Descripción de las zonas de estudio

Our investment program and share buyback program are financed by means of liquid funds, cash provided by operating activities, and debt. Our funding policy is designed to give E.ON access to a variety of financing resources at any time. As a rule, external funding is carried out by E.ON AG or via our Dutch finance subsidiary E.ON International Finance B.V. under guarantee of E.ON AG, and the funds are on-lent as needed within the Group.

Our funding policy is based on the following principles. First, we use a variety of markets and debt instruments to maximize the diversity of our investor base. Second, we issue bonds with terms that give our debt portfolio a broadly balanced maturity profile. Third, we combine large-volume benchmark issues with smaller issues that take advantage of market opportunities as they arise.

In the fall of 2007, E.ON launched its financing program for the period through 2010. Since that time, E.ON has issued a number of benchmark bonds denominated in euros, pounds sterling, and dollars. E.ON has also issued smaller bonds in a variety of currencies and taken advantage of other financing instruments. In addition, E.ON regularly issues commercial paper (“CP”). From the beginning of the financing program

Notes 26 and 27 to the Consolidated Financial Statements contain detailed information about E.ON’s liabilities, contin- gencies, and commitments.

Moody’s long-term rating for E.ON has been A2 since April 4, 2007. Standard & Poor’s (“S&P”) long-term rating for E.ON has been A since June 12, 2007. The short-term ratings are A-1 (S&P) and P-1 (Moody’s). The ratings of both agencies thus correspond to E.ON’s target rating. In 2008, S&P and Moody’s confirmed their E.ON ratings with a stable outlook.

E.ON AG Ratings Long term Short term Outlook Moody’s A2 P-1 Stable

Standard & Poor’s A A-1 Stable

Due to the financial crisis, risk premiums (spreads) widened in the course of 2008. This development also affected E.ON bonds. E.ON bonds are included in all relevant bond indices, in par- ticular the iBoxx Utilities A, iBoxx Utilities, and iBoxx Non- Financials A. Selection for inclusion in indices is subject to criteria, such as a bond’s rating, maturity, and minimum outstanding.

E.ON bonds issued in 2008 were issued under our existing €30 billion Debt Issuance Program (“DIP”), with the exception of the dollar-denominated bonds. We had €23.1 billion in bonds outstanding under our DIP at year-end 2008. In addition to our DIP, we have a €10 billion European CP program and a $10 billion U.S. CP program under which we can issue short-term CP. We had utilized €7.3 billion of these programs at year-end 2008.

E.ON successfully extended the 364-day tranche (Tranche A) of its syndicated credit facility at a volume of €7.5 billion. Tranche A matures on November 26, 2009. Our approximately €5 billion long-term tranche (Tranche B) matures on December 2, 2011. We did not utilize our credit facility at any time in 2008.

Non-current liabilities increased by €10.6 billion to €63 billion. This is primarily due to the successful placement in 2008 of long-term bonds with a book value of €10.8 billion and the reclassification of €4.5 billion from non-current to current liabilities due to maturity dates.

Current liabilities increased by about €25.9 billion to €55.6 bil- lion. The main factors were higher short-term financing, higher liabilities from derivative transactions as of the balance- sheet date, and higher current liabilities from the inclusion of operations acquired from Enel/Acciona and Endesa. The following key figures underscore that the E.ON Group has a solid asset and capital structure:

• Non-current assets are covered by equity at 36 percent (December 31, 2007: 52 percent).

• Non-current assets are covered by long-term capital at 95 percent (December 31, 2007: 102 percent).

Notes 4 to 26 to the Consolidated Financial Statements contain additional information about our asset situation.

Our positive earnings situation, solid increase in value, and good financial key figures are indicative of the E.ON Group’s solid financial condition at year-end 2008.

Non-current assets as of December 31, 2008, rose by 1 percent compared with the figure as of December 31, 2007, mainly due to the acquisition and inclusion, for the first time, of oper- ations from the portfolio of assets acquired from Enel/Acciona and Endesa and to investments in property, plant, and equip- ment. Lower fair values in the wake of the financial crisis along with impairment charges on goodwill had a negative effect on non-current assets.

Current assets increased by 61 percent compared with year- end 2007. The main factors were higher receivables from derivative transactions as of the balance-sheet date and higher current assets resulting from the inclusion of operations acquired from Enel/Acciona and Endesa.

Our equity ratio was 16 percentage points below the figure of 40 percent recorded at year-end 2007. Amid the financial crisis, the marking to market of our share investment in Gazprom (not including deferred tax assets) reduced our equity by about €9 billion. In addition, the payout of about €3 billion to E.ON shareholders and minority interests could not be fully offset by current net income in 2008. Furthermore, the transaction with Statkraft reduced our equity by €2.7 billion; this did not affect net income. Under the share buyback program, which began in 2007, we repurchased 73,692,090 shares of E.ON stock. We acquired additional shares on-market as part of our employee stock purchase program and transferred these to employees. On balance, the change in treasury shares reduced our equity by €2.9 billion.

Consolidated Assets, Liabilities, and Equity

 in millions Dec. 31, 2008 % Dec. 31, 2007 %

Non-current assets 106,436 68 105,804 77 Current assets 50,609 32 31,490 23 Total assets 157,045 100 137,294 100 Equity 38,427 24 55,130 40 Non-current liabilities 62,973 40 52,402 38 Current liabilities 55,645 36 29,762 22

As a result of the share buyback program, the Company held a total of 82,616,922 own shares with a total value of €3,316 million as of the balance-sheet date. These shares have been deducted from equity because they were acquired for the purpose of being cancelled.

E.ON AG’s income from equity interests in 2008 declined by €2,247 million to €4,997 million, due in part to lower income transferred combined with higher loss-pooling obligations. The main positive effect on income from equity interests was the €7,740 million in income transferred from E.ON Energie AG. In addition, the payment of paid-in capital from E.ON UK Holding GmbH increased income from equity interests by €3,104 million. The main negative factors were impairment changes at subsidiaries which, due to loss-pooling obliga- tions, had an adverse effect on income from equity interests. Impairment charges relate in particular to the parent com- pany of the U.S. Midwest market unit (€1,703 million) and E.ON Europa S.L. (€1,584 million). E.ON Europa holds shares in affiliated companies in France, Italy, and Spain. Note 14a to the Consoli dated Financial Statements contains details about the reasons for the impairment charges.

The negative figure recorded under other expenditures and income (net) improved by €132 million year on year to -€118 million.

Income taxes include current taxes for 2008 and for prior years and taxes for prior years due to outstanding tax audits. At the Annual Shareholders Meeting on May 6, 2009, manage- ment will propose that net income available for distribution be used to pay a cash dividend of €1.50 per share, a 9.5 percent increase. The positive development of our operating earnings is the main factor enabling us to pay out a higher dividend for the tenth year in a row. We believe this makes E.ON stock even more attractive to investors.

Income Statement of E.ON AG (Summary)

€ in millions 2008 2007

Income from equity interests 4,997 7,244

Interest income -965 -557

Other expenditures and income -118 -250 Income from continuing operations

before income taxes 3,914 6,437

Income taxes -1,025 -1,321

Net income 2,889 5,116

Net earnings carried forward 30 – Net income transferred to retained

earnings -62 -2,526

Net income available for distribution 2,857 2,590