos Művek Nyrt., HU, Budapest¹
+98.9
+100.0
+CHN Group Ltd, GB, Coventry²
+100.0
+100.0
+CHN Electrical Services Limited, GB, Coventry²
+51.0
+Bioenergie Kirchspiel Anhausen GmbH & Co.KG, DE, Anhausen²
+Bioenergie Bad Wimpfen GmbH & Co. KG, DE, Bad Wimpfen²
+Bioenergie Bad Wimpfen Verwaltungs-GmbH, DE, Bad Wimpfen²
+CHN Contractors Limited, GB, Coventry²
+100.0
+bildungszentrum energie GmbH, DE, Halle (Saale)²
+100.0
+Charge-ON GmbH, DE, Essen¹
+30.0
+100.0
+51.0
+CHN Special Projects Limited, GB, Coventry²
+100.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf2
+100.0
+COMCO MCS S.A., LU, Luxembourg²
+90.0
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+33.3
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+51.0
+Bioenergie Merzig GmbH, DE, Merzig²
+100.0
+CM Intressenter AS, NO, Trollåsen¹
+100.0
+100.0
+Citigen (London) Limited, GB, Coventry¹
+Bioenergie Kirchspiel Anhausen Verwaltungs-GmbH, DE,
+Anhausen²
+Bikesquare Srl, IT, Cuneo6
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+50.0
+46.5
+100.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+100.0
+20.0
+46.3
+Eggenstein-Leopoldshofen6
+Celle-Uelzen Netz GmbH, DE, Celle¹
+an der Kerntechnische Hilfsdienst GmbH GbR, DE,
+Cameleon B.V., NL, Rotterdam²
+Beteiligungsgesellschaft der Energieversorgungsunternehmen
+20.0
+Bützower Wärme GmbH, DE, Bützow
+100.0
+Beteiligung N2 GmbH, DE, Helmstedt²
+100.0
+97.5
+Beteiligungsgesellschaft Werl mbH, DE, Essen²
+51.0
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz
+100.0
+Certified B.V., NL, Amsterdam¹
+40.7
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+100.0
+CERBEROS s.r.o., CZ, Prague²
+25.1
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels
+87.8
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+61.0
+BEW Netze GmbH, DE, Wipperfürth4, 10
+100.0
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+Charge4Europe GmbH, DE, Essen
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+46.4
+Basking Automation GmbH, DE, Berlin6
+25.0
+49.0
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck6
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg6
+100.0
+100 Kilowatt Naperőmű Delta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+49.0
+100 Kilowatt Naperőmű Epszilon Korlátolt Felelősségű Társaság,
+HU, Budapest²
+Abwassergesellschaft Gehrden mbH, DE, Gehrden
+49.0
+Bardowick6
+100 Kilowatt Naperőmű Béta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+100.0
+49.0
+100.0
+100.0
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+30.0
+2. CR Immobilien-Vermietungsgesellschaft mbH & Co. Objekt
+MEAG Halle KG, DE, Düsseldorf¹, 12
+50.0
+Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, DE, Essen²
+100.0
+100 Kilowatt Naperőmű Kappa Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+AirSon Engineering AB, SE, Ängelholm²
+100.0
+80.0
+100.0
+100.0
+Aceve Totaalinstallateurs B.V., NL, Capelle aan den IJssel¹
+Ackermann & Knorr Ingenieur GmbH, DE, Chemnitz²
+Airco-Klima Service GmbH, DE, Garbsen²
+100 Kilowatt Naperőmű Gamma Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+100 Kilowatt Naperőmű Éta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick6
+Alsdorf Netz GmbH, DE, Aachen¹
+100 Kilowatt Naperőmű Alfa Korlátolt Felelősségű Társaság,
+HU, Budapest²
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+annum
+•
+⋅
+• €750 million bond due in 2023 with 0 percent coupon per
+At the beginning of January 2020, E.ON issued three corporate
+bonds with a total volume of €2.25 billion. High investor
+demand enabled E.ON to lock in attractive interest rates for all
+maturities:
+Corporate Bonds Issued
+€1 billion green bond due in 2027 with 0.375 percent coupon
+per annum
+The extraordinary general shareholders meeting of innogy SE
+passed a resolution on the transfer of the innogy shares of
+the remaining minority shareholders on March 4, 2020. The
+squeeze-out under German merger law approved by resolution
+at that meeting will become effective with the entry of the
+transfer resolution and the merger in the commercial register.
+Cash Settlement Determined for the Remaining
+Minority Shareholders of innogy
+(36) Subsequent Events
+209
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+In September of last year, E.ON notified the Management Board
+of innogy that innogy SE would soon be merged into E.ON
+Verwaltungs SE, and that the remaining minority shareholders
+would be excluded (a so-called "squeeze-out under German
+merger law"). In mid-January 2020, E.ON notified the Manage-
+ment Board of innogy that the determination had been made
+to pay out an appropriate cash settlement of €42.82 per innogy
+share to the remaining minority shareholders. Independent
+auditors appointed by the court confirmed the appropriateness
+of the cash settlement.
+€500 million bond due in 2030 with 0.75 percent coupon
+per annum
+Disposal of the Heating Electricity Business
+One of the conditions imposed on E.ON by the EU Commission
+is the disposal of the so-called heating electricity business in
+Germany. This heating electricity business includes all customer
+contracts for the supply of heating electricity by E.ON Energie
+Deutschland ("EDG") and all contracts between EDG and those
+heating electricity customers that purchase heating and general
+electricity via separate meters. In anticipation of the disposal, the
+heating electricity business was spun off to two newly founded
+companies, E.ON Heizstrom Nord GmbH and E.ON Heizstrom
+Süd GmbH. Because of the obligation to dispose of these activi-
+ties, E.ON has already reported the relevant balance sheet items
+of both companies as a disposal group pursuant to IFRS 5 with
+effect from September 30, 2019. The agreement was signed on
+March 3, 2020.
+100.0
+agile accelerator GmbH, DE, Düsseldorf²
+Stake (%)
+Name, location
+Stake (%)
+210
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+(37) List of Shareholdings Pursuant to Section 313 (2) HGB
+Notes
+The outbreak and spread of the novel coronavirus has global
+implications, including economic and financial effects. At the
+time this report was prepared, potentially adverse business
+effects of the outbreak of the coronavirus were not yet apparent.
+The possible implications of this matter are being analyzed on
+an ongoing basis. For further details, please refer to the com-
+bined group management report.
+COVID-19 (Coronavirus)
+E.ON and Kraken Technologies will continue to develop the
+platform to deliver outstanding customer service based on the
+principles of customer focus, simplicity, transparency and cost
+efficiency. The first phase will involve the migration of npower's
+customers to the new platform, followed by a second phase for
+E.ON UK customers.
+In March 2020, E.ON entered into a strategic partnership with
+Kraken Technologies, a sister company of Octopus Energy. The
+strategic partnership, E.ON Next, will leverage the technology
+platform of Kraken Technologies and transform E.ON UK's busi-
+ness with residential and small and medium-sized commercial
+customers in the UK.
+Strategic Partnership Agreement with Kraken
+Technologies
+49.0
+100.0
+100.0
+Alt Han Company Limited, GB, London
+49.0
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf
+50.0
+Gevelsberg4
+AVU Aktiengesellschaft für Versorgungs-Unternehmen, DE,
+49.0
+AWOTEC Gebäude Servicegesellschaft mit beschränkter
+100.0
+33.3
+100.0
+Avacon Netz GmbH, DE, Helmstedt¹
+39.0
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg
+Abwasser und Service Mittelangeln GmbH, DE, Satrup
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+49.0
+Avon Energy Partners Holdings, GB, Coventry²
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr6
+49.0
+Haftung, DE, Saarbrücken
+49.0
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog6
+25.1
+Balve Netz GmbH & Co. KG, DE, Balve
+49.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel
+100.0
+BAG Port 1 GmbH, DE, Regensburg²
+49.0
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede
+49.0
+Bäderbetriebsgesellschaft St. Ingbert mbH, DE, St. Ingbert
+27.0
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide
+48.0
+DE, Borgstedt
+0.0
+100.0
+100.0
+Artelis S.A., LU, Luxembourg¹
+76.1
+A/V/E GmbH, DE, Halle (Saale)¹
+100.0
+Areal LDS Blansko a.s., CZ, Blansko²
+100.0
+90.0
+4Motions GmbH, DE, Leipzig²
+Aralt BV, BE, Hasselt¹
+0.0
+100.0
+ANCO Sp. z o.o., PL, Jarocin²
+2. CR Immobilien-Vermietungsgesellschaft mbH & Co. Objekt
+Naumburg KG, DE, Düsseldorf2, 12
+21.0
+100.0
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg
+50.0
+AV Packaging GmbH, DE, Munich¹
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+49.0
+100.0
+Avacon Connect GmbH, DE, Laatzen¹
+49.0
+Abfallwirtschaft Schleswig-Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst
+Abfallwirtschaftsgesellschaft Rendsburg-Eckernförde mbH,
+100.0
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+49.0
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide6
+61.5
+Avacon AG, DE, Helmstedt¹
+50.0
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg6
+0.0
+Avacon Natur GmbH, DE, Sarstedt¹
+Conjoule GmbH, DE, Essen²
+94.5
+Biogas Ducherow GmbH, DE, Ducherow²
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+100.0
+E.ON Agile Nordic AB, SE, Malmö²
+100.0
+100.0
+E.ON Áramszolgáltató Korlátolt Felelősségű Társaság, HU,
+Budapest²
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich²
+E.ON Energie AG, DE, Düsseldorf¹,8
+E.ON 29. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON 28. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+100.0
+100.0
+100.0
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+E.ON Energie Dialog GmbH, DE, Potsdam²
+99.8
+100.0
+E.ON Beteiligungen GmbH, DE, Essen 1,8
+E.ON Bioerdgas GmbH, DE, Essen¹
+100.0
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+E.ON Bayern Verwaltungs AG, DE, Essen²
+68.2
+E.ON Energie România S.A., RO, Târgu Mureş¹
+100.0
+E.ON Asset Management GmbH & Co. EEA KG, DE, Grünwald 1,8
+100.0
+E.ON Energie Real Estate Investment GmbH, DE, Munich²
+96.0
+E.ON Asist Complet S.A., RO, Târgu Mureş²
+100.0
+100.0
+E.ON Energihandel Nordic AB, SE, Malmö¹
+E.ON Energidistribution AB, SE, Malmö¹
+E.ON 12. Verwaltungs GmbH, DE, Essen²
+E.ON 26. Verwaltungs GmbH, DE, Essen²
+e.kundenservice Netz GmbH, DE, Hamburg¹
+100.0
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+100.0
+e.distherm Wärmedienstleistungen GmbH, DE, Potsdam¹
+100.0
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+100.0
+E.ON Drive Infrastructure UK Limited, GB, Coventry2
+100.0
+e.discom Telekommunikation GmbH, DE, Rostock²
+100.0
+100.0
+E.ON Elnät Stockholm AB, SE, Malmö¹
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+100.0
+E.ON Energiatermelő Kft., HU, Budapest¹
+100.0
+E.ON 11. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energiamegoldások Kft., HU, Budapest²
+100.0
+E.ON 9. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energiakereskedelmi Kft., HU, Budapest¹
+100.0
+E.ON 8. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+100.0
+E.ON Drive Infrastructure Italy S.r.l., IT, Milan²
+100.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. 9Control by virtue of company contract.. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Produzione S.p.A., IT, Milan¹
+100.0
+E.ON Fastigheter 2 AB, SE, Malmö²
+100.0
+100.0
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+100.0
+E.ON Power Plants Belgium BVBA, BE, Mechelen¹
+100.0
+E.ON Energy Solutions Limited, GB, Coventry¹
+100.0
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf 1,8
+E.ON Flash S.R.L., RO, Târgu Mureş²
+100.0
+E.ON Rhein-Ruhr Werke GmbH, DE, Essen²
+100.0
+E.ON First Future Energy Holding B.V., NL, Rotterdam²
+100.0
+E.ON Real Estate GmbH, DE, Essen¹
+100.0
+E.ON Finanzholding SE & Co. KG, DE, Essen¹,8
+100.0
+100.0
+E.ON RAG Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+E.ON RE Investments LLC, US, Wilmington¹
+100.0
+E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin²
+100.0
+70.0
+100.0
+E.ON Perspekt GmbH, DE, Düsseldorf²
+E.ON Plin d.o.o., HR, Zagreb¹
+E.ON Energy Solutions GmbH, DE, Essen²
+E.ON Nord Sverige AB, SE, Malmö¹
+100.0
+E.ON Energija d.o.o., HR, Zagreb¹
+Stake (%)
+Name, location
+Stake (%)
+100.0
+213
+(as of December 31, 2019)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Strategy and Objectives
+Report of the Supervisory Board
+Name, location
+E.ON Energilösningar AB, SE, Malmö¹
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+E.ON Energy Projects GmbH, DE, Munich¹
+100.0
+E.ON Nutzenergie GmbH, DE, Essen²
+100.0
+E.ON Energy Installation Services Limited, GB, Coventry¹
+100.0
+E.ON North America Finance, LLC, US, Wilmington¹
+100.0
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+100.0
+E.ON Norge AS, NO, Stavanger²
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+100.0
+100.0
+E.ON România S.R.L., RO, Târgu Mureş¹
+100.0
+100.0
+20.4
+Cuculus GmbH, DE, Ilmenau6
+48.0
+bremacon GmbH, DE, Bremen
+49.0
+Cremlinger Energie GmbH, DE, Cremlingen
+Broadband TelCom Power, Inc., US, Santa Ana¹
+20.7
+100.0
+Coromatic Tullinge AB, SE, Bromma²
+100.0
+Coromatic Syd AB, SE, Västra Frölunda²
+100.0
+100.0
+Cochem6
+100.0
+DE M GmbH, DE, Elsdorf²
+99.9
+Decadia GmbH, DE, Essen²
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+DANEB Datennetze Berlin GmbH, DE, Berlin²
+100.0
+E.ON Biofor Sverige AB, SE, Malmö¹
+50.0
+Dampfversorgung Ostsee-Molkerei GmbH, DE, Wismar
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+212
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+Notes
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). .³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Coromatic OY, FI, Helsinki²
+Delgaz Grid S.A., RO, Târgu Mureş¹
+25.6
+100.0
+Coromatic As a Service AB, SE, Bromma²
+32.4
+Biogas Wassenberg GmbH & Co. KG, DE, Wassenberg6
+Biogas Wassenberg Verwaltungs GmbH, DE, Wassenberg
+100.0
+Coromatic AS, NO, Trollåsen¹
+100.0
+100.0
+Biogas Steyerberg GmbH, DE, Steyerberg²
+Coromatic AB, SE, Bromma¹
+65.5
+Biogas Schwalmtal GmbH & Co. KG, DE, Schwalmtal²
+100.0
+Coromatic A/S, DK, Odense¹
+80.0
+100.0
+32.4
+Coromatic Group AB, SE, Bromma¹
+100.0
+Coromatic Nord AS, NO, Trollåsen²
+100.0
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+100.0
+Coromatic International AB, SE, Bromma²
+40.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+100.0
+Coromatic Holding AB, SE, Bromma¹
+100.0
+Biomasseverwertung Straubing GmbH, DE, Straubing²
+100.0
+Coromatic Group ApS, DK, Odense¹
+99.2
+Biogasanlage Schwalmtal GmbH, DE, Schwalmtal²
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+Borowski GmbH & Co. KG, DE, Essen²
+Breitband-Infrastrukturgesellschaft Cochem-Zell mbH, DE,
+E.DIS Netz GmbH, DE, Fürstenwalde/Spree¹
+100.0
+100.0
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+E.ON Dialog S.R.L., RO, Şelimbăr²
+49.0
+DUKO Hlinsko, s.r.o., CZ, Hlinsko
+100.0
+Drivango GmbH i. L., DE, Düsseldorf²
+100.0
+39.9
+100.0
+100.0
+100.0
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+E.ON Control Solutions Limited, GB, Coventry¹
+E.ON Country Hub Germany GmbH, DE, Berlin1,8
+E.ON Danmark A/S, DK, Frederiksberg¹
+Dortmunder Energie- und Wasserversorgung Gesellschaft mit
+beschränkter Haftung, DE, Dortmund
+100.0
+Dutchdelta Finance S.à r.L., LU, Luxembourg¹
+100.0
+100.0
+E.ON Drive Infrastructure France SAS, FR, Levallois-Perret²
+E.ON Drive Infrastructure GmbH, DE, Essen 1,8
+100.0
+E.DIS Bau- und Energieservice GmbH, DE, Fürstenwalde/Spree²
+67.0
+E.DIS AG, DE, Fürstenwalde/Spree¹
+100.0
+100.0
+E.ON Digital Technology Hungary Kft., HU, Budapest²
+E.ON Distribuce, a.s., CZ, České Budějovice¹
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+E WIE EINFACH GmbH, DE, Cologne¹
+100.0
+E.ON Digital Technology GmbH, DE, Hanover¹
+49.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca¹
+Dorsten Netz GmbH & Co. KG, DE, Dorsten
+DON-Stromnetz Verwaltungs GmbH, DE, Donauwörth²
+DES Dezentrale Energien Schmalkalden GmbH, DE, Schmalkalden6
+Deutsche Gesellschaft für Wiederaufarbeitung von Kernbrenn-
+stoffen AG & Co. oHG, DE, Gorleben
+100.0
+E.ON Business Services Sverige AB, SE, Malmö²
+100.0
+100.0
+E.ON Business Services Regensburg GmbH, DE, Regensburg 1,8
+33.3
+Der Solarbauer Borowski Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Business Services lași S.A., RO, Bucharest²
+100.0
+E.ON Business Services Czech Republic s.r.o., CZ,
+České Budějovice²
+50.0
+100.0
+56.5
+E.ON Business Solutions GmbH, DE, Essen¹
+100.0
+42.5
+100.0
+DON-Stromnetz GmbH & Co. KG, DE, Donauwörth²
+100.0
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+24.4
+Discovergy GmbH, DE, Aachen6
+100.0
+100.0
+E.ON Business Solutions SAS, FR, Levallois-Perret²
+E.ON CDNE. S.p.A., IT, Milan²
+20.0
+Dii GmbH, DE, Munich6
+100.0
+DigiKoo GmbH, DE, Essen²
+100.0
+E.ON Business Solutions S.r.l., IT, Milan¹
+100.0
+Gemeinschaftskernkraftwerk Grohnde Management GmbH,
+DE, Emmerthal²
+Betreibergesellschaft mbH Berlin, DE, Berlin¹
+20.0
+innogy Hungária Tanácsadó Kft., HU, Budapest¹
+50.0
+Kalmar Energi Holding AB, SE, Kalmar4
+40.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+100.0
+innogy Gastronomie GmbH, DE, Essen 1,8
+100.0
+innogy Fünfzehnte Vermögensverwaltungs GmbH, DE, Essen²
+100.0
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+100.0
+innogy Finance B.V., NL, 's-Hertogenbosch¹
+100.0
+It's a beautiful world B.V., NL, Amersfoort¹
+100.0
+100.0
+100.0
+iSWITCH GmbH, DE, Essen 1,8
+innogy Innovation Berlin GmbH, DE, Berlin 1,8
+Kavernengesellschaft Staßfurt mbH, DE, Staßfurt
+49.0
+KDT Kommunale Dienste Tholey GmbH, DE, Tholey6
+49.0
+innogy International Middle East, AE, Dubai6
+100.0
+innogy Innovation UK Ltd., GB, London¹
+49.0
+KAWAG Netze Verwaltungsgesellschaft mbH, DE, Abstatt
+100.0
+49.0
+KAWAG Netze GmbH & Co. KG, DE, Abstatt
+innogy Innovation GmbH, DE, Essen 1,8
+100.0
+INNOGY INNOVATION CENTER LTD, IL, Tel Aviv¹
+49.0
+KAWAG AG & Co. KG, DE, Pleidelsheim
+50.0
+100.0
+innogy Energy Belgium BVBA, BE, Hove¹
+100.0
+innogy Energo, s.r.o., CZ, Prague¹
+100.0
+innogy Direkt GmbH, DE, Dortmund¹
+25.1
+innogy.C3 GmbH, DE, Essen
+100.0
+innogy Consulting U.S. LLC, US, Boston²
+100.0
+innogy Zwölfte Vermögensverwaltungs GmbH, DE, Essen²
+100.0
+innogy Consulting GmbH, DE, Essen²
+100.0
+innogy Zweite Vermögensverwaltungs GmbH, DE, Essen 1,8
+100.0
+100.0
+innogy Zákaznické služby, s.r.o., CZ, Ostrava¹
+100.0
+100.0
+INNOGY E-MOBILITY LIMITED, GB, London²
+100.0
+innogy-EnBW Magyarország Energiaszolgáltató Korlátolt
+Felelősségű Társaság, HU, Budapest²
+100.0
+100.0
+Isoprofs België BVBA, BE, Hasselt¹
+100.0
+Isoprofs B.V., NL, Meijel¹
+100.0
+innogy Energie, s.r.o., CZ, Prague¹
+93.0
+51.0
+Kemkens B.V., NL, Oss5
+IPP ESN Power Engineering GmbH, DE, Kiel²
+100.0
+25.0
+Intelligent Maintenance Systems Limited, GB, Milton Keynes
+innogy e-mobility US LLC, US, Delaware¹
+100.0
+100.0
+Installatietechniek Totaal B.V., NL, Leeuwarden¹
+innogy eMobility Solutions GmbH, DE, Dortmund¹
+innogy Energetika Plhov - Náchod, s.r.o., CZ, Náchod²
+innogy Westenergie GmbH, DE, Essen¹
+49.0
+100.0
+100.0
+innogy Sustainable Solutions LLC, US, Boston²
+65.0
+KlickEnergie Verwaltungs-GmbH, DE, Neuss
+100.0
+innogy Stoen Operator Sp. z o.o., PL, Warsaw¹
+65.0
+KlickEnergie GmbH & Co. KG, DE, Neuss6
+100.0
+innogy Stiftung für Energie und Gesellschaft gGmbH, DE, Essen²
+Kiwigrid GmbH, DE, Dresden6
+100.0
+innogy South East Europe s.r.o., SK, Bratislava²
+26.6
+Kite Power Systems Limited, GB, Chelmsford
+100.0
+innogy solutions Kft., HU, Budapest¹
+innogy TelNet GmbH, DE, Essen 1,8
+100.0
+100.0
+100.0
+83.2
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. 9Control by virtue of company contract. . 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+61.0
+KommEnergie GmbH, DE, Eichenau
+100.0
+100.0
+KommEnergie Erzeugungs GmbH, DE, Eichenau6
+100.0
+innogy Ventures Vermögensverwaltung 6 GmbH, DE, Essen²
+innogy Vierzehnte Vermögensverwaltungs GmbH, DE, Essen²
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Budapest²
+100.0
+innogy Ventures GmbH, DE, Essen 1,8
+100.0
+Klimacom B.V., NL, Groningen¹
+100.0
+innogy TelNet Holding, s.r.o., CZ, Prague²
+Klíma és Hűtéstechnológia Tervező, Szerelő és Kereskedelmi Kft.,
+HU, Budapest¹
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+100.0
+Innogy Solutions Ireland Limited, IE, Dublin¹
+80.0
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+innogy Polska IT Support Sp. z o.o., PL, Warsaw¹
+100.0
+innogy Polska Development Sp. z o.o., PL, Warsaw²
+100.0
+innogy New Ventures LLC, US, Palo Alto¹
+46.5
+KEN GmbH & Co. KG, DE, Neunkirchen
+100.0
+50.0
+KEN Geschäftsführungsgesellschaft mbH, DE, Neunkirchen
+innogy Neunte Vermögensverwaltungs GmbH, DE, Essen²
+100.0
+100.0
+Kemsley CHP Limited, GB, Coventry¹
+innogy Metering GmbH, DE, Mülheim an der Ruhr¹
+33.3
+100.0
+innogy Polska Operations Sp. z o.o., PL, Warsaw²
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+28.6
+KEW Kommunale Energie- und Wasserversorgung Aktien-
+gesellschaft, DE, Neunkirchen5
+90.0
+innogy SE, DE, Essen¹
+100.0
+50.0
+KEVAG Telekom GmbH, DE, Koblenz
+innogy Rheinhessen Beteiligungs GmbH, DE, Essen 1,8
+innogy International Participations N.V., NL, 's-Hertogenbosch¹
+100.0
+100.0
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+100.0
+66.7
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+innogy Polska S.A., PL, Warsaw¹
+100.0
+50.0
+innogy Polska Solutions Sp. z o.o., PL, Warsaw¹
+100.0
+21.5
+Stake (%)
+100.0
+26.0
+HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
+Gemeinsames europäisches Unternehmen, DE, Hamm
+Hof Promotion B.V., NL, Eindhoven¹
+GNEE Gesellschaft zur Nutzung erneuerbarer Energien mbH
+Freisen, DE, Freisen
+50.0
+25.1
+100.0
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+hmstr GmbH, DE, Saarbrücken
+100.0
+GKB Gesellschaft für Kraftwerksbeteiligungen mbH, DE, Cottbus²
+GKD Gesellschaft für kommunale Dienstleistungen mbH, DE,
+Cologne
+23.9
+GISA GmbH, DE, Halle (Saale)6
+100.0
+Hermann Stibbe Verwaltungs-GmbH, DE, Wunstorf²
+100.0
+49.0
+Hennef (Sieg) Netz GmbH & Co. KG, DE, Hennef6
+49.0
+25.2
+Holsteiner Wasser GmbH, DE, Neumünster6
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen6
+49.9
+100.0
+Huisman Warmtetechniek B.V., NL, Stadskanaal¹
+Gottburg Energie- und Wärmetechnik GmbH & Co. KG i. L., DE,
+Leck6
+100.0
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+49.0
+Hub2Go GmbH, DE, Hamburg6
+50.0
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen
+100.0
+HSL Laibacher GmbH, DE, Wiesen²
+50.0
+GOLLIPP Bioerdgas GmbH & Co. KG, DE, Gollhofen
+45.0
+Home.ON GmbH, DE, Aachen6
+48.0
+50.0
+100.0
+HELIOS MB s.r.o., CZ, Prague²
+75.0
+Emmerthal¹
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG., DE,
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+(as of December 31, 2019)
+217
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Strategy and Objectives
+Report of the Supervisory Board
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+75.0
+innogy Consulting & Ventures Americas, LLC, US, Boston²
+innogy Consulting & Ventures Holdings LLC, US, Boston²
+innogy Consulting & Ventures UK Ltd., GB, London²
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+Geotermisk Operaterselskab ApS, DK, Kirke Saby6
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
+Braunau am Inn6
+20.0
+HanseWerk Natur GmbH, DE, Hamburg¹
+Harzwasserwerke GmbH, DE, Hildesheim5
+HaseNetz GmbH & Co. KG, DE, Gehrde6
+Havelstrom Zehdenick GmbH, DE, Zehdenick6
+100.0
+50.0
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co.
+OHG, DE, Neualbenreuth6
+41.7
+20.0
+100.0
+Heizungs- und Sanitärbau WIJA GmbH, DE,
+Bad Neuenahr-Ahrweiler²
+100.0
+Get Energy Solutions Szolgáltató Kft., HU, Budapest¹
+GfB, Gesellschaft für Baudenkmalpflege mbH, DE, Idar-Oberstein
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+Gichtgaskraftwerk Dillingen GmbH & Co. KG, DE, Dillingen6
+Ginger Teplo, s.r.o., CZ, Prague²
+iamsmart GmbH i. L., DE, Essen²
+40.0
+33.3
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein
+GmbH, DE, Kiel6
+25.1
+HCL Netze GmbH & Co. KG, DE, Herzebrock-Clarholz6
+20.0
+49.0
+25.1
+20.8
+Heizkraftwerk Zwickau Süd GmbH & Co. KG, DE, Zwickau6
+100.0
+66.7
+49.9
+GWG Kommunal GmbH, DE, Grevenbroich²
+60.0
+GWG Grevenbroich GmbH, DE, Grevenbroich¹
+100.0
+innogy Beteiligungsholding GmbH, DE, Essen 1,8
+100.0
+GSH Green Steam Hürth GmbH, DE, Munich²
+100.0
+innogy Benelux Holding B.V., NL, 's-Hertogenbosch¹
+50.0
+GrønGas Partner A/S, DK, Hirtshals6
+100.0
+innogy Aqua GmbH, DE, Mülheim an der Ruhr1,8
+100.0
+greenXmoney.com GmbH i. L., DE, Neu-Ulm²
+49.9
+Nienburg/Weser6
+89.9
+innogy Business Services Benelux B.V., NL, Arnhem¹
+innogy Business Services Polska Sp. z o.o., PL, Kraków¹
+100.0
+100.0
+Stake (%)
+Name, location
+Gottburg Verwaltungs GmbH i. L., DE, Leck6
+218
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+Notes
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments Pursuant to Section 313 (2) No. 5 HGB. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+100.0
+HanseWerk AG, DE, Quickborn¹
+100.0
+100.0
+Innogy Business Services UK Limited, GB, Swindon¹
+innogy Česká republika a.s., CZ, Prague¹
+100.0
+HanseGas GmbH, DE, Quickborn¹
+44.8
+Hams Hall Management Company Limited, GB, Coventry
+innogy Commodity Markets GmbH, DE, Essen²
+Greenplug GmbH, DE, Hamburg6
+66.5
+50.0
+100.0
+iND Kommunikationsleitungen GmbH & Co. KG, DE, Essen¹
+49.2
+GREEN Gesellschaft für regionale und erneuerbare Energie
+mbH, DE, Stolberg6
+100.0
+iND Immobilien GmbH & Co. KG, DE, Essen¹
+20.7
+100.0
+Green Sky Energy Limited, GB, Coventry¹
+iND Asset Komplementär GmbH, DE, Essen²
+100.0
+100.0
+20.7
+100.0
+Improvers B.V., NL, 's-Hertogenbosch¹
+Improbed AB, SE, Malmö²
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+GREEN GECCO Beteiligungsgesellschaft mbH & Co. KG, DE,
+Troisdorf6
+GREEN GECCO Beteiligungsgesellschaft-Verwaltungs GmbH,
+DE, Troisdorf6
+100.0
+Improvers Community B.V., NL, Amsterdam¹
+100.0
+InfraServ - Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz6
+Induboden GmbH, DE, Düsseldorf²
+greenited GmbH, DE, Hamburg6
+100.0
+50.0
+100.0
+Industry Development Services Limited, GB, Coventry2
+100.0
+Greenergetic Energie Service Management GmbH, DE, Bielefeld²
+Greenergetic GmbH, DE, Bielefeld¹
+49.0
+Industriekraftwerk Greifswald GmbH, DE, Kassel
+100.0
+Greenergetic Energie Service GmbH & Co. KG, DE, Bielefeld²
+100.0
+Induboden GmbH & Co. Grundstücksgesellschaft oHG, DE,
+Essen²
+45.0
+Green Solar Herzogenrath GmbH, DE, Herzogenrath
+25.1
+Stadtwerke Geseke Netze GmbH & Co. KG, DE, Geseke
+30.4
+Stadtwerke Velbert GmbH, DE, Velbert5
+24.9
+Stadtwerke Unna GmbH, DE, Unna
+Stadtwerke Gescher GmbH, DE, Gescher6
+24.0
+Stadtwerke Tornesch GmbH, DE, Tornesch6
+49.0
+Stadtwerke Geldern GmbH, DE, Geldern5
+49.0
+25.1
+Stadtwerke Vilshofen GmbH, DE, Vilshofen
+Stadtwerke Wadern GmbH, DE, Wadern
+Stadtwerke Geseke Netze Verwaltung GmbH, DE, Geseke
+Stadtwerke GmbH Bad Kreuznach, DE, Bad Kreuznach5
+20.0
+Stadtwerke Weilburg GmbH, DE, Weilburg
+Stadtwerke Haan GmbH, DE, Haan
+25.1
+Stadtwerke Waltrop Netz GmbH & Co. KG, DE, Waltrop
+25.1
+41.0
+Stadtwerke Goch Netze Verwaltungsgesellschaft mbH, DE, Goch
+Stadtwerke Goch Netze GmbH & Co. KG, DE, Goch6
+49.0
+24.5
+24.9
+Stadtwerke Vlotho GmbH, DE, Vlotho
+25.1
+25.1
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+49.0
+Stadtwerke Steinfurt, Gesellschaft mit beschränkter Haftung,
+Stadtwerke Dülmen Verwaltungs-GmbH, DE, Dülmen
+50.0
+25.1
+Reichenbach im Vogtland
+24.5
+Stadtwerke Düren GmbH, DE, Düren¹,9
+49.9
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten6
+39.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+Ebermannstadt6
+Stadtwerke Roẞlau Fernwärme GmbH, DE, Dessau-Roßlau6
+49.0
+25.0
+Stadtwerke Saarlouis GmbH, DE, Saarlouis5
+49.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+Stadtwerke Schwarzenberg GmbH, DE,
+24.9
+Stadtwerke Garbsen GmbH, DE, Garbsen
+49.0
+Stadtwerke Siegburg GmbH & Co. KG, DE, Siegburg
+39.0
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+33.0
+37.8
+29.0
+Stadtwerke Essen Aktiengesellschaft, DE, Essen
+27.5
+Schwarzenberg/Erzgeb.6
+24.9
+Stadtwerke Emmerich GmbH, DE, Emmerich am Rhein5
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+Stadtwerke Husum GmbH, DE, Husum
+24.5
+Stadtwerke Weißenfels Gesellschaft mit beschränkter Haftung,
+DE, Weißenfels
+40.0
+Stadtwerke Zeitz Gesellschaft mit beschränkter Haftung, DE,
+Zeitz5
+Stadtwerke Merseburg GmbH, DE, Merseburg5
+40.0
+STAWAG Abwasser GmbH, DE, Aachen²
+100.0
+Stadtwerke Merzig Gesellschaft mit beschränkter Haftung, DE,
+Merzig5
+49.9
+STAWAG Infrastruktur Monschau GmbH & Co. KG, DE,
+Monschau²
+100.0
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald
+24.9
+STAWAG Infrastruktur Monschau Verwaltungs GmbH, DE,
+Monschau²
+100.0
+Stadtwerke Neuss Energie und Wasser GmbH, DE, Neuss5
+20.8
+Stadtwerke Reichenbach/Vogtland GmbH, DE,
+STEAG Windpark Ullersdorf GmbH & Co. KG, DE, Jamlitz
+100.0
+STAWAG Infrastruktur Simmerath Verwaltungs GmbH, DE,
+Simmerath²
+49.0
+Stadtwerke Meerbusch GmbH, DE, Meerbusch5
+Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching
+Stadtwerke Oberkirch GmbH, DE, Oberkirch6
+100.0
+STAWAG Infrastruktur Simmerath GmbH & Co. KG, DE,
+Simmerath²
+49.9
+Stadtwerke Nordfriesland GmbH, DE, Niebüll6
+24.9
+33.3
+49.9
+24.5
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt6
+24.5
+Stadtwerke Kamp-Lintfort GmbH, DE, Kamp-Lintfort5
+49.0
+Stadtwerke Werl GmbH, DE, Werl6
+25.1
+Stadtwerke Kerpen GmbH & Co. KG, DE, Kerpen
+25.1
+Stadtwerke Wesel Strom-Netzgesellschaft mbH & Co. KG, DE,
+Stadtwerke Kirn GmbH, DE, Kirn/Nahe5
+49.0
+Wesel6
+25.0
+Stadtwerke Korschenbroich GmbH, DE, Korschenbroich²
+100.0
+Stadtwerke Langenfeld GmbH, DE, Langenfeld6
+20.0
+Stadtwerke Willich Gesellschaft mit beschränkter Haftung, DE,
+Willich5
+Stadtwerke Meerane GmbH, DE, Meerane5
+29.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+26.0
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel
+22.7
+49.4
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+Stadtwerke Lübz GmbH, DE, Lübz
+40.0
+49.0
+Stadtwerke Wismar GmbH, DE, Wismar
+Stadtwerke Lingen GmbH, DE, Lingen (Ems)4
+25.1
+25.0
+50.0
+SEC O Sp. z o.o., PL, Szczecin²
+24.8
+SEC J Sp. z o.o., PL, Szczecin²
+SEC K Sp. z o.o., PL, Szczecin²
+100.0
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+Magdeburg
+26.7
+100.0
+Städtisches Wasserwerk Eschweiler GmbH, DE, Eschweiler6
+24.9
+SEC L Sp. z o.o., PL, Szczecin²
+100.0
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+SEC M Sp. z o.o., PL, Szczecin²
+100.0
+Neustadt a. Rbge.6
+24.9
+SEC Myślibórz Sp. z o.o., PL, Myślibórz²
+89.9
+SEC N Sp. z o.o., PL, Szczecin²
+SEC Region Sp. z o.o., PL, Barlinek²
+25.1
+Stadtwerk Verl Netz GmbH & Co. KG, DE, Verl
+100.0
+SEC P Sp. z o.o., PL, Szczecin²
+49.0
+26.7
+49.0
+100.0
+SEC Obrót Sp. z o.o., PL, Szczecin²
+100.0
+24.9
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Neustadt a. Rbge.6
+100.0
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen
+100.0
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg5
+36.8
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . ³ Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . ⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+35.0
+SEC B Sp. z o.o., PL, Szczecin²
+100.0
+SpreeGas Gesellschaft für Gasversorgung und
+SEC C Sp. z o.o., PL, Szczecin²
+100.0
+Energiedienstleistung mbH, DE, Cottbus
+33.3
+SEC D Sp. z o.o., PL, Szczecin²
+100.0
+SSW - Stadtwerke St. Wendel GmbH & Co KG., DE, St. Wendel
+49.5
+SEC E Sp. z o.o., PL, Szczecin²
+100.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+100.0
+Städtische Werke Borna GmbH, DE, Borna
+100.0
+SECI Sp. z o.o., PL, Szczecin²
+SEC H Sp. z o.o., PL, Szczecin²
+29.0
+Städtische Betriebswerke Luckenwalde GmbH, DE, Luckenwalde6
+100.0
+100.0
+48.0
+Stadtentwässerung Schwerte GmbH, DE, Schwerte
+100.0
+SEC F Sp. z o.o., PL, Szczecin²
+49.5
+SSW Stadtwerke St. Wendel Geschäftsführungsgesellschaft mbH,
+DE, St. Wendel
+SEC G Sp. z o.o., PL, Szczecin²
+Beteiligungs-GmbH & Co. KG, DE, Dülmen4
+SEC Serwis Sp. z o.o., PL, Szczecin²
+Stadtwerke - Strom Plauen GmbH & Co. KG, DE, Plauen6
+Stadtwerke Ahaus GmbH, DE, Ahaus
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+223
+(as of December 31, 2019)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Stadtwerke Blankenburg GmbH, DE, Blankenburg6
+30.0
+Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE, Olching6
+49.0
+Stadtwerke Bogen GmbH, DE, Bogen
+41.0
+Stadtwerke Parchim GmbH, DE, Parchim
+25.2
+Stadtwerke Ratingen GmbH, DE, Ratingen
+Stadtwerke Dülmen Dienstleistungs- und
+49.9
+Stadtwerke Radevormwald GmbH, DE, Radevormwald5
+20.0
+Stadtwerke Duisburg Aktiengesellschaft, DE, Duisburg5
+Report of the Supervisory Board
+49.0
+49.0
+Stadtwerke Dillingen/Saar GmbH, DE, Dillingen6
+35.0
+Stadtwerke Premnitz GmbH, DE, Premnitz
+49.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk6
+100.0
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Stadtwerke Bitterfeld-Wolfen GmbH, DE, Bitterfeld-Wolfen5
+49.0
+36.0
+SEG Solarenergie Guben GmbH & Co. KG, DE, Guben6
+25.1
+Stadtwerke Aschersleben GmbH, DE, Aschersleben5
+35.0
+SEG Solarenergie Guben Management GmbH, DE, Lützen²
+100.0
+Stadtwerke Aue-Bad Schlema GmbH, DE, Aue-Bad Schlema6
+24.5
+Selm Netz GmbH & Co. KG, DE, Selm6
+25.1
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt6
+36.0
+SERVICE plus GmbH, DE, Neumünster²
+100.0
+Stadtwerke Barth GmbH, DE, Barth6
+50.0
+SHW/RWE Umwelt Aqua Vodogradnja d.o.o., HR, Zagreb4
+45.0
+Stadtwerke Bernburg GmbH, DE, Bernburg (Saale)5
+50.0
+SHS Ventures GmbH & Co. KGaA, DE, Völklingen
+40.0
+49.0
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth5
+Stadtwerke Bergen GmbH, DE, Bergen
+14.0
+share2drive GmbH, DE, Aachen
+100.0
+Service Plus Recycling GmbH, DE, Neumünster²
+49.0
+24.9
+Notes
+35.0
+Name, location
+Weißenhorn6
+35.0
+TEPLO Votice s.r.o., CZ, Votice6
+20.0
+The Power Generation Company Limited, GB, Coventry2
+TNA Talsperren- und Grundwasser-Aufbereitungs- und
+Vertriebsgesellschaft mbH, DE, Nonnweiler6
+100.0
+Verwaltungsgesellschaft Energieversorgung Timmendorfer
+Strand mbH, DE, Timmendorfer Strand²
+51.0
+Verwaltungsgesellschaft GKW Dillingen mbH, DE, Dillingen
+25.2
+22.8
+Verwaltungsgesellschaft Scharbeutzer Energie- und
+Triangeln 10 i Norrköping Fastighets AB, SE, Malmö²
+100.0
+Netzgesellschaft mbH, DE, Scharbeutz²
+51.0
+Triangeln 11 AB, SE, Malmö²
+Visualix GmbH, DE, Berlin
+33.3
+Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling
+100.0
+Visioncash, GB, Coventry¹
+33.3
+80.0
+100.0
+33.3
+100.0
+Verwaltungsgesellschaft Strom-Netzgesellschaft Voerde mbH,
+DE, Voerde²
+100.0
+Triangeln 15 i Norrköping Fastighets AB, SE, Malmö²
+Trinkwasserverbund Niederrhein TWN GmbH, DE, Grevenbroich
+Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling
+100.0
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Budapest²
+25.0
+Verwaltungsgesellschaft Energie Weißenhorn GmbH, DE,
+50.0
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+225
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Syna GmbH, DE, Frankfurt am Main¹
+100.0
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+66.5
+Szombathelyi Erőmű Zrt., HU, Budapest²
+80.0
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+Versorgungskasse Energie (VVaG) i. L., DE, Hanover6
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein
+49.0
+69.6
+49.0
+Verwaltungsgesellschaft Dorsten Netz mbH, DE, Dorsten
+Tegel Energie GbR, DE, Berlin
+47.0
+Technische Werke Naumburg GmbH, DE, Naumburg (Saale)6
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+Teplo T s.r.o., CZ, Tišnov²
+Verteilnetze Energie Weißenhorn GmbH & Co. KG, DE,
+Weißenhorn6
+Tankey B.V., NL, 's-Hertogenbosch5
+100.0
+Verteilnetz Plauen GmbH, DE, Plauen¹
+25.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely6
+20.0
+42.5
+Strategy and Objectives
+VKB-GmbH, DE, Neunkirchen¹
+TWE Technische Werke der Gemeinde Ensdorf GmbH, DE,
+48.0
+VSE NET GmbH, DE, Saarbrücken¹
+100.0
+ucair GmbH, DE, Berlin²
+94.9
+VSE Verteilnetz GmbH, DE, Saarbrücken¹
+100.0
+Ultra-Fast Charging Venture Scandinavia ApS, DK, Copenhagen
+50.0
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen
+22.2
+Union Grid s.r.o., CZ, Prague
+34.0
+UNTERE ILLER AKTIENGESELLSCHAFT, DE, Landshut6
+40.0
+VSE-Stiftung Gemeinnützige Gesellschaft zur Förderung von
+Bildung, Erziehung, Kunst und Kultur mbH, DE, Saarbrücken²
+VWS Verbundwerke Südwestsachsen GmbH, DE,
+Lichtenstein/Sa.¹
+100.0
+40.0
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+Wärmeversorgung Schwaben GmbH, DE, Augsburg²
+100.0
+Utility Debt Services Limited, GB, Coventry²
+50.0
+Uranit GmbH, DE, Jülich4
+Überlandwerk Leinetal GmbH, DE, Gronau
+49.0
+Wärmeversorgung Limburg GmbH, DE, Limburg an der Lahn6
+Wärmeversorgung Mücheln GmbH, DE, Mücheln
+25.0
+Untermain Erneuerbare Energien GmbH, DE, Raunheim
+49.0
+Untermain Energie Projekt AG & Co. KG., DE, Kelsterbach6
+97.9
+50.0
+50.0
+51.4
+74.6
+Ensdorf6
+49.0
+Volta Limburg B.V., NL, Schinnen¹
+100.0
+TWL Technische Werke der Gemeinde Losheim GmbH, DE,
+Losheim am See6
+Volta Participaties 1 BV, NL, Schinnen¹
+100.0
+49.9
+Volta Service B.V., NL, Schinnen¹
+100.0
+TWM Technische Werke der Gemeinde Merchweiler
+Gesellschaft mit beschränkter Haftung, DE, Merchweiler6
+Volta Solar B.V., NL, Heerlen¹
+100.0
+49.0
+Volta Solar VOF, NL, Heerlen¹
+60.0
+TWRS Technische Werke der Gemeinde Rehlingen-Siersburg
+Haftung, DE, Krumbach¹
+100.0
+VSE Agentur GmbH, DE, Saarbrücken²
+Überlandwerk Krumbach Gesellschaft mit beschränkter
+100.0
+VSE-Windpark Merchingen Verwaltungs GmbH, DE, Saarbrücken²
+VSE Aktiengesellschaft, DE, Saarbrücken¹
+51.0
+VSE-Windpark Merchingen GmbH & Co. KG, DE, Saarbrücken²
+TWS Technische Werke der Gemeinde Saarwellingen GmbH,
+DE, Saarwellingen
+50.0
+VOLTARIS GmbH, DE, Maxdorf6
+35.0
+GmbH, DE, Rehlingen-Siersburg6
+100.0
+Report of the Supervisory Board
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12..13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+33.0
+49.0
+49.0
+49.0
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter
+Haftung, DE, Ruhpolding²
+100.0
+49.0
+49.9
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim
+49.0
+25.1
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Unterschleißheim6
+49.0
+Stromnetz Pullach GmbH, DE, Pullach im Isartal6
+49.0
+Stromverwaltung Schwalmtal GmbH, DE, Schwalmtal6
+51.0
+Stromnetz Siegen Verwaltungs GmbH, DE, Siegen²
+SüdWasser 1. Beteiligungs GmbH, DE,
+49.0
+36.8
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel
+Stromnetz Verbandsgemeinde Katzenelnbogen GmbH & Co. KG,
+DE, Katzenelnbogen
+36.8
+Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH,
+DE, Pfaffenhofen
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG,
+DE, Brandenburg an der Havel
+Stromnetz Traunreut Verwaltungs GmbH, DE, Traunreut
+100.0
+Stromnetz Traunreut GmbH & Co. KG, DE, Traunreut²
+50.0
+strotög GmbH Strom für Töging, DE, Töging am Inn6
+100.0
+49.0
+Stromnetz Verbandsgemeinde Katzenelnbogen
+49.0
+49.0
+224
+Stake (%)
+Name, location
+Stake (%)
+Stibbe Kälte-Klima-Technik GmbH & Co. KG, DE, Wunstorf²
+100.0
+Stromnetzgesellschaft Neuenhaus Verwaltungs-GmbH, DE,
+Neuenhaus6
+49.0
+Strom Germering GmbH, DE, Germering²
+90.0
+Stromnetz Diez GmbH und Co. KG, DE, Diez
+25.1
+Stromnetzgesellschaft Neunkirchen-Seelscheid mbH & Co. KG,
+DE, Neunkirchen-Seelscheid
+49.0
+Stromnetz Diez Verwaltungsgesellschaft mbH, DE, Diez6
+Stromnetz Euskirchen GmbH & Co. KG, DE, Euskirchen
+Stromnetz Friedberg GmbH & Co. KG, DE, Friedberg4
+Stromnetz Gersthofen GmbH & Co. KG, DE, Gersthofen
+Stromnetz Günzburg GmbH & Co. KG, DE, Günzburg4
+Stromnetz Günzburg Verwaltungs GmbH, DE, Günzburg6
+Stromnetz Hallbergmoos GmbH & Co. KG, DE, Hallbergmoos²
+Stromnetz Hallbergmoos Verwaltungs GmbH, DE, Hallbergmoos²
+Stromnetz Hofheim GmbH & Co. KG, DE, Hofheim am Taunus6
+Stromnetz Hofheim Verwaltungs GmbH, DE, Hofheim am Taunus
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach6
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach6
+Stromnetz Neckargemünd GmbH, DE, Neckargemünd
+Stromnetz Pulheim GmbH & Co. KG, DE, Pulheim
+25.1
+49.0
+49.0
+49.0
+100.0
+Stromnetzgesellschaft Windeck mbH & Co. KG, DE, Siegburg²
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf6
+Stromversorgung Angermünde GmbH, DE, Angermünde
+Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg
+Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
+Pfaffenhofen
+100.0
+100.0
+49.0
+49.0
+49.0
+51.0
+Schwalmtal6
+25.1
+Stromnetzgesellschaft Schwalmtal mbH & Co. KG, DE,
+49.0
+Schönbrunn i. Steigerwald²
+100.0
+Verwaltungsgesellschaft mbH, DE, Katzenelnbogen
+Strom-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg
+Stromnetzgesellschaft Bramsche mbH & Co. KG, DE, Bramsche6
+25.1
+SVO Vertrieb GmbH, DE, Celle¹
+100.0
+25.1
+SVS-Versorgungsbetriebe GmbH, DE, Stadtlohn4
+30.0
+Strom-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+Stromnetzgesellschaft Gescher GmbH & Co. KG, DE, Gescher6
+Strom-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG,
+DE, Kerpen
+25.1
+SWG Glasfaser Netz GmbH, DE, Geesthacht
+33.4
+25.1
+SWL-energis Netzgesellschaft mbH & Co. KG., DE, Lebach²
+100.0
+SWL-energis-Geschäftsführungs-GmbH, DE, Lebach²
+100.0
+25.1
+SWTE Netz Verwaltungsgesellschaft mbH, DE, Ibbenbüren
+49.0
+Neuenhaus6
+33.0
+SWTE Netz GmbH & Co. KG, DE, Ibbenbüren5
+25.1
+50.1
+26.0
+Stromnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann6
+Stromnetzgesellschaft Neuenhaus mbH & Co. KG, DE,
+49.0
+25.1
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg6
+SWS Energie GmbH, DE, Stralsund5
+25.1
+Strom-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG,
+DE, Bergheim6
+SWT trilan GmbH, DE, Trier
+SVO Holding GmbH, DE, Celle¹
+49.0
+25.1
+Süwag Energie AG, DE, Frankfurt am Main¹
+49.0
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf.6
+100.0
+Südwestsächsische Netz GmbH, DE, Crimmitschau¹
+49.0
+77.6
+STROMNETZ VG DIEZ Verwaltungsgesellschaft mbH, DE,
+Altendiez6
+Südwestfalen Netz-Verwaltungsgesellschaft mbH, DE, Netphen
+49.0
+Stromnetz VG Diez GmbH und Co. KG, DE, Altendiez
+100.0
+SüdWasser GmbH, DE, Erlangen²
+49.0
+49.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+Stromnetz Würmtal GmbH & Co. KG, DE, Planegg²
+Süwag Grüne Energien und Wasser AG & Co. KG, DE,
+Frankfurt am Main¹
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+50.0
+100.0
+Süwag Vertrieb AG & Co. KG, DE, Frankfurt am Main¹
+SVH Stromversorgung Haar GmbH, DE, Haar6
+49.0
+74.5
+Stromnetzgesellschaft Bad Salzdetfurth-Diekholzen mbH &
+Co. KG, DE, Bad Salzdetfurth
+Stromnetze Peiner Land GmbH, DE, Ilsede6
+100.0
+Süwag Management GmbH, DE, Frankfurt am Main²
+100.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Planegg²
+100.0
+49.0
+100.0
+RegioNetz München Verwaltungs GmbH, DE, Garching6
+50.0
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven6
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad Münder6
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen6
+34.8
+Netzgesellschaft W-1 GmbH, DE, Helmstedt²
+100.0
+49.0
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+50.1
+NEW AG, DE, Mönchengladbach 1,9
+40.0
+49.0
+NEW b_gas Eicken GmbH, DE, Schwalmtal²
+100.0
+Netzgesellschaft Bedburg Verwaltungs-GmbH, DE, Bedburg6
+Netzgesellschaft Betzdorf GmbH & Co. KG, DE, Betzdorf6
+49.0
+New Cogen Sp. z o.o., PL, Warsaw²
+100.0
+49.0
+NEW Re GmbH, DE, Mönchengladbach²
+Netzgesellschaft GmbH & Co. KG Bad Homburg v. d. Höhe, DE,
+Bad Homburg v. d. Höhe6
+100.0
+NEW NiederrheinWasser GmbH, DE, Viersen¹
+49.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden
+49.0
+100.0
+49.0
+Netzgesellschaft Elsdorf Verwaltungs-GmbH, DE, Elsdorf6
+49.9
+Netzgesellschaft Bühlertal GmbH & Co. KG, DE, Bühlertal
+100.0
+NEW Netz GmbH, DE, Geilenkirchen¹
+NEW Niederrhein Energie und Wasser GmbH, DE,
+Mönchengladbach¹
+95.5
+49.0
+Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Helmstedt²
+Netzgesellschaft Südwestfalen mbH & Co. KG, DE, Netphen
+Netzgesellschaft Syke GmbH, DE, Syke
+LEW TelNet GmbH, DE, Neusäß¹
+100.0
+Naturstrom Betriebsgesellschaft Oberhonnefeld mbH, DE,
+Koblenz6
+25.0
+LEW Verteilnetz GmbH, DE, Augsburg¹
+100.0
+Nebelhornbahn-Aktiengesellschaft, DE, Oberstdorf5
+20.1
+LEW Wasserkraft GmbH, DE, Augsburg¹
+100.0
+Nederland Isoleert B.V., NL, Amersfoort¹
+100.0
+Licht Groen B.V., NL, Amsterdam¹
+100.0
+Nederland Schildert B.V., NL, Amersfoort¹
+100.0
+Lichtverbund Straßenbeleuchtung GmbH, DE, Helmstedt²
+100.0
+Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin²
+100.0
+Nederland Verkoopt B.V., NL, Amersfoort¹
+100.0
+Nederland Schildert Rijnmond B.V., NL, Amersfoort¹
+Stake (%)
+100.0
+Name, location
+220
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+Notes
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). .³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . ⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+89.8
+Stake (%)
+100.0
+45.7
+100.0
+100.0
+Netzgesellschaft Korb Verwaltungs-GmbH, DE, Korb6
+49.9
+NordNetz GmbH, DE, Quickborn²
+100.0
+Netzgesellschaft Kreisstadt Bergheim Verwaltungs-GmbH, DE,
+Bergheim6
+Novenerg limited liability company for energy activities, HR,
+49.0
+Zagreb6
+50.0
+Netzgesellschaft Lauf GmbH & Co. KG, DE, Lauf6
+49.9
+Novo Innovations Limited, GB, Coventry²
+100.0
+Netzgesellschaft Leutenbach GmbH & Co. KG, DE, Leutenbach6
+49.9
+Npower Business and Social Housing Limited, GB, Swindon¹
+49.0
+Netzgesellschaft Maifeld Verwaltungs GmbH, DE, Polch
+100.0
+Npower Financial Services Limited, GB, Swindon¹
+49.0
+Netzgesellschaft Maifeld GmbH & Co. KG, DE, Polch
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+49.9
+Leutenbach6
+100.0
+Npower Commercial Gas Limited, GB, Swindon¹
+Netzgesellschaft Leutenbach Verwaltungs-GmbH, DE,
+100.0
+Npower Direct Limited, GB, Swindon¹
+NEW Smart City GmbH, DE, Mönchengladbach²
+49.9
+100.0
+Netzgesellschaft Grimma GmbH & Co. KG, DE, Grimma
+49.0
+NEW Tönisvorst GmbH, DE, Tönisvorst¹
+98.1
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+49.0
+NEW Viersen GmbH, DE, Viersen¹
+100.0
+Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf6
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE, Giesen
+50.0
+NEW Windenergie Verwaltung GmbH, DE, Mönchengladbach²
+100.0
+49.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE,
+Giesen6
+49.0
+NEW Windpark Linnich GmbH & Co. KG, DE, Mönchengladbach²
+NEW Windpark Viersen GmbH & Co. KG, DE, Mönchengladbach²
+NFPA Holdings Limited, GB, Newcastle upon Tyne
+100.0
+NIS Norddeutsche Informations-Systeme Gesellschaft mbH,
+DE, Schwentinental²
+49.0
+Netzgesellschaft Hüllhorst GmbH & Co. KG, DE, Hüllhorst
+49.0
+Horn-Bad Meinberg6
+51.0
+Netzgesellschaft Korb GmbH & Co. KG, DE, Korb
+NiersEnergieNetze Verwaltungs-GmbH, DE, Kevelaer
+51.0
+NiersEnergieNetze GmbH & Co. KG, DE, Kevelaer6
+49.0
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
+Hohen Neuendorf6
+25.0
+100.0
+Netzgesellschaft Horn-Bad Meinberg GmbH & Co. KG, DE,
+Npower Gas Limited, GB, Swindon¹
+LEW Service & Consulting GmbH, DE, Augsburg¹
+Nahwärme Ascha GmbH, DE, Ascha²
+100.0
+Kommunalwerk Rudersberg GmbH & Co. KG, DE, Rudersberg6
+49.9
+Kommunalwerk Rudersberg Verwaltungs-GmbH, DE, Rudersberg6
+49.9
+Konnektor B.V., NL, Amsterdam¹
+100.0
+Konsortium Energieversorgung Opel beschränkt haftende oHG,
+DE, Karlstein 4,10
+66.7
+Koprivnica Opskrba d.o.o., HR, Koprivnica¹
+100.0
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg6
+LSW Holding GmbH & Co. KG, DE, Wolfsburg 5, 10
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg6
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+Luna Lüneburg GmbH, DE, Lüneburg
+57.0
+57.0
+57.0
+57.0
+49.0
+Matrix Control Solutions Limited, GB, Coventry¹
+100.0
+Kraftwerk Marl GmbH, DE, Munich¹
+45.0
+46.6
+MAINGAU Energie GmbH, DE, Obertshausen5
+Mainzer Wärme PLUS GmbH, DE, Mainz
+100.0
+100.0
+100.0
+Kraftwerk Burghausen GmbH, DE, Munich¹
+85.0
+Magnalink, a.s., CZ, Hradec Králové²
+100.0
+Koprivnica Plin d.o.o., HR, Koprivnica¹
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+100.0
+49.0
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+219
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Kommunale Dienste Marpingen Gesellschaft mit beschränkter
+Haftung, DE, Marpingen
+49.0
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+Lighting for Staffordshire Limited, GB, Coventry¹
+60.0
+100.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt6
+Liikennevirta Oy, FI, Helsinki
+KG, DE, Steinheim an der Murr6
+Kommunale Netzgesellschaft Steinheim a. d. Murr GmbH & Co.
+25.0
+100.0
+Livisi GmbH, DE, Essen¹
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+gemeinnützige GmbH, DE, Celle
+Local Energies, a.s., CZ, Zlín - Malenovice²
+Lößnitz Netz GmbH & Co. KG, DE, Lößnitz²
+Lößnitz Netz Verwaltungs GmbH, DE, Lößnitz²
+78.0
+25.0
+Kommunale Klimaschutzgesellschaft Landkreis Celle gemein-
+nützige GmbH, DE, Celle
+50.0
+Lillo Energy NV, BE, Brussels
+49.0
+34.3
+Limfjordens Bioenergi ApS, DK, Frederiksberg²
+90.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+medl GmbH, DE, Mülheim an der Ruhr5
+Mitteldeutsche Netzgesellschaft Strom mbH, DE, Halle (Saale)¹
+Mittlere Donau Kraftwerke AG, DE, Landshut¹, 12
+100.0
+40.0
+Lech Energie Verwaltung GmbH, DE, Augsburg²
+100.0
+MNG Stromnetze GmbH & Co. KG, DE, Lüdinghausen
+25.1
+Lechwerke AG, DE, Augsburg¹
+89.9
+Leitungspartner GmbH, DE, Düren¹
+100.0
+MNG Stromnetze Verwaltungs GmbH, DE, Lüdinghausen
+Montcogim - Plinara d.o.o., HR, Sveta Nedelja¹
+25.1
+100.0
+Lemonbeat GmbH, DE, Dortmund²
+100.0
+MONTCOGIM-SISAK d.o.o., HR, Sisak²
+100.0
+LEW Netzservice GmbH, DE, Augsburg¹
+49.0
+Murrhardt Netz AG & Co. KG, DE, Murrhardt
+100.0
+LEW Beteiligungsgesellschaft mbH, DE, Gundremmingen¹
+100.0
+59.7
+100.0
+Haftung, DE, Gundremmingen¹
+100.0
+Mosoni-Duna Menti Szélerőmű Kft., HU, Budapest²
+LEW Anlagenverwaltung Gesellschaft mit beschränkter
+100.0
+MotionWerk GmbH, DE, Essen²
+100.0
+Lech Energie Gersthofen GmbH & Co. KG, DE, Gersthofen²
+Mitteldeutsche Netzgesellschaft mbH, DE, Chemnitz²
+39.0
+Kraftwerk Wehrden Gesellschaft mit beschränkter Haftung,
+DE, Völklingen
+Melle Netze GmbH & Co. KG, DE, Melle6
+50.0
+33.3
+MEON Pensions GmbH & Co. KG, DE, Grünwald 1,8
+100.0
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen
+KSP Kommunaler Service Püttlingen GmbH, DE, Püttlingen
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG i. L.,
+DE, Grünwald²
+41.7
+MEON Verwaltungs GmbH, DE, Grünwald²
+100.0
+40.0
+Metering Süd GmbH & Co. KG, DE, Augsburg6
+34.0
+Midlands Electricity Limited, GB, Coventry²
+100.0
+90.0
+100.0
+100.0
+Mitteldeutsche Netzgesellschaft Gas HD mbH, DE, Halle (Saale)²
+Mitteldeutsche Netzgesellschaft Gas mbH, DE, Halle (Saale)¹
+100.0
+69.6
+100.0
+Landwehr Wassertechnik GmbH, DE, Schöppenstedt²
+LandE GmbH, DE, Wolfsburg¹
+100.0
+Saarbrücken²
+75.4
+MITGAS Mitteldeutsche Gasversorgung GmbH, DE, Halle (Saale)¹
+74.9
+KVK Kompetenzzentrum Verteilnetze und Konzessionen GmbH,
+DE, Cologne
+25.1
+MINUS 181 GmbH, DE, Parchim6
+KWS Kommunal-Wasserversorgung Saar GmbH, DE,
+100.0
+Netzgesellschaft Osnabrücker Land GmbH & Co. KG, DE,
+Bohmte4
+Npower Group Limited, GB, Swindon¹
+R-KOM Regensburger Telekommunikationsgesellschaft mbH &
+Co. KG, DE, Regensburg
+20.0
+Propan Rheingas GmbH, DE, Brühl
+27.5
+R-KOM Regensburger Telekommunikationsverwaltungs-
+Propan Rheingas GmbH & Co Kommanditgesellschaft, DE, Brühl5
+29.6
+gesellschaft mbH, DE, Regensburg
+20.0
+Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o., PL, Choszczno²
+100.0
+RL Besitzgesellschaft mbH, DE, Monheim am Rhein¹
+100.0
+PS Energy UK Limited, GB, Swindon¹
+100.0
+RL Beteiligungsverwaltung beschr. haft. OHG, DE,
+Monheim am Rhein¹
+Rain Biomasse Wärmegesellschaft mbH, DE, Rain4, 10
+25.1
+Rüthen Gasnetz GmbH & Co. KG, DE, Rüthen6
+100.0
+Qualitas-AMS GmbH, DE, Siegen²
+30.1
+50.0
+RURENERGIE GmbH, DE, Düren6
+Purena GmbH, DE, Wolfenbüttel¹
+100.0
+RUMM Limited, GB, Ystrad Mynach¹
+100.0
+Purena Consult GmbH, DE, Wolfenbüttel²
+100.0
+94.1
+64.9
+Projecta 14 GmbH, DE, Saarbrücken
+PreussenElektra GmbH, DE, Hanover¹
+Rhein-Ahr-Energie Netz GmbH & Co. KG, DE, Grafschaft
+25.1
+Powergen Power No. 2 Limited, GB, Coventry²
+100.0
+RheinEnergie AG, DE, Cologne5
+20.0
+Powergen Serang Limited, GB, Coventry2
+100.0
+Rheinland Westfalen Energiepartner GmbH, DE, Essen²
+100.0
+Powergen UK Investments, GB, Coventry²
+100.0
+Rhein-Main-Donau GmbH, DE, Landshut
+22.5
+Powerhouse B.V., NL, Almere¹
+100.0
+Rhein-Sieg Netz GmbH, DE, Siegburg¹
+33.3
+RIWA GmbH Gesellschaft für Geoinformationen, DE,
+Kempten (Allgäu)6
+50.0
+Neuss mit beschränkter Haftung, DE, Neuss
+PRENU Projektgesellschaft für Rationelle Energienutzung in
+100.0
+100.0
+RHENAGBAU Gesellschaft mit beschränkter Haftung, DE,
+Cologne²
+prego services GmbH, DE, Saarbrücken
+66.7
+rhenag Rheinische Energie Aktiengesellschaft, DE, Cologne¹
+100.0
+Powerhouse Energy Solutions S.L., ES, Madrid²
+100.0
+50.0
+100.0
+RWE Dhabi Union Energy LLC, AE, Abu Dhabi
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). .³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+Söderåsens Bioenergi AB, SE, Malmö²
+63.3
+SARIO Grundstücks-Vermietungsgesellschaft mbH & Co.
+Solar Energy Group S.p.A., IT, Pordenone¹
+80.0
+Objekt Würzburg KG, DE, Düsseldorf1, 12
+0.0
+Solar Noord B.V., NL, Stadskanaal¹
+100.0
+Scarcroft Investments Limited, GB, Swindon²
+100.0
+Solar Service S.r.l., IT, Pordenone²
+100.0
+Scharbeutzer Energie- und Netzgesellschaft mbH & Co. KG, DE,
+Scharbeutz²
+Solar Supply Sweden AB, SE, Karlshamn²
+100.0
+Sønderjysk Biogas Løgumkloster ApS, DK, Bevtoft
+100.0
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+50.0
+Sønderjysk Biogas Bevtoft A/S, DK, Vojens
+78.0
+Sandersdorf-Brehna6
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+Solnet d.o.o., HR, Zagreb¹
+75.0
+SchlauTherm GmbH, DE, Saarbrücken²
+50.0
+SolarProjekt Mainaschaff GmbH, DE, Mainaschaff
+51.0
+100.0
+24.5
+Sandersdorf-Brehna Netz GmbH & Co. KG, DE,
+SmartSim GmbH, DE, Essen
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+222
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+RWW Rheinisch-Westfälische Wasserwerksgesellschaft mbH,
+DE, Mülheim an der Ruhr¹
+79.8
+Siegener Versorgungsbetriebe GmbH, DE, Siegen
+Skandinaviska Kraft AB, SE, Halmstad²
+24.9
+100.0
+S.C. Salgaz S.A., RO, Salonta²
+55.6
+Skive GreenLab Biogas ApS, DK, Frederiksberg
+100.0
+Safetec-Swiss GmbH, CH, Stans²
+100.0
+Smart Energy Plattling GmbH, DE, Munich²
+100.0
+Heidelberg²
+24.0
+42.5
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+21.0
+ŠKO-ENERGO, s.r.o., CZ, Mladá Boleslav
+100.0
+Safekont GmbH, DE, Munich²
+50.0
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav5
+Powergen Power No. 1 Limited, GB, Coventry²
+24.9
+Rhegio Dienstleistungen GmbH, DE, Rhede6
+40.0
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. 9Control by virtue of company contract. . 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+221
+Name, location
+Stake (%)
+Name, location
+Oer-Erkenschwick Netz GmbH & Co. KG, DE, Oer-Erkenschwick6
+49.0
+Rampion Renewables Limited, GB, Coventry5
+Stake (%)
+39.9
+OIE Aktiengesellschaft, DE, Idar-Oberstein¹
+Oschatz Netz GmbH & Co. KG, DE, Oschatz²
+100.0
+RDE Verwaltungs-GmbH, DE, Veitshöchheim²
+100.0
+OOO E.ON IT, RU, Moscow²
+100.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Veitshöchheim²
+000 E.ON Connecting Energies, RU, Moscow4
+50.0
+OMNI Energy Kft., HU, Kiskunhalas6
+77.4
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding²
+100.0
+50.0
+74.9
+49.0
+100.0
+100.0
+50.0
+Npower Limited, GB, Swindon¹
+100.0
+Netzgesellschaft Ottersweier GmbH & Co. KG, DE, Ottersweier
+49.9
+Npower Northern Limited, GB, Swindon¹
+100.0
+Netzgesellschaft Panketal GmbH, DE, Panketal²
+100.0
+Npower Northern Supply Limited, GB, Swindon²
+100.0
+Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE,
+Rheda-Wiedenbrück
+49.0
+Npower Yorkshire Limited, GB, Swindon¹
+100.0
+Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
+Rheda-Wiedenbrück
+100.0
+Octopus Electrical Limited, GB, Swindon¹
+49.0
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg6
+Netzgesellschaft S-1 GmbH, DE, Helmstedt²
+50.2
+33.9
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee
+ocean5 Business Software GmbH, DE, Kiel6
+Netzgesellschaft Rietberg-Langenberg GmbH & Co. KG, DE,
+Rietberg6
+100.0
+NRF Neue Regionale Fortbildung GmbH, DE, Halle (Saale)2
+49.0
+100.0
+Npower Yorkshire Supply Limited, GB, Swindon¹
+25.1
+Recargo Inc., US, El Segundo¹
+100.0
+Oschatz Netz Verwaltungs GmbH, DE, Oschatz²
+RegioNetz München GmbH & Co. KG, DE, Garching
+50.0
+Ludwigshafen am Rhein5
+26.7
+100.0
+50.0
+Placense Ltd., IL, Caesarea
+20.0
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen6
+33.3
+Plus Shipping Services Limited, GB, Swindon¹
+100.0
+Remoty Visual Ltd, IL, Tel Aviv6
+38.8
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+100.0
+Renergie Stadt Wittlich GmbH, DE, Wittlich6
+100.0
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+35.5
+WASSERVERSORGUNG AG & CO KG, DE, Regensburg5
+100.0
+Powergen Limited, GB, Coventry¹
+PFALZWERKE AKTIENGESELLSCHAFT, DE,
+REWAG REGENSBURGER ENERGIE- UND
+Powergen International Limited, GB, Coventry¹
+100.0
+rEVUlution GmbH, DE, Essen²
+100.0
+Powergen Holdings B.V., NL, Rotterdam¹
+30.0
+100.0
+49.2
+Regionetz GmbH, DE, Aachen 1,9
+50.0
+Redsted Varmetransmission ApS, DK, Frederiksberg²
+49.9
+PannonWatt Energetikai Megoldások Zrt., HU, Győr
+49.0
+Recklinghausen Netz-Verwaltungsgesellschaft mbH, DE,
+Recklinghausen6
+30.0
+100.0
+OurGreenCar Sweden AB, SE, Malmö
+Ostwestfalen Netz GmbH & Co. KG, DE, Bad Driburg
+49.9
+Recklinghausen Netzgesellschaft mbH & Co. KG, DE,
+Recklinghausen5
+50.0
+Oskarshamn Energi AB, SE, Oskarshamn4
+100.0
+25.1
+SEC A Sp. z o.o., PL, Szczecin²
+pear.ai Inc., US, San Francisco
+Refarmed ApS, DK, Copenhagen
+Perstorps Fjärrvärme AB, SE, Perstorp6
+35.5
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG,
+DE, Regensburg
+100.0
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg²
+100.0
+40.0
+50.0
+Peiẞenberger Kraftwerksgesellschaft mit beschränkter Haftung,
+DE, Peißenberg²
+50.0
+REGAS GmbH & Co KG, DE, Regensburg6
+100.0
+PEG Infrastruktur AG, CH, Zug 13
+20.0
+REGAS Verwaltungs-GmbH, DE, Regensburg
+Vandebron B.V., NL, Amsterdam²
+DE, Steinfurt6
+VEBA Electronics LLC, US, Wilmington¹
+Windenergie Schermbeck-Rüste GmbH & Co. KG, DE,
+Schermbeck6
+Zwickauer Energieversorgung GmbH, DE, Zwickau5
+27.0
+20.3
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3Joint operations pursuant to IFRS 11. . 4Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality). 'Investments Pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. Control by virtue of company contract. . 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+227
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+Name, location
+Consolidated investment funds
+ASF, DE, Düsseldorf¹
+HANSEFONDS, DE, Düsseldorf¹
+MI-FONDS 178, DE, Frankfurt am Main¹
+MI-FONDS F55, DE, Frankfurt am Main¹
+MI-FONDS G55, DE, Frankfurt am Main¹
+MI-FONDS J55, DE, Frankfurt am Main¹
+MI-FONDS K55, DE, Frankfurt am Main¹
+OB 2, DE, Düsseldorf¹
+OB 5, DE, Düsseldorf¹
+Stake (%)
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+Zonnig Beheer B.V., NL, Lelystad¹
+49.0
+Osterburg (Altmark)6
+31.5
+WWS Wasserwerk Saarwellingen GmbH, DE, Saarwellingen
+49.0
+Windenergie Frehne GmbH & Co. KG, DE, Lützen
+41.0
+WWW Wasserwerk Wadern GmbH, DE, Wadern
+49.0
+Windenergie Leinetal 2 Verwaltungs GmbH, DE, Freden (Leine)²
+100.0
+xtechholding GmbH, DE, Berlin
+28.4
+Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine)6
+26.2
+100.0
+Zagrebacke otpadne vode d.o.o., HR, Zagreb4
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine)6
+24.9
+Zagrebacke otpadne vode-upravljanje i pogon d.o.o., HR, Zagreb5
+29.0
+Windenergie Merzig GmbH, DE, Merzig
+20.0
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava4
+49.0
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg (Altmark)6
+49.0
+Zenit-SIS GmbH i. L., DE, Düsseldorf²
+100.0
+Windenergie Osterburg Verwaltungs GmbH, DE,
+48.5
+Windenergie Briesensee GmbH, DE, Neu Zauche6
+100.0
+100.0
+84.5
+5.9
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg'
+10.0
+30.1
+0.0
+Stadtwerke Detmold GmbH, DE, Detmold?
+12.5
+31.5
+2.7
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing?
+19.9
+10.8
+0.0
+Stadtwerke Wertheim GmbH, DE, Wertheim'
+10.0
+20.5
+0.0
+SWT Stadtwerke Trier Versorgungs-GmbH, DE, Trier?
+18.7
+55.5
+9.8
+Thermondo GmbH, DE, Berlin'
+19.4
+10.7
+-9.6
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b.. 9Control by virtue of company contract.. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG.. 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+17.8
+PSI Software AG, DE, Berlin'
+414.5
+3,127.4
+Earnings
+Name, location
+Stake (%) € in millionty
+€ in millions
+Investments Pursuant to Section 313 (2) No. 5 HGB
+BEW Bergische Energie- und Wasser-Gesellschaft mit beschränkter Haftung, DE, Wipperfürth'
+Energieversorgung Limburg Gesellschaft mit beschränkter Haftung, DE, Limburg an der Lahn
+e-werk Sachsenwald GmbH, DE, Reinbek?
+19.5
+6.2
+10.0
+28.7
+4.4
+16.0
+29.3
+100.0
+4.4
+19.9
+14.3
+0.0
+HEW HofEnergie+Wasser GmbH, DE, Hof?
+19.9
+22.1
+0.0
+infra fürth gmbh, DE, Fürth'
+19.9
+75.1
+0.0
+Nord Stream AG, CH, Zug 7, 14
+15.5
+Herzo Werke GmbH, DE, Herzogenaurach?
+28.1
+33.2
+100.0
+DE, Kerpen
+25.1
+Windkraft Hochheim GmbH & Co. KG, DE, Lützen²
+90.0
+Wasserverbund Niederrhein Gesellschaft mit beschränkter
+Haftung, DE, Moers6
+Windkraft Jerichow-Mangelsdorf I GmbH & Co. KG, DE, Burg
+25.1
+38.5
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+83.3
+Wasserversorgung Main-Taunus GmbH, DE, Frankfurt am Main
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+49.0
+Windpark Büschdorf GmbH, DE, Perl²
+51.0
+49.0
+Windpark Eschweiler Beteiligungs GmbH, DE, Stolberg6
+55.1
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr GmbH,
+DE, Grafenwöhr6
+29.0
+Wasserzweckverband der Gemeinde Nalbach, DE, Nalbach6
+49.0
+Windpark Losheim-Britten GmbH, DE, Losheim am See
+Windpark Lützen GmbH & Co. KG, DE, Lützen²
+50.0
+100.0
+WB Wärme Berlin GmbH, DE, Schönefeld
+51.0
+Windpark Lützen Infrastruktur GmbH & Co. KG, DE, Lützen²
+80.0
+45.0
+Windenergiepark Heidenrod GmbH, DE, Heidenrod 6
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+Kaiser-Wilhelm-Koog²
+Wasser-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG,
+WWW Wasser- und Energieversorgung Kreis St. Wendel
+Gesellschaft mit beschränkter Haftung, DE, St. Wendel5
+100.0
+Wärmeversorgung Wachau GmbH, DE, Markkleeberg
+Wärmeversorgung Würselen GmbH, DE, Stolberg²
+49.0
+100.0
+VEBACOM Holdings LLC, US, Wilmington²
+100.0
+Veiligebuurt B.V., NL, Enschede
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH,
+DE, Königs Wusterhausen²
+50.1
+49.9
+VEM Neue Energie Muldental GmbH & Co. KG, DE, Markkleeberg6
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Waldbüttelbrunn
+50.0
+100.0
+49.0
+49.0
+50.0
+60.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). .³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments Pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions
+GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2019)
+Name, location
+226
+Stake (%)
+Name, location
+Stake (%)
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Müden/Aller6
+50.0
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE, Goslar
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim6
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+WEA Schönerlinde GbR mbH Kiepsch & Bosse & Beteiligungs-
+ges. e.disnatur mbH, DE, Berlin²
+100.0
+77.8
+45.0
+100.0
+Westerwald-Netz GmbH, DE, Betzdorf-Alsdorf¹
+100.0
+Westnetz GmbH, DE, Dortmund¹
+100.0
+WPF Windpark Frankenheim GmbH & Co. KG, DE, Lützen²
+WPK Windpark Kraasa GmbH & Co. KG, DE, Lützen²
+100.0
+100.0
+WET Windenergie Trampe GmbH & Co. KG, DE, Lützen²
+100.0
+WTTP B.V., NL, Arnhem¹
+100.0
+100.0
+25.1
+25.1
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+50.2
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+50.2
+WGK Windenergie Großkorbetha GmbH & Co. KG, DE, Lützen²
+90.0
+WVG - Warsteiner Verbundgesellschaft mbH, DE, Warstein
+WVL Wasserversorgung Losheim GmbH, DE, Losheim am See6
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach6
+25.1
+49.9
+22.2
+Willems Koeltechniek B.V., NL, Beek²
+Windpark Mutzschen OHG, DE, Potsdam²
+WUN Pellets GmbH, DE, Wunsiedel
+WKH Windkraft Hochheim Management GmbH, DE, Lützen²
+WLN Wasserlabor Niederrhein GmbH, DE, Mönchengladbach6
+WPB Windpark Börnicke GmbH & Co. KG, DE, Lützen²
+WEV Warendorfer Energieversorgung GmbH, DE, Warendorf6
+Werne Netz GmbH & Co. KG, DE, Werne
+Windpark Naundorf OHG, DE, Potsdam²
+70.0
+49.0
+66.7
+WeAre GmbH, DE, Berlin6
+20.0
+Windpark Nohfelden-Eisen GmbH, DE, Nohfelden6
+50.0
+40.0
+Windpark Oberthal GmbH, DE, Oberthal6
+35.0
+Weiẞmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+Windpark Paffendorf GmbH & Co. KG, DE, Bergheim
+49.0
+weeenergie GmbH, DE, Dresden6
+93.5
+werkkraft GmbH, DE, Unterschleißheim6
+100.0
+50.0
+Wendelsteinbahn Verteilnetz GmbH, DE, Brannenburg am Inn¹
+100.0
+100.0
+100.0
+Windpark Verwaltungsgesellschaft mbH, DE, Lützen²
+Windpark Wadern-Felsenberg GmbH, DE, Wadern²
+Wendelsteinbahn Gesellschaft mit beschränkter Haftung, DE,
+Brannenburg am Inn¹
+100.0
+WEK Windenergie Kolkwitz GmbH & Co. KG, DE, Kolkwitz²
+42.0
+Windpark Perl GmbH, DE, Perl6
+Independent Auditor's Report
+231
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Wildberger
+Birnbaum
+König
+سال سایید
+Jm
+Teyssen
+вы
+Report on the Audit of the Consolidated
+Financial Statements and of the Group
+Management Report
+Spieker
+To E.ON SE, Essen
+Independent Auditor's Report
+We have audited the consolidated financial statements of
+E.ON SE, Essen, and its subsidiaries (the Group), which comprise
+the consolidated balance sheet as at December 31, 2019, and
+the consolidated statement of income, consolidated statement
+of recognized income and expenses, consolidated statement
+of changes in equity and consolidated statement of cash flows
+for the financial year from January 1 to December 31, 2019,
+and notes to the consolidated financial statements, including
+a summary of significant accounting policies. In addition, we
+have audited the group management report of E.ON SE, which
+is combined with the Company's management report, for the
+financial year from January 1 to December 31, 2019. In accor-
+dance with the German legal requirements, we have not audited
+the content of the statement on corporate governance pursuant
+to § [Article] 289f HGB [Handelsgesetzbuch: German Commer-
+cial Code] and § 315d HGB.
+The Management Board
+1 Transactions with RWE
+In our view, the matters of most significance in our audit were
+as follows:
+232
+Key audit matters are those matters that, in our professional
+judgment, were of most significance in our audit of the consoli-
+dated financial statements for the financial year from January 1
+to December 31, 2019. These matters were addressed in the
+context of our audit of the consolidated financial statements as
+a whole, and in forming our audit opinion thereon; we do not
+provide a separate audit opinion on these matters.
+Key Audit Matters in the Audit of the
+Consolidated Financial Statements
+We conducted our audit of the consolidated financial state-
+ments and of the group management report in accordance with
+§ 317 HGB and the EU Audit Regulation (No. 537/2014, referred
+to subsequently as "EU Audit Regulation") in compliance with
+German Generally Accepted Standards for Financial Statement
+Audits promulgated by the Institut der Wirtschaftsprüfer [Insti-
+tute of Public Auditors in Germany] (IDW). We performed the
+audit of the consolidated financial statements in supplementary
+compliance with the International Standards on Auditing (ISAs).
+Our responsibilities under those requirements, principles and
+standards are further described in the "Auditor's Responsibilities
+for the Audit of the Consolidated Financial Statements and of
+the Group Management Report" section of our auditor's report.
+We are independent of the group entities in accordance with
+the requirements of European law and German commercial and
+professional law, and we have fulfilled our other German pro-
+fessional responsibilities in accordance with these requirements.
+In addition, in accordance with Article 10 (2) point (f) of the EU
+Audit Regulation, we declare that we have not provided non-audit
+services prohibited under Article 5 (1) of the EU Audit Regulation.
+We believe that the audit evidence we have obtained is sufficient
+and appropriate to provide a basis for our audit opinions on the
+consolidated financial statements and on the group management
+report.
+Basis for the Audit Opinions
+that our audit has not led to any reservations relating to the
+legal compliance of the consolidated financial statements and
+of the group management report.
+Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
+the accompanying group management report as a whole
+provides an appropriate view of the Group's position. In all
+material respects, this group management report is consis-
+tent with the consolidated financial statements, complies
+with German legal requirements and appropriately presents
+the opportunities and risks of future development. Our audit
+opinion on the group management report does not cover the
+content of the statement on corporate governance referred
+to above.
+the accompanying consolidated financial statements comply,
+in all material respects, with the IFRSS as adopted by the EU,
+and the additional requirements of German commercial
+law pursuant to § 315e Abs. [paragraph] 1 HGB and, in com-
+pliance with these requirements, give a true and fair view of
+the assets, liabilities, and financial position of the Group as
+at December 31, 2019, and of its financial performance for
+the financial year from January 1 to December 31, 2019, and
+•
+•
+In our opinion, on the basis of the knowledge obtained in the audit,
+Audit Opinions
+Essen, March 23, 2020
+Firm
+Declaration of the Management Board
+Independent Practitioner's Report on a Limited
+Assurance Engagement on Non-financial
+Reporting
+To E.ON SE, Essen
+We have performed a limited assurance engagement on the
+combined separate non-financial report pursuant to §§ (Arti-
+cles) 289b Abs. (paragraph) 3 and 315b Abs. 3 HGB ("Handels-
+gesetzbuch": "German Commercial Code") of E.ON SE, Essen
+(hereinafter the "Company") for the period from 1st January to
+31st December 2019 (hereinafter the "Non-financial Report").
+Responsibilities of the Executive Directors
+The executive directors of the Company are responsible for
+the preparation of the Non-financial Report in accordance with
+§§ 315c in conjunction with 289c to 289e HGB.
+This responsibility of the Company's executive directors
+includes the selection and application of appropriate methods
+of non-financial reporting as well as making assumptions and
+estimates related to individual non-financial disclosures which
+are reasonable in the circumstances. Furthermore, the executive
+directors are responsible for such internal control as they have
+considered necessary to enable the preparation of a Non-financial
+Report that is free from material misstatement whether due to
+fraud or error.
+238
+Independence and Quality Control of the Audit
+We have complied with the German professional provisions
+regarding independence as well as other ethical requirements.
+Our audit firm applies the national legal requirements and
+professional standards - in particular the Professional Code
+for German Public Auditors and German Chartered Auditors
+("Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
+prüfer": "BS WP/vBP") as well as the Standard on Quality Con-
+trol 1 published by the Institut der Wirtschaftsprüfer (Institute
+of Public Auditors in Germany; IDW): Requirements to quality
+control for audit firms (IDW Qualitätssicherungsstandard 1:
+Anforderungen an die Qualitätssicherung in der Wirtschafts-
+prüferpraxis-IDW QS 1) - and accordingly maintains a compre-
+hensive system of quality control including documented policies
+and procedures regarding compliance with ethical requirements,
+professional standards and applicable legal and regulatory
+requirements.
+Practitioner's Responsibility
+Our responsibility is to express a limited assurance conclusion
+on the Non-financial Report based on the assurance engagement
+we have performed.
+Within the scope of our engagement we did not perform an
+audit on external sources of information or expert opinions,
+referred to in the Non-financial Report.
+We conducted our assurance engagement in accordance with
+the International Standard on Assurance Engagements (ISAE)
+3000 (Revised): Assurance Engagements other than Audits or
+Reviews of Historical Financial Information, issued by the IAASB.
+This Standard requires that we plan and perform the assurance
+engagement to allow us to conclude with limited assurance
+that nothing has come to our attention that causes us to believe
+that the Company's Non-financial Report for the period from
+1st January to 31st December 2019 has not been prepared, in all
+material aspects, in accordance with §§ 315c in conjunction
+with 289c to 289e HGB.
+2 Recoverability of goodwill
+Independent Practitioner's Report
+on Non-financial Reporting
+Aissata Touré
+Wirtschaftsprüferin
+(German Public Auditor)
+Markus Dittmann
+Wirtschaftsprüfer
+(German Public Auditor)
+230
+Declaration of the Management Board
+Information
+Other
+We communicate with those charged with governance regard-
+ing, among other matters, the planned scope and timing of the
+audit and significant audit findings, including any significant
+deficiencies in internal control that we identify during our audit.
+We also provide those charged with governance with a state-
+ment that we have complied with the relevant independence
+requirements, and communicate with them all relationships and
+other matters that may reasonably be thought to bear on our
+independence, and where applicable, the related safeguards.
+From the matters communicated with those charged with
+governance, we determine those matters that were of most sig-
+nificance in the audit of the consolidated financial statements
+of the current period and are therefore the key audit matters.
+We describe these matters in our auditor's report unless law or
+regulation precludes public disclosure about the matter.
+Other Legal and Regulatory Requirements
+Further Information Pursuant to Article 10
+of the EU Audit Regulation
+We were elected as group auditor by the annual general meeting
+on May 14, 2019. We were engaged by the supervisory board on
+June 11, 2019. We have been the group auditor of the E.ON SE,
+Essen, without interruption since the Company first met the
+requirements as a public-interest entity within the meaning of
+§ 319a Abs. 1 Satz 1 HGB in the financial year 1965.
+We declare that the audit opinions expressed in this auditor's
+report are consistent with the additional report to the audit
+committee pursuant to Article 11 of the EU Audit Regulation
+(long-form audit report).
+German Public Auditor Responsible for the
+Engagement
+The German Public Auditor responsible for the engagement is
+Aissata Touré.
+Düsseldorf, March 23, 2020
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+Our presentation of these key audit matters has been structured
+in each case as follows:
+cash-generating unit serves as the basis of valuation in the
+context of an impairment test. The cash flows are based on
+the E.ON Group's medium-term planning for the years 2020
+to 2022. For the purposes of assessing the recoverability of
+goodwill, the three-year detailed planning period is generally
+extended by another two years - or more, if required – and
+is then extrapolated on the basis of assumptions about long-
+term growth rates in perpetual annuity. The discount rate
+used is the weighted average cost of capital for the relevant
+cash-generating unit in each case. The result of this measure-
+ment depends to a large extent on the executive directors'
+estimates of the amount of future cash flows, the discount
+rate applied and the growth rate. The assumptions about the
+long-term development of the underlying contributions to
+earnings and the relevant regulatory influencing factors are
+also of particular importance. Due to the complexity of the
+measurement and the considerable uncertainties relating to
+the underlying assumptions, this matter was of particular
+significance in the context of our audit.
+② Audit approach and findings
+Independent Auditor's Report
+The supervisory board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consolidated
+financial statements and of the group management report.
+Furthermore, the executive directors are responsible for the
+preparation of the group management report that, as a whole,
+provides an appropriate view of the Group's position and is, in
+all material respects, consistent with the consolidated financial
+statements, complies with German legal requirements, and
+appropriately presents the opportunities and risks of future
+development. In addition, the executive directors are responsible
+for such arrangements and measures (systems) as they have
+considered necessary to enable the preparation of a group
+management report that is in accordance with the applicable
+German legal requirements, and to be able to provide sufficient
+appropriate evidence for the assertions in the group manage-
+ment report.
+In preparing the consolidated financial statements, the executive
+directors are responsible for assessing the Group's ability to
+continue as a going concern. They also have the responsibility
+for disclosing, as applicable, matters related to going concern.
+In addition, they are responsible for financial reporting based on
+the going concern basis of accounting unless there is an inten-
+tion to liquidate the Group or to cease operations, or there is no
+realistic alternative but to do so.
+The executive directors are responsible for the preparation of
+the consolidated financial statements that comply, in all material
+respects, with IFRSS as adopted by the EU and the additional
+requirements of German commercial law pursuant to § 315e
+Abs. 1 HGB and that the consolidated financial statements, in
+compliance with these requirements, give a true and fair view
+of the assets, liabilities, financial position, and financial perfor-
+mance of the Group. In addition the executive directors are
+responsible for such internal control as they have determined
+necessary to enable the preparation of consolidated financial
+statements that are free from material misstatement, whether
+due to fraud or error.
+Responsibilities of the Executive Directors and the Supervisory
+Board for the Consolidated Financial Statements and the Group
+Management Report
+236
+If, based on the work we have performed, we conclude that
+there is a material misstatement of this other information,
+we are required to report that fact. We have nothing to report
+in this regard.
+is materially inconsistent with the consolidated financial
+statements, with the group management report or our
+knowledge obtained in the audit, or
+•
+In connection with our audit, our responsibility is to read the
+other information and, in so doing, to consider whether the
+other information
+Our audit opinions on the consolidated financial statements and
+on the group management report do not cover the other infor-
+mation, and consequently we do not express an audit opinion
+or any other form of assurance conclusion thereon.
+The other information comprises further the remaining parts
+of the annual report - excluding cross-references to external
+information - with the exception of the audited consolidated
+financial statements, the audited group management report
+and our auditor's report, and the separate non-financial report
+pursuant to § 289b Abs. 3 HGB and § 315b Abs. 3 HGB.
+The executive directors are responsible for the other information.
+The other information comprises the statement on corporate
+governance pursuant to § 289f HGB and § 315d HGB.
+otherwise appears to be materially misstated.
+Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements and of the Group Management Report
+Our objectives are to obtain reasonable assurance about
+whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error,
+and whether the group management report as a whole provides
+an appropriate view of the Group's position and, in all material
+respects, is consistent with the consolidated financial state-
+ments and the knowledge obtained in the audit, complies with
+the German legal requirements and appropriately presents the
+opportunities and risks of future development, as well as to
+issue an auditor's report that includes our audit opinions on the
+consolidated financial statements and on the group manage-
+ment report.
+Reasonable assurance is a high level of assurance, but is not a
+guarantee that an audit conducted in accordance with § 317 HGB
+and the EU Audit Regulation and in compliance with German
+Generally Accepted Standards for Financial Statement Audits
+promulgated by the Institut der Wirtschaftsprüfer (IDW) and
+supplementary compliance with the ISAs will always detect a
+material misstatement. Misstatements can arise from fraud or
+error and are considered material if, individually or in the aggre-
+gate, they could reasonably be expected to influence the eco-
+nomic decisions of users taken on the basis of these consolidated
+financial statements and this group management report.
+We exercise professional judgment and maintain professional
+skepticism throughout the audit. We also:
+Evaluate the consistency of the group management report
+with the consolidated financial statements, its conformity with
+German law, and the view of the Group's position it provides.
+Obtain sufficient appropriate audit evidence regarding the
+financial information of the entities or business activities
+within the Group to express audit opinions on the consolidated
+financial statements and on the group management report.
+We are responsible for the direction, supervision and perfor-
+mance of the group audit. We remain solely responsible for
+our audit opinions.
+•
+•
+237
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+Evaluate the overall presentation, structure and content of
+the consolidated financial statements, including the disclo-
+sures, and whether the consolidated financial statements
+present the underlying transactions and events in a manner
+that the consolidated financial statements give a true and
+fair view of the assets, liabilities, financial position and finan-
+cial performance of the Group in compliance with IFRSS as
+adopted by the EU and the additional requirements of German
+commercial law pursuant to § 315e Abs. 1 HGB.
+Conclude on the appropriateness of the executive directors'
+use of the going concern basis of accounting and, based on
+the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast signifi-
+cant doubt on the Group's ability to continue as a going con-
+cern. If we conclude that a material uncertainty exists, we
+are required to draw attention in the auditor's report to the
+related disclosures in the consolidated financial statements
+and in the group management report or, if such disclosures
+are inadequate, to modify our respective audit opinions. Our
+conclusions are based on the audit evidence obtained up
+to the date of our auditor's report. However, future events
+or conditions may cause the Group to cease to be able to
+continue as a going concern.
+Evaluate the appropriateness of accounting policies used by
+the executive directors and the reasonableness of estimates
+made by the executive directors and related disclosures.
+Obtain an understanding of internal control relevant to the
+audit of the consolidated financial statements and of
+arrangements and measures (systems) relevant to the audit
+of the group management report in order to design audit
+procedures that are appropriate in the circumstances, but
+not for the purpose of expressing an audit opinion on the
+effectiveness of these systems.
+•
+•
+•
+Identify and assess the risks of material misstatement of the
+consolidated financial statements and of the group manage-
+ment report, whether due to fraud or error, design and per-
+form audit procedures responsive to those risks, and obtain
+audit evidence that is sufficient and appropriate to provide a
+basis for our audit opinions. The risk of not detecting a material
+misstatement resulting from fraud is higher than for one
+resulting from error, as fraud may involve collusion, forgery,
+intentional omissions, misrepresentations, or the override of
+internal control.
+Other Information
+1 Matter and issue
+③The Company's disclosures relating to the recoverability
+of goodwill and the preliminary goodwill, respectively, are
+contained in note 14 and 1 to the consolidated financial
+statements.
+corporate overheads were properly ascertained, allocated, and
+included in the impairment tests of the respective cash-
+generating units. Finally, we assessed the calculation of the
+carrying amounts of the cash-generating units, which were
+compared against the corresponding recoverable amount,
+as well as the mathematical comparison.
+②As part of our audit, we initially assessed the preconditions
+233
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Due to the highly complex nature of the transaction as a
+whole, the associated complex calculation of the consideration
+transferred, the estimation uncertainties and the scope of
+discretion in measuring the assets acquired and liabilities
+assumed, as well as the overall material effect of the amounts
+involved in the acquisition on the assets, liabilities, financial
+position and financial performance, the first-time consoli-
+dation of innogy was of particular significance in the context
+of our audit.
+for E.ON obtaining control. The focus was on determining
+which assets and liabilities E.ON had obtained control of. We
+also verified the acquisition date. To that end, we inspected
+and assessed in particular the contractual agreements and
+other relevant documents. On that basis, we reconciled the
+components of the consideration transferred and their amounts
+with the underlying agreements and articles of association,
+the contractually agreed purchase prices and purchase price
+adjustments, and the payments made. Furthermore, we
+assessed the recognition and measurement of the assets
+and liabilities underlying the acquisition. This included their
+identification, the application of consistent accounting and
+measurement policies, and their fair value accounting as of
+the date of first-time consolidation. In this context, one focal
+point for our audit was to address the external reports for the
+purchase price allocation. As well as assessing the external
+appraiser's professional qualifications, we also assessed
+the appropriateness of, among other things, the models on
+which the valuations were based and the valuation inputs
+and assumptions used. Given the special characteristics
+relating to the calculation of the fair values in the context of
+the business combination, our valuation specialists assisted
+in the process. Furthermore, we verified how the first-time
+consolidation was performed from a technical perspective
+and assessed the calculation of the preliminary goodwill. We
+also assessed as of the reporting date December 31, 2019
+whether there were indications of impairment in accordance
+with IAS 36 as the starting point for an impairment test.
+Another focal point of our audit was to assess the disclosures
+in the notes required under IFRS 3 and the presentation as
+part of segment reporting. Overall, we were able to satisfy
+ourselves that the acquisition was appropriately presented in
+the financial statements, that the estimates and assumptions,
+also with regard to the preliminary goodwill, made by the
+executive directors are substantiated and sufficiently docu-
+mented, and that the corresponding disclosures in the notes
+are appropriate.
+From September 18, 2019 onwards, the innogy companies
+have been managed as a new independent segment within
+the E.ON Group and are presented as such in the segment
+reporting.
+① Effective as of September 18, 2019, E.ON obtained control
+within the meaning of IFRS 10 of innogy's network and sales
+businesses. By contrast, due to contractual arrangements
+E.ON did not obtain control of innogy's renewables and gas
+storage businesses or its equity interests in Kelag. The acqui-
+sition is accounted for as a business combination using the
+acquisition method in accordance with IFRS 3. The identifi-
+able assets acquired and the liabilities assumed of innogy
+were recognized at their acquisition-date fair value. Taking
+into account the consideration transferred (including the
+cash payment), the other shares previously acquired on the
+capital market and the non-controlling interests, the pre-
+liminary goodwill amounted to EUR 15.5 billion.
+a. First-time consolidation of innogy's network and sales
+businesses
+On March 12, 2018, E.ON and RWE entered into agreements
+for E.ON to acquire RWE's 76.8 % interest in innogy SE, Essen
+(innogy) and to sell substantially all of its former renewables
+business and two nuclear power minority stocks to RWE. The
+agreements also stipulate that innogy's entire renewables and
+gas storage business as well as its equity interest in KELAG-
+Kärntner Elektrizitäts-Aktiengesellschaft (Kelag) will be trans-
+ferred to RWE. As part of RWE's claim against E.ON arising
+from the acquisition of the interest in innogy, RWE received
+440,219,800 new shares of E.ON SE, corresponding to a 16.67%
+interest in the share capital of E.ON. Finally, E.ON was entitled
+to a cash payment of EUR 1.5 billion for all transactions, which
+is subject to contractually agreed purchase price adjustments.
+The acquisition of RWE's 76.8% interest in innogy SE was closed
+on September 18, 2019 following clearance from the European
+Commission and the relevant antitrust authorities. By acquiring
+the interest in innogy from RWE, E.ON also acquired shares that
+had already been tendered as part of the voluntary public take-
+over offer in 2018, amounting to 9.4%. Taking into consideration
+the further 3.8% interest that E.ON had already acquired on the
+capital market, E.ON held 90 % of all innogy shares as at the
+date of the innogy acquisition.
+① Transactions with RWE
+Hereinafter we present the key audit matters:
+③ Reference to further information
+The clearance of the European Commission was linked to
+conditions, including in particular to dispose of certain E.ON
+and innogy sales businesses in Germany, Hungary and the
+Czech Republic. Based on the assessment by the Company's
+executive directors that the disposal of these business activities
+is highly probable, since the date of the innogy acquisition
+they have been recognized as disposal group and assets held
+for sale, respectively.
+With respect to the business activities in Germany, Hungary
+and the Czech Republic recognized under IFRS 5, we assessed
+whether the classification as disposal group and assets held
+for sale, respectively, as at the date of the reclassification and
+as at December 31, 2019 was appropriate and whether the
+presentation in the balance sheet complies with the relevant
+standards and generally accepted professional interpretations.
+For this purpose, we first of all obtained an understanding of
+the underlying contractual agreements and the respective con-
+ditions imposed by the European Commission, and assessed
+their impact on the presentation of the relevant business
+activities and the accounting treatment. Overall, we were able
+to satisfy ourselves that the business activities classified as
+held for sale are appropriately presented.
+③The Company's disclosures relating to the first-time consoli-
+dation are contained in notes 1, 4 and 34 to the consolidated
+financial statements.
+b. Disposal of the renewables business and nuclear power
+equity interests
+235
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+②As part of our audit, we assessed, among other things,
+whether the measurement model for performing impairment
+tests properly reflects the conceptual requirements of the
+relevant standards and whether the calculations in the models
+were correctly performed. The critical assessment of the key
+assumptions underlying the measurements was the focal
+point of our audit. We evaluated the appropriateness of the
+future cash flows used for the measurement by reconciling
+this data against general and sector-specific market expecta-
+tions and by comparing it with the current budgets in the
+Group investment, finance and HR plan for 2020 prepared by
+the executive directors and approved by the supervisory
+board on December 17, 2019, as well as the planning for the
+years 2021 and 2022 prepared by the executive directors
+and acknowledged by the supervisory board. Among other
+things, we assessed how the long-term growth rates used for
+perpetual annuities were derived from the observable market
+data and market expectations, and reconciled this with the
+cost of capital applied. We also assessed the parameters used
+to determine the discount rate applied, and evaluated the
+measurement model. In addition, we compared the assump-
+tions about the long-term price development and the relevant
+regulatory influencing factors against sector-specific expec-
+tations. Within the context of our assessment of the recover-
+ability of goodwill, we also evaluated whether the costs for
+-
+It was also not necessary to recognize impairment losses
+on existing goodwill in financial year 2019. The Company
+allocates goodwill to cash-generating units or groups of
+cash-generating units that correspond to the E.ON Group's
+operating segments. These are subject to impairment tests
+on a regular basis in the fourth quarter of a given financial
+year or whenever there are indications of impairment. The
+carrying amount of the relevant cash-generating units, includ-
+ing goodwill, is compared with the corresponding recoverable
+amount in the context of the regular impairment test. The
+present value of the future cash flows from the respective
+1 In the consolidated financial statements of E.ON SE as of
+December 31, 2019, an amount of EUR 17.5 billion is reported
+under the "Goodwill" balance sheet item. This amount com-
+prises of preliminary goodwill from the first-time consolida-
+tion of innogy that has not yet been allocated in the amount
+of EUR 15.5 billion as well as existing goodwill in the total
+amount of EUR 2.0 billion. The preliminary goodwill from the
+first-time consolidation of innogy not yet allocated was not
+part of the regular impairment test. Nor was it subject to an
+ad hoc impairment test, since as of December 31, 2019 there
+were no indications of impairment in accordance with IAS 36.
+2 Recoverability of goodwill
+③The Company's disclosures relating to the disposal of the
+renewables business and the nuclear power equity interests
+are contained in notes 4 and 34 to the consolidated financial
+statements.
+2 As part of our audit, we inspected, verified and assessed the
+contractual agreements on disposal of the renewables busi-
+ness and the nuclear power equity interests. We verified
+whether the disposal was properly presented from a technical
+standpoint, whether the assets and liabilities subject to dis-
+posal were fully and correctly derecognized, and whether the
+net gain on disposal was appropriately calculated and recorded.
+We reconciled the calculation of the purchase price with
+the contractual agreements. Overall, we were able to satisfy
+ourselves that the disposals were appropriately presented
+in the financial statements and that the corresponding dis-
+closures in the notes are appropriate.
+Due to the highly complex nature of the transaction as a
+whole and the overall material effect of the amounts involved
+on the assets, liabilities, financial position and financial per-
+formance of the E.ON Group, the deconsolidation of the
+renewables business and the disposal of the nuclear power
+equity interests were of particular significance in the context
+of our audit.
+234
+Independent Auditor's Report
+①Based on the assessment of the Company's executive directors
+that the overall transaction is highly probable to close, the
+renewables business subject to transfer was recognized as a
+discontinued operation and the nuclear power equity inter-
+ests were reclassified as a disposal group effective June 30,
+2018, in accordance with IFRS 5. Since E.ON managed the
+renewables business until the disposal took effect, however,
+the activities continued to be fully included in the relevant key
+performance indicators and the segment reporting. Due to
+the contractual agreements with RWE, E.ON lost control of
+substantially all of the renewables business on September 18,
+2019. Taking into consideration the reclassification to profit
+or loss of currency translation gains that had previously been
+recognized directly in equity, the deconsolidation resulted in
+a total gain of EUR 0.8 billion, which was recognized under
+discontinued operations together with the current profit or loss
+from the business. The transferred business activities were
+included in segment reporting and the Group's management
+key performance indicators until September 18, 2019. The
+disposal of the nuclear power equity interests resulted in a
+EUR 0.1 billion loss.
+Overall, we consider the measurement inputs and assump-
+tions used by the executive directors to be in line with our
+expectations. We were able to verify the inclusion in the
+measurement models.
+•
+Perform audit procedures on the prospective information
+presented by the executive directors in the group manage-
+ment report. On the basis of sufficient appropriate audit evi-
+dence we evaluate, in particular, the significant assumptions
+used by the executive directors as a basis for the prospective
+information, and evaluate the proper derivation of the pro-
+spective information from these assumptions. We do not
+express a separate audit opinion on the prospective infor-
+mation and on the assumptions used as a basis. There is
+a substantial unavoidable risk that future events will differ
+materially from the prospective information.
+Quarterly Statement: January - March 2021
+Half-Year Financial Report: January - June 2020
+Quarterly Statement: January – September 2020
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+239
+In a limited assurance engagement the assurance procedures
+are less in extent than for a reasonable assurance engagement,
+and therefore a substantially lower level of assurance is obtained.
+The assurance procedures selected depend on the practitioner's
+judgment.
+Within the scope of our assurance engagement, we performed
+amongst others the following assurance procedures and further
+activities:
+•
+•
+Obtaining an understanding of the structure of the sustain-
+ability organization and of the stakeholder engagement
+2020 Annual Shareholders Meeting
+Inquiries of personnel involved in the preparation of the
+Non-financial Report regarding the preparation process, the
+internal control system relating to this process and selected
+disclosures in the Non-financial Report
+Assurance Conclusion
+Based on the assurance procedures performed and assurance
+evidence obtained, nothing has come to our attention that
+causes us to believe that the Company's Non-financial Report
+for the period from 1st January to 31st December 2019 has
+not been prepared, in all material aspects, in accordance with
+§§ 315c in conjunction with 289c to 289e HGB.
+Intended Use of the Assurance Report
+We issue this report on the basis of the engagement agreed with
+the Company. The assurance engagement has been performed
+for purposes of the Company and the report is solely intended
+to inform the Company about the results of the limited assurance
+engagement. The report is not intended for any third parties to
+base any (financial) decision thereon. Our responsibility lies only
+with the Company. We do not assume any responsibility
+towards third parties.
+•
+Analytical evaluation of selected disclosures in the Non-
+financial Report
+Essen, March 23, 2020
+⋅
+Survey regarding decentral data gathering and approval of
+information on GHG emissions FY19
+• Comparison of selected disclosures with corresponding data
+in the consolidated financial statements and in the group
+management report
+Evaluation of the presentation of the non-financial information
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+Identification of the likely risks of material misstatement of
+the Non-financial Report
+Markus Dittmann
+Wirtschaftsprüfer
+Quarterly Statement: January - March 2020
+June 2020
+August 12, 2020
+Journalists
+T +49 201-184-4236
+eon.com/en/about-us/media.html
+Analysts, shareholders and bond investors
+T +49 201-184-2806
+investorrelations@eon.com
+Only the German version of this Annual Report is legally binding.
+Production & Typesetting
+Jung Produktion, Düsseldorf
+Printing
+G. Peschke Druckerei, Parsdorf
+November 11, 2020
+Climate neutral
+ClimatePartner.com/53152-1912-1006
+FSC
+www.fsc.org
+MIX
+Paper from
+responsible sources
+FSC® C002390
+This Annual Report was printed on paper produced from fiber that comes from
+a responsibly managed forest certified by the Forest Stewardship CouncilⓇ and
+other controlled sources.
+244
+Financial Calendar
+May 12, 2020
+Print product
+(German public auditor)
+Hendrik Fink
+Wirtschaftsprüfer
+(German public auditor)
+Deputy Chairman of the E.ON Group Works Council
+Chairman of the Joint Works Council, Westnetz GmbH
+Chairman of the Works Council of the Münster Region of
+Westnetz GmbH
+→ innogy SE
+→ innogy Westenergie GmbH
+Szilvia Pinczésné Márton
+Chairperson of the Works Council, E.ON Dél-dunántúli
+Áramhálózati Zrt.
+Member of the European Works Council, E.ON SE
+René Pöhls (since September 24, 2019)
+Deputy Chairman of the SE Works Council, E.ON SE
+Chairman of the SE Works Council, innogy SE
+Deputy Chairman of the Group Works Council, E.ON SE
+Chairman of the Group Works Council, envia Mitteldeutsche
+Energie AG
+Chairman of the Joint General Works Council and the Joint
+Works Council Halle/Kabelsketal, envia Mitteldeutsche
+Energie AG, MITGAS Mitteldeutsche Gasversorgung GmbH,
+Mitteldeutsche Netzgesellschaft Strom mbH,
+and Mitteldeutsche Netzgesellschaft Gas mbH
+→ innogy SE
+Stefan May (since September 24, 2019)
+→ envia Mitteldeutsche Energie AG
+Attorney and bank manager
+→ HSBC Trinkaus & Burkhardt AG (Chairman)
+→ Scheidt & Bachmann GmbH (Chairman)
+→ Andersch AG (Chairman, until July 31, 2019)
+Dr. Rolf Martin Schmitz (since October 1, 2019)
+CEO, RWE AG
+→ Amprion GmbH
+→ RWE Generation SE (Chairman)¹
+→ RWE Power AG (Chairman)¹
+→ RWE Supply & Trading GmbH¹
+→ TÜV Rheinland AG
+→ Jaeger Grund GmbH & Co. KG (Jaeger Gruppe, Chairman)
+Andreas Schmitz
+Chairman of Gas România (Romanian Federation of Gas Unions)
+Chairman of Romanian employee representatives
+Member of the SE Works Council, E.ON SE
+Eugen-Gheorghe Luha
+Deputy Chairperson of the General Works Council, innogy SE
+→ innogy SE
+Boards
+240
+Boards
+Supervisory Board (and Information on Other Directorships)
+Dr. Karl-Ludwig Kley
+Chairman of the Supervisory Board, E.ON SE
+→ Bayerische Motoren Werke AG
+→ Deutsche Lufthansa AG (Chairman)
+Erich Clementi
+Deputy Chairman of the Supervisory Board, E.ON SE
+Andreas Scheidt
+Deputy Chairman of the Supervisory Board, E.ON SE
+Unified Service Sector Union, ver.di
+Clive Broutta
+Full-time Representative of the General, Municipal,
+Boilermakers, and Allied Trade Union (GMB)
+Klaus Fröhlich
+Member of the Board of Management,
+Bayerische Motoren Werke AG
+Ulrich Grillo (since October 1, 2019)
+Chairman of the Board of Management, Grillo-Werke AG
+→ Rheinmetall AG (Chairman)
+→ innogy SE (until October 4, 2019)
+→ Grillo Zinkoxid GmbH²
+→ Zinacor S.A.2
+Carolina Dybeck Happe
+Chief Financial Officer, A.P. Møller-Mærsk A/S
+(since January 1, 2019)
+→ Schneider Electric SE (since April 25, 2019)
+Monika Krebber (since September 24, 2019)
+eon.com
+info@eon.com
+T +49 201-184-00
+Germany
+11,581
+18,075
+113,693
+63,699
+55,950
+54,324
+98,566
+Other liabilities and other
+Total assets and liabilities
+Cash flow, investments and financial ratios
+Cash provided by operating activities of continuing operations4
+Cash-effective investments
+8,904
+4,191
+-2,952
+2,853
+2,965
+3,227
+3,169
+3,308
+3,523
+5,492
+Equity ratio (%)
+17
+2
+2,961
+7,325
+26,376
+3,923
+8,323
+28,025
+Other liabilities and other
+15,563
+9,234
+7,275
+6,516
+10,770
+Current liabilities
+Provisions
+Financial liabilities
+33,444
+23,125
+14,044
+15,261
+26,017
+4,280
+12,008
+2,041
+2,117
+4,019
+2,788
+3,792
+3,099
+1,563
+12
+→ Kärntner Energieholding Beteiligungs GmbH
+16
+Economic net debt (at year-end)
+1,199
+Moody's
+Baal
+Baa1
+Baa2
+Baa2
+Baa2
+Standard & Poor's
+BBB+
+BBB+
+BBB
+932
+BBB
+Employees
+Employees at year-end
+43,162
+43,138
+42,699
+43,302
+78,948
+¹Adjusted for discontinued operations and for the application of IFRS 10 and 11 and IAS 32. . ²Line items from the Consolidated Statements of Income for 2016 were adjusted to exclude Uniper;
+they include Uniper prior to 2016. Line items from the Consolidated Balance Sheets for 2016 were adjusted to exclude Uniper; they include Uniper prior to 2016. - 3Adjusted for non-operating effects.
+4The Renewables segment is included fully from January 1, 2018, to September 18, 2019. . 5For the respective financial year; the 2019 figure is management's proposed dividend.
+Contact
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+BBB
+650
+410
+976
+27,714
+26,320
+19,248
+16,580
+39,430
+Cash provided by operating activities of continuing operations
+as a percentage of sales
+9.8
+7.8
+9.5
+7.1
+Stock and E.ON SE long-term ratings
+Earnings per share attributable to shareholders of E.ON SE (€)
+-3.6
+-4.33
+1.84
+1.49
+0.68
+Dividend per share5 (€)
+0.50
+0.21
+0.30
+0.43
+0.46
+Dividend payout
+13
+→ KELAG-Kärntner Elektrizitäts-AG
+Unless otherwise indicated, information is as of December 31, 2019, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+-8,450
+3,925
+3,223
+1,566
+Adjusted net income³
+1,076
+904
+1,427
+1,505
+1,536
+Value measures
+-6,999
+ROCE (%)
+Non-current assets
+Current assets
+10.9
+10.4
+10.6
+10.4
+8.4
+73,612
+46,296
+40,164
+30,883
+Asset and capital structure
+Net income/Net loss attributable to shareholders of E.ON SE
+1,808
+3,524
+2018
+2019
+Sales and earnings
+Sales
+42,656
+38,173
+37,965
+30,084
+41,484
+Adjusted EBITDA³
+5,844
+4,939
+4,955
+4,840
+5,558
+Adjusted EBIT³
+3,563
+3,112
+3,074
+2,989
+3,254
+Net income/Net loss
+-6,377
+-16,007
+4,180
+76,444
+2017
+40,081
+15,786
+35,198
+30,545
+59,464
+Provisions
+30,655
+19,618
+18,001
+May 19, 2021
+August 11, 2021
+15,706
+20,669
+Financial liabilities
+39,287
+14,954
+info@eon.com
+T +49 201-184-00
+Germany
+45131 Essen
+Brüsseler Platz 1
+E.ON SE
+This Annual Report contains certain forward-looking statements based on E.ON management's current assumptions and
+forecasts and other currently available information. Various known and unknown risks, uncertainties, and other factors
+could lead to material differences between E.ON's actual future results, financial situation, development, or performance
+and the estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to
+conform them to future events or developments.
+This Annual Report was published on March 25, 2020.
+Half-Year Financial Report: January - June 2021
+Quarterly Statement: January – September 2021
+November 10, 2021
+2021 Annual Shareholders Meeting
+eon.com
+61,172
+Non-current liabilities
+March 24, 2021
+May 11, 2021
+23,441
+22,122
+Total assets
+113,693
+63,699
+55,950
+54,324
+98,566
+Equity
+19,077
+1,287
+6,708
+8,518
+13,085
+Capital stock
+2,001
+2,001
+2,201
+2,201
+2,641
+Minority interests without controlling influence
+2,648
+2,342
+2,701
+2,760
+17,403
+Release of the 2020 Annual Report
+2016
+€ in millions
+→ Versorgungskasse Energie VVaG i. L.
+Supervisory Board Committees
+Executive Committee
+Dr. Karl-Ludwig Kley, Chairman
+Andreas Scheidt, Deputy Chairman
+Erich Clementi
+Ulrich Grillo (since October 2, 2019)
+Andreas Schmitz (from March 12 to October 2, 2019)
+Fred Schulz
+Albert Zettl (since March 12, 2019)
+Audit and Risk Committee
+Andreas Schmitz, Chairman
+Fred Schulz, Deputy Chairman
+Caroline Dybeck Happe
+René Pöhls (since October 2, 2019)
+Elisabeth Wallbaum
+→ Bayernwerk AG
+Deborah Wilkens (since October 2, 2019)
+(until October 2, 2019: Investment and Innovation Committee)
+Dr. Karen de Segundo, Chairperson
+Albert Zettl, Deputy Chairman (until October 2, 2019)
+Stefan May (since October 2, 2019; Deputy Chairman since
+December 17, 2019)
+Clive Broutta
+Klaus Fröhlich
+Eugen-Gheorghe Luha
+Ewald Woste
+Nomination Committee
+Dr. Karl-Ludwig Kley, Chairman
+Erich Clementi, Deputy Chairman
+Dr. Karen de Segundo
+Innovation and Sustainability Committee
+Chairman of the Division Works Council, Bayernwerk AG
+Chairman of the Eastern Bavaria Works Council,
+Bayernwerk Netz GmbH
+Deputy Chairman of the SE Works Council, E.ON SE
+Chairman of the E.ON Group Works Council
+Albert Zettl
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+¹Exempted E.ON Group directorship within the meaning of Section 100, Paragraph 2, Sentence 2 of the German Stock Corporation Act.
+2Other E.ON Group directorship.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+241
+Fred Schulz
+Chairman of the SE Works Council, E.ON SE
+Deputy Chairman of the E.ON Group Works Council
+Chairman of the Combined Works Council, E.DIS AG
+Chairman of the Works Council, E.DIS Netz GmbH-East Region
+→ E.DIS AG
+→ Szczecińska Energetyka Cieplna Sp. z o.o.
+Dr. Karen de Segundo
+Attorney
+Elisabeth Wallbaum
+Expert, SE Works Council E.ON SE and
+E.ON Group Works Council
+Deborah Wilkens (since October 1, 2019)
+Management consultant
+→ innogy SE (until October 4, 2019)
+Ewald Woste
+Management consultant
+→ GASAG AG
+→ Bayernwerk AG
+→ GreenCom Networks AG
+→ Deutsche Energie-Agentur GmbH (dena)
+→ Energie Steiermark AG
+Unless otherwise indicated, information is as of December 31, 2019, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+2015
+→ Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+¹Exempted E.ON Group directorship within the meaning of Section 100, Paragraph 2, Sentence 2 of the German Stock Corporation Act.
+2Other E.ON Group directorship.
+Member of the Management Board since 2017
+Finance, Mergers & Acquisitions and Participation Management,
+Risk Management, Accounting & Controlling, Investor Relations,
+Tax, S4 Transformation
+→ innogy SE¹ (since October 5, 2019)
+→ E.ON Verwaltungs SE¹ (Chairman)
+→ Nord Stream AG
+Dr. Karsten Wildberger
+Born in 1969 in Gießen, Germany
+Member of the Management Board since 2016
+Retail and Customer Solutions (including Turkey),
+Decentralized Generation, Energy Management,
+Marketing, Digital Transformation & IT
+→ E.ON Digital Technology GmbH
+(formerly E.ON Business Services GmbH)¹ (Chairman)
+Born in 1975 in Essen, Germany
+→ E.ON Sverige AB²
+Unless otherwise indicated, information is as of December 31, 2019, or as of the date on which membership in the E.ON Management Board ended.
+→ Directorships/supervisory board memberships within the meaning of Section 100, Paragraph 2 of the German Stock Corporation Act.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+¹Exempted E.ON Group directorship within the meaning of Section 100, Paragraph 2, Sentence 2 of the German Stock Corporation Act.
+2Other E.ON Group directorship.
+Summary of Financial Highlights
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+243
+Summary of Financial Highlights 1,2
+→ E.ON Energie A.S.² (Chairman)
+Dr. Marc Spieker
+→ E.ON Distribuce, a.s.2 (Chairman)
+→ E.ON Česká republika s.r.o.2 (Chairman)
+Boards
+242
+Management Board (and Information on Other Directorships)
+Dr. Johannes Teyssen
+Born in 1959 in Hildesheim, Germany
+Chairman of the Management Board since 2010
+Member of the Management Board since 2004
+Strategy & Innovation, Human Resources, Communications &
+Political Affairs, Legal & Compliance, Corporate Audit, Health/
+Safety and Environment, Sustainability
+→ innogy SE¹ (Chairman, since October 5, 2019)
+→ Nord Stream AG
+Dr.-Ing. Leonhard Birnbaum
+Born in 1967 in Ludwigshafen, Germany
+Member of the Management Board of E.ON SE since 2013
+Member of the Management Board of innogy SE
+since October 11, 2019 (Chairman)
+innogy integration project, Consulting, PreussenElektra
+→ E.ON Italia S.p.A.2
+→ Georgsmarienhütte Holding GmbH
+Dr. Thomas König
+Born in 1965 in Finnentrop, Germany
+Member of the Management Board since 2018
+Energy Networks (including Turkey), Procurement
+→ Avacon AG¹ (Chairman)
+→ Bayernwerk AG¹ (Chairman)
+→ E.DIS AG¹ (Chairman)
+→HanseWerk AG¹ (Chairman)
+→ E.ON Sverige AB² (Chairman)
+→ E.ON Hungária Zrt.2 (Chairman)
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+4,008
+10,435
+9,922
+19
+Income/Loss from continuing operations before financial results and income taxes
+669
+554
+215
+32
+Financial results
+46
+53
+-152
+-306
+Income taxes
+3,238
+744
+253
+189
+Income/Loss from continuing operations
+-286
+-1,064
+-116
+26
+Income/Loss from discontinued operations, net
+301
+242
+66
+37
+Attributable to non-controlling interests
+3,223
+-85
+1,566
+316
+3,953
+295
+633
+Effects from derivative financial instruments
+64
+819
+12
+640
+Restructuring expenses
+-857
+-366
+2
+-398
+Net book gains (-)/losses (+)
+1,351
+-1,521
+110
+1,115
+Non-operating adjustments
+3,997
+1,409
+292
+-88
+EBIT
+44
+58
+-24
+-3
+Income/Loss from equity investments
+1,526
+303
+126
+Attributable to shareholders of E.ON SE
+3,235
++61
+637
+1,027
+-4
+382
+366
+-41
+68
+40
++10
+2,607
+2,869
+2,989
++73
+987
+-18
+7
+-21
+-1
+-153
+-107
+-73
+-33
+521
+347
+-92
+238
+569
++8
+E.ON generates a large portion of its adjusted EBIT in very stable
+businesses. Regulated, quasi-regulated, and long-term con-
+tracted businesses accounted for the overwhelming proportion
+of our adjusted EBIT in 2019.
+Our regulated business consists of operations in which revenues
+are largely set by law and based on costs. The earnings on these
+revenues are therefore extremely stable and predictable.
+3,524
+1,808
+369
+163
+2018
+2019
+2018
+2019
+Net income/loss
+€ in millions
+Full year
+Fourth quarter
+Net Income/Loss
+A non-operating effect of -€707 million resulted from derivative
+financial instruments in the 2019 financial year (prior year:
++€610 million). Negative items in 2019 resulted primarily from
+hedging against price fluctuations, in particular at Customer
+Solutions, and from the marking to market of derivatives at the
+innogy segment. The figure for 2018 was mainly attributable to
+derivative financial instruments in conjunction with contractual
+rights and obligations relating to the sale of E.ON's Uniper stake.
+In addition, non-operating earnings includes, in the line item
+"Effects from derivative financial instruments," all effects
+resulting from failed-own-use contracts (for more information,
+see Note 2 to the Consolidated Financial Statements).
+expenditures for the restructuring measures instigated in Ger-
+many and, from the date of the acquisition's closing, at npower,
+innogy's U.K. sales business.
+Restructuring expenses were significantly higher than in the
+prior year and in 2019 consisted primarily of expenditures in
+conjunction with the acquisition of innogy. They also include
+Net book gains in the 2019 financial year declined significantly.
+They consist primarily of effects resulting from the deconsolida-
+tion of PEGI, the parent company of Nord Stream. The prior-year
+figure included book gains on the disposal of E.ON's remaining
+Uniper stake, Hamburg Netz, E.ON Gas Sverige, and, overall, a
+book loss on the initial public offering of Enerjisa Enerji. In addi-
+tion, book gains on the sale of securities were below the prior-
+year figure.
+valuation effects relating to non-current provisions. Financial
+results also include a positive effect of €142 million resulting
+from the difference between the nominal and fair value of bonds
+issued by innogy and innogy Finance B.V.
+27
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+The improvement in financial results relative to the prior year
+mainly reflects positive earnings effects from the marking to
+market of securities, which were partially offset by negative
+E.ON's tax expense was €53 million (prior year: €46 million).
+E.ON's tax rate in 2019 was 7 percent (prior year: 1 percent). In
+particular, the release of tax provisions and liabilities for prior
+years led to a lower tax rate in the year under review and in 2018.
+In addition, higher tax-free income and/or income not subject to
+tax exposure reduced the tax rate in 2018.
+Pursuant to IFRS 5, income/loss from discontinued operations,
+net, is reported separately in the Consolidated Statements of
+Income and, for 2019 and the prior year, includes primarily the
+earnings from the discontinued operations at Renewables, which
+were deconsolidated effective September 18, 2019. Alongside
+the operating earnings of discontinued operations, this figure
+contains items resulting from the deconsolidation. In this context,
+items previously recognized in equity were recorded in income.
+This figure also includes the earnings from the transitional
+consolidation of Rampion wind farm following the reduction in
+E.ON's stake to 20 percent. Deconsolidation resulted in income of
+€0.8 billion. Earnings from innogy's sales business in the Czech
+Republic are reported under this item as well.
+In 2019 E.ON recorded net income attributable to shareholders
+of E.ON SE of €1.6 billion and corresponding earnings per
+share of €0.68. In the prior year E.ON recorded net income of
+€3.2 billion and earnings per share of €1.49.
+Net Income/Loss
+Our merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+Our quasi-regulated and long-term contracted business consists
+of operations in which earnings have a high degree of predict-
+ability because key determinants (price and/or volume) are largely
+set for the medium to long term. Examples include the operation
+of industrial customer solutions with long-term supply agreements
+and the operation of heating networks.
+707
+-610
+Impairments (+)/Reversals (-)
+273
+-264
+Non-operating interest expense (+)/income (-)
+-713
+-612
+-191
+-29
+Net interest income/loss
+2,989
+3,235
+637
+1,027
+Adjusted EBIT
+513
+53
+300
+Reclassified businesses of Renewables¹ (adjusted EBIT)
+-1,521
+1,526
+110
+1,115
+Non-operating adjustments
+3,997
+1,409
+292
+-88
+EBIT
+44
+58
+235
+-24
+-66
+Reclassified businesses of Renewables¹ (operating interest expense (+)/income (-))
+¹Deconsolidated as of September 18, 2019.
+1,505
+1,536
+297
+360
+-45
+4
+14
+1
+Reclassified businesses of Renewables¹ (taxes and minority interests on operating earnings)
+Adjusted net income
+-221
+-316
+-54
+174
+-169
+-544
+-586
+-126
+-206
+Taxes on operating earnings
+2,315
+2,434
+463
+734
+Operating earnings before taxes
+-135
+-123
+-36
+Operating earnings attributable to non-controlling interests
+19
+-3
+3,953
+1,986
+414
+725
+Scheduled depreciation and amortization
+45
+66
+27
+64
+Impairments (+)/Reversals (-)
+2,989
+3,235
+637
+1,027
+1,475
+Adjusted EBIT
+300
+235
+Reclassified businesses of Renewables¹ (adjusted EBIT)
+-179
+-161
+-260
+-146
+252
+113
+Carryforward of hidden reserves (-) and liabilities (+) from the innogy transaction
+Other non-operating earnings
+61
+275
+61
+513
+Income/Loss from equity investments
+Reclassified businesses of Renewables¹
+87
+1,351
+316
+-85
+Income/Loss from continuing operations before financial results and income taxes
+2018
+2019
+2018
+2019
+€ in millions
+Full year
+Fourth quarter
+Adjusted Net Income
+In addition, adjusted net income includes the earnings (adjusted
+to exclude non-operating effects) of the discontinued operations
+at Renewables, which were deconsolidated effective Septem-
+ber 18, 2019, as if their disclosure and valuation had not been
+reclassified pursuant to IFRS 5. Pages 15 and 17 of the Com-
+bined Group Management Report and Notes 4 and 34 to the
+Consolidated Financial Statements contain more information.
+(scheduled depreciation and amortization, impairment charges and reversals)
+Adjusted EBITDA
+In addition to the marking to market of derivatives, the adjust-
+ments include book gains and book losses on disposals, certain
+restructuring expenses, other material non-operating income
+and expenses (after taxes and non-controlling interests), and
+interest expense/income not affecting net income, which consists
+of the interest expense/income resulting from non-operating
+effects. Other non-operating earnings and non-operating inter-
+est expense also include the subsequent valuation of hidden
+reserves and liabilities identified as part of the purchase-price
+calculation and allocation for the innogy transaction.
+Adjusted Net Income
+Other non-operating earnings were at the prior-year level. In 2019
+they include, among other items, the positive effect of realized
+income from hedging transactions for certain currency i
+risks.
+Items resulting from the subsequent valuation of hidden reserves
+and liabilities as part of the preliminary purchase-price allocation
+and newly recorded items resulting from the valuation of finan-
+cial assets at the innogy segment are disclosed separately. The
+latter will be balanced out in subsequent reporting periods.
+In 2019 E.ON recorded impairment charges in particular at
+Customer Solutions in the United Kingdom, Energy Networks in
+Germany, and innogy. In the prior year E.ON recorded impairment
+charges primarily at Customer Solutions in the United Kingdom
+and E.ON Business Solutions.
+28
+Business Report
+¹Deconsolidated effective September 18, 2019.
+4,840
+5,558
+1,165
+1,816
+331
+271
+Like EBIT, net income also consists of non-operating effects,
+such as the marking to market of derivatives. Adjusted net
+income is an earnings figure after interest income, income taxes,
+and non-controlling interests that has been adjusted to exclude
+non-operating effects.
+421
+417
+-24
+Business Performance
+A new Romanian government led by the National Liberal Party
+was formed on November 4 after parliament's vote of no
+confidence against the former Social Democratic government.
+It reinstated residential customers' priority access to gas, to
+which the European Commission responded by opening infringe-
+ment proceedings regarding the country's export ban.
+Municipal elections held in Hungary on October 13, 2019,
+yielded significant gains for opposition parties. The incumbent
+mayor of Budapest, supported by the governing Fidesz party,
+lost to the opposition party candidate after nine years in office.
+It is unclear how the national government will cooperate with
+the opposition at the municipal level. The Hungarian government
+submitted its draft National Energy Strategy 2020 to parliament
+for approval. The strategy calls for Hungary's electricity sector
+to be 90 percent carbon-neutral by 2030 by adding more nuclear
+and renewables capacity, especially solar.
+In March 2019 Slovakia held presidential elections in which
+Zuzana Čaputová was elected the new president. An amended
+law on support for renewables and high-efficiency cogeneration
+that introduces feed-in tariffs for new power producers as
+well as the exemption of DSOs from the support mechanisms
+will impact E.ON's business in Slovakia.
+The Czech government still needs to present a draft law to trans-
+pose the EU electricity market directive. The Czech Republic's
+National Energy and Climate Plan ("NECP") will chart the future
+course of its energy sector in the years ahead.
+East-Central Europe
+23
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Sweden's energy policy remains focused on the 2016 cross-party
+energy agreement that foresees a fully renewable electricity
+system over the long term. The agreement features a number of
+climate policies, including a target of 100 percent renewable
+electricity by 2040. The main policy instrument, the elcertificate
+market scheme, has resulted in substantial growth in wind
+power and the conversion of fossil fuel to biomass. Sweden will
+likely achieve its 2030 renewables target in the early 2020s.
+A new government was formed in January 2019. The coalition
+agreement contains plans to revise eco-taxes. They include
+increased taxation of fossil-fueled CHP plants and a planned tax
+on waste incineration. The new regulatory period for electricity
+grids began on January 1, 2020. It is anticipated that unused
+discretionary investments from previous regulatory periods can
+be carried over to the new period for a certain level of investment.
+E.ON's operating business delivered a positive performance in
+2019. Sales of €41.5 billion were €11.4 billion above the prior-
+year figure. The increase resulted largely from the takeover of
+the innogy Group in September 2019.
+Sweden
+Italy
+In June 2019 the government formally amended the 2008 Cli-
+mate Change Act to commit to net zero emissions by 2050. Net
+zero is at the top of the energy agenda. It is becoming increasingly
+important that measures be designed now to meet the ambitious
+target, which will help put Britain on the road to decarbonization.
+2019 proved to be a politically turbulent year in Great Britain.
+Parliament's vote on the Brexit agreement, which was originally
+supposed to be held by March 29, was postponed several times.
+The exit agreement, known as an Article 50 procedure, was
+amended to include a "flextension," which extended the deadline
+again, this time to January 31, 2020. Amid the negotiation of a
+revised exit agreement, the new Prime Minister, Boris Johnson,
+was finally able to hold a general election on December 12.
+Brexit was the election's predominant issue, and a solution for it
+was foremost in voters' minds. Johnson and his party emerged
+as the election's clear winners. Afterward, Johnson carried out
+his conception of the Brexit deal and led Britain out of the
+European Union on January 31, 2020, as planned. The specter of
+a hard Brexit-that is, Britain exiting without an agreement-was
+forestalled. There is now a transition period until December 31,
+2020. During this time, Britain can negotiate an exit agreement
+with the European Union but will continue to be treated as an
+EU member. In principle, both sides are interested in a far-reaching
+free-trade agreement and very close relations in all policy areas,
+especially in foreign and security policy. Given the very tight time-
+frame and the British government's decision not to extend the
+transition period under any circumstances, the exit negotiations
+will be a historic challenge for both sides.
+Great Britain
+In November 2019 the federal cabinet approved the master plan
+for charging infrastructure. It contains measures for rapidly
+establishing a nationwide, user-friendly charging infrastructure
+for up to 10 million electric vehicles by 2030. The objective is
+1 million public charging points, with 50,000 being installed in
+the next two years. In addition, from 2020 onward €50 million
+will be made available for residential charging options.
+22
+Business Report
+The Federal Ministry of Economics and Energy ("BMW") plans to
+amend the Incentive Regulation Ordinance ("ARegV") by mid-
+2020. The amendment's principal purpose is to establish stronger
+economic incentives for efficient congestion management and
+grid expansion. E.ON could benefit from a revision of the amended
+ARegV's allowed return on equity.
+A ruling issued by the Federal Supreme Court on July 9, 2019,
+affects E.ON's core network business. It upheld the Federal
+Network Agency's reduction of the allowable pretax return on
+equity for operators of electricity and gas distribution networks
+from 9.05 percent to 6.91 percent for the third regulatory period.
+E.ON's distribution system operators ("DSOS") and roughly
+1,100 other companies had filed administrative appeals against
+the reduction with the State Superior Court in Düsseldorf.
+E.ON unequivocally supports the German federal government's
+65-percent renewables target. To get there, renewables output
+would have to roughly double by 2030. Achieving growth of this
+magnitude requires making sufficient land available. To garner
+public support for the energy transition, however, land use is
+often limited. Examples include minimum setback restrictions
+for the siting of wind farms and limitations on the installation
+of solar farms. To ensure that targets are reached and that the
+energy transition as a whole is a success, E.ON advocates flexible
+and ambitious rules for the expansion of wind energy and the
+construction of solar facilities.
+Renewables expansion remains a controversial issue. The
+governing parties could not agree on additional measures in
+2019. Although the Coal Commission presented its final report
+in January 2019, the federal cabinet did not adopt the corre-
+sponding draft legislation until January 2020. The Renewable
+Energy Sources Act (known by its German abbreviation, "EEG")
+is expected to be amended in the first half of 2020.
+In August 2019, 18 months after the election, Italy experienced
+a government crisis. A pro-environment center-left coalition
+formed a new government in September. The new government's
+energy policy aims to increase renewables generation (with
+particular emphasis on self-generation systems) and, as part of a
+Green New Deal, to phase out coal-fired power stations by 2025.
+In October the national regulatory agency presented a proposal
+for the transition to a fully liberalized electricity market for
+end-consumers. Regulated prices are currently scheduled to
+expire on July 1, 2020.
+Adjusted EBIT for the E.ON Group of €3.2 billion was €0.2 billion
+above the prior-year level and likewise above the range of
+€2.9 to €3.1 billion forecast in the 2018 Annual Report. This is
+principally attributable to the closing of the innogy transaction.
+Additional earnings streams from the innogy Group were partially
+offset by the absence of the Renewables segment's businesses
+that were transferred to RWE. Adjusted net income of €1.5 billion
+was at the prior-year level and thus within the range of €1.4 to
+€1.6 billion forecast in the 2018 Annual Report. Earnings per
+share, which are based on adjusted net income, amounted to
+€0.67 in the reporting period (prior year: €0.69). In addition,
+adjusted EBIT and adjusted net income were both within the
+forecast ranges
+that were adjusted in November 2019 owing to
+changes in E.ON's setup.
+In addition, our objective was to record a cash-conversion rate
+of at least 80 percent. Cash-conversion rate is equal to operating
+cash flow before interest and taxes (€4.4 billion) divided by
+adjusted EBITDA (€5.6 billion). Our cash-conversion rate was
+therefore roughly 80 percent. Our ROCE was 8.4 percent, within
+our forecast range of 8 to 10 percent.
+Investments of €5.5 billion were considerably above the prior-
+year figure of €3.5 billion and the €3.7 billion forecast for
+2019 in the E.ON 2018 Annual Report. The deviation is likewise
+attributable to the innogy transaction. Additional investments
+resulted primarily from the acquisition of innogy SE stock and
+Sales at Non-Core Business declined significantly to €1.2 billion
+owing to the expiration of supply contracts and the transfer of
+minority stakes in nuclear power stations to RWE.
+Substantially all of the Renewables segment was transferred
+to RWE in September 2019 as part of the innogy transaction.
+Consequently, its sales declined by about €0.2 billion year on
+year to €1.6 billion.
+Energy Networks' sales were at the prior-year level. Customer
+Solutions' sales increased by €1.3 billion. Higher power and gas
+sales volume in Germany was the primary factor. Sales also
+rose principally because of higher sales prices and sales volume
+in Italy, the Czech Republic, and Hungary.
+E.ON recorded sales of €41.5 billion in 2019, about €11.4 billion
+more than the prior-year figure. The increase is primarily attrib-
+utable to the acquisition of the innogy Group in September
+2019. In addition, the IFRS Interpretations Committee ("IFRS IC")
+clarified the accounting treatment of commodity futures trans-
+actions that are settled with physical delivery, that cannot
+be classified as own-use contracts pursuant to IFRS 9, and that
+are accounted for as derivatives (failed-own-use contracts).
+E.ON has applied this change in accounting methods from the
+start of the 2019 financial year and adjusted the prior-year
+figures accordingly. The adjustment's effects include volatility
+in reported sales (for more information, see Note 2 to the Con-
+solidated Financial Statements).
+Sales
+Earnings Situation
+Cash provided by investing activities of continuing operations
+includes cash-effective disposal proceeds totaling €256 million
+in 2019 (prior year: €4,306 million).
+group.
+Reclassification of Tiszántúli Áramhálózati Zrt. as a disposal
+Reclassification of innogy's sales business in the Czech
+Republic as a discontinued operation
+company of Nord Stream AG, into E.ON's Contractual Trust
+Arrangement ("CTA")
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+two of PreussenElektra's minority stakes to RWE
+Transfer of substantially all of the renewables business and
+Closure of the innogy takeover
+•
+•
+•
+•
+•
+Acquisitions, Disposals, and Discontinued Operations in 2019
+In 2019 E.ON executed the following significant transactions and
+made the following reclassifications pursuant to IFRS 5. Note 4
+to the Consolidated Financial Statements contains detailed
+information about them:
+Cash provided by operating activities of continuing and discon-
+tinued operations of €3 billion was at the prior-year level.
+from the innogy Group since the closing of its takeover by E.ON.
+By contrast, investments at the Renewables segment declined
+because substantially all of it was transferred to RWE. In Novem-
+ber 2019 E.ON adjusted its investment forecast to €6 billion.
+This figure was not achieved especially because certain payments
+for the acquisition of additional shares in subsidiaries had to be
+recorded in cash provided by financing activities.
+24
+Business Report
+The package of climate legislation adopted by the German gov-
+ernment at the end of 2019 focuses on four different areas for
+achieving the country's climate targets in 2030. One core ele-
+ment is the introduction of certificate trading to put a price on
+carbon emissions in the building and transport sectors. Another
+is a mixture of regulatory requirements, financial incentives,
+and socially motivated compensation mechanisms. The Cabinet
+Committee on Climate Protection, or Climate Cabinet, will
+assume responsibility for managing Germany's climate-protec-
+tion strategy, assesses progress annually, and adjust measures
+as necessary.
+Sales1,2
+The continuation of the grand coalition means that the climate
+targets contained in the coalition agreement that followed the
+2017 Bundestag elections remain unchanged. One target is for
+renewables to meet about 65 percent of the country's gross
+electricity consumption by 2030. The ambitious action plan for
+upgrading and expanding energy networks also remains in place.
+The European Green Deal will include a Just Transition Mecha-
+nism to support regions dependent on fossil fuels. In addition, the
+Commission will launch a Sustainable Europe Investment Plan,
+mobilizing investments of €1 trillion over the next decade. As
+part of this effort, it will seek to transform parts of the European
+Investment Bank into a climate bank and double its funding for
+climate investment by 2025. The new Commission also intends
+to present a new industrial policy and proposals for the ethical
+regulation of artificial intelligence. The proposals for relations,
+consultation, and legislation are expected to be published in 2020
+and 2021.
+0.6
+Germany
+1.2
+Annual change in percent
+GDP Growth in Real Terms in 2019
+After peak growth in 2018, the world economy experienced a
+downturn in 2019. Ongoing uncertainty about Brexit and
+increasing trade tensions between the United States and China
+were the dominant features of 2019. As a result, almost all
+economies slowed, and world trade stagnated. Global economic
+growth in 2019 is estimated to have declined by 0.8 percentage
+points year on year to 2.9 percent.
+Macroeconomic Environment
+Macroeconomic and Industry Environment
+Business Report
+20
+Business Report
+Italy
+Our innovation activities include partnering with universities
+and research institutes to conduct research projects in a variety
+of areas. The purpose is to study ways to expand the horizons
+of energy conservation and sustainable energy and to draw on
+this research to develop new offerings and solutions for cus-
+tomers. Collaborative work in the E.ON Energy Research Center
+at RWTH Aachen University focuses on technologically advanced
+electricity networks, innovative heat solutions for buildings and
+city districts, and new solutions for residential customers and
+industrial enterprises.
+Going forward, E.ON will use HoloBuilder's solution for projects to
+install network equipment (such as substations and switchgears)
+and for large city energy projects. We believe the digitization of
+construction projects offers significant, as yet untapped potential.
+HoloBuilder, a startup with roots in Aachen and based in San
+Francisco, has developed a cloud solution that not only enables
+virtual construction site inspections and 360° live streaming
+from construction sites but also time travel: construction man-
+agers, business customers, and contractors can fast-forward
+and rewind at any time and thus better track construction prog-
+ress. Another feature is the virtual measurement of distances at
+a construction site. The images for the software are provided
+by a 360° camera in conjunction with the JobWalk app, which
+employees can use on site to activate the camera and document
+the project.
+Vinli, a U.S.-based startup, has developed software and a data
+analysis platform for mobility solutions. The software solution not
+only collects and clearly structures data from vehicles connected
+to the system. It can also generate results-oriented insights that
+enable large vehicle fleet operators, automakers, and service
+providers to make the advantages of eMobility economical.
+In 2019 we invested in Vinli and HoloBuilder and made a number
+of follow-up investments in our portfolio.
+We want to identify promising energy technologies of the
+future that will enhance our palette of offerings for our millions
+of customers around Europe and will make us a pacesetter in
+the operation of smart energy systems. We select new busi-
+nesses that offer the best opportunities for partnerships, com-
+mercialization, and equity investments. Our investments focus
+on strategic technologies and business models that enhance
+our ability to lead the move toward distributed, sustainable, and
+innovative energy offerings. These arrangements benefit new
+technology companies and E.ON, since we gain access to their
+new business models and have a share in the value growth.
+Strategic Co-Investments
+Renewables generation: increase the cost-effectiveness of
+existing wind and solar assets and study new renewables
+technologies; E.ON's renewables business along with its
+innovation activities regarding renewables was transferred
+to RWE in September 2019.
+Energy intelligence and energy systems: study potentially
+fundamental changes to energy systems and the role of data
+in the new energy world
+•
+•
+19
+Partnerships with Universities
+0.2
+Euro zone
+Sweden
+21
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+The outbreak and spread of the novel coronavirus has major
+global implications, including economic and financial implications.
+E.ON is aware of its responsibility as an operator of critical infra-
+structure in this context as well. It has established a crisis team
+which is monitoring current developments so that the Company
+can, if necessary, expand the measures it has already taken.
+COVID-19 (Coronavirus)
+Following the elections to the European Parliament in May 2019,
+the European Union elected a new Commission. Commission
+President Ursula von der Leyen resolved to make climate and
+environmental issues her top priority by launching the European
+Green Deal. Its centerpiece is a legally binding commitment by
+the EU to achieve climate neutrality by 2050. In addition, the
+new Commission intends to consider raising the 2030 carbon-
+reduction targets to 50 to 55 percent. To help achieve them, the
+Commission will make proposals for an EU emissions trading
+scheme for the transport and construction sectors (which will
+eventually be merged with the existing emissions trading
+scheme), introduce a carbon border tax that conforms with World
+Trade Organization rules, and review the Energy Tax Directive.
+Europe
+The 25th UN climate change conference, held in Madrid from
+December 2 to 15, 2019, was largely without result. The dele-
+gates from just under 200 countries were only able to reach
+agreement on a minimal compromise. In the final document,
+countries agreed to review the gap between their existing vol-
+untary climate targets and what would be necessary to limit
+the increase in global temperatures to below 2 degrees Celsius
+as foreseen in the Paris agreement. Consequently, key deci-
+sions-such as a voluntary commitment by all countries to more
+climate protection and the design of a global market mechanism
+for trading in climate-protection certificates-were postponed
+until the next climate summit, which will be held in Glasgow
+later this year.
+On November 4, 2019, the U.S. government under President
+Donald Trump gave notice that it intends to withdraw from the
+Paris climate agreement. The one-year transition period until
+the formal exit will end on November 3, 2020, one day after the
+upcoming presidential election.
+Global
+Energy Policy and Regulatory Environment
+2.3
+Source: OECD, 2019.
+2
+1
+0
+1.7
+1.4
+0.3
+Turkey
+OECD
+USA
+Kingdom
+1.2
+United
+Germany
+Fourth quarter
+Transfer of PEG Infrastruktur AG ("PEGI"), the parent
+€ in millions
+€ in millions
+Adjusted EBIT
+Business Report
+The E.ON Group's adjusted EBIT was €246 million above the
+prior-year figure. Its core business was characterized by the
+aforementioned items. Non-Core Business's adjusted EBIT
+declined slightly. PreussenElektra was adversely affected by
+higher depreciation charges, the transfer of minority stakes
+in nuclear power stations to RWE, and longer plant downtimes.
+These factors were largely offset by higher earnings from the
+generation business in Turkey.
+As already described, substantially all of the Renewables segment
+was transferred to RWE in September 2019. Consequently, its
+adjusted EBIT declined by €174 million year on year.
+The innogy segment recorded adjusted EBIT of €421 million
+from September 18 to December 31, 2019. These earnings are
+principally attributable to innogy's network business, primarily
+in Germany.
+Adjusted EBIT at Customer Solutions decreased significantly
+(-€100 million), particularly because of the new regulatory price
+caps and a smaller customer base in the United Kingdom.
+Energy Networks' adjusted EBIT of €1,888 million was at the
+prior-year level. An increase in adjusted EBIT in Germany and
+Sweden was partially offset by a decrease in East-Central
+Europe/Turkey.
+In 2019 adjusted EBIT in our core business surpassed the
+prior-year figure by €262 million.
+Adjusted EBIT
+Income from companies accounted for under the equity method
+of €421 million was considerably above the prior-year figure of
+€269 million. Equity income from the stake in Enerjisa Üretim
+Santralleri A.Ş. was €91 million above the prior-year level. Income
+also rose through the inclusion of innogy's equity interests for
+the first time.
+Energy Networks
+currency-translation effects amounted to €1,775 million (prior
+year: €1,626 million). Other operating expenses also include
+expenditures of €725 million resulting from the termination, as
+part of the initial innogy purchase-price allocation, of own-use
+contracts recorded as liabilities.
+Depreciation charges rose year on year, from €1,575 million to
+€2,502 million. The change mainly reflects the inclusion of innogy
+for the first time. The increase is also attributable to initial appli-
+cation of IFRS 16 and the resulting depreciation of right-of-use
+assets. In the year under review, E.ON recorded impairment
+charges in particular at Energy Networks in Germany for decom-
+missioning costs of a gas storage facility and at Customer Solu-
+tions in the United Kingdom.
+Personnel costs of €4,101 million were €1,641 million above the
+figure of €2,460 million. The innogy takeover is the main reason
+for the increase. This also resulted in higher expenditures for
+staff restructuring.
+Costs of materials of €32,126 million were significantly above
+the prior-year level of €22,635 million. The increase is principally
+attributable to the acquisition of the innogy Group.
+Other operating income rose by €315 million, from €5,334 million
+to €5,649 million. The increase resulted mainly from higher
+income from the termination, as part of the initial innogy pur-
+chase-price allocation, of own-use contracts of €755 million
+recorded as liabilities. By contrast, the sale of equity interests
+and securities declined by €456 million to €612 million. In 2019
+this includes €390 million from the sale of PEG Infrastruktur AG,
+the parent company of Nord Stream AG. Income from the sale
+of equity interests of €42 million was lower than in the prior year
+(€91 million).
+The aforementioned failed-own-use contracts also affect cost
+of materials as well as other operating income and expenses.
+See Note 2 to the Consolidated Financial Statements for more
+information.
+Other Line Items from the Consolidated Statements of Income
+Own work capitalized of €487 million (prior year: €394 million)
+mainly reflected the capitalization of work in IT projects and
+network investments. The increase is mainly attributable to the
+inclusion of innogy.
+25
+25
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+¹Includes the discontinued operations in the Renewables segment until September 18, 2019. Sales from continuing operations amounted to €41 billion in 2019 (prior year: €29.4 billion).
+²Includes effects resulting from failed-own-use contracts; we adjusted the prior-year quarters accordingly (see Note 2 to the Consolidated Financial Statements).
+Full year
+Customer Solutions
+innogy
+Renewables
+413
+313
++68
+53
+89
++2
+1,844
+1,888
++24
+372
+463
++1-%
+Full year
+2018
+2019
++1-%
+2018
+2019
+Fourth quarter
+26
+Adjusted EBIT
+Non-Core Business
+Adjusted EBIT from core business
+Consolidation
+Corporate Functions/Other
++38
+30,084
+Other operating expenses increased by 54 percent, from
+€4,786 million to €7,355 million. In particular, expenditures
+relating to derivative financial instruments rose substantially,
+from €866 million to €2,270 million. Expenditures relating to
++110
+541
+293
+Renewables
+10,444
+9,528
+innogy
++6
+21,987
+23,279
++5
+6,286
+6,591
+-46
+Customer Solutions
+8,769
+8,870
+-2
+2,355
+2,314
+Energy Networks
++1-%
+2018
+2019
++1-%
+2018
+2019
++1
+41,484
+Report of the Supervisory Board
+Strategy and Objectives
+1,754
+Non-Core Business
+307
+411
+-25
+1,174
+1,370
+-14
+Corporate Functions/Other
+178
+144
++24
+1,596
+622
+-3
+Consolidation
+-1,238
+-1,169
+-6
+-4,501
+-4,440
+-1
+E.ON Group
+17,973
+8,568
+644
+-9
+2,913
+³Full-time equivalent.
+2,758
+2,888
+2,628
+2,286
+2,058
+2,263
+2,027
+Poland
+2,018
+209
+2,930
+208
+Other²
+1,414
+1,188
+1,385
+1,174
+Total
+78,948
+43,302
+75,953
+42,241
+¹Figures do not include board members, managing directors, or apprentices.
+²Includes Italy, USA, Denmark, and other countries.
+2,771
+2,003
+E.ON presents its financial condition using, among other financial
+measures, economic net debt, debt factor, and operating cash
+flow.
+29
+10
+€ in millions
+2019
+Intangible assets and property, plant, and
+equipment
+10
+Financial assets
+45,067
+33,241
+Non-current assets
+45,077
+33,251
+Receivables from affiliated companies
+5,934
+December 31,
+2018
+7,472
+1,522
+1,932
+Liquid funds
+1,460
+Current assets
+8,916
+3,041
+12,445
+Accrued expenses
+35
+28
+Asset surplus after offsetting of benefit
+obligations
+3
+Other receivables and assets
+Total assets
+Balance Sheet of E.ON SE (Summary)
+E.ON SE's Earnings, Financial, and Asset
+Situation
+2020
+2.0
+8:0
+4.0
+6.0
+8.0
+10.0
+At December 31, 2019
+54,324
+100
+13,085
+13
+8,518
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the Electricity and
+Gas Supply Act (Energy Industry Act).
+16
+60
+30,545
+56
+26,017
+27
+15,261
+28
+98,566
+100
+54,324
+100
+Business Report
+34
+59,464
+54,031
+45,724
+Equity
+2018
+Income from equity interests
+1,620
+1,171
+Interest income/loss
+-127
+Other expenditures and income
+-763
+Taxes
+59
+-140
+-225
+247
+Net income
+789
+2019
+1,053
+121
+Net income transferred to retained earnings
+Net income available for distribution
+300
+1,053
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings situation is affected by income from equity interests.
+The increase in income from equity interests reflects, in particular,
+the in-phase distribution of net income from E.ON Beteiligungen
+GmbH, of which €664 million was recorded in earnings, and
+profit transfers of €979 million from E.ON Beteiligungen GmbH
+and of €210 million from E.ON Energie AG. Income from equity
+interests was adversely affected primarily by expenditures from
+loss transfers of €241 million.
+The change in the negative figure recorded under other expendi-
+tures and income results predominantly from the transfer of
+E.ON's renewables business and two minority stakes in nuclear
+power stations to RWE. In addition, this figure contains personnel
+expenditures of €183 million, expenditures of €160 million for
+consulting and auditing services, and expenditures of €156 million
+for third-party services. The prior-year figure benefited from
+income of €271 million from a necessary adjustment for certain
+environmental remediation obligations of predecessor entities.
+In the year under review, on balance the Company's income taxes
+yielded tax income of €59 million, which
+the
+encompasses year
+under review as well as prior years. Applying the minimum tax
+rate resulted in corporate taxes of €69 million, a solidarity sur-
+charge of €4 million, and trade taxes of €33 million in 2019. For
+previous years the Company recorded tax income of €165 million.
+At the Annual Shareholders Meeting in 2020, management will
+propose that net income available for distribution be used to pay
+a dividend of €0.46 per ordinary share and the remaining amount
+of €10 million to be brought forward as retained earnings.
+Management's proposal for the use of net income available for
+distribution is based on the number of ordinary shares on
+March 23, 2020, the date the Financial Statements of E.ON SE
+were prepared.
+Pending the Supervisory Board's approval, the E.ON SE Manage-
+ment Board has decided on a dividend policy that foresees annual
+growth in the dividend per share of up to 5 percent through the
+dividend for the 2022 financial year. E.ON will aim for an annual
+increase in dividend per share after this as well.
+The complete Financial Statements of E.ON SE, with an unquali-
+fied opinion issued by the auditor, PricewaterhouseCoopers
+GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, will be
+announced in the Bundesanzeiger. Copies are available on request
+from E.ON SE and at www.eon.com.
+Business Report
+36
+Other Financial and Non-Financial Performance
+Indicators
+Profit carryforward from the prior year
+€ in millions
+Income Statement of E.ON SE (Summary)
+35
+9,728
+9,432
+Provisions
+1,061
+1,480
+Bonds
+6,000
+2,000
+Liabilities to affiliated companies
+31,040
+32,456
+Other liabilities
+6,195
+354
+Deferred income
+7
+2
+Total equity and liabilities
+54,031
+45,724
+Following the clearance issued by the European Commission and
+the relevant antitrust agencies on September 18, 2019, E.ON's
+earnings, financial, and asset situation in the 2019 financial year
+was influenced primarily by the agreement reached between E.ON
+and RWE on March 12, 2018, to transfer business operations.
+The change in financial assets mainly reflects the addition of the
+76.8-percent majority stake in innogy SE and its contribution to
+a subsidiary. The repayment of the procurement costs and the
+portion of the distribution of net income from E.ON Beteiligungen
+GmbH that was not recorded in earnings were countervailing
+factors.
+The change in equity results mainly from the capital increase
+executed in the financial year. Net income in 2019 was lower
+than in the prior year.
+Other liabilities consist primarily of the obligation to RWE relating
+to the future transfer of innogy's entire renewables business,
+its entire gas-storage business, and its 37.9-percent stake in
+Austrian energy utility KELAG.
+The issuance of bonds with a total nominal value of €4,000 million
+and the €1,581 million reduction in liquid funds were the main
+items affecting the Company's financial situation.
+Information on treasury shares can be found in Note 19 to the
+Consolidated Financial Statements.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+2021
+Analyzing Value Creation
+2022
+2024
+E.ON's asset situation in particular reflects the takeover of innogy
+operations. Total assets and liabilities of roughly €98.6 billion
+were €44.2 billion, or 81 percent, above the figure from year-end
+2018. Non-current assets of €76.4 billion were €45.6 billion
+higher than at year-end 2018. The takeover led mainly to an
+increase in property, plant, and equipment in the amount of
+€17.8 billion. In addition, E.ON recorded preliminary goodwill of
+€15.5 billion in conjunction with the innogy takeover.
+Current assets declined by €1.3 billion, or 6 percent, from
+€23.4 billion to around €22.1 billion. This principally reflects the
+departure of the Renewables segment from assets held for sale,
+which reduced current assets by €11.3 billion. A €8.9 billion
+increase in operating receivables and other operating assets
+had a countervailing effect. This figure includes €6.6 billion in
+operating receivables and other operating assets taken over
+from innogy.
+E.ON's equity ratio (including non-controlling interests) at year-
+end 2019 was 13 percent, which is 3 percentage points lower
+than at year-end 2018.
+A capital increase of subscribed capital was conducted in
+September 2019. Under preponderant utilization of authorized
+capital, E.ON increased its share capital from €2,201,099,000
+to €2,641,318,800 through the issuance of 440,219,800 new
+registered no-par-value shares against contributions in kind. The
+€3.5 billion change in capital reserves results from the valuation
+in connection with the capital increase against contributions in
+kind of innogy SE stock received in excess of the nominal value of
+the new E.ON SE stock that was issued (€440,219,800). Equity
+attributable to E.ON SE shareholders was €9.1 billion at year-end
+2019. Equity attributable to non-controlling interests amounted
+to €4 billion.
+Non-current debt almost doubled relative to year-end 2019.
+As on the asset side, the increase reflects the inclusion of innogy
+operations. In particular, bonds rose by €17.1 billion, of which
+about €14.3 billion is attributable to innogy. In addition, the initial
+consolidation of innogy companies and the reduction in actuarial
+interest rates let to an increase in provisions for pensions.
+Current debt of €26 billion was 70 percent above the figure at
+year-end 2018. As part of the transaction, E.ON took on innogy
+debt in the amount of €14.5 billion. This increase was partially
+offset by the deconsolidation of the Renewables segment's debt
+of €2.7 billion that had previously been reclassified pursuant
+to IFRS 5.
+Consolidated Assets, Liabilities, and Equity
+€ in millions
+Non-current assets
+Current assets
+Total assets
+Equity
+Non-current liabilities
+Asset Situation
+Current liabilities
+Additional information about E.ON's asset situation is contained
+in Notes to the Consolidated Financial Statements.
+Dec. 31,
+Dec. 31,
+2019
+%
+2018
+%
+76,444
+78
+30,883
+57
+22,122
+Total equity and liabilities
+22
+33
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Customer Solutions invested €87 million more than in the
+prior year. The increase resulted in part from the acquisition of
+Coromatic in Sweden. The aforementioned reassignment of
+investment projects in the Czech Republic was an additional
+reason for the increase in investments relative to the prior year.
+By contrast, investments in the United Kingdom declined, pri-
+marily because of lower investments in smart meters.
+The innogy segment's investments totaled €878 million from
+September 18 to December 31, 2019. The biggest share of these
+funds went toward the expansion and upgrade of network
+infrastructure in Germany. Alongside maintenance, the focus
+was on the connection of distributed generating facilities and
+network expansion in conjunction with the energy transition.
+Investments at Renewables were €442 million below the prior-
+year figure. The reason is the departure of those of this segment's
+businesses that were transferred effective September 18, 2019,
+as part of the transaction with RWE.
+Corporate Functions/Other's investment rose significantly, in
+particular because of the innogy transaction. The 2019 figure
+primarily reflects expenditures for the completion of the public
+takeover offer and the acquisition of innogy stock on-market.
+Investments at Non-Core Business were €38 million above the
+prior-year level. The 2019 figure consists in particular of expen-
+ditures by PreussenElektra in conjunction with the innogy trans-
+action and the acquisition of residual power output rights. The
+prior-year figure primarily reflects a capital increase at Enerjisa
+Üretim in Turkey, which is accounted for using the equity method.
+Cash Flow
+Cash provided by operating activities of continuing and discon-
+tinued operations before interest and taxes of €4.4 billion was
+€0.3 billion above the prior-year figure. Negative working capital
+the 2019 financial year was more than offset by the inclusion of
+innogy for the first time. By contrast, cash provided by operating
+activities of continuing and discontinued operations was only
+slightly below the prior-year figure due to higher interest and
+tax payments.
+Cash provided by investing activities of continuing and discon-
+tinued operations totaled -€5.8 billion versus +€1 billion in the
+prior year. The sale of the remaining stake in Uniper SE in the
+prior year was the main reason, accounting for €3.8 billion of
+the change. In particular, the acquisition of innogy stock reduced
+cash provided by investing activities in 2019. The purchase and
+sale of securities and the change in financial receivables and
+restricted funds resulted in net cash outflow of €0.6 billion in the
+2019 financial year compared with net cash inflow of €0.2 billion
+in the prior year.
+Cash Flow¹
+€ in millions
+2019
+2018
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Operating cash flow
+2,853
+Operating cash flow before interest and taxes²
+4,407
+4,087
+Cash provided by (used for) investing
+activities
+-5,820
+1,011
+792
+-2,637
+Cash provided by (used for) financing
+activities
+¹From continuing and discontinued operations.
+2Excludes the innogy business in the Czech Republic reclassified pursuant to IFRS 5.
+Cash provided by financing activities of continuing and discon-
+tinued operations of +€0.8 billion was €3.4 billion above the prior-
+year figure of -€2.6 billion. This primarily reflects the repayment
+of bonds in 2018 and the issuance of bonds in 2019. The increase
+in the dividend payout from €0.9 billion in 2018 to €1.1 billion
+in 2019 was a countervailing factor.
+Report of the Supervisory Board
+Strategy and Objectives
+2,965
+23,441
+43
+98,566
++/-%
+2018
+2019
+€ in millions
+Energy Networks
+Investments
+In 2019 investments in our core business and in the E.ON Group
+as a whole were significantly above the prior-year level. E.ON
+invested about €3.8 billion in property, plant, and equipment
+and intangible assets (prior year: €3 billion). Share investments
+totaled €1.7 billion versus €0.5 billion in the prior year.
+Investments
+E.ON will continue to take into account the trust of rating agen-
+cies, investors, and banks by means of a clear strategy and trans-
+parent communications and therefore holds events that include
+an annual informational meeting for its core group of banks.
+Standard & Poor's
+Moody's
+Stable
+A-2
+BBB
+1,655
+Stable
+Baa2
+Outlook
+Short term
+Long term
+E.ON SE Ratings
+E.ON's creditworthiness has been assessed by Standard & Poor's
+("S&P") and Moody's with long-term ratings of BBB and Baa2,
+respectively. The outlook for both ratings is stable. In both cases
+the ratings were based on the expectation that, over the near
+to medium term, E.ON will be able to maintain a debt ratio com-
+mensurate with these ratings. S&P's and Moody's short-term
+ratings are unchanged at A-2 and P-2, respectively.
+Alongside financial liabilities, E.ON has, in the course of its busi-
+ness operations, entered into contingencies and other financial
+obligations. These include, in particular, guarantees, obligations
+from legal disputes and damage claims, as well as current and
+non-current contractual, legal, and other obligations. Notes 26,
+27, and 31 to the Consolidated Financial Statements contain
+more information about E.ON's bonds as well as liabilities, con-
+tingencies, and other commitments.
+In conjunction with the acquisition of innogy SE, on April 6, 2018,
+E.ON originally secured a €5 billion acquisition facility, but in
+August 2018 partially cancelled the facility down to €1.75 billion.
+This credit facility is undrawn and remains available to the Group.
+€2 billion facility. The credit margin is linked in part to the
+development of certain ESG ratings, which gives E.ON financial
+incentives to pursue a sustainable corporate strategy. The ESG
+ratings are set by three renowned agencies: ISS ESG, MSCI ESG
+Research, and Sustainalytics. The facility serves as a reliable,
+ongoing general liquidity reserve for the E.ON Group and can
+be drawn on as needed. The credit facility is made available by
+21 banks which constitute E.ON's core group of banks.
+2028+
+2027
+2026
+2025
+P-2
+1,597
++4
+Customer Solutions
+100
+Energy Networks' investments were €58 million above the prior-
+year level. Investments in Germany rose primarily because of
+new connections as well as replacements and upgrades. IT
+investments in Sweden were lower than in 2018. Investments
+in East-Central Europe/Turkey were lower than in 2018, in
+particular because of the reassignment of investment projects
+in the Czech Republic between Customer Solutions and Energy
+Networks relative to the prior year.
+32
+Business Report
+Investments in core business
+Non-Core Business
+Corporate Functions/Other
+Consolidation
++56
+3,523
+5,492
+E.ON Group investments
++23
+169
+207
++58
+3,354
+5,285
+-3
+1
+86
+1,305
+-30
+1,037
+722
+Renewables
+878
+innogy
++14
+637
+724
+2023
+ROCE is a pretax total return on capital and is defined as the
+ratio of adjusted EBIT to annual average capital employed. In
+the 2020 financial year, ROCE is no longer one of E.ON's most
+important key performance indicators (see pages 17 and 18).
+1,210
+Changes to E.ON's portfolio during the course of the year are
+factored into average capital employed. Consequently, the innogy
+Group's assets and debt relevant for capital employed were
+¹Includes private placements.
+Reconciliation of Economic Net Debt
+10.7
+29.5
+1.6
+4.8
+Other liabilities
+Total
+0.0
+0.1
+Commercial paper
+0.1
+0.0
+Promissory notes
+-16,580
+²This figure is not the same as the asset-retirement obligations shown in the Consolidated
+Balance Sheet from continuing and discontinued operations (€10,571 million at December 31,
+2019; €11,889 million at December 31, 2018). This is because we calculate economic net
+debt in part based on the actual amount of the obligations.
+0.1
+0.2
+Other currencies
+0.2
+0.3
+JPY
+3.4
+7.1
+Debt factor
+0.9
+0.9
+USD
+4,840
+¹Bonds issued by innogy are recorded at their nominal value. The figure shown in the Consolidated
+Balance Sheets is €2.5 billion higher.
+December 31
+€ in millions
+Economic net debt
+14,368
+9,502
+13,737
+9,077
+8,129
+5,244
+8,104
+5,234
+6,579
+6,427
+Annual average capital employed represents the interest-bearing
+capital invested in E.ON's operating business. It is calculated
+by subtracting non-interest-bearing available capital from non-
+current and current operating assets. Depreciable non-current
+assets are included at their book value. Goodwill from acquisitions
+is included at acquisition cost, as long as this reflects its fair
+value. In order to better depict intraperiod fluctuations in average
+capital employed, annual average capital employed is calculated
+as the arithmetic average of the amounts at the beginning of the
+year and the end of the year.
+6,363
+€ in billions
+Maturity Profile of Bonds Issued by E.ON SE, E.ON International Finance B.V., innogy SE, and innogy Finance B.V.
+31
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+E.ON also has access to a five-year, €3.5 billion syndicated credit
+facility, which was concluded on October 24, 2019, and which
+includes two options to extend the facility, in each case for one
+year. The facility replaced two previously existing syndicated
+credit facilities: E.ON SE's €2.75 billion facility and innogy SE's
+In addition to its DIP, E.ON has a €10 billion European Commercial
+Paper ("CP") program and a $10 billion U.S. CP program under
+which it can issue short-term notes. At year-end 2019 E.ON had
+€50 million of CP outstanding (prior year: €0).
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE and EIF's currently outstanding bonds were
+issued under a Debt Issuance Program ("DIP"). Similarly, innogy
+and innogy Finance B.V. bonds were issued under the innogy
+Group's DIP. A DIP simplifies a company's ability to issue debt to
+investors in public and private placements in flexible time frames.
+E.ON SE's DIP was last updated in March 2019 with a total
+volume of €35 billion, of which about €11.8 billion was utilized
+at year-end 2019. E.ON SE intends to renew the DIP in 2020.
+The key objective of our funding policy is for E.ON to have access
+to a variety of financing sources at all times. We achieve this
+objective by using different markets and debt instruments to
+maximize the diversity of our investor base. E.ON issues bonds
+with tenors that give its debt portfolio a balanced maturity
+profile. Moreover, large-volume benchmark issues may in some
+cases be combined with smaller issues, private placements,
+and/or promissory notes. Furthermore, in 2019 E.ON for the
+first time issued Green Bonds and, going forward, intends to
+continue issuing a portion of its bonds as Green Bonds. External
+funding is generally carried out by E.ON SE, and the funds are
+subsequently on-lent in the Group. In the past, external funding
+1,961
+-14,619
+Funding Policy and Initiatives
+¹Deconsolidated effective September 18, 2019.
+-39,430
+Economic net debt (continuing operations)
+Reclassified businesses of Renewables and
+PreussenElektra¹
+2018
+2019
+-39,430
+5,558
+15,400
+Adjusted EBITDA
+7.6
+was also carried out by our Dutch finance subsidiary, E.ON Inter-
+national Finance B.V. ("EIF"), under guarantee of E.ON SE and by
+innogy SE and innogy Finance B.V. under guarantee of innogy SE.
+In 2019 E.ON paid back in full maturities of €1.1 billion. E.ON
+issued new debt totaling €4 billion.
+2018
+December 31,
+5,423
+3,602
+Liquid funds
+2019
+€ in millions
+Economic Net Debt
+30
+30
+Business Report
+Economic net debt in the year under review was also affected
+by the initial application of IFRS 16 (see the section entitled
+Special Events in the Reporting Period on page 17). The initial
+application of IFRS 16 does not have a material impact on E.ON's
+debt-bearing capacity, because operating lease relationships
+were already included in its calculation prior to the introduction
+of IFRS 16.
+Non-current securities
+Provisions for pensions rose, in part because of significantly lower
+actuarial interest rates, which led to an increase in defined ben-
+efit obligations despite the positive development of plan assets.
+Compared with the figure recorded at December 31, 2018
+(€16.6 billion), E.ON's economic net debt increased by
+€22.8 billion to €39.4 billion.
+Economic Net Debt
+E.ON's debt factor at year-end 2019 of 7.1 was above our
+medium-term target of below 4. The informational value of this
+key figure at year-end 2019 is very limited, however, because
+following the closing of the innogy takeover it contains all of the
+relevant items of innogy's debt but only a portion of its adjusted
+EBITDA, namely from the closure of the takeover to year-end 2019.
+E.ON aims to reduce the debt factor to around 5 over the
+medium term.
+respective bonds. These balance-sheet and earnings effects
+do not alter the interest and principal payments. To manage
+economic net debt, we continue to use the nominal amount of
+financial liabilities, which deviates from the figure shown in
+E.ON's balance sheets.
+Pursuant to IFRS valuation standards, innogy's financial liabilities
+at the time of initial consolidation were recorded at their fair
+value. This fair value is significantly higher than the original nomi-
+nal value because interest-rate levels have declined since innogy's
+bonds were issued. The purchase-price allocation yielded a
+difference between the nominal value and the fair value, which
+results in additional liabilities of €2.5 billion at year-end 2019.
+This amount will be recorded in financial earnings as a reduction
+in expenditures and spread out over the maturity period of the
+The low interest-rate environment continued. In some cases
+this led to negative real interest rates on asset-retirement
+obligations. As in prior years, provisions therefore exceeded the
+actual amount of asset-retirement obligations at year-end 2019
+without factoring in discounting and cost-escalation effects.
+This limits the relevance of economic net debt as a key figure.
+We want economic net debt to serve as a useful key figure that
+aptly depicts E.ON's debt situation. In the case of material provi-
+sions affected by negative real interest rates, we have therefore
+used the aforementioned actual amount of the obligations instead
+of the balance-sheet figure to calculate economic net debt since
+year-end 2016.
+We manage E.ON's capital structure using debt factor, which
+is equal to economic net debt divided by adjusted EBITDA; it is
+therefore a dynamic debt metric. Economic net debt includes
+not only financial liabilities but also provisions for pensions and
+asset-retirement obligations. In addition, at year-end 2018 it
+included the reclassified operations at Renewables that were
+deconsolidated effective September 18, 2019, and the obligations
+in conjunction with PreussenElektra's divested minority stakes.
+With our target capital structure we aim to sustainably secure
+a strong BBB/Baa rating.
+Our finance strategy focuses on E.ON's capital structure. Ensuring
+that E.ON has unrestricted access to capital markets is at the
+forefront of this strategy.
+Finance Strategy
+Financial Situation
+29
+Economic net debt at the balance-sheet date mainly reflects
+special items. Debt rose in particular owing to the initial consol-
+idation of innogy operations. This was partially counteracted
+by the deconsolidation of reclassified operations at Renewables
+and PreussenElektra that were still included in the figure at
+year-end 2018. In addition, the figure at the balance-sheet date
+includes cash-effective items relating to the innogy transaction
+(see pages 31 and 32 for more information).
+2,353
+2,295
+Financial liabilities¹
+GBP
+4.0
+15.6
+EUR
+-16,580
+-39,430
+Economic net debt
+9.0
+24.6
+Bonds¹
+-10,288
+-8,869
+Asset-retirement obligations²
+2018
+2019
+€ in billions
+-3,261
+-7,201
+Provisions for pensions
+December 31
+-3,031
+-23,360
+Net financial position
+Financial Liabilities
+-28
+167
+FX hedging adjustment
+-10,721
+-29,482
+3.8
+36,510
+6,410
+38,336
+Annual average capital employed in continuing and discontinued operations4
+Adjusted EBIT5
+38,726
+28,811
+3,235
+2,989
+ROCE6
+8.4%
+10.4%
+¹Includes preliminary goodwill from the innogy purchase-price allocation.
+2Examples of other non-interest-bearing assets/liabilities include income tax receivables and liabilities.
+³Non-interest-bearing provisions include current provisions, such as those relating to sales and procurement market obligations. In particular, they do not include provisions for pensions or
+nuclear-waste management.
+4As a rule, weighted capital employed is the arithmetical average of capital employed at the beginning and the end of the year. To adequately portray the innogy takeover in September 2019, capital
+employed in 2019 was weighted on the basis of a number of month-end figures. This calculation reflected the following parameters:
+a) Capital employed of continuing operations at December 31, 2018: €29.4 billion (includes the discontinued operations at Renewables).
+29,371
+b) Capital employed of continuing operations at June 30, 2019, projected to September 30, 2019, on the basis of net investments and depreciation charges: €32.4 billion (includes the discontinued
+operations at Renewables).
+d) Capital employed of continuing operations at December 31, 2019: €62.8 billion (includes innogy and excludes the businesses transferred to RWE).
+75 percent of the average of parameters a) and b) is factored into average capital employed, as is 25 percent of the mean of parameters c) and d).
+15,903
+6ROCE = adjusted EBIT divided by average capital employed.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+37
+Employees
+People Strategy
+The year 2019 was characterized predominantly by the prepa-
+rations for innogy's full integration into the E.ON Group. Accom-
+plishing the integration of innogy's roughly 36,500 employees is
+of decisive importance for the transaction's success. Consequently,
+HR integration was one of the E.ON HR division's most import-
+ant topics in 2019.
+In 2019 we also focused our people strategy on supporting and
+shaping digital change. Our focus areas are digital culture and
+leadership, capabilities of the future, adaptation of HR processes
+and products, and employee development. We intend to work with
+our business units to shape the digital transformation through
+a number of Group-wide and unit-level projects.
+In addition, we updated grow@E.ON, our Group-wide compe-
+tency model for the professional and personal development of our
+employees and leaders, and E.ON's employee value proposition.
+We also adjusted them to reflect the changes brought about by
+the integration of innogy.
+c) Capital employed of continuing operations at September 30, 2019: €61.7 billion (includes innogy and excludes the discontinued operations at Renewables).
+Diversity
+62,792
+-1,655
+included effective the end of September 2019. The components
+of capital employed attributable to the discontinued operations
+at Renewables transferred to RWE were included until the end of
+September 2019 (footnote 4 of the ROCE table below contains
+more information).
+Annual average capital employed does not include the marking
+to market of other share investments and derivatives. The
+purpose of excluding these items is to provide us with a more
+consistent picture of E.ON's ROCE performance.
+ROCE Performance in 2019
+ROCE decreased from 10.4 percent in 2018 to 8.4 percent in
+2019 owing mainly to the increase in capital employed. The
+primary reasons are the inclusion of the innogy Group's assets
+(including preliminary goodwill from the purchase-price alloca-
+tion) and debt for the first time and the inclusion of right-of-use
+assets from the start of 2019 due to the initial application of
+IFRS 16 Leases.
+The table below shows the E.ON Group's ROCE and its derivation.
+ROCE
+€ in millions
+2019
+2018
+Property, plant, and equipment, right-of-use assets, intangible assets, and goodwill¹
+60,590
+30,915
+Shares in affiliated and associated companies and other share investments
+Capital employed in continuing and discontinued operations4
+6,962
+Non-current assets
+67,552
+35,178
+Inventories
+1,252
+710
+Other non-interest-bearing assets/liabilities, including deferred income and deferred tax assets²
+Current assets
+-2,455
+-4,862
+-1,203
+-4,152
+Non-interest-bearing provisions³
+-3,557
+4,263
+Going forward, diversity will remain a key element of E.ON's
+competitiveness. Diversity and an appreciative corporate culture
+promote creativity and innovation. This is a central aspect of
+the E.ON vision as well. E.ON brings together a diverse team of
+people who differ by nationality, age, gender, religion, sexual
+orientation and identity, and/or cultural and social background.
+We foster and utilize diversity in specific ways and create an
+inclusive work environment. This is important for our success.
+Studies show that heterogeneous teams outperform homoge-
+nous ones. Diversity is equally crucial in view of demographic
+trends. Going forward, only those companies that embrace
+diversity will be able to remain attractive employers and be less
+affected by the shortage of skilled workers. In addition, a diverse
+workforce enables us to do an even better job of meeting our
+customers' specific needs and requirements. As far back as 2006
+we issued a Group Policy on Equal Opportunity and Diversity.
+In late 2016 E.ON along with the SE Works Council of E.ON SE
+renewed this commitment to diversity.
+5Adjusted for non-operating effects; for purposes of internal management control, adjusted EBIT includes the adjusted EBIT from the operations at Renewables classified as discontinued operations
+and deconsolidated in September 2019.
+In 2008 E.ON publicly affirmed its commitment to fairness and
+respect by signing the German Diversity Charter, which now
+has about 2,700 signatories. E.ON therefore belongs to a large
+network of companies committed to diversity, tolerance, fairness,
+and respect.
+Non-Core Business
+1,878
+1,893
+-1
+E.ON Group
+78,948
+43,302
++82
+¹Does not include board members, managing directors, or apprentices.
+²Includes E.ON Business Services.
++1-%
+In April 2018 the E.ON Management Board, the German Group
+Works Council, and the Group representation for severely dis-
+abled persons signed the Shared Understanding of Implementing
+Inclusion at E.ON, creating a strong foundation for integrating
+people with disabilities into our organization.
+In conjunction with the innogy takeover, nearly all of Renewables'
+employees were transferred to RWE.
+Geographic Profile
++86
+At year-end 2019, 40,612 employees, or 51 percent of all
+employees, were working outside Germany, significantly fewer
+than the 63 percent at year-end 2018.
+the year under review was the takeover of innogy.
+Employees by Country¹
+Dec. 31,
+2019
+Headcount
+Dec. 31,
+2018
+Dec. 31,
+2019
+FTE3
+Dec. 31,
+2018
+Germany
+United Kingdom
+Hungary
+Romania
+Czech Republic
+Netherlands
+Sweden
+The main reason for the substantial increase in our headcount in
+41,409
+The decline in the number of employees at Customer Solutions
+mainly reflects the aforementioned reassignment of employees to
+Energy Networks. Headcount was also reduced by restructuring
+projects. The acquisition of Coromatic in Sweden had a counter-
+vailing effect.
+Core business
+Our approach to promoting diversity is holistic, encompassing
+all dimensions of diversity. It ensures equal opportunity for all
+employees and fosters and harnesses diversity in an individual
+way.
+In 2019 we again implemented numerous measures to promote
+diversity at E.ON. An important purpose of these measures is to
+foster the career development of female managers. We set new,
+ambitious targets to increase the proportion of women in manage-
+ment positions. At the end of the appointment process that was
+part of the integration of innogy, we increased the proportion
+of women in management roles that report directly to the E.ON
+Management Board to 24 percent. By year-end 2026, we want
+the proportion of women in management positions to be the
+same-32 percent-as the proportion of women in our overall
+workforce was at year-end 2018. After the integration of innogy
+is completed, the specific targets for each unit will be reviewed
+and, if necessary, adjusted.
+77,070
+More information about E.ON's compliance with Germany's Law
+for the Equal Participation of Women and Men in Leadership
+Positions in the Private Sector and the Public Sector can be found
+in the Corporate Governance Declaration.
+Business Report
+38
+Workforce Figures
+At year-end 2019 the E.ON Group had 78,948 employees world-
+wide, substantially more (+82 percent) than at year-end 2018.
+E.ON also had 2,563 apprentices and 238 board members and
+managing directors worldwide.
+Energy Networks' headcount increased significantly relative
+to year-end 2018. This was mainly attributable to the reassign-
+ment of employees (primarily in the Czech Republic and Romania)
+from Customer Solutions to this segment. The filling of vacan-
+cies to expand the business (in Germany, predominantly with
+apprentices who had successfully completed their training) was
+another factor.
+Employees¹
+Headcount
+2019
+Energy Networks
+20,438
+Our units have had support mechanisms for female managers
+in place for a number of years. These mechanisms include mento-
+ring programs for female next-generation managers, coaching,
+training to prevent unconscious bias, the provision of daycare,
+and flexible work schedules. Increasing the percentage of women
+in our internal talent pool is a further prerequisite for raising,
+over the long term, their percentage in management and top
+executive positions.
+Customer Solutions
+December 31
+2018
+17,896
+-1
+2,414
+Corporate Functions/Other²
+-99
+1,374
+12
+2,447
+36,537
+innogy
++14
+-10
+19,692
+Renewables
+17,669
+0.9
+1,573
+6.6
+Renewables
+14
+19
+0.9
+0.7
+0.7
+Core business
+Corporate Functions/Other
+24
+2018
+8.4
+8.0
+818
+804
+2018
+2019
+2019
+Percentage of workforce
+Headcount
+innogy
+Customer Solutions
+2,416
+20
+856
+Corporate Functions/Other
+5.8
+risk and chance analysis and evaluation
+.
+•
+•
+.• systematic risk and chance identification
+Our risk management system, which is the basis for the risks
+and chances described in the next section, encompasses:
+Enterprise Risk Management ("ERM")
+management and monitoring of risks and chances by
+analyzing and evaluating countermeasures and preventive
+systems
+Note 30 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial instru-
+ments and hedging transactions. Note 31 describes the general
+principles of our risk management and applicable risk metrics
+for quantifying risks relating to commodities, credit, liquidity,
+interest rates, and currency translation.
+This category encompasses credit, interest-rate, currency, tax,
+and asset-management risks and chances. We use systematic
+risk management to monitor and control our interest-rate and
+currency risks and manage these risks using derivative and non-
+derivative financial instruments. Here, E.ON SE plays a central
+role by aggregating risk positions through intragroup transactions
+and hedging these risks in the market. Due to E.ON SE's inter-
+mediary role, its risk position is largely closed.
+Managing Finance and Treasury Risks
+We have comprehensive preventive measures in place to manage
+potential risks relating to acquisitions and investments. These
+measures include, in addition to the relevant company guidelines
+and manuals, comprehensive due diligence, legally binding con-
+tracts, a multi-stage approvals process, and shareholding and
+project controlling. Comprehensive post-acquisition projects also
+contribute to successful integration.
+Managing Strategic Risks
+In order to limit our exposure to commodity price risks, we con-
+duct systematic risk management. The key elements of our risk
+management are, in addition to binding Group-wide policies
+and a Group-wide reporting system, the use of quantitative key
+figures, the limitation of risks, and the strict separation of func-
+tions between departments. Furthermore, we utilize derivative
+financial instruments that are commonly used in the marketplace.
+These instruments are transacted with financial institutions,
+brokers, power exchanges, and third parties whose creditwor-
+thiness we monitor on an ongoing basis. Our local sales units
+and the remaining generation operations have set up local risk
+management under central governance standards to monitor
+these underlying commodity risks and to minimize them through
+hedging.
+We use a comprehensive sales-management system and inten-
+sive customer management to manage margin risks.
+Managing Market Risks
+6.2
+documentation and reporting.
+As required by law, our ERM's effectiveness is reviewed regularly
+by Internal Audit. In compliance with the provisions of Section 91,
+Paragraph 2, of the German Stock Corporation Act relating to
+the establishment of a risk-monitoring and early warning system,
+E.ON has a Risk Committee for the E.ON Group and for each of
+its business units. The Risk Committee's mission is to achieve a
+comprehensive view of our risk exposure at the Group and unit
+level and to actively manage risk exposure in line with our risk
+strategy.
+Our ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose book value is greater
+than €50 million. We take an inventory of our risks and chances
+at each quarterly balance-sheet date.
+Finance and treasury risks
+Strategic risks
+Market risks
+HSE, HR, and other
+Operational and IT risks
+Legal and regulatory risks
+Risk Category
+Risk Category
+45
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+following risk categories:
+Our IT-based system for reporting risks and chances has the
+Methodology
+Risks and Chances
+To promote uniform financial reporting Group-wide, we have in
+place a central, standardized system that enables effective and
+automated risk reporting. Company data are systematically col-
+lected, transparently processed, and made available for analysis
+both centrally and decentrally at the units.
+44
+Risk and Chances Report
+Should an accident occur despite the measures we take, we
+have a reasonable level of insurance coverage.
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+General Measures to Limit Risks
+The E.ON internal management information system identifies
+risks early so that steps can be taken to actively address them.
+Reporting by the Controlling, Finance, and Accounting depart-
+ments as well as Internal Audit reports are of particular impor-
+tance in early risk detection.
+The purpose of the internal monitoring system is to ensure the
+proper functioning of business processes. It consists of organi-
+zational preventive measures (such as policies and work
+instructions) and internal controls and audits (particularly by
+Internal Audit).
+sense.
+the ERM, which is a risk management system in the narrow
+preventive measures
+⋅
+•
+a management information system
+•
+an internal monitoring system
+Our risk management system in the broader sense has a total of
+four components:
+Scope
+43
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+We take the following general preventive measures to limit risks.
+Examples
+Managing Legal and Regulatory Risks
+We attempt to minimize the operational risks of legal proceedings
+and ongoing planning processes by managing them appropriately
+and by designing appropriate contracts beforehand.
+quality management, control, and assurance
+company guidelines as well as work and process instructions
+•
+•
+•
+•
+regular facility and network maintenance and inspection
+•
+further refinement of our production procedures, processes,
+and technologies
+systematic employee training, advanced training, and quali-
+fication programs for our employees
+•
+•
+The following are among the comprehensive measures we take
+to address such risks (also in conjunction with operational and
+IT risks):
+Managing Health, Safety, and Environmental ("HSE"), Human
+Resources ("HR"), and Other Risks
+Our IT systems are maintained and optimized by qualified E.ON
+Group experts, outside experts, and a wide range of technologi-
+cal security measures. In addition, the E.ON Group has in place
+a range of technological and organizational measures to counter
+the risk of unauthorized access to data, the misuse of data, and
+data loss.
+To limit operational and IT risks, we continually improve our
+network management and the optimal dispatch of our assets.
+At the same time, we are implementing operational and infra-
+structure improvements that will enhance the reliability of our
+generation assets and distribution networks, even under extraor-
+dinarily adverse conditions. In addition, we have factored the
+operational and financial effects of environmental risks into our
+emergency plan. They are part of a catalog of crisis and system-
+failure scenarios prepared for the Group by our Incident and
+Crisis Management team.
+Managing Operational and IT Risks
+We engage in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, we strive to conduct proper project
+management so as to identify early and minimize the risks
+attending our new-build projects.
+All risks and chances have an accountable member of the Man-
+agement Board, have a designated risk owner who remains
+operationally responsible for managing that risk/chance, and
+are identified in a dedicated bottom-up process.
+Policy and legal risks and chances, regulatory risks, risks from public consent processes
+Health, safety, and environmental risks and chances
+As with E.ON, innogy's business operations and use of financial
+instruments expose it to credit risks. In addition, its historical
+interrelationship with RWE continues to pose a major, albeit
+unlikely risk.
+The innogy Group's risk situation depends to a considerable
+degree on the economic and regulatory environment. Its sales
+business, for example, faces the risk of additional interventionist
+regulations and, like E.ON, a competitive environment that
+remains very intense. For the period of the medium-term plan,
+the network business is currently confronted with minimal reg-
+ulatory risks compared with the prior year relating to regulatory
+clarifications and to the disposal of innogy's stakes in its gas
+networks business in the Czech Republic and in Východoslovenská
+energetika Holding a.s. ("VSEH") in Slovakia.
+In its risk governance functions delegated by the Management
+Board, the Controlling & Risk Department bears primary respon-
+sible for the implementation, further development and coordi-
+nation of the innogy Group's risk management framework and
+strategy.
+The risk situation for the 2019 financial year encompasses
+innogy's existing portfolio, which consists of the business oper-
+ations of the network and sales businesses as well as corporate
+functions and internal services. Thanks to a comprehensive
+framework for risk management, innogy is able to identify risks
+and opportunities at an early stage and act accordingly. Conse-
+quently, this framework satisfies the requirements of the German
+Law on Corporate Control and Transparency ("KonTraG"). Initially,
+this framework will remain in place unchanged.
+innogy
+as well as pose a major risk. The rapid growth of renewables is
+also creating new risks for the network business. For example,
+insolvencies among renewables operators or feed-in tariffs unduly
+paid by grid operators lead to court or regulatory proceedings.
+47
+A comprehensive risk position drawn from innogy's individual
+business units will be presented for subsequent financial years.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+The operation of energy networks is subject to a large degree
+of government regulation. New laws and regulatory periods
+cause uncertainty for this business. In addition, matters related
+to Germany's Renewable Energy Sources Act, such as issues
+regarding solar energy, can cause temporary fluctuations in our
+cash flow and adjusted EBIT. This could create major chances
+Energy Networks
+The E.ON Group's operations subject it to certain risks relating to
+legal proceedings, ongoing planning processes, and regulatory
+changes. But these risks also relate, in particular, to legal actions
+and proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of the
+energy transition) an altered business climate in the power and
+gas business, alleged price-rigging, and anticompetitive practices.
+This could pose a major risk.
+Customer Solutions
+On December 6, 2016, Germany's Federal Constitutional Court
+in Karlsruhe ruled that the thirteenth amended version of the
+Atomic Energy Act ("the Act") is fundamentally constitutional.
+The Act's only unconstitutional elements are that certain NPP
+operators will be unable to produce their electricity allotment
+from 2002 and that it contains no mechanism for compensating
+operators for investments to extend NPP operating lifetimes.
+Lawmakers established a compensation mechanism in the six-
+teenth amended version of the Act. In addition, NPPs need to
+acquire residual power output rights in order to operate until
+their closure dates prescribed by law. These matters could yield
+major chances and major risks.
+PreussenElektra's business is substantially influenced by regu-
+lation. In general, regulation can result in risks for its remaining
+operating and dismantling activities. One example is the
+Fukushima nuclear accident. Policy measures taken in response
+to such events could have a direct impact on the further opera-
+tion of a nuclear power plant ("NPP") or trigger liabilities and
+significant payment obligations stemming from the solidarity
+obligation agreed on among German NPP operators. Further-
+more, new regulatory requirements, such as additional manda-
+tory safety measures or delays in dismantling, could lead to
+production outages and higher costs. In addition, there may be
+lawsuits that fundamentally challenge the operation of NPPs.
+Regulation can also require an increase in provisions for disman-
+tling. These factors could pose major risks for E.ON.
+Combined Group Management Report
+At the balance-sheet date, innogy's overall risk and chance
+position was major.
+Risks and Chances by Category
+E.ON's major risks and chances by risk category are described
+below. Also described are major risks and chances stemming
+from tail events as well as qualitative risks that would impact
+adjusted EBIT by more than €200 million. Risks and chances
+that would affect planned net income and/or cash flow by more
+than €200 million are included as well.
+E.ON's portfolio of physical assets, long-term contracts, and
+end-customer sales is exposed to uncertainty resulting from
+fluctuations in commodity prices. After the Uniper spinoff, E.ON
+established its own procurement organization for its sales busi-
+ness and ensured market access for the output of its remaining
+energy production in order to manage the remaining commodity
+risks accordingly.
+The demand for electric power and natural gas is seasonal, with
+our operations generally experiencing higher demand during
+the cold-weather months of October through March and lower
+demand during the warm-weather months of April through
+September. As a result of these seasonal patterns, our sales and
+results of operations are higher in the first and fourth quarters
+and lower in the second and third quarters. Sales and results of
+operations for all of our energy operations can be negatively
+affected by periods of unseasonably warm weather during the
+autumn and winter months. We expect seasonal and weather-
+related fluctuations in sales and results of operations to con-
+tinue. Periods of exceptionally cold weather-very low average
+temperatures or extreme daily lows-in the fall and winter
+months can have a positive impact owing to higher demand for
+electricity and natural gas.
+Our units operate in an international market environment that
+is characterized by general risks relating to the business cycle.
+In addition, the entry of new suppliers into the marketplace
+along with more aggressive tactics by existing market partici-
+pants and reputational risks have created a keener competitive
+environment for our electricity business in and outside Ger-
+many, which could reduce our margins. However, market devel-
+opments could also have a positive impact on our business.
+Such factors include wholesale and retail price developments,
+customer churn rates, and temporary volume effects in the net-
+work business. This results in a major risk position and a
+medium chance position in this category.
+Market Risk
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia
+and Bavaria. E.ON SE can be held responsible for damage. This
+could lead to major individual risks that we currently only evalu-
+ate qualitatively.
+Health and occupational safety are important aspects of our
+day-to-day business. Our operating activities can therefore pose
+risks in these areas and create social and environmental risks
+and chances. In addition, our operating business potentially
+faces risks resulting from human error and employee turnover.
+It is important that we act responsibly along our entire value
+chain and that we communicate consistently, enhance the dialog,
+and maintain good relationships with our key stakeholders. E.ON
+actively considers environmental, social, and corporate-gover-
+nance issues. These efforts support our business decisions and
+our public relations. Our objective is to minimize our reputational
+risks and garner public support so that we can continue to
+operate our business successfully. These matters do not result
+in a major risk or chance position.
+HSE, HR, and Other Risks
+We could also be subject to environmental liabilities associated
+with our power generation operations that could materially
+and adversely affect our business. In addition, new or amended
+environmental laws and regulations may result in increases in
+our costs.
+Technologically complex production facilities are used in the
+production and distribution of energy, resulting in major risks
+from procurement and logistics, construction, operations and
+maintenance of assets as well as general project risks. In the case
+of PreussenElektra, this also includes dismantling activities.
+Our operations in and outside Germany face major risks of a
+power failure, power-plant shutdown, and higher costs and
+additional investments resulting from unanticipated operational
+disruption or other problems. Operational failures or extended
+production stoppages of facilities or components of facilities as
+well as environmental damage could negatively impact our
+earnings, affect our cost situation, and/or result in the imposition
+of fines. In unlikely cases, this could lead to a high risk. Overall,
+it results in a medium risk position and a low chance position in
+this category. General project risks can include a delay in projects
+and increased capital requirements.
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology. This includes
+risks and chances arising from information security.
+Operational and IT Risks
+48
+Risk and Chances Report
+There
+may also be final risks from obligations arising from regu-
+latory requirements following the Uniper split. This risk category
+also includes major risks arising from possible litigation, fines,
+and claims, governance- and compliance-related issues as well
+as risks and chances related to contracts and permits. Changes
+to this environment can lead to considerable uncertainty with
+regard to planning and, under certain circumstances, to impair-
+ment charges but can also create chances. This results in a major
+risk position and a medium chance position.
+In the wake of the economic and financial crisis in many EU mem-
+ber states, interventionist policies and regulations have been
+adopted in recent years, such as additional taxes and additional
+reporting requirements (for example, EMIR, MAR, REMIT,
+MiFID2). The relevant agencies monitor compliance with these
+regulations closely. This leads to attendant risks for E.ON's
+operations. The same applies to price moratoriums, regulated
+price reductions, and changes to support schemes for renewables,
+which could pose risks to, as well as create opportunities for,
+E.ON's operations in the respective countries.
+The political, legal, and regulatory environment in which the
+E.ON Group does business is a source of risks, such as the
+continued uncertainty that Brexit poses for the collaboration
+between certain E.ON business units. This could confront E.ON
+with direct and indirect consequences that could lead to possible
+financial disadvantages. New risks-but also opportunities-arise
+from energy-policy decisions at the European and national level.
+Foremost among them are the European Commission's Green
+Deal presented at the end of 2019 and the German federal
+government's decision to phase out conventional, hard-coal- and
+lignite-fired power generation (the planned Coal Phaseout Law).
+The achievement of these objectives will require legal and regu-
+latory implementation measures that themselves would pose new
+risks for certain E.ON Group business operations.
+Legal and Regulatory Risks
+Risks and Chances by Segment
+PreussenElektra
+At the time this report was prepared, potentially adverse business
+effects of the outbreak of the coronavirus could not yet be suffi-
+ciently estimated. The possible implications of this matter are
+being analyzed on an ongoing basis. For more information, see
+Forecast Report.
+The E.ON Group has major risk positions in the following cate-
+gories: legal and regulatory risks and market risks. As a result,
+the aggregate risk position of E.ON SE as a Group is major. In
+other words, the E.ON Group's average annual adjusted EBIT
+risk ought not to exceed -€200 million to -€1 billion in 95 percent
+of all cases.
+46
+Risk and Chances Report
+€10 million ≤ x < €50 million
+€50 million ≤ x < €200 million
+€200 million ≤ x < €1 billion
+x ≥ €1 billion
+x < €10 million
+High
+Major
+Medium
+Moderate
+Low
+Impact Classes
+The last step is to assign, in accordance with the 5th and 95th
+percentiles, the aggregated risk distribution to impact classes-
+low, moderate, medium, major, and high-according to their
+quantitative impact on adjusted EBIT. The impact classes are
+shown in the table below.
+We use the 5th and 95th percentiles of this aggregated risk
+distribution as the worst case and best case, respectively. Statis-
+tically, this means that with this risk distribution there is a
+90-percent likelihood that the deviation from our current earn-
+ings plan for adjusted EBIT will remain within these extremes.
+This statistical distribution makes it possible for our IT-based
+risk management system to conduct a Monte Carlo simulation of
+these risks/chances. This yields an aggregated risk distribution
+that is quantified as the deviation from our current earnings
+plan for adjusted EBIT.
+For quantifiable risks and chances, we then evaluate the likeli-
+hood of occurrence and the potential loss or damage. In the
+commodity business, for example, commodity prices can rise
+or fall. This type of risk is modeled with a normal distribution.
+Modeling is supported by a Group-wide IT-based system.
+Extremely unlikely events-those whose likelihood of occurrence
+is 5 percent or less-are classified as tail events. Tail events are
+not included in the simulation described below.
+E.ON uses a multistep process to identify, evaluate, simulate,
+and classify risks and chances. Risks and chances are generally
+reported on the basis of objective evaluations. If this is not
+possible, we use internal estimates by experts. The evaluation
+measures a risk/chance's financial impact on our current earnings
+plan while factoring in risk-reducing countermeasures. The
+evaluation therefore reflects the net risk.
+Credit, interest-rate, foreign-currency, tax, and asset-management risks and chances
+Risks and chances from investments and disposals
+Risks and chances from the development of commodity prices and margins and from changes
+in market liquidity
+General Risk Situation
+IT and process risks and chances, risks and chances relating to the operation of generation
+assets, networks, and other facilities, new-build risks
+The table below shows the average annual aggregated risk
+position (aggregated risk distribution) across the time horizon of
+the medium-term plan for all quantifiable risks and chances
+(excluding tail events) for each risk category based on our most
+important financial key performance indicator, adjusted EBIT.
+Risk category
+Medium
+Low
+Medium
+Low
+Low
+Best case (95th percentile)
+Medium
+Medium
+Moderate
+Major
+Low
+Medium
+Worst case (5th percentile)
+Major
+Finance and treasury risks
+Strategic risks
+Market risks
+HSE, HR, and other
+Operational and IT risks
+Legal and regulatory risks
+Risk Category
+Our ERM is based on a centralized governance approach which
+defines standardized processes and tools covering the identifi-
+cation, evaluation, countermeasures, monitoring, and reporting
+of risks and chances. Overall governance is provided by Group
+Risk Management on behalf of the E.ON SE Risk Committee.
+We use a Group-wide credit risk management system to system-
+atically assess and monitor the creditworthiness of our busi-
+ness partners on the basis of Group-wide minimum standards.
+We manage our credit risk by taking appropriate measures,
+which include obtaining collateral and setting limits. The E.ON
+Group's Risk Committee is regularly informed about all credit
+risks. A further component of our risk management is a conser-
+vative investment strategy for financial funds and a broadly
+diversified portfolio.
+•
+100
+4.5
+5
+0.2
+3
+0.2
+21
+0.9
+3.2
+Energy Networks' investments will consist in particular of
+numerous individual investments to expand our networks,
+switching equipment, and metering and control technology
+as well as other investments to continue to ensure the reliable
+and uninterrupted transmission and distribution of electricity.
+Percentages
+71
+Total
+Non-Core Business
+Corporate Functions/Other
+Customer Solutions
+Energy Networks
+Cash-Effective Investments: 2020 Plan
+transparency on risk exposures in compliance with legal
+requirements including KonTraG, BilMoG, and BilReG.
+Non-Core Business
+€ in billions
+40
+Investments at Customer Solutions will go toward IT, metering
+Non-Core Business's investments will include investments
+to acquire residual power output rights. Those at Corporate
+Functions/Other will encompass investments in Group-wide
+IT infrastructure.
+Report of the Supervisory Board
+Strategy and Objectives
+Units and
+Departments
+Central Enterprise Risk Management
+Audit and Risk
+Committee
+Board
+E.ON SE
+Supervisory
+E.ON SE
+Management
+Board
+Group
+Bodies
+and upgrade projects, and integrated energy solutions. We will
+also invest in our heat business in Sweden, Germany, and the
+United Kingdom and in solutions for industrial and commercial
+customers.
+Committee
+Group
+Narrow Sense
+Enterprise Risk Management System in the
+Risk and Chances Report
+Risk and Chances Report
+There is currently a high degree of uncertainty regarding the
+global spread of the coronavirus and the resulting economic
+repercussions. At present time, this does yet not permit a suffi-
+ciently precise estimate of the impact on the forecast for the
+Company's business development in 2020. That said, the E.ON
+Group anticipates for 2020 that the coronavirus will have financial
+impact in all markets in which E.ON is active with correspond-
+ingly significant impact on E.ON's key performance indicators.
+Current analyses of individual markets of the Energy Networks
+and Customer Solutions segments indicate that volume effects
+from the demand for electricity and gas will be a critical driver
+(volume risks). The Customer Solutions segment in particular
+could also face other market price risks that, driven by volume
+risks, could possibly impact the procurement of electricity and
+gas. Furthermore, in a prolonged crisis a reduction in the credit-
+worthiness of customers and business partners could also
+become a risk in both segments. The short- and long-term
+effects on adjusted EBIT and other key performance indicators
+resulting from the spread of the coronavirus cannot currently
+be estimated and are therefore not included in the forecast.
+In addition, there is the matter of restructuring and successfully
+returning the loss-making U.K. sales business to profitability.
+Further developing E.ON's IT and digital agenda for efficient and
+technologically advanced support systems is another task.
+Furthermore, there is the need for concessions in the network
+business in Germany to be renewed. The daily work to achieve
+these objectives and accomplish these tasks will take place
+amid a challenging business environment characterized by low
+interest rates, asset sales resulting from the antitrust clearance,
+and keen competition for networks and customers.
+The E.ON Group's new setup, which now includes innogy, will be
+a dominant feature of the 2020 financial year. The integration
+of the enlarged E.ON Group is of particular importance. It is the
+prerequisite for developing the business, creating growth, and
+leveraging the promised synergies. E.ON will of course duly
+respect the interests of innogy's remaining minority shareholders.
+General Statement of E.ON's Future
+Development
+Risk
+Combined Group Management Report
+43
+2.2
+3.3 to 3.5
+0.5 to 0.7
+roughly -0.4
+0.3 to 0.5
+3.9 to 4.1
+We expect Energy Networks' 2020 adjusted EBIT to be signifi-
+cantly higher than in the prior year due to the takeover of innogy's
+network business in Germany, Poland, Hungary, and Croatia.
+The network business in Germany will continue to benefit from
+investments in its regulated asset base. The new regulatory
+period in Sweden will have an adverse impact on earnings.
+We anticipate that Customer Solutions' adjusted EBIT will be
+significantly above the prior-year level. The inclusion, for the
+first time, of innogy's customer solutions business-which has
+operations primarily in Germany, the United Kingdom, the
+Netherlands, Belgium, Hungary, and Poland-for the entire year
+will have a positive impact on earnings. The interventions of
+the U.K. Competition and Markets Authority will continue to
+have a negative effect on earnings.
+Substantially all of the Renewables segment was transferred to
+RWE in September 2019. As described, its remaining activities
+will be assigned to other segments from January 1, 2020, onward.
+There is therefore no forecast for 2020.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+2020 (forecast)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+We anticipate that adjusted EBIT at Corporate Functions/Other
+will be significantly below the prior-year figure, primarily because
+of the inclusion of innogy's corporate functions. By contrast, cost
+savings and synergy effects from combining E.ON and innogy's
+corporate functions will have a positive impact.
+We expect Non-Core Business's adjusted EBIT to be slightly
+above the prior-year level. We expect PreussenElektra's earnings
+to reflect, in particular, rising sales prices that will be partially
+counteracted by expenditures for residual power output rights.
+Anticipated Financial Situation
+Planned Funding Measures
+In addition to planned investments for 2020 and the dividend
+for 2019, in 2020 E.ON will make payments for bonds that
+have matured. We also expect to have increased funding needs
+due to the innogy acquisition. Over the course of the year, these
+payments will be funded with available liquid funds and debt.
+Dividend
+Pending the Supervisory Board's approval, the E.ON SE Manage-
+ment Board has decided on a dividend policy that foresees annual
+growth in the dividend per share of up to 5 percent through the
+dividend for the 2022 financial year. E.ON will aim for an annual
+increase in dividend per share after this as well.
+Planned Investments
+We plan to make cash-effective investments of €4.5 billion in
+2020. E.ON will continue its strategy aimed at delivering sus-
+tainable growth. Our capital allocation will of course continue
+to be selective and disciplined.
+41
+2.1
+¹Adjusted for non-operating effects.
+Non-Core Business
+E.ON Group
+2,456
+899
+6.0
+5.4
+Forecast Report
+40
+Forecast Report
+Business Environment
+E.ON Group
+Macroeconomic Situation
+Anticipated Earnings Situation
+Forecast Earnings Performance
+In line with our corporate strategy as well as the macroeconomic
+and industry-specific environment, we continue to address the
+challenges in our operating business. We invest systematically
+in our energy networks, focusing in particular on innovative
+digital solutions at all of our network companies. As for customer
+solutions, we want to become even more cost-efficient and
+expand our market share.
+In 2019 we successfully closed the innogy takeover. Our forecast
+for the E.ON Group and its segments therefore includes the
+innogy businesses that E.ON took over as part of a far-reaching
+transfer of business operations with RWE. From January 1, 2020,
+onward, innogy's operations will no longer be managed and
+disclosed as a separate segment but rather integrated into Energy
+Networks, Customer Solutions, and Corporate Functions/Other.
+innogy's network businesses will be assigned to Energy Networks.
+Its power and gas sales along with new customer solutions (such
+as eMobility services) will be reported at Customer Solutions.
+Corporate Functions/Other includes innogy's holding functions
+and internal services. After substantially all of the Renewables
+segment was transferred to RWE, its remaining businesses will
+be reported at Energy Networks in Germany, Customer Solutions
+in the United Kingdom, and Corporate Functions/Other.
+Against this backdrop, we expect the E.ON Group's 2020
+adjusted EBIT to be between €3.9 and €4.1 billion and its 2020
+adjusted net income to be between €1.7 and €1.9 billion, or
+€0.65 to €0.73 per share (based on an average of 2,607 million
+shares outstanding). In addition, we expect the E.ON Group to
+achieve a cash-conversion rate of roughly 95 percent on average
+for the 2020 to 2022 financial years (without factoring in the
+expenditures for the decommissioning of nuclear power stations).
+Our forecast by segment:
+Adjusted EBIT¹
+€ in billions
+Energy Networks
+Customer Solutions
+Current economic and financial policy developments point to a
+prolonged period of subdued global growth. Due to the ongoing
+political uncertainty and the resulting downside risks, the global
+economic downturn will continue. The forecast for global GDP
+growth for 2020-2021 is again below 3 percent. Substantial
+uncertainty about the nature of future trade relations between
+the EU and the United Kingdom, the continued risk of a further
+escalation of bilateral trade tensions between the United States
+and China, and tensions in Iran are sources of considerable con-
+cern. GDP growth in the euro zone will stagnate, whereas growth
+in the United States, China, and Japan will actually slow down.
+The OECD forecasts a slight acceleration in GDP growth only for
+India and Brazil.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Decision-Making
+99
+Apprenticeships
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 2,456 apprentices and
+work-study students in Germany at year-end 2019. This repre-
+sented 6 percent of E.ON's total workforce in Germany, higher
+than at the end of the prior year (5.4 percent).
+E.ON provides vocational training in more than 65 careers and
+also offers work-study programs in order to meet its own needs
+for skilled workers and to take targeted action to address the
+consequences of demographic change. In addition, E.ON offers
+young people the opportunity to receive training to qualify for
+an apprenticeship.
+Apprentices in Germany
+At year-end
+Energy Networks
+The turnover rate resulting from voluntary terminations averaged
+4.6 percent across the organization, slightly lower than in the
+prior year (4.8 percent).
+Customer
+Solutions
+Non-Core
+Business
+Corporate
+Functions
+Local Risk Committees
+Steer
+Govern
+and
+Consolidate
+Energy
+Networks
+A total of 8,520 employees, or 10 percent of all E.ON Group
+employees, were on a part-time schedule (prior year: 8 percent).
+Of these, 6,520, or 77 percent, were women.
+At year-end 2019 the average E.ON Group employee was about
+42 years old and had worked for us for 14 years.
+¹Includes E.ON Business Services.
+31
+20
+Corporate Functions/Other¹
+47
+49
+Core business
+33
+32
+Non-Core Business
+13
+13
+39
+E.ON Group
+33
+32
+Identify,
+Evaluate
+and
+Manage
+Renewables
+42
+Objective
+51 and older
+53
+50
+19
+20
+2018
+30
+2019
+Employees by Age
+Proportion of Female Employees
+31 to 50
+30 and younger
+At the end of 2019, 33 percent of our employees were women,
+slightly higher than at the end of 2018 (32 percent).
+Gender and Age Profile, Part-Time Staff
+Percentages at year-end
+Internal Audit
+28
+2019
+Our Enterprise Risk Management ("ERM") provides the man-
+agement of all units as well as the E.ON Group with a fair and
+realistic view of the risks and chances resulting from their
+planned business activities. It provides:
+• meaningful information about risks and chances to the
+business, thereby enabling the business to derive individual
+risks/chances as well as aggregate risk profiles within the
+time horizon of the medium-term plan (three years)
+34
+Percentages
+43
+44
+innogy
+21
+21
+Energy Networks
+2018
+Customer Solutions
+2018
+2019
+PreussenElektra
+2018
+2019
+Billion kWh
+52.2
+2018
+56.1
+58.0
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as generating
+capacity, power generation, and power sales volume.
+Non-Core Business
+Renewables' sales and adjusted EBIT declined by €158 million
+and €174 million, respectively.
+Sales and Adjusted EBIT
+This segment's material power generation and power sales
+volume are attributable to the operations transferred effective
+September 18, 2019. Power sales volume from January 1 to
+the time of the transfer amounted to 13.2 billion kWh (prior year:
+17.7 billion kWh). Owned generation totaled 10.9 billion kWh
+(prior year: 14.7 billion kWh). Power procurement amounted to
+2.3 billion kWh (prior year: 3 billion kWh).
+At year-end 2019 this segment had no material fully consolidated
+generating capacity or attributable generating capacity to report.
+Its fully consolidated generating capacity was 5,334 MW at
+year-end 2018; its attributable generating capacity, 5,742 MW.
+The Renewables segment significantly reflects the transfer of
+substantially all of its operations effective September 18, 2019,
+as part of the transaction with RWE.
+Renewables
+55
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+31.7
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+¹We harmonized E.ON and innogy's definitions of customer groups and adjusted the prior-year figures accordingly. Does not include innogy's gas sales.
+2Excludes E.ON Business Solutions.
+10.4
+135.1
+140.3
+Fourth quarter
+44.1
+40.8
+33.0
+43.4
+2019
+€ in millions
+Power Generation
+Renewables
+This segment's power procured (owned generation and purchases)
+of 32.5 billion kWh was significantly below the prior-year level.
+This is primarily attributable to the departure of Gundremmingen
+and Emsland nuclear power stations and the expiration of supply
+contracts. In addition, there was less need to purchase power to
+meet delivery obligation.
+Power Generation and Sales Volume
+28.4
+Fully Consolidated and Attributable Generating Capacity
+As part of the innogy takeover, E.ON's stakes in Gundremmingen
+and Emsland nuclear power stations were transferred to RWE
+(for more information, see Note 4 to the Consolidated Financial
+Statements). Consequently, PreussenElektra's fully consolidated
+and attributable generating capacity at year-end 2019 declined
+to 3,828 MW (prior year: 4,150 MW) and 3,319 MW (prior year:
+3,808 MW), respectively.
+40.8
+Fourth quarter
+44.1
+123.6
+124.7
+Wholesale market
+11.7
+4.6
+5.0
+5.8
+16.7
+Total
+51.1
+Sales
+The network business encompasses the distribution of power
+and gas in Germany, gas distribution in Croatia, and power dis-
+tribution in Poland and Hungary. The power and gas distribution
+business in Germany also includes the operations of innogy's
+fully consolidated regional utilities (including network opera-
+tions, power generation, water) but not their sales operations,
+which are reported separately; minority stakes (such as in
+municipal utilities in Germany); and activities related to broad-
+band expansion.
+1,888
+2018
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+421
+Adjusted EBIT
+756
+Adjusted EBITDA
+10,444
+417
+711
+2019
+9,528
+Adjusted EBITDA
+Adjusted EBIT
+Full year
+Sales
+Sales
+€ in millions
+Fourth quarter
+innogy
+The innogy segment recorded adjusted EBIT of €421 million from
+September 18 to December 31, 2019. The network business,
+primarily in Germany, was the principal source of earnings.
+The innogy segment's sales totaled €10,444 million from Sep-
+tember 18 to December 31, 2019, and resulted primarily from the
+sale of power and gas and from the power and gas distribution
+networks business.
+Sales and Adjusted EBIT
+The sales business encompasses energy retail activities, which,
+in addition to the sale of power and gas, include the provision of
+innovative, needs-oriented energy solutions. The innogy Group
+operates principally in Germany, the United Kingdom, the Nether-
+lands, Belgium, and Eastern Europe. innogy supplies a total of
+14.4 million customers with power and 4.7 million with gas.
+This segment consists in particular of the network and sales
+businesses as well as the corporate functions and internal ser-
+vices of the innogy Group, which E.ON took over in September
+2019. The businesses still to be transferred to RWE are not
+included here (see page 14).
+innogy
+2019
+Other's sales rose by €727 million, primarily because of higher
+sales prices and higher sales volume in Italy, the Czech Republic,
+and Hungary. Adjusted EBIT increased significantly year on year,
+in part because of an improved gas margin in Romania and
+higher sales volume in Italy.
+Total
+United Kingdom
+2019
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+53
+Power and Gas Sales Volume
+This segment's power and gas sales rose by 0.5 billion kWh
+and 5.2 billion kWh, respectively.
+E.ON's sales business in Germany increased its power sales by
+8 percent to 41 billion kWh. Power sales to residential and small
+and medium enterprise ("SME") customers were at the prior-
+year level, whereas power sales to industrial and commercial
+("I&C") customers were significantly higher thanks to successful
+customer acquisition. Power sales to the wholesale market
+declined owing to lower sales volume on already-contracted
+deliveries to some Uniper wholesale customers relative to 2018.
+Gas sales of 43.4 billion kWh were significantly (32 percent)
+above the prior-year level. This is partially attributable to the
+acquisition of new residential, SME, and I&C customers. The
+optimization of our procurement portfolio led to a significant
+increase in gas sales to the wholesale market.
+Power sales in the United Kingdom declined by 3.9 billion kWh.
+Lower consumption and a decline in customer numbers were
+the principal negative factors for residential and SME custom-
+ers. Power sales to I&C customers declined owing likewise to
+lower average offtake per customer. Gas sales decreased by
+3.3 billion kWh. The decline in gas sales to residential and SME
+customers resulted mainly from weather factors. This was par-
+tially offset by a slight increase in gas sales to I&C customers due
+to a somewhat larger customer base.
+Power sales at the Other unit (Sweden, Hungary, the Czech
+Republic, Romania, and Italy) were at the prior-year level for the
+unit as a whole, for each customer group, and for the wholesale
+market. Higher demand from I&C customers in the Czech
+Republic and Italy was the primary factor behind the increase in
+power sales. This was partially offset by the loss of customers
+in Sweden. The optimization of our procurement portfolio in the
+Czech Republic led to a significant increase in power sales to
+the wholesale market. This was offset, in part, by a decline in
+Sweden. Other's gas sales were at the prior-year level for the
+unit as a whole and for each customer group. A reduction in gas
+sales to I&C customers resulting from the sale of an equity
+interest in the second quarter of 2019 in Sweden and the loss
+of customers in Romania was partially offset by successful
+customer acquisition in Hungary. Gas sales to the wholesale
+market declined owing in part to a reduction in demand spikes
+in Romania relative to the prior year.
+Customer Numbers
+Other
+This segment had about 20.9 million customers at year-end
+2019, fewer than the prior-year figure of 21 million. The number
+of customers in the United Kingdom declined from 6.6 to
+6.1 million, with losses among power as well as gas customers.
+In Germany the customer base increased from 6 million in 2018
+to around 6.2 million in 2019; of these, 5.2 million were power
+customers and 0.9 million gas customers (prior year: 5.1 million
+power customers, 0.9 million gas customers). This segment had
+a total of 8.6 million customers in the other countries where it
+operates (prior year: 8.5 million).
+page 54 for the innogy segment's customer numbers.
+Sales and Adjusted EBIT
+Customer Solutions' 2019 sales rose by €1,292 million. Its
+adjusted EBIT decreased by €100 million.
+Sales in Germany rose primarily because of higher power and
+gas sales volume. As forecast during the year, adjusted EBIT
+was at the prior-year level.
+Business Segments
+Customer Solutions
+54
+€ in millions
+2019
+Germany Sales
+2018
+See
+Sales in the United Kingdom were at the prior-year level.
+Adjusted EBIT was significantly lower, primarily because of the
+regulatory price cap that took effect in 2019 and a decline in
+customer numbers.
+413
+313
+18
+60
+-1
+-40
+36
+69
+Adjusted EBIT
+134
+199
+63
+89
+124
+-3
+45
+78
+Adjusted EBITDA
+6,286
+6,591
+2,112
+2,246
+2,286
+2,307
+26
+53
+Full year
+Sales
+111
+143
+142
+11
+160
+159
+724
+21,987
+23,279
+684
+294
+353
+237
+133
+193
+198
+7,556
+8,283
+7,633
+7,683
+6,798
+7,313
+Adjusted EBIT
+Adjusted EBITDA
+2,038
+2018
+4.2
+294
+543
+556
+74
+-17
+Customer groups
+617
+539
+Adjusted EBITDA
+Adjusted EBIT
+399
+74
+-17
+366
+382
+Internal Control System
+for the Accounting Process
+Report of the Supervisory Board
+Strategy and Objectives
+292
+Combined Group Management Report
+1,370
+1,370
+120
+120
+4
+23
+124
+143
+Adjusted EBIT
+1,174
+36
+4
+23
+40
+68
+Full year
+Sales
+1,174
+45
+Adjusted EBITDA
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 289,
+Paragraph 4, and Section 315, Paragraph 4 of
+the German Commercial Code on the Internal
+Control System for the Accounting Process
+Scope
+Each year we conduct a process using qualitative criteria and
+quantitative materiality metrics to define which E.ON units
+must document and evaluate their financial-reporting-related
+processes and controls in a central documentation system.
+Central Documentation System
+The E.ON units to which the ICS applies use a central documen-
+tation system to document key controls. The system defines the
+scope, detailed documentation requirements, the assessment
+requirements for process owners, and the final Sign-Off process.
+Assessment
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment
+of the design and the operational effectiveness of the processes
+as well as the controls embedded in these processes.
+Tests Performed by Internal Audit
+The Catalog of ICS Principles, which is another key component
+of our ICS, defines the minimum requirements for the system
+to function. These principles encompass overarching principles
+for matters such as authorization, the separation of functions,
+and master data management as well as specific requirements
+for managing risks in a range of issue areas and processes, such
+as contractor management, project management, audit, and
+transactions.
+The management of E.ON units relies on the assessment per-
+formed by the process owners and on the testing of the ICS
+performed by Internal Audit. These tests are a key part of the
+process. Using a risk-oriented audit plan, Internal Audit tests
+the E.ON Group's ICS and identifies potential deficiencies (issues).
+On the basis of its own evaluation and the results of tests per-
+formed by Internal Audit, an E.ON unit's management carries out
+the final Sign-Off.
+The final step of the internal evaluation process is the submission
+of a formal written declaration called a Sign-Off confirming the
+ICS's effectiveness. The Sign-Off process is conducted at all
+levels of the Group before E.ON SE, as the final step, conducts it
+for the Group as a whole. The Chairman of the E.ON SE Manage-
+ment Board and the Chief Financial Officer make the final Sign-
+Off for the E.ON Group.
+Internal Audit regularly informs the E.ON SE Supervisory Board's
+Audit and Risk Committee about the ICS for financial reporting
+and any significant issue areas it identifies in the E.ON Group's
+various processes.
+General IT Controls
+A functionally managed digital organization and third-party
+service providers provide digital and IT services for the E.ON
+Group. IT systems used for accounting are subject to provisions
+of the internal control system, which encompasses the general
+IT controls. These include access controls, the separation of
+functions, processing controls, measures to prevent the inten-
+tional and unintentional falsification of the programs, data,
+and documents as well as controls related to contractor manage-
+ment. The documentation of the general IT controls is stored
+in our documentation system.
+innogy's Internal Control System
+The set of rules for the design and monitoring of innogy SE's ICS
+remains in effect without any changes and has so far not been
+adapted to E.ON's ICS. The innogy SE CEO and CFO issued a
+formal written declaration (Sign-Off) for the 2019 Consolidated
+Financial Statements and their responsibility for, and the effec-
+tiveness of, the innogy Group's ICS.
+Residential and SME
+Sign-Off Process
+57
+Our ICS is based on the globally recognized COSO framework,
+in the version published in May 2013 (COSO: The Committee of
+Sponsoring Organizations of the Treadway Commission). The
+Central Risk Catalog (ICS Model), which encompasses company-
+and industry-specific aspects, defines possible risks for accounting
+(financial reporting) in the functional areas of our units and thus
+serves as a check list and provides guidance for the establish-
+ment, documentation, and implementation of internal controls.
+and evaluating internal controls; a Catalog of ICS Principles; a
+description of the test activities of our Internal Audit division; and
+a description of the final Sign-Off process. We believe that com-
+pliance with these rules provides sufficient certainty to prevent
+error or fraud from resulting in material misrepresentations in the
+Financial Statements, the Combined Group Management Report,
+the Half-Year Financial Report, and the Quarterly Statements.
+General Principles
+We apply Section 315e, Paragraph 1, of the German Commercial
+Code and prepare our Consolidated Financial Statements in
+accordance with International Financial Reporting Standards
+("IFRS") and the interpretations of the IFRS Interpretations
+Committee that were adopted by the European Commission for
+use in the EU as of the end of the fiscal year and whose appli-
+cation was mandatory as of the balance-sheet date (see Note 1
+to the Consolidated Financial Statements). Energy Networks
+(Germany, Sweden, and East-Central Europe/Turkey), Customer
+Solutions (Germany, United Kingdom, Other), innogy, Renewables,
+Non-Core Business, and Corporate Functions/Other are our
+IFRS reportable segments.
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the German
+Energy Act.
+We prepare a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+Accounting Process
+All companies included in the Consolidated Financial Statements
+must comply with our uniform Accounting and Reporting Guide-
+lines for the Annual Consolidated Financial Statements and
+the Interim Consolidated Financial Statements. These guidelines
+describe applicable IFRS accounting and valuation principles.
+They also explain accounting principles typical in the E.ON Group,
+such as those for provisions for nuclear-waste management,
+the treatment of financial instruments, and the treatment of
+regulatory obligations. We continually analyze amendments
+to laws, new or amended accounting standards, and other pro-
+nouncements for their relevance to, and consequences for, our
+Consolidated Financial Statements and, if necessary, update our
+guidelines and systems accordingly.
+Corporate headquarters defines and oversees the roles and
+responsibilities of various Group entities in the preparation of
+E.ON SE's Financial Statements and the Consolidated Financial
+Statements. These roles and responsibilities are described in a
+Group Policy document.
+COSO Framework
+E.ON Group companies are responsible for preparing their
+financial statements in a proper and timely manner. They receive
+substantial support from Business Service Centers in Regensburg,
+Germany; Cluj, Romania; and Kraków, Poland. E.ON SE combines
+the financial statements of subsidiaries belonging to its scope
+of consolidation into its Consolidated Financial Statements using
+standard consolidation software. Group Accounting is responsible
+for conducting the consolidation and for monitoring adherence
+to the guidelines for scheduling, processes, and contents. Moni-
+toring of system-based automated controls is supplemented by
+manual checks.
+E.ON SE's Financial Statements are prepared with SAP software.
+The accounting and preparation processes are divided into
+discrete functional steps. Bookkeeping processes are handled
+by our Business Service Centers: Cluj has responsibility for pro-
+cesses relating to subsidiary ledgers and several bank activities,
+Regensburg for those relating to the general ledgers. Automated
+or manual controls are integrated into each step. Defined proce-
+dures ensure that all transactions and the preparation of E.ON SE's
+Financial Statements are recorded, processed, assigned on an
+accrual basis, and documented in a complete, timely, and accu-
+rate manner. Relevant data from E.ON SE's Financial Statements
+are, if necessary, adjusted to conform with IFRS and then trans-
+ferred to the consolidation software system using SAP-supported
+transfer technology.
+The following explanations about our internal control system
+("ICS") and our general IT controls apply equally to the Conso-
+lidated Financial Statements and to E.ON SE's Financial State-
+ments. Pages 58 to 59 contain information about the innogy
+Group's internal control system, which has not yet been adapted
+to E.ON's internal control system.
+Internal Control System
+Internal controls are an integral part of our accounting processes.
+Guidelines define uniform financial-reporting requirements and
+procedures for the entire E.ON Group. These guidelines encom-
+pass a definition of the guidelines' scope of application; a Risk
+Catalog (ICS Model); standards for establishing, documenting,
+Internal Control System
+for the Accounting Process
+58
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information relevant for accounting
+is compiled. Furthermore, dedicated quality-control processes
+are in place for all relevant departments to discuss and ensure
+the completeness of relevant information on a regular basis.
+411
+307
+411
+Sales
+Adjusted EBITDA
+1,596
+1,754
+Total power procurement
+7.9
+10.6
+1.7
+628
+Station use, line loss, etc.
+347
+521
+Power sales
+7.9
+10.6
+Full year
+861
+The reduction in sales and adjusted EBIT resulted from the absence
+of operations due to their transfer effective September 18, 2019,
+as part of the transaction with RWE.
+0.2
+Full year
+541
+Fourth quarter
+Adjusted EBITDA
+22
+327
+Owned generation
+7.7
+Third parties
+8.5
+19
+238
+Purchases
+0.2
+2.1
+Jointly owned power plants
+0.4
+Adjusted EBIT
+Owned generation
+30.1
+31.2
+Adjusted EBIT in 2019 of €366 million was slightly below the
+prior-year figure of €382 million. PreussenElektra's adjusted
+EBIT declined owing to an increase in depreciation charges and
+the transfer of minority stakes in nuclear power stations. These
+factors were not offset by higher sales prices.
+By contrast, adjusted EBIT at the generation business in Turkey
+improved, principally because its hydroelectric stations consid-
+erably increased their output relative to the prior year.
+Non-Core Business
+€ in millions
+PreussenElektra
+Generation/Turkey
+Total
+PreussenElektra's sales were €196 million below the prior-year
+figure, mainly because of the expiration of supply contracts and
+the aforementioned transfer of minority stakes in nuclear power
+stations to RWE.
+2019
+2019
+2018
+2019
+2018
+Fourth quarter
+Sales
+307
+2018
+Sales and Adjusted EBIT
+56
+Business Segments
+Purchases
+2.5
+8.1
+Jointly owned power plants
+Third parties
+0.9
+1.4
+1.6
+6.7
+Total power procurement
+32.6
+39.3
+Station use, line loss, etc.
+-0.1
+-0.1
+Power sales
+32.5
+39.2
+Sales
+1.7
+Adjusted EBIT
+1.7
+2018
+2019
+2018
+Fourth quarter
+Sales
+1,617
+1,683
+276
+260
+2019
+421
+2,314
+2,355
+Adjusted EBITDA
+414
+306
+183
+172
+153
+154
+412
+750
+2018
+2018
+The length of E.ON's power system in Sweden was roughly
+138,000 kilometers (prior year: 137,900 kilometers). The num-
+ber of connection points in the power distribution system was
+unchanged at 1 million. The gas distribution network was sold
+in 2018.
+System length in East-Central Europe/Turkey-about 232,000
+kilometers for power and about 46,000 kilometers for gas-
+was almost unchanged from the prior year, as were the roughly
+4.8 million connection points for power and the roughly
+1.3 million for
+gas.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+51
+Sales and Adjusted EBIT
+Energy Networks' 2019 sales were €101 million above the prior-
+year figure. Adjusted EBIT rose by €44 million.
+Sales in Germany of €6.3 billion were at the prior-year level.
+Adjusted EBIT increased by €26 million to €921 million, primarily
+because of the expansion of the regulated asset base. By con-
+trast, the non-recurrence of positive one-off items recorded in
+the prior year and a reduction in the allowed return on equity
+coinciding with the beginning of the third regulatory period for
+power led to a reduction in adjusted EBIT.
+2019
+Sales in Sweden of €1 billion were slightly above the prior-year
+level. Higher power network fees led to an increase in sales,
+whereas the sale of the gas distribution business led to a decline.
+Sales in East-Central Europe/Turkey were at the prior-year level.
+Adjusted EBIT declined by 5 percent year on year to €428 million.
+The reasons include a narrower gross margin in the gas business
+and higher costs in Romania. An example of the latter is the sales
+tax instituted in 2019, which is ultimately refunded through
+network fees but only after a delay.
+Energy Networks
+East-Central Europe/
+Germany
+Sweden
+Turkey
+Total
+€ in millions
+2019
+Currency-translation effects constituted another adverse factor.
+Adjusted EBIT was higher, in particular because of an improved
+gross margin in the power business. This was partially offset by
+a number of factors, including the aforementioned sale of the gas
+distribution business and adverse currency-translation effects.
+0.7 million connection points, essentially unchanged from 2018.
+632
+228
+2,924
+2,819
+Adjusted EBIT
+921
+895
+539
+498
+428
+451
+683
+1,888
+Business Segments
+Customer Solutions
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as power and
+gas sales volume and customer numbers.
+Power Sales¹
+52
+Germany Sales
+United Kingdom
+Other²
+Total
+1,844
+Adjusted EBIT
+667
+692
+140
+145
+135
+90
+97
+463
+372
+Full year
+Sales
+648
+6,263
+1,024
+989
+1,583
+1,537
+8,870
+8,769
+Adjusted EBITDA
+1,565
+1,488
+6,243
+E.ON's power system in Germany was about 351,000 kilometers
+long, roughly the same as in 2018. As in the prior year, at year-
+end it had about 5.8 million connection points for power. E.ON'S
+gas system was around 52,000 kilometers long and had
+System Length and Connections
+Power passthrough in Sweden was slightly below the prior-year
+level owing to weather factors. There was no gas passthrough
+because of the sale of the gas distribution network in April 2018.
+50
+East-Central Europe/
+Germany
+Sweden
+Turkey
+Total
+2019
+2018
+2019
+50
+2018
+2018
+2019
+2018
+Billion kWh
+Fourth quarter
+Power
+26.9
+27.8
+9.8
+2019
+10.1
+Energy Passthrough
+Energy Networks
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+49
+Strategic Risks
+Our business strategy involves acquisitions and investments in
+our core business as well as disposals. This strategy depends in
+part on our ability to successfully identify, acquire, and integrate
+companies that enhance, on acceptable terms, our energy busi-
+ness. In order to obtain the necessary approvals for acquisitions,
+we may be required to divest other parts of our business or to
+make concessions or undertakings that affect our business. In
+addition, there can be no assurance that we will be able to achieve
+the returns we expect from any acquisition or investment. It
+is also possible that we will not be able to realize our strategic
+ambition of enlarging our investment pipeline and that signifi-
+cant amounts of capital could be used for other opportunities.
+Furthermore, investments and acquisitions in new geographic
+areas or lines of business require us to become familiar with new
+sales markets and competitors and to address the attending
+business risks.
+In the case of planned disposals, E.ON faces the risk of dispos-
+als not taking place or being delayed and the risk that E.ON
+receives lower-than-anticipated disposal proceeds. In addition,
+after transactions close we could face major liability risks
+resulting from contractual obligations.
+The overall risk and chance position in this category was not
+major at the balance-sheet date.
+Finance and Treasury Risks
+Below we report on a number of important non-financial key
+performance indicators for this segment, such as power and
+gas passthrough, system length, and number of connections.
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results from
+non-delivery or partial delivery by a counterparty of the agreed
+consideration for services rendered, from total or partial failure
+to make payments owed on existing accounts receivable, and
+from replacement risks in open transactions. For example, E.ON's
+historical connection with Uniper continues to pose a major, albeit
+unlikely, risk. In addition, in unlikely cases joint and several lia-
+bility for jointly operated power plants could lead to a major risk.
+effects when assets/liabilities and income/expenses of E.ON
+companies outside the euro zone are translated into euros and
+entered into our Consolidated Financial Statements. Positive
+developments in foreign-currency rates can also create chances
+for our operating business.
+E.ON faces earnings risks from financial liabilities and interest-
+rate derivatives that are based on variable interest rates and
+from asset-retirement obligations.
+In addition, the price changes and other uncertainty relating to
+the current and non-current investments E.ON makes to cover
+its non-current obligations (particularly pension and asset-
+retirement obligations) could, in individual cases, be major.
+Declining or rising discount rates could lead to increased or
+reduced provisions for pensions and asset-retirement obliga-
+tions, including non-current liabilities. This can create a high
+risk for E.ON.
+In principle, E.ON could also encounter tax risks and chances;
+in one case, the chance could be high.
+This category's overall risk and chance position is not major.
+Management Board's Evaluation of the Risk
+and Chances Situation
+The overall risk and chances situation of the E.ON Group's oper-
+ating business at year-end 2019 remained nearly unchanged
+relative to year-end 2018. Although the average annual risk for
+the E.ON Group's adjusted EBIT is classified as major and despite
+the expansion of its risk and chance position through the innogy
+transaction, from today's perspective we do not perceive any
+risk profile that could threaten the existence of the E.ON Group
+or individual segments.
+Business Segments
+Business Segments
+E.ON's international business operations expose it to risks from
+currency fluctuation. One form of this risk is transaction risk,
+which arises when payments are made in a currency other than
+E.ON's functional currency. Another form of risk is translation
+risk, which arises when currency fluctuations lead to accounting
+9.9
+10.0
+46.6
+178.1
+181.9
+Line loss, station use, etc.
+3.8
+3.8
+1.1
+1.1
+2.6
+2.6
+37.9
+7.5
+89.6
+89.4
+1.5
+44.2
+44.5
+133.8
+135.4
+Power and Gas Passthrough
+In 2019 power and gas passthrough of the segment as a whole,
+in Germany, and in East-Central Europe/Turkey was at the prior-
+year level.
+Gas
+38.5
+37.1
+35.5
+47.9
+Line loss, station use, etc.
+1.0
+1.1
+0.3
+0.3
+0.7
+0.6
+2.0
+2.0
+Gas
+28.1
+26.7
+14.1
+15.7
+42.2
+42.4
+Full year
+Power
+104.1
+106.9
+2019
+2018
+7.5
+2018
+Residential and SME
+6.2
+5.9
+10.9
+11.7
+9.1
+9.9
+26.2
+27.5
+Fourth quarter
+I&C
+3.5
+2.9
+2.3
+5.6
+6.3
+12.7
+12.1
+Sales partners
+0.6
+4.2
+0.7
+Billion kWh
+2019
+Total
+41.0
+38.1
+28.4
+32.3
+59.2
+57.7
+128.6
+128.1
+2018
+¹We harmonized E.ON and innogy's definitions of customer groups and adjusted the prior-year figures accordingly. Does not include innogy's power sales.
+2Excludes E.ON Business Solutions.
+Germany Sales
+2019
+2018
+2019
+United Kingdom
+2018
+Other²
+Total
+2019
+2018
+Gas Sales¹
+0.6
+0.7
+Customer groups
+18.2
+17.3
+31.8
+35.9
+27.6
+28.2
+77.6
+81.4
+I&C
+Residential and SME
+13.5
+9.0
+8.2
+21.9
+22.3
+44.4
+41.6
+Sales partners
+1.6
+2019
+11.1
+Full year
+43.1
+46.5
+10.4
+9.4
+14.0
+15.3
+16.9
+39.5
+40.3
+Wholesale market
+4.8
+1.2
+2.2
+1.6
+7.0
+2.8
+Total
+15.2
+10.6
+13.8
+14.0
+17.5
+18.5
+22.8
+22.3
+13.8
+9.2
+0.2
+0.2
+0.2
+Customer groups
+8.0
+6.8
+7.3
+7.8
+13.0
+0.2
+12.5
+27.1
+Wholesale market
+3.0
+3.5
+0.2
+0.2
+2.1
+2.6
+5.3
+28.3
+Sales partners
+13.6
+6.3
+2019
+8.9
+2018
+2019
+2018
+Billion kWh
+Fourth quarter
+1.6
+4.3
+4.2
+4.7
+6.1
+6.0
+14.5
+15.0
+I&C
+3.8
+2.5
+3.1
+3.1
+6.7
+6.3
+Total
+11.9
+10.3
+49.5
+Sales partners
+0.7
+0.7
+0.7
+0.7
+Customer groups
+28.8
+27.5
+52.2
+31.4
+48.8
+106.3
+105.3
+Wholesale market
+12.2
+13.0
+11.0
+0.9
+0.9
+50.0
+25.6
+25.1
+Residential and SME
+26.4
+8.0
+15.1
+15.1
+33.6
+33.4
+Full year
+7.5
+15.0
+14.9
+15.5
+17.7
+22.9
+22.5
+53.4
+55.1
+I&C
+13.8
+10.2
+12.0
+13.7
+Clementi, Erich
+Supervisory Board
+Executive
+Committee
+Kley, Dr. Karl-Ludwig
+Fröhlich, Klaus
+65
+and Its Committees
+Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Supervisory Board member
+Audit and Risk
+Committee
+1/1 (guest)
+Committee¹
+Nomination
+Committee
+5/6
+8/8
+0/0
+6/6
+6/6
+8/8
+0/0
+Dybeck Happe, Carolina
+Combined Group Management Report
+Innovation and
+Sustainablility
+Report of the Supervisory Board
+Strategy and Objectives
+The Management Board reports to the Supervisory Board on
+a regular, timely, and comprehensive basis on all relevant issues
+of strategy, planning, business development, risk situation,
+risk management, and compliance. It also submits the Group's
+investment, finance, and personnel plan for the next financial
+year as well as the medium-term plan to the Supervisory Board,
+generally at the last meeting of each financial year.
+The members of the E.ON SE Supervisory Board fulfill these
+requirements. Pursuant to the AktG, at least one member of the
+Supervisory Board must have expertise in preparing or auditing
+financial statements. The Supervisory Board believes that, in
+particular, Andreas Schmitz meets this requirement. The Super-
+visory Board believes that its members in their entirety are
+familiar with the sector in which the Company operates.
+Description of the Functioning of the Management Board and
+Supervisory Board and of the Composition and Functioning of
+Their Committees
+4/4
+Compliance-lawful, rule-abiding behavior-guides our actions.
+The basis for this is the Code of Conduct established by the
+Management Board. It emphasizes that all employees must
+comply with laws and regulations and with company policies.
+These relate to dealing with business partners, third parties, and
+government institutions (particularly with regard to antitrust
+law), the granting and accepting of benefits (anti-corruption), and
+the selection of suppliers and service providers. Other matters
+addressed include human rights and the handling of company
+information, property, and resources. The policies and procedures
+of our compliance organization ensure the investigation, evalu-
+ation, cessation, and punishment of reported violations by the
+appropriate Compliance Officers and the E.ON Group's Chief Com-
+pliance Officer. Violations of the Code of Conduct can also be
+reported anonymously (for example, by means of a whistleblower
+report). The Code of Conduct is published on www.eon.com.
+Management Board
+The E.ON SE Management Board manages the Company's
+businesses, with all its members bearing joint responsibility for
+its decisions. It establishes the Company's objectives, sets its
+fundamental strategic direction, and is responsible for corporate
+policy and Group organization.
+In 2019 the Management Board consisted of five members. It
+had one Chairman. No Management Board member has more
+than three supervisory board memberships in listed non-Group
+companies or on the supervisory bodies of non-Group companies
+that require a similar commitment. Someone who has reached
+the general retirement age should not be a member of the Man-
+agement Board. The Management Board has in place policies
+and procedures for the business it conducts and, in consultation
+with the Supervisory Board, has assigned areas of responsibility
+to its members.
+The Chairman of the Management Board informs, without undue
+delay, the Chairman of the Supervisory Board of important events
+that are of fundamental significance in assessing the Company's
+situation, development, and management and of any defects that
+have arisen in the Company's monitoring systems. Transactions
+and measures requiring the Supervisory Board's approval are also
+submitted to the Supervisory Board in a timely manner.
+Members of the Management Board are also required to promptly
+report conflicts of interest to the Executive Committee of the
+Supervisory Board and to inform the other members of the Man-
+agement Board. Members of the Management Board may only
+assume other corporate positions, particularly appointments
+to the supervisory boards of non-Group companies, with the
+consent of the Executive Committee of the Supervisory Board.
+There were no conflicts of interest involving members of the
+E.ON SE Management Board in the year under review. Dr.-Ing.
+Leonhard Birnbaum is also a member of the innogy SE Manage-
+ment Board. After his appointment as a member of the innogy SE
+Management Board on October 10, 2019, Dr.-Ing. Birnbaum no
+longer participated in the adoption of resolutions or the other gov-
+ernance matters on the E.ON SE Management Board that posed
+a potential conflict of interest between E.ON SE and innogy SE.
+Corporate Governance Report
+64
+Any material transactions between the Company and members
+of the Management Board, their relatives, or entities with which
+they have close personal ties require the consent of the Executive
+Committee of the Supervisory Board. No such transactions took
+place in the reporting period.
+The Supervisory Board oversees the Company's management
+and advises the Management Board on an ongoing basis. The
+Management Board requires the Supervisory Board's prior
+approval for significant transactions and measures, such as the
+Group's investment, finance, and personnel plans; the acquisition
+or sale of companies, equity interests, or parts of companies
+whose fair value or, in the absence of a fair value, whose book
+value exceeds €300 million; financing measures that exceed
+€1 billion and have not been covered by Supervisory Board
+resolutions regarding finance plans; and the conclusion, amend-
+ment, or termination of affiliation agreements. The Supervisory
+Board examines the Financial Statements of E.ON SE, the Man-
+agement Report, and the proposal for profit appropriation and,
+on the basis of the Audit and Risk Committee's preliminary
+review, the Consolidated Financial Statements and the Separate
+Combined Non-Financial Report. The Supervisory Board provides
+to the Annual Shareholders Meeting a written report on the
+results of this examination.
+The Management Board has no board committees but has
+established a number of committees that support it in the
+fulfillment of its tasks. The members of these committees are
+senior representatives of various departments of E.ON SE
+whose experience, responsibilities, and expertise make them
+particularly suited for their committee's tasks. Among these
+committees are the following:
+A Risk Committee ensures the correct application and implemen-
+tation of the legal requirements of Section 91 of the German
+Stock Corporation Act (known by its German abbreviation, "AktG").
+This committee monitors the E.ON Group's risk situation and
+its risk-bearing capacity and devotes particular attention to
+the early identification of developments that could potentially
+threaten the Company's continued existence. In this context,
+the Risk Committee also deals with risk-mitigation strategies
+(including hedging strategies). In collaboration with relevant
+departments, the committee ensures and refines the implemen-
+tation of, and compliance with, company policies regarding
+commodity risks, credit risks, and enterprise risk management.
+Supervisory Board
+To ensure that, after the acquisition of the majority of the shares
+of innogy SE, innogy's employees are represented without delay
+on the Supervisory Board of E.ON SE as the Group's parent com-
+pany, a resolution was adopted at the 2019 Annual Shareholders
+Meeting to enlarge the Supervisory Board to 20 members for a
+limited period of time. The enlargement was to be delayed until
+the acquisition of the majority of the shares of innogy SE closed,
+which has now occurred. Effective the conclusion of the 2023
+Annual Shareholders Meeting, the size of the Supervisory Board
+will be reduced to 12 members. Pursuant to E.ON SE's Articles
+of Association, the Supervisory Board is composed of an equal
+number of shareholder and employee representatives. The
+shareholder representatives are elected by the shareholders at
+the Annual Shareholders Meeting; the Supervisory Board nomi-
+nates candidates for this purpose. As a rule, the Annual Share-
+holders Meeting decides on the elections by individual vote.
+Pursuant to the agreement regarding employees' involvement
+in E.ON SE, the other currently ten members of the Supervisory
+Board are appointed by the SE Works Council, with the provision
+that at least three different countries are represented and one
+member is selected by a trade union that is represented at E.ON SE
+or one of its subsidiaries in Germany. Persons are not eligible as
+Supervisory Board members if they:
+•
+•
+are already supervisory board members in ten commercial
+companies that are required by law to form a supervisory
+board,
+are legal representatives of an enterprise controlled by the
+Company,
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Management Board, or
+were a member of the Company's Management Board in the
+past two years, unless the person concerned is nominated
+by shareholders who hold more than 25 percent of the
+Company's voting rights.
+An upper age limit of 75 years applies to members of the
+Supervisory Board.
+The Management Board has established a Disclosure Committee
+and an Ad Hoc Committee for issues relating to financial
+disclosures. These committees ensure that such information
+is disclosed in a correct and timely fashion.
+6/6
+4/4
+Grillo, Ulrich³
+May, Stefan²
+2/2
+5/5
+1/15.7
+Pinczésné Márton, Szilvia
+6/6
+Pöhls, René²
+2/2
+1/15
+Schulz, Fred
+6/6
+8/8
+4/4
+Wallbaum, Elisabeth
+6/6
+Zettl, Albert
+6/6
+7/74
+3/46,7
+¹Until October 2, 2019: Investment and Innovation Committee.
+2Member since September 24, 2019.
+Compliance
+3Member since October 1, 2019.
+6/6
+Luha, Eugen-Gheorghe
+2/2
+Krebber, Monika²
+2/2
+1/15
+Schmitz, Andreas
+6/6
+6/64,6
+4/4
+Schmitz, Dr. Rolf Martin³
+2/2
+Segundo, Dr. Karen de
+5/6
+Wilkens, Deborah³
+5/5
+2/2
+6/6
+5/5
+0/0
+1/15
+5/5
+Scheidt, Andreas
+Broutta, Clive
+6/6
+8/8
+6/6
+5/5
+Woste, Ewald
+Persons with executive responsibilities, in particular members
+of E.ON SE's Management Board and Supervisory Board, and
+persons closely related to them, must disclose specific dealings
+in E.ON stock or bonds, related derivates, or other related finan-
+cial instruments pursuant to Article 19 of the EU Market Abuse
+Regulation in conjunction with Section 26, Paragraph 2, of the
+German Securities Trading Act. Such dealings that took place in
+2019 have been disclosed on the Internet at www.eon.com.
+Legal Provisions and Rules of the Company's
+Articles of Association Regarding the Appoint-
+ment and Dismissal of Management Board
+Members and Amendments to the Articles of
+Association
+The financial calendar and ad hoc statements are available on
+the Internet at www.eon.com.
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, in pursuit of one or more objec-
+tives by the Company and also by its affiliated companies or by
+third parties for the Company's account or one of its affiliates'
+account.
+With regard to treasury shares that will be, or have been, acquired
+based on the aforementioned authorization and/or prior autho-
+rizations by the Shareholders Meeting, the Management Board
+is authorized, subject to the Supervisory Board's consent and
+excluding shareholder subscription rights, to use these shares-
+in addition to a disposal through a stock exchange or an offer
+granting a subscription right to all shareholders-as follows:
+•
+•
+•
+•
+to be sold and transferred against cash consideration
+to be sold and transferred against contributions in kind
+to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+to be offered, with or without consideration, for purchase
+and transferred to individuals who are or were employed
+by the Company or one of its affiliates as well as to board
+members of affiliates of the Company
+to be used for the purpose of a scrip dividend where share-
+holders may choose to contribute their dividend entitlement
+to the Company in the form of a contribution in kind in
+exchange for new shares.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+61
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, separately or collectively,
+including with respect to treasury shares acquired by affiliated
+companies or companies majority-owned by the Company or
+by third parties for their account or the Company's account.
+In addition, the Management Board is authorized to cancel
+treasury shares, without such cancellation or its implementation
+requiring an additional resolution by the Shareholders Meeting.
+In each case, the Management Board will inform the Share-
+holders Meeting about the utilization of the aforementioned
+authorization, in particular about the reasons for and the purpose
+of the acquisition of treasury shares, the number of treasury
+shares acquired, the amount of the registered share capital
+attributable to them, the portion of the registered share capital
+represented by them, and their equivalent value.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 10, 2017, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase,
+until May 9, 2022, the Company's share capital by a total of up
+to €460 million through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in kind
+(authorized capital pursuant to Sections 202 et seq. of the AktG;
+Authorized Capital 2017). Subject to the Supervisory Board's
+approval, the Management Board is authorized to exclude share-
+holders' subscription rights.
+With the Supervisory Board's approval, the Management Board
+adopted a resolution that took effect on March 12, 2018, and
+that the Management Board concretized on September 18, 2019,
+to utilize almost all of Authorized Capital 2017, which had been
+resolved by the Annual Shareholders Meeting of May 10, 2017,
+to increase E.ON SE's share capital-excluding shareholders'
+subscription rights pursuant to Section 203, Paragraph 2, and
+Section 186, Paragraph 3 of the AktG-from €2,201,099,000
+to €2,641,318,800 through the issuance of 440,219,800 new
+registered no-par-value shares against contributions in kind.
+The Executive Committee approved the capital increase on Sep-
+tember 18, 2019. The capital increase took effect when it was
+entered into the Commercial Register on September 19, 2019.
+Note 19 to the Consolidated Financial Statements contains
+more information about Authorized Capital 2017.
+At the Annual Shareholders Meeting of May 10, 2017, share-
+holders approved a conditional increase of the Company's share
+capital (with the option to exclude shareholders' subscription
+rights) up to the amount of €175 million (Conditional Capital
+2017). Note 19 to the Consolidated Financial Statements con-
+tains more information about Conditional Capital 2017.
+Significant Agreements to Which the Company
+Is a Party That Take Effect on a Change of Control
+of the Company Following a Takeover Bid
+by the use of derivatives (put or call options or a combination
+of both).
+by means of a public offer or a public solicitation to submit
+offers for the exchange of liquid shares that are admitted to
+trading on an organized market, within the meaning of the
+German Securities Purchase and Takeover Law, for Company
+shares
+by means of a public offer directed at all shareholders or a
+public solicitation to submit offers
+•
+4Committee member since March 12, 2019.
+In order to verify that the ICS is effective, as a first step, with
+respect to the Accounting department, innogy examines whether
+the risk situation is presented appropriately and whether suit-
+able controls are in place for the identified risks. In a second step,
+the effectiveness of the controls is verified. This task has been
+entrusted to employees in Accounting and Internal Audit as well
+as independent auditing companies, whose work is supported by
+the IT system. The officers in charge check whether the agreed
+ICS quality standards are complied with for the Finance, HR,
+Procurement, IT, Tax, Retail Billing, and, in 2019 for the first time,
+Grid Billing functions. The results of the checks are reported to
+the Management Board. The CEO and CFO of innogy SE formally
+confirm their responsibility for the effectiveness of the innogy
+Group's ICS.
+Within the scope of external reporting, the members of the
+Management Board of innogy SE have signed the responsibility
+statement. They thus confirmed that the prescribed accounting
+standards have been adhered to and that the figures give a true
+and fair view of the net assets, financial position and results
+of operations. At its meetings, the Supervisory Board's Audit
+Committee regularly concerned itself with the effectiveness
+of the ICS. At the end of February 2020, the Management Board
+submitted a report on the appropriateness of the design and
+effectiveness of the ICS to innogy SE's Audit Committee.
+The assessments and audits carried out in 2019 proved that
+the ICS was effective yet again in the Accounting, Finance, HR,
+Procurement, IT, and Tax functions. However, this merely reduces
+the risk of gross misrepresentations in accounting, as such
+cannot be eliminated completely.
+Last year, the ICS was refined with a focus on accounting and
+IT in conjunction with the introduction of the new SAP HANA IT
+system.
+Disclosures Pursuant to Section 289a,
+Paragraph 1, and Section 315a, Paragraph 1,
+of the German Commercial Code and Explana-
+tory Report
+Composition of Share Capital
+The share capital totals €2,641,318,800 and consists of
+2,641,318,800 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a Share-
+holders Meeting.
+Restrictions on Voting Rights or the Transfer of
+Shares
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the
+next calendar year plus one. As a rule, an employee may not sell
+such shares until the blackout period has expired. The employee
+stock purchase program was not offered in 2019.
+Pursuant to Section 71b of the German Stock Corporation Act
+(known by its German abbreviation, "AktG"), the Company's
+treasury shares give it no rights, including no voting rights.
+The underlying contracts of debt issued since 2007 contain
+change-of-control clauses that give the creditor the right of
+cancellation. This applies, inter alia, to bonds issued by E.ON SE
+and E.ON International Finance B.V. and guaranteed by E.ON SE,
+promissory notes issued by E.ON SE, and other instruments
+such as credit contracts. Granting change-of-control rights to
+creditors is considered good corporate governance and has
+become standard market practice. More information about
+financial liabilities is contained in the section of the Combined
+Group Management Report entitled Financial Situation and in
+Note 26 to the Consolidated Financial Statements.
+Disclosures Regarding Takeovers
+60
+Pursuant to the Company's Articles of Association, the Manage-
+ment Board consists of at least two members. The Supervisory
+Board decides on the number of members as well as on their
+appointment and dismissal.
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is per-
+missible. If more than one person is appointed as a member of
+the Management Board, the Supervisory Board may appoint
+one of the members as Chairperson of the Management Board.
+If there is a vacancy on the Management Board for a required
+member, the court makes the necessary appointment upon
+petition by a concerned party in the event of an urgent matter.
+The Supervisory Board may revoke the appointment of a mem-
+ber of the Management Board and of the Chairperson of the
+Management Board for serious cause (for further details, see
+Sections 84 and 85 of the AktG).
+Resolutions of the Shareholders Meeting require a majority of
+the valid votes cast unless mandatory law or the Articles of
+Association explicitly prescribe otherwise. An amendment to
+the Articles of Association requires a two-thirds majority of the
+votes cast or, in cases where at least half of the share capital is
+represented, a simple majority of the votes cast unless manda-
+tory law explicitly prescribes another type of majority.
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utiliza-
+tion of authorized or conditional capital.
+Management Board's Power to Issue or Buy
+Back Shares
+Pursuant to a resolution of the Shareholders Meeting of May 10,
+2017, the Company is authorized, until May 9, 2022, to acquire
+treasury shares. The shares acquired and other treasury shares
+that are in possession of or to be attributed to the Company
+pursuant to Sections 71a et seq. of the AktG must altogether
+at no point account for more than 10 percent of the Company's
+share capital.
+At the Management Board's discretion, the acquisition may be
+conducted:
+⚫ through a stock exchange
+•
+•
+60
+Settlement Agreements between the Company
+and Management Board Members or Employees
+in the Case of a Change-of-Control Event
+In the event of a premature loss of a Management Board posi-
+tion due to a change-of-control event, the service agreements
+of Management Board members entitle them to severance and
+settlement payments (see the detailed presentation in the
+Compensation Report).
+To the extent that the Company has agreed to settlement pay-
+ments for Management Board members in the case of a change
+of control, the purpose of such agreements is to preserve the
+independence of Management Board members.
+This declaration and those of the previous five years are con-
+tinuously available to the public on the Company's Internet page
+at www.eon.com.
+Relevant Information about Management Practices
+Corporate Governance
+E.ON views good corporate governance as a central foundation
+of responsible and value-oriented management, efficient
+collaboration between the Management Board and the Super-
+visory Board, transparent disclosures, and appropriate risk
+management.
+In the past financial year, the Management Board and Super-
+visory Board paid close attention to E.ON's compliance with the
+German Corporate Governance Code's recommendations and
+suggestions. They determined that E.ON SE fully complies with
+all of the Code's recommendations, with the exception of the
+two aforementioned deviations, and also with nearly all of its
+suggestions.
+Transparent Management
+Transparent management is a high priority of the Management
+Board and Supervisory Board. Our shareholders, all capital market
+participants, financial analysts, shareholder associations, and the
+media regularly receive up-to-date information about the situa-
+tion of, and any material changes to, the Company. We primarily
+use the Internet to provide equal access to comprehensive and
+timely information.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+63
+(Chairman of the Board of Management of E.ON SE)
+E.ON SE issues reports about its situation and earnings by the
+following means:
+Half-Year Financial Report and Quarterly Statements
+• Annual Report
+• Annual press conferences
+•
+•
+•
+Press releases
+Telephone conferences held on release of the quarterly and
+annual results
+Numerous events for financial analysts in and outside Germany.
+A financial calendar lists the dates on which the Company's
+periodic financial reports are released.
+The Company issues ad hoc statements about information that
+could have a significant impact on the price of E.ON stock.
+•
+Managers' Transactions
+For the Board of Management of E.ON SE:
+Dr. Johannes Teyssen
+Dr. Karl-Ludwig Kley
+A change-of-control event would also result in the early payout
+of virtual shares under the E.ON Share Matching Plan and the
+E.ON Performance Plan.
+Other Disclosures Relevant to Takeovers
+The Company has been notified about the follwing direct or
+indirect interests in its share capital that exceed 10 percent of
+the voting rights:
+•
+•
+notification on October 2, 2019, by RWE Aktiengesellschaft
+for 15 percent of the voting rights
+notification on October 4, 2019, by The Capital Group
+Companies, Inc., for 10.16 percent of the voting rights.
+Stock with special rights granting power of control has not
+been issued. In the case of stock given by the Company to
+employees, employees exercise their rights of control directly
+and in accordance with legal provisions and the provisions of
+the Articles of Association, just like other shareholders.
+Corporate Governance Report
+62
+Corporate Governance Report
+(Chairman of the Supervisory Board of E.ON SE)
+Corporate Governance Declaration in Accor-
+dance with Section 289f and Section 315d of
+the German Commercial Code
+The Board of Management and the Supervisory Board hereby
+declare that E.ON SE will comply in full with the recommen-
+dations of the "Government Commission German Corporate
+Governance Code," dated February 7, 2017, published by the
+Federal Ministry of Justice and for Consumer Protection in the
+official section of the Federal Gazette (Bundesanzeiger).
+The Board of Management and the Supervisory Board further-
+more declare that E.ON SE has been in compliance in full with
+the recommendations of the "Government Commission German
+Corporate Governance Code," dated February 7, 2017, published
+by the Federal Ministry of Justice and for Consumer Protection
+in the official section of the Federal Gazette (Bundesanzeiger)
+since the last declaration in December 2018 with the exception
+of the following two deviations, which have been declared in
+the amendment to the compliance declaration in October 2019:
+Section 7.1.2 sentence 3:
+The consolidated financial statements and the group management
+report shall be made publicly accessible within 90 days from the
+end of the financial year, while mandatory interim financial infor-
+mation shall be made publicly accessible within 45 days from the
+end of the reporting period.
+The quarterly report for the third quarter 2019 (reporting date
+September 30, 2019) was only published on November 29, 2019
+and thus not within the recommended period of 45 days after
+the end of the reporting period. The reason for this was that due
+to the completion of the takeover of innogy SE numerous tasks
+were to be carried out within the scope of the initial consolidation.
+In spite of all preparations, the necessary work could not be
+carried out within the recommended period of 45 days after the
+end of the reporting period. The one-time deviation from the
+recommendation was necessary to ensure a proper financial
+reporting for the third quarter 2019.
+Section 4.2.3 para. 2 sentence 8:
+Subsequent amendments to the performance targets or
+comparison parameters shall be excluded.
+The total remuneration of the members of the Board of Manage-
+ment also includes variable components, the amount of which
+depends on the achievement of certain target figures. The target
+figures defined in December 2018 for the financial year 2019
+(short-term variable remuneration) respectively in 2016 for a
+period covering the financial year 2019 (long-term variable
+remuneration) were based primarily on Group key figures which
+were significantly affected by the completion of the acquisition
+of innogy SE and its inclusion in the scope of consolidation of
+E.ON SE. In order to ensure that both the short-term and the
+long-term variable remuneration of the Board of Management
+continues to be aligned with appropriate, demanding comparative
+parameters, the relevant key figures were adjusted retrospectively.
+Essen, December 18, 2019
+For the Supervisory Board of E.ON SE:
+Declaration Made in Accordance with Section 161 of the
+German Stock Corporation Act by the Management Board and
+the Supervisory Board of E.ON SE
+5Committee member since October 2, 2019.
+The organization of the innogy Group's accounting did not
+change compared to the previous year. Expert management of
+the innogy Group's accounting units and Shared Service Center
+in Kraków, in which the transaction-related accounting activities
+are pooled, is the responsibility of the Accounting department
+of innogy SE; this department is also responsible for preparing
+the Consolidated Financial Statements of the innogy Group.
+The Supervisory Board has established rules and procedures
+for itself, which are available on the Company's Internet page.
+It holds at least four regular meetings in each financial year. Its
+rules and procedures include mechanisms by which, if necessary,
+a meeting of the Supervisory Board or one of its committees
+can be called at any time at the request of a Management Board
+member. Shareholder representatives and employee represen-
+tatives can prepare for Supervisory Board meetings separately.
+In the event of a tie vote on the Supervisory Board, the Chairman
+has the tie-breaking vote.
+•
+•
+•
+In being assigned the audit task, the independent auditor agrees to:
+mechanisms for the accounting process used at E.ON SE and the
+Group's units is tested on a regular basis by the Internal Audit
+division; the Audit and Risk Committee regularly monitors the
+work done by the Internal Audit division and the definition of
+audit priorities. The Audit and Risk Committee may commission
+an external review of the contents of the Non-Financial State-
+ment or the Separate Non-Financial Report or the Combined
+Non-Financial Statement or the separate Combined Non-Finan-
+cial Report. In addition, the Audit and Risk Committee prepares
+the proposal on the selection of the Company's independent
+auditor for the Annual Shareholders Meeting. In order to ensure
+the auditor's independence, the Audit and Risk Committee
+secures a statement from the proposed auditor detailing any
+facts that could lead to the audit firm being excluded for inde-
+pendence reasons or otherwise conflicted.
+68
+Corporate Governance Report
+The Audit and Risk Committee consists of six members. The
+Supervisory Board believes that, in their entirety, the members
+of the Audit and Risk Committee are familiar with the sector in
+which the Company operates. According to the AktG, the Audit
+and Risk Committee must include one Supervisory Board mem-
+ber who has expertise in accounting or auditing. The Supervisory
+Board believes that in particular Andreas Schmitz fulfills this
+requirement. Pursuant to the recommendations of the German
+Corporate Governance Code, dated February 7, 2017, the
+Chairman of the Audit and Risk Committee should have special
+knowledge and experience in the application of accounting
+principles and internal control processes. In addition, this person
+should be independent and should not be a former Management
+Board member whose service on the Management Board ended
+less than two years ago. The Supervisory Board believes that the
+Chairman of the Audit and Risk Committee, Andreas Schmitz,
+fulfills these requirements. In particular, the Audit and Risk Com-
+mittee deals with accounting issues (including the accounting
+process), risk management, compliance, the necessary inde-
+pendence of the independent auditor, the issuance of the audit
+mandate to the independent auditor, the definition of the audit
+priorities, the agreement regarding the independent auditor's
+fees, and any additional services performed by the independent
+auditor. The committee's monitoring of risk management
+encompasses reviewing the effectiveness of the internal control
+system, internal risk management, and the internal audit system.
+The committee also prepares the Supervisory Board's decision
+on the approval of the Financial Statements of E.ON SE and the
+Consolidated Financial Statements. It is responsible for the
+preliminary review of the Financial Statements of E.ON SE, the
+Management Report, the Consolidated Financial Statements,
+the Combined Group Management Report and the proposal
+for profit appropriation as well as-if these are not already part
+of the (Combined Group) Management Report—the Separate
+Non-Financial Report and the Separate Combined Non-Financial
+Report. It discusses the half-yearly reports and quarterly state-
+ments or financial reports with the Management Board prior
+to their publication. The effectiveness of the internal control
+of more than €300 million, the Management Board is convinced
+that the approved investment amount will be surpassed by
+more than 10 percent or if the Management Board perceives
+that the investment is no longer economic; that is, that it will
+no longer achieve its cost of capital. Additionally, the Executive
+Committee decides on behalf of the Supervisory Board on the
+approval of financing measures whose value exceeds €1 billion
+but not €2.5 billion if such measures are not covered by the
+Supervisory Board's resolutions regarding finance plans. If the
+value of any such transactions or measures exceeds the afore-
+mentioned thresholds, the committee prepares the Supervisory
+Board's decision.
+The Executive Committee consists of six members: the Super-
+visory Board Chairman, his two Deputies, another member
+elected at the recommendation of employee representatives,
+and two more members elected at the recommendation of
+shareholder representatives. It prepares the meetings of the
+Supervisory Board and advises the Management Board on
+matters of general policy relating to the Company's strategic
+development. In urgent cases (in other words, if waiting for the
+Supervisory Board's prior approval would materially prejudice
+the Company), the Executive Committee acts on the full Super-
+visory Board's behalf. In addition, a key task of the Executive
+Committee is to prepare the Supervisory Board's personnel
+decisions and resolutions for setting the respective total com-
+pensation of individual Management Board members within
+the meaning of Section 87, AktG. Furthermore, it is responsible
+for the conclusion, alteration, and termination of the service
+agreements of Management Board members and for presenting
+the Supervisory Board with a proposal for a resolution on the
+Management Board's compensation plan and its periodic review.
+In addition, it prepares the Supervisory Board's decision on the
+Group's investment, financial, and personnel plan for the next
+financial year. It also deals with corporate-governance matters
+and reports to the Supervisory Board, generally once a year, on
+the status and effectiveness of, and possible ways of improving,
+the Company's corporate governance and on new requirements
+and developments in this area. The Executive Committee advises
+the Management Board on all issues of Group financing and
+investment planning. It decides on behalf of the Supervisory
+Board on the approval of the acquisition and disposition of com-
+panies, equity interests, and parts of companies whose value
+exceeds €300 million but does not exceed €600 million. Further-
+more, the Management Board must present to the Executive
+Committee investments if, in the case of a fixed-asset investment
+The Supervisory Board has established the following committees
+and defined rules and procedures for them:
+To ensure that, after the acquisition of the majority of the shares
+of innogy SE, innogy's employees are represented without delay
+on the Supervisory Board of E.ON SE as the Group's parent com-
+pany, a resolution was adopted at the 2019 Annual Shareholders
+Meeting to enlarge the Supervisory Board to 20 members for a
+limited period of time. The enlargement was to be delayed until
+the acquisition of the majority of the shares of innogy SE closed,
+which has now occurred. Effective the conclusion of the 2023
+Annual Shareholders Meeting, the size of the Supervisory Board
+will be reduced to 12 members. In view of continually changing
+business requirements, the Supervisory Board will continue to
+identify necessary competencies early to ensure that it has them.
+Current CVs of Supervisory Board members are published on
+the Company's Internet page.
+67
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+promptly inform the Chairman of the Audit and Risk Committee
+should any facts arise during the course of the audit that could
+lead to the audit firm being excluded for independence rea-
+sons or otherwise conflicted, unless such facts are resolved
+in a satisfactory manner
+promptly inform the Supervisory Board of anything it
+becomes aware of during the course of the audit that is of
+relevance to the Supervisory Board's duties
+inform the Chairman of the Audit and Risk Committee, or to
+note in the audit report, if the audit has led to findings that
+contradict the Declaration of Compliance with the German
+Corporate Governance Code by the Management Board or
+Supervisory Board.
+In 2019 the Investment and Innovation Committee was renamed
+the Innovation and Sustainability Committee. It consists of six
+members. It advises the Management Board on all innovation
+issues and growth opportunities. The focus is on opportunities
+that could deliver significant growth in sales and profit within
+the foreseeable future. These types of opportunities could range
+from new business models, markets, products, and services to
+innovative solutions that tangibly improve the customer expe-
+rience, employees' daily work, or processes. The Innovation and
+Sustainability Committee advices the Management Board on
+E.ON's digital transformation with the aim of making the Com-
+pany more automated, leaner, and more data-driven. The com-
+mittee also addresses issues relating to E.ON's HR agenda that
+help employees adopt a growth and innovation mentality, such
+as engagement, capabilities, work methods of the future, and
+cultural change. In addition, the committee advises the Super-
+visory Board and the Management Board on environmental,
+social, governance ("ESG"), and sustainability issues.
+5Committee member until October 2, 2019.
+"Once as a guest.
+A dedicated unit within Accounting is responsible for designing
+and monitoring the ICS of the innogy Group. It implements the
+ICS with support from the ICS Committee. The committee works
+to ensure that the ICS is implemented according to uniform
+principles across the Group and meets high standards for correct-
+ness and transparency. It consists of the heads of Accounting &
+Reporting, Tax, Controlling & Risk as well as Finance & Credit Risk,
+HR, procurement, IT, Tax, Retail Billing, Grid Billing, and Corpo-
+rate Responsibility. The Group-wide set of rules for designing
+and monitoring the ICS remain in effect without any changes.
+Disclosures Regarding Takeovers
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+59
+59
+Report on innogy SE's Accounting-related Internal Control
+System
+Combined Group Management Report
+Risks associated with financial reporting reflect the fact that the
+innogy Group's annual, consolidated and interim financial state-
+ments may contain misrepresentations that could have a signifi-
+cant influence on the decisions made by the reader. The innogy
+Group's accounting-based ICS aims to detect potential sources of
+error and limit the resulting risks. This enables innogy to ensure
+with sufficient certainty that the Consolidated Financial State-
+ments are prepared in compliance with statutory regulations.
+At the Annual Shareholders Meeting on May 14, 2019, Price-
+waterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
+was selected to be E.ON SE's independent auditor for the 2019
+financial year and to audit the Condensed Consolidated Interim
+Financial Statements and Interim Group Management Report
+for the 2019 financial year and the first quarter of 2020. The
+independent auditors with signing authority for the Annual
+Financial Statements of E.ON SE and the Consolidated Financial
+Statements are Markus Dittmann (since the 2014 financial year)
+and Aissata Touré (since the 2015 financial year).
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+At the Annual Shareholders Meeting, shareholders may vote
+their shares themselves, through a proxy of their choice, or
+through a Company proxy who is required to follow the share-
+holder's voting instructions.
+E.ON SE shareholders exercise their rights and vote their shares
+at the Annual Shareholders Meeting. The convening of the
+Annual Shareholders Meeting and the reports and documents
+required by law for the Annual Shareholders Meeting, including
+the Annual Report, are published on the Company's Internet
+page together with the agenda and the explanation of the con-
+ditions of participation, shareholders' rights, and any counter-
+motions and election proposals submitted by shareholders. The
+Company's financial calendar, which is published in the Annual
+Report, in the quarterly statements or financial reports, and on
+the Internet at www.eon.com, regularly informs shareholders
+about important Company dates.
+Shareholders and Annual Shareholders Meeting
+All committees meet at regular intervals and when specific
+circumstances require it under their rules and procedures. The
+Report of the Supervisory Board (on pages 4 to 6) contains
+information about the activities of the Supervisory Board and
+its committees in the year under review. Pages 240 and 241
+of the Annual Report show the composition of the Supervisory
+Board and its committees.
+The Nomination Committee consists of three shareholder-
+representative members. Its Chairman is the Chairman of the
+Supervisory Board. Its task is to recommend to the Supervisory
+Board, taking into consideration the Supervisory Board's targets
+for its composition, suitable candidates for election to the Super-
+visory Board by the Annual Shareholders Meeting.
+The foundations of the ICS are innogy's basic principles, which
+are set out in innogy's Code of Conduct and include the ambition
+to provide complete, objective, correct, intelligible and timely
+information, as well as the company's Group-wide guidelines.
+Building on this, the ICS quality standards for the accounting-
+related IT systems should ensure that the data are collected
+and processed reliably.
+Report of the Supervisory Board
+Strategy and Objectives
+Report of the Supervisory Board
+Strategy and Objectives
+b) In its current composition the Supervisory Board meets the
+objectives of its diversity concept. The Supervisory Board's
+composition of women and men complies with the legal require-
+ments for minimum percentages; separate compliance with
+the statutory gender quota occurred from the 2018 Annual
+Shareholders Meeting. The age range of the Supervisory Board
+is currently 44 to 73 years. At least four members have inter-
+national experience.
+Supervisory Board membership shall usually be limited to no
+more than three full terms of office (15 years).
+Members of the Supervisory Board must not have seats on the
+boards of, or act as consultants for, any of the Company's
+major competitors.
+•
+•
+99
+66
+Corporate Governance Report
+The Supervisory Board shall not include more than two former
+members of the Board of Management.
+The Supervisory Board shall include a reasonable number of
+independent members. Members shall be deemed to be inde-
+pendent if they have no personal or business relationship with
+the Company, its corporate bodies, a major shareholder or any
+company affiliated with the latter, where such relationship
+may give rise to a material and not merely temporary conflict
+of interests. If the total number of Supervisory Board members
+is 20, a reasonable number of independent members will be 14.
+In this context, employee representatives will always be
+regarded as independent members.
+In this context, the following general objectives shall be observed:
+•
+•
+"The composition of the Supervisory Board of E.ON SE shall
+comply with the specific SE requirements and Germany's Stock
+Corporation Act, and with the recommendations of the German
+Corporate Governance Code.
+c) In their entirety, the members bring a wide range of specific
+knowledge to committee work and have special expertise in
+one or more businesses and markets relevant to the Company.
+In view of Item 5.4.1 of the German Corporate Governance Code,
+dated February 7, 2017, and Section 289f, Paragraph 2, Item 6,
+of the German Commercial Code, the Supervisory Board defined
+targets for its composition, including a diversity concept and a
+competency profile, that go beyond the applicable legal require-
+ments. They are as follows:
+All Supervisory Board members must have sufficient time
+available to perform their duties on the boards of various com-
+panies. Persons who are members of the board of manage-
+ment of a listed company shall only be eligible as members of
+E.ON's Supervisory Board if they do not have seats on a total
+of more than two supervisory boards of listed non-Group com-
+panies or of comparable supervisory bodies.
+b) In addition, the Supervisory Board has adopted the following
+diversity concept so as to ensure a balanced structure of the
+Supervisory Board in terms of age, gender, personality, educatio-
+nal background and professional experience.
+Furthermore, the Supervisory Board's rules and procedures
+gave it the option, if necessary, of holding executive sessions;
+that is, to meet without the Management Board.
+In the search for qualified Supervisory Board members, due
+consideration shall be given to diversity. When preparing nom-
+inations for the election of Supervisory Board members, due
+consideration shall be given in each case to the question as to
+whether complementary academic profiles, professional and
+life experience, a balanced age mix, various personalities and
+a reasonable gender balance benefit the Supervisory Board's
+work. In this context, care shall be taken to ensure that a gen-
+der quota of 30 percent will be achieved; this shall apply to the
+Supervisory Board as a whole and to the shareholders' and
+employees' representatives separately.
+a) The Supervisory Board believes that all of its members are
+independent. No former Management Board member sits on
+the Supervisory Board. Furthermore, no member has a seat on
+the boards of, or acts as a consultant for, any of the Company's
+major competitors or has been on the Supervisory Board for
+more than three terms of office (15 years). The Supervisory
+Board believes that in the case of no Supervisory Board member
+is there specific indications of relevant situations or relationships
+that could give rise to a conflict of interests. Only two manage-
+ment board members of a listed company, Klaus Fröhlich, a
+member of the Board of Management of Bayerische Motoren
+Werke Aktiengesellschaft, and Rolf Martin Schmitz, Chairman
+of the Board of Management of RWE Aktiengesellschaft, sit on
+the Supervisory Board.
+Current Composition of the Supervisory Board
+At least two members shall be familiar with legal and compli-
+ance, HR, IT and sustainability, more specially in the dimensions
+of environmental protection, social, and governance ("ESG")."
+At least two independent representatives of the shareholders
+shall have expertise in the fields of accounting, risk manage-
+ment and auditing of financial statements.
+At least four members shall have specific expertise in the
+businesses and markets that are particularly relevant for
+E.ON. This includes in particular the energy sector, the sales
+and retail business, regulated industries, new technology as
+well as relevant customer sectors.
+•
+•
+•
+At least two members shall be familiar, in particular, with
+innovation, disruption and digitization and the associated
+new business models and cultural change.
+•
+The shareholders' representatives should have leadership
+experience in companies or other large organizations by the
+majority. At least four members shall have experience, as
+management or supervisory board members, in the strategic
+management or supervision of listed organizations and shall
+be familiar with the functioning of capital and financial markets.
+•
+c) In addition, the following skills profile shall apply; especially
+the Nominations Committee will strive to apply the skills profile
+when preparing nominations of candidates for the shareholders'
+representatives to be proposed to the Annual General Meeting.
+Four Supervisory Board members shall have international
+experience, i.e. they shall have spent, for instance, many years
+of their professional career outside Germany.
+•
+• An upper age limit of 75 years shall apply to members of the
+Supervisory Board; candidates shall not be older than 72 years
+when they are elected.
+•
+Other compensation provisions
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+•
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+•
+Virtual contributions equaling a maximum of 21 percent of fixed compensation and target bonus
+Pension benefits
+Contribution-based benefits
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from the age of 60
+•
+Final-salary-based benefits²
+Annual target allocation corresponds to 55 percent of performance-based compensation
+•
+Share Ownership Guidelines
+- 200 percent (Management Board Chairperson)
+⋅
+30%
+Cap: 200 percent of the target value
+Components and Compensation Structure
+72
+Corporate Governance Report
+¹Deviating compensation modalities apply to Dr.-Ing. Birnbaum due to his dual membership. They are described in the section "Total Compensation in 2019."
+2Only applies to Dr. Johannes Teyssen.
+The Supervisory Board's right pursuant to Section 87, Paragraph 2 of the German Stock Corporation Act to reduce
+compensation if the Company's situation deteriorates
+For six months after termination of service agreement, prorated compensation equal to fixed compensation and
+target bonus, at a minimum 60 percent of most recently received compensation
+Until the required investment is reached, obligation to invest net payouts from long-term compensation in E.ON stock
+Maximum of two years' total compensation or the total compensation for the remainder of the service agreement
+Settlement equal to two or three target salaries (base salary, target bonus, and fringe benefits), reduced by up to
+20 percent
+- 150 percent (other Management Board members)
+Clawback rule
+Non-compete clause
+Settlement for change-of-control
+Settlement cap
+Obligation to buy and hold E.ON stock until the end of service on the Management Board
+Investment in E.ON stock equaling a percentage of base compensation:
+•
+The compensation of Management Board members consists
+of a fixed base salary, an annual bonus, and long-term variable
+compensation. The components account for the following per-
+centages of total compensation:¹
+.
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+- Individual performance factor: collective performance and individual performance
+- Company performance: actual earnings per share ("EPS") versus budget
+Amount of bonus depends on:
+•
+⋅
+71
+(up/down or "bonus/malus adjustment")
+Cap: 200 percent of target bonus
+- Target bonus for Management Board members: €675,000-€825,000
+- Target bonus for Management Board Chairman: €1,417,500
+Target bonus at 100 percent target attainment:
+•
+Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination
+Base salary
+•
+•
+Annual bonus corresponds to 45 percent of performance-based compensation
+•
+Allocation limit; that is, the maximum number of virtual shares: 150 percent
+Final number of virtual shares depends on E.ON stock's TSR relative to the TSR of companies in the STOXX®
+Europe 600 Utilities index; 14 of TSR performance is locked in annually
+- Target value for Management Board members: €825,000–€1,008,333
+- Target value for Management Board Chairman: €1,732,500
+Granting of virtual shares of E.ON stock with a four-year vesting period
+Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1) + performance
+matching (1:0 to 1:2) depending on ROCE during vesting period
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the annual bonus
+as long as the total bonus remains under the cap
+Cap: 200 percent of the target value
+- Target value for Management Board Chairman: €1,260,000 (excluding LTI components from annual bonuses)
+Granting of virtual shares of E.ON stock with a four-year vesting period
+⋅
+.•
+•
+•
+- Target value for Management Board members: €600,000-€733,333 (excluding LTI components from annual
+bonuses)
+31%
+• Actual EPS vs. budget:
+¹Not including fringe, other, and pension benefits.
+Cap at 200% of
+target bonus
+Bonus
+• Individual performance
+(bonus/malus adjustment)
+• Overall performance of
+Management Board
+Evaluation of a Management Board
+member's performance based on:
+Individual Performance Factor
+50-150%
+100%
+Payout in Cash
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+Х
+-37.5% budget +37.5% EPS
+50%
+0%
+100%
+150%
+Combined Group Management Report
+73
+The Company's performance is assessed on the basis of earnings
+per share ("EPS"), E.ON's key performance indicator. EPS used
+for this purpose will be derived from adjusted net income as dis-
+closed in this report. The EPS target for each year is set by the
+Supervisory Board, taking into account the approved budget.
+Because the budget is derived from the Company's corporate
+strategy, no specific target figures are disclosed for competitive
+reasons. The target is fully achieved if actual EPS is equal to
+the target. If actual EPS is 37.5 percentage points or more below
+the target, this constitutes zero percent attainment. If actual
+EPS is 37.5 percentage points or more above the target, this
+constitutes 200 percent attainment. Linear interpolation is used
+to translate intermediate EPS figures into percentages.
+The Supervisory Board determines the degree to which Man-
+agement Board members have attained the targets of their indi-
+vidual performance factors, giving adequate consideration to
+their individual and collective contributions. The factors range
+between 50 and 150 percent. The amount of the bonus can
+therefore be adjusted up or down depending on performance
+(in the sense of a "bonus/malus adjustment").
+of Granted
+Share Units
+Initial Number
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON SE's TSR performance
+in a given year determines the final number of one fourth of the
+virtual shares granted at the beginning of the vesting period.
+For this purpose, the TSRS of all companies are ranked, and
+E.ON SE's relative position is determined based on the percentile
+reached. Target attainment is 100 percent if E.ON SE's TSR is
+equal to the median of the peer group. The lower threshold is the
+25th percentile; a TSR performance below this threshold would
+reduce the number of virtual shares granted by one quarter. If
+E.ON's performance is at or above the 75th percentile (upper
+cap) the quarter of virtual shares granted for that particular year
+increases to a maximum of 150 percent. Linear interpolation is
+used to translate intermediate figures into percentage.
+TSR is the yield of E.ON stock. It takes into account the stock
+price, including the assumption that dividends are reinvested,
+and is adjusted to exclude changes in capital. The peer group
+used for relative TSR will be the companies in E.ON's peer index,
+the STOXX® Europe 600 Utilities.
+E.ON Performance Plan. The number of granted virtual shares
+may change in the course of the four-year vesting period
+depending on the total shareholder return ("TSR") of E.ON
+stock compared with the TSR of the companies in a peer group
+("relative TSR").
+The Supervisory Board grants virtual shares to each member
+of the Management Board in the amount of the contractually
+agreed-on target. The conversion into virtual shares is based on
+the fair market value on the date when the shares are granted.
+The fair market value is determined by applying methods accepted
+in financial mathematics, taking into account the expected future
+payout, and hence, the volatility and risk associated with the
+Management Board members receive stock-based, long-term
+variable compensation under the E.ON Performance Plan, which
+replaced the E.ON Share Matching Plan as the Company's new
+long-term compensation plan effective January 1, 2017. Each
+tranche of the E.ON Performance Plan has a vesting period
+of four years to serve as a long-term incentive for sustainable
+business performance. Vesting periods start on January 1.
+E.ON Performance Plan (Granted from 2017)
+Long-term variable compensation currently consists of tranches
+from several financial years granted under two different plans.
+First, tranches of the E.ON Performance Plan-Performance
+Plan, first tranche (2017-2020), second tranche (2018-2021),
+and third tranche (2019-2022)-were granted in 2017, 2018,
+and 2019. Second, there are still tranches of the E.ON Share
+Matching Plan outstanding. The last tranche of the E.ON Share
+Matching Plan―Share Matching Plan, fourth tranche (2016-
+2020) and the LTI components of the bonus from 2016 Share
+Matching Plan, fifth tranche (2017-2021)-was granted in 2016.
+Long-Term Variable Compensation
+74
+Corporate Governance Report
+As before, the maximum bonus that can be attained (including any
+special compensation) is 200 percent of the target bonus (cap).
+In addition, the Supervisory Board may, as part of the annual
+bonus, grant Management Board members special compensation
+for outstanding achievements. In assigning Management Board
+members their individual performance factors and in granting
+special compensation, the Supervisory Board pays attention to
+the criteria of Section 87 of the German Stock Corporation Act
+and of the German Corporate Governance Code.
+The targets for individual performance factors are set at the
+beginning of each financial year and are exclusively strategic in
+nature. Here too, therefore, no specific target figures are dis-
+closed for competitive reasons. The Supervisory Board may also
+factor in, for example, quantitative and qualitative customer
+targets as well as performance indicators for the Company's
+core businesses or matters such as health, safety, and environ-
+ment and personnel management.
+200%
+Bonus
+(annual)
+Target attainment
+Bonus
+(target
+bonus)
+Granting
+individual
+performance
+versus budget
+45%
+Depends on:
+Actual EPS
+Bonus (STI)
+of virtual
+shares (with
+performance
+requirement)
+peer companies
+E.ON Performance Plan
+(LTI)-stock-based
+55%
+Variable compensation
+(-70%)
+The following graphic provides an overview of the compensation
+plan for Management Board members:
+E.ON Performance
+Plan (multi-year)
+39%
+Depends on:
+TSR performance
+relative to
+Paid out after
+the conclusion
+of the financial
+year
+Non-Performance-Based Compensation
+No revisions were made to non-performance-based compensa-
+tion relative to the previous financial year.
+in the assessment of the Company's performance.
+The Supervisory Board has no additional discretionary power
+Share Ownership Guidelines
+Base salary
+(-30%)
+based compensation
+Non-performance-
+The amount of the annual bonus is determined by the degree
+to which certain performance targets are attained. The target-
+setting mechanism consists of company performance targets
+and individual performance targets.
+Management Board members' annual bonus (45 percent of the
+performance-based compensation) consists of a cash payment
+made after the end of the financial year.
+Annual Bonus
+55 percent of performance-based compensation depends on
+the achievement of long-term targets, ensuring that the variable
+compensation is sustainable under the criteria of Section 87 of
+the German Stock Corporation Act.
+No revisions were made to performance-based compensation
+relative to the previous financial year.
+Performance-Based Compensation
+Management Board members receive a number of contractual
+fringe benefits, including the use of a chauffeur-driven company
+car. The Company also provides them with the necessary tele-
+communications equipment, covers costs that include those for
+a periodic medical examination, and pays the premium for an
+accident insurance policy.
+Management Board members receive their fixed compensation
+in twelve monthly payments.
+Company Performance
+0-200%
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+Board members could, depending on the company's performance
+during the vesting period, receive performance matching of up
+to two additional non-vested virtual shares per share that resulted
+from base matching.
+TSR of the E.ON share compared to the companies
+The Supervisory Board issued the third tranche of the E.ON
+Performance Plan (2019-2022) for the 2019 financial year and
+granted Management Board members virtual shares of E.ON
+stock. The present value assigned to the virtual shares of E.ON
+stock at the time of granting-€6.68 per share-is shown in the
+following tables entitled "Stock-based Compensation" and "Total
+Compensation of the Management Board." The value performance
+of this tranche will be determined by the performance of E.ON
+stock, per-share dividends, and TSR performance relative to the
+companies in its peer index, the STOXX® Europe 600 Utilities,
+for the years 2019 through 2022. The actual payments made
+to Management Board members in 2023 may deviate, under
+certain circumstances considerably, from the calculated figures
+disclosed here.
+The long-term variable compensation of Management Board
+members resulted in the following expenses in 2019:
+Stock-Based Compensation
+Value of virtual shares
+€
+2019
+at time of granting
+2018
+Number of virtual
+shares granted
+Expense (+)/income (-) 1
+Dr. Johannes Teyssen
+1,732,500
+1,732,500
+Dr.-Ing. Leonhard Birnbaum
+1,083,333
+1,008,333
+The annual bonuses of Management Board members for 2019
+totaled €6.0 million (prior year: €7.0 million). In determining
+the performance factor, the Supervisory Board assessed and
+discussed the Management Board's overall performance.
+2019
+259,357
+150,949
+shareholdings. For departing businesses, the last available fore-
+cast figures are used; for all other components, actual figures at
+year-end. In addition, the calculation of actual EPS is based on
+the number of shares prior to the capital increase in conjunction
+with the innogy transaction. Due to these adjustments, the Super-
+visory Board passed a resolution in October 2019 to amend,
+pursuant to Section 161 of the German Stock Corporate Act,
+the Declaration of Compliance issued on December 18, 2018.
+Performance-Based Compensation in 2019
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+77
+of service, the attainment of company targets, and interest rates.
+For a Management Board member enrolled in the plan at the
+age of 50, the company-financed, contribution-based pension
+payment is currently estimated to be between 30 and 35 percent
+of his or her base salary (without factoring in pension benefits
+accrued prior to being appointed to the Management Board).
+The Company has agreed to a pension plan based on final salary
+for the Management Board member, Dr. Johannes Teyssen, who
+was appointed to the Management Board before 2010. Following
+the end of his service for the Company, Dr. Johannes Teyssen is
+entitled to receive lifelong monthly pension payments in three
+cases: reaching the age of 60, permanent incapacitation, and a
+so-called third pension situation. The criteria for this situation are
+met if the termination or non-extension of Dr. Johannes Teyssen's
+service agreement is not due to his misconduct or rejection
+of an offer of extension that is at least on a par with his existing
+service agreement. In the third pension situation, Dr. Johannes
+Teyssen would receive an early pension during the period between
+the end of his service and his reaching 60 years of age (transi-
+tional allowance). Dr. Johannes Teyssen's pension entitlements
+provide for annual pension payments equal to 75 percent of his
+annual base salary. The full amount of any pension entitlements
+from earlier employment is offset against these payments. In
+addition, in the case of a Management Board member's death,
+the pension plan includes benefits for the widow and each orphan
+that are equal to 60 percent and 15 percent, respectively, of
+the deceased's pension entitlement. Together, pension payments
+to a widow and children may not exceed 100 percent of the
+deceased Management Board member's pension.
+Pursuant to the provisions of the German Occupational Pensions
+Improvement Act, Management Board members' pension entitle-
+ments are not vested until they have been in effect for five years.
+This applies to both contribution-based and final-salary-based
+pension plans.
+In line with the German Corporate Governance Code's recommen-
+dation, the Supervisory Board reviews, on a regular basis, the
+benefits level of Management Board members and the resulting
+annual and long-term expense and, if necessary, adjusts the
+payments.
+Settlement Payments for Termination of Management Board
+Duties
+In line with the German Corporate Governance Code's recommen-
+dation, the service agreements of Management Board members
+include a settlement cap. Under the cap, settlement payments
+in conjunction with a termination of Management Board duties
+may not exceed the value of two years' total compensation
+or the total compensation for the remainder of the member's
+service agreement.
+In the event of a premature loss of a Management Board position
+due to a change of control, Management Board members are
+entitled to settlement payments. The change-of-control agree-
+ments stipulate that a change in control exists in three cases:
+a third party acquires at least 30 percent of the Company's voting
+rights, thus triggering the automatic requirement to make an
+offer for the Company pursuant to Germany's Stock Corporation
+Takeover Law; the Company, as a dependent entity, concludes
+a corporate agreement; the Company is merged with a non-affili-
+ated company. Management Board members are entitled to a
+settlement payment if, within 12 months of the change of con-
+trol, their service agreement is terminated by mutual consent,
+expires, or is terminated by them (in the latter case, however, only
+if their position on the Management Board is materially affected
+by the change in control). Management Board members' settle-
+ment payment consists of their base salary and target bonus
+plus fringe benefits for two years. In accordance with the German
+Corporate Governance Code, the settlement payments for
+Management Board members may not exceed 100 percent
+of the above-described settlement cap.
+The service agreements of Management Board members
+include a non-compete clause. For a period of six months after
+the termination of their service agreement, Management Board
+members are contractually prohibited from working directly
+or indirectly for a company that competes directly or indirectly
+with the Company or its affiliates. Management Board mem-
+bers receive a compensation payment for the period of the
+non-compete restriction. The prorated payment is based on
+100 percent of their contractually stipulated annual target
+compensation (without long-term variable compensation) but
+is, at a minimum, 60 percent of their most recently received
+compensation.
+Corporate Governance Report
+78
+Management Board Compensation in 2019
+The Supervisory Board reviewed the Management Board's
+compensation plan and the components of individual members'
+compensation. It determined that the Management Board's
+compensation is appropriate from both a horizontal and vertical
+perspective and passed a resolution on the performance-based
+compensation described below. It made its determination of
+customariness from a horizontal perspective by comparing
+the compensation with that of companies of a similar size. Its
+review of appropriateness included a vertical comparison of
+the Management Board's compensation with that of the Com-
+pany's top management and the rest of its workforce. In the
+Supervisory Board's view, in the 2019 financial year there was
+no reason to adjust the Management Board's compensation.
+The performance metrics for the E.ON SE Management Board's
+performance-based compensation are based on key figures that
+were considerably influenced by the closing of the innogy SE
+takeover and by innogy's entry into E.ON SE's scope of consoli-
+dation. The transaction's effects could not of course be reflected
+in the EPS budget set for the 2019 financial year or the Group
+ROCE target set in 2016 for the fourth tranche of the Share
+Matching Plan. To ensure that target setting remains consistent
+and demanding, the Supervisory Board exercised its due discre-
+tion to subsequently adjust the key figures used to determine
+target attainment. This means that the unchanged EPS budget
+and ROCE target are measured against key figures adjusted to
+reflect E.ON's former corporate structure prior to the transaction;
+in other words, without innogy SE but with departing businesses
+like E.ON Climate & Renewables and certain PreussenElektra
+2018
+2019
+2018
+Dr. Karsten Wildberger
+825,000
+825,000
+123,503
+128,706
+870,727
+577,297
+Total
+5,290,833
+4,872,083
+780,815
+760,078
+5,366,406 3,608,182
+¹Expense pursuant to IFRS 2 for performance rights and virtual shares existing in the 2019 financial year.
+²See the explanation regarding Dr.-Ing. Birnbaum on page 80.
+Long-term variable compensation granted for the 2019 financial
+year totaled €5.4 million. Note 11 to the Consolidated Financial
+Statements contains additional details about stock-based com-
+pensation.
+412,378
+529,777
+128,706
+123,503
+270,281
+157,307
+Thereof substitute payment "LTI innogy" (2019-2021)²
+75,000
+0
+2,277,079
+1,400,308
+75,000
+1,570,520
+943,816
+Report of the Supervisory Board
+Strategy and Objectives
+Dr. Thomas König (since June 1, 2018)
+481,250
+75,078
+288,515
+104,171
+Dr. Marc Spieker
+825,000
+825,000
+825,000
+TSR Performance Relative to
+Peer Group
+compensation
+compensation
+☑
+Share Price
++
+Payout Amount
+Cap at 200%
+Dividends
+of target value
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+75
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the contractually agreed-on target.
+E.ON Share Matching Plan (Granted until 2016)
+Until the introduction of the new compensation plan on January 1,
+2017, Management Board members received stock-based com-
+pensation under the E.ON Share Matching Plan. At the beginning
+of each financial year, the Supervisory Board decided, based on
+the Executive Committee's recommendation, on the allocation of
+a new tranche, including the respective targets and the number
+of virtual shares granted to individual members of the Manage-
+ment Board. To serve as a long-term incentive for sustainable
+business performance, each tranche had a vesting period of four
+years. The tranche started on April 1 of each year.
+Performance
+Matching
+threshold
+Base
+Upper
+Percentile
+achieved
+by E.ON
+of the STOXX® Europe 600 Utilities index (yearly lock-in)
+Target achievement
+200%
+175%
+Х
+150%
+125%
+100%
+75%
+50%
+25%
+0%
+25th percentile
+Lower
+threshold
+50th percentile
+(Median)
+Target value
+75th percentile
+Matching
+1/3: LTI
+component
+ROCE
+4-year
+Pension Entitlements
+Members appointed to the Management Board since 2010 are
+enrolled in the "Contribution Plan E.ON Management Board,"
+which is a contribution-based pension plan.
+Capital contributions
+Pension account
+1
+2
+3
+4
+5
+Term in years
+The Company makes virtual contributions to Management Board
+members' pension accounts in an amount equal to a percentage
+of their pensionable income (base salary and annual bonus).
+The contribution percentage is at most 21 percent. The annual
+contribution consists of a fixed base percentage (16 percent)
+and a matching contribution (5 percent). The requirement for the
+matching contribution to be granted is that the Management
+Board member contributes, at a minimum, the same amount by
+having it withheld from his compensation. The company-funded
+matching contribution is suspended if and as long as the E.ON
+Group's ROCE is less than its cost of capital for three years in a
+row. The contributions are capitalized using actuarial principles
+(based on a standard retirement age of 62) and placed in Man-
+agement Board members' pension accounts. The interest rate
+used for each year is based on the return of long-term German
+treasury notes. At the age of 62 at the earliest, a Management
+Board member (or his survivors) may choose to have the pension
+account balance paid out as a lifelong pension, in installments,
+or in a lump sum. Individual Management Board members' actual
+resulting pension entitlement cannot be calculated precisely in
+advance. It depends on a number of uncertain parameters, in
+particular the changes in their individual salary, their total years
+Chairperson:
+200% of base
+compensation
+Base
+Until the required investment is reached, Management Board
+members are obligated to invest amounts equivalent to the net
+payouts from their long-term compensation in actual E.ON
+stock. At December 31, 2019, the Management Board fulfilled
+the share ownership guidelines at a rate of 98.22 percent.
+To strengthen E.ON's capital-market focus and shareholder-
+oriented culture, effective 2017 share ownership guidelines
+apply to Management Board members. The guidelines obligate
+Management Board members to invest in E.ON stock equaling
+200 percent of base compensation (for the Management Board
+Chairperson) and 150 percent of base compensation (for the
+other Management Board members), to demonstrate that they
+have done so, and to hold the stock until the end of their service
+on the Management Board.
+Share Ownership Guidelines
+In line with the German Corporate Governance Code's recommen-
+dation, Management Board members' annual compensation
+has an overall cap. This means that the sum of the individual com-
+pensation components in one year may not exceed 200 percent
+of the total agreed-on target compensation, which consists of
+base salary, target bonus, and the target allocation value of long-
+term variable compensation. The cap increases in accordance
+with the amounts of fringe benefits and pension benefits from
+the respective financial year.
+Stock Price
+☑
+average in % X plus
+= €
+Dividends
+Vesting period: 4 years
+Following the Supervisory Board's decision to allocate a new
+tranche, Management Board members initially received vested
+virtual shares equivalent to the amount of the LTI component
+of their bonus. The determination of the LTI component took into
+consideration the overall target attainment of the old compen-
+sation plan's bonus for the preceding financial year. The number
+of virtual shares was calculated on the basis of the amount of
+the LTI component and E.ON's average stock price during the
+first 60 days prior to the four-year vesting period. Furthermore,
+Management Board members could receive, on the basis of
+annual Supervisory Board decisions, a base matching of additional
+non-vested virtual shares in addition to the virtual shares that
+resulted from their LTI component. In addition, Management
+Other Management
+Board members:
+150% of base
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+For the purpose of performance matching, the company perfor-
+mance metric for tranches granted from 2013 to 2015 was ini-
+tially E.ON's average ROACE during the four-year vesting period
+compared with a target rate of return set in advance by the
+Supervisory Board for the entire period at the time it allocated
+a new tranche. Pursuant to a Supervisory Board resolution,
+from the 2016 financial year onward these performance targets
+were based on ROCE. In view of the Uniper spinoff, this adjust-
+ment was necessary because the ROACE targets were based
+on old planning figures that did not foresee the Uniper spinoff.
+Furthermore, from the start of 2016, the Company no longer
+used ROACE as a key performance indicator and it was therefore
+no longer available. In addition, the anticipated reduction in
+E.ON's stock price resulting from the Uniper spinoff had to be
+factored in by means of a conversion method.
+Extraordinary events are not factored into the determination
+of target attainment for company performance. Depending on
+the degree of target attainment for the company performance
+metric, each virtual share resulting from base matching may be
+matched by zero to two additional virtual shares at the end of
+the vesting period. If the predetermined company performance
+target is fully attained, Management Board members receive
+one additional virtual share for each virtual share resulting from
+base matching. Linear interpolation is used to translate inter-
+mediate figures.
+At the end of the vesting period, the virtual shares held by Man-
+agement Board members are assigned a cash value based on
+E.ON's average stock price during the final 60 days of the vest-
+ing period. To each virtual share is then added the aggregate
+per-share dividend paid out during the vesting period. This
+total-cash value plus dividends-is then paid out. Payouts are
+capped at 200 percent of the arithmetical total target value.
+Corporate Governance Report
+76
+The last complete tranche of the E.ON Share Matching Plan
+(LTI components of prior-year bonus as well as base and perfor-
+mance matching) was granted in the 2016 financial year and
+runs through 2020 (Share Matching Plan, fourth tranche
+[2016-2020]). Because the old compensation plan was in effect
+until year-end 2016, in 2017 Management Board members
+were granted virtual shares based on the LTI components of
+their bonuses for the 2016 financial year under the terms of
+the E.ON Share Matching Plan. This tranche runs through 2021
+(Share Matching Plan, fifth tranche [2017-2021]).
+Overall Cap
+The arithmetical total target value allocated at the start of the
+vesting period, which began on April 1 of the year in which a
+tranche was allocated, was therefore the sum of the value of the
+LTI component, base matching, and performance matching
+(depending on the degree of attainment of a predefined company
+performance target).
+Combined Group Management Report
+123,503
+compensation
+Basic Features of the Management Board Compensation Plan
+The Management Board compensation plan that took effect on
+January 1, 2017, is supposed to create an incentive for success-
+ful and sustainable corporate governance and to link the com-
+pensation of Management Board members with the Company's
+short-term and long-term performance while also factoring in
+their individual performance. The plan's parameters are there-
+fore transparent, performance-based, and aligned with the
+Company's business success; variable compensation is based
+predominantly on multi-year metrics. In order to align manage-
+ment's and shareholders' interests and objectives, long-term
+variable compensation is based not only on the development of
+E.ON's stock price in absolute terms but also on a comparison
+with competitors. Share ownership guidelines further strengthen
+E.ON's capital-market orientation and shareholder culture.
+The Supervisory Board approves the Executive Committee's
+proposal for the Management Board's compensation plan. It
+reviews the plan and the appropriateness of the Management
+Board's total compensation as well as the individual components
+on a regular basis and, if necessary, makes adjustments. It con-
+siders the provisions of the German Stock Corporation Act and
+follows the German Corporate Governance Code's recommen-
+dations and suggestions. In its review of the compensation plan's
+market conformity and the appropriateness of compensation
+levels, the Supervisory Board was supported by an external com-
+pensation expert.
+The compensation plan that took effect on January 1, 2017,
+was presented to the 2016 Annual Shareholders Meeting and
+approved by a majority of 91.14 percent.
+In view of the regulatory changes resulting from the Act on
+the Implementation of the Second Shareholder Rights Directive
+("ARUG II") and the new version of the German Corporate
+Governance Code, which took effect at the start of 2020, the
+Supervisory Board intends to review the Management Board's
+current compensation plan in the course of next financial year,
+make any resulting adjustments, and put a potentially revised
+compensation plan up for vote at the 2021 Annual Shareholders
+Meeting.
+Dr.-Ing. Birnbaum was appointed Chairman of the innogy SE
+Management Board effective October 11, 2019, through Septem-
+ber 30, 2022. As Chief Operating Officer-Integration, Dr.-Ing.
+Birnbaum remains a member of the E.ON SE Management
+Board and therefore has dual mandate within the meaning of
+Section 88, Paragraph 1, Sentence 2 of the German Stock Corpo-
+ration Act (see pages 80 and 81 for details). The compensation
+modalities that apply to Dr.-Ing. Birnbaum due to his dual man-
+date are explained in detail in the section entitled "Total Compen-
+sation in 2019" on page 80.
+Summary Overview of Compensation Components¹
+Compensation component
+Non-performance-based
+compensation
+Metric/Parameter
+Base salary
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Management
+Board and Supervisory Board and provides information about
+the compensation granted and paid in 2019. It applies the pro-
+visions of accounting standards for capital-market-oriented
+companies (the German Commercial Code, German Accounting
+Standards, and International Financial Reporting Standards) and
+the recommendations of the German Corporate Governance
+Code dated February 7, 2017.
+Fringe benefits
+Annual bonus
+Possibility of special
+Long-term variable compensation:
+E.ON Share Matching Plan (granted
+until 2016)
+Long-term variable compensation:
+E.ON Performance Plan
+(granted from 2017)
+•
+Management Board Chairman: €1,240,000
+•
+Management Board members: €700,000-€800,000
+Report of the Supervisory Board
+Strategy and Objectives
+Performance-based compensation
+Compensation Report Pursuant to Section 289a,
+Paragraph 2, and Section 315a, Paragraph 2, of
+the German Commercial Code
+The following table provides a summary overview of the indi-
+vidual components of the Management Board's compensation
+as well as their respective metrics and parameters:
+70
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+69
+69
+The EU Regulation on Statutory Audit introduced an obligation
+for the statutory auditor and/or firm to be rotated periodically.
+Such a rotation is intended for the 2021 financial year. After the
+conclusion of the legally mandated multistage review process
+and on the basis of the Audit and Risk Committee's recommen-
+dation, the Supervisory Board intends to recommend to the 2020
+Annual Shareholders Meeting to appoint Pricewaterhouse-
+Coopers GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf,
+to be independent auditor and Group independent auditor for
+the 2020 financial year and to audit the Condensed Consolidated
+Interim Financial Statements and Interim Group Management
+Reports for the 2020 financial year and to appoint KPMG AG
+Wirtschaftsprüfungsgesellschaft to be independent auditor and
+to audit the Condensed Consolidated Interim Financial State-
+ments and Interim Group Management Report for the first quarter
+of 2021 and to recommend to the 2021 Annual Shareholders
+Meeting to appoint KPMG AG Wirtschaftsprüfungsgesellschaft
+to be independent auditor and Group independent auditor and to
+audit the Condensed Consolidated Interim Financial Statements
+and Interim Group Management Reports for the 2021 financial
+year and the first quarter of the 2022 financial
+year.
+Women and Men in Leadership Positions Pursuant to Section 76,
+Paragraph 4, and Section 111, Paragraph 5, of the German
+Stock Corporation Act
+70
+In May 2017 the Management Board set a target of 30 percent
+for the proportion of women in the first level of management
+below the Management Board and a target of 35 percent for the
+second level of management below the Management Board. The
+deadline for achieving both targets is June 30, 2022. At year-end
+2019, the proportion of women in first and second levels of man-
+agement below the Management Board was roughly 31 percent
+and roughly 23 percent, respectively.
+For all other E.ON Group companies concerned, targets and dead-
+lines pursuant to the Law for the Equal Participation of Women
+and Men in Leadership Positions in the Private Sector and the
+Public Sector were set for the proportion of women on these com-
+panies' supervisory board and management board or team of
+managing directors as well as in the next two levels of manage-
+ment. The deadline for achieving these targets is June 30, 2022.
+Diversity Concept for the Management Board
+At its meeting in December 2017 the E.ON SE Supervisory
+Board adopted a resolution on the following succession planning/
+diversity concept for the Management Board:
+In cooperation with the Executive Committee and the Manage-
+ment Board, the Supervisory Board is in charge of long-term
+succession planning for the Management Board. With regard to
+the Management Board's composition, the Supervisory Board of
+E.ON SE has developed a diversity concept that is in line with the
+recommendations of the German Corporate Governance Code.
+Appointment Objectives
+.•
+In the year under review, the Management Board consisted ini-
+tially of four and subsequently of five men. In December 2016
+the Supervisory Board set a new target of 20 percent for the
+proportion of women on the Management Board and a deadline
+of December 31, 2021, for implementation.
+•
+•
+Corporate Governance Report
+With the exception of the target quota regarding the share of
+women, which is to be achieved by December 31, 2021, the
+current composition of the Management Board already meets
+the appointment objectives described above.
+Achievement of Objectives
+Attention shall be paid to diversity when appointing mem-
+bers of the Management Board. For the Supervisory Board,
+diversity means, in particular, different complementary
+academic profiles, professional and personal experience,
+personalities, as well as internationality and a reasonable age
+and gender structure. The Supervisory Board has therefore
+adopted a target quota of 20 percent for the share of women
+on the Management Board; this target shall be achieved by
+December 31, 2021.
+The members of the Management Board shall be leaders and
+as such shall act as role models for the employees through
+their own performance and conduct.
+The appointment period of a member of the Management
+Board shall generally end at the end of the month on which the
+Management Board member reaches the general retirement
+age but by the end of the month of the subsequent Annual
+Shareholders Meeting at the latest.
+The Management Board as a whole must have expertise and
+experience in the energy sector as well as in the fields of
+finance and digitization.
+When appointing members of the Management Board, the
+candidates' outstanding professional qualifications, long-
+term leadership experience and past performance, as well as
+value-driven management shall be of paramount importance.
+Members shall be capable of taking forward-looking strate-
+gic decisions. In particular, they shall be capable of managing
+businesses sustainably and of ensuring that they are consis-
+tently focused on customer needs.
+•
+•
+The total compensation of the members of the Supervisory Board
+in the 2019 financial year amounted to €4.3 million (prior year:
+€4.1 million). The main reason for the increase in total compen-
+sation is that the Annual Shareholders Meeting passed a resolu-
+tion on May 14, 2019, to increase, owing to the acquisition of a
+majority stake in innogy SE, the size of the E.ON SE Supervisory
+Board by six members to a total of 20 members until new elec-
+tions are held in 2020. As in the prior year, no loans or advance
+payments were granted to Supervisory Board members in the
+2019 financial year.
+Payments Made to Former Members of the Management Board
+Total payments made to former Management Board members
+and to their beneficiaries amounted to €10.8 million (prior
+year: €12.5 million). Provisions of €161.3 million (prior year:
+€155.8 million)-pursuant to IFRS-have been provided for
+pension obligations to former Management Board members
+and their beneficiaries.
+The compensation of Supervisory Board members is determined
+by the Annual Shareholders Meeting and governed by Section 15
+of the Company's Articles of Association. The purpose of the
+compensation plan is to enhance the Supervisory Board's inde-
+pendence for its oversight role. Furthermore, there are a num-
+ber of duties that Supervisory Board members must perform
+irrespective of the Company's financial performance. Supervisory
+Board members-in addition to being reimbursed for their
+expenses-therefore receive fixed compensation and compen-
+sation for committee duties.
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The
+other members of the Supervisory Board receive compensation
+of €140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit and
+Risk Committee, an additional €110,000. Other committee
+chairmen receive an additional €140,000; committee members, an
+additional €70,000. Members serving on more than one com-
+mittee receive the highest applicable committee compensation
+only. In contradistinction to the compensation just described,
+the Chairman and the Deputy Chairmen of the Supervisory Board
+receive no additional compensation for their committee duties.
+In addition, Supervisory Board members are paid an attendance
+fee of €1,000 per day for meetings of the Supervisory Board
+or its committees. Individuals who were members of the Super-
+visory Board or any of its committees for less than an entire
+financial year receive pro rata compensation.
+Supervisory Board Compensation in 2019
+Compensation Plan for the Supervisory Board
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+committee duties
+Supervisory Board Compensation
+Supervisory Board
+compensation
+Compensation for
+Attendance fees
+Total
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into any
+contingencies on behalf of the members of the Management
+Board in the 2019 financial year. Page 242 contains additional
+information about the members of the Management Board.
+Supervisory Board
+compensation from
+affiliated companies
+Other Information
+1,2 See footnotes on page 82.
+1,188,000
+1,706,983
+945,000
+€
+Multi-year variable compensation
+825,000
+825,000
+1,650,000
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+263,582
+1,970,565
+- Performance Plan, second tranche (2018-2021)
+- Performance Plan, third tranche (2019-2022)
+Total
+825,000
+1,650,000
+Service cost
+Total
+2,267,442
+279,842
+2,547,284
+2,261,983
+263,582
+2,525,565
+761,983 3,761,983
+263,582
+263,582
+1,025,565 4,025,565
+1,955,442
+279,842
+2,235,284
+825,000
+2019
+Andreas Scheidt
+2019
+260,000
+14,000
+9,000
+334,000
+269,000
+1,188,000
+320,000
+13,000
+9,000
+333,000
+329,000
+Clive Broutta
+140,000
+140,000
+70,000
+70,000
+8,000
+320,000
+2018
+Erich Clementi
+5,000
+2018
+2019
+2018
+2019
+2018
+2019
+2018
+Dr. Karl-Ludwig Kley
+440,000
+440,000
+12,000
+8,000
+452,000
+448,000
+Prof. Dr. Ulrich Lehner
+(until May 9, 2018)
+133,333
+138,333
+1,350,000
+2019
+675,000
+Current pension entitlement at December 31
+Pensions of Management Board Members Pursuant to IFRS
+is calculated pursuant to IFRS and the German Commercial
+Code. An actuarial interest rate according to IFRS of 1.3 percent
+(prior year: 2.0 percent) was used for discounting; the actuarial
+interest rate pursuant to the German Commercial Code was
+2.71 percent (prior year: 3.21 percent).
+The following table provides an overview of the current pension
+obligations to Management Board members, the additions to
+provisions for pensions, and the cash value of pension obligations
+for the 2019 financial year. The cash value of pension obligations
+Management Board Pensions in 2019
+79
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+- Share Matching Plan, second tranche (2014-2018)
+- Share Matching Plan, third tranche (2015-2019)
+- Performance Plan, second tranche (2018-2021)
+- Performance Plan, third tranche (2019-2022)
+Total
+825,000
+825,000
+1,650,000
+Service cost
+Total
+Additions to provisions for pensions
+1, 2 See footnotes on page 82.
+Cash value at December 31
+of annual base
+compensation
+2018
+2019
+(€)
+(€)
+2018
+2019
+525,001
+1,378,642
+1,410,074
+(€)
+2018
+2019
+(€)
+2018
+930,000
+2019
+930,000
+75
+75
+Dr. Johannes Teyssen
+2018
+2019
+Thereof interest cost
+As a percentage
+675,000
+2,243,456
+220,067
+2,463,523
+748,607
+192,602
+941,209
+700,000
+700,000
+700,000
+700,000
+700,000
+67,442
+61,983
+61,983
+61,983
+67,442
+767,442
+761,983
+761,983
+761,983
+767,442
+61,983
+761,983
+One-year variable compensation
+700,000
+2,248,607
+192,602
+2,441,209
+2019
+2019
+(max.)1,2
+3,748,607
+192,602
+3,941,209
+1,931,456
+220,067
+2,151,523
+1,693,607
+192,602
+1,886,209
+Corporate Governance Report
+Table of Compensation Granted and Allocated
+84
+Dr. Karsten Wildberger (Chief Operating Officer-Commercial)
+Compensation granted
+Compensation allocated
+2018
+8,000
+in €
+Fixed compensation
+Fringe benefits
+Total
+2019
+(min.)
+2018
+218,000
+9,000
+Klaus Fröhlich
+8,000
+9,000
+288,000
+289,000
+Dr. Theo Siegert
+(until May 9, 2018)
+Elisabeth Wallbaum
+140,000
+58,333
+140,000 110,000
+75,000
+7,000
+110,000
+9,000
+10,000
+140,333
+259,000
+260,000
+140,000
+Deborah Wilkens
+140,000
+8,938
+since May 29, 2018)
+140,000
+140,000
+110,000
+110,000
+16,000
+13,000
+17,856
+24,469
+283,856
+287,469
+Silvia Šmátralová
+(until May 9, 2018)
+Dr. Karen de Segundo
+140,000
+58,333
+140,000
+4,000
+71,271
+(until May 9, 2018;
+(since October 1, 2019)
+27,500
+85
+Separate Combined
+Non-Financial Report
+Separate Combined Non-Financial Report
+88
+Separate Combined Non-Financial Report
+Purpose and Scope
+The purpose of this Separate Combined Non-Financial Report is
+to comply with the reporting requirements of the German CSR
+Directive Implementation Act (Section 315c in conjunction with
+Sections 289c to 289e of the German Commercial Code). It
+applies to both the E.ON Group and E.ON SE (hereinafter: E.ON).
+In addition to general information, the report contains informa-
+tion on the five mandatory aspects: the environment, employees,
+social matter, human rights, and anti-corruption. This informa-
+tion is for the reporting period January 1 to December 31, 2019.
+The report encompasses all subsidiaries that are fully consolidated
+in E.ON's Consolidated Financial Statements. Any deviations
+from this are indicated.
+Effective September 18, 2019 E.ON took ownership of RWE's
+innogy stake (76.8 per cent) and in late September the innogy
+stock tendered in a voluntary public takeover offer. Together with
+the innogy stock acquired on-market, this gave E.ON a roughly
+90-percent stake in innogy, which is thus a fully consolidated
+E.ON subsidiary.
+The policies mentioned below issue instructions, set minimum
+standards, assign responsibilities, and define management
+tools for the various non-financial issues. They are reviewed on
+an ongoing basis. Group policies are binding for all companies
+in which E.ON holds a majority stake and for projects and part-
+nerships for which E.ON has operational responsibility. Contrac-
+tors and suppliers are also required to meet E.ON's minimum
+standards.
+Although E.ON's management approaches govern the innogy
+takeover, innogy's own guidelines continue to apply at its busi-
+nesses on an interim basis. innogy has an established governance
+organization. Its guidelines are backed by functioning processes
+and reporting pathways. For a transitional phase, E.ON has no
+specific plans for innogy's management approaches. The man-
+agement approaches described here therefore refer exclusively
+to E.ON. innogy's management approaches can be found in its
+2019 Separate Combined Non-Financial Report. In the months
+ahead, innogy's and E.ON's policies and processes will be
+reviewed and, where necessary, harmonized or combined.
+The business operations at the Renewables segment that was
+transferred to RWE are included in E.ON's key performance
+indicators ("KPIs") until late September 2019. A separate innogy
+segment, consisting mainly of network and sales businesses,
+became part of the E.ON Group on September 18, 2019. Con-
+sequently, the reporting includes a number of innogy KPIs after
+this date. As a rule, however, KPIs refer to E.ON without innogy.
+If KPIs of innogy's continuing operations are disclosed they and
+their respective time frame are clearly indicated. Time frames
+may differ owing to the nature of a KPI, the availability of data,
+and internal collection and reporting processes. E.ON's KPIs
+include Preussen Elektra's business operations.
+Business Model
+E.ON's two core businesses, Energy Networks and Customer
+Solutions, promote the sustainable development of the energy
+industry. Detailed information about E.ON's business model
+can be found in the Combined Group Management Report. The
+Combined Group Management Report shows two other segments
+for the 2019 financial year: Renewables and innogy.
+General Information
+E.ON strives to always do business responsibly and therefore
+monitors all material impacts of its business operations. E.ON
+considers not only financial aspects but also environmental
+and social issues along the entire value chain. The systematic
+consideration of non-financial issues enable E.ON to identify
+opportunities and risks for its business development early. In
+addition to the expectations of investors, E.ON takes into account
+the expectations of other key stakeholders like customers and
+employees.
+In 2019 E.ON's materiality assessment consisted of a thorough
+review of its 2018 analysis to determine which non-financial
+issues are essential for understanding E.ON's business perfor-
+mance, financial results, and situation and to evaluate the
+impact of its business operations. E.ON checked whether there
+had been important changes in the UN Sustainable Development
+Goals (SDGs), E.ON's own strategy, and its policy and regulatory
+environment. In addition, E.ON compared innogy's main issues
+with its own. The review showed that there have been no sig-
+nificant changes and that the innogy takeover does not appear
+to necessitate a change in E.ON's issues. The following non-
+financial issues from 2018 therefore remain material for E.ON.
+945,000
+a deductible of 10 percent of the respective damage claim
+for Management Board and Supervisory Board members. The
+deductible has a maximum cumulative annual cap of 150 percent
+of a member's annual fixed compensation.
+35,000
+The Company has taken out D&O insurance for Management
+Board and Supervisory Board members. In accordance with
+the German Stock Corporation Act and the German Corporate
+Governance Code's recommendation, this insurance includes
+66,664
+15,808 241,000 233,808
+20,000 243,000 238,000
+85,036 4,283,977 4,071,368
+3,000
+Ewald Woste
+140,000
+140,000
+70,000
+70,000
+8,000
+Albert Zettl
+140,000
+140,000
+70,000
+Total
+2,865,001 2,833,331 1,090,000
+70,000
+1,015,001
+13,000
+161,000
+8,000
+8,000
+138,000
+1,164
+23,000
+20,000
+167,976
+Other
+Fred Schulz
+37,000
+2,000
+140,000
+140,000
+110,000
+96,667
+9,000
+520,125
+56,498
+259,000
+245,667
+Baroness
+Denise Kingsmill CBE
+(until May 9, 2018)
+58,333
+4,000
+62,333
+Monika Krebber (since
+September 24, 2019)
+Eugen-Gheorghe Luha
+46,667
+2,000
+Carolina Dybeck Happe
+32,548
+998
+17,500
+(since May 29, 2018)
+140,000
+93,333
+70,000
+46,667
+8,000
+2,000
+Tibor Gila
+(until May 9, 2018)
+58,333
+4,000
+218,000
+142,000
+62,333
+Ulrich Grillo
+(since October 1, 2019)
+35,000
+3,000
+140,000
+140,000
+70,000
+September 24, 2019)
+46,667
+27,500
+3,000
+42,448
+119,615
+Andreas Schmitz
+140,000
+140,000
+180,000
+156,667
+14,000
+10,000
+334,000
+306,667
+Dr. Rolf Martin Schmitz
+(since October 1, 2019)
+35,000
+René Pöhls (since
+96,129
+29,962
+2,000
+70,000
+8,000
+8,000
+15,821
+81,215
+218,000
+233,821
+Szilvia Pinczésné Márton
+(since May 9, 2018)
+218,000
+140,000
+6,000
+3,000
+146,000
+96,333
+Stefan May (since
+September 24, 2019)
+46,667
+17,500
+93,333
+28,139,682 26,250,050
+320,000
+(E.ON SE)
+- Performance Plan, second tranche (2018-2021)
+1,312,150
+- Share Matching Plan, third tranche (2015-2019)
+1,387,150
+939,502
+939,502
+- Share Matching Plan, second tranche (2014-2018)
+827,116
+1,137,309
+241,788
+827,212
+1,452,000
+4,519
+1,008,333
+27,116
+800,000
+88,406
+800,000
+2019
+Compensation allocated
+2018
+2019
+(max.)1,2
+800,000
+88,406
+27,116
+4,519
+827,116
+1,693,808
+414,493
+2,091,666
+75,000
+1,083,333
+1,008,333
+Multi-year variable compensation
+27,212
+- Performance Plan, third tranche (2019-2022)
+- Substitute payment "LTI innogy" (2019-2021)5
+Total
+³For the period October 11 - December 31, 2019.
+1,2 See the footnotes on page 82.
+3,764,184
+3,523,406
+5,025,200
+1,314,725
+3,192,990
+2,965,237
+Total
+195,667
+412,609
+75,000
+3,351,575
+3,218,714
+304,692
+2,016,666
+75,000
+4,612,591
+412,609
+195,667
+75,000
+902,116
+412,609
+195,667
+412,609
+195,667
+Thereof innogy SE5,6
+304,692
+Service cost
+1,008,333
+75,000
+2,780,381
+2,660,545
+230,274
+Thereof innogy SE³,4
+869,932
+825,000
+8,465,864
+885,073
+858,517
+885,073
+885,073
+2,165,864
+5,519,429
+5,815,310
+7,580,791
+1,280,791
+3,465,000
+1,732,500
+4,430,791
+885,073
+5,315,864
+858,517
+5,289,882
+Total
+Service cost
+4,431,365
+1,732,500
+- Performance Plan, second tranche (2018-2021)
+- Performance Plan, third tranche (2019-2022)
+Total
+2,254,138
+- Share Matching Plan, third tranche (2015-2019)
+2,039,145
+- Share Matching Plan, second tranche (2014-2018)
+6,673,827
+"The maximum innogy SE cap is 180 percent; the maximum E.ON SE cap is 200 percent.
+6,404,502
+Table of Compensation Granted and Allocated
+One-year variable compensation4
+27,116
+4,519
+827,116
+827,116
+827,212
+Total
+4,519
+Thereof innogy SE5
+27,116
+27,212
+88,406
+800,000
+800,000
+88,406
+Thereof innogy SE5
+800,000
+2019
+(min.)
+Fringe benefits
+Fixed compensation
+€
+2019
+2018
+Dr.-Ing. Leonhard Birnbaum (Chief Operating Officer-Integration)
+Compensation granted
+¹The maximum amount disclosed under benefits granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
+2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 76, applies as well.
+2,254,138
+5See the explanation regarding Dr.-Ing. Birnbaum on page 80.
+Table of Compensation Granted and Allocated
+€
+2019
+2018
+Compensation granted
+Table of Compensation Granted and Allocated
+1,857,655
+168,391
+54,807
+1,181,916
+1,689,264
+Fixed compensation
+1,127,109
+744,264
+168,391
+912,655
+1,650,000
+825,000
+2,244,264
+168,391
+2,412,655
+1,363,916
+1,309,109
+54,807
+Dr.-Ing. Leonhard Birnbaum¹
+Total
+Service cost
+- Performance Plan, third tranche (2019-2022)
+Total
+3,744,264
+168,391
+3,912,655
+Fringe benefits
+Total
+700,000
+43,456
+748,607
+48,607
+700,000
+700,000
+43,456
+743,456
+748,607
+1,350,000
+1,650,000
+825,000
+825,000
+Multi-year variable compensation
+675,000
+675,000
+One-year variable compensation
+748,607
+748,607
+743,456
+2019
+Dr. Marc Spieker (Chief Financial Officer)
+Compensation allocated
+2018
+2019
+(max.)1,2
+700,000
+48,607
+48,607
+48,607
+2019
+(min.)
+700,000
+700,000
+481,250
+- Performance Plan, second tranche (2018-2021)
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, second tranche (2014-2018)
+700,000
+700,000
+408,333
+(max.)1,2
+(min.)
+Total
+Fringe benefits
+Fixed compensation
+€
+2019
+Compensation allocated
+2018
+2019
+2019
+2019
+2018
+Compensation granted
+(Chief Operating Officer-Networks since June 1, 2018)
+Dr. Thomas König
+83
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+700,000
+6From October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum's innogy SE pension entitlement is borne by E.ON SE.
+408,333
+25,776
+1,650,000
+825,000
+481,250
+Multi-year variable compensation
+945,000
+693,000
+1,350,000
+675,000
+393,750
+One-year variable compensation
+744,264
+434,109
+744,264
+744,264
+744,264
+434,109
+44,264
+25,776
+44,264
+44,264
+44,264
+700,000
+2,039,145
+1,2See footnotes on page 82.
+1,732,500
+403,263 356,229
+2- Voluntary supplemental disclosure.
+1"Contribution Plan E.ON Management Board."
+Dr. Karsten Wildberger¹
+Dr. Marc Spieker¹
+(since June 1, 2018)
+Dr. Thomas König¹
+172,476
+172,476
+292,176
+373,061
+(innogy SE)
+1,578,534 1,246,423
+40,104
+40,010
+156,636
+332,111
+(E.ON SE)
+Dr.-Ing. Leonhard Birnbaum¹
+21,494,788
+696,853 22,059,264
+Dr.-Ing. Leonhard Birnbaum²
+66,048
+62,291
+22,465
+190,863
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Dr.-Ing. Birnbaum continues to participate in the E.ON Perfor-
+mance Plan, which is described on page 74. This plan will be
+continued analogously by innogy SE-that is, based on E.ON SE's
+capital market performance—and granted with a target value of
+€1,008,333 per year. To reflect the increase in his responsibilities
+and the bigger and special challenges he faces, from the 2020
+financial year onward Dr.-Ing. Birnbaum will also be granted
+annual long-term variable compensation with a target value
+of €300,000, which depends exclusively on innogy SE's perfor-
+mance ("LTI innogy"). For the last three months of 2019, Dr.-Ing.
+Birnbaum will receive, in place of the "LTI innogy," a non-pension-
+able one-time payment equal to one quarter of the target value.
+In line with the modalities of innogy SE's multi-year variable
+compensation, payment will first be made in October 2021.
+target achievement for the company bonus amounts to 150
+cent. The latter figure is also the cap on the company bonus,
+which cannot be exceeded even if adjusted EBIT is higher. The
+lower limit is reached if adjusted EBIT is exactly 80 percent
+of the target figure which has been set. In this case, the target
+achievement for the company bonus amounts to 50 percent.
+If the EBIT figure is lower than this 80-percent threshold, no
+company bonus is paid out to the Management Board members.
+Depending on the level of adjusted EBIT achieved, the company
+bonus paid can be between 0 percent and 150 percent of the
+target bonus amount. The personal performance of Management
+Board members is considered by multiplying the company bonus
+by an individual performance factor, which can range between
+0.8 and 1.2. At Dr.-Ing. Birnbaum's appointment in October 2019,
+it was decided to dispense with individual targets and target
+key figures to determine his personal performance factor for the
+remainder of the year. Instead, for a single time the innogy SE
+Supervisory Board assessed Dr.-Ing. Birnbaum's overall perfor-
+mance for 2019 and set a performance factor for his 2019
+bonus. The bonus is determined by multiplying the contractually
+agreed target bonus by the target achievement for the company
+bonus and the personal performance factor. The bonus deter-
+mined in this manner can range between 0 percent and a maxi-
+mum of 180 percent of the contractual target bonus and is paid
+out in full after the end of the financial year.
+per-
+The "bonus innogy" is based on innogy's business performance
+and the degree to which the individual and collective goals of the
+Management Board are met. The starting point for calculating
+the bonus is what is referred to as the "company bonus," which
+depends on the level of innogy SE's adjusted EBIT and is deter-
+mined as follows: At the start of each financial year, the innogy SE
+Supervisory Board sets a target figure for adjusted EBIT. After
+the end of the financial year, the actual level of adjusted EBIT
+achieved is compared with the target figure. If the figures are
+identical, the target achievement is 100 percent and the com-
+pany bonus equals the contractually agreed target bonus. If
+adjusted EBIT exceeds or undershoots the established target,
+target achievement increases or decreases by a factor of 2.5.
+If adjusted EBIT is exactly 120 percent of the target figure, the
+Since his appointment as Chairman of the innogy SE Manage-
+ment Board effective October 11, 2019, Dr.-Ing. Birnbaum
+receives, in place of his E.ON SE bonus, an innogy SE bonus
+with a target bonus of €1,025,000 for a full financial year
+("bonus innogy").
+Dr.-Ing. Birnbaum will continue to receive base compensation
+of €800,000.
+Compensation Modalities of Dr.-Ing. Birnbaum's Dual Mandate
+Since his appointment as Chairman of the innogy SE Manage-
+ment Board effective October 11, 2019, Dr.-Ing. Birnbaum has
+had dual mandate within the meaning of Section 88, Paragraph 1,
+Sentence 2 of the German Stock Corporation Act. Since this
+date, Dr.-Ing. Birnbaum receives compensation from innogy SE
+only. The compensation-related clauses of Dr.-Ing. Birnbaum's
+service agreement with E.ON SE will be suspended for the dura-
+tion of his service as member and Chairman of the innogy SE
+Management Board. The modalities of his compensation are as
+follows:
+The total compensation of the members of the Management
+Board in the 2019 financial year amounted to €15.6 million,
+about 1.9 percent below the prior-year figure of €15.9 million
+based on the Management Board's total compensation disclosed
+in the 2018 Annual Report.
+Total Compensation in 2019
+80
+80
+Corporate Governance Report
+Pursuant to IFRS and the German Commercial Code, the cash
+values of Management Board pensions for which provisions are
+required increased as of December 31, 2019, relative to year-
+end 2018. This resulted in part from increases in the number of
+years of service. Another reason is that the actuarial interest rate
+for discounting was below the prior-year figure.
+- from October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum's innogy SE pension entitlement is borne by E.ON SE.
+699,857
+606,025
+992,033
+979,086
+2,343,798 1,940,535
+58,302
+23,324
+15,278
+19,453
+689,983
+564,476 2,558,564
+(€)
+2018
+2019
+14,393
+290,723
+277,975
+17,223
+237,498
+209,825
+44,685
+79,088
+213,076
+195,667
+Dr. Karsten Wildberger¹
+Dr. Marc Spieker¹
+(since June 1, 2018)
+Dr. Thomas König¹
+(innogy SE)
+Dr.-Ing. Leonhard Birnbaum²
+27,917 1,890,048 1,450,521
+29,011
+332,609
+245,953
+3,465,000
+24,281
+17,431
+10,881
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+1,279,272
+1,198,385
+195,667
+2018
+2019
+(€)
+(€)
+2018
+2019
+2018
+930,000
+930,000
+2019
+2018
+75
+75
+Dr. Johannes Teyssen
+2019
+(€)
+Thereof interest cost
+of annual base
+compensation
+As a percentage
+Cash value at December 31
+Additions to provisions for pensions
+Pensions of Management Board Members Pursuant to the German Commercial Code
+Current pension entitlement at December 31
+2From October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum's innogy SE pension entitlement is borne by E.ON SE.
+1"Contribution Plan E.ON Management Board."
+861,135
+719,674
+81
+2,733,075 2,234,273
+For Dr.-Ing. Birnbaum's duties as a member of the E.ON SE
+Management Board, E.ON SE reimburses innogy SE for the costs
+of his duties that are attributable to E.ON SE; innogy SE pays
+out these costs to Dr.-Ing. Birnbaum. Pursuant to the service
+agreement between innogy SE and Dr.-Ing. Birnbaum, these
+reimbursed costs consist of the following compensation compo-
+nents: 50 percent of base compensation from October 11, 2019,
+forward; 100 percent of the payment of the tranches of the
+E.ON Performance Plan granted from January 1, 2020, forward;
+50 percent of the contributions made by innogy SE to the "Con-
+tribution Plan E.ON Management Board" from October 11, 2019.
+41,365
+1,240,000
+Fringe benefits
+Fixed compensation
+€
+2019
+2018
+Compensation granted
+Dr. Johannes Teyssen (Chief Executive Officer)
+Total
+82
+Table of Compensation Granted and Allocated
+The following table shows the compensation granted and
+allocated in 2019 in the format recommended by the German
+Corporate Governance Code:
+Corporate Governance Report
+³Dr.-Ing. Birnbaum receives the substitute payment "LTI innogy" with long-term incentive effect (2019-2021) in the amount of €75,000.
+¹The present value assigned to the virtual shares of E.ON stock at the time of granting for the third tranche of the E.ON Performance Plan was €6.68 per share.
+2See the explanation regarding Dr.-Ing. Birnbaum on page 80.
+205,251 5,290,833 4,872,083 15,610,403 15,941,467
+222,761
+25,776 825,000 481,250 2,514,264 1,608,359
+43,456 825,000 825,000 2,518,607 2,756,456
+67,442 825,000 825,000 2,531,983 2,780,442
+48,607
+61,983
+82
+44,264
+1,281,365
+2019
+(min.)
+1,240,000
+1,732,500
+In addition, Dr.-Ing. Birnbaum continues to participate in the
+"Contribution Plan E.ON Management Board", a contribution-
+based pension plan. This plan is suspended at E.ON SE from
+October 11, 2019, until Dr.-Ing. Birnbaum's service agreement
+with E.ON SE takes effect again and is continued and adminis-
+tered by innogy SE during this period. Dr.-Ing. Birnbaum retains
+his accrued entitlements from E.ON SE.
+Multi-year variable compensation
+1,984,500
+2,494,800
+2,835,000
+1,417,500
+1,417,500
+One-year variable compensation
+1,240,000
+40,791
+1,280,791
+40,791
+1,280,791
+1,280,791
+41,365
+40,791
+40,791
+1,240,000
+1,240,000
+2019
+Compensation allocated
+2018
+2019
+(max.)1,2
+1,240,000
+1,281,365
+700,000 408,333 945,000 693,000
+700,000 700,000 945,000 1,188,000
+700,000 700,000 945,000 1,188,000
+4,140,000 3,848,333 5,956,809 7,015,800
+1,280,791
+Dr. Karsten Wildberger
+€
+Total Compensation of the Management Board
+The individual members of the Management Board had the
+following total compensation.
+50
+50
+100
+100
+100
+100
+100
+50
+50
+E.ON SE
+Company Pension Entitlements
+E.ON Performance Plan until 2019
+Substitute payment "LTI innogy"
+(2019-2021)
+2019 E.ON bonus
+2019 innogy bonus
+Fixed compensation
+Benefits
+Percentages
+The cost allocation is as follows:
+Total
+Cost Allocation 2019 of Dr.-Ing. Leonhard Birnbaum's
+Compensation (since October 11, 2019)
+Fixed annual
+compensation
+2019
+innogy SE
+2019
+Dr. Thomas König
+Total
+2018
+5,508,665
+3,287,545
+2018
+4,997,791
+3,047,758
+409,713
+41,365 1,732,500 1,732,500
+27,212 1,083,333 1,008,333
+75,000³
+Dr. Marc Spieker
+(since June 1, 2018)
+800,000 800,000 1,137,309 1,452,000
+88,406
+241,788
+Thereof innogy SE
+Dr.-Ing. Leonhard Birnbaum²
+2019
+27,116
+4,519
+Value of stock-based
+compensation granted¹
+2018
+2019
+2018
+2019
+40,791
+2,494,800
+1,240,000 1,240,000 1,984,500
+Dr. Johannes Teyssen
+Bonus
+2018
+Other compensation
+0.39
+4Attributable to shareholders of E.ON SE.
+0.68
+-43
+0.63
+0.67
+0.46
+0.47
+¹Includes until September 18, 2019, the discontinued operations in the Renewables segment (see Note 5 to the Consolidated Financial Statements).
+2Adjusted for non-operating effects.
++2
+1,225
+1,199
+³Change in percentage points.
++2
+-6
+Dividend payout
+32
+Adjusted net income per share 1, 4,5 (€)
+Employees (at year-end)¹
+- Percentage of female employees
+- Average age
+5Based on shares outstanding (weighted average).
+ROCE (%)¹
+6.2
+8.3
+Dividend per share (€)
+-2.13
+78,948
+-1
+33
+-13
+42
+42
+Earnings per share4,5 (€)
+78,126
+6For the respective financial year; the 2020 figure represents management's dividend proposal.
+Management System
+•
+Innovation
+28
+Business Report
+28
+Macroeconomic and Industry Environment
+31 Business Performance
+32
+25
+Earnings Situation
+Financial Situation
+41
+Asset Situation
+-3
+42
+48
+49
+37
+• Merger squeeze-out of innogy's remaining minority
+Special Events in the Reporting Period
+20
+shareholders concluded
+European Commission's conditions for innogy
+takeover completely fulfilled
+Transfer of innogy bonds to E.ON concluded
+Adjusted EBIT and adjusted net income
+within forecast range revised in August 2020
+• 2021 adjusted EBIT expected to be between
+€3.8 and €4.0 billion, 2021 adjusted
+net income between €1.7 and €1.9 billion
+• Proposed dividend of €0.47 per share for
+the 2020 financial year
+• Annual growth of dividend per share
+of up to 5 percent through the dividend for the
+2023 financial year targeted
+24
+• Ambitious climate targets decided-E.ON
+climate-neutral by 2050
+12 Strategy and Objectives
+Combined Group Management Report
+Contents
+20
+Corporate Profile
+20
+Business Model
+4 Report of the Supervisory Board
+98,080
+- Regulated business (%)
+Total assets
+4
+13
+-93
+- Merchant business (%)
+Adjusted EBIT1, 2
+23
+22
++13
+3,776
+3,220
++17
+79
+70
++93
+- Quasi-regulated and long-term contracted business (%)
++83
+65
+73
+- Quasi-regulated and long-term contracted business (%)
+E.ON Group at a Glance
+49
+e.on
+€ in millions
+Sales¹
+Adjusted EBITDA1,2
+2020
+3
+2019
+60,944
+41,284
++48
+6,905
+5,564
++24
+- Regulated business (%)
++1-%
+95,385
+11
+- Merchant business (%)
+5,313
+2,965
++79
+Cash provided by operating activities before interest and taxes¹
+5,948
+4,407
++35
+Economic net debt (at year-end)1
+40,736
+38,895
++5
+Equity
+9,055
+13,248
+-32
+Cash provided by operating activities¹
+-24
+5,492
+4,171
+18
+19
+-13
+Net income/loss
+1,270
+1,792
+-29
+-83
+Net income/loss attributable to shareholders of E.ON SE
+1,550
+-34
+Adjusted net income 1, 2
+1,638
+1,526
++7
+Investments¹
+1,017
+- ROCE
+210
+54
+218
+(38) List of Shareholdings Pursuant to Section 313 (2) HGB
+236
+Other Information
+238
+Declaration of the Management Board
+239
+Independent Auditor's Report
+246
+248
+Boards
+248
+Independent Practitioner's Report on Non-financial Reporting
+Supervisory Board (and Information on Other Directorships)
+250
+(36) Compensation of Supervisory Board and Management Board
+(37) Subsequent Events
+217
+216
+(35) Segment Reporting
+184 (26) Miscellaneous Provisions
+187
+(27) Liabilities
+192
+193
+(28) Contingent Liabilities and Other Financial Obligations
+(29) Litigation and Claims
+194
+Management Board (and Information on Other Directorships)
+(30) Supplemental Cash Flow Disclosures
+(31) Derivative Financial Instruments and Hedging Transactions
+198
+(32) Additional Disclosures on Financial Instruments
+208
+(33) Leasing
+(34) Transactions with Related Parties
+211
+194
+(25) Provisions for Pensions and Similar Obligations
+251
+253
+Board, in both cases effective April 1, 2021, and adopted the corresponding
+resolutions. It also discussed and adopted resolutions on extending the
+appointment of Thomas König and Karsten Wildberger as members of
+the Management Board.
+Policy and regulatory developments in countries in which E.ON is active
+constituted another key topic of the Supervisory Board's discussions.
+Alongside the overall and economic policy situation in the individual
+countries, the Supervisory Board focused primarily on the developments
+in European and German energy policy, particularly in conjunction with
+the various economic stimulus packages, the EU's recovery plan, and their
+respective consequences for E.ON's business areas.
+Furthermore, in the context of the Group's current operating business,
+the Supervisory Board addressed in detail the impact of low interest rates
+on E.ON, the general business situation of the Group and its companies,
+national and international energy markets, as well as the currencies that
+are important to E.ON. It discussed E.ON SE's and the E.ON Group's asset,
+financial, and earnings situation, dividend policy, workforce developments,
+and earnings opportunities and risks. The Supervisory Board and the
+Management Board thoroughly discussed the E.ON Group's medium-term
+plan for 2021-2023. The Supervisory Board was provided with informa-
+tion on a regular basis about the Company's health, (occupational) safety,
+and environmental performance (in particular, key accident indicators
+and the Covid-19 infection rate in the Group) as well as current customer
+numbers, customer satisfaction, and the number of apprentices. Further-
+more, the Supervisory Board dealt with E.ON's corporate strategy and
+capital market communications.
+In addition, the Supervisory Board established a procedure for the periodic
+evaluation of related-party transactions and delegated responsibility for
+monitoring to the Audit and Risk Committee. It also discussed E.ON'S
+future funding needs and, where necessary, adopted resolutions. Finally,
+it addressed E.ON's current sustainability strategy and examined and
+approved the Group's non-financial reporting ("CSR").
+Other Key Topics of the Supervisory
+Board's Discussions
+In addition, the Supervisory Board prepared and dis-
+cussed major personnel matters, in particular the depar-
+ture of Johannes Teyssen effective March 31, 2021,
+the appointment of Leonhard Birnbaum as Chairman
+of the Management Board, and the appointment of
+Victoria Ossadnik as a member of the Management
+Report of the Supervisory Board
+8
+Corporate Governance
+In the declaration of compliance issued at the end of the year, the Supervisory Board and the Manage-
+ment Board declared that E.ON is in full compliance with the recommendations of the "Government
+Commission German Corporate Governance Code" dated December 16, 2019, published by the Federal
+Ministry of Justice and Consumer Protection in the official section of the Federal Gazette (Bundesanzeiger)
+on March 20, 2020. The Supervisory Board and the Management Board also declared that E.ON has
+been in full compliance with the recommendations of the "Government Commission German Corporate
+Governance Code" dated February 7, 2017, published by the Federal Ministry of Justice and Consumer
+Protection in the official section of the Federal Gazette (Bundesanzeiger) on April 24, 2017. since the last
+annual declaration in December 2019. The current version of the declaration of compliance as well as
+earlier versions are published online at www.eon.com.
+In the 2020 financial year, Rolf Martin Schmitz, in his capacity as Chairman of the RWE AG Management
+Board, had conflicts of interest in relation to certain operational matters and for this reason did not
+participate in the discussion of individual agenda items. Otherwise, the Supervisory Board is aware of
+no indications of conflicts of interest involving members of the Supervisory Board.
+In the 2020 financial year, education and training sessions on selected operating and non-operating
+issues of E.ON's business were conducted for Supervisory Board members only on a limited basis because
+of the Covid-19 pandemic. An on-boarding program gave new members of the Supervisory Board the
+opportunity to receive a comprehensive introduction to the Company's business operations. The focus
+was on the current status of the regulatory environment and strategic growth areas in the network busi-
+ness as well as strategic priorities in the customer solutions business.
+The targets for the Supervisory Board's composition, including a competency profile and a diversity con-
+cept, with regard to Recommendation C.1 of the German Corporate Governance Code and Section 289f,
+Paragraph 2, Item 6 of the German Commercial Code and the status of their achievement are available in
+the Corporate Governance Declaration on pages 73 and 74.
+2020
+Committee Work
+At several meetings in 2020 and by means of special
+reports, the Management Board informed the Super-
+visory Board and also the Executive Committee about
+the progress of the integration preparations and
+measures as well as the squeeze-out of the remaining
+innogy minority shareholders. In this context, the
+Supervisory Board also discussed the disposals in con-
+junction with the European Commission's antitrust
+conditions and, where necessary, adopted resolutions.
+innogy Integration
+In particular, the importance of ensuring business-critical
+activities was presented and discussed. Furthermore, the
+macroeconomic repercussions as well as scenarios for
+policy decisions were addressed, but possible business
+opportunities arising from the Covid-19 pandemic were
+analyzed as well. In view of the Covid-19 pandemic, from
+March 2020 onward the meetings of the Supervisory
+Board and its committees largely took place virtually.
+From March 2020 onward, the Executive Committee
+supported the Management Board in managing the
+Covid-19 risks. The risks and countermeasures were
+discussed in detail with the Management Board at six
+extraordinary meetings. From March 2020 onward,
+the Supervisory Board and/or its Executive Committee
+continually received reports on the Covid-19 pandemic's
+impact on E.ON's business and business processes.
+Financial Calendar
+Report of the
+Supervisory Board
+Report of the Supervisory Board
+6
+Dear Shareholders,
+Dr. Karl-Ludwig Kley,
+Chairman of the Supervisory Board
+Summary of Financial Highlights
+For E.ON, 2020 was characterized by two events: the integration of innogy SE and
+the Covid-19 pandemic. The squeeze-out of the remaining innogy minority share-
+holders was completed in June. As a result of this, the legal integration of innogy
+was concluded as well. In addition, the antitrust requirements for the divestment
+of parts of the Company were successfully completed. The Covid-19 pandemic
+presented the company with major challenges-both in the market and in terms of
+internal I processes and procedures, which were successfully overcome. The Super-
+visory Board would like to thank the Management Board and all employees for all
+the special efforts that were and are connected with these matters.
+The Management Board regularly provided the Supervisory Board with timely
+and comprehensive information about significant business transactions in both
+written and oral form. At the meetings of the full Supervisory Board and its com-
+mittees, the Supervisory Board had sufficient opportunity to actively discuss the
+Management Board's reports, motions, and proposed resolutions. After thoroughly
+examining and discussing the resolutions proposed by the Management Board,
+the Supervisory Board voted on them when it was required by law, the Company's
+Articles of Association, or the Supervisory Board's rules and procedures. Further-
+more, the Supervisory Board also met on a recurring basis without the Management
+Board being present.
+In addition, there was a regular exchange of information between the Chairman of
+the Supervisory Board and the members of the Management Board, in particular
+the Chairman, during the entire financial year. In the case of particularly pertinent
+issues, the Chairman of the Supervisory Board was kept informed at all times. He
+likewise maintained contact with the members of the Supervisory Board outside
+of board meetings.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+7
+Covid-19 Pandemic
+In the 2020 financial year the Supervisory Board carefully performed all its duties
+and obligations under law, the Company's Articles of Association, and its own rules
+and procedures. It advised the Management Board in detail about the Company's
+management and continually monitored the Management Board's activities,
+assuring itself that the Company's management was legal, purposeful, and orderly.
+At four regular meetings and one extraordinary meeting, it addressed all issues
+relevant to the Company. In addition, it carried out one written resolution procedure.
+On a regular basis, the shareholder representatives and the employee representa-
+tives made separate preparations for these meetings with the participation of one
+or all members of the Management Board. Three Supervisory Board members were
+unable to attend individual Supervisory Board meetings in 2020. Apart from that,
+all members attended all meetings.
+177
+(24) Non-controlling Interests
+175
+120
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+E.ON SE and Subsidiaries Balance Sheets-Assets
+121
+E.ON SE and Subsidiaries Balance Sheets-Equity and Liabilities
+122
+124
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+Statement of Changes in Equity
+126
+Notes
+126
+(1) Summary of Significant Accounting Policies
+140
+(2) New Standards and Interpretations
+141
+(3) Impact of the Covid-19 Pandemic
+119
+E.ON SE and Subsidiaries Consolidated Statements of Income
+118
+116 Consolidated Financial Statements
+57
+65
+Business Segments
+E.ON SE's Earnings, Financial, and Asset Situation
+Other Financial and Non-financial Performance Indicators
+- Employees
+Forecast Report
+142
+Risks and Chances Report
+67
+Disclosures Regarding Takeovers
+70
+Corporate Governance Declaration
+80
+Compensation Report
+98 Separate Combined Non-Financial Report
+Internal Control System for the Accounting Process
+(4) Scope of Consolidation
+142
+(5) Acquisitions, Disposals and Discontinued Operations
+159
+168
+171
+(15) Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+(16) Companies Accounted for under the Equity Method and Other Financial Assets
+(17) Inventories
+171
+(18) Receivables and Other Assets
+172
+(14) Earnings per Share
+(19) Liquid Funds
+(20) Capital Stock
+174
+(21) Additional Paid-in Capital
+174
+(22) Retained Earnings
+175
+(23) Changes in Other Comprehensive Income
+172
+50
+159
+158
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+149
+(6) Revenues
+149
+149
+151
+(13) Other Information
+(7) Own Work Capitalized
+(9) Cost of Materials
+151
+(10) Financial Results
+152
+(11) Income Taxes
+155
+(12) Personnel-Related Information
+(8) Other Operating Income and Expenses
+Annual Report
+In the 2020 financial year the Executive Committee met twelve times and carried out one written reso-
+lution procedure. One member was unable to attend one meeting. Apart from that, all members took part
+in all of the committee's meetings. At its extraordinary meetings, the committee discussed, in particular,
+the Covid-19 pandemic's impact and approved the squeeze-out of the remaining innogy minority share-
+holders. Furthermore, it prepared the resolutions the Supervisory Board adopted in December 2020
+regarding the personnel decisions relating to the Management Board. In this context, it also adopted a
+resolution on Management Board members' respective areas of responsibility. Additionally, the Executive
+Committee was periodically informed about the progress toward the Management Board's targets for
+2020 and dealt with the new version of the Management Board's compensation plan. Finally, the Executive
+Committee thoroughly discussed the medium-term plan for the period 2021-2023.
+To fulfill its duties carefully and efficiently, the Supervisory Board has created the committees described
+in detail below.
+885,073
+5,315,864
+Compensation Report
+4In accordance with his service agreement, Dr.-Ing. Birnbaum received "LTI innogy" with long-term incentive effect (2020-2021) in the amount of €300,000 per year. "LTI innogy" is granted on a prorated basis
+corresponding with the end of the service agreement between Dr.-Ing. Birnbaum and innogy SE on June 1, 2020.
+³Dr.-Ing. Birnbaum received the substitute payment "LTI innogy" with long-term incentive effect (2019-2021) in the amount of €75,000.
+1The present value assigned to the virtual shares of E.ON stock at the time of granting for the fourth tranche of the E.ON Performance Plan was €7.88 per share.
+2See the explanation regarding Dr.-Ing. Birnbaum on page 92.
+409,713
+3,047,758
+Total
+2019
+4,997,791
+2020
+2019
+40,791 1,732,500 1,732,500 4,453,034
+27,116 1,133,743 1,083,333 2,875,053
+4,519 125,4104 75,000³ 901,148
+44,264 825,000 825,000 2,259,733 2,514,264
+48,607 825,000 825,000 2,266,199 2,518,607
+61,983 825,000 825,000 2,264,510 2,531,983
+222,761 5,341,243 5,290,833 14,118,529 15,610,403
+94
+46,233
+52,699
+51,010
+207,727
+2020
+34,684
+23,101
+11,698
+1,984,500
+800,000 800,000 918,209 1,137,309
+335,556 88,406 428,484 241,788
+700,000 700,000 688,500 945,000
+700,000 700,000 688,500 945,000
+700,000 700,000 688,500 945,000
+4,140,000 4,140,000 4,429,559 5,956,809
+Total
+Dr. Karsten Wildberger
+Dr. Marc Spieker
+Dr. Thomas König
+Thereof innogy SE
+Dr.-Ing. Leonhard Birnbaum²
+1,240,000 1,240,000 1,445,850
+Dr. Johannes Teyssen
+Value of stock-based
+compensation granted¹
+2020
+2019
+Other compensation
+For the purpose of transparent presentation in the interests of
+corporate governance, the individualized disclosure of compen-
+sation will, voluntarily, continue to be based on the model tables
+of the German Corporate Governance Code of February 7, 2017.
+Table of Compensation Granted and Allocated
+2020
+Compensation allocated
+2019
+2020
+(max.)1,2
+1,240,000
+34,684
+1,274,684
+2,835,000 1,984,500 1,445,850
+3,465,000 2,254,138 3,295,219
+2,254,138
+- Share Matching Plan, third tranche (2015-2019)
+1,732,500
+1,732,500
+2020
+(min.)
+1,240,000
+34,684
+1,274,684
+1,240,000
+34,684
+1,274,684
+1,417,500
+1,417,500
+1,280,791
+The following table shows the compensation granted and
+allocated in 2020 in the format recommended by the German
+Corporate Governance Code:
+1,240,000
+40,791
+One-year variable compensation
+Total
+Fringe benefits
+Fixed compensation
+€
+2020
+2019
+Compensation granted
+(Chairman of the Management Board and Chief Executive Officer)
+Dr. Johannes Teyssen
+Multi-year variable compensation
+Bonus
+2019
+2020
+2019
+Dr.-Ing. Birnbaum's appointment as Chairman of the innogy SE
+Management Board ended on June 2, 2020. For this period, the
+innogy SE Supervisory Board set a target attainment of 100 per-
+cent for the "bonus innogy" and the "LTI innogy." The payments
+resulting from target attainment are calculated proportionately
+for the period of his appointment and are made in accordance
+with the agreed on contractual terms and conditions after the end
+of the respective regular vesting period. The E.ON Performance
+Plan granted to Dr.-Ing. Birnbaum in the 2020 financial year has
+been taken over and continued by E.ON SE.
+93
+93
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+To reflect the increase in his responsibilities and the bigger and
+special challenges he faced, Dr.-Ing. Birnbaum was also granted,
+proportionately until the end of his service agreement with
+innogy SE at the close of June 1, 2020, long-term variable com-
+pensation with a target value of €300,000 (for a full financial
+year), which depends exclusively on innogy SE's performance
+("LTI innogy"). The vesting period of the "LTI innogy" is two years.
+Target attainment is determined by the Supervisory Board at
+its due discretion on the basis of predefined targets and can be
+between 0 percent and 200 percent. The basis for the "innogy
+LTI" granted in the 2020 financial year was the management of
+innogy SE as an E.ON Group company, taking into account the
+interests of the other shareholders and, in this regard, in partic-
+ular the planned integration into E.ON SE.
+Dr.-Ing. Birnbaum continues to participate in the E.ON Perfor-
+mance Plan, which is described on page 84. This plan was con-
+tinued analogously by innogy SE—that is, based on E.ON SE's
+capital market performance—and granted with a target amount
+of €1,008,333 per year.
+In the 2020 financial year, the "bonus innogy" was based on the
+attainment of collective and individual targets that were set by
+the innogy SE Supervisory Board before the start of the financial
+year. Target attainment of the "bonus innogy" is determined by
+the Supervisory Board at its due discretion on the basis of these
+targets and can be between 0 percent and 180 percent. To depict
+the operating business performance of innogy SE, adjusted
+EBIT and adjusted net income were defined as collective finan-
+cial performance criteria and, for example, the management of
+the network and sales business while achieving the economic
+targets was defined as individual targets for Dr.-Ing. Birnbaum.
+In addition, the Supervisory Board defined collective targets for
+ensuring business continuity as well as the successful integra-
+tion of innogy SE into the E.ON Group.
+On a pro rata basis until the end of his service agreement with
+innogy SE at the close of June 1, 2020, Dr.-Ing. Birnbaum received
+an innogy SE bonus with a target bonus of €1,025,000 for a full
+financial year ("bonus innogy"). As a result of the reinstatement
+of his suspended portions of his service agreement with E.ON SE,
+Dr.-Ing. Birnbaum was granted, for the 2020 financial year on a
+pro rata basis, an E.ON SE bonus with a target amount of
+€825,000 for a full financial year.
+Dr.-Ing. Birnbaum continued to receive base compensation of
+€800,000 for a full financial year.
+In the 2020 financial year, Dr.-Ing. Birnbaum's compensation
+until the end of his service agreement with innogy SE at the
+close of June 1, 2020, had the following modalities:
+Due to the merger of innogy SE into E.ON Verwaltungs SE on
+June 2, 2020, and the resulting expiration of his position on the
+innogy SE Management Board, an amical termination of his
+existing service agreement with innogy SE was agreed effective
+the close of June 1, 2020 (the day before the entry of the
+merger into E.ON Verwaltung SE's commercial register). As of
+June 2, 2020, the previously suspended parts of his service
+agreement with E.ON SE were reinstated, and Dr.-Ing. Birnbaum
+again receives his compensation exclusively from his service
+agreement with E.ON SE.
+Alongside his appointment as a member of the E.ON Manage-
+ment Board and his duties as Chief Operating Officer-Integra-
+tion, Dr.-Ing. Birnbaum was also appointed as Chairman of the
+innogy SE Management Board from October 11, 2019 (dual
+mandate within the meaning of Section 88, Paragraph 1, Sen-
+tence 2 of the German Stock Corporation Act). During this period,
+Dr.-Ing. Birnbaum received compensation from innogy SE only
+pursuant to a newly concluded service agreement with the
+company. The compensation-related clauses of his service
+agreement with E.ON SE were suspended for the duration of his
+service as Chairman of the innogy SE Management Board.
+Dr.-Ing. Birnbaum's Dual Mandate
+Compensation Modalities of
+At his own request, Dr. Teyssen's appointment as Chairman
+of the Management Board as well as his service agreement will
+be terminated early, by mutual consent, effective at the close of
+March 31, 2021, instead of the original term until December 31,
+2021.
+The total compensation of the members of the Management
+Board in the 2020 financial year amounted to €14.1 million,
+about 9.6 percent below the prior-year figure of €15.6 million
+based on the Management Board's total compensation disclosed
+in the 2019 Annual Report.
+Total Compensation in 2020
+92
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+89
+In addition, Dr.-Ing. Birnbaum continued to participate in the
+"Contribution Plan E.ON Management Board," a contribution-
+based pension plan. This plan was suspended at E.ON SE until
+Dr.-Ing. Birnbaum's service agreement with E.ON SE took effect
+again and was continued and administered by innogy SE during
+this period. Dr.-Ing. Birnbaum retained his accrued entitlements
+from E.ON SE. The pension entitlement vis-à-vis innogy SE
+accrued by Dr.-Ing. Birnbaum during his service as Chairman of
+the innogy SE Management Board was transferred to E.ON SE
+after Dr.-Ing. Birnbaum's departure from the innogy SE Manage-
+ment Board pursuant to an agreement between Dr.-Ing. Birnbaum,
+innogy SE, and E.ON SE.
+For Dr.-Ing. Birnbaum's duties as a member of the E.ON SE
+Management Board for the duration of the dual mandate,
+E.ON SE reimbursed innogy SE, for the costs of his duties that
+are attributable to E.ON SE. Pursuant to the service agreement
+between innogy SE and Dr.-Ing. Birnbaum, these reimbursed
+costs consisted of the following compensation components
+(in each case until the termination of the service agreement at
+the close of June 1, 2020): 50 percent of base compensation;
+100 percent of the payment of the tranche of the E.ON Perfor-
+mance Plan granted on January 1, 2020, forward; 50 percent
+of the contributions made by innogy SE to the "Contribution Plan
+E.ON Management Board."
+The cost allocation for the 2020 financial year is as follows:
+2020
+Fixed annual
+compensation
+€
+Total Compensation of the Management Board
+The individual members of the Management Board had the
+following total compensation:
+Total Compensation of the Management Board
+2020 E.ON bonus
+2020 innogy bonus
+50
+50
+100
+1,240,000
+40,791
+1,280,791
+100
+100
+100
+100
+50
+50
+innogy SE
+E.ON SE
+Base compensation
+Benefits
+Percentages
+Cost Allocation of Dr.-Ing. Leonhard Birnbaum's
+Compensation during His Dual Mandate in the
+2020 Financial Year
+E.ON Performance Plan (2020-2023)
+"LTI innogy" (2020-2021)
+Company pension entitlements
+989
+1,240,000
+34,684
+1,274,684
+3,295,219
+(since October 1, 2019)
+140,000
+35,000
+5,000
+2,000
+145,000
+37,000
+Fred Schulz
+140,000
+140,000
+110,000
+110,000
+19,000
+16,000
+23,993
+17,856
+292,993
+283,856
+Dr. Karen de Segundo
+140,000
+140,000
+Dr. Rolf Martin Schmitz
+334,000
+334,000
+14,000
+(since May 28, 2020)
+93,333
+3,000
+96,333
+René Pöhls (since
+September 24, 2019)
+140,000
+46,667
+110,000
+27,500
+140,000
+10,000
+89,927
+42,448
+349,927
+119,615
+Andreas Schmitz
+140,000
+140,000
+180,000
+180,000
+14,000
+3,000
+140,000
+8,000
+8,000
+Albert Zettl
+140,000
+140,000
+70,000
+70,000
+16,000
+13,000
+Total
+3,486,667 2,865,001 1,360,000
+1,090,000
+15,000
+217,000
+23,800
+276,553
+1,164
+23,000
+20,000
+167,976
+261,000 66,664
+234,000 241,000
+249,800 243,000
+5,340,220 4,283,977
+Other
+The Company has taken out D&O insurance for Management
+Board and Supervisory Board members. In accordance with
+the German Stock Corporation Act, this insurance includes
+a deductible of 10 percent of the respective damage claim for
+Management Board and Supervisory Board members. The
+deductible has a maximum cumulative annual cap of 150 percent
+of a member's annual fixed compensation.
+Separate Combined
+Non-Financial Report
+Service cost
+4,430,791
+1,732,500
+- Performance Plan, third tranche (2019-2022)
+- Performance Plan, fourth tranche (2020-2023)
+Total
+161,000
+- Share Matching Plan, fourth tranche (2016-2020)
+8,000
+70,000
+288,000
+288,000
+Elisabeth Wallbaum
+140,000
+140,000
+110,000
+110,000
+10,000
+9,000
+260,000 259,000
+9,000
+Deborah Wilkens
+140,000
+35,000
+110,000
+27,500
+11,000
+3,000
+Ewald Woste
+140,000
+140,000
+70,000
+(since October 1, 2019)
+a correspondingly higher level of target attainment in subsequent
+years due to its budgeting. The Supervisory Board therefore
+decided to take these special effects from the network business
+into account when calculating and determining target attainment.
+With this adjustment, target attainment for company perfor-
+mance is 85 percent. This adjustment is also taken into account
+when determining target attainment for employees whose com-
+pany performance is determined on the basis of EPS.
+In the new compensation plan submitted to the 2021 Annual
+Shareholders Meeting for approval, the Supervisory Board has
+provided that it can take into account corresponding effects
+that remain in the network business without economic impact
+for E.ON.
+The revenue shortfall in the sales business will not be adjusted
+and will therefore affect the 2020 bonus without restriction.
+No correction is planned here in the future either.
+2,913,120
+1,890,048
+Dr.-Ing. Leonhard Birnbaum³
+(innogy SE)
+Dr. Thomas König¹
+Dr. Marc Spieker¹
+Dr. Karsten Wildberger¹
+195,667
+195,667
+287,461
+213,076
+35,530
+250,553
+209,825
+16,631
+44,685
+17,223
+3,194,925 2,733,075
+1,612,838 1,279,272
+314,108
+277,975
+15,579
+14,393
+29,011
+24,571
+357,170 245,953
+(E.ON SE)
+Additions to provisions for pensions
+Cash value at December 31
+As a percentage
+of annual base
+compensation
+In absolute terms (€)
+2020
+Dr. Johannes Teyssen
+75
+2019
+75
+2020
+1,558,531
+930,000
+2020
+(€)
+2019
+Thereof interest cost (€)
+2020
+365,816
+2019
+525,001
+2020
+(€)
+2019
+30,808,106
+28,139,682
+Dr.-Ing. Leonhard Birnbaum 1.2
+2019
+930,000 1,276,716 1,410,074
+Current pension entitlement at December 31
+1,198,385
+2The prior-year figure for Dr.-Ing. Birnbaum refers to his passive employment relationship with E.ON SE on December 31, 2019. For 2020, the entire year is presented (including the final amount) based on his
+reinstated employment with E.ON SE.
+Dr. Thomas König¹
+172,476
+172,476
+(innogy SE)
+Dr.-Ing. Leonhard Birnbaum³
+1,578,534
+40,010 2,440,578
+42,778
+332,111
+862,044
+(E.ON SE)
+Dr.-Ing. Leonhard Birnbaum¹.2
+22,059,264
+(€)
+2019
+2020
+2019
+689,983 24,158,256
+Thereof interest cost (€)
+(€)
+2019
+2020
+564,476 597,806
+2,098,992
+2020
+In absolute terms (€)
+2020
+2019
+930,000 930,000
+397,348
+Dr. Marc Spieker¹
+239,670
+Dr. Karsten Wildberger¹
+³From October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum's innogy SE pension entitlement was borne by E.ON SE.
+Pensions of Management Board Members Pursuant to the German Commercial Code
+Current pension entitlement at December 31
+Additions to provisions for pensions
+Cash value at December 31
+As a percentage
+of annual base
+compensation
+2020
+2019
+Dr. Johannes Teyssen
+1"Contribution Plan E.ON Management Board."
+Compensation Report
+³Voluntary supplemental disclosure. From October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum's innogy SE pension entitlement was borne by E.ON SE.
+²The prior-year figure for Dr.-Ing. Birnbaum refers to his passive employment relationship with E.ON SE on December 31, 2019. For 2020, the entire year is presented (including the final amount) based on his
+reinstated employment with E.ON SE.
+1"Contribution Plan E.ON Management Board."
+979,086
+992,033
+2,343,798
+62,291 2,741,146
+22,465 1,231,703
+19,453 1,265,855
+63,517
+26,884
+26,533
+403,263
+292,176
+373,061
+286,769
+Pursuant to IFRS and the German Commercial Code, the cash
+values of Management Board pensions for which provisions are
+required increased as of December 31, 2020, relative to year-end
+2019. This resulted in part from increases in the number of years
+of service. Another reason is that the actuarial interest rate for
+discounting was below the prior-year figure.
+Pensions of Management Board Members Pursuant to IFRS
+is calculated pursuant to IFRS and the German Commercial
+Code. An actuarial interest rate according to IFRS of 0.8 percent
+(prior year: 1.3 percent) was used for discounting; the actuarial
+interest rate pursuant to the German Commercial Code was
+2.30 percent (prior year: 2.71 percent).
+The following table provides an overview of the current pension
+obligations to Management Board members, the additions to
+provisions for pensions, and the cash value of pension obligations
+for the 2020 financial year. The cash value of pension obligations
+at time of granting
+Number of virtual
+Expense (+)/Income (-)¹
+€
+Dr. Johannes Teyssen
+Dr.-Ing. Leonhard Birnbaum²
+2020
+2019
+2020
+2019
+2020
+2019
+1,732,500
+1,732,500
+219,861
+259,357
+1,925,176
+2,277,079
+1,133,743
+1,083,333
+127,962
+Value of virtual shares
+90
+90
+Stock-based Compensation
+In determining the individual performance factor, the Super-
+visory Board discussed and assessed the Management Board's
+overall performance as well as the individual performance of
+Management Board members on the basis of predetermined
+targets.
+Taking into account the company performance and the individual
+performance factor set by the Supervisory Board for the 2020
+financial year, total target attainment for the 2020 bonus is
+102 percent.
+Individual Performance Factor
+2020 targets
+Individual and collective targets, particularly
+regarding the following topics:
+•
+•
+Integration of innogy SE
+•
+Nuclear dismantling
+150,949
+Assessment
+The Supervisory Board's assessment of the efforts and successes in connection with
+the full integration of innogy SE was particularly positive. The progress in nuclear
+dismantling at Preussen Elektra and the securing of new growth opportunities in the
+Growth opportunities at the network business network businesses represent additional extraordinarily positive aspects. The suc-
+Sustainability strategy
+cessful development of a comprehensive sustainability strategy was also a positive
+factor in the assessment of individual performance.
+Target attainment
+120%
+Long-term Variable Compensation Allocated in
+2020
+The Supervisory Board issued the fourth tranche of the E.ON
+Performance Plan (2020-2023) for the 2020 financial year and
+granted Management Board members virtual shares of E.ON
+stock.
+Fourth Tranche of the E.ON Performance Plan (2020-2023)
+The present value assigned to the virtual shares of E.ON stock
+at the time of granting on January 1, 2020-€7.88 per share-is
+shown in the following tables entitled "Stock-based Compen-
+sation" and "Total Compensation of the Management Board."
+The value performance of this tranche will be determined by the
+performance of E.ON stock, per-share dividends, and TSR per-
+formance relative to the companies in its peer index, the STOXX®
+Europe 600 Utilities, for the years 2020 through 2023. The actual
+payments made to Management Board members in 2024 may
+deviate, under certain circumstances considerably, from the
+calculated figures disclosed here.
+Compensation Report
+The long-term variable compensation of Management Board
+members resulted in the following expenses in 2020:
+Supervisory Board's assessment:
+1,245,902
+1,400,308
+Thereof pro rata "LTI innogy" (2020-2021)³
+840,207
+870,727
+Total
+5,341,243
+5,290,833
+661,911
+780,815
+5,180,385
+5,366,406
+¹Expense pursuant to IFRS 2 for performance rights and virtual shares existing in 2019 and 2020, respectively.
+2Number of shares based on the third and fourth tranches, respectively, of the E.ON Performance Plan in the amount of the target amount of €1,008,333 and an IFRS 2 expense of €1,120,492.
+³No figure for virtual shares disclosed because no virtual shares were granted. See the explanation regarding Dr.-Ing. Birnbaum on page 92.
+123,503
+Long-term variable compensation granted for the 2020 financial
+year totaled €5.2 million. Note 12 to the Consolidated Financial
+Statements contains additional details about stock-based
+compensation.
+The fourth tranche of the E.ON Share Matching Plan granted
+in 2016 ended on March 31, 2020. The payment was made in
+April 2020.
+Fourth Tranche of the E.ON Share Matching Plan (2016-2020)
+The fourth tranche of the E.ON Share Matching Plan was cal-
+culated on the basis of the attainment of the ROCE target and
+the development of the stock price during the vesting period.
+The performance metric of the fourth tranche of the E.ON Share
+Matching Plan, Group ROCE, was considerably influenced by
+the closing of the innogy SE takeover and by innogy's entry into
+E.ON SE's scope of consolidation. The transaction's effects could
+not yet be reflected in the Group ROCE target set in 2016 for
+the fourth tranche of the Share Matching Plan. To ensure that
+target setting remains consistent and ambitious, the Supervisory
+Board decided at its due discretion to subsequently adjust the
+key figure used to determine target attainment. This means that
+the unchanged ROCE target was measured against ROCE based
+on E.ON's former corporate structure prior to the transaction;
+in other words, without innogy SE but with departing businesses
+like E.ON Climate & Renewables and certain PreussenElektra
+shareholdings. For departing businesses, the last available fore-
+cast figures were used; for the other components, actual figures
+at the end of the financial year.
+Average ROCE determined on this basis during the four-year
+vesting period was 10.2 percent. The target return for the fourth
+tranche of the E.ON Share Matching Plan was 9.6 percent,
+resulting in an overall target attainment of 162 percent for
+company performance. In view of this target attainment, the
+average price of E.ON stock in the last 60 days prior to the end
+of the vesting period of €10.11, and the amount of dividends
+totaling €1.57 that resulted for E.ON stock during the vesting
+period, a total of €6.1 million was paid to the members of the
+Management Board.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+91
+Management Board Pensions in 2020
+Allocated 2020 Long-term Variable
+Compensation
+Miroslav Pelouch
+104,696
+825,000
+125,410
+0
+125,410
+Thereof substitute payment "LTI innogy" (2019-2021)
+75,000
+0
+75,000
+Dr. Thomas König
+825,000
+825,000
+825,000
+104,696
+470,219
+288,515
+Dr. Marc Spieker
+825,000
+825,000
+104,696
+123,503
+698,881
+529,777
+Dr. Karsten Wildberger
+123,503
+Total compensation
+96,129
+29,962
+746,233
+675,000
+675,000
+1,350,000
+945,000
+688,500
+825,000
+825,000
+1,650,000
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Performance Plan, third tranche (2019-2022)
+825,000
+- Performance Plan, fourth tranche (2020-2023)
+Total
+Service cost
+Total compensation
+1,2See the footnotes on page 94.
+825,000
+1,650,000
+2,244,264
+168,391
+2,412,655
+744,264
+746,233
+746,233
+746,233
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+2020
+(min.)
+2020
+(max.)1,2
+Compensation allocated
+2019
+2020
+700,000
+2,246,233
+251,931
+2,498,164
+700,000
+700,000
+700,000
+700,000
+44,264
+46,233
+46,233
+46,233
+44,264
+46,233
+744,264
+700,000
+€
+746,233
+251,931
+998,164
+1,689,264
+168,391
+1,857,655
+752,699
+2020
+(max.)1,2
+700,000
+52,699
+752,699
+Compensation allocated
+2019
+2020
+675,000
+675,000
+1,350,000
+700,000
+48,607
+748,607
+945,000
+700,000
+52,699
+752,699
+688,500
+825,000
+825,000
+1,650,000
+825,000
+825,000
+1,650,000
+2,248,607
+2,252,699
+192,602
+2,441,209
+233,922
+2,486,621
+752,699
+233,922
+986,621
+752,699
+748,607
+700,000
+52,699
+700,000
+52,699
+1,434,733
+251,931
+1,686,664
+Table of Compensation Granted and Allocated
+€
+Fixed compensation
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Performance Plan, third tranche (2019-2022)
+- Performance Plan, fourth tranche (2020-2023)
+3,746,233
+251,931
+3,998,164
+Total
+Total compensation
+1,2See the footnotes on page 94.
+Dr. Marc Spieker
+(Member of the Management Board and Chief Financial Officer)
+Compensation granted
+2019
+2020
+2020
+(min.)
+700,000
+48,607
+Service cost
+2020
+2019
+Compensation granted
+800,000
+Thereof innogy SE³
+88,406
+800,000
+335,556
+800,000
+335,556
+(max.)1,2
+800,000
+335,556
+800,000
+88,406
+800,000
+335,556
+Fringe benefits
+27,116
+23,101
+23,101
+23,101
+27,116
+23,101
+Thereof innogy SE³
+4,519
+11,698
+11,698
+11,698
+4,519
+Fixed compensation
+(min.)
+€
+2020
+1,732,500
+4,424,684
+910,900
+5,335,584
+3,465,000
+1,274,684
+910,900
+2,185,584
+7,574,684
+910,900
+5,519,429
+6,015,753
+885,073
+910,900
+8,485,584
+6,404,502
+11,698
+6,926,653
+Table of Compensation Granted and Allocated
+Dr.-Ing. Leonhard Birnbaum
+(Member of the Management Board and Chief Operating Office-Integration)
+Compensation granted
+Compensation allocated
+2019
+2020
+2020
+2020
+2019
+¹The maximum amount disclosed under compensation granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
+2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 86, applies as well.
+Total
+One-year variable compensation4
+827,116
+2,016,666
+250,820
+823,101 4,822,104
+332,599
+332,599
+3,351,575
+412,609
+195,667
+3,659,192
+332,599
+Total compensation
+3,192,990
+3,198,050
+1,155,700
+5,154,703
+3,764,184 3,991,791
+1,008,333
+125,410
+2,865,451
+332,599
+1.2 See the footnotes on page 94.
+"The maximum innogy cap is 180 percent; the maximum E.ON cap is 200 percent.
+5In 2019: from October 11 to December 31, 2019; in 2020: from January 1 to June 1, 2020.
+6Granted initially by E.ON SE and transferred, with debt-discharging effect, to E.ON SE effective the end of the employee relationship with innogy SE.
+'For October 11, 2019, to June 1, 2020, 50 percent of the contribution to Dr.-Ing. Birnbaum's innogy SE pension entitlement were borne by E.ON SE.
+Table of Compensation Granted and Allocated
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+95
+Dr. Thomas König
+(Member of the Management Board and Chief Operating Officer-Networks)
+³See the explanation regarding Dr.-Ing. Birnbaum on page 92.
+3,752,699
+233,922
+3,986,621
+412,609
+195,667
+Service cost
+823,101
+823,101
+869,932
+908,607
+Thereof innogy SE4,5
+230,274
+428,484
+Multi-year variable compensation
+1,083,333
+1,133,743
+Thereof innogy SE³,7
+823,101
+1,731,517
+771,271
+2,267,486
+827,116
+1,137,309
+241,788
+1,387,150
+1,312,150
+823,101
+918,209
+428,484
+1,917,882
+1,917,882
+1,008,333
+75,000
+75,000
+Total
+2,780,381
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+- Performance Plan, third tranche (2019-2022)
+- Substitute payment "LTI innogy" (2019-2021)³
+- Performance Plan, fourth tranche (2020-2023)6
+- "LTI innogy" (2020-2021)³
+1,693,607
+192,602
+233,922
+1,886,209 1,675,121
+1,441,199
+Compensation Report
+11,667
+140,000
+5,833
+70,000
+8,000
+Klaus Fröhlich
+140,000
+140,000
+70,000
+70,000
+9,000
+8,000
+Ulrich Grillo
+(since October 1, 2019)
+140,000
+35,000
+70,000
+17,500
+14,000
+3,000
+Carolina Dybeck Happe
+(until January 31, 2020)
+Clive Broutta
+10,000
+248,333
+12,000
+455,000
+452,000
+Erich Clementi
+320,000
+320,000
+17,000
+14,000
+337,000
+334,000
+140,000
+Andreas Scheidt
+133,333
+320,000
+8,000
+13,000
+141,333
+333,000
+Christoph Schmitz
+(since February 1, 2020;
+Deputy Chairman
+since May 28, 2020)
+(until May 28, 2020)
+140,000
+110,000
+110,000
+70,000
+70,000
+9,000
+8,000
+219,000
+218,000
+Szilvia Pinczésné Márton
+140,000
+140,000
+5,000
+140,000
+6,000
+146,000
+Stefan May (since
+September 24, 2019)
+140,000
+46,667
+70,000
+17,500
+7,000
+2,000
+63,583
+145,000
+15,000
+140,000
+81,215
+9,000
+9,000
+258,333
+17,500
+218,000
+219,000
+218,000
+998
+224,000
+56,498
+Eugen-Gheorghe Luha
+259,000
+Monika Krebber (since
+September 24, 2019)
+140,000
+46,667
+64,167
+9,000
+2,000
+60,250
+32,548
+273,417
+259,000
+280,583
+440,000
+Dr. Karl-Ludwig Kley
+61,983
+51,010
+51,010
+51,010
+61,983
+51,010
+761,983
+751,010
+751,010
+751,010
+761,983
+751,010
+675,000
+675,000
+1,350,000
+945,000
+688,500
+825,000
+825,000
+1,650,000
+896,214
+700,000
+700,000
+700,000
+700,000
+Table of Compensation Granted and Allocated
+96
+96
+Dr. Karsten Wildberger
+(Member of the Management Board and Chief Operating Officer-Commercial)
+Compensation granted
+Compensation allocated
+2019
+2020
+2020
+- Share Matching Plan, third tranche (2015-2019)
+- Share Matching Plan, fourth tranche (2016-2020)
+€
+Fringe benefits
+Total
+One-year variable compensation
+Multi-year variable compensation
+(min.)
+2020
+(max.)1,2
+2019
+2020
+700,000
+700,000
+Fixed compensation
+896,214
+- Performance Plan, third tranche (2019-2022)
+825,000
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+97
+Supervisory Board Compensation
+Supervisory Board
+compensation
+Compensation for
+committee duties
+Attendance fees
+Supervisory Board
+compensation from
+affiliated companies
+Report of the Supervisory Board
+Strategy and Objectives
+Total
+2020
+2019
+2020
+2019
+2020
+2019
+2020
+2019
+2020
+2019
+€
+440,000
+The total compensation of the members of the Supervisory Board
+in the 2020 financial year amounted to €5.3 million (prior year:
+€4.3 million). The main reason for the increase in total compen-
+sation relative to the 2019 financial year is that the Annual
+Shareholders Meeting passed a resolution on May 14, 2019, to
+increase, owing to the acquisition of a majority stake in innogy SE,
+the size of the E.ON SE Supervisory Board by six members to a
+total of 20 members during the course of the year. Consequently,
+the newly appointed Supervisory Board members served for a
+full year for the first time in the 2020 financial year. In addition,
+the work of the Supervisory Board was, on balance, once again
+intensified. As in the prior year, no loans or advance payments
+were granted to Supervisory Board members by the Company.
+of €140,000. The Chairman of the Audit and Risk Committee
+receives an additional €180,000; the members of the Audit and
+Risk Committee, an additional €110,000. Other committee
+chairmen receive an additional €140,000; committee members,
+an additional €70,000. Members serving on more than one com-
+mittee receive the highest applicable committee compensation
+only. In contradistinction to the compensation just described,
+the Chairman and the Deputy Chairmen of the Supervisory Board
+receive no additional compensation for their committee duties.
+In addition, Supervisory Board members are paid an attendance
+fee of €1,000 per day for meetings of the Supervisory Board
+or its committees. Individuals who were members of the Super-
+visory Board or any of its committees for less than an entire
+financial year receive pro rata compensation.
+- Performance Plan, fourth tranche (2020-2023)
+Total
+825,000
+1,650,000
+2,261,983
+Service cost
+Total compensation
+263,582
+2,525,565
+2,251,010
+298,529
+2,549,539
+751,010
+298,529
+1,049,539
+Supervisory Board Compensation in 2020
+3,751,010
+298,529
+4,049,539
+2,335,724
+298,529
+2,634,253
+1,2See the footnotes on page 94.
+As in the prior year, E.ON SE and its subsidiaries granted no
+loans to, made no advance payments to, nor entered into any
+contingencies on behalf of the members of the Management
+Board in the 2020 financial year. Page 250 contains additional
+information about the members of the Management Board.
+Payments Made to Former Members of the
+Management Board
+Total payments made to former Management Board members
+and to their beneficiaries amounted to €12.8 million (prior
+year: €10.8 million). Provisions of €166.8 million (prior year:
+€161.3 million)—pursuant to IFRS-have been provided for
+pension obligations to former Management Board members
+and their beneficiaries.
+Compensation System for the Supervisory
+Board
+The compensation of Supervisory Board members is deter-
+mined by the Annual Shareholders Meeting and governed by
+Section 15 of the Company's Articles of Association. The pur-
+pose e of the compensation system is to enhance the Supervisory
+Board's independence for its oversight role. Furthermore, there
+are a number of duties that Supervisory Board members must
+perform irrespective of the Company's financial performance.
+Supervisory Board members-in addition to being reimbursed
+for their expenses-therefore receive fixed compensation and
+compensation for committee duties.
+The Chairman of the Supervisory Board receives fixed compen-
+sation of €440,000; the Deputy Chairmen, €320,000. The
+other members of the Supervisory Board receive compensation
+1,706,983
+263,582
+1,970,565
+shares granted
+75
+75
+•
+Sustainability Ratings and Rankings
+102
+•
+Employee matters
+Occupational health and safety
+Environmental matters
+E.ON's Material Issues Subsumed under the Five Mandatory Aspects
+in a workshop to discuss the results of the desk research, the
+expert interviews, and the survey. The workshop validated the
+research results and defined a set of focus dimensions on which
+E.ON's sustainability strategy is based. The materiality analysis
+identified good corporate governance and the following non-
+financial issues as material for E.ON.
+such as climate change, health and safety, and social issues.
+The E.ON Sustainability Council, on which there were a number
+of personnel changes in 2020, was involved in the third and final
+step. The members completed a survey in which they assessed
+the relevance of each of the United Nations' Sustainable Develop-
+ment Goals ("SDGs") for E.ON and subsequently participated
+101
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+In 2020 E.ON's materiality assessment consisted of a three-step
+process to determine which non-financial issues are essential
+for understanding E.ON's business performance, financial results,
+and situation and to evaluate the impact of its business opera-
+tions. The process also identified focus dimensions that form the
+core of the E.ON Group's new sustainability strategy. In the first
+step, E.ON evaluated the events and developments that affected
+the Company in 2020, including the innogy integration and the
+Covid-19 pandemic. Also, E.ON conducted an in-depth analysis
+of its ESG performance based on ESG ratings and an examination
+of competitors' best practices. Second, E.ON conducted
+13 interviews with outside experts about a variety of topics,
+E.ON strives to always do business responsibly and therefore
+monitors all material impacts of its business operations. E.ON
+considers not only financial aspects but also environmental,
+social, and governance ("ESG") issues along its value chain. The
+systematic consideration of non-financial issues enables E.ON
+to identify opportunities and risks for its business development
+early. In addition to investors' expectations, E.ON takes into
+account the expectations of other key stakeholders like customers
+and employees.
+General Information
+E.ON's two core businesses, Energy Networks and Customer
+Solutions, promote the sustainable development of the energy
+industry. Detailed information about E.ON's business model can
+be found in the Combined Group Management Report.
+Business Model
+E.ON's commitment to transparency includes subjecting its
+sustainability performance to independent, detailed assessments
+by specialized agencies and capital-market analysts. The findings
+of these assessments provide important guidance to investors
+and to E.ON. They help E.ON identify its strengths and weak-
+nesses and further improve its performance. The Sustainability
+Channel on E.ON's corporate website contains a list of current
+sustainability ratings and rankings and E.ON's performance.
+Approach to Health, Safety, and the
+Environment ("HSE")
+E.ON's HSE organization centrally manages all activities for
+the material issues of climate protection, environmental manage-
+ment, and occupational health and safety. E.ON's overarching
+HSE policy and the Function Policy "Sustainability and HSE" as
+well as binding HSE standards set minimum standards, assign
+responsibilities, and define management tools and reporting
+pathways. These policies are binding across E.ON.
+The E.ON Management Board and the management of E.ON's
+organizational units are responsible for HSE performance. They
+set strategic objectives and adopt policies to promote continual
+improvement.They are supported and advised by the HSE division
+at Corporate Functions, employee representatives, and the
+HSE Council. The council is composed of senior executives and
+employee representatives from different business areas and
+countries where E.ON operates. It meets at least three times a
+year and is chaired by the E.ON Management Board member
+responsible for HSE. The units have HSE committees and expert
+teams as well. They draw up framework specifications to ensure
+that their unit meets its HSE standards. The units also design
+HSE improvement plans, which contain specific HSE targets and
+programs for one or more years.
+CO2 Emissions
+104
+Separate Combined Non-Financial Report
+To calculate emissions when primary data are unavailable or of
+insufficient quality, the GHG Protocol recommends the use of
+secondary data, such as industry-average data or government
+statistics. Since spinning off its large-scale fossil-fueled power
+generation business in 2016 E.ON has procured its power mainly
+from wholesale markets where the source of generation is often
+not traceable or information about the source is not reliable.
+E.ON therefore uses the official national emission factors of the
+countries in which power sold to end-customers is purchased.
+The activities of E.ON's core businesses reflect the key emerging
+energy trends and help protect the earth's climate. But E.ON
+also wants to shrink its own carbon footprint. E.ON measures
+the annual carbon emissions from its distributed power and heat
+generation and from its business activities that are not directly
+related to power generation. It discloses these figures in its sus-
+tainability reporting. E.ON factors in upstream and downstream
+emissions as well. It calculates emissions using the globally
+recognized WRI/WBCSD Greenhouse Gas Protocol Corporate
+Accounting and Reporting Standard ("GHG Protocol"). The GHG
+Protocol defines three scopes for GHG accounting and reporting.
+This improves transparency and provides guidance for different
+types of climate policies and business goals. The table below
+includes innogy from 2019 onward in order to foster compara-
+bility and transparency in the following years. For this reason, the
+calculation methods were harmonized in 2020. innogy's GHG
+emissions for 2019, which were initially determined using com-
+pany-specific emission factors, were recalculated using the
+E.ON Group's methods and emission factors and then aggregated
+with E.ON's figures. This yielded a consistent baseline for
+E.ON's climate target.
+Distribution networks like E.ON's are the backbone of the
+energy transition. They facilitate low-carbon power generation
+and the deployment of innovative, efficient energy solutions.
+Wind farms, solar arrays, battery-storage systems, and other
+climate-friendly technologies are connected to E.ON's distribu-
+tion grids. Going forward, smart grids will serve as the platform
+for the innovative technologies and business models that are
+essential to the energy transition's success.
+The Chief Operating Officer-Commercial, who is a member of
+the E.ON Management Board, has overall responsibility for
+E.ON's customer-oriented businesses, including solutions enabling
+customers to generate their own climate-friendly energy. The
+regional units' sales teams implement and market energy and
+E-Mobility solutions for all classes of customers. Cross-regional
+teams at Corporate Functions coordinate these activities from a
+technical, commercial, and strategic perspective. E.ON Business
+Solutions is responsible for designing technical solutions for
+commercial customers in Western and Central Europe, the United
+Kingdom, and Scandinavia.
+GHG emissions can be reduced not only by low-carbon genera-
+tion technologies but also by energy conservation and recovery.
+E.ON's energy solutions help its customers use energy more
+efficiently and recover energy. E.ON offers individually tailored
+solutions to residential, industrial, commercial, and public-sector
+customers. Its portfolio includes easy-to-use online energy audits
+and apps that help residential customers better understand
+their energy consumption. E.ON designs embedded cogeneration
+solutions and energy-efficiency plans for commercial customers.
+It also develops integrated solutions for cities, district develop-
+ers, and real-estate companies that encompass elements like
+efficient heating and cooling, low-carbon generation, and smart
+energy management. In addition, E.ON offers E-Mobility solu-
+tions such as electric-vehicle charging systems for homes and
+businesses as well as public charging infrastructure for cities that
+help make transport less dependent on fossil fuels and thus less
+carbon-intensive.
+challenges for E.ON's competitiveness, but also creates oppor-
+tunities to grow the business. Many countries, communities,
+and companies have already embraced climate-friendly energy
+production and energy efficiency to achieve their carbon-reduc-
+tion targets. E.ON's strategic focus on energy-efficient customer
+solutions and reliable smart grids is fully in line with these
+global trends.
+The business operations at the Renewables segment that was
+transferred to RWE are included in E.ON's key performance
+indicators ("KPIs") until late September 2019. A separate innogy
+segment, consisting mainly of network and sales businesses,
+became part of the E.ON Group on 18 September 2019. Conse-
+quently, last year's reporting included a number of innogy KPIs
+after this date, most of which were presented separately from
+E.ON KPIs. This year, the 2019 KPIs of E.ON and innogy were
+aggregated in order to foster comparability and transparency.
+As a rule, KPIs include both entities from 2019 on. Any exceptions
+due to time frames, availability of data, and internal collating and
+reporting processes are clearly indicated. 2020 figures, however,
+refer to the scope of the new E.ON without exception.
+103
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Climate change and the environmental damage caused by it are
+serious and affect nature and humans. The use of fossil fuels is
+accompanied by greenhouse gas ("GHG") emissions. Low-carbon
+power generation and the efficient use of energy therefore play
+key roles in reducing emissions and limiting global warming. The
+transition to a low-carbon economy will require the concerted
+efforts of everyone who makes or consumes energy. It poses
+Climate Protection
+Aspect 1: Environmental Matters
+HSE has always been a top priority for the E.ON Management
+Board. In 2020 the Management Board and the HSE Council
+therefore decided to set personal H&S targets for the top
+100 managers and to endorse E.ON's HSE strategy ("Roadmap
+2021-23"), which contains underlying targets for its operating
+units, including H&S. The targets for top managers and units
+are individual. Their purpose is to further reduce the frequency
+of serious incidents and fatalities ("SIF"), with the ultimate aim
+of reaching zero harm in the near future. The changes took effect
+on January 1, 2021. They make it even more explicit that E.ON's
+HSE performance is integral to its long-term success.
+HSE incidents are reported via PRISMA (Platform for Reporting
+on Incident and Sustainability Management and Audits), E.ON's
+Group-wide online incident management system, in five cate-
+gories of incidents. They range from 0 (low) to 4 (major). In 2020
+the Company took steps for all former innogy units to use
+PRISMA from 2021 onward. Pursuant to E.ON's HSE Standard
+on Incident Management, units must use PRISMA to report
+category 4 incidents to the HSE division at Corporate Functions
+within 24 hours. E.ON systematically investigates and analyzes
+incidents depending on their severity and/or potential to result in
+an actual incident and uses the findings to take preventive action.
+In 2020 E.ON developed and adopted a Group-wide standard for
+HSE risk management. It was approved by the HSE Council and
+the HSE function in 2020 and defines the minimum requirements
+for identifying, analyzing, evaluating, addressing, and monitoring
+HSE risks and opportunities. Its purpose is to ensure shared
+understanding and to establish an overarching framework for
+managing HSE risks, including sustainability risks.
+E.ON expects its HSE standards to be met further up the value
+chain as well, for example by suppliers. New suppliers must
+first undergo a qualification process if there is an increased risk
+that their business activities could have a negative impact on
+HSE. Depending on their size, E.ON sometimes also requires
+them to be certified to international environmental and occu-
+pational health and safety standards (ISO 14001 or EMAS III;
+OHSAS 18001 or ISO 45001) or conducts HSE audits of them.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Total CO2 equivalents in million metric tons
+The innogy takeover in 2019 did not result in E.ON's guidelines
+and policies becoming automatically binding for innogy. innogy
+units met these requirements in 2020 because similar policies
+applied to them. After revising E.ON's guidelines in 2020, effec-
+tive January 1, 2021, the new E.ON has a largely uniform set of
+policies. With a small number of exceptions, these guidelines
+and policies apply to all Group companies including the former
+innogy companies.
+The innogy takeover successfully closed in 2019. Effective
+January 1, 2020, innogy's operations are no longer managed
+and disclosed as a separate segment but rather integrated into
+Energy Networks, Customer Solutions, and Corporate Functions/
+Other. E.ON's current strategy was subjected to a verification
+process early in 2020. It was affirmed to be a suitable strategic
+framework for the energy-policy, social, and technological
+challenges that currently prevail. Nevertheless, E.ON intends to
+use the period through year-end 2021-while continuing to
+integrate innogy-to sharpen the company's focus in line with
+its current and reaffirmed strategy, analyze exogenous factors,
+and determine their impact on strategic development. One key
+area for strategic focus is sustainability.
+100
+•
+Working conditions and employee development
+•
+Diversity and inclusion
+Social matters
+Security of supply
+•
+Customer loyalty
+Human rights
+Anti-corruption
+•
+Human rights and supplier management
+Compliance and anti-corruption
+E.ON's approach to each issue and its progress in 2020 are
+explained in the following sections. E.ON takes a compre-
+hensive approach to occupational health and safety (Aspect 2:
+employee matters) and environmental management, which is
+explained below. The description of all approaches is guided by
+the Global Reporting Initiative's Sustainability Reporting Stan-
+dards ("GRI SRS"), in particular GRI standard 103: Management
+Approach 2016.
+Diversity and inclusion were identified as material issues in
+2020 and became part of E.ON's new sustainability strategy.
+The Employees chapter from page 50 of the Combined Group
+Management Report contains more information.
+Separate Combined Non-Financial Report
+E.ON has published a Sustainability Report annually since 2004.
+The report, which has been based on GRI standards since 2005,
+serves as E.ON's annual Communication on Progress to the UNGC.
+It describes the issues that are material to E.ON's stakeholders
+and to E.ON as a company as well as how these issues are
+addressed. It also reports on topics not included in this Combined
+Non-Financial Report for reasons of materiality and contains
+information about E.ON's sustainability strategy and organization.
+Annual Sustainability Report
+E.ON's sustainability efforts are guided by internationally recog-
+nized standards, which provide orientation and help ensure that
+E.ON considers all essential aspects of responsible corporate
+governance. E.ON has been committed to the ten principles of
+the United Nations Global Compact ("UNGC") since 2005. Its
+sustainability activities also support the achievement of the
+United Nations' SDGs. In particular, E.ON helps provide access
+to affordable, reliable, sustainable, and clean energy, supports
+cities and communities to become sustainable, and helps protect
+the earth's climate.
+Purpose and Scope
+100 Business Model
+100
+General Information
+The purpose of this separate Combined Non-Financial Report is
+to comply with the reporting requirements of the German CSR
+Directive Implementation Act (Section 315c in conjunction with
+Sections 289c to 289e of the German Commercial Code). It
+applies to both the E.ON Group and E.ON SE (hereinafter: "E.ON").
+In addition to general information, the report contains informa-
+tion on the five mandatory aspects: the environment, employees,
+social matter, human rights, and anti-corruption. This informa-
+tion is for the reporting period January 1 to December 31, 2020.
+The report encompasses all subsidiaries that are fully consolidated
+in E.ON's Consolidated Financial Statements. Any deviations
+from this are indicated.
+Separate Combined Non-Financial Report
+Purpose and Scope
+100
+Separate Combined Non-Financial Report
+Aspect 5: Anti-Corruption
+114
+Aspect 4: Human Rights
+112
+Aspect 3: Social Matters
+The policies mentioned below issue instructions, set minimum
+standards, assign responsibilities, and define management tools for
+the various non-financial issues. They are reviewed on an ongoing
+basis. Group policies are binding for all companies in which
+E.ON holds a majority stake and for projects and partnerships
+for which E.ON has operational responsibility. Contractors and
+suppliers are also required to meet E.ON's minimum standards.
+109
+105
+Aspect 1: Environmental Matters
+102
+Approach to Health, Safety, and the Environment ("HSE")
+102
+Sustainability Ratings and Rankings
+102
+Annual Sustainability Report
+101
+Aspect 2: Employee Matters
+Scope 1: Direct emissions from E.ON's own business operations¹
+2020
+2019
+2
+1
+0
+2018
+20192
+2020
+Employee TRIF¹
+107
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Total recordable injury frequency ("TRIF") is E.ON's key perfor-
+mance indicator for safety. It measures the number of recordable
+work-related injuries and illnesses per million hours of work.
+E.ON has included contractor employees' in its safety perfor-
+mance since 2011 (combined TRIF). The HSE improvement
+plans of many of E.ON's units set annual targets for combined
+TRIF as the Group strives to reach the goal of zero accidents.
+E.ON's most direct influence is on reducing the number of acci-
+dents involving its own employees. E.ON therefore presents
+below its employee TRIF performance for the past three years.
+The findings of the incident investigations and HSE audits com-
+pleted in 2020 show that E.ON's H&S management systems are
+largely effective. Most of the deficiencies identified were rectified
+without delay. However, there remains work to do to ensure that
+all new or revised policies and processes as well as other insights
+are fully documented and disseminated. This relates in particular
+to E.ON's internal H&S rules at its distribution system operators
+("DSOS") in Germany and other countries. Isolated safety defi-
+ciencies that could put employees, contractors, and members
+of the public at risk were found at some E.ON units outside
+Germany. The deficiencies were prioritized and are gradually in
+the process of being rectified. The audits found that there was a
+general need to continually reinforce employees and contractors'
+awareness of their responsibility to look after themselves and
+each other and to speak up immediately if they perceive a poten-
+tial safety risk. On balance, there has been a steady improve-
+ment in recent years. E.ON views audits—and the findings and
+recommendations they yield-as opportunities to foster contin-
+uous improvement.
+The Covid-19 pandemic was a source of uncertainty for employ-
+ees. E.ON responded to this situation by providing a wide range
+of information and support, both centrally and at the unit level.
+In particular, the HSE and HR departments offered webinars,
+podcasts, and conversations on concerns and needs. Supervisors
+received an updated FAQ document on a regular basis to enable
+them to provide the latest information to their teams.
+In several countries where E.ON operates, employees who have
+questions or concerns about their physical or mental health
+can contact a free, independent, and strictly confidential health
+advisory service (employee assistance program). In Germany,
+this service is a central component of the Group Works Health
+Agreement, which was concluded between management and
+the Group Works Council in 2015.
+The number of at-work traffic accidents in 2020 was 70 percent
+lower than in 2019. The improvement may reflect, among other
+factors, such as a decrease in at-work traffic due to Covid-19,
+a positive effect from the employee-awareness training agreed
+on by the top 100 in 2019.
+E.ON's units develop their own H&S improvement plans, which
+set H&S targets for one or more years. Many units set annual
+targets for combined TRIF. But E.ON's main focus is on targets
+that help it reach its goal of zero accidents. In addition, in 2018
+the E.ON Management Board defined a set of four personal
+H&S targets for the top 100 executives who report directly to
+them. The program was continued in 2019 and again in 2020,
+when innogy's top executives joined it. Its purpose is to further
+embed E.ON's Caring Culture in its daily operations. In 2020
+top executives again participated in H&S upskilling workshops
+and a Group-wide zero-level measurement to assess E.ON's HSE
+maturity. These actions are intended to reinforce the top 100
+executives' awareness of their personal targets and have already
+led to an increase in their activities related to their targets.
+whether an audit of a unit is necessary, E.ON analyzes its acci-
+dents from the previous year as well as current risk assessments.
+In addition to audits, performance indicators for lost time,
+accidents, and dangerous situations also help E.ON investigate
+accident causes and conduct comprehensive risk analyses. The
+E.ON Management Board is always informed about severe acci-
+dents, developments relating to accidents, and related measures
+and programs by means of monthly reports from HSE and peri-
+odic consultations with the Senior Vice President for Sustain-
+ability & HSE. In addition, the member of the E.ON Management
+Board responsible for HSE receives a weekly safety update and
+presents it at board meetings. The update contains major inci-
+dents that could have led to the death of employees, contractors,
+customers, or third parties. E.ON investigates all accidents care-
+fully, learns from them, and takes steps to avoid them in the future.
+106
+2.4
+2.5
+2.5
+3
+Climate protection
+E.ON has conducted an annual employee survey since 2014 to
+find out how its employees feel about their job, their supervisor,
+the work atmosphere in their unit, and other topics. The former
+innogy employees have participated in the surveys since 2018.
+These surveys, which the Company calls Pulse Checks, include
+questions about E.ON's corporate values and current issues, such
+as, in 2020, the Covid-19 pandemic. Employees' feedback on
+E.ON's handling of the pandemic was very positive. Employee
+Net Promoter Score ("eNPS") has been an important aspect of
+these surveys since 2017. It measures employees' willingness
+E.ON has in place a wide range of measures to make working
+at E.ON attractive and to develop its employees. For example,
+E.ON's international transfer policy governs the temporary foreign
+deployment of its employees. The average length of a foreign
+deployment is two to three years. E.ON also offers vocational
+training in numerous careers as well as work-study programs.
+One example is the E.ON training initiative, which helps school-
+leavers get a start on their careers through internships that pre-
+pare them for an apprenticeship as well as school projects and
+other programs. E.ON Graduate Programs ("EGP") recruit highly
+qualified university graduates for an 18 to 24-month program
+during which they receive a broad overview of E.ON's business
+through three to six deployments in different E.ON units and
+departments. E.ON offers the EGP in Sweden, the Czech Republic,
+Hungary, and Romania. Due to the restructuring of the U.K.
+business, the EGP is on hold in the United Kingdom until 2021.
+In Germany E.ON offers a job starter and a work-study program.
+To ensure E.ON's people have a consistent framework within
+the Company's decentralized management approach, in 2017
+the HR team and the E.ON Management Board developed and
+approved People Commitments, which establish twelve principles
+that articulate E.ON's values with respect to its people. These
+principles are binding for the entire E.ON Group and are endorsed
+by the Works Council of E.ON SE. Units apply these principles
+in a way that reflects their particular legal, cultural, and business
+environment. The People Commitments encompass a number
+of policies and guidelines. Examples include agreements on
+remote working and flexible work arrangements, such as home
+offices, sabbaticals, part-time work, and special holidays.
+The Senior Vice President for HR is regularly asked to report to
+the E.ON Management Board meetings about people matters.
+The Management Board discusses the current status of the tal-
+ent pool on a regular basis. Twice a year the Management Board
+receives an overview of the entire talent pool, including lower
+levels of management. In addition, E.ON conducts an annual
+management review and regularly exchanges views on talented
+employees and their development needs at job-family-specific
+talent board meetings, which were introduced in 2020.
+In 2018 E.ON decentralized most of its HR activities to bring
+them closer to the business. One important function of Group
+HR/Executive HR, which remains a part of Corporate Functions,
+is the HR management of E.ON's top 100 leaders. This includes
+executive development, placement, succession planning, and
+talent pipeline management. Each unit must have in place its
+own mechanisms to identify and develop talent and to conduct
+local succession planning. It is management's responsibility to
+ensure that all new employees receive a company orientation
+as well as training on essential topics like health and safety. For
+this purpose, the units may use standardized E.ON eLearning
+modules. These and other virtual learning tools as well as courses
+and training programs are offered by the People Development
+team in Group HR. eLearning is an effective, flexible, and intuitive
+way of delivering learning to employees.
+A shared corporate culture is crucial for the success of the new
+E.ON and the integration process. The new E.ON will inevitably
+develop its own culture. The clear intention is to actively shape
+this process instead of simply letting it happen. The shared cor-
+porate culture is based on five new corporate values that guide
+employees' actions as well as their interactions with each other,
+customers, and business partners. More than 250 employees
+representing all E.ON and innogy businesses and all countries
+where they operate were involved in defining the values: putting
+customers first, better together, delivering on promises, exploring
+new paths, and behaving mindfully.
+and innogy's integration process, the updated E.ON Story, HSE
+topics, and the digital transformation. As part of the integration
+process, all new leaders and employees will be informed about,
+and trained in line with, Grow@E.ON. More information on the
+innogy integration process is on page 50 of the Annual Report.
+108
+Separate Combined Non-Financial Report
+Separate Combined Non-Financial Report
+The Group People Strategy ("GPS") provides the compass to guide
+the HR-related aspects of E.ON's transformation and long-term
+success amid a rapidly changing world. In 2020 E.ON developed
+a new GPS called GPS@E.ON, which was approved by the E.ON
+Management Board in December. It sets four People Priorities
+for the entire Group: Future of Work, Diversity & Inclusion, Sus-
+tainability, and Leadership. GPS@E.ON sets the direction and
+provides the compass for group-wide people activities, all of
+which need to contribute to the people priorities and their key
+ambitions. It will be brought to life by Group-wide and unit-
+level people activities, especially by means of existing strategic
+initiatives. This process will be flexible and modular to reflect
+the differences between business units.
+The mission of the Human Resources ("HR") function is to enable
+E.ON to maximize its competitive advantages in the energy
+market and to support E.ON's vision: "Improving people's lives."
+This is done by attracting the right people and putting them in
+the right roles at the right time; by identifying, developing, and
+retaining talented employees whom E.ON considers to be its
+future leaders; and by helping all people to realize their potential
+and be fit for a future that will be increasingly digital. In 2020
+the Covid-19 pandemic posed a particular challenge to HR.
+Page 22 of the Annual Report contains more information.
+Working Conditions and Employee Development
+reflects the number of days actually worked in relation to
+agreed-on work time. The 2020 figure was again high (2019:
+96.0 percent).
+E.ON employees' health rate was 96.3 percent in 2020. It
+Regrettably, three contractors and two E.ON employees died
+in workplace accidents in 2020. After a fatal accident, E.ON
+immediately initiates an investigation to understand the exact
+course of events that led to it. In addition, within 24 hours an
+initial report must be submitted to the E.ON SE Management
+Board member responsible for the unit where the accident
+occurred and to the board member responsible for HSE. The
+aim is to identify the root causes and to take all necessary
+measures to prevent comparable accidents in the future. E.ON
+has seen the organization's awareness of occupational safety
+steadily increase for several years while its accident rates have
+declined. Nevertheless, serious and even fatal accidents still
+occur. E.ON cannot and will not accept this. It has therefore
+further intensified its efforts to prevent accidents. For example,
+in mid-2020 E.ON subsidiary Westnetz launched a large-scale
+occupational safety program. The program is supported by one
+of the world's most recognized consulting firms for safety and
+operational risk management. The program's task force estab-
+lished several work streams and initiated in-house and outside
+analyses to shed light both on cultural as well as technical/
+process-related issues.
+Employee TRIF of 2.4 in 2020 was similar to the 2019 figure (2.5).
+Contractor TRIF decreased from 2.5 in 2019 to 2.3 in 2020.
+Combined TRIF declined from 2.5 to 2.3, which E.ON views
+as reaffirmation of the measures being taken to prevent serious
+accidents. Comparability with the prior year is limited, since
+innogy was included for only part of 2019.
+²Includes innogy from October 1 to December 31, 2019.
+¹TRIF measures the number of reported fatalities and occupational injuries and illnesses per
+million hours of work. It includes injuries that occur during work-related travel that result in
+lost time or no lost time and/or that lead to medical treatment, restricted work, or work at a
+substitute work station.
+E.ON's Group-wide competency model, Grow@E.ON, for example,
+continues to be a core part of the GPS and is a key enabler for
+professional development. Grow@E.ON is integrated into all HR
+and people processes. It helps to ensure that E.ON recruits,
+retains, places in the right roles, and develops the people who
+will continue to drive the Company's success. E.ON offers a
+range of career paths. This ensures that E.ON is an attractive
+employer to people who wish to pursue a specialist or a gener-
+alist career. Grow@E.ON was updated in 2020 to reflect E.ON
+To live up to E.ON's commitment to employees' H&S, its HSE
+management assigns responsibilities clearly and sets minimum
+standards (see HSE Management below). These apply not
+only to E.ON employees but also to contractor employees who
+do work on E.ON's behalf. With few exceptions, all E.ON units
+are required to have an H&S management system certified to
+ISO 45001 (ISO 45001 replaced OHSAS 18001), a globally
+recognized standard for such systems. An annual management
+review is an important part of this management system. The
+reviews are conducted by the units themselves and are a pre-
+requisite for certification to be renewed. If necessary, Group
+Audit and HSE at Corporate Functions conduct HSE audits to
+determine whether E.ON's standards are being met. To decide
+E.ON's approach to H&S is proactive and preventive, and the
+Company is committed to zero harm. Consequently, the over-
+riding objective is to prevent accidents from ever happening.
+By signing the Düsseldorf Statement on the Seoul Declaration
+on Safety and Health at Work and the Luxembourg Declaration
+on Workplace Health Promotion in 2009, E.ON pledged to pro-
+mote a culture of prevention.
+E.ON is making continuous progress towards establishing a
+caring culture at E.ON. This encompasses ensuring its employees'
+safety in the workplace, promoting their health, and also support-
+ing their mental well-being. Some employees perform potentially
+risky tasks, such as working on power distribution networks.
+Strict safety standards are therefore of particular importance to
+E.ON. First and foremost, accidents endanger employees' health.
+But accidents may also damage property, cause work stoppages,
+and harm E.ON's reputation. In 2020, amid the Covid-19 pan-
+demic, all three aspects-safety, health, and well-being-took on
+even greater significance. The pandemic posed challenges which
+E.ON met in keeping with its Caring Culture.
+5Scope 3 emissions from purchased power and the combustion of natural gas sold to end-customers are from energy sold to residential and B2B customers only. Energy sold to sales partners and
+the wholesale market is not included.
+³Excludes E.ON's consumption of district heating due to the immateriality of the quantity compared with the other Scope 2 categories.
+4First-time reporting of market-based Scope 2 emissions in 2020.
+¹From 2019 onward, emissions from power and heat generation are divided into emissions from plants owned and operated by E.ON (Scope 1) and emissions from plants leased to, and operated by,
+customers (Scope 3). This improves E.ON's ability to manage its emissions and makes progress toward its targets more transparent.
+2Prior-year figures were adjusted owing to changes in methodology and the scope of recalculation, as specified in the text.
+Total (market-based)
+Total (location-based)
+117.85
+68.78
+128.982
+61.31
+E.ON's direct and indirect CO2e emissions totaled 117.85 million
+metric tons in 2020, of which 3 percent were direct Scope 1
+emissions, 97 percent were indirect Scope 2 and 3 emissions.
+Scope 1 emissions decreased by 8 percent year on year, indirect
+emissions by about 10 percent.
+120.272
+6.09
+2.89
+4.822
+4.49
+Scope 2: Indirect emissions associated with E.ON's electricity and heat consumption (location-based)³
+Scope 2: Indirect emissions associated with E.ON's electricity and heat consumption (market-based) 3,4
+Scope 3: Indirect emissions from all other business operations 1,5
+4.58
+3.882
+3.56
+2018
+108.21
+116.26
+balance, as of year-end 2020 E.ON had no reportable non-
+financial net risk exposure. Information about E.ON's financial
+risks and chances can be found in the Risk and Chances Report
+in the Combined Group Management Report for the 2020
+financial year.
+The 2019 report disclosed Scope 1 emissions for 2019 of
+4.91 million metric tons of CO₂e for E.ON and 0.87 million metric
+tons for innogy. In 2020 E.ON recalculated innogy's 2019 emis-
+sions using E.ON's emission factors, which are based on the
+internationally recognized factors of the International Energy
+Agency ("IEA") and the U.K. Department for Environment, Food,
+and Rural Affairs ("DEFRA").
+Scope 3 emissions previously disclosed for 2019 amounted to
+59.67 million metric tons of CO₂e for E.ON and 88.13 million
+metric tons for innogy. In 2020 innogy's 2019 emissions in this
+category were likewise recalculated using E.ON's emission factors,
+which here are based on the IEA and DEFRA's factors as well
+as an E.ON-specific emission factor for the recalculation of pur-
+chased goods and services. Also, innogy's figures for purchased
+power and combustion of natural gas sold to end-customers
+were checked against E.ON's materiality threshold for reporting
+boundaries.
+Occupational Health and Safety
+Aspect 2: Employee Matters
+More detailed information on E.ON's TCFD reporting can be
+found in the "Climate protection" chapter of the 2020 Sustain-
+ability Report and in a supplementary document "On course for
+net-zero - Supporting paper for E.ON's decarbonization strategy
+and climate-related disclosures 2020", which is available on
+E.ON's corporate website. Furthermore, additional information
+is published in E.ON's CDP climate disclosure. CDP is one of the
+largest international associations of investors that independently
+assess the transparency and detail of companies' climate reporting.
+E.ON's current climate metrics consist mainly of the emission
+figures for its carbon footprint categories (Scope 1, 2, and 3)
+and the measurement of progress toward its climate targets
+(see above). For all GHG categories relevant for E.ON, E.ON
+monitors progress toward these targets on an annual basis
+and analyzes progress in greater depth every three years as
+part of a trend analysis; the next in-depth analysis will be at
+year-end 2022 and use 2019 figures as the baseline.
+• Metrics and Targets
+E.ON plans to continually monitor and assess its sustainability,
+climate, and other non-financial risks and opportunities and
+their potential impact in the short, medium, and long term.
+In 2018 E.ON began to integrate the assessment and manage-
+ment of these risks more systematically into its overall risk
+management. In 2020 E.ON completed the task of organiza-
+tionally integrating climate risk assessment into its ERM
+process, which will now be the standard ERM process from
+2021 onward.
+Risk Management
+E.ON's business operations promote sustainability: its cur-
+rent climate agenda includes emission-reduction targets for
+2030, 2040, and 2050. The acquisition of innogy's networks
+and customer business substantially strengthened E.ON's
+core businesses and therefore enhances its ability to promote
+sustainability. Since climate change could create risks as well
+as opportunities for E.ON's business, the Company reviews
+a range of climate scenarios on an ad hoc basis.
+Strategy
+Scope 2 emissions previously disclosed for 2019 totaled
+2.73 million metric tons of CO₂e for E.ON and 3.05 million metric
+tons for innogy. In 2020 innogy's 2019 power distribution losses
+and purchased power used in buildings and operations were
+recalculated using E.ON's emission factors, which are based on
+the IEA's factors. innogy's market-based power distribution
+losses in 2019 were not available for the 2019 report. They were
+calculated for this report using E.ON's calculation method and
+added to the E.ON figure for 2019.
+The importance of climate change for E.ON is reflected in the
+Company's governance. The Management Board has overall
+responsibility for E.ON's sustainability strategy, including its
+climate targets. The Supervisory Board is informed about
+E.ON's sustainability performance by its Audit and Risk
+Committee and by the Management Board. Furthermore, it
+established the Innovation and Sustainability Committee in
+December 2019.
+•
+•
+guidance for E.ON's reporting. Established in 2015, the TCFD
+aims to develop consistent, comparable, and accurate climate-
+related financial risk disclosures that companies can use to
+provide information to investors, lenders, insurers, and other
+stakeholders. E.ON became an official TCFD supporter in 2019,
+which marks the start of its TCFD reporting below. Going for-
+ward, the Company will continue to expand its TCFD reporting.
+105
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+E.ON is committed to operating sustainably and has in place the
+necessary governance structure to do so. This includes making
+steady progress toward its climate targets, effectively managing
+its climate-related risks, seizing climate-related opportunities
+that fit with its corporate strategy, and reporting transparently
+on all these matters. The recommendations of the Task Force on
+Climate-related Financial Disclosures ("TCFD") provide important
+In 2020 the E.ON Management Board set new climate targets
+that, in the future, are to serve as KPIs that are relevant for
+management purposes. The exact details will be determined in
+2021. By reducing its GHG emissions, E.ON intends to become
+carbon-neutral by 2040. E.ON plans to reduce its Scope 1 and 2
+emissions by 75 percent by 2030 and by 100 percent by 2040
+(both relative to 2019). E.ON aims to reduce its Scope 3 emissions
+by 50 percent by 2030 and by 100 percent by 2050 (both relative
+to 2019). To meet these targets, E.ON has defined measures to
+reduce emissions in all three scopes of the GHG Protocol. E.ON
+intends to reduce its direct emissions (Scope 1) by updating
+and optimizing its gas networks and heat generation business
+and indirect emissions (Scope 2) by conserving energy itself and
+by reducing line losses in its power network business. E.ON's
+Scope 3 emissions, which occur primarily during the generation
+of the power the Company purchases and resells and during the
+use of the gas it sells, account for most of E.ON's carbon foot-
+print. E.ON's main objective for them is to increase the proportion
+of renewable energy it provides to its customers. Information
+about the progress E.ON makes toward its climate targets is
+presented first to the Sustainability Council, which met three
+times in 2020. The Chief Sustainability Officer, who chairs the
+council, reports the information to the E.ON Management
+Board on a regular basis.
+Governance
+Since 2018, E.ON's management of non-financial risks has been
+aligned with the five mandatory aspects. In 2020 E.ON focused
+in particular on human rights and environmental and climate
+matters in order to prepare to comply with possible new regula-
+tory requirements in these areas. The climate risk assessment
+was organizationally integrated into the Group's Enterprise Risk
+Management ("ERM") system in October 2020 and will be a
+standard ERM process from 2021 onward. Based on this, the
+content of the climate risk assessment will be further developed.
+E.ON also made significant progress in further integrating non-
+financial risks into its broader risk management processes. The
+process and findings of the non-financial risk analysis for 2020
+were presented to, and approved by, the E.ON Group Risk Com-
+mittee on December 8, 2020. The findings indicated that, on
+E.ON's ability to acquire new customers and retain existing ones
+is crucial for its business success. Global trends like climate
+protection and digitization are not only altering the energy land-
+scape. They are also creating new customer needs. E.ON wants
+to help meet these needs and accompany its customers on their
+sustainability journey. E.ON will only remain successful in the
+marketplace by adapting its products and services to these jour-
+neys and by continually improving its performance.
+-125
+194
+(30) Supplemental Cash Flow Disclosures
+194
+(28) Contingent Liabilities and Other Financial Obligations
+(29) Litigation and Claims
+193
+192
+(27) Liabilities
+187
+(25) Provisions for Pensions and Similar Obligations
+184 (26) Miscellaneous Provisions
+177
+175 (24) Non-controlling Interests
+(31) Derivative Financial Instruments and Hedging Transactions
+(23) Changes in Other Comprehensive Income
+(22) Retained Earnings
+174
+(21) Additional Paid-in Capital
+E.ON is committed to respecting human rights in all its business
+processes. Failure to respect people's fundamental rights and
+needs has serious consequences for those affected and may
+damage the Company's reputation. Compliance with social stan-
+dards also plays an important role in the business relationships
+with enterprise partners. In addition, there are increasing regu-
+latory requirements for corporate transparency and control. For
+example, the U.K. Modern Slavery Act obliges E.ON to report
+on the steps it takes to prevent international human trafficking.
+E.ON's CEO Johannes Teyssen is also its Chief Sustainability
+Officer and Chief Human Rights Officer.
+Human Rights and Supplier Management
+Aspect 4: Human Rights
+Due to the challenges of collecting feedback from small and
+medium-sized enterprises ("SME") customers during the first
+pandemic-related lockdown, the Management Board decided
+to exclude SME NPS from the overall company factor for 2020.
+It's planned to be included in 2021.
+Our average strategic NPS for residential customers increaed
+steadily over the course of 2020 and was at its highest level in
+October and December. It was above the competitor average
+throughout the year.
+The Customer Immersion program enables senior managers
+and employees to interact directly with residential and business
+customers. Its purpose is to bring the customer's voice into the
+organization and enhance employees' customer orientation.
+In 2020 E.ON also established a Global Customer Leadership
+team consisting of senior customer experience leaders from
+across the business as well as representatives of the Customer
+and Market Insights team. Its purpose is to strengthen the cus-
+tomer's voice and propel customer centricity in all E.ON markets.
+The team, which had its first meeting in September 2020, meets
+every two months to review performance, identify areas for
+cross-regional collaboration, and define a common customer
+narrative for the whole business.
+for customer loyalty in their respective unit. They take the lead
+on related projects and activities in their sales territory and share
+information about successful programs and service improve-
+ments on a monthly basis. E.ON has Customer Experience
+teams in Germany, the United Kingdom, Italy, Romania, Sweden,
+the Czech Republic, and Hungary. Businesses in the Netherlands
+and Poland joined the organization over the course of 2020.
+112
+175
+198
+(32) Additional Disclosures on Financial Instruments
+208
+42
+Changes in inventories (finished goods and work in progress)
+40,803
+60,944
+(6)
+Sales²
+-1,389
+-2,661
+Electricity and energy taxes
+42,192
+63,605
+Sales including electricity and energy taxes
+2019
+2020¹
+Note
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Income
+118
+(38) List of Shareholdings Pursuant to Section 313 (2) HGB
+218
+(36) Compensation of Supervisory Board and Management Board
+(37) Subsequent Events
+217
+216
+(35) Segment Reporting
+211
+210 (34) Transactions with Related Parties
+(33) Leasing
+Own work capitalized
+The coronavirus pandemic made 2020 a very challenging year.
+The regional units responded swiftly. The uninterrupted supply
+of energy was ensured at all times. In addition, E.ON arranged
+for debt management processes to be adapted to the changed
+requirements. E.ON also launched new digital services to improve
+customer access and assistance, despite the closing of customer
+centers necessitated by government lockdown policies. A video
+chat, for instance, enabled customers to accomplish tasks
+without have to go to a company shop.
+Income/Loss from equity investments
+Cost of materials²
+1,017
+1,792
+1,270
+1,063
+-40
+(5)
+729
+1,550
+1,310
+-871
+(11)
+Net income
+Income/Loss from discontinued operations, net
+Income from continuing operations
+Income taxes
+-1,677
+-43
+253
+242
+Attributable to shareholders of E.ON SE
+¹Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+2,293
+2,607
+Weighted-average number of shares outstanding (in millions)
+0.68
+0.39
+from net income
+0.44
+-0.02
+from discontinued operations
+0.24
+0.41
+from continuing operations
+(14)
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted³
+in €
+Attributable to non-controlling interests
+-1,390
+Interest and similar expenses
+1,032
+670
+-2,489
+-4,166
+(15)
+-4,101
+-5,866
+(12)
+-31,434
+-47,147
+(9)
+5,367
+8,907
+(8)
+487
+680
+(7)
+Depreciation, amortization and impairment charges
+Personnel costs
+Other operating expenses²
+Other operating incomes²
+(8)
+-7,570
+Income from other securities, interest and similar income
+58
+18
+Separate Combined Non-Financial Report
+-587
+-702
+(10)
+Financial results
+1,359
+2,883
+Income from continuing operations before financial results and income taxes
+421
+408
+Income from companies accounted for under the equity method
+-290
+-317
+Thereof: Impairments of Financial Assets
+-10,919
+The Chief Operating Office-Commercial ("COO-C") at Corpo-
+rate Functions coordinates the Company's brand and marketing
+strategy with the aim of further developing and strengthening
+the E.ON brand. COO-C supports the energy sales and solutions
+businesses for all customer categories, in all markets. The mem-
+bers of E.ON's Customer Experience teams serve as ambassadors
+783
+but these market are not included in E.ON's 2020 NPS figures.
+A methodology adopted in 2017 enables E.ON to measure
+strategic NPS consistently across all its markets. This, in turn,
+makes it possible for E.ON to identify and resolve cross-market
+customer issues and also to target areas where it could provide
+useful innovations for its customers. The methodology's auto-
+mated reporting eliminates the errors of manual data entry,
+thereby improving data quality and auditability.
+158
+(12) Personnel-Related Information
+155
+(11) Income Taxes
+152
+(10) Financial Results
+151
+(9) Cost of Materials
+151
+(8) Other Operating Income and Expenses
+(13) Other Information
+(7) Own Work Capitalized
+(4) Scope of Consolidation
+149
+149
+(6) Revenues
+149
+142
+142
+2Adjustment of prior-year figures in the context of "failed-own-use" accounting regarding presentation of sales, cost of materials, other operating income and other operating expenses with no
+impact on earnings.
+(3) Impact of the Covid-19 Pandemic
+141
+(5) Acquisitions, Disposals and Discontinued Operations
+159
+(14) Earnings per Share
+E.ON defines Group-wide targets for strategic NPS and journey
+NPS annually and uses both at the segment and unit level for
+management purposes. Strategic NPS is highly significant for
+management purposes because of the information collected
+about competitors. Beginning in September 2020, the E.ON
+Management Board receives a monthly report on NPS perfor-
+mance. In addition, the Chief Operating Officer-Commercial
+and the regional units' CEOs discuss NPS and customer issues
+at market reviews, which are conducted on a regular basis. The
+variable compensation of senior managers has two components:
+a company factor and a factor reflecting a manager's individual
+performance. Since 2020, strategic NPS and journey NPS
+account for 20 percent of the company factor. In 2020 NPS tar-
+get achievement was again not factored into the E.ON Manage-
+ment Board's compensation; however, E.ON began the process
+of working out how to do so appropriately. Beyond the NPS
+program, each unit has a set of game-changing initiatives in
+place to systematically improve its customer experience. They
+are sponsored by the respective unit's CEO and board, whose
+members are personally responsible for improving their unit's
+NPS. The initiatives, which are defined annually, may span mul-
+tiple years depending on the level of transformation required.
+E.ON introduced these initiatives in 2017 and initially called them
+CEO-led signature actions.
+Security of Supply
+Aspect 3: Social Matters
+Pages 51 to 53 of the Annual Report contain information on
+diversity and inclusion at E.ON.
+Diversity and Inclusion
+People Strategy. The talent boards will enable E.ON to evaluate
+the effectiveness of its talent management once enough data
+have been collected.
+E.ON wants to retain people (and their expertise) and enable
+them to grow professionally. One of the objectives is therefore
+to develop E.ON's employees so that management positions
+can be filled in-house. Placement conferences have a shared
+platform to systematically track how many women participated
+in the application process and who ultimately got the job. The
+platform also allows E.ON to monitor whether selected candi-
+dates are from its development pool and reflect its diversity
+targets. In addition, the aforementioned talent boards focus not
+only on talent identification and succession but also, in recent
+years, on diversity issues, such as increasing the proportion of
+women and employees from minority groups in the Company's
+leadership pipeline. E.ON enhanced its commitment to these
+issues in 2020 by making diversity a priority in its new Group
+E.ON believes that an attractive compensation package includ-
+ing appealing and up-to-date fringe benefits is essential for
+rewarding its employees. The compensation plans of nearly all
+employees contain an element that reflects E.ON's performance.
+This element is typically based on the same key performance
+indicators that are also used in the E.ON Management Board's
+compensation plan.
+E.ON has a single, Group-wide process for hiring executives. It
+is designed to improve how E.ON fills executive positions, make
+hiring more transparent, and ensure equal opportunity. Its main
+component is a biweekly placement conference at which talent
+leaders from around the Company discuss vacancies and potential
+candidates. E.ON's mechanisms ensure that executives are
+engaged in ongoing professional development, that E.ON has a
+transparent view of its current talent situation and the needs for
+the future, and that leaders across the E.ON Group have develop-
+ment opportunities. Since feedback is essential for empowering
+people to perform at their best, E.ON also provides employees
+with periodic performance and career-development reviews.
+to recommend E.ON as an employer. Since then, eNPS has
+improved from -4 to +25. The 2020 survey also included a series
+of questions on what E.ON calls its Caring Culture, including
+where E.ON could still improve its safety culture as well as its
+support for employees' health and well-being in general. E.ON
+analyzes survey feedback carefully to identify areas where the
+Company may need to do better.
+109
+The standards for human rights and ethical business practices
+E.ON requires its suppliers to meet are defined in the Supplier
+Code of Conduct, which was updated in 2020 and adopted by
+the former innogy's units. The updated version contains a more
+detailed description of corporate social responsibility ("CSR")
+requirements and information about how to contact E.ON's
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+174
+(20) Capital Stock
+172
+172 (19) Liquid Funds
+(18) Receivables and Other Assets
+171
+(15) Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+(16) Companies Accounted for under the Equity Method and Other Financial Assets
+(17) Inventories
+171
+168
+159
+(2) New Standards and Interpretations
+One of E.ON's main goals as an energy company and distribution
+grid operator is to ensure that its customers have a secure supply
+of electricity. A reliable electricity supply is essential for indus-
+trialized countries to be able to maintain their infrastructure and
+meet their inhabitants' needs. For example, industrial customers
+that operate a high-precision production facility require a con-
+stant network frequency. If frequency fluctuates, machinery can
+break down, resulting in additional costs. A power outage can
+have serious consequences, and not just for industrial customers.
+At companies, government agencies, and households, most
+processes are no longer possible without electricity. One of
+the challenges in energy supply is that, increasingly, electricity
+comes from distributed sources. As a result, electricity is fed
+into the network at many different points. Moreover, renewables
+feed-in fluctuates because it depends on the weather and other
+factors beyond E.ON's control.
+140
+126
+Report of the Supervisory Board
+Strategy and Objectives
+E.ON's Code of Conduct focuses on the guiding principle,
+"Doing the right thing." It is supplemented by several People
+Guidelines that lay down specific rules ("Doing things right").
+The CCO reports on a quarterly basis to the E.ON Management
+Board and to the Supervisory Board's Audit and Risk Committee
+on the status of the CMS's effectiveness and current develop-
+ments and incidents. In the event of serious incidents, the Man-
+agement Board and the Audit and Risk Committee are informed
+immediately. The same applies to important new laws. Potential
+violations are investigated centrally by Group Audit and Group
+Compliance.
+The E.ON Management Board has the ultimate responsibility for
+ensuring compliance with applicable laws and for monitoring
+compliance risks. The E.ON Group has an effective compliance
+management system ("CMS"). The CMS sets uniform Group-
+wide minimum standards for certain compliance issues, such
+as anti-corruption. Pursuant to a Group-wide policy, the Chief
+Compliance Officer ("CCO"), the Group Compliance division,
+and the business units' Compliance Officers are responsible for
+refining and optimizing the CMS on a continual basis.
+E.ON is committed to combating corruption in all its manifesta-
+tions and supports national and international efforts directed
+against it. E.ON rejects it as a member of the UN Global Compact
+as well. Corruption leads to decisions being made for the wrong
+reasons. It can thus impede progress and innovation, distort
+competition, and do long-term damage to companies. Employ-
+ees, managers, and board members guilty of corruption may be
+subject to fines and criminal prosecution. To earn stakeholders'
+lasting trust, E.ON closely monitors compliance with laws and
+its own policies. If violations occur, E.ON deals with them trans-
+parently and, if necessary, takes disciplinary action.
+Compliance and Anti-Corruption
+Aspect 5: Anti-Corruption
+Begun in 2017, the German National Action Plan on Business
+and Human Rights ("NAP") serves as a forum for companies,
+trade associations, policymakers, non-governmental organiza-
+tions, and academia to promote respect for human rights along
+the value chain. The NAP defines guiding principles for embedding
+human rights due diligence ("HRDD") into corporate strategy
+and business processes and encourages companies to conduct
+voluntary HRDD. In April 2020 E.ON again participated in vol-
+untary NAP monitoring, which was organized by the German
+government. E.ON first participated in 2019, when it conducted
+a rigorous benchmarking and a human rights risk assessment
+encompassing 80 percent of its current and anticipated expen-
+ditures and in all purchasing categories. In 2020 Supply Chain
+designed a systematic process for rolling out a risk matrix devel-
+oped in 2019. The purpose of the matrix, which breaks down
+risks by country and purchasing category, is to mitigate any
+potential risk of human rights violations. In 2021 the Company
+plans to review the matrix with regard to the new E.ON's sup-
+pliers (including the former innogy's suppliers, which were not
+included in 2020) and to update it on a regular basis. All of the
+above-mentioned activities are embedded into the Group Supply
+Chain function's overall Supplier Relationship Management
+("SRM") system.
+E.ON's employees can report potential violations of human rights
+through internal reporting channels or a Group-wide external
+whistle-blower hotline. In December 2019 E.ON extended the
+hotline service and published the hotline number online. Not
+only E.ON employees, but also business partners, their employ-
+ees and other third parties can contact this hotline confidentially.
+The hotline can process calls in the languages of all countries
+in which E.ON operates. Group Compliance forwards the infor-
+mation to the relevant department or unit. Depending on the
+nature and severity of the potential violation, Group Compliance
+may report it immediately to the E.ON Management Board,
+notify law enforcement, initiate its own investigation, or take
+other appropriate action. In 2020 no violation of human rights
+was reported through these channels.
+114
+Combined Group Management Report
+Separate Combined Non-Financial Report
+Similar to the procuring of solid biomass, E.ON's Supplier Code of
+Conduct is integrated into contracts for procuring uranium and
+nuclear fuel assemblies and supplemented by the Nuclear Fuel
+Purchasing Amendment and the E.ON Nuclear Fuel Policy which
+define further standards. E.ON purchases uranium exclusively
+from established suppliers with proven experience. Additionally,
+further performance evaluations of fuel-suppliers are conducted
+which can include reviews or on-site audits.
+The Company is committed to procuring fuels responsibly and
+sustainably. Suppliers of solid biomass must, like non-fuel
+suppliers, contractually agree to comply with the E.ON Supplier
+Code of Conduct. In addition, the E.ON Biomass Purchasing
+Amendment defines the Company's policies and procedures,
+which include risk assessments, supplier audits, and provisions
+for joint ventures. The amendment is part of all contracts with
+biomass suppliers. They must pledge to respect human rights,
+safeguard the general living conditions of persons affected by
+biomass production, and protect biodiversity and the environment.
+of new suppliers that participated in their first SPR. The total
+number of reviews increased by 88 percent. Furthermore, E.ON
+again scrutinized its non-fuel suppliers to identify those with
+a large carbon footprint and explored ways to encourage their
+decarbonization. In 2021 E.ON plans to conduct a more in-depth
+analysis of non-fuel suppliers' climate performance and to
+recommend amelioration measures.
+Onboarding assessments help E.ON do business exclusively
+with suppliers committed to its standards. At the end of 2018
+E.ON put in place a revised and fully digital supplier onboarding
+solution that is integrated into the Company's enterprise resource
+planning system. In 2019 E.ON focused on monitoring existing
+and new suppliers to ensure that they comply with its minimum
+requirements. In October 2020 units of the former innogy
+adopted this supplier onboarding process. Every non-fuel supplier
+whose individual transaction volume exceeds €25,000 or whose
+health, safety, and environment risk is medium or high must
+complete an online onboarding process. In some cases, E.ON
+may take additional steps during the supplier onboarding process,
+such as conducting a supplier audit to assess, among other
+issues, whether the supplier complies with E.ON's standards for
+human rights. As of year-end 2020, 99.3 percent of the E.ON
+Group's purchase order and contract call-offs had completed the
+onboarding process (former E.ON units). In addition, E.ON peri-
+odically conducts supplier performance reviews ("SPR") of its key
+non-fuel suppliers using five key performance indicators ("KPIs"):
+quality, commercial, delivery, processes and innovation, and
+CSR; the latter includes the protection of human rights. The
+respective results are discussed with each supplier during a
+performance review meeting. The outcome of the meeting may
+trigger specific actions for the supplier to improve its perfor-
+mance in one or more of the KPIs if it wants to continue doing
+business with E.ON. At the end of 2019 E.ON and innogy drew
+on their respective best practices to harmonize the SPR process.
+The harmonized process has been in place since January 1, 2020.
+Since then, innogy's key suppliers were assessed for their ESG
+performance as well, an aspect that had not been part of the
+former innogy's SPR. In 2020 E.ON increased the proportion
+whistle-blower hotline. The supplier prequalification process
+consists of self-registration, formal agreement to adhere to
+E.ON's Supplier Code of Conduct, and a compliance check. Non-
+fuel suppliers that are not subject to supplier onboarding must
+agree to the Company's General Terms and Conditions for Pur-
+chase Contracts, which are legally binding. These oblige non-
+fuel suppliers, among other things, to comply with the Supplier
+Code of Conduct and to endorse the UNGC's principles. In addi-
+tion, the Supply Chain Function Policy and Supply Chain Hand-
+book define Group-wide principles, processes, and responsibilities
+for non-fuel procurement, excluding the exceptional cases
+covered under the exception list (such as commodity, financial
+and real estate transactions, insurance, taxes).
+113
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Strategy and Objectives
+Report of the Supervisory Board
+E.ON's goal is to prevent human rights abuses, environmental
+damage, and corporate malfeasance by identifying associated
+risks along its value chain from a holistic point of view. Periodic
+risk assessments enable E.ON to identify violations or suspected
+violations. Suppliers with identified violations or suspected vio-
+lations are listed in a new KPI ("Suppliers under investigation/
+observation") that was added to Supply Chain's quarterly
+reporting in 2020. In such cases, the Supply Chain Compliance
+Officer and the respective Supply Chain Director are notified,
+and a process is set in motion to ensure that the situation is
+rectified without delay. If it is not, E.ON terminates its business
+dealings with the supplier. In 2020 no business dealings were
+terminated because no compliance violations were detected.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+115
+As a compulsory reference, the Code helps employees make
+the right decisions in various professional situations and remain
+true to the Company's values. In the preface, the E.ON Manage-
+ment Board calls on all employees to act in a correct manner in
+order to protect themselves and the Company. The introduction
+explains why a Code of Conduct is needed. The main body of
+the Code contains comprehensible guidance on all issues that
+are of particular concern to E.ON. These include human rights,
+anti-corruption, fair competition, and compliant relationships
+with business partners. The Code also contains an integrity
+check. By answering just a few questions, employees can find
+out whether their assessments are in compliance with E.ON
+principles and values. The Code clearly states E.ON's prohibition
+against company donations to political parties, political candi-
+dates, managers of political offices, and representatives of
+public agencies.
+Notes
+126
+Statement of Changes in Equity
+124
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+122
+E.ON SE and Subsidiaries Balance Sheets-Equity and Liabilities
+121
+E.ON SE and Subsidiaries Balance Sheets-Assets
+120
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+119
+E.ON SE and Subsidiaries Consolidated Statements of Income
+118
+Statements
+Financial
+Consolidated
+The effectiveness of E.ON's CMS is the main indicator of the
+Company's compliance performance for purposes of manage-
+ment control. All compliance measures, policies, processes,
+controls, and so forth are assessed and guided by this criterion.
+The CMS's effectiveness is also monitored by the E.ON Manage-
+ment Board, the Supervisory Board's Audit and Risk Committee,
+and Group Audit. The latter, an independent entity, is E.ON's
+third line of defense for monitoring the CMS. The criteria E.ON
+uses for monitoring effectiveness include assessing whether
+and how prescribed measures are implemented across E.ON.
+The Management Board and the Audit and Risk Committee are
+convinced that the CMS was again effective in 2020. Their
+assessment was based in part on audits as well as surveys and
+interviews of employees and stakeholders.
+E.ONs wants to ensure compliance standards in its supply chain
+as well. All non-fuel suppliers and all suppliers of uranium and
+solid biomass must therefore sign the Supplier Code of Conduct,
+which contains binding standards for ethical business practices.
+It was updated in 2020 and adopted by the former innogy units.
+In addition, E.ON conducts compliance checks to determine
+whether potential suppliers act in accordance with the company's
+values and principles. Also, E.ON subjects potential suppliers
+to a prequalification, which involves checking their identity and
+integrity to ensure that they meet E.ON's compliance standards.
+It includes searching media reports for references to a supplier
+in connection with compliance issues such as corruption and
+checking official sanction and terrorism lists. In some cases,
+potential suppliers must also complete a questionnaire, which
+E.ON evaluates carefully. Prequalification is mandatory for all
+new suppliers.
+E.ON employees, but also business partners, their employees
+and other third parties can contact the hotline confidentially.
+Group Compliance forwards the information to the relevant
+department or unit.
+If employees suspect misconduct or a violation of laws or com-
+pany policies, they are instructed to report it immediately. If they
+wish, they may do so anonymously through internal reporting
+channels or a Group-wide external whistle-blower hotline, which
+E.ON operates with a law firm in all E.ON languages. Not only
+To determine in which functions the risk for some compliance
+violations is particularly high, E.ON conducts compliance risk
+assessments on a regular basis. Based on their findings, preven-
+tive measures are taken.
+Managers and employees of business partners may-within
+predefined limits-be invited to events and restaurants, or
+receive gifts. The Anti-Corruption People Guideline contains a
+decision-making scheme that uses the familiar green, amber,
+and red of traffic lights to indicate when accepting or granting
+such offers or gifts is permissible, potentially problematic, or
+forbidden. Gratuities above a certain threshold, which varies
+by country and national regulations, must receive Compliance
+Officer approval. Particularly strict requirements apply to invi-
+tations and gifts from public, elected, and government officials
+and their representatives.
+(1) Summary of Significant Accounting Policies
+Part of E.ON's corporate strategy is to adapt its distribution grids
+to the emerging distributed energy world. They form a crucial
+link between electricity producers and consumers. E.ON's dis-
+tribution grids must function properly and be equipped to meet
+the challenges of the new energy world for E.ON to continue to
+ensure a reliable electricity supply in the future. For this purpose,
+E.ON continually upgrades its existing infrastructure with smart-
+grid technology. This enables E.ON to better manage energy
+generation, distribution, and storage.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Separate Combined Non-Financial Report
+804
+465
+339
+646
+358
+288
+Romania
+235
+78
+157
+205
+50
+154
+262
+192
+145
+Czech Republic
+191
+65
+126
+187
+59
+128
+178
+61
+117
+Hungary
+98
+47
+E.ON's distribution system operators ("DSOS") are responsible for
+the safe and reliable operation of its distribution networks. Their
+network control centers oversee network operations. E.ON's
+522
+143
+E.ON measures customer loyalty by means of Net Promoter
+Score (NPS), which was introduced in 2009 and became a
+Group-wide program in 2013. NPS indicates customers' will-
+ingness to recommend E.ON and its services. It also helps E.ON
+identify which issues are currently of particular importance to
+its customers and thus adapt its activities to current customer
+needs. There are three types of NPS. Strategic NPS or top-down
+NPS compares E.ON's performance with competitors' and is
+based on the feedback of customers regardless of whether they
+have had an interaction with E.ON. Journey NPS measures the
+loyalty of customers who have completed a journey with E.ON,
+such as transferring their energy service to their new residence
+when they move. Touchpoint or bottom-up NPS is based on the
+feedback of customers who have had a specific interaction with
+E.ON, like talking to a call center agent. NPS is used by the units
+in all E.ON's markets and since September 2020 by the Nether-
+lands and Poland as part of the innogy integration. Improvement
+targets from 2021 onward will be set for the new markets,
+E.ON puts customers at the center of everything it does. This
+pledge is a corporate value and is embedded in E.ON's customer
+experience principles, brand model, and Grow@E.ON, its Group-
+wide competency framework. E.ON's objective is to continually
+enhance customer loyalty and to become a customer-led busi-
+ness and the energy-solutions leader in its markets.
+Customer Loyalty
+E.ON improved its SAIDI figures for 2020 (based on data from
+2019) in all countries except Sweden. In Sweden the customers
+were on average more affected by power outages than in the
+prior years owing to a hurricane and severe thunderstorms in
+the summer. As in previous years, E.ON's grids in Germany were
+the most reliable.
+111
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+2DSO in which E.ON has a 49-percent stake.
+¹Figures are for the respective previous year: 2020 for 2019, 2019 for 2018, and so forth. Prior-year figures were adjusted to reflect a new calculation methodology.
+Totals may deviate due to rounding.
+79
+70
+9
+Slovakia²
+68
+11
+53
+44
+9
+Poland
+266
+87
+178
+255
+79
+176
+208
+65
+56
+28
+70
+100
+7
+Germany
+3Based on weighted-average number of shares outstanding.
+Total
+Un-
+scheduled
+Scheduled
+Total
+Un-
+scheduled
+Scheduled
+Total
+Un-
+scheduled
+Scheduled
+Minutes per year
+2018
+2019
+2020
+SAIDI Power¹
+Although the SAIDI is not used for management control purposes,
+it provides important information on the reliability of E.ON's net-
+works. At regular intervals, the DSOs inform the E.ON Manage-
+ment Board member responsible for network operations about
+their security of supply. All E.ON DSOs include their SAIDI in their
+quarterly performance report to the E.ON Management Board.
+By the end of the data-collection period, no regulatory agency
+had completed the process of validating 2020 outages. Because
+this report is supposed to contain final, service-quality figures
+that have been officially audited (by the BNetzA in Germany and
+the relevant regulatory agencies elsewhere), it publishes figures
+for the previous year below.
+E.ON's DSOs record all planned and unplanned outages at their
+distribution networks. They use these data to calculate the sys-
+tem average interruption duration index ("SAIDI"), which mea-
+sures the average outage duration per customer per year. E.ON
+discloses the SAIDI of its fully consolidated DSOs by country.
+The figure for Germany, for example, is the average of E.ON's
+DSOs there. E.ON's SAIDI in Germany is calculated according to
+the method prescribed by the German Federal Network Agency
+(known by its German acronym, BNetzA). This calculation is
+based on outages that are also verified by the BNetzA. This figure
+can therefore be deemed official. All the countries in which E.ON
+operates grids now have quality regulations. The respective
+regulatory agency reviews and validates grid operators' outage
+reports. The SAIDI figures for a particular country therefore
+reflect the methodology stipulated by its regulatory agency.
+E.ON has in place investment and maintenance plans to maintain
+and expand its grids to ensure that all of its network customers
+are connected and have a reliable energy supply. E.ON's DSOS
+are responsible for implementing these plans, which encompass
+one or more years. Their investment budgets are approved cen-
+trally. Final approval comes from the E.ON Management Board
+at the end of the annual medium-term planning and budgeting
+process. A portion of the investment budgets goes toward making
+E.ON's grids smarter by equipping them with sensors and
+command-and-control technology and by augmenting them with
+a digital layer. The increasing use of smart-grid technologies
+makes it possible to avoid or delay costly investments in conven-
+tional networks by, for example, using this technology to maxi-
+mize the capacity of existing overhead lines. Investment decisions
+always focus on efficiency as well as security of supply. E.ON
+chooses the solutions that make the most technical and economic
+sense. This is because grid investments affect the grid fees
+included in the electricity price paid by customers.
+DSOs are also responsible for resolving unforeseen outages in
+their network territory. In case of widespread outages, E.ON's
+crisis management system stipulates responsibilities and pro-
+cesses in accordance with the instructions contained in the
+Incident and Crisis Management Policy. A member of the E.ON
+Management Board oversees the Energy Networks segment.
+Under his leadership, three departments at Corporate Functions
+actively manage Energy Networks' regional units. This includes
+strategic development, capital allocation, asset management,
+and so forth.
+110
+16
+122
+To prevent human rights violations, E.ON adheres to external
+standards and defines its own principles and policies. The E.ON
+Code of Conduct (see "Aspect 5: Anti-corruption"), a revised
+version of which took effect in 2018, obliges all employees to
+contribute to a non-discriminatory and safe working environ-
+ment and to respect human rights. E.ON's Human Rights Policy
+Statement acknowledges the International Bill of Human Rights
+and the Declaration on Fundamental Principles and Rights at
+Work of the International Labour Organization ("ILO") and its
+fundamental conventions and makes reference to E.ON's own
+policies, such as the Supplier Code of Conduct. The standards
+E.ON is guided by include the Universal Declaration of Human
+Rights of the United Nations, the principles of the UN Global
+Compact ("UNGC"), and the European Convention for the Pro-
+tection of Human Rights. In 2020 the Company incorporated a
+section on human rights into a new online training module on
+compliance, human rights, and cyber and data security. This
+module is mandatory for all employees and conducted annually.
+At year-end, 87.3 percent had completed this training.
+15
+22
+146
+121
+25
+Sweden
+24
+22
+9
+25
+17
+8
+1,270
+253
+-1,126
+253
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared at cost, with the exception
+of financial assets that are measured at fair value through OCI
+(FVOCI) and of financial assets and liabilities (including deriva-
+tive financial instruments) that are recognized in income and
+measured at fair value through profit or loss (FVPL).
+-1,596
+-845
+-144
+-1,740
+4,925
+5,696
+-1,566
+Principles
+1
+9,055
+Notes
+-144
+126
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+The Consolidated Financial Statements of E.ON SE, Essen, reg-
+istered in the Commercial Register of Essen District Court under
+number HRB 28196, have been prepared in accordance with
+Section 315e (1) of the German Commercial Code ("HGB") and
+with those International Financial Reporting Standards ("IFRS")
+and IFRS Interpretations Committee interpretations ("IFRIC")
+that were adopted by the European Commission for use in the
+EU as of the end of the fiscal year, and whose application was
+mandatory as of December 31, 2020.
+-846
+-895
+-145
+-145
+-750
+1
+4,130
+9,099
+1,017
+4,149
+Scope of Consolidation
+13,248
+-1,126
+5,632
+-1,483
+4,149
+13,248
+9
+238
+238
+247
+-1,483
+-1,199
+-2,405
+97
+-380
+97
+-1,579
+-2,308
+-83
+-83
+-83
+-579
+109
+109
+-470
+-380
+The Consolidated Financial Statements incorporate the finan-
+cial statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when E.ON as the investor can
+direct the activities relevant to the business performance of
+the entity, participate in this business performance in the form
+of variable returns and influence the performance and the
+related variable returns through its involvement. Control is nor-
+mally deemed established if E.ON directly or indirectly holds a
+majority of the voting rights in the investee. In structured entities,
+control can be established by means of contractual arrangements
+if control is not demonstrated through possession of a majority
+of the voting rights.
+95,385
+If a subsidiary or associate sells shares to a third party, leading
+to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control
+7.47
+7.45
+7.47
+7.44
+DKK
+Danish krone
+0.88
+0.89
+0.85
+0.90
+GBP
+British pound
+€1, annual
+average rate
+2019
+2020
+2019
+2020
+code
+ISO-
+€1, rate at
+year-end
+Currencies
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside
+the European Monetary Union:
+Foreign currency translation effects that are attributable to the
+cost of monetary financial instruments classified as at fair value
+through OCI are recognized in income. In the case of fair-value
+adjustments of monetary financial instruments, the foreign cur-
+rency translation effects are recognized in equity as a component
+of other comprehensive income.
+The functional currency as well as the reporting currency of
+E.ON SE is the euro. The assets and liabilities of the Company's
+foreign subsidiaries with a functional currency other than the
+euro are translated using the exchange rates applicable on the
+balance sheet date, while items of the statements of income
+are translated using annual average exchange rates. Material
+transactions of foreign subsidiaries occurring during the fiscal
+year are translated in the financial statements using the exchange
+rate at the date of the transaction. Differences arising from
+the translation of assets and liabilities compared with the corre-
+sponding translation of the prior year, as well as exchange rate
+differences between the income statement and the balance
+sheet, are reported separately in equity as a component of other
+comprehensive income.
+5,632
+128
+Polish złoty
+PLN
+4.56
+Notes
+or significant influence, gains and losses from these dilutive
+transactions are included in the income statement under other
+operating income or expenses.
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into line
+with those of the Group. Intercompany receivables, liabilities
+and results are eliminated in the consolidation process.
+Associated Companies
+An associate is an investee over whose financial and operating
+policy decisions E.ON has significant influence and that is not
+controlled by E.ON or jointly controlled with E.ON. Significant
+influence is presumed if E.ON directly or indirectly holds at least
+20 percent, but not more than 50 percent, of an entity's voting
+rights.
+Interests in associated companies are accounted for using the
+equity method.
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration
+are generally not recognized. Any difference between the cost
+of the investment and the pro rata remeasured value of its net
+assets is recognized in the Consolidated Financial Statements
+as part of the carrying amount.
+Unrealized gains and losses arising from transactions with
+associated companies accounted for using the equity method
+are eliminated within the consolidation process on a pro rata
+basis if they are material.
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recover-
+able amount. If the carrying amount exceeds the recoverable
+amount, the carrying amount is adjusted for this difference. If the
+reasons for previously recognized impairment losses no longer
+exist, such impairment losses are reversed accordingly.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+127
+The results of the subsidiaries acquired or disposed of during
+the year are included in the Consolidated Statement of Income
+from the date of acquisition or until the date of their disposal,
+respectively.
+The financial statements of equity interests accounted for using
+the equity method are generally prepared using accounting that
+is uniform within the Group.
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation
+process on a pro rata basis if they are material.
+Joint Operations
+A joint operation exists when E.ON and other investors directly
+control an operation, but unlike a joint venture, they do not have
+a claim to the changes in net assets from the operation. Instead,
+they have direct rights to individual assets or direct obligations
+with respect to individual liabilities in connection with the oper-
+ation. E.ON recognizes assets and liabilities as well as revenues
+and expenses in a joint operation pro rata according to the rights
+and obligations attributable to E.ON.
+Business Combinations
+Business combinations are accounted for using the purchase
+method, under which the purchase price is offset against the
+proportional share in the acquired company's net assets. The
+values at the acquisition date that corresponds to the date at
+which control of the acquired company was attained are used
+as a basis. The acquiree's identifiable assets, liabilities and con-
+tingent liabilities are generally recognized at their fair values
+irrespective of the extent attributable to non-controlling inter-
+ests. The fair values are determined using published exchange or
+market prices at the time of acquisition in the case of marketable
+securities or commodities, for example, and in the case of land,
+buildings and major technical equipment, generally using inde-
+pendent expert reports that have been prepared by third parties.
+If exchange or market prices are unavailable for consideration,
+fair values are derived from market prices for comparable assets
+or comparable transactions. If these values are not directly
+observable, fair value is determined using appropriate valuation
+methods. In such cases, E.ON determines fair value using the
+discounted cash flow method by discounting estimated future
+cash flows by a weighted-average cost of capital. Estimated
+cash flows are consistent with the internal mid-term planning
+data for the next three years, followed by two additional years
+of cash flow projections, which are extrapolated through the end
+of an asset's useful life using a growth rate based on industry
+and internal projections. In certain justified exceptional cases,
+a longer detailed planning period is used as the calculation basis.
+The discount rate reflects the specific risks inherent in the
+acquired activities. In the network area, fair values are generally
+determined by means of fair values in kind. The valuation of
+customer groups also deviates from the general procedure
+described above.
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The
+choice of method can be made on a case-by-case basis. The
+partial goodwill method is generally used within the E.ON Group.
+Transactions with holders of non-controlling interests are treated
+in the same way as transactions with investors. Should the
+acquisition of additional shares in a subsidiary result in a differ-
+ence between the cost of purchasing the shares and the carrying
+amounts of the non-controlling interests acquired, that difference
+must be fully recognized in equity.
+Gains and losses from disposals of shares to subsidiaries are
+also recognized in equity, provided that such disposals do not
+coincide with a loss of control.
+Intangible assets must be recognized separately if they are
+clearly separable or if their recognition arises from a contractual
+or other legal right. Provisions for restructuring measures may
+not be recorded in a purchase price allocation. If the purchase
+price paid exceeds the proportional share in the net assets at
+the time of acquisition, the positive difference is recognized as
+goodwill. No goodwill is recognized for positive differences
+attributable to non-controlling interests. A negative difference
+is recognized in net income.
+Foreign Currency Translation
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the trans-
+action. At each balance sheet date monetary foreign currency
+items are adjusted to the exchange rate on the reporting date;
+any gains and losses resulting from fluctuations in the relevant
+currencies are recognized in net income and reported as other
+operating income and other operating expenses, respectively.
+Gains and losses from the translation of non-derivative financial
+instruments used in hedges of net investments in foreign
+operations are recognized in equity as a component of other
+comprehensive income. The ineffective portion of the hedging
+instrument is immediately recognized in net income.
+Joint Ventures
+9,099
+-1,138
+98,080
+(24)
+Financial liabilities
+Equity
+Non-controlling interests
+-1,483
+-1,566
+5,632
+4,130
+5,696
+4,925
+-1,126
+-1,126
+(20)
+-3,857
+-4,701
+(23)
+9,099
+4,149
+9,055
+13,248
+(26)
+Miscellaneous provisions
+7,201
+8,088
+(25)
+Provisions for pensions and similar obligations
+293
+362
+(11)
+Income tax liabilities
+7,940
+7,599
+(27)
+Operating liabilities
+27,572
+29,423
+(27)
+-1,927
+13,296
+-5,257
+Reclassification related to put options
+E.ON SE and Subsidiaries Balance Sheets-Equity and Liabilities
+²Includes the preliminary differential amount from the VSE purchase-price allocation (see Note 5).
+¹Certain adjustments to the preliminary accounting for the innogy acquisition, which was provisional until September 18, 2020, must be presented retrospectively to the acquisition date.
+The prior-year figures were adjusted accordingly.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+119
+€ in millions
+20201
+2019
+Net income
+Remeasurements of defined benefit plans
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+Income taxes
+E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+121
+December 31,
+Non-controlling interests (before reclassification)
+Equity attributable to shareholders of E.ON SE
+Treasury shares
+Accumulated other comprehensive income³
+Retained earnings
+13,368
+13,368
+(21)
+Additional paid-in capital
+2,641
+2,641
+(20)
+Capital stock
+20191
+2020
+Note
+€ in millions
+(22)
+Items that will not be reclassified subsequently to the income statement
+13,468
+(11)
+Gain/Loss on disposal of intangible assets and property, plant and equipment, equity investments and securities (>3 months)
+Intangible assets and property, plant and equipment
+-230
+-229
+Other non-cash income and expenses
+-251
+495
+Changes in deferred taxes
+-328
+486
+2,489
+4,166
+Changes in provisions
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+-1,063
+40
+1,792
+169
+-466
+6
+-38
+Cash provided by (used for) operating activities of continuing operations
+Other operating liabilities and income taxes
+Trade payables
+Other operating receivables and income tax assets
+Trade receivables
+129
+104
+Inventories
+56
+-296
+Changes in operating assets and liabilities and in income taxes
+-36
+19
+Securities (>3 months)
+-392
+-353
+Equity investments
+1,270
+Deferred tax liabilities
+20195
+Income/Loss from discontinued operations, net
+847
+(11)
+Income tax liabilities
+16,601
+16,215
+(27)
+Trade payables and other operating liabilities
+787
+3,841
+(27)
+Financial liabilities
+58,982
+61,761
+Non-current liabilities
+2,508
+2,993
+3,418
+Miscellaneous provisions
+(26)
+3,904
+Net income
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+122
+2Thereof relating to discontinued operations (December 31, 2020): €17 million; (December 31, 2019): -€43 million.
+¹Certain adjustments to the preliminary accounting for the innogy acquisition, which was provisional until September 18, 2020, must be presented retrospectively to the acquisition date.
+The prior-year figures were adjusted accordingly.
+98,080
+95,385
+Total equity and liabilities
+25,850
+24,569
+Current liabilities
+602
+185
+(5)
+Liabilities associated with assets held for sale
+4,019
+2020
+Cash flow hedges
+1,270
+1,792
+2,354
+Financial receivables and other financial assets
+(18)
+622
+699
+Operating receivables and other operating assets
+(18)
+1,887
+3,244
+Deferred tax assets
+(11)
+2,283
+2,194
+Income tax assets
+(11)
+34
+3,592
+Non-current securities
+1,730
+1,883
+Right-of-use assets
+(33)
+2,543
+2,582
+Property, plant and equipment
+(15)
+36,923
+35,750
+Companies accounted for under the equity method
+(16)
+4,383
+5,232
+Other financial assets
+(16)
+3,770
+4,084
+Equity investments
+34
+4,138
+Non-current assets
+75,786
+1,111
+1,197
+Restricted cash and cash equivalents
+1,016
+511
+Cash and cash equivalents
+Assets held for sale
+3,602
+Current assets
+1,894
+(5)
+1,002
+1,366
+19,901
+22,294
+Total assets
+2,668
+4,795
+(19)
+1,377
+Inventories
+Financial receivables and other financial assets
+Trade receivables and other operating assets
+Income tax assets
+Liquid funds
+Securities and fixed-term deposits
+(17)
+1,131
+1,252
+(18)
+445
+490
+(18)
+11,525
+14,207
+(11)
+1,003
+75,484
+3,855
+(15)
+17,481
+Total recognized income and expenses (total comprehensive income)
+Attributable to shareholders of E.ON SE
+Continuing operations
+Discontinued operations
+-464
+-438
+-42
+Total income and expenses recognized directly in equity
+-3
+-12
+50
+-1
+52
+29
+-2
+-30
+148
+Items that might be reclassified subsequently to the income statement
+Income taxes
+Reclassification adjustments recognized in income
+-1,093
+-146
+-19
+11
+217
+-36
+-895
+-171
+-358
+-453
+Unrealized changes-hedging reserve
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Fair value measurement of financial instruments
+Unrealized changes
+Reclassification adjustments recognized in income
+Currency-translation adjustments
+Unrealized changes-hedging reserve/other
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Companies accounted for under the equity method
+Unrealized changes
+-214
+-569
+-300
+-180
+-82
+544
+Attributable to non-controlling interests
+109
+272
+¹Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+E.ON SE and Subsidiaries Balance Sheets-Assets
+120
+December 31,
+€ in millions
+Goodwill²
+Intangible assets
+Note
+2020
+20191
+(15)
+17,827
+-333
+Cash provided by (used for) operating activities of discontinued operations
+-497
+-579
+-1
+1
+87
+-390
+-342
+-123
+-342
+-116
+-7
+19
+8
+-845
+-1,138
+-1,740
+-1,309
+-470
+483
+211
+-1,126
+240
+423
+Net income/loss
+Total comprehensive income
+reclassification related to put
+options
+Net additions/disposals from
+Share additions/reductions
+Dividends
+Capital increase
+Other comprehensive income
+1
+7
+Change in scope of consolidation
+-18
+-1,418
+33
+11
+-2,465
+1
+Remeasurements of defined
+benefit plans
+Changes in accumulated
+other comprehensive
+income
+-750
+-42
+-332
+34
+-1
+-505
+-750
+1,017
+-42
+-332
+34
+-1
+-505
+267
+-2,405
+-1,199
+-1,927
+-505
+13,368
+Balance as of January 1, 2020
+-689
+-202
+1,550
+-3
+-440
+-6
+1
+1
+-689
+Changes in accumulated
+Remeasurements of defined
+benefit plans
+Other comprehensive income
+Net income/loss
+Total comprehensive income
+options
+reclassification related to put
+1,348
+-6
+-440
+-3
+-18
+-1,418
+33
+11
+-2,465
+-1,927
+13,368
+2,641
+Balance as of December 31, 2019
+-3
+-440
+-6
+1
+-689
+income
+other comprehensive
+-202
+2,641
+Net additions/disposals from
+-1
+-332
+-1,053
+-231
+-364
+-364
+133
+-1,172
+-240
+-1,053
+-240
+3,962
+16
+16
+3,946
+2,739
+2,756
+2,756
+-932
+-1,053
+211
+272
+-1
+-1
+-1,137
+-171
+31
+31
+-202
+-1,309
+30
+30
+-1,339
+1,792
+242
+242
+1,550
+483
+272
+-17
+34
+8,520
+-430
+Equity attributable
+125
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+¹Adjusted prior-year figures.
+-60
+Treasury shares
+-1,749
+10
+-2,969
+-5,257
+13,368
+2,641
+Balance as of December 31, 2020
+-42
+67
+to shareholders of
+E.ON SE
+Non-controlling
+interests
+(before reclassification)
+3,192
+5,758
+-1,126
+2
+1
+1
+1
+8,518
+Total
+2,761
+-430
+3,191
+5,757
+-1,126
+Non-controlling
+interests
+to put options
+Reclassification related
+2,762
+133
+Share additions/reductions
+-932
+-2,393
+-5,820
+-1,864
+-716
+13
+-5,104
+-1,877
+-342
+Cash provided by (used for) financing activities
+Cash provided by (used for) financing activities of continuing operations
+Repayments of financial liabilities
+Proceeds from financial liabilities
+Cash dividends paid to non-controlling interests
+Cash dividends paid to shareholders of E.ON SE
+Payments received/made from changes in capital²
+Cash provided by (used for) investing activities
+Cash provided by (used for) financing activities of discontinued operations
+-1,199
+-932
+-364
+Effect of foreign exchange rates on cash and cash equivalents
+Net increase/decrease in cash and cash equivalents
+€ in millions
+E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
+123
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+¹Including the settlement payment received from the transfer of business activities with RWE. These payments reduce the investments.
+2The decrease is primarily due to the merger-related squeeze-out of the remaining minority shareholders of innogy. No material netting has taken place in either of the years presented here.
+5Adjusted prior-year figures.
+792
+-2,624
+-193
+985
+-2,624
+-3,377
+-5,308
+5,824
+6,640
+-188
+Cash provided by (used for) investing activities of discontinued operations
+Cash and cash equivalents at the beginning of the year³
+Cash provided by (used for) investing activities of continuing operations
+-515
+Purchases of investments in
+Equity investments
+Intangible assets and property, plant and equipment
+Proceeds from disposal of
+2,965
+5,313
+Cash provided by (used for) operating activities (operating cash flow)
+2,820
+152
+2,813
+5,287
+-323
+-555
+431
+-508
+686
+26
+256
+234
+192
+Changes in restricted cash and cash equivalents
+-2,576
+-2,047
+Purchases of securities (>3 months) and of financial receivables and fixed-term deposits
+1,803
+2,036
+Proceeds from disposal of securities (>3 months) and of financial receivables and fixed-term deposits
+-1,543
+191
+Equity investments¹
+-3,241
+-4,362
+Intangible assets and property, plant and equipment
+-4,784
+-4,171
+64
+2,586
+197
+2020
+20195
+825
+-1,775
+-2,461
+9,862
+2,201
+Balance as of December 31, 2018
+costs
+reserve
+10
+hedging
+Reserve for
+ment of
+financial
+instruments
+hedging
+costs
+other
+earnings
+capital
+stock
+Hedging
+39
+-978
+-15
+Dividends
+3,506
+440
+Capital increase
+-1
+-16
+Change in scope of consolidation
+-15
+-978
+39
+10
+-2,460
+9,862
+2,201
+Balance as of January 1, 2019
+1
+IFRS 16 adjustment
+€ in millions
+reserve/
+Retained
+paid-in
+Interest received
+Interest paid
+1,902
+2,667
+-14
+0
+Less: Cash and cash equivalents of discontinued operations at the end of the period
+Cash and cash equivalents of continuing operations at the end of the period4
+Supplementary information on cash flows from operating activities
+Income taxes paid (less refunds)
+1,916
+2,667
+66
+14
+Cash and cash equivalents of discontinued operations at the beginning of the period
+Cash and cash equivalents at the end of the period
+3,924
+1,902
+-11
+-74
+-2,063
+Dividends received
+-867
+3Cash and cash equivalents of continuing operations at the beginning of the period also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal group in
+the third quarter of 2019 and €4 million attributable to the sales operations of the heating electricity business in Germany, also reclassified as a disposal group, that were sold in the second quarter
+of 2020.
+46
+Capital
+Reserve for
+Hedging
+Additional
+measure-
+Cash flow hedges
+adjustments
+Fair value
+Currency translation
+Changes in accumulated other comprehensive income
+124
+Statement of Changes in Equity¹
+-1,219
+-754
+། ། ༔ ཟ།
+488
+-1,168
+463
+4Cash and cash equivalents of continuing operations at the end of the period of the prior year also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal
+group in the third quarter of 2019 and €4 million attributable to the sales operations of the heating electricity business in Germany, also reclassified as a disposal group.
+5Adjusted prior-year figures.
+-1,775
+4.44
+1.23
+Hungarian forint
+HUF
+U.S. dollar
+USD
+Czech crown
+10.48
+CZK 26.24 25.41 26.46
+9.11
+6.68 8.05
+363.89 330.53 351.25
+1.12
+1.14
+4.75
+10.59
+25.67
+6.36
+325.3
+1.12
+Recognition of Income
+a) Revenues
+Revenues are generated primarily from the sale of electricity
+and gas to retail customers, industrial and commercial cus-
+tomers and wholesale markets. Revenues earned from the dis-
+tribution of electricity and gas and from deliveries of steam and
+heat are also primarily recognized under revenues.
+Since the introduction of IFRS 15 with effect from January 1,
+2018, revenues no longer include the fees for the promotion of
+Renewables because these revenues are netted with the corre-
+sponding cost of materials (net disclosure).
+Revenues are generally recognized when E.ON fulfills its perfor-
+mance obligation by transferring a promised good or service to
+a customer. An asset is deemed to be transferred when the cus-
+tomer obtains control of the asset. The majority of the E.ON
+Group's performance obligations are fulfilled over time. The rel-
+atively subordinate point-in-time revenue recognition occurs
+primarily in the "Build & Sell" segment and for so-called linear
+products, where a fixed amount of energy is provided to com-
+mercial customers at a specific point in time. Revenue is recog-
+nized when control is transferred to the customer, which means
+that no significant discretionary decisions are required. For all
+such revenues, progress is measured using output-based meth-
+ods. The methods used appropriately reflect the pattern of trans-
+fer of goods to customers or provision of services for customers.
+Revenues from the sale of goods and services are measured
+using the transaction prices allocated to these goods and services.
+They reflect the value of the volume supplied, including an esti-
+mated value of the volume supplied to customers between
+the date of the last invoice and the end of the period. Monthly
+advance payments for B2C customers are generally determined
+on the basis of historical consumption data and peak payments
+are settled at the end of the year. In B2B, a bottom-up approach
+is used to calculate individual rates. E.ON's sales transactions
+generally are not based on any material finance components.
+The average target payment period is between 14 and 45 days.
+In individual cases, the payment period can also be below the
+10.03 10.45
+SEK
+Swedish krona
+4.84
+4.78
+4.87
+RON
+Romanian leu
+4.3
+4.26
+TRY
+Turkish lira
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+135
+Receivables, Contract Assets or Liabilities and Other Assets
+A receivable is recognized under IFRS 15 when the goods or
+services are delivered, provided that the right to consideration is
+unconditional, i.e., is only related to the passage of time. How-
+ever, if the right to receive the consideration is contingent upon
+conditions other than the passage of time, a contract asset is
+recognized. A contract liability under IFRS 15 is recognized when
+consideration has been received for an existing IFRS 15 contract
+and the right to receive the goods or services still exists in full
+or in part. The contractual liability is only reversed with an effect
+on revenue when E.ON has performed the corresponding service.
+An asset is recognized under other assets under IFRS 15 if the
+cost of obtaining the contract is expected to be recovered and
+the amortization period is longer than one year. Other assets are
+amortized over the estimated term of the contract depending
+on how the goods or services to which the costs relate are trans-
+ferred to the customer. If the estimated term of the contract is
+less than one year, the costs are immediately recognized as an
+expense on the income statement. Receivables and other assets
+are initially measured at fair value, which generally approximates
+nominal value. They are subsequently measured at amortized
+cost, using the effective interest method. Trade receivables with-
+out a significant financial component are measured upon initial
+recognition at their transaction price. Valuation allowances,
+included in the reported net carrying amount, are provided for
+identifiable individual risks. If the loss of a certain part of the
+receivables is probable, valuation allowances are provided to
+cover the expected loss. Impairments must also be recognized
+for expected future credit losses.
+Liquid funds include current securities, checks, cash on hand and
+bank balances. Bank balances and securities with an original
+maturity of more than three months are recognized under secu-
+rities and fixed-term deposits. Liquid funds with an original
+maturity of less than three months are considered to be cash
+and cash equivalents, unless they are restricted.
+Contingent liabilities are possible obligations toward third
+parties arising from past events that are not wholly within the
+control of the entity, or else present obligations toward third
+parties arising from past events in which an outflow of resources
+embodying economic benefits is not probable or where the
+amount of the obligation cannot be measured with sufficient
+reliability. Contingent liabilities were not recognized on the
+balance sheet.
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+A provision is recognized to cover the obligation to submit CO2
+emission allowances and ROCs to the respective authorities.
+The provision is measured at the carrying amount of the ROCs or
+emission rights held or, in the case of a shortfall, at the current
+fair value of the ROCs or emission rights needed.
+Renewable Obligation Certificates (ROCs) and Emission Rights
+Renewable Obligation Certificates (ROCs) as well as Emission
+rights held under national and international emission-rights
+systems for the settlement of obligations are reported as other
+operating assets. ROCs and emission rights are capitalized at
+cost at the time of acquisition.
+Inventories are measured at the lower of acquisition or production
+cost and net realizable value. The cost of raw materials, finished
+products and goods purchased for resale is determined based on
+the average cost method. In addition to production materials and
+wages, production costs include material and production over-
+heads based on normal capacity. The costs of general adminis-
+tration are not capitalized. Inventory risks resulting from excess
+and obsolescence are provided for using appropriate valuation
+allowances, whereby inventories are written down to net real-
+izable value.
+Inventories
+Non-derivative and derivative financial instruments are netted on
+the balance sheet if under IAS 32 E.ON has both an unconditional
+right-even in the event of the counterparty's insolvency-and
+the intention to settle offsetting positions simultaneously and/or
+on a net basis.
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and
+IFRS 13 both require comprehensive quantitative and qualitative
+disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments is
+provided in Notes 31 and 32.
+Agreements to buy or sell non-financial items that are classified
+as own-use contracts under IFRS 9 and that are required to be
+accounted for as derivatives (so-called "failed-own-use" contracts)
+must be realized or recognized in the balance sheet at the mar-
+ket price applicable at the time of physical settlement. In addi-
+tion, any income from commodity derivatives arising from the
+difference between the contract price and the market price is
+recognized in other operating income.
+Embedded derivatives in own-use contracts must be separated
+from the host contract and accounted for as derivatives in accor-
+dance with IFRS 9 if the economic characteristics and risks of
+these derivatives are not closely related to those of the host
+contract. The contract is assessed upon conclusion to determine
+whether a derivative is required to be separated. A reassessment
+must be carried out if there is a significant change in the terms
+of the contract or in the context of business combinations.
+Contracts (in particular sales and procurement contracts for
+electricity and gas) that are entered into for purposes of receiving
+or delivering non-financial items in accordance with E.ON's
+anticipated procurement, sale or use requirements, and held as
+such, are classified as own-use contracts. They are not accounted
+for as derivative financial instruments at fair value through profit
+and loss (FVPL) in accordance with IFRS 9, but as open trans-
+actions subject to the rules of IAS 37. Contracts that provide for
+net settlement and resales of the quantities to be delivered at
+a future date generally cannot, as a rule, be classified as own-
+use contracts. Based on forward-looking forecasts of delivery
+quantities specified by customer structure and portfolio man-
+agement, contracts with physical settlement upon conclusion
+are recognized as derivatives for which settlement cannot be
+ensured within the scope of ordinary delivery. This "safety buffer"
+is reviewed on a regular basis and adjusted if necessary.
+Unrealized gains and losses resulting from the initial measure-
+ment of derivative financial instruments at the inception of the
+contract are not recognized in income. They are instead deferred
+and recognized in income systematically over the term of the
+derivative. An exception to the accrual principle applies if unre-
+alized gains and losses from the initial measurement are verified
+by quoted market prices, observable prices of other current
+market transactions or other observable data supporting the val-
+uation technique. In this case the gains and losses are recognized
+in income.
+Changes in fair value of derivative instruments that are recognized
+in income are presented as other operating income or expenses.
+Gains and losses from interest-rate derivatives are included in
+interest income.
+E.ON currently uses hedges in the framework of cash flow hedges
+and hedges of a net investment.
+Restricted cash with a remaining maturity in excess of twelve
+months is classified as financial receivables and other financial
+assets.
+Assets Held for Sale and Liabilities Associated with Assets
+Held for Sale and Discontinued Operations
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually
+taking place. The reclassification to the separate balance sheet
+items is shown under Changes in scope of consolidation.
+Discontinued operations are components of an entity that are
+either held for sale or have already been sold and can be clearly
+distinguished from other corporate operations, both operationally
+and for financial reporting purposes. Additionally, the component
+classified as a discontinued operation must represent a major
+business line or a specific geographic business segment of the
+Group.
+In accordance with IAS 37, "Provisions, Contingent Liabilities
+and Contingent Assets," ("IAS 37") provisions are recognized
+when E.ON has a legal or constructive present obligation towards
+third parties as a result of a past event, it is probable that E.ON
+will be required to settle the obligation, and a reliable estimate
+can be made of the amount of the obligation. The provision is
+recognized at the expected settlement amount. Long-term obli-
+gations are reported as liabilities at the present value of their
+expected settlement amounts if the interest rate effect (the differ-
+ence between present value and repayment amount) resulting
+from discounting is material; future cost increases that are fore-
+seeable and likely to occur on the balance sheet date at year-end
+must also be included in the measurement. Long-term obligations
+are generally discounted at the market interest rate applicable
+as of the respective balance sheet date, provided that it is not
+negative. The accretion amounts and the effects of changes in
+interest rates are generally presented as part of financial results.
+A reimbursement related to the provision that is virtually certain
+to be collected is capitalized as a separate asset. No offsetting
+within provisions is permitted. Advance payments remitted are
+deducted from the provisions.
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period
+of their occurrence at their discounted settlement amounts, pro-
+vided that the obligation can be reliably estimated. The carrying
+amounts of the respective property, plant and equipment are
+increased by the same amounts. In subsequent periods, capital-
+ized asset retirement costs are amortized over the expected
+remaining useful lives of the assets, and the provision is accreted
+to its present value on an annual basis.
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or the
+scope of the relevant obligation, and also as a result of the reg-
+ular adjustment of the discount rate to current market interest
+rates. The adjustment of provisions for the decommissioning
+and restoration of property, plant and equipment for changes
+to estimates is generally recognized by way of a corresponding
+adjustment to these assets, with no effect on income. If the
+property, plant and equipment concerned have already been
+fully depreciated, changes to estimates are recognized within
+the income statement.
+The estimates for nuclear decommissioning provisions are
+derived from studies, cost estimates, legally binding civil agree-
+ments and legal information. A material element in the estimates
+are the real interest rates applied (the applied discount rate, less
+the cost increase rate). The impact on consolidated net income
+depends on the level of the corresponding adjustment posted to
+property, plant and equipment.
+No provisions are established for contingent asset retirement
+obligations where the type, scope, timing and associated proba-
+bilities cannot be determined reliably.
+Notes
+138
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from open transactions. Such provisions
+are recognized at the lower of the excess obligation upon per-
+formance under the contract and any potential penalties or
+compensation arising in the event of non-performance. Obliga-
+tions under an open contractual relationship are determined
+from a customer perspective.
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+A more detailed description is not provided for certain contingent
+liabilities and contingent receivables, particularly in connection
+with pending litigation, as this information could influence
+further proceedings.
+Income Taxes
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are rec-
+ognized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their
+tax bases (balance sheet liability method). Deferred tax assets
+and liabilities are recognized for temporary differences that will
+result in taxable or deductible amounts when taxable income is
+calculated for future periods, unless those differences are the
+result of the initial recognition of an asset or liability in a trans-
+action other than a business combination that, at the time of
+the transaction, affects neither accounting nor taxable profit/
+loss (initial differences). Uncertain tax positions are recognized
+at their most likely value. IAS 12 further requires that deferred
+tax assets be recognized for unused tax loss carryforwards and
+unused tax credits. Deferred tax assets are recognized to the
+extent that it is probable that taxable profit will be available
+against which the deductible temporary differences and unused
+tax losses can be utilized. Each of the corporate entities is
+assessed individually with regard to the probability of a positive
+tax result in future years. The planning horizon is basically three
+to five years in this context. Any existing history of losses is
+incorporated in this assessment. For those tax assets to which
+these assumptions do not apply, the value of the deferred tax
+assets is reduced.
+Deferred tax liabilities caused by temporary differences associ-
+ated with investments in affiliated and associated companies are
+recognized unless the timing of the reversal of such temporary
+differences can be controlled within the Group and it is probable
+that, owing to this control, the differences will in fact not be
+reversed in the foreseeable future.
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable for
+taxable income in the years in which temporary differences are
+expected to be recovered or settled. The effect on deferred tax
+assets and liabilities of changes in tax rates and tax law is gener-
+ally recognized in net income. Equity is adjusted for deferred
+taxes that had previously been recognized directly in equity. The
+change is generally recognized in the period in which the material
+legislative process is completed.
+Deferred taxes for the E.ON Group's major German companies
+are calculated using an aggregate tax rate of 31 percent (2019:
+30 percent). This tax rate includes, in addition to the 15 percent
+corporate income tax, the solidarity surcharge of 5.5 percent on
+the corporate tax and the average trade tax rate of 15 percent
+(2019: 14 percent). Foreign subsidiaries use applicable national
+tax rates.
+To the extent that they are material, income taxes for transaction
+costs of an equity transaction are recognized directly in equity
+under IAS 12.
+Note 11 shows the major temporary differences so recorded.
+Where necessary, provisions for restructuring costs are recog-
+nized at the present value of the future outflows of resources.
+Provisions are recognized once a detailed restructuring plan has
+been decided on by management and publicly announced or
+communicated to the employees or their representatives. Only
+those expenses that are directly attributable to the restructuring
+measures are used in measuring the amount of the provision.
+Expenses associated with the future operation are not taken
+into consideration.
+Payments for defined contribution pension plans are expensed
+as incurred and reported under personnel costs. Contributions
+to state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations
+under these pension plans generally correspond to those under
+defined contribution pension plans.
+The amount reported on the balance sheet represents the pres-
+ent value of the defined benefit obligations reduced by the fair
+value of plan assets. If a net asset position arises from this cal-
+culation, the amount is limited to the present value of available
+refunds and the reduction in future contributions and to the
+benefit from prepayments of minimum funding requirements.
+Such an asset position is recognized as an operating receivable.
+Past service cost, as well as gains and losses from settlements,
+are fully recognized in the income statement in the period in
+which the underlying plan amendment, curtailment or settle-
+ment takes place. They are reported under personnel costs.
+Non-current assets that are held for sale either individually or
+collectively as part of a disposal group, or that belong to a dis-
+continued operation, are no longer depreciated. They are instead
+accounted for at the lower of the carrying amount and the fair
+value less any remaining costs to sell. If this value is less than
+the carrying amount, an impairment loss is recognized.
+The income and losses resulting from the measurement of
+components held for sale as well as the gains and losses arising
+from the disposal of discontinued operations, are reported sep-
+arately on the face of the income statement under income/loss
+from discontinued operations, net, as is the income from the
+ordinary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance sheet.
+The cash flows of discontinued operations are reported sepa-
+rately in the cash flow statement, with prior-year figures adjusted
+accordingly. However, there is no reclassification of prior-year
+balance sheet line items attributable to discontinued operations.
+Notes
+136
+Equity Instruments
+IFRS defines equity as the residual interest in the Group's assets
+after deducting all liabilities. Therefore, equity is the net amount
+of all recognized assets and liabilities.
+E.ON has entered into purchase commitments to holders of
+non-controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right to
+require E.ON to purchase their shares on specified conditions.
+None of the contractual obligations has led to the transfer of
+substantially all of the risk and rewards to E.ON at the time of
+entering into the contract. In such a case, IAS 32, "Financial
+Instruments: Presentation," ("IAS 32") requires that a liability be
+recognized at the present value of the probable future exercise
+price. This amount is reclassified from a separate component
+within non-controlling interests and reported separately as a
+liability. The reclassification occurs irrespective of the probability
+of exercise. The accretion of the liability is recognized as interest
+expense. If a purchase commitment expires unexercised, the
+liability reverts to non-controlling interests. Any remaining
+difference between liabilities and non-controlling interests is
+recognized directly in retained earnings.
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships, for
+example), such termination rights require the reclassification of
+non-controlling interests from equity into liabilities under IAS 32.
+The liability is recognized at the present value of the expected
+settlement amount irrespective of the probability of termination.
+Changes in the value of the liability are reported within other
+operating income. Accretion of the share of the results of the
+non-controlling shareholders' share in net income is recognized
+in Net interest income/expense.
+If E.ON SE or a Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attributable
+additional costs (net after income taxes), is deducted from
+E.ON SE's equity until the shares are retired, distributed or resold.
+If such treasury shares are subsequently distributed or sold, the
+consideration received, net of any directly attributable additional
+transaction costs and associated income taxes, is recognized in
+equity.
+Share-Based Payment
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment"
+("IFRS 2").
+The members of the Management Board of E.ON SE were
+granted virtual shares under the E.ON Share Matching Plan for
+the last time in 2017.
+In fiscal years 2017, 2018, 2019 and 2020, virtual shares were
+granted to members of the Management Board of E.ON SE and
+certain E.ON Group executives under the E.ON Performance
+Plan. The E.ON Performance Plan uses a fair value determined
+by an external service provider using a Monte Carlo simulation.
+In all cases, these are commitments of the Company which pro-
+vide for cash compensation based on the share price performance
+at the end of the term. The compensation expense is recognized
+in the income statement pro rata over the vesting period.
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits," ("IAS 19") is based on actuarial com-
+putations using the projected unit credit method, with actuarial
+valuations performed at year-end. The valuation encompasses
+both pension obligations and pension entitlements that are
+known on the reporting date and economic trend assumptions
+such as assumptions on wage and salary growth rates and
+pension increase rates, among others, that are made in order
+to reflect realistic expectations, as well as variables specific
+to reporting dates such as discount rates, for example.
+Included in gains and losses from the remeasurements of the
+net defined benefit liability or asset are actuarial gains and
+losses that may arise especially from differences between esti-
+mated and actual variations in underlying assumptions about
+demographic and financial variables. Additionally included is the
+difference between the actual return on plan assets and the
+expected interest income on plan assets included in the net
+interest result. Remeasurements effects are recognized in full in
+the period in which they occur and are not reported within the
+Consolidated Statements of Income, but are instead recognized
+within the Statements of Recognized Income and Expenses as
+part of equity.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+137
+The employer service cost representing the additional benefits
+that employees earned under the benefit plan during the fiscal
+year is reported under personnel costs; the net interest on the
+net liability or asset from defined benefit pension plans deter-
+mined based on the discount rate applicable at the start of the
+fiscal year is reported under financial results.
+To hedge the foreign currency risk arising from the Company's
+net investment in foreign operations, derivative as well as non-
+derivative financial instruments are used. Gains or losses due
+to changes in fair value and from foreign currency translation
+are recognized within equity, as a component of other compre-
+hensive income, under currency translation adjustments.
+134
+Liquid Funds
+The hedging result is reclassified into income during the period
+in which the cash flows of the hedged asset are recognized in
+income. The result is recognized immediately in income if it
+becomes probable that the hedged underlying transaction will
+no longer occur. For hedging instruments used to establish
+cash flow hedges, the change in fair value of the ineffective
+portion is recognized immediately in the income statement to
+the extent required.
+• Value in use, or
+• Zero.
+Any additional impairment loss that would otherwise have been
+allocated to the asset concerned must instead be allocated pro
+rata to the remaining assets of the unit.
+E.ON performs the annual testing of goodwill for impairment at
+the cash-generating unit level in the fourth quarter of each fiscal
+year.
+Impairment charges on the goodwill of a cash-generating unit
+and reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed in
+subsequent reporting periods.
+Intangible Assets
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible
+assets be amortized over their expected useful lives unless their
+lives are considered to be indefinite. Factors such as typical
+product life cycles and legal or similar limits on use are taken
+into account in the classification.
+Acquired intangible assets subject to amortization are classified
+as customer relationships and similar assets as well as conces-
+sions, industrial property rights, licenses and similar rights (this
+category also includes contractual claims). Internally generated
+intangible assets subject to amortization are related to software
+and are recognized as development costs. Intangible assets
+subject to amortization are measured at cost and are generally
+amortized using the straight-line method over their expected
+useful lives. The useful lives of customer relationships and simi-
+lar assets range between 2 and 50 years, and between 3 and
+50 years for concessions, industrial property rights, licenses
+and similar rights, unless depreciation based on use reflects an
+appropriate level of depletion. This latter category includes soft-
+ware in particular. Useful lives and amortization methods are
+subject to annual verification. Intangible assets subject to amor-
+tization are tested for impairment whenever events or changes
+in circumstances indicate that such assets may be impaired.
+Intangible assets not subject to amortization or intangible assets
+whose use has not yet started are measured at cost and tested
+for impairment annually or more frequently if events or changes in
+circumstances indicate that such assets may be impaired. More-
+over, such assets are reviewed annually to determine whether
+an assessment of indefinite useful life remains applicable.
+Fair value less costs to sell
+In accordance with IAS 36, the carrying amount of an intangible
+asset, whether subject to amortization or not, is tested for
+impairment by comparing the carrying value with the asset's
+recoverable amount, which is the higher of its value in use
+and its fair value less costs to sell. Should the carrying amount
+exceed the corresponding recoverable amount, an impairment
+charge equal to the difference between the carrying amount and
+the recoverable amount is recognized and reported in income
+under "Depreciation, amortization and impairment charges."
+If a recoverable amount cannot be determined for an individual
+intangible asset, the recoverable amount for the smallest iden-
+tifiable group of assets (cash-generating unit) that the intangible
+asset may be assigned to is determined. See Note 15 for addi-
+tional information about goodwill and intangible assets.
+Research and Development Costs
+Under IFRS, expenditure on research is expensed as incurred,
+while costs incurred during the development phase of new prod-
+ucts, services and technologies are to be recognized as assets
+when the general criteria for recognition specified in IAS 38 are
+present. In the 2019 and 2020 fiscal years, E.ON capitalized
+costs for internally generated software and other technologies
+in this context.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+131
+Property, Plant and Equipment
+Property, plant and equipment are initially measured at acquisi-
+tion or production cost, including decommissioning or resto-
+ration cost that must be capitalized, and are depreciated over the
+expected useful lives of the components, generally using the
+straight-line method, unless a different method of depreciation
+is deemed more suitable in certain exceptional cases. The useful
+lives of the most significant asset classes of material property,
+plant and equipment are presented below:
+If the reasons for previously recognized impairment losses no
+longer exist, such impairment losses are reversed. A reversal
+shall not cause the carrying amount of an intangible asset subject
+to amortization to exceed the amount that would have been
+determined, net of amortization, had no impairment loss been
+recognized during the period.
+•
+amounts. Individual assets may be written down only if their
+respective carrying amounts do not fall below the highest of the
+following values as a result:
+130
+Report of the Supervisory Board
+Strategy and Objectives
+Notes
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+129
+specified range. This may be the case, for example, if an agree-
+ment provides for payment on the fifth calendar day of the fol-
+lowing month. Refunds to customers are an exception and are
+granted if the customer is disconnected from the power supply
+for an extended period of time. Cash bonuses or bonus payments
+to customers are recognized as refund liabilities and presented
+as a decrease in revenues uniformly over the term of the contract.
+As a rule, no warranties are granted in the Core Business. Warran-
+ties are only granted in the "Build & Sell" activities.
+b) Interest Income
+Interest income is recognized pro rata using the effective interest
+method.
+c) Dividend Income
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+Electricity and Energy Taxes
+Electricity and energy taxes are levied on electricity and natural
+gas delivered to retail customers and are calculated on the basis
+of a fixed tax rate per kilowatt-hour ("kWh"). This rate varies
+between different classes of customers. Electricity and energy
+taxes payable are deducted from sales revenues on the face
+of the income statement if those taxes are levied upon delivery
+of energy to the retail customer.
+Earnings per Share
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary
+shares outstanding during the relevant period. At E.ON, the com-
+putation of diluted earnings per share is identical to that of basic
+earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares.
+Goodwill and Intangible Assets
+Goodwill
+Goodwill is not amortized, but rather tested for impairment
+at the cash-generating unit level on at least an annual basis.
+The term cash-generating unit also always includes groups
+of cash-generating units and is referred to in simplified form
+as a cash-generating unit. Impairment tests must also be per-
+formed between these annual tests if events or changes in
+circumstances indicate that the carrying amount of the respec-
+tive cash-generating unit might not be recoverable.
+Newly created goodwill is allocated to those cash-generating
+units expected to benefit from the respective business combi-
+nation. The cash-generating units to which goodwill is allocated
+are generally equivalent to the operating segments, since good-
+will is reported, and considered in performance metrics for
+controlling, only at that level. If goodwill cannot be allocated
+arbitrarily to individual cash-generating units but instead can
+only be allocated to groups of cash-generating units, the lowest
+level within the unit at which the goodwill is monitored for
+internal management purposes then includes several cash-
+generating units to which the goodwill relates but to which it
+cannot be allocated individually. Goodwill impairment testing
+is performed in euro, while the underlying goodwill is always
+carried in the functional currency.
+In a goodwill impairment test, the recoverable amount of a
+cash-generating unit is compared with its carrying amount,
+including goodwill. The recoverable amount is the higher of the
+cash-generating unit's fair value less costs to sell and its value in
+use. In a first step, E.ON determines the recoverable amount of
+a cash-generating unit on the basis of the fair value (less costs
+to sell) using generally accepted valuation procedures. Valuation
+is performed using the discounted cash flow method unless
+market transactions or valuations prepared by third parties for
+comparable assets which are higher-level in the fair value hier-
+archy according to IFRS 13 are available. If needed, a calculation
+of value in use is also performed. Unlike fair value, the value in
+use is calculated from the viewpoint of management. In accor-
+dance with IAS 36, "Impairment of Assets," ("IAS 36″) it is
+further ensured that restructuring expenses, as well as initial
+and subsequent capital investments (where those have not
+yet commenced), in particular, are not included in the valuation.
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in
+the amount of this difference.
+If the impairment thus identified exceeds the goodwill allocated
+to the affected cash-generating unit, the remaining assets of
+the unit must be written down in proportion to their carrying
+Notes
+Useful Lives of Property, Plant and Equipment
+Buildings
+Combined Group Management Report
+For qualifying fair value hedges, the change in the fair value of
+the derivative and the change in the fair value of the hedged
+item that is due to the hedged risk(s) are recognized in income.
+Non-derivative financial instruments are measured in accordance
+with IFRS 9, "Financial Instruments" ("IFRS 9"). They are recog-
+nized at fair value, including transaction costs, on the settlement
+date when acquired, provided they are not recognized at fair
+value through profit and loss.
+Financial assets are classified as financial assets measured at
+amortized cost (AmC), financial assets measured at fair value
+through other comprehensive income (FVOCI) and financial
+assets measured at fair value through profit and loss (FVPL) based
+on the business model and the characteristics of the cash flows.
+If a financial asset is held for the purpose of collecting contractual
+cash flows and the cash flows of the financial asset represent
+exclusively interest and principal payments, then the financial
+asset is measured at amortized cost (AmC).
+A financial asset is measured at fair value through other com-
+prehensive income (FVOCI) if it is used both to collect contractual
+cash flows and for sales purposes and the cash flows of the
+financial asset consist exclusively of interest and principal pay-
+ments.
+Unrealized gains and losses from financial assets measured at
+fair value through other comprehensive income (FVOCI), net of
+related deferred taxes, are reported as a component of equity
+(other comprehensive income) until realized. Realized gains and
+losses are determined by analyzing each transaction individually.
+Report of the Supervisory Board
+Strategy and Objectives
+Technical equipment, plant and machinery
+Other equipment, fixtures, furniture and
+office equipment
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Non-derivative Financial Instruments
+133
+Impairments of financial assets are both recognized for losses
+already incurred and for expected future credit defaults. The
+amount of the impairment loss calculated in the determination
+of expected credit losses is recognized on the income statement.
+The expected future credit loss is calculated by multiplying the
+probability of default by the carrying amount of the financial
+asset (exposure at default) and the expected loss ratio (loss given
+default). For information on the treatment of impairments under
+IFRS 9, please see Note 32.
+Non-derivative financial liabilities (including trade payables)
+within the scope of IFRS 9 are measured at amortized cost, using
+the effective interest method. Initial measurement takes place
+at fair value, with transaction costs included in the measurement.
+In the subsequent measurement, the residual carrying amount
+is adjusted by the amortization and accretion of any premium
+or discount remaining until maturity. The premium or discount
+is recognized in financial results over its term.
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded deriv-
+atives are measured at fair value as of the trading date at initial
+recognition. Under IFRS 9, they are classified as at fair value
+through profit and loss (FVPL) as long as they are not a compo-
+nent of a hedge accounting relationship. Gains and losses from
+changes in fair value are immediately recognized in net income.
+The instruments primarily used are foreign currency forwards
+and cross-currency interest rate swaps, as well as interest rate
+swaps. In commodities, the instruments used primarily include
+physically and financially settled forwards and options related
+to electricity and gas.
+As part of fair value measurement in accordance with IFRS 13,
+the counterparty risk is also taken into account for derivative
+financial instruments. E.ON determines this risk based on a
+portfolio valuation in a bilateral approach for both own credit risk
+(debt value adjustment) and the credit risk of the corresponding
+counterparty (credit value adjustment). The counterparty risks
+thus determined are allocated to the individual financial instru-
+ments by applying the relative fair value method on a net basis.
+E.ON has designated some of these derivatives as part of a
+hedging relationship. IFRS 9 sets requirements for the admissi-
+bility of hedging instruments and the underlyings, the formal
+designation and documentation of hedging relationships, the
+hedging strategy, as well as fulfilling requirements of effective-
+ness in order to qualify for hedge accounting. The designated
+hedged items and hedging instruments are subject to the same
+risk. This economic relationship ensures that the amounts of the
+hedged items and hedging instruments are offset against each
+other and that the hedging relationships are therefore effective.
+The hedge ratio of the hedges is 1:1. Ineffectiveness arises only
+if the measurement parameters of the hedged item and the
+hedging instrument differ from one another or in the case of sub-
+sequent designation of the hedging instrument. All components
+of derivative gains and losses from the measurement of hedge
+ineffectiveness are taken into consideration during recognition.
+If a derivative instrument qualifies as a cash flow hedge under
+IFRS 9, the effective portion of the hedging instrument's change
+in fair value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the period
+or periods during which the cash flows of the transaction being
+hedged affect income. In accordance with IFRS 9, the currency
+basis spread (hedging costs) will be separated from the hedging
+instrument and reported separately as an excluded component
+in accumulated other comprehensive income in the reserve for
+hedging costs as a component of equity.
+Debt instruments that do not exclusively serve to collect contrac-
+tual cash flows or to both generate contractual cash flows and
+sales revenue, or whose cash flows do not exclusively consist of
+interest and principal payments are measured at fair value through
+profit and loss (FVPL). For equity instruments that are not held
+for trading purposes, E.ON has uniformly exercised the option
+of recognizing changes in fair value through profit or loss (FVPL).
+Financial Instruments
+Combined Group Management Report
+Lease transactions in which E.ON acts as lessor are classified
+as operating or finance leases depending on the distribution of
+risks and rewards. If a lease is classified as an operating lease,
+E.ON recognizes the identified asset and recognizes the lease
+5 to 60 years
+payments as other operating income on a straight-line basis
+over the lease term. For finance leases, the identified asset is
+derecognized and a receivable is recognized in the amount of
+the net investment value. Payments made by the lessee are
+treated as a reduction of the lease receivable or interest income.
+The income from such arrangements is recognized over the term
+of the lease using the effective interest method. Subleases are
+classified based on the right-of-use asset under the head lease.
+2 to 80 years
+2 to 30 years
+Property, plant and equipment are tested for impairment when-
+ever events or changes in circumstances indicate that an asset
+may be impaired. In such a case, property, plant and equipment
+are tested for impairment according to the principles prescribed
+for intangible assets in IAS 36. If the reasons for previously
+recognized impairment losses no longer exist, such impairment
+losses are reversed and recognized in income. Such reversal
+shall not cause the carrying amount to exceed the amount that
+would have resulted had no impairment taken place during the
+preceding periods.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part of
+the acquisition or production cost of the asset, or else—if rele-
+vant-recognized as a separate asset if it is probable that the
+Group will receive a future economic benefit and the cost can
+be determined reliably.
+Borrowing Costs
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+until its entry into service are capitalized and subsequently
+amortized alongside the related asset. In the case of a specific
+financing arrangement, the respective borrowing costs incurred
+for that particular arrangement during the period are used.
+For non-specific financing arrangements, a financing rate
+uniform within the Group of 3.11 percent was applied for 2020
+(2019: 3.86 percent). Other borrowing costs are expensed.
+Government Grants
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Government grants are recognized at fair value if the Group
+satisfies the necessary conditions for receipt of the grant and
+if it is highly probable that the grant will be issued.
+E.ON protects its operational flexibility when concluding leasing
+agreements through the use of extension and termination options.
+In determining the lease term, E.ON considers all facts and
+circumstances that provide an economic incentive to exercise
+existing options. The assumed term therefore also includes
+periods covered by extension options if it is assumed with reason-
+able certainty that they will be exercised. A modification of the
+term is taken into account if there is a change with regard to
+whether an existing option will be exercised or not with reason-
+able certainty.
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are rec-
+ognized in income on a straight-line basis over the associated
+asset's expected useful life.
+132
+Notes
+A lease liability is recognized in the amount of the present value
+of the existing payment obligation. Where an arrangement
+provides for payments for lease components and non-lease
+components, the payments are not separated using the option
+under IFRS 16.15 (with the exception of real estate leases);
+the lease liability is measured from the total amount of the pay-
+ments. Present value is determined by discounting with an
+incremental borrowing rate that is equivalent in terms of risk
+and term if the implicit interest rate cannot be determined. The
+liability is subsequently measured using the effective interest
+method. The current portion of the lease liability to be recognized
+separately in the balance sheet is measured on the basis of the
+repayment portion of the next twelve months included in the
+lease payments. A right-of-use asset corresponding with the
+lease liability is recognized in the amount of the present value of
+the lease liability. The initial recognition of the right-of-use asset
+is also increased by the amount of the initial direct costs and
+expected costs resulting from asset retirement obligations when
+they do not relate to an item from property, plant and equipment;
+prepayments increase the amount of the initial recognition and
+lease incentives decrease the amount. A right-of-use asset is
+subsequently recognized at amortized cost. Amortization is
+carried out on a straight-line basis over the shorter of the lease
+term or the useful life of the identified asset. An impairment
+test is carried out in accordance with IAS 36 if events or changed
+circumstances indicate an impairment.
+Lease agreements are accounted for in accordance with IFRS 16,
+"Leases" ("IFRS 16"). A lease is an agreement that conveys the
+right to use an identified asset for a specified period in exchange
+for consideration. A right-of-use asset for an identified asset,
+regardless of its formal structure, can arise in many agreements,
+e.g., rental, lease and service agreements as well as in the frame-
+work of outsourcing transactions. The formal designation of an
+agreement is not relevant for the identification of a lease. E.ON is
+party to some agreements in which it is the lessor and to others
+in which it is the lessee.
+Leasing
+Government grants for costs are posted as income over the
+period in which the costs are incurred.
+Transactions in which E.ON acts as a lessee are accounted for on
+the basis of the right-of-use model, irrespective of the economic
+(ownership) relationship to the leased asset at the beginning of
+the lease term. The option to facilitate the application of IFRS 16.5
+is used for low-value leases and for lease agreements with a term
+of less than twelve months (short-term leases). Accordingly, there
+is no recognition of the right-of-use asset and the lease ability.
+Instead, the payments are recognized on a straight-line basis in
+income. In line with internal management practice, intragroup
+leases are recognized as current expenses in the segment report.
+2019
+Notes
+148
+Pursuant to IFRS 5.18, the carrying amounts of all of the dis-
+continued operation's assets and liabilities must be measured
+in accordance with applicable IFRS immediately before their
+reclassification. In the course of this measurement, no material
+impairments or need for reversals were recognized. In addition,
+the carrying amount of the discontinued operation as a whole
+must be tested for impairment by comparing it with the fair value
+less costs to sell. The fair value less costs to sell is determined
+from the transaction price agreed with RWE for the parts of the
+Renewables business to be transferred less the expected trans-
+action costs. The comparison did not result in the recognition of
+any additional impairment as of the disposal date.
+In fiscal year 2019, E.ON generated revenues of €37 million
+(2018: €81 million), interest income of €70 million (2018:
+€83 million), interest expenses of €1 million (2018: €1 million),
+as well as other income of €14 million (2018: €243 million)
+and other expenses of €441 million (2018: €1,050 million),
+with the fully consolidated companies to be transferred in the
+Renewables segment.
+The following table shows the main items of the income state-
+ment of the discontinued operation in the Renewables segment
+(after allocation of elimination entries) until the date of decon-
+solidation:
+Income Statement-Renewables (Summary)¹
+€ in millions
+Sales
+-101
+Other income
+9
+Other expense
+-125
+Income/loss from discontinued operations before
+income taxes
+365
+Income taxes
+Income/Loss from discontinued operations, net
+481
+The key figures presented in the segment reporting also include
+the business activities in the Renewables segment which were
+transferred to RWE. These figures are presented as if the trans-
+ferred operation had not been reclassified in accordance with
+IFRS 5. Note 35 provides additional information and the corre-
+sponding reconciliations.
+IFRS 17, "Insurance Contracts," published in May 2017,
+not yet transposed into European law, expected first-time
+application in fiscal year 2021
+The expenses and income attributable to this were reported
+separately on the face of the Group's income statement under
+income/loss from discontinued operations, net. The prior-year
+figures were adjusted accordingly. The relevant assets and lia-
+bilities were reported in a separate line on the balance sheet;
+prior-year figures are not to be adjusted. The cash flows of the
+parts of the Renewables business to be transferred are also
+reported separately in the cash flow statement and adjusted
+accordingly to the prior-year values.
+The identified preliminary goodwill results primarily from the
+strategic reorientation of the customer business and the energy
+networks as well as from the expected synergies from the inte-
+gration of the company into the Group. E.ON has not made the
+assumption that the goodwill will be deductible for tax purposes.
+The goodwill is determined as follows:
+264
+Provisional Goodwill
+€ in thousands
+Consideration transferred
+Fair value of net assets acquired
+(including deferred taxes)
+Dividend entitlement acquired
+Non-controlling shares
+Provisional goodwill
+August 31, 2020
+adjustments
+included until
+Dec. 31, 2020
+739,809
+437,095
+32,688
+222,919
+492,945
+The dividend right acquired results from a dividend paid by VSEH
+to E.ON between the signing and closing dates of the transac-
+tion. The non-controlling interest in the amount of €223 million
+results from the proportionate allocation of the identifiable net
+assets corresponding to the proportion of ownership interest.
+The acquisition contributed €276 million to revenue and
+€12.2 million to consolidated net income from August 31, 2020,
+to December 31, 2020. If the acquisition had been effective
+from January 1, 2020, revenue would have totaled €0.8 billion
+and the contribution to consolidated net income would have
+been €0.1 billion (December 31, 2020).
+The purchase price allocation to the identified assets and liabili-
+ties is still preliminary. Consequently, changes to the allocation
+of the purchase price to the individual assets and liabilities may
+still be made within the agreed adjustment period of up to twelve
+months from the acquisition date.
+Disposal of Real Estate Assets
+E.ON NA Capital, Inc. and E.ON RE Investments LLC, fully con-
+solidated companies in the E.ON Group, transferred real estate
+assets totaling about US$288 million to other entities in 2020,
+of which US$265 million was transferred to the trust assets of
+E.ON Pension Trust, which is not fully consolidated. The purchase
+price payments were primarily made in 2020.
+Significant Transactions in 2019
+Renewables
+In March 2018, E.ON concluded an agreement with RWE to
+acquire the network and sales business of innogy. As consider-
+ation, E.ON has transferred to RWE, inter alia, most of its
+Renewables business. These parts of the Renewables business
+to be transferred to RWE were accordingly presented as discon-
+tinued operations since June 30, 2018 and were deconsolidated
+as of September 18, 2019.
+All intragroup receivables, payables, expenses and income
+between the companies of the discontinued operation and the
+remaining E.ON Group companies will be eliminated. For deliver-
+ies, goods and services that were previously intragroup in nature,
+but which after the deconsolidation will be carried forward
+either between the companies to be transferred or with third
+parties, the elimination entries required for the consolidation of
+income and expenses were allocated entirely to the discontinued
+operation.
+¹This does not include the deconsolidation income amounting to €784 million.
+The following newly applicable standards and interpretations
+have no material effect on E.ON's Consolidated Financial
+Statements.
+The deconsolidation gain results mainly from the recognition in
+income of currency translation effects (€0.5 billion) previously
+recognized in other comprehensive income.
+140
+Notes
+In addition, estimates and judgments are subject to increased
+uncertainty due to the currently unpredictable global impact of
+the Covid-19 pandemic. The actual amounts may differ from the
+estimates and judgments made; changes may have a material
+impact on the financial statements. When the estimates and
+judgments were updated, all available information on expected
+economic developments and country-specific government
+measures was taken into account on the reporting date. However,
+since the Covid-19 pandemic is continuously evolving, it is diffi-
+cult to predict its duration and the extent of its impact on assets,
+liabilities, earnings and cash flows. A quantitative assessment
+of the impact of the Covid-19 pandemic in the E.ON Group based
+on available knowledge and best information available is pre-
+sented in Note 3.
+Additional estimates and assumptions relating to the conse-
+quences of Brexit are required. If necessary, known risks have
+been taken into account in the balance sheet items concerned.
+In our assessment, there is no significant impact on the financial
+statements. The expected consequences of Brexit have also
+been taken into account in medium and long-term planning.
+The underlying principles used for estimates in each of the
+relevant topics are outlined in the respective sections.
+Estimates are particularly necessary for the measurement of
+the value of property, plant and equipment and of intangible
+assets, especially in connection with purchase price allocations,
+the recognition and measurement of deferred tax assets, the
+accounting treatment of provisions for pensions and miscella-
+neous provisions, for impairment testing in accordance with
+IAS 36, for the determination of the fair value of certain financial
+instruments, and in the application of IFRS 15. Estimates also
+arise from the application of IFRS 16, namely in connection with
+the determination of the lease terms and the calculation of the
+discount rate.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis. Adjustments to accounting estimates are recog-
+nized in the period in which the estimate is revised if the change
+affects only that period, or in the period of the revision and sub-
+sequent periods if both current and future periods are affected.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements
+requires management to make estimates and assumptions that
+may both influence the application of accounting principles
+within the Group and affect the measurement and presentation
+of reported figures. Estimates are based on past experience and
+on current knowledge obtained on the transactions to be
+reported. Actual amounts may differ from these estimates.
+The Consolidated Statements of Income are classified using the
+nature of expense method, which is also applied for internal
+purposes.
+(2) New Standards and Interpretations
+In accordance with IAS 1, "Presentation of Financial Statements,"
+("IAS 1") the Consolidated Balance Sheets have been prepared
+using a classified balance sheet structure. Assets that will be
+realized within twelve months of the reporting date, as well as
+liabilities that are due to be settled within one year of the report-
+ing date are generally classified as current.
+In accordance with the so-called management approach required
+by IFRS 8, "Operating Segments," ("IFRS 8") the internal report-
+ing organization used by management for making decisions on
+operating matters is used to identify the Company's reportable
+segments. The internal performance measure used as the seg-
+ment result is EBIT adjusted to exclude certain non-operating
+effects (see Note 35).
+Segment Information
+In accordance with IAS 7, "Cash Flow Statements," ("IAS 7") the
+Consolidated Statements of Cash Flows are classified in cash
+flows from operating, investing and financing activities. Cash
+flows from discontinued operations are reported separately in
+the Consolidated Statements of Cash Flows. Interest received
+and paid, income taxes paid and refunded, as well as dividends
+received are classified as operating cash flows, whereas divi-
+dends paid are classified as financing cash flows. The purchase
+and sale prices respectively paid (received) in acquisitions and
+disposals of companies are reported net of any cash and cash
+equivalents acquired (disposed of) under investing activities
+if the respective acquisition or disposal results in a gain or loss
+of control. In the case of acquisitions and disposals that do not,
+respectively, result in a gain or loss of control, the corresponding
+cash flows are reported under financing activities. The impact on
+cash and cash equivalents of valuation changes due to exchange
+rate fluctuations is disclosed separately.
+Consolidated Statements of Cash Flows
+139
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+The fair value of the acquired receivables and other assets
+amounts to €112 million. These primarily consist of trade
+receivables in the amount of €108 million. All receivables are
+considered to be fully recoverable.
+Structure of the Consolidated Balance Sheets and Statements
+of Income
+The disposed assets and liabilities in the Renewables segment
+related to intangible assets (€0.3 billion), right-of-use assets
+(€0.3 billion), property, plant and equipment (€8.0 billion), other
+assets (€4.2 billion), provisions (€0.8 billion) and liabilities
+(€8.3 billion).
+Standards and Interpretations Applicable in
+Amendments to IAS 1 and IAS 8, "Definition of Material"
+In October 2018, the IASB published amendments to IAS 1,
+"Presentation of Financial Statements" and IAS 8, "Accounting
+Policies, Changes in Accounting Estimates and Errors" regard-
+ing the definition of material. The amendments standardize
+and clarify the definition of material and its application to dis-
+closures in financial statements presented in the IFRSs. Addi-
+tional examples are also provided. The EU has transposed these
+amendments into European law. The amendments will be
+applied for fiscal years beginning on or after January 1, 2020.
+The amendments have no impact on E.ON's Consolidated
+Financial Statements.
+Since the loss of control, the remaining 40-percent stake in
+Rampion Renewables Limited, which itself holds 50 percent of
+the Rampion offshore wind farm, has qualified as an associated
+company and been included in the consolidated financial state-
+ments using the equity method. Due to the decision to sell the
+stake to RWE, the investment was reclassified to assets held for
+sale as of December 31, 2020.
+Minority Interests in Nuclear Power Plants
+In addition to the transfer of the majority of the Renewables
+business, under the agreement RWE will acquire the minority
+interests held by E.ON in the nuclear power plants operated
+by RWE, Kernkraftwerke Lippe-Ems GmbH and Kernkraftwerk
+Gundremmingen GmbH. The minority interests included in the
+Non-Core Business segment and related liabilities were classified
+as a disposal group from June 30, 2018. In total, assets in the
+amount of €0.2 billion, provisions in the amount of €0.8 billion
+and liabilities in the amount of €0.2 billion were transferred to
+RWE in September 2019.
+Coromatic
+On July 11, 2019, the E.ON Group concluded the takeover of
+Swedish service provider Coromatic, a leading Nordic supplier
+of critical building infrastructure. The seller was the EQT Group.
+Coromatic has its registered office in Stockholm and has around
+500 employees. The company has more than 5,000 customers
+in Scandinavia that are active in a wide variety of industries,
+including data centers, healthcare, the public sector, transport,
+industry, telecommunications, finance and retail. The parties
+agreed not to disclose the purchase price. Overall, the transaction
+is not significant for the Group.
+Amendments to IFRS 16, "Covid-19-Related Rent Con-
+cessions-Amendment to IFRS 16," published in May 2020,
+transposed into European law, expected first-time application
+in fiscal year 2021
+•
+•
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. E.ON does not apply these rules
+because their application is not yet mandatory in some cases or
+their recognition by the EU is still pending in others. Currently,
+however, these adjustments are not expected to have a material
+impact on the consolidated financial statements of E.ON:
+2020
+Standards and Interpretations Not Yet
+Applicable in 2020
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+The EU has transposed these amendments into European law.
+The amendments will be applied for fiscal years beginning on
+or after January 1, 2020. The amendments have no impact on
+E.ON's Consolidated Financial Statements.
+In September 2019, the IASB published amendments to IFRS 9,
+IAS 39 and IFRS 7, "Interest Rate Benchmark Reform." The
+Phase 1 amendments of the IASB's Interest Rate Benchmark
+Reform project (IBOR reform) provide for temporary exemption
+from applying specific hedge accounting requirements to
+hedging relationships that are directly affected by IBOR reform.
+The exemptions have the effect that IBOR reform should not
+generally cause hedge relationships to be terminated due to
+uncertainty about when and how reference interest rates will be
+replaced. However, any hedge ineffectiveness should continue
+to be recorded in the income statement under both IAS 39 and
+IFRS 9. Furthermore, the amendments set out triggers for when
+the exemptions will end, which include the uncertainty arising
+from IBOR reform.
+Amendments to IFRS 9, IAS 39 and IFRS 7, "Interest Rate
+Benchmark Reform"
+Amendments to References to the Conceptual Framework
+In March 2018, the IASB published Amendments to References
+to the Conceptual Framework in IFRS. The EU has transposed
+these amendments into European law. The amendments will
+be applied for fiscal years beginning on or after January 1, 2020.
+The amendments have no impact on E.ON's Consolidated
+Financial Statements.
+In October 2018, the IASB published amendments to IAS 3,
+"Definition of a Business." The primary purpose of these amend-
+ments is to help distinguish between a business and a group of
+assets. A business comprises a group of activities and assets
+that involve at least one resource input and one substantive
+process that together contribute significantly to the ability to
+generate outputs. The IASB has introduced a concentration test
+that permits a simplified assessment of whether a set of activi-
+ties and assets is a business. It is not a business if substantially
+all of the fair value of the gross assets acquired is concentrated
+in a single identifiable asset or group of similar identifiable assets,
+in which case IFRS 3 does not apply. The EU has transposed
+these amendments into European law. The amendments will be
+applied for fiscal years beginning on or after January 1, 2020.
+The amendments have no impact on E.ON's Consolidated
+Financial Statements.
+Amendments to IFRS 3, "Definition of a Business"
+141
+147
+• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,
+"Interest Rate Benchmark Reform-Phase 2," published in
+August 2020, transposed into European law, expected first-
+time application in fiscal year 2021
+Combined Group Management Report
+205
+Operating receivables and other operating assets
+2,068
+2,068
+Deferred tax assets
+1,343
+205
+-30
+Non-current assets
+29,277
+-566
+28,711
+Inventories
+613
+1,313
+613
+Financial receivables and other financial assets
+1,097
+6
+6
+Right-of-use assets
+Property, plant, and equipment
+Companies accounted for under the equity method
+2,128
+1,097
+-442
+17,524
+-94
+17,430
+2,548
+2,548
+Other financial assets
+1,686
+Advance payments
+Receivables and other assets
+713
+3,619
+Provisions for pensions and similar obligations
+4,384
+4,384
+Miscellaneous provisions
+769
+1
+769
+1,388
+-30
+1,358
+Non-current liabilities
+28,108
+-407
+Deferred tax liabilities
+713
+3,618
+17,571
+Trade receivables and other operating assets
+8,270
+-66
+8,204
+Liquid funds
+2,394
+Operating liabilities
+2,394
+11,990
+-66
+11,924
+Financial liabilities
+17,949
+-378
+Current assets
+27,701
+371
+1,987
+included until
+Sep. 17, 2020
+as of January 1, 2019
+84
+148
+232
+Additions
+97
+Consolidated companies
+131
+Disposals/Mergers
+7
+76
+83
+Consolidated companies
+as of December 31, 2019
+228
+174
+Total
+Domestic
+•
+•
+Amendments to IFRS 4, "Insurance Contracts-Extension of
+the Temporary Exemption from IFRS 9," published in June
+2020, transposed into European law, first-time application
+in fiscal year 2021
+Amendments to IFRS 3, IAS 16 and IAS 37 and Omnibus
+Standard to Amend Multiple International Financial Reporting
+Standards (2018-2020 Cycle), published in January 2020,
+not yet transposed into European law, expected first-time
+application in fiscal year 2022
+Amendments to IAS 1, "Presentation of Financial Statements:
+Classification of Liabilities as Current or Non-Current-Deferral
+of the Effective Date," published in July 2020, not yet trans-
+posed into European law, expected first-time application in
+fiscal year 2023
+(3) Impact of the Covid-19 Pandemic
+Foreign
+The consequences of the Covid-19 pandemic impacted E.ON's
+businesses. Overall, after taking countermeasures into account,
+the E.ON Group's earnings were negatively impacted by the
+Covid-19 pandemic in the low to mid triple-digit million euro
+range in 2020. These effects are mainly attributable to the UK
+sales business and the German network business. They are
+mainly reflected in lower revenues and increased other operat-
+ing expenses.
+Notes
+142
+(4) Scope of Consolidation
+The number of consolidated companies changed as follows in
+2020:
+In 2020, a total of 54 domestic and 13 foreign associated
+companies were consolidated under the equity method
+(2019: 78 domestic companies and 15 foreign companies). In
+2020, one domestic company reported as joint operations was
+presented pro rata on the consolidated financial statements
+(2019: one domestic company).
+Scope of Consolidation
+In addition to volume and price effects, a slightly increased risk
+provision for contingent losses on receivables was also observed
+in the sales business. The energy network sector primarily
+recorded volume losses, which led to a decline in earnings in
+2020. However, in the energy network sector, the declines in
+revenue owing to changes in volume in subsequent years will be
+largely offset via the regulatory regime. The Covid-19 pandemic
+did not generate a triggering event for the E.ON Group to test
+goodwill and non-current assets for impairment.
+1,987
+203
+Additions
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+143
+On March 12, 2018, E.ON had made an offer to the remaining
+shareholders of innogy SE to acquire all registered no-par-value
+shares of innogy SE in a voluntary public takeover offer. Subse-
+quently, a further 9.41 percent of innogy shares were tendered
+for a total consideration of €37.59 per share (including an agreed
+dividend and share price adjustment).
+The purchase price allocation was finalized in the third quarter
+of 2020, which is within the adjustment period of up to twelve
+months from the completion of the first-time consolidation
+granted under IFRS 3.45. The final calculations of the fair values
+of the acquired assets and liabilities as of September 18, 2019,
+are as follows:
+As consideration for innogy's network and sales business,
+RWE was granted a 16.7-percent shareholding in E.ON SE by
+way of a 20-percent capital increase against contribution in
+kind from existing authorized capital. RWE has notified E.ON
+that it has since reduced its stake to 15 percent. E.ON had also
+transferred to RWE most of its Renewables business and the
+minority interests held by E.ON subsidiary PreussenElektra in
+the Lippe-Ems GmbH and Gundremmingen GmbH nuclear
+power plants operated by RWE. E.ON and RWE had also agreed
+on a compensatory payment of €1.5 billion from RWE to E.ON.
+This payment was offset against E.ON's payment obligations
+and indemnification assets with respect to RWE as part of a
+shortened payment procedure.
+Acquired Net Assets at Fair Value
+Concessions, commercial property rights, licenses, and similar rights
+Customer relationships and similar items
+September 18,
+2019 adjustments
+included until
+Dec. 31, 2019
+371
+Adjustments
+September 18,
+2019 adjustments
+€ in millions
+377
+In March 2018, E.ON had concluded an agreement with RWE
+to acquire the network and sales business of innogy. Within this
+framework, the 76.8-percent stake in innogy SE held by RWE
+was transferred from RWE to E.ON following approval by the
+antitrust authorities. The entire Renewables and Gas Storage
+business of innogy as well as the 37.9-percent stake that innogy
+holds in Austrian energy supplier KELAG will remain within the
+RWE Group. The acquisition was concluded through a compre-
+hensive transfer of business activities following the approval
+of the EU Commission and the competent antitrust authorities
+on September 18, 2019. The approval was granted subject to
+the conditions of the EU Commission, including the sale of vari-
+ous business activities of E.ON and innogy. All conditions were
+fulfilled in the course of 2020 (please refer to the section below
+entitled "Conditions Imposed by the EU Commission Arising
+from the innogy Takeover Fulfilled").
+Finalization of Accounting for the innogy Acquisition
+Accounting for the innogy acquisition was finalized in the third
+quarter of 2020.
+10
+12
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disposals/Mergers
+13
+24
+Changes in the measurement of assets and liabilities acquired
+as part of the innogy merger due to new knowledge acquired
+up to September 17, 2020, and thus within the one-year mea-
+surement period, were made retroactively to the acquisition
+date. Corresponding adjustments for the 2019 financial year
+or the reporting date of December 31, 2019, in the balance
+sheet, income statement, statement of recognized income and
+expenses, and statement of changes in equity also required
+adjustments to the disclosures affected by this in the Notes to
+the Consolidated Financial Statements. In addition, the innogy
+integration also involved a standardization of processes for col-
+lecting data relevant to the Notes to the Consolidated Financial
+Statements and of procedures for allocating data to the Notes
+to the Consolidated Financial Statements; the knowledge gained
+in the process was taken into account by making appropriate
+adjustments to the disclosures for the 2019 fiscal year. Unless
+otherwise noted in individual cases, the adjustments to disclo-
+sures for the 2019 fiscal year marked in the Notes to the Consol-
+idated Financial Statements result from the matters described
+above in connection with the innogy integration.
+37
+as of December 31, 2020
+171
+191
+362
+(5) Acquisitions, Disposals and Discontinued
+Operations
+Significant Transactions in 2020
+Consolidated companies
+Financial liabilities
+22
+-908
+The agreement is expected to be fully implemented in 2021 fol-
+lowing clearance by the relevant authorities. Thereafter, MVM
+will hold 100 percent of the ÉMÁSZ distribution network opera-
+tor ÉMÁSZ, Hálózati Kft. ("ÉMÁSZ DSO") and a 25-percent stake
+in E.ON Hungária Zrt. (including the acquired Innogy holding
+companies ELMŰ Zrt. and ÉMÁSZ Zrt.). In addition, Opus will
+acquire E.ON's current subsidiary E.ON Tiszántúli Áramhálózati
+Zrt. ("E.ON ETI"). Both the ÉMÁSZ DSO distribution network
+provider and E.ON ETI are reported as a disposal group in accor-
+dance with IFRS 5 as of December 31, 2020. The activities of
+E.ON ETI had already been reported as a disposal group in accor-
+dance with IFRS 5 as of December 31, 2019. As of December 31,
+2020, the assets, primarily property, plant and equipment and
+other assets, totaling €0.3 billion and liabilities totaling €0.1 bil-
+lion, primarily liabilities and provisions were reported. At the
+ÉMÁSZ DSO, assets of €0.2 billion and liabilities of €0.1 billion
+are reported in the disposal group as of December 31, 2020.
+Notes
+146
+Nord Stream
+E.ON Beteiligungen GmbH held all of the shares of PEG Infra-
+struktur AG (PEGI) and thereby the indirect interest in Nord
+Stream AG (15.5 percent). Nord Stream AG, a project company
+founded in 2005, owns and operates two pipelines, each
+1,224 kilometers long, that transport natural gas from Russia
+to Germany. Under an agreement dated December 18, 2019,
+E.ON Beteiligungen GmbH sold and transferred all of the shares
+of PEGI, and consequently the indirect interest in Nord Stream
+AG, to E.ON Pension Trust e.V. (EPT), with effect on and for
+account of the trust assets of MEON Pensions GmbH & Co. KG
+(MEON). EPT acts as trustee under the Contractual Trust Arrange-
+ment (CTA), with MEON as trustor, which has bundled the ben-
+efit obligations and the plan assets of companies of the E.ON
+Group and is responsible for fulfillment of the acquired benefit
+obligations and the investment of the plan assets transferred
+for this purpose. There are additional CTA trust agreements with
+EPT as trustee with companies of the E.ON Group as trustors.
+Based on the assets, as of the end of 2019 MEON, with a volume
+of €2.9 billion, is the largest trustor within the framework of the
+CTA with EPT. The shares were transferred to PEGI with effect
+from the close of December 31, 2019. The deconsolidation gain
+in fiscal 2019 amounted to €0.4 billion. The purchase price pay-
+ment of €1.1 billion was made on January 15, 2020.
+Acquisition of Shares in VSE Holding Successfully Completed
+E.ON completed the acquisition of 49 percent of the shares in
+Východoslovenská energetika Holding s.a. (VSEH), based in Košice,
+Slovakia, from RWE on August 21, 2020. VSEH consists of
+various business segments, of which the electricity distribution
+segment accounts for the largest share. With the transaction,
+E.ON expands the energy network and customer solutions busi-
+ness portfolio in Slovakia. Extensive decision-making powers over
+the business activities of VSEH result in a controlling influence
+in accordance with IFRS 10, so that VSEH and its subsidiaries
+are fully consolidated in the E.ON Consolidated Financial State-
+ments and an acquisition must be accounted for under IFRS 3.
+At the beginning of October 2019, E.ON acquired the 27-percent
+shareholding held by EnBW in ELMŰ Nyrt. ("ELMŰ") and ÉMÁSZ
+Nyrt. ("ÉMÁSZ"). Subsequently, a framework agreement was
+concluded between E.ON, MVM Magyar Villamos Művek Zrt.
+("MVM", a shareholder of ELMŰ and ÉMÁSZ) and Opus Global
+Nyrt. ("Opus"). This agreement allows E.ON to create a balanced
+and optimized portfolio in Hungary that enables the swift inte-
+gration of innogy's Hungarian operations.
+The consideration transferred for the acquisition of the shares
+amounted to €739 million. The purchase price to be paid to RWE
+was not cash effective, but was offset against a receivable still
+outstanding from the completed acquisition of the innogy shares.
+In addition, a compensation payment for the waiver of the right
+The calculations of the fair values of the acquired assets and
+liabilities are as follows:
+Acquired Net Assets at Fair Value
+€ in thousands
+Concessions, commercial property rights, licenses,
+and similar rights
+Customer relationships and similar items
+Right-of-use assets
+August 31, 2020
+adjustments
+included until
+Dec. 31, 2020
+of first refusal of the Slovakian state was included in the consid-
+eration transferred. The transaction therefore had no material
+impact on cash flows from investing activities. Acquisition costs
+of €2 million incurred were recognized in the income statement
+under other operating expenses. The costs were mainly incurred
+for consulting services.
+5,753
+Reorganization of the Hungary Business
+An additional condition imposed by the EU Commission included
+the sale of the German heating electricity business of E.ON
+Energie Deutschland. The contract portfolio disposed of includes
+all special contracts with customers for the supply of heating
+electricity and all special contracts for the supply of household
+electricity if household electricity is also purchased at the same
+point of consumption and from the same contract partner for
+heating electricity with separate metering. In anticipation of the
+disposal, the contract portfolio was spun off into two newly
+founded companies, E.ON Heizstrom Nord GmbH ("EHN") and
+E.ON Heizstrom Süd GmbH ("EHS"). Because of the obligation
+to dispose of these activities, E.ON has already reported its
+heating electricity business as a disposal group pursuant to
+IFRS 5 with effect from September 30, 2019. The sale of EHN
+and EHS was completed on April 28, 2020.
+Sales
+Other income
+Other expense
+Income/Loss from discontinued
+operations before income taxes
+110
+In addition, on September 23, 2020, E.ON sold its subsidiary
+E.ON Energiakereskedelmi Kft. ("EKER")-which is responsible
+for E.ON's non-regulated commercial electricity retail business
+in Hungary-to Audax Renovables. The parties have agreed not
+to disclose the purchase price. Because of the obligation to dis-
+pose of these activities, E.ON has already reported the business
+of EKER as a disposal group pursuant to IFRS 5 with effect
+from September 30, 2019. With the completion of these trans-
+actions, E.ON has fully complied with the antitrust requirements
+in connection with the innogy acquisition. E.ON had previously
+withdrawn from operating individual charging stations for elec-
+tric vehicles on German motorways.
+17
+-19
+-2
+Income/Loss from discontinued
+operations, net
+91
+15
+The disposed assets and liabilities related to intangible assets
+(€306 million), rights of use (€9 million), property, plant and
+equipment (€123 million), other assets (€512 million), provisions
+(€1 million) and liabilities (€273 million). The deconsolidation
+gains also include the recognition in income of the negative
+currency translation effects previously reported in other com-
+prehensive income (€-41.8 million).
+Income taxes
+€ in millions
+109,448
+Property, plant, and equipment
+Deferred tax liabilities
+138,099
+Non-current liabilities
+379,736
+Financial liabilities
+64,695
+Provisions for pensions and similar obligations
+Miscellaneous provisions
+Trade payables and other operating liabilities
+Miscellaneous provisions
+22,381
+223,098
+437,095
+Current liabilities
+Total equity and liabilities
+Report of the Supervisory Board
+Strategy and Objectives
+1,848
+136,022
+5,494
+8,217
+223,030
+778,202
+Operating receivables and other operating assets
+Deferred tax assets
+7,971
+10,235
+Non-current assets
+917,103
+10,390
+Inventories
+Receivables and other assets
+3,940
+Trade receivables and other operating assets
+Liquid funds
+108,003
+Current assets
+Financial liabilities
+Operating liabilities
+122,826
+5,071
+-419
+5,812
+52
+The largest change in terms of amount resulted from the fact
+that the loan receivable from RWE to innogy SE in the amount of
+€0.7 billion, which was acquired by E.ON, is no longer reported
+separately as in the 2019 Annual Report, but instead is presented
+as part of net assets. This is reflected in the sharp decline in
+current financial liabilities. The value of financial liabilities was
+also reduced by the fact that a larger portion than originally
+assumed was attributable to innogy's renewables business. The
+change in rights of use is the result of the retrospective adjust-
+ment to the underlying interest rate for selected leases. This
+is accompanied by corresponding adjustments, in particular to
+depreciation and amortization and interest expense. Recent
+information on the remaining useful lives of acquired network
+assets has led to adjustments in the carrying amounts of prop-
+erty, plant and equipment. The reduction in trade accounts
+receivable is mainly due to receivables in the UK and is mainly
+related to an increase in expected credit losses.
+Goodwill
+€ in millions
+Consideration transferred
+Fair value of shares in innogy SE that were previously acquired and held on the market
+144
+Amount to be allocated as part of the purchase price allocation
+Goodwill
+¹Now allocated to the fair value of net assets acquired.
+September 18,
+2019 adjustments
+included until
+Dec. 31, 2019
+13,660
+Adjustments
+38
+Fair value of the negative net assets acquired (including deferred taxes)
+Acquisition of RWE's intragroup receivables from innogy SE¹
+Non-controlling shares
+September 18,
+2019 adjustments
+Notes
+686
+940
+-748
+Trade payables and other operating liabilities
+8,890
+-3
+8,887
+1,449
+Miscellaneous provisions
+1,658
+Current liabilities
+12,396
+11,485
+Total equity and liabilities
+763
+1,658
+included until
+Sep. 17, 2020
+-911
+949
+By the acquisition date, E.ON had also acquired an additional
+3.79 percent of innogy shares on the market. The extraordinary
+general shareholders meeting of innogy SE in Essen on March 4,
+2020, finally approved the exclusion of the minority shareholders
+of innogy SE. With the entry in the commercial register on
+June 2, 2020, the merger of innogy SE into E.ON Verwaltungs SE
+(subsequently renamed innogy SE) became effective. The fixed
+cash settlement was paid out shortly afterwards. A court-
+appointed expert auditor has confirmed in accordance with the
+requirements of German stock corporation law that the fixed
+cash compensation of €42.82 per share is appropriate.
+Conditions Imposed by the EU Commission Arising from the
+innogy Takeover Fulfilled
+As part of the acquisition of innogy, the EU Commission has,
+among other things, imposed conditions requiring the disposal
+of certain E.ON and innogy businesses in Eastern Europe. To
+fulfill these conditions, E.ON and the MVM Group signed an
+agreement on July 10, 2020, to sell innogy Česká republika a.s.
+and thereby the entire Czech electricity and gas business of
+innogy in the retail segment. E.ON had already reported these
+activities of innogy in the Czech Republic as discontinued oper-
+ations under IFRS 5 as of September 30, 2019. No additional
+impairment loss was recognized from the comparison of the
+carrying amounts of these discontinued operations and the fair
+values less costs to sell as of the balance sheet date. The trans-
+action was approved by the European Commission at the end
+of October and subsequently completed on October 30, 2020.
+The parties have agreed not to disclose the purchase price.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+145
+Income Statement-
+Customer Solutions-Czech Republic innogy (Summary)
+2020
+2019
+824
+13,698
+34
+384
+The difference in the consideration transferred is due to subse-
+quent purchase price adjustments. The goodwill results primarily
+from the strategic reorientation of the customer business and
+the energy networks as well as from the expected synergies from
+the integration of innogy SE into the Group.
+15,671
+In fiscal year 2020, E.ON generated revenues of €57 million
+(2019: €19 million), no interest income (2019: €5 million), inter-
+est expenses of €7 million (2019: €8 million), and other income/
+expenses of €41 million (2019: -€2 million), with the fully con-
+solidated companies to be transferred. The following table shows
+the main items of the income statement of the discontinued
+operation (after allocation of elimination entries) until the date
+of deconsolidation:
+15,474
+197
+949
+38
+14,647
+14,609
+-686
+-1,449
+-763
+702
+0
+2,330
+143
+2,473
+-702
+-33
+-179
+-146
+-876
+Companies accounted for under the equity method
+217
+-1,093
+-453
+Remeasurements of defined benefit plans
+-571
+1
+-569
+-214
+-214
+Currency translation adjustments
+-1
+39
+-11
+50
+-361
+-444
+9
+-2
+-8
+In connection with the acquisition of the Swedish service pro-
+vider Coromatic, deferred tax assets of €4 million and deferred
+tax liabilities of €18 million resulted from the purchase price
+allocation as of December 31, 2019.
+-112
+Domestic tax loss carryforwards
+2019
+-320
+2020
+€ in millions
+December 31,
+Tax Loss Carryforwards
+Of the foreign tax loss carryforwards, a significant portion
+relates to previous years.
+The foreign tax loss carryforwards consist of corporate tax loss
+carryforwards amounting to €9,753 million (2019: €8,738 million)
+and tax loss carryforwards from local income taxes amounting
+to €506 million (2019: €65 million).
+Since January 1, 2004, domestic tax loss carryforwards can only
+be offset against a maximum of 60 percent of taxable income,
+subject to a full offset against the first €1 million. This minimum
+corporate taxation also applies to trade tax loss carryforwards.
+The domestic tax loss carryforwards result from adding corpo-
+rate tax loss carryforwards amounting to €79 million (2019:
+€162 million) and trade tax loss carryforwards amounting to
+€1,377 million (2019: €1,773 million).
+The declared tax loss carryforwards as of the dates indicated
+are as follows:
+The final purchase price allocation to the acquisition of innogy SE
+resulted in deferred tax assets of €1,313 million and deferred
+tax liabilities of €1,358 million as of December 31, 2020.
+In connection with the acquisition of the Slovakian VSEH Group,
+deferred tax assets of €10 million and deferred tax liabilities of
+€138 million resulted from the purchase price allocation as of
+December 31, 2020.
+¹Adjusted prior-year figures.
+-1,309
+-28
+-1,281
+-1,740
+236
+-1,976
+Total
+-115
+-3
+-369
+38
+-6,578
+Securities (IFRS 9)
+2,508
+2,194
+2,993
+2,283
+-6,578
+-5,389
+-5,389
+9,086
+8,772
+8,382
+287
+7,672
+-3,195
+9,086
+11,356
+8,382
+10,867
+966
+680
+691
+1,456
+809
+-2,584
+676
+717
+271
+Cash flow hedges
+taxes
+taxes
+taxes
+taxes
+taxes
+income
+Income
+income
+income
+Income
+income
+taxes
+€ in millions
+2019
+After
+Before
+After
+Before
+2020
+Income Taxes on Components of Other Comprehensive Income¹
+Income taxes recognized in other comprehensive income for the
+years 2020 and 2019 break down as follows:
+Of the deferred taxes reported, a total of -€797 million was
+charged directly to equity in 2020 (2019: -€538 million charge).
+A further €49 million in current taxes (2019: €49 million)
+was also recognized directly in equity. Currency translation
+differences with an impact on income tax within this item were
+reclassified to other comprehensive income.
+154
+Notes
+-358
+1,935
+The virtual shares are canceled if the employment relationship
+of the beneficiary ends before the end of the term for reasons
+within the control of the beneficiary. This shall apply in particular
+in the event of termination by the beneficiary and in the event
+of extraordinary termination for good cause by the Company.
+If the employment relationship of the beneficiary is terminated
+before retirement, through the end of a limited term or for oper-
+ational reasons before the end of the term, the virtual shares do
+not expire but are settled at maturity.
+10,259
+The provision for the first, second, third and fourth tranche of
+the E.ON Performance Plan as of the balance sheet date is
+€47.5 million (2019: €26.8 million). The expense for the first,
+second, third and fourth tranches amounted to €20.8 million
+in the 2020 fiscal year (2019: €11.9 million).
+Target value at issuance
+Term
+Date of issuance
+E.ON Performance Plan Virtual Shares
+The following are the base parameters of the tranches of the
+E.ON Performance Plan active in 2019:
+If the employment relationship ends before maturity due to death
+or permanent invalidity, the virtual shares are settled before
+maturity, whereby in this case the average TSR performance of
+the fiscal years that have already completely ended is used to
+calculate the payment amount. The same shall apply in the case
+of a change in control related to E.ON SE and also if the allocating
+company leaves the E.ON Group before maturity.
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+final 60 days of the vesting period. This amount is increased by
+the dividends distributed on E.ON stock during the vesting
+period and then paid out. The sum of the payouts is capped at
+200 percent of the agreed target.
+the Supervisory Board upon allocation, the number of virtual
+shares is reduced by one fourth. If E.ON's performance is at
+the upper cap or above, the fourth of the virtual shares allocated
+for the year in question will increase, but to a maximum of
+150 percent. Linear interpolation is used to translate interme-
+diate figures into percentage.
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON's TSR performance in a
+given year determines the final number of one fourth of the vir-
+tual shares granted at the beginning of the vesting period. For
+this purpose, the TSRS of all companies are ranked, and E.ON's
+relative position is determined based on the percentile reached.
+If target attainment in a year is below the threshold defined by
+4th tranche
+Jan. 1, 2020
+The TSR is the return on E.ON stock, which takes into account
+the stock price plus the assumption of reinvested dividends,
+adjusted for changes in capital. The peer group used for relative
+TSR will be the other companies in E.ON's peer index, the
+STOXX® Europe 600 Utilities. Only companies included in the
+STOXX® Europe 600 Utilities for which no takeover offer pursu-
+ant to Section 29(1) of the German Securities Acquisition and
+Takeover Act (WpÜG) or pursuant to an applicable comparable
+regulation of a foreign legal system was or is effective during
+the fiscal year in question and in which E.ON does not hold or
+did not hold a significant portion of shares during the fiscal year
+in question will be taken into consideration for the tranche allo-
+cated in 2019. The peer group for the tranche allocated in 2019
+is also adjusted for companies that have not been in the index
+for the full year.
+157
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+In 2017, 2018, 2019 and 2020, E.ON granted the members
+of the Management Board of E.ON SE and certain executives
+of the E.ON Group virtual shares under the E.ON Performance
+Plan. The vesting period of each tranche is four years. Vesting
+periods start on January 1 of each year.
+E.ON Performance Plan (EPP)
+The 60-day average of the E.ON share price as of the balance
+sheet date is used to measure the fair value of the virtual shares.
+The provision for the fifth tranche of the E.ON Share Matching Plan
+as of the balance sheet date is €3.1 million (2019: €2.2 million).
+The expense for the fifth tranche amounted to €0.8 million in the
+2020 fiscal year (2019: €0.2 million).
+4 years
+€7.17
+5th tranche
+Apr. 1, 2017
+Target value at issuance
+The beneficiary will receive virtual shares in the amount of the
+agreed target. The conversion into virtual shares will be based on
+the fair market value on the date when the shares are granted.
+The fair market value will be determined by applying methods
+accepted in financial mathematics, taking into account the
+expected future payout and consequently the volatility and risk
+associated with the EPP. The number of virtual shares allocated
+may change during the four-year vesting period, depending on
+the total shareholder return ("TSR") of E.ON stock compared
+with the TSR of the companies in a peer group ("relative TSR").
+4 years
+€7.88
+3rd tranche
+Jan. 1, 2019
+4 years
+€6.68
+2nd tranche
+Jan. 1, 2018
+2
+4,300
+742
+25,331
+32,589
+29,277
+39,769
+2019
+2020
+158
+Total employees, E.ON Group²
+Employees, core business
+Non-Core Business
+Corporate Functions/Other
+Energy Networks
+Customer Solutions
+Renewables
+Headcount
+Employees¹
+The breakdown by segment is shown in the following table:
+During 2020, E.ON employed an average of 78,523 persons
+(2019: 61,050), not including an average of 2,313 apprentices
+(2019: 1,656) and 235 (2019: 178) board members/managing
+directors.
+Employees
+Notes
+4 years
+€5.84
+4 years
+€6.41
+1st tranche
+Jan. 1, 2017
+Date of issuance
+Term
+Foreign tax loss carryforwards
+E.ON Share Matching Virtual Shares
+The plan also contains adjustment mechanisms to eliminate the
+effect of events such as interim corporate actions.
+4,635
+Wages and salaries
+2019
+2020
+€ in millions
+Personnel Costs
+The following table provides details of personnel costs for the
+periods indicated:
+Personnel Costs
+(12) Personnel-Related Information
+Income tax items are regularly assessed, in particular against
+the backdrop of numerous changes in tax laws, tax regulations,
+legal decisions and ongoing tax audits. E.ON is responding to this
+circumstance, in particular through the application of IFRIC 23,
+by continuously identifying and assessing the tax environment
+and the resulting effects. The most current information is then
+incorporated into the estimate parameters necessary for mea-
+suring the tax provisions. Related potential interest rate effects
+are also assessed and measured accordingly. They are presented
+in separate items.
+3,301
+basis for recognizing deferred tax assets is an estimate by manage-
+ment based on the development of temporary reversal effects
+and concrete tax structuring measures of the extent to which it
+is probable that the respective companies will achieve taxable
+earnings in the future against which the as yet unused tax losses,
+tax credits and deductible temporary differences can be offset.
+Deferred tax assets were not recognized, or are no longer recog-
+nized, in the amount of €16,750 million (2019: €12,142 million)
+for temporary differences which are recognized in income and
+equity.
+Deferred taxes were not recognized, or no longer recognized,
+on a total of €8,433 million (2019: €7,813 million) in tax loss
+carryforwards that for the most part do not expire. Deferred
+tax assets were not recognized, or no longer recognized, on
+non-expiring domestic corporate tax loss carryforwards of
+€70 million (2019: €142 million) or on domestic trade tax loss
+carryforwards of €1,353 million (2019: €1,742 million).
+155
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+10,738
+11,715
+Total
+8,803
+As of December 31, 2020, and December 31, 2019, E.ON
+reported deferred tax assets for companies that incurred losses
+in the current or the prior-year period that exceed the deferred
+tax liabilities by €387 million and €74 million, respectively. The
+Social security contributions
+696
+Pension costs and other employee benefits
+Pension costs
+60-day average prices are used to determine both the target
+value at issuance and the final price in order to mitigate the
+effects of incidental, short-lived price movements.
+At the end of the term, the sum of the dividends paid to the ordi-
+nary shareholders during the term is added to each virtual share.
+The maximum amount to be paid out to a participant in the fifth
+tranche of the E.ON Share Matching Plans is limited to twice
+the sum of the equity deferral.
+the death of the beneficiary. If the service or employment rela-
+tionship ends before the end of the term for reasons within the
+control of the beneficiary, all virtual shares-except for those that
+resulted from the equity deferral-expire.
+A payout generally will not take place until after the end of the
+four-year term. This is true even if the beneficiary retires before-
+hand, or if the beneficiary's contract is terminated on operational
+grounds or expires during the term. A payout before the end of
+the term will take place in the event of a change of control or on
+In 2017 virtual shares were granted for the last time under the
+E.ON Share Matching Plan, only to members of the Management
+Board of E.ON SE and only to the extent of the "equity deferral."
+The total of these allocations is shown below as the fifth tranche
+of the E.ON Share Matching Plan. Additional information can be
+found on pages 85 and 86 of the compensation report.
+In 2015 and 2016, virtual shares from the third and fourth tranche
+were granted in the context of base matching and performance
+matching exclusively to members of the Management Board of
+E.ON SE. Executives were granted a multi-year bonus, the terms
+of which are described further below, instead of the base and
+performance matching.
+The equity deferral was determined by multiplying an arithmetic
+portion of the beneficiary's contractually agreed target bonus
+by the beneficiary's total target achievement percentage from
+the previous year. The equity deferral was converted into virtual
+shares and vested immediately. Beneficiaries were additionally
+granted virtual shares in the context of base matching and per-
+formance matching. For members of the Management Board of
+E.ON SE, the proportion of base matching to the equity deferral
+was determined at the discretion of the Supervisory Board; for
+all other beneficiaries it was 2:1. The performance-matching
+target value at allocation was equal to that for base matching in
+terms of amount. Performance matching resulted in a payout
+only on achievement of a minimum performance as specified at
+the beginning of the term by the Management Board and the
+Supervisory Board.
+From 2013 to 2016, E.ON granted virtual shares to members
+of the Management Board of E.ON SE and certain executives of
+the E.ON Group under the E.ON Share Matching Plan. At the end
+of its four-year term, each virtual share was entitled to a cash
+payout linked to the final E.ON share price established at that
+time. The calculation inputs for this long-term variable compen-
+sation package were equity deferral, base matching and perfor-
+mance matching.
+E.ON Share Matching Plan
+156
+Notes
+The following discussion includes reports on the E.ON Share
+Matching Plan introduced in 2013 and on the E.ON Performance
+Plan introduced in 2017.
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment
+as part of their voluntary long-term variable compensation. The
+purpose of such compensation is to reward their contribution
+to E.ON's growth and to further the long-term success of the
+Company. This variable compensation component, comprising
+a long-term incentive effect along with a certain element of
+risk, provides for a sensible linking of the interests of shareholders
+and management.
+The voluntary employee stock purchase program, which through
+2015 provided employees of German Group companies the
+opportunity to purchase E.ON shares at preferential terms, was
+again suspended in 2020, as it had been from 2016 to 2019.
+Long-Term Variable Compensation
+Employee Stock Purchase Program
+The expenses for share-based payment in 2020 (the E.ON Share
+Matching Plan, the multi-year bonus and the E.ON Performance
+Plan) amounted to €21.7 million (2019: €21.2 million). Expenses
+of €4.8 million were also incurred in the 2020 reporting period
+in connection with innogy SE's share-based payment system.
+Share-Based Payment
+Personnel costs of €5,866 million were €1,765 million higher
+than the prior-year figure of €4,101 million, mainly because of
+the inclusion of innogy for a full year for the first time.
+436
+364
+355
+4,101
+5,866
+Total
+518
+535
+The following are the base parameters of the tranches of the
+share matching plan active in 2020:
+824
+-25
+397
+317
+290
+Miscellaneous
+3,941
+2,321
+Total
+10,919
+7,570
+¹Adjustment of prior-year figures in the context of "failed-own-use" accounting regarding
+presentation of sales, cost of materials, other operating income and other operating expenses
+with no impact on earnings.
+Other operating expenses of €10,919 million were 44 percent
+above the prior-year level of €7,570 million. Expenditures relating
+to derivative financial instruments (including currency derivatives)
+increased by €1,488 million to €5,787 million. The realization
+gains of €597 million (2019: €419 million) from acquired innogy
+derivatives recognized in the previous year under miscellaneous
+other expenses have been reclassified to expenses from deriva-
+tive financial instruments. In addition, realized expenses from
+currency derivatives (€1,917 million > 2019: €1,350 million) are
+reported under expenses from derivative financial instruments
+(including currency derivatives).
+Losses from exchange rate differences in the amount of
+€641 million increased by €216 million compared to the prior
+year (€425 million).
+Miscellaneous other operating expenses include effects in the
+amount of €563 million from the reversal of own-use contracts
+capitalized as part of the innogy purchase price allocation
+(2019: €261 million). Also included are consulting and audit
+services expenses in the amount of €287 million (2019:
+€229 million), advertising and marketing expenses in the amount
+of €174 million (2019: €131 million), rents and leases in the
+amount of €44 million (2019: €46 million) and services rendered
+by third parties, refunds and passing-on charges in the amount
+of €722 million (2019: €643 million). This item also includes IT
+expenditures in the amount of €396 million (2019: €344 million),
+insurance premiums in the amount of €57 million (2019: €43 mil-
+lion), travel expenses in the amount of €50 million (2019:
+€75 million), contributions and fees in the amount of €99 million
+(2019: €53 million) and expenses for decommissioning, recla-
+mation, repairs in the amount of €83 million (2019: €74 million).
+(9) Cost of Materials
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of
+gas and
+electricity. Fuel supply is also included in this line item. Expenses
+for purchased services consist primarily of network usage
+charges and maintenance costs.
+Cost of materials of €47,147 million was significantly higher
+than the prior-year level of €31,434 million. The increase is
+primarily attributable to the inclusion of the innogy Group for an
+entire year for the first time.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+151
+Cost of Materials¹
+Write-down of current assets
+144
+133
+and securities
+Notes
+150
+The gain on the disposal of property, plant and equipment and
+securities consisted primarily of gains on the disposal of the
+Heizstrom Nord and Heizstrom Süd companies in the amount of
+€160 million. In 2019 there were gains on the disposal of PEGI
+in the amount of €390 million. Gains were realized on the sale
+of securities in the amount of €23 million (2019: €42 million).
+Miscellaneous other operating income included effects from
+the reversal of own-use contracts recognized as liabilities in the
+amount of €297 million in the framework of the innogy pur-
+chase price allocation (2019: €207 million), the proceeds from
+transactions outside ordinary business activities in the amount
+of €200 million (2019: €243 million), gains on disposals
+(€135 million) and rental and lease interest in the amount of
+€63 million (2019: €51 million).
+The following table provides details of other operating expenses
+for the periods indicated:
+Other Operating Expenses¹
+2020
+2019
+641
+€ in millions
+425
+€ in millions
+Loss from exchange rate differences
+Loss on derivative financial instruments
+(including exchange rate changes)
+5,787
+4,299
+Taxes other than income taxes
+100
+Loss on disposal of non-current assets
+91
+2020
+538
+Expenses for raw materials and supplies
+and for purchased goods
+34
+8
+Impairment charges/reversals on other
+financial assets
+-84
+3
+Income/Loss from equity investments
+18
+58
+Other
+Income/Loss from securities, interest and
+Amortized cost
+670
+35
+1,032
+Fair value through P&L
+296
+Fair value through OCI
+14
+Other interest income
+325
+similar income
+¹Adjustment of prior-year figures in the context of "failed-own-use" accounting regarding
+presentation of sales, cost of materials, other operating income and other operating expenses
+with no impact on earnings.
+47
+Fair value through P&L
+31,599
+20,049
+Expenses for purchased services
+Total
+15,548
+11,385
+47,147
+31,434
+¹Adjustment of prior-year figures in the context of "failed-own-use" accounting regarding
+presentation of sales, cost of materials, other operating income and other operating expenses
+with no impact on earnings.
+(10) Financial Results
+68
+The following table provides details of financial results for the
+periods indicated:
+Other interest income consists primarily of income from previ-
+ous periods. Other interest expenses include the accretion of
+provisions for asset retirement obligations in the amount of
+€3 million (2019: €44 million). Also contained in this item is the
+net interest cost from provisions for pensions in the amount of
+€95 million (2019: €73 million) and financial lease liabilities in
+the amount of €154 million (2019: €49 million).
+Financial Results¹
+€ in millions
+2020
+2019
+Income/Loss from companies in which
+equity investments are held
+102
+55
+was offset by the negative valuation effects of the long-term
+provisions. The interest expense from the innogy bonds acquired
+is reduced by the reversal of valuation differences between the
+nominal value and the fair value of the bonds of innogy SE and
+innogy Finance B.V. recognized in the course of initial consolida-
+tion in the amount of €328 million. This positive partial effect
+is reported under non-operating earnings.
+Interest and similar expenses
+expenses.
+Income and expenses from derivative financial instruments
+(including currency derivatives) relate to fair value measure-
+ment under IFRS 9. Realized gains of €713 million (2019:
+€497 million) from acquired innogy derivatives recognized in
+the prior year under other income have now been reclassified to
+income from derivative financial instruments. In addition, real-
+ized income from currency derivatives (€1,679 million > 2019;
+€1,534 million) is reported under income from derivative finan-
+cial instruments (including currency derivatives).
+1
+Tax advisory services
+4
+6
+Domestic
+4
+7
+Other attestation services
+28
+23
+Domestic
+32
+Financial statement audits
+2020
+37
+2019
+€ in millions
+Independent Auditor Fees
+During 2020 and 2019, the following fees for services provided
+by the independent auditor of the Consolidated Financial State-
+ments, PricewaterhouseCoopers ("PwC") GmbH, Wirtschafts-
+prüfungsgesellschaft, (domestic) and by companies in the inter-
+national PwC network were recorded as expenses:
+Domestic
+1
+2
+1
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+presented on pages 218 through 235.
+List of Shareholdings
+the innogy subsidiaries from the acquisition date and the compa-
+nies transferred to RWE until the date of deconsolidation.
+In the previous year, the fees indicated took into consideration
+Fees for other services consist primarily of services in connec-
+tion with the transfer of E.ON's renewables energy business to
+RWE, and technical support in connection with the implemen-
+tation of transactions and new requirements in the areas of IT
+and accounting issues.
+The fees for tax consulting services mainly relate to services in
+the area of tax compliance.
+The fees for other auditing services include all attestation ser-
+vices that are not auditing services and are not used in connection
+with the audit. In 2020, these costs are for the legally required
+attestation services (e.g., as a result of the Renewable Energy Act
+[EEG], the Act on Combined Heat and Power Generation [KWKG])
+and for other voluntary attestation services (primarily in con-
+nection with new IT systems and data migration as well as spe-
+cial auditing services in the course of the transfer of the renew-
+able energy business from E.ON to RWE).
+The auditor's fees relate to the audit of the Consolidated Financial
+Statements and the legally mandated financial statements of
+E.ON SE and its affiliates. They also include fees for auditing
+reviews of the IFRS interim financial statements and other tests
+directly required by the audit. The figure from the previous year
+also includes additional auditing services in relation to the innogy
+transaction.
+30
+Fees and Services of the Independent Auditor
+222
+Total
+Domestic
+Other services
+33
+32
+42
+42
+1
+2
+Domestic
+On December 15, 2020, the Management Board and the Super-
+visory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and
+publicly accessible to stockholders on the Company's Web site
+(www.eon.com).
+German Corporate Governance Code
+(13) Other Information
+Income from exchange rate differences
+1,064
+2019
+327
+Gain on derivative financial instruments
+(including currency derivatives)
+5,906
+3,378
+Gain on disposal of non-current assets and
+securities
+469
+2020
+612
+52
+18
+Miscellaneous
+1,416
+1,032
+Total
+8,907
+5,367
+Other operating income increased by €3,540 million to
+€8,907 million (2019: €5,367 million).
+Gain on the reversal of provisions
+Corresponding items from derivative financial instruments
+(including currency derivatives) are included in other operating
+€ in millions
+The table below provides details of other operating income for
+the periods indicated:
+¹Figures do not include board members, managing directors, or apprentices.
+²innogy is integrated into the E.ON hierarchy.
+61,050
+78,523
+1,878
+1,865
+59,172
+76,658
+3,822
+Report of the Supervisory Board
+Strategy and Objectives
+Other Operating Income¹
+Combined Group Management Report
+149
+(6) Revenues
+At €60.9 billion, revenues in 2020 were roughly €20.1 billion
+higher than in the previous year, primarily due to the inclusion
+of the innogy Group for an entire year for the first time. The pre-
+vious year's revenue figure was adjusted due to a change in pre-
+sentation in connection with the application of failed own-use
+accounting (decrease of €200 million). Because of the related
+adjustments to the cost of materials (decrease of €692 million),
+other operating income (decrease of €246 million) and other
+operating expenses (increase of €246 million) there was no over-
+all effect on earnings.
+Revenues recognized in the current reporting period arising
+from performance obligations that have been fully or partially
+settled in prior reporting periods amounted to €0.4 billion. The
+total amount of benefit obligations already contracted but still
+outstanding (excluding expected contract renewals and expected
+new contracts) was €29.4 billion as of December 31, 2020
+(December 31, 2019: €20.6 billion). The majority of these bene-
+fit obligations are expected to be met within the next three
+years. Revenue in the E.ON Group is recognized primarily on an
+over-time basis.
+Revenues are broken down into intragroup and external revenues
+in the segment information (Note 35). They are also broken
+down into key regions and technologies. The overview also shows
+the effect of revenues on operating cash flow before interest
+and taxes.
+(7) Own Work Capitalized
+Own work capitalized amounted to €680 million in 2020
+(2019: €487 million) and resulted primarily from capitalized
+work performed in connection with ongoing and completed
+IT projects and network assets. The increase is primarily due
+to the inclusion of innogy for an entire year for the first time.
+(8) Other Operating Income and Expenses
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+-1,390
+2019
+Amortized cost
+0,7
+24
+3,0
+871
+40,0
+43
+5,4
+Deferred tax assets and liabilities as of December 31, 2020, and
+December 31, 2019, break down as shown in the following table:
+Deferred Tax Assets and Liabilities¹
+€ in millions
+Intangible assets
+Right-of-use assets
+Property, plant and equipment
+Financial assets
+Inventories
+Receivables
+Provisions for pensions and similar obligations
+Miscellaneous provisions
+Liabilities
+15
+-47,4
+-378
+-12,7
+-377
+-47,3
+Tax effects on income from companies accounted for under the equity method
+Tax effects of changes in value and non-recognition of deferred taxes
+Tax effects of other taxes on income
+127
+5,8
+-51
+-6,4
+1,119
+51,3
+Loss carryforwards
+515
+-50
+-2,3
+17
+2,1
+Tax effects of income taxes related to other periods
+Other
+Effective income taxes/tax rate
+¹Adjusted prior-year figures.
+-276
+64,6
+Tax credits
+-1,677
+Subtotal
+196
+270
+34
+33
+1
+406
+1,649
+764
+1,231
+131
+3,109
+3,183
+20
+2,042
+25
+1,878
+107
+2,968
+465
+3,063
+39
+-4,7
+209
+170
+Changes in value
+Deferred taxes (gross)
+Netting
+Deferred taxes (net)
+Current
+¹Adjusted prior-year figures.
+Tax assets
+December 31, 2020
+Tax liabilities
+December 31, 2019
+4,125
+Tax assets
+399
+703
+563
+1,046
+5
+723
+923
+348
+3,956
+Tax liabilities
+-103
+Other
+-17,6
+€ in millions
+2020
+2019
+Domestic income taxes
+137
+320
+Foreign income taxes
+239
+Current taxes
+376
+295
+524
+-445
+-29
+193
+495
+-252
+871
+43
+Income Taxes¹
+(11) Income Taxes
+152
+Notes
+Tax effects of non-deductible expenses and permanent differences
+-658
+Fair value through P&L
+-320
+-939
+-176
+Other interest expenses
+-412
+-562
+Net interest income/loss
+Domestic
+-720
+Financial results
+-702
+-587
+Interest expense was reduced by capitalized interest on debt
+totaling €8 million (2019: €13 million).
+¹Adjusted prior-year figures.
+439
+443
+13
+137
+Interest expenses also include €58 million of negative earnings
+effects (2019: €29 million) from non-controlling interests in
+subsidiaries that have already been fully consolidated and inter-
+ests in fully consolidated partnerships, which are to be recog-
+nized as liabilities in accordance with IAS 32, and with legal
+structures that give their shareholders a statutory right of with-
+drawal combined with an entitlement to a settlement payment.
+The decrease in financial results relative to the previous year is
+primarily attributable to the increased debt resulting from the
+inclusion of innogy and the valuation effects of securities mea-
+sured at fair value reported in the non-operating result, which
+-645
+Foreign
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+Total income taxes
+Tax effects on tax-free income
+2,181
+100,0
+772
+100,0
+676
+31,0
+30,0
+-203
+Changes in tax rate/tax law
+-9,3
+27,8
+-147
+-6,7
+-27
+-3,4
+-287
+-13,1
+Deferred taxes
+-140
+228
+Foreign tax rate differentials
+232
+Income tax assets amounted to €1,037 million (previous year:
+€1,411 million), of which €1,003 million was short-term (previ-
+ous year: €1,377 million), while income tax liabilities amounted
+to €1,209 million (previous year: €1,080 million), of which
+€847 million was short-term (previous year: €787 million).
+These items consist primarily of income taxes for the respective
+current year and for prior-year periods that have not yet been
+definitively examined by the tax authorities.
+¹Adjusted prior-year figures.
+Expected income taxes
+As of December 31, 2020, €13 million (2019: €32 million) in
+deferred tax liabilities were recognized for the differences between
+net assets and the tax bases of subsidiaries and associated
+companies (outside basis differences). Accordingly, deferred tax
+liabilities were not recognized for temporary differences of
+€936 million (2019: €538 million) at subsidiaries and associated
+companies, as E.ON is able to control the timing of their reversal
+and the temporary difference will not reverse in the foreseeable
+future.
+The tax expense in 2020 amounted to €871 million (2019:
+€43 million). In 2020, the tax rate was 40 percent (2019: 6 per-
+cent). The reason for the high tax rate in the reporting period is
+essentially a one-off effect from the valuation of deferred tax
+assets in the first half of 2020, which is partially offset by taxes
+for previous years. In 2019, tax credit effects on non-operating
+earnings and the reversal of tax provisions and liabilities for
+previous years led to a reduction in the tax rate.
+Of the amount reported as current taxes, €276 million is attrib-
+utable to previous years (2019: €309 million).
+Deferred taxes resulted from changes in temporary differ-
+ences affecting net income, which totaled €200 million (2019:
+-€581 million), loss carryforwards of €293 million (2019:
+€314 million) and tax credits amounting to €2 million (2019:
+€15 million). There were also offsetting changes recognized
+directly in equity and disposal effects for deferred taxes from
+discontinued operations totaling -€100 million.
+Changes in tax rates resulted in deferred tax income of
+€147 million in total (2019: tax income of €27 million).
+The base income tax rate of 31 percent (2019: 30 percent)
+applicable in Germany is composed of corporate income tax
+(15 percent), trade tax (15 percent) (2019: 14 percent) and the
+solidarity surcharge (1 percent). The income tax rate of 31 per-
+cent corresponds to the tax rate applicable to E.ON SE for
+2020. The change is based on an adjustment of the trade tax
+rate due to the inclusion of the innogy tax group in the income
+tax group of E.ON SE. The differences from the effective tax
+rate are reconciled as follows:
+Reconciliation to Effective Income Taxes/Tax Rate¹
+Report of the Supervisory Board
+Strategy and Objectives
+Income taxes relating to discontinued operations (see also Note 5)
+are reported in the income statement under "Income from
+discontinued operations." In the fiscal year they amounted to
+tax expense of €19 million (2019: tax expense of €103 million).
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Income/Loss from continuing operations before taxes
+€ in millions
+in %
+€ in millions
+in %
+2020
+153
+2019
+Additions
+493
+19,611
+-153
+19,271
+Goodwill
+2020
+Transfers
+Disposals
+Dec. 31,
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+differences
+Jan. 1, 2020
+€ in millions
+Exchange
+rate
+Changes in
+Acquisition and production costs
+160
+Notes
+Customer relationships and similar items
+scope of
+consolida-
+tion
+2,218
+888
+89
+Advance payments
+2,293
+152
+-57
+72
+14
+-13
+720
+Development expenditures
+3,211
+115
+-132
+510
+36
+-60
+2,742
+Concessions, commercial property rights, licenses, and
+similar rights
+2,286
+1
+-10
+8
+-20
+2,607
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+0.39
+Income/Loss from discontinued operations, net
+540
+1,060
+Income/Loss from continuing operations (attributable to shareholders of E.ON SE)
+-189
+-250
+Less: Non-controlling interests
+729
+1,310
+-40
+Income/Loss from continuing operations
+2020
+€ in millions
+Earnings per Share¹
+159
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+(14) Earnings per Share
+379
+2019
+1,063
+Less: Non-controlling interests
+-3
+0.44
+-0.02
+0.24
+0.41
+The changes in goodwill and intangible assets, in right-of-use
+assets, and in property, plant and equipment, are presented in
+the tables on the following pages:
+(15) Goodwill, Intangible Assets, Right-of-use
+Assets and Property, Plant and Equipment
+The computation of diluted earnings per share is identical to
+that of basic earnings per share because E.ON SE has issued no
+potentially dilutive ordinary shares.
+¹Adjusted prior-year figures.
+Weighted-average number of shares outstanding (in millions)
+from net income/loss
+from discontinued operations
+from continuing operations
+Earnings per share (attributable to shareholders of E.ON SE)
+in €
+1,550
+1,017
+Net income/loss attributable to shareholders of E.ON SE
+1,010
+-43
+Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)
+-53
+0.68
+-8
+12
+199
+scope of
+rate
+consolida-
+Jan. 1, 2019
+differences
+tion
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+Dec. 31,
+2019
+Dec. 31,
+2019
+-1,793
+3
+-1,790
+17,481
+-445
+-5
+-93
+Exchange
+Changes in
+Net carrying
+amounts
+163
+-272
+493
+Growth rate (in %) 3,4
+n.a.
+0.5
+Cost of capital (in %)3,4
+n.a.
+5.9
+Other non-current assets5
+Impairment
+47
+Reversals
+-39
+-2
+-236
+3
+-11
+2Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal groups.
+3Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+"Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
+5Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Accumulated depreciation
+¹Adjusted prior-year figures.
+-1
+-128
+-625
+23
+-363
+106
+-13
+-223
+-1,921
+4,138
+-1
+-78
+1
+-3
+-2
+-100
+627
+-8
+-60
+-3
+-71
+1,789
+-1
+-1
+-2
+-20
+1,926
+-1,448
+-73
+1,593
+-818
+10
+23
+-151
+50
+34
+-14
+-866
+1,876
+306
+-185
+-119
+6
+-44
+-10
+-357
+363
+-3
+3
+-2
+-71
+-5
+8
+6,718
+88
+94
+-57
+39
+3,839
+Technical equipment, plant and machinery
+40,197
+-76
+13,829
+1,727
+-325
+422
+55,774
+Other equipment, fixtures, furniture and office equipment
+835
+2
+295
+116
+-38
+24
+1,234
+Advance payments and construction in
+983
+2,780
+Buildings
+1,111
+Fleet, office and business equipment
+105
+26
+42
+-6
+1
+168
+Right-of-use assets²
+870
+7
+progress
+1,669
+-26
+-4
+2,802
+Real estate and leasehold rights
+539
+-1
+579
+14
+-32
+12
+286
+1,921
+-8
+875
+Other
+Net carrying amount of goodwill as of January 1, 2019
+608
+90
+56
+183
+878
+60
+Changes resulting from acquisitions and disposals
+7,271
+lands/
+Belgium
+311
+960
+6
+705
+Impairment charges
+Other changes²
+-2
+4
+88
+Net carrying amount of goodwill as of December 31, 2019
+7,879
+6,535
+371
+UK
+ECE/Turkey
+1,141
+-30
+-1,274
+2,625
+Property, plant and equipment³
+46,272
+-83
+16,561
+3,092
+-482
+Germany
+-777
+¹Adjusted prior-year figures.
+2New account due to IFRS 16 (see Note 33).
+³The first-time application of IFRS 16 resulted in adjustments to the initial inventories.
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2019¹
+Energy Networks
+Customer Solutions
+Nether-
+€ in millions
+Germany
+Sweden
+64,583
+37
+-1
+-3
+€ in millions
+E.ON Group
+Associates¹
+December 31, 2020
+Joint
+ventures¹
+December 31, 2019
+E.ON Group
+Associates¹
+Joint
+ventures¹
+Companies accounted for under the equity method
+4,383
+2,651
+1,732
+5,232
+3,280
+1,952
+Equity investments
+1,883
+698
+181
+1,730
+556
+168
+Companies Accounted for under the Equity Method and Other Financial Assets
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+(16) Companies Accounted for under the Equity
+Method and Other Financial Assets
+Reversals of impairments on property, plant and equipment
+recognized in previous years amounted to around €6 million in
+2020, significantly influenced by an increase in the value of
+assets in the Hungarian network sector due to updated valua-
+tion assumptions.
+Impairments of property, plant and equipment in 2019 totaled
+around €84 million, of which around €38 million were in the
+German network business, primarily in connection with the
+decommissioning of a gas storage facility, and €38 million at
+innogy, primarily due to the optimization and restructuring
+of the joint UK business of innogy and E.ON. In this connection,
+an impairment loss was recognized for several innogy buildings
+in the UK.
+In 2019, approximately €223 million of impairments were rec-
+ognized on intangible assets. The largest effect in terms of
+amount (€159 million) arose at innogy, again mainly from busi-
+ness in the UK for the reasons outlined above. Impairments
+were recognized in particular for IT infrastructure in the private
+customer segment. Wind farms in the UK were also impacted,
+with around €55 million. Impairments were recognized primarily
+on IT projects that are currently being discontinued because of
+a management decision, with the result that they are no longer
+expected to generate any economic advantages.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+167
+In fiscal year 2019, a total of €23 million in impairments was
+charged to right-of-use assets. About €19 million again resulted
+from the restructuring at innogy in the UK.
+Reversals of impairments on property, plant and equipment and
+intangible assets recognized in previous years amounted to
+€3 million in 2019, significantly influenced by the positive out-
+come of litigation in the UK.
+Intangible Assets
+155
+Most of the changes presented below are attributable to the
+fact that the innogy activities were only included on a pro rata
+basis in the 2019 fiscal year (from September 18, 2019, the
+date on which control was achieved), while in 2020 they will be
+included for a full twelve months.
+As in the prior year, no reversals of impairments on intangible
+assets were recognized in the reporting year.
+The closing balance of intangible assets not subject to amorti-
+zation as of December 31, 2020, amounted to €301 million
+(2019: €299 million).
+€62 million in research and development costs as defined by
+IAS 38 were expensed in 2020 (2019: €68 million).
+Right-of-use Assets
+In 2020, the Company recorded an amortization expense of
+€374 million (2019: €186 million). The majority of the changes
+are attributable to the fact that the innogy activities were only
+included on a pro rata basis in the 2019 fiscal year (from
+September 18, 2019, the date on which control was achieved),
+while in 2020 they will be included for a full twelve months.
+Impairments on right-of-use assets amounted to €2 million
+(2019: €23 million).
+Property, Plant and Equipment
+Borrowing costs in the amount of €26 million were capitalized
+in 2020 (2019: €13 million) as part of the historical cost of
+property, plant and equipment.
+Depreciation amounted to €2,381 million in 2020 (2019:
+€1,606 million).
+In addition, write-downs on property, plant and equipment in the
+amount of €171 million (2019: €84 million) were made in the
+year under review. Reversals of impairments on property, plant
+and equipment in the amount of €6 million (2019: €3 million)
+were recognized in the reporting year. Differences in the length
+of time innogy's activities were included were once again the
+main reason for the significant increase in the figures presented.
+Notes
+In 2020, the Company recorded an amortization expense of
+€931 million (2019: €363 million). Impairment charges on
+intangible assets amounted to €231 million (2019: €223 million).
+Non-current securities
+1,887
+2,353
+2020
+2019
+Proportional share of net income from continuing operations
+126
+88
+169
+113
+295
+201
+Proportional share of other comprehensive income
+2019
+-3
+1
+-9
+1
+Proportional share of total comprehensive income
+123
+88
+163
+114
+286
+202
+-6
+In fiscal year 2020, a total of €2 million in impairments was
+charged to right-of-use assets.
+2020
+2020
+Total
+8,153
+3,349
+1,913
+9,315
+3,836
+2,107
+¹The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+Companies accounted for under the equity method consist
+solely of associates and joint ventures.
+The €849 million decrease in the carrying amounts of companies
+measured at equity compared with December 31, 2019, was
+mainly due to the reclassification of the shares in Rampion
+Renewables Ltd. to assets held for sale and negative exchange
+rate effects in Turkey.
+2019
+The amount shown for non-current securities relates primarily
+to fixed-income securities.
+Impairments on other financial assets amounted to €92 million
+(2019: €15 million). The carrying amount of other financial
+assets with impairment losses was €13 million as of the end of
+the fiscal year (2019: €22 million).
+Shares in Companies Accounted for under the
+Equity Method
+The carrying amounts of the immaterial associates accounted
+for under the equity method totaled €1,575 million (2019:
+€1,905 million), and those of the joint ventures totaled
+€946 million (2019: €896 million).
+Investment income generated from companies accounted for
+under the equity method amounted to €428 million in 2020
+(2019: €330 million). Higher distributions, in particular due to
+the first-time inclusion of the innogy companies for a full year,
+were partially offset by the absence of the Nord Stream AG
+distribution.
+The following table summarizes significant line items of the aggre-
+gated statements of comprehensive income of the associates and
+joint ventures that are accounted for under the equity method:
+Summarized Financial Information for Individually Non-material Associates and Joint Ventures Accounted for
+under the Equity Method
+Associates
+Joint ventures
+Total
+€ in millions
+In 2020, impairment charges on companies accounted for under
+the equity method totaled €27 million (2019: €3 million).
+-2
+Approximately €231 million of impairments were recognized
+on intangible assets in fiscal year 2020. Of this amount, around
+€106 million relates to the Customer Solutions UK segment, in
+particular to billing software which will no longer be used in the
+future. Impairment losses of around €58 million were recognized
+on Essent's Belgian sales business, which will be sold to the
+Belgian energy company Luminus. Following the signing at the
+beginning of 2021, the transaction is still subject to approval
+by the European Commission. In this context, non-current assets
+were reduced on a pro rata basis, resulting in an impairment
+being recognized for the carrying amount of customer lists in
+particular. In the Customer Solutions Germany segment, impair-
+ment losses of around €38 million were recognized, mainly
+(€25 million) due to the aforementioned impairment loss on a
+cash-generating unit in the Energy Solutions business and the
+associated impairment of customer lists. In addition, impairment
+losses totaling €24 million were recognized on IT licenses at
+Corporate Headquarters. The two largest individual items related
+to fully amortized licenses amounting to just under €10 million
+and capitalized project costs of around €12 million in connection
+with software rollouts (the carrying amounts of the underlying
+licenses themselves remained unchanged).
+Notes
+-102
+25
+20
+-1
+-1,727
+2,112
+-26,119
+54
+402
+-1,405
+210
+589
+-55
+-26,324
+29,450
+-597
+-2
+-99
+34
+-6
+-10
+37
+4
+-1,710
+1,057
+34
+1
+2
+-45
+2
+-1
+-3
+-44
+124
+-2
+-680
+-6
+3
+-6
+-23
+-220
+2,582
+-58
+1
+5
+-2
+-54
+-186
+554
+-42
+-2
+-42
+-330
+3
+Notes
+164
+Goodwill and Non-current Assets
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables on pages 160 through 163.
+Impairments
+IFRS 3 prohibits the amortization of goodwill. Instead, goodwill
+is tested for impairment at least annually at the level of the cash-
+generating units. Goodwill must also be tested for impairment
+at the level of individual cash-generating units as necessary
+between these annual tests if events or changes in circumstances
+indicate that the recoverable amount of a particular cash-gen-
+erating unit might be impaired. Intangible assets subject to
+amortization and property, plant and equipment and investments
+subject to the application of the equity method (IAS 28) must
+generally be tested for impairment whenever there are particular
+events or external circumstances indicating the possibility of
+impairment.
+To perform the impairment tests, the Company first determines
+the fair values less costs to sell of its cash-generating units.
+Because there were no binding sales transactions or market prices
+for the respective cash-generating units in 2020, fair values were
+calculated based on discounted cash flow methods.
+17,481
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for impair-
+ment-testing purposes are generally based on the three planning
+years of the medium-term plan plus two additional detailed
+planning years. In certain justified exceptional cases, a longer
+detailed planning period is used as the calculation basis. The cash
+flow assumptions extending beyond the detailed planning period
+are determined using sustainable, currency-specific growth
+rates based on the analysis of past years and predictions for the
+future. In 2020, the sustainable, currency-specific inflation rate
+used for the euro area was 0.5 percent (2019: 0.5 percent) unless
+a lower growth rate was justified for that cash-generating unit.
+The interest rates after taxes used for discounting cash flows
+in the annual impairment test are calculated using market data
+for each cash-generating unit, and as of December 31, 2020,
+ranged between 3.0 and 7.2 percent after taxes (2019: 3.3 and
+7.1 percent).
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+165
+growth and the cost of capital. These assumptions are based on
+external market data from established providers and on internal
+estimates. They also appropriately take into account climate-
+related impacts on market conditions and macroeconomic link-
+ages. For example, impacts of climate targets on CO2 prices and
+changing weather conditions (temperature, wind, etc.) are included.
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and equip-
+ment and investments subject to the application of the equity
+method (IAS 28), and of groups of these assets. If the goodwill
+of a cash-generating unit is combined with assets or groups of
+assets for impairment testing, the assets must be tested first.
+As in 2019, the goodwill impairment testing performed in 2020
+resulted in the recognition of no impairment charges under
+IAS 36. However, an impairment loss was recognized on the
+portion of goodwill of the Hungarian operations classified as
+held for sale under IFRS 5. This required impairment amounted
+to approximately €73 million. It is due to the fact that the
+expected sales price is below the carrying amount.
+The tested goodwill of all cash-generating units whose respec-
+tive goodwill as of the balance sheet date is material in relation
+to the total carrying amount of all goodwill shows a surplus of
+recoverable amounts over the respective carrying amounts and,
+therefore, based on current assessment of the economic situa-
+tion, only a significant change in the material valuation parame-
+ters would necessitate the recognition of goodwill impairment.
+Impairments of property, plant and equipment in 2020 totaled
+around €171 million, of which around €138 million were in
+the Hungarian network business, which is classified as held for
+sale under IFRS 5. These impairments became necessary because
+the expected disposal price does not fully reflect the carrying
+amount. Accordingly, the non-current assets of the unit were
+reduced on a pro rata basis in line with their relative carrying
+amounts. Around €13 million in impairment losses were recog-
+nized in the German Customer Solutions segment on a cash-
+generating unit in the B2B heating business. This also affected
+technical equipment and machinery due to impairment losses
+recognized in line with their carrying amounts since the outlook
+has deteriorated. In the German network business, an impair-
+ment loss of around €11 million was recognized on property,
+plant and equipment. This was largely due to fully impaired
+project costs for smart meters, which were capitalized as assets
+under construction but later no longer priced in due to the late
+market declaration.
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective forecasts
+for commodity market prices, future electricity and gas prices
+in the wholesale and retail markets, E.ON's investment activity,
+changes in the regulatory framework, as well as for rates of
+166
+-182
+-179
+9
+-16
+3
+-48
+2,577
+-28,526
+56
+438
+-1,606
+274
+15,609
+612
+3
+-28,833
+35,750
+Non-Core Business
+PreussenElektra
+Generation Turkey
+Corporate Functions/Other
+E.ON Group
+179
+2,054
+-84
+1
+31
+5
+92
+760
+6,718
+1,823
+78
+477
+Growth rate (in %)2,3
+n.a.
+Cost of capital (in %) 2,3
+0.5
+4.7
+n.a.
+Other non-current assets4
+Impairment
+-12
+Reversals
+-139
+2
+-53
+-112
+-59
+1
+-5
+2
+7,879
+Net carrying amount of goodwill as of December 31, 2020
+-20
+-103
+Net carrying amount of goodwill as of January 1, 2020
+Germany
+7,879
+Sweden
+ECE/Turkey
+Germany
+UK
+Belgium
+Other
+88
+56
+¹Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal groups.
+2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+³Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
+6,718
+6
+808
+Changes resulting from acquisitions and disposals
+804
+72
+-311
+Impairment charges
+Other changes¹
+4
+-100
+1,926
+4Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+9
+10
+-279
+10
+-70
+-945
+1,341
+-866
+14
+5
+-625
+-521
+-7
+-59
+-1,328
+1,883
+-357
+8
+-134
+52
+-47
+-95
+106
+€ in millions
+17,827
+6
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+161
+Net carrying
+Accumulated depreciation
+amounts
+Changes in
+Exchange
+scope of
+rate
+consolida-
+-1,784
+Jan. 1, 2020
+tion
+Additions
+Disposals
+Transfers
+Impairment
+Reversals
+Dec. 31,
+2020
+Dec. 31,
+2020
+-1,790
+differences
+-573
+Nether-
+lands/
+Energy Networks
+10
+7
+17
+Technical equipment and machine
+37
+-1
+1
+-7
+30
+Fleet, office and business equipment
+168
+-9
+3
+52
+-36
+178
+Right-of-use assets
+2,802
+-19
+19
+415
+Storage, e-charging and production capacities
+2,102
+-11
+-14
+-15
+-222
+334
+Intangible assets
+6,059
+-101
+140
+789
+-214
+46
+-100
+6,719
+727
+-11
+4
+102
+-43
+779
+Networks
+1,860
+6
+260
+Land and buildings
+-11
+3,106
+Real estate and leasehold rights
+99
+134
+-56
+84
+1,483
+Advance payments and construction in
+progress
+2,625
+-3
+38
+-12
+1,381
+-1,465
+Property, plant and equipment
+64,583
+-283
+379
+3,749
+-727
+-32
+2,569
+67,669
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2020
+-7
+Customer Solutions
+1,234
+58,485
+1,111
+1
+11
+17
+-17
+29
+1,152
+Buildings
+3,839
+-57
+Other equipment, fixtures, furniture and office equipment
+-9
+-22
+129
+3,980
+Technical equipment, plant and machinery
+55,774
+-212
+240
+2,117
+-625
+1,191
+100
+1
+315
+2
+Jan. 1, 2019
+differences
+scope of
+consolida-
+tion
+Dec. 31,
+Additions
+Disposals
+Transfers
+2019
+Goodwill
+3,847
+99
+15,325
+19,271
+Customer relationships and similar items
+541
+12
+1,750
+1
+-47
+-39
+2,218
+€ in millions
+Exchange
+rate
+Changes in
+Acquisition and production costs
+100
+-2,381
+405
+5
+-171
+6
+-30,746
+36,923
+Non-Core Business
+PreussenElektra
+Concessions, commercial property rights, licenses, and
+similar rights
+Generation Turkey
+E.ON Group
+17,481
+565
+-219
+17,827
+-24
+-404
+1
+6
+Notes
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment¹
+162
+Corporate Functions/Other
+2,303
+-16
+446
+6,059
+Land and buildings
+361
+5
+282
+90
+-14
+3
+727
+Networks
+-372
+387
+154
+-3
+-8
+1,860
+Storage, e-charging and production capacities
+12
+1
+-3
+10
+Technical equipment and machine
+1,330
+123
+-884
+2,202
+1,204
+-816
+-379
+2,742
+Development expenditures
+396
+13
+66
+-14
+259
+1,489
+720
+370
+5
+6
+218
+-7
+-213
+379
+Intangible assets
+3,610
+14
+Advance payments
+-73
+-28,833
+-54
+-207
+4
+11
+-274
+1,828
+-2
+1
+-1
+-2
+15
+-3
+-4
+1
+-6
+24
+-44
+2
+-2
+-53
+20
+1
+-10
+-1
+-71
+575
+-3
+3
+7
+53
+-7
+-18
+316
+-1,921
+33
+-931
+-1
+175
+-231
+-2,864
+3,855
+-100
+1
+-3
+-109
+8
+-1
+-204
+-1
+2,515
+-77
+-220
+99
+-2,112
+345
+9
+-154
+4
+-28,034
+30,451
+-680
+7
+99
+-9
+49
+-2
+-2
+-783
+700
+-48
+2
+1
+-11
+2
+-146
+-26,324
+2,163
+-1,817
+3
+-15
+-374
+33
+12
+-2
+-563
+2,543
+-54
+-1
+-2
+4
+-5
+-58
+1,094
+-1,727
+18
+10
+-121
+5
+2
+-4
+101
+1
+Restricted cash and cash equivalents
+1,197
+39.90
+47
+1
+1
+-249
+-129
+Remeasurements of
+defined benefit plans
+Currency translation
+adjustments
+securities
+Cash flow hedges
+Available-for-sale
+176
+Balance as of December 31, 2020
+Changes
+28
+Balance as of December 31, 2019
+Balance as of January 1, 2019
+€ in millions
+Share of OCI Attributable to Non-controlling Interests
+The table below illustrates the share of OCI that is attributable
+to non-controlling interests:
+Notes
+¹Adjusted prior-year figures.
+4,149
+4,130
+E.ON Group
+485
+284
+Corporate Functions/Other
+-57
+Changes
+1
+1
+-82
+317
+282
+306
+Non-controlling interests in equity
+2019
+2020
+2019
+2020
+2019
+2020
+2019
+2020
+€ in millions
+Avacon AG1
+E.DIS AG¹
+Delgaz Grid S.A.
+Netz AG
+Schleswig-Holstein
+Subsidiaries with Material Non-controlling Interests-Balance Sheet Data as of December 31
+flow items. The list of shareholdings pursuant to Section 313 (2)
+HGB (see Note 38) contains information on the registered office
+of the company and disclosures on equity interests.
+In compliance with IFRS 12, the following tables include sub-
+sidiaries with significant non-controlling interests and provide an
+overview of significant items on the aggregated balance sheet
+and on the aggregated income statement, and significant cash
+-400
+-90
+11
+-179
+-8
+10
+-1
+-221
+-34
+313
+Non-Core Business
+101
+-1
+2019
+-1,552
+2020
+-1,921
+Balance as of December 31 (before taxes)
+Taxes
+€ in millions
+Share of OCI Attributable to Companies
+Accounted for under the Equity Method
+The table at right illustrates the share of OCI attributable to
+companies accounted for under the equity method.
+The change in other comprehensive income is primarily the
+result of exchange rate differences recognized on the balance
+sheet.
+(23) Changes in Other Comprehensive Income
+As of December 31, 2020, these IFRS retained earnings totaled
+-€5,257 million (2019: -€1,927 million). Of the decrease,
+€2,405 million (2019: +€133 million) is primarily attributable
+to equity transactions with non-controlling interests. The dif-
+ference between the consideration and the carrying amount of
+the non-controlling interests in such transactions is recognized
+directly in retained earnings. In the past fiscal year, -€2,375 mil-
+lion of this relates to the share increase as part of the innogy
+squeeze-out and subsequent purchase price adjustments for a
+share addition in Hungary (-€35 million, 2019: -€255 million).
+A proposal to distribute a cash dividend for 2020 of €0.47 per
+share will be submitted to the Annual Shareholders Meeting. For
+2019, shareholders at the May 28, 2020, Annual Shareholders
+Meeting voted to distribute a dividend of €0.46 for each dividend-
+paying ordinary share. Based on a €0.47 dividend, the total profit
+distribution is €1,225 million (2019: €1,199 million).
+The amount of retained earnings available for distribution is
+€2,064 million (2019: €2,086 million).
+175
+Balance as of December 31 (after taxes)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+¹Adjusted prior-year figures.
+-1,927
+-5,257
+Total
+-1,972
+-5,302
+Other retained earnings
+45
+45
+Legal reserves
+2020
+€ in millions
+Combined Group Management Report
+-1,921
+-1,553
+(24) Non-controlling Interests
+Other
+-399
+2
+Netherlands/Belgium
+-109
+2
+UK
+116
+175
+Germany
+-416
+280
+Customer Solutions
+410
+548
+ECE/Turkey
+Sweden
+3,727
+3,052
+4,137
+3,600
+2019
+2020
+Energy Networks
+€ in millions
+December 31,
+Non-controlling Interests¹
+are shown in the following table:
+Non-controlling interests by segment as of the dates indicated
+-24
+531
+523
+541
+6
+6
+379
+403
+886
+933
+54
+31
+36
+38
+10
+10
+26
+16
+26
+Net income/loss
+Sales
+non-controlling interests
+Share of earnings attributable to
+Avacon AG1
+2019
+2020
+2019
+2020
+2019
+2020
+2019
+2020
+€ in millions
+Comprehensive income
+11
+50
+51
+United Kingdom
+Germany
+Present value of all defined benefit obligations
+€ in millions
+December 31,
+2019
+2020
+177
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+Provisions for Pensions and Similar Obligations
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €30.4 billion,
+were covered by plan assets having a fair value of €22.4 billion
+as of December 31, 2020. This corresponds to a funded status
+of 74 percent.
+(25) Provisions for Pensions and Similar
+Obligations
+corporate or contractual provisions.
+There are no major restrictions beyond those under customary
+¹Holding Companies without operational business.
+149
+105
+109
+112
+5
+11
+34
+10
+148
+107
+110
+113
+24
+24
+E.DIS AG¹
+Delgaz Grid S.A.
+Netz AG
+Schleswig-Holstein
+1,081
+1,133
+1,583
+1,694
+Non-current assets
+-63
+-44
+44
+19
+105
+111
+205
+357
+Operating cash flow
+50
+50
+30
+30
+Dividends paid out to non-controlling interests
+38.5
+38.5
+33
+33
+43.5
+43.5
+50.5
+52.1
+Non-controlling interests in equity (in %)
+562
+1,609
+As of December 31, 2020, these German-GAAP retained earnings
+totaled €2,254 million (2019: €2,254 million). Of this amount,
+legal reserves of €45 million (2019: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG.
+1,622
+1,649
+Subsidiaries with Material Non-controlling Interests-Earnings Data
+¹Holding Companies without operational business.
+91
+290
+68
+91
+120
+116
+739
+451
+Current liabilities
+82
+67
+11
+17
+433
+479
+503
+731
+Non-current liabilities
+66
+103
+79
+142
+97
+98
+313
+150
+Current assets
+1,768
+Other countries
+Under German securities law, E.ON SE shareholders may receive
+distributions from the balance sheet profit of E.ON SE reported
+as available for distribution in accordance with the German
+Commercial Code.
+Retained Earnings¹
+Non-current assets¹
+3,369
+3,419
+672
+1,438
+1,364
+1,940
+1,882
+Current assets
+453
+577
+31
+143
+2019
+154
+230
+Current liabilities (including provisions)
+524
+563
+134
+126
+491
+542
+Non-current liabilities (including provisions)
+1,437
+1,410
+1,041
+970
+319
+2020
+2019
+2020
+4
+2
+loss from continuing operations
+Non-controlling interests in the net income/
+31
+36
+6
+14
+-18
+37
+29
+-10
+Net income/loss from continuing operations
+1,111
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+169
+The tables below show significant line items of the aggregated
+balance sheets and of the aggregated statements of comprehen-
+sive income of the material companies accounted for under the
+equity method. The material associates in the E.ON Group are
+RheinEnergie AG, Dortmunder Energie- und Wasserversorgung
+GmbH, GASAG Berliner Gaswerke AG and, until the end of
+December 2020, Rampion Renewables Limited, which was
+reclassified as assets held for sale due to the decision to sell it
+to RWE.
+The Group adjustments shown in the tables mainly relate to
+goodwill determined as part of initial recognition, temporary
+differences, changes in ownership interests, exchange-rate
+effects and effects from the elimination of intragroup profits.
+Material Associates-Balance Sheet Data as of December 31
+RheinEnergie AG
+€ in millions
+2020
+2019
+2020
+Rampion
+Renewables Ltd.²
+2019
+Dortmunder Energie- und
+Wasserversorgung GmbH
+GASAG Berliner
+Gaswerke AG
+1,094
+Net income from discontinued operations
+897
+1,861
+Carrying amount of equity investment
+539
+571
+462
+217
+226
+321
+342
+¹Undisclosed accruals/provisions from acquisitions are recognized in assets.
+2As of December 31, 2020, the investment is reported as an asset held for sale.
+Material Associates-Earnings Data
+RheinEnergie AG
+€ in millions
+2020
+94
+Sales
+2019
+694
+2020
+Rampion
+Renewables Ltd.
+2019
+Dortmunder Energie- und
+Wasserversorgung GmbH
+GASAG Berliner
+Gaswerke AG
+2020
+2019
+2020
+2019
+885
+239
+1,209
+1,253
+2,479
+73
+58
+55
+2,023
+703
+406
+422
+674
+674
+Non controlling interests
+4
+24
+Ownership interest (in %)
+20.00
+20.00
+39.93
+39.93
+39.90
+36.85
+36.85
+Proportional share of equity
+372
+405
+281
+162
+168
+248
+248
+Consolidation adjustments
+166
+166
+181
+Equity
+1
+Dividend paid out
+148
+indirect
+Dec. 8, 2020
+Achieved
+15%
+Dec. 10, 2020
+RWE Aktiengesellschaft, Essen,
+Germany4
+3.02 79,741,4421
+4.92 130,004,5353
+indirect
+indirect
+Jan. 12, 2021
+Jan. 5, 2021
+Over
+Under
+5%
+Jan. 8, 20212
+BlackRock Inc., Wilmington, USA
+15.00 396,197,820
+3%
+DWS Investment GmbH,
+Frankfurt am Main, Germany
+Absolute
+Voting rights
+Percentages
+Allocation
+Gained voting
+rights on
+or under
+threshold
+Threshold
+Date of notice
+Reporting entity
+Achieved, over
+174
+Information on Stockholders of E.ON SE
+Jan. 15, 2021
+The Capital Group Companies
+Inc., Los Angeles, USA5
+Mar. 11, 2021
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+(22) Retained Earnings
+Additional paid-in capital was unchanged in the fiscal year and
+amounts to €13,368 million, unchanged from December 31,
+2019.
+(21) Additional Paid-in Capital
+¹Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 2 WPHG.
+2Voluntary Group notification with threshold impact only at subsidiary level; under 5% threshold per notification of January 7, 2021, with threshold impact on January 4, 2021.
+³Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 1 and 2 WpHG.
+"Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH.
+5Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: Capital Income Builder.
+*Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 2 WpHG.
+129,538,084
+4.90
+132,657,9366
+5.02
+direct
+Apr. 1, 2020
+Under
+5%
+Apr. 3, 2020
+Wilmington, USA
+Capital Income Builder,
+direct/indirect
+Jun. 5, 2020
+Over
+5%
+Jun. 9, 2020
+Board, Toronto, Canada
+Canada Pension Plan Investment
+127,283,218
+4.82
+indirect
+Mar. 8, 2021
+Under
+5%
+The following notices pursuant to Section 33 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+Voting Rights
+Notes
+The Conditional Capital 2020 was not used.
+39.90
+39.931
+39.93
+20.00
+20.00
+Ownership interest (in %)
+-25
+82
+6
+-3
+30
+-24
+48
+-17
+Total comprehensive income
+-56
+46
+-17
+48
+-61
+19
+-7
+Other comprehensive income
+29
+51
+12
+30
+85
+42
+39.90
+December 31,
+2019
+36.85
+Proportional share of total comprehensive
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise
+by holders of option or conversion rights, and those arising from
+compliance with the mandatory conversion of bonds with con-
+version or option rights, profit participation rights or profit par-
+ticipating bonds that have been issued or guaranteed by E.ON SE
+or a Group company of E.ON SE as defined by Section 18 AktG
+under the authorization approved by the Annual Shareholders
+Meeting of May 28, 2020, under agenda item 9, and to the
+extent that no cash settlement has been granted in lieu of con-
+version or exercise of an option or the Company exercises its
+right to grant shares in the Company in whole or in part in lieu
+of payment of the cash amount due.
+The conditional capital increase will be used to grant registered
+no-par-value shares to the holders of convertible bonds or bonds
+with warrants, profit participation rights or income bonds (or
+combinations of these instruments), in each case with option
+rights, conversion rights, option obligations and/or conversion
+obligations, which are issued by the Company or a Group com-
+pany of the Company as defined by Section 18 of the German
+Stock Corporation Act (AktG), under the authorization approved
+by the Annual Shareholders Meeting on May 28, 2020, under
+agenda item 9, through May 27, 2025. The new shares will be
+issued at the conversion or option price to be determined in
+accordance with the authorization resolution.
+At the Annual Shareholders Meeting of May 28, 2020, share-
+holders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in
+the amount of up to €264 million (Conditional Capital 2020).
+The Conditional Capital 2017 (of up to €175 million) resolved
+by the Annual Shareholders Meeting on May 10, 2017, under
+what was then agenda item 9, was revoked upon registration of
+the resolution on June 17, 2020.
+Subject to the Supervisory Board's approval, the Management
+Board is authorized to exclude shareholders' subscription rights.
+Conditional Capital
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 28, 2020, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase
+until May 27, 2025, the Company's capital stock by a total of up
+to €528,000,000 through one or more issuances of new regis-
+tered no-par-value shares against contributions in cash and/or
+in kind (authorized capital pursuant to Sections 202 et seq. AktG,
+Authorized Capital 2020). The authorization of the Management
+Board contained in Article 3 (5) of the Articles of Association to
+increase the share capital by up to €19,780,200.00 in the period
+up to May 9, 2022, with the approval of the Supervisory Board
+(Authorized Capital 2017), is revoked.
+Authorized Capital
+Neither a scrip dividend nor an employee stock purchase
+program was offered in the 2020 fiscal year.
+The Company has further been authorized by the Annual Share-
+holders Meeting of May 28, 2020, to buy shares using deriva-
+tives (put or call options, or a combination of both). When deriv-
+atives in the form of put or call options, or a combination of
+both, are used to acquire shares, the option transactions must be
+conducted with a financial institution or a company operating in
+accordance with Section 53 (1) sentence 1 or Section 53b (1)
+sentence 1 or (7) of the German Banking Act (KWG) or at market
+terms on the stock exchange. No shares were acquired in 2019
+using this purchase model.
+Pursuant to a resolution by the Annual Shareholders Meeting
+of May 28, 2020, the Management Board is authorized to pur-
+chase own shares until May 27, 2025. The shares purchased,
+combined with other treasury shares in the possession of the
+Company, or attributable to the Company pursuant to Sections
+71a et seq. AktG, may at no time exceed 10 percent of its capi-
+tal stock. The Management Board was authorized at the afore-
+mentioned Annual Shareholders Meeting to cancel any shares
+thus acquired without requiring a separate shareholder resolu-
+tion for the cancellation or its implementation. The authorization
+granted by the Annual Shareholders Meeting on May 10, 2017,
+under agenda item 10, to acquire and use own shares is revoked.
+The total number of outstanding shares as of December 31, 2020,
+was 2,607,369,233 (December 31, 2019: 2,607,369,233).
+As of December 31, 2020, E.ON SE held a total of 33,949,567
+treasury shares (December 31, 2019: 33,949,567) having a
+book value of €1,126 million (equivalent to approximately
+1.29 percent or €33,949,567 of the capital stock).
+173
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+into a European Company (SE), through a capital increase carried
+out on March 20, 2017, partially using the Authorized Capital
+2012, which expired on May 2, 2017, and through a capital
+increase registered in the commercial register of the Company
+on September 19, 2019, with majority use of the Authorized
+Capital 2017.
+The capital stock is subdivided into 2,641,318,800 registered
+shares with no par value (no-par-value shares) and amounts to
+€2,641,318,800 (2019: €2,641,318,800). The capital stock of
+the Company was provided by way of conversion of E.ON AG
+(20) Capital Stock
+3,602
+4,795
+Total
+1,894
+2,668
+Cash and cash equivalents
+511
+1,016
+12
+-10
+10
+-3
+income after taxes
+36.85
+Total
+Germany
+Germany
+57
+43
+Proportional share of net income after taxes
+-16
+-164
+12
+-75
+Proportional share of total comprehensive income after taxes
+50.00
+50.00
+40.00
+22
+40.00
+-33
+-327
+31
+-188
+Total comprehensive income
+-170
+-372
+-113
+-296
+Other comprehensive income
+71
+Ownership interest (in %)
+69
+Consolidation adjustments
+Equity-method earnings
+Write-downs totaled €37 million in 2020 (2019: €5 million).
+Reversals of write-downs amounted to €12 million in 2020
+(2019: €17 million).
+for resale is determined based on the average cost method.
+The cost of raw materials, finished products and goods purchased
+2019
+December 31,
+€ in millions
+Inventories
+The following table provides a breakdown of inventories as of
+the dates indicated:
+(17) Inventories
+171
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+Of investments in associates, the shareholdings in companies
+with a carrying amount of €137 million (2019: €573 million)
+are restricted because it was pledged as collateral for financing
+as of the balance sheet date.
+As of December 31, 2020, the investment in Enerjisa Enerji A.Ş. is
+marketable. The pro rata market value amounted to €649 million
+as of December 31, 2020 (2019: €522 million). The carrying
+amount is €326 million as of December 31, 2020.
+The material associates and the material joint ventures are active
+in diverse areas of the gas and electricity industries. Disclosures
+of company names, registered offices and equity interests
+as required by IFRS 12 for material joint arrangements and
+associates can be found in the list of shareholdings pursuant
+to Section 313 (2) HGB (see Note 38).
+74
+30
+60
+51
+5
+8
+3
+8
+78
+maturity greater than 3 months
+-16
+-54
+618
+455
+438
+331
+40
+29
+12
+8
+578
+426
+426
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+323
+50.00
+40.00
+40.00
+1,156
+851
+1,065
+807
+525
+850
+815
+319
+50.00
+€ in millions
+2020
+2019
+-36
+Dividend paid out
+Income taxes
+-51
+-29
+-250
+-127
+Interest income/expense
+-106
+-115
+-67
+-59
+Write-downs
+137
+45
+143
+108
+981
+1,025
+2,910
+2,387
+Net income/loss from continuing operations
+Sales
+2019
+2020
+-5
+187
+Current securities with an original
+1,111
+377
+440
+379
+Financial receivables and other financial assets
+445
+622
+490
+699
+Trade receivables
+7,714
+8,364
+401
+Receivables from derivative financial instruments
+2,322
+907
+2,378
+Contract assets
+26
+5
+16
+8
+Other assets
+67
+350
+955
+Other financial receivables and financial assets
+320
+50
+The change in inventories compared to December 31, 2019,
+is primarily due to the decrease in raw materials and supplies.
+2020
+Raw materials and supplies
+594
+670
+No inventories have been pledged as collateral.
+Goods purchased for resale
+140
+199
+Work in progress and finished products
+Total
+397
+383
+1,131
+1,252
+(18) Receivables and Other Assets
+The following table lists receivables and other assets by
+remaining time to maturity as of the dates indicated:
+Receivables and Other Assets¹
+€ in millions
+Current
+December 31, 2020
+Non-current
+Current
+December 31, 2019
+Non-current
+Receivables from finance leases²
+44
+245
+14
+1,197
+372
+2,763
+2019
+24
+10
+31
+24
+2020
+2019
+Amortization and impairment
+62
+176
+Balance as of December 31
+2020
+417
+In addition, the E.ON Group had no contingent assets as of
+December 31, 2020, as in the prior year.
+(19) Liquid Funds
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+Liquid Funds
+In 2020, there was €40 million in restricted cash (2019:
+€49 million) with a maturity greater than three months.
+Cash and cash equivalents include €2,667 million (2019:
+€1,880 million) in checks, cash on hand and balances at financial
+institutions with an original maturity of less than three months,
+to the extent that they are not restricted.
+December 31,
+€ in millions
+2020
+2019
+Securities and fixed-term deposits
+386
+Balance as of December 31
+€ in millions
+Other Assets
+567
+4,906
+834
+Trade receivables and other operating assets
+Total
+¹Adjusted prior-year figures.
+2See also Note 33.
+11,525
+3,244
+11,970
+3,866
+14,207
+14,697
+3,592
+4,291
+Receivables within the scope of IFRS 15 primarily consist of
+trade receivables. Impairments on receivables within the scope
+of IFRS 15 totaled €0.3 billion in 2020 (2019: €0.3 billion).
+As of December 31, 2020, other financial assets include
+receivables from other owners of jointly owned power plants
+of €69 million (2019: €74 million).
+The decrease in other operating assets compared with Decem-
+ber 31, 2019, is due in particular to the payment of an existing
+purchase price receivable from E.ON Pension Trust e. V. in the
+course of the sale of the shares in PEG Infrastruktur AG and its
+stake in Nord Stream AG. In addition, netting of the purchase
+Notes
+172
+price to be paid in connection with the acquisition of shares in
+VSEH against a receivable from RWE led to a reduction in other
+operating receivables (see Note 5).
+Fair value of plan assets
+Other assets under IFRS 15 changed as follows:
+The following table shows the opening and closing balances of
+contractual assets within the meaning of IFRS 15:
+Contract Assets
+€ in millions
+Balance as of January 1
+Other operating assets
+560
+604
+The defined benefit plan in the Netherlands consists of commit-
+ments made by various employers within the framework of a
+sector-specific fund and does not permit a pro rata allocation of
+the obligations, plan assets and service cost. The E.ON Group
+accordingly accounts for this obligation as a defined contribution
+plan. There are no minimum funding requirements in this respect.
+Benefits may be reduced or contributions increased if there is
+insufficient funding.
+The remaining pension obligations are divided between Belgium,
+the Netherlands, Luxembourg, Sweden, Italy, Poland, Romania,
+Slovakia, the Czech Republic and the USA.
+1,977
+From the perspective of the Group, however, the benefit plans
+are relatively insignificant in the above-mentioned countries.
+-1
+2
+30
+Other Countries
+-9
+-2
+6
+15
+-7
+6
+2
+Proportional share of net income after taxes
+The overall innogy section was split into two sections (Retail sec-
+tion and innogy section) at the beginning of 2018. In fiscal year
+2020, the innogy section was transferred to RWE as agreed. At
+no time was it part of the scope of obligations presented in the
+E.ON Group. The technical reassessment of the Retail section rel-
+evant to the E.ON Group resulted in a technical funding deficit as
+of March 31, 2019, which is to be reduced by annual payments
+of £3 million through March 2029.
+The next technical valuation for the E.ON section will take place
+on the reporting date of March 31, 2021. Depending on the
+future remeasurement of the technical deficit, two payments of
+a maximum of £92 million to the Pension Trust are planned in
+2022 and 2023, based on the existing deficit repair plan.
+The Pensions Regulator in the United Kingdom requires that
+a so-called "technical valuation" of the plan's funding status be
+performed every three years. The actuarial assumptions under-
+lying the valuation are agreed upon by the trustees and E.ON
+UK plc. They include presumed life expectancy, wage and salary
+growth rates, investment returns, inflationary assumptions and
+interest rate levels.
+7,994
+7,120
+-94
+8,088
+-81
+7,201
+The features and risks of defined benefit plans are shaped by
+the general legal, tax and regulatory conditions prevailing in
+the respective country. The configurations of the major defined
+benefit and defined contribution plans within the E.ON Group
+are described in the following discussion.
+Notes
+178
+Germany
+Active employees at the German Group companies are covered by
+both cash balance plans and pension plans based on final salary.
+Pension plans based on final salary are closed to new hires. All
+new hires will receive cash balance plans in accordance with
+a capital or pension module system, which, depending on the
+pension plan, can provide for alternative payout options of a
+prorated single payment and payments of installments in addi-
+tion to the payment of a regular pension. The cash balance plans
+use different interest rules. Depending on the underlying pension
+plan, either interest rates adjusted to market developments
+with a fixed lower limit or guaranteed interest rates are used to
+determine the capital or pension modules. The benefit expense
+for the cash balance plans is determined at different percentage
+rates based on the ratio between compensation and the con-
+tribution limit in the statutory retirement pension system in
+Germany. Employees can additionally choose to defer compen-
+sation. Future pension adjustments are either guaranteed at
+1 percent per annum or largely track the development of the
+inflation rate, usually in a three-year cycle.
+To fund the pension plans for the German Group companies, plan
+assets were established. The major part of these plan assets is
+administered in the form of Contractual Trust Arrangements
+("CTAS") in accordance with specified investment principles. There
+are additional plan assets available through the implementation
+channels of the pension fund ("Pensionsfonds") and smaller
+German pension vehicles ("Pensions- und Unterstützungskassen").
+Only the pension fund and the "Pensionskassen" vehicles are
+subject to regulatory provisions in relation to the investment of
+capital and funding requirements.
+United Kingdom
+In the United Kingdom, there are various pension plans. In the
+past, employees were covered by defined benefit plans, which
+for the most part were final-pay plans and make up the majority
+of the pension obligations currently reported for the United
+Kingdom. Benefit payments to the beneficiaries are adjusted for
+inflation on a limited basis. These pension plans were closed
+to new hires. Since then, new hires are offered a defined contri-
+bution plan. Aside from the payment of contributions, this plan
+entails no additional risks for the employer.
+Plan assets in the United Kingdom are administered by trust-
+ees in independent special-purpose vehicles, most of which are
+separate sections of the Electricity Supply Pension Scheme
+(ESPS). The trustees are selected by the members of the plan
+or appointed by the entity. In that capacity, the trustees are
+particularly responsible for the investment of the plan assets.
+2019
+13
+11
+Consolidation adjustments
+Current assets
+Current liabilities (including provisions)
+Non-current liabilities (including provisions)
+Cash and cash equivalents
+Current financial liabilities
+Non-current financial liabilities
+Equity
+Ownership interest (in %)
+Proportional share of equity
+Consolidation adjustments
+Carrying amount of equity investment
+Material Joint Ventures-Earnings Data
+170
+Enerjisa Enerji A.Ş. Enerjisa Üretim Santralleri A.Ş.
+2020
+Non-current assets
+40
+€ in millions
+Presented in the tables below are significant line items of the
+aggregated balance sheets and of the aggregated income state-
+ments of the joint ventures accounted for under the equity
+method, Enerjisa Enerji A.Ş. and Enerjisa Üretim Santralleri A.Ş.
+-4
+6
+3
+1
+Equity-method earnings
+-6
+6
+15
+-1
+9
+2
+14
+11
+¹Rampion Renewables Ltd. holds 50.1 percent on Rampion Offshore Wind Ltd.
+Notes
+Material Joint Ventures-Balance Sheet Data as of December 31
+2019
+55
+-46
+Total
+Other countries
+United Kingdom
+2,678
+1,359
+1,980
+752
+865
+68
+301
+146
+174
+70
+65
+656
+537
+1,381
+1,013
+467
+339
+1,097
+909
+299
+Net defined benefit liability/asset (-)
+Germany
+368
+Other countries
+7,012
+7,985
+21,634
+22,421
+9
+9
+6,154
+6,233
+15,471
+United Kingdom
+28,754
+30,415
+49
+64
+16,179
+Presented as operating receivables
+Total
+Presented as provisions for pensions and similar obligations
+Description of the Benefit Plans
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning, most
+active and former E.ON Group employees are also covered by
+occupational benefit plans. Both defined benefit plans and defined
+contribution plans are in place at E.ON. Benefits under defined
+benefit plans are generally paid upon reaching retirement age, or
+in the event of disability or death.
+E.ON regularly reviews the pension plans in place within the
+Group for financial risks. Typical risk factors for defined benefit
+plans are longevity and changes in nominal interest rates, as well
+as inflation developments and rising wages and salaries.
+24,164
+6,187
+22,483
+2020
+6,222
+465
+-20
+4
+66
+32
+34
+Gains (-) and losses (+) on settlements
+-6
+-6
+-1
+-1
+defined benefit liability/asset
+95
+2
+Total
+73
+71
+1
+1
+Net interest on the net
+93
+Description of the Pension Cost
+54
+821
+239
+2
+Contributions to state plans totaled €0.4 billion (2019: €0.2 billion).
+2023
+1,084
+840
+241
+1,062
+3
+1,089
+841
+245
+Description of the Benefit Obligation
+The following table shows the changes in the present value of
+the defined benefit obligations for the periods indicated:
+Changes in the Defined Benefit Obligations
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+2024
+2022
+2
+245
+17
+8
+324
+254
+68
+2
+The past service cost is, in particular, derived from the expenses
+incurred in the context of restructuring measures. In the UK,
+retirees were given the option to draw higher pension benefits
+at present in return for foregoing promised future pension
+adjustments that exceed the statutory minimum adjustment.
+The exercise of the option resulted in the recognition of nega-
+tive past service cost in fiscal year 2020.
+In addition to the total net periodic pension cost for defined
+benefit plans, an amount of €101 million in contributions to
+external insurers or similar institutions was paid in 2020 (2019:
+€77 million) for defined contribution plans.
+Description of Contributions and Benefit
+Payments
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2020, for the next ten years are
+shown in the following table:
+Prospective Benefit Payments
+€ in millions
+Total
+Germany
+United
+Kingdom
+Other
+countries
+2021
+1,058
+811
+440
+38
+37
+1
+Germany
+Total listed plan assets
+81
+75
+96
+82
+80
+92
+United
+Kingdom
+Plan assets not listed in an active market
+8
+9
+4
+Debt securities
+-318
+Real estate
+Qualifying insurance policies
+Cash and cash equivalents
+Equity securities not traded on an exchange
+Other
+countries
+Net Periodic Pension Cost
+1,247
+4,369
+5,634
+2026-2030
+3
+246
+848
+1,097
+2025
+3
+Total
+€ in millions
+2019
+179
+2020
+183
+Other Information
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Report of the Supervisory Board
+Strategy and Objectives
+Other
+18
+Total unlisted plan assets
+4
+100
+18
+20
+8
+100
+100
+100
+100
+4
+100
+100
+100
+100
+100
+The fundamental investment objective for the plan assets is
+to provide full coverage of benefit obligations at all times for
+the payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. An increase in the net defined benefit
+liability or a deterioration in the funded status following an
+unfavorable development in plan assets or in the present value
+of the defined benefit obligations is identified in these guidelines
+as a risk. E.ON therefore regularly reviews the development of
+the funded status in order to monitor this risk.
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the
+structure of the benefit obligations. This long-term investment
+strategy seeks to manage the funded status, with the result
+that any changes in the defined benefit obligation, especially
+those caused by fluctuating inflation and interest rates are, to
+a certain degree, offset by simultaneous corresponding changes
+in the fair value of plan assets. The investment strategy may
+also involve the use of derivatives (for example, interest rate
+swaps and inflation swaps, as well as currency hedging instru-
+ments) to facilitate the control of specific risk factors of pension
+liabilities. In the table above, derivatives have been allocated,
+based on their substance, to the respective asset classes. In
+order to improve the funded status of the E.ON Group as a whole,
+a portion of the plan assets will also be invested in a diversified
+portfolio of asset classes that are expected to provide for long-
+term returns in excess of those of fixed-income investments and
+the discount rate.
+The determination of the target portfolio structure for the indi-
+vidual plan assets is based on regular asset-liability studies.
+In these studies, the target portfolio structure is reviewed in a
+comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition of
+the capital markets and the structure of the benefit obligations,
+and is adjusted as necessary. The parameters used in the studies
+are additionally reviewed regularly, at least once each year.
+Asset managers are tasked with implementing the target port-
+folio structure. They are monitored for target achievement on
+a regular basis.
+100
+25
+19
+1
+3
+4
+1
+3
+7
+9
+5
+7
+1
+1
+100
+2
+3
+5
+6
+1
+3
+3
+4
+Total
+Total
+11,024
+8,530
+4,319
+8
+-21
+-13
+Changes in scope of consolidation
+-2
+-32
+-34
+4,275
+-3
+-78
+Net benefit payments
+-410
+-631
+-1,041
+-60
+-526
+-586
+-75
+43
+1
+Exchange rate differences
+33
+152
+186
+2
+The net periodic pension cost for defined benefit plans included
+in the provisions for pensions and similar obligations and in
+operating receivables is shown in the table below:
+299
+338
+Employer service cost
+Other
+countries
+United
+Kingdom
+Germany
+Total
+-8
+Other
+7
+7
+-1
+-3
+-4
+Employer contributions to plan assets
+5
+168
+-41
+Net liability as of January 1
+Other
+countries
+United
+Kingdom
+Total Germany
+2019
+2020
+Other
+countries
+United
+Kingdom
+Germany
+Total
+€ in millions
+Changes in the Net Defined Benefit Liability
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of
+the defined benefit obligations and the fair value of plan assets:
+Description of the Net Defined Benefit Liability
+The weighted-average duration of the defined benefit obliga-
+tions measured within the E.ON Group was 18.7 years as of
+December 31, 2020 (2019: 18.4 years).
+For the following fiscal year, it is expected that Group-wide
+employer contributions to plan assets for new and existing
+obligations will amount to a total of €310 million.
+184
+Notes
+31
+2,463
+7,120
+Past service cost
+7,012
+40
+132
+3
+-66
+1,161
+1,098
+Changes from remeasurements
+2
+68
+254
+324
+8
+17
+440
+465
+Net periodic pension cost
+31
+200
+3,016
+3,247
+68
+2020
+6,187
+€ in millions
+The plan assets include virtually no owner-occupied real estate
+or equity and debt instruments issued by E.ON Group companies.
+Each of the individual plan asset components has been allocated
+to an asset class based on its substance.
+Notes
+The plan assets thus classified break down as shown in the
+following table:
+Classification of Plan Assets
+182
+December 31, 2020
+December 31, 2019
+9
+Percentages
+Germany
+United
+Kingdom
+Other
+countries
+Total
+Germany
+United
+Kingdom
+Other
+countries
+Plan assets listed in an active market
+Total
+6,154
+15,471
+21,634
+7,277
+-6
+420
+Exchange rate differences
+-334
+-334
+287
+287
+Other
+-65
+-1
+-64
+-88
+-88
+Fair value of plan assets as of December 31
+22,421
+16,179
+6,233
+9
+Equity securities (stocks)
+7,697
+23
+17
+25
+5
+Other investment funds
+11
+5
+25
+9
+-0.35
+20
+0.36
+0.37
+-25
++25
+-25
++25
+9.04
+-7.85
+9.34
+-0.36
+4
+23
+45
+24
+28
+15
+Debt securities
+Government bonds
+Corporate bonds
+47
+28
+18
+422
+45
+54
+49
+49
+50
+20
+50
+27
+20
+25
+-4
+-4
+Changes in scope of consolidation
+181
+2020
+2019
+€ in millions
+Total
+Germany
+United
+Kingdom
+Other
+countries
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+United
+Germany Kingdom
+Other
+countries
+Fair value of plan assets as of January 1
+21,634
+15,471
+6,154
+9
+12,054
+Total
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Changes in the Fair Value of Plan Assets
++25
+-25
++25
+-25
+2.17
+-2.09
+2.22
+-2.10
++10
+-3.84
+-10
++10
+-10
+4.12
+-3.50
+3.73
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present
+value of the defined benefit obligations. If one of the actuarial
+assumptions is changed for the purpose of computing the sensi-
+tivity of results to changes in that assumption, all other actuarial
+assumptions are included in the computation unchanged.
+When considering sensitivities, it must be noted that the change
+in the present value of the defined benefit obligations resulting
+from changing multiple actuarial assumptions simultaneously
+is not necessarily equivalent to the cumulative effect of the
+individual sensitivities.
+Description of Plan Assets and the
+Investment Policy
+The defined benefit plans are funded by plan assets held in spe-
+cially created pension vehicles that legally are distinct from the
+Company. The fair value of these plan assets changed as follows:
+7,164
+4,880
+10
+Interest income on plan assets
+13
+10
+3
+1
+1
+Employer contributions
+586
+526
+60
+1,041
+631
+410
+Benefit payments
+-973
+-714
+-259
+-775
+-507
+-267
+Employee contributions
+-8.17
+363
+1,101
+310
+196
+114
+316
+168
+148
+Remeasurements
+1,254
+695
+559
+1,101
+738
+363
+Return on plan assets recognized in equity,
+not including amounts contained in the
+interest income on plan assets
+1,254
+695
+559
+738
+2019
+-50
+-50
+2,514
+changes in financial assumptions
+-2
+-12
+-14
+-2
+-14
+-16
+1,968
+Actuarial gains (-)/losses (+) arising from
+changes in demographic assumptions
+Actuarial gains (-)/losses (+) arising from
+531
+697
+1,233
+3
+493
+1,856
+2,352
+Remeasurements
+5
+541
+5
+1,270
+-1,051
+Benefit payments
+1
+1
+3
+10
+13
+Employee contributions
+1
+-24
+-23
+-34
+-112
+-146
+experience adjustments
+Actuarial gains (-)/losses (+) arising from
+6
+543
+721
+1
+-789
+149
+389
+37
+299
+338
+41
+5,080
+10,180
+15,301
+49
+2
+6,222
+Germany Kingdom
+Total
+United
+Other
+countries
+United
+Kingdom
+Total Germany
+22,483
+28,754
+Defined benefit obligation as of January 1
+Employer service cost
+Other
+countries
+186
+152
+33
+2
+114
+289
+405
+Interest cost on the present value of the
+defined benefit obligations
+-1
+-1
+-6
+-6
+Gains (-) and losses (+) on settlements
+34
+32
+66
+4
+-20
+54
+38
+Past service cost
+1
+239
+-259
+-3
+-809
+1.60
+1.60
+United Kingdom
+Pension increase rate
+Germany²
+2.00
+1.80,2.90
+1.90,2.80
+2.50
+1.75
+2.35
+United Kingdom¹
+Germany
+Wage and salary growth rate
+2.90
+2.00
+1.40
+United Kingdom
+2.00
+2.35
+2.70
+2.90
+3.20
++50
+December 31, 2019
+December 31, 2020
+Change in the present value of the defined benefit obligations
+Changes in the actuarial assumptions described previously
+would lead to the following changes in the present value of the
+defined benefit obligations:
+Change in mortality by (percent)
+Change in percent
+Change in percent
+Change in the pension increase rate by (basis points)
+Change in the wage and salary growth rate by (basis points)
+Change in percent
+Change in the discount rate by (basis points)
+Change in percent
+Sensitivities
+Germany
+2018 G versions of the Heubeck biometric tables (2018)
+United Kingdom "S2" series base mortality tables with the CMI 2018
+projection model for future improvements
+Actuarial Assumptions (Mortality Tables)
+To measure the E.ON Group's occupational pension obligations
+for accounting purposes, the Company has employed the
+current versions of the biometric tables recognized in each
+respective country for the calculation of pension obligations:
+The discount rate assumptions used by E.ON reflect the currency-
+specific rates available at the end of the respective fiscal year
+for high-quality corporate bonds. Interest rates for the EUR and
+GBP currency areas have been determined on the basis of the
+single equivalent discount rate method. The full interest curve
+is used to determine the present value of the defined benefit
+obligation, and the IAS 19 discount rate disclosed is determined
+retrospectively as the discount rate that leads to the identical
+present value of the defined benefit obligation when applied
+uniformly.
+180
+Notes
+2The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+guarantee adjustment.
+¹Different salary growth rates were applied due to different benefit plans (E.ON: 1.90 percent
+[2019: 1.80 percent]; innogy: 2.80 percent [2019: 2.90 percent]).
+1.30
+0.80
+Germany
+Discount rate
+-73
+Other
+294
+294
+-1
+-337
+-338
+Exchange rate differences
+1
+463
+11,552
+12,016
+8
+-25
+-17
+Changes in scope of consolidation
+-3
+-267
+-539
+-7
++50
+-66
+171
+2018
+2019
+2020
+December 31,
+Percentages
+Actuarial Assumptions
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at
+E.ON's German and UK subsidiaries as of the respective balance
+sheet date are as follows:
+The present value is attributable to retirees and their benefi-
+ciaries in the amount of €16.2 billion (2019: €15.7 billion), to
+former employees with vested entitlements in the amount of
+€3.7 billion (2019: €3.4 billion) and to active employees in the
+amount of €10.5 billion (2019: €9.7 billion).
+The actuarial losses shown in the table for the development of
+the present value of the defined benefit obligation are primarily
+attributable to a decrease in the discount rates used.
+49
+6,222
+22,483
+28,754
+64
+24,164
+30,415
+Defined benefit obligation as of December 31
+3
+-96
+78
+-2
+35,512
+171
+618
+198
+24
+299
+28
+8,782
+8,064
+27,572
+3,841
+29,423
+3,418
+Non-current
+Current
+December 31, 2019
+December 31, 2020
+Non-current
+Current
+Financial Liabilities
+in fiscal years 2020 and 2019:
+The following tables present the changes to financial liabilities
+Financial Liabilities
+¹Adjusted prior-year figures.
+Total
+Trade payables and other operating liabilities
+3,679
+166
+3,571
+103
+Exchange Changes in
+rate
+scope of
+differences consolidation
+Cash flows
+Jan. 1, 2020
+Bonds
+€ in millions
+Non-cash-effective
+Cash-
+effective
+3
+20,442
+37,022
+19,633
+Other operating liabilities
+7,940
+7,599
+16,215
+1,196
+5,361
+656
+6,564
+2,975
+527
+2,965
+838
+489
+16,601
+Contract liabilities (IFRS 15)
+Advance payments
+Liabilities from derivatives
+There were changes in estimates for the nuclear-power business
+in 2020 in the amount of -€47 million (2019: €149 million).
+This mainly includes the effects from the optimization of
+decommissioning and disposal services. €361 million (2019:
+€351 million) of this was used, of which €307 million (2019:
+€250 million) related to decommissioning nuclear power plants
+based on circumstances for which decommissioning and dis-
+mantling costs were recognized.
+Excluding the effects of discounting and cost increases, the
+amounts for disposal obligations would be €8,015 million with
+average credit terms of approximately 7 years. This amount
+flows into the economic net debt.
+A risk-free discount rate of an average of about 0.0 percent is
+used for the measurement of E.ON's disposal obligations (pre-
+vious year: 0.0 percent). As in the prior year, E.ON assumes a
+2-percent increase in costs when estimating annual payments.
+A change in the discount rate or in the cost increase rate of
+0.1 percent would change the amount of the provision recognized
+on the balance sheet by approximately €0.1 billion.
+186
+Notes
+Provisions, if they are non-current, are measured at their
+settlement amounts, discounted to the balance sheet date.
+Total
+9,761
+9,390
+1,492
+1,404
+Personnel Obligations
+Containers, transports, operational waste,
+other
+7,986
+Retirement and decommissioning
+2019
+2020
+December 31,
+€ in millions
+Nuclear-Waste Management Obligations in Germany
+(Less Advance Payments)
+In the following, the provision items after deduction of advance
+payments are classified based on technical criteria:
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are
+not based on contractual agreements.
+Provisions for the disposal of spent nuclear-fuel rods also com-
+prise the contractual costs of finalizing reprocessing and the
+associated return of waste to interim storage, as well as costs
+incurred for expert handling, including the necessary interim
+storage containers and transport to interim storage.
+The asset retirement obligations recognized include the anticipated
+costs of post- and service operation of the facility, dismantling
+costs, and the cost of removal and disposal of the nuclear com-
+ponents of the nuclear power plant.
+8,269
+Compound-
+Provisions for personnel costs primarily cover provisions for
+early retirement benefits, performance-based compensation
+components, restructuring and other deferred personnel costs.
+Restructuring provisions were made in Germany and the UK,
+in particular:
+In 2019, E.ON announced proposals to restructure npower. The
+implementation of the plan began in 2020, and npower's house-
+hold and small commercial customers (B2C) are being succes-
+sively transferred to a common IT platform. The plan calls for
+them to be merged with the B2C customers of E.ON UK in 2021.
+There are also plans to combine npower's and E.ON UK's busi-
+ness with industrial and large commercial customers (B2B) on
+another joint platform implemented at npower. npower's remain-
+ing activities will be restructured. This includes the closure of
+most of npower's sites and the resulting headcount reduction.
+Capital expenditure grants
+Trade payables
+Financial liabilities
+€ in millions
+Liabilities¹
+The following table provides a breakdown of liabilities:
+(27) Liabilities
+taxes (€0.1 billion), decommissioning and environmental
+rehabilitation (€0.1 billion), litigation risks (€0.1 billion), net-
+work maintenance obligations (€0.1 billion), and risks from
+non-reimbursement of investment costs (€0.1 billion).
+The other miscellaneous provisions consist of certain environ-
+mental remediation obligations from predecessor companies
+(€0.5 billion), possible obligations from tax-related interest
+expense (€0.2 billion), litigation cost risks (€0.2 billion), other
+Other
+187
+In connection with the acquisition of innogy, the "Collective
+Agreement on the Future and Job Security" was concluded in
+2019 with employer associations and unions as well as ver.di
+and the Mining, Chemical and Energy Industrial Union. This col-
+lective agreement will initially apply to personnel changes and
+adjustment measures implemented in Germany as a result of
+the integration of the innogy Group into the E.ON Group. Among
+other aspects, it includes regulations on severance payments
+for employees who voluntarily depart, early retirement and the
+possibility of transferring to an Employment and Qualification
+Company.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+Provisions for environmental remediation refer primarily
+to redevelopment protection measures and the rehabilitation
+of contaminated sites.
+Environmental Remediation and Similar
+Obligations
+Provisions for customer-related obligations consist primarily of
+potential losses on rebates and open sales contracts as well as
+from pending meter readings. There was a significant increase
+from allocations for onerous contracts in the framework of
+pending contracts in the amount of €0.2 billion.
+Provisions for supplier-related obligations consist of provisions
+for potential losses on open purchase contracts, among others.
+Customer-Related Obligations
+Supplier-Related Obligations
+The amount of other asset retirement obligations disclosed
+under economic net debt, not including the provisions for dis-
+mantling conventional plant components in the nuclear power
+segment, amounts to €336 million.
+The provisions for other asset retirement obligations consist of
+obligations for renewable-energy power plants and infrastruc-
+ture. In addition, the provisions for dismantling conventional
+plant components in the nuclear power segment, which are
+based on legally binding civil agreements and public provisions,
+in the amount of €469 million (2019: €475 million) are taken
+into account here. Excluding discounting and cost-increase
+effects, the amounts for these disposal obligations would be
+€343 million. This amount flows into the economic net debt.
+Provisions for Other Asset Retirement
+Obligations
+The provisions for Renewables Obligation Certificates (ROCs or
+Green Certificates) are an important mechanism for promoting
+renewable energies. The ROCs represent a fixed share of Renew-
+ables in power sales and can be acquired either from renewable
+sources or on the market. During a twelve-month ROC period,
+the obligations accrued for this purpose are offset against the
+acquired certificates and used.
+Obligations from Green Certificates
+Combined Group Management Report
+ing effect
+Other
+Dec. 31,
+2020
+5
+-292
+863
+Lease obligations²
+1,138
+1,394
+-2
+-392
+138
+Bank loans/Liabilities to banks
+50
+1,703
+200
+0
+Commercial paper
+27,059
+3
+Dec. 31,
+2019
+Other
+14,737
+340
+3,021
+8,958
+ing effect
+-150
+Compound-
+330
+Other financial liabilities
+A Debt Issuance Program simplifies the issuance from time to
+time of debt instruments through public and private placements
+to investors. The Debt Issuance Program of E.ON SE was
+most recently renewed in March 2020, with a total amount of
+€35 billion. E.ON SE plans to renew the program in 2021.
+€35 Billion Debt Issuance Program
+The financing activities involve the use of covenants (contractual
+obligations) consisting primarily of change-of-control clauses
+(right of cancellation upon change of ownership), negative pledges,
+pari-passu clauses and cross-default clauses, each referring to
+a restricted set of significant circumstances. Financial covenants
+(that is, covenants linked to financial ratios) are not employed.
+All covenants were adhered to in 2020.
+Corporate Headquarters
+Covenants
+The following is a description of the E.ON Group's significant
+credit arrangements and debt issuance programs. Included
+under "Bonds" are the bonds currently outstanding, including
+those issued under the Debt Issuance Program.
+debt investors are treated equally. The transactions were com-
+pletely closed in November 2020. A total of 99.95 percent of
+innogy's outstanding bonds have successfully been transferred.
+On August 13, 2020, E.ON launched transactions to harmonize
+the new E.ON Group's funding structure. These transactions
+involved E.ON offering innogy bondholders the option to change
+the debtor of roughly €11.5 billion in bonds to E.ON. The offer
+gave innogy bondholders the option to hold bonds that have the
+same status as current E.ON bonds. It will also ensure that all
+The financial liabilities of innogy recognized at the date of initial
+consolidation were marked to market under IFRS. This market
+value was considerably higher than the nominal value because
+market interest rates had fallen since the bonds were issued.
+The difference between the nominal value and the market value
+calculated during the preliminary purchase price allocation
+totaled €2,121 million as of December 31, 2020. This difference
+is not taken into account in the economic net debt.
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €8 million
+(2019: €68 million). This collateral relates to amounts pledged
+by banks to limit the utilization of credit lines in connection
+with the fair value measurement of derivative transactions. The
+other financial liabilities include, inter alia, financial guarantees
+totaling €8 million (2019: €8 million). Also included is collateral
+received in connection with goods and services in the amount
+of €10 million (2019: €10 million). E.ON can use this collateral
+without restriction.
+²For more information see Note 33.
+¹Adjusted prior-year figures.
+2,609
+31,413
+3
+17,841
+408
+2,409
+10,422
+Financial liabilities
+557
+-193
+65
+222
+463
+330
+The provisions for nuclear-waste management based on nuclear-
+power legislation comprise all those nuclear obligations relating
+to the disposal of spent nuclear-fuel rods and low-level nuclear
+waste and to the retirement and decommissioning of nuclear
+power plant components that are determined on the basis of
+external studies, external and internal cost estimates and con-
+tractual agreements, as well as the supplementary provisions
+of the German Act Transferring Responsibility for Nuclear Waste
+Storage and the German Disposal Fund Act.
+scope of
+consolidation
+Cash flows
+350
+2
+-14
+-332
+2,609
+Lease obligations¹
+607
+-1
+266
+-2
+-794
+2,615
+1,138
+0
+-50
+50
+Commercial paper
+29,019
+-299
+11
+11
+-157
+2,394
+27,059
+Bank loans/Liabilities to banks
+differences
+Other financial liabilities
+114
+Jan. 1, 2019
+Bonds
+€ in millions
+Changes in
+Exchange
+rate
+Non-cash-effective
+effective
+188
+Cash-
+Financial Liabilities¹
+Notes
+557
+¹For more information see Note 33.
+33
+11
+233
+-181
+1,332
+31,413
+Financial liabilities
+600
+-17
+-46
+-8
+32,841
+The provisions for nuclear-waste management obligations as
+of December 31, 2020, in the amount of €9.4 billion exclusively
+relate to nuclear-power activities in Germany.
+1,418
+As of December 31, 2020, provisions for nuclear-waste man-
+agement obligations exclusively relate to Germany; other provi-
+sions mainly relate to euro zone countries and the United King-
+dom.
+in
+Reclassifi-
+cations
+Additions Utilization
+discounts
+of
+Changes
+Unwinding
+Changes in
+scope of
+consolida-
+tion
+differences
+2020
+rate
+Dec. 31,
+Jan. 1,
+185
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+Changes in Miscellaneous Provisions
+table below:
+The changes in the miscellaneous provisions are shown in the
+13,468
+4,019
+13,296
+3,904
+Total
+Exchange
+1,563
+Reversals
+2020
+1,597
+-63
+1,116
+certificates
+Obligations from green
+1,843
+-134
+-87
+-556
+723
+13
+estimates
+-26
+1,922
+Personnel obligations
+9,390
+-47
+-361
+36
+1
+9,761
+obligations
+Nuclear-waste management
+€ in millions
+-12
+-1,613
+1,290
+1,204
+416
+Nuclear-waste management obligations
+Non-current
+Current
+Non-current
+Current
+€ in millions
+December 31, 2019
+December 31, 2020
+Miscellaneous Provisions
+dates indicated:
+8,974
+The following table lists the miscellaneous provisions as of the
+40
+68
+7,012
+7,120
+55
+-46
+7,985
+7,994
+Net liability as of December 31
+3
+-8
+(26) Miscellaneous Provisions
+1,631
+Personnel obligations
+Provisions for Nuclear-Waste Management
+Obligations
+Other
+470
+59
+427
+58
+Environmental remediation and similar obligations
+110
+386
+243
+563
+Supplier-related and customer-related obligations
+594
+766
+756
+48
+Other asset retirement obligations
+16
+1,100
+16
+1,021
+Obligations from green certificates
+1,180
+9,363
+398
+742
+44
+1,037
+1,249
+obligations
+2,853
+-13
+-35
+75
+649
+32
+-408
+2,835
+17,487
+Other
+Total
+-90
+91
+3,433
+-3,030
+45
+-631
+-45
+17,200
+The accretion expense resulting from the changes in provisions
+is shown in the financial results (see Note 10). The provision
+items are discounted in accordance with the maturities with
+interest rates of between 0 and 2.08 percent.
+Other asset retirement
+-60
+485
+27
+0
+401
+1
+-2
+496
+tomer-related obligations
+Supplier-related and cus-
+804
+2
+-2
+-11
+3
+2
+-128
+810
+100
+-25
+-43
+24
+529
+Environmental remediation
+and similar obligations
+806
+-62
+"Member since May 28, 2020.
+5Committee member since February 5, 2020.
+6Committee member since May 28, 2020.
+'Committee member until December 31, 2020.
+8Participation(s) as a guest.
+Report of the Supervisory Board
+10
+accounting issues, risk management, and developments in the area of com-
+pliance. Furthermore, the committee thoroughly discussed the Combined
+Group Management Report and the proposal for profit appropriation and
+prepared the relevant recommendations for the Supervisory Board and
+reported them to the Supervisory Board. On the basis of the quarterly
+risk reports, the committee noted that no risks were identified that might
+jeopardize the existence of the Company or individual segments. Further-
+more, the committee addressed in detail the Company's cybersecurity
+and cyber risks as well as the upcoming change of the independent audi-
+tor in 2021.
+Committee chairpersons reported the agenda and results of their respec-
+tive committee's meetings to the full Supervisory Board on a regular basis.
+Information about the committees' composition and responsibilities is in
+the Corporate Governance Declaration on pages 74 to 77.
+5/55
+PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
+Düsseldorf, audited and submitted an unqualified opinion on the Consoli-
+dated Financial Statements of E.ON SE prepared in accordance with
+IFRS and the Combined Group Management Report for the year ended
+December 31, 2020. The IFRS Consolidated Financial Statements
+exempt E.ON SE from the requirement to publish Consolidated Financial
+Statements in accordance with German law.
+3Member until May 28, 2020.
+5/5
+Luha, Eugen-Gheorghe
+5/5
+0/0
+7/7
+3/3
+Examination and Approval of the Financial Statements,
+Approval of the Consolidated Financial Statements,
+Proposal for Profit Appropriation for the Year Ended
+December 31, 2020
+The Supervisory Board reviewed and, at its annual-results meeting on
+March 23, 2021, thoroughly discussed-in the presence of the indepen-
+dent auditor and with knowledge of, and reference to, the Independent
+Auditor's Report and the results of the preliminary review by the Audit and
+Risk Committee-E.ON SE's Financial Statements prepared in accordance
+with the German Commercial Code, Consolidated Financial Statements,
+and Combined Group Management Report as well as the Management
+Board's proposal for profit appropriation. The independent auditor was
+available for supplementary questions and answers. After concluding
+its own examination, the Supervisory Board determined that there are no
+objections to the findings. It therefore acknowledged and approved the
+Independent Auditor's Report. In addition, the Supervisory Board reviewed
+and approved the Separate Combined Non-Financial Report.
+2Member since February 1, 2020.
+1/18
+5/5
+4/5
+Pelouch, Miroslav
+3/38
+Pinczésné Márton, Szilvia
+5/5
+Pöhls, René
+5/5
+5/5
+Schmitz, Christoph²
+4/5
+5/5
+5/56
+Schulz, Fred
+5/5
+12/12
+4/5
+May, Stefan
+5/5
+5/5
+Zettl, Albert
+5/5
+12/12
+¹Member until January 31, 2020.
+Wallbaum, Elisabeth
+There were no personnel changes on the E.ON SE Management Board
+in 2020. Page 250 of this report shows E.ON SE Management Board
+members' respective areas of responsibility as of year-end 2020.
+The Supervisory Board examined the Management Board's proposal
+for profit appropriation, which includes a cash dividend of €0.47 per
+ordinary share, also taking into consideration the Company's liquidity
+and its finance and investment plans. After examining and weighing
+all arguments, the Supervisory Board agrees with the Management
+Board's proposal for profit appropriation.
+As for higher efficiency, digitization is the central element of
+E.ON's strategy. By creating a digitization remit on the Manage-
+ment Board, E.ON has underscored this issue's fundamental
+importance for the ongoing transformation of the entire energy
+industry and the E.ON Group.
+E.ON's growth strategy, which will receive additional support
+from European economic stimulus packages, foresees extensive
+investments in the Company's two core businesses: energy net-
+works and customer solutions. About 90 percent of investments
+across both businesses will go toward energy infrastructure.
+Around 75 percent of investments will be in the network busi-
+ness. Innovation and R&D are the key to sustainable growth in
+an increasingly complex energy world and are central to E.ON's
+growth strategy. In the long term, E.ON considers green hydro-
+gen in particular to be a strategic growth business and is actively
+helping establish Europe's hydrogen economy. This growth
+strategy is designed to further enhance the resilience of E.ON'S
+business model and to give the Company a good starting position
+for the decade ahead.
+Energy Networks
+Energy networks, which interconnect all sectors of the economy
+and ensure supply security to customers across Europe, are
+the backbone of a successful energy transition. The successful
+integration of innogy has made E.ON the leading distribution
+system operator ("DSO") in Northern and Central Europe.
+E.ON's regulated asset base ("RAB") totals about €34.9 billion,
+and the regulated business generates about 80 percent of its
+income. This gives E.ON a central role to play in the energy tran-
+sition's success. After all, the energy system can only become
+climate-neutral if energy networks are expanded early and
+sufficiently and are systematically digitized.
+Network investments rose to around €3.4 billion in 2020. They
+enabled the ongoing expansion of the Company's RAB, made
+its networks more digital, and ensured asset integrity. Growth
+in the network business, which is driven largely by the energy
+transition, can be divided into three areas. The first is renewables
+integration. E.ON has already connected 78 GW of renewables
+capacity to its networks in Europe. The second is the construction
+boom and capacity expansion at E.ON's customers along with
+the ongoing electrification of the transport and heating sectors,
+which leads to more network connections. Each year, E.ON makes
+tens of thousands of new electricity and gas grid connections.
+In addition, large industrial customers with key technologies
+--such as electromobility, battery manufacturing, and data cen-
+ters-are being connected to E.ON's networks. The capacity of
+such connections is similar to that of a major city. Together with
+energy supplier Mainova and transmission system operator
+TenneT, E.ON is investing €750 million in and around Frankfurt
+to enable the power grid to meet the metropolitan area's grow-
+ing energy needs. The third growth area consists of necessary
+Strategy and Objectives
+16
+investments in network maintenance and modernization. E.ON
+is already using smart operating equipment, sensors, and actu-
+ators as well as artificial intelligence to optimize grid utilization
+and thus to make the energy transition as efficient as possible.
+The efficiency of all E.ON DSOs in Germany is above average.
+Seven out of nine DSOs have an efficiency rating of 100 percent,
+three of which receive an efficiency bonus for "super efficiency."
+Two E.ON DSOs in Sweden also have an efficiency rating of
+100 percent, another has a rating of 93 percent. E.ON DSOS
+therefore significantly surpass the Swedish industry average of
+87 percent.
+In the summer of 2020, E.ON forged an alliance with SAP to build
+a cloud-based platform that will further improve network billing.
+E.ON intends for the new platform to handle the processes for
+around 15 million network customers in Germany by year-end
+2023. By standardizing the core processes of network operations,
+the platform will deliver lasting improvements in service quality
+and customer satisfaction, while reducing costs by about
+40 percent over the long term. In Sweden, E.ON is a pioneer in
+innovative flexibility services: SWITCH, the Company's digital
+trading platform there, enables companies whose power require-
+ments are temporarily higher to buy capacity from companies
+whose requirements are lower. In Hungary, E.ON has developed
+an innovative, cost-effective mobile battery storage system.
+Its purpose is to reduce temporary grid congestion, promote
+distributed generation, increase grid flexibility, and enable
+energy communities.
+In addition, E.ON aims to propel the decarbonization of gas
+grids by admixing green gases. E.ON subsidiary Hansewerk,
+for example, is conducting a demonstration project in which
+a 1 MW combined-heat-and-power plant is fueled entirely with
+100 percent hydrogen. The plant, whose gas turbines were
+modified to burn hydrogen, supplies heat to Othmarschen,
+a suburb of Hamburg. The purpose is to show how, in the future,
+green hydrogen-whose production was powered by surplus
+wind energy-can be used to generate climate-friendly electricity
+and heat.
+Customer Solutions
+E.ON's Customer Solutions segment focuses on two established
+businesses: on the one hand, Energy Infrastructure Solutions
+("EIS"); on the other, power and gas sales along with new cus-
+tomer solutions. EIS is a largely capital-intensive, long-term
+business that provides solutions for industrial, commercial, munic-
+ipal, and community customers. Power and gas sales is a scalable
+business model with low capital requirements. It focuses on
+households and small and medium-sized enterprises. New cus-
+tomer solutions comprise a variety of distributed energy systems
+for households. These include solar panels, heating devices,
+energy storage systems, smart home technologies, and eMobility
+solutions.
+E.ON has set a target for its EIS business to continue to grow
+and to become the preferred partner for innovative energy
+solutions. E.ON offers a comprehensive portfolio of solutions
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+17
+for energy efficiency, decarbonization of heat production,
+embedded power generation, and other energy services for cities
+and districts and for commercial and industrial buildings. E.ON
+can already build on a strong customer base in Germany, Sweden,
+and Poland, while the United Kingdom, Italy, the Netherlands,
+and East-Central Europe offer opportunities for additional growth.
+EIS's asset portfolio consists of heat, steam, and cooling plants,
+district heating networks (19 TWh), and embedded generating
+units at industrial customers (12 TWh). The district heating
+networks have a system length of more than 5,000 kilometers
+and integrate a total of 4,100 generating units in 14 countries.
+In the United Kingdom, for example, E.ON helps its customers
+develop and implement innovative and cost-effective solutions
+to decarbonize the heat supply of new housing developments.
+Electricity and gas sales-encompassing around 53 million cus-
+tomers across Europe-are a key part of E.ON's portfolio (includes
+customers in Turkey and ZSE's customers in Slovakia). This busi-
+ness remains clearly focused on profitable net customer growth.
+To achieve this at competitive costs, E.ON is systematically dig-
+itizing and also optimizing its operating models and processes.
+The Company is conducting two major digital transformation pro-
+grams in its largest markets. First, around 4 million customers
+in Germany were migrated to innovative, digital platforms in
+2020. The objective is for digital platforms to serve all customers
+of innogy and E.ON's core brands in Germany by the end of 2022.
+Second, E.ON is currently building an entirely new business in
+the United Kingdom: E.ON Next, which is based on Kraken Technol-
+ogies' innovative technology platform. Customer centricity and
+cost efficiency are at the core of E.ON Next's business model. The
+migration of innogy's residential and commercial customers to
+the new E.ON Next digital platform is scheduled to be completed
+by the end of the first half of 2021. All of E.ON UK's residential
+customers are to be migrated by year-end 2022. E.ON's busi-
+ness of supplying electricity and gas to commercial customers
+is sharpening its focus, which reduces its risk portfolio.
+The global eMobility market is growing exponentially in response
+to emission restrictions, government subsidies, and carmakers'
+strong commitment to electric vehicles. E.ON aims for its network
+business to leverage the attractive infrastructure potential of
+this growth by making new connections and expanding network
+utilization. To enhance Customer Solutions' competitive advan-
+tage, E.ON intends to focus its future eMobility activities on the
+development of charging infrastructure solutions and operations.
+Finance Strategy
+The section of the Combined Group Management Report entitled
+"Financial Situation" contains explanatory information about
+E.ON's finance strategy.
+People Strategy
+The section of the Combined Group Management Report entitled
+"Employees" contains explanatory information about the main
+components of E.ON'speople strategy as well as statements
+about diversity at E.ON.
+Additional information about sustainability is available in the
+Separate Combined Non-Financial Report (on pages 100 to 115
+of this report) and in the Sustainability Report published sepa-
+rately at www.eon.com.
+Combined Group
+Management Report
+With regard to the innogy integration, E.ON is right on course
+to achieve the announced synergies of roughly €740 million by
+2022. The integration of innogy's various organizational units
+into the E.ON Group has nearly been completed. The first sprinter
+phase was successful; many employees left the Company volun-
+tarily under the socially responsible mechanisms agreed on with
+employee representatives.
+The Supervisory Board approved the Financial Statements of E.ON SE
+prepared by the Management Board and the Consolidated Financial
+Statements. The Financial Statements are thus adopted. The Super-
+visory Board agrees with the Combined Group Management Report
+and, in particular, with its statements concerning the Company's
+future development.
+The main trends shaping the new energy world are decarboniza-
+tion, decentralization, and digitization. E.ON's strategic objective
+is to accelerate progress toward a climate-friendly future by
+means of smart and robust energy infrastructure and to set inter-
+national standards for innovation and digital technology. The three
+principles for achieving this objective are integration, efficiency,
+and growth.
+15
+Personnel Changes on the Management Board
+Krebber, Monika
+Personnel Changes on the Supervisory Board
+Clive Broutta ended his service on the Supervisory Board at the con-
+clusion of January 31, 2020, owing to the United Kingdom's depar-
+ture from the European Union. Christoph Schmitz was appointed to
+succeed him effective February 1, 2020. Effective the end of the
+2020 Annual Shareholders Meeting, Andreas Scheidt ended his ser-
+vice on the Supervisory Board, and Miroslav Pelouch was appointed
+to the Supervisory Board. Effective December 31, 2020, Carolina
+Dybeck Happe stepped down from the Audit and Risk Committee,
+and Ulrich Grillo was elected to succeed her. Pages 248 to 249 of
+this report provide an overview of all members of the Supervisory
+Board as of December 31, 2020.
+Essen, March 23, 2021
+The Supervisory Board
+Best wishes,
+4.1. m
+Dr. Karl-Ludwig Kley
+Chairman
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+11
+Strategy and
+Objectives
+Strategy and Objectives
+14
+Strategy and Objectives
+E.ON's Strategy: Leading Partner for the
+Sustainable and Digital Energy World
+Sustainability
+In 2020, E.ON adjusted its strategic course by identifying rele-
+vant environmental, social, and governance ("ESG") aspects that
+are important for sustainable action in both a business and a
+social context: climate protection, health and safety, diversity
+and inclusion, as well as good corporate governance. Since
+E.ON also factors ESG aspects into its operating decisions and
+management processes, integrating sustainability into its cor-
+porate strategy is a logical step. E.ON's Sustainability Council,
+together with the Supervisory Board's Innovation and Sustain-
+ability Committee, has developed the following key topics and
+corresponding mission statements:
+WE enable Europe to become carbon-neutral
+Climate protection is a key driver for future growth, because
+operating networks is part of E.ON's core business. Distribution
+networks in particular serve as a platform for the energy transi-
+tion and the many possibilities associated with it, such as pro-
+viding sustainable solutions for customers and helping cities,
+companies, and residential customers become climate-neutral.
+In March 2020, E.ON also set ambitious climate targets. E.ON
+intends to reduce its Scope 1 and Scope 2 emissions (those a
+company can influence directly) by 75 percent by 2030 and then
+to become climate-neutral in 2040. E.ON aims to reduce its
+Scope 3 emissions by 50 percent by 2030 and by 100 percent
+by 2050. Sustainable energy is therefore a strategic focus area
+for E.ON.
+WE care for our people and foster a diverse, inclusive culture
+Diversity, especially social diversity, characterizes the people at
+E.ON and is the basis for sustainable innovation, continuous
+improvement, business success, and growth. Diversity should be
+promoted and enhanced, especially with regard to experience,
+education, nationality, and the proportion of women in manage-
+ment positions. E.ON has set the goal of improving the health
+and safety of its employees and business partners and preventing
+accidents.
+WE take sustainability as the guiding principle in business
+Sustainability guides E.ON's actions. The integration of sustain-
+ability into E.ON's management processes is therefore a logical
+step. It ensures that E.ON's strategic and operating decisions,
+business activities, and external communications reflect E.ON's
+claim to be Europe's leading sustainable energy company. ESG
+aspects have therefore already been part of many processes,
+including those designed to reduce risks and gain access to capital
+markets, which are increasingly geared toward green financing
+(see E.ON's Green Bond Framework on page 38).
+More detailed information about sustainability at E.ON is available
+in the Separate Combined Non-Financial Report (which starts on
+page 100 of this report) and in the comprehensive Sustainability
+Report at www.eon.com.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+E.ON's Principles for Achieving a Climate-friendly, Innovative,
+and Digital Future
+Broutta, Clive¹
+4/5
+5/5
+5/5
+Clementi, Erich
+0/0
+12/12
+5/5
+Kley, Dr. Karl-Ludwig
+Nomination
+Committee
+Committee
+Innovation and
+Sustainablility
+Audit and Risk
+Committee
+12/12
+Executive
+Committee
+Supervisory Board member
+Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board
+and Its Committees
+E.ON Group's 2019 Consolidated Financial Statements (prepared in
+accordance with International Financial Reporting Standards, or "IFRS"),
+and the 2020 intermediate financial reports of E.ON SE. The committee
+discussed the recommendation for selecting an independent auditor
+for the 2020 financial year as well as the intermediate financial reports
+and assigned the tasks for the independent auditor's auditing services,
+established the audit priorities, determined the independent auditor's
+compensation and reviewed the independent auditor's qualifications (for
+example, by assessing the quality of the independent audit) and verified
+the auditor's qualifications and independence in line with the recommen-
+dations of the German Corporate Governance Code. The committee also
+assured itself that the independent auditor has no conflicts of interest.
+In addition, the committee addressed other matters assigned to it by law,
+the Company's Articles of Association, or the Supervisory Board's rules
+and procedures, in particular Internal Audit's activities and reports,
+The Audit and Risk Committee met five times in 2020.
+One member was unable to attend one meeting. Apart
+from that, all members attended all meetings. The
+committee conducted a thorough review, in particular
+of the 2019 Financial Statements of E.ON SE (prepared
+in accordance with the German Commercial Code), the
+The Innovation and Sustainability Committee met five
+times. One member was unable to attend one meeting.
+Apart from that, all members attended all of the com-
+mittee's meetings. The matters addressed by the com-
+mittee included E.ON's climate strategy and activities
+relating to sustainability. Furthermore, in particular
+E.ON's approach to innovation as well as organic and
+inorganic growth options were topics of discussion.
+9
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Scheidt, Andreas³
+Supervisory Board
+2/28
+5/5
+Dybeck Happe, Carolina
+0/0
+0/0
+1/18
+5/5
+0/0
+5/5
+Woste, Ewald
+5/5
+Wilkens, Deborah
+Segundo, Dr. Karen de
+5/5
+5/5
+5/5
+4/5
+Schmitz, Dr. Rolf Martin
+Fröhlich, Klaus
+5/57
+Grillo, Ulrich
+5/5
+5/5
+11/12
+Schmitz, Andreas
+5/5
+5/58
+The fair value of the E.ON Group's contingent liabilities was
+€0.4 billion as of December 31, 2020 (December 31, 2019:
+€1.3 billion). This value represents the best estimate of the
+expenditure required to settle the present obligation as of the
+reporting date and primarily includes contingent liabilities in
+connection with contingencies and potential long-term envi-
+ronmental remediation measures.
+Contingent Liabilities
+As part of its business activities, E.ON is subject to contingent
+liabilities and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees, obliga-
+tions from litigation and claims (as discussed in more detail in
+Note 29), short- and long-term contractual, legal and other
+obligations and commitments.
+E.ON has issued direct and indirect guarantees and surety bonds
+to third parties in connection with its own operations or the
+operations of affiliated companies, which may trigger payment
+obligations based on the occurrence of certain events. These
+instruments include both financial guarantees as well as opera-
+tional guarantees, which primarily secure contractual obligations
+and benefit obligations for active and former employees.
+(28) Contingent Liabilities and Other Financial
+Obligations
+Contractual liabilities under IFRS 15 in the amount of
+€3,803 million (2019: €3,502 million) consist primarily of con-
+struction grants that were paid by customers for the cost of new
+gas and electricity connections in accordance with the generally
+Notes
+Other operating liabilities consist primarily of other tax liabili-
+ties in the amount of €1,304 million (2019: €1,276 million)
+and interest payable in the amount of €399 million (2019:
+€469 million). This item also includes other liabilities to our cus-
+tomers from overpayments and refund claims of €506 million
+(2019: €284 million) and current personnel liabilities of
+€444 million (2019: €385 million). As of December 31, 2020,
+liabilities of €637 million arose from the corporate transactions
+mentioned in Note 5. Also included in other operating liabilities
+are carryforwards of counterparty obligations to acquire addi-
+tional shares in already consolidated subsidiaries as well as non-
+controlling interests in fully consolidated partnerships with
+legal structures that give their shareholders a statutory right of
+withdrawal combined with a compensation claim, in the amount
+of €2,271 million (2019: €2,069 million).
+binding terms governing such new connections. These grants
+are customary in the industry, generally non-refundable and
+recognized as revenue in the amount of €360 million according
+to the useful lives of the related assets.
+Derivative liabilities totaled €4,297 million as of December 31,
+2020 (2019: €4,989 million).
+Capital expenditure grants of €327 million (2019: €222 million)
+have not yet been recognized as revenue. The E.ON Group retains
+ownership of the assets. The grants are non-refundable and
+are recognized in other operating income over the period of the
+depreciable lives of the related assets.
+In addition, E.ON has entered into indemnification agreements,
+which as a rule are incorporated in agreements concerning the
+disposal of shareholdings and, above all, affect the customary
+representations and warranties with relation to liability risks for
+environmental damage and contingent tax risks. In some cases,
+obligations are covered in the first instance by provisions of the
+disposed companies before E.ON itself is required to make any
+payments. Guarantees issued by companies that were later sold
+by E.ON SE or its legal predecessors are usually included in the
+respective final sales contracts in the form of indemnities.
+192
+Moreover, E.ON has commitments under which it assumes
+joint and several liability arising from its interests in civil-law
+companies ("GbR"), non-corporate commercial partnerships
+and consortia in which it participates.
+193
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million
+and €15 million for claims related to officially ordered evacuation
+measures. Group companies have agreed to place their sub-
+sidiaries operating nuclear power plants in a position to maintain
+a level of liquidity that will enable them at all times to meet their
+obligations as members of the Nuklear Haftpflicht GbR, in pro-
+portion to their shareholdings in nuclear power plants.
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments,
+E.ON Energie AG ("E.ON Energie") and the other parent compa-
+nies of German nuclear power plant operators reached a Soli-
+darity Agreement ("Solidarvereinbarung") on July 11, July 27,
+August 21, and August 28, 2001, extended by agreement
+dated March 25, April 18, April 28, and June 1, 2011. If an
+accident occurs, the Solidarity Agreement calls for the nuclear
+power plant operator liable for the damages to receive-after
+the operator's own resources and those of its parent companies
+are exhausted-financing sufficient for the operator to meet
+its financial obligations. Under the Solidarity Agreement, E.ON
+Energie's share of the liability coverage on December 31, 2020,
+was 47.1 percent (prior year: 46.8 percent), plus an additional
+5.0 percent charge for the administrative costs of processing
+damage claims. This share will change to 35.1 percent starting
+from January 1, 2021. Sufficient liquidity has been provided for
+and is included within the liquidity plan.
+Furthermore, as of December 31, 2020, E.ON is continuing to
+provide collateral in the amount of €744.9 million for the former
+Group companies transferred to RWE which will be repaid or
+assumed by RWE Group companies in the short term. During
+the 2020 fiscal year, guarantees amounting to €2,266.4 million
+were redeemed as part of the exchange process with RWE.
+Other Financial Obligations
+In addition to provisions and liabilities carried on the balance
+sheet and to reported contingent liabilities, there also are other
+mostly long-term financial obligations arising mainly from
+contracts entered into with third parties, or on the basis of legal
+requirements.
+As of December 31, 2020, purchase commitments for invest-
+ments in intangible assets and in property, plant and equipment
+amounted to €1.7 billion (2019: €1.9 billion). Of these commit-
+ments, €1.2 billion are due within one year (2019: €1.2 billion).
+The purchase commitment mainly includes financial obligations
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Trade payables totaled €8,064 million as of December 31, 2020
+(2019: €8,782 million).
+for as yet outstanding investments, in particular in the Energy
+Networks Germany and Sweden segments. On December 31,
+2020, these obligations totaled €1.3 billion (2019: €1.4 billion).
+Additional long-term contractual obligations in place at the
+E.ON Group as of December 31, 2020, relate primarily to the
+purchase of electricity and natural gas. Financial obligations
+under the electricity purchase contracts amount to approximately
+€6.8 billion on December 31, 2020 (2019: €6.5 billion), of
+which €3.5 billion (2019: €3.7 billion) is due within one year).
+Financial obligations under the gas purchase contracts amount
+to approximately €4.8 billion on December 31, 2020 (2019:
+€4.4 billion). Of this amount, €2.4 billion (2019: €2.4 billion) is
+due within one year. Additional purchase commitments as of
+December 31, 2020, amounted to approximately €0.6 billion
+(2019: €0.6 billion). They include long-term contractual com-
+mitments to purchase heat and alternative fuels. Of these
+commitments, €0.1 billion (2019: €0.1 billion) are due within
+one year.
+There are non-material further financial obligations from joint
+ventures, from capital obligations concerning the acquisition of
+real estate funds held as financial assets and from corporate
+actions.
+The guarantees of E.ON also include items related to the opera-
+tion of nuclear power plants. Under the German Nuclear Energy
+Act ("Atomgesetz" or "AtG") and the ordinance regulating the
+provision for coverage under the Atomgesetz ("Atomrechtliche
+Deckungsvorsorge-Verordnung" or "AtDeckV") of April 27, 2002,
+German nuclear power plant operators are required to provide
+nuclear accident liability coverage of up to €2.5 billion per incident.
+Trade Payables and Other Operating Liabilities
+29,378 28,228
+¹Adjusted prior-year figures.
+87
+80
+229
+312
+Non-Core Business
+3
+3
+99
+102
+86
+Corporate Functions/Other
+29,019
+27,059
+50
+8
+728
+178
+199
+173
+192
+E.ON-Group
+29,019 27,059
+50
+607
+1,138
+2,615
+2,609
+600
+557 32,841 31,413
+2The previous year included liabilities from finance leases.
+83
+The fair values of existing instruments to hedge interest risk
+are determined by discounting future cash flows using market
+interest rates over the remaining term of the instrument.
+Discounted cash values are determined for interest rate, cross-
+currency
+and cross-currency interest rate swaps for each
+individual transaction as of the balance sheet date. Interest
+income and expenses are recognized in income at the date of
+payment or accrual.
+49,193
+-42
+Reclassification adjustments recognized in income
+Companies accounted for under the equity method
+Income taxes
+Balance as of December 31, 2020¹
+¹As of December 31, 2020, includes -€211 million (2019: -€241 million) from terminated cash flow hedges.
+2Of this amount, €19 million relates to hedged cash flows that are no longer expected to occur.
+-1,809
+1482
+40
+54
+54
+36
+-52
+The balance of the OCI arising from cash flow hedges as of
+December 31, 2020, contains -€1.5 billion relating to hedging
+of interest-rate risk (2019: -€1.2 billion).
+Reclassifications recognized in income are generally reported
+in that line item of the income statement which also includes
+the respective hedged transaction.
+The nominal volume of the hedging instruments is presented
+in the following table:
+Nominal Values of Hedging Instruments in Connection with Cash Flow Hedges
+€ in millions
+Currency risk
+Interest-rate risk
+-42
+Electricity price change risk
+Unrealized changes-reserve for hedging costs
+-379
+Unrealized changes-reserve for hedging costs
+-3
+-3
+Reclassification adjustments recognized in income
+-12
+-74
+54
+8
+Companies accounted for under the equity method
+9
+Income taxes
+1
+Balance as of December 31, 2019¹
+-1,435
+Balance as of January 1, 2020
+Unrealized changes-hedging reserve
+-1,435
+-464
+-45
+-40
+Maturity
+Total
+<1 year
+610
+197
+The development of OCI arising from net investment hedges
+is as follows:
+Changes in OCI Arising from Net Investment Hedges
+€ in millions
+Balance as of January 1, 2019
+Currency risk
+-77
+Unrealized changes-hedging reserve
+-140
+Unrealized changes-reserve for hedging costs
+1
+Reclassification adjustments recognized in income
+565
+Income taxes
+1
+Balance as of December 31, 2019¹
+350
+Balance as of January 1, 2020
+350
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+As in 2019, no ineffectiveness resulted from net investment
+hedges in 2020.
+1-5 years
+>5 years
+2020
+2019
+1,632
+1,329
+3,571
+1,903
+1,045
+9
+-43
+500
+4,295
+4,304
+17
+26
+352
+Net Investment Hedges
+The Company uses foreign currency forwards, foreign currency
+swaps and foreign currency loans to protect the value of its net
+investments in its foreign operations denominated in foreign
+currency.
+The carrying amount of the assets used as hedging instruments
+as of December 31, 2020, was €7 million (2019: €27 million) and
+the carrying amount of the liabilities used as hedging instruments
+was €1,165 million (2019: €1,220 million). The fair values of
+the designated portion of the hedging instruments changed by
+€117 million in the reporting period (2019: -€87 million).
+2,750
+Unrealized changes-hedging reserve
+-370
+-438
+In commodities, potentially volatile future cash flows resulting
+primarily from planned purchases and sales of electricity
+within and outside of the Group are hedged.
+To hedge currency risk, E.ON entered into hedging transactions
+in the reporting year in pounds sterling at an average hedging
+rate of £0.91/€ (2019: £0.86/€) and in U.S. dollars at an average
+hedging rate of US$1.36/€ (2019: US$1.17/€). Hedging trans-
+actions were concluded at an average interest rate of 3.43 per-
+cent (2019: 3.43 percent) to hedge the interest rate risk in the
+euro zone. The average hedging price for hedging electricity
+price change risks amounted to €48.06/MWh in the year under
+review (2019: €47.10/MWh).
+Fair Value Hedges
+Fair value hedges are used to protect against the risk from
+changes in market values. Gains and losses on these hedges are
+generally reported in that line item of the income statement
+which also includes the respective hedged items.
+Cash Flow Hedges
+Cash flow hedges are used to protect against the risk arising
+from variable cash flows. Interest rate swaps and cross-currency
+interest rate swaps are the principal instruments used to limit
+interest rate and currency risks. The purpose of these swaps is to
+maintain the level of payments arising from long-term interest-
+bearing receivables and liabilities and from capital investments
+denominated in foreign currency and euro by using cash flow
+hedge accounting in the functional currency of the respective
+E.ON company.
+In order to reduce future cash flow fluctuations arising from
+electricity transactions effected at variable spot prices, futures
+contracts are concluded and also accounted for using cash flow
+hedge accounting.
+The following table presents the carrying amounts of the
+hedging instruments and the changes in the fair values of the
+hedging instruments and hedged items by hedged risk type:
+Carrying Amounts of Hedging Instruments and Changes in Fair Value of Hedging Instruments and Hedged
+Items in Connection with Cash Flow Hedges
+€ in millions
+Currency risk
+Interest-rate risk
+Electricity price change risk
+Receivables from
+derivative financial
+instruments
+2020
+2019
+2020
+2019
+195
+91
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+measures.
+147
+The changes to the legal and regulatory framework can in some
+cases also significantly impact subsidies and remuneration
+practices in the area of Renewables, which in turn are the object
+of regulatory or court proceedings.
+There are also legal proceedings in connection with completed
+M&A activities, in particular as a result of the acquisition of
+innogy SE.
+On April 13, 2017, the Federal Constitutional Court declared
+the Nuclear Fuel Tax Act to be incompatible with the Basic Law
+and invalid. The nuclear-fuel tax plus interest paid by E.ON was
+refunded. Nuclear operators use two models for the calculation
+of interest with the German customs authorities, one of which
+is used by Preussen Elektra. With the 16th amendment to the
+German Nuclear Energy Act, the German Federal Government
+has implemented the ruling of the German Federal Constitutional
+Court on the phase-out of nuclear energy. This amendment
+regulated compensation claims for certain investments and
+residual volumes of electricity, and created an obligation to offer
+these residual volumes at reasonable terms and conditions. In
+its ruling of September 29, 2020, the German Federal Constitu-
+tional Court determined that the 16th amendment to the Nuclear
+Energy Act never entered into force due to a procedural error
+on the part of the legislature; for this reason, and also in view of
+deficiencies in its content, lawmakers must introduce a new
+regulation. Preussen Elektra sued Krümmel GmbH & Co. OHG
+and Vattenfall Europe Nuclear Energy GmbH with the aim of
+transferring, without compensation, the residual volumes of
+electricity from the Krümmel nuclear power plant corresponding
+to the ownership interest. Based on the understanding between
+the responsible German Federal Ministries and the four nuclear
+power plant operators published at the beginning of March 2021,
+there are also plans to transfer the residual quantities of elec-
+tricity corresponding to the legal stake in the power plants jointly
+owned with Vattenfall free of charge to Preussen Elektra and to
+use them for generation in the Group's own power plants. The
+validity of this understanding is still pending its legal implemen-
+tation. A price will be agreed for the additional quantities required
+to operate the nuclear power plants beyond the end date stipu-
+lated under the German Nuclear Energy Act.
+Notes
+194
+(30) Supplemental Cash Flow Disclosures
+Note 5 provides a detailed presentation of the acquisition of the
+shares in innogy. The comparative figures for the previous year
+relate to additions and disposals outside the scope of the innogy
+transaction.
+Not including the acquisition of innogy, E.ON made no external
+payments for additions to consolidated equity interests (2019:
+€92 million). The only addition was the non-cash acquisition of
+the VSEH Group from RWE; the purchase price was €740 million.
+The cash acquired totaled €6 million (2019: €16 million).
+Assets in the amount of €1,534 million (2019: €166 million)
+and provisions and liabilities in the amount of €604 million
+(2019: €161 million) were recognized.
+The total consideration received by E.ON in 2020 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €921 million (2019: €37 million). Cash and cash equiva-
+lents sold amounted to €88 million (2019: €32 million). The sale
+of the consolidated activities led to reductions of €1,182 million
+(2019: €742 million) in assets and €482 million (2019: €10 mil-
+lion) in provisions and liabilities. The derecognition of assets and
+liabilities primarily relates to the sale of the heating electricity
+companies and innogy's sales business in the Czech Republic.
+At €5.9 billion, cash provided by operating activities before
+interest and taxes from continuing and discontinued operations
+was significantly higher than in the prior year (€4.4 billion). The
+Energy Networks segment recorded an increase (+€1.9 billion)
+due to positive working capital effects in the former E.ON net-
+work business and the first-time inclusion of innogy's network
+activities for a full year. Cash flow from operating activities in
+the Customer Solutions segment was €0.4 billion below the
+prior-year level. This development is mainly attributable to the
+first-time inclusion of innogy's activities in the UK for a full
+year and to the change in the presentation of segments, also for
+the previous year, for comparative purposes. The contribution
+from Renewables decreased compared with the previous year
+(-€0.2 billion). Cash provided by operating activities from con-
+tinuing and discontinued operations also increased due to lower
+tax payments (+€0.8 billion), while higher interest payments
+on innogy's debt had a negative impact (-€0.1 billion).
+Cash provided by investing activities from discontinued opera-
+tions amounted to -€1.9 billion (2019: -€5.8 billion). Whereas in
+the previous year €1.6 billion was reported as a payment for the
+acquisition of the innogy shares, the cash flow from investing
+activities in the current fiscal year was reduced by an additional
+purchase price payment by RWE (€0.4 billion). In addition, the
+receipt of payments in the first quarter of 2020 from the trans-
+fer of the indirect share in Nord Stream AG to the CTA, which
+was already carried out in 2019, the sale of innogy's sales busi-
+ness in the Czech Republic, a prepayment in connection with the
+agreed sale of the stake in Rampion and the sale of significant
+parts of the heating electricity business in Germany had a posi-
+tive impact on investment cash flow.
+At -€2.6 billion, cash provided by financing activities of con-
+tinuing and discontinued operations was €3.4 billion less than
+the prior-year figure of +€0.8 billion. This was due in particular
+to payments in the course of the settlement of the remaining
+minority interests at innogy SE and a higher dividend at E.ON SE
+compared with the prior year.
+(31) Derivative Financial Instruments and
+Hedging Transactions
+Strategy and Objectives
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+At the E.ON Group, hedge accounting in accordance with IFRS 9
+is employed primarily in connection with hedging long-term
+liabilities and future financing via interest-rate derivatives and
+for hedging long-term foreign currency receivables and payables
+and foreign investments via currency derivatives. E.ON also
+hedges net investments in foreign operations.
+Combined Group Management Report
+140
+105
+64
+15
+The amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2020, produced an expense of
+€5 million (2019: €12 million). Of this amount, €4 million relates
+to hedging of interest-rate risk (2019: €12 million).
+Gains and losses from the ineffective portions of cash flow hedges
+are classified as other operating income or other operating
+expenses.
+Notes
+The development of OCI arising from cash flow hedges, broken
+down by hedged risk type, is as follows:
+Changes in OCI Arising from Cash Flow Hedges
+196
+Electricity
+Interest-rate
+price change
+€ in millions
+Balance as of January 1, 2019
+Unrealized changes-hedging reserve
+Total
+Currency risk
+risk
+risk
+-992
+-17
+-15
+17
+423
+Carrying amount
+Liabilities from
+derivative financial
+instruments
+Change in the fair value
+of the designated portion
+of hedging instruments
+2020
+-49
+Change in the fair value
+of hedged items
+2019
+2020
+2019
+9
+50
+-25
+-8
+86
+1,706
+2
+10
+1
+1,350
+25
+-383
+-435
+379
+114
+82
+Unrealized changes-reserve for hedging costs
+-1
+1,016
+1,016
+AmC
+1,002
+25,403
+19,452
+Financial liabilities
+32,841
+32,528
+Bonds
+29,019
+29,019
+AmC
+30,963
+29,752
+Bank loans/Liabilities to banks
+607
+607
+AmC
+AmC
+Lease obligations
+2,668
+Total assets
+157
+2,998
+2,998
+2,998
+2,261
+737
+1,486
+FVPL
+1,486
+826
+660
+1,512
+FVOCI
+1,512
+1,435
+77
+Cash and cash equivalents
+Restricted cash
+Assets held for sale
+2,668
+2,615
+2,606
+n/a
+n/a
+1,893
+1
+1,892
+Put option liabilities under IAS 322
+2,271
+2,271
+AmC
+2,280
+Other operating liabilities
+9,182
+2,170
+AmC
+2,136
+1,120
+Liabilities associated with assets held for sale
+185
+Total liabilities
+56,840
+1,893
+1,893
+Derivatives with hedging relationships
+2,204
+Other financial liabilities
+600
+296
+AmC
+607
+2,576
+293
+1,211
+31
+27
+Trade payables and other operating liabilities
+23,814
+3
+16,665
+8,064
+7,927
+AmC
+Derivatives with no hedging relationships
+2,404
+2,404
+FVPL
+2,404
+85
+Trade payables
+515
+AmC
+515
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2020
+198
+Carrying
+amounts
+within the
+Carrying
+amounts
+Determined
+Derived from
+within the
+using market active market
+Carrying
+scope of
+scope of
+�� in millions
+amounts
+IFRS 7
+IFRS 9
+Fair value
+prices
+(Level 1)
+prices
+(Level 2)
+The carrying amounts of the financial instruments, their grouping
+into IFRS 9 measurement categories, their fair values and their
+measurement sources by class are presented in the following
+table:
+(32) Additional Disclosures on Financial
+Instruments
+Notes
+Certain long-term energy contracts are valued with the aid
+of valuation models that use internal data if market prices
+are not available. A hypothetical 10-percent increase or
+decrease in these internal valuation parameters as of the
+balance sheet date would lead to a theoretical change in
+market values of ±€19 million.
+-166
+Reclassification adjustments recognized in income
+Income taxes
+Balance as of December 31, 2020¹
+265
+¹As of December 31, 2020, includes -€71 million (2018: -€71 million) from terminated net
+investment hedges.
+As a rule, reclassifications recognized in income are reported
+under other operating income and expenses. The nominal volume
+of hedging instruments in net investment hedges amounted to
+€4,945 million as of December 31, 2020 (2019: €7,891 million).
+Since the currency risk of net investment hedges is hedged
+through the ongoing rollover of the hedging instruments, the major-
+ity are concluded with a remaining term of less than one year.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant vari-
+ables. The Company assesses and monitors the fair value of
+derivative instruments on a periodic basis. The fair value to be
+determined for each derivative instrument is the price that
+would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants on the
+measurement date (exit price). E.ON also takes into account the
+counterparty credit risk for both own credit risk (debt value
+adjustment) and the risk of the corresponding counterparty
+(credit value adjustment) when determining fair value. The fair
+values of derivative instruments are calculated using common
+market valuation methods with reference to available market
+data on the measurement date.
+Equity investments
+The following is a summary of the methods and assumptions
+for the valuation of utilized derivative financial instruments in
+the Consolidated Financial Statements.
+•
+•
+•
+•
+Currency, electricity, gas and oil forward contracts, swaps,
+and emissions-related derivatives are valued separately at
+their forward rates and prices as of the balance sheet date.
+Whenever possible, forward rates and prices are based on
+market quotations, with any applicable forward premiums
+and discounts taken into consideration.
+Market prices for electricity options are valued using standard
+option pricing models commonly used in the market.
+(29) Litigation and Claims
+Equity forwards are valued on the basis of the stock prices of
+the underlying equities, taking into consideration any timing
+components.
+Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the
+futures markets that are published by their respective clear-
+ing houses. Paid initial margins are disclosed under other
+assets. Variation margins received or paid during the term of
+such contracts are stated under other liabilities or other
+assets, respectively.
+•
+¹FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation
+techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).
+1,883
+FVPL
+11,407
+7,714
+7,615
+AmC
+3,063
+3,063
+FVPL
+3,063
+100
+2,833
+214
+214
+n/a
+214
+2
+212
+Other operating assets
+Securities and fixed-term deposits
+3,778
+14,769
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Trade receivables
+Trade receivables and other operating assets
+501
+73
+Financial receivables and other financial assets
+Receivables from finance leases
+1,067
+862
+289
+257
+n/a
+257
+501
+Other financial receivables and financial assets
+605
+605
+482
+AmC
+482
+150
+123
+FVPL
+123
+778
+128
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or may
+be instituted or asserted in the future against companies of the
+E.ON Group. This in particular includes legal actions and proceed-
+ings on contract amendments and price adjustments initiated
+in response to market upheavals and the changed economic sit-
+uation in the electricity and gas sectors (also as a consequence
+of the energy transition) and concerning price increases and
+anticompetitive practices. The courts and authorities are also
+subjecting competitive practices to stricter reviews.
+14
+Oct 2026
+0.250%
+E.ON SE
+1,000 million EUR
+7.5 years
+Sep 2027
+0.375%
+E.ON International Finance B.V.
+850 million EUR
+10 years
+Oct 2027
+1.250%
+E.ON SE
+500 million EUR
+8 years
+7 years
+Feb 2028
+750 million EUR
+1.625%
+0.000%
+E.ON International Finance B.V.
+750 million EUR
+8 years
+Apr 2025
+1.000%
+E.ON SE
+750 million EUR
+5.5 years
+Oct 2025
+1.000%
+E.ON International Finance B.V.
+500 million EUR
+8 years
+May 2026
+E.ON SE
+Aug 2024
+0.750%
+750 million EUR
+500 million EUR
+11 years
+Dec 2030
+0.750%
+E.ON SE
+500 million EUR
+11 years
+Aug 2031
+0.875%
+E.ON SE
+500 million EUR
+12 years
+Nov 2031
+0.625%
+E.ON International Finance B.V.3
+E.ON SE
+E.ON SE
+6.250%
+28 years
+12 years
+May 2029
+1.625%
+E.ON International Finance B.V.
+1,000 million EUR
+12 years
+Jul 2029
+1.500%
+E.ON SE
+750 million EUR
+11 years
+Feb 2030
+0.350%
+E.ON International Finance B.V.
+760 million GBP
+Jun 2030
+975 million GBP
+5 years
+E.ON SE
+13 years
+Aug 2021
+6.500%
+E.ON SE
+750 million EUR
+4 years
+Aug 2021
+0.375%
+E.ON International Finance B.V.
+500 million GBP
+13 years
+Jul 2022
+5.500%
+E.ON SE
+500 million EUR
+1,000 million EUR
+4 years
+E.ON International Finance B.V.
+Apr 2021
+In the Energy Networks segment, Group companies are involved
+in proceedings for the award of concessions and in connection
+with grid connections and the calculation of the grid fee. Official
+regulations and changes in regulatory practice have given rise
+to legal disputes. Of particular note here are effects in connection
+with the regulatory treatment of capital costs and return on
+equity. The national regulatory regimes within Europe are also
+subject to changes, some of which have a significant impact on
+network operations. Owing to a number of factors, including
+regulatory and legal decisions, the regulatory framework has
+increased here. However, these regulatory interventions are not
+restricted to the network area; distribution activities in the
+customer solutions area have also been affected by regulatory
+85
+At year-end 2020, the following E.ON SE and E.ON Interna-
+tional Finance B.V. bonds were outstanding:
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+189
+Issuer
+Volume in the
+respective currency
+Initial term
+Repayment
+Coupon
+E.ON International Finance B.V.
+570 million GBP
+20 years
+6.500%
+750 million EUR
+Sep 2022
+E.ON SE
+E.ON SE
+750 million EUR
+4 years
+Dec 2023
+0.000%
+E.ON International Finance B.V.
+800 million EUR
+10 years
+Jan 2024
+3.000%
+E.ON SE
+500 million EUR
+7 years
+May 2024
+0.875%
+5.625%
+0.000%
+Dec 2023
+488 million GBP
+750 million EUR
+3 years
+0.000%
+E.ON International Finance B.V.2
+750 million EUR
+5
+o years
+Nov 2022
+0.750%
+E.ON SE
+1,000 million EUR
+3 years
+Apr 2023
+0.375%
+E.ON International Finance B.V.
+20 years
+30 years
+Oct 2022
+6.375%
+2,092
+241
+167
+2020
+2,817 2,492
+239
+203 2,016
+2,002
+238
+176
+2,493
+2,381
+13
+5
+1
+14
+233 2,112
+5
+464
+UK
+Bonds Commercial paper
+2019
+2019
+2020
+Liabilities to banks
+2020 2019
+Lease obligations²
+2020
+2019
+2020
+Other financial
+liabilities
+2019
+Financial liabilities
+2019
+Energy Networks
+Germany
+Sweden
+ECE/Turkey
+Customer Solutions
+Germany Sales
+Netherlands/Belgium
+2020
+225
+83
+96
+94
+130
+1
+14
+95
+144
+46
+49
+2
+6
+48
+Jun 2032
+55
+Other
+172
+30
+15
+-11
+85
+2
+-9
+310
+106
+135
+177
+322
+315
+87
+115
+544
+607
+92
+54
+-3
+€ in millions
+121
+191
+30 years
+Jan 2039
+6.750%
+E.ON International Finance B.V.
+1,000 million GBP
+30 years
+Jul 2039
+6.125%
+¹Listing: All bonds ≥ 500 million EUR are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+2The volume of this issue was raised from originally EUR 500 million to EUR 750 million.
+3The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+4Rule 144A/Regulation S bond.
+Additionally outstanding as of December 31, 2020, were private
+placements with a total volume of approximately €1.7 billion
+(2019: €1.7 billion).
+Notes
+190
+€3.5 Billion Syndicated Revolving Credit Facility
+Effective October 24, 2019, E.ON arranged a syndicated revolv-
+ing credit facility in the amount of €3.5 billion over an original
+term of five years, with two renewal options for one year each.
+The first option to extend the credit line by a further year was
+exercised in October 2020. The credit margin of the facility is in
+part coupled with the development of certain ESG ratings on
+which E.ON bases financial incentives for a sustainable corporate
+strategy. The ESG ratings are calculated by three prominent
+agencies: ISS ESG, MSCI ESG Research, and Sustainalytics. The
+facility was granted by 21 banks, which make up E.ON's core
+banking group. The facility has not been drawn; rather, it serves
+as the Group's reliable, long-term liquidity reserve, one purpose
+of which is to function as a backup facility for the commercial
+paper programs.
+Acquisition Financing of €1.75 Billion
+700 million GBP
+6.650%
+Apr 2038
+30 years
+30 years
+600 million EUR
+Bank loans/
+E.ON International Finance B.V.
+Feb 2033
+5.750%
+E.ON International Finance B.V.
+In connection with the acquisition of innogy SE, on April 6, 2018,
+E.ON originally secured a €5 billion acquisition facility, which
+was reduced to €1.75 billion by August 2018. With the comple-
+tion of the squeeze-out of the remaining minority shareholders
+of innogy, the credit line was terminated in June 2020; the line
+was not drawn on.
+600 million GBP
+Jan 2034
+4.750%
+E.ON International Finance B.V.
+E.ON International Finance B.V.4
+E.ON International Finance B.V.
+900 million GBP
+Oct 2037
+5.875%
+1,000 million USD
+22 years
+€10 Billion and $10 Billion Commercial Paper Programs
+30 years
+The bonds issued by E.ON SE and E.ON International Finance B.V.
+(guaranteed by E.ON SE) and innogy Finance B.V. (guaranteed
+by innogy SE) have the maturities presented in the table below.
+Liabilities denominated in foreign currency include the effects
+of economic hedges, and the amounts shown here may there-
+fore vary from the amounts presented on the balance sheet.
+11,084
+8,662
+December 31, 2019
+25,011
+2,150
+2,420
+2,688
+2,642
+8,382
+Financial Liabilities by Segment
+The following table breaks down the financial liabilities by
+segment:
+Financial Liabilities by Segment as of December 31¹
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to two years less one day to investors.
+The U.S. commercial paper program in the amount of $10 billion
+allows E.ON SE to issue from time to time commercial paper
+with maturities of up to 366 days and extendible notes with
+original maturities of up to 397 days (and a subsequent extension
+option for the investor) to investors. As of December 31, 2020,
+no commercial paper was outstanding under either the euro
+commercial paper program (2019: €50 million) and the U.S.
+commercial paper program (2019: €0 million).
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+8,448
+2,656
+923
+27,428
+Due in
+2,384
+Bonds Issued by E.ON SE, E.ON International Finance B.V. and innogy Finance B.V.
+Due in
+Due in
+Due in
+Total
+2020
+€ in millions
+2021
+2022
+2023
+Due between
+2024 and
+2030
+Due
+after 2030
+December 31, 2020
+3,476
+AmC
+3,476
+Other operating liabilities
+8,709
+FVPL
+3,476
+65
+Derivatives with no hedging relationships
+3,084
+25
+1,513
+1,513
+n/a
+1,513
+1,488
+Put option liabilities under IAS 323
+2,069
+2,069
+8,782
+AmC
+2,069
+Derivatives with hedging relationships
+Trade payables
+1,256
+64
+24,541
+27,059
+27,059
+8,701
+AmC
+29,935
+28,679
+Bank loans/Liabilities to banks
+1,138
+1,138
+AmC
+1,147
+70
+Lease obligations
+2,609
+2,598
+n/a
+2,697
+Other financial liabilities
+607
+325
+AmC
+325
+1
+92
+Trade payables and other operating liabilities
+17,496
+1,729
+into
+Level 3
+1,752
+Settlements
+Gains/
+Losses in
+income
+statement
+Transfers
+out of Level
+3
+Equity investments
+389
+65
+-2
+-19
+Derivative financial
+disposals)
+instruments
+-16
+-54
+Total
+474
+65
+-2
+-16
+-73
+The extent to which the offsetting of financial assets is covered
+by netting agreements is presented in the following tables:
+Bonds
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2020
+85
+additions)
+Sales
+(including
+Jan. 1, (including
+2020
+Liabilities associated with assets held for sale
+602
+245
+214
+AmC
+214
+31
+FVPL
+31
+31
+56,556
+48,861
+Total liabilities
+¹Adjusted prior-year figures.
+2FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation
+techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+³Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).
+Notes
+200
+The fair value of shareholdings in unlisted companies and of
+debt instruments that are not actively traded, such as loans
+received, loans granted and financial liabilities, is determined by
+discounting future cash flows. Any necessary discounting takes
+place using current market interest rates over the remaining
+terms of the financial instruments.
+The determination of the fair value of derivative financial instru-
+ments is discussed in Note 31.
+In 2020, there were no material reclassifications between
+Levels 1 and 2 of the fair value hierarchy. At the end of
+each reporting period, E.ON assesses whether there might
+be grounds for reclassification between hierarchy levels.
+The input parameters of Level 3 of the fair value hierarchy for
+equity investments are specified taking into account economic
+developments and available industry and corporate data (see
+also Note 1). A hypothetical 10-percent increase or decrease in
+these key internal valuation parameters as of the balance sheet
+date would lead to a theoretical change in market values of
++€23 million.
+The fair values determined using valuation techniques for financial
+instruments carried at fair value are reconciled as shown in the
+following table:
+Fair Value Hierarchy Level 3 Reconciliation
+Purchases
+€ in millions
+AmC
+31,120
+Other financial receivables and financial assets
+Financial liabilities
+FVPL
+455
+66
+Financial receivables and other financial assets
+Receivables from finance leases
+1,189
+817
+370
+336
+n/a
+336
+819
+455
+481
+341
+AmC
+341
+1
+160
+140
+FVPL
+140
+Trade receivables and other operating assets
+Trade receivables
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+481
+17,799
+1,730
+(Level 2)
+།
+in above short-term leases
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+199
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable
+estimates of their fair values because of their short maturity.
+Where the fair value of a financial instrument can be derived
+from an active market without the need for an adjustment,
+that value is used as the fair value. This applies in particular to
+equities held and to bonds held and issued.
+Carrying Amounts, Fair Values and Measurement Categories by Class
+within the Scope of IFRS 7 as of December 31, 2019¹
+Carrrying
+amounts
+within the
+Carrying
+amounts
+Equity investments
+within the
+Derived from
+active market
+Carrying
+scope of
+€ in millions
+amounts
+IFRS 7
+scope of
+IFRS 92
+Fair value
+prices
+(Level 1)
+prices
+Determined
+using market
+13,157
+8,364
+8,176
+1,936
+1,512
+424
+1,615
+FVOCI
+1,615
+1,519
+96
+Cash and cash equivalents
+Restricted cash
+Assets held for sale
+FVPL
+Total assets
+1,894
+AmC
+511
+511
+AmC
+1,366
+15
+AmC
+15
+28,040
+20,400
+1,894
+1,936
+520
+3,031
+AmC
+3,022
+3,022
+FVPL
+3,022
+40
+263
+263
+n/a
+263
+10
+22
+2,570
+253
+Other operating assets
+Securities and fixed-term deposits
+6,150
+1,696
+AmC
+1,700
+3
+95
+3,551
+3,551
+3,551
+31,413
+Gains/
+Losses in
+8,152
+Dec. 31,
+2020
+Cash
+outflows
+2021
+outflows
+2022
+Cash
+outflows
+2023-2025
+3,169
+3,229
+Cash
+outflows
+from 2026
+20,787
+139
+26
+199
+Cash
+341
+426
+1,087
+1,942
+274
+24
+1
+8
+1
+7
+4,092
+3,705
+510
+9,440
+Cash outflows for financial liabilities
+Other financial liabilities
+2,187
+1,029
+178
+980
+Total
+14,376
+678
+13,698
+1,029
+639
+12,030
+Financial guarantees
+The E.ON Group did not net interest-rate and currency derivatives
+and non-derivative financial instruments. Compulsory netting
+is carried out for commodity derivatives if the netting criteria
+pursuant to IAS 32.42 are met cumulatively.
+The netting agreements are derived from netting clauses con-
+tained in master agreements including those of the International
+Swaps and Derivatives Association (ISDA), the German Master
+Agreement for Financial Derivatives Transactions (DRV), the
+European Federation of Energy Traders (EFET) and the Financial
+Energy Master Agreement (FEMA).
+Collateral pledged to and received from financial institutions in
+relation to these liabilities and assets limits the utilization of
+credit lines in the fair value measurement of interest-rate and
+currency derivatives, and is shown in the table. The collateral for
+commodity derivatives presented in the table relates to variation
+margin payments.
+Notes
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities included
+in the scope of IFRS 7:
+Cash Flow Analysis as of December 31, 2020
+202
+€ in millions
+Bonds
+Commercial paper
+Bank loans/Liabilities to banks
+Lease obligations
+Transactions and business relationships resulting in the deriva-
+tive financial receivables and liabilities presented are largely
+concluded on the basis of standard contracts that permit the
+conditional netting of open transactions in the event that a
+counterparty becomes insolvent.
+678
+23,085
+7,927
+Commercial paper
+Bank loans/Liabilities to banks
+Lease obligations
+Other financial liabilities
+Financial guarantees
+Cash outflows for financial liabilities
+Trade payables
+Derivatives (with/without hedging relationships)
+Put option liabilities under IAS 32
+Other operating liabilities
+Cash outflows for trade payables and other operating liabilities
+Bonds
+Cash outflows for liabilities within the scope of IFRS 7
+Cash
+outflows
+2020
+Cash
+outflows
+2021
+Cash
+outflows
+2022-2024
+Cash
+outflows
+from 2025
+3,276
+3,427
+7,455
+20,102
+50
+¹Adjusted prior-year figures.
+Trade payables
+€ in millions
+26,175
+Derivatives (with/without hedging relationships)
+8,402
+712
+913
+2,994
+Put option liabilities under IAS 32
+2,167
+10
+20
+76
+Other operating liabilities
+Cash Flow Analysis as of December 31, 2019¹
+2,148
+2
+20
+Cash outflows for trade payables and other operating liabilities
+20,644
+728
+935
+3,090
+Cash outflows for liabilities within the scope of IFRS 7
+24,736
+4,433
+10,375
+6
+2,865
+2,341
+461
+3
+972
+Total
+11,278
+387
+10,891
+769
+11
+10,111
+Financial liabilities
+Trade payables
+769
+7,927
+7,927
+Interest-rate and currency derivatives
+3,179
+3,179
+976
+2,203
+Commodity derivatives
+1,506
+387
+1,119
+542
+7,927
+132
+1,744
+2,131
+-5
+428
+15
+-5
+443
+Conditional
+Gross
+amount
+Amount
+offset
+Carrying
+amount
+netting
+amount
+(netting
+agreements)
+Financial
+collateral
+received/
+pledged
+387
+Net value
+Financial assets
+Trade receivables
+7,615
+7,615
+7,615
+Interest-rate and currency derivatives
+1,532
+1,532
+8
+1,524
+Commodity derivatives
+€ in millions
+445
+Total
+12,612
+1,585
+68
+1,517
+Commodity derivatives
+2,378
+678
+1,700
+1,064
+10
+626
+Total
+1,585
+12,213
+11,535
+1,064
+78
+10,393
+Financial liabilities
+Trade payables
+8,709
+8,709
+Interest-rate and currency derivatives
+Commodity derivatives
+2,802
+2,802
+678
+Interest-rate and currency derivatives
+8,250
+8,250
+387
+12,225
+542
+1,108
+10,575
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2019
+€ in millions
+Financial assets
+201
+Conditional
+netting
+amount
+Gross
+amount
+Amount
+offset
+Carrying
+amount
+(netting
+Financial
+collateral
+received/
+agreements)
+pledged
+Net value
+Trade receivables
+8,250
+OCI
+8,709
+3
+946
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON consist
+of ensuring ability to pay at all times, the timely satisfaction of
+contractual payment obligations and the optimization of costs
+within the E.ON Group.
+Cash pooling and external financing are largely centralized at
+E.ON SE and certain financing companies. Funds are provided
+to the other Group companies as needed on the basis of an
+"in-house banking" solution.
+E.ON SE determines the Group's financing requirements on the
+basis of short- and medium-term liquidity planning. The financing
+of the Group is controlled and implemented on a forward-looking
+basis in accordance with the planned liquidity requirement or
+surplus. Relevant planning factors taken into consideration include
+operating cash flow, capital expenditures, divestments, margin
+payments and the maturity of bonds and commercial paper.
+2. Price Risks
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest
+rates, commodities and asset management. These risks create
+volatility in earnings, equity, debt and cash flows from period
+to period. E.ON has developed a variety of strategies to limit or
+eliminate these risks, including the use of derivative financial
+instruments, among others.
+3. Credit Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Uniform credit risk
+management procedures are in place throughout the Group to
+identify, measure and steer credit risks.
+The following discussion of E.ON's risk management activities
+and the estimated amounts generated from value-at-risk ("VaR")
+and sensitivity analyses are "forward-looking statements" that
+involve risks and uncertainties. Actual results could differ mate-
+rially from those projected due to actual, unforeseeable develop-
+ments in the global financial markets. The methods used by the
+Company to analyze risks should not be considered forecasts of
+future events or losses. For example, E.ON faces certain risks that
+are either non-financial or non-quantifiable. Such risks princi-
+pally include country risk, operational risk, regulatory risk and
+legal risk, which are not represented in the following analyses.
+Foreign Exchange Risk Management
+E.ON SE is responsible for controlling the currency risks to
+which the E.ON Group is exposed.
+Because it holds interests in businesses outside of the euro area,
+currency translation risks arise within the E.ON Group. Fluctua-
+tions in exchange rates produce accounting effects attributable
+to the translation of the balance sheet and income statement
+items of the foreign consolidated Group companies included in
+the Consolidated Financial Statements. Translation risks are
+hedged through borrowing in the corresponding local currency,
+which may also include shareholder loans in foreign currency.
+In addition, derivative and non-derivative financial instruments
+are employed as needed. The hedges qualify for hedge accounting
+under IFRS as hedges of net investments in foreign operations.
+The Group's translation risks are reviewed at regular intervals
+and the level of hedging is adjusted whenever necessary. The
+respective debt factor, net assets and the enterprise value
+denominated in the foreign currency are the principal criteria
+governing the level of hedging.
+The E.ON Group is also exposed to operating and financial
+transaction risks attributable to foreign currency transactions.
+The subsidiaries are responsible for managing their operating
+currency risks and are generally required to hedge their currency
+risks through E.ON SE. E.ON SE coordinates hedging throughout
+the Group companies and makes use of external derivatives as
+needed. It may either directly close out foreign currency positions
+that have been tendered, in whole or in part, through external
+transactions, or keep the position open within approved limits.
+The one-day value-at-risk (95 percent confidence) for transactional
+foreign currency positions totaled €0.5 million as of December 31,
+2020 (2019: €1.1 million).
+Financial transaction risks result from payments originating
+from financial receivables and payables. They are generated both
+by external financing in a variety of foreign currencies, and by
+shareholder loans from within the Group denominated in foreign
+currency. Financial transaction risks are generally hedged.
+Notes
+206
+Interest Risk Management
+Commodity exposures and risks are reported across the Group
+on a monthly basis to the members of the Risk Committee for
+both the E.ON and the innogy portfolios. A report on complex
+weather risks is prepared once each quarter.
+Commodity risks at the innogy distribution companies are
+hedged in accordance with the hedging guidelines of innogy SE.
+Commodity risks are hedged using limits. Policies applicable to the
+entire Group specify clear structures and processes for handling
+commodity risks. They are consistent with the basic requirements
+for commodity risk management within the E.ON Group. The
+steering approach was harmonized for all innogy portfolios that
+fall within the central governance of E.ON SE in the fourth quar-
+ter of 2020.
+A key foundation of the commodity risk management system is
+the Group-wide Commodity Risk Policy and the corresponding
+internal policies of the units. These specify the control principles
+for commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+As of December 31, 2020, the E.ON Group primarily held elec-
+tricity and gas s derivatives with a nominal value of €24,662 million
+(2019: €32,831 million).
+Due to the decentralized governance approach and the primary
+focus on procurement and purely hedging transactions, the
+allocation of risk capital is no longer necessary. The processes
+and operational management models within the trading system
+are monitored by the local market risk teams and centrally
+managed by the Risk Management department. At the end of
+2019, the open position from the procurement on the markets
+in Germany, the UK, the Czech Republic, Sweden, Romania,
+Hungary and the innogy companies for the reporting period from
+2020 to 2022 was not more than 4,100 GWh per commodity
+in each case. The biggest drivers primarily relate to the special
+market conditions in Romania, where hedging activities are
+carried out within the approved commodity hedging strategy.
+Since the spinoff of Uniper, E.ON has established procurement
+capabilities for its sales business and thus ensured market access
+for E.ON's remaining energy production. In the normal course
+of business of the underlying energy production and retail sales
+activities, E.ON's individual management units are exposed to
+uncertain commodity market prices, which impacts operating
+gains and costs. All external trading on commodity markets
+must be related to reducing open commodity positions and be
+undertaken in strict accordance with approved commodity
+hedging strategies.
+205
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the value
+of the portfolio while reducing the potential negative deviation
+from target EBIT.
+The E.ON portfolio of physical assets, long-term contracts
+and end-customer sales is exposed to substantial risks from
+fluctuations in commodity prices. The principal commodity
+prices to which E.ON is exposed relate to electricity, gas, green
+Commodity Price Risk Management
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for internal
+risk controlling and reflects the economic position of the E.ON
+Group. A one-percentage-point upward or downward change in
+interest rates (across all currencies) would raise or lower interest
+charges by ±€69.1 million (2019: ±€59.3 million) in the subse-
+quent fiscal year.
+As of December 31, 2020, the E.ON Group held interest rate
+derivatives with a nominal value of €4,320 million (2019:
+€4,329 million).
+With interest rate derivatives included, the share of financial
+liabilities with floating interest rates was 10 percent as of
+December 31, 2020 (2019: 10 percent). Under otherwise
+unchanged circumstances, the volume of financial liabilities with
+fixed interest rates, which amounted to €24.5 billion at year-end
+2020, would decline to €21.8 billion in 2021 and 2022. The
+effective interest rate duration of the financial liabilities, includ-
+ing interest rate derivatives, was 9.4 years as of December 31,
+2020 (2019: 10.1 years). The volume-weighted average interest
+rate of the financial liabilities, including interest rate derivatives,
+was 3.1 percent as of December 31, 2020 (2019: 3.8 percent).
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities. Positions based on fixed interest rates, on the other
+hand, are subject to changes in fair value resulting from the
+volatility of market rates. E.ON seeks a specific mix of fixed-
+interest and floating-rate debt over time. This is influenced,
+among other factors, by the type of business model, existing
+liabilities as well as the regulatory framework in which E.ON
+operates. To manage the interest rate position, several instru-
+ments, including derivatives, are deployed.
+and emission certificates.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+188
+172
+91 to 180 days
+10
+10
+75
+31
+77
+11
+130
+101
+18
+14
+389
+10
+Report of the Supervisory Board
+Strategy and Objectives
+29
+932
+Separate Risk Committees/Steering Groups are responsible for
+the maintenance and further development of the strategy set by
+the Management Board of E.ON SE with regard to commodity,
+treasury and credit risk management policies.
+E.ON uses a Group-wide treasury, risk management and report-
+ing system. This system is a standard information technology
+solution that is fully integrated and is continuously updated.
+The system is designed to provide for the analysis and monitor-
+ing of the E.ON Group's exposure to liquidity, foreign exchange
+and interest risks. On a Group-wide basis, Financial Controlling/
+Counterparty Risk Management monitors and steers credit
+risks for banks, and Counterparty Risk Management monitors
+and steers corporates of a certain materiality. These activities
+are carried out each using a standard software package.
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within
+the confines of the Group's overall guidelines. To ensure efficient
+risk management at the E.ON Group, the Trading (Front Office),
+Financial Controlling (Middle Office) and Financial Settlement
+(Back Office) departments are organized as strictly separate units.
+Risk steering and reporting in the areas of interest rates, curren-
+cies and credit for banks and liquidity management is performed
+by the Financial Controlling department (in the credit area, also
+in part by Counterparty Risk Management), while risk steering
+and reporting in the area of commodities and in the credit area
+for industrial enterprises is performed at Group level by a sepa-
+rate department.
+Principles
+Risk Management
+¹Adjusted prior-year figures.
+more than 180 days including specific valuation allowances
+Total
+987
+6,706
+5,275
+632
+886
+645
+740
+312
+Combined Group Management Report
+207
+(<12 months)
+16
+18
+Storage and production capacities
+2
+2
+Expense for low-value leases not included
+Technical equipment and machinery
+6
+The liabilities from short-term agreements with a term of less
+than twelve months entered into for the next fiscal year do not
+vary materially from the expenses of the current fiscal year.
+The increase in interest expense is mainly due to the fact that
+the innogy activities were only included on a pro rata basis in
+the past reporting year.
+¹Adjusted prior-year figures.
+E.ON operates as a lessee in the areas of networks, land and
+buildings, and vehicle fleets, in particular. To ensure operative
+flexibility, E.ON enters into agreements relating to the exten-
+sion and termination of real estate leases, in particular. In deter-
+mining the term of the contract, E.ON considers all facts and
+circumstances that have an economic influence on the exercise
+of the extension option or the non-exercise of the termination
+option. In the determination of the lease liability, and correspond-
+ingly, of the right-of-use assets, all reasonably certain cash
+outflows are taken into consideration. As of December 31, 2020,
+potential future cash outflows in the amount of €187 million
+(2019: €322 million) were not included in the lease liability as it
+is not reasonably certain that the leases will be renewed or not
+terminated. Variable lease payments occur in only immaterial
+amounts and E.ON does not issue residual value guarantees.
+Leases in which E.ON is the lessee but where the lease has not yet
+begun result in potential future cash outflows of €236 million
+(2019: €556 million). The existing lease liabilities do not contain
+any covenant clauses that are linked to financial ratios.
+The majority of this increase is attributable to the fact that the
+innogy activities were only included on a pro rata basis in the
+2019 fiscal year (from September 18, 2019, the date on which
+control was achieved), while in 2020 they will be included for a
+full twelve months.
+1
+Gain/Loss from sale and leaseback
+transactions
+1
+1
+18
+Cash outflows from lease agreements totaled €523 million
+(2019: €377 million) in the fiscal year; this will be allocated to
+operating cash flow in the amount of €191 million (2019:
+€85 million). This includes the lease expense for short-term and
+low-value leases as well as the expense from variable lease
+payments and interest expense for the period. Payments allo-
+cated to payments for the lease liability are recognized in cash
+flows from financing activities in the amount of €332 million
+(2019: €292 million).
+16
+Fleet, office and business equipment
+77
+44
+71
+Variable lease payments
+2
+Interest expense from leasing
+154
+36
+¹Adjusted prior-year figures.
+Lease income sublease
+3
+274
+Networks
+Expenses from short-term leases
+208
+Notes
+As of December 31, 2020, Versorgungskasse Energie VVaG was
+still in liquidation (VKE i. L.); at that date, it managed €79.3 mil-
+lion in financial investments. The company was deconsolidated
+on June 30, 2019.
+These financial assets are invested on the basis of an accumula-
+tion strategy (total-return approach), with investments broadly
+diversified across the various asset classes, for example the
+money market, bond and equity asset classes, as well as alter-
+native asset classes like real estate. The majority of the assets are
+held in investment funds managed by external fund managers.
+Corporate Asset Management at E.ON SE, which is part of the
+Company's Finance Department, is responsible for continuous
+monitoring of overall risks and those concerning individual fund
+managers. The three-month VaR with a 98-percent confidence
+interval for these financial assets was €218 million (2019:
+€109 million). The increase resulted primarily from the signifi-
+cant turbulence on the capital market in relation to the corona-
+virus crisis.
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see
+Note 26) and cash investments, financial investments totaling
+€3.0 billion (2019: €3.5 billion) were held predominantly by
+German E.ON Group companies as of December 31, 2020. The
+decrease of €0.5 billion is primarily related to the steady reduc-
+tion of a subportfolio.
+Asset Management
+(33) Leasing
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings
+or in short-term securities (for example, commercial paper) of
+issuers with strong credit ratings. Bonds of public and private
+issuers are also selected for investment. Group companies that
+for legal reasons are not included in the cash pool invest money
+at leading local banks. Standardized credit assessment and
+limit-setting is complemented by daily monitoring of CDS levels
+at the banks and at other significant counterparties.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into
+with selected counterparties. Limits are imposed on the credit
+and liquidity risk resulting from bilateral margining agreements
+and exchange clearing.
+The levels and details of financial assets received as collateral
+are described in more detail in Notes 19 and 27.
+To the extent possible, collateral is negotiated with counterparties
+for the purpose of reducing credit risk. Accepted as collateral
+are guarantees issued by the respective parent companies, letters
+of comfort or evidence of profit and loss transfer agreements
+in combination with letters of awareness. To a lesser extent, the
+Company also requires bank guarantees and deposits of cash
+and securities as collateral to reduce credit risk. Risk-manage-
+ment collateral was accepted in the amount of €1,474 million.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature of
+the operating activities and the credit risk, additional credit risk
+monitoring and controls are performed both by the units and
+by Corporate Headquarters. Regular reports on credit limits,
+including their utilization, are submitted to the Risk Committee.
+Intensive, standardized monitoring of quantitative and qualitative
+early-warning indicators, as well as close monitoring of the
+credit quality of counterparties, enable E.ON to act early in order
+to minimize risk.
+In order to minimize credit risk arising from operating activities
+and from the use of financial instruments, the Company enters
+into transactions only with counterparties that satisfy the Com-
+pany's internally established minimum requirements. Maximum
+credit risk is confined by credit limits based on internal and (where
+available) external credit ratings. The setting and monitoring of
+credit limits is subject to certain minimum requirements, which
+are based on Group-wide credit risk management guidelines.
+Long-term operating contracts and asset management trans-
+actions are not comprehensively included in this process. They
+are monitored separately at the level of the responsible units.
+Credit Risk Management
+There is no credit risk with respect to the exchange-traded for-
+ward and option contracts with an aggregate nominal value of
+€2,183 million as of December 31, 2020 (2019: €1,073 million).
+For the remaining financial instruments, the maximum risk of
+default is equal to their nominal amounts.
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+E.ON as Lessee
+As of the balance sheet date of December 31, 2020, right-of-use
+assets in the amount of €2,543 million (2019: €2,582 million)
+are offset by lease liabilities with a present value of €2,615 mil-
+lion (2019: €2,609 million). This is recognized under financial
+liabilities (see Note 27); the short-term portion of the lease lia-
+bilities totals €342 million (2019: €329 million). The maturity
+structure of the future payment obligations from leases is pre-
+sented in Note 32.
+100
+204
+2019
+2020
+€ in millions
+2019
+Transactions in which E.ON is the lessee have been recognized
+under the right-of-use model pursuant to IFRS 16. The tables in
+Note 15 present the changes in the right-of-use assets by asset
+class in the reporting year. The conclusion of new agreements,
+mainly in the network sector, and the presentation of changes in
+estimates and modifications resulted in an addition of €415 million
+(2019: €286 million). Impairments of right-of-use assets in
+the amount of €563 million (2019: €220 million) are allocated
+among the asset classes as follows:
+2020
+E.ON as Lessee-Effects within the Income Statement¹
+depreciation
+Accumulated
+Accumulated
+depreciation
+Right-of-use Assets¹
+Due to the simplification provisions used, the recognition of a
+right-of-use asset is not necessary for low-value leases and
+leases with a term of less than twelve months. Instead, a lease
+expense is recognized in these cases. The following amounts
+are recognized in the income statement in connection with
+leases in the fiscal year:
+€ in millions
+699
+Land and buildings
+1,427
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+203
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+The net gains and losses from financial instruments by IFRS 9
+category are shown in the following table:
+Net Gains and Losses by Category¹
+150
+€ in millions
+2020
+2019
+Financial assets Amortized Cost
+-275
+Financial liabilities Amortized Cost
+-449
+-1,059
+Fair value through P&L
+Impairment losses on financial assets must be recognized not
+only for losses already incurred but also for expected future
+credit losses. E.ON takes into account expected future credit
+losses of financial assets carried at amortized cost, financial
+assets measured at fair value through other comprehensive
+income, and receivables from finance leases.
+Impairments of Financial Assets
+The net gains and losses in the fair value through profit or loss
+measurement category encompass both the changes in fair value
+of equity instruments, from derivative financial instruments and
+gains and losses on realization.
+In addition to impairments of financial assets, net gains and
+losses in the amortized cost category are due primarily to interest
+income from financial assets and liabilities, effects from the
+currency translation of financial liabilities, as well as effects from
+the carrying forward of standstill obligations recognized as a
+liability for the acquisition of additional shares in subsidiaries
+that have already been consolidated.
+The net result of the category fair value through OCI results in
+particular from interest income and proceeds from the sale of
+fair value through OCI securities.
+-1,496
+For financial liabilities that bear floating interest rates, the rates
+that were fixed on the balance sheet date are used to calculate
+future interest payments for subsequent periods as well. Finan-
+cial liabilities that can be terminated at any time are assigned
+to the earliest maturity band in the same way as put options that
+are exercisable at any time.
+¹Adjusted prior-year figures.
+Total
+41
+-10
+Fair value through OCI
+-628
+175
+-559
+Financial guarantees with a total nominal volume of €8 million
+(2019: €8 million) were issued to companies outside of the
+Group. This amount is the maximum amount that E.ON would
+have to pay in the event of claims on the guarantees. E.ON has
+recognized a liability for this in the amount of €8 million (2019:
+€8 million).
+24,928
+9,241
+3,889
+5,013
+8
+8
+15
+23
+8,549
+279
+1,017
+415
+23
+454
+952
+63
+139
+1,909
+For trade receivables, expected credit losses are recognized over
+their entire residual term using the simplified method (lifetime
+ECL trade receivables). For other financial assets, E.ON first deter-
+mines the credit loss expected within the first twelve months
+(stage 1-12 month ECL). In derogation of this, in the event of
+a significant increase in the default risk, the expected credit loss
+over the entire residual term of the respective instrument is
+recognized (stage 2-lifetime ECL). A significant increase in the
+default risk is assumed if the internally determined counterparty
+risk has been downgraded by at least three levels since initial
+recognition. If there are objective indications of an actual default,
+an individual impairment loss must be recognized on the income
+statement (stage 3-losses already incurred).
+22,158
+5,531
+4,901
+2,770
+692
+1,012
+17,667
+22,680
+26
+8,709
+3
+1,703
+57
+318
+1,724
+689
+673
+21
+E.ON distinguishes between two approaches when calculating
+expected future credit losses. If external or internal rating infor-
+mation is available, the expected credit loss is determined on
+the basis of this data. If no rating information is available, E.ON
+determines default ratios on the basis of historical default rates,
+taking into account forward-looking information on economic
+developments. In the E.ON Group, a default or the classification
+of a receivable as uncollectible is assumed after 180 or 360 days,
+depending on the region.
+2,687
+Valuation Allowances for Trade Receivables¹
+2,396
+3,364
+6,859
+6,130
+622
+605
+The default risks for trade receivables for which no rating infor-
+mation is available and the amount of expected credit losses
+over the remaining term are shown in the following matrix for
+each maturity class:
+92
+68
+1,682
+2,607
+6,791
+6,061
+69
+¹Adjusted prior-year figures.
+152
+Total
+Credit Risk Exposure for Trade Receivables for Which No Rating Information Is Available as of December 31, 2020¹
+Lifetime-ECL
+61 to 90 days
+up to 30 days
+31 to 60 days
+1,594
+In 2020, valuation allowances for trade receivables changed as
+shown in the following table:
+Past-due by
+41
+Gross carrying amount
+35
+3,681
+2019
+2020
+2019
+Not past-due
+€ in millions
+5,279
+Gross carrying amount default grade
+2020
+2019
+-288
+-328
+136
+57
+-805
+-962
+-6
+2020
+Gross carrying amount non investment grade
+€ in millions
+Balance as of January 1
+Disposals
+¹Adjusted prior-year figures.
+Write-downs
+Balance as of December 31
+Other²
+2The item Other includes currency translation differences.
+-5
+2019
+-962
+2020
+-1,239
+2019
+Gross carrying amount investment grade
+Stage 1 financial assets
+Credit Risk Exposure for Financial Assets for Which Rating Information Is Available as of December 31, 2020¹
+Trade receivables
+is available can be found in the following table for each rating
+grade and separately according to the stages of impairment
+existing in 2020:
+The default risks for financial assets for which rating information
+2020
+Notes
+There were no significant changes in valuation allowances in
+2020 for other financial assets measured at amortized cost or at
+fair value through other comprehensive income, or for receivables
+from finance leases.
+204
+€ in millions
+-153
+-342
+-858 -158
+1,455
+4
+2,182
+Adjusted EBIT
+-1,446
+amortization³
+329
+8,252
+991 8,840
+7,923
+8,359
+481
+2020 2019 2020 2019
+990
+1
+2,836
+123
+Other
+Belgium
+-282
+United Kingdom
+2020 2019
+13,989 9,829
+-184
+9,645 2,959
+13,993
+Depreciation and
+-134
+80
+371
+-1
+5
+Germany
+2020 2019
+20,964 12,345
+1,586
+561
+22,550 12,906
+4
+119
+142
+111
+224
+earnings4
+Equity-method
+111
+91
+37
+-106
+-17 -216 -165
+-72
+-138
+-130
+-129
+308
+412
+507
+700
+539
+-119
+875
+1,038
+1,913
+Non-Core Business comprises the non-strategic activities of
+the E.ON Group. This includes the operation and retirement of
+the German nuclear power plants, which are managed by the
+PreussenElektra operating unit, and the electricity generation
+business in Turkey.
+1,024
+Notes
+Corporate Functions/Other contains E.ON SE itself and the
+interests held directly by E.ON SE. Additional information
+regarding the Uniper Group is provided in Note 4.
+Corporate Functions/Other
+Non-Core Business
+The businesses in the Renewables segment remaining after the
+transfer of material components to RWE were reported under
+Energy Networks Germany, Customer Solutions UK and Corpo-
+rate Functions/Other.
+For internal management purposes, these activities therefore
+continued to be fully included in the relevant key performance
+indicators until they are deconsolidated. The presentation of key
+performance indicators and revenue in segment reporting there-
+fore also includes the components attributable to discontinued
+operations in the Renewables business. Reconciliations of these
+figures to the information in the E.ON Group's consolidated
+income statement and consolidated statement of cash flows
+are provided on pages 212, 213 and 215.
+In connection with the takeover of innogy, E.ON will transfer the
+majority of its Renewables business to RWE. Since June 30,
+2018, the transferred businesses were reported as a discontinued
+operation in E.ON's consolidated financial statements in accor-
+dance with IFRS 5 (see Note 5 for further information) and
+deconsolidated as of September 18, 2019; accordingly, disclo-
+sures for the segment are only included up to this date.
+The Renewables segment combined the Group's activities for
+the production of wind power plants (onshore and offshore) as
+well as solar farms.
+Renewables
+This segment combines sales activities and the corresponding
+Customer Solutions in Sweden, Italy, the Czech Republic, Hungary,
+Romania and Poland. The innovative solutions business (such as
+electromobility) is also included here.
+Financial Information by Business Segment¹
+Other
+Netherlands/Belgium
+The segment comprises sales activities and customer solutions
+in the UK.
+United Kingdom
+This segment consists of activities that supply our customers in
+Germany with electricity and gas and the distribution of specific
+products and services in areas for improving energy efficiency
+and energy independence. This item also includes the heating
+business in Germany.
+Customer Solutions
+Germany
+This segment combines the distribution network activities in the
+Czech Republic, Hungary, Romania, Poland, Croatia, Slovakia
+and Turkey.
+East-Central Europe/Turkey
+This segment comprises the electricity networks businesses in
+Sweden.
+5
+Sweden
+The segment comprises sales activities and Customer Solutions
+in the Netherlands and Belgium.
+2,832
+212
+Netherlands/
+889
+9,161
+14,563
+Sales2
+1,210
+6
+1,622
+1,018
+884
+5
+2,596
+Energy Networks
+4,253
+2020 2019
+2019 2020 2019
+6,565
+10,310
+External sales
+2020
+€ in millions
+ECE/Turkey
+Sweden
+Germany
+Customer Solutions
+Intersegment sales
+Operating cash flow
+E.ON Group6
+612
+1,174
+1,388
+518
+2019
+2020
+2019
+2020
+2019
+2020
+Consolidation
+591
+Corporate Functions/
+Other5
+2020
+2019
+2020
+2019
+PreussenElektra
+Renewables6
+Non-Core Business
+213
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Generation Turkey
+2019
+47
+1
+60,944
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+-89
+-122
+-251
+-512
+-271
+41,284
+60,944
+-5,514
+-9,772
+784
+2,702
+1,174
+1,388
+948
+0
+0
+-5,514
+-9,773
+737
+2,111
+430
+41,284
+Report of the Supervisory Board
+Strategy and Objectives
+before interest and taxes 3,614 1,745
+2020
+40,803
+།
+སྦ「ཝ།
+། སྦ」
+331
+117
+168
+238
+487
+668
+314
+9
+353
+2,365
+Investments
+115
+467
+-256
+328
+581
+890
+1,016
+718
+1,583
+112
+286
+208
+2019
+E.ON Group
+(continuing operations)
+2020
+60,944
+-481
+41,284
+60,944
+Sales
+2019
+2020
+2019
+2020
+€ in millions
+at Renewables¹
+E.ON Group
+Reclassified businesses
+Reconciliation of Sales
+The following table shows the reconciliation in segment report-
+ing of sales to sales in the Consolidated Statement of Income:
+6Operating business including the divisions in the Renewables segment reclassified as discontinued operations in accordance with IFRS 5 and deconsolidated as of September 18, 2019.
+4Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in income/loss from
+companies accounted for using the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
+5Because of subsequent purchase price adjustments by RWE, the Corporate Functions/Other segment recorded negative investments.
+²Adjustment of prior-year figures in the context of "failed-own-use" accounting regarding presentation of sales, cost of materials, other operating income and other operating expenses with no impact on earnings.
+³Adjusted for non-operating effects.
+¹Because of the changes in our reporting, the prior-year figure was adjusted accordingly.
+441
+395
+68
+¹Deconsolidated as of September 18, 2019.
+Germany
+115
+Since January 1, 2020, the activities of innogy are no longer
+directed and presented as an independent segment, but instead
+integrated into the business areas Energy Networks, Customer
+Solutions and Group Management/Other. The innogy network
+businesses were transferred to the Energy Networks division. The
+sale of electricity and gas as well as new customer solutions at
+innogy, such as services related to electromobility, are reported
+under Customer Solutions. The Corporate Management/Other
+area comprises the holding functions and internal service pro-
+viders of innogy. In addition to the allocation of the businesses
+remaining after the transfer of significant operations to RWE
+reported under Renewables, the heating business previously
+reported under Customer Solutions Other was transferred to the
+Customer Solutions Germany segment and three E.ON Business
+Solutions companies were transferred from Customer Solutions
+Other to the Customer Solutions UK segment. The prior-year
+figures were adjusted accordingly, where necessary.
+120
+484
+393
+Total
+131
+3
+15
+13
+27
+40
+129
+143
+Due in more than 5 years
+44
+27
+1
+12
+10
+56
+36
+Due in 4 to 5 years
+47
+142
+32
+16
+289
+47
+Income from leasing
+Operating lease
+Undiscounted lease payments
+2019
+2020
+€ in millions
+1
+2
+Income of variable lease payments
+11
+15
+29
+Gain/loss on the disposal of assets
+Financial income from net investments
+Finance lease
+2019
+2020
+€ in millions
+The following payments are expected from existing operating
+leases:
+leases with variable lease payments. Payments recognized as
+financing income from net investments increase operating cash
+flow.
+E.ON as Lessor-Effects within the Income
+Statement
+The following effects from activity as a lessor are recognized for
+the period under review:
+370
+E.ON as Lessor-Operating Leases
+1
+16
+12
+2019
+2020
+2019
+2020
+2019
+2020
+€ in millions
+of minimum
+lease payments
+residual value
+Present value
+2020
+Discounted
+non-guaranteed
+Undiscounted
+lease payments
+E.ON as Lessor-Finance Leases
+The present value of minimum lease payments is recognized
+under receivables from finance leases (see Note 18). The short-
+term portion totals €44 million (2019: €50 million). There were
+no material changes to net investments in the period under
+review. The nominal and present values of the lease payments
+had the following maturities:
+with the result that risk management strategies, in particular,
+are not necessary. Residual-value guarantees are only entered
+into on an individual basis for purposes of additional hedging.
+E.ON enters into leases as lessor to a limited extent. Finance
+leases include technical equipment and machinery, in particular
+generation plants, that has been transferred to customers for
+use. Operating leases include assets that have been transferred
+for use, in particular real estate, heat and electricity generation
+plants and lines. There are no material risks in connection with
+rights retained to the assets temporarily transferred for use,
+E.ON as Lessor
+209
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Unrealized
+interest income
+2019
+Due within 1 year
+67
+63
+43
+Due in 3 to 4 years
+48
+36
+1
+20
+16
+68
+51
+Due in 2 to 3 years
+50
+35
+25
+19
+75
+54
+Due in 1 to 2 years
+50
+44
+29
+23
+79
+69
+Due within 1 year
+86
+86
+177
+104
+Joint ventures
+726
+660
+Associated companies
+1,278
+1,790
+Liabilities
+162
+Other related parties
+243
+9
+17
+Joint ventures
+456
+236
+Associated companies
+627
+496
+Receivables
+237
+Other related parties
+1,026
+375
+Provisions
+Led by its Corporate Headquarters in Essen, Germany, the E.ON
+Group comprises the seven reporting segments described below,
+and the Non-Core Business and Corporate Functions/Other, all
+of which are reported here in accordance with IFRS 8. The com-
+bined segments, which are not separately reportable, in the
+East-Central Europe/Turkey Energy Networks unit and the Cus-
+tomer Solutions Other unit are of subordinate importance and
+have similar economic characteristics with respect to customer
+structure, products and distribution channels.
+Segment Information
+(35) Segment Reporting
+211
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Detailed, individualized information on compensation can be
+found in the Compensation Report on pages 80 through 97.
+The members of the Supervisory Board received a total of
+€5.3 million for their activity in 2020 (2019: €4.3 million).
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts
+with subsidiaries totaling €0.8 million (2019: €0.6 million).
+Provisions for these commitments amounted to €13.4 million
+as of December 31, 2020 (2019: €14.5 million).
+The expense determined in accordance with IFRS 2 for existing
+commitments arising from share-based payment in 2020 was
+€5.1 million (2019: €5.4 million).
+The total expense for 2020 for members of the Management
+Board amounted to €8.8 million (2019: €10.3 million) in short-
+term benefits and €2.5 million (2019: €2.6 million) in post-
+employment benefits. The cost of post-employment benefits
+is equal to the service and interest cost of the provisions for
+pensions. Additionally taken into account in 2020 were actuarial
+losses of €2.4 million (2019: actuarial losses of €1.4 million).
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory
+Board of E.ON SE) must be disclosed.
+Liabilities of E.ON payable to related companies as of Decem-
+ber 31, 2020, include €49 million (2019: €60 million) in trade
+payables and shareholder loans to operators of jointly-owned
+nuclear power plants. These shareholder loans bear interest
+at 1.0 percent (2019: 1.0 percent) and have no fixed maturity.
+E.ON continues to have in place with these power plants a
+cost-transfer agreement and a cost-plus-fee agreement for the
+procurement of electricity. The settlement of such liabilities
+occurs mainly through clearing accounts.
+In 2020, E.ON generated income from transactions with related
+companies through the delivery of gas and electricity to distrib-
+utors and municipal entities, especially municipal utilities. The
+relationships with these entities do not generally differ from those
+that exist with municipal entities in which E.ON does not have
+an interest. Expenses from transactions with related companies
+are generated mainly through electricity and gas deliveries as
+well as through management fees, IT services and third-party
+services.
+5
+26
+2
+Other related parties
+25
+Associated companies
+31
+27
+614
+Energy Networks
+Other related parties
+143
+447
+338
+Total
+123
+63
+Due in more than 5 years
+years
+49
+36
+Due in 4 to 5
+Notes
+Results from the disposal of assets were recognized in income.
+Cash flows from operating leases are allocated to cash flow
+before interest and taxes. This also applies to flows from finance
+40
+Due in 3 to 4 years
+62
+52
+Due in 2 to 3 years
+9
+72
+61
+Due in 1 to 2 years
+thereof Income of variable lease
+payments
+55
+210
+(34) Transactions with Related Parties
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, including associated companies
+accounted for under the equity method and their subsidiaries.
+Receivables and payables consist primarily of lease obligations
+from leaseback models and trade receivables. Joint ventures
+and subsidiaries that are not fully consolidated continue to be
+accounted for as associated companies. Transactions with related
+parties in the reporting year and in the previous year are sum-
+marized as follows:
+Joint ventures
+216
+531
+Associated companies
+560
+1,288
+Expenses
+96
+366
+Other related parties
+38
+151
+Joint ventures
+542
+1,058
+Associated companies
+676
+1,575
+Income
+2019
+2020
+€ in millions
+Related-Party Transactions
+107
+-1
+1,503
+-2,344
+Name, location
+Stake (%)
+218
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+(38) List of Shareholdings Pursuant to Section 313 (2) HGB
+Notes
+Via subsidiaries, E.ON SE holds a stake of approximately 59 per-
+cent in enviaM AG. Other major shareholders are two municipal
+companies with a combined stake of around 37 percent. Pursu-
+ant to a consortium agreement, these municipal shareholders
+have had a right of tender since 2002, which could be exercised
+in full or in part. This right of tender resulted in recognition as a
+liability in accordance with IAS 32 in the E.ON SE consolidated
+financial statements. In March 2021, a supplementary agree-
+ment to the consortium agreement was negotiated, including the
+lapse of this right to tender.
+Supplementary Agreements to the Consortium
+Agreement at enviaM
+As of December 31, 2020, the investment in Rampion Renew-
+ables Ltd. is recognized under "assets held for sale" as a result
+of the agreement concluded.
+On December 29, 2020, an agreement with RWE AG and RWE
+Renewables UK Ltd. was signed, under which E.ON UK plc will
+also transfer its remaining 40-percent stake to RWE Renew-
+ables UK Ltd. Following the occurrence of a significant part of
+the conditions precedent in the first half of March 2021, the
+share transfer is to be completed at the beginning of the second
+quarter of 2021.
+In 2019, E.ON UK plc sold around 60 percent of its shares in
+Rampion Renewables Ltd., Coventry, which has a stake of
+around 50 percent in the UK wind farm operator Rampion Off-
+shore Wind Ltd., to RWE Renewables UK Ltd., a company of the
+RWE Group.
+Disposal of Shares in Rampion Renewables Ltd.
+coupon.
+In mid-January 2021, E.ON issued a corporate bond with a vol-
+ume of €600 million due in December 2028 with a 0.100 percent
+Corporate Bond Issued
+At the beginning of March 2021, the responsible German Fed-
+eral Ministries announced that the German federal government
+had reached an agreement with the four nuclear power plant
+operators EnBW, E.ON/Preussen Elektra GmbH, RWE and Vatten-
+fall on key points concerning the payment of financial compen-
+sation due to the accelerated nuclear phase-out after 2011 and
+the settlement of all related legal disputes. In particular, the key
+points also provide that E.ON/Preussen Elektra GmbH can dispose
+of the quantities of electricity from the jointly-owned Krümmel
+and Brunsbüttel nuclear power plants that arithmetically corre-
+spond to its share without payment, i.e., it can use them for
+generation in its own power plants. This understanding will only
+become effective once it has been transposed into law.
+In January 2021, 10 TWh of residual quantities of electricity were
+acquired from the operating company of the Krümmel nuclear
+power plant and transferred in equal shares to the Grohnde and
+Isar II nuclear power plants managed by PreussenElektra GmbH.
+This will allow the plant to continue operating until the summer
+of 2021.
+Nuclear Power/Residual Quantities of Electricity
+(37) Subsequent Events
+217
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Stake (%)
+100 Kilowatt Naperőmű Alfa Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+100 Kilowatt Naperőmű Béta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100 Kilowatt Naperőmű Kappa Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+50.0
+Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, DE, Essen
+Alsdorf Netz GmbH, DE, Alsdorf¹
+100.0
+100 Kilowatt Naperőmű Gamma Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+100.0
+Gesellschaft mit beschränkter Haftung, DE, Wolfenbüttel²
+AirSon Engineering AB, SE, Ängelholm²
+100.0
+100 Kilowatt Naperőmű Éta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+Report of the Supervisory Board
+Strategy and Objectives
+AIRCRAFT Klima-, Wärme- Kälte-, Rohrleitungsbau-
+80.0
+100.0
+30.0
+25.0
+49.0
+49.0
+Abwassergesellschaft Gehrden mbH, DE, Gehrden6
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck
+Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg6
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+Ackermann & Knorr Ingenieur GmbH, DE, Chemnitz²
+Airco-Klima Service GmbH, DE, Garbsen²
+100 Kilowatt Naperőmű Epszilon Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+100 Kilowatt Naperőmű Delta Korlátolt Felelősségű Társaság,
+HU, Budapest²
+100.0
+100.0
+100.0
+Additional information about the members of the Management
+Board is provided on page 250.
+As in 2019, there were no loans to members of the Management
+Board in 2020.
+92
+4,762
+5,175
+697
+718
+25,494 25,067
+equipment
+Property, plant and
+3 2,543 2,582
+2
+169
+156
+45
+42
+48
+49
+126
+96
+2,198 2,191
+Right-of-use assets
+19 3,855 4,138
+14
+295 60,944 41,284
+115
+5,440
+5,106
+4
+Total payments to former members of the Management Board
+and their beneficiaries amounted to €12.8 million (2019:
+€10.8 million). Provisions of €166.8 million (2019: €161.3 mil-
+lion) have been established for the pension obligations to former
+members of the Management Board and their beneficiaries.
+a value of €5.2 million (2019: €5.2 million) and a total number
+of shares of 661,911 (2019: 780,815).
+In 2020, the members of the Management Board were granted
+fourth-tranche virtual shares under the E.ON Performance Plan
+(2019: third tranche of the E.ON Performance Plan) with
+Total compensation of the Management Board in 2020 amounted
+to €14.1 million (2019: €15.6 million). This consisted of base
+salary, bonuses, other compensation elements and share-based
+payments.
+Management Board
+Additional information about the members of the Supervisory
+Board is provided on pages 248 and 249.
+The Supervisory Board's compensation structure and the
+amounts for each member of the Supervisory Board are
+presented on page 96 and 97 in the Compensation Report.
+As in 2019, there were no loans to members of the Supervisory
+Board in 2020.
+Total remuneration to members of the Supervisory Board in
+2020 amounted to €5.3 million (2019: €4.3 million).
+(36) Compensation of Supervisory Board and
+Management Board
+Supervisory Board
+its business activities, there are no individual customers whose
+business volume is material compared with the Company's total
+business volume.
+The Management Board's compensation structure and the indi-
+vidual amounts for each member of the Management Board as
+well as additional disclosures on the amounts are presented on
+pages 80 through 96 in the Compensation Report.
+E.ON's customer structure resulted in a focus on the Germany
+region. Aside from that, there was no major concentration in
+any given geographical region or business area. Due to the large
+number of customers the Company serves and the variety of
+1,442
+1,178
+67
+41
+70
+74
+461
+4
+3,086 3,192
+Companies accounted
+for under the equity
+method
+3 36,923 35,750
+4,383 5,232
+52
+Alt Han Company Limited, GB, London
+2. CR Immobilien-Vermietungsgesellschaft mbH & Co. Objekt
+Naumburg KG, DE, Düsseldorf2, 12
+Diekhusen-Fahrstedt6
+49.0
+Bayerische Ray Energietechnik GmbH, DE, Garching6
+Abwasserentsorgung Marne-Land GmbH, DE,
+100.0
+Bayerische Elektrizitätswerke GmbH, DE, Augsburg²
+20.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+100.0
+Bayerische Bergbahnen-Beteiligungs-Gesellschaft mbH, DE,
+Gundremmingen¹
+25.0
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+49.0
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog
+25.0
+Basking Automation GmbH, DE, Berlin6
+49.0
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel
+25.1
+Balve Netz GmbH & Co. KG, DE, Balve6
+49.0
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede6
+100.0
+49.0
+Bayerische-Schwäbische Wasserkraftwerke
+Abwasserentsorgung Schladen GmbH, DE, Schladen
+49.0
+100.0
+Bayernwerk Gashochdrucknetz GmbH & Co. KG, DE, Regensburg¹
+Bayernwerk Gashochdrucknetz Verwaltungs GmbH, DE,
+Regensburg²
+49.0
+Bardowick6
+49.0
+100.0
+Bayernwerk Energietechnik GmbH, DE, Regensburg²
+49.0
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen6
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+100.0
+Bayernwerk Energiedienstleistungen Licht GmbH, DE,
+Regensburg²
+BAG Port 1 GmbH, DE, Regensburg²
+25.0
+25.1
+Eddelak GmbH, DE, St. Michaelisdonn6
+60.0
+Bayernwerk Energiebringer GmbH, DE, Regensburg²
+Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
+100.0
+Bayernwerk AG, DE, Regensburg¹
+49.0
+Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+62.2
+Beteiligungsgesellschaft mbH, DE, Gundremmingen¹
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+21.0
+27.0
+49.0
+49.0
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide6
+100.0
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+50.0
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg6
+61.5
+Avacon AG, DE, Helmstedt¹
+50.0
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg6
+0.0
+AV Packaging GmbH, DE, Munich¹
+76.1
+A/V/E GmbH, DE, Halle (Saale)²
+90.0
+Artelis S.A., LU, Luxembourg¹
+100.0
+4Motions GmbH, DE, Leipzig²
+100.0
+Aralt BV, BE, Hasselt¹
+0.0
+100.0
+ANCO Sp. z o.o., PL, Jarocin²
+Avacon Connect GmbH, DE, Laatzen¹
+100.0
+Abfallwirtschaft Rendsburg-Eckernförde GmbH, DE, Borgstedt
+Abfallwirtschaft Schleswig - Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+49.0
+Bäderbetriebsgesellschaft St. Ingbert mbH, DE, St. Ingbert6
+49.0
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr6
+48.0
+AWOTEC Gebäude Servicegesellschaft mit beschränkter
+Haftung, DE, Saarbrücken
+49.0
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+50.0
+Gevelsberg4
+49.0
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide
+AVU Aktiengesellschaft für Versorgungs-Unternehmen, DE,
+100.0
+Avon Energy Partners Holdings, GB, Coventry2
+39.0
+100.0
+Avacon Netz GmbH, DE, Helmstedt¹
+49.0
+100.0
+Avacon Natur GmbH, DE, Sarstedt¹
+49.0
+100.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+33.3
+-3,129
+8,720 7,574
+1,402
+545
+Reclassified innogy business in the
+Czech Republic
+¹Deconsolidated as of September 18, 2019.
+2,965
+-100
+Reclassified businesses at Renewables²
+5,313
+Operating cash flow
+52
+26
+Czech Republic (Operating cash flow)
+4,784
+4,171
+Investments from continuing operations
+Reclassified innogy business in the
+-708
+Reclassified businesses at Renewables¹
+-754
+53
+Tax payments
+5,492
+4,171
+Investments
+-740
+-714
+-26
+-52
+Operating cash flow from continuing
+operations
+5,287
+Reconciliation of Income before Financial Results and Income Taxes
+€ in millions
+The following table shows the reconciliation of earnings before
+interest and taxes to adjusted EBIT or adjusted EBITDA:
+The decrease in other non-operating earnings is attributable,
+among other things, to measurement effects for repurchase obli-
+gations under IAS 32 and non-current provisions, as well as real-
+ized effects from hedging transactions for certain currency risks.
+215
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Effects that are to be initially recognized from the subsequent
+measurement of hidden reserves and charges in connection with
+the innogy purchase price allocation, which is preliminary until
+September 18, 2020, as well as newly recognized effects from the
+measurement of financial assets in the innogy segment (which
+were fully offset by the end of 2020) are presented separately.
+In the 2020 reporting period, impairment losses were recognized
+in particular in the areas of energy networks in Hungary (mainly
+due to the current restructuring of the business there), Customer
+Solutions in the United Kingdom (primarily for software in
+connection with the ongoing restructuring measures) and the
+Netherlands/Belgium (in particular as part of the planned disposal
+of the Belgian distribution business). In the prior year, impairment
+losses were recognized primarily in Customer Solutions in the
+United Kingdom (in particular due to the restructuring of the UK
+distribution business of E.ON and innogy decided at that time).
+The marking to market as of the reporting date of derivatives
+resulted in a positive effect of €1,128 million in the 2020 fiscal
+year (prior year: -€630 million). Positive effects in the 2020
+reporting period resulted primarily from hedging price fluctua-
+tions, particularly in Customer Solutions, and in Group Manage-
+ment/Other due to the commodity procurement for power pro-
+curement units included there.
+Restructuring expenses were significantly lower than in the 2019
+reporting period and, as in the previous year, mainly included
+expenses in connection with the integration of innogy. The cur-
+rent year also includes expenses for the restructuring of the UK
+distribution business.
+Interest payments
+Net book gains decline significantly year-on-year. In 2020, they
+mainly comprise deconsolidation gains that arose in connection
+with the fulfillment of EU requirements relating to the innogy
+transaction (compare pages 21 and 22 of the Combined Group
+Management Report). The previous year's figure included in
+particular effects from the deconsolidation of PEGI as parent
+company of Nord Stream. In addition, income from the disposal
+of securities was lower than in the prior year.
+The non-operating earnings effects for which EBIT is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market of derivative
+financial instruments used for hedging and, where material,
+book gains/losses, certain restructuring expenses, impairment
+charges and reversals recognized in the context of impairment
+tests on non-current assets, on equity investments in affiliated or
+associated companies and on goodwill, and other contributions
+to non-operating earnings. In addition, effects from the valuation
+of certain provisions on the balance sheet date are disclosed in
+non-operating earnings.
+Operating earnings also include income from investment sub-
+sidies for which liabilities are recognized.
+Unadjusted EBIT represents the Group's income/loss reported in
+accordance with IFRS before financial results and income taxes,
+taking into account the interest income/expense. To improve its
+meaningfulness as an indicator of the sustainable earnings power
+of the E.ON Group's business, unadjusted EBIT is adjusted for
+certain non-operating effects.
+The E.ON Management Board is convinced that adjusted EBIT is
+the most suitable key figure for assessing operating performance
+because it presents a business's operating earnings independently
+of non-operating factors, interest, and taxes.
+Adjusted EBIT, a measure of earnings before interest and taxes
+("EBIT") adjusted to exclude non-operating effects, is used at
+E.ON for purposes of internal management control and as the
+most important indicator of a business's sustainable earnings
+power.
+Adjusted EBIT
+214
+Notes
+2Deconsolidated as of September 18, 2019.
+¹Adjusted prior-year figures.
+2,813
+In addition, earnings from discontinued operations and activities
+in the Renewables segment that were deconsolidated with effect
+from September 18, 2019, adjusted for non-operating effects,
+are also included in adjusted EBIT. Pursuant to IFRS 5, equity
+carried forward from investments in discontinued operations is
+to be terminated. However, this was continued within the frame-
+work of internal management and was then also included in
+adjusted EBIT. As with the treatment of the effects of the equity
+carried forward, depreciation in discontinued operations, which
+is generally to be deferred in accordance with IFRS 5, is continued
+and carried forward in adjusted EBIT.
+2020
+2019
+€ in millions
+201
+495
+509
+-1
+-1
+69
+23
+74
+30
+51
+75
+57
+3,220
+3,776
+5
+6
+-303
+-350
+74
+30
+292
+383
+301
+489
+313
+563
+275
+4,407
+5,948
+taxes
+Operating cash flow before interest and
+Reconciliation of Investments
+2019
+2020
+€ in millions
+Reconciliation of Operating Cash Flow¹
+The following table shows the reconciliation in segment reporting
+of the investments shown in segment reporting to the investments
+of continuing operations. The latter correspond to payments for
+investments reported in the Consolidated Statements of Cash
+Flows.
+The following table shows the reconciliation of operating cash
+flow before interest and taxes to operating cash flow from
+continuing operations:
+2020
+5,492
+1
+-2
+1,329
+-278
+4,407
+5,948
+2
+2
+-577
+-511
+207
+4,171
+1,466
+2019
+Income/Loss from equity investments
+Europe (other)
+Netherlands/
+Belgium
+2020 2019
+2019
+2020
+2020 2019
+2020 2019
+€ in millions
+Sweden
+United Kingdom
+Germany
+216
+Geographic Segment Information
+The following table breaks down external sales (by customer
+and seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the equity
+method, by geographic area:
+Notes
+from services.
+The "Other" item consists in particular of revenues generated
+41,284
+60,944
+3,140
+4,733
+8,049
+11,340
+30,095
+Other
+2020 2019
+2020 2019 2020
+Total
+2019
+399
+183
+199
+355
+195
+1,582 1,634
+Intangible assets
+1,006
+2,850
+2,138
+1,952
+44,871
+9,813
+284 60,944 41,284
+55
+9,108 7,767
+991
+2,927
+2,176
+1,953
+9,868
+20,198 14,092
+32,809
+External sales by
+location of customer
+External sales by
+location of seller
+33,381 20,458 13,989
+Income/Loss from continuing operations before financial results and income taxes
+2019
+Total
+-1,128
+819
+656
+-366
+-258
+875
+1,417
+2,901
+Impairments (+)/Reversals (-)
+Adjusted EBIT
+Reclassified businesses of Renewables² (adjusted EBIT)
+Other non-operating earnings
+Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction¹
+Impairments (+)/Reversals (-)
+Effects from market valuation derivatives
+Restructuring/cost-management expenses
+Net book gains/losses
+Non-operating adjustments
+EBIT
+58
+18
+1,359
+2,883
+630
+557
+260
+802
+Other
+Gas
+Electricity
+€ in millions
+Segment Information by Product
+External sales by product break down as follows:
+Additional Entity-Level Disclosures
+Page 35 of the Combined Group Management Report provides a
+more detailed explanation of the reconciliation of adjusted EBIT
+to the net income/loss reported in the Consolidated Financial
+Statements.
+¹Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition (see Note 5); the previous year was adjusted accordingly.
+2Deconsolidated as of September 18, 2019.
+5,564
+6,905
+2020
+271
+2,006
+3,102
+Scheduled depreciation and amortization
+67
+27
+3,220
+3,776
+300
+-157
+246
+317
+Reclassified businesses of Renewables² (scheduled depreciation and amortization, impairments and reversals)
+Adjusted EBITDA
+100.0
+¹Consolidated affiliated company. - 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON US Energy LLC, US, Wilmington¹
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+222
+(as of December 31, 2020)
+ELMŰ-ÉMÁSZ Ügyfélszolgálati Kft., HU, Budapest¹
+ÉMÁSZ Hálózati Kft., HU, Miskolc¹
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments. . 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+E.ON Pensionsfonds Holding GmbH, DE, Essen²
+100.0
+E.ON US Corporation, US, Wilmington¹
+100.0
+E.ON Pensionsfonds AG, DE, Essen²
+100.0
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+Notes
+E.ON Nutzenergie GmbH, DE, Essen²
+100.0
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+49.0
+Energie Mechernich Verwaltungs-GmbH, DE, Mechernich6
+49.0
+Energie Mechernich GmbH & Co. KG, DE, Mechernich
+100.0
+100.0
+E3 Haustechnik GmbH, DE, Magdeburg²
+E+ Operatie Noord-Oost BV, NL, Zwolle¹
+49.9
+Energie BOL GmbH, DE, Ottersweier
+90.0
+100.0
+E.ON-CAPNET S.R.L., IT, Milan²
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole5
+100.0
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+49.9
+Emscher Lippe Energie GmbH, DE, Gelsenkirchen 19
+100.0
+E.ON Värme Sverige AB, SE, Malmö¹
+100.0
+EMG Energimontagegruppen AB, SE, Karlshamn²
+100.0
+46.7
+East Midlands Electricity Distribution Holdings, GB, Coventry²
+100.0
+100.0
+100.0
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+100.0
+E.ON Metering GmbH, DE, Munich²
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+100.0
+100.0
+E.ON UK Energy Markets Limited, GB, Coventry¹
+E.ON UK Energy Services Limited, GB, Coventry²
+E.ON UK Heat Limited, GB, Coventry¹
+100.0
+100.0
+100.0
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+99.9
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+E.ON UK Directors Limited, GB, Coventry²
+100.0
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON UK CoGeneration Limited, GB, Coventry¹
+E.ON Ljubljana d.o.o., SI, Ljubljana¹
+E.ON UK Steven's Croft Limited, GB, Coventry¹
+E.ON NA Capital Inc., US, Wilmington¹
+E.ON UK Infrastructure Services Limited, GB, Coventry¹
+E.ON North America Finance, LLC, US, Wilmington¹
+100.0
+E.ON UK Secretaries Limited, GB, Coventry²
+100.0
+E.ON Norge AS, NO, Stavanger²
+100.0
+E.ON UK PS Limited, GB, Coventry²
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+100.0
+E.ON UK Property Services Limited, GB, Coventry²
+E.ON Nord Sverige AB, SE, Malmö²
+100.0
+E.ON UK plc, GB, Coventry¹
+100.0
+E.ON Next Limited, GB, Coventry²
+100.0
+E.ON UK Pension Trustees Limited, GB, Coventry²
+100.0
+E.ON Next Energy Limited, GB, Coventry¹
+100.0
+100.0
+100.0
+Energie Schmallenberg GmbH, DE, Schmallenberg6
+44.0
+49.0
+Grünwald6
+40.0
+Energiepartner Elsdorf GmbH, DE, Elsdorf6
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
+49.0
+Energiepartner Dörth GmbH, DE, Dörth
+100.0
+100.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+Energiepartner Hermeskeil GmbH, DE, Hermeskeil
+49.0
+100.0
+Energienetze Ingolstadt GmbH, DE, Regensburg²
+100.0
+ElbEnergie GmbH, DE, Seevetal¹
+25.1
+Energienetze Holzwickede GmbH, DE, Holzwickede
+100.0
+EGD-Energiewacht Facilities B.V., NL, Assen¹
+25.1
+Energienetze Großostheim GmbH & Co. KG, DE, Groẞostheim6
+ELE - GEW Photovoltaikgesellschaft mbH, DE, Gelsenkirchen
+ELE Verteilnetz GmbH, DE, Gelsenkirchen¹
+100.0
+20.0
+49.0
+Elmregia GmbH, DE, Schöningen
+49.0
+Energie Region Taunus - Goldener Grund - GmbH & Co. KG, DE,
+Bad Camberg6
+30.0
+ELE-Scholven-Wind GmbH, DE, Gelsenkirchen
+70.0
+Energie-Pensions-Management GmbH, DE, Hanover²
+50.0
+ELE-RAG Montan Immobilien Erneuerbare Energien GmbH, DE,
+Bottrop
+40.0
+Elektrizitätswerk Heinrich Schirmer GmbH, DE, Schauenstein6
+Energiepartner Solar Kreuztal GmbH, DE, Kreuztal6
+Energiepartner Projekt GmbH, DE, Essen
+100.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf2
+100.0
+Haftung, DE, Landsberg am Lech²
+49.0
+Energiepartner Niederzier GmbH, DE, Niederzier
+Elektrizitätswerk Landsberg Gesellschaft mit beschränkter
+49.0
+Energiepartner Kerpen GmbH, DE, Kerpen6
+49.0
+eg.d, s.r.o., CZ, Prague²
+100.0
+Energienetze Berlin GmbH, DE, Berlin¹
+49.0
+ECO2 Solutions Group Limited, GB, Kidderminster4
+74.9
+Energiegesellschaft Leimen GmbH & Co.KG, DE, Leimen²
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+100.0
+Energiedirect B.V., NL, Waalre¹
+100.0
+EBY Port 1 GmbH, DE, Munich1,8
+Energiegesellschaft Leimen Verwaltungsgesellschaft mbH, DE,
+49.0
+100.0
+EBY Immobilien GmbH & Co KG, DE, Regensburg²
+50.1
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG
+(ews), DE, Bad Segeberg
+49.0
+EBERnetz GmbH & Co. KG, DE, Ebersberg
+100.0
+35.0
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+East Midlands Electricity Share Scheme Trustees Limited, GB,
+Coventry²
+Energie Vorpommern GmbH, DE, Trassenheide
+Leimen²
+74.9
+Economy Power Limited, GB, Coventry¹
+51.0
+EG.D Montáže, s.r.o., CZ, České Budějovice²
+100.0
+Energienetze Bayern GmbH, DE, Regensburg¹
+39.9
+EFR GmbH, DE, Munich6
+49.0
+Neufahrn bei Freising
+24.9
+EFG Erdgas Forchheim GmbH, DE, Forchheim6
+Energienetz Neufahrn/Eching GmbH & Co. KG, DE,
+49.0
+EfD Energie-für-Dich GmbH, DE, Potsdam6
+44.0
+Siegburg6
+100.0
+EE2 Erneuerbare Energien GmbH & Co. KG, DE, Lützen²
+energienatur Gesellschaft für Erneuerbare Energien mbH, DE,
+100.0
+EDT Energie Werder GmbH, DE, Werder (Havel)²
+100.0
+energielösung GmbH, DE, Regensburg²
+100.0
+100.0
+49.0
+E.ON IT UK Limited, GB, Coventry²
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+E.ON Energy Installation Services Limited, GB, Coventry¹
+100.0
+E.ON Bayern Verwaltungs AG, DE, Essen²
+100.0
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry2
+E.ON Energy Gas (Northwest) Limited, GB, Coventry2
+100.0
+E.ON Asset Management GmbH & Co. EEA KG, DE, Grünwald 1,8
+96.0
+E.ON Beteiligungen GmbH, DE, Essen 1,8
+E.ON Asist Complet S.A., RO, Târgu Mureş²
+E.ON Energilösningar AB, SE, Malmö¹
+100.0
+Budapest¹
+E.ON Áramszolgáltató Korlátolt Felelősségű Társaság, HU,
+100.0
+E.ON Energija d.o.o., HR, Zagreb¹
+100.0
+E.ON 44. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+Name, location
+Stake (%)
+Name, location
+221
+(as of December 31, 2020)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Strategy and Objectives
+E.ON Energy Markets GmbH, DE, Essen¹
+Report of the Supervisory Board
+100.0
+100.0
+100.0
+E.ON Energy Projects GmbH, DE, Munich¹
+E.ON Energy Solutions GmbH, DE, Essen¹
+E.ON Energy Solutions Limited, GB, Coventry¹
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca¹
+100.0
+E.ON Biofor Sverige AB, SE, Malmö¹
+100.0
+E.ON Bioerdgas GmbH, DE, Essen¹
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. . 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Perspekt GmbH, DE, Düsseldorf²
+E.ON 43. Verwaltungs GmbH, DE, Essen²
+E.ON Energie România S.A., RO, Târgu Mureş¹
+100.0
+E.ON 8. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energiatermelő Kft., HU, Budapest¹
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+100.0
+E.ON Energiamegoldások Kft., HU, Budapest¹
+100.0
+e.kundenservice Netz GmbH, DE, Hamburg¹
+E.ON Energidistribution AB, SE, Malmö¹
+100.0
+100.0
+e.distherm Wärmedienstleistungen GmbH, DE, Potsdam¹
+100.0
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+100.0
+e.disnatur21 Windpark GmbH & Co. KG, DE, Potsdam²
+100.0
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+100.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+E.ON Energia S.p.A., IT, Milan¹
+68.2
+100.0
+100.0
+100.0
+100.0
+E.ON Energie Dialog GmbH, DE, Potsdam²
+100.0
+99.9
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+100.0
+E.ON 39. Verwaltungs GmbH, DE, Essen²
+E.ON 40. Verwaltungs GmbH, DE, Essen²
+E.ON 42. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+E.ON 9. Verwaltungs GmbH, DE, Essen²
+100.0
+100.0
+E.ON Energie AG, DE, Düsseldorf1,8
+100.0
+E.ON 28. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich¹
+100.0
+E.ON 11. Verwaltungs GmbH, DE, Essen²
+100.0
+E.ON Energie 25. Beteiligungs-GmbH, DE, Munich²
+E.ON 29. Verwaltungs GmbH, DE, Essen²
+Stake (%)
+70.0
+E.ON Fastigheter 2 AB, SE, Malmö²
+100.0
+100.0
+E.ON Solar GmbH, DE, Essen²
+100.0
+Részvénytársaság, HU, Budapest¹
+100.0
+E.ON Solar d.o.o., HR, Zagreb¹
+E.ON Hungária Energetikai Zártkörűen Működő
+100.0
+E.ON Software Development SRL, RO, Bucharest²
+100.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf¹,8
+E.ON Hrvatska d.o.o., HR, Zagreb¹
+E.ON Slovensko, a.s., SK, Bratislava¹
+100.0
+E.ON Grund&Boden GmbH & Co. KG, DE, Essen¹
+100.0
+E.ON Servicii S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Grund&Boden Beteiligungs GmbH, DE, Essen¹
+100.0
+E.ON Servicii Clienţi S.R.L., RO, Târgu Mureş¹
+100.0
+100.0
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen 1,8
+100.0
+100.0
+100.0
+E.ON INTERNATIONAL FINANCE B.V., NL, Amsterdam¹
+100.0
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+E.ON Insurance Services GmbH, DE, Essen²
+100.0
+E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen¹
+100.0
+E.ON Innovation Hub S.A., RO, Târgu Mureş²
+E.ON Solutions GmbH, DE, Essen¹,8
+100.0
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+100.0
+E.ON Sverige AB, SE, Malmö¹
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Stiftung gGmbH, DE, Essen²
+100.0
+E.ON impulse GmbH, DE, Essen 1,8
+E.ON Telco, s.r.o., CZ, České Budějovice²
+100.0
+E.ON Service GmbH, DE, Essen²
+100.0
+100.0
+E.ON Flash S.R.L., RO, Târgu Mureş²
+100.0
+E.ON First Future Energy Holding B.V., NL, Amsterdam¹
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Finanzholding SE & Co. KG, DE, Essen 1,8
+100.0
+E.ON Produzione S.p.A., IT, Milan¹
+E.ON RAG-Beteiligungsgesellschaft mbH, DE, Düsseldorf1,8
+E.ON RE Investments LLC, US, Wilmington¹
+100.0
+100.0
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+100.0
+E.ON Finanzanlagen GmbH, DE, Düsseldorf¹,8
+100.0
+E.ON Power Plants Belgium BVBA, BE, Mechelen¹
+100.0
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Plin d.o.o., HR, Zagreb¹
+E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin²
+100.0
+100.0
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf1,8
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE, Düsseldorf¹,8
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf 1,8
+100.0
+E.ON Group Innovation GmbH, DE, Essen²
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+100.0
+E.ON Gastronomie GmbH, DE, Essen 1,8
+100.0
+100.0
+E.ON Rhein-Ruhr Werke GmbH, DE, Essen²
+E.ON România S.R.L., RO, Târgu Mureş¹
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö²
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+100.0
+E.ON Real Estate GmbH, DE, Essen¹
+100.0
+100.0
+ELMŰ DSO Holding Korlátolt Felelősségű Társaság, HU, Budapest¹
+EnergieRevolte GmbH, DE, Düren²
+100.0
+Fresh Energy GmbH i. L., DE, Berlin²
+49.0
+Gemeindewerke Bissendorf Netze GmbH & Co. KG, DE,
+Bissendorf6
+30.0
+Freiberger Stromversorgung GmbH (FSG), DE, Freiberg
+100.0
+Free Electrons LLC, US, Palo Alto²
+100.0
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+100.0
+52.8
+Fraku Service B.V., NL, Venlo¹
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+Fraku Installaties B.V., NL, Venlo¹
+100.0
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf1,8
+100.0
+Foton Technik Sp. z o.o., PL, Warsaw¹
+100.0
+Geas Energiewacht B.V., NL, Enschede¹
+90.0
+100.0
+100.0
+Gemeindewerke Bissendorf Netze Verwaltungs-GmbH, DE,
+Bissendorf6
+FSO GmbH & Co. KG, DE, Oberhausen
+49.0
+Gemeindewerke Uetze GmbH, DE, Uetze6
+100.0
+Future Energy Ventures GmbH, DE, Berlin²
+100.0
+49.0
+Haftung, DE, Namborn6
+Future Energy Ventures Fund I SCA SICAV-RAIF, LU, Munsbach²
+Gemeindewerke Namborn, Gesellschaft mit beschränkter
+100.0
+49.0
+Fundacja innogy w Polsce, PL, Warsaw²
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing6
+94.0
+FUCATUS Vermietungsgesellschaft mbH & Co. Objekt
+Recklinghausen Kommanditgsellschaft, DE, Düsseldorf²
+49.0
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+50.0
+FSO Verwaltungs-GmbH, DE, Oberhausen6
+45.0
+Gemeindewerke Everswinkel GmbH, DE, Everswinkel
+50.0
+49.0
+Gemeindewerke Wedemark GmbH, DE, Wedemark
+GasWacht Friesland Facilities B.V., NL, Leeuwarden¹
+50.0
+FEV Europe GmbH, DE, Essen 1,8
+50.0
+Fernwärmeversorgung Zwönitz GmbH (FVZ), DE, Zwönitz
+100.0
+Investitionsgesellschaft mbH, DE, Saarlouis²
+Fernwärmeversorgung Saarlouis- Steinrausch
+50.0
+Haftung (FFG), DE, Freising
+49.0
+Gas-Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH,
+DE, Rheda-Wiedenbrück
+100.0
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+FAMOS - Facility Management Osnabrück GmbH, DE, Osnabrück
+49.0
+Gas-Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG,
+DE, Rheda-Wiedenbrück
+100.0
+FAMIS GmbH, DE, Saarbrücken¹
+25.1
+Gasnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann6
+65.0
+Falkenbergs Biogas AB, SE, Malmö²
+49.0
+49.0
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+FEV Future Energy Ventures Israel Ltd, IL, Tel Aviv¹
+FEV GP S.a.r.l, LU, Munsbach²
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel6
+90.0
+FITAS Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+49.0
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+100.0
+FIDELIA Holding LLC, US, Wilmington¹
+49.0
+Gasversorgung Unterfranken Gesellschaft mit beschränkter
+Haftung, DE, Würzburg5
+49.0
+100.0
+FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg6
+50.0
+50.0
+49.0
+49.0
+100.0
+49.0
+Gasnetzgesellschaft Warburg GmbH & Co. KG, DE, Warburg
+Gasnetzgesellschaft Windeck mbH & Co. KG, DE, Siegburg²
+Gasnetzgesellschaft Wörrstadt mbH & Co. KG, DE, Saulheim
+Gasnetzgesellschaft Wörrstadt Verwaltung mbH, DE, Saulheim6
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn¹
+100.0
+FEV US LLC, US, Palo Alto¹
+100.0
+95.0
+49.0
+Future Energy Ventures Management GmbH, DE, Essen 1,8
+100.0
+GNEE Gesellschaft zur Nutzung erneuerbarer Energien mbH
+Freisen, DE, Freisen
+50.0
+25.1
+100.0
+100.0
+Hermann Stibbe Verwaltungs-GmbH, DE, Wunstorf²
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+hmstr GmbH, DE, Saarbrücken
+100.0
+GKB Gesellschaft für Kraftwerksbeteiligungen mbH, DE, Cottbus²
+GKD Gesellschaft für kommunale Dienstleistungen mbH, DE,
+Cologne
+23.9
+25.2
+HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
+Gemeinsames europäisches Unternehmen, DE, Hamm6
+Hof Promotion B.V., NL, Eindhoven¹
+49.0
+75.0
+50.0
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co.
+OHG, DE, Neualbenreuth6
+41.7
+20.0
+100.0
+Heizungs- und Sanitärbau WIJA GmbH, DE,
+Bad Neuenahr-Ahrweiler²
+100.0
+Get Energy Solutions Szolgáltató Kft., HU, Budapest¹
+GfB, Gesellschaft für Baudenkmalpflege mbH, DE, Idar-Oberstein
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+Gichtgaskraftwerk Dillingen GmbH & Co. KG, DE, Dillingen6
+GISA GmbH, DE, Halle (Saale)6
+33.3
+Hennef (Sieg) Netz GmbH & Co. KG, DE, Hennef6
+40.0
+26.0
+49.0
+49.9
+100.0
+iamsmart GmbH i. L., DE, Essen²
+Gottburg Energie- und Wärmetechnik GmbH & Co. KG i. L., DE,
+Leck6
+100.0
+Huisman Warmtetechniek B.V., NL, Stadskanaal¹
+100.0
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+49.0
+Hub2Go GmbH, DE, Hamburg6
+100.0
+50.0
+100.0
+HSL Laibacher GmbH, DE, Wiesen²
+50.0
+GOLLIPP Bioerdgas GmbH & Co. KG, DE, Gollhofen
+100.0
+Home.ON GmbH, DE, Aachen²
+48.0
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen
+50.0
+Holsteiner Wasser GmbH, DE, Neumünster6
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen
+Heizkraftwerk Zwickau Süd GmbH & Co. KG, DE, Zwickau6
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein
+GmbH, DE, Kiel6
+25.1
+83.2
+Gemeinschaftskernkraftwerk Grohnde Management GmbH,
+DE, Emmerthal²
+GasLINE Telekommunikationsnetzgesellschaft deutscher
+Gasversorgungsunternehmen mbH & Co. KG, DE, Straelen
+20.0
+100.0
+Emmerthal¹
+GasLINE Telekommunikationsnetz-Geschäftsführungsgesellschaft
+deutscher Gasversorgungsunternehmen mbH, DE, Straelen
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. OHG, DE,
+49.0
+Gasgesellschaft Kerken Wachtendonk mbH, DE, Kerken
+20.0
+50.0
+36.9
+GASAG AG, DE, Berlin5
+49.0
+Gas- und Wasserwerke Bous - Schwalbach GmbH, DE, Bous5
+100.0
+Gemeindewerke Windeck GmbH & Co. KG, DE, Siegburg²
+35.0
+G&L Gastro-Service GmbH, DE, Augsburg6
+49.0
+Gemeindewerke Wietze GmbH, DE, Wietze6
+Gemeinnützige Gesellschaft zur Förderung des E.ON Energy
+Research Center mbH, DE, Aachen6
+Gas-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg
+Gas-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+25.1
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG., DE,
+HCL Netze GmbH & Co. KG, DE, Herzebrock-Clarholz6
+20.0
+49.0
+Havelstrom Zehdenick GmbH, DE, Zehdenick
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
+Braunau am Inn6
+25.1
+HaseNetz GmbH & Co. KG, DE, Gehrde
+24.4
+Stake (%)
+Name, location
+Stake (%)
+Geotermisk Operaterselskab ApS, DK, Kirke Saby6
+Name, location
+225
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. . 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+66.7
+Emmerthal¹
+25.1
+75.0
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen
+28.8
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
+Wörth am Main6
+25.1
+50.0
+Ergon Energia S.r.l. in liquidazione, IT, Milan6
+50.0
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+40.5
+e-regio GmbH & Co. KG, DE, Euskirchen5
+10.0
+50.0
+50.0
+Erdgasversorgung Schwalmtal GmbH & Co. KG, DE, Viersen
+Erdgasversorgung Schwalmtal Verwaltungs-GmbH, DE, Viersen
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE, Putzbrunn6
+Energieversorgung Oberhausen Aktiengesellschaft, DE,
+Oberhausen 5,11
+Niederkassel6
+Energieversorgung Niederkassel GmbH & Co. KG, DE,
+50.0
+Erdgasversorgung Industriepark Leipzig Nord GmbH, DE, Leipzig
+49.0
+Energieversorgung Marienberg GmbH, DE, Marienberg
+100.0
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+25.1
+100.0
+49.0
+100.0
+50.0
+100.0
+100.0
+Energiewacht N.V., NL, Veendam¹
+55.0
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+100.0
+Energiewacht Groep B.V., NL, Meppel¹
+100.0
+ESK GmbH, DE, Dortmund²
+100.0
+Energiewacht Facilities B.V., NL, Zwolle¹
+Ergon Overseas Holdings, GB, Coventry¹
+25.1
+49.0
+Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde6
+50.0
+ErwärmBAR GmbH, DE, Eberswalde
+51.0
+25.1
+Erneuerbare Energien Rheingau-Taunus GmbH, DE,
+Bad Schwalbach6
+Energieversorgung Timmendorfer Strand GmbH & Co. KG, DE,
+Timmendorfer Strand²
+30.0
+Energieversorgung Sehnde GmbH, DE, Sehnde
+eShare.one GmbH, DE, Dortmund 6
+100.0
+enviaM Neue Energie Management GmbH, DE, Lützen²
+enviaM Zweite Neue Energie Management GmbH, DE, Lützen²
+eprimo GmbH, DE, Neu-Isenburg¹
+Energieversorgung Kranenburg Netze Verwaltungs GmbH, DE,
+Kranenburg6
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+34.0
+34.0
+Energieversorgung Beckum GmbH & Co. KG, DE, Beckum (Westf.)6
+Energieversorgung Beckum Verwaltungs-GmbH, DE,
+Beckum (Westf.)6
+100.0
+100.0
+ELMŰ-ÉMÁSZ Solutions Kft., HU, Budapest¹
+ELMŰ-ÉMÁSZ Telco Kft., HU, Budapest²
+25.1
+Energieversorgung Bad Bentheim Verwaltungs-GmbH, DE,
+Bad Bentheim6
+100.0
+Report of the Supervisory Board
+ELMŰ-ÉMÁSZ Energiatároló Kft., HU, Budapest¹
+Elmű-Émász Energiaszolgáltató Zrt., HU, Budapest¹
+25.1
+Energieversorgung Bad Bentheim GmbH & Co. KG, DE,
+Bad Bentheim6
+100.0
+ELMŰ-ÉMÁSZ Energiakereskedő Kft., HU, Budapest¹
+69.5
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau
+100.0
+ELMŰ Hálózati Elosztó Kft., HU, Budapest¹
+100.0
+100.0
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+25.1
+Energieversorgung Kranenburg Netze GmbH & Co. KG, DE,
+Kranenburg6
+100.0
+enviaM Erneuerbare Energien Verwaltungsgesellschaft mbH,
+DE, Lützen²
+24.9
+Energieversorgung Hürth GmbH, DE, Hürth
+49.0
+Energieversorgung Horstmar/Laer GmbH & Co. KG, DE, Horstmar
+100.0
+100.0
+enviaM Beteiligungsgesellschaft Chemnitz GmbH, DE, Chemnitz¹
+enviaM Beteiligungsgesellschaft mbH, DE, Essen¹
+45.0
+Energieversorgung Guben GmbH, DE, Guben5
+50.0
+100.0
+envia THERM GmbH, DE, Bitterfeld-Wolfen¹
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+beschränkter Haftung, DE, Halblech
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+(as of December 31, 2020)
+223
+Energiewacht West Nederland B.V., NL, Assen¹
+100.0
+100.0
+100.0
+20.0
+25.0
+EWR Dienstleistungen GmbH & Co. KG, DE, Worms5
+EWR GmbH, DE, Remscheid5
+24.2
+ENTRO GmbH Marktbergel, DE, Marktbergel
+25.1
+Ense Stromnetz GmbH & Co. KG, DE, Ense
+1.3
+EWR Aktiengesellschaft, DE, Worms 5, 11
+20.0
+envia Mitteldeutsche Energie AG, DE, Chemnitz¹
+ENNI Energie & Umwelt Niederrhein GmbH, DE, Moers5
+EWIS BV, NL, Ede¹
+100.0
+Enervolution GmbH, DE, Bochum²
+33.2
+evm Windpark Höhn GmbH & Co. KG, DE, Höhn
+25.1
+ENERVENTIS GmbH & Co. KG, DE, Saarbrücken6
+100.0
+EVIP GmbH, DE, Bitterfeld-Wolfen¹
+60.0
+100.0
+enermarket GmbH, DE, Frankfurt am Main6
+58.6
+envia TEL GmbH, DE, Markkleeberg¹
+Bergheim
+Gas-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE,
+28.9
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main6
+25.1
+Kerpen
+Gas-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+53.7
+EWV Energie- und Wasser-Versorgung GmbH, DE, Stolberg/Rhld.¹
+Stake (%)
+envia SERVICE GmbH, DE, Cottbus¹
+Name, location
+Name, location
+224
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+Notes
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+45.0
+45.0
+50.2
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg6
+EWV Baesweiler GmbH & Co. KG, DE, Baesweiler6
+EWV Baesweiler Verwaltungs GmbH, DE, Baesweiler6
+100.0
+100.0
+Stake (%)
+49.0
+Gemünden am Main6
+50.0
+energis GmbH, DE, Saarbrücken¹
+100.0
+Essent N.V., NL, 's-Hertogenbosch¹
+100.0
+Energiewerken B.V., NL, Almere¹
+100.0
+Essent IT B.V., NL, Arnhem¹
+49.0
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+100.0
+71.9
+Essent Energy Group B.V., NL, Arnhem¹
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+100.0
+Essent EnergieBewust Holding B.V., NL, 's-Hertogenbosch¹
+50.0
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching6
+100.0
+Essent Energie Verkoop Nederland B.V., NL, 's-Hertogenbosch¹
+50.0
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+100.0
+49.0
+Essent Nederland B.V., NL, Arnhem¹
+100.0
+energis-Netzgesellschaft mbH, DE, Saarbrücken¹
+Enerjisa Üretim Santralleri A.Ş., TR, Istanbul4
+EVG Energieversorgung Gemünden GmbH, DE,
+40.0
+Enerjisa Enerji A.Ş., TR, Istanbul4
+51.0
+EuroSkyPark GmbH, DE, Saarbrücken¹
+49.0
+energy4u GmbH & Co. KG, DE, Siegburg6
+100.0
+Észak-magyarországi Áramszolgáltató Zrt., HU, Miskolc¹
+100.0
+Energy Ventures GmbH, DE, Saarbrücken²
+100.0
+Essent Sales Portfolio Management B.V., NL, 's-Hertogenbosch¹
+100.0
+Energy Collection Services Limited, GB, Coventry²
+100.0
+Essent Rights B.V., NL, 's-Hertogenbosch¹
+20.0
+Energotel, a.s., SK, Bratislava
+100.0
+Essent Retail Energie B.V., NL, 's-Hertogenbosch¹
+100.0
+ESN Sicherheit und Zertifizierung GmbH, DE, Schwentinental²
+Essent Belgium N.V., BE, Kontich¹
+Dorsten Netz GmbH & Co. KG, DE, Dorsten
+E.ON Drive Infrastructure UK Limited, GB, Coventry²
+e.discom Telekommunikation GmbH, DE, Rostock¹
+KommEnergie Erzeugungs GmbH, DE, Eichenau
+100.0
+innogy Slovensko s.r.o., SK, Bratislava¹
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Budapest²
+100.0
+innogy Sechzehnte Vermögensverwaltungs GmbH, DE, Essen²
+100.0
+Klíma És Hűtéstechnológiai Tervező, Szerelő És Kereskedelmi Kft.,
+HU, Budapest¹
+100.0
+100.0
+innogy SE Service s.r.o., CZ, Prague²
+65.0
+KlickEnergie Verwaltungs-GmbH, DE, Neuss6
+innogy SE, DE, Essen¹
+100.0
+innogy Polska Solutions Sp. z o.o., PL, Warsaw¹
+65.0
+49.0
+100.0
+26.6
+Kite Power Systems Limited, GB, Chelmsford6
+100.0
+innogy Polska S.A., PL, Warsaw¹
+innogy Solutions s.r.o., SK, Bratislava²
+KommEnergie GmbH, DE, Eichenau
+gemeinnützige GmbH, DE, Celle
+25.1
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+100.0
+25.0
+gemeinnützige GmbH, DE, Celle
+Kommunale Klimaschutzgesellschaft Landkreis Celle
+100.0
+innogy Zweite Vermögensverwaltungs GmbH, DE, Essen 1,8
+innogy Zwölfte Vermögensverwaltungs GmbH, DE, Essen²
+innogy.C3 GmbH, DE, Essen
+100.0
+100.0
+innogy Vierzehnte Vermögensverwaltungs GmbH, DE, Essen²
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt6
+100.0
+innogy Sustainable Solutions LLC, US, Boston²
+49.0
+Kommunale Dienste Marpingen Gesellschaft mit beschränkter
+Haftung, DE, Marpingen
+100.0
+innogy Stoen Operator Sp. z o.o., PL, Warsaw¹
+100.0
+innogy South East Europe s.r.o., SK, Bratislava²
+55.0
+49.0
+25.0
+100.0
+100.0
+KEN GmbH & Co. KG, DE, Neunkirchen²
+100.0
+innogy Fünfzehnte Vermögensverwaltungs GmbH, DE, Essen²
+65.0
+KEN Geschäftsführungsgesellschaft mbH, DE, Neunkirchen²
+100.0
+innogy Finance B.V., NL, 's-Hertogenbosch¹
+100.0
+Kemsley CHP Limited, GB, Coventry¹
+100.0
+53.6
+innogy Energy Belgium BVBA, BE, Hove¹
+49.0
+KDT Kommunale Dienste Tholey GmbH, DE, Tholey6
+Kemkens B.V., NL, Oss5
+100.0
+innogy e-mobility US LLC, US, Delaware¹
+100.0
+Stake (%)
+Name, location
+Stake (%)
+innogy eMobility Solutions GmbH, DE, Dortmund¹
+Name, location
+49.0
+innogy Polska Operations Sp. z o.o., PL, Warsaw²
+innogy Hungária Tanácsadó Kft., HU, Budapest¹
+innogy Innovation UK Ltd., GB, London²
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+28.6
+KEW Kommunale Energie- und Wasserversorgung
+Aktiengesellschaft, DE, Neunkirchen5
+100.0
+innogy Polska IT Support Sp. z o.o., PL, Warsaw¹
+100.0
+50.0
+100.0
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+KEVAG Telekom GmbH, DE, Koblenz
+100.0
+100.0
+innogy Neunte Vermögensverwaltungs GmbH, DE, Essen²
+innogy Polska Development Sp. z o.o., PL, Warsaw²
+innogy Middle East & North Africa Ltd., AE, Dubai²
+66.7
+50.0
+33.3
+80.0
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+49.0
+100.0
+innogy International Participations N.V., NL, 's-Hertogenbosch¹
+innogy International Middle East, AE, Dubai6
+100.0
+100.0
+INS Insider Navigation Systems GmbH, AT, Vienna
+20.8
+Installatietechniek Totaal B.V., NL, Leeuwarden¹
+Midlands Electricity Limited, GB, Coventry²
+MINUS 181 GmbH, DE, Parchim6
+KVK Kompetenzzentrum Verteilnetze und Konzessionen GmbH,
+DE, Cologne
+90.0
+34.0
+100.0
+MEON Verwaltungs GmbH, DE, Essen²
+Metering Süd GmbH & Co. KG, DE, Augsburg
+Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG
+i.L., DE, Grünwald²
+100.0
+KTA Kältetechnischer Anlagenbau GmbH, DE, Garbsen²
+Stake (%)
+100.0
+Name, location
+Name, location
+227
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³ Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. . 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+40.0
+41.7
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen6
+KSP Kommunaler Service Püttlingen GmbH, DE, Püttlingen
+Stake (%)
+49.0
+25.1
+MITGAS Mitteldeutsche Gasversorgung GmbH, DE, Halle (Saale)¹
+25.1
+MNG Stromnetze GmbH & Co. KG, DE, Lüdinghausen
+89.9
+Lechwerke AG, DE, Augsburg¹
+40.0
+Mittlere Donau Kraftwerke AG, DE, Landshut
+100.0
+Lech Energie Verwaltung GmbH, DE, Augsburg²
+100.0
+Mitteldeutsche Netzgesellschaft Strom mbH, DE, Halle (Saale)¹
+74.9
+100.0
+Mitteldeutsche Netzgesellschaft mbH, DE, Chemnitz²
+100.0
+LANDWEHR Wassertechnik GmbH, DE, Schöppenstedt²
+Lech Energie Gersthofen GmbH & Co. KG, DE, Gersthofen²
+100.0
+100.0
+Mitteldeutsche Netzgesellschaft Gas HD mbH, DE, Halle (Saale)²
+Mitteldeutsche Netzgesellschaft Gas mbH, DE, Halle (Saale)¹
+69.6
+100.0
+KWS Kommunal-Wasserversorgung Saar GmbH, DE, Saarbrücken²
+LandE GmbH, DE, Wolfsburg¹
+75.4
+100.0
+KAWAG Netze Verwaltungsgesellschaft mbH, DE, Abstatt
+49.0
+KAWAG Netze GmbH & Co. KG, DE, Abstatt
+Koprivnica Opskrba d.o.o., HR, Koprivnica¹
+100.0
+Isoprofs België BVBA, BE, Hasselt¹
+66.7
+Konsortium Energieversorgung Opel beschränkt haftende oHG,
+DE, Karlstein 4,10
+100.0
+Isoprofs B.V., NL, Meijel¹
+100.0
+Konnektor B.V., NL, Amsterdam¹
+49.0
+100.0
+Isar Loisach Stromnetz GmbH & Co. KG, DE, Wolfratshausen
+Kommunalwerk Rudersberg Verwaltungs-GmbH, DE, Rudersberg6
+51.0
+IPP ESN Power Engineering GmbH, DE, Kiel²
+49.9
+Kommunalwerk Rudersberg GmbH & Co. KG, DE, Rudersberg6
+25.0
+Intelligent Maintenance Systems Limited, GB, Milton Keynes
+49.0
+Kommunale Netzgesellschaft Steinheim a. d. Murr GmbH & Co.
+KG, DE, Steinheim an der Murr6
+100.0
+49.9
+It's a beautiful world B.V., NL, Amersfoort¹
+100.0
+Koprivnica Plin d.o.o., HR, Koprivnica¹
+33.3
+Kraftwerk Wehrden Gesellschaft mit beschränkter Haftung,
+DE, Völklingen6
+49.0
+KAWAG AG & Co. KG, DE, Pleidelsheim
+50.0
+Kavernengesellschaft Staßfurt mbH, DE, Staẞfurt
+100.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+50.0
+Kalmar Energi Holding AB, SE, Kalmar4
+100.0
+Kraftwerk Marl GmbH, DE, Munich¹
+40.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+100.0
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+100.0
+Kraftwerk Burghausen GmbH, DE, Munich¹
+80.0
+iWATT s.r.o., SK, Košice²
+100.0
+(as of December 31, 2020)
+Leitungs- und Kanalservice Bauer GmbH, DE,
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Notes
+32.4
+Coromatic Group AB, SE, Bromma¹
+100.0
+Biogas Wassenberg Verwaltungs GmbH, DE, Wassenberg6
+32.4
+Coromatic Group ApS, DK, Odense¹
+100.0
+Biogasanlage Schwalmtal GmbH, DE, Schwalmtal²
+99.2
+Coromatic Holding AB, SE, Bromma¹
+Biogas Wassenberg GmbH & Co. KG, DE, Wassenberg6
+100.0
+90.0
+Coromatic International AB, SE, Bromma²
+100.0
+Bioplyn Rozhanovce, s.r.o., SK, Košice6
+34.0
+Coromatic Tullinge AB, SE, Bromma²
+100.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+40.0
+Cremlinger Energie GmbH, DE, Cremlingen
+Biomasseverwertung Straubing GmbH, DE, Straubing6
+49.0
+100.0
+100.0
+100.0
+Bioenergie Merzig GmbH, DE, Merzig²
+51.0
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+33.3
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+90.0
+COMCO MCS S.A., LU, Luxembourg²
+100.0
+Bioerdgas Schwandorf GmbH, DE, Schwandorf2
+Coromatic As a Service AB, SE, Bromma²
+100.0
+100.0
+Biogas Ducherow GmbH, DE, Ducherow²
+80.0
+Coromatic AB, SE, Bromma¹
+100.0
+Biogas Schwalmtal GmbH & Co. KG, DE, Schwalmtal²
+65.5
+Coromatic AS, NO, Trollåsen¹
+100.0
+Biogas Steyerberg GmbH, DE, Steyerberg²
+Coromatic A/S, DK, Roskilde¹
+CM Intressenter AS, NO, Trollåsen¹
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+Cuculus GmbH, DE, Ilmenau
+100.0
+DES Dezentrale Energien Schmalkalden GmbH, DE, Schmalkalden
+33.3
+Deutsche Gesellschaft für Wiederaufarbeitung von
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben
+E.ON Business Services Regensburg GmbH, DE, Regensburg 1,8
+E.ON Business Solutions GmbH, DE, Essen¹
+100.0
+100.0
+42.5
+E.ON Business Solutions S.r.l., IT, Milan¹
+100.0
+E.ON Business Services lași S.A., RO, Bucharest²
+DigiKoo GmbH, DE, Essen²
+Discovergy GmbH, DE, Aachen
+24.4
+E.ON Business Solutions SAS, FR, Levallois-Perret²
+E.ON CDNE. S.p.A., IT, Milan²
+100.0
+100.0
+DON-Stromnetz GmbH & Co. KG, DE, Donauwörth6
+49.0
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+100.0
+DON-Stromnetz Verwaltungs GmbH, DE, Donauwörth6
+100.0
+100.0
+100.0
+Stake (%)
+20.4
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+Borowski GmbH & Co. KG, DE, Essen²
+Breitband-Infrastrukturgesellschaft Cochem-Zell mbH, DE,
+25.6
+DE M GmbH, DE, Elsdorf²
+99.9
+100.0
+Cochem6
+20.7
+bremacon GmbH, DE, Bremen
+48.0
+Der Solarbauer - Borowski - Verwaltungs GmbH, DE, Essen²
+DANEB Datennetze Berlin GmbH, DE, Berlin²
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+Deine Wärmeenergie GmbH Co. KG, DE, Essen¹
+Delgaz Grid S.A., RO, Târgu Mureş¹
+100.0
+100.0
+56.5
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+220
+Name, location
+Stake (%)
+Name, location
+100.0
+100.0
+100.0
+Citigen (London) Limited, GB, Coventry¹
+100.0
+innogy Consulting & Ventures Holdings LLC, US, Boston²
+100.0
+GSH Green Steam Hürth GmbH, DE, Munich¹
+100.0
+innogy Consulting & Ventures Czech Republic s.r.o., CZ, Prague²
+50.0
+GrønGas Partner A/S, DK, Hirtshals6
+100.0
+innogy Consulting & Ventures Americas, LLC, US, Boston²
+GWG Grevenbroich GmbH, DE, Grevenbroich¹
+100.0
+100.0
+innogy Commodity Markets GmbH, DE, Essen¹
+49.0
+Greenplug GmbH, DE, Hamburg6
+100.0
+innogy chargetech GmbH, DE, Essen²
+50.0
+greenited GmbH, DE, Hamburg6
+100.0
+Innogy Business Services UK Limited, GB, Swindon¹
+greenXmoney.com GmbH i. L., DE, Neu-Ulm²
+100.0
+60.0
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+INNOGY E-MOBILITY LIMITED, GB, London²
+100.0
+20.8
+Harzwasserwerke GmbH, DE, Hildesheim5
+HanseWerk Natur GmbH, DE, Hamburg¹
+100.0
+innogy Direkt GmbH, DE, Dortmund¹
+66.5
+HanseWerk AG, DE, Quickborn¹
+innogy Consulting & Ventures NL B.V., NL, Eindhoven²
+100.0
+100.0
+HanseGas GmbH, DE, Quickborn¹
+100.0
+innogy Consulting GmbH, DE, Essen²
+44.8
+Hams Hall Management Company Limited, GB, Coventry
+100.0
+innogy Consulting & Ventures UK Ltd., GB, London²
+89.9
+GWG Kommunal GmbH, DE, Grevenbroich²
+innogy Consulting U.S. LLC, US, Boston²
+Greenergetic GmbH, DE, Bielefeld²
+100.0
+innogy Beteiligungsholding GmbH, DE, Essen 1,8
+Induboden GmbH, DE, Düsseldorf²
+GREEN GECCO Beteiligungsgesellschaft-Verwaltungs GmbH,
+DE, Troisdorf6
+100.0
+Improvers Community B.V., NL, Utrecht¹
+20.7
+GREEN GECCO Beteiligungsgesellschaft mbH & Co. KG, DE,
+Troisdorf6
+100.0
+Improvers B.V., NL, 's-Hertogenbosch¹
+49.9
+Gottburg Verwaltungs GmbH i. L., DE, Leck6
+100.0
+100.0
+CHN Electrical Services Limited, GB, Coventry²
+100.0
+100.0
+CHN Group Ltd, GB, Coventry2
+100.0
+Bioenergie Kirchspiel Anhausen GmbH & Co.KG, DE, Anhausen²
+51.0
+CHN Special Projects Limited, GB, Coventry²
+100.0
+Bioenergie Kirchspiel Anhausen Verwaltungs-GmbH, DE,
+Anhausen²
+Improbed AB, SE, Malmö²
+20.7
+Induboden GmbH & Co. Grundstücksgesellschaft oHG, DE, Essen²
+100.0
+100.0
+greenergetic Energie Service Management GmbH, DE, Bielefeld²
+100.0
+innogy Benelux Holding B.V., NL, 's-Hertogenbosch¹
+100.0
+greenergetic Energie Service GmbH & Co. KG, DE, Bielefeld²
+49.9
+Nienburg/Weser
+50.0
+Green Urban Energy GmbH, DE, Berlinɓ
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+45.0
+Green Solar Herzogenrath GmbH, DE, Herzogenrath
+50.0
+InfraServ - Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz6
+100.0
+Green Sky Energy Limited, GB, Coventry¹
+100.0
+Industry Development Services Limited, GB, Coventry²
+49.2
+49.0
+Industriekraftwerk Greifswald GmbH, DE, Kassel6
+GREEN Gesellschaft für regionale und erneuerbare Energie
+mbH, DE, Stolberg/Rhld.6
+226
+Schönbrunn i. Steigerwald²
+100.0
+Leitungspartner GmbH, DE, Düren¹
+BTB-Blockheizkraftwerks, Träger- und Betreibergesellschaft mbH
+Berlin, DE, Berlin¹
+100.0
+Bayernwerk zweite Portfolio GmbH & Co. KG, DE, Regensburg²
+100.0
+BETA GmbH, DE, Illingen²
+100.0
+BTC Power Cebu Inc., PH, Lapu-Lapu City2
+100.0
+Beteiligung H1 GmbH, DE, Helmstedt²
+100.0
+100.0
+Budapesti Dísz- és Közvilágítási Korlátolt Felelősségű Társaság,
+HU, Budapest4
+Beteiligung H2 GmbH, DE, Helmstedt²
+100.0
+Budapesti Elektromos Művek Zrt., HU, Budapest¹
+100.0
+Beteiligung N1 GmbH, DE, Helmstedt²
+100.0
+Bützower Wärme GmbH, DE, Bützow
+20.0
+Beteiligung N2 GmbH, DE, Helmstedt²
+100.0
+50.0
+Cameleon B.V. i. L., NL, Amsterdam²
+Bayernwerk Regio Energie GmbH, DE, Regensburg²
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth6
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+219
+(as of December 31, 2020)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+33.3
+100.0
+100.0
+Broadband TelCom Power, Inc., US, Santa Ana¹
+Brüggen.E-Netz GmbH & Co. KG, DE, Brüggen
+100.0
+25.1
+Bayernwerk Netz GmbH, DE, Regensburg¹
+100.0
+Brüggen.E-Netz Verwaltungs-GmbH, DE, Brüggen
+25.1
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+100.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+Report of the Supervisory Board
+100.0
+Cegecom S.A., LU, Luxembourg¹
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz
+46.5
+Charge4Europe GmbH, DE, Essen
+50.0
+Bikesquare Srls, IT, Cuneo6
+30.0
+Charge-ON GmbH, DE, Essen¹
+100.0
+bildungszentrum energie GmbH, DE, Halle (Saale)²
+100.0
+100.0
+CHN Contractors Limited, GB, Coventry²
+Bioenergie Bad Wimpfen GmbH & Co. KG, DE, Bad Wimpfen²
+Bioenergie Bad Wimpfen Verwaltungs-GmbH, DE, Bad Wimpfen²
+51.0
+100.0
+Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Helmstedt²
+50.0
+000 E.ON Connecting Energies, RU, Moscow
+40.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+50.0
+OMNI Energy Kft., HU, Kiskunhalas6
+100.0
+Beteiligungsgesellschaft der Energieversorgungsunternehmen
+Certified B.V., NL, Amsterdam¹
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+100.0
+an der Kerntechnische Hilfsdienst GmbH GbR, DE,
+Eggenstein-Leopoldshofen
+44.6
+Celle-Uelzen Netz GmbH, DE, Celle¹
+97.5
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+100.0
+Celsium A Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+40.7
+Beteiligungsgesellschaft Werl mbH, DE, Essen²
+Celsium DOM Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+BEW Netze GmbH, DE, Wipperfürth
+61.0
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+100.0
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels
+25.1
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+87.8
+51.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+E.ON Control Solutions Limited, GB, Coventry¹
+100.0
+100.0
+26.7
+Placense Ltd., IL, Caesarea6
+100.0
+NEW Windenergie Verwaltung GmbH, DE, Mönchengladbach²
+NEW Windpark Linnich GmbH & Co. KG, DE, Mönchengladbach²
+PIS Progress Sp. z o.o., PL, Piła²
+100.0
+NEW Viersen GmbH, DE, Viersen¹
+PFALZWERKE AKTIENGESELLSCHAFT, DE,
+Ludwigshafen am Rhein5
+98.7
+NEW Tönisvorst GmbH, DE, Tönisvorst¹
+100.0
+100.0
+50.0
+Perstorps Fjärrvärme AB, SE, Perstorp6
+95.5
+NEW Re GmbH, DE, Mönchengladbach²
+100.0
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg²
+100.0
+NEW Niederrhein Wasser GmbH, DE, Viersen¹
+100.0
+Peißenberger Kraftwerksgesellschaft mit beschränkter
+Haftung, DE, Peiẞenberg²
+NEW Smart City GmbH, DE, Mönchengladbach²
+100.0
+40.0
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. . 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+E.ON Drive Infrastructure Italy S.r.l., IT, Milan²
+100.0
+E.DIS Netz GmbH, DE, Fürstenwalde/Spree¹
+100.0
+100.0
+E.ON Drive Infrastructure France SAS, FR, Levallois-Perret²
+E.ON Drive Infrastructure GmbH, DE, Essen 1,8
+100.0
+E.DIS Bau- und Energieservice GmbH, DE, Fürstenwalde/Spree²
+67.0
+100.0
+E.DIS AG, DE, Fürstenwalde/Spree¹
+E.ON Distribuce, a.s. (since 2021 EG.D, a.s.), CZ, České Budějovice¹
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+E.ON Digital Technology Hungary Kft., HU, Budapest²
+100.0
+E WIE EINFACH GmbH, DE, Cologne¹
+100.0
+E.ON Digital Technology GmbH, DE, Hanover¹
+100.0
+100.0
+NEW Niederrhein Energie und Wasser GmbH, DE,
+Mönchengladbach¹
+100.0
+PEG Infrastruktur AG, CH, Zug13
+Oschatz Netz GmbH & Co. KG, DE, Oschatz²
+49.0
+Netzgesellschaft Südwestfalen mbH & Co. KG, DE, Netphen6
+33.6
+Orcan Energy AG, DE, Munich6
+Dutchdelta Finance S.à r.L., LU, Luxembourg¹
+100.0
+100.0
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+E.ON Dialog S.R.L., RO, Şelimbăr²
+74.9
+49.0
+DUKO Hlinsko, s.r.o., CZ, Hlinsko6
+Drivango GmbH i. L., DE, Düsseldorf²
+100.0
+Drava CHP Plant d.o.o., HR, Zagreb²
+100.0
+100.0
+E.ON Country Hub Germany GmbH, DE, Berlin 1,8
+E.ON Danmark A/S, DK, Frederiksberg¹
+39.9
+beschränkter Haftung, DE, Dortmund
+Dortmunder Energie- und Wasserversorgung Gesellschaft mit
+100.0
+Netzgesellschaft Syke GmbH, DE, Syke
+49.0
+Oschatz Netz Verwaltungs GmbH, DE, Oschatz²
+100.0
+NEW Netz GmbH, DE, Geilenkirchen¹
+40.0
+pear.ai Inc., US, San Francisco
+100.0
+New Cogen Sp. z o.o., PL, Warsaw²
+49.9
+Pannon Watt Energetikai Megoldások Zrt., HU, Győr
+100.0
+NEW b_gas Eicken GmbH, DE, Schwalmtal²
+30.0
+OurGreenCar Sweden AB, SE, Malmö
+40.0
+NEW AG, DE, Mönchengladbach 1.9
+25.1
+Ostwestfalen Netz GmbH & Co. KG, DE, Bad Driburg
+50.1
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+50.0
+Oskarshamn Energi AB, SE, Oskarshamn4
+100.0
+Netzgesellschaft W-1 GmbH, DE, Helmstedt²
+100.0
+100.0
+Netzgesellschaft S-1 GmbH, DE, Helmstedt²
+100.0
+OIE Aktiengesellschaft, DE, Idar-Oberstein¹
+49.0
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+74.9
+Lößnitz Netz GmbH & Co. KG, DE, Lößnitz
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg6
+LSW Holding GmbH & Co. KG, DE, Wolfsburg 5, 10
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+Luna Lüneburg GmbH, DE, Lüneburg6
+MAINGAU Energie GmbH, DE, Obertshausen
+100.0
+Local Energies, a.s., CZ, Zlín - Malenovice²
+49.0
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad
+Münder6
+100.0
+Livisi GmbH, DE, Essen¹
+57.0
+34.8
+50.0
+Limfjordens Bioenergi ApS, DK, Frederiksberg6
+100.0
+Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin²
+50.0
+Lillo Energy NV, BE, Brussels
+100.0
+Nederland Verkoopt B.V., NL, Amersfoort¹
+34.3
+Liikennevirta Oy, FI, Helsinki
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven6
+100.0
+Netzgesellschaft Bedburg Verwaltungs-GmbH, DE, Bedburg
+57.0
+39.0
+medl GmbH, DE, Mülheim an der Ruhr5
+49.0
+Netzgesellschaft Grimma GmbH & Co. KG, DE, Grimma
+24.9
+MDE Service GmbH, DE, Gersthofen
+45.7
+Netzgesellschaft GmbH & Co. KG Bad Homburg v. d. Höhe, DE,
+Bad Homburg v. d. Höhe
+100.0
+Matrix Control Solutions Limited, GB, Coventry¹
+49.0
+46.6
+Netzgesellschaft Gehrden mbH, DE, Gehrden
+49.0
+49.0
+Netzgesellschaft Elsdorf Verwaltungs-GmbH, DE, Elsdorf6
+57.0
+49.9
+Netzgesellschaft Bühlertal GmbH & Co. KG, DE, Bühlertal6
+57.0
+49.0
+Netzgesellschaft Betzdorf GmbH & Co. KG, DE, Betzdorf6
+49.0
+Nederland Isoleert B.V., NL, Amersfoort¹
+100.0
+Lighting for Staffordshire Limited, GB, Coventry¹
+LEW Service & Consulting GmbH, DE, Augsburg¹
+100.0
+LEW Netzservice GmbH, DE, Augsburg¹
+49.0
+Murrhardt Netz AG & Co. KG, DE, Murrhardt
+100.0
+LEW Beteiligungsgesellschaft mbH, DE, Gundremmingen¹
+100.0
+Mosoni-Duna Menti Szélerőmű Kft., HU, Budapest²
+100.0
+100.0
+Haftung, DE, Gundremmingen¹
+Moslavina Plin d.o.o., HR, Kutina²
+LEW Anlagenverwaltung Gesellschaft mit beschränkter
+100.0
+MONTCOGIM-SISAK d.o.o., HR, Sisak²
+100.0
+Lemonbeat GmbH, DE, Dortmund²
+100.0
+25.1
+MNG Stromnetze Verwaltungs GmbH, DE, Lüdinghausen
+Montcogim - Plinara d.o.o., HR, Sveta Nedelja¹
+100.0
+100.0
+MWE Mecklenburgische Wärme- und Energiedienstleistungen
+GmbH, DE, Wismar6
+50.0
+LEW TelNet GmbH, DE, Neusäß¹
+20.1
+Nebelhornbahn-Aktiengesellschaft, DE, Oberstdorf6
+60.0
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+25.0
+Naturstrom Betriebsgesellschaft Oberhonnefeld mbH, DE, Koblenz
+89.8
+Lichtverbund Straßenbeleuchtung GmbH, DE, Helmstedt²
+90.0
+Nahwärme Ascha GmbH, DE, Ascha²
+100.0
+Licht Groen B.V., NL, Amsterdam¹
+100.0
+Nadácia VSE Holding, SK, Košice²
+100.0
+LEW Wasserkraft GmbH, DE, Augsburg¹
+100.0
+MZEC SP. z o.o., PL, Szczecin²
+100.0
+LEW Verteilnetz GmbH, DE, Augsburg¹
+100.0
+MZEC - OPAŁ Sp. z o.o., PL, Chojnice²
+100.0
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+100.0
+49.0
+25.1
+Netzgesellschaft Osnabrücker Land GmbH & Co. KG, DE, Bohmte4
+100.0
+Npower Northern Limited, GB, Swindon¹
+25.1
+Netzgesellschaft Marl mbH & Co. KG, DE, Marl6
+100.0
+Npower Limited, GB, Swindon¹
+49.0
+Netzgesellschaft Maifeld Verwaltungs GmbH, DE, Polch
+100.0
+50.0
+Npower Group Limited, GB, Swindon¹
+Netzgesellschaft Maifeld GmbH & Co. KG, DE, Polch
+100.0
+Npower Gas Limited, GB, Swindon¹
+49.9
+Netzgesellschaft Leutenbach Verwaltungs-GmbH, DE, Leutenbach
+100.0
+Npower Financial Services Limited, GB, Swindon¹
+49.9
+Netzgesellschaft Leutenbach GmbH & Co. KG, DE, Leutenbach6
+100.0
+49.0
+100.0
+Netzgesellschaft Ottersweier GmbH & Co. KG, DE, Ottersweier
+100.0
+49.0
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg6
+49.0
+49.0
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+Oer-Erkenschwick Netz GmbH & Co. KG, DE, Oer-Erkenschwick
+25.1
+Netzgesellschaft Rietberg-Langenberg GmbH & Co. KG, DE,
+Rietberg6
+50.2
+33.9
+100.0
+Npower Northern Supply Limited, GB, Swindon²
+NRF Neue Regionale Fortbildung GmbH, DE, Halle (Saale)²
+Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee6
+ocean5 Business Software GmbH, DE, Kiel
+Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
+Rheda-Wiedenbrück6
+49.0
+100.0
+Npower Yorkshire Supply Limited, GB, Swindon¹
+Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE,
+Rheda-Wiedenbrück6
+100.0
+Netzgesellschaft Panketal GmbH, DE, Panketal²
+100.0
+Npower Yorkshire Limited, GB, Swindon¹
+49.9
+49.0
+Npower Business and Social Housing Limited, GB, Swindon¹
+Npower Commercial Gas Limited, GB, Swindon¹
+25.1
+Netzgesellschaft Lennestadt GmbH & Co. KG, DE, Lennestadt
+100.0
+NEW Windpark Viersen GmbH & Co. KG, DE, Mönchengladbach²
+NFPA Holdings Limited, GB, Newcastle upon Tyne
+NiersEnergieNetze GmbH & Co. KG, DE, Kevelaer
+Netzgesellschaft Horn-Bad Meinberg GmbH & Co. KG, DE,
+49.0
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
+Hohen Neuendorf6
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+228
+25.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE,
+Giesen6
+100.0
+49.0
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE, Giesen
+50.0
+Melle Netze GmbH & Co. KG, DE, Melle6
+MEON Pensions GmbH & Co. KG, DE, Essen¹,8
+50.0
+Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf6
+Notes
+51.0
+Horn-Bad Meinberg6
+49.0
+49.9
+Netzgesellschaft Lauf GmbH & Co. KG, DE, Lauf6
+100.0
+50.0
+Novenerg limited liability company for energy activities, HR, Zagreb
+Novo Innovations Limited, GB, Coventry²
+49.0
+Netzgesellschaft Kreisstadt Bergheim Verwaltungs-GmbH, DE,
+Bergheim
+100.0
+NordNetz GmbH, DE, Quickborn²
+49.9
+Netzgesellschaft Korb Verwaltungs-GmbH, DE, Korb
+100.0
+NORD-direkt GmbH, DE, Neumünster²
+49.9
+Netzgesellschaft Korb GmbH & Co. KG, DE, Korb6
+100.0
+NIS Norddeutsche Informations-Systeme Gesellschaft mbH,
+DE, Schwentinental²
+49.0
+Netzgesellschaft Kelkheim GmbH & Co. KG, DE, Kelkheim6
+49.0
+Netzgesellschaft Hüllhorst GmbH & Co. KG, DE, Hüllhorst
+51.0
+NiersEnergie Netze Verwaltungs-GmbH, DE, Kevelaer
+Mehr Ampere GmbH, DE, Lappersdorf6
+KlickEnergie GmbH & Co. KG, DE, Neuss
+100.0
+100.0
+whp Tiefbaugesellschaft mbH & Co. KG, DE, Mönchengladbach²
+100.0
+WPK Windpark Kraasa GmbH & Co. KG, DE, Lützen²
+100.0
+WTTP B.V., NL, Arnhem¹
+100.0
+Willems Koeltechniek B.V., NL, Beek¹
+WUN Pellets GmbH, DE, Wunsiedel6
+25.1
+Windenergie Briesensee GmbH, DE, Neu Zauche6
+31.5
+75.0
+Windenergie Frehne GmbH & Co. KG, DE, Lützen6
+25.1
+41.0
+Windenergie Leinetal 2 Verwaltungs GmbH, DE, Freden (Leine)²
+Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine)6
+100.0
+WVL Wasserversorgung Losheim GmbH, DE, Losheim am See
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach6
+49.9
+22.2
+26.2
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine)6
+24.9
+WWW Wasser- und Energieversorgung Kreis St. Wendel
+Gesellschaft mit beschränkter Haftung, DE, St. Wendel
+WVG - Warsteiner Verbundgesellschaft mbH, DE, Warstein
+WGK Windenergie Großkorbetha GmbH & Co. KG, DE, Lützen²
+Stadtwerke Dülmen Dienstleistungs- und Beteiligungs-GmbH
+& Co. KG, DE, Dülmen
+WPF Windpark Frankenheim GmbH & Co. KG (since 2021 SPG
+Solarpark Guben GmbH & Co. KG), DE, Lützen²
+Windpark Paffendorf GmbH & Co. KG, DE, Bergheim
+49.0
+Westnetz Asset Komplementär GmbH, DE, Essen²
+100.0
+Windpark Perl GmbH, DE, Perl6
+42.0
+Westnetz GmbH, DE, Dortmund¹
+Westnetz Immobilien GmbH & Co. KG, DE, Essen¹
+100.0
+100.0
+Windpark Verwaltungsgesellschaft mbH, DE, Lützen²
+100.0
+Windpark Wadern-Felsenberg GmbH, DE, Wadern²
+100.0
+Westnetz Kommunikationsleitungen GmbH & Co. KG, DE, Essen¹
+100.0
+WET Windenergie Trampe GmbH & Co. KG, DE, Lützen²
+100.0
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+50.2
+WKH Windkraft Hochheim Management GmbH, DE, Lützen²
+WLN Wasserlabor Niederrhein GmbH, DE, Mönchengladbach6
+WPB Windpark Börnicke GmbH & Co. KG, DE, Lützen²
+100.0
+45.0
+100.0
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+50.2
+28.1
+100.0
+Windenergie Merzig GmbH, DE, Merzig6
+WWS Wasserwerk Saarwellingen GmbH, DE, Saarwellingen6
+25.1
+Zwickauer Energieversorgung GmbH, DE, Zwickau5
+27.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality). . 'Investments pursuant to Section 313 (2) No. 5 HGB. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+Name, location
+Windkraft Jerichow-Mangelsdorf | GmbH & Co. KG, DE, Burg6
+Consolidated investment funds
+HANSEFONDS, DE, Düsseldorf¹
+MI-FONDS 178, DE, Frankfurt am Main¹
+MI-FONDS F55, DE, Frankfurt am Main¹
+MI-FONDS G55, DE, Frankfurt am Main¹
+MI-FONDS J55, DE, Frankfurt am Main¹
+MI-FONDS K55, DE, Frankfurt am Main¹
+OB 2, DE, Düsseldorf¹
+OB 5, DE, Düsseldorf¹
+Name, location
+235
+Stake (%)
+100.0
+100.0
+ASF, DE, Düsseldorf¹
+100.0
+ZonnigBeheer B.V., NL, Lelystad¹
+90.0
+49.0
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg (Altmark)6
+49.0
+WWW Wasserwerk Wadern GmbH, DE, Wadern
+49.0
+Windenergie Osterburg Verwaltungs GmbH, DE, Osterburg
+(Altmark)6
+xtechholding GmbH, DE, Berlin6
+28.4
+49.0
+Zagrebacke otpadne vode d.o.o., HR, Zagreb4
+48.5
+Windenergie Schermbeck-Rüste GmbH & Co.KG, DE, Schermbeck
+20.3
+Windenergiepark Heidenrod GmbH, DE, Heidenrod
+Zagrebacke otpadne vode-upravljanje i pogon d.o.o., HR, Zagreb
+29.0
+45.0
+WINDENERGIEPARK WESTKÜSTE GmbH, DE,
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava4
+49.0
+Kaiser-Wilhelm-Koog²
+80.0
+Zenit-SIS GmbH i.L., DE, Düsseldorf²
+100.0
+Windkraft Hochheim GmbH & Co. KG, DE, Lützen²
+20.0
+100.0
+Westerwald-Netz GmbH, DE, Betzdorf-Alsdorf¹
+Windpark Oberthal GmbH, DE, Oberthal6
+Wasserversorgung Main-Taunus GmbH, DE, Frankfurt am Main
+49.0
+Verwaltungsgesellschaft GKW Dillingen mbH, DE, Dillingen6
+25.2
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+49.0
+Verwaltungsgesellschaft Scharbeutzer Energie- und
+Netzgesellschaft mbH, DE, Scharbeutz²
+51.0
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr
+GmbH, DE, Grafenwöhr6
+29.0
+51.0
+"Veszprém-Kogeneráció" Energiatermelő Zrt., HU, Budapest²
+Wasserzweckverband der Gemeinde Nalbach, DE, Nalbach6
+49.0
+Visioncash, GB, Coventry¹
+100.0
+WB Wärme Berlin GmbH, DE, Schönefeld6
+51.0
+Visualix GmbH, DE, Berlin
+25.0
+VKB-GmbH, DE, Neunkirchen¹
+50.0
+WEA Schönerlinde GbR mbH Kiepsch & Bosse &
+Beteiligungsges. e.disnatur mbH, DE, Berlin²
+100.0
+38.5
+Haftung, DE, Moers6
+Verwaltungsgesellschaft Energieversorgung Timmendorfer
+Strand mbH, DE, Timmendorfer Strand²
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE, Goslar
+49.0
+Versorgungskasse Energie (VVaG) i. L., DE, Hanover6
+69.6
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim6
+50.0
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein6
+20.0
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+60.0
+Verteilnetz Plauen GmbH, DE, Plauen¹
+100.0
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
+Verteilnetze Energie Weißenhorn GmbH & Co.KG, DE, Weißenhorn
+35.0
+Müden/Aller6
+50.0
+Verwaltungsgesellschaft Dorsten Netz mbH, DE, Dorsten6
+49.0
+Verwaltungsgesellschaft Energie Weißenhorn GmbH, DE,
+Wasser-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG,
+DE, Kerpen
+25.1
+Weißenhorn6
+35.0
+Wasserverbund Niederrhein Gesellschaft mit beschränkter
+70.0
+35.0
+Volta Limburg B.V., NL, Schinnen¹
+WeAre GmbH, DE, Berlin6
+50.0
+Windpark Eschweiler Beteiligungs GmbH, DE, Stolberg/Rhld.6
+Windpark Losheim-Britten GmbH, DE, Losheim am See6
+Windpark Lützen GmbH & Co. KG, DE, Lützen²
+55.1
+50.0
+100.0
+Werne Netz GmbH & Co. KG, DE, Werne
+49.0
+Westenergie AG, DE, Essen¹
+100.0
+Westenergie Aqua GmbH, DE, Mülheim an der Ruhr¹,8
+100.0
+werkkraft GmbH, DE, Munich6
+Windpark Lützen Infrastruktur GmbH & Co. KG (since 2021
+SEW Solarenergie Weißenfels GmbH & Co. KG), DE, Lützen²
+WINDPARK Mutzschen OHG, DE, Potsdam²
+77.8
+Westenergie Breitband GmbH, DE, Essen 1,8
+100.0
+Windpark Naundorf OHG, DE, Potsdam²
+66.7
+Westenergie Metering GmbH, DE, Mülheim an der Ruhr¹
+100.0
+Windpark Nohfelden-Eisen GmbH, DE, Nohfelden6
+50.0
+Westenergie Rheinhessen Beteiligungs GmbH, DE, Essen 1,8
+100.0
+100.0
+100.0
+Wendelsteinbahn Verteilnetz GmbH, DE, Brannenburg am Inn²
+100.0
+20.0
+Volta Participaties 1 BV, NL, Schinnen¹
+100.0
+weeenergie GmbH, DE, Dresden
+40.0
+Volta Service B.V., NL, Schinnen¹
+100.0
+Weissmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
+Bad Berneck²
+93.5
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+234
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+WEK Windenergie Kolkwitz GmbH & Co. KG, DE, Kolkwitz²
+Welver Netz GmbH & Co. KG, DE, Welver
+100.0
+49.0
+Wendelsteinbahn Gesellschaft mit beschränkter Haftung, DE,
+Brannenburg am Inn²
+Windmüllerei LMP GmbH & Co. KG, DE, Jürgenshagen²
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+Windpark Büschdorf GmbH, DE, Perl²
+100.0
+83.3
+51.0
+100.0
+100.0
+100.0
+100.0
+SEG Solarenergie Guben GmbH & Co. KG, DE, Guben6
+100.0
+SEC Serwis Sp. z o.o., PL, Szczecin²
+36.0
+49.0
+Stadtwerke - Strom Plauen GmbH & Co. KG, DE, Plauen6
+Stadtwerke Ahaus GmbH, DE, Ahaus
+100.0
+25.1
+49.0
+49.0
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen
+Stadtwerk Verl Netz GmbH & Co. KG, DE, Verl6
+25.1
+100.0
+SEC R Sp. z o.o., PL, Szczecin²
+100.0
+SEC P Sp. z o.o., PL, Szczecin²
+100.0
+SEC Obrót Sp. z o.o., PL, Szczecin²
+24.9
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
+Neustadt a. Rbge.6
+100.0
+SEC O Sp. z o.o., PL, Szczecin²
+100.0
+SEC NewGrid Sp. z o.o., PL, Szczecin²
+SEC Region Sp. z o.o., PL, Szczecin²
+Stadtwerke Aschersleben GmbH, DE, Aschersleben
+35.0
+Stadtwerke Aue - Bad Schlema GmbH, DE, Aue-Bad Schlema
+50.0
+40.0
+Stadtwerke Bitterfeld-Wolfen GmbH, DE, Bitterfeld-Wolfen
+SHW/RWE Umwelt Aqua Vodogradnja d.o.o., HR, Zagreb
+45.0
+Stadtwerke Bernburg GmbH, DE, Bernburg (Saale)5
+40.0
+Shamrock Energie GmbH, DE, Herne
+49.0
+24.9
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth5
+Stadtwerke Bergen GmbH, DE, Bergen
+100.0
+SERVICE plus Recycling GmbH, DE, Neumünster²
+100.0
+SERVICE plus GmbH, DE, Neumünster²
+49.0
+Stadtwerke Barth GmbH, DE, Barth
+100.0
+SEN Solarenergie Nienburg GmbH & Co. KG, DE, Lützen²
+25.1
+36.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt
+100.0
+SEG Solarenergie Guben Management GmbH, DE, Lützen²
+Selm Netz GmbH & Co. KG, DE, Selm
+24.5
+24.9
+Siegener Versorgungsbetriebe GmbH, DE, Siegen
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
+Neustadt a. Rbge.6
+SEC N Sp. z o.o., PL, Szczecin²
+100.0
+100.0
+Stake (%)
+Name, location
+Stake (%)
+SEC G Sp. z o.o., PL, Szczecin²
+SEC F Sp. z o.o., PL, Szczecin²
+SEC Energia Sp. z o.o., PL, Szczecin²
+SEC E Sp. z o.o., PL, Szczecin²
+Name, location
+(as of December 31, 2020)
+SSW - Stadtwerke St. Wendel GmbH & Co KG., DE, St. Wendel5
+SSW Stadtwerke St. Wendel Geschäftsführungsgesellschaft mbH,
+DE, St. Wendel6
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Notes
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . ⁹Control by virtue of company contract. . 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+100.0
+SEC Choszczno Sp. z o.o., PL, Choszczno²
+SEC D Sp. z o.o., PL, Szczecin²
+50.0
+RegioNetz München GmbH & Co. KG, DE, Garching6
+49.2
+Regionetz GmbH, DE, Aachen 1,9
+100.0
+SEC Chojnice Sp. z o.o, PL, Szczecin²
+230
+49.5
+49.5
+100.0
+100.0
+SEC M Sp. z o.o., PL, Szczecin²
+24.9
+SmartSim GmbH, DE, Essen6
+100.0
+SEC L Sp. z o.o., PL, Szczecin²
+26.7
+Magdeburg6
+100.0
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
+SEC K Sp. z o.o., PL, Szczecin²
+100.0
+SEC J Sp. z o.o., PL, Szczecin²
+26.7
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg5
+100.0
+SECI Sp. z o.o., PL, Szczecin²
+36.8
+29.0
+Städtische Betriebswerke Luckenwalde GmbH, DE, Luckenwalde
+Städtische Werke Borna GmbH, DE, Borna
+100.0
+SEC H Sp. z o.o., PL, Szczecin²
+100.0
+48.0
+Stadtentwässerung Schwerte GmbH, DE, Schwerte
+100.0
+24.9
+Stadtwerke Blankenburg GmbH, DE, Blankenburg6
+30.0
+17.8
+85.8
+5.0
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg
+10.0
+30.1
+Stadtwerke Detmold GmbH, DE, Detmold'
+12.5
+31.5
+Stadtwerke Hof Energie+Wasser GmbH, DE, Hof7
+19.9
+PSI Software AG, DE, Berlin
+22.1
+7.4
+25.3
+5.8
+Stadtwerke Neuss Energie und Wasser GmbH, DE, Neuss'
+17.5
+88.3
+2.2
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing?
+19.9
+15.8
+Stadtwerke Wertheim GmbH, DE, Wertheim'
+Stadtwerke Meerbusch GmbH, DE, Meerbusch
+424.4
+3,001.6
+15.5
+100.0
+100.0
+100.0
+Equity
+Earnings
+Stake (%) € in millions
+€ in millions
+Investments Pursuant to Section 313 (2) No. 5 HGB
+BEW Bergische Energie- und Wasser-Gesellschaft mit beschränkter Haftung, DE, Wipperfürth?
+Energieversorgung Limburg Gesellschaft mit beschränkter Haftung, DE, Limburg an der Lahn'
+e-werk Sachsenwald GmbH, DE, Reinbek?
+19.5
+34.0
+5.3
+10.0
+28.5
+3.8
+16.0
+30.1
+4.3
+Herzo Werke GmbH, DE, Herzogenaurach?
+19.9
+20.3
+infra fürth gmbh, DE, Fürth'
+19.9
+77.1
+Nord Stream AG, CH, Zug 7, 14
+10.0
+20.5
+Stadtwerke Willich Gesellschaft mit beschränkter Haftung, DE, Willich?
+SWT Stadtwerke Trier Versorgungs-GmbH, DE, Trier?
+7.4
+Jm
+Teyssen
+peiler
+Spieker
+8262
+Birnbaum
+Wildberger
+100.0
+Smart Energy Plattling GmbH, DE, Munich²
+20.0
+Stadtwerke Duisburg Aktiengesellschaft, DE, Duisburg 5
+21.0
+ŠKO-ENERGO, s.r.o., CZ, Mladá Boleslav
+49.0
+Stadtwerke Dillingen/Saar GmbH, DE, Dillingen6
+42.5
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav5
+49.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf
+50.0
+Skive GreenLab Biogas ApS, DK, Frederiksberg6
+41.0
+Stadtwerke Bogen GmbH, DE, Bogen
+100.0
+Skandinaviska Kraft AB, SE, Halmstad²
+König
+49.0
+Kanis
+Essen, March 15, 2021
+14.3
+18.7
+55.7
+5.9
+10.5
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract. 11Significant influence via indirect investments.. 12 Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+Other
+Information
+238 Declaration of the Management Board
+239
+Independent Auditor's Report
+246 Independent Practitioner's Report on Non-financial Reporting
+248
+Boards
+248
+250
+Supervisory Board (and Information on Other Directorships)
+Management Board (and Information on Other Directorships)
+251
+Summary of Financial Highlights
+253
+Financial Calendar
+Declaration of the Management Board
+238
+Declaration of the Management Board
+To the best of our knowledge, we declare that, in accordance
+with applicable financial reporting principles, the Consolidated
+Financial Statements give a true and fair view of the assets,
+liabilities, financial position and profit or loss of the Group, and
+that the Group Management Report, which is combined with
+the management report of E.ON SE, provides a fair review of
+the development and performance of the business and the
+position of the E.ON Group, together with a description of the
+principal opportunities and risks associated with the expected
+development of the Group.
+The Management Board
+35.5
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland
+100.0
+49.0
+Stadtwerke Ratingen GmbH, DE, Ratingen5
+24.8
+Stadtwerke Reichenbach/Vogtland GmbH, DE,
+Reichenbach im Vogtland
+24.5
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten6
+39.0
+Stromnetz Günzburg Verwaltungs GmbH, DE, Günzburg6
+Stromnetz Hallbergmoos GmbH & Co. KG, DE, Hallbergmoos6
+Stromnetz Hallbergmoos Verwaltungs GmbH, DE, Hallbergmoos6
+Stromnetz Hofheim GmbH & Co. KG, DE, Hofheim am Taunus
+49.0
+49.0
+49.0
+49.0
+Stadtwerke Roßlau Fernwärme GmbH, DE, Dessau-Roßlau6
+49.0
+Stadtwerke Saarlouis GmbH, DE, Saarlouis5
+49.0
+Stromnetz Hofheim Verwaltungs GmbH, DE, Hofheim am Taunus
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach6
+49.0
+49.0
+Stadtwerke Schwarzenberg GmbH, DE, Schwarzenberg/Erzgeb.6
+27.5
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+37.8
+49.0
+Stromnetz Gersthofen GmbH & Co. KG, DE, Gersthofen
+Stromnetz Günzburg GmbH & Co. KG, DE, Günzburg6
+49.0
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk
+24.9
+Stibbe Kälte-Klima-Technik GmbH & Co. KG, DE, Garbsen²
+100.0
+Stadtwerke Nordfriesland GmbH, DE, Niebüll6
+49.9
+Strom Germering GmbH, DE, Germering²
+90.0
+Stadtwerke Oberkirch GmbH, DE, Oberkirch6
+33.3
+Stromnetz Diez GmbH und Co.KG, DE, Diez
+25.1
+Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching6
+49.0
+Stromnetz Diez Verwaltungsgesellschaft mbH, DE, Diez6
+25.1
+Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE, Olching
+49.0
+Stromnetz Euskirchen GmbH & Co. KG, DE, Euskirchen6
+25.1
+Stadtwerke Parchim GmbH, DE, Parchim6
+25.2
+Stromnetz Friedberg GmbH & Co. KG, DE, Friedberg
+49.0
+Stadtwerke Premnitz GmbH, DE, Premnitz6
+35.0
+Stadtwerke Siegburg GmbH & Co. KG, DE, Siegburg6
+Neunburg vorm Wald
+49.0
+49.0
+Stadtwerke Waltrop Netz GmbH & Co. KG, DE, Waltrop6
+25.1
+Stadtwerke Weilburg GmbH, DE, Weilburg6
+20.0
+STROMNETZ VG DIEZ Verwaltungsgesellschaft mbH, DE,
+Altendiez6
+49.0
+Stadtwerke Weißenfels Gesellschaft mit beschränkter Haftung,
+DE, Weißenfels6
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf.6
+49.0
+24.5
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. "Investments pursuant to Section 313 (2) No. 5 HGB.. This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. . 9Control by virtue of company contract. 10 No control by virtue of company
+contract. ¹¹Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+Notes
+Name, location
+232
+Stake (%)
+Name, location
+Stake (%)
+Stromnetz Weilheim GmbH & Co. KG, DE, Regensburg²
+Stromnetz Weilheim Verwaltungs GmbH, DE, Regensburg²
+Stromnetz Würmtal GmbH & Co. KG, DE, Planegg²
+100.0
+SüdWasser GmbH, DE, Erlangen²
+100.0
+100.0
+74.5
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+Stromnetz VG Diez GmbH und Co. KG, DE, Altendiez
+49.0
+Stadtwerke Wadern GmbH, DE, Wadern6
+49.9
+25.1
+Stadtwerke Steinfurt, Gesellschaft mit beschränkter Haftung,
+DE, Steinfurt6
+33.0
+Stromnetz Pullach GmbH, DE, Pullach im Isartal6
+49.0
+Stadtwerke Tornesch GmbH, DE, Tornesch
+49.0
+Stromnetz Traunreut GmbH & Co. KG, DE, Traunreut
+49.0
+Stadtwerke Unna GmbH, DE, Unna6
+24.0
+Stromnetz Traunreut Verwaltungs GmbH, DE, Traunreut
+49.0
+Stadtwerke Velbert GmbH, DE, Velbert5
+30.4
+Stromnetz Verbandsgemeinde Katzenelnbogen GmbH & Co.
+KG, DE, Katzenelnbogen
+49.0
+Stadtwerke Vilshofen GmbH, DE, Vilshofen6
+41.0
+Stadtwerke Vlotho GmbH, DE, Vlotho6
+24.9
+Stromnetz Verbandsgemeinde Katzenelnbogen Verwaltungs-
+gesellschaft mbH, DE, Katzenelnbogen
+49.0
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach6
+Stromnetz Neckargemünd GmbH, DE, Neckargemünd
+Stromnetz Pulheim GmbH & Co. KG, DE, Pulheim6
+Südwestfalen Netz-Verwaltungsgesellschaft mbH, DE, Netphen
+Südwestsächsische Netz GmbH, DE, Crimmitschau²
+20.8
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Sønderjysk Biogas Bevtoft A/S, DK, Vojens
+50.0
+Stadtwerke Garbsen GmbH, DE, Garbsen
+24.9
+Sønderjysk Biogas Løgumkloster ApS, DK, Bevtoft
+50.0
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+24.9
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+SPX, s.r.o., SK, Zilina6
+35.0
+Stadtwerke Geldern GmbH, DE, Geldern6
+39.0
+49.0
+Stadtwerke Gescher GmbH, DE, Gescher
+25.1
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+231
+Name, location
+Stake (%)
+33.0
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder) 5
+100.0
+Solnet d.o.o., HR, Zagreb¹
+24.0
+Stadtwerke Dülmen Verwaltungs-GmbH, DE, Dülmen
+50.0
+Söderåsens Bioenergi AB, SE, Malmö²
+63.3
+Stadtwerke Düren GmbH, DE, Düren1,9
+49.9
+Solar Energy Group S.p.A., IT, Pordenone¹
+100.0
+Solar Noord B.V., NL, Stadskanaal¹
+100.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+Ebermannstadt6
+25.0
+Solar Service S.r.l., IT, Pordenone²
+100.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+49.0
+Solar Supply Sweden AB, SE, Karlshamn²
+100.0
+Stadtwerke Emmerich GmbH, DE, Emmerich am Rhein6
+24.9
+SolarProjekt Mainaschaff GmbH, DE, Mainaschaff6
+50.0
+Stadtwerke Essen Aktiengesellschaft, DE, Essen5
+29.0
+Name, location
+STEAG Windpark Ullersdorf GmbH & Co. KG, DE, Jamlitz6
+Stake (%)
+24.5
+20.0
+Stadtwerke Zeitz Gesellschaft mit beschränkter Haftung, DE, Zeitz
+STAWAG Abwasser GmbH, DE, Aachen²
+24.8
+100.0
+Stadtwerke Lingen GmbH, DE, Lingen (Ems)4
+40.0
+STAWAG Infrastruktur Monschau GmbH & Co. KG, DE, Monschau²
+100.0
+Stadtwerke Lübz GmbH, DE, Lübz6
+25.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+49.0
+29.0
+100.0
+Stadtwerke Meerane GmbH, DE, Meerane
+24.5
+Stadtwerke Merseburg GmbH, DE, Merseburg5
+40.0
+STAWAG Infrastruktur Simmerath GmbH & Co. KG, DE,
+Simmerath²
+100.0
+Stadtwerke Merzig Gesellschaft mit beschränkter Haftung, DE,
+Merzig5
+49.9
+STAWAG Infrastruktur Simmerath Verwaltungs GmbH, DE,
+Simmerath2
+100.0
+STAWAG Infrastruktur Monschau Verwaltungs GmbH, DE,
+Monschau²
+Stadtwerke Langenfeld GmbH, DE, Langenfeld
+Stadtwerke Kirn GmbH, DE, Kirn/Nahe6
+100.0
+Stadtwerke Werl GmbH, DE, Werl6
+25.1
+Stadtwerke Goch Netze GmbH & Co. KG, DE, Goch
+25.1
+Stadtwerke Wesel Strom-Netzgesellschaft mbH & Co. KG, DE,
+Wesel6
+25.0
+Stadtwerke Goch Netze Verwaltungsgesellschaft mbH, DE, Goch
+25.1
+Stadtwerke Wismar GmbH, DE, Wismar
+49.0
+Stadtwerke Haan GmbH, DE, Haan6
+25.1
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+22.7
+Stadtwerke Husum GmbH, DE, Husum6
+49.9
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel6
+26.0
+Stadtwerke Kamp-Lintfort GmbH, DE, Kamp-Lintfort5
+49.0
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+49.4
+Stadtwerke Kerpen GmbH & Co. KG, DE, Kerpen
+25.1
+Stadtwerke Wülfrath Netz GmbH & Co. KG, DE, Wülfrath²
+Stadtwerke GmbH Bad Kreuznach, DE, Bad Kreuznach5
+49.0
+100.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Planegg²
+TWS Technische Werke der Gemeinde Saarwellingen GmbH,
+DE, Saarwellingen
+VOLTARIS GmbH, DE, Maxdorf6
+50.0
+51.0
+VSE - Windpark Merchingen GmbH & Co. KG, DE, Saarbrücken²
+100.0
+Überlandwerk Krumbach Gesellschaft mit beschränkter
+Haftung, DE, Krumbach¹
+74.6
+VSE - Windpark Merchingen Verwaltungs GmbH, DE, Saarbrücken²
+100.0
+60.0
+Überlandwerk Leinetal GmbH, DE, Gronau
+VSE Agentur GmbH, DE, Saarbrücken²
+100.0
+Überlandwerk Mittelbaden GmbH & Co. KG, DE, Lahr
+37.8
+VSE Aktiengesellschaft, DE, Saarbrücken¹
+51.4
+Überlandwerk Mittelbaden Verwaltungs-GmbH, DE, Lahr
+37.8
+VSE Call centrum s.r.o., SK, Košice²
+100.0
+Ultra-Fast Charging Venture Scandinavia ApS, DK, Copenhagen
+48.0
+Volta Solar VOF, NL, Heerlen¹
+35.0
+100.0
+TWE Technische Werke der Gemeinde Ensdorf GmbH, DE,
+Ensdorf6
+49.0
+strotög GmbH Strom aus Töging, DE, Töging am Inn6
+50.0
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG,
+DE, Brandenburg an der Havel
+TWL Technische Werke der Gemeinde Losheim GmbH, DE,
+Losheim am See6
+49.9
+36.8
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel6
+36.8
+TWM Technische Werke der Gemeinde Merchweiler
+Gesellschaft mit beschränkter Haftung, DE, Merchweiler
+49.0
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3 Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11.
+5Associated company (valued using the equity method). 6Associated company (valued at cost for reasons of immateriality).. 'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company
+exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract.. 10 No control by virtue of company
+contract.. 11Significant influence via indirect investments.. 12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
+Pensions GmbH & Co. KG. 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+(as of December 31, 2020)
+233
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+TWRS Technische Werke der Gemeinde Rehlingen-Siersburg
+GmbH, DE, Rehlingen-Siersburg6
+Volta Solar B.V., NL, Heerlen¹
+50.0
+51.0
+VSE Ekoenergia, s.r.o., SK, Košice²
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen6
+Wärmeenergie Verwaltungs GmbH, DE, Essen²
+100.0
+Vandebron Energie B.V., NL, Amsterdam¹
+100.0
+Wärmeversorgung Limburg GmbH, DE, Limburg an der Lahn6
+50.0
+Vandebron Services B.V., NL, Amsterdam¹
+100.0
+VEBA Electronics LLC, US, Wilmington¹
+100.0
+VEBACOM Holdings LLC, US, Wilmington²
+100.0
+100.0
+49.9
+VEM Neue Energie Muldental GmbH & Co. KG, DE, Markkleeberg6
+50.0
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
+Waldbüttelbrunn6
+49.0
+Wärmeversorgung Mücheln GmbH, DE, Mücheln
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+Wärmeversorgung Schwaben GmbH, DE, Augsburg²
+Wärmeversorgung Wachau GmbH, DE, Markkleeberg6
+Wärmeversorgung Würselen GmbH, DE, Stolberg/Rhld.2
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH,
+DE, Königs Wusterhausen²
+49.0
+40.0
+100.0
+49.0
+Veiligebuurt B.V., NL, Enschede
+Vandebron B.V., NL, Amsterdam¹
+49.0
+Východoslovenská energetika Holding a.s., SK, Košice¹,9
+26.8
+VSE NET GmbH, DE, Saarbrücken¹
+100.0
+Union Grid s.r.o., CZ, Prague6
+34.0
+VSE Verteilnetz GmbH, DE, Saarbrücken¹
+100.0
+UNTERE ILLER AKTIENGESELLSCHAFT, DE, Landshut6
+40.0
+VSE-Stiftung Gemeinnützige Gesellschaft zur Förderung von
+Bildung, Erziehung, Kunst und Kultur mbH, DE, Saarbrücken²
+100.0
+Untermain Energie Projekt AG & Co. KG., DE, Kelsterbach6
+49.0
+VWS Verbundwerke Südwestsachsen GmbH, DE, Lichtenstein/Sa.¹
+97.9
+Untermain Erneuerbare Energien GmbH, DE, Raunheim6
+25.0
+Východoslovenská distribucná, a.s., SK, Košice¹
+100.0
+URANIT GmbH, DE, Jülich4
+50.0
+Východoslovenská energetika a.s., SK, Košice¹
+100.0
+Utility Debt Services Limited, GB, Coventry²
+100.0
+100.0
+Stromverwaltung Schwalmtal GmbH, DE, Schwalmtal
+33.3
+Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling
+SWG Glasfaser Netz GmbH, DE, Geesthacht6
+33.4
+SWL-energis Netzgesellschaft mbH & Co. KG., DE, Saarbrücken²
+100.0
+25.1
+SWL-energis-Geschäftsführungs-GmbH, DE, Saarbrücken²
+100.0
+Strom-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG,
+DE, Bergheim
+25.1
+Stromnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann6
+Stromnetzgesellschaft Neuenhaus mbH & Co. KG, DE, Neuenhaus
+25.1
+25.1
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg6
+SWS Energie GmbH, DE, Stralsund 5
+49.0
+49.0
+SWT trilan GmbH, DE, Trier6
+26.0
+Stromnetzgesellschaft Neuenhaus Verwaltungs-GmbH, DE,
+SWTE Netz GmbH & Co. KG, DE, Ibbenbüren5
+33.0
+Neuenhaus6
+49.0
+Stromnetzgesellschaft Neunkirchen-Seelscheid mbH & Co. KG,
+DE, Neunkirchen-Seelscheid6
+SWTE Netz Verwaltungsgesellschaft mbH, DE, Ibbenbüren
+Syna GmbH, DE, Frankfurt am Main¹
+25.1
+30.0
+SVS-Versorgungsbetriebe GmbH, DE, Stadtlohn4
+25.1
+100.0
+Süwag Energie AG, DE, Frankfurt am Main¹
+77.6
+Stromnetze Peiner Land GmbH, DE, Ilsede6
+49.0
+Süwag Grüne Energien und Wasser AG & Co. KG, DE,
+Frankfurt am Main¹
+100.0
+Stromnetzgesellschaft Bad Salzdetfurth - Diekholzen mbH &
+Co. KG, DE, Bad Salzdetfurth6
+49.0
+Süwag Management GmbH, DE, Frankfurt am Main²
+100.0
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+49.0
+Strom-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg6
+Stromnetzgesellschaft Bramsche mbH & Co. KG, DE, Bramsche
+Stromnetzgesellschaft Datteln GmbH & Co. KG, DE, Datteln
+Strom-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+Stromnetzgesellschaft Gescher GmbH & Co. KG, DE, Gescher6
+Strom-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG,
+DE, Kerpen
+25.1
+Süwag Vertrieb AG & Co. KG, DE, Frankfurt am Main¹
+SVH Stromversorgung Haar GmbH, DE, Haar
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+100.0
+50.0
+25.1
+25.1
+SVO Holding GmbH, DE, Celle¹
+50.1
+49.0
+SVO Vertrieb GmbH, DE, Celle¹
+100.0
+33.0
+100.0
+49.0
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+Vertriebsgesellschaft mbH, DE, Nonnweiler
+22.8
+49.0
+TRANSELEKTRO, s.r.o., SK, Košice
+25.5
+Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH,
+DE, Pfaffenhofen
+TraveNetz GmbH, DE, Lübeck5
+25.1
+49.0
+Triangeln 10 i Norrköping Fastighets AB, SE, Malmö²
+100.0
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter
+Haftung, DE, Ruhpolding²
+Triangeln 11 AB, SE, Malmö²
+100.0
+100.0
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschleißheim6
+49.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Triangeln 15 i Norrköping Fastighets AB, SE, Malmö²
+Trinkwasserverbund Niederrhein TWN GmbH, DE, Grevenbroich6
+Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling6
+100.0
+33.3
+33.3
+Unterschleißheim6
+49.0
+TNA Talsperren- und Grundwasser-Aufbereitungs- und
+50.1
+49.0
+Thermondo GmbH, DE, Berlin
+66.5
+Stromnetzgesellschaft Schwalmtal mbH & Co. KG, DE,
+Schwalmtal6
+51.0
+Szombathelyi Erőmű Zrt., HU, Budapest²
+80.0
+Stromnetzgesellschaft Seelze GmbH & Co. KG, DE, Seelze
+49.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely
+25.0
+Stromnetzgesellschaft Siegen GmbH & Co.KG, DE, Siegen6
+25.1
+Tankey B.V., NL, 's-Hertogenbosch5
+42.5
+Strom-Netzgesellschaft Voerde mbH & Co. KG, DE, Voerde
+Stromnetzgesellschaft Windeck mbH & Co. KG, DE, Siegburg6
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf6
+Stromversorgung Angermünde GmbH, DE, Angermünde6
+Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg6
+Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
+Pfaffenhofen
+25.1
+Technische Werke Naumburg GmbH, DE, Naumburg (Saale)6
+47.0
+49.9
+Tegel Energie GbR, DE, Berlin6
+50.0
+49.0
+The Power Generation Company Limited, GB, Coventry2
+100.0
+49.0
+20.3
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG,
+DE, Regensburg6
+Städtisches Wasserwerk Eschweiler GmbH, DE, Eschweiler6
+SEC C Sp. z o.o., PL, Szczecin²
+Powerhouse B.V., NL, Almere¹
+100.0
+Rhein-Sieg Netz GmbH, DE, Siegburg¹
+100.0
+Powergen UK Investments, GB, Coventry²
+22.5
+Rhein-Main-Donau GmbH, DE, Landshut5
+100.0
+Powergen Serang Limited, GB, Coventry²
+100.0
+Rheinland Westfalen Energiepartner GmbH, DE, Essen²
+100.0
+Powergen Power No. 2 Limited, GB, Coventry²
+20.0
+RheinEnergie AG, DE, Cologne
+100.0
+Powerhouse Energy Solutions S.L., ES, Madrid²
+100.0
+prego services GmbH, DE, Saarbrücken
+R-KOM Regensburger Telekommunikationsverwaltungs-
+50.0
+Projecta 14 GmbH, DE, Saarbrücken5
+20.0
+R-KOM Regensburger Telekommunikationsgesellschaft mbH &
+Co. KG, DE, Regensburg
+100.0
+PreussenElektra GmbH, DE, Hanover¹
+100.0
+50.0
+33.3
+RIWA GmbH Gesellschaft für Geoinformationen, DE,
+Kempten (Allgäu)6
+PRENU Projektgesellschaft für Rationelle Energienutzung in
+50.0
+100.0
+66.7
+rhenag Rheinische Energie Aktiengesellschaft, DE, Cologne¹
+RHENAGBAU Gesellschaft mit beschränkter Haftung, DE, Cologne²
+Neuss mit beschränkter Haftung, DE, Neuss
+Powergen Power No. 1 Limited, GB, Coventry²
+25.1
+Rhein-Ahr-Energie Netz GmbH & Co. KG, DE, Grafschaft6
+RegioNetz München Verwaltungs GmbH, DE, Garching6
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+100.0
+Plus Shipping Services Limited, GB, Swindon¹
+100.0
+Plin-Projekt d.o.o., HR, Nova Gradiška²
+Stake (%)
+Name, location
+50.0
+Stake (%)
+229
+(as of December 31, 2020)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Strategy and Objectives
+Report of the Supervisory Board
+100.0
+Name, location
+Propan Rheingas GmbH, DE, Brühl
+33.3
+100.0
+24.9
+Rhegio Dienstleistungen GmbH, DE, Rhede6
+100.0
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+100.0
+Powergen Limited, GB, Coventry²
+35.5
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+REWAG REGENSBURGER ENERGIE- UND WASSERVER-
+SORGUNG AG & CO KG, DE, Regensburg
+Powergen International, GB, Coventry¹
+100.0
+rEVUlution GmbH, DE, Essen²
+100.0
+Powergen Holdings B.V., NL, Rotterdam¹
+30.0
+Renergie Stadt Wittlich GmbH, DE, Wittlich6
+100.0
+27.5
+50.0
+20.0
+100.0
+REGAS Verwaltungs-GmbH, DE, Regensburg6
+gesellschaft mbH, DE, Regensburg
+50.0
+Recklinghausen Netzgesellschaft mbH & Co. KG, DE,
+100.0
+Recargo Inc., US, El Segundo¹
+SEC B Sp. z o.o., PL, Szczecin²
+0.0
+RDE Verwaltungs-GmbH, DE, Veitshöchheim²
+100.0
+49.0
+Sandersdorf-Brehna6
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Veitshöchheim²
+Sandersdorf-Brehna Netz GmbH & Co. KG, DE,
+77.4
+100.0
+100.0
+50.0
+100.0
+Scharbeutzer Energie- und Netzgesellschaft mbH & Co. KG, DE,
+Scharbeutz²
+51.0
+Recklinghausen
+49.9
+SchlauTherm GmbH, DE, Saarbrücken²
+75.0
+Recklinghausen Netz-Verwaltungsgesellschaft mbH, DE,
+REGAS GmbH & Co KG, DE, Regensburg6
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+Recklinghausen
+49.0
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+100.0
+Refarmed ApS, DK, Copenhagen
+20.0
+SEC A Sp. z o.o., PL, Szczecin²
+75.5
+Safetec-Swiss GmbH, CH, Würenlingen²
+SARIO Grundstücks-Vermietungsgesellschaft mbH & Co.
+Objekt Würzburg KG, DE, Düsseldorf2, 12
+100.0
+50.0
+QKOH GmbH, DE, Sarstedt
+25.1
+Rüthen Gasnetz GmbH & Co. KG, DE, Rüthen6
+100.0
+QDTE GmbH, DE, Sarstedt²
+94.1
+30.1
+RURENERGIE GmbH, DE, Düren6
+RWW Rheinisch-Westfälische Wasserwerksgesellschaft mbH,
+DE, Mülheim an der Ruhr¹
+Purena GmbH, DE, Wolfenbüttel¹
+Purena Consult GmbH, DE, Wolfenbüttel²
+100.0
+RL Beteiligungsverwaltung beschr. haft. OHG, DE,
+Monheim am Rhein¹
+100.0
+PS Energy UK Limited, GB, Swindon¹
+100.0
+RL Besitzgesellschaft mbH, DE, Monheim am Rhein¹
+29.6
+Propan Rheingas GmbH & Co Kommanditgesellschaft, DE, Brühl
+100.0
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding²
+79.8
+100.0
+Rain Biomasse Wärmegesellschaft mbH, DE, Rain6
+64.9
+Qualitas-AMS GmbH, DE, Siegen²
+53.8
+S.C. Salgaz S.A., RO, Salonta²
+100.0
+QSEE GmbH, DE, Sarstedt²
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
+Safekont GmbH, DE, Munich²
+Rampion Renewables Limited, GB, Coventry5
+Heidelberg²
+39.9
+100.0
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Report of the Supervisory Board
+Strategy and Objectives
+We conducted our assurance engagement in accordance with
+the International Standard on Assurance Engagements (ISAE)
+3000 (Revised): Assurance Engagements other than Audits or
+Reviews of Historical Financial Information, issued by the IAASB.
+This Standard requires that we plan and perform the assurance
+engagement to allow us to conclude with limited assurance
+that nothing has come to our attention that causes us to believe
+that the Company's Non-financial Report for the period from
+1 January to 31 December 2020 has not been prepared, in all
+material aspects, in accordance with §§ 315c in conjunction
+with 289c to 289e HGB.
+Within the scope of our engagement we did not perform an
+audit on external sources of in-formation or expert opinions,
+referred to in the Non-financial Report.
+Our responsibility is to express a limited assurance conclusion
+on the Non-financial Report based on the assurance engagement
+we have performed.
+Practitioner's Responsibility
+Our audit firm applies the national legal requirements and
+professional standards - in particular the Professional Code
+for German Public Auditors and German Chartered Auditors
+("Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
+prüfer": "BS WP/vBP") as well as the Standard on Quality Con-
+trol 1 published by the Institut der Wirtschaftsprüfer (Institute
+of Public Auditors in Germany; IDW): Requirements to quality
+control for audit firms (IDW Qualitätssicherungsstandard 1:
+Anforderungen an die Qualitätssicherung in der Wirtschafts-
+prüferpraxis - IDW QS 1) - and accordingly maintains a compre-
+hensive system of quality control including documented policies
+and procedures regarding compliance with ethical requirements,
+professional standards and applicable legal and regulatory
+requirements.
+•
+.
+Survey regarding local data gathering and approval of GHG
+emissions FY19 in order to obtain an understanding of how
+Analytical evaluation of selected disclosures in the Non-
+financial Report
+Identification of the likely risks of material misstatement of
+the Non-financial Report
+Inquiries of personnel involved in the preparation of the
+Non-financial Report regarding the preparation process, the
+internal control system relating to this process and selected
+disclosures in the Non-financial Report
+Obtaining an understanding of the structure of the sustain-
+ability organization and of the stakeholder engagement
+•
+.
+247
+In a limited assurance engagement the assurance procedures
+are less in extent than for a reasonable assurance engagement,
+and therefore a substantially lower level of assurance is obtained.
+The assurance procedures selected depend on the practitioner's
+judgment.
+Within the scope of our assurance engagement, we performed
+amongst others the following assurance procedures and further
+activities:
+•
+We have complied with the German professional provisions
+regarding independence as well as other ethical requirements.
+Firm
+Further Information pursuant to Article 10 of the EU Audit
+Regulation
+This responsibility of Company's executive directors includes
+the selection and application of appropriate methods of non-
+financial reporting as well as making assumptions and estimates
+related to individual non-financial disclosures which are reason-
+able in the circumstances. Furthermore, the executive directors
+are responsible for such internal control as they have considered
+necessary to enable the preparation of a Non-financial Report
+that is free from material misstatement whether due to fraud or
+error.
+•
+•
+Evaluate the technical validity of the ESEF documents, i.e.,
+whether the electronic file containing the ESEF documents
+meets the requirements of the Delegated Regulation (EU)
+2019/815 in the version applicable as at the balance sheet
+date on the technical specification for this electronic file.
+Evaluate whether the ESEF documents enables a XHTML
+reproduction with content equivalent to the audited con-
+solidated financial statements and to the audited group
+management report.
+Evaluate whether the tagging of the ESEF documents with
+Inline XBRL technology (iXBRL) enables an appropriate and
+complete machine-readable XBRL copy of the XHTML repro-
+duction.
+the data has been gathered in the first place and how potential
+sources of error have been dealt with (e.g. incomplete or
+wrong data)
+We declare that the audit opinions expressed in this auditor's
+report are consistent with the additional report to the audit
+committee pursuant to Article 11 of the EU Audit Regulation
+(long-form audit report).
+German Public Auditor Responsible for the
+Engagement
+The German Public Auditor responsible for the engagement is
+Aissata Touré.
+Independence and Quality Control of the Audit
+Düsseldorf, March 16, 2021
+Markus Dittmann
+Wirtschaftsprüfer
+(German Public Auditor)
+Aissata Touré
+Wirtschaftsprüferin
+(German Public Auditor)
+Independent Practitioner's Report
+on Non-financial Reporting
+246
+Independent Practitioner's Report on a Limited
+Assurance Engagement on Non-financial
+Reporting
+To E.ON SE, Essen
+We have performed a limited assurance engagement on the
+combined separate non-financial report pursuant to §§ (Articles)
+289b Abs. (paragraph) 3 and 315b Abs. 3 HGB ("Handels-
+gesetzbuch": "German Commercial Code") of E.ON SE, Essen
+(hereinafter the "Company") for the period from 1 January to
+31 December 2020 (hereinafter the "Non-financial Report").
+Responsibilities of the Executive Directors
+The executive directors of the Company are responsible for
+the preparation of the Non-financial Report in accordance with
+§§ 315c in conjunction with 289c to 289e HGB.
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+Comparison of selected disclosures with corresponding data
+in the consolidated financial statements and in the group
+management report
+Member of the National Executive Board,
+Unified Service Sector Union, ver.di;
+Director of the Federal Divisions for
+Financial Services, Utilities and Waste
+Management, Media, Arts and Industry,
+Telecommunications and IT
+Assurance Conclusion
+Chairman of the Board of Management,
+Grillo-Werke AG
+→ Rheinmetall AG¹ (Chairman)
+→ Grillo Zinkoxid GmbH²
+→ Zinacor S.A.2
+Carolina Dybeck Happe
+Senior Vice President and Chief Financial
+Officer, General Electric Company (GE)
+Monika Krebber
+Deputy Chairperson of the
+General Works Council, innogy SE
+(until December 31, 2020)
+→ innogy SE2 (until June 2, 2020,
+merger into E.ON Verwaltungs SE)
+→ innogy SE2 (since June 2, 2020,
+formerly E.ON Verwaltungs SE,
+until December 31, 2020)
+Eugen-Gheorghe Luha
+Chairman of Gaz România
+(Romanian Federation of Gas Unions);
+Chairman of Romanian
+employee representatives;
+Member of the SE Works Council, E.ON SE
+Stefan May
+Deputy Chairman of the E.ON Group
+Works Council;
+Chairman of the Joint Works Council,
+Westenergie AG/Westnetz GmbH
+(since October 1, 2020, formerly
+Joint Works Council, Westnetz GmbH);
+Chairman of the Works Council of the
+Münster Region of Westnetz GmbH
+→ innogy SE2 (until June 2, 2020,
+merger into E.ON Verwaltungs SE)
+→ innogy SE2 (since June 2, 2020,
+formerly E.ON Verwaltungs SE,
+until December 31, 2020)
+→ Westenergie AG²
+(since October 1, 2020,
+formerly innogy Westenergie GmbH)
+2E.ON Group directorships/memberships.
+¹Listed company.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→ Directorships/memberships in other statutory supervisory boards.
+Unless otherwise indicated, information is as of December 31, 2020, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ EG.D a.s.2 (since January 1, 2021,
+formerly E.ON Distribuce a.s.)
+Ulrich Grillo
+→ E.ON Energie a.s.²
+Deputy Chairman of the European Works
+Council of E.ON SE;
+Miroslav Pelouch (since May 28, 2020)
+Chairperson of the Works Council, E.ON
+Dél-dunántúli Áramhálózati Zrt.;
+Member of the SE Works Council, E.ON SE
+Szilvia Pinczésné Márton
+→ E.ON Pensionsfonds AG2
+(since May 1, 2020)
+→ innogy Westenergie GmbH²
+(until September 30, 2020)
+Chairman of the Association of Grass-
+Roots Organisations of the ECHO Energy
+Sector Trade Union Federation in E.ON's
+companies in the Czech Republic;
+Member of the Executive Committee of
+the ECHO Trade Union Federation
+Evaluation of the presentation of the non-financial information
+Bayerische Motoren Werke AG
+Klaus Fröhlich
+Based on the assurance procedures performed and assurance
+evidence obtained, nothing has come to our attention that
+causes us to believe that the Company's Non-financial Report
+for the period from 1 January to 31 December 2020 has
+not been prepared, in all material aspects, in accordance with
+§§ 315c in conjunction with 289c to 289e HGB.
+Intended Use of the Assurance Report
+We issue this report on the basis of the engagement agreed with
+the Company. The assurance engagement has been performed
+for purposes of the Company and the report is solely intended
+to inform the Company about the results of the limited assurance
+engagement. The report is not intended for any third parties to
+base any (financial) decision thereon. Our responsibility lies only
+with the Company. We do not assume any responsibility
+towards third parties.
+Essen, March 15, 2021
+PricewaterhouseCoopers GmbH
+Wirtschaftsprüfungsgesellschaft
+Markus Dittmann
+Wirtschaftsprüfer
+German public auditor
+Hendrik Fink
+Wirtschaftsprüfer
+German public auditor
+Boards
+248
+Boards
+Supervisory Board (and Information on Other Directorships)
+Dr. Karl-Ludwig Kley
+Chairman of the Supervisory Board,
+E.ON SE
+→ Bayerische Motoren Werke AG¹
+→ Deutsche Lufthansa AG¹ (Chairman)
+Erich Clementi
+Full-time Representative of the
+General, Municipal, Boilermakers,
+and Allied Trade Union (GMB)
+Clive Broutta (until January 31, 2020)
+→ Ruhrfestspiele Recklinghausen GmbH
+→ AXA Konzern AG
+→ innogy SE2 (since June 2, 2020,
+formerly E.ON Verwaltungs SE,
+until December 31, 2020)
+•
+Former member of the Board of
+Management,
+Deputy Chairman of the Supervisory
+Board, E.ON SE;
+Christoph Schmitz
+Unified Service Sector Union, ver.di
+Andreas Scheidt (until May 28, 2020)
+Deputy Chairman of the Supervisory
+Board, E.ON SE
+(since May 5, 2020)
+→ Deutsche Lufthansa AG¹
+Deputy Chairman of the Supervisory
+Board, E.ON SE
+(since February 1, 2020)
+to design assurance procedures that are appropriate in the
+circumstances, but not for the purpose of expressing an
+assurance conclusion on the effectiveness of these controls.
+We were elected as group auditor by the annual general meeting
+on May 28, 2020. We were engaged by the supervisory board
+on June 5, 2020. We have been the group auditor of the E.ON SE,
+Essen, without interruption since the Company first met the
+requirements as a public-interest entity within the meaning of
+§ 319a Abs. 1 Satz 1 HGB in the financial year 1965.
+Identify and assess the risks of material non-compliance
+with the requirements of § 328 Abs. 1 HGB, whether due
+to fraud or error, design and perform assurance procedures
+responsive to those risks, and obtain assurance evidence
+that is sufficient and appropriate to provide a basis for our
+assurance conclusion.
+1 Pursuant to the agreements entered into between E.ON
+and RWE on March 12, 2018, on September 18, 2019 E.ON
+obtained control within the meaning of IFRS 10 of the net-
+work and sales businesses of innogy SE. The acquisition was
+accounted for as a business combination using the acquisition
+method in accordance with IFRS 3. The preliminary fair value
+measurement of the identifiable assets acquired and liabilities
+assumed, as initially carried out in financial year 2019, was
+finalized and retrospectively adjusted at the acquisition date
+within the measurement period of one year provided for in
+IFRS 3. The new knowledge and information obtained during
+the measurement period resulted in an adjustment of the
+acquired net assets less non-controlling interests to a total
+of EUR -1.0 billion. The consideration transferred, which also
+contained a cash payment subject to contractually agreed
+price adjustments, was measured in the total amount of
+EUR 14.7 billion as of the end of the measurement period.
+Consequently, the business combination resulted in goodwill
+of EUR 15.7 billion. For the purposes of impairment testing,
+in financial year 2020 this was allocated in accordance with
+IAS 36 to the existing cash-generating units or groups of
+cash-generating units that are expected to benefit from the
+synergies generated by the business combination and that
+have already included the innogy businesses since the seg-
+ments were reorganized as of January 1, 2020.
+Due to the highly complex nature of the transaction as a
+whole, the associated complex calculation of the consideration
+transferred, the estimation uncertainties and the scope of
+discretion in measuring the assets acquired and liabilities
+assumed, as well as the overall material effect of the amounts
+involved in the acquisition on the net assets, liabilities, finan-
+cial position and financial performance, the subsequent
+accounting relating to the acquisition of innogy's network
+and sales businesses in financial year 2019 was of particular
+significance in the context of our audit.
+② As part of our audit, we assessed the effects of the new
+knowledge and information obtained within the measure-
+ment period in accordance with IFRS 3 on the first-time con-
+solidation of innogy as of September 18, 2019. One focus
+was on the contractually agreed purchase price adjustments
+as part of the consideration transferred. We assessed these
+pursuant to the contractual bases, the settlement agreement
+between E.ON SE and RWE AG in the 2020 financial year
+and the payments made. Furthermore, we assessed the final
+recognition and measurement of the assets and liabilities
+underlying the business combination. This included their
+identification, the application of consistent accounting and
+measurement policies, and their fair value accounting as of
+the date of first-time consolidation. In this context, one focal
+point for our audit was to address the final external reports for
+the purchase price allocation. As well as assessing the exter-
+nal appraiser's professional qualifications, we also assessed
+the appropriateness of, among other things, the models on
+which the valuations were based, and the valuation inputs
+and assumptions used. Given the special features relating to
+the calculation of the fair values in the context of the busi-
+ness combination, our internal valuation specialists assisted
+in the process. Furthermore, we assessed the calculation of
+the final goodwill and its allocation to the cash-generating
+units or groups of cash-generating units for the purposes of
+impairment testing. Our focus in this context was on the
+proper allocation of the goodwill to those cash-generating
+units or groups of cash-generating units that are expected
+to benefit from the synergies generated by acquiring innogy's
+network and sales businesses. As part of our audit, we criti-
+cally assessed the synergy planning underlying the allocation,
+the assumptions forming the basis, and the assignment
+of direct and indirect synergies. Furthermore, we critically
+assessed the methodological approach and verified the mathe-
+matical correctness of the model underlying the allocation.
+Other focal points of our audit were to assess the disclosures
+in the notes required under IFRS 3 and the presentation as
+part of segment reporting. In relation to the reorganization of
+the segments, we assessed in particular whether the innogy
+companies were allocated to the E.ON reporting segments in
+accordance with the requirements of IFRS 8.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+241
+Overall, we were able to satisfy ourselves that the acquisi-
+tion was appropriately presented in the financial statements
+(including the retrospective adjustments made in financial
+year 2020 in the context of the measurement period under
+IFRS 3), that the estimates and assumptions made by the
+executive directors are substantiated and sufficiently docu-
+mented, and that the corresponding disclosures in the notes
+are appropriate.
+③ The Company's disclosures relating to subsequent consoli-
+dation are contained in notes 5 and 33 to the consolidated
+financial statements.
+2 Recoverability of goodwill
+In the consolidated financial statements of E.ON SE as of
+December 31, 2020, goodwill amounting to EUR 17.8 billion
+is reported under the "Goodwill" balance sheet item. In the
+third quarter of 2020, the EUR 15.7 billion in goodwill arising
+from the acquisition of innogy's network and sales businesses
+was allocated to the existing cash-generating units or groups
+of cash-generating units for the purposes of impairment
+testing and subsequently tested for impairment together with
+the existing goodwill in the context of the annual impair-
+1 Subsequent accounting relating to the acquisition of innogy's
+network and sales businesses in financial year 2019
+ment test.
+annuity. By doing so, expectations about future market
+developments and assumptions about the development of
+macroeconomic and regulatory drivers as well as the
+expected impact of the ongoing COVID-19 pandemic on the
+Group's business are also taken into account. The discount
+rate used is the weighted average cost of capital for the
+relevant cash-generating unit or group of cash-generating
+units in each case. The impairment test determined that no
+impairment was necessary on the existing goodwill in financial
+year 2020.
+The result of this measurement depends to a large extent on
+the executive directors' estimates of the amount of future
+cash flows, the discount rate applied and the growth rate.
+The assumptions about the long-term development of the
+underlying contributions to earnings and the relevant regu-
+latory influencing factors are also of particular importance.
+Due to the complexity of the measurement and the consid-
+erable uncertainties relating to the underlying assumptions,
+this matter was of particular significance in the context of
+our audit.
+②As part of our audit, we assessed, among other things,
+whether the measurement model for performing impairment
+testing properly reflects the conceptual requirements of the
+relevant standards and whether the calculations in the mod-
+els were correctly performed. The critical assessment of the
+key assumptions underlying the measurements was the focal
+point of our audit. We evaluated the appropriateness of the
+future cash flows used for the measurement by reconciling
+this data against general and sector-specific market expec-
+tations and by comparing it with the current budgets in the
+Group investment, finance and HR plan for 2021 prepared
+by the executive directors and approved by the supervisory
+board on December 15, 2020 as well as the medium-term
+planning for financial years 2022 and 2023 prepared by the
+executive directors and acknowledged by the supervisory
+board. Among other things, we assessed how the long-term
+Independent Auditor's Report
+242
+growth rates used for perpetual annuities were derived
+from the observable market data and market expectations,
+and reconciled this with the cost of capital applied. We also
+assessed the parameters used to determine the discount
+rate applied, and evaluated the measurement model. In addi-
+tion, we compared the assumptions about the long-term
+development of the contributions to earnings and the relevant
+regulatory influencing factors against sector-specific expec-
+tations. In this context, we also assessed the executive direc-
+tors' estimate as to the impact of the COVID-19 pandemic
+on the Group's business and evaluated how this was taken
+into consideration in calculating the future cash flows. Within
+the context of our assessment of the recoverability of good-
+will, we also evaluated whether the costs for corporate over-
+heads were properly determined, allocated, and included in
+the impairment tests of the respective cash-generating units
+or groups of cash-generating units. Finally, we assessed the
+calculation of the carrying amounts of the cash-generating
+units or groups of cash-generating units and their comparison
+against the respective recoverable amount.
+Overall, the valuation parameters and assumptions used by
+the executive directors are in line with our expectations and
+are also within the ranges considered by us to be reasonable.
+③The Company's disclosures relating to the recoverability of
+goodwill are contained in note 15 to the consolidated financial
+statements.
+Other Information
+The executive directors are responsible for the other information.
+The other information comprises the statement on corporate
+governance pursuant to § 289f HGB and § 315d HGB.
+The other information comprises further the remaining parts
+of the annual report - excluding cross-references to external
+information - with the exception of the audited consolidated
+financial statements, the audited group management report
+and our auditor's report, and the separate non-financial report
+pursuant to § 289b Abs. 3 HGB and § 315b Abs. 3 HGB.
+Our audit opinions on the consolidated financial statements
+and on the group management report do not cover the other
+information, and consequently we do not express an audit
+opinion or any other form of assurance conclusion thereon.
+Goodwill is tested for impairment on a regular basis in the
+fourth quarter of each year, or when there are indications of
+impairment, to determine any possible need for write-downs.
+The Company allocates goodwill to cash-generating units or
+groups of cash-generating units that are generally equivalent
+to the E.ON Group's operating segments. In the context
+of the impairment test, the carrying amount of the relevant
+cash-generating units or groups of cash-generating units -
+including goodwill - is compared with the corresponding
+recoverable amount. The basis of valuation in the context of
+an impairment test is the present value of the future cash
+flows from the cash-generating unit or group of cash-gener-
+ating units, which are determined using discounted cash
+flow models. The cash flows are based on the E.ON Group's
+medium-term planning for financial years 2021 to 2023.
+For the purposes of assessing the recoverability of goodwill,
+the three-year detailed planning period is generally extended
+by another two years and is then extrapolated based on
+assumptions about long-term growth rates in perpetual
+In connection with our audit, our responsibility is to read the
+other information and, in so doing, to consider whether the
+other information
+Hereinafter we present the key audit matters:
+Independent Auditor's Report
+Independent Auditor's Report
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+239
+The following copy of the auditor's report also includes a "Report
+on the audit of the electronic renderings of the financial state-
+ments and the management report prepared for disclosure pur-
+poses in accordance with § 317 Abs. 3b HGB" ("Separate report
+on ESEF conformity"). The subject matter (ESEF documents)
+to which the Separate report on ESEF conformity relates is not
+attached. The audited ESEF documents can be inspected in or
+retrieved from the Federal Gazette.
+Independent Auditor's Report
+To E.ON SE, Essen
+Report on the Audit of the Consolidated
+Financial Statements and of the Group
+Management Report
+Audit Opinions
+We have audited the consolidated financial statements of E.ON SE,
+Essen, and its subsidiaries (the Group), which comprise the
+consolidated balance sheet as at December 31, 2020, and the
+consolidated statement of income, consolidated statement
+of recognized income and expenses, consolidated statement
+of changes in equity and consolidated statement of cash flows
+for the financial year from January 1 to December 31, 2020,
+and notes to the consolidated financial statements, including
+a summary of significant accounting policies. In addition, we
+have audited the group management report of E.ON SE, which is
+combined with the Company's management report, for the
+financial year from January 1 to December 31, 2020. In accor-
+dance with the German legal requirements, we have not audited
+the content of the statement on corporate governance pursuant
+to § [Article] 289f HGB [Handelsgesetzbuch: German Commer-
+cial Code] and § 315d HGB.
+In our opinion, on the basis of the knowledge obtained in the audit,
+240
+•
+the accompanying group management report as a whole
+provides an appropriate view of the Group's position. In all
+material respects, this group management report is consis-
+tent with the consolidated financial statements, complies
+with German legal requirements and appropriately presents
+the opportunities and risks of future development. Our audit
+opinion on the group management report does not cover the
+content of the statement on corporate governance referred
+to above.
+Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
+that our audit has not led to any reservations relating to the
+legal compliance of the consolidated financial statements and
+of the group management report.
+Basis for the Audit Opinions
+We conducted our audit of the consolidated financial statements
+and of the group management report in accordance with
+§ 317 HGB and the EU Audit Regulation (No. 537/2014, referred
+to subsequently as "EU Audit Regulation") in compliance with
+German Generally Accepted Standards for Financial Statement
+Audits promulgated by the Institut der Wirtschaftsprüfer [Insti-
+tute of Public Auditors in Germany] (IDW). We performed the
+audit of the consolidated financial statements in supplementary
+compliance with the International Standards on Auditing (ISAs).
+Our responsibilities under those requirements, principles and
+standards are further described in the "Auditor's Responsibilities
+for the Audit of the Consolidated Financial Statements and of
+the Group Management Report" section of our auditor's report.
+We are independent of the group entities in accordance with
+the requirements of European law and German commercial and
+professional law, and we have fulfilled our other German pro-
+fessional responsibilities in accordance with these requirements.
+In addition, in accordance with Article 10 (2) point (f) of the EU
+Audit Regulation, we declare that we have not provided non-audit
+services prohibited under Article 5 (1) of the EU Audit Regulation.
+We believe that the audit evidence we have obtained is sufficient
+and appropriate to provide a basis for our audit opinions on
+the consolidated financial statements and on the group manage-
+ment report.
+Key Audit Matters in the Audit of the Consolidated Financial
+Statements
+Key audit matters are those matters that, in our professional
+judgment, were of most significance in our audit of the
+consolidated financial statements for the financial year from
+January 1 to December 31, 2020. These matters were addressed
+in the context of our audit of the consolidated financial state-
+ments as a whole, and in forming our audit opinion thereon; we
+do not provide a separate audit opinion on these matters.
+In our view, the matters of most significance in our audit were
+as follows:
+1 Subsequent accounting relating to the acquisition of innogy's
+network and sales businesses in financial year 2019
+Recoverability of goodwill
+Our presentation of these key audit matters has been structured
+in each case as follows:
+1 Matter and issue
+② Audit approach and findings
+3 Reference to further information
+Obtain an understanding of internal control relevant to the
+assurance engagement on the ESEF documents in order
+•
+the accompanying consolidated financial statements com-
+ply, in all material respects, with the IFRSS as adopted by the
+EU and the additional requirements of German commercial
+law pursuant to § 315e Abs. [paragraph] 1 HGB and, in com-
+pliance with these requirements, give a true and fair view of
+the assets, liabilities, and financial position of the Group as
+at December 31, 2020, and of its financial performance for
+the financial year from January 1 to December 31, 2020, and
+is materially inconsistent with the consolidated financial
+statements, with the group management report or our
+knowledge obtained in the audit, or
+Evaluate the consistency of the group management report with
+the consolidated financial statements, its conformity with
+German law, and the view of the Group's position it provides.
+Perform audit procedures on the prospective information
+presented by the executive directors in the group manage-
+ment report. On the basis of sufficient appropriate audit evi-
+dence we evaluate, in particular, the significant assumptions
+used by the executive directors as a basis for the prospective
+information, and evaluate the proper derivation of the pro-
+spective information from these assumptions. We do not
+express a separate audit opinion on the prospective infor-
+mation and on the assumptions used as a basis. There is a
+substantial unavoidable risk that future events will differ
+materially from the prospective information.
+We communicate with those charged with governance regarding,
+among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficien-
+cies in internal control that we identify during our audit.
+We also provide those charged with governance with a state-
+ment that we have complied with the relevant independence
+requirements, and communicate with them all relationships and
+other matters that may reasonably be thought to bear on our
+independence, and where applicable, the related safeguards.
+From the matters communicated with those charged with
+governance, we determine those matters that were of most sig-
+nificance in the audit of the consolidated financial statements
+of the current period and are therefore the key audit matters.
+We describe these matters in our auditor's report unless law or
+regulation precludes public disclosure about the matter.
+Other Legal and Regulatory Requirements
+Assurance Report in Accordance with § 317 Abs. 3b HGB on
+the Electronic Reproduction of the Consolidated Financial
+Statements and the Group Management Report Prepared for
+Publication Purposes
+Reasonable Assurance Conclusion
+We have performed an assurance engagement in accordance
+with § 317 Abs. 3b HGB to obtain reasonable assurance
+about whether the reproduction of the consolidated financial
+statements and the group management report (hereinafter
+the "ESEF documents") contained in the attached electronic file
+EON_SE_KA_zLB_ESEF-2020-12-31.zip and prepared for
+publication purposes complies in all material respects with the
+requirements of § 328 Abs. 1 HGB for the electronic reporting
+format ("ESEF format"). In accordance with German legal
+requirements, this assurance engagement only extends to the
+conversion of the information contained in the consolidated
+financial statements and the group management report into the
+ESEF format and therefore relates neither to the information
+contained within this reproduction nor to any other information
+contained in the above-mentioned electronic file.
+In our opinion, the reproduction of the consolidated financial
+statements and the group management report contained in
+the above-mentioned attached electronic file and prepared for
+publication purposes complies in all material respects with the
+requirements of § 328 Abs. 1 HGB for the electronic reporting
+format. We do not express any opinion on the information
+contained in this reproduction nor on any other information
+contained in the above-mentioned electronic file beyond this
+reasonable assurance conclusion and our audit opinion on the
+accompanying consolidated financial statements and the
+accompanying group management report for the financial year
+from January 1 to December 31, 2020 contained in the "Report
+on the Audit of the Consolidated Financial Statements and on
+the Group Management Report" above.
+Basis for the Reasonable Assurance Conclusion
+We conducted our assurance engagement on the reproduction
+of the consolidated financial statements and the group man-
+agement report contained in the above-mentioned attached
+electronic file in accordance with § 317 Abs. 3b HGB and the
+Exposure Draft of IDW Assurance Standard: Assurance in Accor-
+dance with § 317 Abs. 3b HGB on the Electronic Reproduction
+of Financial Statements and Management Reports Prepared for
+Publication Purposes (ED IDW ASS 410) and the International
+Standard on Assurance Engagements 3000 (Revised). Accord-
+ingly, our responsibilities are further described below in the
+"Group Auditor's Responsibilities for the Assurance Engagement
+Report of the Supervisory Board
+Strategy and Objectives
+Obtain sufficient appropriate audit evidence regarding the
+financial information of the entities or business activities
+within the Group to express audit opinions on the consolidated
+financial statements and on the group management report.
+We are responsible for the direction, supervision and perfor-
+mance of the group audit. We remain solely responsible for
+our audit opinions.
+Combined Group Management Report
+245
+on the ESEF Documents" section. Our audit firm has applied
+the IDW Standard on Quality Management: Requirements for
+Quality Management in the Audit Firm (IDW QS 1).
+Responsibilities of the Executive Directors and the Supervisory
+Board for the ESEF Documents
+The executive directors of the Company are responsible for the
+preparation of the ESEF documents including the electronic
+reproduction of the consolidated financial statements and the
+group management report in accordance with § 328 Abs. 1
+Satz 4 Nr. 1 HGB and for the tagging of the consolidated financial
+statements in accordance with § 328 Abs. 1 Satz 4 Nr. 2 HGB.
+In addition, the executive directors of the Company are respon-
+sible for such internal control as they have considered necessary
+to enable the preparation of ESEF documents that are free from
+material non-compliance with the requirements of § 328 Abs. 1
+HGB for the electronic reporting format, whether due to fraud
+The executive directors of the Company are also responsible
+for the submission of the ESEF documents together with the
+auditor's report and the attached audited consolidated financial
+statements and audited group management report as well as
+other documents to be published to the operator of the German
+Federal Gazette [Bundesanzeiger].
+The supervisory board is responsible for overseeing the prepa-
+ration of the ESEF documents as part of the financial reporting
+process.
+Group Auditor's Responsibilities for the Assurance Engagement
+on the ESEF Documents
+Our objective is to obtain reasonable assurance about whether
+the ESEF documents are free from material non-compliance
+with the requirements of § 328 Abs. 1 HGB, whether due to
+fraud or error. We exercise professional judgment and maintain
+professional skepticism throughout the assurance engagement.
+We also:
+•
+•
+•
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+•
+or error.
+Independent Auditor's Report
+Responsibilities of the Executive Directors and the Supervisory
+Board for the Consolidated Financial Statements and the Group
+Management Report
+otherwise appears to be materially misstated.
+244
+The executive directors are responsible for the preparation of
+the consolidated financial statements that comply, in all material
+respects, with IFRSS as adopted by the EU and the additional
+requirements of German commercial law pursuant to § 315e
+Abs. 1 HGB and that the consolidated financial statements, in
+compliance with these requirements, give a true and fair view
+of the assets, liabilities, financial position, and financial perfor-
+mance of the Group. In addition, the executive directors are
+responsible for such internal control as they have determined
+necessary to enable the preparation of consolidated financial
+statements that are free from material misstatement, whether
+due to fraud or error.
+In preparing the consolidated financial statements, the executive
+directors are responsible for assessing the Group's ability to
+continue as a going concern. They also have the responsibility
+for disclosing, as applicable, matters related to going concern.
+In addition, they are responsible for financial reporting based on
+the going concern basis of accounting unless there is an inten-
+tion to liquidate the Group or to cease operations, or there is no
+realistic alternative but to do so.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+243
+appropriately presents the opportunities and risks of future
+development. In addition, the executive directors are responsible
+for such arrangements and measures (systems) as they have
+considered necessary to enable the preparation of a group man-
+agement report that is in accordance with the applicable German
+legal requirements, and to be able to provide sufficient appropri-
+ate evidence for the assertions in the group management report.
+The supervisory board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consolidated
+financial statements and of the group management report.
+Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements and of the Group Management Report
+Our objectives are to obtain reasonable assurance about whether
+the consolidated financial statements as a whole are free from
+material misstatement, whether due to fraud or error, and
+whether the group management report as a whole provides an
+appropriate view of the Group's position and, in all material
+respects, is consistent with the consolidated financial statements
+and the knowledge obtained in the audit, complies with the
+German legal requirements and appropriately presents the oppor-
+tunities and risks of future development, as well as to issue an
+auditor's report that includes our audit opinions on the consoli-
+dated financial statements and on the group management report.
+Furthermore, the executive directors are responsible for the
+preparation of the group management report that, as a whole,
+provides an appropriate view of the Group's position and is, in
+all material respects, consistent with the consolidated financial
+statements, complies with German legal requirements, and
+We exercise professional judgment and maintain professional
+skepticism throughout the audit. We also:
+Evaluate the overall presentation, structure and content of
+the consolidated financial statements, including the disclo-
+sures, and whether the consolidated financial statements
+present the underlying transactions and events in a manner
+that the consolidated financial statements give a true and
+fair view of the assets, liabilities, financial position and finan-
+cial performance of the Group in compliance with IFRSS as
+adopted by the EU and the additional requirements of German
+commercial law pursuant to § 315e Abs. 1 HGB.
+Conclude on the appropriateness of the executive directors'
+use of the going concern basis of accounting and, based on
+the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern.
+If we conclude that a material uncertainty exists, we are
+required to draw attention in the auditor's report to the related
+disclosures in the consolidated financial statements and
+in the group management report or, if such disclosures are
+inadequate, to modify our respective audit opinions. Our
+conclusions are based on the audit evidence obtained up to
+the date of our auditor's report. However, future events or
+conditions may cause the Group to cease to be able to con-
+tinue as a going concern.
+Evaluate the appropriateness of accounting policies used by
+the executive directors and the reasonableness of estimates
+made by the executive directors and related disclosures.
+Reasonable assurance is a high level of assurance, but is not a
+guarantee that an audit conducted in accordance with § 317 HGB
+and the EU Audit Regulation and in compliance with German
+Generally Accepted Standards for Financial Statement Audits
+promulgated by the Institut der Wirtschaftsprüfer (IDW) and
+supplementary compliance with the ISAs will always detect a
+material misstatement. Misstatements can arise from fraud or
+error and are considered material if, individually or in the aggre-
+gate, they could reasonably be expected to influence the eco-
+nomic decisions of users taken on the basis of these consolidated
+financial statements and this group management report.
+Obtain an understanding of internal control relevant to the
+audit of the consolidated financial statements and of arrange-
+ments and measures (systems) relevant to the audit of the
+group management report in order to design audit procedures
+that are appropriate in the circumstances, but not for the
+purpose of expressing an audit opinion on the effectiveness
+of these systems.
+basis for our audit opinions. The risk of not detecting a mate-
+rial misstatement resulting from fraud is higher than for one
+resulting from error, as fraud may involve collusion, forgery,
+intentional omissions, misrepresentations, or the override of
+internal control.
+•
+If, based on the work we have performed, we conclude that
+there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in
+this regard.
+•
+•
+•
+•
+Identify and assess the risks of material misstatement of the
+consolidated financial statements and of the group manage-
+ment report, whether due to fraud or error, design and per-
+form audit procedures responsive to those risks, and obtain
+audit evidence that is sufficient and appropriate to provide a
+René Pöhls
+Ulrich Grillo (since January 1, 2021)
+(until December 31, 2020)
+Audit and Risk Committee
+Andreas Schmitz, Chairman
+Fred Schulz, Deputy Chairman
+Caroline Dybeck Happe
+Fred Schulz
+Albert Zettl
+Ulrich Grillo
+Andreas Scheidt, Deputy Chairman
+(until May 28, 2020)
+Erich Clementi
+Dr. Karl-Ludwig Kley, Chairman
+Christoph Schmitz, Deputy Chairman
+(since May 28, 2020)
+Elisabeth Wallbaum
+Executive Committee
+Supervisory Board Committees
+→ Versorgungskasse Energie VVaG i. L.
+(since May 1, 2020)
+→ Bayernwerk AG²
+Council, Bayernwerk Netz GmbH
+Chairman of the Eastern Bavaria Works
+Bayernwerk AG;
+Council;
+Chairman of the Division Works Council,
+→ E.ON Pensionsfonds AG2
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+Dr. Karen de Segundo, Chairperson
+Chairman of the E.ON Group Works
+Strategy & Innovation, Human Resources, Communications &
+Political Affairs, Legal, Compliance & Corporate Security,
+Corporate Culture, Corporate Audit, Sustainability, Health/
+Safety, and Environment
+Member of the Management Board since 2004
+Chairman of the Management Board since 2010
+Born in 1959 in Hildesheim, Germany
+Dr. Johannes Teyssen
+Management Board (and Information on Other Directorships)
+250
+Boards
+Deborah Wilkens
+2E.ON Group directorships/memberships.
+→ Directorships/memberships in other statutory supervisory boards.
+Unless otherwise indicated, information is as of December 31, 2020, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+Dr. Karl-Ludwig Kley, Chairman
+Erich Clementi, Deputy Chairman
+Dr. Karen de Segundo
+Nomination Committee
+Ewald Woste
+Monika Krebber (since February 5, 2020)
+Eugen-Gheorghe Luha
+Klaus Fröhlich
+Clive Broutta (until January 31, 2020)
+Stefan May, Deputy Chairman
+Listed company.
+Deputy Chairman of the SE Works
+Council, E.ON SE;
+→ RWE Power AG² (Chairman)
+→ Energie Steiermark AG
+→ RWE Renewables GmbH2
+→ RWE Generation SE2 (Chairman)
+CEO, RWE AG
+Dr. Rolf Martin Schmitz
+(since January 1, 2021)
+→ Commerzbank AG
+→ Scheidt & Bachmann GmbH (Chairman)
+→ HSBC Trinkaus & Burkhardt AG¹
+(until December 31, 2020),
+(Chairman until November 27, 2020)
+Attorney
+(since October 15, 2020)
+Andreas Schmitz
+Chairman of the Group Works Council,
+envia Mitteldeutsche Energie AG;
+Chairman of the Joint General Works
+Council and the Joint Works Council
+Halle/Kabelsketal, envia Mitteldeutsche
+Energie AG, MITGAS Mitteldeutsche
+Gasversorgung GmbH, Mitteldeutsche
+Netzgesellschaft Strom mbH, and
+Mitteldeutsche Netzgesellschaft Gas mbH
+→ innogy SE2 (until June 2, 2020,
+Chairman of the SE Works Council,
+innogy SE (until June 2, 2020);
+Deputy Chairman of the Group Works
+Council, E.ON SE ;
+Deputy Chairman of the SE Works
+Council, E.ON SE;
+René Pöhls
+249
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+→ innogy SE2 (Chairman, until June 2, 2020,
+merger into E.ON Verwaltungs SE)
+→ envia Mitteldeutsche Energie AG²
+Albert Zettl
+→ RWE Supply & Trading GmbH²
+→ TÜV Rheinland AG
+(dena)
+→ Deutsche Energie-Agentur GmbH
+→ GreenCom Networks AG
+→ GASAG AG
+→ Bayernwerk AG²
+Management consultant
+Ewald Woste
+Deborah Wilkens
+Management consultant
+Expert, SE Works Council E.ON SE and
+E.ON Group Works Council
+→ Amprion GmbH (until April 30, 2020)
+Elisabeth Wallbaum
+→ Szczecińska Energetyka
+Cieplna Sp. z o.0.2
+Chairman of the Works Council,
+E.DIS Netz GmbH-East Region
+→ E.DIS AG2
+Chairman of the Combined Works
+Council, E.DIS AG;
+Chairman of the SE Works Council,
+E.ON SE;
+Fred Schulz
+→ KELAG-Kärntner Elektrizitäts-AG
+→Kärntner Energieholding
+Beteiligungs GmbH
+(Jaeger Gruppe, Chairman)
+→ Jaeger Grund GmbH & Co. KG
+Dr. Karen de Segundo
+Attorney
+merger into E.ON Verwaltungs SE)
+Deputy Chairman of the E.ON Group
+Works Council;
+→ Nord Stream AG
+2,961
+Cash provided by operating activities of continuing operations4
+Cash flow, investments and financial ratios
+Total assets and liabilities
+Other liabilities and other
+95,385
+98,080
+54,324
+-2,952
+55,950
+17,247
+17,990
+11,581
+8,904
+7,325
+3,418
+3,841
+1,563
+63,699
+3,099
+2,853
+5,313
+Release of the 2021 Annual Report
+Quarterly Statement: January - March 2022
+2022 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2022
+Quarterly Statement: January – September 2022
+253
+This Annual Report was published on March 24, 2021.
+Only the German version of this Annual Report is legally binding.
+This Annual Report contains certain forward-looking statements based on E.ON management's current assumptions and
+forecasts and other currently available information. Various known and unknown risks, uncertainties, and other factors
+could lead to material differences between E.ON's actual future results, financial situation, development, or performance
+and the estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to
+conform them to future events or developments.
+E.ON SE
+2,965
+Brüsseler Platz 1
+Germany
+T +49 201-184-00
+info@eon.com
+eon.com
+3,523
+3,308
+3,169
+Cash-effective investments
+45131 Essen
+3,792
+3,904
+4,019
+21,384
+20,669
+15,706
+18,001
+19,618
+Provisions
+61,761
+58,982
+Financial liabilities
+30,545
+39,287
+Non-current liabilities
+→ BP plc.¹ (since January 1, 2021)
+4,149
+2,760
+2,701
+2,342
+Minority interests without controlling influence
+35,198
+10,435
+9,922
+8,323
+2,117
+2,041
+12,008
+24,569
+25,850
+15,261
+14,044
+23,125
+Financial liabilities
+Provisions
+Current liabilities
+10,954
+10,741
+6,516
+7,275
+9,234
+Other liabilities and other
+29,423
+27,572
+May 12, 2022
+August 10, 2022
+November 9, 2022
+2,641
+May 11, 2022
+Quarterly Statement: January – September 2021
+-4.33
+1.84
+1.49
+0.68
+0.40
+Dividend per share5 (€)
+0.21
+0.30
+Earnings per share attributable to shareholders of E.ON SE (€)
+0.43
+0.47
+Dividend payout
+410
+650
+932
+1,199
+1,225
+Moody's
+0.46
+Baal
+Stock and E.ON SE long-term ratings
+7.2
+5,515
+4,171
+Equity ratio (%)
+2
+12
+16
+14
+9
+8.7
+Economic net debt (at year-end)
+19,248
+16,580
+38,895
+40,736
+Cash provided by operating activities of continuing operations
+as a percentage of sales
+7.8
+9.5
+26,320
+Baa2
+Baa2
+Baa2
+T +49 201-184-4236
+eon.com/en/about-us/media.html
+Analysts, shareholders and bond investors
+T +49 201-184-2806
+investorrelations@eon.com
+Production & Typesetting
+Jung Produktion, Düsseldorf
+252
+Journalists
+Financial Calendar
+May 19, 2021
+August 11, 2021
+November 10, 2021
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Quarterly Statement: January - March 2021
+2021 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2021
+May 11, 2021
+eon.com
+info@eon.com
+T +49 201-184-00
+Baa2
+Standard & Poor's
+BBB+
+BBB
+BBB
+BBB
+BBB
+Employees
+Employees at year-end
+43,138
+42,699
+43,302
+78,948
+78,126
+¹Adjusted for discontinued operations. . 2Line items from the Consolidated Statements of Income for 2016 and line items from the Consolidated Balance Sheets for 2016 were adjusted to exclude
+Uniper..³Adjusted for non-operating effects. "From January 1, 2018 to September 18, 2019 Renewables Segment and from September 18, 2019 to October 30, 2020 innogy business in the Czech
+Republic included in full in each case..5For the respective financial year; the 2020 figure is management's proposed dividend.. Values for 2019 adjusted for subsequent effects from innogy purchase
+price allocation and from the disclosure of so-called "failed own use contracts"
+Contact
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+March 16, 2022
+2,641
+4,130
+Innovation and Sustainability Committee
+2,201
+2,001
+Capital stock
+9,055
+13,248
+8,518
+2,201
+6,708
+Equity
+95,385
+98,080
+54,324
+55,950
+63,699
+1,287
+Total assets
+Net income/Net loss
+3,220
+37,965
+30,084
+41,284
+60,944
+Adjusted EBITDA³
+4,939
+3,776
+4,955
+5,564
+6,905
+1,017
+3,112
+3,074
+2,989
+4,840
+38,173
+19,901
+23,441
+1,526
+1,505
+1,427
+-16,007
+4,180
+3,524
+1,638
+1,792
+Net income/Net loss attributable to shareholders of E.ON SE
+-8,450
+3,925
+904
+Adjusted net income³
+3,223
+1,270
+22,294
+Value measures
+Asset and capital structure
+15,786
+17,403
+75,484
+75,786
+30,883
+40,164
+ROCE (%)
+46,296
+8.3
+10.4
+10.6
+10.4
+Current assets
+Non-current assets
+6.2
+Sales
+Adjusted EBIT³
+2020
+→ E.ON Sverige AB² (Chairman until March 10, 2020)
+→ Rheinenergie AG (since October 1, 2020)
+→ Stadtwerke Essen AG (since June 25, 2020)
+→ Essener Wirtschaftsförderungsgesellschaft mbH
+(since June 2, 2020)
+Dr. Marc Spieker
+Born in 1975 in Essen, Germany
+Member of the Management Board since 2017
+Finance, Investor Relations, Mergers & Acquisitions, Accounting,
+Controlling, Risk Management, Tax, S4 Transformation
+→ E.ON Verwaltungs SE² (Chairman, until June 1, 2020)
+→ innogy SE2 (until June 2, 2020,
+merger into E.ON Verwaltungs SE)
+→ Süwag Energie AG² (since June 22, 2020)
+→ Westenergie AG² (since October 1, 2020,
+formerly innogy Westenergie GmbH)
+→ innogy Westenergie GmbH2 (from February 13, 2020,
+until September 30, 2020)
+→ Nord Stream AG
+Dr. Karsten Wildberger
+→ E.ON Hungária Zrt.2 (Chairman)
+→ EG.D a.s.2 (Chairman, formerly E.ON Distribuce a.s.)
+→ E.ON Česká republika s.r.o.2 (Chairman)
+until September 30, 2020)
+Dr.-Ing. Leonhard Birnbaum
+Born in 1967 in Ludwigshafen, Germany
+Member of the Management Board of E.ON SE since 2013
+innogy integration project, Nuclear Coordination, Inhouse
+Consulting
+Member of the Management Board, innogy SE
+(Chairman, until June 2, 2020, merger into E.ON Verwaltungs SE)
+→ innogy SE2 (Chairman, since June 2, 2020,
+formerly E.ON Verwaltungs SE)
+→ E.ON Italia S.p.A.2 (until June 26, 2020)
+→ Georgsmarienhütte Holding GmbH
+Born in 1969 in Gießen, Germany
+Dr. Thomas König
+Member of the Management Board since 2018
+Energy Networks (including Turkey), Supply Chain
+→ Avacon AG2 (Chairman)
+→ Bayernwerk AG² (Chairman)
+→ E.DIS AG2 (Chairman, until April 29, 2020)
+→ envia Mitteldeutsche Energie AG2 (since May 7, 2020)
+→HanseWerk AG2 (Chairman, until April 30, 2020)
+→ Westenergie AG2 (since October 1, 2020,
+formerly innogy Westenergie GmbH)
+→ innogy Westenergie GmbH² (from February 13, 2020,
+Born in 1965 in Finnentrop, Germany
+Sales and earnings
+Member of the Management Board since 2016
+→ E.ON Digital Technology GmbH² (Chairman)
+→ Directorships/memberships in other statutory supervisory boards.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+¹Listed company.
+2E.ON Group directorships/memberships.
+Summary of Financial Highlights
+Report of the Supervisory Board
+Strategy and Objectives
+Unless otherwise indicated, information is as of December 31, 2020, or as of the date on which membership in the E.ON SE Management Board ended.
+Combined Group Management Report
+251
+Summary of Financial Highlights 1,2
+€ in millions
+2016
+2017
+2018
+20196
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Retail and Customer Solutions, Market Excellence, Energy
+Management, Marketing, Digital Transformation & IT
+1,550
+→ E.ON Energie A.S.2 (Chairman)
+→ E.ON Italia S.p.A.2 (since June 26, 2020)
+→ E.ON Sverige AB²
+→ Essent N.V.2 (Chairman, since September 3, 2020)
+Corporate Functions' main task is to lead the E.ON Group. This
+involves charting E.ON's strategic course and managing and
+funding its existing business portfolio. Corporate Functions' tasks
+include optimizing E.ON's overall business across countries and
+markets from a financial, strategic, and risk perspective and
+conducting stakeholder management.
+Forecast Report
+57
+Risks and Chances Report
+65
+Internal Control System for the Accounting Process
+67 Disclosures Regarding Takeovers
+70
+54
+Corporate Governance Declaration
+80 Compensation Report
+Corporate Profile
+20
+Corporate Profile
+Business Model
+Non-Core Business
+Substantially all of the operations in this segment were classified
+as discontinued operations effective June 30, 2018, and decon-
+solidated effective September 18, 2019. Certain business oper-
+ations were not transferred to RWE and were reassigned to other
+segments (see "Special Events in the Reporting Period" below).
+This refers in particular to e.disnatur operations in Germany and
+Poland as well as a 20-percent stake in Rampion offshore wind
+farm in the United Kingdom (on Rampion, see Notes 5 and 37 to
+the Consolidated Financial Statements). This segment consisted
+of onshore wind, offshore wind, and solar farms. E.ON planned,
+built, operated, and managed renewable generation assets.
+Renewables
+This segment serves as the platform for working with E.ON's
+customers to actively shape Europe's energy transition. This
+includes supplying customers in Europe (excluding Turkey) with
+power, gas, and heat as well as with products and services that
+enhance their energy efficiency and autonomy and provide
+other benefits. E.ON's activities are tailored to the individual
+needs of customers across all categories: residential, small and
+medium-sized enterprises, large commercial and industrial,
+sales partners, and public entities. E.ON's main presence in this
+business is in Germany, the United Kingdom, the Netherlands,
+Belgium, Sweden, Italy, the Czech Republic, Hungary, Romania,
+and Poland. Businesses that provide innovative solutions (like
+E.ON Business Solutions and the eMobility business) are also
+part of this segment.
+E.ON is an investor-owned energy company with approximately
+78,000 employees led by Corporate Functions in Essen. The Group
+has two operating segments: Energy Networks and Customer
+Solutions. Non-strategic operations are reported under Non-Core
+Business. In the prior year the Group also had a Renewables
+segment (see commentary below).
+This segment consists of E.ON's power and gas distribution
+networks and related activities. It is subdivided into three regional
+markets: Germany, Sweden, and East-Central Europe/Turkey
+(which consists of the Czech Republic, Hungary, Romania, Poland,
+Croatia, Slovakia, and the stake in Enerjisa Enerji in Turkey, which
+is accounted for using the equity method). This segment's main
+tasks include operating its power and gas networks safely and
+reliably, carrying out all necessary maintenance and repairs, and
+expanding its power and gas networks, which frequently involves
+adding customer connections and the connection of renewable
+energy generation assets.
+Energy Networks
+Corporate Functions
+Customer Solutions
+Innovation
+50
+22222
+20
+Corporate Profile
+20
+Business Model
+20
+24
+Special Events in the Reporting Period
+Management System
+25
+This segment consists of the E.ON Group's non-strategic activities.
+This applies to the operation and dismantling of nuclear power
+stations in Germany (which is managed by the Preussen Elektra
+unit) and the generation business in Turkey.
+28
+28
+Business Report
+Macroeconomic and Industry Environment
+31
+Business Performance
+- ROCE
+49
+Other Financial and Non-financial Performance Indicators
+E.ON SE's Earnings, Financial, and Asset Situation
+49
+48
+- Employees
+Business Segments
+Asset Situation
+41
+Financial Situation
+37
+Earnings Situation
+32
+42
+Special Events in the Reporting Period
+The future of mobility is another key innovation area for E.ON.
+In order for eMobility to become established in the marketplace,
+E.ON considers improvements in charging infrastructure and
+the use of new storage options to be key challenges. E.ON's
+innovation team is testing new technologies to increase the
+quality of charging processes. The technologies include artificial
+intelligence, robotics, and new approaches to distributed energy
+management. One result is OMNe, an innovative digital tool
+that provides E.ON's business customers with comprehensive
+advice on enlarging their charging infrastructure for electric
+vehicles ("EVs"). With the percentage of EVs in fleets growing
+continually, E.ON's digital advice tool meets the demand for
+swiftly adding significant charging infrastructure. However,
+installing EV charging stations changes a facility's power con-
+sumption and load profile. Finding the most cost-effective solu-
+tion requires a comprehensive view that takes into account all
+variables: the number of vehicles, parking duration, load profile,
+grid connection, and a company's energy consumption targets.
+OMNe enables any company to plan the installation or expansion
+of charging infrastructure in just a few minutes.
+In December 2020, the E.ON SE Supervisory Board resolved to
+appoint Leonhard Birnbaum as Chairman of the Company's
+Management Board and CEO effective April 1, 2021. Birnbaum
+will succeed Johannes Teyssen. Teyssen joined the Group in 1989,
+has been a member of the Management Board since 2004, and
+has led E.ON for more than ten years.
+€500 million green bond maturing in August 2031
+with a coupon of 0.875 percent per year (May).
+Nord Stream Stake Transferred to Contractual Trust
+Arrangement ("CTA")
+E.ON Beteiligungen GmbH held all of the shares of PEG Infra-
+struktur AG ("PEGI") and thus an indirect, 15.5-percent stake in
+Nord Stream AG. Nord Stream AG, a project company f
+founded
+in 2005, owns and operates two offshore gas pipelines, each
+with a length of 1,224 kilometers, that transport natural gas from
+Russia to Germany. In a contract dated December 18, 2019,
+E.ON Beteiligungen GmbH sold all of its PEGI shares and thus
+its indirect stake in Nord Stream AG to E.ON Pension Trust e.V.
+("EPT") with effect and for the account of the trust assets of
+MEON Pensions GmbH & Co. KG ("MEON"). The shares were
+transferred at the end of 2019. The purchase price of €1.1 billion
+was paid at the start of 2020.
+Agreement on Strategic Partnership with Kraken Technologies
+In March 2020 E.ON reached a contractual agreement on a
+strategic partnership with Kraken Technologies, a subsidiary of
+Octopus Energy. The strategic partnership, E.ON Next, uses
+Kraken Technologies' technology platform and will transform
+E.ON UK's business with residential and small and medium
+enterprise customers.
+E.ON and Kraken Technologies will further improve the platform
+in order to offer outstanding customer service founded on the
+principles of customer orientation, simplicity, transparency, and
+cost-efficiency. In the first phase, npower's customers are cur-
+rently being migrated to the new platform; E.ON UK's customers
+will be migrated in the second phase. By the end of December
+2020, nearly 70 percent of npower's residential customer con-
+tracts had been transferred to E.ON Next-
+Sale of Real Estate Assets
+with a coupon of 0.75 percent per year (May)
+Fully consolidated E.ON Group companies E.ON NA Capital, Inc.
+and E.ON RE Investments LLC transferred real estate assets in
+the amount of roughly US$288 million to other entities in 2020;
+US$265 million was transferred to the trust assets of E.ON
+Pension Trust e.V., which is not fully consolidated. The payments
+of the purchase price were made primarily in 2020.
+24
+Acquisition of Residual Power Output Rights
+In 2020 a total of 19 TWh of residual power output rights were
+acquired from the company that operates Krümmel nuclear
+power plant ("NPP") and transferred to Grohnde (3 TWh in
+October 2020), Isar II (6 TWh in February 2020), and Brokdorf
+(5 TWh each in February and December 2020), NPPs managed
+by PreussenElektra. The legal framework ensures the supply of
+all NPPs operated by E.ON with additional amounts of residual
+power output (for more information, see pages 61 and 62 of
+the Risk and Chances Report as well as Notes 29 and 37 to the
+Consolidated Financial Statements).
+Reorganization of E.ON's Business in Hungary
+In early October 2019 E.ON acquired EnBW's 27-percent
+stake in ELMŰ Nyrt. ("ELMŰ”) and ÉMÁSZ Nyrt. ("ÉMÁSZ").
+Subsequently, E.ON, MVM Magyar Villamos Művek Zrt.
+("MVM," a shareholder of ELMŰ and ÉMÁSZ), and Opus Global
+Nyrt. ("Opus") signed a framework agreement. This agreement
+enables E.ON to give itself a balanced and optimized portfolio
+in Hungary that will also make it possible to swiftly integrate
+innogy's operations there.
+The agreement is expected to be fully implemented in 2021
+after clearance by the relevant agencies. This will give MVM
+100 percent of distribution operator ÉMÁSZ, ÉMÁSZ Hálózati
+Kft. ("ÉMÁSZ DSO"), and a 25-percent stake in E.ON Hungária
+Zrt. (including the innogy holding companies, ELMÜ Zrt. and
+ÉMÁSZ Zrt.). In addition, Opus is to acquire current E.ON sub-
+sidiary E.ON Tiszántúli Áramhálózati Zrt. ("E.ON ETI"). Pursuant
+to IFRS 5, ÉMÁSZ DSO as well as E.ON ETI were reclassified as
+a disposal group effective December 31, 2020. E.ON ETI assets
+and liabilities had already been reclassified as a disposal group
+in 2019.
+Corporate Profile
+€500 million bond maturing in February 2028
+with a coupon of 0.375 percent per year (May)
+€1 billion bond maturing in April 2023
+Corporate Bonds Issued
+In 2020 E.ON issued various corporate bonds totaling €5 billion.
+The high level of investor demand enabled E.ON to secure
+favorable interest terms across all maturities (month of issuance
+in parenthesis):
+•
+•
+•
+€750 million bond maturing in December 2023
+with a coupon of 0 percent per year (January)
+€1 billion green bond maturing in September 2027
+with a coupon of 0.375 percent per year (January)
+€500 million bond maturing in December 2030
+with a coupon of 0.75 percent per year (January)
+• €750 million bond maturing in October 2025
+•
+•
+with a coupon of 1 percent per year (April)
+New Central Commodity Procurement Entity, E.ON Energy
+Markets, Founded
+On October 1, 2020, newly founded E.ON Energy Markets GmbH
+("EEM") began operating as the Group's commodity procurement
+entity. EEM gives affiliated Group companies access to outside
+trading markets (which have previously been conducted decen-
+trally) and bundles the resulting risks. Alongside innogy Commod-
+ities GmbH, EEM provides market access for E.ON's portfolio in
+Germany. In the future, EEM will handle power and gas procure-
+ment for other E.ON companies in Germany and elsewhere.
+Management System
+E.ON's corporate strategy aims to deliver sustainable growth in
+shareholder value. E.ON has in place a Group-wide planning and
+controlling system to assist its in planning and managing the
+Group as a whole and its individual businesses with an eye to
+increasing their value. This system ensures that E.ON's financial
+resources are allocated efficiently. E.ON strives to enhance its
+sustainability performance efficiently and effectively as well.
+It embeds these expectations progressively more deeply into
+its organization-across all organizational entities and all pro-
+cesses-by means of binding Group-wide policies (for more
+information, see the Separate Combined Non-Financial Report
+on pages 100 to 115).
+Corporate Profile
+26
+In 2020 Group Innovation adopted a new 360-degree innovation
+approach. It combines E.ON's own innovation activities and
+outside collaborations in a single entity. This strengthens E.ON's
+partnerships with other innovative and global companies, start-
+ups, universities, other institutions, and thought leaders. The
+new 360-degree innovation approach has the following core
+elements:
+Forging Strategic Partnership with Startups, Blue Chips, and
+Technology Companies
+Together with innovative partners, E.ON is exploring which
+technologies, applications, platforms, and services will become
+relevant in the future and can provide the best and most sus-
+tainable solution for customers. Partnering with startups, tech-
+nology groups, and other innovative companies in the years
+ahead will enable E.ON to differentiate itself from competitors
+much more by means of innovation than productivity gains.
+E.ON already uses cross-industry knowledge sharing as a catalyst
+for progress and to accelerate the energy transition. In 2020,
+E.ON business units concluded commercial agreements totaling
+€12 million with 24 start-ups from E.ON's investment platform
+to test new technologies and their customer acceptance in its
+operating business. If test results are successful, these solutions
+can be deployed at other E.ON business units, enabling E.ON to
+tap new growth areas for future business. E.ON focuses on
+areas like sustainability, customer centricity, eMobility, and loT
+services for the digitization of its network and sales businesses.
+Partnering with Universities and Other Scientific Institutions
+Together with the E.ON Energy Research Center at RWTH
+Aachen University, E.ON is pursuing a wide range of research
+and development activities to identify technology trends at
+an early stage and assess their economic potential for the Com-
+pany's future business. E.ON and the E.ON Energy Research
+Center launched 12 new joint projects and 14 studies in 2020.
+The knowledge gained from them can be integrated more quickly
+into E.ON's ongoing innovation projects at its business units.
+The annual budget for the partnership with RWTH amounts to
+approximately €2 million. E.ON is also in contact with other
+leading scientific institutions and universities in Germany in
+order to help shape the implementation of the country's energy
+transition. In addition, E.ON contributes its expertise to state-
+ments of the German science academies on policy, technological,
+and regulatory issues. In this way, E.ON and its partners also
+support the implementation of the European Green Deal, whose
+purpose is to make the European Union's economy climate-
+neutral by 2050.
+Expanding and Integrating In-house Innovations into E.ON's
+Existing Business
+E.ON is one of Europe's largest distribution system operators and
+energy suppliers. It is therefore well placed to play a key role
+in shaping the energy transition. Sector integration is expanding
+the energy supply business beyond its traditional boundaries.
+This is already enabling E.ON to establish new businesses in
+industry, transport, buildings, and infrastructure. E.ON's innova-
+tive solutions are already helping a variety of industries embrace
+green growth and develop individually tailored solutions for
+industrial and residential customers. As part of this effort, Group
+Innovation conducts projects in four main areas: industrial
+automation and electrification, energy grids and city solutions,
+connected mobility, and connected lifestyle.
+IElectrix is a pilot project for innovative energy concepts in the
+distributed and digital energy system of the future. It is part of
+European Horizon 2020, the European Union's largest research
+and innovation initiative. E.ON is responsible for the technical
+management of IElectrix, which will run for three and a half years.
+In IElectrix, E.ON is testing mobile storage systems for distribu-
+tion grids in Germany and demonstrating their advantages in
+a real-world setting. E.ON's IElectrix project partners-E.ON
+Hungária in Hungary, Stadtwerke Güssing in Austria, and Tata
+Power in India-are conducting real-word demonstrations in
+their countries. The purpose of all these demonstration projects
+is to yield test results, by 2022, on the possibilities for making
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+27
+greater use of renewable electricity in the immediate vicinity
+of its production. After successful piloting of the technologies,
+all major elements of energy control can be brought together:
+energy storage, locally generated renewable energy, smart grid
+control, flexibility services, and new commercial marketing
+models. IElectrix's objective is to demonstrate that storage
+systems can give distribution grids greater flexibility, thereby
+enhancing grid stability and supply security. IElectrix is one of
+the ways E.ON is making a significant contribution to developing
+technical solutions for a more environmentally friendly and
+resilient energy supply in all regions of Europe: for cities and
+districts as well as remote, rural areas.
+In a distributed energy system, E.ON will be even more of an
+energy service provider for its business partners and customers.
+In a world in which every household and every company can
+be an energy producer, roles established over many years will
+change. Tomorrow's customers will be partners who may be
+energy producers and traders as well as energy consumers. At
+the same time, more and more renewable power will be fed into
+the grid. These parallel trends-more market participants and
+more renewables feed-in-pose significant technical and organi-
+zational challenges for grid management. Increasingly, managing
+distributed feed-in requires new technologies like artificial intel-
+ligence. In addition, E.ON's innovation activities are focusing
+increasingly on the Internet of Things ("loT") and corresponding
+data processing systems. The purpose is to give E.ON the
+capability in the future to manage a much more complex energy
+system that can no longer be controlled by humans alone.
+Other impacts of the Covid-19 pandemic on E.ON's business
+are described in the Business Report, the Forecast Report, and
+the Risks and Chances Report.
+Innovations are an important element of E.ON's business oper-
+ations. The transition of today's energy system toward a distrib-
+uted, digital, and sustainable energy world goes hand in hand
+with the use of new technologies and the development of new,
+innovative business models. E.ON's focus is on its core busi-
+nesses: energy networks, regulated and market-based energy
+infrastructure, and customer solutions for its commercial and
+residential customers. Innovations in these businesses make a
+significant contribution to E.ON's future and competitiveness
+and the implementation of the energy transition in Europe.
+However, these other KPIs are not the focus of the ongoing
+management of E.ON's businesses.
+Key Performance Indicators
+In the 2020 financial year, E.ON's most important key perfor-
+mance indicators ("KPIs") for managing its operating business
+were adjusted EBIT and cash-effective investments. Other KPIs
+for managing the E.ON Group are cash-conversion rate, adjusted
+net income, earnings per share (based on adjusted net income),
+and debt factor. In the prior year, the Combined Group Manage-
+ment Report's presentation of sales and the KPIs relevant for
+management control also included the results of discontinued
+operations in the Renewables segment that were deconsolidated
+effective September 18, 2019. Pages 34 to 36 of the Combined
+Group Management Report and Note 35 to the Consolidated
+Financial Statements contain reconciliations of these indicators
+to the disclosures in the E.ON SE and Subsidiaries Consolidated
+Statements of Income, Consolidated Balance Sheets, and Con-
+solidated Statements of Cash Flows.
+Adjusted earnings before interest and taxes ("adjusted EBIT") is
+E.ON's most important KPI for purposes of internal management
+control and as an indicator of its businesses' long-term earnings
+power. The E.ON Management Board is convinced that adjusted
+EBIT is the most suitable KPI for assessing operating performance
+because it presents a business's operating earnings independently
+of non-operating factors, interest, and taxes. The adjustments
+include net book gains, certain restructuring expenses, impair-
+ment charges and reversals, the marking to market of derivatives,
+and other non-operating earnings (see the explanatory infor-
+mation on pages 34 to 36 of the Combined Group Management
+Report and in Note 35 to the Consolidated Financial Statements).
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+25
+In addition, the effects of the subsequent valuation of hidden
+reserves and liabilities that were identified as part of the pur-
+chase-price calculation and allocation for the innogy transaction
+are disclosed separately.
+Cash-effective investments are equal to the investment expen-
+ditures shown in the E.ON Group's Consolidated Statements
+of Cash Flows. In the prior year, these included the investments
+of discontinued operations in the Renewables segment until they
+were deconsolidated effective September 18, 2019.
+Cash-conversion rate is equal to operating cash flow before inter-
+est and taxes divided by adjusted EBITDA. It indicates whether
+E.ON's operating earnings are generating enough liquidity. The
+expenditures for the dismantling of nuclear power stations that
+are included in operating cash flow before interest and taxes are
+not factored into cash-conversion rate. To balance out fluctuations
+that result primarily from payments around the balance-sheet
+date, E.ON will manage its cash-conversion rate by means of a
+target figure over the three years of the medium-term plan.
+Adjusted net income is an earnings figure after interest income,
+income taxes, and non-controlling interests that has likewise
+been adjusted to exclude non-operating effects (see the explan-
+atory information on page 36 of the Combined Group Manage-
+ment Report).
+E.ON manages its capital structure by means of its debt factor
+(see the section entitled Finance Strategy on page 37). Debt
+factor is equal to economic net debt divided by adjusted EBITDA
+and is therefore a dynamic debt metric. Economic net debt
+includes net financial debt as well as pension and asset-retire-
+ment obligations.
+Other KPIs
+Alongside E.ON's most important financial management KPIs,
+the Combined Group Management Report includes other financial
+and non-financial KPIs to present the performance of E.ON's
+operating business and as part of E.ON's responsibility for all its
+stakeholders: employees, customers, shareholders, bond inves-
+tors, and the countries in which the Group operates. Operating
+cash flow, power and gas passthrough and sales volume, and
+selected employee information are examples of other KPIs.
+In addition, some KPIs are important for E.ON as a customer-
+focused company. For example, E.ON's ability to acquire new
+customers and retain existing ones is crucial to the Company's
+success. Net promoter score ("NPS") measures customers' will-
+ingness to recommend E.ON to a friend or colleague. Our The
+Sustainability Report and the Separate Combined Non-Financial
+Report describe how NPS fits into the Company's management
+approach.
+Innovation
+During the Covid-19 pandemic, E.ON temporarily shortened
+work schedules, particularly in the United Kingdom, and availed
+itself of related government support, which for the E.ON Group
+is, on balance, negligible. Nevertheless, the employment situa-
+tion at E.ON has remained very stable over the course of the
+Covid-19 crisis. In this regard, there have been no noteworthy
+longer-term effects on employment in the E.ON Group.
+As many European countries relaxed the restrictions on public
+life and the economy in the summer of 2020, E.ON too took steps
+to enable many of its employees to return to their jobs respon-
+sibly. The third quarter of 2020 saw a renewed rise in Covid-19
+infections across Europe that continued into the fourth quarter
+and, in many cases, exceeded the peaks that had been recorded
+during the lockdown in the spring of 2020. This resulted in
+many cities and regions being classified as high-risk areas,
+which in such cases led to additional restrictions on daily life.
+E.ON is continuously analyzing the risk situation resulting from
+the Covid-19 pandemic and, if necessary, will take additional
+measures to contain the pandemic's impact.
+23
+Another of the European Commission's conditions was the sale
+of E.ON Energie Deutschland's heating electricity business in
+Germany. The portfolio of contracts consists of all special con-
+tracts with customers supplied with heating electricity and, if
+such customers also procure household electricity for which there
+is a separate meter at the same premises, the corresponding
+household electricity contract. In preparation for the sale, the
+portfolio of contracts was separated into two newly founded
+companies, E.ON Heizstrom Nord GmbH ("EHN") and E.ON
+Heizstrom Süd GmbH ("EHS"). Pursuant to IFRS 5, due to the
+obligation to sell these operations, E.ON had reclassified the
+heating electricity business as a disposal group effective Septem-
+ber 30, 2019. The sale of EHN and EHS closed on April 28, 2020.
+In addition, on September 23, 2020, E.ON sold its subsidiary
+E.ON Energiakereskedelmi Kft. ("EKER"), which operates its
+non-regulated retail electricity business for commercial cus-
+tomers in Hungary, to Audax Renovables. Pursuant to IFRS 5,
+E.ON had already reclassified EKER's business as a disposal
+group effective September 30, 2019, owing to its obligation to
+dispose of these operations.
+Previously E.ON had withdrawn from the operation of a number
+of electric-vehicle charging stations located along motorways
+in Germany. By closing these transactions E.ON completely ful-
+filled the antitrust conditions in conjunction with the innogy
+takeover.
+Acquisition of Stake in VSE Holding Successfully Completed
+In August 2020 E.ON completed the acquisition of 49 percent
+of the shares in VSE Holding ("VSEH") from RWE. Extensive
+decision-making powers over VSEH's business operations give
+E.ON a controlling influence pursuant to IFRS. VSEH is there-
+fore fully consolidated and accounted for using the acquisition
+method in accordance with IFRS 3 (see Note 5 to the Consoli-
+dated Financial Statements). The purchase price to be paid to
+RWE was not cash-effective in the 2020 financial year. It was
+offset against an open receivable in conjunction with the acqui-
+sition of RWE's innogy stake, which closed on September 18,
+2019. The transaction therefore had no material impact on cash
+flow in the 2020 financial year.
+Operations during the Covid-19 Pandemic
+Group-wide Transparency on Innovation Activities
+-4
+In March 2020 the European Commission proposed a draft
+European Climate Law as part of the European Green Deal. The
+draft initially foresaw a 40-percent reduction in GHG emissions
+by 2030 and climate neutrality by 2050. Following an evaluation
+of the GHG reduction target in September, the Commission
+proposed a higher target of at least 55 percent by 2030. The
+European Commission is currently developing strategies and
+proposals as a basis for implementing the measures necessary
+to reach this target. These include a European structural and
+investment fund, a hydrogen strategy, and the 2030 climate
+target plan.
+Europe
+The pandemic necessitated the postponement of the United
+Nations Framework Convention on Climate Change, 26th Confer-
+ence of the Parties ("COP 26") in Glasgow, which was originally
+scheduled for November 2020. COP 26 is now scheduled to
+begin on November 1, 2021. In addition, EU representatives and
+Chinese delegates had been planning to hold talks in Glasgow
+with the aim of bringing the People's Republic of China closer
+to the Paris Climate Agreement. In September 2020 President
+Xi Jinping made a surprise announcement that China-one of the
+world's largest emitters of greenhouse gases ("GHGs")-would
+strive for carbon neutrality by 2060. This announcement itself
+is a sign of progress in international climate-protection efforts.
+The United States' withdrawal from the Paris Climate Agree-
+ment initiated by the President Donald Trump became official
+on November 4, 2020. One of the world's largest industrialized
+nations and carbon emitters was therefore no longer part of the
+global climate dialogue. However, shortly after the new President,
+Joseph Biden, took office in January 2021, the United States
+rejoined the Paris Climate Agreement. Biden had indicated prior
+to his inauguration his intention of continuing the fight against
+climate change.
+Energy Policy and Regulatory Environment
+Global
+Alongside the pandemic, the Brexit negotiations were a key fac-
+tor in 2020. The Brexit transition period, which was supposed
+to provide time to work out exit arrangements, concluded at the
+end of December 2020. Effective the beginning 2021, the United
+Kingdom is no longer part of the EU single market. Shortly before
+this, the European Union and the United Kingdom concluded
+a trade and cooperation agreement that, among other things,
+avoids tariffs.
+0
+Source: OECD, 2020.
+22
+-2
+Corporate Profile
+European Commission's Conditions for innogy Takeover Fulfilled
+With regard to the innogy takeover, the European Commission,
+among other things, imposed conditions requiring the disposal
+of certain E.ON and innogy businesses in Eastern Europe.
+As part of the succession plan for the Group's top leadership,
+the Supervisory Board also announced that Victoria Ossadnik,
+currently CEO of E.ON Energie Deutschland GmbH, will be
+appointed to the E.ON SE Management Board effective April 1,
+2021. Ossadnik, who joined the E.ON Group in April 2018,
+previously spent seven years at Microsoft Corporation, where
+she most recently led its global Enterprise Service Data and
+Artificial Intelligence organization. In the future, she will be
+responsible for the E.ON Group's digitization.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+21
+Changes in Segment Reporting
+The innogy takeover successfully closed in 2019. Effective
+January 1, 2020, innogy's operations are no longer managed
+and disclosed as a separate segment but rather integrated into
+Energy Networks, Customer Solutions, and Corporate Functions/
+Other. innogy's network businesses were assigned to Energy
+Networks. Its power and gas sales along with new customer
+solutions (such as eMobility services) are reported at Customer
+Solutions. Corporate Functions/Other includes innogy's corporate
+functions and internal services. After substantially all of the
+Renewables segment was transferred to RWE, its remaining
+businesses are reported at Energy Networks in Germany,
+Customer Solutions in the United Kingdom, and Corporate
+Functions/Other.
+Customer Solutions' Germany unit now includes the heating
+business formerly disclosed at its Other unit. In addition, three
+E.ON Business Solutions companies were transferred from
+Customer Solutions' Other unit to its United Kingdom unit. Where
+necessary, the prior-year figures were adjusted accordingly.
+Merger Squeeze-out of innogy's Remaining Minority
+Shareholders Concluded
+On March 4, 2020, the Extraordinary General Meeting of
+innogy SE adopted a resolution to transfer the remaining minority
+shareholders' innogy stock. The merger squeeze-out adopted at
+the meeting took effect when the transfer resolution and merger
+were entered into the Commercial Register on June 2, 2020. In
+early June 2020 cash compensation totaling €2.4 billion was paid
+to minority shareholders. The resulting reduction in Group equity
+mainly affected the retained earnings of E.ON SE shareholders.
+At the conclusion of the squeeze-out, the €5 billion in acquisition
+financing E.ON originally arranged, which had been reduced to
+€1.75 billion in August 2018, was cancelled.
+Accounting of innogy Acquisition Finalized
+The accounting of the innogy acquisition was finalized in the third
+quarter of 2020. New insights gained by September 18, 2020,
+into the amount of acquisition costs and acquired assets,
+including goodwill and liabilities, led to retrospective adjustments,
+including resulting changes to the Consolidated Balance Sheets
+at December 31, 2019. Goodwill increased by €197 million
+relative to the figure recorded at year-end 2019, mainly because
+of changes in the valuation of certain assets acquired in the
+takeover.
+Transfer of innogy Bonds to E.ON Concluded
+On August 13, 2020, E.ON launched transactions to harmonize
+the new E.ON Group's funding structure. These transactions
+involve E.ON offering innogy bondholders the option to change
+the debtor of roughly €11.5 billion in bonds to E.ON. The offer
+gave innogy bondholders the option to hold bonds that have the
+same status as current E.ON bonds. It will also ensure that all
+debt investors are treated equally. The transaction was completely
+concluded in November 2020. 99.95 percent of outstanding
+innogy bonds were successfully transferred.
+To fulfill one of these conditions, on July 10, 2020, E.ON and
+MVM Group signed an agreement regarding the sale of innogy
+Česká republika a.s. and thus innogy SE's entire electricity and
+gas retail business in the Czech Republic. Pursuant to IFRS 5,
+E.ON had already reclassified these innogy operations in the
+Czech Republic as discontinued operations effective Septem-
+ber 30, 2019. The transaction was cleared by the European
+Commission at the end of October and subsequently closed on
+October 30, 2020.
+Resolution Adopted for Personnel Changes in the E.ON SE
+Management Board Effective April 1, 2021
+-6
+-10
+Macroeconomic and Industry Environment
+Business Report
+28
+Business Report
+E.ON supports its development of new business models by
+establishing networks. In 2020 the Company further expanded
+its international partnerships with leaders from other industries
+as well as leading universities, institutions, and startups. In
+October 2020, for the first time more than 5,000 participants
+from 63 nations took part in E.ON's virtual Energy Innovation
+Days conference. The conference focused on the challenges
+facing the energy industry and the use of innovation to shape
+a sustainable energy world.
+Toward a Global Innovation Network
+To help shape tomorrow's decarbonized, distributed, and digital
+energy system, it is important to have access to the latest tech-
+nologies and business models as well as entrepreneurs and
+startups in the world's leading innovation hubs. In 2020 E.ON
+founded Future Energy Ventures, a new equity investment and
+partnership platform that secures E.ON's access to outside
+innovation and combines E.ON and innogy's co-investment port-
+folios. Future Energy Ventures has offices in Palo Alto (USA),
+Tel Aviv (Israel), and Berlin and Essen (Germany). It invests in
+digital and digitally enabled technologies and business models
+that have the potential to fundamentally change and shape the
+energy system of the future.
+E.ON's Equity Investment and Partnership Platform
+Partnerships and research and pilot projects of today become
+E.ON's innovations of tomorrow. These ideas also lead to a large
+number of inventions that result in patent applications. To protect
+intellectual property, E.ON has made patenting an integral part
+of its innovation strategy.
+Inventions and Patents
+In order to continually leverage innovations to generate growth
+businesses for E.ON, Group Innovation initiates cross-divisional
+innovation and competence networks, which ensure that new
+innovative business activities are undertaken throughout the
+E.ON Group. In 2020 E.ON developed a new reporting system
+for this purpose, the Innovation Dashboard, which provides
+comprehensive transparency on all central innovation activities
+and product developments and displays information on their
+current status quo and expected monetization. It yields real-time
+insights for monitoring innovation performance and thus serves
+as an improved database for decision-making.
+In addition, E.ON SE Management Board members used various
+information channels on Connect, E.ON's intranet platform, to
+share their views on the pandemic and explain its impact on every-
+day working life as well as on the Company. The purpose was
+to inform employees swiftly and comprehensively. Connect not
+only provided information about the measures taken to contain
+the Covid-19 pandemic. It also created interactive opportunities
+for employees to ask questions and to discuss them in town hall
+meetings. Furthermore, helping employees deal with the impact
+of the pandemic was and remains one of E.ON's priorities. Where
+possible, the Company therefore made use of all forms of flexible
+working arrangements (such as home office and variable work-
+ing hours) in order to accommodate employees' personal circum-
+stances and needs. Covid-19 also made it necessary to adjust
+meeting formats. Most meetings were held virtually and still are.
+In addition, managers have paid even more attention than usual
+to their employees' well-being and, when needed, have pointed
+them toward company assistance and support services, such as
+a confidential social counseling service. This was ensured in
+several ways, including additional communications and individual
+coordination at the management level.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Macroeconomic Environment
+-8
+After growing moderately in 2019, the global economy slumped
+significantly in 2020, contrary to the original growth forecasts
+from 2019. The global Covid-19 pandemic was mainly respon-
+sible. The large number of possible scenarios for the pandemic's
+spread makes it difficult to forecast global economic development
+in 2021 as well. Amid a global recession, the unemployment rate
+in OECD countries rose sharply. The closure of national borders
+intended to slow the spread of Covid-19 restricted freedom
+of movement, which had an adverse impact on global economic
+development. Industry, commerce, and trade had to reduce pro-
+duction worldwide in 2020. The degree of reduction depended
+on the pandemic's spread and the restrictions on employees
+and consumers, which varied by country and region. As a result,
+energy consumption declined worldwide. For example, the
+European Network of Transmission System Operators for Elec-
+tricity ("ENTSO-E") reported that Germany's total electricity
+demand fell by 3 percent relative to 2019, Britain's by 6 percent,
+Spain and France's by 5 percent, and Italy's by fully 8 percent.
+Annual change in percent
+-12
+-3.2
+-4.2
+-4.6
+World
+OECD
+-5.5
+-7.5
+Euro zone
+Sweden
+-5.5
+Netherlands
+-11.3
+United
+Kingdom
+Germany
+GDP Growth in Real Terms in 2020
+E.ON's top priorities during the Covid-19 pandemic are a secure
+energy supply and the safety of employees and customers. E.ON's
+power, gas, and heat networks, which secure the energy supply
+in large parts of Europe, continue to run stably, even under
+these difficult conditions. E.ON was able to draw on previously
+prepared pandemic and crisis plans, which it implemented
+accordingly. This included updating risk assessments, adjusting
+rules in line with government regulations, and conducting
+timely communications to promote transparency and aware-
+ness regarding the Covid-19 pandemic and E.ON's response
+measures. This made it possible to maintain all key functions.
+The most important measures included strict adherence to
+hygiene and social-distancing rules as well as the isolation of
+particularly sensitive work areas, such as network control cen-
+ters. In addition, technicians who do field work on the network
+have special equipment to minimize the risk of infection.
+45
+E.ON also has access to a five-year, €3.5 billion syndicated
+credit facility, which was concluded on October 24, 2019, and
+which includes two options to extend the facility, in each case
+for one year. The first option to extend the facility for another
+year was exercised in October 2020. The credit margin is linked,
+among other things, to the development of certain ESG ratings,
+which gives E.ON financial incentives to pursue a sustainable
+corporate strategy. The ESG ratings are set by three renowned
+agencies: ISS ESG, MSCI ESG Research, and Sustainalytics.
+The facility serves as a reliable, ongoing general liquidity reserve
+for the E.ON Group and can be drawn on as needed. The credit
+facility is made available by 21 banks which constitute E.ON's
+core group of banks.
+922
+907
++2
+3,253
+2,501
++30
+76
+290
+-74
+454
+350
++30
+301
+-32
+-222
++86
+-350
+-303
+-16
+7
+-3
+6
+5
+973
+972
+3,363
+2,854
++1-%
++18
+20191
++1-%
+Other operating income totaled €8,907 million in 2020 (prior
+year: €5,367 million). Income from currency-translation effects
+of €1,064 million and income from derivative financial instru-
+ments of €5,906 million were considerably above the prior-year
+figures (€327 million and €3,378 million, respectively). Corre-
+sponding amounts resulting from currency-translation effects
+and derivative financial instruments are recorded under other
+operating expenses. The sale of equity interests and securities
+resulted in income of €411 million (prior year: €525 million).
+Costs of materials of €47,147 million were substantially above
+the prior-year level of €31,434 million. Personnel costs rose by
+€1,765 million, from €4,101 million to €5,866 million. These
+developments resulted mainly from the inclusion, for the first
+time, of the innogy Group for the entire year in 2020.
+Depreciation charges rose from €2,489 million in 2019 to
+€4,166 million in 2020. This change mainly reflects the inclusion
+of innogy for part of 2019 and all of 2020. Planned depreciation
+charges in 2020 were recorded primarily at Energy Networks in
+Germany; impairment charges, principally in connection with
+the restructuring of the network business in Hungary, which is
+recorded at Energy Networks' East-Central Europe unit.
+Other operating expenses increased by 44 percent, from
+€7,570 million to €10,919 million, chiefly because expenditures
+relating to derivative financial instruments (including changes
+in currency rates) rose by €1,488 million to €5,787 million.
+Expenditures relating to currency-translation effects were also
+higher, increasing by €216 million to €641 million.
+Income from companies accounted for under the equity method
+of €408 million was slightly below the prior-year figure of
+€421 million. Higher earnings from innogy subsidiaries resulting
+from their inclusion, for the first time, for the entire year were
+more than offset by the absence of equity income from the stake
+in Nord Stream, which was transferred to the CTA at the end of
+2019 (see page 23), and by the low earnings contributions from
+the shareholdings in Turkey.
+Adjusted EBIT
+For the purpose of internal management control and as the most
+important indicator of businesses' long-term earnings power,
+E.ON uses earnings before interest and taxes that have been
+adjusted to exclude non-operating effects ("adjusted EBIT").
+The prior-year figure includes the operating earnings of the dis-
+continued operations in the Renewables segment prior to their
+deconsolidation on September 18, 2019.
+The core business's adjusted EBIT in 2020 rose significantly
+-by €509 million-year on year. Energy Networks' adjusted
+EBIT was €752 million above the prior-year level. The inclusion
+of innogy's operations in Germany was the principal reason.
+A lower regulated return in Sweden was the primary counter-
+vailing factor. In addition, earnings in Germany declined owing
+to milder weather and Covid-19 pandemic's repercussions.
+However, these effects will be largely offset in subsequent years.
+Substantially all of the Renewables segment was transferred to
+RWE in September 2019. Its operations that remain at E.ON
+are disclosed in other segments (see page 21). Effective 2020
+the Renewables segment therefore no longer exists.
+Corporate Functions/Other's adjusted EBIT declined by
+€47 million year on year to -€350 million, especially because
+of the inclusion of innogy's corporate functions for the entire
+reporting period. Another adverse factor was that the prior-year
+figure included earnings on the stake in Nord Stream AG, which
+was transferred to the CTA at the end of 2019.
+The E.ON Group's adjusted EBIT was €556 million above the
+prior-year figure. The increase resulted primarily from the afore-
+mentioned items in the core business and at Non-Core Business.
+PreussenElektra's adjusted EBIT was slightly higher, in particular
+because of higher sales prices, which were partially offset by
+higher expenditures for residual power output rights and a decline
+in earnings resulting from the transfer of stakes in power plants
+to RWE. By contrast, equity earnings from Enerjisa Üretim in
+Turkey declined significantly.
+Business Report
+Adjusted EBIT
+€ in millions
+Energy Networks
+Customer Solutions
+Renewables
+Corporate Functions/Other
+Consolidation
+Adjusted EBIT from core business
+Non-Core Business
+E.ON Group adjusted EBIT
+34
+Fourth quarter
+Full year
+2020
+20191
+2020
+115
+40
++188
+Net income/loss
+2020
+2019¹
+2020
+20191
+60
+-513
+1,270
+1,792
+Attributable to shareholders of E.ON SE
+15
+-551
+1,017
+1,550
+Attributable to non-controlling interests
+38
+253
+242
+Income/Loss from discontinued operations, net
+2
+696
+40
+-1,063
+Income/Loss from continuing operations
+62
+183
+1,310
+€ in millions
+Full year
+Fourth quarter
+Reconciliation to Adjusted EBIT
+413
+366
++13
+1,088
+1,012
++8
+3,776
+3,220
++17
+¹Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+E.ON generates a large portion of its adjusted EBIT in very stable
+businesses. Regulated, quasi-regulated, and long-term con-
+tracted businesses accounted for the overwhelming proportion
+of E.ON's adjusted EBIT in 2020.
+E.ON's regulated business consists of operations in which reve-
+nues are largely set by law and based on costs. The earnings on
+these revenues are therefore extremely stable and predictable.
+E.ON's quasi-regulated and long-term contracted business
+consists of operations in which earnings have a high degree of
+predictability because key determinants (price and/or volume)
+are largely set for the medium to long term. Examples include
+the operation of industrial customer solutions with long-term
+supply agreements and the operation of heating networks.
+ments.
+Merchant activities are all those that cannot be subsumed
+under either of the other two categories.
+Like net income, EBIT (earnings before interest and taxes) is
+affected by non-operating items, such as the marking to market
+of derivatives. Adjusted EBIT has been adjusted to exclude
+non-operating effects. The adjustments include net book gains,
+certain restructuring expenses, impairment charges and reversals,
+the marking to market of derivatives, the subsequent valuation
+of hidden reserves and liabilities identified as part of the purchase-
+price calculation and allocation for the innogy transaction, and
+other non-operating earnings.
+Derived from adjusted EBIT, adjusted net income is an earnings
+figure after interest income, income taxes, and non-controlling
+interests that likewise has been adjusted to exclude non-oper-
+ating effects. The adjustments include the aforementioned items
+as well as interest expense/income not affecting net income
+(in each case after taxes and non-controlling interests). Non-
+operating interest expense/income also includes effects from
+the resolution of the difference between the nominal and fair
+value of innogy bonds.
+The disclosures in the Consolidated Statements of Income are
+reconciled to the adjusted earnings metrics below.
+Reconciliation to Adjusted EBIT
+E.ON recorded net income attributable to shareholders of E.ON SE
+of €1 billion and corresponding earnings per share of €0.39. In
+the prior year E.ON recorded net income of about €1.6 billion
+and earnings per share of €0.68.
+Pursuant to IFRS 5, income/loss from discontinued operations,
+net, is reported separately in the Consolidated Statements of
+Income. In the 2020 financial year, this item includes negative
+effects from the subsequent adjustment of certain components
+of the purchase price in conjunction with the innogy acquisition
+and positive earnings from innogy's sales business in the Czech
+Republic (including deconsolidation results). The prior-year
+figure primarily includes the earnings from the discontinued
+operations at Renewables. Alongside the operating earnings
+of discontinued operations, this figure contains items resulting
+from the deconsolidation. In this context, items previously recog-
+nized in equity were recorded in income. This figure also includes
+the earnings from the transitional consolidation of Rampion
+wind farm following the reduction in E.ON's stake to 20 percent.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+35
+E.ON's tax expense on continuing operations rose from €43 mil-
+lion to €871 million. The tax rate on net income from continuing
+operations increased from 6 percent to 40 percent. The main
+reason for the high tax rate in the period under review was a
+one-off item related to the revaluation of deferred tax assets in
+the first half of 2020, which was partially offset by taxes for
+prior years. Tax-relief effects on non-operating earnings and the
+release of tax provisions and liabilities for prior years led to a
+lower tax rate in 2019.
+Financial results of -€0.7 billion were significantly below the prior-
+year level. The inclusion of innogy and the marking to market
+of securities held for trading purposes, which is disclosed in non-
+operating earnings, had an adverse effect. This could not be fully
+offset by a reduction in adverse items relating to the valuation
+of non-current provisions and income for prior years. Financial
+results also include a positive effect of €328 million resulting
+from the resolution of the difference between the nominal and
+fair value of innogy bonds (see also page 37).
+Net book gains were significantly lower than in the prior year. In
+2020 they consist primarily of deconsolidation gains in conjunc-
+tion with the fulfilment of EU conditions relating to the innogy
+transaction (see pages 21 and 22). The prior-year figure princi-
+pally reflects the deconsolidation of the Company's stake in PEGI,
+the parent company of Nord Stream. Income from the sale of
+securities was lower than in the prior year as well.
+Restructuring expenses were significantly lower than in 2019
+and, as in the prior year, consisted primarily of expenditures in
+conjunction with the integration of innogy. The 2020 figure also
+includes restructuring expenditures for the U.K. retail business.
+The marking to market of derivatives in the 2020 financial
+year resulted in a positive effect of €1,128 million (prior year:
+-€630 million). Positive items in 2020 resulted primarily from
+hedging against price fluctuations, in particular at Customer
+Solutions and at Corporate Functions/Other due to the central
+energy procurement entities, which are reported at the latter
+(see page 23).
+Reconciliation to Adjusted Earnings Metrics
+Other Line Items from the Consolidated Statements of Income
+Own work capitalized of €680 million was 40 percent above
+the prior-year figure of €487 million. The increase is mainly
+attributable to the inclusion of innogy for the entire year for the
+first time. Own work capitalized consisted predominantly of
+ongoing and completed IT projects as well as network invest-
+33
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Disclosure of the 20-percent stake in Rampion offshore
+wind farm as an asset held for sale
+•
+• Disposal of innogy's sales business in the Czech Republic
+Disposal of the heating electricity business in Germany
+Disposal of E.ON's non-regulated commercial electricity
+end-customer business in Hungary
+Acquisition of a 49-percent stake in VSE Holding
+Accounting of innogy acquisition concluded
+•
+Acquisitions, Disposals, and Discontinued Operations in 2020
+In 2020 E.ON executed the following significant transactions and
+made the following reclassifications pursuant to IFRS 5. Note 5
+to the Consolidated Financial Statements contains detailed infor-
+mation about them:
+Cash provided by operating activities of continuing and discon-
+tinued operations of €5.3 billion was considerably above the
+prior-year level (€3 billion). The inclusion of the innogy Group
+for the entire year was the principal reason.
+Cash-effective investments of €4.2 billion were significantly
+below the prior-year figure of €5.5 billion and the €4.5 billion
+forecast for 2020 in the E.ON 2019 Annual Report. This deviation
+from the original forecast is attributable to subsequent purchase-
+price reductions in conjunction with the innogy acquisition. These
+payments for E.ON's account reduce cash-effective investments.
+Including this effect, cash-effective investments were within the
+forecast range that was adjusted in August 2020.
+32
+Business Report
+In addition, E.ON recorded a cash-conversion rate of 91 percent
+in the 2020 financial year. Cash-conversion rate is equal to
+operating cash flow before interest and taxes (€5.9 billion)
+divided by adjusted EBITDA (€6.9 billion), without factoring
+in payments for the dismantling of nuclear power stations
+(roughly -€0.4 billion). E.ON continues to expect to achieve an
+average cash-conversion rate of 95 percent for the 2020 to
+2022 financial years.
+Adjusted EBIT for the E.ON Group of about €3.8 billion was
+about €0.6 billion above the prior-year level and thus below the
+forecast range of €3.9 to €4.1 billion. Adjusted net income of
+€1.6 billion was slightly above the prior-year level and thus like-
+wise below the forecast range of €1.7 to €1.9 billion. Earnings
+per share, which are based on adjusted net income, amounted to
+€0.63 in the reporting period (prior year: €0.67). These results
+are principally attributable to the Covid-19 pandemic's economic
+repercussions. Adjusted EBIT and adjusted net income are both
+within the forecast ranges that were adjusted in August 2020.
+Sales of €60.9 billion were €19.7 billion above the prior-year
+figure. The increase resulted largely from the inclusion of the
+innogy Group for the entire year.
+The 2020 financial year was shaped by the Covid-19 pandemic.
+Factoring in countermeasures, the impact of the Covid-19 pan-
+demic adversely affected the Group's 2020 earnings by a figure
+in the low to mid three-digit million euro range. These effects
+occurred mainly at the U.K. sales business and the network
+business in Germany. They consist primarily of lower sales and
+an increase in other operating expenses. Despite these challenges,
+E.ON's operating business delivered a solid performance.
+Business Performance
+Romania's economy too was adversely affected by the Covid-19
+pandemic. The government and state agencies responded, for
+example, by awarding subsidies to small and medium-sized enter-
+prises. In 2020 Romania's parliament passed two amendments
+to the Energy Law that have implications for the activities of
+distribution system operators. These include the obligation to
+connect customers and to speed up the grid-connection process.
+The gas market was liberalized effective July 1, 2020 (which
+affects wholesale and retail prices). This was followed by the
+liberalization of the electricity market effective January 2021.
+The government unveiled a new energy strategy in November
+2020 but had not yet adopted it by the time of this report's
+preparation.
+In March 2020 a new government was formed in Slovenia under
+Prime Minister Janez Janša after the previous prime minister
+and government resigned in January 2020. In October the gov-
+ernment presented a draft for a new Electricity Supply Act to
+transpose the EU electricity market directives into national law.
+This was followed in November by draft legislation to promote
+renewable energy. Neither draft was enacted by the end of 2020,
+and the consultations had not been completed at the time of
+this report's preparation.
+Croatia is expected to amend legislation relating to energy effi-
+ciency and renewable energy in 2021. Important developments
+in the energy sector relate to the gas market: an LNG terminal
+became operational on January 1, 2021, and in April 2021 the
+residential gas market is supposed to be opened to competition.
+In view of the Covid-19 countermeasures, Poland postponed the
+imposition of consumer fees, which were to be part of the estab-
+lishment of a capacity market, from October 2020 to January
+2021. During 2020 Poland's government adopted a number of
+what it called Covid-19 safeguards, including tax exemptions
+and the granting of microcredit and loans to businesses. In Sep-
+tember the government and miners' unions reached a tentative
+agreement to close the country's coal mines by 2049.
+31
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+Hungary's government and parliament adopted and reaffirmed
+climate and energy strategies and plans with targets for 2030 and
+2050. These include phasing out coal production by 2030 and
+achieving climate neutrality in 2050. The start of the regulatory
+period for energy networks, originally scheduled for January 1,
+2021, was postponed until March 31, 2021. The government
+continues to foresee the introduction of smart meters and a
+plan for the mandatory implementation of energy-saving and
+energy-efficiency measures.
+The Covid-19 pandemic considerably weakened the Czech
+economy. The introduction of a new energy law was announced
+but is not expected to take effect until January 2023. The gov-
+erning party's goal remains to support the completion of a
+nuclear power plant that will secure the country's energy supply
+over the long term.
+East-Central Europe
+Disclosure of both E.ON ETI and ÉMÁSZ DSO as a disposal
+group
+•
+Disposal of real estate assets.
+4,970
+5,252
++/-%
+2019
+2020
++1-%
+2019
+2020
+Full year
+Fourth quarter
+E.ON Group
+Consolidation
+Corporate Functions/Other
+The government, which was formed at the start of 2019, created
+the Swedish Climate Policy Council, consisting of eight ministers
+and chaired by the prime minister. The council's purpose is to
+ensure that Sweden becomes the first country to stop using fossil
+fuels. The Ministry of the Environment and Energy is currently
+working on an electrification strategy. The Ministry of Infrastruc-
+ture established an electrification committee for the transport
+sector, which will be active until the end of 2022. In April 2020
+a waste-incineration tax took effect; its purpose is to increase
+revenues from environmental taxes. In addition, the formation
+of a parliamentary majority continues with regard to certain
+aspects of electricity grid regulation.
+Non-Core Business
+Customer Solutions
+Energy Networks
+€ in millions
+Sales¹,2
+Cash provided by investing activities of continuing operations
+included cash-effective disposal proceeds totaling €2.8 billion
+in 2020 (prior year: €0.3 billion).
+Sales recorded at Corporate Functions/Other of €2.7 billion
+were €1.9 billion above the prior-year figure. The increase is
+mainly attributable to in-house services performed for innogy
+companies and to E.ON Energy Markets and innogy Commod-
+ities GmbH (see page 24), the Company's entities for energy
+procurement, which are reported at this segment.
+Sales at Non-Core Business increased significantly year on year,
+in particular because Preussen Elektra benefitted from higher
+sales prices. This was partially offset by a decline in sales
+resulting from the transfer of stakes in power stations to RWE
+in September 2019.
+Substantially all of the Renewables segment was transferred to
+RWE in September 2019. Its operations that remain at E.ON
+are disclosed in other segments (see page 21). Effective 2020
+the Renewables segment therefore no longer exists.
+Customer Solutions' sales rose by €16.5 billion to €48.3 billion.
+This increase likewise resulted mainly from the inclusion of
+innogy, in particular in Germany (+€9.6 billion), the United King-
+dom (+€4.5 billion), and the Netherlands/Belgium (+€2 billion).
+Energy Networks' sales of €18.3 billion surpassed the prior-year
+figure by €6.2 billion. This is principally attributable to the inclu-
+sion of innogy operations, primarily in Germany (+€5.4 billion).
+E.ON's sales in 2020 increased by €19.7 billion year on year to
+€60.9 billion.
+Sales
+Earnings Situation
+Renewables
+729
+The contact restrictions imposed by Sweden at the start of the
+Covid-19 pandemic were less strict than those of other countries.
+One result of this was a smaller reduction in energy demand.
+The "Milleproroghe" decree of December 30, 2019, which was
+adopted as Law No. 8 on February 28, 2020, transposed into
+national law the provisions of the EU Renewable Energy Direc-
+tive Il aimed at promoting the use of renewable energy. The
+degree also postponed the liberalization of Italy's energy market.
++52
+948
+360
+308
++17
+1,388
+1,174
++18
+1,749
+300
++483
+2,702
+784
++245
+-3,727
+-2,537
+-9,772
+-5,514
+17,630
+17,886
+-1
+60,944
+41,284
++48
+¹Includes the discontinued operations in the Renewables segment until September 18, 2019. Sales from continuing operations amounted to €40.8 billion in 2019.
+2Adjustment of prior-year figures in the context of "failed-own-use"-accounting with no impact on earnings.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+31,794
+48,342
+-6
+14,845
+The Italian central government responded to the outbreak of
+the Covid-19 pandemic by issuing numerous decrees aimed
+at mitigating financial repercussions (such as from business
+closures) for companies and households. The measures included
+a temporary disconnection ban for insolvent electricity customers
+with low consumption.
+Italy
+Numerous government support measures, including tax breaks
+and loan guarantees for companies, limited the Covid-19 pan-
+demic's impact on the Dutch economy. The Netherlands' main
+energy policy issue of 2020 was the implementation of the cli-
+mate agreement (Dutch: "Klimaatakkoord") adopted in 2019.
+The agreement consists of a set of measures to make the Nether-
+lands more sustainable by 2030 (target: a 49-percent reduction
+in carbon emissions). It encompasses the expansion of renew-
+ables, the phaseout of fossil energy production, and a more sus-
+tainable approach to the environment. The measures include
+building insulation and the use of gases made from renewable
+sources. The Energy Act and the Heat Act, which are to establish
+the rules for the country's future energy supply, were still being
+drafted at the time of this report's preparation and are not
+expected to be completed before the election of members of
+the second chamber, which is planned for the second half of
+March 2021.
+Netherlands/Belgium
+Nevertheless, combating climate change remains a high priority
+for the British government. In March 2020, for example, it
+announced subsidies for low-carbon heating systems and for the
+decarbonization of district heating networks. Up to £3 billion in
+investments are planned for 2020 and 2021 under green stim-
+ulus plans called the Green Homes Grant and the Public Sector
+Decarbonization Program. In November 2020 the Prime Minister
+published a Ten-Point Plan for a Green Industrial Revolution,
+which includes the installation of 600,000 heat pumps per year
+from 2028 onward and a ban on the sale of new gasoline and
+diesel cars from 2030 onward. The United Kingdom also adopted
+an ambitious 68 percent emissions reduction target for 2030.
+The retail price cap introduced by the U.K. government is expected
+to be reviewed by Ofgem, the U.K. energy regulator, in the second
+half of 2021. The final decision on the price cap rests with the
+government.
+30
+30
+Business Report
+The United Kingdom exited the European Union effective Feb-
+ruary 1, 2020. Effective the close of December 31, 2020, it is
+no longer part of the EU's single market. This will not have a
+significant impact on E.ON's business in the United Kingdom.
+The Brexit debate dominated Britain's political agenda, as did
+the Covid-19 pandemic, which resulted in the U.K. economy
+contracting by around 11 percent in 2020.
+United Kingdom
+On September 29, 2020, the Federal Constitutional Court issued
+a ruling: the judges of the First Senate called on lawmakers to
+make the compensation mechanism for the nuclear phaseout
+clear and legally robust and at the same time to regulate the
+handling of prorated residual power output rights. This could
+affect E.ON's business.
+The Renewable Energy Sources Act (German abbreviation: "EEG"),
+which was amended at the end 2020, provides details on the
+expansion and promotion of renewables. Among other things, it
+includes growth trajectories for the construction of renewables
+facilities. The amendment also contains regulations for the con-
+tinued operation of renewables facilities whose subsidies would
+have expired on January 1, 2021.
+The Coal Exit Act (German abbreviation: "KAusG") adopted in
+August 2020 provides for the phaseout of coal-fired power
+generation in Germany by 2038. It includes a coal-replacement
+bonus, which is intended to promote the conversion of newer
+power plants in particular to gas (combined heat and power).
+E.ON plans to shut down its few remaining coal-fired power
+plants as early as year-end 2030.
+Sweden
+In June 2020 the German federal government announced its
+national hydrogen strategy, which aims to develop a market
+for hydrogen produced, in particular, from renewable sources.
+Its purposes are to help Germany achieve its climate targets
+and to incentivize investment in technologies suitable for export.
+It provides roughly €7 billion in funding, which will go toward,
+among other things, installing up to 5 GW of electrolysis capacity
+by 2030. Another €2 billion is to be made available for interna-
+tional partnerships.
+The climate action program adopted by the German federal
+government at the end of 2019, which included the pricing of
+carbon emissions in the building and transport sectors, was
+amended in November 2020. The Fuel Emissions Trading Act
+(German abbreviation: "BEHG") steepened the rate of increase
+for carbon allowances in particular. The starting price will be
+€25
+per metric ton of carbon dioxide in 2021. This will gradually
+increase to €55 per metric ton in 2025. Proceeds from the BEHG
+will be used primarily to reduce the renewables surcharge.
+The German government took a number of steps during 2020 to
+mitigate the economic slump resulting from the Covid-19 pan-
+demic. For example, in March the Bundestag passed legislation
+that applied to ongoing obligations, such as electricity and gas
+supply contracts. The legislation allows residential customers
+and small businesses to suspend payments for electricity and
+gas for three months if they can demonstrate that they face eco-
+nomic hardship as a result of the Covid-19 pandemic. In early
+June 2020 the German government adopted a €130 billion
+economic stimulus package for 2020 and 2021. It reduced the
+value-added tax in the second half of 2020 and allocates funds
+to energy, climate protection, and green mobility. Beginning in
+2021, €11 billion alone will be used to stabilize the renewables
+surcharge. The federal rebate for the purchase of an electric
+vehicle was doubled, and an additional €2.5 billion is earmarked
+to support the expansion of charging infrastructure. Other aid
+measures for trade and industry were enacted amid the restric-
+tions on public life imposed in November and December 2020.
+Germany
+In December 2020 the European Parliament and EU Council
+finally agreed on the €1.82 trillion financial framework for 2021
+to 2027 and the €750 billion EU economic stimulus package. The
+latter's purpose is to help member states' economies recover from
+the repercussions of the Covid-19 pandemic. The Green Deal,
+which was unveiled at the end of 2019 and aims to reduce the
+European Union's net GHG emissions to zero, is the centerpiece
+of the EU's Covid-19 recovery package. The EU heads of state
+and government also endorsed the 55-percent reduction target.
+Germany held the EU Council Presidency in the second half of
+2020. Work focused on the fight against the Covid-19 pandemic
+and its impact, the crafting of a multiannual financial framework,
+future relations with the United Kingdom, climate protection,
+digitization, and Europe's global role.
+29
+29
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
++6
+18,284
+12,098
++51
+13,996
+Through the use of BEHG proceeds and general budget funds,
+the renewables surcharge is to be capped at 6.5 cents per kWh
+in 2021 and 6 cents per kWh in 2022.
+Income taxes
+Adjusted EBIT at Customer Solutions rose by €104 million year
+on year. The inclusion of innogy businesses, particularly in Ger-
+many and the Netherlands/Belgium, contributed to the increase.
+Adjusted EBIT also rose primarily because of significant cost
+savings in the previous E.ON business in the United Kingdom.
+These items were partially offset primarily by the negative
+earnings of innogy's U.K. operations and weather-related effects
+at the previous E.ON sales business in Germany and the United
+Kingdom. In addition, the repercussions of Covid-19 had an
+adverse impact on earnings, primarily in Germany and the United
+Kingdom.
+-311
+1,638
+1,526
+¹Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+²Deconsolidated as of September 18, 2019.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+37
+Financial Situation
+Finance Strategy
+E.ON's finance strategy focuses on capital structure. At the
+forefront of this strategy is ensuring that E.ON always has
+access to capital markets commensurate with its debt level.
+With its target capital structure E.ON aims to sustainably secure
+a strong BBB/Baa rating.
+E.ON manages its capital structure using debt factor, which
+is equal to economic net debt divided by adjusted EBITDA; it is
+therefore a dynamic debt metric. Economic net debt includes
+not only financial liabilities but also provisions for pensions and
+asset-retirement obligations.
+The low interest-rate environment continued. In some cases this
+led to negative real interest rates on asset-retirement obligations.
+As in prior years, provisions therefore exceeded the actual amount
+of asset-retirement obligations at year-end 2020 without fac-
+toring in discounting and cost-escalation effects. This limits the
+relevance of economic net debt as a key figure. E.ON wants eco-
+nomic net debt to serve as a useful key figure that aptly depicts
+E.ON's debt situation. In the case of material provisions affected
+by negative real interest rates, E.ON has therefore used the
+aforementioned actual amount of the obligations instead of the
+balance-sheet figure to calculate economic net debt since year-
+end 2016.
+Pursuant to IFRS valuation standards, innogy's financial liabili-
+ties at the time of initial consolidation were recorded at their
+fair value. This fair value is significantly higher than the original
+nominal value because interest-rate levels have declined since
+innogy's bonds were issued. The purchase-price allocation
+yielded a difference between the nominal value and the fair
+value, which results in additional liabilities of €2.1 billion at
+year-end 2020. This amount will be recorded in financial earn-
+ings as a reduction in expenditures and spread out over the
+maturity period of the respective bonds. These balance-sheet
+and earnings effects do not alter the interest and principal pay-
+ments. To manage economic net debt, E.ON continues to use
+the nominal amount of financial liabilities, which deviates from
+the figure shown in its balance sheets.
+E.ON aims to reduce its debt factor to around 5 over the medium
+term. As anticipated, the debt factor of 5.9 at year-end 2020
+was above this medium-term target. E.ON expects to achieve a
+debt factor of around 5 over the medium term, in particular by
+earnings increases in its core business and the leveraging of
+synergies identified in conjunction with the innogy transaction.
+Economic Net Debt
+Compared with the year-end 2019 figure of €38.9 billion, eco-
+nomic net debt rose by €1.8 billion to €40.7 billion.
+The increase in financial liabilities to €30.7 billion relative to
+year-end 2019 is mainly attributable to E.ON SE's issuance of
+€5 billion in bonds (see page 23). The issuance proceeds were
+used in part to finance the squeeze-out of innogy SE's minority
+shareholders and to repay, on schedule, bonds that had matured
+(innogy SE: €750 million; E.ON International Finance B.V.:
+€1.4 billion).
+E.ON's net financial position increased by -€1.1 billion relative
+to year-end 2019 to roughly -€24 billion. E.ON SE's dividend
+payout, investment expenditures, and cash compensation for
+innogy SE's minority shareholders as part of the squeeze-out
+(see page 21) were largely offset by items that included operating
+cash flow, the sales proceeds from the transfer of the (indirect)
+stake in Nord Stream AG to the CTA (see page 23), and the sales
+required under the antitrust clearance, in particular of innogy's
+sales business in the Czech Republic (see page 21).
+Despite an increase in plan assets, provisions for pensions were
+higher, due mainly to a significant reduction in actuarial interest
+rates, which led to an increase in defined benefit obligations.
+Economic Net Debt
+December 31
+€ in millions
+Liquid funds
+2020
+20191
+4,795
+349
+549
+Adjusted net income
+4
+Net interest income/loss
+-185
+-62
+-720
+-645
+Non-operating interest expense (+)/income (-)
+-57
+-231
+-358
+-33
+Reclassified businesses of Renewables2 (operating interest expense)
+-123
+Operating earnings before taxes
+3,602
+846
+2,698
+2,419
+Taxes on operating earnings
+-190
+-199
+-653
+-580
+Operating earnings attributable to non-controlling interests
+-107
+-171
+-407
+-317
+Reclassified businesses of Renewables2 (taxes and minority interests on operating earnings)
+719
+3,220
+Non-current securities
+Financial liabilities²
+FX hedging adjustment
+Net financial position
+Provisions for pensions
+2,354
+GBP
+7.2
+7.6
+USD
+0.8
+0.9
+JPY
+0.3
+0.3
+Other currencies
+0.2
+0.2
+Promissory notes
+0.0
+0.0
+Commercial paper
+0.0
+159
+3.8
+4.8
+30.7
+29.5
+Other liabilities
+Total
+¹Includes private placements.
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE and EIF's currently outstanding bonds were
+issued under a Debt Issuance Program ("DIP"). Similarly, innogy
+and innogy Finance B.V. bonds were formerly issued under the
+former innogy Group's DIP. A DIP simplifies a company's ability
+to issue debt to investors in public and private placements in
+flexible time frames. E.ON SE's DIP was last updated in March
+2020 with a total volume of €35 billion, of which about €16 bil-
+lion was utilized at year-end 2020. E.ON SE intends to renew
+the DIP in 2021.
+In addition to its DIP, E.ON has a €10 billion Commercial Paper
+("CP") program and a US$10 billion CP program, under which it
+can issue short-term notes. At year-end 2020 E.ON had no CP
+outstanding (prior year: €50 million).
+15.6
+18.4
+EUR
+24.6
+-30,720
+-28,947
+82
+-23,956
+166
+-22,825
+-8,088
+-7,201
+Asset-retirement obligations³
+-8,692
+-8,869
+Economic net debt
+-40,736
+-38,895
+1,887
+¹Certain adjustments to the preliminary accounting of the innogy acquisition, which was
+provisional until September 18, 2020, must be presented retroactively to the acquisition date.
+The prior-year figures were adjusted accordingly.
+Business Report
+38
+Funding Policy and Initiatives
+The key objective of E.ON's funding policy is for the Company to
+have access to a variety of financing sources at all times. E.ON
+achieves this objective by using different markets and debt
+instruments to maximize the diversity of its investor base. E.ON
+issues bonds with tenors that give its debt portfolio a balanced
+maturity profile. Moreover, large-volume benchmark issues
+may in some cases be combined with smaller issues, private
+placements, and/or promissory notes. Furthermore, from 2019
+onward E.ON has issued green bonds and has since established
+them in its financing mix. In the future, E.ON intends to cover
+more than 50 percent of its annual financing requirements with
+green bonds.
+At the beginning of March 2021, E.ON presented a new green
+bond framework. In addition to compliance with the ICMA Green
+Bond Principles, which until now set the standard for green
+bonds on the capital market, the new E.ON framework is one
+of the first in Europe to meet the criteria of the EU Taxonomy
+Regulation on sustainable economic activities. The EU Taxonomy
+Regulation defines which economic activity is to be classified
+as ecologically sustainable and thus sets a Europewide standard
+for sustainable investments. E.ON's green bond framework is
+geared toward sustainable projects in both Energy Networks and
+Customer Solutions.
+External funding is generally carried out by E.ON SE, and the
+funds are subsequently on-lent in the Group. In the past, external
+funding was also carried out by the Company's Dutch finance
+subsidiary, E.ON International Finance B.V. ("EIF"), under guar-
+antee of E.ON SE, and by innogy SE and innogy Finance B.V.
+under guarantee of innogy SE. As part of the process of inte-
+grating the innogy Group, E.ON harmonized the E.ON Group's
+funding structure. It offered innogy bondholders the option to
+change the debtor of their bonds to E.ON by means of consent
+solicitations or conversion offers. This offer was accepted for
+99.95 percent of the bond volume. All bonds transferred now
+have E.ON SE as debtor or guarantor (with EIF as issuer). In 2020
+E.ON paid back in full maturities of €2.2 billion. E.ON issued
+new debt totaling €5 billion (see page 23).
+Financial Liabilities
+€ in billions
+December 31
+2020
+2019
+Bonds¹
+26.9
+²Bonds issued by innogy are recorded at their nominal value. The figure shown in the
+Consolidated Balance Sheets is €2.1 billion higher (year-end 2019: €2.5 billion higher).
+³This figure is not the same as the asset-retirement obligations shown in the Consolidated
+Balance Sheets (€10,194 million at December 31, 2020; €10,571 million at December 31,
+2019). This is because economic net debt is calculated in part based on the actual amount
+of E.ON's obligations.
+3,776
+0.1
+1,088
+Restructuring expenses
+266
+640
+656
+819
+Effects from derivative financial instruments
+-798
+556
+-1,128
+630
+Impairments (+)/Reversals (-)
+473
+260
+557
+260
+Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction
+Other non-operating earnings
+328
+162
+802
+317
+453
+-142
+246
+-157
+Reclassified businesses of Renewables² (adjusted EBIT)
+300
+Adjusted EBIT
+-366
+-258
+-398
+-40
+1,012
+871
+43
+Financial results
+206
+702
+587
+Income/Loss from continuing operations before financial results and income taxes
+427
+-63
+2,883
+1,359
+Income/Loss from equity investments
+1,088
+-21
+18
+58
+EBIT
+406
+-66
+2,901
+1,417
+Non-operating adjustments
+682
+1,078
+875
+1,503
+Net book gains (-)/losses (+)
+-3
+1,012
+65
+3,220
+€ in millions
+2020
+20191
+2020
+20191
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+427
+-63
+2,883
+1,359
+-21
+-3
+18
+58
+EBIT
+406
+-66
+2,901
+1,417
+Non-operating adjustments
+682
+1,078
+875
+Reclassified businesses of Renewables² (adjusted EBIT)
+300
+3,776
+Adjusted EBIT
+Full year
+Fourth quarter
+1,503
+Non-controlling interests' share of operating earnings rose sig-
+nificantly year on year, principally because of the innogy takeover.
+Reconciliation to Adjusted Net Income
+Scheduled depreciation and amortization
+65
+745
+27
+3,102
+67
+2,006
+Impairments (+)/Reversals (-)
+Reclassified businesses of Renewables²
+(scheduled depreciation and amortization, impairment charges and reversals)
+Adjusted EBITDA
+1,939
+1,822
+6,905
+830
+5,564
+The tax rate on continuing operations was 24 percent (prior year:
+26 percent).
+271
+Interest income/expenses includes non-operating items. These
+rose by €0.3 billion year on year. The prior-year figure primarily
+reflects items from the valuation of non-current provisions. The
+current-year figure includes, in particular, amounts from the
+resolution of the difference between the nominal and fair value
+of innogy bonds as well as income for prior years. This was par-
+tially offset by valuation effects on securities held for trading
+purposes.
+Adjusted net income of €1,638 million was 7 percent above the
+prior-year figure of €1,526 million. Besides the above-described
+effects in the reconciliation to adjusted EBIT, this reconciliation
+includes following items:
+Reconciliation to Adjusted Net Income
+The decline in other operating earnings is partially attributable to
+valuation effects for repurchase obligations pursuant to IAS 32,
+non-current provisions, and realized earnings from hedging
+transactions for certain currency risks.
+21
+In the 2020 financial year, E.ON recorded impairment charges
+principally at Energy Networks in Hungary (owing mainly to the
+current restructuring of the business there; see page 23), at
+Customer Solutions in the United Kingdom (mainly for software
+in conjunction with ongoing restructuring measures), and the
+Netherlands/Belgium (in particular as part of the planned dis-
+posal of the sales business in Belgium). In the prior-year E.ON
+recorded impairment charges primarily at Customer Solutions
+in the United Kingdom (in particular because of the decision
+made at that time to restructure E.ON and innogy's U.K. sales
+business).
+2Deconsolidated effective September 18, 2019.
+36
+Business Report
+¹Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+Items resulting from the subsequent valuation of hidden reserves
+and liabilities as part of the preliminary purchase-price allocation
+until September 18, 2020, and newly recorded items resulting
+from the valuation of innogy's financial assets are disclosed sep-
+arately. The latter were fully balanced out by year-end 2020.
+98,080
+100
+95,385
+25,850
+26
+24,569
+60
+58,982
+65
+26
+100
+Business Segments
+42
+Energy Networks
+Power and Gas Passthrough
+Power and gas passthrough in Germany in 2020 rose significantly
+owing to the inclusion of innogy operations. Gas passthrough of
+the previous E.ON network business was at the prior-year level,
+Power passthrough in Sweden was almost unchanged from the
+prior year.
+Energy Passthrough
+Germany
+Sweden
+Turkey
+61,761
+Total
+2020
+Business Report
+whereas its power passthrough declined, in part because of the
+Covid-19 pandemic.
+77
+13,248
+Total assets
+Equity
+2019
+Non-current liabilities
+Current liabilities
+Total equity and liabilities
+Additional information about E.ON's asset situation is contained
+in Notes to the Consolidated Financial Statements.
+Dec. 31,
+2020
+%
+Dec. 31,
+2019
+14
+%
+79
+75,786
+19,901
+21
+22,294
+23
+95,385
+100
+98,080
+100
+9,055
+9
+75,484
+2020
+16.1
+2020
+Full year
+Power
+226.9
+144.2
+34.7
+35.5
+64.1
+46.0
+325.7
+225.7
+Line loss, station use, etc.
+7.1
+4.8
+1.1
+1.1
+3.9
+2.9
+Gas
+170.6
+118.5
+46.2
+44.5
+12.1
+216.8
+Current assets
+8.8
+68.7
+2019
+76.7
+54.3
+2019
+2020
+2019
+Billion kWh
+Fourth quarter
+Power
+64.4
+62.4
+9.5
+9.8
+17.8
+16.5
+91.7
+88.7
+Line loss, station use, etc.
+2.0
+1.9
+0.3
+0.3
+0.9
+1.0
+3.2
+3.2
+Gas
+60.6
+14.4
+Non-current assets
+Short term
+Consolidated Assets, Liabilities, and Equity
+E.ON will continue to take into account the trust of rating
+agencies, investors, and banks by means of a clear strategy and
+transparent communications and therefore holds events that
+include an annual informational meeting for its core group of
+banks.
+Investments
+The E.ON Group's cash-effective investments in 2020 were
+below the prior-year level. Factoring out the reporting-year and
+prior-year payments in conjunction with the innogy transaction
+(see commentary under Corporate Functions/Other on page 40),
+there would have been a significant increase in investments in
+the core business. The E.ON Group invested about €4.4 billion
+in property, plant, and equipment and intangible assets (prior
+year: €3.8 billion). Share investments totaled -€0.2 billion versus
+€1.7 billion in the prior year.
+Investments
+€ in millions
+2020
+2019
++/-%
+Energy Networks
+3,386
+2,384
++42
+Customer Solutions
+790
+1,008
+-22
+Renewables
+563
+Corporate Functions/Other
+-278
+1,329
+Consolidation
+-2
+1
+Long term
+Standard & Poor's
+Outlook
+Moody's
+E.ON's creditworthiness has been assessed by Standard & Poor's
+("S&P") and Moody's with long-term ratings of BBB and Baa2,
+respectively. The outlook for both ratings is stable. In both cases
+the ratings were based on the expectation that, over the near
+to medium term, E.ON will be able to maintain a debt ratio
+commensurate with these ratings. S&P's and Moody's short-
+term ratings are unchanged at A-2 and P-2, respectively.
+163.0
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+39
+99
+Maturity Profile of Bonds Issued by E.ON SE, E.ON International Finance B.V., and innogy Finance B.V.
+€ in billions
+12.0
+10.0
+8.0
+6.0
+4.0
+2.0
+At December 31, 2020
+2021
+2022
+2023
+2024
+2025
+2026
+2027
+2028
+2029+
+In conjunction with the acquisition of innogy SE, on April 6, 2018,
+E.ON originally secured a €5 billion acquisition facility, that it
+partially cancelled down to €1.75 billion in August 2018. At the
+conclusion of the squeeze-out, the facility was cancelled in
+June 2020; the facility was undrawn.
+Alongside financial liabilities, E.ON has, in the course of its busi-
+ness operations, entered into contingencies and other financial
+obligations. These include, in particular, guarantees, obligations
+from legal disputes and damage claims, as well as current and
+non-current contractual, legal, and other obligations. Notes 27,
+28, and 32 to the Consolidated Financial Statements contain
+more information about E.ON's bonds as well as liabilities, con-
+tingencies, and other commitments.
+E.ON SE Ratings
+Investments in core business
+3,896
+5,285
+Operating cash flow before interest and taxes²
+Cash provided by (used for) investing
+activities
+Cash provided by (used for) financing
+activities
+2020
+2019
+5,313
+2,965
+5,948
+4,407
+-1,864
+-5,820
+-2,624
+792
+¹From continuing and discontinued operations.
+2Excluding the innogy business in the Czech Republic reclassified in accordance with IFRS 5
+and deconsolidated on October 30, 2020.
+Cash provided by financing activities of continuing and discon-
+tinued operations of -€2.6 billion was €3.4 billion below the
+prior-year figure of +€0.8 billion, principally because of payments
+in conjunction with the compensation of innogy SE's remaining
+minority shareholders and E.ON SE's higher dividend payout
+relative to the prior year.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+41
+Asset Situation
+Total assets and liabilities of roughly €95.4 billion were
+€2.7 billion, or 3 percent, below the figure at year-end 2019.
+Non-current assets declined by €0.3 billion year on year to
+€75.5 billion. This is mainly attributable to an increase in assets
+and preliminary goodwill from the acquisition of VSE Holding.
+A reduction in financial assets, particularly companies accounted
+for using the equity method and non-current securities, had a
+countervailing effect.
+Current assets declined by €2.4 billion, or 11 percent, from
+€22.3 billion to roughly €19.9 billion. This resulted mainly from
+a decline in other operating assets and the deconsolidation of
+assets that had been reclassified as assets held for sale pursuant
+to IFRS 5: innogy's business in the Czech Republic, the heating
+electricity business in Germany, and a business in Hungary. This
+was partially offset by an increase in liquid funds.
+The equity ratio (including non-controlling interests) at year-
+end 2020 was 9 percent, which is 5 percentage points lower
+than at year-end 2019. The reduction in the equity ratio mainly
+reflects the merger squeeze-out of innogy SE's remaining minority
+shareholders (see page 21). Equity was also reduced by the
+dividend payout totaling €1.6 billion, the remeasurement of
+pension obligations, and other items not affecting net income
+recorded under other comprehensive income. By contrast, net
+income for the 2020 financial year served to increase equity.
+Non-current debt rose by €2.8 billion, or 5 percent, chiefly
+because of the development of non-current bonds and an
+increase in pension obligations.
+Current debt of €24.7 billion was 5 percent below the figure
+at year-end 2019. The reason was the deconsolidation of debt
+that had previously been reclassified pursuant to IFRS 5 at
+innogy's business in the Czech Republic, the heating electricity
+business in Germany, and a business in Hungary. The repayment
+of financial liabilities was another factor.
+Operating cash flow
+€ in millions
+Cash Flow¹
+Cash provided by investing activities of continuing and discon-
+tinued operations totaled -€1.9 billion versus -€5.8 billion in
+2019. Expenditures were recorded in the prior year for the acqui-
+sition of innogy stock, whereas in the 2020 financial year cash
+provided by investing activities benefited from a subsequent
+purchase-price payment from RWE. In addition, the payment
+received in the first quarter of 2020 for the indirect stake in
+Nord Stream AG that was transferred to the CTA in 2019, the
+sale of innogy's sales business in the Czech Republic, an advance
+payment in connection with the agreed-on sale of the stake in
+Rampion, and the sale of substantial parts of the heating electricity
+business in Germany had a positive impact on cash provided by
+investing activities.
+-26
+Baa2
+P-2
+Stable
+Non-Core Business
+275
+207
++33
+BBB
+A-2
+Stable
+E.ON Group investments
+€ in millions
+4,171
+-24
+Business Report
+40
+Energy Networks' investments increased by 42 percent year on
+year, from €2.4 billion to €3.4 billion. Investments in Germany
+rose significantly, primarily because of the inclusion of innogy
+operations. In addition, the increase reflected in particular new
+connections. Investments in new connections and maintenance
+were made in Sweden as well. Investments in East-Central
+Europe/Turkey were also above the prior-year level. The inclusion
+of innogy's operations in Hungary and Poland as well as VSE
+Holding was one of the factors.
+Customer Solutions invested €0.2 billion less than in the prior
+year. Investments in Sweden declined significantly year on year
+owing to the completion of the Högbytorp project. In addition,
+the prior-year figure included payments to acquire Coromatic,
+a leading provider of critical building infrastructure in Scandina-
+via. Investments in the United Kingdom were significantly lower
+as well, primarily because of postponed investments for smart
+meters. By contrast, the inclusion of innogy's operations in
+Germany and Poland resulted in higher investments. In addition,
+E.ON Business Solutions invested in significantly more distrib-
+uted-generation projects than in the prior year.
+After the transfer of substantially all of the Renewables segment
+to RWE in September 2019 and its remaining operations to
+other E.ON segments, effective 2020 the Renewables segment
+therefore no longer exists.
+Subsequent purchase-price reductions in conjunction with the
+innogy acquisition had a positive impact on investments recorded
+at Corporate Functions/Other in 2020. Because these payments
+are for E.ON's account, they reduce investments. The prior-year
+figure primarily reflects payments in conjunction with the public
+takeover offer and for the acquisition of additional innogy stock
+on-market.
+Investments at Non-Core Business were €68 million above the
+prior-year level. The prior-year figure reflects, in particular, pay-
+ments in conjunction with the innogy transaction recorded at
+PreussenElektra. By contrast, PreussenElektra's investments to
+acquire residual power output rights were higher than in the
+prior year.
+Cash Flow
+Cash provided by operating activities of continuing and discon-
+tinued operations before interest and taxes of €5.9 billion was
+significantly above the prior-year level (€4.4 billion). Energy Net-
+works recorded an increase of €1.9 billion year on year thanks
+to positive working capital effects at the previous E.ON network
+business and the inclusion, for the first time, of innogy's network
+operations for the entire year.
+Customer Solutions' cash flow of €0.4 billion was below the
+prior-year level, mainly due to the inclusion of innogy's operations
+in the United Kingdom and to the changes in segment reporting,
+which, for comparative purposes, were also made to the prior
+year (see page 21). The absence of Renewables' €0.2 billion con-
+tribution relative to the prior year was another factor.
+Cash provided by operating activities of continuing and dis-
+continued operations also rose because of lower tax payments
+(+€0.8 billion), whereas higher interest payments on innogy's
+debt had a negative impact (-€0.1 billion).
+5,492
+The inclusion of innogy's network business in Hungary and Poland
+and the acquisition of VSE Holding Slovakia led to a significant
+structural increase in East-Central Europe/Turkey's power pass-
+through. Gas passthrough rose slightly owing to the inclusion of
+the innogy business in Croatia. Power and gas passthrough at
+the previous E.ON network business was at the prior-year level.
+East-Central Europe/
+4.8
+United Kingdom¹
+Germany
+2019
+2020
+Gas Sales
+¹The line item "wholesale market" includes changes made retroactively.
+2Excludes E.ON Business Solutions.
+214.1
+369.0
+Netherlands/
+Belgium
+63.4
+9.6
+20.3
+46.3
+76.6
+94.8
+196.3
+Total
+75.8
+Other²
+Total
+2020
+10.6
+9.4
+5.4
+18.3
+16.5
+15.1
+14.5
+Residential and SME
+Fourth quarter
+Billion kWh
+2019
+2020
+2019
+2020
+2019
+2020
+2019
+35.4
+9.2
+100.4
+12.0
+3.8
+0.6
+2.2
+40.8
+72.5
+Sales partners
+69.8
+0.7
+98.0
+29.4
+2.3
+6.2
+18.9
+31.5
+20.3
+30.9
+28.3
+78.5
+42.1
+Customer groups
+4.9
+6.5
+8.7
+20.5
+12.7
+61.4
+Wholesale market
+178.7
+268.6
+54.3
+63.8
+4.7
+13.8
+37.6
+56.1
+82.1
+134.9
+9.1
+47.0
+52.0
+I&C
+59,911
+54,031
+Profit carryforward from the prior year
+Net income transferred to retained earnings
+Net income available for distribution
+10
+121
+300
+2,124
+Total equity and liabilities
+1,210
+18.9
+18.3
+38.7
+22.1
+37.8
+32.8
+64.8
+As in the prior year, E.ON's earnings, financial, and asset situa-
+tion in the 2020 financial year was influenced primarily by the
+agreement reached between E.ON and RWE on March 12, 2018,
+to transfer business operations and the integration of innogy.
+7
+261
+Deferred income
+11,621
+6,000
+Other expenditures and income
+-624
+-763
+Liabilities to affiliated companies
+35,683
+31,040
+Taxes
+309
+59
+Other liabilities
+467
+6,195
+Net income
+2,114
+789
+50.6
+Total
+44.3
+35.0
+0.6
+0.5
+2.5
+2.3
+36.3
+14.6
+Sales partners
+24.5
+24.4
+6.9
+6.2
+5.2
+7.6
+3.8
+2.7
+8.6
+7.9
+17.4
+I&C
+39.4
+37.0
+2.2
+1.0
+24.1
+9.1
+13.2
+11.3
+13.6
+Wholesale market
+115.9
+88.8
+16.7
+17.3
+14.6
+13.0
+24.6
+21.5
+60.0
+Customer groups
+66.8
+92.1
+25.3
+5,199
+789
+1,042
+692
+529
+2,313
+1,455
+2,182
+3,794
+3,628
+18,284
+1,913
+2,832
+1,024
+889
+9,161
+14,563
+12,098
+371
+539
+700
+2020
+Total
+Other²
+Belgium
+United Kingdom¹
+Germany
+Netherlands/
+44
+Power Sales
+This segment's power sales in 2020 increased by 154.9 billion kWh
+to 369 billion kWh. Its gas sales rose by 124.3 billion kWh to
+381.6 billion kWh. The inclusion of innogy operations for the first
+time for the entire year was the main reason.
+Power and Gas Sales Volume
+Customer Solutions
+Business Report
+¹Includes effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+2,501
+3,253
+507
+Adjusted EBIT¹
+Adjusted EBITDA¹
+Sales
+Full year
+910
+276
+240
+4,031
+4,102
+Sales
+Fourth quarter
+€ in millions
+2019
+2020
+2019
+2020
+2019
+2020
+2019
+2020
+Total
+663
+2019
+5,252
+Adjusted EBITDA¹
+907
+922
+170
+200
+145
+96
+592
+626
+Adjusted EBIT¹
+1,403
+1,461
+262
+296
+183
+137
+958
+1,028
+4,970
+Bonds
+2020
+2019
+29.9
+2.3
+3.5
+4.9
+2.2
+5.0
+3.9
+15.5
+3.3
+Wholesale market
+92.6
+71.0
+16.8
+17.4
+4.2
+4.0
+20.3
+Total
+54.9
+58.7
+30.6
+2.4
+7.6
+18.1
+22.4
+21.0
+31.5
+Residential and SME
+Full year
+108.1
+100.9
+19.1
+20.9
+9.1
+6.2
+21.2
+18.9
+16.2
+15.0
+55.4
+34.6
+26.4
+24.4
+8.2
+8.1
+2.1
+2.3
+6.5
+6.3
+9.6
+7.7
+Residential and SME
+Fourth quarter
+Billion kWh
+2019
+2020
+2019
+2020
+I&C
+2019
+6.7
+8.1
+Customer groups
+37.1
+23.0
+0.2
+2.2
+0.6
+0.6
+36.3
+20.2
+Sales partners
+29.1
+23.6
+8.4
+7.1
+2.1
+1.7
+9.1
+9.5
+Turkey
+-127
+Interest income/loss
+37.5
+45.3
+Sales partners
+57.5
+83.3
+23.3
+21.2
+6.8
+5.9
+10.1
+10.3
+18.2
+25.2
+I&C
+104.2
+141.0
+26.6
+2.5
+1.4
+1.6
+27.7
+11.7
+44.5
+Wholesale market
+203.3
+277.8
+52.6
+52.2
+15.6
+48.2
+52.1
+66.2
+83.0
+111.2
+Customer groups
+41.6
+53.5
+27.7
+13.2
+29.6
+21.6
+152
+54
+8,840
+307
+8,252 48,342
+276 1,006
+31,794
+789
+412
+32
+308
+-106
+80
+37
+91
+111
+454
+350
+-129
+1
+427
+546
+39.5
+49.1
+27.3
+40.7
+Residential and SME
+Full year
+160.2
+123.8
+290
+Full year
+Sales¹
+22,550 12,906 13,993
+Adjusted EBITDA2
+Adjusted EBIT2
+9,645
+2,959
+991
+9.7
+25.8
+24.1
+5.8
+14,845
+2,580 13,996
+2,470
+933
+940
+4,299
+3,917
+Adjusted EBITDA²
+7,033
+Sales¹
+Fourth quarter
+€ in millions
+2019
+2020
+2019
+2020
+6,669
+154
+436
+-96
+76
+39
+52
+36
+35
+-162
+-127
+377
+116
+Adjusted EBIT2
+469
+223
+96
+114
+50
+51
+-113
+2019
+2020
+2019
+2020
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+1The line item "wholesale market" includes changes made retroactively.
+2Excludes E.ON Business Solutions.
+54.0
+257.3
+381.6
+57.6
+58.0
+39.7
+74.0
+65.3
+93.9
+94.7
+155.7
+Total
+103.8
+5.0
+45
+¹Adjustment of prior-year figures in the context of "failed-own-use"-accounting with no impact on earnings.
+²Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
+accordingly.
+45
+Power sales in the United Kingdom increased to 76.6 billion kWh
+in 2020, owing in particular to the inclusion of innogy operations.
+The previous E.ON business's sales to residential and SME
+customers and I&C customers declined, mainly because of the
+Covid-19 pandemic. Gas sales in the United Kingdom rose sig-
+nificantly as well (+44 percent), primarily because of innogy
+operations. Covid-19's repercussions led to lower gas sales at
+the previous E.ON U.K. business. In addition, warmer weather
+in 2020 had an adverse impact on gas sales to residential and
+SME customers.
+2019
+2020
+Total
+Other
+Belgium
+United Kingdom
+Germany
+Netherlands/
+46
+Customer Solutions
+Business Report
+This segment's fully consolidated companies had about 40.7 mil-
+lion customers at year-end 2020, nearly at the prior-year level
+of 41.1 million. The sale of the heating electricity reduced the
+number of customers in Germany to 13.9 million (prior year:
+14.2 million). Customer numbers in the United Kingdom declined
+from 10.9 to 10.3 million amid the ongoing restructuring of the
+sales business. There were losses among power as well as gas
+customers. By contrast, the customer base grew in the Nether-
+lands/Belgium, mainly through new acquisitions; this unit had
+4.6 million customers at year-end 2020 (prior year: roughly
+4.3 million). The total number of customers in the other countries
+where this segment operates rose from 11.8 to 11.9 million,
+principally because of the successful acquisition of residential
+and SME customers in Romania.
+Customer Numbers
+Other's gas sales were 0.4 billion kWh higher. The inclusion of
+innogy operations in Hungary and Poland had a positive impact,
+whereas gas sales in nearly all other previous E.ON regions
+declined. Gas sales to residential and SME customers were
+slightly above the prior-year level. Slightly higher customer
+numbers and cold weather in Romania were the primary reasons.
+Gas sales to I&C customers decreased, principally because of
+a decline in customer numbers in Romania, the sale of the LPG
+business in Sweden in the second quarter of 2019, and deterio-
+rated market conditions in Italy and the Czech Republic due to
+Covid-19. Gas sales to the wholesale market were at the prior-
+year level. Higher reselling in Italy was offset by lower sales
+volume in Sweden.
+numbers in Romania were the principal reasons for the decline
+in power sales to I&C customers. Power sales to I&C customers
+in Sweden were higher thanks to new sales contracts. Power
+sales to sales partners increased significantly as well, mainly
+because of a new customer relationship at the previous E.ON
+sales business in Hungary. Power sales to the wholesale market
+rose, primarily because of an increase in reselling in the Czech
+Republic and Italy. This was partially offset by a decline in whole-
+sale market sales in Sweden.
+Power sales at the Other unit rose by 12.4 billion kWh, primarily
+owing to the inclusion of innogy operations in Hungary and
+Poland. Power sales in the other previous E.ON regions declined.
+Power sales to residential and SME customers were below the
+prior-year level, particularly in Italy. The impact of Covid-19 in
+the Czech Republic, Hungary, and Italy along with lower customer
+The Netherlands/Belgium unit, which consists exclusively
+of originally innogy business operations, sold 20.3 billion kWh
+of power and 74 billion kWh of gas in 2020 (prior year: 9.6 bil-
+lion kWh and 39.7 billion kWh, respectively).
+The sales business in Germany increased its power sales to
+196.3 billion kWh relative to 2019 owing primarily to the inclu-
+sion of innogy operations. On balance, the previous E.ON sales
+business in Germany sold more power as well. Power sales to
+residential and small and medium enterprise ("SME") customers
+were below the prior-year level due to the sale of the heating
+electricity business. Power sales to industrial and commercial
+("I&C") customers declined year on year, primarily because of
+changes in the customer portfolio and the repercussions of
+Covid-19. Power sales to the wholesale market were significantly
+above the prior-year level, mainly owing to reselling related to
+Covid-19 and to the optimization of the procurement portfolio.
+Gas sales of 155.7 billion kWh were 61 billion kWh above the
+prior-year level, principally because of the inclusion of innogy
+operations. The previous E.ON business's gas sales to residential
+and SME customers and to I&C customers decreased owing
+to weather factors. Gas sales to I&C customers also declined
+because of changes in the customer portfolio. The optimization
+of the procurement portfolio led to a significant increase in gas
+sales to the wholesale market.
+Sales and Adjusted EBIT
+Customer Solutions' sales of €48.3 billion in 2020 were about
+52 percent more than in the prior year. Adjusted EBIT rose by
+€104 million.
+The increase in sales in Germany is primarily attributable to the
+inclusion of innogy operations and to higher sales volume on the
+wholesale market and the passthrough of cost components at
+the previous E.ON business. The sale of the heating electricity
+business in Germany had an adverse impact. Adjusted EBIT was
+significantly higher due to the inclusion of innogy operations.
+The decline in the previous E.ON business's adjusted EBIT was
+mainly caused by Covid-19 and weather factors.
+1,174
+Business Report
+48
+2020
+Intangible assets
+46
+Property, plant, and equipment
+ཟ༐ །ཟ།ཟ།
+15
+45,688
+45,067
+Non-current assets
+45,749
+45,077
+Receivables from affiliated companies
+10,798
+Financial assets
+413
+74
+30
+3
+4
+115
+Full year
+Sales
+1,388
+1,174
+1,388
+Adjusted EBITDA
+895
+543
+30
+74
+925
+Adjusted EBIT
+383
+292
+Other receivables and assets
+648
+5,934
+1,522
+Liquid funds
+3
+Income Statement of E.ON SE (Summary)
+Total assets
+59,911
+54,031
+€ in millions
+2020
+2019
+Equity
+10,643
+9,728
+Income from equity interests
+2,405
+1,620
+Provisions
+1,236
+1,061
+4
+36
+obligations
+35
+2,646
+1,460
+Current assets
+14,092
+8,916
+E.ON SE's Earnings, Financial, and Asset
+Situation
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the Electricity and
+Gas Supply Act (Energy Industry Act).
+Balance Sheet of E.ON SE (Summary)
+€ in millions
+December 31
+2019
+10
+The change in financial assets is mainly attributable to an
+increase in loans to affiliated companies. The increase in receiv-
+ables from affiliated companies and liabilities to affiliated
+companies resulted from the assumption of innogy SE's cash
+and cash equivalents accounts.
+The change in equity mainly reflects the fact that net income
+was higher in 2020 than in the prior year. The decline in other
+liabilities resulted from the transfer of innogy SE's renewables
+business, its gas-storage business, and its stake in Austrian
+energy utility KELAG Kärntner Elektrizitäts-Aktiengesellschaft to
+RWE in 2020, which fulfilled the obligation to RWE disclosed
+in the prior year. Deferred income includes premiums from the
+transfer of non-current innogy SE bonds to E.ON SE.
+The issuance of bonds with a total nominal value of €5,000 mil-
+lion and the €1,186 million increase in liquid funds were the
+main items affecting the Company's financial situation.
+Information on treasury shares can be found in Note 20 to the
+Consolidated Financial Statements.
+Accrued expenses
+66
+Asset surplus after offsetting of benefit
+24
+112
+256
+Third parties
+Total
+Station use, line loss, etc.
+Power sales
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+2020
+Jointly owned power plants
+47
+2019
+7.4
+7.7
+0.4
+0.2
+0.4
+0.2
+PreussenElektra
+Purchases
+Owned generation
+Full year
+Sales in the United Kingdom were likewise significantly above
+the prior-year level due to the inclusion of innogy operations.
+Sales declined at the previous E.ON business, primarily owing to
+weather factors and lower consumption resulting from Covid-19.
+Adjusted EBIT was significantly lower than in the prior year.
+This is attributable to the aforementioned decline in sales at the
+previous E.ON business and the inclusion of innogy operations.
+By contrast, cost savings had a positive impact.
+Sales and adjusted EBIT in the Netherlands/Belgium were
+€3 billion and €80 million, respectively (prior year: €1 billion
+and €37 million, respectively). The year-on-year increase is
+principally attributable to the inclusion of this unit for the first
+time for the entire year.
+Other's sales rose by €588 million, principally because of the
+inclusion of innogy operations. By contrast, sales in the previous
+E.ON regions declined. Lower prices in Italy and Hungary were
+the primary reasons. Adjusted EBIT decreased by €20 million
+to €91 million, mainly because of effects resulting from the
+Covid-19 pandemic in the Czech Republic and Hungary as well as
+the inclusion of innogy's business with new customer solutions.
+This was partially offset by items that included the contribution
+from innogy operations in Poland.
+Non-Core Business
+Fully Consolidated and Attributable Generating Capacity
+As in the prior-year, PreussenElektra's fully consolidated and
+attributable generating capacity at year-end 2020 totaled
+3,828 MW and 3,319 MW, respectively.
+PreussenElektra's Power Generation
+Power procured (owned generation and purchases) in the 2020
+financial year was 2.8 billion kWh below the prior-year level.
+The year-on-year decline is primarily attributable to the transfer
+of minority stakes in Gundremmingen and Emsland nuclear
+power stations to RWE.
+Power Generation
+Billion kWh
+Fourth quarter
+Owned generation
+Purchases
+Jointly owned power plants
+Third parties
+Total
+Station use, line loss, etc.
+Power sales
+7.8
+7.9
+7.8
+7.9
+Total
+2020
+2019
+2020
+2019
+2020
+2019
+Fourth quarter
+Sales
+360
+308
+360
+Adjusted EBITDA
+253
+120
+3
+4
+Generation Turkey
+Adjusted EBIT
+PreussenElektra
+Non-Core Business
+28.4
+30.1
+1.4
+2.5
+0.9
+1.4
+1.6
+29.8
+32.6
+-0.1
+-0.1
+29.7
+32.5
+Sales and Adjusted EBIT
+Sales at Non-Core Business of €1,388 million were €214 million
+above the prior-year figure. Adjusted EBIT increased by
+€47 million to €413 million.
+PreussenElektra's sales rose year on year, mainly because of
+higher sales prices. The absence of sales from Gundremmingen
+and Emsland was a countervailing factor.
+Adjusted EBIT was significantly above the prior-year level.
+Higher sales prices were the principal factor in the significant
+increase in Preussen Elektra's adjusted EBIT. They were partially
+offset by the absence of earnings from stakes in nuclear power
+stations that had been transferred and by higher expenditures
+for residual power output rights. By contrast, equity earnings on
+E.ON's stake in Enerjisa Üretim declined significantly. Operating
+improvements were more than offset by currency-translation
+effects resulting from the weakening of the Turkish lira and by
+impairment charges on certain legacy projects.
+€ in millions
+Sweden
+2020
+East-Central Europe/
+System Length and Network Customers
+E.ON's power system in Germany was about 705,000 kilometers
+long, roughly the same as in 2019. As in the prior year, at year-
+end it had about 15.1 million connection points for power in its
+service territory. E.ON's gas system was around 104,000 kilo-
+meters long and had 1.8 million connection points, likewise
+essentially unchanged from 2019.
+The length of E.ON's power system in Sweden was roughly
+139,000 kilometers (prior year: 138,000 kilometers). The
+number of customers in the power distribution system was
+about 1.1 million (prior year: about 1 million).
+E.ON operates electricity networks in East-Central Europe/
+Turkey with a total system length of 322,000 kilometers and
+supplies about 9.7 million network customers. System length
+and the number of network customers are thus significantly
+higher than the prior-year figures of 296,000 kilometers and
+9 million. The increase is principally attributable to the acquisition
+of VSE Holding. Gas networks operated by E.ON are roughly
+48,000 kilometers long (prior year: roughly 46,000 kilometers).
+This increase is primarily attributable to the acquisition of two
+distribution system operators in Croatia, which are not material
+for the Group as a whole. The number of gas network customers
+was unchanged at around 2.6 million.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Germany
+Sales and Adjusted EBIT
+Energy Networks' sales and adjusted EBIT in 2020 were
+significantly above the prior-year level, in particular due to
+the inclusion of innogy operations.
+Sales and adjusted EBIT in Germany were €14.6 billion and
+€2.2 billion, respectively. As described above, the year-on-year
+increase is principally attributable to the inclusion of innogy
+operations. Sales at the previous E.ON network business were
+at the prior-year level. A decline in power passthrough was
+offset by non-recurring regulatory items. By contrast, adjusted
+EBIT of the previous E.ON network business declined slightly
+owing in part to mild weather and Covid-19. However, these
+effects will be largely offset in subsequent years.
+In Sweden sales and adjusted EBIT in 2020 were significantly
+below the prior-year level. Lower network fees in conjunction with
+the start of the new regulatory period constituted the primary
+reason for the decline in sales and earnings.
+Sales and adjusted EBIT in East-Central Europe/Turkey rose sig-
+nificantly, likewise because of the innogy takeover. The previous
+E.ON operations' sales and earnings were slightly higher.
+Energy Networks
+43
+3,288
+2,888
+2,840
+2,628
+2,952
+2,937
+2,913
+2,355
+2,331
+1,816
+Poland
+6,410
+2,018
+1,802
+2,003
+Other²
+3,048
+1,414
+3,009
+1,385
+2,263
+6,559
+8,104
+6,710
+2019
+Dec. 31,
+2020
+FTE3
+Dec. 31,
+2019
+Germany
+United Kingdom
+Hungary
+Romania
+Netherlands
+Czech Republic
+Sweden
+6,579
+37,798
+36,090
+36,510
+12,216
+14,368
+11,682
+13,737
+7,943
+8,129
+7,918
+Total
+38,336
+78,126
+75,953
+75,168
+Core business
+Non-Core Business
+E.ON Group
+2020
+2019
+22
+22
+44
+44
+49
+49
+33
+33
+14
+13
+32
+33
+At year-end 2020 the average member of the E.ON Group
+workforce was about 42 years old and had worked for the
+Company for 14 years.
+A total of 9,530 employees, or 12 percent of the E.ON Group
+workforce, were on a part-time schedule. Of these, 6,439, or
+68 percent, were women.
+The turnover rate resulting from voluntary terminations averaged
+3.5 percent across the organization, slightly lower than in the
+prior year (4.6 percent).
+Apprenticeships
+Corporate Functions/Other
+Customer Solutions
+Energy Networks
+Percentages
+Headcount
+Dec. 31,
+¹Figures do not include board members, managing directors, or apprentices.
+²Includes Slovakia, Italy, Philippines, USA, Denmark, and other countries.
+³Full-time equivalent.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Gender and Age Profile, Part-time Staff
+At the end of 2020, 32 percent of the Company's workforce
+were women, roughly at the prior-year level (33 percent).
+Percentages at year-end
+30 and younger
+31 to 50
+78,948
+53
+2020
+2019
+20
+20
+50
+50
+51 and older
+30
+30
+Proportion of Female Employees
+Employees by Age
+further refinement of production procedures, processes,
+and technologies
+•
+regular facility and network maintenance and inspection
+³Non-interest-bearing provisions include current provisions, such as those relating to sales and procurement market obligations. In particular, they do not include provisions for pensions or
+nuclear-waste management.
+4As a rule, weighted capital employed is the arithmetical average of capital employed at the beginning and the end of the year. To adequately portray the innogy takeover in September 2019, capital
+employed in 2019 was weighted on the basis of a number of month-end figures. This calculation reflected the following parameters:
+a) Capital employed of continuing operations at December 31, 2018: €29.4 billion (includes the discontinued operations at Renewables).
+b) Capital employed of continuing operations at June 30, 2019, projected to September 30, 2019, on the basis of net investments and depreciation charges: €32.4 billion (includes the discontinued
+operations at Renewables).
+c) Capital employed of continuing operations at October 1, 2019: €61.7 billion (includes innogy and excludes the discontinued operations at Renewables).
+d) Capital employed of continuing operations at December 31, 2019: €62.4 billion (includes innogy and excludes the businesses transferred to RWE). Due to retroactive changes in innogy's
+purchase-price allocation, this value was adjusted retrospectively.
+75 percent of the average of parameters a) and b) is factored into average capital employed, as is 25 percent of the mean of parameters c) and d).
+5Adjusted for non-operating effects; for purposes of internal management control, adjusted EBIT includes the adjusted EBIT from the operations at Renewables classified as discontinued operations
+and deconsolidated in September 2019.
+6ROCE = adjusted EBIT divided by average capital employed.
+Employees
+Integration of innogy
+Following the legal integration of the innogy Group, a major
+focus in 2020 was on the transfer of innogy employees to their
+respective E.ON target companies. These transfers were imple-
+mented on schedule at the predefined transition dates and were
+thus almost completed in 2020.
+To implement these transfers, E.ON concluded numerous
+agreements with trade unions and employee representatives at
+the collective-bargaining and company level. The negotiations
+were conducted under challenging conditions owing to the
+Covid-19 pandemic. However, E.ON's proven social partnership
+made it possible to hold constructive discussions and to find
+suitable solutions that address the interests of employees who
+will be affected by the upcoming change process. The afore-
+mentioned cooperation between the Company and employee
+representatives also made it possible to find socially responsible
+solutions for the redundancies resulting from the innogy inte-
+gration. Numerous employees made use of the jointly defined
+mechanisms for voluntarily departing the Group.
+E.ON has a long tradition of maintaining a constructive, mutually
+trusting partnership with employee representatives. This rela-
+tionship lays the foundation for a successful social partnership,
+particularly in a continually changing business environment.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+51
+People Strategy
+In 2020 E.ON also focused on the development of its new Group
+People Strategy ("GPS"), which will serve as the compass to
+guide the Company's ongoing transformation and promote its
+lasting success amid a rapidly changing world. The development
+process reflected, in particular, the innogy integration, which
+necessitated a review and modification of E.ON and innogy's
+previous people strategies. The new GPS sets four people prior-
+ities for the entire Group: Future of Work, Diversity and Inclusion,
+Sustainability, and Leadership. These priorities will guide E.ON's
+human resources activities for the next three years. The new GPS
+will be brought to life by Group-wide and unit-level people activ-
+ities, especially by means of existing Group-wide initiatives, such
+as Grow@E.ON, a competency model for the professional and
+personal development of the Company's employees and man-
+agers. GPS's implementation is flexible and modular to accom-
+modate the differences between business units.
+¹Depreciable non-current assets are included at their book value. Goodwill from acquisitions is included at acquisition cost, as long as this reflects its fair value.
+2Examples of other non-interest-bearing assets/liabilities include income tax receivables and liabilities.
+8.3%
+6.2%
+ROCE6
+67,414
+66,913
+Inventories
+1,131
+1,252
+Other non-interest-bearing assets/liabilities, including deferred income and deferred tax assets²
+Current assets
+-5,818
+-2,187
+-4,687
+935
+Diversity
+Non-interest-bearing provisions³
+-3,557
+Capital employed in continuing and discontinued operations4
+59,319
+62,421
+Annual average capital employed in continuing and discontinued operations4
+60,870
+38,678
+Adjusted EBIT5
+3,776
+3,220
+-3,408
+Going forward, diversity will remain a key element of E.ON's com-
+petitiveness. Diversity and a mutually appreciative corporate
+culture promote creativity and innovation. Diversity is also a core
+E.ON value. E.ON brings together a diverse team of people who
+differ by nationality, age, gender, religion, sexual orientation and
+identity, and/or ethnic origin and social background. E.ON specifi-
+cally fosters and utilizes diversity and creates an inclusive work
+environment. This is an important factor in business success:
+only a company that embraces diversity and knows how to ben-
+efit from it will be able to remain an attractive employer.
+In addition, a diverse workforce enables E.ON to do an even
+better job of meeting customers' specific needs and requirements.
+As far back as 2006 E.ON issued a Group Policy on Equal Oppor-
+tunity and Diversity. In late 2016 E.ON along with the SE Works
+Council of E.ON SE renewed this commitment to diversity. In
+April 2018 the E.ON Management Board, the German Group
+Works Council, and the Group representation for severely disabled
+persons signed the Shared Understanding of Implementing
+Inclusion at E.ON, creating an important foundation for integrating
+people with disabilities into the organization.
+In 2008 E.ON publicly affirmed its commitment to fairness and
+respect by signing the German Diversity Charter, which now has
+about 3,500 signatories. E.ON therefore belongs to a large net-
+work of companies committed to diversity, tolerance, fairness,
+and respect. E.ON assumed innogy's membership in the German
+Diversity Charter and has thus been an active member since 2020.
+E.ON Group
+1,870
+78,126
+1,878
+78,948
+-1
+¹Does not include board members, managing directors, or apprentices.
+The increase in Energy Networks' headcount is chiefly attributable
+to the acquisition of VSEH in Slovakia. The filling of vacancies to
+expand the business and to meet regulatory requirements (in
+Germany, predominantly with apprentices who had successfully
+completed their training), the reintegration of certain IT functions,
+and other structural effects also contributed to the increase.
+The transfer of employees to Customer Solutions was a counter-
+vailing factor.
+The decline in the number of employees at Customer Solutions
+mainly reflects restructuring projects, principally in the United
+Kingdom. This was partially offset by acquisitions in the Nether-
+lands and elsewhere as well as the transfer of employees from
+Corporate Functions/Other and Energy Networks.
+The number of employees at Corporate Functions/Other declined
+significantly owing primarily to structural effects, such as the
+transfer of employees to other segments, in part because of the
+separation of innogy SE into subcompanies and their transfer
+to the operating segments, as well as the restructuring of IT
+functions. The sale of a company in Poland was another factor.
+Non-Core Business
+Geographic Profile
+Employees by Country¹
+Dec. 31,
+2020
+Should an accident occur despite the measures taken, E.ON has
+a reasonable level of insurance coverage.
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+•
+•
+quality management, control, and assurance
+•
+company guidelines as well as work and process instructions
+E.ON continues to place great emphasis on vocational training
+for young people. The E.ON Group had 2,395 apprentices and
+work-study students in Germany at year-end 2020. As in the
+prior year, this represented 6 percent of E.ON's total workforce
+in Germany.
+At year-end, 40,328 employees, or 52 percent of all employees,
+were working outside Germany, almost unchanged from year-
+end 2019 (51 percent).
+•
+-1
+5,218
+77,070
+E.ON's approach to promoting diversity is holistic, encompassing
+all dimensions of diversity. In 2020 the Company again imple-
+mented numerous measures to promote diversity at E.ON.
+Fostering female managers' career development remains an
+important dimension. E.ON set an ambitious target to increase
+the proportion of women in management positions. Over the
+long term, E.ON wants the proportion of women in management
+positions Group-wide to be roughly the same as the proportion
+of women in its overall workforce. At year-end 2020, 32 percent
+of E.ON employees were women. E.ON will increase the propor-
+tion of women in its talent pool accordingly.
+Support mechanisms that address employees' differing needs
+have for years been firmly established at the E.ON Group.
+Examples include mentorship programs for next-generation
+managers, coaching, training to prevent unconscious bias,
+support for childcare, and flexible work schedules.
+Also, E.ON is continuing innogy's membership in Initiative
+Women into Leadership ("IWIL"), a non-profit initiative based
+in Germany. innogy was one of IWIL's founding members. The
+initiative's purpose is to recruit outstanding personalities from
+various social spheres-including business, culture, the media,
+and science-to serve as mentors to support highly qualified and
+successful women on their way to the top.
+More information about E.ON's compliance with Germany's Law
+for the Equal Participation of Women and Men in Leadership
+Positions in the Private Sector and the Public Sector can be found
+in the Corporate Governance Declaration on pages 70 to 79.
+Business Report
+52
+Workforce Figures
+At year-end 2020 the E.ON Group had 78,126 employees world-
+wide, almost unchanged (-1 percent) from year-end 2019.
+E.ON also had 2,494 apprentices and 231 board members and
+managing directors worldwide.
+Employees¹
+Headcount
++1-%
++5
+-5
+-23
+December 31
+Energy Networks
+40,764
+2019
+38,814
+Customer Solutions
+31,463
+33,038
+Corporate Functions/Other
+4,029
+Core business
+76,256
+2020
+Apprentices in Germany
+2,930
+Energy Networks
+Consolidate
+Identify,
+Evaluate
+and
+Manage
+57
+Internal Audit
+Objective
+E.ON's Enterprise Risk Management ("ERM") provides the
+management of all units as well as the E.ON Group with a fair
+and realistic view of the risks and chances resulting from their
+planned business activities. It provides:
+•
+•
+meaningful information about risks and chances to the busi-
+ness, thereby enabling the business to derive individual
+risks/chances as well as aggregate risk profiles within the
+time horizon of the medium-term plan (three years)
+transparency on risk exposures in compliance with legal
+requirements including KonTraG, BilMoG, and BilReG.
+E.ON'S ERM is based on a centralized governance approach
+which defines standardized processes and tools covering the
+identification, evaluation, countermeasures, monitoring, and
+reporting of risks and chances. Overall governance is provided
+by Group Risk Management on behalf of the E.ON SE Risk
+Committee.
+All risks and chances have an accountable member of the Man-
+agement Board, have a designated risk owner who remains
+operationally responsible for managing that risk/chance, and
+are identified in a dedicated bottom-up process.
+The innogy business operations acquired by E.ON are now fully
+integrated into E.ON's adequate, effective, and audited compre-
+hensive framework for managing chances and risks.
+Risks and Chances Report
+58
+Scope
+E.ON's risk management system in the broader sense has a
+total of four components:
+•
+•
+an internal monitoring system
+a management information system
+Govern
+and
+preventive measures
+Steer
+Corporate
+Functions
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Risks and Chances Report
+Enterprise Risk Management System in the
+Narrow Sense
+Group
+Decision-Making
+Bodies
+Group
+E.ON SE
+Management
+E.ON SE
+Supervisory
+Risk
+At year-end
+Committee
+Board
+Board
+Audit and Risk
+Committee
+Central Enterprise Risk Management
+Units and
+Departments
+Customer
+Solutions
+Energy
+Networks
+Non-Core
+Business
+Local Risk Committees
+the ERM, which is a risk management system in the narrow
+sense.
+The purpose of the internal monitoring system is to ensure the
+proper functioning of business processes. It consists of organi-
+zational preventive measures (such as policies and work
+instructions) and internal controls and audits (particularly by
+Internal Audit).
+ROCE decreased from 8.3 percent in 2019, to 6.2 percent in
+2020 owing mainly to the increase in average capital employed.
+The primary reasons are the inclusion of the innogy Group's
+assets for the first time for the entire year (including goodwill
+from the purchase-price allocation) and the innogy Group's debt.
+ROCE Performance in 2020
+50
+50
+Business Report
+Annual average capital employed does not include the marking
+to market of other share investments and derivatives. The
+purpose of excluding these items is to provide us with a more
+consistent picture of E.ON's ROCE performance.
+Significant changes to E.ON's portfolio during the course of the
+year were factored into average capital employed. Consequently,
+the innogy Group's assets and debt relevant for capital employed
+were included effective the end of September 2019. The com-
+ponents of capital employed attributable to the discontinued
+operations at Renewables transferred to RWE were included
+until the end of September 2019 (footnote 4 of the ROCE table
+below contains more information).
+Annual average capital employed represents the interest-bearing
+capital invested in E.ON's operating business. It is calculated
+by subtracting non-interest-bearing available capital from non-
+current and current operating assets. Depreciable non-current
+assets are included at their book value. Goodwill from acquisitions
+is included at acquisition cost, as long as this reflects its fair
+value. In order to better depict intraperiod fluctuations in average
+capital employed, annual average capital employed is calculated
+as the arithmetic average of the amounts at the beginning of the
+year and the end of the year.
+ROCE is a pretax total return on capital and is defined as the
+ratio of adjusted EBIT to annual average capital employed.
+ROCE
+Other Financial and Non-financial Performance
+Indicators
+The complete Financial Statements of E.ON SE, with an unqual-
+ified opinion issued by the auditor, PricewaterhouseCoopers
+GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, will be
+announced in the Bundesanzeiger. The Financial Statements of
+E.ON SE are available on the internet at www.eon.com.
+The E.ON SE Management Board has decided on a dividend
+policy that foresees annual growth in the dividend per share of
+up to 5 percent through the dividend for the 2023 financial
+year. E.ON will aim for an annual increase in dividend per share
+after this as well.
+At the Annual Shareholders Meeting in 2021, the Management
+Board will propose that net income available for distribution
+be used to pay a dividend of €0.47 per ordinary share and the
+remaining amount of €899 million to be brought forward as
+retained earnings. Management's proposal for the use of net
+income available for distribution is based on the number of ordi-
+nary shares on March 15, 2021, the date the Financial State-
+ments of E.ON SE were prepared.
+In the year under review, on balance the Company's income taxes
+yielded tax income of €309 million, which encompasses the
+year under review as well as prior years. Applying the minimum
+tax rate resulted in corporate taxes and solidarity surcharges
+totaling about €2 million in 2020. The Company did not record
+expenditures for trade taxes. For previous years the Company
+recorded tax income of €311 million.
+The improvement in net interest income mainly reflects tax-
+related interest income. The negative balance of other income
+and expenses in 2020 resulted from €209 million in expenses
+for purchased third-party services, €153 million in personnel-
+related expenses, €131 million in consulting services and
+€128 million in net expenses from currency hedging. The final
+settlement of the overall transaction with RWE resulted in a total
+expense of €97 million at E.ON SE after internal passthrough.
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings situation is affected by income from equity interests.
+The increase in income from equity interests reflects, in partic-
+ular, profit transfers of €3,384 million from E.ON Beteiligungen
+GmbH and €267 million from E.ON Finanzanlagen GmbH. The
+profit transfer from E.ON Beteiligungen GmbH includes the
+gain of €2,821 million from the merger of innogy SE into E.ON
+Verwaltungs SE (which now does business as innogy SE). How-
+ever, this gain was almost entirely offset by impairment charges
+on equity interests recorded at innogy SE. Income from equity
+interests was adversely affected primarily by expenditures from
+loss transfers of €1,282 million. These were mainly attributable
+to a subsidiary that recorded significant impairment charges on
+equity interests in affiliated companies.
+49
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+innogy operations are fully included in capital employed, whereas
+the synergies associated with the transaction will only emerge
+over time. E.ON therefore assumes that ROCE will increase in
+the future.
+The table below shows the E.ON Group's ROCE and its derivation.
+ROCE
+€ in millions
+The E.ON internal management information system identifies
+risks early so that steps can be taken to actively address them.
+Reporting by the Controlling, Finance, and Accounting depart-
+ments as well as Internal Audit reports are of particular impor-
+tance in early risk detection.
+General Measures to Limit Risks
+E.ON takes the following general preventive measures to limit
+risks.
+Managing Operational and IT Risks
+To limit operational and IT risks, E.ON continually improves
+its network management and the optimal asset dispatch of its
+assets. At the same time, E.ON implements operational and
+infrastructure improvements that will enhance the reliability of
+its generation assets and distribution networks, even under
+extraordinarily adverse conditions. In addition, E.ON has factored
+the operational and financial effects of environmental risks into
+its emergency plan. They are part of a catalog of crisis and sys-
+tem-failure scenarios prepared for the Group by the Incident and
+Crisis Management team.
+E.ON IT systems are maintained and optimized by qualified E.ON
+Group experts, outside experts, and a wide range of technologi-
+cal security measures. In addition, the E.ON Group has in place
+a range of technological and organizational measures to counter
+the risk of unauthorized access to data, the misuse of data, and
+data loss.
+Managing Health, Safety, and Environmental ("HSE"), Human
+Resources ("HR"), and Other Risks
+The following are among the comprehensive measures E.ON
+takes to address such risks (also in conjunction with operational
+and IT risks):
+•
+systematic employee training, advanced training, and quali-
+fication programs for employees
+Report of the Supervisory Board
+Strategy and Objectives
+Managing Legal and Regulatory Risks
+E.ON attempts to minimize the operational risks of legal
+proceedings and ongoing planning processes by managing
+them appropriately and by designing appropriate contracts
+beforehand.
+•
+Non-current assets
+6,963
+6,266
+59,950
+61,148
+Property, plant, and equipment, right-of-use assets, intangible assets, and goodwill¹
+Shares in affiliated and associated companies and other share investments
+20194
+2020
+E.ON engages in intensive and constructive dialog with govern-
+ment agencies and policymakers in order to manage the risks
+resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, the Company strives to conduct
+proper project management so as to identify early and minimize
+the risks attending new-build projects.
+Risks and Chances Report
+2,286
+Customer Solutions' investments will mainly go toward the heat
+business and solutions for industrial and commercial customers
+in Sweden, Germany, and the United Kingdom. E.ON will also
+invest in IT, metering and upgrade projects, and integrated
+energy solutions.
+Macroeconomic Situation
+Business Environment
+Percentages
+Forecast Report
+54
+Forecast Report
+6.0
+6.0
+56
+E.ON expects Energy Networks' earnings to be temporarily lower
+in 2021, mainly because of temporarily higher expenditures at
+the networks in Germany. Declining earnings in Hungary due
+to planned business disposals will continue to have an adverse
+impact. Also, new regulatory periods start in the Czech Republic,
+Hungary, and Turkey. The low interest-rate environment affects
+regulatory rates of return, but this will largely be offset by changes
+in the respective regulatory schemes and good operating results.
+The business in Slovakia acquired from RWE at year-end 2020
+will make a positive, full-year contribution. In addition, the net-
+work business will continue to benefit from additional investments
+in its regulated asset base.
+Despite the availability of vaccines and countries' various vacci-
+nation strategies, the Covid-19 pandemic seems unlikely to end
+in the near future. For the time being, therefore, the current
+phase of economic weakness can be expected to continue. This
+applies to the energy industry as well. For example, electricity
+consumption declined in 2020. Compared with other industries,
+however, the economic repercussions in the energy sector were
+marginal.
+Customer Solutions' earnings will be significantly above the
+prior-year level. The Company expects a positive performance in
+all of this segment's markets, especially through the leveraging
+of synergies. In particular, the ongoing restructuring in the
+United Kingdom will serve to increase earnings. In addition, E.ON
+assumes that the earnings decline in 2020 as a result of the
+Covid-19 pandemic-in particular due to resales and lower sales
+volumes, especially to industrial customers-will largely dis-
+appear in the 2021 financial year. The underlying operating
+business will perform according to plan as well. The anticipated
+improvement in customer numbers and margins in the cus-
+tomer solutions business in Germany is particularly noteworthy.
+Non-Core Business's earnings will be below the prior-year level.
+Higher costs to procure for residual power output rights and
+slightly lower sales prices will reduce earnings.
+Anticipated Financial Situation
+2,456
+2,395
+2.1
+2.0
+40
+39
+6.2
+6.2
+The plan calls for earnings at Corporate Functions/Other to be
+above the prior-year figure. The implementation of planned
+synergies will have a positive impact.
+2,416
+The pandemic's barely predictable course makes precise eco-
+nomic forecasts almost impossible. In addition, forecasts must
+be assessed in temporal relation to the pandemic's course.
+For example, in September 2020 (when infection rates were
+relatively low) the ifo institute predicted that Germany would
+achieve GDP growth of 5.1 percent in 2021. In December, amid
+a renewed lockdown, it revised its growth forecast for 2021 to
+4.2 percent.
+The European Commission's autumn economic forecast
+published in November 2020 predicted that the EU's GDP will
+shrink by 7.4 percent in 2020. In February 2021 the Commission
+forecast euro zone GDP growth of 3.8 percent for both 2021
+and 2022. Furthermore, the EU as a whole is expected to grow by
+3.7 percent in 2021 and 3.9 percent in 2022. The EU economy
+is expected to reach its pre-crisis level from 2019 (EU28 GDP:
+€13.94 trillion) by mid-2022, resulting mainly from increased
+growth in the second half of 2021 and in 2022. The International
+Monetary Fund expects global GDP growth of 5.5 percent in
+2021.
+about -0.3
+Forecast Report
+0.8 to 1.0
+2.9 to 3.1
+2021 (forecast)
+¹Adjusted for non-operating effects.
+E.ON Group
+Corporate Functions/Other
+Non-Core Business
+€ in billions
+Energy Networks
+Customer Solutions
+Adjusted EBIT¹
+The German Council of Economic Experts' annual report,
+published in December 2020, forecasts tepid economic growth
+of around 0.5 percent in the first months of 2021. For the
+remainder of the year, it expects Germany's economy to grow
+by 3.7 percent. Germany's GDP for 2021 would thus be just
+below the pre-crisis level of 2019 (GDP 2019: €3.44 trillion).
+Forecast by segment:
+Forecast Earnings Performance
+Anticipated Earnings Situation
+E.ON needs to achieve these objectives and implement these
+measures in a challenging economic environment. Low interest
+rates and keen competition for networks and customers are
+part of E.ON's daily business. Uncertainty remains regarding the
+future course of the Covid-19 pandemic and its economic impact.
+Although the energy industry and E.ON have proven resilient,
+there may be additional financial consequences depending on
+how the pandemic progresses. For example, the demand for
+electricity and gas could affect sales volume and prices, while
+there could be implications from customers and enterprise
+partners' reduced ability to pay.
+Another focus following the innogy takeover will be on con-
+tinuing to leverage synergies of around €740 million annually
+from the end of 2022 onward. E.ON will also further articulate
+its sustainability strategy. Combining all of E.ON's U.K. sales
+businesses in a new company, E.ON Next, will continue in 2021
+as well. The new company will have state-of-the-art processes
+and an agile IT platform. The transfer of energy customers in
+Germany to a new digital platform will continue throughout 2021.
+This segment remains committed to its IT and digital agenda.
+This agenda's special significance was underscored by the
+appointment of Victoria Ossadnik to the E.ON Management Board
+effective April 1, 2021. She will be responsible for the Group's
+digitalization. The focus will be on developing advanced, power-
+ful support systems and continually safeguarding of E.ON's IT
+systems against cyberattacks. Energy Networks will make
+significant IT investments in 2021 to meet customers' different
+demands and to continually make E.ON's networks-the back-
+bone of the energy transition across Europe-more advanced
+and smarter.
+55
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Combined Group Management Report
+Report of the Supervisory Board
+Strategy and Objectives
+The integration of innogy successfully completed the E.ON
+Group's restructuring. Nevertheless, the next few years will
+reflect the new E.ON's ongoing efforts to build on this foundation
+to propel Europe's energy transition in the digital age. From
+April 2021 onward, Leonhard Birnbaum will become E.ON's new
+CEO and oversee the continuation of its strategy. The smooth
+transition at the top of the Company sets the stage for a seam-
+less implementation of operating tasks. The focus will be on
+expanding E.ON's business segments in order to generate addi-
+tional growth. Europe's economic stimulus packages give E.ON
+additional support. Around €60 billion of funding is earmarked
+for climate projects across E.ON's markets. These projects will
+promote decarbonization and thus the achievement of the EU's
+climate targets.
+General Statement of E.ON's Future
+Development
+Despite the ongoing pandemic, E.ON expects the Group's 2021
+adjusted EBIT to be between €3.8 and €4 billion and its 2021
+adjusted net income to be between €1.7 and €1.9 billion, or
+€0.65 to €0.73 per share (based on 2,607 million shares out-
+standing). In addition, the plan calls for the E.ON Group to
+achieve a cash-conversion rate of roughly 100 percent on aver-
+age for the 2021 to 2023 financial years (without factoring in
+the expenditures for the decommissioning of nuclear power
+stations). This metric will benefit significantly over the planning
+period from the Company's initiative to further optimize work-
+ing capital.
+2,356
+4.4
+5.4
+0.2 to 0.4
+Percentage of workforce
+Headcount
+E.ON provides vocational training in 28 careers and also offers
+training and practically oriented work-study programs in 35 degree
+areas in order to meet its own needs for skilled workers and to
+take targeted action to address the consequences of demographic
+change. In addition, E.ON offers young people the opportunity
+to receive training to qualify for an apprenticeship.
+Non-Core Business
+E.ON Group
+Core business
+Corporate Functions/Other
+Customer Solutions
+Planned Funding Measures
+In addition to planned investments for 2021 and the dividend
+for 2020, in 2021 E.ON will make payments for bonds that
+have matured. Over the course of the year, these payments will
+be funded with available liquid funds and the issuance of debt.
+Dividend
+The E.ON SE Management Board decided to continue the current
+dividend policy, which foresees annual growth in the dividend
+per share of up to 5 percent through the dividend for the 2023
+financial year. E.ON will aim for an annual increase in dividend
+per share after this as well.
+Planned Investments
+E.ON plans to make cash-effective investments of about
+€4.9 billion in 2021. E.ON will continue its strategy aimed at
+delivering sustainable growth. Capital allocation will of course
+continue to be selective and disciplined.
+Cash-Effective Investments: 2021 Plan
+Energy Networks
+Customer Solutions
+Corporate Functions/Other
+Non-Core Business
+Total
+€ in billions
+Non-Core Business's investments will include investments to
+acquire residual power output rights. Those at Corporate Func-
+tions/Other will encompass investments in Group-wide IT infra-
+structure and a planned payment from the innogy acquisition.
+2019
+2020
+2020
+2,098
+206
+199
+0.8
+0.8
+61
+59
+2019
+7.6
+3.3
+67
+8.0
+21
+2,149
+1.0
+Energy Networks' investments will consist in particular of
+numerous individual investments to maintain and, above all,
+to expand networks, switching equipment, and metering and
+control technology in order to continue to ensure the reliable
+and uninterrupted transmission and distribution of electricity.
+100
+3.8 to 4.0
+8
+0.4
+4
+0.2
+4.9
+⚫ through a stock exchange
+At the Management Board's discretion, the acquisition may be
+conducted:
+attributed to the Company pursuant to Sections 71a et seq. of
+the AktG must altogether at no point account for more than
+10 percent of the Company's share capital.
+Pursuant to a resolution of the Shareholders Meeting of May 28,
+2020, the Management Board is authorized, until May 27, 2025,
+to have the Company acquire treasury shares. The shares acquired
+and other treasury shares that are in possession of or to be
+Management Board's Power to Issue or Buy
+Back Shares
+•
+Best case (95th percentile)
+Major
+Medium
+to be used for the purpose of a scrip dividend where share-
+holders may choose to contribute their dividend entitlement
+to be offered, with or without consideration, for purchase
+and transferred to individuals who are or were employed by
+the Company or one of its affiliates as well as to board mem-
+bers of affiliates of the Company
+to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+to be sold and transferred against contributions in kind
+to be sold and transferred against cash consideration
+•
+•
+•
+•
+•
+to the Company in the form of a contribution in kind in
+exchange for new shares.
+With regard to treasury shares that will be, or have been, acquired
+based on the aforementioned authorization and/or prior autho-
+rizations by the Shareholders Meeting, the Management Board
+is authorized, subject to the Supervisory Board's consent and
+excluding shareholder subscription rights, to use these shares
+-in addition to a disposal through a stock exchange or an offer
+granting a subscription right to all shareholders-as follows:
+by the use of derivatives (put or call options or a combination
+of both).
+by means of a public offer or a public solicitation to submit
+offers for the exchange of liquid shares that are admitted to
+trading on an organized market, within the meaning of the
+German Securities Purchase and Takeover Law, for Company
+shares
+by means of a public offer directed at all shareholders or a
+public solicitation to submit offers
+•
+•
+Medium
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utiliza-
+tion of authorized or conditional capital.
+Low
+Low
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, in pursuit of one or more objec-
+tives by the Company and also by its affiliated companies or by
+third parties for the Company's account or one of its affiliates'
+account.
+Resolutions of the Shareholders Meeting require a majority of
+the valid votes cast unless mandatory law or the Articles of
+Association explicitly prescribe otherwise. An amendment to
+the Articles of Association requires a two-thirds majority of the
+votes cast or, in cases where at least half of the share capital is
+represented, a simple majority of the votes cast unless manda-
+tory law explicitly prescribes another type of majority.
+Shares acquired by an employee under the Company-sponsored
+employee stock purchase program are subject to a blackout
+period that begins the day ownership of such shares is trans-
+ferred to the employee and that ends on December 31 of the
+next calendar year plus one. As a rule, an employee may not sell
+such shares until the blackout period has expired. The employee
+stock purchase program was not offered in 2020.
+Pursuant to the Company's Articles of Association, the Manage-
+ment Board consists of at least two members. The Supervisory
+Board decides on the number of members as well as on their
+appointment and dismissal.
+HSE, HR, and Other Risks
+Health and occupational safety are important aspects of E.ON's
+day-to-day business. The Company's operating activities can
+therefore pose risks in these areas and create social and environ-
+mental risks and chances. In addition, E.ON's operating business
+potentially faces risks resulting from human error and employee
+turnover. It is important that E.ON act responsibly along its
+entire value chain and that we communicate consistently,
+enhance the dialog, and maintain good relationships with key
+stakeholders. E.ON actively considers environmental, social,
+and corporate-governance issues. These efforts support the
+Company's business decisions and public relations. E.ON's
+objective is to minimize reputational risks and garner public
+support so that the Company can continue to operate its busi-
+ness successfully. These matters do not result in a major risk or
+chance position.
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia
+and Bavaria. E.ON SE can be held responsible for damage. This
+could lead to major individual risks that E.ON currently only
+evaluates qualitatively.
+Market Risks
+E.ON's units operate in an international market environment that
+is characterized by general risks relating to the business cycle.
+In addition, the entry of new suppliers into the marketplace along
+with more aggressive tactics by existing market participants
+and reputational risks have created a keener competitive environ-
+ment for the Company's sales business in and outside Germany,
+which could reduce margins. However, market developments
+could also have a positive impact on E.ON's business. Such fac-
+tors include wholesale and retail price developments, customer
+churn rates, and temporary volume effects in the network busi-
+ness. This results in a major risk position and a medium chance
+position in this category.
+The demand for electric power and natural gas is seasonal, with
+E.ON's operations generally experiencing higher demand during
+the cold-weather months of October through March and lower
+demand during the warm-weather months of April through
+September. As a result of these seasonal patterns, E.ON's sales
+and results of operations are higher in the first and fourth quar-
+ters and lower in the second and third quarters. Sales and results
+of operations for all of E.ON's energy operations can be negatively
+affected by periods of unseasonably warm weather during the
+autumn and winter months. E.ON expects seasonal and weath-
+er-related fluctuations in sales and results of operations to con-
+tinue. Periods of exceptionally cold weather-very low average
+temperatures or extreme daily lows-in the fall and winter months
+can have a positive impact owing to higher demand for electricity
+and natural gas.
+E.ON's portfolio of physical assets, long-term contracts, and
+end-customer sales is exposed to uncertainty resulting from
+fluctuations in commodity prices. After the Uniper spinoff, E.ON
+established its own procurement organization for its sales busi-
+ness and ensured market access for the output of its remaining
+energy production in order to manage the remaining commodity
+risks accordingly.
+Risks and Chances Report
+64
+Strategic Risks
+E.ON's business strategy involves acquisitions and investments
+in its core business as well as disposals. This strategy depends in
+part on the ability to successfully identify, acquire, and integrate
+companies that enhance, on acceptable terms, the Company's
+energy business. In order to obtain the necessary approvals for
+acquisitions, E.ON may be required to divest other parts of its
+business or to make concessions or undertakings that affect its
+business. In addition, there can be no assurance that E.ON will
+be able to achieve the returns expected from any acquisition or
+investment. It is also possible that E.ON will not be able to realize
+its strategic ambition of enlarging its investment pipeline and
+that significant amounts of capital could be used for other oppor-
+tunities. Furthermore, investments and acquisitions in new
+geographic areas or lines of business require E.ON to become
+familiar with new sales markets and competitors and to address
+the attending business risks.
+In the case of planned disposals, E.ON faces the risk of disposals
+not taking place or being delayed and the risk that E.ON receives
+lower-than-anticipated disposal proceeds. In addition, after
+transactions close E.ON could face major liability risks resulting
+from contractual obligations.
+The overall risk and chance position in this category was not
+major at the balance-sheet date.
+Finance and Treasury Risks
+E.ON is exposed to credit risk in its operating activities and
+through the use of financial instruments. Credit risk results from
+non-delivery or partial delivery by a counterparty of the agreed
+consideration for services rendered, from total or partial failure
+to make payments owed on existing accounts receivable, and
+from replacement risks in open transactions. For example, E.ON's
+historical connection with Uniper and RWE continues to pose
+a major, albeit unlikely, risk. In addition, in unlikely cases joint
+and several liability for jointly operated power plants could lead
+to a major risk.
+E.ON's international business operations expose it to risks from
+currency fluctuation. One form of this risk is transaction risk,
+which arises when payments are made in a currency other than
+E.ON's functional currency. Another form of risk is translation
+risk, which arises when currency fluctuations lead to accounting
+effects when assets/liabilities and income/expenses of E.ON
+companies outside the euro zone are translated into euros and
+entered into E.ON's Consolidated Financial Statements. Positive
+developments in foreign-currency rates can also create chances
+for E.ON's operating business.
+E.ON faces earnings risks from financial liabilities and interest-
+rate derivatives that are based on variable interest rates and
+from asset-retirement obligations.
+Refinancing terms on debt capital markets depend in part on
+rating agencies' credit ratings. Rating agencies Moody's and S&P
+have given E.ON a strong investment-grade rating. E.ON has
+contracts that would trigger additional collateral requirements
+if certain rating levels were not met. Consequently, significant
+rating downgrades could lead to additional liquidity requirements.
+On the other hand, positive business performance or further
+debt reduction could have a positive impact on E.ON's rating.
+In addition, the price changes and other uncertainty relating to
+the current and non-current investments E.ON makes to cover
+its non-current obligations (particularly pension and asset-
+retirement obligations) could, in individual cases, be major.
+Declining or rising discount rates could lead to increased or
+reduced provisions for pensions and asset-retirement obligations,
+including non-current liabilities. This can create a high balance-
+sheet risk for E.ON.
+In principle, E.ON could also encounter tax risks and chances.
+This category's overall risk and chance position is not major.
+Management Board's Evaluation of the Risk
+and Chances Situation
+The overall risk and chances situation of the E.ON Group's oper-
+ating business at year-end 2020 improved relative to year-end
+2019 owing to legal and regulatory risks and opportunities from
+a possible agreement on the transfer of residual power output
+rights. Although the average annual risk for the E.ON Group's
+adjusted EBIT is classified as major and despite the expansion of
+its risk and chance position through the innogy transaction, from
+today's perspective E.ON does not perceive any risk profile that
+could threaten the existence of E.ON SE, the E.ON Group or
+individual segments.
+E.ON could also be subject to environmental liabilities associated
+with its power generation operations that could materially
+and adversely affect its business. In addition, new or amended
+environmental laws and regulations may result in cost increases
+for E.ON.
+Technologically complex production facilities are used in the
+production and distribution of energy, resulting in major risks
+from procurement and logistics, construction, operations and
+maintenance of assets as well as general project risks. In the
+case of PreussenElektra, this also includes dismantling activities.
+E.ON's operations in and outside Germany face major risks of
+a power failure, power-plant shutdown, and higher costs and
+additional investments resulting from unanticipated operational
+disruption or other problems. Operational failures or extended
+production stoppages of facilities or components of facilities as
+well as environmental damage could negatively impact earnings,
+affect the cost situation, and/or result in the imposition of fines.
+In unlikely cases, this could lead to a high risk. Overall, it results
+in a medium risk position and a low chance position in this cate-
+gory. General project risks can include a delay in projects and
+increased capital requirements.
+Cybersecurity and the continuous protection of IT and OT systems
+against cyberattacks is a focus area of E.ON's risk management.
+Examples include the analysis of attacks on the systems of the
+network business (which could affect the operation of E.ON's
+critical infrastructure), on the sales business (which could result
+in the loss of customer data), and on internal systems (which
+E.ON uses to control commercial processes in all its business
+segments). It is important that the operating units and the Cyber-
+security and Enterprise Risk Management divisions jointly and
+proactively evaluate and manage risks for E.ON.
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology and complex
+operation technology ("OT"). This includes risks and chances in
+conjunction with information security and the security of oper-
+ating processes in E.ON's business segments.
+Moderate
+Medium
+61
+The E.ON Group has major risk positions in the following cate-
+gories: legal and regulatory risks as well as market risks. As a
+result, the aggregate risk position of E.ON SE as a Group is major.
+In other words, the E.ON Group's average annual adjusted EBIT
+risk ought not to exceed -€200 million to -€1 billion in 95 percent
+of all cases.
+The E.ON Group's overall risk situation at the end of 2020 was
+influenced primarily by the ongoing Covid-19 pandemic. The
+main Covid-19 risk factors in the sales business are volume and
+price effects as well as credit losses. In addition, the customer
+solutions business could encounter delays in planned projects,
+while residential and business customers' demand for various
+products is declining amid economic uncertainty.
+The network business could also experience a decline in sales
+volume and credit losses which result in lower earnings. The
+difference with the network business is that volume-driven
+declines in sales will largely be recovered in subsequent years.
+In addition, PreussenElektra's business could be adversely
+affected by the introduction of a ban or a limitation of work
+contracts due to Covid-19.
+Risks and Chances by Segment
+PreussenElektra
+PreussenElektra's business is substantially influenced by regu-
+lation. In general, regulation can result in risks for its remaining
+operating and dismantling activities. One example is the
+Fukushima nuclear accident. Policy measures taken in response
+to such events could have a direct impact on the further opera-
+tion of a nuclear power plant ("NPP") or trigger liabilities and
+significant payment obligations stemming from the solidarity
+obligation agreed on among German NPP operators. Further-
+more, new regulatory requirements, such as additional manda-
+tory safety measures or delays in dismantling, could lead to
+production outages and higher costs. In addition, there may
+be lawsuits that fundamentally challenge the operation of
+NPPs. Regulation can also require an increase in provisions for
+dismantling. These factors could pose major risks for E.ON.
+On December 6, 2016, Germany's Federal Constitutional Court
+in Karlsruhe ruled that the thirteenth amended version of the
+Atomic Energy Act ("the Act") is fundamentally constitutional.
+The Act's only unconstitutional elements are that certain NPP
+Risks and Chances Report
+62
+operators will be unable to produce their electricity allotment
+from 2002 and that it contains no mechanism for compensating
+operators for investments to extend NPP operating lifetimes.
+Lawmakers established a compensation mechanism in the six-
+teenth amended version of the Act. This version did not become
+law owing to a ruling by the Federal Constitutional Court on
+September 29, 2020. Lawmakers thus remain obliged to intro-
+duce a new mechanism. In addition, NPPs need to acquire
+residual power output rights in order to operate until their closure
+dates prescribed by law. In accordance with the agreement
+published at the beginning of March 2021 between the respon-
+sible federal ministries and the four NPP operators, it is also
+provided in particular that the residual power output rights
+corresponding to the ownership stake in the joint power plants
+with Vattenfall are to be transferred free of charge to Preussen-
+Elektra and can be used for generation in the Group's own
+power plants. The effectiveness of this agreement is still sub-
+ject to legal implementation. The additional quantities required
+to operate the NPPs until the final date stipulated by the Act
+have to be purchased. These matters could yield major chances
+and major risks.
+Customer Solutions
+Internal Control System
+for the Accounting Process
+The E.ON Group's operations subject it to certain risks relating to
+legal proceedings, ongoing planning processes, and regulatory
+changes. But these risks also relate, in particular, to legal actions
+and proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of the
+energy transition) an altered business climate in the power and
+gas business, alleged price-rigging, and anticompetitive practices.
+This could pose a major risk.
+The operation of energy networks is subject to a large degree
+of government regulation. New laws and regulatory periods
+cause uncertainty for this business. In addition, matters related
+to Germany's Renewable Energy Sources Act, such as issues
+regarding solar energy, can cause temporary fluctuations in cash
+flow and adjusted EBIT. This could create major chances as well
+as pose a major risk. The rapid growth of renewables is also
+creating new risks for the network business. For example, insol-
+vencies among renewables operators or feed-in tariffs unduly
+paid by grid operators lead to court or regulatory proceedings.
+Risks and Chances by Category
+E.ON's major risks and chances by risk category are described
+below. Also described are major risks and chances stemming
+from tail events as well as qualitative risks that would impact
+adjusted EBIT by more than €200 million. Risks and chances
+that would affect planned net income and/or cash flow by more
+than €200 million are included as well.
+Legal and Regulatory Risks
+The political, legal, and regulatory environment in which the
+E.ON Group does business is a source of risks, such as the
+continued uncertainty that Brexit poses for the collaboration
+between certain E.ON business units. This could confront E.ON
+with direct and indirect consequences that could lead to possible
+financial disadvantages. New risks-but also opportunities-arise
+from energy-policy decisions at the European and national level.
+Foremost among them are the European Commission's Green
+Deal, which was presented in 2019 and revised and expanded
+in late 2020, and the German federal government's decision
+to phase out conventional, hard-coal- and lignite-fired power
+generation (the Coal Phaseout Law of August 2020). The achieve-
+ment of these objectives will require legal and regulatory
+implementation measures that themselves would pose new
+risks for certain E.ON Group business operations.
+In the wake of the economic and financial crisis in many EU mem-
+ber states, interventionist policies and regulations have been
+adopted in recent years, such as additional taxes and additional
+reporting requirements (for example, EMIR, MAR, REMIT,
+MiFID2). The relevant agencies monitor compliance with these
+regulations closely. This leads to attendant risks for E.ON's
+operations. The same applies to price moratoriums, regulated
+price reductions, and changes to support schemes for renew-
+ables, which could pose risks to, as well as create opportunities
+for, E.ON's operations in the respective countries.
+There may also be final risks from obligations arising from
+regulatory requirements following the Uniper split. This risk
+category also includes major risks arising from possible litigation,
+fines, and claims, governance and compliance issues, as well
+as risks and chances related to contracts and permits. Changes
+to this environment can lead to considerable uncertainty with
+regard to planning and, under certain circumstances, to impair-
+ment charges but can also create chances. This results in a
+major risk and chance position.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+63
+Operational and IT Risks
+Energy Networks
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+65
+Furthermore, the general IT controls, the controls of the Business
+Service Centers in Regensburg and Cluj, the controls of the
+Human Resources Service Center in Germany (E.ON Country
+Hub Germany GmbH), and the controls of the Pension Service
+Company in Germany (Energie Pensions-Management GmbH)
+were audited as part of the audit of the Group's Consolidated
+Financial Statements.
+Sign-Off Process
+Based on the self-assessment result and internal and external
+audit findings, the respective management of the unit conducts
+the final Sign-Off. The final step of the internal evaluation pro-
+cess is the submission of a formal written declaration confirming
+the ICS's effectiveness (ICS Sign-Off). The Sign-Off process is
+conducted at all levels of the Group companies before E.ON SE,
+as the final step, conducts it for the Group as a whole. The Chair-
+man of the E.ON SE Management Board and the Chief Financial
+Officer perform the final Sign-Off for the E.ON Group.
+Disclosures Regarding Takeovers
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+67
+The purpose of the ICS framework and the annual ICS process
+is to provide sufficient assurance to prevent error or fraud from
+resulting in material misrepresentations in the Financial State-
+ments, the Combined Group Management Report, the Half-Year
+Financial Report, and the Quarterly Statements.
+Corporate Audit regularly informs the E.ON SE Supervisory
+Board's Audit & Risk Committee about the ICS over financial
+reporting and about any significant deficiencies identified in
+the E.ON Group's various processes.
+innogy's Internal Control System and its
+Integration into E.ON's ICS Framework
+innogy's ICS Framework
+In addition, the effectiveness of the internal controls is audited
+by Internal Audit. These audits are conducted based on a risk-
+oriented audit plan. Any identified deficiencies are reported to
+the relevant companies.
+A dedicated unit within the Accounting & Reporting division,
+Corporate Internal Controls ("CIC"), was responsible for designing
+and monitoring the ICS of the previous innogy Group. CIC was
+supported in the implementation, design, and monitoring by
+ICS coordinators and the employees responsible for ICS at the
+respective units.
+Unlike for the accounting process, for Finance, HR, procurement,
+IT, Tax, Retail Billing, and Grid Billing only the ICS quality standards
+were reviewed by the persons responsible for the ICS as part
+of the management self-assessment. Likewise, analogous to the
+above-described EON ICS principles, innogy's ICS quality stan-
+dards generally reflect the minimum ICS standards.
+The results of the management self-assessment are included
+in the ICS year-end report concerning the effectiveness of the
+entire E.ON Group's internal control system and are reported to
+E.ON's Management Board.
+Integration of innogy Companies into the E.ON ICS Framework
+As part of innogy's integration into the E.ON Group, CIC started
+to report to E.ON Corporate Audit from July 1, 2020, onward.
+Effective November 1, 2020, CIC's tasks relating to the design
+and monitoring of innogy companies' ICS were taken over by
+E.ON Corporate Audit's ICS department.
+For the 2020 financial year, the Chief Executive Officer ("CEO")
+and Chief Financial Officer ("CFO") of the former innogy affiliates
+who directly reported to innogy SE or E.ON SE were, in the con-
+text of the 2020 Consolidated Financial Statements, for the first
+time responsible for formally acknowledging their responsibility
+as well as the effectiveness of the ICS for their respective units.
+This formal Sign-Off process was performed in the same way as
+the E.ON Sign-Off ICS process was performed and included only
+innogy companies in the ICS scope. However, the innogy ICS
+framework including the design and monitoring function was still
+applicable in 2020. Furthermore, a comprehensive ICS integra-
+tion program was initiated to integrate innogy companies in the
+ICS documentation scope into E. ON's risk catalog (ICS model).
+From the beginning of 2021, E.ON's ICS framework is applicable
+to all innogy companies in the ICS scope without exception.
+Disclosures Pursuant to Section 289a,
+Paragraph 1, and Section 315a, Paragraph 1,
+of the German Commercial Code and Explana-
+tory Report
+Composition of Share Capital
+The share capital totals €2,641,318,800 and consists of
+2,641,318,800 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a Share-
+holders Meeting.
+Restrictions on Voting Rights or the Transfer of
+Shares
+Pursuant to Section 71b of the German Stock Corporation Act
+(known by its German abbreviation, "AktG"), the Company's
+treasury shares give it no rights, including no voting rights.
+Disclosures Regarding Takeovers
+68
+Legal Provisions and Rules of the Company's
+Articles of Association Regarding the Appoint-
+ment and Dismissal of Management Board
+Members and Amendments to the Articles of
+Association
+In 2020, the testing of the effectiveness of the implemented
+controls for accounting was performed as part of the annual
+ICS process, which is part of innogy companies' established ICS.
+In addition to the ICS Coordinators, ICS testers were appointed
+and/or responsible for testing the appropriateness and effective-
+ness of the internal control system of the respective units in the
+ICS scope. Essentially, ICS testers are employees from Account-
+ing, Internal Audit, and/or are requested from external auditing
+firms. Once the centrally performed risk assessment was done
+taking the external audit scope in account, an overview about
+the controls in scope of the testing is provided to the respective
+ICS tester. The testing process and assessment of the controls
+is conducted technically in SAP-GRC.
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is per-
+missible. If several persons are appointed as members of the
+Management Board, the Supervisory Board may appoint one of
+the members as Chairperson of the Management Board. If there
+is a vacancy on the Management Board for a required member,
+the court makes the necessary appointment upon petition by
+a concerned party in the event of an urgent matter. The Super-
+visory Board may revoke the appointment of a member of the
+Management Board and of the Chairperson of the Management
+Board for serious cause (for further details, see Sections 84
+and 85 of the AktG).
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment
+of the design and the operational effectiveness of the controls
+embedded in these processes. This is known as a management
+self-assessment.
+E.ON units in the ICS documentation scope use a central docu-
+mentation system (SAP-GRC) for this purpose. The system
+contains the scope, detailed documentation requirements, the
+assessment requirements for process owners, and the final
+Sign-Off process.
+55
+Disclosures Pursuant to Section 289,
+General Principles
+E.ON applies Section 315e, Paragraph 1, of the German Commer-
+cial Code and prepares its Consolidated Financial Statements
+in accordance with International Financial Reporting Standards
+("IFRS") and the interpretations of the IFRS Interpretations
+Committee that were adopted by the European Commission for
+use in the EU as of the end of the fiscal year and whose appli-
+cation was mandatory as of the balance-sheet date (see Note 1
+to the Consolidated Financial Statements). Energy Networks
+(Germany, Sweden, and East-Central Europe/Turkey), Customer
+Solutions (Germany, United Kingdom, Netherlands/Belgium,
+Other), Non-Core Business, and Corporate Functions/Other are
+the Company's IFRS-reportable segments.
+E.ON SE prepares its Financial Statements in accordance with
+the German Commercial Code, the SE Ordinance (in conjunction
+with the German Stock Corporation Act), and the German
+Energy Act.
+E.ON prepares a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+Accounting Process
+All companies included in the Consolidated Financial Statements
+must comply with E.ON's uniform Accounting and Reporting
+Guidelines for the Annual Consolidated Financial Statements and
+the Interim Consolidated Financial Statements. These guidelines
+describe applicable IFRS accounting and valuation principles.
+They also explain accounting principles typical in the E.ON Group,
+such as those for provisions for nuclear-waste management,
+the treatment of financial instruments, and the treatment of
+regulatory obligations. E.ON continually analyzes amendments
+to laws, new or amended accounting standards, and other import-
+ant pronouncements for their relevance to, and consequences
+for, the Consolidated Financial Statements and, if necessary,
+update its guidelines and systems accordingly.
+Corporate Functions defines and oversees the roles and respon-
+sibilities of various Group entities in the preparation of E.ON SE's
+Financial Statements and the Consolidated Financial Statements.
+These roles and responsibilities are described in a Group Policy
+document.
+E.ON Group companies are responsible for preparing their
+financial statements in a proper and timely manner. They
+receive substantial support from Business Service Centers in
+Regensburg, Germany; Cluj, Romania; and Kraków, Poland.
+E.ON SE combines the financial statements of subsidiaries
+belonging to its scope of consolidation into its Consolidated
+Financial Statements using standard consolidation software.
+Group Accounting is responsible for conducting the consolidation
+and for monitoring adherence to the guidelines for scheduling,
+processes, and contents. Monitoring by means of system-based
+automated controls is supplemented by manual checks.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information relevant for accounting
+is compiled. Furthermore, dedicated quality-control processes
+are in place for all relevant departments to discuss and ensure
+the completeness of important information on a regular basis.
+Management Self-Assessment and Control Tests
+E.ON SE's Financial Statements are prepared with SAP software.
+The accounting and preparation processes are divided into
+discrete functional steps. Bookkeeping processes have largely
+been outsourced to E.ON's Business Service Centers. Cluj has
+the primary responsibility for processes relating to subsidiary
+ledgers and several bank activities. Regensburg has the principal
+responsibility for processes relating to the general ledgers. Auto-
+mated or manual controls are integrated into each step. Defined
+procedures ensure that all transactions and the preparation of
+E.ON SE's Financial Statements are recorded, processed, assigned
+on an accrual basis, and documented in a complete, timely, and
+accurate manner. Relevant data from E.ON SE's Financial State-
+ments are, if necessary, adjusted to conform with IFRS and then
+transferred to the consolidation software system using SAP-
+supported transfer technology.
+Internal Control System
+The management of each unit in the E.ON Group is legally
+responsible for establishing and maintaining an adequate and
+effective internal control system ("ICS"). The ICS department
+at Corporate Audit is responsible for the oversight and coordina-
+tion of the overall ICS process in order to ensure an effective
+ICS in the E.ON Group. For this purpose, the ICS department at
+Corporate Audit provides the ICS framework and the necessary
+tools. An ICS Business Partner ("ICS BP") is assigned to each unit
+which is of particular importance to the E.ON Group and there-
+fore in the ICS documentation scope. The ICS BP is responsible
+Internal Control System for the Accounting Process
+66
+99
+for coordinating and monitoring the unit's ICS activities and
+advises and supports management in implementing an effective
+internal control system. The unit's management remains respon-
+sible for the appropriateness and effectiveness of the imple-
+mented ICS. The ICS BP concept ensures a uniform approach as
+well as consistent and efficient collaboration and fosters con-
+tinuous improvement through extensive information-sharing in
+the Group.
+E.ON's ICS Framework
+E.ON's ICS is based on the globally recognized COSO framework
+from May 2013 (COSO: The Committee of Sponsoring Organi-
+zations of the Treadway Commission).
+The ICS Principles, which define the minimum requirements for
+an effective internal control system, are a key component of
+E.ON's ICS. They contain overarching principles such as autho-
+rization, segregation of duties, and master data management as
+well as specific requirements for managing potential risks in
+various areas and processes, such as supplier monitoring, project
+management, invoice verification, and payments. All fully con-
+solidated companies and majority-owned units are subject to
+the ICS Principles.
+In addition to the ICS Principles, certain units of special impor-
+tance to the E.ON Group must fulfill several additional ICS
+requirements for selected processes. These requirements relate
+to the documentation and assessment of the relevant processes
+and controls-the ICS model-as well as reporting to Corporate
+Audit. The ICS model, which incorporates company- and indus-
+try-specific aspects, defines potential risks for accounting
+(financial reporting) at the operating units, serves as a checklist,
+and provides guidance for the establishment of internal controls
+as well as their documentation and implementation, and is thus
+an integral part of the accounting processes.
+A functionally managed digital organization and third-party
+service providers provide IT and digital services for the E.ON
+Group. IT systems used for accounting are subject to the internal
+control system framework, which includes IT general controls,
+such as access controls, segregation of duties, processing con-
+trols, measures to prevent the intentional and unintentional falsi-
+fication of the programs, data, and documents as well as controls
+related to supplier monitoring. The documentation of the IT
+general controls is stored in E.ON's documentation system.
+Each year, qualitative criteria and quantitative materiality aspects
+are used to determine which financial-reporting processes and
+controls must be documented and assessed by which E.ON units.
+The following explanations about E.ON's internal control
+system ("ICS") and its general IT controls apply equally to the
+Consolidated Financial Statements and to E.ON SE's Financial
+Statements. Page 67 contains information about the innogy
+Group's internal control system, which has not yet been adapted
+to E.ON's internal control system.
+Paragraph 4, and Section 315, Paragraph 4 of
+the German Commercial Code on the Internal
+Control System for the Accounting Process
+Major
+x < €10 million
+risk and chance analysis and evaluation
+management and monitoring of risks and chances by
+analyzing and evaluating countermeasures and preventive
+systems
+documentation and reporting.
+As required by law, E.ON's ERM's effectiveness is reviewed
+regularly by Corporate Audit. In compliance with the provisions
+of Section 91, Paragraph 2, of the German Stock Corporation
+Act relating to the establishment of a risk-monitoring and early
+warning system, E.ON has a Risk Committee for the E.ON Group
+and for each of its business units. The Risk Committee's mission
+is to achieve a comprehensive view of E.ON's risk exposure at
+the Group and unit level and to actively manage risk exposure in
+line with E.ON's risk strategy.
+The ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose book value is greater
+than €50 million. E.ON takes an inventory of its risks and chances
+at each quarterly balance-sheet date.
+To promote uniform financial reporting Group-wide, E.ON has
+in place a central, standardized system that enables effective
+and automated risk reporting. Company data are systematically
+collected, transparently processed, and made available for
+analysis both centrally and decentrally at the units.
+systematic risk and chance identification
+Risks and Chances Report
+Methodology
+E.ON's IT-based system for reporting risks and chances has the
+following risk categories:
+60
+60
+Risk Category
+Risk Category
+Risks and Chances
+•
+•
+•
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+59
+59
+Managing Market Risks
+E.ON uses a comprehensive sales-management system and
+intensive customer management to manage margin risks.
+In order to limit exposure to commodity price risks, E.ON con-
+ducts systematic risk management. The key elements of the
+Company's risk management are, in addition to binding Group-
+wide policies and a Group-wide reporting system, the use of
+quantitative key figures, the limitation of risks, and the strict
+separation of functions between departments. Furthermore,
+E.ON utilizes derivative financial instruments that are commonly
+used in the marketplace. These instruments are transacted with
+financial institutions, brokers, power exchanges, and third parties
+whose creditworthiness is monitored on an ongoing basis. E.ON
+local sales units and the remaining generation operations have
+set up local risk management under central governance standards
+to monitor these underlying commodity risks and to minimize
+them through hedging.
+Managing Strategic Risks
+E.ON has comprehensive preventive measures in place to
+manage potential risks relating to acquisitions and investments.
+These measures include, in addition to the relevant company
+guidelines and manuals, comprehensive due diligence, legally
+binding contracts, a multi-stage approvals process, and share-
+holding and project controlling. Comprehensive post-acquisition
+projects also contribute to successful integration.
+Managing Finance and Treasury Risks
+This category encompasses credit, interest-rate, currency, tax,
+and asset-management risks and chances. E.ON uses system-
+atic risk management to monitor and control its interest-rate
+and currency risks and manage these risks using derivative and
+non-derivative financial instruments. Here, E.ON SE plays a
+central role by aggregating risk positions through intragroup
+transactions and hedging these risks in the market. Due to
+E.ON SE's intermediary role, its risk position is largely closed.
+In the context of Group-wide credit risk management E.ON
+systematically assesses and monitors the creditworthiness
+of its business partners on the basis of Group-wide minimum
+standards. E.ON manages credit risk by taking appropriate
+measures, which include obtaining collateral and setting limits.
+The E.ON Group's Risk Committee is regularly informed about
+credit risks. A further component of E.ON's risk management
+is a conservative investment strategy for financial funds and a
+broadly diversified portfolio.
+Note 31 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial instru-
+ments and hedging transactions. Note 32 describes the general
+principles of E.ON's risk management and applicable risk metrics
+for quantifying risks relating to commodities, credit, liquidity,
+interest rates, and currency translation.
+Enterprise Risk Management ("ERM")
+E.ON'S ERM, which is the basis for the risks and chances
+described in the next section, encompasses:
+.
+Legal and regulatory risks
+Operational and IT risks
+Report of the Supervisory Board
+Strategy and Objectives
+HSE, HR, and other
+Strategic risks
+Policy and legal risks and chances, regulatory risks, risks from public consent processes
+High
+IT and process risks and chances, risks and chances relating to the operation of generation
+assets, networks, and other facilities, new-build risks
+Moderate
+Medium
+Low
+Impact Classes
+€10 million ≤ x < €50 million
+€50 million ≤ x < €200 million
+€200 million ≤ x < €1 billion
+x ≥ €1 billion
+The last step is to assign, in accordance with the 5th and
+95th percentiles, the aggregated risk distribution to impact
+classes-low, moderate, medium, major, and high-according to
+their quantitative impact on planned adjusted EBIT. The impact
+classes are shown in the table below.
+E.ON uses the 5th and 95th percentiles of this aggregated
+risk distribution as the worst case and best case, respectively.
+Statistically, this means that with this risk distribution there is
+a 90-percent likelihood that the deviation from the Company's
+current earnings plan for adjusted EBIT will remain within these
+This statistical distribution makes it possible for E.ON's internal
+risk management system to conduct a Monte Carlo simulation
+of these risks. This yields an aggregated risk distribution that is
+quantified as the deviation from the Company's current earnings
+plan for adjusted EBIT.
+For quantifiable risks and chances, E.ON then evaluates the
+likelihood of occurrence and the potential loss or damage. In
+the commodity business, for example, commodity prices can
+rise or fall. This type of risk is modeled with a normal distribution.
+Modeling is supported by a Group-wide IT-based system.
+Extremely unlikely events-those whose likelihood of occurrence
+is 5 percent or less-are classified as tail events. Tail events are
+not included in the simulation described below.
+E.ON uses a multistep process to identify, evaluate, simulate,
+and classify risks and chances. Risks and chances are generally
+reported on the basis of objective evaluations. If this is not
+possible, estimates by in-house experts are used. The evaluation
+measures a risk/chance's financial impact on the current earnings
+plan while factoring in risk-reducing countermeasures. The
+evaluation therefore reflects the net risk.
+Credit, interest-rate, foreign-currency, tax, and asset-management risks and chances
+Risks and chances from investments and disposals
+extremes.
+General Risk Situation
+The table below shows the average annual aggregated risk posi-
+tion (aggregated risk distribution) across the time horizon of the
+medium-term plan for all quantifiable risks and chances (excluding
+tail events) for each risk category based on E.ON's most import-
+ant financial key performance indicator, adjusted EBIT.
+Risk Category
+Finance and treasury risks
+Examples
+Medium
+Major
+Low
+Medium
+Major
+Worst case (5th percentile)
+Finance and treasury risks
+Strategic risks
+Market risks
+HSE, HR, and other
+Operational and IT risks
+Legal and regulatory risks
+Risk category
+Market risks
+Risks and chances from the development of commodity prices and margins and from changes
+in market liquidity
+Health, safety, and environmental risks and chances
+Description of the Functioning of the
+Management Board and Supervisory Board
+and of the Composition and Functioning of
+Their Committees
+Other Disclosure Relevant to Takeovers
+The Company has been notified about the following direct or
+indirect interests in its share capital that exceed 10 percent of
+the voting rights:
+•
+notification on December 10, 2020, by RWE Aktiengesell-
+schaft for 15 percent of the voting rights
+Stock with special rights granting power of control has not
+been issued. In the case of stock given by the Company to
+employees, employees exercise their rights of control directly
+and in accordance with legal provisions and the provisions of
+the Articles of Association, just like other shareholders.
+Corporate Governance Declaration
+A change-of-control event would also result in the early payout
+of virtual shares under the E.ON Share Matching Plan and the
+E.ON Performance Plan. The vesting period of the last tranche of
+the E.ON Share Matching Plan ends in March 2021. Afterward,
+therefore there can only be early payouts under the E.ON Perfor-
+mance Plan, but no longer under the E.ON Share Matching Plan.
+Corporate Governance Declaration in Accor-
+dance with Section 289f and Section 315d of
+the German Commercial Code
+The Board of Management and Supervisory Board declare that
+the recommendations of the "Government Commission on the
+German Corporate Governance Code" (version of February 7,
+2017) published by the Federal Ministry of Justice and Consumer
+Protection in the official section of the Federal Gazette on
+April 24, 2017, have been fully complied with since the last
+declaration was issued in December 2019.
+The Board of Management and Supervisory Board further declare
+that the recommendations of the "Government Commission on
+the German Corporate Governance Code" (version dated Decem-
+ber 16, 2019) published by the Federal Ministry of Justice and
+Consumer Protection in the official section of the Federal Gazette
+on March 20, 2020, are complied with in full.
+Essen, December 15, 2020
+In the past financial year, the Management Board and Super-
+visory Board paid close attention to E.ON's compliance with the
+former and new German Corporate Governance Code's recom-
+mendations and suggestions. They determined that E.ON SE
+fully complies, or will comply, with all of the Code's recommen-
+dations and also with nearly all of its suggestions.
+Transparent Management
+Transparent management is a high priority of the Management
+Board and Supervisory Board. E.ON's shareholders, all capital
+market participants, financial analysts, shareholder associations,
+and the media regularly receive up-to-date information about
+the situation of, and any material changes to, the Company. E.ON
+primarily uses the Internet to provide equal access to compre-
+hensive and timely information.
+Declaration Made in Accordance with Section
+161 of the German Stock Corporation Act by
+the Management Board and the Supervisory
+Board of E.ON SE
+To the extent that the Company has agreed to settlement pay-
+ments for Management Board members in the case of a change
+of control, the purpose of such agreements is to preserve the
+independence of Management Board members.
+In the event of a premature loss of a Management Board posi-
+tion due to a change-of-control event, the service agreements
+of Management Board members entitle them to severance and
+settlement payments (see the detailed presentation in the
+Compensation Report).
+Settlement Agreements between the Company
+and Management Board Members or Employees
+in the Case of a Change-of-Control Event
+Shareholders and Annual Shareholders Meeting
+In the year under review, the Supervisory Board conducted a
+regularly scheduled self-assessment (efficiency review) of the
+Supervisory Board's work. An online questionnaire provided the
+Supervisory Board members with the opportunity to evaluate
+the efficiency of the Supervisory Board's work and to make
+suggestions for improving it. The findings were used to design
+specific measures to improve the Supervisory Board's work,
+which are being implemented on an ongoing basis. They relate
+primarily to the Supervisory Board devoting more attention to
+the assessment and ex post analysis of investment decisions and
+the analysis of industry-specific technology trends.
+Report on the Supervisory Board's Self-evaluation
+78
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+69
+69
+In addition, the Management Board is authorized to cancel trea-
+sury shares, without such cancellation or its implementation
+requiring an additional resolution by the Shareholders Meeting.
+These authorizations may be utilized on one or several occa-
+sions, in whole or in partial amounts, separately or collectively,
+including with respect to treasury shares acquired by affiliated
+companies or companies majority-owned by the Company or by
+third parties for their account or the Company's account.
+In each case, the Management Board will inform the Share-
+holders Meeting about the utilization of the aforementioned
+authorization, in particular about the reasons for and the purpose
+of the acquisition of treasury shares, the number of treasury
+shares acquired, the amount of the registered share capital
+attributable to them, the portion of the registered share capital
+represented by them, and their equivalent value.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 28, 2020, the Management Board was autho-
+rized, subject to the Supervisory Board's approval, to increase,
+until May 27, 2025, the Company's share capital by a total of
+up to €528 million through one or more issuances of new regis-
+tered no-par-value shares against contributions in cash and/or
+in kind (authorized capital pursuant to Sections 202 et seq. of the
+AktG; "Authorized Capital 2020"). Subject to the Supervisory
+Board's approval, the Management Board is authorized to exclude
+shareholders' subscription rights.
+At the Annual Shareholders Meeting of May 28, 2020, share-
+holders approved a conditional increase of the Company's share
+capital (with the option to exclude shareholders' subscription
+rights) up to the amount of €264 million ("Conditional Capital
+2020"). Note 20 to the Consolidated Financial Statements con-
+tains more information about Conditional Capital 2020.
+Significant Agreements to Which the Company
+Is a Party That Take Effect on a Change of Control
+of the Company Following a Takeover Bid
+The underlying contracts of debt issued since 2007 contain
+change-of-control clauses that give the creditor the right of
+cancellation. This applies, inter alia, to bonds issued by E.ON SE
+and E.ON International Finance B.V. and guaranteed by E.ON SE,
+promissory notes issued by E.ON SE, and other instruments
+such as credit contracts. Granting change-of-control rights to
+creditors is considered good corporate governance and has
+become standard market practice. More information about
+financial liabilities is contained in the section of the Combined
+Group Management Report entitled Financial Situation and in
+Note 27 to the Consolidated Financial Statements.
+E.ON SE issues reports about its and the E.ON Group's situation
+and earnings by the following means:
+•
+Annual Report and Annual Finance Statements
+•
+Telephone conferences held on release of the quarterly and
+annual results
+Numerous discussions with financial analysts in and outside
+Germany
+Periodic events for investors.
+A financial calendar lists the dates on which the Company's
+periodic financial reports are released.
+The Company issues ad hoc statements about information that
+could have a significant impact on the price of E.ON stock.
+The financial calendar and ad hoc statements are available on
+the Internet at www.eon.com.
+770
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+71
+Managers' Transactions
+Persons with executive responsibilities, in particular members
+of E.ON SE's Management Board and Supervisory Board, and
+persons closely related to them, must disclose certain dealings
+in E.ON stock or bonds, related derivates, or other related finan-
+cial instruments pursuant to Article 19 of the EU Market Abuse
+Regulation in conjunction with Section 26, Paragraph 2, of the
+German Securities Trading Act. There were no such dealings in
+the 2020 financial year.
+Compliance
+The goal of compliance at E.ON is to prevent or at least detect and
+put a stop to corporate misconduct. It is E.ON's responsibility
+never to deceive, lie to, or otherwise deliberately harm its custom-
+ers, business partners, or other stakeholders. Strict compliance
+with laws and company policies is therefore the foundation of
+good corporate governance.
+•
+E.ON has in place a compliance management system ("CMS") to
+mitigate the risk of compliance violations. The CMS is based on
+a number of widely recognized practices, including the promotion
+of a compliance culture. This encompasses an active commit-
+ment to compliance targets, the identification and analysis of
+compliance risks, and the design of a risk-adequate compliance
+program and a compliance organization.
+Corporate Governance Declaration
+E.ON views good corporate governance as a central foundation
+of responsible and value-oriented management, efficient
+collaboration between the Management Board and the Super-
+visory Board, transparent disclosures, and appropriate risk
+management.
+•
+Half-Year Financial Report and Quarterly Statements
+Annual press conferences
+•
+Press releases
+•
+For the Supervisory Board of E.ON SE:
+Dr. Karl-Ludwig Kley
+(Chairman of the Supervisory Board of E.ON SE)
+For the Board of Management of E.ON SE:
+Dr. Johannes Teyssen
+(Chairman of the Board of Management of E.ON SE)
+This declaration and those of the previous five years are contin-
+uously available to the public on the Company's Internet page
+at www.eon.com.
+Relevant Information about Management
+Practices
+Corporate Governance
+•
+E.ON's Supplier Code and its Code of Conduct (both of which
+are available in the languages of all countries in which the Com-
+pany operates) focus on the guiding principle, "Doing the right
+thing." They provide easy-to-understand guidance, in particular
+human rights, anti-corruption, fair competition, and compliant
+relationships with business partners. The Code of Conduct also
+contains an integrity test that employees can use to check
+whether their assessment of a situation is in compliance with
+E.ON principles and values. Every employee in the E.ON Group
+is obliged to act in accordance with the Code of Conduct's rules.
+The Code is therefore part of E.ON employees' duties under their
+employment contract. Employees and third parties can report
+violations of the Code of Conduct-anonymously, if they wish-
+by means of a whistle-blower hotline. The Code of Conduct and
+the Supplier Code are published on www.eon.com. They are
+supplemented by ten Group-wide People Guidelines which
+explain in greater detail how employees can be sure that they
+are doing things right.
+• Members of the Supervisory Board must not have seats on
+the boards of, or act as consultants for, any of the Company's
+major competitors or have a personal relationship with one of
+its competitors.
+The Supervisory Board shall not include more than two former
+members of the Board of Management.
+Current CVs of Supervisory Board members are published on
+the Company's Internet page.
+The Supervisory Board has established the following committees
+and defined rules and procedures for them:
+The Executive Committee consists of six members: the Super-
+visory Board Chairman, his two Deputies, another member
+elected at the recommendation of employee representatives,
+and two more members elected at the recommendation of
+shareholder representatives. It prepares the meetings of the
+Supervisory Board and advises the Management Board on
+matters of general policy relating to the Company's strategic
+development. In urgent cases (in other words, if waiting for the
+Supervisory Board's prior approval would materially prejudice
+the Company), the Executive Committee acts on the full Super-
+visory Board's behalf. In addition, a key task of the Executive
+Committee is to prepare the Supervisory Board's personnel
+decisions and resolutions for setting the respective total com-
+pensation of individual Management Board members within
+the meaning of Section 87, AktG.
+Furthermore, it is responsible for the conclusion, alteration, and
+termination of the service agreements of Management Board
+members and for presenting the Supervisory Board with a pro-
+posal for a resolution on a clear and comprehensible compen-
+sation plan for the Management Board and its periodic review.
+In addition, it prepares the Supervisory Board's decision on the
+Group's investment, financial, and personnel plan for the next
+financial year. It also deals with corporate-governance matters
+and reports to the Supervisory Board, generally once a year, on
+the status and effectiveness of, and possible ways of improving,
+the Company's corporate governance and on new requirements
+and developments in this area.
+Corporate Governance Declaration
+76
+In addition, the Executive Committee advises the Management
+Board on all issues of Group financing and investment planning.
+It decides on behalf of the Supervisory Board on the approval of
+the acquisition and disposition of companies, equity interests,
+and parts of companies whose value exceeds €300 million but
+does not exceed €600 million. Furthermore, the Management
+Board must present to the Executive Committee investments if,
+in the case of a fixed-asset investment of more than €300 mil-
+lion, the Management Board is convinced that the approved
+investment amount will be surpassed by more than 10 percent
+or if the Management Board perceives that the investment is
+no longer economic; that is, that it will no longer achieve its cost
+of capital. Additionally, the Executive Committee decides on
+behalf of the Supervisory Board on the approval of financing
+measures whose value exceeds €1 billion but not €2.5 billion if
+such measures are not covered by the Supervisory Board's res-
+olutions regarding finance plans. If the value of any such trans-
+actions or measures exceeds the aforementioned thresholds,
+the committee prepares the Supervisory Board's decision. Finally,
+the Executive Committee prepares decisions on transactions
+with members of the Management Board and Supervisory Board,
+represents the Company vis-à-vis the Management Board, and
+is responsible for approving the assignment of task areas to
+individual Management Board members and for other activities
+of a Management Board member.
+The Audit and Risk Committee consists of six members. The
+Supervisory Board believes that, in their entirety, the members
+of the Audit and Risk Committee are familiar with the sector in
+which the Company operates. According to the AktG, the Audit
+and Risk Committee must include one Supervisory Board mem-
+ber who has expertise in accounting or auditing. The Supervisory
+Board believes that in particular Andreas Schmitz fulfills this
+requirement. Pursuant to the recommendations of the German
+Corporate Governance Code, dated December 16, 2019, the
+Chairman of the Audit and Risk Committee should have special
+knowledge and experience in the application of accounting prin-
+ciples and internal control processes and be familiar with the
+auditing of financial statements. In addition, this person should
+be independent; in others words, in particular not a former
+Management Board member whose service on the Management
+Board ended less than two years ago and not simultaneously
+the Supervisory Board Chairman. The Supervisory Board believes
+that the Chairman of the Audit and Risk Committee, Andreas
+Schmitz, fulfills these requirements.
+In particular, the Audit and Risk Committee deals with the audit-
+ing of financial statements, the monitoring of the accounting
+process, the effectiveness of risk management as well as the
+independent audit and compliance. The committee's monitoring
+of risk management encompasses reviewing the effectiveness
+of the internal control system, the internal risk management
+system, and the internal audit system. The Audit and Risk Com-
+mittee deals in particular with the audit of the financial state-
+ments, the monitoring of the financial reporting process, the
+effectiveness of risk management, and the audit of the financial
+statements and compliance. Part of the risk management
+review is the review of the effectiveness of the internal control
+system, the internal risk management system and the internal
+audit system. The Audit and Risk Committee deals with Internal
+Audit's activities and the definition of the audit priorities on a
+regular basis.
+The committee also prepares the Supervisory Board's decision
+on the approval of the Financial Statements of E.ON SE and the
+Consolidated Financial Statements. It is responsible for the
+preliminary review of the Financial Statements of E.ON SE, the
+Management Report, the Consolidated Financial Statements,
+the Combined Group Management Report and the proposal for
+profit appropriation as well as—if these are not already part of
+the (Combined Group) Management Report—the Separate
+Non-financial Report and the Separate Combined Non-financial
+Report. It discusses the half-yearly reports and quarterly state-
+ments or financial reports with the Management Board prior
+to their publication. The effectiveness of the internal controls
+(including for the financial disclosures) at E.ON SE and the Group's
+units is tested by Internal Audit as part of a risk-oriented audit
+plan. The audit of the internal controls is also part of the audit
+of the Consolidated Financial Statements. The Audit and Risk
+Committee may commission an external review of the contents
+of the Non-financial Statement or the Separate Non-financial
+Report or the Combined Non-financial Statement or the Separate
+Combined Non-financial Report.
+In addition, the Audit and Risk Committee prepares the proposal
+on the selection of the Company's independent auditor for
+the Annual Shareholders Meeting and makes a substantiated
+proposal, which in cases where the audit mandate is put out
+to tender includes at least two candidates. In order to ensure the
+auditor's independence, prior to making its selection proposal,
+the Audit and Risk Committee secures a statement from the
+proposed auditor detailing any facts that could lead to the audit
+firm being excluded for independence reasons or otherwise
+conflicted. In addition, the committee deals with issues relating
+to the issuance of the audit mandate to the independent auditor,
+the definition of the audit priorities, and the agreement regarding
+the independent auditor's fees as well as any additional services
+performed by the independent auditor. The Audit and Risk
+Committee assesses the quality of the independent audit on a
+regular basis.
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+77
+In being assigned the audit task, the independent auditor agrees to:
+• promptly inform the Chairman of the Audit and Risk Com-
+mittee should any facts arise during the course of the audit
+that could lead to the audit firm being excluded for indepen-
+dence reasons or otherwise conflicted, unless such facts are
+resolved
+•
+•
+promptly inform the Chairman of the Audit and Risk Commit-
+tee of anything it becomes aware of during the course of the
+audit that is of relevance to the Supervisory Board's duties
+inform the Chairman of the Audit and Risk Committee, or to
+note in the audit report, if the audit has led to findings that
+contradict the Declaration of Compliance with the German
+Corporate Governance Code issued by the Management
+Board and the Supervisory Board.
+The Audit and Risk Committee decides on the approval of related-
+party transactions and deals with the internal procedure for
+assessing market conformity and the execution of related-party
+transactions in the ordinary course of business.
+The Innovation and Sustainability Committee consists of six
+members. It advises the Management Board on all innovation
+issues and growth opportunities. The focus is on opportunities
+that could deliver significant growth in sales and profit within
+the foreseeable future. These types of opportunities could range
+from new business models, markets, products, and services to
+innovative solutions that tangibly improve the customer experi-
+ence, employees' daily work, or processes. The Innovation and
+Sustainability Committee advises the Management Board on
+E.ON's digital transformation with the aim of making the Com-
+pany more automated, leaner, and more data-driven. The com-
+mittee also addresses issues relating to E.ON's HR agenda that
+help employees adopt a growth and innovation mentality, such
+as engagement, capabilities, work methods of the future, and
+cultural change. In addition, the committee advises the Supervi-
+sory Board and the Management Board on environmental, social,
+governance ("ESG"), and sustainability issues.
+The Nomination Committee consists of three shareholder rep-
+resentative members. Its Chairman is the Chairman of the Super-
+visory Board. Its task is to recommend to the Supervisory Board,
+taking into consideration the Supervisory Board's targets for its
+composition, suitable candidates for election to the Supervisory
+Board by the Annual Shareholders Meeting.
+c) In their entirety, the members bring a wide range of specific
+knowledge to committee work and have special expertise in
+one or more businesses and markets relevant to the Company.
+In view of continually changing business requirements, the Super-
+visory Board will continue to identify necessary competencies
+early to ensure that it has them. The Supervisory Board believes
+that the requirements of the Supervisory Board's competency
+profile are met by the current members of the Supervisory Board.
+b) In its current composition the Supervisory Board meets the
+objectives of its diversity concept. The Supervisory Board's
+composition of women and men complies with the legal require-
+ments for minimum percentages; separate compliance with
+the statutory gender quota occurred from the 2018 Annual
+Shareholders Meeting. The age range of the Supervisory Board
+is currently 45 to 74 years. At least four members have inter-
+national experience.
+The Supervisory Board believes that in the case of no Super-
+visory Board member there are specific indications of relevant
+situations or relationships that could give rise to a conflict of
+interests. During the year at most three, and since July 2020
+only two, management board members of a listed company sit
+on the Supervisory Board: Klaus Fröhlich, who was a member
+of the Board of Management of Bayerische Motoren Werke
+Aktiengesellschaft until June 2020, Rolf Martin Schmitz, Chair-
+man of the Board of Management of RWE Aktiengesellschaft,
+and Carolina Dybeck Happe, who has been CFO of General
+Electric Company since March 2020. In addition, these Super-
+visory Board members had no more than two seats on the
+supervisory boards of non-Group listed companies or exercised
+comparable functions. None of the other Supervisory Board
+members had seats on more than five supervisory boards of
+non-Group listed companies or exercised comparable functions.
+a shareholder or in a responsible role in a company outside the
+Group, a significant business relationship with the Company or
+one of its affiliates. No Supervisory Board members exercises
+any executive or advisory functions for major competitors, has
+a personal relationship with a major competitor, or has been a
+Supervisory Board member of more than 15 years. The Super-
+visory Board's assessment considered the fact that Karen de
+Segundo has been a Supervisory Board member since 2008
+and is thus the only member to have been a member for more
+than 12 years. In view of the changes in the composition of
+the Management Board and Supervisory Board in recent years,
+Ms. de Segundo continues to maintain the objective detachment
+from the Company and its Management Board necessary to
+perform her monitoring role. Furthermore, she does not and has
+not at any time in the past had a significant business or personal
+relationship with the Company, one of its affiliates, or the
+Management Board, either directly or as a shareholder or in a
+responsible capacity in a company outside the Group. She is
+therefore independent within the meaning of the German Cor-
+porate Governance Code.
+Supervisory Board membership shall be limited to no more
+than 15
+years.
+• All Supervisory Board members must have sufficient time
+available to perform their duties on the boards of various
+companies. Persons who are not members of the management
+board of a listed company should only be eligible as members
+of E.ON's Supervisory Board if they do not have seats on a
+total of more than five supervisory boards of listed non-Group
+companies or exercise a similar function; being a chairperson
+of a supervisory board counts twice. Persons who are members
+of the board of management of a listed company should only
+be eligible as members of E.ON's Supervisory Board if they do
+not have seats on a total of more than two supervisory boards
+of listed non-Group companies, exercise a comparable function,
+and are not the chairperson of the supervisory board of a
+listed non-Group company.
+b) In addition, the Supervisory Board has adopted the following
+diversity concept so as to ensure a balanced structure of the Super-
+visory Board in terms of age, gender, personality, educational
+background and professional experience.
+•
+In the search for qualified Supervisory Board members, due
+consideration shall be given to diversity. When preparing
+nominations for the election of Supervisory Board members,
+due consideration shall be given in each case to the question
+as to whether complementary academic profiles, professional
+and life experience, a balanced age mix, various personalities
+and a reasonable gender balance benefit the Supervisory
+Board's work. In this context, care shall be taken to ensure
+that a gender quota of 30 percent will be achieved; this shall
+apply to the Supervisory Board as a whole and to the share-
+holders' and employees' representatives separately.
+74
+•
+Four Supervisory Board members shall have international
+experience, i.e. they shall have spent, for instance, many years
+of their professional career outside Germany.
+c) In addition, the following skills profile shall apply; especially
+the Nominations Committee will strive to apply the skills profile
+when preparing nominations of candidates for the shareholders'
+representatives to be proposed to the Annual General Meeting.
+•
+•
+The Audit and Risk Committee and Executive Committee meet
+at regular intervals and when specific circumstances require it
+under their rules and procedures. The Nomination Committee
+and the Innovation and Sustainability Committee meet as needed.
+The Report of the Supervisory Board (on pages 8 to 10) contains
+information about the activities of the Supervisory Board and
+its committees in the year under review.
+•
+•
+The shareholders' representatives should have leadership
+experience in companies or other large organizations by the
+majority. At least four members shall have experience, as
+management or supervisory board members, in the strategic
+management or supervision of listed organizations and shall be
+familiar with the functioning of capital and financial markets.
+At least two members shall be familiar, in particular, with
+innovation, disruption and digitization and the associated new
+business models and cultural change.
+At least four members shall have specific expertise in the
+businesses and markets that are particularly relevant for
+E.ON. This includes in particular the energy sector, the sales
+and retail business, regulated industries, new technology as
+well as relevant customer sectors.
+At least two independent representatives of the shareholders
+shall have expertise in the fields of accounting, risk manage-
+ment and auditing of financial statements.
+At least two members shall be familiar with legal and compli-
+ance, HR, IT and sustainability, more specially in the dimensions
+of environmental protection, social, and governance ("ESG")."
+Current Composition of the Supervisory Board
+a) The Supervisory Board believes that all of its members-thus
+in particular the Chairmen of the Supervisory Board and the
+Chairpersons of all its committees-are independent. No former
+Management Board member or a close family member of a
+Management Board members sits on the Supervisory Board.
+Furthermore, no Supervisory Board member currently has or
+had in the year up to his or her appointment, either directly or as
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+75
+•
+E.ON SE shareholders exercise their rights and vote their shares
+at the Annual Shareholders Meeting. The convening of the
+Annual Shareholders Meeting and the reports and documents
+required by law for the Annual Shareholders Meeting, including
+the Annual Report, are published on the Company's Internet
+page together with the agenda and the explanation of the con-
+ditions of participation, shareholders' rights, and any counter-
+motions and election proposals submitted by shareholders. The
+Company's financial calendar, which is published in the Annual
+Report, in the quarterly statements or financial reports, and on
+the Internet at www.eon.com, regularly informs shareholders
+about important Company dates.
+The Supervisory Board's committees have the following
+composition:
+Dr. Karl-Ludwig Kley, Chairman
+Report of the Supervisory Board
+Strategy and Objectives
+were a member of the Company's Management Board in the
+past two years, unless the person concerned is nominated
+by shareholders who hold more than 25 percent of the Com-
+pany's voting rights.
+are legal representatives of another corporation whose
+supervisory board includes a member of the Company's
+Management Board, or
+are legal representatives of an enterprise controlled by the
+Company,
+(as stipulated by the AktG) are already supervisory board
+members in ten commercial companies that are required by
+law to form a supervisory board,
+•
+•
+•
+•
+To ensure that, after the acquisition of the majority of the shares
+of innogy SE, innogy's employees are represented without delay
+on the Supervisory Board of E.ON SE as the Group's parent
+company, the Supervisory Board was enlarged to 20 members
+for a limited period of time. Effective the conclusion of the
+2023 Annual Shareholders Meeting, the size of the Supervisory
+Board will again be set at 12 members. Pursuant to E.ON SE's
+Articles of Association, the Supervisory Board is composed of
+an equal number of shareholder and employee representatives.
+The shareholder representatives are elected by the shareholders
+at the Annual Shareholders Meeting; the Supervisory Board
+nominates candidates for this purpose. The Annual Shareholders
+Meeting decides on the elections by individual vote. Pursuant
+to the agreement regarding employees' involvement in E.ON SE,
+the other currently ten members of the Supervisory Board are
+appointed by the SE Works Council, with the provision that at
+least three different countries are represented and one member
+is selected by a trade union that is represented at E.ON SE or
+one of its subsidiaries in Germany. Persons are not eligible as
+Supervisory Board members if they:
+Supervisory Board
+the Risk Committee also deals with risk-mitigation strategies
+(including hedging strategies). In collaboration with relevant
+departments, the committee ensures and refines the implemen-
+tation of, and compliance with, company policies regarding
+commodity risks, credit risks, and enterprise risk management.
+A Risk Committee ensures the correct application and implemen-
+tation of the legal requirements of Section 91 of the German
+Stock Corporation Act (known by its German abbreviation, "AktG").
+This committee monitors the E.ON Group's risk situation and
+its risk-bearing capacity and devotes particular attention to the
+early identification of developments that could potentially
+threaten the Company's continued existence. In this context,
+The Management Board has established a Disclosure Committee
+and an Ad Hoc Committee for issues relating to financial
+disclosures. These committees ensure that all information is
+disclosed in a correct and timely fashion.
+The Management Board has no board committees but has
+established a number of committees that support it in the
+fulfillment of its tasks. The members of these committees are
+senior representatives of various departments of E.ON SE
+whose experience, responsibilities, and expertise make them
+particularly suited for their committee's tasks. Among these
+committees are the following:
+Any material transactions between the Company and members
+of the Management Board, their relatives, or entities with which
+they have close personal ties require the consent of the Execu-
+tive Committee of the Supervisory Board. No such transactions
+took place in the reporting period.
+Members of the Management Board are required to promptly
+report conflicts of interest to the Chairman of the Supervisory
+Board and the Chairman of the Management Board and to
+inform the other members of the Management Board. Members
+of the Management Board may only assume other corporate
+positions, particularly appointments to the supervisory boards
+of non-Group companies, with the consent of the Executive
+Committee of the Supervisory Board. There were no conflicts of
+interest involving members of the E.ON SE Management Board
+in the year under review. Dr.-Ing. Leonhard Birnbaum was also
+a member of the Management Board of the previously publicly
+listed innogy SE until it was merged into the entity formerly
+known as E.ON Verwaltungs SE (which now does business as
+innogy SE) on June 2, 2020. During this time, Dr.-Ing. Birnbaum
+did not participated in the adoption of resolutions or the other gov-
+ernance matters on the E.ON SE Management Board that posed
+a potential conflict of interest between E.ON SE and innogy SE.
+72
+72
+Corporate Governance Declaration
+The Chairman of the Management Board informs, without
+undue delay, the Chairman of the Supervisory Board of import-
+ant events that are of fundamental significance in assessing
+the Company's situation, development, and management and
+of any defects that have arisen in the Company's monitoring
+systems. Transactions and measures requiring the Supervisory
+Board's approval are also submitted to the Supervisory Board
+in a timely manner.
+The Management Board reports to the Supervisory Board on a
+regular, timely, and comprehensive basis on all relevant issues,
+particularly those relating to strategy, planning, business devel-
+opment, risk situation, risk management, and compliance. It
+also submits the Group's investment, finance, and personnel
+plan for the next financial year as well as the medium-term plan
+to the Supervisory Board, generally at the last meeting of each
+financial year.
+In 2020 the Management Board consisted of five members.
+It had one Chairman. No Management Board member has more
+than two supervisory board memberships in listed non-Group
+companies or on the supervisory bodies of non-Group companies
+that require a similar commitment. No member of the Manage-
+ment Board has reached the general retirement age. The Man-
+agement Board has in place policies and procedures for the
+business it conducts and, in consultation with the Supervisory
+Board, has assigned areas of responsibility to its members.
+The E.ON SE Management Board manages the Company's
+businesses, with all its members bearing joint responsibility for
+its decisions. It determines the Group's objectives, corporate
+policy, organizational setup, and, in consultation with the Super-
+visory Board, its fundamental strategic direction.
+Management Board
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+73
+The members of the E.ON SE Supervisory Board fulfill these
+requirements. Pursuant to the AktG, at least one member of the
+Supervisory Board must have special knowledge and experience
+in the application of accounting principles and internal control
+processes and be familiar with the auditing of financial statements.
+The Supervisory Board believes that, in particular, Andreas
+Schmitz meets this requirement. It also believes that its mem-
+bers in their entirety are familiar with the sector in which the
+Company operates.
+Christoph Schmitz, Deputy Chairman
+(since May 28, 2020)
+Andreas Scheidt, Deputy Chairman
+(until May 28, 2020)
+Erich Clementi
+Ulrich Grillo
+Fred Schulz
+Albert Zettl
+Audit and Risk Committee
+Andreas Schmitz, Chairman
+Fred Schulz, Deputy Chairman
+Carolina Dybeck Happe (until December 31, 2020)
+Ulrich Grillo (since January 1, 2021)
+René Pöhls
+Elisabeth Wallbaum
+Deborah Wilkens
+Innovations and Sustainability Committee
+Dr. Karen de Segundo, Chairwoman
+Stefan May, Deputy Chairman
+Clive Broutta (until January 31, 2020)
+Klaus Fröhlich
+Monika Krebber (since February 5, 2020)
+Eugen-Gheorghe Luha
+Executive Committee
+Ewald Woste
+Dr. Karl-Ludwig Kley, Chairman
+Erich Clementi, Deputy Chairman
+Dr. Karen de Segundo
+Corporate Governance Declaration
+The Chairman of the Supervisory Board, the Chairman of the
+Audit and Risk Committee and the Chairman of the Executive
+Committee shall be independent of the Company and the
+Management Board.
+Given a total number of 20 Supervisory Board members, the
+shareholder representatives believe that at least six of them
+should be independent of the Company and the Management
+Board. Members shall be deemed to be independent if they
+have no personal or business relationship with the Company
+or its Management Board, where such relationship may give
+rise to a material and not merely temporary conflict of inter-
+ests. In assessing the independence of its members from the
+Company and its Management Board, the shareholder repre-
+sentatives shall consider in particular whether a Supervisory
+Board member or a close family member was a member of
+the Company's Management Board in the two years prior to
+appointment, currently has (or until the year of appointment
+had) a significant business relationship with the Company or
+one of its affiliates, either directly or as a shareholder or corpo-
+rate officer of a company outside the Group, is a close family
+member of a Management Board member, or has been a
+member of the Supervisory Board for more than 12 years.
+•
+•
+In this context, the following general objectives shall be
+observed:
+"The composition of the Supervisory Board of E.ON SE shall
+comply with the specific SE requirements and Germany's Stock
+Corporation Act, and with the recommendations of the German
+Corporate Governance Code.
+In view of recommendation C.1 of the German Corporate Gov-
+ernance Code, dated December 16, 2019, and Section 289f,
+Paragraph 2, Item 6, of the German Commercial Code, the
+Supervisory Board defined specific targets for its composition,
+including a diversity concept and a competency profile for the
+entire Supervisory Board, that go beyond the applicable legal
+requirements. They are as follows:
+Furthermore, in September 2020 it was stipulated in the
+Supervisory Board's rules and procedures that the Supervisory
+Board will hold executive sessions on a regular basis; that is,
+to meet without the Management Board.
+The Supervisory Board has established rules and procedures
+for itself, which are available on the Company's Internet page.
+It holds at least four regular meetings in each financial year.
+Its rules and procedures include mechanisms by which, if neces-
+sary, a meeting of the Supervisory Board or one of its committees
+can be called at any time at the request of a Management Board
+member. Shareholder representatives and employee represen-
+tatives can prepare for Supervisory Board meetings separately.
+In the event of a tie vote on the Supervisory Board, the Chairman
+has the tie-breaking vote.
+The Supervisory Board oversees the Company's management
+and advises the Management Board on an ongoing basis. The
+Management Board requires the Supervisory Board's prior
+approval for significant transactions and measures, such as the
+Group's investment, finance, and personnel plans; the acquisition
+or sale of companies, equity interests, parts of companies
+(with the exception of equity investments), or asset investments
+whose fair value or, in the absence of a fair value, whose book
+value exceeds €300 million; financing measures that exceed
+€1 billion and have not been covered by Supervisory Board
+resolutions regarding finance plans; and the conclusion, amend-
+ment, or termination of affiliation agreements. The Supervisory
+Board examines the Financial Statements of E.ON SE, the
+Management Report, and the proposal for profit appropriation
+and, on the basis of the Audit and Risk Committee's preliminary
+review, the Consolidated Financial Statements and the Separate
+Combined Non-financial Report. The Supervisory Board provides
+to the Annual Shareholders Meeting a written report on the
+results of this examination.
+Nomination Committee
+At the Annual Shareholders Meeting, shareholders may vote
+their shares themselves, through a proxy of their choice, or
+through a Company proxy who is required to follow the share-
+holder's voting instructions.
+• As a rule, members of the Supervisory Board shall not hold
+office beyond the age of 75; they should not be older than
+72 years when they are elected.
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+The EU Regulation on Statutory Audit introduced an obligation
+for the statutory auditor and/or firm to be rotated periodically.
+Such a rotation will be carried out for the 2021 financial year.
+After the conclusion of the legally mandated multistage review
+process and on the basis of the Audit and Risk Committee's rec-
+ommendation, the Supervisory Board recommended to the 2020
+Annual Shareholders Meeting to appoint Pricewaterhouse-
+Coopers GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, to
+be independent auditor and Group independent auditor for the
+2020 financial year and to audit the Condensed Consolidated
+Interim Financial Statements and Interim Group Management
+Reports for the 2020 financial year and to appoint KPMG AG
+Wirtschaftsprüfungsgesellschaft to be independent auditor and
+to audit the Condensed Consolidated Interim Financial State-
+ments and Interim Group Management Report for the first quar-
+ter of 2021. The Supervisory Board intends to recommend to
+the 2021 Annual Shareholders Meeting to appoint KPMG AG
+Wirtschaftsprüfungsgesellschaft to be independent auditor and
+Group independent auditor and to audit the Condensed Consol-
+idated Interim Financial Statements and Interim Group Manage-
+ment Reports for the 2021 financial year and the first quarter of
+the 2022 financial year.
+At the Annual Shareholders Meeting on May 28, 2020, Price-
+waterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
+was selected to be E.ON SE's independent auditor for the 2020
+financial year and to audit the Condensed Consolidated Interim
+Financial Statements and Interim Group Management Reports
+for the 2020 financial year. The independent auditors with sign-
+ing authority for the Annual Financial Statements of E.ON SE and
+the Consolidated Financial Statements are Markus Dittmann
+(since the 2014 financial year) and Aissata Touré (since the 2015
+financial year). In accordance with the recommendation, KPMG
+AG Wirtschaftsprüfungsgesellschaft, Düsseldorf, was selected
+to audit the Condensed Consolidated Interim Financial Statements
+for the first quarter of the 2021 financial year.
+Women and Men in Leadership Positions
+Pursuant to Section 76, Paragraph 4, and
+Section 111, Paragraph 5, of the German
+Stock Corporation Act
+In the year under review, the Management Board consisted of
+five men. In December 2016 the Supervisory Board set a new
+target of 20 percent for the proportion of women on the Man-
+agement Board and a deadline of December 31, 2021, for imple-
+mentation. This target will be met from April 1, 2021, onward.
+Due to Dr. Teyssen's departure from the Management Board, the
+Supervisory Board adopted a resolution to appoint, conditionally,
+Dr. Victoria Ossadnik as a new Management Board member
+effective the conclusion of April 1, 2021. From April 2021
+onward, the Board of Management will therefore consist of
+four men and one woman.
+Due to the Covid-19 pandemic, the 2020 E.ON SE Annual Share-
+holders Meeting was not held as an in-person event in order to
+protect the Company's shareholders and employees. Instead,
+pursuant to the rules of the AktG it was held as a virtual Annual
+Shareholders Meeting without the physical participation of
+shareholders or their proxies.
+Cap: 200 percent of the target amount
+Annual target amount corresponds to 55 percent of performance-based compensation
+•
+Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from the age of 60
+Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement
+Contribution-based benefits
+•
+Virtual contributions equaling a maximum of 21 percent of fixed compensation and target bonus
+•
+Virtual contributions capitalized using interest rate based on long-term German treasury notes
+•
+Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+Other compensation provisions
+Share Ownership Guidelines
+•
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+- Target amount for Management Board Chairman: €1,732,500
+Final number of virtual shares depends on E.ON stock's TSR relative to the TSR of companies in the STOXX®
+Europe 600 Utilities index; 1/4 of TSR performance is locked in annually
+•
+•
+•
+•
+•
+•
+Granting of virtual shares of E.ON stock with a four-year vesting period
+- Target amount for Management Board Chairman: €1,260,000 (excluding LTI components from annual bonuses)
+- Target amount for Management Board members: €600,000-€733,333 (excluding LTI components from annual
+bonuses)
+Cap: 200 percent of the target amount
+Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1) + performance
+matching (1:0 to 1:2) depending on ROCE during the vesting period
+Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
+on the dividend payments during the four-year vesting period
+Granting of virtual shares of E.ON stock with a four-year vesting period
+•
+- Target amount for Management Board members: €825,000-€1,008,333
+Allocation limit; that is, the maximum number of virtual shares: 150 percent
+⋅
+Settlement for change-of-control
+Settlement cap
+¹Not including fringe, other, and pension benefits.
+39%
+E.ON Performance
+Plan (multi-year)
+The following graphic provides an overview of the compensation
+plan for Management Board members:
+Variable compensation
+(-70%)
+55%
+E.ON Performance Plan
+(LTI)-stock-based
+Depends on:
+TSR performance
+relative to
+peer companies
+Bonus (STI)
+Granting
+of virtual
+shares (with
+performance
+requirement)
+Paid out after
+45%
+Bonus
+(annual)
+Obligation to buy and hold E.ON stock until the end of service on the Management Board
+Investment in E.ON stock equaling a percentage of base compensation:
+31%
+30%
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the annual bonus
+as long as the total bonus remains under the cap
+Non-compete clause
+Clawback rule
+- 200 percent (Management Board Chairperson)
+- 150 percent (other Management Board members)
+Until the required investment is reached, obligation to invest net payouts from long-term compensation in E.ON stock
+Maximum of two years' total compensation or the total compensation for the remainder of the service agreement
+Settlement equal to two target salaries (base compensation, target bonus, and fringe benefits),
+reduced by up to 20 percent
+For six months after termination of service agreement, prorated compensation equal to base compensation and
+target bonus, at a minimum 60 percent of most recently received compensation
+The Supervisory Board's right pursuant to Section 87, Paragraph 2 of the German Stock Corporation Act to reduce
+compensation if the Company's situation deteriorates
+¹Deviating compensation modalities apply to Dr.-Ing. Birnbaum for this time period due to his dual mandate, which existed until June 1, 2020. They are described in the section "Total Compensation
+in 2020."
+2Only applies to Dr. Johannes Teyssen.
+Compensation Report
+82
+82
+Components and Compensation Structure
+The compensation of Management Board members consists
+of a fixed base salary, an annual bonus, and long-term variable
+compensation. The components account for the following
+percentages of target compensation (that is, compensation in
+the case of 100 percent target attainment):1
+Base salary
+Annual bonus corresponds to 45 percent of performance-based compensation
+- Company performance: actual earnings per share ("EPS") versus budget
+- Individual performance factor: collective performance and individual performance
+With the exception of the target quota regarding the share
+of women, which is to be achieved by December 31, 2021, the
+composition of the Management Board already meets the
+appointment objectives described above. From the appointment
+of Dr. Victoria Ossadnik effective April 1, 2021, onward, all of
+the above-described appointment objectives will be met.
+Long-term Succession Plan
+In consultation with the Executive Committee and the Manage-
+ment Board, the Supervisory Board is in charge of long-term
+succession planning for the Management Board. Appointment
+decisions are made on the basis of specific requirement profiles
+for Management Board members.
+In addition to its own experience, the Supervisory Board draws
+on the expertise of outside consultants to ensure that the Com-
+pany's succession planning is appropriate and creates value.
+The Supervisory Board is informed on a regular basis (once a
+year) by the Management Board on the progress in talent iden-
+tification and development as well as succession planning for
+top executives on the basis of the qualifications required for
+business success and the continually evolving personnel develop-
+ment processes. It discusses the respective status accordingly.
+Compensation Report
+Achievement of Objectives
+80
+Compensation Report
+This compensation report describes the basic features of the
+compensation plans for members of the E.ON SE Management
+Board and Supervisory Board and provides information about
+the compensation granted and paid in 2020. It applies the pro-
+visions of accounting standards for capital-market-oriented
+companies (the German Commercial Code, German Accounting
+Standards, and International Financial Reporting Standards)
+and the recommendations of the German Corporate Governance
+Code dated December 16, 2019. For the purpose of transparent
+presentation in the interests of corporate governance, the indi-
+vidualized disclosure of compensation will continue to be based
+on the model tables of the German Corporate Governance Code
+dated February 7, 2017. In accordance with the transitional pro-
+vision of Section 26j, Paragraph 2, of the Introductory Act to the
+German Stock Corporation Act ("EGAktG"), a compensation report
+will be prepared for the first time for the 2021 financial year in
+accordance with the requirements introduced in Section 162
+of the German Stock Corporation Act ("AktG") as part of the Act
+Implementing the Second Shareholders' Rights Directive
+("ARUG II").
+Basic Features of the Management Board
+Compensation Plan
+The Management Board compensation plan that took effect on
+January 1, 2017, is supposed to create an incentive for success-
+ful and sustainable corporate governance and to link the com-
+pensation of Management Board members with the Company's
+short-term and long-term performance while also factoring in
+their individual performance. The plan's parameters are there-
+fore transparent, performance-based, and aligned with the
+Company's business success; variable compensation is based
+predominantly on multi-year metrics. In order to align manage-
+ment's and shareholders' interests and objectives, long-term
+variable compensation is based not only on the development of
+E.ON's stock price in absolute terms but also on a comparison
+with competitors. Share ownership guidelines further strengthen
+E.ON's capital-market orientation and shareholder culture.
+The Supervisory Board approves the Executive Committee's
+proposal for the Management Board's compensation plan.
+It reviews the plan and the appropriateness of the Management
+Board's total compensation as well as the individual components
+on a regular basis and, if necessary, makes adjustments. It con-
+siders the provisions of the German Stock Corporation Act and
+follows the German Corporate Governance Code's recommen-
+dations. In its review of the compensation plan's market confor-
+mity and the appropriateness of compensation levels, the
+Supervisory Board was supported by an external compensation
+expert. For the review of appropriateness of the compensation
+levels of Management Board members in a market comparison
+(horizontal comparison), the peer group includes the companies
+listed in the DAX.
+80
+The appointment period of a member of the Management
+Board shall end, at the latest, at the end of the month on
+which the Management Board member reaches the general
+retirement age.
+Attention shall be paid to diversity when appointing mem-
+bers of the Management Board. For the Supervisory Board,
+diversity means, in particular, different complementary
+academic profiles, professional and personal experience,
+personalities, as well as internationality and a reasonable age
+and gender structure. The Supervisory Board has therefore
+adopted a target quota of 20 percent for the share of women
+on the Management Board; this target shall be achieved by
+December 31, 2021.
+•
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+79
+In May 2017 the Management Board set a new target of 30 per-
+cent for the proportion of women in the first level of manage-
+ment below the Management Board and a target of 35 percent
+for the second level of management below the Management
+Board. The deadline for achieving both targets is June 30, 2022.
+At year-end 2020, the proportion of women in first and second
+levels of management below the Management Board was
+34.6 percent and 26.7 percent, respectively.
+For all other E.ON Group companies concerned, targets and
+deadlines pursuant to the Law for the Equal Participation of
+Women and Men in Leadership Positions in the Private Sector
+and the Public Sector were set for the proportion of women on
+these companies' supervisory board and management board or
+team of managing directors as well as in the next two levels of
+management. As a rule, the deadline for achieving these targets
+is June 30, 2022.
+Diversity Concept and Long-term Succession
+Plan for the Management Board
+At its meeting in December 2017 the E.ON SE Supervisory
+Board adopted a resolution on the following succession planning/
+diversity concept for the Management Board:
+With regard to the Management Board's composition, the
+Supervisory Board of E.ON SE has developed a diversity concept
+that considers the recommendations of the German Corporate
+Governance Code.
+Diversity Concept
+The diversity concept consists of the following items:
+•
+•
+When appointing members of the Management Board, the
+candidates' outstanding professional qualifications, long-
+term leadership experience and past performance, as well as
+value-driven management shall be of paramount importance.
+Members shall be capable of taking forward-looking strate-
+gic decisions. In particular, they shall be capable of managing
+businesses sustainably and of ensuring that they are consis-
+tently focused on customer needs.
+The Management Board as a whole must have expertise and
+experience in the energy sector as well as in the fields of
+finance and digitization.
+The members of the Management Board shall be leaders
+and as such shall act as role models for the employees
+through their own performance and conduct.
+•
+The compensation plan that took effect on January 1, 2017,
+was presented to the 2016 Annual Shareholders Meeting and
+approved by a majority of 91.14 percent.
+In view of the regulatory changes resulting from the Act on the
+Implementation of the Second Shareholder Rights Directive
+("ARUG II") and the new version of the German Corporate Gover-
+nance Code, which took effect on March 20, 2020, the Super-
+visory Board reviewed and revised the Management Board's
+current compensation plan. The Supervisory Board will submit
+the revised compensation plan to the 2021 Annual Sharehold-
+ers Meeting for approval. It will be explained in detail in the invi-
+tation to the 2021 Annual Shareholders Meeting and is to come
+into force for all Management Board members effective Janu-
+ary 1, 2022.
+Dr.-Ing. Birnbaum was appointed Chairman of the innogy SE
+Management Board effective October 11, 2019. This appoint-
+ment ended with the entry of the transfer resolution and the
+merger of innogy SE into E.ON Verwaltungs SE into the Commer-
+cial Register on June 2, 2020. During his tenure at innogy SE,
+Dr.-Ing. Birnbaum also remained, as in the prior year, as Chief
+Operating Officer-Integration a member of the E.ON SE Manage-
+ment Board and therefore had a dual mandate within the mean-
+ing of Section 88, Paragraph 1, Sentence 2 of the German Stock
+Corporation Act (see pages 92 and 93 for details). The compen-
+sation modalities that apply to Dr.-Ing. Birnbaum due to his dual
+mandate are explained in detail in the section entitled "Total
+Compensation in 2020" on page 92.
+The following table provides a summary overview of the indi-
+vidual components of the Management Board's compensation
+as well as their respective metrics and parameters:
+Management Board Chairman: €1,240,000
+•
+Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination
+81
+F8
+•
+•
+⋅
+•
+Target bonus (target amount of the bonus at 100 percent target attainment):
+- Target amount for Management Board Chairman: €1,417,500
+- Target amount for Management Board members: €675,000-€825,000
+Cap: 200 percent of target bonus
+Amount of bonus depends on:
+Depends on:
+EPS versus budget
+Individual
+•
+(up/down or "bonus/malus adjustment")
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+Pension benefits
+Summary Overview of Compensation Components¹
+Compensation component
+Non-performance-based
+compensation
+Metric/Parameter
+Base salary
+Fringe benefits
+Performance-based compensation
+Annual bonus
+Possibility of special
+compensation
+Long-term variable compensation:
+E.ON Share Matching Plan (granted
+until 2016)
+Long-term variable compensation:
+E.ON Performance Plan
+(granted from 2017)
+Final-salary-based benefits²
+the conclusion
+Non-Performance-Based Compensation
+of the financial
+year
+matching
+1/3: LTI
+component
+Vesting period: 4 years
+Following the Supervisory Board's decision to allocate a new
+tranche, Management Board members initially received vested
+virtual shares equivalent to the amount of the LTI component
+of their bonus. The determination of the LTI component took
+into consideration the overall target attainment of the old com-
+pensation plan's bonus for the preceding financial year. The
+number of virtual shares was calculated on the basis of the
+amount of the LTI component and E.ON's average stock price
+during the last 60 days prior to the four-year vesting period.
+Furthermore, Management Board members could receive, on the
+basis of annual Supervisory Board decisions, a base matching
+of additional non-vested virtual shares in addition to the virtual
+shares that resulted from their LTI component. In addition,
+Management Board members could, depending on the company
+performance during the vesting period, receive performance
+matching of up to two additional non-vested virtual shares per
+share that resulted from base matching.
+The arithmetical total target amount allocated at the start of
+the vesting period, which began on April 1 of the year in which
+a tranche was allocated, was therefore the sum of the value of
+the LTI component, base matching, and performance matching
+(depending on the degree of attainment of a predefined com-
+pany performance target).
+Base
+For the purpose of performance matching, the company perfor-
+mance metric for tranches granted from 2013 to 2015 was ini-
+tially E.ON's average ROACE during the four-year vesting period
+compared with a target rate of return set in advance by the
+Supervisory Board for the entire period at the time it allocated
+a new tranche. Pursuant to a Supervisory Board resolution,
+from the 2016 financial year onward these performance targets
+were based on ROCE. In view of the Uniper spinoff, this adjust-
+ment was necessary because the ROACE targets were based
+on old planning figures that did not foresee the Uniper spinoff.
+Furthermore, from the start of 2016, the Company no longer
+used ROACE as a key performance indicator and it was therefore
+no longer available. In addition, the anticipated reduction in
+E.ON's stock price resulting from the Uniper spinoff had to be
+factored in by means of a conversion method.
+86
+Extraordinary events are not factored into the determination
+of target attainment for company performance. Depending on
+the degree of target attainment for the company performance
+metric, each virtual share resulting from base matching may be
+matched by zero to two additional virtual shares at the end of
+the vesting period. If the predetermined company performance
+target is fully attained, Management Board members receive
+one additional virtual share for each virtual share resulting from
+base matching. Linear interpolation is used to translate inter-
+mediate figures.
+At the end of the vesting period, the virtual shares held by
+Management Board members are assigned a cash value based
+on E.ON's average stock price during the last 60 days prior to
+the end of the vesting period. To each virtual share is then added
+the aggregate per-share dividend paid out during the vesting
+period. This total-cash value plus dividends-is then paid out.
+Payouts are capped at 200 percent of the arithmetical total
+target amount.
+The last complete tranche of the E.ON Share Matching Plan
+(LTI components of prior-year bonus as well as base and perfor-
+mance matching) was granted in the 2016 financial year and
+ran through March 2020 (Share Matching Plan, fourth tranche
+[2016-2020]). Because the old compensation plan was in effect
+until year-end 2016, in 2017 Management Board members
+were granted virtual shares based on the LTI components of their
+bonuses for the 2016 financial year under the terms of the E.ON
+Share Matching Plan. This tranche runs through 2021 (Share
+Matching Plan, fifth tranche [2017-2021]).
+Overall Cap
+Management Board members' annual compensation has an
+overall cap. This means that the sum of the individual compen-
+sation components in one year may not exceed 200 percent of
+the total agreed-on target compensation, which consists of
+base salary, target bonus, and the target amount of long-term
+variable compensation. The cap increases in accordance with
+the amounts of fringe benefits and company pension benefits
+from the respective financial year.
+Compensation Report
+dividends
+= €
+average in % plus
++
+Dividends
+Payout Amount
+Capped at 200%
+of target amount
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+85
+59
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the
+last 60 days prior to the end of the vesting period. This amount
+is increased by the dividends distributed on E.ON stock during
+the vesting period and then paid out. The sum of the payouts
+is capped at 200 percent of the contractually agreed-on target
+amount.
+E.ON Share Matching Plan (Granted until 2016)
+Until the introduction of the new compensation plan on January 1,
+2017, Management Board members received stock-based com-
+pensation under the E.ON Share Matching Plan. Until the begin-
+ning of the 2016 financial year, the Supervisory Board decided,
+based on the Executive Committee's recommendation, on the
+allocation of a respective new tranche for the current financial
+year, including the respective targets and the number of virtual
+shares granted to individual members of the Management Board.
+To serve as a long-term incentive for sustainable business
+performance, each tranche had a vesting period of four years.
+The tranche started on April 1 of each year.
+Performance
+matching
+ROCE
+4-year
+Stock price
+Х
+Share Ownership Guidelines
+To strengthen E.ON's capital-market focus and shareholder-
+oriented culture, effective 2017 share ownership guidelines
+apply to Management Board members. The guidelines obligate
+Management Board members to invest in E.ON stock equaling
+200 percent of base compensation (for the Management Board
+Chairperson) and 150 percent of base compensation (for the
+other Management Board members), to demonstrate that they
+have done so, and to hold the stock until the end of their service
+on the Management Board.
+Until the required investment is reached, Management Board
+members are obligated to invest amounts equivalent to the net
+payouts from their long-term compensation in actual E.ON
+stock. At December 31, 2020, the Management Board fulfilled
+the share ownership guidelines at a rate of 98.22 percent.
+Chairperson:
+200% of base
+compensation
+The vesting of Management Board members' pension entitle-
+ments (both contribution-based and final-salary-based pension
+plans) is governed by the provisions of the German Occupational
+Pensions Improvement Act ("BetrAVG").
+The Supervisory Board reviews, on a regular basis, the benefits
+level of Management Board members and the resulting annual
+and long-term expense and, if necessary, adjusts the payments.
+Settlement Payments for Termination of
+Management Board Duties
+In line with the German Corporate Governance Code's recom-
+mendation, the service agreements of Management Board
+members include a settlement cap. Under the сар, settlement
+payments in conjunction with a termination of Management
+Board duties may not exceed the value of two years' total com-
+pensation. In addition, no more than the remaining term of the
+member's service agreement is to be compensated.
+In the event of a premature loss of a Management Board position
+due to a change of control, Management Board members are
+entitled to settlement payments. The change-of-control agree-
+ments stipulate that a change in control exists in three cases:
+a third party acquires at least 30 percent of the Company's voting
+rights, thus triggering the automatic requirement to make an
+offer for the Company pursuant to Germany's Stock Corporation
+Takeover Law; the Company, as a dependent entity, concludes
+a corporate agreement; the Company is merged with a non-
+affiliated company. Management Board members are entitled
+Compensation Report
+88
+to a settlement payment if, within 12 months of the change of
+control, their service agreement is terminated by mutual consent,
+expires, or is terminated by them (in the latter case, however,
+only if their position on the Management Board is materially
+affected by the change in control). Management Board members'
+settlement payment consists of their base salary and target bonus
+plus fringe benefits for two years. The settlement payments
+for Management Board members may not exceed 100 percent
+of the above-described settlement cap.
+The service agreements of Management Board members
+include a non-compete clause. For a period of six months after
+the termination of their service agreement, Management Board
+members are contractually prohibited from working directly
+or indirectly for a company that competes directly or indirectly
+with the Company or its affiliates. Management Board members
+receive a compensation payment for the period of the non-
+compete restriction. The prorated payment is based on 100 per-
+cent of their target compensation (without long-term variable
+compensation) but is, at a minimum, 60 percent of their most
+recently received compensation.
+Management Board Compensation in 2020
+The Supervisory Board reviewed the Management Board's
+compensation plan and the components of individual members'
+compensation. It determined that the Management Board's
+compensation is appropriate from both a horizontal and vertical
+perspective and passed a resolution on the performance-based
+compensation described below. It made its determination of
+customariness from a horizontal perspective by comparing the
+compensation with that of companies of a similar size. For this
+purpose, the companies listed in the DAX were included in the
+peer group. The Supervisory Board's review of appropriateness
+also included a vertical comparison of the Management Board's
+compensation with that of the Company's top management and
+the rest of its workforce. In the Supervisory Board's view, in the
+2020 financial year there was no reason to adjust the Manage-
+ment Board members' target compensation.
+The 2020 Bonus
+Based on the company performance and the individual perfor-
+mance factor, the annual bonuses of Management Board mem-
+bers for the 2020 financial year totaled €4.4 million (prior year:
+€6.0 million).
+To determine the company performance for the 2020 financial
+year, actual EPS based on adjusted net income was compared
+with the target value (budget) set by the Supervisory Board
+before the start of the financial year. In the 2020 financial year,
+E.ON's earnings were affected by the following special situation:
+due in particular to the repercussions of the Covid-19 pandemic
+in conjunction with an exceptionally mild winter, electricity and
+gas consumption remained below the budget. This led to lower
+sales volumes in the sales business as well as lower transport
+volumes in the network.
+In the 2020 financial year, actual transport volumes in E.ON's
+electricity and gas networks in Germany were significantly below
+the forecast values. The volume-weighted bandwidths of the
+deviations between forecast values and actual values across all
+of the E.ON Group's large distribution system operators in
+Germany in the past years lies in average between -1.4 percent
+and +1.4 percent. However, there are no significant deviations
+in the long-term volume-weighted average. The exceptionally
+high volume-weighted deviation of -2.7 percent in the 2020
+financial year resulted in a €220 million reduction in earnings.
+Nevertheless, due to the regulatory mechanisms relevant for
+E.ON the reductions in revenue caused by forecast shortfalls
+(higher forecast values than actual values) in the 2020 financial
+year will be almost fully offset in subsequent years. The approved
+revenue caps will be earned over time regardless of the transport
+volumes. Consequently, failure to correct these revenue short-
+falls in the 2020 financial year related to the network business
+would result in the Management Board being unjustifiably placed
+in a worse position: the revenue shortfalls would lead to a lower
+level of attainment of the company targets for the 2020 financial
+year due to the negative deviation from plan, whereas the off-
+setting additional revenues as described above would not lead to
+of a Management Board member's death, the pension plan
+includes benefits for the widow and each orphan that are equal
+to 60 percent and 15 percent, respectively, of the deceased's
+pension entitlement. Together, pension payments to a widow and
+children may not exceed 100 percent of the deceased Manage-
+ment Board member's pension.
+Stock Price
+The Company has agreed to a pension plan based on final salary
+for the Management Board Chairman, Dr. Johannes Teyssen,
+who was appointed to the Management Board before 2010.
+Following the end of his service for the Company, Dr. Johannes
+Teyssen is entitled to receive lifelong monthly pension payments.
+Dr. Johannes Teyssen's pension entitlements provide for annual
+pension payments equal to 75 percent of his annual base salary.
+The full amount of any pension entitlements from earlier employ-
+ment is offset against these payments. In addition, in the case
+87
+Base
+compensation
+Pension Entitlements
+Other Management
+Board members:
+150% of base
+compensation
+Members appointed to the Management Board since 2010 are
+enrolled in the "Contribution Plan E.ON Management Board,"
+which is a contribution-based pension plan.
+Capital contributions
+Pension account
+1 2
+3
+4
+5
+Term in years
+Report of the Supervisory Board
+Strategy and Objectives
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+The Company makes virtual contributions to Management Board
+members' pension accounts in an amount equal to a percentage
+of their pensionable income (base salary and annual bonus).
+The contribution percentage is at most 21 percent. The annual
+contribution consists of a fixed base percentage (16 percent)
+and a matching contribution (5 percent). The requirement for the
+matching contribution to be granted is that the Management
+Board member contributes, at a minimum, the same amount by
+having it withheld from his compensation. The company-funded
+matching contribution is suspended if and as long as the E.ON
+Group's ROCE is less than its cost of capital for three years in a
+row. The contributions are capitalized using actuarial principles
+(based on a standard retirement age of 62) and placed in Man-
+agement Board members' pension accounts. The interest rate
+used for each year is based on the return of long-term German
+treasury notes. At the age of 62 at the earliest, a Management
+Board member (or his survivors) may choose to have the pension
+account balance paid out as a lifelong pension, in installments,
+or in a lump sum. Individual Management Board members' actual
+resulting pension entitlement cannot be calculated precisely in
+advance. It depends on a number of uncertain parameters, in
+particular the changes in their individual salary, their total years
+of service, the attainment of company targets, and interest rates.
+For a Management Board member enrolled in the plan at the
+age of 50, the company-financed, contribution-based pension
+payment is currently estimated to be between 30 and 35 percent
+of his or her base salary (without factoring in pension benefits
+accrued prior to being appointed to the Management Board).
+☑
+Upper
+threshold
+75th percentile
+83
+Company Performance
+0-200%
+• Actual EPS vs. budget:
+Target attainment
+200%
+150%
+100%
+50%
+0%
+Х
+Individual Performance Factor
+50-150%
+Assessment of Management Board
+member's performance based on:
+• Management Board's
+overall performance
+• Individual performance
+(bonus/malus adjustment)
+Bonus
+Capped at 200% of
+the target amount
+Combined Group Management Report
+Combined Non-Financial Report
+Consolidated Financial Statements
+Other Information
+100%
+Report of the Supervisory Board
+Strategy and Objectives
+Bonus
+Combined Group Management Report
+No revisions were made to non-performance-based compensa-
+tion relative to the previous financial year.
+Management Board members receive their fixed compensation
+in twelve monthly payments.
+Management Board members receive a number of contractual
+fringe benefits, including the use of a chauffeur-driven company
+car. The Company also provides them with the necessary tele-
+communications equipment, covers costs that include those for
+a periodic medical examination, and pays the premium for an
+accident insurance policy.
+Performance-Based Compensation
+Likewise, no revisions were made to performance-based com-
+pensation relative to the previous financial year.
+55 percent of performance-based compensation depends on
+the attainment of long-term targets, ensuring that the variable
+compensation is sustainable under the criteria of Section 87 of
+the German Stock Corporation Act.
+Annual Bonus
+Management Board members' annual bonus (45 percent of the
+performance-based compensation) consists of a cash payment
+made after the end of the financial year.
+The amount of the annual bonus is determined by the degree
+to which certain performance targets are attained. The target-
+setting mechanism consists of company performance targets
+and individual performance targets.
+Non-performance-
+based compensation
+(-30%)
+Base salary
+Share ownership guidelines
+(Target
+amount)
+performance
+Paid out in cash
+The company performance is assessed on the basis of earnings
+per share ("EPS"), E.ON's key performance indicator. EPS used
+for this purpose is derived from adjusted net income as disclosed
+in the Annual Report. The EPS target for each year is set by the
+Supervisory Board, taking into account the approved budget.
+Because the budget is derived from the Company's corporate
+strategy, no specific target figures are disclosed ex ante for
+competitive reasons. The target is fully achieved if actual EPS is
+equal to the target. If actual EPS is 37.5 percent or more below
+the target, this constitutes zero percent attainment. If actual
+EPS is 37.5 percent or more above the target, this constitutes
+200 percent attainment. Linear interpolation is used to trans-
+late intermediate EPS figures into percentages.
+Target attainment
+200%
+175%
+Х
+150%
+125%
+100%
+75%
+50%
+25%
+0%
+25th percentile
+Lower
+threshold
+50th percentile
+(Median)
+Target amount
+Percentile
+achieved
+by E.ON
+of the STOXX® Europe 600 Utilities index (annual lock-in)
+-37.5% Budget +37.5% EPS
+TSR of E.ON stock compared with the companies
+of Virtual Shares
+Granted
+The Supervisory Board determines the degree to which Man-
+agement Board members have attained the targets of their indi-
+vidual performance factors, giving adequate consideration to
+their individual and collective contributions. The factors range
+between 50 and 150 percent. The amount of the bonus can
+therefore be adjusted up or down depending on performance
+(in the sense of a "bonus/malus adjustment”).
+The targets for individual performance factors are set at the
+beginning of each financial year. No specific target figures are
+disclosed ex ante for competitive reasons. The Supervisory
+Board may also factor in, for example, strategic targets, quanti-
+tative and qualitative customer targets as well as performance
+indicators for the Company's core businesses or matters such
+as health, safety, and environment and personnel management.
+In addition, the Supervisory Board may, as part of the annual
+bonus, grant Management Board members special compensation
+for outstanding attainments. In assigning Management Board
+members their individual performance factors and in granting
+special compensation, the Supervisory Board pays attention to
+the criteria of Section 87 of the German Stock Corporation Act
+and of the German Corporate Governance Code.
+As before, the maximum bonus that can be attained (including any
+special compensation) is 200 percent of the target bonus (cap).
+Compensation Report
+84
+Long-Term Variable Compensation
+In the 2020 financial year, long-term variable compensation
+consisted of tranches from several financial years granted under
+two different plans. First, tranches of the E.ON Performance
+Plan-Performance Plan, first tranche (2017-2020), second
+tranche (2018-2021), third tranche (2019-2022), and fourth
+tranche (2020-2023)-were granted in 2017, 2018, 2019,
+and 2020. The vesting period of the first tranche of the E.ON
+Performance Plan ended at the close of the 2020 financial year.
+Payment will be made in April 2021. Second, the last tranches
+of the E.ON Share Matching Plan-Share Matching Plan, fourth
+tranche (2016-2020) and the LTI components of the bonus from
+2016 Share Matching Plan, fifth tranche (2017-2021)-were
+granted in 2016. The vesting period of the fourth tranche of the
+E.ON Share Matching Plan ended in March 2020. Payment was
+made in April 2020.
+E.ON Performance Plan (Granted from 2017)
+Management Board members receive stock-based, long-term
+variable compensation under the E.ON Performance Plan, which
+replaced the previous E.ON Share Matching Plan as the Compa-
+ny's new long-term compensation plan effective January 1, 2017.
+Each tranche of the E.ON Performance Plan has a vesting period
+of four years to serve as a long-term incentive for sustainable
+business performance. Vesting periods start on January 1.
+The Supervisory Board grants virtual shares to each member
+of the Management Board in the amount of the contractually
+agreed-on target amount. The conversion into virtual shares is
+based on the fair market value on the date when the shares are
+granted. The fair market value is determined by applying methods
+accepted in financial mathematics, taking into account the
+expected future payout, and hence, the volatility and risk asso-
+ciated with the E.ON Performance Plan. The number of granted
+virtual shares may change in the course of the four-year vesting
+period depending on the total shareholder return ("TSR") of
+E.ON stock compared with the TSR of the companies in a peer
+group ("relative TSR").
+TSR is the yield of E.ON stock. It takes into account the stock
+price, including the assumption that dividends are reinvested,
+and is adjusted to exclude changes in capital. The peer group
+used for relative TSR will be the companies in E.ON's peer index,
+the STOXX® Europe 600 Utilities.
+During a tranche's vesting period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the
+peer group and set for that year. E.ON SE's TSR performance
+in a given year determines the final number of one fourth of the
+virtual shares granted at the beginning of the vesting period.
+For this purpose, the TSRS of all companies are ranked, and
+E.ON SE's relative position is determined based on the percentile
+reached. Target attainment is 100 percent if E.ON SE's TSR is
+equal to the median of the peer group. The lower threshold is the
+25th percentile; a TSR performance below this threshold would
+reduce the number of virtual shares granted by one quarter. If
+E.ON's performance is at or above the 75th percentile (upper cap),
+the quarter of virtual shares granted for that particular year
+increases to a maximum of 150 percent. Linear interpolation is
+used to translate intermediate figures into percentage.
+Initial Number
+TSR Performance Relative to
+Peer Group
+Report of the Supervisory Board
+Strategy and Objectives
+Management Board members: €700,000-€800,000
+2FY 2020 adjusted due to divestment Essent BE and
+ELMŰ USP license in Hungary.
+- Quasi-regulated and long-term contracted business (%)
+-124
+73
+61
+-Regulated business (%)
++14
+6,905
+7,889
+Adjusted EBITDA¹
++27
+60,944
+77,358
+2020
+2021
++/-%
+2020
+2021
+2021
+E.ON Annual Report 2021
+Energy Networks
+III
+Contents
+Search
+5
+↓
+9
+Key Figures of the E.ON Group
+Financial Figures
+€ in millions
+Sales
+Sustainability Figures
+Back
+4
++14
+- Merchant business (%)
+107
+Social
+Reduction of serious incidents and fatalities ("SIF")¹
+among employees
+2020
+2021
+0.09
+0.09
+99
+≤0.07
+→ 2030 target
+2026 target
+¹Share of E.ON SE shareholders based on outstanding shares
+(weighted average)
+Increase in the proportion of female executives
+2020
+2021
+→ 2031 target
+¹Number of SIF per million hours of work.
+2021
+2020
+2021
+CO₂ footprint reduction together with
+34
+23
++114
+Environment
+CO2 footprint reduction:
+Scope 1 (millions of metric tons)
+our customers (millions of metric tons)
+Scope 2 (millions of metric tons) (market-based)
+EU taxonomy-aligned investments⁹ (%)
+3.71
+5.73
+-0.90
+000
+¹Relative to 2019 figures.
+Scope 3 (millions of metric tons)
+21%
+21%
+2020
+7,734
+42
+Average age of the E.ON Group workforce
+32
+32
+-7
+77,488
+72,169
+ESG factored into Management Board compensation (from 2022 onward)
+100
+100
+Independent Supervisory Board members (%)
+Proportion of female employees (%)
+E.ON Group employees (at year-end)
+Employee Figures
+30
+30
+Share of female Supervisory Board members 16 (%)
+0.63
++52
+Community contribution (€ in millions)
+12.3
+11.1
+Dividend per share? (€)
+42
+0.49
++4
+Corporate Governance
+Dividend payout
+1,278
+1,225
++5
+0.47
+E.ON Annual Report 2021
+¹Adjusted for non-operating effects. 2Corresponds to the cash flow from operating activities. 3Corresponds to the cash flow from operating activities
+before interest and taxes. 4Change in percentage points. "Attributable to shareholders of E.ON SE. Based on shares outstanding (weighted average).
+'For the respective financial year; the 2021 figure represents management's dividend proposal.. 8Number of employees does not include apprentices,
+working students, or interns. This figure reports persons.
+⁹As a ratio of EU taxonomy-eligible investments, operating expenditures and sales. 10 This KPI quantifies the avoided emissions that contribute to a
+low-carbon economy in connection with our clients. 11 Connected renewable capacity calculated as percentage of total sum of all connected generation
+capacities; 2020 figure adjusted. 12 Number of SIF per million hours of work. 13LTIF measures the number of work-related accidents resulting in lost
+time per million hours of work. 14 Formal training hours per employee per year. 15Officially confirmed values from 2020. 16 Refers to shareholder
+representatives.
+Environment
+125
+100
+18.9
+16.7
+2020
+in Slovakia.
+2021
+2021
+Share of green power sales (%)
+eMobility charging point installations
+33
+28
+9,484
+2020
+2020 2021
+¹Includes customers in Turkey and ZSE's customers
+49.9
+Contents Q Search Back
+Connecting
+Everyone To
+Good Energy
+YORK NEW
+༢།
+10
+2020 2021
+E.ON is tackling the climate emergency with thousands of
+sustainable projects. Examples include Europe's first hotel run
+on hydrogen fuel cells, or solutions that transform the energy
+cycle of our megacities and help villages to become energy-in-
+dependent in the future. Additionally, our grid connects people
+everywhere to good energy. We are driving the energy transi-
+tion together with our customers, partners, employees and
+communities - because we believe in the power of the many.
+E.ON Annual Report 2021
+Energy Infrastructure Solutions ("EIS")
+Generated energy: power, heat, and cooling
+(TWh)
+Operational
+key figures
+Sustainability
+key figures
+51.3
+We have a real responsibility to power a healthier planet with
+good energy for everyone now and for future generations.
+≥32%
+Solid Finances
+Capital structure with strong BBB/Baa rating
+Debt factor between 4.8 and 5.2
+(€ in millions)
+5,186 4,988
+2020 2021
+291
+Combined Group Management Report
+282
+289
+36
+Corporate Profile
+Net income/loss attributable to shareholders of E.ON SE
+Adjusted net income¹
+99
+EU taxonomy-aligned sales (%)
++318
+1,270
+5,305
+Net income/loss
+98
+Germany
+12020 figure adjusted.
+2020 2021
+2020 2021
+2021
+2020
+Adjusted EBITDA-
+Energy Networks
+100.38
+97
+Adjusted EBIT¹
+4,723
+3,776
++25
+EU taxonomy-aligned operating expenditures (%)
+3.92
+6.09
+107.96
+8.454
+10
+9.654
+2020
+1.264
+1.318
+¹Including Turkey and the Slovakian ZSEs.
+Operational
+key figures
+5.4 (5.4)
+2021
+Gas
+Power
+Gas
+Power
+Energy transmitted (billion kWh)
+Total length of electricity and gas grids (million km)
+Regulated asset base (RAB)¹ (€ in billions)
+35.0 in 2021 (34.9 in 2020)
+29.6 (29.5)
+Sweden
+337.8
+233.7
+77.7 78.2
+11
+Average duration of grid outages
+for electricity¹ (SAIDI) (minutes)
+Social
+Number of smart
+meter installations
+in E.ON markets
+(thousands)
+Share of renewables gen-
+eration capacity connected
+to E.ON's power grid¹ (%)
+325.8
+networks with ecological
+corridor management (%)
+Environment
+key figures
+Sustainability
+2020 2021
+2020 2021
+216.8
+Proportion of E.ON
+Czech Republic
+22
+22
+5,287
+4,069
+Cash provided by operating activities²
+10
+11
+77.7
+-23
+78.2
++14
+4,171
+4,762
+Investments
++53
+1,638
+Share of renewables generation capacity connected to E.ON's power grid ¹¹ (%)
+Ecological network corridor management (%)
+2,503
+Smart meter installations (thousands)
+8.454
+Corporate Governance
+E.ON's ambitious sustainability targets have
+been factored into the Management Board's
+compensation since 2022.
+E.ON Annual Report 2021
+Contents
+Search
+食
+9.654
+↓
+7
+eMmobility charging point installations
+-5
+5,948
+5,639
+Cash provided by operating activities before interest and taxes³
+Back
+0.96
+99
+CO₂ footprint reduction together with our customers 10 (millions of metric tons)
+Adjusted EBITDA-
+☑
+Search
+Contents
+E.ON Annual Report 2021
+¹System average interruption duration index (minutes per year); officially confirmed
+figures from 2020.
+Customer Solutions
+2020 2021
+192
+2020 2021
+116
+146
+2020 2021
+22
+182
+107
+(€ in millions)
+1,026
++361
+1,017
+4,691
+Customer Solutions
+Number of residential customer solutions
+installed (solar systems, batteries, efficient
+heating such as heat pumps, wall-mounted
+charging points) (thousands)
+(millions)
+1,492
+Number of electricity and gas customers¹
+Operational and Sustainability Key Figures
+8
+00
+Back
+↑
+2020
+Energy sales and residential customer solutions
+Adjusted net income per share 5.6 (€)
+Operational and Sustainability Key Figures
+182
+Adjusted EBITDA (€ in millions)
+Target by 2026
+2020 2021
+The energy transition in Europe is irreversible and gaining
+speed. For the energy industry, this presents new chal-
+lenges, but also enormous opportunities. Through the
+combination of network and customer business, E.ON is
+in a position to play a leading role in the decentralized,
+carbon-free energy world of tomorrow. This gives us an
+immense social responsibility that we want to address
+and a unique business opportunity that we want to seize.
+To achieve our goal, we have adapted our corporate strat-
+egy and embarked on a growth path. We have set three
+clear priorities on which we will focus our human and
+financial resources in the coming years: Sustainability,
+Digitalization and Growth. Sustainability is at the heart of
+our strategy and will be the guiding principle for all our
+future actions.
+Total investments of
+around €27 billion
+3.896
+4.464
+-75%
+-100%
+2040 target
+→
+5,980 6,272
+Investments (€ in billions)
+→ 2030 target
+5.7
+3.7
+6.1
+3.9
+2020
+2021
+→ Target by 2026
+2020 2021
+Scope 2
+Scope 1
+Growth in Core Business
+-7,800
+2020 2021
+→ 2026 target
+Search
+= Contents
+E.ON Annual Report 2021
+3
+Our solutions help customers meet their personal energy needs
+and decarbonization goals. This includes both energy sales with
+its diverse green electricity and green gas tariffs, and our solutions
+business with its innovative, sustainable and digital products and
+services. With solar power systems, e-mobility, energy storage,
+sensible energy control and solutions for sector coupling our cus-
+tomers reduce their costs and emissions on the one hand-and
+increase their comfort and quality of life on the other. This applies
+equally to private customers and small businesses as well as large
+companies and municipalities.
+Customer Solutions
+Our distribution networks are the backbone of the new energy
+world. We are gradually developing them into intelligent platforms
+that control complex energy and data flows and provide customers
+with new options for dealing with energy. Without distribution net-
+works, there can be no energy transition and no climate protection.
+The expansion, modernization and operation of distribution net-
+works support security of supply and ensure the most efficient use
+of green electricity. This makes our networks the foundation of live-
+able cities, communities and regions.
+Energy Networks
+Europe's energy system is becoming ever lower in
+CO2, more decentralized and digital. In short: more
+sustainable. Our two core business areas-energy
+networks and customer solutions—are making a
+significant contribution to this. As one of the largest
+European operators of energy networks and energy
+infrastructure and provider of innovative customer
+solutions, the contribution of our around 72,000
+employees is crucial to successfully driving forward
+the energy transition in Europe.
+About E.ON
+Contents Q Search ← Back
+E.ON Annual Report 2021
+Everyone To
+Good Energy
+Connecting
+In our markets, we encounter a wide
+variety of customer needs, new market
+participants and technologies, and a
+constantly evolving legal framework
+for the energy transition. Our expecta-
+tion is clearly defined:
+2
+← Back
+Q Search
+Contents
+e.on
+Annual Report
+2021
+#StandWithUkraine
+Earnings per share from
+adjusted net invome ("EPS")¹ (€)
+CO₂ footprint reduction (Scope 1 & 2)¹
+(millions of metric tons)
+5
+Environment
+€0.47
+96
+Disclosures Regarding Takeovers
+94
+Internal Control System for the Accounting Process
+92
+Risks and Chances Report
+83
+Forecast Report
+81
+Business Report
+Corporate Governance Declaration
+53
+296
+Employees
+48
+Summary of Financial Highlights
+Boards
+Independent Practitioner's Report on Non-Financial Reporting
+Independent auditor's report
+294
+Strategy and Innovation
+42
+Financial Calendar and Imprint
+4
+Contents
+E.ON Annual Report 2021
+€0.49
+Dividend Growth
+Our Business Strategy in Figures
+6
+Leonhard Birnbaum
+E.ON CEO
+"E.ON's sustainability
+strategy isn't something
+separate. Our business is
+strategically aligned with
+sustainability."
+← Back
+Search
+192
+E.ON Geschäftsbericht 2021
+Sustainability course successfully continued: E.ON
+supports the United Nations Environment Programme
+with ecological power-line pathway management
+Success of Preussen Elektra: Agreement on output rights
+for nuclear power stations with positive outcome for
+E.ON
+Framework conditions in the German network business
+set: Federal Network Agency sets return on equity
+for the fourth regulatory period for electricity and gas
+at 5.07 percent
+E.ON adopts new growth strategy with targets through
+2026 with focus on sustainability and digitalization
+Dividend of €0.49 per share proposed for the 2021
+financial year
+2021 financial year successfully concluded despite the
+ongoing pandemic and crisis on energy markets—
+adjusted EBIT and adjusted net income slightly above
+the forecast that was revised in August
+E.ON at a Glance
+5
+།
+2021
+← Back
+Contents Q Search
+|||
+Annual dividend
+growth up to 5 percent
+↑
+Contents
+E.ON at a Glance
+2.1
+Lost Time Injury Frequency (LTIF) among employees13
+Baa2
+Baa2
+Equity
+Moody's credit rating
+0.09
+0.09
+Serious incidents and fatalities ("SIF") among employees 12
+BBB
+BBB
+S&P credit rating
+Social
+-17
+5.9
+4.9
+Debt factor
+28
+33
+Share of green power sales (%)
+-5
+40,736
+38,773
+Economic net debt (at year-end)
+9.484
+7.734
+34
+Declaration of the Management Board
+281
+1.5
+60,911
+60,750
+0
+System average interruption duration index ("SAIDI") 15 (minutes per year)
+ROCE (%)
+7.8
+6.2
+Back
++1.64
+Germany
+22
+22
+Sweden
+116
+146
+Earnings per share 5, 6 (€)
+1.80
+Other Information
+0.39
+Czech Republic
++30
+95,385
+119,759
+Total assets
+10.3
+14.7
+Training hours 14
++98
+9,055
+17,889
+21
+21
+Female executives (%)
++362
+279
+Average capital employed
+CEO Letter
+22
+22
+Consolidated Balance Sheets
+167
+Consolidated Statement of Recognized Income and Expenses
+105
+Compensation Report
+5699
+E.ON at a Glance
+Report of the Supervisory Board
+Our Business Strategy in Figures
+7
+Operational and Sustainability Key Figures by Segment
+Key Figures of the E.ON Group
+137
+Separate Combined Non-Financial Report
+166
+Consolidated Statement of Income
+165
+Connecting Everyone To Good Energy
+10
+10
+To Our Investors
+Consolidated Financial Statements
+163
+E.ON on the Capital Market
+27
+The E.ON Management Board
+26
+3222
+29
+Notes
+171
+Consolidated Statement of Changes in Equity
+169
+168
+Consolidated Statement of Cash Flows
+Back
+•
+↑
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Search
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Back
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report
+↑
+Combined Group Management Report
+Search
+Contents
+•
+•
+(as stipulated by the AktG) are already supervisory board mem-
+bers in ten commercial companies that are required by law to
+form a supervisory board,
+•
+To ensure that, after the acquisition of the majority of the shares of
+innogy SE, innogy's employees are represented without delay on the
+Supervisory Board of E.ON SE as the Group's parent company, the
+Supervisory Board was enlarged to 20 members for a limited period
+of time. The Articles of Association provide for the Supervisory Board
+to again consist of 12 members from the conclusion of the 2023
+Annual Shareholders Meeting. Pursuant to E.ON SE's Articles of
+Association, the Supervisory Board is composed of an equal number
+of shareholder and employee representatives. The shareholder rep-
+resentatives are elected by the shareholders at the Annual Share-
+holders Meeting; the Supervisory Board nominates candidates for
+this purpose. The Annual Shareholders Meeting decides on the
+elections by individual vote. Pursuant to the agreement regarding
+employees' involvement in E.ON SE, the other currently ten members
+of the Supervisory Board are appointed by the SE Works Council, with
+the provision that at least three different countries are represented
+and one member is selected by a trade union that is represented at
+E.ON SE or one of its subsidiaries in Germany. Persons are not eligi-
+ble as Supervisory Board members if they:
+Supervisory Board
+with risk-mitigation strategies (including hedging strategies). In
+collaboration with relevant departments, the committee ensures
+and refines the implementation of, and compliance with, company
+policies regarding commodity risks, credit risks, and enterprise risk
+management.
+A Risk Committee ensures the correct application and implementa-
+tion of the legal requirements of Section 91 of the AktG. This com-
+mittee monitors the E.ON Group's risk situation and its risk-bearing
+capacity and devotes particular attention to the early identification
+of developments that could potentially threaten the Company's
+continued existence. In this context, the Risk Committee also deals
+The Management Board has established a Disclosure Committee
+and an Ad hoc Committee for issues relating to financial disclosures.
+These committees ensure that all information is disclosed in a correct
+and timely fashion.
+The Management Board has no board committees but has estab-
+lished a number of committees that support it in the fulfillment of its
+tasks. The members of these committees are senior representatives
+of various departments of E.ON SE whose experience, responsibilities,
+and expertise make them particularly suited for their committee's
+tasks. Among these committees are the following:
+are legal representatives of another corporation whose super-
+visory board includes a member of the Company's Management
+Board,
+Management Board may only assume other corporate positions,
+particularly appointments to the supervisory boards of non-Group
+companies, with the consent of the Executive Committee of the
+Supervisory Board. There were no conflicts of interest involving
+members of the E.ON SE Management Board in the year under
+review.
+98
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+were a member of the Company's Management Board in the
+past two years, unless the person concerned is nominated by
+shareholders who hold more than 25 percent of the Company's
+voting rights.
+The members of the E.ON SE Supervisory Board fulfill these require-
+ments. Pursuant to the AktG, at least one member of the Supervi-
+sory Board must have expert knowledge in accounting, and at least
+another member must have expert knowledge in the auditing of
+financial statements. The Supervisory Board believes that, in partic-
+ular, Andreas Schmitz and Ulrich Grillo meet this requirement. It
+also believes that its members in their entirety are familiar with the
+sector in which the Company operates.
+The Supervisory Board oversees the Company's management and
+advises the Management Board on an ongoing basis. The Manage-
+ment Board requires the Supervisory Board's prior approval for sig-
+nificant transactions and measures, such as the Group's investment,
+finance, and personnel plans; the acquisition or sale of companies,
+equity interests, parts of companies (with the exception of equity
+investments), or asset investments whose fair value or, in the absence
+of a fair value, whose book value exceeds €300 million; financing
+measures that exceed €1 billion and have not been covered by
+Supervisory Board resolutions regarding finance plans; and the
+E.ON Annual Report 2021
+are legal representatives of an enterprise controlled by the
+Company,
+Any material transactions between the Company and members of
+the Management Board, their relatives, or entities with which they
+have close personal ties require the consent of the Executive Com-
+mittee of the Supervisory Board. No such transactions took place in
+the reporting period.
+A financial calendar lists the dates on which the Company's periodic
+financial reports are released.
+Search
+Dr. Karl-Ludwig Kley
+(Chairman of the Supervisory Board of E.ON SE)
+For the Board of Management of E.ON SE:
+Dr. Leonhard Birnbaum
+(Chairman of the Board of Management of E.ON SE)
+Combined Group Management Report
+Because of the one-off deviation from recommendation G.8 of the
+German Corporate Governance Code, in March 2021 the E.ON SE
+Management Board and Supervisory Board also issued an intrayear
+declaration of compliance. The deviation resulted from the Super-
+visory Board's decision to offset special effects in the network busi-
+ness for the determination and definition of target attainment for
+the bonus for the 2020 financial year.
+These declarations and those of the previous five years are continu-
+ously available to the public on the Company's Internet page.
+Compensation Report and Compensation System
+The resolution adopted by the Annual Shareholders Meeting on
+May 19, 2021, pursuant to Section 113, Paragraph 3 of the German
+Stock Corporation Act (known by its German abbreviation, "AktG")
+on the compensation of the members of the Supervisory Board and
+the applicable compensation system pursuant to Section 87a, Para-
+graphs 1 and 2, Sentence 1 of the AktG, which was also approved
+by the Annual Shareholders Meeting on May 19, 2021, are available
+on the Internet at www.eon.com. For Management Board members
+already appointed, the new compensation system applies effective
+from January 1, 2022. The Compensation Report and the auditor's
+report pursuant to Section 162 of the AktG are also made publicly
+available at www.eon.com/compensation-report.
+Relevant Information about Management
+Practices
+Corporate Governance
+E.ON views good corporate governance as a central foundation of
+responsible and value-oriented management, efficient collaboration
+between the Management Board and the Supervisory Board, trans-
+parent disclosures, and appropriate risk management.
+In the past financial year, the Management Board and Supervisory
+Board paid close attention to E.ON's compliance with the German
+Corporate Governance Code's recommendations and suggestions.
+They determined that E.ON SE fully complies, or will comply, with
+all of the Code's recommendations and also with nearly all of its
+suggestions, with the exception of the Code's recommendation G.8.
+Transparent Management
+Transparent management is a high priority of the Management
+Board and Supervisory Board. E.ON's shareholders, all capital market
+participants, financial analysts, shareholder associations, and the
+media regularly receive up-to-date information about the situation
+of, and any material changes to, the Company. E.ON primarily uses
+the Internet to provide equal access to comprehensive and timely
+information.
+E.ON SE issues reports about its and the E.ON Group's situation and
+earnings by the following means:
+•
+Annual Report and Annual Finance Statements
+•
+For the Supervisory Board of E.ON SE:
+Essen, December 14, 2021
+The Executive Board and Supervisory Board further declare that the
+recommendations of the "Government Commission on the German
+Corporate Governance Code" (version dated December 16, 2019)
+published by the Federal Ministry of Justice and Consumer Protec-
+tion in the official section of the Federal Gazette on March 20, 2020,
+will be complied with in full.
+The Executive Board and Supervisory Board declare that the recom-
+mendations of the "Government Commission German Corporate
+Governance Code" (version of December 16, 2019) published by
+the Federal Ministry of Justice and Consumer Protection in the offi-
+cial section of the Federal Gazette on March 20, 2020, have been
+fully complied with since the submission of the last declaration in
+March 2021.
+Contents
+E.ON Annual Report 2021
+The Company issues ad hoc statements about information that
+could have a significant impact on the price of E.ON stock.
+Periodic events for investors.
+Numerous discussions with financial analysts in and outside
+Germany
+Telephone conferences held on most releases of the quarterly
+and annual results
+•
+•
+•
+↑
+Annual press s conferences and other analysts conferences
+Press releases
+•
+Half-Year Financial Report and Quarterly Statements
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+96
+96
+Corporate Governance Declaration in Accordance
+with Section 289f and Section 315d of the German
+Commercial Code
+Declaration of the Executive Board and Supervi-
+sory Board of E.ON SE pursuant to Section 161 of
+the German Stock Corporation Act on the German
+Corporate Governance Code
+•
+Risks and Chances Report
+At least two independent representatives of the shareholders
+shall have expertise in the fields of accounting, risk management
+and auditing of financial statements.
+99
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+97
+The financial calendar and ad hoc statements are available on the
+Internet.
+Managers' Transactions
+Persons with executive responsibilities, in particular members of
+E.ON SE's Management Board and Supervisory Board, and persons
+closely related to them, must disclose certain dealings in E.ON stock
+or bonds, related derivates, or other related financial instruments
+pursuant to Article 19 of the EU Market Abuse Regulation in conjunc-
+tion with Section 26, Paragraph 2, of the German Securities Trading
+Act. Notifications about such dealings in the 2021 financial year
+were published on the Internet.
+Compliance
+The goal of compliance at E.ON is to prevent or at least detect and
+put a stop to corporate misconduct. It is E.ON's responsibility never
+to deceive, lie to, or otherwise deliberately harm its customers,
+business partners, or other stakeholders. Strict compliance with
+laws and company policies is therefore the foundation of good cor-
+porate governance.
+E.ON has in place a compliance management system ("CMS") to
+mitigate the risk of compliance violations. The CMS is based on a
+number of widely recognized practices, including the promotion
+of a compliance culture. This encompasses an active commitment
+to compliance targets, the identification and analysis of compliance
+risks, and the design of a risk-adequate compliance program and
+a compliance organization.
+E.ON's Supplier Code and its Code of Conduct (both of which are
+available in the languages of all countries in which the Company
+operates) focus on the guiding principle, "Doing the right thing." They
+provide easy-to-understand guidance, in particular human rights,
+anti-corruption, fair competition, and compliant relationships with
+business partners. The Code of Conduct also contains an integrity
+test that employees can use to check whether their assessment of
+a situation is in compliance with E.ON principles and values. Every
+employee in the E.ON Group is obliged to act in accordance with the
+Code of Conduct's rules. The Code is therefore part of E.ON employ-
+ees' duties under their employment contract. Employees and third
+parties can report violations of the Code of Conduct-anonymously,
+if they wish-by means of a whistle-blower hotline. The Code of
+Conduct is published on the Internet. It is supplemented by ten
+Group-wide People Guidelines which explain in greater detail how
+employees can be sure that they are doing things right.
+Description of the Functioning of the
+Management Board and Supervisory Board
+and of the Composition and Functioning
+of Their Committees
+Management Board
+The E.ON SE Management Board manages the Company's busi-
+nesses, with all its members bearing joint responsibility for its
+decisions. It determines the Group's objectives, corporate policy,
+organizational setup, and, in consultation with the Supervisory
+Board, its fundamental strategic direction.
+Throughout 2021 the Management Board consisted of five members
+and had one Chairman. No Management Board member has more
+than two supervisory board memberships in listed non-Group com-
+panies or on the supervisory bodies of non-Group companies that
+require a similar commitment. No member of the Management Board
+has reached the general retirement age. The Management Board
+has in place policies and procedures for the business it conducts
+and, in consultation with the Supervisory Board, has assigned areas
+of responsibility to its members.
+Search
+Contents
+E.ON Annual Report 2021
+Stock with special rights granting power of control has not been
+issued. In the case of stock given by the Company to employees,
+employees exercise their rights of control directly and in accordance
+with legal provisions and the provisions of the Articles of Association,
+just like other shareholders.
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+95
+to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+to be offered, with or without consideration, for purchase and
+transferred to individuals who are or were employed by the
+Company or one of its affiliates as well as to board members of
+affiliates of the Company
+to be used for the purpose of a scrip dividend where sharehold-
+ers may choose to contribute their dividend entitlement to the
+Company in the form of a contribution in kind in exchange for
+new shares.
+In addition, the Management Board is authorized to cancel treasury
+shares, without such cancellation or its implementation requiring
+an additional resolution by the Shareholders Meeting.
+These authorizations may be utilized on one or several occasions, in
+whole or in partial amounts, separately or collectively, including
+with respect to treasury shares acquired by affiliated companies or
+companies majority-owned by the Company or by third parties for
+their account or the Company's account.
+The Management Board reports to the Supervisory Board on a reg-
+ular, timely, and comprehensive basis on all relevant issues, particu-
+larly those relating to strategy, planning, business development,
+risk situation, risk management, and compliance. It also submits
+the Group's investment, finance, and personnel plan for the next
+financial year as well as the medium-term plan to the Supervisory
+Board, generally at the last meeting of each financial year.
+In each case, the Management Board will inform the Shareholders
+Meeting about the utilization of the aforementioned authorization,
+in particular about the reasons for and the purpose of the acquisi-
+tion of treasury shares, the number of treasury shares acquired, the
+amount of the registered share capital attributable to them, the
+portion of the registered share capital represented by them, and their
+equivalent value.
+At the Annual Shareholders Meeting of May 28, 2020, shareholders
+approved a conditional increase of the Company's share capital
+(with the option to exclude shareholders' subscription rights) up to
+the amount of €264 million ("Conditional Capital 2020"). Note 20 →
+to the Consolidated Financial Statements contains more information
+about Conditional Capital 2020.
+Significant Agreements to Which the Company
+Is a Party That Take Effect on a Change of Control
+of the Company Following a Takeover Bid
+The underlying contracts of debt issued since 2007 contain change-
+of-control clauses that give the creditor the right of cancellation.
+This applies, inter alia, to bonds issued by E.ON SE and E.ON Inter-
+national Finance B.V. and guaranteed by E.ON SE and other instru-
+ments such as credit contracts. Granting change-of-control rights
+to creditors is considered good corporate governance and has
+become standard market practice. More information about financial
+liabilities is contained in the section of the Combined Group Manage-
+ment Report entitled Financial Situation and in Note 27 → to the
+Consolidated Financial Statements.
+Settlement Agreements between the Company
+and Management Board Members or Employees
+in the Case of a Change-of-Control Event
+In the event of a premature loss of a Management Board position
+due to a change-of-control event, the service agreements of Man-
+agement Board members entitle them to severance and settlement
+payments (see the detailed presentation in the Compensation Report).
+To the extent that the Company has agreed to settlement payments
+for Management Board members in the case of a change of control,
+the
+purpose of such agreements is to preserve the independence of
+Management Board members.
+A change-of-control event would also result in the early payout of
+virtual shares under the E.ON Performance Plan.
+Other Disclosure Relevant to Takeovers
+The Company has been notified about the following direct or indirect
+interests in its share capital that exceed 10 percent of the voting
+rights:
+notification on December 10, 2020, by RWE Aktiengesellschaft
+for 15 percent of the voting rights
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 28, 2020, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase, until May 27,
+2025, the Company's share capital by a total of up to €528 million
+through one or more issuances of new registered no-par-value shares
+against contributions in cash and/or in kind (authorized capital pur-
+suant to Sections 202 et seq. of the AktG; "Authorized Capital 2020").
+Subject to the Supervisory Board's approval, the Management
+Board is authorized to exclude shareholders' subscription rights.
+→ Corporate Governance Declaration
+The Chairman of the Management Board informs, without undue
+delay, the Chairman of the Supervisory Board of important events
+that are of fundamental significance in assessing the Company's
+situation, development, and management and of any defects that
+have arisen in the Company's monitoring systems. Transactions and
+measures requiring the Supervisory Board's approval are also sub-
+mitted to the Supervisory Board in a timely manner.
+E.ON Annual Report 2021
+E.ON Annual Report 2021
+In the search for qualified Supervisory Board members, due con-
+sideration shall be given to diversity. When preparing nominations
+for the election of Supervisory Board members, due consideration
+shall be given in each case to the question as to whether
+b) In addition, the Supervisory Board has adopted the following
+diversity concept so as to ensure a balanced structure of the
+Supervisory Board in terms of age, gender, personality, educational
+background and professional experience.
+All Supervisory Board members must have sufficient time avail-
+able to perform their duties on the boards of various companies.
+Persons who are not members of the management board of a
+listed company should only be eligible as members of E.ON's
+Supervisory Board if they do not have seats on a total of more
+than five supervisory boards of listed non-Group companies or
+exercise a similar function; being a chairperson of a supervisory
+board counts twice. Persons who are members of the board of
+management of a listed company should only be eligible as
+members of E.ON's Supervisory Board if they do not have seats
+on a total of more than two supervisory boards of listed non-
+Group companies, exercise a comparable function, and are not
+the chairperson of the supervisory board of a listed non-Group
+company.
+Supervisory Board membership shall be limited to no more than
+15 years.
+Members of the Supervisory Board must not have seats on the
+boards of, or act as consultants for, any of the Company's major
+competitors or have a personal relationship with one of its
+competitors.
+•
+•
+•
+The Supervisory Board shall not include more than two former
+members of the Board of Management.
+The Chairman of the Supervisory Board, the Chairman of the
+Audit and Risk Committee and the Chairman of the Executive
+Committee shall be independent of the Company and the
+Management Board.
+Given a total number of 20 Supervisory Board members, the
+shareholder representatives believe that at least six of them
+should be independent of the Company and the Management
+Board. Members shall be deemed to be independent if they have
+no personal or business relationship with the Company or its
+Management Board, where such relationship may give rise to a
+material and not merely temporary conflict of interests. In
+assessing the independence of its members from the Company
+and its Management Board, the shareholder representatives
+shall consider in particular whether a Supervisory Board mem-
+ber or a close family member was a member of the Company's
+Management Board in the two years prior to appointment, cur-
+rently has (or until the year of appointment had) a significant
+business relationship with the Company or one of its affiliates,
+either directly or as a shareholder or corporate officer of a com-
+pany outside the Group, is a close family member of a Manage-
+ment Board member, or has been a member of the Supervisory
+Board for more than 12 years.
+•
+•
+a) In this context, the following general objectives shall be observed:
+"The composition of the Supervisory Board of E.ON SE shall comply
+with the specific SE requirements and Germany's Stock Corporation
+Act, and with the recommendations of the German Corporate Gover-
+nance Code.
+In view of recommendation C.1 of the German Corporate Governance
+Code, dated December 16, 2019, and Section 289f, Paragraph 2,
+Item 6, of the German Commercial Code, the Supervisory Board
+defined specific targets for its composition, including a diversity
+concept and a competency profile for the entire Supervisory Board,
+that go beyond the applicable legal requirements. They are as follows:
+Furthermore, the Supervisory Board's rules and procedures stipu-
+lated that the Supervisory Board will hold executive sessions on a
+regular basis; that is, to meet without the Management Board.
+The Supervisory Board has established rules and procedures for
+itself, which are available on the Company's Internet page. It holds
+at least four regular meetings in each financial year. Its rules and
+procedures include mechanisms by which, if necessary, a meeting
+of the Supervisory Board or one of its committees can be called at
+any time at the request of a Management Board member. Share-
+holder representatives and employee representatives can prepare
+for Supervisory Board meetings separately. In the event of a tie vote
+on the Supervisory Board, the Chairman has the tie-breaking vote.
+conclusion, amendment, or termination of affiliation agreements.
+The Supervisory Board examines the Financial Statements of E.ON
+SE, the Management Report, and the proposal for profit appropria-
+tion and, on the basis of the Audit and Risk Committee's preliminary
+review, the Consolidated Financial Statements and the Separate
+Combined Non-financial Report. The Supervisory Board provides to
+the Annual Shareholders Meeting a written report on the results of
+this examination.
+99
+Contents
+Search
+↑
+Back
+b) In its current composition the Supervisory Board meets the
+objectives of its diversity concept. The Supervisory Board's compo-
+sition of women and men complies with the legal requirements for
+minimum percentages; separate compliance with the statutory
+gender quota occurred from the 2018 Annual Shareholders Meeting.
+The age range of the Supervisory Board is currently 46 to 75 years.
+At least four members have international experience.
+The Supervisory Board believes that in the case of no Supervisory
+Board member there are specific indications of relevant situations
+or relationships that could give rise to a conflict of interest. The
+Supervisory Board includes two members of executive boards of
+listed companies during the course of the year, nameley Rolf Martin
+Schmitz, who was Chief Executive Officer of RWE Aktiengesellschaft
+until the end of April 2021, and Carolina Dybeck Happe, who has
+been CFO of General Electric Company since March 2020. In addi-
+tion, these Supervisory Board members had no more than two
+seats on the supervisory boards of non-Group listed companies or
+exercised comparable functions. None of the other Supervisory
+Board members had seats on more than five supervisory boards of
+non-Group listed companies or exercised comparable functions.
+years, Ms. de Segundo continues to maintain the objective detach-
+ment from the Company and its Management Board necessary to
+perform her monitoring role. Furthermore, she does not and has not
+at any time in the past had a significant business or personal rela-
+tionship with the Company, one of its affiliates, or the Management
+Board, either directly or as a shareholder or in a responsible capacity
+in a company outside the Group. She is therefore independent
+within the meaning of the German Corporate Governance Code.
+a) The Supervisory Board believes that all of its members-thus in
+particular the Chairmen of the Supervisory Board and the Chairper-
+sons of all its committees are independent. No former Manage-
+ment Board member or a close family member of a Management
+Board member sits on the Supervisory Board. Furthermore, no
+Supervisory Board member currently has or had in the year up to
+his or her appointment, either directly or as a shareholder or in a
+responsible role in a company outside the Group, a significant busi-
+ness relationship with the Company or one of its affiliates. No
+Supervisory Board member exercises any executive or advisory
+functions for major competitors, has a personal relationship with a
+major competitor, or has been a Supervisory Board member of
+more than 15 years. The Supervisory Board's assessment consid-
+ered the fact that Karen de Segundo has been a Supervisory Board
+member since 2008 and is thus the only member to have been a
+member for more than 12 years. In view of the changes in the com-
+position of the Management Board and Supervisory Board in recent
+Current Composition of the Supervisory Board
+At least two members shall be familiar with legal and compli-
+ance, HR, IT and sustainability, more specially in the dimensions
+of environmental protection, social, and governance ("ESG")."
+At least four members shall have specific expertise in the busi-
+nesses and markets that are particularly relevant for E.ON. This
+includes in particular the energy sector, the sales and retail busi-
+ness, regulated industries, new technology as well as relevant
+customer sectors.
+•
+•
+•
+Members of the Management Board are required to promptly
+report conflicts of interest to the Chairman of the Supervisory
+Board and the Chairman of the Management Board and to inform
+the other members of the Management Board. Members of the
+At least two members shall be familiar, in particular, with
+innovation, disruption and digitization and the associated new
+business models and cultural change.
+•
+c) In addition, the following skills profile shall apply; especially the
+Nominations Committee will strive to apply the skills profile when
+preparing nominations of candidates for the shareholders' represen-
+tatives to be proposed to the Annual General Meeting.
+Four Supervisory Board members shall have international
+experience, i.e. they shall have spent, for instance, many years
+of their professional career outside Germany.
+As a rule, members of the Supervisory Board shall not hold office
+beyond the age of 75; they should not be older than 72 years
+when they are elected.
+complementary academic profiles, professional and life experi-
+ence, a balanced age mix, various personalities and a reasonable
+gender balance benefit the Supervisory Board's work. In this
+context, care shall be taken to ensure that a gender quota of
+30 percent will be achieved; this shall apply to the Supervisory
+Board as a whole and to the shareholders' and employees' repre-
+sentatives separately.
+→ Corporate Governance Declaration
+Risks and Chances Report
+Combined Group Management Report 100
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+The shareholders' representatives should have leadership expe-
+rience in companies or other large organizations by the majority.
+At least four members shall have experience, as management or
+supervisory board members, in the strategic management or
+supervision of listed organizations and shall be familiar with the
+functioning of capital and financial markets.
+Combined Group Management Report
+Contents
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+General Principles
+E.ON applies Section 315e, Paragraph 1, of the German Commer-
+cial Code and prepares its Consolidated Financial Statements in
+accordance with International Financial Reporting Standards ("IFRS")
+and the interpretations of the IFRS Interpretations Committee
+("IFRSIC") that were adopted by the European Commission for use
+in the EU as of the end of the fiscal year and whose application was
+mandatory as of the balance-sheet date (see Note 1 → to the
+Consolidated Financial Statements). Energy Networks (Germany,
+Sweden, and East-Central Europe/Turkey), Customer Solutions
+(Germany, United Kingdom, Netherlands/Belgium, Other), Non-
+Core Business, and Corporate Functions/Other are the Company's
+IFRS-reportable segments.
+E.ON SE prepares its Financial Statements in accordance with the
+German Commercial Code, the SE Ordinance (in conjunction with
+the German Stock Corporation Act), and the German Energy Act.
+E.ON prepares a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+Accounting Process
+All companies included in the Consolidated Financial Statements
+must comply with E.ON's uniform Accounting and Reporting
+Guidelines for the Annual Consolidated Financial Statements and
+the Interim Consolidated Financial Statements. These guidelines
+describe applicable IFRS accounting and valuation principles. They
+also explain accounting principles typical in the E.ON Group, such as
+those for provisions for nuclear-waste management, the treatment
+of financial instruments, and the treatment of regulatory obligations.
+E.ON regularly analyzes amendments to laws, new or amended
+accounting standards, and other important pronouncements for
+their relevance to, and consequences for, the Consolidated Financial
+Statements and, if necessary, update its guidelines and systems
+accordingly.
+Corporate Functions defines and oversees the roles and responsi-
+bilities of various Group entities in the preparation of E.ON SE's
+Financial Statements and the Consolidated Financial Statements.
+These roles and responsibilities are described in a Group Policy
+document.
+E.ON Group companies are responsible for preparing their financial
+statements in a proper and timely manner. They receive substantial
+support from Business Service Centers in Regensburg, Germany;
+Cluj, Romania; and Kraków, Poland. E.ON SE combines the financial
+statements of subsidiaries belonging to its scope of consolidation
+into its Consolidated Financial Statements using standard consoli-
+dation software. Group Accounting is responsible for conducting the
+consolidation and for monitoring adherence to the guidelines for
+scheduling, processes, and contents. Monitoring by means of sys-
+tem-based automated controls is supplemented by manual checks.
+In conjunction with the year-end closing process, additional qualita-
+tive and quantitative information relevant for accounting is compiled.
+Furthermore, dedicated quality-control processes are in place for
+all relevant departments to discuss and ensure the completeness
+of important information on a regular basis.
+E.ON SE's Financial Statements are prepared with SAP software.
+The accounting and preparation processes are divided into discrete
+functional steps. Bookkeeping processes have largely been out-
+sourced to E.ON's Business Service Centers. Cluj has the primary
+responsibility for processes relating to subsidiary ledgers and sev-
+eral bank activities. Regensburg has the principal responsibility for
+processes relating to the general ledgers. Automated or manual
+controls are integrated into each step. Defined procedures ensure
+that all transactions and the preparation of E.ON SE's Financial
+Statements are recorded, processed, assigned on an accrual basis,
+and documented in a complete, timely, and accurate manner. Rele-
+vant data from E.ON SE's Financial Statements are, if necessary,
+adjusted to conform with IFRS and then transferred to the consoli-
+dation software system using SAP-supported transfer technology.
+The following explanations about E.ON's internal control system
+("ICS") and its general IT controls apply equally to the Consolidated
+Financial Statements and to E.ON SE's Financial Statements.
+Internal Control System
+The purpose of the ICS framework and the annual ICS process is to
+provide sufficient assurance to prevent error or fraud from resulting
+in material misrepresentations in the Financial Statements, the
+Combined Group Management Report, the Half-Year Financial
+Report, and the Quarterly Statements.
+The management of each unit in the E.ON Group is legally respon-
+sible for establishing and maintaining an adequate and effective
+internal control system ("ICS"). The ICS department at Corporate
+Audit is responsible for the oversight and coordination of the overall
+ICS process in order to ensure an effective ICS in the E.ON Group.
+For this purpose, the ICS department at Corporate Audit provides
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+93
+Disclosures Pursuant to Section 289, Paragraph 4,
+and Section 315, Paragraph 4 of the German
+Commercial Code on the Internal Control System
+for the Accounting Process
+the ICS framework and the necessary tools. An ICS Business Partner
+("ICS BP") is assigned to each unit which is of particular importance
+to the E.ON Group and therefore in the ICS documentation scope.
+The ICS BP is responsible for coordinating and monitoring the unit's
+ICS activities and advises and supports management in implement-
+ing an effective internal control system. The unit's management
+remains responsible for the appropriateness and effectiveness of the
+implemented ICS. The ICS BP concept ensures a uniform approach
+as well as consistent and efficient collaboration and fosters con-
+tinuous improvement through extensive information-sharing among
+the Group companies.
+92
+Risks and Chances Report
+→ Business Report → Forecast Report
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→ Business Report → Forecast Report →Risks and Chances Report
+→ Disclosures Regarding Takeovers → Corporate Governance Declaration
+91
+Derivative transactions may result in short-term cash inflows or
+outflows. This relates in particular to margin payments for electricity
+and gas procurement transactions on energy exchanges. The
+additional liquidity requirements potentially resulting from this are
+factored into in E.ON's financing strategy.
+In addition, the price changes and other uncertainty relating to the
+current and non-current investments E.ON makes to cover its
+non-current obligations (particularly pension and asset-retirement
+obligations) could, in individual cases, be major.
+In principle, E.ON could also encounter tax risks and chances.
+This category has a medium risk and a major chance position.
+Furthermore, declining or rising discount rates could lead to
+increased or reduced provisions for pensions and asset-retirement
+obligations, including non-current liabilities (tail, high). This can
+create a high balance-sheet risk for E.ON.
+Refinancing terms on debt capital markets depend in part on rating
+agencies' credit ratings. Rating agencies Moody's and S&P have
+given E.ON a strong investment-grade rating. E.ON has contracts
+that would trigger additional collateral requirements if certain rating
+levels were not met. Consequently, significant rating downgrades
+could lead to additional liquidity requirements (tail/high). On the other
+hand, positive business performance or further debt reduction could
+have a positive impact on E.ON's rating.
+Management Board's Evaluation of the Risk and
+Chances Situation
+The E.ON Group's overall risk and chances situation at year-end
+2021 did not change materially relative to year-end 2020 owing to
+offsetting effects across the risk categories. Although the average
+annual risk for the E.ON Group's adjusted EBITDA is classified as
+major and despite the expansion of its risk and chance position in the
+category market risks due to higher commodity prices, from today's
+perspective E.ON does not perceive any risk profile that could
+threaten the existence of E.ON SE, the E.ON Group, or individual
+segments.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→ Corporate Governance Declaration
+E.ON's ICS Framework
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+The ICS Principles, which define the minimum requirements for an
+effective internal control system, are a key component of E.ON's
+ICS. They contain overarching principles such as authorization, seg-
+regation of duties, and master data management as well as specific
+requirements for managing potential risks in various areas and pro-
+cesses, such as supplier monitoring, project management, invoice
+verification, and payments. All fully consolidated companies and
+majority-owned units are subject to the ICS Principles.
+Legal Provisions and Rules of the Company's Arti-
+cles of Association Regarding the Appointment
+and Dismissal of Management Board Members
+and Amendments to the Articles of Association
+Pursuant to the Company's Articles of Association, the Management
+Board consists of at least two members. The Supervisory Board
+decides on the number of members as well as on their appointment
+and dismissal.
+The Supervisory Board appoints members to the Management Board
+for a term not exceeding five years; reappointment is permissible.
+If several persons are appointed as members of the Management
+Board, the Supervisory Board may appoint one of the members as
+Chairperson of the Management Board. If there is a vacancy on the
+Management Board for a required member, the court makes the
+necessary appointment upon petition by a concerned party in the
+event of an urgent matter. The Supervisory Board may revoke the
+appointment of a member of the Management Board and of the
+Chairperson of the Management Board for serious cause (for further
+details, see Sections 84 and 85 of the AktG).
+Resolutions of the Shareholders Meeting require a majority of the
+valid votes cast unless mandatory law or the Articles of Association
+explicitly prescribe otherwise. An amendment to the Articles of
+Association requires a two-thirds majority of the votes cast or, in
+cases where at least half of the share capital is represented, a simple
+majority of the votes cast unless mandatory law explicitly prescribes
+another type of majority.
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utilization
+of authorized or conditional capital.
+Management Board's Power to Issue or Buy Back
+Shares
+Pursuant to a resolution of the Shareholders Meeting of May 28,
+2020, the Management Board is authorized, until May 27, 2025,
+to have the Company acquire treasury shares. The shares acquired
+and other treasury shares that are in possession of or to be attributed
+to the Company pursuant to Sections 71a et seq. of the AktG must
+altogether at no point account for more than 10 percent of the
+Company's share capital.
+At the Management Board's discretion, the acquisition may be
+conducted:
+•
+•
+•
+through a stock exchange
+by means of a public offer or a public solicitation to submit offers
+for the exchange of liquid shares that are admitted to trading on
+an organized market, within the meaning of the German Securities
+Purchase and Takeover Law, for Company shares
+by the use of derivatives (put or call options or a combination of
+both).
+These authorizations may be utilized on one or several occasions, in
+whole or in partial amounts, in pursuit of one or more objectives by
+the Company and also by its affiliated companies or by third parties
+for the Company's account or one of its affiliates' account.
+With regard to treasury shares that will be, or have been, acquired
+based on the aforementioned authorization and/or prior authoriza-
+tions by the Shareholders Meeting, the Management Board is
+authorized, subject to the Supervisory Board's consent and excluding
+shareholder subscription rights, to use these shares-in addition to
+a disposal through a stock exchange or an offer granting a subscrip-
+tion right to all shareholders-as follows:
+•
+to be sold and transferred against cash consideration
+to be sold and transferred against contributions in kind
+E.ON Annual Report 2021
+Contents
+Search
+E.ON's ICS is based on the globally recognized COSO framework
+from May 2013 (COSO: The Committee of Sponsoring Organizations
+of the Treadway Commission).
+Back
+↑
+Pursuant to Section 71b of the German Stock Corporation Act
+(known by its German abbreviation, "AktG"), the Company's treasury
+shares give it no rights, including no voting rights.
+An employee stock purchase program was offered in 2021. Shares
+acquired by an employee under the Company-sponsored employee
+stock purchase program are subject to a blackout period that begins
+the day ownership of such shares is transferred to the employee
+and that ends on December 31 of the next calendar year plus one.
+As a rule, an employee may not sell such shares until the blackout
+period has expired.
+by means of a public offer directed at all shareholders or a public
+solicitation to submit offers
+The share capital totals €2,641,318,800 and consists of
+2,641,318,800 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a Share-
+holders Meeting.
+A functionally managed digital organization and third-party service
+providers provide IT and digital services for the E.ON Group. IT sys-
+tems used for accounting are subject to the internal control system
+framework, which includes IT general controls, such as access con-
+trols, segregation of duties, processing controls, measures to prevent
+the intentional and unintentional falsification of the programs, data,
+and documents as well as controls related to supplier monitoring.
+The documentation of the IT general controls is stored in E.ON's
+documentation system.
+Each year, qualitative criteria and quantitative materiality aspects
+are used to determine which financial-reporting processes and con-
+trols must be documented and assessed by which E.ON units.
+Restrictions on Voting Rights or the Transfer of
+Shares
+In addition to the ICS Principles, certain units of special importance
+to the E.ON Grouxp's Consolidated Financial Statements must fulfill
+several additional ICS requirements for selected processes. These
+requirements relate to the documentation and assessment of the
+relevant processes and controls-the ICS model-as well as reporting
+to Corporate Audit. The ICS model, which incorporates company-
+and industry-specific aspects, defines potential risks for accounting
+(financial reporting) at the operating units, serves as a checklist,
+and provides guidance for the establishment of internal controls as
+well as their documentation and implementation, and is thus an
+integral part of the accounting processes.
+E.ON units in the ICS documentation scope use a central documen-
+tation system (SAP-GRC) for this purpose. The system contains the
+scope, detailed documentation requirements, the assessment
+requirements for process owners, and the final Sign-Off process.
+Management Self-Assessment and Control Tests
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment of the
+design and the operational effectiveness of the controls embedded
+in these processes and the ICS principles. This is known as a man-
+agement self-assessment. The assessment is supported by tests of
+control effectiveness for selective risk areas. Corporate Audit's ICS
+department defines the methodology for these tests, which are
+conducted by the process owners or employees assigned by them.
+In addition, the effectiveness of the internal controls is audited by
+Internal Audit. These audits are conducted based on a risk-oriented
+audit plan. Any identified deficiencies are reported to the relevant
+companies.
+Furthermore, the general IT controls, the controls of the Business
+Service Centers in Regensburg and Cluj, the controls of the Human
+Resources Service Center in Germany (E.ON Country Hub Germany
+GmbH), and the controls of the Pension Service Company in Ger-
+many (Energie Pensions-Management GmbH) were audited as part
+of the audit of the Group's Consolidated Financial Statements.
+Sign-Off Process
+Based on the self-assessment result and internal and external audit
+findings, the respective management of the unit conducts the final
+Sign-Off. The final step of the internal evaluation process is the
+submission of a formal written declaration confirming the ICS's
+effectiveness ("Sign-Off"). The Sign-Off process is conducted at all
+levels of the Group companies before E.ON SE, as the final step,
+conducts it for the Group as a whole. The Chairman of the E.ON SE
+Management Board and the Chief Financial Officer perform the
+final Sign-Off for the E.ON Group.
+Corporate Audit regularly informs the E.ON SE Supervisory Board's
+Audit & Risk Committee about the ICS for financial reporting and
+about any significant deficiencies identified in the E.ON Group's
+various processes.
+E.ON Annual Report 2021
+The findings of the management self-assessments and the audits
+are included in the annual report on the effectiveness of the entire
+E.ON Group's ICS and are reported to the E.ON SE Management
+Board.
+Risks and Chances Report
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Disclosures Pursuant to Section 289a and Section
+315a of the German Commercial Code and
+Explanatory Report
+→ Corporate Governance Declaration
+94
+Composition of Share Capital
+III
+In the year under review, the E.ON SE Management Board consisted
+of five men until the departure of Johannes Teyssen. Since the
+appointment of Victoria Ossadnik effective April 1, 2021, a woman
+is also a member of the E.ON SE Management Board. The 20-per-
+cent target for the proportion of women on the Management Board
+set by the Supervisory Board in December 2016, which had a dead-
+line until December 31, 2021, for implementation, was achieved.
+The statutory minimum composition requirement of at least one
+woman and at least one man, which applies from August 1, 2022,
+is thus already met.
+Women and Men in Leadership Positions Pursuant
+to Section 76, Paragraph 4, and Section 111,
+Paragraph 5, of the German Stock Corporation Act
+The diversity concept consists of the following items:
+Risks and Chances Report
+→ Corporate Governance Declaration
+In May 2017 the Management Board set a target of 30 percent
+for the proportion of women in the first level of management below
+the Management Board and a target of 35 percent for the second
+level of management below the Management Board. The deadline
+for achieving both targets is June 30, 2022. At year-end 2021, the
+proportion of women in first and second levels of management
+below the Management Board was 28.0 percent and 30.4 percent,
+respectively.
+With regard to the Management Board's composition, the Supervi-
+sory Board of E.ON SE has developed a diversity concept that con-
+siders the recommendations of the German Corporate Governance
+Code.
+Diversity Concept and Long-term Succession Plan
+for the Management Board
+At its meeting in December 2017 the E.ON SE Supervisory Board
+adopted a resolution on the following succession planning/diversity
+concept for the Management Board:
+•
+Diversity Concept
+Combined Group Management Report 104
+For all other E.ON Group companies concerned, targets and dead-
+lines pursuant to the Law for the Equal Participation of Women and
+Men in Leadership Positions in the Private Sector and the Public
+Sector were set for the proportion of women on these companies'
+supervisory board and management board or team of managing
+directors as well as in the next two levels of management. As a rule,
+the deadline for achieving these targets is June 30, 2022.
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+E.ON SE shareholders exercise their rights and vote their shares at
+the Annual Shareholders Meeting. The convening of the Annual
+Shareholders Meeting and the reports and documents required by
+law for the Annual Shareholders Meeting, including the Annual
+Report, are published on the Company's Internet page together with
+the agenda and the explanation of the conditions of participation,
+shareholders' rights, and any countermotions and election proposals
+submitted by shareholders. The Company's financial calendar, which
+is published in the Annual Report, in the quarterly statements or
+financial reports, and on the Internet, regularly informs shareholders
+about important Company dates.
+Back
+Dr. Karl-Ludwig Kley, Chairman
+•
+Erich Clementi, Deputy Chairman
+Dr. Karen de Segundo
+Report on the Supervisory Board's Self-evaluation
+In the year under review, the Supervisory Board conducted a regularly
+scheduled self-assessment (efficiency review) of the Supervisory
+Board's work. An online questionnaire provided the Supervisory
+Board members with the opportunity to evaluate the effectiveness
+of the Supervisory Board's work and to make suggestions for improv-
+ing it. The Chairman then held detailed one-on-one discussions
+with the members of the Supervisory Board for the purpose of
+improving the Supervisory Board's work. The findings were used to
+design specific measures to improve the Supervisory Board's work,
+which are being implemented on an ongoing basis. They relate pri-
+marily to improving the discussion culture of virtual meetings and
+focusing more on the analysis of the competitive environment.
+Shareholders and Annual Shareholders Meeting
+At the Annual Shareholders Meeting, shareholders may vote their
+shares themselves, through a proxy of their choice, or through a
+Company proxy who is required to follow the shareholder's voting
+instructions.
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Due to the Covid-19 pandemic, the 2021 E.ON SE Annual Share-
+holders Meeting as well was not held as an in-person event in order
+to protect the Company's shareholders and employees. Instead, in
+accordance with the law it was held as a virtual Annual Shareholders
+Meeting without the physical participation of shareholders or their
+proxies.
+The EU Regulation on Statutory Audit introduced an obligation for
+the statutory auditor and/or firm to be rotated periodically. Such a
+rotation was to be carried out for the 2021 financial year.
+After the conclusion of the multistage review process and in accor-
+dance with the Supervisory Board's recommendation, on May 28,
+2020, the Annual Shareholders Meeting appointed KPMG AG Wirt-
+schaftsprüfungsgesellschaft, Düsseldorf, to audit the Condensed
+Consolidated Interim Financial Statements and Interim Group Man-
+agement Report for the first quarter of 2021. On May 19, 2021,
+the Annual Shareholders Meeting appointed KPMG AG Wirtschafts-
+prüfungsgesellschaft to be independent auditor and Group inde-
+pendent auditor and to audit the Condensed Consolidated Interim
+Financial Statements and Interim Group Management Reports for
+the 2022 financial year and the first quarter of the 2022 financial
+year. The Supervisory Board intends to recommend to the 2022
+Annual Shareholders Meeting to appoint KPMG AG Wirtschafts-
+prüfungsgesellschaft to be independent auditor and Group indepen-
+dent auditor and to audit the Condensed Consolidated Interim
+Financial Statements and Interim Group Management Reports for the
+2022 financial year and the first quarter of the 2023 financial year.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+As stipulated by German law, the Annual Shareholders Meeting
+votes to select the Company's independent auditor.
+When appointing members of the Management Board, the can-
+didates' outstanding professional qualifications, long-term lead-
+ership experience and past performance, as well as value-driven
+management shall be of paramount importance. Members shall
+be capable of taking forward-looking strategic decisions. In par-
+ticular, they shall be capable of managing businesses sustainably
+and of ensuring that they are consistently focused on customer
+needs.
+III. Compensation of the Management Board in the 2021 Financial Year
+The members of the Management Board shall be leaders and as
+such shall act as role models for the employees through their
+own performance and conduct.
+Nomination Committee
+E.ON Annual Report 2021
+106
+V. Comparative Presentation of the Development of Compensation and Earnings
+134
+IV. Supervisory Board Compensation in the 2021 Financial Year
+132
+109
+II. Letter from the Chairman of the Supervisory Board
+107
+I. Introduction
+107
+Compensation Report
+= Contents Q Search ← Back
+E.ON Annual Report 2021
+Compensation Report
+105
+Attention shall be paid to diversity when appointing members of
+the Management Board. For the Supervisory Board, diversity
+means, in particular, different complementary academic profiles,
+•
+professional and personal experience, personalities, as well as
+internationality and a reasonable age and gender structure. The
+Supervisory Board has therefore adopted a target quota of
+20 percent for the share of women on the Management Board
+which was to be achieved by December 31, 2021.
+The appointment period of a member of the Management Board
+shall end, at the latest, at the end of the month on which the
+Management Board member reaches the general retirement age.
+Achievement of Objectives
+The composition of the Management Board already meets all the
+appointment objectives described above.
+The Management Board as a whole must have expertise and
+experience in the energy sector as well as in the fields of finance
+and digitization.
+Long-term Succession Plan
+In addition to its own experience, the Supervisory Board draws on
+the expertise of outside consultants to ensure that the Company's
+succession planning is appropriate and creates value.
+The Supervisory Board is informed on a regular basis (once a year)
+by the Management Board on the progress in talent identification
+and development as well as succession planning for top executives
+on the basis of the qualifications required for business success and
+the continually evolving personnel development processes. It dis-
+cusses the respective status accordingly.
+E.ON Annual Report 2021
+= Contents
+Search
+← Back
+In consultation with the Executive Committee and the Management
+Board, the Supervisory Board is in charge of long-term succession
+planning for the Management Board. Appointment decisions are
+made on the basis of specific requirement profiles for Management
+Board members.
+Ewald Woste
+→ Corporate Governance Declaration
+Monika Krebber
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Combined Group Management Report 102
+In particular, the Audit and Risk Committee deals with the auditing
+of financial statements, the monitoring of the accounting process,
+the effectiveness of risk management as well as the independent
+audit (including the quality of the audit) and compliance. Dealing
+with risk management includes reviewing the effectiveness of the
+internal control system, the internal risk management system, and
+represents the Company vis-à-vis the Management Board, and is
+responsible for approving the assignment of task areas to individual
+Management Board members and for other activities of a Manage-
+ment Board member.
+In addition, the Executive Committee advises the Management
+Board on all issues of Group financing and investment planning. It
+decides on behalf of the Supervisory Board on the approval of the
+acquisition and disposition of companies, equity interests, and parts
+of companies whose value exceeds €300 million but does not
+exceed €600 million. Furthermore, the Management Board must
+present to the Executive Committee investments if, in the case of a
+fixed-asset investment of more than €300 million, the Management
+Board is convinced that the approved investment amount will be
+surpassed by more than 10 percent or if the Management Board
+perceives that the investment is no longer economic; that is, that it
+will no longer achieve its cost of capital. Additionally, the Executive
+Committee decides on behalf of the Supervisory Board on the
+approval of financing measures whose value exceeds €1 billion but
+not €2.5 billion if such measures are not covered by the Supervisory
+Board's resolutions regarding finance plans. If the value of any such
+transactions or measures exceeds the aforementioned thresholds,
+the committee prepares the Supervisory Board's decision. Finally,
+the Executive Committee prepares decisions on transactions with
+members of the Management Board and Supervisory Board,
+Furthermore, it is responsible for the conclusion, alteration, and ter-
+mination of the service agreements of Management Board members
+and for presenting the Supervisory Board with a proposal for a res-
+olution on a clear and comprehensible compensation system for the
+Management Board and its periodic review. In addition, it prepares
+the Supervisory Board's decision on the Group's investment, financial,
+and personnel plan for the next financial year. It also deals with cor-
+porate-governance matters and reports to the Supervisory Board,
+generally once a year, on the status and effectiveness of, and possi-
+ble ways of improving, the Company's corporate governance and on
+new requirements and developments in this area.
+The Executive Committee consists of six members: the Supervisory
+Board Chairman, his two Deputies, another member elected at the
+recommendation of employee representatives, and two more mem-
+bers elected at the recommendation of shareholder representatives.
+prepares the meetings of the Supervisory Board and advises the
+Management Board on matters of general policy relating to the
+Company's strategic development. In urgent cases (in other words, if
+waiting for the Supervisory Board's prior approval would materially
+prejudice the Company), the Executive Committee acts on the full
+Supervisory Board's behalf. In addition, a key task of the Executive
+Committee is to prepare the Supervisory Board's personnel deci-
+sions and resolutions for setting the respective total compensation
+of individual Management Board members within the meaning of
+Section 87, AktG.
+It
+The Supervisory Board has established the following committees
+and defined rules and procedures for them:
+The Audit and Risk Committee consists of six members. The Super-
+visory Board believes that, in their entirety, the members of the
+Audit and Risk Committee are familiar with the sector in which the
+Company operates. According to the AktG, the Audit and Risk Com-
+mittee must include one Supervisory Board member who has
+expertise in accounting and at least another member with expertise
+in the auditing of financial statements. The Supervisory Board
+believes that in particular Andreas Schmitz and Ulrich Grillo fulfill
+this requirement. Pursuant to the recommendations of the German
+Corporate Governance Code, dated December 16, 2019, the Chair-
+man of the Audit and Risk Committee should have special knowledge
+and experience in the application of accounting principles and inter-
+nal control processes and be familiar with the auditing of financial
+statements. In addition, this person should be independent; in others
+words, in particular not a former Management Board member whose
+service on the Management Board ended less than two years ago
+and not simultaneously the Supervisory Board Chairman. The Super-
+visory Board believes that the Chairman of the Audit and Risk Com-
+mittee, Andreas Schmitz, fulfills these requirements.
+Current CVs of Supervisory Board members are published on the
+Company's Internet page.
+→ Business Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+The Audit and Risk Committee and Executive Committee meet at
+regular intervals and when specific circumstances require it under
+their rules and procedures. The Nomination Committee and the
+Innovation and Sustainability Committee meet as needed. The
+Report of the Supervisory Board (on pages 31 to 32 >) contains
+information about the activities of the Supervisory Board and its
+committees in the year under review.
+The Nomination Committee consists of three shareholder represen-
+tative members. Its Chairman is the Chairman of the Supervisory
+Board. Its task is to recommend to the Supervisory Board, taking into
+consideration the Supervisory Board's targets for its composition,
+suitable candidates for election to the Supervisory Board by the
+Annual Shareholders Meeting.
+The Innovation and Sustainability Committee consists of six mem-
+bers. It advises the Management Board on all innovation issues and
+growth opportunities. The focus is on opportunities that could
+deliver significant growth in sales and profit within the foreseeable
+future. These types of opportunities could range from new business
+models, markets, products, and services to innovative solutions
+that tangibly improve the customer experience, employees' daily
+work, or processes. The Innovation and Sustainability Committee
+advises the Management Board on E.ON's digital transformation
+with the aim of making the Company more automated, leaner, and
+more data-driven. The committee also addresses issues relating to
+E.ON's HR agenda that help employees adopt a growth and innova-
+tion mentality, such as engagement, capabilities, work methods of
+the future, and cultural change. In addition, the committee advises
+the Supervisory Board and the Management Board on environmen-
+tal, social, governance ("ESG"), and sustainability issues.
+The Audit and Risk Committee decides on the approval of related-
+party transactions and deals with the internal procedure for assess-
+ing market conformity and the execution of related-party transac-
+tions in the ordinary course of business.
+inform the Chairman of the Audit and Risk Committee, or to note
+in the audit report, if the audit has led to findings that contradict
+the Declaration of Compliance with the German Corporate
+Governance Code issued by the Management Board and the
+Supervisory Board.
+promptly inform the Chairman of the Audit and Risk Committee
+of anything it becomes aware of during the course of the audit
+that is of relevance to the Supervisory Board's duties
+→ Forecast Report
+promptly inform the Chairman of the Audit and Risk Committee
+should any facts arise during the course of the audit that could
+lead to the audit firm being excluded for independence reasons
+or otherwise conflicted, unless such facts are resolved
+In being assigned the audit task, the independent auditor agrees to:
+agreement regarding the independent auditor's fees as well as any
+additional services performed by the independent auditor. The
+Audit and Risk Committee assesses the quality of the independent
+audit on a regular basis.
+In addition, the Audit and Risk Committee prepares the proposal on
+the selection of the Company's independent auditor for the Annual
+Shareholders Meeting and makes a substantiated proposal, which
+in cases where the audit mandate is put out to tender includes at
+least two candidates. In order to ensure the auditor's independence,
+prior to making its selection proposal, the Audit and Risk Committee
+secures a statement from the proposed auditor detailing any facts
+that could lead to the audit firm being excluded for independence
+reasons or otherwise conflicted. In addition, the committee deals
+with issues relating to the issuance of the audit mandate to the
+independent auditor, the definition of the audit priorities, and the
+The committee also prepares the Supervisory Board's decision on
+the approval of the Financial Statements of E.ON SE and the Con-
+solidated Financial Statements. It is responsible for the preliminary
+review of the Financial Statements of E.ON SE, the Management
+Report, the Consolidated Financial Statements, the Combined Group
+Management Report and the proposal for profit appropriation as
+well as the Separate Non-financial Report and the Separate Com-
+bined Non-financial Report. It discusses the half-yearly reports and
+quarterly statements or financial reports with the Management
+Board prior to their publication. The effectiveness of the internal
+controls (including for the financial disclosures) at E.ON SE and the
+Group's units is tested by Internal Audit as part of a risk-oriented
+audit plan. The audit of the internal controls is also part of the audit
+of the Consolidated Financial Statements. The Audit and Risk Com-
+mittee may commission an external review of the contents of the
+Non-financial Statement or the Separate Non-financial Report or
+the Combined Non-financial Statement or the Separate Combined
+Non-financial Report.
+the internal audit system. The Audit and Risk Committee deals with
+Internal Audit's activities and the definition of the audit priorities on
+a regular basis.
+= Contents
+•
+Eugen-Gheorghe Luha
+c) In their entirety, the members bring a wide range of specific
+knowledge to committee work and have special expertise in one or
+more businesses and markets relevant to the Company. In view of
+continually changing business requirements, the Supervisory Board
+will continue to identify necessary competencies early to ensure
+that these are covered. The Supervisory Board believes that the
+requirements of the Supervisory Board's competency profile are
+met by the current members of the Supervisory Board.
+Risks and Chances Report
+Christoph Schmitz, Deputy Chairman
+Erich Clementi
+Ulrich Grillo
+Fred Schulz
+Albert Zettl
+Audit and Risk Committee
+Dr. Karl-Ludwig Kley, Chairman
+Andreas Schmitz, Chairman
+Ulrich Grillo
+René Pöhls
+Elisabeth Wallbaum
+Deborah Wilkens
+Innovations and Sustainability Committee
+Dr. Karen de Segundo, Chairwoman
+Stefan May, Deputy Chairman
+Klaus Fröhlich
+Fred Schulz, Deputy Chairman
+→ Corporate Governance Declaration
+Executive Committee
+→ Corporate Governance Declaration
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report 101
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+The Supervisory Board's committees have the following
+composition:
+Contents
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report 103
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+Search
+Search
+The maximum for the Management Board Chairman is €10,000,000, and for each ordinary Management
+Board member €5,500,000
+Back
+825
+675
+700
+Ordinary Management Board members
+E.ON Performance Plan
+40%
+32%
+Base salary
+Annual bonus
+32%
+28%
+Base salary
+4,390
+1,750
+1,420
+1,220
+Management Board Chairman
+financial year (on a full-year basis). The amount of Leonhard
+Birnbaum's target direct compensation as Management Board
+Chairman corresponds to that of the former Management Board
+Chairman, Johannes Teyssen.
+E.ON Performance Plan
+Target direct compensation
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Compensation Report 109
+III. Compensation of the Management Board in the
+2021 Financial Year
+The compensation of the Management Board in the 2021 financial
+year is presented and disclosed in detail below.
+1. Compensation Governance
+2,200
+The Supervisory Board as a whole is responsible for determining
+the compensation system as well as the amount and structure of
+Management Board compensation. The compensation system
+for the members of the Management Board is determined by the
+Supervisory Board in accordance with Section 87, Paragraph 1,
+and Section 87a, Paragraph 1 AktG on the basis of a proposal by
+the Executive Committee. After the Supervisory Board passes this
+resolution, the compensation system is submitted to the Annual
+Shareholders Meeting for approval.
+Furthermore, for the respective upcoming financial year, the Super-
+visory Board sets the target values used to measure the Manage-
+ment Board's performance for the performance criteria that are
+applied in the financial year.
+In addition, the Supervisory Board sets the specific target compen-
+sation for the members of the Management Board.
+Following the appointment of Leonhard Birnbaum as Management
+Board Chairman effective April 1, 2021, the following target direct
+compensation (base salary, target amount bonus, target amount
+E.ON Performance Plan) applied to the Management Board Chair-
+man and the ordinary Management Board members for the 2021
+in €k
+Base salary
+Annual bonus
+The new compensation system for the Management Board resolved
+by the Supervisory Board on March 23, 2021, and approved by the
+2021 Annual Shareholders Meeting applies from January 1, 2022.
+The compensation system in place since January 1, 2017, was
+applied for the last time in the 2021 financial year ("Compensation
+system 2017").
+31%
+Annual bonus
+O
+Consideration of Shareholder Interests
+Implementation
+creates incentives for achieving the objectives that have been set.
+The compensation of the Management Board is linked to E.ON's
+performance to a high degree and therefore clearly reflects the
+pay-for-performance concept.
+In designing and determining the Management Board compensa-
+tion, the Supervisory Board is guided in particular by the following
+principles:
+The Management Board's compensation is closely linked to the strategy of E.ON via defined targets for variable
+compensation and thus promotes the Company's business strategy.
+Management Board compensation is appropriate from a horizontal perspective in comparison with competitors
+as well as from a vertical perspective in an internal comparison with other employees.
+Long-term business development
+The majority of the compensation consists of performance-based compensation components that are especially
+geared to the Company's success by means of setting ambitious targets.
+In order to align management's and shareholders' interests and objectives, long-term variable compensation is based
+not only on the performance of E.ON's share price in absolute terms but also on a comparison with competitors.
+Share Ownership Guidelines further strengthen the capital-market orientation and shareholder culture.
+Management Board compensation in the 2021 financial year was
+for the final time based on the Compensation System 2017 and
+consisted primarily of non-performance-based and performance-
+based compensation components. The non-performance-based
+components consist of base salary, fringe benefits, and pension
+benefits, while the performance-based components include the
+annual bonus and long-term variable compensation in the form of
+the E.ON Performance Plan. In addition, the E.ON Share Matching
+Plan was granted as part of long-term variable compensation until
+2016; and was paid out for the last time in the 2021 financial year.
+In addition, other compensation provisions exist for Management
+Board members, including share ownership guidelines and malus
+and clawback rules.
+E.ON Annual Report 2021
+Contents
+To reinforce the long-term aspect, performance-based compensation is predominantly assessed on a multi-year
+basis.
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+Pay-for-performance
+Promote the corporate strategy
+37%
+E.ON Performance Plan
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Appropriateness of the compensation
+Back
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+In setting the compensation of the Management Board members,
+the Supervisory Board, in accordance with Section 87, Paragraph 1
+AktG, shall ensure that it is commensurate with the duties of the
+individual Management Board member, their individual performance,
+and the Company's economic situation, and that it does not exceed
+the customary compensation without special reasons. Furthermore,
+when setting the compensation, the Supervisory Board shall ensure
+that the compensation structure is geared towards the Company's
+sustainable and long-term development.
+With the Executive Committee's support, the Supervisory Board
+reviews the appropriateness of Management Board members' com-
+pensation on a regular basis. In assessing the appropriateness of
+Management Board compensation, a horizontal comparison is made
+with the compensation paid to Management Board members of
+comparable companies. DAX companies are used as a peer group for
+this purpose. Since September 20, 2021, the peer group therefore
+consists of 40 companies. In addition, a vertical comparison of
+compensation within E.ON is also carried out, taking into account the
+ratio of Management Board compensation to that of the Company's
+executives and the rest of its workforce. Both the current ratio and
+the change in the ratio over time are reviewed on a regular basis.
+The most recent review of the appropriateness of Management
+Board compensation was conducted in the 2021 financial year. The
+Supervisory Board's review of the level and structure of compensa-
+tion was supported by an independent external compensation expert.
+This review resulted in the appropriateness of Management Board
+compensation being confirmed.
+2. Basic Features of Management Board Compensation
+E.ON aims to strengthen and expand its leading position in the
+European energy market. The objective is to align E.ON to the new
+energy world, which is increasingly shaped by autonomous and
+proactive customers, and be their leading partner for the new energy
+world. Part of E.ON's strategy is to continue to promote and embed
+a strong performance culture in the interests of its various stake-
+holders. Management Board compensation represents an important
+governance element for implementing the corporate strategy and
+Principle
+Compensation Report 110
+↑
+Back
+Search
+Compensation component/rule
+Annual bonus
+At the beginning of the 2021 financial year, the Supervisory Board
+resolved a new compensation system for the Management Board.
+The new compensation system was submitted to the 2021 Annual
+Shareholders Meeting for resolution and approved by it with a
+majority of 92.56 percent. The previous compensation rules, which
+were resolved at the 2016 Annual Shareholders Meeting, were
+replaced by the new compensation system for all Management Board
+Resolution and Approval of the New Compensation System for the
+Management Board
+Compensation Report 108
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+→ III. Compensation of the Management Board in the 2021 Financial Year
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The E.ON Performance Plan is calculated on the basis of the perfor-
+mance of E.ON's total shareholder return ("TSR") compared with
+the TSR performance of the companies in the STOXX® Europe 600
+Utilities. For the second tranche of the E.ON Performance Plan
+(2018-2021), which ended at the end of the 2021 financial year
+and will be paid out in 2022, the target achievement in the relative
+TSR performance and the absolute share price performance result
+in a payout of 111 percent of the target amount.
+This result was influenced, among other things, by the success of
+the agreement reached with the German federal government and
+the other nuclear power plant operators on residual electricity
+output. For the purpose of calculating the bonus, only the income
+contribution of this agreement for 2021 was considered to impact
+earnings as the budget year currently to be assessed. As a result
+of the EPS achieved in the 2021 financial year and the individual
+performance, the target achievement of the 2021 bonus for the
+Management Board members active as of December 31, 2021, is
+176 percent.
+net income from €1.7 to 1.9 billion to €2.2 to 2.4 billion. E.ON's
+adjusted EBIT of €4.7 billion and adjusted net income of €2.5 billion
+both surpassed the forecast range. The main drivers of this good
+earnings performance were higher sales prices in the second half of
+the year and high capacity utilization at PreussenElektra's remaining
+power plants. E.ON's core operating business also delivered a posi-
+tive performance, owing in part to cost savings and higher sales
+volumes in almost all regional markets. Cost savings, primarily at
+the U.K. sales business, also led to improved earnings. Earnings per
+share based on adjusted net income ("EPS") for the 2021 financial
+year amounted to €0.96 (prior year: €0.63).
+E.ON had a successful 2021 financial year, slightly surpassing its
+forecast for several earnings metrics. It had significantly increased
+its full-year forecast for multiple metrics in August. The reason was
+the implementation of the public-law agreement of March 25, 2021,
+between the German federal government and the country's nuclear
+power plant operators. In this context, previous purchases of resid-
+ual power output rights were refunded. This resulted in a positive
+effect of roughly €0.6 billion for E.ON, which was the reason for
+the increased forecast in August. E.ON raised its forecast range for
+adjusted EBIT for the 2021 financial year from €3.8 to 4.0 billion
+to €4.4 to 4.6 billion. It also raised the forecast range for adjusted
+Through the performance-based compensation components and
+the consideration of strategically relevant performance criteria, the
+Management Board compensation system links the compensation
+of Management Board members to E.ON's business performance
+and thus promotes our company's long-term performance.
+Business Performance and Management Board Compensation in
+the 2021 Financial Year
+Compensation Report 107
+→I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+E.ON Compensation Report 2021
+I. Introduction
+This Compensation Report describes the basic features and design
+of the compensation for the E.ON SE Management Board and
+Supervisory Board. It was prepared by the E.ON SE Management
+Board and Supervisory Board in accordance with the requirements
+of Section 162 of the German Stock Corporation Act (known by its
+German abbreviation, "AktG") and complies with the recommenda-
+tions as well as the suggestions of the German Corporate Gover-
+nance Code (known by its German abbreviation, "DCGK") in its cur-
+rent version dated December 16, 2019.
+The Compensation Report and the report on the formal and substan-
+tive audit of the Compensation Report by KPMG AG Wirtschafts-
+prüfungsgesellschaft can be found on E.ON's Internet page.
+E.ON Performance Plan
+The figures presented in the tables of the Compensation Report
+may not add up precisely due to rounding. The same applies to the
+percentages shown, which may not represent the exact absolute
+figures due to rounding.
+Dear Shareholders,
+For the first time we are presenting the Compensation Report
+required by the Act Implementing the Second Shareholders' Rights
+Directive ("ARUG II"). It provides you with detailed insights into all
+relevant aspects and facts regarding the compensation of the Man-
+agement Board and Supervisory Board for the 2021 financial year.
+In the following, I summarize the most important compensation-
+related events of the past financial year.
+Altered Reporting Framework due to ARUG II
+As a result of ARUG II's entry into force, the Compensation Report
+was prepared for the first time on the basis of the new regulatory
+requirements of Section 162 AktG.
+In addition to the associated changes in content, there is now also an
+annual vote on the Compensation Report at the Annual Shareholders
+Meeting. This Compensation Report will therefore be submitted to
+you for approval at the 2022 Annual Shareholders Meeting.
+II. Letter from the Chairman of the Supervisory
+Board
+•
+Pension substitute
+Compensation caps
+•
+Extend the holding period for shares held under the Share Ownership Guidelines to two years after departure
+from the Management Board
+Introduction of malus and clawback rules
+Set severance caps in accordance with new DCGK recommendations
+Confirmatory Resolution on the Supervisory Board's Compensa-
+tion System
+At the 2021 Annual Shareholders Meeting, a confirming resolution
+was also passed on the Supervisory Board's compensation system,
+which was approved by 99.31 percent of the votes cast.
+Set maximum compensation
+Change in the Management Board's Composition
+Johannes Teyssen ended his service on the Management Board
+effective March 31, 2021, after more than ten years as Manage-
+ment Board Chairman. The Supervisory Board appointed Leonhard
+Birnbaum to succeed him as Management Board Chairman effective
+April 1, 2021. Further, Victoria Ossadnik was appointed as a Man-
+agement Board member for the newly created area of responsibility
+"Digitalization." In addition, Karsten Wildberger ended his service
+on the Management Board prematurely effective July 31, 2021.
+The Supervisory Board appointed Patrick Lammers to succeed him
+as Management Board member with responsibility for "Sales and
+Customer Solutions" effective August 1, 2021. To ensure a uniform
+incentive system for the Management Board, the compensation
+system applicable to the other Management Board members applies
+to the new members appointed in the 2021 financial year.
+4.1.
+ну
+Karl-Ludwig Kley
+Chairman of the E.ON SE Supervisory Board
+E.ON Annual Report 2021
+Contents
+Taking into account the new regulatory requirements of Section
+162 AktG, we stand by our objective of providing you with the usual
+comprehensive transparency on the compensation of the E.ON
+Management Board and Supervisory Board, while at the same time
+comprehensively addressing the requirements of the capital market.
+↑
+•
+Eliminate company pension plan and introduce a pension substitute for newly appointed Management Board
+members
+Share Ownership Guidelines
+members effective January 1, 2022. The introduction of the new
+compensation system takes account of the new legal requirements
+of ARUG II and the current recommendations of the revised version
+of the DCGK. In addition, the alignment with E.ON's corporate
+strategy is strengthened. The new compensation system establishes
+an even stronger incentive for successful and sustainable corporate
+governance and continues to promote the Company's long-term
+performance. The main changes can be summarized as follows:
+Most important changes effective from January 1, 2022
+•
+•
+Other contractual provisions
+Management Board members in office at December 31, 2021, have the option to choose
+•
+Factor in a non-financial performance criterion alongside EPS with a weighting of 20 percent
+.
+•
+Net Promoter Score (NPS) is included as a non-financial criterion
+Introduce ROCE (weighting: 25 percent) as a second financial performance criterion alongside relative TSR
+(weighting: 50 percent)
+Include the E.ON Sustainability Index as another performance criterion (weighting: 25 percent)
+•
+E.ON Annual Report 2021
+The following presentation shows the predefined individual and collective targets for the 2021 financial year, their assessment, and the target
+achievement determined on this basis for the Management Board members active as of December 31, 2021:
+125%
+Contents
+Search
+↑
+Back
+→ I. Introduction
+Compensation Report 114
+→ II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+3.2. Performance-Based Compensation
+Performance-based compensation accounts for the majority of
+Management Board members' compensation. It consists of the
+annual bonus (short-term incentive or "STI") and the E.ON Perfor-
+mance Plan (long-term incentive or "LTI"), which have terms of one
+and four years, respectively. The target amount of the annual bonus
+accounts for 45 percent of performance-based compensation, the
+target amount of the E.ON Performance Plan for 55 percent. By
+basing variable compensation predominantly on a multi-year metric,
+the Supervisory Board ensures the promotion of E.ON's sustainable
+and long-term development.
+The pay-for-performance concept of Management Board compen-
+sation represents a key principle of Management Board compen-
+sation. Alongside target direct compensation's high proportion of
+variable compensation (about 72 percent for the Management
+Board Chairman, about 68 percent for ordinary Management Board
+members), the Supervisory Board ensures this by setting ambitious
+performance criteria. The Supervisory Board defines these criteria
+for the annual bonus and for the E.ON Performance Plan prior to the
+start of each financial year and the start of each tranche, respectively,
+thereby incentivizing operational as well as strategic corporate goals.
+E.ON Annual Report 2021
+The following diagram illustrates the pay-for-performance concept
+of Management Board compensation in light of three performance
+scenarios:
+Minimum payout
+100%
+1,220
+100% payout
+28%
+Maximum payout
+16%
+Ordinary Management Board members
+32%
+40% 4,390
+38%
+Management Board Chairman
+Minimum payout
+Management Board members already appointed at the time of the introduction of the pension substitute were granted a one-time option to switch to
+the pension substitute. They exercised this option collectively to switch to the new pension payment. Pension entitlements already acquired under the
+"Contribution Plan E.ON Management Board" shall remain in force. The contribution plan continues to apply at the previous level for early retirement.
+1,315
+Pension entitlements
+in €k
+IAS 19
+Present value
+of pension
+entitlement
+Service cost
+2021
+2021
+Leonhard Birnbaum
+335
+3,019
+(Chairman since April 1, 2021)
+Thomas König
+260
+Management Board members newly appointed to the Management Board from January 1, 2022, will receive a lump-sum, earmarked pension substi-
+tute, to be paid out annually. The amount is defined in individual contracts, is not linked to any other compensation components and is in the range of
+approximately 9 to 13 percent of the total target compensation. By granting the pension substitute, the pension provision and the investment risk are
+transferred to the Management Board member, which eliminates long-term financing through the formation of provisions and thus the risk for the
+Company.
+3,236
+240
+240
+Victoria Ossadnik (since April 1, 2021)
+611
+611
+Marc Spieker
+243
+1,396
+Johannes Teyssen (until March 31, 2021)
+Karsten Wildberger (until July 31, 2021)
+28,356
+176
+Patrick Lammers (since August 1, 2021)
+The service cost and present value of the existing pension entitle-
+ments as of December 31, 2021, are as follows for each member of
+the Management Board:
+100%
+100% payout
+Bonus
+Target amount
+Company Performance
+0-200%
+× Actual EPS versus budget
+Individual Performance Factor
+50-150%
+✗ Assessment of Management Board
+members' performance based on:
+Bonus
+Capped at 200%
+Target achievement
+200%
+of the target amount
+141%
+Company Performance 2021
+• Management Board's overall performance
+⚫ Individual performance (bonus/malus)
+100%
+As a rule, the Supervisory Board may also, as part of the annual
+bonus, grant Management Board members special compensation
+for outstanding achievements. The bonus (including any special
+compensation) remains capped at 200 percent of the contractually
+agreed target amount (cap).
+As in prior years, the Supervisory Board made no use of the possi-
+bility of special compensation in 2021 financial year.
+Company Performance
+Company performance is assessed on the basis of EPS, E.ON's key
+performance indicator. EPS used for this purpose is derived from
+adjusted net income as disclosed in the Annual Report. EPS is used
+to incentivize E.ON's operating success, which constitutes the basis
+for our long-term strategy to be the leading partner for the new
+energy world. In addition, the Company's attractiveness is to be
+further enhanced through dividend growth. This objective is also
+supported by an ambitious EPS target.
+The EPS target for each financial year is set by the Supervisory Board,
+taking into account the approved budget. The target achievement
+is 100 percent if actual EPS is equal to the target. If actual EPS is
+37.5 percent or more below the target, this constitutes zero percent
+target achievement. If actual EPS is 37.5 percent or more above the
+target, this constitutes 200 percent target achievement. Linear
+interpolation is used to translate intermediate EPS figures into per-
+centages.
+The EPS achieved in the 2021 financial year was influenced, among
+other things, by the success of the agreement reached with the
+German federal government and the other nuclear power plant
+operators on residual electricity output. Against this background, in
+deviation from the Management Board compensation system and
+the calculation of the annual bonus provided for therein, an adjust-
+ment was made to the actual EPS as the basis for calculating the
+annual bonus. Only the income contribution of this agreement for
+2021 was considered to impact earnings as the budget year currently
+0%
+-37.5%
+Budget Actual EPS: +37.5%
+€0.82
+EPS - Deviation from budget
+Paid out in cash
+700
+to be assessed, and EPS was adjusted accordingly from €0.96 to
+€0.82 as the assessment basis for determining the company per-
+formance. This results in a target achievement of 141 percent.
+3.2.1. Annual Bonus ("STI")
+32%
+31%
+37% 2,200
+Maximum payout
+19%
+36%
+3,700
+■ Base salary
+Annual bonus (STI) E.ON Performance Plan (LTI)
+Absolute figures in €k
+Scenario
+The annual bonus consists of a cash payment made after the end of the financial year. The amount of the bonus is based on the achievement
+of predefined performance criteria. These measure both company performance and individual performance using an individual performance
+factor. The bonus is capped at a maximum of 200 percent of the contractually agreed-on target bonus (cap). The bonus payout is calculated
+as follows:
+Minimum payout
+100% payout
+Explanation
+Bonus: 0% of the target amount; E.ON Performance Plan: 0% of the target amount
+Bonus: 100% of the target amount; E.ON Performance Plan: 100% of the target amount
+Bonus: 200% of the target amount; E.ON Performance Plan: 200% of the target amount
+46%
+7,560
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Compensation Report 115
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Maximum payout
+Outlook for 2022
+The Company has agreed to a pension plan based on final salary for
+the Management Board Chairman, Johannes Teyssen, who was
+appointed to the Management Board before 2010. Following the
+end of his service for the Company, Johannes Teyssen is entitled to
+receive lifelong monthly pension payments. Johannes Teyssen's
+pension entitlements provide for annual pension payments equal to
+75 percent of his annual base salary. The full amount of any pension
+entitlements from earlier employment is offset against these pay-
+ments. In addition, in the case of decease, the pension plan includes
+benefits for the widow and each orphan that are equal to 60 percent
+and 15 percent, respectively, of the deceased's pension entitlement.
+Together, pension payments to a widow and children may not exceed
+100 percent of the deceased Management Board member's pension.
+The vesting of Management Board members' pension entitlements
+(both contribution-based and final-salary-based pension plans) is
+governed by the provisions of the German Occupational Pensions
+Improvement Act ("BetrAVG").
+The Company makes virtual contributions to Management Board
+members' pension accounts in an amount equal to a percentage of
+their pensionable income (base salary and annual bonus). The con-
+tribution percentage is at most 21 percent. The annual contribution
+consists of a fixed base percentage (16 percent) and a matching
+contribution (5 percent). The requirement for the matching contri-
+bution to be granted is that the Management Board member con-
+tributes, at a minimum, the same amount by having it withheld
+from his or her compensation. The company-funded matching con-
+tribution is suspended if and as long as the E.ON Group's ROCE is
+less than its cost of capital for three years in a row. The contribu-
+tions are capitalized using actuarial principles (based on a standard
+retirement age of 62) and placed in Management Board members'
+pension accounts. The interest rate used for each year is based on
+the return of long-term German treasury notes. At the age of 62 at
+the earliest, a Management Board member (or his or her survivors)
+may choose to have the pension account balance paid out as a life-
+long pension, in installments, or in a lump sum. Individual Manage-
+ment Board members' actual resulting pension entitlement cannot
+be calculated precisely in advance. It depends on a number of
+uncertain parameters, in particular the changes in their individual
+salary, their total years of service, the attainment of company tar-
+gets, and interest rates. For a Management Board member enrolled
+in the plan at the age of 50, the company-financed, contribution-
+based pension payment is currently estimated to be between 30
+and 35 percent of his or her base salary (without factoring in
+pen-
+sion benefits accrued prior to being appointed to the Management
+Board).
+- Virtual contributions equaling a maximum of 21 percent of fixed compensation and target bonus
+- Virtual contributions capitalized using interest rate based on long-term German treasury notes
+- Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum
+•
+•
+Annual target bonus corresponds to about 45 percent of performance-based compensation
+Amount of bonus depends on
+- Company performance: actual EPS versus budget (based on adjusted net income)
+- Individual performance factor: collective performance and individual performance ("bonus/malus")
+Cap: 200 percent of target bonus
+May be awarded, at the Supervisory Board's discretion, for outstanding achievements as part of the annual bonus as long as the total bonus remains under the cap.
+Granting of virtual shares of E.ON with a four-year performance period
+•
+- Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement
+Contribution-based benefits
+•
+Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1) + performance matching (1:0 to 1:2) depending on ROCE during the performance period
+Value development depends on the 60-day average price of the E.ON share at the end of the performance period and on the dividend payments during the four-year performance period
+Cap: 200 percent of the target amount
+•
+Annual target amount corresponds to about 55 percent of performance-based compensation
+•
+•
+•
+Granting of virtual shares of E.ON with a four-year performance period
+Final number of virtual shares depends on E.ON's TSR relative to the TSR of companies in the STOXX® Europe 600 Utilities index; 1/4 of TSR performance is locked in annually
+Allocation limit; that is, the maximum number of virtual shares: 150 percent
+Value development depends on the 60-day average price of the E.ON share at the end of the performance period and on the dividend payments during the four-year performance period
+Cap: 200 percent of the target amount
+E.ON Annual Report 2021
+III
+•
+Contents
+– Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from the age of 60
+E.ON Performance Plan (granted from 2017)
+Contents
+Search
+↑
+Back
+The following table provides an overview of the components of the
+Management Board's compensation system for the 2021 financial
+year as well as their respective metrics and parameters:
+Compensation Report 111
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Overview compensation components
+Compensation component 2021
+¹Only applies to Johannes Teyssen.
+Non-performance-based compensation
+Fringe benefits
+Pension benefits
+Metric/Parameter
+Fixed compensation paid out in 12 monthly installments
+Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination
+Final-salary-based benefits¹
+•
+Performance-based compensation
+Annual bonus
+Possibility of special compensation
+Long-term variable compensation:
+E.ON Share Matching Plan (granted until 2016)
+Long-term variable compensation:
+Base salary
+Search
+↑
+Overview compensation components
+3.1.1. Base Salary
+Management Board members receive their fixed compensation in
+twelve monthly payments.
+3.1.2. Fringe Benefits
+Management Board members receive a number of contractual fringe
+benefits, including the use of a chauffeur-driven company car. The
+Company also provides them with the necessary telecommunications
+equipment, covers costs that include those for a periodic medical
+examination, and pays the premium for an accident insurance policy.
+3.1.3. Pension Benefits
+Members appointed to the Management Board since 2010 are
+enrolled in the "Contribution Plan E.ON Management Board", which
+is a contribution-based pension plan.
+Capital contributions
+Pension account
+1
+2
+3
+3.1. Non-Performance-Based Compensation
+Non-performance-based compensation consists of a base salary,
+fringe benefits, and pension benefits.
+4
+Term in years
+E.ON Annual Report 2021
+III
+Contents
+Search
+↑
+Back
+Compensation Report 113
+→ I. Introduction
+→ II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+5
+3. Management Board Compensation in the 2021 Financial Year
+in Detail
+2The limitation to the remaining term of the service agreement applied in the 2021 financial year to Leonhard Birnbaum (since April 1, 2021) as well as to the Management Board members newly appointed in the 2021 financial year and, effective January 1, 2022, to all Management Board members.
+3The malus and clawback rules applied in the 2021 financial year to Leonhard Birnbaum (since April 1, 2021) as well as to the Management Board members newly appointed in the 2021 financial year and, effective January 1, 2022, to all Management Board members.
+a determination or payout of variable compensation on the basis of incorrect consolidated financial statements
+Compensation component 2021
+Other compensation provisions
+Share Ownership Guidelines
+Back
+Metric/Parameter
+Compensation Report 112
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Severance cap
+Settlement for change-of-control
+Non-compete clause
+Malus and clawback rules³
+•
+Obligation to buy and hold E.ON shares until the end of service on the Management Board
+Investment in E.ON shares equaling a percentage of base salary:
+- 200 percent (Management Board Chairperson)
+- 150 percent (other Management Board members)
+Until the required investment is reached, obligation to invest net payouts from long-term compensation in E.ON shares
+Maximum of two years' total compensation or the total compensation for the remainder of the service agreement
+Severance payment in the amount of no more than two years' total target compensation (base salary, target bonus, and fringe benefits), but no more than the total compensation for the year for
+the remaining term of the service agreement.²
+For six months after termination of service agreement, prorated compensation equal to fixed compensation and target bonus, at a minimum 60 percent of most recently received compensation.
+Severance payments are credited against the compensation payment.
+Possibility for the Supervisory Board to reduce or reclaim the performance-based compensation in part or in full, in the event of:
+deliberate breaches of duty in the form of
+non-compliance with material provisions of E.ON's internal Code of Conduct and/or material contractual duties
+- a significant breach of due diligence obligations as defined in section 93 of the German Stock Corporation Act
+Individual Performance Factor
+The Supervisory Board determines the degree to which Manage-
+ment Board members have achieved the targets of their individual
+performance factors, giving adequate consideration to their individ-
+ual and collective contributions. The factors range between 50 and
+150 percent. The amount of the bonus can therefore be adjusted up
+or down depending on performance (in the sense of a "bonus/malus").
+In addition, the Supervisory Board has the option to take into
+account extraordinary developments as part of the individual per-
+formance factor and thus complies with recommendation G.11
+sentence 1 of the DCGK.
+45%
+Contents
+Contents
+Search
+↑
+Back
+Compensation Report 119
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+3.2.2.1. E.ON Performance Plan (Granted from 2017)
+Management Board members receive stock-based, long-term variable compensation under the E.ON Performance Plan, which replaced
+the previous E.ON Share Matching Plan as the Company's new long-term compensation system effective January 1, 2017. Each tranche of
+the E.ON Performance Plan has a performance period of four years to serve as a long-term incentive for sustainable business performance.
+Performance periods start on January 1.
+Initial Number
+of Virtual Shares
+Granted
+E.ON Annual Report 2021
+TSR Performance Relative to
+TSR of E.ON stock compared with the companies
+of the STOXX® Europe 600 Utilities index (annual lock-in)
+Target achievement
+Х
+200%
+E.ON Annual Report 2021
+150%
+125%
+100%
+75%
+50%
+Peer Group
+25%
+E.ON Performance Plan 4th Tranche (2020-2023)
+E.ON Performance Plan 5th Tranche (2021-2024)
+| E.ON Performance Plan
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+3.2.2. Long-Term Variable Compensation
+Long-term variable compensation consists of the E.ON Performance Plan, which has been granted in annual tranches since 2017. The fifth
+tranche (2021-2024) was granted at the start of the 2021 financial year. The third tranche (2019-2022) and the fourth tranche (2020-2023)
+of the E.ON Performance Plan continue to run.
+The performance period of the second tranche (2018-2021) of the E.ON Performance Plan, which was granted to Management Board
+members at the start of the 2018 financial year, ended at the conclusion of the 2021 financial year. The payout of this tranche takes place
+in April 2022.
+Due to the conversion of the E.ON Share Matching Plan to the E.ON Performance Plan in the 2017 financial year, the LTI component of
+the 2016 bonus also ended during the 2021 financial year. It was granted as the fifth and last tranche of the E.ON Share Matching Plan
+(2017-2021); its performance period ended in March 2021.
+Overview of LTI Tranches
+2016
+STI 2016
+2017
+2018
+2019
+E.ON Performance Plan 3rd Tranche (2019-2022)
+2020
+2022
+2023
+2024
++
++
++
++
++
+Share Matching Plan 5th Tranche (2017-2021)
+E.ON Performance Plan 2nd Tranche (2018-2021)
+Introduction of
+2021
+0%
+25th percentile
+Lower
+threshold
+Number of
+Fair value per share
+performance shares
+Target amount
+€1,750,000
+at grant
+€7.65
+€825,000
+€7.65
+€343,750
+€7.65
+€825,000
+Grant
+€7.65
+€825,000
+€7.65
+granted
+228,759
+107,844
+44,935
+107,844
+107,844
+¹Because Patrick Lammers was not a Management Board member on the date of grant, April 1, 2021, the grant was made on the basis of a pro-rated target amount.
+Johannes Teyssen did not receive a grant of the fifth tranche of the
+E.ON Performance Plan due to his departure from the Management
+Board on March 31, 2021, while in the case of Karsten Wildberger
+all virtual shares granted to him lapsed without any replacement
+due to his departure on July 31, 2021.
+E.ON's corporate strategy aims to deliver sustainable growth in
+shareholder value. For this reason, the E.ON Performance Plan's
+total target achievement is measured by relative TSR. Taking TSR
+into account further aligns the interests and objectives of manage-
+ment and shareholders. TSR is the return of the E.ON stock, which
+takes into account the share price plus the assumption of reinvested
+dividends, adjusted for changes in capital.
+To achieve the Company's ambition to be the leading partner in the
+energy world, also for its investors, E.ON SE's performance is mea-
+sured in comparison with competitors. The companies of the STOXX®
+Europe 600 Utilities sector index are used as the peer group.
+During a tranche's performance period, E.ON's TSR performance is
+measured once a year in comparison with the companies in the peer
+group and set for that year. E.ON SE's TSR performance in a given
+year determines the final number of one fourth of the virtual shares
+granted at the beginning of the performance period. For this pur-
+pose, the TSRS of all companies are ranked, and E.ON SE's relative
+position is determined based on the percentile reached. Target
+achievement is 100 percent if E.ON SE's TSR is equal to the median
+of the peer group. The lower threshold is the 25th percentile; a TSR
+performance below this threshold would reduce the number of vir-
+tual shares granted by one quarter. If E.ON's performance is at or
+above the 75th percentile (upper cap), the quarter of virtual shares
+granted for that particular year increases to a maximum of 150 per-
+cent. Linear interpolation is used to translate intermediate figures
+into percentage.
+The payout amount is determined by multiplying the number of vir-
+tual shares at the end of the performance period on the basis of the
+target achievement by the average price of E.ON stock in the last
+60 days prior to the end of the performance period and adding the
+dividends per share distributed on E.ON stock during the perfor-
+mance period. The payout is capped at 200 percent of the contrac-
+tually agreed-on target amount.
+E.ON Annual Report 2021
+Marc Spieker
+Victoria Ossadnik (since April 1, 2021)
+Patrick Lammers (since August 1, 2021)¹
+Thomas König
+50th percentile
+(Median)
+Target amount
+Percentile
+achieved
+by E.ON
+75th percentile
+Upper
+threshold
+Stock Price
++
+Payout Amount
+Capped at 200%
+Dividends
+of target amount
+Х
+=
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Compensation Report 120
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+In the financial year granted fifth tranche of the E.ON Performance Plan (2021-2024)
+The fifth tranche of the E.ON Performance Plans was granted effective January 1, 2021. Management Board members received virtual
+shares in the amount of the contractually agreed-on target amount. The conversion into virtual shares is based on the fair market value on
+the date when the shares are granted. The fair market value is determined by applying methods accepted in financial mathematics, taking
+into account the expected future payout, and hence, the volatility and risk associated with the E.ON Performance Plan.
+The following table shows the target amount, the fair value per share at grant and the number of performance shares granted:
+E.ON Performance Plan, 5th Tranche (2021-2024)
+Leonhard Birnbaum (Chairman since April 1, 2021)
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+Compensation Report 118
+175%
+↑
+For the Management Board members who left in the 2021 financial year, Johannes Teyssen and Karsten Wildberger, the individual
+performance factor was set at 100 percent.
+Target
+achievement
+125%
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Compensation Report 117
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Taking into account the collective performance and individual contributions of the Management Board members, the Supervisory Board has set a uniform performance factor for all Management Board members active as of December 31, 2021
+Total Target Achievement and Payout Amounts
+2021 Bonus
+Leonhard Birnbaum (Chairman since April 1, 2021)
+Thomas König
+Patrick Lammers (since August 1, 2021)
+Victoria Ossadnik (since April 1, 2021)
+Marc Spieker
+Johannes Teyssen (until March 31, 2021)
+Karsten Wildberger (until July 31, 2021)
+Target amount
+Target achievement
+Full-year basis
+Taking into account the company performance and the individual performance factor set by the Supervisory Board for the 2021 financial
+year, total target achievement for the 2021 bonus, which will be paid out at the start of the 2022 financial year, is 176 percent for the
+Management Board members active as of December 31, 2021 and 141 percent for the Management Board members who left during the
+2021 financial year:
+€1,420,000¹
+New ESG metrics were introduced to improve reporting and governance with regard to the ESG strategy.
+A comprehensive concept for strengthening women in management positions has been developed. In addition, the first concrete measures have already been taken, such as
+the implementation of job sharing models and the promotion of part-time management roles.
+Search
+↑
+Back
+Compensation Report 116
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Back
+In determining the individual performance factor for the 2021 financial year, the Supervisory Board discussed and assessed the Management
+Board's overall performance as well as the individual performance of Management Board members on the basis of predetermined targets.
+Individual Performance Factor
+2021 targets
+Individual and collective targets, particularly with regard to the
+following topics:
+The Management Board has anchored the Group-wide ESG strategy as a core element in the new E.ON strategy. In addition, the new ESG reporting requirements have
+already been successfully implemented.
+Strategic targets and projects
+The Supervisory Board assessed the performance of the Management Board members taking into account the predefined targets for 2021 financial year. The Supervisory
+Board rated the following aspects as particularly positive in its assessment of the Management Board's performance:
+Digitalization
+Promoting talent and strengthening diversity
+ESG strategy
+•
+In 2021 financial year, the Management Board adopted the new E.ON strategy as a determined growth and investment offensive to shape the energy transition. This laid a
+clear path for E.ON's long-term and sustainable development.
+E.ON updated the Green Bond Framework at an early stage with regard to the basis of the new EU taxonomy, whereupon a green bond with a volume of €750 million was
+subsequently issued under explicit recognition by the EU Commission.
+The Management Board quickly implemented the public law agreement between the German federal government and the nuclear power plant operators, resulting in
+significant reimbursements from payments made for the purchase of residual electricity volumes.
+In 2021 financial year, the IT & Digital Technology board function was established.
+In addition, the Management Board has anchored the topic of digitalization as an integral part of E.ON's strategy and several major digitalization projects have already been
+successfully implemented.
+Furthermore, significant progress was made in managing cyber risks and digital employee skills were significantly strengthened.
+Assessment
+€675,000
+The targets for individual performance factors are set at the beginning of each financial year. No specific target figures are disclosed ex ante
+for competitive reasons. The Supervisory Board may also factor in, for example, strategic targets, quantitative and qualitative customer tar-
+gets as well as performance indicators for the Company's core businesses or matters such as health, safety, and environment and personnel
+management.
+Company
+performance
+Outlook for 2022
+Due to the application of the new compensation system from the 2022 finan-
+cial
+year, the design of the annual bonus changes. In view of the importance of
+retaining existing customers and acquiring new ones, company performance
+will be supplemented by a further performance criterion. In addition to EPS¹
+(80 percent weighting), Net Promoter Score (20 percent weighting) will be
+factored in. In addition, the range of the individual performance factor will be
+reduced to customary 80 to 120 percent. At the same time, the cap on the
+maximum payout is reduced to 180 percent. In addition, the possibility of dis-
+cretionary special compensation will be eliminated.
+¹Taking into account the annually determined fluctuation range defined from surplus or shortfalls in
+network revenues (regulatory net balances in the network business).
+Bonus
+Target
+Company Performance
+0-190%
+amount
+Earnings Per Share (EPS)
+Х
+• Weighting: 80%
+Net Promoter Score
+(NPS)
+• Weighting: 20%
+Individual Performance
+Factor 80-120%
+Assessment of Management
+Board members' performance
+✗ based on:
+• Management Board's overall
+performance
+⚫ Individual performance
+(bonus/malus)
+Bonus
+Capped at 180% of
+the target amount
+E.ON Annual Report 2021
+Contents
+Search
+Prorated
+€1,271,250²
+€675,000
+¹Corresponds to the target amount for Leonhard Birnbaum as Management Board Chairman (since April 1, 2021) on a full-year basis.
+2Corresponds to the sum of the respective pro rata target amounts as an ordinary Management Board member (until March 31, 2021; €206,250) and as Management Board Chairman (from April 1, 2021; €1,065,000).
+€891,000
+€1,188,000
+€499,669
+€555,188
+Paid out in cash
+€393,750
+100%
+Total
+Payout amount
+€2,237,400
+€1,188,000
+€675,000
+€281,250
+125%
+176%
+€495,000
+141%
+125%
+€506,250
+€675,000
+€675,000
+141%
+100%
+€354,375
+Individual
+performance factor
+€1,417,500
+125%
+€675,000
+€675,000
+125%
+2020 bonus
+882
+919
+32
+2,857
+100
+2,323
+243
+234
+E.ON Annual Report 2021
+↑
+Search
+2021 bonus
+Back
+Compensation Report 130
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+Base salary
+Fringe benefits
+42
+One-year variable compensation
+Contents
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+2020
+in €k
+689
+62
+891
+Multi-year variable compensation
+Performance Plan, 2nd Tranche (2018-2021)
+0
+Compensation awarded and due pursuant to Section 162 AktG
+1,431
+100
+Service cost
+611
+1,188
+Marc Spieker (Chief Financial Officer) since January 1, 2017
+in %
+24
+700
+2
+53
+2020
+in €k
+in €k
+700
+50
+2021
+Share Matching Plan, 4th Tranche (2016-2020)
+Share Matching Plan, 5th Tranche (2017-2021)
+Performance Plan, 1st Tranche (2017-2020)
+Performance Plan, 2nd Tranche (2018-2021)¹
+13
+Service cost
+1,169
+1,929
+3,915
+3,295
+896
+418
+1,853
+882
+79
+30
+100
+7,868
+911
+1,411
+176
+100
+3,218
+299
+¹Due to Karsten Wildberger's resignation from the Board of Management effective July 31, 2021, all virtual shares granted to him under the 2nd to 5th tranches of the E.ON Performance Plan lapsed without replacement.
+2In addition to the compensation components presented here for his active service until March 31, 2021, Johannes Teyssen received further compensation components from April 1, 2021 as shown in the table "Compensation of former Management Board members."
+E.ON Annual Report 2021
+1
+Contents
+39
+555
+500
+689
+in €k
+Johannes Teyssen (Chairman and Chief Executive Officer) until March 31, 20212
+2020
+in €k
+2021
+Karsten Wildberger (Chief Operating Officer-Commercial) until July 31, 2021
+2021
+2020
+in %
+310
+8
+1,240
+7
+Compensation awarded and due pursuant to Section 162 AktG
+0
+in €k
+408
+30
+in %
+in €k
+29
+700
+2
+51
+1,446
+35
+37
+Search
+2021
+Cumulative
+Final share price
+dividends
+€8.836
+€1.40
+Payout amount
+€680,500
+€819,000
+€7.17
+114,226
+€8.836
+€1.40
+Number of virtual
+shares granted
+66,481
+€292,500
+40,795
+€8.836
+€1.40
+€1,169,217
+€417,578
+The new compensation system introduced effective January 1, 2022, reduces the cap for the bonus from 200 percent of the target bonus to 180 percent.
+In addition to the caps on the individual performance-based compensation components, the Supervisory Board has set maximum compensation as
+defined in Section 87a, Paragraph 1, Sentence 2, Number 1 AktG. This limits the total amount of all compensation paid out for a financial year; that is,
+non-performance-based and performance-based components, including all fringe benefits, as well as any service cost for the company pension plan
+or any pension substitutes, regardless of the payment date. The maximum compensation for the Chairman of the Management Board is €10,000,000,
+and for ordinary Management Board members, €5,500,000 each.
+Compliance with maximum compensation is reviewed at the end of each financial year. However, final compliance with maximum compensation for a
+financial year can only be reported after the end of the performance period of the last compensation component to be paid out (E.ON Performance
+Plan). Compliance with maximum compensation for the 2022 financial year can therefore only be reported definitively at the end of the performance
+period of the tranche of the E.ON Performance Plan granted in the 2022 financial year; that is, in the Compensation Report for the 2025 financial year.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+€7.17
+Back
+€7.17
+LTI component
+€476,667
+3.2.2.2. E.ON Share Matching Plan (Granted until 2016)
+Until the introduction of the new compensation system on January 1,
+2017, Management Board members received stock-based com-
+pensation under the E.ON Share Matching Plan. Until the beginning
+of the 2016 financial year, the Supervisory Board decided, based on
+the Executive Committee's recommendation, on the grant of a
+respective new tranche for the current financial year, including the
+respective targets and the number of virtual shares granted to indi-
+vidual members of the Management Board. To serve as a long-term
+incentive for sustainable business performance, each tranche had
+a performance period of four years. The tranche started on April 1 of
+each year.
+Following the Supervisory Board's decision to grant a new tranche,
+Management Board members initially received vested virtual shares
+equivalent to the amount of the LTI component of their bonus. The
+determination of the LTI component took into consideration the
+overall target achievement of the old compensation system's bonus
+for the preceding financial year. The number of virtual shares was
+calculated on the basis of the amount of the LTI component and
+E.ON's average stock price during the first 60 days prior to the four-
+year performance period. Furthermore, Management Board members
+could receive, on the basis of annual Supervisory Board decisions,
+a base matching of additional non-vested virtual shares in addition
+to the virtual shares that resulted from their LTI component. In
+addition, Management Board members could, depending on the
+company performance during the performance period, receive
+performance matching of up to two additional non-vested virtual
+shares per share that resulted from base matching.
+The arithmetical total target amount granted at the start of the
+vesting period, which began on April 1 of the year in which a
+tranche was granted, was therefore the sum of the value of the LTI
+component, base matching, and performance matching (depending
+on the degree of achievement of a predefined company performance
+target).
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Compensation Report 123
+→I. Introduction
+Share price at grant
+→ II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+The fifth and final tranche of the E.ON Share Matching Plan (2017-2021) consisted only of the LTI component of the 2016 bonus. The payout
+from the fifth tranche of the E.ON Share Matching Plan is calculated by multiplying the number of virtual shares granted on the basis of the
+LTI component by E.ON's average stock price during the last 60 days prior to the end of the performance period. To each virtual share is then
+added the aggregate per-share dividend paid out during the performance period. This total-cash value plus dividends—is then paid out.
+Payouts are capped at 200 percent of the arithmetical total target amount.
+E.ON Share Matching Plan, 5th Tranche (2017-2021)
+Leonhard Birnbaum
+Johannes Teyssen
+Karsten Wildberger (since April 1, 2016)
+3.3. Compensation Caps
+To ensure appropriate compensation for Management Board mem-
+bers, compensation is capped in two ways. First, caps are defined
+for the performance-based compensation components. These are
+200 percent of the target bonus for the annual bonus and likewise
+200 percent of the target amount for the E.ON Performance Plan.
+Second, the annual compensation to be paid out to Management
+Board members is subject to an overall cap. This means that the
+sum of the individual compensation components in one year may
+not exceed 200 percent of the total agreed-on target compensa-
+tion, which consists of base salary, target bonus, and the target
+amount of long-term variable compensation. The cap increases in
+accordance with the amounts of fringe benefits and company pen-
+sion benefits from the respective financial year.
+Outlook for 2022
+Grant
+Calculation of payout
+In financial year ended fifth tranche of the E.ON Share Matching Plan (2017-2021)
+of target amount
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+289
+41
+April 1, 2021
+150
+1,050
+151
+22
+January 1, 2017
+150
+1,050
+1,437
+1,050
+205
+3.5. Malus and Clawback Rules
+For the Management Board members newly appointed in 2021
+financial year and for Leonhard Birnbaum (since April 1, 2021), the
+malus and clawback rules, effective for all Management Board
+members with the introduction of the new compensation system
+on January 1, 2022, already applied in 2021 financial year. Under
+these rules, the Supervisory Board has the opportunity of reducing
+variable compensation that has not yet been paid out (malus) or of
+reclaiming variable compensation that has already been paid out
+(clawback).
+In the case of intentional violations of material provisions of E.ON's
+Code of Conduct and/or material contractual obligations, or in the case
+of a material breach of the duty of care as defined in Section 93 AktG,
+the Supervisory Board may, at its reasonable discretion, partially
+or fully reduce to zero any variable compensation not yet paid out
+during the assessment period in which the violation occurred.
+Furthermore, the Supervisory Board has the opportunity of partially
+or fully reclaiming the gross amount of variable compensation
+already paid out (compliance clawback) if one of the aforementioned
+violations becomes known or is discovered. In addition, if variable
+compensation has been determined or paid out on the basis of
+incorrect Consolidated Financial Statements, the Supervisory Board
+may reclaim the difference determined on the basis of a corrected
+determination (performance clawback).
+Clawback is excluded if the payout was made more than three years
+ago.
+Other claims of E.ON SE, in particular pursuant to Section 93,
+Paragraph 2 AktG, the right to revoke the appointment as defined
+in Section 84, Paragraph 3 AktG, and the right to terminate the
+service agreement without notice remain unaffected.
+Neither the malus rule nor the clawback rule was made use of in
+the 2021 financial year.
+4. Compensation-Related Transactions
+4.1. Premature Termination of a Management Board Service
+Agreement
+From January 1, 2022, Management Board members are obligated
+to fulfill their share ownership requirement for two additional years
+after leaving the Management Board.
+Compensation Report 124
+150
+152
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+3.4. Share Ownership Guidelines
+To strengthen the capital-market focus and shareholder-oriented
+culture, effective 2017 share ownership guidelines apply to Man-
+agement Board members. The guidelines obligate Management
+Board members to invest in E.ON shares equaling 200 percent of
+base salary (for the Management Board Chairperson) and 150 per-
+cent of base salary (for the other Management Board members), to
+Share Ownership Guidelines
+Leonhard Birnbaum (Chairman since April 1, 2021)
+Thomas König
+Patrick Lammers
+Victoria Ossadnik
+Marc Spieker
+Outlook for 2022
+demonstrate that they have done so, and to hold the shares until
+the end of their service on the Management Board. Until the
+required investment is reached, Management Board members are
+obligated to invest amounts equivalent to the net payouts from
+their long-term compensation in actual E.ON share. The degree of
+fulfillment of the shareholding requirements of the individual Man-
+agement Board members can be summarized as follows:
+Member of the
+Management Board
+August 1, 2021
+Target
+in % of base salary
+in €k
+in €k
+200
+2,440
+2,446
+Status quo January 2022
+in % of base salary
+201
+June 1, 2018
+150
+1,050
+1,066
+since
+July 1, 2013
+Payout Amount
+Cap at 200%
+=
+Dividends
+26.3%
+69th percentile
+138%
+Average target achievement relative TSR 2018-2021
+56%
+25th percentile
+(1st quartile)
+50th percentile
+(Median)
+75th percentile
+(3rd quartile)
+Position compared with the companies of the STOXX® Europe 600 Utilities
+Taking into account the closing price and cumulative dividends, the total payout amounts from the second tranche of the E.ON Performance
+Plan are as follows. Payout takes place in April 2022.
+2021
+E.ON Performance Plan, 2nd Tranche (2018-2021)
+Fair value per share
+Full-year basis
+€1,008,333
+€825,000
+€825,000
+€1,732,500
+Prorated
+€1,008,333
+at grant
+€6.41
+Grant
+Number of
+performance shares
+granted
+157,307
+Calculation of payout
+Final number of
+performance shares
+Final share price
+Cumulative
+dividends
+Payout amount
+Target amount
+87,699
+85%
+6.4%
+↑
+Back
+Compensation Report 121
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+In financial year ended second tranche of the E.ON Performance Plan (2018-2021)
+The performance period of the second tranche of the E.ON Performance Plan ended at the conclusion of the 2021 financial year, on
+December 31, 2021 (2018-2021). Target achievement was as follows:
+Target achievement relative TSR 2018-2021
+Target achievement
+150%
+100%
+50%
+42nd percentile
+Financial year
+E.ON's position
+Target
+achievement
+2018
+-7.5%
+23th percentile
+0%
+2019
+8.5%
+14th percentile
+0%
+2020
+E.ON's TSR
+performance
+€11.141
+€1.66
+€481,250
+Back
+Compensation Report 122
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Outlook for 2022
+With the introduction of the new compensation system effec-
+tive January 1, 2022, the revised E.ON Performance Plan will
+be granted for the first time. From 2022 onward, alongside TSR
+(50 percent weighting), ROCE (25 percent weighting) and the
+E.ON Sustainability Index (25 percent weighting) are considered
+as performance criteria for long-term variable compensation.
+The E.ON Sustainability Index contains the four most relevant
+environmental, social, and governance ("ESG") aspects at E.ON.
+In 2022 these are: climate action, diversity, health and safety,
+and ESG ratings. All ESG aspects are backed by comprehensible
+and measurable targets.
+Initial Number
+of Virtual
+Shares Granted
+☑
+Total Target Achievement 0-150%
+Total Shareholder
+↑
+Return (TSR)
+• Relative comparison
+to the STOXX®
+Europe 600 Utilities
+index
+Return on Capital
+Employed (ROCE)
+Weighting: 25%
+• Definition of annual
+strategy-based
+target values for the
+maturity period at
+the beginning of the
+performance period
+E.ON Sustainability
+Index
+• Weighting: 25%
+• Reflects the four
+most relevant ESG
+aspects at E.ON in
+each case
+• Comprehensible and
+measurable targets
+are set for each of
+the four aspects
+Х
+Share Price
+plus
+• Weighting: 50%
+Search
+Contents
+E.ON Annual Report 2021
+€6.41
+75,078
+41,858
+€11.141
+€1.66
+€1,122,635
+€535,824
+€825,000
+€6.41
+128,706
+71,755
+€11.141
+€1.66
+€918,536
+€1,732,500
+€6.41
+270,281
+150,682
+€11.141
+€1.66
+€1,928,880
+Leonhard Birnbaum
+Thomas König (since June 1, 2018)
+Marc Spieker
+Johannes Teyssen
+Due to Karsten Wildberger's departure from the Management Board effective July 31, 2021, all virtual shares granted to him under the
+2nd tranche of the E.ON Performance Plan lapsed without any replacement.
+Ordinary termination of the service agreement is excluded. The right
+of either party to terminate the service agreement for cause remains
+unaffected. In case of premature termination of the Management
+Board service agreement for good cause for which the Management
+Board member is responsible, the Management Board member has
+no claim to a severance payment for the remaining term. Further-
+more, all tranches of the E.ON Performance Plan not yet paid out
+lapse without any replacement.
+in %
+E.ON Annual Report 2021
+Search
+2021
+20
+506
+50
+1
+700
+21
+in €k
+in €k
+in %
+15
+2020
+in €k
+525
+2021
+Victoria Ossadnik (Chief Operating Officer-Digital) since April 1, 2021
+Marc Spieker (Chief Financial Officer) since January 1, 2017
+Performance Plan, 4th Tranche (2020-2023)
+Multi-year variable compensation
+2021 bonus
+2020 bonus
+One-year variable compensation
+Fringe benefits
+Base salary
+Target compensation
+2020
+¹Because Patrick Lammers was not a Management Board member on the date of grant, April 1, 2021, the grant was made on the basis of a pro-rated target amount.
+in %
+28
+2,483
+Total compensation
+234
+10
+243
+25
+611
+2,253
+2,250
+1,872
+Service cost
+in €k
+Total
+825
+33
+825
+Performance Plan, 5th Tranche (2021-2024)¹
+825
+27
+675
+675
+53
+2
+700
+33
+100
+100
+2,498
+2020 bonus
+One-year variable compensation
+Fringe benefits
+Base salary
+2
+25
+46
+2
+25
+292
+700
+2021 bonus
+28
+in %
+in €k
+in €k
+in %
+46
+700
+in €k
+2020
+2021
+2021
+Patrick Lammers (Chief Operating Officer-Commercial) since August 1, 2021
+in €k
+1,181
+Multi-year variable compensation
+Performance Plan, 5th Tranche (2021-2024)¹
+100
+2,506
+Total compensation
+20
+240
+252
+10
+260
+941
+2,246
+2,246
+Performance Plan, 4th Tranche (2020-2023)
+29
+33
+825
+825
+24
+24
+281
+27
+675
+675
+Service cost
+Total
+344
+2,493
+100
+2,487
+The following tables present target compensation for the 2021
+financial year for Management Board members active as of Decem-
+ber 31, 2021, and, for better comparability, likewise for the 2020
+financial year. Target compensation consists of the compensation
+granted for the financial year that is paid out in the case of 100-per-
+cent target achievement.
+Target compensation
+Base salary¹
+Fringe benefits
+One-year variable compensation
+2020 bonus
+2021 bonus¹
+Multi-year variable compensation
+Performance Plan, 4th Tranche (2020-2023)
+"LTI innogy" (2020-2021)
+Leonhard Birnbaum (Chairman and Chief Executive Officer)
+Management Board member since July 1, 2013;
+Chairman since April 1, 2021
+5.1. Target Compensation
+2021
+in €k
+in %
+in €k
+1,115
+25
+800
+14
+0
+23
+909
+1,271
+2020
+28
+5. Individualized Disclosure of Management Board Compensation
+The target compensation as well as the compensation awarded
+and due of the individual Management Board member is presented
+below in tabular form pursuant to Section 162, Paragraph 1,
+Sentence 1 AktG.
+→ III. Compensation of the Management Board in the 2021 Financial Year
+↑
+Back
+→ I. Introduction
+Compensation Report 125
+→ II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+In the event of premature termination of the Management Board
+service agreement without good cause, the Management Board
+service agreements provide for a severance cap in line with the rec-
+ommendation of the DCGK. According to this, payments in this
+context may not exceed two years' compensation and may not
+compensate for more than the remaining term of the service agree-
+ment. Total compensation for the past financial year and the
+expected total compensation for the current financial year in which
+the service agreement ends prematurely are used to calculate the
+settlement payment cap.
+In the event of premature termination of the Management Board
+service agreement due to permanent incapacity to work, the service
+agreement ends at the conclusion of the sixth month following the
+month in which the permanent incapacity to work was established.
+In this case, the performance period of outstanding tranches of the
+E.ON Performance Plan-paid out on the basis of a closing stock
+price determined at the premature end of the performance period, a
+dividend equivalent calculated prematurely, and a target achieve-
+ment determined prematurely-also ends.
+If a Management Board member dies during the term of the service
+agreement, the surviving spouse, or, alternatively, their legally
+dependent children, is entitled to continued payment of the base
+salary and the target bonus for six months following the month of
+death. In addition, outstanding tranches of the E.ON Performance
+Plan are paid out on the basis of a closing share price determined at
+the premature end of the performance period, a dividend equivalent
+calculated prematurely, and a target achievement determined pre-
+maturely.
+No severance payments were made in the 2021 financial year. Due
+to Karsten Wildberger's resignation from the Management Board
+effective July 31, 2021, all virtual shares granted to him within the
+second to fifth tranches of the E.ON Performance Plan lapsed with-
+out any replacement.
+4.2. Change of Control
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+In the event of a premature loss of a Management Board position
+due to a change of control, Management Board members are enti-
+tled to settlement payments. The change-of-control agreements
+stipulate that a change in control exists in three cases: a third party
+acquires at least 30 percent of the Company's voting rights, thus
+triggering the automatic requirement to make an offer for the Com-
+pany pursuant to Germany's Stock Corporation Takeover Law; the
+Company, as a dependent entity, concludes a corporate agreement;
+the Company is merged with a non-affiliated company. Manage-
+ment Board members are entitled to a settlement payment if,
+within 12 months of the change of control, their service agreement
+is terminated by mutual consent, expires, or is terminated by them;
+in the latter case, however, only if their position on the Management
+Board is materially affected by the change in control. Management
+Board members' settlement payment consists of their base salary
+and target bonus plus fringe benefits for two years after termination
+of their service agreements.
+4.3. Non-Compete Clause
+The service agreements of Management Board members include a
+non-compete clause. For a period of six months after the termina-
+tion of their service agreement, Management Board members are
+contractually prohibited from working directly or indirectly for a
+company that competes directly or indirectly with the Company or
+its affiliates. Management Board members receive a compensation
+payment for the period of the non-compete restriction. The pro-
+rated payment is based on 100 percent of their contractually stipu-
+lated annual target compensation (base salary and target bonus),
+but is, at a minimum, 60 percent of their most recently received
+contractually stipulated compensation. Other benefits owed by the
+Company for the period after termination of the service agreement
+will be offset against this compensation.
+For the Management Board members newly appointed in the 2021
+financial year and for Leonhard Birnbaum (since April 1, 2021), other
+benefits owed by the Company for the period after termination of the
+service agreement, in particular a settlement payment in the event
+of premature termination of the service agreement and company
+pension benefits, will instead be offset against this compensation.
+This applies to the other Management Board members with the intro-
+duction of the new compensation system effective January 1, 2022.
+In conjunction with the termination of his service agreement effec-
+tive March 31, 2021, Johannes Teyssen was granted a compen-
+sation payment for the period of the non-compete restriction of
+€301,403 per month for the subsequent six months. Within this
+period, Johannes Teyssen received no pension payments. No other
+compensation payments for the period of the non-compete restric-
+tion were granted in the 2021 financial year.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Compensation Report 126
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+For the Management Board members newly appointed in the 2021
+financial I year and for Leonhard Birnbaum (since April 1, 2021), in
+accordance with the DCGK, these settlement payments are also
+limited to the amount of annual compensation for the remaining
+term of the service agreement. This applies to the other Management
+Board members with the introduction of the new compensation
+system effective January 1, 2022. Total compensation for the past
+financial year and the expected total compensation for the current
+financial year in which the service agreement ends prematurely are
+used to calculate the settlement payment cap.
+1,008
+125
+Performance Plan, 5th Tranche (2021-2024)
+1,750
+Base salary
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+E.ON Performance Share Plan (granted from 2017 onward on
+January 1 of a financial year), two tranches of multi-year variable
+compensation are reported, although they were granted in different
+financial years. For the 2021 financial year, this includes the fifth
+tranche of the E.ON Share Matching Plan (LTI component of the
+2016 bonus; performance period ended on March 31, 2021) and
+the second tranche of the E.ON Performance Plan (granted in 2018;
+performance period ended on December 31, 2021).
+It should be noted that in the 2021 financial year, as in the previous
+year, as a result of the changeover from the E.ON Share Matching
+Plan (granted until 2016 on April 1 of a financial year) to the current
+In addition, the service cost of pension entitlements in accordance
+with IAS 19 for the 2021 financial year is shown in the tables below
+the compensation awarded and due pursuant to Section 162 AktG
+as part of Management Board compensation.
+the fifth tranche of the E.ON Share Matching Plan (2017-2021);
+that is, the LTI component of 2016 bonus,
+•
+•
+the 2021 annual bonus, which is paid in the 2022 financial year,
+fringe benefits in the 2021 financial year,
+base salary in the 2021 financial year,
+Fringe benefits
+Consequently, compensation awarded and due in the 2021 financial
+year consists, pursuant to Section 162 AktG, of:
+5.2. Compensation Awarded and Due in the Financial Year pursuant
+to Section 162 AktG
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+Compensation Report 128
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+¹Because Victoria Ossadnik was a Management Board member on the date of grant, April 1, 2021, the grant was made on the basis of the full-year target amount.
+The following presents the compensation awarded and due of the
+individual Management Board member in the 2021 financial year
+below pursuant to Section 162 AktG. Compensation awarded and
+due consists of all compensation components earned as of the con-
+clusion of the financial year. This includes all compensation compo-
+nents for which performance has been fully carried out or for which
+performance measurement ends at the conclusion of the 2021 finan-
+cial year even if payout does not take place until the 2022 financial
+year. Consequently, the 2021 bonus is disclosed under one-year
+variable compensation even though payout did not take place until
+the start of the 2022 financial year. The same applies to the E.ON
+Performance Plan, whose second tranche, which ended at the con-
+clusion of the 2021 financial year, is disclosed for the 2021 financial
+year even though payout did not take place until the start of the
+2022 financial year. This disclosure approach presents transparently
+the relationship between the business results of a financial year and
+the resulting compensation.
+One-year variable compensation
+2020 bonus
+2021 bonus
+Multi-year variable compensation
+39
+Total
+Service cost
+4,150
+2,865
+335
+7
+333
+Total compensation
+4,485
+100
+3,198
+¹Target amounts for 2021 based on service contract provisions until March 31, 2021 (ordinary Management Board member) and from April 1, 2021 on the basis of the service contract provisions as
+Management Board Chairman.
+E.ON Annual Report 2021
+Contents
+Search
+Target compensation
+↑
+Compensation Report 127
+Back
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ III. Compensation of the Management Board in the 2021 Financial Year
+Compensation awarded and due pursuant to Section 162 AktG
+Service cost
+,,LTI innogy" (2020-2021)¹
+Share Matching Plan, 4th Tranche (2016-2020)
+Share Matching Plan, 5th Tranche (2017-2021)
+Performance Plan, 1st Tranche (2017–2020)
+Performance Plan, 2nd Tranche (2018–2021)
+Contents
+Thomas König (Chief Operating Officer-Networks) since June 1, 2018
+2020
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+23
+•
+the second tranche of the E.ON Performance Plan, that was
+granted in the 2018 financial year and ended at the conclusion
+of the 2021 financial year and is paid out in the 2022 financial
+year.
+¹The "LTI innogy" was granted for the period January 1 to June 1, 2020 (dual mandate within the meaning of Section 88, Paragraph 1, Sentence 2 of the AktG). The term was originally two years. Target
+achievement was set at the conclusion of the dual mandate in the 2020 financial year at 100 percent; "LTI innogy" is thus to be disclosed as compensation awarded and due for the 2020 financial year.
+In accordance with the original agreement, payout takes place in April 2022.
+E.ON Annual Report 2021
+Search
+↑
+Back
+Compensation Report 129
+333
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+Base salary
+Fringe benefits
+One-year variable compensation
+2020 bonus
+2021 bonus
+Multi-year variable compensation
+Share Matching Plan, 4th Tranche (2016-2020)
+Share Matching Plan, 5th Tranche (2017-2021)
+Performance Plan, 1st Tranche (2017-2020)
+Performance Plan, 2nd Tranche (2018-2021)
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+4,862
+100
+335
+Leonhard Birnbaum (Chairman and Chief Executive Officer)
+Management Board member since July 1, 2013;
+Chairman since April 1, 2021
+2021
+2020
+in €k
+in %
+in €k
+1,115
+22
+800
+14
+0
+918
+2,237
+43
+1,918
+680
+1,078
+1,123
+35
+125
+5,169
+Compensation awarded and due pursuant to Section 162 AktG
+Service cost
+Contents
+2021
+536
+0
+2,470
+100
+260
+1,435
+252
+811
+100
+240
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+Victoria Ossadnik (Chief Operating Officer-Digital) since April 1, 2021
+Base salary
+Fringe benefits
+One-year variable compensation
+Thomas König (Chief Operating Officer-Networks) since June 1, 2018
+2020
+2021 bonus
+Multi-year variable compensation
+Share Matching Plan, 4th Tranche (2016-2020)
+Share Matching Plan, 5th Tranche (2017-2021)
+Performance Plan, 1st Tranche (2017-2020)
+in €k
+525
+15
+22
+22
+2020 bonus
+495
+61
+Patrick Lammers (Chief Operating Officer-Commercial) since August 1, 2021
+2021
+2020
+in €k
+700
+in %
+in €k
+28
+700
+2
+46
+46
+in €k
+1,188
+689
+36
+3
+in %
+25
+292
+in €k
+48
+64
+140
+4
+70
+32
+70
+8
+219
+0
+218
+140
+140
+53
+140
+110
+9
+Ulrich Grillo
+140
+259
+42
+10
+0
+332
+258
+since May 28, 2020 Vice Chairman)
+Carolina Dybeck Happe
+Klaus Fröhlich
+95
+0
+110
+7
+5
+9
+0
+147
+140
+70
+185
+6
+64
+140
+70
+32
+70
+9
+4
+9
+0
+219
+219
+Stefan May
+140
+60
+4
+140
+Eugen-Gheorge Luha
+273
+218
+14
+0
+265
+224
+Monika Krebber
+140
+64
+15
+140
+32
+64
+8
+4
+9
+0
+60
+70
+12
+2021
+248
+Compensation Report 133
+Fixed compensation
+Committee compensation
+Attendance fees
+Compensation from
+affiliated companies
+2021
+2020
+140
+2020
+2021
+2020
+2021
+2020
+Total compensation
+2021
+2020
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+in €k
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+IV. Supervisory Board Compensation in the 2021
+Financial Year
+The following first presents the Supervisory Board's compensation
+system and then the compensation awarded and due of the individ-
+ual Supervisory Board members in the 2021 financial year.
+1. Compensation System of the Supervisory Board
+The compensation of Supervisory Board members is determined by
+the Annual Shareholders Meeting and governed by Section 15 of
+the Company's Articles of Association. As a result of the regulatory
+changes and the associated obligation to submit the compensation
+system for Supervisory Board members to the Annual Shareholders
+Meeting, the Supervisory Board's compensation system was sub-
+mitted to the Annual Shareholders Meeting 2021 for resolution.
+The Supervisory Board's compensation system was not modified
+compared with previous years, and only a confirmatory resolution
+was adopted. The Annual Shareholders Meeting confirmed the
+compensation system with 99.31 percent votes in favor.
+The purpose of the compensation system is to enhance the Super-
+visory Board's independence for its oversight role. Furthermore,
+there are a number of duties that Supervisory Board members must
+perform irrespective of the Company's financial performance.
+Supervisory Board members—in addition to being reimbursed for
+their expenses-therefore receive fixed compensation and compen-
+sation for committee duties.
+The Chairman of the Supervisory Board receives fixed compensa-
+tion of €440,000; the Deputy Chairmen, €320,000. The other
+members of the Supervisory Board receive compensation of
+€140,000. The Chairman of the Audit and Risk Committee receives
+an additional €180,000; the members of the Audit and Risk Com-
+mittee, an additional €110,000. Other committee chairmen receive
+an additional €140,000; committee members, an additional
+€70,000. Members serving on more than one committee receive
+the highest applicable committee compensation only. In contradis-
+tinction to the compensation just described, the Chairman and the
+Deputy Chairmen of the Supervisory Board receive no additional
+compensation for their committee duties. In addition, Supervisory
+Board members are paid an attendance fee of €1,000 per day for
+meetings of the Supervisory Board or its committees. Individuals
+who were members of the Supervisory Board or any of its commit-
+tees for less than an entire financial year receive pro rata compen-
+sation.
+2. Individualized Disclosure of Supervisory Board Compensation
+The compensation awarded and due to the members of the Super-
+visory Board in the 2021 financial year is broken down below into
+the individual compensation components pursuant to Section 162
+AktG. In addition, the table contains the individual compensation
+components' relative share of total compensation.
+Compensation Report 132
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+III. Compensation of the Management Board in the 2021 Financial Year
+in %
+in €k
+in €k
+455
+Erich Clementi
+320
+96
+320
+0
+13
+4
+17
+0
+333
+337
+Christoph Schmitz (since February 1, 2020;
+320
+96
+452
+0
+15
+3
+in %
+in €k
+in €k
+in %
+in €k
+in €k
+in %
+0
+in €k
+in €k
+Karl-Ludwig Kley
+440
+97
+440
+0
+12
+in €k
+70
+350
+70
+0
+289
+288
+Elisabeth Wallbaum
+140
+54
+140
+110
+42
+110
+11
+4
+10
+0
+261
+8
+260
+3
+140
+110
+15
+5
+19
+20
+7
+24
+285
+293
+Karen de Segundo
+140
+48
+140
+140
+48
+9
+Deborah Wilkens
+140
+53
+18
+8
+15
+237
+234
+Albert Zettl
+140
+57
+140
+70
+28
+70
+12
+5
+16
+9
+4
+9
+70
+140
+110
+42
+110
+13
+5
+11
+39
+0
+261
+Ewald Woste
+140
+59
+140
+70
+30
+263
+30
+110
+49
+155
+96
+Szilvia Pinczésné Márton
+140
+95
+140
+0
+7
+5
+5
+0
+147
+145
+René Pöhls
+140
+5
+50
+8
+5
+10
+4
+7
+12
+5
+64
+232
+281
+Miroslav Pelouch (since May 28, 2020)
+140
+90
+93
+0
+7
+10
+3
+140
+110
+39
+333
+334
+Rolf Martin Schmitz
+140
+95
+140
+0
+8
+5
+5
+0
+148
+145
+Fred Schulz
+140
+0
+14
+4
+13
+110
+12
+4
+10
+20
+7
+90
+140
+282
+Andreas Schmitz
+140
+42
+140
+180
+54
+180
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+100
+Back
+Search
+0
+232
+281
+-17
+from January 1, 2004,
+until March 31, 2021;
+Miroslav Pelouch
+since May 28, 2020
+155
+96
+61
+Chairman from May 1, 2010,
+Szilvia Pinczésné Márton
+147
+145
+1
+Johannes Teyssen¹
+Karsten Wildberger
+until March 31, 2021
+5,956
+7,868
+-24
+219
+René Pöhls
+219
+273
+2,470
+1,435
+72
+Ulrich Grillo
+265
+224
+18
+since August 1, 2021
+811
+Victoria Ossadnik
+since April 1, 2021
+1,431
+Marc Spieker
+since January 1, 2017
+2,857
+2,323
+23
+Monika Krebber
+Eugen-Gheorge Luha
+Stefan May
+218
+-20
+282
+350
+-19
+185
+801
+Elisabeth Wallbaum
+261
+260
+0
+from August 11, 2010,
+Deborah Wilkens
+263
+261
+1
+Bernhard Reutersberg
+until June 30, 2016
+801
+1,524
+-47
+Ewald Woste
+237
+234
+1
+from June 1, 2015,
+185
+until March 31, 2013
+Klaus-Dieter Maubach
+from May 13, 2010,
+from April 1, 2016,
+Andreas Schmitz
+333
+334
+0
+until July 31, 2021
+1,411
+3,218
+-56
+Rolf Martin Schmitz
+since June 1, 2018
+148
+2
+Former Management Board
+members
+Fred Schulz
+285
+293
+-3
+Karen de Segundo
+289
+288
+0
+145
+Albert Zettl
+0
+218
+Bernhard Reutersberg until June 30, 2016
+Klaus-Dieter Maubach until March 31, 2013
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+The following tables present the compensation awarded and due in the 2021 financial year to each individual former Management Board
+member of E.ON who left the Management Board within the last ten years pursuant to Section 162 AktG:
+6. Individualized Disclosure of the Compensation of Former Management Board Members
+→ III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+Compensation Report 131
+Back
+↑
+Search
+Contents
+24
+246
+250
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+Michael Sen until March 31, 2017
+V. Comparative Presentation of the Development
+of Compensation and Earnings
+in €k
+in €k
+0
+65
+523
+100
+185
+0
+0
+0
+100
+557
+35
+278
+0
+Compensation awarded and due pursuant to Section 162 AktG
+Pension and transitional payments
+Others
+Share Matching Plan, 5th Tranche (2017-2021)
+Multi-year variable compensation
+in %
+in €k
+in %
+in %
+In accordance with the requirements of Section 162, Paragraph 1,
+Sentence 2, Number 2 AktG, the following table shows the develop-
+ment of compensation for current and former members of the
+Management Board, Supervisory Board members, and employees
+compared with the Company's earnings development. The presen-
+tation of the annual changes will be added in the reporting years
+ahead and will cover the full five-year period for the first time in the
+2025 Compensation Report.
+For the development of Management Board and Supervisory Board
+compensation, compensation awarded and due for the 2020 and
+2021 financial years will be taken into account in accordance with
+Section 162 AktG.
+For the average employee compensation, the compensation of
+employees in Germany is considered - analogously to the vertical
+comparison review. For the development of average employee
+compensation, the regular target compensation as of the end of
+the financial year is taken into account, which was extrapolated
+to a 100% employment level in each case. In fiscal year 2021,
+34,409 (2020: 35,526) employees are included in the average.
+in €k
+in %
+Active Management Board
+members
+Christoph Schmitz
+since February 1, 2020; Vice
+Chairman since May 28, 2020
+332
+258
+29
+since July 1, 2013;
+Carolina Dybeck Happe
+147
+259
+-43
+Leonhard Birnbaum
+Thomas König
+Patrick Lammers
+Chairman since April 1, 2021
+5,169
+4,862
+6
+Klaus Fröhlich
+in €k
+Supervisory Board
+Change
+2021/2020
+2020
+In addition to E.ON SE's net income pursuant to the German Com-
+mercial Code ("HGB"), EPS based on adjusted net income is used to
+present earnings development.
+Compensation Report 134
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board
+→ IV. Supervisory Board Compensation in the 2021 Financial Year
+Compensation Report 135
+→ III. Compensation of the Management Board in the 2021 Financial Year
+219
+→ V. Comparative Presentation of the Development of Compensation and Earnings
+Comparative Presentation
+Membership in
+Management Board/
+Supervisory Board
+2021
+2020
+Change
+2021/2020
+in €k
+in €k
+in %
+Membership in
+Management Board/
+2021
+Comparative Presentation
+246
+250
+-2
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+Committee, which took place in July 2021. The committee consists
+of two Management Board members as well as Senior Vice Presidents
+from several departments, including Investor Relations, Sustainabil-
+ity & HSE, and Finance. Lastly, the results were sent to the Sustain-
+ability Council and were confirmed by its members in October 2021.
+The materiality analysis identified good corporate governance and
+the following non-financial issues as material for E.ON.
+E.ON's Material Issues Subsumed under the Five Mandatory Aspects
+Environmental matters
+Employee matters
+•
+•
+.
+Climate protection
+Sustainable customer solutions
+Occupational health and safety
+Working conditions and employee development
+Diversity and inclusion
+Social matters
+•
+Security of supply
+Human rights
+Anti-corruption
+•
+Customer orientation
+Human rights and supplier management
+Compliance and anti-corruption
+Following the section on EU-Taxonomy, E.ON's approach to each
+issue and its progress in 2021 are explained. E.ON takes a compre-
+hensive approach to occupational health and safety (Aspect 2:
+employee matters) and environmental management, which is
+explained below. The description of all approaches is guided by the
+Global Reporting Initiative's Sustainability Reporting Standards
+("GRI SRS"), in particular GRI 103: Management Approach 2016.
+Separate Combined Non-Financial Report 140
+E.ON's management of non-financial risks has been aligned with
+the five mandatory aspects of the German CSR Directive Imple-
+mentation Act since 2018. In 2021 E.ON focused in particular on
+human rights and environmental and climate matters in order to
+prepare to comply with possible new regulatory requirements in
+these areas. The climate risk assessment was organizationally inte-
+grated into the Group's enterprise risk management ("ERM") system
+in October 2020 and human rights risk in the supply chain followed
+in January 2021. It has become a standard ERM process from
+2021 onward. Based on this, the content of the climate risk assess-
+ment as part of the ERM will be further developed. In addition, the
+assessment of non-financial risks is gradually being integrated into
+the general risk management process. The process and findings of
+the non-financial risk analysis for 2021 were presented to, and
+approved by, the E.ON Group Risk Committee. Based on the analysis
+of possibly reportable risks in conjunction with non-financial aspects
+and after considering risk-mitigation measures and thus only net
+risks, E.ON identified no material risks within the meaning of Sec-
+tion 289c (3), Paragraph 1, Items 3 and 4 of the German Commercial
+Code ("HGB") associated with the Group's business activities and
+business relationships or its products and services that are very
+likely to have or will have serious negative effects on the aforemen-
+tioned aspects. More information about E.ON's financial risks and
+chances can be found in the Risk and Chances Report in the Com-
+bined Group Management Report for the 2021 financial year.
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+Business Model
+→ Aspect 1: Environmental Matters
+Separate Combined Non-Financial Report 139
+→ Sustainability Ratings and Rankings
+→ General Information on Sustainability at E.ON → Annual Sustainability Report
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report
+Purpose and Scope
+The
+purpose of this Separate Combined Non-Financial Report is to
+comply with the reporting requirements of the German CSR Direc-
+tive Implementation Act (Section 315b, 315c in conjunction with
+Sections 289b to 289e of the German Commercial Code, or "HGB").
+It applies to both the E.ON Group and E.ON SE (hereinafter: "E.ON").
+In addition to general information, the report contains information
+on the Act's five mandatory aspects: the environment, employees,
+social matter, human rights, and anti-corruption. This information
+is for the reporting period January 1 to December 31, 2021. The
+report encompasses all subsidiaries that are fully consolidated in
+E.ON's Consolidated Financial Statements. Any deviations from this
+are indicated.
+E.ON used the period through year-end 2021-while continuing to
+integrate innogy-to sharpen the Company's focus. Furthermore,
+exogenous factors were analyzed and their impact on strategic
+development was determined. As a result of this strategic review,
+the Company set three clear priorities on which it will focus human
+and financial resources in the years ahead: growth, sustainability,
+and digitalization. The strategic review also reaffirmed key sustain-
+ability issues for E.ON's business and its role in society: climate
+protection, health and safety, diversity and inclusion, and good cor-
+porate governance.
+The Group policies mentioned in this non-financial report issue
+instructions, set minimum standards, assign responsibilities, and
+define management tools for the various non-financial issues. They
+are reviewed on an ongoing basis. Group policies are binding for all
+companies in which E.ON holds a majority stake and for projects
+and partnerships for which E.ON has operational responsibility.
+Contractors and suppliers are also required to meet E.ON's minimum
+standards.
+The business operations at the Renewables segment that E.ON
+transferred to RWE are included in E.ON's key performance indica-
+tors ("KPIs") until late September 2019. A separate innogy segment,
+consisting mainly of network and sales businesses, became part
+of the E.ON Group on September 18, 2019. As a rule, KPIs include
+both entities from 2019 on. Any exceptions due to time frames,
+availability of data, internal collating and reporting processes are
+clearly indicated.
+Business Model
+In line with the new strategic direction, E.ON also wants to manage
+its two core businesses, Energy Networks and Customer Solutions,
+so that they help Europe decarbonize. Detailed information about
+E.ON's business model can be found in the Combined Group Man-
+agement Report.
+General Information on Sustainability at E.ON
+In line with Regulation 2020/852 of the European Parliament and
+of the Council ("EU Taxonomy"), the 2021 financial year is the first
+for which E.ON reports the ratio of its investments, revenues, and
+operating expenses attributable to taxonomy-eligible and taxonomy-
+aligned economic activities. E.ON also describes the process by
+which it implemented the taxonomy's requirements as well as the
+taxonomy alignment of its economic activities. These disclosures
+are in the section below entitled "EU Taxonomy."
+E.ON strives to always do business responsibly and therefore moni-
+tors all material impacts of its business operations. E.ON considers
+not only financial aspects but also environmental, social, and gover-
+nance ("ESG") issues along its value chain. The systematic consider-
+ation of non-financial issues enables E.ON to identify opportunities
+and risks for its business development early. In addition to investors'
+expectations, E.ON takes into account the expectations of other key
+stakeholders like customers and employees.
+In 2021 E.ON's materiality assessment consisted of a three-step
+process to determine which non-financial issues are essential for
+understanding E.ON's business performance, financial results, and
+situation and to evaluate the impact of its business operations. The
+first step, which was part of the strategic review E.ON conducted
+in 2021, consisted of a workshop to assess the importance of E.ON'S
+sustainability focus areas for different stakeholder groups. The work-
+shop's findings were discussed with the Management Board. Second,
+E.ON analyzed its stakeholders' expectations using ESG KPIs. The
+KPIs were selected on the basis of interviews and questionnaires
+with investors and analysts, a benchmark of peer companies, and
+the screening of the criteria of relevant ESG standards and ratings.
+E.ON then prioritized the KPIs by analyzing the degree to which
+they support its sustainability narrative, their impact on its business,
+and their consistency with its targets. This yielded a short list of
+KPIs that helped E.ON evaluate which issues were material in 2021.
+In the third and final step, representatives from Controlling & Risk,
+Group Accounting, Investor Relations, Group Finance, Sustainability
+& Health, Safety, and Environment ("HSE"), and HR discussed the
+findings of the first two steps. The participants agreed to propose
+several changes to E.ON's materiality matrix from 2020. The culmi-
+nation of step three was for the matrix to be approved by the Steering
+E.ON Annual Report 2021
+Contents
+Search
+Back
+→ Purpose and Scope
+E.ON's sustainability efforts are guided by internationally recog-
+nized standards, which provide orientation and help ensure that
+E.ON considers all essential aspects of responsible corporate gover-
+nance. E.ON is a United Nations Global Compact ("UNGC") partici-
+pant and has been committed to the ten principles since 2005. Its
+sustainability activities also support the achievement of the United
+Nations' Sustainable Development Goals ("SDGs"). In particular,
+E.ON helps provide access to affordable, reliable, sustainable, and
+clean energy, supports cities and communities in becoming sus-
+tainable, and helps protect the earth's climate.
+Annual Sustainability Report
+0
+0
+61
+100
+233
+11
+48
+100
+0
+1,808
+89
+0
+61
+100
+2,041
+100
+48
+100
+Furthermore, the total compensation awarded and due to 15 further members of the Management Board, who left the company more than
+ten years ago, amounted to €6.6 million in financial year 2021.
+E.ON Annual Report 2021
+Contents
+0
+0
+0
+0
+E.ON has published a Sustainability Report annually since 2004.
+The report, which has been based on GRI standards since 2005,
+serves as E.ON's annual Communication on Progress to the UNGC.
+It describes the issues that are material to E.ON's stakeholders and
+to E.ON as a company as well as how these issues are addressed.
+It also reports on topics not included in this Combined Non-Financial
+Report for reasons of materiality and contains information about
+E.ON's sustainability strategy and organization.
+Sustainability Ratings and Rankings
+E.ON's commitment to transparency includes subjecting its sus-
+tainability performance to independent, detailed assessments by
+specialized agencies and capital-market analysts. The findings of
+these assessments provide important guidance to investors. They
+also help E.ON identify its strengths and weaknesses and further
+improve its performance. Numerous sustainability ratings and
+rankings have for years given E.ON high marks. The Sustainability
+Channel on www.eon.com presents the most relevant and the
+most recent results.
+E.ON Annual Report 2021
+100
+557
+100
+Compensation awarded and due in the financial year pursuant to Section 162 AktG
+Regine Stachelhaus until June 30, 2013
+Johnannes Teyssen until March 31, 2021
+→ EU Taxonomy
+in €k
+in €k
+in %
+Mike Winkel until May 31, 2015
+in €k
+in %
+Multi-year variable compensation
+Share Matching Plan, 5th Tranche (2017-2021)
+Others
+Pension and transitional payments
+Compensation for non-compete clause
+Compensation awarded and due pursuant to Section 162 AktG
+in %
+→ Purpose and Scope
+Back
+Search
+0
+E.ON SE net income pursuant to
+6,610
+6,540
+1
+the German Commercial Code
+in € million
+2,006
+2,114
+-5
+E.ON Group EPS on the basis
+452
+333
+455
+337
+-1
+of adjusted net income, in €
+0.96
+0.63
+52
+-1
+¹The figure for 2021 includes compensation components from the active Management Board membership and benefits after the departure from the Management Board on March 31, 2021.
+E.ON Annual Report 2021
+48
+48
+until May 31, 2015
+Erich Clementi
+Michael Sen
+until March 31, 2017
+557
+253
+120
+Employees
+from June 24, 2010,
+Regine Stachelhaus
+until June 30, 2013
+61
+Contents
+60
+Average
+74
+72
+2
+from April 1, 2013,
+Earnings development
+Mike Winkel
+Further former members
+Active Supervisory Board
+members
+Karl-Ludwig Kley
+2
+↑
+Search
+Back
+139
+General Information on Sustainability at E.ON
+140
+Annual Sustainability Report
+140
+Sustainability Ratings and Rankings
+141
+EU Taxonomy
+148
+Aspect 1: Environmental Matters
+150
+Aspect 2: Employee Matters
+156
+Aspect 3: Social Matters
+159
+Aspect 4: Human Rights
+161
+Aspect 5: Anti-Corruption
+138
+E.ON Annual Report 2021
+Contents
+Business Model
+139
+Purpose and Scope
+139
+→ I. Introduction → II. Letter from the Chairman of the Supervisory Board → III. Compensation of the Management Board in the 2021 Financial Year
+→ IV. Supervisory Board Compensation in the 2021 Financial Year → V. Comparative Presentation of the Development of Compensation and Earnings
+This Compensation Report was prepared jointly by the Management Board and Supervisory Board in accordance with all requirements of the
+Section 162 AktG.
+For the E.ON SE Supervisory Board:
+4.1. m
+Signed Karl-Ludwig Kley
+Chairman of the E.ON SE Supervisory Board
+For the E.ON SE Management Board:
+вы
+Signed Leonhard Birnbaum
+Chairman of the E.ON SE Management Board
+↑
+Compensation Report 136
+|||
+Contents
+Q Search ← Back
+137
+HyFlex
+Separate Combined
+Non-Financial Report
+E.ON Annual Report 2021
+|||
+Contents Q Search ← Back
+Separate Combined Non-Financial Report
+E.ON Annual Report 2021
+0
+24
+630
+EU taxonomy ratios
+Taxonomy-eligible revenues
+EU Taxonomy Revenues
+The Customer Solutions segment generated the lion's share of E.ON's external revenues in the 2021 financial year. However, revenues from
+the sale of electricity and gas to end-customers are not covered by the taxonomy. As expected, therefore, only 18 percent of external reve-
+nues were taxonomy-eligible (82 percent were outside the scope of the taxonomy). About 9 percent of Customer Solutions' revenues were
+taxonomy-eligible; 67 percent of Energy Networks' were.
+Revenues
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 147
+→ Purpose and Scope
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+Back
+↑
+Search
+Contents
+Q1-Q4 2021
+E.ON Annual Report 2021
+98
+60
+61
+1,111
+435
+676
+15
+661
+0
+0
+97
+97
+0
+Similar to investments, most aligned expenses (€606 million)
+resulted from maintenance activities in connection with electricity
+networks. Smaller amounts were attributable to gas distribution
+networks (mainly the prevention of methane gas leaks) and the
+business with distributed electricity and/or heat generation plants.
+€ in millions
+Taxonomy-
+aligned
+Not taxono-
+0
+Corporate Functions/Other
+98
+9
+9
+55,642
+50,524
+5,118
+120
+4,998
+Customer Solutions
+99
+66
+67
+13,045
+4,361
+8,684
+68
+8,616
+Energy Networks
+% taxonomy-
+aligned
+(of eligible)
+(of total)
+(of total)
+Total
+% taxonomy-
+aligned
+% taxonomy-
+eligible
+Not taxono-
+my-eligible
+Total
+my-aligned
+0
+0
+0
+65
+0
+Energy Networks
+(of eligible)
+(of total)
+(of total)
+Total
+% taxonomy-
+aligned
+% taxonomy-
+aligned
+% taxonomy-
+eligible
+Not taxono-
+my-eligible
+Total
+my-aligned
+aligned
+630
+Not taxono-
+€ in millions
+EU taxonomy ratios
+Taxonomy-eligible operating expenses
+EU Taxonomy Operating Expenses
+E.ON recorded operating expenses pursuant to the EU taxonomy of about €1.1 billion in the 2021 financial year. Of these expenses, €676 million
+(61 percent) were in the scope of the taxonomy and €435 million did not meet the criteria (39 percent). Of the taxonomy-eligible activities,
+98 per cent were taxonomy-aligned.
+Operating Expenses
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ Purpose and Scope
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+Separate Combined Non-Financial Report 146
+Back
+↑
+Search
+Taxonomy-
+199
+829
+76
+67
+1,014
+338
+676
+15
+661
+E.ON Group
+Non-Core Business
+core business
+E.ON Group from
+0
+0
+39
+39
+0
+0
+0
+Corporate Functions/Other
+67
+21
+32
+146
+100
+46
+15
+31
+Customer Solutions
+100
+76
+98
+Contents
+0
+8,364
+E.ON monitors progress toward its climate targets. It is important
+to remember that year-on-year comparisons of energy consumption
+can be affected by temporary fluctuations caused by weather
+patterns and other factors. A period of several years is necessary to
+determine whether the action E.ON is taking is effective and where
+E.ON stands with regard to its targets. E.ON therefore assesses the
+trend every three years. The first assessment was at year-end 2019.
+The trend (in absolute terms and with regard to E.ON's carbon
+intensity target) indicated that so far the reduction rate is in line with
+the forecasts. E.ON refined this process in 2021 by adopting a carbon
+management approach (see below) that takes effect in 2022 and
+consists of annual checks by its units to ensure that E.ON is on track
+to achieve its ambitions.
+targets is presented first to the Sustainability Council, which met
+three times in 2021. TThe Chief Sustainability Officer, who chairs the
+council, reports to the E.ON Management Board on a regular basis.
+In addition, E.ON's 2021 Annual Shareholders Meeting approved a
+new compensation system for the Management Board. Under the
+system, one quarter of board members' long-term incentive will
+reflect the degree to which the Company achieves its sustainability
+targets. The purpose is to further embed ESG aspects-including
+reducing Scope 1 and 2 carbon emissions-into how E.ON runs its
+business.
+2030 and by 100 percent by 2050 (both relative to 2019. To meet
+these targets, E.ON has defined measures to reduce emissions in all
+three scopes of the GHG Protocol. E.ON intends to reduce its direct
+emissions (Scope 1) by updating and optimizing its gas networks
+and heat generation business and its indirect emissions (Scope 2)
+by conserving energy and by reducing network losses in its power
+network business. E.ON's Scope 3 emissions, which occur primarily
+during the generation of the power the Company purchases and
+resells and during the use of the gas it sells, account for most of
+E.ON's carbon footprint. E.ON's main objective for them is to
+increase the proportion of green energy it provides to its customers.
+Information about the progress E.ON makes toward its climate
+In 2020 the E.ON Management Board set new climate targets. By
+reducing its GHG emissions, E.ON intends to become climate-neutral
+by 2040. E.ON plans to reduce its Scope 1 and 2 emissions by
+75 percent by 2030 and by 100 percent by 2040 (both relative to
+2019). E.ON aims to reduce its Scope 3 emissions by 50 percent by
+Climate Targets
+E.ON's direct and indirect CO2e emissions totaled 109.82 million
+metric tons in 2021, of which 3 percent were direct Scope 1 emissions,
+and 97 percent were indirect Scope 2 and 3 emissions. Scope 1
+emissions decreased by 5 percent year on year, indirect emissions
+by about 7 percent.
+10Scope 3 emissions from purchased power and the combustion of natural gas sold to end-users (energy sold to E.ON's residential and B2B customers), according to the GHG Scope 3 protocol. The emissions
+from network losses from energy sold to sales partners and the wholesale market are accounted for under E.ON's Scope 1 and Scope 2 emissions accordingly.
+11Prior-year figures were adjusted. Electricity and heat generation was adjusted mainly due to the addition of missing data on natural gas used for energy generation at E.ON Energy Projects GmbH in the prior-year.
+⁹The external GWP sources used include the IEA, the IPCC AR5 report, Department for BEIS (formerly DEFRA), Naturvårdsverkets, the GHG Protocol, and the Överenskommelse Värmemarknadskommittén
+2021. Furthermore, primary data from external travel service providers were used for the calculation.
+8First-time reporting of market-based Scope 2 emissions in 2020.
+'The external GWP sources used are the IEA and the Association of Issuing Bodies ("AIB").
+6Excludes E.ON's consumption of district heating due to the immateriality of the quantity compared with the other Scope 2 categories.
+5The external GWP source used is the International Energy Agency ("IEA").
+²From 2019 onward, emissions from power and heat generation are divided into emissions from plants owned and operated by E.ON (Scope 1) and emissions from plants leased to, and operated by, customers
+(Scope 3). This improves E.ON's ability to manage its emissions and make progress toward its targets more transparent.
+³Prior-year figures were adjusted. Electricity and heat generation was adjusted mainly due to the addition of missing data on natural gas used for energy generation at E.ON Energy Projects GmbH in the prior
+year. The figure for internal fuels was adjusted mainly due to double counting of natural gas consumption in buildings and in operations at Energy Networks in Romania.
+4Prior-year figures were adjusted due to corrections of biogenic emissions.
+In October 2021 E.ON adopted an ESG Reporting Manual that took
+effect in December 2021. The manual's detailed descriptions and
+requirements instruct the units how to compile and report ESG KPIs.
+E.ON subsequently used the manual's climate-related KPIs to
+develop a Group-wide carbon management plan. Its purpose is to
+apportion progress toward these targets to E.ON's business units,
+factoring in the units' individual characteristics, their strategic
+ambitions, and the climate policies of the country or countries where
+¹The external global warming potential ("GWP") sources used are the Department for Business, Energy & Industrial Strategy ("BEIS", formerly DEFRA), Naturvårdsverkets, the GHG Protocol, the Överenskommelse
+Värmemarknadskommittén 2021, and the IPCC AR5 report.
+Total (location-based)
+120.27
+129.08
+116.37
+117.98
+109.82
+107.9611
+100.38
+107.99
+6.09
+5.73
+4.82
+4.49
+3.90
+Scope 2: Indirect emissions associated with E.ON's electricity and heat consumption (location-based) 5, 6
+Scope 2: Indirect emissions associated with E.ON's electricity and heat consumption (market-based) 6, 7, 8
+Scope 3: Indirect emissions from all other business operations ², 9, 10
+3.984
+Total (market-based)
+E.ON Annual Report 2021
+Contents
+Search
+E.ON Annual Report 2021
+E.ON is making continuous progress toward establishing a caring
+culture. This encompasses ensuring employees' safety in the work-
+place, promoting their health, and also supporting their mental
+well-being. Some employees perform potentially risky tasks, such
+as working on power grids, gas pipelines, and other industrial facili-
+ties. Strict safety standards are therefore of particular importance
+to E.ON. First and foremost, accidents endanger employees' health.
+But accidents may also damage property, cause work stoppages,
+Occupational Health and Safety
+Aspect 2: Employee Matters
+More detailed information on E.ON's TCFD reporting can be found
+in the "Climate protection" chapter of the 2021 Sustainability
+Report and in a supplementary document "On course for net zero:
+supporting paper for E.ON's decarbonization strategy and climate-
+related disclosures 2021," which is available on E.ON's corporate
+website. Furthermore, additional information is published in E.ON's
+CDP climate disclosure. CDP is one of the largest international
+associations of investors that independently assess the transparency
+and detail of companies' climate reporting.
+E.ON's current climate metrics consist mainly of the emission
+figures for its carbon footprint categories (Scope 1, 2, and 3) and
+the measurement of progress toward its climate targets (see
+above). For all GHG categories relevant for E.ON, E.ON monitors
+progress toward these targets on an annual basis. The afore-
+mentioned carbon management plan apportions E.ON's emission-
+reduction targets to its business units, while giving them the
+operational decision-making authority on how to achieve them.
+Metrics and Targets
+•
+E.ON regularly monitors and assesses its sustainability, climate,
+and other non-financial risks and opportunities and their poten-
+tial impact in the short, medium, and long term. In 2020 E.ON
+integrated climate-related risks into its ERM system. In 2021
+human rights risks in the supply chain, employee matters, social
+matters, and anti-corruption were integrated as well.
+Risk Management
+E.ON's business operations promote sustainability: its current
+climate agenda includes emission-reduction targets for 2030,
+2040, and 2050. In late November 2021 E.ON announced an
+updated strategy whose foremost objective is to develop E.ON
+into the leading platform for a zero-carbon Europe. The strategy
+sets three clear priorities on which E.ON will focus its human and
+financial resources in the years ahead: growth, sustainability, and
+digitalization. E.ON also announced that it will invest €27 billion
+in the energy transition through 2026.
+Strategy
+The importance of climate change for E.ON is reflected in the
+Company's governance. The Management Board has overall
+responsibility for E.ON's sustainability strategy, including its
+climate targets. The Supervisory Board is regularly informed
+about E.ON's sustainability performance by its Audit and Risk
+Committee, by its Innovation, and Sustainability Committee and
+by the Management Board.
+Governance
+•
+•
+that E.ON has developed a qualitative scenario analysis to assess how
+its businesses might be affected under different climate scenarios.
+E.ON is committed to operating sustainably and has in place the
+necessary governance structure to do so. This includes making
+steady progress toward its climate targets, effectively managing its
+climate-related risks, seizing climate-related opportunities that fit
+with its corporate strategy, and reporting transparently on all these
+matters. The recommendations of the Task Force on Climate-related
+Financial Disclosures ("TCFD") provide important guidance for
+E.ON's reporting. Established in 2015, the TCFD aims to develop
+consistent, comparable, and accurate climate-related financial risk
+disclosures that companies can use to provide information to inves-
+tors, lenders, insurers, and other stakeholders. E.ON became an
+official TCFD supporter in 2019, which marks the start of its TCFD
+reporting below. Going forward, the Company will continue to
+expand its TCFD reporting. One consequence of TCFD reporting is
+TCFD Reporting
+In 2021 E.ON joined Science Based Target initiative's ("SBTi") "Busi-
+ness Ambition for 1.5°C" and committed to set science-based
+emissions-reduction targets that are consistent with limiting global
+warming to 1.5°C above pre-industrial levels. E.ON also joined the
+"Race to Zero," a global campaign to accelerate progress toward a
+decarbonized economy.
+they operate. The plan reflects E.ON's general management
+approach: Corporate Functions sets the Group's strategic course
+and its governance framework, while the units have broad opera-
+tional decision-making authority. The carbon management plan
+took effect in the first quarter of 2022.
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+→ General Information on Sustainability at E.ON
+Separate Combined Non-Financial Report 150
+Back
+3.923
+8,364
+3.71
+2020
+99
+18
+18
+77,358
+0
+0
+307
+307
+63,556
+13,802
+188
+13,614
+E.ON Group
+0
+Almost all taxonomy-eligible revenues were taxonomy-aligned, of
+which the lion's share-€12.9 billion-was attributable to fees for
+the transmission of electricity in E.ON's distribution networks. E.ON
+reports €8.5 billion as external revenues in the Energy Networks
+segment. In the Customer Solutions segment, €4.4 billion came
+from revenues in connection with network fees if they were attrib-
+utable to E.ON's own electricity distribution network. Another
+€0.5 billion were taxonomy-aligned revenues relating to the energy
+efficiency of buildings and renewable energy technologies, such as
+the installation, maintenance, and repair of photovoltaic systems,
+heat pumps, and solar-powered warm-water-production facilities.
+0
+Non-Core Business
+99
+18
+18
+77,051
+63,249
+13,802
+188
+13,614
+core business
+E.ON Group from
+0
+0
+0
+E.ON Annual Report 2021
+Contents
+Search
+2021
+Scope 1: Direct emissions from E.ON's own business operations 1, 2
+Total CO2 equivalents in million metric tons
+CO₂e Emissions
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+Separate Combined Non-Financial Report 149
+Back
+Search
+Contents
+E.ON Annual Report 2021
+To calculate emissions when primary data are unavailable or of
+insufficient quality, the GHG Protocol recommends the use of sec-
+ondary data, such as industry-average data or government statistics.
+Since spinning off its large-scale fossil-fueled power generation
+business in 2016, E.ON has procured its power mainly from whole-
+sale markets where the source of generation is often not traceable
+or information about the source is not reliable. E.ON therefore uses
+the official national emission factors of the countries in which it
+purchases power sold to end-customers.
+The activities of E.ON's core businesses-which include operating
+networks that transmit increasingly clean energy, expanding
+eMobility charging infrastructure, and providing smart, low-carbon
+solutions for homes-reflect key emerging energy trends and help
+reduce carbon emissions, which has a positive impact on the earth's
+climate. But E.ON also wants to shrink its own carbon footprint.
+E.ON measures the annual carbon emissions from its distributed
+power and heat generation and from its business activities that are
+not directly related to power generation. It discloses these figures
+in its sustainability reporting. E.ON factors in both upstream and
+downstream emissions. It calculates emissions using the globally
+recognized WRI/WBCSD Greenhouse Gas Protocol Corporate
+Accounting and Reporting Standard ("GHG Protocol"). The GHG
+Protocol defines three scopes for GHG accounting and reporting.
+This improves transparency and provides guidance for different
+types of climate policies and business goals.
+Distribution networks like E.ON's are the backbone of the energy
+transition. They facilitate low-carbon power generation and the
+deployment of innovative, efficient energy solutions. Wind farms,
+solar arrays, battery-storage systems, and other climate-friendly
+technologies are connected to E.ON's distribution grids. Going
+forward, smart grids will serve as the platform for the innovative
+technologies and business models that are essential to the energy
+transition's success.
+The Chief Operating Officer-Commercial, who is a member of the
+E.ON Management Board, has overall responsibility for E.ON's cus-
+tomer-oriented businesses that comprises the Customer Solutions
+segment, including solutions that enable customers to create social,
+environmental, and financial value. E.ON Energy Infrastructure
+Solutions ("EIS") and Business-to-Customer ("B2C") operate through
+a number of E.ON entities, with the regional units having respon-
+sibility for a variety of topics-such as product development, asset
+operations, and sustainability management-for their respective
+market (these include Western, Central, and Eastern Europe; the
+United Kingdom; and Scandinavia).
+cooling. E.ON's portfolio also includes integrated solutions for cities,
+municipalities, and real-estate companies that encompass elements
+like efficient heating and cooling, low-carbon generation, and smart
+energy management. In addition, E.ON offers eMobility solutions such
+as electric-vehicle charging systems for homes and businesses as
+well as public charging infrastructure for cities that help make trans-
+port less dependent on fossil fuels and thus less carbon-intensive.
+GHG emissions can be reduced not only by low-carbon generation
+technologies but also by energy efficiency, conservation, and recov-
+ery. E.ON has a broad portfolio of such solutions that it markets to
+residential, industrial, commercial, and public-sector customers.
+The Company continually adjusts this portfolio to better meet cus-
+tomers' needs, respond to market changes, and utilize emerging
+technologies. Offerings include easy-to-use apps that help residential
+customers better understand their energy consumption and reduce
+it. E.ON also designs and installs individually tailored embedded
+generation solutions that provide industrial and commercial custom-
+ers with their own supply of low-carbon electricity, heating, and
+Climate change and the environmental damage caused by it are
+serious and affect nature and humans. The use of fossil fuels is
+accompanied by greenhouse gas ("GHG") emissions. Renewable
+and low-carbon power generation and the efficient use of energy
+therefore play key roles in reducing emissions and limiting global
+warming. This applies to the heat and mobility sectors as well. The
+transition to a low-carbon economy will require the concerted
+efforts of everyone who makes or consumes energy. It poses chal-
+lenges for E.ON's competitiveness, but also creates opportunities to
+grow the business. Many countries, communities, and companies
+have already embraced climate-friendly energy production and
+energy efficiency to achieve their carbon-reduction targets. E.ON's
+strategic focus on energy-efficient customer solutions and reliable
+smart grids is fully in line with these global trends.
+Climate Protection
+Aspect 1: Environmental Matters
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+Separate Combined Non-Financial Report 148
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+Back
+2019
+E.ON Annual Report 2021
+Q1-Q4 2021
+The Energy Networks segment made a significant contribution.
+About 89 percent of its investments were taxonomy-eligible; of
+these, nearly all were taxonomy-aligned. At roughly €2.7 billion, the
+largest contribution came from E.ON's electricity distribution net-
+works, which are part of the European interconnected system. They
+continually integrate renewable generating facilities, thereby pro-
+pelling the energy transition in Europe and connecting customers to
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 143
+Back
+Search
+Contents
+E.ON Annual Report 2021
+Construction, extension, and operation of wastewater
+collection and treatment systems
+Construction, extension, and operation of water collection,
+treatment, and supply systems
+5.3
+→ Aspect 3: Social Matters
+4.24 Production of heat/cool from bioenergy
+5.1
+4.15 District heating/cooling distribution
+4.14 Transmission and distribution networks for renewable and
+low-carbon gases
+Transmission and distribution of electricity
+4.9
+Electricity generation from geothermal energy
+4.6
+Electricity generation from hydropower
+4.5
+Electricity generation using solar photovoltaic technology
+Electricity generation from wind power
+4.3
+4.1
+The assessment included in a review of all activities relevant for
+E.ON to determine whether they make a substantial contribution to
+climate change mitigation and meet the criteria contained in Article
+3 of the EU taxonomy. The review identified the following economic
+activities as taxonomy-aligned:
+Assessment of minimum safeguards: E.ON adopted a Group-
+wide approach to ensuring compliance with the minimum safe-
+guards.
+4.20 Cogeneration of heat/cool and power from bioenergy
+4.23 Production of heat/cool from renewable non-fossil gaseous
+and liquid fuels
+5.4
+Renewal of waste water collection and treatment
+6.13 Infrastructure for personal mobility, cycle logistics
+6.15 Infrastructure enabling low-carbon road transport and public
+transport
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+There are general criteria for environmental objective 4, "the transi-
+tion to circular economy," such as long durability, easy disassembly,
+and reparability. Most of the components are designed for a very
+long lifespan, are recyclable, and still have economic value at the
+end of their useful life (such as steel, aluminum, and copper). Such
+components of assets can be recycled within the E.ON Group or
+sold to third parties for further use.
+The criteria for the EU's environmental objective 3, "the sustainable
+use and protection of water and marine resources," mainly refer to
+legal and regulatory requirements in the energy sector. Compliance
+with these requirements is a prerequisite for obtaining construction
+and operating permits. The same applies in principle to the criteria
+for the EU's environmental objective 5, "pollution prevention and
+control."
+Protecting assets against the physical impacts of climate change
+("climate change adaptation") is economically relevant for E.ON and
+is therefore factored into investment decisions. Furthermore, in
+accordance with TCFD recommendations, E.ON's risk management
+addresses climate-related risks and opportunities. Discussions with
+relevant departments verify this basic approach to identifying any
+significant potential to harm climate change adaptation.
+sustainable energy. This trend is supported by the digitalization of
+E.ON's networks through the expansion of fiber-optics and broad-
+band technology (€0.3 billion). Investments of €0.4 billion in E.ON's
+gas networks were likewise taxonomy-aligned. In Germany in par-
+ticular, these investments served to build and expand the infrastruc-
+ture for hydrogen or enable the blending of hydrogen into E.ON's
+existing gas networks.
+Investments in the development of broadband data infrastructure
+are classified as taxonomy-aligned, because the data and analyses
+provided by them lead directly to the reduction of GHG emissions.
+E.ON operates a large number of CHP and heat generation plants.
+There are different sets of criteria depending on a plant's energy
+source. Some E.ON plants meet these criteria. Plants fueled solely
+by natural gas are not classified as taxonomy-aligned.
+In the case of gas networks, in particular investments in existing
+infrastructure that increase the possibility of blending hydrogen
+and other low-carbon gases were classified as taxonomy-aligned.
+Pilot projects to establish dedicated hydrogen infrastructure were
+as well. So too were investments and operating expenses related
+to the detection and/or prevention of methane leaks.
+In addition, E.ON operates water supply systems, the majority of
+which make a substantial contribution to climate change mitigation
+because they meet the energy-efficiency criterion (less than 0.5 kWh
+per cubic meter of water) and/or the leakage threshold of 1.5. For
+water supply systems that do not meet these criteria, investments
+made in the financial year to improve their energy efficiency and/or
+leakage rate by at least 20 percent are classified as taxonomy-aligned
+investments. These water supply systems revenues are classified
+as taxonomy-aligned if the investments enabled them to meet the
+aforementioned criteria for taxonomy-aligned water supply systems.
+E.ON operates a large number of heating networks. This activity
+is in principle taxonomy-eligible. Some of these heating networks
+are "efficient" within the meaning of the taxonomy's criteria. This
+means that they transmit at least 50 percent renewable heat, at least
+50 percent waste heat, at least 75 percent CHP heat, or at least
+50 percent of a combination of these energy sources. Such heating
+networks thus make a substantial contribution to climate protection.
+E.ON's electricity networks make a substantial contribution to cli-
+mate change mitigation within the meaning of the taxonomy, since
+they are downstream distribution networks and thus part of the
+European interconnected system.
+By definition, electricity generation from wind and solar as well as
+run-of-river hydropower plants makes a substantial contribution
+to climate change mitigation within the meaning of the taxonomy.
+No other criteria for the assessment of their substantial contribution
+to climate protection need to be assessed. The same applies to the
+construction of eMobility infrastructure and the installation of
+devices such as solar panels, smart meters, and electric-vehicle
+charging stations in buildings.
+Substantial Contribution to Climate Change Mitigation
+For the year 2021 E.ON did not identify any economic activities
+that make a substantial contribution to environmental objective 2,
+"climate change adaptation."
+Data-driven solutions for GHG emissions reductions
+Installation, maintenance, and repair of renewable energy
+technologies
+Installation, maintenance, and repair of instruments and
+devices for measuring, regulation and controlling energy
+performance of buildings
+Installation, maintenance, and repair of charging stations for
+electric vehicles in buildings (and parking spaces attached to
+buildings)
+8.2
+7.6
+7.5
+7.4
+physical climate risks by means of its Group-wide risk manage-
+ment system. Each business unit in the E.ON Group is required
+to comprehensively assess and record its climate risks as part of
+its risk reporting. This also includes the risks defined in the EU
+taxonomy, such as temperature changes, extreme heat and cold
+events, forest fire and wildfire hazards. Any risks that significantly
+harm climate change adaptation are identified and assessed in
+the risk management process.
+•
+Assessment of do no significant harm ("DNSH"): the DNSH criteria
+mainly refer to legal compliance or, in the case of the "circular
+economy" objective, to fundamental aspects of the economic
+activity. In this regard, it is typically appropriate to assess for
+DNSH compliance at the level of the economic activity. DNSH
+compliance with the EU's environmental objective 2, "climate
+change adaptation," is assessed at the Group level, because, in
+accordance with the recommendations of the Task Force on
+Climate-Related Financial Disclosures ("TCFD"), E.ON assesses
+Assessment of substantial contribution: compliance with the
+TSC is generally tested individually for each economic activity,
+unless the criteria allow compliance to be assessed at the level
+of the entire economic activity, an operating segment, or the
+Group as a whole.
+comply with minimum social safeguard standards (Article 18)
+and
+do no significant harm to any of the other five environmental
+objectives (Article 17)
+•
+•
+•
+contribute substantially to at least one of six environmental
+objectives (Articles 10 to 16)
+•
+Article 3 of the EU taxonomy defines economic activities as envi-
+ronmentally sustainable if they:
+6. The protection and restoration of biodiversity and ecosystems
+5. Pollution prevention and control
+4. The transition to a circular economy
+resources
+3. The sustainable use and protection of water and marine
+2. Climate change adaptation
+1. Climate change mitigation
+The European Commission's action plan on financing sustainable
+growth defined a series of measures to channel capital toward envi-
+ronmentally sustainable activities and thus to help enable the Euro-
+pean Union become climate-neutral by 2050 as foreseen by the
+European Green Deal. The Commission laid the foundation for this in
+Regulation 2020/852, the EU Taxonomy Regulation, which describes
+what is considered an "environmentally sustainable activity" and
+which criteria are used to classify an economic activity as environ-
+mentally sustainable. The aim is to classify economic activities
+EU-wide on the basis of defined requirements with regard to their
+contribution to the six defined environmental objectives (Article 9
+of the EU taxonomy) and thus to support the European Union's
+transformation to a climate and environmentally friendly economy.
+The six objectives are:
+General Principles
+EU Taxonomy
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 141
+→ Aspect 3: Social Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+Back
+↑
+Search
+Contents
+comply with technical screening criteria defined by the
+Commission.
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+Only the first two environmental objectives were to be applied for
+determining a substantial contribution for the 2021 financial year.
+Sets of criteria are available for defining the substantial contribution
+toward achieving the objectives. Known as technical screening cri-
+teria ("TSC"), they specify which economic activities are considered
+taxonomy-aligned. Environmental objectives 3 to 6 will be considered
+for the first time from the 2022 financial year onward.
+Economic activities that contribute to environmental objective 2,
+"climate change adaptation," include or provide solutions that either
+avoid or substantially reduce the risk of the adverse impacts of the
+current and the future climate on the economic activity itself or on
+people, nature, or assets.
+•
+E.ON carries out the alignment assessment as follows:
+E.ON launched a project in 2021 to implement with the taxonomy's
+requirements for the EU environmental objectives 1 "climate change
+mitigation," and 2, "climate change adaptation." E.ON first mapped
+its economic activities to the relevant taxonomy criteria. It then
+conducted interviews and workshops with the relevant contact
+persons and subject experts from the departments of its segments
+and business units and of its key Group companies. The purpose
+of these discussions was to analyze their economic activities and to
+carry out an alignment assessment to determine whether they ful-
+fill the relevant taxonomy criteria. The results of the assessment of
+economic activities deemed to be taxonomy-aligned were docu-
+mented in templates, and evidence was provided if a business unit's
+economic activities fulfill the taxonomy's TSC.
+E.ON has substantially supported the development of the EU taxon-
+omy and is represented by its CFO, Marc Spieker, on the Platform
+on Sustainable Finance, an advisory panel to the Commission.
+Implementation at E.ON
+E.ON's taxonomy-eligible and taxonomy-aligned economic activities
+are conducted predominantly at the Energy Networks and Customer
+Solutions segments. Non-Core Business, which consists mainly of
+PreussenElektra and thus the operation and dismantling of nuclear
+power plants, is currently not covered by the EU taxonomy.
+District-heating distribution.
+Installation, maintenance, and repair of renewable energy
+technologies
+Installation, maintenance, and repair of instruments and devices
+for measuring, regulation, and controlling the energy performance
+of buildings
+Cogeneration of heat/cool and power from bioenergy
+Construction, extension and operation of water collection,
+treatment and supply systems
+• Data-driven solutions for GHG emissions reductions
+• Transmission and distribution networks for renewable and
+low-carbon gases
+Transmission and distribution of electricity
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 142
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+Back
+Search
+Contents
+E.ON Annual Report 2021
+Of the activities relevant to E.ON as a whole, the following activities
+are of particular importance. By conducting them the Group makes
+a substantial contribution to climate change mitigation:
+The EU taxonomy concerns in particular the economic sectors that
+account for more than 90 percent of the EU's GHG emissions.
+Among them is the energy sector, for which there is a large number
+of classified activities. For a variety of economic activities, the Com-
+mission defined taxonomy criteria according to which these activi-
+ties make a substantial contribution to climate change mitigation
+and at the same time do not significantlly harm the achievement of
+the EU's five other environmental objectives.
+The key figures for taxonomy-eligible and -aligned economic activi-
+ties were calculated with reference to the FAQ document published
+by the European Commission, which addresses questions of inter-
+pretation with regard to Article 8 of the EU taxonomy. A separate
+disclosure of data for the categories taxonomy-eligible, enabling
+taxonomy-eligible, and taxonomy-eligible transitional activities was
+not made because E.ON already reports its taxonomy-alignment.
+In addition to the information required by law, E.ON voluntarily dis-
+closes its taxonomy-aligned investments, revenues, and operating
+expenditures of the 2021 financial year. Activities are taxonomy-
+aligned if the corresponding taxonomy-eligible activities also meet
+all the criteria in Article 3 of the EU Taxonomy.
+economic activities. Activities are taxonomy-eligible if they are
+described in principle in Annexes I and II to the Delegated Act on
+environmental objectives and can be assigned, regardless of
+whether or not the corresponding TSC for environmentally sustain-
+able activities are met.
+E.ON is required to disclose the proportion of investments, reve-
+nues, and operating expenses for the 2021 financial year that were
+attributable to taxonomy-eligible and taxonomy-non-eligible
+An economic activity makes a substantial contribution to environ-
+mental objective 1, "climate change mitigation," if it contributes
+substantially to the stabilization of greenhouse-gas ("GHG") con-
+centrations in the atmosphere at a level that prevents dangerous
+anthropogenic interference with the climate system, consistent
+with the Paris Agreement's long-term temperature target through
+the avoidance or reduction of GHG emissions.
+→ Aspect 3: Social Matters
+Do No Significant Harm
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+9
+107
+98
+9
+0
+9
+Corporate Functions/Other
+76
+33
+44
+757
+426
+331
+9
+80
+Separate Combined Non-Financial Report 144
+99
+88
+89
+3,947
+447
+3,500
+33
+3,467
+Energy Networks
+aligned
+(of eligible)
+(of total)
+(of total)
+251
+100
+E.ON Group from
+core business
+¹Based on EU taxonomy regulations (includes non-cash items, excluding financial investments).
+Most investments recorded under Corporate Functions were not
+covered by the taxonomy. Non-Core Business, which consists mainly
+of Preussen Elektra and thus the operation and dismantling of
+nuclear power plants, is also currently not covered by the taxonomy.
+Distributed wind, solar, and geothermal power generating facilities
+and E.ON's run-of-river power plants made an additional contribution.
+The Customer Solutions segment's energy infrastructure business
+(€0.3 billion) was its main contributor to the EU taxonomy. The expan-
+sion of its assets for district heating distribution and for biofuel-
+fired cogeneration of electricity and heat cogeneration as well as
+investments in plants for heat production with combined feedstocks
+are covered by the taxonomy. The eMobility charging infrastructure
+business, the installation, maintenance, and repair of renewables
+technologies and of devices for controlling buildings' overall energy
+efficiency are likewise taxonomy-aligned. The procurement and sale
+of
+power and
+gas are not covered by the taxonomy.
+97
+71
+73
+5,243
+1,403
+3,840
+113
+3,727
+0
+0
+432
+432
+0
+0
+0
+97
+77
+80
+4,811
+971
+3,840
+113
+3,727
+E.ON Group
+Non-Core Business
+Total
+% taxonomy-
+aligned
+Customer Solutions
+Not taxono-
+my-eligible
+./. Investment subsidies
+Cash-effective investments
++ Cash-effective financial investments
+./. Non-cash-effective investments
+EU taxonomy: total investments (excluding Non-Core Business)
+./. Right-of-use assets
+€ in millions
+Reconciliation to Cash-effective Investments
+In accordance with the taxonomy's specifications, E.ON also
+includes non-cash-effective investments, but not additions to
+financial assets. The taxonomy's definition of investments differs
+from E.ON's performance indicator for investments, namely
+cash-effective investments. E.ON therefore reconciles total invest-
+ments pursuant to the taxonomy to the investments disclosed on
+page 70 of the Combined Group Management Report:
+Of E.ON's taxonomy-eligible investments, property, plant, and
+equipment accounted for €3,420 million, intangible assets for
+€230 million, and right-of-use assets for €190.0 million.
+€3,335 million of property, plant, and equipment, €205 million
+of intangible assets, and €187 million of right-of-use assets are
+taxonomy-aligned.
+Group investments consist of additions to fixed assets plus addi-
+tions to property, plant, and equipment and intangible assets from
+business combinations, which are shown on page 201 → of the
+Annual Report.
+Leasing pursuant to IFRS 16.53 (h).
+Agriculture pursuant to IAS 41.50 (b) and (e)
+% taxonomy-
+eligible
+Property, plant, and equipment pursuant to IAS 16.73 (e) (i) and (iii)
+Intangible assets pursuant to IAS 38.118 (e) (i)
+Q1-Q4 2021
+•
+•
+•
+Investments were calculated on a gross basis; that is, without taking
+into account revaluations or depreciation and amortization or impair-
+ment. They consist of investments in non-current tangible and
+intangible assets (fixed assets), including assets acquired in asset
+deals (recorded directly) and share deals (investment amount deter-
+mined by the purchase-price allocation). More specifically:
+activities
+3. Taxonomy-aligned activities as a ratio of taxonomy-eligible
+2. Taxonomy-aligned activities as a ratio of the total amount shown
+in the E.ON Group's Consolidated Financial Statements prepared
+according to IFRS
+1. Taxonomy-eligible activities as a ratio of the total amount shown
+in the E.ON Group's Consolidated Financial Statements prepared
+according to IFRS
+E.ON reports the following three indicators for investments, revenues,
+and operating expenditures:
+E.ON's reporting applies the indicators defined in Article 8 of the
+EU taxonomy: taxonomy-eligible and taxonomy-aligned investments,
+revenues, and operating expenditures.
+EU Taxonomy Key Figures
+E.ON is committed to respecting human rights in all business pro-
+cesses. To prevent human rights violations, E.ON adheres to exter-
+nal standards and defines its own principles and policies. E.ON's
+Human Rights Policy Statement acknowledges the United Nations'
+("UN") International Bill of Human Rights and the International
+Labour Organization's ("ILO") Declaration on Fundamental Principles
+and Rights at Work and the latter's fundamental conventions. The
+statement also makes reference to E.ON's own policies, such as the
+Supplier Code of Conduct. The standards for human rights, working
+conditions, environmental protection, and compliant business
+practices E.ON requires its suppliers to meet are defined in the Sup-
+plier Code of Conduct. E.ON conducts periodic risk assessments
+which have identified potential threats. E.ON promotes compliance
+with its standards and minimize potential threats by means of
+numerous measures and processes. The focus of these activities for
+our own business is principally on occupational safety and fair work
+conditions, which are described in the Non-Financial Report under
+Aspect 2: Employee matters and Aspect 4: Human rights, and on
+ensuring a responsible supply chain with no human rights violations.
+In 2021 E.ON focused in particular on implementing a due-diligence
+process and enhancing its risk assessments, as described in the
+Non-Financial Report under Aspect 4: Human rights.
+Minimum Safeguards
+Compliance with the EU's environmental objective 6, "the protection
+and restoration of biodiversity and ecosystems," is assessed on the
+basis of the environmental impact assessments and comparable
+assessments that were necessary for an asset to obtain construction
+and operating permits, if such a requirement existed.
+•
+5,243
+Investment property pursuant to IAS 40.76 (a) and (b),
+IAS 40.79 (d) (i) and (ii)
+-220
+Total
+-413
+aligned
+Not taxono-
+Taxonomy-
+EU taxonomy ratios
+% taxonomy-
+Taxonomy-eligible investments
+€ in millions
+Q1-Q4 2021
+EU Taxonomy Investments¹
+Eighty percent of core-business investments in the 2021 financial year were within the scope of the EU taxonomy (taxonomy-eligible). For
+the Group as a whole, 73 percent were taxonomy-eligible (27 percent were not taxonomy-eligible), of which 97 percent are taxonomy-aligned
+activities.
+Investments
+→ Aspect 3: Social Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+→ Purpose and Scope
+Business Model
+→ Aspect 1: Environmental Matters
+my-aligned
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+275
+-123
+4,762
+Revenue corresponds to net sales (excluding electricity and energy
+taxes) shown in the Consolidated Statements of Income on page
+165 of the Annual Report.
+→ EU Taxonomy
+E.ON Annual Report 2021
+The denominator for operating expenditures is prescribed by the
+taxonomy. Environmentally sustainable operating expenditures are
+defined as direct non-capitalized costs that relate to research and
+development, building renovation measures, short-term leases,
+maintenance and repair, and any other direct expenditures relating
+to the day-to-day servicing of assets of property, plant, and equip-
+ment by the undertaking or third party to whom activities are out-
+sourced that are necessary to ensure the continued and effective
+functioning of such assets. At E.ON, this consists mainly of expen-
+ditures for maintenance and repairs performed by contractors which
+are recorded in cost of materials and other operating expenses.
+Contents
+Search
+↑
+Back
+Separate Combined Non-Financial Report 145
+III
+2
+2.4
+1
+0
+20192
+HSE has always been a top priority for the E.ON Management Board.
+In 2020 the Management Board therefore decided to set personal
+H&S targets for the top 100 managers. Furthermore, the HSE Council
+endorsed E.ON's HSE strategy ("Roadmap 2021-23"), which con-
+tains underlying H&S and other targets for its operating units and
+their respective board members. The targets for top managers and
+units are individual. Their purpose is to further reduce the frequency
+of serious incidents and fatalities ("SIF"), with the ultimate aim of
+reaching zero harm in the near future. The changes took effect on
+2021
+Employee TRIF¹
+Total recordable injury frequency ("TRIF") is E.ON's main KPI for
+occupational H&S. It measures the number of recordable work-
+related injuries and illnesses per million hours of work.
+January 1, 2021. They make it even more explicit that E.ON's HSE
+performance is integral to its long-term success. At a mid-year
+review, the units provided valuable feedback on the progress of the
+strategy's implementation. This will result in some fine-tuning in
+2022, particularly a greater emphasis on health management, envi-
+ronmental issues and digitalization.
+2.5
+The Covid-19 pandemic was a source of uncertainty for employees.
+The HSE department supported them by communicating its avail-
+ability and openness to discuss issues of concern. Furthermore, all
+line managers were provided with information materials, which
+included comprehensive recommendations, guidelines, and FAQs
+on, for example, the H&S plans for individual facilities. Information
+was distributed by email, the corporate intranet, and online Board
+Chats. The aim of all measures was to ensure a safe and caring
+workplace and to avoid infections.
+2020
+2.7
+20192
+¹TRIF measures the number of reported fatalities and occupational injuries and illnesses per million
+hours of work. It includes injuries that occur during work-related travel that result in lost time or no
+lost time and/or that lead to medical treatment, restricted work, or work at a substitute work station.
+2Includes innogy from October 1 to December 31, 2019.
+Employee TRIF of 2.7 in 2021 was higher than the 2020 figure (2.4).
+Employee LTIF¹
+2021
+1.5
+0
+1
+1.9
+2.1
+2
+3
+¹Lost time injury frequency measures work-related accidents resulting in lost time per million hours
+of work.
+In several countries where E.ON operates, employees who have
+questions or concerns about their physical or mental health can
+contact a free, independent, and strictly confidential health advisory
+service (employee assistance program). In Germany, this service is a
+central component of the Group Works Health Agreement, which
+was concluded between management and the Group Works Council
+in 2015.
+3
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Hungary²
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+2Includes innogy from 1 October to 31 December 2019.
+Contents
+Search
+Back
+Separate Combined Non-Financial Report 151
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ Purpose and Scope
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+→ Aspect 3: Social Matters
+and harm E.ON's reputation. In 2021, amid the Covid-19 pandemic,
+all three aspects-safety, health, and well-being-had an even
+greater significance. The pandemic posed challenges which E.ON
+met in keeping with its caring culture.
+E.ON's approach to health and safety ("H&S") is proactive and pre-
+ventive, and the Company is committed to zero harm. Consequently,
+the overriding objective is to prevent accidents from ever happening.
+By signing the Düsseldorf Statement on the Seoul Declaration on
+Safety and Health at Work and the Luxembourg Declaration on
+Workplace Health Promotion in 2009, E.ON pledged to promote a
+culture of prevention.
+Environmental management and occupational health and safety
+are combined in a single HSE organization. The E.ON Management
+Board and the management of E.ON's organizational units are
+responsible for HSE performance. They set strategic objectives and
+adopt policies to promote continual improvement. They are sup-
+ported and advised by the HSE department at Corporate Functions,
+employee representatives, and the HSE Council. The council is
+composed of senior executives and employee representatives from
+different business areas and countries where E.ON operates. It
+meets at least three times a year and is chaired by the E.ON Man-
+agement Board member responsible for HSE. The units have HSE
+councils and expert teams as well. They define specifications and
+design plans to ensure that their unit meets the Group's standards,
+carries out HSE plans according to local needs and requirements,
+and supports E.ON's HSE strategy ("Roadmap 2021-23").
+To live up to E.ON's commitment to employees' H&S, its HSE man-
+agement clearly defines processes and sets minimum standards
+(see "HSE Management" below). These apply not only to E.ON
+employees but also to contractor employees who do work on
+E.ON's behalf. All operating units (except for very small ones and
+those with insignificant risks and potential impact) are required to
+have in place an occupational H&S management system certified
+to international standards-such as ISO 45001 (which replaced
+OHSAS 18001)—and to improve the system on an ongoing basis.
+An annual management review is an important part of this man-
+agement system. The reviews are conducted by the Corporate
+Audit department, other in-house auditors, and independent audi-
+tors; the latter verify and certify E.ON's integrated HSE manage-
+ment systems. To decide whether an audit of a unit is necessary,
+E.ON analyzes its accidents from the previous year as well as current
+risk assessments.
+In addition to audits, performance indicators for lost time, acci-
+dents, and dangerous situations also help E.ON investigate accident
+causes and conduct comprehensive risk analyses. The performance
+indicators for lost time, accidents, and dangerous situations are
+carefully reviewed. The purpose is to understand the causes of acci-
+dents, take action to prevent them, and conduct risk analyses. If
+safety data indicate that a unit may not be meeting E.ON's standards,
+Group HSE provides advice and support in order to improve the
+unit's performance. In addition, Group Audit may conduct an HSE
+audit of the unit.
+The findings of the incident investigations and HSE audits completed
+in 2021 show that the HSE management systems are largely effec-
+tive. Any deficiencies identified were rectified without delay. How-
+ever, the audits found that there was a general need to continually
+reinforce employees' and contractors' awareness of their HSE
+responsibility to look after themselves and their colleagues and to
+speak up immediately if they perceive a potential safety risk. These
+isolated unsafe practices suggest that safety awareness is not fully
+adequate in all teams. Consequently, work remains to ensure all the
+HSE management system's requirements are communicated to,
+and complied with in the field by E.ON and contractor employees.
+On balance, the Company has seen a steady improvement in recent
+years, although in 2021 E.ON's H&S KPIs were down slightly. E.ON
+views audits-and the findings and recommendations they yield-as
+opportunities to foster continuous improvement.
+HSE incidents are reported via PRISMA (Platform for Reporting on
+Incident and Sustainability Management and Audits), E.ON's Group-
+wide online incident management system, in five categories of inci-
+dents. They range from 0 (low) to 4 (major). Almost all E.ON units
+use PRISMA; all former innogy units have been using it since the
+beginning of 2021. Pursuant to the Group HSE Standard on Incident
+Management, units must use PRISMA to report category 4 incidents
+to the HSE at Corporate Functions within 24 hours; the units also
+forward the information to the E.ON Management Board immediately.
+In addition, the Management Board is informed about category 3
+and 4 incidents, developments relating to incidents, and related
+measures and programs by means of monthly reports from Group
+HSE and periodic consultations with the Senior Vice President for
+Sustainability & HSE. E.ON systematically investigates and analyzes
+incidents depending on their severity and/or potential to result in an
+actual incident and uses the findings to take preventive action.
+In 2020 E.ON developed and adopted a standard for HSE risk
+management. It defines the minimum requirements for monitoring,
+identifying, analyzing, evaluating, and addressing HSE risks and
+opportunities. Its purpose is to ensure shared understanding and to
+establish an overarching framework for managing HSE risks, including
+sustainability risks. It was published Group-wide in December 2020
+and took effect on January 1, 2021. Group HSE helped implement
+the new standard by conducting workshops for their HSE managers
+and providing them with templates, tools, and examples of best
+practice.
+E.ON Annual Report 2021
+Contents
+Search
+Back
+Business Model
+→ Aspect 1: Environmental Matters
+→ Purpose and Scope
+→ EU Taxonomy
+Separate Combined Non-Financial Report 152
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+Lost-time injury frequency ("LTIF") measures work-related accidents
+resulting in lost time per million hours of work. Employee LTIF of 2.1
+worsened compared to the previous year (2020: 1.5).
+2020
+2021
+47
+182
+145
+47
+192
+154
+50
+205
+Romania
+297
+259
+556
+288
+358
+646
+339
+465
+45
+38
+7
+255
+79
+176
+134
+208
+143
+128
+58
+70
+Slovakia 3,4
+804
+65
+Czech Republic³
+187
+59
+8
+22
+16
+7
+22
+15
+17
+7
+uled
+Total Scheduled
+uled
+Scheduled
+Total
+uled
+Total
+9
+25
+91
+128
+178
+61
+117
+175
+58
+26
+117
+100
+22
+146
+121
+25
+116
+122
+44
+53
+11
+The standards for human rights, working conditions, environmental
+protection, and compliant business practices E.ON requires its
+suppliers to meet are defined in the Supplier Code of Conduct, which
+was updated in 2020 and applies to all suppliers. The updated
+version contains a more detailed description of corporate social
+responsibility ("CSR") requirements and information about how to
+contact E.ON's whistle-blower hotline. The supplier onboarding
+process consists, among other things, of self-registration, formal
+agreement to adhere to E.ON's Supplier Code of Conduct, and a
+compliance check. Non-fuel suppliers that are not subject to supplier
+onboarding must agree to E.ON's General Terms and Conditions for
+Purchase Contracts, which are legally binding. These oblige non-
+fuel suppliers, among other things, to comply with the Supplier Code
+of Conduct and to endorse the UNGC's principles. In addition, the
+contribute to a non-discriminatory and safe work environment and
+to respect human rights. E.ON's Human Rights Policy Statement
+acknowledges the International Bill of Human Rights and the Decla-
+ration on Fundamental Principles and Rights at Work of the Inter-
+national Labour Organization ("ILO") of the United Nations and its
+fundamental conventions and makes reference to E.ON's own poli-
+cies, such as the Supplier Code of Conduct. The standards E.ON is
+guided by include the Universal Declaration of Human Rights of the
+United Nations, the principles of the UN Global Compact ("UNGC"),
+and the European Convention for the Protection of Human Rights.
+E.ON has been a UNGC participant since 2005. E.ON has issued
+a Slavery and Human Trafficking Statement annually since 2017.
+It describes the steps the Company takes to prevent and combat
+human rights violations along the supply chain. The statement is
+published annually in the Sustainability Channel on E.ON's corporate
+website as well as on the E.ON UK website.
+To prevent human rights violations, E.ON adheres to external stan-
+dards and defines its own principles and policies. The E.ON Code of
+Conduct (see "Aspect 5: Anti-Corruption") obliges all employees to
+CEO Leonhard Birnbaum is also the Chief Sustainability Officer and
+Chief Human Rights Officer. Staff in the Sustainability and Legal
+Affairs departments deal with human rights issues, such as changes
+in legislation. Furthermore, the Group Supply Chain function collab-
+orates with the Sustainability department to address ESG aspects
+along the supply chain. They inform the Chief Human Rights Officer
+about current developments and incidents as well as upcoming
+activities and decisions. Depending on the issue, the Chief Human
+Rights Officer may also consult the Sustainability Council or the
+E.ON Management Board.
+E.ON is committed to respecting human rights in all its business
+processes. Failure to respect people's fundamental rights and needs
+has serious consequences for those affected and may damage
+the Company's reputation. Compliance with social standards also
+plays an important role in the business relationships with enterprise
+partners.
+Human Rights and Supplier Management
+E.ON Annual Report 2021
+Aspect 4: Human Rights
+The coronavirus pandemic also made 2021 a challenging year. The
+regional units continued to manage the situation flexibly and respon-
+sibly. They used digital services to improve customer access and
+assistance, despite the closing of customer centers necessitated by
+government lockdown policies. Video chats, for instance, enabled
+customers to accomplish tasks without having to go to a company
+shop.
+In 2021 E.ON continued with the Global Customer Leadership team
+consisting of senior Customer Experience leaders from across the
+business as well as representatives of the Customer and Market
+Insights team. Its purpose is to strengthen the customer's voice and
+propel customer centricity in all E.ON markets. The team met five
+times during the year to review performance, identify areas for cross-
+regional collaboration, and define a common customer narrative for
+the whole business.
+The Chief Operating Office-Commercial ("COO-C") at Corporate
+Functions coordinates E.ON's brand and marketing strategy with
+the aim of further developing and strengthening the E.ON brand.
+COO-C supports the energy sales and solutions businesses for all
+customer categories, in all markets. The members of E.ON's Cus-
+tomer Experience teams serve as ambassadors for customer loyalty
+in their respective unit. They take the lead on related projects and
+activities in their sales territory and share information about success-
+ful programs and service improvements on a monthly basis. E.ON
+has Customer Experience teams in Germany, the United Kingdom,
+Italy, Romania, Sweden, the Czech Republic, Hungary, Poland, and
+the Netherlands.
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 159
+The Customer Immersion program brings senior managers and
+employees into direct contact with residential and business cus-
+tomers. Its purpose is to bring the customers' voice inside E.ON and
+to enhance employees' customer orientation. The program's inter-
+actions between employees and customers took place digitally owing
+to restrictions resulting from the Covid-19 pandemic.
+→ EU Taxonomy
+Contents
+Back
+Employee SIF¹
+E.ON Annual Report 2021
+E.ON is committed to procuring fuels responsibly and sustainably.
+Suppliers of solid biomass must, like non-fuel suppliers, contractu-
+ally agree to comply with the E.ON Supplier Code of Conduct. In
+addition, the E.ON Biomass Purchasing Amendment defines the
+Company's policies and procedures, which include risk assessments,
+supplier audits, and provisions for joint ventures. The amendment
+is part of all contracts with biomass suppliers. They must pledge to
+respect human rights, safeguard the general living conditions of
+persons affected by biomass production, and protect biodiversity
+and the environment.
+In the third quarter of 2021 E.ON began testing a tool that gives it
+the aforementioned capability of conducting ongoing supplier risk
+assessment in five categories of risk: financial, market, sustainability,
+compliance, and performance. The test encompassed 32 suppliers
+that together account for 9 percent of annual spend. E.ON intends to
+adopt this tool Group-wide in 2022, thereby substantially enhancing
+its ability to manage risks, including human rights and other sus-
+tainability risks.
+due-diligence process. Potentially risky suppliers first had to pass
+additional checks, such as a more detailed questionnaire or audit,
+and agree to make improvements and provide evidence of their
+implementation. Although many high-risk suppliers have success-
+fully completed the human rights due-diligence process, E.ON
+acknowledges that the complexity of international supply chains
+represents an underlying challenge for transparency. The Company
+therefore also engages in industry initiatives to develop industry-
+specific standards for improving transparency in supply chains.
+E.ON implemented a human rights due-diligence process in mid-
+2021. It consists of a human rights risk matrix that the Company
+developed together with outside human rights experts. The risks of
+the different categories of goods and services E.ON procures are
+plotted on one axis; the risks of the countries in which suppliers
+operate are plotted on the other. The risks of individual countries
+are based on the findings of eight human rights studies, such as the
+International Trade Union Confederation ("ITUC") Global Rights Index
+and the United Nations Development Programme ("UNDP") Human
+Development Report. The matrix covers the categories that account
+for more than 80 percent of E.ON's annual spend. In 2021 a total of
+304 new and existing suppliers completed the human rights
+Search
+In the first half of 2021 the Supply Chain function developed a sus-
+tainability roadmap for the short to long term. The roadmap, which
+will be implemented in 2022, is aligned with E.ON's ESG targets and
+has four elements: environment, diversity, health and safety, and
+governance. Two action areas were chosen for the remainder of 2021
+and 2022: putting in place an annual human rights due-diligence
+process for high-risk suppliers and acquiring the capability to con-
+duct ongoing risk assessments of these suppliers so that E.ON can
+swiftly identify and mitigate emerging risks.
+Onboarding assessments help E.ON do business exclusively with
+suppliers committed to its standards. At the end of 2018 E.ON put
+in place a revised and fully digital supplier onboarding solution that
+is integrated into the Company's enterprise resource planning sys-
+tem. In 2019 E.ON focused on monitoring existing and new suppliers
+to ensure that they comply with its minimum requirements. In
+October 2020 units of the former innogy started with the adoption
+of this supplier onboarding process. The implementation phase pro-
+ceeded throughout 2021. Every non-fuel supplier whose individual
+transaction volume exceeds €25,000 or whose health, safety, and
+environment risk is medium or high must complete an online
+onboarding process. In some cases, E.ON may take additional steps
+during the supplier onboarding process, such as conducting a supplier
+audit to assess, among other issues, whether the supplier complies
+with E.ON's standards for human rights. As of year-end 2021, the
+suppliers involved in 99.5 percent of the non-fuel purchase orders
+and call-off contracts at the units had completed the onboarding
+process. Effective the start of 2021, most former innogy units used
+this process; effective the start of 2022, all of those with significant
+procurement expenditures do. In addition, E.ON evaluates the per-
+formance of its key non-fuel suppliers annually using five KPIs:
+quality, commercial, delivery, processes and innovation, and CSR;
+the latter includes the protection of human rights. The results are
+Supply Chain Function Policy and Supply Chain Handbook define
+Group-wide principles, processes, and responsibilities for non-fuel
+procurement, excluding the exceptional cases covered under the
+exception list (such as commodity, financial and real estate transac-
+tions, insurance, and taxes) and units to which the policies do not
+apply.
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 160
+→ Purpose and Scope
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+discussed with each supplier during a performance review meeting.
+The outcome of the meeting may trigger specific actions for the
+supplier to improve its performance in one or more of the KPIs if it
+wants to continue doing business with E.ON. The number of reviews
+in 2021 was higher than in 2020. In 2021 E.ON placed greater empha-
+sis on monitoring suppliers' completion of the actions demanded
+after the review.
+Scheduled
+→ Purpose and Scope
+Back
+E.ON improved SAIDI figures for 2021 (based on data from 2020)
+in all countries. In the past three years, supply reliability has
+improved in all E.ON networks. Those in Germany have the best
+continuity of supply in the Company.
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 158
+Business Model
+→ Aspect 1: Environmental Matters
+→ EU Taxonomy
+→ Purpose and Scope
+Customer Orientation
+Back
+Contents
+E.ON Annual Report 2021
+3Unscheduled figures do not include force majeure events and vandalism.
+4DSO in which E.ON has a 49-percent stake.
+Poland²
+68
+56
+Search
+Business Model
+→ Aspect 1: Environmental Matters
+Customers of all types-households and businesses, cities and
+government entities—have embarked on a journey to a digital and
+decarbonized future in which they not only consume, but also
+increasingly make and store their own clean energy. These custom-
+ers are extremely knowledgeable and discerning. They expect E.ON
+to not only listen to and anticipate their needs, but also to design
+innovative and sustainable energy solutions, deliver best-in-class
+services, and provide a consistently good customer experience.
+Earning their trust and loyalty is essential for E.ON to sustainably
+grow its business. Loyal customers tend to stay longer, to purchase
+additional products and services, and to recommend E.ON to their
+family and friends.
+E.ON measures customer loyalty and trust by means of Net Pro-
+moter Score ("NPS"), which was introduced in 2009 and became a
+Group-wide program in 2013. NPS indicates customers' willingness
+to recommend E.ON and its services. It also helps E.ON identify
+Search
+Contents
+E.ON Annual Report 2021
+E.ON did not disclose strategic NPS for small and medium-sized
+enterprises ("SME") for 2020. E.ON does for 2021 because it was
+reintroduced as a KPI for E.ON's executive bonus scheme.
+Unweighted average strategic NPS SME decreased until mid-year
+and remained below the competitor average for most of the year
+due to a weak showing in some countries. Nevertheless, it finished
+2021 on a high, surpassing the competitor average throughout
+November and December.
+E.ON's unweighted average strategic NPS for residential customers
+rose at the beginning of the year and reached its highest level in
+February. It then fell slightly but rose again toward the end of the
+year. It surpassed the competitor average year round.
+Beginning in September 2020, the E.ON Management Board
+receives a monthly NPS report. In addition, the Chief Operating
+Officer-Commercial and the regional units' CEOs discuss NPS
+and customer issues at market reviews, which are conducted on a
+regular basis. The variable compensation of senior managers has
+two components: a company factor and a factor reflecting a man-
+ager's individual performance. Since 2020, strategic NPS and jour-
+ney NPS account for 20 percent of the company factor. In 2021
+NPS target achievement was factored into the E.ON Management
+Board's compensation for the first time. Each regional unit has a set
+of game-changing initiatives in place to systematically improve its
+customer experience. They are sponsored by the unit's CEO and
+board, who are personally responsible for improving their unit's NPS.
+The initiatives, which are defined annually and increasingly incor-
+porate sustainability criteria, may span multiple years depending
+on the degree of transformation required. E.ON introduced these
+initiatives in 2017.
+E.ON puts customers at the center of everything it does. This
+pledge is a corporate value and is embedded in E.ON's customer
+experience principles, brand model, and Grow@E.ON, its Group-
+wide competency framework. E.ON's objective is to continually
+enhance customer loyalty and to become a customer-led business
+and the energy-solutions leader in its markets.
+E.ON defines Group-wide targets for strategic NPS and journey NPS
+annually and uses both at the segment and unit level for manage-
+ment purposes. Strategic NPS is highly significant for management
+purposes because of the information collected about competitors.
+NPS is used by the regional units in Germany, the United Kingdom,
+Italy, Romania, Sweden, the Czech Republic, Hungary, Poland, and
+the Netherlands.
+Touchpoint NPS is based on the feedback of customers who
+have had a specific interaction with E.ON, like talking to a call
+center agent.
+Journey NPS measures the loyalty of customers who have com-
+pleted a journey with E.ON, such as transferring their energy
+service to their new residence when they move.
+Strategic NPS compares E.ON's performance with competitors'
+and is based on the feedback of customers regardless of
+whether they have had an interaction with E.ON.
+•
+which issues are currently of particular importance to its customers
+and thus adapt its activities to current customer needs. There are
+three types of NPS:
+A methodology adopted in 2017 enables E.ON to measure strategic
+NPS consistently across all its markets. This, in turn, makes it possible
+for E.ON to identify and resolve cross-market customer issues and
+also to target areas where it could provide useful innovations for its
+customers. The methodology's automated reporting eliminates the
+errors of manual data entry, thereby improving data quality and
+auditability.
+Minutes per customer
+Germany²
+¹Figures are for the respective previous year: 2021 for 2020, 2020 for 2019, and so forth. Totals may deviate due to rounding.
+2Unscheduled figures do not include force majeure events.
+Unsched-
+→ Purpose and Scope
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+Separate Combined Non-Financial Report 154
+→ General Information on Sustainability at E.ON → Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters → Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+talent boards. The units and the operations in each country may
+adjust and enrich the framework to ensure that it addresses their
+specific needs and challenges. Furthermore, the units use stan-
+dardized E.ON eLearning modules to onboard new employees and
+provide them with training on essential topics like health and
+safety. These and other virtual learning tools as well as courses and
+training programs are offered by the People Development team in
+Group HR. Self-directed eLearning is an effective, flexible, and intu-
+itive way of delivering learning to employees.
+The Senior Vice President for HR is regularly asked to report at
+E.ON Management Board meetings about people matters. The
+Management Board discusses the current status of the talent pool
+on a regular basis. Twice a year the Management Board receives an
+overview of the entire talent pool, including lower levels of manage-
+ment. In 2021 E.ON refined its approach to global talent manage-
+ment, which includes annual management reviews and periodic
+talent board meetings at the business-unit and corporate level. At
+these meetings HR staff exchange views on talented employees
+and their development needs.
+To ensure E.ON's people have a consistent framework within the
+Company's decentralized management approach, in 2017 the HR
+team and the E.ON Management Board developed and approved
+people commitments, which establish twelve principles that articu-
+late E.ON's values with respect to its people. These principles are
+binding for the entire E.ON Group and are endorsed by the Works
+Council of E.ON SE. Units apply these principles in a way that
+reflects their particular legal, cultural, and business environment.
+The people commitments encompass a number of policies and
+guidelines. Examples include agreements on remote working and
+flexible work arrangements, such as home offices, sabbaticals,
+part-time work, and special holidays.
+E.ON has in place a wide range of measures to make working at
+E.ON attractive and to develop its employees. For example, E.ON's
+international transfer policy governs the temporary foreign deploy-
+ment of its employees. E.ON also offers vocational training in
+numerous careers as well as work-study programs. One example is
+the E.ON training initiative, which helps school-leavers get a start
+on their careers through internships that prepare them for an
+apprenticeship as well as school projects and other programs. E.ON
+Graduate Programs ("EGP") recruit highly qualified university grad-
+uates for an 18- to 24-month program during which they receive a
+broad overview of E.ON's business through three to six deployments
+in different E.ON units and departments. E.ON offers the EGP in
+a number of countries where it operates. E.ON offers a job starter
+and a work-study program in Germany and plans to relaunch the
+EGP there in 2022.
+E.ON has conducted an annual employee survey since 2014 to
+find out how its employees feel about their job, their supervisor, the
+work atmosphere in their unit, and other topics. These surveys, or
+Pulse Checks, include questions about E.ON's corporate values and
+current issues, such as, in the past two years, the Covid-19 pandemic.
+E.ON decided to delay the 2021 survey until mid-January 2022 in
+order to include a section on the growth strategy E.ON announced
+in late November 2021. The feedback on this section will help E.ON
+evaluate how well employees were informed about the new strategy,
+how well they understand it, and how motivated and enabled they
+feel to put it into action. The survey's results will be disclosed in
+E.ON's reporting for 2022. Employee Net Promoter Score ("eNPS")
+has been an important aspect of these surveys since 2017. It mea-
+sures employees' willingness to recommend E.ON as an employer.
+Since then, eNPS has improved continually. Since 2020 the survey
+also includes a series of questions on what E.ON calls its caring
+culture, including where E.ON could still improve its safety culture as
+well as its support for employees' health and well-being in general.
+E.ON analyzes survey feedback carefully to identify areas where it
+may need to do better.
+In addition, two times each year E.ON conducts an internal service
+satisfaction survey called Voice.ON and calculates internal NPS
+("INPS") for those corporate support functions that are assumed to
+have a direct impact on employees' satisfaction and engagement
+(Corporate Audit, Cyber Security, Digital Technology, Excellence.ON,
+Finance, Human Resources, Legal & Compliance, and Supply Chain).
+A randomly selected, representative group of employees is asked
+to assess these functions' performance. The functions use the feed-
+back to finetune their processes and design measures to improve
+their performance. iNPS has risen steadily. Support functions with
+a strong iNPS have improved even further, while functions whose
+INPS was formerly negative are now at zero or above. iNPS has
+increased by 15 points on average over the last three years, and
+most support functions' score surpasses +40.
+E.ON has Group-wide standards for hiring executives. They are
+designed to improve how E.ON fills executive positions, make hiring
+more transparent, and ensure equal opportunity. Their main com-
+ponent is a biweekly placement conference at which talent leaders
+from around the organization discuss vacancies directly below the
+top executive level and potential candidates. E.ON's mechanisms
+ensure that executives are engaged in ongoing professional devel-
+opment, that E.ON has a transparent view of its current talent situ-
+ation and the needs for the future, and that leaders across the E.ON
+Group have development opportunities. Since feedback is essential
+for empowering people to perform at their best, E.ON also provides
+employees with periodic performance and career-development
+reviews.
+E.ON Annual Report 2021
+Back
+Contents
+Back
+Separate Combined Non-Financial Report 155
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ Purpose and Scope
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+→ Aspect 3: Social Matters
+E.ON believes that an attractive compensation package including
+appealing and up-to-date fringe benefits is essential for rewarding
+its employees. The compensation plans of nearly all employees
+contain an element that reflects E.ON's performance. This element
+is typically based on the same key performance indicators that are
+also used in the E.ON Management Board's compensation system.
+E.ON wants to retain people (and their expertise) and enable them
+to grow professionally. One of the objectives is therefore to develop
+E.ON's employees so that management positions can be filled
+in-house. The biweekly placement conference for executive roles
+has a shared platform to systematically track how many candidates
+participated in the application process and who ultimately got the
+job. The platform also allows E.ON to monitor whether selected
+candidates are from its development pool and reflect its diversity
+targets. In addition, the aforementioned talent boards focus not
+only on talent identification and succession but also, in recent years,
+on diversity issues, such as increasing the proportion of women and
+employees from minority groups in E.ON's leadership pipeline.
+E.ON enhanced its commitment to these issues in 2020 by making
+diversity a priority in its new Group people strategy. In 2021 E.ON
+continued gathering data in order to assess its talent management's
+effectiveness.
+Diversity and Inclusion
+Diversity is one of the dimensions of E.ON's sustainability strategy
+and an essential element of E.ON's vision and values. E.ON wants
+to ensure equal opportunity for all employees. Diversity fosters cre-
+ativity and innovation, and E.ON therefore takes a targeted
+approach to promoting it. E.ON signed the German Diversity Char-
+ter in 2008-publicly affirming its long-standing commitment to a
+tolerant and inclusive corporate culture-and has been an active
+member since 2020. Further initiatives are described below.
+In line with E.ON's mostly decentralized approach to HR, business
+units address diversity in their particular cultural context. This gives
+them the opportunity to address challenges and develop programs
+that reflect the country or regions where they operate. Diversity is
+managed by Group HR/Executive HR together with a network of
+HR professionals that meets, both in person and using virtual pres-
+ence technology, on a regular basis. Supported by Group HR/Exec-
+utive HR, the E.ON Management Board is responsible for setting
+diversity targets for E.ON as a whole and its units. Some targets may
+reflect the laws of a particular country. It is the units' responsibility
+to design action plans to meet their targets.
+Search
+Contents
+E.ON Annual Report 2021
+In 2018 E.ON decentralized most of its HR activities to bring
+them closer to the business. One important function of Group HR/
+Executive HR, which remains a part of Corporate Functions, is the
+HR management of E.ON's top 100 leaders. This includes executive
+development, placement, succession planning, and talent pipeline
+management. Nevertheless, talent identification, development, and
+succession planning for executive and non-executive management
+positions have a central Group-wide framework consisting of shared
+criteria for talent potential as well as common mechanisms, such as
+0.09
+Unsched-
+20202
+0.09
+20192
+0.13
+0
+0.05
+0.1
+0.15
+¹Serious incidents and fatalities measures accidents and incidents that have caused serious or fatal
+injuries and that surpass a predefined severity threshold per million hours of work.
+2Data are not audited.
+E.ON Annual Report 2021
+Contents
+Search
+Back
+→ Purpose and Scope
+→ EU Taxonomy
+A shared corporate culture is crucial for the success of the new
+E.ON. The foundation has already been laid and E.ON continues to
+actively shape this process instead of simply letting it happen.
+E.ON's shared corporate culture is based on five corporate values
+that guide employees' actions as well as their interactions with
+each other, customers, and business partners: putting our customer
+first, better together, delivering on our promises, exploring new
+paths, and behaving mindfully.
+provides them feedback; how E.ON identifies talent and places
+them in the right positions; and how E.ON rewards and values per-
+formance to ensure that E.ON always has the people to propel the
+Company's success. Grow@E.ON consists of a variety of career
+paths and opportunities. This makes E.ON an attractive employer
+for people seeking specialist or generalist careers and positions
+E.ON well for the continually changing world of work and its emphasis
+on agility, tomorrow's skills, greater individualism, and diversity.
+Grow@E.ON was updated in 2020 and is reviewed on a regular basis.
+All leaders and employees are informed about, and trained in line
+with, Grow@E.ON.
+However, some frameworks apply to all business units Group-wide.
+For example, E.ON's Group-wide competency model, Grow@E.ON,
+defines the tangible behaviors E.ON commits to. It describes how
+employees and managers want to behave with each other and with
+customers, providing employees with guidance for their daily work
+and with a clear path for individual development and growth.
+Grow@E.ON, which is integral to GPS@E.ON, is a key enabler of
+professional development. Grow@E.ON is integrated into all HR
+and people processes. It defines the kind of people E.ON wants
+to attract, recruit, and retain; how E.ON develops employees and
+The Group people strategy ("GPS") provides the compass to guide
+the HR-related aspects of E.ON's transformation and long-term
+success amid a rapidly changing world. E.ON's new GPS, called
+GPS@E.ON, has been in place since 2020. It sets four people pri-
+orities for the entire Group: Future of Work, Diversity & Inclusion,
+Sustainability, and Leadership. GPS@E.ON sets the direction and
+provides the compass for Group-wide people activities, all of which
+need to contribute to the people priorities and their key ambitions.
+It is brought to life by Group-wide and unit-level people activities,
+especially existing strategic initiatives. This process is flexible and
+modular to reflect differences between business units.
+considers to be its future leaders; and by helping all people to realize
+their potential and be fit for a future that will be increasingly digital.
+Furthermore, E.ON must perform all these tasks amid a continually
+evolving business environment, rapid technological change, and the
+Covid-19 pandemic. Ongoing integration processes in the wake of
+E.ON's transformation remained another important priority in 2021.
+The mission of the Human Resources ("HR") function is to enable
+E.ON to maximize its competitive advantages in the energy market
+and to support E.ON's vision: "Improving people's lives by connect-
+ing everyone to good energy." This is done by attracting the right
+people and putting them in the right roles at the right time; by iden-
+tifying, developing, and retaining talented employees whom E.ON
+The Diversity and Inclusion Declaration, signed by the E.ON Manage-
+ment Board and E.ON SE Works Council in 2016, aims to create a
+diverse and inclusive work environment that empowers all employees
+to realize their potential. In April 2018 the E.ON Management
+Board, the E.ON SE Works Council, and the Group representation
+Working Conditions and Employee Development
+Regrettably, two contractors and one E.ON employee died in work-
+place accidents in 2021. One contractor employee and one E.ON
+employee received a fatal electric shock. The second contractor
+employee sustained fatal injuries in a fall. Each fatal accident is
+thoroughly investigated so that E.ON understands the exact course
+of events that led to it. Identifying root causes enables E.ON to take
+the measures necessary to prevent similar accidents in future. Nev-
+ertheless, serious and even fatal accidents still occur. E.ON cannot
+and will not accept this. It has therefore further intensified its efforts
+to prevent accidents. Examples are the decision to extend the eval-
+uation of HSE maturity to all E.ON distribution system operators
+along with adjustments to the Roadmap 2021-2023 to place more
+emphasis on risk and contractor management.
+SIF measures accidents and incidents that have caused serious or
+fatal injuries and that surpass a predefined severity threshold per
+million hours of work. Employee SIF was at the previous year's level
+of 0.09.
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+Separate Combined Non-Financial Report 153
+Business Model
+→ Aspect 1: Environmental Matters
+E.ON employees' health rate was 96.5 percent in 2021 (prior year:
+96.3 percent). It reflects the number of days actually worked in
+relation to the number agreed on.
+for severely disabled persons signed the Shared Understanding of
+Implementing Inclusion at E.ON, creating a strong foundation for
+integrating people with disabilities into the organization.
+Search
+E.ON SE and E.ON companies in Germany must comply with the
+German Law for the Equal Participation of Women and Men in
+Leadership Positions in the Private Sector and the Public Sector,
+which took effect on May 1, 2015. Pursuant to the law, in 2017
+E.ON set new targets for the next five-year period, which ends on
+June 30, 2022. E.ON's targets are for women to occupy 30 percent
+of the positions in the first level of management below the E.ON
+Management Board and 35 percent of the positions in the second
+level. At year-end 2021, the proportion of women in first and second
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+Separate Combined Non-Financial Report 157
+Search
+Contents
+E.ON Annual Report 2021
+E.ON has in place investment and maintenance plans to maintain
+and expand its grids to ensure that all of its network customers are
+connected and have a reliable energy supply. E.ON will invest a total
+of €22 billion in its energy networks through 2026. E.ON's DSOS
+are responsible for implementing these plans, which encompass
+→ Purpose and Scope
+E.ON's distribution system operators ("DSOS") are responsible for
+the safe and reliable operation of its distribution networks. Their
+network control centers oversee network operations. E.ON's DSOs
+are also responsible for resolving unforeseen outages in their
+network territory. In case of widespread outages, E.ON's business
+resilience management system stipulates responsibilities and pro-
+cesses in accordance with the instructions contained in the Incident
+and Crisis Management Policy. The Chief Operating Officer-Networks
+("COO-N") oversees the Energy Networks segment. Under his
+leadership, three departments (Energy Network Europe, Energy
+Networks Germany and Energy Networks Technology & Innovation)
+at Corporate Functions actively manage Energy Networks' regional
+units. This includes strategic development, capital allocation, asset
+management, and so forth.
+One of E.ON's main goals as an energy company and distribution
+grid operator is to ensure that its customers have a secure supply of
+electricity. A reliable electricity supply is essential for industrialized
+countries to be able to maintain their infrastructure and meet their
+inhabitants' needs. For example, industrial customers that operate
+high-precision production facilities require a constant network fre-
+quency. If frequency fluctuates, machinery can break down, resulting
+in additional costs. A power outage can have serious consequences,
+and not just for industrial customers. At companies, government
+agencies, and households, most processes are no longer possible
+without electricity. One of the challenges in energy supply is that,
+increasingly, electricity comes from distributed sources. As a result,
+electricity is fed into the network at many different points. Moreover,
+renewables feed-in fluctuates because it depends on the weather
+and other factors beyond E.ON's control.
+Security of Supply
+Aspect 3: Social Matters
+In 2020 E.ON designed a process to help foster a diversity culture at
+E.ON. It started by identifying the diversity dimensions that it would
+like to address. E.ON has so far focused on gender, age, ethnicity,
+and disability. E.ON now wants to broaden the focus to include sexual
+orientation and parental status, for which meaningful KPIs will be
+selected, set and aligned with the people strategy. Each business
+unit will have specific targets and will develop and implement initia-
+tives to meet them. E.ON intends to monitor progress on a regular
+basis and to analyze and report the results.
+E.ON aims to provide equal pay to women and men for comparable
+jobs at all group companies. Due to the decentralized management
+approach, data are not collected and the pay gap for the Group as
+a whole is not assessed. The United Kingdom is an exception due to
+legal requirements.
+30%
+Part of E.ON's corporate strategy is to adapt its distribution grids to
+the emerging distributed energy world. They form a crucial link
+between electricity producers and consumers. E.ON's distribution
+grids must function properly and be equipped to meet the challenges
+of the new energy world for E.ON to continue to ensure a reliable
+electricity supply in the future. For this purpose, E.ON continually
+upgrades its existing infrastructure with smart-grid technology.
+This enables E.ON to better manage energy generation, distribution,
+and storage.
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+Unsched-
+2019
+E.ON promotes diversity and inclusion through a variety of programs
+and networks, such as a mentoring program in Germany to prepare
+female employees for management positions, the Women@E.ON
+network which aims to increase visibility and influence of women at
+E.ON, and the LGBT+ & Friends network which promotes equality,
+diversity, and an inclusive work environment. In 2021 members of
+the Management Board began personally sponsoring a diversity
+network, and E.ON provided financial support. In addition, E.ON is
+part of multiple external initiatives, such as the Initiative Women
+into Leadership ("IWIL"), the European Round Table ("ERT"), and
+Catalyst, a global non-profit organization focusing on empowering
+and accelerating women in business.
+2020
+Although SAIDI is not used for management control purposes, it
+provides important information on the reliability of E.ON's networks.
+At regular intervals, the DSOs inform the E.ON Management Board
+member responsible for network operations about their security
+of supply. All E.ON DSOs include their SAIDI in their quarterly per-
+formance report to the E.ON Management Board.
+have been officially audited (by the BNetzA in Germany and the rel-
+evant regulatory agencies elsewhere), it publishes below figures for
+the previous year, which have been approved by the agencies.
+2021
+Sweden
+SAIDI Power¹
+By the end of the data-collection period, no regulatory agency had
+completed the process of validating 2021 outages. Because this
+report is supposed to contain final continuity of supply figures that
+also verified by the BNetzA. This figure can therefore be deemed
+official. All the countries in which E.ON operates grids now have
+quality regulations. The respective regulatory agency reviews and
+validates grid operators' outage reports. The SAIDI figures for a
+particular country therefore reflect the methodology stipulated by
+its regulatory agency.
+E.ON's DSOs record all planned and unscheduled outages at their
+distribution networks. They use these data to calculate the system
+average interruption duration index ("SAIDI"), which measures the
+average outage duration per customer per year. E.ON discloses the
+SAIDI of its fully consolidated DSOs by country. The figure for
+Germany, for example, is the average of E.ON's DSOs there. E.ON's
+SAIDI in Germany is calculated according to the method prescribed
+by the German Federal Network Agency (known by its German
+acronym, "BNetzA"). This calculation is based on outages that are
+In 2021 E.ON adopted a strategy for deploying more smart tech-
+nology in its low- and medium-voltage grids, primarily in Germany
+but also in all the other countries in Europe where E.ON operates.
+E.ON's smart-tech deployment targets vary by country but generally
+far exceed those set by the respective regulatory scheme. E.ON will
+monitor progress using KPIs on a regular basis.
+one or more years. Their investment budgets are approved centrally.
+Final approval comes from the E.ON Management Board at the
+end of the annual medium-term planning and budgeting process.
+A portion of the investment budgets goes toward making E.ON's
+grids smarter. This is accomplished by equipping them with sensors
+and command-and-control technology, automating them, and aug-
+menting them with a digital layer. The increasing use of smart-grid
+technologies makes it possible to avoid or delay costly investments
+in conventional networks by, for example, using this technology to
+maximize the capacity of existing overhead lines. Investment deci-
+sions always focus on efficiency as well as security of supply. E.ON
+chooses the solutions that make the most technical and economic
+sense. This is because grid investments affect the grid fees included
+in the electricity price paid by customers.
+→ Aspect 3: Social Matters
+¹Core workforce, including board members and managing directors.
+20%
+Back
+0%
+E.ON Annual Report 2021
+Contents
+Search
+Back
+10%
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+Separate Combined Non-Financial Report 156
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters → Aspect 3: Social Matters
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+levels of management below the Management Board was 28.0 per-
+cent and 30.4 percent, respectively. In addition, in December 2016
+the E.ON Supervisory Board resolved that by year-end 2021 women
+will make
+up o 20 percent of the E.ON Management Board. This target
+has been met. In 2021 E.ON set a voluntary Group-wide target that
+goes beyond statutory requirements. The target is to increase, by
+2031, the proportion of women in executive positions in all business
+units in all countries so that it reflects the overall proportion of
+women in the workforce, which at year-end 2021 was 32 percent.
+Progress toward the target will be monitored by Group HR twice a
+year and reported to the E.ON Management Board. E.ON discloses
+the figures at year-end for E.ON companies in Germany and for the
+E.ON Group as whole.
+Proportion of Female Executives¹
+E.ON Group
+21
+2021
+→ Purpose and Scope
+E.ON Germany
+E.ON Germany
+2019
+21
+E.ON Group
+17
+17
+2020
+E.ON Germany
+E.ON Group
+21
+18
+-845
+15
+87
+-201
+-342
+-42
+-184
+-342
+-17
+11
+Total recognized income and expenses (total comprehensive income)
+Attributable to shareholders of E.ON SE
+-1,740
+3,030
+19
+Items that might be reclassified subsequently to the income statement
+504
+Total income and expenses recognized directly in equity (other comprehensive income)
+-1
+72
+-300
+-50
+148
+43
+-464
+655
+Income taxes
+Reclassification adjustments recognized in income
+Companies accounted for under the equity method
+Unrealized changes
+-47
+50
+-45
+52
+-2
+-2
+8,335
+93
+-214
+6
+-470
+Right-of-use assets
+-579
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Consolidated Balance Sheet-Equity and Liabilities
+December 31,
+€ in millions
+Goodwill¹
+Intangible assets
+→ Consolidated Statement of Cash Flows
+Note
+Unrealized changes-hedging reserve/other
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+2021
+2020
+€ in millions
+Note
+2021
+December 31,
+2020
+(15)
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+Consolidated Financial Statements 167
+Continuing operations
+Discontinued operations
+Attributable to non-controlling interests
+7,544
+-497
+-82
+791
+109
+Consolidated Financial Statements 166
+→ Consolidated Statement of Recognized Income and Expenses
+→ Notes
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Balance Sheet-Assets
+7,544
+Currency-translation adjustments
+Current liabilities
+Unrealized changes
+-40
+5,305
+1,270
+4,691
+1,017
+614
+253
+(5)
+Attributable to shareholders of E.ON SE
+in €
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted¹
+(14)
+from continuing operations
+1.80
+0.41
+from discontinued operations
+Attributable to non-controlling interests
+1,310
+5,305
+-871
+Search
+↑
+17,408
+Back
+Consolidated Statement of Cash Flows
+€ in millions
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Contents
+E.ON Annual Report 2021
+95,385
+24,569
+40,511
+119,759
+Total equity and liabilities
+¹Includes the preliminary differential amount from the VSEH purchase-price allocation in 2020 (see Note 5).
+95,385
+119,759
+-0.02
+Reclassification adjustments recognized in income
+from net income
+¹Based on weighted-average number of shares outstanding.
+-1,093
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+5
+-19
+Income taxes
+-83
+217
+2,604
+Items that will not be reclassified subsequently to the income statement
+-895
+Cash flow hedges
+648
+-358
+Unrealized changes-hedging reserve
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Fair value measurement of financial instruments
+2,526
+Remeasurements of defined benefit plans
+1,270
+5,305
+1.80
+0.39
+2,608
+2,607
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Changes in Equity
+Consolidated Statement of Recognized Income and Expenses
+€ in millions
+Net income
+2021
+2020
+Weighted-average number of shares outstanding (in millions)
+17,827
+2,668
+(20)
+Miscellaneous provisions
+(26)
+13,367
+13,296
+11,525
+Deferred tax liabilities
+Income tax assets
+28,111
+Liquid funds
+(11)
+783
+(11)
+2,649
+2,993
+1,003
+Non-current liabilities
+Securities and fixed-term deposits
+(18)
+Trade receivables and other operating assets
+8,088
+10,818
+7,599
+Income tax liabilities
+(11)
+312
+362
+Inventories
+(17)
+1,051
+1,131
+Financial receivables and other financial assets
+(18)
+1,592
+445
+Provisions for pensions and similar obligations
+(25)
+6,082
+(19)
+(27)
+61,359
+5,965
+543
+847
+1,002
+Current assets
+39,122
+Miscellaneous provisions
+(26)
+(11)
+11,782
+19,901
+Total assets
+185
+701
+(5)
+Liabilities associated with assets held for sale
+Consolidated Financial Statements 168
+3,904
+1,620
+(5)
+Assets held for sale
+4,795
+1,596
+1,111
+Financial liabilities
+(27)
+6,530
+3,418
+Restricted cash and cash equivalents
+735
+1,016
+Cash and cash equivalents
+3,634
+Trade payables and other operating liabilities
+(27)
+20,955
+16,215
+Income tax liabilities
+61,761
+Operating liabilities
+75,484
+80,637
+(23)
+-4,075
+-4,701
+Companies accounted for under the equity method
+(16)
+4,083
+4,383
+Accumulated Other Comprehensive Income
+Treasury shares
+-1,094
+-1,126
+Other financial assets
+(16)
+3,846
+3,770
+Equity attributable to shareholders of E.ON SE
+(20)
+36,923
+36,860
+(15)
+2,641
+2,641
+(15)
+3,553
+3,855
+Additional paid-in capital
+(21)
+13,353
+13,368
+(33)
+2,424
+2,543
+Retained earnings
+(22)
+1,228
+-5,257
+Property, plant and equipment
+12,053
+4,925
+Equity investments
+2,147
+2,283
+Income tax assets
+(11)
+24
+34
+Non-controlling interests
+Equity
+Financial liabilities
+(24)
+5,836
+4,130
+17,889
+9,055
+(27)
+28,131
+29,423
+Non-current assets
+1,651
+Capital stock
+(11)
+3,244
+1,883
+Non-current securities
+Non-controlling interests (before reclassification)
+6,623
+5,696
+1,699
+1,887
+Reclassification related to IAS 32
+-787
+-1,566
+Financial receivables and other financial assets
+(18)
+978
+622
+Operating receivables and other operating assets
+(18)
+9,810
+Deferred tax assets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Hedging
+reserve/
+other
+2021
+217
+(25) Provisions for Pensions and Similar Obligations
+171
+(1) Summary of Significant Accounting Policies
+225
+(26) Miscellaneous Provisions
+184
+(2) New Standards, Interpretations and Amendments
+228
+(27) Liabilities
+186
+(3) Impact of the Covid-19 Pandemic
+233
+(28) Contingent Liabilities and Other Financial Obligations
+186
+Notes
+(4) Scope of Consolidation
+171
+215
+Consolidated Balance Sheets
+211
+(19) Liquid Funds
+211
+(20) Capital Stock
+168
+Consolidated Statement of Cash Flows
+214
+(21) Additional Paid-in Capital
+214
+(22) Retained Earnings
+169
+Consolidated Statement of Changes in Equity
+214
+(23) Changes in Other Comprehensive Income
+(24) Non-controlling Interests
+234
+(29) Litigation and Claims
+186
+254
+(35) Segment Reporting
+194
+(11) Income Taxes
+259
+198
+(12) Personnel-Related Information
+→ Notes
+(36) Compensation of Supervisory Board and Management Board
+(37) Subsequent Events
+200
+(13) Other Information
+260
+(38) List of Shareholdings Pursuant to Section 313 (2) HGB
+200
+(14) Earnings per Share
+(10) Financial Results
+194
+(34) Transactions with Related Parties
+253
+(5) Acquisitions, Disposals and Discontinued Operations
+235
+(30) Supplemental Cash Flow Disclosures
+191
+(6) Revenues
+236
+192
+167
+(7) Own Work Capitalized
+(31) Derivative Financial Instruments and Hedging Transactions
+(32) Additional Disclosures on Financial Instruments
+192
+(8) Other Operating Income and Expenses
+251
+(33) Leasing
+193
+(9) Cost of Materials
+239
+201
+(18) Receivables and Other Assets
+(17) Inventories
+→ Purpose and Scope
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+→ Aspect 3: Social Matters
+The nuclear power plants operated by E.ON's subsidiary Preussen-
+Elektra will stop producing electricity by year-end 2022. They all
+have sufficient fuel to operate until this date. PreussenElektra
+stopped procuring uranium in 2020.
+E.ON's goal is to avoid human rights abuses, environmental damage,
+and corporate malfeasance by identifying associated risks along its
+value chain from a holistic point of view. Periodic risk assessments
+enable E.ON to identify violations or suspected violations. Suppliers
+with identified violations or suspected violations are listed in a new
+KPI ("Suppliers under investigation/observation") that was added to
+Supply Chain's quarterly reporting in 2020. In such cases, the Supply
+Chain Compliance Officer and the respective Supply Chain Director
+are notified, and a process (including close monitoring of the specific
+actions E.ON requires the supplier to take) is set in motion without
+delay to improve the situation. If it does not, E.ON terminates its
+business dealings with the supplier. In 2021 no business dealings
+were terminated.
+E.ON's employees can report potential violations of human rights
+through internal reporting channels or a Group-wide IT-based
+external whistle-blower hotline. In December 2019 E.ON extended
+the hotline service and published the hotline number online. Not
+only E.ON employees, but also business partners, their employees,
+and other third parties can contact this hotline confidentially. The
+hotline can process calls in the languages of all countries in which
+E.ON operates. At E.ON, Group Compliance is responsible for main-
+taining the hotline. It forwards the information to the relevant
+department or unit. Depending on the nature and severity of the
+potential violation, Group Compliance may report it immediately
+to the E.ON Management Board, notify law enforcement, initiate
+its own investigation, or take other appropriate action. In 2021
+two possible human rights violations were reported through the
+whistle-blower hotline. The investigation found that in both cases
+the allegations were not linked to E.ON or its suppliers and in fact
+were made against companies with which E.ON has no business
+relationship.
+Aspect 5: Anti-Corruption
+Compliance and Anti-Corruption
+E.ON is committed to combating corruption in all its manifestations
+and supports national and international efforts directed against it.
+E.ON rejects it as a member of the UN Global Compact as well. Cor-
+ruption leads to decisions being made for the wrong reasons. It can
+thus impede progress and innovation, distort competition, and do
+long-term damage to companies. Employees, managers, and board
+members guilty of corruption may be subject to fines and criminal
+prosecution. If violations occur, E.ON deals with them transparently
+and, if necessary, takes disciplinary action.
+The E.ON Management Board has the ultimate responsibility for
+ensuring compliance with applicable laws and for monitoring com-
+pliance risks. The E.ON Group has an effective compliance manage-
+ment system ("CMS"). The CMS sets uniform Group-wide minimum
+standards for certain compliance issues, such as anti-corruption.
+Pursuant to a Group-wide policy, the Chief Compliance Officer ("CCO"),
+the Group Compliance team, and the business units' Compliance
+Officers are responsible for refining and optimizing the CMS on a
+continual basis.
+The CCO reports on a quarterly basis to the E.ON Management
+Board and to the Supervisory Board's Audit and Risk Committee on
+the status of the CMS's effectiveness and current developments
+and incidents. In the event of serious incidents, the Management
+Board and the Supervisory Board's Audit and Risk Committee are
+informed immediately. The same applies to important new laws.
+Potential violations are investigated centrally by Group Audit and
+Group Compliance.
+The effectiveness of E.ON's CMS is the main indicator of the
+Company's compliance performance. All compliance mechanisms
+--such as policies, processes, controls, and so forth-are guided
+and assessed by this criterion. In addition to the E.ON Management
+Board and the Audit and Risk Committee, Group Audit monitors
+the CMS's effectiveness. Group Audit is an independent entity and
+is E.ON's third line of defense for monitoring the CMS. The criteria
+E.ON uses for monitoring effectiveness are the seriousness and
+credibility of the compliance efforts as reflected by, for example, the
+resources E.ON devotes to compliance, its quality, as well as control
+and monitoring. The Management Board and the Audit and Risk
+Committee are convinced that the CMS was again effective in 2021.
+Their assessment was based in part on audits as well as surveys
+and interviews of employees and stakeholders.
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+E.ON's Code of Conduct focuses on the guiding principle, "Doing
+the right thing." Every employee in the E.ON Group is obliged to act
+in accordance with the Code of Conduct's rules and regulations. The
+Code is therefore part of the employees' duties under their employ-
+ment contract. It is supplemented by several People Guidelines that
+lay down specific rules ("Doing things right"). As a compulsory
+Separate Combined Non-Financial Report 161
+Search
+10
+1
+-12
+699
+81
+-15
+32
+17
+-1,225
+-1,225
+-339
+-5
+98
+93
+Contents
+Back
+E.ON Annual Report 2021
+Contents
+Search
+163
+Consolidated
+Financial Statements
+E.ON Annual Report 2021
+III
+Contents Q Search ← Back
+Consolidated Financial Statements
+164
+165
+Consolidated Statement of Income
+206
+(16) Companies Accounted for under the Equity Method and Other
+Financial Assets
+166
+Consolidated Statement of Recognized Income and Expenses
+210
+← Back
+Search
+Contents
+E.ON Annual Report 2021
+Back
+Separate Combined Non-Financial Report 162
+→ Annual Sustainability Report → Sustainability Ratings and Rankings
+→ Aspect 4: Human Rights → Aspect 5: Anti-Corruption
+→ Purpose and Scope
+→ EU Taxonomy
+Business Model
+→ Aspect 1: Environmental Matters
+→ General Information on Sustainability at E.ON
+→ Aspect 2: Employee Matters
+210
+→ Aspect 3: Social Matters
+Managers and employees of business partners may-within pre-
+defined limits-be invited to events and restaurants and/or receive
+gifts. The Anti-Corruption People Guideline contains a decision-
+making scheme that uses the familiar green, amber, and red of traffic
+lights to indicate when accepting or granting such offers or gifts is
+permissible, potentially problematic, or forbidden. Gratuities above
+a certain threshold, which varies by country and national regulations,
+must receive Compliance Officer approval. Particularly strict require-
+ments apply to invitations and gifts from public, elected, and gov-
+ernment officials and their representatives.
+To determine in which functions the risk for some compliance
+violations is particularly high, E.ON conducts compliance risk
+assessments ("CRAS") on an ongoing basis. Based on their findings,
+preventive measures are taken.
+If employees suspect misconduct or a violation of laws or company
+policies, they are instructed to report it. For this purpose, they
+may use if they prefer, anonymously-internal reporting channels
+or a Group-wide, IT-based whistle-blower hotline. Not only E.ON
+employees, but also business partners, their employees, and other
+third parties can contact the hotline confidentially. Group Compli-
+ance forwards the information to the relevant department or unit.
+E.ON wants to ensure compliance standards in its supply chain as
+well. E.ON conducts compliance checks to determine whether
+potential suppliers act in accordance with the Company's values and
+principles. Also, E.ON subjects potential suppliers to a prequalifica-
+tion, which involves checking their identity and integrity to ensure
+that they meet E.ON's compliance standards. It includes searching
+media reports for references to a supplier in connection with com-
+pliance issues like corruption and checking official sanction and ter-
+rorism lists. In some cases, potential suppliers must also complete
+a questionnaire, which E.ON evaluates carefully. Prequalification is
+mandatory for all new suppliers. The Know Your Counterpart ("KYC")
+principle also defines minimum requirements for certain business
+partners and scenarios, other than suppliers. The KYC check is an
+IT-supported workflow that helps verify counterparties' integrity
+and avoid legal, regulatory, and reputational risks related to com-
+pliance issues.
+In 2021 E.ON continued to make new eLearning courses available
+to employees Group-wide. Since 2010 all employees have been
+required to complete a Code of Conduct eLearning module on a reg-
+ular basis. New material was added to the module in 2021, includ-
+ing a statement from the new Chief Executive Officer emphasizing
+the Code's importance. Employees in units without Internet access
+receive this training in an offline format.
+New employees must complete a new joiner eLearning module along
+with the module on the E.ON Code of Conduct. It familiarizes them
+with company rules and whom to contact if they have questions
+or feel uncertain about a decision. In addition, new line managers
+receive integrity training that underscores their function as role
+models in E.ON's compliance culture.
+reference, the Code helps employees make the right decisions in
+various professional situations and remain true to E.ON's values.
+In the preface, the E.ON Management Board calls on all employees
+to act in a correct manner in order to protect themselves and the
+Company. The introduction explains why a Code of Conduct is
+needed. The main body of the Code contains comprehensible guid-
+ance on all issues that are of particular concern to E.ON. These
+include human rights, anti-corruption, fair competition, and compli-
+ant relationships with business partners. The Code also contains an
+integrity check. By answering just a few questions, employees can
+find out whether their assessments are in compliance with E.ON's
+principles and values. The Code clearly states E.ON's prohibition
+against company donations to political parties, political candidates,
+managers of political offices, and representatives of public agencies.
+(15) Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant
+and Equipment
+E.ON Annual Report 2021
+= Contents
+6
+-34
+725
+43
+7,544
+791
+791
+8,335
+4,691
+4,691
+614
+614
+5,305
+2,324
+-211
+-211
+6
+7,015
+779
+394
+Non-
+controlling
+interests
+Total
+4,130
+9,055
+81
+780
+17
+-339
+-1,564
+394
+487
+779
+779
+-34
+725
+43
+2,641
+13,353
+1,228
+-3,072
+16
+34
+-1,036
+-17
+-1,094
+12,053
+6,623
+-787
+5,836
+17,889
+E.ON Annual Report 2021
+Balance as of December 31, 2021
+504
+-25
+-25
+2,853
+177
+177
+3,030
+2,324
+2,324
+202
+-818
+202
+income
+-211
+6
+-34
+725
+43
+529
+2,526
+(11)
+Net income
+Income/Loss from discontinued operations, net
+(6)
+77,358
+60,944
+Changes in inventories (finished goods and work in progress)
+22
+42
+Own work capitalized
+(7)
+761
+680
+Other operating income
+(8)
+47,383
+8,907
+Cost of materials
+Sales
+-2,661
+-2,704
+Electricity and energy taxes
+Search
+↑
+Back
+Consolidated Financial Statements 165
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+(9)
+→ Consolidated Statement of Changes in Equity
+Consolidated Statement of Income
+€ in millions
+Sales including electricity and energy taxes
+Note
+2021
+80,062
+2020
+63,605
+→ Notes
+700
+-78,096
+Personnel costs
+Financial results
+(10)
+-386
+-702
+Income/Loss from equity investments
+167
+18
+Income from other securities, interest and similar income
+1,037
+670
+Interest and similar expenses
+-1,590
+-1,390
+Income taxes
+Income from continuing operations
+2,883
+6,509
+Income from continuing operations before financial results and income taxes
+408
+Depreciation, amortization and impairment charges
+Other operating expenses
+(12)
+-5,837
+-5,866
+(15)
+-3,922
+-47,147
+-4,166
+-31,665
+-10,919
+Thereof: Impairments of Financial Assets
+-319
+-317
+Income from companies accounted for under the equity method
+505
+(8)
+-1,566
+259
+4,925
+2,586
+-4,362
+191
+Less: Cash and cash equivalents of discontinued operations at the end of the period
+Cash and cash equivalents of continuing operations at the end of the period
+3,642
+2,667
+Proceeds from disposal of securities (>3 months) and of financial receivables and
+fixed-term deposits
+Purchases of securities (>3 months) and of financial receivables and fixed-term deposits
+801
+-2,744
+2,036
+-2,047
+¹Cash and cash equivalents of continuing operations at the beginning of the period of the prior year also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal group until the divestment in the third quarter and €4 million attributable to the sales operations of the heating
+electricity business in Germany which was divested in the second quarter.
+2Cash and cash equivalents of continuing operations at the end of the period also include €8 million attributable to VSEH group that was reclassified as a disposal group in the fourth quarter of 2021.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+-275
+Consolidated Statement of Changes in Equity
+-4,487
+751
+Cash provided by (used for) operating activities of discontinued operations
+26
+Cash and cash equivalents at the beginning of the year¹
+2,667
+1,902
+Cash provided by (used for) operating activities (operating cash flow)
+4,069
+5,313
+Proceeds from disposal of Intangible assets and property, plant and equipment
+Proceeds from disposal of Equity investments
+270
+234
+Cash and cash equivalents of discontinued operations at the beginning of the period
+Cash and cash equivalents at the end of the period²
+14
+3,642
+2,667
+Purchases of investments in Intangible assets and property, plant and equipment
+Purchases of investments in Equity investments
+€ in millions
+Balance as of January 1, 2020
+Change in scope of consolidation
+2,641
+paid-in
+capital
+13,368
+Retained
+earnings
+Reserve for
+hedging
+costs
+Fair value
+measure-
+ment of
+financial
+instruments
+Cash flow hedges
+Non-con-
+trolling
+Reserve for
+Equity at-
+tributable to
+interests
+(before
+Reclassifica-
+Non-
+Hedging
+reserve
+Capital stock
+Additional
+Currency translation
+adjustments
+→ Notes
+Capital increase
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to IAS 32
+Total comprehensive income
+Net income/loss
+-74
+Other Comprehensive Income
+defined benefit plans
+Changes in accumulated
+other comprehensive
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Changes in accumulated other comprehensive income
+Consolidated Financial Statements 169
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Remeasurements of
+hedging
+costs
+42
+5,287
+-1,864
+Changes in provisions
+8,318
+169
+Changes in deferred taxes
+318
+495
+Other non-cash income and expenses
+-1,187
+-229
+Payments received/made from changes in capital
+Cash dividends paid to shareholders of E.ON SE
+Cash dividends paid to non-controlling interests
+493
+-2,393
+-1,225
+-1,199
+-5,399
+-324
+13
+-5,399
+2020
+€ in millions
+Net income
+5,305
+1,270
+Changes in restricted cash and cash equivalents
+2021
+285
+5,696
+-515
+Income/Loss from discontinued operations, net
+40
+Depreciation, amortization and impairment of intangible assets and of property, plant
+and equipment
+3,922
+4,166
+Cash provided by (used for) investing activities of continuing operations
+Cash provided by (used for) investing activities of discontinued operations
+Cash provided by (used for) investing activities
+-1,877
+-364
+Gain/Loss on disposal of intangible assets and property, plant and equipment, equity
+investments and securities (>3 months)
+Proceeds from financial liabilities
+-2,624
+Trade payables
+1,258
+-508
+Cash provided by (used for) financing activities
+2,263
+-2,624
+Other operating liabilities and income taxes
+9,576
+-555
+Net increase/decrease in cash and cash equivalents
+933
+825
+Cash provided by (used for) operating activities of continuing operations
+4,069
+2,263
+Cash provided by (used for) financing activities of continuing operations
+Cash provided by (used for) financing activities of discontinued operations
+423
+-20,525
+4,980
+6,640
+-140
+-328
+Changes in operating assets and liabilities and in income taxes
+Inventories
+-12,467
+-296
+Effect of foreign exchange rates on cash and cash equivalents
+Repayments of financial liabilities
+-5,308
+63
+104
+Trade receivables
+-2,839
+240
+Other operating receivables and income tax assets
+-1,661
+Treasury
+2020
+reclassifi-
+↑
+Back
+Consolidated Statement of Changes in Equity
+€ in millions
+Balance as of January 1, 2021
+Change in scope of consolidation
+Treasury shares repurchased/sold
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to IAS 32
+Total comprehensive income
+Net income/loss
+Other comprehensive income
+Remeasurements of
+defined benefit plans
+Changes in accumulated
+other comprehensive
+→ Consolidated Balance Sheets
+Search
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Contents
+9,055
+-845
+Balance as of December 31, 2020
+2,641
+13,368
+-5,257
+-2,969
+10
+67
+-1,749
+-60
+-1,126
+4,925
+5,696
+-1,566
+4,130
+E.ON Annual Report 2021
+Changes in accumulated other comprehensive income
+Consolidated Financial Statements 170
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+shares
+shareholders
+of E.ON SE
+reclassifi-
+tion related
+cation)
+to IAS 32
+2,641
+13,368
+-5,257
+-2,969
+67
+-1,749
+-60
+-1,126
+shareholders
+Treasury
+Reclassifica-
+(before
+Non-con-
+trolling
+interests
+→ Notes
+Currency translation
+adjustments
+Fair value
+Cash flow hedges
+Additional
+paid-in
+Capital stock
+1
+capital
+Hedging
+reserve/
+other
+Reserve for
+hedging
+costs
+measure-
+ment of
+financial
+instruments
+Hedging
+reserve
+Reserve for
+hedging
+costs
+Equity at-
+tributable to
+Retained
+earnings
+1
+10
+-42
+1
+9
+238
+4,149
+238
+13,248
+247
+-1,199
+-2,405
+-1,199
+-380
+-2,405
+97
+-380
+-1,579
+97
+1
+-2,308
+7
+5,632
+-846
+shares
+of E.ON SE
+tion related
+to IAS 32
+controlling
+interests
+Total
+-1,927
+-2,465
+11
+33
+-1,418
+-18
+-1,126
+9,099
+-1,483
+-83
+cation)
+-83
+-332
+-42
+-1,596
+-144
+-144
+-1,740
+-750
+-750
+-145
+-145
+-895
+income
+-505
+34
+-83
+34
+-1
+-1
+-750
+267
+-505
+-505
+-1
+34
+-332
+-42
+-579
+-332
+109
+109
+253
+253
+1,017
+1,270
+-470
+1,017
+Emission Rights and Similar Certificates
+The obligation to submit emission rights and similar certificates to
+the relevant authorities is recognized as a liability as of the balance
+sheet date. Measurement is based on the best estimate of the future
+settlement amount.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 179
+Inventories are measured at the lower of acquisition or production
+cost and net realizable value. The cost of raw materials, finished
+products and goods purchased for resale is determined based on
+the average cost method. In addition to production materials and
+wages, production costs include material and production overheads
+based on normal capacity. The costs of general administration are not
+capitalized. Inventory risks resulting from excess and obsolescence
+are provided for using appropriate valuation allowances, whereby
+inventories are written down to net realizable value.
+→ Consolidated Balance Sheets
+↑
+Receivables, Contract Assets or Liabilities and Other Assets
+Contents
+E.ON Annual Report 2021
+Emission rights and similar certificates held under national and
+international emissions trading systems for the settlement of obli-
+gations are capitalized at cost at the date of acquisition and reported
+under current assets. Subsequent measurement is at amortized
+cost under IAS 38.
+Inventories
+Back
+Search
+Liquid funds include current securities, checks, cash on hand and
+bank balances. Bank balances and securities with an original matu-
+rity of more than three months are recognized under securities and
+fixed-term deposits. Liquid funds with an original maturity of less
+than three months are considered to be cash and cash equivalents,
+unless they are restricted.
+identifiable individual risks. If the loss of a certain part of the receiv-
+ables is probable, valuation allowances are provided to cover the
+expected loss. Impairments must also be recognized for expected
+future credit losses.
+Consolidated Financial Statements 180
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Non-derivative and derivative financial instruments are netted on
+the balance sheet if under IAS 32 E.ON has both an unconditional
+right-even in the event of the counterparty's insolvency-and the
+intention to settle offsetting positions simultaneously and/or on a
+net basis.
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The income and losses resulting from the measurement of compo-
+nents held for sale as well as the gains and losses arising from the
+disposal of discontinued operations, are reported separately on the
+face of the income statement under income/loss from discontinued
+operations, net, as is the income from the ordinary operating activi-
+ties of these divisions. Prior-year income statement figures are
+adjusted accordingly. The relevant assets and liabilities are reported
+in a separate line on the balance sheet. The cash flows of discontin-
+ued operations are reported separately in the cash flow statement,
+with prior-year figures adjusted accordingly. However, there is no
+reclassification of prior-year balance sheet line items attributable to
+discontinued operations.
+Discontinued operations are components of an entity that are either
+held for sale or have already been sold and can be clearly distinguished
+from other corporate operations, both operationally and for financial
+reporting purposes. Additionally, the component of the entity clas-
+sified as a discontinued operation must represent a major business
+line or a specific geographic business segment of the Group or a
+subsidiary acquired exclusively for resale.
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually taking
+place. The reclassification to the separate balance sheet items is
+shown in the fixed asset movement schedule under Changes in scope
+of consolidation.
+Assets Held for Sale and Liabilities Associated with Assets Held for
+Sale and Discontinued Operations
+Restricted cash with a remaining maturity in excess of twelve months
+is classified as financial receivables and other financial assets.
+Liquid Funds
+A receivable is recognized under IFRS 15 when the goods or services
+are delivered, provided that the right to consideration is uncondi-
+tional, i.e., is only related to the passage of time. However, if the right
+to receive the consideration is contingent upon conditions other
+than the passage of time, a contract asset is recognized. A contract
+liability under IFRS 15 is recognized when consideration has been
+received for an existing IFRS 15 contract and the right to receive
+the goods or services still exists in full or in part. The contractual
+liability is only reversed with an effect on revenue when E.ON has
+performed the corresponding service. An asset is recognized under
+other assets under IFRS 15 if the cost of obtaining the contract is
+expected to be recovered and the amortization period is longer than
+one year. Other assets are amortized over the estimated term of the
+contract depending on how the goods or services to which the
+costs relate are transferred to the customer. If the estimated term
+of the contract is less than one year, the costs are immediately rec-
+ognized as an expense on the income statement. Receivables and
+other assets are initially measured at fair value, which generally
+approximates nominal value. They are subsequently measured at
+amortized cost, using the effective interest method. Trade receiv-
+ables without a significant financial component are measured upon
+initial recognition at their transaction price. Valuation allowances,
+included in the reported net carrying amount, are provided for
+Non-current assets that are held for sale either individually or collec-
+tively as part of a disposal group, or that belong to a discontinued
+operation, are no longer depreciated. They are instead accounted
+for at the lower of the carrying amount and the fair value less any
+remaining costs to sell. If this value is less than the carrying amount,
+an impairment loss is recognized in other operating expenses.
+Contents
+Agreements to buy or sell non-financial items that are classified
+as own-use contracts under IFRS 9 and that are required to be
+accounted for as derivatives (so-called "failed-own-use" contracts)
+must be realized or recognized in the balance sheet at the market
+price applicable at the time of physical settlement. In addition, any
+income from commodity derivatives arising from the difference
+between the contract price and the market price is recognized in
+other operating income.
+instruments are offset against each other and that the hedging
+relationships are therefore effective. The hedge ratio of the hedges
+is 1:1. Ineffectiveness arises only if the measurement parameters
+of the hedged item and the hedging instrument differ from one
+another or in the case of subsequent designation of the hedging
+instrument. All components of derivative gains and losses from the
+measurement of hedge ineffectiveness are taken into consideration
+during recognition.
+E.ON has designated some of these derivatives as part of a hedging
+relationship. IFRS 9 sets requirements for the admissibility of hedg-
+ing instruments and the underlyings, the formal designation and
+documentation of hedging relationships, the hedging strategy, as
+well as fulfilling requirements of effectiveness in order to qualify
+for hedge accounting. The designated hedged items and hedging
+instruments are subject to the same risk. This economic relationship
+ensures that the amounts of the hedged items and hedging
+As part of fair value measurement in accordance with IFRS 13, the
+counterparty risk is also taken into account for derivative financial
+instruments. E.ON determines this risk based on a portfolio valuation
+in a bilateral approach for both own credit risk (debt value adjust-
+ment) and the credit risk of the corresponding counterparty (credit
+value adjustment). The counterparty risks thus determined are allo-
+cated to the individual financial instruments by applying the relative
+fair value method on a net basis.
+The instruments primarily used are foreign currency forwards and
+cross-currency interest rate swaps, as well as interest rate swaps.
+In commodities, the instruments used primarily include physically
+and financially settled forwards and options related to electricity
+and gas.
+Derivative financial instruments and separated embedded derivatives
+are measured at fair value as of the trading date at initial recognition.
+Under IFRS 9, they are classified as at fair value through profit and
+loss (FVPL) as long as they are not a component of a hedge account-
+ing relationship. Gains and losses from changes in fair value are
+immediately recognized in net income.
+Derivative Financial Instruments and Hedging
+For qualifying fair value hedges, the change in the fair value of the
+derivative and the change in the fair value of the hedged item that is
+due to the hedged risk(s) are recognized in income.
+Non-derivative financial liabilities (including trade payables) within
+the scope of IFRS 9 are measured at amortized cost, using the
+effective interest method. Initial measurement takes place at fair
+value, with transaction costs included in the measurement. In the
+subsequent measurement, the residual carrying amount is adjusted
+by the amortization and accretion of any premium or discount
+remaining until maturity. The premium or discount is recognized in
+financial results over its term.
+Impairments of financial assets are both recognized for losses already
+incurred and for expected future credit defaults. The amount of the
+impairment loss calculated in the determination of expected credit
+losses is recognized on the income statement.
+Debt instruments that do not exclusively serve to collect contractual
+cash flows or to both generate contractual cash flows and sales
+revenue, or whose cash flows do not exclusively consist of interest
+and principal payments are measured at fair value through profit
+and loss (FVPL). For equity instruments that are not held for trading
+purposes, E.ON exercises the fair value option (FVPL).
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 177
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+The expected future credit loss is calculated by multiplying the
+probability of default by the carrying amount of the financial asset
+(exposure at default) and the expected loss ratio (loss given default).
+For information on the treatment of impairments under IFRS 9,
+please see Note 32 →.
+If a derivative instrument qualifies as a cash flow hedge under IFRS 9,
+the effective portion of the hedging instrument's change in fair value
+is recognized in equity (as a component of other comprehensive
+income) and reclassified into income in the period or periods during
+which the cash flows of the transaction being hedged affect income.
+In accordance with IFRS 9, the currency basis spread (hedging costs)
+will be separated from the hedging instrument and reported sepa-
+rately as an excluded component in accumulated other comprehen-
+sive income in the reserve for hedging costs as a component of equity.
+The hedging result is reclassified into income during the period in
+which the cash flows of the hedged asset are recognized in income.
+The result is recognized immediately in income if it becomes proba-
+ble that the hedged underlying transaction will no longer occur. For
+hedging instruments used to establish cash flow hedges, the change
+in fair value of the ineffective portion is recognized immediately in
+the income statement to the extent required.
+E.ON Annual Report 2021
+Embedded derivatives in own-use contracts must be separated from
+the host contract and accounted for as derivatives in accordance
+with IFRS 9 if the economic characteristics and risks of these deriv-
+atives are not closely related to those of the host contract. The con-
+tract is assessed upon conclusion to determine whether a derivative
+is required to be separated. A reassessment must be carried out if
+there is a significant change in the terms of the contract or in the
+context of business combinations.
+own-use contracts. They are not accounted for as derivative financial
+instruments at fair value through profit and loss (FVPL) in accor-
+dance with IFRS 9, but as pending transactions subject to the rules
+of IAS 37. Contracts that provide for net settlement and resales of
+the quantities to be delivered at a future date generally cannot, as a
+rule, be classified as own-use contracts. Based on forward-looking
+forecasts of delivery quantities specified by customer structure and
+portfolio management, contracts with physical settlement upon
+conclusion are recognized as derivatives for which settlement cannot
+be ensured within the scope of ordinary delivery. This "safety buffer”
+is reviewed on a regular basis and adjusted if necessary.
+Contracts (in particular sales and procurement contracts for electricity
+and gas) that are entered into for purposes of receiving or delivering
+non-financial items in accordance with E.ON's anticipated procure-
+ment, sale or use requirements, and held as such, are classified as
+Unrealized gains and losses resulting from the initial measurement
+of derivative financial instruments at the inception of the contract
+are not recognized in income. They are instead deferred and recog-
+nized in income systematically over the term of the derivative. An
+exception to the accrual principle applies if unrealized gains and
+losses from the initial measurement are verified by quoted market
+prices, observable prices of other current market transactions or
+other observable data supporting the valuation technique. In this
+case the gains and losses are recognized in income.
+Changes in fair value of derivative instruments that are recognized
+in income are presented as other operating income or expenses.
+Gains and losses from interest-rate derivatives are included in
+interest income.
+E.ON currently uses hedges in the framework of cash flow hedges
+and hedges of a net investment.
+To hedge the foreign currency risk arising from the Company's net
+investment in foreign operations, derivative as well as non-derivative
+financial instruments are used. Gains or losses due to changes in
+fair value and from foreign currency translation are recognized within
+equity, as a component of other comprehensive income, under cur-
+rency translation adjustments.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 178
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+IFRS 7, "Financial Instruments: Disclosures," ("IFRS 7") and IFRS 13
+both require comprehensive quantitative and qualitative disclosures
+about the extent of risks arising from financial instruments. Addi-
+tional information on financial instruments is provided in Notes
+31 and 32 →.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recoverable
+amount. If the carrying amount exceeds the recoverable amount,
+the carrying amount is adjusted for this difference. If the reasons
+for previously recognized impairment losses no longer exist, such
+impairment losses are reversed accordingly.
+Equity Instruments
+The results of the subsidiaries acquired or disposed of during the
+year are included in the Consolidated Statement of Income from the
+date of acquisition or until the date of their disposal, respectively.
+If the issue of shares in subsidiaries or associates to third parties
+leads to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control or
+significant influence, gains and losses from these dilutive transac-
+tions are included in the income statement under other operating
+income or expenses.
+Where necessary, adjustments are made to the subsidiaries' financial
+statements to bring their accounting policies into line with those of
+the Group. Intercompany receivables, liabilities and results are elim-
+inated in the consolidation process.
+Associated Companies
+An associate is an investee over whose financial and operating policy
+decisions E.ON has significant influence and that is not controlled
+by E.ON or jointly controlled with E.ON. Significant influence is pre-
+sumed if E.ON directly or indirectly holds at least 20 percent, but
+not more than 50 percent, of an entity's voting rights.
+Interests in associated companies are accounted for using the
+equity method.
+The Consolidated Financial Statements incorporate the financial
+statements of E.ON SE and entities controlled by E.ON ("subsidiaries").
+Control exists when the Group is exposed, or has rights, to variable
+returns from its involvement with the investee and has the ability to
+use its power over the investee to influence those returns. Control
+is generally deemed established when a majority of the voting rights
+is held. An entity is a structured entity if control is based on contrac-
+tual arrangements or other legal relationships and is not reflected in
+a majority of voting rights.
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration are
+generally not recognized. Any difference between the cost of the
+investment and the pro rata remeasured value of its net assets is
+recognized in the Consolidated Financial Statements as part of the
+carrying amount.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+Unrealized gains and losses arising from transactions with associated
+companies accounted for using the equity method are eliminated
+within the consolidation process on a pro rata basis if they are
+material.
+Consolidated Financial Statements 172
+Scope of Consolidation
+The Consolidated Financial Statements were prepared in euros.
+Unless otherwise stated, all amounts are shown in millions of euros
+(€ million). For accounting reasons, rounding differences may occur.
+Contents
+→ Consolidated Balance Sheets
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+These financial statements cover the fiscal year from January 1 to
+December 31, 2021. In accordance with IAS 1, "Presentation of
+Financial Statements," ("IAS 1") the Consolidated Balance Sheets
+have been prepared using a classified balance sheet structure. Assets
+that will be realized within twelve months of the reporting date, as
+well as liabilities that are due to be settled within one year of the
+reporting date are generally classified as current. The Consolidated
+Statements of Income are classified using the nature of expense
+method, which is also applied for internal purposes.
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+The Consolidated Financial Statements of E.ON SE, Brüsseler Platz 1,
+45131 Essen, Germany, registered in the Commercial Register of
+Essen District Court under number HRB 28196, have been prepared
+in accordance with Section 315e (1) of the German Commercial Code
+("HGB") and with those International Financial Reporting Standards
+("IFRS") and IFRS Interpretations Committee interpretations ("IFRIC")
+that were adopted by the European Commission for use in the EU
+as of the end of the fiscal year, and whose application was mandatory
+as of December 31, 2021. On March 7, 2022, the Board of Manage-
+ment of E.ON SE approved the Consolidated Financial Statements
+as of December 31, 2021, for publication.
+Principles
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared at cost, with the exception of
+financial assets that are measured at fair value through OCI (FVOCI)
+and of financial assets and liabilities (including derivative financial
+instruments) that are recognized in income and measured at fair
+value through profit or loss (FVPL).
+Consolidated Financial Statements 171
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Consolidated Financial Statements 173
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside the
+European Monetary Union:
+Currencies
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits," is based on actuarial computations
+using the projected unit credit method, with actuarial valuations
+performed at year-end. The valuation encompasses both pension
+obligations and pension entitlements that are known on the report-
+ing date and economic trend assumptions such as assumptions
+on wage and salary growth rates and pension increase rates, among
+others, that are made in order to reflect realistic expectations, as
+well as variables specific to reporting dates such as discount rates,
+for example.
+In 2021, employees of E.ON SE and participating subsidiaries once
+again had the opportunity to purchase E.ON shares at favorable
+conditions under the employee stock purchase program, which had
+been suspended from 2016 to 2020. The program includes a share-
+based payment settled in equity instruments (shares of E.ON SE) as
+consideration for services rendered or work performed. The corre-
+sponding compensation under IFRS 2 was recognized in personnel
+expense and the offsetting entry was made in equity.
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+The E.ON Performance Plan represents commitments of the Com-
+pany which provide for cash compensation based on the share price
+performance at the end of the term. The compensation expense is
+recognized in the income statement pro rata over the vesting period.
+Share-based payment plans issued in the E.ON Group are accounted
+for in accordance with IFRS 2, "Share-Based Payment".
+Share-Based Payment
+If E.ON SE or a Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attributable
+additional costs (net after income taxes), is deducted from E.ON SE's
+equity until the shares are retired, distributed or resold. If such trea-
+sury shares are subsequently distributed or sold, the consideration
+received, net of any directly attributable additional transaction costs
+and associated income taxes, is recognized in equity in additional
+paid-in capital.
+of the liability are reported within other operating income. Accretion
+of the share of the results of the non-controlling shareholders' share
+in net income is recognized in Net interest income/expense.
+Where shareholders of entities own statutory, non-excludable rights
+of termination (as in the case of German partnerships, for example),
+such termination rights require the reclassification of non-controlling
+interests from equity into liabilities under IAS 32. The liability is
+recognized at the present value of the expected settlement amount
+irrespective of the probability of termination. Changes in the value
+E.ON has entered into purchase commitments to holders of non-
+controlling interests in subsidiaries. By means of these agreements,
+the non-controlling shareholders have the right to require E.ON to
+purchase their shares on specified conditions. None of the contrac-
+tual obligations has led to the transfer of substantially all of the risk
+and rewards to E.ON at the time of entering into the contract. Under
+the anticipated acquisition method, however, the right of tender is
+accounted for as if it had already been exercised. Accordingly, the
+minority interests are derecognized-irrespective of the probability
+of the option being exercised—and at the same time a liability is
+recognized in the amount of the present value of the repurchase
+amount in accordance with IAS 32, "Financial Instruments: Presen-
+tation" (IAS 32). The difference between this measurement and the
+carrying amount of the minority shareholders' equity to be derecog-
+nized is recognized in equity of E.ON SE shareholders. The accretion
+of the liability is recognized as interest expense. If a purchase com-
+mitment expires unexercised, the liability reverts to non-controlling
+interests. Any remaining difference is then recognized directly in
+equity in retained earnings.
+In fiscal years 2018, 2019, 2020 and 2021, virtual shares were
+granted to members of the Management Board of E.ON SE and
+certain E.ON Group executives under the new E.ON Performance
+Plan. See the Compensation Report for more details on the struc-
+ture of the plan.
+→ Consolidated Balance Sheets
+Back
+↑
+Joint Ventures
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation process
+on a pro rata basis if they are material.
+Joint Operations
+A joint operation exists when E.ON and other investors directly con-
+trol an operation, but unlike a joint venture, they do not have a claim
+to the changes in net assets from the operation. Instead, they have
+direct rights to individual assets or direct obligations with respect
+to individual liabilities in connection with the operation. E.ON rec-
+ognizes assets and liabilities as well as revenues and expenses in a
+joint operation pro rata according to the rights and obligations
+attributable to E.ON.
+Business Combinations
+Business combinations are accounted for using the purchase method,
+under which the purchase price is offset against the proportional
+share in the acquired company's net assets. The fair values are
+determined using published exchange or market prices at the time
+of acquisition in the case of marketable securities or commodities,
+for example, and in the case of land, buildings and major technical
+equipment, generally using independent expert reports that have
+been prepared by third parties. If exchange or market prices are
+unavailable for consideration, fair values are derived from market
+prices for comparable assets or comparable transactions. If these
+values are not directly observable, fair value is determined using
+appropriate valuation methods. In such cases, E.ON determines fair
+value using the discounted cash flow method by discounting esti-
+mated future cash flows by a weighted-average cost of capital.
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The choice
+of method can be made on a case-by-case basis. The partial good-
+will method is generally used within the E.ON Group.
+Intangible assets must be recognized separately if they are clearly
+separable or if their recognition arises from a contractual or other
+legal right. Provisions for restructuring measures may not be
+recorded in a purchase price allocation. If the purchase price paid
+exceeds the proportional share in the net assets at the time of
+acquisition, the positive difference is recognized as goodwill. No
+goodwill is recognized for positive differences attributable to
+non-controlling interests. A negative difference is recognized in net
+income.
+Foreign Currency Translation
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the transaction.
+At each balance sheet date monetary foreign currency items are
+adjusted to the exchange rate on the reporting date; any gains and
+losses resulting from fluctuations in the relevant currencies are rec-
+ognized in net income and reported as other operating income and
+other operating expenses, respectively. Gains and losses from the
+translation of non-derivative financial instruments used in hedges of
+net investments in foreign operations are recognized in equity as a
+component of other comprehensive income. The ineffective portion
+of the hedging instrument is immediately recognized in net income.
+The functional currency as well as the reporting currency of E.ON SE
+is the euro. The assets and liabilities of Group companies with a
+functional currency other than the euro are translated using the
+mid-market exchange rates applicable on the balance sheet date.
+The income statements of foreign Group companies with a func-
+tional currency other than the euro are translated using annual
+average exchange rates. Differences arising from the application of
+both rates are recognized directly in equity.
+E.ON Annual Report 2021
+Contents
+Search
+→ Notes
+Back
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Search
+a) Revenues
+Recognition of Income
+0.89
+7.45
+10.72
+4.44
+4.84
+10.48
+25.64
+26.46
+10.51
+8.05
+358.52 351.25
+1.18
+1.14
+15.23 9.11
+HUF 369.19 363.89
+USD
+1.13
+1.23
+U.S. dollar
+Hungarian forint
+Revenues are generated primarily from the sale of electricity and
+gas to retail customers, industrial and commercial customers and
+wholesale markets. For contracts that do not provide for defined
+purchase quantities, the performance obligation consists in particu-
+lar in the provision and availability of energy on demand at any
+time. Revenues earned from the distribution of electricity and gas
+and from deliveries of steam and heat are also primarily recognized
+under revenues. E.ON makes the electricity and gas distribution
+network available to its customers.
+TRY
+26.24
+24.86
+CZK
+Czech crown
+10.15
+10.03
+Turkish lira
+10.25
+Since the introduction of IFRS 15 with effect from January 1, 2018,
+revenues no longer include the fees for the promotion of Renewables
+because these revenues are netted with the corresponding cost of
+materials (net disclosure).
+period. In B2B, a bottom-up approach is used to calculate individual
+rates. E.ON's sales transactions generally are not based on any
+material finance components. The average target payment period is
+generally between 10 and 45 days. Refunds to customers are an
+exception and are granted if the customer is disconnected from the
+power supply for an extended period of time. Cash bonuses or bonus
+payments to customers are recognized as refund liabilities and
+presented as a decrease in revenues uniformly over the term of the
+contract. As a rule, no warranties are granted in the Core Business.
+Warranties are only granted in the "Build & Sell" activities.
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+Revenues are generally recognized when E.ON fulfills its performance
+obligation by transferring a promised good or service to a customer.
+An asset is deemed to be transferred when the customer obtains
+control of the asset. The majority of the E.ON Group's revenues are
+recognized over time because customers use these services when
+they are provided. For all such revenues, progress is measured
+using output-based methods. Progress is generally measured on a
+straight-line basis with variable charges allocated to specific per-
+formance components. The methods used appropriately reflect the
+pattern of transfer of goods to customers or provision of services
+for customers. The relatively subordinate point-in-time revenue
+recognition occurs primarily in the "Build & Sell" segment and for
+so-called linear products, where a fixed amount of energy is pro-
+vided to commercial customers at a specific point in time. Revenue
+is recognized when control is transferred to the customer, which
+means that no significant discretionary decisions are required. Rev-
+enues from the sale of goods and services are measured using the
+transaction prices allocated to these goods and services. They
+reflect the value of the volume supplied, including an estimated
+value of the volume supplied to customers between the date of the
+last invoice and the end of the period. Monthly advance payments
+for B2C customers are generally determined on the basis of histori-
+cal consumption data, taking into account current temperature
+effects, and peak payments are settled at the end of the settlement
+E.ON Annual Report 2021
+Electricity and energy taxes are levied on electricity and natural gas
+delivered to retail customers and are calculated on the basis of a
+fixed tax rate per kilowatt-hour ("kWh"). This rate varies between
+different classes of customers. Electricity and energy taxes payable
+are deducted from sales revenues on the face of the income state-
+ment if those taxes are levied upon delivery of energy to the retail
+Electricity and Energy Taxes
+Dividend income is recognized when the right to receive the distri-
+bution payment arises.
+c) Dividend Income
+Interest income is recognized pro rata using the effective interest
+method.
+b) Interest Income
+customer.
+SEK
+Swedish krona
+4.92
+0.86
+0.90
+0.84
+GBP
+British pound
+2020
+Danish krone
+2021
+2021
+Code
+ISO-
+€1, rate at
+year-end
+€1, annual
+average rate
+E.ON Annual Report 2021
+2020
+DKK
+7.44
+7.44
+4.87
+4.95
+RON
+Romanian leu
+4.57
+4.56
+4.60
+PLN
+Polish złoty
+10.16
+10.47
+9.99
+NOK
+Norwegian krone
+7.44
+Consolidated Financial Statements 174
+→ Notes
+Earnings per Share
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary shares
+outstanding during the relevant period. At E.ON, the computation
+of diluted earnings per share is identical to that of basic earnings per
+share because E.ON SE has issued no potentially dilutive ordinary
+shares.
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 176
+Back
+↑
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Search
+III
+E.ON Annual Report 2021
+Government grants for costs are posted as income over the period
+in which the costs are incurred.
+Government grants are recognized at fair value if the Group satisfies
+the necessary conditions for receipt of the grant and if it is highly
+probable that the grant will be issued.
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are recog-
+nized in income on a straight-line basis over the associated asset's
+expected useful life.
+Government Grants
+Contents
+Leasing
+Lease agreements are accounted for in accordance with IFRS 16,
+"Leases" ("IFRS 16"). A lease is an agreement that conveys the right
+to use an identified asset for a specified period in exchange for con-
+sideration. E.ON is party to some agreements in which it is the lessor
+and to others in which it is the lessee.
+E.ON as Lessee
+Contents
+E.ON Annual Report 2021
+Unrealized gains and losses from financial assets measured at fair
+value through other comprehensive income (FVOCI), net of related
+deferred taxes, are reported as a component of equity (other com-
+prehensive income) until realized. Realized gains and losses are
+determined by analyzing each transaction individually.
+A financial asset is measured at fair value through other comprehen-
+sive income (FVOCI) if it is used both to collect contractual cash flows
+and for sales purposes and the cash flows of the financial asset
+consist exclusively of interest and principal payments.
+If a financial asset is held for the purpose of collecting contractual
+cash flows and the cash flows of the financial asset represent
+exclusively interest and principal payments, then the financial asset
+is measured at amortized cost (AmC).
+Financial assets are classified as financial assets measured at amor-
+tized cost (AmC), financial assets measured at fair value through
+other comprehensive income (FVOCI) and financial assets measured
+at fair value through profit and loss (FVPL) based on the business
+model and the characteristics of the cash flows.
+Non-derivative financial instruments are measured in accordance
+with IFRS 9, "Financial Instruments" ("IFRS 9"). They are recognized
+at fair value, including transaction costs, on the settlement date
+when acquired, provided they are not recognized at fair value through
+profit and loss.
+Non-derivative Financial Instruments
+Financial Instruments
+Lease transactions in which E.ON acts as lessor are classified as
+operating or finance leases depending on the distribution of risks
+and rewards. If a lease is classified as an operating lease, E.ON rec-
+ognizes the identified asset and recognizes the lease payments as
+other operating income on a straight-line basis over the lease term.
+For finance leases, the identified asset is derecognized and a receiv-
+able is recognized in the amount of the net investment value. Pay-
+ments made by the lessee are treated as a reduction of the lease
+receivable or interest income. The income from such arrangements
+is recognized over the term of the lease using the effective interest
+method. Subleases are classified based on the right-of-use asset
+under the head lease.
+E.ON as Lessor
+E.ON ensures its operational flexibility when concluding leasing
+agreements through the use of extension and termination options.
+In determining the lease term, E.ON considers all facts and circum-
+stances that provide an economic incentive to exercise existing
+options. The lease term therefore also includes periods covered by
+extension options if it is assumed with reasonable certainty that
+they will be exercised.
+amount of the initial direct costs, as well as expected costs for asset
+retirement obligations; prepayments made are included and lease
+incentives received are deducted from the initial recognition amount.
+A right-of-use asset is subsequently measured at amortized cost.
+Depreciation is carried out on a straight-line basis over the shorter
+of the lease term or the useful life of the identified asset. An impair-
+ment test is carried out in accordance with IAS 36 if events or
+changed circumstances indicate an impairment.
+A lease liability is recognized in the amount of the present value of
+the existing payment obligation. Where an arrangement provides
+for payments for lease components and non-lease components, the
+payments are not separated using the practical expedient under
+IFRS 16.15 (with the exception of real estate leases); the lease liability
+is measured taking into account the total amount of the payments.
+Present value is determined by discounting with an incremental
+borrowing rate that is equivalent in terms of risk and term if the
+implicit interest rate cannot be determined. The liability is subse-
+quently measured using the effective interest method. A right-of-
+use asset corresponding with the lease liability is recognized in
+the amount of the present value of the lease payments. The initial
+recognition amount of the right-of-use asset is increased by the
+Transactions in which E.ON acts as a lessee are accounted for on
+the basis of the right-of-use model. The recognition exemption of
+IFRS 16.5 is used for low-value leases and for agreements with a
+lease term of less than twelve months (short-term leases). Accord-
+ingly, there is no recognition of the right-of-use asset and the lease
+liability. Instead, the payments are recognized on a straight-line
+basis as an expense. In line with internal management practice,
+intragroup leases are recognized as current expenses in the segment
+reporting.
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+until its entry into service are capitalized and subsequently amor-
+tized alongside the related asset. In the case of a specific financing
+arrangement, the respective borrowing costs incurred for that par-
+ticular arrangement during the period are used. For non-specific
+financing arrangements, a financing rate uniform within the Group
+of 2.79 percent was applied for 2021 (2020: 3.11 percent). Other
+borrowing costs are expensed.
+↑
+Borrowing Costs
+Subsequent costs arising, for example, from additional or replace-
+ment capital expenditure are only recognized as part of the acquisi-
+tion or production cost of the asset, or else—if relevant-recognized
+as a separate asset if it is probable that the Group will receive a
+future economic benefit and the cost can be determined reliably.
+Contents
+E.ON Annual Report 2021
+Intangible assets not subject to amortization or intangible assets
+whose use has not yet started are not amortized. An impairment
+test is carried out at least once a year as well as whenever there are
+indications of impairment, either for the individual asset or at the
+level of the cash-generating unit. The useful life of an intangible
+asset with an indefinite life is tested annually to determine whether
+the indefinite life assumption continues to be justified.
+Internally generated intangible assets subject to amortization are
+related to software and are recognized as development costs. Intan-
+gible assets subject to amortization are generally amortized using
+the straight-line method over their expected useful lives. The useful
+lives of customer relationships and similar assets range between
+2 and 50 years, and between 3 and 50 years for concessions, indus-
+trial property rights, licenses and similar rights, unless depreciation
+based on use reflects an appropriate level of depletion. This latter
+category includes software in particular. Useful lives and amortiza-
+tion methods are subject to annual verification. Intangible assets
+subject to amortization are tested for impairment whenever events or
+changes in circumstances indicate that such assets may be impaired.
+IAS 38, "Intangible Assets," ("IAS 38") requires that intangible assets
+be amortized over their expected useful lives unless their lives are
+considered to be indefinite. Factors such as typical product life
+cycles and legal or similar limits on use are taken into account in the
+classification.
+Intangible Assets
+Search
+Impairment charges on the goodwill of a cash-generating unit and
+reported in the income statement under "Depreciation, amortization
+and impairment charges" may not be reversed in subsequent
+reporting periods.
+If the carrying amount exceeds the recoverable amount, the good-
+will allocated to that cash-generating unit is adjusted in the amount
+of this difference.
+In a first step, E.ON determines the recoverable amount of a cash-
+generating unit on the basis of the fair value (less costs to sell)
+using generally accepted valuation procedures. This is based on the
+medium-term planning data of the respective cash-generating unit.
+Valuation is performed using the discounted cash flow method
+unless market transactions or valuations prepared by third parties
+for comparable assets which are higher-level in the fair value hier-
+archy according to IFRS 13 are available. If needed, a calculation of
+value in use is also performed.
+cash-generating units but instead can only be allocated to groups
+of cash-generating units, the lowest level within the unit at which
+the goodwill is monitored for internal management purposes then
+includes several cash-generating units to which the goodwill relates
+but to which it cannot be allocated individually. Goodwill impairment
+testing is performed in euro, while the underlying goodwill is
+always carried in the functional currency.
+Newly created goodwill is allocated to those cash-generating units
+expected to benefit from the respective business combination. The
+cash-generating units to which goodwill is allocated are generally
+equivalent to the operating segments, since goodwill is reported,
+and considered in performance metrics for controlling, only at that
+level. If goodwill cannot be allocated arbitrarily to individual
+Goodwill is not amortized, but rather tested for impairment at the
+cash-generating unit level on at least an annual basis. The term
+cash-generating unit also always includes groups of cash-generating
+units and is referred to in simplified form as a cash-generating unit.
+Goodwill must also be tested for impairment at the level of individ-
+ual cash-generating units if events or changes in circumstances
+indicate that the recoverable amount of a particular cash-generating
+unit might be impaired. Impairment tests must also be performed
+between these annual tests if events or changes in circumstances
+indicate that the carrying amount of the respective cash-generating
+unit might not be recoverable.
+Goodwill and Intangible Assets
+Goodwill
+E.ON performs the annual testing of goodwill for impairment at the
+cash-generating unit level in the fourth quarter of each fiscal year.
+↑
+Back
+→ Consolidated Balance Sheets
+Property, plant and equipment are tested for impairment whenever
+events or changes in circumstances indicate that an asset may be
+impaired. In such a case, property, plant and equipment are tested
+for impairment according to the principles prescribed for intangible
+assets in IAS 36. If the reasons for the impairment losses previously
+recognized under depreciation, amortization and impairment charges
+no longer exist, such impairment losses are reversed and recognized
+in income. Such reversal shall not cause the carrying amount to
+exceed the amount that would have resulted had no impairment
+taken place during the preceding periods.
+5 to 60 years
+2 to 80 years
+2 to 30 years
+Technical equipment, plant and machinery
+Other equipment, fixtures, furniture and office equipment
+Buildings
+Useful Lives of Property, Plant and Equipment
+suitable in certain exceptional cases. Useful lives are regularly tested
+for appropriateness and the underlying assumptions and estimates
+are updated, for example, in view of technical, economic or legal
+circumstances. The useful lives of the most significant asset classes
+of material property, plant and equipment are presented below:
+Property, plant and equipment are initially measured at acquisition
+or production cost, including decommissioning or restoration cost
+that must be capitalized, and are depreciated over the expected
+useful lives of the components, generally using the straight-line
+method, unless a different method of depreciation is deemed more
+Property, Plant and Equipment
+Under IFRS, expenditure on research is expensed as incurred, while
+costs incurred during the development phase of new products,
+services and technologies are to be recognized as assets when the
+general criteria for recognition specified in IAS 38 are present. In
+the 2020 and 2021 fiscal years, E.ON capitalized costs for internally
+generated software and other technologies in this context.
+Research and Development Costs
+See Note 15 → for additional information about goodwill and intan-
+gible assets.
+Both assets with definite and indefinite useful lives are impaired if
+the recoverable amount-the higher of fair value less costs to sell
+and value in use-is lower than the carrying amount. If the reasons
+for the impairment losses previously recognized under depreciation,
+amortization and impairment charges no longer apply, these assets
+are written up to a maximum of the value that would have resulted
+if no impairment losses had been recognized during the preceding
+periods, taking into account scheduled depreciation.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 175
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Included in gains and losses from the remeasurements of the net
+defined benefit liability or asset are actuarial gains and losses that
+may arise especially from differences between estimated and
+actual variations in underlying assumptions about demographic and
+financial variables. Additionally included is the difference between
+the actual return on plan assets and the expected interest income
+on plan assets included in the net interest result. Remeasurements
+Consolidated Financial Statements 187
+At the beginning of October 2019, E.ON acquired the 27-percent stake
+held by EnBW in ELMŰ Nyrt. ("ELMŰ”) and ÉMÁSZ Nyrt. ("ÉMÁSZ”).
+A framework agreement was subsequently signed between E.ON,
+MVM Magyar Villamos Művek Zrt. (a shareholder of ELMŰ and
+ÉMÁSZ) ("MVM") and Opus Global Nyrt. ("Opus"). Under this agree-
+ment, E.ON will be able to create a balanced and optimized portfolio
+in Hungary, which will also facilitate the rapid integration of innogy's
+Hungary activities.
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 182
+Contents
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+If onerous contracts exist in which the unavoidable costs of meeting
+a contractual obligation exceed the economic benefits expected to
+be received under the contract, provisions are established for losses
+from pending transactions. Such provisions are recognized at the
+lower of the excess obligation upon performance under the contract
+and any potential penalties or compensation arising in the event of
+non-performance. Obligations under an open contractual relationship
+are determined from a customer perspective.
+Provisions for open sales transactions must also be recognized if
+these transactions are subject to the own-use-exemption under
+IFRS 9 and if they are partially offset by offsetting transactions that
+are accounted for as derivative financial instruments and are there-
+fore measured at current market prices. As a result, provisions are
+recognized under IAS 37 for transactions actually subject to the
+own-use option, for the purpose of which the positive market values
+of the procurement portfolio are included in the calculation of the
+imputed performance costs. The book structure adopted under IFRS 9
+therefore affects the accounting treatment of the corresponding
+provisions.
+Contingent liabilities are possible obligations toward third parties
+arising from past events that are not wholly within the control of the
+entity, or else present obligations toward third parties arising from
+past events in which an outflow of resources embodying economic
+benefits is not probable or where the amount of the obligation cannot
+be measured with sufficient reliability. Contingent liabilities were
+not recognized on the balance sheet.
+A more detailed description is not provided for certain contingent
+liabilities and contingent receivables, particularly in connection
+with pending litigation, as this information could influence further
+proceedings.
+Where necessary, provisions for restructuring costs are recognized
+at the present value of the future outflows of resources. Provisions
+are recognized once a detailed restructuring plan has been decided
+on by management and publicly announced or communicated to
+the employees or their representatives. Only those expenses that
+are directly attributable to the restructuring measures are used in
+measuring the amount of the provision. Expenses associated with
+the future operation are not taken into consideration.
+Income Taxes
+→ Notes
+E.ON Annual Report 2021
+No provisions are established for contingent asset retirement obli-
+gations where the type, scope, timing and associated probabilities
+cannot be determined reliably.
+The estimates for nuclear decommissioning provisions are derived
+from studies, cost estimates, legally binding civil agreements and
+legal information. A material element in the estimates are the real
+interest rates applied (the applied discount rate, less the cost
+increase rate). The impact on consolidated net income depends on
+the level of the corresponding adjustment posted to property, plant
+and equipment.
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 181
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+effects are recognized in full in the period in which they occur and
+are not reported within the Consolidated Statements of Income, but
+are instead recognized within the Statements of Recognized Income
+and Expenses as part of equity.
+The employer service cost representing the additional benefits that
+employees earned under the benefit plan during the fiscal year is
+reported under personnel costs; the net interest on the net liability
+or asset from defined benefit pension plans determined based on
+the discount rate applicable at the start of the fiscal year is reported
+under financial results.
+Past service cost, as well as gains and losses from settlements, are
+fully recognized in the income statement in the period in which the
+underlying plan amendment, curtailment or settlement takes place.
+They are reported under personnel costs.
+The amount reported on the balance sheet represents the present
+value of the defined benefit obligations reduced by the fair value of
+plan assets. If a net asset position arises from this calculation, the
+amount is limited to the present value of available refunds and the
+reduction in future contributions and to the benefit from prepay-
+ments of minimum funding requirements. Such an asset position is
+recognized as an operating receivable.
+Payments for defined contribution pension plans are expensed as
+incurred and reported under personnel costs. Contributions to state
+pension plans are treated like payments for defined contribution
+pension plans to the extent that the obligations under these pension
+plans generally correspond to those under defined contribution
+pension plans.
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+In accordance with IAS 37, "Provisions, Contingent Liabilities and
+Contingent Assets," ("IAS 37") provisions are recognized when E.ON
+has a legal or constructive present obligation towards third parties
+as a result of a past event, it is probable that E.ON will be required
+to settle the obligation, and a reliable estimate can be made of the
+amount of the obligation. The provision is recognized at the expected
+settlement amount. Long-term obligations are reported as liabilities
+at the present value of their expected settlement amounts if the
+interest rate effect (the difference between present value and repay-
+ment amount) resulting from discounting is material; future cost
+increases that are foreseeable and likely to occur on the balance
+sheet date at year-end must also be included in the measurement.
+Long-term obligations are generally discounted at the market inter-
+est rate applicable as of the respective balance sheet date, provided
+that it is not negative. The accretion amounts and the effects of
+changes in interest rates are generally presented as part of financial
+results. A reimbursement related to the provision that is virtually
+certain to be collected is capitalized as a separate asset. No offsetting
+within provisions is permitted. Advance payments remitted are
+deducted from the provisions.
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period of
+their occurrence at their discounted settlement amounts, provided
+that the obligation can be reliably estimated, whereby no negative
+discount rates are applied. The carrying amounts of the respective
+property, plant and equipment are increased by the same amounts.
+In subsequent periods, capitalized asset retirement costs are amor-
+tized over the expected remaining useful lives of the assets, and the
+provision is accreted to its present value on an annual basis. Advance
+payments remitted are deducted from the provisions.
+Changes in estimates arise in particular from deviations from origi-
+nal cost estimates, from changes to the maturity or the scope of the
+relevant obligation, and also as a result of the regular adjustment of
+the discount rate to current market interest rates. The adjustment
+of provisions for the decommissioning and restoration of property,
+plant and equipment for changes to estimates is generally recognized
+by way of a corresponding adjustment to these assets, with no
+effect on income. As the property, plant and equipment concerned
+have, however, frequently already been fully depreciated, changes
+to estimates are primarily recognized within the income statement.
+Under IAS 12, "Income Taxes," ("IAS 12") deferred taxes are recognized
+on temporary differences arising between the carrying amounts of
+assets and liabilities on the balance sheet and their tax bases (balance
+sheet liability method). Deferred taxes are recognized for temporary
+differences that will result in taxable or deductible amounts when
+taxable income is calculated for future periods, unless those differ-
+ences are the result of the initial recognition of an asset or liability
+in a transaction other than a business combination that, at the time
+of the transaction, affects neither accounting nor taxable profit/loss
+(initial differences). Uncertain tax positions are recognized at their
+most likely value. IAS 12 further requires that deferred tax assets be
+recognized for unused tax loss carryforwards and unused tax credits.
+Deferred tax assets are recognized to the extent that it is probable
+that taxable profit will be available against which the deductible
+temporary differences and unused tax losses can be utilized. Each
+of the corporate entities is assessed individually with regard to the
+probability of a positive tax result in future years. The planning hori-
+zon is basically three to five years in this context. Any existing history
+of losses is incorporated in this assessment. For those tax assets to
+which these assumptions do not apply, the value of the deferred tax
+assets is reduced.
+Deferred tax liabilities caused by temporary differences associated
+with investments in affiliated and associated companies are recog-
+nized unless the timing of the reversal of such temporary differences
+can be controlled within the Group and it is probable that, owing to
+this control, the differences will in fact not be reversed in the fore-
+seeable future.
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable for tax-
+able income in the years in which temporary differences are expected
+to be recovered or settled. The effect on deferred tax assets and lia-
+bilities of changes in tax rates and tax law is generally recognized in
+net income. Equity is adjusted for deferred taxes that had previously
+been recognized directly in equity. The change is generally recognized
+in the period in which the material legislative process is completed.
+Critical Accounting Estimates and Assumptions;
+Critical Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements requires
+management to make estimates and assumptions that may both
+influence the application of accounting principles within the Group
+and affect the measurement and presentation of reported figures.
+Estimates are based on past experience and on current knowledge
+obtained on the transactions to be reported. Actual amounts may
+differ from these estimates.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis and are adjusted as necessary in the periods in which
+they were recognized. Estimates are particularly necessary for the
+measurement of the value of property, plant and equipment and of
+intangible assets, specifically in connection with purchase price
+allocations, the recognition and measurement of deferred tax assets,
+the accounting treatment of provisions for pensions and miscella-
+neous provisions, for impairment testing in accordance with IAS 36,
+as well as for the determination of the fair value of certain financial
+instruments as well as the application of IFRS 15. Estimates are also
+factored in when applying IFRS 16, namely in connection with the
+determination of lease terms and the calculation of the discount rate.
+The application of accounting policies requires judgments to be made
+that may affect the amounts recognized in the financial statements.
+Judgments are relevant, for example, when assessing whether an
+item is to be classified in accordance with IFRS 5. Here, management
+assesses whether a disposal is considered highly probable. Further
+judgments may be necessary in assessing whether E.ON controls,
+jointly controls with other investors, or can significantly influence an
+entity. Specifically, management assesses here what the significant
+activities of the company are, i.e., which activities have a material
+impact on the returns of the investee. The list of shareholdings (see
+Note 38 ) provides information on the form of inclusion in the
+consolidated financial statements of certain investees whose share
+of voting rights indicates a different form of inclusion.
+The underlying principles used for estimates in additional relevant
+topics are outlined in the respective sections.
+In addition, estimates and judgments continue to be subject to
+increased uncertainty due to the currently unpredictable global
+impact of the Covid-19 pandemic. The actual amounts may differ
+from the estimates and judgments made; changes may have a
+material impact on the financial statements. When the estimates
+and judgments were updated, all available information on expected
+economic developments and country-specific government measures
+was taken into account on the reporting date. However, since the
+Covid-19 pandemic is continuously evolving, it is difficult to predict
+its duration and the extent of its impact on assets, liabilities, earn-
+ings and cash flows. A quantitative assessment of the impact of the
+Covid-19 pandemic in the E.ON Group based on available knowledge
+and best information available is presented in Note 3 →.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Statement of Income
+Consolidated Financial Statements 184
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The Consolidated Statements of Income are classified using the
+nature of expense method, which is also applied for internal
+purposes.
+Back
+In accordance with IAS 1, "Presentation of Financial Statements,” the
+Consolidated Balance Sheets have been prepared using a classified
+balance sheet structure. Assets that will be realized within twelve
+months of the reporting date, as well as liabilities that are due to be
+settled within one year of the reporting date are generally classified
+as current.
+In accordance with the so-called management approach required by
+IFRS 8, "Operating Segments," the internal reporting organization
+used by management for making decisions on operating matters is
+used to identify the Company's reportable segments. The internal
+performance measure used as the segment result is EBIT adjusted
+to exclude certain non-operating effects (see Note 35 →). Transac-
+tions between the reportable segments are recorded at arm's length
+transfer prices.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 183
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+To the extent that they are material, income taxes for transaction
+costs of an equity transaction are recognized directly in equity
+under IAS 12.
+Note 11 > shows the major temporary differences.
+Consolidated Statements of Cash Flows
+In accordance with IAS 7, "Cash Flow Statements," the Consolidated
+Statements of Cash Flows are classified in cash flows from operating,
+investing and financing activities.
+Segment Information
+Structure of the Consolidated Balance Sheets and Statements of
+Income
+→ Consolidated Balance Sheets
+↑
+Contents
+Contents
+E.ON Annual Report 2021
+The largest change in terms of amount resulted from the fact that the
+loan receivable from RWE to innogy SE in the amount of €0.7 billion,
+which was acquired by E.ON, is no longer reported separately as in
+the 2019 Annual Report, but instead is presented as part of net
+assets. This is reflected in the sharp decline in current financial liabil-
+ities. The value of financial liabilities was also reduced by the fact
+The purchase-price allocation was finalized in the third quarter of
+2020, which is within the adjustment period of up to twelve months
+from the completion of the first-time consolidation granted under
+IFRS 3.45.
+On March 12, 2018, E.ON had made an offer to the remaining share-
+holders of innogy SE to acquire all registered no-par-value shares of
+innogy SE in a voluntary public takeover offer. Subsequently, a further
+9.41 percent of innogy shares were tendered for a total consideration
+of €37.59 per share (including an agreed dividend and share price
+adjustment).
+its Renewables business and the minority interests held by E.ON
+subsidiary PreussenElektra in the Lippe-Ems GmbH and Gundrem-
+mingen GmbH nuclear power plants operated by RWE. E.ON and
+RWE had also agreed on a compensatory payment of €1.5 billion
+from RWE to E.ON. This payment was offset against E.ON's payment
+obligations and indemnification assets with respect to RWE as part
+of a shortened payment procedure.
+Search
+As consideration for innogy's network and sales business, RWE
+was granted a 16.7-percent shareholding in E.ON SE by way of a
+20-percent capital increase against contribution in kind from existing
+authorized capital. RWE has notified E.ON that it has since reduced
+its stake to 15 percent. E.ON had also transferred to RWE most of
+fiscal year. Unless otherwise noted in individual cases, the adjust-
+ments to disclosures for the 2019 fiscal year marked in the Notes
+to the Consolidated Financial Statements result from the matters
+described above in connection with the innogy integration.
+Changes in the measurement of assets and liabilities acquired as
+part of the innogy merger due to new knowledge acquired up to
+September 17, 2020, and thus within the one-year measurement
+period, were made retroactively to the acquisition date. Corre-
+sponding adjustments for the 2019 financial year or the reporting
+date of December 31, 2019, in the balance sheet, income state-
+ment, statement of recognized income and expenses, and state-
+ment of changes in equity also required adjustments to the disclo-
+sures affected by this in the Notes to the Consolidated Financial
+Statements. In addition, the innogy integration also involved a stan-
+dardization of processes for collecting data relevant to the Notes to
+the Consolidated Financial Statements and of procedures for allo-
+cating data to the Notes to the Consolidated Financial Statements;
+the knowledge gained in the process was taken into account by
+making appropriate adjustments to the disclosures for the 2019
+Finalization of Accounting for the innogy Acquisition
+Accounting for the innogy acquisition was finalized in the third
+quarter of 2020.
+Some of the material transactions presented for 2021 originated in
+2020 as described above. In addition to these transactions, espe-
+cially the following material business combinations, disposals and
+discontinued operations took place in 2020.
+Significant Transactions in 2020
+→ Notes
+In March 2018, E.ON had concluded an agreement with RWE to
+acquire the network and sales business of innogy. Within this
+framework, the 76.8-percent stake in innogy SE held by RWE was
+transferred from RWE to E.ON following approval by the antitrust
+authorities. The entire Renewables and Gas Storage business of
+innogy as well as the 37.9-percent stake that innogy holds in Aus-
+trian energy supplier KELAG will remain within the RWE Group.
+The acquisition was concluded through a comprehensive transfer
+of business activities following the approval of the EU Commission
+and the competent antitrust authorities on September 18, 2019.
+The approval was granted subject to the conditions of the EU Com-
+mission, including the sale of various business activities of E.ON
+and innogy. All conditions were fulfilled in the course of 2020
+(please refer to the section below entitled "Conditions Imposed by
+the EU Commission Arising from the innogy Takeover Fulfilled").
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+E.ON Annual Report 2021
+An additional condition imposed by the EU Commission included
+the sale of the German heating electricity business of E.ON Energie
+Deutschland. The contract portfolio disposed of includes all special
+contracts with customers for the supply of heating electricity and
+all special contracts for the supply of household electricity if house-
+hold electricity is also purchased at the same point of consumption
+and from the same contract partner for heating electricity with sep-
+arate metering. In anticipation of the disposal, the contract portfolio
+was spun off into two newly founded companies, E.ON Heizstrom
+Nord GmbH ("EHN") and E.ON Heizstrom Süd GmbH ("EHS"). Because
+of the obligation to dispose of these activities, E.ON has already
+reported its heating electricity business as a disposal group pursuant
+to IFRS 5 with effect from September 30, 2019. The sale of EHN
+and EHS was completed on April 28, 2020.
+The disposed assets and liabilities related to intangible assets
+(€306 million), rights of use (€9 million), property, plant and equip-
+ment (€123 million), other assets (€512 million), provisions (€1 million)
+and liabilities (€273 million). The deconsolidation gains also include
+the recognition in income of the negative currency translation effects
+previously reported in other comprehensive income (-€41.8 million).
+In fiscal year 2020, E.ON generated revenues of €57 million
+(2019: €19 million), no interest income (2019: €5 million), interest
+expenses of €7 million (2019: €8 million), and other income/
+expenses of €41 million (2019: -€2 million), with the fully consoli-
+dated companies to be transferred.
+As part of the acquisition of innogy, the EU Commission has, among
+other things, imposed conditions requiring the disposal of certain
+E.ON and innogy businesses in Eastern Europe. To fulfill these con-
+ditions, E.ON and the MVM Group signed an agreement on July 10,
+2020, to sell innogy Česká republika a.s. and thereby the entire Czech
+electricity and gas business of innogy in the retail segment. E.ON
+had already reported these activities of innogy in the Czech Republic
+as discontinued operations under IFRS 5 as of September 30, 2019.
+No additional impairment loss was recognized from the comparison
+of the carrying amounts of these discontinued operations and the
+fair values less costs to sell as of the balance sheet date. The trans-
+action was approved by the European Commission at the end of
+October and subsequently completed on October 30, 2020. The
+parties have agreed not to disclose the purchase price.
+Conditions Imposed by the EU Commission Arising from the
+innogy Takeover Fulfilled
+has confirmed in accordance with the requirements of German
+stock corporation law that the fixed cash compensation of €42.82
+per share is appropriate.
+By the acquisition date, E.ON had also acquired an additional
+3.79 percent of innogy shares on the market. The extraordinary
+general shareholders meeting of innogy SE in Essen on March 4,
+2020, finally approved the exclusion of the minority shareholders of
+innogy SE. With the entry in the commercial register on June 2, 2020,
+the merger of innogy SE into E.ON Verwaltungs SE (subsequently
+renamed innogy SE) became effective. The fixed cash settlement
+was paid out shortly afterwards. A court-appointed expert auditor
+The difference in the consideration transferred is due to subsequent
+purchase-price adjustments. The goodwill results primarily from
+the strategic reorientation of the customer business and the energy
+networks as well as from the expected synergies from the integra-
+tion of innogy SE into the Group.
+that a larger portion than originally assumed was attributable to
+innogy's renewables business. The change in rights of use is the
+result of the retrospective adjustment to the underlying interest
+rate for selected leases. This is accompanied by corresponding
+adjustments, in particular to depreciation and amortization and
+interest expense. Recent information on the remaining useful lives
+of acquired network assets has led to adjustments in the carrying
+amounts of property, plant and equipment. The reduction in trade
+accounts receivable is mainly due to receivables in the U.K. and is
+mainly related to an increase in expected credit losses.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 190
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 189
+→ Consolidated Balance Sheets
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Dutch utility Essent NV and Belgian energy company Luminus signed
+an agreement in February 2021 to sell Essent's Belgian distribution
+business. Essent currently supplies more than 500,000 electricity
+and gas customers in Belgium. Essent is a wholly owned subsidiary
+in the E.ON Group, Luminus is a 68.6 percent subsidiary of EdF S.A.,
+and the remaining shares are held by municipalities and local author-
+ities. The Belgian distribution business in the E.ON Group, which
+was allocated to the Customer Solutions Netherlands/Belgium seg-
+ment, was then reported as a disposal group under IFRS 5 in the
+first quarter of 2021 and an impairment loss of €7 million was rec-
+ognized on the lower fair value less costs to sell. After the transaction
+was completed on May 3, 2021, the Belgian distribution business
+was deconsolidated in Q2 2021: the gain on deconsolidation
+amounted to €12 million.
+Disposal of the Belgian Distribution Business
+classification as a disposal group (see also Note 15 >). This impair-
+ment is due to the fact that the fair value less costs of disposal was
+below the carrying amount basis. The impairment loss was allocated
+first to the carrying amount of the goodwill allocated to the disposal
+group. The determination of the fair value less costs of disposal was
+based on the discounted cash flow method (level 3 of the measure-
+ment hierarchy according to IFRS 13). The significant non-observable
+inputs used in the fair value measurement are generally consistent
+with those used in the impairment tests. For more detailed qualita-
+tive and quantitative information on these parameters, please refer
+to Note 15.
+E.ON is in negotiations with the Slovak state on the continued com-
+bining of the businesses of Západoslovenská energetika a.s. ("ZSE")
+and Východoslovenská energetika Holding a.s. ("VSEH"). E.ON has
+a 49-percent stake in each of the two companies and the Slovakian
+state has a 51-percent stake. VSEH, in which E.ON has control, is
+fully consolidated and is allocated to the Energy Networks East-Central
+Europe/Turkey and Customer Solutions Other segments. The trans-
+action is expected to be successfully concluded within the next
+twelve months. As a result of the realization of the planned transac-
+tion, the business activities of VSEH, which had previously been
+fully consolidated, would in future be accounted for in the Consoli-
+dated Financial Statements using the equity method. Accordingly,
+VSEH is presented as a disposal group in accordance with IFRS 5 as
+of December 31, 2021. The assets classified as held for sale (before
+minority interest deduction) amount to €1,054 million, of which
+€883 million are non-current assets, €162 million current assets
+and €9 million in deferred tax assets. Goodwill of €508 million was
+also allocated. The corresponding liabilities (before minority inter-
+est deduction) amount to €648 million, of which €276 million in
+financial liabilities, €218 million in operating liabilities, €40 million
+in provisions and €114 million in deferred tax liabilities. An impair-
+ment of €298 million was recognized as a consequence of the
+Planned Reorganization of the Businesses of the Slovakian Units
+ZSE and VSEH
+€136 million included in the Energy Networks Germany segment
+has since been reported separately under "Assets held for sale" in
+the balance sheet. No impairment loss was recognized from the
+comparison of the carrying amount with its fair value less costs to
+sell. More information on the future network cooperation model is
+provided in Note 33 →.
+Pro Rata Disposal of Stromnetzgesellschaft Essen GmbH & Co. KG
+Westnetz GmbH sold 50 percent of the limited partnership interests
+in the newly established Stromnetzgesellschaft Essen GmbH & Co.
+KG to Essener Versorgungs- und Verkehrsgesellschaft mbH (EVV),
+with effect from January 1, 2022. Technical equipment will be
+transferred to this company, also with effect from January 1, 2022.
+After completion of the transaction, this equipment will be leased
+back from E.ON, so that E.ON will continue to operate the network.
+In Q3 2021, the criteria of IFRS 5 for reporting the assets to be con-
+tributed as held for sale were met for the first time. As a result, the
+corresponding property, plant and equipment in the amount of
+plans, Westenergie and RheinEnergie will merge shareholdings in
+individual municipal utilities into rhenag Rheinische Energie Aktien-
+gesellschaft (rhenag), a subsidiary that is also fully consolidated in
+the E.ON Group. rhenag continues to be fully consolidated by West-
+energie. Westenergie and RheinEnergie have also agreed to con-
+tinue to optimize their operational cooperation with regard to plant
+management, leases and service agreements. The implementation
+of the steps planned in the consortium agreement are subject to
+the approval of the antitrust authorities and the Cologne district
+government. This transaction is expected to close in the mid-2022.
+Within the framework of the cooperative arrangement, Westenergie
+will transfer an additional 20 percent of the shares of Stadtwerke
+Duisburg, which is included in the consolidated financial statements
+as an associated company, to Rhein Energie, which will increase its
+share in RheinEnergie from 20 to 24.9 percent. The shareholding in
+Stadtwerke Duisburg is allocated to the Energy Networks Germany
+segment; since Q2 2021, the investment has been reported as an
+asset held for sale under IFRS 5 in the amount of €154 million. There
+was no effect on net income as a result of the reclassification.
+→ Notes
+Consolidated Financial Statements 188
+Search
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Notes
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Deconsolidation results are generally allocated to other operating
+income/expense.
+E.ON Energilösningar AB concluded an agreement with the sub-
+sidiary St1 Sverige AB of the energy company St1 Nordic Oy for the
+sale of 100 percent of the shares in E.ON Biofor Sverige AB. E.ON
+Biofor Sverige employs 35 biogas experts and is geographically
+located in the urban areas of southern Sweden and Stockholm. The
+shareholding in E.ON Biofor Sverige AB was allocated to the Cus-
+tomer Solutions Other segment. The transaction was completed upon
+satisfaction of customary closing conditions and regulatory approval
+on June 30, 2021. The parties agreed not to disclose the purchase
+price. The gain on deconsolidation amounted to €28 million.
+Disposal of the Swedish Biogas Business
+As of December 31, 2021, the transaction is expected to be success-
+fully concluded within the next twelve months. As a result, EÁS and
+the universal service provider business respectively, which are allo-
+cated to the Customer Solutions Other segment in the E.ON Group,
+are reported as a disposal group in accordance with IFRS 5 as of
+December 31, 2021. In total, assets totaling €63 million, primarily
+receivables, and liabilities totaling €53 million, primarily operating
+liabilities and provisions, were reclassified to the disposal group.
+The other comprehensive income relating to the disposal group to
+be realized upon actual subsequent disposal totaled €10 million as
+at December 31, 2021.
+Disposal of the Universal Service Provider Business in Hungary
+To further optimize its portfolio in Hungary, on February 23, 2022,
+E.ON Hungária Zrt. signed an agreement with MVM Zrt. to sell
+100 percent of the shares in E.ON Áramszolgáltató Kft. ("EÁS").
+EÁS holds a regional universal service provider license and supplies
+electricity to customers in certain regions in Hungary on this basis.
+E.ON ETI were deconsolidated in Q3 2021. Until that date, a net
+gain of almost €6 million (E.ON ETI) and an expense of €10 million
+(ÉMÁSZ DSO) were recognized in the 2021 fiscal year as a result
+of the comparison of the fair value less costs of disposal with the
+carrying amount. E.ON ETI disposed of fixed assets of €318 million,
+current assets of €33 million and deferred tax assets of €10 million.
+Disposed liabilities amounted to €154 million, of which €131 million
+were operating liabilities. The loss on deconsolidation amounted to
+€15 million. At the ÉMÁSZ distribution system operator, disposed
+fixed assets amounted to €308 million and current assets to €46 mil-
+lion, with deferred tax assets of €7 million. Disposed liabilities
+amounted to €117 million, of which €94 million were operating lia-
+bilities. The loss on deconsolidation amounted to €10 million.
+ELMŰ and ÉMÁSZ). In addition, Opus acquired E.ON's E.ON
+Tiszántúli Áramhálózati Zrt. ("E.ON ETI"). Both the ÉMÁSZ distribu-
+tion network operator and E.ON ETI were reported as a disposal
+group in accordance with IFRS 5 as of December 31, 2020; both
+companies belonged to the Energy Networks Hungary operating
+segment. After the transactions were completed on August 31, 2021,
+both the ÉMÁSZ distribution system operator and the business at
+The agreement was fully implemented on December 16, 2021, after
+approval by the competent authorities. After the sales by E.ON,
+MVM holds 100 percent of the ÉMÁSZ distribution network opera-
+tor ÉMÁSZ Hálózati Kft. ("ÉMÁSZ DSO") and a 25-percent stake in
+E.ON Hungária (including the acquired innogy holding companies
+Reorganization of the Hungary Business
+Disposal of the Dutch B2B Distribution Business
+Dutch utilities Essent NV and Eneco NV signed an agreement in
+July 2021 to sell Essent's Dutch B2B distribution business. Essent
+currently supplies electricity and gas to nearly 5,000 B2B customers
+in the Netherlands. Essent is a wholly owned subsidiary in the E.ON
+Group, and Eneco is a wholly owned subsidiary of a consortium of
+Mitsubishi Corporation and Chubu Electric Power. After the trans-
+action was completed on October 1, 2021, the Dutch B2B distri-
+bution business, which was allocated to the Customer Solutions
+Netherlands/Belgium segment, was deconsolidated in Q4 2021:
+the gain on deconsolidation amounted to €13 million.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Standards, Interpretations and Amendments Applicable for the First Time in 2021
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Changes in Equity
+→ Notes
+(3) Impact of the Covid-19 Pandemic
+The consequences of the Covid-19 pandemic continued to impact
+E.ON's businesses. However, the economic consequences of the
+Covid-19 pandemic, which had a negative effect on E.ON's activities
+in the 2020 financial year, have to a large extent dissipated in 2021,
+although the economic impediments that still persist vary from
+region to region and from segment to segment.
+E.ON received no materially significant public support measures
+such as loans, tax relief or compensatory mechanisms. In addition,
+there were no material effects on the employment situation in the
+E.ON Group.
+→ Consolidated Balance Sheets
+Overall, the Covid-19 pandemic did not generate a triggering event
+for the E.ON Group to test goodwill and non-current assets for
+impairment.
+The number of consolidated companies changed as follows in 2021:
+Scope of Consolidation
+Domestic
+Foreign
+Total
+Consolidated companies
+as of January 1, 2020
+Additions
+(4) Scope of Consolidation
+→ Consolidated Statement of Recognized Income and Expenses
+Consolidated Financial Statements 186
+Back
+01/01/2023¹
+No material effect.
+Pending
+01/01/20231
+No material effect.
+Clarification that the initial recognition exemption of IAS 12 does not apply to leases and decommissioning
+obligations. Deferred tax is recognized on the initial recognition of assets and liabilities arising from such
+transactions.
+Pending
+01/01/2023¹
+No material effect.
+¹If not yet endorsed by the EU the date of first-time adoption scheduled by the IASB is assumed to apply.
+2In July 2021, the IASB decided to postpone the date of initial application to no earlier than January 1, 2024, as further adjustments are pending in this context.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Consolidated companies
+as of December 31, 2020
+Additions
+Disposals/Mergers
+Consolidated companies
+as of December 31, 2021
+174
+322
+In 2021, a total of 52 domestic and 11 foreign associated companies
+were consolidated under the equity method (2020: 54 domestic
+companies and 13 foreign companies). One domestic company
+reported as joint operations was presented pro rata on the consoli-
+dated financial statements (2020: one domestic company).
+(5) Acquisitions, Disposals and Discontinued
+Operations
+Significant Transactions in 2021
+Disposal of innogy eMobility Solutions GmbH
+E.ON completed the sale of 100 percent of the shares in innogy
+eMobility Solutions GmbH (ieMS), a fully consolidated subsidiary,
+to Compleo Charging Solutions AG, with its registered office in
+Dortmund, on December 31, 2021. ieMS and its subsidiaries are
+active in the field of electromobility in Europe, in particular charging
+stations. The company, which was allocated to the Customer Solu-
+tions Other segment in the E.ON Group, was classified as a disposal
+group under IFRS 5 from the third quarter of 2021. In this connection,
+a write-down to the lower fair value less costs to sell of €20 million
+was recognized in the third quarter. The company was deconsoli-
+dated as of December 31, 2021; the loss on deconsolidation totaled
+€28 million. Compleo Charging Solutions AG is a listed company and
+a full-service provider of charging technology in Europe.
+Consortium Agreement with RheinEnergie
+On June 29, 2021, Westenergie AG, a fully consolidated subsidiary
+of the E.ON Group, entered into a new consortium agreement with
+RheinEnergie AG. This agreement will enable E.ON to exert signifi-
+cant influence on the further development of the energy supply in
+one of Germany's fastest-growing economic regions and to benefit
+from growth and synergies in the Rhineland. According to current
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+(2) New Standards, Interpretations and Amendments
+→ Consolidated Balance Sheets
+156
+Pending
+166
+39
+203
+377
+10
+12
+22
+13
+24
+37
+171
+191
+362
+4
+4
+8
+9
+48
+Clarification with regard to the distinction between changes in accounting policies (retrospective applica-
+tion) and changes in accounting estimates (prospective application).
+Disposals/Mergers
+Amendments to IAS 12-Deferred Tax related
+to Assets and Liabilities arising from a Single
+Transaction
+IASB and IFRS IC Pronouncements
+Amendments to IFRS 16-Covid-19 Related
+Rent Concessions
+(see Note 32).
+No effect.
+01/01/2021
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Statement of Income
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+Standards, Interpretations and Amendments Issued But Not Yet Applicable
+The IASB and the IFRS IC have issued the following additional standards and interpretations. E.ON does not apply these rules because their
+application is not yet mandatory in some cases or their endorsement by the EU is still pending in others. Currently, however, these adjust-
+ments are not expected to have a material impact on E.ON's Consolidated Financial Statements:
+Consolidated Financial Statements 185
+01/01/2021
+No material effect.
+Expected impact on the presentation of E.ON's
+net assets, financial position and results of operations
+No material effect.
+The EU has transposed these amendments into European law. The amendments will be applied for fiscal years beginning on or after
+January 1, 2021. The amendments have no material impact on E.ON's Consolidated Financial Statements.
+Explanation
+Clarification that an entity must disclose all material (formerly "significant") accounting policies. The main
+characteristic of these items is that, together with other information included in the financial statements,
+they can influence the decisions of primary users of the financial statements.
+The amendments permit lessees, as a practical expedient, not to assess whether particular rent concessions occurring as a
+direct consequence of the Covid-19 pandemic are lease modifications and, instead, to account for those rent concessions as
+if they were not lease modifications.
+To be applied by
+E.ON from
+01/01/2021
+Initially, these amendments were to apply until June 30, 2021.
+In light of the fact that the Covid-19 pandemic is continuing, the IASB extended the application period of the practical expe-
+dient with respect to accounting for Covid-19-related rent concessions through June 30, 2022.
+04/01/2021
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Amendment to IFRS 16-Covid-19 Related
+Rent Concessions beyond 30 June 2021
+Amendments to IFRS 9, IAS 39, IFRS 7,
+IFRS 4 and IFRS 16-Interest Rate Benchmark
+Reform (Phase 2)
+• Treatment of contract modifications or changes in contractual cash flows due directly to the Reform-such as fluctuations
+in a market interest rate as changes in a floating rate;
+• Allow changes to the designation and documentation of a hedging relationship required by IBOR reform without
+discontinuing hedge accounting;
+•
+Temporary relief from having to meet the separately identifiable requirement when an RFR instrument is designated as a
+hedge of a risk component;
+Additional IFRS 7 disclosures in connection with the IBOR Reform.
+Amendments to IFRS 4-Extension of the
+Temporary Exemption from IFRS 9
+Deferral of initial application of IFRS 9 for insurers.
+The amendments provide temporary relief to adopters regarding the financial reporting impact that will result from replacing
+Interbank Offered Rates (IBORS) with alternative risk-free rates (RFRs). The amendments provide for the following practical
+expedients:
+→ Notes
+No material effect
+No material effect.
+01/01/2022
+01/01/2022
+No material effect.
+Yes
+01/01/2023
+The new IFRS 17 standard governs the accounting for insurance contracts and supersedes IFRS 4.
+The amendment concerns the transitional provisions for the initial joint application of IFRS 17 and IFRS 9.
+Pending
+01/01/2023
+No effect.
+Clarification that the classification of liabilities as current or non-current is based on the rights the entity
+has at the end of the reporting period.
+Pending
+01/01/20231,2
+No material effect.
+IASB and IFRS IC Pronouncements
+Amendments to IAS 16-Proceeds before
+Intended Use
+Amendments to IAS 1 and IFRS Practice
+Statement 2-Disclosure of Accounting Policies
+Amendments to IAS 8-Definition of
+Accounting Estimates
+Yes
+Reference to the revised 2018 IFRS Conceptual Framework. Priority application of IAS 37 or IFRIC 21 by the
+acquirer to identify acquired liabilities. No recognition of contingent assets acquired allowed.
+Minor amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41.
+Yes
+No material effect.
+Explanation
+The amendments prohibit a company from deducting from the cost of property, plant and equipment
+amounts received from selling items produced while the company is preparing the asset for its intended use.
+Instead, a company will recognize such sales proceeds and related cost in profit or loss.
+Amendments to IAS 37-Onerous Contracts- Clarification that all costs directly attributable to a contract must be considered when determining the cost
+Cost of Fulfilling a Contract
+of fulfilling the contract.
+Amendments to IFRS 3-Reference to the
+Conceptual Framework
+Annual Improvements Project-Annual
+Improvements to IFRSS 2018-2020 Cycle
+IFRS 17 "Insurance contracts" including
+Amendments to IFRS 17
+Amendment to IFRS 17-Initial Application of
+IFRS 17 and IFRS 9-Comparative Information
+Amendments to IAS 1-Classification of
+Liabilities as Current or Non-current
+Amendments to IAS 1-Classification of
+Liabilities as Current or Non-current-Deferral
+of Effective Date
+No material effect.
+To be applied by
+Transposed
+into EU law
+E.ON from
+01/01/2022
+Expected impact on the presentation of E.ON's net as-
+sets, financial position and results of operations
+No material effect.
+Yes
+01/01/2022
+Yes
+احدا
+We have partnered with The Radisson Hotel Group to transform the
+Radisson Blu in Frankfurt-an eye-catching building in the shape
+of a perpendicular, circular disk-into Europe's first hotel with an
+industrial-scale fuel cell system. The fuel cell covers 80 percent
+of the hotel's heat and electricity requirements with close to zero
+emissions. In the fuel cell, hydrogen atoms react with oxygen to
+become water. The electrons released in the process pass through an
+external circuit, creating energy. The heat generated as a by-product
+of the reaction reaches temperatures of up to 600 degrees Celsius
+and is used to heat the entire hotel, including the swimming pool.
+As it is nearly emission-free, this scalable model has huge potential
+for the future
+↑
+15
+E.ON Annual Report 2021
+Contents
+Search
+Back
+Contents Q Search ← Back
+We helped the community by networking
+two existing wind turbines and photovol-
+taic systems with an intelligent control sys-
+tem and two huge batteries as well as an
+emergency power generator that runs
+on biofuel. Thanks to this interconnected
+system, every fifth week, the village is able
+to disconnect from the national Swedish
+power grid (so-called island mode). Excess,
+locally generated energy is stored in large
+flow batteries (rechargeable fuel cells),
+which can be used whenever the village
+is in island mode and there is no wind or
+sunshine to generate energy. Heat pumps,
+photovoltaic systems and batteries
+installed in Simris residents' households
+are connected and used intelligently to
+make the local energy system even more
+flexible. They, too, generate and store
+energy for the households and the entire
+community. Our digitalised smart-grid
+technology distributes heat from homes
+with excess energy to those that need it;
+at the same time, surplus energy generated
+by consumers can be sold back to us.
+e-on
+Jennie Sjöstedt
+Project Manager
+E.ON Sweden
+Radian
+15
+However, we are also committed to enabling
+our customers in smaller, local towns and
+communities to be part of our vision of
+connecting everyone, anywhere to good
+energy. Simris in Sweden is proof that
+an entire village can run on 100 percent
+self-generated, sustainable energy. The
+community worked with us to create its
+own, clean energy network and become
+consumers who produce their own energy,
+or prosumers.
+and a partner
+Kristina Roszynski
+Architect and Partner at
+Cullinan Studio London
+Q Search ← Back
+|||
+E.ON Annual Report 2021
+Claire Harrold
+City Energy
+Transformation Lead
+at E.ON London
+14
+"Working with E.ON
+represents a really good
+partnership between an
+off-taker and an energy
+supplier."
+James Rooke
+Head of Energy & Sustainability,
+City of London (2017-2021)
+Today, cities already account for two-thirds
+of the world's energy demand and 70 per-
+cent of carbon emissions. This poses enor-
+mous challenges, as well as opening up
+countless opportunities. We are at the fore-
+front of harvesting and reusing energy that
+would otherwise be wasted.
+One powerful example of a sustainable
+technology like this is in London, in the
+United Kingdom. GreenSCIES in Islington is
+a smart energy system that interconnects
+buildings to capture and reuse waste heat
+in real time. This project illustrates how we
+build tailored solutions across different
+industries and businesses that combine
+heating and cooling systems as well as
+mobility solutions to reduce the environ-
+mental impact-with stunning results.
+Also in London, we are a key partner in the
+CitiGen project. It is set in what was origi-
+nally a coal-fired power station that has been
+gradually modernized in recent decades
+from coal to gas to geothermal heat. The
+newest boreholes underneath the station
+can be used for geothermal heat, with the
+aim of cutting emissions further by 30 to
+50 percent as of 2022. Enabled by our digi-
+tal network, CitiGen connects households
+and businesses to the grid and delivers
+energy to them via state-of-the-art tech-
+nology. In this way, we can ensure maxi-
+mum carbon-efficient energy provision at
+all times.
+E.ON Annual Report 2021
+Contents
+A leader,
+16
+19
+Contents
+Contents
+Q Search
+← Back
+Reinhold Messner
+Legendary Mountaineer
+and Environmentalist
+Leonhard Birnbaum
+E.ON CEO
+system requires huge computing power-
+more than present-day computers are
+capable of. E.ON is the first utilities com-
+pany in Europe to work with IBM Quantum
+to implement quantum solutions for its
+critical workflows within the grid infra-
+structure business. A quantum computer
+can perform the required calculations in a
+number of different ways and in a shorter
+space of time. Together with our partner
+IBM Quantum, we have the potential to
+shape tomorrow's energy world.
+on
+Franz Völkl
+Project Engineer at
+Bayernwerk Natur GmbH
+Germany
+Kajsa Sognefur
+Project Manager
+13
+eMobility at
+E.ON Sweden
+D
+E.ON Annual Report 2021
+E.ON's many different sustainable projects
+will contribute to decarbonizing and decen-
+tralizing the energy infrastructure. At the
+same time, our distribution networks are
+facing growing challenges. In future, they
+will have to fulfil a much wider range of
+tasks. Energy is no longer only supplied
+unilaterally from producers to consumers,
+but is fed into the grid by numerous smaller
+companies and households, for instance via
+their own photovoltaic systems. In addition,
+millions of electric vehicles need to be inte-
+grated. Coordinating and controlling this
+IBM
+Q Search
+← Back
+"This is a local project on which we are
+working together to meet very concrete
+climate protection targets here in this area.
+The brewery as a medium-sized partner
+within sight of our plant can become a role
+model for a project of this kind. Together, we
+have thought beyond company boundaries.
+We are pleased that some of our waste
+heat is being used in this innovative way."
+17
+Think globally,
+act locally
+Along Germany's Rhine and Ruhr valleys, another innovative energy
+efficiency project is under way, supplying industrial waste heat
+from Thyssenkrupp Steel to a local brewery through a new steam
+transfer line managed by E.ON. Waste heat in the form of steam
+from steel production at Thyssenkrupp Steel's power plant in the
+Ruhr region will provide the thermal energy required for the brewery
+processes. E.ON is building the pipeline and will take over the
+energy management. This will result in long-term cooperation
+between both companies. The brewery's new energy supply is
+scheduled to start in spring 2022.
+Arnd Köfler
+IBM Quantum
+Chief Technology Officer,
+Thyssenkrupp Steel
+Contents
+Q Search ← Back
+"For E.ON, using quantum computing gives
+us the opportunity to solve complex, cross-
+system optimization tasks in connection
+with the energy transition in innovative
+ways. Our close collaboration with IBM is
+an important milestone in this regard."
+Victoria Ossadnik,
+Chief Digital Officer at E.ON
+Quantum computing
+opens new
+opportunities
+E.ON Annual Report 2021
+11
+our
+E.ON Energy Infrastructure Solutions
+a pivotal role to play in this transformation.
+First, as an energy company serving about
+51 million customers, we must accept that
+we have a special responsibility. Second,
+we need to redefine who we are, not only
+by transforming our business to meet the
+climate change challenge, but by becoming
+a sustainability leader in the energy sector.
+We are one of Europe's largest operators of power and gas distribu-
+tion networks and a leader in network efficiency, reliability and
+innovation. With a history dating back one hundred years, we have
+A successful transition to a low-carbon society will require far-
+reaching and permanent structural changes. These include sector
+integration, in other words linking the use of sustainable energy
+in the form of electricity and gas across the heating, cooling and
+transport sectors.
+The Intergovernmental Panel on Climate Change ("IPCC") published its
+fifth Special Report on Global Warming in October 2018 following
+the decision to adopt the Paris Agreement. The report emphasises the
+urgent need for decisive and concerted action to reduce greenhouse
+gas emissions and limit global warming to 1.5 to 2 degrees Celsius.
+Although many countries worldwide have taken tangible steps to
+protect the climate and mitigate the impact of global warming, the
+concentration of greenhouse gases in the atmosphere continues to
+rise, thus intensifying climate change. This has been confirmed by
+the IPCC Physical Science Basis report published in 2021. The eco-
+nomic slowdown resulting from Covid-19-related restrictions has
+not altered this situation.
+Where others
+offer promises,
+we take action
+11
+Contents Q Search ← Back
+III
+story
+E.ON Annual Report 2021
+There is no shortage of big, bold messages
+and pledges from companies all around the
+world who have joined the "green" band-
+wagon with ad campaigns making sweeping
+promises to cut carbon emissions. Yet we
+know that people do not want empty
+promises, but expect companies to deliver
+tangible action with results. As citizens,
+parents and stewards of the planet ourselves,
+we are guided by this in our transformation,
+in developing our strategy and technological
+solutions.
+III
+Leke Oluwole
+General Manager Citigen
+District Energy Scheme at
+E.ON London
+#TimeForAction
+20
+20
+Not only have we radically transformed our strategy and refocused our
+business activities to meet the challenges of climate change, but we have
+also completely changed the way we communicate our actions to the
+public. In our latest television campaign, we appealed to the public to join
+us in our efforts against climate change and announced our intention to
+become a sustainability leader in our industry. The film, which was shot on
+top of the Mittelbergferner glacier in Austria, features no actors, but three
+dozen scientists, E.ON engineers, activists and consumers, including leg-
+endary mountaineer and environmentalist Reinhold Messner, as well as
+E.ON CEO Leonhard Birnbaum together with employees of our company.
+To learn more about our sustainable projects, join the more than
+70 million people who have already watched our eight-part series,
+E.ON Change Makers, on YouTube.
+E.ON Change Makers
+YouTube
+E.ON Annual Report 2021
+Sharing
+Contents Q Search
+E.ON Annual Report 2021
+← Back
+Search
+Contents
+CEO
+Stefan Håkansson
+But in the future, cities can actually become
+self-sufficient. Our strategy? To recycle
+and repurpose energy that is already there."
+"Buildings generate nearly 40 percent
+of annual global carbon emissions.
+A great
+Back
+Search
+Contents
+12
+E.ON Annual Report 2021
+opportunity right
+before our eyes
+We are partnering with megacities, local communities, businesses and private
+households to implement innovative technologies with highly effective results,
+while giving end-consumers access to green energy on demand and allowing
+them to even become their own energy producers. By expanding our energy net-
+works, we are laying the foundation for our customers' transition to low carbon
+emissions. Thereby, our customers have the chance to contribute directly to climate
+protection, for example by connecting charging stations to promote the use of
+electric vehicles.
+By turning our backs on unsustainable energy production and focusing on our
+grid, smart technology, digitalization and innovative local energy solutions, we are
+enabling savings of more than 100 million metric tons of carbon a year. This puts
+us in a position to become an industry leader in sustainable energy solutions,
+opening up extensive business opportunities.
+Our journey to sustainability is driven by our people. Each day, the ingenuity,
+passion and dedication of our employees and our customers-whether households,
+companies or entire communities - help us to become more sustainable.
+CEO and Chairman of the
+Board of Management E.ON
+Leonhard Birnbaum
+"We've listened, and we've changed.
+And through our thousands of sus-
+tainable projects and our electricity
+networks, we're already saving
+more than 100 million metric tons
+of CO₂ each year.”¹
+has an impact now
+Our transformation
+Back
+1 Base year 2019. More information on eon.com/action.
+↑
+€ in millions
+2021
+2020
+Domestic tax loss carryforwards
+1,102
+Interest carryforwards domestic
+Interest carryforwards foreign
+thereof corporate tax
+thereof trade tax
+79
+1,027
+1,053
+2020
+1,456
+2021
+Of the tax loss carryforwards, a significant portion relates to previ-
+ous years.
+December 31,
+December 31,
+Tax Interest Carryforwards
+Tax Loss Carryforwards
+The declared tax loss carryforwards as of the dates indicated are as
+follows:
+The final purchase-price allocation to the acquisition of innogy SE
+resulted in deferred tax assets of €1,313 million and deferred tax
+liabilities of €1,358 million as of December 31, 2020.
+The VSEH Group will be presented as a disposal group in accordance
+with IFRS 5 as of December 31, 2021. Assets and liabilities held
+for sale include deferred tax assets of €9 million and deferred tax
+liabilities of €114 million. In connection with the acquisition of the
+Slovakian VSEH Group, deferred tax assets of €10 million and
+deferred tax liabilities of €138 million resulted from the final pur-
+chase-price allocation as of December 31, 2020.
+The tax interest carryforwards at the end of the year break down as
+follows:
+Deferred taxes were not recognized, or no longer recognized, on a
+total of €7,978 million (2020: €8,433 million) in foreign tax loss
+carryforwards; of this amount, €562 million (2020: €499 million)
+relates to temporary foreign loss carryforwards. Deferred tax assets
+were not recognized, or no longer recognized, on non-expiring
+domestic corporate tax loss carryforwards of €54 million (2020:
+€70 million) or on domestic trade tax loss carryforwards of
+€1,002 million (2020: €1,353 million). Current tax expense was
+reduced by €79 million due to the use of previously unrecognized
+tax losses. The change in previously unrecognized tax losses and
+temporary differences reduced deferred tax expense by €446 million.
+Deferred tax expense was also reduced by changes in the value of
+deferred tax assets amounting to €242 million.
+2020
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 197
+€ in millions
+75
+Contents
+236
+-44
+3
+-47
+After
+income taxes
+-320
+38
+-358
+Income taxes
+income taxes
+50
+Before
+7
+648
+Income taxes
+income taxes
+Currency translation adjustments
+Securities (IFRS 9)
+Cash flow hedges
+991
+2021
+After
+income taxes
+655
+-876
+-369
+-1,740
+-11
+93
+-1,976
+-8
+-361
+-195
+3,030
+-72
+3,102
+1
+-196
+39
+Companies accounted for under the equity method
+Total
+-1,093
+2,521
+-83
+2,604
+Remeasurements of defined benefit plans
+-214
+-214
+93
+217
+258
+4
+1,377
+For fiscal year 2021, the auditor was changed from Pricewater-
+houseCoopers GmbH, Wirtschaftsprüfungsgesellschaft (PwC) to
+KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG).
+During 2021, the following fees were recorded as expenses for the
+services provided by the independent auditor of the Consolidated
+Financial Statements, KPMG and by companies in the international
+KPMG network, and for the services provided in 2020 by PwC and
+by companies in the international PwC network:
+Independent Auditor Fees
+€ in millions
+Financial statement audits
+Domestic
+Other attestation services
+Domestic
+Tax advisory services
+Domestic
+Other services
+Domestic
+Total
+Domestic
+2021
+2020
+29
+32
+21
+23
+€ in millions
+7
+Fees and Services of the Independent Auditor
+4
+On December 14, 2021, the Management Board and the Supervi-
+sory Board of E.ON SE made a declaration of compliance pursuant
+to Section 161 of the German Stock Corporation Act ("AktG"). The
+declaration has been made permanently and publicly accessible to
+stockholders on the Company's Web site (www.eon.com).
+(13) Other Information
+2nd tranche
+Jan. 1, 2018
+¹Excluding apprentices, work-study students or interns.
+2Full-Time Equivalents.
+Date of issuance
+Term
+Target value at issuance
+4 years
+€7.65
+4 years
+€7.88
+4 years
+€6.68
+4 years
+€6.41
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 200
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+German Corporate Governance Code
+6
+1
+1
+-614
+-250
+Income/Loss from continuing operations
+(attributable to shareholders of E.ON SE)
+Income/Loss from discontinued operations, net
+Less: Non-controlling interests
+Income/Loss from discontinued operations,
+net (attributable to shareholders of E.ON SE)
+Net income/loss attributable to shareholders
+of E.ON SE
+4,691
+1,060
+-40
+-3
+0
+-43
+in €
+Earnings per share (attributable to
+shareholders of E.ON SE)
+from continuing operations
+1.80
+0.41
+from discontinued operations
+0.00
+-0.02
+from net income/loss
+1.80
+0.39
+Weighted-average number of shares
+1,310
+5,305
+Income/Loss from continuing operations
+Less: Non-controlling interests
+2020
+1
+1
+0
+2
+0
+2
+34
+42
+26
+32
+3rd tranche
+Jan. 1, 2019
+The auditor fees relate to the audit of the Consolidated Financial
+Statements and the legally mandated financial statements of E.ON SE
+and its affiliates. They also include fees for auditing reviews of the
+IFRS interim financial statements and other audit services directly
+required by the audit of the Consolidated Financial Statements.
+The fees for tax consulting services mainly relate to services in the
+area of tax compliance.
+Fees for other services in the prior year consist primarily of services
+in connection with the transfer of E.ON's renewable energy business
+to RWE.
+List of Shareholdings
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+presented in Note 38 →.
+(14) Earnings per Share
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+Earnings per Share
+€ in millions
+2021
+The fees for other attestation services include all attestation services
+that are not auditing services and are not used in connection with
+the audit of the Consolidated Financial Statements. These costs
+are for the legally required attestation services (e.g., as a result of
+the Renewable Energy Act [EEG], the Act on Combined Heat and
+Power Generation [KWKG] and in connection with new IT systems)
+and for other voluntary attestation services. In the previous year,
+special audit services were included in the context of the transfer of
+E.ON's renewable energy business to RWE.
+4th tranche
+Jan. 1, 2020
+5th tranche
+Jan. 1, 2021
+75,212
+As of December 31, 2021, E.ON reported deferred tax assets for
+companies (primarily in the Netherlands and in the UK) that incurred
+losses in the current or the prior-year period which exceed the
+deferred tax liabilities by €497 million (prior year: €387 million).
+The basis for recognizing deferred tax assets is an estimate by man-
+agement based on the development of temporary reversal effects
+and concrete tax structuring measures of the extent to which it is
+probable that the respective companies will achieve taxable earnings
+in the future against which the as yet unused tax losses, tax credits
+and deductible temporary differences can be offset.
+Income tax items are regularly assessed, in particular against the
+backdrop of numerous changes in tax laws, tax regulations, legal
+decisions and ongoing tax audits. E.ON is responding to this cir-
+cumstance, in particular through the application of IFRIC 23, by
+continuously identifying and assessing the tax environment and the
+resulting effects. The most current information is then incorporated
+into the estimate parameters necessary for measuring the tax pro-
+visions. Related potential interest rate effects are also assessed and
+measured accordingly. They are presented in separate items.
+(12) Personnel-Related Information
+Personnel Costs
+The following table provides details of personnel costs for the periods
+indicated:
+Personnel Costs
+€ in millions
+2021
+2020
+Wages and salaries
+4,545
+4,635
+Social security contributions
+717
+696
+Pension costs and other employee benefits
+Pension costs
+575
+547
+Total
+5,837
+535
+518
+5,866
+Deferred tax assets were not recognized, or are no longer recognized,
+in the amount of €12,357 million (2020: €16,750 million) for
+temporary differences which are recognized in income and equity.
+In Germany, deferred tax assets of €1,053 million (2020: €991 mil-
+lion) were not (or no longer) recognized on non-expiring interest
+carryforwards. In total, deferred tax assets of €214 million (2020:
+€182 million) were not recognized, or were no longer recognized,
+on non-expiring foreign interest carryforwards.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Total
+1,311
+1,173
+Foreign tax loss carryforwards
+9,322
+10,259
+thereof corporate tax
+8,684
+thereof local income tax
+638
+Personnel costs of €5,837 million were €29 million lower than the
+prior-year figure of €5,866 million. The change is primarily attribut-
+able to the lower headcount and to decreased restructuring mea-
+sures. This was partly offset by salary adjustments and higher
+expenses for pensions.
+9,753
+506
+10,424
+11,715
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 198
+Total
+182
+Share-Based Payment
+Employee Stock Purchase Program
+The breakdown by segment is shown in the following table:
+Core Workforce¹
+FTE²
+2021
+2020
+Energy Networks
+38,722
+38,093
+Customer Solutions
+27,217
+30,946
+Corporate Functions & Other
+3,915
+4,359
+Employees, core business
+69,854
+73,398
+Non-Core Business
+1,776
+1,814
+Total employees, E.ON Group
+71,630
+In 2021, E.ON employed an average personnel of 71,630 (2020:
+75,212). Part-time employees were taken into account on a pro rata
+basis when this figure was calculated. In addition, an average of
+2,115 apprentices were employed in the reporting year in Germany
+(2020: 2,208).
+Employees
+The provision for the second, third, fourth and fifth tranche of the
+E.ON Performance Plan as of the balance sheet date is €89.1 million
+(2020: €47.5 million). The expense for the second, third, fourth and
+fifth tranches amounted to €61.3 million in the 2021 fiscal year
+(2020: €20.8 million).
+The following are the base parameters of the tranches of the E.ON
+Performance Plan active in 2021:
+The voluntary employee stock purchase program was reintroduced
+in 2021 after having been suspended since 2016, giving employees
+in the German Group companies the opportunity once again to
+purchase E.ON shares at favorable conditions. The favorable pricing
+conditions granted within the framework of the employee stock
+purchase program (IFRS 2, "Share-based Payment") resulted in per-
+sonnel expense of €9 million; the offsetting entry was made in equity.
+Long-term Variable Compensation
+Members of the Management Board of E.ON SE and certain execu-
+tives of the E.ON Group receive share-based payment as part of
+their voluntary long-term variable compensation. The purpose of
+such compensation is to reward their contribution to E.ON's growth
+and to further the long-term success of the Company. This variable
+compensation component, comprising a long-term incentive effect
+along with a certain element of risk, provides for a sensible linking
+of the interests of shareholders and management.
+The following discussion includes reports on the E.ON Performance
+Plan introduced in 2017.
+E.ON Performance Plan (EPP)
+In 2017, 2018, 2019, 2020 and 2021, E.ON granted the members
+of the Management Board of E.ON SE and certain executives of the
+E.ON Group virtual shares under the E.ON Performance Plan. The
+vesting period of each tranche is four years. Vesting periods start on
+January 1 of each year.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+The expenses for share-based payment in 2021 (the E.ON Share
+Matching Plan, the multiyear bonus and the E.ON Performance Plan)
+amounted to €61.3 million (2020: €21.7 million).
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 199
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The beneficiary will receive virtual shares in the amount of the agreed
+target. The conversion into virtual shares will be based on the fair
+market value on the date when the shares are granted. The number
+of virtual shares allocated may change during the four-year vesting
+period, depending on the total shareholder return ("TSR") of E.ON
+stock compared with the TSR of the companies in a peer group
+("relative TSR").
+The TSR is the return on E.ON stock, which takes into account the
+stock price plus the assumption of reinvested dividends, adjusted
+for changes in capital. The peer group used for relative TSR will be
+the other companies in E.ON's peer index, the STOXX® Europe 600
+Utilities.
+During a tranche's vesting period, E.ON's TSR performance is mea-
+sured once a year in comparison with the companies in the peer
+group and set for that year. E.ON's TSR performance in a given year
+determines the final number of one fourth of the virtual shares
+granted at the beginning of the vesting period. If target attainment
+in a year is below the threshold defined by the Supervisory Board
+upon allocation, the number of virtual shares is reduced by one
+fourth. If E.ON's performance is at the upper cap or above, the
+fourth of the virtual shares allocated for the year in question will
+increase, but to a maximum of 150 percent.
+E.ON Performance Plan Virtual Shares
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the final
+60 days of the vesting period. This amount is increased by the
+dividends distributed on E.ON stock during the vesting period and
+then paid out. The sum of the payouts is capped at 200 percent of
+the agreed target.
+The virtual shares are canceled if the employment relationship of
+the beneficiary ends before the end of the term for reasons within
+the control of the beneficiary. If the employment relationship of the
+beneficiary is terminated before retirement, through the end of a
+limited term or for operational reasons before the end of the term,
+the virtual shares do not expire but are settled at maturity.
+If the employment relationship ends before maturity due to death or
+permanent invalidity, the virtual shares are settled before maturity.
+The same shall apply in the case of a change in control related to
+E.ON SE and also if the allocating company leaves the E.ON Group
+before maturity.
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Before
+€ in millions
+→ Consolidated Balance Sheets
+-6.7
+-287
+-13.1
+399
+6.5
+-103
+-4.7
+-21
+-0.4
+127
+5.8
+-767
+-12.5
+1,119
+51.3
+83
+1.4
+-50
+-2.3
+-246
+-4.0
+-408
+-276
+-6.7
+0.8
+Effective income taxes/tax rate
+income tax rate of 31 percent corresponds to the tax rate applicable
+to E.ON SE for 2021. The differences from the effective tax rate are
+reconciled as follows:
+2021
+2020
+€ in millions
+in %
+€ in millions
+in %
+6,123
+100.0
+2,181
+100.0
+1,898
+31.0
+676
+31.0
+-149
+-2.4
+-203
+-9.3
+48
+-147
+-12.7
+-19
+-0.3
+399
+703
+7
+622
+5
+723
+Property, plant and equipment
+453
+3,729
+348
+3,956
+Financial assets
+150
+142
+209
+131
+Inventories
+87
+34
+Receivables (including derivative financial instruments)
+1,134
+717
+404
+Tax liabilities
+Tax assets
+15
+0.7
+818
+13.4
+871
+40.0
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Tax effects of income taxes related to other periods
+Other
+Back
+Deferred Tax Assets and Liabilities
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+December 31, 2021
+December 31, 2020
+€ in millions
+Intangible assets
+Right-of-use assets
+Tax assets
+Tax liabilities
+Deferred tax assets and liabilities as of December 31, 2021, and
+December 31, 2020, break down as shown in the following table:
+Tax effects on income from companies accounted for under the equity method
+Tax effects of changes in value and non-recognition of deferred taxes
+Tax effects of other taxes on income
+Tax effects of non-deductible expenses and permanent differences
+Tax effects on tax-free income
+209
+Interest and similar expenses
+-1,590
+-1,390
+Amortized cost
+-743
+-658
+Fair value through P&L
+-546
+-320
+Other interest expenses
+-301
+-412
+Net interest income/loss
+-553
+-720
+Financial results
+-386
+-702
+14
+325
+The improvement in financial results relative to the previous year is
+based in part on an increase in income from investments and in part
+on an improvement in net interest income, which was positively
+affected by lower interest expenses from debt financing, among
+Other interest income
+14
+Fair value through OCI
+296
+Fair value through P&L
+133
+68
+Other
+53
+34
+Impairment charges/reversals on other
+financial assets
+-19
+-84
+other factors. Valuation effects from securities recognized at fair
+value generated significant income in the reporting period, whereas
+an expense was recorded in the previous year. In contrast, the
+positive contribution to earnings from the difference between the
+nominal interest rate and the effective interest rate of the innogy
+bonds, which was adjusted due to the purchase price allocation, was
+€267 million, which is lower than in the previous year.
+Income/Loss from equity investments
+18
+Income/Loss from securities, interest and
+similar income
+1,037
+670
+Amortized cost
+42
+35
+Fair value through P&L
+772
+167
+7,548
+Other interest income consists primarily of income from previous
+periods, which was significantly lower in 2021. Other interest
+expenses include the accretion of provisions for asset retirement
+obligations in the amount of €0 million (2020: €3 million). Also con-
+tained in this item is the net interest cost from provisions for pen-
+sions in the amount of €63 million (2020: €95 million) and financial
+lease liabilities in the amount of €160 million (2020: €154 million).
+Interest expense was reduced by capitalized interest on debt totaling
+€7 million (2020: €8 million).
+The tax expense in 2021 amounted to €818 million (2020:
+€871 million). In 2021, the tax rate was 13 percent (2020: 40 per-
+cent). In the reporting period, the use of tax losses, market valua-
+tions of commodities with no tax effect and taxes for previous years
+led to a reduction in the tax rate. The reason for the high tax rate in
+the previous year was essentially a one-off effect from the valuation
+of deferred tax assets, which was partially offset by taxes for previ-
+ous years.
+Of the amount reported as current taxes, €170 million in tax
+income is attributable to previous years (2020: €276 million in tax
+income).
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 195
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Deferred taxes resulted from changes in temporary differences
+affecting net income, which totaled €249 million (2020: €223 mil-
+lion), loss carryforwards of €70 million (2020: €270 million) and
+tax credits amounting to -€1 million (2020: €2 million). There were
+also offsetting changes recognized directly in equity and effects
+from additions and disposals for deferred taxes from discontinued
+operations totaling -€100 million (2020: €175 million).
+Income tax assets and liabilities consist primarily of income taxes
+for the respective current year and for prior-year periods that have
+not yet been definitively examined by the tax authorities. These
+items can be found in the balance sheet.
+As of December 31, 2021, €23 million (2020: €13 million) in
+deferred tax liabilities were recognized for the differences between
+net assets and the tax bases of subsidiaries and associated compa-
+nies (outside basis differences). Accordingly, deferred tax liabilities
+were not recognized for temporary differences of €1,718 million
+(2020: €936 million) at subsidiaries and associated companies, as
+E.ON is able to control the timing of their reversal and the tempo-
+rary difference will not reverse in the foreseeable future.
+Income taxes relating to discontinued operations (see also Note 5 →)
+are reported in the income statement under "Income from discon-
+tinued operations." In fiscal year 2021 they amounted to tax expense
+of €0 million (2020: tax expense of €19 million).
+The base income tax rate of 31 percent (2020: 31 percent) applica-
+ble in Germany is composed of corporate income tax (15 percent),
+trade tax (15 percent) and the solidarity surcharge (1 percent). The
+Reconciliation to Effective Income Taxes/Tax Rate
+Income/Loss from continuing operations before taxes
+Expected income taxes
+Foreign tax rate differentials
+Changes in tax rate/tax law
+Total income taxes
+Deferred taxes
+Foreign
+871
+(11) Income Taxes
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+Income Taxes
+€ in millions
+2021
+2020
+Domestic income taxes
+260
+137
+Foreign income taxes
+Interest expenses also include €38 million of negative earnings
+effects (2020: €58 million) from non-controlling interests in subsid-
+iaries that have already been fully consolidated and interests in fully
+consolidated partnerships, which are to be recognized as liabilities
+in accordance with IAS 32, and with legal structures that give their
+shareholders a statutory right of withdrawal combined with an
+entitlement to a settlement payment.
+240
+Current taxes
+Domestic
+500
+376
+90
+524
+228
+-29
+318
+495
+818
+239
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+406
+Provisions for pensions and similar obligations
+Own work capitalized amounted to €761 million in 2021 (2020:
+€680 million) and resulted primarily from capitalized work per-
+formed in connection with ongoing and completed IT projects and
+network assets.
+(7) Own Work Capitalized
+Revenues are broken down into intragroup and external revenues in
+the segment information (Note 35 →). They are also broken down
+into key regions and technologies. The overview also shows the
+effect of revenues on operating cash flow before interest and taxes.
+Revenues recognized in the current reporting period arising from
+performance obligations that have been fully or partially settled in
+prior reporting periods amounted to €0.4 billion (2020: €0.4 billion).
+The total amount of benefit obligations already contracted but still
+outstanding (excluding expected contract renewals and expected
+new contracts) was €28.1 billion as of December 31, 2021 (Decem-
+ber 31, 2020: €29.4 billion). The majority of these benefit obliga-
+tions are expected to be met within the next three years. Revenue in
+the E.ON Group is recognized primarily on an over-time basis. Rev-
+enue recognized under non-IFRS 15 accounting standards totaled
+€673 million in fiscal 2021.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+Consolidated Financial Statements 192
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+E.ON Annual Report 2021
+The increase in revenues is primarily attributable to higher prices
+for energy on the commodity markets. This resulted on the one hand
+in higher selling prices on the sales markets. On the other hand, in
+the case of sales volumes purchased on a forward basis, which are
+initially to be accounted for as derivatives under IFRS 9, the corre-
+sponding revenues are to be measured at market prices at the time
+of physical delivery (so-called failed own use adjustments). Expenses
+from the realization of commodity derivatives are recognized in
+other operating income.
+At €77.4 billion, revenues in 2021 were roughly €16.4 billion higher
+than in the previous year, primarily due to the cooler weather and
+the economic consequences of the Covid-19 pandemic, which had
+a negative impact on E.ON's activities in the previous year.
+(6) Revenues
+E.ON NA Capital, Inc. and E.ON RE Investments LLC, fully consoli-
+dated companies in the E.ON Group, transferred real estate assets
+totaling about US$288 million to other entities in 2020, of which
+US$265 million was transferred to the trust assets of E.ON Pension
+Trust, which is not fully consolidated. The purchase-price payments
+were primarily made in 2020.
+Disposal of Real Estate Assets
+of the CTA with EPT. The shares were transferred to PEGI with
+effect from the close of December 31, 2019. The deconsolidation
+gain in fiscal 2019 amounted to €0.4 billion. The purchase price
+payment of €1.1 billion was made on January 15, 2020.
+E.ON Beteiligungen GmbH held all of the shares of PEG Infrastruk-
+tur AG (PEGI) and thereby the indirect interest in Nord Stream AG
+(15.5 percent). Nord Stream AG, a project company founded in
+2005, owns and operates two pipelines, each 1,224 kilometers
+long, that transport natural gas from Russia to Germany. Under an
+agreement dated December 18, 2019, E.ON Beteiligungen GmbH
+sold and transferred all of the shares of PEGI, and consequently the
+indirect interest in Nord Stream AG, to E.ON Pension Trust e.V.
+(EPT), with effect on and for account of the trust assets of MEON
+Pensions GmbH & Co. KG (MEON). EPT acts as trustee under the
+Contractual Trust Arrangement (CTA), with MEON as trustor, which
+has bundled the benefit obligations and the plan assets of compa-
+nies of the E.ON Group and is responsible for fulfillment of the
+acquired benefit obligations and the investment of the plan assets
+transferred for this purpose. There are additional CTA trust agree-
+ments with EPT as trustee with companies of the E.ON Group as
+trustors. Based on the assets, as of the end of 2019 MEON, with a
+volume of €2.9 billion, is the largest trustor within the framework
+Nord Stream 1
+payment for the waiver of pre-emptive rights of the Slovak state.
+The transaction therefore had no material impact on cash flows
+from investing activities in 2020. Transaction costs of €2 million
+incurred for this purpose were recognized in the income statement
+under other operating expenses in 2020. The costs were mainly
+incurred for consulting services. Compared to the status of the
+acquired assets and liabilities at fair value at acquisition and the
+difference as of December 31, 2020, as presented in the 2020
+Annual Report, there have been no significant changes. The purchase-
+price allocation is now final after the end of the twelve-month
+adjustment period.
+(8) Other Operating Income and Expenses
+The consideration transferred for the acquisition of shares amounted
+to €739 million. The purchase price to be paid to RWE was not
+recognized directly in income, but was offset against a receivable
+still outstanding with RWE from the completed acquisition of the
+innogy shares. The purchase price to be paid included a compensation
+The table below provides details of other operating income for the
+periods indicated:
+€ in millions
+The gain on the disposal of property, plant and equipment and
+securities consisted primarily of gains on the disposal of Rampion
+Renewables Limited in the amount of €64 million. In 2020 there
+were gains on the disposal of the Heizstrom Nord and Heizstrom
+Süd companies in the amount of €160 million. Gains were realized
+on the sale of securities in the amount of €41 million (2020:
+€23 million).
+Commodity derivatives generated income in the amount of
+€43,909 million. These are partly offset by material expenses for
+procurement transactions realized at market price. In addition, this
+resulted in significantly higher provisions, additions to which are
+recognized under materials expense (see Note 26 >). In addition,
+income from derivative financial instruments (including currency
+derivatives) includes realized income from currency derivatives of
+€339 million (2020: €1,679 million). Conversely, income from cur-
+rency translation effects decreased by €586 million to €478 million.
+Corresponding items from derivative financial instruments (includ-
+ing currency derivatives) are included in other operating expenses.
+Income and expenses from derivative financial instruments (including
+currency derivatives) relate to fair value measurement under IFRS 9.
+Income from derivative financial instruments increased year-on-year
+by €38,831 million to €44,737 million, mainly due to sharp rises in
+energy prices on the commodity markets.
+Other operating income increased by €38,476 million to
+€47,383 million (2020: €8,907 million).
+8,907
+47,383
+1,416
+1,653
+155
+469
+360
+52
+5,906
+44,737
+Total
+Gain on the reversal of provisions
+Miscellaneous
+Gain on disposal of non-current assets and
+securities
+2020
+1,064
+478
+Income from exchange rate differences
+Gain on derivative financial instruments
+(including currency derivatives)
+2021
+Other Operating Income
+E.ON completed the acquisition of 49 percent of the shares in
+Východoslovenská energetika Holding s.a. (VSEH), based in Košice,
+Slovakia, from RWE on August 21, 2020. VSEH consists of various
+business segments, of which the electricity distribution segment
+accounts for the largest share. With this transaction, E.ON broadened
+its business portfolio in the areas of energy networks and customer
+solutions in Slovakia. E.ON has a controlling influence within the
+meaning of IFRS 10 due to its extensive decision-making powers over
+the business activities of VSEH, so that VSEH and its subsidiaries
+were fully consolidated in the E.ON consolidated financial statements
+and a business combination was recognized in accordance with
+IFRS 3.
+Acquisition of Shares in VSE Holding
+In addition, on September 23, 2020, E.ON sold its subsidiary E.ON
+Energiakereskedelmi Kft. ("EKER")-which is responsible for E.ON's
+non-regulated commercial electricity retail business in Hungary-to
+Audax Renovables. The parties have agreed not to disclose the pur-
+chase price. Because of the obligation to dispose of these activities,
+E.ON has already reported the business of EKER as a disposal group
+pursuant to IFRS 5 with effect from September 30, 2019. With the
+completion of these transactions, E.ON has fully complied with the
+antitrust requirements in connection with the innogy acquisition.
+E.ON had previously withdrawn from operating individual charging
+stations for electric vehicles on German motorways.
+-5,389
+Deferred taxes (net)
+Current
+1,651
+478
+2,649
+2,283
+2,993
+519
+287
+676
+Of the deferred taxes reported, a total of -€730 million was charged
+directly to equity (2020: -€797 million charge). In addition,
+€48 million in current taxes (2020: €49 million) was also recognized
+directly in equity.
+Consolidated Financial Statements 196
+→ Consolidated Statement of Recognized Income and Expenses
+→ Notes
+→ Consolidated Statement of Changes in Equity
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Income taxes recognized in other comprehensive income for the
+years 2021 and 2020 break down as follows:
+Income Taxes on Components of Other Comprehensive Income
+-5,389
+-13,176
+-13,176
+8,382
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 191
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+Netting
+842
+Miscellaneous other operating income included effects from the
+refund of prior purchases of residual electricity volumes amounting
+to around €0.5 billion. Recognition of own-use contracts as liabili-
+ties in the amount of €99 million in the framework of the innogy
+purchase-price allocation (2020: €297 million). In addition, income
+from transactions other than ordinary business activities in the
+amount of €221 million (2020: €200 million), income from contract
+penalties €70 million (2020: €64 million), and rental and lease
+interest in the amount of €58 million (2020: €63 million) were
+presented here.
+846
+691
+17,216
+15,825
+10,867
+8,382
+-2,389
+-3,195
+14,827
+15,825
+7,672
+809
+E.ON Annual Report 2021
+Contents
+Search
+€ in millions
+Financial Results
+The following table provides details of financial results for the periods
+indicated:
+(10) Financial Results
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 194
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+In addition, the recognition of provisions for pending transactions
+was included in the materials expense. These provisions were
+primarily recognized for contracted sales transactions that are not
+subject to IFRS 9 (so-called own use contracts), but which are eco-
+nomically part of a portfolio that is partly offset by procurement
+transactions to be accounted for as derivative financial instruments.
+The market value measurement of procurement transactions corre-
+spondingly results in other operating income (see also Note 8 →).
+Cost of materials of €78,096 million was significantly higher than
+the prior-year level of €47,147 million. This increase was mainly due
+to higher energy prices on the commodity markets. These factors
+have generated higher direct procurement costs and also have led
+to adjustments of the corresponding expenses to the current market
+price at the time of realization in the case of forward procurement
+contracts that are to be accounted for as derivative financial instru-
+ments in accordance with IFRS (so-called failed own use contracts).
+Accordingly, income from the realization of commodity derivatives
+are recognized in other operating income.
+47,147
+78,096
+15,548
+15,095
+Expenses for purchased services
+Total
+2021
+2020
+Income/Loss from companies in which equity
+investments are held
+Deferred taxes (gross)
+2,895
+45
+3,109
+39
+Miscellaneous provisions
+4,446
+91
+2,042
+25
+Liabilities (including derivative financial instruments)
+31,599
+6,315
+2,968
+465
+Loss carryforwards
+482
+538
+Tax credits
+1
+Other
+Subtotal
+Changes in value
+2,085
+1,649
+63,001
+2020
+Loss on derivative financial instruments
+Loss from exchange rate differences
+5,787
+100
+42
+26,486
+641
+885
+2020
+2021
+€ in millions
+Other Operating Expenses
+The following table provides details of other operating expenses for
+the periods indicated:
+The effects of foreign currency translation within other operating
+income amounted to €849 million (2020: €874 million).
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+Consolidated Financial Statements 193
+Back
+↑
+(including exchange rate changes)
+Taxes other than income taxes
+Loss on disposal of non-current assets and
+securities
+2021
+outstanding (in millions)
+Cost of Materials
+nance costs.
+The principal components of expenses for raw materials and supplies
+and for purchased goods are the purchase of gas and electricity.
+Fuel supply is also included in this line item. Expenses for purchased
+services consist primarily of network usage charges and mainte-
+(9) Cost of Materials
+Foreign currency translation effects within other operating
+expenses amounted to €1,161 million (2020: €874 million).
+Miscellaneous other operating expenses includes effects from the
+recognition of own-use contracts capitalized in connection with
+innogy's purchase-price allocation amounting to €163 million (2020:
+€563 million). Also included are consulting and audit fees in the
+amount of €139 million (2020: €287 million), advertising and mar-
+keting expenses in the amount of €196 million (2020: €174 million),
+rents and leases in the amount of €53 million (2020: €44 million),
+and third-party services and pass-through charges in the amount
+of €971 million (2020: €722 million). Additionally reported under
+this item are IT expenses in the amount of €444 million (2020:
+€396 million), office expenses in the amount of €117 million (2020:
+€125 million), insurance premiums in the amount of €61 million
+(2020: €57 million), travel expenses in the amount of €40 million
+(2020: €50 million), contributions and fees in the amount of €67 mil-
+lion (2020: €99 million), and repair expenses in the amount of
+€86 million (2020: €83 million).
+Expenses from exchange rate differences in the amount of
+€885 million increased by €244 million compared with the previous
+year (€641 million).
+In addition, expenses from derivative financial instruments (including
+currency derivatives) includes realized expenses from currency
+derivatives of €51 million (2020: €1,917 million).
+Expenses for raw materials and supplies
+and for purchased goods
+Expenses from commodity derivatives in the amount of €25,990 mil-
+lion were partly offset by revenues for sales transactions realized at
+market price.
+10,919
+31,665
+Total
+317
+3,941
+3,724
+Miscellaneous
+319
+Write-down of current assets
+133
+209
+Other operating expenses of €31,665 million were €20,746 million
+higher than in the previous year (€10,919 million). The increase is
+due to the €20,699 million rise in expenses from derivative financial
+instruments (including currency derivatives) to €26,486 million.
+Similar to the development in income from derivative financial
+instruments, this was mainly due to a sharp rise in energy prices on
+the commodity markets.
+4,691
+186
+2,608
+1,017
+E.ON Annual Report 2021
+102
+2,607
+The computation of diluted earnings per share is identical to that of
+basic earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares.
+1,199
+→ Notes
+The Group adjustments shown in the tables mainly relate to good-
+will determined as part of initial recognition, temporary differences,
+changes in ownership interests, exchange-rate effects and effects
+from the elimination of intragroup profits.
+Presented in the tables at the side are significant line items of the
+aggregated balance sheets and of the aggregated income state-
+ments of the joint ventures accounted for under the equity method,
+Enerjisa Enerji A.Ş., Enerjisa Üretim Santralleri A.Ş. and Západoslo-
+venská energetika a.s.
+The material associates and the material joint ventures are active in
+diverse areas of the gas and electricity industries. Disclosures of
+company names, registered offices and equity interests as required
+by IFRS 12 for material joint arrangements and associates can be
+found in the list of shareholdings pursuant to Section 313 (2) HGB
+(see Note 38 →).
+As of December 31, 2021, the investment in Enerjisa Enerji A.Ş. is
+marketable. The pro rata market value amounted to €399 million as
+of December 31, 2021 (2020: €649 million). The carrying amount
+is €253 million as of December 31, 2021. The free float in the com-
+pany totals 20 percent, with E.ON and Haci Ömer Sabanci Holding
+A.Ş. holding half of the remaining shares; from E.ON's perspective,
+Enerjisa Enerji A.Ş. is therefore a joint venture.
+Of investments in associates, the shareholdings in companies with
+a carrying amount of €129 million (2020: €137 million) are restricted
+because it was pledged as collateral for financing as of the balance
+sheet date.
+There are no further material restrictions apart from those contained
+in standard legal and contractual provisions.
+Material Joint Ventures-Balance Sheet Data as of December 31
+€ in millions
+Non-current assets
+Current assets
+1,977
+Západoslovenská
+energetika a.s. (ZSE)
+Enerjisa Üretim Santralleri A.Ş.
+2021
+2020
+2021
+2020
+2021
+2020
+1,174
+1,090
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Enerjisa Enerji A.Ş.
+Consolidated Financial Statements 209
+803
+6
+32
+13
+7
+-4
+16
+3
+1
+1
+11
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+-6
+27
+9
+33
+14
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+15
+1,359
+256
+11
+10
+424
+301
+168
+187
+649
+649
+318
+815
+384
+10
+525
+227
+620
+807
+480
+851
+49.00
+49.00
+40.00
+40.00
+50.00
+274
+255
+174
+65
+865
+752
+420
+368
+Current liabilities (including provisions)
+336
+309
+935
+909
+341
+230
+339
+819
+810
+510
+1,013
+403
+537
+Cash and cash equivalents
+11
+83
+27
+Non-current liabilities (including provisions)
+15
+4
+50.00
+24
+-6
+1
+-4
+-3
+30
+-7
+1
+-1
+37
+Fleet, office and business equipment
+Technical equipment and machine
+-2
+-1
+1
+-2
+17
+7
+10
+Storage, e-charging and production capacities
+1,828
+-274
+15
+168
+-9
+3
+-15
+3
+-220
+3,106
+-11
+-100
+415
+19
+-19
+2,802
+Right-of-use assets
+101
+-77
+-1
+1
+20
+-53
+-2
+2
+-44
+178
+-36
+52
+11
+-2
+4
+2,479
+46
+29
+-17
+-24
+41
+-3
+326
+82
+20.00
+20.00
+238
+39.93
+39.90
+36.85
+36.85
+6
+-3
+-10
+16
+-1
+120
+30
+39.90
+-17
+13
+-61
+854
+885
+1,357
+1,209
+20
+-10
+37
+28
+14
+87
+36
+1
+2
+1
+30
+25
+34
+11
+12
+13
+19
+9
+-7
+-207
+134
+323
+248
+€ in millions
+Raw materials and supplies
+Goods purchased for resale
+2021
+2020
+€ in millions
+Current
+December 31, 2021
+Non-current
+December 31, 2020
+Current
+December 31,
+Non-current
+594
+Receivables from finance leases¹
+44
+217
+44
+245
+227
+140
+Other financial receivables and financial assets
+1,548
+500
+761
+→ Notes
+Consolidated Financial Statements 210
+8
+Equity-method earnings
+63
+63
+76
+51
+54
+30
+Dividend paid out to E.ON
+Other comprehensive income
+Total comprehensive income
+E.ON Annual Report 2021
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Contents
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+(17) Inventories
+The following table provides a breakdown of inventories as of the
+dates indicated:
+(18) Receivables and Other Assets
+The following table lists receivables and other assets by remaining
+time to maturity as of the dates indicated:
+Inventories
+Receivables and Other Assets
+Search
+16
+401
+Work in progress and finished products
+Total
+3,297
+863
+2,763
+567
+28,111
+29,703
+9,810
+10,788
+11,525
+11,970
+3,244
+3,866
+350
+The cost of raw materials, finished products and goods purchased
+for resale is primarily determined based on the average cost method.
+The change in inventories compared to December 31, 2020, is
+attributable to special depreciation charges due to the decommis-
+sioning of power plants at Preussen Elektra.
+No inventories have been pledged as collateral.
+Other assets
+Other operating assets
+Trade receivables and other operating assets
+Total
+¹See also Note 33.
+As of the reporting date, other financial assets include receivables
+from interests in jointly owned power plants of €138 million
+(2020: €69 million).
+Receivables from derivative financial instruments amounted to
+€23,359 million at the balance sheet date (2020: €3,277 million).
+The increase is primarily due to sharp increases in energy prices on
+the commodity markets.
+Receivables within the scope of IFRS 15 mainly comprise trade
+receivables. Impairment losses on receivables within the scope of
+IFRS 15 totaled €0.3 billion in 2021 (2020: €0.3 billion).
+E.ON Annual Report 2021
+Write-downs totaled €70 million in 2021 (2020: €37 million).
+Reversals of write-downs amounted to €10 million in 2021
+(2020: €12 million).
+377
+67
+90
+324
+397
+Financial receivables and other financial assets
+1,592
+978
+445
+622
+1,051
+1,131
+Trade receivables
+333
+9,947
+Receivables from derivative financial instruments
+14,749
+8,610
+955
+2,322
+Contract assets
+28
+4
+26
+5
+7,714
+8
+20
+Consolidation adjustments
+2021
+2020
+2021
+2020
+Sales
+1,341
+1,211
+2,000
+2,387
+1,062
+2020
+1,025
+129
+130
+140
+108
+75
+45
+Write-downs
+-69
+-69
+-42
+Net income/loss from continuing operations
+-59
+2021
+Enerjisa Enerji A.Ş.
+240
+426
+176
+180
+5
+8
+15
+29
+310
+291
+Enerjisa Üretim Santralleri A.Ş.
+253
+255
+455
+Current financial liabilities
+Non-current financial liabilities
+Equity
+Ownership interest (in %)
+Proportional share of equity
+Consolidation adjustments
+Carrying amount of equity investment
+Material Joint Ventures-Earnings Data
+€ in millions
+Západoslovenská
+energetika a.s. (ZSE)
+331
+-73
+-115
+Interest income/expense
+Income taxes
+-327
+Ownership interest (in %)
+49.00
+49.00
+40.00
+40.00
+50.00
+50.00
+Proportional share of total comprehensive income after taxes
+63
+-361
+63
+-75
+-181
+-164
+Proportional share of net income after taxes
+63
+63
+56
+43
+38
+22
+-54
+-188
+-134
+129
+-17
+-18
+-83
+-127
+-21
+-29
+-32
+-24
+-56
+-36
+8
+-5
+44
+36
+47
+39
+32
+-1
+-274
+-296
+-436
+-372
+129
+111
+-374
+-2
+12
+4,383
+230
+1,883
+Associates¹
+2,651
+698
+Joint
+ventures¹
+1,732
+181
+Non-current securities
+1,699
+1,887
+Total
+7,929
+1,465
+8,153
+1,913
+3,372
+1,695
+1The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+Companies accounted for under the equity method consist solely of
+associates and joint ventures.
+The €299 million decrease in the carrying amounts of companies
+measured at equity compared with December 31, 2020, was mainly
+due to negative exchange rate effects in Turkey.
+The amount shown for non-current securities relates primarily to
+fixed-income securities.
+In 2021, impairment charges on companies accounted for under
+the equity method totaled €10 million (2020: €27 million) and
+reversals of €2 million (2020: €0 million).
+Impairments on other financial assets amounted to €29 million
+(2020: €92 million). Write-ups totaled €10 million (2020: €0 million).
+The carrying amount of other financial assets with impairment losses
+was €3 million as of the end of the fiscal year (2020: €13 million);
+the carrying amount of the other financial assets written up amounts
+to €17 million (2020: €0 million).
+E.ON Annual Report 2021
+3,349
+Contents
+2,618
+754
+Companies accounted for under the equity method
+Equity investments
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 206
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+network business of ÉMÁSZ Hálózati Kft., which was classified as
+held for sale under IFRS 5. The write-downs were necessary because
+the (expected) selling price was below the carrying amount. As a
+result, the non-current assets of the unit were reduced proportion-
+ately on the basis of the relative carrying amounts. After completion
+of the transaction on August 31, 2021, the ÉMÁSZ distribution
+system operator was deconsolidated in the third quarter of 2021
+(see also Note 5 >). Impairment losses in the Customer Solutions
+UK segment (just under €11 million) were attributable to a large
+number of items, none of which was material.
+Reversals of impairments on property, plant and equipment totaled
+around €20 million in the reporting year, of which €19 million related
+to the Energy Networks Hungary segment. The reversals resulted
+from the ongoing IFRS 5 valuation of E.ON Tiszántúli Áramhálózati Zrt.
+during the year. After the sale was completed on August 31, 2021,
+E.ON ETI was deconsolidated in the third quarter of 2021.
+2,147
+Depreciation amounted to €2,490 million in 2021 (2020:
+€2,381 million).
+(16) Companies Accounted for under the Equity
+Method and Other Financial Assets
+The following table shows the structure of the companies accounted
+for under the equity method and the other financial assets as of the
+dates indicated:
+Companies Accounted for under the Equity Method and Other Financial Assets
+€ in millions
+December 31, 2021
+December 31, 2020
+E.ON Group
+Associates¹
+Joint
+ventures¹
+E.ON Group
+Borrowing costs in the amount of €7 million were capitalized in
+2021 (2020: €26 million) as part of the historical cost of property,
+plant and equipment.
+Contents
+Search
+Back
+295
+Proportional share of other comprehensive income
+-1
+-3
+2
+-6
+1
+-9
+Proportional share of total comprehensive income
+153
+240
+123
+163
+241
+286
+The following tables summarize significant line items of the aggre-
+gated statements of comprehensive income of the associates
+and joint ventures that are accounted for under the equity method.
+The material associates in the E.ON Group are RheinEnergie AG,
+Dortmunder Energie- und Wasserversorgung GmbH and GASAG
+Berliner Gaswerke AG. Rampion Renewables Ltd., which was
+included in the prior year, was sold to RWE at the beginning of the
+current fiscal year.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Material Associates-Balance Sheet Data as of December 31
+88
+↑
+169
+126
+Consolidated Financial Statements 207
+→ Consolidated Statement of Recognized Income and Expenses
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Changes in Equity
+Shares in Companies Accounted for under the
+Equity Method
+The carrying amounts of the immaterial associates accounted for
+under the equity method totaled €1,398 million (2020: €1,575 mil-
+lion), and those of the joint ventures totaled €646 million (2020:
+€946 million).
+Investment income generated from companies accounted for under
+the equity method amounted to €405 million in 2021 (2020:
+€428 million).
+The following table provides an overview of material items in the
+aggregated consolidated statements of comprehensive income of
+the immaterial associates and joint ventures accounted for using
+the equity method:
+Summarized Financial Information for Individually Non-material Associates and Joint Ventures Accounted for under the Equity Method
+86
+Associates
+Total
+€ in millions
+2021
+2020
+2021
+2020
+2021
+2020
+Proportional share of net income from continuing operations
+154
+Joint ventures
+E.ON Annual Report 2021
+Impairments on property, plant and equipment in 2021 amounted
+to just over €78 million. Of this amount, around €28 million was
+incurred in the non-core business at Preussen Elektra. This related
+to assets under construction at the Grohnde joint nuclear | power
+plant and the Brokdorf nuclear power plant. These items of property,
+plant and equipment were fully depreciated when the plants were
+decommissioned on December 31, 2021. Just under €18 million in
+impairment losses were recognized on property, plant and equipment
+in the Energy Networks Germany segment. The largest individual
+item was the full write-off of capitalized project costs in connection
+with the introduction of smart metering systems in the electricity
+and gas sectors. Due to the repeated rescheduling of the rollout and
+changes in the general conditions, these project costs were written
+down to zero. Around €15 million of this related to the Hungarian
+Property, Plant and Equipment
+0
+0
+17,481
+Changes resulting from acquisitions and disposals
+804
+72
+-311
+565
+Impairment charges
+Other changes¹
+0
+4
+-103
+-20
+Net carrying amount of goodwill as of December 31, 2020
+7,879
+92
+760
+6,718
+1,823
+78
+477
+-100
+Growth rate (in %)2, 3
+808
+1,926
+Consolidated Financial Statements 204
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Energy Networks
+Customer Solutions
+Netherlands/
+€ in millions
+Net carrying amount of goodwill as of January 1, 2020
+Germany
+7,879
+Sweden
+6
+ECE/Turkey
+UK
+Belgium
+Other
+Preussen
+Elektra
+Non-Core Business
+Generation
+Turkey
+Corporate
+Functions/
+Other
+E.ON Group
+88
+56
+6,718
+Germany
+0.5
+0.5
+0.5
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 205
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+gas prices in the wholesale and retail markets are based on external
+market data from reputable suppliers as well as internal assessments
+and also appropriately take into account climate-related impacts
+on market conditions and macroeconomic linkages as well as the
+sustainability targets anchored in the Group strategy, such as the
+reduction of Scope 3 emissions by 100 percent by 2050. For exam-
+ple, impacts of climate targets on CO2 prices and changing weather
+conditions (temperature, wind, etc.) are included. The assumed
+development of all of the key influencing factors mentioned corre-
+sponds to the expectations set out in the forecast report.
+E.ON Annual Report 2021
+The above discussion applies accordingly to the testing for impair-
+ment of intangible assets and of property, plant and equipment and
+investments subject to the application of the equity method (IAS 28),
+and of groups of these assets. If the goodwill of a cash-generating
+unit is combined with assets or groups of assets for impairment
+testing, the assets must be tested first.
+As in the previous year, the goodwill impairment testing performed
+in 2021 resulted in the recognition of no impairment charges under
+IAS 36. However, an impairment loss was recognized on the good-
+will of the Slovakian operations after they were classified as held
+for sale under IFRS 5 (see Note 5 → for more information). This
+required impairment amounted to approximately €298 million. It is
+due to the fact that the fair value less the costs of disposal is below
+the carrying amount of the disposal group. An impairment loss in
+such a case will always be allocated first to the carrying amount of
+any goodwill allocated to the disposal group. Likewise, after the
+classification under IFRS 5 as held for sale, smaller amounts of good-
+will in Belgium (€5 million, Essent's distribution business) and in
+Hungary (€3 million, at the Hungarian companies ÉMÁSZ DSO and
+E.ON ETI) were written down (see also Note 5 >).
+The tested goodwill of all cash-generating units whose respective
+goodwill as of the balance sheet date is material in relation to the
+total carrying amount of all goodwill shows a surplus of recoverable
+amounts over the respective carrying amounts and, therefore,
+based on current assessment of the economic situation, only a sig-
+nificant change in the material valuation parameters that is not
+considered realistic would necessitate the recognition of goodwill
+impairment.
+Intangible Assets
+In 2021, approximately €118 million of impairments were recog-
+nized on intangible assets. Intangible assets in the Energy Networks
+Romania segment were written down by €59 million. Earnings
+expectations were lowered against the backdrop of current regula-
+tory developments and sharply rising electricity purchase prices.
+This affected electricity assets at DSO Delgaz Grid, whose new car-
+rying amount after impairment is now €396 million and which will
+be depreciated on a straight-line basis over the remaining fixed
+term of the concession through 2054. The Customer Solutions UK
+segment accounted for around €35 million of this, mostly for con-
+tractual intangible assets in connection with an electricity and gas
+supply contract, which was fully written down due to the changing
+market conditions, especially towards the end of the year. The
+impairment loss in the Corporate Functions division amounted to
+just over €11 million. This item was used to capitalize IT project
+costs in the past that can now no longer be used in the future, and
+it was also written down to zero.
+Reversals of impairments on intangible assets only in the amount
+of €0.1 million were recognized in the reporting year.
+In 2021, the Company recorded an amortization expense of
+€850 million (2020: €931 million).
+The closing balance of intangible assets not subject to amortization
+amounted to €307 million as of December 31, 2021 (2020:
+€301 million). These assets are mainly attributable to the Energy
+Networks Germany segment and are largely attributable to ease-
+ments/rights of way for which the contractual basis does not pro-
+vide for a time limitation.
+€59 million in research and development costs as defined by IAS 38
+were expensed in the reporting year (2020: €62 million).
+Rights of Use
+In 2021, the Company recorded an amortization expense of
+€382 million (2020: €374 million). Impairment charges on rights
+of use amounted to €1 million (2020: €2 million).
+Goodwill
+The principal assumptions underlying the determination by manage-
+ment of recoverable amount are the respective forecasts for E.ON'S
+investment activity, changes in the regulatory framework, as well
+as for rates of growth and the cost of capital, of revenue and
+EBITDA margin (in the Customer Solutions business) and Regula-
+tory Asset Base and regulatory return (in the Energy Networks
+business). The assumptions used in these forecasts regarding the
+development of commodity market prices, future electricity and
+annual impairment test are calculated using market data for each
+cash-generating unit, and as of the valuation date, ranged between
+3.1 and 8.5 percent after taxes (2020: between 3.0 and 7.2 percent).
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for impair-
+ment-testing purposes are generally based on the three planning
+years of the medium-term plan plus two additional detailed planning
+years. Deviations from this are made in certain justified exceptional
+cases. The cash flow assumptions extending beyond the detailed
+planning period are determined using sustainable, currency-specific
+growth rates based on the analysis of past years and predictions for
+the future. In 2021, the sustainable, currency-specific inflation rate
+used for the euro area was 0.5 percent (2020: 0.5 percent) unless
+a lower growth rate was justified for that cash-generating unit. The
+discount rates after taxes used for discounting cash flows in the
+Cost of capital (in %)2.3
+3.0
+4.7
+5.3
+Other non-current assets4
+Impairment
+-12
+Reversals
+-139
+2
+-53
+-112
+-59
+-5
+2
+1
+¹Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+³Energy Networks Germany was valued with a detailed planning period of 3 years and on the basis of the regulatory asset base.
+4Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.
+-219
+17,827
+-24
+-404
+1
+Goodwill and Intangible Assets
+The changes in goodwill within the segments, as well as the alloca-
+tion of impairments and their reversals to each reportable segment,
+are presented in the tables on pages 201 through 204 →.
+Impairments
+To perform the impairment tests, E.ON first determines the fair values
+less costs to sell of its cash-generating units. Because there were
+no binding sales transactions or market prices for the respective
+cash-generating units in 2021, fair values were calculated based on
+discounted cash flow methods.
+€ in millions
+Non-current assets¹
+Current assets
+Current liabilities (including provisions)
+Non-current liabilities (including provisions)
+Equity
+-9
+7
+ི ། ། །ཋ
+-28,833
+-48
+-680
+1,483
+2,569
+67,669
+-1,465
+-32
+-727
+2,471
+-146
+-7
+84
+-56
+134
+ཆ །༞། 」
+-283
+64,583
+Property, plant and equipment
+-3
+2,625
+Advance payments and construction in progress
+1,381
+3,749
+-12
+49
+-2
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+1Also include reclassification to assets held for sale/disposal groups.
+2,515
+36,923
+-30,746
+6
+-2
+-171
+405
+-2,381
+100
+-54
+2
+-11
+1
+2
+700
+-783
+5
+1,234
+Other equipment, fixtures, furniture and office
+equipment
+-28,034 30,451
+100
+-9
+-57
+3,839
+Buildings
+1,094
+-58
+-5
+4
+-2
+-22
+-1
+1,152
+29
+-17
+17
+11
+1
+1,111
+Real estate and leasehold rights
+2,543
+-563
+-54
+129
+Technical equipment, plant and machinery
+55,774
+4
+-154
+9
+345
+-2,112
+99
+99
+-26,324
+2,163
+-1,817
+-4
+2
+5
+-121
+10
+18
+-1,727
+3,980
+58,485
+1,191
+-625
+2,117
+240
+-212
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+33
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2020
+2021
+RheinEnergie AG
+2021
+2020
+Rampion Renewables Ltd.²
+2021
+2020
+2021
+Dortmunder Energie- und
+Wasserversorgung GmbH
+2020
+GASAG Berliner Gaswerke AG
+2021
+2020
+→ Notes
+3,082
+1,529
+1,438
+2,057
+1,940
+719
+453
+135
+143
+582
+319
+3,369
+555
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Non-controlling interests
+Ownership interest (in %)
+Proportional share of equity
+Consolidation adjustments
+Carrying amount of equity investment
+¹Undisclosed accruals/provisions from acquisitions are recognized in assets.
+2As of December 31, 2020, the investment is reported as an asset held for sale.
+Material Associates-Earnings Data
+€ in millions
+Sales
+Consolidated Financial Statements 208
+Net income/loss from continuing operations
+Net income from discontinued operations
+Dividend paid out to E.ON
+Other comprehensive income
+Total comprehensive income
+Ownership interest (in %)
+Proportional share of total comprehensive income after taxes
+Proportional share of net income after taxes
+Consolidation adjustments
+Equity-method earnings
+→ Consolidated Balance Sheets
+Non-controlling interests in the net income/loss from continuing operations
+524
+221
+134
+358
+248
+166
+166
+55
+55
+107
+73
+518
+539
+162
+237
+465
+321
+RheinEnergie AG
+2021
+2020
+Rampion Renewables Ltd.
+2021
+2020
+2021
+Dortmunder Energie- und
+Wasserversorgung GmbH
+2020
+GASAG Berliner Gaswerke AG
+217
+182
+372
+352
+565
+491
+1,487
+1,437
+986
+1,041
+1,103
+1,094
+1,759
+1,861
+457
+406
+971
+674
+4
+4
+20.00
+20.00
+39.93
+39.90
+39.90
+36.85
+36.85
+2020
+4,083
+-164
+-1
+34
+-6
+-4
+1
+-9
+25
+Fleet, office and business equipment
+178
+4
+-3
+72
+-49
+202
+-1
+-77
+-53
+33
+-100
+102
+Right-of-use assets
+3,106
+13
+-12
+413
+-238
+-2
+3,280
+-563
+-3
+5
+30
+Technical equipment and machine
+-204
+-3
+3
+-110
+30
+-1
+-285
+545
+Networks
+2,102
+222
+-126
+-1
+2,197
+-274
+1
+25
+-213
+2
+1
+-458
+1,739
+Storage, e-charging and production capacities
+17
+17
+-2
+-2
+-4
+13
+-5
+28
+-382
+66
+4,484
+57,533 -28,034
+-1,817
+-6
+-1
+-151
+8
+-3
+-4
+-1,974
+2,510
+-52
+166
+-2,171
+2,541
+75
+-30
+19 -27,486 30,047
+1,483
+11
+-164
+Advance payments and construction in progress
+2,569
+4
+Property, plant and equipment
+67,669
+119
+-39
+-1,285
+130
+1,520
+3,804
+-132
+-5
+813
+830
+-2,738
+-1,190
+-1
+-856
+2,424
+Real estate and leasehold rights
+1,152
+-1
+57
+16
+-23
+2
+1,203
+-58
+-1
+-17
+-4
+2
+-1
+-79
+1,124
+Buildings
+3,980
+13
+51
+67
+1
+372
+Technical equipment, plant and machinery
+Other equipment, fixtures, furniture and office
+equipment
+58,485
+92
+2,071
+-1
+-62
+114
+of consol-
+idation Additions Disposals Transfers
+19,192
+-1,784
+Customer relationships and similar items
+2,286
+12
+-154
+1
+-102
+109
+2,152
+-945
+-12
+38
+-270
+102
+། ་།ཎྜ
+-108
+-33
+Impair-
+ment Reversals
+Dec. 31,
+2021
+Dec. 31,
+2021
+-1,784
+17,408
+-1,228
+924
+Concessions, commercial property rights,
+licenses, and similar rights
+rate dif-
+ferences
+3,211
+2021
+Disposals Transfers
+-10
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+(15) Goodwill, Intangible Assets, Right-of-use
+Assets and Property, Plant and Equipment
+The changes in goodwill and intangible assets, in right-of-use
+assets, and in property, plant and equipment, are presented in the
+tables on the following pages:
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+Acquisition and production costs
+Consolidated Financial Statements 201
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Accumulated depreciation
+Net
+carrying
+amounts
+€ in millions
+Jan. 1,
+2021
+Exchange
+rate dif-
+ferences
+Goodwill
+19,611
+133
+Changes
+in scope
+of consol-
+idation¹
+-552
+Changes
+Exchange
+in scope
+Dec. 31,
+Jan. 1,
+Additions
+2021
+72
+-12
+662
+366
+-18
+-1
+-1
+20
+-11
+-11
+355
+Intangible assets
+6,719
+28
+-265
+1,008
+-1,114
+133
+6,509
+-2,864
+-29
+79
+-850
+932
+-106
+-118
+-2,956
+3,553
+Land and buildings
+779
+9
+-9
+-192
+-112
+-27
+2
+-788
+128
+3,089
+-1,328
+3
+41
+-453
+613
+-5
+-71
+-1,200
+1,889
+Development expenditures
+888
+26
+1
+-197
+88
+902
+-573
+-19
+-126
+197
+7
+-3
+-517
+385
+Advance payments
+334
+249
+-2,897
+96
+1,400
+2,717
+67,337
+-945
+1,341
+Concessions, commercial property rights,
+licenses, and similar rights
+2,742
+-60
+36
+510
+-132
+115
+3,211
+-866
+14
+-70
+5
+106
+-7
+-59
+-1,328
+1,883
+Development expenditures
+720
+-13
+14
+72
+-57
+152
+888
+-521
+10
+-279
+10
+idation¹ Additions Disposals
+Transfers
+2020
+2020
+ences
+idation Additions Disposals Transfers
+ment
+Reversals
+Dec. 31,
+2020
+Dec. 31,
+2020
+Goodwill
+19,271
+-153
+493
+19,611
+-1,790
+6
+-1,784
+17,827
+Customer relationships and similar items
+2,218
+-20
+89
+8
+-10
+1
+2,286
+-625
+9
+-357
+8
+-134
+52
+-1
+-231
+-2,864
+3,855
+Land and buildings
+727
+-11
+4
+102
+-43
+779
+-100
+1
+-3
+-109
+8
+-1
+-204
+575
+Networks
+1,860
+1
+6
+260
+-14
+-11
+2,102
+-1,332
+-73
+-71
+175
+ences
+-931
+33
+-47
+-95
+-573
+315
+Advance payments
+379
+-8
+1
+199
+-15
+-222
+334
+-73
+2
+-3
+3
+7
+53
+-7
+316
+Intangible assets
+6,059
+-101
+140
+789
+-214
+46
+6,719
+-1,921
+12
+Impair-
+-18
+in scope
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2021
+Energy Networks
+Customer Solutions
+Netherlands/
+€ in millions
+Net carrying amount of goodwill as of January 1, 2021
+Germany
+7,879
+Sweden
+ECE/Turkey
+Germany
+UK
+Belgium
+Other
+Preussen
+Elektra
+Non-Core Business
+Generation
+Turkey
+Corporate
+Functions/
+Other
+E.ON Group
+92
+Changes resulting from acquisitions and disposals
+760
+-76
+6,718
+1,823
+78
+477
+0
+0
+0
+17,827
+-5
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 202
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+-7
+of consol-
+-783
+25
+122
+-54
+-1
+1
+-30,746
+-67
+173
+-2,490
+2,674
+བྷ「 ་ ། 」
+-81
+-3
+-78
+||||
+-845
+-93
+555
+2,624
+20
+-30,477
+36,860
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+-40
+Impairment charges
+1Also include reclassification to assets held for sale/disposal groups.
+-31
+-31
+-12
+-197
+20
+19
+¹Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+³Energy Networks Germany was valued with a detailed planning period of 3 years and on the basis of the regulatory asset base.
+4Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+Consolidated Financial Statements 203
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Acquisition and production costs
+Accumulated depreciation
+Net
+carrying
+amounts
+€ in millions
+Jan. 1,
+2020
+Exchange
+rate
+differ-
+Changes
+in scope
+of consol-
+Dec. 31,
+Other changes¹
+Jan. 1,
+Exchange
+rate
+differ-
+Changes
+-12
+-2
+→ Notes
+-1
+-5
+-432
+-46
+5
+Net carrying amount of goodwill as of December 31, 2021
+7,848
+90
+252
+127
+1,950
+73
+477
+-338
+17,408
+-2
+Growth rate (in %)2, 3
+6,718
+Other non-current assets4
+0.5
+0.5
+0.5
+Cost of capital (in %)2.3
+-18
+3.1
+4.9
+4.8
+1
+Impairment
+Reversals
+-75
+securities
+E.ON Group
+Remeasurements of
+defined benefit plans
+Available-for-sale
+1
+-82
+Currency translation
+adjustments
+→ Notes
+Cash flow hedges
+Consolidated Financial Statements 215
+-1
+1
+284
+4,130
+5,836
+Corporate Functions/Other
+297
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+-221
+E.ON Annual Report 2021
+-8
+In compliance with IFRS 12, the following tables include subsidiaries
+with significant non-controlling interests and provide an overview
+of significant items on the aggregated balance sheet and on the
+aggregated income statement, and significant cash flow items. The
+list of shareholdings pursuant to Section 313 (2) HGB (see Note
+38) contains information on the registered office of the company
+and disclosures on equity interests.
+Subsidiaries with Material Non-controlling Interests-Balance Sheet Data as of December 31
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+-34
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+201
+-202
+199
+-112
+-11
+-400
+-90
+11
+-179
+10
+-58
+Germany
+74
+Changes
+2020
+2021
+Energy Networks
+€ in millions
+Balance as of January 1, 2020
+December 31,
+€ in millions
+Non-Controlling Interests
+Share of OCI Attributable to Non-controlling Interests
+The table below illustrates the share of OCI that is attributable to
+non-controlling interests:
+Non-controlling interests by segment as of the dates indicated are
+shown in the following table:
+(24) Non-controlling Interests
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+↑
+€ in millions
+→ Consolidated Statement of Income
+Back
+4,955
+Non-Core Business
+3,627
+3,051
+297
+Other
+2
+Netherlands/Belgium
+2
+2
+UK
+175
+343
+Germany
+253
+642
+Customer Solutions
+Balance as of December 31, 2021
+576
+646
+ECE/Turkey
+Sweden
+Balance as of December 31, 2020
+Changes
+4,309
+Non-controlling interests in equity
+disclosed is determined retrospectively as the discount rate that
+leads to the identical present value of the defined benefit obligation
+when applied uniformly. The yield curve used was previously derived
+on the basis of an internal E.ON procedure from currency-specific
+yields on high-quality corporate bonds determined as of the balance
+sheet date. As of the reporting date on June 30, 2021, the "RATE:Link"
+interest rate curve from provider Willis Towers Watson was used
+for the first time to determine the discount rates for the EUR and
+GBP currency areas. As of December 31, 2021, the adjustment will
+reduce the discount rate in Germany by 10 basis points compared
+to the previous method and result in a corresponding actuarial loss
+of €368 million. In the following year there will be an increase in
+service cost of €7 million and a decrease in net interest expense of
+€1 million. The adjustment has no effect on the discount rate appli-
+cable to the UK as of the reporting date.
+Dividends paid out to non-controlling interests
+Percentages
+2021
+2020
+December 31,
+2019
+To measure the E.ON Group's occupational pension obligations for
+accounting purposes, the Company has employed the current ver-
+sions of the biometric tables recognized in each respective country
+for the calculation of pension obligations:
+Actuarial Assumptions (Mortality Tables)
+Germany
+United Kingdom
+2018 G versions of the Heubeck biometric tables (2018)
+"S3" series base mortality tables with the CMI 2020
+projection model for future improvements
+Actuarial Assumptions
+Changes in the actuarial assumptions described previously would
+lead to the following changes in the present value of the defined
+benefit obligations:
+Germany²
+United Kingdom
+1.60
+1.60
+3.10
+2.70
+1.60
+2.90
+Sensitivities
+Pension increase rate
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at E.ON's
+German and UK subsidiaries as of the respective balance sheet date
+are as follows:
+1.80/2.90
+1.90/2.80
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Search
+→ Notes
+Discount rate
+Germany
+1.10
+0.80
+United Kingdom
+1.90
+1.40
+1.30
+2.00
+Wage and salary growth rate
+Germany
+2.35
+2.35
+2.35
+United Kingdom¹
+2.20/3.20
+Change in the present value of the defined benefit obligations
+¹Different salary growth rates due to different benefit plans (E.ON: 2.20 percent [2020: 1.90 percent];
+innogy: 3.20 percent [2020: 2.80 percent]).
+December 31, 2021
+December 31, 2020
+-25
++25
+-25
+2.12
+-2.02
+2.17
+-2.09
++10
+- 10
++10
+- 10
+-3.69
+3.97
+-3.84
+4.12
+E.ON Annual Report 2021
+Current assets
+Non-current assets
+Operating cash flow
++25
+Non-controlling interests in equity (in %)²
+-0.36
+-0.27
+2The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+guarantee adjustment.
+Change in the discount rate by (basis points)
+Change in percent
++50
+- 50
++50
+- 50
+-7.76
+8.89
+-8.17
+9.34
+The IAS 19 discount rates for the EUR and GBP currency areas are
+determined on the basis of the single equivalent discount rate
+method. The full yield curve is used to determine the present value
+of the defined benefit obligation, and the IAS 19 discount rate
+Change in the pension increase rate by (basis points)
+Change in percent
+Change in mortality by (percent)
+Change in percent
+Change in the wage and salary growth rate by (basis points)
+Change in percent
++25
+-25
++25
+-25
+0.28
+0.37
+Contents
+In addition, the E.ON Group had contingent assets as of December 31,
+2021, of just over €15 million (2020: €0 million).
+-1,921
+Consolidated Financial Statements 212
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Pursuant to a resolution by the Annual Shareholders Meeting of
+May 28, 2020, the Management Board is authorized to purchase
+own shares until May 27, 2025. The shares purchased, combined
+with other treasury shares in the possession of the Company, or
+attributable to the Company pursuant to Sections 71a et seq. AktG,
+may at no time exceed 10 percent of its capital stock. The Manage-
+ment Board was authorized at the aforementioned Annual Share-
+holders Meeting to cancel any shares thus acquired without requir-
+ing a separate shareholder resolution for the cancellation or its
+implementation. The total number of outstanding shares as of
+December 31, 2021, was 2,608,995,172 (December 31, 2020:
+2,607,369,233). As of December 31, 2021, E.ON SE held a total of
+32,323,628 treasury shares (December 31, 2020: 33,949,567)
+having a book value of €1,094 million (equivalent to approximately
+1.22 percent or €32,323,628 of the capital stock).
+(20) Capital Stock
+Cash and cash equivalents include €2,371 million (2020:
+€2,667 million) in checks, cash on hand and balances at financial
+institutions with an original maturity of less than three months, to
+the extent that they are not restricted.
+In 2021, there was €42 million in restricted cash (2020: €40 million)
+with a maturity greater than three months.
+31
+32
+24
+31
+2020
+The capital stock is subdivided into 2,641,318,800 registered
+shares with no par value (no-par-value shares) and amounts to
+€2,641,318,800 (2020: €2,641,318,800). The capital stock of the
+Company was provided by way of conversion of E.ON AG into a
+European Company (SE) and through a capital increase carried out
+on March 20, 2017, partially using the Authorized Capital 2012,
+which expired on May 2, 2017, and through a capital increase
+entered in the commercial register of the Company on September 19,
+2019, making extensive use of the Authorized Capital 2017.
+→ Notes
+The Company has further been authorized by the Annual Share-
+holders Meeting of May 28, 2020, to buy shares using derivatives
+(put or call options, or a combination of both). When derivatives in
+the form of put or call options, or a combination of both, are used
+to acquire shares, the option transactions must be conducted with
+a financial institution or a company operating in accordance with
+Section 53 (1) sentence 1 or Section 53b (1) sentence 1 or (7) of
+the German Banking Act (KWG) or at market terms on the stock
+exchange. No shares were acquired in the reporting year using this
+purchase model.
+In 2021, employees of German E.ON Group companies had the
+opportunity to purchase E.ON shares at favorable conditions under
+a voluntary employee stock purchase program. As of December 31,
+2021, E.ON SE held a total of 32,323,628 treasury shares (Decem-
+ber 31, 2020: 33,949,567). The employees received a grant of €360
+and an additional one-time grant, provided that specific eligibility
+requirements were met, of up to €360 on the shares subscribed by
+them at the reporting date of September 30, 2021. The applicable
+issue price of the E.ON share was €10.23. A total of 1,625,939
+shares, or 0.06 percent of the share capital of E.ON SE, were used
+and issued to employees with a weighted-average purchase price
+of €19.60 per share.
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+Consolidated Financial Statements 213
+Information on Stockholders of E.ON SE
+The following notices pursuant to Section 33 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+Voting Rights
+Back
+↓
+Search
+Contents
+E.ON Annual Report 2021
+The Conditional Capital 2020 was not used.
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise by
+holders of option or conversion rights, and those arising from com-
+pliance with the mandatory conversion of bonds with conversion or
+option rights, profit participation rights or profit participating bonds
+that have been issued or guaranteed by E.ON SE or a Group company
+of E.ON SE as defined by Section 18 AktG under the authorization
+approved by the Annual Shareholders Meeting of May 28, 2020,
+under agenda item 8, and to the extent that no cash settlement has
+been granted in lieu of conversion or exercise of an option or the
+Company exercises its right to grant shares in the Company in whole
+or in part in lieu of payment of the cash amount due.
+The conditional capital increase will be used to grant registered
+no-par-value shares to the holders of convertible bonds or bonds
+with warrants, profit participation rights or income bonds (or com-
+binations of these instruments), in each case with option rights,
+conversion rights, option obligations and/or conversion obligations,
+which are issued by the Company or a Group company of the Com-
+pany as defined by Section 18 of the German Stock Corporation Act
+(AktG), under the authorization approved by the Annual Shareholders
+Meeting on May 28, 2020, under agenda item 8, through May 27,
+2025. The new shares will be issued at the conversion or option price
+to be determined in accordance with the authorization resolution.
+At the Annual Shareholders Meeting of May 28, 2020, shareholders
+approved a conditional increase of the capital stock (with the option
+to exclude shareholders' subscription rights) in the amount of up to
+€264 million (Conditional Capital 2020).
+Subject to the Supervisory Board's approval, the Management
+Board is authorized to exclude shareholders' subscription rights.
+Conditional Capital
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 28, 2020, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase until May 27,
+2025, the Company's capital stock by a total of up to €528,000,000
+through one or more issuances of new registered no-par-value
+shares against contributions in cash and/or in kind (authorized capi-
+tal pursuant to Sections 202 et seq. AktG, Authorized Capital 2020).
+Authorized Capital
+No scrip dividend was offered in the 2021 fiscal year.
+2021
+1,016
+2,668
+4,795
+5,965
+Total
+Balance as of January 1
+€ in millions
+Contract Assets
+The following table shows the opening and closing balances of
+contractual assets within the meaning of IFRS 15:
+Balance as of December 31
+Amortization and impairment
+€ in millions
+Other Assets
+The following table presents the changes in other assets under
+IFRS 15:
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 211
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Consolidated Financial Statements 220
+Contents
+Balance as of December 31
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+(19) Liquid Funds
+2021
+290
+3,634
+Cash and cash equivalents
+735
+Restricted cash and cash equivalents
+1,111
+1,596
+greater than 3 months
+Current securities with an original maturity
+1,111
+1,596
+Securities and fixed-term deposits
+December 31,
+2020
+2021
+€ in millions
+417
+423
+62
+Liquid Funds
+2020
+The following table provides a breakdown of liquid funds by original
+maturity as of the dates indicated:
+E.ON Annual Report 2021
+→ Consolidated Statement of Changes in Equity
+Achieved,
+December 31,
+2020
+Other retained earnings
+Total
+Legal reserves
+€ in millions
+Retained Earnings
+The following table breaks down the E.ON Group's retained earnings
+as of the dates indicated:
+(22) Retained Earnings
+Additional paid-in capital decreased by €15 million to €13,353 mil-
+lion in 2021 (2020: €13,368 million). The reduction in additional
+paid-in capital is attributable to the issue of employee shares to eli-
+gible employees of the E.ON Group.
+2021
+(21) Additional Paid-in Capital
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 214
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+→ Notes
+45
+1,183
+1,228
+-2,116
+Balance as of December 31 (after taxes)
+-1,921
+-2,116
+Balance as of December 31 (before taxes)
+Taxes
+2020
+2021
+€ in millions
+Share of OCI Attributable to Companies Accounted for under the Equity
+Method
+The table below illustrates the share of OCI attributable to companies
+accounted for under the equity method.
+The change in other comprehensive income is primarily the result
+of exchange rate differences recognized on the balance sheet.
+(23) Changes in Other Comprehensive Income
+Retained earnings attributable to shareholders of E.ON SE increased
+by €704 million due to the redemption of the enviaM put option
+and by €6 million due to the reduction of the ownership interest in
+our Hungarian subsidiary E.ON Hungária to 75 percent. In connec-
+tion with this last-mentioned transaction, negative accumulated
+other comprehensive income of €98 million was also transferred
+from the shareholders of E.ON SE to the minority shareholders.
+Equity transactions with subsidiaries that did not result in a change
+of control consequently changed the total equity attributable to
+shareholders of E.ON SE by €797 million (2020: -€2,405 million).
+As of December 31, 2021, these IFRS retained earnings totaled
+€1,228 million (2020: -€5,257 million). The total change of
+€6,485 million is primarily due to the positive consolidated net
+income. In addition, actuarial gains from pensions led to an
+increase in retained earnings.
+A proposal to distribute a cash dividend for 2021 of €0.49 per share
+will be submitted to the Annual Shareholders Meeting. For 2020,
+shareholders at the May 19, 2021, Annual Shareholders Meeting
+voted to distribute a dividend of €0.47 for each dividend-paying
+ordinary share. Based on a €0.49 dividend, the total profit distribu-
+tion is €1,278 million (2020: €1,225 million).
+The amount of retained earnings available for distribution is
+€2,412 million (2020: €2,064 million).
+As of December 31, 2021, these German-GAAP retained earnings
+totaled €2,619 million (2020: €2,254 million). Of this amount, legal
+reserves of €45 million (2020: €45 million) are restricted pursuant
+to Section 150 (3) and (4) AktG. The increase in retained earnings is
+due to the transfer of €350 million from current net income in 2021
+and the sale of treasury shares under the employee stock purchase
+program in 2021. In addition, amounts of €161.7 million (2020:
+€145.5 million) are restricted from distribution under German com-
+mercial law as a result of the surplus of plan assets and the differ-
+ence between the recognition of provisions for retirement benefit
+obligations based on the corresponding average market interest
+rate over the past ten fiscal years and the recognition of these pro-
+visions based on the corresponding average market interest rate
+over the past seven fiscal years. The dividend-restricted amounts
+are fully covered by a sufficient amount of available reserves.
+Under German securities law, E.ON SE shareholders may receive
+distributions from E.ON SE's income available for distribution
+in accordance with the German Commercial Code (German GAAP).
+-5,302
+-5,257
+E.ON Annual Report 2021
+4Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH.
+¹Voluntary Group notification with threshold impact only at subsidiary level; under 5% threshold per notification of June 11, 2021, with threshold impact on June 6, 2021.
+²Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 1 and 2 WpHG.
+³Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 2 WPHG.
+132,657,9363
+Jul. 9, 2021
+Capital Income Builder, Wilmington, USA
+5%
+Aug. 31, 20211
+BlackRock Inc., Wilmington, USA
+Over
+3%
+Nov. 30, 2021
+The Capital Group Companies Inc.,
+Los Angeles, USA
+Absolute
+Percentages
+Allocation
+rights on
+Gained voting
+over or under
+threshold
+Threshold
+Date of notice
+Reporting entity
+Voting rights
+3%
+→ Notes
+Nov. 29, 2021
+Under Aug. 26, 2021
+Under Feb. 9, 2021
+indirect
+5.02
+direct/indirect
+Jun. 5, 2020
+Over
+5%
+Jun. 9, 2020
+79,741,4423
+396,197,820
+3.02
+15.00
+indirect
+indirect
+Jan. 12, 2021
+Dec. 8, 2020
+Achieved
+15%
+Over
+3%
+Jan. 15, 2021
+RWE Aktiengesellschaft, Essen, Deutschland 4 Dec. 10, 2020
+Canada Pension Plan Investment Board,
+Toronto, Canada
+DWS Investment GmbH, Frankfurt am Main,
+Deutschland
+79,693,259
+129,926,9522
+76,099,176
+3.02
+4.92
+2.88
+direct
+indirect
+→ Consolidated Balance Sheets
+45
+↑
+16
+8
+50
+189
+188
+88
+113
+110
+12
+107
+10
+203
+166
+91
+112
+117
+105
+There are no major restrictions beyond those under customary cor-
+porate or contractual provisions.
+80
+6
+6
+343
+2021
+2020
+2021
+2020
+2021
+2020
+2021
+2020
+3
+26
+62
+15
+22
+38
+29
+31
+939
+933
+363
+With the conclusion of the supplementary agreement to the con-
+sortium agreement at enviaM, the liability from the counterparty
+obligation in the amount of €1.8 billion no longer applied. There
+was a corresponding increase in equity, of which €1.1 billion is
+attributable to minority interests.
+E.ON Annual Report 2021
+Contents
+64
+Total
+28,902
+Fair value of plan assets
+Germany
+16,879
+16,179
+United Kingdom
+Other countries
+6,581
+9
+6,233
+9
+Total
+23,469
+22,421
+Net defined benefit liability/asset (-)
+Germany
+5,806
+7,985
+24,164
+6,187
+Avacon AG¹
+6,175
+42
+United Kingdom
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 217
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+(25) Provisions for Pensions and Similar
+Obligations
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €28.9 billion,
+were covered by plan assets having a fair value of €23.5 billion
+as of December 31, 2021. This corresponds to a funded status
+of 81 percent.
+Provisions for Pensions and Similar Obligations
+30,415
+December 31,
+€ in millions
+2021
+2020
+Present value of all defined benefit obligations
+Germany
+22,685
+Other countries
+United Kingdom
+E.DIS AG¹
+Schleswig-Holstein Netz AG
+2020
+2021
+2020
+378
+306
+1,268
+236
+524
+2021
+531
+541
+54.6
+52.1
+42.5
+41.9
+33.0
+33.0
+38.5
+523
+2020
+Avacon AG¹
+E.DIS AG¹
+Back
+Non-current liabilities
+Current liabilities
+¹Holding Companies without operational business.
+2Calculated share ratio.
+Subsidiaries with Material Non-controlling Interests-Earnings Data
+€ in millions
+Share of earnings attributable to non-controlling interests
+Sales
+Net income/loss
+Comprehensive income
+¹Holding Companies without operational business.
+Consolidated Financial Statements 216
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Schleswig-Holstein Netz AG
+2021
+2020
+envia Mitteldeutsche Energie AG
+2021
+38.5
+67
+67
+30
+142
+121
+103
+667
+731
+551
+726
+19
+17
+61
+61
+527
+451
+559
+569
+198
+91
+499
+290
+67
+envia Mitteldeutsche Energie AG
+463
+125
+30
+50
+50
+168
+357
+169
+177
+-2
+19
+-20
+-44
+1,813
+1,694
+3,701
+3,769
+1,793
+1,609
+1,962
+1,785
+383
+-406
+150
+33
+Changes in scope of consolidation
+Exchange rate differences
+Other
+Defined benefit obligation as of December 31
+-1,366
+-1,191
+-160
+-15
+Benefit payments
+2,514
+541
+325
+-138
+-56
+-86
+4
+-146
+-112
+1,968
+Actuarial gains (-)/losses (+) arising from changes in financial assumptions
+Actuarial gains (-)/losses (+) arising from experience adjustments
+Employee contributions
+-14
+-16
+191
+89
+1
+405
+289
+114
+2
+Remeasurements
+-1,569
+-1,247
+-309
+-13
+2,352
+1,856
+493
+Actuarial gains (-)/losses (+) arising from changes in demographic assumptions
+-65
+-63
+-2
+-34
+11
+9
+2
+-7
+-73
+-7
+-66
+28,902
+22,685
+6,175
+42
+30,415
+24,164
+6,187
+64
+The actuarial gains shown in the table for the development of
+the present value of the defined benefit obligation are primarily
+attributable to an increase in the discount rates used.
+The present value is attributable to retirees and their beneficiaries
+in the amount of €16.3 billion (2020: €16.2 billion), to former
+employees with vested entitlements in the amount of €3.6 billion
+(2020: €3.7 billion) and to active employees in the amount of
+€9 billion (2020: €10.5 billion).
+E.ON Annual Report 2021
+III
+Contents
+Other countries
+Search
+-1
+281
+-8
+-337
+13
+10
+3
+-1,071
+-799
+-269
+-3
+-1,051
+-259
+-3
+-4
+-3
+-1
+-17
+-25
+8
+423
+423
+-338
+-1
+Interest cost on the present value of the defined benefit obligations
+-789
+-6
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 218
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+United Kingdom
+In the United Kingdom, there are various pension plans. In the past,
+employees were covered by defined benefit plans, which for the most
+part were final-pay plans and make up the majority of the pension
+obligations currently reported for the United Kingdom. Benefit pay-
+ments to the beneficiaries are adjusted for inflation on a limited
+basis. These pension plans were closed to new hires. Since then, new
+hires are offered a defined contribution plan. Aside from the payment
+of contributions, this plan entails no additional risks for the employer.
+Plan assets in the United Kingdom are administered by trustees in
+independent special-purpose vehicles, most of which are separate
+sections of the Electricity Supply Pension Scheme (ESPS). The
+trustees are selected by the members of the plan or appointed by
+the entity. In that capacity, the trustees are particularly responsible
+for the investment of the plan assets.
+The Pensions Regulator in the United Kingdom requires that a
+so-called "technical valuation" of the plan's funding status be per-
+formed every three years. The actuarial assumptions underlying the
+valuation are agreed upon by the trustees and E.ON UK plc. They
+include presumed life expectancy, wage and salary growth rates,
+investment returns, inflationary assumptions and interest rate levels.
+The last technical valuation for the E.ON section took place on the
+reporting date of March 31, 2021. This had not yet been concluded
+as of the balance sheet date.
+The overall innogy section was split into two sections (Retail section
+and npower section) at the beginning of 2018. In fiscal
+year 2020,
+the npower section was transferred to RWE as agreed. At no time
+was it part of the scope of obligations presented in the E.ON Group.
+The technical reassessment of the Retail section relevant to the
+E.ON Group resulted in a technical deficit as of March 31, 2019,
+which is to be reduced by annual payments of £3 million through
+March 2029.
+Other Countries
+The remaining pension obligations are divided between the Nether-
+lands, Luxembourg, Sweden, Italy, Poland, Romania, Slovakia, the
+Czech Republic and the USA.
+The defined benefit plan in the Netherlands consists of commitments
+made by various employers within the framework of a sector-specific
+fund and does not permit a pro rata allocation of the obligations,
+plan assets and service cost. The E.ON Group accordingly accounts
+for this obligation as a defined contribution plan. There are no mini-
+mum funding requirements in this respect. Benefits may be reduced
+or contributions increased if there is insufficient funding.
+From the perspective of the Group, however, the benefit plans are
+relatively insignificant in the above-mentioned countries.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Back
+↑
+Contents
+-46
+55
+Total
+-6
+Presented as operating receivables
+5,433
+-649
+7,994
+-94
+Presented as provisions for pensions and
+similar obligations
+6,082
+8,088
+Description of the Benefit Plans
+In addition to their entitlements under government retirement sys-
+tems and the income from private retirement planning, most active
+and former E.ON Group employees are also covered by occupational
+benefit plans. Both defined benefit plans and defined contribution
+plans are in place at E.ON. Benefits under defined benefit plans are
+generally paid upon reaching retirement age, or in the event of dis-
+ability or death.
+E.ON regularly reviews the pension plans in place within the Group
+for financial risks. Typical risk factors for defined benefit plans are
+longevity and changes in nominal interest rates, as well as inflation
+developments and rising wages and salaries.
+The features and risks of defined benefit plans are shaped by the
+general legal, tax and regulatory conditions prevailing in the respec-
+tive country. The configurations of the major defined benefit and
+defined contribution plans within the E.ON Group are described in
+the following discussion.
+Germany
+Active employees at the German Group companies are covered by
+both cash balance plans and pension plans based on final salary.
+Pension plans based on final salary are closed to new hires. All new
+hires will receive cash balance plans in accordance with a capital or
+pension module system, which, depending on the pension plan, can
+provide for alternative payout options of a prorated single payment
+and payments of installments in addition to the payment of a
+regular pension. The cash balance plans use different interest rules.
+Depending on the underlying pension plan, either interest rates
+adjusted to market developments with a fixed lower limit or guar-
+anteed interest rates are used to determine the capital or pension
+modules. The majority of pension commitments with a fixed guar-
+anteed interest rate will be modified as of January 1, 2022. The
+pension modules acquired from January 1, 2022, onwards will then
+also bear interest at a rate adjusted to market developments and
+protected by a fixed lower limit. The pension modules for the prior
+years, including for 2021, remain in place unchanged. The benefit
+expense for the cash balance plans is determined at different per-
+centage rates based on the ratio between compensation and the con-
+tribution limit in the statutory retirement pension system in Germany.
+Employees can additionally choose to defer compensation. Future
+pension adjustments are either guaranteed at 1 percent per annum
+or largely track the development of the inflation rate, usually in a
+three-year cycle.
+E.ON Annual Report 2021
+Search
+Description of the Benefit Obligation
+To fund the pension plans for the German Group companies, plan
+assets were established. The major part of these plan assets is
+administered in the form of Contractual Trust Arrangements ("CTAS")
+in accordance with specified investment principles. There are addi-
+tional plan assets available through the implementation channels of
+the pension fund ("Pensionsfonds") and smaller German pension
+vehicles ("Pensions- und Unterstützungskassen"). Only the pension
+fund and the "Pensionskassen" vehicles are subject to regulatory
+provisions in relation to the investment of capital and funding
+requirements.
+Changes in the Defined Benefit Obligations
+22,483
+United
+Kingdom
+6,222
+Other
+countries
+49
+382
+342
+37
+3
+338
+37
+2
+42
+29
+15
+-2
+38
+4
+The following table shows the changes in the present value of the
+defined benefit obligations for the periods indicated:
+54
+28,754
+64
+299
+6,187
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 219
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+2021
+2020
+€ in millions
+Defined benefit obligation as of January 1
+-20
+Germany
+Past service cost
+Gains (-) and losses (+) on settlements
+Total
+30,415
+Germany
+24,164
+United
+Kingdom
+Other
+countries
+Employer service cost
+Total
+1,095
+833
+259
+3
+Germany
+7,994
+2022
+United
+Kingdom
+Other
+countries
+Total
+Net liability as of January 1
+Germany
+7,985
+Kingdom
+€ in millions
+countries
+Germany
+Total
+€ in millions
+Other
+→ Notes
+2020
+2021
+Prospective Benefit Payments
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Total
+United
+465
+Other
+countries
+3
+Changes from remeasurements
+Consolidated Financial Statements 224
+235
+847
+1,085
+2024
+8
+17
+440
+2
+51
+United
+Kingdom
+434
+Net periodic pension cost
+3
+233
+837
+1,073
+2023
+40
+68
+7,012
+7,120
+55
+-46
+487
+Changes in the Net Defined Benefit Liability
+37
+Description of the Net Defined Benefit Liability
+38
+-2
+15
+29
+42
+2
+37
+299
+338
+3
+342
+382
+Other
+countries
+United
+Kingdom
+Germany
+Total
+Other
+countries
+United
+Kingdom
+Germany
+Total
+2021
+2020
+Contributions to state plans totaled €0.4 billion (2020: €0.4 billion).
+-2,604
+In addition to the total net periodic pension cost for defined benefit
+plans, an amount of €102 million in contributions to external insur-
+ers or similar institutions was paid in 2021 (2020: €101 million) for
+defined contribution plans.
+54
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of the
+defined benefit obligations and the fair value of plan assets:
+-20
+-6
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2021, for the next ten years are shown
+in the following table:
+Description of Contributions and Benefit
+Payments
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+8
+17
+440
+465
+2
+51
+434
+487
+2
+93
+95
+1
+-1
+63
+63
+-6
+4
+-2,272
+↑
+-13
+E.ON Annual Report 2021
+The weighted-average duration of the defined benefit obligations
+measured within the E.ON Group was 17.1 years as of December 31,
+2021 (2020: 18.7 years).
+For the following fiscal year, it is expected that Group-wide employer
+contributions to plan assets for new and existing obligations will
+amount to a total of €259 million.
+-46
+-48
+-94
+-517
+-132
+-649
+thereof net asset
+55
+55
+8,033
+8,088
+33
+111
+5,938
+6,082
+thereof net liability
+-46
+7,985
+7,994
+33
+-406
+5,806
+5,433
+Contents
+Net liability as of December 31
+Search
+→ Consolidated Balance Sheets
+The past service cost is, in particular, derived from the expenses
+incurred in the context of restructuring measures.
+8,974
+416
+7,783
+Non-current
+Current
+Non-current
+Current
+597
+December 31, 2020
+December 31, 2021
+Changes in Miscellaneous Provisions
+The changes in the miscellaneous provisions are shown in the table below:
+Total
+Other
+Environmental remediation and similar obligations
+Supplier-related and customer-related obligations
+Other asset retirement obligations
+Obligations from green certificates
+Personnel obligations
+Nuclear-waste management obligations
+€ in millions
+Miscellaneous Provisions
+The following table lists the miscellaneous provisions as of the dates indicated:
+(26) Miscellaneous Provisions
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Back
+-2
+-6
+-8
+-3
+-75
+-78
+Net benefit payments
+3
+234
+862
+1,099
+2026
+-60
+-526
+-586
+-81
+-281
+-362
+Employer contributions to plan assets
+3
+235
+862
+1,100
+2025
+3
+-66
+1,161
+1,098
+-78
+-75
+-3
+2027-2031
+-7
+-4
+-11
+Other
+-1
+-3
+-4
+-11
+-11
+Exchange rate differences
+33
+2,358
+-319
+8,660
+Total
+8
+-21
+-13
+-1
+19
+18
+Changes in scope of consolidation
+18
+1,162
+4,419
+5,599
+11,051
+Total
+13
+Gains (-) and losses (+) on settlements
+-65
+3
+3
+-334
+-334
+434
+434
+Fair value of plan assets as of December 31
+Other
+Exchange rate differences
+-4
+-4
+-22
+-22
+Changes in scope of consolidation
+-259
+-714
+-973
+-269
+-724
+-993
+Benefit payments
+60
+526
+586
+-1
+81
+-64
+16,879
+Real estate
+Debt securities
+Equity securities not traded on an exchange
+Plan assets not listed in an active market
+Total listed plan assets
+Other investment funds
+thereof Corporate bonds
+thereof Government bonds
+Debt securities
+Equity securities (stocks)
+Plan assets listed in an active market
+Percentages
+Classification of Plan Assets
+The plan assets thus classified break down as shown in the
+following table:
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The plan assets include virtually no owner-occupied real estate or
+equity and debt instruments issued by E.ON Group companies.
+Each of the individual plan asset components has been allocated to
+an asset class based on its substance.
+6,233
+16,179
+22,421
+9
+6,581
+23,469
+281
+362
+Employer contributions
+6,233
+90
+128
+218
+Interest income on plan assets
+2020
+2021
+Other
+countries
+United
+Kingdom
+Germany
+16,179
+22,421
+Fair value of plan assets as of January 1
+€ in millions
+Total
+Changes in the Fair Value of Plan Assets
+The defined benefit plans are funded by plan assets held in specially
+created pension vehicles that legally are distinct from the Company.
+The fair value of these plan assets changed as follows:
+Description of Plan Assets and the
+Investment Policy
+When considering sensitivities, it must be noted that the change
+in the present value of the defined benefit obligations resulting
+from changing multiple actuarial assumptions simultaneously is
+not necessarily equivalent to the cumulative effect of the individual
+sensitivities.
+The sensitivities indicated are computed based on the same methods
+and assumptions used to determine the present value of the defined
+benefit obligations. If one of the actuarial assumptions is changed
+for the purpose of computing the sensitivity of results to changes in
+that assumption, all other actuarial assumptions are included in the
+computation unchanged.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 221
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+9
+Total
+21,634
+Germany
+15,471
+3
+10
+532
+2
+9
+11
+559
+695
+1,254
+10
+1,025
+1,035
+Qualifying insurance policies
+Return on plan assets recognized in equity, not including amounts contained in the interest income on plan assets
+Employee contributions
+695
+1,254
+10
+1,025
+1,035
+Remeasurements
+114
+196
+310
+9
+Other
+countries
+United
+Kingdom
+6,154
+559
+Cash and cash equivalents
+Other
+Total unlisted plan assets
+Total
+4
+25
+19
+100
+6
+29
+23
+3
+1
+2
+6
+5
+3
+2
+2
+1
+100
+1
+1
+100
+1
+1
+9
+7
+11
+100
+100
+100
+100
+Past service cost
+Employer service cost
+€ in millions
+Net Periodic Pension Cost
+The net periodic pension cost for defined benefit plans included in
+the provisions for pensions and similar obligations and in operating
+receivables is shown in the table below:
+Description of the Pension Cost
+the structure of the benefit obligations, and is adjusted as neces-
+sary. The parameters used in the studies are additionally reviewed
+regularly, at least once each year. Asset managers are tasked with
+implementing the target portfolio structure. They are monitored for
+target achievement on a regular basis.
+The determination of the target portfolio structure for the individual
+plan assets is based on regular asset-liability studies. In these stud-
+ies, the target portfolio structure is reviewed in a comprehensive
+approach against the backdrop of existing investment principles,
+the current funded status, the condition of the capital markets and
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 223
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+8
+→ Consolidated Balance Sheets
+↑
+Search
+Contents
+E.ON Annual Report 2021
+hedging instruments) to facilitate the control of specific risk factors
+of pension liabilities. In the table above, derivatives have been allo-
+cated, based on their substance, to the respective asset classes.
+In order to improve the funded status of the E.ON Group as a whole,
+a portion of the plan assets will also be invested in a diversified
+portfolio of asset classes that are expected to provide for long-term
+returns in excess of those of fixed-income investments and the dis-
+count rate.
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the struc-
+ture of the benefit obligations. This long-term investment strategy
+seeks to manage the funded status, with the result that any changes
+in the defined benefit obligation, especially those caused by fluctu-
+ating inflation and interest rates are, to a certain degree, offset by
+simultaneous corresponding changes in the fair value of plan assets.
+The investment strategy may also involve the use of derivatives (for
+example, interest rate swaps and inflation swaps, as well as currency
+The fundamental investment objective for the plan assets is to pro-
+vide full coverage of benefit obligations at all times for the payments
+due under the corresponding benefit plans. This investment policy
+stems from the corresponding governance guidelines of the Group.
+An increase in the net defined benefit liability or a deterioration in the
+funded status following an unfavorable development in plan assets
+or in the present value of the defined benefit obligations is identified
+in these guidelines as a risk. E.ON therefore regularly reviews the
+development of the funded status in order to monitor this risk.
+100
+100
+100
+100
+100
+Back
+Net interest on the net defined benefit liability/asset
+4
+8
+47
+54
+42
+45
+17
+25
+23
+13
+26
+23
+Other
+countries
+United
+Kingdom
+Germany
+Total
+December 31, 2020
+Other
+countries
+United
+Kingdom
+Germany
+Total
+December 31, 2021
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 222
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+45
+27
+19
+48
+4
+9
+8
+96
+75
+81
+94
+71
+77
+25
+5
+11
+9
+27
+9
+4
+23
+50
+20
+54
+422
+18
+5
+20
+16
+28
+3
+1,118
+→ Notes
+1,249
+-14
+-332
+2,609
+607
+-1
+266
+-2
+-794
+1,138
+0
+-50
+50
+29,019
+Dec. 31, 2020
+Other
+-299
+11
+11
+-157
+2,394
+27,059
+Compounding
+effect
+Changes in
+scope of
+consolidation
+Exchange rate
+differences
+Cash flows
+Jan. 1, 2020
+2
+Lease obligations¹
+350
+Other financial liabilities
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The financial liabilities of innogy recognized at the date of initial
+consolidation were marked to market under IFRS. This market value
+was considerably higher than the nominal value because market
+interest rates had fallen since the bonds were issued. The difference
+between the nominal value and the market value calculated during
+the preliminary purchase price allocation totaled €1,931 million as
+of December 31, 2021 (as of December 31, 2020: €2,121 million).
+This difference is not taken into account in the economic net debt.
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €135 million (2020:
+€8 million). This collateral relates to amounts pledged by banks to
+limit the utilization of credit lines in connection with the fair value
+measurement of derivative transactions. The other financial liabilities
+include, inter alia, financial guarantees totaling €8 million (2020:
+€8 million). Also included is collateral received in connection with
+goods and services in the amount of €14 million (2020: €10 million).
+E.ON can use this collateral without restriction.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 229
+¹For more information see Note 33.
+32,841
+33
+11
+233
+-181
+1,332
+31,413
+600
+-17
+-46
+-8
+114
+557
+Financial liabilities
+2,615
+Bank loans/Liabilities to banks
+Commercial paper
+Bonds
+607
+Bank loans/Liabilities to banks
+1,510
+0
+Commercial paper
+Dec. 31, 2021
+28,323
+-267
+13
+-2
+294
+-734
+29,019
+Other
+effect
+Compounding
+scope of
+consolidation
+Exchange rate
+differences
+Cash flows
+Jan. 1, 2021
+Bonds
+€ in millions
+Changes in
+Non-cash-effective
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+1,108
+-1
+-92
+-184
+€ in millions
+Non-cash-effective
+Cash-effective
+Financial Liabilities
+¹For more information see Note 33.
+34,661
+-2,016
+13
+130
+374
+3,319
+32,841
+→ Consolidated Balance Sheets
+Financial liabilities
+-1,831
+209
+74
+1,798
+600
+Other financial liabilities
+266
+15
+7
+-363
+2,615
+Lease obligations¹
+1,510
+1,438
+2,539
+851
+Cash-effective
+Consolidated Financial Statements 230
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Sep 2027
+7.5 years
+1.000 million EUR
+E.ON SE
+E.ON SE
+0.25%
+Oct 2026
+7 years
+750 million EUR
+E.ON International Finance B.V.
+1.63%
+May 2026
+8 years
+500 million EUR
+E.ON SE
+1.00%
+Oct 2025
+5.5 years
+750 million EUR
+1.00%
+Apr 2025
+8 years
+E.ON International Finance B.V.
+750 million EUR
+E.ON SE
+0.38%
+0.00%
+E.ON International Finance B.V.
+10 years
+Contents
+E.ON Annual Report 2021
+¹Listing: All bonds ≥ 500 million EUR are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+2The volume of this issue was raised from originally EUR 500 million to EUR 750 million.
+3The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+4Rule 144A/Regulation S bond.
+E.ON International Finance B.V.
+1.50%
+Jul 2029
+12 years
+1.000 million EUR
+1.63%
+May 2029
+12 years
+E.ON SE
+750 million EUR
+E.ON SE
+0.10%
+Dec 2028
+8 years
+600 million EUR
+E.ON SE
+0.75%
+Feb 2028
+8 years
+500 million EUR
+1.25%
+Oct 2027
+850 million EUR
+Aug 2024
+5 years
+750 million EUR
+Sep 2022
+4 years
+500 million EUR
+5.50%
+Jul 2022
+13 years
+500 million GBP
+Coupon
+Repayment
+Initial term
+Volume in the respective currency
+E.ON International Finance B.V.
+E.ON SE
+E.ON International Finance B.V.2
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON International Finance B.V.
+Issuer
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+At year-end 2021, the following E.ON SE and E.ON International
+Finance B.V. bonds were outstanding:
+renewed in March 2020, with a total amount of €35 billion. E.ON SE
+plans to renew the program in 2022.
+A Debt Issuance Program simplifies the issuance from time to time
+of debt instruments through public and private placements to
+investors. The Debt Issuance Program of E.ON SE was mostrecently
+€35 Billion Debt Issuance Program
+Corporate Headquarters
+The following is a description of the E.ON Group's significant credit
+arrangements and debt issuance programs. Included under "Bonds"
+are the bonds currently outstanding, including those issued under
+the Debt Issuance Program.
+→ Notes
+0.00%
+750 million EUR
+3 years
+Oct 2022
+0.88%
+May 2024
+7 years
+500 millionEUR
+E.ON International Finance B.V.
+E.ON SE
+3.00%
+Jan 2024
+10 years
+800 million EUR
+0.00%
+Dec 2023
+4 years
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+750 million EUR
+Dec 2023
+20 years
+488 million GBP
+0.38%
+Apr 2023
+3 years
+1.000 million EUR
+0.75%
+Nov 2022
+5 years
+750 million EUR
+0.00%
+5.63%
+594
+Financial Liabilities
+Financial Liabilities
+-45
+62
+1
+485
+Environmental remediation and similar obligations
+10,131
+-186
+-136
+9,613
+-36
+70
+806
+Supplier-related and customer-related obligations
+851
+56
+-14
+6
+-2
+1
+804
+Other asset retirement obligations
+1,087
+-27
+-3
+-1,496
+23
+1,510
+-6
+2,835
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+25,149
+-282
+-1,135
+-126
+-3,339
+12,735
+-24
+-47
+167
+17,200
+Total
+520
+2,530
+-681
+-101
+-361
+840
+-11
+-6
+15
+Other
+-4
+70
+1,037
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 225
+1,631
+13,296
+3,904
+13,367
+11,782
+1,204
+1,322
+1,208
+427
+58
+453
+67
+243
+563
+1,874
+8,257
+756
+48
+801
+50
+16
+1,021
+16
+1,071
+→ Notes
+€ in millions
+Jan. 1, 2021
+Exchange rate
+differences
+Obligations from green certificates
+1,650
+-235
+-45
+-578
+667
+-13
+1
+10
+1,843
+Personnel obligations
+8,380
+Consolidated Financial Statements 226
+-338
+37
+9,390
+Nuclear-waste management obligations
+Dec. 31, 2021
+Changes in
+estimates
+Reversals
+tions
+Utilization
+Additions
+Reclassifica-
+Unwinding of
+discounts
+Changes in
+scope of
+consolidation
+-709
+The following tables present the changes to financial liabilities in
+fiscal years 2021 and 2020:
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Notes
+618
+6,491
+6,627
+Liabilities from derivatives
+299
+28
+393
+32
+8,064
+9,113
+29,423
+3,418
+28,131
+Non-current
+Current
+Non-current
+Current
+6,530
+Capital expenditure grants
+Trade payables
+Financial liabilities
+€ in millions
+December 31, 2020
+December 31, 2021
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+3,679
+→ Consolidated Balance Sheets
+Advance payments
+103
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+37,022
+19,633
+38,949
+27,485
+Total
+7,599
+16,215
+10,818
+20,955
+Trade payables and other operating liabilities
+656
+6,564
+879
+4,158
+Other operating liabilities
+2,965
+838
+3,055
+895
+Contract liabilities (IFRS 15)
+130
+→ Consolidated Statement of Recognized Income and Expenses
+Consolidated Financial Statements 228
+Liabilities
+In connection with the acquisition of innogy, the "Collective Agree-
+ment on the Future and Job Security" was concluded in 2019 with
+employer associations and unions as well as ver.di and the Mining,
+Chemical and Energy Industrial Union. This collective agreement
+will initially apply to personnel changes and adjustment measures
+implemented in Germany as a result of the integration of the innogy
+Group into the E.ON Group. Among other aspects, it includes regu-
+lations on severance payments for employees who voluntarily depart,
+early retirement and the possibility of transferring to an Employment
+and Qualification Company.
+Provisions for personnel costs primarily cover provisions for early
+retirement benefits, performance-based compensation components,
+restructuring and other deferred personnel costs. Restructuring
+provisions, which totaled €1,052 million at December 31, 2021
+(2020: €1,088 million), were made in Germany and the UK, in par-
+ticular:
+Personnel Obligations
+There were changes in estimates for the nuclear-power business in
+2021 in the amount of -€338 million (2020: -€47 million). This
+mainly includes the effects from the remeasurement of the recov-
+ery of reprocessing waste and optimization of decommissioning
+and disposal services. €709 million (2020: €361 million) of this
+was used, of which €337 million (2020: €307 million) related to
+decommissioning nuclear power plants based on circumstances for
+which decommissioning and dismantling costs were recognized.
+Excluding the effects of discounting and cost increases, the amounts
+for disposal obligations would be €7,288 million with average
+credit terms of approximately seven years. This amount flows into
+the economic net debt.
+A risk-free discount rate of an average of about 0.0 percent is used
+for the measurement of E.ON's disposal obligations (previous year:
+0.0 percent). As in the prior year, E.ON assumes a 2-percent increase
+in costs when estimating annual payments. A change in the discount
+rate or in the cost increase rate of 0.1 percent would change the
+amount of the provision recognized on the balance sheet by approx-
+imately €0.1 billion.
+Provisions, if they are non-current, are measured at their settlement
+amounts, discounted to the balance sheet date.
+December 31,
+2020
+7,986
+1,404
+9,390
+8,380
+Total
+610
+Containers, transports, operational waste, other
+2021
+7,770
+Retirement and decomissioning
+€ in millions
+Nuclear-Waste Management Obligations in Germany (Less Advance
+Payments)
+In the following, the provision items after deduction of advance
+payments are classified based on technical criteria:
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are not
+based on contractual agreements.
+Provisions for the disposal of spent nuclear-fuel rods also comprise
+the contractual costs of finalizing reprocessing and the associated
+return of waste to interim storage, as well as costs incurred for
+expert handling, including the necessary interim storage containers
+and transport to interim storage.
+The asset retirement obligations recognized include the anticipated
+costs of post-and service operation of the facility, dismantling costs,
+and the cost of removal and disposal of the nuclear components of
+the nuclear power plant.
+The provisions for nuclear-waste management based on nuclear-
+power legislation comprise all those nuclear obligations relating to
+the disposal of spent nuclear-fuel rods and low-level nuclear waste
+and to the retirement and decommissioning of nuclear power plant
+components that are determined on the basis of external studies,
+external and internal cost estimates and contractual agreements,
+as well as the supplementary provisions of the German Act Trans-
+ferring Responsibility for Nuclear Waste Storage and the German
+Disposal Fund Act.
+The provisions for nuclear-waste management obligations as
+of December 31, 2021, in the amount of €8.4 billion exclusively
+relate to nuclear-power activities in Germany.
+Provisions for Nuclear-Waste Management
+Obligations
+As of December 31, 2020, provisions for nuclear-waste manage-
+ment obligations exclusively relate to Germany; other provisions
+mainly relate to eurozone countries and the United Kingdom.
+The accretion expense resulting from the changes in provisions is
+shown in the financial results (see Note 10 >). The provision items
+are discounted in accordance with the maturities with interest rates
+of between 0 and 4.8 percent.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+The following table provides a breakdown of liabilities:
+(27) Liabilities
+Back
+↓
+Search
+Contents
+E.ON Annual Report 2021
+The other miscellaneous provisions consist of certain environmen-
+tal remediation obligations from predecessor companies in the
+amount of €0.4 billion (2020: €0.5 billion), possible obligations from
+tax-related interest expense in the amount of €0.1 billion (2020:
+€0.2 billion) and litigation cost risks in the amount of €0.1 billion
+(2020: €0.2 billion).
+Other
+Provisions for environmental remediation refer primarily to redevel-
+opment protection measures and the rehabilitation of contaminated
+sites.
+rise in energy prices on the commodity markets. These provisions
+were recognized for contracted sales transactions that form an eco-
+nomic part of a portfolio which are partly offset by procurement
+transactions to be accounted for as derivative financial instruments.
+The measurement of these provisions is generally based on the mar-
+gins of the latest officially valid management planning. Judgment is
+required in defining the individual sales portfolios and allocating the
+procurement transactions to these portfolios. In addition, assump-
+tions regarding the allocation of overheads to the individual sales
+portfolios and expectations regarding contract terms, particularly in
+the case of customer contracts with options for unilateral renewal
+or termination by the customer, are included in the calculation.
+Environmental Remediation and Similar
+Obligations
+The provisions for sales-related obligations include risks of loss for
+price discounts and from pending sales contracts, as well as for
+settlement obligations from electricity and gas deliveries already
+made. The sharp increase of €9.3 billion resulted from additions to
+contingent losses on pending sales contracts and is related to the
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Provisions for supplier-related obligations consist of provisions for
+potential losses on open purchase contracts.
+The other asset retirement obligations disclosed under economic
+net debt, not including the provisions for dismantling conventional
+plant components in the nuclear power segment, amount to €369
+million.
+The provisions for other asset retirement obligations consist of obli-
+gations for renewable-energy power plants and infrastructure. In
+addition, the provisions for dismantling conventional plant compo-
+nents in the nuclear power segment, which are based on legally
+binding civil agreements and public provisions, in the amount of
+€482 million (2020: €469 million) are taken into account here.
+Excluding discounting and cost-increase effects, the amounts for
+these disposal obligations with an average payment term of about
+17 years would be €359 million. This amount flows into the eco-
+nomic net debt.
+Provisions for Other Asset Retirement Obligations
+Renewables Obligation Certificates (ROCS or Green Certificates) are
+an important mechanism for promoting renewable energies, espe-
+cially in the UK. The ROCs represent a fixed share of Renewables in
+power sales and can be acquired either from renewable sources or
+on the market. During a twelve-month ROC period, the obligations
+recognized as a provision for this purpose are offset against the
+acquired certificates and used. Within the E.ON Group, there are
+ROCs primarily in the UK.
+Obligations from Green Certificates
+In 2019 and 2020, E.ON announced plans to restructure the house-
+hold and small commercial customers business (B2C) of npower and
+E.ON UK by transferring customers to a common IT platform. The
+transfer of npower customers was completed in 2021, while the
+transfer of E.ON UK customers will continue into 2022. In addition,
+the industrial and large commercial customers (B2B) of npower and
+E.ON UK are being brought together on another joint platform from
+2021. Any activities that do not support the combined businesses
+will be restructured. This includes sites as well as a related reduction
+in headcount.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 227
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+Sales and Supplier-Related Obligations
+Due in 2023
+2030
+Feb 2033
+33,786
+9,947
+9,902
+AmC
+22,818
+22,818
+FVPL
+22,818
+251
+Due in 2022
+2,695
+2,656
+2,384
+27,428
+26,837
+Due in 2021
+Total
+Due after
+Due between
+2024 and
+December 31, 2020
+December 31, 2021
+37,921
+€ in millions
+Securities and fixed-term deposits
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+261
+247
+n/a
+232
+2,309
+550
+544
+427
+AmC
+421
+15
+220
+186
+123
+FVPL
+123
+123
+Trade receivables and other operating assets
+Trade receivables
+Other operating assets
+Bonds Issued by E.ON SE and E.ON International Finance B.V.
+The bonds issued by E.ON SE and E.ON International Finance B.V. (guaranteed by E.ON SE) have the maturities presented in the table below.
+Liabilities denominated in foreign currency include the effects of economic hedges, and the amounts shown here may therefore vary from
+the amounts presented on the balance sheet.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+6.65%
+Apr 2038
+30 years
+1.000 million USD
+5.88%
+Oct 2037
+30 years
+900 million GBP
+4.75%
+Jan 2034
+22 years
+600 millionGBP
+5.75%
+30 years
+600 million EUR
+0.60%
+Oct 2032
+11.5 years
+750 million EUR
+700 million GBP
+30 years
+Jan 2039
+6.75%
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+Consolidated Financial Statements 232
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+797
+E.ON SE to issue from time to time commercial paper with maturities
+of up to 366 days and extendible notes with original maturities of up
+to 397 days (and a subsequent extension option for the investor) to
+investors. As of December 31, 2021, €1,510 million was outstand-
+ing under the euro commercial paper program (2020: €0 million); as
+in the prior year, the U.S. commercial paper program was not utilized.
+€10 Billion and $10 Billion Commercial Paper Programs
+corporate strategy. The ESG ratings are calculated by three promi-
+nent agencies: ISS ESG, MSCI ESG Research, and Sustainalytics.
+The facility was granted by 21 banks, which make up E.ON's core
+banking group. The facility has not been drawn; rather, it serves as
+the Group's reliable, long-term liquidity reserve, one purpose of
+which is to function as a backup facility for the commercial paper
+programs.
+Effective October 24, 2019, E.ON arranged a syndicated revolving
+credit facility in the amount of €3.5 billion over an original term of
+five
+years, with two renewal options for one year each. After exer-
+cising the first extension option in October 2020, the second exten-
+sion option was also exercised in October 2021, extending the term
+of the credit line to October 24, 2026. The credit margin of the
+facility is in part coupled with the development of certain ESG rat-
+ings on which E.ON bases financial incentives for a sustainable
+€3.5 Billion Syndicated Revolving Credit Facility
+Additionally outstanding as of December 31, 2021, were private
+placements with a total volume of approximately €1.7 billion
+(2020: €1.7 billion).
+6.13%
+Jul 2039
+30 years
+1.000 million GBP
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE to issue from time to time commercial paper with
+maturities of up to two years less one day to investors. The U.S.
+commercial paper program in the amount of $10 billion allows
+2,570
+Determined by
+valuation methods
+(Level 3)
+289
+119
+265
+Unrealized changes-hedging reserve
+-47
+Unrealized changes-reserve for hedging costs
+6
+Reclassification adjustments recognized in income
+Change in scope of consolidation
+Balance as of December 31, 2021¹
+-4
+220
+¹As of December 31, 2021, includes -€71 million (2020: -€71 million) from terminated
+net investment hedges.
+As a rule, reclassification adjustments recognized in income are
+reported under other operating income and expenses. The nominal
+volume of hedging instruments in net investment hedges amounted
+to €5,082 million as of December 31, 2021 (2020: €4,945 million).
+Since the currency risk of net investment hedges is hedged through
+the ongoing rollover of the hedging instruments, the majority are
+concluded with a remaining term of less than one year.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant variables.
+The Company assesses and monitors the fair value of derivative
+instruments on a periodic basis. The fair value to be determined for
+each derivative instrument is the price that would be received to
+sell an asset or paid to transfer a liability in an orderly transaction
+between market participants on the measurement date (exit price).
+E.ON also takes into account the counterparty credit risk for both
+own credit risk (debt value adjustment) and the risk of the corre-
+sponding counterparty (credit value adjustment) when determining
+fair value. The fair values of derivative instruments are calculated
+using common market valuation methods with reference to available
+market data on the measurement date.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Balance as of January 1, 2021
+265
+Balance as of December 31, 2020¹
+-166
+Total
+2020
+839
+2,961
+4,593
+3,571
+500
+3,500
+4,000
+4,295
+→ Consolidated Balance Sheets
+81
+305
+26
+The development of OCI arising from net investment hedges is as
+follows:
+Balance as of January 1, 2020
+Unrealized changes-hedging reserve
+Changes in OCI Arising from Net Investment Hedges
+€ in millions
+Currency risk
+350
+82
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Change in scope of consolidation
+-1
+224
+6.38%
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+Carrying Amounts, Fair Values and Measurement Categories by Class within the Scope of IFRS 7 as of December 31, 2021
+Carrying amounts
+within the scope of
+€ in millions
+Equity investments
+Financial receivables and other financial assets
+Receivables from finance leases
+Other financial receivables and financial assets
+Carrying amounts
+IFRS 7
+Carrying amounts
+within the scope of
+IFRS 91
+Fair value
+Determined using
+market prices
+(Level 1)
+Derived from active
+market prices
+(Level 2)
+2,147
+FVPL
+537
+129
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The following is a summary of the methods and assumptions for
+the valuation of utilized derivative financial instruments in the Con-
+solidated Financial Statements.
+•
+•
+Currency, electricity, gas and oil forward contracts, swaps, and
+emissions-related derivatives are valued separately at their for-
+ward rates and prices as of the balance sheet date. Whenever
+possible, forward rates and prices are based on market quotations,
+with any applicable forward premiums and discounts taken into
+consideration.
+Market prices for electricity options are valued using standard
+option pricing models commonly used in the market.
+The fair values of existing instruments to hedge interest risk are
+determined by discounting future cash flows using market inter-
+est rates over the remaining term of the instrument. Discounted
+cash values are determined for interest rate, cross-currency and
+cross-currency interest rate swaps for each individual transac-
+tion as of the balance sheet date. Interest income and expenses
+are recognized in income at the date of payment or accrual.
+.•
+Equity forwards are valued on the basis of the stock prices of the
+underlying equities, taking into consideration any timing compo-
+Consolidated Financial Statements 239
+nents.
+Certain long-term energy contracts are valued with the aid of
+valuation models that use internal data if market prices are not
+available. A hypothetical 10-percent increase or decrease in these
+internal valuation parameters as of the balance sheet date would
+lead to a theoretical change in market values of ±€6 million.
+(32) Additional Disclosures on Financial
+Instruments
+The carrying amounts of the financial instruments, their grouping
+into IFRS 9 measurement categories, their fair values and their
+measurement sources by class are presented in the following table:
+E.ON Annual Report 2021
+Contents
+Search
+↓
+Back
+Consolidated Financial Statements 240
+Exchange-traded futures and option contracts are valued indi-
+vidually at daily settlement prices determined on the futures
+markets that are published by their respective clearing houses.
+Paid initial margins are disclosed under other assets. Variation
+margins received or paid during the term of such contracts are
+stated under other liabilities or other assets, respectively, unless
+they are offset against the recognized market values of the com-
+modity derivatives, as the offsetting criteria of IAS 32.42 are met.
+2021
+Jun 2032
+975 million GBP
+1,510
+1,510
+AmC
+1,511
+1,511
+1,438
+1,438
+AmC
+1,464
+832
+632
+2,539
+2,477
+n/a
+2,354
+851
+469
+AmC
+433
+1,919
+132
+29,119
+AmC
+FVPL
+172
+38
+38
+Total assets
+Financial liabilities
+Bonds
+Commercial paper
+Bank loans/Liabilities to banks
+Lease obligations
+Other financial liabilities
+Trade payables and other operating liabilities
+Trade payables
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Liabilities related to IAS 322
+51,922
+42,994
+34,661
+34,217
+28,323
+28,323
+31,038
+301
+31,773
+24,254
+1,614
+AmC
+1,368
+2
+505
+861
+701
+451
+412
+AmC
+39
+FVPL
+412
+39
+39
+Total liabilities
+67,135
+58,922
+E.ON Annual Report 2021
+¹FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values
+of the two hierarchy levels listed.
+2Liabilities related to IAS 32 include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).
+9,056
+Liabilities associated with assets held for sale
+Other operating liabilities
+486
+9,113
+9,036
+AmC
+11,693
+11,693
+FVPL
+11,693
+50
+11,285
+38
+358
+1,425
+n/a
+1,425
+33
+1,392
+486
+486
+AmC
+486
+1,425
+AmC
+172
+210
+¹Listing: All bonds ≥ 500 million EUR are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+2The volume of this issue was raised from originally EUR 500 million to EUR 750 million.
+³The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+4Rule 144A/Regulation S bond.
+E.ON International Finance B.V.
+E.ON International Finance B.V.
+E.ON International Finance B.V.
+E.ON International Finance B.V.
+E.ON International Finance B.V.4
+E.ON International Finance B.V.
+E.ON SE
+E.ON International Finance B.V.3
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON International Finance B.V.
+E.ON SE
+Issuer
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 231
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Back
+↑
+Volume in the respective currency
+Initial term
+Repayment
+Coupon
+0.63%
+Nov 2031
+12 years
+500 million EUR
+0.88%
+Aug 2031
+11 years
+500 million EUR
+0.75%
+Search
+Dec 2030
+500 million EUR
+6.25%
+Jun 2030
+28 years
+760 million GBP
+0.35%
+Feb 2030
+11 years
+750 million EUR
+11 years
+30 years
+Contents
+401
+FVOCI
+1,220
+724
+496
+Cash and cash equivalents
+3,634
+3,634
+1,250
+FVPL
+1,250
+1,250
+2,384
+AmC
+Restricted cash
+Assets held for sale
+735
+735
+AmC
+1,620
+1,220
+1,042
+1,033
+2,075
+541
+541
+n/a
+541
+62
+479
+4,615
+525
+AmC
+22,166
+493
+172
+311
+3,295
+3,295
+3,295
+2,185
+1,110
+2,075
+FVPL
+10
+>5 years
+537
+<1 year
+793
+29,019
+1,510
+1,438
+607
+2,539
+2,615
+851
+600
+31,082
+34,661
+29,396
+32,841
+¹Because of changes in segment reporting, the prior-year figure was adjusted accordingly.
+2The previous year included liabilities from finance leases.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 233
+189
+239
+180
+151
+119
+126
+41
+1-5 years
+299
+213
+3
+3
+87
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+99
+102
+Non-Core Business
+Corporate Functions/Other
+E.ON Group
+28,323
+28,323
+29,019
+1,510
+859
+8
+90
+14
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Trade Payables and Other Operating Liabilities
+→ Notes
+To provide liability coverage for the additional €2,244.4 million
+per incident required by the above-mentioned amendments, E.ON
+Energie AG ("E.ON Energie") and the other parent companies of
+German nuclear power plant operators reached a Solidarity Agree-
+ment ("Solidarvereinbarung") on July 11, July 27, August 1, and
+August 28, 2001, extended by agreement dated March 25, April 18,
+April 28, and June 1, 2011, and with agreement of November 17/
+November 29/December 2/December 6, 2021. If an accident occurs,
+the Solidarity Agreement calls for the nuclear power plant operator
+liable for the damages to receive-after the operator's own resources
+and those of its parent companies are exhausted-financing suffi-
+cient for the operator to meet its financial obligations. Under the
+Solidarity Agreement, E.ON Energie's share of the liability coverage
+on December 31, 2021, was 35.1 percent (prior year: 47.1 percent),
+plus an additional 5.0 percent charge for the administrative costs of
+processing damage claims. This share will change to 43.3 percent
+starting from January 1, 2022. Sufficient liquidity has been provided
+for and is included within the liquidity plan.
+Furthermore, as of December 31, 2021, E.ON is continuing to pro-
+vide collateral in the amount of €701.8 million for the former Group
+companies transferred to RWE which will be repaid or assumed by
+RWE Group companies in the short term. During the 2021 fiscal
+year, guarantees amounting to €43.1 million were redeemed as part
+of the exchange process with RWE.
+Other Financial Obligations
+In addition to provisions and liabilities carried on the balance sheet
+and to reported contingent liabilities, there also are other financial
+obligations arising mainly from contracts entered into with third
+parties, or on the basis of legal requirements.
+As of December 31, 2021, purchase commitments for investments
+in property, plant and equipment amounted to €1.9 billion (2020:
+€1.7 billion). Of these commitments, €1.3 billion are due within one
+year (2020: €1.2 billion). €1.6 billion of the purchase commitment
+at December 31, 2021 (2020: €1.3 billion) relates to the Energy
+Networks Germany and Sweden segments.
+Additional long-term contractual obligations in place at the E.ON
+Group as of December 31, 2021, relate primarily to the purchase of
+electricity and natural gas. Financial obligations under the electricity
+purchase contracts amount to approximately €8.8 billion on Decem-
+ber 31, 2021 (2020: €6.8 billion), of which €5.8 billion (2020:
+€3.5 billion) is due within one year. Financial obligations under the
+gas purchase contracts amount to approximately €7.8 billion on
+December 31, 2021 (2020: €4.8 billion). Of this amount, €6.1 billion
+(2020: €2.4 billion) is due within one year. Additional purchase com-
+mitments as of December 31, 2021, amounted to approximately
+€0.6 billion (2020: €0.6 billion). They include long-term contractual
+commitments to purchase heat and alternative fuels. Of these com-
+mitments, €0.1 billion (2020: €0.1 billion) are due within one year.
+Other financial obligations exist only to an insignificant extent. These
+include capital commitments in connection with joint ventures,
+obligations concerning the acquisition of financial assets, and obli-
+gations arising from capital measures.
+(29) Litigation and Claims
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or may be
+instituted or asserted in the future against companies of the E.ON
+Group. This in particular includes legal actions and proceedings on
+contract amendments and price adjustments initiated in response
+to market upheavals and the changed economic situation in the
+electricity and gas sectors (also as a consequence of the energy
+transition) and concerning price increases and anticompetitive
+practices. The courts and authorities are also subjecting competitive
+practices to stricter reviews.
+In the Energy Networks segment, Group companies are involved in
+proceedings for the award of concessions and in connection with
+grid connections and the calculation of the grid fee. Official regula-
+tions and changes in regulatory practice have given rise to legal
+disputes. Of particular note here are effects in connection with the
+regulatory treatment of capital costs and return on equity. The
+national regulatory regimes within Europe are subject to changes,
+some of which have a significant impact on network operations.
+Owing to a number of factors, including regulatory and legal deci-
+sions, the regulatory framework has increased here. However, these
+regulatory interventions are not restricted to the network area; dis-
+tribution activities in the customer solutions area have also been
+affected by regulatory measures, including in connection with elec-
+tricity self-generation models seeking to be exempted from the
+payment of the EEG surcharge.
+The changes to the legal and regulatory framework can in some
+cases also significantly impact subsidies and remuneration practices
+in the area of Renewables, which in turn are the object of regulatory
+or court proceedings.
+Rising energy prices in Europe have been leading to market distor-
+tions, to which some Member States have been responding with
+selective regulatory measures, such as price caps for electricity and
+gas. In some countries, rising energy prices are responsible for
+occasional insolvencies of energy supply companies, and suspension
+of energy deliveries. In some cases, the insolvencies of other suppli-
+ers lead to an increase in customers (due to regulatory effects) at
+E.ON Group companies.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Consolidated Financial Statements 234
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Trade payables totaled €9,113 million as of December 31, 2021
+(2020: €8,064 million).
+Capital expenditure grants of €425 million (2020: €327 million)
+have not yet been recognized as revenue. As in the prior year, the
+majority of these were government grants, in particular for the net-
+work business. The E.ON Group retains ownership of the assets.
+The grants are non-refundable and are recognized in other operating
+income over the period of the depreciable lives of the related assets.
+Derivative liabilities totaled €13,118 million as of December 31,
+2021 (2020: €4,297 million). The increase compared with the
+previous year is mainly due to the market valuation of commodity
+derivatives.
+Contract liabilities under IFRS 15 in the amount of €3,951 million
+(2020: €3,803 million) consist primarily of construction grants that
+were paid by customers for the cost of new gas and electricity con-
+nections in accordance with the generally binding terms governing
+such new connections. These grants are customary in the industry,
+generally non-refundable and recognized as revenue in the amount
+of €331 million according to the useful lives of the related assets.
+Other operating liabilities consist primarily of other tax liabilities in
+the amount of €1,559 million (2020: €1,304 million) and interest
+payable in the amount of €368 million (2020: €399 million). This
+item also includes other liabilities to our customers from overpay-
+ments and refund claims of €467 million (2020: €506 million) and
+current personnel liabilities of €452 million (2020: €444 million).
+Also included in other operating liabilities are carryforwards of
+counterparty obligations to acquire additional shares in already
+consolidated subsidiaries as well as non-controlling interests in fully
+consolidated partnerships with legal structures that give their share-
+holders a statutory right of withdrawal combined with a compensa-
+tion claim, in the amount of €486 million (2020: €2,271 million).
+The significant decrease compared with the previous year is due in
+particular to the redemption of the put option held by enviaM.
+(28) Contingent Liabilities and Other Financial
+Obligations
+As part of its business activities, E.ON is subject to contingent lia-
+bilities and other financial obligations involving a variety of under-
+lying matters. These primarily include guarantees, obligations from
+litigation and claims (as discussed in more detail in Note 29 >),
+short- and long-term contractual, legal and other obligations and
+commitments.
+Contingent Liabilities
+→ Notes
+The fair value of the E.ON Group's contingent liabilities was €0.4 billion
+as of December 31, 2021 (December 31, 2020: €0.4 billion) and
+primarily include contingent liabilities in connection with potential
+long-term environmental remediation measures and legal disputes.
+This value represents the best estimate of the expenditure required
+to settle the present obligation as of the reporting date.
+In addition, E.ON has entered into indemnification agreements, which
+as a rule are incorporated in agreements concerning the disposal of
+shareholdings and, above all, affect the customary representations
+and warranties with relation to liability risks for environmental
+damage and contingent tax risks. In some cases, obligations are
+covered in the first instance by provisions of the disposed companies
+before E.ON itself is required to make any payments. Guarantees
+issued by companies that were later sold by E.ON SE or its legal pre-
+decessors are usually included in the respective final sales contracts
+in the form of indemnities.
+Moreover, E.ON has commitments under which it assumes joint
+and several liability arising from its interests in civil-law companies
+("GbR"), non-corporate commercial partnerships and consortia in
+which it participates.
+The guarantees of E.ON also include items related to the operation
+of nuclear power plants. Under the German Nuclear Energy Act
+("Atomgesetz" or "AtG") and the ordinance regulating the provision
+for coverage under the Atomgesetz ("Atomrechtliche Deckungs-
+vorsorge-Verordnung" or "AtDeckV") of April 27, 2002, German
+nuclear power plant operators are required to provide nuclear acci-
+dent liability coverage of up to €2.5 billion per incident.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million and
+€15 million for claims related to officially ordered evacuation mea-
+sures. Group companies have agreed to place their subsidiaries
+operating nuclear power plants in a position to maintain a level of
+liquidity that will enable them at all times to meet their obligations
+as members of the Nuklear Haftpflicht GbR, in proportion to their
+shareholdings in nuclear power plants.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+E.ON has also issued direct and indirect guarantees and surety
+bonds to third parties in connection with its own operations or the
+operations of affiliated companies, which may trigger payment
+obligations based on the occurrence of certain events. These instru-
+ments include both financial guarantees as well as operational
+guarantees, which primarily secure contractual obligations and
+benefit obligations for active and former employees.
+→ Consolidated Balance Sheets
+139
+37
+2021
+2020
+2021
+2020
+2021
+2020
+329
+464
+2,091
+2,112
+445
+239
+2,865
+2,815
+Germany
+Sweden
+ECE/Turkey
+Customer Solutions
+Germany Sales
+2020
+2021
+2020
+2021
+2031
+2,680
+11,743
+9,719
+2,642
+11,084
+8,662
+Financial Liabilities by Segment
+The following table breaks down the financial liabilities by segment:
+UK
+Financial Liabilities by Segment as of December 31¹
+Commercial paper
+Bank loans/Liabilities to banks
+Lease obligations²
+Other financial liabilities
+Financial liabilities
+€ in millions
+Energy Networks
+2021
+2020
+Bonds
+48
+Netherlands/Belgium
+329
+528
+111
+121
+55
+54
+35
+-3
+201
+172
+86
+94
+1
+1
+87
+95
+34
+46
+3
+2
+624
+73
+80
+320
+239
+1,998
+2,016
+445
+238
+2,772
+2,493
+14
+13
+Other
+1
+14
+225
+79
+83
+79
+308
+250
+135
+294
+14
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+73
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+-379
+-40
+Unrealized changes-reserve for hedging costs
+-42
+-42
+Reclassification adjustments recognized in income
+1482
+40
+54
+54
+Change in scope of consolidation
+1
+37
+Income taxes
+Companies accounted for under the equity method
+-54
+Balance as of December 31, 2020¹
+-1,809
+Balance as of January 1, 2021
+-45
+-1,809
+-464
+risk
+↑
+Back
+The development of OCI arising from cash flow hedges, broken
+down by hedged risk type, is as follows:
+Changes in OCI Arising from Cash Flow Hedges
+Consolidated Financial Statements 237
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Interest-rate
+Electricity
+price change
+Total
+€ in millions
+Balance as of January 1, 2020
+Unrealized changes-hedging reserve
+Currency risk
+risk
+-1,435
+Unrealized changes-hedging reserve
+655
+355
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 238
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The nominal volume of the hedging instruments is presented in the
+following table:
+Nominal Volume of Hedging Instruments in Connection with Cash Flow Hedges
+€ in millions
+Currency risk
+Interest-rate risk
+Electricity price change risk
+Net Investment Hedges
+Consolidated Financial Statements 235
+The carrying amount of the assets used as hedging instruments as
+of December 31, 2021, was €57 million (2020: €7 million) and the
+carrying amount of the liabilities used as hedging instruments was
+€1,165 million (2020: €1,165 million). The fair values of the desig-
+nated portion of the hedging instruments changed by €41 million in
+the reporting period (2020: €117 million).
+As in 2020, no ineffectiveness resulted from net investment
+hedges in 2021.
+Maturity
+Contents
+E.ON Annual Report 2021
+in that line item of the income statement which also includes the
+respective hedged transaction.
+Reclassifications recognized in income are generally reported
+247
+53
+Unrealized changes-reserve for hedging costs
+43
+43
+Reclassification adjustments recognized in income
+Change in scope of consolidation
+Income taxes
+Companies accounted for under the equity method
+Balance as of December 31, 2021¹
+Search
+¹As of December 31, 2021, includes -€131 million (2020: -€211 million) from terminated cash flow hedges.
+2Of this amount, €19 million relates to hedged cash flows that are no longer expected to occur.
+-50
+-237
+166
+21
+-12
+7
+113
+The balance of the OCI arising from cash flow hedges as of
+December 31, 2021, contains -€1.1 billion relating to hedging
+of interest-rate risk (2020: -€1.5 billion).
+-1,053
+Contents
+The Company uses foreign currency forwards, foreign currency
+swaps and foreign currency loans to protect the value of its net
+investments in its foreign operations denominated in foreign
+currency.
+Gains and losses from the ineffective portions of cash flow hedges
+are classified as other operating income or other operating expenses.
+488
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 236
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+(31) Derivative Financial Instruments and Hedging
+Transactions
+Strategy and Objectives
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+At the E.ON Group, hedge accounting in accordance with IFRS 9 is
+employed primarily in connection with hedging long-term liabilities
+and future financing via interest-rate derivatives and for hedging
+long-term foreign currency receivables and payables via currency
+derivatives. E.ON also hedges net investments in foreign operations.
+In the commodity sector, fluctuations in future cash flows from
+procurement and sales transactions are economically hedged by
+offsetting transactions. Hedge accounting is applied in individual
+cases with regard to hedging electricity price change risks.
+To hedge currency risk, E.ON entered into hedging transactions in
+the reporting year in pounds sterling at an average hedging rate of
+£0.88/€ (2020: £0.91/€) and in U.S. dollars at an average hedging
+rate of US$1.36/€ (2020: US$1.36/€). Hedging transactions were
+concluded at an average interest rate of 3.23 percent (2020: 3.43 per-
+cent) to hedge the interest rate risk in the euro zone. The average
+hedging price for hedging electricity price change risks amounted
+to €117.12/MWh in the year under review (2020: €48.06/MWh).
+Fair Value Hedges
+Fair value hedges are used to protect against the risk from changes
+in market values. Gains and losses on these hedges are generally
+reported in that line item of the income statement which also
+includes the respective hedged items.
+559
+454
+160
+-1,168
+E.ON Annual Report 2021
+→ Notes
+There are also legal proceedings in connection with completed M&A
+activities, in particular as a result of the acquisition of innogy SE.
+(30) Supplemental Cash Flow Disclosures
+In the current fiscal year, E.ON made no external payments for addi-
+tions to consolidated shareholdings and activities (2020: €0 million),
+although there was an additional purchase price payment to RWE
+for the acquisition of innogy in the amount of €0.1 billion. The only
+addition in the prior year was the largely non-cash acquisition of
+the VSEH Group from RWE; the purchase price was €740 million.
+The cash acquired totaled €6 million, and assets in the amount of
+€1,534 million and provisions and liabilities in the amount of
+€604 million were recognized.
+The total consideration received by E.ON in 2021 on the disposal of
+consolidated equity interests and activities generated cash inflows
+of €674 million (2020: €921 million), and a further €11 million in
+the form of shares. Cash and cash equivalents disposed of amounted
+to €71 million (2020: €88 million). The sale of the consolidated
+activities led to reductions of €1,261 million (2020: €1,182 million)
+in assets and €689 million (2020: €482 million) in provisions and
+liabilities. The disposals mainly related to sales in the course of the
+reorganization of business activities in Hungary and Benelux.
+At €5.6 billion, cash provided by operating activities before interest
+and taxes from continuing operations was €0.3 billion lower than in
+the prior year (€5.9 billion). In the Energy Networks business area,
+negative working capital effects in the German network business in
+particular had a negative impact on cash generated by operating
+activities, resulting in a year-on-year decrease of -€0.5 billion. The
+decline in Customer Solutions (-€0.2 billion year-on-year) was
+mainly due to working capital effects in Sweden. The Non-Core
+segment recorded an increase in cash generated from operations of
+€0.5 billion year-on-year, mainly due to the improvement in EBITDA
+based on the refund of payments made to date for the purchase of
+residual electricity volumes (€0.6 billion). Operating cash flow from
+continuing operations was also marked by the normalization of the
+tax payment in 2021.
+Cash provided by investing activities from continuing operations
+amounted to -€5.4 billion (2020: -€1.9 billion). The collateral pro-
+vided in connection with derivatives transactions (primarily initial
+Cash Flow Hedges
+margins) is significantly higher than in the prior year, primarily due
+to price developments in the current year. In the first quarter of the
+prior year, payments were received from the transfer of the indirect
+share in Nord Stream AG to the CTA, which was carried out in 2019.
+In addition, the prior year's cash flow was improved by an additional
+purchase price paid by RWE for the acquisition of innogy, the sale
+of innogy's distribution business in the Czech Republic, and the sale
+of the heating electricity business. The payment received from the
+sale of the stake in Rampion Renewables Ltd to RWE was also
+made in 2020. During the reporting year, the sale of two network
+companies in Hungary improved the cash flow from investing activ-
+ities to a relatively minor extent.
+Supplementary Information on Cash Flows from Operating Activities
+€ in millions
+Income taxes paid (less refunds)
+Interest paid
+Interest received
+Dividends received
+2021
+2020
+-651
+53
+-1,078
+At +€2.3 billion, cash provided by financing activities from con-
+tinuing operations was €4.9 billion higher than the prior-year figure
+of -€2.6 billion. This was due in particular to payments in the course
+of the settlement of the remaining minorities at innogy SE in the
+2020 financial year (+€2.4 billion). Variation margin payments in
+connection with derivative transactions had a positive effect on
+cash flows from financing activities. The pro rata disposal of busi-
+ness activities in Hungary resulted in a further improvement in the
+current fiscal year (+€0.4 billion).
+Cash flow hedges are used to protect against the risk arising from
+variable cash flows. Interest rate swaps and cross-currency interest
+rate swaps are the principal instruments used to limit interest rate
+and currency risks. The purpose of these swaps is to maintain the
+On April 13, 2017, the Federal Constitutional Court declared the
+Nuclear Fuel Tax Act to be incompatible with the Basic Law and
+invalid. The nuclear-fuel tax plus interest paid by E.ON was refunded.
+With regard to interest calculation, two legal procedures are being
+pursued by the nuclear power operators with the German customs
+authorities, one of which by Preussen Elektra GmbH. With the 18th
+amendment to the German Nuclear Energy Act, the German Federal
+Government has implemented both rulings of the German Federal
+Constitutional Court on the phaseout of nuclear energy and the
+agreement under public law concluded in this regard with the energy
+utilities and operators. This amendment regulated compensation
+claims for certain investments and residual volumes of electricity
+as well as the shareholder-related allocation of residual volumes of
+electricity at the joint power plants between Vattenfall Europe Nuclear
+Energy GmbH and Preussen Elektra GmbH. The legal disputes con-
+ducted in this respect were terminated by mutual agreement in
+2021. The payment of compensation claims and transfer of residual
+volumes of electricity was completed in 2021 in accordance with
+legal and contractual regulations.
+In order to reduce future cash flow fluctuations arising from electricity
+transactions effected at variable spot prices, futures contracts are
+concluded and also accounted for using cash flow hedge accounting
+in individual cases.
+2021
+Change in the fair value
+of hedged items
+2020
+-329
+50
+50
+62
+114
+2
+1,299
+33
+1,706
+291
+-383
+-338
+379
+1
+27
+17
+The total amount of ineffectiveness for cash flow hedges recorded for
+the year ended December 31, 2021, produced income of €21 million
+(2020: expense of €5 million). Of this amount, €26 million of income
+relates to hedging of interest-rate risk (2020: expense of €4 million)
+and €5 million in exchange-rate hedging expense (2020: €1 million).
+-17
+level of payments arising from long-term interest-bearing receiv-
+ables and liabilities denominated in foreign currency and euro by
+using cash flow hedge accounting in the functional currency of the
+respective E.ON company.
+2020
+-49
+327
+-27
+88
+The following table presents the carrying amounts of the hedging
+instruments and the changes in the fair values of the hedging
+instruments and hedged items by hedged risk type:
+105
+Carrying Amounts of Hedging Instruments and Changes in Fair Value of Hedging Instruments and Hedged Items in Connection with Cash Flow Hedges
+Interest-rate risk
+Electricity price change risk
+Receivables from derivative
+Carrying amount
+Change in the fair value
+of the designated portion
+€ in millions
+Currency risk
+Liabilities from derivatives
+of hedging instruments
+2021
+2020
+2021
+91
+2020
+372
+financial instruments
+2021
+959
+2,951
+20
+Cash outflows for trade payables and other
+operating liabilities
+957
+2
+34,428
+Cash outflows for trade payables and other
+operating liabilities
+3,090
+728
+935
+Cash outflows for liabilities within the scope of
+Cash outflows for liabilities within the scope of
+IFRS 7
+6
+40,986
+6,943
+8,848
+20,644
+2,148
+2,167
+5
+886
+Derivatives (with/without hedging relationships)
+8,402
+712
+913
+2,994
+Liabilities related to IAS 32
+27
+286
+107
+66
+Liabilities related to IAS 32
+10
+20
+76
+Other operating liabilities
+1,572
+9
+33
+Other operating liabilities
+24,025
+€ in millions
+24,736
+Financial liabilities Amortized Cost
+-1,179
+Fair Value through P&L
+18,651
+-449
+175
+Fair Value through OCI
+50
+Total
+17,256
+-10
+-559
+The net result of the category fair value through OCI results in
+particular from currency translation effects, interest income and
+proceeds from the sale of fair value through OCI securities.
+In addition to impairments of financial assets, net gains and losses
+in the amortized cost category are due primarily to interest income
+from financial assets and liabilities and effects from the currency
+translation of financial liabilities.
+The net gains and losses in the fair value through profit or loss mea-
+surement category encompass both the changes in fair value from
+derivative financial instruments and from equity instruments, and
+gains and losses on realization. The increase in net results was due
+in particular to market price increases in the commodity sector.
+Impairments of Financial Assets
+Impairment losses on financial assets must be recognized not only
+for losses already incurred but also for expected future credit losses.
+E.ON takes into account expected future credit losses of financial
+assets carried at amortized cost, financial assets measured at fair
+value through other comprehensive income, and receivables from
+finance leases.
+For trade receivables, expected credit losses are recognized over their
+entire residual term using the simplified method (lifetime expected
+credit loss [ECL] trade receivables). For other financial assets, E.ON
+first determines the credit loss expected within the first twelve
+months (stage 1-12 month ECL). In derogation of this, in the event
+of a significant increase in the default risk, the expected credit loss
+over the entire residual term of the respective instrument is recog-
+nized (stage 2-lifetime ECL). A significant increase in the default risk
+is assumed if the internally determined counterparty risk has been
+downgraded by at least three levels since initial recognition. If there
+are objective indications of an actual default, an individual impairment
+loss must be recognized on the income statement (stage 3-losses
+already incurred).
+E.ON distinguishes between two approaches when calculating
+expected future credit losses. If external or internal rating informa-
+tion is available, the expected credit loss is determined on the basis
+of this data. If no rating information is available, E.ON determines
+default ratios on the basis of historical default rates, taking into
+account forward-looking information on economic developments.
+In the E.ON Group, a default or the classification of a receivable as
+uncollectible is assumed after 180, 270 or 360 days, depending on
+the region.
+819
+Valuation Allowances for Trade Receivables
+In 2021, valuation allowances for trade receivables changed as
+shown in the following table:
+-275
+IFRS 7
+-266
+2020
+4,433
+10,375
+26,175
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 246
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Financial guarantees with a total nominal volume of €8 million
+(2020: €8 million) were issued to companies outside of the Group.
+This amount is the maximum amount that E.ON would have to pay
+in the event of claims on the guarantees. E.ON has recognized a lia-
+bility for this in the amount of €8 million (2020: €8 million).
+For financial liabilities that bear floating interest rates, the rates that
+were fixed on the balance sheet date are used to calculate future
+interest payments for subsequent periods as well. Financial liabilities
+that can be terminated at any time are assigned to the earliest
+maturity band in the same way as put options that are exercisable
+at any time.
+In gross-settled derivatives (usually currency derivatives and com-
+modity derivatives), outflows are accompanied by related inflows
+of funds or commodities.
+The net gains and losses from financial instruments by IFRS 9
+category are shown in the following table:
+Net Gains and Losses by Category
+2021
+Financial assets Amortized Cost
+2,656
+26
+Derivatives (with/without hedging relationships)
+6,680
+21,155
+Commercial paper
+1,510
+Bonds
+Commercial paper
+Cash outflows
+Cash outflows
+3,350
+2021
+Cash outflows
+2023-2025
+3,169
+3,229
+8,152
+Cash outflows
+from 2026
+20,787
+Bank loans/Liabilities to banks
+862
+138
+2022
+3,409
+Bonds
+€ in millions
+€ in millions
+Search
+↑
+Back
+The following two tables illustrate the contractually agreed (undis-
+counted) cash outflows arising from the liabilities included in the
+Scope of IFRS 7:
+Cash Flow Analysis as of December 31, 2021
+→ Consolidated Statement of Income
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 245
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Cash Flow Analysis as of December 31, 2020
+Cash outflows
+€ in millions
+2022
+Cash outflows
+2023
+Cash outflows Cash outflows
+2024-2026
+from 2027
+249
+211
+Bank loans/Liabilities to banks
+139
+1
+7
+Financial guarantees
+1
+7
+Cash outflows for financial liabilities
+6,558
+3,992
+7,889
+23,068
+Cash outflows for financial liabilities
+4,092
+3,705
+9,440
+23,085
+Trade payables
+9,036
+Trade payables
+7,927
+Financial guarantees
+23,793
+8
+24
+199
+341
+Lease obligations
+431
+439
+909
+1,694
+Lease obligations
+510
+426
+1,087
+1,942
+Other financial liabilities
+346
+65
+50
+1
+Other financial liabilities
+274
+1
+Balance as of January 1
+Disposals
+Write-downs
+Back
+Balance as of December 31
+1. Liquidity Management
+The primary objectives of liquidity management at E.ON consist of
+ensuring ability to pay at all times, the timely satisfaction of con-
+tractual payment obligations and the optimization of costs within
+the E.ON Group.
+Cash pooling and external financing are largely centralized at E.ON SE
+and certain financing companies. Funds are provided to the other
+Group companies as needed on the basis of an "in-house banking"
+solution.
+E.ON SE determines the Group's financing requirements on the basis
+of short- and medium-term liquidity planning. The financing of the
+Group is controlled and implemented on a forward-looking basis in
+accordance with the planned liquidity requirement or surplus. Rele-
+vant planning factors taken into consideration include operating
+cash flow, capital expenditures, divestments, margin payments and
+the maturity of bonds and commercial paper.
+2. Price Risks
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest rates,
+commodities and asset management. These risks create volatility
+in earnings, equity, debt and cash flows from period to period. E.ON
+has developed a variety of strategies to limit or eliminate these risks,
+including the use of derivative financial instruments, among others.
+3. Credit Risks
+Separate Risk Committees/Steering Groups are responsible for the
+maintenance and further development of the strategy set by the
+Management Board of E.ON SE with regard to commodity, treasury
+and credit risk management policies.
+E.ON is exposed to credit risk in its operating activities and through
+the use of financial instruments. Uniform credit risk management
+procedures are in place throughout the Group to identify, measure
+and steer credit risks.
+Foreign Exchange Risk Management
+E.ON SE is responsible for controlling the currency risks to which
+the E.ON Group is exposed.
+Because it holds interests in businesses outside of the euro area,
+currency translation risks arise within the E.ON Group. Fluctuations
+in exchange rates produce accounting effects attributable to the
+translation of the balance sheet and income statement items of the
+foreign consolidated Group companies included in the Consolidated
+Financial Statements. Translation risks are hedged through borrow-
+ing in the corresponding local currency, which may also include
+shareholder loans in foreign currency. In addition, derivative and
+non-derivative financial instruments are employed as needed. The
+hedges qualify for hedge accounting under IFRS as hedges of net
+investments in foreign operations. The Group's translation risks are
+reviewed at regular intervals and the level of hedging is adjusted
+whenever necessary. The respective debt factor, net assets and the
+enterprise value denominated in the foreign currency are the princi-
+pal criteria governing the level of hedging.
+The E.ON Group is also exposed to operating and financial transaction
+risks attributable to foreign currency transactions. The subsidiaries
+are responsible for managing their operating currency risks and are
+generally required to hedge their currency risks through E.ON SE.
+E.ON SE coordinates hedging throughout the Group companies and
+makes use of external derivatives as needed. It may either directly
+close out foreign currency positions that have been tendered, in
+whole or in part, through external transactions, or keep the position
+open within approved limits. The one-day value-at-risk (95 percent
+confidence) for transactional foreign currency positions totaled
+€0.6 million as of December 31, 2021 (2020: €0.5 million) and is
+mainly determined by the currencies Czech koruna, Hungarian
+forint and Swedish krona.
+Financial transaction risks result from payments originating from
+financial receivables and payables. They are generated both by
+external financing in a variety of foreign currencies, and by share-
+holder loans from within the Group denominated in foreign currency.
+Financial transaction risks are generally hedged.
+Interest Risk Management
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities. Positions based on fixed interest rates, on the other hand,
+are subject to changes in fair value resulting from the volatility of
+market rates. E.ON seeks a specific mix of fixed-interest and floating-
+rate debt over time. This is influenced, among other factors, by the
+The following discussion of E.ON's risk management activities and
+the estimated amounts generated from value-at-risk ("VaR") and
+sensitivity analyses are "forward-looking statements" that involve
+risks and uncertainties. Actual results could differ materially from
+those projected due to actual, unforeseeable developments in the
+global financial markets. The methods used by the Company to
+analyze risks should not be considered forecasts of future events or
+losses. For example, E.ON faces certain risks that are either non-
+financial or non-quantifiable. Such risks principally include country
+risk, operational risk, regulatory risk and legal risk, which are not
+represented in the following analyses.
+On a Group-wide basis, Financial Controlling/Counterparty Risk
+Management monitors and steers credit risks for banks, and Counter-
+party Risk Management monitors and steers corporates of a certain
+materiality. These activities are carried out each using a standard
+software package.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Not past-due
+Past-due by
+up to 30 days
+31 to 60 days
+61 to 90 days
+Interest Rate Benchmark Reform
+The majority of E.ON SE's external financial derivatives are subject
+to bilateral collateral agreements with banks. Prior to the interest
+rate benchmark reform, the collateral balance generally accrued
+interest on the basis of the Euro Overnight Index Average, which
+was affected by the reform. The conversion of the affected agree-
+ment to interest at the Euro Short-Term Rate was fully completed
+on January 6, 2022.
+Risk Management
+Principles
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within the
+confines of the Group's overall guidelines. To ensure efficient risk
+management at the E.ON Group, the Trading (Front Office), Financial
+Controlling (Middle Office) and Financial Settlement (Back Office)
+departments are organized as strictly separate units. Risk steering
+and reporting in the areas of interest rates, currencies and credit for
+banks and liquidity management is performed by the Financial Con-
+trolling department (in the credit area, also in part by Counterparty
+Risk Management), while risk steering and reporting in the area
+of commodities and in the credit area for industrial enterprises is
+performed at Group level by a separate department.
+E.ON uses a Group-wide treasury, risk management and reporting
+system. This system is a standard information technology solution
+that is fully integrated and is continuously updated. The system is
+designed to provide for the analysis and monitoring of the E.ON
+Group's exposure to liquidity, foreign exchange and interest risks.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 248
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 250
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+To the extent possible, collateral is negotiated with counterparties
+for the purpose of reducing credit risk. Accepted as collateral are
+primarily guarantees issued by the respective parent companies,
+letters of comfort or evidence of profit and loss transfer agreements
+in combination with letters of awareness. To a lesser extent, the
+Company also requires bank guarantees and deposits of cash and
+securities as collateral to reduce credit risk. Risk-management col-
+lateral in the forms mentioned above totaling €59.3 billion (2020:
+€1.5 billion) was used for setting limits. The primary reason for the
+increase was the massive price hikes on the wholesale markets.
+As a result, the attributable collateral of individual parent companies
+was significantly increased and taken into account.
+Derivative transactions are generally executed on the basis of stan-
+dard agreements that allow for the netting of all open transactions
+with individual counterparties. To further reduce credit risk, bilateral
+margining agreements are entered into with selected banks. Limits,
+which are regularly monitored, are imposed on the credit and liquid-
+ity risk resulting from bilateral margining agreements and exchange
+clearing. The systematic management of liquidity risk remains an
+important component of risk management at E.ON, particularly
+against the backdrop of the current high level of energy price vola-
+tility. Consequently, the rise in energy prices since summer 2021
+has increased credit risks from pending procurement contracts.
+There is no credit risk with respect to the exchange-traded forward
+and option contracts with an aggregate nominal value of €4,109 mil-
+lion as of December 31, 2021 (2020: €2,183 million). For the
+remaining financial instruments, the maximum risk of default is
+equal to their nominal amounts.
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings or in
+short-term securities (for example, commercial paper) of issuers
+with strong credit ratings. Bonds of public and private issuers are
+also selected for investment. Group companies that for legal rea-
+sons are not included in the cash pool invest money at leading local
+banks. Standardized credit assessment and limit-setting is comple-
+mented by daily monitoring of CDS levels at the banks and at other
+significant counterparties.
+Asset Management
+For the purpose of financing long-term payment obligations, including
+those relating to asset retirement obligations (see Note 26 →)
+and cash investments, financial investments totaling €2.9 billion
+(2020: €3.0 billion) were held predominantly by German E.ON
+Group companies as of December 31, 2021. Isolated withdrawals
+were offset by positive performance.
+These financial assets are invested on the basis of an accumulation
+strategy (total-return approach), with investments broadly diversified
+across the various asset classes, for example the money market,
+bond and equity asset classes, as well as alternative asset classes
+like real estate. The majority of the assets are held in investment
+funds managed by external fund managers. Corporate Asset Man-
+agement at E.ON SE, which is part of the Company's Finance
+Department, is responsible for continuous monitoring of overall risks
+and those concerning individual fund managers. The three-month
+VaR with a 98-percent confidence interval for these financial assets
+was €100 million (2020: €218 million). The decrease results from
+the elimination of the upheavals in the context of the coronavirus
+crisis in 2020 from the period under review.
+The liquidation of Versorgungskasse Energie VVaG (VKE i. L.) was
+almost complete as of December 31, 2021. Financial investments
+under management amounted to €53.4 million as of December 31,
+2021 (2020: €79.3 million). The company was deconsolidated on
+June 30, 2019.
+E.ON Annual Report 2021
+Contents
+E.ON Annual Report 2021
+987
+In principle, each Group company is responsible for managing credit
+risk in its operating activities. Depending on the nature of the oper-
+ating activities and the credit risk, additional credit risk monitoring
+and controls are performed both by the units and by Corporate Head-
+quarters. Regular reports on credit limits, including their utilization,
+are submitted to the Risk Committee. Intensive, standardized moni-
+toring of quantitative and qualitative early-warning indicators, as
+well as close monitoring of the credit quality of counterparties, enable
+E.ON to act early in order to minimize risk.
+Credit Risk Management
+Back
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 249
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+type of business model, existing liabilities as well as the regulatory
+framework in which E.ON operates. To manage the interest rate
+position, several instruments, including derivatives, are deployed.
+With interest rate derivatives included, the share of financial liabili-
+ties with floating interest rates was 12 percent as of December 31,
+2021 (2020: 10 percent). Under otherwise unchanged circum-
+stances, the volume of financial liabilities with fixed interest rates
+would decline to €20.3 billion in 2023 from €24.7 billion at year-
+end 2021 and 2022. The effective interest rate duration of the
+financial liabilities, including interest rate derivatives, was 8.1 years
+as of December 31, 2021 (2020: 9.4 years). The volume-weighted
+average interest rate of the financial liabilities, including interest
+rate derivatives, was 2.6 percent as of December 31, 2021 (2020:
+3.1 percent).
+As of December 31, 2021, the E.ON Group held interest rate deriv-
+atives with a nominal value of €4,016 million (2020: €4,320 million).
+A sensitivity analysis was performed on the Group's short-term
+floating-rate borrowings, including hedges of both foreign
+exchange risk and interest risk. This measure is used for internal
+risk controlling and reflects the economic position of the E.ON
+Group. A one-percentage-point upward or downward change in
+interest rates (across all currencies) would raise or lower interest
+charges by ±€26.2 million (2020: ±€69.1 million) in the subse-
+quent fiscal year.
+Commodity Price Risk Management
+The E.ON portfolio of physical assets, long-term contracts and end-
+customer sales is exposed to substantial risks from fluctuations in
+commodity prices. The principal commodity prices to which E.ON is
+exposed relate, in particular, to electricity, gas, green and emission
+certificates.
+The objective of commodity risk management is to transact through
+physical and financial contracts to optimize the value of the portfolio
+while reducing the potential negative deviation from target EBIT.
+In the normal course of business of the underlying energy produc-
+tion and retail sales activities, E.ON's individual management units
+are exposed to uncertain commodity market prices, which impacts
+operating gains and costs. All external trading on commodity mar-
+kets must be related to reducing open commodity positions and be
+undertaken in strict accordance with approved commodity hedging
+strategies.
+Due to the decentralized governance approach and the primary focus
+on procurement and purely hedging transactions, the allocation of
+risk capital is no longer necessary. The processes and operational
+management models within the trading system are monitored by
+the local market risk teams and centrally managed by the Risk
+Management department.
+Following the spinoff of Uniper, E.ON established its own procure-
+ment organization for the distribution business and secured market
+access for the output of the remaining energy production in order
+to appropriately manage the residual commodity risks. In addition,
+E.ON has established a new subsidiary, E.ON Energy Markets GmbH
+(EEM), which acts as a central interface to the wholesale markets.
+The main function of EEM is to consolidate E.ON's commodity posi-
+tions in order to diversify and reduce credit and margin risks.
+As of December 31, 2021, the E.ON Group primarily held electricity
+and gas derivatives with a nominal value of €31,512 million (2020:
+€24,662 million).
+A key foundation of the commodity risk management system is the
+Group-wide Commodity Risk Policy and the corresponding internal
+policies of the units. These specify the control principles for com-
+modity risk management, minimum required standards and clear
+management and operational responsibilities.
+Commodity exposures and risks are reported across the Group on a
+monthly basis to the members of the Risk Committee. A report on
+complex weather risks is prepared once each quarter.
+In order to minimize credit risk arising from operating activities and
+from the use of financial instruments, the Company enters into
+transactions only with counterparties that satisfy the Company's
+internally established minimum requirements. Maximum credit risk
+is confined by credit limits based on internal and (where available)
+external credit ratings. The setting and monitoring of credit limits
+is subject to certain minimum requirements, which are based on
+Group-wide credit risk management guidelines. Long-term operating
+contracts and asset management transactions are not comprehen-
+sively included in this process. They are monitored separately at the
+level of the responsible units.
+Other¹
+686
+6,840
+The default risks for financial assets for which rating information is available can be found in the following table for each rating grade and
+separately according to the stages of impairment existing in 2021:
+€ in millions
+Credit Risk Exposure for Financial Assets for Which Rating Information Is Available as of December 31, 2021
+Stage 1 financial assets
+Trade receivables
+2021
+2020
+2021
+→ Notes
+4,543
+29
+2,299
+2020
+2,607
+69
+818
+152
+915
+605
+4,572
+6,061
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+1The item Other includes currency translation differences.
+2021
+2020
+-1,239
+-962
+337
+57
+-315
+-328
+-36
+-1,253
+-6
+-1,239
+There were no significant changes in valuation allowances in 2021
+for other financial assets measured at amortized cost or at fair
+value through other comprehensive income, or for receivables from
+finance leases.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Consolidated Financial Statements 247
+→ Consolidated Statement of Income
+6,130
+4,032
+3,364
+Gross carrying amount investment grade
+130
+101
+10
+11
+55
+77
+7
+10
+91 to 180 days
+118
+172
+25
+31
+more than 180 days incl. specific valuation allowances
+709
+932
+580
+886
+Total
+14
+5,275
+24
+322
+Gross carrying amount non investment grade
+Gross carrying amount default grade
+Total
+The default risks for trade receivables for which no rating information is available and the amount of expected credit losses over the remaining
+term are shown in the following matrix for each maturity class:
+€ in millions
+Credit Risk Exposure for Trade Receivables for Which No Rating Information Is Available as of December 31, 2021
+Gross carrying amount
+Lifetime-ECL
+2021
+2020
+2021
+2020
+5,506
+3,681
+40
+1,334
+1,594
+646
+35
+952
+312
+E.ON Annual Report 2021
+2,998
+1,108
+Bank loans/Liabilities to banks
+Lease obligations
+Other financial liabilities
+Trade payables and other operating liabilities
+Trade payables
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Liabilities related to IAS 322
+2,668
+2,668
+Bonds
+AmC
+1,016
+AmC
+1,002
+25,403
+19,452
+32,841
+32,528
+29,019
+1,016
+Financial liabilities
+Total assets
+Assets held for sale
+212
+157
+355
+2,998
+2,998
+2,261
+737
+1,486
+FVPL
+1,486
+826
+660
+1,512
+FVOCI
+1,512
+1,435
+77
+Cash and cash equivalents
+Restricted cash
+29,019
+130
+AmC
+29,752
+FVPL
+2,404
+85
+2,204
+115
+1,893
+1,893
+n/a
+2,404
+1,893
+1,892
+2,271
+2,271
+AmC
+2,280
+2,280
+Other operating liabilities
+Liabilities associated with assets held for sale
+1
+2,404
+AmC
+7,927
+607
+607
+AmC
+607
+1,211
+31
+576
+2,615
+2,606
+n/a
+2,576
+600
+296
+AmC
+293
+27
+266
+23,814
+16,665
+8,064
+30,963
+2,833
+623
+515
+Carrying Amounts, Fair Values and Measurement Categories by Class within the Scope of IFRS 7 as of December 31, 2020
+€ in millions
+Equity investments
+Financial receivables and other financial assets
+Receivables from finance leases
+Other financial receivables and financial assets
+Carrying amounts
+Carrying amounts
+within the scope of
+IFRS 7
+→ Consolidated Statement of Changes in Equity → Notes
+Carrying amounts
+within the scope of
+IFRS 91
+Derived from active
+Fair value
+market prices
+(Level 1)
+market prices
+(Level 2)
+Determined by
+valuation methods
+(Level 3)
+1,883
+501
+Determined using
+→ Consolidated Statement of Recognized Income and Expenses
+Consolidated Financial Statements 242
+→ Consolidated Statement of Cash Flows
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable estimates
+of their fair values because of their short maturity.
+Where the fair value of a financial instrument can be derived from
+an active market without the need for an adjustment, that value is
+used as the fair value. This applies in particular to equities held and
+to bonds held and issued.
+Consolidated Financial Statements 241
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+��� Consolidated Statement of Income
+→ Consolidated Balance Sheets
+FVPL
+501
+73
+0
+Other operating assets
+Securities and fixed-term deposits
+14,769
+11,407
+10,575
+7,615
+AmC
+3,063
+3,063
+FVPL
+3,063
+100
+214
+214
+n/a
+214
+3,778
+515
+AmC
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Total liabilities
+Trade receivables
+123
+428
+1,067
+862
+289
+257
+n/a
+257
+778
+605
+605
+482
+AmC
+482
+4
+150
+328
+123
+FVPL
+123
+Trade receivables and other operating assets
+9,182
+7,714
+AmC
+2,336
+22,154
+7,752
+613
+13,789
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2020
+Compulsory netting is carried out if the netting criteria pursuant to
+IAS 32.42 are met cumulatively.
+Transactions and business relationships resulting in the financial
+assets and liabilities presented are regularly concluded on the basis
+of standard contracts that permit the conditional netting of open
+transactions in the event that a counterparty becomes insolvent. If
+there is also currently a legal right to set off and the intention is to
+settle on a net basis, offsetting is mandatory in accordance with
+IAS 32.
+The netting agreements are derived from netting clauses contained in
+master agreements including those of the International Swaps and
+Derivatives Association (ISDA), the German Master Agreement for
+Financial Derivatives Transactions (DRV), the European Federation of
+Energy Traders (EFET) and the Financial Energy Master Agreement
+(FEMA).
+Collateral pledged to and received from financial institutions in
+relation to these liabilities and assets limits the utilization of credit
+lines in the fair value measurement of interest-rate and currency
+derivatives, and is shown in the table.
+Carrying
+Conditional
+netting
+amount
+(netting
+Gross amount
+Amount offset
+amount
+agreements)
+Financial
+collateral
+received/
+pledged
+Net value
+€ in millions
+24,490
+Financial assets
+7,905
+3,968
+1,916
+2,529
+2,336
+33,261
+7,752
+135
+135
+9,631
+14,222
+1,521
+25,374
+Financial liabilities
+Trade payables
+Commodity derivatives
+Interest-rate and currency derivatives
+Total
+10,340
+1,304
+9,036
+1,131
+11,621
+1,032
+10,589
+6,621
+2,529
+613
+35,597
+Trade receivables
+7,615
+7,927
+Commodity derivatives
+1,506
+387
+1,119
+542
+132
+445
+Interest-rate and currency derivatives
+3,179
+3,179
+976
+2,203
+Total
+12,612
+387
+12,225
+542
+2,170
+7,927
+7,615
+7,927
+Financial liabilities
+7,615
+Commodity derivatives
+2,131
+387
+769
+3
+972
+Interest-rate and currency derivatives
+1,532
+1,532
+8
+1,524
+Total
+11,278
+387
+10,891
+769
+11
+10,111
+Trade payables
+Total
+1,744
+1,656
+€ in millions
+Equity investments
+Derivative financial instruments
+Total
+Transfers
+Purchases
+Jan. 1, 2021
+428
+(including additions)
+Fair Value Hierarchy Level 3 Reconciliation
+Sales (including
+disposals)
+into Level 3
+out of Level 3
+Exchange rate
+differences
+29
+-72
+15
+-31
+-29
+59
+Settlements
+The fair values determined using valuation techniques for financial
+instruments carried at fair value are reconciled as shown in the
+following table:
+The input parameters of Level 3 of the fair value hierarchy for equity
+investments are specified taking into account economic develop-
+ments and available industry and corporate data (see also Note 1 Ð).
+A hypothetical change of +10 percent or -10 percent in these key
+internal valuation parameters as of the balance sheet date would
+lead to a theoretical change in market values of +€28 million or
+-€27 million, respectively.
+At the end of each reporting period, E.ON assesses whether there
+might be grounds for reclassification between hierarchy levels. In
+2021, due to a change in the estimate of market liquidity, securities
+with a fair value of €394 million were reclassified from hierarchy
+level 1 to hierarchy level 2 and securities with a fair value of €64 million
+were reclassified from hierarchy level 2 to hierarchy level 1. Invest-
+ments with a fair value of €72 million were reclassified from hierarchy
+level 3 to hierarchy level 2 because fair values are no longer deter-
+mined using valuation techniques but can be derived from market
+values.
+2,136
+1,656
+1,120
+1,016
+185
+56,840
+49,193
+¹FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values
+of the two hierarchy levels listed.
+2Liabilities related to IAS 32 include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 243
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The fair value of shareholdings in unlisted companies and of debt
+instruments that are not actively traded, such as loans received,
+loans granted and financial liabilities, is determined by discounting
+future cash flows. Any necessary discounting takes place using cur-
+rent market interest rates over the remaining terms of the financial
+instruments.
+The determination of the fair value of derivative financial instruments
+is discussed in Note 31 →.
+-72
+5
+Gains/Losses in
+income statement
+43
+Financial assets
+Conditional
+netting
+amount
+Gross amount Amount offset
+Carrying
+amount
+(netting
+agreements)
+Financial
+collateral
+received/
+pledged
+Dec. 31, 2021
+289
+Trade receivables
+11,206
+1,304
+9,902
+271
+Commodity derivatives
+22,735
+1,032
+21,703
+7,481
+Interest-rate and currency derivatives
+€ in millions
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2021
+Net value
+→ Notes
+The extent to which the offsetting of financial assets and financial liabilities is covered by netting agreements is presented in the following
+tables:
+443
+-72
+-31
+30
+29
+5
+332
+E.ON Annual Report 2021
+-72
+Consolidated Financial Statements 244
+Search
+↑
+Back
+→ Consolidated Statement of Income
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+Contents
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+Back
+↑
+Search
+16
+E.ON Annual Report 2021
+120
+289
+261
+Contents
+Consolidated Financial Statements 253
+Due in 1 to 2 years
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The following inpayments are expected from existing operating
+leases:
+E.ON as Lessor-Operating Leases
+€ in millions
+Due within 1 year
+2020
+86
+61
+2020
+E.ON exchanges goods and services with a large number of compa-
+nies as part of its continuing operations. Some of these companies
+are related parties, including associated companies accounted for
+under the equity method and their subsidiaries. Receivables and
+payables consist primarily of lease obligations from leaseback models
+and trade receivables. Joint ventures and subsidiaries that are not
+fully consolidated continue to be accounted for as associated com-
+panies. Transactions with related parties in the reporting year and
+in the previous year are summarized as follows:
+113
+(34) Transactions with Related Parties
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+393
+12
+Total
+40
+43
+Undiscounted lease payments
+12
+1
+1
+29
+32
+Due in 4 to 5 years
+29
+36
+370
+10
+1
+19
+27
+Due in more than 5 years
+134
+142
+37
+40
+13
+97
+115
+10
+2021
+584
+56
+236
+366
+Expenses
+1,471
+1,288
+Associated companies
+746
+531
+Joint ventures
+141
+143
+Other related parties
+614
+Receivables
+644
+496
+Associated companies
+211
+236
+Joint ventures
+17
+Due in 3 to 4 years
+117
+Other related parties
+151
+113
+Joint ventures
+Due in 2 to 3 years
+47
+52
+Due in 3 to 4 years
+42
+40
+Due in 4 to 5 years
+36
+36
+Due in more than 5 years
+104
+69
+63
+Total
+354
+338
+€ in millions
+2021
+Income
+1,604
+1,575
+Associated companies
+1,255
+1,058
+Related-Party Transactions
+36
+Expenses from low-value leases not included in short-term leases
+Variable lease payments
+1
+16
+19
+18
+10
+3
+160
+154
+1
+9
+1
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 252
+→ Consolidated Statement of Income
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Changes in Equity → Notes
+Cash outflows from lease agreements totaled €564 million (2020: €523 million) in the fiscal year and are allocated to operating cash flow in
+the amount of €201 million (2020: €191 million). This includes the lease expense for short-term and low-value leases as well as the expense
+from variable lease payments and interest expense for the period. Payments allocated to the amortization of the lease liability are recognized
+in cash flows from financing activities in the amount of €363 million (2020: €332 million).
+E.ON as Lessor
+12
+2020
+2021
+Due to the practical expedients used, the recognition of a right-of-
+use asset is not necessary for low-value leases and leases with a
+lease term of less than twelve months. Instead, a lease expense is
+recognized in these cases. The following amounts are recognized in
+the income statement in connection with leases in the fiscal year:
+Liabilities
+Other related parties
+Contents
+Search
+↓
+Back
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 251
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+E.ON enters into lease agreements as a lessor to a limited extent. Finance leases include technical equipment and machinery, in particular
+generation plants, that have been transferred to customers for use. Operating leases include assets that have been transferred for use, in
+particular real estate, heat and electricity generation plants and lines. There are no material risks in connection with rights retained to the
+assets temporarily transferred for use, with the result that risk management strategies, in particular, are not necessary. Residual-value
+guarantees are only entered into on an individual basis for purposes of additional hedging.
+(33) Leasing
+E.ON operates as a lessee especially in the areas of networks, land
+and buildings and vehicle fleets. Leases are recognized in accordance
+with the right-of-use model as set out in IFRS 16. The tables in Note
+15 → present the development of the right-of-use assets by asset
+class. The net carrying amount of the rights of use at the balance
+sheet date of December 31, 2021, in the amount of €2,424 million
+(2020: €2,543 million) decreased year-on-year by €119 million
+(2020: €39 million). This decrease is mainly attributable to the pre-
+sentation of revised estimates in connection with the return on
+equity for the upcoming fourth regulatory period published by the
+Federal Network Agency on October 20, 2021. Accordingly, a new,
+lower imputed return on equity was established uniformly for elec-
+tricity and gas. Depreciation of right-of-use assets in the amount
+of €382 million (2020: €374 million) remained nearly constant
+compared with the prior year.
+To ensure operative flexibility, in particular for real estate leases
+extension and termination options are included in the agreements.
+In determining the lease term, E.ON considers all facts and circum-
+stances that have an impact on the exercise of an extension option
+or the non-exercise of a termination option. In the determination of
+the lease liability, and correspondingly, of the right-of-use assets,
+all reasonably certain cash outflows are taken into consideration.
+As of December 31, 2021, potential future cash outflows in the
+amount of €133 million (2020: €187 million) were not included in
+the lease liability as it is not reasonably certain that the leases will
+be renewed or not terminated. Variable lease payments occur in
+only immaterial amounts and E.ON generally does not issue resid-
+ual value guarantees. Leases not yet commenced to which E.ON as
+a lessee is committed result in potential future cash outflows over
+the expected lease terms of €348 million (2020: €236 million).
+A significant proportion of this relates to leases in connection with
+network cooperation agreements at Westenergie AG, which will
+commence on January 1, 2022, and are accounted for within the
+E.ON Group as sale and leaseback transactions under IFRS 16. The
+largest transaction relates to the lease of the network of Strom-
+netzgesellschaft Essen GmbH & Co. KG, in which Westnetz GmbH
+holds 50 percent of the partnership shares; the remaining 50 per-
+cent of the partnership shares were sold by Westnetz GmbH to
+Essener Versorgungs- und Verkehrsgesellschaft mbH (EVV) with
+effect from January 1, 2022 (see Note 5 >). This item also includes
+future rental payments for the new office building of E.ON Sverige
+AB in Malmö, which is scheduled to be occupied in 2023. The exist-
+ing lease liabilities do not contain any covenant clauses that are
+linked to financial ratios.
+E.ON as Lessee-Effects within the Income Statement
+€ in millions
+Expenses from short-term leases (<12 months)
+Interest expense from leasing
+Income from subleases
+Gain/Loss from sale and leaseback transactions
+The liabilities from short-term agreements with a term of less than
+twelve months entered into for the next fiscal year do not vary
+materially from the expenses of the current fiscal year.
+As of the balance sheet date of December 31, 2021, right-of-use
+assets are offset by lease liabilities with a present value of €2,539 mil-
+lion (2020: €2,615 million) recognized under financial liabilities
+(see Note 27 ); the short-term portion of the lease liabilities totals
+€355 million (2020: €342 million). The maturity structure of the
+future payment obligations from leases is presented in Note 32 →.
+E.ON as Lessee
+33
+The present value of minimum lease payments is recognized under receivables from finance leases (see Note 18 >). The short-term portion
+totals €44 million (2020: €44 million). There were no material changes to net investments in the period under review. The nominal and
+present values of the lease payments had the following maturities:
+The following effects from activity as a lessor are recognized for the
+period under review:
+2020
+2021
+2020
+64
+67
+21
+23
+1
+44
+44
+56
+54
+18
+19
+1
+39
+35
+Due in 2 to 3 years
+47
+51
+15
+16
+1
+Present value of mini-
+mum lease payments
+teed residual value
+2021
+Discounted non-guaran-
+Unrealized interest
+income
+2020
+E.ON as Lessor-Effects within the Income Statement
+€ in millions
+Finance Lease
+2021
+2020
+Gain/loss from the disposal of assets
+Financial income from net investments
+Income from variable lease payments
+-1
+24
+6
+29
+2
+Operating Lease
+Income from leasing
+E.ON as Lessor-Finance Leases
+thereof Income from variable lease
+payments
+47
+5
+9
+Results from the disposal of assets were recognized in income.
+Cash flows from operating leases are allocated to cash flow before
+interest and taxes. This also applies to cash inflows from finance
+leases with variable lease payments. Payments recognized as
+financing income from net investments increase the operating cash
+flow.
+Undiscounted lease
+payments
+€ in millions
+Due within 1 year
+Due in 1 to 2 years
+2021
+2020
+2021
+50
+315
+2,098
+100.0
+60,944
+External sales by location of seller
+43,607
+33,381
+17,868
+13,989
+2,541
+1,952
+77,358
+3,135
+10,164
+8,720
+43
+52
+77,358
+60,944
+Intangible assets
+1,589
+2,850
+1,582
+55
+9,108
+2021
+2020
+2021
+2020
+2021
+2020
+2021
+2020
+45
+External sales by location of customer
+32,809
+18,644
+14,092
+2,487
+1,953
+3,230
+2,927
+11,578
+41,374
+2020
+146
+203
+2,424
+2,543
+Property, plant and equipment
+25,751
+25,494
+792
+718
+5,221
+2
+5,175
+92
+4,994
+5,440
+5
+4
+36,860
+36,923
+Companies accounted for under the equity method
+97
+195
+1
+152
+199
+271
+399
+1,338
+1,466
+6
+14
+3,553
+156
+3,855
+2,095
+2,198
+104
+96
+41
+49
+31
+42
+Right-of-use assets
+3,054
+2021
+2021
+Effects from market valuation derivatives
+-3,250
+-1,128
+Electricity
+Impairments (+)/Reversals (-)
+409
+557
+Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction
+€ in millions
+791
+Gas
+Other non-operating earnings
+-388
+246
+Other
+Adjusted EBIT
+4,723
+3,776
+802
+Total
+656
+Restructuring/cost-management expenses
+2021
+2020
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+EBIT
+Non-operating adjustments
+6,509
+2,883
+511
+167
+6,676
+2,901
+-1,953
+875
+Segment Information by Product
+Net book gains/losses
+-26
+-258
+18
+2020
+Impairments (+)/Reversals (-)
+27
+Consolidated Financial Statements 258
+→ Consolidated Statement of Income
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The following table breaks down external sales (by customer and seller location), intangible assets and property, plant and equipment,
+as well as companies accounted for under the equity method, by geographic area:
+Geographic Segment Information
+Back
+Germany
+Sweden
+Netherlands/Belgium
+Europe (other)
+Other
+Total
+€ in millions
+2021
+2020
+United Kingdom
+49
+↑
+Contents
+Scheduled depreciation and amortization
+3,117
+3,102
+Adjusted EBITDA
+7,889
+6,905
+2021
+2020
+Search
+52,802
+19,404
+11,340
+5,152
+4,733
+77,358
+60,944
+The "Other" item consists in particular of revenues generated from
+services.
+E.ON Annual Report 2021
+44,871
+€ in millions
+3,086
+4
+100.0
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE, Bardowick
+49.0
+Avon Energy Partners Holdings, GB, Coventry²
+100.0
+49.0
+AVU Aktiengesellschaft für Versorgungs-Unternehmen, DE, Gevelsberg4
+50.0
+4Motions GmbH, DE, Leipzig²
+A/V/E GmbH, DE, Halle (Saale)²
+Abwassergesellschaft Gehrden mbH, DE, Gehrden
+49.0
+AWOTEC Gebäude Servicegesellschaft mit beschränkter Haftung,
+DE, Saarbrücken6
+48.0
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg
+50.0
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck6
+49.0
+76.1
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg
+25.0
+100.0
+100.0
+49.0
+Avacon Natur 2. Beteiligungs-GmbH, DE, Sarstedt²
+100.0
+100 Kilowatt Naperőmű Gamma Korlátolt Felelősségű Társaság, HU,
+Budapest²
+100.0
+Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+49.0
+450connect GmbH, DE, Cologne
+Avacon Natur 3. Beteiligungs-GmbH, DE, Sarstedt²
+100 Kilowatt Naperőmű Kappa Korlátolt Felelősségű Társaság, HU,
+Budapest²
+100.0
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+25.0
+Avacon Natur GmbH, DE, Sarstedt¹
+100.0
+49.0
+Avacon Netz GmbH, DE, Helmstedt¹
+100.0
+Avacon Natur 1. Beteiligungs-GmbH, DE, Sarstedt²
+50.0
+49.0
+39.0
+AirSon Engineering AB, SE, Ängelholm²
+100.0
+33.3
+49.0
+Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, DE, Essen
+Alsdorf Netz GmbH, DE, Alsdorf6
+50.0
+Bayerische Elektrizitätswerke GmbH, DE, Augsburg²
+Bayerische Ray Energietechnik GmbH, DE, Garching6
+100.0
+100.0
+50.1
+49.0
+Alt Han Company Limited, GB, London
+21.0
+Bayerische-Schwäbische Wasserkraftwerke Beteiligungsgesellschaft
+mbH, DE, Gundremmingen¹
+62.2
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+49.0
+Bäderbetriebsgesellschaft St. Ingbert mbH, DE, St. Ingbert
+Bayerische Bergbahnen-Beteiligungs-Gesellschaft mbH, DE,
+Gundremmingen¹
+25.0
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+30.0
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide6
+49.0
+BAG Port 1 GmbH, DE, Regensburg²
+100.0
+Ackermann & Knorr Ingenieur GmbH, DE, Chemnitz²
+100.0
+100.0
+Balve Netz GmbH & Co. KG, DE, Balve
+Abfallwirtschaft Rendsburg-Eckernförde GmbH, DE, Borgstedt
+Abfallwirtschaft Schleswig - Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg6
+Abwasser und Service Mittelangeln GmbH, DE, Satrup6
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+49.0
+Airco-Klima Service GmbH, DE, Garbsen²
+80.0
+49.0
+49.0
+AIRCRAFT Klima-, Wärme- Kälte-, Rohrleitungsbau-Gesellschaft mit
+beschränkter Haftung, DE, Wolfenbüttel²
+Basking Automation GmbH, DE, Berlin
+25.1
+5
+49.0
+243
+As in 2020, there were no loans to members of the Supervisory
+Board in 2021.
+The Supervisory Board's compensation structure and the amounts
+for each member of the Supervisory Board are presented in the
+Compensation Report.
+Additional information about the members of the Supervisory
+Board is provided on pages 291 → and 292 →.
+Management Board
+Total compensation of the Management Board in 2021 amounted to
+€15.9 million (2020: €14.1 million). This consisted of base salary,
+bonuses, other compensation elements and share-based payments.
+In 2021, the members of the Management Board were granted
+fifth-tranche virtual shares under the E.ON Performance Plan
+(2020: fourth tranche of the E.ON Performance Plan) with a value
+of €4.6 million (2020: €5.2 million) and a total number of shares
+of 597,226 (2020: 661,911).
+Total payments to former members of the Management Board and
+their beneficiaries amounted to €10.1 million (2020: €12.8 million).
+Provisions of €190.8 million (2020: €166.8 million) have been
+established for the pension obligations to former members of the
+Management Board and their beneficiaries.
+As in 2020, there were no loans to members of the Management
+Board in 2021.
+The Management Board's compensation structure and the individual
+amounts for each member of the Management Board as well as
+additional disclosures on the amounts are presented in the Compen-
+sation Report.
+Total remuneration to members of the Supervisory Board in 2021
+amounted to €5.1 million (2020: €5.3 million).
+Additional information about the members of the Management
+Board is provided on page 293 →.
+E.ON issued two corporate bonds in mid-January 2022. One bond has
+a volume of €500 million due in January 2026 with a 0.125 percent
+coupon; the other bond has a volume of €800 million due in October
+2034 with a 0.875 percent coupon.
+Disposal of Universal Service Provider Business in
+Hungary
+On February 23, 2022, E.ON Hungária Zrt. signed an agreement
+with MVM Zrt. to sell 100 percent of its shares in E.ON Áramszol-
+gáltató Kft.
+Conflict in Ukraine
+On February 24, 2022, Russia launched a military attack on
+Ukraine. There is currently a high degree of uncertainty surrounding
+the conflict between Russia and Ukraine and what the economic
+repercussions will be. E.ON sees risks mainly for the commodity
+markets and related credit and liquidity risks, as well as measure-
+ment risks for financial assets, including the investment in Nord
+Stream AG held in the pension plan assets. In addition, political or
+regulatory measures may have a direct or indirect impact on busi-
+ness activities in individual countries. Overall, the impact of the
+conflict and any further escalation on business performance in 2022
+and on key performance indicators cannot currently be estimated
+with sufficient accuracy.
+E.ON Annual Report 2021
+Contents
+Search
+(37) Subsequent Events
+Corporate Bonds Issued
+↑
+Supervisory Board
+→ Notes
+71
+74
+45
+41
+908
+1,178
+4,083
+4,383
+(36) Compensation of Supervisory Board and
+Management Board
+E.ON's customer structure resulted in a focus on the Germany region.
+Aside from that, there was no major concentration in any given
+geographical region or business area. Due to the large number of
+customers the Company serves and the variety of its business
+activities, there are no individual customers whose business volume
+is material compared with the Company's total business volume.
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements 259
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+E.ON Annual Report 2021
+Abwasserentsorgung Marne-Land GmbH, DE, Diekhusen-Fahrstedt6
+Abwasserentsorgung Schladen GmbH, DE, Schladen
+Back
+→ Consolidated Balance Sheets
+Artelis S.A., LU, Luxembourg¹
+90.0
+49.0
+AV Packaging GmbH, DE, Munich 1, 12
+0.0
+49.0
+Avacon AG, DE, Helmstedt¹
+61.5
+27.0
+49.0
+100.0
+25.0
+Avacon Connect GmbH, DE, Laatzen¹
+100.0
+20.0
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+100.0
+100 Kilowatt Naperőmű Éta Korlátolt Felelősségű Társaság, HU,
+Budapest²
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+Consolidated Financial Statements 260
+100.0
+49.0
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+(38) List of Shareholdings Pursuant to Section 313 (2) HGB
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+ANCO Sp. z o.o., PL, Jarocin²
+Stake (%)
+100.0
+100 Kilowatt Naperőmű Béta Korlátolt Felelősségű Társaság, HU,
+Budapest²
+100.0
+100 Kilowatt Naperőmű Delta Korlátolt Felelősségű Társaság, HU,
+Budapest²
+100.0
+100 Kilowatt Naperőmű Epszilon Korlátolt Felelősségű Társaság, HU,
+Budapest²
+100.0
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide6
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede6
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog6
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln6
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+100 Kilowatt Naperőmű Alfa Korlátolt Felelősségű Társaság, HU,
+Budapest²
+External sales by product break down as follows:
+→ Notes
+Page 66 of the Combined Group Management Report provides a
+more detailed explanation of the reconciliation of adjusted EBIT to the
+net income/loss reported in the Consolidated Financial Statements.
+13,989
+3,115
+2,836
+10,555
+8,699
+3
+4
+973
+17,867
+123
+458
+14,661
+14,563
+962
+889
+2,650
+2,484
+28,475
+519
+22,550
+2020
+2020
+10,683
+10,310
+957
+884
+1,405
+1,230
+24,106
+3,978
+2021
+4,253
+5
+1,245
+1,254
+4,369
+2020
+20,964
+1,586
+2021
+2020
+2021
+5
+2021
+17,870
+4,088
+371
+672
+689
+525
+412
+121
+-129
+90
+337
+80
+115
+Equity-method earnings³
+277
+224
+151
+142
+4
+4
+190
+13,993
+2,182
+Adjusted EBIT
+2,959
+11,074
+9,157
+Depreciation and amortization²
+-1,497
+-1,446
+-170
+-158
+1,961
+-351
+-135
+-134
+-140
+-130
+-62
+-72
+-229
+-212
+-340
+7
+2020
+2020
+Liabilities of E.ON payable to related companies as of December 31,
+2021, include €62 million (2020: €49 million) in trade payables and
+shareholder loans to operators of jointly-owned nuclear power
+plants. These shareholder loans bear interest at 1.0 percent (2020:
+1.0 percent) and have no fixed maturity. E.ON continues to have in
+place with these power plants a cost-transfer agreement and a cost-
+plus-fee agreement for the procurement of electricity. The settlement
+of such liabilities occurs mainly through clearing accounts.
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory Board
+of E.ON SE) must be disclosed.
+The total expense for 2021 for members of the Management Board
+amounted to €11.3 million (2020: €8.8 million) in short-term
+benefits and €1.9 million (2020: €2.0 million) in post-employment
+benefits. The cost of post-employment benefits is equal to the
+service cost of the provisions for pensions.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+In 2021, E.ON generated income from transactions with related
+companies through the delivery of gas and electricity to distributors
+and municipal entities, especially municipal utilities. The relationships
+with these entities do not generally differ from those that exist with
+municipal entities in which E.ON does not have an interest. Expenses
+from transactions with related companies are generated mainly
+through electricity and gas deliveries as well as through management
+fees, IT services and third-party services.
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 254
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+The expense determined in accordance with IFRS 2 for existing
+commitments arising from share-based payment in 2021 was
+€9.2 million (2020: €5.1 million).
+Provisions for these commitments amounted to €15.6 million as of
+December 31, 2021 (2020: €13.4 million).
+The members of the Supervisory Board received a total of €5.1 million
+for their activity in 2021 (2020: €5.3 million). Employee represen-
+tatives on the Supervisory Board were paid compensation under the
+existing employment contracts with subsidiaries totaling €0.8 million
+(2020: €0.8 million).
+Detailed, individualized information on compensation can be found
+in the Compensation Report.
+(35) Segment Reporting
+Segment Information
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Led by its Corporate Headquarters in Essen, Germany, the E.ON
+Group comprises the seven reporting segments described below,
+and the Non-Core Business and Corporate Functions/Other, all
+of which are reported here in accordance with IFRS 8. The com-
+bined segments, which are not separately reportable, in the Energy
+Networks East-Central Europe/Turkey unit and the Customer Solu-
+tions Other unit are of subordinate importance and have similar
+economic characteristics with respect to customer structure, prod-
+ucts and distribution channels.
+2
+3
+Additional Entity-Level Disclosures
+1,790
+Associated companies
+1,066
+660
+Joint ventures
+445
+104
+Other related parties
+Other related parties
+1,026
+Provisions
+22
+27
+Associated companies
+19
+25
+Joint ventures
+587
+2021
+Energy Networks
+Germany
+Sweden
+Consolidated Financial Statements 255
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Germany
+Sweden
+Energy Networks
+ECE/Turkey
+Customer Solutions
+Germany
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+United Kingdom
+Other
+€ in millions
+External sales
+Intersegment sales
+Sales
+2021
+2020
+2021
+Netherlands/Belgium
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+→ Consolidated Balance Sheets
+↑
+This segment comprises the electricity networks businesses in
+Sweden.
+East-Central Europe/Turkey
+This segment combines the distribution network activities in the
+Czech Republic, Hungary, Romania, Poland, Croatia, Slovakia and
+Turkey.
+Customer Solutions
+Germany
+This segment consists of activities that supply our customers in
+Germany with electricity and gas and the distribution of specific
+products and services in areas for improving energy efficiency and
+energy independence. This item also includes the heating business
+in Germany.
+United Kingdom
+The segment comprises sales activities and customer solutions in
+the UK.
+Netherlands/Belgium
+Back
+The segment comprises sales activities and Customer Solutions in
+the Netherlands and Belgium.
+This segment combines sales activities and the corresponding
+Customer Solutions in Sweden, Italy, the Czech Republic, Hungary,
+Croatia, Romania, Poland, Slovakia and the innovative solutions
+business (such as E.ON Business Solutions).
+Non-Core Business
+Non-Core Business comprises the non-strategic activities of the
+E.ON Group. This includes the operation and retirement of the German
+nuclear power plants, which are managed by the PreussenElektra
+operating unit, and the electricity generation business in Turkey.
+Corporate Functions/Other
+Corporate Functions/Other contains E.ON SE itself and the interests
+held directly by E.ON SE. The main task of Corporate Functions is
+to manage the E.ON Group. This includes the strategic development
+of the Group and the management and financing of the existing
+business portfolio. The E.ON Group's internal service providers are
+also reported here. This includes E.ON Energy Markets, which began
+operations in October 2020 as the Group's new central commodity
+procurement unit.
+E.ON Annual Report 2021
+Contents
+Search
+Other
+5
+Financial Information by Business Segment¹
+7
+5,639
+5,948
+275
+238
+-273
+-4
+-3
+4,762
+1
+4,171
+3Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in income/loss from companies accounted for using the equity method and financial results, respectively. These income effects are
+not part of adjusted EBIT.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+¹Because of changes in segment reporting, the prior-year figure was adjusted accordingly.
+²Adjusted for non-operating effects.
+Consolidated Financial Statements 256
+-4
+-605
+-363
+4
+6
+4,723
+3,776
+51
+75
+54
+-511
+30
+-1
+551
+509
+Operating cash flow before interest and taxes
+Investments
+1,010
+298
+489
+32
+23
+-321
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+Reconciliation of Operating Cash Flow¹
+In 2021, impairment losses were recognized in particular in the areas
+of energy networks in Slovakia (mainly on goodwill in connection
+with the reporting as a disposal group) and on intangible assets in
+the area of energy networks Romania. In the prior year, impairment
+losses were recognized in particular in the areas of energy networks
+in Hungary (mainly due to the current restructuring of the business),
+Customer Solutions in the United Kingdom (primarily for software
+in connection with the ongoing restructuring measures) and the
+Netherlands/Belgium (in particular as part of the planned disposal
+of the Belgian distribution business).
+Effects that are to be initially recognized from the subsequent
+measurement of hidden reserves and charges in connection with
+the innogy purchase price allocation are presented separately.
+The increase in other non-operating earnings is mainly attributable
+to measurement effects for non-current provisions, which were
+partly offset by negative valuation effects from foreign currency
+bonds.
+The previous year was negatively impacted by measurement effects
+for repurchase obligations under IAS 32 and non-current provisions,
+as well as realized effects from hedging transactions for certain
+currency risks.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Effects in connection with derivative financial instruments increased
+by €2,122 million to €3,250 million. The sharp rise in commodity
+prices resulted in significant increases in the fair value of unrealized
+sales and procurement transactions.
+Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+The following table shows the reconciliation of earnings before interest and taxes to adjusted EBIT or adjusted EBITDA:
+Reconciliation of Income before Financial Results and Income Taxes
+Consolidated Financial Statements 257
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+7
+→ Notes
+→ Consolidated Statement of Income
+The following table shows the reconciliation of operating cash flow
+before interest and taxes to operating cash flow from continuing
+operations:
+Restructuring expenses were lower than in the 2020 reporting
+period and, as in the previous year, mainly included expenses in
+connection with the integration of innogy and the restructuring of
+the UK distribution business.
+The non-operating earnings effects for which EBIT is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market of derivative
+financial instruments used for hedging and, where material, book
+gains/losses, certain restructuring expenses, impairment charges
+and reversals recognized in the context of impairment tests on non-
+current assets, on equity investments in affiliated or associated com-
+panies and on goodwill, and other contributions to non-operating
+earnings. In addition, effects from the valuation of certain provisions
+on the balance sheet date are disclosed in non-operating earnings.
+€ in millions
+2021
+Operating cash flow before interest and taxes
+5,639
+2020
+5,948
+Interest payments
+-714
+Tax payments
+Net book gains declined year-on-year. One material event in 2021
+was the transfer of the remaining shares in Windpark Rampion to
+RWE.
+-652
+4,069
+5,287
+¹Operating cash flow from continuing operations.
+Adjusted EBIT
+53
+In 2021, adjusted EBIT, a measure of earnings before interest and
+taxes ("EBIT") adjusted to exclude non-operating effects, was used
+at E.ON for purposes of internal management control and as the
+most important indicator of a business's sustainable earnings power.
+This key figure for assessing operating performance presents a
+business's operating earnings independently of non-operating factors,
+interest, and taxes.
+Unadjusted EBIT represents the Group's income/loss reported
+in accordance with IFRS before financial results and income taxes,
+taking into account the interest income/expense. To improve its
+meaningfulness as an indicator of the sustainable earnings power
+of the E.ON Group's business, unadjusted EBIT is adjusted for certain
+non-operating effects.
+Operating earnings also include income from investment subsidies
+for which liabilities are recognized.
+Operating cash flow
+30
+-918
+383
+238
+103
+117
+47
+40
+324
+408
+Non-Core Business
+236
+PreussenElektra
+Corporate Functions/Others
+Consolidation
+E.ON Group
+€ in millions
+External sales
+Intersegment sales
+Sales
+Depreciation and amortization²
+Generation Turkey
+651
+717
+353
+Operating cash flow before interest and taxes
+3,020
+54
+3,614
+602
+612
+1,067
+995
+551
+581
+-274
+-256
+125
+115
+115
+308
+Investments
+2,396
+2,365
+Adjusted EBIT
+Equity-method earnings³
+407
+2020
+-9,795
+0
+0
+1,632
+1,388
+17,265
+2,755
+-21,319
+-21,318
+77,358
+-473
+-512
+-108
+-128
+-1
+3
+2021
+-3,166
+60,944
+1,090
+-9,794
+8,901
+2021
+2,112
+2020
+2021
+2020
+2021
+2020
+307
+1,388
+-3,129
+8,364
+60,944
+2020
+2021
+77,358
+1,325
+-1
+643
+1
+E.ON Accounting Solutions GmbH (formerly E.ON Business Services
+Regensburg GmbH), DE, Regensburg 1,8
+100.0
+E.ON Drive Infrastructure Italy S.r.l., IT, Milan²
+100.0
+DZT Service & Heat Sp. z o.o., PL, Świebodzice²
+100.0
+E.ON 54. Verwaltungs GmbH, DE, Essen²
+100.0
+DZT Ciepło Sp. z o.o., PL, Świebodzice²
+100.0
+DZT Service Sp. z o.o., PL, Świebodzice²
+100.0
+100.0
+100.0
+E.ON Drive Infrastructure France SAS, FR, Levallois-Perret²
+E.ON Drive Infrastructure GmbH, DE, Essen¹
+E.ON 49. Verwaltungs GmbH, DE, Essen²
+E.ON 50. Verwaltungs GmbH, DE, Essen²
+E.ON 51. Verwaltungs GmbH, DE, Essen²
+E.ON 52. Verwaltungs GmbH, DE, Essen²
+E.ON 53. Verwaltungs GmbH, DE, Essen²
+100.0
+100.0
+100.0
+E.ON Digital Technology GmbH, DE, Hanover¹
+100.0
+100.0
+100.0
+100.0
+E.ON Digital Technology Hungary Kft., HU, Budapest²
+Consolidated Financial Statements 263
+100.0
+Stake (%)
+E.ON Energiamegoldások Kft., HU, Budapest¹
+Name, location
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract.. 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+100.0
+100.0
+100.0
+E.ON Drive Infrastructure UK Limited, GB, Coventry²
+E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree²
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+97.9
+E.ON Áramszolgáltató Korlátolt Felelősségű Társaság, HU, Budapest¹
+E.ON Asist Complet S.A., RO, Târgu Mureş²
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+E WIE EINFACH GmbH, DE, Cologne¹
+Dutchdelta Finance S.à r.l., LU, Luxembourg¹
+E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+DUKO Hlinsko, s.r.o., CZ, Hlinsko6
+100.0
+E.ON Country Hub Germany GmbH, DE, Berlin 1,8
+100.0
+100.0
+E.ON Control Solutions Limited, GB, Coventry¹
+100.0
+100.0
+E.ON Connecting Energies Limited, GB, Coventry¹
+100.0
+100.0
+100.0
+DON-Stromnetz GmbH & Co. KG, DE, Donauwörth
+100.0
+100.0
+100.0
+E.ON Business Solutions SAS, FR, Levallois-Perret²
+100.0
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+E.ON 9. Verwaltungs GmbH, DE, Essen²
+E.ON 11. Verwaltungs GmbH, DE, Essen²
+E.ON 39. Verwaltungs GmbH, DE, Essen²
+E.ON 40. Verwaltungs GmbH, DE, Essen²
+E.ON 42. Verwaltungs GmbH, DE, Essen²
+100.0
+DigiKoo GmbH, DE, Essen²
+42.5
+Stake (%)
+Deutsche Gesellschaft für Wiederaufarbeitung von
+Kernbrennstoffen AG & Co. oHG, DE, Gorleben
+E.ON CDNE. S.p.A., IT, Milan²
+49.0
+49.0
+100.0
+100.0
+Drivango GmbH i. L., DE, Düsseldorf²
+100.0
+Drava CHP Plant d.o.o., HR, Zagreb²
+39.9
+beschränkter Haftung, DE, Dortmund
+100.0
+100.0
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+E.ON Dialog S.R.L., RO, Şelimbăr²
+100.0
+E.ON 48. Verwaltungs GmbH, DE, Essen²
+E.ON 45. Verwaltungs GmbH, DE, Essen²
+Dortmunder Energie- und Wasserversorgung Gesellschaft mit
+E.ON 47. Verwaltungs GmbH, DE, Essen²
+49.0
+Dorsten Netz GmbH & Co. KG, DE, Dorsten
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+100.0
+E.ON 46. Verwaltungs GmbH, DE, Essen²
+49.0
+DON-Stromnetz Verwaltungs GmbH, DE, Donauwörth
+100.0
+E.ON Danmark A/S, DK, Frederiksberg¹
+100.0
+Name, location
+E.ON Grund&Boden GmbH & Co. KG, DE, Essen¹
+100.0
+100.0
+E.ON Norge AS, NO, Stavanger²
+100.0
+E.ON Grund&Boden Beteiligungs GmbH, DE, Essen¹
+100.0
+E.ON Energilösningar AB, SE, Malmö¹
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen¹, 8
+100.0
+E.ON Energy ECO Installations Limited, GB, Coventry¹
+E.ON Energija d.o.o., HR, Zagreb¹
+E.ON Nord Sverige AB, SE, Malmö²
+100.0
+E.ON Gruga Geschäftsführungsgesellschaft mbH, DE, Düsseldorf¹, 8
+100.0
+100.0
+E.ON Next Limited, GB, Coventry²
+100.0
+E.ON Group Innovation GmbH, DE, Essen²
+100.0
+E.ON Energiinfrastruktur AB, SE, Malmö¹
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+100.0
+100.0
+E.ON Nutzenergie GmbH, DE, Essen²
+100.0
+49.9
+E.ON Plin d.o.o., HR, Zagreb¹
+100.0
+E.ON Energy Markets GmbH, DE, Essen¹
+100.0
+E.ON Hydrogen GmbH, DE, Munich²
+70.0
+E.ON Perspekt GmbH, DE, Düsseldorf2
+75.0
+100.0
+100.0
+E.ON Pensionsfonds Holding GmbH, DE, Essen²
+100.0
+E.ON Energy Installation Services Limited, GB, Coventry¹
+100.0
+E.ON Energy Gas (Northwest) Limited, GB, Coventry2
+100.0
+E.ON Pensionsfonds AG, DE, Essen²
+100.0
+E.ON Hrvatska d.o.o., HR, Zagreb¹
+100.0
+E.ON Energy Gas (Eastern) Limited, GB, Coventry²
+100.0
+E.ON Hungária Energetikai Zártkörűen Működő Részvénytársaság,
+HU, Budapest¹
+E.ON Next Energy Limited, GB, Coventry¹
+100.0
+E.ON Grid d.o.o. za upravljanje i ulaganje, HR, Koprivnica¹
+E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf1,8
+100.0
+E.ON Energie AG, DE, Düsseldorf 1,8
+99.9
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+E.ON Foton Sp. z o.o., PL, Warsaw¹
+100.0
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich 1,8
+100.0
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+100.0
+E.ON IT UK Limited, GB, Coventry²
+100.0
+E.ON First Future Energy Holding B.V., NL, 's-Hertogenbosch¹
+E.ON Flash S.R.L., RO, Târgu Mureş²
+100.0
+E.ON Energidistribution AB, SE, Malmö¹
+100.0
+E.ON Energiatermelő Kft., HU, Budapest¹
+100.0
+E.ON Israel Ltd., IL, Tel Aviv²
+100.0
+E.ON Finanzholding SE & Co. KG, DE, Essen 1,8
+100.0
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+68.2
+E.ON Energie România S.A., RO, Târgu Mureş¹
+100.0
+E.ON NA Capital Inc., US, Wilmington¹
+100.0
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Energie Österreich GmbH, AT, Vienna¹
+100.0
+E.ON Metering GmbH, DE, Munich²
+100.0
+E.ON Gastronomie GmbH, DE, Essen 1,8
+100.0
+E.ON Energie Dialog GmbH, DE, Potsdam²
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö²
+99.9
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+100.0
+E.ON Ljubljana d.o.o., SI, Ljubljana²
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+100.0
+Stake (%)
+DES Dezentrale Energien Schmalkalden GmbH, DE, Schmalkalden6
+Bayernwerk Gashochdrucknetz Verwaltungs GmbH, DE, Regensburg²
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+Der Solarbauer Borowski GmbH, DE, Essen²
+100.0
+100.0
+Certified B.V., NL, Utrecht¹
+65.5
+Biogas Schwalmtal GmbH & Co. KG, DE, Schwalmtal²
+Biogas Steyerberg GmbH, DE, Steyerberg²
+100.0
+Bayernwerk Regio Energie GmbH, DE, Regensburg²
+100.0
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+87.8
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+Charge-ON GmbH, DE, Essen¹
+100.0
+80.0
+Biogas Ducherow GmbH, DE, Ducherow²
+100.0
+Bayernwerk Netz GmbH, DE, Regensburg¹
+100.0
+100.0
+Celsium DOM Sp. z o.o., PL, Skarżysko-Kamienna²
+Bioerdgas Schwandorf GmbH, DE, Schwandorf2
+100.0
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+90.0
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+100.0
+50.0
+Citigen (London) Limited, GB, Coventry¹
+100.0
+Beteiligung H2 GmbH, DE, Helmstedt²
+34.0
+100.0
+CHN Special Projects Limited, GB, Coventry²
+90.0
+100.0
+CHN Group Ltd, GB, Coventry²
+99.2
+100.0
+Bayernwerk Sonnenenergie GmbH, DE, Bayreuth6
+CHN Electrical Services Limited, GB, Coventry2
+100.0
+CHN Contractors Limited, GB, Coventry²
+32.4
+Biogas Wassenberg GmbH & Co. KG, DE, Wassenberg6
+Biogas Wassenberg Verwaltungs GmbH, DE, Wassenberg6
+Biogasanlage Schwalmtal GmbH, DE, Schwalmtal²
+Biomasseverwertung Straubing GmbH, DE, Straubing6
+Bioplyn Rozhanovce, s.r.o., SK, Košice6
+100.0
+Beteiligung H1 GmbH, DE, Helmstedt²
+100.0
+BETA GmbH, DE, Illingen²
+50.0
+HU, Budapest4
+BDK Budapesti Dísz- és Közvilágítási Korlátolt Felelősségű Társaság,
+32.4
+100.0
+100.0
+Celsium A Sp. z o.o., PL, Skarżysko-Kamienna²
+Bayernwerk Energiedienstleistungen Licht GmbH, DE, Regensburg²
+Bayernwerk Energieservice GmbH & Co. KG, DE, Regensburg¹
+Bayernwerk Energieservice Verwaltungs GmbH, DE, Regensburg²
+Bayernwerk Energietechnik GmbH, DE, Regensburg²
+25.1
+Brüggen.E-Netz Verwaltungs-GmbH, DE, Brüggen
+46.5
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz6
+Bikesquare Srls, IT, Cuneo6
+100.0
+60.0
+Bayernwerk Energiebringer GmbH, DE, Regensburg²
+Bayernwerk AG, DE, Regensburg¹
+Stake (%)
+Name, location
+Stake (%)
+100.0
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 261
+Back
+↑
+Search
+Contents
+E.ON Energy Projects GmbH, DE, Munich¹
+Stake (%)
+100.0
+100.0
+100.0
+51.0
+Bioenergie Merzig GmbH, DE, Merzig²
+100.0
+97.5
+Celle-Uelzen Netz GmbH, DE, Celle¹
+100.0
+Bioenergie Kirchspiel Anhausen Verwaltungs-GmbH, DE, Anhausen²
+100.0
+Bayernwerk Gashochdrucknetz GmbH & Co. KG, DE, Regensburg¹
+100.0
+Cegecom S.A., LU, Luxembourg¹
+51.0
+20.0
+Bützower Wärme GmbH, DE, Bützow
+100.0
+100.0
+BTC Power Cebu Inc., PH, Lapu-Lapu City2
+51.0
+100.0
+Berlin, DE, Berlin¹
+Gemeinschaftskernkraftwerk Grohnde Management GmbH, DE,
+33.3
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth
+30.0
+100.0
+bildungszentrum energie GmbH, DE, Halle (Saale)²
+Bioenergie Bad Wimpfen GmbH & Co. KG, DE, Bad Wimpfen²
+Bioenergie Bad Wimpfen Verwaltungs-GmbH, DE, Bad Wimpfen²
+Bioenergie Kirchspiel Anhausen GmbH & Co.KG, DE, Anhausen²
+100.0
+100.0
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+Beteiligung N1 GmbH, DE, Helmstedt²
+e.discom Telekommunikation GmbH, DE, Rostock¹
+23.2
+100.0
+E.ON Beteiligungsholding GmbH, DE, Essen 1,8
+100.0
+100.0
+E.ON Beteiligungen GmbH, DE, Essen 1,8
+100.0
+E.DIS Bau- und Energieservice GmbH, DE, Fürstenwalde/Spree²
+E.DIS Netz GmbH, DE, Fürstenwalde/Spree¹
+100.0
+81.0
+100.0
+Crimmitschau-Lichtenstein Netz GmbH & Co. KG, DE, Crimmitschau²
+Crimmitschau-Lichtenstein Netz Verwaltungs GmbH, DE, Crimmitschau²
+Cuculus GmbH, DE, Ilmenau6
+E.ON Bayern Verwaltungs AG, DE, Essen²
+67.0
+E.DIS AG, DE, Fürstenwalde/Spree¹
+49.0
+Cremlinger Energie GmbH, DE, Cremlingen
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+100.0
+→ Consolidated Statement of Changes in Equity → Notes
+E.ON Bioerdgas GmbH, DE, Essen¹
+DEM GmbH, DE, Elsdorf²
+56.1
+Delgaz Grid S.A., RO, Târgu Mureş¹
+100.0
+E.ON Business Solutions S.r.l., IT, Milan¹
+100.0
+100.0
+E.ON Business Solutions GmbH, DE, Essen¹
+100.0
+e.distherm Wärmedienstleistungen GmbH, DE, Potsdam¹
+e.kundenservice Netz GmbH, DE, Hamburg¹
+100.0
+Deine Wärmeenergie GmbH & Co.KG, DE, Essen¹
+100.0
+100.0
+100.0
+E.ON Business Services lași S.A., RO, Bucharest²
+100.0
+e.disnatur21 Windpark GmbH & Co. KG, DE, Potsdam²
+100.0
+DANEB Datennetze Berlin GmbH, DE, Berlin²
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca¹
+100.0
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+99.9
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+48.0
+100.0
+Coromatic AS, NO, Kjeller¹
+20.7
+100.0
+Coromatic AB, SE, Bromma¹
+33.3
+100.0
+Coromatic A/S, DK, Roskilde¹
+25.6
+100.0
+Beteiligungsgesellschaft Werl mbH, DE, Essen²
+COMCO MCS S.A., LU, Luxembourg²
+33.3
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree6
+Bootstraplabs VC Follow-On Fund 2016, US, San Francisco
+Breitband-Infrastrukturgesellschaft Cochem-Zell mbH, DE, Cochem
+bremacon GmbH, DE, Bremen6
+100.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+43.0
+Kerntechnische Hilfsdienst GmbH GbR, DE, Eggenstein-Leopoldshofen
+Beteiligungsgesellschaft der Energieversorgungsunternehmen an der
+100.0
+Beteiligung N2 GmbH, DE, Helmstedt²
+100.0
+100.0
+51.0
+Coromatic As a Service AB, SE, Bromma²
+100.0
+→ Consolidated Statement of Income
+Consolidated Financial Statements 262
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+100.0
+Coromatic International AB, SE, Bromma²
+Coromatic Tullinge AB, SE, Bromma²
+40.7
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+25.1
+Brüggen.E-Netz GmbH & Co. KG, DE, Brüggen
+25.1
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels
+100.0
+Broadband TelCom Power, Inc., US, Santa Ana¹
+100.0
+Coromatic Holding AB, SE, Bromma¹
+61.0
+BEW Netze GmbH, DE, Wipperfürth
+100.0
+Broadband TelCom Power Europe GmbH, DE, Essen²
+40.0
+E.ON Iberia Holding GmbH, DE, Düsseldorf1,8
+Emmerthal²
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+MZEC - OPAŁ Sp. z o.o., PL, Chojnice²
+100.0
+→ Notes
+MZEC SP. z o.o., PL, Szczecin²
+Netzgesellschaft Hüllhorst GmbH & Co. KG, DE, Hüllhorst6
+Netzgesellschaft Kelkheim GmbH & Co. KG, DE, Kelkheim
+49.0
+Netzgesellschaft Syke GmbH, DE, Syke6
+49.0
+49.0
+Netzgesellschaft W-1 GmbH, DE, Helmstedt²
+100.0
+Nadácia VSE, SK, Košice²
+100.0
+100.0
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg6
+LSW Holding GmbH & Co. KG, DE, Wolfsburg 5, 10
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg6
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+57.0
+Mosoni-Duna Menti Szélerőmű Kft., HU, Budapest²
+100.0
+57.0
+Murrhardt Netz AG & Co. KG, DE, Murrhardt
+49.0
+57.0
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+57.0
+50.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 270
+MWE Mecklenburgische Wärme- und Energiedienstleistungen GmbH,
+DE, Wismar6
+100.0
+100.0
+Netzgesellschaft Korb GmbH & Co. KG, DE, Korb6
+Neumünster Netz Beteiligungs-GmbH, DE, Neumünster¹
+100.0
+Netzgesellschaft Lennestadt GmbH & Co. KG, DE, Lennestadt
+25.1
+Nederland Verkoopt B.V., NL, Amersfoort¹
+100.0
+Netzgesellschaft Leutenbach GmbH & Co. KG, DE, Leutenbach6
+49.9
+Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin²
+NEW Netz GmbH, DE, Geilenkirchen¹
+100.0
+100.0
+100.0
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven6
+34.8
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad Münder6
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE, Barsinghausen
+49.0
+Netzgesellschaft Leutenbach Verwaltungs-GmbH, DE, Leutenbach6
+Netzgesellschaft Maifeld GmbH & Co. KG, DE, Polch
+49.9
+NEW Niederrhein Energie und Wasser GmbH, DE, Mönchengladbach¹
+NEW Niederrhein Wasser GmbH, DE, Viersen¹
+49.9
+100.0
+49.9
+50.1
+Nahwärme Ascha GmbH, DE, Ascha²
+90.0
+Netzgesellschaft Korb Verwaltungs-GmbH, DE, Korb6
+49.9
+NEW AG, DE, Mönchengladbach 1,9
+38.4
+Naturstrom Betriebsgesellschaft Oberhonnefeld mbH, DE, Koblenz
+Nederland Isoleert B.V., NL, Amersfoort¹
+25.0
+NEW b_gas Eicken GmbH, DE, Schwalmtal²
+100.0
+49.0
+Nebelhornbahn-Aktiengesellschaft, DE, Oberstdorf6
+20.1
+New Cogen Sp. z o.o., PL, Warsaw²
+100.0
+Netzgesellschaft Lauf GmbH & Co. KG, DE, Lauf6
+Netzgesellschaft Kreisstadt Bergheim Verwaltungs-GmbH, DE, Ber-
+gheim6
+Lech Energie Gersthofen GmbH & Co. KG, DE, Gersthofen²
+100.0
+LANDWEHR Wassertechnik GmbH, DE, Schöppenstedt²
+Latorca Sport Kft., HU, Budapest²
+LEW TelNet GmbH, DE, Neusäß¹
+100.0
+Kraftwerk Neuss GmbH, DE, Munich²
+100.0
+MINUS 181 GmbH i. L., DE, Parchim6
+25.1
+LEW Verteilnetz GmbH, DE, Augsburg¹
+100.0
+100.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+MITGAS Mitteldeutsche Gasversorgung GmbH, DE, Halle (Saale)¹
+75.4
+LEW Wasserkraft GmbH, DE, Augsburg¹
+100.0
+Kraftwerk Wehrden Gesellschaft mit beschränkter Haftung, DE,
+Völklingen6
+Licht Groen B.V., NL, Amsterdam¹
+100.0
+33.3
+100.0
+Lichtverbund Straßenbeleuchtung GmbH, DE, Helmstedt²
+Midlands Electricity Limited, GB, Coventry²
+Kraftwerk Marl GmbH, DE, Munich¹
+Koprivnica Plin d.o.o., HR, Koprivnica¹
+100.0
+MEON Pensions GmbH & Co. KG, DE, Essen 1,8
+100.0
+LEW Beteiligungsgesellschaft mbH, DE, Gundremmingen¹
+100.0
+Kraftwerk Burghausen GmbH, DE, Munich²
+100.0
+100.0
+MEON Verwaltungs GmbH, DE, Essen²
+LEW Netzservice GmbH, DE, Augsburg¹
+100.0
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+MeteringSüd GmbH & Co. KG, DE, Augsburg6
+34.0
+LEW Service & Consulting GmbH, DE, Augsburg¹
+100.0
+100.0
+89.8
+KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen
+41.7
+25.1
+KVK Kompetenzzentrum Verteilnetze und Konzessionen GmbH, DE,
+Cologne
+Limfjordens Bioenergi ApS, DK, Frederiksberg6
+50.0
+74.9
+Montcogim - Plinara d.o.o., HR, Sveta Nedelja¹
+100.0
+Local Energies, a.s., CZ, Zlín - Malenovice²
+MNG Stromnetze Verwaltungs GmbH, DE, Lüdinghausen
+100.0
+100.0
+MONTCOGIM-SISAK d.o.o., HR, Sisak²
+100.0
+Lößnitz Netz GmbH & Co. KG, DE, Lößnitz
+74.9
+69.6
+Moslavina Plin d.o.o., HR, Kutina²
+100.0
+KWS Kommunal-Wasserversorgung Saar GmbH, DE, Saarbrücken²
+LandE GmbH, DE, Wolfsburg¹
+50.0
+Lillo Energy NV, BE, Brussels
+90.0
+Mitteldeutsche Netzgesellschaft Gas HD mbH, DE, Halle (Saale)²
+Mitteldeutsche Netzgesellschaft Gas mbH, DE, Halle (Saale)¹
+Mitteldeutsche Netzgesellschaft mbH, DE, Chemnitz²
+100.0
+100.0
+100.0
+KSP Kommunaler Service Püttlingen GmbH, DE, Püttlingen
+KTA Kältetechnischer Anlagenbau GmbH, DE, Garbsen²
+40.0
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+Lighting for Staffordshire Limited, GB, Coventry¹
+60.0
+Mitteldeutsche Netzgesellschaft Strom mbH, DE, Halle (Saale)¹
+100.0
+100.0
+100.0
+Mittlere Donau Kraftwerke AG, DE, Landshut
+40.0
+Liikennevirta Oy, FI, Helsinki
+25.0
+KURGAN Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG i.L.,
+DE, Grünwald²
+MNG Stromnetze GmbH & Co. KG, DE, Lüdinghausen6
+25.1
+NEW Re GmbH, DE, Mönchengladbach²
+95.5
+49.0
+NEW Smart City GmbH, DE, Mönchengladbach²
+90.0
+49.0
+25.1
+Gasnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann6
+Gas-Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE,
+Rheda-Wiedenbrück
+FITAS Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
+Pullach im Isartal²
+100.0
+EV Infra Denmark ApS, DK, Frederiksberg²
+49.0
+Ev Infra Norway AS, NO, Oslo²
+FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg6
+EV Infra Czech Republic, s.r.o., CZ, České Budějovice²
+100.0
+FEV US LLC, US, Palo Alto¹
+51.0
+EuroSkyPark GmbH, DE, Saarbrücken¹
+49.0
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen6
+100.0
+100.0
+FEV Future Energy Ventures Israel Ltd, IL, Tel Aviv²
+100.0
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 267
+Back
+↑
+EV Infra Sweden AB, SE, Malmö²
+Search
+E.ON Annual Report 2021
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+Gasnetzgesellschaft Warburg GmbH & Co. KG, DE, Warburg6
+90.0
+49.0
+Gas-Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
+Rheda-Wiedenbrück
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
+Pullach im Isartal²
+Contents
+100.0
+Essent Sales Portfolio Management B.V., NL, 's-Hertogenbosch¹
+25.1
+50.0
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+Haftung (FFG), DE, Freising6
+100.0
+Essent IT B.V., NL, 's-Hertogenbosch¹
+100.0
+Essent Energy Infrastructure Solutions B.V., NL, 's-Hertogenbosch¹
+100.0
+FAMIS GmbH, DE, Saarbrücken¹
+Essent N.V., NL, 's-Hertogenbosch¹
+100.0
+28.8
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
+Wörth am Main6
+100.0
+Essent EnergieBewust Holding B.V., NL, 's-Hertogenbosch¹
+49.0
+Gasgesellschaft Kerken Wachtendonk mbH, DE, Kerken6
+100.0
+ESN Sicherheit und Zertifizierung GmbH, DE, Schwentinental²
+Essent Energy Group B.V., NL, 's-Hertogenbosch¹
+100.0
+Fernwärmeversorgung Saarlouis- Steinrausch
+GasLINE Telekommunikationsnetz-Geschäftsführungsgesellschaft
+deutscher Gasversorgungsunternehmen mbH, DE, Straelen
+GasLINE Telekommunikationsnetzgesellschaft deutscher
+Gasversorgungsunternehmen mbH & Co. KG, DE, Straelen5
+Gas-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg6
+Gas-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+gheim6
+100.0
+FEV Europe GmbH, DE, Essen¹,8
+100.0
+Essent Rights B.V., NL, 's-Hertogenbosch¹
+25.1
+Gas-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE, Kerpen
+Gas-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE, Ber-
+50.0
+Fernwärmeversorgung Zwönitz GmbH (FVZ), DE, Zwönitz6
+100.0
+Essent Retail Energie B.V., NL, 's-Hertogenbosch¹
+100.0
+Investitionsgesellschaft mbH, DE, Saarlouis²
+100.0
+Essent Nederland B.V., NL, 's-Hertogenbosch¹
+25.1
+25.1
+20.0
+20.0
+Gasnetzgesellschaft Windeck mbH & Co. KG, DE, Windeck6
+100.0
+Stake (%)
+Stake (%)
+Netzgesellschaft Elsdorf Verwaltungs-GmbH, DE, Elsdorf6
+49.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden
+49.0
+Netzgesellschaft GmbH & Co. KG Bad Homburg v. d. Höhe, DE,
+Bad Homburg v. d. Höhe6
+Netzgesellschaft Ottersweier GmbH & Co. KG, DE, Ottersweier
+Netzgesellschaft Panketal GmbH, DE, Panketal²
+49.9
+NEW Windpark Linnich GmbH & Co. KG, DE, Mönchengladbach²
+NEW Windpark Viersen GmbH & Co. KG, DE, Mönchengladbach²
+NiersEnergieNetze GmbH & Co. KG, DE, Kevelaer
+50.0
+100.0
+51.0
+100.0
+NiersEnergieNetze Verwaltungs-GmbH, DE, Kevelaer6
+51.0
+45.7
+Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE,
+Rheda-Wiedenbrück
+49.0
+Netzgesellschaft Grimma GmbH & Co. KG, DE, Grimma
+100.0
+49.0
+100.0
+49.9
+100.0
+Netzgesellschaft Maifeld Verwaltungs GmbH, DE, Polch
+49.0
+49.0
+NEW Tönisvorst GmbH, DE, Tönisvorst¹
+98.7
+Netzgesellschaft Marl mbH & Co. KG, DE, Marl6
+25.1
+Netzgesellschaft Neuenkirchen mbH & Co. KG, DE, Neuenkirchen²
+Netzgesellschaft Osnabrücker Land GmbH & Co. KG, DE, Bohmte4
+Netzgesellschaft Bedburg Verwaltungs-GmbH, DE, Bedburg6
+Netzgesellschaft Betzdorf GmbH & Co. KG, DE, Betzdorf6
+NEW Viersen GmbH, DE, Viersen¹
+100.0
+49.0
+Netzgesellschaft Neuenkirchen Beteiligung mbH, DE, Neuenkirchen6
+49.0
+NEW Windenergie Verwaltung GmbH, DE, Mönchengladbach²
+100.0
+Netzgesellschaft Bühlertal GmbH & Co. KG, DE, Bühlertal6
+49.0
+NIS Norddeutsche Informations-Systeme Gesellschaft mbH, DE,
+Schwentinental²
+100.0
+Netzgesellschaft Hemmingen mbH, DE, Hemmingen6
+100.0
+49.0
+Netzgesellschaft Horn-Bad Meinberg GmbH & Co. KG, DE,
+Horn-Bad Meinberg6
+49.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin
+Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Helmstedt²
+Netzgesellschaft Südwestfalen mbH & Co. KG, DE, Netphen6
+40.0
+100.0
+Npower Financial Services Limited, GB, Swindon¹
+Npower Gas Limited, GB, Swindon¹
+Npower Commercial Gas Limited, GB, Swindon¹
+100.0
+49.0
+Npower Group Business Services Limited, GB, Swindon¹
+100.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+49.9
+Stake (%)
+Name, location
+100.0
+100.0
+Netzgesellschaft S-1 GmbH, DE, Helmstedt²
+100.0
+49.0
+Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
+Rheda-Wiedenbrück6
+NORD-direkt GmbH, DE, Neumünster²
+100.0
+49.0
+Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf
+50.0
+NordNetz GmbH, DE, Quickborn²
+100.0
+Netzgesellschaft Rietberg-Langenberg GmbH & Co. KG, DE, Rietberg6
+25.1
+Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE, Giesen6
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE, Giesen
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
+Hohen Neuendorf6
+49.0
+Novo Innovations Limited, GB, Coventry²
+100.0
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg6
+49.0
+49.0
+Npower Business and Social Housing Limited, GB, Swindon¹
+Name, location
+Gundremmingen¹
+50.0
+Melle Netze GmbH & Co. KG, DE, Melle6
+HanseWerk AG, DE, Quickborn¹
+66.5
+Gemeindewerke Windeck GmbH & Co. KG, DE, Windeck
+49.9
+Gondoskodás-Egymásért Alapítvány, HU, Debrecen²
+100.0
+HanseWerk Natur GmbH, DE, Hamburg¹
+100.0
+50.0
+Gemeinnützige Gesellschaft zur Förderung des E.ON Energy
+Research Center mbH, DE, Aachen
+Gottburg Energie- und Wärmetechnik GmbH & Co. KG i. L., DE, Leck
+Gottburg Verwaltungs GmbH i. L., DE, Leck6
+49.9
+Hary Installationstechnik GmbH, DE, Schiffweiler²
+100.0
+49.9
+Harzwasserwerke GmbH, DE, Hildesheim5
+20.8
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG, DE,
+50.0
+GREEN GECCO Beteiligungsgesellschaft mbH & Co. KG, DE, Troisdorf6
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen
+Gemeindewerke Wietze GmbH, DE, Wietze6
+100.0
+50.0
+49.0
+GWG Grevenbroich GmbH, DE, Grevenbroich¹
+GWG Kommunal GmbH, DE, Grevenbroich²
+100.0
+89.9
+Gemeindewerke Uetze GmbH, DE, Uetze
+49.0
+49.0
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen
+Hams Hall Management Company Limited, GB, Coventry
+44.8
+Gemeindewerke Wedemark GmbH, DE, Wedemark6
+49.0
+GOLLIPP Bioerdgas GmbH & Co. KG, DE, Gollhofen6
+50.0
+HanseGas GmbH, DE, Quickborn¹
+100.0
+48.0
+20.7
+Emmerthal¹
+100.0
+KAWAG Netze Verwaltungsgesellschaft mbH, DE, Abstatt
+49.0
+49.9
+Heizkraftwerk Zwickau Süd GmbH & Co. KG, DE, Zwickau
+40.0
+KDT Kommunale Dienste Tholey GmbH, DE, Tholey6
+49.0
+Heizungs- und Sanitärbau WIJA GmbH, DE, Bad Neuenahr-Ahrweiler²
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+Nienburg/Weser
+100.0
+innogy Benelux Holding B.V., NL, 's-Hertogenbosch¹
+innogy e-mobility US LLC, US, Delaware¹
+100.0
+Kemkens Groep B.V., NL, Oss5
+49.0
+100.0
+Kemsley CHP Limited, GB, Coventry¹
+100.0
+50.0
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co. oHG,
+DE, Neualbenreuth6
+25.1
+Stake (%)
+Name, location
+HaseNetz GmbH & Co. KG, DE, Gehrde
+Havelstrom Zehdenick GmbH, DE, Zehdenick6
+25.1
+49.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11.. 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method).. Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 268
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+HCL Netze GmbH & Co. KG, DE, Herzebrock-Clarholz6
+Stake (%)
+Name, location
+Stake (%)
+GSH Green Steam Hürth GmbH, DE, Munich¹
+innogy Finance B.V., NL, 's-Hertogenbosch¹
+100.0
+49.0
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
+95.0
+Braunau am Inn6
+20.0
+Green Urban Energy GmbH, DE, Berlin
+50.0
+Gasversorgung Unterfranken Gesellschaft mit beschränkter Haftung,
+DE, Würzburg5
+Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn¹
+49.0
+greenergetic Energie Service GmbH & Co. KG, DE, Essen²
+100.0
+33.3
+greenergetic Energie Service Management GmbH, DE, Bielefeld²
+100.0
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+49.0
+Get Energy Solutions Szolgáltató Kft., HU, Budapest¹
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein GmbH,
+DE, Kiel6
+100.0
+45.0
+50.0
+83.2
+GREEN GECCO Beteiligungsgesellschaft-Verwaltungs GmbH, DE,
+Troisdorf6
+20.7
+Gasnetzgesellschaft Wörrstadt mbH & Co. KG, DE, Saulheim
+49.0
+Gasnetzgesellschaft Wörrstadt Verwaltung mbH, DE, Saulheim6
+49.0
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+Green Solar Herzogenrath GmbH, DE, Herzogenrath
+50.0
+75.0
+GREEN Gesellschaft für regionale und erneuerbare Energie mbH, DE,
+Stolberg/Rhld.6
+49.2
+66.7
+Green Sky Energy Limited, GB, Coventry¹
+100.0
+51.6
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG., DE, Emmerthal¹
+Geotermisk Operatørselskab A/S, DK, Kirke Saby²
+Greenergetic GmbH, DE, Bielefeld²
+100.0
+Gasversorgung Wunsiedel GmbH, DE, Wunsiedel6
+50.0
+75.0
+gridX GmbH, DE, Aachen²
+80.0
+25.2
+GrønGas Partner A/S, DK, Hirtshals6
+50.0
+Gemeindewerke Everswinkel GmbH, DE, Everswinkel6
+Grenaa Biogas ApS, DK, Frederiksberg6
+45.0
+23.9
+Grüne Quartiere GmbH, DE, Gelsenkirchen
+50.0
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+49.0
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing6
+49.0
+Gemeindewerke Namborn, Gesellschaft mit beschränkter Haftung,
+DE, Namborn6
+GISA GmbH, DE, Halle (Saale)6
+41.7
+100.0
+greenXmoney.com GmbH i. L., DE, Neu-Ulm²
+50.0
+Gelsenberg GmbH & Co. KG, DE, Düsseldorf1,8
+100.0
+Gewerkschaft Hermann V Gesellschaft mit beschränkter Haftung,
+DE, Duisburg²
+greenited GmbH, DE, Hamburg6
+50.0
+66.7
+Greenplug GmbH, DE, Hamburg6
+49.0
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+Gelsenwasser Beteiligungs-GmbH, DE, Munich²
+100.0
+Gemeindewerke Bissendorf Netze GmbH & Co. KG, DE, Bissendorf6
+49.0
+Gemeindewerke Bissendorf Netze Verwaltungs-GmbH, DE, Bissendorf6
+49.0
+GfB, Gesellschaft für Baudenkmalpflege mbH, DE, Idar-Oberstein
+GfS Gesellschaft für Simulatorschulung mbH, DE, Essen
+GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing²
+Gichtgaskraftwerk Dillingen GmbH & Co. KG, DE, Dillingen
+20.0
+GKB Gesellschaft für Kraftwerksbeteiligungen mbH, DE, Cottbus²
+GkD Gesellschaft für kommunale Dienstleistungen mbH, DE, Cologne
+GNEE Gesellschaft zur Nutzung erneuerbarer Energien mbH Freisen,
+DE, Freisen6
+28.9
+100.0
+41.7
+50.0
+KAWAG AG & Co. KG, DE, Pleidelsheim6
+KAWAG Netze GmbH & Co. KG, DE, Abstatt
+49.0
+Kommunale Klimaschutzgesellschaft Landkreis Celle gemeinnützige
+GmbH, DE, Celle6
+25.0
+49.0
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11.. 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method).. Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. 9Control by virtue of company contract.. 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+InfraServ - Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz6
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 269
+→ Consolidated Statement of Income
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+100.0
+→ Notes
+50.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt6
+iWATT s.r.o., SK, Košice²
+80.0
+Induboden GmbH, DE, Düsseldorf²
+100.0
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+100.0
+Kommunale Dienste Marpingen Gesellschaft mit beschränkter
+Haftung, DE, Marpingen6
+49.0
+49.0
+Induboden GmbH & Co. Grundstücksgesellschaft oHG, DE, Essen²
+Kalmar Energi Försäljning AB, SE, Kalmar6
+40.0
+Industriekraftwerk Greifswald GmbH, DE, Kassel6
+49.0
+Industry Development Services Limited, GB, Coventry²
+100.0
+Kalmar Energi Holding AB, SE, Kalmar4
+Kavernengesellschaft Staßfurt mbH, DE, Staßfurt6
+50.0
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Stake (%)
+Name, location
+100.0
+MDE Service GmbH, DE, Gersthofen
+24.9
+Kommunalwerk Rudersberg Verwaltungs-GmbH, DE, Rudersberg6
+49.9
+Leitungspartner GmbH, DE, Düren¹
+100.0
+medl GmbH, DE, Mülheim an der Ruhr5
+100.0
+39.0
+100.0
+Lemonbeat GmbH, DE, Dortmund²
+100.0
+Konsortium Energieversorgung Opel beschränkt haftende oHG, DE,
+Karlstein 4,10
+Mehr Ampere GmbH, DE, Lappersdorf6
+25.1
+LEW Anlagenverwaltung Gesellschaft mit beschränkter Haftung, DE,
+66.7
+Konnektor B.V., NL, Utrecht¹
+Matrix Control Solutions Limited, GB, Coventry¹
+Leitungs- und Kanalservice Bauer GmbH, DE,
+Schönbrunn i. Steigerwald²
+49.9
+Stake (%)
+Name, location
+Stake (%)
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen
+gemeinnützige GmbH, DE, Celle
+25.0
+Lech Energie Verwaltung GmbH, DE, Augsburg2
+Lechwerke AG, DE, Augsburg¹
+100.0
+Luna Lüneburg GmbH, DE, Lüneburg6
+49.0
+89.9
+Macherner Bau- und Elektrogesellschaft mbH, DE, Machern²
+51.0
+Kommunale Netzgesellschaft Steinheim a. d. Murr GmbH & Co. KG,
+DE, Steinheim an der Murr6
+Leicon GmbH, DE, Neustadt a. Rbge.6
+50.0
+MAINGAU Energie GmbH, DE, Obertshausen
+46.6
+49.0
+Kommunalwerk Rudersberg GmbH & Co. KG, DE, Rudersberg6
+55.0
+Heliatek GmbH, DE, Dresden
+KommEnergie GmbH, DE, Eichenau
+Improvers Community B.V., NL, Utrecht¹
+50.0
+66.7
+26.0
+innogy SE Service s.r.o., CZ, Brno²
+100.0
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+100.0
+Hof Promotion B.V., NL, Utrecht¹
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+Holsteiner Wasser GmbH, DE, Neumünster6
+100.0
+innogy Slovensko s.r.o., SK, Bratislava¹
+100.0
+KEVAG Telekom GmbH, DE, Koblenz
+50.0
+50.0
+innogy Solutions s.r.o., SK, Bratislava²
+100.0
+HS Participations B.V., NL, Voerendaal¹
+100.0
+100.0
+100.0
+Hennef (Sieg) Netz GmbH & Co. KG, DE, Hennef6
+49.0
+innogy Hungária Tanácsadó Kft., HU, Budapest²
+innogy Innovation UK Ltd., GB, London²
+100.0
+KEN Geschäftsführungsgesellschaft mbH, DE, Püttlingen²
+KEN GmbH & Co. KG, DE, Neunkirchen²
+65.0
+53.6
+100.0
+innogy SE, DE, Essen 1,8
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Hermann Stibbe Verwaltungs-GmbH, DE, Wunstorf²
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
+Gemeinsames europäisches Unternehmen, DE, Hamm6
+100.0
+innogy International Middle East, AE, Dubai6
+49.0
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+33.3
+100.0
+innogy Middle East & North Africa Ltd., AE, Dubai²
+80.0
+innogy South East Europe s.r.o., SK, Bratislava²
+100.0
+KEW Kommunale Energie- und Wasserversorgung Aktiengesellschaft,
+DE, Neunkirchen5
+KlickEnergie Verwaltungs-GmbH, DE, Neuss
+65.0
+iamsmart GmbH i. L., DE, Essen²
+100.0
+Isar Loisach Stromnetz GmbH & Co. KG, DE, Wolfratshausen6
+49.0
+Improbed AB, SE, Malmö²
+100.0
+51.0
+Isoprofs B.V., NL, Meijel¹
+Klíma És Hűtéstechnológiai Tervező, Szerelő És Kereskedelmi Kft.,
+HU, Budapest¹
+100.0
+Improvers B.V., NL, 's-Hertogenbosch¹
+100.0
+It's a beautiful world B.V., NL, Amersfoort¹
+100.0
+Komáromi Kogenerációs Erőmű Kft., HU, Budapest²
+100.0
+100.0
+IPP ESN Power Engineering GmbH, DE, Kiel²
+25.0
+HYPION GmbH, DE, Heide6
+28.6
+HSL Laibacher GmbH, DE, Wiesen²
+100.0
+innogy.C3 GmbH i. L., DE, Munich6
+25.1
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+100.0
+Hub2Go GmbH, DE, Hamburg6
+49.0
+Installatietechniek Totaal B.V., NL, Leeuwarden¹
+100.0
+Kite Power Systems Limited, GB, Chelmsford
+26.6
+Huisman Warmtetechniek B.V., NL, Stadskanaal¹
+100.0
+Intelligent Maintenance Systems Limited, GB, Milton Keynes
+25.0
+KlickEnergie GmbH & Co. KG, DE, Neuss
+65.0
+100.0
+36.9
+BTB-Blockheizkraftwerks, Träger- und Betreibergesellschaft mbH
+Gas- und Wasserwerke Bous - Schwalbach GmbH, DE, Bous5
+GASAG AG, DE, Berlin5
+E.ON Solar GmbH, DE, Essen²
+100.0
+E.ON-CAPNET S.R.L., IT, Milan²
+90.0
+E.ON Solutions GmbH, DE, Essen¹
+E.ON Stiftung gGmbH, DE, Essen²
+E.ON Sverige AB, SE, Malmö¹
+E.ON Telco, s.r.o., CZ, České Budějovice²
+E.ON TowerCo GmbH, DE, Markkleeberg²
+E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+E3 Haustechnik GmbH, DE, Magdeburg²
+ELMŰ-ÉMÁSZ Energiakereskedő Kft., HU, Budapest¹
+100.0
+100.0
+100.0
+East Midlands Electricity Distribution Holdings, GB, Coventry²
+100.0
+Elmű-Émász Energiaszolgáltató Zrt., HU, Budapest¹
+100.0
+100.0
+East Midlands Electricity Share Scheme Trustees Limited, GB, Coventry²
+100.0
+ELMŰ-ÉMÁSZ Energiatároló Kft., HU, Budapest¹
+ELMŰ-ÉMÁSZ Solutions Kft., HU, Budapest¹
+100.0
+ELMŰ Hálózati Elosztó Kft., HU, Budapest¹
+100.0
+49.0
+E.ON US Corporation, US, Wilmington¹
+100.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+100.0
+E.ON Service GmbH, DE, Essen²
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf¹, 8
+100.0
+ELE-RAG Montan Immobilien Erneuerbare Energien GmbH, DE, Bottrop
+50.0
+E.ON Slovensko, a.s., SK, Bratislava¹
+100.0
+100.0
+100.0
+ELE-Scholven-Wind GmbH, DE, Gelsenkirchen6
+30.0
+E.ON Software Development SRL, RO, Bucharest²
+100.0
+E.ON Vermögensverwaltungs GmbH, DE, Essen 1,8
+100.0
+E.ON Solar d.o.o., HR, Zagreb¹
+100.0
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+Elmregia GmbH, DE, Schöningen
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+E.ON Polska Development Sp. z o.o., PL, Warsaw²
+100.0
+EBERnetz GmbH & Co. KG, DE, Ebersberg6
+100.0
+EDT Energie Werder GmbH, DE, Werder (Havel)²
+100.0
+100.0
+100.0
+EE2 Erneuerbare Energien GmbH & Co. KG, DE, Lützen²
+EFG Erdgas Forchheim GmbH, DE, Forchheim
+100.0
+Energie Mechernich Verwaltungs-GmbH, DE, Mechernich6
+Energie Schmallenberg GmbH, DE, Schmallenberg6
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+49.0
+44.0
+35.0
+24.9
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 265
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+E.ON UK Energy Services Limited, GB, Coventry2
+E.ON UK Heat Limited, GB, Coventry¹
+E.ON UK Holding Company Limited, GB, Coventry¹
+100.0
+Economy Power Limited, GB, Coventry¹
+100.0
+49.0
+100.0
+EBY Immobilien GmbH & Co KG, DE, Regensburg²
+100.0
+EMG Energimontagegruppen AB, SE, Karlshamn²
+Emscher Lippe Energie GmbH, DE, Gelsenkirchen 1,9
+100.0
+49.9
+100.0
+EBY Port 1 GmbH, DE, Munich¹
+100.0
+100.0
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+46.7
+100.0
+Energie BOL GmbH, DE, Ottersweier6
+49.9
+E.ON UK Directors Limited, GB, Coventry²
+100.0
+ECO2 Solutions Group Limited, GB, Kidderminster4
+49.0
+Energie Mechernich GmbH & Co. KG, DE, Mechernich6
+49.0
+E.ON UK Energy Markets Limited, GB, Coventry¹
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+100.0
+E.ON Energy Solutions d.o.o., SI, Brezovica²
+E.ON Energy Solutions GmbH, DE, Essen¹
+E.ON impulse GmbH, DE, Essen 1,8
+E.ON Rhein-Ruhr Werke GmbH, DE, Essen²
+100.0
+E.ON Real Estate GmbH, DE, Essen¹
+100.0
+ElbEnergie GmbH, DE, Seevetal¹
+100.0
+100.0
+EG.D, a.s., CZ, Brno¹
+100.0
+51.0
+EG.D Montáže, s.r.o., CZ, České Budějovice²
+100.0
+E.ON UK Infrastructure Services Limited, GB, Coventry¹
+E.ON UK Pension Trustees Limited, GB, Coventry²
+E.ON UK plc, GB, Coventry¹
+100.0
+E.ON RAG-Beteiligungsgesellschaft mbH, DE, Düsseldorf 1,8
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Produzione S.p.A., IT, Milan¹
+39.9
+EFR GmbH, DE, Munich6
+100.0
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+100.0
+E.ON UK Property Services Limited, GB, Coventry²
+E.ON UK PS Limited, GB, Coventry²
+100.0
+100.0
+49.0
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf¹,8
+100.0
+Elektrizitätswerk Landsberg Gesellschaft mit beschränkter Haftung,
+DE, Landsberg am Lech2
+100.0
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+49.0
+Elektrizitätswerk Heinrich Schirmer GmbH, DE, Schauenstein6
+100.0
+100.0
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+49.0
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE, Grünwald
+100.0
+E.ON UK Secretaries Limited, GB, Coventry²
+100.0
+E.ON România S.R.L., RO, Târgu Mureş¹
+100.0
+49.0
+ELE - GEW Photovoltaikgesellschaft mbH, DE, Gelsenkirchen
+ELE Verteilnetz GmbH, DE, Gelsenkirchen¹
+E.ON UK Steven's Croft Limited, GB, Coventry¹
+Stake (%)
+Name, location
+Stake (%)
+100.0
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+100.0
+E.ON Insurance Services GmbH, DE, Essen²
+E.ON Polska Solutions Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+E.ON Innovation Hub S.A., RO, Bucharest²
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+100.0
+E.ON Polska S.A., PL, Warsaw¹
+E.ON Finanzanlagen GmbH, DE, Düsseldorf 1,8
+100.0
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+100.0
+E.ON Polska Operations Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+E.ON Inhouse Consulting GmbH, DE, Essen²
+100.0
+E.ON Polska IT Support Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+E.ON Energy Solutions Limited, GB, Coventry¹
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+E.ON INTERNATIONAL FINANCE B.V., NL, 's-Hertogenbosch¹
+100.0
+Name, location
+Stake (%)
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Income
+Consolidated Financial Statements 264
+Back
+100.0
+↑
+Contents
+E.ON Annual Report 2021
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+100.0
+100.0
+100.0
+100.0
+E.ON Portfolio Services GmbH, DE, Munich²
+E.ON Portfolio Solutions GmbH, DE, Munich¹
+E.ON Power Plants Belgium BV, BE, Mechelen¹
+E.ON International Participations N.V. (formerly innogy International
+Participations N.V.), NL, 's-Hertogenbosch¹
+100.0
+E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin²
+Search
+Stake (%)
+100.0
+Stake (%)
+100.0
+49.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 266
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+eprimo GmbH, DE, Neu-Isenburg¹
+100.0
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+enviaM Neue Energie Management GmbH, DE, Lützen²
+enviaM Zweite Neue Energie Management GmbH, DE, Lützen²
+49.0
+50.0
+100.0
+envia TEL GmbH, DE, Markkleeberg¹
+100.0
+Energiepartner Solar Kreuztal GmbH, DE, Kreuztal6
+40.0
+Energiewacht Facilities B.V., NL, Zwolle¹
+100.0
+envia THERM GmbH, DE, Bitterfeld-Wolfen¹
+100.0
+Energie-Pensions-Management GmbH, DE, Hanover²
+70.0
+EVG Energieversorgung Gemünden GmbH, DE, Gemünden am Main
+EVIP GmbH, DE, Bitterfeld-Wolfen¹
+Energiewacht West Nederland B.V., NL, Rotterdam¹
+Energie Region Taunus - Goldener Grund - GmbH & Co. KG, DE,
+Bad Camberg6
+49.0
+EnergieRevolte GmbH, DE, Düren²
+100.0
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau6
+69.5
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+50.0
+enviaM Beteiligungsgesellschaft Chemnitz GmbH, DE, Chemnitz¹
+enviaM Beteiligungsgesellschaft mbH, DE, Essen¹
+100.0
+100.0
+100.0
+49.0
+Fraku Installaties B.V., NL, Venlo¹
+100.0
+Erneuerbare Energien Rheingau-Taunus GmbH, DE, Bad Schwalbach6
+25.1
+ErwärmBAR GmbH, DE, Eberswalde
+50.0
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg6
+EWV Baesweiler GmbH & Co. KG, DE, Baesweiler
+50.2
+Fundacja innogy w Polsce, PL, Warsaw²
+100.0
+45.0
+Future Energy Ventures Management GmbH, DE, Essen 1,8
+100.0
+50.0
+eShare.one GmbH, DE, Dortmund6
+EWV Baesweiler Verwaltungs GmbH, DE, Baesweiler6
+45.0
+G&L Gastro-Service GmbH, DE, Augsburg6
+35.0
+ESK GmbH, DE, Dortmund²
+100.0
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+55.0
+EWV Energie- und Wasser-Versorgung GmbH, DE, Stolberg/Rhld.¹
+EZV Energie- und Service GmbH & Co. KG Untermain, DE,
+Wörth am Main6
+Name, location
+53.7
+20.0
+Energiewacht B.V., NL, Zwolle¹
+FSO Verwaltungs-GmbH, DE, Oberhausen
+50.0
+100.0
+Fraku Service B.V., NL, Venlo¹
+100.0
+Erdgasversorgung Industriepark Leipzig Nord GmbH, DE, Leipzig
+Erdgasversorgung Schwalmtal GmbH & Co. KG, DE, Viersen
+50.0
+evm Windpark Höhn GmbH & Co. KG, DE, Höhn
+33.2
+100.0
+50.0
+EWIS BV, NL, Ede¹
+100.0
+20.0
+Freiberger Stromversorgung GmbH (FSG), DE, Freiberg
+Erdgasversorgung Schwalmtal Verwaltungs-GmbH, DE, Viersen
+e-regio GmbH & Co. KG, DE, Euskirchen5
+50.0
+EWR Aktiengesellschaft, DE, Worms 5, 11
+1.3
+40.5
+Ergon Overseas Holdings, GB, Coventry²
+100.0
+EWR Dienstleistungen GmbH & Co. KG, DE, Worms5
+EWR GmbH, DE, Remscheid
+25.0
+Fresh Energy GmbH i. L., DE, Berlin²
+FSO GmbH & Co. KG, DE, Oberhausen
+52.8
+30.0
+49.0
+Free Electrons LLC, US, Palo Alto²
+100.0
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+beschränkter Haftung, DE, Halblech
+Energy Ventures GmbH, DE, Saarbrücken²
+100.0
+50.0
+energielösung GmbH, DE, Regensburg²
+100.0
+energy4u GmbH & Co. KG, DE, Siegburg6
+49.0
+energienatur Gesellschaft für Erneuerbare Energien mbH, DE, Siegburg
+Energienetz Neufahrn/Eching GmbH & Co. KG, DE,
+44.0
+Energieversorgung Guben GmbH, DE, Guben5
+74.9
+45.0
+Enerjisa Enerji A.Ş., TR, Istanbul4
+40.0
+49.0
+Enerjisa Üretim Santralleri A.Ş., TR, Istanbul4
+50.0
+Neufahrn bei Freising
+49.0
+Energieversorgung Hürth GmbH, DE, Hürth
+24.9
+enermarket GmbH, DE, Frankfurt am Main6
+60.0
+Energieversorgung Horstmar/Laer GmbH & Co. KG, DE, Horstmar
+Energienetze Bayern GmbH, DE, Regensburg¹
+Energiegesellschaft Leimen Verwaltungsgesellschaft mbH, DE, Leimen²
+Energy Collection Services Limited, GB, Coventry²
+Name, location
+Stake (%)
+Energiepartner Projekt GmbH, DE, Essen
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG (ews),
+DE, Bad Segeberg6
+50.1
+Energie Vorpommern GmbH, DE, Trassenheide
+49.0
+Energieversorgung Bad Bentheim GmbH & Co. KG, DE, Bad Bentheim6
+Energieversorgung Bad Bentheim Verwaltungs-GmbH, DE,
+Bad Bentheim6
+25.1
+Energiewerken B.V., NL, Almere¹
+100.0
+100.0
+energis GmbH, DE, Saarbrücken¹
+25.1
+energis-Netzgesellschaft mbH, DE, Saarbrücken¹
+100.0
+Energiedirect B.V., NL, 's-Hertogenbosch¹
+100.0
+Energiegesellschaft Leimen GmbH & Co.KG, DE, Leimen²
+74.9
+Energieversorgung Beckum GmbH & Co. KG, DE, Beckum (Westf.)6
+Energieversorgung Beckum Verwaltungs-GmbH, DE, Beckum (Westf.)6
+34.0
+Energotel, a.s., SK, Bratislava
+20.0
+71.9
+100.0
+34.0
+100.0
+50.0
+ENNI Energienetze Rheinberg GmbH & Co. KG, DE, Rheinberg²
+ENNI Energienetze Rheinberg Verwaltung GmbH, DE, Rheinberg²
+ENRO Ludwigsfelde Energie GmbH, DE, Ludwigsfelde²
+ENRO Ludwigsfelde Netz GmbH, DE, Ludwigsfelde²
+100.0
+100.0
+100.0
+100.0
+50.0
+Ense Stromnetz GmbH & Co. KG, DE, Ense
+25.1
+30.0
+49.0
+Energieversorgung Timmendorfer Strand GmbH & Co. KG, DE,
+Timmendorfer Strand²
+ENTRO GmbH Marktbergel, DE, Marktbergel
+envelio GmbH, DE, Cologne²
+24.2
+75.0
+51.0
+envia Mitteldeutsche Energie AG, DE, Chemnitz¹
+57.9
+Energiepartner Niederzier GmbH, DE, Niederzier6
+49.0
+Energienetze Berlin GmbH, DE, Berlin¹
+Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde
+49.0
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE, Putzbrunn6
+Energieversorgung Sehnde GmbH, DE, Sehnde
+20.0
+Energiepartner Kerpen GmbH, DE, Kerpen
+40.0
+25.1
+Energienetze Großostheim GmbH & Co. KG, DE, Großostheim
+Energiepartner Hermeskeil GmbH, DE, Hermeskeil
+ENERVENTIS GmbH & Co. KG, DE, Saarbrücken6
+25.1
+25.1
+Enervolution GmbH, DE, Bochum²
+envia SERVICE GmbH, DE, Cottbus¹
+Energieversorgung Kranenburg Netze GmbH & Co. KG, DE, Kranenburg6
+Energieversorgung Kranenburg Netze Verwaltungs GmbH, DE,
+Kranenburg6
+25.1
+Energienetze Holzwickede GmbH, DE, Holzwickede6
+Energieversorgung Marienberg GmbH, DE, Marienberg6
+49.0
+100.0
+25.1
+Energienetze Ingolstadt GmbH, DE, Regensburg²
+100.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+100.0
+Energieversorgung Niederkassel GmbH & Co. KG, DE, Niederkassel
+Energieversorgung Oberhausen Aktiengesellschaft, DE, Oberhausen 5, 11
+49.0
+10.0
+Energiepartner Dörth GmbH, DE, Dörth
+49.0
+Energiepartner Elsdorf GmbH, DE, Elsdorf6
+30.0
+SVS-Versorgungsbetriebe GmbH, DE, Stadtlohn4
+49.0
+TWM Technische Werke der Gemeinde Merchweiler Gesellschaft mit
+beschränkter Haftung, DE, Merchweiler6
+100.0
+SVO Holding GmbH, DE, Celle¹
+50.1
+20.0
+100.0
+49.9
+Verteilnetz Plauen GmbH, DE, Plauen¹
+SVO Vertrieb GmbH, DE, Celle¹
+TWRS Technische Werke der Gemeinde Rehlingen-Siersburg GmbH,
+DE, Rehlingen-Siersburg
+35.0
+SWG Glasfaser Netz GmbH, DE, Geesthacht
+33.4
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg6
+SWS Energie GmbH, DE, Stralsund5
+25.1
+TWS Technische Werke der Gemeinde Saarwellingen GmbH, DE,
+Saarwellingen
+51.0
+Verteilnetze Energie Weißenhorn GmbH & Co.KG, DE, Weißenhorn
+Verwaltungsgesellschaft Dorsten Netz mbH, DE, Dorsten
+Verwaltungsgesellschaft Energie Weißenhorn GmbH, DE, Weißenhorn6
+Verwaltungsgesellschaft Energieversorgung
+Timmendorfer Strand mbH, DE, Timmendorfer Strand²
+Verwaltungsgesellschaft GKW Dillingen mbH, DE, Dillingen6
+35.0
+49.0
+51.0
+25.2
+Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein6
+49.0
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+35.0
+49.0
+100.0
+100.0
+77.6
+E.ON Annual Report 2021
+100.0
+Triangeln 11 AB, SE, Malmö²
+100.0
+Vandebron Energie B.V., NL, Amsterdam¹
+100.0
+Süwag Grüne Energien und Wasser AG & Co. KG, DE,
+Frankfurt am Main¹
+Triangeln 15 i Norrköping Fastighets AB, SE, Malmö²
+100.0
+Trinkwasserverbund Niederrhein TWN GmbH, DE, Grevenbroich6
+33.3
+VEM Neue Energie Muldental GmbH & Co. KG, DE, Markkleeberg6
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE, Waldbüttelbrunn6
+50.0
+TWE Technische Werke der Gemeinde Ensdorf GmbH, DE, Ensdorf6
+TWL Technische Werke der Gemeinde Losheim GmbH, DE,
+Losheim am See6
+49.0
+100.0
+Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling
+33.3
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+49.0
+Süwag Vertrieb AG & Co. KG, DE, Frankfurt am Main¹
+100.0
+Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling6
+33.3
+Versorgungskasse Energie (VVaG) i. L., DE, Hanover6
+69.6
+SVH Stromversorgung Haar GmbH, DE, Haar6
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+SVO Access GmbH, DE, Celle¹
+50.0
+25.1
+Süwag Management GmbH, DE, Frankfurt am Main²
+Contents
+Westenergie Netzservice GmbH, DE, Dortmund¹
+↑
+100.0
+Volta Limburg B.V., NL, Schinnen¹
+Volta Participaties 1 BV, NL, Schinnen¹
+Volta Service B.V., NL, Schinnen¹
+Volta Solar B.V., NL, Heerlen¹
+100.0
+100.0
+100.0
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE, Goslar
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim6
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+49.0
+Westenergie Breitband GmbH, DE, Essen¹
+100.0
+50.0
+Westenergie Metering GmbH, DE, Mülheim an der Ruhr¹
+Westenergie Aqua GmbH, DE, Mülheim an der Ruhr 1,8
+100.0
+100.0
+100.0
+Volta Solar VOF, NL, Heerlen¹
+90.0
+VOLTARIS GmbH, DE, Maxdorf6
+50.0
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE, Müden/Aller
+Wassernetzgesellschaft Erft GmbH & Co. KG, DE, Bergheim6
+Wasser-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+50.0
+Westenergie Rheinhessen Beteiligungs GmbH, DE, Essen 1,8
+100.0
+51.0
+Westerwald-Netz GmbH, DE, Betzdorf¹
+Vandebron B.V., NL, Amsterdam¹
+100.0
+60.0
+Search
+50.1
+Westenergie AG, DE, Essen¹
+Back
+Consolidated Financial Statements 276
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Verwaltungsgesellschaft Scharbeutzer Energie- und
+Netzgesellschaft mbH, DE, Scharbeutz²
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+51.0
+100.0
+Veszprém-Kogeneráció Energiatermelő Zrt., HU, Budapest²
+Visualix GmbH i. L., DE, Berlin
+25.0
+VKB-GmbH, DE, Neunkirchen¹
+50.0
+Wärmeversorgung Schwaben GmbH, DE, Augsburg²
+Wärmeversorgung Wachau GmbH, DE, Markkleeberg6
+Wärmeversorgung Würselen GmbH, DE, Stolberg/Rhld.2
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH, DE,
+Königs Wusterhausen²
+100.0
+Wendelsteinbahn Verteilnetz GmbH, DE, Brannenburg am Inn²
+100.0
+49.0
+werkkraft GmbH, DE, Munich6
+50.0
+100.0
+Werne Netz GmbH & Co. KG, DE, Werne
+49.0
+100.0
+100.0
+90.0
+49.0
+Stromnetze Peiner Land GmbH, DE, Ilsede6
+49.0
+49.0
+100.0
+100.0
+74.5
+100.0
+49.0
+Stromnetzgesellschaft Seelze GmbH & Co. KG, DE, Seelze
+Stromnetzgesellschaft Siegen GmbH & Co.KG, DE, Siegen6
+49.0
+25.1
+25.1
+49.0
+Stromnetzgesellschaft Bad Salzdetfurth - Diekholzen mbH & Co. KG,
+DE, Bad Salzdetfurth6
+Strom-Netzgesellschaft Voerde mbH & Co. KG, DE, Voerde
+Stromnetzgesellschaft Windeck mbH & Co. KG, DE, Windeck6
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf6
+Stromversorgung Angermünde GmbH, DE, Angermünde
+Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg6
+Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
+Pfaffenhofen
+25.1
+49.9
+49.0
+49.0
+49.0
+49.0
+49.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. 9Control by virtue of company contract.. 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 275
+→ Consolidated Statement of Income
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+100.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Planegg²
+100.0
+Stromnetz Essen GmbH & Co. KG i.Gr., DE, Essen²
+Stromnetz Essen Verwaltung GmbH, DE, Essen²
+Stromnetz Euskirchen GmbH & Co. KG, DE, Euskirchen
+Stromnetz Friedberg GmbH & Co. KG, DE, Friedberg6
+Westnetz Asset Komplementär GmbH, DE, Essen²
+100.0
+100.0
+25.1
+49.0
+49.0
+49.0
+20.8
+100.0
+Stromnetz Verbandsgemeinde Katzenelnbogen Verwaltungs-
+gesellschaft mbH, DE, Katzenelnbogen6
+Stromnetzgesellschaft Neunkirchen-Seelscheid mbH & Co. KG, DE,
+Neunkirchen-Seelscheid6
+49.0
+49.0
+Stromnetzgesellschaft Schwalmtal mbH & Co. KG, DE, Schwalmtal
+Stake (%)
+51.0
+Stollberg Netz GmbH & Co. KG, DE, Stollberg
+100.0
+Stromnetz VG Diez GmbH und Co. KG, DE, Altendiez6
+49.0
+49.0
+Stollberg Netz Verwaltungs GmbH, DE, Stollberg²
+100.0
+Strom Germering GmbH, DE, Germering²
+STROMNETZ VG DIEZ Verwaltungsgesellschaft mbH, DE, Altendiez
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf.6
+Stromnetz Weilheim GmbH & Co. KG, DE, Regensburg²
+Stromnetz Diez GmbH und Co.KG, DE, Diez
+25.1
+Stromnetz Diez Verwaltungsgesellschaft mbH, DE, Diez
+25.1
+Stromnetz Weilheim Verwaltungs GmbH, DE, Regensburg²
+Stromnetz Würmtal GmbH & Co. KG, DE, Planegg²
+Stoen Operator Sp. z o.o., PL, Warsaw¹
+Triangeln 10 i Norrköping Fastighets AB, SE, Malmö²
+Name, location
+SWT trilan GmbH, DE, Trier6
+50.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely
+Technische Werke Naumburg GmbH, DE, Naumburg (Saale)6
+The Power Generation Company Limited, GB, Coventry²
+25.0
+Union Grid s.r.o., CZ, Prague
+34.0
+47.0
+Untere Iller GmbH, DE, Landshut
+40.0
+100.0
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG, DE,
+Brandenburg an der Havel5
+Untermain Energie Projekt AG & Co. KG., DE, Kelsterbach6
+49.0
+36.8
+TNA Talsperren- und Grundwasser-Aufbereitungs- und
+Vertriebsgesellschaft mbH, DE, Nonnweiler6
+22.8
+Untermain Erneuerbare Energien GmbH, DE, Raunheim
+25.0
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel6
+SüdWasser GmbH, DE, Erlangen²
+36.8
+TRANSELEKTRO, s.r.o., SK, Košice
+25.5
+URANIT GmbH, DE, Jülich4
+50.0
+100.0
+TraveNetz GmbH, DE, Lübeck5
+25.1
+Utility Debt Services Limited, GB, Coventry²
+100.0
+Südwestfalen Netz-Verwaltungsgesellschaft mbH, DE, Netphen
+Süwag Energie AG, DE, Frankfurt am Main¹
+strotög GmbH Strom aus Töging, DE, Töging am Inn
+51.0
+Stromverwaltung Schwalmtal GmbH, DE, Schwalmtal6
+26.8
+Stake (%)
+26.0
+Name, location
+Stake (%)
+Überlandwerk Krumbach Gesellschaft mit beschränkter Haftung, DE,
+49.0
+Krumbach¹
+74.6
+SWTE Netz GmbH & Co. KG, DE, Ibbenbüren
+33.0
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter Haftung,
+DE, Ruhpolding²
+Überlandwerk Leinetal GmbH, DE, Gronau6
+48.0
+100.0
+SWTE Netz Verwaltungsgesellschaft mbH, DE, Ibbenbüren
+Syna GmbH, DE, Frankfurt am Main¹
+Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH, DE,
+Pfaffenhofen6
+33.0
+37.8
+100.0
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Überlandwerk Mittelbaden Verwaltungs-GmbH, DE, Lahr
+37.8
+Unterschleißheim
+49.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Unterschleißheim6
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+Szombathelyi Erőmű Zrt., HU, Budapest²
+66.5
+80.0
+49.0
+Ultra-Fast Charging Venture Scandinavia ApS, DK, Copenhagen
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen6
+50.0
+Überlandwerk Mittelbaden GmbH & Co. KG, DE, Lahr
+100.0
+100.0
+25.1
+Consolidated investment funds
+Stake (%)
+Name, location
+Equity
+Earnings
+Stake (%)
+(€ in millions)
+(€ in millions)
+Investments Pursuant to Section 313 (2) No. 5 HGB
+HANSEFONDS, DE, Düsseldorf¹
+100.0
+MI-FONDS 178, DE, Frankfurt am Main¹
+100.0
+MI-FONDS F55, DE, Frankfurt am Main¹
+100.0
+BEW Bergische Energie- und Wasser-Gesellschaft mit beschränkter Haftung, DE, Wipperfürth'
+Energieversorgung Limburg Gesellschaft mit beschränkter Haftung, DE, Limburg an der Lahn
+e-werk Sachsenwald GmbH, DE, Reinbek?
+19.5
+35.4
+6.4
+10.0
+28.3
+3.6
+16.0
+31.2
+4.4
+MI-FONDS G55, DE, Frankfurt am Main¹
+100.0
+Herzo Werke GmbH, DE, Herzogenaurach
+19.9
+Name, location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+55.1
+Windpark Verwaltungsgesellschaft mbH, DE, Lützen²
+Windpark Wadern-Felsenberg GmbH, DE, Wadern²
+xtechholding GmbH, DE, Berlin6
+28.4
+100.0
+100.0
+Zagrebacke otpadne vode d.o.o., HR, Zagreb4
+48.5
+100.0
+51.0
+51.0
+50.0
+100.0
+WKH Windkraft Hochheim Management GmbH, DE, Lützen²
+WLN Wasserlabor Niederrhein GmbH, DE, Mönchengladbach6
+WPB Windpark Börnicke GmbH & Co. KG, DE, Lützen²
+WPK Windpark Kraasa GmbH & Co. KG, DE, Lützen²
+WUN Pellets GmbH, DE, Wunsiedel6
+100.0
+Zagrebacke otpadne vode-upravljanje i pogon d.o.o., HR, Zagreb6
+29.0
+20.3
+45.0
+49.0
+ZonnigBeheer B.V., NL, Lelystad¹
+100.0
+100.0
+25.1
+Zwickauer Energieversorgung GmbH, DE, Zwickau5
+100.0
+27.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 278
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava
+Windpark Eschweiler Beteiligungs GmbH, DE, Stolberg/Rhld.6
+Windpark Hof Tatschow GmbH & CO. KG, DE, Potsdam²
+Windpark Jüchen & NEW GmbH & Co. KG, DE, Jüchen²
+Windpark Jüchen & NEW Verwaltung GmbH, DE, Jüchen²
+Windpark Losheim-Britten GmbH, DE, Losheim am See6
+Windpark Lützen GmbH & Co. KG, DE, Lützen²
+MI-FONDS J55, DE, Frankfurt am Main¹
+infra fürth gmbh, DE, Fürth?
+56.4
+¹Consolidated affiliated company.. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11.. 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method).. Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+|||
+Contents Q Search
+← Back
+279
+Other
+Information
+E.ON Annual Report 2021
+Contents
+Q Search ← Back
+Other Information
+281
+Declaration of the Management Board
+282
+Independent auditor's report
+289 Independent Practitioner's Report on Non-Financial Reporting
+291
+Boards
+291
+293
+Supervisory Board (and Information on Other Directorships)
+Management Board (and Information on Other Directorships)
+294
+Summary of Financial Highlights
+296
+Financial Calendar and Imprint
+280
+E.ON Annual Report 2021
+18.7
+SWT Stadtwerke Trier Versorgungs-GmbH, DE, Trier
+20.5
+10.0
+19.9
+79.6
+MI-FONDS K55, DE, Frankfurt am Main¹
+100.0
+Nord Stream AG, CH, Zug7, 14
+15.5
+3,110.2
+442.1
+OB 2, DE, Düsseldorf¹
+100.0
+PSI Software AG, DE, Berlin'
+17.8
+89.8
+4.8
+100.0
+OB 5, DE, Düsseldorf¹
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg?
+Stadtwerke Detmold GmbH, DE, Detmold?
+10.0
+30.1
+12.5
+31.5
+Stadtwerke Hof Energie+Wasser GmbH, DE, Hof
+19.9
+22.1
+Stadtwerke Neuss Energie und Wasser GmbH, DE, Neuss'
+17.5
+88.3
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing
+Stadtwerke Wertheim GmbH, DE, Wertheim?
+19.9
+15.8
+Stromnetzgesellschaft Langenfeld mbH & Co. KG, DE, Langenfeld²
+Stromnetzgesellschaft Langenfeld Verwaltung GmbH, DE, Langenfeld²
+Stromnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann6
+Stromnetzgesellschaft Neuenhaus mbH & Co. KG, DE, Neuenhaus6
+Stromnetzgesellschaft Neuenhaus Verwaltungs-GmbH, DE, Neuenhaus
+51.0
+Windpark Büschdorf GmbH, DE, Perl²
+42.0
+100.0
+WB Wärme Berlin GmbH, DE, Schönefeld6
+51.0
+VSE-Stiftung Gemeinnützige Gesellschaft zur Förderung von Bildung,
+Erziehung, Kunst und Kultur mbH, DE, Saarbrücken²
+100.0
+WEA Schönerlinde GbR mbH Kiepsch & Bosse & Beteiligungsges.
+e.disnatur mbH, DE, Berlin2
+WGK Windenergie Großkorbetha GmbH & Co. KG, DE, Lützen²
+whp Tiefbaugesellschaft mbH & Co. KG, DE, Mönchengladbach²
+Willems Koeltechniek B.V., NL, Beek¹
+75.0
+100.0
+100.0
+70.0
+Windenergie Briesensee GmbH, DE, Neu Zauche6
+31.5
+Východoslovenská distribucná, a.s., SK, Košice¹
+100.0
+WeAre GmbH, DE, Berlin6
+20.0
+Windenergie Frehne GmbH & Co. KG, DE, Lützen
+41.0
+Východoslovenská energetika a.s., SK, Košice¹
+100.0
+weeenergie GmbH, DE, Dresden
+40.0
+Windenergie Frehne Management GmbH, DE, Lützen²
+100.0
+Východoslovenská energetika Holding a.s., SK, Košice¹,9
+49.0
+Wärmeenergie Verwaltungs GmbH, DE, Essen²
+100.0
+VSE Verteilnetz GmbH, DE, Saarbrücken¹
+49.0
+Wasserzweckverband der Gemeinde Nalbach, DE, Nalbach6
+100.0
+VSE - Windpark Merchingen GmbH & Co. KG, DE, Saarbrücken²
+100.0
+VSE - Windpark Merchingen Verwaltungs GmbH, DE, Saarbrücken²
+VSE Agentur GmbH, DE, Saarbrücken²
+100.0
+Wasserverbund Niederrhein Gesellschaft mit beschränkter Haftung,
+DE, Moers6
+Westnetz GmbH, DE, Dortmund¹
+100.0
+38.5
+Westnetz Immobilien GmbH & Co. KG, DE, Essen 1,8
+100.0
+100.0
+VSE Aktiengesellschaft, DE, Saarbrücken¹
+51.4
+Wasserversorgung Main-Taunus GmbH, DE, Frankfurt am Main6
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt6
+Wärmeversorgung Limburg GmbH, DE, Limburg an der Lahn6
+49.0
+100.0
+49.0
+VSE Call centrum s.r.o., SK, Košice²
+VSE Ekoenergia, s.r.o., SK, Košice²
+100.0
+100.0
+Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr GmbH, DE,
+Grafenwöhr6
+WET Windenergie Trampe GmbH & Co. KG, DE, Lützen²
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+100.0
+50.2
+29.0
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+50.2
+VSE NET GmbH, DE, Saarbrücken¹
+Westnetz Kommunikationsleitungen GmbH & Co. KG, DE, Essen¹
+50.0
+Weissmainkraftwerk Röhrenhof Aktiengesellschaft, DE, Bad Berneck²
+WEK Windenergie Kolkwitz GmbH & Co. KG, DE, Kolkwitz²
+Welver Netz GmbH & Co. KG, DE, Welver
+93.5
+Windpark Mallnow GmbH & Co. KG, DE, Potsdam²
+WINDPARK Mutzschen OHG, DE, Potsdam²
+100.0
+77.8
+45.0
+Windpark Naundorf OHG, DE, Potsdam²
+66.7
+WVG - Warsteiner Verbundgesellschaft mbH, DE, Warstein6
+WVL Wasserversorgung Losheim GmbH, DE, Losheim am See
+WVM Wärmeversorgung Maßbach GmbH, DE, Maẞbach6
+25.1
+49.9
+22.2
+WINDENERGIEPARK WESTKÜSTE GmbH, DE, Kaiser-Wilhelm-Koog²
+80.0
+Windpark Nohfelden-Eisen GmbH, DE, Nohfelden
+50.0
+20.3
+WVW Wasser- und Energieversorgung Kreis St. Wendel Gesellschaft
+mit beschränkter Haftung, DE, St. Wendel
+Windkraft Hochheim GmbH & Co. KG, DE, Lützen��
+90.0
+Windpark Oberthal GmbH, DE, Oberthal
+35.0
+WWS Wasserwerk Saarwellingen GmbH, DE, Saarwellingen6
+49.0
+Windkraft Jerichow-Mangelsdorf I GmbH & Co. KG, DE, Burgɓ
+25.1
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+83.3
+Windpark Paffendorf GmbH & Co. KG, DE, Bergheim
+Windpark Perl GmbH, DE, Perl6
+49.0
+WWW Wasserwerk Wadern GmbH, DE, Wadern6
+49.0
+28.1
+Kerpen6
+Windenergie Schermbeck-Rüste GmbH & Co.KG, DE, Schermbeck
+Windenergiepark Heidenrod GmbH, DE, Heidenrod6
+Windenergie Osterburg Verwaltungs GmbH, DE, Osterburg (Altmark)6
+100.0
+49.0
+Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine)6
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine)6
+Windenergie Merzig GmbH, DE, Merzig
+26.2
+24.9
+20.0
+Wärmeversorgung Mücheln GmbH, DE, Mücheln (Geiseltal)6
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld
+49.0
+40.0
+Wendelsteinbahn Gesellschaft mit beschränkter Haftung, DE,
+Brannenburg am Inn²
+100.0
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg (Altmark)6
+49.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+49.0
+E.ON Annual Report 2021
+Search
+↑
+Back
+Consolidated Financial Statements 277
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Stake (%)
+Contents
+Stromnetz Verbandsgemeinde Katzenelnbogen GmbH & Co. KG, DE,
+Katzenelnbogen
+→ Consolidated Balance Sheets
+49.0
+Stake (%)
+Name, location
+Stake (%)
+rhenag Rheinische Energie Aktiengesellschaft, DE, Cologne¹
+66.7
+SEC Chojnice Sp. z o.o, PL, Szczecin²
+100.0
+SERVICE plus Recycling GmbH, DE, Neumünster²
+100.0
+RHENAGBAU Gesellschaft mit beschränkter Haftung, DE, Cologne²
+RIWA GmbH, DE, Kempten (Allgäu)6
+100.0
+SEC Choszczno Sp. z o.o., PL, Choszczno²
+100.0
+20.0
+SEC D Sp. z o.o., PL, Szczecin²
+100.0
+SEW Solarenergie Weißenfels GmbH & Co. KG, DE, Lützen²
+Shamrock Energie GmbH, DE, Herne6
+SEC F Sp. z o.o., PL, Szczecin²
+R-KOM Regensburger Telekommunikationsverwaltungsgesellschaft
+mbH, DE, Regensburg
+24.9
+Siegener Versorgungsbetriebe GmbH, DE, Siegen6
+100.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+Name, location
+20.0
+SHW/RWE Umwelt Aqua Vodogradnja d.o.o., HR, Zagreb6
+100.0
+SEC E Sp. z o.o., PL, Szczecin²
+R-KOM Regensburger Telekommunikationsgesellschaft mbH & Co. KG,
+DE, Regensburg
+40.0
+100.0
+50.0
+Stake (%)
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Notes
+Qualitas-AMS GmbH, DE, Siegen²
+100.0
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg²
+Peridot Verwaltungs GmbH, DE, Essen²
+100.0
+QDTE GmbH, DE, Sarstedt²
+100.0
+100.0
+Peiẞenberger Kraftwerksgesellschaft mit beschränkter Haftung, DE,
+Peißenberg²
+100.0
+Rhein-Ahr-Energie Netz GmbH & Co. KG, DE, Grafschaft
+RheinEnergie AG, DE, Cologne5
+94.1
+Purena GmbH, DE, Wolfenbüttel¹
+100.0
+PEG Infrastruktur AG, CH, Zug 13
+20.0
+100.0
+100.0
+59.9
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Income
+Consolidated Financial Statements 272
+Back
+Rain Biomasse Wärmegesellschaft mbH, DE, Rain
+↑
+Contents
+E.ON Annual Report 2021
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+22.5
+100.0
+100.0
+Rheinland Westfalen Energiepartner GmbH, DE, Essen²
+Rhein-Main-Donau GmbH, DE, Landshut5
+Rhein-Sieg Netz GmbH, DE, Siegburg¹
+Search
+100.0
+Skandinaviska Kraft AB, SE, Halmstad²
+20.0
+SEC M Sp. z o.o., PL, Szczecin²
+100.0
+Solar Service S.r.l., IT, Pordenone²
+100.0
+S.C. Salgaz S.A., RO, Salonta²
+53.8
+SEC N Sp. z o.o., PL, Szczecin²
+100.0
+Solar Supply Sweden AB, SE, Karlshamn²
+100.0
+SafeRadon GmbH, DE, Munich²
+100.0
+SEC NewGrid Sp. z o.o., PL, Szczecin²
+100.0
+Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE, Heidelberg²
+Safetec-Swiss GmbH, CH, Würenlingen²
+100.0
+SEC O Sp. z o.o., PL, Szczecin²
+Sønderjysk Biogas Løgumkloster ApS, DK, Bevtoft6
+100.0
+SEC P Sp. z o.o., PL, Szczecin²
+49.0
+Sandersdorf-Brehna Netz GmbH & Co. KG, DE, Sandersdorf-Brehna
+50.0
+79.8
+Sønderjysk Biogas Bevtoft A/S, DK, Vojens
+SEC Obrót Sp. z o.o., PL, Szczecin²
+100.0
+100.0
+50.0
+SolarProjekt Mainaschaff GmbH, DE, Mainaschaff6
+Solnet d.o.o., HR, Zagreb¹
+100.0
+100.0
+Mülheim an der Ruhr¹
+RWW Rheinisch-Westfälische Wasserwerksgesellschaft mbH, DE,
+100.0
+ŠKO-ENERGO, s.r.o., CZ, Mladá Boleslav
+100.0
+SECI Sp. z o.o., PL, Szczecin²
+100.0
+42.5
+50.0
+21.0
+Skive GreenLab Biogas ApS, DK, Frederiksberg6
+ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav
+SEC H Sp. z o.o., PL, Szczecin²
+RL Beteiligungsverwaltung beschr. haft. OHG, DE, Essen¹
+100.0
+RL Besitzgesellschaft mbH, DE, Essen¹
+100.0
+SEC G Sp. z o.o., PL, Szczecin²
+100.0
+100.0
+RURENERGIE GmbH, DE, Düren
+SEC J Sp. z o.o., PL, Szczecin²
+Solar Energy Group S.p.A., IT, Pordenone¹
+100.0
+SEC L Sp. z o.o., PL, Szczecin²
+49.0
+RWE Windpark Garzweiler GmbH & Co. KG, DE, Essen
+100.0
+30.1
+Smart Energy Plattling GmbH, DE, Munich²
+SEC K Sp. z o.o., PL, Szczecin²
+25.1
+Rüthen Gasnetz GmbH & Co. KG, DE, Rüthen6
+100.0
+Smart Energy for Industry GmbH, DE, Munich²
+100.0
+100.0
+50.0
+50.0
+24.9
+100.0
+100.0
+Plin-Projekt d.o.o., HR, Nova Gradiška²
+100.0
+Npower Yorkshire Supply Limited, GB, Swindon²
+100.0
+Plus Shipping Services Limited, GB, Swindon¹
+100.0
+NRF Neue Regionale Fortbildung GmbH, DE, Halle (Saale)²
+100.0
+Portfolio EDL GmbH, DE, Helmstedt 1,8
+100.0
+Recklinghausen Netzgesellschaft mbH & Co. KG, DE, Recklinghausen
+Recklinghausen Netz-Verwaltungsgesellschaft mbH, DE,
+Recklinghausen
+49.9
+49.0
+Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee6
+ocean5 Business Software GmbH i. L., DE, Kiel6
+33.9
+REGAS Verwaltungs-GmbH, DE, Regensburg
+100.0
+Powergen Limited, GB, Coventry²
+49.0
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde6
+50.0
+RDE Verwaltungs-GmbH, DE, Veitshöchheim²
+REGAS GmbH & Co KG, DE, Regensburg6
+Powergen International, GB, Coventry²
+50.2
+20.0
+Refarmed ApS, DK, Copenhagen
+100.0
+Powergen Holdings B.V., NL, Rotterdam²
+100.0
+22.7
+Placense Ltd., IL, Caesarea6
+100.0
+Npower Northern Supply Limited, GB, Swindon²
+Npower Northern Limited, GB, Swindon¹
+Npower Limited, GB, Swindon¹
+Npower Group Limited, GB, Swindon¹
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Notes
+Npower Yorkshire Limited, GB, Swindon¹
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+Consolidated Financial Statements 271
+Back
+↑
+Search
+Contents
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+50.0
+Stake (%)
+Stake (%)
+100.0
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Veitshöchheim²
+100.0
+26.7
+PFALZWERKE AKTIENGESELLSCHAFT, DE, Ludwigshafen am Rhein
+PIS Progress Sp. z o.o., PL, Piła²
+100.0
+Name, location
+100.0
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding²
+50.0
+Perstorps Fjärrvärme AB, SE, Perstorp6
+100.0
+Stake (%)
+Name, location
+77.4
+PEEK GmbH, DE, Herrsching am Ammersee
+Oer-Erkenschwick Netz GmbH & Co. KG, DE, Oer-Erkenschwick6
+OIE Aktiengesellschaft, DE, Idar-Oberstein¹
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+mit beschränkter Haftung, DE, Neuss
+50.0
+Oskarshamn Energi AB, SE, Oskarshamn4
+50.0
+Renergie Stadt Wittlich GmbH, DE, Wittlich6
+30.0
+PreussenElektra GmbH, DE, Hanover¹
+100.0
+Ostwestfalen Netz GmbH & Co. KG, DE, Bad Driburg
+25.1
+Reservekraft AS, NO, Lillestrøm²
+100.0
+Projecta 14 GmbH, DE, Saarbrücken5
+50.0
+rEVUlution GmbH, DE, Essen²
+100.0
+OurGreenCar Sweden AB, SE, Malmö6
+Rhegio Dienstleistungen GmbH, DE, Rhede
+100.0
+PS Energy UK Limited, GB, Swindon¹
+40.0
+35.5
+REWAG REGENSBURGER ENERGIE- UND WASSERVERSORGUNG
+AG & CO KG, DE, Regensburg5
+33.3
+29.6
+pear.ai Inc., US, San Francisco
+27.5
+Propan Rheingas GmbH, DE, Brühl
+49.9
+PannonWatt Energetikai Megoldások Zrt., HU, Győr
+30.0
+Propan Rheingas GmbH & Co Kommanditgesellschaft, DE, Brühl
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+PRENU Projektgesellschaft für Rationelle Energienutzung in Neuss
+100.0
+000 E.ON Connecting Energies, RU, Moscow
+33.3
+Regionale Energiewende Beteiligung Freyung-GmbH, DE, Freyung
+100.0
+Powergen Power No. 2 Limited, GB, Coventry²
+50.0
+50.0
+OMNI Energy Kft., HU, Kiskunhalas6
+Regensburg
+100.0
+Powergen Power No. 1 Limited, GB, Coventry²
+100.0
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG, DE,
+100.0
+35.5
+49.0
+Powergen UK Investments, GB, Coventry²
+Regionetz GmbH, DE, Aachen 1,9
+Oschatz Netz Verwaltungs GmbH, DE, Oschatz²
+50.0
+RegioNetz München Verwaltungs GmbH, DE, Garching6
+50.0
+prego services GmbH, DE, Saarbrücken
+74.9
+100.0
+Oschatz Netz GmbH & Co. KG, DE, Oschatz²
+RegioNetz München GmbH & Co. KG, DE, Garching6
+100.0
+Powerhouse B.V., NL, Amsterdam¹
+32.7
+Orcan Energy AG, DE, Munich6
+49.2
+50.0
+SARIO Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt
+Würzburg KG, DE, Düsseldorf2,12
+25.1
+100.0
+40.0
+100.0
+Stadtwerke Unna GmbH, DE, Unna
+24.0
+Stadtwerke Lübz GmbH, DE, Lübz6
+25.0
+Stadtwerke Castrop-Rauxel Stromnetz Verwaltungs GmbH, DE,
+Castrop-Rauxel²
+Stadtwerke Vilshofen GmbH, DE, Vilshofen
+41.0
+100.0
+Stadtwerke Dillingen/Saar GmbH, DE, Dillingen
+49.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+Stadtwerke Meerane GmbH, DE, Meerane
+29.0
+Stadtwerke Vlotho GmbH, DE, Vlotho6
+24.9
+24.5
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+¹Consolidated affiliated company. . 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). . 3 Joint operations pursuant to IFRS 11. . 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method).. 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+Stadtwerke Lingen GmbH, DE, Lingen (Ems)4
+25.1
+40.0
+Stadtwerke Merseburg GmbH, DE, Merseburg
+20.0
+Stadtwerke Duisburg Aktiengesellschaft, DE, Duisburg
+49.0
+Stadtwerke Wadern GmbH, DE, Wadern
+Stadtwerke Waltrop Netz GmbH & Co. KG, DE, Waltrop
+49.0
+Stadtwerke Tornesch GmbH, DE, Tornesch6
+Stadtwerke Castrop-Rauxel Stromnetz GmbH & Co. KG, DE,
+Castrop-Rauxel²
+37.8
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+40.0
+Stadtwerke Bitterfeld-Wolfen GmbH, DE, Bitterfeld-Wolfen
+49.9
+Stadtwerke Husum GmbH, DE, Husum6
+Stadtwerke Kamp-Lintfort GmbH, DE, Kamp-Lintfort
+27.5
+45.0
+Stadtwerke Bernburg GmbH, DE, Bernburg (Saale)5
+25.1
+49.0
+Stadtwerke Saarlouis GmbH, DE, Saarlouis5
+25.1
+Stadtwerke Schwarzenberg GmbH, DE, Schwarzenberg/Erzgeb.6
+Consolidated Financial Statements 274
+49.0
+30.0
+20.0
+Stadtwerke Langenfeld GmbH, DE, Langenfeld
+49.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf
+33.0
+Stadtwerke Steinfurt, Gesellschaft mit beschränkter Haftung, DE,
+Steinfurt6
+Stadtwerke Blankenburg GmbH, DE, Blankenburg6
+49.0
+41.0
+Stadtwerke Bogen GmbH, DE, Bogen
+25.1
+Stadtwerke Kerpen GmbH & Co. KG, DE, Kerpen
+49.0
+Stadtwerke Siegburg GmbH & Co. KG, DE, Siegburg6
+Stadtwerke Kirn GmbH, DE, Kirn/Nahe
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Strom-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE,
+49.0
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach
+36.0
+Stadtwerke Wülfrath Netz GmbH & Co. KG, DE, Wülfrath
+Stadtwerke Zeitz GmbH, DE, Zeitz6
+25.1
+24.8
+Kerpen
+Stromnetzgesellschaft Gescher GmbH & Co. KG, DE, Gescher
+Strom-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+49.0
+49.0
+25.1
+49.0
+SEC R Sp. z o.o., PL, Szczecin²
+25.1
+Stromnetzgesellschaft Datteln GmbH & Co. KG, DE, Datteln
+Strom-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+Stromnetz Neckargemünd GmbH, DE, Neckargemünd
+Bergheim6
+Stromnetz Traunreut Verwaltungs GmbH, DE, Traunreut
+100.0
+49.0
+Stromnetz Traunreut GmbH & Co. KG, DE, Traunreut
+100.0
+49.0
+49.9
+Stromnetz Pullach GmbH, DE, Pullach im Isartal6
+STAWAG Infrastruktur Monschau GmbH & Co. KG, DE, Monschau²
+STAWAG Infrastruktur Monschau Verwaltungs GmbH, DE, Monschau²
+STAWAG Infrastruktur Simmerath GmbH & Co. KG, DE, Simmerath²
+STAWAG Infrastruktur Simmerath Verwaltungs GmbH, DE, Simmerath²
+STEAG Windpark Ullersdorf GmbH & Co. KG, DE, Jamlitz
+Stibbe Kälte-Klima-Technik GmbH & Co. KG, DE, Garbsen²
+25.1
+Stromnetz Pulheim GmbH & Co. KG, DE, Pulheim6
+100.0
+STAWAG Abwasser GmbH, DE, Aachen²
+25.1
+100.0
+Stadtwerke Goch Netze Verwaltungsgesellschaft mbH, DE, Goch
+Stadtwerke Haan GmbH, DE, Haan6
+49.0
+49.0
+25.1
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+49.0
+Stromnetz Gersthofen GmbH & Co. KG, DE, Gersthofen
+Stromnetz Günzburg GmbH & Co. KG, DE, Günzburg6
+24.5
+Stadtwerke Weißenfels GmbH, DE, Weißenfels
+20.0
+49.0
+Stake (%)
+Stake (%)
+Name, location
+Stake (%)
+Stadtwerke Weilburg GmbH, DE, Weilburg6
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+→ Notes
+Name, location
+49.0
+Stadtwerke Werl GmbH, DE, Werl6
+Stadtwerke Wesel Strom-Netzgesellschaft mbH & Co. KG, DE, Wesel6
+Stromnetzgesellschaft Bramsche mbH & Co. KG, DE, Bramsche
+25.1
+Strom-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg
+49.0
+49.0
+Stromnetz Günzburg Verwaltungs GmbH, DE, Günzburg6
+Stromnetz Hallbergmoos GmbH & Co. KG, DE, Hallbergmoos6
+Stromnetz Hallbergmoos Verwaltungs GmbH, DE, Hallbergmoos6
+Stromnetz Hofheim GmbH & Co. KG, DE, Hofheim am Taunus6
+Stromnetz Hofheim Verwaltungs GmbH, DE, Hofheim am Taunus
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach6
+49.4
+25.1
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel6
+22.7
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+49.0
+Stadtwerke Wismar GmbH, DE, Wismar
+25.0
+26.0
+49.0
+Purena Consult GmbH, DE, Wolfenbüttel²
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Stadtentwässerung Schwerte GmbH, DE, Schwerte
+48.0
+100.0
+Städtische Betriebswerke Luckenwalde GmbH, DE, Luckenwalde
+29.0
+¹Consolidated affiliated company. 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). ³Joint operations pursuant to IFRS 11. - 4 Joint ventures pursuant to IFRS 11. . 5Associated company (valued using the equity method). . 6Associated company (valued at cost for reasons of immateriality).
+'Investments pursuant to Section 313 (2) No. 5 HGB.. 8This company exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b..⁹Control by virtue of company contract. . 10 No control by virtue of company contract. . 11Significant influence via indirect investments.
+12Structured entity pursuant to IFRS 10 and 12.. 13 Affiliated company which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG. . 14Other equity investment which is held by E.ON Pension Trust e.V. on behalf of MEON Pensions GmbH & Co. KG.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Consolidated Financial Statements 273
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2021)
+Name, location
+Stake (%)
+49.9
+Stadtwerke Merzig Gesellschaft mit beschränkter Haftung, DE, Merzig5
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
+Neunburg vorm Wald6
+50.0
+Stadtwerke Dülmen Verwaltungs-GmbH, DE, Dülmen
+26.7
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE, Magdeburg6
+Städtisches Wasserwerk Eschweiler GmbH, DE, Eschweiler6
+50.0
+50.0
+36.8
+Städtische Werke Borna GmbH, DE, Borna
+Stake (%)
+Name, location
+Stake (%)
+Name, location
+Stadtwerke Dülmen Dienstleistungs- und Beteiligungs-GmbH & Co. KG,
+DE, Dülmen4
+37.5
+SEN Solarenergie Nienburg GmbH & Co. KG, DE, Lützen²
+SERVICE plus GmbH, DE, Neumünster²
+SEC C Sp. z o.o., PL, Szczecin²
+St. Clements Services Limited, GB, London
+Stadtentfalter GmbH, DE, Mönchengladbach²
+100.0
+SEC A Sp. z o.o., PL, Szczecin²
+25.1
+100.0
+SEG Solarenergie Guben Management GmbH, DE, Lützen²
+Selm Netz GmbH & Co. KG, DE, Selm6
+100.0
+Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn¹
+49.5
+SEC B Sp. z o.o., PL, Szczecin²
+49.5
+SSW - Stadtwerke St. Wendel GmbH & Co KG., DE, St. Wendel5
+SSW Stadtwerke St. Wendel Geschäftsführungsgesellschaft mbH,
+DE, St. Wendel6
+71.7
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+25.1
+SEG Solarenergie Guben GmbH & Co. KG, DE, Guben
+Stadtwerke Bergen GmbH, DE, Bergen
+0.0
+Scharbeutzer Energie- und Netzgesellschaft mbH & Co. KG, DE,
+Scharbeutz²
+SEC Region Sp. z o.o., PL, Szczecin²
+SEC Serwis Sp. z o.o., PL, Szczecin²
+100.0
+100.0
+SPG Solarpark Guben GmbH & Co. KG, DE, Lützen²
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg6
+SPX, s.r.o., SK, Zilina6
+100.0
+100.0
+100.0
+33.3
+51.0
+SEC Zgorzelec Sp. z o.o., PL, Zgorzelec²
+75.0
+SchlauTherm GmbH, DE, Saarbrücken²
+75.0
+35.0
+26.7
+24.9
+49.9
+Stadtwerke Aue - Bad Schlema GmbH, DE, Aue-Bad Schlema
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt
+Stadtwerke Barth GmbH, DE, Barth6
+24.8
+Stadtwerke Ratingen GmbH, DE, Ratingen5
+49.0
+Stadtwerke Geldern GmbH, DE, Geldern6
+35.0
+24.5
+Stadtwerke Aschersleben GmbH, DE, Aschersleben
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk6
+24.9
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+36.0
+Stadtwerke Ahaus GmbH, DE, Ahaus
+35.0
+49.0
+Stadtwerke Düren GmbH, DE, Düren¹,9
+Stadtwerke Gescher GmbH, DE, Gescher6
+Stadtwerke Reichenbach/Vogtland GmbH, DE,
+49.0
+Stadtwerke Roßlau Fernwärme GmbH, DE, Dessau-Roßlau6
+24.9
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth5
+25.1
+Stadtwerke Goch Netze GmbH & Co. KG, DE, Goch6
+25.1
+39.0
+49.0
+24.5
+Stadtwerke GmbH Bad Kreuznach, DE, Bad Kreuznach5
+24.5
+Reichenbach im Vogtland6
+36.0
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten6
+24.9
+Stadtwerke Premnitz GmbH, DE, Premnitz
+49.0
+49.0
+33.3
+Stadtwerke Oberkirch GmbH, DE, Oberkirch6
+49.0
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+24.9
+49.9
+Stadtwerke Nordfriesland GmbH, DE, Niebüll
+25.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+Ebermannstadt6
+24.9
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE, Neustadt a. Rbge.6
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE, Neustadt a. Rbge.6
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen
+51.0
+Stadtwerke Neuss Energie und Wasser Beteiligungs-GmbH, DE,
+Neuss 7,10
+24.9
+Stadtwerke Emmerich GmbH, DE, Emmerich am Rhein6
+24.9
+Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching6
+49.0
+Stadtwerke-Strom Plauen GmbH & Co. KG, DE, Plauen6
+25.2
+Stadtwerke Parchim GmbH, DE, Parchim
+39.0
+Stadtwerke Garbsen GmbH, DE, Garbsen6
+25.1
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+49.0
+Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE, Olching6
+29.0
+Stadtwerke Essen Aktiengesellschaft, DE, Essen5
+49.0
+Stadtwerk Verl Netz GmbH & Co. KG, DE, Verl
+100.0
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+Other Information 288
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Back
+↑
+Contents
+Search
+↑
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+Other Information 282
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Rendering of the independent auditor's report
+As a result of our audit, we have issued the following unqualified
+audit opinion:
+Independent auditor's report
+To E.ON SE, Essen
+Report on the audit of the consolidated financial
+statements and the combined group management
+report
+Opinions
+Other disclosures in accordance with Article 10 EU-AR
+We were elected as the auditor of the consolidated financial state-
+ments by the Annual General Meeting on 19 May 2021. We were
+engaged by the Audit and Risk Committee of the Supervisory Board
+on 13 December 2021. We have been the auditor of the consolidated
+financial statements of E.ON SE since the 2021 financial year.
+E.ON Annual Report 2021
+Search
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Lammers
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+Declaration of the Management Board
+To the best of our knowledge, we declare that, in accordance with applicable financial reporting principles, the Consolidated Financial State-
+ments give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and that the Group Management
+Report, which is combined with the management report of E.ON SE, provides a fair review of the development and performance of the busi-
+ness and the position of the E.ON Group, together with a description of the principal opportunities and risks associated with the expected
+development of the Group.
+Essen, March 7, 2022
+The Management Board
+вы
+Birnbaum
+Lani
+König
+Стасс
+Ossadnik
+Meiler
+Spieker
+Other Information 281
+We declare that the audit opinions contained in this auditor's report
+are consistent with the additional report to the Audit Committee
+according to Article 11 EU-AR (audit report).
+Assessment of local data collection and reporting processes and
+reliability of reported data
+Our auditor's report must always be read together with the audited
+consolidated financial statements and the audited combined group
+management report as well as the examined ESEF documents. The
+consolidated financial statements and combined group management
+report converted to the ESEF format - including the versions to be
+published in the German Federal Gazette [Bundesanzeiger] - are
+merely electronic renderings of the audited consolidated financial
+statements and the audited combined group management report and
+do not take their place. In particular, the ESEF report and our assur-
+ance opinion contained therein are to be used solely together with
+the examined ESEF documents made available in electronic form.
+Assessment of the overall presentation of the disclosures
+We have audited the consolidated financial statements of E.ON SE
+and its subsidiaries (the Group) comprising the consolidated state-
+ment of income, the consolidated statement of recognised income
+and expenses, the consolidated balance sheet, the consolidated
+statement of cash flows and the consolidated statement of changes
+in equity and for the financial year from 1 January to 31 December
+2021 and the notes to the financial statements, including a summary
+of significant accounting policies. In addition, we have audited the
+management report of the Company and the Group (hereinafter also
+referred to as "combined group management report") of E.ON SE for
+the financial year from 1 January to 31 December 2021.
+Analytical procedures for the evaluation of data and of the trends
+of quantitative disclosures as reported at group level by all sites
+Inspection of selected internal and external documents
+Inquiries of group-level personnel who are responsible for deter-
+mining disclosures on concepts, due diligence processes, results
+and risks, performing internal control functions and consolidating
+disclosures
+Evaluation of the design and the implementation of systems and
+processes for the collection, processing and monitoring of dis-
+closures, including data consolidation, on environmental, employee
+and social matters, respect for human rights, and combating
+corruption and bribery matters
+•
+•
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+Other Information 290
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+Back
+↑
+Search
+Inquiries of responsible employees at Group level to obtain an
+understanding of the approach to identify relevant economic
+activities in accordance with EU taxonomy.
+Contents
+Evaluation of the process for the identification of taxonomy-
+relevant economic activities and the corresponding disclosures
+in the combined separate non-financial report
+In our opinion, we obtained sufficient and appropriate evidence for
+reaching a conclusion for the assurance engagement.
+E.ON Annual Report 2021
+Wirtschaftsprüferin
+[German Public Auditor]
+Brokof
+Wirtschaftsprüfer
+[German Public Auditor]
+Glöckner
+Wirtschaftsprüfungsgesellschaft
+KPMG AG
+Frankfurt am Main, March 9, 2022
+Our assignment for the Supervisory Board of E.ON SE, Essen,
+and professional liability as described above was governed by the
+General Engagement Terms for Wirtschaftsprüfer and Wirtschafts-
+prüfungsgesellschaften (Allgemeine Auftragsbedingungen für
+Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in the
+version dated January 1, 2017 (https://www.kpmg.de/bescheini-
+gungen/lib/aab_english.pdf). By reading and using the information
+contained in this assurance report, each recipient confirms notice
+of the provisions contained therein including the limitation of our
+liability as stipulated in No. 9 and accepts the validity of the General
+Engagement Terms with respect to us.
+This assurance report is issued for purposes of the Supervisory
+Board of E.ON SE, Essen, only. We assume no responsibility with
+regard to any third parties.
+Restriction of Use/General Engagement Terms
+Based on the procedures performed and the evidence obtained,
+nothing has come to our attention that causes us to believe that the
+combined separate non-financial report of E.ON SE for the period
+from January 1 to December 31, 2021 has not been prepared, in all
+material respects, in accordance with §§ 315b, 315c in conjunction
+with §§ 289b to 289e HGB and with the EU Taxonomy Regulation
+and the supplementing Delegated Acts as well as the interpretation
+disclosed in Section "EU Taxonomy" of the combined separate
+non-financial report.
+Conclusion
+In performing this engagement, we applied the legal provisions and
+professional pronouncements regarding independence and quality
+assurance, in particular the Professional Code for German Public
+Auditors and Chartered Accountants (in Germany) and the quality
+assurance standard of the German Institute of Public Auditors
+(Institut der Wirtschaftsprüfer, IDW) regarding quality assurance
+requirements in audit practice (IDW QS 1).
+Independence and Quality Assurance on the Part
+of the Auditing Firm
+The legal representatives have to interpret vague legal concepts in
+order to be able to compile the relevant disclosures according to
+Article 8 of the EU Taxonomy Regulation. Due to the innate risk of
+diverging interpretations of vague legal concepts, the legal confor-
+mity of these interpretations and, correspondingly, our assurance
+thereof are subject to uncertainty.
+Other matter - Use of the auditor's report
+E.ON Annual Report 2021
+A risk analysis, including media research, to identify relevant
+information on E.ON SE's sustainability performance in the
+reporting period
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Wirtschaftsprüfer
+[German public auditor]
+Lurweg
+Wirtschaftsprüfer
+[German public auditor]
+Kneisel
+Wirtschaftsprüfungsgesellschaft
+KPMG AG
+Düsseldorf, 9 March 2022
+The auditor responsible for the audit is Gereon Lurweg.
+Responsible auditor
+Other Information 289
+¹Our engagement applied to the German version of the combined separate non-financial report 2021.
+This text is a translation of the Independent Assurance Report issued in German, whereas the German
+text is authoritative.
+→ Declaration of the Management Board
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Inquiries of group-level personnel who are responsible for the
+materiality analysis in order to understand the processes for
+determining material topics and respective reporting boundaries
+for E.ON SE
+•
+Within the scope of our engagement we performed, amongst others,
+the following procedures:
+whether
+any
+y matters have come to our attention that cause us to
+believe that the combined separate non-financial report of the
+Company for the period from January 1 to December 31, 2021 has
+not been prepared, in all material respects, in accordance with
+§§ 315b, 315c in conjunction with §§ 289b to 289e HGB and with
+the EU Taxonomy Regulation and the supplementing Delegated
+Acts as well as the interpretation of the wordings and terms con-
+tained in the EU Taxonomy Regulation and in the supplementing
+Delegated Acts by the legal representatives as disclosed in Section
+"EU Taxonomy" of the combined separate non-financial report.
+We do not, however, issue a separate conclusion for each disclosure.
+As the assurance procedures performed in a limited assurance
+engagement are less comprehensive than in a reasonable assurance
+engagement, the level of assurance obtained is substantially lower.
+The choice of assurance procedures is subject to the auditor's own
+judgement.
+We conducted our work in the form of a limited assurance engage-
+ment in accordance with the International Standard on Assurance
+Engagements (ISAE) 3000 (Revised): "Assurance Engagements other
+than Audits or Reviews of Historical Financial Information", published
+by IAASB. Accordingly, we have to plan and perform the assurance
+engagement in such a way that we obtain limited assurance as to
+It is our responsibility to express a conclusion on the combined
+separate non-financial report based on our work performed within
+a limited assurance engagement.
+Practitioner's Responsibility
+The EU Taxonomy Regulation and the supplementing Delegated
+Acts contain wordings and terms that are still subject to substantial
+uncertainties regarding their interpretation and for which not all
+clarifications have been published yet. Therefore, the legal represen-
+tatives have included a description of their interpretation in Section
+"EU Taxonomy" of the combined separate non-financial report. They
+are responsible for its tenability. Due to the innate risk of diverging
+interpretations of vague legal concepts, the legal conformity of these
+interpretations is subject to uncertainty.
+estimates for individual disclosures which are reasonable under the
+given circumstances. Furthermore, the legal representatives are
+responsible for the internal controls they deem necessary for the
+preparation of the combined separate non-financial report that is
+free of intended or unintended - material misstatements.
+This responsibility of the legal representatives includes the selection
+and application of appropriate methods to prepare the combined
+separate non-financial report and the use of assumptions and
+The legal representatives of the Company are responsible for the
+preparation of the combined separate non-financial report in accor-
+dance with §§ 315b, 315c in conjunction with §§ 289b to 289e
+HGB and with Article 8 of REGULATION (EU) 2020/852 OF THE
+EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 June 2020
+on the establishment of a framework to facilitate sustainable invest-
+ment, and amending Regulation (EU) 2019/2088 (further „,EU Tax-
+onomy Regulation ") and the supplementing Delegated Acts as well
+as the interpretation of the wordings and terms contained in the EU
+Taxonomy Regulation and in the supplementing Delegated Acts by
+the Company as disclosed in Section "EU Taxonomy" of the combined
+separate non-financial report.
+Management's Responsibility
+We have performed an independent limited assurance engagement
+on the combined separate non-financial report of E.ON SE and the
+E.ON Group (further "Company") for the period from January 1 to
+December 31, 2021.
+To the Supervisory Board of E.ON SE, Essen
+Limited Assurance Report of the Independent
+Auditor regarding the combined separate
+non-financial report¹
+→ Summary of Financial Highlights
+In accordance with the German legal requirements, we have not
+audited the contents of the elements of the combined group man-
+agement report set out in the "Other information" section of our
+auditor's report.
+To assess whether the implementation of the valuation model is
+methodically and mathematically appropriate, we verified the mea-
+surement carried out by the Company using our own calculations
+and analysed any deviations.
+•
+Search
+↑
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Contents
+Other Information 286
+Obtain an understanding of internal control relevant to the audit
+of the consolidated financial statements and of arrangements
+and measures (systems) relevant to the audit of the combined
+group management report in order to design audit procedures
+that are appropriate in the circumstances, but not for the purpose
+of expressing an opinion on the effectiveness of these systems.
+Evaluate the appropriateness of accounting policies used by
+management and the reasonableness of estimates made by
+management and related disclosures.
+Conclude on the appropriateness of management's use of the
+going concern basis of accounting and, based on the audit evi-
+dence obtained, whether a material uncertainty exists related to
+events or conditions that may cast significant doubt on the Group's
+ability to continue as a going concern. If we conclude that a
+material uncertainty exists, we are required to draw attention in
+the auditor's report to the related disclosures in the consolidated
+financial statements and in the combined group management
+report or, if such disclosures are inadequate, to modify our respec-
+tive opinions. Our conclusions are based on the audit evidence
+obtained up to the date of our auditor's report. However, future
+events or conditions may cause the Group to cease to be able to
+continue as a going concern.
+•
+•
+Evaluate the overall presentation, structure and content of the
+consolidated financial statements, including the disclosures, and
+whether the consolidated financial statements present the under-
+lying transactions and events in a manner that the consolidated
+financial statements give a true and fair view of the assets, liabili-
+ties, financial position and financial performance of the Group in
+compliance with IFRSS as adopted by the EU and the additional
+requirements of German commercial law pursuant to Section
+315e (1) HGB.
+•
+E.ON Annual Report 2021
+Identify and assess the risks of material misstatement of the
+consolidated financial statements and of the combined group
+management report, whether due to fraud or error, design and
+perform audit procedures responsive to those risks and obtain
+audit evidence that is sufficient and appropriate to provide a
+basis for our opinions. The risk of not detecting a material mis-
+statement resulting from fraud is higher than for one resulting
+from error, as fraud may involve collusion, forgery, intentional
+omissions, misrepresentations, or the override of internal controls.
+•
+•
+is materially inconsistent with the consolidated financial state-
+ments, with the disclosures in the combined group management
+report information audited for content or our knowledge obtained
+in the audit or
+otherwise appears to be materially misstated.
+Responsibility of the management and the
+Supervisory Board for the consolidated financial
+statements and the combined group management
+report
+Management is responsible for the preparation of the consolidated
+financial statements that comply, in all material respects, with IFRSS
+as adopted by the EU and the additional requirements of German
+commercial law pursuant to Section 315e (1) HGB and that the con-
+solidated financial statements, in compliance with these requirements,
+give a true and fair view of the assets, liabilities, financial position,
+and financial performance of the Group. In addition, management is
+responsible for such internal control as they have determined nec-
+essary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or
+error.
+In preparing the consolidated financial statements, management is
+responsible for assessing the Group's ability to continue as a going
+concern. They also have the responsibility for disclosing, as applicable,
+matters related to going concern. In addition, they are responsible
+for financial reporting based on the going concern basis of account-
+ing unless there is an intention to liquidate the Group or to cease
+operations, or there is no realistic alternative but to do so.
+Furthermore, management is responsible for the preparation of
+the combined group management report that, as a whole, provides
+an appropriate view of the Group's position and is, in all material
+respects, consistent with the consolidated financial statements,
+complies with German legal requirements, and appropriately pres-
+ents the opportunities and risks of future development. In addition,
+management is responsible for such arrangements and measures
+(systems) as they have considered necessary to enable the prepara-
+tion of a combined group management report that is in accordance
+with the applicable German legal requirements, and to be able to
+provide sufficient appropriate evidence for the assertions in the
+combined group management report.
+The Supervisory Board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consolidated
+financial statements and of the combined group management report.
+Auditor's responsibilities for the audit of the
+consolidated financial statements and of the
+combined group management report
+Our objectives are to obtain reasonable assurance about whether
+the consolidated financial statements as a whole are free from
+material misstatement, whether due to fraud or error, and whether
+the combined group management report as a whole provides an
+appropriate view of the Group's position and, in all material respects,
+is consistent with the consolidated financial statements and the
+knowledge obtained in the audit, complies with the German legal
+requirements and appropriately presents the opportunities and
+risks of future development, as well as to issue an auditor's report
+that includes our opinions on the consolidated financial statements
+and on the combined group management report.
+Reasonable assurance is a high level of assurance, but is not a guar-
+antee that an audit conducted in accordance with Section 317 HGB
+and the EU-AR and in compliance with the German generally accepted
+standards for the audit of financial statements promulgated by the
+Institut der Wirtschaftsprüfer (IDW) will always detect a material
+misstatement. Misstatements can arise from fraud or error and are
+considered material if, individually or in the aggregate, they could
+reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements and
+this combined group management report.
+We exercise professional judgement and maintain professional
+scepticism throughout the audit. We also:
+Obtain sufficient appropriate audit evidence regarding the finan-
+cial information of the entities or business activities within the
+Group to express opinions on the consolidated financial state-
+ments and on the combined group management report. We are
+responsible for the direction, supervision and performance of the
+group audit. We remain solely responsible for our opinions.
+Evaluate the consistency of the combined group management
+report with the consolidated financial statements, its conformity
+with German law, and the view of the Group's position it provides.
+Perform audit procedures on the prospective information pre-
+sented by management in the combined group management
+report. On the basis of sufficient appropriate audit evidence we
+evaluate, in particular, the significant assumptions used by man-
+agement as a basis for the prospective information and evaluate
+the
+The Supervisory Board is responsible for overseeing the process of
+preparing the ESEF documents as part of the financial reporting
+process.
+Our objective is to obtain reasonable assurance about whether the
+ESEF documents are free from material intentional or unintentional
+non-compliance with the requirements of Section 328 (1) HGB. We
+exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+•
+•
+•
+•
+Identify and assess the risks of material intentional or uninten-
+tional non-compliance with the requirements of Section 328 (1)
+HGB, design and perform assurance procedures responsive to
+those risks, and obtain assurance evidence that is sufficient and
+appropriate to provide a basis for our assurance opinion.
+Obtain an understanding of internal control relevant to the
+assurance on the ESEF documents in order to design assurance
+procedures that are appropriate in the circumstances, but not
+for the purpose of expressing an assurance opinion on the effec-
+tiveness of these controls.
+Evaluate the technical validity of the ESEF documents, i.e. whether
+the file made available containing the ESEF documents meets
+the requirements of the Delegated Regulation (EU) 2019/815, as
+amended as at the reporting date, on the technical specification
+for this electronic file.
+Evaluate whether the ESEF documents provide an XHTML ren-
+dering with content equivalent to the audited consolidated
+financial statements and the audited combined group manage-
+ment report.
+Evaluate whether the tagging of the ESEF documents with Inline
+XBRL technology (iXBRL in accordance with the requirements of
+Articles 4 and 6 of Delegated Regulation (EU) 2019/815 as
+amended as at the reporting date, enables an appropriate and
+complete machine-readable XBRL copy of the XHTML rendering
+E.ON Annual Report 2021
+Contents
+Search
+↑
+In addition, the Company's management is responsible for such
+internal control that they consider necessary to enable the prepa-
+ration of ESEF documents that are free from material intentional
+or unintentional non-compliance with the requirements of Section
+328 (1) HGB for the electronic reporting format
+In connection with our audit, our responsibility is to read the other
+information and, in so doing, to consider whether the other infor-
+mation
+The Company's management is responsible for the preparation of
+the ESEF documents including the electronic rendering of the con-
+solidated financial statements and the combined group management
+report in accordance with Section 328 (1) sentence 4 item 1 HGB
+and for the tagging of the consolidated financial statements in accor-
+dance with Section 328 (1) sentence 4 item 2 HGB.
+In our opinion, the rendering of the consolidated financial statements
+and of the combined group management report contained in the file
+made available and prepared for publication purposes complies in
+all material respects requirements of Section 328 (1) HGB for the
+electronic reporting format. Beyond this assurance opinion and our
+audit opinion on the accompanying consolidated financial statements
+and the accompanying combined group management report for the
+financial from 1 January to 31 December 2021 contained in the
+year
+"Report on the audit of the consolidated financial statements and the
+combined group management report" above, we do not express any
+assurance opinion on the information contained within these render-
+ings or on the other information contained in file identified above.
+proper derivation of the prospective information from these
+assumptions. We do not express a separate opinion on the pro-
+spective information and on the assumptions used as a basis.
+There is a substantial unavoidable risk that future events will
+differ materially from the prospective information.
+We communicate with those charged with governance regarding,
+among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies
+in internal control that we identify during our audit.
+We provide those charged with governance with a statement that
+we have complied with the relevant independence requirements
+and discuss with them all relationships and other matters that can
+reasonably be assumed to affect our independence and the safe-
+guards put in place to protect against this.
+From the matters that we have discussed with those charged with
+governance, we determine which matters were most important
+during the audit of the consolidated financial statements for the
+current reporting period and are therefore the key audit matters.
+We describe these matters in the independent auditor's report, unless
+laws or other legal provisions preclude their public disclosure.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Other Information 287
+Other statutory and legal requirements
+Report on the assurance of the electronic rendering of the consoli-
+dated financial statements and of the combined management
+report prepared for publication purposes in accordance with
+Section 317 (3a) HGB
+We have performed assurance work in accordance with Section
+317 (3a) HGB to obtain reasonable assurance on whether the
+electronic renderings of the consolidated financial statements and
+of the combined group management report contained in the
+„KA_EON_31.12.2021.zip" (SHA256-Hashwert: 4dfe66fbcede74
+d8a3a64064bac6abaab28d446988a8c8a7e1f52b0582170797)
+prepared for publication purposes (hereinafter the "ESEF documents")
+comply in all material respects with the requirements of Section
+328 (1) HGB relating to the electronic reporting format ("ESEF for-
+mat"). In accordance with the German legal requirements, this
+assurance work extends only to the conversion of the information
+contained in the consolidated financial statements and the combined
+group management report into the ESEF format and therefore
+relates neither to the information contained in these renderings nor
+to any other information contained in the file identified above.
+We conducted our assurance work on the rendering of the consoli-
+dated financial statements and of the combined group management
+report contained in the file made available and identified above in
+accordance with Section 317 (3a) HGB and the IDW Assurance
+Standard: Assurance Work on the Electronic Rendering of Financial
+Statements and Management Reports Prepared for Publication
+Purposes in Accordance with Section 317 (3a) HGB (IDW ASS 410
+(10.2021))- Our responsibility therewith is further described below.
+Our audit firm applies the IDW Standard on Quality Management 1:
+Requirements for Quality Management in Audit Firms (IDW QS 1).
+In our opinion, on the basis of the knowledge obtained in the audit,
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+As at 31 December 2021, E.ON SE accounted for provisions for
+anticipated losses totalling EUR 9.5 billion from executory sales
+contracts in the miscellaneous provisions in the consolidated finan-
+cial statements. E.ON SE additionally reported market values of
+EUR 21.7 billion in the operating receivables and other operating
+assets and market values of EUR 10.6 billion in the operating lia-
+bilities that are accounted for at fair value in accordance with the
+provisions of IFRS 9: Financial Instruments.
+A requirement for recognising provisions for onerous contracts is
+that there is a current external obligation in which an outflow of
+resources embodying economic benefit is probable and which can
+be reliably estimated. The amount of the provisions is determined
+here based on the best estimate of the amount by which the unavoid-
+able costs of fulfilling the contract will exceed the expected economic
+benefit of the contract, i.e. generally the agreed sales price in sales
+transactions. Both procurement transactions that are not accounted
+for as financial instruments in accordance with the own use regula-
+tions of IFRS 9 and the above-mentioned procurement transactions
+that are accounted for as financial instruments at their currently
+high positive market values are conducted in the E.ON Group for the
+Group's sales obligations to its electricity and gas customers. Direct
+allocation of procurement transactions to individual sales obligations
+is generally not possible for electricity and gas supply companies
+and thus also not possible in the E.ON Group.
+The recognition and measurement of the recognised provisions for
+anticipated losses from executory sales contracts - in due consid-
+eration of the various procurement transactions of the E.ON Group
+- are consequently based on complex allocations and calculations
+for the sales portfolios of the E.ON Group as well as discretionary
+estimates by management, for example of anticipated contribution
+margins from the sales portfolios.
+There is a risk for the consolidated financial statements that the
+provisions are not created or adequate provisions are not created.
+OUR AUDIT APPROACH
+As a first step, we gained an understanding of the process at the
+E.ON Group for recognising the above-mentioned provisions for
+onerous contracts.
+RISK FOR THE FINANCIAL STATEMENTS
+We subsequently assessed the design, implementation and effective-
+ness of controls that the E.ON Group has set up to ensure that the
+data for calculating the provisions for onerous contracts is collected
+in full. If IT processing systems were used in order to identify and
+collate the relevant data, we worked together with our IT specialists
+to test the effectiveness of the regulations and procedures that
+relate to a large number of IT applications and support the effective-
+ness of IT controls. We additionally assessed the design and imple-
+mentation of controls that the E.ON Group has set up in order to
+ensure that appropriate assumptions are made.
+e.g. the budget drawn up by the Board of Management and approved
+by the Supervisory Board and the medium-term planning. In addition,
+we assessed in sales markets of the E.ON Group selected on a risk-
+oriented basis the consistency of the assumptions relating to the
+sales volumes (and resulting unavoidable costs), e.g. in terms of
+possibilities for amending contracts, with the general regulatory con-
+ditions in these markets. In order to ensure that the valuation model
+used was mathematically accurate, we verified the Company's cal-
+culations on the basis of elements selected from a risk perspective.
+OUR CONCLUSIONS
+The calculations of the provisions for anticipated losses from exec-
+utory sales transactions are appropriate. Overall, the assumptions
+made by management are reasonable.
+Recoverability of goodwill
+Please refer to Section [1] in the notes to the consolidated financial
+statements for information on the accounting policies applied. Dis-
+closures on the assumptions used as well as on the amount of the
+goodwill can be found in Section [15] of the notes to the consolidated
+financial statements.
+RISK FOR THE FINANCIAL STATEMENTS
+We additionally assessed the appropriateness of the key data and
+assumptions as well as of the Company's calculation model. To this
+end, we verified the recognition and allocations of the procurement
+transactions and also discussed the expected development of mar-
+gins and earnings in the various sales portfolios of the E.ON Group
+with the people responsible for the planning. We also carried out
+reconciliation with other forecasts that are available within the Group,
+Recognition and measurement of provisions for anticipated losses
+from sales-related gas and electricity supply contracts
+Please refer to Section [1] and Section [26] in the notes to the con-
+solidated financial statements for information on the accounting
+policies applied. Comments on the development of electricity and
+gas prices in the financial year can be found in the Business Report
+in the combined group management report.
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Other Information 283
+•
+the attached consolidated financial statements comply, in all
+material respects, with IFRS, as adopted by the EU, and the
+additional requirements of German law pursuant to Section
+315e (1) HGB and, in accordance with these requirements, give
+a true and fair view of the Group's net assets and financial posi-
+tion as at 31 December 2021 and of its results of operations for
+the financial year from 1 January to 31 December 2021 and
+the accompanying combined group management report as a
+whole provides an appropriate view of the Group's position. In all
+material respects, this combined group management report is
+consistent with the consolidated financial statements, complies
+with German legal requirements and appropriately presents the
+opportunities and risks of future development.
+Pursuant to Section 322 (3) sentence 1 HGB [Handelsgesetzbuch:
+German Commercial Code], we declare that our audit has not led to
+any reservations relating to the legal compliance of the consolidated
+financial statements and the combined group management report.
+Basis for the audit opinions
+We conducted our audit of the consolidated financial statements
+and the combined group management report in accordance with
+Section 317 HGB and the EU Audit Regulation (No. 537/2014;
+hereinafter the "EU-AR"), taking into account the German generally
+accepted standards for the audit of financial statements promulgated
+by the German Institute of Public Auditors (IDW). Our responsibilities
+under those requirements and standards are further described in
+the "Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements and of the Combined Management Report"
+section of our auditor's report. We are independent of the group
+entities in accordance with the requirements of European law and
+German commercial and professional law and have fulfilled our
+other German professional obligations in compliance with these
+requirements. Furthermore, we declare in accordance with Article
+10 (2)(f) EU-AR that we have not provided any prohibited non-audit
+services referred to in Article 5 (1) EU AR. We believe that the evi-
+dence we have obtained is sufficient and appropriate to provide a
+basis for our opinions on the consolidated financial statements and
+on the combined group management report.
+Key audit matters in the audit of the consolidated financial
+statements
+Key audit matters are such matters that, in our professional judge-
+ment, were the most significant in our audit of the consolidated
+financial statements for the financial year from 1 January to
+31 December 2021. These matters were taken into account in con-
+nection with our audit of the consolidated financial statements as a
+whole and in forming our audit opinion; we do not provide a separate
+audit opinion on these matters.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+The goodwill amounts to EUR 17,408 million as at 31 December
+2021 and, at 97% of the Group equity, constitutes a significant
+proportion of the assets.
+Goodwill is tested for impairment once a year without this requiring
+a specific reason. If indications of impairment arise in the course of
+the
+year, , an ad hoc impairment test is additionally carried out during
+the
+year. The goodwill is allocated to the cash-generating units or
+groups of cash-generating units, which essentially correspond to
+the operating segments at the E.ON Group. For the goodwill impair-
+ment test, the carrying amount is compared with the recoverable
+E.ON Annual Report 2021
+Contents
+The related disclosures in the notes are appropriate.
+Other Information
+Management and/or the Supervisory Board are responsible for the
+other information.
+The other information comprises the following elements of the
+combined group management report which have not been audited:
+•
+•
+the separate combined non-financial report of the Company and
+the Group, which is referred to in the combined group manage-
+ment report and
+the combined corporate governance statement of the Company
+and the Group, which is contained in the "Corporate governance
+declaration" section of the combined group management report.
+The other information additionally includes the other parts of the
+annual report. The other information does not include the consoli-
+dated financial statements, the disclosures in the combined group
+management report audited for content or our auditor's report
+thereon.
+Our opinions on the consolidated financial statements and on the
+combined group management report do not cover the other infor-
+mation and consequently we do not express an opinion or any other
+form of assurance conclusion thereon.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+The Company's assumptions and data underlying the measurement
+are appropriate.
+Other Information 285
+The valuation model underlying the impairment test of the goodwill
+is appropriate and consistent with the applicable measurement
+principles.
+In order to take account of forecast uncertainty and the date of the
+impairment testing, which is before the financial reporting date, we
+investigated the impact of potential changes in the discount rate,
+earnings performance and the long-term growth rate on the recov-
+erable amount by calculating alternative scenarios and comparing
+them with the values stated by the Company (sensitivity analysis).
+Finally, we assessed whether the disclosures in the notes regarding
+recoverability of goodwill are appropriate.
+Search
+↑
+Back
+→ Independent Practitioner's Report on Non-Financial Reporting → Boards
+Other Information 284
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+amount of the relevant cash-generating units or groups of cash-
+generating units. If the carrying amount exceeds the recoverable
+amount, an impairment loss has to be recognised. At E.ON, the recov-
+erable amount is initially calculated as the fair value less costs to sell.
+The goodwill impairment test is complex and based on a number of
+discretionary assumptions. These include the expected business
+and earnings performance of the operating segments for generally
+the next three to five years, the long-term growth rates that are
+assumed and the discount rate that is applied.
+As a result of the impairment tests that were carried out, the Com-
+pany did not identify any need for impairment.
+There is a risk for the consolidated financial statements that impair-
+ment existing as at the reporting date was not identified. There is
+also a risk that the related disclosures in the notes are not complete.
+OUR AUDIT APPROACH
+To begin with, we gained an understanding of the process for
+assessing the recoverability of goodwill by getting explanations from
+staff of the finance organisation and by evaluating the Company's
+documentation. With the support of our valuation specialists, we
+assessed, among other things, the appropriateness of the key
+assumptions as well as of the Company's valuation model. To this
+end, we discussed and validated the expected business and earnings
+development as well as the assumed long-term growth rates with
+those responsible for the planning. We also carried out reconciliation
+with other forecasts that are available within the Group and the
+budget drawn up by the Board of Management and approved by
+the Supervisory Board and the medium-term planning that has been
+acknowledged by Supervisory Board. We additionally assessed the
+consistency of the assumptions with external market forecasts.
+We furthermore satisfied ourselves of the Company's planning
+accuracy by comparing plans from earlier financial years with the
+results actually realised and analysing any deviations. We com-
+pared the assumptions and data underlying the weighted average
+cost of capital, especially the risk-free interest rate, the market risk
+premium and the beta factor, with our own assumptions and pub-
+licly available data.
+OUR CONCLUSIONS
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+Contents
+2019
+Dividend¹
+2021
+Per share (€)
+E.ON Stock Key Figures
+Back
+↓
+Search
+Contents
+E.ON Annual Report 2021
+23
+¹Payout ratio based on adjusted net income.
+2Pending approval by the 2022 Annual Shareholders Meeting.
+2021
+2020
+2018
+0.49
+€0.43
+€0.46
+€0.492
+2017
+0.10-
+0.20-
+€0.30
+0.30 -
+0.40
+0.50
+46%
+51%
+62%
+75%
+79%
+€0.47
+0.47
+Dividend payout¹ (€ in millions)
+1,278
+Retail investors
+18%
+21%
+Institutional investors
+61%
+E.ON stock trades over the counter on OTC Pink in the United States
+in the form of American depositary receipts ("ADRS"). E.ON's ADR
+program offers U.S. investors the opportunity to acquire E.ON stock
+and hold it in the form of share certificates that are traded and settled
+like other U.S. stocks.
+E.ON stock trades in Frankfurt am Main and on other German stock
+exchanges as well as via electronic trading platforms such as Xetra.
+It is also available on stock exchanges in other European countries.
+E.ON stock is included in the DAX and other indices in Europe, such as
+the STOXX Europe 600 Utilities, MSCI World, and the S&P Europe
+350.
+E.ON Listed on Numerous Stock Exchanges and
+in Indices
+Our most recent survey at year-end 2021 shows that we have
+roughly 61 percent institutional investors, roughly 21 percent retail
+investors, about 18 percent other investors. Investors in Germany
+hold about 42 percent of our stock, those outside Germany about
+58 percent.
+2020
+24
+Shareholder Structure by Group¹
+→ Report of the Supervisory Board
+To Our Investors
+→ CEO Letter
+→ E.ON on the Capital Market
+Broad International Investor Base
+1,225
+Twelve-month high²
+12.28
+11.56
+Twelve-month low²
+8.27
+Dividend payout ratio¹
+7.60
+12.19
+Market capitalization³ (€ in billions)
+32.2
+23.9
+¹For the respective financial year; the 2021 figure represents management's dividend proposal.
+2Source: NASDAQ.
+3Based on ordinary shares outstanding at year-end.
+Year-end closing price²
+Other²
+→ Report of the Supervisory Board
+Source: NASDAQ.
+We pave the way to net zero for society.
+Sustainability
+Our resilient and future-proof portfolio is the
+foundation for dividend growth and sustain-
+able value creation.
+Dividend growth
+Four good reasons to
+invest in E.ON stock
+22
+← Back
+Q Search
+Contents
+E.ON Annual Report 2021
+e-on
+E.ON CEO
+Leonhard Birnbaum
+at E.ON Sweden
+Customer-centric energy infrastructure
+and solution growth
+Senior Project Manager
+Sustainable City
+21
+Lilly Platt
+Climate Activist
+WE has no limits
+Sustainability is not part of a strategy, it is our strategy-one that unites economic, social and
+environmental interests. Together with our customers, employees, partners and communities,
+we are making a real change. Because WE has no limits!
+The Green Deal is the EU's pledge to be carbon-neutral in all areas of life by 2050. As one of
+Europe's largest operators of energy grids and a provider of customer solutions, we are leading
+the way to enable this transformation.
+Glaciologist
+Anirudha Vijay Mahagaonkar
+optimism
+Reason for
+Kajsa Sognefur
+Project Manager
+eMobility at
+E.ON Sweden
+← Back
+Q Search
+Contents
+|||
+Peder Berne
+Our customer-centric energy infrastructure and solutions
+are connecting everyone to good energy.
+Leonhard Birnbaum,
+E.ON CEO
+¹Based on the performance index.
+Sep. Oct. Nov. Dec.
+Aug.
+Jul.
+Jun.
+May
+Dec. Jan. Feb. Mar. Apr.
+90
+100
+110-
+120-
+130-
+- E.ON - DAX¹ STOXX Utilities¹
+Percentages
+€ per share
+E.ON Stock Performance in 2021
+Dividend per Share
+Digitalization
+We will be an all-digital energy
+company, since this creates new
+business opportunities and promotes
+continuous efficiency improvements.
+E.ON Annual Report 2021
+= Contents
+Search
+↑
+To Our Investors
+Back
+→ CEO Letter
+E.ON Stock
+E.ON Stock Performs Very Well in 2021
+At the end of 2021 E.ON stock was about 35 percent above its year-
+end closing price for 2020, thereby outperforming the DAX index of
+blue-chip German stocks (+16 percent) and its European peer index,
+the EURO STOXX 600 Utilities (+4 percent). E.ON stock closed
+2021 at a price of €12.19 compared with €9.06 at year-end 2020.
+Continuous Dividend Growth
+At the 2022 Annual Shareholders Meeting on May 12, 2022,
+management will propose paying out a cash dividend of €0.49
+per share for the 2021 financial year (prior year: €0.47). Based
+on E.ON stock's year-end 2021 closing price, the dividend yield
+is 4 percent. The payout ratio (as a percentage of adjusted net
+income) would be 51 percent. Our dividend policy aims to offer
+our shareholders attractive dividend growth.
+→ E.ON on the Capital Market
+¹Percentages based on total investors identified (excluding treasury shares).
+2Includes RWE, treasury shares and other.
+Source: NASDAQ (as of December 31, 2021).
+9.06
+42%
+Contents Q Search ← Back
+|||
+E.ON Annual Report 2021
+Leo Birnbaum
+1.8262
+You, our shareholders, can count on the fact that E.ON is superbly
+positioned to meet these challenges. And despite everything, I'm
+pleased to move forward together with my Management Board team,
+our employees, and, above all, with you, our customers, partners,
+and investors.
+Our goal for 2022 is to continue to propel decarbonization in the
+three key elements of our strategy: sustainability, digitalization, and
+growth. We'll continue to achieve and reaffirm our long-term goals
+through 2026. But I'm sure it's as clear to you as it is to me that the
+turning point of recent weeks will be a significant source of stress
+for Europe's society and economy and thus of course for E.ON too.
+We can only begin to guess at the market upheavals we'll have to
+deal with as a result.
+Management Board members is therefore linked to the attainment
+of selected non-financial performance indicators.
+Shareholder Structure by Country/Region¹
+Our sustainable customer solutions will also do much to bring the
+energy transition to our customers. This segment is seizing clear
+growth opportunities and has already started to develop new busi-
+nesses beyond traditional energy sales. Alongside our Energy Infra-
+structure Solutions unit, which helps industrial and commercial
+customers decarbonize, we're now also establishing capabilities in
+green hydrogen. E.ON will build infrastructure for green gases and
+hydrogen to help decarbonize industries and processes that can't
+be electrified. This will propel the transition to new, carbon-neutral
+fuels and solutions. One thing is certain: the energy industry must
+continue to accelerate its climate protection. That's precisely what
+we're doing.
+Being a network and infrastructure company will allow E.ON to
+play a big role in enabling Europe to meet its ambitious targets for
+renewables growth. We also help our customers implement their
+projects and businesses, like connecting large data centers and
+industrial facilities. The persistent increase in the demand for addi-
+tional network connections and the great need to make distribution
+networks smart will be key drivers of additional growth: our goal for
+the next five years is to expand the regulated asset base in our power
+network business by at least 6 percent per year.
+Russia's war in Ukraine is endangering the current structure of
+Europe's energy mix. A swift and pragmatic transformation of
+Europe's energy system is both imperative and urgent. E.ON's
+restructuring and new growth strategy give us a strong foundation
+for systematically supporting this transformation. Our investments
+in the expansion and digitalization of our distribution networks will
+be the key to enabling decarbonization for Europe's power, trans-
+port, and heating sectors, while at the same time helping it achieve
+strategic independence from Russia.
+We presented our growth strategy at Capital Markets Day in Novem-
+ber. For you this means even more transparency on our long-term
+business performance through 2026 as well as certainty thanks to
+our commitment to continuous dividend growth of up to 5 percent
+per year. The first milestone is the 49 cent dividend per share that
+the Management Board and Supervisory Board will propose to the
+Annual Shareholders Meeting in May. This is E.ON's seventh dividend
+increase in a row.
+As shareholders, you also benefited from our reliability last year.
+I'm pleased to report that we actually surpassed our financial targets
+for 2021. In addition, we successfully resolved questions about
+E.ON's debt situation, the restructuring of our U.K. sales business,
+and our growth opportunities.
+→ E.ON on the Capital Market → CEO Letter
+Despite many challenges over the past twelve months, the people
+of E.ON have achieved just that. We ensured a secure energy supply
+during prolonged lockdowns amid the pandemic. We quickly rebuilt
+damaged infrastructure after devastating floods and severe storms.
+And we were and still are a safe haven for all those customers who
+were affected by the upheavals caused by higher energy costs.
+→ Report of the Supervisory Board
+To Our Investors
+→ CEO Letter
+→ E.ON on the Capital Market
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Just under a year ago I became CEO of E.ON, an operationally and structurally strong company. I promised you
+at that time to use this strength to deliver more success. I made a commitment for your company to actively
+shape the energy transition and to live up to our responsibility to provide millions of customers in Europe with
+a secure supply of climate-friendly and affordable energy.
+But Europe itself and its energy supply matter too—a sustainable, secure, and affordable supply of energy for
+our customers. Europe must and will reduce its energy dependence on Russia over the long term and will there-
+fore need to diversify its energy imports. The success of the transition to renewable energy is now of course all
+the more necessary. This makes the modernization and digitalization of power networks more necessary than
+ever. Because in the future we won't be able to afford curtailing the production of valuable green electricity
+because of network bottlenecks. Renewable energy must reach customers. That's the foundation of a stable
+and affordable energy supply.
+Ukraine is part of Europe. The solidarity that Ukrainians are now experiencing-that too is Europe. E.ON is a
+European company and therefore wants to contribute to this solidarity. After Russia's invasion, we set up donation
+accounts in cooperation with various institutions, and our operating units in neighboring countries are providing
+direct assistance. Some of our employees are helping as volunteers. What matters now is the people in Ukraine.
+Right now that's the highest priority. For E.ON too.
+Russia's war of aggression against Ukraine marks a turning point that changes Europe's security architecture.
+It affects the direction of Germany's economy. And it will have a massive impact on Germany's energy supply.
+But first and foremost, Russia's war of aggression is creating a humanitarian catastrophe in the middle of
+Europe. And it's closer than many believe. Many of us at E.ON have Ukrainian colleagues or relatives. E.ON has
+offices and facilities in Slovakia, Poland, Hungary, and Romania. In some cases, our service territories in these
+countries border Ukraine. In these regions, we're already seeing the human misery caused by this war.
+CEO Letter
+28
+To Our Investors
+→ Report of the Supervisory Board
+29
+Report of the
+Supervisory Board
+E.ON Annual Report 2021
+In early 2022 the Supervisory Board Chairman held discussions with
+investors on topics specific to the Supervisory Board at a corporate
+governance roadshow.
+In the declaration of compliance issued at the end of the year, the
+Supervisory Board and the Management Board declared that E.ON
+is in full compliance with the recommendations of the "Government
+Commission German Corporate Governance Code" dated Decem-
+ber 16, 2019, published by the Federal Ministry of Justice and
+Consumer Protection in the official section of the Federal Gazette
+(Bundesanzeiger) on March 20, 2020. The Supervisory Board and
+the Management Board also declared that E.ON has been in full
+compliance with the recommendations of the "Government Com-
+mission German Corporate Governance Code" dated December 16,
+2019, published by the Federal Ministry of Justice and Consumer
+Protection in the official section of the Federal Gazette (Bundesan-
+zeiger) on April 24, 2017, since the last declaration in March 2021.
+The current version of the declaration of compliance as well as earlier
+versions are published on the Internet at www.eon.com.
+Corporate Governance
+regular basis about the Company's health, (occupational) safety, and
+environmental performance (in particular, key accident indicators and
+the Covid-19 infection rate in the Group) as well as current customer
+numbers, customer satisfaction, and the number of apprentices.
+In addition, in the context of the Group's current operating business,
+the Supervisory Board addressed the impact of persistently low
+interest rates on E.ON, the business situation of the Group and its
+companies, national and international energy markets, as well as
+the currencies that are important to E.ON. It discussed E.ON SE's
+and the E.ON Group's asset, financial, and earnings situation, divi-
+dend policy, workforce developments, and earnings opportunities
+and risks. The Supervisory Board and the Management Board thor-
+oughly discussed the E.ON Group's medium-term plan for 2022-
+2024. The Supervisory Board was provided with information on a
+Policy and regulatory developments in countries in which E.ON is
+active constituted another key topic of the Supervisory Board's
+discussions. In the case of Germany, the Federal Network Agency
+has set the return on equity for the fourth regulatory period, and
+the European Court of Justice issued rulings on the Federal Network
+Agency's role. In the United Kingdom, the combination of sharply
+rising procurement prices and a price cap resulted in an extremely
+challenging market environment. In view of the macroeconomic sit-
+uation in Turkey and the Turkish lira's steep decline, the Supervisory
+Board discussed the impact on operations and possible responses.
+In the year under review, the Supervisory Board dealt with the
+personnel changes on the Management Board and passed the
+corresponding resolutions.
+Other Key Topics of the Supervisory Board's
+Discussions
+The sharp rise in electricity and gas prices at the start of the heating
+period and its implications for E.ON formed another key topic in
+2021. The Supervisory Board received comprehensive information
+on the causes of the supply shortages and the consequences of
+volatile prices for the Group as a whole and for individual business
+units and regions and discussed the concomitant risks and potential
+countermeasures with the Management Board.
+Sharp Rise in Commodity Prices
+The Supervisory Board closely monitored the Board of Management's
+strategy process, was regularly informed about its content and
+progress, and provided the Management Board with detailed advice.
+The Supervisory Board supports the new strategy whose three
+dimensions are sustainability, digitalization, and growth. The Super-
+visory Board approved the financial earnings and growth targets
+adopted as part of the new strategy. Furthermore, the Supervisory
+Board advised the Management Board on the communication of
+the new corporate strategy at Capital Markets Day. The Supervisory
+Board will continually receive reports about the strategy's implemen-
+tation in the individual business units and discuss them.
+Development and Communication of the New
+Corporate Strategy
+30
+→ Report of the Supervisory Board
+To Our Investors
+→ CEO Letter
+Karl-Ludwig Kley,
+Chairman of the Supervisory Board
+Dear Shareholders,
+In 2021 E.ON set its course for the future. The Management Board developed a new corporate strategy that
+focuses on key issues for the future: growth, digitalization, and sustainability. At the same time, E.ON dealt with
+significant operating challenges resulting from the ongoing Covid-19 pandemic, natural disasters in various
+countries, and volatile prices on commodity markets. The Supervisory Board would like to thank the Management
+Board and all employees for all the special efforts that were and are connected with these matters.
+In the 2021 financial year the Supervisory Board carefully performed all its duties and obligations under law,
+the Company's Articles of Association, and its own rules and procedures. It advised the Management Board in
+detail about the Company's management and continually monitored the Management Board's activities, assur-
+ing itself that the Company's management was legal, purposeful, and orderly. At four regular meetings and two
+extraordinary meetings, it addressed all issues relevant to the Company. In addition, it carried out one written
+resolution procedure. On a regular basis, the shareholder representatives and employee representatives made
+separate preparations for these meetings with the participation of one or several members of the Management
+Board. One Supervisory Board member was unable to attend one meeting in 2021. Apart from that, all members
+attended all meetings.
+The Management Board regularly provided the Supervisory Board with timely and comprehensive information
+about significant business transactions in both written and oral form. At the meetings of the full Supervisory
+Board and its committees, the Supervisory Board had sufficient opportunity to actively discuss the Management
+Board's reports, motions, and proposed resolutions. After thoroughly examining and discussing the resolutions
+proposed by the Management Board, the Supervisory Board voted on them when it was required by law, the
+Company's Articles of Association, or the Supervisory Board's rules and procedures. Furthermore, the Supervisory
+Board also met on a recurring basis without the Management Board being present.
+I'd have liked for my first letter as E.ON CEO to simply report to you with pride that we've completed a successful
+financial year. Right now, obviously, that's of secondary importance as long as war is raging in Europe and people
+fear for their lives.
+In addition, there was a regular exchange of information between the Chairman of the Supervisory Board and the
+members of the Management Board, in particular the Chairman, during the entire financial year. In the case of
+particularly pertinent issues, the Chairman of the Supervisory Board was kept informed at all times. He likewise
+maintained contact with the members of the Supervisory Board outside of board meetings.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ E.ON on the Capital Market
+In view of the restrictions due to the Covid-19 pandemic, the meetings of the Supervisory Board and its com-
+mittees largely took place virtually or in a hybrid format, with the exception of the meetings in September.
+Dear Shareholders,
+However, we'll only be able to achieve our ambitious growth targets
+with sustainable and digital business models. These topics serve as
+our compass for capital allocation and portfolio optimization. Our
+corporate governance therefore also factors in non-financial perfor-
+mance indicators that are relevant to our business. Like E.ON'S
+management model, the Management Board's compensation sys-
+tem is designed to support the implementation of E.ON's corporate
+strategy and thus its long-term success by means of sustainable,
+long-term, and value-oriented management. The compensation of
+→ E.ON on the Capital Market → CEO Letter
+EOAN GY
+EOANGY US
+EONGN.DE
+EONGn.F
+25
+→ Report of the Supervisory Board
+To Our Investors
+→ CEO Letter
+→ E.ON on the Capital Market
+International Securities Identification Number ("ISIN")
+Germany
+Security Identification Numbers
+Bloomberg: ADR over-the-counter code
+Bloomberg: Frankfurt Stock Exchange
+Reuters: Frankfurt Stock Exchange
+Reuters: Xetra
+ENAG99
+DE 000 ENAG99
+E.ON Stock Symbols and Identification Numbers
+↑
+Search
+Contents
+E.ON Annual Report 2021
+¹Percentages based on total investors identified.
+Source: NASDAQ (as of December 31, 2021).
+→ Report of the Supervisory Board
+8%
+Rest of Europe
+15%
+USA and Canada
+17%
+United Kingdom
+18%
+Germany
+Back
+Top Rankings in Sustainability Ratings
+Rest of World
+Financial Framework Created for Sustainable
+Investment
+Chief Operating Officer
+Networks
+Patrick Lammers
+Chief Operating Officer
+Commercial
+Marc Spieker
+Chief Financial Officer
+Leonhard Birnbaum
+Chief Executive Officer
+Thomas König
+26
+Contents
+Q Search
+← Back
+To Our Investors
+27
+In the 2021 financial year, E.ON again achieved top rankings in
+renowned sustainability ratings. The global non-profit environ-
+mental organization CDP (formerly known as the Carbon Disclosure
+Project) again put E.ON in its A List for environmental reporting.
+The rating is at the Leadership Level, placing E.ON among the top
+200 companies on the Climate Change A List. E.ON was recognized
+for its actions to reduce emissions, mitigate climate risks, and help
+foster a low-carbon economy. Sustainalytics, a leading global
+research and rating provider for sustainability and corporate gover-
+nance, also ranked E.ON in its Leader Group. Our website provides
+detailed and continuously up-to-date information on our sustain-
+ability ratings and rankings at www.eon.com/sustainability-ratings;
+our Sustainability Reports describes our management approach,
+progress, and initiatives relating to sustainability.
+26
+Chief Operating Officer
+Digital
+E.ON Annual Report 2021
+Victoria Ossadnik
+investment projects-with the ICMA Green Bond Principles and the
+EU Taxonomy. The EU Taxonomy Regulation defines which economic
+activities are classified as environmentally sustainable, thereby set-
+ting a Europe-wide standard for sustainable investment. We provide
+detailed information on our financing in the "Financial Situation"
+section of this report starting on page 68 →.
+Analyst estimates
+Debt is an important source of financing for the E.ON Group. We
+therefore address the interests of shareholders and debt investors
+alike. Sustainability aspects play an increasingly important role in
+many international investors' decision for or against a particular
+investment. In 2021 E.ON became the first company to fully align its
+Green Bonds Framework-green bonds are fixed-income securities
+whose issuance proceeds are used to finance sustainable
+Ongoing Investor Communications Despite
+Covid-19 Restrictions
+Our investor relations continue to be founded on four principles:
+openness, continuity, credibility, and equal treatment of all investors.
+Our mission is to provide prompt, precise, and relevant information
+at our periodic conferences and road shows worldwide. Maintaining
+regular communications and relationships is essential for good
+investor relations.
+Due to the Covid-19 pandemic, most of our investor relations
+activities in the 2021 financial year took place virtually. Despite the
+restrictions resulting from the pandemic, we were thus able to
+continue to have extensive interactions with our shareholders and
+bond holders.
+E.ON stock is rated by a large number of financial analysts from
+various investment banks and brokerage houses. The current rec-
+ommendations can be viewed at www.eon.com/analysts-estimates.
+|||
+Contents Q Search
+← Back
+The E.ON
+Management
+Board
+E.ON Annual Report 2021
+0.30
+1.80
+0.40
+0.68
+Moody's
+1.84
+Dividend payout
+Earnings per share attributable to shareholders of E.ON SE (€)
+Dividend per share4 (€)
+1.49
+0.43
+1,199
+0.47
+0.49
+650
+932
+Baa2
+1,225
+1,278
+Baa2
+Stock and E.ON SE long-term ratings
+Baa2
+0.46
+5.3
+4,762
+7.2
+Baa2
+2,853
+-2,952
+2,965
+5,313
+4,069
+3,308
+3,523
+5,515
+4,171
+12
+16
+14
+9
+15
+Economic net debt (at year-end)
+19,248
+16,580
+38,895
+40,736
+38,773
+Cash provided by operating activities of continuing operations as a percentage of sales
+9.5
+8.7
+Baa2
+3,223
+BBB
+May 10, 2023
+May 17, 2023
+August 9, 2023
+November 8, 2023
+Release of the 2022 Annual Report
+Quarterly Statement: January - March 2023
+2023 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2023
+Quarterly Statement: January - September 2023
+Journalists
+T +49 201-184-4236
+eon.com/en/about-us/media.html
+Analysts, shareholders and
+bond investors
+T +49 201-184-2806
+investorrelations@eon.com
+Photos
+Page 18: Image provided by IBM Quantum
+This Annual Report was published on March 16, 2022.
+Only the German version of this Annual Report is legally binding.
+This Annual Report contains certain forward-looking statements based on E.ON management's current assumptions and forecasts and other currently
+available information. Various known and unknown risks, uncertainties, and other factors could lead to material differences between E.ON's actual
+future results, financial situation, development, or performance and the estimates given here. E.ON assumes no liability whatsoever to update these
+forward-looking statements or to conform them to future events or developments.
+Layout & Typesetting
+Jung Produktion GmbH, Düsseldorf
+E.ON Annual Report 2021
+2021
+3,925
+March 15, 2023
+BBB
+eon.com
+E.ON SE
+Brüsseler Platz 1
+45131 Essen
+Germany
+BBB
+BBB
+BBB
+Standard & Poor's
+Employees
+Employees (at year-end)6
+41,464
+42,036
+75,659
+¹Adjusted for discontinued operations. . 2Adjusted for non-operating effects.. ³Fully includes the Renewables segment from January 1, 2018, to September 18, 2019, and innogy's business in the Czech Republic from September 18, 2019, to October 30, 2020. - 4For the respective financial year; the 2021 figure is
+management's proposed dividend.. 5Figures for 2019 were retroactively adjusted for effects from the innogy purchase-price allocation and the recognition of failed-own-use transactions.. *Core workforce does not include apprentices, working students, or interns. This figure reports full-time equivalents ("FTE").
+74,866
+69,733
+E.ON Annual Report 2021
+|||
+Contents Q Search ← Back
+May 11, 2022
+May 12, 2022
+August 10, 2022
+November 9, 2022
+296
+-
+Financial Calendar and Imprint
+Quarterly Statement: January – March 2022
+2022 Annual Shareholders Meeting
+Contact
+T +49 201-184-00
+info@eon.com
+2020
+Half-Year Financial Report: January - June 2022
+Quarterly Statement: January - September 2022
+2018
+Deborah Wilkens
+Management consultant
+E.ON Group Works Council
+Expert, SE Works Council E.ON SE and
+Elisabeth Wallbaum
+Attorney
+Dr. Karen de Segundo
+→ Szczecińska Energetyka Cieplna Sp. z o.o.²
+Chairman of the East Region Works Council, E.DIS Netz GmbH
+→ E.DIS AG²
+Deputy Chairman of the Group Works Council, E.ON SE;
+Chairman of the General Works Council, E.DIS AG;
+Chairman of the SE Works Council, E.ON SE;
+Fred Schulz
+→ KELAG-Kärntner Elektrizitäts-AG
+→ Kärntner Energieholding Beteiligungs GmbH
+Ewald Woste
+→ Jaeger Grund GmbH & Co. KG (Jaeger Gruppe, Chairman)
+→ TÜV Rheinland AG
+→ RWE Supply & Trading GmbH² (until February 28, 2021)
+→ RWE Generation SE2 (Chairman until February 28, 2021)
+→ RWE Power AG² (Chairman until February 28, 2021)
+→ RWE Renewables GmbH2 (until February 28, 2021)
+Chief Executive Officer, RWE AG (until April 30, 2021)
+Dr. Rolf Martin Schmitz
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Other Information 292
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Boards
+→ Independent Practitioner's Report on Non-Financial Reporting
+Back
+↑
+Search
+→ Encavis AG¹ (since May 27, 2021)
+Management consultant
+→ Bayernwerk AG²
+→ GASAG AG
+Nomination Committee
+Ewald Woste
+Eugen-Gheorghe Luha
+Monika Krebber
+Klaus Fröhlich
+Innovation and Sustainability Committee
+Dr. Karen de Segundo, Chairperson
+Stefan May, Deputy Chairman
+Deborah Wilkens
+Elisabeth Wallbaum
+Ulrich Grillo (since January 1, 2021)
+René Pöhls
+Fred Schulz, Deputy Chairman
+Andreas Schmitz, Chairman
+Audit and Risk Committee
+Fred Schulz
+Albert Zettl
+Ulrich Grillo
+Erich Clementi
+Dr. Karl-Ludwig Kley, Chairman
+Christoph Schmitz, Deputy Chairman
+Executive Committee
+Supervisory Board Committees
+→ Versorgungskasse Energie VVaG i. L.
+→ E.ON Pensionsfonds AG2
+→ Bayernwerk AG2
+Chairman of the Division Works Council, Bayernwerk AG;
+Chairman of the Eastern Bavaria Works Council, Bayernwerk Netz
+GmbH
+Chairman of the E.ON Group Works Council;
+Deputy Chairman of the SE Works Council, E.ON SE;
+Albert Zettl
+→ Energie Steiermark AG
+(until October 19, 2021)
+→ Deutsche Energie-Agentur GmbH (dena)
+→ GreenCom Networks AG
+Contents
+Dr. Karl-Ludwig Kley, Chairman
+Erich Clementi, Deputy Chairman
+Dr. Karen de Segundo
+E.ON Annual Report 2021
+Listed company.
+→ Ruhrfestspiele Recklinghausen GmbH
+→ AXA Konzern AG
+Member of the ver.di Federal Executive Committee; Federal Depart-
+ment Head, Financial Services, Utilities and Waste Management,
+Media, Arts, Industry and Telecommunications/IT
+Deputy Chairman of the Supervisory Board, E.ON SE;
+Christoph Schmitz
+→ Deutsche Lufthansa AG¹
+Deputy Chairman of the Supervisory Board, E.ON SE
+Erich Clementi
+→ Deutsche Lufthansa AG¹ (Chairman)
+→ Bayerische Motoren Werke AG¹ (until May 12, 2021)
+Chairman of the Supervisory Board, E.ON SE
+Dr. Karl-Ludwig Kley
+Supervisory Board (and Information on Other Directorships)
+Klaus Fröhlich
+Boards
+Other Information 291
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Boards
+→ Independent Practitioner's Report on Non-Financial Reporting
+Back
+↑
+Search
+Contents
+20195
+1,017
+4,691
+1,427
+1,505
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Former member of the Management Board, Bayerische Motoren
+Werke AG
+Ulrich Grillo
+Chief Excetutive Officer, Grillo-Werke AG
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→ Directorships/memberships in other statutory supervisory boards.
+Unless otherwise indicated, information is as of December 31, 2021, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Commerzbank AG¹ (since January 1, 2021; until April 15, 2021)
+→ Scheidt & Bachmann GmbH (Chairman)
+Attorney
+Andreas Schmitz
+→ envia Mitteldeutsche Energie AG²
+Deputy Chairman of the SE Works Council, E.ON SE;
+Deputy Chairman of the Group Works Council, E.ON SE;
+Chairman of the Group Works Council, envia Mitteldeutsche Ener-
+gie AG; Chairman of the Joint Central Works Council and the Joint
+Halle/Kabelsketal Works Council, envia Mitteldeutsche Energie AG,
+MITGAS Mitteldeutsche Gasversorgung GmbH, Mitteldeutsche
+Netzgesellschaft Strom mbH and Mitteldeutsche Netzgesellschaft
+Gas mbH
+René Pöhls
+→ EG.D a.s.2 (since January 1, 2021, formerly E.ON Distribuce a.s.)
+→ E.ON Energie a.s.²
+Deputy Chairman of the SE Works Council, E.ON SE;
+Chairman of the Association of Grassroots Organisations
+of the ECHO Energy Industry Trade Union Confederation in
+E.ON companies in the Czech Republic; Member of the
+Presidium of the Confederation of Trade Unions ECHO
+Miroslav Pelouch
+Chairwoman of the Works Council, E.ON Dél-dunántúli Áramhálózati
+Zrt.; Member of SE Works Council, E.ON SE
+Szilvia Pinczésné Márton
+→ E.ON Pensionsfonds AG²
+→ Westenergie AG²
+Deputy Chairman of the Group Works Council, E.ON SE;
+Chairman of the General Works Council, Westenergie AG/Westnetz
+GmbH; Chairman of the Works Council of the Münster Region,
+Westnetz GmbH
+Stefan May
+Chairman of the Gaz România gas trade union federation;
+Chairman of the Employees' Representatives of Romania;
+Member of the SE Works Council, E.ON SE
+Eugen-Gheorghe Luha
+Chairperson of the Works Council of the Dortmund plant,
+E.ON Energie Deutschland GmbH
+Monika Krebber
+Senior Vice President and Chief Financial Officer,
+General Electric Company (GE)
+Carolina Dybeck Happe
+→ Zinacor S.A.2
+→ Grillo Zinkoxid GmbH²
+→ Rheinmetall AG¹ (Chairman)
+²E.ON Group directorships/memberships.
+1,526
+Unless otherwise indicated, information is as of December 31, 2021, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→ Independent Practitioner's Report on Non-Financial Reporting
+Sales
+Sales and earnings
+€ in millions
+Summary of Financial Highlights¹
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+²E.ON Group directorships/memberships.
+Listed company.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→ Boards
+→ Directorships/memberships in other statutory supervisory boards.
+→ Essent N.V.2 (Chairman, until June 30, 2021)
+→ E.ON Sverige AB² (until July 31, 2021)
+→ E.ON Italia S.p.A.2 (until July 21, 2021)
+→ E.ON Energie A.S.² (Chairman, until July 31, 2021)
+(Chairman since April 21, 2021; until July 31, 2021)
+→ E.ON Energie Deutschland GmbH²
+→ E.ON Digital Technology GmbH² (Chairman, until April 11, 2021)
+Management, Marketing, Digital Transformation & IT
+Retail and Customer Solutions, Market Excellence, Energy
+Member of the Management Board since 2016
+Born in 1969 in Gießen, Germany
+Dr. Karsten Wildberger (until July 31, 2021)
+→ Nord Stream AG
+Unless otherwise indicated, information is as of December 31, 2021, or as of the date on which membership in the E.ON SE Management Board ended.
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+Other Information 294
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Net income/Net loss attributable to shareholders of E.ON SE
+Adjusted net income²
+5,305
+1,270
+1,792
+3,524
+4,180
+Net income/Net loss
+4,723
+3,776
+3,220
+2,989
+3,074
+Adjusted EBIT²
+7,889
+6,905
+5,564
+4,840
+4,955
+Adjusted EBITDA²
+77,358
+60,944
+41,284
+30,084
+37,965
+2021
+2020
+20195
+2018
+2017
+→ Westenergie AG²
+→ Directorships/memberships in other statutory supervisory boards.
+→ Süwag Energie AG2
+Member of the Management Board since 2017
+Dr. Thomas König
+→ Nord Stream AG (until March 31, 2021)
+→ BP plc.¹ (since January 1, 2021)
+Strategy & Innovation, Human Resources, Communications &
+Political Affairs, Legal, Compliance & Corporate Security,
+Corporate Culture, Corporate Audit, Sustainability, Health/
+Safety, and Environment
+Born in 1959 in Hildesheim, Germany
+Chairman of the Management Board since 2010
+Member of the Management Board since 2004
+Dr. Johannes Teyssen (until March 31, 2021)
+→ Nord Stream AG (since April 1, 2021)
+(Chairman since July 1, 2021)
+→ Georgsmarienhütte Holding GmbH
+→ innogy SE2 (Chairman, until October 31, 2021)
+Strategy & Innovation, Human Resources, Communications &
+Political Affairs, Legal, Compliance & Corporate Security,
+Corporate Audit, Sustainability, Health/Safety, and Environment,
+PreussenElektra
+Member of the Management Board since 2013
+Born in 1967 in Ludwigshafen, Germany
+Born in 1965 in Finnentrop, Germany
+since April 1, 2021)
+Management Board (and Information on Other Directorships)
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Other Information 293
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Boards
+→ Independent Practitioner's Report on Non-Financial Reporting
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+²E.ON Group directorships/memberships.
+Listed company.
+Dr.-Ing. Leonhard Birnbaum (Chairman of the Management Board
+Member of the Management Board since 2018
+Energy Networks (including Turkey)
+→ Avacon AG2 (Chairman)
+Born in 1975 in Essen, Germany
+Dr. Marc Spieker
+→ Linde plc.1
+(since May 19, 2021; Chairperson since May 24, 2021)
+→ E.ON Digital Technology GmbH²
+→ Commerzbank AG¹ (until May 18, 2021)
+Member of the Management Board since April 1, 2021
+Digital Technology, Internal Consulting
+Born in 1968 in Frankfurt/Main, Germany
+Dr. Victoria Ossadnik (since April 1,2021)
+→ ZUID NEDERLANDSE THEATERMAATSCHAPPIJ ("ZNTM") B.V.
+→ E.ON România S.R.L.2 (Chairman, since June 15, 2021)
+→ Essent N.V.2 (Chairman, since August 1, 2021)
+→ E.ON Italia S.p.A.2 (since August 31, 2021)
+→ E.ON Energie A.S.² (Chairman, since August 16, 2021)
+→ E.ON Sverige AB² (since August 1, 2021)
+(since August 1, 2021; Chairman, since August 10, 2021)
+→ E.ON Energie Deutschland GmbH2
+Member of the Management Board since August 1, 2021
+Retail and Customer Solutions, Market Excellence, Energy
+Management, Marketing, Procurement
+Patrick Lammers (since August 1, 2021)
+Born in 1964 in Rotterdam, Netherlands
+→ Essener Wirtschaftsförderungsgesellschaft mbH
+→ Stadtwerke Essen AG
+→ RheinEnergie AG
+→ E.ON Sverige AB²
+→ E.ON Hungária Zrt.² (Chairman)
+→ EG.D a.s.² (Chairman, formerly E.ON Distribuce a.s.)
+→ E.ON Česká republika s.r.o.2 (Chairman)
+→ Westenergie AG²
+→ envia Mitteldeutsche Energie AG²
+→ Bayernwerk AG² (Chairman, until December 2, 2021)
+Finance, Investor Relations, Mergers & Acquisitions, Accounting,
+Controlling, Risk Management, Tax, S4 Transformation
+1,638
+1,550
+Value measures
+2,641
+2,701
+2,760
+4,149
+4,130
+5,850
+35,198
+30,545
+58,982
+61,761
+61,359
+18,001
+15,706
+20,669
+21,384
+19,449
+9,922
+8,323
+27,572
+29,423
+28,131
+7,275
+6,516
+10,741
+10,954
+14,044
+15,261
+25,850
+24,569
+2,641
+40,511
+2,641
+2,201
+2,549
+Financial liabilities
+Other liabilities and other
+Total assets and liabilities
+10.6
+10.4
+8.3
+6.2
+7.8
+40,164
+30,883
+75,786
+75,484
+80,637
+15,786
+23,441
+22,294
+19,901
+39,122
+55,950
+54,324
+98,080
+95,385
+119,759
+6,708
+8,518
+13,248
+9,055
+17,889
+2,201
+2,041
+13,779
+4,019
+Other Information 295
+→ Independent Auditor's Report
+Financial Calendar and Imprint
+Equity
+€ in millions
+Cash flow, investments and financial ratios
+Cash provided by operating activities of continuing operations³
+Cash-effective investments
+Equity ratio (%)
+2,117
+ROCE (%)
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+2017
+Non-current assets
+Current assets
+Provisions
+Current liabilities
+Other liabilities and other
+Financial liabilities
+Provisions
+Non-current liabilities
+Minority interests without controlling influence
+Capital stock
+Asset and capital structure
+→ Boards
+Summary of Financial Highlights¹
+Back
+3,904
+11,782
+3,099
+1,563
+3,841
+3,418
+6,530
+8,904
+11,581
+17,990
+17,247
+→ Independent Practitioner's Report on Non-Financial Reporting
+22,199
+Total assets
+98,080
+↑
+55,950
+Search
+Contents
+E.ON Annual Report 2021
+¹Adjusted for discontinued operations. . 2Adjusted for non-operating effects. . ³Fully includes the Renewables segment from January 1, 2018, to September 18, 2019, and innogy's business in the Czech Republic from September 18, 2019, to October 30, 2020. - 4For the respective financial year; the 2021 figure is
+management's proposed dividend. . 5Figures for 2019 were retroactively adjusted for effects from the innogy purchase-price allocation and the recognition of failed-own-use transactions.. *Core workforce does not include apprentices, working students, or interns. This figure reports full-time equivalents ("FTE").
+54,324
+119,759
+95,385
+Dybeck Happe, Carolina
+The targets for the Supervisory Board's composition, including a
+competency profile and a diversity concept, with regard to Recom-
+mendation C.1 of the German Corporate Governance Code and
+Section 289f, Paragraph 2, Item 6 of the German Commercial Code
+and the status of their achievement are available in the Corporate
+Governance Declaration on pages 96 > and 97 →.
+Clementi, Erich
+Supervisory Board members
+Kley, Dr. Karl-Ludwig
+Contents
+Search
+↑
+The Supervisory Board is aware of no indications of conflicts of
+interest involving members of the Supervisory Board in the 2021
+financial year.
+Education and training sessions on selected operating and non-
+operating issues of E.ON's business were conducted for Supervisory
+Board members in the 2021 financial year despite the Covid-19
+pandemic. Alongside a detailed training session on network regula-
+tion in Germany, the main focus was on individual topics relating to
+the new corporate strategy. For example, the Supervisory Board
+was presented with background and details on various key topics
+in connection with digitalization, green gases, and electromobility.
+Back
+← Back
+36
+Corporate Profile
+Combined Group Management Report
+Contents Q Search ← Back
+|||
+E.ON Annual Report 2021
+Combined Group
+Management Report
+34
+།
+احدا
+Business Model
+Contents Q Search
+Fröhlich, Klaus
+36
+Grillo, Ulrich
+Supervisory Board
+Luha, Eugen-Gheorghe
+To fulfill its duties carefully and efficiently, the Supervisory Board
+has created the committees described in detail below.
+Committee Work
+32
+→ Report of the Supervisory Board
+To Our Investors
+→ CEO Letter
+→ E.ON on the Capital Market
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+2Attended as a guest.
+The Executive Committee met six times in the 2021 financial year.
+All members took part in all of the committee's meetings. At its
+meetings, the committee, in particular, did preparatory work for the
+various changes on the Management Board and, in this context, it
+also adopted a resolution on Management Board members' respec-
+tive areas of responsibility. Additionally, the Executive Committee was
+informed about the status of the progress toward the Management
+Board's targets for 2021 and dealt with the Management Board's
+compensation. Furthermore, the Executive Committee thoroughly
+discussed the new strategy and monitored the agreement with the
+German federal government and Vattenfall regarding residual
+power output rights. Finally, the Executive Committee approved the
+consortium agreement on the further development of the collabo-
+ration with RheinEnergie AG.
+¹Committee member since January 1, 2021.
+6/6
+6/6
+Zettl, Albert
+1/12
+4/4
+6/6
+Wallbaum, Elisabeth
+1/12
+4/4
+6/6
+6/6
+Schulz, Fred
+1/12
+1/12
+4/4
+The Innovation and Sustainability Committee met three times.
+One member was unable to attend one meeting. Apart from that, all
+members attended all of the committee's meetings. The matters
+addressed by the committee included court rulings on climate laws
+as well as E.ON's sustainability targets. Other subjects of discussion
+were the future of the heat-supply business along with E.ON's digi-
+talization ambitions and their progress.
+auditor that took place in 2021. In addition, there was a regular
+exchange of information between the Chairman of the Audit and
+Risk Committee and the independent auditor throughout the finan-
+cial year.
+|||
+E.ON Annual Report 2021
+Karl-Ludwig Kley
+Chairman
+4.1. my
+Best wishes,
+Essen, March 15, 2022
+The Supervisory Board
+Ulrich Grillo was elected to the Audit and Risk Committee effective
+January 1, 2021. Otherwise, there were no personnel changes on
+the Supervisory Board in 2021. Pages 291 to 292 → of this report
+provide an overview of all members of the Supervisory Board as of
+December 31, 2021.
+Personnel Changes on the Supervisory Board
+Page 293 → of this report shows E.ON SE Management Board
+members' respective areas of responsibility as of year-end 2021.
+The Supervisory Board appointed Leonhard Birnbaum as Chairman
+of the Management Board effective April 1, 2021. The Supervisory
+Board appointed Victoria Ossadnik as a member of the Management
+Board, likewise effective April 1, 2021. Ms. Ossadnik is responsible
+for the newly created board remit, digitalization, which will manage
+the activities to digitalize the Group. Furthermore, the Supervisory
+Board appointed Patrick Lammers as a member of the Management
+Board and Chief Operating Officer Commercial effective August 1,
+2021. He succeeded Karsten Wildberger, who ended his service on
+the E.ON SE Management Board at his own request effective July 31,
+2021. The Supervisory Board would like to take this opportunity to
+again thank Mr. Wildberger for his very successful work in the E.ON
+Group and wish him all the best for the future.
+Personnel Changes on the Management Board
+The Supervisory Board examined the Management Board's proposal
+for profit appropriation, which includes a cash dividend of €0.49
+per ordinary share, also taking into consideration the Company's
+liquidity and its finance and investment plans. After examining and
+weighing all arguments, the Supervisory Board agrees with the
+Management Board's proposal for profit appropriation.
+On March 15, 2022, the Supervisory Board approved the Financial
+Statements of E.ON SE prepared by the Management Board and
+the Consolidated Financial Statements. The Financial Statements
+are thus adopted. The Supervisory Board agrees with the Combined
+Group Management Report and, in particular, with its statements
+concerning the Company's future development.
+The Audit and Risk Committee met four times in 2021. All members
+attended all meetings. The committee conducted a thorough review,
+in particular of the 2020 Financial Statements of E.ON SE (prepared
+in accordance with the German Commercial Code), the E.ON Group's
+2020 Consolidated Financial Statements (prepared in accordance
+with International Financial Reporting Standards, or "IFRS"), and the
+2021 intermediate financial reports of E.ON SE. The committee
+discussed the recommendation for selecting an independent auditor
+for the 2021 financial year as well as the intermediate financial
+reports and assigned the tasks for the independent auditor's auditing
+services, established the audit priorities, determined the indepen-
+dent auditor's compensation and reviewed the independent auditor's
+qualifications as well as the quality of the independent audit, and
+verified the auditor's qualifications and independence in line with
+the recommendations of the German Corporate Governance Code.
+The committee also assured itself that the independent auditor has
+no conflicts of interest. In addition, the committee addressed other
+matters assigned to it by law, the Company's Articles of Association,
+or the Supervisory Board's rules and procedures, in particular Inter-
+nal Audit's activities and reports, accounting issues, risk manage-
+ment, transactions with related parties, and developments in the area
+of compliance. Furthermore, the committee thoroughly discussed
+the Combined Group Management Report and the proposal for profit
+appropriation and prepared the relevant recommendations for the
+Supervisory Board and reported them to the Supervisory Board.
+On the basis of the quarterly risk reports, the committee noted that
+no risks were identified that might jeopardize the existence of the
+Company or individual segments. Furthermore, the committee
+addressed in detail the Company's cybersecurity and cyber and
+data-protection risks as well as the change of the independent
+Independent Auditor's Report and the results of the preliminary
+review by the Audit and Risk Committee-E.ON SE's Financial
+Statements prepared in accordance with the German Commercial
+Code, Consolidated Financial Statements, and Combined Group
+Management Report as well as the Management Board's proposal
+for profit appropriation. The independent auditor was available for
+supplementary questions and answers. After concluding its own
+examination, the Supervisory Board determined that there are no
+objections to the findings. It therefore acknowledged and approved
+the Independent Auditor's Report. In addition, the Supervisory
+Board reviewed and approved the Separate Combined Non-Financial
+Report.
+→ Report of the Supervisory Board
+To Our Investors
+→ CEO Letter
+→ E.ON on the Capital Market
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The Supervisory Board reviewed and, at its annual-results meeting
+on March 15, 2022, thoroughly discussed—in the presence of the
+independent auditor and with knowledge of, and reference to, the
+KPMG AG, Wirtschaftsprüfungsgesellschaft, Düsseldorf, audited
+and submitted an unqualified auditor's and/or audit opinion on the
+Consolidated Financial Statements of E.ON SE prepared in accor-
+dance with IFRS, the Combined Group Management Report, and the
+Compensation Report pursuant to Section 162 of the German Stock
+Corporation Act ("AktG") for the year ended December 31, 2021.
+The IFRS Consolidated Financial Statements exempt E.ON SE from
+the requirement to publish Consolidated Financial Statements in
+accordance with German law.
+Examination and Approval of the Financial State-
+ments, Approval of the Consolidated Financial
+Statements, Proposal for Profit Appropriation for
+the Year Ended December 31, 2021
+Committee chairpersons reported the agenda and results of their
+respective committee's meetings to the full Supervisory Board on
+a regular basis. Information about the committees' composition
+and responsibilities is in the Corporate Governance Declaration on
+pages 100 to 103 →.
+33
+1/12
+6/6
+Pöhls, René
+6/6
+Schmitz, Andreas
+1/12
+4/41
+6/6
+6/6
+3/3
+5/6
+1/12
+6/6
+0/0
+2/22
+6/6
+2/22
+6/6
+1/12
+6/6
+6/6
+Nomination
+Committee
+Committee
+Innovation and
+Sustainability
+Audit and Risk
+Committee
+Executive
+Committee
+Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board and Its Committees
+31
+→ Report of the Supervisory Board
+To Our Investors
+→ E.ON on the Capital Market → CEO Letter
+0/0
+4/4
+1/12
+Schmitz, Dr. Rolf Martin
+1/12
+6/6
+Pinczésné Márton, Szilvia
+1/12
+6/6
+Pelouch, Miroslav
+3/3
+1/12
+6/6
+May, Stefan
+3/3
+6/6
+2/3
+6/6
+1/12
+6/6
+6/6
+3/3
+6/6
+3/32
+4/4
+6/6
+0/0
+3/3
+6/6
+Segundo, Dr. Karen de
+1/12
+1/12
+6/6
+Wilkens, Deborah
+Woste, Ewald
+Schmitz, Christoph
+Krebber, Monika
+36
+Power and gas sales operations as well as the new customer solu-
+tions business in Croatia and at VSEH are now reported at Customer
+Solutions' Other unit. Their network businesses continue to be
+reported at Energy Networks' East-Central Europe/Turkey unit.
+40
+38
+The agreement on the implementation of the accelerated nuclear
+phaseout after 2011 between the German federal government and
+the country's NPP operators was enacted into law and carried out
+by means of the transfer of residual power output rights, the federal
+government's payment of compensation, and Vattenfall's repayment
+of preliminary purchase prices to Preussen Elektra.
+Orano of France and the German federal government reached an
+agreement to simplify the return of French reprocessed waste. The
+agreed-on payments were made in the fourth quarter. It is foreseen
+that the reduced number of containers will be returned by 2024.
+Operations during the Covid-19 Pandemic
+E.ON's top priorities during the Covid-19 pandemic are a secure
+energy supply and the safety of employees and customers. E.ON'S
+power, gas, and heat networks, which secure the energy supply in
+large parts of Europe, continue to run stably, even under difficult
+conditions. E.ON was able to draw on previously prepared pandemic
+and crisis plans, which it implemented accordingly. This included
+updating risk assessments, adjusting rules in line with government
+regulations, and conducting timely communications to promote
+transparency and awareness regarding the Covid-19 pandemic and
+E.ON's response measures. This has made it possible to maintain all
+key functions. The most important measures included strict adher-
+ence to hygiene and social-distancing rules as well as the isolation
+of particularly sensitive work areas, such as network control centers.
+In addition, technicians who do field work on the network have
+special equipment to minimize the risk of infection.
+In addition, one of E.ON's priorities is to help employees deal with
+the pandemic's impact. Where possible, the Company has therefore
+made use of all forms of flexible working arrangements (such as
+home office and variable working hours) in order to accommodate
+employees' personal circumstances and needs. Covid-19 also made
+it necessary to adjust meeting formats. Most meetings were held
+virtually and still are. In addition, managers have paid even more
+attention than usual to their employees' well-being and, when needed,
+have pointed them toward company assistance and support ser-
+vices, such as a confidential personal counseling. Vaccination is the
+principal way to protect oneself and others from infection with the
+coronavirus. E.ON therefore offered vaccinations at many of its
+offices and facilities. Employees and their families could receive a
+first and second vaccination in the summer of 2021 and booster
+vaccinations in the winter of 2021-2022. E.ON is comprehensively
+fulfilling its social responsibility by offering a wide range of flexible
+work arrangements, hygiene plans, and vaccinations, thus making
+an important contribution toward combating the pandemic and
+safeguarding employees.
+E.ON's business and operating environment continues to be affected
+by the Covid-19 pandemic. The implications and impacts will depend
+on the emergence of new virus variants, the progress of vaccinations,
+and the effectiveness of vaccines. E.ON continuously analyses the
+risk situation resulting from the Covid-19 pandemic and, if necessary,
+will take additional measures to contain the pandemic's impact.
+There were no significant Covid-19-related implications for the
+employment situation in the E.ON Group at any time in 2021.
+→ Corporate Governance Declaration
+E.ON Propels Digitalization and Develops New Solutions
+for a Digital, Sustainable Energy World
+In September E.ON also entered into a cooperative arrangement
+with IBM Quantum in order to propel the transformation of the
+energy industry with quantum computing.
+In addition, in September E.ON acquired a majority stake in Aachen-
+based start-up gridX, the energy industry's leading provider of
+smart-grid intelligence. The company develops digital platform
+solutions that connect, control, and optimize distributed energy
+resources, such as electric cars.
+In December E.ON acquired a majority stake in software company
+envelio GmbH. envelio is a specialist in digital grid management and
+has developed an intelligent grid platform. This solution enables
+grid operators to create a digital twin of their energy grid in order to
+use real-time grid data to optimize grid planning and operations as
+well as decision-making.
+E.ON to Invest €27 Billion in the Energy Transition through 2026
+E.ON presented its growth strategy through 2026 at its Capital
+Markets Day in November. The strategy foresees continual increases
+in operating earnings as well as dividends. E.ON for the first time
+also extended its forecast timeframe from three to five years.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+Since September 2021, E.ON has deepened its collaboration with
+Microsoft and Wipro Limited to promote cloud transformation. The
+aim of the collaboration is to make IT processes more flexible, to
+increase operating efficiency, and to accelerate the development of
+new solutions and services for customers and employees.
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Risks and Chances Report
+Combined Group Management Report
+In 2019 E.ON UK plc sold roughly 60 percent of its stake in Rampion
+Renewables Ltd, which has a roughly 50-percent stake in U.K. wind
+farm operator Rampion Offshore Wind Ltd, to RWE Renewables UK
+Ltd, an RWE Group company. On December 29, 2020, an agree-
+ment was signed with RWE AG and RWE Renewables UK Ltd under
+which E.ON UK plc would transfer its remaining 40-percent stake
+to RWE Renewables UK Ltd. In view of this agreement, E.ON has
+disclosed its stake in Rampion Renewables Ltd as an asset held for
+sale since December 31, 2020. The stake was transferred on April 1,
+2021. The parties agreed not to disclose the purchase price, which
+was received at year-end 2020.
+E.ON Supports United Nations" "Decade for Ecosystem Restoration"
+E.ON is the world's first energy company to support the United
+Nations Environment Programme ("UNEP") in restoring ecosystems
+in the interest of climate protection and biodiversity. E.ON, Europe's
+largest operator of electricity distribution networks, will create
+valuable biotopes under 13,000 kilometers of high-voltage lines in
+forested areas. E.ON is a partner in UNEP, which commemorated
+World Environment Day on June 5 by proclaiming this decade to be
+the "Decade for Ecosystem Restoration."
+E.ON has many years of experience in the ecological management
+of power-line corridors and already manages 8,000 hectares of such
+corridors in an environmentally friendly way. The Group now intends
+to draw on this experience across Europe. E.ON is convinced that
+healthy and stable ecosystems play an important role in the fight
+against climate change. This is why E.ON is investing a double-digit
+million sum in the preservation of ecosystems and intends to adopt
+ecological corridor management for overhead power lines in forested
+areas Group-wide by 2026.
+Disposal of the Sales Business in Belgium
+Dutch energy supplier Essent NV and Belgian energy company
+Luminus signed an agreement in February 2021 to sell Essent's
+sales business in Belgium. Essent, a wholly owned E.ON Group sub-
+sidiary, at the time supplied more than 500,000 electricity and gas
+customers in Belgium. The sales business in Belgium was part of
+Customer Solutions' Netherlands/Belgium business unit and was
+deconsolidated in the second quarter of 2021 after the transaction
+closed.
+Consortium Agreement with RheinEnergie
+On June 29, 2021, the E.ON Group's fully consolidated subsidiary
+Westenergie concluded a new consortium agreement with Rhein-
+Energie AG. It is planned that Westenergie and RheinEnergie will
+combine their equity interests in certain municipal utilities in
+rhenag Rheinische Energie Aktiengesellschaft ("rhenag"), which is
+also a fully consolidated E.ON Group subsidiary. rhenag will con-
+tinue to be fully consolidated by Westenergie. The implementation
+of the steps envisaged in the consortium agreement is in principle
+subject to the approval of various authorities. The closing of this
+transaction is expected in mid-2022.
+E.ON Sends Assistance from across Germany to Flood Areas
+Severe storms in western Germany in July 2021 led to considerable
+damage, including to electricity and gas networks. After heavy
+flooding, E.ON employees therefore gave assistance in the area and
+worked tirelessly to restore energy service. Within a few days, the
+number of people without power in the service territory of E.ON
+subsidiary Westnetz was reduced from 200,000 to a few thousand.
+Patrick Lammers Joined E.ON SE Management Board in August
+2021
+→ Forecast Report
+At its May meeting, the E.ON SE Supervisory Board appointed
+Patrick Lammers as successor to Karsten Wildberger, who left the
+Company in late July at his own request.
+In 2021, 13 TWh of residual power output rights were acquired from
+the company that operates Krümmel nuclear power plant ("NPP")
+and transferred to Grohnde, Isar II, and Brokdorf NPP, which are
+operated by PreussenElektra GmbH. This will ensure that these NPPs
+can operate until the end of their legally mandated operating lives.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report
+→ Disclosures Regarding Takeovers
+Nuclear Power/Residual Power Output Rights
+Disposal of Stake in Rampion Renewables Ltd
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+40
+had been fully consolidated, being accounted for in the Consolidated
+Financial Statements using the equity method. Pursuant to IFRS 5,
+the VSEH Group was therefore reclassified as a disposal group
+effective December 31, 2021.
+Management Control System
+E.ON aims to further drive the sustainable path of the Company
+and the European energy transition in the digital age. Following our
+guiding principle "Connecting Everyone To Good Energy," we are
+writing the next chapter of our company history. In doing so, the
+long-term and sustainable increase in shareholder value remains
+the focus of our strategy, which is geared toward growth, sustain-
+ability, and digitalization.
+A uniform Group-wide planning and controlling system is used
+for the value-based management of our Group as a whole and its
+individual businesses. This system forms the basis for a uniform
+mindset Group-wide, while at the same time allowing targeted
+steering impulses for individual business units.
+In the past financial year, we further developed our management
+system in conjunction with the further development of our strategy.
+The revised management system has been in use since the begin-
+ning of 2022. In addition to refining our most significant financial
+performance indicators, we explicitly included non-financial key
+performance indicators in our management system. These financial
+and non-financial performance indicators are the compass for our
+decision-making processes and enable a holistic view of our perfor-
+mance.
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Key Performance Indicators in 2021
+Adjusted EBIT is an earnings figure before interest income and
+income taxes that has been adjusted to exclude non-operating
+effects. The adjustments include net book gains, certain restructur-
+ing expenses, impairment charges and reversals, the mark-to-market
+valuation of derivatives, and other non-operating earnings (see the
+explanatory information beginning on page 66 → of the Combined
+Group Management Report and in Note 35 → to the Consolidated
+Financial Statements). Adjusted net income is an earnings figure
+after interest income, income taxes, and non-controlling interests
+that has likewise been adjusted to exclude non-operating effects
+(see the explanatory information on page 67 > of the Combined
+Group Management Report). It is the main factor determining earn-
+ings per share ("EPS").
+Investments are equal to the investments expenditures shown in the
+E.ON Group's Consolidated Statements of Cash Flows. Cash-con-
+version rate is equal to operating cash flow before interest and taxes
+divided by adjusted EBITDA. The expenditures for the dismantling
+of nuclear power stations included in operating cash flow before
+interest and taxes are not factored into the cash-conversion rate.
+Debt factor is equal to economic net debt divided by adjusted
+EBITDA. Economic net debt includes net financial debt as well as
+pension and asset-retirement obligations.
+In addition to these key performance indicators, the Combined Group
+Management Report for the 2021 financial year includes other
+financial and non-financial performance indicators that were not in
+the focus of the ongoing management of our businesses in the past
+financial year.
+E.ON's Management System as of 2022
+In the past financial year, we further developed our management
+system and geared it strictly to our sustainable growth strategy.
+As of the 2022 financial year, adjusted EBITDA, investments, and
+earnings per share based on adjusted net income ("EPS") will be
+used as the most significant indicators for managing our aspired
+growth. The use of additional key financial and non-financial perfor-
+mance indicators is intended to ensure that our growth is in line with
+the various interests of our stakeholders. In particular, we focus on
+our customers, employees, shareholders, and bondholders-always
+in line with our environmental, social, and governmental responsi-
+bility as a leading international energy company.
+Many of these performance indicators have already been used in
+the past to manage our businesses. However, by using adjusted
+EBITDA instead of, as previously, adjusted EBIT, will enable more
+precise management of our targeted growth while at the same time
+focusing on the cash-effectiveness of our earnings. By including
+significant non-financial performance indicators in our management
+system, in particular sustainability indicators are now explicitly
+anchored in the ongoing management of our businesses.
+E.ON Annual Report 2021
+Special Events in the Reporting Period
+In the 2021 financial year, the most significant key performance
+indicators for the value-oriented management of our operations
+were adjusted EBIT, adjusted net income, and earnings per share
+based on net income ("EPS"), as well as investments and cash-
+conversion rate. Furthermore, debt factor was a significant key
+performance indicator in the past financial year.
+Combined Group Management Report
+Combined Group Management Report
+Back
+→ Corporate Governance Declaration
+39
+E.ON intends to increase EBITDA in its core business (that is, excluding
+PreussenElektra's soon-to-be-discontinued nuclear energy opera-
+tions) by about 4 percent annually to around €7.8 billion in 2026.
+E.ON will lay the foundation for this ambitious growth by investing
+a total of roughly €27 billion through 2026, of which about €22 bil-
+lion will go toward expanding its energy networks, which are the
+backbone of the energy transition, and €5 billion toward growing its
+customer solutions business. In addition, E.ON intends to increase
+its dividend by up to 5 percent annually through the 2026 financial
+year and its earnings per share by 8 to 10 percent annually. E.ON will
+propose a dividend of 49 cents per share for the 2021 financial year.
+E.ON intends to carry out the entire growth program while main-
+taining its strong rating and a debt factor between 4.8 and 5.2. For
+this purpose, E.ON will further optimize its portfolio, through which
+it expects to generate proceeds of roughly €2 to €4 billion in the next
+five years. Portfolio optimization may consist of the divestment of
+businesses that do not fit with the tripartite strategy of growth,
+sustainability, and digitalization as well as selected partnerships.
+2021 Employee Stock Program Launched
+E.ON has conducted several employee stock purchase programs in
+the past. E.ON continued this successful approach to employee
+involvement and retention by launching the Employee Stock Pro-
+gram ("ESP") in 2021 financial year. All employees eligible to partic-
+ipate in the ESP are offered the opportunity once a year to purchase
+discounted blocks of E.ON stock. Employees received a grant of
+€360 for each block of stock purchased under the ESP and, if they
+met certain eligibility requirements, an additional one-time grant of
+up to €360 for the stock they purchased on September 30, 2021.
+The ESP's purpose is to promote employee stock ownership and
+employee retention. Consequently, stock acquired under the ESP is
+subject to a blackout period (which ends on December 31, 2023)
+during which it cannot be sold. E.ON believes that stock ownership
+motivates employees to assume more responsibility and identify
+more closely with the company they work for.
+Westnetz GmbH Sells Shares in Stromnetzgesellschaft Essen
+In December Westnetz GmbH contractually agreed to sell 50 percent
+of its limited partnership interest in the newly established Strom-
+netzgesellschaft Essen GmbH & Co. KG to Essener Versorgungs- und
+Verkehrsgesellschaft mbH effective January 1, 2022. Technical
+assets, such as the low-voltage network of the city of Essen and
+transformer stations, will also be transferred to this company. After
+the transaction closes, these assets will be leased back to E.ON,
+which will continue to be responsible for operating the network.
+IFRS 5's criteria for these assets to be disclosed as held for sale were
+met for the first time in the third quarter of 2021.
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Reorganization of E.ON's Business in Hungary
+ÉMÁSZ DSO as well as E.ON ETI were deconsolidated in the third
+quarter of 2021 following the transaction's closure effective
+August 31, 2021.
+To further optimize E.ON's portfolio in Hungary, E.ON Hungária Zrt.
+signed an agreement with MVM on February 23, 2022, to sell
+100 percent of its stake in E.ON Áramszolgáltató Kft. ("EÁS”). EÁS
+holds a regional universal service provider ("USP") license under
+which it supplies electricity to customers in certain regions of Hun-
+gary. As of December 31, 2021, the transaction was expected
+to successfully close within the next twelve months. Pursuant to
+IFRS 5, EÁS's USP business, which is part of Customer Solutions'
+Other unit, was therefore reclassified as a disposal group effective
+December 31, 2021.
+Sale of innogy eMobility Solutions GmbH
+E.ON sold 100 percent of the shares in innogy eMobility Solutions
+GmbH ("ieMS") to Compleo Charging Solutions AG effective
+December 31, 2021. ieMS and its subsidiaries are active in eMobility,
+particulary charging stations, in Europe. Until the date of the sale,
+the company was reported in the Customer Solutions segment.
+Planned Reorganization of the ZSE and VSEH Units in Slovakia
+E.ON is in negotiations with the Slovak state on a further combina-
+tion of the businesses of Západoslovenská energetika a.s. ("ZSE")
+and Východoslovenská energetika Holding a.s. ("VSEH"). E.ON has
+a 49-percent stake in each of the two companies, and the Slovakian
+state has a 51-percent stake. VSEH, in which E.ON has control, is
+fully consolidated and is part of Energy Networks' East-Central
+Europe/Turkey unit and Customer Solutions' Other unit. The trans-
+action is expected to successfully close within the next 12 months.
+The implementation of the planned transaction would in the future
+result in the VSEH Group's business operations, which previously
+E.ON Annual Report 2021
+Contents
+Search
+↑
+In early October 2019 E.ON acquired EnBW's 27-percent stake in
+ELMŰ Nyrt. ("ELMŰ") and ÉMÁSZ Nyrt. ("ÉMÁSZ"). Subsequently,
+E.ON, MVM Magyar Villamos Művek Zrt. ("MVM," a shareholder of
+ELMŰ and ÉMÁSZ), and Opus Global Nyrt. ("Opus") signed a frame-
+work agreement. This agreement enables E.ON to give itself a bal-
+anced and optimized portfolio in Hungary that will also make it pos-
+sible to swiftly integrate innogy's operations there. The agreement
+was fully implemented effective December 16, 2021, after clear-
+ance by the relevant agencies. After the sales by E.ON, MVM holds
+100 percent of distribution operator ÉMÁSZ, ÉMÁSZ Hálózati Kft.
+("ÉMÁSZ DSO"), and a 25-percent stake in E.ON Hungária Zrt.
+(including the acquired innogy holding companies, ELMŰ Zrt. and
+ÉMÁSZ Zrt.). In addition, Opus acquired E.ON Tiszántúli Áramhálózati
+Zrt. ("E.ON ETI"). ÉMÁSZ DSO as well as E.ON ETI were, pursuant
+to IFRS, reclassified as a disposal group as of December 31, 2020;
+both were part of the Energy Networks' operations in Hungary.
+On March 1, 2021, E.ON became Europe's first corporate issuer to
+present a Green Bond Framework that is in full compliance with the
+EU Taxonomy's criteria for sustainable economic activities and with
+the draft Delegated Acts. In December E.ON published an updated
+Green Bond Framework that reflects the final version of the Dele-
+gated Acts. In late March E.ON successfully marketed a €750 million
+green bond under the new framework. It matures in October 2032
+and has a coupon of 0.6 percent.
+Strategy and Innovation
+been recorded as a liability in the amount of €1.8 billion. Effective
+March 31, 2021, it no longer existed. Accordingly, equity increased
+by €1.8 billion. Of this amount, €0.7 billion is attributable to share-
+holders of E.ON SE.
+Apprentices in Germany
+53
+Business Report
+53
+Macroeconomic and Industry Environment
+61
+Business Performance
+63
+Earnings Situation
+Gender, Age Structure, and Part-time Employment
+68
+72
+Asset Situation
+73
+79
+Business Segments
+E.ON SE's Earnings, Financial, and Asset Situation
+81
+Forecast Report
+83
+Financial Situation
+Risks and Chances Report
+52
+Geographic Structure
+E.ON Presents Green Bond Framework Aligned with the
+EU Taxonomy and Issues First Bond under It
+Management Control System
+224
+42
+42
+Strategy and Objectives
+45
+Innovation
+48
+52
+Employees
+People Strategy
+48
+Integration of innogy
+49
+Employer Attractiveness
+49
+Diversity
+51
+Workforce Figures
+48
+92
+51
+94
+This segment consists of the E.ON Group's non-strategic activities.
+This applies to the operation and dismantling of nuclear power sta-
+tions in Germany (which is managed by the PreussenElektra unit)
+and the generation business in Turkey.
+Special Events in the Reporting Period
+Changes in Segment Reporting
+Operations in Croatia and at VSEH in Slovakia consist of network
+as well as sales businesses. All of these operations were previously
+reported at Energy Networks' East-Central Europe/Turkey unit.
+E.ON's segment reporting was adjusted effective January 1, 2021.
+Energy Price Movements
+High gas and electricity prices had a significant impact on the energy
+sector in 2021. The main cause was a tight supply of natural gas
+accompanied by rising global gas demand as the economy recovered.
+In addition, wholesale prices for gas and electricity rose in response
+to higher coal and carbon prices. The fourth quarter in particular
+saw substantial price increases on wholesale markets with varying
+impacts on consumers. E.ON is active on wholesale markets and
+was also affected by price increases in different ways during the
+reporting period. The Business Report contains more information
+on these matters beginning on page 53 >.
+Corporate Bond Issued
+In mid-January 2021 E.ON issued a €600 million corporate bond
+maturing in December 2028 with a coupon of 0.1 percent.
+E.ON Annual Report 2021
+Non-Core Business
+Contents
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Risks and Chances Report
+Internal Control System for the Accounting Process
+37
+→ Corporate Governance Declaration
+Search
+This segment serves as the platform for working with E.ON's cus-
+tomers to actively shape Europe's energy transition. This includes
+supplying customers in Europe (excluding Turkey) with power, gas,
+and heat and offering products and services that enhance their
+energy efficiency and autonomy and provide other benefits. E.ON's
+activities are tailored to the individual needs of customers across
+all categories: residential, small and medium-sized enterprises, large
+commercial and industrial, sales partners, and public entities. E.ON's
+main presence in this business is in Germany, the United Kingdom,
+the Netherlands, Belgium, Sweden, Italy, the Czech Republic, Hungary,
+Croatia, Romania, Poland, and Slovakia. In addition, the Combined
+Group Management Report discloses Energy Infrastructure Solutions'
+activities in this segment for the first time. Energy Infrastructure
+Solutions engages in activities aimed at decarbonizing E.ON's com-
+mercial and industrial customers, such as sustainable city solutions
+and district heating.
+Supplementary Agreements to enviaM's Consortium Agreement
+Through subsidiaries, E.ON SE has a roughly 59-percent stake in
+enviaM AG. The other main shareholders are two municipal compa-
+nies whose aggregate stake totals around 37 percent. From 2002
+onward, a consortium agreement gave these municipal shareholders
+a put option that could be exercised in whole or in part. Pursuant to
+IAS 32, E.ON SE recorded this put option as a liability in its Consoli-
+dated Financial Statements. In March 2021, a supplementary
+agreement to the consortium agreement was concluded that stipu-
+lates the put option's cancellation. The standstill obligation had
+This segment consists of E.ON'S
+power and gas distribution networks
+and related activities. It is subdivided into three regional markets:
+Germany, Sweden, and East-Central Europe/Turkey (which consists
+of the Czech Republic, Hungary, Romania, Poland, Croatia, Slovakia,
+and the stake in Enerjisa Enerji in Turkey, which is accounted for
+using the equity method). This segment's main tasks include oper-
+ating its power and gas networks safely and reliably, carrying out all
+necessary maintenance and repairs, and expanding its power and
+gas networks, which frequently involves adding customer connec-
+tions and the connection of renewable energy generation assets.
+Corporate Governance Declaration
+96
+Customer Solutions
+35
+E.ON Annual Report 2021
+Contents
+Search
+Back
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+↑
+Risks and Chances Report
+→ Corporate Governance Declaration
+36
+Corporate Profile
+Business Model
+E.ON is an investor-owned energy company with approximately
+72,000 employees led by Corporate Functions in Essen. The
+Group's core business is divided into two operating segments:
+Energy Networks and Customer Solutions. Non-strategic opera-
+tions are reported under Non-Core Business; corporate functions
+and equity interests managed directly by E.ON SE are reported
+under Corporate Functions/Other.
+Corporate Functions
+Corporate Functions' main task is to lead the E.ON Group. This
+involves charting E.ON's strategic course and managing and funding
+its existing business portfolio. Corporate Functions' tasks include
+optimizing E.ON's overall business across countries and markets from
+a financial, strategic, and risk perspective and conducting stake-
+holder management.
+Disclosures Regarding Takeovers
+Energy Networks
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report → Forecast Report
+Combined Group Management Report
+45
+We believe that E.ON's entire Customer Solutions portfolio is thus
+superbly positioned to propel the energy transition and satisfy the
+increasing demand for sustainable solutions. All of this segment's
+business units will benefit from the rapidly growing demand for
+green power and gas across all sectors (households, transportation,
+buildings, and industry).
+In the short term, E.ON will partner with its customers to move
+forward with hydrogen projects that are already under way in geo-
+graphically dense industrial regions-like the Ruhr region-and,
+in the medium term, scale up the business unit internationally. Our
+international footprint in Germany, the Netherlands, the United
+Kingdom, and Sweden gives us an optimal platform for future hydro-
+gen clusters in the North Sea region.
+Back
+→ Disclosures Regarding Takeovers → Corporate Governance Declaration
+↑
+E.ON's existing gas networks will continue to play an important role
+in the transformation of the energy system. In addition, E.ON will
+actively enter the hydrogen business and, where possible, make its
+existing gas networks hydrogen-ready. These investments will help
+pave the way toward climate-neutral gas networks.
+Contents
+E.ON Annual Report 2021
+The activities of Energy Infrastructure Solutions ("EIS") encompass
+innovative energy solutions that help cities, municipalities, and
+industrial customers achieve their climate targets cost-effectively.
+E.ON aims for its EIS business unit to achieve additional growth and
+become the preferred transformation partner for sustainable, inno-
+vative energy solutions. EIS's leading market position across Europe
+enables it to build on a strong customer base and also leverage its
+regional presence as a foundation for additional investment-driven
+growth. Its core business consists of a portfolio of solutions for
+embedded power, heat, and cooling plants as well as solutions for
+energy efficiency, decarbonization, and other energy services. E.ON
+sees green hydrogen in particular as a key strategic growth oppor-
+tunity in this space over the medium term and will establish a
+hydrogen business unit to meet industrial customers' increasing
+demand for green gases in the future. E.ON assumes that by 2040
+the demand for hydrogen will extend across the industrial, mobility,
+heat, and electricity sectors and that hydrogen will thus play an
+essential role in the climate-neutral energy system of the future.
+infrastructure is therefore a key strategic priority. The eMobility
+market is undergoing a transformation and is characterized by
+robust growth: at least 15 million electric vehicles are expected to
+be registered in Germany by 2030. Charging infrastructure, by con-
+trast, is expanding at a much slower pace. E.ON therefore believes
+the near term is the time for rapid growth activities, because all
+attractive locations for charging infrastructure will presumably have
+been allocated in the years ahead. E.ON's objective is to enlarge its
+current market position and become one of Europe's leading opera-
+tors of charging infrastructure by 2030.
+Power and gas retail sales is a scalable business model with low
+capital requirements and focuses on private households and small
+and medium-sized enterprises. E.ON's clear objective for this busi-
+ness is to retain its roughly 51 million customers across Europe
+(including customers in Turkey and at ZSE in Slovakia) in the long
+term by offering them sustainable energy solutions and thus reduc-
+ing their environmental footprint. To achieve this objective at com-
+petitive costs, E.ON systematically pursues digitalization-which
+promotes optimal operating efficiency and superior customer satis-
+faction and loyalty (customer relationship management)—as well as
+cross-selling opportunities. E.ON's solutions business focuses pri-
+marily on the Future Energy Home ("FEH"), a portfolio of distributed
+energy systems for households. They include self-generation of
+green solar power, energy storage, heat, and eMobility solutions,
+which enable this business to actively seize the aforementioned
+cross-selling opportunities. The installation of suitable eMobility
+Earnings Growth in Customer Solutions Segment
+E.ON's Customer Solutions segment focuses on energy sales, the
+customer solutions business, and distributed Energy Infrastructure
+Solutions ("EIS").
+This is among the reasons why E.ON is one of Europe's leading DSOs.
+E.ON has a regulated asset base ("RAB") of €35 billion, and its reg-
+ulated business generates a large share of its EBITDA. E.ON's strate-
+gic objective is therefore to remain Europe's leading energy and
+infrastructure partner. To achieve this objective, E.ON will increase
+its annual network investments significantly between 2022 and
+2026. The Forecast Report contains details about planned invest-
+ments starting on page 81 →.
+E.ON's proven capabilities along with the above-average efficiency
+of its network operations will enable it to lead the necessary trans-
+formation of the energy system. Eight of E.ON's nine distribution
+system operators ("DSOS") in Germany have an efficiency rating of
+100 percent, with three of them earning a super efficiency bonus.
+All E.ON DSOs surpass the industry average.
+energy transition alone therefore represents an unprecedented
+growth opportunity for E.ON: for example, already around 20 percent
+of Europe's renewables facilities are connected to E.ON's power
+networks, which is a disproportionate density considering the total
+area of E.ON's network territory. Consequently, this growth will be
+accompanied by the suitable and sensible digitalization of the net-
+work business, because this business represents both the core and
+key driver of E.ON's growth strategy and the potential to generate
+additional profits amid the energy transition. The use of smart-grid
+technology like smart meters and smart transformer stations, the
+integration of external data, the standardization of construction and
+operating processes, and the use of a central data platform all offer
+considerable potential. E.ON will acquire the capability to monitor
+and control its distribution networks across all voltage levels in order
+to optimize their operation. Sensors and smart metering and control
+technology will enable real-time control of distributed generation
+and consumption.
+44
+Finance Strategy
+→ Corporate Governance Declaration
+Search
+The section of the Combined Group Management Report entitled
+"Financial Situation" contains explanatory information about E.ON's
+finance strategy.
+46
+The section of the Combined Group Management Report entitled
+"Employees" contains explanatory information about the main
+components of E.ON's people strategy as well as statements about
+diversity at E.ON.
+Risks and Chances Report
+Together, these utilities represented over 82 million customers
+from more than 40 countries in 2021. Participation in the network
+enables E.ON to gain access to startups and their technological
+solutions for propelling the energy transition and also to benefit from
+extensive experience sharing with other energy utilities from around
+the world. The program focuses on pilot projects with startups as
+well as the deployment and scale-up of solutions that can be imple-
+mented significantly faster and more efficiently together. E.ON
+successfully implemented two projects from this program in 2021.
+It also collaborated with Irish energy supplier ESB.
+Advancing the Energy Transition with International Partners
+Free Electrons is the world's leading energy accelerator program.
+By facilitating collaboration between the most successful interna-
+tional startups and leading utilities, Free Electrons aims to provide
+innovative solutions for a decarbonized, digital, and distributed
+energy system. Through this network, E.ON works closely with util-
+ities from North America, Europe, the Middle East, and Asia-Pacific.
+The portfolio's acquisitions in 2021 included a majority stake in
+Aachen-based startup gridX, whose solutions will be integrated
+into E.ON's network and customer-solutions operations. FEV's suc-
+cessful development also included completing the financing rounds
+of several startups (including ev.energy, Bidgely, and Buildots) as
+well as successful exits (including Holobuilder and Waycare). These
+divestments unlocked value and will enable the startups to maxi-
+mize their potential with new strategic partners.
+E.ON works with leading startups worldwide through FEV. The aim
+is to promote the continuous development of additional new busi-
+ness models. Founded in 2020, FEV is recognized as one of the
+largest and strongest corporate venture capitalist funds focused on
+the energy transition. Climate 50, for example, ranked it the world's
+second most influential fund of this type. FEV invests in companies
+with the potential to accelerate the transformation of the energy
+value chain toward zero carbon and provide solutions for E.ON in
+energy infrastructure and customer solutions. FEV's portfolio cur-
+rently contains more than 50 startups.
+Strategic Investments in Startups Ensure Access to New Technolo-
+gies
+→ Corporate Governance Declaration
+Risks and Chances Report
+Combined Group Management Report
+→ Disclosures Regarding Takeovers
+→ Business Report → Forecast Report
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Long-term Partnerships Increase the Pace of Innovation
+E.ON views the energy transition as an engine for innovation and
+works with in-house and external partners to carry out its innovation
+projects from both a technological and commercial standpoint.
+These partnerships are a key factor in E.ON's successful deployment
+of innovations. They encompass strategic investments in globally
+leading startups through Future Energy Ventures ("FEV"), our ven-
+ture capital investment platform; collaboration with these startups;
+and alliances with top global energy companies, large companies in
+other industries, and technology corporations.
+In 2021 E.ON entered into another partnership by joining the Fore-
+sight Academy, a cross-sector initiative to promote research into
+the future. The academy brings together leading multinational
+companies like Audi, Adidas, SAP, Deutsche Telekom, and Swiss Re
+to collaborate in exploring future customer requirements, social
+developments, technologies, and other topics from a variety of per-
+spectives.
+research projects in energy and sustainability research, energy sys-
+tem analysis and optimization, smart grids, energy storage, energy
+efficiency, electrification, and digitalization. Over this period, E.ON
+will provide at least €10 million to fund joint research projects as
+well as up to €0.5 million annually for non-profit projects. Since its
+foundation in 2006, the ERC has set standards for interdisciplinary
+and networked energy research. The results of many E.ON research
+projects are made available to the general public as well.
+Among the aforementioned collaborations, the Company's flagship
+partnership is with the E.ON Energy Research Center ("ERC") at
+RWTH Aachen University. In 2021 the partnership was extended
+for another five years, during which E.ON will particularly support
+Research Generates Knowledge, Knowledge Fuels Innovation
+E.ON's partnerships with numerous universities and scientific insti-
+tutions in Germany and around the world yield research findings that
+generate more knowledge about the functionality of new technol-
+ogies for the sustainable energy system. E.ON uses this knowledge
+to develop innovative solutions for its energy infrastructure and
+customer solutions.
+Sustainability guides everything E.ON does, including the develop-
+ment of innovations. Tomorrow's decarbonized, digital, and distrib-
+uted energy system will be founded on innovative technologies and
+new digital business models. E.ON has chosen to adopt a 360-degree
+approach to innovation to achieve its objectives en route to a sus-
+tainable
+energy world. This approach focuses on developing inno-
+vations in-house as well as collaborating with partners worldwide.
+E.ON has R&D, corporate, and startup partnerships with a wide
+range of universities, institutions and companies, startups and
+thought leaders. Its innovation approach is based on the belief that
+"research generates knowledge," "knowledge fuels innovation," and
+"innovation propels growth." This is explained in more detail below.
+Innovations Propel the Energy Transition
+Innovation
+People Strategy
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Sustainability is the centerpiece of E.ON's strategy and the touch-
+stone for all its future actions. One of E.ON's objectives is to propel
+Europe's green energy transition and to help it decarbonize all the
+way to climate neutrality. E.ON considers sustainability an opportu-
+nity; most of E.ON's business is already sustainable. And E.ON is
+equally sustainable as an organization. Consequently, our strategy
+sets ambitious sustainability targets. E.ON aims for its Scope 1 and
+Scope 2 emissions-the direct emissions that it can influence-to be
+Sustainability
+The transition toward a new, climate-neutral, and distributed
+energy world is accelerating and will also spur a decade of growth
+for the entire energy sector. Being an energy company with about
+51 million customers in Europe (including customers in Turkey and
+at ZSE in Slovakia) will enable E.ON to benefit from this transition
+and simultaneously to play a key role in shaping Europe's decarbon-
+ization. A few months ago, E.ON aligned its strategy with three
+priorities-sustainability, digitalization and growth-and set a new
+course with a clear vision for the Company's future. In the years
+ahead, E.ON will become the sustainable platform for Europe's
+green energy transition. It will also use digitalization to master the
+increasing complexity of the entire energy system.
+solutions. Networks form the backbone of the energy transition and
+make a significant contribution to its success. Sustainable products
+and services for cities, municipalities, industry, and households
+enable E.ON to support its customers on their journey to climate
+neutrality.
+The year 2021 was a year of fundamental redirection for E.ON.
+Following the successful integration of innogy, in April 2021
+Leonhard Birnbaum succeeded Johannes Teyssen as CEO. Two other
+new Management Board members were appointed as well: Victoria
+Ossadnik (for Digitalization) and Patrick Lammers (for Customer
+Solutions). The new management team designed an updated strat-
+egy to prepare the entire E.ON Group for the decade ahead. In 2021
+E.ON moved forward on the sustainable course that it had set early
+on and, as part of the updated strategy, defined new growth ambi-
+tions. Its main focus was to propel socially responsible sustainability
+and Europe's energy transition in the digital age. Both-the energy
+transition and sustainability-are among the key drivers of future
+growth in E.ON's core businesses: energy networks and customer
+2021: E.ON Launches Offensive for Growth, Sustainability, and
+Digitalization
+Strategy and Objectives
+Strategy and Innovation
+Alongside the performance indicators described above, other finan-
+cial and non-financial indicators are also important for the success
+of our business and our corporate responsibility. Operating cash
+flow, power and gas passthrough, sales volume, as well as selected
+employee-related information are examples of other key performance
+indicators.
+Other Key Performance Indicators
+42
+climate-neutral by 2040. Our network operations in Germany and
+Sweden will be climate-neutral even earlier, by 2030. Ecological
+power line corridor management and the protection of biodiversity
+along high-voltage corridors has a high priority. In addition, E.ON
+provides its customers with energy solutions and services that sup-
+port their decarbonization journey and also offers them opportuni-
+ties to switch from fossil fuels to green energy. E.ON will also build
+infrastructure for supplying green gases and hydrogen. This will
+help decarbonize sectors that cannot be electrified and propel the
+transition toward new, carbon-neutral fuels and solutions.
+→ Corporate Governance Declaration
+Combined Group Management Report
+Initiating and Embedding Startup Partnerships in the E.ON Group
+E.ON also made successful use in-house of the ecosystem of leading
+international startups that is has established in recent years. Access
+to industry-leading innovations and new technologies enables E.ON
+to quickly integrate market-ready solutions into the operations of
+its network and customer solutions businesses. In 2021 more than
+25 new projects with startups were initiated across the E.ON Group,
+both in Germany and elsewhere.
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Solid financing of our business activities is of great importance to
+realize our aspired long-term and sustainable growth in line with
+the fulfillment of our financial ambitions. For this reason, cash-con-
+version rate, which is an indicator of E.ON' ability to transform
+operating earnings into cash inflows, and debt factor, which is a proxy
+for our capital structure and ratings, continue to be significant key
+figures in our management system. In addition, ROCE has been
+included in the management system as a key performance indicator
+to assess the efficiency of capital employed.
+We have made sustainability the key to our corporate strategy. In
+everything we do, we keep in mind the consequences of our actions.
+The progression of our carbon footprint, the frequency of serious
+incidents and fatalities ("SIF"), and the proportion of female manag-
+ers are thus part of our management system. In addition, our ESG
+ratings are incorporated into our management system. This provides
+a comprehensive assessment of our actions with respect to environ-
+mental, social, and governance aspects.
+In order to adequately take into account the interests of our stake-
+holders in addition to our focus on growth, our management system
+also includes other significant key performance indicators. As a
+customer-oriented company, the ability to acquire new customers
+and retain existing ones is crucial to our success. Net Promoter
+Score ("NPS") measures customers' willingness to recommend
+E.ON to a friend or colleague. The attractiveness of our company for
+investors is reflected in total shareholder return ("TSR") and dividend
+per share ("DPS"), which is part of TSR.
+Risks and Chances Report
+More detailed information about sustainability at E.ON is available
+in the Separate Combined Non-Financial Report starting on page
+138 →.
+Digitalization
+The transition toward a distributed, volatile, and networked energy
+world will be accompanied by increasing complexity that can only
+be managed through comprehensive digitalization. Digitalization is
+thus an important lever in E.ON's growth strategy and the basis for
+generating additional value in its core business over the long term.
+E.ON's objective is to become a fully digital energy company and to
+fundamentally transform its products, processes, and services into
+data-driven and highly networked solutions. Our digital transforma-
+tion is proceeding along four strategic pathways: optimizing internal
+operations, engaging customers and partners, transforming and
+developing new business areas, and enhancing employees' digital
+skills. The centerpiece of our digital transformation is a common
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The transition to a new, sustainable, and connected energy world
+will require considerable investments in physical and digital assets.
+This applies above all to energy networks, which are the backbone
+of a successful energy transition, because they interconnect all sec-
+tors and ensure a secure supply to customers in a complex energy
+system. Ongoing renewables expansion in particular will require
+grids to grow at a similar pace. Europe is expected to add more than
+70 GW of renewables capacity by 2030, almost doubling its exist-
+ing capacity. New network connections and connected load will
+increase sharply amid the energy transition owing to changes in
+customer behavior. Examples include the rising electricity demand
+from industry, eMobility, and heat pumps. Investments in network
+hardening and modernization are necessary to maintain supply
+security and to be able to meet rising energy demand. Here, digitali-
+zation will be the key to optimizing existing networks in order to
+efficiently manage the scope of necessary network expansion. The
+Earnings Growth in the Energy Networks Segment
+of the economy. E.ON is aiming for earnings growth in infrastructure
+and customer solutions, supported by continual efficiency improve-
+ments. Efficiency is essential for successful, sustainable growth.
+Our efforts in this area focus primarily on achieving operational
+excellence. E.ON is also aware that its growth strategy can only be
+achieved if it is accompanied by changes within the organization.
+Comprehensive measures to promote cultural change, diversity, and
+education are therefore integral to our strategy.
+Growth is necessary for business success. This success can only be
+achieved, however, through sustainable growth that accords with
+the EU's climate targets. That is why E.ON will make considerable
+growth investments across the green, distributed energy world.
+E.ON's growth strategy thus fits seamlessly with Europe's decar-
+bonization ambitions. Electricity distribution networks will have to
+be transformed to handle ongoing renewables expansion and the
+increasing challenges this poses for network operations. Added to
+this are necessary network expansion, digitalization, and modifica-
+tions to satisfy evolving customer behavior. Altogether, this transfor-
+mation is estimated to require substantial investments of €425 bil-
+lion EU-wide between 2020 and 2030. In addition, the aggregate
+energy demand of E.ON's customer groups will more than double
+between 2020 and 2050. E.ON's strategy is for these reasons a
+growth strategy, driven by the need for a sustainable transformation
+E.ON has two core businesses: operating power and gas networks
+and offering a broad range of customer solutions. The two busi-
+nesses complement each other amid the transformation of global
+energy systems. They are also clear growth businesses that benefit
+from the sustainable transformation of various customers and sec-
+tors. This transformation-whose aspects include the increasing
+number of renewables facilities and climate-friendly consumer
+applications like electric cars, heat pumps, and decentralized stor-
+age devices-expands E.ON's business opportunities as well.
+Growth
+Energy Networks' top priorities include smartification, standardiza-
+tion, and the development of new digital solutions-all with the
+highest cybersecurity standards. Digitalization helps E.ON operate
+its networks even more efficiently and optimally manage the grow-
+ing proportion of renewables feed-in. The development of digital
+solutions like smart eMobility charging solutions as well as smart
+meters and other new services on both sides of the standard resi-
+dential meter are also part of E.ON's growth strategy.
+E.ON is simultaneously developing a digital ecosystem called e.Hub.
+The e.Hub ecosystem is home to a portfolio of energy solutions,
+products, and services that can be connected and managed multi-
+directionally. Examples of e.Hub digital solutions include cloud-based
+sales platforms, eMobility charging management, and the manage-
+ment of grid-connection services. E.ON will deploy these digital
+solutions and services in its own operations and also offer a select
+range to its customers. e.Hub is being developed as an open-source
+ecosystem in which third parties can also scale up and market their
+own software solutions. Every solution developed for e.Hub is also
+part of the CTP and is being developed from the outset for use by
+end-customers and enterprise partners.
+technology platform ("CTP") for the entire Group. The CTP will serve
+as the basis for standardizing and harmonizing all applications in
+the E.ON Group necessary for the energy transition. It will enable us
+to develop new digital energy solutions while maintaining the high-
+est security standards.
+→ Business Report
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+43
+Risks and Chances Report
+→ Disclosures Regarding Takeovers → Corporate Governance Declaration
+→ Forecast Report
+Combined Group Management Report
+↑
+Search
+Contents
+E.ON Annual Report 2021
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Innovations Generate Growth in E.ON's Operating Business
+The diverse structures that E.ON has established in recent years to
+accelerate innovation are generating continuous growth in the E.ON
+Group. The central Innovation department handed over 12 projects
+to E.ON's operating business in 2021. These projects are expected
+to deliver more than €185 million in sales over the next five years.
+The innovation teams focused on developing innovations for industry,
+eMobility, communities, energy networks, and customer solutions.
+Future of Work: we foster the adaptation of a new mindset and
+capabilities, making E.ON fit for the future of work.
+For example, E.ON's I&C business has been very successful for several
+years in offering companies operating large CHP plants a product
+that enables them to monitor their production facilities and to use
+predictive maintenance to maintain them cost-effectively. In 2021
+E.ON's I&C business and central innovation team developed Inno
+Plant Pulse, a new product variant that monitors energy-intensive
+production processes that use compressed air, cooling, and process
+water, thereby enabling customers to save more energy. These are
+some of the specific ways E.ON helps its I&C customers meet their
+carbon reduction targets.
+Search
+Contents
+E.ON Annual Report 2021
+In addition, E.ON is a member of Initiative Women into Leadership
+("IWIL"), a non-profit association to promote the continual develop-
+ment of female leaders in Germany. The initiative's purpose is to
+E.ON's approach to promoting diversity is holistic, encompassing all
+dimensions of diversity. In 2021 the Company again implemented
+numerous measures to promote diversity at E.ON. Fostering female
+managers' career development remains an important dimension.
+E.ON set an ambitious target to increase the proportion of women
+in management positions. By 2031, E.ON wants to bring the pro-
+portion of women in management positions Group-wide to the
+same level as the proportion of women in its overall workforce. At
+year-end 2021, 32 percent of E.ON employees were women. E.ON
+will increase the proportion of women in its talent pool accordingly.
+In 2008 E.ON publicly affirmed its commitment to fairness and
+respect by signing the German Diversity Charter, which now has
+more than 4,000 signatories. E.ON therefore belongs to a large
+network of companies committed to diversity, tolerance, fairness,
+and respect. In addition, E.ON has been an active member of the
+German Diversity Charter since 2020.
+the Group representation for severely disabled persons signed the
+Shared Understanding of Implementing Inclusion at E.ON, creating
+an important foundation for integrating people with disabilities into
+the organization.
+In addition, a diverse workforce enables E.ON to do an even better
+job of meeting its customers' specific needs and requirements. As
+far back as 2006 E.ON issued a Group Policy on Equal Opportunity
+and Diversity. In late 2016 E.ON along with the SE Works Council
+of E.ON SE renewed this commitment to diversity. In April 2018 the
+E.ON Management Board, the German Group Works Council, and
+Going forward, diversity will remain a key element of E.ON's com-
+petitiveness. Diversity and a mutually appreciative corporate culture
+promote creativity and innovation. Diversity is also a core E.ON
+value. E.ON brings together a diverse team of people who differ by
+nationality, age, gender, religion, physical and mental capabilities,
+sexual orientation and identity, and/or ethnic origin and social back-
+ground. E.ON fosters and utilizes this diversity and creates an inclu-
+sive work environment. This is an important factor in business
+success: only a company that embraces diversity and knows how
+to benefit from it will be able to remain an attractive employer.
+Diversity
+needs and provide them with optimal support in their development.
+Our hybrid and flexible working model enables our employees to
+work from home or in the office. A wide range of offerings for health
+and well-being support our employees outside work as well.
+↑
+A modern work environment, individual development opportunities,
+and a value-oriented corporate culture help ensure that all employees
+at E.ON can achieve their potential. We offer our employees a com-
+prehensive range of learning opportunities that are geared to their
+Being an attractive employer means hiring and retaining the right
+people for our company. Our growth strategy offers meaningful and
+sustainable employment across all our business units. Our employees
+will be the key to our success in the future as well. Their personalities,
+capabilities, and experience make E.ON future-proof and unique.
+Employer Attractiveness
+E.ON has a long tradition of maintaining a constructive, mutually
+trusting partnership with employee representatives. This relationship
+lays the foundation for a successful social partnership, particularly
+in a continually changing business environment.
+affected. The aforementioned cooperation between the Company
+and employee representatives also made it possible for this standard-
+ization process to be essentially of equivalent value for employees
+and cost-neutral for Group companies.
+49
+→ Disclosures Regarding Takeovers → Corporate Governance Declaration
+Risks and Chances Report
+→ Forecast Report
+Combined Group Management Report
+→ Business Report
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+We provide our employees with the best-possible support to propel
+the energy transition: strengthening their capabilities for the future
+of work, embedding diversity and inclusion in our DNA, and forging
+a lasting partnership between our company and its employees.
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report → Forecast Report
+E.ON Annual Report 2021
+In March 2021 the E.ON Management Board adopted measures to
+be implemented in the near term to promote diversity and equal
+opportunity at E.ON in Germany. It recommended that the measures
+be implemented, to the degree feasible, at E.ON units in other
+countries as well. One example is the promotion of co-leadership, in
+which two part-time managers share a leadership position, giving
+them greater flexibility in balancing their professional and private
+lives. Another flexible option is a part-time leadership position, in
+which a manager works at least 80 percent, with full time as an
+option. In addition, recruitment policies for management positions
+will be adjusted so that at least one candidate on the shortlist is
+from the underrepresented gender. Other measures include man-
+datory diversity training for all managers (similar training modules
+for all employees are also being planned) and workshops on using
+inclusive language in job advertisements.
+Diversity Measures
+(sponsor: COO - Commercial Patrick Lammers)
+Diversity@Westenergie Metering, which won the Initiative
+Diversity Award in 2020
+(sponsor: COO - Digital Victoria Ossadnik)
+Diversity@EKN, which won the 2021 CEO Diversity Award for the
+best initiative
+(sponsor: COO Networks Thomas König)
+Women@E.ON, which won the 2020 CEO Diversity Award in
+employee network category
+LGBT+ & Friends, a diversity initiative that was the second-placed
+2021 CEO Diversity Award
+(sponsor: CFO Marc Spieker)
+(sponsor: CEO Leonhard Birnbaum)
+Three dimensions/adaptABILITY, an initiative for disability and
+mental health
+In addition, the E.ON Management Board adopted several measures
+to further promote diversity and inclusion. One of them is for board
+members to personally sponsor a diversity network and for E.ON to
+provide financial support. The networks that are sponsored for the
+current year are:
+Sponsoring Networks
+SE Works Council. A colleague in the United Kingdom won the
+champion award for establishing a Wellbeing Warrior network
+and time-to-talk sessions at which colleagues and leaders share
+personal stories on topics like isolation, disabilities, and LGBT+.
+Diversity@EKN (e.kundenservice Netz GmbH) won the initiative
+award for their dedication to give diversity greater visibility and
+priority. Some finalists and past winners are named below.
+In 2021 the CEO Award for Diversity and Inclusion was conferred for
+the third time. The awards pay tribute to individuals and activities
+across E.ON that are making a real difference in the areas of diversity
+and inclusion. Employees were nominated in two categories: diver-
+sity champion and diversity initiatives. They were judged by a panel
+including CEO Leonhard Birnbaum as well as the Senior Vice Presi-
+dent for Group HR/Executive HR, the Head of Talent Management,
+Leadership Development and Diversity as well as members of the
+Diversity Award
+Support mechanisms that address employees' differing needs have
+for years been firmly established at the E.ON Group. Examples
+include mentorship programs for next-generation managers,
+coaching, training to prevent unconscious bias, support for child-
+care, and flexible work arrangements.
+More information about E.ON's compliance with Germany's Law for
+the Equal Participation of Women and Men in Leadership Positions
+in the Private Sector and the Public Sector can be found in the Cor-
+porate Governance Declaration beginning on page 96 >.
+recruit outstanding personalities from various social spheres
+-including business, culture, the media, and science-to serve as
+mentors to support highly qualified and successful women on
+their way to the top. Having fulfilled IWiL's criteria, E.ON has also
+been a Top Promoter of Female Fast-Track Leaders since 2021.
+50
+→ Corporate Governance Declaration
+Risks and Chances Report
+Combined Group Management Report
+→ Disclosures Regarding Takeovers
+Back
+↑
+Search
+Contents
+Contents
+E.ON Annual Report 2021
+The road toward a sustainable and digital energy world is laid in part
+through collaboration in international innovation ecosystems. In
+recent years, E.ON has built a platform for global collaboration
+with partners on every continent. Amid the pandemic, E.ON created
+a virtual forum for its innovation network where almost 5,000 mem-
+bers currently meet at virtual events to discuss and exchange ideas.
+In October 2021 E.ON hosted its second Energy Innovation Days, a
+virtual energy and innovation conference that was one of the largest
+of its kind in 2021. At total of 15,000 people from 110 countries
+attended 33 sessions in which they listened to and engaged with
+more than 80 international leaders, visionaries, and startup founders.
+The conference focused on electrification, digitalization, and con-
+nectivity en route to a sustainable and zero-carbon world.
+Establishing a Global Innovation Community
+E.ON ensures progress toward its goals of sustainability, digitaliza-
+tion, and growth in part by patenting inventions and managing its
+intellectual property rights. E.ON's central patent system protects
+intellectual property, especially inventions of digital solutions for
+technical applications. Patented and patent-pending inventions can
+give E.ON a competitive edge over other market participants and
+thus enable it to benefit from the economic advantages of protected
+innovations. Inventions in network infrastructure, hydrogen tech-
+nologies, and technologies for the decommissioning of nuclear power
+plants accounted for a large share of activities in 2021.
+Patents on New Ideas and Technologies Safeguard Future
+Innovations
+E.ON's end-customers are also increasingly focusing on their carbon
+emissions; rising electricity and gas prices in the fall and winter of
+2021 have given this issue greater urgency. To meet this need, E.ON
+is developing innovative solutions that give residential customers
+transparency about their individual carbon footprint. This enables
+them to better manage their energy consumption with the aim of
+reducing it. E.ON is also breaking new ground in this area by creating
+new customer experiences that provide its customers with inte-
+grated energy management solutions for heat pumps, solar panels,
+insulation, and EV charging in their climate-neutral homes. Con-
+tinuing this trend, in the spring of 2021 E.ON launched Next Drive,
+an innovative tariff and app package, in the United Kingdom. The
+solution was developed in partnership with British startup ev.energy
+and E.ON business units in several countries. Next Drive is an exclu-
+sive E.ON energy product with which residential customers can
+automatically charge their EV at home at the lowest electricity price.
+New Customer Solutions Help Consumers Reduce Their Carbon
+Emissions
+In 2021 E.ON continued its ongoing innovation activities under
+the IElectrix project, which is part of the European Union's largest
+research and innovation program. E.ON and its IElectrix partners
+have been developing mobile and flexibly deployable battery energy
+storage systems ("BESS") since 2020. The purpose is to integrate
+new green power facilities, especially large solar farms, into the
+existing grid at short notice and at low cost, thus achieving rapid
+progress in the energy transition across Europe. The costs of BESS
+can be up to 80 percent lower than the costs of conventional grid
+expansion. In 2021 two more mobile BESS were connected to
+E.ON's distribution grid in Friedland in eastern Germany and Dúzs
+in Hungary.
+Progress in network digitalization and innovative options for storing
+renewable and distributed energy will determine the success of the
+energy transition's implementation. Being one of Europe's leading
+distribution system operators and energy suppliers gives E.ON the
+ambition to continue propelling the transformation to a carbon-
+neutral energy system from a leading position. E.ON's activities to
+develop sustainable neighborhoods and new products and services
+for energy communities give it access to new customer groups.
+Using Mobile Storage Systems to Integrate More Renewables into
+the Distribution Network
+New technologies are an important innovation driver in eMobility
+as well. Dynamic load management ("DLM 2.0"), for example, can
+make expanding EV charging infrastructure much faster and easier.
+With DLM 2.0, the electricity available for a building's charging
+points is variable. It is dynamically distributed between charging
+points and factored into load management. For example, if con-
+sumption in the building drops, more EVs are charged simultaneously
+or at a higher charging rate. This optimizes individual charging pro-
+cesses and makes full use of a building's available electricity capac-
+ity, almost in real time. E.ON partnered with Aachen-based startup
+gridX to launch a pilot project at its Essen headquarters. The project
+enables dynamic EV charging at 60 charging points. Compared
+with a conventional charging setup, around eight times as many EVs
+can be charged during office hours without increasing the number
+of charging points. A DLM 2.0 system ensures that there is always
+sufficient electricity available for charging, while also avoiding load
+peaks in the network and thus additional operating costs.
+47
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Forecast Report
+→ Business Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+New Technologies Accelerate Growth in the eMobility Business
+In 2021 Germany's eMobility market continued its robust growth.
+More than 1 million electric cars are now on Germany's roads
+(as of December 2021). A large and growing majority of Germans
+are open to purchasing one. The resulting increase in energy
+demand requires expansion and more efficient management of
+charging infrastructure, areas in which E.ON has a leading position
+in its European markets and aims to achieve significant growth.
+Search
+Digitalization and Energy Efficiency in the Industrial Sector
+The digital transformation of the industrial sector experienced more
+growth in 2021. E.ON is developing specific carbon-reduction solu-
+tions for its industrial and commercial ("I&C") customers. These
+solutions support the increasing tempo of digitalization at manu-
+facturing companies and deliver on E.ON's ambition to accelerate
+Europe's decarbonization.
+↓
+→ Corporate Profile
+E.ON Annual Report 2021
+To standardize working conditions, E.ON concluded numerous
+agreements with trade unions, the Group Works Council, and local
+works councils at the collective bargaining, Group, and plant level.
+The negotiations were again conducted under challenging conditions
+owing to the Covid-19 pandemic. However, E.ON's proven social
+partnership made it possible to hold constructive discussions and
+to find good solutions that address the interests of the employees
+Following the transfer of innogy employees to their respective
+E.ON target companies, the focus in 2021 was on standardizing the
+working conditions in the E.ON companies to which the innogy
+employees were transferred. The standardization was also coordi-
+nated with the local works councils according to a predefined
+timetable so that all employees can work under the same working
+conditions in 2022.
+Integration of innogy
+In 2021 E.ON created four task forces to further implement the GPS.
+Each addresses one of the aforementioned people priorities. These
+cross-functional and diverse working groups initiated and propelled
+corresponding projects. In line with the modular implementation of
+the GPS@E.ON, the approaches developed in the task forces were
+subsequently handed over to the business units for further specifica-
+tion or will be continued in 2022 due to a project's scope.
+These four priorities serve as a compass for HR work for the entire
+Group and are brought to life through Group-wide and cross-
+divisional HR activities, particularly through existing Group-wide
+frameworks like the competency model Grow@E.ON. However,
+the GPS's implementation approach is also flexible and modular to
+accommodate differences between business units.
+The GPS@E.ON defines three key ambitions for each of the four
+people priorities. These describe in detail what we want to achieve
+for each priority. The people priorities thus provide a framework
+with clear objectives that promotes intraorganizational collaboration
+on key issues and thus efficient use of resources and ensure a com-
+mon, integrated approach.
+Leadership: we encourage leaders to challenge and adapt their
+behaviours, acting as role models towards all employees.
+Sustainability: we focus on well-being, purpose and employability
+to achieve our potential and maintain our performance on a
+sustainable basis.
+Diversity & Inclusion: we are inclusive and we champion differ-
+ence, boosting our talent pipelines, individual growth, and team
+performance.
+Significant Key Performance Indicators
+•
+•
+•
+The four people priorities are central to GPS. They were developed
+on the basis of extensive research and in consultation with HR
+managers across the Group. They are:
+The GPS@E.ON pursues three Group-wide objectives. First, it for-
+mulates a vision for everyone at E.ON, regardless of their role, team,
+function, or business unit. It also identifies four high-impact people
+priorities that foster employees' engagement, development, and
+performance. It therefore serves as a compass for existing and
+future people initiatives and for prioritization and decision-making.
+In 2020 E.ON developed a new Group People Strategy ("GPS") to
+support E.ON's growth strategy and to bring E.ON's values to life.
+The GPS serves as the compass to guide the Company's ongoing
+transformation and promote its lasting success amid a continually
+changing world. It ensures that E.ON can achieve its targets and
+that its employees work in an environment that enables them to
+deliver outstanding performances.
+People Strategy
+Employees
+48
+→ Corporate Governance Declaration
+Risks and Chances Report
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+Adjusted earnings per share ("EPS") is equal to adjusted net income
+divided by the weighted average number of shares outstanding. In
+addition to operating earnings, depreciation and amortization, inter-
+est income, income taxes, and non-controlling interests are also
+included. This allows a holistic assessment of the earnings situation
+from the perspective of the shareholders of E.ON SE.
+Risks and Chances Report
+Adjusted EBITDA is an earnings figure before interest income and
+income taxes that has been adjusted to exclude non-operating
+effects. The adjustments include net book gains, certain restructur-
+ing expenses, the mark-to-market valuation of derivatives, and
+other non-operating earnings. Therefore, adjusted EBITDA is the
+indicator of sustainable earnings capacity and the appropriate key
+figure for the performance of our businesses.
+Most significant performance indicators
+E.ON's Management System as of 2022
+The following chart summarizes the key performance indicators
+used for management purposes.
+41
+→ Corporate Governance Declaration
+Risks and Chances Report
+• Adjusted EBITDA
+Combined Group Management Report
+→ Corporate Profile → Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+Investments are still equal to the investments expenditures shown
+in the E.ON Group's Consolidated Statements of Cash Flows. Invest-
+ments are the engine for the future growth and digitalization of our
+businesses as well as decarbonization. As a reflection of our strat-
+egy, they therefore continue to be a key indicator for managing our
+activities.
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+• Cash-effective investments
+III
+Significant performance indicators
+With our focus on long-term, sustainable, and value-oriented
+growth, the most significant performance indicators are the main
+metrics for internal management and the assessment of our busi-
+ness development and thus also the cornerstones of our forecast.
+Most Significant Key Performance Indicators
+In addition to the management system, the compensation system
+for the Management Board is also designed to support the imple-
+mentation of our strategy and thus the long-term success of E.ON
+through sustainable, long-term, and value-oriented management of
+the Group. For this reason, the compensation of the members of the
+Management Board has also been linked to the development of
+selected key performance indicators. The new Management Board
+compensation system has been in place since January 2022. For
+more information, please refer to the Compensation Report starting
+on page 105 →.
++
+Other performance indicators
+⚫ ESG ratings
+• Frequency of serious incidents and fatalities ("SIF")
+.Net Promoter Score ("NPS")
+• Adjusted earnings per share based on adjusted Net Income ("EPS")
+• Carbon emissions
+Debt factor
+• Return on capital employed ("ROCE")
+Cash-conversion rate
+• Dividend per share ("DPS")
+Total shareholder return ("TSR")
+• Proportion of women in management positions
+•
+Tight energy markets severely impacted many U.K. consumers.
+To provide some background, the British government announced in
+2017 the introduction of a price cap for energy bills. It was imple-
+mented by the Office of Gas and Electricity Markets ("Ofgem"), the
+U.K. energy regulator, and took effect at the start of 2019. Ofgem
+updates the price cap every six months. It sets a maximum rate that
+energy suppliers can charge their customers for the use of gas and
+electricity. Ofgem raised the cap twice in 2021. Due to its adjust-
+ment methodology, however, energy bills in 2021 did not reflect
+the considerable rise in wholesale prices. As a result, the standard
+tariff with a price cap was the cheapest product on the market.
+Energy suppliers who had not hedged sufficiently and were poorly
+capitalized ran into financial difficulties because they had to procure
+energy at higher costs. This led to nearly 30 suppliers going bankrupt
+in 2021. E.ON acquired approximately 389,000 customers from
+four suppliers that exited the market.
+Most of the increase in wholesale energy costs in 2021 was factored
+into Ofgem's most recent price cap update, announced in February
+2022. The energy bill for an average household will rise by 54 percent
+to around £1,971 (€2,370) from April 1, 2022, onward. Ofgem made
+a number of proposals, including a revision of how future price caps
+are calculated.
+In parallel, the British government announced measures to ease the
+burden on households. A large portion of them are to receive £350
+(€416) in relief to partially offset the price cap increase announced
+by Ofgem. First, a large share of the population is to receive a £150
+property-tax discount in April 2022. Second, all households are to
+receive a £200 reduction on electricity bills payable in the fall. This
+amount is repayable over a five-year period. Details on the imple-
+mentation of the measures have not yet been determined.
+E.ON welcomed the measures taken by the British government to
+support customers. From the Company's point of view, the energy
+crisis has made it clear that investment in energy efficiency must be
+increased so that energy bills decline permanently and dependence
+on gas is reduced.
+III
+E.ON Annual Report 2021
+Contents
+Search
+↑
+In early 2022 rising energy prices became a topic of political dis-
+cussion in Germany as well. Politicians from various parties along
+with trade associations designed a range of proposals to relieve
+the burden on consumers, including an early reduction as well as
+the recission of the surcharge stipulated by the Renewable Energy
+Sources Act (known by its German abbreviation, "EEG"). E.ON had
+already advocated a reduction in the EEG surcharge in the past and
+welcomes its recission, particularly from consumers' viewpoint.
+Many different factors beyond procurement costs influence the price
+of electricity, including (even if the EEG surcharge is rescinded)
+state-imposed taxes, regional network fees, and other levies and
+E.ON, by contrast, adopts a long-term, foresighted approach to pro-
+curing electricity and natural gas for its customers. This protects
+existing customers from short-term price adjustments. Nevertheless,
+E.ON too had to temporarily suspend the acquisition of new cus-
+tomers in Germany in October 2021 in view of higher procurement
+costs in its gas business. This did not affect existing customers,
+and E.ON also continued to fulfill its role as a basic supplier. After a
+few days, potential gas customers were also able to conclude new
+contracts again.
+55
+The Commission's immediate measures also included closer moni-
+toring of markets, while it also stressed that there is no evidence of
+speculation by market participants. E.ON is skeptical of any addi-
+tional regulation of energy markets in view of the possible conse-
+quences for investment in the energy transition. It advocates the
+rejection of measures that distort free price formation or restrict
+free trade in energy.
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+Higher energy prices affected all markets in which E.ON operates
+and had negative consequences for end-consumers. Some suppliers
+in Germany, for example, terminated their customers' contracts
+because they were no longer able to meet their supply obligations.
+A total of 41 energy suppliers in Germany had gone out of business
+by the end of the year. The reason is that some energy suppliers
+sometimes count on low wholesale prices so that they can offer
+energy at the lowest possible price. As soon as the cost of procuring
+gas or electricity rises, however, they quickly find they can no longer
+supply energy to their customers at the agreed-on price.
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Global
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Contents
+E.ON Annual Report 2021
+On July 14, 2021, the European Commission presented its Fit for 55
+package aimed at achieving the new climate target. It revises current
+energy and climate legislation and contains numerous proposals
+for measures to reduce GHG emissions in all sectors. It will therefore
+affect all areas of the economy, industry, and society.
+The adoption of the European Climate Law in June 2021 made
+Europe the first continent to make a binding commitment to climate
+neutrality by 2050. The law also set a new interim target: by 2030,
+the European Union intends to reduce its net GHG emissions by
+55 percent relative to 1990; previously, the joint reduction target
+was 40 percent.
+Europe
+The next UN climate conference, COP27, is scheduled to take place
+in November 2022 in Sharm el-Sheikh, Egypt.
+Most of the governmental arrangements made at COP26 are con-
+trolled by the countries themselves. Only some countries made their
+pledges legally binding. Moreover, the pledges made in Glasgow are
+not sufficient to actually limit the global temperature increase to
+1.5 degrees. E.ON therefore believes that COP26 did not represent
+a real breakthrough. Instead, it is imperative for climate protection
+to shift even more resolutely into implementation mode.
+Progress for developing countries was also announced by the LEAF
+Coalition. LEAF, which stands for lowering emissions by accelerating
+forest finance, is a global initiative of governments and corporations,
+including E.ON. It announced at COP26 that it had mobilized $1 bil-
+lion to finance measures to protect tropical and subtropical forests
+and reduce deforestation.
+the current level of around $20 billion annually to $40 billion (about
+€35 billion).
+Funding to help economically weaker countries cope with the
+effects of climate change and transition to clean energy is also to be
+increased. This financial aid is to be doubled by 2025 onward, from
+In addition, it was the first UN climate conference to produce a plan
+to reduce coal consumption. Following an intervention by China
+and India, however, participants agreed only to "phase down" coal
+rather than to completely phase it out.
+Combined Group Management Report
+Among other things, COP26 also set rules for a global carbon mar-
+ket. The main issue was about projects to reduce emissions in one
+country being used to meet the climate targets of another. Double
+counting is supposed to be prevented in the future my means of
+accurate allocation.
+By contrast, the United Nations framework convention on climate
+change, 26th conference of the parties ("COP26") in Glasgow, ended
+with a new global agreement. Although not legally binding, the
+agreement will set the climate protection agenda for the decade
+ahead.
+Participants at the G20 summit also stated their position on climate
+change, but did not agree on specific measures. At their summit on
+October 30 and 31, 2021, the heads of government of the 20 most
+important industrialized and emerging countries pledged to achieve
+carbon neutrality "by or around mid-century."
+The United States, under President Joseph Biden, rejoined the Paris
+climate agreement at the start of the year. President Vladimir Putin
+announced in October 2021 that Russia intends to be carbon-neutral
+by 2060. Prime Minister Narendra Modi announced in October as
+well that renewables would meet half of India's energy needs by
+2030 and that the entire country would be carbon-neutral by 2070.
+The questions of by what means climate change should be slowed
+and how quickly continued to shape the global energy-policy
+debate in 2021.
+E.ON Annual Report 2021
+Energy Policy and Regulatory Environment
+By contrast, the federal cabinet decided on February 2, 2022, to
+provide a one-time heating cost subsidy for lower-income house-
+holds. In view of the sharp rise in heating costs in the 2021/2022
+heating season, a one-time subsidy adjusted for the number of per-
+sons is planned for households receiving a housing subsidy. Draft
+legislation is expected to be introduced in the Bundestag in March.
+surcharges. It is therefore not yet possible to reliably predict how
+much relief customers will receive (as of February 2022). The
+current federal government's coalition agreement calls for the
+EEG surcharge to be rescinded in 2023.
+56
+→ Corporate Governance Declaration
+Risks and Chances Report
+In the final declaration, called the Glasgow Climate Pact, countries
+committed to a joint objective of stopping global warming at
+1.5 degrees Centigrade compared with the preindustrial era. To this
+end, the existing climate protection plans for this decade are to
+be tightened by the end of 2022, three years earlier than previously
+planned. The declaration also states that global emissions of climati-
+cally harmful greenhouse gases ("GHGs") must decline by 45 percent
+this decade if the 1.5-degree limit is to remain achievable.
+of gas reserves.
+•
+creating temporary state aid schemes for industry.
+Search
+Contents
+E.ON Annual Report 2021
+A combination of disparate factors sent energy prices higher in 2021.
+The main cause was a tight supply of natural gas accompanied by
+rising global gas demand amid the economic recovery. In addition,
+wholesale gas and electricity prices increased owing to higher coal
+and carbon prices.
+Energy Price Developments
+After a first quarter hampered by Covid-19 restrictions, Germany's
+economy gained momentum mid-year. The pace of economic
+growth slowed considerably in the third quarter owing to global
+supply shortages for intermediate products, which severely
+impeded industrial production. According to the OECD, Germany's
+gross domestic product ("GDP") increased by 2.9 percent in 2021.
+The German Council of Economic Experts' annual two-year forecast
+predicted that Germany's inflation rate, for example, would be
+3.1 percent in 2021 and 2.6 percent in 2022. The Federal Statistical
+Office reported that Germany's inflation rate in December 2021
+was in fact 5.3 percent higher than a year earlier; the inflation rate
+in December 2020 had been -0.3 percent (owing in part to a tempo-
+rary reduction in VAT for part of that year). The Council of Economic
+Experts warned that extended shortages, higher wage settlements,
+and rising energy prices harbor the risk that these price drivers,
+which are usually only temporary, could lead to prolonged inflation.
+Alongside higher prices for raw materials and intermediate products,
+rising energy prices in particular caused inflation rates to increase.
+As the year progressed, the global economic recovery was accom-
+panied by a rise in raw material and energy prices and by supply
+shortages. The shortages, together with higher demand across all
+economic sectors, led to a general increase in inflation rates, partic-
+ularly from the fourth quarter of 2021 onward.
+8.9
+8
+6
+↑
+4
+0
+6.9
+5.6
+5.2
+2.9
+2.0
+Source: OECD, 2021.
+World
+OECD
+Eurozone
+Sweden
+2
+The European Commission also called on member states to invest
+more to develop future-proof energy storage, trans-European net-
+works, renewable energy, and energy efficiency. In addition, it
+announced that it would examine the possibility of joint procurement
+Back
+→ Employees
+reducing energy taxes for vulnerable customers
+using proceeds from the Emissions Trading Scheme ("EU ETS")
+to ease the burden on consumers
+providing income support to prevent disconnection
+suspending or deferring electricity-bill payments
+•
+•
+Search
+•
+•
+The European Commission responded to rising energy prices across
+Europe by issuing a communication on October 13, 2021, entitled
+"Tackling rising energy prices: a toolbox for action and support." It
+explains what member states could do immediately under existing
+EU law to mitigate the economic and social impact of higher energy
+prices. The measures included:
+The average carbon allowance price in December 2021 was about
+€80 per metric ton, more than triple the average price in 2020.
+→ Corporate Profile → Strategy and Innovation
+→ Internal Control System for the Accounting Process
+The trend of forward gas prices was similar. Year-ahead gas averaged
+nearly €88 per MWh in December 2021, €35 more than in November.
+Wholesale gas prices also reached record levels at the end of the year
+and remained at a high level. Spot natural gas prices in Germany
+averaged €115 per MWh in December, more than €100 per MWh
+higher than the annual average for 2020.
+The spot price for electricity in Germany averaged around €221 per
+MWh in December compared with an average spot price of €38 per
+MWh in 2019.
+The paragraphs that follow will use the spot market and spot prices
+to explain these developments.
+The practical consequences of the increase in wholesale electricity
+prices varied considerably. In September 2021, for example, average
+electricity prices in Europe were between €50 and €196 per MWh,
+depending on the country.
+High gas and electricity prices affected the European Union's mem-
+ber states very differently. This is because the link between whole-
+sale and retail prices differs by country. The impact that wholesale
+prices have on consumers also depends on each country's regulatory
+scheme and national energy mix.
+The primary reason for high gas demand was the economic recovery
+after the first waves of the Covid-19 pandemic subsided along with
+weather factors. The economies of China, other Asian countries,
+and the United States purchased large amounts of gas. In addition,
+Europe's renewables output declined owing to poor wind conditions.
+Gas-fired capacity had to fill this gap in power output, but was only
+available to a limited extent. Moreover, gas reserves had fallen in
+the wake of a cold winter of 2020-2021, and Europe's gas storage
+inventory had not been replenished in the summer of 2021 to the
+degree it had in previous years. Even a major natural gas exporter
+like Russia was not immune and initially focused on meeting its
+increased domestic demand. In addition, some temporary gas supply
+shortages resulted from maintenance work in the gas network.
+54
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Price movements on other wholesale markets were similar. Forward
+electricity prices for upcoming months, quarters, and years more
+than doubled in the first half of December, but eased again slightly
+after the Christmas holidays. Nevertheless, the average price for
+year-ahead baseload electricity was €212.88 per MWh in Decem-
+ber 2021, almost €90 more than in November.
+↑
+→ Corporate Governance Declaration
+→ Employees
+Contents
+E.ON Annual Report 2021
+As provided for in the 13th amendment to the Atomic Energy Act,
+three nuclear power plants ("NPPs") were decommissioned on
+December 31, 2021. Alongside Gundremmingen C, they were
+Brokdorf and Grohnde NPPs operated by E.ON's PreussenElektra
+subsidiary. Isar 2, which is operated by PreussenElektra, and
+Germany's other remaining NPPs (Emsland and Neckarwestheim)
+will end operation at year-end 2022. The closure of the last plants
+will complete the political decision Germany made in 2011 to phase
+out nuclear energy.
+Most of the projects related to energy policy and climate protection
+are in line with the growth strategy E.ON published on November 23,
+2021. E.ON thus expressly supports more ambitious climate targets
+and intends for the innovative solutions of its Energy Networks and
+Customer Solutions segments to promote this plan.
+The proportion of renewables in gross electricity consumption
+is to be increased to 80 percent; the EEG currently foresees
+65 percent.
+The coalition agreement also identifies digitalization (such as
+artificial intelligence, quantum technology, and data-based
+solutions) as a key area for the future. The government plans to
+introduce an additional digital budget for this purpose, and all
+future laws are to be subjected to a digitalization check in the
+future.
+50 percent of heat is to be climate-neutral by 2030; to achieve
+this, the requirements for new residential construction are to be
+tightened. Newly installed heating systems are to be required to
+run on at least 65 percent renewables from 2025 onward.
+•
+•
+At least 15 million electric cars are to be registered by 2030. The
+coalition declared its support for the EU's goal of allowing only
+carbon-neutral vehicles to be registered from 2035 onward.
+Germany is to become the pacesetting market for hydrogen
+technologies by 2030; for this purpose, its national hydrogen
+strategy is to receive an "ambitious update". Hydrogen network
+infrastructure as well as green-hydrogen production are to be
+promoted.
+Search
+A reform of network fees is also foreseen.
+•
+•
+•
+.•
+Among the agreements contained in the coalition agreement are
+the following:
+Planning and approval processes are to be shortened. The coalition
+agreement says this will halve their duration and is to be implemented
+in the government's first year in office. Although these aspects have
+not been specified, this announcement is to be welcomed in the
+interests of climate protection.
+importance of attractive conditions for investments in network
+infrastructure relative to the rest of Europe should in any case be
+welcomed.
+The coalition agreement emphasizes the importance of faster net-
+work expansion. Planning of network infrastructure is to be carried
+out with foresight. The BNetzA and network operators are to develop
+a plan for a "climate-neutral network." The plan's details were not
+initially known. From E.ON's point of view, the emphasis on the
+The price of carbon remains the central control mechanism for
+climate protection. The coalition intends to advocate a minimum
+carbon price in the EU ETS and the creation of a second European
+emissions trading scheme for heat and mobility.
+Germany's coal phaseout is to be moved forward. Specifically, it
+was agreed that the review of the end date for the decommission-
+ing of lignite- and hard-coal-fired power plants after 2030, which
+the law sets at 2026, will be moved forward by over three years to
+the end of 2022. Climate protection targets set by the previous
+government-1.5 degrees Centigrade and climate neutrality by
+2045-remain in place. An emergency climate protection program
+is to get measures under way. Gas-fired power plants are recognized
+as necessary "until security of supply is ensured by renewables."
+Renewables expansion is to be accelerated by means of higher ten-
+der amounts, power purchase agreements ("PPAs", which are con-
+tracts between electricity producers and consumers), Europe-wide
+trade in guarantees of origin for green electricity, and the systematic
+removal of hurdles to the construction of generation facilities. The
+overarching target is for renewables to account for 80 percent of
+Germany's electricity consumption by 2030, based on anticipated
+consumption of between 680 and 750 TWh. E.ON believes this
+target should be welcomed; it is important, however, for networks
+to be expanded and modernized in synch with renewables growth.
+The price of electricity for consumers is to fall. For this purpose,
+EEG funding will come from the federal budget rather than a
+surcharge from 2023 onward. There are discussions about mov-
+ing this measure forward to ease the burden of higher electricity
+prices on consumers; a decision and legislation are not expected
+until the second quarter of 2022.
+59
+↑
+→ Corporate Profile → Strategy and Innovation
+→ Internal Control System for the Accounting Process
+E.ON Annual Report 2021
+A new energy law In the Czech Republic that was due to take effect
+in 2023 will be delayed yet again. Elections changed the balance of
+power in parliament. This is expected to lead, among other things,
+to a revision of the country's climate and energy strategy, which is
+likely to include discussions on new NPPs. High energy prices also
+dominated the Czech Republic's debate on energy-system transfor-
+mation.
+East-Central Europe
+Sweden's Covid-19 pandemic restrictions were less stringent than
+in other countries, and many measures were lifted at the end of
+September 2021.
+An amendment to electricity network regulation took effect on
+June 1, 2021. The Ministry of the Environment is currently working
+on an electrification strategy. The Ministry of Infrastructure has
+established an electrification committee for the transport sector,
+which will serve until the end of 2022.
+High electricity prices were a key topic of the energy policy debate
+in Sweden as well, with the country's four existing price zones
+frequently being called into question. In September 2021, for
+example, the price level in southern Sweden was more than twice
+as high as in the North.
+A vote of no confidence against the minority government of Social
+Democrats and Greens was held in June. The opposition did not
+succeed in forming a government, and so the previous government
+initially returned to office. The prime minister resigned in November,
+and a new Social Democratic government was confirmed at the end
+of November.
+Sweden
+consumers.
+To mitigate the impact of high energy prices on end-consumers,
+Italy set aside around €3 billion, part of which comes from revenue
+from emissions trading, to reduce electricity and gas network fees
+and the VAT on gas. It will also provide more support for low-income
+In November 2021 parliament approved the transposition of EU
+directives on renewable energy and the internal electricity market
+into Italian law. The budget law extended tax credits through 2022
+to increase the energy efficiency of residential buildings. It also
+extended through 2023 a scheme that provides incentives for com-
+prehensive building renovations.
+Back
+A new government supported by a broad majority took office in Italy
+in January 2021. It is led by Mario Draghi, former president of the
+European Central Bank. The new government established a Ministry
+for Ecological Transition. The new ministry combines responsibilities
+for the energy sector that were formerly assigned to the Environment
+Ministry and the Ministry for Economic Development.
+The Dutch cabinet earmarked €3.2 billion to support primarily
+private households that could no longer pay all or part of their bills
+because of higher energy prices. Legislation such as a clean energy
+package, a heating law, and a roughly €500 million energy-conser-
+vation package are expected to take effect at the beginning of 2022.
+A new government made up of the previous coalition partners was
+formed just before Christmas. The new coalition agreement includes
+a commitment to more renewable energy generation, more hybrid
+heat pumps, and the construction of two NPPs. It also sets a target
+for the Netherlands to reduce its carbon emissions by 55 percent
+by 2030.
+Netherlands
+The Covid-19 pandemic severely impacted the United Kingdom in
+2021 as well. The successful introduction of vaccines enabled large
+parts of the economy to get back on track. After a sharp downturn
+in 2020, the economy grew by around 6.5 percent in 2021. Dra-
+matically higher energy costs became a key political issue. Energy
+suppliers with a low equity ratio and inadequate risk management
+were no longer able to supply energy to their customers at the con-
+tractually agreed-on price. As a result, numerous suppliers had to
+cease operations. The energy regulator, the Office of Gas and Elec-
+tricity Markets ("Ofgem"), responded in November 2021 by submit-
+ting a series of proposals under which companies would be subject
+to stricter rules and controls. The U.K. government also published a
+net-zero strategy. Government advisors consider it to be a viable
+roadmap for the United Kingdom to achieve its 2050 climate tar-
+gets. The strategy focuses on creating a regulatory framework and
+encouraging private-sector investment but includes only limited
+public funding.
+United Kingdom
+60
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Employees
+Italy
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+To achieve the new and more ambitious climate targets, alongside
+the KSG the German federal government that was initially in office
+in 2021 adopted a German Climate Package. One of its aims is to
+raise carbon prices. However, no specific figure or date was stipu-
+lated. Another aim is to accelerate renewables expansion as well as
+In addition to dealing with the Covid-19 pandemic, climate protec-
+tion was a dominant topic of policy debate in Germany as well. On
+March 24, 2021, the German Federal Constitutional Court ruled that
+the Climate Protection Act of 2019 (German abbreviation: "KSG")
+was partially unconstitutional; it published the ruling on April 29,
+2021. The German federal government and parliament subsequently
+adopted amendments for key aspects of KSG 2019. Their purpose
+is for Germany to achieve climate neutrality faster than previously
+planned. Climate neutrality is to be achieved by 2045, and the GHG
+reduction target for 2030 was raised to 65 percent. In addition,
+separate targets for 2030 were set for individual sectors of the
+economy. Non-sector-specific carbon reduction targets were set
+for 2031 to 2040. Other amendments included targets for the
+federal government's investment and procurement projects so that
+they too help reduce GHG emissions
+Germany
+On December 15, 2021, the Commission presented another package
+of measures to implement the European Green Deal. The Hydrogen
+and Gas Market Decarbonization package aims to gradually replace
+fossil gas with low-carbon and renewable alternatives in order to
+achieve climate neutrality. The package contains numerous legisla-
+tive proposals for, among other things, adapting internal gas market
+rules (particularly with regard to hydrogen), reducing methane
+emissions in the energy sector, and enhancing the energy efficiency
+of buildings.
+The taxonomy envisages the achievement of other environmental
+objectives, without yet describing them in detail. It essentially requires
+companies to disclose for 2021 how many of their activities were in
+categories covered by the taxonomy. For the following year, they
+will be required to report the proportion of their activities that are
+or are not environmentally sustainable pursuant to the taxonomy
+based on key performance indicators such as revenues, investments,
+and operating expenses. The taxonomy's purpose is to encourage
+financial markets to invest and finance more sustainably. E.ON, a
+company that propels the energy transition and has a sustainability-
+oriented corporate strategy, welcomes the regulations; E.ON's
+planned investments are already largely taxonomy-aligned.
+The taxonomy, which was originally intended to align financial mar-
+kets with sustainability, sets criteria for companies' environmentally
+sustainable activities. These activities-which include, for example,
+the operation of production facilities-must promote climate pro-
+tection or adaptation to climate change in order to be classified as
+sustainable.
+The EU Taxonomy Regulation-which was published on April 21,
+2021, and largely took effect on January 1, 2022-provides a foun-
+dation for more sustainable economic activity. Supplementary reg-
+ulations are foreseen. These include, for example, the question of
+whether the taxonomy will treat nuclear energy and natural gas as
+green technologies. The Commission proposed this to the member
+states on December 31, 2021. This triggered a policy debate in the
+member states that is not expected to be concluded until the second
+quarter when the associated EU legislation takes effect.
+The European Parliament and member states began consultations
+on the Fit for 55 package in the fourth quarter of 2021. Negotiations
+and consultations with the member states on the various pieces of
+legislation will continue in 2022 and probably beyond.
+Overall, all measures aim to reduce GHG emissions across the board
+and stimulate investments in climate-protection technologies.
+E.ON welcomes the strong emphasis on climate protection. From
+E.ON's point of view, however, Europe's legislation in particular gives
+too little consideration to the significant role that energy infrastruc-
+ture plays in the transformation of energy systems.
+revises rules for land use and forestry.
+provides relief for consumers who are financially strained by
+rising carbon prices
+E.ON Annual Report 2021
+sets stricter emission standards for passenger cars and light
+commercial vehicles
+creates an additional emissions trading scheme for the buildings
+and transport sectors
+reforms the EU Emissions Trading Scheme ("EU ETS") and
+extends it to aviation
+•
+Among other things, Fit for 55:
+The package builds on the Commission's European Green Deal from
+2020. Fit for 55 reaffirms Europe's growth strategy to combine cli-
+mate protection and prosperity. It links post-pandemic economic
+recovery and the resilience of member states' economic models to
+climate and environmental protection; this is intended to give com-
+panies planning security for investments.
+57
+2.4
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Corporate Profile → Strategy and Innovation
+→ Internal Control System for the Accounting Process
+• increases the proportion of renewables
+Contents
+Search
+↑
+Combined Group Management Report
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The elections for the 20th German Bundestag on September 26,
+2021, led to the creation of a new federal government consisting of
+three parties (SPD, Bündnis 90/the Greens, FDP). Climate protection
+is one of the focal points of the new coalition. The coalition agree-
+ment includes, among other things, the following points:
+A ruling by the European Court of Justice ("ECJ") also has an impact
+on the regulatory environment for network operators. In infringe-
+ment proceedings against Germany, the ECJ ruled on September 2,
+2021, that Germany was in breach of the EU Energy Directive (EU
+RL 2019/944) and that the BNetzA was not acting independently
+enough. The ECJ ruling only affects the future; all decisions previ-
+ously made by the BNetzA remain valid. The ruling will necessitate
+reforms to parts of Germany's energy law. Germany's previous reg-
+ulations will nevertheless remain applicable until new legislation is
+passed. A transition period of around 18 to 24 months is expected
+until a new legal framework takes effect.
+A regulation passed simultaneously with the EnWG will in the
+future exempt green hydrogen (that is, H₂ produced with renewable
+electricity) from the EEG surcharge. This is intended to spur the
+expansion of hydrogen. However, this regulation is subject to the
+provisions of European law.
+The Münster Higher Administrative Court's ruling of March 4, 2021,
+temporarily suspended the market declaration and thus the rollout
+of smart meters. As part of the amended EnWG, amendments were
+therefore also made to the Metering Point Operation Act (German
+abbreviation: "MsbG"). The amendments are an important step for
+the energy industry to regain legal certainty with regard to the roll-
+out and to accelerate the digitalization of the energy transition.
+E.ON's distribution network operating companies initiated legal
+action against the ROI set for the fourth regulatory period, because
+the expert opinions obtained by the BNetzA show that, among
+other things, the calculation of the market risk premium was incor-
+rect. To ensure the investments in distribution networks needed
+for the energy transition, Germany's regulatory scheme must be
+competitive internationally.
+The financial conditions of the respective regulatory period are
+important for network operators in Germany, as they affect their
+investments in network expansion in the years ahead. This applies
+in particular to power distribution networks, which form the back-
+bone of the energy transition. To set the return on investment ("ROI")
+for the fourth regulatory period (2023 to 2027 for gas, 2024 to
+2028 for electricity), the German Federal Network Agency (German
+acronym: "BNetzA") initially commissioned several expert opinions
+and then conducted a consultation process. The BNetzA subse-
+quently set the ROI for new assets (capitalized from 2006 onward)
+at 5.07 percent and for old assets (capitalized before 2006) at
+3.51 percent; both figures are before corporate tax. The new ROIs are
+therefore significantly lower than those for the current regulatory
+period (6.91 percent for new assets and 5.12 for old assets). The
+BNetzA justifies this reduction mainly by the general decline in inter-
+est rates, which is reflected above all in the risk-free interest rate.
+generation facilities (including renewable generation and CHP facil-
+ities) with more than 100 kW or controllable feed-in facilities with
+5.6 kW or more to be included in the redispatch process.
+The EnWG amendments relating to electricity networks include
+the remuneration of network investments, increased transparency
+obligations for the publication of network data, and new rules for
+managing network bottlenecks (redispatch). Redispatch involves
+network operators modifying the power fed into the high-voltage
+network by power plants with the aim of avoiding overloads in the
+network. From October 1, 2021, the revised rules require all voltage
+levels of the network to be integrated and that smaller storage and
+For example, energy providers will be subject to additional informa-
+tion and transparency requirements. In the future, contracts will
+have to be in text form across all sales channels. This eliminates the
+possibility of concluding contracts verbally or by telephone. However,
+it also creates new legal uncertainties for online contracts.
+In 2021 lawmakers also amended various sections of the Energy
+Industry Act (German abbreviation: "EnWG"). These relate to
+aspects of energy infrastructure and power generation, but also to
+customer-related solutions and thus the relationship between
+energy suppliers and consumers.
+the ramp-up of hydrogen. For this purpose, an Immediate Action
+Program for 2022 with a budget of €8 billion was launched as well,
+although it has no practical relevance because actual spending levels
+will not be set until the 20th legislative period (this began with the
+inaugural session of the 20th German Bundestag on October 26,
+2021). The federal cabinet is expected to revisit the contents of the
+Immediate Action Program in its draft for the 2022 federal budget.
+58
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+Back
+Netherlands
+Macroeconomic Environment
+Germany
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→ Business Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Forecast Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+52
+Gender, Age Structure, and Part-time
+Employment
+At year-end 2021, 32 percent of E.ON's workforce were women,
+the same as a year earlier.
+Apprentices in Germany
+E.ON continues to place great emphasis on vocational training for
+young people. The E.ON Group had 2,308 apprentices in Germany
+at year-end 2021. This represented 5.8 percent of E.ON's total
+workforce in Germany, slightly less than a year earlier (6 percent).
+Back
+E.ON provides vocational training in about 20 careers and also
+offers training and practically oriented dual work-study programs in
+up to 25 degree areas in order to meet its own needs for skilled
+workers and to take targeted action to address the consequences of
+demographic change. In addition, E.ON offers young people the
+opportunity to receive training to qualify for an apprenticeship.
+Percentages
+Energy Networks
+Customer Solutions
+Corporate Functions/Other
+Adjusted core business
+Non-Core Business
+E.ON Group
+Dec. 31, 2021
+Dec. 31, 2020
+Apprentices in Germany
+23
+Proportion of Female Employees
+22
+↑
+Contents
+3,290
+2,645
+2,844
+2,422
+2,357
+2,390
+2,333
+1,859
+1,824
+1,848
+1,810
+Search
+1,594
+1,589
+1,587
+1,338
+1,461
+1,316
+1,429
+72,169
+77,488
+69,733
+74,866
+E.ON Annual Report 2021
+1,590
+3,016
+44
+49
+The turnover rate resulting from voluntary terminations averaged
+4.5 percent across the organization, which was higher than in the
+prior year (3.5 percent).
+Dec. 31, 2021
+2,064
+Headcount
+Dec. 31, 2020
+Percentage of workforce
+Dec. 31, 2021
+Dec. 31, 2020
+2,098
+7.4
+7.6
+A total of 8,814 employees, or 12 percent of the E.ON Group work-
+force, were on a part-time schedule at year-end 2021. 5,849 of
+these, or 66 percent, were women.
+65
+1.0
+0.8
+138
+199
+4.1
+5.4
+2,267
+2,356
+6.0
+6.2
+41
+59
+44
+30
+50
+49
+Energy Networks
+32
+33
+Customer Solutions
+14
+14
+Corporate Functions/Other
+32
+32
+Adjusted core business
+31
+Non-Core Business
+E.ON Group
+Employees by Age
+Percentages
+30 and younger
+31 to 50
+51 and older
+Dec. 31, 2021
+Dec. 31, 2020
+20
+20
+49
+At year-end 2021 the average member of the E.ON Group workforce
+was about 42 years old and had worked for the Company for 14 years.
+United Kingdom
+2,943
+2,958
+Back
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+51
+Workforce Figures
+At year-end 2021 the E.ON Group had 69,733 employees in its
+core workforce. Part-time positions were taken into account on a
+pro rata basis. On balance, E.ON's workforce declined last year by
+5,133 employees, or 7 percent.
+These workforce figures do not include apprentices. At year-end
+2021, 2,308 young people were learning a profession at E.ON in
+Germany (prior year: 2,395).
+↑
+The decrease in the Customer Solutions' core workforce mainly
+reflects restructuring projects, primarily in the United Kingdom and
+Germany, as well as the sale of operations in Hungary, Belgium, and
+the Netherlands.
+Core Workforce by Country¹
+Geographic Structure
+At year-end, 34,559 FTE, or 50 percent of all employees, were
+working outside Germany, slightly lower than at year-end 2020
+(52 percent).
+Core Workforce¹
+FTE¹
+Dec. 31, 2021 Dec. 31, 2020
++1-%
+Germany
+Energy Networks
+38,032
+39,066
+The reduction in the number of employees at Corporate Functions/
+Other resulted predominantly from voluntary terminations in con-
+junction with the innogy integration.
+-3
+Search
+39
+Annual change in percent
+GDP Growth in Real Terms in 2021
+European countries experienced positive effects from the agree-
+ment between the European Union and the United Kingdom on the
+terms of future cooperation and the cost of Britain's exit from the
+single market and customs union. The European economy proved
+resilient overall in the second half of 2021.
+Rising demand enabled industry in particular to recover from the
+dramatic, pandemic-related slump of early 2020. The situation in
+personal services, by contrast, remained difficult in 2021. China,
+other Asian countries, and the United States benefited from high
+demand for goods. U.S. production in 2021, for example, returned
+to the level of 2019. Overall, however, the economic recovery was
+tepid and its pace moderate. Experts expect this trend to continue.
+After the number of people infected and ill with the Covid-19 virus
+rose worldwide in the fourth quarter of 2021, some governments
+again imposed limitations and restrictions. The omicron variant of
+the Covid-19 virus was classified as a concern by the World Health
+Organization in late November and continued to spread rapidly
+after the New Year.
+The global economy trended upward in 2021. The recovery's pace
+and scope depended on the success in combating the Covid-19
+pandemic. Vaccination rates increased in advanced economies as
+the year moved forward, leading to a faster economic recovery,
+whereas access to vaccines remained limited in other regions,
+including many emerging economies. This had an impact on eco-
+nomic development as well.
+Macroeconomic and Industry Environment
+Business Report
+53
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Forecast Report
+Contents
+→Business Report
+→ Disclosures Regarding Takeovers
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+6.0
+5.8
+2,395
+2,308
+2.0
+2.2
+Combined Group Management Report
+2,999
+United Kingdom
+26,067
+¹Core workforce does not include apprentices, working students, or interns. Rounding differences are possible.
+2Full-time equivalent.
+Headcount
+FTE²
+Dec. 31, 2021
+Dec. 31, 2020
+Dec. 31, 2021
+Dec. 31, 2020
+36,530
+37,089
+35,174
+35,716
+E.ON Group
+9,786
+9,356
+11,689
+6,999
+6,731
+6,826
+6,575
+5,607
+7,965
+5,590
+7,940
+3,018
+12,223
+Customer Solutions
+The decline in Energy Networks' headcount is mainly attributable to
+the disposal of network operators in Hungary. The filling of vacancies
+to meet regulatory and legal requirements, particularly in Germany
+and Romania, had a countervailing effect. In addition, digitalization
+and demographic programs caused the workforce to expand, as did
+the establishment of business areas.
+Slovakia
+29,858
+-13
+Romania
+Corporate Functions/Other
+3,885
+4,124
+-6
+Hungary
+Adjusted core business
+67,984
+73,048
+Other
+-7
+Non-Core Business
+E.ON Group
+1,749
+69,733
+1,818
+-4
+Netherlands
+74,866
+-7
+Sweden
+Poland
+¹Core workforce does not include apprentices, working students, or interns. This figure reports
+full-time equivalents ("FTE"), not persons. Rounding differences are possible.
+Czech Republic
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Contents
+Back
+Combined Group Management Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+67
+The effects in connection with derivative financial instruments
+developed positively by €2,122 million to €3,250 million. The strong
+increase in commodity prices led to significant increases in the
+market value of unrealized sales and procurement transactions.
+E.ON recorded impairment charges in the 2021 financial year in
+particular at Energy Networks' operations in Slovakia (mainly on
+goodwill in conjunction with the reclassification of these operations
+as a disposal group) and on intangible assets at its operations in
+Romania. Impairment charges recorded in the prior year related in
+particular to Energy Networks' operations in Hungary (due mainly
+to the current restructuring of these operations; see page 39 >)
+as well as Customer Solutions' operations in the United Kingdom
+(primarily for software in conjunction with the ongoing restructuring
+program) and its operations in the Netherlands/Belgium (in particu-
+lar as part of the planned disposal of the Belgian sales business).
+Items resulting from the subsequent valuation of hidden reserves
+and liabilities as part of the purchase-price allocation for innogy are
+disclosed separately.
+The increase in other non-operating earnings is mainly attributable
+to valuation effects on non-current provisions, which were partly
+offset by negative valuation effects on bonds denominated in foreign
+currencies.
+The prior-year figure was adversely affected by valuation effects
+for repurchase obligations under IAS 32 and non-current provisions
+as well as realized effects from hedging transactions for certain
+currency risks.
+Reconciliation to Adjusted Net Income
+€ in millions
+EBIT
+Non-operating adjustments
+Fourth quarter
+Full year
+2021
+2020¹
+2021
+2020¹
+→ Disclosures Regarding Takeovers
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+→ Forecast Report
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+3,117
+3,102
+1,612
+1,939
+7,889
+6,905
+EBIT
+Non-operating adjustments
+Adjusted EBITDA
+¹Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020.
+lower income for prior periods compared with the prior year, and
+lower earnings relative to the prior year from the difference between
+the nominal interest rate and the effective interest rate of the innogy
+bonds adjusted due to the purchase-price allocation (see page 68 >).
+Net book gains were lower than the prior-year figure. The main fac-
+tor in the year under review was the transfer of the remaining stake
+in Rampion wind farm to RWE.
+Restructuring expenses were lower than in the 2020 reporting
+period and, as in the prior year, consisted primarily of expenditures
+in conjunction with the innogy integration and the restructuring of
+the sales business in the United Kingdom.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→Business Report
+1,513
+599
+6,509
+-358
+588
+846
+3,779
+2,698
+-99
+-190
+Search
+↑
+Back
+Combined Group Management Report
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+68
+Financial Situation
+Finance Strategy
+-391
+-57
+-110
+-720
+2,883
+68
+-21
+167
+18
+1,581
+578
+6,676
+2,901
+830
+-786
+-1,953
+875
+795
+1,088
+4,723
+3,776
+-97
+-185
+-553
+510
+E.ON's finance strategy focuses on capital structure. At the fore-
+front of this strategy is ensuring that E.ON always has access to
+capital markets commensurate with its debt level.
+800
+27
+213
+5,305
+1,310
+82
+180
+818
+871
+29
+206
+386
+702
+Income/Loss from continuing operations before financial results and income taxes
+Income/Loss from equity investments
+1,513
+599
+6,509
+2,883
+68
+-21
+167
+1,402
+18
+40
+253
+Income taxes
+Financial results
+Fourth quarter
+Full year
+2021
+2020¹
+2021
+2020¹
+1,402
+212
+5,305
+1,270
+907
+156
+4,691
+1,017
+495
+56
+614
+1
+1,581
+578
+6,676
+557
+Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction
+Other non-operating earnings
+246
+325
+760
+802
+-65
+457
+-388
+246
+Adjusted EBIT
+795
+1,088
+4,723
+3,776
+Impairments (+)/Reversals (-)
+17
+21
+49
+440
+473
+428
+Impairments (+)/Reversals (-)
+2,901
+-786
+510
+-1,953
+875
+Net book gains (-)/losses (+)
+8
+-40
+-26
+Scheduled depreciation and amortization
+-258
+222
+266
+511
+656
+Effects from derivative financial instruments
+-1,625
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+-3,250
+-1,128
+Restructuring expenses
+Attributable to shareholders of E.ON SE
+Attributable to non-controlling interests
+Income/Loss from discontinued operations, net
+Income/Loss from continuing operations
+With its target capital structure E.ON aims to sustainably secure a
+strong BBB/Baa rating.
+The low interest-rate environment continued. In some cases this led
+to negative real interest rates on asset-retirement obligations. As in
+prior years, provisions therefore exceeded the actual amount of
+asset-retirement obligations at year-end 2021 without factoring in
+discounting and cost-escalation effects. This limits the relevance of
+economic net debt as a key figure. E.ON wants economic net debt to
+serve as a useful key figure that aptly depicts E.ON's debt situation.
+In the case of material provisions affected by negative real interest
+rates, E.ON has therefore used the aforementioned actual amount
+of the obligations instead of the balance-sheet figure to calculate
+economic net debt since year-end 2016.
+¹Includes private placements.
+co
+6
+2
+0
+At December 31, 2021
+2022 2023 2024 2025 2026 2027 2028 2029 2030+
+E.ON Annual Report 2021
+III
+Contents
+Search
+↑
+E.ON Annual Report 2021
+Customer Solutions' investments of €710 million were 12 percent
+below the prior-year figure (€803 million). EIS's investments across
+all regional markets accounted for fully €409 million of total invest-
+ments. Investments in Sweden were significantly below the prior-
+year level due to the completion of the Högbytorp project. In addi-
+tion, the prior-year figure included expenditures for the acquisition
+of Coromatic, a leading supplier of critical building infrastructure
+in Scandinavia. Investments in the United Kingdom, most of which
+went toward the expansion of smart meters, declined as well. By
+contrast, E.ON Business Solutions invested significantly more in
+projects relating to embedded energy supply than in the prior year.
+Energy Networks' investments of €3,520 million were 4 percent
+above the prior-year level of €3,369 million. Investment activity
+in all regions focused in part on new connections and the renewal
+of network infrastructure. In addition, more was invested in the
+expansion of smart meters in Sweden than in the prior year, and
+replacement investments increased as well.
+The E.ON Group's cash-effective investments in the 2021 financial
+year increased by €591 million year on year to €4,762 million.
+Investments in property, plant, and equipment and intangible assets
+totaled €4,487 million (prior year: €4,362 million). Share investments
+amounted to €275 million versus -€191 million in the prior year.
+Investments
+E.ON will continue to take into account the trust of rating agencies,
+investors, and banks using a clear strategy and transparent commu-
+nications and therefore holds events that include an annual infor-
+mational meeting for its core group of banks.
+Standard & Poor's
+4
+Moody's
+30.7
+3.8
+Operating earnings attributable to non-controlling interests
+Adjusted net income
+¹Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020.
+Reconciliation to Adjusted Net Income
+Adjusted net income of €2,503 million was 53 percent above the
+prior-year figure of €1,638 million. Besides the above-described
+effects in the reconciliation to adjusted EBIT, this reconciliation
+includes the following items:
+Interest income/expenses includes non-operating components,
+which improved by €33 million year on year, principally because of
+positive valuation effects on securities recorded at fair value on
+the balance-sheet date. The adverse effects included a reduction
+in income for prior years and lower earnings from the difference
+between the nominal interest rate and the effective interest rate of
+the innogy bonds adjusted due to the purchase-price allocation.
+The tax rate on operating earnings of continuing operations was
+23 percent (prior year: 24 percent). The principal reason for the
+decline was the utilization of tax loss carryforwards, which lowered
+the tax rate.
+Non-controlling interests' share of operating earnings declined
+slightly, mainly because of lower operating earnings from minority-
+held companies.
+E.ON Annual Report 2021
+Contents
+0.0
+0.0
+8
+Commercial paper
+1.5
+0.0
+Other liabilities
+Total
+4.8
+32.7
+Outlook
+Stable
+Stable
+Short term
+P-2
+A-2
+Long term
+Baa2
+BBB
+710
+Customer Solutions
+4%
+3,369
+3,520
++1-%
+2020
+2021
+€ in millions
+Energy Networks
+Investments
+E.ON's creditworthiness has been assessed by Standard & Poor's
+("S&P") and Moody's with long-term ratings of BBB and Baa2,
+respectively. The outlook for both ratings is stable. In both cases
+the ratings are based on the expectation that, over the near to
+medium term, E.ON will be able to maintain a debt ratio commen-
+surate with these ratings. S&P's and Moody's short-term ratings
+are unchanged at A-2 and P-2, respectively.
+Alongside financial liabilities, E.ON has, in the course of its business
+operations, entered into contingencies and other financial obliga-
+tions. These include, in particular, guarantees, obligations from legal
+disputes and damage claims, as well as current and non-current
+contractual, legal, and other obligations. Notes 27, 28 >, and 32 →
+to the Consolidated Financial Statements contain more information
+about E.ON's bonds as well as liabilities, contingencies, and other
+commitments.
+E.ON also has access to €3.5 billion syndicated credit facility, which
+was concluded on October 24, 2019. It originally had a five-year term
+and includes two options to extend the facility, in each case for one
+year. The first and second options to extend the facility for another
+year were exercised in October 2020 and October 2021, respectively.
+This extended the term of the credit facility to October 24, 2026.
+The credit margin is linked, among other things, to the development
+of certain ESG ratings, which gives E.ON financial incentives to pur-
+sue a sustainable corporate strategy. The ESG ratings are set by
+three renowned agencies: ISS ESG, MSCI ESG Research, and Sus-
+tainalytics. The facility serves as a reliable, ongoing general liquidity
+reserve for the E.ON Group and can be drawn on as needed. The
+credit facility is made available by 21 banks which constitute E.ON'S
+core group of banks.
+In addition to its DIP, E.ON has a €10 billion Commercial Paper ("CP")
+program and a US$10 billion CP program, under which it can issue
+short-term notes. €1.5 billion of CP was outstanding at year-end
+2021 (prior year: €0).
+70
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+803
+-12%
+Thereof EIS business
+409
+14%
+4,171
+4,762
+E.ON Group investments
+8%
+275
+298
+15%
+3,896
+Taxes on operating earnings
+4,464
+E.ON SE Ratings
+-33%
+-3
+-4
+Consolidation
+187%
+-273
+238
+Corporate Functions/Other
+Investments in core business
+Non-Core Business
+E.ON manages its capital structure using debt factor, which is equal
+to economic net debt divided by adjusted EBITDA; it is therefore a
+dynamic debt metric. Economic net debt includes not only financial
+liabilities but also provisions for pensions and asset-retirement obli-
+gations.
+Operating earnings before taxes
+Net interest income/loss
+82
+-24,675
+-23,956
+-6,082
+-8,088
+-8,016
+-8,692
+Economic net debt
+-38,773
+-40,736
+¹Bonds issued by innogy are recorded at their nominal value. The figure shown in the Consolidated
+Balance Sheets is €1.9 billion higher (year-end 2020: €2.1 billion higher).
+2This figure is not the same as the asset-retirement obligations shown in the Consolidated Balance
+Sheets (€9,230 million at December 31, 2021; €10,194 million at December 31, 2020). This is
+because economic net debt is calculated in part based on the actual amount of E.ON's obligations.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+391
+Risks and Chances Report
+FX hedging adjustment
+Net financial position
+Provisions for pensions
+Asset-retirement obligations²
+-32,730
+Pursuant to IFRS valuation standards, innogy's financial liabilities at
+the time of initial consolidation were recorded at their fair value.
+This fair value is significantly higher than the original nominal value
+because interest-rate levels have declined since innogy's bonds
+were issued. The purchase-price allocation yielded a difference
+between the nominal value and the fair value, which results in addi-
+tional liabilities of €1.9 billion at year-end 2021. This amount will
+be recorded in financial earnings as a reduction in expenditures and
+spread out over the maturity period of the respective bonds. These
+balance-sheet and earnings effects do not alter the interest and
+principal payments. To manage economic net debt, E.ON continues
+to use the nominal amount of financial liabilities, which deviates
+from the figure shown in its balance sheets.
+E.ON aims for a debt factor of 4.8 to 5.2. The debt factor at year-end
+2021 of 4.9 was within the target range.
+Economic Net Debt
+Economic net debt declined by €1.9 billion relative to year-end 2020
+(€40.7 billion) to €38.8 billion.
+Financial liabilities of €32.7 billion reflect E.ON SE's issuance of two
+bonds in the reporting year totaling €1.35 billion as well as the
+repayment of three bonds (GBP and EUR) totaling €2.4 billion. The
+increase in financial liabilities is also attributable to both adverse
+currency-translation effects on bonds denominated in foreign cur-
+rencies (effects that were largely offset in E.ON's net financial posi-
+tion by positive effects from foreign-currency hedging) and short-
+term interim financing.
+E.ON's net financial position increased by €0.7 billion compared with
+year-end 2020 to -€24.7 billion. E.ON SE's dividend payment and
+investment expenditures were largely offset, in part by operating
+cash flow, disposals (in particular as part of the reorganization of
+business activities in Hungary; see page 39 → and Note 30 → to
+the Consolidated Financial Statements), and margin payments in
+conjunction with the development of commodity prices.
+The increase in actuarial discount rates for pensions, which led to a
+reduction in defined benefit obligations, had a positive impact on
+economic net debt, as did the return on plan assets (see Note 25 →
+to the Consolidated Financial Statements). The reduction in provi-
+sions for asset-retirement obligations mainly results from the utili-
+zation of provisions for asset-retirement obligations in the nuclear
+energy business (see Note 26 > to the Consolidated Financial
+Statements). Because the utilization affects operating cash flow, it
+has no overall effect on economic net debt.
+Economic Net Debt
+€ in millions
+Liquid funds
+December 31
+2021
+2020
+5,965
+4,795
+Non-current securities
+Financial liabilities¹
+1,699
+1,887
+-30,720
+→ Corporate Governance Declaration
+69
+Funding Policy and Initiatives
+JPY
+0.3
+0.3
+Other currencies
+0.1
+0.2
+10
+Promissory notes
+-880
+-653
+-129
+-107
+-396
+-407
+360
+549
+2,503
+1,638
+Adjusted EBIT
+12-
+0.8
+0.9
+USD
+The key objective of E.ON's funding policy is for the Company to
+have access to a variety of financing sources at all times. E.ON
+achieves this objective by using different markets and debt instru-
+ments to maximize the diversity of its investor base. E.ON issues
+bonds with tenors that give its debt portfolio a balanced maturity
+profile. Moreover, large-volume benchmark issues may in some
+cases be combined with smaller issues, private placements, and/or
+promissory notes. Furthermore, from 2019 onward E.ON has
+issued green bonds and has since established them in its financing
+mix. In the future, E.ON intends to cover more than 50 percent of
+its annual financing requirements with green bonds.
+At the beginning of March 2021, E.ON presented a new Green Bond
+Framework. In addition to compliance with the ICMA Green Bond
+Principles, which until now set the standard for green bonds on the
+capital market, the new E.ON framework is one of the first in Europe
+to meet the then-current criteria of the EU Taxonomy Regulation on
+sustainable economic activities ("EU taxonomy"). In December 2021
+E.ON revised its green bond framework to reflect the now finalized
+version of the EU taxonomy. The EU taxonomy defines which eco-
+nomic activities are to be classified as ecologically sustainable and
+thus sets a Europe-wide standard for sustainable investments.
+E.ON's Green Bond Framework is geared toward sustainable projects
+at both Energy Networks and Customer Solutions.
+External funding is generally carried out by E.ON SE, and the funds
+are subsequently on-lent in the Group. In the past, external funding
+was also carried out by the Company's Dutch finance subsidiary,
+E.ON International Finance B.V. ("EIF"), under guarantee of E.ON SE,
+and by innogy SE and innogy Finance B.V. under guarantee of
+innogy SE. As part of the process of integrating the innogy Group,
+E.ON harmonized the E.ON Group's funding structure. It offered
+innogy bondholders the option to change the debtor of their bonds
+to E.ON by means of consent solicitations or conversion offers. All
+bonds now have E.ON SE as debtor or guarantor (with EIF as issuer).
+In 2021 E.ON paid back in full maturities of €2.4 billion. E.ON
+issued new debt totaling €1.35 billion (see pages 36 and 37 →).
+Financial Liabilities
+€ in billions
+Bonds¹
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE and EIF's currently outstanding bonds were
+issued under a Debt Issuance Program ("DIP"). Similarly, innogy and
+innogy Finance B.V. bonds were formerly issued under the former
+innogy Group's DIP. A DIP simplifies a company's ability to issue debt
+to investors in public and private placements in flexible time frames.
+E.ON SE's DIP was last updated in March 2021 with a total volume
+of €35 billion, of which about €16.1 billion was utilized at year-end
+2021. E.ON SE intends to renew the DIP in 2022.
+Maturity Profile of Bonds Issued by E.ON SE,
+and E.ON International Finance B.V.
+Non-operating interest expense (+)/income (-)
+2021
+€ in billions
+26.4
+26.9
+EUR
+18.0
+18.4
+GBP
+7.1
+7.2
+December 31
+2020
+Net income/loss
+-971
+Reconciliation to Adjusted EBIT
++/-%
+2020
+2021
++/-%
+2020
+2021
+Full year
+Fourth quarter
+E.ON Group
+Customer Solutions
+Non-Core Business
+Corporate Functions/Other
+Consolidation
+Energy Networks
+€ in millions
+Sales
+€ in millions
+Customer Solutions' sales rose by €12.8 billion to €61.5 billion. The
+increase in sales mainly reflected the settlement of derivatives amid
+higher prices on commodity markets (€4.9 billion). Also, sales volume
+rose in nearly all E.ON markets owing primarily to cooler weather.
+In addition, the passthrough of increased cost components led to
+higher sales in Germany and the United Kingdom. The inclusion of
+VSEH in Slovakia for the entire year was another positive factor.
+By contrast, changes in the customer portfolio, in part in Germany,
+led to a volume-driven decline in sales.
+Energy Networks' sales of €18.3 billion were €0.3 billion above the
+prior-year figure. The improvement resulted in part from cooler
+weather and the recovery from the Covid-19 pandemic's adverse
+economic repercussions in 2020. The inclusion of VSEH's network
+business in Slovakia for the entire year was also a positive factor.
+Sales in the 2021 financial year rose by €16.4 billion year on year to
+€77.4 billion.
+Sales
+Earnings Situation
+63
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+→Business Report
+Combined Group Management Report
+→ Corporate Profile
+→ Employees
+→ Internal Control System for the Accounting Process
+5,005
+→ Strategy and Innovation
+5,047
+18,273
+-9,794
+-21,319
+77,358
+-117%
+66%
+17,630
+29,271
+-3,756
+-8,161
+527%
+2,755
+17,265
+389%
+1,762
+8,624
+18%
+1,388
+1,632
+55%
+360
+559
+26%
+48,659
+61,507
+63%
+14,217
+23,244
+2%
+17,936
+-1%
+Back
+↑
+Search
+→ Employees
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+E.ON surpassed several forecast metrics for the 2021 financial year,
+after increasing its full-year forecast significantly in August. The
+adjustment was attributable to the implementation of the public-
+law agreement of March 25, 2021, between the German federal
+government and the country's nuclear power plant operators. In
+this context, previous purchases of residual power output rights
+were refunded. This resulted in a positive effect of roughly €0.6 bil-
+lion, which was the reason for the increased forecast. E.ON raised
+its forecast range for adjusted EBIT for the 2021 financial year from
+€3.8 to 4.0 billion to €4.4 to 4.6 billion. It also raised the forecast
+range for adjusted net income, from €1.7 to 1.9 billion to €2.2 to
+2.4 billion. E.ON surpassed its revised guidance in particular owing
+to PreussenElektra's strong earnings performance. The main driv-
+ers were higher sales prices in the second half of the year and high
+capacity utilization at the remaining power plants. E.ON's core
+operating business also delivered a positive performance, owing in
+part to cost savings and higher sales volume in almost all regional
+markets.
+Business Performance
+measures.
+Romania's government did take action against rising energy prices,
+which were already among Europe's highest. However, industry and
+business associations heavily criticized the aid measures, which they
+considered too complex. The bureaucratic rules affect the energy
+industry as well. A new government took office in late November
+2021 after the previous governing coalition collapsed. A notable
+feature of the coalition agreement is that the two major parties will
+take turns appointing the prime minister, with a rotation scheduled
+for May 2023. In October 2021 the former government had pub-
+lished a national energy and climate protection program, which the
+European Commission contested because it did not accord with EU
+Slovenia held the EU Council Presidency in the second half of 2021,
+which, under the motto "Together. Resilient. Europe," it dedicated to
+the EU's economic recovery process. The government announced
+the introduction of energy vouchers for vulnerable customer groups,
+but by year-end had otherwise not taken any specific action against
+the rise in energy prices.
+Several energy suppliers in Slovakia became insolvent, with the
+result that 300,000 customers had to be served by other suppliers.
+Amendments to laws on the energy market and support for renew-
+ables were debated but not adopted.
+pre-
+In November 2021 Croatia's parliament passed a new Electricity
+Market Act that paves the way for a transition to cleaner energy
+and transposes the EU directive on common rules for the internal
+electricity market. A new Energy Efficiency Act took effect the
+vious April. Renewables legislation is expected.
+A reform of Poland's coal sector was not completed in 2021 owing
+to the resignation of a senior government official; in addition, the
+Minister of Climate and Environment was replaced in a government
+reshuffle in late October. Because the European Commission con-
+sidered Poland to be in violation of rule of law principles, funds from
+the EU recovery plan were withheld.
+As part of the agreements concluded in 2019 between E.ON, MVM,
+and Opus Global, E.ON restructured its activities in Hungary's
+energy market; this process was largely completed in 2021. New
+regulatory periods for network fees began in 2021 for electricity
+networks (on April 1) and for gas networks (on October 1); rules for
+greater energy efficiency took effect on January 1, 2021. Despite
+increased electricity consumption, the government announced that
+it would maintain state-regulated retail electricity prices at current
+levels. The government also introduced subsidies aimed at increas-
+ing the country's solar capacity by 200 MW.
+61
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Disclosures Regarding Takeovers
+→Business Report → Forecast Report
+Combined Group Management Report
+→ Employees
+→ Corporate Profile → Strategy and Innovation
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+→ Corporate Profile → Strategy and Innovation
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→Business Report
+→ Forecast Report
+Contents
+E.ON Annual Report 2021
+Cash provided by investing activities of continuing operations
+included cash-effective disposal proceeds totaling €1 billion in
+2021 (prior year: €2.8 billion).
+• Sale of the biogas business in Sweden.
+Sale of the universal service provider ("USP") business in
+Hungary and thus its reclassification as a disposal group
+•
+Sale of the sales business to industrial customers ("B2B")
+in the Netherlands
+•
+Sale of the retail business in Belgium
+•
+Reclassification of VSEH as a disposal group due to the planned
+combination with ZSE in Slovakia
+Reclassification of the contributed assets of Stromnetz-
+gesellschaft Essen, part of which is to be disposed of, as assets
+held for sale
+and the reclassification of the stake in Stadtwerke Duisburg
+as an asset held for sale
+-118%
+Disposal of 100 percent of innogy's eMobility activities in Europe
+Westenergie AG's consortium agreement with RheinEnergie
+•
+•
+•
+Acquisitions, Disposals, and Discontinued Operations in 2021
+In 2021 E.ON executed the following significant transactions and
+made the following reclassifications pursuant to IFRS 5. Note 5 →
+to the Consolidated Financial Statements contains detailed infor-
+mation about them:
+Cash provided by operating activities of continuing operations of
+€4.1 billion was considerably below the prior-year level (€5.3 billion).
+Temporary working capital effects at the balance-sheet date at the
+Energy Networks segment constituted the principal reason. This
+was partially counteracted by an improvement in EBITDA resulting
+from the refund of previous payments to acquire residual power
+output rights.
+Cash-effective investments of €4.8 billion were significantly above
+the prior-year level of €4.2 billion, albeit slightly below the forecast
+figure of €4.9 billion. Energy Networks' investments of €3.5 billion
+were above the forecast figure of €3.3 billion. Customer Solutions'
+investments of €0.7 billion were below the forecast figure of €1 bil-
+lion. The deviation is largely attributable to a delay in the implemen-
+tation of Energy Infrastructure Solutions' projects due to Covid-19.
+Investments of €0.2 billion at Corporate Functions/Other were in
+line with the forecast figure. Non-Core Business's investments of
+€0.3 billion were slightly below the forecast figure of €0.4 billion.
+In addition, E.ON recorded a cash-conversion rate ("CCR") of
+80 percent in the 2021 financial year. This is attributable in part to
+operating effects and changes in working capital. E.ON had planned
+to achieve an average CCR of about 100 percent for the 2021 to
+2023 financial years and expects to achieve it. CCR is equal to oper-
+ating cash flow before interest and taxes (€5.6 billion) divided by
+adjusted EBITDA (€7.9 billion), without factoring in payments for
+the dismantling of nuclear power stations (roughly -€0.7 billion).
+Adjusted EBIT for the E.ON Group of €4.7 billion was about €1 billion
+above the prior-year figure and thus slightly above the forecast
+range of €4.4 to €4.6 billion. Energy Networks recorded adjusted
+EBIT of €3 billion, which was within the forecast range of €2.9 to
+€3.1 billion. Customer Solutions' adjusted EBIT of about €0.9 billion
+was also within the forecast range of €0.8 to €1 billion. Adjusted
+EBIT recorded under Corporate Functions/Other of -€321 million
+reflects the forecast of roughly -€0.3 billion. Non-Core Business
+posted adjusted EBIT of €1.1 billion, which was slightly above the
+forecast range which had been adjusted to €0.8 to €1 billion in
+August 2021. Adjusted net income of €2.5 billion was around
+€1 billion above the prior-year level and therefore likewise slightly
+above the forecast range of €2.2 to €2.4 billion. Earnings per share,
+which are based on adjusted net income, amounted to €0.96 in the
+reporting period (prior year: €0.63). In E.ON's core business, this
+positive performance was partly attributable to higher power and
+gas sales volume due to cooler weather in almost all its markets.
+Cost savings, particularly at the U.K. sales business, contributed to
+the earnings improvement as well.
+Sales in the 2021 financial year increased by €16.4 billion to €77.4 bil-
+lion. Sales rose in particular at the Customer Solutions segment.
+The increase is partially attributable to the settlement of commodity
+derivatives. In addition, sales volume was higher in nearly all E.ON
+markets due primarily to cooler weather. The passthrough of higher
+cost components, in particular in Germany and the United Kingdom,
+was another positive factor.
+62
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Disclosures Regarding Takeovers
+•
+60,944
+Back
+Sales at Non-Core Business rose by €0.2 billion year on year to
+€1.6 billion. Higher sales prices in the second half of the year and
+high utilization rates of nuclear power plants ("NPPs") were the main
+drivers. This was partially offset because a portion of the refunds
+were passed through to the minority shareholders of E.ON's jointly
+owned NPPs. The refunds of previously purchased residual power
+output rights resulted from the implementation of the public law
+agreement of March 25, 2021, between the German federal govern-
+ment and the country's NPP operators.
+6%
+284
+115
+147%
+1.144
+413
+177%
+795
+1,088
+-27%
+4,723
+3,776
+25%
+1 Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020.
+E.ON Annual Report 2021
+3,363
+3,579
+-47%
+973
+478
+94%
+237
+-76
+-39
+-95%
+-321
+Contents
+-363
+6
+7
+-14%
+27%
+6
+-33%
+511
+12%
+Search
+↑
+Back
+Search
+↑
+Back
+→ Corporate Profile
+→ Employees
+→ Internal Control System for the Accounting Process
+→ Strategy and Innovation
+Combined Group Management Report
+→ Forecast Report
+Contents
+→Business Report
+→ Disclosures Regarding Takeovers
+→ Corporate Governance Declaration
+66
+Reconciliation to Adjusted EBIT
+Net income attributable to shareholders of E.ON SE and correspond-
+ing earnings per share amounted to €4.7 billion and €1.80, respec-
+tively. In the prior year E.ON recorded net income of about €1 billion
+and earnings per share of €0.39. The development of net income in
+the 2021 financial year mainly reflected asymmetrical valuation
+effects on unrealized sales and procurement transactions as a result
+of sharp increases in commodity prices. These effects had no impact
+on contractual payment streams or adjusted earnings.
+Pursuant to IFRS 5, income/loss from discontinued operations, net,
+is reported separately in the Consolidated Statements of Income.
+In the prior year this item included negative effects from the subse-
+quent adjustment of certain components of the purchase price in
+conjunction with the innogy acquisition and positive earnings from
+innogy's sales business in the Czech Republic (including deconsoli-
+dation income).
+E.ON's tax expense in 2021 amounted to €818 million (prior year:
+€871 million). In 2021, the tax rate was 13 percent (prior year:
+40 percent). In the reporting period, in particular the use of tax
+losses, market valuations of commodities with no tax effect and
+taxes for previous years led to a reduction in the tax rate. The reason
+for the high tax rate in the previous year was essentially a one-off
+effect from the valuation of deferred tax assets, which was partially
+offset by taxes for previous years.
+Financial results of -€386 million improved by €316 million relative
+to the prior year. An increase in income from equity investments and
+improved interest income/expenses, which benefited in part from a
+lower interest expense on debt financing, were positive factors.
+There were also countervailing effects in non-operating earnings.
+These include positive valuation effects on securities held for trading,
+Risks and Chances Report
+926
+E.ON Annual Report 2021
+Derived from adjusted EBIT, adjusted net income is an earnings fig-
+ure after interest income, income taxes, and non-controlling interests
+that likewise has been adjusted to exclude non-operating effects.
+The adjustments include the aforementioned items as well as inter-
+est expense/income not affecting net income (after taxes and non-
+controlling interests). Non-operating interest expense/income also
+includes positive effects from the resolution of valuation differences
+between the nominal and fair value of innogy bonds.
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+65
+Adjusted EBIT at Customer Solutions rose by €448 million year on
+year to €926 million. The reasons included a weather-driven increase
+in sales volume and operating improvements in nearly all E.ON
+markets. In addition, cost savings from the ongoing restructuring
+program in the United Kingdom had a positive impact on adjusted
+EBIT. Customer Solutions includes Energy Infrastructure Solutions
+("EIS"), which reported adjusted EBIT of €237 million in the report-
+ing period. EIS' activities are disclosed separately throughout this
+report.
+On the following pages, the disclosures in the Consolidated State-
+ments of Income are reconciled to the adjusted earnings metrics.
+Adjusted EBIT recorded at Corporate Functions/Other improved by
+€42 million year on year to -€321 million, principally because of
+cost savings. The non-recurrence of positive income from the stake
+in Rampion Renewables Ltd, which was sold in the first half of 2021,
+had a countervailing effect.
+German federal government and the country's NPP operators. In
+this context, previous purchases of residual power output rights were
+refunded. This resulted in a positive effect of roughly €0.6 billion.
+E.ON generates a large portion of its adjusted EBIT in very stable
+businesses. Regulated, quasi-regulated, and long-term contracted
+businesses accounted for the overwhelming proportion of E.ON's
+adjusted EBIT in 2021.
+E.ON's regulated business consists of operations in which revenues
+are largely set by law and based on costs. The earnings on these
+revenues are therefore extremely stable and predictable.
+E.ON's quasi-regulated and long-term contracted business consists
+of operations in which earnings have a high degree of predictability
+because key determinants (price and/or volume) are largely set for
+the medium to long term. Examples include the operation of indus-
+trial customer solutions with long-term supply agreements and the
+operation of heating networks.
+Merchant activities are all those that cannot be subsumed under
+either of the other two categories.
+Reconciliation to Adjusted Earnings Metrics
+Like net income, EBIT (earnings before interest and taxes) is affected
+by non-operating items, such as the marking to market of deriva-
+tives. Adjusted EBIT has been adjusted to exclude non-operating
+effects. The adjustments include net book gains, certain restructur-
+ing expenses, impairment charges and reversals, the marking to
+market of derivatives as well as related provisions for contingent
+losses, the subsequent valuation of hidden reserves and liabilities
+identified as part of the purchase-price calculation and allocation
+for the innogy transaction, and other non-operating earnings.
+The E.ON Group's adjusted EBIT totaled €4,723 million and was
+thus €947million above the prior-year figure. The increase resulted
+from the aforementioned developments at the core business and
+from effects at Non-Core Business. Alongside higher sales prices
+and sales volumes, these effects relate mainly to the implementa-
+tion of the public-law agreement of March 25, 2021, between the
+-73%
+4
+Adjusted EBIT
+Fourth quarter
+Full year
+2021
+2020¹
++1-%
+2021
+20201
++/-%
+The core business's adjusted EBIT in the 2021 financial year rose by
+€216 million to €3,579 million (prior year: €3,363 million). Energy
+Networks' adjusted EBIT of €2,970 million was €272 million below
+the prior-year figure. Earnings were adversely affected by effects
+resulting from higher commodity prices, which led in particular to
+higher costs for network losses. These will be offset over time under
+national regulatory schemes. This was compounded in Germany by
+several factors, including higher costs for maintenance and repair
+and a further increase in networks' supply tasks. Higher costs for
+upstream networks led to lower earnings in Sweden. Positive effects
+in East-Central Europe/Turkey resulting primarily from the inclusion
+of VSEH in Slovakia for the entire year were more than offset by
+higher costs for network losses.
+556
+-39%
+2,970
+3,242
+-8%
+25
+92
+Other Line Items from the Consolidated Statements of Income
+The Consolidated Statements of Income are on page 165 →.
+The increase attributable to consolidation mainly results from inter-
+nal transactions relating to central energy procurement.
+913
+E.ON Group adjusted EBIT
+Adjusted EBIT from core business
+Non-Core Business
+Thereof EIS business
+Corporate Functions/Other
+Consolidation
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+64
+Costs of materials of €78,096 million were considerably above the
+prior-year figure of €47,147 million. The increase primarily reflects
+higher prices on commodity markets. This resulted in higher direct
+procurement costs as well as adjustments to the corresponding
+expenses to the current market price at the time of delivery in the
+case of forward procurement contracts that are accounted for as
+derivative financial instruments pursuant to IFRS. Income from the
+settlement of commodity derivatives is recorded under other oper-
+ating income. The creation of provisions for pending transactions
+was also recognized in costs of materials. These provisions were
+mainly created for contracted sales transactions that are not subject
+to IFRS 9 (failed own-use transactions) but that are commercially
+part of a portfolio and that are partially offset by procurement trans-
+actions that are accounted for as derivative financial instruments.
+Consequently, the marking to market of procurement transactions
+results in other operating earnings.
+Depreciation charges declined from €4,166 million in the prior year
+to €3,922 million, principally because of lower impairment charges
+of €277 million (prior year: €479 million). Scheduled depreciation
+charges in the year under review were recorded primarily at Energy
+Networks' operations in Germany.
+Other operating expenses of €31,665 million were €20,746 million
+above the prior-year level (€10,919 million), chiefly because expen-
+ditures relating to derivative financial instruments (including cur-
+rency-translation effects) rose by €20,699 million to €26,486 million.
+In addition, expenditures relating to currency-translation effects
+increased by €244 million to €885 million.
+Income from companies accounted for under the equity method of
+€505 million was above the prior-year level (€408 million). Higher
+equity earnings from network companies in Germany and from
+shareholdings in Turkey were partially offset by the absence of
+income from Rampion Renewables Ltd after its sale to RWE.
+Other operating income totaled €47,383 million in 2021 (prior year:
+€8,907 million). Income from derivative financial instruments alone
+increased by €38,831 million year on year to €44,737 million, mainly
+because of sharply higher energy prices on commodity markets.
+Adjusted EBIT
+For the purpose of internal management control and as the most
+important indicator of businesses' long-term earnings power, in
+the year under review E.ON used earnings before interest and taxes
+that have been adjusted to exclude non-operating effects ("adjusted
+EBIT").
+Own work capitalized of €761 million was 12 percent above the
+prior-year figure of €680 million. Own work capitalized consisted
+predominantly of network investments as well as ongoing and
+completed IT projects.
+€ in millions
+Energy Networks
+Customer Solutions
+Sales recorded at Corporate Functions/Other of €17.3 billion
+were €14.5 billion above the prior-year figure. The increase is mainly
+attributable to the establishment of E.ON Energy Markets, a new
+central commodity procurement unit that began operating in Octo-
+ber 2020. Its business activities on commodity markets amid rising
+prices and the settlement of derivatives (€3.3 billion) contributed
+to this sales trend.
+E.ON Annual Report 2021
+Income from currency-translation effects of €478 million was
+€586 million lower than the prior-year figure of €1,064 million.
+Corresponding amounts resulting from currency-translation effects
+and derivative financial instruments are recorded under other oper-
+ating expenses. The sale of equity interests and securities resulted in
+income of €360 million (prior year: €469 million).
+2020
+2021
+Germany
+2020
+United Kingdom
+Belgium
+Other²,3
+Total
+2021
+2020
+2021
+2020
+2021
+30.6
+83.0
+3.4
+2.4
+72.6
+62.7
+18.8
+16.1
+23.2
+15.2
+2.1
+1.8
+Eledless.
+11.1
+56.1
+56.0
+Netherlands/
+135.1
+75
+The main drivers of power and gas sales in nearly all regional
+markets were cooler weather, which led to volume increases, and
+Covid-19-related sellbacks, particularly to the wholesale market.
+Power sales in Germany declined to 188 billion kWh (prior year:
+196.2 billion kWh), owing in part to portfolio streamlining among
+sales partners.
+4,988
+5,186
+2,182
+337
+371
+672
+689
+2,970
+3,242
+¹Includes effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition; the previous year was adjusted accordingly.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→Business Report
+→ Internal Control System for the Accounting Process
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Forecast Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+Customer Solutions
+Power and Gas Sales Volume
+Customer Solutions' power sales of 372.8 billion kWh were at the
+prior-year level, whereas its gas sales rose by 63 billion kWh to
+447.9 billion kWh.
+Power Sales¹
+111.0
+Customer groups
+2.2
+Wholesale market
+14.9
+14.7
+34.8
+29.1
+Customer groups
+20.4
+13.4
+Sales partners
+1,144
+8.7
+6.7
+6.9
+I&C
+25.2
+24.7
+9.0
+8.2
+2.3
+1.7
+6.2
+6.0
+7.7
+8.8
+Residential and SME
+Fourth quarter
+Billion kWh
+50.5
+20.6
+28.1
+Total
+2.2
+72.7
+49.8
+Sales partners
+4.7
+31.5
+32.0
+30.9
+28.5
+I&C
+6.3
+22.4
+21.8
+2021
+31.5
+Residential and SME
+Full year
+24.2
+22.8
+7.7
+2020
+1.7
+「」」」」
+38383
+18.8
+42.8
+55.5
+79.3
+32.7
+6.1
+Net income transferred to retained earnings
+Net income available for distribution
+188.0
+Other liabilities
+35,683
+34,714
+Liabilities to affiliated companies
+11,621
+13,731
+Bonds
+1,236
+1,055
+Provisions
+59,911
+10,643
+11,440
+Equity
+1,451
+Total
+4
+4
+obligations
+Asset surplus after offsetting of benefit
+66
+62
+Accrued expenses
+648
+2,646
+14,092
+16,476
+Current assets
+1,666
+Liquid funds
+2,257
+Total assets
+467
+Deferred income
+245
+10
+898
+Profit carryforward from the prior year
+2,114
+2,006
+Net income
+309
+26
+-624
+-101
+Other expenditures and income
+Taxes
+24
+2,405
+2,107
+-26
+Interest income/loss
+Income from equity interests
+2020
+2021
+Income Statement of E.ON SE (Summary)
+€ in millions
+Information on treasury shares can be found in Note 11 > and
+Note 20 to the Consolidated Financial Statements.
+E.ON SE issued new bonds and commercial paper in the amount
+of €2,860 million in the 2021 financial year and repaid bonds in the
+amount of €750 million. Energy price movements on wholesale
+markets were unusually volatile at the end of the year. The resulting
+fluctuations in liquidity led to the existence of investments in a
+money market fund as well as short-term funding by means of
+commercial paper and bank loans.
+The change in equity mainly reflects an allocation to retained
+earnings of €350 million, changes in treasury shares under the
+employee stock purchase program conducted in 2021, and a
+€430 million increase in net income available for distribution.
+The increase in other receivables mainly results from the acquisition
+of money market funds; the increase in other liabilities results from
+the incurrence of short-term financial liabilities.
+The changes in financial assets are mainly attributable to the reversal
+of impairment charges on equity interests in affiliated companies.
+The increase in receivables from affiliated companies and the decline
+in liabilities to affiliated companies result from changes in cash-
+pooling balances.
+59,911
+62,636
+Total equity and liabilities
+261
+Other receivables and assets
+45,749
+10,798
+12,553
+Receivables from affiliated companies
+12.0
+9.7
+6.6
+8.2
+20.5
+35.8
+61.1
+77.0
+Wholesale market
+271.2
+242.3
+66.0
+64.0
+78.9
+59.1
+3.8
+6.9
+98.8
+89.7
+30.2
+24.5
+93.4
+93.3
+31.9
+32.5
+102.7
+145.9
+22.1
+18.7
+130.7
+413
+Power sales
+29.7
+46,094
+Non-current assets
+45,688
+46,059
+Financial assets
+46
+15
+101.0
+22
+13
+Property, plant, and equipment
+Intangible assets
+December 31
+2020
+2021
+€ in millions
+Balance Sheet of E.ON SE (Summary)
+E.ON SE prepares its Financial Statements in accordance with the
+German Commercial Code, the SE Ordinance (in conjunction with
+the German Stock Corporation Act), and the Electricity and Gas
+Supply Act (Energy Industry Act).
+The 2021 Financial Year
+E.ON SE's Earnings, Financial, and Asset Situation
+79
+→ Corporate Governance Declaration
+Risks and Chances Report
+→Business Report
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+Combined Group Management Report
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+31.5
+62,636
+Belgium
+54
+49.0
+49.1
+26.8
+21.6
+35.9
+31.2
+158.1
+142.6
+I&C
+26.0
+25.2
+14.0
+10.3
+23.1
+26.6
+20.9
+23.0
+84.0
+85.1
+40.7
+Sales partners
+46.4
+」
+9.1
+2.5
+1.2
+83.1
+Total
+71.3
+50.6
+55.8
+32.7
+24.1
+22.1
+20.4
+21.2
+171.6
+Ege
+91.7
+35.1
+126.6
+Full year
+Residential and SME
+36.6
+45.3
+7.4
+6.0
+161.3
+103.9
+Total
+189.3
+155.8
+111.4
+93.8
+82.4
+74.0
+64.8
+61.3
+447.9
+385.0
+1 The amounts shown were aggregated to totals and not consolidated.
+2 Excludes E.ON Business Solutions.
+3 Prior-year figures were adjusted due to changes in segment reporting (this concerns the activities in Slovakia (VSEH) and in Croatia; see page 36).
+3Prior-year figures were adjusted due to changes in segment reporting (this concerns the activities in
+Slovakia (VSEH) and in Croatia; see page 36).
+E.ON Annual Report 2021
+7.4
+25.8
+32.6
+27.6
+6.8
+0.7
+1.4
+44.7
+53.5
+Customer groups
+109.0
+111.3
+70.4
+10.7
+66.2
+48.2
+57.4
+55.6
+286.7
+281.3
+Wholesale market
+80.3
+44.5
+41.0
+49.9
+11.2
+31.9
+13.6
+EEEc
+2020
+2021
+2020
+2021
+2020
+2021
+2020
+2021
+Total
+Other²,3
+Belgium
+United Kingdom
+Germany
+2020
+2021
+Netherlands/
+Billion kWh
+Gas Sales¹
+Customer Solutions' sales increased by 26 percent year on year to
+€61.5 billion. Adjusted EBIT rose by 94 percent to €926 million.
+Customer Solutions includes the EIS business, which recorded
+adjusted EBIT of €237 million in the reporting period. EIS's activities
+are disclosed separately throughout this report.
+Fourth quarter
+Residential and SME
+15.6
+14.5
+Sales partners
+25.9
+22.1
+7.7
+5.3
+7.6
+5.3
+2.7
+5.9
+Sales and Adjusted EBIT
+7.9
+I&C
+48.4
+52.4
+12.0
+12.6
+5.4
+8.2
+16.5
+16.0
+5.6
+Contents
+Customer Solutions' fully consolidated companies had about
+39.9 million customers at year-end 2021, slightly below the prior-
+year figure of 41.15 million. The acquisition of customers from
+energy companies that had filed for bankruptcy increased the number
+of customers in Germany to 14.4 million (prior year: 13.9 million).
+E.ON acquired customers from insolvent suppliers in the United
+Kingdom as well, which led to a slight increase in customers (2021:
+10.5 million; prior year: 10.3 million). The number of customers in
+the Netherlands/Belgium declined to 4.1 million (prior year: 4.6
+million) because of the disposal of the sales business in Belgium.
+Customer gains and losses encompassed power as well as gas cus-
+tomers. The total number of customers in the other countries
+where this segment operates fell.¹ Customer losses resulted in par-
+ticular from the restructuring of the business in Hungary and the
+related return of the ELMŰ universal service provider ("USP") license.
+These losses were not offset by the acquisition of customers of
+insolvent energy service providers in the Czech Republic and the
+acquisition of VSEH in Slovakia.
+76
+91.8
+196.2
+2.0
+2.3
+0.5
+14.1
+17.4
+Customer groups
+33.3
+37.0
+23,9
+21.5
+13.5
+13.0
+17.9
+20.2
+88.6
+Wholesale market
+38.0
+76.6
+19.3
+20.4
+73.7
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Forecast Report
+Combined Group Management Report
+→ Disclosures Regarding Takeovers
+→ Internal Control System for the Accounting Process
+→Business Report
+→ Strategy and Innovation → Employees
+→ Corporate Profile
+Customer Numbers
+Back
+Search
+Contents
+E.ON Annual Report 2021
+³Prior-year figures were adjusted due to changes in segment reporting (this concerns the activities in Slovakia (VSEH) and in Croatia; see page 36).
+2Excludes E.ON Business Solutions.
+1The amounts shown were aggregated to totals and not consolidated.
+371.1
+372.8
+77.9
+↑
+Search
+↑
+Back
+Station use, line loss, etc.
+€ in millions
+2021
+Preussen Elektra
+2020
+Generation Turkey
+Total
+2021
+2020
+2021
+2020
+Power sales
+7.9
+7.8
+Fourth quarter
+Full year
+Sales
+559
+360
+559
+7.8
+7.9
+Total
+0.4
+Power Generation
+Billion kWh
+PreussenElektra
+2021
+2020
+Sales and Adjusted EBIT
+Non-Core Business's sales of €1.6 billion were €0.2 billion above the
+prior-year figure. Adjusted EBIT rose by €0.7 billion to €1.1 billion.
+Sales at Non-Core Business rose by €244 million year on year to
+€1,632 million. Higher sales prices and higher sales volume due to
+high utilization rates of NPPs were the reasons at Preussen Elektra.
+This was partially offset by the passthrough of a portion of refunds
+to the minority shareholders of E.ON's jointly owned NPPs. The
+refunds resulted from the implementation of the public law agree-
+ment of March 25, 2021, between the German federal government
+and the country's NPP operators, which provided for the refund of
+previous purchases of residual power output rights.
+Adjusted EBIT of €1,144 million was significantly above the prior-
+year level (€413 million). This attributable in part to higher sales
+prices and higher sales volume but mainly to the implementation of
+the public law agreement of March 25, 2021, between the German
+federal I government and NPP operators. In this context, previous
+purchases of residual power were refunded. This resulted in a posi-
+tive effect of roughly €0.6 billion. Equity earnings on E.ON's stake
+in Enerjisa Üretim also surpassed the prior-year figure, primarily
+because of operating improvements, which were partially offset by
+currency-translation effects resulting from the weakening of the
+Turkish lira.
+360
+Fourth quarter
+7.7
+7.4
+Purchases
+0.2
+0.4
+Jointly owned power plants
+Non-Core Business
+Third parties
+0.2
+Owned generation
+Power procured (owned generation and purchases) in the 2021
+financial year was about 1.8 billion kWh above the prior-year figure.
+The year-on-year increase is mainly attributable to shorter planned
+outages at Grohnde and Isar 2 NPPs and the non-recurrence of the
+outage at Brokdorf NPP.
+Owned generation
+28.4
+1,388
+1,632
+1,388
+Total
+31.6
+29.8
+Adjusted EBITDA
+1,563
+895
+54
+30
+1,617
+925
+Station use, line loss, etc.
+-0.1
+-0.1
+Adjusted EBIT
+1,090
+383
+1,632
+Sales
+1.4
+1.1
+Adjusted EBITDA
+346
+253
+20
+3
+366
+256
+Purchases
+1.1
+30.5
+1.4
+264
+112
+20
+3
+284
+115
+Jointly owned power plants
+Full year
+Third parties
+Adjusted EBIT
+30
+PreussenElektra's Power Generation
+→ Corporate Governance Declaration
+2021
+2020
+2021
+2020
+2021
+2020
+2021
+Fourth quarter
+Sales
+11,489
+6,669
+6,392 3,917
+1,730
+940
+3,633
+2,691 23,244 14,217
+Adjusted EBITDA¹
+152
+154
+2020
+2021
+Thereof
+EIS
+Total
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→Business Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+77
+-35
+Sales in Germany increased by 26 percent to €28,475 million. This
+is partly attributable to the settlement of commodity derivatives.
+Higher consumption due to cooler weather and the passthrough of
+increased cost components also contributed to the increase. Adjusted
+EBIT rose as well, by 27 percent to €525 million. This was likewise
+due to cooler weather and to synergies already achieved by the innogy
+integration.¹ By contrast, higher procurement costs had an adverse
+effect on earnings.
+Sales in the Netherlands/Belgium increased by 38 percent to
+€4,088 million, adjusted EBIT by 12 percent to €90 million. This
+positive performance was due in particular to the current market
+environment and higher energy prices as well as to cooler weather
+and the resulting increase in sales volume.
+Customer Solutions
+€ in millions
+Netherlands/
+2021
+Germany
+2020
+United Kingdom
+1,029
+Other
+Sales in the United Kingdom increased by 28 percent to €17,870 mil-
+lion, owing in part, as in Germany, to the settlement of commodity
+derivatives and to the passthrough of increased cost components.
+Cooler weather contributed to higher sales as well. Adjusted EBIT
+rose by 194 percent to €121 million. The significant improvement
+was due primarily to higher sales volume resulting from cooler
+weather and to cost savings from the ongoing restructuring program.
+78
+-96
+51
+11,074
+419
+190
+9,157 61,507 48,659
+327 1,492 1,026
+115
+926
+478
+479
+237
+¹Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition; the previous year was adjusted accordingly.
+On balance, the Other business unit also delivered a positive sales
+and adjusted EBIT performance. Sales rose by 21 percent to
+€11,074 million and adjusted EBIT by 65 percent to €190 million.
+The main reasons for the improvement of both metrics were the
+non-recurrence of the reduction in sales volume recorded in 2020
+owing to weather and Covid-19 factors and the high level of energy
+prices in 2021. Earnings were lower only in Hungary, due in partic-
+ular to the high level of energy prices.
+Non-Core Business
+Fully Consolidated and Attributable Generating Capacity
+PreussenElektra's fully consolidated and attributable generating
+capacity at year-end 2021 both totaled 1,058 MW (prior year:
+3,828 MW and 3,319 MW, respectively). PreussenElektra's fully
+consolidated as well as its attributable generating capacity declined
+considerably relative to the prior year because of the shutdown of
+Brokdorf and Grohne nuclear power plants ("NPPs") on December 31,
+2021, pursuant to Germany's Atomic Energy Act.
+¹Cash-effective costs of €197 million were recognized for innogy's integration
+into the E.ON Group in 2021.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile → Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+Risks and Chances Report
+2,959
+152
+80
+90
+-129
+4,088
+152
+3
+Adjusted EBIT¹
+115
+116
+-88
+-127
+35
+35
+-37
+50
+130
+68
+239
+92
+Full year
+Sales
+Adjusted EBITDA
+Adjusted EBIT
+28,475
+660
+525
+22,550 17,870
+546
+261
+412
+121
+13,993
+1
+170
+25
+1,023
+14.6
+507
+119,759
+21
+19,901
+33
+39,122
+79
+%
+Dec. 31, 2020
+75,484
+67
+%
+Dec. 31, 2021
+80,637
+Current debt of €40.5 billion was 65 percent above the figure at
+year-end 2020. This was due in particular to an increase in other
+provisions for contingent losses from pending transactions in con-
+junction with the rise in energy prices on commodity markets and
+the increase in liabilities from derivative financial instruments. The
+expiration of the put option for enviaM AG and the development of
+current bonds were countervailing factors.
+the Notes to the Consolidated Financial Statements.
+Additional information about E.ON's asset situation is contained in
+Total equity and liabilities
+Current liabilities
+Non-current liabilities
+Risks and Chances Report
+→ Corporate Governance Declaration
+72
+Asset Situation
+Total assets and liabilities of €119.8 billion were about €24.4 billion,
+or 26 percent, above the figure at year-end 2020. Non-current
+assets rose by €5.2 billion to €80.6 billion. This is mainly attributable
+to an increase in receivables on derivative financial instruments.
+Current assets increased by 97 percent, from €19.9 billion to
+€39.1 billion. This likewise resulted mainly from the increase in
+receivables on derivative financial instruments and an increase
+in liquid funds.
+100
+Equity attributable to E.ON SE shareholders was about €12 billion
+at year-end 2021. Equity attributable to non-controlling interests
+was roughly €5.9 billion. The equity ratio (including non-controlling
+interests) at year-end 2021 was 15 percent, which is 6 percentage
+points higher than at year-end 2020. Net income in the 2021 finan-
+cial year was the primary factor. The expiration of the enviaM AG
+put option in the amount of €1.8 billion had a positive impact on
+equity. Of this amount, €0.7 billion is attributable to the shareholders
+of E.ON SE and €1.1 billion to minority interests. The remeasure-
+ment of pension obligations likewise had a positive effect on equity.
+These items were partially offset by the dividend payout totaling
+€1.6 billion.
+Consolidated Assets, Liabilities, and Equity
+€ in millions
+Non-current assets
+Current assets
+Total assets
+Equity
+Non-current debt declined by €0.4 billion, or 1 percent, chiefly because
+of the development of non-current bonds and other operating lia-
+bilities. Another positive factor was a reduction in provisions for
+pensions, which resulted from an increase in the actuarial discount
+rates used by the E.ON Group and a positive return on plan assets.
+95,385
+100
+17,889
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+→Business Report
+→ Forecast Report
+Search
+→ Disclosures Regarding Takeovers
+→ Corporate Governance Declaration
+73
+Business Segments
+Energy Networks
+Power and Gas Passthrough
+year under review
+Risks and Chances Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Contents
+100
+15
+9,055
+9
+61,359
+51
+61,761
+E.ON Annual Report 2021
+65
+34
+24,569
+26
+119,759
+100
+95,385
+40,511
+On balance, power and gas passthrough in the
+rose relative to the prior year. In Germany this is attributable in part
+to cooler weather and in part to the recovery of the economy from
+the repercussions of the Covid-19 pandemic, which had an adverse
+effect in 2020.
+Combined Group Management Report
+→ Corporate Profile
+Search
+Contents
+III
+12.1
+-350
+0
+2,554
+2,124
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings situation is affected by income from equity interests. The
+main contributors to positive income from equity interests were
+income from the transfer of profits from E.ON Energie AG in the
+amount of €1,385 million and from E.ON Beteiligungen GmbH in
+the amount of €661 million.
+The deterioration of net interest result mainly reflects a reduction in
+tax-related interest income.
+The negative balance of other income and expenses in 2021 resulted
+primarily from €249 million in expenses for purchased third-party
+services, €226 million in personnel-related expenses, €66 million in
+auditing and consulting services, and €15 million in net expenses
+from currency effects. In addition, income of €368 million relates to
+the reversal of impairment charges on equity interests in affiliated
+companies.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+529
+E.ON Annual Report 2021
+The E.ON SE Management Board has decided on a dividend policy
+that foresees annual growth in the dividend per share of up to
+5 percent through the dividend for the 2026 financial year. This also
+applies to a dividend growth of up to 5 percent for the 2022 financial
+year. E.ON will aim for an annual increase in dividend per share after
+2026 as well. In E.ON's strategy, sustainability with an emphasis on
+climate-neutral economic activities is a key growth factor that will
+enable E.ON to meet its dividend targets.
+Outlook
+The complete Financial Statements of E.ON SE, with an unqualified
+opinion issued by the auditor, KPMG AG, Düsseldorf, will be
+announced in the Bundesanzeiger.
+At the Annual Shareholders Meeting in 2022, the Management
+Board will propose that net income available for distribution be
+used to pay a dividend of €0.49 per ordinary share and the remain-
+ing amount of €1,276 million to be carried forward to the next
+financial year. Management's proposal for the use of net income
+available for distribution is based on the number of ordinary shares
+on March 7, 2022, the date the Financial Statements of E.ON SE
+were prepared.
+↑
+and income from other taxes of €65 million. Corporate taxes and
+solidarity surcharges attributable to 2021 totaled €78 million, and
+trade taxes amounted to €66 million. For previous years the Com-
+pany recorded tax income of €170 million, of which €105 million
+relates to income taxes.
+The activities of the company E.ON SE within the meaning of
+Section 6b (3) of the Energy Industry Act consist mainly of other
+activities outside the electricity and gas sector. In addition, E.ON SE
+provides a relatively limited degree of energy-specific services to
+affiliated network operators for network operation relating to
+electricity distribution, gas distribution, and basic metering point
+operation and prepares activity statements for these services. The
+resulting earnings, individually and in total, are minimal (less than
+€0.5 million).
+80
+→ Corporate Governance Declaration
+Risks and Chances Report
+Combined Group Management Report
+→Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+In the year under review, total income from taxes amounted to
+€26 million, which encompasses the year under review as well as
+prior years. This consists of an income tax expense of €39 million
+Back
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Combined Group Management Report
+Operating cash flow before interest and taxes²
+5,948
+-5,399
+-1,877
+2,263
+-2,624
+5,287
+Cash provided by (used for) investing activities
+Cash provided by (used for) financing activities
+Cash provided by financing activities of continuing operations of
+€2.3 billion was €4.9 billion above the prior-year figure of -€2.6 bil-
+lion. This was due in particular to compensation payments made to
+innogy SE's remaining minority shareholders in the 2020 financial
+year (€2.4 billion). Variation margin payments in conjunction with
+derivative transactions had a positive effect on cash provided by
+financing activities. The sale of a portion of the Company's business
+operations in Hungary led to a further improvement in the year
+under review.
+E.ON Annual Report 2021
+Contents
+Search
+↑
+Back
+¹From continuing operations.
+2Excluding the innogy business in the Czech Republic reclassified in accordance with IFRS 5 and
+deconsolidated on October 30, 2020.
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+4,069
+2020
+→Business Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+→ Corporate Governance Declaration
+71
+Operating cash flow
+Investments recorded at Corporate Functions/Other of €238 million
+(prior-year period: -€273 million) are principally attributable to sub-
+sequent purchase-price payments in conjunction with the innogy
+acquisition. By contrast, prior-year investments included purchase-
+price reductions relating to the innogy acquisition. In addition,
+investments in the reporting year went toward the acquisition of
+gridX GmbH and envelio GmbH (for more information on these
+projects, see page 38 ✈).
+Cash Flow
+Cash provided by operating activities of continuing operations
+before interest and taxes of €5.6 billion was €0.3 billion below the
+prior-year figure of €5.9 billion. Negative working-capital effects
+at the German network business were the principal adverse factor
+at Energy Networks, whose cash provided by operating activities
+was €0.5 billion below the prior-year figure. Working-capital effects
+in Sweden were the main reason for the €0.2 billion year-on-year
+decline at Customer Solutions. Operating cash flow at Non-Core
+Business was €0.5 billion higher relative to the prior year, primarily
+because of an improvement in EBITDA due to the refund of previous
+payments to acquire residual power output rights (€0.6 billion). In
+addition, cash provided by operating activities of continuing opera-
+tions reflected a normalization of tax payments in 2021.
+Cash provided by investing activities of continuing operations
+totaled -€5.4 billion versus -€1.9 billion in the prior year. Margin
+payments made in connection with derivative transactions (mainly
+initial margins) due to price movements in the year under review
+were significantly higher than in the prior year. In the first quarter of
+the prior year E.ON received the payment for the indirect stake in
+Nord Stream AG (Nord Stream 1) that had been transferred to the
+Contractual Trust Arrangement ("CTA") in 2019. In addition, prior-
+year cash flow benefited from a subsequent purchase-price pay-
+ment by RWE for the innogy acquisition, the sale of innogy's retail
+business in the Czech Republic, and from the sale of the heating
+electricity business. The payment from the sale of Rampion Renew-
+ables Ltd to RWE was also received in the 2020 financial year. Cash
+provided by investing activities in the year under review benefitted
+to a comparatively limited degree from the sale of two network
+companies in Hungary.
+Cash Flow¹
+€ in millions
+2021
+Non-Core Business's investments rose by €23 million year on year
+to €298 million.
+Power passthrough in Sweden rose slightly year on year because,
+on average, the weather was cooler over the course of the year.
+5,639
+Energy Passthrough
+261
+4,102
+4,076
+Sales
+Fourth quarter
+2020
+2021
+2020
+2021
+Total
+Turkey
+Sweden
+2020
+2021
+2020
+2021
+Germany
+East-Central Europe/
+→Business Report
+→ Disclosures Regarding Takeovers
+Combined Group Management Report
+→ Forecast Report
+Risks and Chances Report
+→ Corporate Governance Declaration
+240
+74
+Sales and adjusted EBIT in Germany were €14,661 million and
+€1,961 million, respectively. Sales were at the prior-year level.
+Adjusted EBIT declined by 8 percent year on year. Earnings were
+adversely affected primarily by effects resulting from higher com-
+modity prices, which led in particular to higher costs for network
+losses.
+Sales in Sweden in 2021 rose by about 8 percent, from €899 million
+to €962 million, owing to higher passthrough amid colder weather.
+Higher costs for the upstream network reduced adjusted EBIT in the
+year under review by €34 million to €337 million.
+East-Central Europe/Turkey's sales of €2,650 million were higher
+(prior year: €2,484 million), whereas its adjusted EBIT of €672 million
+was slightly below the prior-year level. Positive effects such as
+the inclusion of VSEH in Slovakia for the entire year were more than
+offset by higher costs for network losses and adverse currency-
+translation effects.
+Energy Networks
+€ in millions
+Sales and Adjusted EBIT
+668
+705
+5,005
+Full year
+Sales
+Adjusted EBITDA
+Adjusted EBIT
+14,661
+14,563
+962
+913
+889
+2,484
+18,273
+17,936
+3,458
+1,961
+In East-Central Europe/Turkey, lower passthrough due to the sale of
+two network operators in Hungary (ETI and ÉMÁSZ) was offset by
+higher power passthrough resulting from the acquisition of VSEH in
+Slovakia. Gas passthrough was above the prior-year level.
+3,628
+2,650
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+556
+136
+5,047
+Adjusted EBITDA¹
+779
+1,028
+137
+228
+191
+285
+1,450
+Adjusted EBIT¹
+353
+626
+67
+96
+1,118
+Back
+111
+Search
+15.3
+17.9
+87.6
+91.9
+Line loss, station use, etc.
+Gas
+1.9
+9.5
+2.0
+0.3
+0.2
+0.7
+2.4
+2.9
+54.5
+0.4
+60.6
+10.0
+Power
+East-Central Europe/
+2021
+↑
+Germany
+2020
+2021
+Sweden
+2020
+64.5
+Turkey
+2021
+2020
+2021
+2020
+Billion kWh
+Fourth quarter
+Total
+17.6
+62.3
+72.1
+3.9
+4.0
+183.9
+170.6
+46.2
+12.1
+233.7
+1.1
+12.1
+System Length and Network Customers
+E.ON's power system in Germany was about 700,000 kilometers
+long, slightly below the prior-year figure (705,000 kilometers). At
+year-end it had about 14.9 million network customers for power in
+its service territory. E.ON's gas system declined slightly to about
+101,000 kilometers (prior year: 104,000 kilometers). By contrast,
+the number of network customers-1.8 million-was essentially
+unchanged from 2020.
+The length of E.ON's power system in Sweden was 140,000 kilo-
+meters (prior year: 139,000 kilometers). The number of customers
+in the
+power distribution system was about 1.1 million, unchanged
+from the prior year.
+Contents
+16.1
+E.ON operates electricity networks in East-Central Europe/Turkey
+with a total system length of 274,000 kilometers (prior year:
+322,000 kilometers) and supplies about 8.3 million network cus-
+tomers (prior year: 9.7 million). The decline in system length and
+the number of customers is mainly attributable to the sale of two
+network operators in Hungary, ETI and ÉMÁSZ. As in the prior year,
+gas networks operated by E.ON were roughly 49,000 kilometers
+long. The number of gas network customers was almost unchanged
+at around 2.7 million (prior year: 2.6 million).
+E.ON Annual Report 2021
+216.8
+1.2
+49.8
+7.1
+Power
+Line loss, station use, etc.
+7.1
+Gas
+234.7
+36.9
+34.7
+226.9
+66.2
+64.2
+337.8
+325.8
+76.7
+Full year
+Low
+x €10 million
+High
+Major
+x ≥ €1 billion
+Moderate
+Medium
+€10 million ≤ x < €50 million
+€50 million ≤ x < €200 million
+€200 million ≤ x < €1 billion
+per-
+For quantifiable risks and chances, E.ON then evaluates the likelihood
+of occurrence and the potential loss or damage. In the commodity
+business, for example, commodity prices can rise or fall. This type
+of risk is modeled with a normal distribution. Modeling is supported
+by a Group-wide IT-based system. Extremely unlikely events-those
+whose likelihood of occurrence is 5 percent or less-are classified as
+tail events. Tail events are not included in the simulation described
+below.
+E.ON uses a multistep process to identify, evaluate, simulate, and
+classify risks and chances. Risks and chances are generally reported
+on the basis of objective evaluations. If this is not possible, estimates
+by in-house experts are used. The evaluation measures a risk/chance's
+financial impact on the current earnings plan while factoring in
+risk-reducing countermeasures. The evaluation therefore reflects
+the net risk.
+The last step is to assign, in accordance with the 5th and 95th
+centiles, the aggregated risk distribution to impact classes-low,
+moderate, medium, major, and high-according to their quantitative
+impact on planned adjusted EBITDA. The impact classes are shown
+in the table below.
+E.ON uses the 5th and 95th percentiles of this aggregated risk dis-
+tribution as the worst case and best case, respectively. Statistically,
+this means that with this risk distribution there is a 90-percent like-
+lihood that the deviation from the Company's current earnings plan
+for adjusted EBITDA will remain within these extremes.
+This statistical distribution makes it possible for E.ON's internal risk
+management system to conduct a Monte Carlo simulation of these
+risks. This yields an aggregated risk distribution that is quantified as
+the deviation from the Company's current earnings plan for
+adjusted EBITDA.
+Health, safety, and environmental risks and chances
+E.ON Annual Report 2021
+Credit, interest-rate, foreign-currency, tax, and asset-management risks and chances
+Risks and chances from the development of commodity prices and margins and from changes in market liquidity
+Risks and chances from investments and disposals
+Impact Classes
+Contents
+Operational and IT risks
+↑
+Low
+IT and process risks and chances, risks and chances relating to the operation of generation assets, networks, and other
+facilities, new-build risks
+Low
+Medium
+E.ON Annual Report 2021
+Best case (95th percentile)
+Major
+Worst case (5th percentile)
+Major
+Legal and regulatory risks
+Risk category
+Risk Position
+The table below shows the average annual aggregated risk position
+(aggregated risk distribution) across the time horizon of the medium-
+term plan for all quantifiable risks and chances (excluding tail events)
+for each risk category based on E.ON's most important financial key
+performance indicator, adjusted EBITDA.
+General Risk Situation
+87
+→ Corporate Governance Declaration
+→Risks and Chances Report
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile → Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+Search
+Policy and legal risks and chances, regulatory risks, risks from public consent processes
+systematic risk and chance identification
+Finance and treasury risks
+As required by law, E.ON's ERM's effectiveness is reviewed regularly
+by Internal Audit. In compliance with the provisions of Section 91,
+Paragraph 2, of the German Stock Corporation Act relating to the
+establishment of a risk-monitoring and early warning system, E.ON
+has a Risk Committee for the E.ON Group and for each of its business
+units. The Risk Committee's mission is to achieve a comprehensive
+view of E.ON's risk exposure at the Group and unit level and to
+actively manage risk exposure in line with E.ON's risk strategy.
+• documentation and reporting.
+and evaluating countermeasures and preventive systems
+management and monitoring of risks and chances by analyzing
+risk and chance analysis and evaluation
+•
+•
+•
+The ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose book value is greater
+than €50 million. E.ON takes an inventory of its risks and chances
+at each quarterly balance-sheet date.
+E.ON'S ERM, which is the basis for the risks and chances described
+in the next section, encompasses:
+Note 31 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial instru-
+ments and hedging transactions. Note 32 → describes the general
+principles of E.ON's risk management and applicable risk metrics
+for quantifying risks relating to commodities, credit, liquidity, inter-
+est rates, and currency translation.
+In the context of Group-wide credit risk management, E.ON sys-
+tematically assesses and monitors the creditworthiness of its busi-
+ness partners on the basis of Group-wide minimum standards.
+E.ON manages credit risk by taking appropriate measures, which
+include obtaining collateral and setting limits. The E.ON Group's
+Risk Committee is regularly informed about credit risks. A further
+component of E.ON's risk management is a conservative invest-
+ment strategy for financial funds and a broadly diversified portfolio.
+This category encompasses credit, interest-rate, currency, tax, and
+asset-management risks and chances. E.ON uses systematic risk
+management to monitor and control its interest-rate and currency
+risks and manage these risks using derivative and non-derivative
+financial instruments. Here, E.ON SE plays a central role by aggre-
+gating risk positions through intragroup transactions and hedging
+these risks in the market. Due to E.ON SE's intermediary role, its
+risk position is largely closed.
+Managing Finance and Treasury Risks
+manuals, comprehensive due diligence, legally binding contracts,
+a multistage approvals process, and shareholding and project con-
+trolling. Comprehensive post-acquisition projects also contribute to
+successful integration.
+E.ON has comprehensive preventive measures in place to manage
+potential risks relating to acquisitions and investments. These mea-
+sures include, in addition to the relevant company guidelines and
+Low
+Managing Strategic Risks
+Enterprise Risk Management ("ERM")
+Examples
+To promote uniform financial reporting Group-wide, E.ON has in
+place a central, standardized system that enables effective and
+automated risk reporting. Company data are systematically collected,
+transparently processed, and made available for analysis both cen-
+trally and decentrally at the units.
+Contents
+Strategic risks
+Market risks
+HSE, HR, and other
+Operational and IT risks
+Legal and regulatory risks
+Risk category
+Risk Category
+following risk categories:
+E.ON Annual Report 2021
+E.ON's IT-based system for reporting risks and chances has the
+Risks and Chances
+86
+→ Business Report → Forecast Report →Risks and Chances Report
+→ Disclosures Regarding Takeovers → Corporate Governance Declaration
+Combined Group Management Report
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Methodology
+Major
+↑
+Medium
+Medium
+Market Risks
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia and
+Bavaria (low/major). E.ON SE can be held responsible for damage.
+This could lead to major individual risks that E.ON currently only
+evaluates qualitatively.
+that it communicates consistently, enhances the dialog, and main-
+tains good relationships with key stakeholders. E.ON actively con-
+siders environmental, social, and corporate-governance issues.
+These efforts support the Company's business decisions and public
+relations. E.ON's objective is to minimize reputational risks and
+retain public support so that the Company can continue to operate
+its business successfully. These matters do not result in a major risk
+or chance position.
+Health and occupational safety are important aspects of E.ON's
+day-to-day business. The Company's operating activities can there-
+fore pose risks in these areas and create social and environmental
+risks and chances. In addition, E.ON's operating business potentially
+faces risks resulting from human error and employee turnover. It is
+important that E.ON act responsibly along its entire value chain and
+HSE, HR, and Other Risks
+E.ON could also be subject to environmental liabilities associated
+with its power generation operations that could materially and
+adversely affect its business. In addition, new or amended environ-
+mental laws and regulations may result in cost increases for E.ON.
+Extraordinary environmental events could also affect the operation
+of energy networks or equipment and equipment components. This
+could I pose a liquidity risk for E.ON (tail/high).
+PreussenElektra, this also includes dismantling activities. E.ON's
+operations in and outside Germany face major risks of a power fail-
+ure, power-plant shutdown, and higher costs and additional invest-
+ments resulting from unanticipated operational disruptions or other
+problems. Operational failures or extended production stoppages of
+facilities or components of facilities as well as environmental dam-
+age could negatively impact earnings, affect the cost situation, and/
+or result in the imposition of fines. In unlikely cases, this could lead
+to a high risk. Overall, it results in a medium risk position and a low
+chance position in this category. General project risks can include a
+delay in projects and increased capital requirements.
+E.ON's units operate in an international market environment that is
+characterized by general risks relating to the business cycle. In
+addition, the entry of new suppliers into the marketplace along with
+more aggressive tactics by existing market participants and reputa-
+tional risks have created a keener competitive environment for the
+Company's sales business in and outside Germany, which could
+reduce margins. However, market developments could also have a
+positive impact on E.ON's business. Such factors include wholesale
+and retail price developments, customer churn rates, and tempo-
+rary volume effects in the network business. This results in a major
+risk and chance position in this category.
+Technologically complex production facilities are used in the pro-
+duction and distribution of energy, resulting in major risks from
+procurement and logistics, construction, operations and mainte-
+nance of assets as well as general project risks. In the case of
+The operational and strategic management of the E.ON Group relies
+heavily on complex information technology ("IT") and complex
+operational technology ("OT"). This includes risks and chances in
+conjunction with information security and the security of operating
+processes in E.ON's business segments.
+Operational and IT Risks
+A significant change will result from Germany's implementation of
+the European Court of Justice's ruling requiring it to form a largely
+independent national regulatory agency, which could have an
+impact on the other EU countries in which E.ON conducts regulated
+business activities (low/major).
+89
+→Risks and Chances Report
+→ Corporate Governance Declaration
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Cybersecurity and the continuous protection of IT and OT systems
+against cyberattacks is a focus area of E.ON's risk management.
+Examples include the analysis of attacks on the systems of the net-
+work business (which could affect the operation of E.ON's critical
+infrastructure), on the sales business (which could result in the loss
+of customer data), and on internal systems (which E.ON uses to
+control commercial processes in all its business units). It is import-
+ant that the operating units and the Cybersecurity and Enterprise
+Risk Management divisions jointly and proactively evaluate and
+manage risks for E.ON.
+Back
+E.ON Annual Report 2021
+Search
+E.ON uses a comprehensive sales-management system and inten-
+sive customer management to manage margin risks. In order to limit
+exposure to commodity price risks, E.ON conducts systematic risk
+management. The key elements of the Company's risk management
+are, in addition to binding Group-wide policies and a Group-wide
+reporting system, the use of quantitative key figures, the limitation
+of risks, and the strict separation of functions between departments.
+Furthermore, E.ON utilizes derivative financial instruments that are
+commonly used in the marketplace. These instruments are trans-
+acted with financial institutions, brokers, power exchanges, and third
+parties whose creditworthiness is monitored on an ongoing basis.
+E.ON's local sales units and the remaining generation operations
+conduct local risk management under central governance standards
+to monitor these underlying commodity risks and to minimize them
+through hedging.
+E.ON's international business operations expose it to risks from
+currency fluctuation. One form of this risk is transaction risk, which
+arises when payments are made in a currency other than E.ON's
+functional currency. Another form of risk is translation risk, which
+arises when currency fluctuations lead to accounting effects when
+assets/liabilities and income/expenses of E.ON companies outside
+the eurozone are translated into euros and entered into E.ON's Con-
+solidated Financial Statements. Positive developments in foreign-
+currency rates can also create chances for E.ON's operating business.
+E.ON is exposed to credit risk in its operating activities and through
+the use of financial instruments. Credit risk results from non-delivery
+or partial delivery by a counterparty of the agreed consideration for
+services rendered, from total or partial failure to make payments
+owed on existing accounts receivable, and from replacement risks
+in open transactions. For example, E.ON's historical connection with
+Uniper and RWE continues to pose a major, albeit unlikely, risk. In
+addition, in unlikely cases joint and several liability for jointly oper-
+ated power plants could lead to a major risk.
+Finance and Treasury Risks
+In the case of planned disposals, E.ON faces the risk of disposals
+not taking place or being delayed and the risk that E.ON receives
+lower-than-anticipated disposal proceeds. In addition, after trans-
+actions close E.ON could face major liability risks resulting from
+contractual obligations (tail/major).
+Furthermore, investments and acquisitions in new geographic areas
+or lines of business require E.ON to become familiar with new sales
+markets and competitors and to address the attending business
+risks (medium/major).
+E.ON's business strategy involves acquisitions and investments in
+its core business as well as disposals. This strategy depends in part
+on the ability to successfully identify, acquire, and integrate com-
+panies that enhance, on acceptable terms, the Company's energy
+business. In order to obtain the necessary approvals for acquisitions,
+E.ON may be required to divest other parts of its business or to
+make concessions or undertakings that affect its business. In addi-
+tion, there can be no assurance that E.ON will be able to achieve the
+returns expected from any acquisition or investment. It is also pos-
+sible that E.ON will not be able to realize its strategic ambition of
+enlarging its investment pipeline and that significant amounts of capi-
+tal could be used for other opportunities. The overall risk and chance
+position in this category was not major at the balance-sheet date.
+Strategic Risks
+Contents
+After the Uniper spinoff, E.ON established its own procurement
+organization for its sales business and ensured market access for the
+output of its remaining energy production in order to manage the
+remaining commodity risks accordingly. In addition, E.ON founded a
+new subsidiary, E.ON Energy Markets GmbH ("EEM"), which functions
+as a central interface to wholesale markets. EEM's main purpose is
+to consolidate E.ON's commodity positions in order to diversify and
+mitigate credit and margin risks. EEM has so far acted on behalf of
+the main E.ON procurement portfolios in Germany and the Nether-
+lands; other countries will be added successively.
+96
+90
+→ Corporate Governance Declaration
+→Risks and Chances Report
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+The demand for electric power and natural gas is seasonal, with
+E.ON's operations generally experiencing higher demand during the
+cold-weather months of October through March and lower demand
+during the warm-weather months of April through September. As
+a result of these seasonal patterns, E.ON's sales and results of oper-
+ations are higher in the first and fourth quarters and lower in the
+second and third quarters. E.ON procures the required quantities of
+electricity and gas for its customers based on robust demand fore-
+casting methods. Nevertheless, actual customer demand may devi-
+ate from the forecast owing to various factors (such as the weather
+and the economy). Such deviations could have a positive or negative
+business impact, particularly in an environment of highly volatile
+prices. E.ON aims to reduce these impacts by, for example, pursuing
+a prudent hedging strategy in conjunction with a proactive approach
+to reforecasting or by pricing its risks vis-à-vis customers.
+Medium
+↑
+Contents
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+The network business could also experience a decline in sales volume,
+credit losses, and price increases for network losses which result in
+lower earnings. A distinctive feature of the network business, how-
+ever, is that regulatory mechanisms generally foresee that volume-
+driven declines in sales and price-driven cost increases for network
+losses can generally be recovered in subsequent years by corre-
+sponding adjustments to network tariffs.
+At the time of preparing this report, it is not possible to make any
+specific assessments of other possible implications of the current
+crisis in Ukraine beyond the increase in commodity prices that is
+factored into the risk assessment. Potential implications for the
+Nord Stream AG stake held in pension plan assets will depend on
+political developments, in particular trade relations with Russia. In
+addition, political or regulatory measures could have an indirect or
+direct impact on business operations in individual countries.
+The E.ON Group's overall risk situation at the end of 2021 was
+influenced primarily by sharply higher commodity prices. First, they
+affect PreussenElektra's remaining power generation activities;
+second, they are a major risk factor for volume and price effects and
+also for potential credit losses in the sales business. In addition,
+high commodity prices lead to an increase in counterparty risks
+(tail/high).
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+The E.ON Group has major risk positions in the following categories:
+market risks as well as legal and regulatory risks. As a result, the
+aggregate risk position of E.ON SE as a Group is major. In other words,
+the E.ON Group's average annual adjusted EBITDA risk ought not to
+exceed -€200 million to -€1 billion in 95 percent of all cases.
+In the case of tail events and qualitative risks, the focus is not only
+low probability (6 percent < x ≤ 25 percent) and a medium proba-
+bility (26 percent < x ≤ 50 percent). Example: in category x, there is
+a risky (medium, high) and a risk z (low, high).
+Moderate
+Medium
+The following description of risks by category alludes to the afore-
+mentioned impact classes. In addition, the description of risks by
+segment and category addresses major/high tail events and major/
+high qualitative risks. In the case of qualitative risks (which by defi-
+nition are more difficult to assess both in terms of their loss amount
+and probability), a further distinction is made between risks with a
+Finance and treasury risks
+Strategic risks
+Market risks
+HSE, HR, and other
+on E.ON's key performance indicator, adjusted EBITDA, but also on
+other indicators relating to its asset and financial position.
+Search
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→Risks and Chances Report
+E.ON Annual Report 2021
+This risk category also includes major risks arising from possible
+litigation, fines, and claims, governance and compliance issues, as
+well as risks and chances related to contracts and permits. Changes
+to this environment can lead to considerable uncertainty with
+regard to planning and, under certain circumstances, to impairment
+charges, but can also create chances. This results in a major risk and
+a medium chance position.
+countries.
+In the wake of the economic and financial crisis in many EU member
+states, interventionist policies and regulations have been adopted
+in recent years, such as additional taxes and additional reporting
+requirements (for example, EMIR, MAR, REMIT, MiFID2). The rele-
+vant agencies monitor compliance with these regulations closely.
+This leads to attendant risks for E.ON's operations. The same applies
+to price moratoriums, regulated price reductions, and changes to
+support schemes for renewables, which could pose risks to, as well
+as create opportunities for, E.ON's operations in the respective
+Coal Phaseout Law of August 2020). The achievement of these
+(environmental) policy objectives will require legal and regulatory
+implementation measures that themselves would pose new risks
+for certain E.ON Group business operations.
+The political, legal, and regulatory environment in which the E.ON
+Group does business is a source of risks. This could confront E.ON
+with direct and indirect consequences that could lead to possible
+financial disadvantages. New risks-but also opportunities-arise
+from energy-policy decisions at the European and national level.
+Foremost among them are the European Commission's Green Deal,
+which was presented in 2019 and revised and expanded in late
+2020, and the German federal government's decision to phase out
+conventional hard-coal- and lignite-fired power generation (the
+Legal and Regulatory Risks
+E.ON's major risks and chances by risk category are described below.
+Also described are major risks and chances stemming from tail
+events as well as qualitative risks that would impact adjusted EBITDA
+by more than €200 million. Risks and chances that would affect
+planned net income and/or cash flow by more than €200 million
+are included as well.
+Combined Group Management Report
+Risks and Chances by Category
+PreussenElektra's business is substantially influenced by regulation.
+In general, regulation can result in risks for its remaining operating and
+dismantling activities. One example is the impact of the Fukushima
+nuclear accident. Policy measures taken in response to such events
+could have a direct impact on the further operation of a nuclear
+PreussenElektra
+The E.ON Group's operations subject it to certain risks relating to
+legal proceedings, ongoing planning processes, and regulatory
+changes. But these risks also relate, in particular, to legal actions
+and proceedings concerning contract and price adjustments to
+reflect market dislocations or (including as a consequence of the
+energy transition) an altered business climate in the power and gas
+business, alleged price-rigging, and anticompetitive practices. This
+could I pose a major risk (tail/high).
+Customer Solutions
+The operation of energy networks is subject to a large degree of
+government regulation. New laws (tail/high) and regulatory periods
+cause uncertainty for this business (medium/medium). In addition,
+matters related to Germany's Renewable Energy Sources Act, such
+as issues regarding solar energy, can cause temporary fluctuations
+in cash flow and adjusted EBITDA (tail/major). This could create
+major chances as well as pose a major risk. The rapid growth of
+renewables is also creating new risks for the network business. For
+example, insolvencies among renewables operators or feed-in tariffs
+unduly paid by grid operators lead to court or regulatory proceedings.
+Risks and Chances by Segment
+Energy Networks
+88
+→ Corporate Governance Declaration
+power plant ("NPP") (tail/high) or trigger liabilities and significant
+payment obligations stemming from the solidarity obligation agreed
+on among German NPP operators (tail/high). Furthermore, new
+regulatory requirements, such as additional mandatory safety mea-
+sures or delays in dismantling, could lead to production outages
+and higher costs. In addition, there may be lawsuits that fundamen-
+tally challenge the operation of NPPs. Regulation can also require
+an increase in provisions for dismantling. These factors could pose
+major risks for E.ON.
+Managing Market Risks
+about -0.2
+project, environmental, and deterioration management
+crisis-prevention measures and emergency planning.
+Total
+Non-Core Business
+Core Business
+Corporate Functions/Other
+Customer Solutions
+Energy Networks
+Cash-Effective Investments: 2022 Plan
+Investments in the sustainable expansion and digital transformation
+of energy networks and activities relating to customer solutions are
+the basis for the value-driven growth E.ON aims for. Investments of
+about €5.3 billion are therefore planned for the 2022 financial year.
+€ in billions
+-4.1
+Planned Investments
+nesses.
+Earnings reported at Corporate Functions/Other are expected to
+be at the prior-year level. The realization of additional synergies will
+be offset by expenditures to establish new, particularly digital busi-
+Customer Solutions' earnings are expected to be above the prior-
+year level. The Company expects a positive performance, especially
+through the leveraging of synergies, primarily in Germany. At the
+same time, successful restructuring in the United Kingdom will
+serve to increase earnings. The segment will also benefit from addi-
+tional growth in distributed EIS activities.
+E.ON expects Energy Networks' earnings to increase significantly
+relative to the prior financial year. This performance will reflect the
+further expansion of this segment's regulated asset base due to
+additional investments. The implementation of planned synergies
+and the reversal of negative earnings effects resulting from the
+Covid-19 pandemic in prior years will also have a positive impact,
+particularly in the network business in Germany. Earnings will be
+adversely affected by the significant rise in costs for the procure-
+ment of network losses, particularly in Sweden and East-Central
+Europe/Turkey, which in many markets can only be passed through
+after a delay due to existing regulatory mechanisms.
+82
+→ Corporate Governance Declaration
+Risks and Chances Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+Earnings at Non-Core Business are expected to be significantly below
+the prior-year level. The decline is attributable to PreussenElektra
+and results from the end of operations of Grohnde and Brokdorf
+nuclear power plants on December 31, 2021. By contrast, this busi-
+ness will benefit from higher sales prices. In addition, earnings in
+2021 were positively affected by the refund of prior purchases of
+residual power output rights.
+Combined Group Management Report
+Percentages
+-1.1
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+E.ON Annual Report 2021
+Corporate Functions/Other's investments will go mainly toward
+Group-wide IT infrastructure and digital platforms for the networks
+and customer solutions businesses. No significant investments are
+expected at Non-Core Business.
+Customer Solutions' investments will mainly go toward expanding
+the EIS business of providing climate-friendly, distributed energy
+infrastructure solutions, particularly in our markets in Sweden,
+Germany, and the United Kingdom. E.ON will also invest in IT, smart
+meters and conventional residential meters, smart solutions for
+eMobility, and integrated energy solutions.
+77
+E.ON will make most of these investments in its Energy Networks
+segment, the backbone of a successful energy transition. Investments
+will go towards expanding, enhancing, and modernizing networks,
+switching equipment, and metering and control technology in order
+to ensure the reliable, uninterrupted, and sustainable distribution
+of electricity and to meet rising energy demand. In addition, E.ON
+will invest in the digitalization of network planning, monitoring, and
+control.
+-5.3
+0
+-0.0
+100
+-5.3
+2
+-0.1
+21
+100
+→ Business Report → Forecast Report
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+↑
+In November 2021 E.ON's reconfigured Management Board com-
+municated a growth strategy as well as a forecast for the next five
+years that represents the continuation of the corporate restructur-
+ing of recent years. E.ON's growth ambitions will continue to be
+significantly shaped by sustainability and digitalization. The operat-
+ing business will likely be less affected by the Covid-19 pandemic
+in 2022 than by possible disruptions on wholesale energy markets,
+due in part to current developments in the Ukraine conflict. There is
+currently a high degree of uncertainty regarding the conflict
+between Russia and Ukraine and its economic repercussions. E.ON
+mainly perceives risks for commodity markets and associated credit
+and liquidity risks as well as valuation risks for investments, among
+others the stake in Nord Stream AG held in the plan assets for
+General Statement on E.ON's Anticipated
+Development
+The overall mood clouded over somewhat in the course of 2021.
+The main causes worldwide were rising energy prices and the
+resulting increase in inflation. In the spring, the German Council of
+Economic Experts was still forecasting that Germany's GDP would
+grow by 4.6 percent in 2022. The council expects eurozone growth
+of 4.3 percent in 2022. The German government assumes similar
+figures in its fall GDP forecast for Germany. This scenario, published
+in late October 2021, predicts growth of 4.1 percent in 2022 and
+1.6 percent in 2023.
+The OECD's economic outlook from December 2021 predicts global
+gross domestic product ("GDP") growth of 4.5 percent in 2022. The
+European Union's Economic Forecast anticipates GDP growth of
+4.3 percent in 2022 for both the EU and the eurozone.
+Economic growth forecasts remained fraught with uncertainty in
+view of the difficulty in predicting the course of the Covid-19 pan-
+demic and its implications. As long as large parts of the world's
+population remain unvaccinated and there is a risk of new outbreaks,
+the recovery of the global economy will be uneven and remain
+vulnerable to setbacks. Although the global economy as a whole
+returned to its pre-pandemic level in 2021, experts believe that
+individual economies will recover and develop very differently in the
+future. For example, the OECD estimates that Europe could recover
+in around three years, whereas in countries like Mexico and South
+Africa this process could take three to five years. The German econ-
+omy could return to normal capacity utilization some time in 2022.
+Alongside more vaccinations, the economic recovery would be
+spurred by further increases in consumption; high household savings,
+low financing costs, and government stimulus could also help boost
+to the economy's upward trend.
+Macroeconomic Situation
+Business Environment
+Forecast Report
+pensions. In addition, political or regulatory measures could have an
+indirect or direct impact on business operations in individual coun-
+tries. Overall, the effect of the conflict and of a possible further
+escalation on E.ON's business performance in 2022 and key perfor-
+mance indicators cannot be sufficiently estimated at the present
+time and is therefore not included in the forecast.
+81
+Risks and Chances Report
+Combined Group Management Report
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile
+→ Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+→ Corporate Governance Declaration
+Back
+Anticipated Earnings and Financial Situation
+E.ON's most important key performance indicators effective the
+2022 financial year are adjusted EBITDA, investments, and earnings
+per share based on adjusted net income ("EPS"). E.ON expects to
+record adjusted EBITDA of €7.6 to €7.8 billion in the 2022 financial
+year. It anticipates adjusted net income in 2022 of €2.3 to €2.5 billion
+or €0.88 to €0.96 per share (based on 2,609 million shares out-
+standing).
+Search
+Contents
+E.ON Annual Report 2021
+7.6 to 7.8
+0.6 to 0.8
+6.9 to 7.1
+1.5 to 1.7
+5.5 to 5.7
+Forecast Earnings Performance
+2022 (forecast)
+E.ON Group
+Non-Core Business
+Core Business
+Corporate Functions/Other
+Energy Networks
+Customer Solutions
+€ in billions
+Adjusted EBITDA¹
+Forecast by segment:
+¹Adjusted for non-operating effects.
+Should an accident occur despite the measures taken, E.ON has
+a reasonable level of insurance coverage. Detailed information can
+be found in the Separate Combined Non-Financial Report starting
+on page 138.
+→ Disclosures Regarding Takeovers
+→Risks and Chances Report
+E.ON engages in intensive and constructive dialog with government
+agencies and policymakers in order to manage the risks resulting
+from the E.ON Group's policy, legal, and regulatory environment.
+Furthermore, the Company strives to conduct proper project man-
+agement so as to identify early and minimize the risks attending
+major investments.
+Managing Legal and Regulatory Risks
+E.ON takes the following general preventive measures to limit risks.
+General Measures to Limit Risks
+The E.ON internal management information system identifies risks
+early so that steps can be taken to actively address them. Close
+consultation between the business units and with departments at
+Corporate Functions such as Controlling, Finance, and Accounting
+as well as Internal Audit is of particular importance in early risk
+detection.
+The purpose of the internal monitoring system is to ensure the
+proper functioning of business processes. It consists of organiza-
+tional preventive measures (such as policies and work instructions)
+and internal controls and audits (particularly by Internal Audit).
+the ERM, which is a risk management system in the narrow sense.
+preventive measures
+E.ON attempts to minimize the operational risks of legal proceedings
+and ongoing planning processes by managing them appropriately
+and by designing appropriate contracts beforehand.
+•
+a management information system
+•
+an internal monitoring system
+E.ON's risk management system in the broader sense has a total of
+four components:
+Scope
+In 2021 E.ON for the first time developed a qualitative scenario
+analysis describing the impact of three different climate scenarios
+on E.ON and on individual E.ON business units through 2050. This
+involved defining reference scenarios and assessing and identifying
+the relevant business units on the basis of key value drivers and
+related key performance indicators ("KPIs"). The next step was to
+develop a qualitative scenario impact analysis by analyzing the
+key value drivers identified by the business units and performing a
+risk assessment as well as by evaluating the business impacts and
+developing strategic recommendations.
+In 2021 E.ON integrated the reporting of non-financial risks related
+to ESG and their impact on the Group into the ERM. All risks and
+chances related to ESG are identified in the ERM system.
+E.ON strives to operate responsibly at all times and therefore
+monitors all the material impacts of its business activities. Alongside
+financial aspects, E.ON also considers environmental, social, and
+governance ("ESG") aspects along its value chain. The systematic
+consideration of non-financial issues enables the Company to iden-
+tify opportunities and risks for business development at an early
+stage.
+•
+84
+Managing Operational and IT Risks
+E.ON IT systems are maintained and optimized by qualified E.ON
+Group experts, outside experts, and a wide range of technological
+security measures. In addition, the E.ON Group has in place a range
+of technological and organizational measures to counter the risk of
+unauthorized access to data, the misuse of data, and data loss.
+quality management, control, and assurance
+company guidelines as well as work and process instructions
+•
+85
+→ Business Report → Forecast Report →Risks and Chances Report
+→ Disclosures Regarding Takeovers → Corporate Governance Declaration
+Combined Group Management Report
+→ Corporate Profile
+→ Strategy and Innovation → Employees
+→ Internal Control System for the Accounting Process
+Back
+To limit operational and IT risks, E.ON continually improves its
+network management and the optimal asset dispatch of its assets.
+At the same time, E.ON implements operational and infrastructure
+improvements that will enhance the reliability of its generation
+assets and distribution networks, even under extraordinarily adverse
+conditions. In addition, E.ON has factored the operational and finan-
+cial effects of environmental risks into its emergency plan. They are
+part of a catalog of crisis and system-failure scenarios prepared for
+the Group by the Incident and Crisis Management team.
+↑
+Contents
+E.ON Annual Report 2021
+regular facility and network maintenance and inspection
+•
+further refinement of production procedures, processes, and
+technologies
+systematic employee training, advanced training, and qualification
+programs for employees
+The following are among the comprehensive measures E.ON takes
+to address such risks (also in conjunction with operational and IT
+risks):
+Managing Health, Safety, and Environmental ("HSE"), Human
+Resources ("HR"), and Other Risks
+Search
+Combined Group Management Report
+→ Corporate Governance Declaration
+Combined Group Management Report
+Energy
+Customer
+Central Enterprise Risk Management
+Audit and Risk
+Committee
+Steer
+E.ON SE
+Supervisory
+Board
+E.ON SE
+Management
+Board
+Committee
+Solutions
+Risk
+Group
+Bodies
+Decision-Making
+Group
+Enterprise Risk Management System in the Narrow Sense
+Risks and Chances Report
+83
+→ Corporate Governance Declaration
+Units and
+Departments
+→Risks and Chances Report
+Networks
+Non-Core
+Business
+→ Business Report → Forecast Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile → Strategy and Innovation
+→ Employees
+→ Internal Control System for the Accounting Process
+Back
+↑
+Search
+Contents
+III
+E.ON Annual Report 2021
+Govern and
+Consolidate
+All risks and chances have an accountable member of the Manage-
+ment Board, have a designated risk owner who remains operation-
+ally responsible for managing that risk/chance, and are identified in
+a dedicated bottom-up process.
+transparency on E.ON's risk position in compliance with legal
+requirements including KonTraG, BilMoG, and BilReG.
+• meaningful information about risks and chances to the business,
+thereby enabling the business to derive individual risks/chances
+as well as aggregate risk profiles within the time horizon of the
+medium-term plan
+E.ON's Enterprise Risk Management ("ERM") provides the manage-
+ment of all units as well as the E.ON Group with a fair and realistic
+view of the risks and chances resulting from their planned and con-
+tracted business activities. It provides:
+Objective
+Internal Audit
+Local Risk Committees
+Identify, Evaluate
+and Manage
+Corporate
+Functions
+E.ON'S ERM is based on a centralized governance approach which
+defines standardized processes and tools covering the identification,
+evaluation, countermeasures, monitoring, and reporting of risks
+and chances. Overall governance is provided by Group Risk Manage-
+ment on behalf of the E.ON SE Risk Committee.
+E.ON faces earnings risks relating to net income from financial
+liabilities and interest-rate derivatives that are based on variable
+interest rates and from non-current asset-retirement obligations.
+net-zero target
+in lost time per million hours of work.
+new/migrated digital sales platforms
+People
+Number of employees²
+Training hours per employee per year
+Nationalities
+72,242
+22
+115
+Note: Data presented for full-year 2023 or as of December 31, 2023.
+¹Solar systems, batteries, efficient heating such as heat pumps, wall-mounted charging points.
+2Number of employees does not include apprentices, working students, or interns.
+This figure reports full time equivalents ("FTE"), not persons.
+60
+= Contents Q Search ← Back
+Financials
+Outputs
+Return on capital employed
+-11%
+Earnings per share year on year growth³
+-12%
+Dividend per share
+€0.53
+Operations
+Regulated asset base growth
+-40%
+-10%4
+Sustainability
+Digitalization
+The following overview uses examples and relevant data to show how we create value for our stakeholders. The three key elements of
+E.ON's strategy-sustainability, digitalization, and growth-are the centerpiece of our business model and deeply embedded in the way
+we think, work, and impact people's lives. This overview is guided by the International Integrated Reporting Council's ("IIRC") framework.
+Financials
+Inputs
+Total investments 2024-2028
+Credit Rating
+Share of Group funding via green bonds
+Operations
+Connected renewables capacity
+Residential customer solutions installed¹
+Energy sales customers
+Energy Infrastructure Assets
+Digitalization
+Portion of applications migrated
+from our data centers to the cloud
+Portion of customers served via
+€42bn
+Strong BBB/Baa
+>50%
+98.6 GW
+124,000
+-47m
+-6,000
+Growth
+Making new
+energy work
+100%
+How We Create Value
+SAIDI5 Germany
+Share of green power sales
+WE are the change agent in the
+energy transition for customers, cities,
+and industries: together with our
+customers we are saving more than
+100 million tons of CO₂e each year.
+Our business activities make a significant contribution to the following UN Sustainable Development Goals
+7
+AFFORDABLE AND
+CLEAN ENERGY
+11
+SUSTAINABLE CITIES
+AND COMMUNITIES
+13 ACTION
+CLIMATE
+7
+E.ON Integrated Annual Report 2023
+Key Performance Indicators
+Financial
+الملم
+Dividend per Share (€)
+0.30
+0.53
+0.51
+0.49
+0.46 0.47
+0.43
+Annual dividend
+growth up to
+WE tackle the massively increasing
+complexity of the energy world:
+digitalization enables us to smartly
+control the volatile feed in from
+renewable power producers and unlock
+additional value for our businesses.
+21.3 minutes
+< >
+WE enable our customers to participate
+in the energy transition by making our
+solutions accessible on their individual
+journeys to net zero.
+54%
+Generated energy: power, heat, cooling & steam 30.0 TWh
+Digitalization
+Smart Energy Meter installations
+Smart secondary substations
+13.8m
+>15,000
+People
+Share of female executives
+Average length of service
+Corporate volunteering hours
+24%
+13 years
+22,129
+Note: Data presented for full-year 2023 or as of December 31, 2023.
+3Earnings per share from adjusted net income compared to prior year.
+4CAGR 2022-2028. Power only. Assuming constant number of network concessions,
+including Turkey and Slovakia.
+5System average interruption duration index (minutes per customer per year in Germany).
+E.ON Integrated Annual Report 2023
+How We Make an Impact
+= Contents Q Search ← Back
+甘甘
+WE operate the backbone for Europe's
+green energy transition: more than 15%
+of all renewables in Europe are
+connected to our grids.
+WE take responsibility for society and
+ensure stability: more than 20% of all
+European and UK citizens rely on secure
+and affordable energy provided by E.ON.
+52
+5 percent
+E.ON Integrated Annual Report 2023
+Dividend of €0.53 per share proposed for the 2023
+financial year, a year-on-year increase of 4 percent
+138
+To Our Investors
+14
+Consolidated Statement of Changes in Equity
+Notes
+140
+142
+Combined Group Management Report
+26
+Other Information
+249
+Corporate Profile
+Climate Protection and Environmental Management
+Employees and Society
+225
+29
+Declaration of the Board of Management
+250
+40
+Independent auditor's report
+251
+55
+Consolidated Statement of Cash Flows
+Independent Assurance Practitioner's Report
+5
+= Contents Q Search ← Back
+E.ON Integrated Annual Report 2023
+it's on us
+Integrated Annual Report 2023
+e.on
+making new
+energy work
+We are the playmaker of change in the
+energy industry. Leading the way in
+innovative, sustainable, digital-first
+solutions that transform the way Europe
+is powered for all.
+Contents
+Q Search Back
+E.ON Integrated Annual Report 2023
+About E.ON
+= Contents Q Search ← Back
+Europe's energy system is becoming
+ever lower in CO2, more decentralized,
+and more digital. In short: more
+sustainable.
+Our two core businesses-energy networks
+and customer solutions-are playing a big role
+in making this happen. E.ON is one of Europe's
+largest operators of energy networks and
+energy infrastructure and providers of
+innovative customer solutions. The
+contribution of our roughly 75,000 employees
+is therefore crucial to successfully propelling
+the energy transition in Europe.
+Energy Networks
+Our distribution networks are the backbone of the new
+energy world. We are gradually developing them into
+intelligent platforms that control complex energy and
+data flows and provide customers with new options for
+dealing with energy. Without distribution networks there
+can be no energy transition and no climate protection. The
+expansion, modernization, and operation of distribution
+networks support security of supply and ensure the most
+efficient use of green electricity. This makes our networks
+the foundation of livable cities, communities, and regions.
+Customer Solutions
+Our solutions help customers meet their personal energy
+needs and decarbonization goals. This includes energy
+sales, which offers a wide range of green electricity and
+green gas tariffs, as well as our solutions business, which
+provides innovative, sustainable, and digital products and
+services. Solar power systems, eMobility, energy storage,
+sensible energy control, and solutions for sector
+integration enable our customers to reduce their costs
+and emissions and also to increase their comfort and
+quality of life. This applies equally to residential
+customers and small businesses as well as large
+companies and municipalities.
+Market presence
+Headquarter
+Essen, Germany
+3
+E.ON Integrated Annual Report 2023
+contents
+Business Highlights
+Debt factor of 4.0 at year-end 2023 significantly
+below the maximum figure of 5.0
+257
+74
+131
+Sustainable Accounting Standards Board ("SASB") Index
+Financial Calendar and Imprint
+293
+299
+Consolidated Financial Statements
+133
+Consolidated Statement of Income
+Consolidated Statement of Recognized Income and Expenses
+Consolidated Balance Sheets
+135
+136
+4
+E.ON Integrated Annual Report 2023
+business
+highlights
+сл
+5
+ши
+= Contents Q Search ← Back
+Investment tempo accelerated and a total of
+€6.4 billion invested in 2023
+E.ON successfully continued growth path in 2023
+and surpassed forecast in part owing to temporary
+effects, posting adjusted EBITDA of €9.4 billion and
+adjusted net income of €3.1 billion for the 2023
+financial year
+Outlook for the 2024 financial year: adjusted
+EBITDA of €8.8 and €9.0 billion and adjusted net
+income of €2.8 and €3.0 billion anticipated
+(€
+292
+Governance
+Sustainable Development Goals ("SDG")-Index
+Non-Financial Statement ("NFS") Index
+Boards
+260
+Sustainable Finance and Investment
+85
+Summary of Financial Highlights
+264
+Business Report
+94
+Forecast Report
+118
+Task Force on Climate-related Financial Disclosures ("TCFD")
+ESG Figures
+266
+267
+Risks and Chances Report
+120
+EU Taxonomy
+272
+Disclosures Pursuant to Section 289, Paragraph 4, and Section 315, Paragraph 4 of the
+German Commercial Code on the Internal Control System for the Accounting Process
+Disclosures Pursuant to Section 289a and Section 315a of the German Commercial
+Code and Explanatory Report
+Global Reporting Initiative ("GRI") Index
+285
+128
+291
+= Contents Q Search ← Back
+134
+4,753
+Dividend payout
+1,384
+1,331
+4
+¹Adjusted for non-operating effects. . 2The figure for asset-retirement obligations at December 31,
+2023, does not fully correspond to the figure shown in the Consolidated Balance Sheets. This is
+because economic net debt is calculated in part based on the actual amount of E.ON's obligations. The
+figure at December 31, 2022, corresponded to the figure shown in the Consolidated Balance Sheets..
+3 Change in percentage points. . 4Attributable to shareholders of E.ON SE.. 5 Based on shares
+outstanding (weighted average). . For the respective financial year; the 2023 figure represents
+management's dividend proposal.
+Credit rating Moody's
+Credit rating Fitch
+Average capital employed
+Equity
+Total assets
+Cash Conversion Rate (%)
+ROCE (%)
+9
+E.ON Integrated Annual Report 2023
+Key Performance Indicators
+Sustainability
+«
+CO₂ footprint (million tons CO2 equivalents)
+82.58
+65.23
+-50%¹
+4
+= Contents Q Search ← Back
+0.51
+Dividend per share6 (€)
+2
+19,970
+21,867
+-9
+113,506
+134,009
+-15
+80
+151
+-473
+10.7
+8.8
+223
+Earnings per share 4,5 (€)
+0.20
+0.70
+-71
+Adjusted net income per share 4.5 (€)
+1.18
+1.05
+12
+0.53
+58,760
+Community investment 2023
+¹Compared to 2022
+3.46
+2022
+2023
+2030
+target
+1Relative to 2019 figures.
+Scope 1
+Scope 2
+Scope 3
+<0.07
+2022
+2023
+2030
+target
+1Number of serious incidents and fatalities among employees
+per million hours of work.
+10
+2.05
+2.17
+2022
+2023
+Investments (€m)
+1Number of work-related accidents resulting
+3.38
++22%¹
+-75%¹
+Scope 3
+Proportion of female executives (%)
+24
+24
+23
+Corporate Volunteering 2023
+22,129 hours
+2022
+2023
+↑
+2031
+target
+Serious incidents and fatalities
+among employees (SIF)¹
+Lost time injury frequency
+among employees¹
+Scope 1 & 2
+by 2040
+0.04
+0.03
+-50%¹
+2.88
+2.01
+to
+by 2050
+59,895
+≥32
+BBB+
+Financial Figures
+€ in millions
+Sales
+الملم
+= Contents Q Search ← Back
+2023
+2022
++1-%
+93,686
+115,660
+-19
+Adjusted EBITDA¹
+9,370
+8,059
+16
+- Regulated business (%)
+70
+66
+6
+- Quasi-regulated and long-term contracted business (%)
+3
+Financial
+Key Figures of the E.ON Group
+E.ON Integrated Annual Report 2023
+2023
+6,421
+Total investments
+0
+of around
+€42bn
+2017 2018 2019 2020 2021 2022 2023 2024-2028
+2022
+2023
+2024-2028
+Earnings per share from
+adjusted net income (EPS)
+4
+2028 target
+Solid financial targets
+Capital structure with strong rating
+Strong BBB/Baa
+Debt factor
+≤5.0
+8
+E.ON Group adjusted EBITDA (€m)
+-11,000
+8,059 9,370
+2022
+-€1.25
+-25
+Target by 2028
+27
+-44
+Cash provided by operating activities before interest and taxes
+7,225
+11,511
+-37
+Economic net debt (at year-end)²
+37,691
+32,742
+Debt factor²
+4.0
+4.1
+-2
+Credit rating S&P
+BBB
+BBB
+0
+Baa2
+- Merchant business (%)
+Baa2
+0
+BBB+
+10,045
+5,654
+15
+35
+Adjusted EBIT¹
+6,387
+-10
+Cash provided by operating activities
+30
+5,197
+23
+Net income/loss
+760
+-66
+Net income/loss attributable to shareholders of E.ON SE
+517
+2,242
+1,831
+-72
+Adjusted net income¹
+3,068
+2,728
+12
+Investments
+4,753
+6,421
+11,446
+19
+19
+93,686
+18,128
+17,655
+473
+E.ON Group
+97
+75,558
+40
+72
+Energy Networks
+10,058
+55
+10,113
+3,914
+14,027
+72
+Customer Solutions
+4,737
+69,743
+11,446
+393
+5,130
+Q1-Q4 2022
+Corporate Functions/Other
+Customer Solutions
+8
+Taxonomy-
+74,873
+Not
+Q1-Q4 2023
+aligned
+Energy Networks
+12,598
+taxonomy-
+aligned
+74
+5,058
+399
+Total
+12,671
+5,457
+taxonomy-
+eligible
+93
+Total
+Taxonomy-
+aligned
+Taxonomy-
+aligned
+(of total)
+(of eligible)
+4,945
+17,616
+72
+72
+99
+59,167
+64,624
+8
+Taxonomy-
+eligible
+(of total)
+7
+ESG Asset Management and Pension Assets
+99
+In 2019 E.ON presented its first Green Bond Framework under
+which it issues green bonds. E.ON issued its first green bonds that
+same year. In 2021 E.ON then became the first company to fully
+align its revised Green Bond Framework not only with the ICMA
+Green Bond Principles-the current market standard for green
+bonds-but also with the EU Taxonomy. The taxonomy defines
+which economic activities are classified as environmentally
+sustainable, thereby setting a Europe-wide standard for
+sustainable investment. E.ON had €10.15 billion of green bonds
+outstanding at year-end 2023, making it Germany's second-
+largest issuer of green bonds. The green bonds issued in the year
+under review accounted for €2.5 billion of this amount. E.ON
+secured over €1.5 billion of green bond financing in January 2024.
+E.ON intends to cover more than 50 percent of its annual financing
+requirements with green bonds.
+E.ON's Green Bond Framework focuses on sustainable projects in
+the categories Electricity Networks, Renewable Energy, Energy
+Efficiency, and Clean Transportation, both in E.ON's electricity
+network and customer solutions businesses. E.ON's Green Bond
+Portfolio, a portfolio of qualifying assets in line with the Green
+Bond Framework, consisted of assets worth €24.2 billion at year-
+end 2023. E.ON's electricity networks in Germany and Sweden
+account for the largest share.
+Alongside its focus on green bonds, E.ON's corporate financing
+includes a sustainability-linked €3.5 billion syndicated credit
+facility that was concluded in 2019. After two options to extend
+the facility were exercised, its term ends in October 2026. The
+facility's credit margin is linked, among other things, to the
+development of certain ESG ratings. This gives us additional
+financial incentives to pursue a sustainable corporate strategy. The
+ESG ratings are set by three renowned agencies: ISS ESG, MSCI
+ESG Research, and Sustainalytics. The facility serves as a reliable
+and sustainable liquidity reserve for the E.ON Group and can be
+drawn on as needed.
+ESG Ratings of E.ON O
+E.ON has been included in numerous ESG ratings for years. In
+addition, our regional and national sustainability activities regularly
+receive awards. In the new compensation system for Management
+Board members, ESG ratings are a component of the E.ON
+Sustainability Index and represent a performance criterion that is
+taken into account in the Management Board's long-term variable
+compensation. In the ESG ratings that are important to us, E.ON
+has received predominantly good scores for years. In 2023 E.ON
+significantly improved its score in two important ESG ratings. The
+Sustainability Channel at eon.com presents the most relevant and
+current results. The next section takes a closer look at four ratings
+that are relevant for E.ON.
+CDP Climate Change
+In 2023 CDP once again placed E.ON on its A List for
+environmental reporting. E.ON's current rating is in the Leadership
+Level, placing E.ON among the top 346 companies out of nearly
+15,000 assessed to make the A List in 2023.
+ISS ESG
+International Shareholder Services ("ISS") upgraded E.ON from a
+C+ rating to B-, giving us Prime status. This means E.ON meets ISS
+ESG's high standards for sustainability performance in its industry.
+The letter ratings range from D- to A+. In addition, E.ON's decile
+rank is 3. The decile rank indicates in which decile of its industry
+(tenth of the total number) a company's rating falls. The ranks go
+from 1 (best: a company's rating is in the top decile of its industry)
+to 10 (lowest).
+MSCI ESG Research
+MSCI is one of the world's best-known index providers. MSCI uses
+its own ESG ratings to create its sustainability indices. MSCI gave
+E.ON a rating of AA. Its rating scale extends from CCC to AAA.
+Sustainalytics
+Sustainalytics is a global leader in providing ESG and corporate
+governance research and ratings. In 2023 E.ON significantly
+improved its Sustainalytics ESG Risk Rating. After receiving a
+score of 23.2 points in the medium risk category in the prior year,
+E.ON now has 17.6 points and is assessed to be low risk. E.ON is
+therefore ranked fourth out of the 101 companies rated in its
+subindustry.
+E.ON links the provision and investment of pension assets to
+sustainable purposes: by financing a company pension plan and by
+considering sustainability criteria when making decisions about
+how the plan's assets are invested. E.ON draws, for example, on
+the Norwegian State Pension Fund's research and embargo lists in
+order to avoid questionable investments. We also select asset
+managers whose investment processes systematically take ESG
+aspects into account. In addition, E.ON continually develops its
+own ESG approach to the investment process in order to adapt to
+the latest developments at the Company and in the market.
+93
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+Business Report
+Not
+Macroeconomic and Industry Environment
+Debt capital represents an important financing source for the E.ON
+Group to implement its strategy. Sustainability aspects play an
+increasingly important role in many international investors'
+decision for or against a particular investment. Accordingly, E.ON
+has also systematically considered sustainability in the structuring
+of its financing as well, both in debt and credit markets.
+Sustainable Finance O
+= Contents Q Search ← Back
+→Risks and Chances Report
+92
+Corporate Functions/Other
+26,760
+26,760
+E.ON Group
+14,795
+448
+15,243
+100,417
+115,660
+13
+13
+26
+97
+¹Due to the changes in segment reporting, the previous year's figures have been adjusted accordingly.
+92
+92
+= Contents Q Search Back
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+40
+%
+Not
+Taxonomy-eligible revenues
+(of total)
+(of eligible)
+Energy Networks
+797
+1
+798
+217
+1,015
+79
+79
+100
+Customer Solutions
+58
+24
+83
+99
+182
+45
+32
+70
+Corporate Functions/Other
+77
+77
+E.ON Group
+855
+Taxonomy-
+aligned
+Taxonomy-
+aligned
+Taxonomy-
+eligible
+(of total)
+Total
+Macroeconomic Environment
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+→Risks and Chances Report
+Overall, the proportion of the respective taxonomy-aligned as well
+as taxonomy-eligible investments by economic activity are at the
+prior-year level, whereas investments in absolute terms-and thus
+also taxonomy-aligned and taxonomy-eligible investments in
+absolute terms-rose significantly relative to 2022.
+Operating Expenses
+In the 2023 financial year, E.ON had around €1.3 billion in
+operating expenses that meet the definitions of the EU taxonomy.
+€393 million of these expenses were not taxonomy-eligible, and
+€855 million were taxonomy-aligned. This corresponds to around
+97 percent of taxonomy-eligible expenses.
+As with investments, the majority of aligned expenses resulted, as
+in the prior year, from maintenance activities for E.ON's electricity
+network (€754 million). Smaller amounts related to gas
+distribution networks, particularly to prevent or reduce methane
+leaks (€28 million).
+26
+The business with decentralized electricity and/or heat/cooling
+generation plants accounted for more than €20 million.
+€30 million was related to the installation and maintenance of
+renewable technologies at the Customer Solutions segment.
+EU Taxonomy Operating Expenses¹
+€ in millions
+Taxonomy-eligible operating expenses
+%
+EU taxonomy ratios
+%
+%
+Not
+Taxonomy-
+Q1-Q4 2023
+aligned
+aligned
+Total
+taxonomy-
+eligible
+The proportion of the respective taxonomy-aligned as well as
+taxonomy-eligible operating expenses by economic activity are
+therefore at the prior-year level.
+881
+393
+1,274
+59
+938
+340
+1,278
+73
+71
+97
+¹Due to the changes in segment reporting, the previous year's figures have been adjusted accordingly.
+= Contents Q Search ← Back
+91
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+59
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+Revenues
+As in the prior year, in 2023 the Customer Solutions segment
+again generated the majority of E.ON's external sales. However,
+revenues from the sale of electricity and gas to end-customers are
+not covered by the EU taxonomy. As expected, therefore, only
+19 percent of external sales were taxonomy-eligible.
+Nearly all taxonomy-eligible revenues were also taxonomy-
+aligned, of which the vast majority-€16.2 billion-related to
+electricity transmission fees in E.ON's distribution networks. E.ON
+reports €12.6 billion as external taxonomy-aligned revenues in the
+Energy Networks segment and €3.9 billion in the Customer
+Solutions segment from sales revenues for network charges
+insofar as these were attributable to E.ON's own distribution
+network territory.
+EU Taxonomy Revenues¹
+€ in millions
+E.ON generated additional taxonomy-aligned revenues of around
+€0.8 billion relating, as in the prior year, to the energy efficiency of
+buildings and renewable energy technologies, such as the
+installation, maintenance, and repair of photovoltaic systems, heat
+pumps, and solar-powered systems for water heating.
+Our energy infrastructure business, which generates decentralized
+electricity and/or heat/cooling from a variety of sources generated
+around €0.1 billion in aligned revenues.
+The proportions of the respective taxonomy-aligned as well as
+taxonomy-eligible revenues by economic activity are therefore at
+the prior-year level.
+EU taxonomy ratios
+%
+→ Forecast Report
+%
+79
+51
+69
+69
+40
+67
+97
+Q1-Q4 2022
+Energy Networks
+Customer Solutions
+24
+Corporate Functions/Other
+E.ON Group
+911
+40
+27
+6
+837
+185
+1,022
+82
+81
+99
+80
+21
+101
+96
+197
+831
+→ Forecast Report
+taxonomy-
+Economic Developments in the EU
+Although the European Commission recommended that Romania
+abolish the mechanism for capping energy prices by the end of
+2023, current law calls for power and gas prices to remain capped
+for both households and nonhouseholds until the end of March
+2025. Consumers are increasingly submitting requests to become
+prosumers, a trend supported by high Romanian government and
+EU funding. In addition, new renewables projects are being
+developed. In view of these factors, government authorities
+recognize the need to reshape the role of utilities and limit the
+capacity of new renewables projects that will be connected to
+power networks.
+Slovakia adopted a number of measures in 2023 to reduce the
+impact of high energy prices on households and businesses. These
+included in particular i) reimbursing additional costs to cover
+network losses for households and other power end-consumers at
+the level of 2022, ii) granting a subsidy to companies and
+administrative entities to cover additional costs resulting from
+energy price increases, and iii) establishing a guaranteed price for
+the power component for households in 2023 and 2024.
+The Czech Republic introduced a package of temporary crisis
+measures in 2023 to shield end-consumers-including households,
+businesses, and large industrial customers-from high energy
+prices. In addition, the government is revising social subsidy
+programs in order to combat energy poverty. Customers
+responded to recent market volatility and available government
+financial aid by embracing self-generation, resulting in a
+98
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+→Risks and Chances Report
+= Contents Q Search ← Back
+considerable increase in the demand for solar systems, energy
+storage devices, and heat pumps. This put significant pressure on
+the availability of network connection capacity. At the same time,
+the government continued to revise the market design and define
+measures to support the Czech Republic on its path to carbon
+neutrality.
+The Hungarian government's energy policy for 2023 focused on
+keeping prices low for households and strengthening power
+networks in order to integrate more renewable energy. A Ministry
+of Energy and a Ministry for EU Affairs were also established in
+2023. The latter is coordinating and planning Hungary's EU
+Council presidency in the second half of 2024.
+Special Events in the Reporting Period
+War in Ukraine Continues to Create Significant
+Macroeconomic Uncertainty and Impacts the Energy Sector
+E.ON's priority since the beginning of the war in Ukraine in early
+2022 has been to secure the energy supply in these anxious times.
+E.ON's power, gas, and heat networks in various regions of Europe
+are running stably, even in the current situation.
+The war's repercussions also have implications for E.ON's
+business. In particular, volatile commodity prices and energy
+demand behavior impact our operations and are described in
+greater detail below in the sections entitled "Earnings Situation"
+and "Financial Situation."
+E.ON Successfully Issues Bonds in 2023
+In 2023 E.ON successfully issued four bonds totaling ��3.3 billion:
+• €800 million bond that matures in January 2028 and has a
+coupon of 3.5 percent (January 2023)
+East-Central Europe
+• €1 billion green bond that matures in January 2035 and has a
+coupon of 3.875 percent (January 2023)
+heating prices rose sharply, mainly because of greater demand for
+Nordic biomass due to lower imports from Russia. The rise in
+district heating prices attracted a lot of media attention and led to
+a policy debate on stricter price regulation. The government
+continued to focus on ensuring a robust electricity system with
+nuclear energy as the basis for the power supply. It took numerous
+initiatives during the year to develop nuclear energy with the clear
+aim of building new reactors.
+Sweden
+97
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report
+→Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Transformation Fund (German abbreviation: KTF). If the ruling's
+principles are applied to the other special funds, the Economic
+Stabilization Fund (German abbreviation: WSF) is also indirectly
+affected. As a result, the German government did not, as planned,
+extend state funding by means of power and gas price caps until
+the end of March 2024; instead, they expired at the end of 2023.
+In terms of (cyber) security, Germany's implementation of the
+resilience of critical entities directive ("CER Directive"), the
+measures for high common level of cyber security ("NIS2
+Directive"), the European Commission's network code on
+cybersecurity focused on avoiding unnecessary bureaucracy and
+double regulation. E.ON has largely implemented the planned
+security measures.
+United Kingdom
+The U.K. government provided billions of pounds of financial
+support to help households and businesses cope with the worst
+effects of high wholesale prices in the first quarter of 2023.
+Wholesale energy prices have since fallen from their peak, but bills
+are still almost double what they were before the energy crisis.
+Energy affordability remains a key policy concern, as some
+customers are finding it increasingly difficult to bear the costs. In
+response, a winter subsidy was introduced. Despite the challenges
+of energy affordability, the U.K. government remains committed to
+its net-zero emissions target and increased subsidies in some
+areas, such as heat pumps, by 50 percent to accelerate adoption.
+In other areas, however, the pace of change slowed slightly, as
+evidenced by the recent decision to postpone the ban on the sale
+of new gasoline and diesel cars by five years to 2035, although the
+target that 80 percent of all new cars will be electric by 2030
+remains in place.
+Netherlands
+In 2023 the Dutch government adopted a €11.2 billion support
+package for energy costs. Together with energy suppliers, it
+introduced a price cap against rising energy prices. The energy
+sector established a €50 million emergency fund for the most
+vulnerable households. The aim is to enable 165,000 such
+households to pay their energy bills. It was announced that the
+2024 budget foresees no general price increases for 2024. After
+the cabinet's resignation in the summer and the elections held in
+late November 2023, the focus is on forming a new government.
+Italy
+Italy's government extended existing support measures for end-
+customers through the end of 2023 (a reduction in general
+network charges, social grants for vulnerable customers, and a
+VAT reduction for natural gas only). However, the government
+already expressed its willingness to limit the support measures for
+vulnerable customers in 2024 in order to reduce costs for public
+budgets.
+Alongside these measures, the liberalization process continued in
+order to abolish the protective conditions for Italy's 9 million
+nonvulnerable customers. In the power sector, auctions are being
+held for nonvulnerable household end-customers who are to be
+transferred to the free market. In the gas sector, regulated prices
+for nonvulnerable customers were abolished from the start of
+2024.
+The government also presented a first updated version of its
+National Energy and Climate Plan, which is to be based on a
+realistic and technology-neutral approach. In addition, additional
+decarbonization measures are being discussed or are in the
+approval phase. The aim is to support the development of
+renewable energy facilities and projects and thus to help Italy
+achieve its climate targets for 2030.
+At the beginning of 2023, Sweden's government provided
+financial support for households and companies that had been
+most affected by high power prices in the fourth quarter of 2022
+and the first quarter of 2023. Prices have since stabilized, and the
+government announced no plans for financial support for the
+winter of 2023/2024. While power prices have stabilized, district
+On November 15, 2023, the Federal Constitutional Court ruled
+that the law on the second supplementary budget for 2021 is
+unconstitutional. The ruling directly affects the Climate and
+• €750 million green bond that matures in March 2029 and has a
+coupon of 3.75 percent (August 2023)
+Changes in Segment Reporting
+At a constitutive meeting of the Supervisory Board following the
+Annual Shareholders Meeting on May 17, 2023, Erich Clementi
+was elected to succeed Karl-Ludwig Kley. Erich Clementi has been
+Deputy Chairman of the E.ON SE Supervisory Board since 2016.
+Karl-Ludwig Kley decided not to stand for reelection to the
+Supervisory Board. In addition, the E.ON SE Supervisory Board
+now consists of 16 members. The previous size of 20 members
+had applied temporarily and for a limited period following the
+innogy takeover.
+Middle East Conflict: Hamas Attack on Israel
+Following Hamas's attack on Israel on October 7, 2023, and the
+subsequent counterattacks, the conflict has not caused a major
+regional war, and its impact on energy markets is currently
+minimal. A team from E.ON's Innovation Hub is based in Israel. We
+will continue to support it through our collaboration and
+investments. The escalation of the Middle East conflict has so far
+not had any noteworthy impact on E.ON's business activities.
+Supervisory Board to Decide on Patrick Lammers's
+Successor
+Prior to the Supervisory Board meeting in mid-December 2023,
+the E.ON SE Supervisory Board and Patrik Lammers jointly agreed
+not to extend his contract, which runs until July 31, 2024. Patrick
+Lammers will continue to perform his role as Chief Operating
+Officer-Commercial until the end of his contract term. The
+Supervisory Board will decide on his successor in the course of
+2024.
+Subsequent Events
+Changes to Business Model
+On September 11, 2023, the Management Board approved a new
+management concept for the E.ON Group. Effective from January
+1, 2024, this entails a change in the definition of certain operating
+segments in accordance with IFRS 8 and the reallocation of the
+current goodwill amounts for all operating segments affected by
+the changes and reporting goodwill as of January 1, 2024. The
+Management Board's decision was regarded as an opportunity to
+test the goodwill of the existing operating segments for
+impairment. The impairment tests carried out as of September
+2023 found no indication of impairment. Following the entry into
+force of the new management concept, the goodwill amounts
+reallocated as of January 1, 2024, are subject to the provisions of
+IAS 36 on impairment testing. In the new Energy Infrastructure
+Solutions segment, there may be an impairment risk of up to a
+mid-triple-digit million euro amount. The Business Model chapter
+contains more information.
+E.ON Successfully Issues €1.5 Billion in Green Bonds at the
+Start of the Year
+In early January E.ON successfully issued two bonds totaling €1.5
+billion:
+• €750 million green bond that matures in January 2031 and has
+a coupon of 3.375 percent
+• €750 million green bond that matures in January 2036 and has
+a coupon of 3.75 percent.
+These bond transactions have enabled E.ON to lay the foundation
+for covering its funding requirements for 2024.
+Arbitration Proceedings in Spain
+E.ON SE, E.ON Finanzanlagen GmbH, and E.ON Iberia Holding
+GmbH are plaintiffs in arbitration proceedings against the
+Kingdom of Spain. In the arbitration proceedings, the three
+companies are asserting claims for damages for changes to Span's
+remuneration scheme for renewable energy. The arbitration
+proceedings have been pending at the International Center for
+Settlement of Investment Disputes ("ICSID") since they were
+registered on August 10, 2015. On January 18, 2024, an
+arbitration tribunal awarded the companies damages totaling
+approximately €0.3 billion. As the legal process has not yet been
+exhausted and there are therefore still uncertainties regarding the
+proceedings' final outcome, E.ON is not reporting a receivable or
+any associated income in its 2023 financial statements. Instead, it
+discloses a contingent receivable.
+Termination of the Operating Concession for a Wastewater
+Treatment Plant in Croatia
+A concession agreement for the operation of a wastewater
+treatment plant exists between Zagrebacke otpadne vode d.o.o, a
+company consolidated in the E.ON Group using the equity method,
+and the City of Zagreb. By majority resolution of the city assembly
+on January 25, 2024, the City of Zagreb exercised its contractually
+agreed-on right to unilaterally terminate this concession. This
+100
+E.ON Integrated Annual Report 2023
+Supply chain bottlenecks and other repercussions of the Covid-19
+pandemic along with the effects of geopolitical tensions caused by
+the war in Ukraine and associated uncertainties adversely affected
+the global economy in 2023. High inflation and interest rate
+increases by central banks also had a negative impact on the global
+economy in the year under review. This is reflected in forecasts for
+gross domestic product ("GDP") growth. The OECD predicts global
+GDP growth of 2.9 percent in 2023, which is below the 3.3
+percent growth recorded in 2022.
+Erich Clementi is the New Chairman of the E.ON SE
+Supervisory Board
+• €750 million green bond that matures in August 2033 and has a
+coupon of 4 percent (August 2023).
+PreussenElektra earned power-market proceeds for about 2 TWh
+since January 1, 2023. These proceeds must be set against the
+additional costs arising from the extension and the provisions of
+the Act on the Introduction of an Electricity Price Cap and on the
+Amendment of Other Provisions of Energy Law (German
+abbreviation: "StromPBG") on the Taxation of Electricity Market
+Revenues, which took effect on December 24, 2022. E.ON plans to
+take the proceeds from continued operation and use them for
+investments in the implementation of energy transition.
+The Temporary Continued Operation of Germany's
+Remaining Nuclear Power Plants ("NPPs") Ended on April
+15, 2023
+E.ON's segment reporting was adjusted effective January 1, 2023.
+PreussenElektra's generation activities were originally planned to
+end on December 31, 2022. Consequently, Non-Core Business has
+been reported under Corporate Functions/Other from the
+beginning of 2023. In addition, owing to the discontinuation of
+operations and the dismantling of all nuclear power plants, the
+associated expenses and income are reported under non-operating
+expense/income.
+Earthquakes in Southeastern Turkey and Northern Syria
+Southeastern Turkey and northern Syria experienced several major
+earthquakes on February 6, 2023, and in the days afterward. They
+resulted in electricity and gas service outages. At E.ON, Enerjisa
+Enerji's supply territory was affected. Network repair activities are
+still ongoing, and the power supply has largely been restored. All of
+Enerjisa Üretim's power plants are fully operational. From today's
+perspective, there have been no material implications for E.ON's
+asset, financial, and earnings situation.
+Consortium Agreement with RheinEnergie
+The consortium agreement concluded on June 29, 2021, between
+Westenergie AG, a fully consolidated subsidiary of the E.ON
+Group, and Rhein Energie AG was finalized effective March 31,
+2023, after the conditions imposed by the Bundeskartellamt
+(German Federal Cartel Office) were met. The closing of the
+transaction enabled Westenergie and RheinEnergie to merge
+shareholdings in individual municipal utilities into rhenag. It also
+resulted in the initial consolidation of AggerEnergie GmbH in the
+E.ON Group. In addition, Westenergie transferred 20 percent of
+the shares of Stadtwerke Duisburg, which, pursuant to IFRS 5,
+was previously included in E.ON's Consolidated Financial
+Conclusion of a Future Consolidation Agreement with ZSE
+Shareholders
+On April 8, 2022, the shareholders of Západoslovenská energetika
+a.s. ("ZSE") and of Východoslovenská energetika Holding a.s.
+("VSEH"), E.ON SE, and the Slovak Republic, concluded a Future
+Consolidation Agreement to combine ZSE and the VSEH Group.
+The agreement provides, among other things, for 100 percent of
+VSEH shares to be transferred to ZSE, the sale of all VSEH
+subsidiaries to ZSE, and the implementation of corporate law
+changes at VSEH.
+The transfer of VSEH shares to ZSE results in ZSE being VSEH's
+sole shareholder (and thus also shareholder of the VSEH
+subsidiaries). The ownership interests in ZSE remains unchanged;
+that is, E.ON has a 49 percent stake in ZSE and the Slovakian state
+a 51 percent stake. The new ZSE shareholder agreement
+essentially corresponds to the shareholder agreement that has
+been in force before. After closing of the agreement, ZSE continues
+to be accounted for using the equity method in E.ON's
+Consolidated Financial Statements, while the business activities of
+VSEH, which was previously fully consolidated, are now integrated
+in this joint venture.
+The transaction was originally expected to be closed by the end of
+2022. Accordingly, the VSEH Group has been presented as a
+disposal group in accordance with IFRS 5 since December 31,
+2021. The last condition precedent was fulfilled on June 12, 2023.
+On November 23, 2023, all closing conditions were formally
+met-in particular, the signing of the relevant documents such as
+the agreement on the transfer and contribution of the shares and
+the amended and restated shareholders' agreement as well as
+registration by the Slovak Central Depositary of Securities of the
+transfer of all of the VSEH's shares to ZSE and publication of all
+relevant documents with the Central Register of Contracts. As of
+this date, the VSEH Group was deconsolidated and the value of the
+99
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report
+→Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+investment in ZSE was increased accordingly by the fair value of
+these VSEH shares.
+The authorization of Emsland, Neckarwestheim 2, and Isar 2 NPPs
+(the latter of which is operated by Preussen Elektra, an E.ON
+subsidiary) to operate expired at the close of April 15, 2023. By
+continuing to operate in the winter of 2022-2023, Germany's
+NPPs made a valuable contribution toward securing the energy
+supply amid the crisis. Isar 2 NPP was taken offline at the close of
+April 15, 2023, and its reactor was shut down. The dismantling of
+the entire facility has begun.
+As relief for gas and heat customers, a reduced VAT on gas and
+heat deliveries applied in 2023. It expires on March 31, 2024.
+Statements as an associated company, to RheinEnergie, which
+increased its share in Rhein Energie from 20 to 24.2 percent.
+Regulations were established for a core network for hydrogen. It is
+to be about 10,000 kilometers long and initially serve for transport
+and supply to large customers. The core network was planned
+alongside the legislative process and is expected to be approved by
+the Federal Network Agency in the first quarter of 2024 so that
+pipelines can be built in a timely manner. State protection (using
+the amortization approach) is planned for the investments of
+network operators in the core network.
+In addition, generally mild weather conditions last winter made it
+possible to conserve gas reserves in underground storage facilities
+compared with prior years. The EU-wide inventory level on April 1,
+2023, was still around 56 percent (prior year: only around 27
+percent). This helped enable facility operators to fill their storage
+facilities by the start of the six-month winter season on October 1,
+2023, because demand and thus pressure on wholesale prices
+were correspondingly lower. Gas storage facilities were already
+around 96 percent full at this date and were still around 86
+percent full at year-end.
+At the time of this report's publication, reliable statements about
+reductions in customers' consumption for the winter as a whole
+were not yet possible due to weather factors. In the winter of
+2022/23, households in Germany, for example, reduced their
+consumption by about 10 percent (which is equal to the estimated
+temperature-independent reduction) and in the United Kingdom
+by around 15 percent. On balance, conservation helped lower
+demand on wholesale markets and also had a price-dampening
+effect.
+At the beginning of 2023, the month-ahead contract for one MWh
+of gas at TTF, a virtual trading point in the Netherlands, cost €77.
+Prices stabilized at around €35 by year-end. The trend for power
+was similar. The year-ahead contract for one MWh of baseload
+power cost €214 at the start of the year compared with around
+€100 at year-end. This means that the overall price level is
+currently below the level before the start of the war in Ukraine but
+remains almost twice as high as the long-term average before the
+start of the energy crisis.
+The main factors behind the currently still elevated price levels are
+the aforementioned uncertainty regarding weather for the winter
+as a whole, residual geopolitical risks, and competition for LNG on
+the global market. By contrast, the anticipated expansion of major
+producers' gas liquefaction capacity in the years ahead could lead
+to declining LNG prices in the medium term.
+94
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance
+→ Sustainable Finance → Business Report
+→ Forecast Report
+→Risks and Chances Report
+→ Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Energy Policy and Regulatory Environment
+Global
+The questions of by what means and how fast climate change
+needs to be slowed continued to dominate the global energy policy
+debate in 2023.
+At the UN Climate Change Conference COP28 in Dubai in
+December 2023, heads of state and government from almost 200
+countries agreed on a final document. The document contains key
+statements on energy. Like the EU and the German delegates at
+COP28, E.ON believes that a clear plan for phasing out fossil fuels
+is lacking at the global level. The decarbonization of the energy
+system will thus remain a critical challenge to achieve the 1.5°C
+target.
+= Contents Q Search ← Back
+Europe
+Wholesale energy prices declined significantly over the course of
+2023 compared with the prior year. The already-achieved and
+continued expansion of liquefied natural gas ("LNG") import
+capacity diminished the direct impact of the ongoing war in
+Ukraine on Europe's supply situation. At the end of last winter's
+heating period in March 2023, 48 terminals were already in
+operation in Europe and additional terminals were being planned.
+The OECD's June 2023 economic forecast for Germany still
+considered stagnation possible for the reporting year, whereas
+Germany's GDP shrank by 0.2 percent (according to the OECD) or
+by 0.3 percent (according to the German Federal Statistical Office).
+Interest-rate increases constitute a key reason for this
+development. Their intent was to counteract inflation, but they
+also dampened economic activity.
+Economic development in the eurozone could not escape the
+influence of interest rate increases and inflation either, which was
+reflected in GDP. The OECD predicts eurozone GDP growth of just
+0.6 percent in 2023. The European Central Bank ("ECB")
+responded to persistently high inflation throughout the eurozone
+in 2022 by reversing its monetary policy in mid-2022 and raising
+its key interest rate-by 0.5 percentage points-for the first time in
+16 years. Additional rate increases followed, bringing the key
+interest rate to 2.5 percent at the end of December 2022. The ECB
+continued this interest rate policy in 2023 and raised the key
+interest rate in several steps (September 2023) to 4.5 percent. The
+ECB's purpose is to make loans more expensive, dampen demand,
+and counteract high inflation rates in order to bring inflation back
+down to a medium-term target of 2 percent. The increase in the
+key interest rate had the desired effect on inflation. The inflation
+rate in the eurozone was 5.3 percent in July 2023 but fell to 2.9
+percent in December.
+Considerable efforts in all legal and economic areas remain
+necessary for Germany to achieve its expansion targets for
+photovoltaics. Amendments to the Renewable Energy Sources Act
+(German abbreviation: EEG) in particular are intended to pave the
+way for achieving the expansion targets defined in EEG 2023 in a
+way that is compatible with the energy system as a whole. The
+German federal government intends for the draft legislation to
+reconfigure the subsizes for special solar systems (agri PV, floating
+PV, moor PV, and parking PV), facilitate the expansion of rooftop
+photovoltaic systems, simplify tenant-produced power, and enable
+the communal supply of buildings. It also aims to facilitate plug-in
+solar systems and accelerate grid connection.
+→Risks and Chances Report
+GDP Growth in Real Terms in 2023
+Annual change in percent
+Germany
+-0.2%
+United Kingdom
+0.5%
+The Netherlands
+0.2%
+0.5%
+0.6%
+Sweden
+Eurozone
+World
+2.9%
+-0.5 0 05 10 15 20 25 30
+Source: OECD, September and November 2023.
+Economic Developments in Germany
+Development of Energy Prices
+In view of the energy crisis last year triggered by the war in
+Ukraine and the increasingly tangible consequences of climate
+change, EU institutions initiated or enhanced crisis-management
+Inflation, which averaged 6.6 percent in 2023 according to the
+OECD, affected the economy and households throughout the year.
+In March 2022 the European Commission therefore adopted a
+new Temporary Crisis and Transition Framework for state aid to
+further support investments in key sectors for the transition to a
+climate-neutral economy and to tackle the energy crisis. The
+framework allows member states, for example, to introduce
+additional measures that apply until the end of 2025 and to
+support the deployment of renewable energy, storage facilities,
+and systems to decarbonize industrial processes, including
+hydrogen. Under certain conditions, member states can align aid
+granted to beneficiaries in other countries outside the EU. In
+addition, the framework allows member states to support
+companies amid the energy crisis through various measures that
+were valid until December 31, 2023. In addition, the Commission
+extended until June 2024 some of the measures to grant small
+subsidies and to offset exceptionally high energy prices for
+companies most affected by the crisis.
+The German federal government took steps to accelerate the
+rollout of smart energy meters by adopting the Metering Point
+Operation Act (German abbreviation: MsbG). The MsbG, which
+was amended by the Act on the Restart of the Digitalization of the
+Energy Transition, establishes a timetable with binding targets
+through 2030. Metering point operators are obliged to
+successively equip connected consumption points with smart
+metering systems. The law took effect in May 2023.
+The amended Section 14a of the Energy Industry Act (German
+abbreviation: EnWG) stipulates that, in the future, controllable
+consumption devices like electric heat pumps and wallboxes for
+electric cars are be controlled on a network-oriented basis and, in
+return, are to receive network fee reductions. This mechanism
+does not replace the upgrading of distribution networks, but
+supplements it temporarily. In late November 2023 the Federal
+Network Agency (German abbreviation: BNetzA) adopted a
+corresponding regulation.
+In June 2023 the German federal government also initiated the
+amendment of the Climate Protection Act. Originally, the Climate
+Protection Act provided for annual emissions reduction targets for
+the energy, industry, transport, buildings, agriculture, and waste-
+management sectors. The current amendment stipulates, among
+other things, that climate targets are to be met on a forward-
+looking, multiyear, and cross-sector basis rather than retroactively
+by sector. Emissions reduction targets for individual sectors are
+therefore to be eliminated.
+The need to completely convert the power sector to renewables in
+a short space of time and to make this conversion efficient, secure,
+and fast requires the modification of Germany's power market
+design. For this reason, in 2023 the Federal Ministry for Economic
+Affairs and Climate Protection launched the Platform for a
+Climate-Neutral Power System to serve as a discussion forum on
+the future design of the power market. Stakeholders from
+parliament, the European Commission, science, business, and civil
+society are involved.
+In order to achieve the goal of fully decarbonizing the heat supply
+by 2045, the Building Energy Act, which aims to convert heating
+96
+E.ON Integrated Annual Report 2023
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+To achieve policymakers' expansion targets, the mechanisms for
+accelerating planning and approval procedures in particular must
+also have an impact, and the additional measures from the Pact for
+Accelerating Planning, Approval, and Implementation between the
+federal and state governments from early November 2023 must
+be implemented promptly.
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+= Contents Q Search ← Back
+technologies, and the Heat Planning Act, which addresses heating
+networks and forms the basis for municipal heat planning, were
+passed in 2023. The Building Energy Act stipulates that, in the
+future, new heating systems may only be installed if at least 65
+percent of the heat they generate comes from renewable sources.
+This applies to new buildings from January 2024 onward, with
+transitional periods through 2028 for existing buildings. The
+regulations are accompanied by, among other things, income-
+dependent subsidies. The Heating Planning Act initially foresees
+that 30 percent of the heat in existing heating networks is to be
+renewable. At the same time, the federal states are obliged to
+work toward ensuring that local authorities draw up heating plans
+by 2028 at the latest. The plans specify which areas are to be
+supplied with distributed or district heating and how renewable
+energy and waste heat can be used. How the methane emissions
+regulation adopted by the EU will affect gas networks cannot yet
+be fully assessed, because the specific requirements for gas
+network operators have not yet been conclusively defined.
+The Energy Industry Act (German abbreviation: EnWG) was
+amended several times in 2023. Various topics were addressed, in
+particular the implementation of the ECJ's ruling on the
+independence of the Federal Network Agency (German
+abbreviation: BNetzA) and the development of a hydrogen core
+grid, including its financing. Central to the implementation of the
+ECJ ruling is the formal upgrading of the BNetzA, which is now
+solely responsible for setting the conditions for network access
+and network fees (power, gas, hydrogen). In a motion for a
+resolution passed parallel to the main EnWG amendment, it was
+announced that additional regulations for networks connection are
+anticipated.
+Following the latest cost review, the BNetzA confirmed the cost
+basis of E.ON's distribution network operating companies for the
+fourth regulatory period for power, although the final
+determinations are still pending and are expected in the first
+quarter of 2024. In 2023 the BNetzA also set some of the
+important regulatory parameters for the fourth regulatory period
+(2023 to 2027 for gas, 2024 to 2028 for power). During the year
+the BNetzA, among other things, announced an increase in the
+interest rates for the cost of debt and cost of equity component of
+the capital cost surcharge for new investments in power and gas
+networks from 2024 onward. This is intended to take account of
+current interest-rate developments and also to provide incentives
+for new investments in network expansion to propel the energy
+transition. However, these determinations only represent
+temporary regulations that are limited to the duration of the fourth
+regulatory period. E.ON's distribution network operating
+companies filed an appeal to the capital cost of debt part within
+the capital cost surcharge for new investments in power and gas
+networks from 2024 onward with the aim of extending the
+regulation to 2023, in particular in order to take sufficient account
+of the development of interest rates for cost of debt in 2023. In
+addition, E.ON's network operators are considering whether to file
+a similar objection to the equity portion.
+However, some important regulatory parameters for the fourth
+regulatory period-for example, the general and individual
+productivity factors for gas and power-have not yet been finalized
+or are still under discussion or consultation with the BNetzA. The
+determination of the regulatory return on equity (known as the
+cost of equity I interest rate) for the fourth regulatory period is also
+not yet legally binding, because the BNetzA has filed an appeal
+with the Federal Court of Justice (German abbreviation: BGH)
+against a ruling issued in August 2023 by the Düsseldorf Higher
+Regional Court, which had ruled in favor of network operators in
+their first appeal in their original lawsuit. A ruling by the BGH is
+expected some time in 2024.
+measures.
+As announced, the BNetzA is planning a review of the current
+regulatory framework with regard to the rapidly increasing
+demands placed on network operators by the energy and climate
+transition. In early 2024 the BNetzA published a white paper
+containing initial proposals and presented it to energy-industry
+representatives and other stakeholders. The white paper focuses
+on refinements to the regulatory framework for the fifth
+regulatory period (for gas from 2028 onward, for power from
+2029 onward) for DSOs and gas TSOs, as well as the need for
+short-term adjustments to gas networks' useful operating
+lifetimes. The BNetzA has planned a discussion process that will
+last until the end of 2025. Existing laws will continue to apply until
+further notice. Actual changes for network operators will only arise
+when the results are codified into a formally binding legal
+framework. With regard to the white paper for the fifth regulatory
+period, this is expected to take place in 2026.
+→Risks and Chances Report
+In line with its corporate strategy, E.ON endorses the German
+federal government's initiatives to accelerate renewables
+expansion. We also support accelerated renewables growth by the
+necessary expansion of our smart distribution networks. The
+significant increase in momentum and the resulting need for
+additional investments reinforce E.ON's growth strategy. The
+Forecast Report describes our investment plans in particular for
+2024.
+Combined Group Management Report
+photovoltaic capacity is to be more than doubled to over 215 GW,
+and onshore wind capacity is to be increased from 71 GW to 115
+GW. In 2023 the annual target of 9 GW net additions to
+photovoltaic capacity was already met in September. At the end of
+the third quarter of 2023, additions to onshore wind capacity
+amounted to around 50 percent of the annual target of 3.9 GW.
+The European Commission published a proposal on March 16,
+2023, to amend the directive and regulation on the European
+internal power market. The changes to the power market design
+aim to (i) introduce long-term stimulus for new investments (such
+as through bilateral agreements for differences and power price
+agreements), (ii) protect consumers (such as by means of certain
+price regulation requirements in times of crisis), and (iii) introduce
+new regulatory requirements to further promote flexibility. The
+European Council and the European Parliament adopted their
+respective negotiating positions during the year and reached an
+agreement on December 14. The new power market design is
+supposed to take effect and be further implemented in 2024.
+The European Commission also proposed to extend two other
+emergency regulations. The first concerns Regulation (EU)
+2022/2578 on the market-correction mechanism for gas. The
+regulation introduces a sort of pressure relief valve to protect the
+economy from excessively high prices. The second concerns the
+emergency regulation on permit-granting procedures (EU)
+2022/2577, which introduces simplified rules for the granting of
+permits in order to accelerate the expansion of renewables and
+associated network infrastructure. The measures it contains are
+also contained in the amended Renewable Energy Directive
+("RED") and, after the emergency regulation's expiration, will
+therefore become permanent. The European Council approved the
+European Commission's proposals on extending the emergency
+regulations.
+In addition, numerous measures to accelerate renewables
+expansion and the decarbonization of industry in the EU were
+initiated or continued.
+The number of requests for new network connections for feed-in
+systems has increased considerably in recent years. In view of the
+above-described accelerated implementation of climate-protection
+efforts, this figure is likely to continue to rise sharply. For example,
+the number of PV requests received by E.ON power distribution
+system operators doubled from around 120,000 in 2021 to about
+240,000 in 2022. Requests increased a further 70 percent to
+about 400,000 in 2023. Additional measures for standardization,
+digitalization, and automation of network connection processes are
+necessary to enable network connection requests to be processed
+in a timely manner.
+The Net Zero Industry Act ("NZIA") aims, for example, to support
+the production of technologies that are decisive for the
+achievement of climate neutrality. The NZIA is intended to simplify
+the legal framework for the manufacture of these technologies
+and thus to enhance the competitiveness of Europe's net-zero
+technology industry.
+In addition, the delegated regulations on green hydrogen-(EU)
+2023/1184 and (EU) 2023/1185-were published in the Official
+Journal of the European Union on June 20, 2023. The first
+regulation establishes three conditions (additionality, temporal
+correlation, and geographical correlation between an electrolyser
+and the installation generating renewable energy for it) and
+exceptions, under which hydrogen-based fuels can be classified as
+renewable fuels of nonbiological origin ("RFNBO"). The second
+regulation contains a method for calculating RFNBO's life cycle
+greenhouse gas emissions.
+Directive (EU) 2023/2413 on support for energy from renewable
+sources was published on October 18, 2023. It introduces a new
+minimum of 42.5 percent for energy renewables' share of the EU's
+gross energy consumption as well as sector targets. Furthermore,
+member states must establish requirements for accelerating
+approvals processes for renewables facilities and for network
+expansion.
+95
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+In addition, the European Council and the European Parliament
+agreed on a gas package. In particular, the new EU gas directive
+updates consumer-protection mechanisms for gas customers and
+adjusts the modalities of network access and network planning to
+reflect the current context, which is characterized by increased use
+of low-carbon gases. In the future, a distinction is to be made
+between, and different rules established for, hydrogen distribution
+system operators ("DSOS") and hydrogen transmission system
+operators ("TSOs"). The (vertical) unbundling rules require
+infrastructure to be separated from competitive activities in a way
+that is similar to existing unbundling rules for gas. Consequently,
+less strict rules will apply to DSOs for hydrogen as well. In
+addition, only gas and hydrogen TSOs will have to operate as
+legally separate network companies. Exceptions are possible at the
+national level, however, for TSOs that submit a cost-benefit
+analysis that is confirmed by their national regulatory agency.
+DSOs will be exempted from horizontal unbundling.
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+→Risks and Chances Report
+= Contents Q Search ← Back
+On November 14, 2023, the European Council and the European
+Parliament reached an agreement on a methane emissions
+regulation. In particular, the regulation introduces new obligations
+for gas infrastructure operators to conduct periodic checks to
+detect and eliminate leaks, to identify the sources of methane
+emissions, and to repair or replace the components in question.
+The Commission must, within 12 months, issue an implementing
+act that specifies minimum detection limits.
+In addition, the new EU Directive 2023/1791 on energy efficiency
+was published on September 13, 2023. It contains ambitious
+targets for reducing the EU's energy consumption by at least 11.7
+percent by 2030 relative to the EU reference scenario. Member
+states must stipulate their respective contribution and achieve
+new annual energy savings that gradually increase to 1.9 percent
+by 2030. On December 7, 2023, the European Council and
+European Parliament reached an agreement on revising the energy
+performance of buildings directive, which introduces new
+requirements for decarbonizing buildings, including ambitious
+targets for the availability of charging infrastructure for electric
+vehicles and for readiness for zero-emissions buildings.
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+The European Commission published an EU Grid Action Plan on
+November 29, 2023. The plan is a non-legislative announcement
+that outlines additional strategic initiatives to foster the
+modernization of power networks and thus to support Europe's
+climate-protection and renewables targets. The initiative's
+principle aim is to simplify the funding and approval of network
+modernization.
+Germany
+In mid-2022 the Bundestag passed the Easter package to
+accelerate renewables expansion. It amended a variety of
+legislation, such as the Renewable Energy Sources Act (German
+abbreviation: EEG), to increase the target for the proportion of
+renewable energy in gross power consumption from 50 percent to
+80 percent by 2030. The focus is on expanding solar energy.
+Compared with the previous target of 100 GW for 2030, installed
+Other
+I&C
+Total
+Sales partners
+= Contents Q Search ← Back
+Germany
+2022
+United Kingdom
+The Netherlands
+Residential and SME
+2023
+Full year
+Billion kWh
+Wholesale market
+Customer groups
+Sales partners
+I&C
+Residential and SME
+Fourth quarter
+Gas Sales
+→Risks and Chances Report
+→ Disclosures Regarding Takeovers
+2023
+→ Forecast Report
+Total
+2022
+2.4
+2022
+12.1
+→Internal Control System
+3.1
+1.6
+3.6
+3.4
+1.8
+8.8
+5.3
+41.5
+40.5
+10.6
+9.5
+6.3
+5.9
+11.1
+12.0
+13.5
+13.1
+2022
+2023
+2022
+20231
+2023
+→ Governance
+2.9
+��� About this Report
+45.3
+32.8
+7.9
+6.0
+48.4
+42.2
+79.6
+61.2
+Customer groups
+26.7
+16.4
+5.5
+2.7
+2.4
+18.8
+10.8
+72.6
+51.8
+16.2
+9.9
+82.0
+74.0
+17.9
+142.2
+181.3
+Wholesale market
+33.7
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+103
+1VSEH of Slovakia is only included until its transfer to ZSE (end of November).
+261.7
+203.7
+55.1
+39.8
+19.1
+19.3
+54.4
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+49.7
+94.9
+Total
+80.4
+61.5
+9.8
+7.0
+11.2
+13.3
+6.0
+7.5
+53.5
+133.1
+3.7
+152.9
+2.9
+95.9
+14.5
+92.8
+119.3
+Wholesale market
+222.4
+184.4
+44.7
+35.1
+34.3
+29.2
+57.0
+51.9
+86.4
+68.2
+Customer groups
+27.8
+20.6
+0.7
+0.3
+7.2
+8.3
+19.9
+56.0
+41.1
+6.4
+10.7
+→Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+104
+¹VSEH of Slovakia is only included until its transfer to ZSE (end of November).
+12.0
+462.9
+55.4
+41.5
+75.4
+85.2
+23.6
+66.4
+179.2
+187.5
+Total
+240.5
+196.2
+380.6
+6.5
+60.2
+11.0
+78.1
+3.9
+1.0
+13.1
+13.1
+10.2
+1.8
+30.9
+62.2
+68.7
+59.2
+13.8
+11.1
+9.9
+9.3
+16.1
+16.7
+28.8
+22.1
+9.3
+6.6
+0.1
+2.6
+58.1
+84.3
+59.7
+18.5
+6.3
+14.4
+12.2
+9.9
+7.6
+24.9
+19.4
+134.4
+118.3
+33.0
+28.5
+45.5
+19.9
+39.9
+36.0
+41.6
+36.8
+126.8
+137.3
+17.7
+12.1
+23.0
+22.4
+26.3
+17.0
+20.2
+Total
+2.6
+220.5
+Full year
+Power
+56.6
+57.2
+12.8
+13.1
+0.0
+0.0
+43.8
+44.1
+Gas
+3.0
+3.0
+0.8
+0.7
+0.2
+0.3
+2.0
+2.0
+etc.
+Network loss, station use,
+81.6
+85.0
+229.6
+33.3
+33.7
+53.9
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+102
+1VSEH of Slovakia is only included until its transfer to ZSE (end of November).
+11.2
+202.8
+10.7
+189.8
+43.0
+40.0
+0.0
+14.4
+0.0
+3.2
+2.8
+1.0
+1.0
+7.0
+6.9
+149.8
+etc.
+Gas
+Network loss, station use,
+320.3
+307.7
+57.0
+159.8
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+14.0
+9.9
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+101
+= Contents Q Search ← Back
+Cash-effective investments of €6.4 billion were significantly above
+the prior-year figure of €4.8 billion and also above the target figure
+of roughly €6.1 billion, which had been adjusted in November
+(previously: roughly €5.9 billion). Energy Networks' investments of
+€5.2 billion surpassed the forecast figure of €4.6 billion. They were
+accelerated in particular in the fourth quarter owing to capacity
+increases and went mainly toward network infrastructure projects.
+Customer Solutions' investments of €1.1 billion were as forecast.
+Corporate Functions/Other's investments were in line with the
+forecast figure of €0.1 billion.
+Further growth in the regulated asset base due to additional
+investments was Energy Networks' main contribution to this
+positive earnings performance. In addition, the recovery of the
+energy market environment in 2023 led to significant reductions in
+redispatch expenditures in Germany. The calming of the market
+environment and the stabilization of price levels on procurement
+markets in nearly all E.ON regions contributed to a relative
+earnings improvement at Customer Solutions. The adjustment of
+energy procurement to current market conditions in the United
+Kingdom, Germany, and the Netherlands was another positive
+earnings factor. Higher risk provisions for bad debt losses was a
+countervailing factor.
+(prior year: €1.05) and thus surpassed the forecast range of €1.03
+to €1.11 (previously: €0.88 to €0.96).
+Adjusted net income of €3.1 billion was likewise above the prior-
+year figure of €2.7 billion and the forecast range of €2.7 billion to
+€2.9 billion, which had been adjusted in August 2023 (previously:
+€2.3 to €2.5 billion). Earnings per share, which are based on
+adjusted net income, amounted to €1.18 in the year under review
+The E.ON Group's adjusted EBITDA of €9.4 billion was €1.3 billion
+above the prior-year figure of €8.1 billion and above the forecast
+range of €8.6 to €8.8 billion, which had been adjusted in August
+2023 (previously: €7.8 to €8 billion). Energy Networks recorded
+adjusted EBITDA of €6.6 billion, which was likewise above the
+adjusted forecast range of €6.3 to €6.5 billion (previously: €6 to
+€6.2 billion). Customer Solutions' adjusted EBITDA of €2.8 billion
+was also above the adjusted forecast range of €2.3 to €2.5 billion
+(previously: €1.8 to €2 billion). Adjusted EBITDA at Corporate
+Functions/Other of -€0.1 billion was in line with expectations.
+External sales in the 2023 financial year decreased by 19 percent
+to €93.7 billion. This performance is mainly attributable to lower
+sales volume due to customers' energy conservation and portfolio
+streamlining. Lower price levels on wholesale markets also had an
+adverse impact on sales.
+E.ON's operating business delivered a positive performance in the
+2023 financial year, and E.ON surpassed its forecast for key
+performance indicators.
+Business Performance
+results in a six-month period from the date of receipt of the
+cancellation letter dated February 2, 2024, in which the city either
+acquires the individual assets from Zagrebacke otpadne vode d.o.o
+or the stake held by E.ON in this company. The manner in which
+the sale will take place had yet to be determined by the City of
+Zagreb at the time of the Consolidated Financial Statements'
+preparation. The transactions' financial effects cannot yet be
+reliably estimated at the time of preparation either.
+→Risks and Chances Report
+→ Forecast Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→Risks and Chances Report
+= Contents Q Search ← Back
+Energy Networks
+Power and Gas Wheeling Volume
+58.3
+61.1
+Power
+Fourth quarter
+Billion kWh
+2022
+2023
+2022
+20231
+2022
+2023
+8.9
+2022
+Total
+East-Central Europe/Turkey
+Sweden
+Germany
+Wheeling Volume
+E.ON operates electricity networks in East-Central Europe/Turkey
+with a total system length of roughly 274,000 kilometers (prior
+year: about 275,000 kilometers) and supplies, as in the prior year,
+about 8.4 million network customers. Gas networks operated by
+E.ON were roughly 50,000 kilometers long (prior year: 49,000
+kilometers). The number of gas network customers is about 2.8
+million (prior year: about 2.7 million).
+The length of E.ON's power system in Sweden was 142,000
+kilometers (prior year: about 141,000 kilometers). The number of
+customers in the power distribution system was about 1.1 million,
+unchanged from the prior year.
+E.ON's power system in Germany was about 694,000 kilometers
+long, slightly above the prior-year figure (about 691,000
+kilometers). At year-end it had about 14.9 million network
+customers for power in its service territory (prior year: 14.8
+million). E.ON's gas system was almost unchanged at about
+99,000 kilometers (prior year: about 98,000 kilometers), as was
+the number of network customers, 1.9 million.
+System Length and Network Customers
+By contrast, fourth-quarter wheeling volume was slightly above
+that of the prior-year quarter. This is attributable to lower price
+levels on commodity markets.
+Overall, power and gas wheeling volume in the year under review
+fell relative to the prior year. The main reason for the declining
+energy wheeling volume was the war in Ukraine and associated
+energy-conservation measures.
+2023
+→ Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+1.7
+19.0
+7.6
+46.7
+37.6
+11.9
+9.0
+2.3
+2.1
+11.1
+11.0
+21.1
+15.5
+6.9
+4.7
+1.2
+0.7
+0.8
+0.9
+4.9
+3.1
+18.4
+12.1
+1.2
+3.7
+3.2
+1.6
+1.6
+26.1
+21.0
+27.6
+19.3
+5.3
+4.4
+19.9
+18.3
+33.2
+31.1
+4.7
+72.3
+14.2
+10.6
+5.5
+5.8
+12.3
+12.7
+40.1
+23.1
+25.6
+14.6
+2.3
+52.2
+2.5
+0.6
+0.5
+Germany
+Sales partners
+I&C
+Residential and SME
+Full year
+= Contents Q Search Back
+Wholesale market
+Customer groups
+Sales partners
+I&C
+Residential and SME
+United Kingdom
+Fourth quarter
+7.8 million, in part because of return to more competition in the
+wake of the energy crisis. Customer losses relate to both power
+and gas customers.
+Customer Solutions' fully consolidated companies had a total of
+about 34.7 million customers at year-end 2023, less than the
+prior-year figure of 35.9 million. The number of customers in
+Germany declined slightly to 14.2 million (prior year: 14.4 million)
+because competition became keen again. In the United Kingdom
+the number of customers declined slightly to 8.9 million owing to
+our strategic focus on customers that deliver strong sales and
+portfolio streamlining as part of our B2B strategy (prior year: 9.1
+million). At 3.9 million, the number of customers in the
+Netherlands was almost at the prior-year level (4 million). The
+total number of customers in the other regions declined from 8.4
+million to
+Customer Numbers
+Power Sales
+Power and gas sales to the customer groups decreased. The
+primary reasons for the decline in power and gas sales in almost all
+of E.ON's regional markets were portfolio streamlining in line with
+our B2B strategy, mild weather, as well as crisis-related energy
+conservation and the associated decline in consumption.
+Power sales in the 2023 financial year declined by 58 billion kWh
+to 203.7 billion, gas sales as well by 82.3 billion kWh to 380.6
+billion kWh.
+Power and Gas Sales Volume
+Customer Solutions
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+Billion kWh
+36
+The Netherlands
+Total
+5.7
+5.1
+7.2
+4.0
+21.4
+20.8
+6.0
+5.8
+1.7
+1.6
+4.6
+Other
+5.0
+8.4
+2022
+2023
+2022
+20231
+2022
+2023
+2022
+2023
+2022
+2023
+9.0
+Fourth quarter
+The Netherlands
+2023
+Restructuring expenses in the 2023 financial year were below
+those of the prior year and included, as in the prior year, primarily
+expenditures in conjunction with the restructuring of the sales
+business in the United Kingdom.
+Net book gains/losses were minor in 2023 and resulted mainly
+from the combination of VSEH and ZSE in Slovakia. Book gains in
+the prior year consist in particular of the partial disposal of
+Westconnect.
+In accordance with IFRS, earnings for 2023 also include earnings
+components that are not directly related to E.ON Group's ordinary
+business activities or that are non-recurring or rare in nature.
+These non-operating items are considered separately in internal
+management control. Adjusted EBITDA and adjusted net income
+reflect the E.ON Group's long-term profitability and, as metrics for
+internal management control, are adjusted to exclude non-
+operating items.
+Reconciliation to Adjusted Earnings Metrics
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+→ Internal Control System → Disclosures Regarding Takeovers
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+127
+-1,062
+-517
+2,728
+3,068
+602
+-912
+-153
+-235
+-890
+-1,082
+-1,325
+-232
+-120
+Effects in conjunction with derivative financial instruments
+changed by €1,110 million to -€4,233 million. The reason was
+that prices on commodity markets decreased almost continually
+during the year, which led to declining fair value measurements on
+forward procurement contracts.
+Non-operating expense/income mainly consists of earnings effects
+of -€229 million (prior year: €286 million) at shareholdings in
+Turkey accounted for using the equity method in conjunction with
+the application of IAS 29 and a significantly lower valuation effect
+of-€130 million (prior year: €410 million). PreussenElektra's
+earnings, which are disclosed as non-operating income effective
+2023, had a countervailing effect (€289 million).
+Non-Operating Adjustments
+€ in millions
+-219
+-112
+-3,123
+-4,233
+-100
+-4,394
+-31
+13
+Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction
+Other non-operating earnings
+-1,587
+-88
+-22
+-3
+-176
+4
+5
+807
+12
+2022
+2023
+2022
+2023
+Full year
+Fourth quarter
+Effects from derivative financial instruments
+Net book gains (+)/losses (-)
+Restructuring expenses
+748
+-217
+-243
+6,387
+→Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+107
+Merchant activities are all those that cannot be subsumed under
+either of the other two categories.
+E.ON's regulated business consists, among other things, of
+operations in which revenues are largely set by law and based on
+costs. The earnings on these revenues are therefore extremely
+stable and predictable. E.ON's quasi-regulated and long-term
+contracted business consists of operations in which earnings have
+a high degree of predictability because key determinants (price
+and/or volume) are largely set for the medium to long term.
+Examples include the operation of industrial customer solutions
+with long-term supply agreements and the operation of heating
+networks.
+E.ON generates a large portion of its adjusted EBITDA in very
+stable businesses. Regulated, quasi-regulated, and long-term
+contracted businesses accounted for the overwhelming proportion
+of E.ON's adjusted EBITDA in 2023.
+Adjusted EBITDA recorded at Corporate Functions/Other declined
+by about €1,000 million to -€79 million (prior year: €918 million),
+mainly because of the absence of earnings streams from
+PreussenElektra, due to the cessation of operations and the
+dismantling of all power stations. PreussenElektra's earnings are
+recorded under non-operating expense/income effective the
+beginning of 2023.
+regions. In addition, effects from mild weather in the Netherlands
+were less pronounced than in the prior year. The in some cases
+tense situation in Romania in 2022 in the Other unit eased as a
+result of improvements in the regulatory scheme. In addition,
+wider margins and effects from portfolio management led to
+earnings increases in the Other unit's other markets. Adjusted
+EBITDA at Energy Infrastructure Solutions' ("EIS") business of
+providing on-site energy solutions was below the prior year due to
+adverse currency-translation effects and the non-recurrence of
+positive one-off effects.
+¹Prior-year figures were adjusted owing to the transfer of Non-Core Business.
+E.ON Group
+Consolidation
+Corporate Functions/Other¹
+Other
+The Netherlands
+16
+8,059
+= Contents Q Search ← Back
+Adjusted Net Income
+Adjusted net income increased from €2,728 million to €3,068
+million. The improvement is attributable to our good operating
+performance in the year under review. Based on E.ON stock
+outstanding, adjusted earnings per share ("EPS") amounted to
+€1.18 (prior year: €1.05).
+Operating depreciation charges rose relative to the prior year, from
+€2,862 million to €2,983 million. This is mainly attributable to an
+increase in depreciation charges on property, plant, and equipment
+resulting from additional investments in the network business.
+Countervailing effects mainly involved intangible assets due to the
+absence of depreciation charges on residual power output rights.
+1,163
+725
+-2,983
+-786
+-856
+9,370
+1,949
+1,581
+2022
+1111
+1.-4. Quartal
+8,059
+-2,862
+5,197
+2023
+4. Quartal
+2023
+108
+Non-controlling interests' share of operating earnings rose
+significantly-from €517 million to €912 million-mainly because
+of higher operating earnings at companies at the network business
+in Germany with a significant proportion of non-controlling
+interests. This development resulted from a larger regulated asset
+base compared with the prior year and the recording of a price-
+driven increase in network fees.
+The tax rate on operating earnings of continuing operations was
+25 percent, as in the prior year. The tax expense on operating
+earnings rose from €1,062 million to €1,325 million owing to the
+increase in pretax earnings.
+Operating earnings attributable to non-controlling interests
+Adjusted net income
+Operating interest earnings
+Taxes on operating earnings
+Operating depreciation
+Adjusted EBIT
+€ in millions
+Adjusted EBITDA
+Adjusted Net Income
+Economic net interest rose from €890 million to €1,082 million,
+primarily because of the accretion of provisions due to the increase
+in interest-rate levels at the end of 2022. In addition, the higher
+interest expense on newly issued bonds due to higher interest
+rates exceeded the positive effects of bond repayments.
+2022
+9,370
+-237
+Non-operating adjustments of EBITDA
+2023
+Non-controlling interests' share of operating earnings rose from
+€517 million to €912 million mainly because of higher operating
+earnings at companies at the network business in Germany with a
+significant proportion of non-controlling interests. This
+development resulted from a larger regulated asset base
+compared with the prior year and the recording of a price-driven
+increase in network fees.
+Income/loss from discontinued operations, net
+Net income
+Income from continuing operations
+Operating earnings attributable to non-controlling interests
+Non-operating adjustments of net income
+Adjusted net income
+€ in millions
+Reconciliation of Adjusted Net Income
+Besides the above-described non-operating earnings items in the
+reconciliation to adjusted EBITDA, the reconciliation to adjusted
+net income includes the following items:
+The non-operating tax result is primarily influenced by the fair
+value measurement of commodity derivatives in various countries
+with different tax rates and by reversals of deferred taxes due to
+the improved earnings situation in Germany and the United
+Kingdom and taxes for previous years mainly from changes in tax
+provisions.
+The decline in non-operating interest expense/income resulted
+from the altered direction of interest-rate movements. An increase
+in interest rates in the prior year led to income from accruals on
+non-current provisions for asset-retirement obligations, provisions
+for recultivation and remediation obligations, and other non-
+current provisions. In the interim interest rates declined relative to
+prior-year balance-sheet date. By contrast, E.ON recorded positive
+valuation effect on securities recognized at fair value. The positive
+effect of €187 million (prior year: €204 million) from the
+difference between the nominal interest rate and the effective
+interest rate of former innogy bonds adjusted due to the purchase-
+price allocation is still recorded under non-operating interest
+expense/income.
+Along with the depreciation charges in connection with the innogy
+purchase-price allocation, which are disclosed separately, E.ON
+recorded impairment charges mainly on specific assets at
+Customer Solutions and on the IFRS book value of VSEH in
+Slovakia at Energy Networks.
+= Contents Q Search ← Back
+→ Forecast Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→Risks and Chances Report
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+109
+1,070
+1,195
+Fourth quarter
+2022
+602
+2023
+3,068
+Income/loss from continuing operations before interest results and income taxes
+E.ON Integrated Annual Report 2023
+110
+Group net income and corresponding earnings per share amounted
+to €760 million and €0.20, respectively, in the 2023 financial year.
+The decline is mainly attributable to interest-rate developments
+and price developments on commodity markets. Prior-year net
+income and earnings per share were €2,242 million and €0.70,
+respectively.
+Income from discontinued operations resulted from a transaction
+already completed in 2005. In accordance with the purchase
+agreement, a one-time purchase-price adjustment was made after
+an audit of the divested company was completed in the first
+quarter of 2023, and the contractual clause now took effect.
+2,242
+760
+61
+517
+-1,003
+2,242
+699
+912
+-3,281
+-2,855
+2,728
+-609
+-2,040
+-609
+-2,795
+-971
+153
+235
+127
+!!!!
+2022
+Full year
+-2,040
+-961
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+-3,588
+-2,795
+-971
+1,306
+1,922
+738
+1,539
+1,817
+-12
+484
+-514
+-86
+-156
+-64
+-112
+-504
+-448
+-115
+-107
+Depreciation of hidden reserves (-) and liabilities (+) from the innogy transaction
+-3,536
+-4,587
+-3,838
+-1,777
+-3,281
+-1,003
+Other non-operating impairments/reversals
+Non-operating interest expense (-)/income (+)
+Non-operating taxes
+Non-operating adjustments of net income/loss
+-966
+-1,076
+4,523
+4,783
+-1,889
+-196
+Income/loss from continuing operations before depreciation, interest result and income taxes
+Scheduled depreciation/impairments and amortization/reversals
+-3,536
+-4,587
+-3,838
+-1,777
+-3,453
+Non-operating adjustments of EBITDA
+9,370
+1,949
+1,581
+2022
+2023
+2022
+2023
+€ in millions
+Adjusted EBITDA
+Full year
+Fourth quarter
+Reconciliation to Adjusted EBITDA
+8,059
+-19
+1,949
+1,581
+Earnings Situation
+¹Prior-year figures were adjusted owing to the transfer of Non-Core Business.
+0
+-19
+115,660
+93,686
+-28
+34,067
+24,443
+0
+1
+0
+0
+2
+-57
+26,760
+11,445
+-66
+8,570
+2,895
+-24
+14,705
+11,140
+-34
+External Sales
+Effective as of the Interim Report for the first half of 2023, we
+changed our presentation of sales. For the sake of clarity and in
+order to provide more useful commentary, the Combined Group
+Management Report only discloses external sales and only
+comments on the change in external sales with regard to the
+segments' performance.
+The E.ON Group's external sales in 2023 declined by €22 billion to
+€93.7 billion (prior year: €115.7 billion).
+Energy Networks' sales of €17.6 billion were €3.6 billion above
+the prior-year figure. This development is attributable in particular
+to the significant increase in power price levels in 2022. The
+growth in the regulated asset base continued to have a positive
+impact on sales. The increase also resulted from higher tariffs
+charged by transmission system operators.
+Own work capitalized of €1,334 million was 34 percent above the
+prior-year level (€997 million). It consisted predominantly of
+network investments as well as ongoing and completed IT
+projects.
+The Consolidated Statement of Income can be found in the
+Consolidated Financial Statements.
+Other Line Items from the Consolidated Statement of
+Income
+→Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→ Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+4,462
+E.ON Integrated Annual Report 2023
+E.ON Group
+Consolidation
+Corporate Functions/Other¹
+Other
+United Kingdom
+Customer Solutions
+Germany
+Germany
+Sweden
+ECE/Turkey
+€ in millions
+Energy Networks
+External Sales
+Sales recorded at Corporate Functions/Other of €11.4 billion were
+about €15 billion under the prior-year figure. The decrease is
+mainly attributable to lower price levels compared with the prior
+year on commodity transactions conducted by E.ON Energy
+Markets, our central commodity procurement unit.
+Customer Solutions' sales declined by €10.3 billion to €64.6
+billion. The decrease is mainly attributable to a decline in sales
+volume in nearly all E.ON regions due to customers' energy
+conservation as well as portfolio streamlining. The successive
+passthrough to end-customers of crisis-driven high procurement
+costs had a countervailing effect. It had the largest impact in
+Germany and the Czech Republic. The settlement of derivatives
+also adversely affected sales owing to sharply lower commodity
+prices relative to the prior year.
+105
+Other operating income totaled €38,888 million in 2023 (prior
+year: €73,193 million). Income from derivative financial
+instruments alone declined by €32,961 million year on year to
+€37,273 million, principally because of the development of prices
+on commodity markets during the course of the year. Income from
+currency-translation effects (€578 million) was €275 million
+below the prior-year figure (€853 million). Corresponding amounts
+resulting from currency-translation effects and derivative financial
+instruments are recorded under other operating expenses. Income
+from the sale of equity interests and securities totaled €151
+million (prior year: €999 million). The prior-year figure mainly
+consists of an €810 million book gain on the partial disposal of
+Westconnect GmbH.
+2,952
+5,227
+-2
+1,002
+986
+-8
+264
+242
+22
+11,185
+13,609
+25
+3,123
+3,908
+26
+14,028
+17,616
+25
+3,995
+4,989
++/-%
+2022
+2023
++/-%
+2022
+839
+608
+38
+3,021
+4,201
+-45
+1,890
+1,036
+-6
+25,422
+23,969
+-17
+6,770
+5,601
+-14
+-20
+29,518
+-17
+8,380
+6,968
+-14
+74,872
+64,624
+-23
+21,502
+16,557
+64
+1,841
+25,314
+Costs of materials of €64,228 million were significantly below the
+prior-year level (€108,627 million). The sharp decline mainly
+reflects price developments on commodity markets. As part of our
+long-term procurement strategy, the rise in energy prices in the
+first half of the prior year continued, now with a time delay, to lead
+to higher contractually agreed-on procurement costs, whereas
+price levels in 2023 largely moved lower. A countervailing effect
+resulted from the fact that forward procurement contacts, which
+under IFRS are accounted for as derivative financial instruments,
+are, at the time of settlement, adjusted to the market price at the
+time of delivery, which has a corresponding impact on costs of
+materials. Effects from the marking to market of commodity
+derivatives are recorded under other operating income. In addition,
+costs of materials include a change in provisions for pending
+transactions. These provisions are mainly recorded for contracted
+sales transactions that are not subject to IFRS 9 (failed own-use)
+transactions that are commercially part of a portfolio that is
+partially offset by procurement transactions that are accounted for
+as derivative financial instruments.
+Personnel costs of €6,010 million were €573 million above the
+prior-year figure (€5,437 million). The change is mainly
+attributable to an increase in the number of employees and to pay
+increases under collective-bargaining agreements. This was
+partially offset by lower expenditures for pensions.
+-302
+-161
+United Kingdom
+31
+760
+993
+-124
+285
+-67
+Germany
+-8
+568
+525
+-28
+203
+146
+Thereof: Energy Infrastructure Solutions ("EIS")
+66
+1,686
+2,807
+-168
+269
+-182
+47
+810
+208
+289
+150
+-4
+2
+600
+-1
+5
+-109
+918
+-79
+-109
+291
+Customer Solutions
+-26
+394
+777
+-46
+171
+92
+-30
+324
+227
+-140
+115
+-46
+97
+21
+854
+1,030
+Full year
+Fourth quarter
+Germany
+Sweden
+€ in millions
+Energy Networks
+Adjusted EBITDA
+Adjusted EBITDA at Customer Solutions rose by €1,121 million to
+€2,807 million (prior year: €1,686 million). The increasing
+stabilization of the energy-industry market environment, which
+had been under considerable strain in the prior year, was among
+the contributing factors and had a positive impact on earnings. The
+stabilization of price levels on procurement markets contributed to
+an earnings improvement relative to the prior year in nearly all
+E.ON markets. In addition, energy procurement in the United
+Kingdom, Germany, and the Netherlands was adjusted to current
+market conditions, and one-off effects from prior periods had a
+positive impact as well along with non-recurring regulation effects
+in the United Kingdom. A decline in sales volume and risk
+provisions for bad debts had a countervailing effect in nearly all
+Energy Networks' adjusted EBITDA increased by €1,181 million to
+€6,640 million (prior year: €5,459 million). In Germany higher
+investments were the driver of this positive performance. They led
+to a continued growth in the regulated asset base. In addition, the
+recovery of the market environment of the energy-industry
+contributed to a significant reduction in the costs for redispatch.
+These cost reductions are temporary in nature and, because of
+regulatory mechanisms, will be credited to network customers in
+subsequent years. Adjusted EBITDA in Sweden and at East-Central
+Europe/Turkey received additional support in all regions except
+Hungary from lower costs for network losses during 2023 as well
+as catch-up effects for only partly covered costs for network
+losses incurred in prior years. The weak Swedish krona and Turkish
+lira had an off-setting effect. Earnings were also adversely
+impacted by lower wheeling volume resulting from a reduction in
+energy consumption. Effects relating to fluctuations in wheeling
+volume are essentially temporary in nature and, in most countries,
+are recovered in subsequent years through regulatory
+mechanisms.
+The E.ON Group's adjusted EBITDA rose by €1,311 million in the
+2023 financial year to €9,370 million (prior year: €8,059 million).
+Adjusted EBITDA
+= Contents Q Search ← Back
+→Risks and Chances Report
+2023
+→ Forecast Report
+→Internal Control System
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+106
+= Contents Q Search ← Back
+Income from companies accounted for under the equity method of
+€478 million was significantly above the prior-year level (€279
+million). The increase resulted mainly from higher earnings from
+equity interests in Germany and Slovakia.
+Other operating expenses of €59,548 million were €12,188
+million below the prior-year figure (€71,736 million), in particular
+because expenditures relating to derivative financial instruments
+(including currency-translation changes) declined by €13,318
+million to €53,345 million. Expenditures relating to currency-
+translation effects increased by €194 million to €718 million.
+Depreciation charges increased from €3,378 million in the prior
+year to €3,514 million. This is principally attributable to higher
+depreciation charges on property, plant, and equipment due to
+additional investments in the network business. Countervailing
+effects mainly involved intangible assets due to the absence of
+depreciation charges on residual power output rights. In addition,
+there were higher impairment charges on property, plant, and
+equipment and intangible assets.
+→ Disclosures Regarding Takeovers
+Full year
+2022
+2023
+21
+257
+310
+ECE/Turkey
+27
+452
+576
+28
+92
+118
+21
++/-%
+4153
+30
+1041
+1,356
+22
+5,459
+6,640
+28
+1,390
+1,784
++/-%
+2022
+5,034
+Combined Group Management Report
+-1,272
+Funding Policy and Initiatives
+3,845
+5,156
+Energy Networks
+2022
+2023
+€ in millions
+Maturity Profile of Bonds Issued by E.ON SE
+45291
+Investments
+The E.ON Group's cash-effective investments of €6.4 billion in
+2023 were significantly above the prior-year figure of €4.8 billion.
+€6 billion (prior year: €4.6 billion) went toward property, plant, and
+equipment and intangible assets, whereas share investments
+totaled about €411 million (prior year: €177 million).
+Investments
+and E.ON International Finance B.V.
+F-1
+P-2
+Customer Solutions
+A-2
+Baa2
+BBB
+Fitch
+BBB+
+Stable
+Baa2
+Stable
+Stable
+BBB
+Moodys'
+S&P
+Short term
+Bonds
+Outlook
+Long term
+E.ON SE Ratings
+= Contents Q Search ← Back
+A-
+→Risks and Chances Report
+1,124
+At December 31, 2023
+E.ON Integrated Annual Report 2023
+113
+Cash provided by investing activities of continuing operations of
+-€5.6 billion was 2.4 billion below the prior-year figure of -€3.2
+billion. This includes cash-effective investments of €6.4 billion
+(prior year: €4.8 billion). The increase is primarily attributable to
+the planned increase in investments in property, plant, and
+equipment and intangible assets, particularly at the network
+business Germany. A reduction in cash inflow from disposals also
+affected cash provided by investment activities. There was no
+transaction in the 2023 financial year comparable to the sale of
+E.ON's 50 percent stake in Westconnect in the prior year.
+Cash provided by operating activities of continuing operations
+before interest and taxes of €7.2 billion was €4.3 billion below the
+prior-year figure (€11.5 billion). This resulted in part from a decline
+of €0.9 billion at Energy Networks, which is mainly attributable to
+adverse changes in working capital at the network business in
+Germany. In particular, back payments to energy feed-in
+customers who had received insufficient installment payments in
+the previous year had a negative impact on operating cash flow in
+the
+year under review. The remaining decline (a total of -€3.4
+billion) came from Customer Solutions and Corporate
+Functions/Other and was likewise mainly due to negative changes
+in working capital in the 2023 financial year that more than offset
+the increase in cash-effective earnings. These negative changes in
+working capital are mainly attributable to the timing difference
+between customer installment payments already received in 2022
+and payments from government support measures and the related
+cash outflows from commodity procurement in the year under
+review. In addition, the closure of E.ON's last nuclear power plant
+in the 2023 financial year led to a further deterioration of cash
+provided by operating activities relative to the prior year.
+Cash Flow
+Investments at Corporate Functions/Other of €141 million (prior
+year: €76 million) went especially toward intangible assets and
+other shareholdings.
+Customer Solutions' investments increased by 35 percent to €1.1
+billion (prior year: €0.8 billion). Fully €0.7 billion (prior year: €0.5
+billion) of total investments went toward Energy Infrastructure
+Solutions ("EIS") across all regions. This increase is attributable in
+particular to higher investments in the smart energy meter
+business in the United Kingdom and the acquisition of Equans
+Energy Solutions ("EES"). EES offers aquifer thermal energy
+storage ("ATES") in the Netherlands and focuses on low-carbon
+heat and cooling solutions for existing residential and business
+buildings. In addition, investments to decarbonize the heat and
+power generation of municipalities and industrial customers in
+Germany were increased.
+transition.
+The strategic focus of our investment activity is Energy Networks.
+This segment's investments rose by 34 percent to €5.2 billion
+(prior year: €3.8 billion). The main focus in all regions was on new
+connections and network expansion in conjunction with the energy
+1Prior-year figures were adjusted owing to the transfer of Non-Core Business.
+E.ON will continue to take into account the trust of rating agencies,
+investors, and banks at all times by means of a clear strategy and
+transparent communications. Alongside the ongoing dialog with
+capital market investors (at road shows, for example) and rating
+analysts, E.ON organizes events that include an annual
+informational meeting for its core group of banks.
+2024 2025 2026 2027 2028 2029 2030 2031 2032+
+2
+4
+831
+6
+10-
+12
+€ in billions
+4,753
+6,421
+E.ON Group
+1
+Consolidation
+76
+141
+Corporate Functions/Other¹
+523
+684
+Thereof: Energy Infrastructure Solutions
+("EIS")
+8
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+2022
+2023
+December 31,
+€ in billions
+Bonds¹
+Financial Liabilities
+E.ON also has access to €3.5 billion syndicated credit facility,
+which was concluded on October 24, 2019. It originally had a five-
+year term and includes two options to extend the facility, in each
+case for one year. After both options to extend the facility were
+exercised, the term of the credit facility ends on October 24, 2026.
+The credit margin is linked, among other things, to the
+development of certain ESG ratings, which gives E.ON financial
+incentives to pursue a sustainable corporate strategy. The ESG
+ratings are set by three renowned agencies: ISS ESG, MSCI ESG
+Research, and Sustainalytics. The facility serves as a reliable,
+ongoing general liquidity reserve for the E.ON Group and can be
+drawn on as needed. The credit facility is made available by 21
+banks which constitute E.ON's core group of banks.
+In addition to its DIP, E.ON has a €10 billion Commercial Paper
+("CP") program and a US$10 billion CP program, under which it
+can issue short-term notes. After years of inactivity, the U.S. dollar
+CP program was utilized again in 2023. €0.2 billion of CP was
+outstanding at year-end 2023 (prior year: €0.8 billion).
+With the exception of a U.S.-dollar-denominated bond issued in
+2008, all of E.ON SE and EIF's currently outstanding bonds were
+issued under a Debt Issuance Program ("DIP"). Similarly, innogy
+and innogy Finance B.V. bonds were formerly issued under the
+former innogy Group's DIP. A DIP simplifies a company's ability to
+issue debt to investors in public and private placements in flexible
+time frames. E.ON SE's DIP was last updated in March 2023 with
+a total volume of €35 billion, of which about €19.7 billion was
+utilized at year-end 2023 E.ON SE intends to renew the DIP in
+2024.
+External funding is generally carried out by E.ON SE, and the funds
+are subsequently on-lent in the Group. In the past, external
+funding was also carried out by the Company's Dutch finance
+subsidiary, E.ON International Finance B.V. ("EIF"), under
+guarantee of E.ON SE. In 2023 E.ON paid back in full maturities of
+€2.6 billion. E.ON issued new debt totaling €3.3 billion (see the
+chapter entitled Special Events in the Reporting Period), of which
+€2.5 billion were green bonds.
+3%
+Other
+3%
+USD
+20%
+27.9
+GBP
+EUR
+Small differences may occur due to rounding.
+0
+at December 31, 2023
+Split by Currency
+= Contents Q Search ← Back
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→Risks and Chances Report
+→ Forecast Report
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+111
+74%
+27.2
+EUR
+GBP
+20.5
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+112
+E.ON's creditworthiness has been assessed by Standard & Poor's
+("S&P"), Moody's and Fitch with long-term ratings of BBB, Baa2,
+and BBB+ (A- for bonds), respectively. The outlook for all ratings is
+stable. The ratings are based on the expectation that, over the near
+to medium term, E.ON will be able to maintain a debt ratio
+commensurate with these ratings. The short-term ratings are A-2
+(S&P), P-2 (Moody's), and F-1 (Fitch). In early 2023 Fitch
+upgraded its short-term rating from F-2 to F-1. The short-term
+ratings of S&P and Moody's remained stable in the year und
+review.
+Alongside financial liabilities, E.ON has, in the course of its
+business operations, entered into contingencies and other financial
+obligations. These include, in particular, guarantees, obligations
+from legal disputes and damage claims, as well as current and
+non-current contractual, legal, and other obligations. Notes 27, 28,
+and 32 to the Consolidated Financial Statements contain more
+information about E.ON's bonds as well as liabilities,
+contingencies, and other commitments.
+¹Includes private placements.
+32.5
+33.9
+Total
+4.5
+5.8
+Other liabilities
+0.8
+0.2
+19.3
+5.7
+6.1
+USD
+0.9
+1.0
+Combined Group Management Report
+JPY
+0.3
+Other currencies
+0.6
+0.6
+Promissory notes
+Commercial paper
+0.3
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→Internal Control System → Disclosures Regarding Takeovers
+Non-current assets
+45,743
+46,808
+Financial assets
+12
+1
+0
+14
+Property, plant, and equipment
+Intangible assets
+2023
+December 31
+2022
+€ in millions
+Balance Sheet of E.ON SE (Summary)
+E.ON SE prepares its Financial Statements in accordance with the
+German Commercial Code, the SE Ordinance (in conjunction with
+the German Stock Corporation Act), and the Electricity and Gas
+Supply Act (Energy Industry Act).
+46,822
+The 2023 Financial Year
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report
+→Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ About this Report
+→ Governance
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+115
+The Notes to the Consolidated Financial Statements contain more
+commentary on E.ON's asset situation.
+100
+134,009
+100
+113,506
+41
+54,2081
+33
+37,613
+E.ON SE's Earnings, Financial, and Asset Situation
+45,756
+Receivables from affiliated companies
+15,156
+Total equity and liabilities
+257
+Deferred income
+547
+460
+Other liabilities
+67,010
+11,723
+1,141
+15,601
+37,769
+34,385
+Liabilities to affiliated companies
+12,359
+3,912
+16,592
+Bonds
+Provisions
+Equity
+67,965
+Total assets
+0
+16
+13,515
+Other receivables and assets
+1,244
+2,442
+Liquid funds
+4,642
+43
+Current assets
+5,224
+21,181
+Accrued expenses
+85
+73
+Asset surplus after offsetting of benefit
+obligations
+21,042
+The key objective of E.ON's funding policy is for the Company to
+have access to a variety of financing sources at all times. E.ON
+achieves this objective by using different markets and debt
+instruments to maximize the diversity of its investor base. E.ON
+issues bonds with tenors that give its debt portfolio a balanced
+maturity profile. Moreover, large-volume euro-denominated
+benchmark issues may in some cases be combined with bonds
+denominated in foreign currencies, smaller euro-denominated
+issues, private placements, and/or promissory notes. Furthermore,
+from 2019 onward E.ON has issued green bonds and has since
+established them in its financing mix. E.ON continues to intend to
+cover more than 50 percent of its annual long-term financing
+requirements with green bonds (the "E.ON on Capital Markets"
+chapter contains information about the E.ON Green Bond
+Framework).
+57,9341
+55,923
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→Risks and Chances Report
+→ About this Report
+→ Governance
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+114
+Cash-conversion rate ("CCR") indicates how much of the E.ON
+Group's earnings are transformed into cash flow. CCR is equal to
+operating cash flow before interest and taxes divided by adjusted
+EBITDA. Cash outflows for the decommissioning of nuclear power
+plants were excluded from CCR until 2022. Because the earnings
+streams from PreussenElektra's generation activities are no longer
+included in adjusted EBITDA due to the discontinuation of power
+operations effective December 31, 2022, CCR was adjusted for
+the 2023 financial year. Cash flows of €271 million included in
+operating cash flow before interest and taxes in conjunction with
+the decommissioning of nuclear power plants and their temporary
+continued operation from January 1 to April 15, 2023, were not
+factored into the calculation of CCR. E.ON's CCR in 2023 was 80
+percent (prior year: 151 percent).
+Cash-Conversion Rate
+Cash provided by financing activities of continuing operations of -
+€1.8 billion was €1.3 billion above the prior-year figure of -€3.1
+billion. The net of the issuance and repayment of bonds,
+commercial paper, and bank liabilities led to an improvement in
+cash provided by financing activities. A net reduction in adverse
+effects in conjunction with variation margins due to the settlement
+of derivative transactions led to a further improvement in cash
+provided by financing activities.
+-3,146
+-1,844
+Cash provided by (used for) financing
+activities
+-3,146
+-5,588
+→ Forecast Report
+activities
+11,511
+7,225
+taxes
+Operating cash flow before interest and
+10,045
+5,654
+Operating cash flow
+2022
+2023
+€ in millions
+Cash Flow
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+Cash provided by (used for) investing
+= Contents Q Search ← Back
+Asset Situation
+Total assets and liabilities of €113.5 billion were about €20.5
+billion, or 15 percent, below the figure at year-end 2022. Non-
+current assets rose by €1.3 billion to €83 billion. This is mainly
+attributable to an increase in investments in property, plant, and
+equipment as well as a rise in the book value of companies valued
+using the equity method. This was mainly due to the addition of
+VSEH at Západoslovenská energetika a.s. ("ZSE") and the
+application of IAS 29 in Turkey. By contrast, receivables from
+derivative financial instruments declined. This relates in particular
+to the development of commodity derivatives. In addition, deferred
+tax assets increased owing to the development of derivatives and
+the reversal of deferred tax assets in the E.ON SE's tax group.
+16
+21,867
+18
+19,970
+100
+134,009
+100
+113,506
+39
+52,240
+27
+30,472
+61
+81,769
+73
+83,034
+%
+Current assets decreased by 41.7 percent, from €52.2 billion to
+€30.5 billion. This likewise resulted mainly from the decline in
+receivables on derivative financial instruments due to
+developments on commodity markets and from a reduction in
+liquid funds caused by higher investments and dividend payments.
+Equity attributable to E.ON SE shareholders was about €14.1
+billion at year-end 2023 (prior year: about €15.9 billion), whereas
+equity attributable to non-controlling interests was roughly €5.9
+billion (prior year: about €5.9 billion). The equity ratio (including
+non-controlling interests) at year-end 2023 was about 18 percent,
+which is 2 percentage points higher than at year-end 2022. The
+primary reason for the decline in equity was the reduction in net
+income, the dividend payment along with the remeasurement of
+pension obligations. In addition, other income and expenses
+decreased because of the recycling of the cash flow hedge
+relationships for commodity derivatives that were unwound in the
+prior year.
+Non-current debt declined by €2 billion, or 3.5 percent, chiefly
+because of the development of liabilities relating to derivative
+financial instruments and a decline in other provisions for
+contingent losses from pending transactions because of their
+utilization following the settlement of the underlying transactions.
+An increase in provisions for pensions due to lower interest rates
+and an increase in financial liabilities had a countervailing effect.
+Consolidated Assets, Liabilities, and Equity
+€ in millions
+Non-current assets
+49
+Current assets
+Non-current liabilities
+Current liabilities
+Total equity and liabilities
+1Adjusted (see also page 136).
+Current debt of €37.6 billion was 30.6 percent below the figure at
+year-end 2022, due principally to a decrease in liabilities relating to
+derivative financial instruments, which is likewise due to
+developments on commodity markets, and a decrease in liabilities
+from trade accounts payable.
+Dec. 31, 2023
+%
+Dec. 31, 2022
+Total assets
+Equity
+67,965
+229
+67,010
+¹Bonds previously issued by innogy are recorded at their nominal value. The figure shown in the
+Consolidated Balance Sheets is €1.5 billion higher (year-end 2022: €1.7 billion higher).
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→Risks and Chances Report
+E.ON expects Energy Infrastructure Solutions' earnings to be
+slightly higher in 2024 relative to the past financial year. This is
+mainly attributable to the higher investment activity of recent
+years and the related commissioning of new customer projects.
+Earnings at Corporate Functions/Other are expected to be below
+the prior-year level. Lower earnings from generation activities in
+Turkey and the fact that E.ON Energy Markets GmbH's earnings
+are now reported at Energy Retail will have an adverse impact.
+Adjusted net income and earnings per share from adjusted net
+income ("EPS") are expected to be below the prior-year level. In
+addition to the above-described developments in adjusted EBITDA,
+higher depreciation charges due to increased investments in the
+energy transition will have a negative impact. This will be partially
+offset by lower non-controlling interests resulting from a decline in
+operating earnings from companies with a significant share of
+minority interests.
+Planned Investments
+Investments in the sustainable expansion and digital
+transformation of energy networks and customer solutions
+operations form the basis for the value-driven growth E.ON aims
+to achieve. Investments of around €7.2 billion are therefore
+planned for the 2024 financial year.
+E.ON will make most of these investments in its Energy Networks
+segment, the backbone of a successful energy transition.
+Investments will go toward expanding, enhancing, and
+modernizing networks, switching equipment, and metering and
+control technology in order to ensure the reliable, uninterrupted,
+and sustainable distribution of electricity and to meet rising energy
+demand. In addition, E.ON will invest in the digitalization of
+network planning, monitoring, and control.
+Investments at Energy Infrastructure Solutions will mainly go
+toward business expansion in our markets in Sweden, Germany,
+and the United Kingdom.
+At Energy Retail, E.ON will invest in advanced IT platforms, smart
+charging solutions for eMobility, and integrated energy solutions.
+Corporate Functions/Other's investments will go mainly toward
+Group-wide IT infrastructure and digital platforms for the
+networks and customer solutions business.
+Cash-Effective Investments: 2024 Plan
+€ in billions
+Percentages
+Energy Networks
+-5.7
+79
+Energy Retail (previously Customer Solutions)
+-0.5
+7
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+Macroeconomic Situation
+In view of the current geopolitical crises and challenges and the
+associated uncertainties, the OECD's economic outlook published
+at the end of 2023 forecasts global economic growth of 2.7
+percent for 2024. However, the current situation gives forecasts a
+high degree of uncertainty.
+The forecast for global economic growth in 2024 takes into
+account stricter financing conditions, weak trade growth amid
+geopolitical tensions, and the effects of tighter monetary policy.
+Assuming that inflation continues to fall and real incomes rise, the
+OECD expects the global economy to grow by 3 percent in 2025.
+Global goods trade and industrial production are expected to
+regain momentum owing to the considerable drawdown of
+companies' inventories, while China's weak economic
+development will have a dampening effect.
+The European Commission's experts predict that the EU's GDP will
+grow by 1.3 percent in 2024 and 1.7 percent in 2025.
+Economic institutes anticipate that Germany's economy will begin
+to recover and grow by 0.9 percent in 2024 and to normalize
+further in 2025 with GDP growth of 1.3 percent. Declining
+inflation at the end of 2023, rising incomes, and the high
+employment rate indicate an increase in purchasing power and
+overall economic demand, which support these estimates and
+forecasts.
+General Statement on E.ON's Anticipated
+Development
+The growth strategy adopted in 2021 as a continuation of the
+Group's far-reaching transformation in the preceding years proved
+to be correct and resilient in 2023 as well. In our view, the
+strategic elements of sustainability and digitalization, which
+remain valid and underscore E.ON's growth ambitions, are
+precisely the success factors that will accelerate the
+transformation of the energy system. We anticipate that in 2024
+our operating business will continue to be shaped by a higher level
+of commodity prices and of inflation and interest rates than before
+the start of the crisis.
+Anticipated Earnings and Financial Situation
+Forecast Earnings Performance
+The most important key performance indicators for managing the
+E.ON Group are adjusted EBITDA, investments, and earnings per
+share from adjusted net income ("EPS"). E.ON expects adjusted
+Group EBITDA of €8.8 to €9.0 billion in the 2024 financial year. It
+anticipates adjusted net income of €2.8 to €3.0 billion, or €1.07 to
+€1.15 per share in 2024 (based on around 2,612 million shares
+outstanding). We report on the E.ON Group's dividend policy and
+planned annual dividend growth in the E.ON on Capital Markets
+chapter.
+Forecast by segment
+Energy Infrastructure Solutions (EIS)
+Adjusted EBITDA¹: 2024 Plan
+Energy Networks
+Energy Retail (previously Customer Solutions)
+Energy Infrastructure Solutions (EIS)
+Corporate Functions/Other
+E.ON Group
+¹Adjusted for non-operating effects.
+6.7 to 6.9
+1.6 to 1.8
+0.55 to 0.65
+about -0.2
+8.8 to 9.0
+There are changes to the E.ON Group's segment reporting
+effective January 1, 2024. The Energy Infrastructure Solutions
+("EIS") business, which was previously included in the Customer
+Solutions segment, has been carved out and will be reported as a
+separate segment. From 2024 onward, Customer Solutions also
+includes the activities of E.ON Energy Markets GmbH, our central
+commodity procurement unit (previously included in Corporate
+Functions/Other), and, due to its business activities' new profile,
+has been renamed Energy Retail.
+E.ON expects Energy Networks to record an earnings increase in
+2024 compared with the past financial year. This performance will
+result from further growth in the regulated asset base due to
+additional investments along with positive regulatory changes,
+particularly in Sweden. In addition, brought forward catch-up
+effects for costs incurred in prior years for network losses that
+were not fully covered are expected in Hungary.
+Earnings at Energy Retail (formerly Customer Solutions), without
+the Energy Infrastructure Solutions business, are expected to be
+significantly below the prior-year level, which will not be
+significantly altered by the initial inclusion of E.ON Energy Markets
+GmbH. The non-recurrence of positive one-off effects and the
+anticipated stabilization of the market environment will have an
+adverse impact on earnings.
+2The figure for asset-retirement obligations at December 31, 2023, does not fully correspond to
+the figure shown in the Consolidated Balance Sheets (€7,375 million at December 31, 2023). This
+is because economic net debt is calculated in part based on the actual amount of E.ON's
+obligations. The figure at December 31, 2022, corresponded to the figure shown in the
+Consolidated Balance Sheets (€7,445 million).
+€ in billions
+-0.8
+11
+Corporate Functions/Other
+Customer Solutions
+Energy Networks
+Corporate Functions
+and Manage
+Local Risk Committees
+= Contents Q Search ← Back
+The ERM is based on a centralized governance approach that
+defines standardized processes and tools covering the
+identification, evaluation, countermeasures as well as the
+monitoring and reporting of risks and chances. Overall governance
+is provided by the Group Controlling & Risk division's Group Risk &
+Special Projects department on behalf of the E.ON SE Risk
+Committee.
+All risks and chances have an accountable member of the
+Management Board, have a designated risk owner who remains
+operationally responsible for managing that risk/chance, and are
+identified in a dedicated bottom-up process.
+Scope
+E.ON's risk management system in the broader sense has a total of
+four components:
+⚫ an internal monitoring system
+Identify, Evaluate
+• a management information system
+preventive measures
+⚫the ERM, which is a risk management system in the narrow
+sense.
+Objective
+E.ON's Enterprise Risk Management ("ERM") provides the
+management of all units as well as the E.ON Group with a fair and
+realistic view of the risks and chances resulting from their planned
+and contracted business activities. It provides:
+• meaningful information about risks and chances to the business,
+thereby enabling the business to derive individual risks/chances
+as well as aggregate risk profiles within the time horizon of the
+medium-term plan
+• transparency on E.ON's risk position in compliance with legal
+requirements including KonTraG, BilMoG, and BilReG.
+The purpose of the internal monitoring system is to ensure the
+proper functioning of business processes. This consists of
+preventive organizational measures (such as policies and work
+instructions) and internal controls and audits (particularly by
+Internal Audit).
+The E.ON internal management information system identifies risks
+early so that steps can be taken to actively address them. Close
+consultation between the business units and with departments at
+Corporate Functions such as Controlling, Finance, and Accounting,
+120
+E.ON Integrated Annual Report 2023
+.
+Business Environment
+Units and Departments
+Group
+-0.2
+3
+E.ON Group
+-7.2
+100
+= Contents Q Search ← Back
+119
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+Central Enterprise Risk Management
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report → Risks and Chances Report
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+Enterprise Risk Management System in the Narrow Sense
+Internal Audit
+Group Decision-Making Bodies
+Steer
+Risk Committee
+E.ON SE Management Board
+E.ON SE Supervisory Board
+Audit and Risk Committee
+Govern and
+Consolidate
+→Internal Control System
+Forecast Report
+118
+→Risks and Chances Report
+Economic net debt increased by €5 billion relative to year-end
+2022 (€32.7 billion) to €37.7 billion.
+Economic Net Debt
+E.ON aims for a debt factor of up to 5.0. Debt factor at year-end
+2023 of 4.0 was significantly below the maximum allowable
+figure.
+the interest and principal payments. To manage economic net
+debt, E.ON continues to use the nominal amount of financial
+liabilities, which deviates from the figure shown in its balance
+sheets.
+Pursuant to IFRS valuation standards, innogy's financial liabilities
+at the time of initial consolidation were recorded at their fair value.
+This fair value is significantly higher than the original nominal
+value because interest-rate levels have declined since innogy's
+bonds were issued. The purchase-price allocation yielded a
+difference between the nominal value and the fair value, which
+results in additional liabilities of €1.5 billion at year-end 2023. This
+amount will be recorded in financial earnings as a reduction in
+expenditures and spread out over the maturity period of the
+respective bonds (see Note 10 to the Consolidated Financial
+Statements. These balance-sheet and earnings effects do not alter
+Economic net debt also includes provisions for asset-retirement
+obligations. If the figures for these provisions shown in the balance
+are larger than the respective amount of the obligation (without
+factoring in discounting and cost-escalation effects), the amount
+of the obligation-rather than provision shown in the balance
+sheets-is factored into economic net income. This is the case for
+asset-retirement obligations in the nuclear energy unit effective
+December 31, 2023. For purposes of management control, the
+amount of the obligations is therefore again used to calculate
+economic net debt.
+E.ON manages its capital structure using debt factor, which is
+equal to economic net debt divided by adjusted EBITDA; it is
+therefore a dynamic debt metric. Economic net debt includes not
+only financial liabilities but also provisions for pensions and asset-
+retirement obligations.
+With its target capital structure E.ON aims to sustainably secure a
+strong BBB/Baa rating.
+E.ON's finance strategy focuses on capital structure. At the
+forefront of this strategy is ensuring that E.ON always has access
+to capital markets commensurate with its debt level.
+Finance Strategy
+Financial Situation
+= Contents Q Search ← Back
+= Contents Q Search ← Back
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+The merger of the sole general partner of Essen-based MEON
+Pensions GmbH Co. KG ("MEON") into E.ON SE, the acquiring
+entity, on August 28, 2023, resulted in MEON's business assets
+accruing to E.ON as part of the universal succession. The accrual
+limits individual line items' comparability with the prior year.
+The increase in financial assets consists mainly of an increase in
+loans to affiliated companies (€1,451 million) and an increase in
+securities held as fixed assets due to the MEON accrual (€985
+million). A decline in stakes in affiliated companies due to the
+MEON accrual (-€1,371 million) was a countervailing factor.
+The increase in receivables from affiliated companies is mainly
+attributable to higher receivables from profit-pooling agreements
+with subsidiaries (€842 million). The decline in other liabilities
+results mainly from a reduction in the amount in money market
+funds (-€1,279 million).
+The change in equity reflects a €650 million increase in retained
+earnings resulting from changes in treasury shares under the
+employee stock-purchase program conducted in 2023 (€15
+million) along with a €28 million decrease in net income available
+for distribution.
+→Risks and Chances Report
+The increase in provisions results mainly from the provisions for
+pensions added from MEON at the date of the accrual (€2,722
+million).
+E.ON's net financial position declined by €3.8 billion compared
+with year-end 2022 to about -€25.3 billion. Investment
+expenditures and E.ON SE's dividend payment exceeded operating
+cash flow and disposals.
+Economic Net Debt
+-32,742
+-37,691
+-7,445
+-7,363
+-3,735
+-4,985
+-21,562
+-25,343
+196
+11
+-32,483
+The decrease in actuarial discount rates for pensions, which led to
+an increase in defined benefit obligations, did not offset the
+positive development of plan assets and, on balance, had an
+adverse impact on economic net debt (see Note 25 to the
+Consolidated Financial Statements). Despite the effects of accruals
+and the change in interest rates, the slight decrease in provisions
+for asset-retirement obligations mainly resulted from the
+utilization of provisions for asset-retirement obligations in the
+nuclear energy unit, which offset these effects (see Note 26 to the
+Consolidated Financial Statements). Because the utilization affects
+operating cash flow, however, the economic net debt was
+negatively affected by the interest-rate effects.
+-33,943
+1,177
+9,378
+7,412
+2022
+2023
+December 31,
+Economic net debt
+Asset-retirement obligations²
+Provisions for pensions
+Non-current securities
+Financial liabilities¹
+FX hedging adjustment
+Net financial position
+€ in millions
+Liquid funds
+1,347
+E.ON SE issued new bonds and commercial paper in the amount of
+€3,300 million in the 2023 financial year and repaid bonds in the
+amount of €1,750 million. In addition, liabilities from commercial
+paper declined by €559 million. The decrease in liabilities to
+affiliated companies of €3,484 million reflects a decline in intra-
+Group financing.
+Financial liabilities of €33.9 billion reflect E.ON SE's issuance of
+bonds in the year under review as well as the repayment of five
+bonds (details on the next page).
+= Contents Q Search ← Back
+116
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→Risks and Chances Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ Forecast Report
+The activities of the company E.ON SE within the meaning of
+Section 6b (3) of the Energy Industry Act consist mainly of other
+activities outside the electricity and gas sector. In addition, E.ON
+SE provides a relatively limited degree of energy-specific services
+to affiliated network operators for network operations relating to
+electricity distribution and/or gas distribution and prepares activity
+statements for these services. The resulting earnings, individually
+and in total, are minimal (about -€0.2 million).
+In the year under review, total tax expenses amounted to €160
+million relating to taxes for the current financial year as well as
+taxes for prior years. This consists of income tax expense of €160
+million and an expense from other taxes of €0.2 million.
+At the Annual Shareholders Meeting in 2024, the Management
+Board will propose that net income available for distribution be
+used to pay a dividend of €0.53 per ordinary share and the
+remaining amount of €1,412 million to be carried forward to the
+next financial year. Management's proposal for the use of net
+income available for distribution is based on the number of
+ordinary shares on March 4, 2024, the date the Financial
+Statements of E.ON SE were prepared.
+Outlook
+The negative balance of other income and expenses in 2023
+resulted primarily from €489 million in losses due to the transfer
+of MEON Pensions GmbH & Co. KG to E.ON SE, €265 million in
+personnel-related expenses, €225 million in expenses for
+purchased third-party services, €64 million in auditing and
+consulting services, and €174 million in net expenses from
+currency effects. The increase in the provision for recultivation and
+remediation obligations in 2023 reflected expenditures of €16
+million (prior year: €109 million).
+The E.ON SE Management Board has decided on a dividend policy
+that foresees annual growth in the dividend per share of up to 5
+percent through the dividend for the 2028 financial year. This also
+applies to dividend growth of up to 5 percent for the 2024
+financial year. E.ON will aim for an annual increase in dividend per
+share after 2028 as well. In E.ON's strategy, sustainability with an
+emphasis on climate-neutral economic activities is a key growth
+factor that will enable E.ON to meet its dividend targets.
+117
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+Information on treasury shares can be found in Note 11 to the
+Financial Statements of E.ON SE and Note 20 to the Consolidated
+Financial Statements.
+= Contents Q Search Back
+The financial result for 2023 includes a deterioration in net interest
+of €516 million, mainly due to the increase in interest
+expense
+rates. By contrast, the prior-year financial result was adversely
+affected by expenses from impairment charges on equity interests
+in affiliated companies (€649 million).
+The complete Financial Statements of E.ON SE, with an
+unqualified opinion issued by the auditor, KPMG AG, Düsseldorf,
+will be announced in the Federal Gazette (Bundesanzeiger).
+2,825
+E.ON SE is the parent company of the E.ON Group. As such, its
+earnings situation is affected by income from equity interests. The
+main contributors to positive income from equity interests were
+income from the transfer of profits from E.ON Beteiligungen
+GmbH in the amount of €2,174 million, E.ON Finanzanlagen
+GmbH in the amount of €1,030 million, and E.ON Energie AG in
+the amount of €764 million.
+€ in millions
+2023
+2022
+Income from equity interests
+4,011
+2,954
+Financial result
+-743
+-876
+Other expenditures and income
+Taxes
+-1,155
+Income Statement of E.ON SE (Summary)
+-160
+-635
+0
+-650
+1,276
+1,494
+2,797
+1,549
+1,953
+Net income
+106
+Profit carryforward from the prior year
+Net income transferred to retained earnings
+Net income available for distribution
+• management systems for health, safety, and environmental
+protection certified to ISO standards; in some cases, technical
+safety management ("TSM") as well
+This category encompasses credit, interest-rate, currency, tax, and
+asset-management risks and chances. E.ON uses systematic risk
+management to monitor and control its interest-rate and currency
+risks and manage these risks using derivative and non-derivative
+financial instruments. Here, E.ON SE plays a central role by
+aggregating risk positions through intragroup transactions and
+hedging these risks in the market. Due to E.ON SE's intermediary
+role, its risk position is largely closed.
+Managing Finance and Treasury Risks
+E.ON has comprehensive preventive measures in place to manage
+potential risks relating to acquisitions and investments. These
+measures include, in addition to the relevant company guidelines
+and manuals, comprehensive due diligence, legally binding
+contracts, a multistage approvals process, and shareholding and
+project controlling. Comprehensive post-acquisition projects also
+contribute to successful integration.
+Managing Strategic Risks
+E.ON uses a comprehensive sales-management system and
+extensive customer management to manage margin risks caused
+by market prices. E.ON conducts systematic risk management to
+limit exposure to risks of price changes. Its key elements are, in
+addition to binding Group-wide policies and a Group-wide
+reporting system, the use of quantitative key figures, the
+limitation, pricing, and optimization of risks, and the strict
+separation of functions between departments. Furthermore, E.ON
+utilizes derivative financial instruments that are commonly used in
+the marketplace. These instruments are transacted with financial
+institutions, brokers, power exchanges, and third parties whose
+creditworthiness is monitored on an ongoing basis. E.ON's local
+sales units and the remaining generation operations conduct local
+risk management under central governance standards to monitor
+these underlying commodity risks and to minimize them through
+hedging.
+Managing Market Risks
+121
+Should an accident occur despite the measures taken, E.ON has a
+reasonable level of insurance coverage. Detailed information can
+be found in various chapters of the Combined Group Management
+Report.
+• defined continual improvement processes ("CIPs").
+• crisis-prevention measures and emergency planning
+• further refinement of production procedures, processes, and
+technologies
+• quality management, control, and assurance
+process instructions
+• Company guidelines as well as work and
+• regular facility and network maintenance and inspection
+⚫ systematic employee training, advanced training, and
+qualification programs for employees
+The following are among the comprehensive measures E.ON takes
+to address such risks (including in conjunction with operational and
+IT risks):
+Managing Health, Safety, and Environmental ("HSE"),
+Human Resources ("HR"), and Other Risks
+E.ON IT systems are maintained and optimized by qualified E.ON
+Group experts and outside experts, and by a wide range of
+technological security measures. In addition, the E.ON Group has
+in place a range of technological and organizational measures to
+counter the risk of unauthorized access to data, the misuse of data,
+and data loss.
+To limit operational and IT risks, E.ON continually improves its
+network management and the optimal deployment of its assets. At
+the same time, E.ON implements operational and infrastructure
+improvements that will enhance the reliability of its generation
+assets and distribution networks, even under extraordinarily
+adverse conditions. In addition, E.ON has factored the operational
+and financial effects of environmental risks into its emergency
+plan. They are part of a catalog of crisis and system-failure
+scenarios prepared for the Group by the Incident and Crisis
+Management team.
+Managing Operational and IT Risks
+E.ON Integrated Annual Report 2023
+• project, environmental, and deterioration management
+Combined Group Management Report
+E.ON attempts to minimize the operational risks of legal
+proceedings and ongoing planning processes by managing them
+appropriately and by designing appropriate contracts beforehand.
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report → Risks and Chances Report
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Employees and Society
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Forecast Report → Risks and Chances Report
+→ Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+as well as Internal Audit is of particular importance in early risk
+detection.
+General Measures to Limit Risks
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+E.ON takes the following general preventive measures to limit
+risks.
+E.ON engages
+• documentation and reporting.
+• management and monitoring of risks and chances by analyzing
+and evaluating countermeasures and preventive systems
+• risk and chance analysis and evaluation
+⚫ systematic risk and chance identification
+in the next section, encompasses:
+E.ON's ERM, which is the basis for the risks and chances described
+Enterprise Risk Management ("ERM")
+Note 31 to the Consolidated Financial Statements contains
+detailed information about the use of derivative financial
+instruments and hedging transactions. Note 32 describes the
+general principles of E.ON's risk management and applicable risk
+metrics for quantifying risks relating to commodities, credit,
+liquidity, interest rates, and currency translation.
+In the context of Group-wide credit risk management, E.ON
+systematically assesses and monitors the creditworthiness of its
+business partners on the basis of Group-wide minimum standards.
+E.ON manages credit risk by taking appropriate measures, which
+include obtaining collateral and setting limits. The E.ON Group's
+Risk Committee is regularly informed about credit risks. A further
+component of E.ON's risk management is a conservative
+investment strategy for financial funds and a broadly diversified
+portfolio.
+= Contents Q Search ← Back
+Managing Legal and Regulatory Risks
+the Group and unit level and to actively manage risk exposure in
+line with E.ON's risk strategy.
+As required by law, E.ON's ERM's effectiveness is reviewed
+regularly by Internal Audit. In compliance with the provisions of
+Section 91, Paragraph 2, of the German Stock Corporation Act
+relating to the establishment of a risk-monitoring and early
+warning system, E.ON has a Risk Committee for the E.ON Group
+and for each of its business units. The Risk Committee's mission is
+to achieve a comprehensive overview of E.ON's risk exposure at
+= Contents Q Search Back
+Low
+Low
+Best case (95th percentile)
+Medium
+Medium
+Moderate
+Major
+Low
+Moderate
+Worst case (5th percentile)
+Medium
+E.ON's major risks and chances by risk category are described
+below. Also described are major risks and chances stemming from
+tail events as well as qualitative risks that would impact adjusted
+Risks and Chances by Category
+Medium
+The energy network business could likewise experience a decline
+in wheeling volume, credit losses, price increases for network
+losses, and redispatch expenditures that lead to lower earnings. A
+distinctive feature of several of regulatory jurisdictions in Europe in
+which we operate networks is that regulatory mechanisms
+generally foresee that a decline in wheeling volume and price-
+driven cost increases for network losses can generally be
+recovered in subsequent years by corresponding adjustments to
+network tariffs.
+Finance and treasury risks
+Strategic risks
+Market risks
+HSE, HR, and other
+Operational and IT risks
+Legal and regulatory risks
+Risk category
+Risk Position
+The E.ON Group has major risk positions in the following category:
+market risks. As a result, the aggregate risk position of E.ON SE as
+a Group is major. In other words, the E.ON Group's maximum
+annual adjusted EBITDA risk ought not to exceed - €500 million to
+-€2 billion in 95 percent of all cases.
+In the case of tail events and qualitative risks, the focus is not only
+on E.ON's key performance indicator, adjusted EBITDA, but also on
+other indicators relating to its asset and financial position.
+The following description of risks by category alludes to the
+aforementioned impact classes. It also addresses major/high tail
+events and major/high qualitative risks. In the case of qualitative
+risks (which by definition are more difficult to assess both in terms
+of their loss amount and their probability), a further distinction is
+made between risks with a low probability (6 percent < x ≤ 25
+percent) and a medium probability (26 percent < x ≤ 50 percent).
+Example: in category x, there is a risk y (medium, high) and a risk z
+(low, major).
+Commodity prices, which rose sharply in 2022 in conjunction with
+the war in Ukraine, declined significantly in 2023. This has
+significant positive implications for the assessment of individual
+risks as well as, on the negative side, individual chances relative to
+the prior year. On the one hand, commodity prices can affect
+wheeling volume and prices in the sales business; on the other, it is
+a material risk factor for possible bad debts in the sales business.
+Persistently high commodity prices also lead to material
+counterparty risks; however, our major suppliers' good credit
+ratings and system relevance continue to render the likelihood of
+occurrence very low (tail/high).
+The table below shows the maximum annual aggregated risk
+position (aggregated risk distribution) across the time horizon of
+the medium-term plan for all quantifiable risks and chances
+(excluding tail events) for each risk category based on E.ON's most
+important financial key performance indicator, adjusted EBITDA.
+Low
+EBITDA by more than €500 million. Also included are risks and
+chances that would affect planned net income and/or cash flow.
+Health and occupational safety are important aspects of E.ON's
+day-to-day business. The Company's operating activities can
+therefore pose risks in these areas and create social and
+environmental risks and chances. In addition, E.ON's operating
+business potentially faces risks resulting from human error and
+HSE, HR, and Other Risks
+E.ON could also be subject to environmental liabilities that could
+have a significant adverse impact on its business. In addition, new
+or amended environmental laws and regulations may result in cost
+increases for E.ON.
+Extraordinary environmental events could also affect the operation
+of energy networks or equipment and equipment components.
+This could pose a liquidity risk for E.ON (tail/major).
+Technologically complex production facilities are used in the
+distribution of energy, resulting in major risks from procurement
+and logistics, construction, the operation and maintenance of
+assets, as well as general project risks. The risks at
+PreussenElektra encompass dismantling activities as well. E.ON's
+operations in and outside Germany face major risks of a power
+failure as well as higher costs and additional investments resulting
+from unanticipated operational disruptions or other problems.
+Operational failures or extended production stoppages of facilities
+or components of facilities as well as environmental damage could
+negatively impact earnings, affect the cost situation, and/or result
+in the imposition of fines. In unlikely cases, this could lead to a high
+risk. Overall, it results in a moderate risk position and a low chance
+position in this category. General project risks can include delays
+and increased capital requirements.
+of E.ON's critical infrastructure), on the sales business (which
+could result in the loss of customer data), and on internal systems
+(which E.ON uses to control commercial processes in all its
+business units). It is important that the operating units and the
+Cybersecurity and Enterprise Risk Management divisions jointly
+and proactively evaluate and manage risks for E.ON.
+Cybersecurity and the continuous protection of IT and OT systems
+against cyberattacks constitute a focus area of E.ON's risk
+management. Examples include the analysis of attacks on the
+systems of the network business (which could affect the operation
+The operational and strategic management of the E.ON Group
+relies heavily on complex information technology ("IT") and
+complex operational technology ("OT"). Consequently, there are
+risks and chances in conjunction with information security and the
+security of operating processes in E.ON's business segments.
+Operational and IT Risks
+PreussenElektra's business is substantially influenced by
+regulation as well. This could pose risks for its remaining business
+and the dismantling of decommissioned nuclear power plants.
+A significant change will result from Germany's implementation of
+the European Court of Justice's ruling requiring it to form a largely
+independent national regulatory agency, which could have an
+impact on E.ON's regulated business activities in Sweden
+(low/major).
+Medium
+The operations of the E.ON Group's Customer Solutions segment
+subject it to certain risks relating to legal proceedings, ongoing
+planning processes, and regulatory changes. But these risks also
+relate, in particular, to legal actions and proceedings concerning
+contract and price adjustments to reflect market dislocations or
+(including as a consequence of the energy transition) an altered
+business climate in the power and gas business, alleged price-
+rigging, and anticompetitive practices. This poses a major risk
+(tail/high).
+impairment charges, but can also create chances. This results in a
+medium risk and a medium chance position.
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report → Risks and Chances Report
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+124
+This risk category also includes major risks arising from possible
+litigation, fines, and claims; governance and compliance issues; as
+well as risks and chances related to contracts and permits.
+Changes to this environment can lead to considerable uncertainty
+with regard to planning and, under certain circumstances, to
+The operation of energy networks is subject to a large degree of
+government regulation. New laws and regulatory periods cause
+uncertainty for this business. In addition, matters related to
+Germany's Renewable Energy Sources Act, such as issues
+regarding solar energy, can cause temporary fluctuations in cash
+flow and adjusted EBITDA. The rapid growth of renewables is also
+creating new risks for the network business. For example,
+insolvencies among renewables operators or feed-in tariffs unduly
+paid by grid operators lead to court or regulatory proceedings.
+In the wake of the economic and financial crisis in many EU
+member states, interventionist policies and regulations have been
+adopted in recent years, such as additional taxes and additional
+reporting requirements (for example, EMIR, MAR, REMIT, MiFID2).
+The relevant agencies monitor compliance with these regulations
+closely. This leads to attendant risks for E.ON's operations. The
+same applies to price moratoriums, regulated price reductions,
+statutory price adjustment requirements, and changes to support
+schemes for renewables, which could pose risks to, as well as
+create chances for, E.ON's operations in the respective countries.
+The political, legal, and regulatory environment in which the E.ON
+Group does business is a source of risks. This could confront E.ON
+with direct and indirect consequences that could lead to possible
+financial disadvantages. New risks-but also opportunities-arise
+from energy-policy decisions at the European and national level.
+The Energy Policy and Regulatory Environment chapter contains
+detailed information about the energy policy environment.
+Legal and Regulatory Risks
+In addition, the decommissioning of gas networks and attendant
+possible asset-retirement obligations could pose significant risks
+for the Energy Networks segment (tail, high).
+General Risk Situation
+= Contents Q Search ← Back
+→ Disclosures Regarding Takeovers
+E.ON Integrated Annual Report 2023
+122
+management risks and chances
+• Credit, interest-rate, foreign-currency, tax, and asset-
+Finance and treasury risks
+Risks and chances from investments and disposals
+Strategic risks
+and margins and from changes in market liquidity
+• Risks and chances from the development of commodity prices
+Market risks
+• Health, safety, and environmental risks and chances
+Combined Group Management Report
+HSE, HR, and other
+• IT and process risks and chances
+Operational and IT risks
+• Risks from public consent processes
+• Regulatory risks
+• Policy and legal risks and chances
+Legal and regulatory risks
+E.ON'S IT-based system for reporting risks and chances has the
+following risk categories and examples:
+Methodology
+Risks and Chances
+To promote uniform financial reporting Group-wide, E.ON has in
+place a central, standardized system that enables effective and
+automated risk reporting. Company data are systematically
+collected, transparently processed, and made available for analysis
+both centrally and decentrally at the units.
+The ERM applies to all fully consolidated E.ON Group companies
+and all companies valued at equity whose gross book value in the
+Consolidated Financial Statements is greater than €50 million.
+E.ON takes an inventory of its risks and chances at each quarterly
+balance-sheet date.
+• Risks and chances relating to asset operations and new-build
+projects
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+→ Internal Control System
+E.ON Integrated Annual Report 2023
+→ Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Forecast Report → Risks and Chances Report
+→ Employees and Society
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+123
+= Contents Q Search ← Back
+The last step is to assign, in accordance with the 5th and 95th
+percentiles, the aggregated risk distribution to impact classes-
+low, moderate, medium, major, and high-according to their
+quantitative impact on planned adjusted EBITDA. The impact
+classes are shown in the table above.
+€200 million ≤ x < €500 million
+€500 million ≤ x < €2 billion
+x ≥ €2 billion
+€50 million ≤ x < €200 million
+Major
+High
+Medium
+Moderate
+Low
+x < €50 million
+Impact Classes
+E.ON uses the 5th and 95th percentiles of this aggregated risk
+distribution as the worst case and best case, respectively.
+Statistically, this means that with this risk distribution there is a 90
+percent likelihood that the deviation from the Company's current
+earnings plan for adjusted EBITDA will remain within these
+extremes.
+This statistical distribution makes it possible for E.ON's internal
+risk management system to conduct a Monte Carlo simulation of
+these risks. This yields an aggregated risk distribution that is
+quantified as the deviation from the Company's current earnings
+plan for adjusted EBITDA.
+For quantifiable risks and chances, E.ON then evaluates the
+likelihood of occurrence and the potential loss or damage. In the
+commodity business, for example, commodity prices can rise or
+fall. This type of risk is modeled with a normal distribution.
+Modeling is supported by a Group-wide IT-based system.
+Extremely unlikely events-those whose likelihood of occurrence is
+5 percent or less-are classified as tail events. Tail events are not
+included in the simulation described below.
+E.ON uses a multistep process to identify, evaluate, simulate, and
+classify risks and chances. Risks and chances are generally
+reported on the basis of objective evaluations. If this is not
+possible, estimates by in-house experts are used. The evaluation
+measures a risk's/chance's financial impact on the current earnings
+plan while factoring in risk-reducing countermeasures. The
+evaluation therefore reflects the net risk.
+→Internal Control System → Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+employee turnover. It is important that E.ON acts responsibly
+along its entire value chain and that it communicates consistently,
+enhances the dialog, and maintains good relationships with key
+stakeholders. E.ON actively considers environmental, social, and
+corporate governance issues. These efforts support the Company's
+business decisions and public relations. E.ON's objective is to
+minimize reputational risks and retain public acceptance so that
+the Company can continue to operate its business successfully.
+These matters result in a low risk and chance position.
+in extensive and constructive dialog with
+government agencies and policymakers in order to manage the
+risks resulting from the E.ON Group's policy, legal, and regulatory
+environment. Furthermore, the Company strives to conduct proper
+project management so as to identify early and minimize the risks
+attending major investments.
+Market Risks
+The catalog of ICS Principles, which defines the minimum
+requirements for an effective internal control system, is a key
+component of E.ON's ICS. It contains overarching principles such
+as authorization, segregation of duties, and master data
+management as well as specific requirements for managing
+potential risks in various areas and processes, such as supplier
+monitoring, project management, invoice verification, payments,
+and ESG reporting. All fully consolidated companies and majority-
+owned units are subject to the ICS Principles.
+In addition to the ICS Principles, certain units of special importance
+to the E.ON Group's Consolidated Financial Statements must fulfill
+several additional ICS requirements for selected processes. These
+requirements relate to the documentation and assessment of the
+relevant processes and controls-the ICS model-as well as
+reporting to Corporate Audit. The ICS model, which incorporates
+company- and industry-specific aspects, defines potential risks for
+accounting (financial reporting), for ESG reporting (non-financial
+reporting), for compliance with important internal and external
+rules, and for the operating units of their operating targets, and
+serves as a checklist, and provides guidance for the establishment
+of internal controls as well as their documentation and
+implementation.
+A functionally managed digital organization and third-party service
+providers provide IT and digital services for the E.ON Group. IT
+systems used for accounting as well as IT systems relevant for the
+ESG-Reporting are subject to the internal control system
+framework, which includes IT general controls, such as access
+controls, segregation of duties, processing controls, measures to
+prevent the intentional and unintentional falsification of the
+programs, data, and documents as well as controls related to
+supplier monitoring. The documentation of the IT general controls
+is stored in E.ON's documentation system.
+Each year, qualitative criteria and quantitative materiality aspects
+are used to determine which processes and controls must be
+documented and assessed by which E.ON units.
+E.ON units in the ICS documentation scope use a central
+documentation system (SAP-GRC) for this purpose. The system
+contains the scope, detailed documentation requirements, the
+assessment requirements for process owners, and the final Sign-
+Off process.
+Management Self-Assessment and Control Tests
+After E.ON units have documented their processes and controls,
+the individual process owners conduct an annual assessment of
+the design and the operational effectiveness of the controls
+embedded in these processes and the ICS principles. This is known
+as a management self-assessment. The assessment is supported
+by tests of control effectiveness for selective risk areas. Corporate
+Audit's ICS department defines the methodology for these tests,
+which are conducted by the process owners or employees
+assigned by them.
+In addition, the effectiveness of the internal controls is audited by
+Internal Audit. These audits are conducted based on a risk-oriented
+audit plan. Any identified deficiencies are reported to the relevant
+companies.
+Furthermore, the E.ON Group's general IT controls that are
+relevant for the Consolidated Balance Sheets, selected controls of
+the Business Service Centers in Regensburg and Cluj, selected
+controls of the Human Resources Service Center in Germany
+(E.ON Country Hub Germany GmbH), and selected controls of the
+Pension Service Company in Germany (Energie Pensions-
+Management GmbH) were audited as part of the audit of the
+Group's Consolidated Financial Statements.
+The findings of the management self-assessments and the audits
+are included in the integrated annual report on the effectiveness of
+the entire E.ON Group's ICS and are reported to the E.ON SE
+Management Board.
+Sign-Off Process
+E.ON's ICS is based on the globally recognized COSO framework
+from May 2013 (COSO: The Committee of Sponsoring
+Organizations of the Treadway Commission).
+Based on the self-assessment result and internal and external
+audit findings, the respective management of the unit conducts
+the final Sign-Off. The final step of the internal evaluation process
+is the submission of a formal written declaration confirming the
+ICS's effectiveness ("Sign-Off"). The Sign-Off process is conducted
+at all levels of the Group companies before E.ON SE, as the final
+step, conducts it for the Group as a whole. The Chairman of the
+E.ON SE Management Board and the Chief Financial Officer
+perform the final Sign-Off for the E.ON Group.
+Statement on the E.ON Group's Internal Control
+System and Risk Management System in the
+Narrower Sense (Enterprise Risk Management)
+> The entire E.ON SE Management Board affirms that it is aware of
+its responsibility to establish and maintain an appropriate and
+effective internal control system ("ICS") and enterprise risk
+management ("ERM") system for the E.ON Group. We work to
+129
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report →Risks and Chances Report
+→ Internal Control System → Disclosures Regarding Takeovers
+continually enhance the ICS and ERM in order to eliminate
+identified weaknesses and ensure the ongoing improvement of
+processes and systems. The entire Management Board is not
+aware of any circumstances arising from its examination of the ICS
+and ERM system and the reporting of the Corporate Audit and
+Group Risk functions that speak against the appropriateness and
+effectiveness of these systems in all material respects. <
+130
+Corporate Audit regularly informs the E.ON SE Supervisory
+Board's Audit & Risk Committee about the ICS for financial
+reporting and about any significant deficiencies identified in the
+E.ON Group's various processes.
+→Risks and Chances Report
+E.ON'S ICS Framework
+= Contents Q Search ← Back
+= Contents Q Search ← Back
+In the past, predecessor entities of E.ON SE conducted mining
+operations, resulting in obligations in North Rhine-Westphalia and
+Bavaria (low/major). E.ON SE can be held responsible for damage.
+This could lead to major individual risks that E.ON currently only
+evaluates qualitatively.
+Disclosures Pursuant to Section 289, Paragraph 4,
+and Section 315, Paragraph 4 of the German
+Commercial Code on the Internal Control System for
+the Accounting Process
+General Principles
+E.ON applies Section 315e, Paragraph 1, of the German
+Commercial Code (German abbreviation: "HGB") and prepares its
+Consolidated Financial Statements in accordance with
+International Financial Reporting Standards ("IFRS") and the
+interpretations of the IFRS Interpretations Committee ("IFRSIC")
+that were adopted by the European Commission for use in the EU
+as of the end of the fiscal year and whose application was
+mandatory as of the balance-sheet date (see Note 1 to the
+Consolidated Financial Statements). Energy Networks (Germany,
+Sweden, and East-Central Europe/Turkey), Customer Solutions
+(Germany, United Kingdom, the Netherlands, Other), and
+Corporate Functions/Other are the Company's IFRS reportable
+segments.
+E.ON SE prepares its Financial Statements in accordance with the
+German Commercial Code, the SE Ordinance (in conjunction with
+the German Stock Corporation Act), and the German Energy Act.
+E.ON prepares a Combined Group Management Report which
+applies to both the E.ON Group and E.ON SE.
+Accounting Process
+All companies included in the Consolidated Financial Statements
+must comply with E.ON's uniform Accounting and Reporting
+Guidelines for the Annual Consolidated Financial Statements and
+the Interim Consolidated Financial Statements. These guidelines
+describe applicable IFRS accounting and valuation principles. They
+also explain accounting principles typical in the E.ON Group, such
+as those for provisions for nuclear-waste management, the
+treatment of financial instruments, and the treatment of
+regulatory obligations. E.ON regularly analyzes amendments to
+laws, new or amended accounting standards, and other important
+pronouncements for their relevance to, and consequences for, the
+Consolidated Financial Statements and, if necessary, update its
+guidelines and systems accordingly.
+Corporate Functions defines and oversees the roles and
+responsibilities of various Group entities in the preparation of E.ON
+SE's Financial Statements and the Consolidated Financial
+Statements. These roles and responsibilities are described in a
+Group Policy document.
+E.ON Group companies are responsible for preparing their financial
+statements in a proper and timely manner. They receive
+substantial support from Business Service Centers in Regensburg,
+Germany; Cluj, Romania; and Kraków, Poland. E.ON SE combines
+the financial statements of subsidiaries belonging to its scope of
+consolidation into its Consolidated Financial Statements using
+standard consolidation software. Group Accounting is responsible
+for conducting the consolidation and for monitoring adherence to
+the guidelines for scheduling, processes, and contents. Monitoring
+by means of system-based automated controls is supplemented
+by manual checks.
+and supports management in implementing an effective internal
+control system. The unit's management remains responsible for
+the appropriateness and effectiveness of the implemented ICS.
+The ICS BP system ensures a uniform approach as well as
+consistent and efficient collaboration and fosters continuous
+improvement by means of extensive information-sharing among
+Group companies.
+In conjunction with the year-end closing process, additional
+qualitative and quantitative information relevant for accounting is
+compiled. Furthermore, dedicated quality-control processes are in
+place for all relevant departments to discuss and ensure the
+completeness of important information on a regular basis.
+Defined procedures ensure that all transactions and the
+preparation of E.ON SE's Financial Statements are recorded,
+processed, assigned on an accrual basis, and documented in a
+complete, timely, and accurate manner. Relevant data from E.ON
+SE's Financial Statements are, if necessary, adjusted to conform
+with IFRS and then transferred to the consolidation software
+system using SAP-supported transfer technology.
+The following explanations about E.ON's internal control system
+("ICS") and its general IT controls apply equally to the Consolidated
+Financial Statements and to E.ON SE's Financial Statements.
+Internal Control System
+The purpose of the ICS framework and the annual ICS process is to
+provide sufficient assurance to prevent error or fraud from
+resulting in material misrepresentations in the Financial
+Statements, the Combined Group Management Report, the Half-
+Year Financial Report, the Quarterly Statements, as well as ESG
+reporting. Furthermore, it serves to assure compliance to
+significant internal and external regulations and to assure
+effectiveness and efficiency of business activities. The
+management of each unit in the E.ON Group is legally responsible
+for establishing and maintaining an adequate and effective internal
+control system ("ICS"). The Compliance function is responsible for
+the implementation of the compliance management system
+("CMS") which is described in the Corporate Governance
+Declaration. The Corporate Governance Declaration can be found
+on the E.ON website www.eon.com in the Corporate Governance
+section under "Corporate Governance Declaration." The ICS
+department at Corporate Audit is responsible for the oversight and
+coordination of the overall ICS process in order to ensure an
+effective ICS in the E.ON Group. For this purpose, the ICS
+department at Corporate Audit provides the ICS framework and
+the necessary tools. An ICS Business Partner ("ICS BP") is assigned
+to each unit that is of importance to the E.ON Group and therefore
+in the ICS documentation scope. The ICS BP is responsible for
+coordinating and monitoring the unit's ICS activities and advises
+128
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report
+→ Internal Control System
+→ Disclosures Regarding Takeovers
+→Risks and Chances Report
+E.ON SE's Financial Statements are prepared with SAP software.
+The accounting and preparation processes are divided into discrete
+functional steps. Bookkeeping processes have largely been
+outsourced to E.ON's Business Service Centers. Cluj has the
+primary responsibility for processes relating to subsidiary ledgers
+and several bank activities. Regensburg has the principal
+responsibility for processes relating to the general ledgers.
+Automated or manual controls are integrated into each step.
+→ Forecast Report
+E.ON Integrated Annual Report 2023
+→ Internal Control System
+Furthermore, declining or rising discount rates could lead to
+increased or reduced provisions for pensions and asset-retirement
+obligations, including non-current liabilities (tail, major). This can
+create a high balance-sheet risk for E.ON.
+This category has a medium risk and a medium chance position.
+In principle, E.ON could also encounter tax risks and chances.
+current obligations (particularly pension and asset-retirement
+obligations) could, in individual cases, be major.
+In addition, the price changes and other uncertainty relating to the
+current and non-current investments E.ON makes to cover its non-
+Derivative transactions may result in short-term cash inflows or
+outflows. This relates in particular to margin payments for
+electricity and gas procurement transactions on energy exchanges.
+The additional liquidity requirements potentially resulting from this
+are factored into E.ON's financing strategy.
+E.ON faces earnings risks relating to net income from financial
+liabilities, planned funding, and interest-rate derivatives that are
+based on variable interest rates and from non-current asset-
+retirement obligations.
+E.ON's international business operations are exposed to risks from
+currency fluctuation. One form of this risk is transaction risk,
+which arises when payments are made in a currency other than
+E.ON's functional currency. Another form of risk is translation risk,
+which arises when currency fluctuations lead to accounting effects
+when assets/liabilities and income/expenses of E.ON companies
+outside the eurozone are translated into euros and entered into
+E.ON's Consolidated Financial Statements. Positive developments
+in foreign-currency rates can also create chances for E.ON's
+operating business.
+E.ON is exposed to credit risk in its operating activities and through
+the use of financial instruments. Credit risk results from non-
+delivery or partial delivery by a counterparty or customer of the
+agreed consideration for services rendered, from total or partial
+failure to make payments owed on existing accounts receivable,
+and from replacement risks in open transactions.
+Finance and Treasury Risks
+In the case of planned disposals, E.ON faces the risk of disposals
+not taking place or being delayed and the risk that E.ON receives
+lower-than-anticipated disposal proceeds. In addition, after
+transactions close E.ON could face major liability risks resulting
+from contractual obligations (tail/major).
+Refinancing terms on debt capital markets depend in part on rating
+agencies' credit ratings. Rating agencies Moody's, S&P, and Fitch
+have given E.ON a strong investment-grade rating. E.ON has
+contracts that would trigger additional collateral requirements if
+certain rating levels were not met. Consequently, significant rating
+downgrades could lead to additional liquidity requirements
+(tail/high). On the other hand, positive business performance or
+further debt reduction could have a positive impact on E.ON's
+rating.
+Furthermore, acquisitions and investments in new geographic
+areas or lines of business require E.ON to become familiar with
+new sales markets and competitors and to address the attending
+business risks.
+Alongside E.ON's own procurement organization for its sales
+business, the E.ON Energy Markets GmbH ("EEM") subsidiary
+functions as a central interface to wholesale markets. EEM's main
+purpose is to consolidate E.ON's commodity positions in order to
+manage market price risks and to diversify and mitigate credit and
+margin (cash flow) risks.
+on robust demand forecasting methods. Nevertheless, actual
+customer demand may deviate from the forecast owing to various
+factors (such as the weather and the economy). Such deviations
+could have a positive or negative business impact, particularly in
+an environment of highly volatile prices. E.ON aims to reduce these
+impacts by, for example, pursuing a prudent hedging strategy in
+conjunction with a proactive approach to reforecasting or by
+pricing its risks vis-à-vis customers.
+= Contents Q Search ← Back
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report → Risks and Chances Report
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+125
+E.ON's units operate in an international market environment that is
+characterized by general risks relating to the business cycle. In
+addition, the entry of new suppliers into the marketplace along
+with more aggressive tactics by existing market participants and
+reputational risks have created a keener competitive environment
+for the Company's sales business in and outside Germany, which
+could reduce margins. However, market developments could also
+have a positive impact on E.ON's business. Such factors include
+wholesale and retail price developments, customer churn rates,
+and temporary volume effects in the network business. This
+results in a major risk and a medium chance position in this
+category.
+→ Disclosures Regarding Takeovers
+The demand for electric power and natural gas is seasonal, with
+E.ON's operations generally experiencing higher demand during
+the cold-weather months of October through March and lower
+demand during the warm-weather months of April through
+September. As a result of these seasonal patterns, E.ON's sales
+and results of operations are higher in the first and fourth quarters
+and lower in the second and third quarters. E.ON procures the
+required quantities of electricity and gas for its customers based
+E.ON's business strategy involves acquisitions and investments in
+its core business as well as disposals. This strategy depends in part
+on the ability to successfully identify, acquire, and integrate such
+companies that enhance, on acceptable terms, the Company's
+energy business. In order to obtain the necessary approvals for
+acquisitions, E.ON may be required to divest other parts of its
+business or to make concessions or undertakings that affect its
+business. In addition, there can be no assurance that E.ON will be
+able to achieve the returns expected from any acquisition or
+investment. It is also possible that E.ON will not be able to realize
+its strategic ambition of enlarging its investment pipeline and that
+significant amounts of capital could be used for other
+opportunities. The overall risk position in this category was
+moderate at the balance-sheet date; the chance position was low.
+ESG Risks and Chances
+Strategic Risks
+E.ON has integrated the reporting of non-financial risks related to
+ESG and their impact on the Group into the ERM. All risks and
+chances related to ESG are made identifiable in the ERM system.
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+▶ E.ON strives to operate responsibly at all times and therefore
+monitors all the material impacts of its business activities.
+Alongside financial aspects, E.ON also considers environmental,
+social, and governance ("ESG") aspects along its value chain. This
+encompasses monitoring and assessing ESG risks and chances as
+well as their possible impact on the E.ON Group, but also the
+impact of E.ON's business activities on the climate, the
+environment, employees, suppliers, and customers. The
+systematic consideration of non-financial issues enables the
+Company to identify opportunities and risks for business
+development at an early stage.
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+127
+Management Board's Evaluation of the Risk and
+Chances Situation
+This scenario analysis was enlarged in 2022 and applied to the
+climate risks defined in the EU taxonomy. First, E.ON's main EU
+taxonomy-aligned economic activities and its companies making
+the main contribution to the corresponding investments were
+identified centrally. Next, these companies used a bottom-up
+process to determine the climate risks for the relevant economic
+activities or investments in accordance with the EU taxonomy
+catalog. These risks were then subjected to a scenario analysis. A
+qualitative risk assessment was performed for each identified
+climate risk and economic activity in line with the IPCC scenarios
+SSP1-2.6 and SSP5-8.5 for the reference period 2041 to 2060.
+We conducted an update of the scenario analysis for the 2023
+financial year. The findings of this risk assessment do not differ in
+nature from the risks already reported and managed in the ERM.
+As for the amount of damage estimated in the scenario analysis, in
+2023 there were again no significant deviations from the century
+events for weather or climate risks already reported in the ERM.
+recommendations.
+In addition, in 2021 E.ON for the first time developed a qualitative
+scenario analysis describing the impact of three different climate
+scenarios on E.ON and on individual E.ON business units through
+2050. This involved defining three reference scenarios
+(conservative, ambitious, and fully committed) and assessing and
+identifying the relevant business units on the basis of key value
+drivers and related key performance indicators ("KPIs"). The next
+step was to develop a qualitative scenario impact analysis by
+analyzing the key value drivers identified by the business units and
+by performing a risk assessment as well as by evaluating the
+business impacts. The last step was to develop strategic
+adaptation are identified in the risk management process.
+basic approach to identifying any potential harm to climate change
+adaptation is verified in consultation with relevant specialist
+departments.
+This
+The E.ON Group's overall risk and chances situation at year-end
+2023 changed significantly relative to year-end 2022, in particular
+because of lower commodity prices. Although the maximum
+annual risk for the E.ON Group's adjusted EBITDA over the period
+under consideration remains classified as major and despite the
+major counterparty risks and risks resulting from lawsuits and
+legal proceeding relating to contract and price adjustments at
+Customer Solutions, from today's perspective E.ON does not
+perceive any risk profile that could threaten the existence of E.ON
+SE, the E.ON Group, or individual segments.
+E.ON places an emphasis on analyzing its climate risks, in part
+because of E.ON's support of the recommendations of the Task
+Force on Climate-Related Financial Disclosures ("TCFD").
+Safeguarding its assets against climate-change impacts and the
+climate resilience of its business model are economically relevant
+to E.ON. Our analysis therefore includes both physical risks (direct
+impacts of climate change, such as extreme weather and rising
+temperatures) and transitory risks resulting from the transition to
+a low-carbon and more climate-resilient economy (such as
+changes in consumer preferences, the regulatory environment, and
+carbon pricing).
+Combined Group Management Report
+→ About this Report
+→ Governance
+Physical climate risks are also the focus of the EU Taxonomy
+Regulation's do-no-significant-harm ("DNSH") provisions (see the
+"EU Taxonomy" chapter). They are assigned to the EU
+environmental objective 2 "climate change adaptation." E.ON
+assesses DNSH compliance with climate change adaptation at the
+Group level. Each E.ON Group business unit is required to
+comprehensively assess and record climate risks as part of its risk
+reporting. Any risks that significantly jeopardize climate change
+126
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report → Risks and Chances Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+= Contents Q Search ← Back
+E.ON views ESG risks as factors in the known risk categories listed
+below. Sustainability risks can have a considerable impact on all of
+these known risk categories and can be a factor in contributing to
+their materiality.
+In addition, E.ON analyzes potential reportable risks within the
+meaning of Section 289c, Paragraph 3, Sentence 1, Items 3 and 4
+of the German Commercial Code (German abbreviation: "HGB"),
+while taking into account its ESG materiality analysis,
+management approaches, and the ERM's findings. This involves
+considering risks relating to environmental, employee, and social
+matters as well as human rights, anticorruption, and antibribery.
+At year-end 2023, E.ON had not identified any major risks related
+to its own business activities and business relationships as well as
+products and services pursuant to Section 289c, Paragraph 3,
+Sentence 1, Items 3 and 4 of the HGB that are very likely to have
+or will have serious negative impacts on ESG aspects.
+E.ON Integrated Annual Report 2023
+2,191
+Financial receivables and other financial assets
+1,177
+Non-current securities
+(18)
+1,347
+3,538
+Equity investments
+3,738
+(16)
+Other financial assets
+1,079
+6,653
+5,532
+2,561
+1,034
+34
+(18)
+(17)
+(16)
+Inventories
+81,769
+83,034
+Non-current assets
+32
+(11)
+Income tax assets
+2,079
+3,505
+(11)
+Deferred tax assets
+9,286
+3,850
+Operating receivables and other operating assets
+Companies accounted for under the equity method
+→ Consolidated Statement of Cash Flows
+40,749
+Consolidated Balance Sheet-Assets
+→ Notes
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+135
+= Contents Q Search ← Back
+801
+130
+Attributable to non-controlling interests
+61
+4,826
+1,940
+→ Consolidated Balance Sheets
+December 31,
+€ in millions
+Goodwill
+(15)
+Property, plant and equipment
+2,377
+2,710
+(33)
+3,453
+3,592
+37,419
+(15)
+17,126
+(15)
+2022
+2023
+Note
+Right-of-use assets
+Intangible assets
+17,017
+2,204
+2,641
+(18)
+(21)
+2,641
+-506
+(20)
+2022
+December 31,
+2023
+Note
+Additional paid-in capital
+Capital stock
+€ in millions
+→ Consolidated Balance Sheets
+Consolidated Balance Sheet-Equity and Liabilities
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+13,327
+→ Consolidated Statement of Cash Flows
+13,338
+(22)
+7,024
+Non-controlling interests (before reclassification)
+15,923
+14,114
+Equity attributable to shareholders of E.ON SE
+-1,067
+-1,042
+(20)
+Treasury shares
+-2,206
+-2,303
+(23)
+Accumulated Other Comprehensive Income
+3,217
+1,491
+Retained earnings
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+Assets held for sale
+Cash and cash equivalents
+Restricted liquid funds
+Securities and fixed-term deposits
+Liquid funds
+851
+1,030
+(11)
+Income tax assets
+36,447
+19,005
+(18)
+Trade receivables and other operating assets
+1,819
+1,085
+Current assets
+Total assets
+(19)
+7,412
+= Contents Q Search ← Back
+136
+134,009
+113,506
+52,240
+30,472
+1,543
+Financial receivables and other financial assets
+0
+7,324
+5,585
+452
+452
+1,600
+1,375
+9,376
+(5)
+Discontinued operations
+Items that will not be reclassified subsequently to the income statement
+4,826
+-1,625
+-2,385
+¹Based on weighted-average number of shares outstanding.
+Weighted-average number of shares outstanding (in millions)
+from net income
+from discontinued operations
+from continuing operations
+Earnings per share (attributable to shareholders of E.ON SE)-basic and diluted¹
+Attributable to non-controlling interests
+Attributable to shareholders of E.ON SE
+in €
+Net income
+Income/loss from discontinued operations, net
+Income from continuing operations
+Income taxes
+(11)
+598
+245
+699
+0.70
+0.20
+0.02
+0.70
+0.18
+(14)
+24
+Interest and similar expenses
+411
+1,831
+517
+2,242
+760
+61
+(5)
+2,242
+243
+2,611
+2,552
+Income from other securities, interest and similar income
+(15)
+-5,437
+-6,010
+(12)
+Thereof: Impairments of financial assets
+Other operating expenses
+Depreciation, amortization and impairment charges
+Personnel costs
+-108,627
+-64,228
+(9)
+Cost of materials
+73,193
+38,888
+(8)
+-3,514
+-3,378
+(8)
+-59,548
+927
+-1,094
+(10)
+Interest results
+1,070
+1,195
+Income from continuing operations before interest results and income taxes
+1,291
+-7
+Income/loss from equity investments
+279
+478
+Income from companies accounted for under the equity method
+-660
+-984
+-71,736
+30
+Continuing operations
+2,609
+E.ON Integrated Annual Report 2023
+-18
+2
+-431
+-10
+-491
+-15
+9
+37
+-164
+39
+-155
+76
+27
+-549
+9
+-7
+-42
+328
+591
+-445
+Attributable to shareholders of E.ON SE
+5,627
+-315
+Total recognized income and expenses (total comprehensive income)
+3,385
+-1,075
+13
+Total income and expenses recognized directly in equity (other comprehensive income)
+-69
+Items that might be reclassified subsequently to the income statement
+-325
+217
+-2
+593
+328
+1,211
+134
+1,555
+Income taxes
+2,426
+-1,427
+Remeasurements of defined benefit plans
+2,242
+760
+Net income
+2022
+2023
+€ in millions
+Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+Remeasurements of defined benefit plans of companies accounted for under the equity method
+149
+25
+Income taxes
+Reclassification adjustments recognized in income
+Unrealized changes-hedging reserve/other
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Companies accounted for under the equity method
+Unrealized changes
+Reclassification adjustments recognized in income
+Currency-translation adjustments
+Unrealized changes
+Fair value measurement of financial instruments
+Reclassification adjustments recognized in income
+Unrealized changes-reserve for hedging costs
+-139
+Unrealized changes-hedging reserve
+-675
+Cash flow hedges
+2,174
+-1,006
+7,032
+-277
+272
+1,591
+Reclassification related to IAS 32
+(25)
+-1,088
+13,353
+0
+13,353
+0
+2,641
+2,641
+Non-
+controlling
+interests
+Reclassifi-
+cation
+related
+to IAS 32
+fication)
+of E.ON SE
+reclassi-
+1,228
+-381
+holders
+(before
+Non-
+controlling
+interests
+Equity
+attributable
+to share-
+Reserve for
+hedging
+costs
+Hedging
+reserve
+instruments
+measure-
+ment of
+financial
+Reserve for
+hedging
+costs
+Treasury
+shares
+-3,072
+16
+34
+231
+12,284
+-1,094
+-17
+-1,036
+34
+16
+-2,460
+847
+34
+0
+-787
+6,623
+12,053
+-1,094
+-17
+0
+0
+0
+0
+612
+-1,036
+other
+0
+earnings
+Hedging
+reserve/
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+139
+2Cash and cash equivalents of continuing operations at the end of the period of the previous year also include €12 million attributable to VSEH Group that was deconsolidated in the fourth quarter of 2023.
+¹Cash and cash equivalents of continuing operations at the beginning of the period also include €12 million attributable to VSEH Group that was desconsolidated in the fourth quarter of 2023 (previous
+year: €8 million).
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+7,336
+Less: Cash and cash equivalents of discontinued operations at the end of the period
+Cash and cash equivalents of continuing operations at the end of the period²
+7,336
+5,585
+3,642
+7,336
+-59
+27
+3,753
+5,585
+→ Consolidated Balance Sheets
+→ Notes
+Consolidated Statement of Changes in Equity
+Retained
+paid-in
+Capital
+stock
+Additional
+Fair value
+Cash flow hedges
+adjustments
+Changes in accumulated other comprehensive income
+Currency translation
+defined benefit plans
+Remeasurement of
+Other Comprehensive Income
+Net income/loss
+Total comprehensive income
+Net additions/disposals from
+reclassification related to IAS 32
+Share additions/reductions
+Balance as of January 1, 2022
+Change in scope of consolidation
+Treasury shares repurchased/sold
+Dividends
+IAS 29 adjustment
+Balance as of December 31, 2021
+€ in millions
+capital
+-1,778
+6,623
+5,836
+0
+-94
+-18
+24
+income
+other comprehensive
+Changes in accumulated
+2,174
+436
+1,336
+436
+1,738
+3,385
+390
+390
+2,995
+9
+1,336
+-94
+1,738
+6
+1,257
+-46
+E.ON Integrated Annual Report 2023
+140
+21,867
+5,944
+-1,088
+7,032
+15,923
+-1,067
+-8
+300
+-60
+-2
+-2,436
+3,217
+13,338
+2,641
+Balance as of December 31, 2022
+1,211
+-46
+-18
+0
+-787
+24
+2,242
+-1,598
+-320
+-320
+-1,278
+-1,278
+12
+12
+27
+45
+-15
+-4
+-4
+34
+0
+18,120
+5,836
+231
+Total
+17,889
+30
+45
+45
+-68
+411
+411
+1,831
+1,831
+5,627
+801
+801
+4,826
+9
+1,336
+-94
+-18
+24
+3,569
+-301
+-301
+-301
+-23
+-68
+1,738
+-3,146
+-1,844
+-3,146
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+137
+= Contents Q Search ← Back
+1The presentation of the maturities of liabilities from derivative financial instruments was adjusted by €16.7 billion as of December 31, 2022, from non-current to current within the meaning of IAS 8.41 ff.
+This relates to energy procurement and sales contracts that are not classified as own-use contracts under IFRS 9 and are accounted for as commodity derivatives.
+134,009
+113,506
+Total equity and liabilities
+→ Consolidated Statement of Income
+54,208
+Current liabilities
+5,528
+763
+(5)
+Liabilities associated with assets held for sale
+4,866
+(26)
+584
+733
+37,613
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+1,065
+-812
+-1,546
+-2,704
+3,378
+3,514
+-61
+2,242
+760
+2022
+2023
+Changes in deferred taxes
+Changes in provisions
+Depreciation, amortization and impairment of intangible assets and of property, plant and equipment
+Income/loss from discontinued operations, net
+Net income
+€ in millions
+Consolidated Statement of Cash Flows
+→ Notes
+(11)
+1,615
+42,1471
+(27)
+21,867
+19,970
+5,944
+5,856
+(24)
+Miscellaneous provisions
+Income tax liabilities
+Trade payables and other operating liabilities
+(27)
+Financial liabilities
+Deferred tax liabilities
+Miscellaneous provisions
+Provisions for pensions and similar obligations
+Income tax liabilities
+Operating liabilities
+Financial liabilities
+Equity
+Non-controlling interests
+Non-current liabilities
+30,823
+28,965
+(27)
+5,186
+4,617
+(27)
+57,934
+55,923
+(27)
+2,793
+2,223
+(11)
+11,233
+9,028
+(26)
+3,735
+4,985
+298
+548
+(11)
+10,9101
+8,316
+27,397
+Gain/loss on disposal of intangible assets and property, plant and equipment, equity investments and securities (>3 months)
+Changes in operating assets and liabilities and in income taxes
+7
+-768
+Cash provided by (used for) financing activities
+Cash provided by (used for) financing activities of discontinued operations
+Cash provided by (used for) financing activities of continuing operations
+Repayments of financial liabilities
+Proceeds from financial liabilities
+Cash dividends paid to non-controlling interests
+Cash dividends paid to shareholders of E.ON SE
+Payments received/made from changes in capital
+Net increase/decrease in cash and cash equivalents
+Cash provided by (used for) investing activities
+Changes in restricted liquid funds
+€ in millions
+Consolidated Statement of Cash Flows
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Cash provided by (used for) investing activities of continuing operations
+Cash provided by (used for) investing activities of discontinued operations
+Effect of foreign exchange rates on cash and cash equivalents
+Cash and cash equivalents at the beginning of the year¹
+Cash and cash equivalents of discontinued operations at the beginning of the period
+-1,844
+-8,037
+-5,593
+6,488
+5,347
+-306
+-297
+-1,278
+-1,331
+-13
+30
+-3,146
+-5,588
+-3,146
+276
+2022
+-5,588
+2023
+-2
+Cash and cash equivalents at the end of the period
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+138
+5,455
+-2,997
+-5,678
+22,917
+-1,081
+-688
+-1,169
+266
+Proceeds from disposal of intangible assets and property, plant and equipment
+Proceeds from disposal of equity investments
+Cash provided by (used for) operating activities (operating cash flow)
+Cash provided by (used for) operating activities of discontinued operations
+Cash provided by (used for) operating activities of continuing operations
+Other operating liabilities and income taxes
+Trade payables
+Other operating receivables and income tax assets
+Trade receivables
+Inventories
+12,503
+4,619
+-14,879
+-1,168
+14,976
+10,045
+= Contents Q Search ← Back
+-1,264
+-2,069
+Purchases of securities (>3 months) and of financial receivables and fixed-term deposits
+1,533
+2,659
+Proceeds from disposal of securities (>3 months) and of financial receivables and fixed-term deposits
+-177
+-411
+Purchases of investments in equity investments
+-4,576
+-6,010
+Purchases of investments in intangible assets and property, plant and equipment
+760
+24
+302
+221
+10,045
+5,654
+5,654
+-8,113
+Other non-cash income and expenses
+997
+(30) Supplemental Cash Flow Disclosures
+159
+(10) Financial Results
+134
+Consolidated Statement of Income
+= Contents Q Search ← Back
+financial statements
+condensed consolidated
+E.ON Integrated Annual Report 2023
+201
+132
+⚫ notification on December 10, 2020, by RWE Aktiengesellschaft
+for 15 percent of the voting rights.
+The Company has been notified about the following direct or
+indirect interests in its share capital that exceed 10 percent of the
+voting rights:
+Other Disclosures Regarding Takeovers
+A change-of-control event would also result in the early payout of
+virtual shares under the E.ON Performance Plan.
+The purpose of these contractual agreements is to preserve the
+independence of Management Board members.
+severance payments are limited to the amount of the annual
+compensation for the remaining term of the service agreement.
+Total compensation for the past financial year and the expected
+total compensation for the current financial year in which the
+service agreement ends prematurely are used to calculate the
+severance payment cap.
+In the event of a premature loss of a Management Board position
+due to a change-of-control event, the service agreements of
+Management Board members entitle them to severance and
+settlement payments. The entitlement exists if, within 12 months
+of the change of control, a Management Board member's service
+agreement is terminated by mutual consent, expires, or is
+terminated by the Management Board member; in the latter case,
+however, only if the member's Management Board position is
+materially affected by the change of control. Management Board
+members' severance payment consists of their base salary and
+target bonus plus fringe benefits for two years after termination of
+their service agreement. In accordance with the DCGK, these
+Settlement Agreements between the Company and
+Management Board Members or Employees in the
+Case of a Change-of-Control Event
+The underlying contracts of debt issued since 2007 contain
+change-of-control clauses that give the creditor the right of
+cancellation. This applies, inter alia, to bonds issued by E.ON SE
+and E.ON International Finance B.V. and guaranteed by E.ON SE
+and other instruments such as credit contracts. Granting change-
+of-control rights to creditors is considered good corporate
+governance and has become standard market practice. More
+information about financial liabilities is contained in the section of
+the Combined Group Management Report entitled Financial
+Situation and in Note 27 to the Consolidated Financial Statements.
+Stock with special rights granting power of control has not been
+issued. In the case of stock given by the Company to employees,
+employees exercise their rights of control directly and in
+accordance with legal provisions and the provisions of the Articles
+of Association, just like other shareholders.
+Significant Agreements to Which the Company Is a
+Party That Take Effect on a Change of Control of the
+Company Following a Takeover Bid
+(11) Income Taxes
+Consolidated Statement of Recognized Income and
+Expenses
+167
+Property, Plant and Equipment
+220
+(34) Transactions with Related Parties
+(15) Goodwill, Intangible Assets, Right-of-use Assets and
+136
+Consolidated Balance Sheets
+218
+(33) Leasing
+160
+166
+206
+(32) Additional Disclosures on Financial Instruments
+166
+(13) Other Information
+135
+203
+(31) Derivative Financial Instruments and Hedging
+Transactions
+164
+(12) Personnel-Related Information
+(14) Earnings per Share
+At the Annual Shareholders Meeting of May 28, 2020,
+shareholders approved a conditional increase of the Company's
+share capital (with the option to exclude shareholders' subscription
+rights) up to the amount of €264 million ("Conditional Capital
+2020"). Note 20 to the Consolidated Financial Statements
+contains more information about Conditional Capital 2020.
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 28, 2020, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase, until May
+27, 2025, the Company's share capital by a total of up to €528
+million through one or more issuances of new registered no-par-
+value shares against contributions in cash and/or in kind
+(authorized capital pursuant to Sections 202 et seq. of the AktG;
+"Authorized Capital 2020"). Subject to the Supervisory Board's
+approval, the Management Board is authorized to exclude
+shareholders' subscription rights.
+In each case, the Management Board will inform the Shareholders
+Meeting about the utilization of the aforementioned authorization,
+in particular about the reasons for and the purpose of the
+acquisition of treasury shares, the number of treasury shares
+acquired, the amount of the registered share capital attributable to
+them, the portion of the registered share capital represented by
+them, and their equivalent value.
+⚫ through a stock exchange
+At the Management Board's discretion, the acquisition may be
+conducted:
+Pursuant to a resolution of the Shareholders Meeting of May 28,
+2020, the Management Board is authorized, until May 27, 2025,
+to have the Company acquire treasury shares. The shares acquired
+and other treasury shares that are in possession of or to be
+attributed to the Company pursuant to Sections 71a et seq. of the
+AktG must altogether at no point account for more than 10
+percent of the Company's share capital.
+Management Board's Power to Issue or Buy Back
+Shares
+Furthermore, the Supervisory Board is authorized to revise the
+wording of Section 3 of the Articles of Association upon utilization
+of authorized or conditional capital.
+The Supervisory Board is authorized to decide by resolution on
+amendments to the Articles of Association that affect only their
+wording (Section 10, Paragraph 7, of the Articles of Association).
+Resolutions of the Shareholders Meeting require a majority of the
+valid votes cast unless mandatory law or the Articles of
+Association explicitly prescribe otherwise. An amendment to the
+Articles of Association requires a two-thirds majority of the votes
+cast or, in cases where at least half of the share capital is
+represented, a simple majority of the votes cast unless mandatory
+law explicitly prescribes another type of majority.
+permissible. If several persons are appointed as members of the
+Management Board, the Supervisory Board may appoint one of the
+members as Chairperson of the Management Board. If there is a
+vacancy on the Management Board for a required member, the
+court makes the necessary appointment upon petition by a
+concerned party in the event of an urgent matter. The Supervisory
+Board may revoke the appointment of a member of the
+Management Board and of the Chairperson of the Management
+Board for serious cause (for further details, see Sections 84 and 85
+of the AktG).
+The Supervisory Board appoints members to the Management
+Board for a term not exceeding five years; reappointment is
+•
+Pursuant to the Company's Articles of Association, the
+Management Board consists of at least two members. The
+Supervisory Board decides on the number of members as well as
+on their appointment and dismissal.
+Pursuant to Section 71b of the German Stock Corporation Act
+(German abbreviation: "AktG"), the Company's treasury shares
+give it no rights, including no voting rights.
+An employee stock-purchase program was offered in 2021 and
+2022. Shares acquired by employees under the employee stock-
+purchase program are subject to a blackout period that begins the
+day ownership of such shares is transferred to the employee and
+that ends on December 31 of the next calendar year plus one. As a
+rule, an employee may not sell such shares until the blackout
+period has expired.
+Restrictions on Voting Rights or the Transfer of
+Shares
+The share capital totals €2,641,318,800 and consists of
+2,641,318,800 registered shares without nominal value. Each
+share of stock grants the same rights and one vote at a
+Shareholders Meeting.
+Composition of Share Capital
+Disclosures Pursuant to Section 289a and
+Section 315a of the German Commercial Code and
+Explanatory Report
+= Contents Q Search ← Back
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ Forecast Report →Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+Combined Group Management Report
+Legal Provisions and Rules of the Company's Articles
+of Association Regarding the Appointment and
+Dismissal of Management Board Members and
+Amendments to the Articles of Association
+by means of a public offer directed at all shareholders or a public
+solicitation to submit offers
+• by means of a public offer or a public solicitation to submit
+offers for the exchange of liquid shares that are admitted to
+trading on an organized market, within the meaning of the
+German Securities Purchase and Takeover Law, for Company
+shares
+•
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, separately or collectively, including
+with respect to treasury shares acquired by affiliated companies or
+companies majority-owned by the Company or by third parties for
+their account or the Company's account.
+In addition, the Management Board is authorized to cancel
+treasury shares, without such cancellation or its implementation
+requiring an additional resolution by the Shareholders Meeting.
+• to be used for the purpose of a scrip dividend where
+shareholders may choose to contribute their dividend
+entitlement to the Company in the form of a contribution in kind
+in exchange for new shares.
+• to be offered, with or without consideration, for purchase and
+transferred to individuals who are or were employed by the
+Company or one of its affiliates as well as to board members of
+affiliates of the Company
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+131
+• to be used in order to satisfy the rights of creditors of bonds
+with conversion or option rights or, respectively, conversion
+obligations issued by the Company or its Group companies
+⚫to be sold and transferred against contributions in kind
+⚫to be sold and transferred against cash consideration
+With regard to treasury shares that will be, or have been, acquired
+based on the aforementioned authorization and/or prior
+authorizations by the Shareholders Meeting, the Management
+Board is authorized, subject to the Supervisory Board's consent
+and excluding shareholder subscription rights, to use these
+shares-in addition to a disposal through a stock exchange or an
+offer granting a subscription right to all shareholders-as follows:
+These authorizations may be utilized on one or several occasions,
+in whole or in partial amounts, in pursuit of one or more objectives
+by the Company and also by its affiliated companies or by third
+parties for the Company's account or one of its affiliates' account.
+by the use of derivatives (put or call options or a combination of
+both).
+(35) Segment Reporting
+221
+Other operating income
+138
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+133
+201
+(29) Litigation and Claims
+158
+(9) Cost of Materials
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+(28) Contingent Liabilities and Other Financial Obligations 200
+(8) Other Operating Income and Expenses
+195
+(27) Liabilities
+157
+(7) Own Work Capitalized
+192
+(26) Miscellaneous Provisions
+157
+(6) Revenues
+157
+191
+→ Notes
+Consolidated Statement of Income
+Consolidated Statement of Cash Flows
+1,334
+(7)
+Own work capitalized
+126
+79
+Changes in inventories (finished goods and work in progress)
+-1,462
+115,660
+93,686
+= Contents Q Search ← Back
+(6)
+-1,718
+Electricity and energy taxes
+117,122
+95,404
+Sales including electricity and energy taxes
+2022
+2023
+Note
+€ in millions
+Sales
+Description of the Net Defined Benefit Liability
+→ Consolidated Balance Sheets
+in 2023
+HGB
+178
+(19) Liquid Funds
+142
+Notes
+(38) List of Shareholdings Pursuant to Section 313 (2)
+177
+(18) Receivables and Other Assets
+(37) Subsequent Events
+228
+177
+140
+Consolidated Statement of Changes in Equity
+227
+Management Board
+172
+and Other Financial Assets
+(36) Compensation of Supervisory Board and
+155
+(16) Companies Accounted for under the Equity Method
+(17) Inventories
+(20) Capital Stock
+227
+182
+Description of the Pension Cost
+178
+(5) Material Acquisitions, Disposals and Disposal Groups
+184
+(25) Provisions for Pensions and Similar Obligations
+155
+(4) Scope of Consolidation
+(24) Non-Controlling Interests
+155
+181
+the Commodity Markets
+(23) Changes in Other Comprehensive Income
+(3) Impact of the War in Ukraine and the Development of
+181
+(22) Retained Earnings
+153
+(2) New Standards, Interpretations and Amendments
+181
+(21) Additional Paid-in Capital
+142
+(1) Summary of Significant Accounting Policies
+190
+→ Consolidated Statement of Income
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+Associated Companies
+E.ON Integrated Annual Report 2023
+14,114
+→ Notes
+-1,042
+Consolidated Financial Statements
+= Contents Q Search ← Back
+If the issue of shares in subsidiaries or associates to third parties
+leads to a reduction in E.ON's ownership interest in these investees
+("dilution"), and consequently to a loss of control, joint control or
+significant influence, gains and losses from these dilutive
+transactions are included in the income statement under other
+operating income or expenses.
+The Consolidated Financial Statements of E.ON SE, Brüsseler Platz
+1, 45131 Essen, Germany, registered in the Commercial Register
+of Essen District Court under number HRB 28196, have been
+prepared in accordance with Section 315e (1) of the German
+Commercial Code ("HGB") and with those International Financial
+Reporting Standards ("IFRS") and IFRS Interpretations Committee
+interpretations ("IFRIC") that were adopted by the European
+Commission for use in the EU as of the end of the fiscal year, and
+whose application was mandatory as of December 31, 2023. On
+March 4, 2024, the Board of Management of E.ON SE approved
+the Consolidated Financial Statements as of December 31, 2023,
+for publication.
+Principles
+The Consolidated Financial Statements of the E.ON Group ("E.ON"
+or the "Group") are generally prepared at cost, with the exception
+of financial assets that are measured at fair value through OCI
+(FVOCI), financial assets that are measured at fair value through
+profit or loss (FVPL) and financial liabilities that are measured at
+fair value through profit or loss (FVPL).
+The Consolidated Financial Statements were prepared in euros.
+Unless otherwise stated, all amounts are shown in millions of
+euros (€ million). For accounting reasons, rounding differences
+may occur. These financial statements relate to the financial year
+from January 1 to December 31, 2023. In accordance with IAS 1,
+"Presentation of Financial Statements" ("IAS 1"), the Consolidated
+Balance Sheets have been prepared using a classified balance
+sheet structure. Assets that will be realized within 12 months of
+the reporting date, as well as liabilities that are due to be settled
+within one year of the reporting date are generally classified as
+current. The Consolidated Statement of Income is classified using
+the nature of expense method, which is also applied for internal
+purposes.
+Scope of Consolidation
+The Consolidated Financial Statements incorporate the financial
+statements of E.ON SE and entities controlled by E.ON
+("subsidiaries"). Control exists when the Group is exposed, or has
+rights, to variable returns from its involvement with the investee
+and has the ability to use its power over the investee to influence
+those returns. Control is generally deemed established when a
+majority of the voting rights is held. An entity is a structured entity
+if control is based on contractual arrangements or other legal
+relationships and is not reflected in a majority of voting rights.
+The results of the subsidiaries acquired or disposed of during the
+year are included in the Consolidated Statement of Income from
+the date of acquisition or until the date of their disposal,
+respectively.
+Where necessary, adjustments are made to the subsidiaries'
+financial statements to bring their accounting policies into line
+with those of the Group. Intercompany receivables, liabilities and
+results are eliminated in the consolidation process.
+-69
+19,970
+(1) Summary of Significant Accounting Policies
+Basis of Presentation
+5,856
+-141
+7,024
+An associate is an investee over whose financial and operating
+policy decisions E.ON has significant influence and that is not
+controlled by E.ON or jointly controlled with E.ON. Significant
+influence is presumed if E.ON directly or indirectly holds at least
+20 percent, but not more than 50 percent, of an entity's voting
+-865
+-141
+-1,006
+Changes in accumulated
+other comprehensive
+income
+382
+Balance as of December 31, 2023
+2,641
+13,327
+1,491
+-2,054
+20
+38
+-532
+-22
+-232
+141
+135
+-97
+28
+28
+-1,168
+rights. Interests in associated companies are accounted for using
+the equity method.
+The employer service cost representing the additional benefits that
+employees earned under the benefit plan during the fiscal year is
+reported under personnel costs; the net interest on the net liability
+or asset from defined benefit pension plans determined based on
+the discount rate applicable at the start of the fiscal year is
+reported under financial results.
+Companies accounted for using the equity method are tested for
+impairment by comparing the carrying amount with its recoverable
+amount. If the carrying amount exceeds the recoverable amount,
+the carrying amount is adjusted for this difference. If the reasons
+for previously recognized impairment losses no longer exist, such
+impairment losses are reversed accordingly.
+Code
+2023
+2022
+2023
+GBP
+0.87
+0.89
+0.87
+DKK
+E.ON Integrated Annual Report 2023
+150
+Obligations arising from the decommissioning or dismantling of
+property, plant and equipment are recognized during the period of
+their occurrence at their discounted settlement amounts, provided
+that the obligation can be reliably estimated, whereby no negative
+discount rates are applied. The carrying amounts of the respective
+property, plant and equipment are increased by the same amounts.
+In subsequent periods, capitalized asset retirement costs are
+In accordance with IAS 37, "Provisions, Contingent Liabilities and
+Contingent Assets" ("IAS 37"), provisions are recognized when
+E.ON has a legal or constructive present obligation towards third
+parties as a result of a past event, it is probable that E.ON will be
+required to settle the obligation, and a reliable estimate can be
+made of the amount of the obligation. The provision is recognized
+at the expected settlement amount. Long-term obligations are
+reported as liabilities at the present value of their expected
+settlement amounts if the interest rate effect (the difference
+between present value and repayment amount) resulting from
+discounting is material; future cost increases that are foreseeable
+and likely to occur on the balance sheet date at year-end must also
+be included in the measurement. Long-term obligations are
+generally discounted at the market interest rate applicable as of
+the respective balance sheet date, provided that it is not negative.
+The accretion amounts and the effects of changes in interest rates
+are generally presented as part of financial results. A
+reimbursement related to the provision that is virtually certain to
+be collected is capitalized as a separate asset. No offsetting within
+provisions is permitted. Advance payments remitted are deducted
+from the provisions.
+Provisions for Asset Retirement Obligations and Other
+Miscellaneous Provisions
+Payments for defined contribution pension plans are expensed as
+incurred and reported under personnel costs. Contributions to
+state pension plans are treated like payments for defined
+contribution pension plans to the extent that the obligations under
+these pension plans generally correspond to those under defined
+contribution pension plans.
+The amount reported on the balance sheet represents the present
+value of the defined benefit obligations reduced by the fair value of
+plan assets. If a net asset position arises from this calculation, the
+amount is limited to the present value of available refunds and the
+reduction in future contributions and to the benefit from
+prepayments of minimum funding requirements. Such an asset
+position is recognized as an operating receivable.
+Past service cost, as well as gains and losses from settlements, are
+fully recognized in the income statement in the period in which the
+underlying plan amendment, curtailment or settlement takes
+place. They are reported under personnel costs.
+-865
+Included in gains and losses from the remeasurements of the net
+defined benefit liability or asset are actuarial gains and losses that
+may arise especially from differences between estimated and
+actual variations in underlying assumptions about demographic
+and financial variables. Additionally included is the difference
+between the actual return on plan assets and the expected interest
+income on plan assets included in the net interest result.
+Remeasurement effects are recognized in full in the period in
+which they occur and are not reported within the Consolidated
+Statements of Income, but are instead recognized within the
+Statements of Recognized Income and Expenses as part of equity.
+obligations and pension entitlements that are known on the
+reporting date and economic trend assumptions such as
+assumptions on wage and salary growth rates and pension
+increase rates, among others, that are made in order to reflect
+realistic expectations, as well as variables specific to reporting
+dates such as discount rates, for example.
+Provisions for Pensions and Similar Obligations
+Measurement of defined benefit obligations in accordance with
+IAS 19, "Employee Benefits," is based on actuarial computations
+using the projected unit credit method, with actuarial valuations
+performed at year-end. The valuation encompasses both pension
+In 2023, as in 2022, employees of E.ON SE and participating
+subsidiaries once again had the opportunity to purchase E.ON
+shares at favorable conditions under the employee stock purchase
+program. The program includes a share-based payment settled in
+equity instruments (shares of E.ON SE) as consideration for
+services rendered or work performed. The corresponding
+compensation under IFRS 2 was recognized in personnel expense
+and the offsetting entry was made in equity.
+The E.ON Performance Plan represents commitments of the
+Company which provide for cash compensation based on the share
+price performance at the end of the term. The compensation
+expense is measured taking into account the fair value of the
+virtual shares granted and recognized in personnel expense pro
+rata over the vesting period.
+year-end
+Interests in associated companies accounted for using the equity
+method are reported on the balance sheet at cost, adjusted for
+changes in the Group's share of the net assets after the date of
+acquisition and for any impairment charges. Losses that might
+potentially exceed the Group's interest in an associated company
+when attributable long-term loans are taken into consideration are
+generally not recognized. Any difference between the cost of the
+investment and the pro rata remeasured value of its net assets is
+recognized in the Consolidated Financial Statements as part of the
+carrying amount.
+ISO
+€1, annual
+average rate
+2022
+0.85
+7.44
+Joint Ventures
+Joint ventures are also accounted for using the equity method.
+Unrealized gains and losses arising from transactions with joint-
+venture companies are eliminated within the consolidation process
+on a pro rata basis if they are material.
+Joint Operations
+A joint operation exists when E.ON and other investors directly
+control an operation, but unlike a joint venture, they do not have a
+claim to the changes in net assets from the operation. Instead,
+they have direct rights to individual assets or direct obligations
+with respect to individual liabilities in connection with the
+operation. E.ON recognizes assets and liabilities as well as
+revenues and expenses in a joint operation pro rata according to
+the rights and obligations attributable to E.ON.
+142
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+Business Combinations
+Business combinations are accounted for using the purchase
+method, under which the purchase price is offset against the
+proportional share in the acquired company's revalued net assets.
+The fair values are determined using published exchange or market
+prices at the time of acquisition in the case of marketable
+securities or commodities, for example, and in the case of land,
+buildings and major technical equipment, generally using
+independent expert reports that have been prepared by third
+parties. If exchange or market prices are unavailable for
+consideration, fair values are derived from market prices for
+comparable assets or comparable transactions. If these values are
+not directly observable, fair value is determined using appropriate
+valuation methods. In such cases, E.ON determines fair value using
+the discounted cash flow method by discounting estimated future
+cash flows by a weighted-average cost of capital.
+Non-controlling interests can be measured either at cost (partial
+goodwill method) or at fair value (full goodwill method). The choice
+of method can be made on a case-by-case basis. The partial
+goodwill method is generally used within the E.ON Group.
+Intangible assets must be recognized separately if they are clearly
+separable or if their recognition arises from a contractual or other
+legal right. Provisions for restructuring measures may not be
+recorded in a purchase price allocation. If the purchase price paid
+exceeds the proportional share in the revalued net assets at the
+time of acquisition, the positive difference is recognized as
+goodwill. No goodwill is recognized for positive differences
+attributable to non-controlling interests. A negative difference is
+recognized in net income.
+Foreign Currency Translation
+The Company's transactions denominated in foreign currency are
+translated at the current exchange rate at the date of the
+transaction. At each balance sheet date monetary foreign currency
+items are adjusted to the exchange rate on the reporting date; any
+gains and losses resulting from fluctuations in the relevant
+currencies are recognized in net income and reported as other
+operating income and other operating expenses, respectively.
+Gains and losses from the translation of non-derivative financial
+instruments used in hedges of net investments in foreign
+operations are recognized in equity as a component of other
+comprehensive income. The ineffective portion of the hedging
+instrument is immediately recognized in net income.
+The functional currency as well as the reporting currency of E.ON
+SE is the euro. The assets and liabilities of Group companies with a
+functional currency other than the euro are translated using the
+mid-market exchange rates applicable on the balance sheet date.
+The income statements of foreign Group companies with a
+functional currency other than the euro are translated using annual
+average exchange rates. Differences arising from the application of
+both rates are recognized directly in equity.
+The following table depicts the movements in exchange rates for
+the periods indicated for major currencies of countries outside the
+European Monetary Union:
+Currencies
+British pound
+Danish krone
+€1, rate at
+-1,075
+-1
+-113
+Reserve for
+hedging
+other
+costs
+ment of
+financial
+instruments
+Hedging
+reserve
+Reserve for
+hedging
+costs
+Treasury
+shares
+Equity
+attributable
+to share-
+holders
+Non-
+controlling
+interests
+(before
+Reclassifi-
+reclassi- cation related
+Non-
+controlling
+of E.ON SE
+fication)
+to IAS 32
+interests
+Total
+3,217
+-2,436
+-2
+Hedging
+reserve/
+-60
+paid-in Retained
+capital earnings
+13,338
+Capital
+stock
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Consolidated Statement of Changes in Equity
+€ in millions
+Balance as of January 1, 2023
+Change in scope of consolidation
+Treasury shares repurchased/sold
+Capital increase
+Dividends
+Share additions/reductions
+Net additions/disposals from
+reclassification related to IAS 32
+Total comprehensive income
+Net income/loss
+Other Comprehensive Income
+Remeasurement of
+defined benefit plans
+Changes in accumulated other comprehensive income
+Currency translation
+adjustments
+Cash flow hedges
+Fair value
+measure-
+Additional
+2,641
+-113
+300
+-1,067
+-80
+-348
+382
+2
+38
+-532
+13
+-445
+130
+130
+-315
+517
+517
+243
+243
+760
+-865
+382
+2
+38
+-532
+13
+-962
+-80
+-8
+-80
+84
+15,923
+7,032
+-1,088
+5,944
+21,867
+In fiscal years 2017 to 2023, virtual shares were granted to
+members of the Management Board of E.ON SE and certain E.ON
+Group executives under the new E.ON Performance Plan. See the
+Compensation Report for more details on the structure of the plan.
+-1
+69
+69
+68
+-11
+25
+14
+14
+21
+21
+21
+-1,331
+-46
+-1,331
+-46
+-312
+-312
+-1,643
+84
+38
+Share-based payment plans issued in the E.ON Group are
+accounted for in accordance with IFRS 2, "Share-Based Payment”
+("IFRS 2").
+Unrealized gains and losses resulting from the initial measurement
+of derivative financial instruments at the inception of the contract
+are not recognized in income. They are instead deferred and
+recognized in income systematically over the term of the
+derivative. An exception to the accrual principle applies if
+unrealized gains and losses from the initial measurement are
+verified by quoted market prices, observable prices of other
+current market transactions or other observable data supporting
+the valuation technique. In this case the gains and losses are
+recognized in income.
+additional costs (net after income taxes), is deducted from E.ON
+SE's equity until the shares are retired, distributed or resold. If such
+treasury shares are subsequently distributed or sold, the
+consideration received, net of acquisition costs, any directly
+attributable additional transaction costs and associated income
+taxes, is recognized in additional paid-in capital.
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+144
+In a first step, E.ON determines the recoverable amount of a cash-
+generating unit on the basis of the fair value (less costs to sell)
+using generally accepted valuation procedures. This is based on
+the medium-term planning data of the respective cash-generating
+unit. Valuation is performed using the discounted cash flow
+method unless market transactions or valuations prepared by third
+parties for comparable assets which are higher-level in the fair
+Newly created goodwill is allocated to those cash-generating units
+expected to benefit from the respective business combination. The
+cash-generating units to which goodwill is allocated are generally
+equivalent to the operating segments, since goodwill is reported,
+and considered in performance metrics for controlling, only at that
+level. If goodwill cannot be allocated arbitrarily to individual cash-
+generating units but instead can only be allocated to groups of
+cash-generating units, the lowest level within the unit at which the
+goodwill is monitored for internal management purposes then
+includes several cash-generating units to which the goodwill
+relates but to which it cannot be allocated individually. Goodwill
+impairment testing is performed in euros, while the underlying
+goodwill is always carried in the functional currency.
+Goodwill is not amortized, but rather tested for impairment at the
+cash-generating unit level on at least an annual basis. The term
+cash-generating unit also always includes groups of cash-
+generating units and is referred to in simplified form as a cash-
+generating unit. Goodwill must also be tested for impairment,
+during the year, at the level of individual cash-generating units if
+events or changes in circumstances indicate that the recoverable
+amount of a particular cash-generating unit might be impaired,
+resulting in a shortfall in the carrying amount.
+Goodwill
+→ Consolidated Balance Sheets
+Goodwill and Intangible Assets
+Basic (undiluted) earnings per share is computed by dividing the
+consolidated net income attributable to the shareholders of the
+parent company by the weighted-average number of ordinary
+shares outstanding during the relevant period. At E.ON, the
+computation of diluted earnings per share is identical to that of
+basic earnings per share because E.ON SE has issued no potentially
+dilutive ordinary shares. The increase in the weighted-average
+number of shares outstanding resulted primarily from the issue of
+Earnings per Share
+Electricity and energy taxes are levied on electricity and natural
+gas delivered to retail customers and are calculated on the basis of
+a fixed tax rate per kilowatt-hour ("kWh"). This rate varies between
+different classes of customers. Electricity and energy taxes
+payable are deducted from sales revenues on the face of the
+income statement if those taxes are levied upon delivery of energy
+to the retail customer.
+Electricity and Energy Taxes
+Dividend income is recognized when the right to receive the
+distribution payment arises.
+c) Dividend Income
+Interest income is recognized pro rata using the effective interest
+method.
+b) Interest Income
+fundamental willingness to supply the energy. E.ON's sales
+transactions generally are not based on any material finance
+components. The average target payment period is generally
+between 10 and 30 days, in exceptional cases longer. Refunds to
+customers are an exception and are granted if the customer is
+disconnected from the power supply for an extended period of
+time. Cash bonuses or bonus payments to customers are
+recognized as refund liabilities and presented as a decrease in
+revenues uniformly over the term of the contract. As a rule, no
+warranties are granted in the Core Business. Warranties are only
+granted in the "Build & Sell" activities.
+Revenues from the sale of goods and services are measured using
+the transaction prices allocated to these goods and services. They
+reflect the value of the volume supplied, including an estimated
+value of the volume supplied to customers between the date of the
+last invoice and the end of the period. Monthly advance payments
+for B2C customers are generally determined on the basis of
+historical consumption data, taking into account current
+temperature effects. Peak payments are settled at the end of the
+settlement period. In B2B, a bottom-up approach is used to
+calculate individual rates. Contractually agreed variable
+consideration may be allocated to an entire contract or to specific
+components of a contract, which is the case with energy supply
+agreements with a base fee, for which the variable consideration is
+allocated in full to the actual supply of energy, but not to the
+treasury shares in E.ON SE under the voluntary employee stock
+purchase program.
+= Contents Q Search ← Back
+value hierarchy according to IFRS 13 are available. If needed, a
+calculation of value in use is also performed.
+If the carrying amount exceeds the recoverable amount, the
+goodwill allocated to that cash-generating unit is adjusted in the
+amount of this difference.
+Borrowing Costs
+Repair and maintenance costs that do not constitute significant
+replacement capital expenditure are expensed as incurred.
+Subsequent costs arising, for example, from additional or
+replacement capital expenditure are only recognized as part of the
+acquisition or production cost of the asset, or else—if relevant-
+recognized as a separate asset if it is probable that the Group will
+receive a future economic benefit and the cost can be determined
+reliably.
+Property, plant and equipment are tested for impairment
+whenever events or changes in circumstances indicate that an
+asset may be impaired. In such a case, property, plant and
+equipment are tested for impairment according to the principles
+prescribed for intangible assets in IAS 36. If the reasons for the
+impairment losses previously recognized under depreciation,
+amortization and impairment charges no longer exist, such
+impairment losses are reversed and recognized in income. Such
+reversal shall not cause the carrying amount to exceed the amount
+that would have resulted had no impairment taken place during
+the preceding periods.
+2 to 30 years
+5 to 60 years
+2 to 80 years
+Other equipment, fixtures, furniture and office equipment
+Technical equipment, plant and machinery
+Useful Lives of Property, Plant and Equipment
+Buildings
+The useful lives of the most significant asset classes of material
+property, plant and equipment are presented below:
+estimates are updated, for example, in view of technical, economic
+or legal circumstances.
+Property, plant and equipment are initially measured at acquisition
+or production cost, including decommissioning or restoration cost
+that must be capitalized, and are depreciated over the expected
+useful lives of the components, generally using the straight-line
+method, unless a different method of depreciation is deemed more
+suitable in certain exceptional cases. Useful lives are regularly
+tested for appropriateness and the underlying assumptions and
+Property, Plant and Equipment
+Under IFRS, expenditure on research is expensed as incurred, while
+costs incurred during the development phase of new products,
+services and technologies are to be recognized as assets when the
+specific criteria for recognition specified in IAS 38 are present. In
+the 2022 and 2023 fiscal years, E.ON capitalized costs for
+internally generated software and other technologies in this
+context.
+Research and Development Costs
+See Note 15 for additional information about goodwill and
+intangible assets.
+Both assets with definite and indefinite useful lives are impaired if
+the recoverable amount-the higher of fair value less costs to sell
+and value in use is lower than the carrying amount. If the
+reasons for the impairment losses previously recognized under
+depreciation, amortization and impairment charges no longer
+apply, these assets are written up to a maximum of the value that
+would have resulted if no impairment losses had been recognized
+during the preceding periods, taking into account scheduled
+depreciation.
+Intangible assets whose use has not yet started are not amortized.
+An impairment test is carried out at least once a year as well as
+whenever there are indications of impairment, either for the
+individual asset or at the level of the cash-generating unit. The
+useful life of an intangible asset with an indefinite life is tested
+annually to determine whether the indefinite life assumption
+continues to be justified.
+Internally generated intangible assets subject to amortization are
+related to software and are recognized as development costs.
+Intangible assets subject to amortization are generally amortized
+using the straight-line method over their expected useful lives. The
+useful lives of customer relationships and similar assets range
+between 2 and 50 years, and between 3 and 50 years for
+concessions, industrial property rights, licenses and similar rights,
+unless depreciation based on consumption reflects an appropriate
+level of depletion. This latter category includes software in
+particular. Useful lives and amortization methods are subject to
+regular verification. Intangible assets subject to amortization are
+tested for impairment whenever events or changes in
+circumstances indicate that such assets may be impaired.
+IAS 38, "Intangible Assets" ("IAS 38"), requires that intangible
+assets be amortized over their expected useful lives unless their
+lives are considered to be indefinite. Factors such as typical
+product life cycles and legal or similar limits on use are taken into
+account in the classification.
+Intangible Assets
+Impairment charges on the goodwill of a cash-generating unit and
+reported in the income statement under "Depreciation,
+amortization and impairment charges" may not be reversed in
+subsequent reporting periods.
+E.ON performs the annual testing of goodwill for impairment at
+the cash-generating unit level in the fourth quarter on October 1 of
+each fiscal year.
+Revenues are generally recognized when E.ON fulfills its
+performance obligation by transferring a promised good or service
+to a customer. An asset is deemed to be transferred when the
+customer obtains control of the asset. The majority of the E.ON
+Group's revenues are recognized over time because customers use
+these services when they are provided. For all such revenues,
+progress is measured using output-based methods, e.g., through
+the measurement of services that have already been provided or
+units that have been produced or delivered. For construction
+contracts, the stage of completion for overtime revenue
+recognition can be determined using input-based methods, such as
+the cost-to-cost method. The methods used appropriately reflect
+the pattern of transfer of goods to customers or provision of
+services for customers. The relatively subordinate point-in-time
+revenue recognition occurs primarily in the "Build & Sell" area on
+the installation of solar panels or charging stations and for so-
+called linear products, where a fixed amount of energy is provided
+to commercial customers at a specific point in time. Revenue is
+recognized when control is transferred to the customer, which
+means that no significant discretionary decisions are required.
+fees for the promotion of Renewables because these revenues are
+netted with the corresponding cost of materials (net disclosure).
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+11.12
+11.10
+SEK
+Swedish krona
+4.93
+4.95
+4.95
+4.98
+RON
+Romanian leu
+4.69
+4.54
+4.68
+4.34
+PLN
+Polish złoty
+10.10
+11.42
+10.51
+11.24
+NOK
+Norwegian krone
+7.45
+11.48
+Borrowing costs that arise in connection with the acquisition,
+construction or production of a qualifying asset from the time of
+acquisition or from the beginning of construction or production
+10.63
+CZK
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+143
+In the Energy Networks business, mainly earnings from the
+distribution of electricity and gas are included in revenues. E.ON
+makes the electricity and gas distribution network available to its
+customers. Significant parts of the fees generated from this
+distribution are regulated and are therefore subject to efficiency-
+based upper limits on revenue. Since the introduction of IFRS 15
+with effect from January 1, 2018, revenues no longer include the
+Revenues in the "Customer Solutions" segment are generated
+primarily from the sale of electricity and gas to retail customers,
+industrial and commercial customers and wholesale markets as
+well as from district heating and cooling. For contracts that do not
+provide for defined purchase quantities, the performance
+obligation consists in particular in the provision and availability of
+energy on demand at any time (standing ready obligation). The
+distribution of products and services used to increase energy
+efficiency and energy autonomy are also part of the "Customer
+Solutions" business. This primarily includes the energy
+infrastructure segments (here the performance obligations are
+primarily the installation of block-type thermal power stations and
+photovoltaic power stations, air-conditioning systems and heat
+pumps, wall insulation and window replacement), Future Energy
+Home (energy efficiency services, modernization of interior
+lighting, transformer maintenance, heating solutions, energy
+consulting services) and eMobility (eFleet service, installation and
+service of eChargers).
+a) Revenues
+Recognition of Income
+hyperinflationary economy in terms of the measuring unit current
+at the balance sheet date to reflect current purchasing power. As a
+result, among other things, non-monetary assets and liabilities are
+generally adjusted using a general price index and a gain or loss on
+the net monetary position is recognized. For additional information
+on the application of IAS 29 in fiscal year 2023, please refer to
+Note 16.
+Countries classified as hyperinflationary are required by IAS 29 to
+express their financial statements in the functional currency of the
+24.00
+24.57
+19.96 25.76 17.41
+400.87 381.85 391.29
+1.08
+1.05
+1.07
+32.65
+382.80
+1.11
+USD
+HUF
+Hungarian forint
+US dollar
+TRY
+Turkish lira
+24.12
+24.72
+Czech crown
+145
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+148
+Receivables, Contract Assets or Liabilities and Other Assets
+A receivable is recognized under IFRS 15 when the goods or
+services are delivered, provided that the right to consideration is
+unconditional, i.e., is only related to the passage of time. However,
+if the right to receive the consideration is contingent upon
+conditions other than the passage of time, a contract asset is
+recognized. A contract liability under IFRS 15 is recognized when
+consideration has been received for an existing IFRS 15 contract
+and the right to receive the goods or services still exists in full or in
+part. The contractual liability is only reversed with an effect on
+revenue when E.ON has performed the corresponding service. An
+The obligation to submit emission rights and similar certificates to
+the relevant authorities is recognized as a liability as of the balance
+sheet date. Measurement is based on the best estimate of the
+future settlement amount.
+Emission rights and similar certificates held under national and
+international emissions trading systems for the settlement of
+obligations are capitalized at cost at the date of acquisition and
+reported under current assets. Subsequent measurement is at
+amortized cost under IAS 38.
+Emission Rights and Similar Certificates
+Inventories are measured at the lower of acquisition or production
+cost and net realizable value. The cost of raw materials, finished
+products and goods purchased for resale is determined based on
+the average cost method. In addition to production materials and
+wages, production costs include material and production
+overheads based on normal capacity. The costs of general
+administration are not capitalized. Inventory risks resulting from
+excess and obsolescence are provided for using appropriate
+valuation allowances, whereby inventories are written down to net
+realizable value.
+Inventories
+intention to settle offsetting positions simultaneously and/or on a
+net basis.
+Non-derivative and derivative financial instruments are netted on
+the balance sheet if under IAS 32 E.ON has both an unconditional
+right-even in the event of the counterparty's insolvency-and the
+IFRS 7, "Financial Instruments: Disclosures" ("IFRS 7"), and IFRS
+13 both require comprehensive quantitative and qualitative
+disclosures about the extent of risks arising from financial
+instruments. Additional information on financial instruments is
+provided in Notes 31 and 32.
+Agreements to buy or sell non-financial items that are not
+classified as own-use contracts under IFRS 9 and that are required
+to be accounted for as derivatives must be recognized in the
+balance sheet at their fair value until they are realized. At the time
+of physical settlement of such energy delivery contracts, the
+electricity or gas volumes delivered are measured at the market
+price prevailing at the time of physical fulfillment and the
+difference between the contracted price and the market price is
+recognized in other operating income. In addition, any income from
+commodity derivatives arising from the difference between the
+contract price and the market price is recognized in other operating
+income. In exceptional cases, commodity derivatives are
+designated as hedging instruments of a cash flow hedge in
+accordance with IFRS 9, and the effective part of the value change
+is recognized in equity as a component of other comprehensive
+income.
+Embedded derivatives in own-use contracts must be separated
+from the host contract and accounted for as derivatives in
+accordance with IFRS 9 if the economic characteristics and risks of
+these derivatives are not closely related to those of the host
+contract. The contract is assessed upon conclusion to determine
+whether a derivative is required to be separated. A reassessment
+must be carried out if there is a significant change in the terms of
+the contract or in the context of business combinations.
+delivery. This "safety buffer" is reviewed on a regular basis and
+adjusted if necessary.
+They are not accounted for as derivative financial instruments at
+fair value through profit and loss (FVPL) in accordance with IFRS 9,
+but as pending transactions subject to the rules of IAS 37.
+Contracts that provide for net settlement and resales of the
+quantities to be delivered at a future date generally cannot, as a
+rule, be classified as own-use contracts. Based on forward-looking
+forecasts of delivery quantities specified by customer structure
+and portfolio management, contracts with physical settlement
+upon conclusion are recognized as derivatives for which
+settlement cannot be ensured within the scope of ordinary
+E.ON holds portfolios of sales and procurement contracts for
+electricity and gas supplies with various customer and supplier
+groups (commodity futures). Contracts (in particular sales and
+procurement contracts for electricity and gas) that are entered into
+for purposes of receiving or delivering non-financial items in
+accordance with E.ON's anticipated procurement, sale or use
+requirements, and held as such, are generally classified as own-
+use contracts.
+Changes in fair value of derivative instruments that are recognized
+in income are presented as other operating income or expenses.
+Gains and losses from interest-rate derivatives are included in
+interest income.
+E.ON currently uses hedges in the framework of cash flow hedges
+and hedges of a net investment.
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+149
+If E.ON SE or a Group company buys treasury shares of E.ON SE,
+the value of the consideration paid, including directly attributable
+Where shareholders of entities own statutory, non-excludable
+rights of termination (as in the case of German partnerships, for
+example), such termination rights require the reclassification of
+non-controlling interests from equity into liabilities under IAS 32.
+The liability is recognized at the present value of the expected
+settlement amount irrespective of the probability of termination.
+Changes in the value of the liability are reported within other
+operating income. Accretion of the share of the results of the non-
+controlling shareholders' share in net income is recognized in Net
+interest income/expense. In the event that non-controlling
+shareholders are entitled to a guaranteed dividend, this
+entitlement is recognized as a liability through reclassification from
+non-controlling interests in equity.
+E.ON has entered into purchase commitments to holders of non-
+controlling interests in subsidiaries. By means of these
+agreements, the non-controlling shareholders have the right to
+require E.ON to purchase their shares on specified conditions.
+None of the contractual obligations has led to the transfer of
+substantially all of the risk and rewards to E.ON at the time of
+entering into the contract. Under the anticipated acquisition
+method, however, the right of tender is accounted for as if it had
+already been exercised. Accordingly, the minority interests are
+derecognized-irrespective of the probability of the option being
+exercised-and at the same time a liability is recognized in the
+amount of the present value of the repurchase amount in
+accordance with IAS 32, "Financial Instruments: Presentation"
+("IAS 32"). The difference between this measurement and the
+carrying amount of the minority shareholders' equity to be
+derecognized is recognized in equity of E.ON SE shareholders. The
+accretion of the liability is recognized as interest expense. If a
+purchase commitment expires unexercised, the liability reverts to
+non-controlling interests. Any remaining difference is then
+recognized directly in equity in retained earnings.
+Equity Instruments
+The income and losses resulting from the measurement of
+components held for sale as well as the gains and losses arising
+from the disposal of discontinued operations, are reported
+separately on the face of the income statement under income/loss
+from discontinued operations, net, as is the income from the
+ordinary operating activities of these divisions. Prior-year income
+statement figures are adjusted accordingly. The relevant assets
+and liabilities are reported in a separate line on the balance sheet.
+The cash flows of discontinued operations are reported separately
+in the cash flow statement, with prior-year figures adjusted
+accordingly. However, there is no reclassification of prior-year
+balance sheet line items attributable to discontinued operations.
+Non-current assets that are held for sale either individually or
+collectively as part of a disposal group, or that belong to a
+discontinued operation, are no longer depreciated. They are
+instead accounted for at the lower of the carrying amount and the
+fair value less any remaining costs to sell. If this value is less than
+the carrying amount, an impairment loss is recognized in other
+operating expenses.
+Discontinued operations are components of an entity that are
+either held for sale or have already been sold and can be clearly
+distinguished from other corporate operations, both operationally
+and for financial reporting purposes. Additionally, the component
+of the entity classified as a discontinued operation must represent
+a major business line or a specific material geographic business
+segment of the Group or a subsidiary acquired exclusively for
+resale.
+items "Assets held for sale" and "Liabilities associated with assets
+held for sale" if they can be disposed of in their current condition
+and if there is sufficient probability of their disposal actually taking
+place. The reclassification to the separate balance sheet items is
+shown in the fixed asset movement schedule under Changes in
+scope of consolidation.
+Non-current assets and any corresponding liabilities held for sale
+and any directly attributable liabilities are recognized separately
+from other assets and liabilities in the balance sheet in the line
+Assets Held for Sale and Liabilities Associated with Assets
+Held for Sale and Discontinued Operations
+Liquid funds with an original maturity of less than three months
+are considered to be cash and cash equivalents in accordance with
+IAS 7. This also applies if they are merely contractually restricted,
+in which case the funds can technically be disposed of at any time
+at E.ON's discretion. However, if, as a result of a restriction, liquid
+funds cannot technically be disposed of at any time at E.ON's
+discretion, they are reported separately as restricted liquid funds.
+Liquid funds with an original maturity of more than three months
+are recognized under securities and fixed-term deposits provided
+that their maturities are not more than 12 months and therefore
+are recognized under non-current financial receivables and other
+financial assets.
+Liquid funds include checks, cash on hand, bank balances and
+current securities.
+Liquid Funds
+asset is recognized under other assets under IFRS 15 if the cost of
+obtaining the contract is expected to be recovered and the
+amortization period is longer than one year. Other assets are
+amortized over the estimated term of the contract depending on
+how the goods or services to which the costs relate are transferred
+to the customer. If the estimated term of the contract is less than
+one year, the costs are immediately recognized as an expense on
+the income statement. Trade receivables without a significant
+financial component are measured upon initial recognition at their
+transaction price. Valuation allowances, included in the reported
+net carrying amount, are provided for identifiable individual risks. If
+the loss of a certain part of the receivables is probable, valuation
+allowances are provided to cover the expected loss. Impairments
+are also recognized for expected future credit losses.
+= Contents Q Search ← Back
+→ Notes
+Share-Based Payment
+Consolidated Financial Statements
+147
+Non-derivative financial instruments are measured in accordance
+with IFRS 9, "Financial Instruments" ("IFRS 9"). They are
+recognized at fair value, including transaction costs, on the
+settlement date when acquired, provided they are not recognized
+at fair value through profit and loss.
+Non-Derivative Financial Instruments
+Financial Instruments
+Lease transactions in which E.ON acts as lessor are classified as
+operating or finance leases depending on the distribution of risks
+and rewards. If a lease is classified as an operating lease, E.ON
+recognizes the identified asset and recognizes the lease payments
+as other operating income on a straight-line basis over the lease
+term. For finance leases, the identified asset is derecognized and a
+receivable is recognized in the amount of the net investment value.
+Payments made by the lessee are treated as a reduction of the
+lease receivable or interest income. The income from such
+arrangements is recognized over the term of the lease using the
+effective interest method. Subleases are classified based on the
+right-of-use asset under the head lease.
+E.ON as Lessor
+existing options. The lease term therefore also includes periods
+covered by extension options if it is assumed with reasonable
+certainty that they will be exercised.
+E.ON ensures its operational flexibility when concluding leasing
+agreements through the use of extension and termination options.
+In determining the lease term, E.ON considers all facts and
+circumstances that provide an economic incentive to exercise
+A lease liability is recognized in the amount of the present value of
+the existing payment obligation. Where an arrangement provides
+for payments for lease components and non-lease components,
+the payments are not separated using the practical expedient
+under IFRS 16.15 (with the exception of real estate leases); the
+lease liability is measured taking into account the total amount of
+the payments. Present value is determined by discounting with an
+incremental borrowing rate that is equivalent in terms of risk and
+term if the implicit interest rate cannot be determined. The liability
+is subsequently measured using the effective interest method. A
+right-of-use asset corresponding with the lease liability is
+recognized in the amount of the present value of the lease
+payments. The initial recognition amount of the right-of-use asset
+is increased by the amount of the initial direct costs, as well as
+expected costs for asset retirement obligations; prepayments
+made are included and lease incentives received are deducted from
+the initial recognition amount. A right-of-use asset is subsequently
+measured at amortized cost. Depreciation is carried out on a
+straight-line basis over the shorter of the lease term or the useful
+life of the identified asset. An impairment test is carried out in
+accordance with IAS 36 if events or changed circumstances
+indicate an impairment.
+Transactions in which E.ON acts as a lessee are accounted for on
+the basis of the right-of-use model. The recognition exemption of
+IFRS 16.5 is used for low-value leases and for agreements with a
+lease term of less than 12 months (short-term leases).
+Accordingly, there is no recognition of the right-of-use asset and
+the lease liability. Instead, the payments are recognized on a
+straight-line basis as an expense. In line with internal management
+practice, intragroup leases are recognized as current expenses in
+the segment reporting.
+E.ON as Lessee
+Lease agreements are accounted for in accordance with IFRS 16,
+"Leases" ("IFRS 16"). A lease is an agreement that conveys the
+right to use an identified asset for a specified period in exchange
+for consideration. In certain cases, agreements that are not
+concluded in the form of a rental or lease agreement (e.g., physical
+power purchase agreements) are also reviewed to determine
+whether they contain a lease in accordance with IFRS 16. E.ON is
+party to some agreements in which it is the lessor and to others in
+which it is the lessee.
+Consolidated Financial Statements
+Government grants are recognized at fair value if the Group
+satisfies the necessary conditions for receipt of the grant and if it is
+highly probable that the grant will be issued.
+Grants related to income are also generally recognized as deferred
+income on the balance sheet. The liability item is reversed over the
+period necessary to match the corresponding income effects that
+are intended to compensate for the government grants. Grants are
+recognized in the same way as subsidized items.
+Government investment subsidies do not reduce the acquisition
+and production costs of the respective assets; they are instead
+reported on the balance sheet as deferred income. They are
+recognized in income on a straight-line basis over the associated
+asset's expected useful life.
+The Group receives grants for assets and grants related to income.
+Government Grants
+until the conclusion of all material work required to prepare the
+qualifying asset for its intended use or sale are capitalized and
+subsequently amortized alongside the related asset. In the case of
+a specific financing arrangement, the respective borrowing costs
+incurred for that particular arrangement during the period are
+used. For non-specific financing arrangements, a financing rate
+uniform within the Group of 2.66 percent was applied for 2023
+(2022: 2.59 percent). Other borrowing costs are expensed.
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Financial assets are classified as financial assets measured at
+amortized cost (AmC), financial assets measured at fair value
+through other comprehensive income (FVOCI) and financial assets
+measured at fair value through profit and loss (FVPL) based on the
+business model and the characteristics of the cash flows.
+E.ON Integrated Annual Report 2023
+If a financial asset is held for the purpose of collecting contractual
+cash flows and the cash flows of the financial asset represent
+exclusively interest and principal payments, then the financial
+asset is measured at amortized cost (AmC).
+E.ON Integrated Annual Report 2023
+To hedge the foreign currency risk arising from the Company's net
+investment in foreign operations, derivative as well as non-
+derivative financial instruments are used. Gains or losses due to
+changes in fair value and from foreign currency translation are
+recognized within equity, as a component of other comprehensive
+income, under currency translation adjustments.
+The hedging result is reclassified into income during the period in
+which the cash flows of the hedged asset are recognized in
+income. The result is recognized immediately in income if it
+becomes probable that the hedged underlying transaction will no
+longer occur. For hedging instruments used to establish cash flow
+hedges, the change in fair value of the ineffective portion is
+recognized immediately in the income statement to the extent
+required.
+If a derivative instrument qualifies as a cash flow hedge under IFRS
+9, the effective portion of the hedging instrument's change in fair
+value is recognized in equity (as a component of other
+comprehensive income) and reclassified into income in the period
+or periods during which the cash flows of the transaction being
+hedged affect income. In accordance with IFRS 9, the currency
+basis spread (hedging costs) will be separated from the hedging
+instrument and reported separately as an excluded component in
+accumulated other comprehensive income in the reserve for
+hedging costs as a component of equity.
+For qualifying fair value hedges, the change in the fair value of the
+derivative and the change in the fair value of the hedged item that
+is due to the hedged risk(s) are recognized in income.
+arises only if the measurement parameters of the hedged item and
+the hedging instrument differ from one another or in the case of
+subsequent designation of the hedging instrument. All
+components of derivative gains and losses from the measurement
+of hedge ineffectiveness are taken into consideration during
+recognition.
+E.ON has designated some of these derivatives as part of a
+hedging relationship. IFRS 9 sets requirements for the
+admissibility of hedging instruments and the underlyings, the
+formal designation and documentation of hedging relationships,
+the hedging strategy, as well as fulfilling requirements of
+effectiveness in order to qualify for hedge accounting. The
+designated hedged items and hedging instruments are subject to
+the same risk. This economic relationship ensures that the
+amounts of the hedged items and hedging instruments are offset
+against each other and that the hedging relationships are therefore
+effective. The hedge ratio of the hedges is 1:1. Ineffectiveness
+As part of fair value measurement in accordance with IFRS 13, the
+counterparty risk is also taken into account for derivative financial
+instruments. E.ON determines this risk based on a portfolio
+valuation in a bilateral approach for both own credit risk (debt
+value adjustment) and the credit risk of the corresponding
+counterparty (credit value adjustment). The counterparty risks
+thus determined are allocated to the individual financial
+instruments by applying the relative fair value method on a net
+basis.
+The instruments primarily used are foreign currency forwards and
+cross-currency interest rate swaps, as well as interest rate swaps.
+In commodities, the instruments used primarily include physically
+and financially settled forwards and options related to electricity
+and gas.
+Derivative Financial Instruments and Hedging
+Derivative financial instruments and separated embedded
+derivatives are measured at fair value as of the trading date at
+initial recognition. Under IFRS 9, they are classified as at fair value
+through profit and loss (FVPL) as long as they are not a component
+of a hedge accounting relationship. Gains and losses from changes
+in fair value are immediately recognized in net income.
+discount remaining until maturity. The premium or discount is
+recognized in financial results over its term.
+Non-derivative financial liabilities (including trade payables) within
+the scope of IFRS 9 are measured at amortized cost, using the
+effective interest method. Initial measurement takes place at fair
+value, with transaction costs included in the measurement. In the
+subsequent measurement, the residual carrying amount is
+adjusted by the amortization and accretion of any premium or
+The expected future credit loss is calculated by multiplying the
+probability of default by the carrying amount of the financial asset
+(exposure at default) and the expected loss ratio (loss given
+default). For information on the treatment of impairments under
+IFRS 9, please see Note 32.
+Impairments of financial assets are both recognized for losses
+already incurred and for expected future credit defaults. The
+amount of the impairment loss calculated in the determination of
+expected credit losses is recognized on the income statement.
+Debt instruments that do not exclusively serve to collect
+contractual cash flows or to both generate contractual cash flows
+and sales revenue, or whose cash flows do not exclusively consist
+of interest and principal payments are measured at fair value
+through profit and loss (FVPL). For equity instruments that are not
+held for trading purposes, E.ON does not exercise the FVOCI
+option.
+Unrealized gains and losses from financial assets measured at fair
+value through other comprehensive income (FVOCI), net of related
+deferred taxes, are reported as a component of equity (other
+comprehensive income) until realized. Realized gains and losses
+are determined by analyzing each transaction individually.
+A financial asset is measured at fair value through other
+comprehensive income (FVOCI) if it is used both to collect
+contractual cash flows and for sales purposes and the cash flows
+of the financial asset consist exclusively of interest and principal
+payments.
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+146
+Leasing
+7.45
+7.44
+Amendments to IAS 8-Definition of Accounting Estimates
+156
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+= Contents Q Search ← Back
+(6) Revenues
+At €93.7 billion, revenues in 2023 were roughly -€22.0 billion
+lower than in the previous year.
+The growing regulatory asset base in the network area and the
+price increases passed on to customers led to an increase in
+revenues. In contrast, and more than offsetting this development,
+there was a significant reduction due to price developments on the
+commodity markets. This was due to forward contracted sales
+volumes, which are accounted for as a derivative in accordance
+with IFRS 9. The resulting sales must be reported at market prices
+at the time of physical delivery. The decreased revenues are mainly
+related to income as well as expenses from derivative financial
+instruments, which are reported under other operating income.
+Revenue realized in the current reporting period and resulting from
+performance obligations that had already been fulfilled in whole or
+in part in previous reporting periods amounted to €0.8 billion
+(2022: €0.7 billion). As of December 31, 2023, the total amount of
+performance obligations already contracted but still outstanding
+(excluding expected contract extensions and expected new
+contracts) amounted to €30.8 billion (December 31, 2022:
+€43.6 billion). The greater part of these performance obligations is
+expected to be fulfilled within the next three years. In the E.ON
+Group, revenues are mainly realized over time. Revenues that were
+not recognized under IFRS 15 but under other accounting
+standards totaled €5.4 billion in fiscal 2023 (2022: €5.1 billion). Of
+this, €5.2 billion was attributable to income-related government
+grants from the public sector (2022: €1.6 billion).
+Revenues are broken down in detail into intragroup and external
+revenues in the segment information (Note 35). They are also
+broken down into key regions and technologies. The overview also
+shows the effect of revenues on operating cash flow before
+interest and taxes.
+(7) Own Work Capitalized
+Own work capitalized amounted to €1,334 million in 2023 (2022:
+€997 million) and resulted primarily from capitalized work
+performed in connection with ongoing and completed IT projects
+and network assets.
+(8) Other Operating Income and Expenses
+The table below provides details of other operating income for the
+periods indicated:
+Other Operating Income
+€ in millions
+Income from exchange rate differences
+Gain on derivative financial instruments
+(including currency derivatives)
+Gain on disposal of non-current assets and
+securities
+Gain on the reversal of provisions
+Miscellaneous
+Total
+2023
+578
+2022
+853
+Income from discontinued operations in the amount of €61 million
+resulted from a transaction already completed in 2005. In
+accordance with the purchase agreement, a one-time purchase-
+price adjustment was made after an audit of the divested company
+was completed in the first quarter of 2023, and the contractual
+clause now took effect.
+37,273
+Discontinued Operations
+Deconsolidation results are generally allocated to other operating
+Deferred tax liabilities
+Total acquired net assets
+Calculation of Goodwill
+€ in millions
+Acquisition costs / pro rata enterprise value
+Total acquired net assets
+Minority interests
+Goodwill
+March 31,
+2023
+261
+177
+33
+-256
+-68
+147
+March 31,
+2023
+137
+-147
+55
+45
+The acquired fixed assets mainly consist of technical equipment
+and machinery with a fair value of €221 million.
+The fair value of the receivables and other assets acquired is
+€67 million and corresponds primarily to the gross amounts. These
+mainly consist of trade receivables (€58 million).
+The 37.3 percent non-controlling interest is measured using the
+partial goodwill method for identified pro rata net assets. Goodwill
+mainly reflects the value of assets that may not be recognized
+separately, such as the workforce and expected synergies.
+No significant transaction costs were incurred for the acquisition
+of control over AggerEnergie GmbH.
+The acquisition contributed €0.2 billion to revenue and €15 million
+to consolidated net income from April 1, 2023, to December 31,
+2023. If the acquisition had been completed by January 1, 2023,
+the revenue contribution of AggerEnergie GmbH would have been
+around €0.1 billion and the contribution to consolidated net
+income would have been in the low single-digit million euro range.
+The purchase price allocation to the identified assets and liabilities
+was made on a provisional basis due to the ongoing process of
+preparing and reviewing the underlying financial information.
+Consequently, changes to the allocation of the purchase price to
+the individual assets and liabilities may still be made within the
+agreed adjustment period of up to 12 months.
+Closing of the Future Consolidation Agreement by ZSE
+shareholders
+On April 8, 2022, the shareholders of Západoslovenská energetika
+a.s. ("ZSE") and Východoslovenská energetika Holding a.s.
+("VSEH"), E.ON SE and the Slovak Republic, concluded a Future
+Consolidation Agreement to combine ZSE and the VSEH Group.
+The agreement provides, among other things, for 100 percent of
+the VSEH shares to be transferred to ZSE, the sale of all
+subsidiaries of VSEH to ZSE, and the implementation of corporate
+law changes at VSEH.
+The transfer of VSEH shares to ZSE results in ZSE being VSEH's
+sole shareholder (and thus also shareholder of the VSEH
+subsidiaries). The ownership interests in ZSE remains unchanged;
+that is, E.ON has a 49 percent stake in ZSE and the Slovakian state
+a 51 percent stake. The new ZSE shareholder agreement
+essentially corresponds to the shareholder agreement that has
+been in force before. After closing of the agreement, ZSE continues
+to be accounted for using the equity method in E.ON's
+Consolidated Financial Statements, while the business activities of
+VSEH, which was previously fully consolidated, are now integrated
+in this joint venture.
+The transaction was originally expected to be closed by the end of
+2022. Accordingly, the VSEH Group has been presented as a
+disposal group in accordance with IFRS 5 since December 31,
+2021. The last condition precedent was fulfilled on June 12, 2023.
+On November 23, 2023, all closing conditions were formally met,
+in particular the signing of the relevant documents such as the
+agreement on the transfer and contribution of the shares and the
+amended and restated shareholders' agreement as well as
+registration by the Slovak Central Depositary of Securities of the
+transfer of all of the VSEH's shares to ZSE and publication of all
+relevant documents with Central Register of Contracts. As of this
+date, the VSEH Group was deconsolidated and the value of the
+investment in ZSE was increased accordingly by the fair value of
+these VSEH shares.
+The deconsolidation of VSEH resulted in a gain of €15 million. As
+the shares of VSEH were transferred to the ZSE, there was no
+gain/loss on the revaluation of a remaining stake in VSEH. The
+divested assets (before deduction of minority interests) consisted
+of €1,001 million in non-current assets and €415 million in current
+assets. In addition, goodwill of €104 million was allocated.
+Outgoing liabilities (before deduction of minority interests)
+consisted of €738 million in liabilities, €15 million in provisions and
+€127 million in deferred tax liabilities.
+income.
+70,234
+151
+999
+53,345
+66,663
+Taxes other than income taxes
+108
+111
+Loss on disposal of
+non-current assets and securities
+159
+223
+Impairments of financial assets
+984
+Miscellaneous
+(including currency derivatives)
+4,234
+59,548
+660
+3,555
+71,736
+Other operating expenses of €59,548 million were
+€12,188 million lower than in the previous year (2022: €71,736
+million). The decrease is due to the €13,318 million decline in
+expenses from derivative financial instruments (including currency
+derivatives) to €53,345 million (2022: €66,663 million). Similar to
+the development in income from derivative financial instruments,
+this was mainly due to price developments on the commodity
+markets over the course of the year.
+Expenses from commodity derivatives amounted to €52,026
+million in 2023 (2022: €64,615 million). In addition, expenses
+from derivative financial instruments (including currency
+derivatives) includes realized expenses from currency derivatives
+of €1,312 million (2022: €1,473 million).
+Expenses from exchange rate differences in the amount of
+€718 million increased by €194 million compared with the
+previous year (€524 million).
+Foreign currency translation effects within other operating
+expenses amounted to €707 million (2022: €1,880 million).
+Miscellaneous other operating expenses includes third-party
+services and passthrough charges in the amount of €1,204 million
+(2022: €981 million). Also included are IT expenses in the amount
+of €654 million (2022: €480 million), advertising and marketing
+expenses in the amount of €279 million (2022: €177 million, as
+well as consulting and audit fees in the amount of €217 million
+(2022: €155 million). Additionally reported under this item are
+office expenses in the amount of €121 million (2022:
+€104 million), repair expenses in the amount of €110 million
+(2022: €89 million), travel expenses in the amount of €98 million
+(2022: €71 million), contributions and fees in the amount of
+€67 million (2022: €64 million), insurance premiums in the
+amount of €66 million (2022: €56 million), and rents and leases in
+the amount of €60 million (2022: €54 million).
+(9) Cost of Materials
+The principal components of expenses for raw materials and
+supplies and for purchased goods are the purchase of gas and
+electricity. Fuel supply is also included in this line item in the
+previous year. Expenses for purchased services consist primarily of
+network usage charges and maintenance costs.
+Cost of Materials
+€ in millions
+2023
+Total
+Loss on derivative financial instruments
+exchange rate differences
+524
+29
+16
+857
+38,888
+1,091
+73,193
+Other operating income decreased by €34,305 million to
+€38,888 million (2022: €73,193 million).
+Income and expenses from derivative financial instruments
+(including currency derivatives) relate to fair value measurement
+under IFRS 9.
+Income from derivative financial instruments decreased year-on-
+year by €32,961 million to €37,273 million (2022:
+€70,234 million), mainly due to price developments on the
+commodity markets. Commodity derivatives generated income in
+the amount of €35,931 million (2022: €68,302 million). In
+addition, income from derivative financial instruments (including
+currency derivatives) includes realized income from currency
+derivatives of €1,174 million (2022: €1,632 million).
+Conversely, income from currency translation effects decreased by
+€275 million to €578 million. Corresponding items from derivative
+financial instruments (including currency derivatives) are included
+in other operating expenses. The effects of foreign currency
+translation within other operating income amounted to
+€611 million (2022: €2,143 million).
+The gain on the disposal of property, plant and equipment and
+securities were €848 million below prior year. In 2022 there were
+gains on the disposal of Westconnect GmbH in the amount of
+€810 million. Gains were realized on the sale of securities in the
+amount of €51 million (2022: €26 million).
+Miscellaneous other operating income decreased by €234 million
+compared with the prior year.
+Miscellaneous other operating income also includes items such as
+transactions other than ordinary business activities in the amount
+of €105 million (2022: €212 million), income from contract
+penalties of €67 million (2022: €83 million), rental and lease
+income of €59 million (2022: €58 million) and income from the
+reversal of investment grants in the amount of €25 million (2022:
+€104 million).
+157
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+The following table provides details of other operating expenses
+for the periods indicated:
+Other Operating Expenses
+€ in millions
+Loss from
+2023
+2022
+718
+Provisions and liabilities
+Deferred tax assets
+Other assets
+Non-current assets
+The IASB and the IFRS IC have issued the following additional
+standards and interpretations. E.ON does not apply these rules
+because their application is not yet mandatory. Currently these
+amendments are not expected to have a material impact on E.ON's
+Consolidated Financial Statements:
+IASB and IFRS IC Pronouncements
+Amendments to IFRS 16-Lease Liability in a Sale and
+Leaseback
+Amendments to IAS 1-Classification of Liabilities as
+Current or Non-Current
+Amendments to IAS 1-Classification of Liabilities as
+Current or Non-Current-Deferral of Effective Date
+Amendments to IAS 1 -Non-Current Liabilities with
+Covenants
+Amendments to IAS 7 and IFRS 7-Supplier Finance
+Arrangements
+Amendments to IAS 21-Clarify the accounting when there
+is a lack of exchangeability
+Explanation
+Clarification that when the seller/lessee is to subsequently
+measure the lease in such a way that the (changed) lease payments
+are not recorded as a profit or loss for the retained right-of-use
+asset.
+Clarification that the classification of liabilities as current or non-
+current is based on the existing rights of the entity at the reporting
+date.
+Clarification of how conditions with which an entity must comply
+within 12 months after the reporting period affect the classification
+of a liability.
+Transposed
+into EU law
+Yes
+To be applied by
+E.ON from
+01/01/2024
+Expected impact on the presentation of E.ON's net
+assets, financial position and results of operations
+No material impact.
+Yes
+01/01/2024
+No material impact.
+Addition of supplemental disclosure requirements for companies to No
+provide qualitative and quantitative information about financial
+agreements with suppliers.
+01/01/2024*
+No impact.
+Clarifying when a currency is exchangeable and how to determine
+the exchange rate when it is not.
+No
+01/01/2025*
+No impact.
+* If not yet endorsed by the EU the date of first-time adoption scheduled by the IASB is assumed to apply.
+154
+Standards, Interpretations and Amendments Issued But
+Not Yet Applicable
+E.ON Integrated Annual Report 2023
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Explanation
+The new IFRS 17 standard governs the accounting for insurance
+contracts and supersedes IFRS 4.
+To be applied by E.ON Expected impact on the presentation of E.ON's net assets,
+from
+financial position and results of operations
+No material impact.
+01/01/2023
+The amendment concerns the transitional provisions for the initial joint 01/01/2023
+application of IFRS 17 and IFRS 9.
+No impact.
+Clarification that an entity must disclose all material (formerly
+"significant") accounting policies. The main characteristic of these items
+01/01/2023
+No material impact.
+is that, together with other information included in the financial
+statements, they can influence the decisions of primary users of the
+financial statements.
+Clarification with regard to the distinction between changes in
+accounting policies (retrospective application) and changes in
+accounting estimates (prospective application).
+01/01/2023
+No material impact.
+Amendments to IAS 12-Deferred Tax Related to Assets and Liabilities
+arising from a Single Transaction
+Amendments to IAS 12-International Tax Reform-Pillar 2-Model
+Rules
+Clarification that the initial recognition exemption of IAS 12 does not
+apply to leases and decommissioning obligations. Deferred tax is
+recognized on the initial recognition of assets and liabilities arising from
+such transactions.
+The amendment contains a temporary, mandatory exception to the
+recognition of deferred taxes resulting from the implementation of the
+Pillar 2 model rules of the OECD. In addition, in periods in which
+legislation implementing the Pillar 2 model rules has been passed but
+has not yet entered into force, the amendment requires the disclosure
+of information that is known or that can be reliably estimated
+(quantitative or qualitative) so that users of financial statements can
+assess the impact of the Pillar 2 regulations or the income taxes that
+result from it.
+01/01/2023
+No impact.
+01/01/2023
+No material impact (see Note 11).
+153
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+2022
+Consolidated Financial Statements
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+143
+309
+5
+4
+9
+7
+18
+25
+164
+129
+293
+In 2023, a total of 53 domestic and 10 foreign associated
+companies were consolidated under the equity method (2022: 54
+domestic companies and 10 foreign companies). One domestic
+company reported as joint operations was presented pro rata on
+the Consolidated Financial Statements (2022: one domestic
+company).
+(5) Material Acquisitions, Disposals and Disposal
+Groups in 2023
+Consortium Agreement with RheinEnergie
+On June 29, 2021, Westenergie AG, a fully consolidated
+subsidiary of the E.ON Group, entered into a consortium
+agreement with Rhein Energie AG. The agreement was finalized
+effective March 31, 2023, after the conditions imposed by the
+Bundeskartellamt (German Federal Cartel Office) were met. With
+the closing of the transaction, Westenergie and RheinEnergie
+merged shareholdings in individual municipal utilities into rhenag
+Rheinische Energie Aktiengesellschaft ("rhenag"). It also resulted in
+the initial consolidation of AggerEnergie GmbH within the E.ON
+Group. Westenergie also transferred 20 percent of the shares of
+Stadtwerke Duisburg, which, pursuant to IFRS 5, was previously
+included in E.ON's Consolidated Financial Statements as an
+associated company, to Rhein Energie, which increased its share in
+RheinEnergie from 20 to 24.2 percent.
+The acquisition cost of a business combination is generally
+determined based on the fair values of the assets transferred as
+consideration, the liabilities assumed and the equity interests
+issued by the acquirer at the acquisition date. Because the shares
+in AggerEnergie were acquired in the course of a complex swap
+transaction, in accordance with IFRS 3.33, no determination was
+carried out at the acquisition date of the rhenag shares transferred
+in the framework of the overall swap transaction. Instead, the
+shares in AggerEnergie acquired were measured as of the
+acquisition date of March 31, 2023. The acquisition cost of the
+62.7 percent shareholding determined on this basis amounts to
+€137 million. Accordingly, there is no need to allocate the
+consideration to major classes of consideration in accordance with
+IFRS 3.B64(f). The non-cash swap and the different value
+transfers to rhenag reduce the shareholding in rhenag from 66.67
+percent to 45.56 percent. Contingent consideration and
+compensatory assets were not included in the agreement.
+155
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+The provisional calculations of the fair values of the identifiable
+assets acquired, liabilities assumed and goodwill are as follows:
+Identifiable Net Assets Acquired
+€ in millions
+166
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+20
+4
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+(3) Impact of the War in Ukraine and the Development
+of the Commodity Markets
+The consequences of the war in Ukraine continue to have an
+impact on E.ON's business, primarily due to volatile commodity
+prices. Following the sharp rise in commodity prices seen in the
+previous year, they fell over the course of the reporting year but
+remained at a significantly higher level. This resulted in a declining
+market valuation of sales and procurement transactions
+recognized as derivatives in the balance sheet, as well as declines
+in these partially offsetting provisions for onerous contracts. The
+impacts are explained in more detail in the sections "Earnings
+Situation," "Financial Situation" and "Asset Situation" of the
+Management Report.
+The situation assessable at the balance-sheet date with regard to
+the war in Ukraine indicated no triggering events that would
+necessitate impairment charges on non-current assets under IAS
+36, in particular goodwill, other intangible assets, and property,
+plant and equipment.
+In fiscal year 2023, high energy prices due to the war in Ukraine
+affected the ability of customers to pay significantly increased
+energy bills and led to additional impairment losses on trade
+receivables (see also the comments in Note 18).
+Potential balance sheet effects of the future development of the
+war in Ukraine are being analyzed on an ongoing basis.
+The Europe-wide energy crisis has prompted the governments of
+some countries in which E.ON operates to adopt various measures
+to soften the impact on the end consumer. Some of these
+measures may directly impact E.ON, such as the introduction of
+price caps or the elimination of excess earnings. In particular, the
+price caps could have a direct impact on E.ON's revenues under
+IFRS 15. However, these charges did not have a material effect on
+E.ON's earnings in the 2023 financial year. For example, negative
+effects from price caps were primarily offset by government
+grants, which were in part recognized as grants related to income
+in accordance with IAS 20 (see the comments in Notes 6 and 9).
+There are also government measures that do not directly affect
+E.ON, such as the temporary assumption of energy costs for the
+end consumer.
+(4) Scope of Consolidation
+The number of consolidated companies changed as follows in
+2023:
+Scope of Consolidation
+Consolidated companies
+as of January 1, 2022
+Additions
+Disposals/Mergers
+Consolidated companies
+as of December 31, 2022
+Additions
+Disposals/Mergers
+Consolidated companies
+as of December 31, 2023
+Domestic
+Foreign
+Total
+166
+156
+322
+4
+3
+7
+16
+Expenses for raw materials and supplies and
+for purchased goods
+On February 24, 2022, Russia launched a military attack on
+Ukraine. This invasion is having far-reaching economic
+consequences, and direct impacts-particularly in the energy
+sector are being experienced, which are also explained further in
+the "Macroeconomic and Industry Environment" section of the
+Management Report.
+93,141
+31.0
+162
+8.1
+-95
+-4.8
+-173
+-8.6
+475
+23.8
+-61
+-3.1
+-1,264
+619
+-63.3
+2.3
+59
+2.9
+-13
+-0.6
+-245
+-12.3
+Total income taxes
+-598
+-245
+The income tax rate of 31 percent (2022: 31 percent) applicable in
+Germany is composed of corporate income tax (15 percent), trade
+tax (15 percent) and the solidarity surcharge (1 percent). The
+income tax rate of 31 percent corresponds to the tax rate
+applicable to E.ON SE for 2023. The differences from the effective
+tax rate are reconciled as follows:
+Continuing operations generated tax income of €598 million in the
+reporting year (2022: tax income of €245 million). This
+corresponds to a theoretical tax rate of -592 percent. This was
+primarily due to market valuations of commodity derivatives in
+various countries with different tax rates, which resulted in a
+higher tax rate. In addition, the tax rate was influenced by changes
+in the value of deferred tax assets as well as taxes for previous
+years.
+46
+100.0
+in %
+-598
+-178
+-1,214
+Tax effects of income taxes related to other periods
+Other
+-31.0
+-4
+-3.6
+Effective income taxes/tax rate
+-591.9
+2023
+in %
+€ in millions
+101
+100.0
+31
+-203
+30
+-91
+31.0
+-200.8
+-90.4
+€ in millions
+1,997
+2022
+1111
+234
+-618
+156
+-31
+160
+E.ON Integrated Annual Report 2023
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+The Consolidated Statement of Income is classified using the
+nature of expense method, which is also applied for internal
+purposes.
+Critical Accounting Estimates and Assumptions; Critical
+Judgments in the Application of Accounting Policies
+The preparation of the Consolidated Financial Statements requires
+management to make estimates and assumptions that may both
+influence the application of accounting principles within the Group
+and affect the measurement and presentation of reported figures.
+Estimates are based on past experience and on current knowledge
+obtained on the transactions to be reported. Actual amounts may
+differ from these estimates.
+The estimates and underlying assumptions are reviewed on an
+ongoing basis and are adjusted as necessary in the periods in
+which they were recognized.
+Estimates are particularly necessary for the measurement of the
+value of property, plant and equipment and of intangible assets,
+specifically in connection with purchase price allocations and
+determining the useful life, the recognition and measurement of
+deferred tax assets, the accounting treatment of provisions for
+pensions and other provisions (in particular provisions for the
+decommissioning of nuclear power plants and provisions for
+contingent losses from pending transactions involving the sale of
+electricity and gas), for impairment testing in accordance with IAS
+36, as well as the determination of the fair value of certain
+financial instruments, as well as for the application of IFRS 15, and
+here in particular for the estimation of the value of electricity and
+gas units supplied, including the estimated values for units
+between the last settlement and the end of the period. Estimates
+are also factored in when applying IFRS 16, namely in connection
+with the determination of lease terms and the calculation of the
+discount rate, and in part when applying IFRS 9 in connection with
+the determination of expected future credit losses.
+The application of accounting policies requires judgments to be
+made that may affect the amounts recognized in the financial
+statements. Judgments are relevant, for example, when assessing
+whether an item is to be classified in accordance with IFRS 5. Here,
+management assesses whether a disposal is considered highly
+probable. Further judgments may be necessary in assessing
+whether E.ON controls, jointly controls with other investors, or can
+significantly influence an entity.
+Specifically, management assesses here what the significant
+activities of the Company are, i.e., which activities have a material
+impact on the returns of the investee. The list of shareholdings
+(see Note 38) provides information on the form of inclusion in the
+consolidated financial statements of certain investees whose share
+of voting rights indicates a different form of inclusion.
+The underlying principles used for estimates and judgments in the
+named topics and in additional relevant topics are outlined in the
+respective sections.
+Critical judgment is required in the recognition of risks arising from
+claims asserted by customers for the restitution of amounts
+collected through price adjustment measures (provisions in
+connection with price adjustments). Judgment is also required
+when assessing the potential recognition of assets or liabilities and
+their classification as contingent assets or liabilities (see Note 29).
+In addition, estimates and judgments continue to be subject to
+increased uncertainty, in particular due to the significant volume
+and price volatilities on the energy markets and due to the war in
+Ukraine. The actual amounts may differ from the estimates and
+judgments made; changes may have a material impact on E.ON's
+net assets, financial position and results of operations. When the
+estimates and judgments were updated, all available information
+on expected economic developments and country-specific
+government measures was taken into account on the reporting
+date. It is difficult to predict the duration and the extent of the
+impact on assets, liabilities, earnings and cash flows of the war in
+Ukraine. More information on the impact of the war in Ukraine on
+the E.ON Group is presented in Note 3.
+152
+E.ON Integrated Annual Report 2023
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+(2) New Standards, Interpretations and Amendments
+Standards, Interpretations and Amendments
+Applicable for the First Time in 2023
+The EU has transposed these amendments into European law. The
+amendments will be applied for fiscal years beginning on or after
+January 1, 2023. The amendments have no material impact on
+E.ON's Consolidated Financial Statements.
+IASB and IFRS IC Pronouncements
+IFRS 17 "Insurance Contracts" including Amendments to IFRS 17
+Amendment to IFRS 17-Initial Application of IFRS 17 and IFRS 9-
+Comparative Information
+Amendments to IAS 1 and IFRS Practice Statement 2-Disclosure of
+Accounting Policies
+47,968
+In accordance with IAS 1, "Presentation of Financial Statements,"
+the Consolidated Balance Sheets have been prepared using a
+classified balance sheet structure. Assets that will be realized
+within 12 months of the reporting date, as well as liabilities that
+are due to be settled within one year of the reporting date are
+generally classified as current.
+-492
+Structure of the Consolidated Balance Sheets and
+Statement of Income
+Segment Information
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+amortized over the expected remaining useful lives of the assets,
+and the provision is accreted to its present value on an annual
+basis. Advance payments remitted are deducted from the
+provisions.
+Changes in estimates arise in particular from deviations from
+original cost estimates, from changes to the maturity or the scope
+of the relevant obligation, and also as a result of the regular
+adjustment of the discount rate to current market interest rates.
+The adjustment of provisions for the decommissioning and
+restoration of property, plant and equipment for changes to
+estimates is generally recognized by way of a corresponding
+adjustment to these assets, with no effect on income. As the
+property, plant and equipment concerned have, however,
+frequently already been fully depreciated, changes to estimates
+are primarily recognized within the income statement.
+The estimates for nuclear decommissioning provisions are derived
+from studies, cost estimates, legally binding civil agreements and
+legal information. A material element in the estimates are the real
+interest rates applied (the applied discount rate, less the cost
+increase rate).
+If onerous contracts exist in which the unavoidable costs of
+meeting a contractual obligation exceed the economic benefits
+expected to be received under the contract, provisions are
+established for losses from pending transactions. Such provisions
+are recognized at the lower of the excess obligation upon
+performance under the contract and any potential penalties or
+compensation arising in the event of non-performance. Obligations
+under an open contractual relationship are determined from a
+sales market perspective, in part on the basis of contract
+portfolios.
+Provisions for pending sales transactions must also be recognized
+if these transactions are subject to the own-use exemption under
+IFRS 9 and if they are partially offset by transactions that are
+accounted for as derivative financial instruments measured at
+current market prices. As a result, provisions under IAS 37 are
+recognized for transactions actually subject to the own-use
+exemption, for the purpose of which the intrinsic values of the
+derivatives accounted for under IFRS 9 held in the procurement
+portfolio are taken into consideration in the calculation of the
+imputed performance costs. The book structure adopted under
+IFRS 9 therefore affects the accounting treatment of the
+corresponding provisions.
+Contingent liabilities are possible obligations toward third parties
+arising from past events that are not wholly within the control of
+the entity, or else present obligations toward third parties arising
+from past events in which an outflow of resources embodying
+economic benefits is not probable or where the amount of the
+obligation cannot be measured with sufficient reliability.
+Contingent liabilities are not recognized on the balance sheet.
+A full disclosure of information is not provided for certain
+contingent liabilities, contingent receivables and provisions in
+connection with pending litigation if such disclosure could have a
+significant influence on further proceedings.
+Provisions for restructuring costs are recognized at the present
+value of the future outflows of resources. Provisions are
+recognized once a detailed restructuring plan has been decided on
+by management and whose implementation has either already
+begun or which have been publicly announced or communicated to
+the employees or their representatives. Only those expenses that
+are directly attributable to the restructuring measures are used in
+measuring the amount of the provision. Expenses associated with
+the future operation are not taken into consideration.
+Income Taxes
+Under IAS 12, "Income Taxes" ("IAS 12"), deferred taxes are
+recognized on temporary differences arising between the carrying
+amounts of assets and liabilities on the balance sheet and their tax
+bases (balance sheet liability method). Deferred taxes are
+recognized for temporary differences that will result in taxable or
+deductible amounts when taxable income is calculated for future
+periods, unless those differences are the result of the initial
+recognition of an asset or liability in a transaction other than a
+business combination that, at the time of the transaction, affects
+neither accounting nor taxable profit/loss and does not generate
+any temporary differences in the same amount that are subject to
+tax or to deduction (initial differences). Uncertain tax positions are
+recognized at their most likely value or the expected value. IAS 12
+further requires that deferred tax assets be recognized for unused
+tax loss carryforwards and unused tax credits. Deferred tax assets
+are recognized to the extent that it is probable that taxable profit
+will be available against which the deductible temporary
+differences and unused tax losses can be utilized. Each of the
+corporate entities is assessed individually with regard to the
+probability of a positive tax result in future years. The planning
+horizon is basically three to five years in this context. Any existing
+history of losses is incorporated in this assessment. For those tax
+assets to which these assumptions do not apply, the value of the
+deferred tax assets is reduced. Deferred taxes in connection with
+the global minimum tax ("Pillar II") are not recognized.
+Deferred tax liabilities caused by temporary differences associated
+with investments in affiliated and associated companies are
+recognized unless the timing of the reversal of such temporary
+differences can be controlled within the Group and it is probable
+that, owing to this control, the differences will in fact not be
+reversed in the foreseeable future.
+Deferred tax assets and liabilities are measured using the enacted
+or substantively enacted tax rates expected to be applicable for
+taxable income in the years in which temporary differences are
+expected to be recovered or settled. The effect on deferred tax
+assets and liabilities of changes in tax rates and tax law is
+recognized in net income unless the change affects deferred taxes
+that had previously been recognized directly in equity. The change
+is generally recognized in the period in which the material
+legislative process is completed. Income taxes for transaction
+costs of an equity transaction are recognized directly in equity.
+151
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+Income tax items are regularly assessed, in particular against the
+backdrop of numerous changes in tax laws, tax regulations, legal
+decisions and ongoing tax audits. E.ON is responding to this
+circumstance, in particular through the application of IFRIC 23, by
+continuously identifying and assessing the tax environment and
+the resulting effects. The most current information is then
+incorporated into the estimate parameters necessary for
+measuring the tax provisions. Accordingly, related potential
+interest rate effects are also assessed, measured and reported
+separately.
+Consolidated Statement of Cash Flows
+In accordance with IAS 7, "Statement of Cash Flows," the
+Consolidated Statement of Cash Flows are classified in cash flows
+from operating, investing and financing activities.
+In accordance with the so-called management approach required
+by IFRS 8, "Operating Segments," the internal reporting
+organization used by management for making decisions on
+operating matters is used to identify the Company's reportable
+segments. The internal performance measure used as the segment
+result is EBITDA adjusted to exclude certain non-operating effects
+(see Note 35). Transactions between the reportable segments are
+recorded at arm's length transfer prices.
+on valuation allowance
+= Contents Q Search ← Back
+on tax interest carryforwards and other
+tax credits
+36
+Impairment charges/reversals on other
+financial assets
+-62
+-27
+Income/loss from equity investments
+30
+-7
+Income/loss from securities, interest and
+similar income
+1,291
+2,552
+Amortized cost
+238
+77
+Fair value through P&L
+877
+457
+Fair value through OCI
+20
+15
+Other interest income
+156
+2,003
+Interest and similar expenses
+-2,385
+-1,625
+Other
+Amortized cost
+-16
+Fair value through P&L
+Expenses for purchased services
+Total
+141
+16,260
+64,228
+15,486
+108,627
+Cost of materials of €64,228 million was significantly lower than
+the prior-year level of €108,627 million. This sharp decrease was
+mainly due to energy price developments on the commodity
+markets. Under the long-term procurement strategy, higher
+energy prices in the first half of last year exerted persistent
+upward pressure on procurement costs even into the second half
+of the year, in spite of the fact that the overall price trend in 2023
+was downward. This was partially offset by the fact that forward
+procurement contracts are recognized as derivative financial
+instruments in accordance with IFRS, and on recognition this
+requires adjustment to the market price at the time of delivery.
+Accordingly, income from the market valuation of commodity
+derivatives is recognized in other operating income.
+In addition, the change in provisions for contracted sales
+transactions reported that are not subject to IFRS 9 (so-called
+own-use contracts), which are economically part of a portfolio that
+is partly offset by procurement transactions to be accounted for as
+derivative financial instruments. Provisions were significantly
+reduced in the current reporting period.
+Government subsidies received reduced the cost of materials by
+€453 million (2022: €774 million).
+158
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+(10) Financial Results
+Financial Results
+€ in millions
+2606
+2023
+2022
+Income/loss from companies in which equity
+investments are held
+92
+20
+86
+-794
+The following table provides details of financial results for the
+periods indicated:
+-681
+2023
+2022
+Changes in tax rate/tax law
+29.6
+948
+567
+Tax effects on tax-free income
+thereof previous years
+106
+Consolidated Financial Statements
+-165
+Tax effects of non-deductible expenses and permanent differences
+232.2
+Current taxes
+Deferred taxes
+-812
+-1,281
+956
+Tax effects on income from companies accounted for under the equity method
+Tax effects of changes in value and non-recognition of deferred taxes
+-102
+-101.2
+-611.8
+Tax effects of other taxes on income
+Fair value through P&L
+154.1
+on loss carryforwards
+86
+-376
+-1,546
+€ in millions
+on temporary differences
+Income Taxes
+-287
+-910
+Other interest expenses
+Foreign tax rate differentials
+-1,094
+Financial results
+-1,064
+-762
+-576
+The significant decrease in financial results relative to the previous
+year is primarily attributable to the effects in interest income,
+while income from equity investments increased. The decline in
+net interest income is mainly due to the fact that interest rates fell
+moderately compared to the previous year. This eliminated the
+very positive effect of the previous year, when a significant rise in
+interest rates had resulted in high income from the discounting of
+provisions.
+The amortized cost reported in interest and similar income
+includes positive effects from cash investments in the amount of
+€150 million (2022: €32 million).
+The amortized cost reported in interest and similar expenses
+included the positive effect from the difference between the
+nominal interest rate and the effective interest rate of former
+innogy bonds, which was adjusted due to the purchase price
+allocation, in the amount of €187 million, which is €17 million
+lower than in the previous year. This item was also negatively
+impacted by the increased interest expense from the newly issued
+bonds, which was higher than the decreased interest expense from
+the matured bonds. This was offset by the effects on earnings of
+€7 million (2022: €80 million) from non-controlling interests in
+subsidiaries that have already been fully consolidated and interests
+in fully consolidated partnerships, which are to be recognized as
+liabilities in accordance with IAS 32, and with legal structures that
+give their shareholders a statutory right of withdrawal combined
+with an entitlement to a settlement payment. Capitalized interest
+on debt (€8 million; 2022: €8 million) remained unchanged in
+interest expenses.
+The valuation effects of securities recognized at fair value through
+P&L are included in both income (€86 million; 2022: €35 million)
+and expenses (-€35 million; 2022: -€236 million) from fair value
+through P&L.
+Other interest income consists of interest income from discounting
+provisions for asset retirement obligations in the amount of
+€0 million (2022: €1,338 million), provisions for recultivation and
+remediation obligations in the amount of €77 million (2022:
+€253 million) and other non-current provisions in the amount of
+€31 million (2022: €302 million).
+927
+920
+159
+Income/loss from continuing operations before taxes
+Expected income taxes
+Reconciliation to Effective Income Taxes/Tax Rate
+The following table provides details of income taxes, including
+deferred taxes, for the periods indicated:
+Other interest expenses mainly relate to net interest expenses
+from pension provisions of €114 million (2022: €51 million) and
+from the discounting of provisions for asset retirement obligations
+of €224 million (2022: €0 million) as well as the regular accretion
+of other non-current provisions of €245 million (2022: €1 million).
+(11) Income Taxes
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+Net interest income/loss
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+281
+-41
+2,438
+-458
+877
+-714
+-3
+37
+79
+-3
+-2
+12
+-3,510
+3,453
+-1
+-111
+1
+1
+-139
+Networks
+-285
+98166
+-345
+-360
+69
+-3
+-1
+1
+-1,485
+2,197
+1,909
+5
+-1
+-624
+399
+-1
+-12
+826
+457
+39
+10
+481
+-5
+-229
+55
+50
+-42
+-5
+193
+-100
+453
+-174
+-31
+3,503
+-856
+Real estate and leasehold rights
+1,203
+-15
+8
+-30
+-26
+6
+Buildings
+-5
+-1
+-20
+Right-of-use assets
+19
+-669
+1,769
+Storage, e-charging and production
+capacities
+17
+1
+-15
+3
+-4
+Technical equipment and machine
+34
+10
+-1
+43
+-9
+Fleet, office and business equipment
+202
+-7
+3,280
+-75
+-4
+-1
+19,192
+-142
+-251
+18,799
+-1,784
+6
+-1,782
+17,017
+Goodwill
+Customer relationships and similar
+items
+-28
+-34
+-13
+2,077
+-1,228
+20
+20
+29
+2,152
+Dec. 31,
+2022
+2022
+Reversals
+in scope
+4,484
+of
+consoli-
+dation¹ Additions
+Disposals
+Transfers
+Dec. 31,
+2022
+Jan. 1,
+2022
+Exchange
+rate
+differ-
+Changes
+in scope
+of
+consoli-
+Impair-
+Dec. 31,
+ences
+dation¹ Additions
+Disposals Transfers
+ment
+-215
+111
+5
+-1,389
+280
+-6
+-169
+469
+-11
+Intangible assets
+6,509
+-77
+-2
+-57
+-104
+29
+6,963
+-2,956
+46
+Land and buildings
+830
+-13
+663
+366
+Advance payments
+-517
+688
+Concessions, commercial property
+rights, licenses, and similar rights
+3,089
+-21
+-19
+306
+-80
+119
+3,394
+-1,200
+Development expenditures
+902
+-26
+-4
+77
+-5
+79
+1,023
+|
+-35
+Growth rate (in %) 2,3
+83
+Net carrying amount of goodwill as of January 1, 2022
+Changes resulting from acquisitions and disposals
+Impairment charges
+Other changes¹
+Net carrying amount of goodwill as of December 31, 2022
+Cost of capital (in %) 2,3
+Other non-current assets4
+Energy Networks
+€ in millions
+Customer Solutions
+Sweden
+ECE/
+Turkey
+Germany
+90
+252
+6,752
+UK
+1,950
+Netherlands
+Germany
+7,848
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2022
+→ Notes
+→ Consolidated Balance Sheets
+51
+-2,219
+1,113
+-15
+-45
+004
+-8
+-63
+17
+-31,149
+3,264
+37,419
+¹Includes additions from acquisitions (see Note 5) and reclassifications to assets/disposal groups held for sale.
+169
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Other
+426
+Corporate
+Functions/
+Other
+443
+-20
+17
+E.ON Group
+17,408
+-4
+-387
+17,017
+-8
+-50
+1
+-19
+18
+The changes in goodwill within the segments, as well as the
+allocation of impairments and their reversals to each reportable
+segment, are presented in the tables above.
+Impairments
+To perform the impairment tests, E.ON first determines the fair
+values less costs of disposal of its cash-generating units. Because
+there were no binding sales transactions or market prices for the
+respective cash-generating units in 2023, fair values were
+calculated based on discounted cash flow methods.
+Valuations are based on the medium-term corporate planning
+authorized by the Management Board. The calculations for
+impairment-testing purposes are generally based on the three
+planning years of the medium-term plan plus two additional
+detailed planning years. Deviations from this are made in certain
+justified exceptional cases. The cash flow assumptions extending
+beyond the detailed planning period are determined using
+sustainable, business and currency-specific growth rates based on
+the analysis of past years and predictions for the future. In 2023,
+the sustainable, currency-specific inflation rate used for the euro
+area was 1.25 percent (2022: 1.25 percent). The discount rates
+after taxes used for discounting cash flows in the annual
+impairment test are calculated using market data for each cash-
+generating unit, and as of the valuation date, ranged between 4.3
+and 12.6 percent after taxes (2022: between 3.9 and 13.0
+percent).
+The principal assumptions underlying the determination by
+management of recoverable amount are the respective forecasts
+for E.ON's investment activity, the regulatory framework, as well
+as for growth rates and the cost of capital, of revenue and EBITDA
+margin (in the Customer Solutions business) and Regulatory Asset
+Base and regulatory return (in the Energy Networks business). The
+assumptions used in these forecasts regarding the development of
+commodity market prices, future electricity and gas prices in the
+wholesale and retail markets are based on external market data
+from reputable suppliers as well as internal assessments and also
+appropriately take into account climate-related impacts on market
+conditions and macroeconomic linkages as well as the
+sustainability targets anchored in the Group strategy, such as the
+reduction of Scope 3 emissions by 100 percent by 2050. For
+example, impacts of climate targets on CO2 prices and changing
+weather conditions (temperature, wind, etc.) are included. The
+assumed development of all of the key influencing factors
+mentioned corresponds to the expectations set out in the forecast
+report.
+170
+E.ON Integrated Annual Report 2023
+Exchange
+rate
+differ-
+ences
+Goodwill and Intangible Assets
+¹Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+3 Energy Networks Germany was valued with a detailed planning period of 3 years and on the basis of the regulatory asset base.
+4Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.
+-3
+Reversals
+-4
+-251
+7,597
+-7
+-16
+-102
+-11
+83
+236
+6,752
+1,848
+73
+428
+1.25
+1.25
+1.25
+3.9
+5.5
+5.9
+Impairment
+73
+68,568 -30,477
+1
+36
+-3
+4
+-132
+484
+-3
+-4
+314
+-1,126
+-3
+2,377
+1,097
+1
+-1,613
+2,505
+Technical equipment, plant and
+machinery
+57,533
+-848
+-612
+-75
+16
+97
+-393
+-509
+96
+1,172
+4,118
+-79
+-1,974
+112935
+3
+-1
+2
+-4
+-12
+31
+6
+-49
+38
+4
+-99
+94
+4
+2,175
+-722
+1,030
+58,556 -27,486
+-1
+-837
+558
+Advance payments and construction
+in progress
+2,717
+-46
+-25
+1,905
+-75
+Property, plant and equipment
+67,337
+-950
+-648
+4,303
+-1,500
+-1,149
+26
+3,327
+-93
+1
+-6
+-1
+154
+-5
+401
+56
+-1,944
+435
+-7
+-32
+16
+-28,561
+29,995
+Other equipment, fixtures, furniture
+and office equipment
+1,400
+-6
+-10
+132
+-164
+43
+1,395
+-845
+6
+-140
+Jan. 1,
+2022
+Impairment
+Changes
+6,010
+Total
+420
+304
+443
+330
+Pension costs and other employee benefits
+Pension costs
+4,292
+702
+772
+5,437
+Social security contributions
+Wages and salaries
+2022
+2023
+€ in millions
+Personnel Costs
+The following table provides details of personnel costs for the
+periods indicated:
+Personnel Costs
+(12) Personnel-Related Information
+= Contents Q Search ← Back
+4,908
+Personnel costs of €6,010 million were €573 million higher than
+the prior-year figure of €5,437 million. The change is primarily
+attributable to the higher headcount and tariff increases. This is
+counteracted by lower expenses for pensions.
+Share-Based Payment
+The expenses for share-based payment in 2023 (the E.ON
+Performance Plan) amounted to €93.3 million (2022:
+€24.6 million).
+If the employment relationship ends before maturity due to death
+or permanent invalidity, the virtual shares are settled before
+maturity. The same shall apply in the case of a change in control
+related to E.ON SE and also if the allocating company leaves the
+E.ON Group before maturity.
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+164
+The virtual shares are canceled if the employment relationship of
+the beneficiary ends before the end of the term for reasons within
+the control of the beneficiary. If the employment relationship of
+the beneficiary is terminated before retirement, through the end of
+a limited term or for operational reasons before the end of the
+term, the virtual shares do not expire but are settled at maturity.
+The resulting number of virtual shares at the end of the vesting
+period is multiplied by the average price of E.ON stock in the final
+60 days of the vesting period. This amount is increased by the
+dividends distributed on E.ON stock during the vesting period and
+then paid out. The sum of the payouts is capped at 200 percent of
+the agreed target.
+For the tranche granted beginning in 2022, in addition to TSR (50
+percent weighting), ROCE (25 percent weighting) and the E.ON
+Sustainability Index (25 percent weighting) are also taken into
+account as performance criteria.
+For the tranches granted up to and including 2021, the final
+number of virtual shares is determined as follows: E.ON's TSR
+performance in a given year determines the final number of one-
+fourth of the virtual shares granted at the beginning of the vesting
+period. If target attainment in a year is below the threshold defined
+by the Supervisory Board upon allocation, the number of virtual
+shares is reduced by one-fourth. If E.ON's performance is at the
+upper cap or above, the fourth of the virtual shares allocated for
+the year in question will increase, but to a maximum of 150
+percent.
+The E.ON Sustainability Index reflects the four most relevant ESG
+aspects (ESG Environment, Social, Governance) at E.ON. In 2023
+these aspects were: climate action, diversity, health and safety,
+and ESG ratings.
+performance is measured once a year in comparison with the
+companies in the peer group and set for that year.
+The TSR is the return on E.ON stock, which takes into account the
+stock price plus the assumption of reinvested dividends, adjusted
+for changes in capital. The peer group used for relative TSR will be
+the other companies in E.ON's peer index, the STOXX® Europe 600
+Utilities. During a tranche's vesting period, E.ON's TSR
+The beneficiary will receive virtual shares in the amount of the
+agreed target. The conversion into virtual shares will be based on
+the fair market value on the date when the shares are granted. The
+number of virtual shares allocated may change during the four-
+year vesting period. For tranches granted through 2021, the only
+relevant criterion was the total shareholder return ("TSR") of E.ON
+stock compared with the TSR of the companies in a peer group
+("relative TSR"). The final number of virtual shares allocated in the
+2022 tranche depends on three performance criteria, namely,
+relative TSR, ROCE, and the E.ON Sustainability Index.
+In the years 2017 to 2023, E.ON granted the members of the
+Management Board of E.ON SE and certain executives of the E.ON
+Group virtual shares under the E.ON Performance Plan. The
+vesting period of each tranche is four years. Vesting periods start
+on January 1 of each year.
+E.ON Performance Plan (EPP)
+The following discussion includes reports on the E.ON
+Performance Plan introduced in 2017.
+Members of the Management Board of E.ON SE and certain
+executives of the E.ON Group receive share-based payment as part
+of their voluntary long-term variable compensation. The purpose
+of such compensation is to reward their contribution to E.ON's
+growth and to further the long-term success of the Company. This
+variable compensation component, comprising a long-term
+incentive effect along with a certain element of risk, provides for a
+logical linking of the interests of shareholders and management.
+Long-term Variable Compensation
+The voluntary employee stock purchase program took place again
+in 2023, giving employees in the German Group companies the
+opportunity once again to purchase E.ON shares at favorable
+conditions. The favorable pricing conditions granted within the
+framework of the employee stock purchase program (IFRS 2,
+"Share-based Payment") resulted in personnel expense of
+€6.7 million; the offsetting entry was made in equity.
+Employee Stock Purchase Program
+→ Notes
+The following are the base parameters of the tranches of the E.ON
+Performance Plan active in 2023:
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Cash Flows
+0
+616
+477
+477
+2,149
+-277
+-1,155
+272
+-1,427
+-1,564
+-170
+-15
+-13
+76
+207
+income taxes income taxes Income taxes income taxes
+income taxes Income taxes
+-675
+111111
+-127
+1,408
+23
+489
+-1,075
+3,987
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+163
+This initial indicative analysis did not identify any countries in
+which the E.ON Group operates that could result in a material
+impact in the form of a supplementary tax. Consequently, E.ON is
+currently not expected to be materially affected by a
+supplementary tax. Accordingly, the average effective Group tax
+rate would have remained unchanged if the minimum tax
+legislation had already been in force on the balance sheet date.
+The first step was to determine whether the safe harbor
+regulations were applicable. The effective tax rate was calculated
+on a simplified basis for countries that were not exempt from the
+Pillar 2 calculation after a review of the safe harbor rules.
+An initial indicative analysis was carried out as of the reporting
+date to determine the fundamental impact and the jurisdictions in
+which E.ON could be exposed to potential effects in connection
+with a supplementary tax.
+The minimum tax legislation applicable from 2024 requires E.ON
+to determine the effective tax rate for each country in which
+business units as defined by the law exist and, if the effective tax
+rate determined is below the minimum tax rate of 15 percent, to
+pay a so-called supplementary tax equal to the difference between
+the effective tax rate and the minimum tax rate.
+The E.ON Group is included in the scope of application of the OECD
+Model Rules of Pillar 2 for the national implementation of the
+global minimum tax. The Model Rules were transposed into
+German law through the introduction of a minimum tax law in
+December 2023, which applies to all fiscal years beginning after
+December 31, 2023. Because the legislation had not entered into
+force as at the reporting date in any country in which the E.ON
+Group has business units as defined by the legislation, there was
+no current tax exposure associated with it for the 2023 fiscal year.
+The E.ON Group applies the exemption in IAS 12 for the
+recognition and disclosure of information on deferred tax assets
+and liabilities in connection with income taxes from global
+minimum taxation.
+Global Minimum Tax
+The VSEH Group has been presented as a disposal group in
+accordance with IFRS 5 since December 31, 2021. The transaction
+was then concluded on November 23, 2023 (see Note 5). The
+VSEH Group was deconsolidated on this date and the value of the
+investment in ZSE was increased accordingly by the fair value of
+these VSEH shares. The deconsolidation of VSEH resulted in the
+derecognition of deferred tax liabilities in the amount of €127
+million.
+616
+-661
+2,426
+-491
+8
+Changes in deferred tax assets in the prior year, with net disposals
+of €1 million, relate mainly to intangible assets (+€12 million),
+property, plant and equipment (+€11 million) and liabilities (-€18
+million). Changes in deferred tax liabilities, with net disposals of -
+€20 million, relate primarily to intangible assets (+€15 million),
+property, plant and equipment (-€48 million) and receivables (-€11
+million) as well as liabilities (+€25 million).
+Changes in deferred tax assets in the current year, with net
+addition of €38 million, relate mainly to liabilities (+€26 million),
+property, plant and equipment (+€11 million) and loss
+carryforwards (+€7 million). Changes in deferred tax liabilities,
+with net additions of €65 million, relate primarily to property, plant
+and equipment (+€39 million), receivables (+€34 million) and
+liabilities (-€16 million).
+Effects from additions and disposals and from discontinued
+operations resulted in changes in deferred taxes totaling
+€27 million (2022: -€21 million).
+3,385
+-602
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+E.ON Performance Plan Virtual Shares
+Date of issuance
+Term
+0
+0
+Other services
+0
+Domestic
+1
+69
+0
+Tax advisory services
+Domestic
+7
+6
+7
+Other attestation services
+23
+25
+Domestic
+32
+34
+2022
+Domestic
+0
+0
+Total
+-243
+2,242
+699
+Income/loss from continuing operations
+Less: Non-controlling interests
+2022
+2023
+61
+net
+€ in millions
+Earnings per Share
+The computation of basic and diluted earnings per share for the
+periods indicated is shown below:
+(14) Earnings per Share
+The list of shareholdings pursuant to Section 313 (2) HGB is an
+integral part of these Notes to the Financial Statements and is
+presented in Note 38.
+List of Shareholdings
+The fees for other attestation services include all attestation
+services that are not auditing services and are not used in
+connection with the audit of the Consolidated Financial
+Statements. These fees are for legally required attestation services
+and for other voluntary attestation services (e.g., the audit of the
+sustainability reporting, Renewable Energy Sources Act (EEG) and
+the Act on Combined Heat and Power Generation (KWKG) and
+audit services in connection with new IT systems).
+The fees for financial statement audits relate to the audit of the
+Consolidated Financial Statements and the legally mandated
+financial statements of E.ON SE and its affiliates. They also include
+the fees for auditing reviews of the IFRS interim financial
+statements and other audit services directly required by the audit
+of the Financial Statements.
+29
+32
+Domestic
+39
+41
+2023
+Financial statement audits
+€ in millions
+Independent Auditor Fees
+38,172
+2022
+2023
+39,599
+Energy Networks
+FTE²
+Employees-Core Workforce¹
+The breakdown by segment is shown in the following table:
+In 2023, E.ON employed an average personnel of 71,629 (2022:
+68,888). Part-time employees were taken into account on a pro
+rata basis when this figure was calculated. In addition, an average
+of 2,064 apprentices were employed in the reporting year in
+Germany (2022: 2,033).
+Employees
+The provision for the fourth, fifth, sixth and seventh tranches of
+the E.ON Performance Plan as of the balance sheet date is €165.0
+million (2022: €92.9 million). The expense for the fourth, fifth,
+sixth and seventh tranches amounted to €93.3 million in the 2023
+fiscal year (2022: €24.6 million).
+€ 7.88
+€ 7.65
+4th tranche
+Jan. 1, 2020
+4 years
+4 years
+5th tranche
+Jan. 1, 2021
+6th tranche
+Jan. 1, 2022
+4 years
+€ 12.76
+7th tranche
+Jan. 1, 2023
+4 years
+€ 9.32
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+Target value at issuance
+Customer Solutions
+After
+26,171
+Corporate Functions/Other
+During 2023, the following fees were recorded as expenses for the
+services provided by the independent auditor of the Consolidated
+Financial Statements, KPMG and by companies in the international
+KPMG network:
+Fees and Services of the Independent Auditor
+On December 19, 2023, the Management Board and the
+Supervisory Board of E.ON SE made a declaration of compliance
+pursuant to Section 161 of the German Stock Corporation Act
+("AktG"). The declaration has been made permanently and publicly
+accessible to stockholders on the Company's website
+(www.eon.com).
+German Corporate Governance Code
+(13) Other Information
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+165
+2Full-time equivalents.
+¹Excluding apprentices, interns and working students.
+68,888
+71,629
+E.ON Group
+5,610
+5,859
+25,106
+2022
+28
+-183
+1,079
+286
+878
+Deferred taxes (net)
+Current
+Netting
+Deferred taxes (gross)
+Changes in value
+Subtotal
+Other
+1,022
+847
+Loss carryforwards
+2,327
+14,053
+1,542
+8,289
+Liabilities (including derivative financial instruments)
+265
+1,758
+247
+598
+14,990
+13,060
+22,416
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+= Contents Q Search ← Back
+161
+As of December 31, 2023, €16 million (2022: €16 million) in
+deferred tax liabilities were recognized for the differences between
+net assets and the tax bases of subsidiaries and associated
+companies (outside basis differences). Accordingly, deferred tax
+liabilities were not recognized for temporary differences of €2,062
+million (2022: €3,067 million) at subsidiaries and associated
+companies, as E.ON is able to control the timing of their reversal
+and the temporary difference will not reverse in the foreseeable
+future.
+Income tax assets and liabilities consist primarily of income taxes
+for the respective current year and for prior-year periods that have
+not yet been definitively examined by the tax authorities. These
+items can be found in the balance sheet.
+2,793
+585
+2,079
+965
+2,223
+274
+3,505
+1,935
+-19,167
+-19,167
+-10,837
+21,960
+21,246
+13,060
+-1,170
+-648
+14,342
+21,960
+1,326
+Miscellaneous provisions
+11
+1,741
+737
+3
+555
+Tax liabilities
+Tax assets
+214
+Tax liabilities
+535
+108
+Tax assets
+Right-of-use assets
+Intangible assets
+€ in millions
+Dec. 31, 2022
+Dec. 31, 2023
+→ Consolidated Balance Sheets
+Deferred Tax Assets and Liabilities
+Various temporary differences as well as various unused tax loss
+carryforwards and tax credits result in the following deferred tax
+assets and liabilities:
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+5
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+629
+337
+55
+2,018
+Provisions for pensions and similar obligations
+13,390
+1,916
+5,673
+1,076
+Receivables (including derivative financial instruments)
+1
+119
+13
+148
+Inventories
+157
+266
+140
+209
+Financial assets
+3,603
+418
+3,832
+Property, plant and equipment
+-411
+→ Consolidated Balance Sheets
+= Contents Q Search Back
+As of December 31, 2023, E.ON reported deferred tax assets for
+companies that incurred losses in the current or the prior-year
+period that exceed the deferred tax liabilities by €2,028 million
+(2022: €478 million). Of this amount, €1,672 million is
+attributable to companies in Germany and €339 million to
+companies in the UK. These amounts mainly include deductible
+temporary differences. Recognition in the UK is due to the fact
+that expenses for the integration of new business activities and
+processes that led to tax losses in the past are non-recurring. In
+Germany, recognition is based, among other factors, on taxable
+profits realized in the current financial year and on sufficient
+taxable profits in subsequent financial years. These factors are
+based on scenario analyses as well as stable earnings contributions
+Current tax expense was reduced by €26 million (2022: €4 million)
+due to the use of previously unrecognized tax losses. The change in
+previously unrecognized tax losses and temporary differences
+reduced deferred tax expense by €77 million (2022: €71 million).
+Deferred tax assets were not recognized, or are no longer
+recognized, in the amount of €776 million (2022: €2,918 million)
+for temporary differences which are recognized in income and
+equity.
+The expiring tax loss carryforwards relate exclusively to countries
+other than Germany.
+1The presentation of tax loss carryforwards corporate tax without recognition of deferred taxes was adjusted by €3.2 billion from unlimited duration to limited duration (of which 10 years or longer) as of
+December 31, 2022, in accordance with IAS 8.41 ff.
+3,199
+272
+283
+3,715
+69
+162
+174
+182
+of which 10 years or longer
+-
+- of which up to 9 years
+- of which up to 5 years
+111
+-13
+-2
+600
+Total
+50
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+-155
+1,591
+Before
+63
+-468
+After
+2023
+Before
+Additions and Disposals
+Companies accounted for under the equity method
+Total
+Remeasurements of defined benefit plans
+Currency translation adjustments
+Fair value measurement of financial instruments
+Cash flow hedges
+€ in millions
+Changes in Income Taxes of Other Comprehensive Income
+Changes in income taxes recognized in other comprehensive
+income for the years 2023 and 2022 break down as follows:
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+69
+3,645
+50
+4,180
+10,349
+Income taxes recognized in other comprehensive income break
+down as follows:
+from the regulated area. E.ON also expects derivative financial
+instruments recognized at negative fair value to have a positive
+effect on non-operating earnings through a reversal during the
+planning period. When considered in the aggregate, the
+management has concluded that each company will generate
+sufficient taxable income against which the previously unused tax
+losses and deductible temporary differences can be offset.
+Tax interest
+carryforwards
+and other tax
+credits
+taxes
+December 31, 2022
+Tax loss
+carryforwards
+trade tax and
+local income
+Tax loss
+carryforwards
+corporate tax¹
+credits
+taxes
+Tax interest
+carryforwards
+and other tax
+Tax loss
+carryforwards
+trade tax and
+local income
+Tax loss
+carryforwards
+corporate tax
+- limited duration
+- unlimited duration
+taxes
+of which amounts without recognition of deferred
+Amounts at the balance sheet date
+€ in millions
+December 31, 2023
+Tax Loss Carryforwards, Tax Interest Carryforwards and Other Tax Credits without Recognition of
+Deferred Tax Assets
+No deferred tax assets were recognized, or were no longer
+recognized, on the following tax loss carryforwards, interest
+carryforwards and other deferred tax assets:
+2,214
+→ Notes
+2,837
+2,106
+Current taxes within OCI
+2,177
+1,859
+4,726
+2,515
+1,727
+4,498
+124
+602
+Deferred taxes within OCI
+2,177
+1,928
+8,371
+2,515
+1,777
+8,678
+2022
+2023
+€ in millions
+Income Taxes of Other Comprehensive Income
+2,545
+9,597
+€ in millions
+Income/loss from continuing operations
+(attributable to shareholders of E.ON SE)
+Income/loss from discontinued operations,
+1,831
+84
+-84
+211
+55
+-2
+1,395
+Other equipment, fixtures, furniture and
+office equipment
+-31,097 32,567
+2
+1,659
+-52
+307
+-2,050
+-363
+-52
+2,027
+-1,494
+1
+-2
+136
+-328
+-837
+1
+-61
+-63
+4,527
+74,505
+-1,365
+193
+-715
+5,606
+673
+180
+68,568
+Property, plant and equipment
+-31
+2,570
+13
+13
+3,327
+Advance payments and construction in
+progress
+677
+-982
+-1
+-13
+79
+-150
+119
+-31,149
+-111
+-9
+568
+138
+58,556
+Technical equipment, plant and machinery
+-646
+-126
+95
+51
+29
+2,701
+4,118
+-43
+-12
+12
+-171
+41
+-53
+-2
+-99
+227
+Buildings
+-462
+2,163
+4,144
+1,134
+3,521 -1,613
+63,664 -28,561
+1,069
+-65
+-5
+-2
+17
+-75
+2,710
+-1,434
+-2
+117
+-110
+69
+-16
+2
+-2
+1132
+109
+-417
+2
+-2
+-1,126
+-15
+76
+-1
+-54
+1
+-6
+¹Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale.
+2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
+3Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.
+Reversals
+Other non-current assets³
+Cost of capital (in %)²
+Growth rate (in %)²
+Net carrying amount of goodwill as of December 31, 2023
+Other changes¹
+1
+Impairment charges
+Net carrying amount of goodwill as of January 1, 2023
+€ in millions
+6.4
+6.0
+4.3
+|
+1.25
+1.25
+1
+Changes resulting from acquisitions and disposals
+30
+-124
+2
+Accumulated depreciation amounts
+Net
+carrying
+Acquisition and production costs
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+Equipment
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+168
+33
+-178
+-11
+17,126
+109
+|
+1
+-37
+1.25
+428
+81
+1,886
+= Contents Q Search ← Back
+Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2023
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+167
+¹Includes additions from aquisitions (see Note 5) and reclassifications to assets/disposal groups held for sale.
+|
+4,409
+40,749
+-118
+-33,756
+3
+-114
+-205
+505
+-2,313
+-422
+-61
+Energy Networks
+-3
+Customer Solutions
+Sweden
+6,752
+245
+83
+7,651
+8
+38
+9
+54
+17,017
+Other Group
+E.ON
+428
+Other
+Corporate
+Functions/
+Nether-
+lands
+73
+UK
+1,848
+6,752
+236
+83
+Germany
+ECE/
+Turkey
+Germany
+7,597
+-48
+1
+-5
+-1,785
+-3
+18,911 -1,782
+2,107 -1,389
+1
+-8
+25
+12
+2,077
+Customer relationships and similar items
+17,126
+62
+18,799
+Goodwill
+2023
+2023
+Reversals
+ment
+Disposals Transfers
+Impair-
+consoli-
+dation¹ Additions
+50
+-9
+6
+-177
+98
+-211
+-15
+343
+-1
+469
+Advance payments
+-257
+47
+7
+1,023
+Development expenditures
+134
+-186
+374
+3
+1
+3,394
+Concessions, commercial property rights,
+licenses, and similar rights
+546
+-1,561
+8
+of
+in scope
+Exchange
+rate
+differ-
+ences
+Jan. 1,
+2023
+The computation of diluted earnings per share is identical to that
+of basic earnings per share because E.ON SE has issued no
+potentially dilutive ordinary shares. The increase in the weighted-
+average number of shares outstanding resulted primarily from the
+issue of treasury shares in E.ON SE under the voluntary employee
+stock purchase program.
+1,831
+517
+2,609
+2,611
+outstanding (in millions)
+Weighted-average number of shares
+0.70
+0.20
+from net income/loss
+0.02
+from discontinued operations
+0.70
+0.18
+from continuing operations
+shareholders of E.ON SE)
+Earnings per share (attributable to
+in €
+61
+Income/loss from discontinued operations,
+net (attributable to shareholders of E.ON SE)
+Net income/loss attributable to shareholders
+of E.ON SE
+Less: Non-controlling interests
+166
+3,720
+918
+585
+E.ON Integrated Annual Report 2023
+= Contents Q Search ← Back
+Dec. 31,
+2023
+Disposals Transfers
+dation¹ Additions
+consoli-
+of
+Changes
+Changes
+in scope
+Exchange
+rate
+differ-
+ences
+Jan. 1,
+2023
+€ in millions
+Accumulated depreciation amounts
+Net
+carrying
+Acquisition and production costs
+Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
+The changes in goodwill and intangible assets, in right-of-use
+assets, and in property, plant and equipment, are presented in the
+tables on the following pages:
+(15) Goodwill, Intangible Assets, Right-of-use Assets
+and Property, Plant and Equipment
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+456
+-1,485
+-624
+Storage, e-charging and production
+1,974
+-904
+548
+-402
+-2
+3,592
+-3,738
+30
+capacities
+-63
+-15
+-4
+352
+-566
+-57
+2,124
+-1,596
+30
+-2
+570
+3
+Technical equipment and machine
+43
+-12
+85
+-1
+-1
+-1
+4
+— བུ སྐྱཤྩ&
+-14
+2
+1,172
+Real estate and leasehold rights
+793
+-3
+10
+3,503
+Right-of-use assets
+1
+2
+193
+Fleet, office and business equipment
+-1
+934
+©of g ལ
+-4
+16
+950
+11
+-69
+177
+-4
+9
+826
+Land and buildings
+-15
+-3,510
+7,330
+22
+-466
+764
+28
+19
+6,963
+Intangible assets
+251
+-12
+-5
+-345
+-2
+-2
+2,438
+-248
+51
+-110
+-9
+437
+-606
+-2
+256
+-135
+-1
+-9
+173
+-294
+-7
+771231
+-669
+2,878
+4
+-53
+489
+I
+Networks
+Dec. 31, Dec. 31,
+-10,837
+-109
+49
+22
+14
+-2
+31
+29
+1
+29
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+E.ON Integrated Annual Report 2023
+The Group adjustments shown in the tables mainly relate to
+goodwill determined as part of initial recognition, temporary
+differences, changes in ownership interests, exchange rate effects,
+impairments recognized at group level and effects from the
+elimination of intragroup profits.
+-3
+3
+61
+18
+66
+4
+-10
+-46
+6
+39
+11
+-8
+34
+27
+10
+8
+14
+Presented in the following tables are significant line items of the
+aggregated balance sheets and of the aggregated income
+statements of the joint ventures accounted for under the equity
+method, Enerjisa Enerji A.Ş., Enerjisa Üretim Santralleri A.Ş.,
+Westconnect GmbH and Západoslovenská energetika a.s. (ZSE).
+Prior-year data may differ from the data published in the previous
+year due to subsequent findings. The Group adjustments at
+Enerjisa Üretim Santralleri A.Ş. are mainly the result of
+impairments recognized at the Group level in the reporting period
+and the previous year, respectively.
+The material associates and the material joint ventures are active
+in diverse areas of the gas and electricity industries as well as
+telecommunications. Disclosures of company names, registered
+offices and equity interests as required by IFRS 12 for material
+joint arrangements and associates can be found in the list of
+shareholdings pursuant to Section 313 (2) HGB (see Note 38).
+As of December 31, 2023, the investment in Enerjisa Enerji A.Ş. is
+marketable. The pro rata market value amounted to €659 million
+as of December 31, 2023 (2022: €853 million). The carrying
+amount is €659 million as of December 31, 2023. The free float in
+the company totals 20 percent, with E.ON and Haci Ömer Sabanci
+Holding A.Ş. holding half of the remaining shares; from E.ON's
+perspective, Enerjisa Enerji A.Ş. is therefore a joint venture.
+Equity
+Ownership interest (in %)
+Proportional share of equity
+Consolidation adjustments
+Carrying amount of equity investment
+Material Joint Ventures-Earnings Data
+Non-current financial liabilities
+= Contents Q Search Back
+Enerjisa Enerji A.Ş.
+Enerjisa Üretim Santralleri A.Ş. Západoslovenská energetika a.s.
+2023
+2022
+2023
+2022
+Westconnect GmbH
+Current financial liabilities
+Cash and cash equivalents
+Non-current liabilities (including provisions)
+Of investments in companies accounted for under the equity
+method, the shareholdings in companies with a carrying amount of
+€709 million (2022: €702 million) are restricted because they
+were pledged as collateral for financing as of the balance sheet
+date.
+There are no further material restrictions apart from those
+contained in standard legal and contractual provisions.
+175
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Material Joint Ventures-Balance Sheet Data as of December 31
+€ in millions
+Non-current assets
+Current assets
+Current liabilities (including provisions)
+36.85
+2023
+36.85
+39.90
+15
+34
+8,240
+22,506
+2,621
+5,364
+29
+Receivables from derivative financial instruments
+10,404
+Trade receivables
+2,204
+1,940
+1,034
+1,819
+10,422
+1,079
+28
+120
+10,320
+9,286
+36,447
+38,266
+4,929
+20,090
+3,850
+The cost of raw materials, goods purchased for resale and finished
+products is primarily determined based on the average cost
+method.
+19,005
+3,348
+911
+3,083
+161
+142
+303
+857
+1,085
+Financial receivables and other financial assets
+446
+89
+19
+140
+30
+-113
+-199
+20
+252
+166
+11
+-27
+-125
+24.22
+20.00
+90
+18
+13
+15
+550
+801
+1,786
+856
+1,056
+Other financial receivables and financial assets
+233
+33
+223
+29
+Receivables from finance leases¹
+-5
+3
+22
+28
+39.90
+Write-downs totaled €97 million in 2023 (2022: €17 million).
+Reversals of write-downs amounted to €16 million in 2023 (2022:
+€13 million).
+2022
+2022
+803
+330
+Westconnect GmbH
+Enerjisa Enerji A.Ş.
+Enerjisa Üretim Santralleri A.Ş. Západoslovenská energetika a.s.
+€ in millions
+507
+Sales
+Write-downs
+Interest income/expense
+Income taxes
+Dividend paid out to E.ON
+Other comprehensive income
+Total comprehensive income
+Net income/loss from continuing operations
+2023
+774
+659
+712
+1,265
+1,044
+630
+166
+508
+712
+507
+-491
+-537
+173
+164
+709
+702
+-25
+2022
+2023
+2022
+126
+-42
+-6
+-100
+-89
+-142
+248
+-121
+-66
+-14
+-1
+-217
+-211
+Non-current
+-78
+462
+531
+621
+2023
+2022
+2023
+2022
+80
+12
+5,036
+4,619
+1,462
+3,266
+1,858
+1,618
+-26
+-2
+79
+684
+2023
+195
+49.00
+1,492
+1,585
+376
+580
+810
+820
+67
+278
+911
+478
+305
+342
+1,106
+516
+161
+5
+111
+777
+755
+548
+2,784
+2,684
+2,309
+2,276
+491
+2,425
+36
+70
+1,328
+1,159
+902
+734
+1,184
+34
+138
+419
+390
+1,710
+1,780
+2,530
+2,089
+1,286
+402
+339
+50.00
+40.00
+40.00
+50.00
+50.00
+49.00
+50.00
+507
+1,090
+317
+251
+261
+284
+48
+622
+410
+139
+161
+738
+744
+98
+17
+427
+222
+289
+201
+The change in inventories compared to December 31, 2022, is
+mainly attributable to the significant decrease in stored gas
+reserves.
+No inventories have been pledged as collateral.
+Dividend paid out to E.ON
+Net income from discontinued operations
+Non-controlling interests in the net income/loss from continuing operations
+Net income/loss from continuing operations
+Sales
+€ in millions
+Other comprehensive income
+Material Associates-Earnings Data
+Carrying amount of equity investment
+Consolidation adjustments
+Proportional share of equity
+Ownership interest (in %)
+Non controlling interests
+Current liabilities (including provisions)
+Non-current liabilities (including provisions)
+Equity
+¹Undisclosed accruals/provisions from acquisitions are recognized in assets.
+Current assets
+Total comprehensive income
+Proportional share of total comprehensive income after taxes
+3,317
+2022
+2023
+2022
+2023
+2022
+Ownership interest (in %)
+2023
+Dortmunder Energie- und
+Wasserversorgung GmbH
+RheinEnergie AG
+174
+Equity-method earnings
+Consolidation adjustments
+Proportional share of net income after taxes
+GASAG Berliner Gaswerke AG
+Non-current assets¹
+€ in millions
+Material Associates-Balance Sheet Data as of December 31
+5
+40
+288
+321
+140
+110
+18
+148
+Proportional share of net income from continuing operations
+Proportional share of other comprehensive income
+Proportional share of total comprehensive income
+2022
+2023
+Total
+Joint ventures
+2022
+2023
+211
+1
+58
+6
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+173
+The following tables summarize significant line items of the
+aggregated statements of comprehensive income of the associates
+and joint ventures that are accounted for under the equity method.
+The material associates in the E.ON Group are Rhein Energie AG,
+Dortmunder Energie- und Wasserversorgung GmbH and GASAG
+Berliner Gaswerke AG. Prior-year data may differ from the data
+published in the previous year due to subsequent findings.
+294
+379
+141
+128
+153
+251
+3,011
+2022
+1,557
+2,070
+Dortmunder Energie- und
+Wasserversorgung GmbH
+2023
+2022
+1,456
+GASAG Berliner Gaswerke AG
+2023
+2022
+1,136
+2,273
+3,631
+1,621
+71
+26
+-19
+91
+72
+1
+163
+-12
+3,516
+2023
+293
+152
+174
+53
+37
+109
+2022
+109
+516
+297
+234
+373
+401
+RheinEnergie AG
+684
+244
+342
+532
+1,087
+749
+689
+275
+312
+560
+1,513
+882
+521
+151
+194
+771
+849
+2,050
+652
+827
+998
+1,180
+36.85
+36.85
+39.90
+39.90
+20.00
+24.22
+5
+5
+799
+722
+495
+612
+1,709
+2,197
+1,154
+1,617
+2023
+€ in millions
+Associates
+greater than 3 months
+57
+49
+Current securities with an original maturity
+32
+57
+1,375
+December 31,
+2022
+1,600
+Securities and fixed-term deposits
+2022
+2023
+2023
+€ in millions
+Liquid Funds
+1,375
+The following table provides a breakdown of liquid funds by
+original maturity as of the dates indicated:
+Restricted liquid funds
+Cash and cash equivalents
+The Company has further been authorized by the Annual
+Shareholders Meeting of May 28, 2020, to buy shares using
+derivatives (put or call options, or a combination of both). When
+derivatives in the form of put or call options, or a combination of
+both, are used to acquire shares, the option transactions must be
+conducted with a financial institution or a company operating in
+accordance with Section 53 (1) sentence 1 or Section 53b (1)
+sentence 1 or (7) of the German Banking Act (KWG) or at market
+terms on the stock exchange. No shares were acquired in the
+reporting year using this purchase model.
+Pursuant to a resolution by the Annual Shareholders Meeting of
+May 28, 2020, the Management Board is authorized to purchase
+own shares until May 27, 2025. The shares purchased, combined
+with other treasury shares in the possession of the Company, or
+attributable to the Company pursuant to Sections 71a et seq.
+AktG, may at no time exceed 10 percent of its capital stock. The
+Management Board was authorized at the aforementioned Annual
+Shareholders Meeting to cancel any shares thus acquired without
+requiring a separate shareholder resolution for the cancellation or
+its implementation. The total number of outstanding shares as of
+December 31, 2023, was 2,611,658,485 (December 31, 2022:
+2,610,379,492). As of December 31, 2023, E.ON SE held a total of
+29,660,315 treasury shares (December 31, 2022: 30,939,308)
+having a book value of €1,042 million (equivalent to approximately
+1.12 percent or €29,660,315 of the capital stock).
+The capital stock is subdivided into 2,641,318,800 registered
+shares with no par value (no-par-value shares) and amounts to
+€2,641,318,800 (2022: €2,641,318,800). The capital stock of the
+Company was provided by way of conversion of E.ON AG into a
+European Company (SE) and through a capital increase carried out
+on March 20, 2017, partially using the Authorized Capital 2012,
+which expired on May 2, 2017, and through a capital increase
+entered in the commercial register of the Company on September
+19, 2019, making extensive use of the Authorized Capital 2017.
+(20) Capital Stock
+Cash and cash equivalents include €5,096 million (2022: €6,001
+million) in cash, checks, cash on hand and balances at financial
+institutions with an original maturity of less than three months.
+Cash and cash equivalents also include, in particular, money
+market funds in the amount of €358 million (2022: €1,200
+million) which meet the definition of cash and cash equivalents.
+Cash and cash equivalents in the amount of €33 million (2022:
+€351 million) which are subject to an only contractual restriction
+comprise mainly advance payments in connection with
+government intervention measures.
+351
+9,376
+452
+The Federal Constitutional Court declared in Case No. 2 BvL 29/14
+that section 36(6a) of the Corporate Tax Act (Körperschaft-
+steuergesetz - KStG) as amended by the Tax Act 2010
+(Jahressteuergesetz 2010) is incompatible with the Basic Law.
+Based on this court order, the provision may result in an unjustified
+loss of potential to reduce a company's corporate tax that could
+have been realized at the time of the transition from the
+"imputation system" (Anrechnungsverfahren) to the "half-income
+system" (Halbeinkünfteverfahren). In accordance with the decision
+of the Federal Constitutional Court, the legislator was required to
+remedy the violation of constitutional law by December 31, 2023,
+with retroactive effect. However, the legislator has not yet taken
+any action in this respect. Therefore, it is not currently clear how
+the legislator will structure the new regulation. Depending on how
+the new legislation is enacted, this could potentially result in a tax
+refund for E.ON SE in the future of up to a low, three-digit million
+euro amount in the context of ongoing appeal proceedings. Due to
+7,412
+Total
+33
+thereof subject to an only contractual
+restriction
+1,600
+452
+7,324
+5,585
+In addition, the E.ON Group had contingent assets in the amount of
+about €0.3 billion as of December 31, 2023 (2022: €23 million)
+due to pending legal proceedings.
+Balance as of December 31
+Balance as of January 1
+€ in millions
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+177
+→ Notes
+Receivables within the scope of IFRS 15 mainly comprise trade
+receivables. Value adjustments recognized in profit or loss on
+receivables within the scope of IFRS 15 totaled -€1.0 billion in
+2023 (2022: -€0.7 billion).
+As of the reporting date, other financial assets include receivables
+from interests in jointly owned power plants of €65 million (2022:
+€84 million).
+1See also note 33.
+Trade receivables and other operating assets
+Total
+Other operating assets
+Other assets
+Contract assets
+Receivables from derivative financial instruments amounted to
+€7,985 million at the balance sheet date (2022: €30,746 million).
+Of this amount, €6,709 million (2022: €29,230 million) is
+attributable to forward commodity contracts. The decrease is
+primarily due to price developments on the commodity markets
+during the course of the year.
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+The following table presents the changes in other assets under
+IFRS 15:
+Contract Assets
+The following table shows the opening and closing balances of
+contractual assets within the meaning of IFRS 15:
+304
+423
+(19) Liquid Funds
+273
+251
+2022
+2023
+manner.
+the tight budgetary situation, however, it cannot be ruled out that
+the legislator will use its discretionary powers in a pro-fiscal
+Balance as of December 31
+Amortization and impairment
+€ in millions
+Other Assets
+178
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Jan. 12, 2021
+Over
+3%
+Jan. 15, 2021
+Dec. 10, 2020
+Absolute
+79,693,259
+131,004,3291
+4.96
+indirect
+3.02
+Allocation
+indirect
+indirect
+Nov. 27, 2023
+Nov. 29, 2021
+Over
+Under
+5%
+Nov. 30, 2023¹
+Percentages
+3.02
+79,741,4422
+15%
+264
+1
+E.ON Integrated Annual Report 2023
+180
+¹Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 1 and 2 WpHG.
+²Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 2 WPHG.
+3Name of shareholder holding 3.0 percent or more of the voting rights notification received: GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH.
+396,197,820
+132,657,936²
+15.00
+5.02
+direct/indirect
+Jun. 5, 2020
+Over
+5%
+Jun. 9, 2020
+indirect
+Dec. 8, 2020
+Achieved
+3%
+Current
+Nov. 30, 2021
+Achieved, over or under threshold
+The Conditional Capital 2020 was not used.
+The conditional capital increase will be implemented only to the
+extent required to fulfill the obligations arising on the exercise by
+holders of option or conversion rights, and those arising from
+compliance with the mandatory conversion of bonds with
+conversion or option rights, profit participation rights or profit
+participating bonds that have been issued or guaranteed by E.ON
+SE or a Group company of E.ON SE as defined by Section 18 AktG
+under the authorization approved by the Annual Shareholders
+Meeting of May 28, 2020, under agenda item 8, and to the extent
+that no cash settlement has been granted in lieu of conversion or
+exercise of an option or the Company exercises its right to grant
+shares in the Company in whole or in part in lieu of payment of the
+cash amount due.
+The conditional capital increase will be used to grant registered no-
+par-value shares to the holders of convertible bonds or bonds with
+warrants, profit participation rights or income bonds (or
+combinations of these instruments), in each case with option
+rights, conversion rights, option obligations and/or conversion
+obligations, which are issued by the Company or a Group company
+of the Company as defined by Section 18 of the German Stock
+Corporation Act (AktG), under the authorization approved by the
+Annual Shareholders Meeting on May 28, 2020, under agenda
+item 8, through May 27, 2025. The new shares will be issued at
+the conversion or option price to be determined in accordance with
+the authorization resolution.
+At the Annual Shareholders Meeting of May 28, 2020,
+shareholders approved a conditional increase of the capital stock
+(with the option to exclude shareholders' subscription rights) in the
+amount of up to €264 million (Conditional Capital 2020).
+Conditional Capital
+Subject to the Supervisory Board's approval, the Management
+Board is authorized to exclude shareholders' subscription rights.
+179
+By shareholder resolution adopted at the Annual Shareholders
+Meeting of May 28, 2020, the Management Board was authorized,
+subject to the Supervisory Board's approval, to increase until May
+27, 2025, the Company's capital stock by a total of up to
+€528,000,000 through one or more issuances of new registered
+no-par-value shares against contributions in cash and/or in kind
+(authorized capital pursuant to Sections 202 et seq. AktG,
+Authorized Capital 2020).
+No scrip dividend was offered in the 2023 fiscal year.
+In 2023, employees of German E.ON Group companies had the
+opportunity to purchase E.ON shares at favorable conditions under
+a voluntary employee stock purchase program. The employees
+received a grant of €360 on the shares subscribed by them in the
+period from September 1 to September 30, 2023. The applicable
+issue price of the E.ON share was €11,500. A total of 1,278,993
+shares, or 0.05 percent of the share capital of E.ON SE, were used
+and issued to employees with a weighted-average purchase price
+of €19.59 per share.
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Authorized Capital
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+Threshold
+Date of notice
+Voting rights
+Canada Pension Plan Investment Board, Toronto, Canada
+DWS Investment GmbH, Frankfurt am Main, Germany
+RWE Aktiengesellschaft, Essen, Germany³
+BlackRock Inc., New York, USA
+The Capital Group Companies Inc., Los Angeles, USA
+Information on Stockholders of E.ON SE
+The following notices pursuant to Section 33 (1) of the German
+Securities Trading Act ("WpHG") concerning changes in voting
+rights have been received:
+Voting Rights
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Gained voting rights on
+December 31, 2022
+198
+Current
+The carrying amounts of the immaterial associates accounted for
+under the equity method totaled €1,569 million (2022: €1,445
+million), and those of the joint ventures totaled €785 million
+(2022: €1,015 million).
+Shares in Companies Accounted for under the Equity
+Method
+Impairments on other financial assets amounted to €63 million
+(2022: €30 million). Write-ups totaled €1 million (2022: €3
+million). The carrying amount of other financial assets with
+impairment losses was €42 million as of the end of the fiscal year
+(2022: €30 million); the carrying amount of the other financial
+assets written up amounts to €6 million (2022: €4 million).
+The amount shown for non-current securities relates primarily to
+fixed-income securities.
+The transition effect as of January 1, 2022, amounted to €612
+million (in foreign currency OCI), partially offset by a write-down in
+accumulated retained earnings (-€381 million).
+In April 2022, Turkey was classified as a hyperinflationary
+economy. Consequently, since the second quarter of 2022, the
+financial statements prepared on the basis of historical cost have
+been adjusted in accordance with IAS 29 for the first time for two
+Turkish investees included in the Group using the equity method
+(joint ventures). Under IAS 29, financial statements in the
+functional currency of a hyperinflationary economy must be
+expressed in terms of the measuring unit current at the balance
+sheet date. As a result, among other things, non-monetary assets
+and liabilities are generally adjusted using a general price index and
+a gain or loss on the net monetary position is recognized. The
+adjustment under IAS 29 is made on the basis of the consumer
+price index as of December 31, 2023, published by the Turkish
+Statistical Institute, which amounted to 1,859.38 index points
+(December 31, 2022: 1,128.45).
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+Investment income generated from companies accounted for
+under the equity method amounted to €443 million in 2023
+(2022: €441 million).
+E.ON Integrated Annual Report 2023
+The net income from companies measured at equity of €478
+million includes impairments of €237 (2022: €878 million) and
+reversals of impairment losses of €7 million (2022: €311 million).
+These impairments and reversals primarily relate to the application
+of IAS 29 in Turkey.
+The €1,120 million increase in the carrying amounts of companies
+measured at equity compared with December 31, 2022, was
+mainly due to the increase in the carrying amount of the
+investment in Západoslovenská energetika a.s. (ZSE) in Slovakia
+and the application of IAS 29 in Turkey.
+Companies accounted for under the equity method consist solely
+of associates and joint ventures.
+1The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.
+4,026
+3,726
+3,192
+3,384
+9,070
+10,391
+Total
+1,347
+172
+The following table provides an overview of material items in the
+aggregated consolidated statements of comprehensive income of
+the immaterial associates and joint ventures accounted for using
+the equity method:
+Summarized Financial Information for Individually Non-Material Associates and Joint Ventures Accounted for under the Equity Method
+266
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+176
+61
+127
+-306
+-57
+248
+7
+-1
+-13
+Equity-method earnings
+-1
+5
+-537
+-323
+-25
+Consolidation adjustments
+62
+122
+231
+1,177
+(17) Inventories
+Non-current securities
+Joint
+Ventures¹
+2,936
+Property, Plant and Equipment
+In 2023, the Company recorded an amortization expense of €417
+million (2022: €393 million). Impairment charges on rights of use
+amounted to €2 million (2022: €3 million).
+Rights of Use
+In the year under review, €104 million (2022: €68 million) of
+research and development costs within the meaning of IAS 38
+were recognized as expenses.
+As of December 31, 2023, the closing balance of intangible assets
+with an indefinite useful life amounted to €82 million (2022: €308
+million). These assets are mainly attributable to concession rights
+from the Swedish energy grid with a value of €37 million. In 2023,
+easements/rights of way from the Energy Network Germany
+segment in the amount of €237 million were reclassified from an
+indefinite useful life to a limited useful life. Implementation has
+been done prospectively in accordance with IAS 8.36.
+In 2023, the Company recorded an amortization expense on
+intangible assets of €606 million (2022: €714 million).
+Reversals of impairments on intangible assets amounted to around
+€30 million in the current year. A write-up of €30 million was
+recognized on the Delgaz power grid in the cash generating unit
+Energy Networks Romania, bringing the new carrying amount to
+€521 million. The main reasons for this are the more stable market
+environment compared to 2021 with a functioning allocation
+mechanism, including a price cap for energy procurement for the
+distribution system operator's technological consumption, as well
+as the positive development of the regulatory asset base.
+2023, the new carrying amount of the sales platform, which
+consists of several assets and sub-assets, amounts to €84 million.
+In 2023, approximately €63 million of impairments were
+recognized on intangible assets. In terms of amount, the largest
+impairment loss occurred in the Customer Solutions Germany
+segment. The German Sales Technology Platform, a platform for
+technological solutions in German sales, was written down by €44
+million on an unscheduled basis. The migration of certain
+customers planned for calendar year 2023 has been postponed
+indefinitely. In addition, the current medium-term planning no
+longer includes costs for multi-client capability, but costs for the
+continuation of the previous billing systems. As of December 31,
+Intangible Assets
+In 2023, impairments were recognized on the goodwill of the
+Slovakian operations after they were classified as held for sale
+under IFRS 5 since the fourth quarter of 2021 (see Note 5 for
+more information). These required impairments amounted to
+approximately €44 million and are attributable to the fact that the
+fair value less costs of disposal was below the carrying amount of
+the disposal group. An impairment loss in such a case will always
+be allocated first to the carrying amount of any goodwill allocated
+to the disposal group. In November 2023, following the closing of
+the Future Consolidation Agreements the VSEH has been
+deconsolidated (see also Note 5).
+The tested goodwill of all cash-generating units whose respective
+goodwill as of the balance sheet date is material in relation to the
+total carrying amount of all goodwill shows a surplus of
+recoverable amounts over the respective carrying amounts and,
+therefore, based on current assessment of the economic situation,
+only a significant change in the material valuation parameters that
+is not considered realistic would necessitate the recognition of
+goodwill impairment.
+Impairments on property, plant and equipment amounted to €114
+million in 2023.
+The performance of the annual goodwill impairment tests in the
+2023 financial year did not result in any impairments under IAS
+36. The determination of a value in use was not necessary for any
+cash generating unit.
+Goodwill
+The above discussion applies accordingly to the testing for
+impairment of intangible assets and of property, plant and
+equipment and investments subject to the application of the equity
+method (IAS 28), and of groups of these assets. If the goodwill of a
+cash-generating unit is combined with assets or groups of assets
+for impairment testing, the assets must be tested first.
+In the Customer Solutions Germany and UK segments, we
+anticipate a significant increase in investments and a significant
+decline in sales revenue during our detailed planning period
+compared to the 2023 financial year. The decline in revenues in
+spite of a comparable number of customers is due to the
+assumption that prices on the commodity markets will normalize.
+We expect a moderate increase in estimated EBITDA margins in
+the detailed planning period in the Customer Solutions UK and
+Germany segments due to the planned portfolio optimization and
+the expansion of our growth business areas.
+Against the backdrop of the expansion of the network, which is
+key to achieving climate protection targets, the detailed planning
+period provides for a significant increase in investments in the
+Energy Networks Germany segment, with a corresponding
+increase in the regulated asset base. We expect regulatory returns
+to remain stable.
+Overall, medium-term planning assumes that the regulatory
+environment will remain stable.
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+December 31, 2023
+Non-current
+On September 11, 2023, the Board of Management of E.ON SE
+adopted a new management concept for the Group. This will take
+effect from 1 January, 2024, and, due to the concept in IFRS 8,
+will require a change in the definition of the operating segments
+and thus also a reallocation of the existing goodwill of all segments
+affected by the changes as of 1 January, 2024. The decision of the
+Board of Management was seen as a triggering event to review the
+recoverability of these goodwill amounts. As of September 2023,
+no impairment losses were identified.
+171
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+Associates¹
+2,596
+788
+2,191
+296
+5,532
+Joint
+Ventures¹
+3,730
+Associates¹
+2,923
+803
+2,561
+6,653
+Companies accounted for under the equity method
+Equity investments
+E.ON Group
+December 31, 2022
+December 31, 2023
+€ in millions
+Companies Accounted for under the Equity Method and Other Financial Assets
+The following table shows the structure of the companies
+accounted for under the equity method and the other financial
+assets as of the dates indicated:
+(16) Companies Accounted for under the Equity
+Method and Other Financial Assets
+Borrowing costs in the amount of €8 million were capitalized in
+2023 (2022: €8 million) as part of the historical cost of property,
+plant and equipment.
+In 2023, land and buildings as well as technical equipment and
+machinery in the amount of €173 million (2022: €0 million) were
+subject to restrictions on disposal.
+Depreciation amounted to €2,313 million in 2023 (2022: €2,219
+million).
+Reversals of impairments on property, plant and equipment
+amounted to around €3 million in the current year (2022: €17
+million).
+In the UK, impairment losses amounted to €29 million, mainly due
+to the full write-off of conventional meters that were no longer
+needed and which have been replaced by smart energy meters
+(€14 million), as well as the impairment on the Monkerton
+combined heat and power plant (€13 million, new book value €25
+million) due to lower earnings expectations and higher cost of
+capital.
+The Customer Solutions Germany segment was most affected
+(€76 million). Two geothermal plants in Kirchwaidach (by €25
+million) and Heidelberg (by €12 million) were impaired to their new
+carrying amounts of €15 million and €47 million, respectively. The
+main reasons for the impairments were the expected sustained
+decline in earnings as well as disagreements with the customer of
+one plant regarding further investment requirements. In addition,
+in the past, construction work on one of the large biomass power
+plant projects (Green Steam Hürth) had been significantly delayed
+due to the Covid-19 pandemic, rising procurement costs and
+financial challenges on the part of our technical suppliers.
+Although these problems have been solved in the meantime, based
+on the latest assessments of the business case, there was an
+impairment loss of €28 million (new carrying amount €142
+million).
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+256
+The following table provides a breakdown of inventories as of the
+dates indicated:
+E.ON Group
+(18) Receivables and Other Assets
+49.00
+49.00
+Proportional share of total comprehensive income after taxes
+-13
+-1
+24
+496
+-82
+653
+1,264
+123
+62
+Proportional share of net income after taxes
+-13
+-1
+32
+248
+-5
+319
+503
+-23
+50.00
+50.00
+-41
+52
+2
+1
+-26
+-2
+59
+1,241
+1,305
+2,528
+250
+127
+-18
+Ownership interest (in %)
+50.00
+40.00
+40.00
+620
+-20
+43
+36
+93
+63
+37
+50.00
+-15
+2022
+618
+1,140
+774
+640
+€ in millions
+2023
+December 31,
+Inventories
+Total
+750
+Goods purchased for resale
+Work in progress and finished products
+The following table lists receivables and other assets by remaining
+time to maturity as of the dates indicated:
+2,066
+€ in millions
+Raw materials and supplies
+Receivables and Other Assets
+2.75
+3.16
+3.71
+4.50
+4.80
+1.10
+1.90
+Wage and salary growth
+rate
+Germany
+2.95
+United Kingdom
+The sensitivities indicated are computed based on the same
+methods and assumptions used to determine the present value of
+the defined benefit obligations. If one of the actuarial assumptions
+is changed for the purpose of computing the sensitivity of results
+to changes in that assumption, all other actuarial assumptions are
+included in the computation unchanged.
+2.10/2.50
+Change in mortality by (percent)
+Change in percent
+Change in the pension increase rate by (basis points)
+Change in percent
+Change in the wage and salary growth rate by (basis points)
+Change in percent
+Change in the discount rate by (basis points)
+The IAS 19 discount rates for the EUR and GBP currency areas are
+determined on the basis of the single equivalent discount rate
+method. The full yield curve is used to determine the present value
+of the defined benefit obligations, and the IAS 19 discount rate
+disclosed is determined retrospectively as the discount rate that
+leads to the identical present value of the defined benefit
+obligations when applied uniformly. The yield curve "RATE:Link"
+from provider WTW is used to determine the present value.
+3The pension increase rate for Germany applies to eligible individuals not subject to an agreed
+guarantee adjustment.
+= Contents Q Search ← Back
+Change in percent
+2Different salary growth rates due to different benefit plans (E.ON: 2.10 percent (2022: 2.20
+percent); Npower: 2.50 percent (2022: 2.70 percent)).
+1The discount rates used to determine service cost were 3.59 percent (2022: 1.10 percent) in
+Germany and 4.78 percent (2022: 1.90 percent) in the UK.
+3.10
+1.60
+2.00
+3.10
+2.20
+2.90
+United Kingdom
+Germany³
+Sensitivities
+Changes in the actuarial assumptions described previously would
+lead to the following changes in the present value of the defined
+benefit obligations:
+Pension increase rate
+2.20/3.20
+2.20/2.70
+2.35
+United Kingdom²
+-6.30
++ 50
+-2.05
+2.28
+When considering sensitivities, it must be noted that the change in
+the present value of the defined benefit obligations resulting from
+changing multiple actuarial assumptions simultaneously is not
+necessarily equivalent to the cumulative effect of the individual
+sensitivities.
+187
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Balance Sheets
+Description of Plan Assets and the Investment Policy
+2.36
+The defined benefit plans are funded by plan assets held in
+specially created pension vehicles that legally are distinct from the
+Company. The fair value of these plan assets changed as follows:
+= Contents Q Search ← Back
+€ in millions
+Fair value of plan assets as of January 1
+Interest income on plan assets
+Remeasurements
+Total
+16,787
+Germany
+12,863
+United
+Kingdom
+2023
+Other
+countries
+2022
+Total
+Changes in the Fair Value of Plan Assets
+-2.11
+-10
++10
+-50
++50
+-50
+Germany
+7.09
+-6.15
+6.88
++25
+-25
++25
+-25
+0.26
+-0.25
+0.28
+-0.28
++25
+-25
++25
+-25
+1.88
+-1.77
+1.86
+-1.78
++10
+-10
+Change in the present value of the defined benefit obligations
+December 31, 2023
+December 31, 2022
+United Kingdom
+-2
+"S3" series base mortality tables with the CMI 2022
+projection model for future improvements
+442
+Defined benefit obligations as of December 31
+Other
+Exchange rate differences
+Changes in scope of consolidation
+Benefit payments
+Actuarial gains (-)/losses (+) arising from experience adjustments
+Employee contributions
+-6
+-2,066
+411
+-6,739
+4
+63
+1,451
+1,518
+Actuarial gains (-)/losses (+) arising from changes in financial assumptions
+-27
+-27
+-
+-104
+-8,811
+-104
+29
+428
+-1
+21
+20
+-3
+-252
+-813
+-1,068
+-4
+-244
+2
+-853
+1
+2
+3
+1
+2
+3
+3
+65
+360
+-1,101
+3,915
+Actuarial gains (-)/losses (+) arising from changes in demographic assumptions
+-3
+The actuarial losses shown in the table for the development of the
+present value of the defined benefit obligations are primarily
+attributable to a decrease in the discount rates used.
+The present value is attributable to retirees and their beneficiaries
+in the amount of €13.5 billion (2022: €12.7 billion), to former
+employees with vested entitlements in the amount of €2.8 billion
+(2022: €2.4 billion) and to active employees in the amount of €5.4
+billion (2022: €4.8 billion).
+186
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+37
+December 31,
+2022
+2021
+Discount rate¹
+The actuarial assumptions used to measure the defined benefit
+obligations and to compute the net periodic pension cost at E.ON's
+German and UK subsidiaries as of the respective balance sheet
+date are as follows:
+Actuarial Assumptions
+Percentages
+To measure the E.ON Group's occupational pension obligations for
+accounting purposes, the Company has employed the current
+versions of the biometric tables recognized in each respective
+country for the calculation of pension obligations:
+Actuarial Assumptions (Mortality Tables)
+2018 G versions of the Heubeck biometric tables
+(2018)
+2023
+3,832
+16,028
+19,897
+-2,028
+-6,379
+-8,410
+6
+-12
+1,862
+1,856
+7
+7
+79
+79
+-243
+-244
+1
+-3
+21,710
+-1
+-12
+-12
+17,811
+3,858
+41
+Germany
+9
+Total
+465
+33
+48
+20
+14
+37
+17
+19
+11
+10
+37
+1
+66
+59
+88
+6
+6
+6
+1
+1
+11
+37
+14
+3
+19
+43
+52
+28
+22
+47
+17
+21
+5
+7
+25
+30
+64
+90
+December 31, 2022
+Other
+countries
+Other
+countries
+Total
+Germany
+United
+Kingdom
+|| | || |
+70
+45
+13
+2
+100
+100
+100
+100
+100
+100
+100
+100
+The fundamental investment objective for the plan assets is to
+provide full coverage of benefit obligations at all times for the
+payments due under the corresponding benefit plans. This
+investment policy stems from the corresponding governance
+guidelines of the Group. An increase in the net defined benefit
+liability or a deterioration in the funded status following an
+unfavorable development in plan assets or in the present value of
+the defined benefit obligations is identified in these guidelines as a
+risk. E.ON therefore regularly reviews the development of the
+funded status in order to monitor this risk.
+100
+To implement the investment objective, the E.ON Group primarily
+pursues an investment approach that takes into account the
+structure of the benefit obligations. This long-term investment
+The determination of the target portfolio structure for the
+individual plan assets is based on regular asset-liability studies. In
+these studies, the target portfolio structure is reviewed in a
+comprehensive approach against the backdrop of existing
+investment principles, the current funded status, the condition of
+the capital markets and the structure of the benefit obligations,
+and is adjusted as necessary. The parameters used in the studies
+are additionally reviewed regularly, at least once each year. Asset
+managers are tasked with implementing the target portfolio
+structure. They are monitored for target achievement on a regular
+basis.
+189
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+strategy seeks to manage the funded status, with the result that
+any changes in the defined benefit obligations, especially those
+caused by fluctuating inflation and interest rates are, to a certain
+degree, offset by simultaneous corresponding changes in the fair
+value of plan assets. The investment strategy may also involve the
+use of derivatives (for example, interest rate swaps and inflation
+swaps, as well as currency hedging instruments) to facilitate the
+control of specific risk factors of pension liabilities. In the table
+above, derivatives have been allocated, based on their substance,
+to the respective asset classes. In order to improve the funded
+status of the E.ON Group as a whole, a portion of the plan assets
+will also be invested in a diversified portfolio of asset classes that
+are expected to provide for long-term returns in excess of those of
+fixed-income investments and the discount rate.
+2
+12
+34
+1
+100
+3
+3
+1
+7
+10
+2
+623220
+41
+17
+8
+100
+1
+11
+3
+30
+36
+10
+100
+63720
+8
+21
+18
+Employer contributions
+Benefit payments
+Changes in scope of consolidation
+Exchange rate differences
+Other
+Fair value of plan assets as of December 31
+339
+314
+25
+1
+170
+48
+-796
+-244
+-1
+-971
+-719
+-252
+6
+6
+122
+81
+2
+1
+199
+23,469
+354
+Germany
+16,879
+185
+429
+491
+-62
+-5,984
+-3,605
+United
+Kingdom
+6,581
+169
+-2,379
+3
+Other
+countries
+Return on plan assets recognized in equity, not including amounts contained in the interest income on plan assets
+Employee contributions
+429
+491
+-62
+-5,984
+-3,605
+-2,379
+3
+2
+9
+81
+-253
+-253
+Percentages
+Plan assets listed in an active market
+Equity securities (stocks)
+Debt securities
+thereof Government bonds
+thereof Corporate bonds
+Other investment funds
+Total listed plan assets
+Plan assets not listed in an active market
+Classification of Plan Assets
+Equity securities not traded on an exchange
+Real estate
+Qualifying insurance policies
+Cash and cash equivalents
+Other
+Total unlisted plan assets
+Total
+December 31, 2023
+Remeasurements
+Germany
+United
+Kingdom
+Debt securities
+The plan assets thus classified break down as shown in the
+following table:
+→ Notes
+→ Consolidated Balance Sheets
+1
+2
+-1
+-1
+-1
+17,269
+13,347
+3,914
+8
+16,787
+12,863
+3,915
+9
+The plan assets include virtually no owner-occupied real estate or
+equity and debt instruments issued by E.ON Group companies.
+Each of the individual plan asset components has been allocated to
+an asset class based on its substance.
+188
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+664
+1
+Total
+246
+Non-current liabilities
+Current liabilities
+¹Holding companies without operational business.
+2Calculated share ratio.
+Subsidiaries with Material Non-Controlling Interests-Earnings Data
+€ in millions
+Share of earnings attributable to non-controlling interests
+Sales
+Net income/loss
+Current assets
+Comprehensive income
+There are no major restrictions beyond those under customary
+corporate or contractual provisions. The amount of €80 million
+(2022: €301 million) was reclassified from non-controlling
+interests to liabilities in connection with guaranteed dividends.
+envia
+Schleswig-Holstein Netz AG
+2023
+2022
+Mitteldeutsche Energie AG
+2023
+E.DIS AG¹
+2022
+2023
+2022
+¹Holding companies without operational business.
+2023
+Non-current assets
+Dividends paid out to non-controlling interests
+-202
+Remeasure-
+ments of
+defined
+benefit plans
+-201
+1111
+-222
+-139
+-210
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+Operating cash flow
+= Contents Q Search Back
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+In compliance with IFRS 12, the following tables include
+subsidiaries with significant non-controlling interests and provide
+an overview of significant items on the aggregated balance sheet
+and on the aggregated income statement, and significant cash
+flow items. The list of shareholdings pursuant to Section 313 (2)
+HGB (see Note 38) contains information on the registered office of
+the company and disclosures on equity interests.
+Subsidiaries with Material Non-Controlling Interests-Balance Sheet Data as of December 31
+€ in millions
+Non-controlling interests in equity
+Non-controlling interests in equity (in %)²
+→ Consolidated Statement of Income
+Currency
+translation
+adjustments
+Avacon AG¹
+2022
+545
+-11
+-18
+-44
+-42
+2,080
+1,918
+3,719
+3,573
+1,826
+138
+1,811
+1,936
+371
+182
+710
+571
+226
+86
+433
+123
+2,175
+581
+135
+295
+1,156
+1,249
+564
+542
+538
+505
+31
+31
+42
+447
+42
+33
+39
+39
+68
+80
+30
+30
+50
+50
+33
+securities
+sale
+Cash flow
+hedges
+The amount of retained earnings available for distribution is
+€3,146 million (2022: €2,467 million).
+A proposal to distribute a cash dividend for 2023 of €0.53 per
+share will be submitted to the Annual Shareholders Meeting. For
+2022, shareholders at the May 17, 2023, the Annual Shareholders
+Meeting voted to distribute a dividend of €0.51 for each dividend-
+paying ordinary share. Based on a €0.53 dividend, the total profit
+distribution is €1,384 million (2022: €1,331 million).
+(23) Changes in Other Comprehensive Income
+The change in other comprehensive income is primarily the result
+of exchange rate differences recognized on the balance sheet,
+indexation effects from the application of IAS 29 (hyperinflationary
+accounting) in Turkey, and the recognition of actuarial gains and
+losses.
+The table below illustrates the share of OCI attributable to
+companies accounted for under the equity method.
+Share of OCI Attributable to Companies Accounted for under the
+Equity Method
+€ in millions
+2023
+2022
+As of December 31, 2023, these German-GAAP retained earnings
+totaled €3,294 million (2022: €2,630 million). Of this amount,
+legal reserves of €45 million (2022: €45 million) are restricted
+pursuant to Section 150 (3) and (4) AktG. The increase in retained
+earnings is due to the transfer of €650 million to the revenue
+reserve from the current result, as well as the sale of treasury
+shares under the employee stock purchase program in 2023. In
+addition, amounts of €102.9 million (2022: €117.6 million) are
+restricted from distribution under German commercial law as a
+result of the surplus of plan assets and the difference between the
+recognition of provisions for retirement benefit obligations based
+on the corresponding average market interest rate over the past
+ten fiscal years and the recognition of these provisions based on
+the corresponding average market interest rate over the past
+seven fiscal years. The dividend-restricted amounts are fully
+covered by a sufficient amount of available reserves.
+Balance as of December 31 (before taxes)
+Taxes
+-889
+Balance as of December 31 (after taxes)
+-412
+-889
+181
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+-412
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+Under German securities law, E.ON SE shareholders may receive
+distributions from E.ON SE's income available for distribution in
+accordance with the German Commercial Code (German GAAP).
+45
+3,172
+3,217
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+(21) Additional Paid-in Capital
+Additional paid-in capital decreased by €11 million to €13,327
+million in 2023 (2022: €13,338 million). The reduction in
+additional paid-in capital is attributable to the issue of employee
+shares to eligible employees of the E.ON Group.
+As of December 31, 2023, these IFRS retained earnings totaled
+€1,491 million (2022: €3,217 million). The total change of
+-€1,726 million is primarily due to E.ON SE's distribution to
+shareholders. In addition, actuarial losses from pensions led to a
+change in retained earnings. This was partially offset by the
+positive consolidated net income.
+(22) Retained Earnings
+Retained Earnings
+€ in millions
+Legal reserves
+Other retained earnings
+Total
+December 31,
+2022
+2023
+45
+1,446
+1,491
+The following table breaks down the E.ON Group's retained
+earnings as of the dates indicated:
+→ Consolidated Balance Sheets
+(24) Non-Controlling Interests
+Non-controlling interests by segment as of the dates indicated are
+shown in the following table:
+569
+Germany
+351
+366
+UK
+2
+2
+The Netherlands
+Other
+621
+268
+Corporate Functions/Other
+258
+266
+E.ON Group
+5,856
+5,944
+182
+= Contents Q Search ← Back
+Available-for-
+201
+Customer Solutions
+Balance as of December 31, 2023
+649
+Non-Controlling Interests
+€ in millions
+Energy Networks
+Germany
+The table below illustrates the share of OCI that is attributable to
+non-controlling interests:
+Share of OCI Attributable to Non-Controlling Interests
+December 31,
+€ in millions
+2023
+2022
+Balance as of January 1, 2022
+4,977
+5,109
+Changes
+4,578
+4,460
+Balance as of December 31, 2022
+Sweden
+Changes
+ECE/Turkey
+399
+577
+158
+477
+509
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Balance Sheets
+The Pensions Regulator in the United Kingdom requires that a so-
+called "technical valuation" of the plan's funding status be
+performed every three years. The actuarial assumptions
+underlying the valuation are agreed upon by the trustees and E.ON
+UK plc. They include presumed life expectancy, wage and salary
+growth rates, investment returns, inflationary assumptions and
+interest rate levels.
+The last technical valuation for the E.ON UK Section took place on
+the reporting date of March 31, 2021, and no technical funding
+deficit was identified. The most recent completed technical
+valuation carried out for the Npower section was completed as of
+March 31, 2022, and there was also no technical financing deficit
+identified.
+Other Countries
+184
+The remaining pension obligations are divided between the
+Netherlands, Luxembourg, Sweden, Italy, Poland, Romania, the
+Czech Republic and the USA.
+commitments made by various employers within the framework of
+a sector-specific fund and does not permit a pro rata allocation of
+the obligations, plan assets and service cost. The E.ON Group
+accordingly accounts for this obligation as a defined contribution
+plan. There are no minimum funding requirements in this respect.
+Benefits may be reduced or contributions increased if there is
+insufficient funding.
+From the perspective of the Group, however, the benefit plans are
+relatively insignificant in the above-mentioned countries.
+185
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+The defined benefit plan in the Netherlands consists of
+→ Notes
+Plan assets in the United Kingdom are administered by trustees in
+independent special-purpose vehicles, most of which are separate
+sections of the Electricity Supply Pension Scheme (ESPS). The
+trustees are selected by the members of the plan or appointed by
+the entity. In that capacity, the trustees are particularly responsible
+for the investment of the plan assets.
+United Kingdom
+33
+Description of the Pension Cost
+4,441
+28
+3,110
+Presented as operating receivables
+-544
+-625
+Presented as provisions for pensions and
+similar obligations
+In the United Kingdom, there are various pension plans. In the past,
+employees were covered by defined benefit plans, which for the
+most part were final-pay plans and make up the majority of the
+pension obligations currently reported for the United Kingdom.
+Benefit payments to the beneficiaries are adjusted for inflation on
+a limited basis. These pension plans were closed to new hires.
+Since then, new hires are offered a defined contribution plan. Aside
+from the payment of contributions, this plan entails no additional
+risks for the employer.
+4,985
+Description of the Benefit Plans
+In addition to their entitlements under government retirement
+systems and the income from private retirement planning, most
+active and former E.ON Group employees are also covered by
+occupational benefit plans. Both defined benefit plans and defined
+contribution plans are in place at E.ON. Benefits under defined
+benefit plans are generally paid upon reaching retirement age, or in
+the event of disability or death.
+E.ON regularly reviews the pension plans in place within the Group
+for financial risks. Typical risk factors for defined benefit plans are
+longevity and changes in nominal interest rates, as well as inflation
+developments and rising wages and salaries.
+The features and risks of defined benefit plans are shaped by the
+general legal, tax and regulatory conditions prevailing in the
+respective country. The configurations of the major defined benefit
+and defined contribution plans within the E.ON Group are
+described in the following discussion.
+Germany
+Active employees at the German Group companies are covered by
+both cash balance plans and pension plans based on final salary.
+Pension plans based on final salary are closed to new hires. All new
+hires will receive cash balance plans in accordance with a capital or
+pension module system, which, depending on the pension plan,
+can provide for alternative payout options of a prorated single
+payment and payments of installments in addition to the payment
+of a regular pension. The cash balance plans used different interest
+rules until December 31, 2021. Depending on the underlying
+pension plan, either interest rates adjusted to market
+developments with a fixed lower limit or guaranteed interest rates
+were used to determine the capital or pension modules. The
+majority of pension commitments still with a fixed guaranteed
+interest rate were modified as of January 1, 2022, in that the
+pension modules acquired from January 1, 2022, onwards now
+also bear interest at a rate adjusted to market developments and
+protected by a fixed lower limit. The benefit expense for the cash
+balance plans is determined at different percentage rates based on
+the ratio between compensation and the contribution limit in the
+statutory retirement pension system in Germany. Employees can
+additionally choose to defer compensation.
+Future pension adjustments are either guaranteed at 1 percent per
+annum or largely track the development of the inflation rate,
+usually in a three-year cycle.
+To fund the pension plans for the German Group companies, plan
+assets were established. The major part of these plan assets is
+administered in the form of Contractual Trust Arrangements
+("CTAS") in accordance with specified investment principles. There
+are additional plan assets available through the implementation
+channels of the pension fund ("Pensionsfonds") and smaller
+German pension vehicles ("Pensions- und Unterstützungskassen").
+Only the pension fund and the "Pensionskassen" vehicles are
+subject to regulatory provisions in relation to the investment of
+capital and funding requirements.
+3,735
+Other countries
+Description of the Benefit Obligations
+defined benefit obligations for the periods indicated:
+287
+20
+2
+16
+20
+-4
+7
+8
+2
+309
+-3
+1
+-3
+-3
+Interest cost on the present value of the defined benefit obligations
+778
+582
+194
+2
+405
+1
+The following table shows the changes in the present value of the
+2
+151
+Changes in the Defined Benefit Obligations
+2023
+= Contents Q Search ← Back
+2022
+€ in millions
+Total
+19,897
+Germany
+16,028
+United
+Kingdom
+Other
+countries
+11
+3,832
+Total
+28,902
+Germany
+22,685
+United
+Kingdom
+6,175
+Other
+countries
+42
+Employer service cost
+Past service cost
+Gains (-) and losses (+) on settlements
+164
+37
+-83
+-56
+United Kingdom
+65
+-17
+28
+52
+39
+84
+30
+1,143
+349
+2022
+340
+5
+13
+12
+112
+116
+39
+80
+153
+123
+4
+239
+2023
+2023
+6
+4
+729
+45
+812
+610
+823
+715
+302
+2022
+212
+536
+envia
+Schleswig-Holstein Netz AG
+2023
+61
+1,294
+2022
+Mitteldeutsche Energie AG
+2023
+E.DIS AG¹
+Avacon AG¹
+2022
+295
+100
+112
+116
+17,811
+3,858
+41
+16,028
+3,832
+37
+Total
+21,710
+19,897
+Fair value of plan assets
+Germany
+13,347
+United Kingdom
+Other countries
+Other countries
+12,863
+3,915
+9
+Total
+17,269
+16,787
+Net defined benefit liability/asset (-)
+Germany
+4,464
+3,165
+3,914
+8
+United Kingdom
+Germany
+obligations
+39
+80
+153
+123
+239
+100
+183
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+(25) Provisions for Pensions and Similar Obligations
+The retirement benefit obligations toward the active and former
+employees of the E.ON Group, which amounted to €21.7 billion,
+were covered by plan assets having a fair value of €17.3 billion as
+of December 31, 2023. This corresponds to a funded status of 80
+percent.
+Provisions for Pensions and Similar Obligations
+€ in millions
+Present value of all defined benefit
+2023
+December 31,
+2022
+842
+The net periodic pension cost for defined benefit plans included in
+the provisions for pensions and similar obligations and in operating
+receivables is shown in the table below:
+-1,041
+€ in millions
+2026
+2
+228
+902
+1,132
+2025
+3
+228
+899
+1,130
+2024
+countries
+Other
+United
+Kingdom
+Germany
+Total
+€ in millions
+The weighted-average duration of the defined benefit obligations
+measured within the E.ON Group was 13.5 years as of December
+31, 2023 (2022: 13.2 years).
+For the following fiscal year, it is expected that employer
+contributions to plan assets will amount to a total of €177 million.
+Prospective Benefit Payments
+Prospective benefit payments under the defined benefit plans
+existing as of December 31, 2023, for the next ten years are
+shown in the following table:
+1,139
+908
+228
+3
+Net Periodic Pension Cost
+E.ON Integrated Annual Report 2023
+190
+39
+2,267
+9,264
+11,570
+Total
+25
+1,125
+Description of Contributions and Benefit Payments
+4,709
+2029-2033
+3
+229
+927
+1,159
+2028
+3
+229
+1,151
+2027
+5,859
+Contributions to state plans totaled €0.4 billion (2022: €0.4
+billion).
+919
+11
+2
+20
+Other
+countries
+United
+Kingdom
+Germany
+287
+309
+2
+11
+Total
+Other
+countries
+Germany
+151
+164
+Total
+2022
+= Contents Q Search Back
+2023
+Net interest on the net defined benefit liability/asset
+Total
+Gains (-) and losses (+) on settlements
+Past service cost
+Employer service cost
+In addition to the total net periodic pension cost for defined benefit
+plans, an amount of €104 million in contributions to external
+insurers or similar institutions was paid in 2023 (2022: €96
+million) for defined contribution plans.
+16
+20
+United
+Kingdom
+7
+353
+-4
+364
+4
+3
+288
+295
+-11
+61
+51
+2
+1
+1
+2
+-5
+-3
+1
+-3
+8
+-3
+-
+114
+117
+€0.53²
+12.38
+12.63
+€0.51
+€0.49
+0.53
+0.51
+1,384
+0.50
+45%
+€0.47
+1,331
+0.40-
+0.10
+9.47
+7.41
+12.15
+9.33
+33.77
+24.65
+0.30
+15
+0.20-
+2019
+2020
+49%
+2021
+€0.46
+51%
+Twelve-month high²
+2023
+2022
+At the 2024 Annual Shareholders Meeting on May 16, 2024, the Management Board and
+Supervisory Board will propose paying out a cash dividend of €0.53 per share for the 2023
+financial year (prior year: €0.51). Based on E.ON stock's year-end 2023 closing price, the
+dividend yield is 4 percent. The payout ratio (as a percentage of adjusted net income) is 45
+percent. Our dividend policy aims to offer our shareholders attractive dividend growth of up
+to 5 percent annually.
+E.ON Stock Key Figures
+Per share (€)
+Dividend¹
+Dividend payout¹ (€ in millions)
+130
+120-
+110
+100
+90
+Twelve-month low²
+Year-end closing price²
+Market capitalization³ (€ in billions)
+¹For the respective financial year; the 2023 figure represents management's dividend proposal.
+2Source: NASDAQ.
+3Based on ordinary shares outstanding at year-end.
+0
+Dec. Jan. Feb. Mar.
+Apr. May Jun. Jul. Aug. Sep.
+Oct.
+Nov. Dec.
+Based on the performance index.
+Source: NASDAQ.
+Dividend per Share
+€ per share
+Dividend payout ratio¹
+79%
+75%
+2022
+2023
+E.ON Integrated Annual Report 2023
+E.ON Integrated Annual Report 2023
+ENAG99
+International Securities Identification Number (ISIN)
+DE000ENAG999
+16
+42%
+Germany
+¹Percentages based on total investors identified.
+Source: NASDAQ (as of December 31, 2023).
+19%
+17%
+15%
+7%
+United Kingdom
+USA and Canada
+Rest of Europe
+Rest of World
+Continuous Dividend Growth
+To Our Investors
+→ E.ON on the Capital Market
+→ CEO Letter → Report of the Supervisory Board
+= Contents Q Search ← Back
+Ongoing Investor Communications
+Our investor relations continue to be founded on four principles:
+openness, continuity, credibility, and equal treatment of all our
+investors. Our mission is to provide prompt, precise, and relevant
+information at our periodic conferences and road shows
+worldwide-because maintaining regular communications and
+relationships is essential for good investor relations. The subsiding
+of the Covid-19 pandemic enabled us to carry out a significant part
+of our investor relations activities in 2022 in person. A hybrid
+approach of virtual and in-person activities has proven to be
+effective. This helps us communicate with capital markets
+efficiently and purposefully and meet our investors' needs.
+Foresightful Funding, Stable Credit Rating
+Debt capital represents a very important financing source for the
+E.ON Group. That is why we focus on satisfying the demands of
+creditors as well as those of shareholders. During the year under
+review, the credit ratings of Standard & Poor's, Moody's, and Fitch
+remained stable, reflecting the confidence in E.ON's
+creditworthiness and thus supporting its competitiveness for
+future financing activities.
+E.ON issued euro-denominated bonds totaling €3.3 billion in the
+2023 financial year and, at year-end 2023, had a solid funding
+situation that serves in part as prefinancing for the 2024 financial
+year. In addition, E.ON continually aims to maximize the diversity
+of its investor base to ensure that it has cost-optimized access to a
+variety of funding sources at all times. This periodically exploring
+opportunities for issuing bonds in other currencies.
+E.ON has a €10 billion Commercial Paper ("CP") program and a
+US$10 billion CP program, under which it can issue short-term
+notes.
+Financial Framework for Sustainable Funding
+Sustainability aspects play an increasingly important role in many
+international investors' decision for or against a particular
+investment. In 2021 E.ON became the first company to fully align
+its Green Bond Framework, under which it issues debt instruments
+whose issuance proceeds fund sustainable investment projects,
+not only with the ICMA Green Bond Principles but also with the EU
+Taxonomy. The EU Taxonomy Regulation defines which economic
+activities are classified as environmentally sustainable, thereby
+setting a Europe-wide standard for sustainable investment. E.ON
+generally intends to cover more than 50 percent of its annual
+financing requirements with green bonds. Green bonds accounted
+for about 75 percent of total bond financing of just under €2.5
+billion in 2023. We provide detailed information on the topic of
+financing in the Financial Situation chapter.
+Germany
+Security Identification Numbers
+Bloomberg: ADR over-the-counter code
+Shareholder Structure by Country/Region¹
+To Our Investors
+→ E.ON on the Capital Market
+→ CEO Letter
+→ Report of the Supervisory Board
+= Contents Q Search ← Back
+Broad International Investor Base
+The most recent survey at year-end 2023 shows that E.ON stock has roughly 60 percent
+institutional investors, roughly 21 percent retail investors, and about 19 percent other
+investors. Investors in Germany hold about 42 percent of E.ON stock, those outside
+Germany about 58 percent.
+E.ON stock trades in Frankfurt am Main and on other German stock exchanges as well as
+via electronic trading platforms such as Xetra. It is also available on stock exchanges in
+other European countries. E.ON stock is included in the DAX and other indices in Europe,
+such as the Euro Stoxx 600 Utilities, MSCI World, and the S&P Europe 350.
+E.ON stock trades over the counter on OTC Pink in the United States in the form of
+American depositary receipts ("ADRs"). E.ON's ADR program offers U.S. investors the
+opportunity to acquire E.ON stock and hold it in the form of share certificates that are
+traded and settled like other U.S. stocks.
+Analyst Estimates
+E.ON stock is rated by a large number of financial analysts from various investment banks
+and brokerage houses. The current recommendations can be viewed at
+www.eon.com/en/analysts-estimates.
+E.ON Stock Symbols and Identification Numbers
+Reuters: Xetra
+¹Payout ratio based on adjusted net income.
+2Pending approval by the 2024 Annual Shareholders Meeting.
+Reuters: Frankfurt Stock Exchange
+EONGN.DE
+EONGn.F
+EOAN GY
+EOANGY US
+Shareholder Structure by Group¹
+60%
+Institutional investors
+21%
+19%
+Retail investors
+Other²
+¹Percentages based on total investors identified (excluding treasury shares).
+2Includes RWE, treasury shares and other.
+Source: NASDAQ (as of December 31, 2023).
+Bloomberg: Frankfurt Stock Exchange
+E.ON stock's value performance at the end of 2023 had improved by 30 percent relative to
+its year-end closing price for 2022, thereby outperforming the DAX index of blue-chip
+German stocks (20 percent) and also its European peer index, the Euro Stoxx 600 Utilities
+(12 percent). On December 29, 2023, E.ON stock closed the year at a price of €12.15
+compared with €9.33 at year-end 2022. High inflation, prime interest rate hikes along with
+concerns about more interest rate increases, economic uncertainty, the ongoing war in
+Ukraine, and the escalation of the Middle East conflict had a significant impact on the
+performance of European and German stocks in 2023.
+2023
+E.ON on the Capital Market
+451
+2022
+253
+85
+86
+2023
+2022
+2023
+¹System Average Interruption Duration Index. Figures refer to the respective prior year:
+2023 to 2022, 2022 to 2021.
+2Weather-related high unplanned outages (tornado).
+12
+12.18
+2022
+13.80
+2023
+E.ON Integrated Annual Report 2023
+= Contents Q Search ← Back
+Key Performance Indicators
+Customer
+Solutions
+Energy Sales and residential customer solutions
+Number of electricity and gas customers¹ (millions)
+47.6
+47.3
+Number of residential customer solutions installed¹
+(thousands)
+133
+124
+вос
+2023
+2022
+2023
+2022
+Power
+36.1 (31.5)
+Gas
+6.0 (5.3)
+Small differences in reported combined figures may occur due to rounding.
+Including Turkey and the Slovakian ZSES.
+22022 RAB for Sweden restated.
+= Contents Q Search ← Back
+Energy transmitted (billion kWh)
+Power
+320.3
+307.7
+Gas
+2022
+20231
+202.8
+Share of green power sales (%)
+189.8
+20231
+¹VSEH of Slovakia is only included until its transfer to ZSE (end of November).
+Average duration of grid outages for electricity
+(SAIDI¹) (minutes per year)
+Czech Republic²
+Share of renewables generation capacity
+connected to E.ON's power grid (%)
+Number of smart energy meter
+installations in E.ON markets (millions)
+Sweden
+Germany
+156
+121
+24
+21
+2022
+Wars and Crises Affect Capital Markets
+44
+54
+Pioneering the digital transformation of
+the energy sector and applying strict
+sustainability criteria as the core
+foundation for steering the Company
+Energy Infrastructure Solutions
+Growth acceleration from contracted
+infrastructure
+Best-in-class infrastructure portfolio
+capitalizing upon decarbonization needs
+for cities and industries
+Financial strategy
+Focus on value-creation and
+shareholder returns
+Clear value-creation focus and solid
+financial headroom ensuring an attractive
+shareholder return outlook including
+dividends and earnings growth
+to our
+investors
+Energy Retail
+Attractive returns and reliable cash
+generation
+Healthy cash flows from a diversified and
+capital light business. Leveraging
+customer base to grow a solutions
+portfolio addressing the rising demand for
+electrification
+14
+E.ON Integrated Annual Report 2023
+To Our Investors
+→ E.ON on the Capital Market
+→ CEO Letter
+→ Report of the Supervisory Board
+To Our Investors
+= Contents Q Search ← Back
+E.ON Stock Performance in 2023
+Percentages
+E.ON
+DAX¹
+Stoxx Utilities¹
+Digitalization and sustainability as
+strategic backbones
+Strategic Foundation
+Long-term green growth in a
+regulated environment
+Multi-decade growth opportunities from
+the green energy transition and a
+regulated business nature provide for a
+visible and profitable earnings path
+Energy Networks
+2022
+2023
+¹Includes customers in Turkey and ZSE's customers in Slovakia.
+2022
+2023
+1Solar systems, batteries, efficient heating such as heat pumps,
+wall-mounted charging points.
+Sold eMobility charging points
+Energy Infrastructure Solutions (EIS)
+20,417
+23,923 Ultra fast charging
+2022
+MSCI
+2022
+54
+2023
+448
+20.8
+19.5
+Fast charging
+509
+Normal charging
+13
+22,966
+2022
+2023
+E.ON Integrated Annual Report 2023
+= Contents Q Search ← Back
+Good Reasons to Invest in E.ON Stock
+Generated energy: heating, cooling, and steam (TWh)
+✓ CDP
+E.ON Stock Is Represented on Numerous Stock Exchanges and in a Variety of
+Indices
+SUSTAINALYTICS
+18.2
+22.0
+People development (hours per employee)?
+23
+24
+2.1
+2.2
+Lost time injury frequency ("LTIF") among employees
+Proportion of women executives (%)
+0.04
+System average interruption duration index ("SAIDI") (minutes)
+0.03
+42
+42
+31
+32
+71,613
+74,618
+Average age of employees
+Proportion of women (%)
+Employees of the E.ON Group (at year-end)4
+Serious incidents and fatalities ("SIF") among employees
+44
+Germany
+Czech Republic
+100
+100
+30
+38
+11
+ESG targets included in Management Board compensation
+Proportion of women on the Supervisory Board (%)⁹
+Proportion of independent Supervisory Board members (%)
+Volunteer activities of E.ON employees (number of volunteer hours)
+Governance
+¹Proportion of taxonomy-aligned capex, opex, and sales relative to taxonomy-eligible activities. + 2This
+KPI quantifies the avoided emissions that contribute to a low-carbon economy in connection with our
+customers, assets, and solutions. ³The proportion of renewables capacity calculated as a percentage of
+the total sum of all installed generating capacity. 4Number of employees does not include apprentices,
+working students, or interns. . 5 Serious incidents and fatalities ("SIF") among employees: safety incidents
+per million hours of work.. "Lost time injury frequency ("LTIF") measures work-related accidents
+resulting in lost time per million hours of work.. Average number of formal training hours per employee
+per year.. 8System average interruption duration index ("SAIDI") for power..⁹Refers to shareholder
+representatives.
+Sweden
+13,340
+18
+22
+451
+253
+121
+156
+24
+21
+Community contribution (€ in millions)
+22,129
+54
+20,417
+23,923
+65.23
+Scope 3 (millions of metric tons) (market-based)
+3.38
+3.46
+2.88
+2.01
+2022
+2023
+= Contents Q Search ← Back
+82.58
+«
+Scope 1 (millions of metric tons)
+CO2 emissions:
+Environment
+Sustainability
+Key Figures of the E.ON Group
+Sustainability Figures
+Energy Networks
+DISCLOSURE INSIGHT ACTION
+Regulated asset base (RAB)¹ (€bn)
+42.0 in 2023 (36.8 in 20222)
+Scope 2 (millions of metric tons) (location-based)
+EU taxonomy aligned capex (%) 1
+98
+98
+n.a.
+94
+Green power as a proportion of total power sales (%)
+Social
+Number of smart heat meter installations (thousands)
+12,178
+13,803
+Number of smart energy meter installations (thousands)
+8
+12
+85
+86
+Share of renewable generation plants connected to E.ON's power grid (%)³
+Ecological network corridor management (%)
+108
+106
+Avoided CO2 emissions together with our customers (millions of metric tons)²
+97
+97
+EU taxonomy aligned sales (%) 1
+97
+98
+EU taxonomy aligned opex (%)¹
+✓
+✓
+Number of charging points sold by E.ON
+Key Performance Indicators
+CEO Letter
+Leonhard Birnbaum
+Management Board
+Chairman and CEO
+Dear Shareholders and Friends of E.ON,
+When I became CEO three years ago, I predicated a decade of growth. A lot has happened
+since then: the Covid pandemic, natural and climate disasters at many E.ON locations
+around Europe, the war in Ukraine and the attendant energy crisis, the uptick in interest
+rates, and Europe's economic downturn. All of this has presented us with enormous
+challenges. But none of it has altered our solid growth prospects. On the contrary, in 2023
+we again defied difficult circumstances. We again delivered strong earnings-€9.4 billion in
+Group adjusted EBITDA-that exceeded our expectations for the 2023 financial year. And
+we again recorded growth in our financial results and investments. Our growth strategy,
+which is propelled by the trend toward sustainability and the need for full digitalization,
+remains valid. Our billions of euros of investments in the energy transition enable us to
+provide what Europe needs now more than ever: new energy infrastructure for sustainable,
+secure, and affordable energy.
+Renewables expansion is happening worldwide and in all types of locations. In France
+despite nuclear power. In Poland despite hard coal. In Asia despite the simultaneous
+expansion of conventional generation. In southern states of the USA despite the fact that
+climate action is almost a dirty word there. Part one of the transition is therefore well
+advanced and continues to progress inexorably. But part two is still almost at the beginning.
+The transition is no longer just about big wind and solar farms. It's about solutions for
+decarbonizing households and industry that, after the experiences of the energy crisis, are
+increasingly considered to be safeguards for a stable and affordable energy supply. It's
+about electrifying transportation and heating and air conditioning systems for buildings.
+And all of this requires network connections and a global expansion and upgrade of existing
+networks. The IEA's most recent World Energy Outlook predicts that global network
+infrastructure will need to be doubled.
+We strategically aligned E.ON to precisely these needs. And we increasingly benefit from
+them. In the 2023 financial year, our two core segments-Energy Networks and Customer
+Solutions-grew in almost all of our European markets relative to the prior year. We're
+investing even more and even faster in the energy transition. We'll again massively expand
+our planned investments for 2024-2028 to a total of €42 billion compared with the €21
+billion we'd planned for the five years starting in 2021.
+19
+E.ON Integrated Annual Report 2023
+→ Report of the Supervisory Board
+→ E.ON on the Capital Market → CEO Letter → Report of the Supervisory Board
+All of this fills us with optimism and with completely new self-confidence regarding our
+future business development. After all, the network business in particular has
+metamorphized in recent years. It has become a growth business that's increasingly
+attracting the attention of policymakers, the general public, and investors. For good reason:
+our networks are critical for the energy transition.
+The final weeks of the 2023 calendar year almost marked something of a turning point in
+this regard. First, the European Commission adopted a Grid Action Plan, thereby putting
+grid expansion at the top of its energy transition agenda-something that would have been
+unthinkable just a few years ago. Second, just before Christmas, European policymakers
+also agreed on a constructive reform of Europe's electricity market design. All calls for more
+government intervention were met with a clear and correct message: the key to a
+sustainable, reliable, and affordable energy future is private investment. And in particular
+this means investments in network infrastructure and decarbonization solutions like those
+made by E.ON, one of Europe's leading companies in this area.
+I consider this to be a great opportunity for our Group. And we want to seize it by making
+our leading role in the energy transition even more visible. In the interests of our customers,
+in the interests of our shareholders, and in the interests of society at large. This means that
+we'll continue to invest to satisfy the rising demand for energy infrastructure. But it also
+means that we'll lead the way where others hesitate-like in the promising area of network
+flexibility. And it also means that in the future our corporate image will change.
+We've purposely not rebranded E.ON during the Group's recent years of fundamental
+changes and restructuring. But if not now, when? We think it's time for our brand image to
+reflect our central role and our new self-confidence. And that's why we on the Management
+Board have made the unanimous decision to align the E.ON brand with our future growth
+and our leadership ambitions in the energy world.
+These days, the public is getting to know E.ON in a new guise and with clear ambitions that
+go far beyond marketing. We're showing who we want to be: the playmaker of Europe's
+energy transition. And we'll do what a playmaker does: shape the game.
+Best wishes,
+вы
+Leo Birnbaum
+20
+= Contents Q Search ← Back
+20
+→ CEO Letter
+= Contents Q Search ← Back
+ISS▷
+E.ON Integrated Annual Report 2023
+E.ON Integrated Annual Report 2023
+The E.ON
+Management
+Board
+The Management Board manages the Company's
+business, with all its members bearing joint
+responsibility. It determines E.ON's corporate
+objectives, fundamental strategic course,
+corporate policy, and organizational setup.
+From left to right:
+Marc Spieker
+Chief Financial Officer
+Thomas König
+→ E.ON on the Capital Market
+Chief Operating Officer
+Networks
+Chief Operating Officer Digital
+Patrick Lammers
+Chief Operating Officer
+Commercial
+Leonhard Birnbaum
+Chief Executive Officer
+18
+Contents
+Search Back
+E.ON Integrated Annual Report 2023
+To Our Investors
+Victoria Ossadnik
+E.ON Integrated Annual Report 2023
+To Our Investors
+17
+642
+48
+167
+1
+7
+1,862
+3,955
+822
+169
+1
+-27
+20
+2,093
+79
+323
+84
+892
+-1,594
+-1
+-2,165
+1,104
+-47
+25
+15
+2,748
+976
+402
+-20
+-69
+-54
+99
+10
+1
+435
+1,143
+351
+1,712
+1,146
+1,535
+1,312
+5
+44
+-706
+866
+17
+395
+1,285
+-445
+14
+-64
+1,261
+17
+-1,301
+-1
+855
+6,553
+-
+266
+170
+4,866
+9,028
+5,528
+1,213
+11,233
+January 1, Exchange rate
+2023 differences
+Changes in
+scope of
+consolidation
+Unwinding of
+discounts
+Additions
+Utilization
+Reclassifi-
+cations
+Reversals
+Changes in
+estimates
+December 31,
+2023
+6,803
+-686
+63
+The provisions for nuclear-waste management obligations as of
+December 31, 2023, in the amount of €6.6 billion exclusively
+relate to nuclear power activities in Germany.
+2,858
+→ Consolidated Balance Sheets
+→ Notes
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Provisions for Other Asset Retirement Obligations
+The provisions for other asset retirement obligations consist of
+obligations for renewable energy power plants and infrastructure.
+In addition, the provisions for dismantling conventional plant
+components in the nuclear power segment, which are based on
+legally binding civil agreements and public provisions, in the
+amount of €375 million (2022: €300 million) are taken into
+account here. The change in this item is in addition to inflation-
+related adjustments also due to the decrease in interest rates.
+Excluding discounting and cost-increase effects, the amounts for
+these disposal obligations with an average payment term of about
+14 years would be €380 million.
+= Contents Q Search ← Back
+The other asset retirement obligations disclosed under economic
+net debt, not including the provisions for dismantling conventional
+plant components in the nuclear power segment, amount to
+€447 million.
+Provisions for supplier-related obligations consist of provisions for
+potential losses on open purchase contracts.
+The main changes in the area of sales-related obligations result
+from impending losses from pending sales contracts. There was a
+reversal in the amount of €1.9 billion in connection with the lower
+energy prices on the commodity markets. In addition €1.4 billion
+was utilized. Provisions for sales market-oriented obligations
+include provisions for risks of loss from pending sales agreements
+in the amount of €0.1 billion (2022: €3.2 billion).
+Environmental Remediation and Similar Obligations
+Provisions for environmental remediation refer primarily to
+redevelopment protection measures and the rehabilitation of
+contaminated sites.
+Other
+The other miscellaneous provisions consist of certain
+environmental remediation obligations from predecessor
+companies in the amount of €0.3 billion (2022: €0.4 billion),
+possible obligations from tax-related interest expense in the
+amount of €0.1 billion (2022: €0.1 billion) and litigation cost risks
+in the amount of €0.1 billion (2022: €0.1 billion).
+194
+Sales and Supplier-Related Obligations
+E.ON Integrated Annual Report 2023
+E.ON Integrated Annual Report 2023
+Renewables Obligation Certificates (ROCs or Green Certificates)
+are an important mechanism for promoting renewable energies,
+especially in the UK. The ROCs represent a fixed share of
+Renewables in power sales and can be acquired either from
+renewable sources or on the market. During a 12-month ROC
+period, the obligations recognized as a provision for this purpose
+are offset against the acquired certificates and used.
+2023
+Retirement and decomissioning
+6,167
+Containers, transports, other
+Total
+386
+476
+6,553
+193
+6,803
+A risk-free discount rate of an average of about 2.0 percent is used
+for the measurement of E.ON's disposal obligations (previous year:
+(2.5 percent). As in the prior year, E.ON assumes a 2 percent
+increase in costs when estimating annual payments. A change in
+the discount rate or in the cost increase rate of 0.1 percentage
+points would change the amount of the provision recognized on
+the balance sheet by approximately €40 million.
+Excluding the effects of discounting and cost increases, the
+amounts for disposal obligations would be €6,540 million with
+average credit terms of approximately six years.
+There were changes in estimates for the nuclear power business in
+2023 in the amount of €266 million (2022: -€965 million). This
+mainly includes the discounting effect in the amount of about
+€200 million resulting from the decrease in interest rates, effects
+from cost adjustments in the amount of €230 million and off-
+setting effects from the optimization of decommissioning and
+disposal services. €686 million (2022: €624 million) of this was
+used, of which €592 million (2022: €562 million) related to
+decommissioning nuclear power plants based on circumstances
+for which decommissioning and dismantling costs were
+capitalized.
+Personnel Obligations
+Provisions for personnel costs primarily cover provisions for early
+retirement benefits, performance-based compensation
+components, restructuring and other deferred personnel costs.
+Restructuring provisions, which totaled €641 million at December
+31, 2023 (2022: €766 million), were made especially in Germany
+for various restructuring projects.
+Obligations from Green Certificates
+Provisions, if they are non-current, are measured at their
+settlement amounts, discounted to the balance sheet date.
+-344
+Consolidated Financial Statements
+Q Search
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+192
+13,894
+→ Notes
+435
+-3
+-4,813
+3,795
+242
+31
+40
+16,761
+-2,594
+= Contents
+→ Consolidated Balance Sheets
+As of December 31, 2023, provisions for nuclear-waste
+management obligations exclusively relate to Germany; other
+provisions mainly relate to eurozone countries and the United
+Kingdom.
+← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+574
+= Contents Q Search ← Back
+December 31,
+2022
+6,327
+Nuclear Waste Management Obligations in Germany (Less
+Advance Payments)
+In the following, the provision items after deduction of advance
+payments are classified based on technical criteria:
+The cost estimates used to determine the provision amounts are
+based on studies and analyses performed by external specialists
+and are updated annually, provided that the cost estimates are not
+based on contractual agreements.
+Provisions for the disposal of spent nuclear fuel rods also comprise
+the contractual costs of the return of waste from reprocessing in
+France and England to interim storage, as well as costs incurred
+for expert handling, including the necessary interim storage
+containers and transport to interim storage.
+The asset retirement obligations recognized include the anticipated
+costs of post- and residual operation of the facility, dismantling
+costs, and the cost of removal and disposal of the nuclear
+components of the nuclear power plant.
+The provisions for nuclear waste management based on nuclear
+power legislation comprise all those nuclear obligations relating to
+the disposal of spent nuclear-fuel rods and low-level nuclear
+waste and to the retirement and decommissioning of nuclear
+power plant components that are determined on the basis of
+external studies, external and internal cost estimates and
+contractual agreements, as well as the supplementary provisions
+of the German Act Transferring Responsibility for Nuclear Waste
+Storage and the German Disposal Fund Act.
+Provisions for Nuclear-Waste Management
+Obligations
+€ in millions
+68
+Net liability as of December 31
+109
+-314
+-25
+-170
+-122
+-48
+-60
+-57
+-3
+-97
+-94
+-3
+13
+14
+15
+-1
+-339
+-3
+11
+351
+-2,774
+Total
+5,433
+295
+288
+3
+4
+364
+Germany
+5,806
+353
+7
+United
+Kingdom
+-406
+33
+1,427
+1,371
+50
+6
+-2,426
+Other
+countries
+7
+-2
+-2
+4,917
+33
+35
+3,735
+3,675
+31
+29
+4,985
+-544
+-453
+(27) Liabilities
+-2
+-625
+-510
+-114
+227
+-1
+-89
+28
+28
+3,165
+-
+10
+9
+1
+-4
+-4
+1
+-83
+-1
+-11
+-
+4,441
+4,464
+-56
+33
+3,110
+-11
+-83
+Other
+countries
+United
+Kingdom
+Environmental remediation and similar obligations
+Supplier-related and customer-related obligations
+Other asset retirement obligations
+Obligations from green certificates
+Personnel obligations
+Nuclear-waste management obligations
+€ in millions
+Other
+Changes in Miscellaneous Provisions
+Total
+Other
+Environmental remediation and similar obligations
+Supplier-related and customer-related obligations
+Other asset retirement obligations
+Obligations from green certificates
+Personnel obligations
+The changes in the miscellaneous provisions are shown in the table
+below:
+Nuclear-waste management obligations
+Total
+December 31, 2023
+16
+850
+43
+812
+861
+451
+796
+The accretion expense resulting from the changes in provisions is
+shown in the financial results (see Note 10). The provision items
+are discounted in accordance with the maturities with interest
+rates of between 1.8 and 7.3 percent.
+465
+December 31, 2022
+Non-current
+678
+5,840
+713
+Current
+Non-current
+Current
+6,125
+713
+€ in millions
+The following table lists the miscellaneous provisions as of the
+dates indicated:
+€ in millions
+191
+Net liability as of January 1
+Net periodic pension cost
+Changes from remeasurements
+Employer contributions to plan assets
+Net benefit payments
+Changes in the Net Defined Benefit Liability
+Changes in scope of consolidation
+Other
+thereof net liability
+thereof net asset
+2023
+2022
+Total
+3,110
+Germany
+3,165
+Exchange rate differences
+Miscellaneous Provisions
+The recognized net liability from the E.ON Group's defined benefit
+plans results from the difference between the present value of the
+defined benefit obligations and the fair value of plan assets:
+→ Notes
+(26) Miscellaneous Provisions
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+= Contents Q Search ← Back
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Description of the Net Defined Benefit Liability
+Consolidated Financial Statements
+Consolidated Financial Statements
+= Contents
+Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+E.ON Integrated Annual Report 2023
+The following table provides a breakdown of liabilities:
+-11
+December 31, 2023
+30 years
+Feb 2033
+5.750%
+EUR 750 million
+10 years
+Aug. 2033
+4.000%
+GBP 600 million
+22 years
+Jan 2034
+4.750%
+EUR 800 million
+13 years
+Oct 2034
+0.875%
+EUR 1,000 million
+12 years
+EUR 600 million
+Jan. 2035
+0.600%
+11.5 years
+EUR 750 million
+9 years
+Mar 2031
+1.625%
+EUR 500 million
+11 years
+Aug 2031
+0.875%
+EUR 500 million
+12 years
+Nov 2031
+0.625%
+GBP 975 million
+30 years
+Jun 2032
+6.375%
+EUR 750 million
+Oct 2032
+3.875%
+GBP 900 million
+30 years
+E.ON International Finance B.V.
+E.ON International Finance B.V.
+Liabilities
+€3.5 Billion Syndicated Revolving Credit Facility
+Effective October 24, 2019, E.ON arranged a syndicated revolving
+credit facility in the amount of €3.5 billion over an original term of
+five years, with two extension options for one year each. After
+both options are exercised, the term of the credit line will end on
+October 24, 2026. The credit margin is linked, among other things,
+to the development of certain ESG ratings, which gives E.ON
+financial incentives to pursue a sustainable corporate strategy. The
+ESG ratings are set by three prominent agencies: ISS ESG, MSCI
+ESG Research, and Sustainalytics. The facility serves as the
+Group's reliable, long-term liquidity reserve, one purpose of which
+is to function as a backup facility for the commercial paper
+programs. The facility was granted by 21 banks, which make up
+E.ON's core banking group. The facility has not been drawn in the
+reporting year.
+€10 Billion and $10 Billion Commercial Paper Programs
+The euro commercial paper program in the amount of €10 billion
+allows E.ON SE to issue from time to time commercial paper with
+maturities of up to two years less one day to investors. The US
+commercial paper program in the amount of $10 billion allows
+E.ON SE to issue from time to time commercial paper with
+maturities of up to 366 days to investors. As of December 31,
+2023, €44 million was outstanding under the euro commercial
+paper program (2022: €364 million) and the equivalent of €170
+million (prior year: €403 million) under the US commercial paper
+program.
+198
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+The bonds issued by E.ON SE and E.ON International Finance B.V.
+(guaranteed by E.ON SE) have the maturities presented in the table
+below. Liabilities denominated in foreign currency include the
+effects of economic hedges, and the amounts shown here may
+therefore vary from the amounts presented on the balance sheet
+Bonds Issued by E.ON SE and E.ON International Finance B.V.
+€ in millions
+December 31, 2023
+December 31, 2022
+Financial Liabilities by Segment
+E.ON International Finance B.V.3
+E.ON International Finance B.V.
+E.ON SE
+E.ON SE
+Oct 2037
+5.875%
+USD 1,000 million
+30 years
+Apr 2038
+6.650%
+GBP 700 million
+30 years
+0.750%
+Jan. 2039
+30 years
+Jul 2039
+6.750%
+6.125%
+E.ON SE
+E.ON International Finance B.V.²
+E.ON SE
+E.ON International Finance B.V.
+E.ON SE
+E.ON International Finance B.V.
+GBP 1,000 million
+Dec 2030
+11 years
+EUR 500 million
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON SE
+EUR 500 million
+8 years
+Feb 2028
+0.750%
+EUR 600 million
+6 years
+Aug 2028
+2.875%
+EUR 600 million
+8 years
+Dec 2028
+3.500%
+Jan. 2028
+7 years
+EUR 800 million
+Jan 2026
+0.125%
+EUR 500 million
+8 years
+May 2026
+1.625%
+EUR 750 million
+7 years
+0.100%
+Oct 2026
+EUR 1,000 million
+7.5 years
+Sep 2027
+0.375%
+EUR 850 million
+10 years
+Oct 2027
+1.250%
+0.250%
+The following table breaks down the financial liabilities by
+segment:
+EUR 750 million
+Mar 2029
+→ Consolidated Balance Sheets
+→ Notes
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+Issuer
+E.ON International Finance B.V.
+E.ON SE
+E.ON SE
+E.ON SE
+= Contents Q Search ← Back
+Volume in the respective currency
+Initial term
+Repayment
+Coupon
+GBP 760 million
+28 years
+Jun 2030
+6.250%
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+3.750%
+EUR 750 million
+12 years
+May 2029
+1.625%
+EUR 1,000 million
+12 years
+Jul 2029
+5.5 years
+1.500%
+EUR 750 million
+11 years
+Feb 2030
+0.350%
+E.ON SE
+¹Listing: All bonds > EUR 500 million are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+197
+E.ON Integrated Annual Report 2023
+E.ON International Finance B.V.
+4 years
+Financial Liabilities by Segment as of December 311
+→ Consolidated Balance Sheets
+660
+336
+152
+100
+126
+70
+938
+506
+Corporate Functions/Other
+29,426
+28,897
+214
+767
+29
+120
+110
+109
+Other
+361
+37
+3
+59
+56
+24
+27
+159
+181
+-
+79
+72
+18
+17
+97
+89
+1
+80
+34
+34
+115
+294 30,140 30,187
+E.ON Group
+29,426
+Derivative liabilities totaled €12,440 million as of December 31,
+2023 (2022: €28,009 million). Of this amount, €10,832 million
+(2022: €26,316 million) is attributable to forward commodity
+contracts. The change compared with the previous year is mainly
+due to the market valuation of commodity derivatives.
+Contract liabilities under IFRS 15 in the amount of €4,392 million
+(2022: €4,098 million) consist primarily of construction grants
+that were paid by customers for the cost of new gas and electricity
+connections in accordance with the generally binding terms
+governing such new connections. These grants are customary in
+the industry, generally non-refundable and recognized as revenue
+in the amount of €314 million according to the useful lives of the
+related assets (2022: €372 million).
+Other operating liabilities consist primarily of other tax liabilities in
+the amount of €950 million (2022: €1,019 million) and interest
+payable in the amount of €441 million (2022: €369 million). This
+item also includes other liabilities to our customers from
+overpayments and refund claims of €1,765 million (2022: €902
+million) and current personnel liabilities of €503 million (2022:
+€458 million). Also included in other operating liabilities are
+carryforwards of counterparty obligations to acquire additional
+shares in already consolidated subsidiaries as well as non-
+controlling interests in fully consolidated partnerships with legal
+structures that give their shareholders a statutory right of
+withdrawal combined with a compensation claim, in the amount of
+€563 million (2022: €555 million).
+(28) Contingent Liabilities and Other Financial
+Obligations
+As part of its business activities, E.ON is subject to contingent
+liabilities and other financial obligations involving a variety of
+underlying matters. These primarily include guarantees,
+obligations from litigation and claims (as discussed in more detail
+in Note 29), short- and long-term contractual, legal and other
+obligations and commitments.
+Contingent Liabilities
+The contingent liabilities of the E.ON Group amounted to €0.3
+billion as of December 31, 2023 (December 31, 2022: €0.3 billion)
+and primarily include contingent liabilities in connection with
+potential long-term environmental remediation measures and legal
+disputes. This value represents the best estimate of the
+expenditure required to settle the present obligation as of the
+reporting date.
+E.ON has also issued direct and indirect guarantees and surety
+bonds to third parties in connection with its own operations or the
+operations of affiliated companies, which may trigger payment
+obligations based on the occurrence of certain events. These
+instruments include both financial guarantees as well as
+operational guarantees, which primarily secure contractual
+obligations as well as benefit obligations for active and former
+employees.
+In addition, E.ON has entered into indemnification agreements,
+which as a rule are incorporated in agreements concerning the
+disposal of shareholdings and, above all, affect the customary
+representations and warranties with relation to liability risks for
+environmental damage and contingent tax risks. In some cases,
+obligations are covered in the first instance by provisions of the
+disposed companies before E.ON itself is required to make any
+payments. Guarantees issued by companies that were later sold by
+E.ON SE or its legal predecessors are usually included in the
+respective final sales contracts in the form of indemnities.
+Moreover, E.ON has commitments under which it assumes joint
+and several liability arising from its interests in civil-law companies
+("GbR"), non-corporate commercial partnerships and consortia in
+which it participates.
+The guarantees of E.ON also include items related to the operation
+of nuclear power plants. Under the German Nuclear Energy Act
+("Atomgesetz" or "AtG") and the ordinance regulating the provision
+for coverage under the Atomgesetz ("Atomrechtliche
+Deckungsvorsorge-Verordnung" or "AtDeckV") of April 27, 2002,
+German nuclear power plant operators are required to provide
+nuclear accident liability coverage of up to €2.5 billion per incident.
+The coverage requirement is satisfied in part by a standardized
+insurance facility in the amount of €255.6 million. The institution
+Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts ("Nuklear
+Haftpflicht GbR") now only covers costs between €0.5 million and
+€15 million for claims related to officially ordered evacuation
+measures. Group companies have agreed to place their
+subsidiaries operating nuclear power plants in a position to
+maintain a level of liquidity that will enable them at all times to
+meet their obligations as members of the Nuklear Haftpflicht GbR,
+in proportion to their shareholdings in nuclear power plants.
+To provide liability coverage for the additional €2,244.4 million per
+incident required by the above-mentioned amendments, E.ON
+Energie AG ("E.ON Energie") and the other parent companies of
+German nuclear power plant operators reached a Solidarity
+Agreement ("Solidarvereinbarung") on July 11, July 27, August 21,
+and August 28, 2001, extended by agreement dated March 25,
+200
+E.ON Integrated Annual Report 2023
+Capital expenditure grants of €752 million (2022: €445 million)
+have not yet been recognized as revenue. As in the prior year, the
+majority of these were government grants, in particular for the
+network business. The E.ON Group retains ownership of the
+assets. The grants are non-refundable and are recognized in other
+operating income over the period of the depreciable lives of the
+related assets.
+Trade payables totaled €11,580 million as of December 31, 2023
+(2022: €14,360 million).
+Trade Payables and Other Operating Liabilities
+= Contents Q Search ← Back
+28,897
+214
+767
+1,671
+921
+2,874
+2,512
+1,255
+98
+1,054
+¹Because of changes in segment reporting, the prior-year figure was adjusted accordingly.
+199
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Balance Sheets
+35,440 34,151
+76
+813
+1,309
+€ in millions
+Energy Networks
+Germany
+Sweden
+ECE/Turkey
+Customer Solutions
+Germany Sales
+UK
+The Netherlands
+2023
+Bonds
+2022
+Commercial paper
+to banks
+Lease obligations
+Other financial
+liabilities
+Financial liabilities
+2023
+Bank loans/Liabilities
+7,076
+13,494
+2,408
+→ Notes
+Due between
+2026 and
+Due after
+Total
+2023
+2024
+2025
+2022
+2032
+28,461
+2,139
+2,408
+15,061
+8,852
+27,766
+2,649
+2,139
+2032
+= Contents Q Search ← Back
+2023
+2023
+13
+1
+1
+16
+14
+451
+2
+85
+78
+536
+80
+737
+434
+370
+262
+202
+117
+15
+3,057
+3,439
+642
+2022
+2023
+2022
+2023
+2022
+905
+367
+2,394
+2022
+2,141
+643
+3,991
+3,151
+454
+365
+2,294
+2,050
+691
+692
+EUR 500 million
+Additionally outstanding as of December 31, 2023, were private
+placements with a total volume of approximately €1.4 billion
+(2022: €1.7 billion). As of December 31, 2023, there were
+bilateral credit facilities in the amount of about €2.3 billion (2022:
+€4.0 billion), with original maturities of up to 1.5 years. These
+facilities were agreed with a share of E.ON's core banking group
+and were not drawn on during the reporting year.
+395
+Changes in
+scope of
+consolidation
+Compounding
+effect
+1,510
+-743
+-619
+16
+Other Dec. 31, 2022
+-204
+Exchange rate
+differences
+28,897
+-74
+-
+767
+1,438
+2,539
+-442
+-355
+-1
+921
+111111
+Cash flows
+1,381
+Jan. 1, 2022
+28,323
+Non-cash-effective
+Financial liabilities
+34,151
+-246
+59
+117
+22
+1,337
+Dec. 31, 2023
+29,426
+214
+1,671
+2,874
+1,255
+35,440
+¹For more information see Note 33.
+Financial Liabilities
+€ in millions
+Bonds
+Commercial paper
+Bank loans/liabilities to banks
+Lease obligations¹
+Other financial liabilities
+Financial liabilities
+¹For more information see Note 33.
+Cash-effective
+-10
+338
+2,512
+851
+The following is a description of the E.ON Group's significant credit
+arrangements and debt issuance programs.
+Corporate Headquarters
+€35 Billion Debt Issuance Program
+A Debt Issuance Program simplifies the flexible issuance of debt
+instruments through public and private placements to investors.
+The Debt Issuance Program of E.ON SE was most
+recently renewed in March 2023, with a total amount of €35
+billion. E.ON SE plans to renew the program in 2024.
+At year-end 2023, the following E.ON SE and E.ON International
+Finance B.V. bonds were outstanding:
+Major Bond Issues of E.ON SE and E.ON International Finance B.V.¹
+Volume in the respective currency
+Initial term
+Repayment
+Coupon
+Issuer
+E.ON International Finance B.V.
+EUR 800 million
+10 years
+Jan 2024
+3.000%
+EUR 500 million
+7 years
+= Contents Q Search ← Back
+785
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+-1,388
+23
+-22
+1,590
+1,054
+34,661
+-1,547
+-607
+-96
+16
+1,724
+34,151
+Liabilities to financial institutions include, among other items,
+collateral received, measured at a fair value of €27 million (2022:
+€86 million). This collateral relates to amounts pledged by banks
+to limit the utilization of credit lines in connection with the fair
+value measurement of derivative transactions. The other financial
+liabilities include, inter alia, financial guarantees totaling €8 million
+(2022: €8 million). Also included is collateral received in
+connection with goods and services in the amount of €17 million
+(2022: €24 million). E.ON can use this collateral without
+restriction.
+The financial liabilities of innogy recognized at the date of initial
+consolidation were marked to market under IFRS. This market
+value was considerably higher than the nominal value because
+market interest rates had fallen since the bonds were issued. The
+difference between the nominal value and the market value
+calculated during the purchase price allocation totaled €1,496
+million as of December 31, 2023 (as of December 31, 2022:
+€1,668 million) and will be reversed over the term of each bond
+and recognized as an expense in the financial result (see Note 10).
+This difference is not taken into account in the economic net debt.
+196
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Balance Sheets
+8
+2
+-594
+Contract liabilities (IFRS 15)
+699
+3,693
+763
+Contract liabilities
+5,638
+520
+Trade payables and other operating liabilities
+27,397
+8,316
+4,576
+42,147
+3,335
+956
+10,910
+Total
+32,014
+39,139
+47,333
+39,875
+1The presentation of the maturities of liabilities from derivative financial instruments was adjusted by €16.7 billion as of December 31, 2022, from non-current to current within the meaning of IAS 8.41 ff.
+This relates to energy procurement and sales contracts that are not classified as own-use contracts under IFRS 9 and are accounted for as commodity derivatives.
+614
+195
+33
+180
+6,4401
+€ in millions
+Financial liabilities
+Trade payables
+Capital expenditure grants
+Liabilities from derivatives
+Advance payments
+Current
+4,617
+Non-current
+Current
+30,823
+11,580
+5,186
+14,360
+December 31, 2022
+Non-current
+28,965
+357
+265
+8,727
+3,713
+21,569¹
+358
+May 2024
+E.ON Integrated Annual Report 2023
+→ Consolidated Statement of Income
+Other
+28,897
+641
+53
+22
+-187
+767
+-553
+921
+643
+-4
+109
+2
+2,512
+-383
+8
+737
+Other financial liabilities
+1,054
+effect
+Consolidated Financial Statements
+Compounding
+differences
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+Financial Liabilities
+The following tables present the changes to financial liabilities in
+fiscal years 2023 and 2022:
+Financial Liabilities
+Cash-effective
+Non-cash-effective
+Changes in
+Exchange rate
+€ in millions
+Bonds
+Commercial paper
+Bank loans/liabilities to banks
+Lease obligations¹
+Jan. 1, 2023
+Cash flows
+scope of
+consolidation
+0.875%
+¹Listing: All bonds ≥ EUR 500 million are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
+2The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
+³Rule 144A/Regulation S bond.
+EUR 750 million
+E.ON SE
+1.000%
+Oct 2025
+5.5 years
+EUR 750 million
+1.000%
+Apr 2025
+EUR 750 million
+0.875%
+Jan 2025
+3 years
+EUR 750 million
+8 years
+E.ON SE
+E.ON International Finance B.V.
+Aug 2024
+5 years
+0.000%
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON SE
+E.ON International Finance B.V.
+E.ON SE
+E.ON International Finance B.V.
+358
+5,585
+FVPL
+358
+5,585
+FVOCI
+686
+222
+908
+908
+358
+Cash and cash equivalents
+5,227
+Commercial paper
+Restricted liquid funds
+Assets held for sale
+452
+452
+AmC
+AmC
+FVPL
+Total assets
+Financial liabilities
+Bonds
+495
+36,169
+AmC
+1,149
+AmC
+FVPL
+10,243
+AmC
+7,657
+7,657
+FVPL
+7,657
+1
+7,124
+532
+328
+328
+n/a
+328
+328
+4,466
+633
+28,806
+626
+112
+132
+382
+2,552
+2,552
+2,552
+1,371
+1,181
+1,644
+1,644
+35,440
+Bank loans/liabilities to banks
+29,426
+62,394
+AmC
+FVPL
+1FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair
+values of the two hierarchy levels listed.
+2The liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).
+207
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+The carrying amounts of cash and cash equivalents and of trade
+receivables and trade payables are considered reasonable
+estimates of their fair values because of their short maturity.
+71,154
+Where the fair value of a financial instrument can be derived from
+an active market without the need for an adjustment, that value is
+used as the fair value. This applies in particular to equities held and
+to bonds held and issued.
+208
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Carrying Amounts, Fair Values and Measurement Categories by Class within the Scope of IFRS 7 as of December 31, 2022
+Carrying amounts
+within the scope of
+€ in millions
+= Contents Q Search Back
+Total liabilities
+Liabilities associated with assets held for sale
+1,205
+29,426
+AmC
+27,728
+26,330
+11,131
+214
+214
+AmC
+217
+217
+10,404
+1,671
+1,671
+AmC
+1,331
+480
+851
+Lease obligations
+2,874
+2,822
+n/a
+2,720
+2,992
+AmC
+2,722
+182
+1,335
+34,923
+18,861
+495
+Securities and fixed-term deposits
+Other operating liabilities
+Balance as of December 31, 2022¹
+354
+Balance as of January 1, 2023
+354
+Unrealized changes-hedging reserve
+-113
+Unrealized changes-reserve for hedging costs
+2
+Reclassification adjustments recognized in income
+Change in scope of consolidation
+Income taxes
+Balance as of December 31, 2023¹
+¹As of December 31, 2023, includes - €71 million (2022: -€71 million) from terminated net
+investment hedges.
+23
+266
+As a rule, reclassification adjustments recognized in income are
+reported under other operating income and expenses. The nominal
+volume of hedging instruments in net investment hedges
+amounted to €4,613 million as of December 31, 2023 (2022:
+€4,759 million). Since the currency risk of net investment hedges
+is hedged through the ongoing rollover of the hedging instruments,
+the majority are concluded with a remaining term of less than one
+year.
+Valuation of Derivative Instruments
+The fair value of derivative financial instruments is sensitive to
+movements in underlying market rates and other relevant
+variables. The Company assesses and monitors the fair value of
+derivative instruments on a periodic basis. The fair value to be
+determined for each derivative instrument is the price that would
+be received to sell an asset or paid to transfer a liability in an
+orderly transaction between market participants on the
+measurement date (exit price). E.ON also takes into account the
+counterparty credit risk for both own credit risk (debt value
+adjustment) and the risk of the corresponding counterparty (credit
+value adjustment) when determining fair value. The fair values of
+derivative instruments are calculated using common market
+valuation methods with reference to available market data on the
+measurement date.
+The following is a summary of the methods and assumptions for
+the valuation of utilized derivative financial instruments in the
+Consolidated Financial Statements.
+• Currency, electricity and gas forward contracts, swaps, and
+emissions-related derivatives are valued separately at their
+forward rates and prices as of the balance sheet date. Whenever
+possible, forward rates and prices are based on market
+quotations, with any applicable forward premiums and
+discounts taken into consideration.
+205
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Balance Sheets
+88
+= Contents Q Search ← Back
+1,736
+10,154
+Other financial liabilities
+1,255
+790
+AmC
+770
+-8
+778
+Trade payables and other operating liabilities
+35,714
+27,471
+Trade payables
+11,580
+11,476
+AmC
+Derivatives with no hedging relationships
+10,704
+10,704
+FVPL
+10,704
+Derivatives with hedging relationships
+Liabilities related to IAS 322
+1,736
+1,736
+n/a
+563
+563
+AmC
+1,736
+88
+550
+22,855
+• Market prices for commodity options are valued using standard
+option pricing models commonly used in the market.
+•
+market prices
+(Level 2)
+Determined by
+valuation methods
+(Level 3)
+436
+2,164
+849
+Receivables from finance leases
+Other financial receivables and financial assets
+252
+252
+n/a
+222
+1,912
+597
+596
+496
+AmC
+Equity investments
+85
+145
+101
+FVPL
+101
+265
+101
+Trade receivables and other operating assets
+Trade receivables
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Other operating assets
+market prices
+(Level 1)
+71
+• The fair values of existing instruments to hedge interest risk are
+determined by discounting future cash flows using market
+interest rates over the remaining term of the instrument.
+Discounted cash values are determined for interest rate,
+currency and cross-currency interest rate swaps for each
+individual transaction as of the balance sheet date. Interest
+income and expenses are recognized in income at the date of
+payment or accrual.
+507
+507
+Equity forwards are valued on the basis of the stock prices of the
+underlying equities, taking into consideration any timing
+components.
+• Exchange-traded futures and option contracts are valued
+individually at daily settlement prices determined on the futures
+markets that are published by their respective clearing houses.
+Paid initial margins are disclosed under other assets. Variation
+margins received or paid during the term of such contracts are
+stated under other liabilities or other assets, respectively, unless
+they are offset against the recognized market values of the
+commodity derivatives, as the offsetting criteria of IAS 32.42
+are met.
+• Certain long-term energy contracts are valued with the aid of
+valuation models that use internal data if market prices are not
+available. A hypothetical 10 percent increase or decrease in
+these internal valuation parameters as of the balance sheet date
+would lead to a theoretical change in market values of
++€5 million.
+(32) Additional Disclosures on Financial Instruments
+The carrying amounts of the financial instruments, their grouping
+into IFRS 9 measurement categories, their fair values and their
+measurement sources by class are presented in the following
+table:
+206
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Carrying Amounts, Fair Values and Measurement Categories by Class within the Scope of IFRS 7 as of December 31, 2023
+Carrying amounts
+within the scope of
+€ in millions
+Equity investments
+Financial receivables and other financial assets
+Carrying amounts
+IFRS 7
+Measurement
+categories
+under IFRS 9¹
+Determined using
+Derived from active
+Fair value
+2,561
+FVPL
+Financial receivables and other financial assets
+market prices
+(Level 2)
+IFRS 7
+Liabilities associated with assets held for sale
+1,381
+552
+229
+2,162
+AmC
+2,202
+10,134
+Other operating liabilities
+558
+558
+AmC
+763
+555
+Liabilities related to IAS 322
+590
+590
+n/a
+590
+590
+Derivatives with hedging relationships
+1,112
+26,307
+27,419
+FVPL
+27,419
+555
+510
+467
+43
+Financial receivables and other financial assets
+Derivative financial instruments
+Equity investments
+€ in millions
+A hypothetical change of ±10 percent in the internal valuation
+parameters as of the balance sheet date would result in a
+theoretical increase or decrease in fair values of ±€5 million. A
+change of +10 percent or -10 percent in the key internal
+measurement parameters of other financial receivables and other
+financial assets as of the balance sheet date would result in a
+theoretical increase or decrease in fair values of ±€2 million. The
+fair values determined using valuation techniques for financial
+instruments carried at fair value are reconciled as shown in the
+following table:
+The input parameters of Level 3 of the fair value hierarchy for
+equity investments are specified taking into account economic
+developments and available industry and corporate data (see also
+Note 1). A hypothetical change of +10 percent or -10 percent in
+these key internal valuation parameters as of the balance sheet
+date would lead to a theoretical change in market values of
++€77 million or -€3 million, respectively. Certain long-term energy
+contracts are measured using valuation models based on internal
+fundamental data if market prices are not available.
+level 2 and securities with a fair value of €283 million were
+reclassified from hierarchy level 2 to hierarchy level 1.
+Fair Value Hierarchy Level 3 Reconciliation
+At the end of each reporting period, E.ON assesses whether there
+might be grounds for reclassification between hierarchy levels. In
+2023, due to adjusted price quotes, securities with a fair value of
+€169 million were reclassified from hierarchy level 1 to hierarchy
+The fair value of shareholdings in unlisted companies and of debt
+instruments that are not actively traded, such as loans received,
+loans granted and financial liabilities, is determined by discounting
+future cash flows. Any necessary discounting takes place using
+current market interest rates over the remaining terms of the
+financial instruments. The determination of the fair value of
+derivative financial instruments is discussed in Note 31.
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+209
+2The liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).
+1FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation techniques with unobservable
+inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
+79,295
+87,972
+Total liabilities
+43
+43
+467
+AmC
+FVPL
+27,419
+Derivatives with no hedging relationships
+AmC
+14,242
+25,552
+AmC
+28,897
+28,897
+33,776
+34,151
+53,907
+62,693
+Commercial paper
+Bonds
+Financial liabilities
+Total assets
+71
+161
+71
+FVPL
+71
+AmC
+161
+232
+1,543
+AmC
+452
+452
+Assets held for sale
+Restricted liquid funds
+AmC
+5,773
+24,123
+Total
+1,429
+767
+14,360
+Trade payables
+45,009
+53,058
+Trade payables and other operating liabilities
+686
+45
+731
+AmC
+731
+1,054
+Other financial liabilities
+2,452
+n/a
+2,460
+2,512
+Lease obligations
+737
+184
+921
+AmC
+921
+921
+Bank loans/liabilities to banks
+770
+770
+AmC
+767
+Carrying amounts
+Transfers
+Jan. 1, 2023
+215
+183
+102
+Trade receivables and other operating assets
+Trade receivables
+Derivatives with no hedging relationships
+Derivatives with hedging relationships
+Other operating assets
+Securities and fixed-term deposits
+45,733
+42,068
+10,422
+10,346
+45
+AmC
+30,168
+FVPL
+30,168
+1
+29,452
+714
+578
+578
+n/a
+578
+578
+4,565
+30,168
+102
+FVPL
+102
+2,191
+452
+Measurement
+categories
+under IFRS 9¹
+FVPL
+Determined using
+Fair value
+452
+Derived from active
+market prices
+(Level 1)
+64
+Determined by
+valuation methods
+(Level 3)
+388
+2,853
+782
+Receivables from finance leases
+Other financial receivables and financial assets
+266
+238
+n/a
+238
+2,587
+544
+545
+442
+AmC
+443
+45
+977
+AmC
+960
+84
+447
+2
+-18
+102
+-11
+10
+101
+92
+388
+24
+448
+-11
+-32
+-2
+519
+210
+E.ON Integrated Annual Report 2023
+Dec. 31, 2023
+Exchange rate
+differences
+out of
+Level 3
+Level 3
+into
+in income
+statement
+Settlements
+Gains/losses
+Sales
+(including
+disposals)
+additions)
+-69
+Purchases
+(including
+-398
+-2
+151
+725
+2,948
+2,948
+2,948
+1,120
+1,828
+2,046
+FVPL
+2,046
+731
+1,315
+902
+FVOCI
+902
+389
+513
+Cash and cash equivalents
+6,973
+6,973
+AmC
+1,200
+FVPL
+1,200
+1,200
+1
+-44
+436
+93
+1,398
+E.ON Integrated Annual Report 2023
+9
+9
+272
+-21
+75
+-27
+Change in scope of consolidation
+Income taxes
+-184
+Companies accounted for under the equity method
+-62
+676
+Balance as of December 31, 2022¹
+Unrealized changes-hedging reserve
+-170
+220
+322
+-18
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Change in scope of consolidation
+Unrealized changes-hedging reserve
+Balance as of January 1, 2022
+Currency risk
+Income taxes
+€ in millions
+Changes in OCI Arising from Net Investment Hedges
+The development of OCI arising from net investment hedges is as
+follows:
+292
+2022
+3,267
+6,250
+755
+1,555
+203
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+The development of OCI arising from cash flow hedges, broken
+down by hedged risk type, is as follows:
+123
+Changes in OCI Arising from Cash Flow Hedges
+Balance as of January 1, 2022
+Unrealized changes-hedging reserve
+Unrealized changes-reserve for hedging costs
+Reclassification adjustments recognized in income
+Interest-rate
+Commodity
+price change
+Total
+Currency risk
+risk
+risk
+-1,053
+€ in millions
+expenses.
+5,500
+61
+1,500
+9
+204
+Reclassifications recognized in income are generally reported in
+that line item of the income statement which also includes the
+respective hedged transaction.
+The balance of the OCI arising from cash flow hedges as of
+December 31, 2023, contains €0.4 billion relating to hedging of
+interest-rate risk (2022: €0.3 billion).
+-227
+-51
+207
+2Of this amount, - €116 million (previous year -€23 million) relates to hedged cash flows that are no longer expected to occur.
+¹As of December 31, 2023, includes -€141 million (2022: €306 million) from terminated cash flow hedges.
+Balance as of December 31, 2023¹
+Companies accounted for under the equity method
+Income taxes
+Consolidated Financial Statements
+Reclassification adjustments recognized in income
+Change in scope of consolidation
+-65
+32
+-549²
+13
+13
+Unrealized changes-reserve for hedging costs
+-4
+-77
+-58
+-139
+292
+-516
+3,000
+→ Consolidated Statement of Income
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+1,000
+52
+2,648
+2,200
+290
+2023
+> 5 years
+1-5 years
+< 1 year
+158
+Maturity
+Total
+As in 2022, no ineffectiveness resulted from net investment
+hedges in 2023.
+→ Consolidated Statement of Cash Flows
+The carrying amount of the assets used as hedging instruments as
+of December 31, 2023, was €2 million (2022: €104 million) and
+the carrying amount of the liabilities used as hedging instruments
+was €1,241 million (2022: €1,117 million). The fair values of the
+designated portion of the hedging instruments changed by -€110
+million in the reporting period (2022: +€304 million).
+Net Investment Hedges
+Commodity price change risk
+Interest-rate risk
+Currency risk
+€ in millions
+Nominal Values of Hedging Instruments in Connection with Cash Flow Hedges
+following table:
+The nominal volume of the hedging instruments is presented in the
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+The Company uses foreign currency forwards, foreign currency
+swaps and foreign currency loans to protect the value of its net
+investments in its foreign operations denominated in foreign
+currency.
+Gains and losses from the ineffective portions of cash flow hedges
+are classified as other operating income or other operating
+Balance as of January 1, 2023
+3
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+purchases also resulted in the acquisition of assets in the amount
+of €34 million and liabilities in the amount of €21 million.
+The total consideration received by E.ON in 2023 on the disposal
+of consolidated equity interests and activities generated cash
+inflows of €1 million (2022: €634 million). Cash and cash
+equivalents disposed of amounted to €0 million (2022: €3 million).
+The sale of the consolidated activities led to reductions of
+€1 million (2022: €855 million) in assets and €1 million (2022:
+€55 million) in provisions and liabilities.
+Cash provided by operating activities of continuing operations
+before interest and taxes of €7.2 billion was €4.3 billion below the
+prior-year figure (€11.5 billion). This resulted in part from a decline
+of €0.9 billion at Energy Networks, which is mainly attributable to
+adverse changes in working capital at the network business in
+Germany. In particular, back payments to energy feed-in
+customers who had received insufficient instalment payments in
+the previous year had a negative impact on operating cash flow in
+the year under review. The remaining decline (a total of
+-€3.4 billion) came from Customer Solutions and Corporate
+Functions/Other and was likewise mainly due to negative changes
+in working capital in the 2023 financial year that more than offset
+the increase in cash-effective earnings. These negative changes in
+working capital are mainly attributable to the timing difference
+between customer instalment payments already received in 2022
+and payments from
+government support measures and the related
+cash outflows from commodity procurement in the year under
+review. In addition, the closure of E.ON's last nuclear power plant
+in the 2023 financial year led to a further deterioration of cash
+provided by operating activities relative to the prior year.
+Cash provided by investing activities of continuing operations of
+-€5.6 billion was 2.4 billion below the prior-year figure of
+-€3.2 billion. This includes cash-effective investments of
+€6.4 billion (prior year: €4.8 billion). The increase is primarily
+attributable to the planned increase in investments in property,
+plant and equipment and intangible assets, particularly at the
+network business Germany. A reduction in cash inflow from
+disposals also affected cash provided by investment activities.
+There was no transaction in the 2023 financial year comparable to
+the sale of E.ON's 50-percent stake in Westconnect in the prior
+year.
+Cash provided by financing activities of continuing operations of
+-€1.8 billion was €1.3 billion above the prior-year figure of
+-€3.1 billion. The net of the issuance and repayment of bonds,
+commercial paper, and bank liabilities led to an improvement in
+cash provided by financing activities. A net reduction in adverse
+effects in conjunction with variation margins due to the settlement
+of derivative transactions led to a further improvement in cash
+provided by financing activities.
+Supplemental Information on Cash Flows from Operating
+Activities
+→ Notes
+€ in millions
+Interest received
+Dividends received
+2023
+2022
+-716
+-594
+-1,091
+348
+219
+571
+575
+-1,203
+202
+Income taxes paid (less refunds)
+Interest paid
+E.ON Integrated Annual Report 2023
+→ Consolidated Balance Sheets
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+April 18, April 28, and June 1, 2011, and with agreement of
+November 17, November 29, December 2, and December 6, 2021.
+If an accident occurs, the Solidarity Agreement calls for the nuclear
+power plant operator liable for the damages to receive-after the
+operator's own resources and those of its parent companies are
+exhausted-financing sufficient for the operator to meet its
+financial obligations. Under the Solidarity Agreement, E.ON
+Energie's share of the liability coverage on December 31, 2023,
+was 43.3 percent (prior year: 43.3 percent), plus an additional 5.0
+percent charge for the administrative costs of processing damage
+claims. The contract does not provide for a change in share for the
+2023 calendar year. Sufficient liquidity has been provided for and
+is included within the liquidity plan.
+Furthermore, as of December 31, 2023, E.ON is continuing to
+provide collateral in the amount of €454.2 million (2022: €700.8
+million) for the former Group companies transferred to RWE which
+are to be repaid or assumed by RWE Group companies. In the
+course of the fiscal year 2023, €246.6 million of guarantees were
+redeemed as part of the exchange process with RWE.
+Other Financial Obligations
+In addition to provisions and liabilities carried on the balance sheet
+and to reported contingent liabilities, there also are other financial
+obligations arising mainly from contracts entered into with third
+parties, or on the basis of legal requirements.
+As of December 31, 2023, purchase commitments for
+investments in property, plant and equipment amounted to €2.9
+billion (2022: €2.3 billion). Of these commitments, €2.4 billion are
+due within one year (2022: €1.7 billion). €2.3 billion of the
+purchase commitment at December 31, 2023 (2022: €2.0 billion)
+relates to the segments Energy Networks Germany and Sweden.
+= Contents Q Search ← Back
+Additional contractual obligations in place at the E.ON Group as of
+December 31, 2023, relate primarily to the purchase of electricity
+and natural gas. Fixed financial obligations under electricity
+Other financial obligations exist only to an insignificant extent.
+These include capital commitments in connection with joint
+ventures, obligations concerning the acquisition of financial assets,
+and obligations arising from capital measures.
+(29) Litigation and Claims
+A number of different court actions, governmental investigations
+and proceedings, and other claims are currently pending or may be
+instituted or asserted in the future against companies of the E.ON
+Group. This in particular includes an increased number of legal
+actions and proceedings relating to contract amendments and
+price adjustments initiated in response to market upheavals and
+the changed economic and geopolitical situation in the electricity,
+gas and heat sectors (also as a consequence of the energy
+transition and the energy crisis) and concerning price increases and
+anticompetitive practices. The courts and authorities are also
+subjecting competitive practices to stricter reviews. Where
+appropriate, Group companies have recognized corresponding
+contingent assets (see Note 18), provisions (see Note 26) or
+contingent liabilities (see Note 28).
+In the Energy Networks segment, Group companies are involved in
+proceedings for the award of concessions and in connection with
+grid connections and the calculation of the grid fee. Official
+regulations, approvals and changes in regulatory practice have
+given rise to legal disputes. Of particular note here are effects in
+connection with the regulatory treatment of capital costs, return
+on equity and other key regulatory parameters. The national legal
+framework conditions within Europe are subject to changes, some
+of which have a significant impact on network operations. Owing
+to a number of factors, including regulatory and legal decisions,
+the regulatory framework has increased here. However, these
+regulatory interventions are not restricted to the network area;
+distribution activities in the customer solutions area have also
+been affected by regulatory measures.
+The changes to the legal and regulatory framework can in some
+cases also significantly impact subsidies and remuneration
+practices in the area of Renewables, which in turn are the object of
+regulatory or court proceedings.
+There are also legal disputes in connection with completed M&A
+activities, in particular as a result of the acquisition of innogy SE.
+With regard to the latter, all legal actions brought against the
+European Commission's merger control approval decision were
+dismissed by the Court of First Instance of the European Union;
+E.ON SE intervened on the side of the European Commission in
+these proceedings.
+(30) Supplemental Cash Flow Disclosures
+Please refer to the detailed presentation in Note 5 for information
+on the shares in AggerEnergie GmbH and other shares in
+Západoslovenská energetika a.s. ("ZSE") acquired in the framework
+of swap transactions.
+In the current fiscal year, E.ON made external payments for
+additions to consolidated shareholdings and activities in the
+amount of €14 million (2022: €0 million). Cash and cash
+equivalents in the amount of €2 million were also acquired. The
+201
+The total amount of ineffectiveness for cash flow hedges recorded
+for the year ended December 31, 2023, produced income of
+€6 million (2022: income of €3 million) resulting from exchange
+rate hedging.
+Consolidated Financial Statements
+purchase contracts amount to €6.7 billion on December 31, 2023
+(2022: €11.3 billion), of which €5.0 billion (2022: €8.6 billion) is
+due within one year. Financial obligations under fixed gas purchase
+contracts amount to approximately €3.9 billion on December 31,
+2023 (2022: €5.4 billion). Of this amount, €2.8 billion (2022: €4.5
+billion) is due within one year. Additional fixed purchase
+commitments as of December 31, 2023, amount to €0.8 billion
+(2022: €0.7 billion). They essentially include long-term contractual
+commitments to purchase heat and alternative fuels. Of these
+commitments, €0.2 billion (2022: €0.2 billion) are due within one
+year. There are also additional purchase commitments whose
+amount is not fixed yet.
+→ Consolidated Statement of Cash Flows
+2022
+408
+165
+107
+-141
+100
+140
+-99
+Interest-rate risk
+1
+66
+2023
+327
+72
+816
+7
+Commodity price change
+risk
+0
+-3
+676
+520
+-676
+→ Consolidated Statement of Income
+465
+2022
+-827
+Change in the fair value of
+hedged items
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+2023
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+(31) Derivative Financial Instruments and Hedging
+Transactions
+The Company's policy generally permits the use of derivatives if
+they are associated with underlying assets or liabilities, planned
+transactions, or legally binding rights or obligations.
+At the E.ON Group, hedge accounting in accordance with IFRS 9 is
+employed primarily in connection with hedging long-term liabilities
+and future financing via interest-rate derivatives and for hedging
+long-term foreign currency receivables and payables via currency
+derivatives. E.ON also hedges net investments in foreign
+operations.
+In the commodity sector, fluctuations in future cash flows from
+procurement and sales transactions are economically hedged by
+offsetting transactions. Hedge accounting was applied in individual
+cases with regard to hedging electricity and gas price change risks.
+To hedge currency risk, E.ON entered into hedging transactions in
+the reporting year in pounds sterling at an average hedging rate of
+£0.90/€ (2022: £0. 91/€) and in US dollars at an average hedging
+rate of US$1.36/€ (2022: US$1.36/€). Hedging transactions were
+concluded at an average interest rate of 2.80 percent (2022:
+2.67 percent) to hedge the interest rate risk in the eurozone. To
+hedge commodity price risk, E.ON entered into hedging
+transactions with an average hedged price of €30/MWh for gas
+and an average hedged price of €115/MWh for electricity.
+Fair Value Hedges
+Fair value hedges are used to protect against the risk from changes
+in market values. Gains and losses on these hedges are generally
+reported in that line item of the income statement which also
+includes the respective hedged items.
+Strategy and Objectives
+Cash flow hedges are used to protect against the risk arising from
+variable cash flows. Interest rate swaps and cross-currency
+interest rate swaps are the principal instruments used to limit
+interest rate and currency risks. The purpose of these swaps is to
+Cash Flow Hedges
+Liabilities from derivative
+financial instruments
+2022
+2023
+2022
+€ in millions
+Currency risk
+2023
+325
+Change in the fair value of the
+designated portion of hedging
+instruments
+Carrying amount
+Carrying Amounts of Hedging Instruments and Changes in Fair Value of Hedging Instruments and Hedged Items in
+Connection with Cash Flow Hedges
+maintain the level of payments arising from long-term interest-
+bearing receivables and liabilities denominated in foreign currency
+and euros by using cash flow hedge accounting in the functional
+currency of the respective E.ON company. Futures contracts are
+concluded to reduce future cash flow fluctuations arising from
+commodity transactions effected at variable spot prices. Cash flow
+hedge accounting to hedge the risk of changes in commodity
+prices (electricity and gas) was applied in individual cases in the
+2023 fiscal year. The following table presents the carrying
+amounts of the hedging instruments and the changes in the fair
+values of the hedging instruments and hedged items by hedged
+risk type:
+Receivables from derivative
+financial instruments
+Trade payables
+Cash outflows for financial liabilities
+21,939
+8,743
+14,360
+3,571
+8,433
+7
+75
+585
+0
+66
+174
+1,036
+1,397
+Derivatives (with/without hedging relationships)
+925
+446
+1
+36,577
+Cash outflows for trade payables and other operating liabilities
+2,167
+11,437
+33,375
+212
+262
+2,167
+10,910
+8,177
+61,806
+Cash outflows for liabilities within the scope of IFRS 7
+4,606
+4,193
+53,373
+0
+111
+398
+15
+2,370
+Other operating liabilities
+66
+Put option liabilities under IAS 32
+11,324
+2
+272
+6
+746
+31,885
+16
+61
+3,070
+88
+34
+447
+9,682
+3,876
+2,269
+16,788
+11,580
+22,011
+9,060
+3,749
+5,872
+7
+E.ON Integrated Annual Report 2023
+3,781
+37,757
+7,625
+2,285
+11,345
+767
+20,207
+from 2028
+7,371
+3,021
+5,299
+Cash outflows
+Cash outflows
+2025-2027
+Cash outflows
+2024
+2023
+Financial guarantees
+Other financial liabilities
+Lease obligations
+Bank loans/liabilities to banks
+Commercial paper
+Bonds
+€ in millions
+Cash outflows
+9,776
+31,787
+30
+Consolidated Financial Statements
+Total
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+1,455
+7,927
+6,886
+2023
+2022
+Stage 1 financial assets
+2023
+Gross carrying amount default grade
+Gross carrying amount investment grade
+Trade receivables
+20221
+2,877
+€ in millions
+The default risks for financial assets for which rating information is
+available can be found in the following table for each rating grade
+and separately according to the stages of impairment existing in
+2023:
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+213
+Credit Risk Exposure for Financial Assets for Which Rating Information is Available
+There were no significant changes in valuation allowances in 2023
+for other financial assets measured at amortized cost or at fair
+value through other comprehensive income, or for receivables
+from finance leases.
+Gross carrying amount non-investment grade
+57
+1
+The prescribed processes, responsibilities and actions concerning
+financial and risk management are described in detail in internal
+risk management guidelines applicable throughout the Group. The
+units have developed additional guidelines of their own within the
+confines of the Group's overall guidelines. To ensure efficient risk
+management at the E.ON Group, the Trading (Front Office),
+Finance Controlling (Middle Office) and Financial Settlement (Back
+Office) departments are organized as strictly separate units. Risk
+steering and reporting in the areas of interest rates, currencies and
+credit for banks and liquidity management is performed by the
+Finance Controlling department (in the credit area, also in part by
+Counterparty Risk Management), while risk steering and reporting
+in the area of commodities and in the credit area for industrial
+enterprises is performed at Group level by a separate department.
+Principles
+Risk Management
+Lifetime ECL
+20221
+122
+3,191
+= Contents Q Search ← Back
+over the remaining term are shown in the following matrix for each
+maturity class:
+36
+information is available and the amount of expected credit losses
+¹In order to harmonize the presentation of business with Residential and SME customers in the Group, the prior-year figures have been adjusted.
+2,616
+7,984
+6,922
+Total
+313
+192
+848
+The default risks for trade receivables for which no rating
+1The item "Other" includes currency translation differences.
+Balance as of December 31
+Impairments
+Other¹
+52
+Fair Value through OCI
+Total
+2022
+-310
+-512
+3,438
+-15,810
+Fair Value through P&L
+-748
+-899
+Financial liabilities Amortized Cost
+Financial assets Amortized Cost
+-17,405
+2023
+Net Gains and Losses by Category
+The net gains and losses from financial instruments by IFRS 9
+category are shown in the following table:
+In gross-settled derivatives (usually currency derivatives and
+commodity derivatives), outflows are accompanied by related
+inflows of funds or commodities.
+For financial liabilities that bear floating interest rates, the rates
+that were fixed on the balance sheet date are used to calculate
+future interest payments for subsequent periods as well. Financial
+liabilities that can be terminated at any time are assigned to the
+earliest maturity band in the same way as put options that are
+exercisable at any time.
+Financial guarantees with a total nominal volume of €15 million
+(2022: €8 million) were issued to companies outside of the Group.
+This amount is the maximum amount that E.ON would have to pay
+in the event of claims on the guarantees. E.ON has recognized a
+liability for this in the amount of €8 million (2022: €8 million).
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+€ in millions
+-5
+2,611
+The net result of the category fair value through OCI results in
+particular from currency translation effects, interest results and
+income from the sale of fair value through OCI securities in the
+amount of €33 million (2022: €12 million).
+In addition to impairments of financial assets, net gains and losses
+in the amortized cost category are due primarily to interest income
+from financial assets and liabilities and effects from the currency
+translation of financial liabilities.
+-1,612
+-2,491
+39
+-17
+-657
+-983
+2022
+-1,253
+259
+121
+Disposals
+-1,612
+Balance as of January 1
+2023
+Valuation Allowances for Trade Receivables
+€ in millions
+In 2023, valuation allowances for trade receivables changed as
+shown in the following table:
+E.ON distinguishes between two approaches when calculating
+expected future credit losses. If external or internal rating
+information is available, the expected credit loss for trade
+receivables and other financial assets is determined on the basis of
+this data. If no rating information is available, E.ON determines
+default ratios for trade receivables on the basis of historical default
+rates, taking into account forward-looking information on
+economic developments. In the E.ON Group, a default or the
+classification of a receivable as uncollectable is assumed after 180,
+270 or 360 days, depending on the region.
+For trade receivables, expected credit losses are recognized over
+their entire residual term using the simplified method (lifetime
+expected credit loss (ECL) trade receivables). For other financial
+assets, E.ON first determines the credit loss expected within the
+first 12 months (stage 1-12 month ECL). In derogation of this, in
+the event of a significant increase in the default risk, the expected
+credit loss over the entire residual term of the respective
+instrument is recognized (stage 2-lifetime ECL). Whether the
+default risk has increased significantly depends largely on the
+counterparty risk as calculated internally on initial recognition.
+E.ON uses an 18-point internal rating scale to monitor
+counterparty risk. A significant increase in the default risk is
+assumed at the earliest after a three-level decline in the rating
+(since initial recognition). If there are objective indications of an
+actual default, an individual impairment loss must be recognized
+on the income statement (stage 3-losses already incurred).
+Impairment losses on financial assets must be recognized not only
+for losses already incurred but also for expected future credit
+losses. E.ON takes into account expected future credit losses of
+financial assets carried at amortized cost, financial assets
+measured at fair value through other comprehensive income, and
+receivables from finance leases.
+Impairments of Financial Assets
+The net gains and losses in the fair value through profit or loss
+measurement category encompass both the changes in fair value
+from derivative financial instruments and from equity instruments,
+and gains and losses on realization. The decrease in net results was
+due in particular to reduced income from the valuation and
+realization of commodity derivatives.
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+22
+1,608
+62
+3,948
+10,832
+3
+10,835
+11,285
+1
+294
+11,580
+6,884
+3,912
+Total
+Interest-rate and currency derivatives
+Trade payables
+Commodity derivatives
+Financial liabilities
+13,971
+33
+4,241
+15,492
+18,245
+1,608
+388
+Commodity derivatives
+14,110
+Trade receivables
+Net value
+Financial
+collateral
+received/
+pledged
+Conditional
+netting
+amount
+(netting
+agreements)
+Carrying
+amount
+Amount offset
+E.ON uses a Group-wide treasury, risk management and reporting
+system. This system is a standard information technology solution
+that is fully integrated and is continuously updated. The system is
+designed to provide for the analysis and monitoring of the E.ON
+Group's exposure to liquidity, foreign exchange and interest risks.
+On a Group-wide basis, Finance Controlling/Counterparty Risk
+Management monitors and steers credit risks for banks, and
+Counterparty Risk Management monitors and steers corporates of
+a certain materiality. These activities are carried out each using a
+standard software package.
+Gross amount
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2022
+19,389
+389
+4,242
+24,020
+3,915
+27,935
+1,220
+€ in millions
+Financial assets
+29,385
+3,915
+1,249
+Financial
+collateral
+received/
+pledged
+amount
+Conditional
+netting
+Trade receivables
+€ in millions
+Financial assets
+Netting Agreements for Financial Assets and Liabilities as of December 31, 2023
+Collateral pledged to and received from financial institutions in
+relation to these liabilities and assets limits the utilization of credit
+lines in the fair value measurement of interest rate and currency
+derivatives, and is shown in the table.
+The netting agreements are derived from netting clauses
+contained in master agreements including those of the
+International Swaps and Derivatives Association (ISDA), the
+German Master Agreement for Financial Derivatives Transactions
+(DRV), the European Federation of Energy Traders (EFET) and the
+Financial Energy Master Agreement (FEMA).
+Gross amount
+Transactions and business relationships resulting in the financial
+assets and liabilities presented are regularly concluded on the basis
+of standard contracts that permit the conditional netting of open
+transactions in the event that a counterparty becomes insolvent. If
+there is also currently a legal right to set off and the intention is to
+settle on a net basis, offsetting is mandatory in accordance with
+IAS 32.
+The extent to which the offsetting of financial assets and financial
+liabilities is covered by netting agreements is presented in the
+following tables.
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+Compulsory netting is carried out if the netting criteria pursuant to
+IAS 32.42 are met cumulatively.
+22,160
+Amount offset
+(netting
+agreements)
+27
+1,276
+1,276
+Interest-rate and currency derivatives
+2,660
+-
+4,049
+6,709
+Carrying
+amount
+3
+Commodity derivatives
+10,062
+6
+192
+10,260
+3,912
+14,172
+Net value
+6,712
+3,764
+155
+10,346
+320
+Cash outflows for trade payables and other operating liabilities
+Other operating liabilities
+Put option liabilities under IAS 32
+Derivatives (with/without hedging relationships)
+Trade payables
+Cash outflows for financial liabilities
+Financial guarantees
+Other financial liabilities
+Cash outflows for liabilities within the scope of IFRS 7
+Lease obligations
+Commercial paper
+Bonds
+€ in millions
+Cash Flow Analysis as of December 31, 2023
+The following two tables illustrate the contractually agreed
+(undiscounted) cash outflows arising from the liabilities included in
+the scope of IFRS 7:
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Bank loans/liabilities to banks
+→ Consolidated Statement of Cash Flows
+Cash Flow Analysis as of December 31, 2022
+Cash outflows
+2024
+1,382
+2,031
+1,054
+469
+590
+373
+555
+58
+= Contents Q Search Back
+776
+19,578
+Cash outflows
+from 2029
+7,264
+Cash outflows
+2026-2028
+3,159
+2,910
+2025
+Cash outflows
+214
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+Trade payables
+Financial liabilities
+23,891
+86
+17,114
+41,091
+3,919
+45,010
+18,006
+Total
+86
+1,515
+1,515
+Interest-rate and currency derivatives
+12,436
+16,794
+29,230
+10,026
+1,429
+3,764
+14,242
+943
+211
+24,868
+1,424
+270
+270
+17,114
+42,252
+3,919
+46,171
+Total
+1,694
+1,694
+Interest-rate and currency derivatives
+10,145
+16,171
+26,316
+155
+26,471
+Commodity derivatives
+13,299
+187
+Separate Risk Committees/Steering Groups are responsible for the
+maintenance and further development of the strategy set by the
+Management Board of E.ON SE with regard to commodity,
+treasury and credit risk management policies.
+214
+The primary objectives of liquidity management at E.ON consist of
+ensuring the ability to pay at all times, the timely satisfaction of
+1. Liquidity Management
+Operating lease
+5
+2
+Income from variable lease payments
+21
+20
+Financial income from net investments
+Income from leasing
+1
+Finance lease
+2022
+2023
+E.ON as Lessor-Effects within the Income Statement
+€ in millions
+The following inpayments are expected from existing operating
+leases:
+Cash flows from operating leases are allocated to operating cash
+flow before interest and taxes. This also applies to cash inflows
+from finance leases with variable lease payments. Payments
+recognized as financing income from net investments increase the
+operating cash flow.
+The following effects from activity as lessor are recognized for the
+period under review:
+266
+Gain/loss from the disposal of assets
+252
+87
+thereof income from variable lease
+payments
+61
+Due in 4 to 5 years
+52
+58
+Due in 3 to 4 years
+57
+61
+Due in 2 to 3 years
+59
+65
+Due in 1 to 2 years
+82
+79
+Due within 1 year
+19
+Undiscounted lease payments
+2022
+2023
+€ in millions
+66
+49
+19
+123
+8
+14
+13
+32
+33
+Due in 3 to 4 years
+23
+23
+8
+15
+38
+38
+Due in 2 to 3 years
+27
+32
+18
+18
+45
+14
+20
+28
+Due in 4 to 5 years
+107
+370
+339
+141
+120
+11
+12
+44
+26
+33
+141
+Due in more than 5 years
+Total
+16
+20
+12
+12
+28
+32
+174
+Due in more than 5 years
+101
+103
+Other related parties
+525
+755
+Joint ventures
+1,543
+1,090
+Associated companies
+2,590
+648
+2,494
+442
+487
+Other related parties
+62
+83
+Joint ventures
+695
+437
+Liabilities
+Associated companies
+521
+7
+E.ON Integrated Annual Report 2023
+220
+Employee representatives on the Supervisory Board were paid
+compensation under the existing employment contracts with
+subsidiaries totaling €0.9 million (2022: €1.0 million).
+The members of the Supervisory Board received a total of €4.6
+million for their activity in 2023 (2022: €5.0 million).
+Provisions for these commitments amounted to €18.0 million as of
+December 31, 2023 (2022: €10.1 million).
+The expense determined in accordance with IFRS 2 for existing
+commitments arising from share-based payment in 2023 was
+€11.0 million (2022: €2.7 million).
+The total expense for 2023 for members of the Management
+Board amounted to €12.5 million (2022: €11.8 million) in short-
+term benefits and €0.2 million (2022: €0.3 million) in post-
+employment benefits. The cost of post-employment benefits is
+equal to the service cost of the provisions for pensions.
+Under IAS 24, compensation paid to key management personnel
+(members of the Management Board and of the Supervisory Board
+of E.ON SE) must be disclosed.
+Provisions
+Liabilities of E.ON payable to related companies as of December
+31, 2023, include €60 million (2022: €55 million) in trade
+payables and shareholder loans to operators of jointly owned
+nuclear power plants. These shareholder loans bear interest at 1.0
+percent (2022: 1.0 percent) and have no fixed maturity. E.ON
+continues to have in place with these power plants a cost-transfer
+agreement and a cost-plus-fee agreement for the procurement of
+electricity. The settlement of such liabilities occurs mainly through
+clearing accounts.
+Other related parties
+3
+3
+Joint ventures
+8
+4
+Associated companies
+11
+In 2023, E.ON generated income from transactions with related
+companies through the delivery of gas and electricity to
+distributors and municipal entities, especially municipal utilities.
+The relationships with these entities do not generally differ from
+those that exist with municipal entities in which E.ON does not
+have an interest. Expenses from transactions with related
+companies are generated mainly through electricity and gas
+deliveries as well as through management fees, IT services and
+third-party services.
+1,199
+1,007
+Receivables
+2023
+Income
+€ in millions
+Related-Party Transactions
+E.ON exchanges goods and services with a large number of
+companies as part of its continuing operations. Some of these
+companies are related parties, including associated companies
+accounted for under the equity method and their subsidiaries.
+Receivables and payables consist primarily of lease obligations
+from leaseback models and trade receivables. Joint ventures and
+subsidiaries that are not fully consolidated continue to be
+accounted for as associated companies. Transactions with related
+parties in the reporting year and in the previous year are
+summarized as follows:
+(34) Transactions with Related Parties
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+2022
+→ Notes
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+219
+408
+426
+Total
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+2,232
+3,881
+Associated companies
+516
+671
+Other related parties
+298
+161
+Joint ventures
+2,543
+678
+Associated companies
+3,357
+1,510
+Expenses
+405
+241
+280
+Other related parties
+365
+Joint ventures
+3,235
+1,587
+49
+Due in 1 to 2 years
+E.ON as Lessor-Operating Leases
+29
+Foreign Exchange Risk Management
+or losses. For example, E.ON faces certain risks that are either non-
+financial or non-quantifiable. Such risks principally include country
+risk, operational risk, regulatory risk and legal risk, which are not
+represented in the following analyses.
+The following discussion of E.ON's risk management activities and
+the estimated amounts generated from value-at-risk ("VaR") and
+sensitivity analyses are "forward-looking statements" that involve
+risks and uncertainties. Actual results could differ materially from
+those projected due to actual, unforeseeable developments in the
+global financial markets. The methods used by the Company to
+analyze risks should not be considered forecasts of future events
+E.ON is exposed to credit risk in its operating activities and through
+the use of financial instruments. Uniform credit risk management
+procedures are in place throughout the Group to identify, measure
+and steer credit risks.
+3. Credit Risks
+In the normal course of business, the E.ON Group is exposed to
+risks arising from price changes in foreign exchange, interest rates,
+commodities and asset management. These risks create volatility
+in earnings, equity, debt and cash flows from period to period.
+E.ON has developed a variety of strategies to limit or eliminate
+these risks, including the use of derivative financial instruments,
+among others.
+2. Price Risks
+E.ON SE determines the Group's financing requirements on the
+basis of short- and medium-term liquidity planning. The financing
+of the Group is controlled and implemented on a forward-looking
+basis in accordance with the planned liquidity requirement or
+surplus. Relevant planning factors taken into consideration include
+operating cash flow, capital expenditures, divestments, margin
+payments and the maturity of bonds and commercial paper.
+E.ON SE is responsible for steering the currency risks to which the
+E.ON Group is exposed.
+Cash pooling and external financing are largely centralized at E.ON
+SE and certain financing companies. Funds are provided to the
+other Group companies as needed on the basis of an "in-house
+banking" solution.
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+¹In order to harmonize the presentation of business with Residential and SME customers in the Group, the prior-year figures have been adjusted.
+contractual payment obligations and the optimization of costs
+within the E.ON Group.
+1,478
+Because it holds interests in businesses outside of the eurozone,
+currency translation risks arise within the E.ON Group.
+Fluctuations in exchange rates produce accounting effects
+attributable to the translation of the balance sheet and income
+statement items of the foreign consolidated Group companies
+included in the Consolidated Financial Statements. Translation
+risks are hedged through borrowing in the corresponding local
+currency, which may also include shareholder loans in foreign
+currency. In addition, derivative and non-derivative financial
+instruments are employed as needed. The hedges qualify for hedge
+accounting under IFRS as hedges of net investments in foreign
+operations. The Group's translation risks are reviewed at regular
+intervals and the level of hedging is adjusted whenever necessary.
+The respective debt factor, net assets and the enterprise value
+denominated in the foreign currency are the principal criteria
+governing the level of hedging.
+(2022: €0.7 million) and is mainly determined by the currencies
+Czech koruna, Hungarian forint and Swedish krona.
+The objective of commodity risk management is to transact
+through physical and financial contracts to optimize the value of
+the portfolio while reducing the potential negative deviation from
+target EBITDA and OCF.
+The E.ON portfolio of physical assets, long-term contracts and
+end-customer sales is exposed to substantial risks from
+fluctuations in commodity prices. The principal commodity prices
+to which E.ON is exposed relate, in particular, to electricity, gas,
+green and emissions certificates.
+Commodity Price Risk Management
+= Contents Q Search Back
+→ Consolidated Balance Sheets
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+The E.ON Group is also exposed to operating and financial
+transaction risks attributable to foreign currency transactions. The
+subsidiaries are responsible for managing their operating currency
+risks and are generally required to hedge their currency risks
+through E.ON SE. E.ON SE coordinates hedging throughout the
+Group companies and makes use of external derivatives as needed.
+It may either directly close out foreign currency positions that have
+been tendered, in whole or in part, through external transactions,
+or keep the position open within approved limits. The one-day
+value-at-risk (95 percent confidence) for transactional foreign
+currency positions totaled €0.2 million as of December 31, 2023
+→ Consolidated Statement of Income
+E.ON Integrated Annual Report 2023
+215
+A sensitivity analysis was performed on the Group's floating-rate
+borrowings and planned financing, including interest risk hedges.
+This measure is used for internal risk controlling and reflects the
+economic position of the E.ON Group. A one-percentage-point
+upward or downward change in interest rates (across all
+currencies) would raise or lower interest charges by ±€15 million
+(2022: ±€8.0 million) in the subsequent fiscal year.
+As of December 31, 2023, the E.ON Group held interest rate
+derivatives with a nominal value of €5,512 million (2022: €6,263
+million).
+With interest rate derivatives and cash on hand included, the share
+of financial liabilities with floating interest rates or with maturities
+of less than 12 months was 0 percent as of December 31, 2023
+(2022: 0 percent). The volume-weighted average interest rate of
+the financial liabilities, including interest rate derivatives, was 2.8
+percent as of December 31, 2023 (2022: 2.7 percent).
+E.ON is exposed to profit risks arising from floating-rate financial
+liabilities and future (re)financing needs. Positions based on fixed
+interest rates, on the other hand, are subject to changes in fair
+value resulting from the volatility of market interest rates. E.ON
+seeks a balanced maturity profile. This is influenced, among other
+factors, by the type of business model, existing liabilities as well as
+the regulatory framework in which E.ON operates. Interest rate
+derivatives are also used to manage interest rate risk.
+Interest Rate Risk Management
+Financial transaction risks result from payments originating from
+financial receivables and payables. They are generated both by
+external financing in a variety of foreign currencies, and by
+shareholder loans from within the Group denominated in foreign
+currency. Financial transaction risks are generally hedged.
+Consolidated Financial Statements
+In the normal course of business of the underlying energy
+production and retail sales activities, E.ON's individual
+management units are exposed to uncertain commodity market
+prices, which impacts operating results. All external trading on
+commodity markets contributes to reducing open commodity
+positions driven by sales and is undertaken in strict accordance
+with approved commodity hedging strategies.
+2,273
+9,737
+127
+1,351
+2,163
+2,684
+3,757
+110
+5,670
+5,980
+2023
+632
+20221
+91 to 180 days
+61 to 90 days
+31 to 60 days
+up to 30 days
+Past due by
+Not past due
+€ in millions
+Credit Risk Exposure for Trade Receivables for Which No Rating Information is Available
+Gross carrying amount
+2023
+8,354
+528
+34
+Total
+1,134
+1,871
+1,303
+2,001
+more than 180 days incl. specific valuation allowances
+123
+160
+45
+371
+29
+38
+176
+232
+31
+49
+33
+380
+512
+A very small number of proprietary trading transactions are
+entered into in separate trading books, which are subject to strict
+monitoring and limits based on risk metrics and governance. The
+processes and operational management models within the trading
+system are monitored by the local market risk teams and centrally
+managed by the Risk Management department.
+306
+As of December 31, 2023, the E.ON Group primarily held
+electricity and gas derivatives with a nominal value of €125,767
+million (2022: €136,765 million). Electricity derivatives account
+for €45,418 million (2022: €66,648 million) of this amount and
+gas derivatives for €80,268 million (2022: €70,055 million).
+Consolidated Financial Statements
+→ Notes
+→ Consolidated Balance Sheets
+= Contents Q Search Back
+E.ON Integrated Annual Report 2023
+218
+-6
+-3
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+162
+14
+11
+11
+18
+36
+37
+2022
+2023
+185
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+The liabilities from short-term agreements with a term of less than
+12 months entered into for the next fiscal year do not vary
+materially from the expenses of the current fiscal year.
+Cash outflows from lease agreements totaled €634 million (2022:
+€580 million) in the fiscal year and are allocated to operating cash
+flow in the amount of €251 million (2022: €223 million). This
+includes the lease expense for short-term and low-value leases as
+well as the expense from variable lease payments and interest
+expense for the period. Payments allocated to the amortization of
+the lease liability are recognized in cash flows from financing
+activities in the amount of €383 million (2022: €357 million).
+The subsidiary, E.ON Energy Markets GmbH (EEM), acts as a
+central interface to the wholesale markets. The main function of
+EEM is to consolidate E.ON's commodity positions, to reduce price
+risks from the distribution business and to diversify and reduce
+credit and margin risks.
+20
+17
+53
+46
+2022
+2023
+Present value of minimum
+lease payments
+Discounted non-guaranteed
+residual value
+2022
+2023
+Unrealized interest income
+2023
+2022
+2022
+2023
+Undiscounted lease payments
+E.ON as Lessor-Finance Leases
+The nominal and present values of the lease payments had the
+following maturities:
+The present value of minimum lease payments is recognized under
+receivables from finance leases (see Note 18). The short-term
+portion totals €29 million (2022: €33 million). There were no
+material changes to net investments in the period under review.
+E.ON enters into lease agreements as a lessor to a limited extent.
+Finance leases include technical equipment and machinery, in
+particular generation plants, that have been transferred to
+customers for use. Operating leases include assets that have been
+transferred for use, in particular real estate, heat and electricity
+generation plants and lines. There are no material risks in
+connection with rights retained to the assets temporarily
+transferred for use, with the result that risk management
+strategies, in particular, are not necessary. Residual-value
+guarantees are only entered into on an individual basis for
+purposes of additional hedging.
+E.ON as Lessor
+(see Note 27); the short-term portion of the lease liabilities totals
+€371 million (2022: €367 million). The maturity structure of the
+future payment obligations from leases is presented in Note 32.
+Due to the practical expedients used, the recognition of a right-of-
+use asset is not necessary for low-value leases and leases with a
+lease term of less than 12 months. Instead, a lease expense is
+recognized in these cases. The following amounts are recognized in
+the income statement in connection with leases in the fiscal year:
+Gain/loss from sale and leaseback transactions
+€ in millions
+Due within 1 year
+Interest expense from leasing
+At E.ON, liquid funds are normally invested at banks with good
+credit ratings, in money market funds with first-class ratings or in
+short-term securities (for example, commercial paper) of issuers
+with strong credit ratings. Bonds of public and private issuers are
+also selected for investment. Group companies that for legal
+reasons are not included in the cash pool invest money at leading
+local banks. Standardized credit assessment and limit-setting is
+complemented by daily monitoring of CDS levels at the banks and
+at other significant counterparties.
+million as of December 31, 2023 (2022: €37,086 million). For the
+remaining financial instruments, the maximum risk of default is
+equal to their nominal amounts.
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+Asset Management
+216
+To the extent possible, collateral is negotiated with counterparties
+for the purpose of reducing credit risk. Accepted as collateral are
+primarily guarantees issued by the respective parent companies,
+letters of comfort or evidence of profit and loss transfer
+agreements in combination with letters of awareness. To a lesser
+extent, the Company also requires bank guarantees and deposits
+of cash and securities as collateral to reduce credit risk. Risk
+management collateral in the forms mentioned above totaling
+€10.3 billion (2022: €61.0 billion) was used for setting limits. The
+lower wholesale market price level over the course of 2023 means
+that the collateral attributable to individual parent companies of
+our counterparties is lower and must be taken into account
+accordingly.
+In principle, each Group company is responsible for managing
+credit risk in its operating activities. Depending on the nature of
+the operating activities and the credit risk, additional credit risk
+monitoring and controls are performed both by the units and by
+Corporate Headquarters. Regular reports on credit limits, including
+their utilization, are submitted to the Risk Committee. Intensive,
+standardized monitoring of quantitative and qualitative early-
+warning indicators, as well as close monitoring of the credit quality
+of counterparties, enable E.ON to act early in order to minimize
+risk.
+In order to minimize credit risk arising from operating activities and
+from the use of financial instruments, the Company enters into
+transactions only with counterparties that satisfy the Company's
+internally established minimum requirements. Maximum credit
+risk is confined by credit limits based on internal and (where
+available) external credit ratings. The setting and monitoring of
+credit limits is subject to certain minimum requirements, which are
+based on Group-wide credit risk management guidelines. Long-
+term operating contracts and asset management transactions are
+not comprehensively included in this process. They are monitored
+separately at the level of the responsible units.
+Credit Risk Management
+A hypothetical change in market prices at the reporting date of
++10 percent or -10 percent would result in a theoretical increase in
+fair value and recognition in income in the amount of €767 million,
+or a decrease in fair value and recognition in expense in the
+amount of €768 million for the electricity derivatives (2022:
+±€1,338 million). A corresponding hypothetical change would
+result in a theoretical increase in fair value and recognition in
+income in the amount of €279 million or a decrease in fair value
+and recognition in expense in the amount of €279 million for gas
+derivatives (2022: ±€810 million). Because commodity hedge
+accounting is only applied in individual cases, hypothetical changes
+in market prices result in only immaterial effects recognized in
+other comprehensive income.
+Commodity exposures and risks are reported across the Group on
+a monthly basis to the members of the Risk Committee. A report
+on complex weather risks is prepared once each quarter.
+Income from subleases
+A key foundation of the commodity risk management system is
+the Group-wide Commodity Risk Policy and the corresponding
+internal policies of the units. These specify the control principles
+for commodity risk management, minimum required standards
+and clear management and operational responsibilities.
+There is no credit risk with respect to the exchange-traded forward
+and option contracts with an aggregate nominal value of €21,979
+For the purpose of financing long-term payment obligations,
+including those relating to asset retirement obligations (see Note
+26) and cash investments, financial investments totaling
+€2.3 billion (2022: €2.4 billion) were held predominantly by
+German E.ON Group companies as of December 31, 2023.
+Derivative transactions are generally executed on the basis of
+standard agreements that allow for the netting of all open
+transactions with individual counterparties. To further reduce
+credit risk, bilateral margining agreements are entered into with
+selected banks. Limits, which are regularly monitored, are imposed
+on the credit and liquidity risk resulting from bilateral margining
+agreements and exchange clearing. The systematic management
+of liquidity risk remains an important component of risk
+management at E.ON, particularly against the backdrop of the
+continued possibility of energy price volatility.
+The liquidation of Versorgungskasse Energie VVaG (VKE i. L.) was
+almost complete as of December 31, 2023. Financial investments
+under management amounted to €46.0 million as of December 31,
+Expenses from short-term leases (< 12 months)
+Expense for low-value leases not included in short-term leases
+Expense from variable lease payments
+These financial assets are invested on the basis of an accumulation
+strategy (total-return approach), with investments broadly
+diversified across the various asset classes, for example the money
+market, bond and equity asset classes, as well as alternative asset
+classes like real estate. The majority of the assets are held in
+investment funds managed by external fund managers. Corporate
+Asset Management at E.ON SE, which is part of the Company's
+Finance Department, is responsible for continuous monitoring of
+overall risks and those concerning individual fund managers. The
+three-month VaR with a 98 percent confidence interval for these
+financial assets was €78 million (2022: €166 million).
+E.ON as Lessee-Effects within the Income Statement
+€ in millions
+As of the balance sheet date of December 31, 2023, right-of-use
+assets are offset by lease liabilities with a present value of €2,874
+million (2022: €2,512 million) recognized under financial liabilities
+to future rental payments for the new office building of E.ON
+Sverige AB in Malmö, which was occupied in 2023 and is now
+included in the rights of use. The existing lease liabilities do not
+contain any covenant clauses that are linked to financial ratios.
+E.ON operates as a lessee especially in the areas of networks, land
+and buildings, and vehicle fleets. Leases are recognized in
+accordance with the right-of-use model as set out in IFRS 16. The
+tables in Note 15 present the development of the right-of-use
+assets by asset class. The net carrying amount of the rights of use
+at the balance sheet date of December 31, 2023, in the amount of
+€2,710 million (2022: €2,377 million) increased year-on-year by
+€333 million (2022: €47 million). In addition to the network
+business, the increase is primarily attributable to the areas of fiber
+optics, real estate and battery storage systems. Depreciation of
+right-of-use assets in the amount of €417 million (2022: €390
+million) showed a slight increase compared with the prior year.
+E.ON as Lessee
+(33) Leasing
+= Contents Q Search ← Back
+To ensure operative flexibility, in particular for real estate leases as
+well as in the area of wastewater disposal, extension and
+termination options are included in the agreements. In determining
+the lease term, E.ON considers all facts and circumstances that
+have an impact on the exercise of an extension option or the non-
+exercise of a termination option. In the determination of the lease
+liability, and correspondingly of the right-of-use assets, all
+reasonably certain cash outflows are taken into consideration. As
+of December 31, 2023, potential future cash outflows in the
+amount of €304 million (2022: €235 million) were not included in
+the lease liability as it is not reasonably certain that the leases will
+be renewed or not terminated. Possible future cash outflows for
+lease agreements that can be terminated without penalty by either
+party, subject to certain deadlines, are not included in this amount
+due to higher levels of uncertainty. Variable lease payments occur
+in only immaterial amounts and E.ON generally does not issue
+residual value guarantees. Leases not yet commenced to which
+E.ON as a lessee is committed result in potential future cash
+outflows over the expected lease terms of €26 million (2022:
+€110 million). The majority of the figure reported in 2022 related
+→ Notes
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+2023 (2022: €51.9 million). The company was deconsolidated on
+June 30, 2019.
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+217
+→ Consolidated Balance Sheets
+= Contents Q Search ← Back
+BSA Elsteraue GmbH, DE, Bitterfeld-Wolfen²
+49.0
+Dorsten Netz GmbH & Co. KG, DE, Dorsten
+100.0
+BTB Polska Sp.z.o.o., PL, Poznan²
+49.0
+25.1
+DON-Stromnetz Verwaltungs GmbH, DE, Donauwörth
+100.0
+83.0
+25.1
+COMCO MCS S.A., LU, Capellen²
+Coromatic A/S, DK, Roskilde¹
+Coromatic AB, SE, Bromma¹
+100.0
+39.9
+beschränkter Haftung, DE, Dortmund 5
+BTB Bayreuther Thermalbad GmbH, DE, Bayreuth
+33.3
+BTB Kältetechnik GmbH, DE, Garbsen²
+100.0
+Coromatic As a Service AB, SE, Bromma²
+Coromatic AS, NO, Kjeller¹
+Drava CHP Plant d.o.o., HR, Zagreb²
+100.0
+100.0
+Drivango GmbH i. L., DE, Düsseldorf²
+Brüggen.E-Netz GmbH & Co. KG, DE, Brüggen
+Brüggen.E-Netz Verwaltungs-GmbH, DE, Brüggen6
+100.0
+Dortmunder Energie- und Wasserversorgung Gesellschaft mit
+49.0
+100.0
+33.3
+100.0
+99.0 Coromatic Holding AB, SE, Bromma¹
+Der Solarbauer Borowski GmbH, DE, Essen²
+100.0
+100.0
+CHN Electrical Services Limited, GB, Coventry²
+100.0
+DES Dezentrale Energien Schmalkalden GmbH, DE, Schmalkalden
+Deutsche Gesellschaft für Wiederaufarbeitung von Kernbrennstoffen
+49.9
+Breitband-Infrastrukturgesellschaft Cochem-Zell mbH, DE, Cochem
+20.7
+CHN Group Ltd, GB, Coventry²
+42.5
+AG & Co. oHG, DE, Gorleben
+bremacon GmbH, DE, Bremen
+48.0
+CHN Special Projects Limited, GB, Coventry²
+100.0
+Dexas GmbH, DE, Hanover²
+100.0
+Broadband TelCom Power Europe GmbH, DE, Essen²
+100.0
+Citigen (London) Limited, GB, Coventry¹
+100.0
+DigiKoo GmbH, DE, Essen²
+100.0
+Broadband TelCom Power, Inc., US, Santa Ana¹
+100.0
+Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca
+DON-Stromnetz GmbH & Co. KG, DE, Donauwörth6
+100.0
+DAT DOEN WIJ B.V., NL, Schaijk²
+49.0
+Celsium Dom Sp. z o.o., PL, Skarżysko-Kamienna²
+Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna²
+Celsium Sp. z o.o., PL, Skarżysko-Kamienna²
+Certified B.V., NL, Utrecht²
+100.0
+100.0
+100.0
+87.8
+100.0
+DEM GmbH, DE, Elsdorf²
+DANEB Datennetze Berlin GmbH, DE, Berlin²
+DAT DOEN WIJ SCHAIJK B.V., NL, Schaijk²
+DD Turkey Holdings S.à r.l., LU, Luxembourg¹
+Delgaz Grid S.A., RO, Târgu Mureş¹
+100.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+99.9
+E WIE EINFACH GmbH, DE, Cologne¹
+100.0
+100.0
+e.dialog Netz GmbH, DE, Potsdam²
+100.0
+100.0
+E.DIS AG, DE, Fürstenwalde/Spree¹
+67.0
+100.0
+100.0
+56.5
+E.DIS Bau- und Energieservice GmbH, DE, Fürstenwalde/Spree²
+E.DIS Netz GmbH, DE, Fürstenwalde/Spree¹
+e.discom Telekommunikation GmbH, DE, Eberswalde¹
+100.0
+100.0
+230
+E.ON Integrated Annual Report 2023
+CHN Contractors Limited, GB, Coventry2
+Celsium A Sp. z o.o., PL, Skarżysko-Kamienna²
+DUKO Energie s.r.o., CZ, Hlinsko
+97.5
+DZT Service Sp. z o.o., PL, Świebodzice²
+BTB-Blockheizkraftwerks, Träger- und Betreibergesellschaft mbH
+Berlin, DE, Berlin¹
+100.0
+Coromatic Tullinge AB, SE, Bromma²
+100.0
+Dutchdelta Finance S.à r.l., LU, Luxembourg¹
+100.0
+BTC Power Cebu Inc., PH, Lapu-Lapu City2
+100.0
+Cremlinger Energie GmbH, DE, Cremlingen
+49.0
+DZT Ciepło Sp. z o.o., PL, Świebodzice²
+100.0
+Bützower Wärme GmbH, DE, Bützow
+20.0
+Crimmitschau-Lichtenstein Netz GmbH & Co. KG, DE, Crimmitschau²
+Crimmitschau-Lichtenstein Netz Verwaltungs GmbH, DE,
+81.0
+DZT Południe Sp. z o.o., PL, Świebodzice²
+100.0
+Carbon Capture Hürth GmbH, DE, Munich²
+100.0
+100.0
+Crimmitschau²
+DZT Service & Heat Sp. z o.o., PL, Świebodzice²
+100.0
+Cegecom S.A., LU, Luxembourg¹
+Celle-Uelzen Netz GmbH, DE, Celle¹
+100.0
+Cuculus GmbH, DE, Ilmenau6
+21.8
+100.0
+33.3
+100.0
+Stake
+2,246
+25,519
+24,054
+67,230
+50,142
+External sales by location of seller
+115,660
+93,686
+91
+99
+24,863
+2,948
+19,389
+1,365
+2,832
+2,191
+28,358
+33,145
+54,196
+37,497
+External sales by location of customer
+2022
+2023
+2022
+5,320
+2023
+4,201
+12,944
+92
+88
+96
+2,082
+2,301
+Right-of-use assets
+3,453
+3,592
+1,411
+1,588
+Bootstraplabs VC Follow-On Fund 2016, US, San Francisco
+BRAINERGY PARK JÜLICH - ENERGIE GmbH, DE, Essen²
+5,227
+177
+193
+144
+137
+1,498
+1,497
+Intangible assets
+115,660
+93,686
+91
+99
+14,645
+186
+2022
+2023
+2022
+E.ON Group
+9,452
+6,478
+Corporate Functions/Other
+9,073
+6,370
+Other
+1,898
+1,324
+The Netherlands
+18,540
+57,791
+14,822
+20,490
+15,935
+Germany
+50,001
+38,451
+Customer Solutions
+1,567
+2,379
+ECE/Turkey
+1,002
+985
+United Kingdom
+70,234
+= Contents Q Search ← Back
+225
+2023
+2022
+2023
+2022
+2023
+2022
+2023
+€ in millions
+Total
+Other
+Europe (other)
+The Netherlands¹
+Sweden
+United Kingdom
+Germany
+Geographic Segment Information
+The following table breaks down external sales (by customer and
+seller location), intangible assets and property, plant and
+equipment, as well as companies accounted for under the equity
+method, by geographic area:
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+= Contents Q Search ← Back
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+39
+Sweden
+79
+137
+100 Kilowatt Naperőmű Alfa Korlátolt Felelősségű Társaság, HU,
+Budapest²
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+(38) List of Shareholdings Pursuant to Section 313 (2) HGB
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+100.0
+→ Consolidated Statement of Cash Flows
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+227
+A concession agreement for the operation of a wastewater
+treatment plant exists between Zagrebacke otpadne vode d.o.o., a
+company consolidated at equity in the E.ON Group, and the City of
+Zagreb. By majority resolution of the City Assembly on January 25,
+2024, the City of Zagreb exercised its contractually agreed right to
+unilaterally terminate this concession. This results in a six-month
+period from the receipt of the termination letter of February 2,
+2024, during which the city will either acquire the individual assets
+of Zagrebacke otpadne vode d.o.o. or the shares held by E.ON in
+this company. The City of Zagreb has yet to determine how the
+sale will take place at the time of preparation of the Consolidated
+Financial Statements. The financial impact of the transactions
+cannot yet be reliably estimated at the time of preparation. Under
+the terms of the concession agreement, the disposal value will
+initially be determined by a consultant to be appointed jointly. The
+associate is allocated to the Energy Networks ECE/Turkey
+segment.
+Termination of Operating Concession Wastewater
+Treatment Plant in Croatia
+awarded the companies damages totaling approximately €0.3
+billion. Because not all legal remedies have yet been pursued and
+there are therefore currently uncertainties regarding the final
+outcome of the proceedings, E.ON is not recognizing either a
+receivable or any associated income in the 2023 financial
+statements, and instead a contingent receivable is reported (see
+Note 18).
+E.ON SE, E.ON Finanzanlagen GmbH and E.ON Iberia Holding
+GmbH are plaintiffs in arbitration proceedings against the
+Kingdom of Spain. In the arbitration proceedings, the three
+companies are asserting claims for damages for changes to the
+Spanish renewable energies subsidies regime. The arbitration
+proceedings have been pending at the International Centre for
+Settlement of Investment Disputes (ICSID) their registration on
+August 10, 2015. On January 18, 2024, an arbitration court
+Arbitration Proceeding in Spain
+E.ON issued two green corporate bonds at the beginning of
+January 2024. One bond has a volume of €750 million due in
+January 2031 with a 3.375 percent coupon; the other bond has a
+volume of €750 million due in January 2036 with a 3.75 percent
+coupon.
+Corporate Bonds Issued
+→ Consolidated Statement of Income
+On September 11, 2023, the Management Board approved a new
+management concept for the E.ON Group. Effective from January
+1, 2024, this entails a change in the definition of certain operating
+segments in accordance with IFRS 8 and the reallocation of the
+current goodwill amounts for all operating segments affected by
+the changes and reporting goodwill as of January 1, 2024. The
+Management Board's decision was regarded as an opportunity to
+test the goodwill of the existing operating segments for
+impairment. The impairment tests carried out as of September
+2023 found no indication of impairment. Following the entry into
+force of the new management concept, the goodwill amounts
+reallocated as of January 1, 2024, are subject to the provisions of
+IAS 36 on impairment testing. In the new Energy Infrastructure
+Solutions segment, there may be an impairment risk of up to a
+mid-triple-digit million euro amount.
+Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf6
+AggerEnergie GmbH, DE, Gummersbach¹
+Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel
+100.0
+100 Kilowatt Naperőmű Éta Korlátolt Felelősségű Társaság, HU,
+Budapest²
+beschränkter Haftung, DE, Wolfenbüttel²
+100.0
+49.0
+AIRCRAFT Klima-, Wärme- Kälte-, Rohrleitungsbau-Gesellschaft mit
+Abwasserentsorgung Bleckede GmbH, DE, Bleckede
+100.0
+100 Kilowatt Naperőmű Epszilon Korlátolt Felelősségű Társaság, HU,
+Budapest²
+80.0
+49.0
+Airco-Klima Service GmbH, DE, Garbsen²
+Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide
+100.0
+100 Kilowatt Naperőmű Delta Korlátolt Felelősségű Társaság, HU,
+Budapest²
+100.0
+AggerService GmbH, DE, Gummersbach²
+49.0
+Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr6
+100.0
+100 Kilowatt Naperőmű Béta Korlátolt Felelősségű Társaság, HU,
+Budapest²
+62.7
+Stake
+27.0
+Changes to the Business Model
+(37) Subsequent Events
+There were no loans to members of the Management Board in
+2023.
+4
+3,789
+4,284
+Companies accounted for under the equity
+method
+37,419
+40,749
+7
+8
+5,266
+5,867
+76
+4
+80
+5,453
+747
+796
+26,259
+28,545
+Property, plant and equipment
+2,377
+2,710
+1
+5
+133
+5,064
+71
+67
+55
+Total payments to former members of the Management Board and
+their beneficiaries amounted to €16.3 million (2022: €14.0
+million). Provisions of €170.6 million (2022: €184.5 million) have
+been established for the pension obligations to former members of
+the Management Board and their beneficiaries.
+In 2023, the members of the Management Board were granted
+seventh-tranche virtual shares under the E.ON Performance Plan
+(2022: sixth tranche of the E.ON Performance Plan) with a value of
+€7.8 million (2022: €7.8 million) and a total number of shares of
+832,082 (2022: 607,760) as part of the total compensation.
+compensation).
+Total compensation of the Management Board in 2023 amounted
+to €20.2 million (2022: €19.5 million). This consists of non-
+performance-based compensation (base salary, fringe benefits)
+and performance-based compensation (bonus, long-term variable
+Management Board
+There were no loans to members of the Supervisory Board in
+2023.
+Total remuneration to members of the Supervisory Board in 2023
+amounted to €4.6 million (2022: €5.0 million).
+Supervisory Board
+(36) Compensation of Supervisory Board and
+Management Board
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+226
+E.ON's customer structure resulted in a focus on the Germany
+region. Aside from that, there was no major concentration in any
+given geographical region or business area. Due to the large
+number of customers the Company serves and the variety of its
+business activities, there are no individual customers whose
+business volume is material compared with the Company's total
+business volume.
+¹Belgium included in Europe (other) segment.
+5,532
+6,652
+1,621
+2,238
+51
+34
+49.0
+8,212
+10,781
+-3,123
+-4,233
+-88
+-22
+-3
+-4,394
+-1,587
+Effects from derivative financial instruments
+4
+748
+5
+807
+Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction
+12
+2023
+2022
+2023
+Restructuring expenses
+Net book gains (+)/losses (-)
+€ in millions
+Full year
+Fourth quarter
+Non-Operating Adjustments
+The following table shows the reconciliation of earnings before
+financial results and taxes to adjusted EBITDA:
+Income from discontinued operations resulted from a transaction
+already completed in 2005. In accordance with the purchase
+agreement, a one-time purchase-price adjustment was made after
+an audit of the divested company was completed in the first
+quarter of 2023, and the contractual clause now took effect.
+2022
+→ Notes
+13
+-100
+484
+-514
+Non-operating interest expense (-)/income (+)
+-86
+-156
+-64
+-112
+Other non-operating impairments/reversals
+-504
+-448
+-115
+-31
+-107
+-3,536
+-4,587
+-3,838
+-1,777
+Non-operating adjustments of EBITDA
+-961
+-237
+-217
+-219
+Other non-operating earnings
+-112
+Depreciation of hidden reserves (-) and liabilities (+) from the innogy transaction
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+11,511
+7,225
+Operating cash flow before interest and taxes
+2022
+2023
+€ in millions
+Reconciliation of Operating Cash Flow¹
+The following table shows the reconciliation of operating cash flow
+before interest and taxes to operating cash flow from continuing
+operations:
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+Interest payments
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+E.ON Integrated Annual Report 2023
+222
+¹Because of changes in segment reporting, the prior-year figure was adjusted accordingly.
+2Adjusted for non-operating effects.
+4,576
+6,010
+1
+54
+88
+investments in intangible assets and property, plant and
+equipment
+4,753
+6,421
+Consolidated Financial Statements
+-855
+-872
+Tax payments
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+223
+Non-controlling interests' share of operating earnings rose from
+€517 million to €912 million mainly because of higher operating
+earnings at companies at the network business in Germany with a
+significant proportion of non-controlling interests. This
+development resulted from a larger regulated asset base
+compared with the prior year and the recording of a price-driven
+increase in network fees.
+The non-operating tax result is primarily influenced by the fair
+value measurement of commodity derivatives in various countries
+with different tax rates and by reversals of deferred taxes due to
+the improved earnings situation in Germany and the United
+Kingdom and taxes for previous years mainly from changes in tax
+provisions.
+The decline in non-operating interest expense/income resulted
+from the altered direction of interest-rate movements. An increase
+in interest rates in the prior year led to income from accruals on
+non-current provisions for asset-retirement obligations, provisions
+for recultivation and remediation obligations, and other non-
+current provisions. In the interim interest rates declined relative to
+prior-year balance-sheet date. By contrast, E.ON recorded positive
+valuation effect on securities recognized at fair value. The positive
+effect of €187 million (prior year: €204 million) from the
+difference between the nominal interest rate and the effective
+interest rate of former innogy bonds adjusted due to the purchase-
+price allocation is still recorded under non-operating interest
+expense/income.
+Along with the depreciation charges in connection with the innogy
+purchase-price allocation, which are disclosed separately, E.ON
+recorded impairment charges mainly on specific assets at
+Customer Solutions and on the IFRS book value of VSEH in
+Slovakia at Energy Networks.
+of - €130 million (prior year: -€410 million). Preussen Elektra's
+earnings, which are disclosed as non-operating income effective
+2023, had a countervailing effect (€289 million).
+Non-operating expense/income mainly consists of earnings effects
+of-€229 million (prior year: €286 million) at shareholdings in
+Turkey accounted for using the equity method in conjunction with
+the application of IAS 29 and a significantly lower valuation effects
+Effects in connection with derivative financial instruments
+changed by €1,110 million to -€4,233 million. The reason was
+that prices on commodity markets decreased almost continually
+during the year, which led to declining fair value measurements on
+forward sales and procurement contracts.
+Restructuring expenses in the 2023 financial year were below
+those of the prior year and included, as in the prior year, primarily
+expenditures in conjunction with the restructuring of the sales
+business in the United Kingdom.
+Net book gains/losses were minor in 2023 and resulted mainly
+from the combination of VSEH and ZSE in Slovakia. Book gains in
+the prior year consist in particular of the partial disposal of
+Westconnect.
+In addition, effects from the valuation of certain provisions on the
+balance sheet date are disclosed in non-operating earnings. In
+addition, effects that are to be initially recognized from the
+subsequent measurement of hidden reserves and charges in
+connection with the innogy purchase price allocation are included.
+The non-operating earnings effects for which EBITDA is adjusted
+include, in particular, non-operating interest expense/income,
+income and expenses from the marking to market on the reporting
+date of unrealized commodity derivatives and related provisions
+for contingent losses, where material, book gains/losses, certain
+restructuring expenses, impairment charges and reversals
+recognized on equity investments in affiliated or associated
+companies, and other contributions to non-operating earnings. IAS
+29 was applied for the first time in 2022 because of the
+hyperinflation in Turkey and the effects recognized in income are
+also presented in other non-operating earnings.
+Operating earnings also include income from investment subsidies
+for which liabilities are recognized.
+Unadjusted earnings before interest, taxes, depreciation and
+amortization ("EBITDA") represents the Group's income/loss
+reported in accordance with IFRS corrected by net interest income,
+income taxes and impairment charges and reversals of impairment
+charges. To improve its meaningfulness as an indicator of the
+sustainable earnings power of the E.ON Group's business,
+unadjusted EBITDA is adjusted for certain non-operating effects.
+The E.ON Management Board is convinced that adjusted EBITDA
+is the most suitable key figure for assessing operating
+performance because it presents E.ON's operating earnings
+independently of non-operating factors, interest, taxes and
+amortization.
+In 2023, adjusted EBITDA, a measure of earnings before interest,
+taxes, depreciation and amortization adjusted to exclude
+extraordinary effects ("adjusted EBITDA"), was used at E.ON for
+purposes of internal management control and as the most
+important indicator of a business's sustainable earnings power.
+Adjusted EBITDA
+1Operating cash flow from continuing operations.
+-594
+10,045
+5,654
+Operating cash flow
+-716
+-12
+9,498
+1,817
+1,539
+23,977
+7,419
+7,722
+Germany
+19,570
+16,964
+70,234
+57,791
+Customer Solutions
+120
+161
+38,180
+ECE/Turkey
+2023
+Sweden
+1,314
+2,038
+1,434
+2,199
+2022
+2023
+Germany
+Energy Networks
+€ in millions
+2022
+Gas
+United Kingdom
+5,019
+2022
+2023
+12,862
+Germany
+Energy Networks
+€ in millions
+Electricity
+External sales of the products electricity and gas recognized under
+IFRS 15 are broken down by reportable segment as follows:
+The "Other" item consists in particular of revenues generated from
+services.
+38,180
+23,977
+E.ON Group
+4,846
+17,176
+Corporate Functions/Other
+4,167
+2,756
+Other
+115,660
+93,686
+2,965
+1,640
+The Netherlands
+7,246
+11,918
+4,814
+Total
+Other
+Gas
+-3,838
+-1,777
+Non-operating adjustments of EBITDA
+8,059
+9,370
+1,949
+1,581
+Adjusted EBITDA
+2022
+2023
+2022
+-4,587
+2023
+Full year
+Fourth quarter
+Reconciliation to Adjusted EBITDA
+-1,003
+-3,281
+-2,795
+-971
+Non-operating adjustments of net income/loss
+1,306
+1,922
+738
+€ in millions
+-3,536
+Income/loss from continuing operations before depreciation, interest result and income taxes
+-196
+Electricity
+€ in millions
+Segment Information by Product
+External sales by product break down as follows:
+Additional Entity-Level Disclosures
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity → Notes
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+224
+1,070
+1,195
+-2,855
+-1,272
+Income/loss from continuing operations before interest results and income taxes
+-3,453
+-3,588
+-966
+-1,076
+Scheduled depreciation/impairments and amortization/reversals
+4,523
+4,783
+-1,889
+Non-operating taxes
+AirSon Engineering AB, SE, Ängelholm²
+214
+100 Kilowatt Naperőmű Gamma Korlátolt Felelősségű Társaság, HU,
+Budapest²
+625
+8,059
+9,370
+729
+-1
+223
+179
+-4
+2
+918
+-79
+115,660
+-97
+93,686
+115,660
+2022
+2023
+93,686
+0
+-58,520
+-58,520
+-81,147
+57,701
+58,521
+2022
+2023
+1
+2022
+26,760
+30,941 -81,148
+47,076
+0
+11,445
+-221
+-2,983
+100.0
+100.0
+Bayernwerk Energieservice GmbH & Co. KG, DE, Regensburg¹
+100.0
+100.0 Bayernwerk Energiedienstleistungen Licht GmbH, DE, Regensburg²
+100.0
+bildungszentrum energie GmbH, DE, Halle (Saale)²
+60.0
+Bayernwerk Energiebringer GmbH, DE, Regensburg²
+100.0
+Avacon Consult GmbH, DE, Wolfenbüttel²
+Avacon Data Center GmbH, DE, Helmstedt²
+Avacon Hochdrucknetz GmbH, DE, Helmstedt¹
+Avacon Natur 4. Beteiligungs-GmbH, DE, Sarstedt²
+Avacon Natur 5. Beteiligungs-GmbH, DE, Sarstedt²
+Avacon Natur 6. Beteiligungs-GmbH, DE, Sarstedt²
+Avacon Natur 7. Beteiligungs-GmbH, DE, Sarstedt²
+Stake
+-
+Name, Location
+76
+141
+Investments
+11,511
+7,225
+-1
+-2
+2,067
+-2,547
+Operating cash flow before interest and taxes
+-2,862
+1
+100.0
+2023
+Equity-method earnings
+127
+177
+358
+433
+671
+894
+411
+510
+2,763
+3,752
+Investments
+146
+-116
+354
+371
+989
+932
+1,198
+1,419
+927
+966
+536
+648
+5,557
+966
+Depreciation and amortization²
+41
+305
+Adjusted EBITDA
+Sales
+Intersegment sales
+External sales
+€ in millions
+E.ON Group
+Consolidation
+Corporate
+Functions/Others
+¹Because of changes in segment reporting, the prior-year figure was adjusted accordingly.
+2Adjusted for non-operating effects.
+238
+293
+368
+38
+127
+177
+300
+363
+671
+893
+411
+510
+2,737
+3,628
+investments in intangible assets and property, plant and
+equipment
+57
+100.0
+Bayernwerk Energieservice Verwaltungs GmbH, DE, Regensburg²
+Bayernwerk Energietechnik GmbH, DE, Regensburg¹
+100.0
+40.0
+90.0
+Biomasseverwertung Straubing GmbH, DE, Straubing
+Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing
+61.0
+BEW Netze GmbH, DE, Wipperfürth
+62.2
+Bayerische-Schwäbische Wasserkraftwerke Beteiligungsgesellschaft
+mbH, DE, Gundremmingen¹
+100.0
+Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam²
+49.0
+Bayerische Energietechnik GmbH, DE, Garching
+Bayernwerk AG, DE, Regensburg¹
+100.0
+36.7
+100.0 Kerntechnische Hilfsdienst GmbH GbR, DE, Eggenstein-
+Leopoldshofen
+Bayerische Elektrizitätswerke GmbH, DE, Augsburg²
+Beteiligungsgesellschaft der Energieversorgungsunternehmen an der
+50.0
+99.2
+32.4
+Biogas Wassenberg Verwaltungs GmbH, DE, Wassenberg
+Biogasanlage Schwalmtal GmbH, DE, Schwalmtal²
+Biogasudviklingsselskabet af 2022 ApS, DK, Frederiksberg
+100.0
+Beteiligung N1 GmbH, DE, Helmstedt²
+100.0
+,,Biogazownia 1" Sp. z o.o., PL, Poznan²
+100.0
+100.0
+Bayernwerk Asset- und Projektservice GmbH, DE, Regensburg²
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Bayernwerk Akademie GmbH, DE, Regensburg²
+= Contents Q Search ← Back
+E.ON Integrated Annual Report 2023
+229
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+25.6
+100.0
+50.0
+BMR Windenergie Jülich GmbH & Co. KG, DE, Geilenkirchen
+BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree²
+BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree
+40.7
+46.5
+25.1
+BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels6
+BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld
+BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz
+100.0
+100.0
+Consolidated Financial Statements
+Beteiligung H1 GmbH, DE, Helmstedt²
+49.0
+BASF enviaM Solarpark Schwarzheide GmbH, DE, Schwarzheide6
+Bayerische Bergbahnen-Beteiligungs-Gesellschaft mbH, DE,
+Gundremmingen¹
+Bioerdgas Schwandorf GmbH, DE, Schwandorf²
+100.0
+Bayernwerk Netz GmbH, DE, Regensburg¹
+94.1
+Avacon Wasser GmbH, DE, Wolfenbüttel¹
+90.0
+Bioerdgas Hallertau GmbH, DE, Wolnzach²
+100.0
+90.0
+100.0
+51.0
+100.0
+100.0
+100.0
+100.0
+Bingen Energie Zukunft GmbH & Co. KG, DE, Bingen am Rhein²
+Bingen Energie Zukunft Verwaltung GmbH, DE, Bingen am Rhein²
+Bioenergie Bad Wimpfen GmbH & Co. KG, DE, Bad Wimpfen²
+Bioenergie Bad Wimpfen Verwaltungs-GmbH, DE, Bad Wimpfen²
+Bioenergie Kirchspiel Anhausen GmbH & Co.KG, DE, Anhausen²
+Bioenergie Kirchspiel Anhausen Verwaltungs-GmbH, DE, Anhausen²
+Bioenergie Merzig GmbH, DE, Merzig²
+100.0
+100.0
+100.0
+100.0
+Bayernwerk Gashochdrucknetz GmbH & Co. KG, DE, Regensburg¹
+100.0
+100.0 Bayernwerk Gashochdrucknetz Verwaltungs GmbH, DE, Regensburg²
+100.0
+Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg²
+Bayernwerk Natur GmbH, DE, Unterschleißheim¹
+100.0
+Avacon Netz GmbH, DE, Helmstedt¹
+Avacon Natur GmbH, DE, Sarstedt¹
+100.0
+AVU Aktiengesellschaft für Versorgungs-Unternehmen, DE,
+50.0
+Gevelsberg4
+100.0
+BETA GmbH, DE, Illingen²
+25.1
+32.4
+Biogas Wassenberg GmbH & Co. KG, DE, Wassenberg6
+50.0
+BDK Budapesti Dísz- és Közvilágítási Korlátolt Felelősségű Társaság,
+HU, Budapest
+100.0
+Balve Netz GmbH & Co. KG, DE, Balve
+BAG Port 1 GmbH, DE, Regensburg²
+100.0
+65.5
+Biogas Schwalmtal GmbH & Co. KG, DE, Schwalmtal²
+Biogas Steyerberg GmbH, DE, Steyerberg²
+50.0
+Bayernwerk Sonnenenergie GmbH, DE, Bayreuth
+49.0
+Bäderbetriebsgesellschaft St. Ingbert mbH, DE, St. Ingbert
+100.0
+Bayernwerk Regio Energie GmbH, DE, Regensburg²
+48.0
+AWOTEC Gebäude Servicegesellschaft mit beschränkter Haftung, DE,
+Saarbrücken6
+80.0
+Biogas Ducherow GmbH, DE, Ducherow²
+100.0
+Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg¹
+4,472
+Operating cash flow before interest and taxes
+51.0
+-201
+Stake
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Consolidated Financial Statements
+Consolidated Financial Statements
+228
+100.0
+100.0
+100.0
+100.0
+Avacon Beteiligungen GmbH, DE, Helmstedt¹
+Avacon Connect 1. VG GmbH, DE, Helmstedt²
+Avacon Connect 2. VG GmbH, DE, Helmstedt²
+Avacon Connect GmbH, DE, Laatzen¹
+30.0
+100.0
+49.0
+49.0
+61.4
+Avacon AG, DE, Helmstedt 1, 15
+E.ON Integrated Annual Report 2023
+49.0
+→ Consolidated Statement of Income
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+Corporate Functions/Other contains E.ON SE itself and the
+interests held directly by E.ON SE. The main task of Corporate
+Functions is to manage the E.ON Group. This includes the strategic
+development of the Group and the management and financing of
+the existing business portfolio. The E.ON Group's internal service
+providers are also reported here. This includes E.ON Energy
+Markets GmbH as the Group's central commodity procurement
+unit. In addition, the non-strategic activities of the E.ON Group are
+reported here. This includes the operation until April 15, 2023, and
+the retirement of the German nuclear power plants, which are
+managed by the PreussenElektra GmbH operating unit, and the
+electricity generation business in Turkey, all of which were
+reported until the end of 2022 in the Non-Core Business segment.
+Corporate Functions/Other
+This segment combines sales activities and the corresponding
+Customer Solutions in Sweden, Norway, Denmark, Italy, the Czech
+Republic, Hungary, Croatia, Romania, Poland, Slovakia and the
+innovative solutions business.
+Other
+The segment comprises electricity and gas sales and Customer
+Solutions in the Netherlands.
+The Netherlands
+UK.
+This segment reports sales activities and customer solutions in the
+United Kingdom
+This segment consists of activities that supply our customers in
+Germany with electricity and gas and the distribution of specific
+products and services in areas for improving energy efficiency and
+energy independence. This item also includes the heating business
+in Germany.
+Germany
+→ Consolidated Statement of Cash Flows
+Customer Solutions
+East-Central Europe/Turkey
+This segment comprises the electricity networks businesses in
+Sweden.
+Sweden
+This segment combines the electricity and gas distribution
+networks and all related activities in Germany.
+Germany
+Energy Networks
+Led by its Corporate Headquarters in Essen, Germany, the E.ON
+Group comprises the reporting segments described below, all of
+which are reported here in accordance with IFRS 8. The combined
+segments, which are not separately reportable, in the Energy
+Networks East-Central Europe/Turkey unit and the Customer
+Solutions Other unit are of subordinate importance and have
+similar economic characteristics with respect to customer
+structure, products and distribution channels.
+(35) Segment Reporting
+Segment Information
+= Contents Q Search ← Back
+→ Consolidated Balance Sheets
+→ Notes
+This segment combines the distribution network activities in the
+Czech Republic, Hungary, Romania, Poland, Croatia, Slovakia and
+Turkey.
+0.0
+AV Packaging GmbH, DE, Munich 1, 12
+49.0
+49.0
+Abwasserentsorgung Marne-Land GmbH, DE, Diekhusen-Fahrstedt
+76.1 Abwasserentsorgung Schladen GmbH, DE, Schladen6
+50.0 Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt
+Abens-Donau Netz GmbH & Co. KG, DE, Mainburg
+A/V/E GmbH, DE, Halle (Saale)²
+100.0
+4Motions GmbH, DE, Leipzig²
+100.0
+Altmärker Solarstrom GmbH, DE, Kusey²
+20.0
+Abwasserentsorgung Kropp GmbH, DE, Kropp
+25.0
+Amber Newco B.V., NL, 's-Hertogenbosch¹
+450connect GmbH, DE, Cologne
+Alsdorf Netz GmbH, DE, Alsdorf6
+25.0
+Abwasserentsorgung Kappeln GmbH, DE, Kappeln
+100.0
+100 Kilowatt Naperőmű Kappa Korlátolt Felelősségű Társaság, HU,
+Budapest²
+50.0
+Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, DE, Essen
+49.0
+Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog
+100.0
+-193
+50.1
+100.0
+49.0
+Anco Sp. z o.o., PL, Jarocin²
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+Abfallwirtschaft Rendsburg-Eckernförde GmbH, DE, Borgstedt
+Abfallwirtschaft Schleswig - Flensburg GmbH, DE, Schleswig
+Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst
+Abwasser und Service Burg, Hochdonn GmbH, DE, Burg
+Abwasser und Service Mittelangeln GmbH, DE, Mittelangeln
+Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf6
+Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt
+Ackermann & Knorr Ingenieur GmbH, DE, Chemnitz²
+33.3
+Abwassergesellschaft Ilmenau mbH, DE, Melbeck6
+39.0
+Abwassergesellschaft Gehrden mbH, DE, Gehrden
+49.0
+Bardowick6
+49.0
+90.0
+Aton Projects V.O.F., NL, Sittard¹
+49.0
+100.0
+Aton Projects B.V., NL, Schinnen¹
+25.0
+Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt
+Abwasserentsorgung Uetersen GmbH, DE, Uetersen
+Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick6
+Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
+49.0
+49.0
+50.0
+Abens-Donau Netz Verwaltung GmbH, DE, Mainburg
+Abfallwirtschaft Dithmarschen GmbH, DE, Heide
+90.0
+Artelis S.A., LU, Luxembourg¹
+49.0
+100.0
+221
+E.ON Integrated Annual Report 2023
+49.0
+= Contents Q Search Back
+760
+993
+854
+1,030
+452
+576
+4,153
+5,034
+15,315
+12,221
+10,182
+810
+10,997
+32,980
+38,732
+36,106
+3,003
+3,905
+1,007
+991
+16,248
+610
+1,081
+4,955
+31,992
+6,796
+227
+777
+-66
+Consolidated Financial Statements
+-71
+-136
+-155
+-196
+-214
+-304
+-355
+-180
+-185
+324
+-1,566
+5
+11
+9
+7
+5
+4
+137
+185
+247
+343
+394
+-1,705
+6,570
+208
+9,214
+2022
+2023
+2022
+2023
+Other
+The Netherlands
+United Kingdom
+Germany
+Customer Solutions
+Energy Networks
+ECE/Turkey
+Germany
+2022
+11,185
+2023
+13,609
+2023
+Depreciation and amortization²
+Adjusted EBITDA
+Sales
+Intersegment sales
+External sales
+€ in millions
+Financial Information by Business Segment¹
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+9,011
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Equity-method earnings
+2022
+Sweden
+5,503
+19,112
+1,162
+884
+2023
+5
+5
+5,063
+14,705
+11,140
+5,227
+4,201
+25,422
+23,969
+10,792
+29,518
+25,314
+1,841
+3,021
+1,002
+986
+2022
+2023
+2022
+2022
+2023
+ESN Sicherheit und Zertifizierung GmbH, DE, Schwentinental²
+100.0
+envia SERVICE GmbH, DE, Cottbus¹
+55.0
+ESN EnergieSysteme Nord GmbH, DE, Schwentinental²
+45.0
+envia Mitteldeutsche Energie AG, DE, Chemnitz¹
+ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg
+EWV Baesweiler GmbH & Co. KG, DE, Baesweiler
+EWV Baesweiler Verwaltungs GmbH, DE, Baesweiler6
+45.0
+50.2
+100.0
+57.9
+100.0
+100.0
+53.7
+28.9
+envia TEL GmbH, DE, Markkleeberg¹
+100.0 Essent Direct Sales B.V., NL, 's-Hertogenbosch¹
+100.0
+EZV Energie- und Service Verwaltungsgesellschaft mbH, DE, Wörth
+am Main 6
+28.8
+envia THERM GmbH, DE, Bitterfeld-Wolfen¹
+Essent Energy Group B.V., NL, 's-Hertogenbosch¹
+Fernwärmeversorgung Freising Gesellschaft mit beschränkter
+100.0
+FAMIS GmbH, DE, Saarbrücken¹
+20.0
+100.0
+EWV Energie- und Wasser-Versorgung GmbH, DE, Stolberg/Rhld.¹
+EZV Energie- und Service GmbH & Co. KG Untermain, DE, Wörth am
+Main6
+ESK GmbH, DE, Dortmund²
+Enervolution GmbH, DE, Bochum²
+envelio GmbH, DE, Cologne²
+50.0
+40.5
+evm Windpark Höhn GmbH & Co. KG, DE, Höhn6
+EWIS BV, NL, Ede¹
+enviaM Beteiligungsgesellschaft Chemnitz GmbH, DE, Chemnitz¹
+33.2
+100.0
+100.0
+Erneuerbare Energien Blankenburg GmbH, DE, Blankenburg
+50.0
+EWR Aktiengesellschaft, DE, Worms 5, 11
+1.3
+ENL Energiepark Niederlausitz GmbH & Co. KG, DE, Lützen²
+100.0
+75.0
+ENNI Energienetze Rheinberg GmbH & Co. KG, DE, Rheinberg6
+Erneuerbare Energien Rheingau-Taunus GmbH, DE, Bad Schwalbach
+ErwärmBAR GmbH, DE, Eberswalde
+25.1
+50.0
+EWR Dienstleistungen GmbH & Co. KG, DE, Worms5
+EWR GmbH, DE, Remscheid5
+25.0
+20.0
+ENRO Ludwigsfelde Netz GmbH, DE, Ludwigsfelde²
+100.0
+ESCO Heating & Cooling S.r.l., IT, Milan6
+50.0
+Ense Stromnetz GmbH & Co. KG, DE, Ense
+25.1
+eShare.one GmbH, DE, Dortmund6
+18.0
+100.0
+FITAS Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE, Pullach
+im Isartal²
+100.0
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+Stake
+FEV US LLC, US, Palo Alto¹
+100.0
+Gas-Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
+Rheda-Wiedenbrück6
+Gemeinschaftskernkraftwerk Grohnde Management GmbH, DE,
+49.0
+→ Consolidated Balance Sheets
+83.2
+FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg
+49.0
+Gasnetzgesellschaft Warburg GmbH & Co. KG, DE, Warburg
+49.0
+90.0
+Gasnetzgesellschaft Windeck mbH & Co. KG, DE, Windeck
+49.9
+Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach²
+Gemeinschaftskraftwerk Weser GmbH & Co. oHG., DE, Emmerthal¹
+75.0
+66.7
+FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE, Pullach im
+Isartal²
+90.0
+100.0
+Emmerthal²
+Essent Energy Infrastructure Solutions B.V., NL, 's-Hertogenbosch¹
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Income
+50.0
+Haftung (FFG), DE, Freising
+enviaM Beteiligungsgesellschaft mbH, DE, Essen¹
+100.0
+Essent Energy Next Solutions B.V., NL, 's-Hertogenbosch¹
+100.0
+Fernwärmeversorgung Saarlouis- Steinrausch Investitionsgesellschaft
+mbH, DE, Saarlouis²
+100.0
+enviaM Neue Energie Management GmbH, DE, Lützen²
+Essent IT B.V., NL, 's-Hertogenbosch¹
+Essent Nederland B.V., NL, 's-Hertogenbosch¹
+enviaM Zweite Neue Energie Management GmbH, DE, Lützen²
+EPE Energiepark Elbeland GmbH & Co. KG, DE, Markkleeberg²
+100.0
+100.0
+100.0
+→ Consolidated Statement of Cash Flows
+Essent N.V., NL, 's-Hertogenbosch¹
+100.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+Fernwärmeversorgung Zwönitz GmbH (FVZ), DE, Zwönitz
+50.0
+100.0
+FEV Europe GmbH, DE, Essen 1,8
+100.0
+100.0
+235
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search Back
+FEV Future Energy Ventures Israel Ltd, IL, Herzliya²
+49.0
+49.0
+50.0
+30.0
+Energieversorgung Timmendorfer Strand GmbH & Co. KG, DE,
+49.0
+51.0
+Timmendorfer Strand²
+49.0
+Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde
+49.0
+40.0
+Energiewacht B.V., NL, Zwolle¹
+100.0
+Energie und Wasser Potsdam GmbH, DE, Potsdam5
+35.0
+50.0
+Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG (ews),
+DE, Bad Segeberg
+Energie-Pensions-Management GmbH, DE, Hanover²
+Energie Region Taunus - Goldener Grund - GmbH & Co. KG, DE, Bad
+Camberg6
+70.0
+Energiewacht Facilities B.V., NL, Zwolle¹
+100.0
+49.0
+Energiewacht West Nederland B.V., NL, Rotterdam¹
+100.0
+Energie Vorpommern GmbH, DE, Trassenheide
+49.0
+Energie Revolte GmbH, DE, Düren²
+100.0
+Energiedirect B.V., NL, 's-Hertogenbosch¹
+100.0
+50.1
+Energieversorgung Alzenau GmbH (EVA), DE, Alzenau6
+50.0
+49.0
+elvah GmbH, DE, Essen²
+Gasnetzgesellschaft Wörrstadt mbH & Co. KG, DE, Saulheim6
+100.0
+EMG Energimontagegruppen AB, SE, Karlshamn²
+100.0
+Energienetze Schaafheim GmbH, DE, Regensburg²
+Energiepark Jülich-Ost WP JO II GmbH & Co. KG, DE,
+Mönchengladbach²
+100.0
+Energieversorgung Marienberg GmbH, DE, Marienberg
+49.0
+100.0
+Emscher Lippe Energie GmbH, DE, Gelsenkirchen 1,9
+49.9
+Energiepartner Dörth GmbH, DE, Dörth6
+Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn6
+Energieversorgung Putzbrunn Verwaltungs GmbH, DE, Putzbrunn
+Energieversorgung Sehnde GmbH, DE, Sehnde
+49.0
+10.0
+11
+Energetyka Cieplna Opolszczyzny S.A., PL, Opole
+Energie BOL GmbH, DE, Ottersweier
+46.7 Energiepartner Elsdorf GmbH, DE, Elsdorf6
+40.0
+49.9
+Energie Inspectie B.V., NL, Leeuwarden6
+48.0
+Energie Mechernich GmbH & Co. KG, DE, Mechernich
+Energie Mechernich Verwaltungs-GmbH, DE, Mechernich
+Energie Schmallenberg GmbH, DE, Schmallenberg
+Energiepartner Hermeskeil GmbH, DE, Hermeskeil6
+Energiepartner Kerpen GmbH, DE, Kerpen
+49.0 Energiepartner Niederzier GmbH, DE, Niederzier6
+49.0 Energiepartner Projekt GmbH, DE, Essen
+44.0 Energiepartner Solar Kreuztal GmbH, DE, Kreuztal6
+20.0
+Energieversorgung Niederkassel GmbH & Co. KG, DE, Niederkassel6
+Energieversorgung Oberhausen Aktiengesellschaft, DE, Oberhausen 5,
+EVG Energieversorgung Gemünden GmbH, DE, Gemünden am Main
+EVIP GmbH, DE, Bitterfeld-Wolfen¹
+69.5
+74.9
+EPE Energiepark Management GmbH, DE, Markkleeberg²
+eprimo GmbH, DE, Neu-Isenburg¹
+100.0
+Essent Retail Energie B.V., NL, 's-Hertogenbosch¹
+100.0
+100.0
+energis GmbH, DE, Saarbrücken¹
+71.9
+EPS Polska Holding Sp. z o.o., PL, Warsaw¹
+100.0
+Essent Sales Portfolio Management B.V., NL, 's-Hertogenbosch¹
+Ev Infra Norway AS, NO, Oslo²
+100.0
+100.0
+energis-Netzgesellschaft mbH, DE, Saarbrücken¹
+100.0
+100.0
+100.0
+100.0
+evd energieversorgung dormagen GmbH, DE, Dormagen
+49.0
+Energy Ventures GmbH, DE, Saarbrücken²
+100.0
+energy4u GmbH & Co. KG, DE, Siegburg
+49.0
+Enerjisa Enerji A.Ş., TR, Istanbul4
+40.0
+Enerjisa Üretim Santralleri A.Ş., TR, Istanbul4
+50.0
+Erdgasversorgung Industriepark Leipzig Nord GmbH, DE, Leipzig
+Erdgasversorgung Schwalmtal GmbH & Co. KG, DE, Viersen
+Erdgasversorgung Schwalmtal Verwaltungs-GmbH, DE, Viersen6
+e-regio GmbH & Co. KG, DE, Euskirchen5
+50.0
+EQUANS Energy Solutions B.V., NL, Bunnik²
+Energiegesellschaft Leimen GmbH & Co.KG, DE, Leimen²
+EnergieWonen B.V., NL, Almere¹
+Stake
+Energiegesellschaft Leimen Verwaltungsgesellschaft mbH, DE,
+74.9
+Leimen²
+Energieversorgung Bad Bentheim GmbH & Co. KG, DE, Bad Bentheim6
+Energieversorgung Bad Bentheim Verwaltungs-GmbH, DE, Bad
+Bentheim6
+25.1
+Energie-Wende-Garching GmbH & Co. KG, DE, Garching6
+Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching
+Energiewerke Isernhagen GmbH, DE, Isernhagen
+50.0
+50.0
+49.0
+25.1
+Energiewerke Osterburg GmbH, DE, Osterburg (Altmark)6
+49.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+Energiewerke Waldbröl GmbH, DE, Waldbröl²
+234
+Consolidated Financial Statements
+= Contents Q Search ← Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+E.ON Integrated Annual Report 2023
+49.0 Geotermisk Operatørselskab A/S, DK, Kirke Saby²
+Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn¹
+Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT, Braunau
+100.0
+HAzwei 2. Beteiligungsgesellschaft mbH, DE, Hanover²
+HAzwei 3. Beteiligungsgesellschaft mbH, DE, Hanover²
+HAzwei GmbH, DE, Hanover¹
+100.0
+Induboden GmbH, DE, Düsseldorf²
+100.0
+100.0
+Industriekraftwerk Greifswald GmbH, DE, Kassel
+49.0
+100.0
+Industry Development Services Limited, GB, Coventry2
+100.0
+Greinke Verwaltungs GmbH, DE, Hohenhameln²
+85.1
+greenXmoney.com GmbH i. L., DE, Neu-Ulm²
+gridX GmbH, DE, Aachen²
+GrønGas Partner A/S, DK, Hirtshals6
+HCL Netze GmbH & Co. KG, DE, Herzebrock-Clarholz6
+Heimatenergie Burgebrach GmbH, DE, Unterschleißheim²
+50.0 Heizkraftwerk Zwickau Süd GmbH & Co. KG, DE, Zwickau6
+25.1
+Inenergie Holding B.V., NL, Utrecht
+32.7
+100.0
+40.0
+InfraServ - Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz6
+Infrastrukturgesellschaft Nord GmbH, DE, Quickborn²
+50.0
+100.0
+Grüne Quartiere GmbH, DE, Gelsenkirchen6
+50.0
+Heizungs- und Sanitärbau WIJA GmbH, DE, Bad Neuenahr-Ahrweiler²
+100.0
+Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
+100.0
+50.0
+100.0
+Hary Installationstechnik GmbH, DE, Schiffweiler²
+Harzwasserwerke GmbH, DE, Hildesheim5
+100.0 HYPION GmbH, DE, Heide
+25.0
+20.8
+Green Solar Herzogenrath GmbH, DE, Herzogenrath
+45.0
+HaseNetz GmbH & Co. KG, DE, Gehrde
+25.1
+1-1 Beteiligungs GmbH, DE, Helmstedt6
+Idola Solkraft AB, SE, Norrköping²
+50.0
+100.0
+Green Urban Energy GmbH, DE, Berlin
+Greenplug GmbH, DE, Hamburg²
+Greenergetic GmbH i. L., DE, Bielefeld²
+50.0
+100.0
+50.0
+Havelstrom Zehdenick GmbH, DE, Zehdenick6
+49.0
+Improvers B.V., NL, Utrecht¹
+100.0
+HAW 1. Beteiligungsgesellschaft mbH, DE, Quickborn²
+HAzwei 1. Beteiligungsgesellschaft mbH, DE, Hanover¹
+100.0
+Improvers Community B.V., NL, Utrecht²
+100.0
+100.0
+Induboden GmbH & Co. Grundstücksgesellschaft oHG, DE, Essen²
+100.0
+Greenlab Skive Biogas ApS, DK, Frederiksberg
+greenited GmbH, DE, Hamburg6
+Green Sky Energy Limited, GB, Coventry¹
+100.0
+Nienburg/Weser
+100.0
+26.0
+innogy.C3 GmbH i. L., DE, Essen
+25.1
+100.0
+Installatietechniek Totaal B.V., NL, Leeuwarden¹
+100.0
+50.0
+25.6
+Intelligent Maintenance Systems Limited, GB, Milton Keynes
+IPP ESN Power Engineering GmbH, DE, Kiel²
+25.0
+51.0
+100.0
+innogy South East Europe s.r.o., SK, Bratislava²
+237
+Consolidated Financial Statements
+= Contents Q Search Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Stake
+Kranenburg
+E.ON Integrated Annual Report 2023
+49.9
+49.0
+100.0
+100.0
+Grüne Wärme Schönefeld GmbH, DE, Schönefeld²
+100.0
+Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co. oHG,
+DE, Neualbenreuth
+50.0
+innogy e-mobility US LLC, US, Dover (Delaware)¹
+100.0
+Grünkraft Energie GmbH, DE, Thalmassing6
+50.0
+GSH Green Steam Hürth GmbH, DE, Munich¹
+100.0
+56.6
+50.0
+85.1
+44.8
+innogy International Middle East LLC, AE, Dubai6
+Hennef (Sieg) Netz GmbH & Co. KG, DE, Hennef
+Hermann Stibbe Verwaltungs-GmbH, DE, Wunstorf²
+HGC Hamburg Gas Consult GmbH, DE, Hamburg²
+HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
+Gemeinsames europäisches Unternehmen, DE, Hamm
+Hof Promotion B.V., NL, Utrecht¹
+innogy Hungária Tanácsadó Kft. "v.a.", HU, Budapest²
+100.0
+GVG Rhein-Erft GmbH, DE, Hürth4, 10
+GVW GmbH, DE, Wunsiedel6
+GW EnergyTec GmbH & Co. KG, DE, Hohenhameln²
+Hams Hall Management Company Limited, GB, Coventry
+HanseGas GmbH, DE, Quickborn¹
+HanseWerk AG, DE, Quickborn 1,15
+100.0
+66.5
+Holsteiner Wasser GmbH, DE, Neumünster6
+Horisont Energi AS, NO, Sandnes6
+HSL Solar GmbH, DE, Wiesen²
+Iqony Windpark Ullersdorf GmbH & Co. KG, DE, Jamlitz
+20.8
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+49.0
+51.6
+49.2
+49.0
+100.0
+Gas- und Wasserwerke Bous - Schwalbach GmbH, DE, Bous5
+GASAG AG, DE, Berlin5
+49.0
+Gelsenberg Verwaltungs GmbH, DE, Düsseldorf²
+100.0
+GfB, Gesellschaft für Baudenkmalpflege mbH, DE, Idar-Oberstein
+GfS Gesellschaft für Simulatorschulung mbH i. L., DE, Essen
+Gichtgaskraftwerk Dillingen GmbH & Co. KG, DE, Dillingen
+GISA GmbH, DE, Halle (Saale)6
+20.0
+41.7
+25.2
+23.9
+36.9
+Gasgesellschaft Kerken Wachtendonk mbH, DE, Kerken
+49.0
+35.0 Gelsenberg GmbH & Co. KG, DE, Düsseldorf 1,8
+Gemeindewerke Bissendorf Netze GmbH & Co. KG, DE, Bissendorf6
+Gemeindewerke Bissendorf Netze Verwaltungs-GmbH, DE,
+Bissendorf6
+GKB Gesellschaft für Kraftwerksbeteiligungen mbH, DE, Cottbus²
+100.0
+49.0
+GkD Gesellschaft für kommunale Dienstleistungen mbH, DE, Cologne
+50.0
+GasLINE Telekommunikationsnetz-Geschäftsführungsgesellschaft
+deutscher Gasversorgungsunternehmen mbH, DE, Straelen
+GasLINE Telekommunikationsnetzgesellschaft deutscher
+Gasversorgungsunternehmen mbH & Co. KG, DE, Straelen5
+Gas-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg
+Gas-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf6
+20.0
+Gemeindewerke Everswinkel GmbH, DE, Everswinkel6
+45.0
+Globalis Industrial Services GmbH, DE, Heidelberg
+49.0
+20.0
+Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing
+49.0
+49.0
+49.0
+100.0
+Free Electrons LLC, US, Palo Alto²
+100.0
+Gasnetzgesellschaft Wörrstadt Verwaltung mbH, DE, Saulheim
+49.0
+20.0
+am Inn6
+Freiberger Stromversorgung GmbH (FSG), DE, Freiberg
+30.0
+Gasversorgung Bad Rodach GmbH, DE, Bad Rodach6
+50.0
+Gesellschaft für Energie und Klimaschutz Schleswig-Holstein GmbH,
+DE, Kiel6
+33.3
+FSO GmbH & Co. KG, DE, Oberhausen
+Gasversorgung Wismar Land GmbH, DE, Lübow6
+50.0
+50.0
+Get Energy Solutions Szolgáltató Kft., HU, Budapest²
+100.0
+FSO Verwaltungs-GmbH, DE, Oberhausen
+50.0
+95.0
+Gewerkschaft Hermann V Gesellschaft mit beschränkter Haftung, DE,
+Essen²
+66.7
+Fundacja E.ON w Polsce, PL, Warsaw²
+100.0
+Gasversorgung Unterfranken Gesellschaft mit beschränkter Haftung,
+DE, Würzburg5
+49.0
+Future Energy Ventures Management GmbH, DE, Essen 1,8
+G&L Gastro-Service GmbH, DE, Augsburg
+Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt6
+GREEN Gesellschaft für regionale und erneuerbare Energie mbH, DE,
+Stolberg/Rhld.6
+GNEE Gesellschaft zur Nutzung erneuerbarer Energien mbH Freisen,
+DE, Freisen6
+25.1
+Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG, DE,
+49.0
+100.0
+GREEN GECCO Beteiligungsgesellschaft mbH & Co. KG, DE, Troisdorf6
+20.7
+Emmerthal¹
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+236
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search Back
+→ Consolidated Statement of Income
+→ Consolidated Statement of Cash Flows
+100.0
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+GREEN GECCO Beteiligungsgesellschaft-Verwaltungs GmbH, DE,
+Troisdorf6
+20.7
+HanseWerk Natur GmbH, DE, Quickborn¹
+100.0
+Hub2Go GmbH, DE, Hamburg6
+Stake
+→ Consolidated Balance Sheets
+49.0
+49.9
+Gottburg Energie- und Wärmetechnik GmbH & Co. KG i. L., DE, Leck6
+Gottburg Verwaltungs GmbH i. L., DE, Leck6
+Green Eight d.o.o., HR, Zagreb²
+25.1
+Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing
+Gemeindewerke Namborn, Gesellschaft mit beschränkter Haftung,
+DE, Namborn
+49.0
+GNS Gesellschaft für Nuklear-Service mbH, DE, Essen
+48.0
+49.0
+GOLLIPP Bioerdgas GmbH & Co. KG, DE, Gollhofen
+50.0
+Gas-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+25.1
+Gemeindewerke Uetze GmbH, DE, Uetze6
+49.0
+GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen
+49.9
+50.0
+Gas-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE,
+25.1
+Gemeindewerke Wedemark GmbH, DE, Wedemark6
+49.0
+Bergheim
+Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen6
+49.0
+Gemeindewerke Wietze GmbH, DE, Wietze6
+49.0
+Gasnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann6
+Gas-Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE,
+Rheda-Wiedenbrück
+25.1
+Gemeinnützige Gesellschaft zur Förderung des E.ON Energy Research
+Center mbH, DE, Aachen6
+50.0
+Kerpen6
+25.1
+100.0
+Energieversorgung Kranenburg Netze Verwaltungs GmbH, DE,
+100.0
+100.0
+100.0
+E.ON Ruhrgas GPA GmbH, DE, Essen 1,8
+E.ON România S.A., RO, Târgu Mureş¹
+E.ON Rhein-Ruhr Werke GmbH, DE, Essen²
+100.0
+E.ON Real Estate GmbH, DE, Essen¹
+49.0
+ECO2 Solutions Group Limited, GB, Kidderminster4
+100.0
+100.0
+EBY Port 3 GmbH, DE, Regensburg¹
+E.ON UK Holding Company Limited, GB, Coventry¹
+E.ON UK Industrial Shipping Limited, GB, Coventry²
+E.ON UK Infrastructure Services Limited, GB, Coventry¹
+E.ON UK Pension Trustees Limited, GB, Coventry²
+100.0
+EBY Immobilien GmbH & Co KG, DE, Regensburg²
+100.0
+E.ON UK Energy Markets Limited, GB, Coventry¹
+E.ON UK Energy Services Limited, GB, Coventry²
+E.ON UK Heat Limited, GB, Coventry¹
+100.0
+E.ON RAG-Beteiligungsgesellschaft mbH, DE, Düsseldorf¹
+100.0
+E.ON Project Earth Limited, GB, Coventry¹
+100.0
+E.ON Produzione S.p.A., IT, Milan¹
+49.0
+EBERnetz GmbH & Co. KG, DE, Grafing b. Munich
+100.0
+100.0
+100.0
+100.0
+EFR GmbH, DE, Munich
+100.0
+E.ON UK PS Limited, GB, Coventry2
+100.0
+E.ON Service GmbH, DE, Essen²
+24.9
+EFG Erdgas Forchheim GmbH, DE, Forchheim
+100.0
+E.ON UK Property Services Limited, GB, Coventry²
+100.0
+E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf 1,8
+Economy Power Limited, GB, Coventry2
+100.0
+EEL Erneuerbare Energien Lausitz GmbH & Co. KG, DE, Cottbus
+EES Erneuerbare Energien Schnaudertal GmbH & Co. KG, DE,
+Meuselwitz²
+100.0
+E.ON UK plc, GB, Coventry¹
+100.0
+E.ON Ruhrgas Portfolio GmbH, DE, Essen 1,8
+100.0
+100.0
+100.0 EDRI Sweden AB, SE, Malmö²
+100.0
+EDRI Poland Sp. z o.o., PL, Warsaw²
+100.0
+50.0
+39.9
+E.ON UK EIS Holdings Limited, GB, Coventry²
+E.ON Produktion Danmark A/S, DK, Frederiksberg¹
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+232
+100.0
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+E.ON Polska Operations Sp. z o.o., PL, Warsaw¹
+E.ON Polska S.A., PL, Warsaw¹
+100.0
+E.ON Polska Development Sp. z o.o., PL, Warsaw²
+E.ON Polska IT Support Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+100.0
+100.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+E.ON Insurance Services GmbH, DE, Essen²
+E.ON International Finance B.V., NL, 's-Hertogenbosch¹
+E.ON Fastigheter Sverige AB, SE, Malmö¹
+E.ON Finanzanlagen GmbH, DE, Düsseldorf¹, 8
+E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin²
+E.ON Finanzholding SE & Co. KG, DE, Essen 1,8
+100.0
+E.ON Plin d.o.o., HR, Zagreb¹
+100.0
+100.0
+100.0
+100.0
+Name, Location
+Name, Location
+Coventry2
+100.0
+100.0
+E.ON UK CHP Limited, GB, Coventry¹
+100.0
+E.ON Power Plants Belgium BV, BE, Mechelen¹
+East Midlands Electricity Share Scheme Trustees Limited, GB,
+70.0
+E4A B.V., NL, Schaijk²
+100.0
+100.0
+Stake
+E3 Haustechnik GmbH, DE, Magdeburg²
+100.0
+E.ON-CAPNET S.R.L., IT, Milan²
+100.0
+E.ON Technical Service S.p.A., IT, Milan²
+E.ON TowerCo GmbH, DE, Markkleeberg²
+100.0 E.ON Ügyfélszolgálati Kft., HU, Budapest¹
+100.0
+100.0
+E.ON Portfolio Solutions GmbH, DE, Munich¹
+E.ON Polska Solutions Sp. z o.o., PL, Warsaw¹
+E.ON Portfolio Services GmbH, DE, Munich²
+Stake
+Name, Location
+Stake
+100.0
+E.ON Perspekt GmbH, DE, Düsseldorf²
+E.ON Slovensko, a.s., SK, Bratislava¹
+E.ON UK Steven's Croft Limited, GB, Coventry¹
+KAWAG Netze GmbH & Co. KG, DE, Abstatt
+96.6
+Latorca Sport Kft., HU, Budapest²
+25.0
+Kommunale Klimaschutzgesellschaft Landkreis Celle gemeinnützige
+GmbH, DE, Celle6
+49.0
+KAWAG Gas GmbH & Co. KG, DE, Pleidelsheim6
+100.0
+LANDWEHR Wassertechnik GmbH, DE, Schöppenstedt²
+49.0
+Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
+Eisenhüttenstadt
+49.0
+49.0
+Haftung, DE, Marpingen
+69.6
+LandE GmbH, DE, Wolfsburg¹
+49.0
+50.0
+Kavernengesellschaft Staßfurt mbH, DE, Staßfurt
+Kommunale Dienste Marpingen Gesellschaft mit beschränkter
+100.0
+100.0
+KWS Kommunal-Wasserversorgung Saar GmbH, DE, Saarbrücken²
+Kylel i Kristianstad AB, SE, Kristianstad²
+49.0
+KAWAG AG & Co. KG, DE, Pleidelsheim6
+KommEnergie GmbH, DE, Eichenau
+Kommunale Klimaschutzgesellschaft Landkreis Uelzen gemeinnützige
+GmbH, DE, Celle6
+LE Montáže, s.r.o., CZ, Zlín²
+100.0
+Konnektor B.V., NL, Utrecht²
+100.0
+Kemsley CHP Limited, GB, Coventry¹
+Steigerwald²
+100.0
+49.9
+Kommunalwerk Rudersberg Verwaltungs-GmbH, DE, Rudersberg
+49.0
+Kemkens Groep B.V., NL, Oss5
+Leitungs- und Kanalservice Bauer GmbH, DE, Schönbrunn i.
+25.0
+50.0
+49.9
+Kommunalwerk Rudersberg GmbH & Co. KG, DE, Rudersberg
+49.0
+KDT Kommunale Dienste Tholey GmbH, DE, Tholey
+89.9
+Lechwerke AG, DE, Augsburg¹
+49.0
+Kommunale Netzgesellschaft Steinheim a. d. Murr GmbH & Co. KG,
+DE, Steinheim an der Murr6
+49.0
+KAWAG Netze Verwaltungsgesellschaft mbH, DE, Abstatt
+51.0
+Leicon GmbH, DE, Neustadt a. Rbge.6
+100.0
+100.0
+100.0
+99.0
+100.0
+100.0
+100.0
+E.ON Solutions GmbH, DE, Essen¹
+E.ON Solarpark Gerdshagen GmbH & Co. KG, DE, Munich²
+100.0
+ElbEnergie GmbH, DE, Seevetal¹
+100.0
+E.ON US Holding GmbH, DE, Düsseldorf¹, 8
+100.0
+E.ON Solar GmbH, DE, Essen²
+51.0
+EIS Solar Mottola S.r.l., IT, Brindisi²
+E.ON Varme Danmark ApS, DK, Frederiksberg¹
+E.ON Vermögensverwaltungs GmbH, DE, Essen 1,8
+E.ON Verwaltungs AG Nr. 1, DE, Munich²
+E.ON Verwaltungs GmbH, DE, Essen 1,8
+100.0
+100.0
+E.ON Solar Energy Infrastructure Solutions Italy S.r.l., IT, Milan²
+100.0
+EG.D, a.s., CZ, Brno¹
+100.0
+E.ON UK Trustees Limited, GB, Coventry²
+100.0
+E.ON Software Development SRL, RO, Bucharest²
+51.0
+EG.D Montáže, s.r.o., CZ, České Budějovice²
+100.0
+E.ON US Corporation, US, Wilmington¹
+Karlskrona Kylservice AB, SE, Nättraby2
+Name, Location
+Isar Loisach Stromnetz GmbH & Co. KG, DE, Wolfratshausen
+Isoprofs B.V., NL, Meijel¹
+Komáromi Kogenerációs Erőmű Kft., HU, Budapest²
+50.0
+Kalmar Energi Holding AB, SE, Kalmar4
+100.0
+KWH Netz GmbH, DE, Haag i. OB²
+100.0
+Klima És Hűtéstechnológia Tervező, Szerelő És Kereskedelmi Kft., HU,
+Budapest¹
+40.0
+Kalmar Energi Försäljning AB, SE, Kalmar
+74.9
+KVK Kompetenzzentrum Verteilnetze und Konzessionen GmbH, DE,
+Cologne6
+Stake
+65.0
+100.0
+Jihočeská plynárenská, a.s., CZ, České Budějovice²
+100.0
+KTA Kältetechnischer Anlagenbau GmbH, DE, Garbsen²
+40.0
+KSP Kommunaler Service Püttlingen GmbH, DE, Püttlingen
+100.0
+65.0
+KlickEnergie GmbH & Co. KG, DE, Neuss6
+100.0
+klarsolar GmbH, DE, Heidelberg²
+49.0
+KlickEnergie Verwaltungs-GmbH, DE, Neuss6
+Leitungspartner GmbH, DE, Düren¹
+100.0
+E.ON Pensionsfonds Holding GmbH, DE, Essen²
+E.ON Dialog S.R.L., RO, Şelimbăr²
+100.0
+100.0
+E.ON Energiatároló Korlátolt Felelősségű Társaság, HU, Budapest¹
+100.0
+E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs¹
+100.0
+100.0
+E.ON Energiamegoldások Kft., HU, Budapest¹
+100.0
+E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs¹
+100.0
+100.0
+E.ON Energia S.p.A., IT, Milan¹
+100.0
+E.ON Danmark A/S, DK, Frederiksberg¹
+100.0
+100.0
+E.ON Energi Hold Co AB, SE, Malmö¹
+100.0
+100.0
+E.ON edis energia Sp. z o.o., PL, Warsaw¹
+100.0
+100.0
+100.0
+100.0
+E.ON Energiatermelő Kft., HU, Budapest¹
+100.0
+100.0
+99.9
+100.0
+E.ON Energie Deutschland GmbH, DE, Munich¹
+E.ON Energie Deutschland Holding GmbH, DE, Munich¹
+E.ON Energie Dialog GmbH, DE, Potsdam²
+100.0
+100.0
+E.ON Drive Austria GmbH, AT, Vienna²
+E.ON Drive ApS, DK, Frederiksberg²
+97.9
+100.0
+100.0
+E.ON Drive AB, SE, Malmö²
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON Energie 38. Beteiligungs-GmbH, DE, Munich 1, 8
+100.0
+E.ON Digital Technology Hungary Kft., HU, Budapest²
+E.ON Distribucija plina d.o.o., HR, Sveta Nedelja¹
+100.0
+100.0
+100.0
+E.ON Energidistribution AB, SE, Malmö¹
+100.0
+E.ON Digital Technology GmbH, DE, Hanover¹
+E.ON Energie AG, DE, Düsseldorf 1,8
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+100.0
+100.0
+E.ON Drive France SAS, FR, Levallois-Perret²
+100.0
+E.ON Beteiligungen GmbH, DE, Essen 1,8
+E.ON Beteiligungsholding GmbH, DE, Essen 1,8
+100.0 E.ON Bioerdgas GmbH, DE, Essen¹
+100.0
+100.0
+Stake
+Name, Location
+Stake
+Name, Location
+Stake
+100.0
+E.ON Bayern Verwaltungs AG, DE, Essen²
+e.distherm Energielösungen GmbH, DE, Potsdam¹
+e.disnatur21 Windpark GmbH & Co. KG, DE, Potsdam²
+e.disnatur Erneuerbare Energien GmbH, DE, Potsdam¹
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+= Contents Q Search ← Back
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+Consolidated Financial Statements
+E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry²
+E.ON 9. Verwaltungs GmbH, DE, Essen²
+E.ON 11. Verwaltungs GmbH, DE, Essen²
+E.ON 45. Verwaltungs GmbH, DE, Essen²
+E.ON 46. Verwaltungs GmbH, DE, Essen²
+E.ON 47. Verwaltungs GmbH, DE, Essen²
+E.ON 51. Verwaltungs GmbH, DE, Essen²
+E.ON 52. Verwaltungs GmbH, DE, Essen²
+E.ON 53. Verwaltungs GmbH, DE, Essen²
+E.ON 54. Verwaltungs GmbH, DE, Essen²
+E.ON 55. Verwaltungs GmbH, DE, Essen²
+E.ON 57. Verwaltungs GmbH, DE, Essen²
+E.ON 59. Verwaltungs GmbH, DE, Essen²
+E.ON 60. Verwaltungs GmbH, DE, Essen²
+E.ON 61. Verwaltungs GmbH, DE, Essen²
+E.ON 62. Verwaltungs GmbH, DE, Essen²
+E.ON 63. Verwaltungs GmbH, DE, Essen²
+E.ON Accounting Solutions GmbH, DE, Regensburg 1,8
+E.ON Asist Complet S.A., RO, Târgu Mureş²
+E.ON Drive Infrastructure Romania S.R.L, RO, Bucharest²
+E.ON Drive Infrastructure UK Limited, GB, Coventry2
+E.ON Drive Solutions UK Limited, GB, Coventry²
+E.ON Drive GmbH, DE, Essen¹
+100.0
+100.0
+100.0
+E.ON Business Solutions SAS, FR, Levallois-Perret²
+100.0 E.ON Česká republika, s.r.o., CZ, České Budějovice¹
+E.ON Connecting Energies Limited, GB, Coventry¹
+E.ON Control Solutions Limited, GB, Coventry¹
+E.ON Country Hub Germany GmbH, DE, Berlin 1,8
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+E.ON Drive Infrastructure Germany GmbH, DE, Essen²
+E.ON Drive Infrastructure GmbH, DE, Essen 1,8
+E.ON Drive Infrastructure Hungary Kft., HU, Budapest²
+E.ON Drive Infrastructure Italy S.r.l., IT, Milan²
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0
+100.0 E.ON Business Solutions Deutschland GmbH, DE, Essen¹
+100.0 E.ON Business Solutions GmbH, DE, Essen¹
+100.0
+100.0
+E.ON Drive Infrastructure Denmark ApS, DK, Søborg²
+100.0
+100.0
+E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca¹
+100.0 E.ON Business Services lași S.A., RO, Bucharest²
+100.0
+E.ON Drive Infrastructure CZ s.r.o., CZ, České Budějovice²
+E.ON Business Solutions S.r.l., IT, Milan¹
+100.0
+231
+Consolidated Financial Statements
+100.0
+E.ON Nordic AB, SE, Malmö¹
+100.0
+100.0
+E.ON Nord Sverige AB, SE, Malmö²
+100.0
+100.0
+E.ON Next Energy Limited, GB, Coventry¹
+100.0
+E.ON Grund&Boden Beteiligungs GmbH, DE, Essen¹
+E.ON Grund&Boden GmbH & Co. KG, DE, Essen 1,8
+100.0
+100.0
+100.0
+100.0
+E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen 1,8
+100.0
+100.0
+E.ON MyEnergy Kft., HU, Budapest¹
+100.0
+100.0 E.ON Gruga Geschäftsführungsgesellschaft mbH, DE, Düsseldorf1,8
+99.8
+E.ON Mälarkraft Värme AB, SE, Örebro¹
+100.0
+E.ON Group Innovation GmbH, DE, Essen²
+E.ON NA Capital Inc., US, Wilmington¹
+100.0
+E.ON Norge AS, NO, Stavanger²
+100.0
+100.0
+100.0
+E.ON Pensionsfonds AG, DE, Essen²
+100.0
+100.0
+E.ON One GmbH, DE, Essen²
+75.0
+100.0
+100.0
+E.ON Innovation Hub S.A., RO, Bucharest²
+100.0
+E.ON Innovation Co-Investments Inc., US, Wilmington¹
+100.0
+100.0
+100.0
+E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr¹
+E.ON impulse GmbH, DE, Essen 1,8
+100.0
+E.ON Energy Solutions, s.r.o., CZ, České Budějovice²
+E.ON Iberia Holding GmbH, DE, Düsseldorf¹, 8
+100.0
+E.ON Energy Solutions Limited, GB, Coventry¹
+E.ON Hungária Energetikai ZRt., HU, Budapest¹
+E.ON Hydrogen GmbH, DE, Essen 1,8
+100.0
+E.ON Energy Solutions GmbH, DE, Essen¹
+E.ON Inhouse Consulting GmbH, DE, Essen²
+E.ON Integrated Annual Report 2023
+100.0 E.ON Hrvatska d.o.o., HR, Zagreb¹
+100.0
+E.ON International Participations N.V., NL, 's-Hertogenbosch¹
+100.0
+E.ON Foton Sp. z o.o., PL, Warsaw¹
+68.2
+100.0
+E.ON International GmbH, DE, Essen²
+100.0
+E.ON First Future Energy Holding B.V., NL, 's-Hertogenbosch¹
+100.0
+Stake
+25.1
+100.0
+Stake
+Stake
+E.ON Energie România S.A., RO, Târgu Mureş¹
+E.ON Energie Österreich GmbH, AT, Vienna¹
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Name, Location
+100.0 E.ON Home AB, SE, Malmö²
+E.ON Energie, a.s., CZ, České Budějovice¹
+100.0
+E.ON Energy ECO Installations Limited, GB, Coventry¹
+E.ON Energy Gas (Eastern) Limited, GB, Coventry2
+E.ON Energy Gas (Northwest) Limited, GB, Coventry²
+E.ON Energy Infrastructure Solutions d.o.o., HR, Zagreb¹
+E.ON Energy Infrastructure Solutions d.o.o., SI, Ljubljana¹
+E.ON Energy Installation Services Limited, GB, Coventry¹
+E.ON Energy Markets GmbH, DE, Essen¹
+E.ON Energy Projects GmbH, DE, Munich¹
+100.0
+E.ON Kundsupport Sverige AB, SE, Malmö¹
+100.0
+E.ON Grid Solutions GmbH, DE, Hamburg¹
+100.0
+E.ON ENERGY COMMUNITIES & NETWORK SOLUTIONS, S.L., ES,
+Santa Cruz de Tenerife²
+99.9
+E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa¹
+100.0
+100.0
+E.ON Energiinfrastruktur AB, SE, Malmö¹
+E.ON Italia S.p.A., IT, Milan¹
+100.0
+E.ON IT UK Limited, GB, Coventry²
+100.0
+100.0
+E.ON Gashandel Sverige AB, SE, Malmö²
+100.0 E.ON Gastronomie GmbH, DE, Essen 1,8
+E.ON Gazdasági Szolgáltató Kft., HU, Győr¹
+100.0
+E.ON Energilösningar AB, SE, Malmö¹
+E.ON Energija d.o.o., HR, Zagreb¹
+100.0
+E.ON Israel Ltd., IL, Herzliya²
+100.0
+E.ON Gas Mobil GmbH, DE, Essen²
+100.0
+100.0
+Name, Location
+Konsortium Energieversorgung Opel beschränkt haftende oHG, DE,
+Karlstein 4,10
+NiersEnergieNetze Verwaltungs-GmbH, DE, Kevelaer
+51.0
+Oschatz Netz Verwaltungs GmbH, DE, Oschatz²
+100.0
+Netzgesellschaft S-1 GmbH, DE, Helmstedt²
+100.0
+NIS Norddeutsche Informations-Systeme Gesellschaft mbH, DE,
+Schwentinental²
+100.0
+Oskarshamn Energi AB, SE, Oskarshamn4
+50.0
+Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin6
+40.0
+NORD-direkt GmbH, DE, Neumünster²
+49.0
+100.0
+25.1
+Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Helmstedt²
+100.0
+NordNetz GmbH, DE, Quickborn¹
+100.0
+Otto Geiler GmbH Heizung Klima Sanitär, DE, Braunschweig²
+100.0
+Netzgesellschaft Südwestfalen mbH & Co. KG, DE, Netphen6
+49.0
+Npower Commercial Gas Limited, GB, Coventry¹
+100.0
+Pannon Watt Energetikai Megoldások Zrt., HU, Győr
+49.9
+Ostwestfalen Netz GmbH & Co. KG, DE, Bad Driburg6
+Netzgesellschaft Syke GmbH, DE, Syke
+22.3
+51.0
+NEW Tönisvorst GmbH, DE, Tönisvorst¹
+98.7
+Oberg Freiflächen PV Verwaltungs GmbH, DE, Gronau (Leine)6
+Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee
+ocean5 Business Software GmbH i. L., DE, Kiel
+50.0
+33.9
+50.2
+49.9
+NEW Viersen GmbH, DE, Viersen¹
+100.0
+100.0
+NEW Windenergie Verwaltung GmbH, DE, Mönchengladbach²
+100.0
+Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde
+Oer-Erkenschwick Netz GmbH & Co. KG, DE, Oer-Erkenschwick6
+Orcan Energy AG, DE, Munich
+49.0
+Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE, Rheda-
+Wiedenbrück
+49.0
+NEW Windpark Linnich GmbH & Co. KG, DE, Mönchengladbach²
+OIE Aktiengesellschaft, DE, Idar-Oberstein¹
+100.0
+Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
+Rheda-Wiedenbrück6
+49.0
+Netzgesellschaft Rietberg-Langenberg GmbH & Co. KG, DE, Rietberg6
+Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg
+25.1
+NEW Windpark Viersen GmbH & Co. KG, DE, Mönchengladbach²
+NiersEnergieNetze GmbH & Co. KG, DE, Kevelaer
+100.0
+000 E.ON Connecting Energies, RU, Moscow
+50.0
+49.0
+50.0
+49.0 Npower Gas Limited, GB, Coventry2
+PEEK GmbH, DE, Herrsching am Ammersee²
+PFALZWERKE AKTIENGESELLSCHAFT, DE, Ludwigshafen am Rhein5
+26.7
+100.0
+PIS Progress Sp. z o.o., PL, Piła²
+100.0
+NEW Niederrhein Energie und Wasser GmbH, DE, Mönchengladbach¹
+100.0
+100.0
+NEW Niederrhein Wasser GmbH, DE, Viersen¹
+Npower Yorkshire Supply Limited, GB, Coventry²
+NRF Neue Regionale Fortbildung GmbH, DE, Halle (Saale)2
+Oberg Freiflächen PV GmbH & Co.KG, DE, Gronau (Leine)6
+100.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+Placense Ltd., IL, Caesarea
+100.0
+22.7
+Plus Shipping Services Limited, GB, Swindon¹
+Portfolio EDL GmbH, DE, Helmstedt¹,8
+100.0
+240
+E.ON Integrated Annual Report 2023
+100.0
+ELE - GEW Photovoltaikgesellschaft mbH, DE, Gelsenkirchen
+ELE Verteilnetz GmbH, DE, Gelsenkirchen¹
+49.0
+100.0
+E.ON Stiftung gGmbH, DE, Essen²
+E.ON Sverige AB, SE, Malmö¹
+Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE, Grünwald
+Elektrizitätswerk Heinrich Schirmer GmbH, DE, Schauenstein6
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+100.0
+49.0
+100.0
+50.0
+100.0
+Npower Northern Supply Limited, GB, Coventry²
+Npower Yorkshire Limited, GB, Coventry²
+NEW Netz GmbH, DE, Geilenkirchen¹
+80.0
+Netzgesellschaft W-1 GmbH, DE, Helmstedt²
+100.0
+Npower Group Business Services Limited, GB, Coventry¹
+100.0
+PEG Infrastruktur AG, CH, Zug 13
+100.0
+Peiẞenberger Kraftwerksgesellschaft mit beschränkter Haftung, DE,
+Netzinfrastrukturgesellschaft Nordwest GmbH & Co. KG, DE, Heek
+33.3
+Npower Group Limited, GB, Coventry¹
+100.0
+100.0
+66.7
+100.0
+Peißenberg²
+100.0
+Npower Limited, GB, Coventry¹
+100.0
+Peißenberger Wärmegesellschaft mbH, DE, Peißenberg²
+100.0
+NEW AG, DE, Mönchengladbach 1,9
+42.5 Npower Northern Limited, GB, Coventry²
+100.0
+Peridot Beteiligungs GmbH & Co. KG, DE, Essen
+99.0
+NEW b_gas Eicken GmbH, DE, Schwalmtal²
+100.0
+New Cogen Sp. z o.o., PL, Szczecin²
+NetzweltFabrik GmbH, DE, Machern²
+49.0
+Stake
+Stake
+70.4
+100.0
+57.0
+Nahwärme Ascha GmbH, DE, Ascha²
+57.0
+Naturstrom Betriebsgesellschaft Oberhonnefeld mbH, DE, Koblenz6
+57.0
+Navirum Energi AB, SE, Malmö¹
+57.0
+Nebelhornbahn-Aktiengesellschaft, DE, Oberstdorf
+49.0
+Nederland Isoleert B.V., NL, Amersfoort¹
+46.6
+Nederland Verkoopt B.V., NL, Amersfoort¹
+100.0
+MWE Mecklenburgische Wärme- und Energiedienstleistungen GmbH,
+DE, Wismar
+Lillo Energy NV, BE, Brussels
+Local Energies, a.s., CZ, Zlín - Malenovice²
+LokalWerke GmbH, DE, Ahaus6
+Lößnitz Netz GmbH & Co. KG, DE, Lößnitz²
+Lößnitz Netz Verwaltungs GmbH, DE, Lößnitz²
+LSW Energie Verwaltungs-GmbH, DE, Wolfsburg
+LSW Holding GmbH & Co. KG, DE, Wolfsburg 5, 10
+LSW Holding Verwaltungs-GmbH, DE, Wolfsburg
+LSW Netz Verwaltungs-GmbH, DE, Wolfsburg
+Luna Lüneburg GmbH, DE, Lüneburg
+MAINGAU Energie GmbH, DE, Obertshausen5
+Mampaey Dordrecht Beheer B.V., NL, Dordrecht¹
+Mampaey Installatietechniek B.V., NL, Dordrecht¹
+Mampaey Service B.V., NL, Dordrecht2
+Manfred Müller GmbH, DE, Kördorf²
+MDE Service GmbH, DE, Gersthofen
+medl GmbH, DE, Mülheim an der Ruhr5
+Mehr Ampere GmbH, DE, Regensburg²
+Melle Netze GmbH & Co. KG, DE, Melle
+100.0 Nereon S.r.l., IT, Brindisi²
+100.0
+100.0
+24.9
+39.0
+100.0
+50.0
+Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin²
+Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven
+Netzdienste Oberursel (Taunus) GmbH & Co. KG, DE, Oberursel
+Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad Münder
+Netzgesellschaft Barsinghausen GmbH & Co. KG, DE, Barsinghausen
+Netzgesellschaft Bedburg Verwaltungs-GmbH, DE, Bedburg
+Netzgesellschaft Betzdorf GmbH & Co. KG, DE, Betzdorf6
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+Netzgesellschaft GmbH & Co. KG Bad Homburg v. d. Höhe, DE, Bad
+Homburg v. d. Höhe
+45.7
+Limfjordens Bioenergi ApS, DK, Frederiksberg
+100.0 Netzgesellschaft Grimma GmbH & Co. KG, DE, Grimma
+40.0 Netzgesellschaft Hemmingen mbH, DE, Hemmingen
+100.0 Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf6
+49.0 Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE, Giesen6
+100.0
+74.9
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+Stake
+Lighting for Staffordshire Holdings Limited, GB, Coventry¹
+60.0
+Lighting for Staffordshire Limited, GB, Coventry¹
+100.0
+Liikennevirta Oy, Fl, Helsinki
+25.0
+Murrhardt Netz AG & Co. KG, DE, Murrhardt6
+MITGAS Mitteldeutsche Gasversorgung GmbH, DE, Halle (Saale) 1
+Mitteldeutsche Netzgesellschaft Gas HD mbH, DE, Halle (Saale)2
+Mitteldeutsche Netzgesellschaft Gas mbH, DE, Halle (Saale)¹
+50.0 Mitteldeutsche Netzgesellschaft mbH, DE, Chemnitz²
+Netzgesellschaft Bühlertal GmbH & Co. KG, DE, Bühlertal
+49.9
+100.0
+Netzgesellschaft Elsdorf Verwaltungs-GmbH, DE, Elsdorf6
+49.0
+100.0
+Netzgesellschaft Gehrden mbH, DE, Gehrden6
+49.0
+50.0
+100.0
+Mitteldeutsche Netzgesellschaft Strom mbH, DE, Halle (Saale)¹
+Mittlere Donau Kraftwerke AG, DE, Landshut
+32.5
+Mosoni-Duna Menti Szélerőmű Kft., HU, Budapest²
+75.4
+Name, Location
+49.0
+50.0
+49.0
+Netzgesellschaft Lennestadt GmbH & Co. KG, DE, Lennestadt
+25.1
+49.0
+49.0
+49.0
+49.0
+Netzgesellschaft Leutenbach GmbH & Co. KG, DE, Leutenbach6
+Netzgesellschaft Leutenbach Verwaltungs-GmbH, DE, Leutenbach6
+Netzgesellschaft Maifeld GmbH & Co. KG, DE, Polch6
+Netzgesellschaft Maifeld Verwaltungs GmbH, DE, Polch
+49.9
+49.9
+49.0
+49.0
+239
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search Back
+49.9
+→ Consolidated Statement of Income
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Netzgesellschaft Marl mbH & Co. KG, DE, Marl6
+25.1
+NEW Re GmbH, DE, Mönchengladbach²
+Netzgesellschaft Neuenkirchen mbH & Co. KG, DE, Neuenkirchen6
+Netzgesellschaft Osnabrücker Land GmbH & Co. KG, DE, Bohmte4
+Netzgesellschaft Ottersweier GmbH & Co. KG, DE, Ottersweier
+Netzgesellschaft Panketal GmbH, DE, Panketal²
+49.0
+NEW Smart City GmbH, DE, Mönchengladbach²
+→ Consolidated Statement of Cash Flows
+49.0
+Netzgesellschaft Lauf GmbH & Co. KG, DE, Lauf6
+49.0
+49.0
+50.0
+Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE, Giesen
+49.0
+90.0
+Netzgesellschaft Hochtaunuskreis - Usinger Land - GmbH & Co. KG,
+DE, Usingen
+49.0
+Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE, Hohen
+25.0
+49.0
+Neuendorf6
+100.0
+Netzgesellschaft Horn-Bad Meinberg GmbH & Co. KG, DE, Horn-Bad
+Meinberg
+34.8
+49.0
+Netzgesellschaft Hüllhorst GmbH & Co. KG, DE, Hüllhorst
+49.0
+100.0
+Netzgesellschaft Kelkheim GmbH & Co. KG, DE, Kelkheim6
+49.0
+100.0
+Netzgesellschaft Korb GmbH & Co. KG, DE, Korb6
+49.9
+51.0
+Netzgesellschaft Korb Verwaltungs-GmbH, DE, Korb6
+49.9
+100.0
+Netzgesellschaft Kreisstadt Bergheim Verwaltungs-GmbH, DE,
+Bergheim6
+20.1
+233
+100.0
+Consolidated Financial Statements
+100.0
+100.0
+100.0
+LEW Anlagenverwaltung Gesellschaft mit beschränkter Haftung, DE,
+100.0
+Lemonbeat GmbH, DE, Dortmund²
+66.7
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich¹
+KEW Kommunale Energie- und Wasserversorgung
+Aktiengesellschaft, DE, Neunkirchen5
+Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg5
+Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg³
+Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg¹
+Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach¹
+KEVAG Telekom GmbH, DE, Koblenz6
+KEN GmbH, DE, Püttlingen²
+100.0
+KSG Kraftwerks-Simulator-Gesellschaft mbH i. L., DE, Essen6
+Kristianstads Kylservice AB, SE, Kristianstad²
+28.6
+Kraftwerk Wehrden Gesellschaft mit beschränkter Haftung, DE,
+Völklingen6
+50.0
+Kraftwerk Plattling GmbH, DE, Munich¹
+100.0
+66.7 Kraftwerk Osnabrück GmbH, DE, Munich²
+Kraftwerk Neuss GmbH, DE, Munich¹
+50.0
+Kraftwerk Marl GmbH, DE, Munich¹
+33.3
+Kraftwerk Hattorf GmbH, DE, Munich¹
+100.0
+80.0
+LEW Beteiligungsgesellschaft mbH, DE, Gundremmingen¹
+LEW Service & Consulting GmbH, DE, Augsburg¹
+100.0
+E.ON Integrated Annual Report 2023
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+100.0
+→ Consolidated Statement of Income
+= Contents Q Search Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+238
+89.8
+100.0
+Lichtverbund Straßenbeleuchtung GmbH, DE, Helmstedt²
+100.0
+Licht Groen B.V., NL, Amsterdam¹
+100.0
+100.0
+LEW Wasserkraft GmbH, DE, Augsburg¹
+33.3
+100.0
+LEW Verteilnetz GmbH, DE, Augsburg¹
+100.0
+100.0
+LEW TelNet GmbH, DE, Neusäß¹
+100.0
+41.7
+Energienetze Holzwickede GmbH, DE, Holzwickede6
+Gundremmingen¹
+→ Consolidated Statement of Cash Flows
+Energiemontagen Süd Verwaltungs GmbH, DE, Maisach6
+25.0
+Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
+beschränkter Haftung, DE, Halblech
+50.0
+Elektro-Klaus GmbH, DE, Waldbröl²
+100.0
+energienatur Gesellschaft für Erneuerbare Energien mbH, DE,
+Siegburg6
+44.0
+Energieversorgung Guben GmbH, DE, Guben5
+45.0
+25.0
+ELE-RAG Montan Immobilien Erneuerbare Energien GmbH, DE,
+Bottrop6
+100.0
+Energieversorgung Horstmar/Laer GmbH & Co. KG, DE, Horstmar
+49.0
+ELE-Scholven-Wind GmbH, DE, Gelsenkirchen6
+30.0
+Energienetze Berlin GmbH, DE, Berlin¹
+100.0
+Energieversorgung Hürth GmbH, DE, Hürth
+24.9
+Elmregia GmbH, DE, Schöningen
+Energienetze Bayern GmbH, DE, Regensburg¹
+49.0
+Elektroenergetické datové centrum, a.s., CZ, Prague
+Energieversorgung Beckum Verwaltungs-GmbH, DE, Beckum
+(Westf.)6
+→ Consolidated Statement of Income
+100.0
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+Stake
+Name, Location
+Stake
+34.0
+Name, Location
+Elektrizitätswerk Landsberg Gesellschaft mit beschränkter Haftung,
+DE, Landsberg am Lech²
+100.0
+energielösung GmbH, DE, Regensburg²
+100.0
+Energieversorgung Beckum GmbH & Co. KG, DE, Beckum (Westf.)6
+34.0
+Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf²
+100.0
+Energiemontagen Süd GmbH & Co. KG, DE, Maisach6
+25.0
+Stake
+Energienetze Großostheim GmbH & Co. KG, DE, Groẞostheim6
+50.0
+25.1
+25.1
+Kranenburg6
+ELMŰ Hálózati Elosztó Kft., HU, Budapest¹
+Energieversorgung Kranenburg Netze GmbH & Co. KG, DE,
+= Contents Q Search Back
+35.2
+19.5
+BEW Bergische Energie- und Wasser-Gesellschaft mit beschränkter Haftung, DE, Wipperfürth?
+Energieversorgung Limburg Gesellschaft mit beschränkter Haftung, DE, Limburg an der Lahn'
+ENNI Energie & Umwelt Niederrhein GmbH, DE, Moers
+100.0
+MI-FONDS F55, DE, Frankfurt am Main¹
+WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach
+WVW Wasser- und Energieversorgung Kreis St. Wendel Gesellschaft
+mit beschränkter Haftung, DE, St. Wendel
+51.0
+28.1
+50.0
+WWS Wasserwerk Saarwellingen GmbH, DE, Saarwellingen
+49.0
+100.0
+22.2
+5.3
+28.4
+WWW Wasserwerk Wadern GmbH, DE, Wadern
+Nord Stream AG, CH, Zug 7, 14
+100.0
+17.2
+79.6
+19.9
+infra fürth gmbh, DE, Fürth'
+100.0
+10.0
+20.3
+Herzo Werke GmbH, DE, Herzogenaurach
+100.0
+MI-FONDS G55, DE, Frankfurt am Main¹
+MI-FONDS J55, DE, Frankfurt am Main¹
+MI-FONDS K55, DE, Frankfurt am Main¹
+OB 2, DE, Düsseldorf¹
+5.1
+70.6
+18.1
+3.4
+19.9
+49.0
+77.8
+WINDPARK Mutzschen OHG, DE, Potsdam²
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Balance Sheets
+→ Notes
+Stake%
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Name, Location
+15.5
+→ Consolidated Statement of Cash Flows
+Name, Location
+Equity € in millions
+Earnings € in millions
+Consolidated investment funds
+Investments Pursuant to Section 313 (2) No. 5 HGB
+HANSEFONDS, DE, Düsseldorf¹
+100.0
+Stake %
+→ Consolidated Statement of Income
+MI-FONDS 178, DE, Frankfurt am Main¹
+= Contents Q Search ← Back
+Zagrebacke otpadne vode - upravljanje i pogon d.o.o., HR, Zagreb
+Zagrebacke otpadne vode d.o.o., HR, Zagreb4
+29.0
+48.5
+66.7
+100.0
+50.0
+35.0
+Západoslovenská energetika a.s. (ZSE), SK, Bratislava
+Zwickauer Energieversorgung GmbH, DE, Zwickau5
+Windpark Naundorf OHG, DE, Potsdam²
+Windpark Nohfelden-Eisen GmbH, DE, Nohfelden
+Windpark Oberthal GmbH, DE, Oberthal
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+49.0
+27.0
+247
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+100.0
+2,431.0
+100.0
+100.0
+70.0
+WHP Tiefbaugesellschaft mbH & Co. KG, DE, Mönchengladbach²
+100.0
+VSE-Stiftung Gemeinnützige Gesellschaft zur Förderung von Bildung,
+Erziehung, Kunst und Kultur mbH, DE, Saarbrücken²
+100.0
+weeenergie GmbH, DE, Dresden6
+75.0
+40.0
+50.0
+Wärmeversorgung Limburg GmbH, DE, Limburg an der Lahn
+50.0
+Wärmeversorgung Mücheln GmbH, DE, Mücheln (Geiseltal)6
+49.0
+Weissmainkraftwerk Röhrenhof Aktiengesellschaft, DE, Bad Berneck²
+WEK Windenergie Kolkwitz GmbH & Co. KG, DE, Kolkwitz²
+Welver Netz GmbH & Co. KG, DE, Welver6
+Wärmeschmiede GmbH, DE, Hanover6
+WGK Windenergie Großkorbetha GmbH & Co. KG, DE, Lützen²
+100.0
+50.2
+Wasserzweckverband der Gemeinde Nalbach, DE, Nalbach6
+49.0
+100.0
+WB Wärme Berlin GmbH, DE, Schönefeld
+51.0
+VSE Aktiengesellschaft, DE, Saarbrücken¹, 15
+VSE NET GmbH, DE, Saarbrücken¹
+51.4
+100.0
+VSE Verteilnetz GmbH, DE, Saarbrücken¹
+100.0
+WEA Jülich Broich GmbH & Co. KG, DE, Mönchengladbach²
+WEA Jülich Broich Verwaltungs GmbH, DE, Mönchengladbach²
+WEA Schönerlinde GbR mbH Kiepsch & Bosse & Beteiligungsges.
+e.disnatur mbH, DE, Berlin²
+100.0
+Westnetz Kommunikationsleitungen GmbH & Co. KG, DE, Essen¹
+WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter¹
+WEVG Verwaltungs GmbH, DE, Salzgitter²
+100.0
+50.2
+93.5
+100.0
+WHP Verwaltungs GmbH, DE, Mönchengladbach²
+wind2move GmbH & Co. KG, DE, Geilenkirchen
+Windeck Energie GmbH, DE, Windeck
+100.0
+Windenergie Osterburg Verwaltungs GmbH, DE, Osterburg (Altmark)6
+Windenergie Schermbeck-Rüste GmbH & Co.KG, DE, Schermbeck6
+Windenergiepark Heidenrod GmbH, DE, Heidenrod
+WINDENERGIEPARK WESTKÜSTE GmbH, DE, Kaiser-Wilhelm-Koog²
+Windkraft Hochheim GmbH & Co. KG, DE, Lützen²
+Windkraft Jerichow-Mangelsdorf I GmbH & Co. KG, DE, Burg
+Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam²
+Windpark Büschdorf GmbH, DE, Perl²
+Stake
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg
+-6.2
+80.3
+17.8
+PSI Software SE, DE, Berlin'
+49.0
+-499.5
+20.3
+49.0
+35.0
+49.9
+49.0
+Windenergie Briesensee GmbH, DE, Neu Zauche6
+31.5
+Wärmeversorgung Schenefeld GmbH, DE, Schenefeld 6
+40.0
+Wendelsteinbahn Gesellschaft mit beschränkter Haftung, DE,
+Brannenburg am Inn²
+51.0
+Windenergie Frehne GmbH & Co. KG, DE, Lützen6
+100.0
+100.0
+Windpark Verwaltungsgesellschaft mbH, DE, Lützen²
+80.0 Windpark Wadern-Felsenberg GmbH, DE, Wadern²
+45.0
+42.0
+Windpark Paffendorf GmbH & Co. KG, DE, Bergheim
+Windpark Perl GmbH, DE, Perl6
+49.9
+50.0
+100.0
+To the best of our knowledge, we declare that, in accordance with applicable financial reporting principles, the Annual Financial
+Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, and the Management
+Report of the Company, which is combined with the Group Management Report, provides a fair review of the development and
+performance of the business and the position of the Company, together with a description of the principal opportunities and risks
+associated with the expected development of the Company.
+Declaration of the Board of Management
+→ SDG Index → SASB Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ TCFD
+→ Independent Auditor's Report
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+249
+= Contents Q Search ← Back
+285
+Global Reporting Initiative ("GRI") Index
+272
+EU Taxonomy
+267
+ESG Figures
+266
+Essen, Germany, March 4, 2024
+The Management Board
+вы
+Kanis
+50.1
+100.0
+50.0
+100.0
+Windenergie Frehne Management GmbH, DE, Lützen²
+100.0
+Wendelsteinbahn Verteilnetz GmbH, DE, Brannenburg am Inn²
+werkkraft GmbH, DE, Munich6
+49.0
+Wärmeversorgung Wachau GmbH, DE, Markkleeberg OT Wachau
+Wärmeversorgung Würselen GmbH, DE, Stolberg/Rhld.²
+Wärmeversorgungsgesellschaft Königs Wusterhausen mbH, DE,
+Königs Wusterhausen²
+100.0
+("TCFD")
+Wärmeversorgung Schwaben GmbH, DE, Augsburg²
+E.ON Integrated Annual Report 2023
+250
+= Contents Q Search ← Back
+Spieker
+Ossadnik
+ساترا
+Lammers
+König
+Стасс
+Birnbaum
+41.0
+Task Force on Climate-related Financial Disclosures
+264
+Summary of Financial Highlights
+17.5
+18.7
+20.5
+10.0
+15.8
+19.9
+88.3
+17.5
+22.1
+19.9
+-16.8
+31.5
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15) Taking into account own shares.
+57.3
+-10.8
+SWT Stadtwerke Trier Versorgungs-GmbH, DE, Trier
+Thermondo GmbH, DE, Berlin?
+Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing
+Stadtwerke Wertheim GmbH, DE, Wertheim?
+Stadtwerke Neuss Energie und Wasser GmbH, DE, Neuss
+Stadtwerke Hof Energie+Wasser GmbH, DE, Hof
+Stadtwerke Detmold GmbH, DE, Detmold?
+6.5
+30.1
+10.0
+12.5
+49.0
+248
+other information
+VSE - Windpark Merchingen Verwaltungs GmbH, DE, Saarbrücken²
+VSE Agentur GmbH, DE, Saarbrücken²
+263
+Directorships)
+Management Board (and Information on Other
+260
+Directorships)
+Supervisory Board (and Information on Other
+299
+Financial Calendar and Imprint
+260
+E.ON Integrated Annual Report 2023
+Boards
+257
+Independent Assurance Practitioner's Report
+292
+Sustainable Development Goals ("SDG")-Index
+251
+Independent auditor's report
+291
+Non-Financial Statement ("NFS") Index
+250
+Declaration of the Board of Management
+Sustainable Accounting Standards Board ("SASB") Index 293
+WVL Wasserversorgung Losheim GmbH, DE, Losheim am See
+Werne Netz GmbH & Co. KG, DE, Werne
+Westconnect GmbH, DE, Essen
+Westenergie AG, DE, Essen¹
+Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine)
+Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine)6
+100.0
+Rensol S.r.l., IT, Sassari²
+Projecta 14 GmbH, DE, Saarbrücken5
+100.0
+SafeRadon GmbH, DE, Munich²
+30.0
+Renergie Stadt Wittlich GmbH, DE, Wittlich
+100.0
+Preussen Elektra GmbH, DE, Hanover¹
+mit beschränkter Haftung, DE, Neuss
+53.8
+S.C. Salgaz S.A., RO, Salonta²
+100.0
+REN 181 S.r.l., IT, Milan²
+50.0
+PRENU Projektgesellschaft für Rationelle Energienutzung in Neuss
+79.8
+RWW Rheinisch-Westfälische Wasserwerksgesellschaft mbH, DE,
+Mülheim an der Ruhr¹
+33.3
+Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen
+50.0
+Safetec GmbH, DE, Heidelberg2
+100.0
+Propan Rheingas GmbH & Co Kommanditgesellschaft, DE, Brühl
+32.6
+25.1
+WVG Netz Holding GmbH, DE, Warstein
+55.1
+Windpark Eschweiler Beteiligungs GmbH, DE, Stolberg/Rhld.6
+Windpark Hof Tatschow GmbH & Co. KG, DE, Potsdam²
+Windpark Jüchen & NEW GmbH & Co. KG, DE, Jüchen²
+Windpark Jüchen & NEW Verwaltung GmbH, DE, Jüchen²
+Windpark Losheim-Britten GmbH, DE, Losheim am See6
+Windpark Lützen GmbH & Co. KG, DE, Lützen²
+Windpark Mallnow GmbH & Co. KG, DE, Potsdam²
+25.1
+WVG - Warsteiner Verbundgesellschaft mbH, DE, Warstein6
+51.0
+100.0
+45.0
+100.0
+prego services GmbH, DE, Saarbrücken
+WKH Windkraft Hochheim Management GmbH, DE, Lützen²
+WLN Wasserlabor Niederrhein GmbH, DE, Mönchengladbach6
+WPB Windpark Börnicke GmbH & Co. KG, DE, Lützen²
+25.1
+100.0
+100.0
+rEVUlution GmbH, DE, Essen²
+30.0
+Propan Rheingas GmbH, DE, Brühl6
+100.0
+Safetec-Swiss GmbH, CH, Würenlingen²
+100.0
+Reservekraft AS, NO, Lillestrøm²
+83.3
+49.0
+RWE Windpark Garzweiler GmbH & Co. KG, DE, Essen
+50.0
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+← Back
+= Contents Q Search
+Consolidated Financial Statements
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Consolidated Financial Statements
+→ Notes
+E.ON Integrated Annual Report 2023
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+49.0
+Wasser- und Abwassergesellschaft Vienenburg mbH, DE, Goslar
+Windenergie Osterburg GmbH & Co. KG, DE, Osterburg (Altmark)6
+100.0
+20.0
+Windenergie Merzig GmbH, DE, Merzig
+50.0
+24.9
+26.2
+246
+49.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+Stake
+RegioNetz München Verwaltungs GmbH, DE, Garching
+100.0
+Powerhouse B.V., NL, Amsterdam¹
+25.1
+Rüthen Gasnetz GmbH & Co. KG, DE, Rüthen6
+50.0
+RegioNetz München GmbH & Co. KG, DE, Garching
+100.0
+30.1
+100.0
+Name, Location
+RL Beteiligungsverwaltung beschr. haft. OHG, DE, Essen 1,8
+RURENERGIE GmbH, DE, Düren6
+33.3
+Regionale Energiewende Beteiligung Freyung-GmbH, DE, Freyung
+Regionetz GmbH, DE, Aachen 1,9
+100.0
+Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg¹
+Powergen UK Investments, GB, Coventry²
+100.0
+Powergen Limited, GB, Coventry²
+Stake
+Name, Location
+Stake
+Name, Location
+49.2
+100.0
+100.0
+49.0
+Stake
+49.0
+25.0
+Stadtwerke Langenfeld GmbH, DE, Langenfeld
+49.0
+Stadtwerke Burgdorf GmbH, DE, Burgdorf
+Stadtwerke Kirn GmbH, DE, Kirn/Nahe
+41.0
+Stadtwerke Bogen GmbH, DE, Bogen
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search Back
+Name, Location
+Consolidated Financial Statements
+Stake
+49.0
+49.0
+Stadtwerke Lohmar Verwaltungs-GmbH, DE, Lohmar
+50.0
+Stadtwerke Dülmen Dienstleistungs- und Beteiligungs-GmbH & Co.
+KG, DE, Dülmen4
+27.5
+Stadtwerke Schwarzenberg GmbH, DE, Schwarzenberg/Erzgeb.6
+49.0
+Stadtwerke Lohmar GmbH & Co. KG, DE, Lohmar
+49.0
+Stadtwerke Dillingen/Saar GmbH, DE, Dillingen
+45.0
+Stadtwerke Sankt Augustin GmbH, DE, Sankt Augustin6
+40.0
+Stadtwerke Lingen GmbH, DE, Lingen (Ems)4
+25.1
+Stadtwerke Castrop-Rauxel Stromnetz GmbH & Co. KG, DE, Castrop-
+Rauxel6
+49.0
+Stadtwerke Roẞlau Fernwärme GmbH, DE, Dessau-Roßlau
+Stadtwerke Saarlouis GmbH, DE, Saarlouis5
+Stadtwerke Schwedt GmbH, DE, Schwedt/Oder6
+E.ON Integrated Annual Report 2023
+30.0
+35.0 Stadtwerke Barth GmbH, DE, Barth6
+36.0
+Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt
+100.0
+SPG Solarpark Guben GmbH & Co. KG, DE, Lützen²
+SPIE Energy Solutions Harburg GmbH, DE, Hamburg
+SPIE HanseGas GmbH, DE, Ratingen6
+25.1
+SEG Solarenergie Guben GmbH & Co. KG, DE, Guben6
+89.7
+100.0
+24.5
+Stadtwerke Aue - Bad Schlema GmbH, DE, Aue-Bad Schlema
+100.0
+35.0
+Stadtwerke Aschersleben GmbH, DE, Aschersleben
+50.0
+49.0
+Stadtwerke-Strom Plauen GmbH & Co. KG, DE, Plauen6
+49.0
+242
+24.9
+100.0
+40.0
+Stadtwerke Bitterfeld-Wolfen GmbH, DE, Bitterfeld-Wolfen
+Stadtwerke Blankenburg GmbH, DE, Blankenburg
+37.5
+100.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+St. Clements Services Limited, GB, London
+Stadtentfalter Erkrath GmbH, DE, Sarstedt²
+50.0
+100.0
+SEN Solarenergie Nienburg GmbH & Co. KG, DE, Lützen²
+SERVICE plus GmbH, DE, Neumünster²
+45.0
+Stadtwerke Bernburg GmbH, DE, Bernburg (Saale)5
+49.5
+49.0
+24.9
+Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth5
+Stadtwerke Bergen GmbH, DE, Bergen
+49.5
+SSW - Stadtwerke St. Wendel GmbH & Co KG., DE, St. Wendel5
+SSW Stadtwerke St. Wendel Geschäftsführungsgesellschaft mbH,
+DE, St. Wendel6
+25.1
+Selm Netz GmbH & Co. KG, DE, Selm
+SEG Solarenergie Guben Management GmbH, DE, Lützen²
+50.0
+37.8
+50.0
+24.5
+49.0 Stadtwerke Weißenfels GmbH, DE, Weißenfels
+20.0
+25.1
+Stadtwerke Waltrop Netz GmbH & Co. KG, DE, Waltrop
+49.0 Stadtwerke Weilburg GmbH, DE, Weilburg
+49.0 Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching6
+25.1 Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE, Olching
+24.5 Stadtwerke Parchim GmbH, DE, Parchim
+Stadtwerke GmbH Bad Kreuznach, DE, Bad Kreuznach5
+Stadtwerke Gescher GmbH, DE, Gescher6
+Stadtwerke Geldern GmbH, DE, Geldern
+33.3
+24.9 Stadtwerke Oberkirch GmbH, DE, Oberkirch
+Stadtwerke Geesthacht GmbH, DE, Geesthacht6
+49.0
+Stadtwerke Wadern GmbH, DE, Wadern
+49.9
+Stadtwerke Nordfriesland GmbH, DE, Niebüll6
+24.9
+25.2
+Stadtwerke Garbsen GmbH, DE, Garbsen
+Stadtwerke Goch Netze GmbH & Co. KG, DE, Goch
+Stadtwerke Goch Netze Verwaltungsgesellschaft mbH, DE, Goch
+Stadtwerke Haan GmbH, DE, Haan6
+Stadtwerke Premnitz GmbH, DE, Premnitz6
+Stadtwerke Kamp-Lintfort GmbH, DE, Kamp-Lintfort5
+49.4
+26.0
+22.7
+6
+Stadtwerke Wittenberge GmbH, DE, Wittenberge
+Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel6
+Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt
+49.0
+24.8
+Stadtwerke Pulheim GmbH, DE, Pulheim6
+Stadtwerke Ratingen GmbH, DE, Ratingen
+49.9
+Stadtwerke Husum GmbH, DE, Husum
+25.1
+49.0
+Stadtwerke Pritzwalk GmbH, DE, Pritzwalk
+25.1
+49.0
+25.1
+Stadtwerke Wesel Strom-Netzgesellschaft mbH & Co. KG, DE, Wesel
+35.0 Stadtwerke Wismar GmbH, DE, Wismar5
+25.1
+Stadtwerke Dülmen Verwaltungs-GmbH, DE, Dülmen
+24.9
+51.0
+Ebermannstadt6
+49.0
+Stadtwerke Tornesch GmbH, DE, Tornesch6
+24.5
+Stadtwerke Meerane GmbH, DE, Meerane6
+25.0
+Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
+33.0
+Stadtwerke Steinfurt GmbH, DE, Steinfurt6
+29.0
+Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde
+Westnetz Immobilien GmbH & Co. KG, DE, Essen 1,8
+Stadtwerke Düren GmbH, DE, Düren 1,9
+49.0
+Stadtwerke Siegburg GmbH & Co. KG, DE, Siegburg6
+25.0
+Stadtwerke Lübz GmbH, DE, Lübz6
+Stadtwerke Eggenfelden GmbH, DE, Eggenfelden
+Stadtwerke Vlotho GmbH, DE, Vlotho
+49.0
+40.0
+Stadtwerke Neuss Energie und Wasser Beteiligungs-GmbH, DE,
+Neuss 7,10
+39.0
+Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder)5
+41.0
+Stadtwerke Vilshofen GmbH, DE, Vilshofen6
+24.9
+Stadtwerke Neunburg vorm Wald Strom GmbH, DE, Neunburg vorm
+Wald6
+29.0
+Stadtwerke Essen Aktiengesellschaft, DE, Essen 5
+24.0
+Stadtwerke Unna GmbH, DE, Unna
+49.9
+Stadtwerke Merzig Gesellschaft mit beschränkter Haftung, DE,
+Merzig5
+24.9
+Stadtwerke Emmerich GmbH, DE, Emmerich am Rhein
+40.0
+Stadtwerke Troisdorf GmbH, DE, Troisdorf6
+Stadtwerke Merseburg GmbH, DE, Merseburg
+25.1
+49.0
+49.0
+RIWA GmbH, DE, Kempten (Allgäu)6
+50.0
+REGAS GmbH & Co KG, DE, Regensburg6
+100.0
+SEC Chojnice Sp. z o.o, PL, Szczecin²
+50.0
+rheNEO GmbH, DE, Schwarzenbach am Wald6
+20.0
+Refarmed ApS, DK, Copenhagen
+100.0
+SEC C Sp. z o.o., PL, Szczecin²
+100.0
+RHENAGBAU Gesellschaft mit beschränkter Haftung, DE, Cologne²
+49.0
+100.0
+SEC B Sp. z o.o., PL, Szczecin²
+45.6
+20.0
+rhenag Rheinische Energie Aktiengesellschaft, DE, Cologne 1,9
+SEC D Sp. z o.o., PL, Szczecin²
+REGAS Verwaltungs-GmbH, DE, Regensburg6
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+100.0
+SEC Energia Sp. z o.o., PL, Szczecin²
+SEC F Sp. z o.o., PL, Szczecin²
+100.0
+RL Besitzgesellschaft mbH, DE, Essen¹
+50.0
+RegioBoden GmbH, DE, Aachen6
+20.0
+R-KOM Regensburger Telekommunikationsverwaltungsgesellschaft
+mbH, DE, Regensburg
+35.5
+REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG, DE,
+Regensburg6
+100.0
+SEC E Sp. z o.o., PL, Szczecin²
+20.0
+R-KOM Regensburger Telekommunikationsgesellschaft mbH & Co.
+KG, DE, Regensburg
+50.0
+100.0
+241
+49.9
+100.0
+51.0
+Rain Biomasse Wärmegesellschaft mbH, DE, Rain
+Scharbeutz²
+51.0
+24.9
+Rhegio Dienstleistungen GmbH, DE, Rhede
+100.0
+Qualitas-AMS GmbH, DE, Siegen²
+Scharbeutzer Energie- und Netzgesellschaft mbH & Co. KG, DE,
+49.0
+Sandersdorf-Brehna Netz GmbH & Co. KG, DE, Sandersdorf-Brehna6
+35.5
+REWAG REGENSBURGER ENERGIE- UND WASSERVERSORGUNG
+AG & CO KG, DE, Regensburg
+100.0
+PS Energy UK Limited, GB, Coventry²
+50.0
+SALVA Lüneburg GmbH, DE, Lüneburg
+Rhein-Ahr-Energie Netz GmbH & Co. KG, DE, Grafschaft6
+Recklinghausen Netzgesellschaft mbH, DE, Recklinghausen
+Recklinghausen Netz-Verwaltungsgesellschaft mbH, DE,
+Recklinghausen
+25.1
+75.0
+SEC A Sp. z o.o., PL, Szczecin²
+100.0
+Rhein-Sieg Netz GmbH, DE, Siegburg¹
+100.0
+RDE Verwaltungs-GmbH, DE, Veitshöchheim²
+100.0
+SEAGRASS LIMITED, AE, Abu Dhabi²
+22.5
+Rhein-Main-Donau GmbH, DE, Landshut5
+100.0
+RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
+Veitshöchheim²
+69.1
+Schleswig-Holstein Netz AG, DE, Quickborn¹
+24.2
+RheinEnergie AG, DE, Cologne5
+77.4
+Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
+Ruhpolding²
+Schlau Therm GmbH, DE, Saarbrücken²
+E.ON Integrated Annual Report 2023
+Consolidated Financial Statements
+= Contents Q Search ← Back
+24.9
+26.7
+Städtische Werke Magdeburg Verwaltungs-GmbH, DE, Magdeburg
+Städtisches Wasserwerk Eschweiler GmbH, DE, Eschweiler
+Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE, Neustadt a. Rbge.6
+Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE, Neustadt a.
+Rbge.6
+100.0
+Solar Energy Group S.p.A., IT, San Daniele del Friuli¹
+100.0
+SEC NewGrid Sp. z o.o., PL, Szczecin²
+100.0
+Solar Concept B.V., NL, Schaijk²
+100.0
+SEC N Sp. z o.o., PL, Szczecin²
+21.0
+100.0
+Smart Energy for Industry GmbH, DE, Munich²
+100.0
+SEC M Sp. z o.o., PL, Szczecin²
+ŠKO-ENERGO, s.r.o., CZ, Mladá Boleslav6
+100.0
+24.9
+26.7
+24.9
+100.0
+Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen
+Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen6
+Stadtwerk Verl Netz GmbH & Co. KG, DE, Verl
+50.0
+49.0
+100.0
+Solar Supply Sweden AB, SE, Karlshamn²
+Solarpark Schönteichen GmbH & Co. KG, DE, Ellzee6
+SolarProjekt Mainaschaff GmbH, DE, Mainaschaff6
+Sønderjysk Biogas Bevtoft A/S, DK, Vojens
+Sønderjysk Biogas Løgumkloster ApS, DK, Bevtoft
+Sora Comfort B.V., NL, Schaijk²
+100.0
+100.0
+100.0
+SEC Zgorzelec Sp. z o.o., PL, Zgorzelec²
+SEC Serwis Sp. z o.o., PL, Szczecin²
+SEC S Sp. z o.o., PL, Szczecin²
+SEC Region Sp. z o.o., PL, Szczecin²
+SEC R Sp. z o.o., PL, Szczecin²
+100.0
+SEC P Sp. z o.o., PL, Szczecin²
+100.0
+SEC Obrót Sp. z o.o., PL, Szczecin²
+SEC O Sp. z o.o., PL, Szczecin²
+Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg5
+100.0
+Skandinaviska Kraft AB, SE, Halmstad²
+100.0
+SEC H Sp. z o.o., PL, Szczecin²
+SECI Sp. z o.o., PL, Szczecin²
+SEC J Sp. z o.o., PL, Szczecin²
+SEC K Sp. z o.o., PL, Szczecin²
+SEC L Sp. z o.o., PL, Szczecin²
+SEC GEO Sp. z o.o., PL, Szczecin²
+100.0
+SERVICE plus Recycling GmbH, DE, Neumünster²
+100.0
+Stake
+Name, Location
+Stake
+SEC G Sp. z o.o., PL, Szczecin²
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+100.0
+SEW Solarenergie Weißenfels GmbH & Co. KG, DE, Lützen²
+Shamrock Energie GmbH, DE, Herne6
+100.0
+Name, Location
+100.0
+36.8
+Städtische Werke Borna GmbH, DE, Borna6
+24.9
+Siegener Versorgungsbetriebe GmbH, DE, Siegen
+100.0
+29.0
+Städtische Betriebswerke Luckenwalde GmbH, DE, Luckenwalde
+49.0
+50.0
+100.0
+100.0
+Stadtentfalter Quartiere GmbH, DE, Sarstedt²
+40.0
+100.0
+100.0
+Stake
+Stadtentfalter GmbH, DE, Mönchengladbach²
+Stadtentfalter Holding GmbH, DE, Sarstedt²
+SHW/RWE Umwelt Aqua Vodogradnja d.o.o., HR, Zagreb
+Stadtwerke Reichenbach/Vogtland GmbH, DE, Reichenbach im
+Vogtland6
+49.9
+25.1
+50.1
+49.0
+Versorgungsbetrieb Waldbüttelbrunn GmbH, DE, Waldbüttelbrunn6
+33.3
+Trinkwasserverbund Niederrhein TWN GmbH, DE, Grevenbroich
+67.0
+50.0
+VEM Neue Energie Muldental GmbH & Co. KG, DE, Markkleeberg6
+50.0
+Trekvliet Energie B.V., NL, 's-Hertogenbosch
+100.0
+100.0
+Vandebron Energie B.V., NL, Amsterdam¹
+25.1
+50.0
+Urban Energy Solutions GmbH, DE, Cologne
+100.0
+SVO Tiemann electric GmbH, DE, Celle²
+TOMTING 2010 d.o.o., HR, Zagreb²
+100.0
+33.3
+TWM Technische Werke der Gemeinde Merchweiler Gesellschaft mit
+35.0
+Verteilnetze Energie Weißenhorn GmbH & Co.KG, DE, Weißenhorn
+49.9
+24.5
+Verteilnetz Plauen GmbH, DE, Plauen¹
+49.0
+TWE Technische Werke der Gemeinde Ensdorf GmbH, DE, Ensdorf6
+TWL Technische Werke der Gemeinde Losheim GmbH, DE, Losheim
+am See6
+33.4
+SWG Glasfaser Netz GmbH, DE, Geesthacht
+100.0
+SVO Vertrieb GmbH, DE, Celle¹
+100.0
+Versorgungskasse Energie (VVaG) i. L., DE, Hanover²
+33.3
+49.0
+Versorgungsbetriebe Helgoland GmbH, DE, Helgoland6
+Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling
+Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling
+SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg6
+50.0
+25.1 TraveNetz GmbH, DE, Lübeck5
+URANIT GmbH, DE, Jülich4
+40.0
+Untere Iller GmbH, DE, Landshut
+50.0
+TCA Sustainable Energy Solutions GmbH, DE, Unterschleißheim
+Technisch Bureau Mampaey-van Alphen B.V., NL, Haarlem²
+77.6
+Süwag Energie AG, DE, Frankfurt am Main¹
+100.0
+Sustainable Energy Aschaffenburg GmbH, DE, Munich¹
+34.0
+Union Grid s.r.o., CZ, Prague
+47.5
+26.8
+50.0
+Ultra-Fast Charging Venture Scandinavia ApS, DK, Copenhagen
+Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen
+25.0
+Szombathelyi Távhőszolgáltató Kft., HU, Szombathely
+Täby Miljövärme AB, SE, Täby6
+49.0
+100.0
+50.0
+Untermain EnergieProjekt AG & Co. KG., DE, Kelsterbach6
+Süwag Grüne Energien und Wasser AG & Co. KG, DE, Frankfurt am
+Main¹
+22.8
+TNA Talsperren- und Grundwasser-Aufbereitungs- und
+Vertriebsgesellschaft mbH, DE, Nonnweiler6
+100.0
+50.0
+UP Energiewerke GmbH, DE, Dingolfing
+49.0
+100.0 Tiefbaupartner SL GmbH, DE, Düren6
+SVO Holding GmbH, DE, Celle¹
+SVO Fischer electric GmbH, DE, Celle²
+SVH Stromversorgung Haar GmbH, DE, Haar6
+SVI-Stromversorgung Ismaning GmbH, DE, Ismaning
+SVO Access GmbH, DE, Celle¹
+Süwag Vertrieb AG & Co. KG, DE, Frankfurt am Main¹
+Süwag Management GmbH, DE, Frankfurt am Main²
+25.0
+Untermain Erneuerbare Energien GmbH, DE, Raunheim
+47.0
+Technische Werke Naumburg GmbH, DE, Naumburg (Saale)6
+100.0
+49.0
+Südwestfalen Netz-Verwaltungsgesellschaft mbH, DE, Netphen
+25.1
+beschränkter Haftung, DE, Merchweiler
+Westenergie Netzservice GmbH, DE, Dortmund¹
+100.0
+Westenergie Metering GmbH, DE, Mülheim an der Ruhr¹
+60.0
+50.0
+Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE, Müden/Aller6
+Wassernetzgesellschaft Erft GmbH & Co. KG, DE, Bergheim
+Wasser-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+50.0
+25.0
+VOLTARIS GmbH, DE, Maxdorf6
+Volta NXT B.V., NL, Schinnen¹
+Volta Limburg B.V., NL, Schinnen¹
+VKB-GmbH, DE, Neunkirchen¹
+Visualix GmbH i. L., DE, Berlin
+Wasserkraft Farchet GmbH, DE, Bad Tölz²
+100.0
+"Veszprém-Kogeneráció" Energiatermelő Zrt., HU, Budapest²
+100.0
+Westenergie Aqua GmbH, DE, Mülheim an der Ruhr1,8
+100.0
+50.0
+51.0
+100.0
+100.0
+Westnetz GmbH, DE, Dortmund¹
+49.0
+Wasserversorgung Main-Taunus GmbH, DE, Frankfurt am Main6
+Wasserversorgung Sarstedt GmbH, DE, Sarstedt
+100.0
+VSE Windpark Merchingen GmbH & Co. KG, DE, Saarbrücken²
+50.0
+100.0
+Westnetz Asset Komplementär GmbH, DE, Essen²
+38.5
+Wasserverbund Niederrhein Gesellschaft mit beschränkter Haftung,
+DE, Moers6
+100.0
+Kerpen
+100.0
+Westerwald-Netz GmbH, DE, Betzdorf-Alsdorf¹
+25.1
+100.0
+Westenergie Rheinhessen Beteiligungs GmbH, DE, Essen 1,8
+49.0
+Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim
+Verwaltungsgesellschaft Scharbeutzer Energie- und Netzgesellschaft
+mbH, DE, Scharbeutz²
+33.0
+SWTE Netz GmbH & Co. KG, DE, Ibbenbüren5
+51.0
+Verwaltungsgesellschaft Energieversorgung Timmendorfer Strand
+mbH, DE, Timmendorfer Strand²
+51.0
+TWS Technische Werke der Gemeinde Saarwellingen GmbH, DE,
+Saarwellingen
+26.0
+SWT trilan GmbH, DE, Trier6
+Weißenhorn6
+35.0
+35.0
+Verwaltungsgesellschaft Energie Weißenhorn GmbH, DE,
+TWRS Technische Werke der Gemeinde Rehlingen-Siersburg GmbH,
+DE, Rehlingen-Siersburg6
+49.0
+SWS Energie GmbH, DE, Stralsund5
+49.0
+Verwaltungsgesellschaft Dorsten Netz mbH, DE, Dorsten
+Überlandwerk Krumbach Gesellschaft mit beschränkter Haftung, DE,
+Krumbach¹
+51.0
+Verwaltungsgesellschaft GKW Dillingen mbH, DE, Dillingen6
+74.6
+Stake
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+245
+25.2
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e. V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+100.0
+100.0
+80.0
+100.0
+Stromnetz Taufkirchen (Vils) Verwaltungs GmbH i. Gr., DE,
+Stollberg Netz GmbH & Co. KG, DE, Stollberg/Erzgeb.6
+Stoen Operator Sp. z o.o., PL, Warsaw¹
+49.0
+Stromnetzgesellschaft Langenfeld mbH & Co. KG, DE, Langenfeld
+100.0
+100.0 Stromnetz Taufkirchen (Vils) GmbH & Co. KG, DE, Regensburg²
+Stibbe Kälte-Klima-Technik GmbH & Co. KG, DE, Garbsen²
+Bergheim6
+25.1
+49.0
+Stromnetz Pullach GmbH, DE, Pullach im Isartal6
+100.0
+Strom-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE,
+STAWAG Infrastruktur Simmerath Verwaltungs GmbH, DE,
+Simmerath²
+Kerpen6
+100.0
+25.1
+Stromnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann
+Taufkirchen (Vils)2
+49.0
+Stromnetzgesellschaft Neunkirchen-Seelscheid mbH & Co. KG, DE,
+Neunkirchen-Seelscheid6
+49.0
+Stromnetz Verbandsgemeinde Katzenelnbogen GmbH & Co. KG, DE,
+Katzenelnbogen
+49.0
+Stromnetz Bornheim GmbH & Co. KG, DE, Bornheim6
+49.0
+Stromnetzgesellschaft Neuenhaus Verwaltungs-GmbH, DE,
+Neuenhaus6
+49.0
+Stromnetz Traunreut Verwaltungs GmbH, DE, Traunreut
+90.0
+Strom Germering GmbH, DE, Germering²
+49.0
+Stromnetzgesellschaft Neuenhaus mbH & Co. KG, DE, Neuenhaus
+49.0
+Stromnetz Traunreut GmbH & Co. KG, DE, Traunreut
+49.0
+25.1
+Stromnetz Verbandsgemeinde Katzenelnbogen
+25.1
+100.0
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search ← Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+243
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+SüdWasser GmbH, DE, Erlangen²
+Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten6
+Stadtwerke Kerpen GmbH & Co. KG, DE, Kerpen
+36.0
+Stadtwerke Wülfrath Netz GmbH & Co. KG, DE, Wülfrath6
+Stadtwerke Zeitz GmbH, DE, Zeitz6
+39.0
+Name, Location
+Stromnetz Pulheim GmbH & Co. KG, DE, Pulheim
+Stake
+STAWAG Abwasser GmbH, DE, Aachen²
+STAWAG Infrastruktur Simmerath GmbH & Co. KG, DE, Simmerath2
+25.1
+Stromnetzgesellschaft Gescher GmbH & Co. KG, DE, Gescher6
+Strom-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
+49.0
+Stromnetz Neufahrn/Eching GmbH & Co. KG, DE, Neufahrn bei
+Freising
+100.0
+25.1
+49.0
+Stromnetzgesellschaft Datteln GmbH & Co. KG, DE, Datteln
+Strom-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf
+49.9
+Stake
+Name, Location
+Stake
+49.0
+Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach
+Stromnetz Neckargemünd GmbH, DE, Neckargemünd
+100.0
+STAWAG Infrastruktur Monschau GmbH & Co. KG, DE, Monschau²
+STAWAG Infrastruktur Monschau Verwaltungs GmbH, DE,
+Monschau²
+100.0
+Name, Location
+Stromnetz Diez GmbH und Co.KG, DE, Diez
+24.8
+49.0 Stromnetzgesellschaft Schwalmtal mbH & Co. KG, DE, Schwalmtal6
+Name, Location
+Stake
+Name, Location
+Stake
+Name, Location
+Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held (as of December 31, 2023)
+→ Notes
+→ Consolidated Balance Sheets
+→ Consolidated Statement of Recognized Income and Expenses
+→ Consolidated Statement of Changes in Equity
+→ Consolidated Statement of Cash Flows
+→ Consolidated Statement of Income
+= Contents Q Search Back
+Consolidated Financial Statements
+E.ON Integrated Annual Report 2023
+244
+49.0
+Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
+Unterschleißheim6
+Stake
+25.1
+Stromverwaltung Schwalmtal GmbH, DE, Schwalmtal6
+strotög GmbH Strom aus Töging, DE, Töging am Inn
+25.1
+Szombathelyi Erőmű Zrt., HU, Budapest²
+36.8
+StWB Verwaltungs GmbH, DE, Brandenburg an der Havel
+Überlandwerk Mittelbaden Verwaltungs-GmbH, DE, Lahr6
+66.5
+Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin¹
+36.8
+StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG, DE,
+Brandenburg an der Havel
+37.8
+Überlandwerk Mittelbaden GmbH & Co. KG, DE, Lahr
+100.0
+48.0
+Überlandwerk Leinetal GmbH, DE, Gronau6
+33.0
+SWTE Netz Verwaltungsgesellschaft mbH, DE, Ibbenbüren
+Syna GmbH, DE, Frankfurt am Main¹
+50.0
+51.0
+49.0
+37.8
+25.1
+49.9
+25.1
+25.1
+49.0
+Stromnetzgesellschaft Seelze GmbH & Co. KG, DE, Seelze6
+Stromnetzgesellschaft Siegen GmbH & Co.KG, DE, Siegen
+Strom-Netzgesellschaft Voerde mbH & Co. KG, DE, Voerde
+Stromnetzgesellschaft Windeck mbH & Co. KG, DE, Windeck
+Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf6
+Stromversorgung Angermünde GmbH, DE, Angermünde
+Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg6
+Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
+Pfaffenhofen
+49.0
+100.0
+74.5
+49.0
+49.0
+49.0
+49.0
+49.0
+STROMNETZ VG DIEZ Verwaltungsgesellschaft mbH, DE, Altendiez
+Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf.6
+Stromnetz Weilheim GmbH & Co. KG, DE, Weilheim i. OB6
+49.0 Stromnetz Weilheim Verwaltungs GmbH, DE, Weilheim i. OB6
+49.0 Stromnetz Würmtal GmbH & Co. KG, DE, Planegg²
+49.0
+Stromnetz Würmtal Verwaltungs GmbH, DE, Planegg²
+49.0 Stromnetze Peiner Land GmbH, DE, Ilsede6
+50.0
+25.1
+49.0
+Stromnetz VG Diez GmbH und Co. KG, DE, Altendiez
+25.1
+Verwaltungsgesellschaft mbH, DE, Katzenelnbogen
+Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
+Unterschlei��heim
+49.0
+49.0
+Stromnetz Diez Verwaltungsgesellschaft mbH, DE, Diez
+Stromnetz Essen GmbH & Co. KG, DE, Essen
+Stromnetz Euskirchen GmbH & Co. KG, DE, Euskirchen
+Stromnetz Friedberg GmbH & Co. KG, DE, Friedberg6
+Stromnetz Gersthofen GmbH & Co. KG, DE, Gersthofen
+Stromnetz Günzburg GmbH & Co. KG, DE, Günzburg
+Stromnetz Günzburg Verwaltungs GmbH, DE, Günzburg
+Stromnetz Hallbergmoos GmbH & Co. KG, DE, Hallbergmoos6
+Stromnetz Hallbergmoos Verwaltungs GmbH, DE, Hallbergmoos6
+Stromnetz Hofheim GmbH & Co. KG, DE, Hofheim am Taunus
+49.0
+1) Consolidated affiliated company. 2) Non-consolidated affiliated company for reasons of immateriality (valued at cost). 3) Joint operations pursuant to IFRS 11. 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of
+immateriality). 4) Joint ventures pursuant to IFRS 11. 5) Associated company (valued using the equity method). 6) Associated company (valued at cost for reasons of immateriality). 7) Investments pursuant to Section 313 (2) No. 5 HGB. 8) This company exercised its exemption option under Section 264, Paragraph
+3 of the German Commercial Code or under Section 264b. 9) Control by virtue of company contract. 10) No control by virtue of company contract. 11) Significant influence via indirect investments. 12) Structured entity pursuant to IFRS 10 and 12. 13) Affiliated company which is held by E.ON Pension Trust e.V. on
+behalf of E.ON SE. 14) Other equity investment which is held by E.ON Pension Trust e.V. on behalf of E.ON SE. 15)Taking into account own shares.
+49.0
+Stromnetz Hofheim Verwaltungs GmbH, DE, Hofheim am Taunus
+Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach6
+Stromnetzgesellschaft Bramsche mbH & Co. KG, DE, Bramsche
+49.0
+Strom-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg
+49.0
+100.0
+51.0
+49.0
+Stromversorgung Ruhpolding Gesellschaft mit beschränkter Haftung,
+DE, Ruhpolding2
+Stromnetzgesellschaft Bad Salzdetfurth - Diekholzen mbH & Co. KG,
+DE, Bad Salzdetfurth6
+49.0
+Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH, DE,
+Pfaffenhofen6
+49.0
+49.0
+49.0
+Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
+Barsinghausen
+Other Information
+E.ON Integrated Annual Report 2023
+258
+In determining the disclosures in accordance with Article 8 of the
+EU Taxonomy Regulation, management is required to interpret
+undefined legal terms. Due to the immanent risk that undefined
+legal terms may be interpreted differently, the legal conformity of
+their interpretation and, accordingly, our assurance engagement
+thereon are subject to uncertainties.
+• Assessment of the overall presentation of the information.
+• Carrying out a risk assessment, including media analysis, to
+identify relevant information on E.ON SE's sustainability
+performance in the reporting period.
+• Inquiries of responsible employees at group level as well as in
+significant local units, for determining disclosures of taxonomy
+eligible and aligned economic activities, performing internal
+control procedures and consolidating disclosures.
+• Assessing the design and implementation of systems and
+procedures for identifying, processing and monitoring
+information of revenue, capital expenditures and operating
+expenditures for the taxonomy eligible and aligned economic
+activities on group level as well as in significant local units.
+Inquiries of responsible employees at group level to obtain an
+understanding of the approach to identify taxonomy eligible and
+aligned economic activities in accordance with EU taxonomy.
+With regard to the assurance of the non-financial disclosures on
+the EU taxonomy, we performed the following supplementary
+assurance procedures in particular:
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index → NFS Index
+• Analytical procedures of the data and trends of the quantitative
+information reported for consolidation at group level by all sites.
+Inspecting selected internal and external documents.
+.
+• Inquiries of group level personnel, who are responsible for the
+disclosures on concepts, due diligence processes, results and
+risks, the performance of internal control activities and the
+consolidation of the disclosures.
+• Assessing the design and implementation of systems and
+processes for identifying, handling and monitoring information
+on environmental, employee and social matters, respect for
+human rights and combatting corruption and bribery, including
+the consolidation of data.
+• Evaluation of local data collection, validation and reporting
+processes as well as the reliability of reported data based on a
+sample of individual cases.
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+⚫ the parts of further qualitative and quantitative sustainability
+information, which are marked accordingly with and
+have not been prepared, in all material respects, in accordance
+with the reporting criteria.
+⚫ the consolidated non-financial statement of E.ON SE, Essen,
+except the information marked as unassured and the external
+sources of documentation or expert opinions mentioned therein,
+for the period from January 1 to December 31, 2023 have not
+been prepared in all material respects, in accordance with
+Sections 289c to 289e and 315c in conjunction with 289c to
+289e HGB and the EU Taxonomy Regulation and the Delegated
+Acts issued thereunder as well as the interpretation by
+management disclosed in section "EU Taxonomy" and that
+• Interviewing employees responsible for the materiality analysis
+at group level in order to obtain an understanding on the
+approach for identifying key issues and related reporting
+boundaries of E.ON SE.
+Based on the assurance procedures performed and the evidence
+obtained, nothing has come to our attention that causes us to
+believe that
+Assurance Opinions
+In our opinion, we obtained sufficient and appropriate evidence for
+reaching conclusions on our assurance engagement.
+• Review of internal and external documents to determine
+whether the selected information as presented in the report
+corresponds to the relevant underlying sources and whether all
+relevant information from the underlying sources is included in
+the report.
+→ Declaration of the Management Board
+• Evaluation of the design and implementation and testing the
+functionality of the systems and methods used to collect the
+processing of the data, including the aggregation of this data for
+selected disclosures.
+In addition to the procedures described above, we have performed
+the following procedures on the quantitative and qualitative
+sustainability information:
+We conducted our assurance engagement in accordance with the
+International Standard on Assurance Engagements ISAE 3000
+(Revised) as reasonable assurance engagement for the parts of the
+further qualitative and quantitative sustainability information
+accordingly marked with . This standard requires that we have
+to comply with our professional duties and that we plan and
+perform the assurance engagement in such a way that we,
+respecting the principle of materiality, reach our conclusion with a
+reasonable level of assurance. The selection of the assurance
+procedures is subject to the own professional judgment of the
+assurance practitioner.
+= Contents Q Search ← Back
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Auditor's Report
+→ TCFD → ESG Figures
+• Assessment of the local data collection, validation, and reporting
+processes, as well as the reliability of reported data, through an
+additional sample of individual cases in significant local units.
+Reasonable Assurance engagement
+→ Declaration of the Management Board
+In a limited assurance engagement, the procedures performed are
+less extensive than in a reasonable assurance engagement, and
+accordingly, a substantially lower level of assurance is obtained.
+The selection of the assurance procedures is subject to the
+professional judgment of the assurance practitioner.
+2The English language text below is a translation provided for information purposes only. The
+original German text shall prevail in the event of any discrepancies between the English translation
+⚫ with limited assurance on the consolidated non-financial
+statement for the period from January 1 to December 31 2023
+Our responsibility is to express a conclusion based on our
+assurance engagement
+Responsibility of the Assurance Practitioner
+We have complied with the independence and quality assurance
+requirements set out in the national legal provisions and
+professional pronouncements, in particular the Professional Code
+for German Public Auditors and Chartered Accountants (in
+Germany) and the quality assurance standard of the German
+Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW)
+regarding quality assurance requirements in audit practice (IDW
+QMS 1 (09.2022)).
+Independence and Quality Assurance of the Assurance
+Practitioner's firm
+The EU Taxonomy Regulation and the Delegated Acts issued
+thereunder contain wording and terms that are still subject to
+considerable interpretation uncertainties and for which
+clarifications have not yet been published in every case. Therefore,
+management has disclosed their interpretation of the EU
+Taxonomy Regulation and the Delegated Acts adopted thereunder
+in section "EU Taxonomy" of the consolidated non-financial
+statement. They are responsible for the defensibility of this
+interpretation. Due to the immanent risk that indeterminate legal
+terms may be interpreted differently, the legal conformity of the
+interpretation is subject to uncertainties.
+as the further qualitative and quantitative sustainability
+information).
+This responsibility includes the selection and application of
+appropriate non-financial reporting methods and making
+assumptions and estimates about individual non-financial
+disclosures of the group and qualitative and quantitative
+sustainability information that are reasonable in the
+circumstances. Furthermore, management is responsible for such
+internal control as they consider necessary to enable the
+preparation of a consolidated non-financial statement that is free
+from material misstatement, whether due to fraud or error
+(manipulation of the consolidated non-financial statement as well
+Moreover, the management of the company is responsible for the
+preparation of the further qualitative and quantitative
+sustainability information for the period from January 1 to
+December 31 2023 in accordance with the sustainability reporting
+standards of E.ON SE (hereinafter the "reporting criteria"), which
+reference to the Standards of Global Reporting Initiative (GRI).
+Management of the company is responsible for the preparation of
+the consolidated non-financial statement for the period from
+January 1 to December 31 2023 in accordance with Sections
+289c to 289e and 315c in conjunction with 289c to 289e HGB
+("Handelsgesetzbuch": German Commercial Code) and Article 8 of
+REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT
+AND OF THE COUNCIL of June 18, 2020 on establishing a
+framework to facilitate sustainable investment and amending
+Regulation (EU) 2019/2088 (hereinafter the "EU Taxonomy
+Regulation") and the Delegated Acts adopted thereunder, as well
+as for making their own interpretation of the wording and terms
+contained in the EU Taxonomy Regulation and the delegated acts
+adopted thereunder as set out in section "EU Taxonomy".
+Responsibilities of Management
+Furthermore, not subject to our assurance engagement are the
+qualitative and quantitative information covered by the statutory
+auditor's report.
+In our opinion the parts of the further qualitative and quantitative
+sustainability information accordingly marked with of E.ON SE,
+Essen, for the period from January 1 to December 31, 2023 have
+been prepared in all material respects in accordance with the
+reporting criteria.
+Also, not subject to our assurance engagement are external
+sources of documentation or expert opinions, which are marked as
+unassured.
+and the German original. We do not accept any liability for the use of, or reliance on, the English
+translation or for any errors or misunderstandings that may arise from the translation.
+257
+E.ON Integrated Annual Report 2023
+Other Information
+⚫ the further qualitative and quantitative sustainability
+information of the company, which are marked accordingly with
+O and, have not been prepared, in all material respects, in
+accordance with the reporting criteria.
+to 289e HGB and the EU Taxonomy Regulation and the
+Delegated Acts issued thereunder as well as the interpretation
+by management disclosed in section "EU Taxonomy"
+⚫ the consolidated non-financial statement of the company,
+except for the information marked as unassured and the external
+sources of documentation or expert opinions mentioned therein,
+have not been prepared, in all material respects, in accordance
+with Sections 289c to 289e and 315c in conjunction with 289c
+We conducted our assurance engagement for the consolidated
+non-financial statement and for the further qualitative and
+quantitative sustainability information, which are marked
+accordingly with ☐ and ► in accordance with International
+Standard on Assurance Engagements (ISAE) 3000 (Revised):
+"Assurance Engagements other than Audits or Reviews of
+Historical Financial Information" issued by the IAASB as a limited
+assurance engagement. This standard requires that we plan and
+perform the assurance engagement to obtain limited assurance
+about whether any matters have come to our attention that cause
+us to believe that
+Limited Assurance engagement
+except for the information marked as unassured and external
+sources of documentation or expert opinions mentioned therein.
+⚫ with reasonable assurance on the further qualitative and
+quantitative sustainability information, which are marked
+accordingly with
+In the course of our assurance engagement we have, among other
+procedures, performed the following assurance procedures and
+other activities:
+• with limited assurance on the further qualitative and
+quantitative sustainability information, which are marked
+accordingly with ☐ and -
+= Contents Q Search ← Back
+→ SASB Index
+→ Boards
+→ SDG Index
+→ Independent Auditor's Report
+→ TCFD → ESG Figures → EU Taxonomy
+→ Independent Assurance Practitioner's Report
+→ GRI Index → NFS Index
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+in accordance with Sections 289c to 289e and 315c in
+conjunction with 289c to 289e HGB ("Handelsgesetzbuch":
+German Commercial Code) and the EU Taxonomy Regulation
+and the Delegated Acts adopted thereunder, as well as for
+management's own interpretation of the wording and terms
+contained in the EU Taxonomy Regulation and the delegated
+acts adopted thereunder as set out in section "EU Taxonomy"
+We do not express an assurance opinion on the parts which are
+marked separately with X or > <.
+Deputy Chairman of the Supervisory Board, E.ON SE (since
+January 16, 2024);
+Furthermore, we do not express an assurance opinion on the
+qualitative and quantitative information covered by the statutory
+auditor's report.
+Chairman of the Gaz România gas trade union federation;
+Chairman of the Employees' Representatives of Romania;
+Member of the SE-Works Council, E.ON SE
+Eugen-Gheorghe Luha
+→ DKV Mobility Group SE
+Anke Groth (until May 17, 2023, again since June 5, 2023)
+Member of the Supervisory Board
+Former member of the Management Board, Bayerische Motoren
+Werke AG
+(until May 17, 2023, again since June 5, 2023)
+Klaus Fröhlich
+→ E.ON Energie Deutschland GmbH2
+Member of the Group Works Council, E.ON SE
+Wunstorf/Osnabrück/Kassel of E.ON Energie Deutschland GmbH;
+Member of the Works Council, E.ON SE
+Deputy Chairman of the Works Council,
+Deputy Chairman of the Supervisory Board, E.ON Energie
+Deutschland GmbH;
+Katja Bauer
+→ Ruhrfestspiele Recklinghausen GmbH
+→ Deutsche Telekom AG (since November 7, 2023)
+Stefan May (until May 17, 2023, again since June 5, 2023)
+Deputy Chairman of the Group Works Council, E.ON SE;
+Chairman of the General Works Council, Westenergie
+AG/Westnetz GmbH;
+Chairman of the Works Council of the Münster Region, Westnetz
+GmbH
+→ Westenergie AG2
+Not subject to our assurance engagement are parts marked with
+× or ><.
+E.ON Integrated Annual Report 2023
+260
+E.ON Group directorships/memberships.
+"Listed company.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+→ Directorships/memberships in other statutory supervisory boards.
+Christoph Schmitz (until December 31, 2023)
+Deputy Chairman of the Supervisory Board, E.ON SE;
+Member of the ver.di-Federal Executive Committee; Federal
+Department Head, Financial Services, Utilities and Waste
+Management, Media, Arts, Industry and Telecommunications/IT
+→ AXA Konzern AG
+Unless otherwise indicated, information is as of December 31, 2023, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ EG.D a.s.² (formerly E.ON Distribuce a.s.)
+→ E.ON Energie a.s.2
+Deputy Chairman of the SE Works Council of E.ON SE; Chairman
+of the Association of Basic Organizations of the ECHO Energy
+Industry Trade Union Confederation in the E.ON companies in the
+Czech Republic; Member of the Presidium of the ECHO Trade
+Union Confederation
+Miroslav Pelouch (until May 17, 2023)
+Member of the SE works council of E.ON SE
+Chairwoman of the works council of the E.ON Dél-dunántúli
+Áramhálózati Zrt.;
+Szilvia Pinczésné Márton
+→ Mondi plc (since April 1, 2023)
+Chairman of the United Services Trade Union (ver.di)
+→ ZDF Studios GmbH
+Frank Werneke (since January 1, 2024)
+→ Zinacor S.A.2 (until October 31, 2023)
+→ Independent Auditor's Report
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+259
+→ TCFD
+Wirtschaftsprüferin
+[German Public Auditor]
+Krause
+Wirtschaftsprüfungsgesellschaft
+[Original German version signed by:]
+KPMG AG
+Duesseldorf, March 5, 2024
+Our assignment for E.ON SE and professional liability is governed
+by the General Engagement Terms for Wirtschaftsprüfer (German
+Public Auditors) and Wirtschaftsprüfungsgesellschaften (German
+Public Audit Firms) (Allgemeine Auftragsbedingungen für
+Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in the
+version dated January 1, 2017
+(https://www.kpmg.de/bescheinigungen/lib/aab_english.pdf). By
+reading and using the information contained in this assurance
+report, each recipient confirms having taken note of provisions of
+the General Engagement Terms (including the limitation of our
+liability for negligence to EUR 4 million as stipulated in No. 9) and
+accepts the validity of the attached General Engagement Terms
+with respect to us.
+This assurance report is solely addressed to supervisory board of
+E.ON SE, Essen.
+Restriction of Use
+Herr
+Also, we do not express an assurance opinion on external sources
+of documentation and expert opinions.
+→ Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ SDG Index → SASB Index
+→ Rheinzink GmbH & Co. KG (until October 31, 2023)
+→ Grillo Zinkoxid GmbH2 (until October 31, 2023)
+→ Rheinmetall AG1 (Chair)
+Chief Executive Officer, Grillo-Werke AG
+Deputy Chairman of the Supervisory Board, E.ON SE (since May
+17, 2023);
+Ulrich Grillo
+→ Deutsche Lufthansa AG¹ (Chairman)
+→ Boards
+Chairman of the Supervisory Board, E.ON SE
+→ Deutsche Lufthansa AG¹
+2023); Deputy Chairman of the Supervisory Board, E.ON SE (until
+May 17, 2023)
+Chairman of the Supervisory Board, E.ON SE (since May 17,
+Erich Clementi
+Supervisory Board (and Information on Other Directorships)
+Boards
+= Contents Q Search ← Back
+Dr. Karl-Ludwig Kley (until May 17, 2023)
+Furthermore, we have performed a reasonable assurance
+engagement on selected parts of the qualitative and quantitative
+sustainability information marked accordingly with of the
+company with reference to the Standards of Global Reporting
+Initiative (GRI) for the period from January 1 to December 31,
+2023.
+Independent auditor's report
+To the supervisory board of E.ON SE, Essen
+= Contents Q Search Back
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ TCFD → ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Independent Auditor's Report
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+252
+Please refer to Note [1] to the consolidated financial statements
+for information on the accounting policies applied. Disclosures on
+the assumptions made and the amount of goodwill can be found
+under note [15] to the consolidated financial statements and
+Recoverability of goodwill
+The recognition, classification and ongoing monitoring of
+commodity forward transactions has been carried out
+appropriately. The methods, assumptions and data used to
+measure commodity forward transactions and provisions for
+onerous contracts are appropriate.
+OUR OBSERVATIONS
+In addition, we assessed the appropriateness of the key data and
+assumptions as well as the method used by E.ON in relation to the
+recognition of provisions for onerous contracts for sales portfolios.
+To this end, we verified the allocations of the procurement
+transactions to the sales portfolios and also discussed the
+expected future contribution margins in the various sales
+portfolios of the E.ON Group with those responsible for planning.
+To ensure the computational accuracy of the method used, we
+verified the Company's calculations on the basis of selected risk-
+based elements.
+Furthermore, with regard to the measurement of commodity
+forward transactions for which no market prices are observable,
+we made enquiries with the involvement of our valuation
+specialists and gained insight into the relevant documents and, in
+doing so, assessed the selection of methods, data and assumptions
+used for measurement. To assess the methodically and
+mathematically correct implementation of the valuation method,
+our valuation experts verified E.ON's valuation using their own
+calculations and analysed deviations for a risk-based selection.
+Price and market information observable in the market were used
+where possible.
+whether it was recognised in the consolidated balance sheet
+appropriately.
+We used analyses to satisfy ourselves that the commodity forward
+transactions were properly recognised and classified. In the case of
+sales, we assessed whether there was a change in purpose and
+With the involvement of our specialists for financial instruments,
+we assessed the appropriateness, implementation and
+effectiveness of the controls established by E.ON to recognise and
+classify commodity forward transactions and to completely and
+accurately recognise and assess sales from the portfolio in terms
+of the permissibility of the own-use criteria.
+disclosures on the financial performance of the business segments
+in section [35] of the combined group management report.
+THE FINANCIAL STATEMENT RISK
+Goodwill amounts to EUR 17.1 billion as at 31 December 2023
+and, at 86% of consolidated equity, constitutes a significant
+proportion of the assets.
+Goodwill is tested for impairment annually, irrespective of any
+indication of impairment, as at 1 October. If impairment triggers
+arise during the financial year, an event-driven goodwill
+impairment test is also carried out during the year. The goodwill is
+allocated to the cash-generating units or groups of cash-
+generating units, which essentially correspond to the operating
+segments at the E.ON Group. For the goodwill impairment test, the
+carrying amount is compared with the recoverable amount of the
+relevant cash-generating units or groups of cash-generating units.
+If the carrying amount exceeds the recoverable amount, an
+impairment loss is recognised. At E.ON, the recoverable amount is
+initially calculated as the fair value less costs to sell.
+E.ON Integrated Annual Report 2023
+253
+The other information also includes the remaining parts of the
+annual report. The other information does not include the
+⚫ the combined corporate governance statement of the Company
+and the Group referred to in the combined group management
+report.
+⚫ the sections marked as "not part of the statutory audit" and the
+disclosures contained there and thus marked as unaudited; and
+The The Board of Management and/or the Supervisory Board are
+responsible for the other information. The other information
+comprises the following components of the combined group
+management report, whose content was not audited:
+Other Information
+The related disclosures in the notes are appropriate.
+The Company's assumptions and data underlying the
+measurement are appropriate.
+The calculation method used for impairment testing of goodwill is
+appropriate and in line with the accounting policies to be applied.
+For the IT and individual data processing systems deployed, with
+the involvement of our IT specialists we evaluated the
+effectiveness of the rules and procedures relating to a large
+number of IT applications and which support the effectiveness of
+the application controls.
+OUR OBSERVATIONS
+In order to take account of the existing forecast uncertainty and
+the early cut-off date for impairment testing, we investigated the
+impact of possible changes in the discount rate, earnings
+performance and the long-term growth rate on the recoverable
+amount by calculating alternative scenarios and comparing them
+with the values stated by the Company (sensitivity analysis).
+performed by the Company using our own calculations and
+analysed deviations.
+To assess the methodically and mathematically correct
+implementation of the valuation method, we verified the valuation
+We also confirmed the accuracy of the Company's previous
+forecasts by comparing the budgets of previous financial years
+with actual results and by analysing deviations. We compared the
+assumptions and data underlying the weighted average cost of
+capital, especially the risk-free interest rate, the market risk
+premium and the beta factor, with our own assumptions and
+publicly available data.
+First, we obtained an understanding of the process for impairment
+testing of goodwill through explanations provided by staff of the
+finance organisation and by evaluating the Company's
+documentation. With the involvement of our valuation experts, we
+assessed (among other things) the appropriateness of the
+significant assumptions and the Company's calculation method for
+both annual as well as indicator-based (ad hoc) impairment
+testing. To this end, we discussed and validated the expected cash
+flows and the assumed long-term growth rates with those
+responsible for planning. We also carried out reconciliations with
+the budget drawn up by management and approved by the
+Supervisory Board for the following year and the medium-term
+planning, including the projected development for the next three to
+five
+years, that has been acknowledged by the Supervisory Board.
+In addition, we assessed the consistency of the assumptions with
+external market forecasts.
+OUR AUDIT APPROACH
+There is the risk for the consolidated financial statements that
+impairment existing as at the reporting date was not identified.
+There is also the risk that the related disclosures in the notes are
+not appropriate).
+As a result of the impairment tests conducted, the Company did
+not identify any need for impairment. Furthermore, no
+requirement to recognise an impairment loss was identified in the
+course of the annual impairment testing.
+On 11 September 2023, the Board of Management of E.ON
+passed a resolution on a new management concept for the E.ON
+Group. The concept is effective from 1 January 2024 and requires
+a change in the definition of some segments according to IFRS 8
+and, in this context, a reallocation of the current goodwill for all
+segments affected by the changes and carrying goodwill as at 1
+January 2024. The Board of Management's decision was seen as
+an event triggering testing of the recoverability of goodwill for the
+segments affected by the changes and carrying goodwill.
+The goodwill impairment test is complex and based on a number of
+assumptions requiring judgement. These include the estimate of
+the expected business and earnings performance of the operating
+segments, the assumed long-term growth rates and the discount
+rate used.
+Finally, we assessed whether the disclosures in the notes
+regarding impairment of goodwill are appropriate.
+In the course of our audit, we obtained a comprehensive insight
+into the development of commodity forward transactions and the
+associated risks as well as an understanding of E.ON's process
+used to record and classify these transactions and to recognise and
+assess sales from the portfolio in terms of the permissibility of the
+own-use criteria.
+Other Information
+→ Declaration of the Management Board
+In the consolidated financial statements as at 31 December 2023
+E.ON SE recognised market values for derivatives in connection
+with commodity forward transactions of EUR 6.7 billion in the
+other operating assets and market values of EUR 10.8 billion in the
+non-current and current (other) operating liabilities for
+procurement and sales transactions that are accounted for at fair
+value in accordance with the provisions of IFRS 9: Financial
+Instruments. Provisions for onerous contracts were reported in the
+amount of EUR 0.1 billion.
+E.ON maintains portfolios of sales and procurement contracts for
+electricity and gas supplies with various customer and supplier
+251
+E.ON Integrated Annual Report 2023
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+→ TCFD
+→ Independent Auditor's Report
+→ ESG Figures
+THE FINANCIAL STATEMENT RISK
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index → NFS Index
+→ SDG Index
+→ SASB Index
+= Contents Q Search ← Back
+groups (commodity forward transactions), of which some are
+recognised as executory contracts pursuant to the own-use
+provisions of IFRS 9 in accordance with the provisions of IAS 37
+and some are recognised as financial instruments at fair value. The
+contracts in these portfolios are predominantly entered and
+processed by way of mass processes.
+Discretion is required when determining whether a commodity
+forward transaction was concluded to satisfy own requirements
+and is being held for this purpose and therefore fulfils the own-use
+criteria on initial and subsequent recognition. In compliance with
+the requirements of IFRS 9, the underlying contracts are to be
+classified as "own use" contracts or as derivative financial
+instruments and monitored on an ongoing basis. With regard to
+the consolidated financial statements, there is a risk that these
+may be incompletely or incorrectly recognised and/or incorrectly
+classified. There is also the risk that a change in purpose at a later
+date will not be recognised and the contracts will not be properly
+accounted for.
+Fair values are to be determined for the commodity forward
+transactions classified as derivative financial instruments.
+Provided that no market prices are observable, the fair values are
+to be determined on the basis of recognised valuation methods.
+The methods, assumptions and data used for this purpose require
+judgement. There is a risk for the financial statements that the
+other operating assets, the (other) operating liabilities and the
+other operating income will not be measured or determined in line
+with the accounting requirements.
+In the context of its business activities, E.ON fulfils its sales
+obligations towards customers through commodity forward
+transactions. If there is a risk of losses from sales obligations,
+provisions for onerous contracts must be recognised. The amount
+of the provisions is determined based on the best possible
+estimate of the amount by which the unavoidable costs of fulfilling
+the contract will exceed the expected economic benefit of the
+contract, i.e. generally the agreed sales price for sales transactions.
+A direct allocation of procurement transactions to individual sales
+obligations is generally not possible for electricity and gas supply
+companies and thus also not possible within the E.ON Group. The
+recognition and measurement of recognised provisions for onerous
+contracts from pending sales transactions - in due consideration
+of the various procurement transactions of the E.ON Group - are
+consequently based on complex allocations and calculations for
+the sales portfolios of the E.ON Group as well as estimates
+requiring judgement by management, for example the future
+expected contribution margins of the sales portfolios. There is the
+risk for the consolidated financial statements that provisions are
+not recognised or not in the amount required.
+OUR AUDIT APPROACH
+We have performed a limited assurance engagement of the
+combined consolidated non-financial statement integrated in the
+combined management report of the company and the group
+(hereinafter the "consolidated non-financial statement") and
+further qualitative and quantitative sustainability information of
+E.ON SE, Essen (hereinafter the "company"), with reference to the
+Standards of Global Reporting Initiative (GRI), which are marked
+accordingly with O and ◄, for the period from January 1 to
+December 31, 2023.
+→ Boards
+Other Information
+Please refer to Note [1] to the consolidated financial statements
+for information on the accounting policies applied. The disclosures
+on Accounting for derivatives relating to sales and procurement
+contracts for electricity and gas supplies (commodity forward
+transactions) and provisions for sales-related onerous contracts
+are presented in the notes to the consolidated financial statements
+under notes [9], [18], [26] and [27].
+Key audit matters are those matters that, in our professional
+judgement, were of most significance in our audit of the
+consolidated financial statements for the financial year from 1
+January to 31 December 2023. These matters were addressed in
+the context of our audit of the consolidated financial statements as
+a whole, and in forming our opinion thereon, we do not provide a
+separate opinion on these matters.
+→ Financial Calendar and Imprint
+→ TCFD
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy
+→ Boards
+→ GRI Index
+→ NFS Index
+→ SDG Index
+→ SASB Index
+= Contents Q Search Back
+To E.ON SE, Essen
+Accounting for derivatives relating to sales and
+procurement contracts for electricity and gas supplies
+(commodity forward transactions) and provisions for sales-
+related onerous contracts
+Report on the Audit of the Consolidated Financial
+Statements and the Combined Group Management
+Report
+We have audited the consolidated financial statements of E.ON SE,
+Essen, and its subsidiaries (the Group), which comprise the
+statement of income, the statement of recognised income and
+expenses, the consolidated balance sheet, the consolidated
+statement of cash flows and the consolidated statement of
+changes in equity for the financial year from 1 January to 31
+December 2023, and notes to the consolidated financial
+statements, including a summary of significant accounting
+policies. In addition, we have audited the management report of
+the Company and the Group (hereinafter referred to as "combined
+group management report") of E.ON SE for the financial year from
+1 January to 31 December 2023.
+In accordance with German legal requirements, we have not
+audited the content of those components of the combined
+management report specified in the "Other Information" section of
+our auditor's report.
+In our opinion, on the basis of the knowledge obtained in the audit,
+⚫ the accompanying consolidated financial statements comply, in
+all material respects, with the IFRSS as adopted by the EU, and
+the additional requirements of German commercial law pursuant
+to Section 315e (1) HGB [Handelsgesetzbuch: German
+Commercial Code] and, in compliance with these requirements,
+give a true and fair view of the assets, liabilities, and financial
+position of the Group as at 31 December 2023, and of its
+financial performance for the financial year from 1 January to
+31 December 2023, and
+⚫the accompanying combined group management report as a
+whole provides an appropriate view of the Group's position. In all
+material respects, this combined group management report is
+consistent with the consolidated financial statements, complies
+with German legal requirements and appropriately presents the
+opportunities and risks of future development. Our opinion on
+the combined group management report does not cover the
+content of those components of the combined group
+management report specified in the "Other Information" section
+of the auditor's report.
+Pursuant to Section 322 (3) sentence 1 HGB, we declare that our
+audit has not led to any reservations relating to the legal
+compliance of the consolidated financial statements and of the
+combined group management report..
+Basis for the Opinions
+We conducted our audit of the consolidated financial statements
+and of the combined group management report in accordance with
+Section 317 HGB and the EU Audit Regulation No 537/2014
+(referred to subsequently as "EU Audit Regulation") and in
+compliance with German Generally Accepted Standards for
+Financial Statement Audits promulgated by the Institut der
+Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
+Our responsibilities under those requirements and principles are
+further described in the "Auditor's Responsibilities for the Audit of
+the Consolidated Financial Statements and of the Combined group
+management report" section of our auditor's report. We are
+independent of the group entities in accordance with the
+requirements of European law and German commercial and
+professional law, and we have fulfilled our other German
+professional responsibilities in accordance with these
+requirements. In addition, in accordance with Article 10 (2) (f) of
+the EU Audit Regulation, we declare that we have not provided
+non-audit services prohibited under Article 5 (1) of the EU Audit
+Regulation. We believe that the evidence we have obtained is
+sufficient and appropriate to provide a basis for our opinions on the
+consolidated financial statements and on the combined group
+management report.
+Key Audit Matters in the Audit of the Consolidated
+Financial Statements
+Opinions
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Independent Auditor's Report
+→ TCFD → ESG Figures
+• Evaluate whether the ESEF documents provide an XHTML
+rendering with content equivalent to the audited consolidated
+financial statements and the audited combined group
+management report.
+• Evaluate the technical validity of the ESEF documents, i.e.
+whether the file made available containing the ESEF documents
+meets the requirements of the Commission Delegated
+Regulation (EU) 2019/815, as amended as at the reporting date,
+on the technical specification for this electronic file.
+• Obtain an understanding of internal control relevant to the
+assurance on the ESEF documents in order to design assurance
+procedures that are appropriate in the circumstances, but not for
+the purpose of expressing an assurance opinion on the
+effectiveness of these controls.
+• Identify and assess the risks of material intentional or
+unintentional non-compliance with the requirements of Section
+328 (1) HGB, design and perform assurance procedures
+responsive to those risks, and obtain assurance evidence that is
+sufficient and appropriate to provide a basis for our assurance
+opinion.
+328 (1) HGB. We exercise professional judgement and maintain
+professional scepticism throughout the assurance work. We also:
+Our objective is to obtain reasonable assurance about whether the
+ESEF documents are free from material intentional or
+unintentional non-compliance with the requirements of Section
+The Supervisory Board is responsible for overseeing the process of
+preparing the ESEF documents as part of the financial reporting
+process.
+In addition, the Company's Board of Management is responsible
+for such internal control as it has considered necessary to enable
+the preparation of ESEF documents that are free from material
+intentional or unintentional non-compliance with the requirements
+of Section 328 (1) HGB for the electronic reporting format.
+The Company's Board of Management is responsible for the
+preparation of the ESEF documents including the electronic
+rendering of the consolidated financial statements and the
+combined group management report in accordance with Section
+328 (1) sentence 4 item 1 HGB and for the tagging of the
+consolidated financial statements in accordance with Section 328
+(1) sentence 4 item 2 HGB.
+We conducted our assurance work on the rendering of the
+consolidated financial statements and the combined group
+management report contained in the file made available and
+identified above in accordance with Section 317 (3a) HGB and the
+IDW Assurance Standard: Assurance Work on the Electronic
+Rendering of Financial Statements and Management Reports
+Prepared for Publication Purposes in Accordance with Section 317
+(3a) HGB (IDW ASS 410 (06.2022)). Our responsibility in
+accordance therewith is further described below. Our audit firm
+applies the IDW Standard on Quality Management 1:
+Requirements for Quality Management in Audit Firms (IDW QMS
+1 (09.2022)).
+Further Information pursuant to Article 10 of the EU Audit
+Regulation
+contained within these renderings or on the other information
+contained in the file identified above.
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+255
+= Contents Q Search ← Back
+In our opinion, the rendering of the consolidated financial
+statements and the combined group management report
+contained in the electronic file made available, identified above and
+prepared for publication purposes complies in all material respects
+with the requirements of Section 328 (1) HGB for the electronic
+reporting format. Beyond this assurance opinion and our audit
+opinion on the accompanying consolidated financial statements
+and the accompanying combined group management report for
+the financial year from 1 January to 31 December 2023, contained
+in the "Report on the Audit of the Consolidated Financial
+Statements and the Combined group management report" above,
+we do not express any assurance opinion on the information
+We were elected as group auditor at the Annual General Meeting
+on 17 May 2023. We were engaged by the Audit and Risk
+We declare that the opinions expressed in this auditor's report are
+consistent with the additional report to the Audit Committee
+pursuant to Article 11 of the EU Audit Regulation (long-form audit
+report).
+Independent Assurance Practitioner's Report²
+→ Summary of Financial Highlights
+= Contents Q Search ← Back
+→ SASB Index
+→ Boards
+→ SDG Index
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+Committee of the Supervisory Board on 6 December 2023. We
+have been the group auditor of E.ON SE without interruption since
+financial year 2021.
+E.ON Integrated Annual Report 2023
+Lurweg
+Wirtschaftsprüfer
+[German Public Auditor]
+Wirtschaftsprüfer
+[German Public Auditor]
+Kneisel
+Wirtschaftsprüfungsgesellschaft
+KPMG AG
+Düsseldorf, 5 March 2024
+The German Public Auditor responsible for the engagement is
+Gereon Lurweg.
+German Public Auditor Responsible for the
+Engagement
+Our auditor's report must always be read together with the
+audited consolidated financial statements and the audited
+combined group management report as well as the examined ESEF
+documents. The consolidated financial statements and combined
+group management report converted to the ESEF format -
+including the versions to be entered in the German Company
+Register [Unternehmensregister] – are merely electronic
+renderings of the audited consolidated financial statements and
+the audited combined group management report and do not take
+their place. In particular, the ESEF report and our assurance
+opinion contained therein are to be used solely together with the
+examined ESEF documents provided in electronic form.
+Other Matter - Use of the Auditor's Report
+256
+Report on the Assurance of the Electronic Rendering of the
+Consolidated Financial Statements and of the Combined
+group management report Prepared for Publication
+Purposes in Accordance with Section 317 (3a) HGB
+We have performed assurance work in accordance with Section
+317 (3a) HGB to obtain reasonable assurance about whether the
+rendering of the consolidated financial statements and the
+combined group management report (hereinafter the "ESEF
+documents") contained in the electronic file "eonse-2023-12-31-
+de.zip" (SHA256 hash value: b440da7cdb4aece754fc04926a
+89a446 b658ad1e0c4144e779a031ce6894f2ae) made available
+and prepared for publication purposes complies in all material
+respects with the requirements of Section 328 (1) HGB for the
+electronic reporting format ("ESEF format"). In accordance with
+German legal requirements, this assurance work extends only to
+the conversion of the information contained in the consolidated
+financial statements and the combined group management report
+into the ESEF format and therefore relates neither to the
+information contained in these renderings nor to any other
+information contained in the file identified above.
+• Evaluate whether the tagging of the ESEF documents with Inline
+XBRL technology (iXBRL) in accordance with the requirements
+of Articles 4 and 6 of the Commission Delegated Regulation (EU)
+2019/815, as amended as at the reporting date, enables an
+appropriate and complete machine-readable XBRL copy of the
+XHTML rendering.
+Other Legal and Regulatory Requirements
+• Identify and assess the risks of material misstatement of the
+consolidated financial statements and of the combined group
+management report, whether due to fraud or error, design and
+perform audit procedures responsive to those risks, and obtain
+audit evidence that is sufficient and appropriate to provide a
+basis for our opinions. The risk of not detecting a material
+misstatement resulting from fraud is higher than the risk of not
+detecting a material misstatement resulting from error, as fraud
+may involve collusion, forgery, intentional omissions,
+misrepresentations, or the override of internal controls.
+We exercise professional judgement and maintain professional
+scepticism throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a
+guarantee that an audit conducted in accordance with Section 317
+HGB and the EU Audit Regulation and in compliance with German
+Generally Accepted Standards for Financial Statement Audits
+promulgated by the Institut der Wirtschaftsprüfer (IDW) will
+always detect a material misstatement. Misstatements can arise
+from fraud or error and are considered material if, individually or in
+the aggregate, they could reasonably be expected to influence the
+economic decisions of users taken on the basis of these
+consolidated financial statements and this combined management
+report.
+Our objectives are to obtain reasonable assurance about whether
+the consolidated financial statements as a whole are free from
+material misstatement, whether due to fraud or error, and whether
+the combined group management report as a whole provides an
+appropriate view of the Group's position and, in all material
+respects, is consistent with the consolidated financial statements
+and the knowledge obtained in the audit, complies with the
+German legal requirements and appropriately presents the
+opportunities and risks of future development, as well as to issue
+an auditor's report that includes our opinions on the consolidated
+financial statements and on the combined group management
+report.
+Auditor's Responsibilities for the Audit of the
+Consolidated Financial Statements and of the
+Combined group management report
+The Supervisory Board is responsible for overseeing the Group's
+financial reporting process for the preparation of the consolidated
+financial statements and of the combined group management
+report.
+Furthermore, the Board of Management is responsible for the
+preparation of the combined group management report that, as a
+whole, provides an appropriate view of the Group's position and is,
+in all material respects, consistent with the consolidated financial
+statements, complies with German legal requirements, and
+appropriately presents the opportunities and risks of future
+development. In addition, the Board of Management is responsible
+for such arrangements and measures (systems) as it has
+considered necessary to enable the preparation of a combined
+group management report that is in accordance with the
+applicable German legal requirements, and to be able to provide
+sufficient appropriate evidence for the assertions in the combined
+group management report.
+In preparing the consolidated financial statements, the Board of
+Management is responsible for assessing the Group's ability to
+continue as a going concern. They also have the responsibility for
+disclosing, as applicable, matters related to going concern. In
+addition, they are responsible for financial reporting based on the
+going concern basis of accounting unless there is an intention to
+liquidate the Group or to cease operations, or there is no realistic
+alternative but to do so.
+error.
+Board of Management is responsible for the preparation of
+consolidated financial statements that comply, in all material
+respects, with IFRSS as adopted by the EU, and the additional
+requirements of German commercial law pursuant to Section 315e
+(1) HGB and that the consolidated financial statements, in
+compliance with these requirements, give a true and fair view of
+the assets, liabilities, financial position, and financial performance
+of the Group. In addition, the Board of Management is responsible
+Responsibility of the Board of Management and the
+Supervisory Board for the Consolidated Financial
+Statements and the Combined group management
+report
+If, based on the work we have performed, we conclude that there
+is a material misstatement of this other information, we are
+required to report that fact. We have nothing to report in this
+regard.
+• otherwise appears to be materially misstated.
+⚫is materially inconsistent with the consolidated financial
+statements, with the combined group management report
+information audited for content or our knowledge obtained in
+the audit, or
+In connection with our audit, our responsibility is to read the other
+information and, in so doing, to consider whether the other
+information
+Our opinions on the consolidated financial statements and on the
+combined management report do not cover the other information,
+and consequently we do not express an opinion or any other form
+of assurance conclusion thereon.
+consolidated financial statements, the combined group
+management report information audited for content and our
+auditor's report thereon.
+= Contents Q Search ← Back
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index → NFS Index
+254
+E.ON Integrated Annual Report 2023
+for such internal control as they have determined necessary to
+enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud (i.e.,
+fraudulent financial reporting and misappropriation of assets) or
+Other Information
+describe these matters in our auditor's report unless law or
+regulation precludes public disclosure about the matter.
+From the matters communicated with those charged with
+governance, we determine those matters that were of most
+significance in the audit of the consolidated financial statements of
+the current period and are therefore the key audit matters. We
+We also provide those charged with governance with a statement
+that we have complied with the relevant independence
+requirements, and communicate with them all relationships and
+other matters that may reasonably be thought to bear on our
+independence, and where applicable, the actions taken or
+safeguards applied to eliminate independence threats.
+We communicate with those charged with governance regarding,
+among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies
+in internal control that we identify during our audit.
+• Perform audit procedures on the prospective information
+presented by the Board of Management in the combined
+groupmanagement report. On the basis of sufficient appropriate
+audit evidence we evaluate, in particular, the significant
+assumptions used by the Board of Management as a basis for
+the prospective information, and evaluate the proper derivation
+of the prospective information from these assumptions. We do
+not express a separate opinion on the prospective information
+and on the assumptions used as a basis. There is a substantial
+unavoidable risk that future events will differ materially from the
+prospective information.
+• Evaluate the consistency of the combined group management
+report with the consolidated financial statements, its conformity
+with [German] law, and the view of the Group's position it
+provides.
+the Group to express opinions on the consolidated financial
+statements and on the combined group management report. We
+are responsible for the direction, supervision and performance of
+the group audit. We remain solely responsible for our opinions.
+• Evaluate the overall presentation, structure and content of the
+consolidated financial statements, including the disclosures, and
+whether the consolidated financial statements present the
+underlying transactions and events in a manner that the
+consolidated financial statements give a true and fair view of the
+assets, liabilities, financial position and financial performance of
+the Group in compliance with IFRSs as adopted by the EU and
+the additional requirements of German commercial law pursuant
+to Section 315e (1) HGB.
+• Conclude on the appropriateness of the Board of Management's
+use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists
+related to events or conditions that may cast significant doubt
+on the Group's ability to continue as a going concern. If we
+conclude that a material uncertainty exists, we are required to
+draw attention in the auditor's report to the related disclosures
+in the consolidated financial statements and in the combined
+group management report or, if such disclosures are inadequate,
+to modify our respective opinions. Our conclusions are based on
+the audit evidence obtained up to the date of our auditor's
+report. However, future events or conditions may cause the
+Group to cease to be able to continue as a going concern.
+• Evaluate the appropriateness of accounting policies used by the
+Board of Management and the reasonableness of estimates
+made by the Board of Management and related disclosures.
+• Obtain an understanding of internal control relevant to the audit
+of the consolidated financial statements and of arrangements
+and measures (systems) relevant to the audit of the combined
+group management report in order to design audit procedures
+that are appropriate in the circumstances, but not for the
+purpose of expressing an opinion on the effectiveness of these
+systems.
+• Obtain sufficient appropriate audit evidence regarding the
+financial information of the entities or business activities within
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ GRI Index → NFS Index
+→ Independent Auditor's Report
+→ ESG Figures → EU Taxonomy
+→ TCFD
+→ Summary of Financial Highlights
+= Contents Q Search ← Back
+→ Declaration of the Management Board
+453
+Short term
+79
+84
+351
+Power generation
+Long term
+323
+519
+66
+435
+Lüneburg
+E12-05
+Provisions for environmental remediation and similar
+obligations (€ in millions)²
+("INES")
+3.5%2
+and Wolfenbüttel)
+0
+(Bad Münder, Springe,
+Hanover region
+3.6%2
+= Contents Q Search ← Back
+Water provision
+402
+Fresh water consumption - PEL (million cubic meters)³
+3For reasons of materiality, only the withdrawals of the companies Rheinisch-Westfälische Wasserwerksgesellschaft (RWW) and Avacon
+Wasser are taken into account here.
+12.6
+71.1%²
+0
+District Landshut³
+Current Water risks
+¹Funds set aside for potential redevelopment, water protection, and the remediation of contaminated sites.
+2For reasons of materiality, includes Preussen Elektra (PEL) only.
+¹Prior year figures were adjusted.
+n.a.
+n.a.
+0.2
+Spring Water Sources
+n.a.
+n.g.
+46.4
+Surface Water/ Bank filtrate
+n.a.
+n.a.
+36.6
+Groundwater
+n.a.
+n.a.
+83.2
+E28-01
+Fresh water withdrawal - water utilities (million cubic
+meters)4
+52.5
+28.9
+E28-01
+0
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+576
+73
+units with ISO 50001 certification (percentages)²
+Share of employees working at business
+78
+75
+85
+55
+E33-01
+2021
+591
+531
+49
+440
+E01-01
+2022
+2023
+DVFA/EFFAS
+→ SDG Index → SASB Index
+→ Boards
+Environmental Management
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Low
+Other Information
+Energy consumption within the organization (million GJ)
+Share of employees working at business units certified to
+ISO-14001 (percentages)¹
+Number of environmental incidents
+4 (major)
+3 (serious)
+480
+506
+305
+287
+353
+Rhein-Ruhr region
+21
+22
+16
+0
+0
+0
+8.8%²
+0
+0
+0
+(Dorsten and Reken)
+Emscher-Lippe region
+86
+67
+E.ON's Water Withdrawal and Water Risk Areas¹
+Incidents on the seven-step International Nuclear Event Scale
+0 (low)
+1 (minor)
+2 (moderate)
+(Essen and Mülheim an der Ruhr)
+12.6%²
+Low-Medium Medium-high
+Average length of service (years) 2
+Extremely high
+88
+89
+88
+63
+68
+70
+Permanent employment contracts (percentages)
+Employees with full-time contracts (percentages)²
+Employees with permanent employment contracts
+8,590
+9,128
+11,308
+Headcounts
+waste (metric tons)
+34.5
+569.2
+90.8
+91.0
+E05-01
+E08-01/
+Low and intermediate-level radioactive
+Total amount of waste recycled (percentages)²
+701.5
+E04-01
+Total waste (metric kilotons)¹
+54.7
+34.7
+Disposed
+7,871
+543.5
+87.0
+High-level radioactive waste (metric tons)
+E08-02 1,374.1
+E08-03
+0.0
+1,105.7
+0.0
+Voluntary turnover rate (percentages)²
+14
+13
+13
+8,814
+8,378
+9,092
+81
+83
+82
+E.ON Integrated Annual Report 2023
+Employees with part-time contracts²
+³Percentage of recycled hazardous and non-hazardous waste.
+2Hazardous and non-hazardous waste.
+¹Increase compared to 2022 due to expansion of reporting companies.
+(percentages)²
+Employees with collective bargaining agreements
+65.0
+33
+93
+44
+94
+94
+(percentages)²
+1,420.2
+8,499
+High
+10,546
+106.7
+2023
+DVFA/EFFAS
+Waste
+Social
+← Back
+= Contents Q Search
+→ Financial Calendar and Imprint
+→ SDG Index → SASB Index
+→ Boards
+→ GRI Index → NFS Index
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+2022
+→ ESG Figures → EU Taxonomy
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+268
+The Environmental Management contains more information.
+The Environmental Management chapter contains more information.
+5Based on the pessimistic scenario for 2030 of the Aqueduct 4.0 Water Risk Atlas from the WRI.
+3 PreussenElektra's Isar 2 NPP operated until April 15, 2023, due to political decisions made in 2022, after which it ceased power production.
+4Based on the current overall water risks (baseline) of the Aqueduct 4.0 Water Risk Atlas from the World Resource Institute (WRI), query
+in November 2023.
+¹Areas accounting for less than 1 percent of total withdrawal are not displayed.
+2Proportion of E.ON's total water withdrawal.
+Water stress 20305
+→ TCFD
+Non-hazardous waste (metric kilotons)
+496.1
+381.3
+107.5
+170.7
+Recovered
+New hires²
+141.3
+162.2
+205.4
+E06-01
+Hazardous waste (metric kilotons)
+69,733
+2021
+2022
+69,378
+2023
+72,242
+Group employees (FTE) 1
+17.9
+17.3
+29.1
+Disposed
+DVFA/EFFAS
+410.1
+364.1
+467.0
+Recovered
+Employee Matters
+2021
+428.0
+Full-time equivalent (FTE)
+267
+74,866
+8Prior-year figures have been adjusted to reflect the market-based figure for Scope 3 emissions.
+Cash provided by operating activities of continuing operations
+37,691
+32,742
+38,773
+40,736
+38,895
+18
+16
+15
+9
+14
+as a percentage of sales
+6,421
+10,045
+4,753
+4,069
+4,762
+4,171
+5,515
+5,313
+2,965
+2023
+2022
+2021
+2020
+20193
+5,654
+7,2
+8,7
+5,3
+Baa2
+Baa2
+Baa2
+Moody's
+1,384
+1,331
+1,278
+1,225
+1,199
+Dividend payout
+0,53
+0,51
+0,49
+0,47
+0,46
+Dividend per share4 (€)
+0.20
+0.70
+1.80
+0.40
+0,68
+Earnings per share attributable to shareholders of E.ON SE (€)
+Stock and E.ON SE long-term ratings
+6.0
+8,7
+Economic net debt (at year-end)
+Baa2
+Equity ratio (%)
+operations5
+4,617
+5,186
+6,530
+3,418
+3,841
+4,866
+5,528
+11,782
+3,904
+4,019
+37,613
+17,990
+54,208
+24,569
+25,850
+1 Adjusted for discontinued operations.
+Total assets and liabilities
+Other liabilities and other
+Financial liabilities
+Provisions
+Current liabilities
+11,087
+14,0014
+10,954
+40,511
+17,247
+22,199
+43,4944
+Cash provided by operating activities of continuing
+Cash flow, investments, and financial ratios
+€ in millions
+Summary of Financial Highlights¹
+→ SASB Index
+→ SDG Index
+→ Boards
+→ GRI Index → NFS Index
+→ ESG Figures → EU Taxonomy
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+264
+= Contents Q Search ← Back
+³Figures for 2019 were retroactively adjusted for effects from the innogy purchase-price allocation and the recognition of failed-own-use transactions.
+4The presentation of the maturities of liabilities from derivative financial instruments was adjusted by €16.7 billion as of December 31, 2022, from non-current to current within the meaning of IAS 8.41 ff. This relates to energy
+procurement and sales contracts that are not classified as own-use contracts under IFRS 9 and are accounted for as commodity derivatives.
+2 Adjusted for non-operating effects.
+113,506
+134,009
+119,759
+95,385
+98,080
+28,130
+Cash-effective investments
+Baa2
+Standard & Poor's
+Fitch
+2.01
+E02-01
+113.028
+91.29
+73.41
+E03-01
+Greenhouse gas emissions (total CO2 equivalents in million
+metric tons, market-based)
+107.99
+86.81
+76.17
+E03-01
+2.88
+Greenhouse gas emissions (total CO2 equivalents in million
+metric tons, location-based)
+2022
+2023
+DVFA/EFFAS
+Climate protection¹
+Environment
+The audit levels of the KPIs that were part of the independent Sustainability Assurance or the audit of
+the consolidated financial statements can be found in the Combined Group Management Report as
+well as the Annexes to the Combined Group Management Report. The About This Report chapter
+explains how the respective KPIs are marked and with which audit level they were audited.
+In addition, since 2010 we have reported our KPIs in accordance with standards of the German
+Association for Financial Analysis and Asset Management (German abbreviation: "DVFA") and the
+European Federation of Financial Analysts Societies ("EFFAS"). KPIs that reflect these standards are
+indicated by the DVFA/EFFAS ID. KPIs that are particularly important to us are highlighted.
+We assess the effectiveness of our sustainability strategy and initiatives by monitoring key
+performance indicators ("KPIs"). Capital markets in particular want standardized ESG KPIs.
+Consequently, this report discloses KPIs on our ESG performance over three years.
+ESG Figures
+= Contents Q Search ← Back
+→ Financial Calendar and Imprint
+2021
+3.71
+E02-01
+3.46
+7Scope 3 emissions from purchased power and the combustion of natural gas sold to end users (energy sold to our residential and B2B
+customers), according to the GHG Scope 3 protocol. The emissions from distribution losses from energy sold to sales partners and the
+wholesale market are accounted for under our Scope 1 and Scope 2 emissions accordingly.
+6The external global warming potential ("GWP") sources used include the International Energy Agency ("IEA"), the IPCC AR5 report,
+Department for Business, Energy & Industrial Strategy ("BEIS", formerly DEFRA), the Naturvårdsverkets, the Greenhouse Gas Protocol, and
+the Överenskommelse Värmemarknadskommittén 2021. Furthermore, primary data from external travel service providers was used for the
+calculation.
+5The external global warming potential ("GWP") sources used are the International Energy Agency ("IEA") and the Association of Issuing
+Bodies ("AIB").
+4The external global warming potential ("GWP") sources used is the International Energy Agency ("IEA").
+3 Emissions from power and heat generation are divided into emissions from plants owned and operated by E.ON (Scope 1) and emissions
+from plants leased to, and operated by, customers (Scope 3). This improves E.ON's ability to manage its emissions and makes progress
+toward its targets more transparent.
+2The external global warming potential ("GWP") sources used are the Department for Business, Energy & Industrial Strategy ("BEIS",
+formerly DEFRA), the Naturvårdsverkets, the Greenhouse Gas Protocol, the Överenskommelse Värmemarknadskommittén 2021, and the
+IPCC AR5 report.
+¹For reasons of materiality, this figure includes all subsidiaries and generation facilities that are fully consolidated in E.ON's financial
+statement. Companies with fewer than ten employees do not have to be included if their activities have no material impact on the various
+Scope 1 to Scope 3 categories.
+Scope 3 (market-based)
+Scope 3 (location-based)³, 6, 7
+Scope 2 (location-based)4
+Scope 2 (market-based)5
+Scope 12,3
+103.58
+82.58
+65.23
+E02-01
+100.38
+80.55
+70.69
+E02-01
+5.73
+5.83
+6.17
+E02-01
+3.90
+3.38
+→ SDG Index → SASB Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+= Contents Q Search ← Back
+265
+7Core workforce does not include apprentices, working students, or interns. This figure reports full-time equivalents ("FTE").
+5Fully includes the Renewables segment from January 1, 2018, to September 18, 2019, and innogy's business in the Czech Republic from September 18, 2019, to October 30, 2020.
+6For the respective financial year; the 2023 figure is management's proposed dividend.
+3Figures for 2019 were retroactively adjusted for effects from the innogy purchase-price allocation and the recognition of failed-own-use transactions.
+4The presentation of the maturities of liabilities from derivative financial instruments was adjusted by €16.7 billion as of December 31, 2022, from non-current to current within the meaning of IAS 8.41 ff. This relates to energy
+procurement and sales contracts that are not classified as own-use contracts under IFRS 9 and are accounted for as commodity derivatives.
+2Adjusted for non-operating effects.
+72,242
+69,378
+69,733
+S01-01
+75,659
+BBB+
+BBB+
+BBB
+BBB
+BBB
+BBB
+BBB
+¹Adjusted for discontinued operations.
+Employees (at year-end)
+Employees
+→ Financial Calendar and Imprint
+The Climate Protection chapter contains more information.
+→ Independent Auditor's Report
+→ Boards
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+266
+In addition, E.ON discloses avoided emissions. This applies to the
+annual reporting for its green bonds, which includes disclosures on
+the metric tons of CO2e avoided by the projects funded. A green
+bond is a fixed-interest security whose issuance proceeds are used
+to fund infrastructure and energy-efficiency projects that yield
+measurable carbon savings. In 2023 E.ON issued three green
+bonds totaling €2.5 billion.
+E.ON's current climate metrics consist mainly of the emission
+figures for its carbon footprint categories (Scope 1, 2, and 3) and
+the measurement of progress toward its climate targets (see
+above). The climate targets defined in 2020 remain valid (see
+Climate Protection chapter). We monitor progress toward these
+targets on an annual basis for all relevant GHG categories. The
+aforementioned carbon management plan apportions our
+emission-reduction targets to the business units, while giving
+them the operational decision-making authority on how to achieve
+them.
+Metrics and Targets
+E.ON regularly monitors and assesses its non-financial, climate,
+and other sustainability risks and opportunities and their potential
+impact in the short, medium, and long term. In 2020 we integrated
+climate related risks into our Enterprise Risk Management system.
+In 2021 human rights risks in the supply chain, employee matters,
+social matters, and anti-corruption were integrated as well. Risk
+and sustainability managers at the units were actively involved in
+this process. The status of this process is presented to the E.ON
+Group Risk Committee on a regular basis. Our analyses of climate
+risks encompass physical risks (such as extreme weather and
+rising temperatures) as well as transitional risks (such as changes
+in consumer preferences, the regulatory environment, and carbon
+pricing). The Risks and Chances Report contains additional
+information.
+Risk Management
+Both climate change and the energy transition aimed at slowing it
+could create risks as well as opportunities for E.ON's business. A
+scenario analysis models how the key value drivers of E.ON and
+five of our business units might be affected under different
+scenarios through 2050. The analysis consisted of three different
+climate scenarios: a conservative, ambitious, and fully committed
+climate policy. Subject experts analyzed the implications, which
+were used to conduct a risk-and-opportunity assessment. It shows
+that we have a robust business model and great opportunities for
+decarbonization for every scenario. E.ON's high proportion of
+regulated business makes it robust, while massive electrification
+and decarbonization offer major opportunities for the Company's
+business model. In view of these important findings, we intend to
+review of the scenario analysis on an annual basis. We again began
+a qualitative scenario analysis at the end of 2023.
+E.ON's current climate strategy includes emission-reduction
+targets for 2030, 2040 and 2050. In 2020 E.ON set new climate
+targets and intends to be climate-neutral by 2040 (Scope 1 and 2).
+E.ON's business operations cause carbon emissions. Yet our two
+core businesses-Energy Networks and Customer Solutions-also
+help millions of customers avoid emissions. They make the energy
+system more efficient and increase the proportion of renewables in
+the energy mix.
+Strategy
+sustainability issues, establishing a sustainable mindset, and
+embedding it in business processes. The Supervisory Board is
+regularly informed about material sustainability topics by its Audit
+and Risk Committee, by its Innovation and Sustainability
+Committee, and by the Management Board. As part of the carbon
+management plan introduced in 2022, emission reduction paths
+were defined for the business units to implement the Group's
+climate targets at the local level. Our units conduct annual controls
+to ensure that we are on track to meet our targets.
+The importance of climate change for E.ON is reflected in our
+governance. The Management Board has overall responsibility for
+the sustainability strategy, including the climate targets. It is
+informed on a quarterly basis by the Chief Sustainability Officer
+("CSO") about important initiatives and developments as well as
+KPIs. The CSO manages and monitors all of the Company's
+sustainability activities and chairs the Sustainability Council. The
+council is E.ON's most important forum for discussing
+Governance
+> In addition, the TCFD reporting is supported by additional
+information in the publication "On course for net zero-Supporting
+paper for E.ON's decarbonization strategy and climate-related
+disclosures."<
+The TCFD's recommendations provide important guidance for
+reporting. Established in 2015, the TCFD aims to develop
+consistent, comparable, and accurate climate-related financial risk
+disclosures that companies can use to provide information to
+investors, lenders, insurers, and other stakeholders. E.ON became
+an official TCFD supporter in 2019, which marks the start of our
+TCFD reporting below. Going forward, we will continue to expand
+our TCFD reporting. One consequence of TCFD reporting is that
+we have developed a qualitative scenario analysis to assess how
+our businesses might be affected under different climate
+scenarios.
+structure.
+E.ON aims for its business to become continually more
+sustainable. This includes making steady progress toward our
+climate targets, effectively managing climate-related risks, seizing
+climate-related opportunities that fit with our corporate strategy,
+and reporting transparently on all these matters. To ensure that
+we do so, we have put in place a highly effective governance
+Financial Disclosures ("TCFD") O
+Task Force on Climate-related
+= Contents Q Search ← Back
+→ SASB Index
+→ SDG Index
+→ Independent Assurance Practitioner's Report
+→ TCFD → ESG Figures → EU Taxonomy → GRI Index → NFS Index
+4,6
+E.ON Integrated Annual Report 2023
+4.5
+→ Boards
+→ SDG Index
+→ SASB Index
+→ Financial Calendar and Imprint
+Summary of Financial Highlights¹
+€ in millions
+Sales and earnings
+Sales
+20193
+2020
+2021
+2022
+2023
+41,284
+60,944
+77,358
+115,660
+93,686
+Adjusted EBITDA²
+5,564
+6,905
+7,889
+8,059
+9,370
+Adjusted EBIT²
+3,220
+3,776
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD → ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+Retail and Customer Solutions, Market Excellence, Hydrogen,
+Energy Management, Marketing
+→ E.ON Energie Deutschland GmbH² (Chairman)
+��� E.ON Energie A.S.² (Chairman)
+→ E.ON Italia S.p.A.2
+→ Essent N.V.2 (Chairman)
+→ E.ON Romania S.R.L.2 (Chairman)
+→ Zuid Nederlandse Theatermaatschappij B.V. (Chairman)
+Dr. Victoria Ossadnik
+Born in 1968 in Frankfurt am Main, Germany
+Member of the Management Board since 2021
+Digital Technology, Consulting, Cyber Security, Innovation
+→ E.ON Digital Technology GmbH² (Chairman)
+→ Linde plc.1
+4,723
+Dr. Marc Spieker
+Member of the Management Board since 2017
+Finance, Investor Relations, Mergers & Acquisitions, Accounting,
+Controlling, Risk Management, Tax, S4 Transformation
+→ Süwag Energie AG²
+→ Westenergie AG2
+→ Nord Stream AG
+Unless otherwise indicated, information is as of December 31, 2023, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Directorships/memberships in other statutory supervisory boards.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+"Listed company.
+E.ON Group directorships/memberships.
+= Contents Q Search ← Back
+263
+E.ON Integrated Annual Report 2023
+Born in 1975 in Essen, Germany
+Member of the Management Board since 2021
+5,197
+Net income/Net loss
+22,294
+19,901
+39,122
+52,240
+30,472
+Total assets
+98,080
+95,385
+119,759
+134,009
+113,506
+Equity
+13,248
+9,055
+17,889
+21,867
+19,970
+Capital stock
+2,641
+2,641
+2,641
+2,641
+2,641
+Minority interests without controlling influence
+4,149
+4,130
+5,836
+Current assets
+83,034
+81,769
+80,637
+1,792
+1,270
+5,305
+2,242
+760
+Net income/Net loss attributable to shareholders of E.ON SE
+1,550
+1,017
+4,691
+1,831
+517
+Adjusted net income²
+1,526
+6,387
+1,638
+2,728
+3,068
+Value measures
+ROCE (%)
+8,3
+6,2
+7,8
+8,8
+10,7
+Asset and capital structure
+Non-current assets
+75,786
+75,484
+2,503
+Born in 1964 in Rotterdam, Netherlands
+Patrick Lammers
+→ Essener Wirtschaftsförderungsgesellschaft mbH
+→ Szczecińska Energetyka Cieplna Sp. z o.o.²
+Dr. Karen de Segundo (until May 17, 2023)
+Attorney
+Elisabeth Wallbaum
+(until May 17, 2023, again since June 5, 2023)
+Expert, SE Works Council E.ON SE and E.ON Group Works Council
+Deborah Wilkens
+Management consultant
+Axel Winterwerber
+Chairman of the SE Works Council, E.ON SE;
+Chairman of the General Works Council, Süwag AG;
+Chairman of the Works Council Frankfurt Region,
+Member of the SE Works Council E.ON SE
+→ E.ON Pensionsfonds AG²
+→ Süwag AG²
+→ Syna GmbH²
+Ewald Woste (until May 17, 2023)
+Management consultant
+→ Bayernwerk AG² (until March 31, 2023)
+→ GASAG AG (until April 24, 2023)
+→ STEAG GmbH, Chairman (until Decemeber 31, 2023)
+→ STEAG Power GmbH, Chairman (since May 15, 2023 until
+December 31, 2023)
+→ Iqony GmbH, Chairman (since June 14, 2023 until December
+31, 2023)
+→ Energie Steiermark AG (until March 3, 2023)
+Unless otherwise indicated, information is as of December 31, 2023, or as of the date on which membership in the E.ON SE Supervisory Board ended.
+→ Directorships/memberships in other statutory supervisory boards.
+→ Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.
+"Listed company.
+Deputy Chairman of the Group Works Council, E.ON SE;
+Chairman of the General Works Council, E.DIS AG;
+Chairman of the East Region Works Council, E.DIS Netz GmbH
+→ E.DIS AG²
+Chairman of the SE Works Council, E.ON SE;
+Fred Schulz (until May 17, 2023)
+→ KELAG-Kärntner Elektrizitäts-AG
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+→ Independent Assurance Practitioner's Report
+→ Independent Auditor's Report
+→ TCFD → ESG Figures → EU Taxonomy
+→ GRI Index
+→ NFS Index
+→ Boards
+→ SDG Index
+→ SASB Index
+= Contents Q Search ← Back
+Nadège Petit (since May 17, 2023)
+E.ON Group directorships/memberships.
+Chief Innovation Officer, Executive Vice President, of Schneider
+Electric Industries SAS
+Deputy Chairman of the SE Works Council of E.ON SE;
+Deputy Chairman of the Group Works Council of E.ON SE;
+Chairman of the Group Works Council of envia Mitteldeutsche
+Energie AG;
+Chairman of the joint general works council and the joint
+Halle/Kabelsketal works council of envia Mitteldeutsche Energie
+AG, MITGAS Mitteldeutsche Gasbedarf GmbH, Mitteldeutsche
+Netzgesellschaft Strom mbH and Mitteldeutsche Netzgesellschaft
+Gas mbH
+→ envia Mitteldeutsche Energie AG2
+Andreas Schmitz
+Management consultant
+→ Scheidt & Bachmann GmbH (Chairman)
+Dr. Rolf Martin Schmitz
+Former Chief Executive Officer RWE AG
+→ TÜV Rheinland AG
+→ Encavis AG¹ (Chair, since June 1, 2023)
+→ Jaeger Grund GmbH & Co. KG (Jaeger Group, Chair)
+→ Kärntner Energieholding Beteiligungs GmbH
+René Pöhls
+261
+E.ON Integrated Annual Report 2023
+Other Information
+E.ON Integrated Annual Report 2023
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Boards
+→ SDG Index
+→ SASB Index
+Management Board (and Information on Other Directorships)
+Dr.-Ing. Leonhard Birnbaum
+Born in 1967 in Ludwigshafen, Germany
+Chief Executive Officer of the Management Board since 2021
+Member of the Management Board since 2013
+= Contents Q Search ← Back
+Communication & Policy, Auditing, Strategy, Human Ressources,
+Occupational Safety & Environmental Protection, Law &
+Compliance and Preussen Elektra GmbH
+→ Nord Stream AG
+Dr. Thomas König
+Born in 1965 in Finnentrop, Germany
+Member of the Management Board since 2018
+Energy Networks (including Turkey), Procurement
+→ Avacon AG2 (Chairman)
+→ envia Mitteldeutsche Energie AG² (until Decemeber 31, 2023)
+→ Westenergie AG2
+→ Rheinenergie AG
+→ Stadtwerke Essen AG
+→ E.ON Česká republika s.r.o.2 (Chairman)
+→EG.D a.s.2 (Chairman)
+→ E.ON Hungária Zrt.2 (Chairman)
+→ Georgsmarienhütte Holding GmbH (Chairman)
+5,944
+262
+Dr. Karl-Ludwig Kley, Chairman (until May 17, 2023)
+Ulrich Grillo, Deputy Chairman (since May 17, 2023)
+Andreas Schmitz (since May 17, 2023)
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Independent Auditor's Report
+→ TCFD
+→ ESG Figures
+→ EU Taxonomy → GRI Index
+→ Independent Assurance Practitioner's Report
+→ NFS Index
+→ Boards
+→ SDG Index → SASB Index
+→ Financial Calendar and Imprint
+Supervisory Board Committees
+Executive Committee
+Erich Clementi, Chairman (since May 17, 2023)
+Dr. Karl-Ludwig Kley, Chairman (until May 17, 2023)
+Ulrich Grillo
+René Pöhls (since May 17, 2023)
+Dr. Karen de Segundo (until May 17, 2023)
+Christoph Schmitz (until December 31, 2023), Deputy Chairman
+Dr. Rolf Martin Schmitz (since May 17, 2023)
+Frank Werneke (since January 16, 2024), Deputy Chairman
+Axel Winterwerber (since March 14, 2023)
+Audit and Risk Committee
+Andreas Schmitz, Chairman
+René Pöhls, Deputy Chairman (since May 17, 2023)
+Katja Bauer (since May 17, 2023)
+Fred Schulz, Deputy Chairman (until May 17, 2023)
+Ulrich Grillo (until May 17, 2023)
+Anke Groth (since June 5, 2023)
+Elisabeth Wallbaum
+(until May 17, 2023, again since June 5, 2023)
+Deborah Wilkens
+Innovation and Sustainability Committee
+Klaus Fröhlich, Chairman
+(until May 17, 2023, again since June 5, 2023)
+Stefan May, Deputy Chairman
+(until May 17, 2023, again since June 5, 2023)
+Dr. Karen de Segundo (until May 17, 2023)
+Eugen-Gheorghe Luha (until May 17, 2023)
+Miroslav Pelouch (until May 17, 2023)
+Nadège Petit (since May 17, 2023)
+Axel Winterwerber (since May 17, 2023)
+Ewald Woste (until May 17, 2023)
+Nomination Committee
+Erich Clementi, Chairman (since May 17, 2023),
+Deputy Chairman (until May 17, 2023)
+Fred Schulz (until May 17, 2023)
+5,856
+Non-current liabilities
+58,982
+DVFA/ EFFAS
+Customers
+Occupational Health and Safety
+= Contents Q Search ← Back
+→ SASB Index
+→ SDG Index
+→ GRI Index → NFS Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy
+→ ESG Figures
+→ TCFD
+→ Independent Auditor's Report
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+269
+The Working Conditions and Employee Development chapter contains more information.
+3 Compared to the total number of executives.
+¹Core workforce; includes board members, and managing directors but excludes apprentices, interns, and working students.
+2Total workforce; includes board members, managing directors, apprentices, interns and working students.
+The Climate Protection and Sustainable Products and Services chapters contain more information.
+31
+30
+49
+49
+20
+21
+2023
+2022
+2021
+DVFA/EFFAS
+2.1
+2.2
+Employee LTIF²
+9.7
+12.2
+13.8
+V11-02
+Installed smart energy meters (millions)
+2.3
+2.3
+2.0
+38.81
+35.9
+222
+34.7
+2.6
+2.9
+2.8
+Contractor TRIF
+Employee TRIF
+Number of power and gas customers
+2.5
+2.6
+2.4
+Combined TRIF¹
+2021
+2022
+2023
+(millions)
+> 50 years
+8.0
+18.0
+1,782
+1,775
+Severely disabled employees in Germany (headcount)²
+Owned generation by energy source (percentages)
+Natural gas/oil¹
+Power generation
+5,3
+5.0
+4.5
+Severely disabled employees in Germany (percentages)²
+21
+23
+24
+S10-01
+1,948
+Female executives (percentages)³
+31
+32
+S10-01
+Female workforce (percentages)²
+5.8
+5,6
+5,6
+Apprentice ratio in Germany (percentages)
+2,308
+2,213
+2,365
+Apprentices in Germany (headcount)
+The Environmental Management chapter contains more information.
+32
+2.1
+DVFA/ EFFAS
+2022
+42.0
+¹Attributable share of electricity from combined heat and power plants for E.ON's district heating networks.
+2E.ON's nuclear generation ended in 2023 due to Germany's phaseout of nuclear power.
+Other (includes biomass, wind and solar)
+31-50 years
+< 30 years
+0.1
+0.0
+1.0
+87.1
+74.0
+42.0
+Coal¹
+Nuclear²
+2023
+S03-01
+4.8
+8.0
+15.0
+42
+42
+42
+Average age (in years)²
+E26-01
+119
+110
+115
+Nationalities (number)²
+2021
+Age distribution (percentages)²
+6.1
+Installed smart heat meters (thousands)
+n.a.
+102.8
+69.6
+52.4
+46.9
+73.8
+Total
+Un-
+scheduled
+Scheduled
+2023
+270
+The Security of Supply chapter contains more information.
+³Increase in 2023 (2022 data) due to several days of extreme weather conditions and storms.
+2Including influence of force majeure.
+1Totals may deviate due to rounding.
+Poland³
+Romania
+Czech Republic²
+Hungary
+Sweden 2,3
+Germany
+Interruptions per minute
+8,506
+13,340
+22,129
+12.3
+18.3
+22.3
+93.4
+285.5
+71.6
+134.4
+61,761
+61,359
+57,934
+55,923
+Provisions
+20,669
+21,384
+19,449
+14,968
+14,013
+Financial liabilities
+27,572
+29,423
+3.8
+28,131
+30,823
+Other liabilities and other
+10,741
+E.ON Integrated Annual Report 2023
+67.7
+70.2
+51.4
+183.8
+78.0
+310.0
+143.4
+84.2
+262.2
+28,965
+2.3
+10.2
+CAIDI Power¹
+³In previous year's coverage rate reported the share of business units with ISO 45001 certification in percentage. Therefore, comparability
+with 2021 figures is limited.
+²Lost-time injury frequency measures work-related accidents resulting in lost time per million hours of work.
+¹Total recordable injury frequency measures the number of reported fatalities and occupational injuries and illnesses per million hours of
+work. It includes injuries that occur during work-related travel that result in lost time or no lost time and/or that lead to medical treatment,
+restricted work, or work at a substitute work station.
+The Customer Satisfaction and Sustainable Products and Services chapters contain more information.
+¹Prior-year figures have been adjusted due to the harmonization of npower in the United Kingdom.
+96.5
+96.0
+96.3
+Employee health rate (percentages)4
+4
+3
+1
+Employee and contractor fatal accidents
+4Includes board members, managing directors, and apprentices.
+375,879 242,402 284,256
+Reduction of CO2e emissions at commercial and industrial
+94.0
+85.0
+83.0
+Share of employees working at business units certified by ISO
+45001 (percentages)³
+V06-01 chapter.
+Customer loyalty development
+2.0
+2.0
+1.6
+Contractor LTIF²
+Visit the Customer Satisfaction
+n.a.
+customers in Germany (metric tonnes of CO2e)
+94.4
+Energy networks
+Community involvement
+8.6
+16.0
+12.2
+2021
+2022
+2023
+DVFA/EFFAS
+The Energy Networks chapter contains more information.
+3.6
+3.51
+3.5
+148
+146
+The Occupational Health and Safety contains more information.
+147
+1,107
+1,110
+Power system length (thousand kilometers)
+Gas system length (thousand kilometers)
+Power distribution losses (percentage)
+¹Prior-year figure was adjusted.
+2021
+2022
+2023
+DVFA/EFFAS
+The Community Involvement chapter contains more information.
+hours)
+Volunteer activities of E.ON employees (number of volunteer
+Total community investments (€ in millions)
+Strategic community involvement (€ in millions)
+Corporate giving (€ in millions)
+1,115
+13,779
+→ SASB Index
+393
+N/EL
+N/EL
+N/EL
+N/EL
+17%
+16,214
+CCM 4.9
+0%
+Y
+Y
+Y
+Y
+Y
+N/EL
+Y
+N/EL
+N/FL
+N/EL
+N/EL
+N/EL
+Y
+0%
+1
+CCM 4.5
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+44
+CCM 4.19
+0%
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+67
+CCM 4.15
+13%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+CCM 9.3
+Professional services related to energy performance of buildings
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+CCM 8.2
+Data-driven solutions for GHG emissions reductions
+N/EL
+N/EL
+0%
+N/EL
+N/EL
+Y
+0%
+CCM 7.5
+CCM 7.6
+Installation, maintenance and repair of renewable energy technologies
+Installation, maintenance and repair of instruments and devices for measuring, regulation and contr. energy performance of
+buildings
+CCM 6.15
+CCM 7.4
+Installation, maintenance and repair of charging stations for electric vehicles in buildings
+Infrastructure enabling low-carbon road transport and public transport
+Construction, extension and operation of waste water collection and treatment/Urban waste water treatment
+Infrastructure for personal mobility, cycle logistics
+T/-
+activity"4 activity"4
+E/-
+N/EL
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+4
+CCM 4.1
+0%
+0%
+0%
+0%
+0%
+N/EL
+18%
+0%
+0%
+0%
+0%
+0%
+19%
+19%
+17,655
+17,406
+Of which Enabling
+Revenues of environmentally sustainable activities (Taxonomy-aligned) (A.1)
+N/EL
+N/EL
+N/EL
+19%
+"enabling "transitional
+Y
+Y
+N/EL
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+Y
+N/EL
+N/EL
+N/EL
+0%
+Y
+0%
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/FL
+Y
+N/EL
+N/EL
+Y
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+E
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+E
+0%
+Y
+N/EL
+Y
+Y
+Y
+Y
+Y
+20 ✓ NEL NEL WEL NEL NEL ✓ V V V V V ✓ of
+F
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+4
+CCM 4.21
+0%
+Y
+Y
+Y
+Y
+N/EL
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+46
+CCM 4.20
+0%
+Y
+Y
+Y
+N/EL
+Y
+Y
+0%
+༢ མཚོཎཌ་ བྷུཧྨབྷཱཝ་
+CCM 6.13
+WTR 2.2
+CCM 5.3/
+WTR 2.1
+CCM 5.2
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+45
+CCM 4.24
+CCM 4.24
+Y
+Y
+Y
+Y
+Y
+%
+Y;N
+Y;N
+EL:N/EL5
+EL:N/EI5
+EL:N/EL5
+EL:N/EL5
+A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+EL;N/EL5
+0%
+Of which Transitional
+E
+68%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+0%
+0%
+0%
+0%
+0%
+EL:N/EL5
+CCM 4.14
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+2
+CCM 4.16
+N/EL
+N/EL
+N/EL
+N/EL
+Transmission and distribution networks for renewable and low-carbon gases
+N/EL
+0%
+3
+CCM 4.15
+Installation and operation of electric heat pumps
+District heating/cooling distribution
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+1
+EL
+Production of heat/cool from renewable non-fossil gaseous and liquid fuels
+0%
+63%
+N/EL
+Y
+N/EL
+Y
+0%
+5
+WTR 2.1
+CCM 5.1/
+1%
+Y
+Y
+Y
+Y
+N/EL
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+1%
+7
+CCM 4.24
+Construction, extension and operation of water collection, treatment and supply systems / Water supply
+Production of heat/cool from bioenergy
+0%
+Y
+Y
+N/EL
+63%
+N/EL
+Y
+797
+Of which Enabling
+71%
+Y
+Y
+Y
+Y
+Y
+Y
+0%
+0%
+0%
+0%
+Y
+0%
+67%
+855
+✓ ✓ NE NEL WEL NEL NEL V Y v v v v
+CCM 7.5
+CCM 7.6
+CCM 6.13
+OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
+Installation, maintenance and repair of instruments and devices for measuring, regulation and contr. energy performance of
+buildings
+Infrastructure for personal mobility, cycle logistics
+Installation, maintenance and repair of renewable energy technologies
+Y
+Y
+Y
+Y
+67%
+CCM 4.23
+2
+0%
+A. Taxonomy-eligible activities
+Economic Activities
+Proportion of
+Taxonomy
+aligned (A.1) or
+Q Search ← Back
+= Contents
+DNSH criteria ('Does not significantly harm')
+Significant contribution criteria
+→ SDG Index → SASB Index
+→ Boards
+2023
+→ NFS Index
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index
+→ Independent Auditor's Report
+→ TCFD → ESG Figures
+A.1. Environmentally sustainable activities (taxonomy-aligned)
+Financial year 2023
+→Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+273
+SEL - Taxonomy eligible activity for the relevant objective; N/EL - taxonomy non-eligible activity for the relevant objective.
+4E - Enabling activity; T - Transitional activity.
+¹Climate Change Mitigation: CCM; Climate Change Adaptation: CCA; Water: WTR; Circular Economy: CE; Pollution Prevention and Control: PPC; Biodiversity and ecosystems: BIO.
+2Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective; N/EL- not eligible, Taxonomy non-eligible activity for the relevant environmental objective.
+3y Yes: N - No.
+100%
+31%
+1,274
+5
+EU Taxonomy Revenues
+TOTAL
+Electricity generation using solar photovoltaic technology
+Transmission and distribution of electricity
+2022
+safeguards³
+Biodiversity²
+Minimum revenues, year
+Circular
+Economy²
+Y;N
+Pollution²
+Y;N
+Water²
+Y;N
+Y;N
+Climate change Climate change
+Economy Biodiversity² mitigation² adaptation²
+Y;N;N/EL Y;N;N/EL
+Y;N
+Pollution²
+Y;N;N/EL
+Water²
+Y;N;N/EL
+Y;N;N/EL
+Circular
+Electricity generation from hydropower
+Revenues, year Climate change Climate change
+2023 mitigation² adaptation²
+Y;N;N/EL
+in millions
+Revenues
+Code¹
+Category
+Category
+eligible (A.2)
+Proportion of
+Renewal of water collection, treatment and supply systems / Water supply
+Production of heat/cool from bioenergy
+Production of heat/cool from solar thermal heating
+Cogeneration of heat/cool and power from bioenergy
+Cogeneration of heat/cool and power from renewable non-fossil gaseous and liquid fuels
+District heating/cooling distribution
+%
+OpEx of Taxonomy-non eligible activities
+B. Not taxonomy-eligible activities
+73%
+CCM 4.31
+Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+1%
+7
+CCM 4.30
+High-efficiency co-generation of heat/cool and power from fossil gaseous fuels
+N/EL
+6
+N/EL
+N/EL
+N/EL
+EL
+0%
+5
+CCM 4.24
+Production of heat/cool from bioenergy
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+0%
+EL
+N/EL
+2%
+1%
+0%
+1%
+0%
+0%
+0%
+0%
+0%
+0%
+0%
+0%
+69%
+69%
+881
+A. OpEx of Taxonomy-eligible activities (A.1+A.2)
+0%
+0%
+0%
+0%
+0%
+2%
+2%
+26
+OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)
+N/EL
+N/EL
+N/EL
+N/EL
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Y
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Proportion of revenue/Total revenue
+Aligned per objective
+Eligible per objective
+69%
+Aligned per objective
+67%
+Eligible per objective
+73%
+71%
+CCM¹
+Aligned per objective
+Proportion of OpEx/Total OpEx
+Proportion of CapEx/Total CapEx
+2023
+= Contents Q Search Back
+→ SDG Index → SASB Index
+→ Boards
+Eligible per objective
+→ Financial Calendar and Imprint
+→ GRI Index
+→ ESG Figures → EU Taxonomy
+→ TCFD
+→ Summary of Financial Highlights
+→ Independent Assurance Practitioner's Report
+→ Independent Auditor's Report
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+274
+SEL - Taxonomy eligible activity for the relevant objective; N/EL - taxonomy non-eligible activity for the relevant objective.
+4E - Enabling activity; T - Transitional activity.
+¹Climate Change Mitigation: CCM; Climate Change Adaptation: CCA; Water: WTR; Circular Economy: CE; Pollution Prevention and Control: PPC; Biodiversity and ecosystems: BIO.
+2Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective; N/EL - not eligible, Taxonomy non-eligible activity for the relevant environmental objective.
+³y - Yes; N - No.
+→ NFS Index
+100%
+19%
+CCA²
+BIO6
+0%
+0%
+0%
+0%
+0%
+0%
+PPC5
+0%
+0%
+0%
+0%
+0%
+19%
+0%
+0%
+0%
+0%
+0%
+1%
+1%
+WTR3
+0%
+0%
+0%
+0%
+0%
+0%
+CE4
+0%
+81%
+TOTAL
+EL
+0%
+1
+CCM 6.13
+Infrastructure for personal mobility, cycle logistics
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+40
+N/EL
+CCM 4.31
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+31
+CCM 4.30
+High-efficiency co-generation of heat/cool and power from fossil gaseous fuels
+N/EL
+N/EL
+N/EL
+Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system
+75,558
+93,686
+N/EL
+N/EL
+Revenues of Taxonomy-non eligible activities
+B. Not taxonomy-eligible activities
+13%
+0%
+0%
+0%
+0%
+0%
+0%
+0%
+0%
+0%
+0%
+N/EL
+0%
+19%
+18,128
+A. Revenues of Taxonomy-eligible activities (A.1+A.2)
+0%
+0%
+0%
+0%
+0%
+1%
+1%
+473
+Revenues of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)
+N/EL
+19%
+N/EL
+0%
+0%
+→ Financial Calendar and Imprint
+→ SDG Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+.
+1
+E.ON Integrated Annual Report 2023
+1
+1
+71
+CapEx Template 3: Taxonomy-aligned economic activities (numerator)
+276
+8,049
+5,734
+71
+5,734
+Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
+Total applicable KPI
+8
+7
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+6
+.
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+5
+I
+8,049
+.
+= Contents Q Search Back
+Climate change
+mitigation (CCM)
+5,734
+Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI
+Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI
+8
+7
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+6
+.
+1
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+5
+1
+I
+in % € in millions
+Amount and proportion (in monetary amounts and as percentages)
+.
+4
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+3
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+2
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+1
+in % € in millions
+€ in millions
+Economic activities
+Row
+CCM + CCA
+Climate change
+adaptation (CCA)
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+0%
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+4
+The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as
+hydrogen production from nuclear energy, as well as their safety upgrades.
+The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes
+such as hydrogen production, as well as their safety upgrades, using best available technologies.
+The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste
+from the fuel cycle.
+Nuclear energy related activities
+3
+2
+1
+Row
+CapEx Template 1: Nuclear and fossil gas related activities
+→ Financial Calendar and Imprint
+→ SDG Index → SASB Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+Row
+→ TCFD
+→ Declaration of the Management Board
+= Contents Q Search ← Back
+Other Information
+E.ON Integrated Annual Report 2023
+275
+6Biodiversity and ecosystems: BIO.
+5Pollution Prevention and Control: PPC.
+4Circular Economy: CE.
+3Water: WTR.
+2Climate Change Adaptation: CCA.
+¹Climate Change Mitigation: CCM.
+0%
+0%
+→ Summary of Financial Highlights
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Fossil gas related activities
+The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
+3
+1
+1
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+2
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+1
+in %
+in % € in millions
+in % € in millions
+€ in millions
+Economic activities
+Row
+4
+Climate change
+adaptation (CCA)
+CCM + CCA
+Amount and proportion (in monetary amounts and as percentages)
+Yes
+Yes
+No
+Yes¹
+No
+No
+CapEx Template 2: Taxonomy-aligned economic activities (denominator)
+The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
+¹E.ON's nuclear generation ended in April 2023 due to Germany's phaseout of nuclear power.
+6
+The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
+5
+Climate change
+mitigation (CCM)
+N/EL
+EL
+0%
+20
+20
+15
+20
+7
+Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator
+of the applicable KPI
+82
+19
+64
+20
+62
+15
+82
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+64
+8
+Total amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI
+129
+100
+129
+100
+CapEx Template 5: Taxonomy non-eligible economic activities
+1
+.
+1
+€ in millions
+in %
+Row
+19
+Economic activities
+6
+11
+Amount and proportion (in monetary amounts and as percentages)
+Climate change
+mitigation (CCM)
+Climate change
+adaptation (CCA)
+in % € in millions
+in %
+CCM + CCA
+Row
+Economic activities
+€ in millions
+in % € in millions
+1
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+2
+21
+3
+5
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+.
+27
+27
+21
+24
+27
+I
+1
+4
+= Contents Q Search ← Back
+1
+2
+OpEx Template 1: Nuclear and fossil gas related activities
+Row
+1
+2
+3
+Nuclear energy related activities
+The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste
+from the fuel cycle.
+The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes
+such as hydrogen production, as well as their safety upgrades, using best available technologies.
+The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as
+hydrogen production from nuclear energy, as well as their safety upgrades.
+Row
+Fossil gas related activities
+4
+The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
+→ Financial Calendar and Imprint
+5
+6
+OpEx Template 2: Taxonomy-aligned economic activities (denominator)
+Amount and proportion (in monetary amounts and as percentages)
+CCM + CCA
+Row
+Economic activities
+€ in millions
+in % € in millions
+Climate change
+mitigation (CCM)
+Climate change
+adaptation (CCA)
+in % € in millions
+in %
+1
+The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
+The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
+¹E.ON's nuclear generation ended in April 2023 due to Germany's phaseout of nuclear power.
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+→ SDG Index → SASB Index
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+3
+4
+5
+6
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+7
+Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
+8
+Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
+→ Boards
+278
+.
+2,187
+100
+2,187
+100
+E.ON Integrated Annual Report 2023
+4
+3
+Other Information
+= Contents Q Search Back
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ TCFD
+1
+→ SASB Index
+→ SDG Index
+→ Boards
+Transmission and distribution of electricity
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+1
+CCM 4.7
+Electricity generation from renewable non-fossil gaseous and liquid fuels
+0%
+N/EL
+CCM 4.9
+N/EL
+N/EL
+N/EL
+EL
+0%
+13
+CCM 4.5
+Electricity generation from hydropower
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+0%
+188
+EL
+6
+CCM 4.19
+Cogeneration of heat/cool and power from renewable non-fossil gaseous and liquid fuels
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+36
+CCM 4.16
+Installation and operation of electric heat pumps
+0%
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+0%
+112
+CCM 4.14
+Transmission and distribution networks for renewable and low-carbon gases
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+46
+CCM 4.1
+Electricity generation using solar photovoltaic technology
+Y
+Y
+Y
+E
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+100
+Y
+5,734
+5,734
+100
+277
+1
+in %
+.
+1
+E.ON Integrated Annual Report 2023
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+CapEx Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities
+100
+Y
+Y
+Y
+EL;N/EL
+EL:N/EL5
+EL;N/EL5
+EL;N/EL5
+EL;N/EL5
+EL:N/EL5
+A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
+T
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+0%
+0%
+Of which Transitional
+E
+13%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+13%
+2
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+5%
+F
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+Y
+1%
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+1%
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+1%
+59
+6%
+Y
+Y
+50
+62%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+4
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+0%
+E
+0%
+N/EL
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+57%
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+Y
+Y
+Y
+N/EL
+Y
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+Y
+N/EL
+Y
+1%
+0%
+Y
+Y
+Y
+Y
+Y
+N
+Y
+N/EL
+N/EL
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+26
+1%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+1%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+34
+0%
+.
+N/EL
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+Y
+0%
+0%
+Y
+Y
+Y
+Y
+Y
+N/EL
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+Y
+Y
+Y
+100
+Y
+0%
+N/EL
+N/EL
+7
+8
+Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
+Total applicable KPI
+855
+67
+855
+1,274
+1,274
+279
+.
+.
+67
+I
+I
+I
+I
+E.ON Integrated Annual Report 2023
+.
+No
+No
+Yes¹
+No
+Yes
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Yes
+6
+Other Information
+0
+0
+160
+137
+292
+0
+Contributions to political parties (percentages)³
+15,98
+19,11
+17,76
+Procurement volume in countries with corruption risks (percentages)¹
+Number of compliance notices²
+2021
+2022
+2023
+DVFA/EFFAS
+Compliance
+→ SDG Index → SASB Index
+→ Boards
+→ GRI Index → NFS Index
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy
+Governance
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+¹Countries with less than 60 points in Transparency International's Corruption Perception Index.
+²Cases recorded at Corporate Functions that resulted in investigations and were not subsequently found to be false reports.
+3The E.ON Code of Conduct forbids donations to political parties, candidates, and incumbents.
+Other Information
+→ Summary of Financial Highlights
+7
+8
+Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI
+Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI
+280
+.
+1
+.
+I
+in % € in millions
+1
+855
+100
+855
+100
+855
+855
+100
+100
+I
+1
+in %
+.
+1
+E.ON Integrated Annual Report 2023
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+→ Declaration of the Management Board
+6
+5
+→ TCFD
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Boards
+→ SDG Index
+→ SASB Index
+→ Financial Calendar and Imprint
+OpEx Template 3: Taxonomy-aligned economic activities (numerator)
+= Contents Q Search Back
+Amount and proportion (in monetary amounts and as percentages)
+Climate change
+adaptation (CCA)
+Climate change
+mitigation (CCM)
+CCM + CCA
+Row
+Economic activities
+€ in millions
+in % € in millions
+1
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+2
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+3
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+4
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+The Compliance and Anticorruption chapter contains more information.
+Supplier Management
+DVFA/ EFFAS
+4.548
+CCM 4.9
+CCM 4.6
+CCM 4.5
+CCM 4.3
+CCM 4.1
+T/-
+E/-
+Category
+"enabling "transitional
+activity4 activity"4
+Category
+%
+CapEx, year
+2022
+Minimum
+safeguards³
+Y;N
+Y;N
+Biodiversity²
+Circular
+Economy²
+Y;N
+Pollution²
+Y;N
+Water²
+Y;N
+Climate change Climate change
+mitigation² adaptation²
+Y;N
+Y;N
+Biodiversity²
+Y;N;N/EL
+Circular
+Economy
+Y;N;N/EL
+Y;N;N/EL
+CCM 4.10
+Y;N;N/EL Y;N;N/EL
+CCM 4.14
+CCM 4.19
+N/EL
+Y
+0%
+1%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+1%
+ཁྱུ སྐ་ ག ་ ཧྨ⌘ ⊕ རྞ་སྐ སྙ⌘ང སྐྱུལཧྨ མྦྷ སྱཱ ® ཁ
+ССМ 5.1 /
+CCM 4.24
+CCM 4.23
+CCM 4.22
+CCM 4.20
+CCM 4.15
+Pollution²
+Water²
+eligible (A.2)
+Economic Activities
+Financial year 2023
+EU Taxonomy Investments
+EU Taxonomy
+Annexes to the Management Report
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ TCFD
+→ Independent Auditor's Report
+→ Summary of Financial Highlights
+→Financial Calendar and Imprint
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+271
+= Contents Q Search ← Back
+The Human Rights and Supply Chain Management chapter contains more information.
+Supply chain: key performance narrative
+Visit the Human Rights and Supply
+V28-04 Chain Management chapter
+2021
+2022
+2023
+A. Taxonomy-eligible activities
+A.1. Environmentally sustainable activities (taxonomy-aligned)
+Electricity generation using solar photovoltaic technology
+Electricity generation from wind power
+Climate
+change
+adaptation²
+Climate
+change
+mitigation²
+Y;N;N/EL
+%
+in millions
+Proportion of
+CapEx, year
+2023
+CapEx
+Proportion of
+Taxonomy
+aligned (A.1) or
+Q Search Back
+= Contents
+DNSH criteria ('Does not significantly harm')
+Significant contribution criteria
+N/EL
+Code¹
+Production of heat/cool from bioenergy
+Production of heat/cool from renewable non-fossil gaseous and liquid fuels
+Production of heat/cool from geothermal energy
+Cogeneration of heat/cool and power from bioenergy
+Cogeneration of heat/cool and power from renewable non-fossil gaseous and liquid fuels
+District heating/cooling distribution
+Transmission and distribution networks for renewable and low-carbon gases
+Storage of electricity
+Transmission and distribution of electricity
+Electricity generation from geothermal energy
+Electricity generation from hydropower
+2023
+E
+Y
+0%
+Pollution²
+Y;N
+Water²
+Y;N
+Y;N
+Climate change Climate change
+mitigation² adaptation²
+Y;N
+Y;N;N/EL
+Circular
+Economy Biodiversity²
+Y;N;N/EL
+Pollution²
+Y;N;N/EL
+Water²
+Y;N;N/EL
+adaptation²
+Y;N;N/EL
+%
+2023
+OpEx, year Climate change Climate change
+mitigation²
+Y;N;N/EL
+in millions
+OpEx
+Code¹
+Electricity generation from hydropower
+Electricity generation from wind power
+Electricity generation using solar photovoltaic technology
+A.1. Environmentally sustainable activities (taxonomy-aligned)
+A. Taxonomy-eligible activities
+Economic Activities
+Proportion of
+Proportion of
+Taxonomy
+7
+Q Search ← Back
+Economy Biodiversity2
+aligned (A.1) or
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+1
+CCM 4.1
+T/-
+activity"4
+Category Category
+"enabling "transitional
+activity"4
+E/-
+%
+Y;N
+Y;N
+OpEx, year
+2022
+Minimum
+safeguards³
+eligible (A.2)
+Y;N
+Y
+= Contents
+Significant contribution criteria
+ཚོཚོ་་༔༔་ཚོ་་ ཚོཨཽཙྪོ
+82%
+0%
+0%
+0%
+0%
+0%
+73%
+5,863
+A. CapEx of Taxonomy-eligible activities (A.1+A.2)
+0%
+0%
+0%
+0%
+0%
+2%
+129
+CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+B. Not taxonomy-eligible activities
+DNSH criteria ('Does not significantly harm')
+CapEx of Taxonomy-non eligible activities
+2,187
+→ SASB Index
+→ SDG Index
+→ Boards
+2023
+Financial year 2023
+EU Taxonomy Operating Expenses
+→Financial Calendar and Imprint
+→ NFS Index
+→ EU Taxonomy → GRI Index
+→ ESG Figures
+→ TCFD
+→ Summary of Financial Highlights
+→ Independent Assurance Practitioner's Report
+→ Independent Auditor's Report
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+272
+SEL - Taxonomy eligible activity for the relevant objective; N/EL - taxonomy non-eligible activity for the relevant objective
+4E - Enabling activity; T - Transitional activity.
+¹Climate Change Mitigation: CCM; Climate Change Adaptation: CCA; Water: WTR; Circular Economy: CE; Pollution Prevention and Control: PPC; Biodiversity and ecosystems: BIO.
+2Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective; N/EL - not eligible, Taxonomy non-eligible activity for the relevant environmental objective.
+3y-Yes; N - No.
+100%
+8,049
+TOTAL
+Y
+CCM 4.3
+7
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+2%
+28
+CCM 4.14
+E
+63%
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+Y
+N/EL
+2%
+3
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+5
+CCM 4.20
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+CCM 4.15
+N/EL
+Y
+59%
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+0%
+1
+CCM 4.5
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+1%
+Y
+Y
+Y
+Y
+754
+CCM 4.9
+Cogeneration of heat/cool and power from bioenergy
+District heating/cooling distribution
+Transmission and distribution networks for renewable and low-carbon gases
+Transmission and distribution of electricity
+Y
+Y
+Y
+Y
+Y
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+0%
+2
+CCM 4.8
+Electricity generation from bioenergy
+0%
+0%
+Y
+Y
+Y
+N/EL
+1
+Circular
+Installation, maintenance and repair of instruments and devices for measuring, regulation and contr. energy performance of
+buildings
+5,067
+Of which Enabling
+80%
+Y
+Y
+Y
+Y
+Y
+Y
+0%
+E
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+0%
+0%
+0%
+63%
+0%
+63%
+0%
+Y
+Y
+Y
+Y
+0%
+0%
+8
+Transmission and distribution networks for renewable and low-carbon gases
+Electricity generation from hydropower
+A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
+Of which Transitional
+E
+70%
+Y
+Y
+Y
+Y
+Y
+Y
+Y
+0%
+0%
+0%
+0%
+Y
+71%
+5,734
+Y
+Y
+Y
+v
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+E
+0%
+Y
+Y
+Y
+Y
+Y
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+Y
+125 to the ev v v v v m
+71%
+Construction, extension and operation of water collection, treatment and supply systems / Water supply
+CCM 7.5
+N/EL
+N/EL
+N/EL
+Y
+0%
+3
+CCM 9.3
+CCM 8.2
+CCM 8.1
+CCM 7.5
+CCM 7.4
+CCM 6.15
+CCM 6.13
+WTR 2.1
+WTR 2.1
+CCM 5.1/
+CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
+Professional services related to energy performance of buildings
+Data-driven solutions for GHG emissions reductions
+Data processing, hosting and related activities
+Installation, maintenance and repair of instruments and devices for measuring, regulation and contr. energy performance of
+buildings
+Installation, maintenance and repair of charging stations for electric vehicles in buildings
+Infrastructure enabling low-carbon road transport and public transport
+Infrastructure for personal mobility, cycle logistics
+Construction, extension and operation
+Y
+water collection, treatment and supply systems / Water supply
+0%
+N/EL
+N/EL
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+Y
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EI
+EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+N/EL
+5,734
+EL
+7
+CCM 4.22
+Production of heat/cool from geothermal energy
+12
+CCM 4.19
+Cogeneration of heat/cool and power from renewable non-fossil gaseous and liquid fuels
+9
+CCM 4.16
+Installation and operation of electric heat pumps
+6
+CCM 4.15
+District heating/cooling distribution
+18
+CCM 4.14
+1
+EL;N/EL
+EL;N/ELS
+EL;N/ELS
+EL;N/EL5
+EL;N/ELS
+EL;N/ELS
+N/EL
+T
+Production of heat/cool from renewable non-fossil gaseous and liquid fuels
+CCM 4.23
+CCM 4.5
+Production of heat/cool from bioenergy
+N/EL
+N/EL
+8
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+N/EL
+EL
+EL
+15
+6
+ÉÉÉÉÉÉÉÉÉÉÉ
+CCM 4.24
+CCM 4.30
+Production f heat/cool from fossil gaseous fuels in an efficient district heating and cooling system
+27
+CCM 4.31
+20
+Infrastructure enabling low-carbon road transport and public transport
+CCM 6.15
+High-efficiency co-generation of heat/cool and power from fossil gaseous fuels
+→ Compensation Report
+= Contents Q Search ← Back
+E.ON Integrated Annual Report 2023
+285
+→ Strategy
+Other Information
+→ Strategy
+→ Corporate Governance Declaration
+→Risks and Chances Report
+2-22: Statement on sustainable development strategy
+Strategy, policies, and practices
+2-20: Process to determine remuneration
+→ Declaration of the Management Board
+2-19: Remuneration policies
+→ Compensation Report
+→ Independent Auditor's Report
+2-25: Processes to remediate negative impacts
+→ TCFD
+2-9: Governance structure and composition
+Disclosures on material topics
+GRI 3: Material Topics (2021)
+2-30: Collective bargaining agreements
+2-29: Approach to stakeholder engagement
+Stakeholder Engagement
+2-28: Memberships of associations
+2-26: Mechanisms for seeking advice and raising concerns
+2-24: Embedding policy commitments
+2-23: Policy commitments
+GRI Disclosure
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index → NFS Index
+→ ESG Figures
+→ Summary of Financial Highlights
+Governance
+GRI Disclosure
+→ Working Conditions and Employee Development
+GRI 2: General Disclosures (2021)
+3-1: Process to determine material topics
+E.ON SE has reported the information cited in this GRI content index for the period 01-01-2023-12-31-2023 with reference to the GRI
+Standards. GRI 1: Fundamentals 2021 was used.
+E.ON has based its sustainability reporting on the Global Reporting Initiative ("GRI") guidelines since 2005.
+Global Reporting Initiative ("GRI") Index O
+→ Financial Calendar and Imprint
+→ SASB Index
+The organization and its reporting practices
+→ SDG Index
+→ Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ TCFD
+→ Summary of Financial Highlights
+→ Independent Auditor's Report
+→ Declaration of the Management Board
+= Contents Q Search ← Back
+Other Information
+→ Boards
+2-1: Organizational details
+2-2: Entities included in the organization's sustainability reporting
+2-3: Reporting period, frequency and contact point
+→ Human Rights and Supply Chain Management
+→ Security of Supply
+→ Sustainable Products and Services
+Business Model
+→ About This Report
+→ About This Report
+→ About This Report
+→ Financial Calendar and Imprint
+→ About This Report
+→ About This Report
+→ Business Model
+References and Comments
+2-7: Employees
+2-6: Activities, value chain and other business relationships
+Activities and workers
+2-5: External assurance
+2-4: Restatements of information
+→ ESG Figures
+3-2: List of material topics
+→ NFS Index
+→ Compliance and Anticorruption
+in % € in millions
+in %
+Climate change
+adaptation (CCA)
+in % € in millions
+€ in millions
+CCM + CCA
+Climate change
+mitigation (CCM)
+.
+= Contents Q Search ← Back
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+→ SASB Index
+→ SDG Index
+→ Boards
+1
+Economic activities
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Row
+I
+4
+Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator
+of the applicable KPI
+7
+23
+60
+23
+60
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+1
+6
+22
+7
+27
+7
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+5
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+27
+OpEx Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Financial Calendar and Imprint
+E.ON Integrated Annual Report 2023
+286
+→ ESG Materiality and Stakeholder Engagement
+→ ESG Materiality and Stakeholder Engagement
+→ Working Conditions and Employee Development
+→ ESG Figures
+→ ESG Materiality and Stakeholder Engagement
+→ ESG Materiality and Stakeholder Engagement
+Other Information
+→ Human Rights and Supply Chain Management
+→ Human Rights and Supply Chain Management
+→ Compliance and Anticorruption
+→ Human Rights and Supply Chain Management
+→ Compliance and Anticorruption
+[> E.ON's Sustainability Policies]
+The "E.ON's Approach" section in each ESG chapter of this report provides
+information on the sustainability strategies and policies relevant to the
+chapter's topic. The Sustainability Channel on our corporate website contains
+a number of relevant employee and functional policies as well as our Code of
+Conduct.
+→ Human Rights and Supply Chain Management
+→ Compliance and Anticorruption
+→ Declaration of the Management Board
+→ Independent Auditor's Report
+→ Summary of Financial Highlights
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+2
+3
+2
+3
+4
+5
+6
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index
+→ ESG Figures
+→ TCFD
+References and Comments
+Amount and proportion (in monetary amounts and as percentages)
+E.ON Integrated Annual Report 2023
+3-3: Management of material topics
+Revenue Template 3: Taxonomy-aligned economic activities (numerator)
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+= Contents Q Search Back
+E.ON Integrated Annual Report 2023
+19
+.
+282
+93,686
+93,686
+17,655
+19
+17,655
+Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
+Total applicable KPI
+I
+8
+Amount and proportion (in monetary amounts and as percentages)
+Climate change
+adaptation (CCA)
+CCM + CCA
+6
+1
+I
+.
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+5
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+4
+.
+Climate change
+mitigation (CCM)
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+in % € in millions
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+2
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+1
+in % € in millions
+€ in millions
+Economic activities
+Row
+3
+7
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+6
+No
+No
+Revenue Template 2: Taxonomy-aligned economic activities (denominator)
+The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
+¹E.ON's nuclear generation ended in April 2023 due to Germany's phaseout of nuclear power.
+6
+The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
+5
+The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
+4
+Yes¹
+Fossil gas related activities
+The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as
+hydrogen production from nuclear energy, as well as their safety upgrades.
+The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes
+such as hydrogen production, as well as their safety upgrades, using best available technologies.
+The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste
+from the fuel cycle.
+Nuclear energy related activities
+3
+2
+1
+Row
+Revenue Template 1: Nuclear and fossil gas related activities
+Row
+No
+Yes
+Yes
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+5
+4
+|☑
+3
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+2
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+1
+Economic activities
+in %
+Climate change
+adaptation (CCA)
+in % € in millions
+in % € in millions
+€ in millions
+Row
+Climate change
+mitigation (CCM)
+CCM + CCA
+Amount and proportion (in monetary amounts and as percentages)
+Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+numerator of the applicable KPI
+7
+8
+Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI
+Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI
+Revenue Template 5: Taxonomy non-eligible economic activities
+100
+473
+100
+473
+Total amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI
+8
+85
+402
+Row
+85
+Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator
+of the applicable KPI
+7
+8
+40
+40
+8
+40
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+6
+402
+1
+2
+3
+100
+100
+75,558
+75,558
+1
+.
+€ in millions
+284
+Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
+8
+Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
+7
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Economic activities
+6
+5
+4
+7
+→ Financial Calendar and Imprint
+31
+31
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD → ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+3
+2
+E.ON Integrated Annual Report 2023
+1
+→ SDG Index
+.
+1
+I
+283
+100
+100
+17,655
+17,655
+100
+100
+17,655
+17,655
+in %
+→ SASB Index
+→ Financial Calendar and Imprint
+Revenue Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+5
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+4
+1
+.
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated
+Regulation 2021/2139 in the denominator of the applicable KPI
+1
+in %
+in % € in millions
+in % € in millions
+€ in millions
+Economic activities
+Row
+Climate change
+adaptation (CCA)
+Climate change
+mitigation (CCM)
+CCM + CCA
+Amount and proportion (in monetary amounts and as percentages)
+= Contents Q Search ← Back
+7
+→ SDG Index → SASB Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+Our disclosures on new employee hires and employee turnover include
+numbers for the entire Group. More detailed disclosures are not relevant.
+→ Working Conditions and Employee Development
+→ ESG Figures
+401-1: New employee hires and employee turnover
+GRI 401: Employment (2016)
+GRI 400: Social
+For baseline year and consolidation approach, see 305-1.
+Our disclosures are based on CO₂ equivalents, which include CH4, N₂O, and
+CO2 emissions.
+We do not record emissions from the combustion or biodegradation of
+biomass that occur in our upstream value chain.
+→ Climate Protection
+= Contents Q Search ← Back
+For baseline year and consolidation approach, see 305-1.
+→ Climate Protection
+Our GHG emissions disclosures encompass all subsidiaries and generation
+assets that are fully consolidated in E.ON's financial statements. Subsidiaries
+with fewer than ten employees do not need to be included if their activities do
+not have a material impact on the various Scope 1-3 categories.
+In line with the Kyoto Protocol, the baseline year is 1990. Global warming
+potential is relative to a 100-year time horizon.
+Our disclosures are based on CO2 equivalents, which measure greenhouse
+gases in accordance with the Greenhouse Gas Protocol Community
+Accounting and Reporting Standard ("GHG Protocol").
+→ Climate Protection
+References and Comments
+305-3: Other indirect (Scope 3) GHG emissions
+305-2: Energy indirect (Scope 2) GHG emissions
+305-1: Direct (Scope 1) GHG emissions
+Our disclosures are based on CO₂ equivalents, which include CH4, N₂O, and
+CO2 emissions.
+288
+E.ON Integrated Annual Report 2023
+Other Information
+→ Occupational Health and Safety
+→ Occupational Health and Safety
+→ Occupational Health and Safety
+Our occupational health and safety management system was not
+implemented to comply with legal requirements. It is part of our commitment
+as a responsible Company and is based entirely on ISO standards.
+→ Occupational Health and Safety
+403-6: Promotion of worker health
+403-5: Worker training on occupational health and safety
+403-4: Worker participation, consultation, and communication on
+occupational health and safety
+403-2: Hazard identification, risk assessment, and incident investigation
+403-3: Occupational health services
+403-1: Occupational health and safety management system
+References and Comments
+GRI 403: Occupational health and safety (2018)
+GRI Disclosure
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index → NFS Index
+→ Independent Auditor's Report
+→ TCFD
+→ ESG Figures
+→ Financial Calendar and Imprint
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+GRI 305: Emissions (2016)
+→ Occupational Health and Safety
+GRI Disclosure
+→ SASB Index
+205-2: Communication and training about anti-corruption policies and
+procedures
+GRI 205: Anti-corruption (2016)
+GRI 200: Economic
+As with the topics identified as material, reporting on the other topics listed is
+based on the requirements of GRI 3-3.
+→Tax
+→ Human Rights and Supply Chain Management
+→ Diversity and Inclusion
+→ Energy Affordability
+→ Compliance and Anticorruption
+GRI 300: Environmental
+→ Business Resilience Management
+→ Community Involvement
+→ Sustainable Products and Services
+→ Security of Supply
+→ Customer Satisfaction
+→ Working Conditions and Employee Development
+→ Occupational Health and Safety
+→ Environmental Management
+→ Climate Protection
+References and Comments
+→ Data Protection, Cybersecurity and Product Safety
+GRI 302: Energy (2016)
+302-1: Energy consumption within the organization
+→ Compliance and Anticorruption
+→ SDG Index
+→ Boards
+→ Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ TCFD
+→ Summary of Financial Highlights
+→ Independent Auditor's Report
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+287
+= Contents Q Search ← Back
+• Power distribution losses (resold power and gas are excluded)
+• Vehicle fuel consumption
+• Fuel combustion for heating
+• Power and district heat consumption
+for Company purposes
+• Fuel consumed for energy generation (fossil, nuclear, and renewable fuel)
+Our disclosures include the following parameters:
+→ Sustainable Products and Services
+→ Environmental Management
+→ Human Rights and Supply Chain Management
+→ Financial Calendar and Imprint
+GRI Disclosure
+→ Occupational Health and Safety
+→ Occupational Health and Safety
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+Economic activities
+1
+Row
+OpEx Template 5: Taxonomy non-eligible economic activities
+Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
+denominator of the applicable KPI
+100
+100
+50
+13
+50
+13
+26
+Total amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI
+8
+1
+in %
+26
+7
+Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
+8
+→ TCFD
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+= Contents Q Search ← Back
+Other Information
+1
+.
+'
+in %
+E.ON Integrated Annual Report 2023
+100
+100
+393
+393
+1
+1
+.
+'
+I
+€ in millions
+281
+Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
+E.ON Integrated Annual Report 2023
+403-7: Prevention and mitigation of occupational health and safety impacts
+directly linked by business relationships
+= Contents Q Search ← Back
+→ Security of Supply
+→ Independent Auditor's Report
+→ TCFD
+→ ESG Figures
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+289
+= Contents Q Search ← Back
+→ Occupational Health and Safety
+A breakdown by gender is not applicable as we believe this would not provide
+useful information. Instead of breaking TRIF down by country, we do so by
+segment.
+→ Independent Assurance Practitioner's Report
+→ EU Taxonomy → GRI Index → NFS Index
+All indicators are reported for both E.ON employees and contractors'
+employees.
+• Lost-time injury frequency ("LTIF"): work-related accidents that result in
+lost time.
+• Total recordable injury frequency ("TRIF"): work-related accidents and
+illnesses.
+• Serious incident and fatality frequency ("SIF"): accidents and incidents that
+cause serious or fatal injuries.
+E.ON uses the following KPIs to monitor and report accidents:
+→ Occupational Health and Safety
+→ Occupational Health and Safety
+403-10: Work-related ill health
+403-9: Work-related injuries
+403-8: Workers covered by an occupational health and safety management
+system
+• Near-miss frequency rate ("NMFR"): unplanned events that had the
+potential to result in an accident but did not.
+→ Boards
+→ SDG Index
+→ SASB Index
+→ Security of Supply
+G4-EU29: Average power outage duration (SAIDI)
+GRI G4 Sector disclosures electric utilities: access (2013)
+G4-EU28: Power outage frequency (SAIFI)
+Due to confidentiality constraints and the sensitivity of such data, we are
+unable to provide information about substantiated complaints concerning
+data breaches.
+→ Data Protection, Cybersecurity, and Product Safety
+Our disclosures include the total number of procurement personnel who
+attended live online training sessions as well as the percentage of employees
+that used our Group-wide self-paced eLearning module on human rights and
+data and cyber security.
+→ Human Rights and Supply Chain Management
+418-1: Substantiated complaints concerning breaches of customer privacy
+and losses of customer data
+GRI 418: Customer privacy (2016)
+412-2: Employee training on human rights policies or procedures
+GRI 412: Human rights assessment (2016)
+→ ESG Figures
+→ Working Conditions and Employee Development
+→ Diversity and Inclusion
+→ Working Conditions and Employee Development
+References and Comments
+405-1: Diversity of governance bodies and employees
+GRI 405: Diversity and equal opportunity (2016)
+404-2: Programs for upgrading employee skills and transition assistance
+programmes
+GRI 404: Training and education (2016)
+GRI Disclosure
+→ Financial Calendar and Imprint
+290
+'
+→ E.ON on the Capital Market → CEO Letter → Report of the Supervisory Board
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance
+→ Sustainable Finance → Business Report
+→ Forecast Report → Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Corporate Profile
+Business Model
+E.ON is an investor-owned energy company with approximately
+74,600 employees led by Corporate Functions in Essen. The
+Group's core business is divided into two segments: Energy
+Networks and Customer Solutions. Corporate functions, equity
+interests managed directly by E.ON SE, and non-strategic
+operations are reported under Corporate Functions/Other.
+Corporate Functions
+Corporate Functions' main task is to lead the E.ON Group. This
+involves charting E.ON's strategic course and managing and
+funding its existing business portfolio. Corporate Functions' tasks
+include optimizing E.ON's overall business across countries and
+markets from a financial, strategic, and risk perspective,
+conducting stakeholder management, and managing E.ON Energy
+Markets GmbH ("E.ON Energy Markets"), the Company's central
+commodity procurement unit. The E.ON Group's non-strategic
+activities, such as the operation of nuclear power stations until
+April 15, 2023, and their dismantling (managed by the
+PreussenElektra unit) and the generation business in Turkey are
+reported here as well.
+Energy Networks
+This segment consists of E.ON's power
+and gas
+networks and related activities. It is subdivided into three regional
+markets: Germany, Sweden, and East-Central Europe/Turkey
+(which consists of the Czech Republic, Hungary, Romania, Poland,
+Croatia, Slovakia, and the stake in Enerjisa Enerji in Turkey, which
+is accounted for using the equity method). This segment's main
+tasks include operating its power and gas networks safely and
+reliably, carrying out all necessary maintenance and repairs, and
+expanding its power and gas networks, which frequently involves
+adding customer connections and the connection of renewable
+energy generation assets.
+Customer Solutions
+This segment serves as the platform for working with E.ON's
+customers to actively shape Europe's energy transition. This
+includes supplying customers in Europe (excluding Turkey) with
+power, gas, and heat, and providing them with solutions that
+enhance their energy efficiency, energy autonomy, and eMobility.
+E.ON's activities are tailored to the individual needs of customers
+across all categories: residential, small and medium-sized
+enterprises, large commercial and industrial, sales partners, and
+public entities. The E.ON Group's main presence in this business is
+in Germany, the United Kingdom, the Netherlands, Nordics (for
+example, Sweden, Denmark, and Norway), Italy, the Czech
+Republic, Hungary, Croatia, Romania, Poland, and Slovakia. In
+addition, Energy Infrastructure Solutions engages in activities
+aimed at decarbonizing commercial customers, cities, and
+communities, such as sustainable city solutions and district
+heating.
+Significant Changes to the Business Model Effective
+January 1, 2024
+Some of the Energy Network segment's regional markets were
+reclassified effective January 1, 2024. East-Central
+Europe/Turkey is now divided into East-Central Europe (which
+includes the Czech Republic, Slovakia, and Poland) and
+Southeastern Europe (which includes Hungary, Croatia, Romania,
+and our stake in Enerjisa Enerji in Turkey, which is accounted for
+using the equity method).
+In addition, the Customer Solutions segment was renamed Energy
+Retail. Furthermore, the Energy Infrastructure Solutions ("EIS")
+was transferred from Energy Retail and has been an independent
+segment since January 1, 2024. We thus now report on its
+activities separately.
+E.ON Integrated Annual Report 2023
+Furthermore, the E.ON Group's central commodity procurement
+unit, E.ON Energy Markets, is reported at Energy Retail effective
+January 1, 2024. It was part of Corporate Functions/Other until
+December 31, 2023.
+28
+The precise scope of the audit is described in the Other Information
+section in the Independent Auditor's Report and in the report on
+the management review of sustainability information.
+E.ON's commitment to transparency includes subjecting its
+sustainability performance to independent, detailed assessments
+by specialized agencies and capital-market analysts. The findings
+of these assessments provide important guidance to investors and
+to E.ON. They help us identify our strengths and weaknesses and
+further improve our performance. The Sustainable Finance chapter
+presents the results of sustainability ratings.
+27
+27
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report →Risks and Chances Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Assurance
+The Combined Group Management Report is generally audited as
+part of the statutory audit of the financial statements. Content
+that is not part of the statutory audit of the Consolidated Financial
+Statements and is therefore excluded from the auditor's report is
+identified separately, as described below. For the NFS and selected
+additional sustainability information, a separate assurance
+engagement ("Sustainability Assurance") was also performed by
+KPMG AG in accordance with the International Standard on
+Assurance Engagements ("ISAE") 3000 (Revised) issued by the
+International Auditing and Assurance Standards Board ("IAASB").
+The audit assurance applied to the different contents is clarified in
+the report by means of various symbols.
+Symbols next to headings [H2] apply until the next heading of
+the same level of hierarchy. Sections within the same chapter that
+were audited with a different assurance may be marked
+separately. This is done in longer sections by means of symbols
+next to the subheadings [H3] which apply until the next
+heading of the same level of hierarchy. In addition, individual
+sections or KPIs that are subject to a different audit assurance may
+be marked separately.
+The corresponding contents are marked as follows:
+Not part of the statutory audit, audited with reasonable
+assurance as part of the Sustainability Assurance in
+accordance with ISAE 3000.
+○ Not part of the statutory audit, audited with limited assurance
+as part of the Sustainability Assurance in accordance with
+ISAE 3000; individual text passages are indicated by
+× Not part of the statutory audit, unaudited; individual text
+passages are indicated by > <.
+Prior-year figures and quantified changes from the prior year
+included in sections marked as audited are, in principle, audited
+with the same degree of assurance as for the 2023 reporting year.
+Figures for 2021 were audited with limited assurance. Any
+deviations are indicated.
+28
+ESG Materiality and Stakeholder Engagement
+ESG Materiality
+GRI 3-1, GRI 3-2
+E.ON has conducted an annual materiality analysis since 2006.
+The purpose is to identify and evaluate the sustainability topics
+that are most important to the Company and its stakeholders. This
+report contains information on the topics that the materiality
+analysis deemed to be particularly significant. It also partially
+addresses less material sustainability topics. E.ON thus aims to
+meet the different expectations of stakeholders as well as the
+requirements of environmental, social, and governance ("ESG")
+rankings and ratings. We provide an overview of the material and
+other topics in the Non-Financial Statement ("NFS") Index.
+• Energy affordability
+• Reliable energy supply
+The material topic of climate-change mitigation also encompasses
+customer solutions that mitigate climate change. Since both
+aspects-general climate-change mitigation and customer
+solutions that mitigate climate change-are extensive, they are
+presented in separate chapters in the Integrated Annual Report
+2023.
+The ESG chapters of this report provide information on E.ON's
+approach to managing its material topics and outline the
+Company's progress in the reporting year. The description of the
+management approach is based on GRI 3-3, Management of
+material topics.
+Stakeholder Engagement
+GRI 2-28, GRI 2-29
+E.ON continually seeks dialogue with its various stakeholders. We
+want to listen to and understand their points of view and also to
+talk to them openly about the potential short- and long-term
+impacts of our business activities. This is an important objective of
+our daily work at the local, national, and European level. A
+stakeholder is any person who or any group that has an interest in
+a company. Stakeholder engagement is thus a core process of
+E.ON's corporate governance. The dialogue formats we choose
+vary by stakeholder and topic. They range from information
+campaigns and discussion forums with associations and NGOs to
+face-to-face discussions and lobbying. For example, E.ON is
+actively involved in the global investor initiative CDP (Carbon
+Disclosure Project), works with the United Nations Environment
+Programme ("UNEP"), and supports the UN Decade on Ecosystem
+Restoration. Furthermore, since 2021 E.ON has been part of the
+LEAF Coalition (Lowering Emissions by Accelerating Forest
+Finance), which is committed to biodiversity and the protection of
+tropical forests. More information on CDP and the LEAF Coalition
+can be found in the "Climate Protection" chapter. E.ON is also a
+member of Solar Power Europe, a European association of energy
+suppliers and solar companies. The Solar Stewardship Initiative
+("SSI") was set up as part of this association. Its aim is to create
+more transparency for solar-power supply chains and to ensure
+compliance with human rights.
+E.ON actively participates in policy debates on issues that affect
+the Company. We use a variety of channels for this, including
+lobbying, media interviews with our executives, and their
+appearances as public speakers. In addition, policymakers and
+regulators frequently invite E.ON to provide its technical and
+energy expertise as part of their decision-making processes. The
+Company offers its expertise proactively as well. This type of
+advocacy is important because the energy sector is significantly
+influenced by policy and regulatory decisions. Energy policy
+discussions in Brussels and Berlin focused on a future market
+design for the electricity market and the necessary expansion of
+infrastructure. Furthermore, E.ON takes part in discussions on
+energy, environmental, and climate policy in a variety of other
+forums. For example, Leonhard Birnbaum is part of the European
+CEO Alliance, an alliance of EU-wide business leaders who discuss
+ways to provide additional support to the EU Green Deal. Effective
+November 21, 2022, Leonhard Birnbaum was appointed acting
+78
+Diversity and Inclusion
+32
+Strategy
+76
+Energy Affordability
+116
+E.ON SE's Earnings, Financial, and Asset Situation
+74
+Compliance and Anticorruption
+• Climate-change mitigation
+The findings of our NFRD materiality analysis for 2023, which are
+listed below, reaffirm the findings of the analysis from the prior
+year. The highest relevance from a financial and impact
+perspective was assigned to the following three topics:
+integrated the approval of the update of our sustainability analysis
+pursuant to NFRD requirements from 2022 and assessed the prior
+year's findings to ensure they are up to date. Our CEO Leonard
+Birnbaum and our CFO Marc Spieker performed the final
+validation.
+E.ON's sustainability reporting for the 2023 reporting year must
+for the last time reflect NFRD requirements. We therefore did not
+conduct a comprehensive update of our sustainability analysis
+pursuant to NFRD requirements. Instead, we conducted a Group-
+wide materiality analysis oriented toward the European
+Sustainability Reporting Standards 2 ("ESRS 2") in order to prepare
+for our first reporting pursuant to the Corporate Sustainability
+Reporting Directive ("CSRD") for the 2024 reporting year. We
+Identification of Material Topics
+In 2023 E.ON conducted a materiality analysis in accordance with
+the requirements of the Non-Financial Reporting Directive
+("NFRD"). The requirements of the Corporate Sustainability
+Reporting Directive ("CSRD") were taken into account, but not
+applied. We applied the double materiality principle: we considered
+the financial perspective as well as the impact perspective. The
+process had four steps, which are described below:
+Step One: Topic Identification and Collection
+E.ON first gathered information and evidence on potentially
+material topics. We consulted a variety of sources, including
+regulations, reporting standards as well as statements from
+customers, competitors, investors, and non-governmental
+organizations ("NGOS"). We used this to create an overview of
+possible material topics. These were then compared with our
+existing material topics and collated. The basis for this was an
+evaluation that correlates a topic's frequency of mention to its
+importance for the industry. Experts from Sustainability, Group
+Accounting, and Investor Relations divisions reviewed and finally
+agreed on a short list of E.ON's potentially material topics.
+29
+29
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report →Risks and Chances Report
+→ Governance
+Sustainability Ratings
+→ Sustainable Finance → Business Report
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Step Two: Impact Perspective
+E.ON analyzed the impact perspective by surveying NGOs,
+research institutes, suppliers, customers, and other stakeholders.
+We gave them a questionnaire containing the topics identified in
+step one and asked them to rate them. The questionnaire's
+findings were then examined in greater depth in stakeholder
+interviews. Representatives from the Sustainability, Group
+Accounting, Investor Relations, and Group Risk functions
+evaluated the survey's findings in a workshop, which concluded
+the impact analysis.
+Step Three: Financial Perspective
+E.ON evaluated the financial perspective by examining the risks
+and opportunities associated with the ESG topics contained in its
+Enterprise Risk Management ("ERM") system. Another workshop,
+consisting of the same participants, was then held to assess and
+validate the financial materiality of the topics identified.
+Step Four: Materiality Threshold
+E.ON finalized the list of topics by defining a common materiality
+threshold for the impact and financial perspectives. Only topics
+that exceeded it were considered material. To determine them, we
+held a third workshop consisting of the above-mentioned
+participants. The findings were then presented to the
+Sustainability Council, which approved E.ON's materiality analysis
+for 2023. The council is chaired by the Chief Sustainability Officer.
+He reports periodically to the E.ON Management Board on
+progress made.
+Material Topics
+→Internal Control System
+To improve readability, we generally use the shorter name for
+companies and organizations (such as "E.ON" rather than "E.ON
+SE").
+Language
+The Integrated Annual Report was published on March 13, 2024,
+and is available in German and English in pdf format. You can
+download the pdf version of this report at eon.com. The previous
+Integrated Annual Report was published in March 2023. You can
+find it and additional reports in the investor relations archive.
+Sustainable Finance
+52
+ESG Ratings of E.ON
+ESG Asset Management and Pension Assets
+8 88 89
+93
+Disclosures Pursuant to Section 289, Paragraph 4, and
+Section 315, Paragraph 4 of the German Commercial
+Code on the Internal Control System for the Accounting
+Process
+128
+93
+93
+Employees and Society
+55
+Disclosures Pursuant to Section 289a and Section 315a
+of the German Commercial Code and Explanatory Report 131
+Business Report
+94
+Occupational Health and Safety
+55
+Working Conditions and Employee Development
+47
+85
+EU Taxonomy
+40
+30
+Forecast Report
+118
+Innovation
+36
+Management Control System
+38
+Human Rights and Supply Chain Management
+Tax
+80
+59
+83
+120
+Climate Protection and Environmental Management
+40
+Sustainable Finance and Investment
+85
+Climate Protection
+Environmental Management
+Sustainable Products and Services
+422
+Risks and Chances Report
+22
+Macroeconomic and Industry Environment
+Customer Satisfaction
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+→Risks and Chances Report
+= Contents Q Search ← Back
+About This Report
+GRI 2-2, GRI 2-3, GRI 2-4, GRI 2-5, GRI 2-6
+For the 2023 reporting year, E.ON has again published an
+Integrated Annual Report that combines financial and non-
+financial reporting. The reason is that sustainability is the
+centerpiece of E.ON's strategy and-in every dimension-the
+standard for our actions. An integrated report provides our
+stakeholders with a holistic and transparent view of our financial,
+environmental, and social performance.
+Standards
+This Integrated Annual Report applies to the E.ON Group as well as
+E.ON SE. E.ON is therefore fulfilling all requirements of
+International Financial Reporting Standards ("IFRS"), the German
+Commercial Code (German abbreviation: "HGB"), and German
+Accounting Standards (German abbreviation "DRS"). The
+combined Non-Financial Statement ("NFS") pursuant to Sections
+315b and 315c in conjunction with Sections 289b to 289e of the
+HGB is fully integrated into the Combined Group Management
+Report. The Group Management Report thus contains information
+on five aspects: the environment, employees, social matters,
+human rights, as well as anti-corruption and anti-bribery. The NFS
+also complies with the disclosure requirements of the EU
+Taxonomy Regulation. The Non-Financial Statement ("NFS") Index
+indicates where these disclosures can be found in the Integrated
+Annual Report. In addition, the Disclosures Regarding Takeovers
+chapter is integrated into the Annual Report.
+E.ON's sustainability reporting, which consists of the NFS and
+other sustainability disclosures, is guided by the findings of its
+materiality analysis and topics relevant for stakeholders. It has
+been prepared with reference to the GRI Standards 2021 by the
+Global Reporting Initiative. The GRI standards covered by the
+content of a chapter are displayed on the first page of the chapter.
+The GRI Index provides an overview. The Other Information
+chapter contains E.ON's disclosures regarding the Electric Utilities
+and Power Generators Standards issued by the Sustainability
+Accounting Standards Board ("SASB"). E.ON is committed to the
+ten principles of the United Nations Global Compact ("UNGC") and
+supports the United Nations Sustainable Development Goals
+("SDGs"). We describe our contributions to the SDGs in the
+Strategy chapter. Our climate-related reporting, which is based on
+the recommendations of the Task Force on Climate-related
+Financial Disclosures ("TCFD") as well, can be found in the chapter
+Climate Protection.
+Scope
+This report encompasses all subsidiaries that are fully consolidated
+in E.ON's Consolidated Financial Statements 2023. Any deviations
+are marked accordingly. KPI-based thresholds are used to
+distinguish companies that do not contribute significantly to the
+report. The next chapter, Business Model, contains more
+information about the E.ON Group's structure and business
+segments.
+The reporting period is the 2023 calendar year. For most KPIs the
+corresponding prior-year figure is provided to improve
+comparability. Adjustments to prior-year figures of a KPI are
+explained in footnotes.
+Statements on the future development of E.ON and its subsidiaries
+are estimates based on information available at the time of
+reporting. Actual results may deviate from these statements.
+The Corporate Governance Declaration is published on our website
+eon.com in the section Corporate Governance.
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+26
+105
+64
+Special Events in the Reporting Period
+99
+Security of Supply
+66
+Subsequent Events
+100
+Community Involvement
+69
+94
+Business Performance
+Data Protection, Cybersecurity, and Product Safety
+70
+Energy Networks
+102
+Business Resilience Management
+72
+Customer Solutions
+103
+Earnings Situation
+101
+29
+distribution
+29
+2/2
+1/22
+1/2
+May 17, 2023)
+Segundo, Karen de (until
+1/11
+2/23
+5/5
+Schmitz, Rolf Martin
+1/11
+3/31
+4/4
+5/5
+Schmitz, Andreas
+2/23
+3/3
+Petit, Nadège (since
+4/41,4
+To Our Investors
+Wilkens, Deborah
+5/5
+4/4
+3/31
+2/2
+May 17, 2023)
+Pelouch, Miroslav (until
+3/4
+5/51
+May, Stefan
+2/22
+5/5
+Luha, Eugen-Gheorghe
+5/51
+2/21
+5/5
+Bauer, Katja
+4/4
+4/5
+Schmitz, Christoph
+1/22
+2/2
+17, 2023)
+Woste, Ewald (until May
+1/23
+Pinczésné Márton,
+Groth, Anke
+4/4
+Key Topics of the Supervisory Board's Discussions
+In the 2023 financial year, the Supervisory Board fulfilled discussed E.ON's strategic
+direction with the Management Board, in particular in view of the altered geopolitical and
+regulatory situations. The Management Board the members of the Supervisory Board were
+in agreement regarding the measures presented by the Management Board. In addition, the
+Management Board informed the Supervisory Board on an ongoing basis about growth
+projects and the development of innovative growth businesses.
+Implementation of E.ON's Growth Strategy
+All meetings of the Supervisory Board and its committees took place in person. Members of
+the Supervisory Board unable to attend in person were given the opportunity to attend by
+means of video conference. This was made use of in some instances.
+In addition, there was a regular exchange of information between the Chairman of the
+Supervisory Board and the members of the Management Board, in particular the Chairman,
+during the entire financial year. In the case of particularly pertinent issues, the Chairman of
+the Supervisory Board was kept informed at all times. He likewise maintained contact with
+the members of the Supervisory Board outside of board meetings.
+= Contents Q Search ← Back
+→ E.ON on the Capital Market → CEO Letter → Report of the Supervisory Board
+To Our Investors
+E.ON Integrated Annual Report 2023
+24
+21
+The Management Board regularly provided the Supervisory Board with timely and
+comprehensive information about significant business transactions in both written and oral
+form. At the meetings of the full Supervisory Board and its committees, the Supervisory
+Board had sufficient opportunity to actively discuss the Management Board's reports,
+motions, and proposed resolutions. After thoroughly examining and discussing the
+resolutions proposed by the Management Board, the Supervisory Board voted on them
+when it was required by law, the Company's Articles of Association, or the Supervisory
+Board's rules and procedures. Furthermore, the Supervisory Board also met on a recurring
+basis without the Management Board being present.
+addressed all issues relevant to the Company. In addition, it carried out one written
+resolution procedure. On a regular basis, the shareholder representatives and employee
+representatives made separate preparations for these meetings with the participation of
+one or several members of the Management Board. Three members were each unable to
+attend one Supervisory Board meeting; otherwise, all members attended all meetings.
+In the 2023 financial year the Supervisory Board carefully performed all its duties and
+obligations under law, the Company's Articles of Association, and its own rules and
+procedures. It advised the Management Board in detail about the Company's management
+and continually monitored the Management Board's activities, assuring itself that the
+Company's management was legal, purposeful, and orderly. At five regular meetings it
+2023 was a special year for E.ON. The transformation of Europe's energy system in the
+wake of Russia's war of aggression against Ukraine continued to gain pace. E.ON played a
+key role in it. In a continued volatile market environment, it was necessary to reaffirm the
+implementation of E.ON's growth strategy and the accompanying significant investments in
+network expansion and decarbonization solutions. The energy industry will be where
+growth happens in the year ahead. This entails an obligation as well: realizing this growth
+potential is what will make E.ON successful. The Supervisory Board would like to thank the
+Management Board and all employees for the special efforts they made last year.
+Dear Shareholders,
+Erich Clementi
+Chairman of the
+Supervisory Board
+Report of the
+Supervisory
+Board
+= Contents Q Search ← Back
+Policy developments in Germany and Europe formed a key topic of the Supervisory Board's
+deliberations. The principle developments in to Germany were implementation of the
+Building Energy Act and the Heat Planning Act as well as changes to the regulatory
+environment. The reform of the EU's electricity market design was also a regular topic of
+discussion.
+Furthermore, the Supervisory Board dealt in detail with the price performance of E.ON
+stock, in particular regarding additional potential for value enhancement and growth
+opportunities, as well as E.ON's positioning on the capital market.
+In the context of the Group's operating business, the Supervisory Board addressed at length
+how the calmer situation on wholesale commodity markets affects E.ON as well as the
+business situation of the Group and its companies. It discussed E.ON SE's and the E.ON
+Group's asset, financial, and earnings situation, dividend policy, workforce developments,
+and earnings opportunities and risks. The Supervisory Board and the Management Board
+Overview of the Attendance of Supervisory Board Members at Meetings of the
+Supervisory Board and Its Committees in the 2023 financial year
+5/5
+Grillo, Ulrich
+4/4
+4/51
+2/2
+ESG Materiality and Stakeholder Engagement
+2/2
+Nomination
+Committee
+2/2
+Sustainability
+Committee
+1/11
+2/22
+4/4
+Clementi, Erich
+Kley, Karl-Ludwig (until
+May 17, 2023)
+Fröhlich, Klaus
+Audit and Risk
+Committee
+Executive
+Committee
+Board
+Supervisory
+Supervisory Board
+members
+and
+Innovation
+May 17, 2023)
+5/5
+Szilvia
+2/22
+Pöhls, René
+Personnel Changes on the Supervisory Board
+The Supervisory Board examined the Management Board's proposal for profit
+appropriation, which includes a cash dividend of €0.53 per ordinary share, also taking into
+consideration the Company's liquidity and its finance and investment plans. After examining
+and weighing all arguments, the Supervisory Board agrees with the Management Board's
+proposal for profit appropriation.
+On March 12, 2024, the Supervisory Board approved the Financial Statements of E.ON SE
+prepared by the Management Board and the Consolidated Financial Statements. The
+Financial Statements are thus adopted. The Supervisory Board agrees with the Combined
+Group Management Report and, in particular, with its statements concerning the
+Company's future development.
+The Supervisory Board also examined the sustainability reporting consisting of the
+combined Non-Financial Statement and additional sustainability information which is
+integrated into the Combined Group Management Report. KPMG also audited the Non-
+Financial Statement and selected additional sustainability information and issued an
+unqualified opinion. The disclosures were subjected to a limited assurance engagement by
+KPMG; selected disclosures were audited with reasonable assurance. Following the final
+result of its examination, the Supervisory Board raised no objections to the integrated
+sustainability reporting, including the Non-Financial Statement.
+= Contents Q Search ← Back
+→ CEO Letter → Report of the Supervisory Board
+→ E.ON on the Capital Market
+To Our Investors
+E.ON Integrated Annual Report 2023
+24
+24
+The Supervisory Board reviewed and, at its annual results meeting on March 12, 2024,
+thoroughly discussed-in the presence of the independent auditor and with knowledge of,
+and reference to, the Independent Auditor's Report and the results of the preliminary review
+by the Audit and Risk Committee-E.ON SE's Financial Statements prepared in accordance
+with the German Commercial Code, Consolidated Financial Statements, and Combined
+Group Management Report as well as the Management Board's proposal for profit
+appropriation. The independent auditor was available for supplementary questions and
+answers. After concluding its own examination, the Supervisory Board determined that
+there are no objections to the findings. It therefore acknowledged and approved the
+Independent Auditor's Report.
+KPMG AG Wirtschaftsprüfungsgesellschaft was elected as Group auditor by the Annual
+Shareholders Meeting on May 17, 2023, and has been E.ON SE's independent auditor
+without interruption since the 2021 financial year. The auditor responsible at KPMG AG
+Wirtschaftsprüfungsgesellschaft is Gereon Lurweg, who is performing this function for the
+third time. The IFRS Consolidated Financial Statements exempt E.ON SE from the
+requirement to publish Consolidated Financial Statements in accordance with German law.
+KPMG AG, Wirtschaftsprüfungsgesellschaft, Düsseldorf ("KPMG"), audited and submitted
+an unqualified auditor's and/or audit opinion on the Consolidated Financial Statements of
+E.ON SE prepared in accordance with IFRS, the Combined Group Management Report, and
+the Compensation Report pursuant to Section 162 of the German Stock Corporation Act
+("AktG") for the year ended December 31, 2023.
+Examination and Approval of the Financial Statements, Approval of the
+Consolidated Financial Statements, Proposal for Profit Appropriation for
+the Year Ended December 31, 2023
+Committee chairpersons reported the agenda and results of their respective committee's
+meetings to the full Supervisory Board on a regular basis. Information about the
+committees' composition and responsibilities is in the Corporate Governance Declaration.
+requirements of the German Stock Corporation Act, the German Corporate Governance
+Code, and the Supervisory Board's rules and procedures as well as the objectives that the
+Supervisory Board resolved for its composition. The committee thus ensured that
+Supervisory Board members and the board as a whole have the knowledge, skills, and
+professional experience required to properly perform their duties.
+The Nomination Committee met twice. At these meetings, it did preparatory work for the
+Supervisory Board's election proposal to the 2023 Annual Shareholders Meeting for the
+shareholder representatives on the Supervisory Board of E.ON SE. When proposing
+candidates to the Supervisory Board, the Nomination Committee took into account the
+The Audit and Risk Committee met four times in 2023. One member was unable to attend
+one meeting, Otherwise, all members attended all meetings. The committee conducted a
+thorough review, in particular of the 2021 Financial Statements of E.ON SE (prepared in
+accordance with the German Commercial Code), the E.ON Group's 2022 Consolidated
+Financial Statements (prepared in accordance with International Financial Reporting
+Standards, or "IFRS"), and the 2023 intermediate financial reports of E.ON SE. The
+committee discussed the recommendation for selecting an independent auditor for the
+2023 financial year as well as the intermediate financial reports and assigned the tasks for
+the independent auditor's auditing services, established the audit priorities, determined the
+independent auditor's compensation and reviewed the independent auditor's qualifications
+as well as the quality of the independent audit, and verified the auditor's qualifications and
+independence in accordance with the requirements of the law and the German Corporate
+Governance Code. The committee also assured itself that the independent auditor has no
+conflicts of interest. In addition, the committee addressed other matters assigned to it by
+law, the Company's Articles of Association, or the Supervisory Board's rules and
+procedures, in particular Internal Audit's activities and reports, accounting issues, risk
+management, transactions with related parties, and developments in the area of
+compliance. Furthermore, the committee thoroughly discussed the Combined Group
+Management Report and the proposal for profit appropriation and prepared the relevant
+recommendations for the Supervisory Board and reported them to the Supervisory Board.
+On the basis of the quarterly risk reports, the committee noted that no risks were identified
+that might jeopardize the existence of the Group or individual segments. Furthermore, the
+committee addressed in detail the implications and the management of the energy crisis,
+occupational safety, and the Company's cyber, legal, and data-protection risks. In addition,
+there was a regular exchange of information between the Chairman of the Audit and Risk
+Committee and the independent auditor throughout the financial year.
+The previous Supervisory Board members' term of service ended at the Annual
+Shareholders Meeting on May 17, 2023. New elections were therefore held. At the same
+time, a new Supervisory Board size of 16 members-for a limited period through the 2028
+Annual Shareholders Meeting-was resolved.
+With the exception of Karl-Ludwig Kley, Karen de Segundo and Ewald Woste on the
+shareholder side and Fred Schulz and Miroslav Pelouch on the employee side, all previous
+Supervisory Board members were reelected or reappointed. Nadège Petit was newly
+elected to the Supervisory Board on the shareholder side. On the employee representatives'
+side, effective January 1, 2024, Frank Werneke succeeded Christoph Schmitz, who ended
+his service on the Supervisory Board on December 31, 2023.
+Erich Clementi has been the new Supervisory Board Chairman since May 17, 2023,
+succeeding Karl-Ludwig Kley.
+Pages 260 and 261 of the Integrated Annual Report provide an overview of all members of
+the Supervisory Board.
+Business Model
+5/5
+111
+115
+Asset Situation
+Financial Situation
+74
+Governance
+29
+29
+The Innovation and Sustainability Committee met three times. Three members were unable
+to attend one meeting each. Apart from that, all members attended all of the committee's
+meetings. The matters addressed by the committee included the progress and specific
+initiatives in the area of innovation as well as E.ON's position in sustainability rankings and
+the external perception of E.ON with regard to sustainability. The further development of
+various new customer solutions businesses was the topic of extensive discussions as well.
+Corporate Profile
+management report
+combined group
+E.ON Integrated Annual Report 2023
+25
+25
+Chairman
+Erich Clementi
+Men Teil,
+Essen, March 12, 2024
+The Supervisory Board
+= Contents Q Search ← Back
+= Contents Q Search ← Back
+Best wishes,
+To Our Investors
+2/22
+'
+2Committee member until May 17, 2023.
+3Committee member since May 17, 2023.
+4Committee member since June 5, 2023.
+¹Participation(s) as a guest.
+2/23
+4/41
+5/5
+Winterweber, Axel
+5/51
+Wallbaum, Elisabeth
+2/22
+2/22
+2/2
+17, 2023)
+Schulz, Fred (until May
+4/4
+→ E.ON on the Capital Market → CEO Letter → Report of the Supervisory Board
+2/23
+5/5
+22
+22
+4/4
+→ E.ON on the Capital Market → CEO Letter
+23
+E.ON Integrated Annual Report 2023
+The Executive Committee held four regular meetings in the 2023 financial year. All
+members took part in all of the committee's meetings. At its meetings, the committee, in
+particular, addressed current developments in conjunction with the transformation of
+Europe's energy system and the associated policy and regulatory changes. Additionally, the
+Executive Committee dealt with the Management Board's compensation, including the
+achievement of Management Board targets for 2023 and the setting of the targets for
+2024. In addition, the Executive Committee did preparatory work for the resolutions
+relating to personnel matters on the Management Board. Furthermore, the Executive
+Committee thoroughly discussed the strategy review.
+To fulfill its duties carefully and efficiently, the Supervisory Board has created committees.
+Committee Work
+23
+Education and training sessions on selected issues of E.ON's business were conducted for
+Supervisory Board members in the 2022 financial year. The key policy and regulatory
+developments in the regions in which E.ON operates and their implications for E.ON'S
+energy networks business were explained to the Supervisory Board at an information event.
+In addition, the Supervisory Board was given a practical presentation of the challenges
+posed by increasingly digitalized network control technology resulting from extensive
+network expansion. E.ON's British customer solutions business was presented in detail and
+the decarbonization of the energy and heat supply was explained at a meeting held in the
+United Kingdom.
+In the 2023 financial year, one member of the Innovation and Sustainability Committee had
+a potential conflict of interest (in relation to an agenda item regarding E.ON's operating
+business) due to another directorship. For precautionary reasons, the member did not
+participate in the committee's resolution. Otherwise, the Supervisory Board is aware of no
+indications of conflicts of interest involving members of the Management Board or
+Supervisory Board in the 2023 financial year.
+In accordance with E.ON SE's Articles of Association, the Management Board is authorized
+to provide that Annual Shareholders Meetings held on or before June 30, 2025, may be
+held without the physical presence of shareholders or their proxies at the venue of the
+Annual Shareholders Meeting. The decision on the format of the Annual Shareholders
+Meeting will be made annually. Deliberations focus in particular on safeguarding
+shareholder rights. Aspects such as the agenda, energy and resource consumption, and
+process security are taken into account as well. On this basis, the 2024 Annual
+Shareholders Meeting will again take place in a virtual format.
+The targets for the Supervisory Board's composition, including a competency profile and a
+diversity concept, with regard to Recommendation C.1 of the German Corporate
+Governance Code and Section 289f, Paragraph 2, Item 6 of the German Commercial Code
+and the status of the implementation of the competency profile in the form of a
+qualifications matrix are available in the Corporate Governance Declaration.
+E.ON Integrated Annual Report 2023
+The Supervisory Board and the Management Board also declared that E.ON has been in full
+compliance with the recommendations of the "Government Commission German Corporate
+Governance Code," dated April 28, 2022, published by the Federal Ministry of Justice and
+Consumer Protection in the official section of the Federal Gazette (Bundesanzeiger) on June
+27, 2022. The current version of the declaration of compliance as well as earlier versions
+are published on the Internet at www.eon.com.
+In the declaration of compliance issued at the end of the year, the Supervisory Board and
+the Management Board declared that E.ON was in full compliance with the
+recommendations of the "Government Commission German Corporate Governance Code,"
+dated April 28, 2022, published by the Federal Ministry of Justice in the official section of
+the Federal Gazette (Bundesanzeiger) on June 27, 2022, since the last declaration in
+December 2022.
+Corporate Governance
+Finally, the Supervisory Board resolved to extend Dr. Victoria Ossadnik's appointment as a
+Management Board member. Furthermore, it decided in mutual agreement with Patrick
+Lammers not to extend his appointment.
+thoroughly discussed the E.ON Group's medium-term plan for 2024 to 2026. The
+Supervisory Board was provided with information on a regular basis about the Company's
+cybersecurity, health, (occupational) safety, and environmental performance (in particular,
+key accident indicators) as well as current customer numbers, customer satisfaction, and
+the number of apprentices.
+= Contents Q Search ← Back
+To Our Investors
+In early 2023 the Supervisory Board Chairman held discussions with investors on topics
+specific to the Supervisory Board at a corporate governance road show.
+→ Report of the Supervisory Board
+Code
+Category
+Number of incidents of non-compliance with physical
+and/or cybersecurity standards or regulations
+Grid Resiliency
+→ GRI Index
+→ ESG Figures → EU Taxonomy
+→ Financial Calendar and Imprint
+→ SDG Index
+→ NFS Index
+Accounting Metric
+→ SASB Index
+Number of: (1) residential, (2) commercial, and (3) industrial Quantitative
+customers served mechanism (LRAM)
+Quantitative
+IF-EU-550a.1
+Data are not available.
+(1) System Average Interruption Duration Index (SAIDI),
+(2) System Average Interruption Frequency Index (SAIFI),
+and (3) Customer Average Interruption Duration Index
+(CAIDI), inclusive of major event days
+Quantitative
+IF-EU-550a.2
+IF-EU-000.A
+= Contents Q Search ← Back
+The System Average Interruption Duration Index (SAIDI) and the System Average Interruption Frequency Index (SAIFI) can be
+found in the chapter Security of Supply.
+→Security of Supply
+→ TCFD
+The Customer Average Interruption Duration Index (CAIDI) can be found in the chapter ESG Figures.
+Response
+→ Summary of Financial Highlights
+Green power sales: 67,832,212 MWh
+→ Independent Assurance Practitioner's Report
+Data are not available.
+→ ESG Figures
+(2) contain a lost revenue adjustment mechanism (LRAM)
+Percentage of electric load served by smart grid technology Quantitative
+IF-EU-420a.2
+Data are not available as E.ON's control system does not differentiate between conventional and smart grids.
+Our distribution grids are getting progressively smarter, which enables them to integrate more renewable energy and
+manage increasingly complicated energy flows in real time while remaining reliable.
+Customer electricity savings from efficiency measures, by Quantitative
+market
+IF-EU-420a.3
+Data on customer electricity savings from efficiency measures are not available.
+Nuclear Safety & Emergency Management
+→ Boards
+Total number of nuclear power units, broken down by U.S. Quantitative
+Nuclear Regulatory Commission (NRC) Action Matrix
+Column
+Description of efforts to manage nuclear safety and
+emergency preparedness
+Discussion and
+Analysis
+IF-EU-540a.2
+PreussenElektra is responsible for eight nuclear power plants (NPPs) in Germany. Isar 2 was the last NPP to end power
+operation on April 15, 2023. Since then, all eight NPPs have been decommissioned and are in various stages of dismantling.
+A breakdown of our nuclear power units by U.S. Nuclear Regulatory Commission Action Matrix is not applicable.
+PreussenElektra is fully integrated into our safety organization and embraces our high standards. Its extensive experience in
+plant operations and decommissioning helps it to further optimize its health and safety processes and procedures.
+→ Occupational Health and Safety
+→ Business Resilience Management
+7TRIF measures the number of reported fatalities and occupational injuries and illnesses per million hours of work. It includes injuries that occur during work-related travel that result in lost time or no lost time and/or that lead to medical treatment, restricted work, or work at a substitute
+workstation.
+Serious incidents and fatalities measures accidents and incidents that have caused serious or fatal injuries and that surpass a predefined severity threshold per million hours of work.
+⁹Lost time injury frequency measures work-related accidents resulting in lost time per million hours of work.
+10Near-miss frequency rate measures unplanned incidents that had the potential to result in an accident (but did not) per million hours of work.
+297
+E.ON Integrated Annual Report 2023
+Other Information
+→ Declaration of the Management Board
+→ Independent Auditor's Report
+IF-EU-540a.1
+Number of power and gas customers in Europe: 34.7 million
+This Integrated Annual Report was published on March 13, 2024.
+→ ESG Figures
+May 15, 2024
+May 16, 2024
+August 14, 2024
+-
+Quarterly Statement: January – March 2024
+2024 Annual Shareholders Meeting
+Half-Year Financial Report: January - June 2024
+November 14, 2024
+Quarterly Statement: January – September 2024
+-
+E.ON SE
+imprint
+Brüsseler Platz 1
+45131 Essen
+Germany
+Only the German version of this Integrated Annual Report is legally binding.
+This Integrated Annual Report contains certain forward-looking statements based on E.ON management's current
+assumptions and forecasts and other currently available information. Various known and unknown risks, uncertainties,
+and other factors could lead to material differences between E.ON's actual future results, financial situation,
+development, or performance and the estimates given here. E.ON assumes no liability whatsoever to update these
+forward-looking statements or to confirm them to future events or developments.
+Journalists
+T +49 201-184-4236
+eon.com/en/about-us/media.html
+Analysts, shareholders and bond investors
+T +49 201-184-2806
+investorrelations@eon.com
+299
+E.ON Integrated Annual Report 2023
+IF-EU-420a.1
+T +49 201-184-00
+info@eon.com
+www.eon.com
+= Contents Q Search ← Back
+financial calendar
+E.ON Integrated Annual Report 2023
+Total electricity delivered to: (1) residential,
+Quantitative
+IF-EU-000.B
+(2) commercial, (3) industrial, (4) all other retail customers,
+and (5) wholesale customers
+Length of transmission and distribution lines
+Quantitative
+IF-EU-000.C
+Total electricity generated, percentage by major energy
+Quantitative
+IF-EU-000.D
+source, percentage in regulated markets
+Total wholesale electricity purchased
+Quantitative
+IF-EU-000.E
+11 Attributable share of electricity from combined heat and power plants for E.ON's district heating networks.
+12E.ON's nuclear generation ended in 2023 due to Germany's phaseout of nuclear power.
+→ Sustainable Products and Services
+Total length of power networks: 1,110 thousand kilometers
+Total length of gas networks: 147 thousand kilometers
+→ ESG Figures
+Owned generation by energy source in percentages
+Natural gas/oil¹¹: 15.0
+Nuclear 12: 42.0
+Coal 11: 1.0
+Other (includes biomass, wind, and solar): 42.0
+→ ESG Figures
+Data are not available.
+298
+A more detailed breakdown of our customer groups cannot be provided.
+Percentage of electric utility revenues from rate structures Quantitative
+that (1) are decoupled and
+Quantitative
+→ Occupational Health and Safety
+Code
+Category
+Energy Resource Planning
+Greenhouse Gas Emissions &
+Accounting Metric
+Sustainable Accounting Standards Board ("SASB") Index
+→ Financial Calendar and Imprint
+→ SASB Index
+→ SDG Index
+→ Boards
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ TCFD → ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ Summary of Financial Highlights
+→ Declaration of the Management Board
+Other Information
+E.ON Integrated Annual Report 2023
+292
+→ Security of Supply
+FOR THE GOALS
+= Contents Q Search ← Back
+→ Working Conditions and Employee Development
+→ Energy Affordability
+→ Compliance and Anticorruption
+→ Diversity and Inclusion
+Response
+→ ESG Materiality and Stakeholder Engagement
+→ Community Involvement
+→ Occupational Health and Safety
+→ Climate Protection
+→ Human Rights and Supply Chain Management
+→ Sustainable Products and Services
+→ Environmental Management
+→ EU Taxonomy
+(1) Gross global Scope 1 emissions, percentage covered
+under (2) emissions-limiting regulations, and (3) emissions-
+reporting regulations
+Quantitative
+IF-EU-110a.1
+→ Declaration of the Management Board
+→ Independent Auditor's Report
+→ Independent Assurance Practitioner's Report
+→ Summary of Financial Highlights
+→ TCFD
+→ ESG Figures → EU Taxonomy
+Other Information
+→ GRI Index
+→ Financial Calendar and Imprint
+Accounting Metric
+Category
+Discussion of long-term and short-term strategy or plan to Discussion and Analysis
+manage Scope 1 emissions, emissions reduction targets,
+and an analysis of performance against those targets
+→ NFS Index
+PARTNERSHIPS
+E.ON Integrated Annual Report 2023
+4Based on the emission factors of the national residual mixes for specific geographic regions. A country's residual mix emission factor represents the emissions and generation that remain after certificates, contracts, and supplier-specific factors have been claimed and removed from the
+calculation (source: EPA).
+5Power distribution losses in Sweden were completely offset by the purchase of green electricity.
+Scope 1: 2.01 million metric tons of CO2e.
+E.ON discloses its Scope 1, 2, and 3 GHG emissions.
+= Contents Q Search ← Back
+Our disclosures are based on CO2 equivalents, which include GHG in correspondence with the GHG Protocol.
+In line with the Kyoto Protocol, the baseline year is 1990. GWP is relative to a 100-year time horizon.
+Our GHG emissions disclosures encompass all subsidiaries and generation assets that are fully consolidated in E.ON's financial
+statements. Subsidiaries with less than ten employees are not included if their activities do not have a material impact on the
+different Scope 1-3 categories.
+293
+The percentage of Scope 1 GHG emissions covered under emissions-limiting regulation or emissions reporting-based
+regulations (EU-ETS allowances and the Swedish Carbon Tax) is approximately 56 percent.
+IF-EU-110a.2
+→ Climate Protection
+Purchased power sold to end-customers (location-based) ¹: 35.95 million metric tons of CO2e²
+Purchased power sold to end-customers (market-based)¹: 30.48 million metric tons of CO2e2
+Power distribution losses (location-based)³: 3.19 million metric tons of CO2e
+Power distribution losses (market-based) 4: 5.85 million metric tons of CO2e5
+→ Climate Protection
+¹Scope 3 emissions from purchased power and the combustion of natural gas sold to end users (energy sold to our residential and B2B customers), according to the GHG Scope 3 protocol. The emissions from distribution losses from energy sold to sales partners and the wholesale market
+are accounted for under our Scope 1 and Scope 2 emissions accordingly.
+2Includes purchased power at EV charging points owned by E.ON and accessible by the public.
+3Based on the emission factors of the national electricity mixes for specific geographic regions (source: IEA).
+Greenhouse gas ("GHG") emissions associated with power Quantitative
+deliveries
+17
+ACTION
+13 CLIMATE
+Human rights
+Combating corruption and bribery
+Integrated Annual Report 2023
+→ Business Model
+→Risks and Chances Report
+→ Climate Protection
+Social matters
+→ Sustainable Products and Services*
+→ Working Conditions and Employee Development*
+→ Diversity and Inclusion*
+→ Security of Supply
+→ Energy Affordability
+→ Customer Satisfaction*
+→ Data Protection, Cybersecurity, and Product Safety*
+→ Occupational Health and Safety*
+→ Business Resilience Management*
+Employee matters
+Risks
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+= Contents Q Search ← Back
+→ TCFD
+Environmental matters
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+→ SDG Index → SASB Index
+Non-Financial Statement ("NFS") Index O
+The NFS Index shows where in the Integrated Annual Report 2023 the required content of the German CSR Directive Implementation
+Act (Section 315b, 315c in conjunction with Sections 289b to 289e of the German Commercial Code (German abbreviation: "HGB")) are
+disclosed.
+In addition, E.ON reports in line with reporting requirements of Regulation 2020/852 of the European Parliament and of the Council ("EU
+Taxonomy") in the chapter entitled EU Taxonomy as well as in the EU Taxonomy section in the chapter Other Information.
+Aspects Subject to Reporting Requirements
+Business model
+→ Boards
+(1) Number of customers served in markets subject to
+renewable portfolio standards (RPS) and (2) percentage
+fulfillment of RPS target by market
+→ Human Rights and Supply Chain Management*
+*Topics identified as not material in E.ON's 2023 materiality analysis but reported due to their relevance for various stakeholders and for environmental, social, and governance ("ESG")
+rankings and ratings.
+GENDER
+EQUALITY
+7
+AFFORDABLE AND
+CLEAN ENERGY
+8
+DECENT WORK AND
+5
+INDUSTRY, INNOVATION
+AND INFRASTRUCTURE
+11
+SUSTAINABLE CITIES
+AND COMMUNITIES
+12 RESPONSIBLE
+CONSUMPTION
+AND PRODUCTION
+ECONOMIC GROWTH
+→ Compliance and Anticorruption*
+QUALITY
+EDUCATION
+GOOD HEALTH
+291
+E.ON Integrated Annual Report 2023
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+AND WELL-BEING
+→ TCFD
+→ Boards
+→ SDG Index
+→ SASB Index
+Sustainable Development Goals ("SDG")-Index
+The following index presents the reported sustainability activities of E.ON in the context of the United
+Nations Sustainable Development Goals ("SDGs").
+Contribution to UN Sustainable Development Goals
+→ Independent Auditor's Report → Independent Assurance Practitioner's Report
+→ ESG Figures → EU Taxonomy → GRI Index → NFS Index
+Air Quality
+Air emissions of the following pollutants:
+(1) NOx (excluding N₂O), (2) SOx, (3) particulate matter
+(PM10), (4) lead (Pb), and (5) mercury (Hg); percentage of
+each in or near areas of dense population
+IF-EU-150a.1
+Not applicable.
+Quantitative
+IF-EU-150a.2
+Not applicable.
+Average retail electric rate for (1) residential,
+Response
+Quantitative
+Data are not available.
+(2) commercial, and (3) industrial customers
+Typical monthly electric bill for residential customers for (1) Quantitative
+500 kWh and (2) 1,000 kWh of electricity delivered per
+month
+IF-EU-240a.2
+Data are not available.
+Number of residential customer electric disconnections for Quantitative
+non-payment, percentage reconnected within 30 days
+IF-EU-240a.1
+Discussion of impact of external factors on customer
+affordability of electricity, including the economic
+conditions of the service territory
+Quantitative
+Category
+Other Information
+→ Declaration of the Management Board
+→ Independent Auditor's Report
+→ Independent Assurance Practitioner's Report
+→ Summary of Financial Highlights
+→ TCFD
+Code
+→ ESG Figures → EU Taxonomy
+→ NFS Index
+→ Financial Calendar and Imprint
+Accounting Metric
+Coal Ash Management
+Amount of coal combustion residuals ("CCR") generated,
+percentage recycled
+Total number of coal combustion residual ("CCR")
+impoundments, broken down by hazard potential
+classification and structural integrity assessment
+Energy Affordability
+→ GRI Index
+E.ON Integrated Annual Report 2023
+IF-EU-240a.3
+→ SDG Index → SASB Index
+(1) Total recordable incident rate ("TRIR"),
+(2) fatality rate, and (3) near miss frequency rate ("NMFR")
+End-Use Efficiency and Demand
+Quantitative
+IF-EU-320a.1
+→ GRI Index
+Workforce Health and Safety
+→ NFS Index
+→ SDG Index
+→ SASB Index
+= Contents Q Search ← Back
+E.ON uses the following key performance indicators to monitor and report incidents:
+Total recordable injury frequency (employee "TRIF"): 2.77 per million hours of work?
+Serious incident and fatality rate (employee "SIF"): 0.03 per million hours of work
+Lost-time injury frequency (employee "LTIF"): 2.17 per million hours of work
+Near miss frequency rate ("NMFR"): 40.32 per million hours of work 10
+Fatal accidents: 1
+TRIF, SIF, LTIF, and fatal accidents are reported for both E.ON employees and contractors' employees, the latter are disclosed in
+the chapter Occupational Health and Safety. NMFR is only reported for E.ON employees. Data on the total recordable incident
+rate ("TRIR") are not available.
+→ Boards
+→ Boards
+→ EU Taxonomy
+→ Independent Auditor's Report
+→ TCFD
+= Contents Q Search ← Back
+In 2023 around 23,900 electricity customers and 2,400 gas customers were disconnected. These figures refer only to
+customers of E.ON Energie Deutschland GmbH. Data from other entities are not available at the time of publication.
+Data on the number of customers reconnected within 30 days are not available. Of roughly 26,3000 total disconnections, about
+14,600, or 55.6 percent, were carried out regardless of time in 2023.
+→ Energy Affordability
+Discussion and
+Analysis
+IF-EU-240a.4
+→ ESG Figures
+Information is not available.
+E.ON Integrated Annual Report 2023
+Other Information
+→ Declaration of the Management Board
+→ Summary of Financial Highlights
+→ Financial Calendar and Imprint
+→ Independent Assurance Practitioner's Report
+296
+→ ESG Figures
+295
+→ Environmental Management
+Other Information
+E.ON Integrated Annual Report 2023
+294
+→ Environmental Management
+Data on lead (Pb), mercury (Hg), and the percentage of each indicator in or near areas of dense population are not available as
+they are not relevant for E.ON.
+Fossil-fueled power plants emit nitric oxide ("NOX"), sulfur dioxide ("SO2"), and dust. This type of power generation is no longer a
+core E.ON business. We therefore no longer consider it a key indicator. We now focus on small-scale, embedded generation
+units. Our NOx, SO2, and dust emissions are mostly attributable to small-scale gas-fired combined-heat-and-power (CHP) plants
+and larger district heat networks.
+NOx emissions: 2,501 metric tons6
+SO2 emissions: 828 metric tons
+Dust emissions: 53 metric tons6
+RPS mechanisms are commonly used in the United States. As E.ON operates in European countries, where the standards
+are not widely adopted, it is not applicable for E.ON. E.ON supplies more than 50 percent of its customers with green electricity
+products.
+→ On course for net-zero-Supporting paper for E.ON's decarbonization strategy and climate-related disclosures
+Data are not available.
+→ ESG Figures
+→ Sustainable Products and Services
+→ Climate Protection
+⚫ our reduction strategies that are not related to any emissions limiting and/or emissions reporting-based program
+⚫ the scope of our strategies, plans, and targets
+⚫ our activities and investments required to achieve targets and related risks
+⚫ our strategy to manage risks and opportunities associated with GHG emissions
+⚫ our performance against our reduction targets
+6For generation assets over 20 MW.
+Code
+IF-EU-110a.3
+Quantitative
+IF-EU-110a.4
+Quantitative
+→ Declaration of the Management Board
+IF-EU-120a.1
+→ SDG Index → SASB Index
+= Contents Q Search ← Back
+Response
+A discussion and/or analysis of the following topics can be found in the linked sources below:
+⚫ our long- and short-term strategy to manage our emissions
+⚫ our emissions reduction targets
+→ Boards
+→ ESG Figures
+→ Summary of Financial Highlights
+→ Independent Assurance Practitioner's Report
+→ Boards
+→ SDG Index
+→ SASB Index
+= Contents Q Search Back
+E.ON's water consumption from decentralized energy generation (Core business): <1 million cubic meters
+Fresh water withdrawal (Preussen Elektra): 203.1 million cubic meters
+Fresh water consumption (Preussen Elektra): 12.6 million cubic meters
+E.ON operates in European countries where the overall water risk is low to intermediate which leads at present to 0 percent for
+water withdrawal in regions with high or extremely high baseline water stress. See Water Risk Map in the chapter ESG Figures.
+Response
+With the end of electricity production at the Isar 2 NPP in April 2023, E.ON no longer uses cooling water to operate its plants.
+→ ESG Figures
+Number of environmental incidents of non-compliance associated with water: Two.
+Both incidents occurred in the United Kingdom. The severity of both incidents was low.
+E.ON's water-related activities involve the withdrawal of cooling water for the NPP operated by Preussen Elektra (until the
+decommissioning of Isar 2 on April 15, 2023), the withdrawal of fresh water by E.ON's water supply subsidiaries (such as RWW
+and Avacon Wasser), and smaller amounts relating to our distributed energy business. In addition, LEW operates a number of
+small and medium-sized run-of-river power plants in Germany with an installed capacity of 0.5 to 12 MW per plant.
+Based on available data, E.ON estimates the current and the possibility of future water scarcity in the relevant regions where
+E.ON uses freshwater for its operations to be low to medium.
+Descriptions of strategies and actions to minimize residual risks can be found under the following chapters:
+→ Environmental Management
+→ NFS Index
+→ GRI Index
+IF-EU-140a.3
+→ Independent Auditor's Report
+→ TCFD
+→ ESG Figures → EU Taxonomy
+Accounting Metric
+Water Management
+(1) Total water withdrawn, (2) total water consumed,
+percentage of each in regions with High or Extremely High
+Baseline Water Stress
+→ Financial Calendar and Imprint
+Category
+IF-EU-140a.1
+Number of incidents of non-compliance associated with
+water quantity and/or quality permits, standards, and
+regulations
+Quantitative
+IF-EU-140a.2
+Description of water management risks and discussion of
+strategies and practices to mitigate those risks
+Quantitative
+Code
+Combined Group Management Report
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→Risks and Chances Report
+Accountability
+Return on capital employed ("ROCE")
+The
+energy y crisis in 2022 accelerated the energy transition by
+putting the need for sustainable energy systems into even sharper
+focus. The energy transition is therefore not only an urgently
+necessary response to climate change, but also an opportunity for
+Europe and Germany to simultaneously remain competitive and
+resilient and thus pursue a sustainable path out of the energy
+crisis. The policy decisions of Germany's Easter package of
+renewables legislation show that the emphasis on energy security
+and energy autonomy-along with the resilient and digital energy
+infrastructure it requires-has become even more important. E.ON
+is one of Europe's largest operators of electricity and gas
+networks, and the growth strategy we launched in 2021 therefore
+puts us right on track to continue propelling and ensuring supply
+security and multisector decarbonization. The crisis has also made
+us realize that we must always think about sustainability, supply
+security, and energy affordability together and that the maxim of
+E.ON's actions must be to achieve a balance between these three
+requirements.
+Europe therefore remains right on course. We are the playmaker of
+Europe's energy transition and made significant progress in 2023.
+Overall, the situation on energy markets in 2023 improved
+compared with the severe turbulence of 2022. At E.ON, we
+perceive this in all our regions. The tensions are still noticeable,
+however, and our prudent planning reflects this. E.ON mastered
+last year's challenges by consistently implementing our strategy
+focusing on sustainability, digitalization, and growth—because this
+strategy has proven to be robust even in times of crisis. Our
+strategy to be and remain the green energy transition company in
+2023: Markets Calm Down, E.ON's Strategy Remains Right
+on Course
+Strategy
+Dialogue remains important during NPPs' dismantling as well. In
+2023 PreussenElektra held press events at nearly all its NPPs.
+Annual power plant talks with key local stakeholders took place in
+the fall as well. Some plants also have dialogue groups for nearby
+residents, in which Preussen Elektra also participated in 2023.
+People who live near Brokdorf, Isar, and Grafenrheinfeld NPPs and
+other stakeholders were given the opportunity to visit the plants
+on selected dates.
+E.ON subsidiary Preussen Elektra is responsible for the safe post-
+operation and dismantling of its nuclear power plants ("NPPs").
+Ongoing dialogue with stakeholders is essential. PreussenElektra
+communicates with a broad spectrum of stakeholders through
+press releases and briefings. The Company also uses events and
+forums to speak directly with its stakeholders and benefit from
+their feedback. The aim of all these measures is to provide
+transparent information and build trust.
+Stakeholder Dialogue on Safe Post-Operations and Plant
+Dismantling
+• Swedenergy: a private association of companies involved in
+electricity production, sale, and trading in Sweden.
+Germany is part of Europe's energy market. The shutdown of
+Germany's last nuclear power plants in April 2023 and its plan to
+phase out coal by 2030 make this fact increasingly important.
+Ensuring supply security and energy affordability can only be
+achieved by expanding renewables faster. Renewables expansion,
+in turn, promotes sustainability, but can only succeed if it is
+accompanied by significantly more and faster network expansion.
+• Energy UK: a trade association for energy in the United
+Kingdom.
+• E.ON executives take part in the Economic Council of the CDU
+e.V. and the Economic Forum of the SPD e.V.
+• Bitkom: through this industry initiative for a digital economy the
+Company is also represented in the Federal Association of
+German Industry (Bundesverband der Deutschen Industrie) and
+its European umbrella organization, BusinessEurope.
+• German Industry Initiative for Energy Efficiency (Deutsche
+Unternehmensinitiative Energieeffizienz, or "DENEFF"): a multi-
+industry network of companies and organizations dedicated to
+enhancing energy efficiency.
+• Federation of Germany Industries (German abbreviation: "BDI"):
+E.ON is engaged in the BDI through its membership in the
+Association of the German Interconnected Grid Systems
+Economy (German abbreviation: "VdV"). E.ON also supports the
+BDI through the Association for the Promotion of Germany
+Industry. BDI is a member of BusinessEurope, a European
+umbrella organization.
+• German Association of Energy and Water Industries (German
+abbreviation: "BDEW"): through the BDEW E.ON is also
+represented in two European trade associations, Eurelectric and
+Eurogas.
+E.ON is a member of numerous industry networks and trade
+associations in individual countries and at the European level. They
+enable companies to share information about climate protection,
+customer needs, and industry trends, and to represent shared
+interests to policymakers and regulators. Examples of these
+memberships include:
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+• European Distribution System Operators for Smart Grids
+("EDSO for Smart Grids"): European association promoting
+smart grids and the digitalization of the energy sector.
+→ Disclosures Regarding Takeovers
+We are also at a turning point. The energy transition is now
+primarily a heating transition, which already directly affects every
+individual or will do so in the future. For example, 2023 was
+already characterized by a strong desire among customers for
+more autonomy and sustainability. One of the upshots of this was
+high demand for heat pumps. The heating transition was thus
+already readily apparent in 2023. Making the energy transition a
+E.ON Integrated Annual Report 2023
+E.ON Integrated Annual Report 2023
+33
+The pace of our digitalization, which is a key success driver, is swift
+as well. We are digitalizing across E.ON. We defined technological
+standards for the entire E.ON Group in order to harmonize our IT
+landscape. Our common technology platform is designed to ensure
+our IT landscape's efficiency and reliability while maintaining a
+high degree of flexibility by means of a modular setup centered on
+an application-programming interface ("API"). This includes a
+continued focus on a clear cloud strategy. Using the cloud enables
+us to achieve greater stability and shorter recovery times, while at
+the same time enhancing the flexibility of our workloads'
+performance. E.ON has migrated more than 95 percent of
+applications from its data centers to the cloud, and we are already
+seeing that the cloud makes our data landscape more stable and
+secure. It forms the basis for the modernization of our business
+processes and simplifies and accelerates the development of new
+digital services for the energy transition. The digitalization of our
+Group provides us with greater efficiency, higher security, and
+more flexibility for swifter scaling. In a dynamic market
+environment like ours, digitalization can give us a significant
+competitive advantage. In addition, we are committed to providing
+our entire workforce with adequate training and development. We
+rolled out a new digital learning platform that provides all our
+employees with the skills they need to propel the digitalization of
+our business processes and products according to their individual
+requirements. These efforts are supported by a growing core of
+digital experts who promote digitalization projects in all our
+Alongside our existing partnerships with Berlin and Malmö, in
+2023 we forged our first strategic energy partnership in England
+with the city of Coventry-the headquarters of E.ON UK plc-to
+jointly develop and propel decarbonization as well as social
+projects.
+continued to expand by means of a Europe-wide strategic
+partnership with BMW for home charging as well as our
+acquisition of startup elvah. Elvah's app is designed to make it
+easier to find available, reliable, and affordable charging stations
+and also helps us better utilize our charging network.
+Demand for our sustainable energy solutions is likewise continuing
+to rise. Not only did our Future Energy Home business record
+growth by offering decarbonization solutions for households,
+primarily in newly tapped markets. Our eMobility business
+> At our partner Imerys in Belgium, for example, we installed a
+generating unit that runs entirely on industrial synthesis gases that
+result from Imerys's production processes. The unit can supply not
+only Imerys's production facility but also 40,000 households in the
+region with electricity year-round. In Poland we signed a contract
+to develop a project to generate energy from waste heat. These
+two projects alone will result in annual carbon savings of 81,000
+metric tons per year. These kinds of assets are still lighthouse
+projects, but we want to make them the standard. Among other
+things, they make a significant contribution to the competitiveness
+and decarbonization of Europe's economy. We therefore made
+tangible year-on-year progress, not only in further developing this
+business and growing E.ON, but also in delivering on E.ON's
+ambitions to make Europe's energy system more sustainable. <
+The primary feature of 2023 at our Energy Infrastructure
+Solutions ("EIS") business was the obtaining of new contracts that
+will enable us to offer our customers additional decarbonization
+solutions in the future.
+E.ON's wide range of products and services enables our
+customers and partners to displace over 100 million metric tons of
+CO2 annually.
+32
+Overall, this too demonstrates that the strategic course we set-
+measured by the high demand for intelligent solutions and
+products for decarbonizing households and industry-remains
+stable and will become increasingly important in the future.
+The successful implementation of our growth strategy which
+emphasizes our promise to provide secure and affordable energy
+was also reflected at Customer Solutions in 2023. Our dynamic
+management of prices, customer churn, and our portfolio made a
+significant contribution to stabilization after the crisis. Our focus
+was always on supply security, affordability, and a sustainable
+At Energy Networks, 2023 was primarily characterized by organic
+growth and the consistent implementation of our strategy.
+Ongoing renewables expansion led to a further increase in demand
+to connect these facilities to networks and to expand network
+capacity. Investments in the 2023 financial year went mainly
+toward network expansion and infrastructure modernization and
+digitalization. A significant proportion of Europe's renewables
+capacity is connected to the E.ON Group's grids; indeed, the one
+millionth renewables facility was connected to E.ON's network in
+Germany in October 2023. These networks are not only the
+backbone of the green energy transition-which E.ON's
+considerable investments continue to propel-but also one of the
+most critical pieces of social infrastructure. It is clear that the
+energy transition will not be possible without the underlying
+network infrastructure.
+> Without the requisite expansion and digitalization of networks,
+the energy transition will fail. It is technically feasible, but the
+question is at what price. Investments in networks can only be
+made in a reliable and economically attractive regulatory
+environment. Less bureaucracy and more innovation are
+necessary, too. <
+We are underlining the importance of this turning point by making,
+from 2024 onward, our decentralized infrastructure solutions
+business, Energy Infrastructure Solutions ("EIS"), a strategic
+business unit alongside our two existing segments, Energy
+Networks and Customer Solutions/Energy Retail.
+reality is one of the challenges of the decade ahead, not just for
+E.ON, but for Europe as a whole.
+= Contents Q Search ← Back
+→ Governance
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report →Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+Combined Group Management Report
+energy supply. Wherever it was economically feasible, E.ON
+always passed lower market prices through to households and
+reduced end-customer prices after the significant increases that
+resulted from the crisis in 2022.
+Combined Group Management Report
+→Internal Control System
+→ Governance
+Support for energy management and energy efficiency
+•
+• An active role in propelling the energy transformation in Europe
+A secure energy supply at reasonable prices
+Expectations
+Policymakers, media, society,
+and the general public
+Regions and communities
+Suppliers and business partners
+Investors
+• A safe, interesting, and inclusive work environment
+Employees
+Stakeholder
+Our business activities are strongly influenced by social needs and developments and
+the political decisions based on them.
+The transformation of Europe's energy system can succeed only if it is actively shaped
+and supported by people as consumers and citizens.
+We procure the services of numerous suppliers and subcontractors.
+Our investors' capital is essential for the successful development of our Company.
+Our employees' performance is crucial to our success.
+Our customers' purchasing decisions determine our success.
+Significance
+Stakeholder Groups
+Customers
+→ Sustainable Finance → Business Report
+Fair pay and equal opportunity
+• Information about our long-term value growth potential
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+⚫ Dialog
+Transparency
+•
+31
+Non-governmental organizations and
+sustainability experts
+We see universities and social institutions as important partners. Non-governmental
+organizations provide us with valuable information on public expectations.
+• Transparent information about how E.ON manages chances and risks
+A reliable, economical, and environmentally friendly energy supply
+Compliance with laws and regulations
+Transparent decision-making oriented toward the common good, fair treatment
+Active participation at the municipal level
+Transparency about planned measures
+Mutually beneficial collaboration
+Fair and reliable terms and conditions
+.
+•
+•
+.
+of customers, and innovative, forward-looking customer solutions
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→Risks and Chances Report
+→ Forecast Report
+→Internal Control System
+universities, and in-house as quickly as possible in its operating
+business:
+= Contents Q Search ← Back
+→ Disclosures Regarding Takeovers
+→ Internal Control System
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ Forecast Report →Risks and Chances Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+36
+E.ON manages two key business initiatives, known as innovation
+engines, to deploy innovations generated by outside start-ups, by
+• E.ON Group Innovation GmbH ("EGI") is our intragroup incubator
+and accelerator: EGI's business objective is to implement
+innovation projects together with our core business units and
+develop them quickly into marketable products and services. EGI
+is also responsible for our partnerships with universities, such as
+the Energy Research Center, a joint venture between E.ON and
+RWTH Aachen University, and our partnership with the
+Bits&Watts program at Stanford University in California.
+E.ON has worked in recent years to establish Group-wide
+structures and processes for in-house collaboration and
+partnerships to develop innovations. E.ON is convinced that new
+business models that are significant for its future business can be
+developed better, more easily, and faster in collaboration with
+universities and other scientific institutions as well as various
+partners and networks of a global innovation ecosystem. In 2023
+this integrated partnership approach enabled E.ON to extend its
+position in the implementation of energy transition projects as well
+as in innovation.
+Our Innovation division focuses on developing new customer
+solutions and deploying new technologies while assessing the
+opportunities and possibilities as well as the risks associated with
+the use of modern technology. The public and scientific-
+technological debate about artificial intelligence ("AI") and
+generative Al or Gen Al has led E.ON, too, to take a close look at
+their opportunities and risks. For example, E.ON is testing various
+Gen Al solutions for integrated knowledge and information flows,
+information on strategic trends, improved operational planning,
+the design and implementation of business processes, and for the
+creation of value for customers and employees.
+At E.ON, we focus on innovations to develop new solutions en
+route to climate neutrality. They help us quickly and reliably design
+safe, user-friendly digital products, processes, and systems for our
+Energy Networks and Customer Solutions segments as well as the
+E.ON organization.
+Innovation
+The sections of the Combined Group Management Report entitled
+Working Conditions and Diversity and Inclusion contain
+explanatory information about the main components of E.ON's
+people strategy as well as statements about diversity at E.ON.
+People Strategy
+The section of the Combined Group Management Report entitled
+Financial Situation as well as the E.ON on Capital Markets chapter
+contain explanatory information about E.ON's finance strategy.
+Finance Strategy
+CLIMATE
+ACTION
+13
+Collaboration in Global Networks and Partnerships
+Accelerates Innovations
+AND COMMUNITIES
+• E.ON One GmbH (see page 34) is a growth and sales platform
+for market-ready digital solutions. E.ON One acquires startups,
+integrates their digital solutions into E.ON's system architecture
+to ensure their scalability and operational reliability, and markets
+them to distribution network and sales companies in and outside
+E.ON.
+Energy Research: Foundation for Developing Climate-
+neutral Innovations
+.
+= Contents Q Search ← Back
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance
+→ Forecast Report →Risks and Chances Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+37
+An example of these innovations is an pilot project for dynamic
+pricing for public electric-vehicle charging that E.ON is currently
+conducting in Copenhagen. The Industry Innovations team is
+running another project called Zero.ON, which aims to help small
+and medium-sized enterprises record and quantify their carbon
+emissions.
+Central Innovation Projects and Scale Hubs: Two
+Successful, Mutually Beneficial Approaches to Innovation
+E.ON's central innovation projects are initiated in response to
+specific challenges and requests from its units. The central
+Innovation division alone managed 117 innovation projects in
+2023. It also launched 76 new projects and handed 40 over to our
+units to be integrated into the operating business. The innovation
+projects handed over in 2023 alone currently promise an
+estimated €230 million in sales growth over the next five years.
+These innovation engines and close collaboration with the business
+units' innovation activities enable E.ON to ensure that it
+implements its innovation strategy effectively and efficiently.
+Seagrass holds a financial services permission, which allows it to
+act as an intermediary on the carbon certificate market and bring
+together the market's supply and demand sides. Seagrass
+cooperates with an established exchange (ACX) to process carbon
+certificate purchases and sales.
+supplies E.ON with an Al-based technology that uses acoustic
+signals to swiftly detect and analyze faults in substations.
+E.ON held its successful Grid Startup Challenge innovation
+program for the fifth year running in 2023. All 18 E.ON network
+companies participated. The 2023 event again yielded six new
+pilot projects that help make network infrastructure more efficient,
+sustainable, and resilient. For example, international startups Qube
+and Aeromon support E.ON subsidiary Westenergie by providing
+autonomous, compact laser sensors for detecting methane leaks in
+gas distribution networks. Another startup, Neuron Soundware,
+Since 2018, E.ON has worked with six other multinational energy
+utilities from Europe, North America, Australia, and Asia in Free
+Electrons, a global accelerator program. The aim is to jointly
+identify promising startup solutions that enable and accelerate the
+energy transition. In 2023 we reached two new milestones: we
+entered into partnerships with U.S.-based Rondo to use heat
+storage help decarbonize industrial processes and with Naked
+Energy of the United Kingdom, whose solar thermal and hybrid
+technology we use to develop renewable heat solutions for large-
+scale industrial and urban decarbonization projects.
+Global Partner Network Helps Deploy Innovations across
+E.ON Group
+In 2023 E.ON successively expanded its collaboration with global
+partners, whose networks yield innovation projects and the
+development of new business models. E.ON is thus pursuing its
+goal of drawing on a consistently well-filled innovation pipeline to
+continually deploy innovations in its operating business. In
+addition, E.ON tests the possibilities of new business activities,
+particularly together with its innovation teams in Silicon Valley
+(United States) and Tel Aviv (Israel), and monitors the development
+of disruptive innovations in which it sees the potential to generate
+new business opportunities or set market standards.
+Global Innovation Ecosystem Affords Access to New
+Technologies and Solutions
+such as Ectocontrol, whose purpose is to deliver optimal, holistic,
+and data-based control of Ectogrid, E.ON's fifth-generation low-
+temperature grid.
+In 2023 E.ON's research and technology team again extended its
+international academic influence through a collaboration with
+Stanford University in California. We also successfully completed
+16 projects as part of our long-standing partnership with RWTH
+Aachen University in Germany; 19 more are currently in progress,
+including strategically important and business-oriented projects,
+E.ON conducts extensive research activities to gain important
+insights into key strategic technologies and developments of the
+future. We focus on four topics: technology forecasts and
+analyses, the establishment and design of distributed sustainable
+energy systems, and the development of programs for
+comprehensive decarbonization and sustainable heat supply.
+Seagrass: A New Concept for Trading Carbon Certificates
+Seagrass Limited, a new E.ON subsidiary founded in 2023, is
+tapping the potential of the voluntary carbon market to accelerate
+the transition to net-zero emissions and propel decarbonization
+globally. One example is the Seagrass Carbon Map. It shows the
+locations and projects that back carbon certificates. Seagrass also
+increases transparency in the carbon certificate market by
+providing additional information—such as satellite images, land
+use, and biomass data-on the projects' locations. A prototype of
+the Seagrass Carbon Map was presented at COP28, the UN
+Climate Change Conference in Dubai.
+11 SUSTAINABLE CITIES
+AFFORDABLE AND
+CLEAN ENERGY
+7
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+34
+Digitalization will be a cornerstone of the energy landscape of the
+future. The transition toward an interconnected, volatile, and
+networked energy world is being accompanied by increasing
+complexity that can only be managed through comprehensive
+digitalization. Digitalization is thus an important lever in E.ON's
+growth strategy and the basis for generating additional value in its
+core business over the long term. E.ON's objective is to become
+one of the leading digital energy companies and to fundamentally
+transform its products, processes, and services into data-driven
+and highly interconnected solutions. Our digital transformation is
+proceeding along four strategic pathways: optimizing internal
+operations, engaging customers and partners, transforming and
+developing new business areas, and enhancing employees' digital
+skills. The centerpiece of our digital transformation is a common
+technology platform ("CTP") for the entire Group. The CTP will
+serve as the basis for standardizing and harmonizing all
+applications in the E.ON Group necessary for the energy transition
+now and in the future. It will enable us to develop new digital
+energy solutions while maintaining the highest security standards.
+The foundation of E.ON One has enabled the E.ON Group to pursue
+the objective of offering and operating innovative digital energy
+solutions for the external market and for E.ON Group companies.
+E.ON One's portfolio is formed by targeted investments in E.ON's
+own innovations and in startups. This will make it possible to
+smartify networks and render energy consumption more
+Digitalization
+unit's management team is responsible for taking action to
+enhance sustainability and to meet the unit's sustainability targets.
+This decentralized approach enables the units to contribute to
+E.ON's Group-wide targets for issues like climate protection and
+corporate governance, while also tailoring their actions to their
+specific needs. Each unit has sustainability staff who reinforce
+awareness, coordinate projects and initiatives, and monitor
+progress toward targets. They share information at regular
+intervals with our Sustainability Council and the E.ON Group's
+Sustainability team.
+ESG aspects are systematically embedded into E.ON's central
+control and management processes. In addition, each business
+Climate protection will be one of the key drivers of E.ON's future
+growth. The Science Based Targets initiative ("SBTi") validated
+E.ON's climate targets in May 2022. They are consistent with
+keeping global warming to 1.5°C above preindustrial levels. In
+addition, E.ON pledges for its Scope 1 and 2 emissions to achieve
+climate neutrality by 2040 (and to cut Scope 1 and 2 emissions by
+roughly 75 percent by 2030). E.ON intends for its Scope 3
+emissions to be climate-neutral by 2050 (and to reduce them by
+about 50 percent by 2030). All reductions are relative to 2019.
+These objectives set a course that is both ambitious and viable: a
+reduction path consistently aligned with the new energy world and
+E.ON's strategy. In addition, E.ON voluntarily offsets a portion of
+the emissions it is currently unable to avoid. Offsets help fund
+measures that prevent or remove carbon emissions outside our
+value chain. All offsets are currently not factored into E.ON's
+climate targets, but rather are made at the product level. E.ON's
+most important offsetting program is the partnership it has had
+since 2021 with the LEAF Coalition, which stands for Lowering
+Emissions by Accelerating Forest Finance. LEAF offsets help
+protect tropical forests and manage them sustainably. E.ON's
+LEAF program will initially run through year-end 2027.
+E.ON's strategy fits seamlessly with the European Union's
+decarbonization agenda. Europe's distribution networks-E.ON's
+biggest business-are where the energy transition is happening.
+The investments necessary to upgrade, expand, and digitalize
+these networks through 2030 are estimated at over €425 billion.
+The European Commission's desire to accelerate this expansion
+will be an additional driver.
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance
+→ Forecast Report →Risks and Chances Report
+Sustainability
+"Making new energy
+We are the playmaker of change in the energy industry. Leading
+the way for innovative, sustainable, digital-first solutions that
+transforming the way Europe is powered for all.
+work"
+The use of hydrogen as a substitute for coal, gas, and oil in
+industry will continue to play an important role in the
+transformation of the energy system. Extensive investment in
+energy infrastructure is necessary here, too. All of this offers us
+new opportunities and again reaffirms E.ON's strategic course.
+E.ON laid the foundation stone for the energy transition in the
+heating sector by creating a digital heat map for municipalities and
+citizens, which we officially presented to the Federal Minister for
+Housing, Urban Development, and Construction in November
+2023.
+These are all important steps on the path to a sustainable
+transformation of the energy system. It is a long-term task and
+requires political support and appropriate framework conditions. It
+is becoming increasingly clear that the energy transition has
+reached one of its larger challenges: the heating transition. This
+will require considerable investments in networks and a
+fundamental reconfiguration of the entire infrastructure. Being an
+active partner to around 6,000 municipalities in Germany positions
+E.ON well to successfully support and implement municipal heat
+planning and Germany's Building Energy Act.
+In 2023 E.ON also reassigned its central innovation activities to its
+digital division. The new organizational setup reflects E.ON's
+conviction that digital innovations in particular-like Elna, a smart
+meter service we launched in Sweden, and Evercharge, a solution
+for preventing charging point outages-are key value drivers in the
+energy transition.
+business areas and by equipping all employees with the modern
+technical tools they need for their daily work.
+= Contents Q Search ← Back
+→ Disclosures Regarding Takeovers
+This clear purpose send an unmistakeable message. It indicates―
+as our mission statement already implies-that we will continue to
+emphatically implement our established strategy whose three key
+elements are sustainability, digitalization, and growth.
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+sustainably. E.ON One focuses on three business areas: grid
+management, grid operations, and energy management solutions.
+These areas form the basis of a successful energy transition. E.ON
+One offers a wide range of energy management solutions that give
+customers more transparency about their consumption and that
+aims to optimize consumption and generation.
+Commitment to the UN Sustainable Development Goals
+> The United Nations Sustainable Development Goals ("SDGs") of
+its 2030 Agenda for Sustainable Development provide a blueprint
+for a better and more sustainable future. Adopted in 2015, the 17
+SDGs and 169 subgoals address a wide range of global challenges.
+We recognize the SDGs' importance. Our Management Board
+underscored this support by issuing a self-commitment to the
+SDGs in June 2018. E.ON's core business activities enable it to
+play a considerable role in fostering the SDGs 7 (Affordable and
+Clean Energy), 11 (Sustainable Cities and Communities), and 13
+(Climate Action). All of E.ON's other contributions to the UN SDGs
+can be found in the SDG Index. <
+power and gas across all sectors (households, transportation,
+buildings, and industry).
+E.ON is thus well positioned to propel the energy transition and
+satisfy the increasing demand for sustainable solutions. All
+business units benefit from robust growth in the demand for green
+EIS's activities encompass innovative energy solutions that aim to
+help cities, municipalities, and industrial customers achieve their
+climate targets cost-effectively. E.ON aims for its EIS business unit
+to achieve additional growth and become the preferred
+transformation partner for sustainable, innovative energy
+solutions. EIS's core business consists of a portfolio of solutions for
+decentral power, heat, and cooling plants as well as solutions for
+energy efficiency and decarbonization along with other energy
+services. E.ON sees green hydrogen in particular as a key strategic
+growth opportunity over the medium term, and founded E.ON
+Hydrogen GmbH to meet rising demand for green gases in the
+future. Hydrogen will play an essential role in the climate-neutral
+energy system of the future. E.ON plans to develop a national and
+international hydrogen business. Our international footprint in
+Europe gives us optimal local conditions for future hydrogen
+clusters, for example in the North Sea region. Selected
+partnerships for developing this business include, for example,
+French energy company EDF, Everwind Fuels, Tesla, and
+Fortescue Future Industries.
+►In 2023 E.ON sold 23,923 charging points for residential and
+business customers in many European countries. ◄
+The expansion of suitable eMobility infrastructure is another key
+strategic pillar. The eMobility market continues to undergo change
+and is characterized by strong growth: policymakers want at least
+15 million electric vehicles to be registered in Germany by 2030.
+The time for rapid growth activities is now, because all attractive
+locations for the charging infrastructure necessary for this
+objective will presumably have been allocated in the years ahead.
+Our objective is to enlarge our current market position and become
+one of Europe's leading operators of charging infrastructure by
+2030.
+= Contents Q Search ← Back
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ Forecast Report →Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+35
+Growth in the Customer Solutions Segment
+The Customer Solutions segment focuses on the offering of energy
+solutions (such as Future Energy Home or "FEH," eMobility, and
+green gas) and the decentral activities of the Energy Infrastructure
+Solutions ("EIS") business, as well as power and gas sales. This is a
+scalable business model with comparatively low capital
+requirements and focuses on private households and small and
+medium-sized enterprises. E.ON's objective for this business is to
+retain its roughly 47 million customers (including customers in
+Turkey and at ZSE in Slovakia) in the long term by offering them
+sustainable energy solutions and services and thus reducing their
+environmental footprint and reaching energy conservation targets,
+particularly regarding residential customers' gas consumption. So
+that this objective can be achieved at competitive costs, E.ON
+systematically pursues digitalization, which promotes optimal
+operational efficiency, superior customer satisfaction and loyalty
+(customer relationship management), and cross-selling
+opportunities. In addition, E.ON focuses primarily on offering
+distributed energy systems for households, such as the self-
+generation of green solar power, energy storage, heat, and
+eMobility solutions. The European Commission's solar strategy for
+the EU, which includes the target of doubling Europe's solar power
+capacity by 2025, remains an additional growth driver.
+This is among the reasons why E.ON is one of Europe's leading
+distribution system operators. E.ON has a regulated asset base
+("RAB") of €42 billion, and its regulated business generates a large
+share of its EBITDA. E.ON's strategic objective is therefore to
+remain Europe's leading energy and infrastructure partner. A large
+portion of investments during the 2024-2028 planning period will
+again go toward network expansion and a variety of network
+projects. The Forecast Report contains details about planned
+investments.
+where legally possible and economically sensible, make its existing
+gas networks hydrogen-ready. These investments will help pave
+the way toward climate-neutral gas networks.
+The energy and heat transitions will alter the role of gas networks
+as well. E.ON is already working on plans, such as making gas
+network infrastructure hydrogen-ready. E.ON will therefore,
+The transition to a new, sustainable, and interconnected energy
+world will require considerable investments in physical and digital
+assets. As stated above, this applies above all to the Energy
+Networks segment, whose Networks are the platform for a
+successful energy transition. Ongoing renewables expansion in
+particular will require grids to grow at a similar pace. New network
+connections and connected load will increase sharply amid the
+energy transition owing to changes in customer behaviour. The
+energy transition alone therefore represents an unprecedented
+growth opportunity for E.ON, an opportunity that is being further
+accelerated by the current developments in Europe's energy
+system. Consequently, this growth will be accompanied by a
+suitable and sensible digitalization of networks because they are a
+key component of E.ON's growth strategy and a prerequisite for
+the implementation of the energy and climate transition in
+distribution networks. The use of smart-grid technology (such as
+smart energy meters and smart transformer stations), the
+integration of external data, and the standardization of
+construction and operating processes will make it possible to
+realize considerable potential. Where necessary for technical
+reasons and economically feasible, E.ON will acquire the capability
+to monitor and control its distribution networks across all voltage
+levels in order to optimize their operation. Sensors and smart
+metering and control technology will enable real-time control of
+distributed generation and consumption.
+Growth in the Energy Networks Segment
+transformation of the economy is necessary for this as well. E.ON
+is aiming for earnings growth in both the Energy Networks and
+Customer Solutions segments, supported by continual efficiency
+improvements. The focus is primarily on achieving operational
+excellence. We are likewise aware that our growth strategy will
+only be successful if it is accompanied by changes within our
+organization, such as cultural change, diversity, and education.
+E.ON's core business consists of two segments: Energy Networks
+and Customer Solutions. E.ON operates power and gas networks
+in various regions of Europe and offers a broad range of customer
+solutions. The two businesses complement each other amid the
+transformation of global energy systems. They are also clear
+growth businesses that benefit from the sustainable
+transformation of various customers and industrial sectors. As a
+result, E.ON's business opportunities are expanding as well. Our
+growth strategy also fits seamlessly with Europe's decarbonization
+ambitions: because of the ongoing build-out of renewables and the
+resulting greater challenges for power networks, systemic change
+in power distribution networks will, as already mentioned, require
+investments of more than €425 billion. According to the most
+recent statements by the German Federal Network Agency, about
+€150 billion of investments will be required for distribution
+networks in Germany alone. E.ON's distribution networks alone
+will connect several million new renewables facilities over this
+time period. In addition, the growth in the aggregate energy
+demand of E.ON's customer groups is estimated to increase by
+more than 100 percent between 2020 and 2050. A sustainable
+Growth
+Energy Networks' top priorities include standardization,
+smartification, and the development of new digital solutions, all
+with the highest cybersecurity standards. Digitalization helps E.ON
+operate its networks even more efficiently and optimally manage
+the growing proportion of power from renewable generating
+facilities. The development of digital solutions like smart eMobility
+charging solutions as well as new services in front of and behind
+standard residential meters and smart meters are also part of
+E.ON's growth strategy.
+Below is an overview of E.ON's most important stakeholders, their
+significance for E.ON, and their expectations of E.ON.
+> The Climate Advocacy and Associations Report provides an
+overview of E.ON's lobbying approach as well as the associations
+and initiatives which the Company is part of and the key positions
+it holds in conjunction with its efforts to propel the energy
+transition. All of E.ON's lobbying activities and dialogue formats
+comply with national and European laws and guidelines on
+representing corporate interests and responsible lobbying. <
+Innovations: Pioneering New Solutions En Route to Climate
+Neutrality
+= Contents Q Search ← Back
+E.ON Integrated Annual Report 2023
+40
+E.ON has systematized the management of climate-related risks
+as well. In 2020 we further embedded climate-risk reporting into
+Group-wide risk management. More information can be found in
+the Risks and Chances Report. In addition, our reporting is guided
+by the recommendations of the Task Force on Climate-related
+Financial Disclosures ("TCFD"). An overview of the disclosures can
+The Group's Sustainability department took the lead in developing
+the Group-wide climate targets. It also monitors progress toward
+them (see "Goals and Performance Review" below). The units are
+supported in their decarbonization efforts by their HSE team and
+our wider HSE organization, which helps design energy-efficiency
+measures and shares ideas and best practices. This setup has
+enabled E.ON to make progress toward its company-wide
+reduction targets for direct and indirect emissions since the targets
+were adopted.
+Two other HSE policies that are more specific in nature-the HSE
+Function Policy and the HSE People Guideline-took effect back at
+the beginning of 2018. The Function Policy defines HSE roles,
+responsibilities, management approaches and tools, and minimum
+requirements for the entire organization. It empowers the HSE
+division to monitor our units' compliance with the obligation to
+have an environmental management system certified to ISO
+14001 or the Eco-Management Audit Scheme ("EMAS"). In
+addition, the Function Policy defines HSE standards for incident
+management. It thus replaces and updates the standards
+stipulated in previous company policies. The HSE People Guideline
+goes into greater detail, underlining the importance of
+environmental and climate protection and defining specific tasks.
+Our Code of Conduct contains general HSE rules with which all
+employees must comply.
+In addition, in late 2021 E.ON adopted an Environmental
+Protection Guideline. Information about it can be found in the
+Environmental Management chapter.
+In October 2021 E.ON revised its Health, Safety, Environment and
+Climate Protection Policy Statement. It clarifies that
+environmental and climate protection, just as occupational health
+and safety, are integral to E.ON's business operations. E.ON
+considers environmental and climate protection important and
+integral management tasks. The policy statement obligates E.ON
+to consider environmental and climate protection in all business
+decisions. E.ON's promise to use the best-possible technologies
+and procedures in its business processes will reduce its
+environmental impact and enhance its energy efficiency. In
+addition, it commits E.ON to comply with all health, safety, and
+environment ("HSE") laws and regulations and defines the
+appropriate management systems for this (ISO 45001, ISO 14001,
+and ISO 50001).
+Guidelines and Policies
+E.ON wants to reduce the size of its environmental footprint as
+well. Since 2004, the Company has disclosed the annual carbon
+emissions from its power and heat generation and from other
+business activities not directly related to generation. These include
+upstream and downstream emissions associated with E.ON'S
+business activities. E.ON calculates emissions using the globally
+recognized Greenhouse Gas Protocol Corporate Accounting and
+Reporting Standard ("GHG Protocol") issued by the World
+Resources Institute ("WRI") and the World Business Council for
+Sustainable Development ("WBCSD"). The E.ON Management
+Board updated the Company's climate targets in 2020. To achieve
+them, we have defined specific actions to reduce our emissions in
+all three scopes of the GHG Protocol (see "Goals and Performance
+Review" below). We use the Corporate Value Chain (Scope 3)
+Accounting and Reporting Standard to compile our Scope 3
+emissions. In addition, E.ON has included the achievement of its
+climate targets (Scope 1 and 2) in the Management Board's
+compensation system by means of the E.ON Sustainability Index.
+The purpose is to further embed ESG aspects like reducing carbon
+emissions into how E.ON runs its business.
+Distribution networks like E.ON's are the platform of the energy
+transition: they integrate renewables, connect producers and
+consumers, and manage complex energy flows in line with
+demand. Our solutions help customers of all kinds use energy
+more efficiently, produce their own renewable or low-carbon
+energy, and thus reduce their carbon footprint. In short, climate
+protection is an integral part of E.ON's business model. Our
+business activities help combat climate change, improve people's
+lives, and create a future worth living. For example, we support
+companies and communities in reducing their carbon emissions
+and expanding their eMobility charging infrastructure.
+E.ON's Approach
+Climate change and associated environmental damage pose a
+serious threat to people and nature. The use of fossil energy
+results in the emission of greenhouse gases ("GHG"). Renewable
+and low-carbon energy generation along with efficient energy use
+play a key role in reducing emissions and thus limiting global
+warming. The current geopolitical challenges to securing Europe's
+energy supply are not making this demanding task any easier. The
+transition to a low-carbon economy thus requires more joint
+efforts by all energy producers and consumers. This transition
+period poses a challenge to energy suppliers' competitiveness. But
+it also offers an opportunity to expand their business. Many
+countries, communities, and companies are already focusing on
+climate-friendly energy generation and energy-efficiency
+measures to achieve their carbon-reduction targets. E.ON's
+strategic focus on customer solutions for the efficient use of
+energy and smart energy networks fully aligns its business model
+with these global trends.
+GRI 3-3, GRI 305
+Climate Protection
+Climate Protection and Environmental Management
+Cash-conversion rate
+= Contents Q Search ← Back
+Dividend per share ("DPS")
+Significant Key Performance Indicators
+Management Control System
+Our big objective is for E.ON to be the sustainable platform for
+Europe's energy transition. In line with our guiding principle
+"Making new energy work," E.ON wants to be the driving force for
+change in the energy industry. The long-term and sustainable
+increase in shareholder value remains the focus of our strategy,
+which is geared toward sustainability, digitalization, and growth.
+A uniform Group-wide planning and controlling system is used for
+the value-based management of the Group as a whole and its
+individual businesses. This system forms the basis for a uniform
+mindset Group-wide, while at the same time allowing targeted
+steering impulses for individual business units.
+E.ON's Management System
+Effective as of the 2022 financial year, adjusted EBITDA,
+investments, and earnings per share based on adjusted net income
+("EPS") have been the most significant indicators for managing our
+aspired growth. The use of additional key financial and non-
+financial performance indicators is intended to ensure that our
+growth is in line with the various interests of our stakeholders and
+enable a holistic view of our performance. In particular, we focus
+on our customers, employees, shareholders, and bondholders,
+always in line with our environmental, social, and governmental
+responsibility as a leading international energy company. Including
+key non-financial indicators explicitly anchors sustainability
+indicators in particular in the ongoing management of our
+businesses.
+The following chart summarizes the key performance indicators
+used for management purposes.
+E.ON's Management System
+•
+•
+Most Significant Key Performance Indicators
+Adjusted EBITDA
+• Investments
+• Adjusted earnings per share based on
+adjusted net income ("EPS")
++
+Total shareholder return ("TSR")
+Evercharge helps E.ON expand its existing charging infrastructure
+while also lowering costs. Evercharge uses Al-based software that
+detects faults in the system before they are noticed by users or
+vehicles can no longer be charged. This predictive maintenance
+can shorten service times and reduce costs.
+→ Forecast Report
+→Internal Control System
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+38
+Adjusted earnings per share ("EPS") is equal to adjusted net
+income divided by the weighted average number of shares
+outstanding in the financial year. In addition to operating earnings,
+depreciation and amortization, interest income, tax and financial
+Investments are equal to investments in property, plant, and
+equipment, intangible assets, and share investments shown in the
+E.ON Group's Consolidated Statements of Cash Flows.
+Investments are the engine for the future growth and digitalization
+of E.ON's business as well as decarbonization. As a reflection of
+our strategy, they therefore continue to be a key indicator for
+managing our activities.
+Adjusted EBITDA is an earnings figure before interest income,
+income taxes, depreciation and amortization that has been
+adjusted to exclude non-operating effects. The adjustments
+include net book gains, certain restructuring expenses, the mark-
+to-market valuation of derivatives, and other non-operating
+earnings. Therefore, adjusted EBITDA is the indicator of
+sustainable earnings capacity and the appropriate key figure for
+determining the performance of our business.
+Most Significant Key Performance Indicators
+With our focus on long-term, sustainable, and value-oriented
+growth, the most significant key performance indicators are the
+main metrics for internal management and the assessment of our
+business development and thus also the cornerstones of our
+forecast.
+In addition to the management system, the compensation system
+for the Management Board is also designed to support the
+implementation of our strategy and thus the long-term success of
+E.ON through the sustainable, long-term, and value-oriented
+management of the Group. For this reason, the compensation of
+the members of the Management Board has also been linked to
+the development of selected key performance indicators. The new
+Management Board compensation system has been in place since
+January 2022.
+Other Key Performance Indicators
++
+⚫ ESG ratings
+Proportion of women in management positions
+Frequency of serious incidents and fatalities ("SIF")
+Net Promoter Score ("NPS")
+• Carbon emissions
+president of Eurelectric, the association of the European electricity
+industry; he was elected president in March 2023 and has
+officially been in office since June 2023. Eurelectric is an umbrella
+organization representing more than 3,500 European companies
+active in electricity generation, distribution, and supply. Direct
+members of Eurelectric are the national associations, including the
+German Association of the Energy and Water Industries (German
+abbreviation: "BDEW"), Swedenergy, and Energy UK.
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Risks and Chances Report
+→ Disclosures Regarding Takeovers
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Risks and Chances Report
+→ About this Report
+→ Governance
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+39
+= Contents Q Search ← Back
+Alongside the performance indicators described above, other
+financial and non-financial indicators play a role in the success of
+our business and our corporate responsibility. Operating cash flow,
+power and gas wheeling volumes, sales volume, as well as
+selected employee-related information are examples of other key
+performance indicators.
+Other Key Performance Indicators
+the management system as a key performance indicator to assess
+the efficiency of capital employed.
+Solid financing of our business activities is of great importance to
+realize our aspired long-term and sustainable growth in line with
+the fulfillment of our financial ambitions. For this reason, cash-
+conversion rate, which is an indicator of E.ON's ability to transform
+operating earnings into cash inflows, and debt factor, which is a
+proxy for our capital structure and ratings, are significant key
+figures in our management system. In addition, ROCE is included in
+We have made sustainability the core of our corporate strategy. In
+everything we do, we keep in mind the consequences of our
+actions. The progression of our carbon footprint (the Climate
+Protection chapter contains more information), the frequency of
+serious incidents and fatalities ("SIF") (the Occupational Health and
+Safety chapter contains more information), and the proportion of
+female managers are thus significant key performance indicators
+and
+part of our management system. In addition, our ESG ratings
+are incorporated into our management system. This provides a
+comprehensive assessment of our actions with respect to
+environmental, social, and governance matters.
+In order to suitably take into account the interests of our
+stakeholders in addition to our focus on growth, our management
+system also includes other significant key performance indicators.
+As a customer-oriented company, the ability to acquire new
+customers and retain existing ones is crucial to our success. Net
+Promoter Score ("NPS") measures customers' willingness to
+recommend E.ON to a friend or colleague (the Customer
+Satisfaction chapter contains more information). The
+attractiveness of our Company for investors is reflected in total
+shareholder return ("TSR") and dividend per share ("DPS"), which is
+part of TSR.
+Significant Key Performance Indicators
+likewise adjusted to exclude non-operating effects. This allows a
+holistic assessment of the earnings situation from the perspective
+of the shareholders of E.ON SE.
+results as well as non-controlling interests are included and
+→Internal Control System
+Scale Hubs Continue Promising Innovation Initiatives
+The team at our central Innovation division systematically scans its
+projects for potentially scalable or disruptive opportunities. The
+purpose is to identify new business ideas and develop them further
+with the aim of scaling up the most promising projects. We call
+these business initiatives scale hubs. The Adeje Verde ("Green
+Adeje") and Evercharge projects are two such initiatives. Adeje
+Verde (Adeje, Tenerife) aims to make solar energy available to an
+entire energy community consisting of almost 200 households.
+Surplus solar energy is no longer simply fed into the network, but
+shared with neighbors within a 2-kilometer radius of the Adeje's
+solar farm.
+Organization and Responsibilities
+Debt factor
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+→Internal Control System
+42
+3.71
+1The external GWP sources used are the BEIS, formerly DEFRA, the Naturvårdsverkets, the GHG Protocol, the Överenskommelse Värmemarknadskommittén 2022, and the IPCC AR5 report.
+2In accordance with the GHG Protocol, emissions from power and heat generation are divided into emissions from plants owned and operated by E.ON (Scope 1) and emissions from plants leased to, and
+operated by, customers (Scope 3). This improves our ability to manage our emissions and make progress toward our targets more transparent.
+3The GHG Protocol and BEIS attribute no direct CO2 emissions to energy generated at renewables facilities and nuclear power stations.
+4This figure does not include 2,292 metric kilotons of CO2 from biogenic emissions, in accordance with the GHG Protocol.
+5This figure does not include 2,177 metric kilotons of CO2 from biogenic emissions, in accordance with the GHG Protocol.
+6This figure does not include 2,876 metric kilotons of CO2 from biogenic emissions, in accordance with the GHG Protocol.
+7In 2023, we completed the groupwide introduction of the CH4 tool. The decrease in emissions is mainly due to the transition from the previous calculation methods to the now more accurate technical
+accounting method. This now takes into account the actual fugitive emissions associated with our gas distribution networks.
+8In 2021, we began introducing our tool for calculating CH4 emissions, which takes into account the latest regulatory requirements and enables gas grid losses to be separated into different categories in
+order to improve data quality and transparency. In 2022, we rolled out the tool further across the group.
+9To heat buildings.
+44
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+= Contents Q Search ← Back
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+2.88
+→ Forecast Report
+→ Employees and Society
+→Risks and Chances Report
+We recorded location-based Scope 2 emissions of 3.46 million
+metric tons of CO2e in 2023. The higher figure compared with the
+previous year resulted from the less green generation mix in our
+markets. We reduced power transmission and distribution losses
+and power procured externally for our own needs in absolute
+terms.
+E.ON's investments to maintain its networks help reduce network
+losses as well. E.ON's approach depends on the type of loss.
+Technical losses can be reduced through network optimization. For
+this purpose, we are upgrading our networks using smart-grid
+technology (more information can be found in the Security of
+Supply chapter). This enables the lines and transformers to adapt―
+in many cases automatically-to the actual production and
+consumption in a given grid segment. However, technical losses
+can only be reduced to a certain extent owing to the physical
+attributes of power grids. Alongside technical losses there are also
+commercial losses, which result primarily from theft.
+Scope 2 GRI 305-2
+Total CO2 equivalents in million metric tons¹
+Power distribution losses (location-based)²
+Power distribution losses (market-based) 3,4
+Purchased power (location-based)
+Purchased power (market-based)
+Total (location-based)
+→ Corporate Profile → Climate Protection and Environmental Management
+2.01
+0.05
+Total (market-based)
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Risks and Chances Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+Fuels combustion⁹
+Total
+2023
+2022
+2021
+1.874
+1.905
+2.176
+0.057
+0.898
+1.448
+0.05
+0.05
+0.04
+0.05
+0.05
+2023
+2022
+2021
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+E.ON reduced its location-based Scope 3 emissions-which always
+account for the largest share of its total carbon footprint-
+to 70.69 million metric tons in 2023. We recorded a significant
+reduction of over 10 percent year on year, mainly because of the
+electricity and gas we sell to end-customers.
+The factors again were portfolio streamlining as part of our B2B
+strategy, mild weather, and crisis-driven energy conservation. The
+market-based figure for power resold to end-customers declined
+even more-by more than 17 million tons of CO2e-relative to the
+prior year. One of the reasons is an increase in green power's share
+of total power sold (the Sustainable Products and Services chapter
+contains more information about our green power products).
+Scope 3 GRI 305-3
+Total CO2 equivalents in million metric tons¹
+Purchased power sold to end-customers (location-based)²
+Purchased power sold to end-customers (market-based)²
+Combustion of natural gas sold to end-customers²
+Purchased goods and services4
+→ Employees and Society
+→Risks and Chances Report
+Power and heat generation (leased assets)6
+Employee commuting
+Total (location-based)
+Total (market-based)
+2023
+2022
+2021
+35.953
+40.483
+51.55
+30.483
+42.513
+54.75
+Upstream processes of leased assets (leased vehicles)
+Business travel
+= Contents Q Search Back
+→ Forecast Report
+E.ON Integrated Annual Report 2023
+3.19
+3.14
+3.67
+5.85
+5.52
+5.56
+0.27
+0.25
+0.23
+0.32
+= Contents Q Search Back
+0.31
+3.46
+3.38
+3.90
+6.17
+5.83
+5.73
+1The external global warming potential ("GWP") sources used are the International Energy Agency ("IEA") and the Association of Issuing Bodies ("AIB").
+2Based on the emission factors of the national electricity mixes for specific geographic regions (source: IEA).
+3Based on the emission factors of the national residual mixes for specific geographic regions. A country's residual mix emission factor represents the emissions and generation that remain after
+certificates, contracts, and supplier-specific factors have been claimed and removed from the calculation (source: EPA).
+4Power distribution losses in Sweden were almost completely offset by the purchase of green electricity.
+49
+45
+0.17
+42
+be found in the Task Force on Climate-related Financial
+In 2022 the Group Sustainability department was incorporated
+into the Strategy, Sustainability, and Innovation division in order to
+integrate sustainability and climate protection even more closely
+into the Group's overall strategy.
+→ Employees and Society
+→ Forecast Report
+→Risks and Chances Report
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+E.ON's Scope 1 emissions amounted to 2.01 million metric tons of
+CO2e in 2023. They were thus significantly lower than the prior-
+year figure of 2.88 million metric tons of CO2e. The decrease is
+mainly attributable to the fact that our CH4 tool, whose rollout was
+completed in 2023, gives us a more accurate method of
+calculating fugitive emissions in our gas distribution networks.
+This method's adoption Group-wide ensures the comparability of
+fugitive CH4 emissions.
+Emissions from power and heat generation were primarily due to
+our distributed combined heat and power ("CHP") plants. Our
+disclosure of Scope 1 emissions from power and heat generation
+at leased plants has been more transparent since 2020. We report
+emissions from downstream plants leased by us as Scope 3
+emissions. These are plants that we installed at customers'
+premises and that they operate as lessees for their own needs. For
+heat, 61 percent of emissions come from owned generation plants
+and 39 percent from leased plants. For power, 38 percent of
+emissions come from owned power plants and 62 percent from
+leased plants.
+= Contents Q Search ← Back
+Fugitive emissions at E.ON consist predominantly of methane
+(CH4) from leaks in gas infrastructure as well as leaks of sulfur
+hexafluoride (SF6) and coolants used in energy distribution
+equipment.
+Total CO2 equivalents in million metric tons¹
+Power and heat generation², 3
+• Power and heat generation
+(leased assets)
+sold to end-customers
+• Combustion of natural gas
+Scope 3 (downstream)
+45%
++
+Company-owned vehicles
+•
+•
+Scope 1 GRI 305-1
++ Fuel combustion
+E.ON Integrated Annual Report 2023
+Our direct and indirect CO2e emissions totaled 70.70 million
+metric tons in 2023; of these, 3 percent were direct Scope 1
+emissions, and 97 percent were indirect Scope 2 and 3 emissions.
+Scope 1 emissions decreased by 30 percent compared with the
+previous year, indirect emissions by around 20 percent. The
+emissions figures relevant for management control purposes were
+used for these calculations: location-based Scope 2 emissions and
+market-based Scope 3 emissions.
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+= Contents Q Search ← Back
+Scope 1 are direct GHG emissions from fuels combusted in
+sources that we own or control, such as E.ON's power and heat
+plants and vehicle fleet. They also include fugitive methane
+emissions from our gas distribution networks.
+Scope 2 are indirect GHG emissions from the generation of
+electricity that the Company purchases to power its buildings,
+operations, and electric vehicles or that is classified as network
+losses in its power distribution networks. These emissions do not
+physically occur at E.ON's facilities but rather at the facility where
+the electricity is generated. This is why power distribution losses
+are classified as Scope 2 emissions but gas distribution losses as
+Scope 1 emissions. Emissions attributable to network losses are
+lower in grid segments with lots of renewables feed-in. In line with
+the GHG Protocol, we calculate Scope 2 emissions using a
+location-based method and a market-based method. For its own
+management decision-making, E.ON uses the figure determined
+by the location-based method, which is based on the respective
+national generation mix. The market-based method yields a
+different figure because it is based on the contractually
+attributable generation mix of the Company's electricity suppliers.
+However, the effort required to identify every single provider that
+feeds electricity into each of E.ON's networks would be
+considerable. We therefore use the emission factor of each
+country's residual generation mix. In most cases, this factor is
+significantly higher than the factor of the national generation mix.
+Network losses accounted for approximately 3 percent of the
+power E.ON distributed in 2023.
+43
+Scope 3 are indirect emissions that occur upstream and
+downstream along E.ON's value chain. They result primarily from
+the generation of the electricity the Company purchases and
+resells to its customers and the use of the gas sold to them.
+Since E.ON removed large-scale fossil-fueled power generation
+from its generation portfolio, it has procured power mainly from
+wholesale markets where the source of generation is often not
+traceable or information about the source is not reliable. When
+primary data are unavailable or of insufficient quality, the GHG
+Protocol recommends calculating emissions by using secondary
+data, such as industry-average data or government statistics. We
+therefore calculate the Scope 3 emissions from the generation of
+this power by using the official national emission factors of the
+countries in which we purchase power resold to end-customers.
+Furthermore, we also use market-based methods to calculate the
+emissions of power resold to end-customers. The Company can
+actively influence this figure by selling green power. This figure is
+therefore relevant for management control purposes.
+E.ON's 2023 Carbon Footprint
+Total CO2 Equivalents in Million Metric Tons
+Scope 1
+GRI 305-1
+2.01
+Scope 2¹
+GRI 305-2
+Scope 32
+GRI 305-3
+¹Location-based
+2Market-based
+3.46
+65.23
+Scope 3 also includes the emissions attributable to the production
+and use of the goods and services E.ON purchases. In line with the
+GHG Protocol, since 2020 we have divided our emissions from
+power and heat generation into emissions from "plants owned and
+operated" (Scope 1) and "plants owned but leased to and operated
+by lessee" (Scope 3) for increased transparency.
+Disclosures chapter.
+Own power and heat
+generation
+Scope 1
+= Contents Q Search ← Back
+→Internal Control System → Disclosures Regarding Takeovers
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report →Risks and Chances Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+41
+> E.ON's SBTi targets are explained in more detail in our publication
+"On course for net-zero-Supporting paper for E.ON's
+decarbonization strategy and climate-related disclosures." <
+In May 2022 the Science Based Target initiative ("SBTi") confirmed
+that E.ON's climate targets are consistent with the Paris
+Agreement's 1.5°C target. This means that E.ON's planned
+emissions reductions contribute to limiting global warming to
+1.5°C relative to preindustrial levels. To achieve this, we plan to
+reduce our Scope 1, 2, and 3 emissions by at least 50 percent by
+2030 relative to a 2019 baseline.
+Fugitive emissions
+Company-owned vehicles
+Our strategic transformation from a traditional energy supplier to a
+focused operator of energy networks and energy infrastructure
+and to a provider of innovative customer solutions has led to a
+reorientation of our efforts to reduce both our direct and indirect
+emissions. In 2020 the E.ON Management Board therefore set
+new climate targets that are explained below. In parallel, the
+Company developed KPIs that are relevant for management
+control purposes; they are used, among other purposes, to
+calculate the long-term compensation for Management Board
+members.
+A key element of this strategy is E.ON's partnership with the LEAF
+Coalition, which has been in place since 2021. LEAF, which stands
+for "Lowering Emissions by Accelerating Forest finance," is the
+largest private-public initiative against the deforestation of tropical
+rainforests. Participants include the Norwegian, British, American,
+and South Korean governments and more than 20 companies.
+LEAF's offset certificates aim to finance the protection of these
+forests and to support sustainable management approaches that
+closely involve policymakers and local stakeholders.
+> More details on our carbon offset strategy are described in the
+publication entitled "On course for net-zero-Supporting paper for
+E.ON's decarbonization strategy and climate-related disclosures."<
+from 2021 onward.
+At the same time, we are aware that carbon offsets will play a role
+in reducing emissions in the long term. The process can be used to
+offset a small portion of remaining emissions. Voluntary carbon
+markets and the purchase of highly reputable certificates are
+becoming even more important. That is why E.ON developed a
+comprehensive strategy for offsetting carbon dioxide emissions
+The Company funds measures to avoid or eliminate emissions
+outside its own value chain by means of offsets and corresponding
+emissions certificates. The associated projects are often located in
+developing and emerging countries. E.ON uses emissions
+certificates to offset emissions at the product level and does not
+factor the amounts offset into its own carbon footprint or the KPIs
+collected for its own climate targets.
+Under E.ON's holistic climate strategy, decarbonization measures
+follow a clear hierarchy: avoidance and reduction of emissions
+have the highest priority. E.ON primarily uses emissions
+certificates to offset those emissions that are currently
+unavoidable. All of E.ON's offsets by means of certificates are
+completely voluntary and in addition to our climate targets.
+CDP is one of the largest international associations of investors
+that independently assess the transparency and quality of
+companies' climate reporting. E.ON has reported data on its carbon
+emissions to CDP since 2004. In 2023 CDP again gave E.ON an A
+rating for tackling climate change: this rating recognizes the
+Company's leading role in climate protection. E.ON is therefore
+among the best 346 that in 2023 achieved an A rating out of
+nearly 21,000 that were assessed. According to CDP, E.ON'S
+demonstrable actions have made it one of the world's leading
+companies in environmental ambition, action, and transparency. In
+addition, for the 2022 assessment period (published in 2023) CDP
+recognized E.ON once more as a Supplier Engagement Leader.
+E.ON has had an ESG Reporting Manual since 2021. The manual's
+detailed descriptions and requirements instruct the units how to
+compile and report ESG key performance indicators ("KPIs"). E.ON
+then used the manual's climate-related KPIs to develop a Group-
+wide carbon management plan that breaks down the Group-wide
+climate targets to the business units. Its purpose is to measure
+progress toward these targets separately for each of E.ON's
+business units, factoring in the characteristics of their particular
+business, their strategic ambitions, and the climate policies of the
+country or countries where they operate. The plan reflects E.ON's
+general management approach: the Group sets the strategic
+course and governance framework, while the units have broad
+operational decision-making authority. The carbon management
+plan took effect in the third quarter of 2022.
+Specific Actions
+The principles of good corporate governance guide E.ON's
+responsible and value-oriented management. The focus is on
+efficient collaboration between the Management Board and the
+Supervisory Board, transparent disclosures, and appropriate risk
+management. The clear organization of sustainability and climate
+activities ensures that everyone involved works together
+efficiently and that we continually improve our performance.
+Information about E.ON's progress toward its climate targets is
+first presented to the Chief Sustainability Officer, who is also Chief
+Executive Officer, and the Sustainability Council. The Chief
+Sustainability Officer, who chairs the council, reports to the E.ON
+Management Board about the progress achieved on a regular
+basis. The council met four times in 2023.
+Goals and Performance Review
+Fugitive gas
+E.ON's climate targets go beyond SBTi requirements for the 1.5°C
+target. On the one hand, E.ON intends, by reducing its own GHG
+emissions, to become climate-neutral by 2040; our reduction path
+for our Scope 1 and 2 emissions therefore foresees reducing these
+emissions by 75 percent by 2030 and by 100 percent by 2040. On
+the other hand, we aim to reduce our Scope 3 emissions by 50
+percent by 2030 and by 100 percent by 2050. Both reduction
+paths are relative to a 2019 baseline. Scope 3 emissions occur
+primarily during the generation of the power E.ON purchases and
+resells and during the use of the gas E.ON sells. They account for
+most of E.ON's Group-wide carbon footprint.
+Progress and Measures
++ administrative buildings
+• Purchased power
+used in operations and
+• Power distribution losses
+Scope 2 (location-based)
+田
+3%
+IIIIIII
+5%
+provides guidance for different types of climate policies and
+business objectives.
+The GHG Protocol defines three scopes (Scopes 1 to 3) for GHG
+accounting and reporting. This improves transparency and
+The adoption of our climate strategy initiated actions to help us
+achieve the aforementioned climate targets for 2030, 2040, and
+2050 and thus to support Europe's energy transition. E.ON
+systematically monitors its progress toward these targets. It is
+important to remember that year-on-year comparisons of energy
+consumption can be affected by temporary fluctuations caused by
+weather patterns and other factors. A period of several years is
+necessary to determine whether E.ON's actions are effective and
+where we stand with regard to our targets. Since 2016 we
+therefore assess the trend in more detail every three years. The
+trend indicated that so far the reduction rate is in line with the
+forecasts. Along with the adoption of the aforementioned carbon
+management plan in 2022 we refined this process by setting
+reduction rates for our individual business units as well. The units
+have to conduct controls on an annual basis so that we can see
+more exactly whether we are making progress along the
+prescribed path. In addition, each unit has the authority to pursue
+its own reduction targets that go beyond the target for E.ON as a
+whole.
+much smaller share of our GHG emissions than CO2. The Global
+Warming Potential ("GWP") indicates how much GHGs affect
+global warming over a period of time compared with CO2. All GHG
+emissions can be expressed as CO2 equivalents ("CO2e") and
+therefore be accounted together.
+30.12
+of leased assets (leased
+vehicles)
+Upstream processes
+⚫ Purchased goods and
+services
+• Purchased power
+sold to end customers
+(market-based)
+Scope 3 (upstream)
+47%
+<>
+E.ON's Carbon Footprint by GHG Protocol Scope
+Carbon Reporting According to the GHG Protocol
+E.ON calculates its emissions using the globally recognized
+WRI/WBCSD GHG Protocol for the seven GHGs covered by the
+Kyoto Protocol: carbon dioxide ("CO2"), methane ("CH4"), nitrous
+oxide ("N20"), hydrofluorocarbons ("HFCs"), perfluorocarbons
+("PFCs"), sulfur hexafluoride ("SF6") and also nitrogen trifluoride
+("NF3"). CO2 is by far our biggest GHG. Other GHGs like SF6 and
+CH4 contribute to E.ON's climate impact. But they account for a
+Business travel and employee
+commuting
+35.63
+14This figure includes compensation of around 780 tons of CO2, which has not been deducted from the stated value.
+15This figure includes compensation of around 451 tons of CO2, which has not been deducted from the stated value.
+16This figure includes compensation of around 98 tons of CO2, which has not been deducted from the stated value.
+17 Partly based on previous year's figures.
+2.92
+2022
+2023
+Metric tons
+Other Atmospheric Emissions¹
+= Contents Q Search ← Back
+→ Internal Control System → Disclosures Regarding Takeovers
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report →Risks and Chances Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+49
+49
+E.ON produced 205.4 metric kilotons of hazardous waste in 2023,
+about 43 metric kilotons more than in 2022. The year-on-year rise
+was likewise caused by an expansion of the companies reporting,
+which limits the figures' comparability. Of this, 83 percent was
+recycled.
+106.7
+34.5
+54.7
+34.7
+Disposed
+107.5
+170.7
+Recovered
+2021
+E.ON's Water Consumption from Decentralized Energy
+Generation
+NOx emissions
+2,501
+Accordingly, this business involves the extraction of water as a
+resource and its treatment as well as final distribution to end-
+users; it also includes the reuse of wastewater and thus the closing
+of the water cycle. Although water operations account for only a
+small proportion of the Group's total sales, we pay particular
+attention to the associated consequences from the perspective of
+resource conservation and supply security. We use two KPIs to
+assess the water utility business's risks: total withdrawal and
+distribution losses. Withdrawal is the amount of water supplied to
+end-users; that is, not water used in our own operations. The basis
+for a permanent supply of water is a climate with sufficient
+precipitation to allow surface and groundwater to reform. This can
+generally be anticipated in RWW's and Avacon Wasser's service
+regions. The regions' available surface water and groundwater
+reserves will secure drinking and process water requirements.
+RWW and Avacon Wasser supply about 970,000 people,
+industrial enterprises, and businesses in Lower Saxony, North
+Rhine-Westphalia, and Saxony-Anhalt with roughly 83 million
+cubic meters of water annually, of which 36.6 million cubic meters
+is groundwater, 46.4 million cubic meters surface water and
+0.2 million cubic meters spring water.
+Water is a vital resource that is becoming increasingly scarce in
+some parts of the world. Many companies are therefore placing
+greater emphasis on identifying and managing water risks at their
+operations and along their supply chains. The same is true for
+investors and their portfolios. E.ON's water-related activities relate
+to the following areas: the withdrawal of cooling water for the
+NPP operated by PEL which in 2023 took place for the last time
+(for more information, see Water Management at
+PreussenElektra) and the withdrawal of fresh water by E.ON's
+water utility subsidiaries RWW and Avacon Wasser as well as a
+small amount in conjunction with our decentralized heating
+business. In addition, LEW operates a number of small and
+medium-sized run-of-river power plants in Germany with an
+installed capacity of 0.5 to 12 MW per plant, which only accounts
+for a small share of E.ON's electricity generation. The water supply
+companies RWW and Avacon Wasser as well as LEW are part of
+E.ON's portfolio.
+Responsible Water Management
+Fossil-fueled power plants emit nitric oxide ("NOx"), sulfur dioxide
+("SO2"), and dust. This type of power generation is no longer a core
+E.ON business. It is therefore no longer considered a core KPI.
+E.ON now focuses on small-scale, embedded generation units.
+NOX, SO2, and dust emissions result mainly from small gas-fired
+CHP plants and larger plants for district heating networks. The
+year-on-year rise in NOx and SO2 emissions is mainly attributable
+to an expansion of the companies reporting and to higher plant
+utilization.
+44.15
+¹For generation assets over 20 MW.
+61
+51
+53
+141.3
+Dust emissions
+2022
+< 1
+2023
+< 1
+Fresh water consumption
+581
+652
+828
+SO2 emissions
+Million cubic meters
+1,716
+1,7272
+2021
+< 1
+Based on available data, E.ON assesses the current, and the
+possibility of future, water scarcity in the relevant regions in which
+E.ON uses fresh water for its activities to be generally low.
+Additional disclosures on E.ON's water withdrawal and risks areas
+can be found in the ESG Figures. The cessation of electricity
+generation at Isar 2 NPP in April 2023 means that E.ON no longer
+consumes cooling water to operate its facilities.
+162.2
+Hazardous waste
+Other
+74%
+Process optimization
+0
+Carbon Emissions Reductions Achieved
+through Targeted Projects
+Savings Delivered by Emissions-reduction Projects
+E.ON regularly carries out projects to reduce its own GHG
+emissions. In 2023 these projects delivered over 18,000 metric
+tons of CO₂e savings. The measures to achieve them included
+upgrading the boilers in the plants of our district heating business,
+converting from natural to green gas, and reducing pipeline
+pressure in our gas networks prior to construction or maintenance
+in order to prevent fugitive methane emissions.
+E.ON consumed 49 million GJ of energy in 2023, 4 million GJ less
+than in the prior year (2022: 53 million GJ).
+GRI 302-1
+Energy Consumption within the Organization
+Progress and Measures ☑
+consultations with the Senior Vice President for HSE. In the case of
+a major incident (category 4), the unit at which it occurred reports
+it directly to the E.ON Management Board member responsible for
+the respective unit and to Group HSE within 24 hours.
+environmental incidents (category 3 in our Standard on Incident
+Management) by means of monthly reports from HSE and periodic
+The E.ON Management Board is informed about serious
+Goals and Performance Review
+Examples include the transformer and switchgear workshops at
+E.ON distribution system operators Westnetz and Bayernwerk.
+These workshops have been in operation for many years and will
+be an important element of the energy transition in the future.
+They refurbish large transformers and other components, thereby
+extending their service life and thus contributing to the
+achievement of various environmental targets. In 2024 E.ON plans
+to adopt a circular economy strategy, which will also cover waste
+issues.
+E.ON periodically compiles environmental key performance
+indicators for waste. At the start of 2023 we began to catalog, in a
+structured way, our activities relating to a circular economy and to
+develop a circular economy strategy. CE.ON, our circular economy
+project, consists of a cross-discipline team of employees draw
+from the Strategy and Purchasing departments to determine this
+issue's relevance for E.ON and design specific activities.
+Waste Management and Circular Economy
+as part of corridor management. ECM is already in place for an
+area the size of roughly 8,500 hectares. Through 2029, we plan to
+invest a figure in the double-digit million range and to implement
+ECM along the 13,000 kilometers of our high-voltage lines, which
+is roughly the area of around 100,000 soccer fields. ECM was
+applied to 12 percent of relevant areas in 2023 (previous year:
+8 percent). Our ECM approach has been acknowledged outside
+E.ON as well and received the Renewables Grid Initiative's ("RGI")
+2023 Grid Award in the Environmental Protection category. RGI is
+an alliance of NGOs, transmission system operators, and distribution
+system operators from across Europe engaged in promoting the
+energy transition by means of fair, transparent, and sustainable
+grid development. The aim is to enable renewables growth to
+achieve full decarbonization in line with the Paris Agreement.
+= Contents Q Search ← Back
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ Forecast Report
+23%
+Building optimization
+3%
+Circular Economy, Waste Avoidance, and Recycling
+E.ON always tries to avoid creating waste and, when this is not
+feasible, to recover as much of it as possible. If neither avoidance
+nor recovery is possible, we ensure, in accordance with legal
+requirements, that waste is disposed of correctly and responsibly.
+E.ON's operating business generates hazardous and non-
+hazardous waste, as does the retirement of some assets, such as
+the dismantling of the Company's nuclear power plants ("NPPs") in
+Germany.
+2021
+2022
+2023
+Metric kilotons
+Hazardous Waste
+waste.
+E.ON's total amount of non-hazardous waste increased from
+381.3 metric kilotons in 2022 to 496.1 metric kilotons in 2023.
+There was an increase in 2023 that was attributable to an
+expansion of the companies reporting. The figures' comparability is
+therefore limited. E.ON recycled 94 percent of its non-hazardous
+Recovered
+Disposed
+410.1
+17.9
+17.3
+205.4
+29.1
+467.0
+428.0
+381.3
+496.1
+Non-hazardous waste
+2021
+2022
+2023
+Metric kilotons
+Non-hazardous Waste
+364.1
+Water and climate protection go hand in hand at E.ON's water
+utilities: we conduct a variety of projects to address both issues
+and are always looking for new, more environmentally compatible
+solutions for wastewater disposal, sewage sludge recycling, as
+well as service water and rainwater utilization. For example, we
+are designing plans for smart water use in new residential areas
+and working on flood-protection systems in municipalities.
+Conducting research and development projects enables us to
+investigate innovative solutions for qualitative and quantitative
+water protection, such as additional potential resources for
+irrigation.
+2Prior year values have been adjusted.
+E.ON's Water Consumption from Water Supply Operations
+Infrastructure leakage index
+10We estimate that approximately 40 percent of our employees have worked from home.
+11We estimate that, on average, half of our employees have worked from home due to Covid-19.
+12 From 2023, emissions from hotel stays were considered and an updated method for calculation emissions from air travel was used.
+13The figures for leased vehicles relate to 2020.
+46
+46
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+8This figure does not include 3.5 kilotons of CO2 from biogenic emissions in accordance with the GHG Protocol.
+⁹This figure does not include 2.5 kilotons of CO2 from biogenic emissions in accordance with the GHG Protocol.
+→ Internal Control System
+= Contents Q Search ← Back
+Environmental Management O
+GRI 3-3, GRI 302
+E.ON assumes responsibility for preserving the natural
+environment and strives to minimize its business activities'
+environmental impact. The focus of environmental management,
+however, has shifted significantly over the past eight years. The
+transformation into the new E.ON-a specialist for infrastructure
+and customer solutions to decarbonize the energy world-
+substantially changed E.ON's asset portfolio and environmental
+footprint. E.ON operates distribution networks in various European
+countries. Environmental management therefore places particular
+emphasis on protecting and promoting natural habitats and the
+diversity of ecosystems and species in the vicinity of this network
+equipment. Furthermore, we aim to address primarily these
+environmental aspects: conserving wastewater, water and other
+resources, reducing emissions, and generating less waste at our
+facilities and offices as well as complying with all international and
+national environmental laws and regulations at all times.
+In addition, RWW and Avacon Wasser provide information on the
+careful use of water as a resource. Important channels are the
+company websites and press releases. For example, during the
+summer months RWW gives its customers advice on the careful,
+appropriate use of fresh water. In addition, RWW has operated
+educational facilities-Aquarius and Haus Ruhrnatur-since 1992,
+in which visitors can learn about topics related to water supply and
+preventive water protection. Museum educators at the two
+educational facilities offer various lessons on water and
+environmental protection to schools in RWW's service territory.
+E.ON's environmental management is guided by the precautionary
+principle endorsed by the United Nations, and E.ON has explicitly
+supported the UN Global Compact's ten principles since 2005. In
+addition, E.ON is working to define its own environmental
+standards, such as ecological corridor management (see "Specific
+Actions" below for more information), in order to set a strategic
+course for the entire Group and to guide the units' environmental
+protection activities.
+We developed an Environmental Protection Guideline in late 2021
+that describes E.ON's holistic approach to environmental
+protection. It was published in the first quarter of 2022 and
+contains the following five commitments: "We care for
+ecosystems," "We steer our organization toward ecosystem
+protection," "We maximize our impact," "We set clear targets," and
+"We engage for environmental protection."
+We use our energy management system to continually look for
+opportunities to optimize the Group's energy consumption and the
+energy efficiency of our processes. It enables us to reduce
+greenhouse gas ("GHG") emissions and thus also plays an
+important role in environmental management, which is a key
+component of E.ON's operational health, safety, and
+environmental ("HSE") management. Combining these topics
+underscores that E.ON is equally committed to protecting people
+and the environment. In addition, bringing together health and
+safety, environmental, and energy management in a joint HSE
+organization enables us to leverage synergies because the
+approaches and systems are fundamentally similar.
+E.ON only wants to do business with companies that share its
+commitment to environmental protection. Consequently, we strive
+for our suppliers and contractors to comply with our
+environmental standards, and our HSE Policy stipulates that they
+must have a certified environmental management system in place.
+Guidelines and Policies
+→ Disclosures Regarding Takeovers
+Environmental Management Systems
+7This figure does not include 3.8 kilotons of CO2 from biogenic emissions in accordance with the GHG Protocol.
+5From 2022, emissions were calculated using an updated method for calculating upstream effects.
+2.805
+3.32
+1.617
+1.568
+1.299
+0.0610
+0.0511
+0.0511
+0.0312
+0.02
+6In accordance with the GHG Protocol, emissions from electricity and heat generation are divided into emissions from facilities owned and operated by E.ON (Scope 1) and emissions from facilities leased to
+and operated by customers (Scope 3). This enables us to better manage our emissions and make progress towards our targets more transparent.
+0.0213
+0.0015
+0.0016, 17
+70.69
+80.55
+65.23
+82.58
+100.38
+103.58
+1 The external GWP sources used include the IEA, the IPCC AR5 report, BEIS, formerly DEFRA, the Naturvårdsverkets, the GHG Protocol, and the Överenskommelse Värmemarknadskommittén 2022.
+Furthermore, primary data from external travel service providers was used for the calculation.
+2Scope 3 emissions from purchased electricity and the combustion of natural gas sold to end consumers (energy sold to our private and B2B customers) in accordance with the GHG Scope 3 Protocol. The
+emissions from the distribution losses of energy sold to distribution partners and the wholesale market are recorded accordingly under our Scope 1 and Scope 2 emissions.
+³Includes the purchase of electricity at E.ON-owned and publicly accessible charging stations.
+4Including capital goods.
+0.0114
+All E.ON units-except for very small units and those with non-
+material environmental risks-strive to have an environmental
+management system that is certified to ISO 14001 or validated by
+means of the Eco-Management and Audit Scheme ("EMAS").
+E.ON's Approach
+E.ON uses the environmental management system it has deployed
+(ISO 14001) to identify relevant environmental aspects and to
+evaluate the resulting opportunities and risks. The aim is for the
+Group to minimize and/or continually reduce its impact on the
+environment.
+Environmental Impact Assessments
+For projects to build new power lines, gas pipelines, and other
+large industrial facilities with a foreseeable environmental impact,
+E.ON conducts an environmental impact assessment during the
+development phase to obtain construction and operating permits.
+We also frequently monitor a facility's operation to verify that the
+initial assessment was correct. In addition, E.ON maintains an
+ongoing dialogue with local stakeholders and interested parties on
+numerous environmental issues.
+Biodiversity
+In 2022 E.ON analyzed the extent to which its business model
+impacts biodiversity. The analysis took into account the
+frameworks of the Science Based Targets Network ("SBTN") and
+the Taskforce on Nature-related Financial Disclosures ("TNFD").
+The findings are divided into the dependencies of E.ON's business
+activities on ecosystem services and these activities' impacts on
+ecosystem services. E.ON's highest dependency on ecosystem
+services is hydroelectricity. The most important ecosystem
+services for E.ON's overall business are flood and storm protection.
+The production processes with the highest impact are energy from
+biomass, hydropower, and heat plants. We continue to view our
+powerline corridors as a significant lever for enhancing biodiversity
+and are using ecological corridor management to address it.
+E.ON wants to use the findings to develop additional measures to
+further promote biodiversity in its business. A follow-up project
+was launched for this purpose in 2023. It is analyzing what
+measures will enable E.ON to improve its impact on biodiversity.
+> At year-end 2023, 85 percent of E.ON employees worked in
+business units that met this requirement. <
+E.ON also takes steps to protect wildlife and landscapes and to
+promote biodiversity. Bird safety, for example, is an important
+issue for many E.ON distribution system operators ("DSOS"). Their
+activities in this area include installing nest platforms for storks,
+eagles, falcons, and other bird species. Many business units have
+also launched tree-planting projects. In addition, E.ON has set up a
+Group-wide digital platform for biodiversity and environmental
+protection projects to improve the visibility of the issue and the
+exchange of information about it.
+E.ON has developed an approach for ecological corridor
+management ("ECM") and introduced it Group-wide in 2023 as a
+standard for vegetation management in all areas under and near
+110 kV high-voltage overhead power lines where ECM is
+potentially practicable. We intend to extend this approach to all of
+the Group's DSOs in Europe by 2029. ECM enables E.ON to make
+a significant contribution to creating and maintaining permanently
+stable biotopes and structures and to promoting species
+protection, biodiversity, and the interlinking of valuable
+biospheres. ECM encompasses mapping biotopes, designing
+biotope-specific management plans, and implementing these plans
+48
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+50
+Infrastructure leakage index ("ILI") enables water utilities to
+measure and compare water losses. ILI is a KPI for assessing water
+losses that is widely used and recognized internationally. ILI
+factors in not only the amount of water loss, but also the relevant
+parameters (such as pipeline system length and pressure). Unlike
+the KPI commonly used in Germany (specific actual water loss, or
+QVR), ILI offers better comparability with structurally similar
+companies and better guidance for a company's own water
+¹Figures for 2023 are based on a preliminary estimate based on prior-year figures.
+2022
+≤1.5
+Factor
+("ILI")
+2021
+≤ 1.5
+2023
+≤ 1.51
+In 2017 E.ON began offering its employees in Germany incentives
+to embrace eMobility. They include discounted leasing contracts
+for electric vehicles ("EVs"), at-home charging points, and certified
+renewable power tariffs, which enable employees to charge their
+EVs with clean energy. E.ON's Car Policy for the procurement of
+company cars and leased vehicles unambiguously supports the use
+of all-electric and hybrid vehicles. More information on our
+eMobility efforts can be found in the Sustainable Products and
+Services chapter.
+eMobility
+E.ON's business units are already implementing local biodiversity
+measures. For example, LEW Wasserkraft, our hydropower
+subsidiary, places a great emphasis on sustainability and
+biodiversity and promotes them in a wide variety of projects.
+These include irrigating riparian forests, creating gravel spawning
+grounds, and fashioning semi-natural riverbank structures.
+E.ON has taken several steps to improve the energy efficiency of
+its facilities in Germany. Its heat supply companies implement
+measures to optimize their networks. Its gas and power network
+companies conduct measures to improve the energy efficiency of
+Energy Management Systems ("EnMS")
+ISO 50001 is an international standard whose purpose is to enable
+organizations to continually improve their energy efficiency.
+In accordance with the German Energy Services Act (German
+abbreviation: "EDL-G"), E.ON has also introduced ISO 50001
+certification in units that already have an HSE management
+system.
+> At year-end 2023, 73 percent of E.ON employees worked in
+business units with ISO 50001 certification. <
+network equipment. Other steps include installing sensor-
+controlled LED lighting in buildings and parking garages and
+reducing the energy consumption of ventilation and air-
+conditioning systems. We also adjust the heat in our buildings to
+demand (the Energy Affordability chapter contains more
+information about energy conservation).
+As part of the EnMS, the energy team of E.ON companies in
+Germany and other countries sets annual targets and conducts
+systematic audits to monitor the effectiveness of the measures
+taken to achieve them. It also conducts an annual management
+review, which is audited by an accredited certification
+organization. These mechanisms confirmed the EnMS's
+effectiveness.
+Organization and Responsibilities
+The Group's Sustainability department played a leading role in
+developing company-wide climate protection targets and has since
+then been monitoring progress toward them. E.ON's units are
+responsible for taking steps to reduce their emissions, those
+caused by their business activities, and other environmental
+impacts. They are supported in these efforts by their Sustainability
+and HSE teams and our wider HSE organization, which, for
+47
+E.ON Integrated Annual Report 2023
+E.ON measures and analyzes the energy use of facilities, vehicle
+fleets, and buildings at all of these units. The data help us identify
+opportunities for energy conservation and take cost-effective
+measures to improve energy efficiency. All units without ISO
+50001 certification conduct energy audits in accordance with DIN
+EN 16247 under the EDL-G in Germany and analogous legislation
+in other European countries (more information on measures and
+guidelines can be found in the chapters entitled Climate Protection
+and Occupational Health and Safety).
+The E.ON Environmental Network ("EEN") is a forum for sharing
+information about business-related environmental issues,
+environmental management, sustainability, and related law. The
+EEN brings together experts from the Energy Networks and
+Customer Solutions segments and the HSE and Sustainability
+teams. They work together closely in the EEN, which meets on a
+quarterly basis, usually virtually. Since the EEN was founded, its
+reach in the Group has extended continually. In addition to the
+issues addressed in 2021-commercial waste, ISO 14001
+environmental assessment, and networking of biodiversity and
+environmental protection projects-one of the steps the EEN took
+in 2022 was to create a working group for the Federal Soil
+Protection and Contaminated Sites Ordinance and the new
+Substitute Building Materials Ordinance. It addresses the
+requirements that our business units must meet as a result of the
+sites ordinance's amendment and the new materials ordinance.
+E.ON also has an international EEN, which brings together E.ON
+colleagues outside Germany. Both forums met several times in
+2023. We intend to expand these networks in the years ahead and
+transform them into Group-wide information-sharing platforms.
+Specific Actions
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search Back
+example, help design energy-efficiency measures and share ideas
+and best practices. The Climate Protection chapter contains
+information on E.ON's new carbon management plan.
+E.ON employees and managers are required to report
+environmental incidents. They use an IT application called PRISMA
+(Platform for Reporting on Incident and Sustainability
+Management and Audits) for this purpose (the Occupational
+Health and Safety chapter contains more information on PRISMA
+and E.ON's incident management).
+Energy Management
+Combined Group Management Report
+2022
+203
+245
+Total
+2023
+191
+2021
+2,383
+PEL's Water Balance
+Million cubic meters
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+Water Management at PreussenElektra
+Drinking water reduction targets in our water utility business have
+to do with reducing leakages at water utility facilities. Pursuant to
+Technical Annex 5.1 of the EU taxonomy, E.ON has set a target of
+reaching and consistently maintaining an ILI of less than 1.5 (very
+efficient performance, target figure of low leakage). We intend to
+achieve this target by conducting targeted maintenance measures
+to minimize damage rates at water distribution facilities. In
+addition, continual network monitoring and water leakage
+analyses will make it possible to recognize damage at water
+distribution facilities early and to actively eliminate it. We measure
+the amount of water delivered to our customers by using
+metrologically highly efficient water meters and thus by
+minimizing metering errors.
+management. By international standards, E.ON'S ILI of less than
+1.5 puts it in the best leakage performance category of A (ILI ≤2).
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report →Risks and Chances Report
+Combined Group Management Report
+216
+The NPP in Germany operated by our subsidiary PreussenElektra
+("PEL") accounted for a significant share of E.ON's water
+consumption and used. Its NPPs use water for cooling and
+processes. PEL is committed to using water efficiently and
+sustainably and to maintaining high quality in the river from which
+its plants withdraw water. It also strove continually to use less.
+PEL observes all laws and regulations regarding water withdrawal
+and discharge. The most important law for PEL in this context is
+the Federal Water Act (Wasserhaushaltsgesetz, or "WHG"). PEL
+protects aquatic flora and fauna by using mechanical purification
+processes instead of biocides and by constantly monitoring the
+temperature of discharge water. PEL also expects its contractors
+to use water sparingly and has binding water management
+provisions in its agreements with them.
+13
+¹Includes digital meters.
+2,331
+53
+58
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ About this Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+→Risks and Chances Report
+= Contents Q Search ← Back
+Employee LTIF¹
+LTIF
+2023
+2.17
+2022
+2.10
+2021
+2.10
+¹Lost-time injury frequency measures work-related accidents resulting in lost time per million
+hours of work.
+Lost-time injury frequency ("LTIF") measures work-related
+accidents resulting in lost time per million hours of work.
+Employee LTIF was 2.2 (2022: 2.1).
+> Contractor SIF increased to 0.06 (2022: 0.05). Combined SIF was
+0.04 in 2023 (2022: 0.05).<
+At 0.03, employee SIF was below the prior-year level (2022:
+0.04).
+¹Serious incidents and fatalities measures accidents and incidents per million hours of work that
+have caused serious or fatal injuries and that surpass a predefined severity threshold per million
+hours of work.
+0.10
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+indicate that a unit does not meet E.ON standards, the HSE
+department supports it in optimization. In addition, Group Audit
+may conduct an HSE audit at the unit.
+The findings of the incident investigations and HSE audits
+completed in 2023 show that HSE management systems are
+largely effective. The units have adopted the auditors' resulting
+recommendations and have generally used them to design
+corrective and preventive actions. It also became clear, however,
+that employees' safety awareness was not fully adequate in all
+teams. It therefore remains extremely important to continually
+point out to E.ON employees and contractor employees all the
+requirements of HSE management and their own responsibility:
+they must look after themselves and their colleagues and speak up
+immediately if they detect a potential safety risk. Overall, E.ON has
+observed for several years that occupational safety in its units is
+improving continually. We can clearly see that our measures to
+prevent serious occupational accidents are having an effect. One
+example is a discernable shift from serious incidents to less serious
+incidents. Furthermore, E.ON views audits-and the findings and
+recommendations they yield-as opportunities to foster
+continuous improvement.
+Health and safety concerns have always been a high priority for
+the E.ON Management Board. In 2020 E.ON adopted a new HSE
+strategy ("Roadmap 2021-23"), endorsed by the HSE Council,
+whose aim is to position E.ON as a leading HSE company. The
+strategy contains underlying targets for the operating units,
+including H&S, and their respective board members. In addition,
+the Management Board set personal H&S targets for top
+executives. The targets for top executives and units are individual.
+Their purpose is to further reduce the frequency of serious
+incidents and fatalities ("SIF") and thus to reach E.ON's ultimate
+objective of zero major harm as soon as possible. The changes took
+effect on January 1, 2021. The primary focus in 2023 was on
+contractor management and digitalization. In addition, a review
+program called DSS Quick Checks was used to design additional (in
+some cases company-specific) measures to improve HSE
+processes that will be implemented beginning in 2024.
+Furthermore, stakeholders from E.ON's operating business and
+HSE managers thoroughly discussed and analyzed the business's
+challenges and drivers and the resulting key issues for the new
+health strategy for 2024-2026. These findings were drawn on to
+design the strategy, which the HSE Council approved at the end of
+2023 for implementation at the units and at Group HSE beginning
+in 2024.
+The extent to which E.ON's health strategy is successful depends
+in part on whether employees receive information about health
+and prevention and whether this motivates them to participate in
+related programs. To increase willingness to participate, health
+programs are often tailored to the needs of specific target groups.
+E.ON's network operators in Germany, for example, target their
+employees aged 50 and over in particular as well as employees in
+their field offices. Actions include workshops on healthy living in
+older age and preparing for retirement. There are also special
+offers, for example, for operational employees such as fitters and
+administrative staff. The return on investment ("ROI") of many
+health programs is calculated by comparing costs with avoided
+absenteeism based on research and statistics. So that all
+employees feel comfortable, valued, and supported in their work
+environment, E.ON places particular emphasis on mental health.
+We provide information on the importance of stress management
+and show how to recognize signs of mental health issues. In
+addition, E.ON has assistance and training on stress reduction,
+self-assessment tests, and a direct support offering, including
+through the EAP.
+To propel its health strategy in a targeted way, E.ON is also
+conducting a health inventory across all its companies in Germany
+and elsewhere in line with its HSE vision. The project's purpose is
+to actively foster employees' health and well-being and to improve
+Group-wide transparency regarding health and well-being. Data
+collected in the health inventory will be used to support E.ON's
+ongoing efforts for greater collaboration in its HSE organization
+and to address current challenges and trends. The data will also
+> Contractor LTIF improved to 1.6 (2022: 2.0). Combined LTIF was
+1.9 in 2023 (2022: 2.0) and thus in line with the previous year. <
+promote the sharing of best practices across all units and countries
+in order to further improve our HSE culture and health
+management and to jointly set strategic targets and the direction
+of further HSE culture and health strategies.
+96.3 percent o
+E.ON employees' health rate in 2023 (2022: 96.0 percent).
+It reflects the number of days actually worked in relation to
+agreed-on work time.
+Accident Statistics
+Serious incidents and fatalities ("SIF") measures accidents and
+incidents that caused serious or fatal injuries and that surpass a
+predefined severity threshold.
+Employee SIF¹
+SIF
+2023
+0.03
+2022
+0.04
+2021
+Progress and Measures
+Total recordable injury frequency ("TRIF") is one of E.ON's KPIs for
+safety. It measures the number of recorded work-related injuries
+and (acute) illnesses per million hours of work. E.ON has calculated
+it since 2010 (employee TRIF) and included contractor employees'
+in its safety performance since 2011 (combined TRIF).
+Employee TRIF¹
+TRIF¹
+2023
+2.77 ●
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+implementation process is flexible and modular in order to reflect
+differences between business units. ◄
+E.ON's Approach O
+GRI 2-30
+A common culture, toward which the Company continually works,
+is crucial for E.ON's success. Our fundamental corporate values
+guide employees' actions and interactions with each other,
+customers, and business partners. They answer the question of
+what makes E.ON special, what is important to us, and what
+principles guide our actions.
+Grow@E.ON, E.ON's Group-wide competency model, is derived
+from E.ON's values and is an integral part of GPS@E.ON. It defines
+the specific behaviors to which the Company is committed.
+Grow@E.ON is integrated into all HR-related processes and
+describes how employees and managers should behave toward
+each other and customers. Its purpose is to enable us to recruit the
+right employees for the right positions, retain them, and foster
+their ongoing development. Grow@E.ON provides guidance to
+staff in their daily work and sets out a clear path for their personal
+development and professional growth. It is designed to prepare the
+Company for the continually evolving world of work, in which
+agility, future-oriented skills, and greater individualization and
+diversity are at the forefront. All new managers and employees are
+informed about Grow@E.ON and trained accordingly.
+A strong feedback culture is extremely important. Feedback helps
+employees perform at a high level, to identify opportunities for
+personal development, and to promote continuous improvement.
+Such a feedback culture is firmly embedded in GPS@E.ON, E.ON's
+Group-wide HR strategy. E.ON offers its employees periodic
+performance and development reviews. The Company also takes a
+number of steps to foster a feedback culture, including offering
+training, guidelines for feedback, and support on Connect, its in-
+house social network. In addition, YourVoice@E.ON, which we
+launched in 2023, represents a central and innovative approach to
+making giving feedback even easier and more efficient for
+everyone (see "Specific Actions" below).
+Guidelines and Policies
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Forecast Report → Risks and Chances Report
+Our HR management model assigns the central HR function
+(Group HR/Executive HR) responsibility for Group-wide HR tools
+and processes as well as binding HR policies. These are defined in a
+functional policy guideline, which also stipulates the associated
+tasks. Executive HR, for example, is responsible for the complete
+life-cycle management of E.ON's top executives. Group HR is
+responsible for a variety of Company-wide matters. These include
+executive compensation including a job-grading system for
+executive roles, the Grow@E.ON competency model, the employer
+value proposition ("EVP"), Group-wide diversity targets, global
+learning technologies and content, the International Assignment
+Policy, the pension framework, and global HR IT governance.
+The compensation principles for our employees are in many cases
+stipulated by collective bargaining agreements, which cover 82
+percent of employees. Whenever possible, E.ON offers permanent
+employment, which applies to 94 percent of employees. We
+provide fair pay that enables our employees to live a decent life.
+Organization and Responsibilities
+E.ON's HR management is largely decentralized so that it is closer
+to the business. In 2022 E.ON decided to fine-tune its HR
+governance model so that topics of Group-wide strategic
+significance-talent management/diversity and inclusion, learning
+= Contents Q Search ← Back
+and development, EVP, and HR tech-are managed and
+implemented more centrally. In this context, the Senior Vice
+President Group HR/Executive HR and the HR leaders of the
+individual units agree on annual targets.
+An important central task of the HR function is HR management
+for the Group's top leadership positions. This includes the
+identification of potential, staffing, succession planning and related
+long-term talent management. The aim is to continually improve
+the staff of leadership positions by, for example, having a
+transparent recruitment process and thus ensuring equal
+opportunity and diversity. We use overarching criteria and
+common tools, such as local and global talent boards, to identify
+talent and potential. Talent boards serve as a forum in which HR
+and the specialist departments discuss employees with
+development potential for management roles and their
+development needs. Within this defined framework, units and
+facilities can adjust processes to meet their specific needs and
+challenges.
+E.ON takes its employees' interests very seriously and cooperates
+closely with employee representatives. Almost all E.ON units and
+Corporate Functions itself have works councils or other forms of
+employee representation. We can build on the long-standing,
+constructive, and trusting partnership with employee
+representatives, especially in times of change; moreover, we
+actively involve the workforce in all relevant upcoming changes.
+Employee representatives are involved in employee-related issues
+in a timely manner in accordance with the laws of individual
+countries. In Germany this law is the Works Constitution Act. The
+cooperation between E.ON and E.ON employee representatives is
+characterized by respectful and open dialog. Early and open
+exchange with employee representatives on employee-related
+issues, which is a particularly important aspect of this proven
+social partnership, is therefore enshrined in a declaration of
+principles.
+60
+60
+E.ON has in place numerous policies and directives to make work
+conditions more flexible. These include agreements for home
+offices and rules on flexible work arrangements such as
+sabbaticals, part-time work, and special leave. The principles
+contained in these policies and directives are supported by our
+codetermination committees and are binding for the entire E.ON
+Group. The units implement them according to their respective
+legal, cultural, and business circumstances.
+→ About this Report
+→ Governance
+→ Employees and Society
+Combined Group Management Report
+2022
+2.90x
+2021
+2.60x
+¹TRIF measures the number of reported fatalities and occupational injuries and illnesses and also
+includes injuries that occur during work-related travel that result in lost time or no lost time
+and/or that lead to medical treatment, restricted work, or work at a substitute work station.
+The TRIF for employees was 2.8 in 2023.
+> Contractor TRIF of 2.0 was lower than in the prior year (2022:
+2.3). Combined TRIF declined from 2.6 to 2.4. All accidents were
+carefully examined, both individually and in comparison. In some
+cases, this enabled us to identify patterns or multiple predominant
+causes and respond directly to them, for example, by means of
+work groups. TRIF declined mainly because of fewer pandemic-
+related restrictions and higher investments at some units, which
+resulted in an increase in the number of construction sites and
+thus in the number of working hours. <
+Employee NMFR¹
+2022
+36.00×
+2021
+34.00×
+2023
+NMFR
+40.32 O
+¹Near-miss frequency rate measures unplanned incidents that had the potential to result in an
+accident (but did not) per million hours of work.
+→ About this Report
+Near-miss frequency rate ("NMFR") measures unplanned
+incidents that had the potential to result in an accident (but did
+not) per million hours of work. E.ON analyzes how and why near
+misses happened and then puts in place controls to minimize or
+eliminate similar risks in the future. We actively encourage
+employees to report near misses so that we can continually
+improve our safety performance. E.ON's NMFR was 40 in
+2023.◄
+Regrettably, one contractor employee died in 2023 due to an
+occupational accident. He was an electrician who suffered severe
+burns from an arc flash in a transformer station. Although first aid
+was administered immediately and he received medical treatment
+for three weeks, he ultimately died from his injuries. Each fatal
+accident is thoroughly investigated so that we understand the
+exact course of events that led to it. Identifying root causes
+enables us to take the measures necessary to prevent similar
+accidents in future. Nevertheless, serious and even fatal accidents
+still occur. E.ON cannot and will not accept this. It has therefore
+further intensified its efforts to prevent accidents. Examples are
+the Company's decision to extend the evaluation of HSE maturity
+to all E.ON network operators and to make adjustments to the HSE
+Strategy Roadmap 2021-2023, which place a greater emphasis
+on risk and contractor management (see "Goals and Performance
+Review" above).
+Occupational Health and Safety at PreussenElektra
+E.ON's subsidiary PreussenElektra ("PEL") is responsible for the
+operation, decommissioning, and dismantling of the Company's
+nuclear power plants ("NPPs"). Its top priorities in all these
+activities are the health and safety of employees-its own as well
+as contractors'-and environmental protection. PEL is fully
+integrated into E.ON's safety organization and is subject to its high
+standards. PEL's extensive experience in plant operations and
+decommissioning helps it continually optimize its HSE processes
+and procedures and thus to minimize possible risks in conducting
+its activities. Special focus actions, practical training sessions, and
+health promotion measures foster and support the safe behavior of
+PEL and contractor employees. Together, the systematic
+application of safety standards, the conducting of various training
+and awareness-raising measures (including for contractors), and
+continual HSE advice directly at the work site again helped prevent
+serious accidents in 2023.
+Working Conditions and Employee Development
+GRI 2-7, GRI 2-30, GRI 3-3, GRI 401, GRI 404, GRI 405
+▶ E.ON's vision is to provide everyone with good energy. More
+than 72,000 employees worldwide (core workforce in FTE) are
+working to make it happen. E.ON's human resources ("HR")
+creates the conditions for all of them to make their contribution.
+The HR function's cornerstones, which are part of E.ON's vision of
+HR management, are: attracting great people, developing people,
+creating a winning culture, and driving digital. They describe how
+E.ON wants to be the employer of choice and to use innovative
+formats to continually develop its talent. They also aim to establish
+a culture of inclusion as well as the greater digitalization of HR
+processes and the creation of a digital mindset. The HR vision thus
+serves as the lodestar for HR work in the Group.
+The medium-term HR objectives specify this overarching vision as
+it is reflected in our Group People Strategy, or GPS@E.ON. This
+strategy defines the four Group-wide People Priorities. These
+priorities are the future of work, diversity and inclusion,
+sustainability, and leadership. HR activities across the Group are
+aligned with GPS@E.ON and must fundamentally contribute to the
+People Priorities and their respective key ambitions. The strategy
+is implemented through Group-wide and local activities. The entire
+59
+E.ON Integrated Annual Report 2023
+Fatal Accidents at Work
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+57
+→ Employees and Society
+= Contents Q Search ← Back
+Employees and Society
+Occupational Health and Safety
+GRI 3-3, GRI 403
+E.ON works continually to establish a caring culture. This
+encompasses ensuring our employees' safety in the workplace,
+promoting their health, and also supporting their mental well-
+being. Many employees perform high-risk work, such as on energy
+networks, gas pipelines, and other industrial facilities. Stringent
+safety standards are therefore of particular importance to E.ON,
+because employees' health is E.ON's top priority.
+E.ON's Approach
+Health and safety ("H&S") have long been firmly embedded in
+E.ON's corporate culture and its organizational setup, policies, and
+procedures. E.ON's approach is proactive and preventive.
+We are unambiguously committed to the principle of zero
+tolerance of accidents. E.ON's main objective is to prevent
+occupational accidents from the outset. This applies to E.ON
+employees as well as contractor employees who work on its
+behalf.
+E.ON's ambition is to extensively promote employees' well-being
+and enable them to maintain their performance and employability.
+In particular, we try to prevent those health conditions that most
+frequently result in incapacity for work. E.ON's health
+management includes designing and providing health services
+(such as flu vaccinations) as well as target-group-specific
+individual measures to maintain health in the different phases of
+employees' lives. It typically encompasses issues that are relevant
+for all employees or for certain target groups. Issues include
+general health maintenance, nutrition, exercise, mental health,
+stress management, and addiction prevention. E.ON promotes
+them by means of training sessions, information leaflets,
+presentations, and digital formats. Its use of the latter was again
+high due to hybrid work.
+Guidelines and Policies
+E.ON is committed to a culture of prevention. We reaffirmed this
+in 2009 by signing the Düsseldorf Statement on the Seoul
+Declaration on Safety and Health at Work as well as the
+Luxembourg Declaration on Workplace Health Promotion.
+E.ON has had a Group Company Agreement on Health for all
+employees in Germany since 2015; it was last revised in 2018. Its
+purpose is to foster a healthy work environment and promote the
+health of all employees. It defines four action areas: occupational
+health management, addiction prevention and intervention,
+occupational integration management, and employee counseling.
+The E.ON Health, Safety, Environment & Climate Protection Policy
+Statement, which was originally published in 2018, was updated
+in 2021 to reflect E.ON's Vision Zero for safety targets as well as
+its climate and environmental targets in the context of the EU
+taxonomy. In addition, we simplified the document's language and
+eliminated redundancies.
+A Group-wide standard for managing risks to health, safety, and
+the environment ("HSE") has applied in the Company since the
+start of 2021. It defines the minimum requirements for identifying,
+analyzing, evaluating, managing, and monitoring HSE and other
+sustainability-related dangers and opportunities. The standards'
+requirements are also supported by IT solutions, which are mainly
+used to create risk assessments and/or indices as well as activity-
+related danger evaluations. Our employees have the opportunity to
+view danger evaluations relevant to them and the resulting
+protection measures.
+The Group HSE Function Policy defines HSE roles, responsibilities,
+management expectations, and reporting channels. It sets
+minimum requirements and defines management tools needed to
+prevent physical and mental harm in the workplace. It also requires
+all our operating units (except for very small ones and those with
+insignificant risks and potential impact) to have in place an
+occupational H&S management system certified to international
+standards-such as ISO 45001 (which replaced OHSAS 18001)-
+and to improve the system on an ongoing basis.
+> At year-end 2023, 83 percent of our employees worked at
+business units certified to ISO 45001. <
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Forecast Report → Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ Governance → Sustainable Finance → Business Report
+→ About this Report
+2The company VSEH operating in Slovakia was deconsolidated in the end of 2023.
+B O
+= Contents Q Search ← Back
+86%
+Proportion of renewables capacity
+to E.ON's electricity networks
+67,832,212 MWh
+Green power sales.
+54%
+Share of green power sales.
+E.ON refined the Group HSE Function Policy in 2022. For example,
+we added or sharpened the definition of tasks and task areas and
+formulations, in part to better integrate sustainability aspects
+Group-wide, including task areas such as the environment and
+biodiversity, sustainability reporting, and supply chain.
+23,923
+Ultra fast charging > 150 kW: 448
+Fast charging 43-149 KW: 509
+Normal charging 0-42 KW: 22,966
+CO₂
+375,879 t of CO2e ×
+The reduction in carbon dioxide emissions
+through year-end 2023 achieved by B2B
+customers in Germany through the use of
+large-scale CHP plants installed by E.ON.
+54
+54
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+Number of charging points
+sold by E.ON in Europe.
+In addition, the People Guideline on HSE communicates E.ON's
+HSE aspirations and states the expectation that all employees
+embrace HSE on the job. It also describes E.ON's Safety F1RST
+principles for the safety mindset and behaviors necessary to
+prevent accidents. The guideline contains extra tasks for managers
+because their responsibilities include leading by example with
+regard to HSE.
+The Group Standard for Incident Management, which applies to
+E.ON contractors as well, establishes consistent rules for
+classifying, investigating, analyzing, and reporting HSE incidents
+and for sharing information. It complements PRISMA (Platform for
+Reporting on Incident and Sustainability Management and Audits),
+E.ON's IT solution for incident management, which is described
+below under "Specific Actions."
+The Group Standard on HSE Management Expectations, which
+took effect in 2022, defines expectations for 15 core elements. It
+addresses occupational safety and accident prevention as well as
+the safety of E.ON's technical facilities, products, and services over
+their entire life cycle, HSE in project management. The chapter
+entitled Data Protection, Cybersecurity, and Product Safety
+contains more information about product safety. This standard
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report →Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+E.ON considers itself a learning company whose ambition is
+continuous improvement. This includes a constructive culture of
+failure as well. We thoroughly investigate incidents by conducting
+root-cause analyses ("RCA"). For this purpose, E.ON has
+introduced a specific Group standard and, in 2023, further
+expanded the related training and continuing skills development
+offerings. The training courses on offer cover topics such as
+investigation methods and communication. Lessons learned from
+incident investigations are shared throughout the Group and are
+incorporated into the units' activities and into working groups.
+E.ON also uses the lessons learned to institute preventive
+measures.
+E.ON Integrated Annual Report 2023
+PRISMA, an integrated IT solution, is the main component of
+E.ON's online incident management system and is used by all E.ON
+units. It enables us to reach many users, report and manage data,
+and ensure a high degree of transparency. Incident investigations
+are entered and stored directly in PRISMA, ensuring that all
+companies and Corporate Functions always work with the same
+database. Incident reporting is prompt, and the situation should be
+clear for everyone involved. All this is intended to help prevent
+incidents. E.ON has five categories of incidents. They range from 0
+(low) to 4 (major). E.ON's HSE Standard on Incident Management
+requires the units to use PRISMA to report category 4 incidents to
+the HSE department at Corporate Functions within 24 hours; in
+addition, the units immediately forward the information to the
+Management Board. Employees must report all incidents,
+regardless of their severity, using PRISMA. No employee needs to
+fear any disadvantages. In addition, their personal data are always
+protected and can only be accessed by limited user groups. E.ON
+analyses all incidents. If employees or contractors who find
+themselves in a situation that they believe is potentially
+dangerous, they have clear instructions to suspend work
+immediately and, if necessary, leave the work area. They are also
+instructed to alert their colleagues to potentially dangerous
+situations.
+E.ON runs an HSE Community that extends across all regions and
+segments. It helps us be a learning company and serves in
+particular to share knowledge and experience. The community
+meets regularly and, as needed, in special expert groups. Experts
+work together to achieve improvements in key areas like incident
+prevention. The range of topics in 2023 included compliance with
+Germany's Substitute Construction Materials Regulation (German
+abbreviation: ErsatzbaustoffV) and Federal Soil Protection and
+Contaminated Sites Regulation (German abbreviation: BBodSchV),
+the protection and promotion of biodiversity and species diversity,
+electrical safety, HSE in the installation business, HSE at the
+Energy Networks segment, and safety in underground
+engineering.
+The units and Corporate Functions also work together on Connect,
+E.ON's Group-wide social media platform. The form and content of
+HSE topics on the platform are continually expanded and updated.
+The additions in 2023 included an HSE live dashboard that
+displays HSE key performance indicators for the entire E.ON Group
+and updates them daily. The dashboard went live in May.
+Employees and managers who have questions or concerns about
+their physical or mental health can contact the Employee
+Assistance Program ("EAP"). The EAP is a free health-advisory and
+life-coaching service available in multiple languages to E.ON staff
+in Germany, the United Kingdom, Sweden, Italy, the Czech
+Republic, Slovakia, and Hungary. We have similar programs in
+other countries where we operate. Alongside the EAP, E.ON offers
+employees and managers one-on-one psycho-social counseling.
+There are also supplementary functions and roles at E.ON,
+including social, addiction, and health counseling. Across the
+Company, these functions and roles are performed by employees
+alongside their regular duties. These employees are obliged to
+maintain confidentiality.
+E.ON employees can also take advantage of specific preventive
+measures (for example, nutrition counseling, and colon and skin
+cancer screening), consult company physicians, and take
+advantage of EAP benefits as well as use company fitness
+facilities.
+Goals and Performance Review
+The E.ON Management Board is informed about category 3 and 4
+incidents, developments relating to accidents, and related
+measures and programs by means of monthly reports from HSE
+and regular consultations with the Senior Vice President Group
+HSE. The units report fatal and life-threatening incidents directly
+to the Management Board within 24 hours.
+The purpose of E.ON's incident analyses is to understand causes,
+take measures to prevent them, and identify risks. If accident data
+54
+E.ON's managers fulfil their responsibility as health and safety
+leaders in part by going on safety walks and engaging in dialogue
+with employees. During management visits, known as gemba
+walks, they can take a close look at workplaces, talk directly with
+employees, and deepen their understanding of HSE issues,
+including risks. The Group-wide HSE app (formerly "Go, See &
+Talk"), which can be downloaded on PRISMA, facilitates the
+process. Among other things, it contains questions for each type of
+work environment, including safety culture and workplace health
+issues. E.ON managers also use the app to submit answers they
+received, their own observations, and photos and documents. The
+information is automatically entered into PRISMA for additional
+analysis. Since 2022, near misses and unsafe conditions or
+behaviors can also be recorded in the app. More functions will
+follow as part of a program called Digitalization@HSE that was
+launched in the year under review. For example, the app's
+functions for conducting safety walks will be simplified to better
+involve all employees. The overarching objective is to improve
+E.ON's entire HSE performance. The HSE division has conducted
+quick checks since August 2021. They involve an outside partner
+evaluating E.ON's safety culture and identifying possible risks. So
+far, 21 quick checks have been conducted at our operating units.
+E.ON Integrated Annual Report 2023
+56
+Furthermore, training formats for employees and managers were
+revised in 2023. The findings of extensive use analyses (the
+employee survey and in-depth interviews with senior
+management) were used to make target-group-specific
+adjustments.
+55
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report → Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Training content given a sharper focus included psychological
+safety, communications, and appreciation. This was accompanied
+by an ambassador campaign in which selected top 100
+personalities describe what caring culture means for their area of
+responsibility.
+provides the foundation for all cascading HSE rules and processes
+at E.ON, thereby supplementing the requirements of the relevant
+standards (including VDE, DVGW, DIN, and ISO). E.ON developed
+an Expectations Maturity Assessment Tool ("EMAT") to simplify
+implementation and assess the status of management systems
+and rolled it out in April 2023. The tool is a specification of the
+aforementioned Group Standard on HSE Management
+Expectations adopted in 2022. In addition, we opened and/or
+migrated two IT portals to support HSE compliance processes:
+Red-on-line (formerly known as Gutwin) for managing E.ON's legal
+obligations and eNorm for managing obligations from norms that
+E.ON must apply (such as Paragraph 49 of Germany's Energy
+Industry Act) and/or would like to apply (including, for example,
+ISO 45001 and ISO 50001).
+More than 40 E.ON companies in Germany are now certified to
+ISO 45001 (occupational safety), ISO 14001 (environmental
+protection), and ISO 50001 (energy management) by means of a
+multisite process called E.ON Matrix Certification. Most of these
+companies are network companies and their subsidiaries, sales
+companies, and companies that offer integrated energy
+infrastructure solutions. This is another step to manage these
+companies in terms of occupational health and safety and
+environmental protection, to leverage synergies, and to harmonize
+processes.
+Organization and Responsibilities
+E.ON is committed to protecting people and the environment.
+Because the approaches and systems for both are similar, E.ON
+combines environmental management and occupational H&S
+management in a single HSE organization. The E.ON Management
+Board and the management of our units are responsible for E.ON'S
+HSE performance, which includes compliance as well as
+improvement. They set strategic targets and update policies to
+foster continuous improvement. They are supported and advised
+by the HSE department at Corporate Functions and the E.ON HSE
+Council. The council is composed of senior executives and
+employee representatives from different business areas and
+countries in which E.ON is active. It meets at least two times a
+year and is chaired by the member of the E.ON Management Board
+responsible for HSE. The second HSE Council meeting was
+rescheduled to January 2024 because of a change in division
+heads. E.ON units have their own HSE councils and expert teams
+as well. They define the HSE requirements for their unit and plans
+to implement them. Every unit must ensure that it meets E.ON's
+corporate and HSE standards, design and implement HSE plans
+according to local needs, and follow E.ON's HSE Strategy
+Roadmap for 2021-23.
+E.ON's International Health Experts team intensified its
+collaboration to foster health-related improvements and
+innovations and thus its health strategy. Since 2022 the team has
+again been sharing knowledge and experience between countries
+to identify and leverage collaboration synergies.
+Specific Actions
+The HSE department oversees strategic H&S training sessions.
+This includes the training provided to the E.ON Group's top 100
+executives, programs for senior managers in the operating
+business, and training for staff who conduct incident
+investigations (such as root-cause analysis). With regard to the
+Group HSE Strategy Roadmap, E.ON's units conduct their own
+operational H&S training, programs to enhance HSE culture, and
+training required by law.
+E.ON managers in Germany can enroll in Healthy Leadership, a
+training module on how to address health issues and thereby
+promote health in their team. This training continued to be
+conducted digitally in 2023 and covered issues such as
+psychological security in teams, stress reduction, mental health,
+and tips for an ergonomic workplace. E.ON employees in Germany
+had free access to online ergonomics advisors, including for their
+home office.
+In addition, workshops for a common understanding of E.ON's
+caring culture were held for the top 100 executives and senior
+managers from operations and administration.
+In addition, the HSE division works closely with the Human Rights
+Center of Expertise and Group Compliance with regard to
+Germany's Supply Chain Due Diligence Act to monitor compliance
+with procurement policies and standards and to ensure adherence
+to E.ON's minimum standards for HSE. This collaboration likewise
+resulted in additional HSE issues being embedded in procurement
+processes, such as dealing with smaller suppliers. Harmonized
+minimum HSE requirements for contractors now apply at all E.ON
+companies in Germany; these requirements may be supplemented
+by additional requirements depending on the services the
+companies procure. The implementation of a Group-wide standard
+for contractor management continues at E.ON companies and
+their processes for contractor management are being adjusted
+accordingly. This new standard defines minimum requirements
+and roles and responsibilities to ensure the consistent
+management and evaluation of HSE issues and risks in the
+collaboration with contractors. E.ON companies must integrate the
+requirements into their processes by May 2024. They are
+supported by a catalogue of contractor management measures,
+which also serves as an assessment tool for the implementation of
+the standard.
+29
+Radioactive waste
+Depending on the project and customer requirements, we also use
+a variety of KPIs to evaluate the effectiveness of EIS solutions for
+customers in the real estate and housing sector. These KPIs
+include primary energy consumption (such as the use of gas to
+generate heat), avoided emissions (typically CO2), and the
+deployment of renewable generation technologies (such as
+geothermal energy and heat pumps) in new property
+163
+211
+5
+10
+25
+Czech Republic
+Poland
+188
+330
+411
+Hungary
+158
+100
+0
+Slovakia²
+306
+346
+451
+Pilot countries
+Romania
+1,047
+1,050
+1,052
+Sweden
+105
+3,112
+13,804
+9,654
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→Risks and Chances Report
+→ Forecast Report
+= Contents Q Search ← Back
+to processing and final processing for intermediate storage and for
+the transfer of ownership to the relevant federal company.
+As with LLW and ILW, irradiated fuel assemblies are placed in
+approved transport and storage containers and stored in interim
+storage facilities at the NPPs. Under the Law on the
+Reorganization of Responsibility in Nuclear Waste Disposal, the
+interim storage facilities and containers of irradiated fuel
+assemblies became the property and responsibility of the German
+federal government effective January 1, 2019. Fuel assemblies
+will remain in the interim storage facilities until Germany has a
+state-owned receiving facility or repository for HLW. When this
+will happen is unclear. The responsibility for final disposal lies with
+the German federal government.
+2021
+Metric tons
+2023
+2022
+Low and intermediate-level
+12,178
+radioactive waste
+1,374.1
+0.0
+1,105.7
+0.0
+1,420.2
+65.0
+For 2023 PEL submitted notification for 268.4 metric tons more
+LLW and ILW than for 2022. The amount of waste is subject to
+fluctuations, depending on the NPPs' dismantling activities. As in
+the prior year, HLW amounted to 0 metric tons due to the
+decommissioning of NPPs. New fuel rods were installed in Isar 2
+NPP-which continued to operate temporarily until April 15,
+2023-for the last time in October 2021.
+Sustainable Products and Services
+GRI 3-3
+Greenhouse gas emissions cannot be limited only by the way
+energy is generated. Energy efficiency and other methods of
+reducing consumption as well as energy recovery can lower
+emissions, too. E.ON has a broad portfolio of such solutions, which
+it markets to residential customers and to industrial, commercial,
+and municipal customers. E.ON continually adjusts this portfolio to
+better meet its customers' needs, respond to market changes, and
+utilize new technologies.
+E.ON's Approach
+E.ON offers distributed energy systems for households under the
+brand name Future Energy Home. Customers can use a variety of
+solutions: solar modules for generating their own energy and
+battery systems for storing it as well as charging stations for
+electric vehicles ("EVs"), heat pumps, and other heating solutions.
+The devices are connected to E.ON Home, an energy-management
+app; launched in 2018, it was available in six countries in the year
+under review. Regardless of where they are, customers can use the
+app to view their home's energy output and consumption, control
+their devices, and reduce their energy use and carbon emissions.
+E.ON added new functions to the app in 2023, particularly for
+electromobility ("eMobility"). The aim is to enable customers to
+conveniently and automatically charge their EV when energy is
+cheaper and greener. Other features that provide our customer
+with additional services for energy optimization and thus savings
+in smart charging and for improved use of stored solar power are
+planned for 2024 and are currently in the development and test
+phase.
+High-level radioactive waste
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+4,874
+4,738
+EIS pursues a partnership-based business approach in developing
+integrated solutions for heating, cooling, electricity, and mobility.
+These holistic concepts that integrate the individual sectors-for
+example, electricity from photovoltaic systems can be used to
+On the commercial vehicle side, E.ON Drive aims to capitalize on
+growth in the market segments of electric road haulage and public
+passenger transport as well. Battery-powered commercial vehicles
+are still the exception, especially in the heavy-duty category.
+Unlike the passenger car market, the transportation sector is only
+at the beginning of its evolution toward zero-emission mobility.
+But interest among companies and municipalities in electrifying
+their truck, bus, and van fleets is growing. Climate targets,
+increasing freight transport, and the growth trajectory of electric
+drives in local and long-distance public transport will pose greater
+challenges for charging infrastructure, land use, and grid
+connections as well. E.ON wants to help fleet operators meet
+these challenges by significantly expanding its portfolio of
+products and services for charging fleets of electric commercial
+vehicles.
+As an eMobility provider ("EMP"), we give eCar drivers access to
+our charging network. This network also includes charging points
+from other providers that are available to E.ON customers as
+roaming options. In addition, we offer residential customers
+innovative charging stations and specific electricity tariffs. We
+supply our commercial customers with both regular and fast
+charging stations. Furthermore, we support them with solutions
+for EV fleet management.
+E.ON Plus enables residential customers in Germany to bundle two
+or more energy contracts for power or gas and to benefit from 100
+percent green power at no extra charge. By meeting certain
+conditions, they can receive an annual discount of €60 per
+contract. E.ON contracts throughout Germany are eligible.
+Moreover, customers can bundle their own contracts or participate
+in E.ON Plus with family members, friends, or neighbors.
+Specific Actions
+Of E.ON's three business units active in eMobility, E.ON Drive
+Solutions plays a Group-wide role as a competence center for
+effective and attractive charging solutions. E.ON Drive Solutions is
+represented across Europe, and its task areas include sales,
+operations, and IT management.
+E.ON's distribution system operators ("DSOS") across Europe,
+which are part of the Energy Networks segment, are responsible
+for installing smart energy meters in their service territories; the
+exception is the United Kingdom, where E.ON's retail organization
+provides them to its customers. German law created two roles for
+the provision of smart energy meters. The first role, the default
+metering provider, is responsible for the mass rollout of the
+standard smart energy meter mandated by German law. At E.ON,
+this role is performed by its DSOs. The second role, the
+competitive metering service provider, offers the standard smart
+energy meter as well as other metering solutions. At E.ON, this
+role is performed by its German retail sales unit. In addition, E.ON
+subsidiaries act as smart-meter service providers for municipal
+utilities and regional energy suppliers in Germany.
+Our Chief Operating Officer-Commercial, who is a member of the
+E.ON Management Board, has overall responsibility for the entire
+customer business, including the Customer Solutions segment.
+E.ON Energy Infrastructure Solutions ("EIS") and Business-to-
+Customer ("B2C") work with various E.ON business units on a wide
+range of topics, such as product development, plant operation, and
+sustainability management. Responsibility for this lies with the
+regional units for their respective market (including Western,
+Central, and Eastern Europe, the United Kingdom, and
+Scandinavia).
+Organization and Responsibilities
+cooling networks. Some solutions are complemented by software-
+based solutions and analytics that enable customers to reduce
+their energy consumption, costs, and greenhouse gas emissions by
+visualizing and optimizing their energy use.
+power heat pumps a and eMobility charging infrastructure. E.ON
+enters into long-term partnerships, such as the energy partnership
+it concluded with Messe Berlin for a sustainable supply of heat and
+cooling. By 2025, EIS will convert the trade fair ground's heat and
+cooling supply to climate-friendly technologies. Various heat
+sources will work together and thus yield significant energy,
+carbon, and cost savings and also ensure greater independence
+from individual energy sources.
+= Contents Q Search ← Back
+→Internal Control System
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report →Risks and Chances Report
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+2
+52
+Distributed, flexible, and connected supply systems are crucial for
+the future energy world. E.ON wants to propel their development
+with its Energy Infrastructure Solutions ("EIS") business. This
+business develops energy units to supply cities and communities
+as well as commercial and industrial customers with sustainable
+heat (steam), cooling, and electricity. Its portfolio includes district
+heating and cooling, distributed solutions for city districts and
+industrial and commercial customers as well as products and
+services for greater energy efficiency. EIS's offerings incorporate
+the latest technology, including large-scale heat pumps,
+combined-heat-and-power ("CHP") and energy-recovery plants as
+well as waste-heat recovery and low-temperature heating and
+E.ON offers comprehensive infrastructure solutions to make
+charging both economical and climate-friendly. Under its E.ON
+Drive brand, E.ON plans and installs charging stations and
+connects them to the power grid. E.ON is also responsible for
+supplying energy and operating the equipment. Our eMobility
+business continues to focus on three areas: E.ON Drive Solutions
+serves private and business users. Its focus is on offerings for
+charging at work, on the go, and at home, which include a variety
+of charging stations as well as related installation and energy
+services. In addition, E.ON Drive eTransport is engaged in charging
+solutions for the electrification of commercial vehicles. E.ON Drive
+Infrastructure is a charge point operator ("CPO") and thus provides
+charging infrastructure in public places.
+→ Disclosures Regarding Takeovers
+5,824
+EIS customers increasingly link their sustainability targets to the
+United Nations Sustainable Development Goals ("UN SDGs"),
+especially SDGs 7 (Affordable and Clean Energy), 11 (Sustainable
+Cities and Communities), and 13 (Climate Action). EIS formed
+partnerships with municipal, industrial, and real estate customers
+across Europe in 2023 to support them in achieving their
+sustainability targets. By assisting them with development
+projects that have long-lasting effects, we also aim to help
+safeguard their assets' long-term value.
+Goals and Performance Review
+5,300
+5,830
+2021
+2022
+2023
+Thousand units
+Rollout countries
+United Kingdom
+Germany1
+Installed Smart Energy Meters by Country O
+Progress and Measures
+demands and market standards. Teams from our regional units
+monitor these EIS projects on a regular basis.
+developments. Targets for these KPIs differ based on customer
+E.ON continues to take part in research projects at universities and
+research institutions. The purpose is to develop the technologies,
+systems, and approaches that will make it possible to meet the
+needs of tomorrow's energy world. Our flagship partnership is
+with the E.ON Energy Research Center at RWTH Aachen
+University. Its research has an interdisciplinary approach and
+focuses mainly on distributed generation, smart grids, and efficient
+building technologies.
+For digital energy-management solutions to function seamlessly,
+smart energy meters are essential. An EU Directive from 2021
+stipulates that, to the degree technically and financially feasible, all
+customers should have a smart energy meter. Member states
+must transpose this directive into national law. For example,
+Germany's Act on the Digitalization of the Energy Transition,
+which was amended in 2023, specifies that all customers must be
+equipped with a smart energy meter by 2032. More information
+can be found below under "Goals and Performance Review."
+The E.ON Drive Infrastructure team invests in, builds, and operates
+charging infrastructure at publicly accessible locations to support
+the development of a Europe-wide network. It aims to expand its
+network by 1,000 charging points per year and is focusing on
+three key use cases to achieve this target: in the immediate vicinity
+of densely populated residential areas, city centers, and
+attractions; in partnership with high-traffic destinations, such as
+supermarkets or hotels and restaurants; and along freeways.
+E.ON's goal is to equip all its customers with a smart energy meter
+in the markets covered by the EU directive. However, regulatory
+delays in the certification of the communication units, known as
+smart energy meter gateways, prevented DSOs in Germany from
+starting to gradually rollout smart energy metering systems until
+February 2020. Until the responsible federal authority withdrew
+the market declaration in May 2022, the rollout of smart energy
+metering systems in Germany proceeded according to plan. Since
+then, it has continued on a reduced scale. A renewed ramp-up
+required an amended law that took effect in mid-2023.
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report →Risks and Chances Report
+→ About this Report
+→ Governance
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+53
+E.ON wants to offer its customers pioneering energy solutions for
+the energy world of today and tomorrow. We want our solutions
+to help them save money, use less energy where possible, and
+emit less carbon dioxide. E.ON has set a target for this: by 2030,
+the Company aims to reduce customers' carbon dioxide emissions
+by 50 percent relative to 2016 (you can find out more about
+E.ON's climate targets in the Climate Protection chapter).
+The impact that EIS's projects in the industrial sector have on our
+customers' sustainability can be measured by a variety of KPIs.
+These KPIs range from carbon-emissions savings to reductions in
+energy costs and consumption including reductions in final energy
+consumption (such as electricity) as well as primary energy usage
+(for example, fuel consumption to generate electricity or heat). Due
+to country-specific standards and reporting obligations, however,
+these KPIs are not consistently consolidated Group-wide.
+emissions to be reduced to a maximum of 85 million metric tons of
+CO2e per year by 2030. To achieve this, passenger car and road
+freight transport must be climate-neutral and the range of
+alternative drivetrains and the infrastructure to supply them with
+energy must be massively expanded. One million publicly
+accessible charging points are to be installed in Germany alone by
+2030. In addition, there will be charging points in eCar drivers'
+private and business environments and at the premises of EV fleet
+operators. E.ON's objective is to use its experience in the energy
+sector to enable EV charging in public places, at work, and at
+home.
+Also, eMobility will play a significant role in the energy transition.
+Germany's transport sector emitted around 148 million metric
+tons of CO2 equivalents ("CO2e") in 2021. The German Climate
+Protection Act, which was amended in 2021, calls for these
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+51
+All central tasks related to the handling and disposal of radioactive
+waste have been combined at PEL's Nuclear Waste Management
+department since July 1, 2023. This optimizes the on-schedule
+and efficient coordination of all strategically important aspects of
+nuclear waste disposal at PEL's fleet of NPPs undergoing
+dismantling. The head of Nuclear Waste Management reports
+directly to the PEL's CEO. Key objectives are to standardize and
+digitalize nuclear waste disposal and thus to optimize related
+processes and the quality-from waste generation and collection
+NPP operators are responsible for packaging LLW and ILW safely
+and according to approved standards. After regulatory
+certification, packaged LLW and ILW becomes the responsibility of
+the German federal government. The Law on the Reorganization of
+Responsibility in Nuclear Waste Disposal transferred the
+responsibility for operating defined storage facilities for LLW and
+ILW. Pursuant to this law, the German federal government is
+responsible for the storage of PEL's LLW and ILW effective
+January 1, 2020. This applies to the following PEL facilities: Stade
+NPP, Würgassen transport staging hall, Grafenrheinfeld staging
+hall, Unterweser radioactive waste storage facility, and
+Unterweser storage facility. The Konrad repository for LLW and
+ILW is currently being built by BGE, the German Federal Company
+for Radioactive Waste Disposal. BGE expects Konrad to be
+commissioned in 2029.
+• LLW and ILW account for the largest amount of radioactive
+waste in terms of both weight and volume. Examples of LLW
+include protective clothing, cleaning equipment, tools, and
+building rubble from plant control areas. ILW includes, in
+particular, the reactor pressure vessel's near-core mounting
+parts. Together, both waste categories contain less than 1
+percent of an NPP's total radioactivity.
+= Contents Q Search ← Back
+• HLW contains more than 99 percent of an NPP's total
+radioactivity and consists primarily of the fission products of
+uranium in the irradiated fuel assemblies.
+The Law on the Reorganization of Responsibility in Nuclear Waste
+Disposal (Entsorgungsübergangsgesetz, or "EntsÜG") and the
+contract to finance the costs of the nuclear energy phaseout
+between the German federal government and German NPP
+operators stipulate the division of responsibility for nuclear waste
+interim storage and final disposal and its financing.
+PEL is responsible for the safe and reliable operation and
+dismantling of its NPPs. Both activities result in radioactive waste.
+E.ON is well aware of the high responsibility that is associated with
+both.
+Safe Handling of Radioactive Waste
+source.
+PEL withdrew 203.1 million cubic meters of freshwater in 2023,
+40 million cubic meters less than in 2022. PEL used freshwater,
+which came almost exclusively from rivers, primarily as cooling
+water. Water consumption dropped sharply compared with the
+previous year because significantly less cooling water was needed
+after the shutdown of Isar 2 NPP in April 2023. The withdrawal of
+water not used for cooling declined as well. This is related to the
+progress of dismantling at Unterweser, Brokdorf, and Grohnde
+NPPs. PEL returned 93.8 percent of withdrawn water to its
+Fresh water withdrawal
+Fresh water discharge
+Fresh water consumption
+E.ON aims to minimize the amount as well as the volume of
+radioactive waste. We do this in part by separating it from
+uncontaminated waste and by subjecting it to certain treatments
+that reduce its volume. The nuclear industry distinguishes
+between radioactive waste that generates negligible heat-
+low-level waste ("LLW") and intermediate-level waste ("ILW")-
+and waste that generates high heat: high-level waste ("HLW"):
+11
+259
+556
+7
+64
+71
+39
+E.ON's regional network companies are responsible for the safe
+and reliable operation of its distribution networks. Network control
+7
+38
+45
+1Totals may deviate due to rounding.
+2Including influence of force majeure.
+³Increase in 2023 (2022 data) due to several days of extreme weather conditions and storms.
+297
+50
+382
+134
+293
+331
+76
+254
+181
+47
+45
+451
+308
+144
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+89
+67
+= Contents Q Search ← Back
+E.ON Integrated Annual Report 2023
+1.67
+1.20
+0.47
+0.31
+0.08
+0.40
+Un-
+scheduled²
+0.31
+0.09
+0.41
+0.32
+0.08
+Total Scheduled²
+Scheduled Unscheduled
+Interruptions per
+customer
+67
+Eminimi
+2021
+Total² Scheduled² scheduled²
+Un-
+2022
+2023
+Germany
+Sweden3,4
+SAIFI Power¹ G4-EU28 ×
+> Our network companies also calculate the system average
+interruption frequency index ("SAIFI"). This measures the average
+number of interruptions per customer and year. The data collection
+process for SAIFI is the same as for SAIDI.<
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report
+→Internal Control System → Disclosures Regarding Takeovers
+→Risks and Chances Report
+→ About this Report
+Combined Group Management Report
+Total²
+0.39
+Organization and Responsibilities
+→Internal Control System → Disclosures Regarding Takeovers
+→Risks and Chances Report
+2022
+Total Scheduled
+2021
+Total
+minimi
+Scheduled
+Unscheduled
+there. They are calculated using the method prescribed by the
+Federal Network Agency (known by its German acronym,
+"BNetzA"). The calculations are based on service interruptions that
+have been verified by the BNetzA. All other countries in which
+E.ON operates networks have similar quality standards. Their
+national regulatory agencies verify and validate network operators'
+outage reports. The SAIDI figures for each country therefore
+reflect the methodology prescribed by its regulatory agency. These
+key figures are generally reported without interruptions due to
+force majeure; exceptions are indicated accordingly.
+Total
+Unscheduled
+6
+15
+21
+7
+16
+24
+In 2021 E.ON adopted a strategy for deploying more smart
+technology (smartification) in its low- and medium-voltage grids.
+The strategy applies in Germany and all other countries in Europe
+where the Company operates. E.ON's smart-tech deployment
+targets vary by country but generally far exceed those set by each
+country's regulatory agency. We monitor progress using key
+performance indicators ("KPIs") on a regular basis.
+2023
+Germany
+Sweden 2,3
+Hungary
+Czech Republic²
+Romania
+Poland³
+customer
+66
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→Risks and Chances Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ Governance
+→ Forecast Report
+= Contents Q Search ← Back
+centers manage network operations. They are also responsible for
+resolving unforeseeable outages in their service territory. E.ON's
+crisis management system defines the responsibilities and
+procedures for dealing with widespread disruptions. The Incident
+and Crisis Management policy provides guidelines for such
+situations. The Chief Operating Officer-Networks ("COO-N")
+oversees the Energy Networks segment. Under his leadership,
+three departments (Energy Networks Europe, Energy Networks
+Germany, and Energy Networks Technology & Innovation) at
+Corporate Functions manage the segment's regional units. These
+departments' tasks include strategic development, investment
+planning, and asset management.
+Specific Actions
+E.ON has investment and maintenance programs under which it
+expands and maintains its networks in line with demand. E.ON will
+invest €33 billion from 2023 to 2027, of which €26 billion will go
+toward network expansion. This is intended to enable us to ensure
+that all our network customers are connected to the network and
+receive a reliable energy supply. Our regional network companies
+are responsible for carrying out the measures, which are planned
+for one or more years. E.ON invested about €5.2 billion in network
+expansion in 2023. Part of the investment budget went toward the
+gradual expansion of smart grids: E.ON's network structure is
+being progressively equipped with sensors, control and relay
+technology, as well as being automated and digitally networked.
+The increasing use of smart-grid technology makes it possible to
+avoid or delay costly investments in network expansion, for
+example, by using new technology to making better use of existing
+overhead lines. Investment decisions always consider the
+efficiency of each measure alongside security of supply. This
+means that E.ON chooses those solutions that make the most
+sense from both a technical and business standpoint. This is
+because network investments also affect network fees, which
+account for a portion of the electricity price paid by customers.
+Goals and Performance Review
+E.ON's regional network companies record all planned and
+unplanned service interruptions in their distribution networks. The
+data collected are aggregated into the system average interruption
+duration index ("SAIDI") for electricity. It indicates the average
+interruption duration per customer and year.
+E.ON reports the SAIDI of its fully consolidated network
+companies by country. The figures for Germany reflect the
+weighted average of its fully consolidated network companies
+SAIDI Power¹ G4-EU29
+Minutes per
+7
+15
+22
+33
+We continued the E.ON Lab in 2023 to study more potential
+innovations. In Arnsberg/Sundern and Lüneburg, Germany, E.ON is
+testing the extent to which various aspects of a future energy
+world are feasible, useful, and scalable. E.ON is expanding its
+digital equipment in these communities and assessing the value
+that such smart solutions add for customers and networks. We are
+also exploring whether and how current energy-market regulation
+can better reflect customer needs. E.ON's smart solutions promote
+secure and efficient network operation. This gives us a transparent
+view of the operating status of network equipment and energy
+flows and enables us to make targeted use of the flexibility
+available in our networks.
+• Fluctuation-tolerant local energy systems that have battery, gas,
+or heat storage devices and their own generating units
+• Peer-to-peer sharing solutions, such as for households and
+businesses
+• The aggregation of multiple distributed power generating units
+into virtual power plants that respond dynamically to changes in
+consumption
+• Flexible tariff models that use price incentives to influence
+demand and thus help stabilize networks
+Going forward, smart grids will serve as the platform for the
+innovative technologies and new business models that contribute
+to the energy transition's success. Examples include:
+E.ON wants to operate secure and stable networks in a future
+energy world as well and thus offer its customers a reliable
+electricity supply at reasonable costs. That is why E.ON is
+upgrading to smart grids by equipping networks with sensors and
+control technology, increasing the level of automation, and adding
+a digital layer. This will enable us to manage energy flows in line
+with demand and to monitor our grids in real time and with much
+greater granularity than today. Additionally, as is described in
+greater detail below under "Specific Actions," smart-grid
+technology makes it possible for us to partially avoid or delay some
+grid expansion.
+E.ON's Approach
+E.ON's objective as an energy company and distribution system
+operator is to ensure a secure supply of electricity to its customers.
+A reliable electricity supply is essential for industrialized countries
+to be able to maintain their economy and meet their inhabitants'
+basic needs. For example, industrial customers that operate high-
+precision production facilities require a constant network
+frequency. If frequency fluctuates, machinery can break down,
+resulting in additional costs. A complete interruption of the
+electricity supply can have serious consequences, and not just for
+industrial customers. At companies, government agencies, and
+households, most processes are no longer possible without
+electricity. One challenge in power supply is that energy is
+increasingly being generated decentrally and consequently fed into
+the E.ON network from many different points. Moreover,
+renewables feed-in fluctuates because it depends on the weather
+and other factors beyond E.ON's control.
+GRI 2-6, GRI 3-3, GRI G4 Sector Disclosures Electric Utilities
+Security of Supply
+Since 2017, each unit has also established its own measures to
+systematically improve customer perception. These activities are
+initiated and overseen by the units' CEO and board members
+because they are personally responsible for their unit's NPS
+performance. They review the measures annually and readjust
+them. They increasingly include sustainability criteria. The
+measures' duration can cover several years, depending on the
+scope of the planned adjustments.
+In 2023, which operational journey NPS data must be measured
+by all regions was defined centrally for the first time. From
+January 2024 onward, these are the data on complaint
+management and the payment process. The regions completed a
+self-assessment in order to have a uniform basis for data
+collection. Baseline measurement began in the fourth quarter of
+2023.
+Every year, E.ON sets company-wide targets for strategic and
+journey NPS. E.ON uses both indicators at the segment and unit
+level for purposes of management control. Strategic NPS is highly
+relevant for management control because of the information it
+provides about competitors. The E.ON Management Board has
+received a monthly NPS report since September 2020. In addition,
+periodic market reports enable the Chief Operating Officer-
+Commercial and the CEOs of the regional units to exchange views
+on NPS issues and customer topics. NPS also plays a role in
+executives' variable compensation. This consists of two
+components: one factor reflects an executive's individual
+performance, the other the company performance. Progress in
+strategic and journey NPS has accounted for 20 percent of the
+calculation of the company performance since 2020. The
+achievement of NPS targets is also factored into determining the
+E.ON Management Board's compensation.
+Goals and Performance Review
+The Customer Insights team produced a Journey Measurement
+Handbook to provide greater support to our regional companies in
+measuring NPS for different customer concerns.
+= Contents Q Search ← Back
+Guidelines and Policies
+→ Forecast Report
+253
+154
+123
+156
+30
+91
+121
+26
+91
+116
+94
+57
+151
+87
+54
+141
+117
+58
+175
+99
+Scheduled Unscheduled
+0.78
+0.36
+101
+98
+99
+700
+691
+694
+2021
+2022
+2023
+2021
+2022
+2023
+Sweden
+Germany1
+Thousand kilometers
+Gas
+Power
+System Length at Year-end
+through the end of 2023.
+142
+141
+140
+0
+83
+83
+80
+Romania
+5
+5
+5
+67
+67
+The table below provides information on our system lengths
+67
+18
+18
+18
+84
+84
+85
+Hungary
+0
+0
+Czech Republic
+Progress and Measures ☑
+→Risks and Chances Report
+→ Forecast Report
+0.14
+1.05
+0.91
+0.14
+2.17
+1.23
+0.94
+1.80
+0.98
+0.70
+0.82
+1.99
+1.46
+0.54
+1.77
+1.18
+0.59
+0.83
+0.41
+1.10
+0.49
+26
+0.84
+0.60
+2.69
+0.59
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Governance
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+89
+68
+0.95
+0.12
+2Previous year's figures adjusted due to harmonization of definitions (consistency with SAIDI)
+3 Including influence of force majeure
+4Increase in 2023 (2022 data) due to several days of extreme weather conditions and storms
+Poland4
+Romania5
+The following presentation of key figures on service quality
+considers different causes when classifying disruption-related
+interruptions in individual countries because their respective
+national regulatory agencies use different methodologies. These
+key figures are generally reported without interruptions due to
+force majeure; any exceptions are indicated.
+Although E.ON does not use SAIDI and SAIFI for management
+control purposes, these figures provide important information on
+network service quality. At regular intervals, our network
+operators inform the E.ON Management Board member
+responsible for network operations about their supply reliability.
+By the end of the data collection period in 2023, no regulatory
+agency had completed the process of validating outages for 2023.
+This report is intended to contain final figures on the continuity of Czech Republic 3,5
+supply that have been officially validated. Consequently, the
+country-specific figures for the prior year are disclosed below.
+Hungary
+0.71
+3.64
+1.24
+1.10
+1Totals may deviate due to rounding.
+25
+24
+Slovakia
+In 2023 employees were again actively involved in non-profit
+projects in all regions in which E.ON operates. In total, 3 672 E.ON
+employees performed 22 129 hours of volunteer work in 2023.
+This figure may include double counting of employees who
+volunteer more than once.
+Corporate Volunteering
+The E.ON Foundation aims to promote a sustainable
+transformation of the energy system that reflects people and their
+social practices. Guided by the conviction that a purely
+government-mandated, over-regulated energy transition will not
+succeed, it supports projects, events, and practical formats relating
+to energy and society. In 2023 the foundation made about € 1.1
+million in donations and provided more than € 1.9 million in
+funding to the projects it supports. Because the foundation is
+independent, this funding is not included in E.ON's community
+investments.
+E.ON Foundation
+E.ON's corporate giving and strategic community involvement
+totaled more than €22 million in 2023 (prior year: €18 million).
+= Contents Q Search ← Back
+→Internal Control System → Disclosures Regarding Takeovers
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+→ About this Report
+→ Governance
+Data Protection,
+Combined Group Management Report
+69
+12%
+Next generation
+15%
+Climate protection
+73%
+Access to energy
+0
+Strategic Community Involvement
+E.ON Integrated Annual Report 2023
+Alongside corporate giving, E.ON makes strategic investments in
+community involvement, which are typically more long-term in
+nature. In 2023 the financial resources for sponsorships went
+toward three focus areas: climate protection, access to energy, and
+support for the next generation.
+Cybersecurity, and Product Safety ×
+E.ON processes personal data of a variety of stakeholders,
+primarily customers, employees, enterprise partners, and
+suppliers. We have a Group-wide data protection organization,
+which we continually improve. E.ON evaluates its processing
+activities on an ongoing basis in order to comply with applicable
+regulations and to protect data subjects' rights and personal data.
+In addition, E.ON has a broad-based cybersecurity organization
+whose aim is to efficiently protect systems and data regardless of
+where they are accessed from, which devices are used, and where
+the data are processed. Safeguarding all company information-in
+1.11
+1.47
+0.19
+0.91
+1.10
+0.33
+0.79
+E.ON Integrated Annual Report 2023
+0
+GRI 3-3, GRI 418
+70
+Guidelines and Policies
+E.ON extend its high standards for occupational health and safety
+to the products it offers customers. The Company sets uniform
+standards to ensure that its products are safe throughout their life
+cycle, from development to recycling. Our ambition is to comply
+fully with all existing laws and regulations. This applies likewise to
+applicable safety laws and regulations. If, in the case of innovative
+products, current laws and regulations lag behind the state of the
+art, E.ON meets more stringent safety standards. Due to
+confidentiality constraints and the sensitivity of such data, E.ON
+cannot provide information about complaints concerning data
+breaches, regardless of whether these complaints were
+substantiated or not.
+To protect all company information, E.ON has in place an
+Information Security Management System ("ISMS") based on the
+standards of the ISO 2700x series, widely recognized international
+standards for information security. The ISMS is certified for those
+parts of the organization where it is required by law. E.ON works
+to ensure and maintain the confidentiality, availability, and
+integrity of its information resources. This includes monitoring
+infrastructure, vulnerabilities, and threats as well as detecting and
+responding to security events like cyberattacks. For this purpose,
+in-house and outside experts conducted extensive security tests of
+the systems on a regular basis. In 2023 E.ON again updated its
+cybersecurity strategy and designed a roadmap for implementing
+it. Items on the roadmap include improving security awareness,
+identity and access management, cloud security, and new
+detection and prevention capabilities.
+enables E.ON to continually improve these processes (for more
+information, see "Goals and Performance Review" below). These
+activities continued in 2023.
+In 2022 E.ON revised its data protection contracts, in particular EU
+model clauses, and other documents relevant to data protection.
+Among other things, E.ON focused on implementing and updating
+contracts for third-country transfers and assessments of the level
+of protection in third countries (transfer impact assessment). Data
+protection is an ongoing task amid rapidly evolving technologies
+and practices. Using the plan-do-check-act ("PDCA") method
+E.ON takes compliance with the General Data Protection
+Regulation ("GDPR") and national regulations seriously and aims to
+protect natural persons-above all customers, employees,
+suppliers, and other third parties-when processing their personal
+data. In principle, all natural persons may themselves determine
+the extent to which their personal data are processed. E.ON
+Group's Data Protection Management System ("DPMS"), which is
+based on IDW PS 980, an audit standard for compliance
+management systems, describes the minimum standards for data
+protection within the E.ON Group. The DPMS is implemented by
+the individual units and, at the same time, serves to ensure a
+structured, coordinated, and consistent approach to data
+protection. The DSMS was extensively reviewed in 2023. In
+addition, E.ON studied major data breach cases of other companies
+that became public and used these insights to further improve its
+own data protection and IT security measures and to harden its IT
+infrastructure.
+E.ON's Approach
+E.ON offers its customers digital solutions (like the E.ON Home
+app and the E.ON Drive app) as well as a steadily expanding range
+of products installed at their premises. This includes solar and
+battery storage systems, heating systems (including heat pumps
+and boilers), and electric vehicle charging points. Ensuring that
+these products are safe is essential for E.ON to protect its
+customers' health, retain their trust, and continue to serve them
+successfully.
+oral, written, and digital form-is crucial in order to prevent
+damage to E.ON competitive position, brand, and reputation.
+E.ON's Data Protection Policy defines roles and responsibilities in a
+uniform manner across the whole Group. The information security
+standards introduced in 2018, which are based on the ISO 2700x
+series of standards, apply to the entire Group as well. They enable
+0.33
+In order to better coordinate Group-wide and regional activities as
+well as the commitment of the E.ON Foundation and to increase its
+social impact, we have bundled E.ON SE's and the E.ON
+Foundation's activities and linked them more closely. In this way,
+we want to ensure that responsibility for content coordination,
+decisions on projects, and process design lies in one hand.
+E.ON is part of the countries and communities where it does
+business. We therefore feel obliged to make a contribution to their
+prosperity, economic development, sustainability, and quality of
+life. We do this primarily by creating jobs and by offering energy
+solutions that enhance our customers' sustainability and comfort.
+In addition, E.ON engages in community involvement and supports
+employee volunteering in all regions where it operates.
+1,107
+1,110
+Total
+0
+0
+2
+Croatia 2,3
+0
+0
+1,115
+0
+18
+19
+Poland
+0
+0
+0
+23
+23
+23
+18
+Our unit representatives know their country's needs and
+challenges best. So E.ON lets them decide which projects and
+organizations to support. We believe that local decision-making is
+more suitable than central directives for giving our community
+involvement activities a societal impact.
+147
+148
+E.ON's Approach
+GRI 3-3
+Community Involvement
+5%
+Environment and
+sustainability
+1.12
+Education
+12%
+Arts and culture
+146
+18%
+55%
+Society
+0
+Corporate Giving by Category
+E.ON reports its corporate giving by the categories below.
+Our Community Investments
+= Contents Q Search Back
+3 Gas grid Croatia reported for the first time in 2023.
+1Figures for Germany are for the respective previous year: 2023 for 2022, 2022 for 2021, and so forth.
+2Gas grids only.
+Sports
+10%
+→ About this Report
+2022
+38,542
+25,046
+→Risks and Chances Report
+= Contents Q Search ← Back
+Apprentices in Germany
+Energy Networks
+Customer Solutions
+Corporate Functions/Other
+E.ON Group
+Headcount
+2023
+2022
+2021
+2023
+2022
+→ Forecast Report
+Percentages
+2021
+2,037
+2,064
+7.3
+7.2
+72
+67
+65
+1.1
+1.1
+7.4
+1.0
+85
+109
+179
+2,208
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Sustainable Finance → Business Report
+3,201
+3,250
+3,178
+3,438
+2,955
+3,075
+2,666
+2,607
+2,432
+2,580
+2,414
+1,873
+1,879
+1,861
+1,589
+1,578
+1,662
+1,584
+71,613
+1,642
+72,242
+1,565
+69,378
+74,618
+63
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+1.6
+2.1
+3.4
+2,365
+2023, too, was a difficult year for our customers: energy prices
+remained at a high level, which was only partially mitigated by
+government subsidy programs. In some markets E.ON was the
+o
+64
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report → Risks and Chances Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+first supplier to lower its prices below the government-mandated
+price cap, such as in the Czech Republic. E.ON companies made
+customers aware of support opportunities by including
+information about alternative tariffs and government subsidy
+programs in their bills. In addition, customers could use special
+apps and other tools to better understand their electricity
+consumption and ways to conserve energy.
+E.ON's Approach
+E.ON continually measures and improves the experience we offer
+to our customers, in order to retain-and, ideally, deepen-their
+loyalty. It is essential for us to be systematically customer-centric.
+The E.ON brand promises to give our customers what they want in
+the future energy world: consistently positive experiences with our
+services and smart, sustainable solutions. E.ON transports energy
+from where it is produced to where it is needed. We also work to
+empower people, companies, and cities across Europe to create
+the sustainable world that they want to live in. The purpose is to
+build energy communities in which everyone can do their part and
+meet these needs-from a household opting for green electricity to
+an entire city committing to sustainability. Delivering on this
+promise will make the E.ON brand distinctive and enable us to
+successfully expand our business. E.ON's objective is to become
+the number one energy-solutions company in all of its markets and
+thus to live up to its ambition of being the leading company of the
+energy transition.
+In 2023 E.ON revised its market positioning to underscore its
+leading role in the energy transition. As part of this process, we
+surveyed customers and consumers about what characteristics
+they think such a company should have. They told us that it should
+have the necessary size and market strength and above all
+technical innovativeness and a vision of the future energy world.
+All this was accompanied by a desire for reliability and stability.
+Organization and Responsibilities
+The Chief Executive Officer ("CEO") coordinates, from Corporate
+Functions, our brand and marketing strategy with the aim of
+further developing and strengthening the E.ON brand. The Chief
+Operating Office-Commercial ("COO-C") supports the sales and
+energy solutions business for all customer segments and in all
+E.ON markets. The regional units' Customer Experience teams are
+responsible for customer satisfaction. They carry out projects and
+measures in their respective sales territories and exchange
+information on successful approaches and progress on a monthly
+basis. There are Customer Experience teams in Germany, the
+United Kingdom, Italy, Romania, Sweden, the Czech Republic,
+Hungary, Poland, and the Netherlands.
+E.ON's Global Customer Leadership team, which consists of senior
+Customer Experience leaders from the entire Group and
+representatives from the Customer and Market Insights team,
+successfully continued its work in 2023. Its purpose is to listen to
+customers more and foster customer centricity in all E.ON
+markets. The team met four times in the year under review to
+assess Customer Experience activities, identify areas of focus for
+cross-regional collaboration, and give customers a stronger voice.
+The Customer and Market Insights team studies which trends
+shape our customers' attitudes and behaviors. It conducts
+consumer studies, broad-based market research, and advanced
+data analyses and models possible scenarios. The aim is to obtain
+practical knowledge and incorporate it into business processes.
+Specific Actions
+E.ON measures the loyalty and trust of its existing and potential
+customers by means of Net Promoter Score ("NPS"), which was
+introduced in 2009 and became a Group-wide program in 2013.
+NPS indicates customers' willingness to recommend E.ON and its
+services. It also helps us identify which issues are currently of
+particular importance to customers and thus to adapt our activities
+to current customer needs. E.ON measures two types of NPS:
+• Strategic NPS compares E.ON's performance with that of its
+competitors and is based on the feedback of customers
+regardless of whether they have had any interaction with E.ON.
+.
+Journey NPS measures the loyalty of current and potential
+customers who have completed one or more interactions¹ with
+E.ON- for example, if E.ON helped them transferring their
+energy service to their new residence when they move.
+NPS is used by our regional units in Germany, the United Kingdom,
+Italy, Romania, Sweden, the Czech Republic, Hungary, Poland, and
+the Netherlands.
+A methodology introduced in 2017 enables us to measure
+strategic NPS consistently across all markets and thus to identify
+and resolve customer issues experienced in multiple markets. It
+also makes it easier for us to recognize the areas in which useful
+innovations can be offered to customers. The methodology is
+based on an automated reporting process. It therefore avoids the
+errors of manual data entry and improves data quality and
+auditability.
+1 This can involve multiple interactions within a process such as a move, or multiple contacts
+from an existing or potential customer with the same request, for example via the chatbot.
+559
+65
+Customers of all types-households and businesses, cities and
+government entities-understand that a digital and decarbonized
+future means that they will not only consume, but also
+increasingly make and store their own clean energy. These
+customers are extremely knowledgeable and discerning. They
+expect E.ON not only to listen to and anticipate their needs, but
+also to design innovative and sustainable energy solutions, deliver
+best-in-class services, and provide a consistently good customer
+experience. Earning and retaining their trust and loyalty is very
+significant for us to sustainably grow our business. Loyal
+customers tend to stay with us longer, to purchase additional
+products and services, and to recommend us to their family and
+friends.
+3,271
+GRI 3-3
+4202468
+2,213
+2,308
+5.6
+5.6
+5.8
+At the end of the year, E.ON had a total of 2,365 apprentices in
+Germany. This corresponds to an apprenticeship ratio of
+5.6 percent. Of the 587 apprentices who completed their training
+in 2023, 538 were given a permanent or temporary employment
+contract. This is a very high takeover rate of 92 percent (2022:
+553 of 598, or 93 percent). A consistently high takeover rate of
+apprentices is one of the ways E.ON is actively addressing the
+shortage of skilled workers.
+Workforce Age Distribution
+GRI 405-1
+Workforce Age Distribution in 2023¹
+Percentage, as of December 31, 2023
+Women Men
+At year-end 2023, the average age of E.ON employees was 42, as
+in the previous year. This is comparable with the average age at
+other DAX 40 companies. The age distribution of E.ON's workforce
+reflects the demographic trend of working-age people. In 2023
+around 22 percent of our employees were under the age of 31,
+49 percent between 31 and 50, and around 29 percent older than
+50.
+New Employee Hires and Turnover Rate
+GRI 401-1
+E.ON hired 11,308 new employees in the year under review. This
+too reflects the systematic implementation of our strategy
+focusing on growth, sustainability, and digitalization. The voluntary
+turnover rate in 2023 was 4.6 percent (2022: 6.1).
+Customer Satisfaction
+22.0
+Average training hours per employee¹
+¹The completeness of the reported data can only be guaranteed for companies with more
+than 150 full-time equivalents ("FTE"). There is no reporting requirement for companies
+with fewer than 150 FTEs. However, this KPI is calculated based on the Group's total
+number of FTEs.
+> 60
+56-60
+51-55
+46-50
+41-45
+36-40
+31-35
+26-30
+20-25
+< 20
+¹Total workforce includes board members, managing directors, apprentices, interns,
+and working students.
+5,726
+1,890
+6,759
+in the specialist track. A total of 37 participants are currently
+completing the EIGP.
+Goals and Performance Review
+We support our predominantly decentralized HR organization on
+issues of Group-wide significance or Group-wide value
+propositions. This includes setting central targets for topics with a
+Group-wide value proposition. The HR Board-which consists of the
+Senior Vice President ("SVP") Group HR and representatives of the
+local HR organizations-defines, prioritizes, and decides on the
+specific annual HR targets for the implementation of Group-wide
+value propositions and their measurement criteria. The targets will
+be reviewed periodically based on the previously defined
+measurement criteria.
+E.ON wants to retain its people (and their expertise) and enable
+them to grow professionally. One of E.ON's objectives is therefore
+also to fill management positions internally. At talent boards,
+E.ON's HR representatives use a special tool to assess how many
+candidates have participated in an application process and who
+ultimately filled a vacant position. It also enables E.ON to monitor
+whether selected candidates come from its own development pool
+and whether they meet its diversity targets. E.ON's talent boards
+not only focus on identifying talent and planning succession, but,
+since 2021, also on diversity aspects. The objective is in part to
+increase the proportion of women and employees from
+underrepresented groups among managers. That is why, since
+2020, E.ON has been strengthening its commitment and has made
+diversity a People Priority in GPS@E.ON, its HR strategy. Our
+talent strategy in 2023 focused on a more inclusive and flexible
+approach in order to enhance diversity in talent management as
+well. To support this, we piloted a smart digital platform called My
+Career Hub in 2023 as well. The platform suggests opportunities
+to employees that match their skills, interests, and ambitions.
+Examples include suitable jobs, mentoring opportunities, and
+project assignments.
+E.ON has conducted an annual employee survey since 2014 to find
+out how its people feel about their job, their supervisor, the work
+atmosphere in their unit, and other topics. The periodic finetuning
+of our survey approaches led to the decision to implement a
+Group-wide employee engagement strategy (YourVoice@E.ON) in
+2023. Engagement takes into account a large number of different
+factors that together contribute to an engagement score. A high
+score, for example, indicates a high level of employee well-being
+and a lower risk of fluctuation. A characteristic feature of the new
+strategy is that employee feedback is recorded and evaluated more
+regularly. This will enable organizational units such as
+departments and individual teams to identify engagement issues
+swiftly and independently, to discuss them as a team, and to have
+the opportunity to initiate improvements together. Following the
+gradual implementation of YourVoice@E.ON, it will be the central
+approach to employee surveys in the E.ON Group, supplemented
+only selectively by specific, concise surveys on certain topics.
+The centerpiece of the new YourVoice@E.ON approach is a
+technology platform that, at certain intervals, emails employees
+questions that address aspects of well-being and the current work
+situation. Answering the questions is anonymous and voluntary
+and can be integrated into everyday work with little effort.
+Managers can access the findings of this ongoing feedback on
+their dashboards at any time, react to individual aspects or trends,
+and work with their teams on improvements. This makes
+YourVoice@E.ON more than a traditional employee survey and
+supports our feedback culture.
+> We conducted our periodic survey of Employee Net Promoter
+Score ("eNPS") in 2023 as well. eNPS measures employees'
+willingness to recommend E.ON as an employer. In the 2023
+survey, eNPS improved by eight points (+36). <
+= Contents Q Search ← Back
+62
+62
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report → Risks and Chances Report
+→ Governance → Sustainable Finance → Business Report
+→ Internal Control System
+Progress and Measures
+GRI 2-7
+Employees: Core Workforce¹
+→ Disclosures Regarding Takeovers
+→ Internal Control System
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+→ Governance
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report → Forecast Report → Risks and Chances Report
+→ Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Specific Actions
+GRI 404-2
+FTE
+Flexible work arrangements have been part of E.ON's corporate
+culture for many years. In view of the Covid-19 pandemic, E.ON
+established hybrid work as a Group-wide standard. We did this to
+make working at E.ON even more attractive and to position our
+Company as a modern employer in the future as well. Employees
+at E.ON companies based in Germany can take a workation. The
+aim is to give them additional options to make where they work
+more flexible. In a workation, employees may-to the degree
+operationally possible and in conformity with agreed-on
+framework arrangements-temporarily perform their work from
+an EU country other than the one of their contractual workplace.
+The aim is to make working at E.ON even more flexible and to
+respond even more individually to employees' needs.
+Training and development are very important for E.ON's
+attractiveness as an employer and pivotal for E.ON's
+transformation into a learning organization. All employees receive
+training at their onboarding, HSE training, and functional training
+relevant to their role, as well as soft-skills training and access to
+talent and leadership development programs. These include many
+digital, self-directed learning opportunities that employees can
+access from anywhere at any time. In addition to Group-wide
+training opportunities, the units have standardized digital learning
+offerings. E.ON offers them for onboarding new employees and in
+part for training strategically important topics like digitalization or
+health and safety. To simplify their learning, employees can take
+learning journeys on specific specialist topics. The journeys are
+offered by the central HR function's People Development team
+and the central IT function's Digital Empowerment team.
+Currently, each department is conducting projects to develop
+strategically important learning content. This involves identifying
+critical skills and learning needs in line with E.ON's strategy and
+external market requirements. During the year under review, for
+example, we identified which core competencies our employees
+need in which areas to continue managing our digital
+transformation. We will subsequently offer department-specific
+learning opportunities so that we can develop the necessary skills
+in-house. We are currently designing a new process for
+competence and skills management. We want to use it to
+automatically identify future-critical skills based on market trends;
+the process will also draw on new digital functionalities to
+continuously identify missing skills and learning needs for
+specialist departments, managers, and employees. The basis for
+this is an E.ON-wide standardized skill taxonomy. It is managed
+centrally and continually refined in collaboration with specialist
+departments.
+6,009
+In 2023 E.ON established a one-stop shop for all learning content
+in order to make learning opportunities for employees even more
+attractive and easier. This digital platform will combine all E.ON-
+wide learning opportunities in a single place and improve user-
+friendliness. In addition, E.ON drew up a catalog of learning and
+development measures by the end of 2022 in order to achieve the
+goal of becoming a learning organization in the coming years. It
+ensures a Group-wide, new framework for learning and employee
+development and was introduced in all units with initial measures
+in 2023. In the coming years, this will be accompanied by an
+ongoing internal communication campaign, such as the three-
+week Learning Weeks in September 2023 and a Fail and Learn
+video series with managers. The Learning Weeks took place
+throughout the Group as an online format. In this context, 72
+events were held and over 9,000 employees took part.
+E.ON helps people launch their careers by offering apprenticeships
+for various vocations as well as internships, working student
+activities, and other programs. Our offerings in Germany include
+local initiatives to help interested people start their careers with
+the help of school projects, internships, courses, and expert
+guidance. We also employ working students who can gain work
+experience at E.ON and simultaneously finance their education. In
+2022 we also launched a new, Group-wide E.ON International
+Graduate Program ("EIGP") to develop next-generation talent
+personally and professionally and to retain them at E.ON. Cross-
+functional, national, and international assignments enable
+participants to get to know our business and network Group-wide.
+We support them with mentoring, coaching, and training. The
+trainees also work on a joint business project. In 2023 the project
+involved having trainees conduct a survey to ascertain employees'
+attitudes towards E.ON's sustainability culture and thus provide
+important impetus for its evolution.
+In 2023 the EIGP was expanded to include specialist tracks for
+Customer Solutions, Digital, Finance, and Energy Networks.
+Entrants in 2023 consisted of 22 university graduates of nine
+different nationalities. Of these, 14 are in the generalist track and 8
+61
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+E.ON offers its employees benefits in addition to their contractual
+compensation. In addition to the benefits of the Company pension
+scheme or employer-financed accident insurance, E.ON supports
+its employees in non-work-related situations or in special life
+situations, such as when a family member falls ill. Employees in
+Germany, for example, can take advantage of various services
+provided or arranged by the Company. These services range from
+stress and addiction counseling to support in caring for elderly or
+sick relatives. Employees who fall ill for more than six weeks
+within a 12-month period receive help with reintegration. In
+granting these benefits no distinction is made between full-time
+and part-time employment.
+Energy Networks
+E.ON believes that the most effective way for employees to learn
+is through experience and practice. The Company adopts a 70-20-
+10 learning approach: 70 percent of learning happens on the job,
+20 percent through social interaction and knowledge sharing with
+others, and 10 percent by means of programs such as eLearning,
+seminars, and formal training. E.ON keeps up with the faster pace
+of the digital age by increasingly replacing long formats with short
+digital learning formats and self-directed learning. It is part of
+employees' workflow, it is tailored to their individual needs as
+much as possible, and it is accessible anytime and anywhere.
+Corporate Functions/Other
+1 Core workforce includes board members and managing directors but excludes apprentices, interns, and working students.
+2 The company VSEH operating in Slovakia was deconsolidated in the end of 2023.
+Dec. 31, 2023
+38,945
+9,742
+7,028
+6,035
+Headcount
+Dec. 31, 2022 Dec. 31, 2023
+36,549
+8,769
+6,916
+5,745
+Dec. 31, 2022
+]]]]
+37,526
+35,194
+9,420
+8,437
+6,861
+Customer Solutions
+Czech Republic
+The Netherlands
+Sweden
+Poland
+Slovakia²
+Other
+E.ON Group
+Hungary
+FTE
+Germany
+E.ON Group
+United Kingdom
+Romania
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+Customer Solutions' core workforce increased as well. This was
+mainly due to capacity expansion to meet increased customer
+requirements and to roll out smart energy meters in the United
+Kingdom. There was also significantly more growth-driven new
+hiring in most of the other countries, in particular the Netherlands,
+Germany, and Hungary. The deconsolidation of the VSEH Group in
+Slovakia had a countervailing effect at Customer Solutions as well.
+The number of employees at Corporate Functions/Other rose year
+on year as well, mainly because of hiring and incourcing of
+digitalization and IT support capabilities. By contrast, the number
+of employees at PreussenElektra declined owing to the
+dismantling of its nuclear power plants.
+39,456
+26,849
+5,937
+5,790
+2023
+2021
+38,032
+26,067
+5,634
+Core Workforce by Country¹
+72,242
+69,378
+69,733
+¹Core workforce includes board members and managing directors but excludes apprentices, interns,
+and working students.
+At year-end 2023, the E.ON Group's core workforce had
+72,242 employees. This figure includes part-time positions on a
+pro rata basis. The number of employees increased-by 2,864
+FTEs, or 4 percent-in 2023. The proportion of employees working
+outside Germany (34,715 FTEs) decreased slightly to 48 percent
+compared with year-end 2022 (49 percent).
+The number of employees at Energy Networks increased. This was
+mainly attributable to the implementation of our growth strategy,
+associated network expansion, network modernization and
+digitalization. The deconsolidation of the VSEH Group in Slovakia
+had a countervailing effect.
+2021
+Sustainability is integral to E.ON's corporate strategy and guides
+its actions today and will do so in the future as well. This obliges us
+to ensure respect for human rights in all aspects of our business,
+including our supply chain. E.ON therefore expects its suppliers
+worldwide to meet minimum standards in their environmental,
+social, and governance ("ESG") performance, including in relation
+to human rights. E.ON assesses its suppliers' ESG performance
+prior to doing business with them and subject suppliers in higher-
+38
+30
+30
+Percent
+Supervisory Board¹
+Share of women on the
+E.ON launched a Group-wide human rights due diligence project in
+the summer of 2022 to prepare the Company for the requirements
+of the Supply Chain Act. The project identified gaps, developed and
+implemented optimization measures, and designed a Group-wide
+approach to human rights management. The approach took effect
+on January 1, 2023, and assigns Group-wide management to the
+Human Rights Center of Expertise and the Chief Human Rights
+2023
+2022
+E.ON Integrated Annual Report 2023
+80
+Proportion of Severely Disabled Employees in Germany¹ O
+Percentages
+2023
+1Total workforce; includes board members, managing directors, apprentices, interns, and working
+The number of nationalities represented in our
+workforce in 2023 (2022: 110)
+115
+The proportion of women among the shareholder representatives
+on the Supervisory Board is 38 percent. All members of the
+Supervisory Board were independent at the end of 2023.
+laws of some countries prohibit doing so. Germany, however,
+obliges companies to collect and publish data about the number of
+employees with severe disabilities at their operations.
+The proportion of female employees increased slightly year on
+year. At year-end 2023, women accounted for 32 percent of our
+workforce.
+2Due to the changes in segment reporting, the previous year's figures have been adjusted
+accordingly.
+students.
+32
+31
+32
+GRI 2-6, GRI 2-23, GRI 2-24, GRI 2-25, GRI 2-26, GRI 3-3,
+GRI 205, GRI 412
+38
+E.ON Group
+38
+Composition of the Supervisory Board
+The Human Rights Policy Statement commits E.ON to freedom,
+equality, and respect for all people without distinction. The aim is
+to provide a fair and mutually trustful working environment to all
+employees. E.ON therefore does not ask for or collect information
+about employees' ethnicity, marital status, and so forth. In fact, the
+100
+E.ON takes its responsibilities seriously and is therefore committed
+to doing business in a compliant way, respecting human rights,
+protecting the environment, and ensuring proper work conditions.
+E.ON expects that its suppliers are likewise committed to high ESG
+standards and has processes in place to ensure that they do.
+Engaging in dialogue with stakeholders and participating in
+industry initiatives help us to pay particular attention to human
+rights issues. For example, E.ON is a member of econsense, a
+network of Germany-based multinational companies dedicated to
+promoting sustainable business development and respect for
+human rights. E.ON also participates in a working group at the
+German Compliance Institute DICO focusing on the same
+objectives. E.ON has been participating in the German Energy
+Sector Dialogue since January 2023, a multi-stakeholder dialogue
+that brings together the signatory companies, associations, trade
+unions, civil society organizations, the German Institute for Human
+Rights, and the German Federal Ministry of Labor and Social
+Affairs (German abbreviation: BMAS). The aim is to pool expertise
+and resources and to focus on the German energy industry's
+human rights and environmental risks along its global supply and
+value chains in order to improve the human rights and
+environmental situation.
+Combined Group Management Report
+2022
+40
+2021
+Share of independent
+Energy Networks
+4.4
+4.9
+5.3
+Supervisory Board members
+100
+100
+Customer Solutions
+4.2
+4.3
+4.6
+¹Refers to shareholder representatives.
+E.ON's Approach
+risk countries or categories to greater scrutiny. In addition, E.ON
+aims to comply with the legal requirements for transparency along
+its supply chain, which in many countries are becoming
+increasingly more demanding, such as the Supply Chain Due
+Diligence Act in Germany ("Supply Chain Act").
+2Due to the changes in segment reporting, the previous year's figures have been adjusted
+accordingly.
+students.
+Human Rights and Supply Chain Management O
+¹Total workforce; includes board members, managing directors, apprentices, interns, and working
+At the end of 2023, 1,775 people with severe disabilities or
+equivalent were employed at E.ON companies in Germany (prior
+year: 1,782).◄
+5.3
+4.5
+E.ON Group
+6.4
+5.9
+5.6
+Corporate Functions/Other²
+5.0
+Corporate Functions/Other²
+→ About this Report
+→ Governance
+44
+E.ON's Approach
+E.ON is committed to combating corruption in all its
+manifestations and supports national and international efforts
+directed against it. The Company's participation in the United
+Nations Global Compact underscores its rejection of any form of
+corruption. The E.ON Management Board has the ultimate
+responsibility for ensuring that E.ON conducts its business legally,
+and at all times refrains from criminal practices in achieving its
+business objectives. To ensure this for all business units, E.ON has
+established a central compliance function. Its task is to support the
+E.ON Management Board in its responsibility to prevent, detect,
+and eliminate corporate crime.
+E.ON has in place a compliance management system ("CMS") to
+mitigate the risk of compliance violations. The CMS is based on a
+number of widely recognized practices, including measures to
+foster a compliance culture and a commitment to compliance
+targets (see "Goals and Performance Review"). It also enables us to
+identify and analyze compliance risks, design a risk-adequate
+compliance program, and expand our compliance organization.
+Guidelines and Policies
+Our Code of Conduct and our Supplier Code of Conduct (both of
+which are available in the languages of all countries in which we
+operate) focus on our guiding principle, "Doing the right thing."
+They provide easy-to-understand guidance for all areas that are
+relevant to E.ON. These include human rights, anticorruption, fair
+competition, and compliant relationships with business partners.
+The E.ON Code of Conduct also contains an integrity test that
+employees can use to check whether they are doing the right
+thing. All employees are obligated under their employment
+contract to act in accordance with the Code of Conduct's rules. In
+addition, ten People Guidelines, which apply to all business units,
+explain in detail how employees can be sure that they are doing
+things right. Our Code of Conduct is widely recognized by experts.
+The quarterly magazine of BCM, a professional association for
+compliance managers in Germany, last reviewed our Code of
+Conduct in 2021 and awarded it the highest mark among all DAX
+companies.
+E.ON therefore takes potential compliance violations very
+seriously. If they are substantiated, we systematically pursue and
+punish them. E.ON's approach to compliance and anticorruption is
+applicable for all business units and Corporate Functions and
+extends to suppliers as well. Information on compliance notices
+can be found in the "Progress and Measures" section below.
+An important People Guideline that supports the Code of Conduct
+addresses anticorruption. It contains a decision-making scheme
+that uses the familiar green, amber, and red of traffic lights to
+indicate when accepting or granting offers or gifts is permissible,
+potentially problematic, or forbidden. Gratuities (such as donations
+and sponsorships) above a certain threshold, which varies by
+national law, must be approved by the local Compliance Officer.
+E.ON's Compliance Function Policy defines basic compliance
+structures, roles, and responsibilities.
+In 2023 we began to reedit all compliance policies on the basis of
+legal design principles to make them more readable and
+comprehensible.
+Organization and Responsibilities
+E.ON refines and optimizes its CMS on an ongoing basis. Pursuant
+to the Compliance Function Policy, we have established a Group-
+wide organizational setup for this purpose. It consists of the Chief
+Compliance Officer ("CCO"), the Global Head of Compliance & Data
+Protection along with his Group Compliance team, and the
+business units' compliance officers. The CCO reports on a quarterly
+basis to the E.ON Management Board and to the Supervisory
+Board's Audit and Risk Committee on the CMS's effectiveness and
+current developments and incidents. In the event of serious
+incidents, the Management Board and the Audit and Risk
+Committee are informed without delay. Suspected fraudulent
+activities directed against the Company are investigated Group
+Audit. The central Group Compliance and Data Protection function
+is responsible for investigating fraud within the Company.
+Specific Actions
+In 2023 we continued to make eLearning courses available to all
+employees and managers Group-wide. They are offered by a variety
+of departments. The training plan's topics include compliance and
+anticorruption as well as other legal areas such as data protection,
+cybersecurity, and human rights. Since 2010 all employees have
+had to complete a Code of Conduct eLearning module on a regular
+basis. Employees in units without Internet access receive this
+training in written form and also at a face-to-face event.
+Particularly strict requirements apply to invitations and gifts from
+public, elected, or government officials and their representatives.
+The Code of Conduct clearly states E.ON's prohibition against
+Company donations to political parties, political candidates,
+political officeholders, or representatives of public agencies.
+74
+Negligence or deliberate violations could lead to fines and criminal
+prosecution for the employees in question and could harm E.ON's
+reputation. Corruption is unacceptable for another reason as well:
+it leads to decisions being made for the wrong reasons. It can thus
+impede progress and innovation, distort competition, and do
+lasting damage to E.ON and its stakeholders.
+GRI 2-23, GRI 2-26, GRI 3-3, GRI 205
+In 2023 there were no known security- and safety-related
+incidents that significantly affected the security and safety level at
+PEL's NPPs. They remained at the normal long-term security and
+safety level. On average, ten to 15 reportable events per year
+occur at PEL's NPPs. PEL headquarters conducts periodic reviews
+in which it discusses incidents and the findings derived from them
+with the NPPs that are in operation and those being dismantled. In
+line with Germany's nuclear ordinances and regulations, the
+incidents, findings, and any measures taken in response are
+communicated to state and federal authorities.
+PEL regularly conducts statutory nuclear emergency and crisis
+exercises, notifies Business Resilience Management at E.ON SE,
+and reports on its results.
+73
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Risks and Chances Report
+An important objective for E.ON is to prevent, detect, and respond
+appropriately to any form of corporate misconduct. Customers,
+business partners, or other stakeholders should not be deceived,
+lied to, or otherwise deliberately harmed. We are committed to
+ensuring that laws are strictly obeyed, and that integrity and
+compliance are systematically promoted as core components of
+our corporate culture. This is the only way for us to retain and
+deepen our stakeholders' trust for the long term.
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+→ Forecast Report
+= Contents Q Search ← Back
+Governance
+Compliance and Anticorruption
+→ About this Report
+Crisis Prevention at PreussenElektra
+PreussenElektra ("PEL") is only allowed to operate a nuclear power
+plant ("NPP") if it can demonstrate that it has taken all practicable
+steps to prevent a severe accident. PEL demonstrates its
+compliance on an ongoing basis to the relevant authorities, such as
+the Federal Ministry for the Environment, the Reactor Safety
+Commission, and state-level agencies.
+E.ON Integrated Annual Report 2023
+→ About this Report
+Combined Group Management Report
+→ About this Report
+→ Governance
+→ Corporate Profile → Climate Protection and Environmental Management
+→ Sustainable Finance → Business Report
+→ Internal Control System → Disclosures Regarding Takeovers
+E.ON Integrated Annual Report 2023
+→ Employees and Society
+= Contents Q Search ← Back
+2023
+2022
+18
+22
+222
+���Risks and Chances Report
+Combined Group Management Report
+75
+We continuously evaluate the CMS's effectiveness to ensure that
+E.ON is able to prevent, detect, and take appropriate remedial
+action against illegal or criminal conduct or other rules violations.
+The CMS's effectiveness is monitored by the E.ON Management
+Board, the Supervisory Board's Audit and Risk Committee, and also
+Group Audit. The latter, an independent entity, is the third line of
+defense of E.ON's CMS.
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+Risks and Chances Report
+= Contents Q Search ← Back
+Since 2021, new employees must complete a new joiner eLearning
+module along with the module on the E.ON Code of Conduct. It
+familiarizes them with Company rules and whom to contact if they
+have questions or feel uncertain about a decision. In addition, new
+managers receive integrity training that helps them fulfill their
+function as role models in E.ON's compliance culture.
+We distributed a specially produced postcard to E.ON leaders in
+2023 with the motto "What kind of a leader do you want to be?"
+The purpose was to motivate them to talk to their employees
+about misconduct and error culture in order to find out whether
+misconduct and errors are openly addressed in their teams or
+whether problems tend to go unaddressed.
+The CMS's effectiveness depends on how serious and credible our
+compliance efforts within the Company are. This is reflected by,
+for example, the resources we devote to compliance as well as the
+quality, control, and monitoring of our measures. Evaluating
+E.ON's compliance culture and the perception of its compliance is
+also relevant for the CMS's effectiveness. Special consideration is
+given to violations that lead to an internal audit. The audit
+determines whether a violation resulted from negligence or
+misconduct by an individual or individuals or from shortcomings in
+the CMS. We use the findings to implement measures to avoid
+similar incidents in future. The Management Board and the
+Supervisory Board's Audit and Risk Committee are convinced that
+E.ON also uses a variety of tools to identify the areas of activity
+where the risk for certain compliance breaches is particularly high.
+Such compliance risk assessments ("CRAS") are conducted on an
+ongoing basis. CRAS employ various methods, ranging from
+spreadsheet-style questionnaires to personal (and confidential, if
+applicable) discussions with executives and employees. Based on
+the findings, Group Compliance determines whether specific
+measures need to be taken to amend and refine the CRAs in order
+to appropriately address any (new) potential risks identified.
+E.ON wants to ensure that its compliance standards are adhered to
+in its supply chain as well. We therefore subject potential suppliers
+to a compliance check to assess whether they act in accordance
+with our values and principles. To ensure that they meet our
+compliance standards, we also conduct a prequalification process
+to verify potential suppliers' identity. This includes, for example,
+determining whether a supplier appears in the media in connection
+with compliance issues such as corruption or on an official
+sanction and terrorism lists. In some cases, potential suppliers
+must also complete a questionnaire, which E.ON evaluates
+carefully. Prequalification is mandatory for all new suppliers. The
+Human Rights and Supply Chain Management chapter provides
+more information on the supplier onboarding process.
+Our Know Your Counterparty ("KYC") principle also defines
+minimum requirements for certain business partners and
+scenarios, other than suppliers. The KYC check, which is part of
+the Group's large-scale digitalization strategy, is an IT-supported
+workflow that helps us verify counterparties' integrity and avoid
+legal, regulatory, and reputational risks related to compliance
+issues such as corruption, money-laundering, tax evasion, violation
+of economic sanctions, and terrorism financing. It is covered in our
+Know Your Counterparty People Guideline.
+E.ON is a member of a variety of compliance organizations. One
+example is the German Institute for Compliance (whose German
+acronym is DICO), where E.ON also serves as Chairman of DICO's
+Criminal Law Working Group and participates in the Internal
+Investigations and Whistleblower Systems working group. DICO's
+mission is to promote the role of compliance and the
+establishment of recognized compliance standards in corporate
+governance in Germany. The institute also serves as a networking
+platform for compliance experts in and outside Germany.
+The Group Compliance and Data Protection department at E.ON
+SE conducted an interdisciplinary research project with the Max
+Weber Institute for Sociology at Heidelberg University, the Max
+Planck Institute for Human Development in Berlin, and its spinoff,
+Simply Rational GmbH. The project involved conducting surveys,
+training sessions, and intervention studies at E.ON companies in
+Germany to look into how altered situation assessments
+(interventions) can influence the acceptance and efficiency of
+preventive compliance measures and how their effectiveness and
+longevity can be measured. One finding was that the traditional
+medium of compliance knowledge transfer, training, has a
+measurable and lasting impact on participants' compliance
+awareness. Innovative, interactive teaching methods also create an
+awareness of the positive effects of structural measures like
+diversity promotion and job rotation among managers. The
+findings were presented to the E.ON Management Board, the
+Supervisory Board's Audit and Risk Committee, and the Group-
+wide compliance community in early 2024. The latter will take the
+insights into account when designing future compliance training
+and communications measures and actively put them into practice.
+Goals and Performance Review
+In addition, Group Compliance continually engages in dialogue
+with the compliance officers appointed by local units'
+management and monitors their work. If employees suspect
+misconduct or a violation of laws or Company policies, they are
+instructed to report it. For this purpose, they may use-if they
+prefer, anonymously-internal reporting channels or an IT-based
+Whistleblower system. The system meets the requirements of
+Germany's Whistleblower Protection Act. It is available Group-
+wide and can be accessed via the E.ON home page or by telephone.
+Not only E.ON employees, but also business partners, their
+employees, and other third parties can contact the hotline
+confidentially. Group Compliance forwards the information to the
+relevant department or unit.
+One focus in the 2023 reporting year was to achieve a high
+awareness of business resilience issues in the organization and
+enhance collaboration and information sharing in the Business
+Resilience Community. Cross-departmental involvement and
+engagement with business resilience raised the visibility and also
+helped sharpen the profile of the Business Resilience function.
+E.ON's objective for physical security is to protect its employees,
+property, and assets. For this purpose, the current security
+situation and threats are continuously analyzed and incorporated
+into physical security plans and solutions.
+With the help of Group-wide services, E.ON aims to minimize the
+risk for employees when travelling and at any place at work. This
+includes the use of widely accepted digital solutions.
+71
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ About this Report
+E.ON takes a variety of steps to address health and safety issues
+across the entire life cycle of its products. During product
+development, E.ON closely observes current standards and
+guidelines and monitors emerging issues. The regional units test all
+market-ready products, including eMobility solutions, for
+CE/UKCA conformity in their own test labs or have them tested in
+E.ON's test lab in Essen or by outside testing firms. Products that
+are CE-compliant meet EU-wide requirements for safety, health,
+and environmental protection, while UKCA-compliant products
+meet the British market's compliance requirements. This provides
+E.ON with a comprehensive assessment of risks, their likelihood,
+and other potential implications. Contractors who install and
+maintain products on E.ON's behalf must undergo prequalification
+prior to hiring to ensure that they meet specific standards and
+values. In addition, E.ON engages in ongoing dialogue with its
+contractors and trains them to ensure that they adhere to all
+requirements and the latest technical standards. Safety training,
+for example, is mandatory for all installers of solar and battery
+solutions in Germany. If a product has a safety-related issue, E.ON
+needs to be able to recall it immediately. E.ON therefore checks
+and tracks all hardware product changes so that it can contact
+customers immediately in the event of safety-related issue. We
+work to continually improve these processes.
+→Internal Control System
+→ Forecast Report
+→Risks and Chances Report
+= Contents Q Search ← Back
+Whenever E.ON is the product manufacturer or deemed to be
+such, the Company is legally obliged to comply with a number of
+requirements. These include establishing a system to ensure
+product traceability and putting in place a plan for corrective
+measures. Other requirements include product certification,
+CE/UKCA labeling, the issuance of E.ON's own EU/UKCA
+Declaration of Conformity, and the creation and maintenance of a
+product's full technical documentation. In the event of safety-
+related issues, E.ON immediately informs the appropriate market
+surveillance agency about the issue and the intended corrective
+measures, such as withdrawal, warning, and recall. E.ON is also
+obligated to take necessary corrective actions.
+Goals and Performance Review
+The recurring PDCA cycle results in the DPMS's processes being
+continually planned, implemented, managed, and improved. This
+enables E.ON to permanently monitor the DPMS's effectiveness,
+proactively and repeatedly look for potential blind spots, and take
+action if the need for improvement arises. E.ON units report on the
+status quo of their compliance with the GDPR on a quarterly basis.
+The review also includes regular assessments by Group Audit. The
+units implement Group Audit's recommendations in a timely
+manner. Where it was possible to conclude ongoing proceedings
+with data protection agencies, this was done without sanctions.
+The existing DPMS is therefore effective and robust.
+→ Disclosures Regarding Takeovers
+E.ON assesses the maturity of its ISMS domains regularly and
+reports the findings to the Cyber Security and Data Protection
+Council on a quarterly basis. E.ON defined a minimum maturity
+level for all areas and units. If deficiencies or improvement
+potential are identified, E.ON adjusts its cybersecurity roadmaps
+accordingly.
+E.ON uses training, phishing simulations, and in-house workshops
+such as live hacking demonstrations to familiarize its employees
+with cybersecurity risks and their obligation to keep confidential
+company information secure. To enable its employees to handle
+information properly, E.ON uses a classification tool, including
+electronic document labelling, which was introduced in 2022.
+E.ON conducts an ongoing phishing awareness campaign that
+involves simulated phishing emails sent to employees several
+times a month. In addition, E.ON periodically performs
+penetration-testing for crucial services in order to further harden
+key services against cyberattacks.
+All new E.ON Group employees receive data protection training
+during their first year as part of their onboarding process. In
+addition, E.ON conducts specific training for entities and
+departments-such as call centers and sales organizations-that
+process personal data on a bigger scale. Employees use an
+eLearning module to familiarize themselves with the GDPR's rules
+44
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+→ Forecast Report → Risks and Chances Report
+→Internal Control System
+→ Disclosures Regarding Takeovers
+= Contents Q Search ← Back
+E.ON employees to design and operate new solutions with the
+required level of cybersecurity and to protect technology, data as
+well as customers, critical infrastructure, and society from
+negative consequences. E.ON's People Guideline "Cybersecurity"
+summarizes the most important cybersecurity rules relevant for all
+employees.
+annually. By the end of 2023, 82 percent of employees completed
+the module.
+Organization and Responsibilities
+The units are responsible for responding to all requests from data
+subjects, such as access to information on data processing,
+rectification, deletion, and data portability. The units' systems and
+policies must also comply with their national data protection
+regulations and those of any other countries where they operate.
+Where required by law, the units have appointed Data Protection
+Officers ("DPOS"). The units' DPOs work closely together and
+report regularly to the Group DPO, in particular on information
+relating to legal and regulatory developments and fines, the
+protection of data subjects' rights, relations to third parties,
+fulfilment of documentation duties, and correspondence with
+supervisory authorities.
+E.ON's Group DPO is responsible for higher-level data protection
+issues at the Group level. In addition, the units' DPOs and
+employees are informed on a regular basis about relevant
+developments relating to data protection by means of periodic
+information-sharing meetings between the Group DPO and the
+units' DPOs. This and other information is disseminated by email
+and through internal communications channels, such as the
+corporate intranet. Furthermore, the Group DPO reports
+periodically to the Cybersecurity and Data Protection Council,
+which also includes Management Board members, and to the
+Supervisory Board's Audit and Risk Committee.
+The Cybersecurity function prevents the danger that technology
+and information from having an adverse impact on E.ON's
+business and customers. Its tasks include designing a Group-wide
+cybersecurity strategy, monitoring its implementation, and
+coordinating the cybersecurity organization across E.ON. E.ON's
+Chief Information Security Officer ("CISO") oversees the Group-
+wide cybersecurity organization and assigned to the Management
+Board's digital remit. His responsibilities include formulating
+E.ON's cybersecurity strategy and monitoring its implementation.
+The Group-wide cybersecurity organization includes Information
+Security Officers ("ISOs") appointed by the business units. They
+report to the CISO as well as to their unit's board on all relevant
+matters arising in their organizations. The CISO reports on a
+regular basis-as well as ad hoc in the event of serious security
+incidents-to the E.ON SE Management Board and the Supervisory
+Board. These vertical and horizontal reporting pathways ensure
+transparent and consistent reporting.
+E.ON's regional units know their customers, their products, and
+the local market conditions and requirements. Consequently, their
+Product Development teams take the lead in product safety,
+supported by their unit's Health, Safety, and Environment ("HSE")
+department. They also work closely with several divisions and
+departments at Corporate Functions, primarily B2C/B2SME
+Solution Management, Innovation, HSE, and Sustainability. In
+addition, B2C has its own product safety and compliance team.
+Specific Actions
+Each unit in the Group is responsible for complying with data
+protection regulations, above all the GDPR, and implementing the
+DPMS. E.ON has established processes across the Group to
+comply with data protection requirements, for example to respond
+to data subject inquiries and report data protection breaches. This
+set of processes also provides guidance when individual units
+implement the necessary processes.
+Product safety incidents are documented at the unit whose
+product was involved and at the Group level. The investigation and
+analysis of such incidents help us identify their causes and
+determine how to prevent them in future. E.ON shares the insights
+gained in this process with all relevant departments.
+Business Resilience Management X
+GRI 3-3
+Specific Actions
+To be able to respond quickly and adequately to crisis situations at
+all times, E.ON designs and conducts several realistic crisis
+simulations and training sessions each year. In 2023 E.ON
+conducted two Group-wide crisis simulations in national and
+international environments, several local crisis exercises at
+business units, and ongoing training and continuing education for
+designated crisis management teams. All members of these teams
+are required to participate in regular exercises and training
+sessions. In addition, all members of the crisis management team
+receive a one-time onboarding training session for their respective
+functions as well as additional training if required. Among other
+things, crisis team leaders are trained to lead a team in complex,
+stressful, time-critical, and uncertain situations.
+In addition to crisis management activities, the Business Resilience
+function conducts other measures to enable E.ON to achieve
+lasting operational resilience. The main activities in 2023 were to:
+• enhance governance by updating the minimum requirements for
+business resilience
+• harmonize Business Continuity activities
+• strengthen our security culture by conducting an awareness
+campaign that featured an eLearning module
+comprehensive crisis management organization. It is divided into
+the respective operational business/regional or country level and
+at the Group level. The Security Response Center is the central
+reporting point for dealing with crises.
+.
+Goals and Performance Review
+E.ON relies on valuable security expertise and has effective
+services and networks to ensure that its operating business can be
+continuously maintained. This enables the Company to continually
+increase its own operational resilience. E.ON has set the following
+objectives for this
+purpose:
+Proactive crisis management enables E.ON to identify crises at an
+early stage and respond to them rapidly and effectively and
+ensures the necessary Group-wide crisis management capabilities.
+Another aim is to carry out regular checks to make sure that the
+necessary infrastructure for crisis teams is in place and
+operational. The Company also assesses, documents, and uses
+findings from all crisis management exercises, training sessions,
+and actual incidents to design and implement improvement
+measures.
+Business continuity management is designed to ensure that E.ON
+can deal with emergencies and continue operating critical activities
+in the event of a disruption. For this purpose, a business impact
+analysis must identify and examine all critical processes at least
+once a year. Its findings are used to design, update, and test
+business continuity plans and solutions.
+deploy and introduce central digital tools in line with the Group's
+digitalization strategy
+= Contents Q Search ← Back
+→ Disclosures Regarding Takeovers
+→Internal Control System
+The health, safety, and security of employees and customers,
+environmental protection, and the reliability of the energy supply
+are particularly important to E.ON. We work continually to ensure
+the safety, security, and reliability of our infrastructure and
+customer solutions and to become even more resilient to
+operational interruptions and disruptions. If a crisis occurs despite
+comprehensive precautions, E.ON responds swiftly and handles
+the situation professionally.
+The impact of the war in Ukraine in particular continued to present
+a challenge in 2023. As in the prior year, we faced, among other
+things, a potential energy shortage and an overall increased threat
+to energy infrastructure.
+E.ON's Approach
+E.ON has a comprehensive framework in place consisting of
+various minimum requirements for the purpose of conducting
+business resilience management. It addresses physical security
+issues and includes specifications for implementing crisis and
+business continuity management. Nevertheless, the Company
+cannot rule out the possibility of crises caused by, for example, a
+natural disaster, human or technical failure, a cyberattack, or
+another security-related incident, or a corresponding event. That is
+why integrated business continuity management encompasses,
+for example, elaborate contingency plans. They specify both
+organizational and operational measures to enable a fast, efficient,
+and predefined response and the continued operation of critical
+activities. In the event of a crisis, E.ON has a Group-wide crisis
+organization with several highly specialized crisis management
+teams that are organized locally and centrally; they conduct
+exercises on a regular basis in order to be able to respond quickly
+to critical events. E.ON prepares thoroughly to respond to such
+exceptional situations in the best possible way and prevent
+escalation and acts quickly and purposefully at the first signs. The
+main objective of crisis prevention and management measures is
+to protect human life, the environment, the business, and property.
+This approach has proven its worth in past crises.
+Guidelines and Policies
+E.ON's Business Resilience function policy defines responsibilities
+and roles as well as organizational requirements and provides
+recommendations on how the business units can establish,
+operate, and continually refine an effective business resilience
+management system. The E.ON SE Management Board is
+responsible for approving the function policy. The policy's theme
+encompasses the following overarching areas of operational
+resilience: physical security, business continuity management,
+emergency and crisis management, and travel security. In addition,
+the policy requires the units to report critical incidents, serious
+security incidents, and incidents with crisis potential to the
+Security Response Center, which is operational at all times. These
+requirements make it possible to manage, as soon as possible,
+unpredictable and complex situations that could have a significant
+impact on E.ON's business, assets, stakeholders, and/or
+reputation. If necessary, the central Business Resilience function
+supports the business units in establishing the mechanisms and
+meeting the minimum requirements. An overarching Business
+Resilience Community provides additional support and information
+sharing. More information on the Business Resilience Community
+can be found below under "Specific Actions."
+Organization and Responsibilities
+Ultimate responsibility for preventing and managing crises lies
+with the E.ON Management Board. Strategic implementation of
+physical security topics for the Group as well as operational
+implementation for E.ON SE are carried out by the Business
+Resilience function, which is part of the Legal, Compliance, and
+Security department. With the exception of travel security,
+operational implementation at the business units is conducted by
+their respective business resilience organizations, which are
+responsible for meeting Group-wide minimum standards for
+business resilience. Alongside this regular organization, E.ON has a
+72
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report → Risks and Chances Report
+→ Governance → Sustainable Finance → Business Report
+→ About this Report
+2021
+30
+→ Forecast Report
+The CMS at E.ON is structured and follows a uniform roadmap
+with defined steps for refining our business units' compliance
+measures. All Compliance Officers must present the status of their
+unit's compliance roadmap regularly to their board and to Group
+Compliance. The implementation of the compliance roadmap in
+2023 proceeded as planned.
+→Internal Control System
+→ Disclosures Regarding Takeovers
+Risks and Chances Report
+= Contents Q Search ← Back
+sponsor for a Company network; the financial support comes from
+E.ON. They currently sponsor the following networks:
+•
+→ About this Report
+adaptABILITY, an initiative for disability and mental health.
+Sponsor: Chief Executive Officer ("CEO")
+• Women@E.ON, an alliance of and for women, which won the
+2020 CEO Award for D&I as best network group. Sponsor: Chief
+Operating Officer-Networks ("COO-N").
+In 2023 the CEO Award for Diversity and Inclusion was conferred
+for the fifth time; the motto was "making diversity and inclusion a
+priority at all levels." The awards pay tribute to individuals
+(category: Leader in Role Modeling DEI) and initiatives (category:
+"Innovation") at E.ON that strive to make a difference in diversity
+and inclusion. In 2023 the winners of the CEO Award for Diversity
+and Inclusion were chosen in a Group-wide vote. Oliver Henricks
+was honored in the Leader category. As a member of the
+Westenergie AG Management Board, he has proven to be an
+active supporter of the E.ON LGBT+ and Friends Network for
+Essen/Ruhr. He is also personally committed to the interests of
+employees with disabilities of all kinds. The CEO Award for
+Diversity and Inclusion in the Innovation category went to the
+enviaM Diversity Circle, an ongoing group that periodically holds
+(information) events. Its members are employees of different
+generations who, alongside their regular duties, are devoted to
+diversity and inclusion.
+In 2023 E.ON and six other companies participated in the pilot
+phase of the Diversity Compass, which was initiated by the
+Stifterverband and the Charta der Vielfalt (Diversity Charter). The
+pilot's aim is to design structures, tools, and measures to include
+diverse groups of people in everyday working life to consider them
+in all Company areas and processes, and to firmly engrain
+diversity, equity, and inclusion ("DE&I") in corporate culture. The
+project was supported by an outside process consultant. The
+Diversity Compass runs for about 15 to 18 months and will be
+completed in the second quarter of 2024.
+In August 2023 E.ON was officially represented for the first time
+at the 20th Christopher Street Day in Essen, known as "Ruhr
+Pride." On this day, about 40 E.ON employees demonstrated our
+support for openness, diversity, and acceptance. Participation in
+Ruhr Pride was initiated by the LGBT+ & Friends corporate
+network.
+The CEO Listening Tour, which was developed in 2021, continued
+in 2023 as well. This format is less about talking to employees and
+more about listening to them. The focus is on the work
+environment at E.ON, discrimination in the workplace, corporate
+networks, and many other topics. In 2023 the focus was on
+relocation within the E.ON Group and barrier-free, IT-supported
+work. The tour will continue in 2024.
+• LGBT+ & Friends, the second-placed diversity initiative at the
+2021 CEO Award for D&I. Sponsor: Chief Financial Officer
+("CFO")
+We ran an in-house campaign on microaggression to mark
+International Day for Tolerance on November 16. It presented
+situations covering the various dimensions of diversity in a
+communicative manner and explained in detail the extent to which
+they can be considered microaggressions.
+→ Governance → Sustainable Finance → Business Report
+Combined Group Management Report
+personalities results in good ideas. We want to become a diversity
+pacesetter, yet are aware that changing a corporate culture takes
+time. We are therefore tackling the issue step by step and would
+like to implement the necessary measures with conviction.
+E.ON's Approach
+Diversity is one of the dimensions of E.ON's sustainability strategy
+and an essential aspect of our vision and values. We want to
+ensure equal opportunity for all our employees. Diversity is a
+prerequisite for creativity and innovation, and we therefore aim to
+take a targeted approach to promoting it. E.ON signed the German
+Diversity Charter in 2008, publicly affirming its long-standing
+commitment to a tolerant and inclusive corporate culture. The
+Company has been an active member since 2020. In 2023 we
+again participated in initiatives organized by the charter, such as
+those in conjunction with German Diversity Day. Our motto for the
+day was "corporate networks." Our Company intranet posted a list
+of diversity and inclusion networks for employees. We also
+published information and instructions on what a network is and
+how to set up one.
+Guidelines and Policies
+The E.ON Management Board and SE Works Council signed the
+Diversity and Inclusion Declaration in 2016. It pledges their
+commitment to creating a diverse and inclusive work environment
+that empowers all employees to realize their individual potential.
+Likewise in 2016, the Company, the SE Works Council, and the
+Group representation for severely disabled persons signed the
+Shared Understanding of Implementing Inclusion at E.ON, creating
+an important foundation for integrating people with disabilities
+into the Company.
+Organization and Responsibilities
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+E.ON views diversity as crucial for a successful work environment.
+The challenges vary by country. E.ON's approach to HR is mostly
+decentralized; each of our units therefore addresses diversity in its
+particular cultural context. This gives them the opportunity to
+meet challenges purposefully and to develop programs that reflect
+Specific Actions
+E.ON promotes diversity and equal opportunity through a variety
+of programs and networks, such as a mentoring program in
+Germany to prepare female employees for management positions.
+The Women@E.ON network aims to increase the visibility and
+influence of women at E.ON. In addition, the LGBT+ & Friends
+network promotes equality, diversity, and an inclusive work
+environment. Also, E.ON is a member in various initiatives, such as
+the Initiative Women into Leadership ("IWIL") and the European
+Round Table ("ERT").
+In March 2021 the E.ON Management Board adopted measures to
+achieve more diversity and inclusion in the near term at E.ON in
+Germany. It also recommended that the measures be
+implemented, to the degree feasible, at E.ON units in other
+countries as well. One example is the promotion of co-leadership,
+in which two part-time executives share a leadership position,
+giving them greater flexibility in balancing their professional and
+private lives. Another flexible option is a part-time leadership
+position, in which an executive works at least 80 percent, with full
+time as an option. In addition, recruitment policies for
+management positions were adjusted so that at least one
+candidate on the shortlist is from the underrepresented gender.
+Other measures include diversity training for executives.
+Workshops on using inclusive language in job advertisements will
+also be conducted.
+The E.ON Management Board continued its support for diversity
+networks in 2023. Management Board members serve as a
+78
+E.ON Integrated Annual Report 2023
+the country or regions in which they operate. Diversity is managed
+by Group HR/Executive HR together with a network of HR
+professionals that meets face-to-face or virtually on a regular
+basis. Supported by Group HR/Executive HR, the E.ON
+Management Board is responsible for setting diversity targets for
+E.ON as a whole and its units. Some targets may reflect the laws
+of a particular country.
+Goals and Performance Review
+E.ON SE and E.ON companies in Germany must comply with the
+German Law for the Equal Participation of Women and Men in
+Leadership Positions in the Private Sector and the Public Sector,
+which took effect on May 1, 2015. In February 2022 the E.ON
+Management Board set new target quotas for E.ON SE for the new
+implementation period beginning on July 1, 2022. The target
+quotas are 36 percent for the proportion of women occupying
+both the first and the second levels of management below the
+Management Board. The targets are to be met by June 30,
+2027.The proportion of women occupying the first level of
+management below the Management Board was 23 percent at the
+end of the 2023 financial year, that of the second of management
+below the Management Board was 29 percent.
+Progress and Measures
+GRI 405-1
+Women's Quota by Segment¹
+Percentages
+2023
+2022
+= Contents Q Search ← Back
+2021
+23
+23
+23
+Customer Solutions
+44
+the CMS was again effective in 2023. Their assessment was based
+in part on audits as well as surveys of employees and
+stakeholders.
+Energy Networks
+Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+The E.ON SE Management Board has recommended to those E.ON
+Group companies that are legally obligated to set targets for the
+proportion of women on their supervisory board, management
+board, and the next two levels of management that they select
+ambitious targets that likewise should be met by June 30, 2027.
+In addition, it was recommended that other relevant E.ON Group
+companies set appropriate quota targets even if they are not
+legally obligated to do so. The companies of the E.ON Group have
+heeded this recommendation. In addition, in 2021 E.ON set a
+voluntary Company-wide target that goes beyond statutory
+requirements. The target is to increase the proportion of women in
+management positions in all business units in all countries to at
+least 32 percent by year-end 2031. This figure corresponds to the
+proportion of women in E.ON's workforce at year-end 2021.
+Group HR monitors progress toward the target once a year and
+reports the findings to the E.ON Management Board. E.ON
+discloses the respective figures at year-end for the E.ON Group as
+a whole.
+Share of Female Executives¹
+Percentages
+E.ON Group
+1Against the total number of managers.
+2023
+24
+2022
+23
+2021
+21
+79
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+→ About this Report
+→Internal Control System
+Society is diverse. So is our workforce. At E.ON, people work
+together who are likewise diverse in many ways, including
+nationality, generation, gender, culture, religion, physical and
+mental abilities, sexual orientation and identity, as well as ethnic
+and social background. E.ON encourages and benefits from this
+diversity and creates an inclusive environment, because the
+interaction of people with different backgrounds, abilities, and
+GRI 3-3, GRI 405
+E.ON aims to provide equal pay to women and men for comparable
+jobs at all Group companies. Due to its decentralized management
+approach, E.ON does not collect data at the Group level or assess
+the pay gap (with the exception of the United Kingdom due to its
+legal requirements).
+Even before the current developments, E.ON had set a target of
+making the operation of its own buildings climate-neutral by
+2030. The E.ON SE Management Board reaffirmed this target by
+reiterating its support for the CEO Alliance's Sustainable Corporate
+Building Climate Pledge. The CEO Alliance is an international,
+cross-sector coalition of the CEOs of 13 major European
+companies; its targeted projects are intended to help shape a more
+sustainable and resilient Europe. The aim of their Building Pledge is
+to make the operation of their corporate buildings climate-neutral
+by 2030 and to encourage other companies to join in.
+Total
+292
+137
+160
+40
+16
+66
+48
+Fines for Non-compliance
+E.ON paid a total of about €911,000 in fines for non-compliance
+with laws in 2023.
+Energy Affordability
+GRI 3-3
+Since the war in Ukraine began, energy has increasingly played a
+role in geopolitics. This presents E.ON with more challenges
+alongside those posed by the energy transition. One thing is
+certain: the energy supply must remain reliable, secure, and
+affordable for industry and consumers. E.ON's long-standing
+approach is for its business to meet societal expectations
+regarding energy by pursuing three objectives simultaneously:
+climate protection, security of supply, and affordability. The
+public's interest, however, is shifting noticeably toward
+affordability. E.ON therefore advocates swift and decisive action
+by policymakers and the energy industry to ensure that energy
+remains available and affordable for all.
+In 2023 the number of compliance notices increased from 137 to
+292. E.ON divides compliance notices into four categories:
+business integrity concerns, fraud against the Company concerns,
+HR-related concerns, and other concerns related to the Code of
+Conduct. The resulting investigations found that none of the
+incidents reported were serious.
+E.ON's Approach
+41
+Any other Code of Conduct-
+related topics
+Progress and Measures ☑
+Number of Compliance Notices
+As every year, in 2023 we asked employees who had contacted
+Group Compliance regarding Code of Conduct violations for
+feedback about their experiences. We used it to assess Group
+Compliance and Data Protection's readiness to address such
+violations or behaviors and to determine whether the information
+in our Group-wide People Guidelines is appropriate. The findings
+indicated that most respondents trust E.ON's compliance
+professionals and feel protected when reporting unethical
+behavior.
+Diversity and Inclusion
+Business integrity concerns,
+such as potential illegal
+activity, violation of law and
+policy, corruption, antitrust,
+business partner
+compliance, and/or insider
+trading in E.ON shares
+Fraud against the Company
+concerns, such as theft,
+embezzlement, and
+occupational fraud
+129
+19
+HR-related concerns, such
+as conflict of interest,
+mobbing, sexual
+harassment, discrimination,
+unfair employment
+practices, and so forth
+126
+17
+To ensure fair prices for our customers and to be able to plan long
+term, we generally procure energy in advance. However, we cannot
+permanently insulate ourselves from market developments and
+must factor in all cost components into our pricing-both when
+these components fall and rise. Procurement prices on energy
+markets increased significantly in 2022. In comparison, markets
+eased considerably in 2023, but they still remain above the prewar
+level. This is now affecting our customers as well, who in some
+cases had to accept additional expenditures. E.ON therefore
+lowered its power and gas prices for a portion of customers in 2023
+to the degree that and as soon as market conditions allowed.
+57
+The dramatic developments necessitated rapid action by
+policymakers, above all to ensure secure and affordable supplies
+for industry and consumers. Taxes, levies, and surcharges still
+account for a large portion of energy costs. A reduction in energy
+taxes and levies remains sensible. Consumers in Germany should
+Our customers in Germany can turn to the payment assistance
+team. It supports customers facing financial difficulties by working
+with them to find a suitable installment payment plan. One
+solution, for example, would provide installment payments
+without interest or fees.
+The primary objective in the winter of 2022/2023 was to reduce
+electricity and gas consumption. E.ON's goal was therefore to
+reduce the energy consumption of its own buildings by 20 percent
+compared with a similar period in the previous year. Our sales
+companies in Germany achieved this by reducing their
+consumption in 2022 by about 23 percent relative to the prior
+year. Across all its facilities in Germany, E.ON limited the
+illumination of all non-essential light sources, such as logos and
+outdoor lighting, or to switch them off entirely. Room
+temperatures were reduced, and hot water was switched off
+where possible. A particularly effective measure was to shut down
+entire sections of a building and only heat them to a temperature
+at which the building and its infrastructure are not damaged, as
+was done at our main office buildings in Essen and Munich.
+This team also helps customers in financial emergencies. Its
+services include arranging contact with job centers, telephone debt
+counseling, and third-party debtor portals. We also explain to
+them how they can conserve energy effectively, what options are
+available for adjusting their payments, and how they can avoid
+high additional payments in the next annual bill. If customers
+encounter payment difficulties, we have always tried to work with
+them to find a mutually acceptable solution. Disconnection should
+always be the last resort. There is usually a lengthy process before
+a disconnection is announced or actually takes place. We dialogue
+extensively with customers who could potentially face a
+disconnection to prevent it from happening.
+Support for vulnerable customers is based on their individual
+needs, the market situation, and the government programs
+available in different countries. This support is therefore the
+responsibility of the regional units. For example, their advisors help
+customers with payment difficulties find out whether they qualify
+for government support programs. They also check what
+opportunities are available from other organizations, such as
+obtaining prefinancing for insulation for a customer's home.
+We think individually tailored advice is important: individual
+solutions are often more effective than a blanket incentive, such as
+a lump sum payment for everyone. Some people may be less
+interested in a cash benefit than others; instead, they are more
+likely interested in switching to renewables in the near future. For
+them and us, there are always good reasons to consider climate
+protection when making energy decisions: the transition to a
+climate-neutral energy supply independent of fossil fuels is
+essential. That is why our own short-term conservation measures
+are accompanied by efforts to use energy and heat at our facilities
+as efficiently as possible and to deploy smart technologies to
+progressively optimize energy consumption. We are also gradually
+converting our buildings to green electricity and heat and,
+wherever possible, installing solar panels to power them. In
+addition, we are optimizing building controls, exterior lighting, and
+heat systems, and using the flexible options of our hybrid working
+arrangements to reduce energy consumption. In general, we factor
+in the characteristics of our various facilities into our conservation
+measures and work to ensure that we systematically comply with
+all applicable occupational health and safety rules.
+77
+Goals and Performance Review
+Combined Group Management Report
+→ About this Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+→ Governance → Sustainable Finance → Business Report
+→Internal Control System → Disclosures Regarding Takeovers
+Risks and Chances Report
+E.ON believes that it would be sensible to find a (social) policy
+solution or at least to initiate measures to support businesses and
+consumers in crisis situations in which the market is clearly out of
+balance. During the legislative process, E.ON called for the
+mechanisms to compensate gas and power suppliers to be as
+consistent, pragmatic, and legally secure as possible. In particular,
+liquidity risks and a high administrative workload should be
+avoided.
+= Contents Q Search ← Back
+We want to provide our customers with effective and reliable
+assistance in dealing with their challenges. Our German sales units
+offer individual advice through a variety of channels (telephone,
+online, mail) and stay in touch with our customers. The energy-
+saving advice and tips we offer on our website and other channels
+are important as well.
+Specific Actions
+E.ON Integrated Annual Report 2023
+regional units to deal with the energy crisis. These task forces
+coordinate with each other on a regular basis regarding current
+developments and initiatives at the units.
+76
+E.ON Integrated Annual Report 2023
+In addition, initiatives are in place to share best practices and thus
+help the E.ON Group address the high prices faced by end-
+customers. The regional units can implement the initiatives in a
+way that is tailored to their needs. The focus is on energy
+conservation, support for vulnerable customer groups,
+communications (with customers, employees, and the media), and
+the lobbying of policymakers. E.ON has already introduced several
+of the project's initiatives to support customers. For example, we
+have expanded the range of installment payment plans and cash
+payment vouchers. The latter option enables customers to pay in
+cash by means of QR code at places like supermarkets and gas
+stations. This makes it particularly easy for them to settle
+outstanding amounts.
+Combined Group Management Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+Risks and Chances Report
+→ About this Report
+→Internal Control System
+→ Governance → Sustainable Finance → Business Report
+= Contents Q Search ← Back
+therefore receive further relief by the electricity tax being reduced
+to the EU minimum rate and the VAT on electricity to 7 percent.
+E.ON has long advocated both.
+Ideally, these options should be exhausted before market
+interventions to regulate prices are considered. It is important,
+however, to address the causes of market uncertainties. In the
+case of natural gas, a reduction in supply has been the primary
+factor since the beginning of the war in Ukraine. Policymakers in
+Germany are responding to this situation by creating additional gas
+supply capacity, in particular by importing liquefied natural gas
+("LNG"), and by offering commercial and residential consumers
+(and gas-fired power plants) incentives to conserve energy. In the
+medium term, this can be remedied by more rapid renewables
+growth; in the short term, energy conservation is imperative.
+E.ON supports the measures enacted by German policymakers to
+reduce energy costs and has implemented them accordingly. For
+example, we endeavor that the government support payments
+foreseen in relief packages reach customers quickly. This included
+the German federal government's payment of heating bills for
+December 2022 as well as to the gas and electricity price caps,
+which took effect on March 1, 2023, retroactively for the period
+beginning January 1, 2023, and which E.ON fully implemented.
+Governments are enacting consumer assistance programs in other
+countries where E.ON operates. The Netherlands, for example,
+introduced a price cap for electricity and gas in January 2023,
+while variable standard tariffs were capped in the United Kingdom
+by the so-called Energy Price Guarantee. In these and other E.ON
+regions, we focus on designing customer-specific solutions and
+communicating openly so that our customers can identify what
+makes the most sense for them. In addition, we have taken steps
+for E.ON itself to conserve energy. "Specific Actions" below
+contains more information.
+Organization and Responsibilities
+E.ON responded quickly to the altered situation and established a
+variety of task forces at Corporate Functions and at some of its
+→ Disclosures Regarding Takeovers
+• Agriculture pursuant to IAS 41.50 (b) and (e)
+Investments were calculated on a gross basis; that is, without
+taking into account revaluations or depreciation and amortization
+or impairment charges. They consist of investments in non-current
+tangible and intangible assets (fixed assets), including assets
+acquired in asset deals (recorded directly) and share deals
+(investment amount determined by the purchase-price allocation).
+More specifically:
+• Investment property pursuant to IAS 40.76 (a) and (b), IAS
+40.79 (d) (i) and (ii)
+• Intangible assets pursuant to IAS 38.118 (e) (i)
+(!!!)
+Property, plant, and equipment pursuant to IAS 16.73 (e) (i) and
+•
+Investments
+E.ON's reporting applies the indicators defined in Article 8 of the
+Taxonomy Regulation: taxonomy-eligible and taxonomy-aligned
+investments, revenues, and operating expenses. All business
+operations identified at E.ON are assigned to precisely one of the
+3. Taxonomy-aligned activities as a ratio of taxonomy-eligible
+2. Taxonomy-aligned activities as a ratio of the total amount
+shown in the E.ON Group's Consolidated Financial Statements
+prepared according to IFRS
+1. Taxonomy-eligible activities as a ratio of the total amount
+shown in the E.ON Group's Consolidated Financial Statements
+prepared according to IFRS
+E.ON reports the following three indicators for investments,
+revenues, and operating expenses:
+EU taxonomy's economic activities in order to prevent double
+counting.
+EU Taxonomy Key Figures
+Conducting a periodic risk assessment serves to indicate potential
+threats. E.ON promotes compliance with its standards and
+minimize potential threats by means of numerous measures and
+processes. The principle focus of these activities at E.ON's own
+business is on occupational safety and fair work conditions.
+Additional information about the assurance of a responsible supply
+chain, compliance and anti-corruption, and tax is contained in the
+chapters on these topics.
+E.ON is committed to respecting human rights in all business
+processes. To prevent human rights violations, E.ON adheres to
+external standards and defines its own principles and policies.
+E.ON's Human Rights Policy Statement explicitly acknowledges
+the United Nations' International Bill of Human Rights and the
+International Labour Organization's Declaration on Fundamental
+Principles and Rights at Work and the latter's fundamental
+conventions. The statement also makes reference to E.ON's own
+policies, such as the Supplier Code of Conduct and the Code of
+Conduct for employees. The standards for human rights, work
+conditions, environmental protection, and compliant business
+practices that E.ON requires its suppliers to meet are defined in the
+Supplier Code of Conduct.
+Compliance with the Minimum Safeguards
+activities
+• Leasing pursuant to IFRS 16.53 (h)
+-257
+Of E.ON's taxonomy-eligible investments, property, plant, and
+equipment accounted for €5,066 million, intangible assets for
+€325 million, and right-of-use assets for €472 million.
+€4,941 million of property, plant, and equipment, €325 million of
+intangible assets, and €468 million of right-of-use assets are
+taxonomy-aligned. In each case the lion's share went toward our
+electricity networks (economic activity 4.9).
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+With regard to the EU's environmental objective 6, "protection and
+restoration of biodiversity and ecosystems," E.ON, where required,
+conducts environmental impact assessments and comparable
+assessments, which are a key prerequisite for obtaining permits to
+build and operate assets. Furthermore, one of E.ON's important
+ambitions is to conduct ecological corridor management or to
+convert to this approach.
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+89
+to category c) do not exist at E.ON.
+At E.ON, all investments in the 2023 financial year fall under
+category a) of the Annex to the Taxonomy Regulation. An
+investment plan according to category b) or investments according
+6,421
+411
+-971
+-811
+8,049
+Q1-Q4 2023
+Cash-effective investments
+./. Investment subsidies
++ Cash-effective financial investments
+./. Non-cash-effective investments
+./. Right-of-use assets
+EU taxonomy: total investments
+Reconciliation to Cash-effective Investments
+€ in millions
+In accordance with the taxonomy's specifications, E.ON also
+includes non-cash-effective investments, but not additions to
+financial assets. The taxonomy's definition of investments differs
+from E.ON's internal performance indicator for investments,
+namely cash-effective investments. E.ON therefore reconciles
+total investments pursuant to the taxonomy to the investments
+disclosed in the "Financial Situation" section of the Business
+Report:
+Group investments (denominator) consist of additions to fixed
+assets plus additions to property, plant, and equipment, and
+intangible assets from business combinations, which are shown in
+Note 15 to the Consolidated Financial Statements. The numerator
+is equal to, respectively, taxonomy-eligible, or taxonomy-aligned
+proportion of Group investments.
+= Contents Q Search ← Back
+Combined Group Management Report
+Combined Group Management Report
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+→ Internal Control System → Disclosures Regarding Takeovers
+→ Governance
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Sustainable Finance → Business Report
+E.ON Integrated Annual Report 2023
+87
+4.24 Production of heating/cooling from bioenergy
+5.1
+4.23 Production of heating/cooling from renewable non-fossil
+gaseous and liquid fuels
+4.20 Cogeneration of heating/cooling and power from bioenergy
+4.19 Cogeneration of heating/cooling and power from renewable
+non-fossil gaseous and liquid fuels
+4.16 Installation and operation of electric heat pumps
+4.15 District heating/cooling distribution
+4.14 Transmission and distribution networks for renewable and
+low-carbon gases
+4.10 Electricity storage
+Transmission and distribution of electricity
+4.9
+→ Governance
+4.21 Production of heating/cooling from solar thermal energy
+Construction, extension, and operation of water collection,
+treatment, and supply systems (and/or 2.1 water supply)
+6.13 Infrastructure for personal mobility, cycle logistics
+6.15 Infrastructure enabling low-carbon road transport and
+public transport
+E.ON Integrated Annual Report 2023
+88
+There are general criteria for the environmental objective 4,
+"transition to a circular economy," such as long durability, easy
+disassembly, or reparability. Most components are designed for a
+very long lifespan, are recyclable, and still have economic value at
+the end of their useful life (such as steel, aluminum, and copper).
+Such components of assets can be recycled within the E.ON Group
+or sold to third parties for further use.
+The criteria for the EU's environmental objective 3, "sustainable
+use and protection of water and marine resources," mainly refer to
+legal and regulatory requirements in the energy sector.
+Compliance with these requirements is a prerequisite for obtaining
+construction and operating permits. The same applies in principle
+to the criteria for the EU's environmental objective 5, "pollution
+prevention and control." Details can be found in the Environmental
+Management chapter.
+Protecting assets against the physical impacts of climate change
+("Climate change adaptation") is economically relevant for E.ON
+and is therefore factored into investment decisions. Climate-
+related risks and opportunities are also recorded in E.ON's risk
+management system. The Risks and Chances Report contains
+more information.
+Do No Significant Harm
+Investments in the development of broadband data infrastructure
+are classified as taxonomy-aligned because the data and analyses
+provided by them lead directly to the reduction of GHG emissions
+at E.ON or its customers.
+E.ON operates a large number of CHP and heat generation plants.
+Depending on the energy source used, there are various sets of
+criteria, some of which are met by E.ON plants. Plants fueled solely
+by natural gas will be classified as taxonomy-eligible under the
+new sets of criteria but are not classified as taxonomy-aligned at
+present.
+In the case of gas networks, in particular investments in existing
+infrastructure that increase the possibility of blending hydrogen
+and other low-carbon gases were classified as taxonomy-aligned.
+Pilot projects to establish dedicated hydrogen infrastructure were
+also assessed to be taxonomy-aligned. This also applies to
+investments and operating expenses related to the detection
+and/or prevention of methane leaks.
+In addition, E.ON operates water supply systems, the majority of
+which make a substantial contribution to climate change
+mitigation because they meet the energy-efficiency criterion (less
+than 0.5 kWh per cubic meter of water) and/or the leakage
+threshold of 1.5. For water supply systems that do not meet these
+criteria, investments made in the financial year to improve their
+energy efficiency and/or leakage rate by at least 20 percent are
+classified as taxonomy-aligned investments. The significant
+contribution to the sustainable use and protection of marine
+resources is made through the operation of water supply systems
+that provide consumers with high water quality and at the same
+time contribute to the efficiency of water resources. These water
+supply systems revenues are classified as taxonomy-aligned if the
+investments enabled them to meet the aforementioned criteria for
+taxonomy-aligned water supply systems.
+E.ON operates a large number of heating networks. This activity is
+in principle taxonomy-eligible. Some of these heating networks are
+"efficient" within the meaning of the taxonomy's criteria. This
+means that they transmit at least 50 percent renewable heat, at
+least 50 percent waste heat, at least 75 percent CHP heat, or at
+least 50 percent of a combination of these energy sources. Such
+heating networks thus make a substantial contribution to climate
+protection.
+E.ON's electricity networks make a substantial contribution to
+climate change mitigation within the meaning of the taxonomy,
+since they are downstream distribution networks, and thus part of
+the European interconnected system.
+E.ON's activities to establish infrastructure for personal eMobility
+meet the required criteria for creating low-carbon road transport.
+Substantial Contribution to Climate Change Mitigation
+By definition, electricity generation from wind and solar as well as
+run-of-river hydropower plants makes a substantial contribution
+to climate change mitigation within the meaning of the taxonomy.
+No other criteria for the assessment of their substantial
+contribution to climate protection need to be assessed. The same
+applies to the installation of devices such as solar panels, smart
+energy meters, and electric-vehicle charging stations in buildings.
+E.ON identified no economic activities in 2023 that make a
+significant contribution to environmental objective 2, "Climate
+change adaptation," or to environmental objectives 4 to 6. If
+economic activities make a significant contribution to
+environmental objective 1, "Climate change mitigation," as well as
+to environmental objective 3, "The sustainable use and protection
+of water and marine resources," we assign the more significant
+contribution to climate change mitigation.
+Data-driven solutions for GHG emissions reductions
+Installation, maintenance and repair of instruments and
+devices for measuring, regulation and controlling energy
+performance of buildings
+Installation, maintenance, and repair of charging stations for
+electric vehicles in buildings (and parking spaces attached to
+buildings)
+8.2
+7.5
+7.4
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report → Forecast Report
+→Risks and Chances Report
+→Internal Control System → Disclosures Regarding Takeovers
+→ Internal Control System → Disclosures Regarding Takeovers
+99
+→Risks and Chances Report
+Electricity generation from hydropower
+90
+91
+4,518
+398
+4,120
+46
+4,074
+Energy Networks
+Customer Solutions
+1.-4. Quartal 2022
+71
+73
+8,049
+2,187
+5,863
+129
+5,734
+E.ON Group
+136
+98
+310
+35
+345
+E.ON Integrated Annual Report 2023
+90
+90
+¹Based on EU taxonomy regulations (includes non-cash items, excludes financial investments).
+2Due to the changes in segment reporting, the previous year's figures have been adjusted accordingly.
+98
+80
+82
+5,477
+1,012
+4,465
+81
+4,384
+E.ON Group
+72
+72
+Corporate Functions/Other
+90
+35
+39
+887
+542
+136
+→ Forecast Report
+Corporate Functions/Other
+28
+aligned
+Taxonomy-
+Not
+%
+EU taxonomy ratios
+%
+%
+The Customer Solutions segment's taxonomy-aligned investments
+totaled €0.4 billion. Its businesses that install, maintain, and
+devices for measuring, regulating, and controlling buildings' overall
+energy efficiency represented its main contributor to the EU
+taxonomy. The expansion of its assets for district heating
+distribution as well as its energy-infrastructure business, which
+encompasses biofuel-fired electricity and heat cogeneration, as
+well as investments in plants for heat production with combined
+feedstocks are likewise covered by the taxonomy. The
+procurement and sale of power and gas are not covered by the
+taxonomy. E.ON's distributed solar generating facilities
+contributed additional amounts. We invested in solar projects in
+2023, for example in Germany.
+In addition, €382 million of investments in gas networks were
+taxonomy-aligned and thus increased significantly relative to the
+prior year. In Germany in particular, these investments serve to
+establish and expand hydrogen infrastructure or enable hydrogen
+to be admixed to E.ON's existing gas networks. €77 million of the
+investments in our water networks were taxonomy-aligned.
+Taxonomy-eligible investments
+Q1-Q4 2023
+taxonomy-
+aligned
+€ in millions
+The Energy Networks segment made a significant contribution.
+About 82 percent of its investments were taxonomy-eligible;
+nearly all of them were taxonomy-aligned. At roughly €4.5 billion,
+the largest contribution came from E.ON's electricity distribution
+networks, which are part of the European interconnected system.
+They continually integrate renewable generating facilities, thereby
+propelling the energy transition in Europe and connecting
+customers to sustainable energy. E.ON invested significantly more
+in taxonomy-aligned electricity networks compared with the
+previous year. This trend is supported by the digitalization of
+E.ON's networks through the expansion of fiber-optics and broad-
+band technology. E.ON invested €289 million in this area in the
+year under review.
+In the 2023 financial year, 73 percent of core-business
+investments were within the scope of the EU taxonomy
+(taxonomy-eligible). Taxonomy-aligned activities accounted for
+98 percent of taxonomy-eligible investments.
+Investments
+Below we report on Group-wide EU taxonomy investments,
+operating expenses, and revenue by segment. Details on the EU
+taxonomy key figures by economic activity are presented in detail
+under EU Taxonomy in the Other Information section.
+The denominator for operating expenses is to be specified in
+accordance with the taxonomy requirements. Ecologically
+sustainable operating expenses are to include individually
+attributable, non-capitalized expenses for research and
+development, building renovations, short-term leasing,
+maintenance and repairs, other direct expenses in connection with
+the maintenance of assets, and other expenses necessary for the
+maintenance of ecologically sustainable economic activities. At
+E.ON, this mainly includes expenditures for repair and
+maintenance performed by third parties, which are reported under
+cost of materials and other operating expenses. The numerator
+reflects, respectively, the taxonomy-eligible or taxonomy-aligned
+proportion of operating expenses.
+Operating Expenses
+Revenues correspond to net sales excluding electricity and energy
+taxes as shown in the Consolidated Income Statements of the
+Integrated Annual Report. These figures are included in the
+denominator, whereas the corresponding taxonomy-eligible
+and/or -aligned revenues are shown in the numerator.
+Revenues
+= Contents Q Search Back
+EU Taxonomy Investments 1,2
+Total
+Not
+taxonomy-
+eligible
+Total
+36
+1,384
+883
+501
+110
+391
+Customer Solutions
+100
+82
+82
+6,529
+1,168
+5,362
+19
+5,342
+Energy Networks
+(of eligible)
+(of total)
+Taxonomy-
+aligned
+Taxonomy-
+aligned
+Taxonomy-
+eligible
+(of total)
+78
+4.5
+⚫ comply with technical screening criteria defined by the European
+Commission
+4.3
+E.ON considers good corporate governance to consist primarily of
+responsible and value-oriented management. This also includes
+having a transparent tax strategy. E.ON's tax strategy and corporate
+strategy are closely aligned. The aim is to manage the Company's
+taxes sustainably in order to help ensure that it continues to invest,
+to operate flexibly and efficiently, and to provide attractive dividends
+to shareholders. E.ON's tax strategy is therefore designed to be
+fully compliant with tax law. It ensures that management of
+E.ON's taxation is efficient, responsible, transparent, and accurate,
+both for the Group as a whole and in individual tax jurisdictions.
+GRI 3-3
+Tax X
+Owing to legislation amended in 2022, E.ON subsidiary
+Preussen Elektra continued to operate Isar 2 nuclear power plant
+until April 15, 2023, after which the plant stopped producing
+electricity. No additional fuel had to be procured for extended
+operations. Preussen Elektra stopped procuring uranium in 2020.
+Uranium Procurement
+A large proportion of our biomass capacity is installed in Sweden.
+E.ON Energiinfrastruktur AB operates district heating businesses
+in Örebro, Nörrköping, and parts of Stockholm and Malmö. Since
+2014, E.ON has assessed the CSR performance of its suppliers
+there using a method developed by E.ON Energiinfrastruktur AB.
+In addition, key requirements for biomass suppliers-such as the
+Supplier Code of Conduct and compliance with the EU Renewable
+Energy Directive II ("RED II")—have been integral to contracts with
+suppliers since 2021. In 2022 E.ON introduced an expanded in-
+house assessment of sustainability-related risks and applied it in
+2023 as well.
+E.ON is committed to procuring the fuel for its biomass-fired assets
+responsibly and sustainably. Suppliers of solid biomass must, like
+non-fuel suppliers, contractually agree to comply with our Supplier
+Code of Conduct. Until March 2023, the E.ON Biomass Purchasing
+Amendment from 2010 defined our policies and procedures,
+which include risk assessments, supplier audits, and provisions for
+joint ventures. Effective March 2023, we redefined the terms for
+the purchase of solid biomass for our Energy Infrastructure
+Solutions ("EIS") business and thus replaced the former Biomass
+Purchasing Amendment. The purpose of the new rules is to ensure
+that all relevant units act in accordance with applicable EU
+regulations and meet E.ON's sustainability standards when
+procuring and using solid biomass for their business activities. All
+biomass suppliers must pledge to respect human rights, safeguard
+the general living conditions of persons affected by biomass
+production, and protect biodiversity and the environment.
+Excursus: Biomass
+Employees can report possible violations of human rights through
+internal reporting channels and a Group-wide, IT-supported,
+external Whistleblower hotline. The hotline service, which is
+published on the Internet, can take calls in the official languages of
+all countries in which E.ON operates. Not only E.ON employees,
+but also business partners, their employees, and other third parties
+can contact the hotline, anonymously if they wish. The information
+is forwarded to the responsible department at Corporate
+Functions. Depending on the type and severity of the potential
+violation, the Compliance department immediately reports it to the
+E.ON Management Board, files criminal charges, initiates its own
+investigation, or takes other measures. In 2023 the Whistleblower
+system was used to report four potential human rights violations.
+The investigation found that the allegations were not a violation of
+human rights or E.ON's Code of Conduct.
+E.ON's Approach
+E.ON's objective is to avoid violations of human rights,
+environmental standards, and its corporate principles. For this
+purpose, E.ON endeavors to identify the relevant risks along its
+value chain. Periodic risk assessments can help E.ON detect actual
+or suspected violations. If violations occur, the Supply Chain
+Compliance Officer and the respective Supply Chain Director are
+notified immediately and corrective measures are demanded from
+the supplier. Implementation is precisely monitored by E.ON. If the
+situation does not improve, E.ON terminates its business
+relationship with the supplier. No business relationships were
+terminated for this reason in 2023.
+In addition, E.ON trained about 320 Supply Chain employees on
+respect for human rights along the supply chain, new aspects of
+onboarding, and E.ON's risk matrix for human rights.
+2023. More than 80 percent of employees had completed the
+module by the end of 2023.
+= Contents Q Search ← Back
+Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ About this Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Goals and Performance Review
+Combined Group Management Report
+E.ON is aware of its social responsibility regarding its significance
+as a tax payer. It aims for full tax compliance and adheres to all
+national and international tax legislation and standards. E.ON also
+has in place policies and procedures to prevent tax evasion. This
+includes the obligation of all employees to report any suspicions or
+concerns to their supervisor, Group Tax, their unit's Tax function,
+Group Compliance, or the Whistleblower hotline; if they wish, they
+may do so anonymously (for more information about the hotline,
+see the Compliance and Anticorruption chapter).
+E.ON's tax function encompasses Group Tax as well as the units'
+Tax departments. It actively and continually identifies, assesses,
+and monitors tax risks to make sure that the Company's tax
+practices are in line with its strategic objectives. To achieve this
+and to ensure appropriate responses to risks, E.ON has in place a
+governance framework, which includes a Tax Function Policy. The
+framework and policy were approved by the E.ON Management
+Board and are mandatory for all Group companies. They are
+embedded into E.ON's overall compliance management system
+and supplemented by comprehensive risk control management
+procedures, continual self-assessment as well as regular internal
+E.ON employees participate in a variety of working groups and
+committees of trade associations, such as the Federation of
+German Industries (German abbreviation: "BDI"), the German
+Association of Energy and Water Industries (German abbreviation:
+"BDEW"), and Chambers of Commerce. This enables them to
+contribute to the discussion on new tax legislation as well (for
+more information on E.ON's work in associations, see the ESG
+Materiality and Stakeholder Engagement chapter).
+ensure that our calculations always comply with the law. Where
+reasonable, we implement software interfaces to ensure data
+integrity and to minimize the risk of manual errors.
+E.ON's tax function takes a variety of steps to stay on top of new
+developments. Teams and managers hold meetings at various
+intervals (weekly, biweekly, or monthly) to discuss emerging tax
+issues. E.ON's tax experts also meet at slightly longer intervals
+(monthly, quarterly, or annually) to discuss country-specific and
+international tax issues. These meetings, which take place both
+physically and virtually, promote continuous collaboration and
+coordination between Group Tax and the units' Tax departments.
+In addition, Tax teams and managers also receive in-house training.
+E.ON strives to continually improve processes, particularly by
+deploying and using digital solutions that ensure tax compliance
+while enhancing efficiency. Our digital solutions include an
+integrated toolset that calculates income tax for quarterly and
+annual financial statements and tax returns. Tax tools are updated
+on a regular basis to reflect changes in tax laws. This enables us to
+Specific Actions
+The SVP Group Tax defines E.ON's tax principles, and is
+responsible for ensuring that these principles and concomitant
+procedures are in place, maintained, and complied with Group-
+wide. He reports to the E.ON Supervisory Board's Audit and Risk
+Committee on tax-related issues and risks. In addition, financial tax
+risks are reported to Group Controlling and Risk, which examines
+these risks from a Group perspective and prepares reports for the
+consolidated risk assessment of the E.ON Group. The tax function
+disseminates guidelines and policies to ensure tax compliance,
+including related tasks, processes, and responsibilities. E.ON has in
+place tax compliance management systems according to IDW
+audit standard PS 980 at its major operations in Germany. The
+systems' purpose is to identify and classify all material tax risks
+and to map the findings in a detailed risk control matrix ("RCM").
+The RCMs are continually updated and maintained.
+("TCO"), whose role is to ensure that the existing tax compliance
+management system is effective and efficient. The TCO reports
+directly to the SVP Group Tax. Additionally, local tax compliance
+management systems were put in place at the level of
+independent tax groups in Germany and other countries.
+The E.ON Management Board has overall responsibility for the
+Group's corporate strategy, which includes managing and
+monitoring the tax function. It has delegated the responsibility for
+this function to the Senior Vice President ("SVP") Group Tax, who
+reports directly to the Chief Financial Officer. The heads of the Tax
+departments in Germany and other countries report directly to
+Group Tax as well as to their unit's management board.
+Furthermore, E.ON SE has appointed a Tax Compliance Officer
+Organization and Responsibilities
+E.ON has issued a binding Group-wide Transfer Pricing Policy to
+ensure that intra-Group transactions are conducted in accordance
+with the arm's-length principle. This principle of international tax
+law states that the transfer prices of cross-border transactions
+between Group units, including all ownership interests above 25
+percent, must be set as they would be in a comparable transaction
+between independent third parties in an external market. Group
+Tax is responsible for monitoring adherence to the arm's-length
+principle and is involved in all major intra-Group transactions. It
+does this through various means, including regular meetings with
+relevant E.ON business units and functions as well as fixed Group-
+wide transfer pricing processes. In addition, participants from
+relevant business units and functions (in Germany and elsewhere)
+meet at least once a year to align cross-border intra-Group
+transactions to meet operational as well as tax requirements.
+Transfer pricing processes are monitored on an ongoing basis.
+Guidelines and Policies
+E.ON does not make use of jurisdictions publicly identified as non-
+cooperative-also know as tax oases-to reduce its effective tax
+burden. E.ON does not relocate any business activities in low-tax
+jurisdictions with the primary goal of thereby achieving lower
+taxation. E.ON does not use any aggressive tax-reducing
+structures, particularly no structures that lack a business reason or
+motive. E.ON's tax planning always adopts the principle of
+complying with both letter and the spirit of the law.
+= Contents Q Search ← Back
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report
+Risks and Chances Report
+→ About this Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+83
+and external audits. The Tax function has also published the
+aforementioned tax strategy.
+E.ON Integrated Annual Report 2023
+82
+E.ON continually improves its eLearning tools for employees, such
+as the annual Web training module on human rights, compliance,
+and cyber and data security, which was updated in September
+Risk Management pursuant to the Supply Chain Act
+We conduct periodic and ad hoc risk analyses for our own business
+and for our supply chain in order to identify human rights and
+environmental risks at an early stage. The analyses have two stages.
+First, we use publicly available indicators and sources to assess the
+human rights and environmental risks defined by the Supply Chain
+Act. Examples include the Global Rights Index of the International
+Trade Union Confederation ("ITUC") and the Human Development
+Report of the United Nations Development Programme ("UNDP").
+We adopt a risk-based approach that includes both country and
+industry risks. We also consider risks associated with specific
+procurement categories and use a digital solution for ongoing risk
+assessment of our own facilities as well as our suppliers. Our own
+facilities will be integrated into this digital solution starting in
+2024. In addition, risk analysis incorporates information received
+through our complaints process. Then we identify how we can
+reduce the risk potential by means of our existing measures and,
+finally, prioritize the specific risks. As part of risk analyses
+conducted on a regular basis, we have prioritized identified risks
+for our own facilities and for our supply chain. For our own
+business, we have identified occupational health and safety as a
+risk inherent in our industry and thus as a priority risk for us. The
+associated preventive measures are described in the
+Environmental Management and Occupational Health and Safety
+chapters. For our suppliers and our deeper value chain, we have
+All employees of Group units are responsible for ensuring that
+requirements are met at our own company. The Supply Chain
+division, on the other hand, deals with the full range of ESG
+aspects along the supply chain. It carries out the related tasks in
+observance of legal requirements as well as company policies,
+including HSE and sustainability standards.
+also responsible for Group-wide complaints management and
+exchanges information with external stakeholders on topics
+relevant to human rights. In addition, it keeps the Chief Human
+Rights Officer informed about current developments and incidents
+and advises him on upcoming activities and decisions.
+A new task area, the Human Rights Center of Expertise, was created
+as part of the human rights due diligence project. It assumed the
+completed project's tasks from the summer of 2023 onward. The
+center, which is part of the Sustainability & Climate department,
+ensures that legal requirements are fulfilled across all divisions and
+units. Furthermore, it implements and maintains our human rights
+risk management system, conducts periodic risk analyses of our
+own business as well as our supply chain, and reports on them. It is
+The role of Chief Human Rights Officer was previously held by the
+Chairman of the E.ON Management Board, Leonhard Birnbaum, who
+continues to serve as Chief Sustainability Officer and Chairman of
+the Sustainability Council. As part of the Group-wide human rights
+due diligence project, the task areas of the future Human Rights
+Officer were expanded in line with the Supply Chain Act, with a
+greater focus on legal aspects. In order to meet the associated new
+requirements, in January 2023 E.ON transferred the role to the
+General Counsel and Chief Compliance Officer. He is the new Chief
+Human Rights Officer and thus responsible for monitoring our
+human rights risk management system and reports on this to the
+Management Board on a regular basis. He is also a permanent
+member of the Sustainability Council. Staff in the Sustainability
+department and the Legal Affairs, Compliance and Security division
+deal with human rights issues, such as changes in legislation.
+Depending on the issue, the Chief Human Rights Officer can
+involve the Sustainability Council or the E.ON Management Board.
+Organization and Responsibilities
+The E.ON Supply Chain Function Policy describes the mandate and
+organizational setup of the Supply Chain function. The function
+encompasses the management of procurement processes,
+activities, policies, tools, and supplier relationships for all units to
+which the policy applies. In addition, the Function Policy (in
+conjunction with the Supply Chain Handbook) defines Group-wide
+principles, processes, and responsibilities for non-fuel
+procurement by the above-mentioned units. Excluded from this
+are the special cases on a specific list (for example energy and fuel
+procurement, financial and real estate transactions, and taxes).
+The Supplier Code of Conduct defines standards for human rights,
+working conditions, environmental protection, and legally
+compliant, honest business practices that E.ON requires its
+suppliers to meet; it was updated on September 1, 2023, and
+applies to all suppliers. The current version is supplemented by
+additional requirements from the Supply Chain Act and stipulates
+the standards to be complied with in regard to fair working
+conditions in the supply chain and to climate protection.
+To prevent human rights violations, E.ON aims to always adhere to
+external standards and for this purpose has its own policies and
+guidelines. E.ON's Human Rights Statement, which was signed by all
+Management Board members and the Chief Human Rights Officer,
+is published on the E.ON website. The statement acknowledges
+the International Bill of Human Rights and the Declaration on
+Fundamental Principles and Rights at Work of the International
+Labour Organization ("ILO") of the United Nations ("UN") and its
+fundamental conventions and provides an overview of our risks
+and measures taken. It also refers to E.ON's own guidelines, such
+as the Codes of Conduct for employees and suppliers. E.ON's Code
+of Conduct (more information can be found in the Compliance and
+Anticorruption chapter) obliges all employees to contribute to a
+non-discriminatory and safe work environment and to respect
+human rights. In addition, a People Guideline provides guidance to
+employees so that they procure goods and services in line with
+E.ON's ESG standards. The rules and regulations E.ON follows also
+include the European Convention for the Protection of Human Rights
+and the principles of the United Nations Global Compact ("UNGC").
+E.ON has participated in the UNGC since 2005. Other guidelines
+and policies are the responsibility of the individual departments
+and support the implementation of suitable preventive measures
+for areas such as HSE and compliance. These are described in the
+chapters entitled Environmental Management, Occupational
+Health and Safety, and Compliance and Anticorruption.
+81
+Guidelines and Policies
+= Contents Q Search ← Back
+Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+Combined Group Management Report
+Officer. More information can be found below under "Organization
+and Responsibilities."
+E.ON Integrated Annual Report 2023
+Combined Group Management Report
+→ About this Report
+Training
+A first step toward decarbonizing supply chains is to make the
+current CO2 emissions of purchased goods and services more
+transparent. In 2022 E.ON therefore conducted a heatmap
+analysis of the greenhouse gas emissions in its supply chains
+based on third-party emissions factors and cost-based data. We
+will repeat the analysis on an annual basis. In 2023 the analysis
+included taking a closer look at lower-emissions metals and sulfur
+hexafluoride ("SF6") gas. More information on our reduction efforts
+can be found in the Climate Protection chapter.
+Decarbonization
+The findings indicated clear differences between product
+categories and thus provided important insights for future
+measures to improve sustainability at the product and supplier level.
+Overall, the analysis makes an important contribution to enhancing
+E.ON Supply Chain's environmental and social responsibility.
+In 2023 we conducted a multistage analysis of various product
+categories, including transformers, inverters, solar systems,
+batteries, and circuit breakers. The analysis was not only of end
+products, but also preliminary stages, including electronic
+components as well as chemicals and raw materials used.
+Multistage Supplier Analysis
+Specific Actions
+of E.ON's annual spend. Nevertheless, E.ON is aware that the
+complexity of international supply chains poses a challenge to
+transparency. E.ON is therefore also active in industry initiatives to
+develop industry-specific standards for improved transparency in
+supply chains, as described above under "E.ON's Approach" and in
+the ESG Materiality and Stakeholder Engagement chapter.
+In the second quarter of 2022 E.ON began introducing a digital
+solution for ongoing risk assessment of suppliers with medium and
+high human rights risk. They are assessed in a variety of
+categories, including sustainability, finance, cybersecurity, supply
+chain disruption, and compliance. The digital solution looks at
+several elements called points of interest ("Pols"): the holding
+company of suppliers, branches, plant locations, and logistics
+routes. Since the program's introduction, over 3,800 Pols have
+been monitored on an ongoing basis, thereby covering 60 percent
+The human rights due diligence check introduced in 2021 is based
+on a human rights risk matrix that combines the risks of the different
+categories of goods and services E.ON procures with the risks of
+the countries in which suppliers operate. Since being updated in
+2023 the matrix covers all of E.ON's procurement categories.
+Potentially risky suppliers first had to pass additional checks, such
+as a more detailed questionnaire or audit, and agree to make
+improvements and provide evidence of their implementation. In
+2023, more than 3,600 new and existing suppliers answered the
+questionnaire. Many high-risk suppliers successfully completed
+the human rights due diligence check. Suppliers that have
+difficulty answering the questionnaire or providing evidence of
+their measures are supported and closely monitored.
+Building on the assessment procedures introduced in 2018, in the
+year under review E.ON continued to evaluate its suppliers'
+performance and, based on the findings, make decisions about its
+relationship with them. Alongside onboarding, E.ON determines
+annually which of its non-fuel suppliers it deems material; E.ON
+evaluates them on the basis of five KPIs: quality, commercial
+aspects, delivery, innovation, and corporate sustainability, including
+human rights. E.ON discusses the results with its suppliers in
+feedback meetings. During this meeting, E.ON also decides
+whether it will require a supplier to take specific improvement
+measures if the business relationship is to be maintained.
+act do not use the above-described process but instead follow the
+qualification procedures required under their country's laws.
+This approach's purpose is to minimize potential HSE and CSR
+risks. As of year-end 2023, 97.4 percent of non-fuel suppliers had
+completed the onboarding process. New suppliers are asked by the
+manager responsible for their product or service category to register
+using the supplier onboarding solution. Depending on the transaction
+volume and HSE risk, suppliers must answer one or more
+questionnaires. In certain cases, E.ON may take additional steps.
+These include a supplier audit to check whether the supplier complies
+with E.ON's standards for human rights, working conditions, and
+environmental protection. E.ON may also require a supplier to have
+in place an environmental management system certified to ISO
+14001 or Eco-Management and Audit Scheme ("EMAS") III or a
+health and safety management system certified to ISO 45001.
+Suppliers that participate in tenders as part of a public procurement
+The onboarding process for suppliers is carried out before a
+contract is signed. Its steps include self-registration by the
+supplier, a formal pledge to comply with the E.ON Supplier Code of
+Conduct, and a compliance check. Every non-fuel supplier whose
+individual transaction volume exceeds €25,000 must complete
+this process. Non-fuel suppliers that are not subject to supplier
+onboarding must agree to E.ON's General Terms and Conditions
+for Purchase Contracts, which are legally binding. These oblige
+non-fuel suppliers, among other things, to comply with the
+minimum standards of our Supplier Code of Conduct.
+Our supply chain management for non-fuel suppliers, to which the
+following remarks refer, consists of various preventive measures that
+are interlinked and accompany the supplier in the procurement
+process. They are fine-tuned on a regular basis and described below:
+Supply Chain Management
+additionally identified fair working conditions as a priority risk due to
+the complexity of our global supply chains. We established a focus
+group for our solar and battery supply chains. It consists of experts
+from the Procurement, Sales, and Sustainability departments and
+provides closer support for these supply chains. We also address
+the issue in industry initiatives like Solar Power Europe.
+= Contents Q Search Back
+→ Governance → Sustainable Finance → Business Report
+→ Internal Control System → Disclosures Regarding Takeovers
+→ Climate Protection and Environmental Management → Employees and Society
+→ Forecast Report Risks and Chances Report
+→ Corporate Profile
+Goals and Performance Review
+E.ON and its tax function place great emphasis on maintaining
+transparent and mutual communications with the tax authorities in
+the countries where the Company does operates. We prepare and
+file all required tax returns and pay the correct amount of tax on
+time and adopt the principle of complying with both letter and the
+spirit of the law. We seek advice from independent experts to
+clarify matters of doubt and uncertainties.
+To achieve a higher level of certainty, E.ON regularly discusses
+binding tax rulings or advance pricing agreements ("APA") with tax
+authorities if this is possible, expedient, and of general or economic
+importance to E.ON. Our aim is to prevent subsequent disagreements
+between the tax authorities of different states and our business units.
+E.ON partners with external tax experts that help it supervise
+company audits and prepare tax returns and declarations as well as
+tax payments. The collaboration with external partners is based on
+open, mutually trustful communications. Each partner performs its
+own independent quality assurance, which, in the aggregate, leads
+to adequate quality checks. E.ON constantly aims for certainty in
+its tax positions and, where appropriate, obtains internal or external
+advice to verify and validate its positions. In case our assessment
+does not match that of the tax authorities, we communicate the
+divergent opinion openly in order to prevent misunderstandings.
+86
+E.ON reports on activities that already contribute to the
+environmental objectives or are activities that enable climate
+protection or represent transition activities.
+• Generation of heat/cooling from renewable non-fossil gaseous
+and liquid fuels
+• Infrastructure for personal mobility
+• District-heating distribution
+• Power generation by means of photovoltaic technology
+Cogeneration of heat/cool and power from bioenergy
+•
+• Installation, maintenance and repair of instruments and devices
+for measuring, regulation and controlling energy performance of
+buildings
+E.ON Integrated Annual Report 2023
+• Construction, extension and operation of water collection,
+treatment and supply systems
+• Distribution networks for renewable and low-carbon gases
+• Distribution of electricity
+Of the activities relevant to E.ON as a whole, the following
+activities are of particular importance. By conducting them the
+Group makes a substantial contribution to climate change
+mitigation and/or to the sustainable use and protection of water
+and marine resources:
+contribution that E.ON's business model makes to climate
+protection.
+The economic activities described in the Delegated Act on
+environmental objectives 3 to 6 are, comparatively, not relevant
+for E.ON as an energy company. At the present time, only the
+activities listed in environmental objective 3 relating to water
+supply and municipal wastewater treatment (2.1 and/or 2.2),
+which are likewise covered by environmental objectives 1 and 2
+(activities 5.1 and 5.2, and/or 5.3 and 5.4), fall within E.ON's
+business activities. To avoid double counting, we continue to
+assign the economic activities to environmental objective 1,
+"Climate change mitigation." This confirms the significant
+In June 2023, as part of the sustainable finance package, the
+European Commission published the Delegated Taxonomy Act on
+environmental objectives 3 to 6 ("Sustainable use and protection
+of water and marine resources," "Transition to a circular economy,"
+"Pollution prevention and control," and "Protection and restoration
+of biodiversity and ecosystems"). At the same time, it published
+amendments to the delegated act on the first two environmental
+objectives and the delegated act on disclosure. The amendments
+include additional economic activities, adjustments to some DNSH
+criteria, and changes resulting from the publication of the
+delegated act on environmental objectives 3 to 6.
+The sets of criteria for generating electricity, heat, and/or cooling
+from fossil gas are fundamentally relevant for E.ON. E.ON installs
+and operates plants that are taxonomy-aligned within the meaning
+of the EU's new gas economic activities. E.ON did not, or did not
+fully, meet the criteria for taxonomy alignment in the 2023
+financial year.
+under any of the activities described in the supplementary
+delegated act. Activity 4.28 also does not apply to power
+generation in the last reactor unit still operated by
+PreussenElektra, since the decision made by the German federal
+government to temporarily extend operations does not correspond
+to an extension of the plant's operation within the meaning of the
+criteria of 4.28.
+Regarding nuclear energy, E.ON has come to the conclusion, based
+on a comprehensive review, that the temporary continued
+operation of Isar 2 nuclear power plant until April 2023, did not fall
+• Data-driven solutions for GHG emissions reductions
+Combined Group Management Report
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance
+Electricity generation using solar photovoltaic technology
+4.1
+The assessment included a review of all activities relevant for E.ON
+to determine whether they make a substantial contribution to
+climate change mitigation (and/or to the sustainable use and
+protection of water and marine resources) and meet the criteria
+contained in Article 3 of the EU taxonomy. The review identified
+the following economic activities as taxonomy-aligned on a
+proportional basis:
+Taxonomy-Aligned Economic Activities
+E.ON uses established processes and documentation at the Group
+level to assess and comply with the minimum safeguards. The
+Group ensures that the EU taxonomy's requirements are fully met
+in this regard by means of appropriate guidelines and related
+training and monitoring measures. E.ON companies are required to
+implement such policies and guidelines in a binding manner.
+Responsibility for compliance lies with the respective companies.
+Assessments of Minimum Safeguards
+Assessment of Doing No Significant Harm ("DNSH")
+The DNSH criteria mainly refer to compliance with legal
+requirements or, in the case of the "circular economy" objective, to
+fundamental aspects of the economic activity. DNSH conformity is
+therefore to be assessed at the level of an economic activity on a
+regular basis. DNSH conformity regarding EU environmental
+objective 2, "Climate change adaptation," is identified and assessed
+in E.ON's established risk management process. For this purpose,
+E.ON makes use of existing systems and processes for financial
+and non-financial risk management, which it has expanded to
+include EU taxonomy matters. Details can be found in the Risks
+and Chances Report.
+Compliance with the technical screening criteria is generally
+assessed and documented individually for each economic activity
+and at the companies on a decentralized basis. If the criteria
+provide for simplifications that allow compliance with the criteria
+to be assessed at the level of the entire economic activity, an
+operating segment, or for the entire Group, E.ON makes use of
+them.
+Assessment of Substantial Contribution
+E.ON conducts the analysis of taxonomy-alignment in detail as
+follows:
+business activities actually meet the taxonomy's technical
+screening criteria and create suitable records for this purpose.
+E.ON has had a regular process in place since 2021 to ensure the
+appropriate assessment of all taxonomy requirements related to
+the EU's environmental objectives 1, "Climate change mitigation,"
+and 2, "Climate change adaptation." The approach also applies to
+the taxonomy requirements to be considered for the first time in
+2023 in relation to EU environmental objectives 3 to 6
+("Sustainable use and protection of water and marine resources,"
+"Transition to a circular economy," "Pollution prevention and
+control," and "Protection and restoration of biodiversity and
+ecosystems"). E.ON's business activities are continually mapped to
+the relevant taxonomy criteria. We consider revenues to be the
+main criterion; that is, E.ON's activities are allocated to the
+taxonomy's economic activity with which revenues are or are
+supposed to be generated. The next step is an alignment check in
+which the mapping's finding are analyzed and checked in
+interviews, expert discussions, and workshops with the relevant
+operational contacts and experts from the specialist departments
+of the segments and business units as well as major Group
+companies to determine whether corresponding taxonomy criteria
+for the economic activities are actually met. The check's findings
+are documented for any taxonomy-relevant economic activities
+identified. This documentation is collated in an EU taxonomy
+manual that is binding for all E.ON companies. The companies use
+the manual's specifications to determine the extent to which their
+E.ON's Approach
+The figures for taxonomy-relevant economic activities were
+determined with reference to the FAQ documents published by the
+European Commission to date, which address questions of
+interpretation regarding Article 8 of the EU Taxonomy Regulation,
+and under application of the amendments to the Delegated Act on
+disclosure of taxonomy requirements published in 2023.
+E.ON's taxonomy-eligible and taxonomy-aligned economic
+activities are conducted predominantly at the Energy Networks
+and Customer Solutions segments. E.ON is an energy company,
+and thus, its activities in these segments are extensively covered
+by the economic activities listed in the EU taxonomy.
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ Sustainable Finance → Business Report
+In early March 2022 the European Commission published a
+supplementary Delegated Taxonomy Act on the environmental
+objectives 1, "climate change mitigation," and 2, "climate change
+adaptation." It now defines criteria for other economic activities
+under which investments in gas and nuclear power activities can
+be classified as environmentally sustainable. This is intended to
+accelerate the transition toward a carbon-neutral future
+characterized predominantly by renewable energy sources.
+Application of the supplementary act has been mandatory since
+the 2022 financial year.
+Electricity generation from wind power
+The European Commission has defined taxonomy criteria for
+various economic activities under which conditions these activities
+make a substantial contribution to at least one of the
+environmental objectives and, at the same time, do not
+significantly harm the achievement of the EU's five other
+environmental objectives. However, the criteria's provisions,
+formulations, and terms are still subject to uncertainties of
+interpretation. The following presents our interpretation of the
+sets of criteria.
+expenses that were attributable to taxonomy-eligible and
+taxonomy-non-eligible economic activities. Activities are
+taxonomy-eligible if they are described in principle in Annexes I
+and II to the Delegated Act on environmental objectives and can be
+assigned, regardless of whether the corresponding TSC for
+environmentally sustainable activities are met.
+5. Pollution prevention and control
+4. The transition to a circular economy
+resources
+3. The sustainable use and protection of water and marine
+2. Climate change adaptation
+1. Climate change mitigation
+The European Commission's action plan on financing sustainable
+growth defined a series of measures to channel capital toward
+environmentally sustainable activities and thus to help enable the
+European Union to become climate-neutral by 2050 as foreseen
+by the European Green Deal. The Commission laid the foundation
+for this in Regulation 2020/852, the EU Taxonomy Regulation,
+which describes what is considered an "environmentally
+sustainable activity", and which criteria are used to classify an
+economic activity as environmentally sustainable. The aim is to
+classify economic activities EU-wide on the basis of defined
+requirements with regard to their contribution to the six defined
+environmental objectives (Article 9 of the EU taxonomy) and thus
+to support the European Union's transformation to a climate and
+environmentally friendly economy. The six objectives are:
+General Principles
+EU Taxonomy O
+6. The protection and restoration of biodiversity and ecosystems
+▶ The transition to a sustainable and carbon-neutral economy is
+in full swing. Sustainable energy is not essential for propelling
+economic and social development, but a key factor in tackling
+climate change. Meeting the global challenges of climate change
+will require that the financial system changes so that it promotes
+sustainable businesses and climate-friendly solutions. E.ON's
+ambitious climate targets set it on an emissions-reduction path
+that is systematically aligned with the new energy world.
+Sustainability is at the core of our corporate strategy and is also
+the guiding principle for our actions. Our strategy accords with the
+European Union's decarbonization agenda and the EU Green Deal.
+Energy networks-one of E.ON's core businesses-are the platform
+for Europe's energy transition. Our investment program therefore
+aims to be largely aligned with the EU taxonomy. More than half of
+our funding needs will be met by the issuance of green bonds. Our
+strategy thus also reflects capital markets' increasing interest in
+sustainable investments.
+= Contents Q Search ← Back
+→Risks and Chances Report
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ About this Report → Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→ Governance → Sustainable Finance → Business Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+84
+Sustainable Finance and Investment
+Article 3 of the EU taxonomy defines economic activities as
+environmentally sustainable if they:
+• contribute substantially to at least one of six environmental
+objectives (Articles 10 to 16)
+do no significant harm to any of the other five environmental
+objectives (Article 17)
+= Contents Q Search ← Back
+→ Forecast Report
+→ Disclosures Regarding Takeovers
+→Internal Control System
+→ About this Report
+→ Governance → Sustainable Finance → Business Report
+→ Corporate Profile → Climate Protection and Environmental Management → Employees and Society
+→Risks and Chances Report
+Combined Group Management Report
+E.ON Integrated Annual Report 2023
+85
+E.ON has been required beginning with the 2021 financial year to
+disclose the proportion of investments, revenues, and operating
+Economic activities that reflect the need to protect, conserve, or
+restore biodiversity or to maintain or restore ecosystems to a good
+condition contribute to environmental objective 6, "Protection and
+restoration of biodiversity and ecosystems."
+Economic activity that eliminates pollution of air, water, soil, living
+organisms, and food resources makes a significant contribution to
+environmental objective 5, "Pollution prevention and control."
+Environmental objective 4, "Transition to a circular economy,"
+focuses on economic activities that contribute to promoting the
+efficient use of resources through reuse and recycling.
+Economic activities that achieve or maintain good environmental
+status for all water and marine resources make a significant
+contribution to environmental objective 3, "sustainable use and
+protection of water and marine resources."
+Economic activities that contribute to environmental objective 2,
+"Climate change adaptation," include or provide solutions that
+either avoid or substantially reduce the risk of the adverse impacts
+of the current and the future climate on the economic activity itself
+or on people, nature, or assets.
+An economic activity makes a substantial contribution to
+environmental objective 1, "Climate change mitigation," if it
+contributes substantially to the stabilization of greenhouse-gas
+("GHG") concentrations in the atmosphere at a level that prevents
+dangerous anthropogenic interference with the climate system,
+consistent with the Paris Agreement's long-term temperature
+target through the avoidance or reduction of GHG emissions.
+environmental objectives 3 to 6 is only mandatory for the 2024
+financial year onward; reporting on taxonomy-eligibility is required
+for the 2023 financial year.
+Known as technical screening criteria ("TSC"), they specify which
+economic activities are considered taxonomy-aligned. Reporting
+on the taxonomy-alignment of economic activities with regard to
+For the 2023 financial year and, for the first time, all six
+environmental objectives are to be considered for the question of a
+substantial contribution. Sets of criteria are available for defining
+the substantial contribution toward achieving the objectives. In the
+2022 and 2021 financial years, these sets of criteria were only
+available for the first two environmental objectives.
+• comply with minimum standards for occupational safety, human
+rights, anti-corruption, fair competition, and taxation (Article 18)
+In addition to the information required by law, E.ON voluntarily
+disclosed its taxonomy-aligned investments, revenues, and
+operating expenditures for the 2021 financial year. Activities are
+taxonomy-aligned if the corresponding taxonomy-eligible activities
+also meet all the criteria in Article 3 of the EU Taxonomy. These
+disclosures have been mandatory since 2022.
+→ Governance → Sustainable Finance → Business Report