Condensed Interim Financial Statements
E.ON International Finance B.V.
Interim Report 2015
1 January 2015 – 30 June 2015
Rotterdam, The Netherlands
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Condensed Interim Financial Statements
2
Content
Company Board and Management
Report of the Board of Management
Statement from the Board of Management
Balance Sheet (before profit appropriation)
Income Statement
Cash Flow Statement
Notes to the Condensed Interim Financial Statements
3 5 6 7 8 9 Condensed Interim Financial Statements
Report of the Board of Management
General information
As of June 30, 2015 the Board of Managers comprises the following members:
 Mr. J. Otto
 Mr. R.A. Toering
During the first half of 2015, the composition of the Board of Management did not change
compared to the financial year ending December 31, 2014.
The objectives of E.ON International Finance B.V. are unchanged compared to the financial year
ending December 31, 2014. E.ON International Finance B.V. continues to be a wholly owned and
fully consolidated subsidiary of E.ON SE, Düsseldorf, Germany.
Internal organisation
The statutory seat and the office of E.ON International Finance B.V. is Capelseweg 400 in
Rotterdam.
At June 30, 2015 E.ON International Finance B.V. had no own employees (2014: 0). All personnel
is either seconded from other E.ON group companies or employed by E.ON Benelux N.V. under a
service level agreement.
Market review
Beginning 2015 the capital markets again continued their positive tone started in previous years.
The announcement of the European Central Bank in January 2015 to start a new and expanded
asset purchase programme even further improved the market sentiment resulting in new historical
stock market highs and reduced volatility during Q1. However, during Q2 the European sovereign
crisis – this time solely focused around Greece – came back into the focus. Together with still
existing geopolitical problems, this significantly increased market volatilities. Irrespective of that,
the economic growth in Europe and the United States however remained positive fuelling some
discussion about the end of supporting measures by the U.S. Central Bank and first interest rate
increases starting still in 2015.
On foreign exchange rates the weakening of the Euro against most of the major currencies
continued in Q1. Such trend somewhat stopped in Q2 but increased volatilities then resulted in
somewhat fluctuating exchange rates. Emerging market currencies again moved significantly
during the reporting period.
On the interest side the picture was twofold: while the new ECB asset purchase programme
resulted in the beginning in new historical lows for both long-term and short-term rates, long-term
rates later on changed this trend and increased to 2014 levels, while short-term rates stayed in
negative territories.
Credit spreads stopped their positive trend from previous years, with most of the issuers only
widening slightly or even remaining stable during the first half of 2015. Utility spreads experienced
almost entirely a slight widening still leaving the yields at very low levels. As to issuance volumes,
the Euro Corporate Bond market issuance volumes increased compared to the first half of 2014,
however volumes dropped significantly towards the end of the reporting period. Net supply
including redemptions remained positive for the corporate market, but the issuances returned to
much less complexity.
Business review
Also in the first half of 2015 the liquidity situation of the E.ON group continued to be strong,
resulting in no new notes issuance for E.ON International Finance B.V. Moreover, as no bonds
matured during the first half of 2015 the nominal amount of bonds outstanding remained
unchanged compared to year-end 2014. Only due to the foreign exchange effects of € 0.6 billion –
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Condensed Interim Financial Statements
which are mainly driven by the weakening of the Euro against the British Pound and the U.S.
Dollar – the total amount of notes outstanding as of June 30, 2014 increased to € 14.8 billion
compared to € 14.2 billion of bonds outstanding at year end 2014.
Besides the above pictured foreign exchange effects on the Euro value of Non-Euro denominated
bonds, the market developments only had a limited impact on E.ON International Finance B.V.’s
bond business. In line with the overall market developments E.ON spreads widened moderately
during the first half of 2015 still proving the stable confidence of investors in the E.ON credit.
E.ON continues to have credit ratings assigned from both Standard & Poor’s (“S&P”) and Moody’s.
Long-term credit ratings assigned are BBB+ and Baa1, respectively. The short-term ratings are A2 (S&P) and P-2 (Moody´s). Moody’s changed the assigned rating in March 2015 from A3 to Baa1.
S&P changed the assigned ratings in May 2015 from A- to BBB+. The outlook on both ratings is
stable. Following E.ON’s announcement of a new strategy in December 2014, both agencies had
placed its respective ratings under review for a potential downgrade. As all bonds issued are
guaranteed by E.ON SE, the ratings continue to be a significant support of the bond business of
E.ON International Finance B.V.
In terms of the intra-group financing business, in the first half of 2015 E.ON International Finance
B.V. continued taking up intra-group loans or E.ON SE guaranteed short term deposits to fund
lending activities to other E.ON group companies. Lending activities reduced due to loan
repayments on short term loans granted. As of June 30, 2015 loans totalling € 3.9 billion were
granted on a short term basis, compared to € 4.7 billion as of year-end 2014. Additionally, E.ON
International Finance B.V. held liquidity amounting to € 0.7 billion as of June 30, 2015.
As a result of the above, the total asset base declined to € 20.0 billion as of June 30, 2015
compared to € 20.6 billion at year end 2014. Furthermore, E.ON International Finance B.V.’s net
profit declined from € 12.6 million to € 10.1 million. The main reasons were the lower average
lending volumes within the treasury activities and the reduced on-lending of long term bonds due
to the repayment of maturing loans and bonds in the second half of 2014. The reduced interest
rates also lowered the income during the reporting period.
During the first half of 2015 no drawings were made on behalf of E.ON International Finance B.V.
under both the € 5 Billion Syndicated Credit Facility and the € 10 Billion Multi Currency Commercial
Paper Programme.
In April 2015, E.ON’s Debt Issuance Programme was again extended for another year. The Debt
Issuance Programme enables both E.ON SE and E.ON International Finance B.V. to issue debt to
investors in public and private placements. The total programme volume is unchanged at
€ 35 billion.
Financial information
Preparation of Financial Statements
The financial statements were prepared in accordance with the statutory provisions of Part 9, Book
2, of the Netherlands Civil Code and the firm pronouncements in the Guidelines for Annual
Reporting in the Netherlands as issued by the Dutch Accounting Standards Board.
The Interim Report 2015 has followed the same principles of recognizing and measuring as have
been used for the preparation of the Financial Report 2014.
The Interim Report 2015 has not been audited nor has it been reviewed by an auditor.
Financial performance
E.ON International Finance B.V. closed the first six months of 2015 with a profit from ordinary
activities before taxes of approximately € 13.5 million, compared to € 16.8 million in the first half of
2014.
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Condensed Interim Financial Statements
5
Risk Information
E.ON International Finance B.V.’s activities expose it to a variety of financial risks: market risk
(including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk),
credit risk and liquidity risk. The risk profile of E.ON International Finance B.V. did not materially
change compared to the end of 2014.
The overall risk management programme of E.ON International Finance B.V. focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on E.ON
International Finance B.V.’s financial performance.
E.ON International Finance B.V. manages its risks with the procedures and systems used within
the E.ON group. The Board is of the opinion that these procedures and systems provide an
adequate risk management for E.ON International Finance B.V.
Statement from the Board of Management
The Board of Management state that to the best of their knowledge, the condensed interim
financial statements of 2015 is prepared in accordance with the statutory provisions of Part 9, Book
2, of the Netherlands Civil Code and the firm pronouncements in the Guidelines for Annual
Reporting in the Netherlands as issued by the Dutch Accounting Standards Board, give a true and
fair view of the assets, liabilities, financial position and profit or loss of E.ON International Finance
B.V. and that the management report includes a fair review of the development and performance
of the business and the position of the E.ON International Finance B.V., together with a description
of the principal risks and uncertainties that it faces.
The Interim Report 2015 has not been audited nor has it been reviewed by an auditor.
Rotterdam, August 27, 2015
Board of Management, E.ON International Finance B.V.
J. Otto
Director
R.A. Toering
Director
Condensed Interim Financial Statements
6
Balance Sheet (before profit appropriation)
€ in thousands
Financial fixed assets
Loans to shareholder
Loans to group entities
Dec 31, 2014
8,876,491
3,778,857
12,655,348
9,709,683
3,550,945
13,260,628
2,651,768
3,997,299
4,648
6,653,715
1,419,375
4,834,320
6,253,695
678,824
1,079,868
19,987,887
20,594,191
200
36,992
225,767
10,113
273,072
200
36,992
201,100
24,667
262,959
28,621
162
28,783
36,158
207
36,365
12,464,205
13,049,145
31,119
4,493,461
2,697,247
7,221,827
1,369,968
4,390,173
1,483,726
1,855
7,245,722
19,987,887
20,594,191
Note
3
3
Current assets
Amounts due from shareholder
Amounts due from group entities
Amounts due from tax authorities
Cash
Jun 30, 2015
4
Total assets
Shareholders’ equity
Issued share capital
Share premium reserve
Other reserves
Undistributed profit
5
Provisions
Provision for loss making contracts
Provision for deferred taxes
Borrowings
Bonds
Current liabilities
Amounts due to shareholder
Amounts due to group entities
Amounts due to others
Amounts due to tax authorities
Total equity and liabilities
6
Condensed Interim Financial Statements
7
Income Statement
Six months ended June 30,
2015
2014
€ in thousands
Note
Interest and similar income
Exchange rate difference gains
Financial income
9
496,020
662,563
1,158,583
545,809
340,584
886,393
Interest and similar expenses
Exchange rate difference losses
Financial expenses
10
(482,252)
(662,573)
(1,144,825)
(528,734)
(340,627)
(869,361)
13,758
17,032
Operating expenses
(288)
(192)
Total operating expenses
(288)
(192)
Result of ordinary activities before corporate
income tax
13,470
16,840
Corporate income taxes
(3,357)
(4,210)
Net Profit
10,113
12,630
Total financial result
Condensed Interim Financial Statements
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Cash Flow Statement
Six months ended June 30,
2015
2014
€ in thousands
Interest paid
Interest received
Expenses paid
Income tax paid
(482,325)
497,215
(27)
(9,823)
(642,541)
682,928
(231)
(9,908)
5,040
30,248
(12,480,086)
13,324,003
(10,682,517)
13,740,433
843,917
3,057,916
10,600,000
(11,850,000)
8,040,000
(10,283,554)
(1,250,000)
(2,243,554)
Net increase (decrease) in cash
(401,043)
844,610
Cash at January 1
Cash at June 30
1,079,867
678,824
100,996
945,606
Cash flows from operating activities
Loans granted to related parties
Loan repayments received from related parties
Cash flows from investing activities
Proceeds from borrowings
Repayments of borrowings
Cash flows from financing activities
Condensed Interim Financial Statements
Notes to the Condensed Interim Financial Statements
(1) General information
The activities of E.ON International Finance B.V. mainly comprise the financing of E.ON group
companies.
E.ON International Finance B.V., a corporation with limited liability, having its statutory seat in
Rotterdam, the Netherlands, considers E.ON SE, Düsseldorf, Germany to be its ultimate parent
company. The financial information of E.ON International Finance B.V. is included in the
consolidated financial statements of E.ON SE, Germany. Copies of the consolidated financial
statements of E.ON SE can be obtained from E.ON SE in Düsseldorf.
The statutory seat and the office of E.ON International Finance B.V. is Capelseweg 400 in
Rotterdam.
These financial statements were authorized for issue by the Board of Management on
August 27, 2015.
(2) Summary of significant accounting policies
Basis of preparation
The Condensed Interim Financial Statements have been prepared in accordance with the statutory
provisions of Part 9, Book 2, of the Netherlands Civil Code and the firm pronouncements in the
Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting Standards
Board.
This interim report does not contain all information required for a full year financial report and
needs to be read in conjunction with the E.ON International Finance B.V. 2014 Annual Report,
which has been prepared in accordance with the statutory provisions of Part 9, Book 2, of the
Netherlands Civil Code and the firm pronouncements in the Guidelines for Annual Reporting in the
Netherlands as issued by the Dutch Accounting Standards Board.
The principles applied in preparing the Condensed Interim Financial Statement of E.ON
International Finance B.V. are similar to those applied in the E.ON International Finance B.V. 2014
Annual Report.
Comparison with prior period
The basis used for the valuation and result definition has remained unchanged with respect to the
year-end 2014.
Cash Flow Statement
The Cash Flow Statement was prepared according to the direct method. The funds included in the
Cash Flow Statement consist of cash at banks and the inhouse banking account with E.ON SE.
Cash flows in foreign currencies have been translated at the exchange rates existing on the day of
settlement.
Related parties
In conducting its activities, E.ON International Finance B.V. has several transactions with its
shareholder E.ON SE, E.ON group companies and non-consolidated E.ON companies. The types
and the content of the transactions with related parties remain unchanged compared to the E.ON
International Finance B.V. 2014 Annual Report.
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Condensed Interim Financial Statements
10
Foreign currency translation
The functional currency as well as the reporting currency of E.ON International Finance B.V, is the
Euro (€). The financial statements are presented in Euro.
Transactions denominated in foreign currencies are translated at the exchange rate at the date of
the transaction. Monetary foreign currency items are adjusted to the exchange rate at each
balance sheet date; any gains or losses resulting from fluctuations in the relevant currencies are
included in the financial income and expenses, respectively.
Settled transactions in foreign currencies during the reporting period have been incorporated in the
financial statements at the rate of settlement.
The following table shows the movements in exchange rates of the relevant foreign currencies for
the periods indicated:
Jun 30, 2015
Dec 31, 2014
Jun 30, 2014
0.71
1.12
137.01
9.22
27.25
8.79
8.67
0.79
1.21
145.23
9.39
27.73
9.04
9.42
0.80
1.37
138.44
9.18
27.45
8.40
10.59
ISO code
British Pound
U.S. Dollar
Japanese Yen
Swedish Krona
Czech Koruna
Norwegian Krone
Hong Kong Dollar
EUR/GBP
EUR/USD
EUR/JPY
EUR/SEK
EUR/CZK
EUR/NOK
EUR/HKD
Critical accounting estimates and judgments
The preparation of the financial statements requires management to make estimates and
assumptions. It also requires management to exercise its judgment in the process of applying
E.ON International Finance B.V.’s accounting policies. Estimates and judgments are based on past
experience and on additional knowledge obtained on transactions to be reported and are reviewed
on an ongoing basis. E.ON International Finance B.V. makes estimates and assumptions
concerning future events. Actual events may differ from expectations and actual results will, by
definition, seldom equal the accounting estimates.
Unless explained otherwise, the estimates made by the management in preparing the Condensed
Interim Financial Statement are similar to those used in the E.ON International Finance B.V. 2014
Annual Report.
Condensed Interim Financial Statements
11
(3) Financial fixed assets
Movement schedule financial fixed assets
Jun 30, 2015
Total Loans to Total Loans
Total
Shareholder
to Group
Financial
Entities
Fixed assets
€ in thousands
At January 1, 2015
- New loans
- Amortization
- Exchange differences
- Current maturity
At June 30, 2015
9,709,683
2,211
402,100
(1,237,503)
8,876,491
3,550,945
182
227,730
3,778,857
13,260,628
2,393
629,830
(1,237,503)
12,655,348
During the first six months of 2015, E.ON International Finance B.V. did not issue any new long
term loans. The amount of total financial fixed assets reduced due to the reclassification of long
term loans into the current maturity. This reduction however has been partially compensated by the
value increase of British Pound and U.S. Dollar denominated loans due to the weakening of the
Euro against these currencies.
The following table shows a detailed breakdown of these developments:
Carrying amounts of loans in currencies to shareholder
€ in thousands
EUR
USD
GBP
Jun 30
2015
Dec 31
2014
6,349,067
2,671,891
2,210,504
6,347,527
2,460,942
2,018,255
11,231,462
10,826,724
Reclassification to current assets
2,354,971
1,117,041
Total long term loans in currencies to shareholder
8,876,491
9,709,683
Total loans to shareholder
As there have been no repayments of loan during the first half of 2015 the nominal amounts
granted remained unchanged. However, due to the weakening of the Euro mainly against the
British Pounds and the U.S. Dollar, the Euro value of loans denominated in these currencies
increased. Such increases partially compensated the reduction resulting from the reclassification of
long term loans into current maturities. Overall the structure of the loan portfolio shifted slightly
further towards Non-Euro denominated loans.
Carrying amounts of loans in currencies to group entities
€ in thousands
Jun 30
2015
Dec 31
2014
EUR
GBP
Other
1,110,000
2,583,595
85,262
1,110,000
2,358,058
82,887
Total loans to group entities
3,778,857
3,550,945
-
-
3,778,857
3,550,945
Reclassification to current assets
Total long term loans in currencies to group entities
Also on the loans to group entities there had been no repayments during the first half of 2015
leaving the nominal amounts also unchanged. The increase in the total amount granted is solely
due to the weakening of the Euro resulting in an increase of the Euro values of mainly British
Pound denominated loans. The overall structure of this loan portfolio remained fairly unchanged.
Condensed Interim Financial Statements
12
(4) Cash
Specification of Cash
€ in thousands
Jun 30
2015
Dec 31
2014
Cash and cash equivalents
Inhouse banking account at shareholder
20
678,804
19
1,079,849
Cash
678,824
1,079,868
Total cash mainly includes the inhouse banking account at E.ON SE. Having such an inhouse
banking account at E.ON SE is common practice within the E.ON group. The decrease in the cash
balance is a result of usage of such funds for short term intragroup lendings. E.ON International
Finance B.V. has this cash balance to be able to respond quickly to any new lending requests it
may receive. The total cash is at free disposal of E.ON International Finance B.V. and is almost
entirely denominated in Euro.
(5) Shareholders’ equity
The total authorized number of ordinary shares is 9,000 (2014: 9,000) with a par value of € 100 per
share. The number of issued shares is 2,000 (2014: 2,000). All issued shares are fully paid in.
The share premium results exclusively from additional paid in capital.
Movement schedule equity
Issu
ed
capi
tal
Share
premium
reserve
Other
reserves
Undistributed
profit
Total
At January 1, 2013
Appropriation of undistributed profit
Profit for the year ended Dec 31, 2014
200
-
36,992
-
172,462
28,638
-
28,638
(28,638)
24,667
238,292
24,667
At December 31, 2014
Appropriation of undistributed profit
Profit for the half-year ended June 30, 2015
200
-
36,992
-
201,100
24,667
-
24,667
(24,667)
10,113
262,959
10,113
At June 30, 2015
200
36,992
225,767
10,113
273,072
€ in thousands
Total equity of E.ON International B.V. increased to € 273 million due to the Net Profit of
€ 10 million achieved in the first six months of 2015.
Condensed Interim Financial Statements
13
(6) Bonds
Movement schedule bonds
€ in thousands
Jun 30
2015
Dec 31
2014
At January 1
- Amortization
- Bond buyback transaction
- Exchange differences
- Current maturity
13,049,145
2,668
649,895
(1,237,503)
14,717,560
8,331
(1,150,000)
590,295
(1,117,041)
At Balance sheet date
12,464,205
13,049,145
In the first six months of 2015 no new bonds were issued due to the continuously strong liquidity
situation of the E.ON group. The reduction in the long term bond amounts outstanding resulted
from the reclassification of bonds maturing in the next 12 months into the current maturity item.
This reduction was partially offset by the increase in the Euro amount of Non-Euro denominated
bonds outstanding due to the weakening of the EUR mainly against the British Pound and the U.S.
Dollar. However, the nominal denominated amounts of bonds outstanding did not change.
The carrying amounts of the bonds are denominated in the following currencies:
Carrying amounts of bonds in currencies
€ in thousands
EUR
GBP
USD
JPY
Other currencies
Total bonds
Reclassification current liabilities
Total long term bonds
Jun 30
2015
Dec 31
2014
6,965,531
4,789,803
2,672,059
188,436
203,347
6,966,183
4,369,566
2,461,121
177,672
191,644
14,819,176
14,166,186
2,354,971
1,117,041
12,464,205
13,049,145
At the end of the first six months of 2015 E.ON International Finance B.V.’s outstanding bonds
continue to be mainly denominated in Euro, followed by British Pounds, and U.S. Dollar. As there
have been no bond maturities during the reporting period, the nominal amount of bonds
outstanding remained unchanged compared to year end 2014. The reduction in the total Euro
value of long term bonds outstanding resulted from the bonds maturing within the next 12 months
being reclassified to the current liabilities. Such reduction was partially compensated by the
increases in the Euro values of Non-Euro denominated bonds as the Euro weakened against all
currencies in which E.ON International Finance B.V. has bonds outstanding. Consequently the
structure of the bonds outstanding did change slightly towards the Non-Euro denominated bonds.
The market value of bonds per June 30, 2015 is € 18.2 billion (December 31, 2014: € 17.9 billion).
Condensed Interim Financial Statements
14
(7) Contingent liability
In addition to the liabilities carried on the balance sheet there are other (mostly long term)
commitments arising from contracts entered into with third parties on the basis of legal
requirements.
Specification notional amounts financial instruments
€ in thousands
Jun 30
2015
Dec 31
2014
Interest swaps
Currency swaps
35,503
2,343,858
35,503
2,690,304
Total amounts due to others
2,379,361
2,725,807
The change in currency swaps is mainly a result of changing hedges within the treasury activity of
E.ON International Finance B.V.
Specification fair values financial instruments
€ in thousands
Jun 30
2015
Dec 31
2014
Interest swaps
Currency swaps
(5,206)
(69,001)
(6,046)
(73,121)
Total amounts due to others
(74,207)
(79,167)
The changes in the fair value amount of currency swaps corresponds to the changes in the foreign
exchanges rates of currencies hedged by such instruments. The reduction also results from the
reduced volumes of hedges within the treasury activities.
(8) Credit facility agreements
As of June 30, 2015 the following facilities are available:



€ 35 Billion Debt Issuance Programme
€ 10 Billion Multi Currency Commercial Paper Programme
€ 5 Billion Dual Currency Syndicated Credit Facility Agreement
In April 2015 the € 35 Billion Debt Issuance Programme was updated and extended for another
year. The Debt Issuance Programme enables both E.ON SE and E.ON International Finance B.V.
to issue debt to investors in public and private placements. The total programme volume is
unchanged at € 35 billion.
The terms and conditions of the other two facilities are unchanged compared to year end 2014.
Condensed Interim Financial Statements
15
(9) Interest and similar income
Specification interest and similar income
€ in thousands
Six months ended June 30,
2015
2014
- interest and similar income from shareholder
- interest and similar income from group entities
- interest and similar income from others
351,223
135,339
9,458
388,961
146,011
10,837
Total interest and similar income
496,020
545,809
Interest and similar income decreased in the first six months of 2015. This is mainly the result of
the reduction in interest income from shareholder corresponding to a reduced lending volume to
shareholder due to loan maturities and repayments during the second half of 2014 including the
liability management transactions executed. Interest and similar income from group entities also
decreased following reduced lending volumes and reduced interest rates. Interest income from
others mainly reflects the release of the provision for loss making contracts.
(10) Interest and similar expenses
Specification interest and similar expenses
€ in thousands
Six months ended June 30,
2015
2014
- interest expense to shareholder
- interest expense to group entities
- interest expense to others
32,212
3,675
446,365
44,644
8,450
475,640
Total interest and similar expense
482,252
528,734
Interest expenses decreased in the first half of 2015 mainly as a result of the reduced bond related
interest expenses following the repayment of maturing bonds during the second half of 2014
including the liability management transactions executed. Accordingly interest expense to others
decreased. Interest expense to shareholder decreased due to the reduced swap volumes and the
hence reduced interest payments under such swap contracts, but also due to lower volumes and
interest rates under the treasury activities of E.ON International Finance B.V.. Due to changes in
the E.ON group consolidation the interest expenses to associated companies have been
reclassified and are now included in the interest expense to group entities. Such interest expense
to group entities decreased due to the on average lower volumes and lower interest rates
compared to the first six months of 2014.
Rotterdam, August 27, 2015
Board of Management, E.ON International Finance B.V.
J. Otto
Director
R.A. Toering
Director