Table of Contents

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2004
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to
Commission file number: 1-14688

Federal Republic of Germany (Jurisdiction of Incorporation or Organization)		E.ON-Platz 1, D-40479 Düsseldorf, GERMANY (Address of Principal Executive Offices)

Title of each class		Name of each exchange on which registered
American Depositary Shares representing
Ordinary Shares with no par value		New York Stock Exchange
Ordinary Shares with no par value		New York Stock Exchange*

*	Not for trading, but only in connection with the registration of American Depositary Shares.

---

Table of Contents

	•	“E.ON,” the “Company,” the “E.ON Group” or the “Group” refers to E.ON AG and its consolidated subsidiaries.
	•	“VEBA” refers to VEBA AG and its consolidated subsidiaries prior to its merger with VIAG AG and the name change from VEBA AG to E.ON AG. “VIAG” or the “VIAG Group” refers to VIAG AG and its consolidated subsidiaries prior to its merger with VEBA.
	•	“PreussenElektra” refers to PreussenElektra AG and its consolidated subsidiaries, which merged with Bayernwerk AG and its consolidated subsidiaries to form E.ON’s German and continental European energy business in the Central Europe market unit consisting of E.ON Energie AG and its consolidated subsidiaries (“E.ON Energie”).
	•	“E.ON Ruhrgas” refers to E.ON Ruhrgas AG (formerly Ruhrgas AG or “Ruhrgas”) and its consolidated subsidiaries, which collectively comprise E.ON’s gas business in the Pan-European Gas market unit. Until December 31, 2003, Ruhrgas and its consolidated subsidiaries formed E.ON’s former Ruhrgas division.
	•	“E.ON UK” refers to E.ON UK plc (formerly Powergen UK plc or “Powergen”) and its consolidated subsidiaries, which collectively comprise E.ON’s U.K. energy business in the U.K. market unit. Until December 31, 2003, Powergen and its consolidated subsidiaries, including LG&E Energy, which was held by Powergen until its transfer to a direct subsidiary of E.ON AG in March 2003, formed E.ON’s former Powergen division (“Powergen Group”).
	•	“Sydkraft” refers to Sydkraft AB and its consolidated subsidiaries, and “E.ON Finland” refers to E.ON Finland Oyj and its consolidated subsidiaries, which collectively comprise E.ON’s Nordic energy business in the Nordic market unit.
	•	“LG&E Energy” refers to LG&E Energy LLC and its consolidated subsidiaries, which collectively comprise E.ON’s U.S. energy business in the U.S. Midwest market unit. Until December 31, 2003, LG&E Energy formed the U.S. business of the Powergen Group.
	•	“Viterra” refers to Viterra AG and its consolidated subsidiaries, which collectively comprise E.ON’s real estate business in the other activities segment.
	•	“Degussa” refers to Degussa AG and its consolidated subsidiaries, in which E.ON now owns a minority interest, and which collectively comprised E.ON’s former Degussa division.
	•	“VEBA Oel” refers to VEBA Oel AG and its consolidated subsidiaries, which collectively comprised E.ON’s former oil division.
	•	“Stinnes” refers to Stinnes AG and its consolidated subsidiaries, which collectively comprised E.ON’s former distribution/logistics division.
	•	“VAW” refers to VAW aluminium AG and its consolidated subsidiaries, which collectively comprised E.ON’s former aluminum division.
	•	“MEMC” refers to MEMC Electronic Materials, Inc. and its consolidated subsidiaries, which collectively comprised E.ON’s former silicon wafers division.

---

Table of Contents

---

Table of Contents

---

PART I
	Item 1. Identity of Directors, Senior Management and Advisers.
	Item 2. Offer Statistics and Expected Timetable.
	Item 3. Key Information.
		SELECTED FINANCIAL DATA
		DIVIDENDS
		EXCHANGE RATES
		RISK FACTORS
	Item 4. Information on the Company.
		HISTORY AND DEVELOPMENT OF THE COMPANY
			VEBA-VIAG MERGER
			POWERGEN GROUP ACQUISITION
			RUHRGAS ACQUISITION
			GROUP STRATEGY
			OTHER SIGNIFICANT EVENTS
			CAPITAL EXPENDITURES
		BUSINESS OVERVIEW
			INTRODUCTION
			CENTRAL EUROPE
			PAN-EUROPEAN GAS
			U.K.
			NORDIC
			U.S. MIDWEST
			OTHER ACTIVITIES
			DISCONTINUED OPERATIONS
		REGULATORY ENVIRONMENT
		ENVIRONMENTAL MATTERS
		OPERATING ENVIRONMENT
			ECONOMIC BACKGROUND
		RISK MANAGEMENT
		ORGANIZATIONAL STRUCTURE
		PROPERTY, PLANTS AND EQUIPMENT
			GENERAL
			PRODUCTION FACILITIES
		INTERNAL CONTROLS
	Item 5. Operating and Financial Review and Prospects.
		OVERVIEW
		ACQUISITIONS AND DISPOSITIONS
		CRITICAL ACCOUNTING POLICIES
		NEW ACCOUNTING PRONOUNCEMENTS
		RESULTS OF OPERATIONS
			BUSINESS SEGMENT INFORMATION
			YEAR ENDED DECEMBER 31, 2004 COMPARED WITH YEAR ENDED DECEMBER 31, 2003
			YEAR ENDED DECEMBER 31, 2003 COMPARED WITH YEAR ENDED DECEMBER 31, 2002
		INFLATION
		EXCHANGE RATE EXPOSURE AND CURRENCY RISK MANAGEMENT
		LIQUIDITY AND CAPITAL RESOURCES
		RESEARCH AND DEVELOPMENT
		TREND INFORMATION
		OFF-BALANCE SHEET ARRANGEMENTS
		CONTRACTUAL OBLIGATIONS
	Item 6. Directors, Senior Management and Employees.
	Item 7. Major Shareholders and Related Party Transactions.
	Item 8. Financial Information.
		CONSOLIDATED FINANCIAL STATEMENTS
		LEGAL PROCEEDINGS
		DIVIDEND POLICY
		SIGNIFICANT CHANGES
	Item 9. The Offer and Listing.
	Item 10. Additional Information.
		MEMORANDUM AND ARTICLES OF ASSOCIATION
		MATERIAL CONTRACTS
		EXCHANGE CONTROLS
		TAXATION
		DOCUMENTS ON DISPLAY
	Item 11. Quantitative and Qualitative Disclosures about Market Risk.
	Item 12. Description of Securities other than Equity Securities.
PART II
	Item 13. Defaults, Dividend Arrearages and Delinquencies.
	Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
	Item 15. Controls and Procedures.
	Item 16A. Audit Committee Financial Expert.
	Item 16B. Code of Ethics.
	Item 16C. Principal Accountant Fees and Services.
	Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
PART III
	Item 17. Financial Statements.
	Item 18. Financial Statements.
	Item 19. Exhibits.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SIGNATURES
English translation of the Articles of Association
Unofficial English Translation of Current Form of Management Board Service Agreement
Schedule 1 to Exhibit 10.1
Certification of Chief Executive Officer Pursuant to Section 302
Certification of Chief Financial Officer Pursuant to Section 302
Certificaiton of CEO and CFO Pursuant to Section 906

---

Table of Contents

Item 1.		Identity of Directors, Senior Management and Advisers				1
Item 2.		Offer Statistics and Expected Timetable				1
Item 3.		Key Information				1
		SELECTED FINANCIAL DATA				1
		DIVIDENDS				2
		EXCHANGE RATES				3
		RISK FACTORS				4
Item 4.		Information on the Company				13
		HISTORY AND DEVELOPMENT OF THE COMPANY				13
			VEBA-VIAG MERGER			13
			POWERGEN GROUP ACQUISITION			13
			RUHRGAS ACQUISITION			14
			GROUP STRATEGY			18
			OTHER SIGNIFICANT EVENTS			21
			CAPITAL EXPENDITURES			22
		BUSINESS OVERVIEW				22
			INTRODUCTION			22
			CENTRAL EUROPE			26
			PAN-EUROPEAN GAS			44
			U.K.			62
			NORDIC			73
			U.S. MIDWEST			85
			OTHER ACTIVITIES			92
			DISCONTINUED OPERATIONS			94
		REGULATORY ENVIRONMENT				96
		ENVIRONMENTAL MATTERS				110
		OPERATING ENVIRONMENT				115
			ECONOMIC BACKGROUND			115
		RISK MANAGEMENT				117
		ORGANIZATIONAL STRUCTURE				118
		PROPERTY, PLANTS AND EQUIPMENT				118
			GENERAL			118
			PRODUCTION FACILITIES			118
		INTERNAL CONTROLS				120
Item 5.		Operating and Financial Review and Prospects				120
		OVERVIEW				120
		ACQUISITIONS AND DISPOSITIONS				122
		CRITICAL ACCOUNTING POLICIES				128
		NEW ACCOUNTING PRONOUNCEMENTS				132
		RESULTS OF OPERATIONS				132
			BUSINESS SEGMENT INFORMATION			133
			YEAR ENDED DECEMBER 31, 2004 COMPARED WITH YEAR ENDED DECEMBER 31, 2003			134
			YEAR ENDED DECEMBER 31, 2003 COMPARED WITH YEAR ENDED DECEMBER 31, 2002			148

i

---

Table of Contents

		INFLATION			157
		EXCHANGE RATE EXPOSURE AND CURRENCY RISK MANAGEMENT			157
		LIQUIDITY AND CAPITAL RESOURCES			157
		RESEARCH AND DEVELOPMENT			165
		TREND INFORMATION			165
		OFF-BALANCE SHEET ARRANGEMENTS			165
		CONTRACTUAL OBLIGATIONS			167
Item 6.		Directors, Senior Management and Employees			168
Item 7.		Major Shareholders and Related Party Transactions			180
Item 8.		Financial Information			181
		CONSOLIDATED FINANCIAL STATEMENTS			181
		LEGAL PROCEEDINGS			181
		DIVIDEND POLICY			182
		SIGNIFICANT CHANGES			182
Item 9.		The Offer and Listing			182
Item 10.		Additional Information			185
		MEMORANDUM AND ARTICLES OF ASSOCIATION			185
		MATERIAL CONTRACTS			196
		EXCHANGE CONTROLS			196
		TAXATION			197
		DOCUMENTS ON DISPLAY			201
Item 11.		Quantitative and Qualitative Disclosures about Market Risk			201
Item 12.		Description of Securities other than Equity Securities			206
PART II
Item 13.		Defaults, Dividend Arrearages and Delinquencies			206
Item 14.		Material Modifications to the Rights of Security Holders and Use of Proceeds			206
Item 15.		Controls and Procedures			206
Item 16A.		Audit Committee Financial Expert			207
Item 16B.		Code of Ethics			207
Item 16C.		Principal Accountant Fees and Services			207
Item 16E.		Purchases of Equity Securities by the Issuer and Affiliated Purchasers			209
PART III
Item 17.		Financial Statements			210
Item 18.		Financial Statements			210
Item 19.		Exhibits			210

ii

---

Table of Contents

		Year Ended December 31,
		2004(1)				2004				2003				2002				2001				2000
		(in millions, except share amounts)
Statement of Income Data:
Sales		$	66,476				€49,103				€46,427				€36,624				€36,886				€38,374
Sales excluding electricity and natural gas taxes(2)			60,576				44,745				42,541				35,691				36,192				38,385
Income/(Loss) from continuing operations before income taxes			9,204				6,799				5,538				(759	)			2,629				5,095
Income/(Loss) from continuing operations after income taxes(3)			6,568				4,852				4,414				(97	)			2,581				3,328
Income/(Loss) from continuing operations			5,886				4,348				3,950				(720	)			2,129				2,939
Income/(Loss) from discontinued operations(4)			(12	)			(9	)			1,137				3,306				(55	)			628
Net income			5,874				4,339				4,647				2,777				2,048				3,570
Basic earnings/(Loss) per share from continuing operations			8.96				6.62				6.04				(1.10	)			3.15				4.74
Basic earnings (Loss) per share from discontinued operations, net(4)			(0.01	)			(0.01	)			1.74				5.07				(0.08	)			1.01
Basic earnings per share from net income(5)			8.95				6.61				7.11				4.26				3.03				5.75

1

---

Table of Contents

		Year Ended December 31,
		2004(1)				2004				2003				2002				2001				2000
		(in millions, except share amounts)
Balance Sheet Data:
Total assets		$	154,417				€114,062				€111,850				€113,503				€101,659				€106,215
Long-term financial liabilities			18,330				13,540				14,884				17,576				9,308				7,611
Stockholders’ equity(6)			45,434				33,560				29,774				25,653				24,462				28,033
Number of authorized shares							692,000,000				692,000,000				692,000,000				692,000,000				763,298,875

(1)	Amounts in this column are unaudited and have been translated solely for the convenience of the reader at an exchange rate of $1.3538 = €1.00, the Noon Buying Rate on December 31, 2004.
(2)	Laws in Germany and other European countries in which E.ON operates require the seller of electricity to collect electricity taxes and remit such amounts to tax authorities. Similar laws also require the seller of natural gas to collect and remit natural gas taxes to tax authorities.
(3)	Before minority interest of €504 million for 2004, as compared with €464 million, €623 million, €452 million and €389 million for 2003, 2002, 2001 and 2000, respectively.
(4)	For more details, see “Item 5. Operating and Financial Review and Prospects — Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(5)	Includes earnings per share from the first-time application of new U.S. GAAP standards of €0.00, €(0.67), €0.29 and €(0.04) for 2004, 2003, 2002 and 2001, respectively.
(6)	After minority interests.

		Dividends Paid
		per Ordinary
		Share with no
		par value
Year Ended December 31,		€				$(1)
2000			1.35				1.18
2001			1.60				1.49
2002			1.75				1.96
2003			2.00				2.39
2004(2)			2.35				3.18

(1)	Translated into dollars at the Noon Buying Rate on the dividend payment date, which typically occurred during the second quarter of the following year, except for the 2004 amount, which has been translated at the Noon Buying Rate on December 31, 2004.
(2)	The dividend amount for the year ended December 31, 2004 is the amount proposed by E.ON’s Supervisory Board and Board of Management and has not yet been approved by its stockholders. Prior to the payment of the dividends, a resolution approving such amount must be passed by E.ON’s stockholders at the annual general meeting to be held on April 27, 2005.

2

---

Table of Contents

Period			Average(1)				High				Low				Period-End
2000				0.9207												0.9388
2001				0.8909												0.8901
2002				0.9495												1.0485
2003				1.1411												1.2597
2004				1.2478												1.3538
	September							1.2417				1.2052
	October							1.2783				1.2271
	November							1.3288				1.2703
	December							1.3625				1.3224
2005
	January							1.3476				1.2954
	February							1.3274				1.2773

(1)	The average of the Noon Buying Rates for the relevant period, calculated using the average of the Noon Buying Rates on the last business day of each month during the period.

3

---

Table of Contents

	•	Standardized documentation of risks and control systems;
	•	Evaluation of risks according to the degree of severity and the probability of occurrence, and an annual assessment of the effectiveness of existing control systems; and
	•	Analysis of the results and structured disclosure in a risk report.

	The Company’s core energy operations face strong competition, which could depress margins.

4

---

Table of Contents

5

---

Table of Contents

	•	As described above, EU directives provide that the regulatory authority to be introduced in Germany should have the power to set or approve network access tariffs or, alternatively, the methodologies used for calculating them. This could lead to lower grid fees for E.ON’s electricity and gas transportation and distribution businesses in Germany.
	•	In Germany, state cartel authorities in Bavaria, Hesse and Thuringia and the Federal Cartel Office have launched investigations of certain utilities with allegedly high gas tariffs to determine whether these gas prices constitute market abuse. These investigations affect some utilities in which Thüga and E.ON Energie hold interests. The Bavarian state cartel office and the Federal Cartel Office have since decided to end their investigations, while the proceedings in Hesse and Thuringia remain pending. The Company cannot currently predict the outcome of the pending investigations.
	•	Regulators in the United Kingdom have established a price control framework for electricity distribution customers that is in effect through March 31, 2005; new price controls will take effect in April 2005 for the five year period ending March 2010.
	•	In the United States, the rates for LG&E Energy’s retail electric and gas customers in Kentucky, its principal area of operations, are set by state regulators and remain in effect until such time that an adjustment is sought and approved. LG&E Energy’s affected utilities applied for and received increases in regulated tariffs effective as of July 1, 2004, although such increases remain the subject of continuing regulatory review and governmental inquiry.

6

---

Table of Contents

7

---

Table of Contents

8

---

Table of Contents

9

---

Table of Contents

10

---

Table of Contents

11

---

Table of Contents

12

---

Table of Contents

Item 4.	Information on the Company.

13

---

Table of Contents

	•	the issuance of securities;
	•	the acquisition of securities, utility assets and other businesses; and
	•	lending to or guaranteeing obligations of any other company in the registered holding company corporate structure.

14

---

Table of Contents

15

---

Table of Contents

	•	In September 2003, E.ON Energie sold its 80.5 percent interest in Gelsenwasser to a joint venture company owned by the municipal utilities of the cities of Dortmund and Bochum. Gelsenwasser has been accounted for as a discontinued operation in the Consolidated Financial Statements.
	•	In October 2003, E.ON Energie transferred its 5.26 percent stake in VNG to E.ON Ruhrgas, which already owned an interest in this Leipzig-based gas distributor. In December 2003, E.ON Ruhrgas agreed to sell 32.1 percent of VNG to EWE, and offered its remaining 10.0 percent stake in VNG to eleven municipalities in eastern Germany. These sales were subject to the fulfillment of a number of conditions and were completed in January 2004.
	•	In November 2003, E.ON Energie and E.ON Ruhrgas sold their respective 22.0 percent stakes in Bayerngas to the municipal utilities of the cities of Munich, Augsburg, Regensburg and Ingolstadt, and to the city of Landshut.
	•	In November 2003, E.ON Energie sold its 100 percent interest in E.ON-Energiebeteiligungs-Gesellschaft mbH to EWE. E.ON Energiebeteiligungs-Gesellschaft mbH held E.ON’s 32.36 percent interest in swb, comprising all of the shares previously held by E.ON Energie and E.ON Ruhrgas.
	•	In January 2004, E.ON Energie sold its 27.4 percent stake in EWE to EWE’s majority shareholders Energieverband Elbe-Weser Beteiligungsholding GmbH and Weser-Ems Energiebeteiligungen GmbH.

16

---

Table of Contents

	•	In the Pan-European Gas market unit, E.ON intends to leverage its increased gas operations to improve its negotiating position with producers of natural gas, and to take advantage of pan-European gas arbitrage opportunities. For information about E.ON’s planned capital investment in E.ON Ruhrgas, see “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.”
	•	In the Central Europe market unit, E.ON expects to benefit from joint market management with regional energy companies, the integration of continental European gas trading activities and the sharing of technical expertise among the power and gas businesses. In order to integrate the Company’s continental European gas trading activities conducted by D-Gas B.V. (“D-Gas”), E.ON Energie transferred their gas trading operations to E.ON Ruhrgas in 2004.
	•	In the U.K. market unit, E.ON intends to use the Pan-European Gas division to enhance E.ON UK’s gas supply and gas storage options, as well as support its trading activities. An important first step was the conclusion of a 10-year gas supply contract between E.ON Ruhrgas and E.ON UK. E.ON Ruhrgas started supplying E.ON UK with gas in October 2004.
	•	In the Nordic market unit, E.ON also intends to use the Pan-European Gas market unit to enhance Sydkraft’s gas supply options and expects to be able to use a joint approach for future gas infrastructure

17

---

Table of Contents

		development. E.ON Ruhrgas and Sydkraft have also entered into a gas supply contract, pursuant to which E.ON Ruhrgas will start to supply Sydkraft with natural gas in autumn 2005.

	On.top

	•	Central Europe, led by E.ON Energie AG;
	•	Pan-European Gas, led by E.ON Ruhrgas AG;
	•	U.K., led by E.ON UK plc;
	•	Nordic, led by E.ON Nordic AB; and
	•	U.S. Midwest, led by LG&E Energy LLC.

18

---

Table of Contents

	•	The transfer by E.ON Energie to E.ON Ruhrgas of its:

	•	67.7 percent interest in Thüga;
	•	up to 40.0 percent interest in the Austrian company RAG Beteiligungs-Aktiengesellschaft, which owns a 75 percent share in the Austrian exploration and production company Rohöl-Aufsuchungs Aktiengesellschaft (to be completed in 2005);
	•	18.8 percent interest in the Latvian gas supplier JSC Latvijas Gaze;
	•	14.3 percent interest in the Lithuanian gas distributor AB Lietuvos Dujos; and its
	•	gas trading business D-Gas.

	•	The transfer by E.ON Ruhrgas to E.ON Energie of its downstream gas activities in the Czech Republic and Hungary, including its:

	•	4.45 percent interest in the Czech gas distribution company Jihomoravská plynárenská a.s. (“JMP”);
	•	27.6 percent interest in the Czech gas distribution company Západoceská plynárenská a.s. (“ZCP”);
	•	24.0 percent interest in the Czech gas distribution company Prazská plynárenská Holding a.s. (“PPH”);
	•	0.05 percent interest in the Czech gas distribution company Prazská plynárenská a.s. (“PP”);
	•	14.3 percent interest in the Czech gas distribution company Stredoceska plynárenská a.s. (“STP”);
	•	9.57 percent interest in the Czech gas distribution company Severomoravská plynárenská a.s. (“SMP”);
	•	16.52 percent interest in the Czech gas distribution company Východoceská plynárenská a.s. (“VCP”);
	•	49.8 percent interest in the Hungarian gas distribution company Déldunántuli Gázszolgáltató Részvenytársaság (“DDGÁZ”); and its
	•	16.3 percent interest in the Hungarian gas distribution company Fövárosi Gázmüvek Részvénytársaság (“FÖGÁZ”).

	•	The transfer by E.ON Energie to E.ON AG of its 100 percent interest in E.ON Scandinavia (which has since been re-named E.ON Nordic), including its:

	•	55.2 percent interest in Sydkraft, including Sydkraft’s interest in Graninge AB (“Graninge”) and its interest in the Baltic Cable; and a
	•	65.6 percent interest in E.ON Finland.

19

---

Table of Contents

	Strategy

	•	Creating value from the convergence of European energy markets (e.g., as the United Kingdom becomes a net importer of gas and can take advantage of greater pipeline capacity connecting it to continental Europe, E.ON will be able to supply its retail gas business in the United Kingdom from its Pan-European Gas supply business).
	•	Creating value from the convergence of the electricity and gas value chains (e.g., offering retail electricity and gas customers energy from a single source), thus providing E.ON with opportunities to realize economies of scale in servicing costs while increasing customer loyalty, thus reducing its customer “churn rate”.
	•	Enhancing operational performance through identifying and transferring best practice for common activities throughout the Group’s different market units (e.g., effective programs for enhancing E.ON’s electricity generation, distribution and retailing businesses).
	•	Improving the Group’s competitive position in its target markets through pursuing selective investments which contribute to these objectives or provide stand alone value creation opportunities, as described below; and
	•	Tapping value-enhancing growth potential in new markets such as Russia and Italy.

	•	Central Europe — Fortifying strong market positions and developing new growth potential through:

	•	consolidation of distribution activities and capitalizing on opportunities from power-gas convergence;
	•	re-investment in power generation to maintain the strong market position;
	•	hedging exposure to price risks through vertical integration of generation and distribution operations; and
	•	participation in the privatization of power and downstream gas companies in eastern Central Europe, as well as selective investments in power generation.

	•	Pan-European Gas — Strengthening and diversifying E.ON Ruhrgas’ current position through:

	•	selective equity investments in gas production in the North Sea and Russia;
	•	participation in infrastructure projects to enhance gas supply position in Europe; and
	•	selective acquisitions of mid- and downstream companies in Europe.

	•	U.K. — Enhancing profitability of the U.K. businesses through:

	•	investing in flexible generation assets and low carbon intensive generating technologies, such as Combined Cycle Gas Turbine (“CCGT”), to maintain a low cost hedge for changes in retail electricity demand;
	•	investing in the generation of power from renewable resources to capture value from the British government’s renewable obligation mandate; and
	•	investing in gas storage assets to hedge against potentially volatile gas price movements as the United Kingdom starts to become a net importer of gas.

20

---

Table of Contents

	•	Nordic — Strengthening E.ON’s position in a consolidating market through:

	•	expanding presence in power generation;
	•	enhancing scale through synergistic acquisitions in distribution and district heating; and
	•	continued participation in gas supply and infrastructure developments.

	•	U.S. Midwest — Focusing on optimizing LG&E Energy’s current operations in Kentucky and delivering additional performance improvements. This could include investments in generation capacity if the demand for electricity grows and the U.S. regulatory authorities enable the Company to earn a return on investment that meets its stringent criteria.

21

---

Table of Contents

22

---

Table of Contents

23

---

Table of Contents

24

---

Table of Contents

			2004								2003
			(€ in								(€ in
			millions)				%				millions)				%
Central Europe(1)(2)				20,752				42.3				19,253				41.5
Pan-European Gas(3)				14,426				29.4				12,973				27.9
U.K				8,490				17.3				7,923				17.1
Nordic(4)				3,347				6.8				2,824				6.1
U.S. Midwest(2)				1,913				3.9				1,971				4.2
Corporate Center(2)(5)				(813	)			(1.7	)			(596	)			(1.3	)
	Core Energy Business			48,115				98.0				44,348				95.5
	Other Activities(2)(6)			988				2.0				2,079				4.5
Total Revenues(7)				49,103				100.0				46,427				100.0

(1)	Includes electricity taxes of €1,051 million in 2004 and €1,015 million in 2003.
(2)	Excludes the sales of certain activities now accounted for as discontinued operations. For more details, see “Item 5. Operating and Financial Review and Prospects — Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(3)	Includes the sales of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales include natural gas and electricity taxes of €2,923 million in 2004 and €2,555 million in 2003.
(4)	Sales include electricity and natural gas taxes of €395 million in 2004 and €324 million in 2003.
(5)	Includes primarily the parent company and effects from consolidation, as well as the results of the former telecommunications division, as explained above.
(6)	Includes sales of Viterra and sales of Degussa until January 2003, prior to its deconsolidation. For more details, see “— Other Activities — Degussa,” “Item 5. Operating and Financial Review and Prospects — Overview” and Note 4 of the Notes to Consolidated Financial Statements.
(7)	Excludes intercompany sales.

			2003								2002
			(€ in								(€ in
			millions)				%				millions)				%
E.ON Energie(1)(2)				22,642				48.7				19,142				52.3
Ruhrgas(3)				12,085				26.1				—				—
Powergen(2)(4)				9,894				21.3				4,422				12.1
Other/consolidation(2)(5)				(273	)			(0.6	)			81				0.2
	Core Energy Business			44,348				95.5				23,645				64.6
Viterra(2)				1,085				2.3				1,214				3.3
Degussa(2)(6)				994				2.2				11,765				32.1
	Other Activities			2,079				4.5				12,979				35.4
Total Revenues(7)				46,427				100.0				36,624				100.0

(1)	Sales include electricity taxes of €1,371 million in 2003 and €933 million in 2002.
(2)	Excludes the sales of certain activities now accounted for as discontinued operations. For more details, see “Item 5. Operating and Financial Review and Prospects — Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(3)	Includes the sales of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales for the period include natural gas taxes of €2,525 million.

25

---

Table of Contents

(4)	Includes the sales of the Powergen Group from the date of consolidation on July 1, 2002.
(5)	Includes primarily the parent company and effects from consolidation, as well as the results of the former telecommunications division.
(6)	In 2003, includes sales of Degussa for the month of January only, prior to its deconsolidation. For more details, see “— Other Activities — Degussa”, “Item 5. Operating and Financial Review and Prospects — Overview” and Note 4 of the Notes to Consolidated Financial Statements.
(7)	Excludes intercompany sales.

	Overview

	•	In January 2004, E.ON Energie sold its 4.99 percent shareholding in the Spanish utility Union Fenosa S.A. (“Union Fenosa”) on the market.
	•	In June 2003, the general assembly of E.ON Bayern AG (“E.ON Bayern”) passed a resolution authorizing E.ON Energie, its controlling shareholder, to use a squeeze out procedure to acquire that portion of E.ON Bayern stock held by minority shareholders. Following registration of the acquired shares in the commercial register on July 1, 2004, E.ON Energie now holds 100.0 percent of E.ON Bayern.

26

---

Table of Contents

	•	In October 2004, E.ON Energie qualified as “preferred bidder” for the acquisition of a majority stake in the Romanian electricity distribution company Electrica Moldova S.A. (“Electrica Moldova”) from the Romanian government. E.ON Energie currently expects to sign an agreement in the first half of 2005, and to close the transaction in the second half of 2005. In 2003, the company sold approximately 4.1 TWh of electricity to 1.3 million customers.
	•	In December 2004, E.ON Energie increased its stake in the German regional electricity distribution company Avacon by 13.1 percent to 69.6 percent in a multistage process involving acquisition of the intermediate holding companies Ferngas Salzgitter GmbH (“Ferngas Salzgitter”) and FSG Holding GmbH (“FSG Holding”). E.ON Energie increased its stake in FSG Holding to 100 percent by acquiring a 10.0 percent interest from Bayerische Landesbank and the remaining 90.0 percent from three Group companies (E.ON Ruhrgas’ RGE Holding GmbH (45.0 percent), Thüga-Konsortium Beteiligungs GmbH (35.0 percent) and Thüga (10.0 percent)). In addition, E.ON Energie purchased direct shareholdings in Ferngas Salzgitter from Brigitta Erdgas und Erdöl GmbH (“BEB”) (13.0 percent), Erdgas-Verkaufs-Gesellschaft Münster (“EGM”) (13.0 percent) and RGE Holding GmbH (39.0 percent). Following these acquisitions, FSG Holding was merged into E.ON Energie and Ferngas Salzgitter into Avacon.
	•	During 2004, Thüga transferred minority shareholdings in several German municipal utilities in Thuringia to E.ON Energie. For more information, see “— Pan-European Gas — Downstream Shareholdings — Thüga.”
	•	During 2004, E.ON Energie signed agreements to increase its stake in DDGÁZ to 50.01 percent, pending approval by the Hungarian authorities.
	•	In February 2005, E.ON Energie acquired 67.0 percent stakes in each of the two Bulgarian electricity distribution companies Elektrorazpredelenie Varna and Elektrorazpredelenie Gorna Oryahovitza. The companies operate in northeastern Bulgaria. In 2004, the companies sold an aggregate of approximately 5 TWh of electricity to 1.1 million customers.

•	Leading entity for the management and coordination of the group activities.
•	Centralized strategic, controlling and service functions.

	Western Europe

•	Power generation by conventional power plants.
•	Waste incineration.
•	Renewables.
•	District heating.
•	Industrial power plants.

•	Power generation by nuclear power plants.

•	Power generation by hydroelectric power plants.

•	Power generation by conventional power plants.
•	District heating.

•	Operation of high voltage grids (380 kilovolt-110 kilovolt).
•	System operation, including provision of regulating and balancing power.

27

---

Table of Contents

•	Supply of electricity and energy services to large industrial customers, as well as to regional and municipal distributors.
•	Centralized wholesale functions.
•	Optimization of energy procurement costs.
•	Physical energy trading and trading of energy-based financial instruments and related risk management.
•	Optimization of the value of the power plants’ assets in the market place.
•	Emissions trading.

•	Distribution and sale of electricity, gas, heat and water to retail customers.
•	Energy support services.
•	Waste incineration.

•	Customer service and electricity and heat supply to utilities and industrial customers in the Ruhr region.

	Eastern Europe

•	Generation, distribution, marketing and sale of electricity and gas in Hungary through its group companies.

•	Distribution, marketing and sale of electricity and gas in the Czech Republic through its group companies.

•	Distribution, marketing and sale of electricity in Slovakia.

•	Group internal and external consulting and planning services in the energy sector.
•	Marketing of expertise in the area of conventional, renewable, cogeneration and nuclear power generation and pipeline business.

•	Infrastructure services.

(1)	The remaining 43.0 percent is held by E.ON Ruhrgas.

28

---

Table of Contents

	Operations

Generation:		the production of electricity at power stations;
Transmission:		the bulk transfer of electricity across an interregional power grid, which consists mainly of overhead transmission lines, substations and some underground cables (at this level there is a market for bulk trading of electricity, through which sales and purchases of electricity are made between generators, regional distributors, and other suppliers of electricity);
Distribution and Sale:		the transfer and sale of electricity from the interregional power grid and its delivery, across local distribution systems, to customers; and
Trading:		the buying and selling of electricity and related products for purposes of portfolio optimization, arbitrage and risk management.

				2004				2003
				million				million				%
Sources of Power				kWh				kWh(1)				Change
Own production					131,278				137,107				-4.3
Purchased power					123,035				103,907				+18.4
	from power stations in which E.ON Energie has an interest of 50 percent or less				11,223				10,564				+6.2
	from other suppliers				111,812				93,343				+19.8
Total power procured(2)					254,313				241,014				+5.5
Power used for operating purposes, network
		losses and pump storage			(10,239	)			(9,234	)			+10.9
		Total			244,074				231,780				+5.3

(1)	Adjusted to reflect the new market unit structure.
(2)	Excluding physically-settled electricity trading activities at EST. EST’s physically-settled electricity trading activities amounted to 110,914 million kWh and 138,981 million kWh in 2004 and 2003, respectively.

29

---

Table of Contents

Total

Total

2004

2003

%

million

million

Change in

Sale of Power(1) to

kWh

kWh(2)

Total

Non-consolidated interregional, regional and municipal utilities

130,862

129,814

+0.8

Industrial and commercial customers

72,077

62,554

+15.2

Residential and small commercial customers

41,135

39,412

+4.4

Total

244,074

231,780

+5.3

(1)	Excluding physically-settled electricity trading activities at EST. EST’s physically-settled electricity trading activities amounted to 110,914 million kWh and 138,981 million kWh in 2004 and 2003, respectively.
(2)	Adjusted to reflect the new market unit structure.

	Power Generation

30

---

Table of Contents

							Capacity Attributable
			Total				to E.ON Energie
			Capacity												Start-up
Power Plants			Net MW				%(1)				MW				Date
Nuclear
Brokdorf				1,370				80.0				1,096				1986
Brunsbüttel				771				33.3				257				1976
Emsland				1,329				12.5				166				1988
Grafenrheinfeld				1,275				100.0				1,275				1981
Grohnde				1,360				83.3				1,133				1984
Gundremmingen B				1,284				25.0				321				1984
Gundremmingen C				1,288				25.0				322				1984
Isar 1				878				100.0				878				1977
Isar 2				1,400				75.0				1,050				1988
Krümmel				1,260				50.0				630				1983
Unterweser				1,345				100.0				1,345				1978
	Total			13,560								8,473
Lignite
Buschhaus				350				100.0				350				1985
Kassel				33				50.0				17				1988
Lippendorf S				891				50.0				446				1999
Schkopau				900				55.6				500				1995
	Total			2,174								1,313
Hard Coal
Bexbach 1				714				11.1				79				1983
Buer (CHP)				70				100.0				70				1985
Datteln 1				95				100.0				95				1964
Datteln 2				95				100.0				95				1964
Datteln 3				113				100.0				113				1969
Farge				343				100.0				343				1969
GKW Weser/ Veltheim 2				93				74.0				69				1965
GKW Weser/ Veltheim 3				320				74.0				237				1970
Heyden				865				100.0				865				1987
Kiel				323				50.0				162				1970
Knepper C				345				100.0				345				1971
Maasvlakte 1 (NL)(2)				520				100.0				520				1988
Maasvlakte 2 (NL)(2)				520				100.0				520				1987
Mehrum C				690				50.0				345				1979
Rostock				508				50.4				256				1994
Scholven B				345				100.0				345				1968
Scholven C				345				100.0				345				1969

31

---

Table of Contents

							Capacity Attributable
			Total				to E.ON Energie
			Capacity												Start-up
Power Plants			Net MW				%(1)				MW				Date
Hard Coal (continued)
Scholven D				345				100.0				345				1970
Scholven E				345				100.0				345				1971
Scholven F				676				100.0				676				1979
Shamrock				132				100.0				132				1957
Staudinger 1				249				100.0				249				1965
Staudinger 3				293				100.0				293				1970
Staudinger 5				510				100.0				510				1992
Wilhelmshaven				747				100.0				747				1976
Zolling				449				100.0				449				1986
	Total			10,050								8,550
Natural Gas
Burghausen				120				100.0				120				2001
Emden GT				52				100.0				52				1972
Erfurt				75				32.9				25				—
Franken I/1				383				100.0				383				1973
Franken I/2				440				100.0				440				1976
Galileistraat (NL)				209				100.0				209				1988
Gendorf				40				50.0				20				2002
GKW Weser/ Veltheim 4 GT				400				74.0				296				1975
Grenzach-Wyhlen				40				69.9				28				2004
GT Ummeln				60				74.0				44				1973
Huntorf				290				100.0				290				1977
Irsching 3				415				100.0				415				1974
Jena-Süd				199				73.0				145				1996
Kirchlengern				180				62.9				113				1980
Kirchmöser				178				100.0				178				1994
Leiden (NL)				81				100.0				81				1986
Maasvlakte UCML (NL)				70				100.0				70				2004
Obernburg				100				50.0				50				1995
Robert Frank 4				487				100.0				487				1973
RoCa 3 (NL)(2)				220				100.0				220				1996
Staudinger 4				622				100.0				622				1977
The Hague (NL)				78				100.0				78				1982
Other (<40 MW installed capacity)				313				n/a				283				n/a
	Total			5,052								4,649
Fuel Oil
Audorf				87				100.0				87				1973
Hausham GT 1				25				100.0				25				1982
Hausham GT 2				25				100.0				25				1982
Hausham GT 3				25				100.0				25				1982

32

---

Table of Contents

							Capacity Attributable
			Total				to E.ON Energie
			Capacity												Start-up
Power Plants			Net MW				%(1)				MW				Date
Fuel Oil (continued)
Hausham GT 4				25				100.0				25				1982
Ingolstadt 3				386				100.0				386				1973
Ingolstadt 4				386				100.0				386				1974
Itzehoe				87				100.0				87				1972
Wilhelmshaven				56				100.0				56				1973
Zolling GT 1				25				100.0				25				1976
Zolling GT 2				25				100.0				25				1976
	Total			1,152								1,152
Hydroelectric
Aufkirchen				27				100.0				27				1924
Bittenbrunn				20				100.0				20				1969
Bergheim				24				100.0				24				1970
Braunau-Simbach				100				50.0				50				1953
Egglfing				81				100.0				81				1944
Eitting				26				100.0				26				1925
Ering				73				100.0				73				1942
Erzhausen				220				100.0				220				1964
Feldkirchen				38				100.0				38				1970
Gars				25				100.0				25				1938
Geisling				25				100.0				25				1985
Happurg				160				100.0				160				1958
Hemfurth				20				100.0				20				1915
Jochenstein				132				50.0				66				1955
Kachlet				54				100.0				54				1927
Langenprozelten				164				100.0				164				1975
Neuötting				26				100.0				26				1951
Nußdorf				48				76.5				37				1982
Oberaudorf-Ebbs				60				50.0				30				1992
Passau-Ingling				86				50.0				43				1965
Pfrombach				22				100.0				22				1929
Reisach				105				100.0				105				1955
Rosenheim				35				100.0				35				1960
Roßhaupten				46				100.0				46				1954
Schärding-Neuhaus				96				50.0				48				1961
Stammham				23				100.0				23				1955
Straubing				22				100.0				22				1994
Tanzmühle				28				100.0				28				1959
Teufelsbruck				25				100.0				25				1938
Töging				85				100.0				85				1924
Vohburg				23				100.0				23				1992
Walchensee				124				100.0				124				1924

33

---

Table of Contents

							Capacity Attributable
			Total				to E.ON Energie
			Capacity												Start-up
Power Plants			Net MW				%(1)				MW				Date
Hydroelectric (continued)
Waldeck 1				120				100.0				120				1931
Waldeck 2				440				100.0				440				1975
Wasserburg				24				100.0				24				1938
Other run-of-river, pump storage and storage				781				n/a				734				n/a
	Total			3,408								3,113
Others				281								191
Total				35,677								27,441
Mothballed/ Shutdown/ Reduced
Arzberg 5				104				100.0				104				1966
Arzberg 6				252				100.0				252				1974
Arzberg 7				121				100.0				121				1979
Aschaffenburg 21				150				100.0				150				1963
Aschaffenburg 31				143				100.0				143				1971
Emden 4				433				100.0				433				1972
Franken II/1				206				100.0				206				1966
Franken II/2				206				100.0				206				1967
Irsching 1				151				100.0				151				1969
Irsching 2				312				100.0				312				1972
Offleben				280				100.0				280				1988
Pleinting 1				292				100.0				292				1968
Pleinting 2				402				100.0				402				1976
Rauxel 2				164				100.0				164				1967
Scholven G(3)				672				50.0				336				1974
Scholven H(3)				672				50.0				336				1975
Schwandorf B(4)				99				100.0				99				1959
Schwandorf C(4)				99				100.0				99				1961
Schwandorf D				292				100.0				292				1972
Stade				640				66.7				417				1972
Staudinger 2				249				100.0				249				1965
Westerholt 1(5)				138				100.0				138				1959
Westerholt 2(5)				138				100.0				138				1961
	Total			6,215								5,320

(1)	Percentage of total capacity attributable to E.ON Energie.
(2)	Power station operated by E.ON Benelux under long-term cross-border leasing arrangement.
(3)	Not included in October 2000 shutdown program discussed below.
(4)	Closed down before the shutdown program discussed below; already dismantled.
(5)	Dismantling in process and finished, respectively.

(CHP)	Combined Heat and Power Generation.

(NL)	Located in the Netherlands.

34

---

Table of Contents

35

---

Table of Contents

	•	Nuclear Phase-out: The operators of the nuclear plants have agreed to a specified number of operating kWh for each nuclear plant. This number has been calculated on the basis of 32 years of plant operation using a high load factor. The operators may trade allotted kWh among themselves. This means that if one nuclear plant closes before it has produced the allotted amount of kWh, the remaining kWh may be transferred to another nuclear power plant.
	•	Termination of Fuel Reprocessing: The transport of spent fuel elements for reprocessing will be allowed until June 30, 2005 at the latest. Following this deadline, the operators must store spent fuel in interim facilities on the premises of the nuclear plants. Such storage requires the approval and construction of interim storage facilities. The construction of E.ON’s interim storage facilities is progressing and the Company expects to finish construction by the end of 2006. For the period from July 2005 until construction is finished, the Company plans to store the spent fuel elements at the plants in so-called in-plant fuel pools. The Company expects the capacity of these fuel pools will be sufficient to store the spent fuel elements until the storage facilities are completed. E.ON believes the transition period from reprocessing to on-site storage allows it to satisfy its obligations under its reprocessing contracts with Cogema and BNFL.

	•	The accrual period for decommissioning costs has been extended from 19 to 25 years. This requires E.ON Energie to release a portion of the provisions it had previously established for tax purposes based on the shorter accrual period.
	•	Certain parts of the provisions concerning MOX fuel elements have to be reversed. The costs must be capitalized as incurred instead.

36

---

Table of Contents

	•	Those portions of the provisions that have been established in past years relating to the financing and operational costs for final storage of nuclear waste have been disallowed. The costs of these items will now be tax-deductible when they are actually expensed.
	•	In accordance with the new general rule for long-term provisions, all types of provisions for nuclear power must now be discounted. The Tax Relief Act sets the discount rate at 5.5 percent. This also applies to provisions that have previously been established, which must be released to the extent they do not reflect this discounting.

37

---

Table of Contents

	Transmission

38

---

Table of Contents

	Distribution and Sale

			Germany				Germany
			2004				2003				%
			million				million				Change
Sale of Power to			kWh				kWh(1)				in Total
Non-consolidated interregional, regional and municipal utilities				112,575				111,243				+1.2
Industrial and commercial customers(2)				56,274				51,925				+8.4
Residential and small commercial customers				30,352				31,086				-2.4
	Total			199,201				194,254				+2.5

(1)	Adjusted to reflect the new market unit structure.
(2)	The increase in the sale of power to industrial and commercial customers is primarily attributable to the gain of new customers.

39

---

Table of Contents

40

---

Table of Contents

	Trading

			2004				2003				%
			million				million				Change
Trading of Power			kWh				kWh				in Total
Power sold(1)				162,671				208,939				-22.1
Power purchased(1)				146,755				202,680				-27.6
	Total			309,426				411,619				-24.8

(1)	Any negative balance of power purchased as compared to power sold is satisfied by the delivery of electricity generated by E.ON Energie.

	Other

41

---

Table of Contents

42

---

Table of Contents

	Competitive Environment

43

---

Table of Contents

	Overview

	•	In October 2004, E.ON Ruhrgas signed an agreement with the Romanian government for the acquisition of a 51.0 percent stake in the Romanian gas supplier Distrigaz Nord. Distrigaz Nord is active in gas distribution in northern Romania. The transaction is expected to close in the first half of 2005.
	•	In November 2004, ERI signed an agreement for the acquisition of 75.0 percent minus 1 share each of the gas trading and gas storage businesses of the Hungarian oil and gas company MOL and its 50.0 percent interest in the gas import subsidiary Panrusgáz. In addition, MOL received a put option to sell to ERI up to 75.0 percent minus 1 share of its gas transmission business and put options to sell to ERI the remaining 25.0 percent plus 1 share in the MOL gas trading and gas storage companies. The transaction is subject to antitrust approval and is expected to close in the second half of 2005.
	•	In December 2004, E.ON Ruhrgas made use of its right of first refusal to purchase an additional 4.0 percent interest in the project company Interconnector (UK) Limited (“Interconnector”), which operates an undersea gas pipeline linking the United Kingdom and Belgium, from another shareholder. The transaction is expected to close in the first quarter of 2005.

44

---

Table of Contents

	Operations

Supply:		The purchase of natural gas under long-term contracts with foreign and domestic producers, including the Russian gas company Gazprom, the world’s largest gas producer in terms of volume, in which E.ON Ruhrgas holds a small shareholding. E.ON Ruhrgas also engages in gas exploration and production activities and, to supplement its supply as well as its sales business, in a limited amount of trading activities;
Transmission System:		The transmission of gas within Germany via a network of approximately 11,000 km of pipelines in which E.ON Ruhrgas holds an interest;
Storage:		The storage of gas in a number of large underground natural gas storage facilities; and
Sales:		The sale of gas within Germany to regional and supraregional distributors, municipal utilities and industrial customers, as well as the delivery of gas to a number of customers in other European countries.

											February-
			Total 2004				Total 2003				December 2003
Purchases			billion kWh		%		billion kWh		%		billion kWh		%
Imports			537.4		83.2		506.6		82.6		446.2		82.5
German sources			108.6		16.8		106.8		17.4		94.7		17.5
	Total		646.0		100.0		613.4		100.0		540.9		100.0

Sales
Domestic distributors			328.7		51.2		326.7		52.9		282.0		52.8
Domestic municipal utilities			156.1		24.3		159.5		25.8		136.3		25.5
Domestic industrial customers			69.0		10.8		66.0		10.7		59.3		11.1
Sales abroad			87.6		13.7		65.2		10.6		56.9		10.6
	Total		641.4		100.0		617.4		100.0		534.5		100.0

45

---

Table of Contents

																			February-
			Total 2004								Total 2003								December 2003
Sources of Gas			billion kWh				%				billion kWh				%				billion kWh				%
Germany				108.6				16.8				106.8				17.4				94.7				17.5
Russia				201.3				31.2				186.7				30.4				167.7				31
Norway				169.6				26.3				174.4				28.4				156.4				28.9
The Netherlands				124.1				19.2				100.6				16.4				81.6				15.1
United Kingdom				22.8				3.5				27.3				4.5				24.8				4.6
Denmark				19.3				3.0				17.6				2.9				15.7				2.9
Others(1)				0.3				0.0				—				—				—				—
	Total			646.0				100.0				613.4				100.0				540.9				100.0

(1)	Italy and France.

46

---

Table of Contents

47

---

Table of Contents

	Trading

48

---

Table of Contents

	Exploration and Production

	Liquefied Natural Gas

	Transmission System and Storage

49

---

Table of Contents

		E.ON
		Ruhrgas Share
Project Company		%
DEUDAN (DEUDAN — Deutsch/ Dänische Erdgastransport-Gesellschaft mbH & Co. KG)			25.0
EGL (Etzel Gas-Lager Statoil Deutschland GmbH & Co)			74.8
GHG (GHG-Gasspeicher Hannnover Gesellschaft mbH)			13.2
MEGAL (MEGAL GmbH Mittel-Europäische-Gasleitungsgesellschaft)			50.0
METG (Mittelrheinische Erdgastransportleitungsgesellschaft mbH)(1)			100.0
NETG (Nordrheinische Erdgastransportleitungsgesellschaft mbH & Co. KG)			50.0
NETRA (NETRA GmbH Norddeutsche Erdgas Transversale & Co. KG)			41.7
TENP (Trans Europa Naturgas Pipeline GmbH)			51.0

(1)	As of January 1, 2004, the wholly-owned project company Süddeutsche Erdgas Transport Gesellschaft mbH (SETG) was merged into METG.

50

---

Table of Contents

							Maintained
			Total				by E.ON Ruhrgas
Pipelines			km				km
Owned by E.ON Ruhrgas				6,456				6,185
Co-owned pipelines				1,550				605
DEUDAN (PC)				110				0
EGL (PC)				67				67
MEGAL (PC)				1,080				1,080
METG (PC)				425				425
NETG (PC)				285				144
NETRA (PC)				341				106
TENP (PC)				966				966
Companies in which E.ON Ruhrgas holds a stake through its subsidiaries ERI and Thüga				—				2,015
Owned by third parties				—				1,072
	Total in Germany			11,280				12,665

(PC)	project company

51

---

Table of Contents

52

---

Table of Contents

																			Installed Capacity
																			of Compressor Units
															Compressor Units				Monitored and
											Total Installed				Monitored and				Maintained
			Compressor				Compressor				Capacity				Maintained by				by E.ON Ruhrgas
Owned by			Stations				Units				MW				E.ON Ruhrgas				MW
E.ON Ruhrgas (transportation and storage)				15				44				384				44				384
DEUDAN (PC) (transportation)				2				4				16				0				0
EGL (PC) (storage)				1				2				13				0				0
GHG Hannover (PC) (storage)				1				3				4				0				0
MEGAL (PC) (transportation)				5				17				179				17				179
METG (PC) (transportation)				2				9				99				9				99
NETG (PC) (transportation)				2				5				50				2				20
NETRA (PC) (transportation)				1				2				21				0				0
TENP (PC) (transportation)				4				15				151				15				151
	Total in Germany			33				101				917				87				833

(PC)	project company

53

---

Table of Contents

							E.ON Ruhrgas’
							Share in						E.ON Ruhrgas’
			E.ON Ruhrgas’				Maximum						Share in
			Share in				Withdrawal						Storage Facility
			Working				Rate						or in the				Operated by
			Capacity				thousand						Project Company				E.ON
Underground Storage Facilities			million m3				m3/hour				Owned by		%				Ruhrgas
Bierwang(P)				1,300				1,200			E.ON Ruhrgas			100.0				Yes
Empelde(C)				19				39			GHG-Gasspeicher			13.2				—
											Hannover Gesellschaft mbH (PC)
Epe(C)				1,661				2,450			E.ON Ruhrgas			100.0				Yes
Eschenfelden(P)				48				87			E.ON Ruhrgas/N-ERGIE AG			66.7				Yes
Etzel(C)				387				987			Etzel Gas-Lager			74.8				—
											Statoil Deutschland GmbH & Co(PC)
Hähnlein(P)				80				100			E.ON Ruhrgas			100.0				Yes
Krummhörn(C)(1)				0				0			E.ON Ruhrgas			100.0				Yes
Sandhausen(P)				15				23			E.ON Ruhrgas/Gasversorgung			50.0				Yes
											Süddeutschland GmbH
Stockstadt(P)				135				135			E.ON Ruhrgas			100.0				Yes
Breitbrunn(P)				965	(2)			520			RWE Dea AG/			Leased	(3)			Yes	(4)
											ExxonMobil
											Gasspeicher Deutschland
											GmbH(3)/ E.ON Ruhrgas (4)
Inzenham-West(P)				500				300			RWE Dea AG			Leased				—
Nüttermoor(C)				97				100			EWE AG			Leased				—
	Total			5,207				5,941

(C)	salt cavern

(P)	porous rock

(PC)	project company

(1)	Currently out of service for repairs/adjustments.
(2)	900 million m3 was contractually guaranteed in 2004; 965 million m3 is the current working gas capacity available to E.ON Ruhrgas.
(3)	Underground section.
(4)	Above ground part, particularly the storage compressor station.

54

---

Table of Contents

55

---

Table of Contents

	Sales

																			February-
			Total 2004								Total 2003								December 2003
Sale of Gas to:			billion kWh				%				billion kWh				%				billion kWh				%
Distributors				328.7				59.3				326.7				59.2				282.0				59.1
Municipal utilities				156.1				28.2				159.5				28.9				136.3				28.5
Industrial customers				69.0				12.5				66.0				11.9				59.3				12.4
	Total			553.8				100.0				552.2				100.0				477.6				100.0

56

---

Table of Contents

	Downstream Shareholdings

57

---

Table of Contents

	•	In May 2004, ERI and E.ON Energie started to simplify the shareholder structure of Avacon: ERI transferred its 39.0 percent stake in Ferngas Salzgitter, which had a 16.43 percent interest in Avacon, and its 45.0 percent stake in FSG Holding, which had a 25.0 percent stake in Ferngas Salzgitter, to E.ON Energie. For additional details, see “— Central Europe — Overview.”
	•	In May 2004, ERI acquired a 40.13 percent interest in the Slovakian company Nafta a.s. from RWE Gas AG and as part of a compulsory tender offer following this purchase acquired a further 0.14 percent of Nafta a.s.
	•	In August 2004, ERI acquired the remaining 25.0 percent of therminvest Sp.z o.o. (“therminvest”) from EWFE G.S. and now owns 100 percent of therminvest.
	•	In October 2004, as part of the privatization of the Lithanian gas distributor AB Lietuvos Dujos, ERI participated in a capital increase. As a result, ERI’s shareholding in AB Lietuvos Dujos increased by 3.21 percent to 38.91 percent.
	•	In November 2004, the gas trading business of Nova Naturgas AB (“Nova Naturgas”), in which ERI has a 29.59 percent interest, was sold to the Danish gas company DONG.
	•	In November 2004, ERI signed contracts to acquire shareholdings in certain businesses of the Hungarian gas company MOL. For details, see “— Overview.”
	•	During the second half of 2004, ERI increased its shareholding in the Polish district heating company Szczencinska Energetyke Cieplna Sp.z o.o. (“SECS”) by 5.76 percent to 32.0 percent through the acquisition of employee shares.

		Share held
		by ERI
Shareholding		%
Ferngas Nordbayern GmbH(1)			53.10
Gas-Union GmbH(1)			25.93
Saar Ferngas AG(1)			20.00
HEAG Südhessische Energie AG (HSE)(2)			21.21
EWR GmbH(2)			20.00
Stadtwerke Neuss Energie und Wasser GmbH(2)			15.00

(1)	Interest held via ERI’s fully-owned subsidiary RGE Holding GmbH.
(2)	As part of the internal restructuring described above, these shareholdings in municipal utilities are expected to be transferred to Thüga in 2005.

58

---

Table of Contents

		Share held
		by ERI
Shareholding		%
Gasnor AS, Norway			14.00
Nova Naturgas AB, Sweden			29.59
Gasum Oy, Finland			20.00
AS Eesti Gaas, Estonia			33.66
JSC Latvijas Gaze, Latvia			47.23
AB Lietuvos Dujos, Lithuania			38.91
therminvest Sp.z o.o., Poland			100.00
Inwestycyjna Spolka Energetyczna Sp.z o.o. (IRB), Poland			50.00
Szczencinska Energetyka Cieplna Sp.z o.o. (SECS), Poland			32.00
EUROPGAS a.s., Czech Republic(1)			50.00
Colonia-Cluj-Napoca-Energie S.R.L. (CCNE), Romania			33.33
E.ON Ruhrgas Mittel- und Osteuropa GmbH(2)			100.0
Nafta a.s., Slovakia			40.27
S.C. Congaz S.A., Romania			28.59
Ekopur d.o.o., Slovenia(3)			100.00
SOTEG — Société de Transport de Gaz S.A., Luxembourg			20.00
CICG Holding S.A., Switzerland			4.00

(1)	EUROPGAS a.s. holds 50.0 percent of SPP Bohemia a.s. and an indirect interest of 48.18 percent of Moravské naftové doly a.s. (MND) in the Czech Republic.
(2)	The shareholding was transferred from E.ON Ruhrgas to ERI with effect from December 31, 2004, midnight. E.ON Ruhrgas Mittel- und Osteuropa GmbH has an indirect interest of 24.50 percent in SPP, Slovakia.
(3)	Ekopur d.o.o. holds 6.52 percent of Geoplin d.o.o. in Slovenia.

59

---

Table of Contents

	•	In January 2004, as part of a lease agreement, Thüga transferred its electricity supply operations in parts of Bavaria to E.ON Bayern with effect from January 1, 2004.
	•	In April 2004, Thüga acquired 100 percent of the Italian gas distribution and sales companies Metanifera Prealpina S.r.l. and Metanifera Prealpina com S.r.l., which together serve nearly 30,000 gas customers in Italy.
	•	In May 2004, Thüga acquired 100 percent of the Italian gas distributor Fin.Vicu-Group, which serves approximately 100,000 gas customers in Italy.
	•	In June 2004, Thüga acquired a 19.9 percent stake in the Udine-based Italian municipal utility AMGA Azienda Multiservizi S.p.A., which serves approximately 90,000 gas customers in Italy.
	•	In June 2004, Thüga acquired the remaining 25.0 percent stake in Delta Gas S.r.l., an Italian gas distribution company, and now holds all of the shares of this company.
	•	In December 2004, Thüga sold its 15.05 percent stake in MVV to EnBW as a result of an agreement between E.ON AG and EnBW.
	•	During 2004, Thüga transferred its shareholdings in the following five Thuringian municipal utilities to the German distributor TEAG, a majority shareholding of E.ON Energie: Energieversorgung Apolda GmbH (25.1 percent), Energieversorgung Greiz GmbH (24.5 percent), Energieversorgung Nordhausen GmbH (27.9 percent), Energiewerke Zeulenroda GmbH (24.5 percent) and Stadtwerke Weimar Stadtversorgungs-GmbH (25.1 percent).

	Other

60

---

Table of Contents

	Competitive Environment

61

---

Table of Contents

	Research and Development

	Overview

62

---

Table of Contents

	Operations

63

---

Table of Contents

			Total		Total
			2004		2003		%
Sources of Power			million kWh		million kWh		Change
Own production(1)			34,916		35,881		-2.7
Purchased power from power stations in which E.ON UK has an interest of 50 percent or less(1)			2,047		4,289		-52.3
Power purchased from other suppliers			47,087		53,622		-12.2
Power used for operating purposes, network losses and pump storage			(1,976)		(2,238)		+11.7
	Net power supplied(2)		82,074		91,554		-10.4

Sales of Power
Mass market sales (residential customers and small and medium sized enterprises)			36,189		37,450		-3.4
Industrial and commercial sales(3)			26,528		34,550		-23.2
Market sales			19,357		19,554		-1.0
	Net power sold(2)		82,074		91,554		-10.4

(1)	The decrease in power supplied by power stations in which E.ON UK has an interest of 50 percent or less is due to E.ON UK becoming the sole owner of the CDC power station in January 2004. This change also led to a corresponding increase in own production, partially offsetting the overall decrease in own production.
(2)	Excluding proprietary trading volumes. For information on proprietary trading volumes, see “— Energy Trading.”
(3)	During 2004, the industrial and commercial sales business focused on securing profitable customers, which resulted in lower sales volumes in 2004 compared with 2003.

			Total		Total
			2004		2003		%
Sources of Gas			million kWh		million kWh		Change
Long-term gas supply contracts			49,494		55,090		-10.2
Market purchases			126,400		115,581		+9.4
	Total gas supplied(1)		175,894		170,671		+3.1

Sale and Use of Gas
Gas used for own generation			39,023		37,167		+5.0
Sales to industrial and commercial customers			35,946		35,611		+0.9
Sales to retail mass market customers			66,221		66,788		-0.8
Market sales			34,704		31,105		+11.6
	Total gas used and sold(1)		175,894		170,671		+3.1

(1)	Excluding proprietary trading volumes. For information on proprietary trading volumes, see “— Energy Trading.”

64

---

Table of Contents

	Market Environment

65

---

Table of Contents

	•	In April 2002, the U.K. government enacted a renewables obligation requiring electricity retailers to source an increasing amount of the electricity they supply to retail customers from renewable sources. In the period from April 1, 2002 until March 31, 2003, this renewables obligation amounted to 3.0 percent of the power supplied by electricity retailers to their retail customers; in the period from April 1, 2003 until March 31, 2004, the renewables obligation increased to 4.3 percent; in the period from April 1, 2004 until March 31, 2005, the renewables obligation increased to 4.9 percent; and in the period from April 1, 2005 until March 31, 2006, the renewables obligation will increase to 5.5 percent, rising to a figure of 10.4 percent by 2010/2011. The government has announced its intention to increase the renewables obligation percentage to 15.4 percent by 2015/2016, though the increase has not yet been approved by Parliament. The requirement applies to all retail sales over a twelve-month period beginning on April 1 of each year, and Renewables Obligation Certificates (“ROCs”) are issued to generators as evidence of qualified sourcing. ROCs are tradeable, and retailers who fail to present Ofgem with ROCs representing the full amount of their renewables obligation are required to make a balancing payment in the amount of any shortfall into a buy-out fund. Receipts from the buy-out fund are re-distributed to holders of ROCs.
	•	To implement the EU’s Emissions Trading Directive, the United Kingdom introduced a greenhouse gas emissions allowance trading scheme at the beginning of 2005. This scheme will require companies to annually match carbon dioxide (CO2) emissions with allowances issued free of charge by the government. Carbon dioxide emissions from fossil fuel-fired power plants with a thermal input exceeding 20 MW are included in this scheme. During 2004, the government published a National Allocation Plan containing initial proposals for the allocation of emission allowances to current power plants, including those owned by E.ON UK. E.ON UK expects emissions allowances for its power plants to be allocated during 2005.
	•	The application in the United Kingdom of the EU Large Combustion Plant Directive may prevent coal-powered generation facilities that have not been fitted with specified sulphur oxide and nitrous oxide reduction measures from operating for more than a total of 20,000 hours starting in 2008.

	Energy Wholesale

66

---

Table of Contents

	Power Generation

							E.ON UK’s Share
			Total								Attributable
			Capacity								Capacity				Start-up
Power Plants			Net MW				%				MW				Date
Hard Coal
Ironbridge U1(1)				485				100.0				485				1970
Ironbridge U2(1)				485				100.0				485				1970
Kingsnorth U1(1)				485				100.0				485				1970
Kingsnorth U2(1)				485				100.0				485				1971
Kingsnorth U3(1)				485				100.0				485				1972
Kingsnorth U4(1)				485				100.0				485				1973
Ratcliffe U1(2)				500				100.0				500				1968
Ratcliffe U2(2)				500				100.0				500				1969
Ratcliffe U3(2)				500				100.0				500				1969
Ratcliffe U4(2)				500				100.0				500				1970
	Total			4,910								4,910
Natural Gas
Cottam Development Centre (CDC) Module(3)				400				100.0				400				1999
Connahs Quay U1				345				100.0				345				1996
Connahs Quay U2				345				100.0				345				1996

67

---

Table of Contents

							E.ON UK’s Share
			Total								Attributable
			Capacity								Capacity				Start-up
Power Plants			Net MW				%				MW				Date
Natural Gas (continued)
Connahs Quay U3				345				100.0				345				1996
Connahs Quay U4				345				100.0				345				1996
Corby Module				401				50.0				200				1993
	Total			2,181								1,980
Oil
Grain U1				650				100.0				650				1982
Grain U4				650				100.0				650				1984
	Total			1,300								1,300
Other (including hydroelectric and wind farms)
Grain Aux GT1				28				100.0				28				1979
Grain Aux GT4				27				100.0				27				1980
Kingsnorth Aux GT1				17				100.0				17				1967
Kingsnorth Aux GT4				17				100.0				17				1968
Ratcliffe Aux GT2				17				100.0				17				1967
Ratcliffe Aux GT4				17				100.0				17				1968
Taylors Lane GT2				68				100.0				68				1981
Taylors Lane GT3				64				100.0				64				1979
Hydroelectric				50				100.0				50				1962
Wind farms(4)				197				various				183				various
	Total			502								488
CHP schemes				587				100.0				587				various
Total Capacity				9,480								9,265
Shutdown/ Mothballed
Drakelow U9				333				100.0				333				1965
Drakelow U10				333				100.0				333				1965
Drakelow U12				333				100.0				333				1967
High Marnham U1				189				100.0				189				1959
High Marnham U2				189				100.0				189				1960
High Marnham U3				189				100.0				189				1960
High Marnham U4				189				100.0				189				1961
High Marnham U5				189				100.0				189				1962
Killingholme Mod 1				450				100.0				450				1992
Killingholme Mod 2				450				100.0				450				1993
	Total			2,844								2,844

(1)	Biomass material co-fired during 2004.
(2)	In November 2003, E.ON UK obtained permission from the responsible government agency to begin an 18 month trial co-burning petcoke, a mixture of coal and oil, at Ratcliffe power station.
(3)	In January 2004, E.ON UK acquired the outstanding 50.0 percent interest in the CDC Module from Siemens Power Ventures, becoming the sole owner of the plant.
(4)	Scroby Sands wind farm commissioned as of December 31, 2004.

68

---

Table of Contents

	Energy Trading

	•	Purchasing of coal, gas and oil for power stations;
	•	Dispatching generation and selling the electrical output and ancillary services provided by E.ON UK’s power stations;
	•	Purchasing gas and electricity as required for E.ON UK’s retail portfolio;
	•	Managing the net position and risks of E.ON UK’s generation and retail portfolio;
	•	Managing renewable obligations for the retail portfolio through long-term purchases and trading of ROCs;
	•	Purchasing and/or trading of other environmental products, including Levy Exempt Certificates (issued in relation to the U.K. Climate Change Levy) and emissions products (including carbon permits);

69

---

Table of Contents

	•	Trading of weather derivatives, which assist in hedging volume variability in E.ON UK’s retail business; and
	•	Achieving portfolio optimization and risk management.

		2004				2003				2004				2003
		Electricity				Electricity				Gas				Gas
Proprietary Trading Volumes		billion kWh				billion kWh				billion kWh(1)				billion kWh
Energy bought			20.9				20.2				86.55				153.75
Energy sold			20.9				20.2				86.55				153.75
Gross volume			41.8				40.4				173.1				307.5

(1)	Proprietary gas trading volumes decreased significantly in 2004, as risk limit restraints limited trading, reflecting both higher prices and higher volatility in the gas market in 2004.

	Retail

70

---

Table of Contents

	Distribution

71

---

Table of Contents

			Total				Total
			2004				2003				%
Distribution of Power to			million kWh				million kWh				Change
Large non-domestic customers(1)				26,610				13,684				+94.5
Domestic and small non-domestic customers(1)				30,583				15,665				+95.2
	Total			57,193				29,349				+94.9

(1)	The increase in volumes is primarily attributable to the first-time inclusion of Midlands Electricity.

	Asian Asset Management

	Midlands Electricity Non-Distribution Assets

72

---

Table of Contents

	Overview

73

---

Table of Contents

74

---

Table of Contents

	Operations

			Total 2004		Total 2003		%
Sources of Power			million kWh		million kWh		Change
Own generation			33,110		25,595		+29.4
Purchased power from jointly owned power stations			11,030		10,013		+10.2
Power purchased from outside sources			7,376		6,742		+9.4
Total power procured(1)			51,516		42,350		+21.6
Power used for operating purposes, network losses and pump storage			(2,054)		(1,806)		-13.7
	Total		49,462		40,544		+22.0

Sales of Power
Residential customers			9,132		6,613		+38.1
Commercial customers			14,454		13,496		+7.1
Sales partners(2)/Nordpool			25,876		20,435		+26.6
	Total(1)		49,462		40,544		+22.0

(1)	Excluding physically-settled electricity trading activities. Nordic’s physically-settled electricity trading activities (including both purchases and sales) amounted to 44 million kWh and 40 million kWh in 2004 and 2003, respectively.
(2)	Sales partners are co-owners in E.ON Nordic’s majority-owned power plants, primarily nuclear power plants, to which E.ON Nordic sells electricity at prices equal to the cost of production.

75

---

Table of Contents

			Total 2004		Total 2003		%
Sources of Gas			million kWh		million kWh		Change
Long-term gas supply contracts			9,252		9,014		+2.6
Market purchases			402		602		-33.2
	Total gas supplied		9,654		9,616		+0.4

Sale and Use of Gas
Gas used for own generation			2,539		2,637		-3.7
Sales to industrial and distribution customers			6,963		6,798		+2.4
Sales to residential customers			152		181		-16.0
Market sales			0		0		—
	Total gas used and sold(1)		9,654		9,616		+0.4

(1)	Total gas used and sold increased in 2004 due to the first-time full year inclusion of Graninge. This effect was, however, almost entirely offset by lower sales in the existing operations, mainly reflecting lower consumption of selected industrial customers and slightly higher average temperatures in 2004.

	Market Environment

76

---

Table of Contents

77

---

Table of Contents

	Power Generation

						Sydkraft’s/E.ON
						Finland’s Share
		Total								Attributable
		Capacity								Capacity				Start-up
Power Plants		Net MW				%				MW				Date
Nuclear
Barsebäck 2(S)			600				25.8				155				1977
Forsmark 1(S)			961				9.3				90				1980
Forsmark 2(S)			954				9.3				89				1981
Forsmark 3(S)			1,185				10.8				128				1985

78

---

Table of Contents

							Sydkraft’s/E.ON
							Finland’s Share
			Total								Attributable
			Capacity								Capacity				Start-up
Power Plants			Net MW				%				MW				Date
Nuclear (continued)
Oskarshamn I(S)				467				54.5				255				1972
Oskarshamn II(S)				602				54.5				328				1974
Oskarshamn III(S)				1,160				54.5				632				1985
Ringhals 1(S)				835				25.8				215				1976
Ringhals 2(S)				872				25.8				225				1975
Ringhals 3(S)				920				25.8				237				1981
Ringhals 4(S)				915				25.8				236				1983
	Total			9,471								2,590
Hydroelectric
Balforsen(S)				88				100.0				88				1958
Bergeforsen(S)				160				44.0				70				1955
Bjurfors nedre(S)				78				100.0				78				1959
Blasjön(S)				60				50.0				30				1957
Degerforsen(S)				63				100.0				63				1965
Edensforsen (Aseleälven)(S)				67				93.7				63				1956
Edsele(S)				60				100.0				60				1965
Forsse(S)				52				100.0				52				1968
Gulsele (Aseleälven)(S)				64				65.0				42				1955
Hällby (Aseleälven)(S)				84				65.0				55				1970
Hammarforsen(S)				79				100.0				79				1928
Harjavalta(1)(FIN)				76				13.2				10				1945
Harrsele(S)				223				50.6				113				1957
Hjälta(S)				178				100.0				178				1949
Järnvägsforsen(S)				100				94.9				95				1975
Korselbränna (Fjällsjöälven)(S)				130				100.0				130				1961
Kvistforsen(1)(S)				140				100.0				140				1962
Moforsen(S)				135				100.0				135				1968
Olden (Langan)(S)				112				100.0				112				1974
Pengfors(S)				52				65.0				34				1954
Ramsele(S)				157				100.0				157				1958
Rätan(S)				60				100.0				60				1968
Selsfors(S)				61				10.6				6				1944
Stensjön (Harkan)(S)				95				50.0				48				1968
Storfinnforsen(S)				112				100.0				112				1953
Trangfors(S)				73				100.0				73				1975
Other (<50 MW installed capacity)				1,403				n/a				1,044				n/a
	Total			3,962								3,127
Fuel Oil
Barsebäck GT(S)				84				100.0				84				1974
Bravalla(S)				240				100.0				240				1972
Halmstad G11(S)				78				100.0				78				1973
Halmstad G12(S)				172				100.0				172				1993

79

---

Table of Contents

							Sydkraft’s/E.ON
							Finland’s Share
			Total								Attributable
			Capacity								Capacity				Start-up
Power Plants			Net MW				%				MW				Date
Fuel Oil (continued)
Kainuun Voima (FIN)				56				50.0				28				1989
Karlshamn G1(S)				332				70.0				232				1971
Karlshamn G2(S)				332				70.0				232				1971
Karlshamn G3(S)				326				70.0				228				1973
Karskär G4(S)				125				50.0				63				1968
Öresundsverket GT(S)				126				100.0				126				1971
Oskarshamn GT(S)				80				54.5				44				1973
Other (<50 MW installed capacity)				100				n/a				64				n/a
	Total			1,995								1,563
Natural Gas
Heleneholm G11, G12(S)(CHP)				130				100.0				130				1966 + 1970
Suomenoja GT (FIN)				50				100.0				50				1989
	Total			180								180
Hard Coal
Suomenoja(2)(FIN)				80				100.0				80				1977
Wind Power
Sweden				17				n/a				17				n/a
Denmark				166				n/a				33				n/a
	Total			183								50
Other Power Plants
Abyverket G1, G2, G3(S)(CHP)				151				100.0				151				1962-1974
Händelö (Norrköping)(S)(CHP)				100				100.0				100				1983
Joensuu Bio(2)(FIN)				65				100.0				65				1986
Kainuun Voima (FIN)				82				50.0				41				1989
Karskär G3(S)				48				50.0				24				1968
	Total			446								381
Shutdown
Barsebäck 1(S)(Nuclear)				—				25.8				—				1975
	Total			16,317								7,971

(1)	Power plant expected to be transferred to Sydkraft’s minority shareholder Statkraft in 2005 according to an agreement in principle.
(2)	Power plant of E.ON Finland.

(FIN)	Located in Finland.

(S)	Located in Sweden.

(CHP)	Combined Heat and Power Generation.

80

---

Table of Contents

81

---

Table of Contents

	Electricity Distribution

82

---

Table of Contents

	Gas Supply

83

---

Table of Contents

	Gas Distribution

	Retail

84

---

Table of Contents

	Trading

			2004				2003
			million				million
Trading of Power			kWh				kWh				% Change
Power sold				56,758				70,650				-19.7
Power purchased				48,764				69,537				-29.9
	Total			105,522				140,187				–24.7

85

---

Table of Contents

	Operations

	Market Environment

86

---

Table of Contents

	Regulated Business

87

---

Table of Contents

	Power Generation

							LG&E Energy’s Share
			Total								Attributable
			Capacity								Capacity				Start-up
Power Plants			Net MW				%				MW				Date
Hard Coal
Cane Run 4(1)				155				100.0				155				1962
Cane Run 5(1)				168				100.0				168				1966
Cane Run 6(1)				240				100.0				240				1969
E.W. Brown 1(2)				101				100.0				101				1957
E.W. Brown 2(2)				167				100.0				167				1963
E.W. Brown 3(2)				429				100.0				429				1971
Ghent 1(2)				475				100.0				475				1974
Ghent 2(2)				484				100.0				484				1977
Ghent 3(2)				493				100.0				493				1981
Ghent 4(2)				493				100.0				493				1984
Green River 3(2)				68				100.0				68				1954
Green River 4(2)				95				100.0				95				1959
Mill Creek 1(1)				303				100.0				303				1972
Mill Creek 2(1)				301				100.0				301				1974
Mill Creek 3(1)				391				100.0				391				1978
Mill Creek 4(1)				477				100.0				477				1982
Trimble County(1)				511				75.0				383				1990
Tyrone 3(2)				71				100.0				71				1953
	Total			5,422								5,294
Natural Gas
Cane Run 11(1)				14				100.0				14				1968
E.W. Brown 5(3)				117				100.0				117				2001
E.W. Brown 6(3)				154				100.0				154				1999
E.W. Brown 7(3)				154				100.0				154				1999
E.W. Brown 8(2)				106				100.0				106				1995
E.W. Brown 9(2)				106				100.0				106				1994
E.W. Brown 10(2)				106				100.0				106				1995
E.W. Brown 11(2)				106				100.0				106				1996
E.W. Brown IAC(3)				98				100.0				98				2000
Haefling 1(2)				12				100.0				12				1970
Haefling 2(2)				12				100.0				12				1970
Haefling 3(2)				12				100.0				12				1970
Paddy’s Run 11(1)				12				100.0				12				1968
Paddy’s Run 12(1)				23				100.0				23				1968

88

---

Table of Contents

							LG&E Energy’s Share
			Total								Attributable
			Capacity								Capacity				Start-up
Power Plants			Net MW				%				MW				Date
Natural Gas (continued)
Paddy’s Run 13(3)				158				100.0				158				2001
Trimble County 5(3)				160				100.0				160				2002
Trimble County 6(3)				160				100.0				160				2002
Trimble County 7(3)				160				100.0				160				2004
Trimble County 8(3)				160				100.0				160				2004
Trimble County 9(3)				160				100.0				160				2004
Trimble County 10(3)				160				100.0				160				2004
Waterside 7(1)				11				100.0				11				1964
Waterside 8(1)				11				100.0				11				1964
Zorn 1(1)				14				100.0				14				1969
	Total			2,186								2,186
Oil
Tyrone Unit 1(2)				27				100.0				27				1947
Tyrone Unit 2(2)				31				100.0				31				1948
	Total			58								58
Hydroelectric
Dix Dam(2)				24				100.0				24				1925
Ohio Falls(1)				48				100.0				48				1928
	Total			72								72
LG&E Energy Regulated Business Total				7,738								7,610
Shutdown
Green River 1(2)				22				100.0				22				1950
Green River 2(2)				22				100.0				22				1950
	Total			44								44

(1)	Power stations owned by LG&E.
(2)	Power stations owned by KU.
(3)	Power stations jointly owned by LG&E and KU.

89

---

Table of Contents

	Transmission

	Distribution/ Retail

90

---

Table of Contents

			Total 2004				Total 2003
Sales of Electric Power to			million kWh				million kWh
Residential				10,084				9,836
Commercial and industrial customers				16,276				15,738
Municipals				1,959				1,903
Other retail				3,576				3,523
Off-system sales				4,199				4,409
	Total			36,094				35,409

	Non-regulated Businesses

91

---

Table of Contents

	Overview

	Residential Real Estate

92

---

Table of Contents

	Real Estate Development

	Overview

93

---

Table of Contents

	Operations

Fine &

Coatings &

Construction

Industrial

Performance

Advanced

Specialty

Chemicals

Chemicals

Materials

Fillers

Polymers

Admixture Systems North America

Building Blocks

Superabsorbents

Coatings & Colorants

High Performance Polymers

Admixture Systems Europe

Exclusive Synthesis & Catalysts

Care Specialties

Aerosil & Silanes

Specialty Acrylics

Admixture Systems Asia/Pacific

Peroxygen Chemicals

Oligomers & Silicones

Advanced Fillers & Pigments

Methacrylates

Construction Systems Americas

C 4 -Chemistry

Food Ingredients

Plexiglas

Construction Systems Europe

Feed Additives

	Oil

94

---

Table of Contents

	Distribution/ Logistics

	Aluminum

	Silicon Wafers

	Other

95

---

Table of Contents

	Overview

96

---

Table of Contents

	The First Electricity and Gas Directives

	The German Energy Law

	The Second Electricity and Gas Directives

97

---

Table of Contents

	•	The contribution of each energy source to the overall fuel mix of the supplier over the preceding year; and
	•	A reference to where information is publicly available on the environmental impact of the supplier’s activities, including the amount of CO2 and radioactive waste produced.

98

---

Table of Contents

	Revisions of the German Energy Law

	•	if network access fees are increased before the amended Energy Law comes into force, the REGTP is required to institute market abuse proceedings immediately after the amended Energy Law comes into force;
	•	introduction of an approval procedure for increases in network access fees after entry into force of the amended Energy Law and before the introduction of an incentive regulation; and
	•	immediate creation of conditions for an incentive regulation and introduction within two years (at the latest) after the amended Energy Law has entered into force.

	European Regulation on Cross-Border Trading

99

---

Table of Contents

	Greenhouse Gas Emissions Trading

100

---

Table of Contents

	Legislative Package on Energy Infrastructure and Security of Supply

	•	Directive proposal on measures to safeguard security of electricity supply and infrastructure investment. This proposed directive provides for the introduction of minimum technical standards for grid operators to provide security of electricity supply. In addition, transmission system operators will be required to submit their investment plans for cross border interconnection to the national authorities on a regular basis.
	•	Directive proposal on energy end-use efficiency and energy services. This proposed directive sets an annual reduction target of one percent for energy used in each member state, which would be achieved by boosting energy efficiency measures in the EU.
	•	Regulation proposal on conditions for access to gas transmission networks. This proposed regulation covers access to all gas transmission networks in the EU, and addresses a number of issues such as access charges, third party access services, capacity allocation mechanisms, congestion management, transparency requirements, balancing and imbalance charges, secondary markets, and information and confidentiality provisions. The regulation proposal also requires the establishment of a committee of national experts chaired by the EU Commission, which will have the authority to revise the rules annexed to the regulation.

	Security of Energy Supply (Gas)

	•	Member states must adopt adequate minimum security of supply standards, and
	•	A “three step procedure” will take effect in the event of a major supply disruption for a significant period of time. Under the “three step procedure”, the gas industry should take measures as a first response to such a disruption, followed by national measures taken by member states. In the event of inadequate measures at the national level, the Gas Coordination Group, consisting of representatives of member states, the gas industry and relevant consumers under the chairmanship of the European Commission, would then decide on necessary measures.

	Markets in Financial Instruments Directive

101

---

Table of Contents

	The Electricity Feed-in Law and the Renewable Energy Law

	•	Fixed tariffs for renewable energies: Tariffs for renewable energies are fixed. For wind turbines coming online in 2005, the tariff is fixed at 8.53 €cent/kWh. This tariff is limited in time, with a general term of five years that may be extended up to 20 years depending upon the actual production volume of the installation. After five years, the tariff is reduced to 5.39 €cent/kWh if 150 percent or more of a reference production, which is the potential production of the installed wind turbine operating with a constant wind speed of five meters per second over five years, has been produced. In addition, the fixed tariff is reduced by two percent for new wind turbines every year. For wind turbines coming online in 2006, this means a reduction to 8.36 €cent/kWh and 5.28 €cent/kWh respectively.
	•	National burden sharing: The Renewable Energy Law assumes that the subsidy obligation would be passed on in full to the supplying companies. At the transmission company level, there is an equalization process covering the whole country. Each transmission company first determines how much electricity it takes up under the Renewable Energy Law and how much electricity in total flows in its region to end users. An equalization will then be effected among all transmission companies so that all transmission companies take on and subsidize proportionally equivalent amounts of renewable electricity under the statute. The transmission company will then pass these quantities of electricity and the corresponding costs on to the suppliers delivering electricity to end users in its region in proportion to their respective sales.

102

---

Table of Contents

	Co-Generation Protection Law

	•	CHP plants that were commissioned before 1990 received 1.53 €cent/kWh in 2002 and 2003 and 1.38 €cent/kWh in 2004, and will receive 1.38 €cent/kWh in 2005 and 0.97 €cent/kWh in 2006;
	•	CHP plants that were commissioned after 1990 received 1.53 €cent/kWh in 2002 and 2003 and 1.38 €cent/kWh in 2004, and will receive 1.38 €cent/kWh in 2005, 1.23 €cent/kWh in 2006 and 2007, 0.82 €cent/kWh in 2008, and 0.56 €cent/kWh in 2009;
	•	CHP plants that are modernized received 1.74 €cent/kWh in 2002 and 2003 and 1.74 €cent/kWh in 2004, and will receive 1.69 €cent/kWh in 2005 and 2006, 1.64 €cent/kWh in 2007 and 2008, and 1.59 €cent/kWh in 2009 and 2010; and
	•	Small CHP plants with an installed capacity of less than two MW received 2.56 €cent/kWh in 2002 and 2003 and 2.4 €cent/kWh in 2004, and will receive 2.4 €cent/kWh in 2005, 2.25 €cent/kWh in 2006 and 2007, 2.1 €cent/kWh in 2008 and 2009, and 1.94 €cent/kWh in 2010.

	Electricity Grid Access

	Electricity Rate Regulation

103

---

Table of Contents

	Gas Grid Access

	Gas Rates

104

---

Table of Contents

	Electricity

105

---

Table of Contents

	Gas

	Sweden

106

---

Table of Contents

	Finland

107

---

Table of Contents

	Retail Electric Rate Regulation

108

---

Table of Contents

	Retail Gas Rate Regulation

	Transmission Developments

	Other Regulations

109

---

Table of Contents

110

---

Table of Contents

111

---

Table of Contents

112

---

Table of Contents

113

---

Table of Contents

114

---

Table of Contents

	Germany

115

---

Table of Contents

	Europe

	United Kingdom

116

---

Table of Contents

	Sweden/ Finland

	United States

117

---

Table of Contents

						Percentage				Percentage
		Country of				Ownership Interest				Voting Interest
Name of Subsidiary		Incorporation				held by E.ON				held by E.ON
E.ON Energie AG (energy)			Germany				100.0	%			100.0	%
E.ON Ruhrgas AG (energy)			Germany				100.0	%			100.0	%
E.ON UK Limited (energy)			U.K.				100.0	%			100.0	%
E.ON Nordic AB (energy)			Sweden				100.0	%			100.0	%
LG&E Energy LLC (energy)			USA				100.0	%			100.0	%
Viterra AG (real estate)			Germany				100.0	%			100.0	%

	Central Europe

	Pan-European Gas

118

---

Table of Contents

	U.K.

	Nordic

	U.S. Midwest

119

---

Table of Contents

	Other Activities

120

---

Table of Contents

121

---

Table of Contents

	•	In May, E.ON Energie increased its 46.0 percent interest in EAM, a regional utility based in Kassel, Germany, to a majority interest. E.ON Energie fully consolidated EAM as of June 1, 2002. As of December 31, 2002, E.ON Energie held 73.3 percent of EAM.
	•	In June, E.ON Energie purchased a 100 percent interest in EWB from the Finnish utility Fortum. EWB was a holding company with a 100 percent ownership interest in Elektrizitätswerk Wesertal GmbH (“EWW”), a regional utility in Hameln, Germany. Both companies were fully consolidated as of July 1, 2002.
	•	In July, E.ON Energie acquired an additional 30.1 percent interest in Elektrizitätswerk Minden-Ravensberg (“EMR”), a regional utility in Herford, Germany, from municipal shareholders, giving E.ON Energie a total interest in EMR of 55.2 percent. EMR was fully consolidated as of August 1, 2002.
	•	In September, E.ON Energie acquired a 49.0 percent interest in ZSE, the largest regional utility company in Slovakia. ZSE is accounted for under the equity method.
	•	In November, E.ON Energie acquired an additional 62.9 percent interest in ÉDÁSZ, a regional Hungarian utility, thereby increasing its stake in ÉDÁSZ to 90.6 percent. ÉDÁSZ was fully consolidated effective December 1, 2002.

122

---

Table of Contents

	•	In January, E.ON and E.ON Energie sold their indirect shareholdings of 6.5 percent each in STEAG AG (“STEAG”), a German independent power producer, to RAG.
	•	In March, E.ON Energie reduced its shareholding in Sydkraft by transferring 5.8 percent of its interest to Statkraft.
	•	In July, E.ON Energie disposed of its entire 24.5 percent interest in Watt AG, a Swiss utility, to Nordostschweizerische Kraftwerke AG.

123

---

Table of Contents

124

---

Table of Contents

	•	In July 2003, E.ON Energie and E.ON Ruhrgas each agreed to sell a 22.0 percent stake in Bayerngas to the municipal utilities of the cities of Munich, Augsburg, Regensburg and Ingolstadt, and to the city of Landshut, for a total of €127 million. The transaction was completed in November 2003. E.ON Energie realized a gain on the disposal in the amount of €22 million. No gain was realized on the sale of the E.ON Ruhrgas stake, as these shares had been recorded at their fair value at the time of E.ON’s acquisition of Ruhrgas.
	•	In September 2003, E.ON Energie sold its 80.5 percent interest in Gelsenwasser to a joint venture company owned by the municipal utilities of the cities of Dortmund and Bochum. Gelsenwasser was accounted for as a discontinued operation in the Consolidated Financial Statements. For further information, see “Discontinued Operations” below.
	•	In October 2003, E.ON Energie transferred its 5.26 percent stake in VNG to E.ON Ruhrgas, which already owned an interest in this Leipzig-based gas distributor. In December 2003, E.ON Ruhrgas agreed to sell 32.1 percent of VNG to EWE, and offered its remaining 10.0 percent stake in VNG to eleven municipalities in eastern Germany for the same price per share. The total consideration for the sale of the entire interest was approximately €899 million. E.ON Energie realized a gain of approximately €60 million on its stake. No gain was realized on the sale of the E.ON Ruhrgas stake, as these shares had been recorded at their fair value at the time of E.ON’s acquisition of Ruhrgas. The sales were subject to the fulfillment of a number of conditions and were completed in January 2004.
	•	In November 2003, E.ON Energie divested its 100 percent interest in E.ON-Energiebeteiligungs-Gesellschaft to EWE for €305 million. E.ON Energiebeteiligungs-Gesellschaft had a 32.36 percent interest in swb, comprising all of the shares previously held by E.ON Energie and E.ON Ruhrgas. E.ON Energie realized a gain on the disposal in the amount of €85 million. No gain was realized on the sale of the E.ON Ruhrgas stake, as these shares had been recorded at their fair value at the time of E.ON’s acquisition of Ruhrgas.

125

---

Table of Contents

	•	In December 2003, E.ON concluded an agreement to divest its stake in EWE. E.ON Energie’s 27.4 percent stake in EWE was acquired by EWE’s majority shareholders Energieverband Elbe-Weser Beteiligungsholding GmbH and Weser-Ems Energiebeteiligungen GmbH for total consideration of approximately €520 million. E.ON recorded a gain of €257 million on the disposal, which was completed in January 2004.

126

---

Table of Contents

127

---

Table of Contents

128

---

Table of Contents

129

---

Table of Contents

	•	Currency, electricity, gas, oil and coal forward contracts, swaps, and emission rights derivatives are valued separately at future rates or market prices as of the balance sheet date. The fair values of spot and forward contracts are based on spot prices that consider forward premiums or discounts from quoted prices in the relevant markets.
	•	Market prices for currency, electricity and gas options are obtained using standard option pricing models commonly used in the market. The fair values of caps, floors, and collars are determined on the basis of quoted market prices or on calculations based on option pricing models.
	•	The fair values of existing instruments to hedge interest rate risk are determined by discounting future cash flows using market interest rates over the remaining term of the instrument. Discounted cash values are determined for interest rate, cross-currency and cross-currency/interest rate swaps for each individual transaction as of the balance sheet date. Interest income is considered with an effect on current results at the date of payment or accrual.
	•	Equity swaps are valued on the basis of the stock prices of the underlying equities, taking into consideration any financing components.
	•	Exchange-traded energy future and option contracts are valued individually at daily settlement prices determined on the futures markets that are published by their respective clearing houses. Initial margins paid are disclosed under other assets. Variation margins received or paid during the term of such contracts are stated under other liabilities or other assets, respectively, and are accounted for with an impact on earnings at settlement or realization.
	•	Certain long-term commodity contracts are valued by the use of valuation models that include average probabilities and take into account individual contract details and variables.

130

---

Table of Contents

131

---

Table of Contents

	•	SFAS No. 151, Inventory Costs — an amendment of ARB No. 43, Chapter 4;
	•	SFAS No. 153, Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29; and
	•	SFAS No. 123 (revised 2004), Share-Based Payment.

132

---

Table of Contents

133

---

Table of Contents

			2004								2003
							Adjusted								Adjusted
			Sales				EBIT				Sales				EBIT
			(€ in millions)
Central Europe(1)(2)				20,752				3,602				19,253				2,979
Pan-European Gas(3)				14,426				1,428				12,973				1,463
U.K.				8,490				1,017				7,923				610
Nordic(4)				3,347				701				2,824				546
U.S. Midwest(2)				1,913				349				1,971				317
Corporate Center(2)(5)				(813	)			(314	)			(596	)			(319	)
	Core Energy Business			48,115				6,783				44,348				5,596
	Other Activities(2)(6)			988				578				2,079				632
Total				49,103				7,361				46,427				6,228

(1)	Sales include electricity taxes of €1,051 million in 2004 and €1,015 million in 2003.
(2)	Excludes the sales and adjusted EBIT of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(3)	Includes the results of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales include natural gas and electricity taxes of €2,923 million in 2004 and €2,555 million in 2003.
(4)	Sales include electricity and natural gas taxes of €395 million in 2004 and €324 million in 2003.
(5)	Includes primarily the parent company and effects from consolidation (including the elimination of intersegment sales), as well as the results of the former telecommunications division, as explained in “Item 4.

134

---

Table of Contents

	Information on the Company — Business Overview — Introduction.” Sales between companies in the same market unit are eliminated in calculating sales on the market unit level.
(6)	In 2003, includes sales of Degussa for the month of January only, prior to its deconsolidation. For more details, see “Item 4. Information on the Company — Business Overview — Other Activities — Degussa — Overview” and Note 4 of the Notes to Consolidated Financial Statements.

	E.ON Group

135

---

Table of Contents

136

---

Table of Contents

		2004				2003
		(€ in millions)
Adjusted EBIT			7,361				6,228
Adjusted interest income, net			(1,140	)			(1,663	)
Net book gains			589				1,257
Cost-management and restructuring expenses			(108	)			(479	)
Other non-operating results			97				195
Income/(loss) from continuing operations before income taxes and minority interests			6,799				5,538
Income taxes			(1,947	)			(1,124	)
Minority interests			(504	)			(464	)
Income/(loss) from continuing operations			4,348				3,950
Income/(loss) from discontinued operations			(9	)			1,137
Cumulative effect of change in accounting principles			—				(440	)
Net income			4,339				4,647

		2004				2003
		(€ in millions)
Interest income and similar expenses (net) as shown in Note 6 of the Notes to Consolidated Financial Statements			(1,141	)			(1,107	)
(+) Non-operating interest income, net(1)			138				(62	)
(-) Interest portion of long-term provisions			137				494
Adjusted interest income, net			(1,140	)			(1,663	)

(1)	This net figure is calculated by adding in non-operating interest expense and subtracting non-operating interest income.

137

---

Table of Contents

	Central Europe

138

---

Table of Contents

												Percent
				2004				2003(1)				Change
				(€ in millions)
Central Europe West					17,576				16,814				+4.5
	Power				14,597				13,662				+6.8
	Gas				2,979				3,152				-5.5
Central Europe East					1,877				1,308				+43.5
Other/Consolidation					248				116				+113.8
		Total			19,701				18,238				+8.0

(1)	Excludes sales of Thüga and the activities transferred to the Pan-European Gas market unit and those of Sydkraft and the other businesses of E.ON Nordic.

139

---

Table of Contents

												Percent
				2004				2003(1)				Change
				(€ in millions)
Central Europe West					3,311				2,819				+17.5
	Power				2,996				2,530				+18.4
	Gas				315				289				+9.0
Central Europe East					235				172				+36.6
Other/Consolidation					56				(12	)			—
		Total			3,602				2,979				+20.9

(1)	Excludes results of Thüga and the activities transferred to the Pan-European Gas market unit and those of Sydkraft and the other businesses of E.ON Nordic.

	Pan-European Gas

140

---

Table of Contents

											Percent
			2004				2003(1)				Change
			(€ in millions)
Up-/ Midstream				9,274				8,360				+10.9
Downstream				1,358				1,326				+2.4
Other/ Consolidation				871				732				+19.0
	Total			11,503				10,418				+10.4

(1)	Includes sales of the former Ruhrgas activities for the period from February 1 to December 31 and those of Thüga and the other transferred activities for the full year.

141

---

Table of Contents

											Percent
			2004				2003(1)				Change
			(€ in millions)
Up-/ Midstream				862				923				-6.6
Downstream Shareholdings				486				484				+0.4
Other/Consolidation				80				56				+42.9
	Total			1,428				1,463				-2.4

(1)	Includes results of the former Ruhrgas activities for the period from February 1 to December 31 and those of Thüga and the other transferred activities for the full year.

142

---

Table of Contents

	U.K.

											Percent
			2004				2003				Change
			(€ in millions)
Non-regulated Business				7,788				7,682				+1.4
Regulated Business				941				438				+114.8
Other/ Consolidation				(239	)			(197	)			-21.3
	Total			8,490				7,923				+7.2

143

---

Table of Contents

											Percent
			2004				2003				Change
			(€ in millions)
Non-regulated Business				626				412				+51.9
Regulated Business				446				225				+98.2
Other/ Consolidation				(55	)			(27	)			-103.7
	Total			1,017				610				+66.7

	Nordic

144

---

Table of Contents

											Percent
			2004				2003				Change
			(€ in millions)
Sweden				2,714				2,216				+22.5
Finland				238				284				-16.2
	Total			2,952				2,500				+18.1

											Percent
			2004				2003				Change
			(€ in millions)
Sweden				662				484				+36.8
Finland				39				62				+37.1
	Total			701				546				+28.4

145

---

Table of Contents

	U.S. Midwest

											Percent
			2004				2003				Change
			(€ in millions)
Regulated Business				1,643				1,663				-1.2
Non-regulated Business				270				308				-12.3
	Total			1,913				1,971				-2.9

146

---

Table of Contents

											Percent
			2004				2003				Change
			(€ in millions)
Regulated Business				339				306				+10.8
Non-regulated Business				10				11				-9.1
	Total			349				317				+10.1

	Corporate Center

	Other Activities

147

---

Table of Contents

			2003								2002
							Internal								Internal
							Operating								Operating
							Profit								Profit
			Sales				(Loss)				Sales				(Loss)
			(€ in millions)
E.ON Energie(1)(2)				22,642				3,058				19,142				2,782
Ruhrgas(3)				12,085				1,128				—				—
Powergen(2)(4)				9,894				620				4,422				329
Other/consolidation(2)(5)				(273	)			(693	)			81				(152	)
	Core Energy Business			44,348				4,113				23,645				2,959
Viterra(2)				1,085				295				1,214				203
Degussa(2)(6)				994				157				11,765				655
	Other Activities			2,079				452				12,979				858
Total(7)				46,427				4,565				36,624				3,817

(1)	Sales include electricity taxes of €1,371 million in 2003 and €933 million in 2002.
(2)	Excludes the sales and internal operating profit of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(3)	Includes the results of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales for the period include natural gas taxes of €2,525 million.
(4)	Includes the results of the Powergen Group from the date of consolidation on July 1, 2002.
(5)	Includes primarily the parent company and effects from consolidation, as well as the results of the former telecommunications division, as explained in “Item 4. Information on the Company — Business Overview — Introduction.”
(6)	In 2003, includes results of Degussa for the month of January only, prior to its deconsolidation. For more details, see “Item 4. Information on the Company — Business Overview — Other Activities — Degussa — Overview” and Note 4 of the Notes to Consolidated Financial Statements.
(7)	Excludes intercompany sales.

148

---

Table of Contents

	E.ON Group

149

---

Table of Contents

150

---

Table of Contents

		2003				2002
		(€ in millions)
Group internal operating profit			4,565				3,817
Net book gains			1,257				1,071
Cost-management and restructuring expenses			(479	)			(331	)
Other non-operating results			195				(5,316	)
Income/(loss) from continuing operations before income taxes and minority interests			5,538				(759	)
Income taxes			(1,124	)			662
Minority interests			(464	)			(623	)
Income/(loss) from continuing operations			3,950				(720	)
Income/(loss) from discontinued operations			1,137				3,306
Cumulative effect of change in accounting principles			(440	)			191
Net income			4,647				2,777

151

---

Table of Contents

	E.ON Energie

											Percent
			2003				2002				Change
			(€ in millions)
In Germany(1)				16,057				14,020				+14.5
	Electricity(1)			12,905				11,408				+13.1
	Gas			3,152				2,612				+20.7
Outside Germany(1)				4,688				3,586				+30.7
Other/consolidation(1)(2)				526				603				-12.8
	Total(1)			21,271				18,209				+16.8

(1)	Excludes electricity taxes.
(2)	For 2003, includes sales of Thüga, as to which E.ON Energie transferred the majority of its interest to Ruhrgas as of December 31, 2003. To facilitate the comparison, the sales data for 2002 have been conformed to reflect this new presentation, as well as to reflect the changes made to the organizational structure of E.ON Energie’s business units effective January 1, 2003.

152

---

Table of Contents

	Ruhrgas

			February 1 to
			December 31, 2003
			(€ in millions)
Gas business(1)				8,504
Industrial business				1,056
	Total(1)			9,560

(1)	Excludes natural gas taxes.

153

---

Table of Contents

	Powergen

154

---

Table of Contents

							July 1 to
							December 31,				Percent
			2003				2002				Change
			(€ in millions)
U.K. Operations				7,923				3,162				+150.6
U.S. Operations				1,971				1,260				+56.4
	Total			9,894				4,422				+123.7

155

---

Table of Contents

	Viterra

	Degussa

156

---

Table of Contents

	Other/consolidation

157

---

Table of Contents

158

---

Table of Contents

				2004								2003
				Cash from				Capital				Cash from				Capital
				Operations				Expenditures				Operations				Expenditures
				(€ in millions)
Central Europe(2)					2,938				2,527				4,081				2,126
Pan-European Gas					1,016				660				1,027	(3)			667	(3)
U.K.					633				503				315				388
Nordic					957				740				773				1,265
U.S. Midwest(2)					182				277				188				443
Corporate Center(2)					241				434				(855	)			4,147	(4)
	Core Energy Business				5,967				5,141				5,529				9,036
	Other Activities(2)				5				144				9				160
		Total			5,972				5,285				5,538				9,196

(1)	For a detailed description of capital expenditures by purchases of financial assets and purchases of other fixed assets, see Note 27 of the Notes to Consolidated Financial Statements.
(2)	Excludes the cash from operations and capital expenditures of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(3)	Includes the cash flows of the former Ruhrgas activities for the period from February 1 to December 31 and those of Thüga and other transferred activities for the full year.
(4)	Includes the acquisition of shares of Ruhrgas in 2003.

	Capital Expenditures in 2004 Compared with 2003

159

---

Table of Contents

160

---

Table of Contents

				2003								2002
				Cash from				Capital				Cash from				Capital
				Operations				Expenditures				Operations				Expenditures
				(€ in millions)
E.ON Energie(2)					5,040				3,521				3,246				6,125
Ruhrgas(3)					791				463				—				—
Powergen(2)(4)					493				842				373				3,094
Other/consolidation(2)					(795	)			4,210	(5)			(897	)			13,448	(5)
	Core Energy Business				5,529				9,036				2,722				22,667
Viterra(2)					102				124				51				378
Degussa(2)					(93	)			36				841				1,114
	Other Activities				9				160				892				1,492
		Total			5,538				9,196				3,614				24,159

(1)	For a detailed description of capital expenditures by purchases of financial assets and purchases of other fixed assets, see Note 27 of the Notes to Consolidated Financial Statements.
(2)	Excludes the cash from operations and capital expenditures of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements.
(3)	Includes the cash flows of the former Ruhrgas activities from the date of consolidation on February 1, 2003.
(4)	Includes the cash flows of the Powergen Group from the date of consolidation on July 1, 2002.
(5)	Includes the acquisition of the Powergen Group in 2002 and shares of Ruhrgas in both 2002 and 2003.

	Capital Expenditures in 2003 Compared with 2002

161

---

Table of Contents

162

---

Table of Contents

163

---

Table of Contents

Fair value of contracts outstanding at the beginning of the period			(72.7	)
Change to scope of consolidation			0.0
Contracts realized or otherwise settled during the period			82.0
Fair value of new contracts entered into during the period			29.3
Changes in fair values attributable to changes in valuation techniques and assumptions			(18.8	)
Other changes in fair values			362.7
Fair value of contracts outstanding at the end of the period			382.5

164

---

Table of Contents

		Fair Value of Contracts at Period-End
		Maturity												Maturity in
		less than				Maturity				Maturity				excess of				Total
Source of Fair Value		1 year				1-3 years				4-5 years				5 years				Fair Value
		(€ in millions)
Prices actively quoted			160.6				274.2				0.6				0.0				435.4
Prices provided by other external sources			0.0				0.0				0.0				0.0				0.0
Prices based on models and other valuation methods			(11.3	)			(11.7	)			(4.8	)			(25.1	)			(52.9	)

165

---

Table of Contents

166

---

Table of Contents

		Payments Due by Period
						Less than												More than
Contractual Obligations		Total				1 year				1-3 years				3-5 years				5 years
		(€ in millions)
Financial Liabilities			20,576				7,036				1,888				5,539				6,113
Capital Lease Obligations			168				35				69				38				26
Operating Leases			1,179				109				181				151				738
Purchase Obligations			112,041				11,445				17,381				21,341				61,874
Asset Retirement Obligations			9,088				182				312				287				8,307
Pension Payments			9,133				814				1,696				1,788				4,835
Other Long-Term Obligations			12,418				832				3,001				5,028				3,557
Total Contractual Obligations			164,603				20,453				24,528				34,172				85,450

167

---

Table of Contents

Item 6.	Directors, Senior Management and Employees.

168

---

Table of Contents

								Year First
Name and Position Held		Age				Principal Occupation		Elected
Ulrich Hartmann(1)(2)*(3)*			66			Retired Co-Chief Executive Officer of			2003
Chairman of the Supervisory Board						E.ON AG; formerly Chairman of the Board of Management and Chief Executive Officer of VEBA AG
						Supervisory Board Memberships/Directorships:
						Deutsche Bank AG, Deutsche Lufthansa AG, Hochtief AG, IKB Deutsche Industriebank AG (Chairman), Münchener Rückversicherungs- Gesellschaft AG, Arcelor(4), Henkel KGaA(4)
Hubertus Schmoldt(2)(3)(5)			59			Chairman of the Board of Management of			1996
Deputy Chairman of the Supervisory Board						Industriegewerkschaft Bergbau, Chemie, Energie
						Supervisory Board Memberships/ Directorships:
						Bayer AG, BHW AG, DOW Olefinverbund GmbH, Deutsche BP AG, RAG Aktiengesellschaft

169

---

Table of Contents

								Year First
Name and Position Held		Age				Principal Occupation		Elected
Günter Adam(5)			46			Chairman of the Central Works Council,			2002
Member of the Supervisory Board						Degussa AG
						Supervisory Board Memberships/ Directorships:
						Degussa AG
Dr. Karl-Hermann Baumann(1)*			69			Chairman of the Supervisory Board of			2000
Member of the Supervisory Board						Siemens AG (until January 27, 2005); formerly member of the Board of Management of Siemens AG
						Supervisory Board Memberships/ Directorships:
						Deutsche Bank AG, Linde AG, Schering AG, ThyssenKrupp AG
Ralf Blauth(1)(2)(5)			53			Chairman of the Combined Works Council,			1996
Member of the Supervisory Board						Degussa AG
						Supervisory Board Memberships/ Directorships:
						Degussa AG, RAG Aktiengesellschaft
Dr. Rolf-E. Breuer			67			Chairman of the Supervisory Board of			1997
Member of the Supervisory Board						Deutsche Bank AG; formerly Spokesman of the Board of Management of Deutsche Bank AG
						Supervisory Board Memberships/ Directorships:
						Bertelsmann AG, Deutsche Börse AG (Chairman), Compagnie de Saint-Gobain S.A.(4), Landwirtschaftliche Rentenbank(4), Kreditanstalt für Wiederaufbau(4)
Dr. Gerhard Cromme(3)			61			Chairman of the Supervisory Board of			1993
Member of the Supervisory Board						ThyssenKrupp AG
						Supervisory Board Memberships/ Directorships:
						Allianz AG, Axel Springer AG, Deutsche Lufthansa AG, E.ON Ruhrgas AG, Hochtief AG, Siemens AG, Volkswagen AG, Suez S.A.(4), BNP Paribas S.A.(4)
Wolf-Rüdiger Hinrichsen(3)(5)			49			Head of the Economic Affairs Department			1998
Member of the Supervisory Board						of E.ON AG
Ulrich Hocker			54			General Manager of the German Investor			1998
Member of the Supervisory Board						Protection Association
						Supervisory Board Memberships/ Directorships:
						Feri Finance AG, Gildemeister AG, Karstadt Quelle AG, ThyssenKrupp Steel AG, Gartmore Capital Strategy Fonds(4), Phoenix Mecano AG(4) (Chairman)
Eva Kirchhof(5)			47			Diploma-Physicist, Degussa AG			2002
Member of the Supervisory Board
						Supervisory Board Memberships/ Directorships:
						Viterra Wohnungsgesellschaft III mbH(4)

170

---

Table of Contents

								Year First
Name and Position Held		Age				Principal Occupation		Elected
Seppel Kraus(5)			51			Secretary of Labor Union			2003
Member of the Supervisory Board
						Supervisory Board Memberships/ Directorships:
						Wacker-Chemie GmbH, UPM-Kymmene Beteiligungs GmbH
Prof. Dr. Ulrich Lehner			58			President and Chief Executive Officer,			2003
Member of the Supervisory Board						Henkel KGaA
						Supervisory Board Memberships/ Directorships:
						HSBC Trinkaus & Burkhardt KGaA, Ecolab Inc.(4), Novartis AG(4), Dial Corporation(4), Henkel of America(4), Henkel Corporation(4)
Dr. Klaus Liesen			73			Honorary Chairman of the Supervisory			1991
Member of the Supervisory Board						Board of E.ON Ruhrgas AG; formerly Chairman of the Supervisory Board of E.ON Ruhrgas AG
						Supervisory Board Memberships/ Directorships:
						TUI AG, Volkswagen AG, Otto Wolff Industrieberatung und Beteiligungen GmbH(4)
Peter Obramski(5)			45			Secretary of Labor Union			2003
Member of the Supervisory Board
						Supervisory Board Memberships/ Directorships:
						E.ON Energie AG, E.ON Engineering GmbH, E.ON Kraftwerke GmbH, RAG Bahn und Hafen GmbH
Ulrich Otte(5)			55			Chairman of the Central Works Council,			2001
Member of the Supervisory Board						E.ON Energie AG
						Supervisory Board Memberships/ Directorships:
						E.ON Energie AG, E.ON Kraftwerke GmbH
Klaus-Dieter Raschke(1)(5)			51			Chairman of the Combined Works Council,			2002
Member of the Supervisory Board						E.ON Energie AG
						Supervisory Board Memberships/ Directorships:
						E.ON Energie AG, E.ON Kernkraft GmbH
Dr. Henning Schulte-Noelle(2)			62			Chairman of the Supervisory Board of			1993
Member of the Supervisory Board						Allianz AG; formerly Chairman of the Board of Management of Allianz AG
						Supervisory Board Memberships/ Directorships:
						Siemens AG, ThyssenKrupp AG
Prof. Dr. Wilhelm Simson			66			Retired Co-Chief Executive Officer of			2003
Member of the Supervisory Board						E.ON AG; formerly Chairman of the Board of Management and Chief Executive Officer of VIAG AG
						Supervisory Board Memberships/ Directorships:
						Bayerische Hypo- und Vereinsbank AG, Frankfurter Allgemeine Zeitung GmbH, Merck KGaA, Freudenberg & Co.(4), Jungbunzlauer Holding AG(4)

171

---

Table of Contents

								Year First
Name and Position Held		Age				Principal Occupation		Elected
Gerhard Skupke(5)			55			Chairman of the Central Works Council,			2003
Member of the Supervisory Board						E.DIS Aktiengesellschaft
						Supervisory Board Memberships/ Directorships:
						E.DIS Aktiengesellschaft
Dr. Georg Freiherr von Waldenfels			60			Former Minister of Finance of the State			2003
Member of the Supervisory Board						of Bavaria; Attorney
						Supervisory Board Memberships/ Directorships:
						Deutscher Tennis Bund Holding GmbH (Chairman), Georgsmarienhütte Holding GmbH, GI Ventures AG

*	Chairman of the respective Supervisory Board committee.

(1)	Member of E.ON AG’s Audit Committee. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association — Corporate Governance — The Supervisory Board Committees.”
(2)	Member of E.ON AG’s Executive Committee, which covers the functions of a remuneration committee. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association — Corporate Governance — The Supervisory Board Committees.”
(3)	Member of E.ON AG’s Finance and Investment Committee. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association — Corporate Governance — The Supervisory Board Committees.”
(4)	Membership in comparable domestic or foreign supervisory body of a commercial enterprise.
(5)	Elected by the employees.

172

---

Table of Contents

Year First

Year Current

Name and Title

Age

Business Activities and Experience

Appointed

Term Expires

Dr. Wulf-H. Bernotat Chairman of the Board of Management

56

Chief Executive Officer; Corporate Communications, Corporate and Public Affairs, Investor Relations, Supervisory Board Relations, Strategy, Executive Development, Audit; formerly Chairman of the Board of Management of Stinnes AG

2003

2008

Supervisory Board Memberships/ Directorships:

E.ON Energie AG(1) (Chairman), E.ON Ruhrgas AG(1) (Chairman), Allianz AG, Metro AG, RAG Aktiengesellschaft (Chairman), E.ON Nordic AB(2)(4) (Chairman), E.ON UK plc(2)(4) (Chairman), E.ON US Investments Corp.(2)(4) (Chairman), Sydkraft AB(2)(4) (Chairman)

Dr. Burckhard Bergmann Member of the Board of Management

61

Upstream Business, Market Management, Group Regulatory Management; Chairman of the Board of Management and Chief Executive Officer of E.ON Ruhrgas AG

2003

2005

Supervisory Board Memberships/Directorships:

E.ON Ruhrgas International AG(1) (Chairman), Thüga AG(1) (Chairman), Allianz Lebensversicherungs-AG, MAN Ferrostaal AG, Jaeger Akustik GmbH & Co.(2) (Chairman), Mitteleuropäische Gasleitungsgesellschaft mbH (MEGAL)(2)(4) (Chairman), OAO Gazprom(2), E.ON Ruhrgas E & P GmbH(2)(4) (Chairman), Ruhrgas Industries GmbH(2)(4) (Chairman), Trans Europe Naturgas Pipeline GmbH(2)(4) (Chairman), E.ON Ruhrgas Transport Management GmbH(2)(4), E.ON UK plc(2)(4), ZAO Gerosgaz(2)(4) (Chairman; in alternation with a representative of the foreign partner)

Dr. Hans Michael Gaul Member of the Board of Management

62

Controlling/ Corporate Planning, M&A, Legal Affairs; formerly Member of the Board of Management of VEBA AG

1990

2006

Supervisory Board Memberships/Directorships:

Degussa AG(1), E.ON Energie AG(1), E.ON Ruhrgas AG(1), Viterra AG(1) (Chairman), Allianz Versicherungs-AG, DKV AG, RAG Aktiengesellschaft, STEAG AG, Volkswagen AG, E.ON Nordic AB(2)(4), Sydkraft AB(2)(4)

173

---

Table of Contents

Year First

Year Current

Name and Title

Age

Business Activities and Experience

Appointed

Term Expires

Dr. Manfred Krüper Member of the Board of Management

63

Labor Relations, Personnel, Infrastructure and Services, Procurement, Organization; formerly Member of the Board of Management of VEBA AG

1996

2005

Supervisory Board Memberships/ Directorships:

E.ON Energie AG(1), Viterra AG(1), Degussa AG(1), equitrust Aktiengesellschaft (Chairman), RAG Aktiengesellschaft, RAG Immobilien AG, Victoria Versicherung AG, Victoria Lebensversicherung AG, E.ON US Investments Corp.(2)(4), E.ON North America, Inc.(2)(4) (Chairman)

Dr. Erhard Schipporeit Member of the Board of Management

55

Chief Financial Officer; Finance, Accounting, Taxes, IT; formerly Member of the Board of Management of VIAG AG (appointed in 1997)

2000

2009

Supervisory Board Memberships/ Directorships:

E.ON Ruhrgas AG(1), Degussa AG(1), Commerzbank AG, Talanx AG, E.ON Audit Services GmbH(2)(4) (Chairman), E.ON Risk Consulting GmbH(2)(4) (Chairman), E.ON UK plc(2)(4), E.ON US Investments Corp.(2)(4), HDI V.a.G.(2)

Dr. Johannes Teyssen(3) Member of the Board of Management

45

Downstream Business, Market Management, Group Regulatory Management; Chairman of the Board of Management and Chief Executive Officer of E.ON Energie AG

2004

2008

Supervisory Board Memberships/Directorships:

Avacon AG(1) (Chairman), E.ON Bayern AG(1) (Chairman), E.ON Hanse AG(1) (Chairman), E.ON Sales & Trading GmbH(1), Thüga AG(1), E.ON Nordic AB(2)(4), Sydkraft AB(2)(4)

(1)	Group mandate.
(2)	Membership in comparable domestic or foreign supervisory body of a commercial enterprise.
(3)	Since January 1, 2004.
(4)	Other Group mandate (membership in comparable domestic or foreign supervisory body of a commercial enterprise).

174

---

Table of Contents

			Fixed				Variable				Compensation for
			Compensation for				Compensation for				Supervisory Board
			Service on E.ON’s				Service on E.ON’s				Memberships at
Name			Supervisory Board				Supervisory Board				Affiliated Companies				Total
			(€)
Ulrich Hartmann				30,000				323,925				0				353,925
Hubertus Schmoldt				20,000				215,950				0				235,950
Günter Adam				10,000				107,975				0				117,975
Dr. Karl-Hermann Baumann				20,000				215,950				0				235,950
Ralf Blauth				15,000				161,963				0				176,963
Dr. Rolf-E. Breuer				10,000				107,975				0				117,975
Dr. Gerhard Cromme				15,000				161,963				0				176,963
Wolf Rüdiger Hinrichsen				15,000				161,963				0				176,963
Ulrich Hocker				10,000				107,975				0				117,975
Eva Kirchhof				10,000				107,975				0				117,975
Seppel Kraus				10,000				107,975				0				117,975
Prof. Dr. Ulrich Lehner				10,000				107,975				0				117,975
Dr. Klaus Liesen				10,000				107,975				0				117,975
Peter Obramski				10,000				107,975				0				117,975
Ulrich Otte				10,000				107,975				66,700				184,675
Klaus-Dieter Raschke				15,000				161,963				44,778				221,741
Dr. Henning Schulte-Noelle				15,000				161,963				0				176,963
Prof. Dr. Wilhelm Simson				10,000				107,975				0				117,975
Gerhard Skupke				10,000				107,975				14,250				132,225
Dr. Georg Freiherr von Waldenfels				10,000				107,975				0				117,975
Attendance fees and meeting-related reimbursements(1)																97,838
	Total			265,000				2,861,340				125,728				3,349,906

(1)	Attendance fees and meeting-related reimbursements are given as an aggregate for all Supervisory Board members.

175

---

Table of Contents

	BOARD OF MANAGEMENT

	•	fixed annual compensation;
	•	annual bonus, the amount of which is based on the achievement of company-based and personal performance targets; and
	•	stock appreciation rights (“SARs”)

176

---

Table of Contents

																			SARs
			Fixed Annual				Annual				Gains from								Granted
Name			Compensation				Bonus				exercising SARs(1)				Total				in 2004
			(€)				(€)				(€)				(€)				(No. of
																			SARs)
Dr. Wulf H. Bernotat				1,025,000				2,100,000				0				3,125,000				95,339
Dr. Burckhard Bergmann				650,000				1,400,000				0				2,050,000				63,559
Dr. Hans Michael Gaul				650,000				1,400,000				109,935				2,159,935				63,559
Dr. Manfred Krüper				650,000				1,400,000				0				2,050,000				63,559
Dr. Erhard Schipporeit				650,000				1,400,000				107,800				2,157,800				63,559
Dr. Johannes Teyssen				530,000				1,100,000				100,200				1,730,200				52,966
Other compensation(2)																503,962
	Total			4,155,000				8,800,000				317,935				13,776,897				402,541

(1)	The amount paid to Board of Management members upon exercise of any SARs is the difference between the E.ON AG stock price at the time of exercise and the E.ON AG stock price at the time the SAR was issued, multiplied by the number of SARs exercised.
(2)	Other compensation in the aggregate amount of approximately €0.5 million includes benefits in kind, certain compensation for duties performed at affiliated companies and amounts relating to the difference between the provisions for 2003 annual bonus compensation and the subsequent final determination of such compensation.

177

---

Table of Contents

			Employees at												Employees at												Employees at
			December 31, 2004												December 31, 2003												December 31, 2002
			Total				Germany				Foreign				Total				Germany				Foreign				Total				Germany				Foreign
Central Europe				36,811				29,208				7,603				36,576				28,611				7,965				35,062				29,604				5,458
Pan-European Gas				11,520				5,698				5,822				11,686				6,188				5,498				1,096				1,096				—
U.K.				10,397				6				10,391				6,541				—				6,541				7,439				—				7,439
Nordic				5,530				2				5,528				6,294				—				6,294				5,665				—				5,665
U.S. Midwest				3,437				1				3,436				3,521				—				3,521				3,578				—				3,578
Corporate Center				420				403				17				597				390				207				558				370				188
	Core Energy Business			68,115				35,318				32,797				65,215				35,189				30,026				53,398				31,070				22,328
	Other Activities(1)			1,595				1,573				22				1,887				1,861				26				47,938				28,643				19,295
Total				69,710				36,891				32,819				67,102				37,050				30,052				101,336				59,713				41,623

(1)	Includes Viterra and, for year ended December 31, 2002, Degussa.

178

---

Table of Contents

179

---

Table of Contents

180

---

Table of Contents

181

---

Table of Contents

182

---

Table of Contents

			Price per ADS ($)
			High				Low
2000				603/8				405/8
2001(1)				60.50				42.03
2002				58.02				39.80
2003				65.44				38.52
First Quarter				45.36				38.52
Second Quarter				52.46				41.40
Third Quarter				53.38				48.80
Fourth Quarter				65.44				48.75
2004				91.15				61.72
First Quarter				68.95				61.72
Second Quarter				72.54				63.15
Third Quarter				75.17				69.22
Fourth Quarter				91.15				73.90
	September			73.97				70.57
	October			81.55				73.90
	November			86.26				81.74
	December			91.15				84.50
2005
	January			90.01				85.85
	February			93.02				89.15

(1)	On January 29, 2001, the NYSE started trading all listed issues in decimals instead of fractions.

	•	Quarterly reporting;
	•	Application of international accounting standards (either IAS or U.S. GAAP);

183

---

Table of Contents

	•	Publication of a financial calendar listing the most important corporate events;
	•	At least one analysts’ conference per year; and
	•	Provision of English language versions of all current reports and ad-hoc disclosures required under the German Securities Trading Act (Wertpapierhandelsgesetz, or “Securities Trading Act”).

184

---

Table of Contents

			Price Per
			Ordinary Share								DAX 30 Index(1)
			High				Low				High				Low
			(€)								(€ in thousands)
2000				66.55				41.01				8,064.97				6,200.71
2001				64.50				64.91				6,795.14				3,787.23
2002				59.97				38.16				5,462.55				2,597.88
2003				51.74				34.67				3,965.16				2,202.96
First Quarter				42.90				34.67				3,157.25				2,202.96
Second Quarter				44.77				38.01				3,304.15				2,450.19
Third Quarter				47.72				41.90				3,668.67				3,146.55
Fourth Quarter				51.74				41.67				3,965.16				3,276.64
2004				67.06				49.27				4,261.79				3,646.99
First Quarter				56.16				49.27				4,151.83				3,726.07
Second Quarter				59.63				53.45				4,134.10				3,754.37
Third Quarter				60.83				56.85				4,035.02				3,646.99
Fourth Quarter				67.06				60.05				4,261.79				3,854.41
	September			59.67				57.80				3,991.02				3,817.62
	October			63.78				60.05				4,049.66				3,854.41
	November			65.12				63.11				4,183.41				4,012.64
	December			67.06				63.19				4,261.79				4,150.41
2005
	January			68.72				65.82				4,316.40				4,201.81
	February			71.70				67.27				4,402.03				4,279.97

(1)

The DAX 30 Index is a continuously updated, capital-weighted performance index of 30 German blue chip companies. E.ON represented approximately 9.99 percent of the DAX 30 Index as of March 7, 2005. In principle, the shares included in the DAX 30 Index were selected on the basis of their stock exchange turnover and their market capitalization. Adjustments of the DAX 30 Index are made for capital changes, subscription rights and dividends.

Item 10.	Additional Information.

	Organization, Register and Entry Number

	Objects and Purposes

185

---

Table of Contents

	Corporate Governance

	•	The annual general meeting of shareholders ratifies the actions of the corporation’s supervisory board and board of management. It decides, among other things, on the amount of the annual dividend, the appointment of an independent auditor and certain significant corporate transactions. In corporations with more than 2,000 employees, shareholders and employees elect or appoint an equal number of representatives to the supervisory board. The annual general meeting must be held within the first eight months of each fiscal year.
	•	The supervisory board appoints and removes the members of the board of management and oversees the management of the corporation. Although prior approval of the supervisory board may be required in connection with certain significant matters, the law prohibits the supervisory board from making management decisions.
	•	The board of management manages the corporation’s business and represents it in dealings with third parties. The board of management submits regular reports to the supervisory board about the corporation’s operations and business strategies, and prepares special reports upon request. A person may not serve on the board of management and the supervisory board of a corporation at the same time.

186

---

Table of Contents

187

---

Table of Contents

	•	In addition to E.ON’s general Code of Conduct for all employees, the Company has developed a special Code of Ethics for members of the Board of Management and senior financial officers and published the

188

---

Table of Contents

		text on its corporate website at www.eon.com. Material appearing on the website is not incorporated by reference in this annual report. This code obliges these managers to make full, appropriate, accurate, timely and understandable disclosure of information both in the documents E.ON submits to the SEC and in its other corporate publications.
	•	In accordance with an SEC recommendation, E.ON has established a Disclosure Committee that is responsible for ensuring that effective procedures and control mechanisms for financial reporting are in place and for providing a correct and timely presentation of information to the financial markets. The committee is comprised of seven members from various sectors of E.ON AG who have a good overview of the Group and the processing of information relating to the quarterly reports and annual financial statements.

	Certain Provisions with Respect to Board Members

	Ordinary Shares

189

---

Table of Contents

	•	amending the articles of association to alter the objects and purposes of the company;
	•	increasing or reducing the share capital;
	•	excluding preemptive rights of shareholders to subscribe for new shares;
	•	dissolving the corporation;
	•	merging the corporation into, or consolidating the corporation with, another company;
	•	transferring all or virtually all of the corporation’s assets; and
	•	changing corporate form.

	Changes in Rights of Shareholders

	Shareholders’ Meetings

190

---

Table of Contents

	•	election of members of the Supervisory Board (other than those elected by the employees);
	•	amendment of the Articles of Association;
	•	measures to increase or reduce share capital;
	•	mergers and similar transactions; and
	•	resolutions regarding the dissolution of the Company.

	•	deposit their shares or certificates of deposit for their shares with a notary, collective security-deposit bank, or other agency specified in the notice of the shareholders’ meeting;
	•	make the deposit no later than the end of the day on the seventh day prior to the scheduled meeting date; and
	•	leave the shares or certificates of deposit with the depositary until the completion of the shareholders’ meeting.

	Transparency and Corporate Reporting

191

---

Table of Contents

	•	Quarterly reports;
	•	Annual reports prepared in accordance with German law (in both German and English);
	•	The Annual Report on Form 20-F;
	•	A press conference at the time of release of the German annual report; and
	•	Telephone conferences for analysts following the release of quarterly or annual results, as well as other investor relations presentations.

	Foreign Share Ownership

	Change of Control Provisions

	Disclosure of Shareholdings

192

---

Table of Contents

	Changes in Capital

	•	To increase the Company’s capital stock by a maximum of €180,000,000 through the one-time or repeated issuance of new Ordinary Shares in return for cash contributions until May 25, 2005. E.ON shareholders have pre-emptive rights with respect to the issuance of these authorized shares, though their rights may be excluded by the Board of Management, subject to approval by the Supervisory Board, under certain circumstances set forth in the Articles of Association.
	•	To increase the Company’s capital stock by a maximum of €150,392,201 through the one-time or repeated issuance of new Ordinary Shares in return for contributions in kind until May 25, 2005. Subject to approval by the Supervisory Board, E.ON shareholders have no pre-emptive rights with respect to these authorized shares.
	•	To increase the Company’s capital stock by a maximum of €180,000,000 through the one-time or repeated issuance of new Ordinary Shares in return for cash contributions until May 25, 2005. E.ON shareholders generally have pre-emptive rights with respect to the issuance of these authorized shares, though their rights may be excluded by the Board of Management, subject to approval by the Supervisory Board, under certain circumstances set forth in the Articles of Association.

193

---

Table of Contents

194

---

Table of Contents

195

---

Table of Contents

196

---

Table of Contents

197

---

Table of Contents

198

---

Table of Contents

199

---

Table of Contents

200

---

Table of Contents

	Risk Identification and Analysis

201

---

Table of Contents

	Foreign Exchange and Interest Rate Risk Management Principles

	Foreign Exchange Rate Risk Management

202

---

Table of Contents

	Total Volume of Foreign Currency Derivatives as of December 31, 2004 and December 31, 2003

				December 31, 2004																December 31, 2003
				Nominal				Fair				Value-				Stress				Nominal				Fair				Value-				Stress
				Value				Value				at-Risk				Test				Value				Value				at-Risk				Test
				(€ in millions)
FX forward transactions
	Buy				4,238.2				(41.3	)			11.0				33.0				2,149.5				(142.5	)			12.8				38.4
	Sell				5,328.6				134.2				11.8				35.4				4,789.8				174.6				17.3				51.9
FX currency options
	Buy				782.7				46.7				1.3				3.9				425.4				14.6				0.0				0.0
	Sell				422.2				(36.4	)			0.4				1.2				17.5				0.0				0.0				0.0
		Subtotal			10,771.7				103.2				3.1				9.3				7,382.2				46.7				7.5				22.5
(Remaining maturities)
Cross currency swaps
	up to 1 year				499.1				(7.0	)			2.3				6.9				376.1				(25.1	)			2.3				6.9
	1 year to 5 years				11,033.7				484.2				33.4				100.2				3,464.8				251.1				27.3				81.9
	more than 5 years				7,163.8				236.3				12.0				36.0				7,304.6				188.9				39.9				119.7
Interest rate/cross currency swaps
	up to 1 year				102.3				1.4				0.5				1.5				51.1				(0.7	)			0.3				0.9
	1 year to 5 years				125.0				12.1				0.5				1.5				227.3				17.4				1.4				4.2
	more than 5 years				297.4				(38.5	)			2.5				7.5				297.4				(3.2	)			5.0				15.0
		Subtotal			19,221.3				688.5				44.9				134.7				11,721.3				428.4				60.1				180.3
		Total			29,993.0				791.7				44.6				133.8				19,103.5				475.1				66.5				199.5

203

---

Table of Contents

	Interest Rate Risk Management

	Total Volume of Interest Rate Derivatives as of December 31, 2004 and December 31, 2003

					December 31, 2004																December 31, 2003
					Nominal				Fair				Value-				Stress				Nominal				Fair				Value-				Stress
					Value				Value				at-Risk				Test				Value				Value				at-Risk				Test
					(€ in millions)
					(Remaining maturities)
Interest rate swaps fixed-rate payer
		up to 1 year				371.0				(5.4	)			0.1				0.3				315.1				(2.6	)			0.7				2.1
		1 year to 5 years				2,092.5				(107.9	)			3.1				9.3				1,567.5				(49.8	)			10.8				32.4
		more than 5 years				373.3				(36.6	)			0.8				2.4				1,283.9				(64.4	)			11.8				35.4
	fixed-rate receiver
		up to 1 year				23.3				0.3				0.0				0.0				47.6				0.4				0.3				0.9
		1 year to 5 years				3,914.0				100.6				10.4				31.2				99.7				8.9				0.7				2.1
		more than 5 years				147.0				4.5				0.5				1.5				1,450.1				83.7				12.5				37.5
			Subtotal			6,921.1				(44.5	)			6.7				20.1				4,763.9				(23.8	)			11.6				34.8
Interest rate options Buy up to 1 year						554.6				(7.2	)			0.1				0.3				—				—				—
		1 year to 5 years				—				—				—				—				220.3				0.1				0.2				0.6
		more than 5 years				—				—				—				—				—				—				—				—
	Sell up to 1 year					110.9				(2.0	)			0.0				0.0				—				—				—
		1 year to 5 years				—				—				—				—				220.3				(4.0	)			2.4				7.3
		more than 5 years				—				—				—				—				—				—				—				—
			Subtotal			665.5				(9.2	)			0.2				0.6				440.6				(3.9	)			2.6				7.8
			Total			7,586.6				(53.7	)			6.7				20.1				5,204.5				(27.7	)			14.2				42.6

204

---

Table of Contents

	Commodity Price Risk Management

	Counterparty Risk From the Use of Derivative Financial Instruments

205

---

Table of Contents

Item 12.	Description of Securities other than Equity Securities.

Item 13.	Defaults, Dividend Arrearages and Delinquencies.

Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds.

Item 15.	Controls and Procedures.

206

---

Table of Contents

Item 16A.	Audit Committee Financial Expert.

Item 16B.	Code of Ethics.

Item 16C.	Principal Accountant Fees and Services.

		Year ended				Year ended
Type of Fees		December 31, 2004				December 31, 2003
		(€ in millions)
Audit Fees			41.4				31.3
Audit-Related Fees			11.4				4.8
Tax Fees			1.7				1.8
All Other Fees			4.8				1.6
Total			59.3				39.5

	Audit Committee Pre-Approval Policies

207

---

Table of Contents

	Audit Services

	•	Annual audit for E.ON’s Consolidated Financial Statements;
	•	Quarterly review of E.ON’s interim financial statements;
	•	Statutory audits of financial statements of E.ON AG and of its subsidiaries under the rules of their respective countries;
	•	Attestation of internal controls as part of the external audit; and
	•	Attestation of regulatory filing and other compliance requirements, including regulatory advice, such as carve-out reports and comfort letters.

	Audit-Related Services

	•	Accounting advice relating to transactions or events;
	•	Due diligence relating to acquisitions, dispositions and contemplated transactions;
	•	Consultation in accounting and corporate reporting matters;
	•	Attestation of compliance with provisions or calculations required by agreements;
	•	Employee benefit plan audits;
	•	Agreed-upon procedures engagements; and
	•	Advisory services relating to internal controls and systems documentation.

	Tax Services

	•	Tax compliance services, including return preparation and tax payment planning;
	•	Tax advice relating to transactions or events;
	•	Expatriate employee tax services;
	•	Transfer pricing studies; and
	•	Tax services for employee benefit plans.

	All Other Services

	•	Advisory services on corporate governance and risk management;
	•	Advisory services on corporate treasury processes and systems;
	•	Advisory services on information systems; and
	•	Educational and training services on accounting and industry matters.

208

---

Table of Contents

Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

										Total Number of				Maximum Number of
										Shares Purchased as				Shares that may yet
		Total Number of				Average Price Paid				Part of the Share				be Purchased under the
		Shares Purchased				per Share in €				Buyback Plan				Share Buyback Plan
2004		(a)				(b)				(c)				(d)
Jan. 1-31			—				—				—				33,226,401
Feb. 1-29			—				—				—				33,226,401
Mar. 1-31			—				—				—				33,226,401
Apr. 1-30			—				—				—				33,226,401
May 1-31			—				—				—				33,226,424
Jun. 1-30			—				—				—				33,253,416
Jul. 1-31			—				—				—				36,350,721
Aug. 1-31			200,000				57.73				—				36,153,049
Sep. 1-30			—				—				—				36,153,062
Oct. 1-31			—				—				—				36,153,075
Nov. 1-30			12,135				64.08				—				36,353,096
Dec. 1-31			—				—				—				36,353,403
Total			212,135				58.08				—

(a)	211,815 Ordinary Shares were purchased for the Company’s employee share purchase programs and 320 Ordinary Shares were purchased in order to meet conversion claims of former Gelsenberg AG shareholders. Gelsenberg AG was merged into the former VEBA AG in 1978; its shareholders had the option to receive VEBA shares or cash against delivery of their Gelsenberg shares. In November 2004, some former Gelsenberg AG shareholders presented Gelsenberg shares requesting an aggregate of 320 E.ON shares. All of these purchases were made in the market.
(c)(d)	Pursuant to shareholder resolutions approved at the annual general meeting of shareholders held on April 28, 2004, the Board of Management is authorized to buy back up to 10 percent of E.ON AG’s outstanding share capital, or 692,000,000 Ordinary Shares, through October 28, 2005. Pursuant to the German Stock Corporation Act, the maximum number of shares the Company may purchase at any time equals 10 percent of 692,000,000 (or 69,200,000 Ordinary Shares) less the number of Ordinary Shares held in treasury stock at such time. Therefore, the maximum number of Ordinary Shares that may be purchased under the Company’s share buyback plan, as reflected in column D, fluctuated over the course of 2004 due to changes in the number of Ordinary Shares held in treasury stock, rather than due to share repurchases. The Company did not buy back any Ordinary Shares pursuant to this share buyback plan in 2004, as the shares purchased for the employee share purchase programs and the Gelsenberg conversion claims were not purchased pursuant to such plan.

209

---

Table of Contents

Item 17.	Financial Statements.

Item 18.	Financial Statements.

Item 19.	Exhibits.

Exhibit No.				Exhibit Title
	1.1			English translation of the Articles of Association (Satzung) of E.ON AG as amended to date.*
	4.1			Unofficial English translation of Framework Agreement between RAG AG, RAG Beteiligungs-GmbH, RAG Projektgesellschaft mbH and EBV Aktiengesellschaft, and E.ON AG, Chemie Verwaltungs AG and E.ON Vermögensanlage GmbH, dated May 20, 2002.**
	4.2			Amended and Restated Fiscal Agency Agreement between E.ON AG, E.ON International Finance B.V., E.ON UK PLC, and Citibank, N.A. as Fiscal Agent, and Banque du Luxembourg S.A. and Citibank AG as Paying Agents, relating to the Euro 20,000,000,000 Medium Term Note Programme, dated August 21, 2002.**
	8.1			Subsidiaries as of the end of the year covered by this annual report: see “Item 4. Information on the Company — Organizational Structure.”
	10.1			Unofficial English translation of Current Form of Management Board Service Agreement.*
	10.2			Schedule 1 to Exhibit 10.1 — Individual Deviations from Form of Management Board Service Agreement.*
	12.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
	12.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
	13.1			Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

*	Filed herewith.
**	Incorporated by reference to the Form 20-F filed by E.ON AG with the Securities and Exchange Commission on March 19, 2003, file number 1-14688.

210

---

Table of Contents

Report of Independent Accountants				F-1
Consolidated Financial Statements:
	Consolidated Statements of Income for the years ended December 31, 2004, 2003 and 2002			F-2
	Consolidated Balance Sheets at December 31, 2004 and 2003			F-3
	Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002			F-4
	Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2004, 2003 and 2002			F-5
	Notes to the Consolidated Financial Statements			F-6

F-i

---

Table of Contents

---

Table of Contents

Düsseldorf March 7, 2005		PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
		/s/ Brebeck		/s/ Laue
		Brebeck Wirtschaftsprüfer (German Public Auditor)		Laue Wirtschaftsprüfer (German Public Auditor)

F-1

---

Table of Contents

							Year Ended December 31,
			Note				2004*				2004				2003				2002
Public utility sales							$	46,709			€	34,502			€	31,971			€	23,333
Gas sales								17,903				13,224				11,917				567
Product sales								1,627				1,202				2,050				11,765
Other sales								237				175				489				959
Sales				(31)				66,476				49,103				46,427				36,624
Electricity and petroleum tax								(5,900	)			(4,358	)			(3,886	)			(933	)
Sales, net of electricity and petroleum tax								60,576				44,745				42,541				35,691
Cost of goods sold — Public utility								(31,709	)			(23,422	)			(22,893	)			(17,039	)
Cost of goods sold — Gas								(12,203	)			(9,014	)			(8,055	)			(375	)
Cost of goods sold — Product								(1,209	)			(893	)			(1,499	)			(8,258	)
Cost of goods sold and services provided — Other								(33	)			(24	)			(333	)			(862	)
Cost of goods sold and services provided								(45,154	)			(33,353	)			(32,780	)			(26,534	)
Gross profit on sales								15,422				11,392				9,761				9,157
Selling expenses								(5,939	)			(4,387	)			(4,556	)			(4,839	)
General and administrative expenses								(2,042	)			(1,508	)			(1,399	)			(1,649	)
Other operating income (expenses), net				(5)				2,349				1,735				2,091				236
Financial earnings				(6)				(586	)			(433	)			(359	)			(1,273	)
Goodwill impairment				(11a)				—				—				—				(2,391	)
Income/(Loss) from continuing operations before income taxes and minority interests								9,204				6,799				5,538				(759	)
Income taxes				(7)				(2,636	)			(1,947	)			(1,124	)			662
Income/(Loss) from continuing operations after income taxes								(6,568	)			4,852				4,414				(97	)
Minority interests				(8)				(682	)			(504	)			(464	)			(623	)
Income/(Loss) from continuing operations								5,886				4,348				3,950				(720	)
Income/(Loss) from discontinued operations:
	Income/(Loss) from operations (less applicable income taxes of €0, €52 and €255, respectively)			(4)				(12	)			(9	)			1,137				3,306
Income before cumulative effect of changes in accounting principles								5,874				4,339				5,087				2,586
Cumulative effect of changes in accounting principles, (less applicable income taxes of €0, €(261) and €0, respectively)								—				—				(440	)			191
Net income								5,874				4,339				4,647				2,777
Basic earnings per share:				(10)
	Income/(Loss) from continuing operations							8.96				6.62				6.04				(1.10	)
	Income/(Loss) from discontinued operations, net							(0.01	)			(0.01	)			1.74				5.07
	Cumulative effect of changes in accounting principles, net							—				—				(0.67	)			0.29
	Net income							8.95				6.61				7.11				4.26
Diluted earnings per share:				(10)
	Income/(Loss) from continuing operations							8.96				6.62				6.04				(1.10	)
	Income/(Loss) from discontinued operations, net							(0.01	)			(0.01	)			1.74				5.07
	Cumulative effect of changes in accounting principles, net							—				—				(0.67	)			0.29
	Net income							8.95				6.61				7.11				4.26

*	Note 1

F-2

---

Table of Contents

						December 31,
		Note				2004*				2004				2003
ASSETS
Goodwill						$	19,568			€	14,454			€	13,955
Intangible assets			(11a)				5,128				3,788				4,153
Property, plant and equipment			(11b)				58,975				43,563				42,797
Financial assets			(11c)				23,371				17,263				17,725
Fixed assets							107,042				79,068				78,630
Inventories			(12)				3,584				2,647				2,477
Financial receivables and other financial assets			(13)				2,875				2,124				2,192
Operating receivables and other operating assets			(13)				21,334				15,759				15,833
Assets of disposal groups			(4)				749				553				—
Investments in short-term securities			(14)				10,614				7,840				7,474
Cash and cash equivalents			(15)				5,653				4,176				3,321
Non-fixed assets							44,809				33,099				31,297
Deferred tax assets			(7)				2,100				1,551				1,525
Prepaid expenses			(16)				466				344				398
Total assets (thereof short-term 2004: €25,839; 2003: €24,883)							154,417				114,062				111,850

						December 31,
		Note				2004*				2004				2003
STOCKHOLDERS’ EQUITY AND LIABILITIES
Capital stock			(17)			$	2,436			€	1,799			€	1,799
Additional paid-in capital			(18)				15,902				11,746				11,564
Retained earnings			(19)				27,080				20,003				16,976
Accumulated other comprehensive income			(20)				363				268				(309	)
Treasury stock							(347	)			(256	)			(256	)
Stockholders’ equity							45,434				33,560				29,774
Minority interests			(21)				5,610				4,144				4,625
Provisions for pensions			(22)				11,628				8,589				7,442
Other provisions			(23)				34,729				25,653				26,886
Accrued liabilities							46,357				34,242				34,328
Financial liabilities			(24)				27,484				20,301				21,787
Operating liabilities			(24)				19,026				14,054				13,903
Liabilities							46,510				34,355				35,690
Liabilities of disposal groups			(4)				73				54				—
Deferred tax liabilities			(7)				8,942				6,605				6,265
Deferred income			(16)				1,491				1,102				1,168
Total liabilities (thereof short-term 2004: €23,734; 2003: €23,999)							108,984				80,502				82,076
Total stockholders’ equity and liabilities							154,417				114,062				111,850

*	Note 1

F-3

---

Table of Contents

				Year Ended December 31,
				2004*				2004				2003				2002
Net income				$	5,874			€	4,339			€	4,647			€	2,777
Income applicable to minority interests					682				504				464				623
Adjustments to reconcile net income to net cash provided by operating activities:
	Income from discontinued operations				12				9				(1,137	)			(3,306	)
	Depreciation, amortization, impairment				4,408				3,256				3,272				6,767
	Changes in provisions				(652	)			(482	)			1,586				(1,297	)
	Changes in deferred taxes				27				20				(132	)			(1,515	)
	Other non-cash income and expenses				(9	)			(7	)			(156	)			274
	(Gain)/ Loss on disposal:
		Equity investments			(551	)			(407	)			(1,289	)			(491	)
		Other financial assets			(47	)			(35	)			—				(150	)
		Intangible and fixed assets			(620	)			(458	)			(526	)			(360	)
	Changes in non-fixed assets and other operating liabilities:
		Inventories			(280	)			(207	)			299				252
		Trade receivables			(305	)			(225	)			172				(678	)
		Other operating receivables			(72	)			(53	)			411				(829	)
		Trade payables			(125	)			(92	)			(598	)			546
		Other operating liabilities			(257	)			(190	)			(1,475	)			1,001
Cash provided by operating activities					8,085				5,972				5,538				3,614
Proceeds from disposal of:
	Equity investments				2,209				1,632				5,290				8,351
	Other financial assets				976				721				992				1,813
	Intangible and fixed assets				1,495				1,104				753				767
Purchase of:
	Equity investments				(3,083	)			(2,277	)			(6,296	)			(20,335	)
	Other financial assets				(401	)			(296	)			(240	)			(614	)
	Intangible and fixed assets				(3,671	)			(2,712	)			(2,660	)			(3,210	)
Changes in securities (other than trading) (> 3 months)					(521	)			(385	)			428				1,345
Changes in financial receivables					2,189				1,617				1,772				1,474
Cash provided by (used for) investing activities					(807	)			(596	)			39				(10,409	)
Payments received/made from changes in capital including minority interests					(24	)			(18	)			—				17
Payments for treasury stock, net					—				—				7				15
Payment of cash dividends to:
	Stockholders of E.ON AG				(1,776	)			(1,312	)			(1,142	)			(1,100	)
	Minority stockholders				(387	)			(286	)			(479	)			(418	)
Payments for financial liabilities					5,322				3,931				2,564				12,432
Repayments of financial liabilities					(9,174	)			(6,776	)			(4,495	)			(6,447	)
Cash provided by (used for) financing activities					(6,039	)			(4,461	)			(3,545	)			4,499
Net increase (decrease) in cash and cash equivalents maturing					1,239				915				2,032				(2,296	)
Effect of foreign exchange rates on cash and cash equivalents					(82	)			(60	)			(43	)			(232	)
Cash and cash equivalents at the beginning of the period					4,496				3,321				1,342				4,239
Cash and cash equivalents from discontinued operations at the beginning of the period					—				—				(10	)			(379	)
Cash and cash equivalents from continued operations at end of the period					5,653				4,176				3,321				1,332
Cash and cash equivalents from discontinued operations at the end of the period					—				—				—				10
Cash and cash equivalents					5,653				4,176				3,321				1,342

*	Note 1

F-4

---

Table of Contents

														Accumulated other comprehensive income
						Additional								Currency				Available				Minimum
		Capital				paid-in				Retained				translation				for sale				pension				Cash flow				Treasury
		stock				capital				earnings				adjustments				securities				liability				hedges				stock				Total
January 1, 2002			1,799				11,402				11,795				376				(265	)			(320	)			(51	)			(274	)			24,462
Shares reacquired/sold																															15				15
Dividends paid											(1,100	)																							(1,100	)
Net income											2,777																								2,777
Other comprehensive income															(618	)			262				(81	)			(64	)							(501	)
Total comprehensive income																																			2,276
December 31, 2002			1,799				11,402				13,472				(242	)			(3	)			(401	)			(115	)			(259	)			25,653
Shares reacquired/sold							162				(1	)																			3				164
Dividends paid											(1,142	)																							(1,142	)
Net income											4,647																								4,647
Other comprehensive income															(779	)			1,187				(91	)			135								452
Total comprehensive income																																			5,099
December 31, 2003			1,799				11,564				16,976				(1,021	)			1,184				(492	)			20				(256	)			29,774
Shares reacquired/sold																																			—
Capital increase							182																												182
Dividends paid											(1,312	)																							(1,312	)
Net income											4,339																								4,339
Other comprehensive income															125				994				(598	)			56								577
Total comprehensive income																																			4,916
December 31, 2004			1,799				11,746				20,003				(896	)			2,178				(1,090	)			76				(256	)			33,560

F-5

---

Table of Contents

	•	The Central Europe market unit, led by E.ON Energie AG (“E.ON Energie”), Munich, Germany, operates E.ON’s integrated electricity business and the downstream gas business in Central Europe.
	•	Pan-European Gas is responsible for the upstream and midstream gas business. Moreover, this market unit holds predominantly minority interests in companies of the downstream gas business. This market unit is led by E.ON Ruhrgas AG (“E.ON Ruhrgas”), Essen, Germany (formerly: Ruhrgas AG).
	•	The U.K. market unit encompasses the integrated energy business in the United Kingdom. This market unit is led by E.ON UK plc (“E.ON UK”), Coventry, U.K. (formerly: Powergen UK plc).
	•	The Nordic market unit, which is led by E.ON Nordic AB (“E.ON Nordic”), Malmö, Sweden, focuses on the integrated energy business in Northern Europe. It operates through the two integrated energy companies Sydkraft AB (“Sydkraft”), Malmö, Sweden, and E.ON Finland Oyj (“E.ON Finland”), Espoo, Finland, primarily in Sweden and Finland.
	•	The U.S. Midwest market unit, led by LG&E Energy LLC (“LG&E Energy”), Louisville, Kentucky, U.S., is primarily active in the regulated energy market in the U.S. state of Kentucky.

F-6

---

Table of Contents

	•	Majority-owned subsidiaries in which E.ON directly or indirectly exercises control through a majority of the stockholders’ voting rights (“affiliated companies”) are fully consolidated. Furthermore, Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 (revised December 2003), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (“FIN 46R”), requires E.ON to consolidate so-called variable interest entities in which it is the primary beneficiary for economic purposes, even if it does not have a controlling interest.
	•	Majority-owned companies in which E.ON does not exercise management control due to restrictions in the control of assets and management (“unconsolidated affiliates”) are generally accounted for under the equity method. Companies in which E.ON has the ability to exercise significant influence in the investees’ operations (“associated companies”) are also accounted for under the equity method. These are mainly companies in which E.ON holds an interest of between 20 and 50 percent.
	•	All other share investments are accounted for under the cost method or, if they are marketable, at fair value.

F-7

---

Table of Contents

						€1, rate as of
						December 31,								€1, annual average rate
Currencies		ISO-Code				2004				2003				2004				2003				2002
Swiss franc			CHF				1.54				1.56				1.54				1.52				1.47
British pound			GBP				0.71				0.70				0.68				0.69				0.63
Japanese yen			JPY				141.03				133.72				134.42				130.96				118.04
Swedish krona			SEK				9.02				9.08				9.12				9.12				9.16
U.S. dollar			USD				1.36				1.25				1.24				1.13				0.95

(1)	The countries within the European Monetary Union are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain.

F-8

---

Table of Contents

F-9

---

Table of Contents

	•	The first step is to compare each reporting unit’s fair value with its carrying amount including goodwill. If a reporting unit’s carrying amount exceeds its fair value, this indicates that its goodwill may be impaired and the second step is required.
	•	The second step is to compare the implied fair value of the reporting unit’s goodwill with the carrying amount of its goodwill. The implied fair value is computed by allocating the reporting unit’s fair value to all of its assets and liabilities in a manner that is similar to a purchase price allocation in a business combination in accordance with SFAS 141. The remainder after this allocation is the implied fair value of the reporting unit’s goodwill. If this fair value of goodwill is less than its carrying value, the difference is recorded as an impairment.

F-10

---

Table of Contents

Useful Lives of Property, Plant and Equipment
Buildings				10 to 50 years
Power plants
	Conventional components			10 to 60 years
	Nuclear components			up to 25 years
Hydro power plants and other facilities used to generate renewable energy				10 to 50 years
Equipment, fixtures, furniture and office equipment				3 to 25 years
Technical equipment for storage, distribution and transmission				15 to 65 years

F-11

---

Table of Contents

F-12

---

Table of Contents

F-13

---

Table of Contents

F-14

---

Table of Contents

F-15

---

Table of Contents

F-16

---

Table of Contents

Scope of Consolidation		Domestic				Foreign				Total
Consolidated companies as of December 31, 2003			188				409				597
Additions			29				106				135
Disposals			(20	)			(46	)			(66	)
Consolidated companies as of December 31, 2004			197				469				666

F-17

---

Table of Contents

		January 16,
€ in millions		2004
Intangible assets			10
Goodwill			473
Property, plant and equipment			1,745
Financial assets			34
Non-fixed assets			197
Other assets			20
Total assets			2,479
Accrued liabilities			(178	)
Liabilities			(1,911	)
Other liabilities			(335	)
Total liabilities			(2,424	)
Net assets			55

F-18

---

Table of Contents

		2004				2003
€ in millions		unaudited				unaudited
Net sales			44,769				44,434
Income before changes in accounting principles			4,343				5,156
Net income			4,343				4,726
Earnings per share (in €)			6.61				7.23

F-19

---

Table of Contents

F-20

---

Table of Contents

		December 31,
€ in millions		2004
Fixed assets			553
Non-fixed assets			—
Total assets			553
Total liabilities			(54	)
Net assets			499

F-21

---

Table of Contents

		February 1,
€ in millions		2003
Intangible assets			651
Property, plant and equipment			4,191
Financial assets			4,843
Non-fixed assets			6,042
Other assets			200
Total assets			15,927
Accrued liabilities			(2,098	)
Liabilities			(4,702	)
Other liabilities (including minority interests)			(1,854	)
Total liabilities			(8,654	)
Net assets (excluding goodwill)			7,273

F-22

---

Table of Contents

	•	Bayerngas GmbH (“Bayerngas”), Munich, Germany (held by E.ON Energie (22.0 percent) and E.ON Ruhrgas (22.0 percent))
	•	Gelsenwasser AG (“Gelsenwasser”), Gelsenkirchen, Germany (E.ON Energie (80.5 percent))
	•	swb AG (“swb”), Bremen, Germany (E.ON Energie (22.0 percent) and E.ON Ruhrgas (10.4 percent))
	•	Verbundnetz Gas AG (“VNG”), Leipzig, Germany (E.ON Energie (5.3 percent) and E.ON Ruhrgas (36.8 percent))
	•	EWE Aktiengesellschaft (“EWE”), Oldenburg, Germany (E.ON Energie (27.4 percent))

F-23

---

Table of Contents

F-24

---

Table of Contents

€ in millions		2003				2002
Sales			—				1,703
Gain/(Loss) on disposal, net			(35	)			1,367
Other income (expenses), net			—				(1,284	)
Income/(Loss) from continuing operations before income taxes and minority interests			(35	)			1,786
Income taxes			(2	)			(5	)
Minority interests			—				3
Income/(Loss) from discontinued operations			(37	)			1,784

€ in millions		2003				2002
Sales			295				369
Gain on disposal, net			418				—
Other income (expenses), net			(201	)			(314	)
Income from continuing operations before income taxes and minority interests			512				55
Income taxes			(24	)			(17	)
Minority interests			(9	)			(14	)
Income from discontinued operations			479				24

F-25

---

Table of Contents

€ in millions		2003				2002
Sales			202				468
Gain on disposal, net			641				—
Other income (expenses), net			(145	)			(376	)
Income from continuing operations before income taxes and minority interests			698				92
Income taxes			(17	)			(39	)
Minority interests			—				(1	)
Income from discontinued operations			681				52

F-26

---

Table of Contents

		July 1, 2002				October 21, 2002
		E.ON UK
€ in millions		without TXU				TXU
Intangible assets			523				714
Goodwill			8,916				2,343
Property, plant and equipment			8,164				28
Financial assets			779				—
Non-fixed assets			1,960				558
Total assets			20,342				3,643
Accrued liabilities			(9,321	)			(679	)
Liabilities			(3,056	)			(381	)
Other liabilities (including minority interests)			(136	)			—
Total liabilities			(12,513	)			(1,060	)
Net assets			7,829				2,583

F-27

---

Table of Contents

F-28

---

Table of Contents

€ in millions		2002
Sales			8,840
Gain on disposal, net			588
Other income (expenses), net			(8,638	)
Income from continuing operations before income taxes and minority interests			790
Income taxes			(125	)
Minority interests			(62	)
Income from discontinued operations			603

F-29

---

Table of Contents

€ in millions		2002
Sales			807
Gain on disposal, net			893
Other income (expenses), net			(763	)
Income from continuing operations before income taxes and minority interests			937
Income taxes			(10	)
Minority interests			—
Income from discontinued operations			927

	•	In January 2002, Degussa sold the companies that had conducted its gelatin activities to Sobel N.V., Eindhoven, The Netherlands. The gelatin activities were deconsolidated as of February 10, 2002.
	•	In February 2002, Degussa sold its persulfate operations to Unionchimica Industriale S.p.A., Bergamo, Italy. The persulfate operations were deconsolidated as of March 31, 2002.
	•	In February 2002, Degussa sold its textile additives activities to Giovanni Bozzetto S.p.A., Milan, Italy. The textile additives activities were deconsolidated as of February 28, 2002.
	•	In April 2002, Degussa sold SKW Piesteritz Holding GmbH (“SKW Piesteritz”), Piesteritz, Germany, to A&A Stickstoff Holding AG, Binningen, Switzerland. SKW Piesteritz was deconsolidated as of June 30, 2002.
	•	In June 2002, Degussa sold Degussa Bank GmbH (“Degussa Bank”), Frankfurt am Main, Germany, to the Allgemeine Deutsche Direktbank AG, Frankfurt am Main, Germany. Degussa Bank was deconsolidated as of June 30, 2002.
	•	In August 2002, Degussa sold Viatris GmbH & Co. KG (“Viatris”), Frankfurt am Main, Germany, to Advent International Corporation, Boston, Massachusetts, U.S. Viatris was deconsolidated as of September 30, 2002.
	•	In December 2002, Degussa sold Zentaris AG (“Zentaris”), Frankfurt am Main, Germany, to Æterna Laboratories Inc., Quebec, Canada. Zentaris was deconsolidated as of December 31, 2002.

€ in millions		2002
Sales			410
Loss on disposal, net			(93	)
Other income (expenses), net			(388	)
Loss from continuing operations before income taxes and minority interests			(71	)
Income taxes			(59	)
Minority interests			46
Loss from discontinued operations			(84	)

F-30

---

Table of Contents

€ in millions		2004				2003				2002
Gains from the disposal of businesses and/or fixed assets			912				1,783				1,045
Gains on derivative instruments, net			585				384				(172	)
Exchange rate differences			(311	)			38				17
SAB 51 gain			—				—				105
Research and development costs			(55	)			(69	)			(380	)
Write-down of current assets			(43	)			(211	)			(73	)
Miscellaneous			647				166				(306	)
Total			1,735				2,091				236

F-31

---

Table of Contents

€ in millions		2004				2003				2002
Income from companies in which share investments are held; thereof from affiliated companies: €41 (2003: €34; 2002: €28)			195				172				148
Income from profit- and loss-pooling agreements; thereof from affiliated companies: €5 (2003: €9; 2002: €15)			5				18				34
Income from companies accounted for under the equity method; thereof from affiliated companies: €4 (2003: €16; 2002: €232)			817				794				1,422
Losses from companies accounted for under the equity method; thereof from affiliated companies: €(54) (2003: €(3); 2002: €(40))			(168	)			(130	)			(98	)
Losses from profit- and loss-pooling agreements; thereof from affiliated companies: €(8) (2003: €(12); 2002: €(3))			(10	)			(19	)			(6	)
Write-down of investments			(77	)			(53	)			(28	)
Income from share investments			762				782				1,472
Income from other long-term securities			36				48				123
Income from long-term loans			43				52				42
Other interest and similar income; thereof from affiliated companies: €9 (2003: €0; 2002: €11)			579				678				838
Interest and similar expenses; thereof from affiliated companies: €(6) (2003: €(12); 2002: €20) thereof SFAS 143 accretion expense: €(499) (2003: €(486); 2002: €0)			(1,799	)			(1,885	)			(1,375	)
Interest and similar expenses (net)			(1,141	)			(1,107	)			(372	)
Write-down of financial assets and long-term loans			(54	)			(34	)			(2,373	)
Financial earnings			(433	)			(359	)			(1,273	)

F-32

---

Table of Contents

€ in millions			2004				2003				2002
Current taxes
	Domestic corporate income tax			1,039				403				482
	Domestic trade tax on income			492				297				280
	Foreign income tax			392				283				110
	Other			4				12				(19	)
Total				1,927				995				853
Deferred taxes
	Domestic			32				207				(1,435	)
	Foreign			(12	)			(78	)			(80	)
Total				20				129				(1,515	)
Income taxes				1,947				1,124				(662	)

F-33

---

Table of Contents

F-34

---

Table of Contents

			2004				2004				2003				2003				2002				2002
€ in millions			Amount				Percent				Amount				Percent				Amount				Percent
Corporate income tax				1,700				25.0				1,468				26.5				(190	)			25.0
Credit for dividend distributions				—				—				—				—				(179	)			23.6
German municipal trade taxes net of federal tax benefit				460				6.8				72				1.3				113				(14.9	)
Foreign tax rate differentials				167				2.4				74				1.3				(44	)			5.8
Change in valuation allowances				(199	)			(2.9	)			543				9.8				(83	)			10.9
Changes in tax rate/tax law				142				2.1				60				1.1				(2	)			0.3
Tax effects on
	Tax-free income			(351	)			(5.2	)			(415	)			(7.5	)			(489	)			64.5
	Equity accounting			(135	)			(2.0	)			(163	)			(2.9	)			(330	)			43.5
	Non-deductible goodwill amortization			—				—				—				—				717				(94.5	)
Other(1)				163				2.4				(515	)			(9.3	)			(175	)			23.1
Effective income taxes/tax rate				1,947				28.6				1,124				20.3				(662	)			87.3

(1)	Primarily prior-year current/deferred tax charge of €53 million (2003: €170 million credit; 2002: €33 million credit) and a tax charge of €63 million (2003: €49 million; 2002: €19 million) arising from non-deductible foreign expenditure.

€ in millions		2004				2003				2002
VEBA Oel			—				2				5
Stinnes			—				—				125
Degussa operations			—				—				59
Viterra Energy Services/ Viterra Contracting			—				17				39
VAW			—				—				10
MEMC			—				9				—
Gelsenwasser			—				24				17
Total			—				52				255

€ in millions		2004				2003				2002
Domestic			3,967				3,411				620
Foreign			2,832				2,127				(1,379	)
Total			6,799				5,538				(759	)

F-35

---

Table of Contents

			December 31,
€ in millions			2004				2003
Deferred tax assets
	Intangible assets			167				144
	Fixed assets			376				516
	Investments and long-term financial assets			518				427
	Inventories			14				21
	Receivables			343				90
	Accrued liabilities			4,165				3,989
	Liabilities			1,591				1,600
	Net operating loss carryforwards			1,089				1,184
	Tax credits			34				35
	Other			440				280
	Subtotal			8,737				8,286
	Valuation allowance			(509	)			(726	)
	Total			8,228				7,560
Deferred tax liabilities
	Intangible assets			(700	)			(788	)
	Fixed assets			(6,155	)			(5,907	)
	Investments and long-term financial assets			(1,114	)			(630	)
	Inventories			(98	)			(96	)
	Receivables			(2,141	)			(1,694	)
	Accrued liabilities			(1,086	)			(1,021	)
	Liabilities			(1,283	)			(1,522	)
	Other			(705	)			(642	)
	Total			(13,282	)			(12,300	)
	Net deferred tax liabilities			(5,054	)			(4,740	)

		December 31, 2004								December 31, 2003
						Thereof								Thereof
€ in millions		Total				non-current				Total				non-current
Deferred tax assets			2,060				1,865				2,251				2,123
Valuation allowance			(509	)			(506	)			(726	)			(722	)
Net deferred tax assets			1,551				1,359				1,525				1,401
Less deferred tax liabilities			(6,605	)			(5,779	)			(6,265	)			(5,744	)
Net deferred tax liabilities			(5,054	)			(4,420	)			(4,740	)			(4,343	)

F-36

---

Table of Contents

		December 31,
€ in millions		2004				2003
Domestic tax loss carryforwards			4,487				6,118
Foreign tax loss carryforwards			1,158				513
Total			5,645				6,631

€ in millions		2004				2003				2002
Wages and salaries			3,334				3,500				4,712
Social security contributions			560				590				835
Pension costs and other employee benefits; thereof pension costs: €768 (2003: €678; 2002: €707)			818				816				816
Total			4,712				4,906				6,363

F-37

---

Table of Contents

		6th tranche				5th tranche				4th tranche				3rd tranche				2nd tranche
Date of issuance			Jan. 2, 2004				Jan. 2, 2003				Jan. 2, 2002				Jan. 2, 2001				Jan. 3, 2000
Term			7 years				7 years				7 years				7 years				7 years
Blackout period			2 years				2 years				2 years				2 years				2 years
Price at issuance (in €)			49.05				42.11				54.95				62.95				48.35
Number of participants in year of issuance			356				343				186				231				155
Number of SARs issued (in millions)			2.6				2.5				1.6				1.8				1.4
Exercise hurdle (exercise price exceeds the price at issuance by at least %)			10				10				10				20				20
Exercise hurdle (minimum exercise price in €)			53.96				46.32				60.45				75.54				58.02
Intrinsic value as of December 31, 2004 (in €)			18.01				24.95				12.11				4.11				18.71
Maximum exercise gain (in €)			49.05				—				—				—				—
Remainder of SARs as of December 31, 2004 (in millions)			2.6				2.5				0.8				1.3				0.2
Provision as of December 31, 2004 (€ in millions)			23.8				62.3				9.8				5.3				3.6
Exercise gains in 2004 (€ in millions)			0.1				0.7				7.4				—				6.9
Expense in 2004 (€ in millions)			23.9				50.8				17.2				5.3				7.8

	•	Between the date of issuance and exercise, the E.ON stock price must outperform the Dow Jones STOXX Utilities Index (Price EUR) on at least ten consecutive trading days.
	•	The E.ON stock price on the exercise date must be at least 10.0 percent (for the second and third tranches: at least 20.0 percent) above the price at issuance.

F-38

---

Table of Contents

Number of Options		6th tranche				5th tranche				4th tranche				3rd tranche				2nd tranche
Outstanding as of January 1, 2001			—				—				—				—				1,443,800
Granted in 2001			—				—				—				1,822,620				—
Exercised in 2001			—				—				—				—				35,000
Cancelled in 2001			—				—				—				—				63,000
Outstanding as of December 31, 2001			—				—				—				1,822,620				1,345,800
Granted in 2002			—				—				1,646,419				—				—
Exercised in 2002			—				—				—				—				220,150
Cancelled in 2002			—				—				—				—				—
Change in scope of consolidation			—				—				—				(504,720	)			(301,000	)
Outstanding as of December 31, 2002			—				—				1,646,419				1,317,900				824,650
Granted in 2003			—				2,545,191				15,000				—				—
Exercised in 2003			—				9,902				—				—				—
Cancelled in 2003			—				—				—				—				—
Change in scope of consolidation			—				—				(46,000	)			(17,000	)			(26,800	)
Outstanding as of December 31, 2003			—				2,535,289				1,615,419				1,300,900				797,850
Granted in 2004			2,643,847				12,107				—				—				—
Exercised in 2004			6,666				49,000				805,533				—				605,350
Cancelled in 2004			—				—				—				—				—
Change in scope of consolidation			—				—				—				—				—
Outstanding as of December 31, 2004			2,637,181				2,498,396				809,886				1,300,900				192,500
SARs exercisable at year end			—				—				809,886				—				192,500

F-39

---

Table of Contents

Employees		2004				2003
Central Europe			37,509				34,885
Pan-European Gas			11,451				11,425
U.K.			10,453				6,717
Nordic			5,908				5,726
U.S. Midwest			3,481				3,841
Corporate Center			418				594
Core energy business			69,220				63,188
Other activities			1,698				1,919
Total			70,918				65,107

€ in millions			2004				2003				2002
Income/(Loss) from continuing operations				4,348				3,950				(720	)
Income/(Loss) from discontinued operations				(9	)			1,137				3,306
Income/(Loss) from cumulative effect of changes in accounting
principles, net				—				(440	)			191
Net income				4,339				4,647				2,777
Weighted-average number of shares outstanding (in millions)				657				654				652
Earnings per share (in €)
	from continuing operations			6.62				6.04				(1.10	)
	from discontinued operations			(0.01	)			1.74				5.07
	from cumulative effect of changes in accounting principles, net			—				(0.67	)			0.29
	from net income			6.61				7.11				4.26

F-40

---

Table of Contents

		Acquisition and Production Costs
						Exchange				Change in
		January 1,				rate				scope of																				December 31,
€ in millions		2004				differences				consolidation				Additions				Disposals				Transfers				Impairment				2004
Goodwill			14,270				(316	)			601				398				22				(173	)			—				14,758
Intangible assets			5,436				(7	)			91				123				57				(149	)			9				5,428
Advance payments on intangible assets			—				—				—				12				—				(5	)			—				7
Goodwill and intangible assets			19,706				(323	)			692				533				79				(327	)			9				20,193
Real estate, leasehold rights and buildings			19,185				44				253				379				769				(322	)			117				18,653
Technical equipment, plant and machinery			69,736				(441	)			2,878				1,316				943				1,228				49				73,725
Other equipment, fixtures, furniture and office equipment			3,206				(12	)			108				175				315				60				—				3,222
Advance payments and construction in progress			1,333				(14	)			185				1,111				23				(1,243	)			1				1,348
Tangible assets			93,460				(423	)			3,424				2,981				2,050				(277	)			167				96,948
Shares in unconsolidated affiliates			637				3				(24	)			175				171				17				38				599
Shares in associated companies			10,904				105				(19	)			397				925				116				147				10,431
Other share investments			3,073				6				(27	)			180				413				(223	)			36				2,560
Long-term loans to unconsolidated affiliates			694				—				(18	)			59				35				(108	)			—				592
Loans to associated companies and other share investments			325				2				—				59				44				(18	)			9				315
Total other long-term loans			801				1				1				29				281				5				—				556
Long-term securities			678				—				10				338				560				—				—				466
Financial assets			17,112				117				(77	)			1,237				2,429				(211	)			230				15,519
Total			130,278				(629	)			4,039				4,751				4,558				(815	)			406				132,660

		Accumulated Depreciation
						Exchange				Change in																Fair value
		January 1,				rate				scope of																OCI				December 31,
		2004				differences				consolidation				Additions				Disposals				Transfers				adjustments				2004
Goodwill			315				6				(17	)			—				—				—				—				304
Intangible assets			1,283				(6	)			33				381				24				(20	)			—				1,647
Advance payments on intangible assets			—				—				—				—				—				—				—				—
Goodwill and intangible assets			1,598				—				16				381				24				(20	)			—				1,951
Real estate, leasehold rights and buildings			6,552				4				165				373				357				(24	)			—				6,713
Technical equipment, plant and machinery			41,916				(169	)			1,284				1,903				451				(50	)			—				44,433
Other equipment, fixtures, furniture and office equipment			2,177				26				69				187				253				10				—				2,216
Advance payments and construction in progress			18				—				—				6				1				—				—				23
Tangible assets			50,663				(139	)			1,518				2,469				1,062				(64	)			—				53,385
Shares in unconsolidated affiliates			39				1				6				—				30				12				—				28
Shares in associated companies			536				1				(1	)			—				2				(55	)			16				495
Other share investments			(920	)			—				1				—				10				(1	)			(994	)			(1,924	)
Long-term loans to unconsolidated affiliates			(1	)			—				—				—				—				1				—				—
Loans to associated companies and other share investments			29				—				—				—				9				(2	)			—				18
Total other long-term loans			7				—				—				—				2				2				—				7
Long-term securities			(303	)			—				—				—				—				—				(65	)			(368	)
Financial assets			(613	)			2				6				—				53				(43	)			(1,043	)			(1,744	)
Total			51,648				(137	)			1,540				2,850				1,139				(127	)			(1,043	)			53,592

[Additional columns below]

[Continued from above table, first column(s) repeated]

		Net book values
		December 31,				December 31,
		2004				2003
Goodwill			14,454				13,955
Intangible assets			3,781				4,153
Advance payments on intangible assets			7				—
Goodwill and intangible assets			18,242				18,108
Real estate, leasehold rights and buildings			11,940				12,633
Technical equipment, plant and machinery			29,292				27,820
Other equipment, fixtures, furniture and office equipment			1,006				1,029
Advance payments and construction in progress			1,325				1,315
Tangible assets			43,563				42,797
Shares in unconsolidated affiliates			571				598
Shares in associated companies			9,936				10,368
Other share investments			4,484				3,993
Long-term loans to unconsolidated affiliates			592				695
Loans to associated companies and other share investments			297				296
Total other long-term loans			549				794
Long-term securities			834				981
Financial assets			17,263				17,725
Total			79,068				78,630

F-41

---

Table of Contents

a)	Goodwill and Other Intangible Assets

						Pan-																				Core
		Central				European												U.S.				Corporate				Energy				Other
€ in millions		Europe				Gas				U.K.				Nordic				Midwest				Center				Business				Activities				Total
Book value as of January 1, 2004			2,178				3,755				4,348				297				3,367				—				13,945				10				13,955
Goodwill additions/disposals			282				167				473				71				—				1				994				—				994
Other changes(1)			(155	)			(2	)			(42	)			(9	)			(287	)			—				(495	)			—				(495	)
Book value as of December 31, 2004			2,305				3,920				4,779				359				3,080				1				14,444				10				14,454

(1)	Other changes include transfers arising from finalizing purchase price allocations and exchange rate differences.

F-42

---

Table of Contents

			December 31, 2004
			Acquisition				Accumulated				Net book
€ in millions			costs				amortization				value
Intangible assets subject to amortization
Marketing-related intangible assets				220				72				148
	thereof brand names			215				71				144
Customer-related intangible assets				2,238				578				1,660
	thereof customer lists and customer relationships			2,074				514				1,560
Contract-based intangible assets				1,488				540				948
	thereof operating permits			1,201				360				841
Technology-based intangible assets				598				457				141
	thereof computer software			467				354				113
Intangible assets not subject to amortization				891				—				891
	thereof easements			802				—				802
Total				5,435				1,647				3,788

			Acquisition				Weighted average
			costs				amortization period
			(€ in millions)				(in years)
Intangible assets subject to amortization
Marketing-related intangible assets				—				—
Customer-related intangible assets				23				23
	thereof customer lists and customer relationships			19				19
Contract-based intangible assets				13				18
	thereof operating permits			8				15
Technology-based intangible assets				84				3
	thereof computer software			80				3
Intangible assets not subject to amortization				25				—
Total				145

F-43

---

Table of Contents

€ in millions
2005			345
2006			309
2007			260
2008			210
2009			180
Total			1,304

b)	Property, Plant and Equipment

F-44

---

Table of Contents

											E.ON’s
			E.ON’s								accumulated				E.ON’s
			ownership				E.ON’s total				depreciation &				construction
			interest				acquisition cost				amortization				work in process
Name of plants by type			in %				(€ in millions)				(€ in millions)				(€ in millions)
Nuclear
	Isar 2			75.00				2,055				1,887				9
	Gundremmingen B			25.00				108				92				—
	Gundremmingen C			25.00				115				98				—
Lignite
	Lippendorf S			50.00				530				342				4
Hard Coal
	Bexbach 1			8.33				64				60				—
	Trimble County			75.00				439				152				3
	Rostock			50.38				317				277				—
Hydroelectric/ Wind
	Nymølle Havspark/ Rødsand			20.00				43				2				—
	Nußdorf			53.00				55				40				—
	Ering			50.00				31				28				—
	Egglfing			50.00				47				42				—

c)	Financial Assets

						thereof				thereof								thereof				thereof								thereof				thereof
€ in millions		2004				RAG				GFE(2)				2003				RAG				GFE				2002				RAG				GFE
Sales			55,790				18,240				—				51,096				12,791				—				46,260				15,258				—
Net income/(loss)			2,415				—				—				2,258				86				1				3,246				21				576
E.ON’s share of net income/(loss)			881				—				—				791				34				—				1,452				8				290
Other(1)			(232	)			—				—				(127	)			(49	)			—				(128	)			—				(109	)
Income from companies accounted for under the equity method			649				—				—				664				(15	)			—				1,324				8				181

(1)	Other primarily includes adjustments to conform with E.ON accounting policies, amortization of fair value adjustments due to purchase price allocations and intercompany eliminations.
(2)	GFE was liquidated as of July 31, 2004.

F-45

---

Table of Contents

		December 31,
						thereof				thereof								thereof				thereof
€ in millions		2004				RAG				GFE(2)				2003				RAG				GFE
Fixed assets			48,318				17,714				—				46,714				13,654				—
Current assets and prepaid expenses			30,713				11,973				—				28,109				8,453				1
Accrued liabilities			26,797				14,686				—				24,444				11,678				—
Liabilities and deferred income			29,561				9,785				—				29,306				7,386				—
Minority interests			3,085				2,889				—				512				404				—
Net assets			19,588				2,327				—				20,561				2,639				1
E.ON’s share in equity			7,433				912				—				7,699				1,034				—
Other(1)			2,398				(912	)			—				2,678				(1,034	)			—
Investment in companies accounted for under the equity method			9,831				—				—				10,377				—				—

(1)	Other primarily includes adjustments to conform with E.ON accounting policies, goodwill, fair value adjustments due to purchase price allocations, intercompany eliminations and impairments.
(2)	GFE was liquidated as of July 31, 2004.

			December 31, 2004																December 31, 2003
											Gross				Gross												Gross				Gross
			Amortized								unrealized				unrealized				Amortized								unrealized				unrealized
€ in millions			cost				Fair value				loss				gain				cost				Fair value				loss				gain
Fixed-term securities
	Less than 1 year			109				109				—				—				11				11				—				—
	Between 1 and 5 years			14				14				—				—				276				276				—				—
	More than 5 years			97				101				—				4				94				95				—				1
Subtotal				220				224				—				4				381				382				—				1
Non-fixed-term securities				2,755				5,094				1				2,340				3,312				4,592				9				1,289
Total				2,975				5,318				1				2,344				3,693				4,974				9				1,290

F-46

---

Table of Contents

		December 31, 2004												December 31, 2003
						Interest rate				Maturity								Interest rate				Maturity
		€ in millions				up to				through				€ in millions				up to				through
Loans to affiliated companies			592				8.25%				2025				695				3.90%				2015
Loans to associated companies and other share investments			297				9.00%				2024				296				4.60%				2007
Other long-term loans			549				9.00%				2023				794				9.00%				2010
Total			1,438												1,785

			December 31,
€ in millions			2004				2003
Raw materials and supplies by segment
	Central Europe			838				756
	Pan-European Gas			104				101
	U.K.			221				138
	Nordic			213				211
	U.S. Midwest			182				209
	Corporate Center			—				(12	)
	Core energy business			1,558				1,403
	Other activities			69				98
Total				1,627				1,501
Work in progress				320				405
Finished products				98				83
Goods purchased for resale				602				488
Inventories				2,647				2,477

F-47

---

Table of Contents

		December 31, 2004								December 31, 2003
		With a				With a				With a				With a
		remaining				remaining term				remaining				remaining term
		term up to				of more than				term up to				of more than
€ in millions		1 year				1 year				1 year				1 year
Financial receivables from affiliated companies			85				19				180				43
Financial receivables from associated companies			84				3				74				6
Other financial assets			1,145				788				1,139				750
Financial receivables and other financial assets			1,314				810				1,393				799
Trade receivables			6,462				72				6,211				6
Operating receivables from affiliated companies			63				—				67				—
Operating receivables from associated companies and other share investments			747				24				781				26
Reinsurance claim due from the mutual insurance fund			44				974				42				833
Regulatory assets			58				55				69				91
Other operating assets			6,334				926				6,739				968
Operating receivables and other operating assets			13,708				2,051				13,909				1,924
Receivables and other assets			15,022				2,861				15,302				2,723

F-48

---

Table of Contents

€ in millions		2004				2003
Balance as of January 1			463				212
Changes affecting income			(13	)			99
Changes not affecting income			(19	)			152
Balance as of December 31			431				463

		December 31,
€ in millions		2004				2003
Deposits at banking institutions with an original maturity greater than 3 months			89				539
Securities with an original maturity greater than 3 months			7,751				6,935
Investments in short-term securities			7,840				7,474

		December 31, 2004																December 31, 2003
										Gross				Gross												Gross				Gross
		Amortized				Fair				unrealized				unrealized				Amortized				Fair				unrealized				unrealized
€ in millions		cost				value				loss				gain				cost				value				loss				gain
Fixed-term securities
Less than 1 year			165				168				—				3				163				166				—				3
Between 1 and 5 years			2,372				2,395				17				40				2,215				2,211				27				23
More than 5 years			2,359				2,413				27				81				1,968				1,934				57				23
Subtotal			4,896				4,976				44				124				4,346				4,311				84				49
Non-fixed-term securities			2,459				2,807				40				388				2,415				2,677				44				306
Total			7,355				7,783				84				512				6,761				6,988				128				355

F-49

---

Table of Contents

		December 31, 2004
		less than								12 months
		12 months								or greater								Total
						Gross								Gross								Gross
		Fair				unrealized				Fair				unrealized				Fair				unrealized
€ in millions		value				loss				value				loss				value				loss
Fixed-term securities
Less than 1 year			12				—				—				—				12				—
Between 1 and 5 years			298				17				—				—				298				17
More than 5 years			273				26				4				1				277				27
Subtotal			583				43				4				1				587				44
Non-fixed-term securities			539				39				4				1				543				40
Total			1,122				82				8				2				1,130				84

F-50

---

Table of Contents

	Authorized Capital

(18)	Additional Paid-in Capital

		December 31,
€ in millions		2004				2003				2002
Legal reserves			45				45				45
Other retained earnings			19,958				16,931				13,427
Total			20,003				16,976				13,472

F-51

---

Table of Contents

		December 31, 2004												December 31, 2003												December 31, 2002
						Tax												Tax												Tax
						benefit/												benefit/												benefit/
€ in millions		Before tax				(expense)				Net-of-tax				Before tax				(expense)				Net-of-tax				Before tax				(expense)				Net-of-tax
Foreign currency translation adjustments			139				(25	)			114				(701	)			(152	)			(853	)			(438	)			(55	)			(493	)
Plus (Less): reclassification adjustments affecting income			11				—				11				71				3				74				(125	)			—				(125	)
Unrealized holding gains/(losses) arising during period			1,349				(243	)			1,106				1,282				(35	)			1,247				(514	)			(20	)			(534	)
Plus (Less): reclassification adjustments affecting income			(107	)			(5	)			(112	)			(74	)			14				(60	)			1,355				(559	)			796
Additional minimum pension liability			(935	)			337				(598	)			(156	)			65				(91	)			(116	)			35				(81	)
Cash flow hedges			89				(33	)			56				224				(89	)			135				(129	)			65				(64	)
Total			546				31				577				646				(194	)			452				33				(534	)			(501	)

		December 31,
€ in millions		2004				2003
Central Europe			2,096				2,208
Pan-European Gas			126				185
U.K.			92				122
Nordic			1,668				1,656
U.S. Midwest			103				109
Corporate Center			36				(19	)
Core energy business			4,121				4,261
Other activities			23				364
Total			4,144				4,625

(22)	Provisions for Pensions

F-52

---

Table of Contents

Changes in Projected Benefit Obligations
€ in millions		2004				2003
Balance as of January 1			13,295				15,816
Service cost			215				176
Interest cost			804				724
Change in scope of consolidation			1,397				(2,816	)
Prior service cost			6				22
Actuarial gains(-)/losses			1,182				669
Exchange rate differences			(144	)			(539	)
Other			6				(3	)
Pensions paid			(843	)			(754	)
Balance as of December 31			15,918				13,295

F-53

---

Table of Contents

Changes in Plan Assets
€ in millions		2004				2003
Balance as of January 1			4,922				5,477
Actual return on plan assets			601				660
Company contributions			182				229
Employee contributions			16				15
Change in scope of consolidation			1,220				(683	)
Exchange rate differences			(97	)			(401	)
Pensions paid			(439	)			(365	)
Other			(6	)			(10	)
Balance as of December 31			6,399				4,922

						December 31,
		Target
in %		Allocation				2004				2003
Equity securities			45				51				53
Debt securities			49				42				40
Real estate			5				5				6
Other			1				2				1

		December 31,
€ in millions		2004				2003
Funded status			9,519				8,373
Unrecognized actuarial loss			(2,453	)			(1,518	)
Unrecognized prior service cost			(27	)			(42	)
Unfunded accrued benefit cost			7,039				6,813
Additional minimum liability			1,550				629
Provisions for pensions			8,589				7,442

F-54

---

Table of Contents

€ in millions		2004				2003				2002
Employer service cost			199				161				173
Interest cost			804				724				688
Expected return on plan assets			(426	)			(331	)			(238	)
Prior service cost			24				21				17
Net amortization of (gains)/losses			42				25				45
Total			643				600				685

€ in millions
2005			814
2006			837
2007			859
2008			882
2009			906
2010 – 2014			4,835
Total			9,133

F-55

---

Table of Contents

		December 31, 2004												December 31, 2003
						United				United								United				United
in %		Germany				Kingdom				States				Germany				Kingdom				States
Discount rate			4.75				5.30				5.75				5.50				5.50				6.25
Salary increase rate			2.75				4.00				4.50				2.75				4.00				3.00
Expected return on plan assets			4.75				6.70				8.25				5.50				6.70				8.50
Pension increase rate			1.25				2.80				—				1.25				2.50				—

	•	retirement costs shown in sub-items 1ab) and 1ba) for decommissioning of nuclear power plants in Germany in the amount of €8,204 million (2003: €8,106 million) and in Sweden in the amount of €404 million (2003: €385 million),
	•	environmental improvement measures reported under sub-item 8) related to the locations of non-nuclear power plants, including removal of electricity transmission and distribution equipment in the amount of €327 million (2003: €377 million), and
	•	environmental improvements at gas storage facilities in the amount of €77 million (2003: €76 million) and at opencast mining facilities in the amount of €59 million (2003: €55 million), as well as the decommissioning of oil and gas field infrastructure in the amount of €17 million (2003: €10 million). These obligations are also reported under sub-item 8).

€ in millions		2004				2003
Balance as of January 1			9,009				8,638
Liabilities incurred in the current period			11				18
Liabilities settled in the current period			(164	)			(104	)
Change in scope of consolidation			2				76
Accretion expense			499				486
Revision in estimated cash flows			(272	)			(97	)
Other changes			3				(8	)
Balance as of December 31			9,088				9,009

F-56

---

Table of Contents

			December 31,
€ in millions			2004				2003
Provisions for nuclear waste management(1)				13,481				13,758
	Disposal of nuclear fuel rods			5,370				5,710
	Asset retirement obligation (SFAS 143)			8,608				8,491
	Waste disposal			378				408
	less: advance payments			(875	)			(851	)
Provisions for taxes(2)				2,871				2,827
Provisions for personnel costs(3)				1,611				1,568
Provisions for supplier-related contracts(4)				2,818				2,740
Provisions for customer-related contracts(5)				439				1,295
U.S. regulatory liabilities(6)				415				462
Provisions for environmental remediation(7)				337				332
Provisions for environmental improvements, including land reclamation(8)				1,657				1,693
Miscellaneous(9)				2,024				2,211
Total				25,653				26,886

F-57

---

Table of Contents

aa)	Management of Spent Nuclear Fuel Rods

	•	the costs of transporting spent fuel to the reprocessing firms,
	•	the costs of fuel reprocessing, as well as
	•	the costs of outbound transportation and the intermediate storage of nuclear waste.

	•	contractual costs for procuring intermediate containers and intermediate on-site storage on the plant premises, and
	•	costs of transporting spent fuel rods to conditioning facilities, conditioning costs, and costs for procuring permanent storage containers as determined by external studies.

ab)	Nuclear Plant Decommissioning

ac)	Waste from Plant Operations

b)	Sweden

F-58

---

Table of Contents

ba)	Decommissioning

bb)	Nuclear Fuel Rods and Nuclear Waste in Sweden

c)	United Kingdom and United States

6)	U.S. Regulatory Liabilities

7)	Environmental Remediation

F-59

---

Table of Contents

8)	Environmental Improvements and Similar Liabilities, including Land Reclamation

9)	Miscellaneous

(24)	Liabilities

			December 31, 2004																				December 31, 2003
							With a remaining																				With a remaining
							term of																				term of
																			Average																				Average
																			interest rate																				interest rate
							up to				1 to 5				over				up to 1 year								up to				1 to 5				over				up to 1 year
€ in millions			Total				1 year				years				5 years				(in %)				Total				1 year				years				5 years				(in %)
Bonds (including Medium Term Note programs)				9,148				355				5,306				3,487				2.4				11,506				1,400				1,469				8,637				5.4
Commercial paper				3,631				3,631				—				—				2.1				2,168				2,168				—				—				2.5
Bank loans/ Liabilities to banks				4,130				1,010				1,506				1,614				3.7				4,917				1,283				1,633				2,001				3.9
Bills payable				51				3				48				—				2.6				71				—				3				68				3.6
Other financial liabilities				1,648				155				547				946				4.4				1,332				340				228				764				4.2
Financial liabilities to banks and third parties				18,608				5,154				7,407				6,047								19,994				5,191				3,333				11,470
Financial liabilities to affiliated companies				134				128				—				6				2.5				231				225				1				5				2.3
Liabilities to associated companies and other share investments				1,834				1,754				20				60				3.5				1,925				1,850				12				63				2.0
Financial liabilities to Group companies				1,968				1,882				20				66								2,156				2,075				13				68
Financial liabilities				20,576				7,036				7,427				6,113								22,150				7,266				3,346				11,538
Accounts payable				3,662				3,627				35				—								3,778				3,768				10				—
Liabilities to affiliated companies				147				103				—				44								77				39				—				38
Liabilities to associated companies and other share investments				184				92				71				21								239				170				55				14
Capital expenditure grants				271				26				93				152								285				22				78				185
Construction grants from energy consumers				3,558				347				692				2,519								3,516				162				639				2,715
Advance payments				725				722				3				—								695				670				25				—
Other				5,507				3,793				323				1,391								5,313				3,811				125				1,377
	thereof taxes			989				989				—				—								781				781				—				—
	thereof social security contributions			62				62				—				—								55				55				—				—
Operating liabilities				14,054				8,710				1,217				4,127								13,903				8,642				932				4,329
Liabilities				34,630				15,746				8,644				10,240								36,053				15,908				4,278				15,867

F-60

---

Table of Contents

	•	the repayment of the affected financing arrangement
	•	the declaration that a liability becomes due and payable before its stated maturity
	•	the triggering of cross defaults in other financing arrangements
	•	E.ON’s access to additional financing on favorable terms being severely curtailed or even eliminated

	•	€4.25 billion issued by E.ON International Finance with a coupon of 5.75 percent and a maturity in May 2009
	•	€0.9 billion issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in May 2017

F-61

---

Table of Contents

	•	GBP 500 million or €704 million issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in May 2012
	•	GBP 0.975 billion or €1.37 billion issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in June 2032

F-62

---

Table of Contents

F-63

---

Table of Contents

	•	GBP 250 million or €352 million bond issued by E.ON UK plc with a coupon of 8.5 percent maturing in July 2006, of which GBP 44 million or €62 million was held by external investors
	•	GBP 250 million or €352 million bond issued by E.ON UK plc with a coupon of 6.25 percent maturing in April 2024, of which GBP 8 million or €11 million was held by external investors
	•	GBP 150 million or €211 million issued by Central Networks plc (previously Midlands Electricity plc, a wholly-owned subsidiary of E.ON UK plc) with a coupon of 7.375 percent maturing in November 2007 (part of the Midlands Debt), of which GBP 1 million or approximately €1 million was held by external investors
	•	€500 million Eurobond issued by E.ON UK plc with a coupon of 5.0 percent maturing in July 2009, of which €264 million was held by external investors
	•	USD 410 million or €301 million Yankee Bond issued by Powergen (East Midlands) Investments, London, U.K., with a coupon of 7.45 percent maturing in May 2007, of which USD 173 million or €127 million was held by external investors

F-64

---

Table of Contents

F-65

---

Table of Contents

		Repayment				Repayment				Repayment				Repayment				Repayment				Repayment
€ in millions		2005				2006				2007				2008				2009				after 2009				Total
Bonds (including MTN programs)			355				448				202				134				4,522				3,487				9,148
Commercial paper			3,631				—				—				—				—				—				3,631
Bank loans/ Liabilities due to banks			1,010				474				410				195				427				1,614				4,130
Bills payable			3				—				48				—				—				—				51
Other financial liabilities			155				170				126				130				121				946				1,648
Financial liabilities to banks and third parties			5,154				1,092				786				459				5,070				6,047				18,608
Used credit lines			315				11				3				—				—				69				398
Unused credit lines			5,834				1				5				10				5,005				136				10,991
Used and unused credit lines			6,149				12				8				10				5,005				205				11,389

		December 31, 2004
€ in millions		0 - 3%				3.1 - 7%				7.1 - 10%				more than 10%				Total
Bonds (including MTN programs)			463				8,486				199				—				9,148
Commercial paper			3,631				—				—				—				3,631
Bank loans/ Liabilities due to banks			1,507				2,533				90				—				4,130
Bills payable			—				51				—				—				51
Other financial liabilities			285				1,338				5				20				1,648
Financial liabilities to banks and third parties			5,886				12,408				294				20				18,608

F-66

---

Table of Contents

		December 31,
€ in millions		2004				2003
Bank loans collateralized by mortgages on real estate			1,147				1,678
Other collateralized bank loans			805				574
Uncollateralized bank loans, drawings on credit lines, short-term loans			2,178				2,665
Total			4,130				4,917

F-67

---

Table of Contents

F-68

---

Table of Contents

F-69

---

Table of Contents

€ in millions		Total				Less than 1 year				1 - 3 years				3 - 5 years				After 5 years
Natural gas			104,123				8,932				15,515				20,324				59,352
Oil			—				—				—				—				—
Coal			1,971				839				754				263				115
Lignite and other fossil fuels			311				48				102				106				55
Total fossil fuel purchase obligations			106,405				9,819				16,371				20,693				59,522
Electricity purchase obligations			3,444				807				693				441				1,503
Other purchase obligations			1,264				408				222				150				484
Total long term purchase commitments/obligations			111,113				11,034				17,286				21,284				61,509
Major repairs			6				6				—				—				—
Environmental protection measures			18				1				2				1				14
Other (i.e. capital expenditure commitments)			904				404				93				56				351
Total other purchase commitments/obligations			928				411				95				57				365
Other financial liabilities			4,093				509				2,885				641				58
Loan commitments			8,325				323				116				4,387				3,499
Total			124,459				12,277				20,382				26,369				65,431

€ in millions
2005			144
2006			129
2007			121
2008			113
2009			75
Thereafter			765
Total			1,347

(26)	Litigation and Claims

F-70

---

Table of Contents

(27)	Supplemental Disclosure of Cash Flow Information

€ in millions			2004				2003				2002
Cash paid during the year for
	Interest, net of amounts capitalized			1,216				1,197				917
	Income taxes, net of refunds			1,241				1,064				1,170
Non-cash investing and financing activities
	Increase of stakes in subsidiaries in exchange for distribution of E.ON AG shares to minority shareholders			182				153				—
	Purchase price payments for Deutschbau shares not due until subsequent years			367				—				—
	Exchange and contribution of assets as part of acquisitions			—				—				167

F-71

---

Table of Contents

F-72

---

Table of Contents

	•	Currency, electricity, gas, oil and coal forward contracts, swaps, and emissions-related derivatives are valued separately at their forward rates and prices as of the balance sheet date. Forward rates and prices are based on spot rates and prices, with forward premiums and discounts taken into consideration.
	•	Market prices for currency, electricity and gas options are valued using standard option pricing models commonly used in the market. The fair values of caps, floors, and collars are determined on the basis of quoted market prices or on calculations based on option pricing models.
	•	The fair values of existing instruments to hedge interest rate risk are determined by discounting future cash flows using market interest rates over the remaining term of the instrument. Discounted cash values are determined for interest rate, cross-currency and cross-currency interest rate swaps for each individual transaction as of the balance-sheet date. Interest exchange amounts are considered with an effect on current results at the date of payment or accrual.
	•	Equity swaps are valued on the basis of the stock prices of the underlying equities, taking into consideration any financing components.
	•	Exchange-traded energy futures and option contracts are valued individually at daily settlement prices determined on the futures markets that are published by their respective clearing houses. Paid initial margins are disclosed under other assets. Variation margins received or paid during the term of such contracts are stated under other liabilities or other assets, respectively.

F-73

---

Table of Contents

	•	Certain long-term energy contracts are valued by the use of valuation models that include average probabilities and take into account individual contract details and variables.

				December 31, 2004								December 31, 2003
Total Volume of Foreign Currency, Interest Rate and
Equity-Based Derivatives				Nominal				Fair				Nominal				Fair
€ in millions				value				value				value				value
FX forward transactions
	Buy				4,238.2				(41.3	)			2,149.5				(142.5	)
	Sell				5,328.6				134.2				4,789.8				174.6
FX currency options
	Buy				782.7				46.7				425.4				14.6
	Sell				422.2				(36.4	)			17.5				—
Subtotal					10,771.7				103.2				7,382.2				46.7
Cross currency swaps
	up to 1 year				499.1				(7.0	)			376.1				(25.1	)
	1 year to 5 years				11,033.7				484.2				3,464.8				251.1
	more than 5 years				7,163.8				236.3				7,304.6				188.9
Interest rate/cross currency swaps
	up to 1 year				102.3				1.4				51.1				(0.7	)
	1 year to 5 years				125.0				12.1				227.3				17.4
	more than 5 years				297.4				(38.5	)			297.4				(3.2	)
Subtotal					19,221.3				688.5				11,721.3				428.4
Interest rate swaps
	Fixed-rate payer
		up to 1 year			371.0				(5.4	)			315.1				(2.6	)
		1 year to 5 years			2,092.5				(107.9	)			1,567.5				(49.8	)
		more than 5 years			373.3				(36.6	)			1,283.9				(64.4	)
	Fixed-rate receiver
		up to 1 year			23.3				0.3				47.6				0.4
		1 year to 5 years			3,914.0				100.6				99.7				8.9
		more than 5 years			147.0				4.5				1,450.1				83.7
Subtotal					6,921.1				(44.5	)			4,763.9				(23.8	)
Interest rate options
	Buy up to 1 year				554.6				(7.2	)			—				—
		1 year to 5 years			—				—				220.3				0.1
		more than 5 years			—				—				—				—
	Sell up to 1 year				110.9				(2.0	)			—				—
		1 year to 5 years			—				—				220.3				(4.0	)
		more than 5 years			—				—				—				—
Subtotal					665.5				(9.2	)			440.6				(3.9	)
Equity swaps					63.8				103.0				76.5				158.3
Subtotal					63.8				103.0				76.5				158.3
Total					37,643.4				841.0				24,384.5				605.7

F-74

---

Table of Contents

											Thereof Trading
			December 31,								December 31,								December 31,
			2004								2004								2003
Total Volume of Electricity, Gas, Coal, Oil and Emissions Related Financial Derivatives			Nominal				Fair				Nominal				Fair				Nominal				Fair
€ in millions			value				value				value				value				value				value
Electricity forwards
	up to 1 year			7,521.9				41.6				6,537.0				9.7				7,514.0				(167.5	)
	1 year to 3 years			2,306.2				(39.9	)			1,866.8				(19.9	)			2,364.4				(59.7	)
	4 years to 5 years			59.6				(0.4	)			—				—				153.8				(7.0	)
	more than 5 years			7.5				(1.0	)			—				—				15.4				(0.4	)
Subtotal				9,895.2				0.3				8,403.8				(10.2	)			10,047.6				(234.6	)
Electricity swaps
	up to 1 year			29.7				0.3				29.7				0.3				28.4				1.6
	1 year to 3 years			3.1				(0.1	)			3.1				(0.1	)			21.4				3.5
	4 years to 5 years			—				—				—				—				10.0				0.0
	more than 5 years			—				—				—				—				—				—
Subtotal				32.8				0.2				32.8				0.2				59.8				5.1
Electricity options
	up to 1 year			8.8				(0.2	)			8.0				0.0				49.3				0.2
	1 year to 3 years			—				—				—				—				—				—
	4 years to 5 years			—				—				—				—				—				—
	more than 5 years			—				—				—				—				—				—
Subtotal				8.8				(0.2	)			8.0				0.0				49.3				0.2
Exchange traded electricity forwards
	up to 1 year			3,085.4				(93.3	)			2,053.8				(30.6	)			794.0				(83.5	)
	1 year to 3 years			1,309.9				(9.9	)			696.8				7.1				858.1				(42.5	)
	4 years to 5 years			—				—				—				—				—				—
	more than 5 years			—				—				—				—				—				—
Subtotal				4,395.3				(103.2	)			2,750.6				(23.5	)			1,652.1				(126.0	)
Exchange traded electricity options
	up to 1 year			64.9				(1.5	)			58.6				(1.1	)			101.5				(1.5	)
	1 year to 3 years			132.6				(1.6	)			132.6				(1.6	)			6.2				(4.4	)
	4 years to 5 years			—				—				—				—				—				—
	more than 5 years			—				—				—				—				—				—
Subtotal				197.5				(3.1	)			191.2				(2.7	)			107.7				(5.9	)
Coal forwards and swaps
	up to 1 year			1,541.6				26.8				844.5				1.5				269.2				3.4
	1 year to 3 years			851.2				18.3				283.6				2.2				129.2				13.9
	4 years to 5 years			112.0				1.1				—				—				—				—
	more than 5 years			—				—				—				—				—				—
Subtotal				2,504.8				46.2				1,128.1				3.7				398.4				17.3
Oil derivatives
	up to 1 year			405.0				28.5				89.5				0.4				336.2				9.6
	1 year to 3 years			266.0				28.1				—				—				91.8				4.3
	4 years to 5 years			2.8				0.0				—				—				—				—
	more than 5 years			—				—				—				—				—				—
Subtotal				673.8				56.6				89.5				0.4				428.0				13.9
Gas forwards
	up to 1 year			1,606.8				77.4				4.2				0.1				2,714.5				102.1
	1 year to 3 years			1,117.9				131.7				7.0				0.0				832.8				71.3
	4 years to 5 years			426.0				2.0				—				—				389.6				31.2
	more than 5 years			—				—				—				—				453.4				58.9
Subtotal				3,150.7				211.1				11.2				0.1				4,390.3				263.5
Gas swaps
	up to 1 year			1,908.1				78.1				809.7				0.8				261.6				1.1
	1 year to 3 years			1,513.9				143.6				364.2				5.9				28.1				2.3
	4 years to 5 years			503.1				(7.0	)			—				—				—				—
	more than 5 years			373.8				(24.2	)			—				—				—				—
Subtotal				4,298.9				190.5				1,173.9				6.7				289.7				3.4
Gas options
	up to 1 year			34.1				(7.6	)			—				—				419.3				(10.6	)
	1 year to 3 years			24.5				(7.7	)			—				—				502.1				(4.7	)
	4 years to 5 years			—				—				—				—				56.4				5.7
	more than 5 years			—				—				—				—				—				—
Subtotal				58.6				(15.3	)			—				—				977.8				(9.6	)
Emissions related derivatives
	up to 1 year			28.8				(0.5	)			11.3				0.1				—				—
	1 year to 3 years			5.9				(0.1	)			—				—				—				—
	4 years to 5 years			—				—				—				—				—				—
	more than 5 years			—				—				—				—				—				—
Subtotal				34.7				(0.6	)			11.3				0.1				—				—
Total				25,251.1				382.5				13,800.4				(25.2	)			18,400.7				(72.7	)

F-75

---

Table of Contents

		December 31, 2004
		Total								Up to 1 Year								1 to 5 Years								More than 5 Years
Rating of Counterparties						Counter-								Counter-								Counter-								Counter-
Standard & Poor’s and/or Moody’s		Nominal				party				Nominal				party				Nominal				party				Nominal				party
€ in millions		Value				Risk				Value				Risk				Value				Risk				Value				Risk
AAA and Aaa through AA- and Aa3			27,387.9				1,783.8				9,421.2				347.7				12,089.9				686.3				5,876.8				749.8
AA- and A1 or A+ and Aa3 through A- and A3			18,960.4				583.8				8,254.7				202.5				9,192.6				324.3				1,513.1				57.0
A- and Baa1 or BBB+ and A3 through BBB- or Baa3			2,707.0				142.8				1,414.1				74.1				973.8				42.5				319.1				26.2
BBB- and Ba1 or BB+ and Baa3 through BB- and Ba3			522.7				22.3				380.5				17.2				142.2				5.1				—				—
Other(1)			8,723.6				467.6				5,009.9				280.1				3,059.8				127.7				653.9				59.8
Total			58,301.6				3,000.3				24,480.4				921.6				25,458.3				1,185.9				8,362.9				892.8

(1)	This position consists primarily of parties to contracts with respect to which E.ON has received collateral from counterparties with ratings of the above categories or with an equivalent internal rating.

F-76

---

Table of Contents

			December 31, 2004								December 31, 2003
€ in millions			Book value				Fair value				Book value				Fair value
Assets
	Loans			1,438				1,477				1,785				1,787
	Securities			8,617				8,617				7,969				7,969
	Financial receivables and other financial assets			2,124				2,124				2,192				2,192
	Liquid funds			4,233				4,233				3,807				3,807
Total				16,412				16,451				15,753				15,755
Liabilities
	Financial liabilities			20,301				21,168				21,787				22,498

€ in millions		2004				2003
Income			4,846				4,736
Expenses			2,530				2,402
Receivables			1,686				1,999
Liabilities			1,973				2,353

F-77

---

Table of Contents

	•	The Central Europe market unit, led by E.ON Energie AG, Munich, Germany, focuses on E.ON’s integrated electricity business and the downstream gas business in central Europe.
	•	Pan-European Gas is responsible for the upstream and midstream gas business. Additionally, this market unit holds a number of minority shareholdings in the downstream gas business. The lead company of this market unit is E.ON Ruhrgas AG, Essen, Germany.
	•	The U.K. market unit encompasses the integrated energy business in the United Kingdom. This market unit is led by E.ON UK plc., Coventry, U.K.
	•	The Nordic market unit, which is led by E.ON Nordic AB, Malmö, Sweden, focuses on the integrated energy business in Northern Europe.
	•	The U.S. Midwest market unit, led by LG&E Energy LLC, Louisville, Kentucky, U.S., is primarily active in the regulated energy market in the U.S. state of Kentucky.
	•	The Corporate Center contains the interests managed directly by E.ON AG, E.ON AG itself, and consolidation effects at the Group level.

F-78

---

Table of Contents

€ in millions		2004				2003				2002
Adjusted EBIT			7,361				6,228				4,649
Adjusted interest income (net)			(1,140	)			(1,663	)			(832	)
Net book gains			589				1,257				1,071
Cost-management and restructuring expenses			(108	)			(479	)			(331	)
Other non-operating earnings			97				195				(5,316	)
Income/(Loss) from continuing operations before income taxes and minority interests			6,799				5,538				(759	)
Income taxes			(1,947	)			(1,124	)			662
Minority interests			(504	)			(464	)			(623	)
Income/(Loss) from continuing operations			4,348				3,950				(720	)
Income/(Loss) from discontinued operations, net			(9	)			1,137				3,306
Cumulative effect of changes in accounting principles, net			—				(440	)			191
Net income			4,339				4,647				2,777

F-79

---

Table of Contents

			Central Europe												Pan-European Gas												U.K.												Nordic
€ in millions			2004				2003				2002				2004				2003				2002(1)				2004				2003				2002				2004				2003				2002
External sales				20,540				18,983				16,068				13,859				12,573				549				8,480				7,915				3,162				3,281				2,776				2,490
Intersegment sales				212				270				272				567				400				18				10				8				—				66				48				81
Total sales				20,752				19,253				16,340				14,426				12,973				567				8,490				7,923				3,162				3,347				2,824				2,571
Depreciation and amortization				(1,121	)			(1,447	)			(1,239	)			(378	)			(429	)			(28	)			(575	)			(426	)			(196	)			(420	)			(386	)			(322	)
Impairments(2)				(185	)			(45	)			(6	)			(94	)			(4	)			—				—				—				—				—				(1	)			—
Adjusted EBIT				3,602				2,979				2,281				1,428				1,463				308				1,017				610				176				701				546				480
	Thereof: earnings from companies accounted for at equity(3)			143				290				269				419				406				143				43				36				16				10				21				40
Investments				2,527				2,126				5,508				660				667				435				503				388				2,672				740				1,265				956
	Intangible assets and property plant and equipment			1,388				1,255				1,148				145				214				38				511				322				149				350				369				434
	Financial assets			1,139				871				4,360				515				453				397				(8	)			66				2,523				390				896				522
Total assets				55,537				54,808				45,477				22,720				22,928				3,269				14,986				12,610				14,153				11,289				10,662				10,998

			U.S. Midwest												Corporate Center												Core Energy Business												Other Activities
€ in millions			2004				2003				2002				2004				2003				2002				2004				2003				2002				2004				2003				2002
External sales				1,913				1,971				1,260				52				141				146				48,125				44,359				23,675				978				2,068				12,949
Intersegment sales				—				—				—				(865	)			(737	)			(401	)			(10	)			(11	)			(30	)			10				11				30
Total sales				1,913				1,971				1,260				(813	)			(596	)			(255	)			48,115				44,348				23,645				988				2,079				12,979
Depreciation and amortization				(195	)			(200	)			(112	)			(23	)			(20	)			(23	)			(2,712	)			(2,908	)			(1,920	)			(139	)			(209	)			(974	)
Impairments(2)				—				—				—				(18	)			(26	)			—				(297	)			(76	)			(6	)			(11	)			(37	)			(9	)
Adjusted EBIT				349				317				241				(314	)			(319	)			(160	)			6,783				5,596				3,326				578				632				1,323
	Thereof: earnings from companies accounted for at equity(3)			17				17				29				(42	)			33				56				590				803				553				107				105				40
Investments				277				443				399				434				4,147				12,697				5,141				9,036				22,667				144				160				1,492
	Intangible assets and property plant and equipment			277				443				399				11				(53	)			(61	)			2,682				2,550				2,107				30				110				1,103
	Financial assets			—				—				—				423				4,200				12,758				2,459				6,486				20,560				114				50				389
Total assets				7,643				8,367				9,111				(3,672	)			(3,656	)			8,496				108,503				105,719				91,504				5,559				6,131				21,999

			E.ON Group
€ in millions			2004				2003				2002
External sales				49,103				46,427				36,624
Intersegment sales				—				—				—
Total sales				49,103				46,427				36,624
Depreciation and amortization				(2,851	)			(3,117	)			(2,894	)
Impairments(2)				(308	)			(113	)			(15	)
Adjusted EBIT				7,361				6,228				4,649
	Thereof: earnings from companies accounted for at equity(3)			697				908				593
Investments				5,285				9,196				24,159
	Intangible assets and property plant and equipment			2,712				2,660				3,210
	Financial assets			2,573				6,536				20,949
Total assets				114,062				111,850				113,503

(1)	Includes only the 2002 results of those entities transferred from Central Europe to Pan-European Gas during 2004 and 2003.
(2)	For all periods presented, the impairment charges included in adjusted EBIT deviated from the values reported in accordance with U.S. GAAP. In 2004, the deviation was due to impairment charges on real

F-80

---

Table of Contents

	property and on a municipal utility investment at the Central Europe market unit, as well as to an impairment charge recorded for an Asian power plant investment at the UK market unit, all of which are included in non- operating earnings. In 2003, the deviation was due to the impairment charge on an Asian power plant investment at the UK market unit, which was also included in non-operating earnings. Deviations in 2002 were due primarily to the goodwill stemming from the E.ON UK acquisition and the valuation allowance on the HypoVereinsbank shares, all of which were also recorded in non-operating earnings.
(3)	For all periods presented, earnings contributing to adjusted EBIT from companies accounted for at equity deviated from earnings from companies accounted for at equity in accordance with U.S. GAAP. In 2004, this deviation was the result of the impairment charge on a municipal utility investment at the Central Europe market unit and of an impairment charge on an Asian power plant investment at the UK market unit, all of which are included in non- operating earnings. In 2003, the deviation was due to the reclassification of at equity earnings from RAG in other non-operating earnings and to the impairment charge on the UK market unit’s Asian power plant investment, which was recorded in other non-operating earnings. In 2002, the deviation resulted from the book gain on the disposal of Schmalbach-Lubeca and the sale of the STEAG interest, both of which were recorded in other non-operating earnings.

€ in millions		2004				2003				2002
Interest and similar expenses (net) as shown in Note 6			(1,141	)			(1,107	)			(372	)
(+) Non-operating interest income (net)(1)			138				(62	)			164
(-) Interest portion of long-term provisions			137				494				624
Adjusted interest income (net)			(1,140	)			(1,663	)			(832	)

(1)	This figure is calculated by adding interest expenses and subtracting interest income.

															Europe (Eurozone
			Germany												excluding Germany)												Europe (other)												United States												Other												Total
€ in millions			2004				2003				2002				2004				2003				2002				2004				2003				2002				2004				2003				2002				2004				2003				2002				2004				2003				2002
External sales
	by location of customer			29,775				28,281				20,215				2,354				2,404				3,190				14,303				12,554				6,705				2,322				2,619				3,884				349				569				2,630				49,103				46,427				36,624
	by location of company			31,388				29,832				22,825				1,656				1,697				1,985				13,608				11,936				6,300				2,293				2,689				4,027				158				273				1,487				49,103				46,427				36,624
Property, plant and equipment				23,171				23,418				23,463				1,283				1,331				1,379				15,327				13,898				11,708				3,693				4,044				5,379				89				106				498				43,563				42,797				42,427

F-81

---

Table of Contents

			Fixed				Variable				Compensation for
			compensation for				compensation for				Supervisory Board
			service on E.ON’s				service on E.ON’s				memberships at
Name			Supervisory Board				Supervisory Board				affiliated companies				Total
			(€)
Ulrich Hartmann				30,000				323,925				0				353,925
Hubertus Schmoldt				20,000				215,950				0				235,950
Günter Adam				10,000				107,975				0				117,975
Dr. Karl-Hermann Baumann				20,000				215,950				0				235,950
Ralf Blauth				15,000				161,963				0				176,963
Dr. Rolf-E. Breuer				10,000				107,975				0				117,975
Dr. Gerhard Cromme				15,000				161,963				0				176,963
Wolf Rüdiger Hinrichsen				15,000				161,963				0				176,963
Ulrich Hocker				10,000				107,975				0				117,975
Eva Kirchhof				10,000				107,975				0				117,975
Seppel Kraus				10,000				107,975				0				117,975
Prof. Dr. Ulrich Lehner				10,000				107,975				0				117,975
Dr. Klaus Liesen				10,000				107,975				0				117,975
Peter Obramski				10,000				107,975				0				117,975
Ulrich Otte				10,000				107,975				66,700				184,675
Klaus-Dieter Raschke				15,000				161,963				44,778				221,741
Dr. Henning Schulte-Noelle				15,000				161,963				0				176,963
Prof. Dr. Wilhelm Simson				10,000				107,975				0				117,975
Gerhard Skupke				10,000				107,975				14,250				132,225
Dr. Georg Freiherr von Waldenfels				10,000				107,975				0				117,975
Attendance fees and meeting-related reimbursements(1)																97,838
	Total			265,000				2,861,340				125,728				3,349,906

(1)	Attendance fees and meeting-related reimbursements are given as an aggregate for all Supervisory Board members.

F-82

---

Table of Contents

																			SARs
			Fixed annual				Annual				Gains from								granted
Name			compensation				bonus				exercising SARs				Total				in 2004
			(€)				(€)				(€)				(€)				(No. of
																			SARs)
Dr. Wulf H. Bernotat				1,025,000				2,100,000				0				3,125,000				95,339
Dr. Burckhard Bergmann				650,000				1,400,000				0				2,050,000				63,559
Dr. Hans Michael Gaul				650,000				1,400,000				109,935				2,159,935				63,559
Dr. Manfred Krüper				650,000				1,400,000				0				2,050,000				63,559
Dr. Erhard Schipporeit				650,000				1,400,000				107,800				2,157,800				63,559
Dr. Johannes Teyssen				530,000				1,100,000				100,200				1,730,200				52,966
Other compensation																503,962
	Total			4,155,000				8,800,000				317,935				13,776,897				402,541

F-83

---

Table of Contents

F-84

---

Table of Contents

	E.ON AG

	By:	/s/ Dr. Erhard Schipporeit

	Dr. Erhard Schipporeit
	Member of the Board of Management and
	Chief Financial Officer
	/s/ Michael C. Wilhelm
	Michael C. Wilhelm
	Senior Vice President Accounting