Debt Factor

Calculation and Development

To manage E.ON's capital structure we use a steering metric called debt factor. The debt factor is defined as economic net debt divided by EBITDA2.

The debt factor is calculated as follows:
EUR in millions Dec 31, 2017
Dec 31, 2016
Liquid funds
5,160 8,573
Non-current securities 2,749 4,327
Financial liabilities -13,021 -14,227
FX hedging adjustment 114 390
Net financial position -4,998 -937
Provisions for pensions -3,620 -4,009
Asset-retirement obligations¹
-10,630 21,374
Economic net debt -19,248 -26,320
Adjusted EBITDA
4,955 4,9362
Debt Factors 3.9 5.3
1 These figures are not the same as the asset-retirement obligations shown in our Consolidated Balance Sheet (December 31, 2017: - € 11,673; December 31, 2016 -€22,515 million). This is because we calculate our economic net debt in part based on the actual amount of our obligations
2
adjusted for non-operating effects

In addition to liquid funds also our non-current securities are taken into account when calculating economic net debt, as these are liquid investments predominantly used to fund our provisions.

The net financial position includes effects from foreign-currency hedging of financial transactions, which is analogous to the hedged underlying transaction.

Other items that are debt-like are also considered. These are mainly provisions for pensions and asset retirement obligations (less pre-payments).

The interest-rate environment at the balance-sheet date led in some cases to negative real interest rates on asset-retirement obligations. As a result, these provisions exceed the actual amount of the obligations as they stood at year-end 2017 excluding the effects of discounting and cost increases. This limits the relevance of our economic net debt as a key figure. E.ON wants economic net debt to continue to serve as a useful key figure that aptly depicts the debt situation. In the case of material provisions affected by negative real interest rates, E.ON henceforth uses the aforementioned actual amount of the obligation instead of the balance-sheet figure to calculate economic net debt.

Development of Debt Factors

Information on our finacial strategy and more. 

Calculation and Development of the Debt Factor


 

Overview of all public bonds issued or guaranteed by E.ON SE



E.ON International Finance B.V. is our Dutch finance entity. 

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More on our Commercial Paper Program
 

Program for the issuance of debt instruments.
 

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Presentations giving an overview on E.ON's funding program and finance strategy.

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