Annual Report 2010

Annual Report 2010
Energy for tomorrow

Change …
The spectre of impending climate change necessitates a fundamental
redesign of energy supply. EWE’s strategy is focused on this change. The
energy supply systems of the future are being developed collectively by
the business areas Energy, Telecommunications and Information Technology.
The North Sea island of Juist is particularly susceptible to climate change. Together with EWE, the local council has developed a
number of measures within the framework of the Juist eco-island project to massively reduce its CO 2 emissions.
k
Key figures and Group information
… brings new challenges
Objective 2020
The German federal government calls for a reduction in greenhouse gas emissions
of around 40 per cent compared to 1990 levels in Germany.
35 per cent
is the proportion of the energy supply planned to come from renewable sources
in Germany by 2020.
14,000 MW
installed offshore wind energy capacity in Germany by 2020
are predicted by the German Energy-Agency.
Euro 340 million
Annual investment needed by 2020, plus 1,550 kilometres of submarine cables,
in order to connect the offshore wind farms to the electricity grid.
Euro 20 billion
Yearly investment volume forecast in Germany
to build up a climate-friendly energy supply.
2 billion tonnes
Amount of greenhouse gases that could be saved worldwide every year with
intelligent electricity grids by 2050.
Title picture – Harnessing the wind
Renewable energies present electricity networks with considerable challenges. They are
being equipped with modern information and telecommunications technology in order
to deal with the wide fluctuations in power generated by wind turbines. The IT solutions
developed by the Group are applied in the EWE network control centre.
More on page 21

EWE Group key figures
EUr million 2010 2009 Change in %
Electricity sales in million kWh 17,809.5 14,067.8 26.6
Natural gas sales in million kWh 61,660.4 49,849.9 23.7
sales 1 6,969.6 5,798.4 20.2
return on sales in % -0.7 3.4 -120.6
EBITDa 751.4 825.9 -9.0
EBITDa margin in % 10.8 14.2 -23.9
EBIT 164.9 414.0 -60.2
EBIT margin in % 2.4 7.1 -66.2
Consolidated net profit for the period -50.7 199.4 -125.4
Capital expenditure (total) 631.6 698.8 -9.6
Cash flow from operating activities 398.7 647.2 -38.4
share capital 243.0 243.0 0.0
shareholders’ equity 3,286.4 3,409.8 -3.6
Equity ratio in % 31.6 32.6 -3.1
return on equity in % 3 -1.5 7.4 -120.3
Balance sheet total 10,394.8 10,453.9 -0.6
Borrowings 2 2,732.5 2,756.5 -0.9
Employees avg. 8,464 6,446 31.3
apprentices and trainees (31.12.) 493 500 -1.4
1 Without electricity and natural gas taxes
2 Bonds and liabilities to banks
3 The return on equity is calculated by dividing the net profit for the period by the
average amount of shareholders‘ equity in the current year and previous year.
Consolidated revenue
(EUR mill.)
8.000 8000
6.000 6000
4.000 4000
2.000 2000
0
0
5,798.4
6,969.6
2009 2010
Sales by business areas
(in per cent)
72.0
2010
The accounting methods applied may result
in rounding differences of +/- one unit
(euro, per cent, etc.)
12.0
16.0
EWE Energy
swb
New Markets
and ICT
EWE regions
CoRpoRATE CEnTRE /
ConSolidATion
EWE Ag
VNG aG 3
Oldenburg
Bremen
Poznań (Posen)
LUBUSKIE
DOLNOŚLĄSKIE
GERMAny
OPOLSKIE
EWE IMMOBIlIEN GmbH
Hanover
Wieluń
Berlin
Germany: EWE head office
Międzyrzecz
Poland, Turkey: sites of EWE subsidiaries
and / or Group holdings
Warszawa (Warschau)
ŚWIĘTOKRZYSKIE
LUBELSKIE
EWE EnErgiE Ag 2
EWE NETz GmbH
EWE WassEr GmbH
aequamus GmbH1 DOTI GmbH & Co. KG1 riffgat Beteiligungs
GmbH & Co. KG
MVr Müllverwertung
rugenberger Damm
GmbH & Co. KG1 1 Associated company 2 Subgroup or holding company 3 Held for sale
Oldenburg
Bremen
Hamburg
Hannover
EWE GRoup
Berlin
Międzyrzecz
Poznań
LUBUSKIE
DOLNOŚLĄSKIE
OPOLSKIE
Bursa
Istanbul
polAnd
Wieluń
TuRkEy
Warszawa (Warsaw)
ŚWIĘTOKRZYSKIE
Ankara
EWE EnERGy SWb nEW MARkETS
And iCT
LUBELSKIE
Kayseri
swb Ag 2 EWE Polska sp. z o.o. 2
EWE ENErjI a. Ş. 2
EWE TEl GmbH 2
BTC Business Technology
Consulting aG2 htp GmbH1 Ist
Bursa

2 EWE ANNUAL REPORT 2010 ENERGY FOR TOMORROW
3
04 26 16
Content magazine “Energy for tomorrow”
“WE ArE ExpEriEncing A pArAdigm Shift”
04 interview with the board of management
The demands of climate protection are leading to
profound changes in the energy industry. EWE is
positioning itself for the future and looking beyond
the borders of industries and market roles. The
Board of Management takes questions on goals,
challenges and opportunities.
EnErgy Supply in flux
10 Energy drives change
With its e 3 company strategy, EWE has committed
itself to energy renewability, energy efficiency and
energy conservation. This is the basis from which
the company can network the players in a modern
energy economy to form intelligent systems.
SolutionS in thrEE SEctorS of thE futurE
16 integrated solutions for now and the future
Energy, telecommunications and information technology
are sectors that will be of major importance
in the future, and EWE offers innovative products
and services in these fields that go far beyond the
traditional power and gas business.
EWE in itS rEgionS
22 regional roots and a regional future
As a largely municipally-owned company, EWE has
close links to its regions. Our decades of expertise is
a decisive strength as the supply of energy becomes
more and more decentralised.
10
EWE in nEW mArkEtS
26 Energetic investment in new markets
The transformation of energy supply systems is a
challenge without borders. EWE is using its infrastructure
expertise to open up new sales areas in
Poland and Turkey.
thinking in A broAdEr contExt
30 With the bigger picture in mind
EWE has its sights set on a holistic approach to
energy supply. For all of the Group’s employees,
this means thinking in a broader context.
22
30
Content
Financial report 2010
32 Management
32 Group review 2010
34 Letter from the Board of Management
38 Report of the Supervisory Board
40 Investor Relations
42 Corporate social responsibility
44 Group Management Report
45 Course of Business and Economic Environment
64 Earnings, Assets and Financial Position
73 Supplementary Report
73 Risk Report
76 Outlook
78 Consolidated Financial Statements
79 Income statement for the EWE Group
79 Statement of Comprehensive Income
for the EWE Group
80 Balance Sheet for the EWE Group
82 Statement of changes in shareholders’ equity
for the EWE Group
84 Cash flow statement fo r the EWE Group
85 Notes to the consolidated financial statements
for the EWE Group
163 Confirmation by the legal representatives
164 Auditors’ Report
165 Financial statements of the EWE AG
166 Balance Sheet for EWE AG
167 Income Statement for EWE AG
168 Service
168 Glossary
171 Index and list of abbreviations
172 Financial calendar
172 Imprint
Five-year financial summary EWE Group

4 EWE ANNUAL REPORT 2010 1. Interview with the Board of Management
ENERGY FOR TOMORROW
5
“ We are experiencing a
paradigm shift”
Interview with the Board of Management
The energy industry is in upheaval: in a world of scarcer resources and
impending climate change the supply of electricity and heat needs to
be completely rethought. The members of EWE’s Board of Management
Dr. Werner Brinker, Michael Wagener and Dr. Willem Schoeber explain
how the Group is positioning itself for the future.
The government in Berlin and the European Commission
in Brussels have set ambitious climate protection
goals – over the coming years and decades CO 2
emissions are to be cut drastically, particularly for the
generation and use of energy. How is EWE meeting
these challenges?
? Earth’s atmosphere compared with the pre-industrial era
Dr. Werner Brinker: For over 100 years the industrialised
countries have based their energy supply on burning
coal, oil and natural gas. Today we know that the
greenhouse gases this releases have an adverse effect
on the climate. When the European Union formulated
its energy policy goals in March 2007 it therefore followed
the demands of climate scientists and called for
limiting the average rise in the temperature of the
to 2 degrees Celsius. This sounds harmless at first. But it
conceals far-reaching consequences for global economic
activity. Germany accounts for just 2.7 per cent of worldwide
CO 2 emissions. We nevertheless have to reduce our
CO 2 emissions by 40 per cent by 2020 and by as much
as 95 per cent by 2050 compared with 1990 levels. The
energy industry is the largest source of CO 2 emissions,
accounting for around 46 per cent of the total. The industry
therefore has to undertake considerable efforts
as a result.
Many years ago EWE put the core components of a
low- emission energy economy at the heart of its corporate
strategy in the form of the e³ programme:
energy efficiency in generation, energy conservation in
use and an ever-growing proportion of renewable energies.
Together with our focus on research and development
this is how we support the ambitious climate
protection objectives.
Dr. Willem Schoeber: We are therefore expanding our
power and heat generation capacities with renewablesources
– primarily wind power and the processing of
biogas – because it is a particularly logical step within our
regions. At the same time, we are increasing the efficiency
of our conventional power plants, building a rapidresponse
gas and steam power plant, and helping our
customers to save energy with products and services.
? Offshore wind power is seen as a cornerstone of renewable
energy. Is the future energy supply to be found
out at sea?
Dr. Schoeber: In Germany’s future energy mix wind
power plays a central role. According to the German
Federal Environment Agency it should cover over half
of electricity production by 2050. It is not easy to build
a lot of new capacity on the mainland, although we
still see some potential. A large part will therefore be
dr. Werner brinker Chief Executive Officer
(2nd from right)
Michael Wagener Deputy Chief Executive
Officer (2nd from left)
dr. Willem Schoeber Member of the Board of
Management (right)
offshore in future. The construction of alpha ventus,
the first German offshore wind farm, marked a new
chapter in the use of wind power in the North Sea and
the Baltic Sea. EWE is deeply involved in this pioneering
project. The experience we gained in building and operating
the plant are now being used for other projects,
such as the RIFFGAT offshore wind farm.
Dr. Brinker: The aim is to make more and more wind
power available throughout Germany. That is only possible
if the electricity networks are expanded rapidly
and managed intelligently. Transmission capacities must
be built up so that wind power from the coast can reach
central and southern Germany. There are scenarios
assuming up to 14,000 megawatts of offshore-wind
capacity in Germany by 2020.

6 EWE ANNUAL REPORT 2010 1.
Interview with the Board of Management
ENERGY FOR TOMORROW 7
?
This requires vast investments in the electricity networks
and needs political support to harmonise the German
power transmission network and to wire it into an integrated
European network. At the same time, we must
not forget the local and regional distribution networks.
Here, the crucial aspect is whether intelligent networks
for better load management will be established quickly.
What makes an electricity grid smart? What does it
have to do to transport large quantities of electricity
from renewable sources?
Dr. Brinker: A key specification is for it to deal with
wide swings in the availability of wind and sun. Here on
the coast when there is a strong wind we often have
the situation that the region can’t make use of the renewable
power. The opposite can also happen: that energy
requirements are high, but there is no wind. Now
in future not only wind farms but also more and more
private photovoltaics and combined heat and power
systems will be integrated into the networks, which
will make the energy supply much more decentralised.
This will change the demands made of network load
management, which will have to incorporate many
more players than today, predict sharp fluctuations in
the power supply and react quickly.
“ With an increasingly decentralised
energy supply our regional roots
give us a distinct competitive
advantage.”
Dr. Werner Brinker
?
Michael Wagener: This will be made possible by the
use of modern telecommunications and information
technology. So more than ten years ago EWE started
building up its own telecommunications infrastructure
and extensive IT expertise.
What tasks must information and telecommunications
technology perform in order to create a smart grid?
Dr. Brinker: In the years ahead we will experience a paradigm
shift in the energy industry: the days when simple
networks just transported power from A to B are coming
to an end. We need an efficient interplay of all components
– from the producer to the individual consumers.
To achieve this we have to know at all times how much
electricity is being generated, how much is needed and
how the energy flows are distributed in the network.
Wagener: In this kind of intelligent system the telecommunications
technology is like the neural pathways that
connect all the components with one another and permanently
exchange information. EWE began rolling out
broadband technology at an early stage and is continuing
to develop it. However, the energy system needs more
than that – it needs a “consciousness”. This is the job of
the information technology that acts as the brain: it takes
the information from generators, users and nodes in the
network, assembles them into a complete picture and
thus enables the right decisions to be taken for controlling
the system. This applies to the management of the
power grid or a wind farm just as much as to a house hold,
which decides intelligently when and how it can make
efficient use of energy with the help of the technology.
? So private households are also supposed to play a
more active role in the energy supply. What can we expect
here?
Dr. Schoeber: More and more households are producing
energy themselves, be it with photovoltaics systems on
the roof or with fuel cells in the cellar – a cutting-edge
technology that we are already testing on a large scale.
These setups have to be part of an active system of
power generation management in order to balance the
fluctuations in renewable energies. In order to be able to
provide power and heat at different times under these
circumstances, heat storage systems are required.
?
Wagener: Great potential also lies in energy use. With
more efficient appliances and greater awareness households
could save a lot of energy and emissions – after
all, they produce more than one seventh of German CO 2
emissions. Furthermore, users can relieve pressure on
the grid by postponing part of their energy consumption.
For instance the freezer of the future will recognise when
a lot of wind power is available with the help of information
and communications technology and use it to
reduce its temperature further. When the wind drops
again it will get by for a while with less energy, and in
this way acts as a storage device.
Dr. Brinker: The EWE trio smartbox is already the first
step in this direction today: it shows our customers in
real time how much energy is being used in the house.
This makes it easy to track down “energy guzzlers”. Our
experience shows that this already enables a household
to lower its energy consumption by 10 per cent on
average. At times when generally less electricity is consumed,
customers also pay a lower price. This kind of
product motivates people to take a differentiated look
at their energy consumption.
If the politicians get their way, there will be an electric
car in every seventh garage by 2030. What does
that mean for tomorrow’s energy environment?
Dr. Brinker: As traffic accounts for 18 per cent of CO 2
emissions in Germany I can’t see any way around electric
mobility. But we see electric vehicles as much more
than just users of power. In future they will also play a
vital role as mobile storage devices for electricity from
renewable energies and contribute to counterbalancing
fluctuations in the wind and sun. That works by having
them recharge primarily when there is surplus power. If
on the other hand less energy is available, the cars – unless
they are actually in use at the time – can feed power
in again from their batteries.
With our E3 research vehicles we are finding out what a
system like this could look like in practice. Incorporating
the energy from electric cars into the power grid in
future will also require affordable, high-performance
batteries. The EWE research centre NEXT ENERGY has
therefore made the development of efficient storage
technologies one of its specialist areas.
?
“ Intelligent energy supply systems
require partnerships that go
beyond the borders of companies
and industries.”
Dr. Willem Schoeber
Many of these developments lie outside the traditional
territory of the energy sector. To what extent does
this change the role of an energy utility like EWE?
Dr. Brinker: For a long time an energy supplier only had
to provide its customers with energy – so its job stopped
pretty much at the wall socket. Energy was generated
centrally and fed in evenly. Building intelligent energy
supply systems with a high proportion of renewable energies
expands this role considerably: as an energy services
company we have long been an adviser to our customers.
We help them switch to more efficient technologies, we
advise them on saving energy and reducing emissions,
and we prepare them to take on a more active role in the
use and feed-in of energy.
Dr. Schoeber: Then there is the intensive cooperation
with more and more decentralised energy generators.
Together we have to find sensible solutions for controlling
production and distribution. The biogas plant on
the farm has to be included, as do the wind farms and
conventional power plants. This makes managing the
energy supply more and more demanding. Intelligent
energy supply systems are so complex in technological
and organisational terms that they require cooperation
beyond the boundaries of companies and industries.

8 EWE ANNUAL REPORT 2010 1.
Interview with the Board of Management
ENERGY FOR TOMORROW 9
?
Do you have any concrete examples of the type of
cooperation this has produced?
Dr. Brinker: In tomorrow’s systems the energy, information
and communications sectors will converge, and this
is a development that EWE has already completed. The
next step is to incorporate new areas such as household
appliances or mobility. With Bosch and Siemens appliances
we are testing intelligent freezers and have put the
E3 electric research vehicle on the road with Karmann.
Dr. Schoeber: We already have cooperation agreements
with large industrial customers to whom we market what
is known as replacement reserve. The customer reduces
or increases their power consumption temporarily depending
on demand in the network. That illustrates the
principle of a smart grid, even if it is still the smart employees
who make it possible today.
“ Telecommunications and
information technologies are the
preconditions for modern network
management.”
Michael Wagener
Wagener: The capital expenditure needed for the sustainable
conversion of the energy supply is immense. Many
projects have reached a scale of magnitude at which
medium-sized companies as individual investors can
no longer take on the risk. They can only be realised in
collaboration with other market participants. Both for
alpha ventus and for RIFFGAT we joined forces with
other companies from the energy industry to shoulder
the investment collectively.
?
?
How does a company like EWE, owned majoritarily
by local councils, hold its ground in such a global arena?
Dr. Brinker: Very nicely. Of course, in comparison with
enormous multinationals we as a regional energy supplier
are more dependent on cooperation for larger
projects. But with an increasingly decentralised energy
supply it is precisely our regional roots that give us a
distinct competitive advantage. As infrastructure experts
we know the situation on the ground, we are close to
our customers and well networked with the local councils
and the regional economy. This enables us to find
tailor-made solutions and respond flexibly to demand.
When power generation and consumption fluctuate
widely, those are important conditions for reconciling
supply and demand and for operating energy supply
systems efficiently and dependably.
Concentrating on individual regions also facilitates knowledge
transfer and networking. Local tradesmen have the
opportunity to learn about the new energy technologies
at our ZentrumZukunft future centre for instance. This
is the best groundwork for installing these technologies
in the region. The close cooperation with local councils
makes it possible to combine energy concepts seamlessly.
One example is Rugia: EWE is helping to reduce
consumption in properties there, and with its biogas
processing plant is making renewable energies from the
region usable at the same time.
Dr. Schoeber: And, not least, we are lucky with our location.
The North Sea coast offers ideal conditions for wind
energy and is becoming the centre of the entire offshore
industry. The predominantly rural areas in the north west
and in Brandenburg are also excellent for producing and
processing biogas.
We have talked a lot about future developments –
how close is this future and how do we get there?
Wagener: The paradigm shift in the energy supply requires
a great deal of stamina. This is due both to the
timeframes for technological developments and to the
enormous investment required. The cycles in the energy
industry mean it often takes 30 to 50 years before a
shift is completed – and sometimes even longer. Climate
change makes it even more important not to lose any
time. EWE began to organise itself around decentralised
energy supply systems and smart grids back in the
1990s. This means that we can already demonstrate
results today.
Dr. Schoeber: The share of renewable energies has
been increased sharply – the move into offshore wind
power and biogas processing are certainly milestones
in this regard. Over the years and decades ahead we
will continue to develop renewable energies dynamically.
Up to around 2050 the highly efficient use of
natural gas will act as a bridging technology and equalise
fluctuations in the wind and sun. Examples include
combined heat and power in flexible gas and steam
turbine power plants and especially in fuel cells, which
have an efficiency coefficient of up to 90 per cent.
Dr. Brinker: Today our customers can already use the
EWE trio smartbox, an intelligent electricity meter
which makes their energy consumption transparent
and helps to conserve energy. We also offer rates that
reward reductions in CO₂ emissions and the thoughtful
use of energy.
In Cuxhaven we have already set up a field trial for the
energy system of tomorrow: the eTelligence research
project. Expanding and converting the grid across the
The e³ programme from EWE
e³ = the three E’s – a formula that stands for the three
central components of the energy supply of the future:
expanding upon energy renewability, enhancing energy
efficiency and ensuring sustainable energy conservation.
EWE has turned these into the e³ programme, which focuses
on decentralised energy management (from top right
to bottom right: integrated photovoltaics system at the
Weser Stadium, EWE ZentrumZukunft, combined heat
and power plant with Stirling motor).
entire region will take decades, however. In many areas
there is still research work to be done. We are carrying
out practical trials to see how electric mobility and
households can be involved more actively. But it will
still be several years before electric vehicles conquer
the market and play an effective role in load management.
The introduction of intelligent household appliances
is also still quite a long way off.
It is also clear that technology alone cannot prepare the
path to the future. Politics at national and European
levels must establish a reliable framework – by means
of clear guidelines and support for research and development.
It must also define standards, so that the components
of intelligent networks speak a common language.
We will continue to advance the process with
intensive research, innovative products and entrepreneurial
drive.
k

10 EWE ANNUAL REPORT 2010 2. Energy supply in flux
ENERGY FOR TOMORROW 11
Out to sea: Wind power pioneer EWE has brought renewable energies to the forefront with alpha ventus,
Germany’s first offshore wind farm.
Energy drives change
Fundamental changes in energy supply are being brought about as
a result of climate protection. EWE has been actively contributing
to this change for decades. Germany’s Federal Ministry of Economics
and Technology named the company “Best Innovator” in 2010 for its
sustainable innovation management.
We are currently experiencing an upheaval in the way we
think about energy. We need to drastically reduce the
level of emissions from the generation of heat and power
if we want to confine climate change. The rising price of
raw materials and political conflicts have highlighted the
risks posed by resource scarcity while global industry and
the world’s population need more and more energy. EWE
committed itself early to tackling the challenges facing
the future of energy supply and partnered together with
representatives from the research and scientific communities
in 2006 to formulate a strategy for overcoming
them. EWE’s e³ corpor ate strategy – that of expanding
the use of renewable energies, increasing energy efficiency
and encouraging energy conservation – is based
on the “Bullensee Assumptions”, named after the place
near Bremen where they were formulated.
A new perspective is needed if we want to derive a large
proportion of our energy from renewable sources, as the
availability of wind and solar power varies greatly. These
power generation facilities are also decentralised and
provide individually less power than traditional power
plants. New solutions are required to tie all of these
small power generation facilities in with conventional
power plant blocks and the demands of the industrial
sector and private households. Networks need to be made
‘intelligent’ by ensuring a continuous exchange of data,
and consumers need to be involved more. That is why the
Oldenburg-based EWE Group is built on three pillars that
act and do business auto nomously, but also work hand
in hand to develop the energy systems of the future: energy,
telecommunications and information technology.
A focus on renewable energies
Wind, water, solar and biomass energy are sustain able
and environmentally friendly. Technologies must be
expanded quickly if energy is to be generated from these
sources in sufficient quantities and in a manner that is
economic ally viable – a task that calls for technical expertise
and a pioneering spirit.
The EWE Group is one of the players setting the pace in
this field in Germany and operates around 150 plants
of its own. In the 1980s, EWE was one of the first commercial
wind power operators in the world, and in 1990
it constructed Europe’s largest wind farm in East Frisia.
The sea will play an important role in the future of wind
energy. EWE is also the leading member of the consortium
involved in building Germany’s first offshore wind
farm, alpha ventus. Completed in 2009, the pioneering
project is providing EWE with the ex perience it needs
to construct and operate other sea-based wind farms
in the future.
EWE is also heavily involved in biogas – a sustainable
source of energy for heat and mobility. The Group uses
biomass to operate combined heat and power plants, and
also runs several biogas processing plants. These plants
make it possible to feed energy from sustainable resources
into the natural gas network. EWE also develops technically
sophisticated photovoltaics solutions. Bremen’s
Weser Stadium is home to the largest photovoltaics system
in Germany to be integrated into a building, making
it an energetically exemplary structure.

12 EWE ANNUAL REPORT 2010 2. Energy supply in flux
ENERGY FOR TOMORROW 13
The Weser power plant: energy in flux
The Weser power plant in Bremen-Hemelingen is the largest
new hydroelectric facility in northern Germany. When operating
at full capacity, the facility can provide enough electricity
to power around 17,000 households in Bremen, making for an
annual reduction of 35,500 tons in CO 2 emissions in comparison
to conventional power generation. The previous hydroelectric
plant on the Weser was destroyed in the devastating floods
that hit Bremen in 1981. This new facility takes account of the
Weser’s tidal cycle and has an innovative system of fishways to
keep fish in the river safe. Thus, the Weser power plant raises
the bar for hydroelectric power plants of this size.
Efficiency in conventional power generation
The ultimate goal for the future is to have an energy
supply which gets all of its energy from renewable
sources. Until this is technically and economically feasible,
however, energy supply will continue to draw on
conventional power plants. While the availability of wind
and solar energy depends on the weather, conventional
power plants provide power and heat continuously, allowing
them to compensate for the fluctuating nature
of renewable energies. New technologies improve efficiency,
enabling EWE subsidiary swb’s power plants to
keep their consumption of fossil fuels to the minimum
needed to do their job. Most of them rely on combined
heat and power systems, which use the waste heat produced
when generating electricity to heat households
and as process heat for factories. More and more, we
are seeing power plants burning waste instead of coal.
The power plant fleet will be backed up by a highly efficient
gas and steam-turbine power plant, which can be
brought on- and offline very rapidly and is therefore an
excellent complement to power generation from renewable
sources, where the power yield fluctuates.
Smart technology keeps the grids in balance
There used to only be fluctuations in the energy supply
system in terms of the amount of energy being used, with
peaks at particular times of day and a low consumption
at night. Now, because of the variable output of wind and
solar energy, there is an increasing amount of fluctuation
on the generation end as well. The key to the success of
modern energy systems therefore lies in the power grids
The facility is operated by Weserkraftwerk Bremen GmbH & Co.
KG, which is held equally by EWE’s subsidiary swb and wind
turbine manufacturer ENERCON, which also manufactures the
hydroelectric power plant’s turbines. As Bremen’s regional energy
supplier, swb AG will be offering the electricity produced by
the Weser to their customers there as an eco-power product.
By working together, the regional companies are strengthening
north Germany’s reputation as an economic centre for
renewable energies.
and the smart systems managing them. Power must be
directed and used with precision to prevent the grid
from being overloaded or undersupplied. Accomplishing
this requires knowing the exact level of supply and demand
across the grid. Easier said than done, given that
this involves coordinating multiple decentralised power
plants and incorporating the consumption patterns of
customers. EWE is testing virtual power plants, in which
various energy producers work together over an intelligent
network. This allows them to compensate for fluctuations
in the amount of electricity being provided and
share the responsibility for producing the energy needed.
A lot of information needs to come together to manage
this process quickly and precisely. This makes a constant
Flow of energy: Near the CHP plant in Hastedt the Weser power plant
uses the current of the river to generate carbon-free power.
flow of data between power generation facilities, network
nodes and consumers vital. That is why the electricity
grid is being fitted with modern information and communication
technology.
EWE paved the way for merging the energy and telecommunications
networks very early on. The company
was laying pipes for a telecommunications network
alongside natural gas lines back in the 1980s. Since the
establishment of the telecommunications branch in
1996, the EWE network has grown to 14,800 kilometres
of copper cable and over 15,500 kilometres of high- speed
fibre optic cable. The Group has its own IT division, which
develops systems inhouse to process data streams and
use them for the purposes of grid management.
The customer is actively involved
Great potential for the energy supply of the future lies
in the customer. More and more households are producing
and using their own electricity and heat on site.
Beside the widespread solar power, fuel cells are a good
example for this andwill be a major part of future energy
supply systems. They use a chemical reaction to convert
biogas or natural gas into heat and electricity. The
combined heat and power principle works particularly
well in these heating systems because they make very
efficient use of their fuel. The technology is not quite
market-ready yet, but the many years of research and
development are showing progress. EWE is heavily involved
in the to-date largest pilot project examining
the suitability of fuel cells for daily use. For this project,
800 homes in Germany have been fitted with this
Efficiency: When power is generated at the CHP plant in Hastedt, it
creates heat that is used for buildings via a district heating network.
advanced technology. These systems can be linked into
virtual power plants, allowing them to play an active
role in grid management.
eTelligence:
networked energy
A stormy day at the coast – it is full speed ahead for the
wind turbines. Two cold stores use the wind energy to
lower their temperatures even further as long as there’s
a good surplus. The Ahoi water park jumps in if the wind
comes to a standstill. It uses combined heat and power
(CHP) to heat its pools – and sells the surplus electricity,
so that it is available to users in the region. The future of
energy has begun in Cuxhaven in the form of EWE’s eTelligence
research project. The project distributes energy
intelligently. Households and companies alike are taking
part in one of the biggest trials of the future energy economy.
A virtual power plant brings together decentralised
wind farms, photovoltaics and CHP plants. The power produced
locally is traded on a digital marketplace – using
surpluses on stormy and sunny days while reducing electricity
consumption when the sun sets or the wind dies
down makes good financial sense. An intelligent electricity
network makes it possible for producers, storage facilities
and consumers to communicate with each other.
With the Group’s expertise in energy, telecommunications
and information technology, EWE is perfectly positioned
to make the ‘smart grid’ a success.
A future solution for private households: EWE has been testing
efficient fuel cell technology since 1998.

14 EWE ANNUAL REPORT 2010 2. Energy supply in flux
ENERGY FOR TOMORROW 15
The house with a conscience: EWE smarthome
There are many who bear the responsibility for the future of
energy supply. The customers, too, become active partners,
contributing own power generation (such as photovoltaics systems)
to the energy supply system and intelligently managing
their energy consumption. The house itself will also play a major
role in the future of energy supply. Multi-service company EWE
is working together with domestic appliance manufacturers on
the EWE smarthome project to develop the homes of tomorrow.
The project brings together energy products, telecommunications
and information technology to make life not only more
The way energy is used can also help make energy supply
more sustainable. By using more efficient appliances or
equipment and by conserving energy, households and
the industrial sector can lighten the burden on power
generation facilities and the grid itself. After all, reducing
energy consumption is a central pillar in climate
protection. It is also becoming increasingly important
to know just when energy is being consumed. Because
the amount of electricity generated from wind and solar
energy can fluctuate considerably, it is vital to know
exactly how much energy the network needs. Hence,
smart meters reporting actual consumption in real
time are an important part of modern energy systems.
This makes it possible to predict energy demand much
more accurately. EWE has tested this technology extensively
in households and industrial settings and has
already developed a product for private customers – the
EWE trio smartbox. These devices are enabling the new
energy systems to find their way into our everyday lives.
In the future, smart meters and domestic appliances
will be networked together so that the energy in households
can automatically be used as efficiently as possible.
Electricity storage devices – a key factor
Energy storage facilities will play a key role in the energy
systems of the future. They are used as energy buffers
to compensate for wind and photovoltaics systems,
which are highly dependent on weather conditions. The
electricity grid is fine-tuned to keep supply and demand
in balance. This is due to the physical properties of
electricity – the amount of electricity produced must
be exactly equal to the amount being consumed at all
comfortable, but also more sustainable. Domestic appliances are
networked together in an energy management system which is
so smart that it knows it should only turn on the washing machine
if there’s a surplus of wind power, and with rooms so sensitive
that they can recognise someone the moment they come
in and change the lights to the level they like.
times. Energy storage facilities are therefore useful for
performing tasks such as storing surplus energy in high
winds and feeding it back into the grid when the winds
die down or if demand increases. There is currently no
definitive technical solution to achieve this – a major
challenge in the expansion of renewable energies and
an incentive for EWE to research different options.
Electric cars have excellent potential as electricity storage
units. Their batteries can be used as mobile electricity
storage units to draw power from the grid and feed it
back in when it is needed. EWE developed the E3 electric
car together with automobile specialist Karmann
and deploys it to road-test different battery and management
systems that would enable electric cars to be integrated
into the energy cycle. Industrial units can also
be used to store electricity. A cold store, for example,
can cool its goods to lower temperatures than necessary
if there is a lot of electricity available. This allows
it to function properly with less electricity when there
is no wind or solar power. EWE has been successfully
testing this type of integration with industrial operations
in Cuxhaven. In the future, domestic appliances
might store electricity in a similar way, by scheduling
energy usage for times when there is a lot of electricity
available. Smart washing machines will run when the
sun is shining, the wind is blowing and other consumers
on the grid have not reported consumption peaks.
EWE is partnering together with domestic appliance
manufacturers to test white goods with a view to making
life more comfortable for the customer and actively
involving them in grid management.
House of the future: EWE smarthome displays show how much
energy the fridge is using and suggest recipes for the food it contains.
Shaping the future with research
EWE has already made many applications of the sustainable
systems of tomorrow into a reality. However,
more intensive research is required to restructure our
energy supply. The company has established a highly
capable basis for innovation in recent years: its own
Research and Development department, cooperation
with scientific and business partners and the establishment
of the EWE Research Centre for Energy Technology,
Power storage on the road: Electric cars can help to balance
fluctuations in wind and solar energy.
NEXT ENERGY. This independent institute associated
with the University of Oldenburg employs around 80
people to research improvements in the cost-effectiveness
and performance of energy storage facilities, fuel
cells and photovoltaics systems. NEXT ENERGY’s research
is independent and application-oriented. One
application into which their findings have flowed is the
prototype E3 car. NEXT ENERGY’s researchers develop
a battery changing station for the car which can change
the battery in just three minutes. This saves drivers from
having to wait for hours while their battery charges and
makes it easier to integrate the batteries into smart
electricity grids.
on course for tomorrow
The path to tomorrow’s world of energy sustainability
will not be short or easy. But it is the right path, and it
will pay for itself in the long term – these fundamental
changes to our energy systems will not only make them
more environmentally friendly, but also more efficient
and flexible. They link together generation, grids and
consumption, and drive technology forward. EWE committed
to this path early on. As a pioneer in the field of
renewable energies with efficient conventional power
plants, years of expertise in constructing and operating
grids and close links with customers and partners, the
Group is in an excellent starting position. With its combination
of energy, telecommunications, information
technology and ongoing research, EWE is on course for
a promising future.
Fibre optic cables are the neural pathways of smart grids: High-speed
internet enables the continuous exchange of data in modern energy
supply systems.
k

16 EWE ANNUAL REPORT 2010 3. Solutions in three sectors of the future
ENERGY FOR TOMORROW 17
More than electricity and gas: EWE offers a wide range of services covering all aspects of energy supply.
Customers can be advised on their specific needs in one of our many local service centres.
integrated solutions
for today and tomorrow
The whole is greater than the sum of its parts; with energy, telecommunications
and information technology, EWE combines the key expertise
needed for the energy supply of the future – and this has secured the Group
a prominent competitive position.
As a multi-service company, the Group is not only able
to be a one-stop shop for future energy systems, but also
provides innovative products and services today which
extend far beyond traditional electricity and gas trade.
Energy: well-equipped for the future
The company has its roots in supplying energy. EWE has
been a reliable provider of electricity and natural gas
for over 80 years. Energy – a crucial business area and a
market in flux – continues to be a focus for the company’s
current activities. Climate protection and increasing
competition pose new challenges for not only grids
and energy generation, but also for the product portfolio.
The demand shifts to flexible energy products and
services tailored to individual requirements. Suitable
solutions which go above and beyond the traditional
range of power and gas products are an essential part
of succeeding in the market and getting customers involved
in tomorrow’s energy world early. As an energy
provider with regional roots, EWE is familiar with the
needs in the field and acts accordingly – by providing
intelligent systems, innovative product packages, ecofriendly
energy sources and comprehensive services.
intelligent technology helps to save energy
The EWE trio smartbox shows EWE customers what
an intelligent energy supply means in practice. It tells
when and where a household uses electricity and gas
and shows how much. A tailored analysis makes it clear
how customers can save energy. The households which
took part in a field test reduced their energy consumption
by 10 per cent on average. The EWE trio smartbox
is the first stepping stone in bringing modern energy
systems into people’s houses. It reports consumption
in real time to EWE over the internet. This provides the
company with a more precise picture than ever before
of when and where energy is needed, making it possible
to manage generation and the grid with greater precision
and develop more precise pricing models. Customers who
use the metering system pay less for what they use at
times when the network is generally using less energy.
By being smart with their consumption, customers can
save money and will take some of the strain off the grid
if wind and solar energy are fluctuating more than usual.
The system is being refined so that it will include private
energy generators and domestic appliances as well. It
won’t be long until customers are able to tell when it’s
worth using the solar energy from their roof and when
they should have the washing machine run.
These solutions are made possible through a combination
of energy, telecommunications and IT. EWE is the
only company in Germany to provide the trio products –
electricity, natural gas, telephone and internet – in a
single package. This is not only convenient for customers;
it is also financially appealing. At once, it allows EWE to
combine the different components into an integrated
concept, such as the bio trio product, which uses renewable
energies for all of the components.
Heating up the house, not the climate
It is not just politicians who are setting increasingly deman
ding climate protection targets; the demand for sustainable
products is also on the rise among households
and the industrial sector. EWE committed itself to the
resource-conserving use of energy at an early stage and
has been providing eco-friendly products for a long time.

18 EWE ANNUAL REPORT 2010 3. Solutions in three sectors of the future
ENERGY FOR TOMORROW 19
All-round sustainability: EWE bio trio
EWE is the only provider in Germany to offer a full package of
electricity, natural gas and telecommunications services. The
energy for all three products in the EWE bio trio package comes
from renewable resources. 100 per cent of the TÜV-certified
eco-power is derived from wind, water and solar energy, including
wind farms in East Frisia and a photovoltaic power plant
in Oldenburg. The biomass which bio trio uses for heating also
comes from the northwest. Ten per cent of the natural gas is
made up of biogas. EWE opened a biogas processing plant in
EWE was the first company in Germany to construct a
comprehensive natural gas supply more than 50 years
ago. The combustion of natural gas results in far fewer
emissions than that of crude oil or coal. Gas is not just
useful for heating buildings and cooking – it can also
reduce vehicle emissions when used as fuel. For this
reason, the Group has built a network of natural gas
filling stations and continues to stimulate people to
buy gas-powered cars. With biogas, EWE is taking the
next step towards an environmentally friendly future.
The energy provider constructed the first facility in
northern Germany that processes the plant material so
that it can be fed into the natural gas network. Thus,
EWE customers were some of the first people in Germany
to get their heat from renewable resources. The
company sees great potential in highly efficient fuel
cells, which generate electricity and heat energy from
natural gas and biogas. EWE has been researching this
technology since 1998 and is conducting large-scale
field tests to take it forward to market readiness.
EWE also established the first eco-power provider in
northern Germany in 1998 – a logical step in light of
the company’s leading role in the field of wind power.
NaturWatt provides wind, water and solar energy for
the Group’s eco-power products and has been supplying
electricity from renewable resources nationwide
since 2008. The provider’s partnership model makes it
possible for small-scale municipal utility companies to
offer eco-power products. NaturWatt’s profits are used
to expand and promote the use of renewable energies.
Werlte, Lower Saxony – the first of its kind in North Germany –
which it uses to feed biogas into the natural gas network. EWE’s
customers also benefit from unlimited flat rates and a clear environmental
conscience when they go online: EWE TEL’s server
is powered by 100 per cent renewable energy. Products like bio
trio combine sustainability with convenience, and not just in the
here and now – solutions like this which combine energy, telecommunications
and information technology are the building
blocks of the intelligent energy products of tomorrow.
More service for less consumption
If households and industrial companies act consciously
with regard to their energy use, they can greatly reduce
their greenhouse gas emissions and save themselves
money. However, it is often not easy to identify which
measures would make the most financial sense and be
most effective. EWE therefore also provides services
which help customers to exploit this potential.
The Group’s service centres have provided comprehensive
energy conservation advice since the 1980s. Successful
measures are rewarded: EWE’s CO₂ premium is
an internationally certified scheme which reimburses
households within the scope of an emissions trading
programme for every ton of greenhouse gas that they
save by reducing their natural gas consumption. The
provider also helps companies to reduce their emissions.
EWE calculates the amount of pollutants emitted by
industrial facilities and draws up measures to lower
their emissions. Businesspeople and energy experts
meet at the Energy Efficiency Round Table to discuss
approaches successful approaches.
Switching over to more efficient technology is often a
vital step. Concerns about the expense of the initial investment
or maintenance should not present an obstacle.
That is why EWE offers a wide range of contracting solutions
handling the installation, operation and maintenance
of its customer’s facilities. All the customer has
to pay is an extra fee on top of their monthly electricity
Eco-power from the photovoltaics-system of EWE’s day-care centre
Biberburg also flows in the sustainable full-service package EWE bio trio.
or gas bill, and they are upgraded to energy-efficient
technology conveniently, cheaply and safely – an attractive
model, regardless of whether it is for heating
systems at home or in businesses, or for municipal district
heating and lighting systems.
Telecommunications: the hotline to tomorrow
The energy supply of the future will be based on a continuous
exchange of data between producers, grids and
users. That is why EWE established its own telecommunications
branch in 1996. The Group has since set up a
high-performance network and is now one of the largest
and most experienced regional providers in Germany.
EWE provides a full range of modern services: landlines,
broadband internet and mobile communications, along
with content services like music downloads. The company’s
customers can also watch television over the internet
as well as regional programming in certain areas for
which EWE is testing own TV formats with local content.
Companies can have their entire communi ca tions infrastructure
operated by EWE – from datacentres through
to web-based telephony – and make use of secure online
services.
The EWE trio smartbox helps to save energy by giving a transparent
overview of the total energy consumption in real time.
A connection to the future:
dSl moves to the country
If you want to stay with the times, you need broadband internet.
The energy supply of the future is also based on this
technology. That is why EWE is putting the foun dations in
place to supply DSL services regionwide. The multi-service
company has already connected several rural municipalities
to VDSL technology, an evolution of the DSL-standard
which enables up to 50 times faster data communication.
For the people in Schirum near Aurich, high-speed internet
is a special type of energy – one that powers their quality
of life, their town and their career prospects. Karen
Buse, director of the advertising agency, RobertoGruppe,
campaigned for high-speed internet for years. “We cannot
work without it, and this is why we rallied the town
to our cause. EWE got the contract in the end. Now we
have a clear advantage over other towns in the area, and
we are seeing a lot more companies come here.” Heinrich
Kammacher, the mayor of the municipality of Kirchdorf
(located south of Sulingen), also believes DSL has benefited
the town. “It has made Kirchdorf a more attractive
place to live and work.”

20 EWE ANNUAL REPORT 2010 3. Solutions in three sectors of the future
ENERGY FOR TOMORROW 21
Full of energy on the information superhighway
Broadband internet is essential for many modern telecommunications
products, and is also the backbone of
the energy systems of tomorrow. That is why EWE is
pressing ahead with a widespread roll-out of broadband
services. The company has already brought DSL to
many rural communities. This not only gives households
and companies access to new job opportunities,
information and entertainment choices, but also forms
the foundation for smart products like the EWE trio
smartbox.
The Group is committed to building the infrastructure
for even faster internet by means of VDSL and other
broadband technologies in the future. EWE has already
done pioneering work in this area, such as for the German
state of Lower Saxony’s statistics and communications
technology authority. The state of Lower Saxony awarded
the multi-service provider with a contract to bring
the authority’s entire network up to speed. Around
75,000 connections in 2,500 buildings, including police
stations, courts and tax offices, can thus communicate
with each other more quickly and securely and provide
their citizens with more online services than ever before.
information technology: turning data into
knowledge
Being able to transfer data quickly is vital for all of the
interactions involved in modern energy systems. However,
this information needs to be processed before it can
be used to manage the grid, coordinate the generation
It’s all about communication: EWE brings high-speed internet to the
customer – even to those in more remote areas.
and consumption of energy, and show customers the
best way to save energy. EWE established its subsidiary
BTC in 2000 to perform this task. BTC is now one of
Germany’s leading providers of information technology
solutions and consultancy services.
Its core expertise lies in linking and managing complex
information and communication systems. BTC does not
limit these services to the energy and telecommunications
sector, but also provides them to other industrial
and service sectors, the retail industry, the logistics
sector and the public sector. Its portfolio also includes
Web design, online shops and multimedia products.
information for the energy supply of the future
The EWE Group develops sophisticated information
systems to gather data together from wind farms, conventional
power plants, households, industrial companies
and networks, so that the exact amount of electricity
needed by the grid at any given time can be produced
and distributed. This starts with the generation of the
power – wind farms need as accurate a weather forecast
as possible to use the facilities to their full capacity, or
to schedule maintenance, particularly in offshore seas.
Products for this purpose, such as Wind Farm Center,
interact seam lessly with the next component, namely
the decentralised energy supply system management.
Standardised interfaces and reliable forecast- and optimisation
procedures are needed to control systems
which involve multiple energy production facilities
working together.
Security online: With its own data centres EWE TEL offers business
customers a wide range of services for secure online communications.
All systems under control: The network control centre at EWE NETZ controls the telecommunications,
electricity and natural gas networks using state-of-the-art computer technology.
The grid is at the heart of this flow of information – this
is where supply meets demand. The EWE Group has many
years of expertise in developing and operating grid operation
systems which map how much energy is where in
the grid and who needs it when. These systems make it
possible to distribute electricity with pinpoint accuracy,
even if wind and solar power output are fluctuating wildly.
New IT solutions are also required for energy consumers.
The consumption monitoring and analysis capabilities
of the EWE trio smartbox are a first step towards
an entire smart system. EWE is running field tests to
find out which information it needs to process and
track in order to make domestic appliances, industrial
facilities and electric cars active players in the energy
systems of the future; systems that ‘know’ when and
how to best use energy.
The future has already begun
Fundamental changes to energy systems will require a
great deal of effort and investment in research and development,
and will continue well into the future. EWE’s
portfolio demonstrates how this process can result in
products which make life and work more convenient
and sustainable in the here and now. EWE’s expertise in
the fields of energy, telecommunications and information
technology allows the company to offer solutions
which are more than the sum of their parts for the customers
of the present and the energy market of the future.
k
Wind Farm Center:
shore leave for the sea wind
EWE knows where the wind blows. With the Wind Farm
Center control and management system, EWE’s IT subsidiary
BTC enables the operational management of offshore
wind farms. The software transfers all of the information
from the facilities to an on-shore central control room.
The first German offshore wind farm, alpha ventus, has
been sending data back to East Frisia and Oldenburg this
way since summer 2009. Thus operators have real-time
control over their facilities. They can operate them from
the control room and trace malfunctions to their source.
Even the emergency power facility can be activated from
the control centre. The system is also helpful for planning,
because it gives wind farm operators a precise indication of
whether the weather is suitable for sending maintenance
crews out on the high seas. They can also use the analysis
and forecast data to calculate the output of the wind turbines
and analyse their efficiency. Being able to analyse
and control decentralised power generation facilities remotely
is a crucial part of the energy supply systems of
tomorrow – having a ‘brain’ that compiles information and
makes it possible to react quickly, particularly with highly
fluctuating energy sources like wind power.

22 EWE ANNUAL REPORT 2010 4. EWE in its regions
ENERGY FOR TOMORROW 23
Thinking sustainable: Renewable energies, greater energy efficiency and lower consumption are bringing
the Juist eco-island closer to its climate-protection goals.
Regional roots and
a regional future
The majority of EWE is municipally owned, and the company has close ties to
its business regions. This puts the company in an excellent position to exploit
regional opportunities and address local requirements directly – an important
competitive advantage in the decentralised energy systems of the future.
The history of EWE is intertwined with that of a number
of different regions and their unique qualities. As an expert
in energy sales and infrastructure, the company
understands the potential of a region and what makes
it unique – its natural features, its demographic and economic
structures, and the needs of the region’s people.
In light of the increasingly decentralised nature of energy
supply, this rich tradition is also the way into the
future. Wind turbines off the coast, power plants in densely
populated areas and rural bio gas all generate electricity
which is often used regionally. Intelligent systems
link providers and customers. Only those who know how
things are on the ground can bring together supply and
demand in line with a region’s needs. EWE’s regional
roots give it an excellent advantage: The Group has grown
in areas which complement each other brilliantly. By
working closely with local authorities, industries and
tradesmen, EWE can develop home-grown solutions for
the region.
Synergy networks in northwest Germany
EWE has its roots in northwest Germany. Oldenburgbased
EWE has been active in the region between the
Ems and the Weser rivers since 1930. In 1998, it expanded
to the Elbe. These parts of Lower Saxony are
dominated by agriculture and their vicinity to the coast.
Because most of the region is sparsely popu lated, the
company has a great deal of experience in providing
energy and telecommunications across a widespread
area. The often stormy weather in the north encouraged
EWE to put the electricity grid underground. Thanks to
the large amount of wind and biomass in the region, EWE
was able to get involved with renewable energies early
on and has been able to continuously develop its expertise
in dealing with decentralised structures and the
fluctuating nature of renewable sources since the 1980s.
Know-how on the ground is vital for running energy
supply systems reliably. This is true not only for EWE’s
own master workshops and service points, but also for
the cooperation with craftspeople. Skilled experts are
needed to operate modern energy systems in small,
widespread communities. EWE has joined forces with
regional tradesmen, traders, producers and municipal
utilities to form the “Synergy Community”.
The Juist eco-island project:
a change in energy use, not in the climate
The East Frisian island of Juist is 17 kilometres long and
in places just 500 metres wide. This is the reason why
people call it the world’s most beautiful sandbank. The
post office delivers its mail using electric carts, and only
doctors and the emergency services have cars – conventional
motor vehicles are banned on Juist. The island is
particularly susceptible to climate change and has therefore
partnered together with EWE to develop a climate
protection programme to reduce CO 2 emissions. For this
reason, a CO 2 footprint of all of the isle’s emissions was
drawn up based on the available energy data. EWE is using
these findings to advise municipalities and companies on
how to reduce their greenhouse gas emissions, such as
by using more efficient heating technology, renewable
energies and showing greater awareness in the consumption
of energy. The project has already been a resounding
success. Several of the company’s businesses have sought
advice and now have a climate protection symbol next
to their name in Juist’s tourism guidebook. Many of the
island’s inhabitants have also reduced their CO 2 footprint
by getting eco-power from EWE. The state government
of Lower Saxony crowned the project the winner of the
“Klima Kommunal 2010” competition.

24 EWE ANNUAL REPORT 2010 4. EWE in its regions
ENERGY FOR TOMORROW 25
Glowingly green: New LED-based street lighting in Bremen
is reducing energy consumption.
EWE brings local tradesmen up to speed with the latest
developments in energy and telecommunications technology.
The company established the “ZentrumZukunft”
in Emstek, where craftspeople learn how to use the solutions
of the future by interacting with the real thing –
from thin-film photovoltaics to fuel cells as electricityproducing
heaters to the smart fridge. This enables
the them to advise their customers about the latest
developments in energy and building technology. In
turn, they provide EWE with valuable feedback on the
demand and the possibilities of households and industries
in the field.
Most major projects require the support of municipa lities
and local industry. Hence, EWE is partnering together
with businesses and municipalities in places
with no broad band internet to determine the quickest
way to provide DSL connections, and is testing the energy
supply systems of the future in Cuxhaven; cold
store operators and water parks become active participants
in the energy market by making their heating and
cooling systems available to compensate for the energy
supply fluctuations from the regional wind farms.
Another special project links the multi-service provider
to the island of Juist: EWE is a partner of its government
and local businesses in making Juist Germany’s
first eco-friendly island.
Efficient circuits in bremen
Thanks to the EWE Group’s partnership with swb, the
business regions in which the company is active were
illuminating bremen – the efficient
and smart solution
For local councils, too, energy efficiency is an increasingly important
topic. In Bremen the EWE subsidiary swb is cutting
the city’s energy consumption for street lighting, for example
by using LED lights and intelligent light management. On
Theodor-Heuss-Allee the lighting level is adjusted as darkness
falls – saving 20 to 30 per cent of energy. Thanks to the modern
light-emitting diodes, light no longer shines into neighbouring
bedroom windows. LEDs produce light more efficiently and last
longer than conventional bulbs. This means the city’s new lighting
uses 40 per cent less power.
joined by Bremen and Bremerhaven in 2009. swb has
been supplying the region with energy, water and waste
disposal services for over 150 years. Its specialist expertise
related to the infrastructure of major cities is a welcome
addition to EWE’s pool of knowledge. Densely
populated areas have less space for generating energy,
meaning that energy generation is often centred upon
fewer but bigger facilities. swb operates conventional
power plants which have been brought up to a high
efficiency standard and uses the local circumstances
for smart local circuits.
Several of swb’s power plants are fuelled by house -
hold and industrial waste, an environmentally friendly
way to reduce the use of coal and oil. Bremen’s waste-
incineration power plant provides a whole district with
warmth derived exclusively from waste while also generating
electricity. The spatial proximity allows swb to
use such power-heat coupling, thus making available
the heat emitted during electricity generation for heating.
District heating has flowed through the Hanseatic
city since the 1920s and now heats more than one in
six of the city’s households. This way, optimal use is made
of resources.
swb is working together with Bremen-based underground
engineering companies to serve new areas for
these efficient energy-circuits, including the new Bremen
Überseestadt district. The Group considers itself a service
provider and partner to the city in infrastructure solutions.
Companies of the EWE corporation operate the
entire administrative telecommunications network
Germany’s largest biogas feed-in facility supplies around 25,000 households
in Brandenburg via the natural gas network operated by EWE.
including the city’s fire alarms and traffic lights, service
its fountains and provide innovative, energy-efficient and
safe street lighting solutions.
Modern energy for brandenburg and Rugia
EWE has been active in Brandenburg, North Western
Pomerania and on Rugia since 1990, having developed
a modern energy infrastructure. The erection of a comprehensive
regional natural gas supply created jobs and
made the location attractive for companies. EWE now
also supplies electricity to these areas and, in certain
regions, telecommunication services as well.
Keeping customers closely involved in the development
and use of advanced energy systems was part of the plan
from the beginning. The experienced employees from
the area know the demand in the region and develop
solutions to meet these needs. Together with the operator,
EWE supplies the Tropical Island Resort in Krausnick,
Brandenburg, with energy. In the world’s largest
cantilever hall, it features a complete rainforest, saunas
and swimming pools – a real challenge from an energy
standpoint. Supplying a structure of this magnitude with
energy is a real challenge. Three combined heat and power
units and on-site boilers provide heat and electricity,
and the hall has its own district heating grid. EWE also
has an emergency service team ready for action around
the clock and handles the energy data management.
The service provider is helping Rugia, Germany’s largest
island, to implement the region’s bioenergy project. With
the “Communal Energy Management” product, EWE is
gathering information about the electricity and heat con -
sumption of real property on the island and advising the
administration on how to reduce consumption. EWE’s
biogas processing plant in Sagard is making it possible
for Rugia to use renewable energies for heating. The large
rural expanses of Brandenburg and Rugia are perfectly
suited for this natural resource, so it is no coincidence
that the EWE constructed Europe’s largest biogas feedin
facility in Brandenburg.
With foresight and perspective
The energy systems of the future are like an orchestra
with a bevy of instruments. Standardised concepts are
often of little use – if you want to successfully conduct
the symphony, you need to be able to assess the situation
on the ground and make the best possible use of
the situation, expertise and resources at your disposal.
EWE’s view of itself as a regional service provider and
its many years of experience with local structures and
requirements make it possible for the company to develop
tailored solutions which benefit from the strengths
of the region, expand upon these strengths and combine
them into a coherent whole.
biogas facility Schwedt:
big impact for regional products
Biogas is a regional product and its use does not produce
any additional CO 2 emissions. It is a sustainable and efficient
source of energy that is particularly suitable for use
in rural areas. In 2010, EWE put Europe’s largest ever biogas
facility into commission in Schwedt, Brandenburg. It
was constructed in partnership with VERBIO AG (Leipzig),
one of the largest producers and suppliers of biofuels in
Europe. The facility in Schwedt makes biogas from rye silage,
a by-product of the production of biomethane from
the crops that grow in the region’s fields. The facility brings
the biogas up to natural gas quality, meaning it can be fed
into Brandenburg’s natural gas network, which is operated
by EWE. Around 25,000 households benefit from this
environmentally friendly source of energy. Biogas has several
advantages over other renewable energies. It can be
stored, meaning that it is available later when it is needed
for heating. It can also always be generated, no matter
what the weather is like.
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26 EWE ANNUAL REPORT 2010 5. EWE in new markets
ENERGY FOR TOMORROW 27
Dynamic and energetic: Turkey is one of the fastest-growing energy markets in the world – together with its
Turkish colleagues EWE is opening up a new sales area.
An energetic investment
in new markets
The energy supply of the future will be organised at an increasingly
decentralised and regional level. At the same time, climate change –
an important driving force behind the reorganisation of our energy
supply systems – is an international challenge.
For this reason, EWE is also active in regions outside Germany
where the Group can help to establish future-proof
energy supply systems and thereby tap attractive new
markets.
There are now very few remaining growth opportunities
in the energy sector in Germany. EWE is therefore focusing
on high-growth regions abroad. Turkey is one of
the world’s fastest-growing energy markets. EWE has
recognised this trend and has held equity stakes in two
regional gas companies since 2006 and 2007 respectively.
The Oldenburg-based company has also been involved
in supplying gas in Poland for over ten years.
EWE’s CEO, Dr. Werner Brinker, sees this as a logical decision:
“Given the successful developments in Brandenburg,
the fact that we had already been supplying natural
gas to the Polish town of Slubice since 1993, and our
geographical position, it made perfect sense to expand
Poland and the EU climate protection goals:
how natural gas helps to cut Co 2 emissions
The European Union has set itself the target of reducing the volume
of CO 2 emissions in all the member states by at least 20
per cent by 2020, compared with 1990 levels. For Poland this
is particularly challenging, because as in most member states,
energy production accounts for the largest share of emissions –
and over 90 per cent of power and heat in Poland is generated
with coal. This energy source releases particularly large amounts
of CO 2 when it is burnt, with 694g being emitted per kilowatt
hour for Polish coal (the figures in this text are based on data from
the International Energy Agency for 2008). This means that CO 2
our gas supply activities into western Poland.” In 1999,
EWE became the first foreign gas supplier to be awarded
a licence for the Polish market. By expanding to Poland
and Turkey, EWE is tapping new sales regions.
poland – EWE’s convincing consistent
commitment
EWE took the liberalisation of the European energy
market as an opportunity to achieve further growth,
and set their sights on Poland early. As a wholly owned
subsidiary of EWE, Poznań-based EWE Polska is consistently
expanding its modern high-pressure gas supply
network in Poland. The company benefits from EWE’s
decades of experience in serving sparsely populated regions
in Ger many. EWE Polska has already connected
over 40 municipalities in western Poland to the natural
gas supply.
emissions for the entire production of power and heat came to
653g per kilowatt hour – by comparison, the figure for Germany
was 441g. For this reason, Poland is counting on a more modern
energy mix as part of its efforts to reduce these emissions. By
2030 the proportion of coal is planned to be reduced to 60 per
cent. EWE is contributing to this climate-friendly transformation
of the energy supply with its expansion of the natural gas infrastructure.
At just 328g of CO 2 per kilowatt hour, natural gas
releases less than half as much of the greenhouse gas in Poland
than coal.

28 EWE ANNUAL REPORT 2010 ENERGY FOR TOMORROW
29
EWE is expanding the natural gas network in Poland – the low-emission
energy source helps the country to meet its EU climate targets.
The supply lines are operated by EWE energia, a subsidiary
of EWE Polska. A central control room monitors the
network around the clock. The EWE natural gas storage
facility in Brandenburg safeguards the supply to EWE’s
Polish customers. This security of supply has allowed
EWE to become accepted and trusted by its customers
in Poland. The region of Slubice is particularly reliant on
the supply of natural gas from Germany because the
national network operator PGNIG does not have a gas
supply network supplied by EWE in this region.
EWE’s consistent commitment has been positively received
across the border. EWE now employs almost 100
people at six locations throughout Poland. BTC Polska
is EWE’s representative in Poland’s information technology
sector. The Group’s efforts have laid an excellent
foundation for the Polish renewable energies growth
market. These efforts include the establishment of the
subsidiary EWE zielona energia (green energy). Like its
fellow members of the EU, Poland is faced with the
challenge of achieving the European Union’s climate
protection targets. EWE has bought its wealth of experience
in the fields of renewable energies and energy
efficiency to the Polish wind energy association PWEA
and other associations. The company’s objective is the
expansion of renewable energies in Poland. In addition
to wind energy, EWE is advancing the development of
an environmentally friendly biomass-based energy
supply in Poland. The Polish government has set itself
the target of having at least one bio gas facility in every
municipality by the year 2020 to process agricultural
biomass. This means that there is also considerable potential
for growth in biomass in the Polish renewable
energies market.
Turkey – a rapidly growing energy market
Turkey is increasingly becoming significantly important
for the European energy supply system. As an energy
transit country, it plays a crucial role in the competitive
international energy industry. The Turkish economy is
experiencing dynamic growth and estimates indicate
that Turkey’s energy requirements are expected to grow
by six per cent per annum up to 2023. This means that
Turkey’s fast-growing energy market offers substantial
growth potential for foreign companies.
EWE secured a strategic position in Turkey by establishing
the wholly owned subsidiary EWE ENERJI in Istanbul.
EWE ENERJI now holds a majority stake in Turkey’s
third largest gas supplier, Bursagaz. The company supplies
gas to Turkey’s fourth-largest city, Bursa, with a
total population of 2 million citizens. It is a cooperation
which generates synergies: EWE has succeeded in entering
the Turkish energy market and Bursagaz benefits
from the extensive experience of the German natural
gas pioneer. EWE has further strengthened its position
in the country with two further investments: by acquiring
a further majority stake in another regional supplier,
Kayserigaz, which is located in the central Anatolian
city Kayseri with a high industrial potential. In addition
to this, EWE has acquired the gas trading company
Energy awareness: a green dragon explains the benefits of gas in Turkey
EWE and its Turkish affiliated companies are dedicated to
boosting acceptance of natural gas as a source of energy
in Turkey. Unlike other fossil fuels such as fuel oil and coal, natural
gas generates virtually no residue when it is burned. It also
produces far fewer CO 2 emissions. EWE’s Turkish subsidiaries
Bursagaz and Kayserigaz are using innovative marketing concepts
to win a growing number of new customers over to the
more environmentally friendly fuel. The gas supplier Kayserigaz
is reaching out to Turkish children with a book entitled “Learn
about natural gas with Dolgi”. In it, Dolgi – a green dragon –
explains to youngsters why natural gas is good for the environment.
Seminars at primary schools and theatrical performances
EWE Doğalgaz, which opened up a further window of
opportunity in the value chain. A balanced portfolio of
long and short term procurement agreements allows
EWE Doğalgaz to trade natural gas on a nationwide basis,
making the company a reliable supplier for industrial
Dolgi explains natural gas: The green dragon teaches young people in
Turkey about using energy responsibly.
are supporting the campaign. Bursagaz and Kayserigaz’s commitment
to environmental protection goes beyond teaching
children about natural gas, however. During World Environment
Week, new customers will receive tree seedlings when they
sign up to the companies’ services. The aim of the scheme
is to reduce soil erosion by planting trees. According to the
Turkish environmental trust foundation TEMA, 1.4 billion tonnes
of soil are worn away every year by wind and the elements. 550
million tonnes of this disappears into rivers and lakes. Trees reinforce
the soil, keep it fertile and also absorb CO 2 from the air.
customers, power plants and local distribution companies.
In this new business segment EWE Doğalgaz is already
among the five biggest suppliers in the Turkish
gas market.
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30 EWE ANNUAL REPORT 2010 6. Thinking in a broader context
ENERGY FOR TOMORROW
31
With the bigger picture in mind
The EWE Group employs over 8,000 people, representing 26 different
languages. They develop products and systems tailored to the requirements
of the company’s five regions in three sectors which are becoming ever
more intertwined. The ability that they all share: seeing the bigger picture.
diverse: having people from every
walk of life improves business
Responsible: career for the family
“The Biberburg centre is great for me. My children are nearby and the hours
are very good. The Biberburg centre has a modern concept that works very
well and I can truly and genuinely say that we feel we are well taken care of.”
Tailored working hour schemes, homeworking and EWE’s Biberburg day care centre – to the
Oldenburg-based multi-service provider, family is a key to success. uta ballhausen works in
EWE TEL GmbH’s marketing department, and her children visit the Biberburg centre.
“BTC signed the charter because diversity is good for every com pany and
society as a whole. When everyone feels free to express their talents without
having to worry about their nationality or gender, we have a lot more innovation.
An open corporate culture attracts talent, impresses customers and
gives us an advantage over our competition.”
Several German companies have signed the “Charter of Diversity”, recognising the importance
of being open and tolerant. bülent uzuner is the Chairman of EWE’s subsidiary BTC AG.
The whole picture: education is more than just theory and practice
“EWE puts on a Group orientation day to give apprentices a taste of its corporate
culture. We live out these corporate values in our daily interactions,
and they are also demonstrated by the company’s management. It’s easy to
identify with their example, and EWE’s values become your own more and
more every day.”
EWE runs a vocational training and degree program for the next generation of employees.
ihno Harders is a student studying in EWE NETZ GmbH’s Business and Information Systems
combined programme.
Entrepreneurial and efficient: providing
customers with sustainable satisfaction
looking ahead: room for the ideas of the next generation
“Our job is to rise above the competition in the energy supply sector and
win over long-term customers with appealing product packages and tailored
services. We gave the owner of a brine bath a presentation of the EWE
Energy Explorer. We were able to provide him with ways to save energy,
which in turn saved him money – on the consumption, not on the purchasing
side. The customer was so pleased that he chose EWE again. Now that’s
how partnerships are meant to work.”
EWE shows its customers how to save energy and be more efficient. Stefan Ziegert is one of
EWE ENERGIE AG’s corporate customer service representatives.
“In the ‘Jugend forscht’ contest, schoolchildren explore science and technology
with great joy. It is very important to me to support them in the
implementation of their ideas and to appreciate their dedication. I find it
hugely fascinating to see with which enthousiasm and professionalism the
students approach and present their projects. These are experiences which
they can bring with them to their later careers.”
As the mentor of “Jugend forscht” in the “Schüler experimentieren” branch, EWE hosts the
Lower Saxony competition in Oldenburg. bert Hinrichs from EWE AG’s marketing department
is on the jury.
on a partnership basis: combining skills effectively
“We partnered together with the Sanitation, Heating and Air Conditioning
Guild to develop the product swb Heat. With this product, we agree a heating
contract with the customer and provide them with a heating system.
The benefit for our partner workshop is that, under the terms of the contract,
they get to do all the repairs. The client benefits from service around the
clock. It’s a classic win-win situation for all involved.”
As a regional provider, the EWE Group works together with expert partners in the area.
dieter Schmidt is a team leader in swb AG’s Bremen service centre.

32 32 EWE ANNUAL REPORT 2010
GROUP REVIEW 2010 LETTER FROM THE BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD INVESTOR RELATIONS CORPORATE SOCIAL RESPONSIBILITY 33
Group review 2010
January
EWE and the Australian-German
fuel cell developer Ceramic
Fuel Cells Ltd. sign a co-operation
agreement relating to an
order for three fuel cell facilities
with a combined heat and
power function.
swb and Deutsche Bahn sign a
19-year supply contract for the
entire production of the swb
wind farm in Märkisch Linden,
Brandenburg.
June
February
EWE is awarded the Best Innovator
prize in the Sustainable
Innovation Management
category by the German Federal
Minister of Economics and
Technology.
EWE begins leaching operations
at the gas storage facility
in Jemgum. Over the next
two to three years, fresh water
will be pumped in to create
five caverns in the salt dome,
which will store enough natural
gas to supply over 100,000
households for a year.
EWE restructures the Group and pools the energy business in a
separate company, EWE ENERGIE AG. EWE AG will concentrate
on managing its subsidiaries and their activities in the Group. The
Board of Management consists of chairman Dr. Brinker, Heiko
Harms, Dr. Thomas Neuber and Michael Wagener. Dr. Neuber
and Mr. Harms also hold seats on the Board of Management of
EWE ENERGIE AG. They are supported there by a third Board
member, Dr. Heiko Sanders, previously head of Group controlling
at EWE AG.
EWE TEL announces a brand merger: by 1 June 2011 at the latest
the company will switch to the brand name EWE. In Bremen and
Bremerhaven services will then be provided under the swb brand,
replacing the nordcom name.
A new 33 megawatt turbine starts operations at swb’s solid
recovered fuel power plant, enabling the sustainable production
of environmentally friendly power from refuse, as well as district
heating. A decision is also taken to overhaul the waste incineration
power plant in Bremen, so that in future three times the amount of
electricity can be produced from the same amount of refuse.
March
EWE takes over the operation of the historic Hunte hydroelectric
power plant in Oldenburg.
Weserkraftwerk Bremen GmbH, a joint venture between swb and
Enercon, appoints a new contractor to build the hydroelectric
power plant on the Weser river.
July
The German Federal Supreme
Court declared the price adjustment
clause that EWE has
used in its standardised special
contracts for natural gas since
April 2007 to be invalid. The
court ruled the clauses used
by EWE from 2004 to 2007
to be fundamentally valid
and referred the case back to
the Higher Regional Court in
Oldenburg.
The energy marketplace for the
eTelligence research project is
set up in Cuxhaven. This gives
smaller, decentralised generators
access to the regional
electricity market and lets
business customers manage
their consumption more flexibly
thanks to the information
and communications technology
used.
August
Dr. Willem Schoeber is elected
to EWE AG’s Board of Management.
He will represent swb AG
on the Board, while remaining
its Chief Executive Officer.
The Supervisory Board of EWE
AG votes in favour of a customer-friendly
solution in response
to the Supreme Court ruling.
Dr. Henning Scherf, a former
mayor of Bremen, agrees to act
as a mediator to find a solution
acceptable to all involved.
April
Management
Germany’s first offshore wind farm, alpha ventus, is officially
opened. EWE carried out the pioneering work jointly with E.ON
and Vattenfall and is now responsible for operations.
EWE and Siemens sign a supply contract for 30 wind turbines of
3.6 megawatts each. They are destined for the Riffgat offshore
wind farm, with which EWE and ENOVA Group intend to produce
power for 100,000 households from the end of 2012.
Ulrike Schlieper succeeds Karl-Heinz Funke on the EWE Super visory
Board. Mr. Funke had resigned his seat for personal reasons.
September
The trade supervisory authority
in Oldenburg gives planning
permission for the RIFFGAT offshore
wind farm.
october
EWE follows the arbitration
proposal made by Dr. Scherf
and announces a gross payment
of around Euro 100 million
to natural gas customers
affected by the Supreme Court
ruling.
The government of Lower Saxony
awarded the “Climate island
Juist” project a prize in the
“Klima Kommunal 2010” climate
protection competition.
May
EWE and the Juist local authority
launch the project „Climate
island Juist“, to achieve a significant
reduction in the CO 2
emissions and energy consumption
of households and
businesses on the island.
EWE TEL is awarded a contract
from the Economics Ministry
of Lower Saxony to provide
broadband access to the cluster
„Northwest Lower Saxony
and the Coast“. The company
will be delivering high-speed
internet to over 40,000 households
by the end of 2011.
december
Heiko Harms leaves the company and the Board of Management
to pursue other projects. Responsibilities within the EWE Group
are redistributed: Dr. Willem Schoeber takes over responsibility
in the EWE AG Board of Management for foreign operations.
Dr. Thomas Neuber resigns his seat on the Board of Management
to concentrate on his work in the Boards of Management of EWE
ENERGIE AG and swb AG. Michael Wagener becomes deputy CEO
of EWE AG and Chairman of the Supervisory Board of BTC AG.
Jörg Budde succeeds Heiko Harms on the Board of Management
of EWE ENERGIE AG.
The Higher Regional Court in Oldenburg refers to the European
Court of Justice the question of whether the blanket inclusion of
the German By-law on General Terms of Supply for Standard-rate
Natural Gas Customers (AVBGasV) in EWE’s General Terms and
Conditions between 2004 and 2007 was compatible with transparency
criteria in European law.
EWE is the only energy company to take part in the German federal
government’s IT summit, presenting the smart grid research
project eTelligence and the smart meter EWE trio smartbox.
German transmission system operators award BTC the contract
to develop and operate the first European platform for marketing
primary gas capacities.

34 EWE ANNUAL REPORT 2010
GROUP REVIEW 2010 LETTER FROM THE BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD INVESTOR RELATIONS CORPORATE SOCIAL RESPONSIBILITY 35
letter from the board of
Management
The year 2010 was a challenging one for EWE. Structural and organisational matters kept us
occupied over the last twelve months, as did questions about the specific direction and form
the operating business should take. How should the larger Group best be managed? Is the
fundamental positioning correct? How do we bring our strengths to bear and make the best
use of EWE Group’s potential? Where are our weaknesses, what do we learn from mistakes?
Since last July we have been working within a new Group structure. It is also the basis for the
new segment structure, on which this report for the 2010 financial year is itself based for
the first time. We have moved the operating energy business, previously carried on by EWE
AG alongside its Group management functions, into an independent company. EWE AG
now focuses exclusively on its functions as a holding company. The separation of controlling
and operating functions makes it possible to have a clear leadership structure for the EWE
Group, which is adapted the different demands of the individual markets and regions.
Change is a part of EWE’s corporate history: this continual development can be seen in a
number of anniversaries that were celebrated in 2010. It is now 50 years since we became
the first natural gas supplier to provide widespread coverage in the core Weser / Ems region.
20 years ago we made a successful leap into Brandenburg. The establishment of the IT
company BTC in 2000, alongside the entry into the telecommunications business, marked
another important turning point on the way to EWE’s current position as a multi-service
company. And we shouldn’t forget the deeper partnership with swb in Bremen as well,
which for a year now has added substantially to our customer base and presence in the
Bremen / Oldenburg region.
We are convinced that versatility is a key requirement for success as a company. Only those
that can adapt quickly and flexibly to change will be able to hold their ground on the markets
of the future. In the first instance this means taking the right entrepreneurial decisions at
the right time. But ultimately it is the willingness and effectiveness of all the staff in the
company to take new paths that is decisive for the success of the venture. We also owe our
past successes to the hard work of our employees, whom we would like to thank sincerely
for their commitment.
Management
Nevertheless, last year also demonstrated that we need to increase our efforts in order to
hold our ground in the changed market and competitive environment.
The effects of a ruling by the German Federal Supreme Court on clauses in our contracts and
the price adjustments to our natural gas products it entailed caused unusually negative
head lines and reactions from our customers. There is no doubt about it; the sometimes
highly critical feedback disturbed us and we take it very seriously. At the same time we are
grateful for our critics’ frank and direct reactions. They have given us valuable pointers to
our weaknesses and thereby created the opportunity for beginning a new dialogue. The arbitration
proposal by the mediator Dr. Henning Scherf, whom we would like to thank again
sincerely at this juncture, is one example, as is the customer advisory committee that is
currently being set up.
EWE TEL also found the going tougher in 2010. The company operates in a difficult market,
which continues to be characterised by price erosion and dwindling margins for telephony
and internet. The changes to the company over the past twelve months have not yet had a
positive impact on its results. We are nevertheless confident that the situation will improve
again in the future. This is corroborated by the success achieved in 2010 in rolling out broadband
coverage and introducing online TV, as well as by the new company management, which
is pulling all the levers to deliver an improved earnings contribution.
The consolidated result for 2010 was influenced to a large extent by unforeseeable factors.
Sales did increase sharply thanks to the first-time consolidation of swb for the full year. Electricity
and natural gas sales were also significantly higher than the previous year, due both
to the economic cycle and the weather. The financial consequences of the gas price dispute
on the other hand depressed both sales and earnings for the EWE Energy business area. The
performance of the New Markets business unit was also below our expectations. This was
due to changes in the economic and legal environment in Turkey. The Group’s earnings before
interest and taxes fell sharply as a result. EBIT sank by around 60 per cent compared
with 2009 to Euro 164.9 million. The consolidated net result was negative for the first time
at Euro -50.7 million.

36 EWE ANNUAL REPORT 2010
GROUP REVIEW 2010 LETTER FROM THE BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD INVESTOR RELATIONS CORPORATE SOCIAL RESPONSIBILITY 37
However, in spite of these challenges, 2010 also revealed growth opportunities for our business.
Through the interaction between its three business areas, EWE is now a multi-service
provider, combining all the components for the energy supply systems of tomorrow under
one roof. The solution for a more climate-friendly and modern energy supply lies in the intelligent
interaction between the areas of energy, telecommunications and IT. For this reason,
too, EWE welcomed the German federal government’s energy strategy presented in autumn
2010, which now incorporates this integrated approach at the political level as well.
In 2011 and the years to follow, we will therefore adhere consistently to the course we have
set: by investing in renewable energies such as the Riffgat offshore wind farm and in a new,
ultra-efficient gas and steam power station run by swb. By testing intelligent energy supply
systems, as in the eTelligence research project. By advancing fuel- cell technology and by
developing cutting-edge products and solutions for our customers, such as the innovative
energy meter for private homes that EWE launched on the market this spring.
Ladies and gentlemen, we have put a difficult year behind us and in the current year we intend
to raise our game again substantially. We see 2010 as a watershed: we have pooled
the positive developments from the past and given the Group a new, sustainable structure.
We see the current challenges as an opportunity to drive forward EWE’s future development
with renewed vigour. Our thanks go to our shareholders, our customers and our staff for
their commitment, their support and their loyalty. Their satisfaction is our goal and in future
it will be our most important motivation for demonstrating EWE’s continued adaptability.
Yours sincerely,
Oldenburg, Germany, March 2011
Board of Management
Dr. Werner Brinker Michael Wagener Dr. Willem Schoeber
Management
dr. Willem Schoeber
Member of the Board of Management
Bremen, born in 1948, PhD in Technical
Sciences, Eindhoven Technical University,
Member of the Board of Management
since 2010.
Responsible for cooperation with swb,
particularly in the field of conventional
power generation, as well as for the
Group’s activities in Poland and Turkey.
dr. Werner brinker
Chief Executive Officer
Rastede, born in 1952, Dr.-Ing.,
Brunswick Technical University,
Member of the Board of Management
since 1996.
Responsible for the strategic orientation
of the EWE Group and for developing
the Energy and Telecommunications
business areas.
Michael Wagener
Deputy Chief Executive Officer
Rastede, born in 1957, Banker
Member of the Board of Management
since 2005.
Responsible for Group Controlling and
Accounts, Group Finances, Investor
Relations, Legal Affairs and Human Resources
as well as for the Information
Technology business area. Michael
Wagener is the Human Resources Director
of EWE AG.

38 EWE ANNUAL REPORT 2010
GROUP REVIEW 2010 LETTER FROM THE BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD INVESTOR RELATIONS CORPORATE SOCIAL RESPONSIBILITY 39
Report of the Supervisory board
During the course of the financial year 2010 the Supervisory Board monitored the management of the
company continuously and received regular, comprehensive reports from the Board of Management
on the company’s position, all significant events and company performance, both verbally and in writing.
The Supervisory Board discussed all matters requiring its approval either under law or the Company
articles in detail and took the necessary decisions. In a total of seven meetings in 2010 the Supervisory
Board dealt in particular with capital expenditure and its financing, the income statement as well as
individual transactions of particular importance. Two decisions taken by the Supervisory Board in 2010
are particularly noteworthy: the implementation of what is known as the Scherf solution and the restructuring
of the EWE Group.
On 14 July 2010 the German Federal Supreme Court declared the price-adjustment clause used since
April 2007 in standardised special contracts with EWE natural gas customers to be invalid. Although this
is a ruling on a point of law and not an injunction to pay, and despite EWE having at no time derived profits
to the detriment of its customers, EWE took a calculated decision to accommodate their demands.
The Supervisory Board and shareholders voted in favour of implementing a customer-friendly proposal
from the arbitrator Dr. Henning Scherf, which provides for the payment of around Euro 100 million to
EWE customers.
The Supervisory Board approved a reorganisation of the EWE Group in order to improve its strategic positioning.
This entailed in particular the spinning out of the Energy business area as of 1 July 2010 into
the newly established EWE ENERGIE AG, which is a wholly-owned subsidiary of EWE. The new Group
structure is intended to strengthen the regional principle even further and guarantee focused management
of the subsidiaries.
There were also personnel changes in 2010, both at the Board of Management and the Supervisory Board
of EWE. With effect from 1 August 2010 Dr. Willem Schoeber, Chief Executive Officer of swb AG, was
appointed as an additional member of the EWE Board of Management in order to represent the interests
of swb AG in the holding company. Mr. Heiko Harms and Dr. Thomas Neuber left the Board of Mana gement
as of 1 December 2010. Dr. Neuber is to have a greater involvement in the operating business as part of
his role as a member of the Boards of Management of EWE ENERGIE AG and swb AG, whereas Mr. Heiko
Harms left the Group by mutual consent.
Mr. Karl-Heinz Funke resigned his seat on the Supervisory Board of EWE as of 30 April 2010. The EWE
Annual General Meeting appointed Ms. Ulrike Schlieper to succeed him. Ms. Schlieper was then appointed
by the Supervisory Board members to the Finance and Audit Committee. Mr. Immo Schlepper
resigned his Supervisory Board seat as of 31 December 2010. He is succeeded as an employee representative
on the Supervisory Board as of 1 January 2011 by Mr. Uwe Borck.
Together with the Board of Management, the Supervisory Board committees prepared the meetings
and the resolutions of the Supervisory Board. In total the Steering Committee met nine times, and the
Finance and Audit Committee and Operating Committee each met twice.
Management
The individual financial statements of EWE prepared by the Board of Management in accordance with
the German Commercial Code (HGB), the IFRS consolidated financial statements, and the management
reports for EWE and the Group for the financial year 2010 have been audited by PricewaterhouseCoopers
AG, Wirtschaftsprüfungsgesellschaft, Oldenburg, elected as auditors at the Annual General Meeting on
26 April 2010 and appointed by the Supervisory Board. The auditors expressed no reservations. The auditors’
reports were distributed to the members of the Supervisory Board. They were included in the
discussion and examination of the financial statements and the consolidated financial statements and
were approved. The auditors were present at the Supervisory Board meeting dealing with the financial
statements, where they reported on the major findings of their audit and were available to answer questions.
Having conclusively examined the individual financial statements and consolidated financial
statements prepared by the Board of Management, the management report for EWE and the Group
management report as well as the proposal for the appropriation of distributable profit, the Supervisory
Board has no objections to make. The Supervisory Board today adopted the individual financial statements,
approved the consolidated financial statements and concurred with the Board of Management’s
proposal for the appropriation of profit.
The Board of Management also prepared a report as required under Section 312 of the German Stock
Corporation Act (AktG) on transactions with related parties. The auditors have audited this report and,
having no objections to make, gave the following statement:
“On the basis of our audit and in our professional opinion we confirm that
1. the factual statements of the report are correct,
2. the consideration paid by the company for the transactions mentioned was not inappropriately high.”
After examining the report ourselves the Supervisory Board concurs with the results of the audit and
declares that it has no objections to the statement of the Board of Management at the end of the
report on transactions with related parties.
The Supervisory Board expresses its thanks and appreciation to the Board of Management, all employees
and the Works Council members for their work in 2010.
Oldenburg, Germany, 21 March 2011
Supervisory Board
Günther Boekhoff
Chairman
Members of the supervisory Board p. 160–161
k

40 EWE ANNUAL REPORT 2010
GROUP REVIEW 2010 LETTER FROM THE BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD INVESTOR RELATIONS CORPORATE SOCIAL RESPONSIBILITY 41
160
120
80
40
investor Relations
EWE bonds and the capital market
In October 2004 EWE issued two euro bonds (maturities:
10 and 15 years, respectively) with an aggregate
volume of Euro 1.5 billion. In July 2009 EWE issued a
further bond for Euro 500 million with a maturity of
twelve years.
Fixed-interest markets were dominated by the European
debt crisis in 2010 and experienced phases of strong
secondary market volatility and higher risk premiums.
These were interspersed by periods of greater market
stability. The higher risk premiums mainly affected issuers
from southern Europe. Total new issue volume for
corporate bonds came to Euro 161 billion, which was
well down on the previous year (Euro 294 billion). This
is largely due to two factors. Firstly, companies’ funding
requirements were much lower following the record
year in 2009. Secondly, the European debt crisis meant
that issuers from southern Europe had difficulties accessing
the debt markets at times.
performance of the EWE bonds in 2010
Spread vs. mid-swaps (bp)
160
120
80
40
The average risk premium for bonds issued by companies
in the utilities sector rose sharply. The iBoxx-€-Utility
index closed on 31 December 2010 at 28 bp or 40 per
cent higher than the beginning of the year. This rise is
explained partly by the bonds of southern European utilities
contained in the index, which were hit disproportionately
by the debt crisis.
EWE’s bonds were largely able to escape these adverse
trends and at times traded significantly below levels from
the start of the year. This underlines the bonds’ stability.
On 31 December 2010 the EWE bonds from 2004 closed
with a risk premium over swaps of +46 bp for the bond
maturing in 2014 and +68 bp for the bond due in 2019.
Both papers were thus well below their opening-year levels.
The 2009 bond maturing in 2021 traded on 31 December
2010 with a risk premium of +111 bp over swaps,
which was slightly higher than at the start of the year.
0
Jan. Feb. Mar. April May June July Aug. Sep. Oct. Nov. Dec.
EWE 10-year
EWE 12-year
EWE 15-year
Utility Index
iBoxx Corporates
Management
iR communications
In the financial year 2010 EWE carried out vigorous investor
relations work and was in regular communication
with financial market participants. These include institutional
investors, financial analysts, private investors, and
everyone with an interest in the EWE bonds.
EWE has extended the range of investor relations material
available on its website (www.ewe.com). Internet
users will find a wealth of information here for analysing
the EWE bonds.
Despite being an unlisted company, EWE has voluntarily
issued the declaration of conformity pursuant to Section
161 of the German Stock Corporation Act and detailed
to what extent the company complies with the recommendations
of the German Corporate Governance Code
(DCGK) in recent years.
Exceptions based on the “comply or explain” principle
generally resulted from the fact that EWE only has
three shareholders. This shareholder structure allows
shareholders to be closely, directly, and continuously
involved in all matters of relevance to the company.
For this reason, the Board of Management and Super-
visory Board re solved that EWE will no longer issue a
declaration of conformity with DCGK from the financial
year 2010 onwards.
Regular communications with rating analysts bolster
confidence in the bonds issued by EWE AG. Altogether
EWE has a good credit standing, as confirmed by the
rating agency Moody’s. It currently stands at A2 with a
stable outlook.
EWE sees no need to keep two ratings and since September
2010 has no longer retained the second rating from
S & P, as EWE does not issue securities on a regular basis
and market participants have indicated that one rating
is sufficient for an independent assessment of the company’s
creditworthiness.
EWE 10-year bond EWE 15-year bond EWE 12-year bond
IsIN DE000a0DlU51 DE000a0DlU69 DE000a0z2a12
security code no. a0DlU5 a0DlU6 a0z2a1
Issue date 14.10.2004 14.10.2004 16.7.2009
Maturity 14.10.2014 14.10.2019 16.7.2021
remaining term (as from april 2011) 3.5 years 9.5 years 10.3 years
Currency EUr EUr EUr
Volume 1 billion 0.5 billion 0.5 billion
Nominal amount 1,000.0 1,000.0 1,000.0
Coupon type fixed coupon fixed coupon fixed coupon
Nominal interest 4.375 % 4.875 % 5.25 %
Interest paid annually annually annually
Interest payment date 14 October 14 October 16 july
Issue spread +40 bp +52 bp +160 bp
spread as per 31.12.2010 +46 bp +68 bp +111 bp

42 EWE ANNUAL REPORT 2010
GROUP REVIEW 2010 LETTER FROM THE BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD INVESTOR RELATIONS CORPORATE SOCIAL RESPONSIBILITY 43
Corporate social responsibility –
thinking in a broader context
EWE’s business model as a regional utility and multiservice
company makes it natural for the Group to
assume responsibilities that go beyond its commercial
operations: EWE knows how important the “soft” factors
are in creating a propitious environment for success ful
development. True to its motto of thinking in a broader
context, EWE initiates and supports projects in four areas:
education and science, society, climate protection,
and culture and sport. The Group is also committed to
good working conditions and achieving a sound work-life
balance. A number of examples are presented below.
Research and education – knowledge for
tomorrow
Energy, telecommunications and information technology
– the sectors in which the Group operates require
considerable amounts of research and knowledge. They
require highly qualified employees who are capable of
finding innovative solutions in complex economic and
technical contexts. For this reason EWE promotes education
and research at all levels, from primary schools
to academies.
Our involvement begins with the very young: on the initiative
of BTC, primary school children in years 3 and 4
have written a “first book” that helps pupils in year 1
learning to read and write. This takes place in Bremen,
Bremerhaven, Oldenburg, Leer and elsewhere. At kindergartens
and schools in Bremen swb runs an education
initiative named “Lernprojekte” that supports learning
projects using innovative methods to teach school subjects
and social skills. Young researchers up to the age
of 14 demonstrate their knowledge by carrying out experiments
within the framework of the “Schüler experimentieren”
project. The research competition “Jugend
forscht” is organised in Lower Saxony by EWE and
awards prizes to the best new developments in areas
such as the working environment, computer science
and technology.
The step from school into the world of work (or the world
of science) is a vital transition for which EWE offers
young people its support. Throughout Germany schools
can order the newspaper Handelsblatt Newcomer free
of charge. The paper contains articles on current economic
topics written by school chil dren, scientists and
journalists. At the Putbus IT College on Rügen young
people complete vocational and professional training
courses in the field of IT systems. The MINToring programme
supports school children interested in the natural
sciences in Berlin, Oldenburg and other university
towns and cities in their transition from school to university.
Graduates with a bachelor’s degree in a technical
subject can also work on sustainable energy supply
systems at Bremen University thanks to a chair funded
by EWE and swb.
Work and life – keeping it balanced
For a forward-looking company it is vital to train tomorrow’s
employees and spark enthusiasm for its business
concerns. At the same time it is just as important to inspire
and maintain the creativity of today’s employees.
In addition to specialised professional training this includes
maintaining a sound work-life balance as well as
keeping mentally and physically fit.
Throughout the Group, wherever it is technically possible,
all employees work flexitime and have the op portunity
to work from home. Almost all of the companies provide
daycare for children, either in the com pany’s own
daycare centres or in external ones. Sports clubs, social
welfare officers and company health insurance at the
EWE companies support employees’ emotional and
physical wellbeing. The retirement benefits provided by
the Group ensure that employee commitment is still
rewarded after retirement.
Individual companies also set their own priorities.
EWE TEL offers to keep employees on parental leave
informed about developments in the company and in
touch with colleagues in order to facilitate the return
to work. With its “Good work” programme swb aims to
encourage junior employees and retain older ones.
Management
Commitment to society – for a strong
community
EWE provides infrastructure, utilities and services for
core areas of society – a business which focuses on the
needs of society and is dependent on its stability. Promoting
social cohesion is therefore an important element
of the company’s involvement.
EWE encourages voluntary work to help others. On
National Volunteer Day employees from all over the
Group are given the day off to engage in charitable activities.
The employees also donate the cent amounts
of their salaries. These amounts are matched by EWE
and donated to charities working with children and
young people.
Each company also has specific areas of activity. For instance,
BTC sponsors the Bremen Diversity Prize for
cultural diversity in companies and organisations, while
swb has launched the “Bremen tidies up” initiative, one
of the largest voluntary rubbish-collection projects in
Germany, together with the City Council and local
partners.
Climate protection – with energy for
tomorrow
Sustainability and climate protection are key challenges
for the energy industry. The energy supply systems of
tomorrow need the active participation of households
and industry. This is why EWE not only implements its
e³ strategy of energy efficiency, lower consumption
and renewable energies in its own operations, but also
carries out a wide range of activities to raise awareness
of climate protection.
Saving energy represents a great opportunity for the
climate. This was demonstrated by EWE and the Emsland
district in a three-year trial of emissions trading for
private households involving some 160 participants.
Bill deductions were awarded to those who used the
extensive advice provided to reduce their CO 2 emissions
by more than average, by insulating their houses
for instance. The project, assisted by scientific experts,
saved more than 427 tonnes of CO 2. This experience
led to the introduction of the CO 2 bonus, which transfers
the principle to EWE’s natural gas customers.
Increases in energy efficiency also hold great potential.
EWE and swb support the purchase of energy-saving
household appliances and low-emission natural gaspowered
vehicles. The Group runs townhall meetings
with companies and local councils to share successful
efficiency policies and awards prizes for outstanding
solutions – such as the Bremen North West Environment
Award sponsored by swb.
As public events are a good opportunity to win over
large numbers of people for renewable energies, swb
supplies eco-power to the Christmas market, the
Breminale, the Sail event and German Unity Day in
Bremen.
Culture and sport – making the region
more attractive
The EWE Group is majority-owned by local councils and
builds on the potential of its regions. Making them more
attractive as places to live and do business is therefore
a focus of corporate responsibility activities. This includes
sponsorship of art, culture and sport. Examples range
from the EWE Cup for youth football to top clubs such
as Werder Bremen, from the wheelchair basketball club
RSC Oldenburg to the open swb marathon, from the
Oldenburg film festival to the Breminale, and from the
Brandenburg State Orchestra in Frankfurt to the Kunsthalle
Bremen, an art museum.
The EWE Foundation – independent
involvement
EWE established the EWE Foundation in 2001. The
charitable foundation is independent and sponsors regional
projects in the fields of education, science and
culture. Its activities include the Klaus von Klitzing prize
for committed science teachers who encourage pupils
to carry out research, setting up a degree course in
economics and computer science at the Vocational
College of East Frisia and sponsorship of the Barkenhoff
Foundation in Worpswede.

44 EWE ANNUAL REPORT 2010
Group management report
together with the EWE management report
45 course of business and economic environment
45 group structure and business operations
45 Corporate Centre / Consolidation
46 EWE Energy business area
49 swb business area
50 New Markets and ICT business area
51 company management and strategy
51 Internal management system
52 Group strategy
52 research and development
52 Focus of R & D activities
53 R & D spending
53 R & D staff
54 overview of the course of business
54 General economic conditions
55 Energy market
58 Telecommunications market
58 Legal environment
62 Significant events
63 Employees
64 Earnings, assets and financial position
64 Earnings position
65 Assets and financial position
66 notes to the annual financial statements
of EWE Ag in accordance with german
commercial law
69 performance of business areas
73 Supplementary report
73 risk report
73 Structure and core elements of the opportunity
and risk management system
73 Early recognition process for risks
74 main categories of risk
75 Summary assessment of the risk situation
75 report on the internal control and risk
management system
76 outlook
76 forecast macroeconomic developments
77 Earnings forecast
77 Expected development in the business areas
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
Course of business and economic environment
Group structure
and business operations
The EWE Group has its head offices in Oldenburg and
provides comprehensive services for energy, telecommunications
and IT technology in regionally contiguous
market areas.
EWE has realigned itself with effect as of 1 July 2010.
The aim of this realignment is to ensure optimal management
of the company, which has grown rapidly in recent
years, and emphasise its identity as a multi-service provider.
The realignment of the company’s business areas
reinforces the regional principle of the EWE Group by
systematically reorganising the company’s subsidiaries
and shareholdings by markets and regions.
Corporate Centre / Consolidation
The Corporate Centre business area mainly comprises
the Group’s functional divisions of EWE AG, the shareholdings
of EWE AG and Group-level consolidation. It
is therefore distinctly separate from the operating business
areas EWE Energy, swb, and New Markets and ICT.
The EWE AG Corporate Centre pools the strategic, crossmarket
development and planning of the business areas,
and guarantees financing within the EWE Group. EWE
IMMOBILIEN GmbH, which has been fully consolidated
CoRpoRATE CEnTRE /
ConSolidATion
EWE Ag
VNG aG 3
EWE IMMOBIlIEN GmbH
EWE EnErgiE Ag 2
EWE NETz GmbH
EWE WassEr GmbH
aequamus GmbH 1
DOTI GmbH & Co. KG 1
riffgat Beteiligungs
GmbH & Co. KG
MVr Müllverwertung
rugenberger Damm
GmbH & Co. KG1 1 Associated company 2 Subgroup respectively lead company 3 Held for sale
EWE GRoup
since 1 July 2010, and VNG Verbundnetz Gas AG, which
has been reported as held for sale, are allocated to the
Corporate Centre business area together with EWE AG.
EWE immobiliEn
EWE IMMOBILIEN GmbH was established on 1 July 2010
as part of the Group’s organisational restructuring. The
company’s core task is to manage the land belonging to
the Group. This includes office buildings and technical
facilities such as data centres and telecommunications
nodes, several residential buildings and establishments
like the ZentrumZukunft and the Laboratory for Environmental
Analysis. EWE IMMOBILIEN also brings its experience
from managing approx. 250,000 square metres
of real estate in multiple locations to bear when planning
and developing new properties.
Vng
VNG – Verbundnetz Gas AG (VNG), based in Leipzig, is
allocated to the Corporate Centre business area and has
been reported as held for sale. It is a pan-regional energy
wholesale trading company which supplies regional providers,
municipal utilities and industrial companies with
natural gas, mainly in eastern Germany. EWE holds a
47.9 per cent shareholding in VNG and intends to transfer
these shares to EnBW Energie Baden-Württemberg.
The German Federal Cartel Office approved the sale in
August 2009 subject to conditions.
EWE EnERGy SWb nEW MARkETS
And iCT
swb Ag 2
EWE Polska sp. z o.o. 2
EWE ENErjI a. Ş. 2
EWE TEl GmbH 2
BTC Business Technology
Consulting aG2 htp GmbH 1
45

46 EWE ANNUAL REPORT 2010
720
540
360
180
0
EWE Energy: Heat contracting inst. capacity
(in MW, therm.)
900 900
841.4
720
540
360
180
0
725.6
2009 2010
EWE Energy business area
The EWE Energy business area is responsible for the
Group’s energy business in the Ems / Weser / Elbe region,
Brandenburg, northern West Pomerania and on the
island of Rügen. EWE ENERGIE AG (EWE ENERGIE) is
the management company responsible for the sale and
trading of energy and greenhouse gas emissions certificates,
as well as production, procurement and storage.
In addition to its energy business, EWE ENERGIE also
provides wastewater and waste disposal services. The
other significant companies allocated to this business
area are EWE NETZ GmbH (EWE NETZ; network infrastructure
for electricity, natural gas and telecommunications),
EWE WASSER GmbH (EWE WASSER; wastewater
removal and processing), Riffgat Beteiligungs GmbH &
Co. KG (RIFFGAT offshore wind farm) and the associated
companies DOTI Deutsche Offshore-Testfeld- und
Infrastruktur GmbH & Co. KG (DOTI; alpha ventus offshore
wind farm), Aequamus GmbH (balancing group
management) and MVR Müllverwertung Rugenberger
Damm GmbH & Co. KG (waste disposal and processing).
Sales of energy and related energy services
EWE ENERGIE AG sells electricity, natural gas and energy
services to private and business customers, industrial
clients and municipal utilities, thereby covering all customer
segments. The sales focus is on the Ems / Weser /
Elbe region, Brandenburg, northern West Pomerania
and the island of Rügen. The number of new customers
acquired outside these domestic markets increased in
2010. The company has also agreed new sales partnerships
in retail, direct sales and the online market.
EWE Energy: Heat contracting inst. capacity
(in MW, elect.)
30
20
10
0
26.2
26.2
2009 2010
EWE ENERGIE AG maintains a presence in its home regions
with more than 40 local service points and offers
private and business customers a varied range of products
and services. The Group’s ability to combine electricity,
gas and telecommunications into a single package gives
it an advantage over the competition. In the Ems / Weser /
Elbe region and parts of Brandenburg, EWE ENERGIE AG
operates its own network of natural gas filling stations,
which was expanded again in 2010 and now includes
84 stations.
Sales of heating services for private customers grew consistently
in 2010. EWE works closely with local tradespeople
in order to make contracting services for heating
equipment more attractive for this customer segment.
Competition in the electricity and natural gas markets
intensified once again in 2010. Mergers between market
areas caused the number of market participants to rise,
particularly in the natural gas sector. EWE ENERGIE AG’s
churn rates were far below the national average despite
increased pressure from competition. Aggregate churn
for electricity customers came to around 12 per cent in
December 2010 (German national average: 22 per cent).
Around 10 per cent of gas customers decided to switch
to a new provider by December 2010 (German national
average: 12 per cent).
For industrial customers and municipal utilities EWE
not only offers traditional full-service supply, but also
innovative products such as purchasing in tranches and
fully flexible portfolio management as well as consulting
on matters concerning CO 2 emissions certificates
and certificate trading.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
EWE Energy: Generation capacity for renewable energies
(in MW)
110.0 110,0
82.5 82,5
55.0 55,0
27.5 27,5
0,0 0
97.5
2009
97.5
2010
Industrial and business customers as well as local councils
are increasingly asking themselves how they can respond
to the social challenge of protecting the climate in a
responsible commercial manner. EWE offers new approaches
and solutions in this field with the “CO 2 Solutions”
business area. Examples of such solutions are
emissions accounting and compensation programmes.
The statutory framework set by the Renewable Energy
Act (EEG), the Combined Heat and Power Act (KWKG)
and the Renewable Energy Heating Act (EEWärmeG)
promotes the use of renewable energies for generating
heat. This means that market conditions for the corresponding
energy services are generally positive. EWE
provides contracting models for heating systems and a
range of heating services for business customers and
municipalities. Despite intense competition, EWE was
still able to expand in this area and was awarded several
major contracts.
Wastewater and waste disposal
In addition to the energy business, this business area
also includes wastewater and waste disposal services in
the regions named above. EWE WASSER manages the
operation of municipal and private wastewater purification
plants and drainage networks. In 2010 the company
treated a total of 9.8 million cubic metres (m³) of
wastewater in 34 wastewater purification plants.
In the waste disposal business EWE operates composting
sites in Ammerland and Rodenkirchen on behalf of
local authorities. EWE holds a 20 per cent stake in the
Rugenberger Damm waste processing plant (MVR) in
Hamburg. At the MVR waste undergoes thermal treatment
to produce energy and other saleable products
such as gypsum and slag.
0.9
2009
2.0
2010
7.1
2009
7.1
2010
0.0
0.7
105.5
Total
107.3
2009 2010 2009 2010
Wind
Solar
Biomass
Water
Total
production
EWE ENERGIE AG is also involved in the production of
electricity and natural gas to a limited extent.
In 2010 the company produced 185 million m³ of its own
natural gas. It stems from shareholdings in gas fields in
the German and Dutch areas of the North Sea. Extraction
volumes fell by 8.6 per cent compared with the previous
year. This was due to the ongoing exploit ation of the
natural gas fields. Volumes would have been even lower
if production in two new fields had not commenced in
October 2009 and May 2010. In order to open up new
reserves, EWE is currently taking part in exploration
projects in the Dutch and British North Sea regions and
off the coast of Denmark.
In the area of power generation EWE ENERGIE AG has
its own production capacities in the field of renewable
energies (wind, biomass, biogas, solar), with total output
of 107.3 megawatts. This is almost identical to the
previous year’s value. In 2010, the installed capacity
for photo voltaics was increased when the first parts of
the photovoltaics system at Bremen’s Weser stadium
began operating.
47

48 EWE ANNUAL REPORT 2010
EWE Energy: natural gas procurement
(in %)
51.5
2010
16.5
32.0
Germany
Netherlands
Russia
EWE is continuously increasing its generation of electricity
from renewable energies. One year after the twelve
alpha ventus wind turbines were brought online in phases,
the offshore wind farm has fed 170,000 megawatt hours
of electricity into the grid. According to one study, the
wind farm has already proven its ecological worth, having
generated more renewable energy than the conventional
energy that was expended in its construction. As Germany’s
first offshore wind farm, alpha ventus will provide
the entirety of the young offshore wind energy sector
with the fundamental experience it needs to construct
further offshore wind farms in the North Sea and the
Baltic. EWE’s share of the wind farm’s installed capacity
comes to 28.5 MW.
EWE furthered the development of another offshore project
in the reporting year. The trade supervisory authority
approved the construction of the RIFFGAT offshore wind
farm in September 2010. Thirty wind turbines, each with
a capacity of 3.6 MW, have been planned. Contracts for
all of the main supplies and services will be put out to
tender across Europe and awarded by April 2011. The
construction phase is scheduled for completion in December
2012. EWE ENERGIE AG is realising the Riffgat
project with its partner ENOVA.
The photovoltaics system integrated into Bremen’s
Weser stadium was scheduled to be brought completely
online in 2010, but this was rescheduled to take place
in 2011 after renovation works at the stadium have
been completed.
EWE Energy: network length
(in tkm)
100
80
60
40
20
0
100
80
60
40
20
0
80.5
Elec-
tricity
55.1
Natural
gas
32.2
14.9
Telecommunication
17.3
Total
Copper
Optical fibre
procurement
EWE ENERGIE AG purchases electricity from upstream
suppliers and on wholesale markets. In the reporting
period the company purchased at total of 13.4 billion
kilowatt hours (kWh) from third parties. Electricity purchasing
is optimised by short-term buying and selling
on the spot market.
The company buys natural gas from suppliers in Germany
and abroad. The majority of its long-term supply
contracts are tied to the price of oil. The total volume
in 2010 amounted to 41.2 billion kWh (see diagram top
left).
Storage
EWE ENERGIE AG operates 25 caverns at the Huntorf
and Nüttermoor natural gas storage facilities in Lower
Saxony and a further one at Rüdersdorf near Berlin. This
provides a current storage capacity (working gas volume)
of 1.4 billion cubic metres (m³). More than half of the
storage volume is leased to third parties.
EWE invested in expanding and modernising its existing
gas storage facilities and pursued plans to develop
new storage capacities in 2010.
The largest storage project involved the construction
of brine processing plants and a brine transport line at
the Jemgum site, which was completed in 2010. Only
three of the eight caverns are expected to reach the
originally planned geometric volume of 700,000 m³.
The volume capacity of the other caverns is between
150,000 and 450,000 m³, making for a possible total
working gas volume of approx. 254 million m³.
Another gas storage project at the Moeckow site is
currently in the planning approval stage.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
swb: Generation capacity for renewable energies
(in MW)
50
40
45,00
33,75
30
22,50
20
11,25
10
0
0,00
30.0
39.6 39.8
0.2
2009
2010 2009 2010
network
A wholly owned subsidiary of EWE ENERGIE AG, EWE
NETZ GmbH operates an electricity grid 80,000 km
in length in the Ems / Weser / Elbe region, a gas network
over 55,000 km long in the Ems / Weser / Elbe and Branden
burg regions, on the island of Rügen and in the
northern part of West Pomerania as well as a telecommunications
network covering around 32,000 km. Its
responsibilities include the operational management,
maintenance, repair and expansion of the network infrastructure
as well as network sales. The company also
operates drinking water networks in Bremervörde, Cuxhaven,
Oldenburg, Scheeßel and Varel.
EWE TEL GmbH commissioned EWE NETZ to lay around
1,200 km of fibre optic cable in 2010 to improve broadband
coverage. In order to make the expansion of the
telecommunications network more efficient, cables
were laid at the same time as work was being carried
out on the electricity and natural gas networks.
Aequamus GmbH has been operating since 2009. The
company is responsible for coordinating the low-grade
gas 1 market area and keeping track of its accounts.
low-grade gas 1 stretches from the North Sea coast to
the Harz region, and from the Dutch border as far as
Wolfsburg. The company is held equally by EWE NETZ
GmbH, Erd gas Münster Transport GmbH & Co. KG and
Gasunie Deutschland Transport Services GmbH. Market
areas are groups of gas networks with the same gas
quality which form a uniform trading and balancing zone.
0.2
30.2
2009
Total
2010
swb business area
Wind
Solar
Total
The swb business area comprises the services provided
by swb AG and its shareholdings in the energy, drinking
water, waste disposal and wastewater removal sectors.
The group of companies has offices in Bremen and Bremerhaven
and strengthens the EWE Group’s presence
in northern Germany. swb is presented as a subgroup in
the consolidated financial statements of the EWE Group.
Electricity
In the Electricity business area swb covers the entire
value chain, from generation through to network operation
and distribution to private, commercial and industrial
customers. swb supplies electricity to some
400,000 customers in the state of Bremen. Its market
share is approx. 86 per cent.
swb operates power generation facilities at three sites
in the Bremen metropolitan area, with a total installed
capacity of over 1,000 MW. swb intends to construct a
natural gas-powered combination gas and steam power
plant in partnership with a major customer. The two
parties will hold a combined 51 per cent stake in the
company; 49 per cent will go to one or more partners.
The final investment decision is scheduled for 2011.
Recognising that fossil energy resources are finite and
global climate protection targets are becoming ever
more stringent, swb has developed a growth business
area: energy from waste. A medium-calorific power
plant was constructed in Bremen to this end, which
went into operation on 1 March 2010. The plant burns
medium-calorific sorting residues from commercial
waste sorting plants and waste processing plants.
49

50 EWE ANNUAL REPORT 2010
The resulting thermal energy is converted into electrical
energy using a steam generator and a 30 MW turbine. The
two largest combustion lines are due to be modernised,
greatly increasing the efficiency of the waste-incineration
plant, which is operated by swb Entsorgung. The planned
capital expenditure will fulfil the requirements of the EU
Waste Framework Directive. The trade supervisory authority
approved the construction project in November
2010. The conversion is scheduled for completion in
December 2012.
swb is committed to increasing the amount of electricity
generated from renewable energies. The company
constructed two more wind farms and brought them online
in 2010. This increases the installed capacity for renewable
energies to 40 MW. Construction of the Weser
hydroelectric facility is proceeding as scheduled.
natural gas, drinking water and heat
swb supplies some 160,000 households and businesses
in the state of Bremen with natural gas (market share:
93 per cent) and around 660,000 residents with drinking
water. The company has its own natural gas storage
capacities to optimise the cost of procuring natural gas
and extracts around 15 million m³ of ground water from
its own wells at various sites. swb also sells around one
billion kilowatt hours of heat produced in swb power
plants and smaller heating plants every year.
technical services
Technical services are a nationwide growth area for swb.
The company uses its decades of expertise as a power
plant and network operator to develop services such as
contracting, operating industrial networks and networks
for wide-area supply, and street lighting.
swb: networking length
(in tkm)
15
10
5
0
15
10
5
0
10.6
Electricity
4.6
Natural
gas
0.4
Heat
New Markets and ICT business area
The New Markets and ICT business area comprises the
energy business of the EWE Group in Poland and Turkey
as well as the Information Technology and Telecommunications
business units. The subgroups EWE Polska
Sp. z o.o. (EWE Polska), EWE ENERJI A.S. (EWE ENERJI),
BTC AG (BTC) and EWE TEL GmbH (EWE TEL) are all
allocated to this business area. The telephone company
htp GmbH (htp) is held as an associated company.
poland
EWE Polska has its headquarters in Poznań, Poland. The
company was established in 1998. It acts as the management
company for EWE’s energy operations in Poland
and serves as a platform for future growth in this market.
The core business of EWE Polska is the construction and
leasing of high-pressure gas lines in regions of Poland not
previously connected to a natural gas distri bution network.
It holds the Group’s shares in the sales company
EWE Energia Sp. z o.o. (EWE Energia) and EWE zielona
energia Sp. z o.o. (EWE zielona energia), the latter of
which focuses on the field of renewable energies. EWE
Energia supplies natural gas to some 10,000 customers
in 40 municipalities.
turkey
EWE established EWE Enerji in Istanbul in early 2007
to expand its operations in Turkey. EWE Enerji is the
management company for the sale and transport of
natural gas in Turkey. It holds the shares in the two
regional natural gas suppliers Bursagaz A.Ş. and Kayserigaz
A.Ş., as well as in the gas trading company EWE
Doğalgaz A.Ş. The Turkish gas market is a developing
market. Both gas supply companies have been able to
increase the number of customers they serve progressively
over time to over 600,000 today. The gas trading company
opens up new opportunities for the procurement
and sale of natural gas, which makes it a good com plement
to EWE’s end-consumer business. In 2010, its first
full financial year, the company increased its annual gas
trade volumes as planned to just under 800 million m³.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
telecommunications
The subsidiary EWE TEL is a full-service provider of telecommunication
services (internet, telephone, mobile
and local television) for both commercial and private
customers. EWE TEL is one of the largest regional telephone
companies in Germany, serving some 640,000
customers as of the end of 2010.
One of EWE TEL’s goals is to expand broadband technology
in line with demand: in the Ems / Weser / Elbe region,
East Westphalia and Brandenburg, EWE TEL is currently
building a modern fibre optic network to enable highspeed
data transfer and form the basis for the competitive
3Play product that delivers internet, telephone and
TV to customers via a single line.
EWE TEL continued the process of change begun in 2009
and optimised its organisational structure and processes
further in the reporting year. The company plans to
devote more resources to marketing bundled energy
and telecommunications products in the future. A project
was started in 2010 with the aim of harmonising these
two markets.
Telecommunications service provider htp is based in
Hanover and offers landline and internet products as
well as DSL connections with varying bandwidths. Its
product portfolio also includes call centres, value-added
services and network services. htp provided services to
more than 80,000 customers in 2010.
information technology
The subsidiary BTC has its head offices in Oldenburg
and offers IT consulting, system integration and management,
geo-information systems and network control
services throughout Germany. Its customers include
companies in the energy, industrial and service sectors,
telecommunications providers, the public sector, and
automotive manufacturers and suppliers. BTC also offers
multi-media services via subsidiaries and has international
operations in Switzerland, Turkey, Poland and
Japan. The company is increasingly taking part in research
and development projects such as decentralised energy
management systems, the EWE project eTelligence and
the development of the EWE trio smartbox.
Company management and strategy
Internal management system
The 2010 consolidated financial statements for EWE AG
are prepared in line with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
The transition to IFRS for external reporting leads to a
convergence between internal and external reporting systems.
This convergence of the reporting lines is reflected
in uniform reporting structures as well as a common
basis of data and indicators derived from them.
The reporting structures are aligned with the new Group
structure as presented under IFRS, with the operating
business areas EWE Energy, swb, and New Markets and
ICT. In addition, the Corporate Centre / Consolidation
business area is responsible for the head office functions
of the Group. This organisational structure is the starting
point for a multi-tier management system, which
enables entrepreneurial responsibility to be devolved
and creates a high degree of transparency at the same
time. EWE’s internal management system distinguishes
between Group and segment levels. The operating
management systems in the decentralised reporting
units have a finer granularity than Group reporting.
Both internal and external reporting are based on the same
management information system. This technological
platform [SAP-SEM-BCS 6.0 together with SAP-BI 7.0]
enables a uniform basis of data to be used for different
reporting purposes and guarantees that the information
used is congruent across reporting levels and within each
reporting level. This is the basis for EWE’s system of indicators.
At Group level, attention is focussed on financial
indicators and certain industry-specific indicators.
The business areas and the organisational units below
them monitor additional specific indicators for the decentralised
management of their operating business.
51

52 EWE ANNUAL REPORT 2010
Across all reporting levels, the system of indicators concentrates
on the principal variables for managing the
Group. At its core is the focus on operating earnings before
interest and taxes (EBIT) when looking at margins
and returns. This aggregate approach is supplemented
by specific analyses of margins and yields for the operating
activities. Another focus of Group reporting is
capital expenditure to ensure the Group’s future viability.
It also considers financial indicators intended to
secure financing on favourable terms and to maintain
the company’s good rating. Finally, the return on capital
and on sales is calculated to assess profitability.
Internal and external Group reporting is continually adjusted
to meet the operating requirements for managing
the Group and current legal requirements.
Group strategy
EWE is the first fully integrated group to bring together
the expertise needed for the energy supply of the future
in the key fields of energy, telecommunications and information
technology. By expanding its core business
segment energy to include information and communications
technology, the Group is able to develop and
operate modern energy supply systems fully in-house.
Because each Group company provides market leading
products in their particular field, the Group as a whole
can use these synergies in every field.
EWE also remains committed to further developing renewable
energies for energy generation, complemented
by conventional power plants that are efficient and
flexible. These conventional power plants provide the
control energy required to compensate for fluctuations
in the supply of wind and solar power. EWE’s strong
position in the area of natural gas – which, as an efficient
source of energy for electricity, heat and mobility,
remains an integral component of our energy supply –
rounds out the company’s portfolio. The Group’s reliable,
modern networks, and information and communications
technology expertise guarantee that an ever increasing
proportion of our energy will be derived from renewable
resources reliably and efficiently.
Decentralised energy supply systems will play an increasingly
important role in making this happen. When
an energy production system is supported by a large
number of small power generation facilities, coordinating
it efficiently involves knowing the different levels of
supply and demand on the ground, and then finding the
shortest route possible to connect the two. Thanks to
their history as regional providers, the companies in the
EWE Group are well acquainted with their respective
regions, understand their developments and know what
they need. This allows the Group to develop homegrown
solutions suitable for the region and react appropriately
to regional developments. That’s why EWE has focused
its growth strategy on particular attractive regions.
The path to the sustainable, environmentally friendly
energy supply of the future involves intensive research,
particularly in the areas of storage technology and in the
construction and management of intelligent electricity
networks. EWE has built up a highly capable research
network, comprising numerous research partnerships, its
own Research and Development department and NEXT
ENERGY, the EWE Research Centre for Energy Technology.
The network’s objective is to make the most of scientific
knowledge by turning it into forward-looking products,
services and processes.
Research and development
Focus of R & D activities
EWE carries out research and development as a central
element for the strategic development of the Group and
as the basis for developing new products for its customers.
These activities are focused on tapping new energy
services and efficient supply paths for the energy business.
All of the Group’s research and development activities
are based on the so-called Bullensee Assumptions,
which EWE produced together with members of the
academic community and published in February 2006.
These Assumptions are available on the internet at
www.ewe.de/bullenseethesen.
research focus on network management
Technological progress is needed to secure the energy
supply of the future. If increasing amounts of electricity
from decentralised renewable energy sources are to be
fed into the network in the future, an intelligent management
system capable of handling more complex demands
than existing supply structures is needed. EWE and its
partners have been promoting the development of such
a decentralised energy management system for years.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
There has been trading with electricity on a regional
marketplace in Cuxhaven since July 2010. This was a
milestone of great importance in the eTelligence research
project. The automated trading environment
is used by a number of generators and consumers of
electricity in Cuxhaven, including cold stores and CHP
plants. The eTelligence marketplace gives even smallerscale,
decentralised producers access to the electricity
market. The project demonstrates how government initiatives
like the Renewable Energy Act can help even
smaller-scale plants to operate efficiently and turn a
profit. A number of partners are working together on
eTelligence to develop solutions for an energy supply
system which is tailored to the specifics of the Cuxhaven
trial region. EWE is the leader of the consortium.
The project is funded by the German Federal Ministry
of Economics and Technology.
research focus on domestic energy management
One project that research in this area concentrated on
was developing an energy metering and information system
(a “smart meter”). The software for the EWE trio
smartbox was developed in 2010 to make the product
ready for market. The box was brought to market in February
2011 as a product for household customers. It connects
the customer’s electricity and gas meters to the
energy supplier’s central server and records the household’s
energy consumption in real time. The system uses
modern communications infrastructures such as fibre
optic connections and the ADSL Next Generation Network
(telephony and internet services over the TCP / IP
transmission protocol). The Group had the expertise
needed to develop the box fully in-house.
Using domestic appliances as dynamic energy storage
facilities is a central research topic in the development
of decentralised energy management systems. Essentially,
it is about the precise management of demand
for electricity. EWE tested a range of white goods in
cooperation with Miele. The subsequent practical field
tests will provide EWE with concrete information about
the storage potential of domestic appliances.
EWE is also looking into the potential of installing infrastructure
in customers’ houses and business premises.
Areas under consideration include entertainment and
telecommunications as well as comfort, safety and
health. Technical advances in this area are opening up
new potential for mass-market solutions. The EWE
smarthome project was launched in 2010 to identify
potential products.
research focus on power generation management
The EWE Group’s first virtual power plant went into operation
in 2010. It uses modern information and communications
technology to bring decentralised energy
production facilities together. At launch, EWE facilities
in the network area between the Weser and Ems rivers
had a total capacity of 11 MW. The IT subsidiary BTC has
developed specialised software to handle the trading of
the electricity generated by the virtual power plant on
the tertiary reserve market. EWE intends to expand the
virtual power plant by adding different types of facilities
to the system.
research focus on mobility management
The German Federal Ministry of Transport, Building
and Urban Development is funding the development of
sus tainable and integrative electric mobility concepts
in the trial region of Bremen / Oldenburg. As part of the
“Electric Mobility Fleet Test”, EWE is working on the
infrastructure required to meet the region’s needs, procuring
vehicles and generally monitoring developments
in the business area. The aim of the project is to develop
new charging infrastructure concepts while taking technical,
economic and user-dependent considerations
into account.
R & D spending
In 2010 EWE AG spent Euro 16.3 million on research
and development (previous year: Euro 40.0 million).
R & D staff
Since 2008 EWE has had a separate department for
research and development, which pools all the Group’s
activities. The department has 17 full-time employees,
one trainee and several graduands, and works closely
with other departments in the EWE Group. They provide
support for the development and launch of product and
process innovations and for opening up new business areas.
53

54 EWE ANNUAL REPORT 2010
overview of the course of business
General economic conditions
After a period of economic recovery, both global production
and trade returned to roughly pre-crisis levels in
2010. The extremely wide-ranging monetary and fiscal
policy of several nations and stable demand from emerging
economies contributed greatly to the considerable
improvement in the economy. The German Council of
Economic Experts expects global production to grow
by 4.8 per cent in 2010. However, the global economy,
which was so strong between October 2009 and March
2010, has lost some of its momentum since the spring
of 2010. Increased fears of a “global currency war”
overshadowed the generally positive development of
the economy in 2010. This put the brakes somewhat on
the global economic recovery. The contributions from
the individual groups of countries to the improvement
of the global economy varied considerably. While most
industrialised nations were unable to quite make up for
all of their lost GDP, several emerging economies are now
performing far better than they were before the crisis.
The economy of the United States recovered noticeably
at first, growing by around 1 per cent in the first half of
2010, a much stronger performance than most other
industrialised nations managed. The persistent troubles
on the American employment and real-estate markets
made the outlook for the second half of the year somewhat
bleaker. Given the stability of the financial markets,
the USA’s high level of debt also puts its economy in a
risky position.
After a brief slowdown, the emerging economies regained
their pre-crisis momentum in 2010. Asia’s emerging economies
played a particularly noticeable role in fuelling
the expansion of the global economy. This improvement
was spearheaded by the People’s Republic of China. However,
there have been recent concerns over the possibility
of an investment or property bubble developing. The
economies of India and Brazil were shaped by the stability
of their internal markets, although the risk of price
bubbles on their financial and property markets also increased.
Russia is still languishing behind the other BRIC
countries. The Russian economy is making slow progress
recuperating from its dramatic collapse during the financial
crisis.
The economic recovery in the eurozone was somewhat
sluggish at the beginning of 2010, but gained momentum
in the second quarter thanks to Germany’s particularly
strong economic performance. As with the global economy
as a whole, some countries in the eurozone are experiencing
more rapid recovery than others. Growth in
the second quarter of 2010 fell between 2.2 per cent in
Germany and -1.8 per cent in Greece. Spain and Italy
also experienced slower recovery than average, and Europe’s
peripheral countries are faced with the challenge
of paying off high levels of national debt. The unemployment
rate also shot up in some parts of the eurozone,
throwing cold water on the pick-up in consumer demand.
National budgets throughout the eurozone were also
considerably worse off during the financial crisis. Despite
all this, the eurozone’s economy managed to grow by
1.6 per cent in 2010. This was largely driven by Germany’s
strong economic performance.
The economic upswing in Germany has largely been
fuelled by the global economic recovery since the middle
of 2009. This led to significant growth in German exports
and a subsequent improvement in domestic demand.
The German economy grew considerably in 2010; the
German Institute for Economic Research puts the figure
at around 3.4 per cent, while the ifo Institute and German
Council of Economic Experts calculated an increase
of 3.7 per cent. This growth was practically the inverse
of the downturn in production in 2009. The German
labour market remained surprisingly resilient through
the crisis. The current phase of recovery has led to the
creation of new jobs. Germany’s national debt increased
significant way. This means that Germany was less affected
by the consequences of the crisis than many other
nations. Of all the economies in the eurozone, Germany’s
has grown the most since the end of the crisis.
Poland’s gross domestic product is expected to grow by
3.4 per cent year on year after the surprisingly strong
increase in industrial production in the first half of 2010.
After the collapse in foreign trade in the crisis year of
2009, exports rebounded to fuel the economic recovery
in 2010. Private consumption declined slightly compared
to pre-crisis years. Direct investment from abroad may
not be stimulating the country’s economic growth to
any noticeable extent, but in Poland it hasn’t been as
affected by the crisis as it has elsewhere. The main source
of economic growth came from the public sector.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
Turkey’s gross domestic product grew by 11 per cent in
the first half of 2010 compared to the same period in
the previous year. This made Turkey the fastest-growing
economy in the OECD, and one of the most dynamic
in the world. Moderate growth rates in the second half
of the year mean that Turkey’s economy is expected to
grow by between 6 and 8 per cent over the course of
the year. Turkey’s economic expansion was once again
driven by a considerable upturn in capital expenditure
and domestic consumption. Turkey’s imports are currently
increasing at a much faster rate than its exports.
The relatively high value of the Turkish lira is fuelling
this trend. However, the sustained high unemployment
is cause for concern.
According to information provided by the Lower Saxony
Chamber of Industry and Commerce (IHK), Lower Saxony’s
economy grew quickly and robustly in 2010. The
IHK business climate index returned to the level of the
boom year 2006 in the third quarter. Based on an improved
state of business in pretty much every sector,
stable forecasts for the coming months and an extremely
positive retail atmosphere, all indications point towards
further growth. Planned investments rose and businesses
in Lower Saxony are planning to create new jobs.
The economic recovery of the state of Bremen was somewhat
calmer in the first half of 2010 than in previous
months, but still remained positive. Industrial sales
primary energy consumption in Germany *
(in million TCE)
200
150
100
50
0
156.8
161.1
98.5
* Source: Arbeitsgemeinschaft Energiebilanzen e.V.
104.0
improved, while incoming orders, which collapsed completely
in some areas as a consequence of the global lull
in demand, made a strong recovery. Even though the
number of employees in the manufacturing industry
continued to fall, the number of job vacancies increased
overall. The autumn survey of the Bremen Chamber of
Commerce revealed a pleasing economic picture: Bremen’s
companies believe the current state of business is still good.
The State Statistical Institute of Berlin-Brandenburg
re corded a 2.8 per cent increase in Brandenburg’s gross
domestic product in the first half of 2010 when adjusted
for price changes. Thanks largely to a strongly resurgent
manufacturing sector, Brandenburg’s economic growth
puts it at mid-table when compared with Germany’s
other states. Brandenburg’s economy lost some of its
momentum over the rest of the year. Despite the optimism
in the manufacturing sector, the state’s economic
growth is expected to slow further.
Energy market
The economy and cold weather drove Germany’s energy
consumption upwards in 2010. According to preliminary
calculations by the Working Group for Energy Balances
(AGEB), consumption rose year on year by around 4 per
cent to 478.2 million tonnes of coal equivalent (MTCE).
However, consumption has not returned to pre-recession
levels.
57.8
50.3 51.5 51.7 50.1 51.7
Mineral oil
Natural gas
Hard coal
Lignite
2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010
41.3
44.8
Nuclear energy
Renewable
energies
Other
4.6
4.8
55

56 EWE ANNUAL REPORT 2010
80
60
40
20
0
development of base load electricity
trading prices (EEX) in 2010
(in Euro / MWh)
80
60
40
20
0
Jan. Mar. May July Sep. Nov.
Consumption of oil rose by a good 1 per cent to approx.
161.1 MTCE. Had it not been for the significant increase
in biofuel consumption (the contribution of bio fuel is
counted under renewable energies), the growth in oil
would have been around 4 per cent.
Consumption of natural gas increased by 3.7 per cent
to 104.0 MTCE. The cold temperatures of the first and
last months of the year led to improved sales volumes
on the market for heating. The growth in the economy
also led to increased demand from the industrial sector.
Hard coal consumption shot up by more than 15 per
cent to 57.8 MTCE. Almost 70 per cent of the hard coal
consumed domestically in 2010 was used for electricity
generation purposes.
The primary energy consumption attributable to lignite
rose slightly year on year to 51.7 MTCE. Consumption
of lignite products increased due to the weather and
the economic recovery. Domestic nuclear power plants
accounted for 51.7 MTCE of primary energy consumption,
up by 3 per cent on the previous year.
Renewable energies contributed 44.8 MTCE towards
the energy balance in 2010. This is 6.8 per cent higher
than the previous year. Hydroelectric production improved
by 2 per cent, while wind power production fell
by 3 per cent. The contribution from photovoltaics rose
sharply from 24 to 43 petajoules, an improvement of
more than 80 per cent. Biogas and biofuels grew by 14
120 120
90 90
60 60
30
0
development of crude oil price (brent) in 2010
(in USD / bbl)
30
0
Jan. Mar. May July Sep. Nov.
and 4 per cent respectively. Overall, renewable energies
accounted for 9.4 per cent of primary energy consumption,
up from 9.1 per cent in the previous year.
The increase in energy consumption will lead to higher
levels of energy-related CO 2 emissions, because around
two thirds of the increase in consumption was made up
for by fuels containing carbon, and there was only a small
shift in favour of low CO 2 fuels in 2010’s energy mix
according to expert calculations.
competition on the energy market
Competition on the energy market continued to increase
in 2010. According to the German Association of Energy
and Water Industries (BDEW), 22 per cent of German
households have switched their electricity provider since
liberalisation began. Since October 2006, gas customers
of all types have also been able to change their supplier.
To date 12 per cent of the households that have direct
contracts have switched to a different gas supplier.
price developments on the energy market
The price developments on the energy market in 2010
were largely due to the economic recovery and the upswing
in the industrial sector’s demand for energy. While
Europe, and Germany in particular, enjoyed robust economic
growth, US economic indicators painted a mixed
picture last year. The Asian markets on the other hand
still seem to be on course for growth, with China and
India leading the pack.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
130,0 130
97,5
65,0
32,5 32.5
0,0
Hard coal price development in 2010
97.5
65
0
USD / t
Euro / t
Jan. Mar. May July Sep. Nov.
Energy prices were also affected by the uncertainty surrounding
the euro caused by Greece’s financial crisis
early in the year. Because crude oil is traded in US dollars,
the rapid devaluation of the euro and the corresponding
increase in the value of the dollar led to a temporary
20 per cent drop in the price of crude oil in May.
This fall in prices had another, less significant impact
on other energy markets. On the electricity markets,
the price for base load supplies the following year decreased
by 7 per cent in the same period, while the price
of CO 2 emissions rights went down by 12 per cent.
Prices for hard coal and natural gas stopped trending
upwards in May and remained constant thereafter.
Prices for crude oil, natural gas and hard coal ended
2010 far higher than at the start of the year, while electricity
fell in price slightly and emissions rights were
only slightly more expensive.
The comparatively low spot prices of the first quarter
also caused options market prices for electricity for delivery
the following year to fall at the start of the year.
After prices reached 45 euros per megawatt hour at the
end of March, the lowest price since February 2009, increases
in the price of hard coal and natural gas fuelled
a distinct trend in the opposite direction. Prices fell
temporarily in May before reaching new highs in June,
although they didn’t stay at this level for long. Other
energy sources were unable to support these prices
20 20
15 15
10 10
5
0
development of prices for
Co 2 certificates in 2010
(in Euro / AAU)
5
0
Jan. Mar. May July Sep. Nov.
on the one hand, while spot prices continued to trend
low on the other. Prices also did not rise following the
German government’s decision to extend the lifespan
of its nuclear power plants. It took until the unusually
cold November for spot prices to go up again. The cold
weather also had an impact on front-year prices.
Following a turbulent time in the first half of the year
and a volatile lateral movement in the summer months,
the price of crude oil started rising again at the end of
September. Although the world’s crude oil reserves
have been going down continuously for some time, the
USA still has a relatively high amount of crude oil remaining.
Oil consumption is expected to go up in 2011,
largely due to increased demand in Asia. Crude oil became
attractive for financial investors again towards
the end of the year. The increasing amount of money
in circulation in the west means that there could be a
new oil market bubble.
The low-water mark for hard coal for delivery in 2011
in northwest Europe came at the end of March 2010
at USD 86 per tonne (USD / t). The subsequent upwards
trend continued until the end of the year. Prices have
been above USD 110 per tonne since December. Robust
demand came from the Asian market, where prices are
somewhat higher than in the European market. Floods
in Australian mining areas at the end of the year led to
coal supply bottlenecks, boosting prices further.
57

58 EWE ANNUAL REPORT 2010
Emissions rights prices also jumped in April in line with
the price developments on the electricity and crude oil
markets. Prices fluctuated strongly between Euro 13.85
and Euro 16.25 per certificate (Euro / AAU) until the end
of the year. Projections generally indicate that the second
trading period (2008 to 2012) will see a significant
surplus in allowances due to the economic crisis. Because
unused certificates can be transferred to the subsequent
third phase, prices are not expected to collapse as they
did at the end of the first phase (2005 to 2007).
Telecommunications market
The German telecommunications market was shaped by
dynamic competition in the 2010 financial year. Total
sales from telecommunications services came to some
Euro 61.0 billion, down slightly from the previous year.
Land line services accounted for Euro 36.7 billion, while
the mobile phone market contributed Euro 24.3 billion.
Mobile tele communications sales improved slightly for
the first time since 2005, but were unable to make up
for the downturn in landline sales.
13 years after the complete liberalisation of the market,
Deutsche Telekom AG (DTAG) recorded almost as much
in sales as all of its competitors, including cable network
providers, managed together. DTAG dominated the
landline segment with around 80 per cent of all-in-one
landline connections.
The number of fixed-line broadband connections rose to
around 27 million. Over half of all broadband customers
use DTAG’s network. The growth of the DSL sector slowed
in 2010, with net growth of 1.8 million new customers.
The maximum line speed is approx. 6 Mbit / s for 52 per
cent of DSL connections. Extremely high speed connections
with line speeds of at least 50 Mbit / s account for
about 1 per cent of all DSL lines.
At the end of 2010, 650,000 households had a connection
between their basement and a fibre optic network
(FTTB = fibre to the building).
Legal environment
The second half of 2010 was dominated in particular
by the German government’s energy strategy.
Energy strategy largely in line with
corporate strategy
The German government adopted its long-awaited
energy strategy on 28 September 2010. The strategy is
intended to pave the way for the energy policy of the
coming years and includes a range of measures in the
areas of energy efficiency and renewable energies as
well as the decision to extend the lifespan of Ger many’s
nuclear power plants by an average of twelve years.
Overall, the concept is very much in line with EWE’s
strategy of expanding the use of renewable energies,
increasing energy efficiency and supporting energy
conservation. Emphasis must be given to the planned
expansions in the area of energy contracting, which will
help existing energy conservation potential to be better
realised. However, the absence of any binding statements
about the role of distribution system operators is a cause
for concern. The strategy also says nothing about the
role of natural gas as a crucial source of energy in the
energy mix. It also failed to consider combined heat
and power as a sustainable way of increasing energy
efficiency. It is also unclear whether money from the
planned energy and climate fund will be distributed to
utility companies.
Energy Services Act comes into effect
The Energy End-use Efficiency and Energy Services Act
(EDL-G) came into effect on 12 November 2010. It transposes
the Directive of the European Parliament and of
the Council of 5 April 2006 into German law. The overarching
goal of the law is to improve energy end-use
efficiency. The directive’s goal is to save 9 per cent of
end-use energy in each EU member state within nine
years of coming into effect. These energy savings are to
be achieved by using energy services and other energy
efficiency measures. The EDL-G obliges utility companies
to report the effectiveness of energy efficiency
measures. EWE is already active in this area and will
register for inclusion in the supplier catalogue of the
Federal Office for Energy Efficiency.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
renewable Energy Act amended;
levy increases as a result
The Renewable Energy Act (EEG) was the subject of intense
discussion in 2010 regarding reducing subsidies
for solar power generators. The lower and upper houses
of the German Federal Parliament agreed on a solution
at the beginning of July. The compensation paid for solar
energy was cut by between 8 and 13 per cent with retroactive
effect from 1 July 2010 and subsequently reduced
by a further 3 percentage points for certain generation
facilities on 1 October 2010.
The “Act to Prevent Short Term Liquid Biomass Market
Bottlenecks” also determined that the sustainability
criteria for liquid biomass in the electricity and biofuel
sector will only apply from 1 July 2011. The criteria stipulated
in the Biomass Electricity Sustainability Ordinance
(BioSt-NachV) were originally scheduled to apply from
1 July 2010.
The transmission network operators announced the
Renewable Energy Act levy for 2011 in October. The new
tariff rose considerably from 2.047 to 3.53 cents per
kilowatt hour (kWh). This represents an increase in excess
of 70 per cent. The levy from the Renewable Energy
Act is based on the cost of the Act’s feed-in remuneration.
new gas network Access ordinance in effect
On 9 September 2010, the Ordinance to Revise and
Amend Regulations Relating to Energy Economy and
Mining Legislation came into effect. An essential part
of the ordinance is the amendment of the Gas Network
Access Ordinance (GasNZV), but it also involves amendments
to other energy ordinances, such as the German
Incentive System Ordinance (ARegV). As a regional network
operator, storage facility operator, biogas facility
operator and gas trader, EWE is affected by the amendments
to the GasNZV.
The new GasNZV calls for the number of market areas
to be reduced gradually to two, implements changes
to balancing group settlement procedures, requires the
creation of an integrated primary capacity platform
for natural gas, and establishes a transparent and nondiscriminatory
procedure to increase capacities. It also
contains regulations pertaining to overbooking and
buying back capacity, a limit on how long capacity contracts
can run and stipulates a standard load profile to be
applied for gas customers. The GasNZV also introduces
regulations relating to reserving and expanding capacity
for storage facilities, liquid gas plants, production plants
and gas power plants, which will improve security when
investing in the construction of new facilities and the
expansion of existing ones. The legislature also intends
to amend biogas regulations, such as the proportion of
costs payable by network operators for connecting bio gas
plants to the network, which will increase from 50 to
75 per cent.
positive signals for electric mobility and smart grid
On 3 May 2010, the German government joined representatives
from industry, the scientific community and
society at large at the electric mobility summit and
launched the “National Electric Mobility Platform”. The
platform will work together to develop strategies to
make Germany the leading market for electric mobility.
The platform’s development goal is to have one million
electric cars in Germany by the year 2020. Four billion
euros’ worth of research and development projects are
scheduled for completion by 2013 for the purpose of
achieving this goal. The platform will also develop a
German action plan for the standardisation of electric
mobility requirements, such as charging infrastructure,
automobile technology and electrical engineering, and
will look at integrating electric cars into smart grids.
A European task force has been set up to advise the
European Commission on smart grid issues.
it summit brings the energy and ict sectors together
The German government’s fifth IT summit met in Dresden
on 7 December 2010. EWE was the only energy supplier
to take part in the summit this year. The participants
agreed to expand the “Smart Grids Future Initiative”.
Building on the foundation of the German government’s
energy strategy and the flagship E-Energy project, this
initiative will promote the use of ICT-based energy supply
systems and enhance dialogue between companies
in both sectors. Business and politics agreed on measures
to harmonise standards across the EU quickly so
that smart energy networks could be made a reality.
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60 EWE ANNUAL REPORT 2010
Water industry issues
The amendment of the German Sewage Sludge Ordinance
is the most significant new legislation. The discussion
surrounding this ordinance concentrated on
the regulation relating to disinfection and quality assurance,
as well as the ban on the use of polymer-treated
effluent sludge due to come into effect in 2014. The
central issue is identifying the conditions under which
agricultural conversion of effluent sludge can remain a
cost-effective venture in the future. Future energy tax
legislation will have a considerable impact on the economic
efficiency of wastewater purification plants, particularly
if sewage gas loses its tax-free status. The EU
Commission announced that it will be launching a legislative
initiative related to the issue of service concessions
in 2011. This initiative is intended to improve European
companies’ access to the market and should guarantee
that all market participants are treated equally and
transparently.
regulation to prevent market manipulation
and regulation of derivative markets
The European Commission has put forward a draft of
a regulation which aims to prevent insider trading and
manipulation of the European electricity market and
increase the transparency of the market. The regulation
requires companies to keep extensive records of the size,
capacity, and purpose of energy transactions, as well as
the parties involved. This information will be submitted
to national regulatory authorities as well as the European
Agency for the Cooperation of Energy Regulators
(ACER). The regulation is scheduled to come into effect
in September 2011.
When companies trade energy, they use so-called OTC
derivatives to hedge against business risks such as price
fluctuations. A new directive will reform OTC derivative
contract regulation as part of moves to regulate financial
markets. The European Commission’s draft regulation
acknowledges the importance of the transaction hedges
for the energy sector. It also sets thresholds below which
there is no reporting requirement. However, there are
several conditions which have yet to be clarified, so it is
unclear to what extent the regulation will make energy
trading more expensive. The draft of the regulation has
been submitted to the European Council and Parliament
under the codecision procedure. The regulation is scheduled
to come into power in 2012.
digital Agenda presented
The European Commission has presented its action plan
for a new “Digital Agenda for Europe” as an important
part of the EU’s “Europe 2020” growth strategy. The
Digital Agenda is a working schedule that outlines policies
and actions related to the following areas:
• Fast internet connections
• Developing a digital single market
• E-skills and barrier-free online services for all
Europeans
• Improving information and communication
technology (ICT) interoperability and standards
• Increasing cutting-edge research and innovation
in ICT
The European Commission will provide more detailed
proposals in 2011.
Security of supply of natural gas:
new Eu directive in effect
The EU directive concerning measures to ensure the security
of the supply of natural gas came into effect on
2 December 2010. The directive amends European legislation
to reflect fundamental developments in the internal
gas market, particularly the increased dependency
on imports coupled with the simultaneous increased
risk of supply and transport disruption. The directive will
impact EWE most at the sales and network stages of
its value chain. The directive’s central elements include
an infrastructure and supply standard, a risk assessment,
a prevention and emergency plan, and the definition of
an EU-wide or regional emergency together with the
authority afforded the European Commission in such
a situation.
The first steps towards implementing the European rules
are expected in 2011.
incentive system
Since 1 January 2009 network fees for operators of gas
and electricity networks in Germany have been determined
by what is known as an incentive system, the
basic principles of which are governed by the German
Incentive System Ordinance (ARegV). The German Federal
Network Agency responsible for the network companies
of the EWE Group (EWE NETZ GmbH, swb Netze
GmbH & Co. KG and swb Netze Bremerhaven GmbH &
Co. KG) laid down the revenue paths for the companies
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
for the first regulatory period in 2008 (electricity up to
2014, gas until 2013) under the terms of the German
Incentive System Ordinance (ARegV). The calculation
was based partly on the cost audits in the relevant base
year 2006 and partly on the efficiency comparisons carried
out by the German Federal Network Agency. EWE NETZ
and swb Netze are 100 per cent efficient in the electricity
and gas segment; swb Netze Bremerhaven achieved
an efficiency level of 88.8 per cent for its electricity
networks and 83.5 per cent for its gas networks.
Adjustment of revenue ceilings
According to the legal requirements of the German Incentive
System Ordinance (ARegV), network operators are
required to adjust revenues on 1 January of each regulatory
period in certain situations. The network companies
of the EWE Group adjusted the electricity and gas
revenue ceilings in accordance with these statutory requirements.
The German Federal Network Agency also
approved the network companies’ investment budget
for expansion investment in the gas transmission network
(only EWE NETZ) and multiplying factors in EWE’s
distribution system.
complaint proceedings
It has become clear that the German Federal Network
Agency and Germany’s network operators have differing
opinions on the interpretation of the Incentive System
Ordinance (ARegV). These differences of opinion
have led several operators to lodge complaint proceedings
against the agency. EWE NETZ has filed complaints
contesting the multiplying factor for electricity and
requesting that the amount of network investment be
reviewed because of the enormous growth in decentralised
power generation facilities.
EWE NETZ lodged a further complaint about the Federal
Network Agency’s use of a so-called “amount to
prevent double counting” to cut the investment budget.
The Higher Regional Court of Düsseldorf ruled that
this action is illegal. It remains to be seen if the German
Federal Network Agency will appeal against the
court’s decision.
The network companies of the EWE Group have lodged
complaints against upper revenue limits. EWE NETZ
withdrew its complaints regarding the upper limit for
gas revenue as there was no prospect of success. The
company’s complaint proceedings against the revenue
ceiling for electricity are currently suspended. The network
companies from the swb subgroup are continuing
their appeals against the upper revenue limits for electricity
and gas.
legal and regulatory changes
Amendments to the German Incentive System Ordinance
(ARegV) came into effect on 9 September 2010.
One positive change for the network companies in the
EWE Group is the fact that volatile costs will be included
in the revenue ceilings in future. Operating cost lump
sums can still be approved by the German Federal Network
Agency. On the other hand, certain changes will
have a negative systemic impact on revenue ceilings.
Examples include plan values no longer being incorporated
into the calculation of the revenue ceiling and
costs for services provided by third parties.
Other energy regulations beside the German Incentive
System Ordinance (ARegV) were also amended, in particular
the Gas Network Access Ordinance (GasNZV).
swb surplus revenue absorption
After the German Federal Constitutional Court upheld
the decision of the German Federal Supreme Court, the
network companies from the swb subgroup took part in
the simpli fied generalised procedure for the absorption
of surplus revenue, meaning that they applied the economic
principles from the first approval decision to the
periods between the initial application for cost reimbursement
and approval. The ensuing reduction in network
fees only applied in the 2010 financial year and had
practically no effect on profit or loss because of expenses
in previous years. This process reduced the comparatively
cheap network fees even further. In a national comparison
of network fees, the Bremen-based network company
was named the cheapest municipal electricity network
operator in 2010.
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62 EWE ANNUAL REPORT 2010
Significant events
changes in the group structure
EWE has realigned its organisational structure with effect
as of 1 July 2010. Its aim is to optimise management of
the Group, which has grown rapidly in recent years. As
part of the realignment, the energy business, which was
previously part of EWE AG, was spun off into an independent
company. EWE ENERGIE AG is responsible for
the sale of energy and services in the Ems / Weser / Elbe
region, Brandenburg, northern West Pomerania and on
the island of Rügen. The new company will also be in
charge of EWE’s activities in the areas of renewable
energies and gas storage. EWE AG, which previously
managed the Group’s functional divisions and operational
activities in the area of energy, will now manage
the Group as a holding company.
german federal Supreme court ruling on
standardised special contracts for natural gas
On 14 July 2010, the German Federal Supreme Court
reached a decision on a class action and two individual
lawsuits brought by EWE customers concerning certain
clauses contained in the terms and conditions of specialrate
natural gas contracts. The price adjustment clause
that EWE has used in its standardised special contracts
for natural gas since 1 April 2007 was declared invalid.
However, the court did not stipulate what should be
done about the price increases which have occurred
since then and whether customers are entitled to reimbursement.
Mediation proceedings headed up by the
former mayor of Bremen, Dr. Henning Scherf, came to
a customer-friendly solution to prevent uncertainty
among EWE’s customers. EWE is issuing one-off special
payments to its customers totalling Euro 100 million.
changes to the board of management of EWE Ag
In June 2010, EWE AG’s Supervisory Board appointed
Dr. Willem Schoeber to the Board of Management.
Dr. Schoeber took up office on 1 August 2010. He remains
the CEO of swb AG.
Heiko Harms resigned from the company on 30 November
2010 in order to pursue new endeavours. Mr. Harms
had been a member of EWE AG’s Board of Management
since 2000. Duties within the Group Board of Management
were reallocated following his departure.
Dr. Willem Schoeber is in charge of foreign business. He
will assume Mr. Harms’ duties regarding business with
Turkey and has also taken over the responsibility for EWE’s
associated companies in Poland from Dr. Thomas Neuber.
Since December 2010, Dr. Neuber has concentrated on
his board activities at EWE ENERGIE AG and swb AG,
where he is responsible for developing the company’s
operating energy business and advancing the partnership
between EWE and swb. As a result of this he resigned
from his position on the Group Board of Management.
The Supervisory Board of EWE AG has appointed Michael
Wagener as Deputy Chairman of the Board of Management.
He will continue to serve on the Board and observe
his duties relating to finance and human resources. He
has also assumed Heiko Harms’ role as Chairman of the
Supervisory Board at BTC AG.
more electricity generated from renewable sources
EWE is further ramping up the amount of electricity it
generates using renewable energies. The first open-sea,
deep-water wind farm off the coast of Germany – alpha
ventus – went operational in the first half of 2010. It is
hoped that this pioneering project will provide fundamental
insight into the construction and operation of an
offshore wind farm. The farm consists of twelve wind
turbines, each with an output of five megawatts (MW).
Together with its partners, E.ON and Vattenfall Europe,
EWE has invested approx. Euro 250 million in alpha
ventus. In September 2010, the competent trade supervisory
authority approved the construction of a second
offshore project, which EWE is realising in conjunction
with its partner ENOVA. Construction of the RIFFGAT
wind farm is set to begin in 2011 and is scheduled for
completion by the end of 2012. The wind farm will have
a total installed capacity in excess of 100 MW. EWE
launched a second wind farm development project in
Poland in the first half of 2010. The Stara Dabrowa wind
project is to operate up to 24 wind turbines. All in all,
the EWE Group’s installed wind power capacity now
totals approx. 130 MW.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
Employees
The number of employees shown below includes all
current personnel, both full and part-time, trainees and
assistants. In 2010 the EWE Group had an average of
8,464 employees. This corresponds to an increase of
31 per cent compared with 2009. The sharp rise in the
Group’s number of employees is mostly due to the fullyear
consolidation of swb. Several business units also
recruited new employees.
The Corporate Centre business area is responsible for
management functions within the holding company
and employed an average of 246 employees in the 2010
financial year.
The average number of employees in the EWE Energy
business area was 2,432. Network operations accounted
for the majority of the employees (1,572), followed by
EWE ENERGIE with 777 employees and EWE WASSER
with 83 employees.
The swb business area employed an average of 2,378 staff.
The average number of employees in the New Markets
and ICT business area came to 3,409. Most of them were
employed in telecommunications (1,633) and IT (1,412).
The number of staff employed abroad (364) makes up
4.3 per cent of the EWE Group’s workforce.
Vocational training
Because the majority of EWE is municipally owned, the
company is committed to providing the young people
of the region with professional qualifications. Every
business area offers a range of vocational training and
degree programmes. In addition to the courses themselves,
young people can also choose from a wide variety
of training, mentoring and leisure activities which go far
beyond the scope of their chosen field – from communication
training sessions through to economics classes
as well as sporting and cultural activities. The exceptionally
high number of award-winning employees to come
through the schemes and the fact that graduates can
look forward to their future careers with confidence are
proof that EWE’s training programmes are a great success.
professional training
In a dynamic sector shaped by intensifying competition,
wide-reaching technical upheaval and a complex political
environment, the ongoing professional training of
employees becomes vitally important. EWE employees
have a wide range of internal and external training opportunities
at their disposal. Together with EWE’s comprehensive
social and health benefits and its commitment
to ensuring a good work-life balance, these measures
also help to attract experienced employees.
Executive development
With over 8,000 employees in three sectors and five
regions in Germany and abroad, the EWE Group has
enormous resources of expertise and commitment at its
disposal. EWE’s goal is to help its employees to develop
their strengths. Project groups, workshops on special
Group-related issues and a suggestion scheme encourage
EWE’s employees to take an active role in the company.
EWE meets with its employees on a regular basis
to give feedback and discuss their futures. The Company
runs executive development programmes to prepare
employees who demonstrate particular leadership potential
for management roles. The Group runs training
and coaching sessions for executives to allow them to
reflect on and improve their management skills. The
company is currently building its own executive development
academy.
Employees by business area
3,409
246
2010
2,432
2,378
New Markets
and ICT
EWE Energy
swb
Corporate
Centre
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64 EWE ANNUAL REPORT 2010
Earnings, assets and
financial position
The financial statements for EWE AG as of 31 December
2010 have been prepared in accordance with International
Financial Reporting Standards (IFRS) as applicable in
the EU. There were no significant changes in the Group
of consolidated companies compared with the corresponding
period in the previous year.
The financial year 2010 was the first full year in which
swb AG was consolidated in full in the EWE consolidated
financial statements (previous year: only three months).
A comparison with the financial year 2009 is therefore
only partially possible.
Earnings position
In the 2010 financial year, the EWE Group generated
sales (without electricity and energy tax) of Euro 7.0
billion (previous year: Euro 5.8 billion). Of total Group
sales, 72 per cent came from the EWE Energy business
area, 16 per cent from the swb business area and 12 per
cent from the New Markets and ICT business area. The
Corporate Centre / Consolidation business area is responsible
for the head office functions of EWE AG and
the direct share holdings of EWE AG, which have no appreciable
sales.
Summary consolidated income statement
The increase in sales in the financial year 2010 is largely
due to swb AG being included as a fully consolidated
company for an entire financial year for the first time.
In 2009, swb was included in the consolidated financial
statements as an associated company for nine months.
The materials usage ratio, measured as the cost of materials
and services in relation to revenue from sales,
increased from 76.5 per cent to 78.5 per cent due to a
voluntary special payment (the “Scherf solution”). The
rise in personnel expenses is largely due to swb being
included as a fully consolidated company for its first
full year.
EBITDA fell by 9.0 per cent to Euro 751.4 million, representing
a decrease of Euro 74.5 million. This is primarily
due to the significant fall in the result of investments accounted
for under the equity method compared with the
previous year (reclassification of the investment in VNG
from this category to that of non-current assets held
for sale).
These effects and the rise in depreciation, amortisation
and impairment, which was largely due to goodwill adjustments
in the New Markets and ICT business area,
resulted in EBIT falling from Euro414.0 million to Euro
164.9 million year on year.
EUr million 2010 2009 Change absolute Change in %
Sales (without electricity and energy tax) 6,969.6 5,798.4 1,171.2 20.2
Cost of materials and services -5,468.8 -4,435.7 -1,033.1 23.3
Personnel expenses -577.6 -406.7 -170.9 42.0
Other income and expenses -252.9 -275.5 22.6 -8.2
result of equity investments 80.1 145.4 -65.3 -44.9
result from financial instruments 1.0 1.0
EbiTdA 751.4 825.9 -74.5 -9.0
Depreciation, amortisation and impairment -586.5 -411.9 -174.6 42.4
EbiT 164.9 414.0 -249.1 -60.2
Net interest income / expense -184.4 -120.0 -64.4 53.7
profit before tax -19.5 294.0 -313.5 -106.6
Income taxes -31.2 -94.6 63.4 -67.0
net loss / profit for the period -50.7 199.4 -250.1 -125.4
Of this:
attributable to the parent company -48.4 198.5 -246.9 -124.4
attributable to minority interests -2.3 0.9 -3.2 -355.6
-50.7 199.4 -250.1 -125.4
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
100
80
60
40
20
0
Net interest income / expense is principally made up of
interest paid on three bearer bonds (EWE bonds), interest
on current bank debt and expenses for compounding non-
current provisions. The downswing in the net interest result
is due to a one-off effect in 2009 in connection with
the share purchase by the new strategic partner EnBW
Energie Baden-Württemberg AG.
The EWE Group recorded a net loss for the period of
Euro -50.7 million (previous year: net profit for the period
of Euro 199.4 million) for the financial year 2010
due to one-off effects in the New Markets and ICT
business area and the EWE Energy business area.
Sales by business area
(in per cent)
100
80
60
40
20
0
2010
12
16
72
Consolidated balance sheet
Assets
EUr million 31.12.2010 in % 31.12.2009 in %
Non-current assets 1 7,231.4 70 7,164.1 69
Current assets 1
(of which held for sale Euro 1,000 million) 3,163.4 30 3,289.8 31
Total assets 10,394.8 100 10,453.9 100
Equity and liabilities
EUr million 31.12.2010 in % 31.12.2009 in %
shareholders’ equity 3,286.4 32 3,409.8 32
Non-current liabilities 5,418.6 52 5,402.4 52
Current liabilities 1,689.8 16 1,641.7 16
Total equity and liabilities 10,394.8 100 10,453.9 100
1 Previous year’s figures adjusted
New Markets
and ICT
swb
EWE Energy
Assets and financial position
The EWE Group’s balance sheet total and solid balance
sheet structure have not changed significantly in comparison
to the previous year.
The nature of business engaged in by the EWE Group
means that it has a high investment intensity and a
correspondingly high level of capital commitment.
Non-current assets therefore account for 70 per cent
of total assets.
Capital expenditure came to Euro 631.6 million in the financial
year 2010, down slightly from the previous
year (Euro 698.8 million), and mostly went towards
expanding infrastructure and new technologies.
Non-current assets are financed by means of equity
and non-current borrowings.
Non-current borrowings include three EWE bonds with a
total volume of Euro 2.0 billion and terms of 10 years
(2014), 12 years (2021) and 15 years (2019).
The equity ratio remains high at 32 per cent, identical
to the previous year.
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66 EWE ANNUAL REPORT 2010
The consolidated cash flow statement shows that the
EWE Group’s cash flow from operating activities came
to Euro 398.7 million in the reporting year. The significant
decrease stems in particular from changes in receivables
and other assets, which rose year on year by
Euro 218 million.
Cash flow from investing activities was far lower than
in the previous year due to the expenditure for investment
in interests in fully consolidated companies in the
previous year. The majority of the expenditure in the
financial year was for property, plant and equipment.
One-off effects in the form of cash inflows in connection
with the share purchase by the strategic partner
EnBW Energie Baden-Württemberg AG and the issue
of an EWE bond had a positive effect on the cash flow
from financing activities.
The EWE Group’s financial flexibility is also secured via
credit lines and a syndicated revolving credit facility for
Euro 850.0 million. As of 31 December 2010, EWE AG
had drawn down Euro 0.0 million (previous year:
Euro 0.0 million) of this facility. Overall, EWE benefits
from its good credit rating, which is also confirmed by
the rating agency Moody’s. It currently stands at A2
with a stable outlook.
Summary Group cash flow statement
notes to the annual financial
statements of EWE AG in accordance
with German commercial law
General development of EWE AG
EWE AG restructured the EWE Group in the financial year
2010 with retroactive effect to 1 January 2010. Since
this time EWE AG has functioned as a holding company
responsible for the strategic cross-market development
and strategic planning of the business areas of the EWE
Group in its capacity as a multi-service company, and
also guarantees financing within the Group. The energy
business and related shareholdings were transferred to
EWE ENERGIE AG, Oldenburg, on this date. Its responsibilities
include the areas of production, procurement,
storage and sale of energy, trading in energy and in
greenhouse gas emission certificates, water catchment,
water supply, water and wastewater pro cessing, waste
disposal and recycling, the construction, procurement
and operation of facilities in both the aforementioned
business areas and in the field of transport, and the provision
of services in the aforementioned business areas.
EWE NETZ GmbH also spun off to EWE AG all non-network
specific properties (land, buildings and facilities)
and the rights to these estates, also with retroactive effect
to 1 January 2010. With effect from the same date,
EWE AG transferred to EWE NETZ GmbH the fully financed
pension provisions which had been recognised
on the EWE AG balance sheet until that date and had
not been reallocated to EWE NETZ GmbH during the
spin-off of EWE NETZ GmbH on 1 January 2006.
This makes the financial year 2010 only partially comparable
with the financial year 2009.
EUr million 2010 2009 Change
Cash flow from operating activities 398.7 647.2 -248.5
Cash flow from investing activities -569.1 -1,336.7 767.6
Cash flow from financing activities -111.2 1,071.7 -1,182.9
Currency translation and consolidation changes 5.6 -0.3 5.9
net change in cash and cash equivalents -276.0 381.9 -657.9
Cash and cash equivalents at the beginning of the period 604.9 223.0 381.9
Cash and cash equivalents at the end of the period 328.9 604.9 -276.0
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
Earnings position
The earnings position of EWE AG is shaped by the
investment income and net interest income.
The result of financial investments came to Euro 133.3 million,
due largely to profit transfers from EWE NETZ GmbH
and BTC AG and the assumption of the losses of EWE
ENERGIE AG and EWE TEL GmbH. This item also includes
the results of equity investments in swb AG and VNG
AG. The profit transfers and distributions were also offset
by impairment losses on financial investments from
shareholdings in Turkey in the reporting period.
Net interest expense came to Euro 115.5 million, down
on the previous year. While the previous year was shaped
by one-off effects in connection with the share purchase
by the strategic investor EnBW, the financial year 2010
was affected by interest on the bond issued in the previous
year that was taken into account for the entire
year. The capital market crisis also reduced EWE AG’s
interest income from bank deposits.
Other operating income came to Euro 315.6 million and
in cluded a one-off effect of Euro 206.5 million in connection
with the electricity and energy tax which had
no impact on earnings, for which EWE AG will remain
liable until EWE ENERGIE AG is registered in the Commercial
Register. EWE ENERGIE AG has reimbursed
EWE AG for these taxes. These were offset by income
from affiliated companies.
The new holding company structure and the spin-off of
EWE’s energy business to EWE ENERGIE AG will reduce
personnel expenses, depreciation, amortisation and
impairment.
Other operating expenses came to Euro 106.5 million
and were shaped by the expenses of affiliated companies
and increased advertising expenses for EWE AG
made necessary by increased competition.
Earnings from ordinary business operations amounted
to Euro 176.6 million. The high level of tax expense is
due to the one-off effect in connection with the electricity
and energy tax, which was recognised in other
taxes without effect on income.
Including the profit carried forward from the previous
year, distributable profit came to Euro 97.2 million.
Capital expenditure
Capital expenditure came to Euro 884.2 million in the
reporting year and was broken down as follows:
EUr million 2010 2009
Technical equipment power 6.2
Technical equipment gas 132.2
Other technical equipment 16.4
land and buildings 18.4 55.9
Operating and office
equipment 7.7 22.2
Intangible assets 4.4 10.4
Financial investments 853.7 957.3
Total 884.2 1,200.6
Financial investments were mostly made up of a capital
increase on the part of EWE ENERGIE AG, which amounted
to Euro 120.0 million and a long-term loan of Euro
705.3 million granted to EWE ENERGIE AG. Part of the
loan was paid off in the current financial year. The carrying
amount of the shareholding decreased by the
amount of the loan. Capital expenditure in intangible
assets was mostly related to research in the field of
electric mobility.
Financial position
Cash flow from operating activities came to Euro -105.5
million for the financial year. The net profit for the year,
which formed the basis for the calculation, was Euro 46.2
million. Depreciation, amortisation and impairment, particularly
on financial investments, led to cash inflows.
The reversal of provisions caused opposing effects. The
aforementioned cash flows led to an operative cash flow
of Euro 102.7 million, which was outweighed by cash outflows
from current assets. This was mostly due to the
acquisition of securities (mainly fixed-income securities)
and an increase in receivables from affiliated companies.
67

68 EWE ANNUAL REPORT 2010
Cash outflows from investing activities were dominated
by capital expenditure in property, plant and equipment
as well as long-term loans. EWE ENERGY AG’s partial
repayment of a long-term loan had a particularly positive
offsetting effect. EWE AG’s cash flow from financing
activities reflects the cash outflow resulting from
the previous year’s dividends. Cash and cash equivalents
increased to Euro 27.0 million.
Cash flow statement
1 January to 31 December, 2010 / Source of funds (+), use of funds (-)
EUr million 2010 2009
Cash flow from
operating activities -105.5 +290.5
Cash flow from
investing activities +218.4 -1,164.8
Cash flow from
financing activities -85.9 +1,180.6
Change in cash and
cash equivalents +27.0 +306.3
Assets position
EWE AG’s total assets were Euro 5,071.8 million and reflect
the Group’s balanced asset and capital structure.
The balance sheet structure shows EWE AG’s function as
the parent company in the EWE Group, which holds the
Group’s strategic shareholdings. At Euro 3,174.6 million
Assets
or 62.6 per cent, fixed assets were the dominant asset
category, with financial assets the largest item at Euro
2,891.9 million. The first-time accounting of the EWE EN-
ERGIE AG shareholding and a loan to this subsidiary had
a particular impact on this category in the financial year.
Current assets, including deferred income, came to
Euro 1,897.2 million, with “other assets” being the single
largest item. The VNG AG shareholding is still categorised
as held for sale and was recognised in this cate gory.
EWE AG also acquired fixed-income securities from issuers
with excellent credit ratings under an asset
management mandate in the reporting year which
were initially recognised as marketable securities.
Shareholders’ equity went up slightly, not taking distributable
profit into account. The cause of this was the net
profit / loss for the period and in particular the recognition
of restatement effects in retained earnings arising
from the first-time application of the regulations contained
within the German Commercial Code (HGB) as
amended by the German Accounting Reform Act (BilMoG).
These effects were not reflected in profit or loss. This
resulted in a stable equity ratio of 42.5 per cent. In addition
to equity, non-current assets were also offset by
non-current borrowings of Euro 2,573.4 million. This
means that non-current assets are covered in their entirety
by long-term capital. Three issued bonds totalling
Euro 2,000.0 million and non-current loans from banks
including a promissory note totalling Euro 503.6 million
2010 2009
EuR million % EUr million %
Fixed assets 3,174.6 62.6 3,663.9 59.5
Current assets 1,897.2 37.4 2,491.8 40.5
Capital
5,071.8 100.0 6,155.7 100.0
2010 2009
EuR million % EUr million %
shareholder’s equit Current liabilities 1 2,155.3 42.5 2,131.2 34.6
Non-current liabilities 2,573.4 50.7 3,188.0 51.8
Current liabilities 343.1 6.8 836.5 13.6
1 Equity not including distributable profit
5,071.8 100.0 6,155.7 100.0
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
make up the EWE Group’s non-current borrowings. Current
borrowings accounted for 6.8 per cent of the balance
sheet total.
Dependency report in accordance
with Section 312 of the German Stock
Corporation Act (AktG)
We have prepared a report on connections with affiliated
companies as required under Section 312 of the German
Stock Corporation Act (AktG). This report ends with
the following statement by the Board of Management:
“We hereby declare that EWE Aktiengesellschaft, Oldenburg,
received due consideration for all legal transactions
detailed in the report on transactions with affiliated
companies, and that this declaration is based on the
circumstances known to us when said transactions were
conducted. The Group did not take measures or neglect
to take measures within the meaning of Section 312 of
the German Stock Corporation Act.”
performance of business areas
The changes to the Group structure also led to a reshaping
of the EWE Group’s business area structure,
in order to make the company’s multi-service identity
and regional principle clear and easy to understand.
Overview of Group business areas 1
31.12.2010
EUr million EWE Energy swb
The most significant changes compared to the previous
business area structure are:
• EWE NETZ GmbH was allocated to the EWE Energy
business area as a subsidiary of EWE ENERGIE AG.
• The foreign subgroups Poland and Turkey were combined
with the ICT business area to form a new business
area, “New Markets and ICT”. The management
companies EWE Enerji and EWE POLSKA were allocated
to the parent company EWE AG (Corporate Centre).
• The Corporate Centre business area is now presented
together with Consolidation as “Corporate Centre /
Consolidation”.
Corporate Centre / Consolidation
business area
The Corporate Centre / Consolidation business area
comprises the Group head office and management
functions, EWE AG’s shareholdings and Group-level
consolidation. The Corporate Centre does not generate
any appreciable sales.
EBIT came to Euro 0.1 million. The positive earnings
contribution from the dividend payment of VNG was
offset by expense items in Corporate Centre.
Capital expenditure was mostly accounted for by a loan
for a wind farm as well as land and buildings, totalling
Euro 54.1 million.
New Markets
and ICT
Corporate Centre /
Consolidation Group
Business area sales 5,126.9 1,144.8 979.0 -281.1 6,969.6
EBITDa 424.7 213.1 96.4 17.3 751.5
EBIT 210.6 109.4 -155.2 0.1 164.9
Capital expenditures 370.4 129.9 77.2 54.1 631.6
average numbers of employees 2,432 2,378 3,409 246 8,465
1 Figures for the previous year are not available as a result of the new segment structure
69

70 EWE ANNUAL REPORT 2010
EWE Energy business area
Electricity sales in the EWE Energy business area increased
by 6.9 per cent to 13.5 billion kWh in 2010. The increase
stems mainly from the special-rate customers segment.
Both new customer acquisitions and economic developments
had a positive effect. Electricity sales also improved
slightly in the standard-rate and local utility
customer segments. The economic upswing in EWE’s
regions revived sales volumes.
Natural gas sales in the EWE Energy business area came
to 40.1 billion kWh in 2010, an increase of 8.2 per cent
compared with 2009. This was mainly due to increased
sales to standard-rate customers as a result of weather
conditions. The economic recovery and the cold weather
led to increased sales volumes from special-rate customers.
The decline in sales volumes from local utilities was
EWE Energy: Electricity sales by customer group
(in million kWh)
15,000 15000
12,000 12000
9,000
6,000
3,000
0
9000
6000
3000
EWE Energy: natural gas sales by customer group
(in million kWh)
45,00045000
36,00036000
27,00027000
18,00018000
9,000 9000
0 0
0
4,219
21,126
4,278
2009 2010 2009 2010 2009 2010 2009 2010
23,604
6,119
10,547
6,908
11,592
2,306
5,371
2,328
4,871
2009 2010 2009 2010 2009 2010 2009 2010
due to a municipal utility switching to a competitor. A
change in the Group’s corporate structure also led to a
shift towards standard and special-rate customers.
The EWE Energy business area generated Euro 5,126.9
million in sales. The electricity business had a positive
impact on the development of revenues. Electricity sales
volumes increased across all customer segments thanks
to the economic recovery. Pricing measures for standardrate
customers as of 1 January 2010 also increased sales.
The feed-in of renewable energies also led to increased
sales (without impact on earnings). These were offset by
charges from the company’s gas business. Despite the
economic recovery and the increase in sales volumes
resulting from the cold weather, the three price reductions
had a negative effect on the revenue which EWE
used to pass on reduced procurement costs to its customers
in 2009. Also, the voluntary special payment
12,644
37,045
Total
Total
13,514
40,067
Standard-rate
customers
Special-rate
customers
Local utilities
Total
Standard-rate
customers
Special-rate
customers
Local utilities
Total
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
related to the contested price adjustment clauses (the
“Scherf solution”) reduced sales, as did the delay in the
implementation of gas price increases made necessary
by higher procurement costs.
The EWE Energy business area’s EBIT is shaped by EWE
ENERGIE AG’s electricity and gas business. EBIT came to
Euro 210.6 million in 2010 and was reduced considerably
by the special payment resulting from the German
Federal Supreme Court ruling and the related delayed
gas price increase.
Euro 370.4 million was invested in the EWE Energy business
area in the reporting year. A significant amount of
the capital expenditure went towards photovoltaics systems
and gas storage operations, as well as the maintenance
and expansion of electricity, gas and telecommunications
networks.
swb: Electricity sales by customer group *
(in million kWh)
5,000 5000
4,000 4000
3,000 3000
2,000 2000
1,000 1000
0 0
swb: natural gas sales by customer group *
(in million kWh)
9,0009000
7,200 7200
5,4005400
3,6003600
1,8001800
0 0
276
* pro rata for 4th quarter 2009
1.155
* pro rata for 4th quarter 2009
983 881
3,554
3,704
2,980
784 612
2,197
swb business area
2009 2010 2009 2010 2009 2010 2009 2010
2009 2010 2009 2010 2009 2010 2009 2010
45
188
The 4.9 billion kWh generated and sold by the swb business
area in 2010 was included in the EWE Group’s electricity
sales for the full year for the first time. Natural
gas sales totalled 8.7 billion kWh in the reporting year.
Sales for the swb business area came to Euro 1,144.8
million. Revenue was shaped by increased electricity
sales and reduced gas revenue. swb’s medium calorific
power plant finished its first full year of operation,
which had a positive impact on waste management
sales.
EBIT came to Euro 109.4 million in 2010.
Capital expenditure amounted to Euro 129.9 million in
the reporting year, and was shaped primarily by capital
expenditure in electricity supply equipment such as
power plants.
1,202
2,551
Total
Total
4,875
8,731
Standard-rate
customers
Special-rate
customers
Local utilities
Total
Standard-rate
customers
Special-rate
customers
Local utilities
Total
71

72 EWE ANNUAL REPORT 2010
New Markets and ICT business area
All of the foreign shareholdings allocated to this business
area recorded increased sales volumes and customer
numbers in 2010. The companies in Poland supplied a
total of 834 million kWh of natural gas to 9,630 customers
in the reporting year. This represents growth of
7.7 per cent in terms of customers and 10.0 per cent in
terms of natural gas supplied respectively year on year.
The Turkish shareholdings improved their natural gas
sales by 42.2 per cent to 12.1 billion kWh. The major increase
was primarily due to the gas trading company
being included over the full year for the first time. However,
the natural gas supply companies recorded decreased
gas sales volumes due to milder weather in the
region and the fact that the local gas supply industry
only demonstrated a discernable recovery later in the
year from the economic and financial crisis. Customer
numbers also went up substantially to over 600,000,
a rise of 9.7 per cent.
poland: natural gas sales
(in million kWh)
1,000 1000
800 800
600 600
400 400
200
0 0
774.2
833.8
2009 2010
Turkey: natural gas sales
(in million kWh)
14,000 14000
11,200 11200
8,4008400
5,6005600
2,8002800
0 0
8,486.3
12,066.4
2009 2010
The EWE Group’s telecommunications and IT companies
put in a sound performance over the course of the financial
year in a tough competitive environment. Including
the telecommunications company htp, which is presented
as an associated company, the telecommunications
companies served around 720,000 customers as
of 31 December 2010. This corresponds to an increase
of 2.8 per cent compared with the previous year. The
BTC group recorded a higher number of orders than in
the previous year.
Sales totalled Euro 979.0 million in the New Markets and
ICT business area in the financial year 2010. The Telecommunications
and ICT business areas accounted for
63.9 per cent of these sales, with foreign sales making
up the remaining 36.1 per cent.
The negative EBIT of Euro -155.2 million is primarily due
to impairment of the goodwill of the Turkish companies
Bur sagaz and Kayserigaz. The Telecommunications
poland: Customers
10,000 10000
8,000 8000
6,000 6000
4,000 4000
2,000 2000
00
8,758
Turkey: Customers
9,630
2009 2010
650,000 650000 607,604
554,101
520,000 520000
390,000 390000
260,000 260000
130,000 130000
0 0
2009 2010
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
Telecommunication customers
720,000720000
620,376
639,263
630,000630000
540,000540000
450,000450000
360,000360000
270,000270000
180,000180000
90,000 90000
0 0
business unit also recorded a negative result. This was
due to falling average revenues, which have yet to be
compensated for, and increased network use charges.
The result of the Poland business unit was affected by
an impairment loss. This was compensated for by the
positive result of the ICT business unit following the
economic recovery on the market.
Capital expenditure in this business area came to
Euro 77.2 million, most of which went towards telecommunications.
Investments were also made in the expansion
of overseas gas networks.
Supplementary report
No events of particular significance have occurred since
the end of the financial year.
Risk report
79,770
80,564
Structure and core elements of
the opportunity and risk management
system
Total
700,146
719,827
2009 2010 2009 2010 2009 2010
The early identification and active, pre-emptive management
of potential opportunities and risks are of crucial
importance for the lasting successful development of
the EWE Group. The standardised planning and controlling
process at Group level, featuring an integrated
early recognition system for opportunities and risks, is
the integral base of the Group-wide opportunity and
risk management system. Its principal organisational
elements are the Opportunities and Risks Committee
and the central Risk Controlling team, whose main task is
the further development and coordination of the processoriented
early recognition system for risks on the basis
of guidelines applicable throughout the Group as well
as the risk reporting to the Board of Management. The
Group’s energy trading activities are subject to special
risk guidelines, which are used to set up a trading framework
reflecting the Group’s specific corporate goals,
particularly relating to supervision and the separation
of functions.
Early recognition process for risks
EWE TEL
htp
Total
The risks are identified early at the level of the individual
companies with responsibility for the risks in a regular and
structured process while observing the relevant Group
standards as defined in Group guidelines, evaluated in
terms of potential damage and likelihood of occurrence,
and reported to EWE’s central Risk Controlling team
along with a list of appropriate measures to limit the
risks. Regular reporting for the Energy Trading division
is based on risk measurement instruments specially
developed for this area.
The risks identified at the level of the individual companies
are included in summarised reporting at business
area and Group level in accordance with their significance
as measured by the key budget target figures. The data
gathered in the regular, systematic risk early recognition
process and urgent risk reports issued at short notice
when certain thresholds are reached form the basis for
an evaluation of the EWE Group’s current and future risk
situation. Regular reports based on this information and
geared towards materiality are submitted to the Board
of Management and the supervisory bodies.
73

74 EWE ANNUAL REPORT 2010
Main categories of risk
The main categories of risk which according to current
information can affect the course of business and assets,
earnings and financial position of EWE Group are
as follows:
Ambient risks
Ever more changes to the international macroeconomic
market environment as well as adjustments to the legal
and social environment increase the potential risks to
the EWE Group’s sustainable business development in
terms of the main objectives of its business areas. Of
particular importance to EWE now and in the future are
the effects of regulatory decisions on the energy market
in Germany, Poland and Turkey as well as the terms of
competition in the telecommunications market. Legal
risks also continue to exist in connection with the enforceability
of necessary gas price adjustments. EWE sees its
active involvement in the industry associations relevant
to its business areas as an opportunity to play a constructive
role in the political decision-making process
and shape ambient conditions.
Market risks
In its Energy, swb and New Markets and ICT business
areas EWE remains exposed to volume and margin risks
as well as rising credit risk for business partners due to
the increasing pressure of competition on both national
and international procurement and sales markets as a
result of the financial and economic crisis. Our IT activities
in the New Markets and ICT business area remain
exposed to the risk that they will be affected by a reluctance
to invest which may prevail in their core markets
due to the tense market environment.
In order to meet the various challenges posed by the
market and the competition EWE developed early on flexible
and customer-oriented product and price strategies
and offers product portfolios which reflect the demands
of the market. Successful cooperation between business
areas in developing combined energy and telecommunications
products has proven to provide an important
competitive edge.
Operating risks
The basis for EWE’s sustainable commercial success lies
in continuing to operate innovative and highly complex
production and network infrastructure efficiently and to
make corresponding targeted investments, both in the
energy and telecommunications areas.
To reduce potential risks and make consistent use of
available opportunities, the highly qualified employees
working there take part in a continuous training process
to secure and improve their high level of qualifications
in terms of present and future standards and especially
with regard to safety measures and statutory requirements.
Furthermore, special quality assurance plans and
coordinated redundancy concepts have been implemented
so as to guarantee process stability and are developed
continually in line with requirements.
Financial risks
EWE’s operating activities in the various business areas
in Germany and abroad give rise to financial risks in the
form of liquidity, credit, interest and exchange rate risks
as well as market price risks on the international energy
procurement and sales markets which are vital to EWE.
In light of the financial and economic crisis, EWE has
stepped up its continuous monitoring, position evaluation,
credit scoring of business partners and active risk
management and is implementing suitable instruments
related to relevant target figures to manage risk on the
basis of risk guidelines for specific business areas. The
financial risk management instruments used are explained
in detail in the section covering disclosures on
financial instruments in the Notes to the consolidated
financial statements.
Risks from joint Group functions
The latest information and communications technology
is used to provide efficient support for all business processes
in the individual segments. As the quality and, in
particular, the permanent availability of the systems are
a critical factor in the success of the business and the
further development of the business, extensive hardware
and software measures are implemented and constantly
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
refined using the latest models to improve the quality
of software development and ensure high availability.
Starting from this high quality level, systems are constantly
refined, including intensive staff training, data
security and data protection.
Summary assessment of the risk
situation
The established and process-oriented early recognition
system for risk did not reveal any individual risks or a
total risk position in 2010 which could jeopardise the
continued existence of the EWE Group. The Group Internal
Audit department supervises and regularly audits
the risk early recognition system to ensure that it functions
correctly and effectively and complies with legal
requirements. For the current financial year 2011, no
risks to the continued existence of the Group as a going
concern have been identified to date.
Report on the internal control and
risk management system
Information pursuant to Section 315
para. 2 no. 5 and Section 289 para. 5 of
the German Commercial Code (HGB)
The goal of EWE’s financial reporting is to provide interested
parties with annual and interim financial statements
that contain complete and accurate information.
The internal control system (ICS) for accounting identifies
possible sources of error and limits the risks related
to these sources of error. This internal control system is
applied to all accounting and financial reporting across
the entire EWE Group.
The internal control system is designed on the basis
of the organisational structure of the accounting and
financial reporting process.
One of the core functions of this process is the management
of the Group as a whole and its operating units. The
targets set by the EWE AG Board of Management form
the basis of this function. EWE draws up its medium-term
plans once a year based on these targets and business
development forecasts. These plans include target figures
for the upcoming financial year and subsequent years.
The Group produces forecasts for the financial year in
progress, which are reviewed and amended on a regular
basis. The EWE AG Board of Management meets with
the Board members and Managing Directors of its main
subsidiaries on a regular basis to evaluate quarterly and
annual financial reports and to update forecasts.
Individual companies are responsible for their own accounting,
which is subject to local standards, and the
accounting ICS is tailored to the individual requirements
of each company on the basis of Group-wide guidelines.
Because EWE AG functions as the holding company for
the Group as a whole, it also plays a central role when
it comes to accounting. This role includes consolidating
figures and testing goodwill for impairment. Certain
processes, such as the calculation of pension provisions,
are outsourced together to an external service provider
and are also subject to Group-wide quality standards.
The members of the EWE AG Board of Management
issue a declaration under oath to a third party and sign
the confirmation by the legal representatives for reports
issued outside the Group. By doing so, they confirm that
the applicable accounting standards and guidelines of
the EWE Group codified in the Group Accounting Handbook
have been complied with and that the figures give
a true and fair view of the assets, financial and earnings
position of the Group.
Possible financial reporting risks are identified on a company
division level using quantitative, qualitative and
process-related criteria. The ICS is based on generally
binding guidelines. The internal control system also
defines minimum requirements for central accounting
processes to guarantee that data is collected and managed
properly. Risks resulting from subjective judgements
or complex situations which could affect balance sheet
items are assessed using a risk and control matrix.
75

76 EWE ANNUAL REPORT 2010
The EWE Group uses a standard procedure introduced
in 2010 to determine whether the necessary control
measures have taken place and have been implemented
correctly. The Group Internal Audit department also
reviews the internal control system throughout the year
as part of its auditing program.
The Audit Committee of the Supervisory Board regularly
checks whether the accounting ICS is effective. The Board
of Management informs the Audit Committee of possible
financial reporting risks once a year, explains the control
measures that have been implemented and presents
the methods that have been used to ensure that the
control mechanisms have been implemented correctly.
Outlook
Forecast macroeconomic developments
Increased fears of a “global currency war” overshadowed
the generally positive development of the global economy
in 2010. Even though the German Council of Economic
Experts sees the probability of such a dispute as relatively
low, such a development would put the global economy
in a risky situation. A global currency war would not bring
the global economic recovery to its knees, but might
sap it of some of its momentum.
The situation on the financial and property markets remains
tense, which is expected to slow economic growth
in the industrialised nations. Many industrial nations also
face the challenge of paying off their greatly increased
public and private debt. The resulting decline in demand,
an under-utilisation of capacities and increased unemployment
could increase the risk of deflation in these
countries. The economies of the industrialised nations
are expected to be sluggish once again due to the fallout
from the financial crisis, with average forecast growth
rates of 2.2 per cent.
Economic forecasts have become slightly less optimistic
for emerging economies, which proved to be economic
anchors during the crisis. Buoyed by their stable internal
markets, the gross domestic product of these nations is
expected to continue growing apace. Emerging economies
are forecast to grow by 6.4 per cent on average in 2011,
only slightly slower than in 2010.
Economic growth rates are expected to vary across the
eurozone. While the economic recovery in the northern
European member states is not expected to lose any of
its momentum, sluggish performance is forecast for the
economies of the eurozone’s peripheral nations. The gap
between the economic growth rates of the nations that
make up the eurozone is expected to narrow further in
2011. Experts anticipate the growth rate for the eurozone
as a whole to decline to 1.4 per cent.
The slowdown in the global economic recovery and the
expiration of government stimulus programmes will prevent
Germany’s economy from growing at the same rate
in 2011 as it did in 2010. With GDP growth forecasts
ranging between 2.0 (German Institute for Economic
Research) and 2.4 per cent (ifo Institute), Germany’s
economic revival is expected to lose some of its momentum.
Experts also expect production to pick up further
over the course of this year. Private consumption and
investment are expected to drive this trend, as is the
falling unemployment rate.
Poland’s gross domestic product is expected to grow by
between 3.4 and 4.6 per cent. Turkey’s economic growth
will slow somewhat and decline from 6.8 per cent to
around 4.5 per cent.
Group management report
COURSE OF BUSINESS AND ECONOMIC ENVIRONMENT EARNINGS, ASSETS AND FINANCIAL POSITION SUPPLEMENTARY REPORT RISK REPORT OUTLOOK
Earnings forecast
Even under such difficult market conditions, EWE sees
good opportunities for the Group to develop and reach
its strategic goals. It is not currently possible to evaluate
the impact of the ongoing gas price disputes. The first
full-year consolidation of swb AG defined the year 2010
to a large extent. We expect to see a moderate increase
in Group sales in 2011 and 2012. The EWE Group expects
the close collaboration with swb AG to generate synergy
effects which will lead to cost reductions in the medium
term. Positive EBIT growth is already anticipated at Group
level in 2011.
Expected developments in the
EWE Energy business area
Sales and earnings developments in the EWE Energy
business area are subject to the swings of the economy
and are largely determined by weather conditions and
movements in the oil price. The current gas price disputes
could also have an effect on earnings developments.
These are factors over which EWE has no direct control.
In spite of this reservation, the economic recovery gives
grounds for expecting moderate, but overall positive
growth in sales and a steady improvement in EBIT in
2011 and 2012, despite the forecast ongoing rise in energy
procurement costs and systemic regulation effects.
Expected developments in the
swb business area
Implementing measures to adhere to new legal and regulatory
requirements will be the focus of swb’s operations
in 2011 and 2012. Even though swb has no direct
control over these new legislative requirements, or over
economic fluctuations or weather conditions, they all
have a direct impact on earnings developments. Due to
the negative development of the market, swb expects
income to fall temporarily in the financial year 2011. We
anticipate a higher level of income in 2012 than in 2011.
Expected developments in the
New Markets and ICT business area
The Turkey business unit intends to expand its networks
and gas supply facilities further in the coming years.
Both gas sales and customer numbers are expected to
grow in 2011 and 2012, with a corresponding positive
impact on results.
The Poland business unit plans to continue investing in
high-pressure pipelines. Construction of a biogas plant
is also scheduled to start in the second half of 2011. A
moderate increase in sales and positive developments
in earnings are expected in 2011 and 2012.
The ICT business unit expects customer numbers to rise
in 2011 and 2012, leading to a moderate improvement
in sales. Customer numbers are expected to increase as
a result of expansion into areas with poor internet access
for the purpose of providing them with broadband internet
products, a project which commenced in 2010
and will be continuing in 2011. Further increases in the
customer base are anticipated to be derived from the
redevelopment of the telecommunications infrastructure
for the state authorities in Lower Saxony. Net profit
is expected to remain steady in the coming financial year
compared to 2010. Results are expected to improve in
the 2012 financial year.
These statements are based on current knowledge and
assumptions. They are estimates made on the basis of all
information available to the EWE Group when preparing
this report. If the assumptions do not materialise or additional
risks should come to light, actual results may
differ from the forecast results.
77

Consolidated financial statements
78 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 79
Consolidated financial statements
78 consolidated financial statements
79 income statement for the EWE group
79 Statement of comprehensive income
for the EWE group
80 balance sheet for the EWE group
82 Statement of changes in shareholders’ equity
of the EWE group
84 cash flow statement for the EWE group
85 notes to the consolidated financial statements
for the EWE group
85 basic information on the company
85 Accounting methods
90 Summary of significant accounting methods
110 forward-looking assumptions and estimates
111 notes to the income statement
116 notes to the balance sheet
163 confirmation by the legal representatives
164 Auditors’ report
Income statement for the EWE Group
for the period from 1 January to 31 December 2010
EUr million Note 2010 2009
Sales 1 7,409.8 6,151.5
Electricity and energy taxes 1 -440.2 -353.1
Sales (without electricity and energy tax) 6,969.6 5,798.4
Changes in inventories -2.3 0.6
Other own work capitalised 2 110.9 65.1
Other operating income 3 274.8 112.0
Cost of materials and services 4 -5,468.8 -4,435.7
Personnel expenses 5 -577.6 -406.7
Depreciation, amortisation and impairment 6 -586.5 -411.9
Other operating expenses 7 -636.3 -453.2
result of investments accounted for under the equity method 8 26.7 153.5
Other investment income 9 53.4 -8.1
result from financial instruments 1.0
EbiT 1 164.9 414.0
Interest income 10 22.0 67.1
Interest expense 10 -206.4 -187.1
profit before tax -19.5 294.0
Income taxes 11 -31.2 -94.6
Result for the period -50.7 199.4
Of this:
attributable to the parent company -48.4 198.5
attributable to minority interests -2.3 0.9
-50.7 199.4
1 Earnings Before Interest and Taxes
Statement of comprehensive income for the EWE Group
for the period from 1 January to 31 December 2010
EUr million Note 2010 2009
Result for the period -50.7 199.4
adjustment item for translation differences from foreign subsidiaries 21 33.3 -4.7
actuarial gains and losses
from defined-benefit pension commitments and similar obligations 23 -79.5 -27.2
Deferred taxes on pensions 24.1 7.7
Cash flow hedges 32 56.3 17.3
Deferred taxes on reserve for cash flow hedges -17.9 -5.5
Market value of available-for-sale financial instruments -0.6
Deferred taxes on reserve for available-for-sale financial instruments
share of other income from financial investments
0.2
accounted for under the equity method 21 0.1 -1.6
other comprehensive income after taxes 16.0 -14.0
Comprehensive income after taxes
Of this:
-34.7 185.4
attributable to the parent company -34.4 185.6
attributable to minority interests -0.3 -0.2
-34.7 185.4

Consolidated financial statements
80 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 81
Balance sheet for the EWE Group
as of 31 December 2010
Assets
EUr million Note 31.12.2010 31.12.2009
non-current assets
Intangible assets 12 1,436.3 1,573.7
Property, plant and equipment 13 5,014.1 4,821.0
Financial investments accounted for under the equity method 14 502.7 497.4
Other non-current assets 1 15 257.8 250.0
Income tax receivables 1 28 8.8 9.5
Deferred taxes 28 11.7 12.5
Current assets
7,231.4 7,164.1
Inventories 16 251.7 266.6
Trade receivables 17 944.6 732.2
Other receivables and assets 1 18 578.4 637.5
Income tax receivables 28 61.0 49.0
Cash and cash equivalents 19 327.7 604.5
2,163.4 2,289.8
Non-current assets held for sale 20 1,000.0 1,000.0
3,163.4 3,289.8
Total assets 10,394.8 10,453.9
1 Previous year’s figures adjusted
Equity and liabilities
EUr million Note 31.12.2010 31.12.2009
Shareholders’ equity 21
subscribed capital 243.0 243.0
Capital reserve 1,534.5 1,532.1
retained earnings 1,473.4 1,598.7
Equity attributable to shareholders of the parent company 3,250.9 3,373.8
attributable to minority interests 35.5 36.0
3,286.4 3,409.8
non-current liabilities
Construction subsidies 22 750.0 749.3
Provisions 23 1,400.3 1,314.6
Bonds 24 1,990.1 1,988.9
liabilities to banks 25 708.9 731.0
Other non-current liabilities 27 114.8 143.2
Income tax liabilities1 28 1.1 0.8
Deferred taxes 28 453.4 474.6
5,418.6 5,402.4
Current liabilities
Construction subsidies and emissions rights 22 78.3 93.1
Provisions 23 169.7 94.5
liabilities to banks 25 33.5 36.6
Trade payables 26 903.1 690.6
Income tax liabilities 28 24.2 11.5
Other current liabilities 27 481.0 715.4
1,689.8 1,641.7
Total equity and liabilities 10,394.8 10,453.9
1 Previous year’s figures adjusted

Consolidated financial statements
82 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 83
Statement of changes in shareholders’ equity
of the EWE Group
EUr million
Subscribed
capital of the
EWE Group
Capital
reserve of the
EWE Group RETAinEd EARninGS
accumulated
income Comprehensive other income
revaluation
reserve in
accordance
with IFrs 3
reserve for
cash flow hedges
reserve for
available-for-sale
financial
instruments
Cumulative
translation
differences
Measurement of
pension provisions IFrs 5
Change from
equity valuation
without effect
on profit and loss
As of 31.12.2008 200.0 278.5 1,330.2 74.5 -26.2 60.8 39.6 1,957.4 44.8 2,002.2
result for the period 198.5 198.5 0.9 199.4
Other comprehensive income 11.9 -3.6 -19.5 10.3 -11.9 -12.8 -1.1 -13.9
Total result 185.7 -0.2 185.5
Capital increase 43.0 1,273.5 1,316.5 1,316.5
Dividend payments -65.0 -65.0 -3.8 -68.8
Change in the group of consolidated companies 26.7 -26.9 -0.2 -0.4 -0.6
Transactions under joint control -19.9 -19.9 -19.9
Other changes -0.7 -0.7 -4.4 -5.1
As of 31.12.2009 243.0 1,532.1 1,489.7 74.5 11.9 -29.8 41.3 10.3 0.8 3,373.8 36.0 3,409.8
result for the period -48.4 -48.4 -2.4 -50.8
Other comprehensive income 38.4 -0.4 31.3 -55.4 0.1 14.0 2.0 16.0
Total result -34.4 -0.4 -34.8
Capital increase 2.4 2.4 2.4
Dividend payments -88.0 -88.0 -0.1 -88.1
Change in the group of consolidated companies -2.9 -2.9 -2.9
As of 31.12.2010 243.0 1,534.5 1,350.4 74.5 50.3 -0.4 1.5 -14.1 10.3 0.9 3,250.9 35.5 3,286.4
Equity
attributable to
shareholders
of the parent
company
Attributable
to minority
interests
Shareholders’
equity

Consolidated financial statements
84 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 85
Cash flow statement for the EWE Group
for the period from 1 January to 31 December 2010/Source of funds (+), use of funds (-)
EUr million 2010 2009
EbiT¹ 164.9 414.0
Depreciation, amortisation and impairment 594.0 432.7
reversals of depreciation and impairment -1.6 -0.2
reversal of construction subsidies -51.5 -41.5
Interest paid -134.6 -130.8
Interest received 20.8 59.2
Income tax payments / rebates -46.6 -68.2
Net gain / loss on disposal of non-current assets 5.8 7.0
Non-cash foreign currency gains / losses 0.1
Non-cash changes in provisions 137.1 26.2
Income / loss from companies accounted for under the equity method -1.3 -100.6
Net non-cash gain / loss from derivative financial instruments -34.0 -6.5
Other non-cash income and expenses 18.8 15.1
Changes in inventories 17.3 -42.4
Changes in receivables and other assets -265.0 47.0
Changes in liabilities -25.5 36.2
Cash flow from operating activities 398.7 647.2
Construction subsidies received 50.9 72.0
Proceeds from disposal of intangible assets -5.5
Expenditure for investments in intangible assets -20.7 -16.5
Proceeds from disposal of property, plant and equipment 5.4 11.5
Expenditure for investments in property, plant and equipment -574.2 -548.3
Proceeds from disposal of financial assets 4.6 27.1
Expenditure for investment in financial assets -35.1 -133.9
Expenditure for investment in interests in fully consolidated companies -743.1
Cash flow from investing activities -569.1 -1,336.7
Proceeds from issuing equity instruments 2.4 1,316.5
Dividend payments to shareholders of the parent company and minority shareholders -88.1 -68.8
Proceeds from assumption of financial liabilities 149.8 834.0
repayment of non-current financial liabilities -177.8 -1,011.7
Other net cash flow from / for financing activities 2.5 1.7
Cash flow from financing activities -111.2 1,071.7
Change in cash and cash equivalents -281.6 382.2
Change in cash and cash equivalents due to changes in exchange rates
and in the group of consolidated companies 5.6 -0.3
Cash and cash equivalents at the beginning of the period 604.9 223.0
Cash and cash equivalents at the end of the reporting period 328.9 604.9
1 Earnings Before Interest and Taxes
Notes to the consolidated financial statements
for the EWE Group
basic information on the company
EWE Aktiengesellschaft (known in the following as “the company” or “EWE AG”) and its subsidiaries
(in the following “the EWE Group”) supply energy (in particular electricity and gas), water and also
provide information technology and telecommunications services. It operates in the Ems / Weser / Elbe
region of Germany as well as in Lower Saxony and Bremen. The EWE Group’s gas operations also extend
to eastern Germany, Poland and Turkey. Electricity and gas are predominantly purchased from
third parties.
EWE’s registered offices are at Donnerschweer Strasse 20 – 22 in 26123 Oldenburg, Germany. The company
is registered in the Commercial Register of the Oldenburg District Court under the number HRB 33.
These consolidated financial statements were approved by the Board of Management for presentation
to the Supervisory Board on 9 February 2011.
Accounting methods
Basis of preparation
The consolidated financial statements have been prepared based on depreciated or amortised cost except
for the valuation of certain financial instruments and available-for-sale financial assets measured
at fair value.
The financial year used by EWE AG and its main subsidiaries is the calendar year. The consolidated financial
statements are prepared in euros. Unless otherwise stated, all amounts are in millions of euros (Euro million).
The income statement and statement of comprehensive income are presented separately, as are
the balance sheet, the cash flow statement and the statement of changes in shareholders’ equity. Segment
reporting is an integral part of the Notes.
Rounding may result in minor variations in totals and percentages in the consolidated financial statements.
The income statement has been prepared using the total cost method.
The consolidated financial statements and the Group management report for EWE AG for 2010 are
published in the electronic version of the German Federal Gazette.
Statement of compliance with IFRS
EWE AG publishes its consolidated financial statements pursuant to Section 315a para. 1 of the German
Commercial Code (HGB) as of 31 December 2010 in accordance with the binding International Financial
Reporting Standards (IFRS) and Interpretations issued by the International Accounting Standards Board
(IASB), London, as of 31 December 2010, as adopted by the European Union. Other requirements of the
German Commercial Code have also been taken into account.

Consolidated financial statements
86 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 87
Consolidation
The consolidated financial statements comprise the financial statements of EWE AG and its subsidiaries
as of 31 December 2010.
Subsidiaries are fully consolidated from the acquisition date, i. e. the date on which the Group acquired
control of the subsidiary. Consolidation ends as soon as the parent company no longer has a controlling
interest in the subsidiary. The financial statements of the subsidiaries are prepared for the same reporting
period as the financial statements of the parent company using uniform accounting methods.
All intra-Group balances, transactions, unrealised gains and losses from intra-Group transactions and
dividends from intra-Group transactions are eliminated in full.
Losses of a subsidiary are allocated to minority interests, even if this leads to a negative balance.
Any changes in a parent company’s stake in a subsidiary which do not lead to it losing control are
treated as equity transactions.
If the parent company loses control over a subsidiary,
• it derecognises the assets (including goodwill) and liabilities of the subsidiary,
• derecognises the carrying amount of all minority interests in the former subsidiary,
• derecognises the accumulated translation differences recognised in equity,
• recognises the fair value of the consideration received in return,
• recognises the fair value of the remaining shareholding,
• recognises the net profit or loss in the income statement,
• reallocates the components of other comprehensive income attributable to the parent company
to the income statement or retained earnings as prescribed.
Despite holding a majority interest of 51 per cent in Hansewasser Ver- und Entsorgungs-GmbH, Bremen
(HVE), the EWE Group is not able to exercise a controlling influence over the company. This is because
the rights of the minority shareholder, the Free and Hanseatic City of Bremen, are so extensive that they
prevent swb AG from controlling the company. However, because EWE exerts a significant influence
over the company, HVE is included in the consolidated financial statements as an associated company.
The EWE Group has no significant influence on the financial and business decisions of associated companies
in which it holds a direct or indirect stake of 20 per cent or more of the voting rights and which
are recognised as financial assets in accordance with IAS 39. This is borne out by the fact that no IFRS
information that is of relevance for these financial statements has been provided for these companies.
Shares in subsidiaries and associated companies which are of minor importance from an overall Group
perspective are accounted for in accordance with IAS 39. This particularly relates to subsidiaries without
own operations or with only a negligible amount of business.
The Group’s shareholdings are published in the electronic German Federal Gazette in accordance with
Section 313 para. 2 numbers 1 – 4 and para. 3 of the German Commercial Code (HGB). The subsidiaries
included in the consolidated financial statements, shareholdings accounted for under the equity method
and other shareholdings are listed in section 38 of the Notes.
The group of consolidated companies changed as follows in the 2010 financial year:
Type of consolidation and number Germany abroad Total
Full consolidation
1 January 2010 27 6 33
additions 8 0 8
Disposals 2 0 2
31 december 2010 33 6 39
Companies accounted for under the equity method
1 January 2010 8 0 8
additions 1 0 1
Disposals 0 0 0
31 december 2010 9 0 9
Total
1 January 2010 35 6 41
additions 9 0 9
Disposals 2 0 2
31 december 2010 42 6 48
Changes in accounting methods
The IASB has adopted amendments to existing IFRS standards and adopted new standards that are
binding for financial years beginning on or after 1 January 2010. The following standards and interpretations
have been applied for the first time in the reporting year and have affected EWE’s consolidated
financial statements:
Amendments to standards as part of the 2009 annual improvement process (revised April 2009):
The IASB has issued a further collection of amendments to standards as part of its annual improvement
process. They include a large number of minor amendments intended to illustrate the rules and remove
inconsistencies. Its first-time application had no significant impact on the EWE consolidated financial
statements.
Amendments to iAS 39 “financial instruments: recognition and measurement” –
eligible hedged items in a hedging relationship (September 2009):
The revised version of IAS 39 emphasises that inflation risks can only be hedged by hedging transactions
if payments are directly linked to an inflation index. It is also made clear that it is not generally possible
to hedge one-sided risks effectively by an entire option. Its first-time application had no significant impact
on the EWE consolidated financial statements.
Amendments to iAS 39 “reclassification of financial Assets: Effective date and transition”
(September 2009):
This amendment stipulates that reclassifications made on or after 1 November 2008 are effective from
the date of reclassification. Reclassifications made before 1 November 2008 can be reclassified with
effect from 1 July 2008 or later. The reclassification regulations cannot be applied to any date before
1 July 2008. Its first-time application had no impact on the EWE consolidated financial statements as
no assets have been reclassified.

Consolidated financial statements
88 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 89
Amendments to ifrS 2 “group cash-settled Share-based payment transactions” (June 2009):
This makes it clear that a company that receives goods or services as part of a share-based payment
transaction has to recognise these goods and services in their financial statements. This applies irrespectively
of which company in the Group settles the transaction and by which means settlement
takes place. The first-time application had no effect on the EWE consolidated financial statements as
the EWE Group has no share-based payment programmes.
The amendment to ifric 9 and iAS 39 “Embedded derivatives” (december 2009) makes it clear that
if financial assets are reclassified from the category “at fair value through profit or loss” to the category
“at amortised cost”, an assessment must be made as to whether an embedded derivative needs to be
separated from a host contract and accounted for separately. If separate recognition is necessary but
separate measurement of the embedded derivative is not possible, the financial asset may not be reclassified.
Its first-time application had no significant impact on the EWE consolidated financial statements.
ifric 12 “Service concession Arrangements” (march 2009) governs the accounting treatment of agreements
by which a government or other public-sector institution awards contracts (service concessions)
to private companies to provide public services. To provide the services, the private company uses infrastructure
which remains public property. The private company is usually responsible for building,
operating and maintaining the infrastructure. Its first-time application had no significant impact on the
EWE consolidated financial statements.
ifric 15 “Agreements for the construction of real Estate” (July 2009) provides guidance on how to
determine whether an agreement for the construction of real estate falls within the scope of IAS 11
“Construction Contracts” or IAS 18 “Revenue” and, accordingly, when revenue from the construction
should be recognised. The first-time application had no impact on the EWE consolidated financial
statements as the EWE Group has no agreements for the construction of real estate.
ifric 16 “hedges of a net investment in a foreign operation” (June 2009) clarifies grey areas in connection
with currency hedging for a foreign operation. The interpretation lays down in particular what
risks can be hedged, which Group companies can hold the hedging instrument and how it is to be accounted
for in the event that the foreign entity is disposed of. Its first-time application had no significant
impact on the EWE consolidated financial statements.
ifric 17 “distributions of non-cash Assets to owners” (november 2009) deals with issues related to
non-cash dividends for shareholders. Among other issues, it regulates when a dividend payable should
be recognised and measured. In addition, it results in further disclosures in the Notes. The first-time
application had no effect on the EWE consolidated financial statements as the EWE Group does not
currently distribute non-cash assets to owners.
ifric 18 “transfers of Assets from customers” deals among other things with cases in which a company
receives an item of property, plant and equipment from a customer (or the funds to produce or purchase
an item of property, plant and equipment) in order to connect the customer to a network or to provide
the customer with ongoing access to a supply of goods or services. Its first-time application had no
significant impact on the EWE consolidated financial statements.
The IASB and the International Financial Reporting Interpretations Committee (IFRIC) have amended or
adopted additional standards and interpretations which are not yet binding for the financial year 2010
and which the EWE Group has not applied voluntarily. These are as follows:
iAS 24 “related party disclosures” (amended):
The amended standard is effective for financial years beginning on or after 1 January 2011. The amendment
clarified the definition of a related party in order to make it simpler to determine when parties
are related and to prevent the standard from being applied inconsistently. The amended standard also
provides an exemption from disclosure requirements for companies with a relationship to public bodies.
The EWE Group does not expect the amendment to the standard to have any effect on its earnings,
assets or financial position. Both the standard and the exemptions for businesses with relationships to
public bodies may be applied earlier than 1 January 2011.
iAS 32 “financial instruments: presentation – classification of rights issues” (amended):
The amended IAS 32 is effective for financial years beginning on or after 1 February 2010. The amendment
changed the definition of a financial liability. Subscription rights (and certain options or warrants)
are to be classified as equity if they entitle the holder to a fixed number of the company’s equity instruments
for a fixed amount in any currency, and the company offers them pro rata to all current owners
of the same class of a non-derivative equity instrument. The first-time application is not expected to
have any effect on the consolidated financial statements of the EWE Group.
ifrS 9 “financial instruments: classification and measurement”:
The IASB published IFRS 9 as the first step of its project to replace IAS 39. IFRS 9 covers the classification
and measurement of financial assets as defined in IAS 39. The standard is effective for financial years
beginning on or after 1 January 2013. In future phases, IASB will cover the classification and measurement
of financial liabilities, hedging relationships and derecognition. The project is expected to be finished at
the start of 2011. Applying the first phase of IFRS 9 will affect the classification and measurement of
the EWE Group’s financial assets. The EWE Group will quantify the impact of applying the standard as
soon as the other steps in the project are published, in order to get as full a picture as possible.
ifric 14 “prepayments of a minimum funding requirement” (amended):
The amended IFRIC 14 is effective retroactively for financial years beginning on or after 1 January 2011.
The amendment includes guidelines for determining the recoverable amount of a net pension asset.
The amendment allows companies to recognise prepayments for minimum funding contributions as
assets. The amendment is not expected to have an effect on the consolidated financial statements of
the EWE Group.
ifric 19 “Extinguishing financial liabilities with Equity instruments”:
IFRIC 19 is effective for financial years beginning on or after 1 July 2010. According to the interpretation,
equity instruments issued to a creditor to extinguish all or part of a financial liability are classified as
“consideration paid”. The equity instruments issued are measured at fair value. If fair value cannot be
determined reliably, the equity instruments issued are measured at the fair value of the liability extinguished.
Gains and losses are recognised directly in profit or loss. The application of the interpretation
will not have any effect on the consolidated financial statements of the EWE Group.

Consolidated financial statements
90 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 91
2010 improvements to ifrSs (not yet adopted by the Eu)
The IASB has issued its Annual Improvements to IFRSs, a collection of amendments to several International
Financial Reporting Standards. These amendments have not yet been adopted, because they are
only effective for financial years beginning on or after 1 July 2010 or 1 January 2011. It is reasonable to
expect that the amendments below may potentially have some impact on the Group:
• IFRS 3 Business Combinations
• IFRS 7 Financial Instruments: Disclosures
• IAS 1 Presentation of Financial Statements
• IAS 27 Consolidated and Separate Financial Statements
• IFRIC 13 Customer Loyalty Programmes
However, the EWE Group does not expect the adoption of these amendments to have any effect on
its earnings, assets or financial position.
Summary of significant accounting methods
The main accounting methods applied when preparing these consolidated financial statements of the
EWE Group are detailed below. Unless specified otherwise, these methods were applied consistently
to the reporting periods shown.
a) Business combinations and goodwill from 1 January 2009
Business combinations are accounted for using the purchase method. The cost of an acquisition is calculated
as the fair value of the consideration transferred at the acquisition date plus the minority interests
in the acquired company. The acquiring company in each acquisition measures the minority interests
in the acquired company either at fair value or as the corresponding proportion of the identifiable net
assets of the acquired company. Any costs incurred due to the merger are recognised as expense.
When the EWE Group acquires a company, it decides on the appropriate classification and designation
of the financial assets and liabilities that it assumes on the basis of the terms of the contract, economic
factors and the economic environment at the time of acquisition. This includes separating derivatives
embedded in host contracts.
In step acquisitions, the fair value of the shares in the acquired company held by the acquiring company
is recalculated as of the acquisition date, and the resulting gain or loss is recognised as profit or loss.
An agreed contingent consideration is measured at fair value at the acquisition date. Subsequent changes
in the fair value of contingent considerations representing an asset or liability are recognised in accordance
with IAS 39. Contingent considerations classified as equity are not re-evaluated, and are recognised
in equity when paid.
Goodwill is measured at acquisition cost when initially recognised. Acquisition cost is measured as the
amount by which the consideration transferred exceeds the acquired identifiable assets and liabilities
assumed by the Group. If this consideration is lower than the fair value of the net assets acquired, the
difference is recognised directly in the income statement.
After initial recognition, goodwill is recognised at acquisition cost less accumulated impairment losses.
To determine if goodwill acquired as part of a merger is impaired, it is allocated to the cash-generating
units of the Group intended to benefit from the acquisition. This principle applies even if other assets
or liabilities of the acquired company are allocated to these cash-generating units as well.
If goodwill is allocated to a cash-generating unit and a business area of this unit is sold, the goodwill
allocable to the sold business area is considered a component of the carrying amount of the business
area when calculating the income from the sale of this business area. The value of the sold proportion
of the goodwill is calculated on the basis of the value of the sold business area relative to the value of
the remainder of the cash-generating unit.
b) Shares in an associated company
Shares that the EWE Group holds in associated companies are recorded using the equity method. An
associated company is a company in which the EWE Group exerts a significant influence.
Under the equity method, shares in associated companies are recognised in the balance sheet at acquisition
cost plus any changes in the EWE Group’s proportion of the net assets of the associated company
since the acquisition. The goodwill related to the associated company is included in the carrying amount
of these assets, and is neither amortised nor assessed for impairment.
The income statement contains the EWE Group’s proportion of the associated company’s net profit for
the period. Changes recognised directly in the equity of the associated company are recognised by the
Group in proportion to its shareholding and included in the statement of changes in shareholders’ equity
if necessary. Unrealised gains and losses from transactions between the Group and the associated company
are eliminated in proportion to the Group’s shareholding in the associated company.
The Group’s proportion of the associated company’s profits is presented in the income statement. This
includes the profit attributable to the associated company’s shareholders as well as profit after taxes.
The associated company prepares its financial statements to the same balance sheet date as the parent
company. Group-wide accounting methods are adapted whenever necessary.
The Group applies the equity method to determine whether it is necessary to recognise an additional
impairment loss on the shares that it holds in associated companies. The Group examines whether there
is objective evidence of impairment of its holdings in an associated company as of any given balance
sheet date. If there is, the difference between the recoverable amount of its stake in the associated
company and the carrying amount of this stake is recognised in profit and loss as an impairment loss.
If the Group ceases to exert a significant influence over the company, it measures the fair value of all
shares that it holds in the previously associated company. Differences between the carrying amount
of the stake in the associated company at the time that influence was lost and the fair value of the
shares held in the company are recognised in the income statement, along with revenue from the sale
of shareholdings.

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92 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 93
currency translation
The EWE consolidated financial statements are prepared in euros, the functional currency of the parent
company. Every company in the EWE Group sets its own functional currency. The items in the financial
statements of each company are measured in this functional currency.
foreign currency transactions and balances
Foreign currency transactions are translated by Group companies into their functional currency according
to the spot rate on the date of the transaction.
Monetary assets and liabilities in a foreign currency are translated into the functional currency on each
balance sheet date according to the spot rate on the balance sheet date.
All translation differences are recognised in profit and loss with the exception of any monetary items
used as hedges of a net investment in a foreign operation. These are recognised in other comprehensive
income until the sale of the net investment, and are only recorded in the income statement once they
are disposed of. Any taxes resulting from the translation differences for these monetary items are also
recognised directly in other comprehensive income.
Non-monetary items held at their historical acquisition or production cost in a foreign currency are
translated at the exchange rate applicable on the date of the transaction. Non-monetary items recognised
at fair value in a foreign currency are translated at the exchange rate applicable when their fair
value was calculated.
group companies
The assets and liabilities of foreign operations are translated into euros on the balance sheet date.
Expense and income are translated using the exchange rate applicable on the date of the respective
transaction. The resulting translation differences are recognised in other comprehensive income.
The amount recognised in other comprehensive income for a foreign operation is reallocated to the
income statement when this foreign operation is disposed of.
Any goodwill arising after 1 January 2005 on the acquisition of a foreign operation and any adjustments
based on the fair value to the carrying amount of the assets and liabilities and resulting from
the acquisition of this foreign operation are treated as assets and liabilities of the foreign operation
and translated using the exchange rate on the balance sheet date.
The following exchange rates were used to translate individual financial statements in foreign currencies:
1 EUr spot rate average rate
31.12.2010 31.12.2009 2010 2009
Polish złoty (PlN) 3.96 4.13 3.99 4.34
Turkish lira (TrY) 2.06 2.16 2.00 2.17
c) Realisation of income
Income is recognised when it is likely that the Group will accrue the economic benefit and the amount
of the income can be reliably determined, regardless of the time of payment. Income is recognised at the
fair value of the consideration received or due while taking contractual payment terms into account,
but not taking taxes or other fees into account. The following criteria must also be fulfilled in order for
income to be recognised:
Sale of goods
When supplying customers with electricity and gas, the substantial risks and rewards are deemed to
have been transferred to the buyer when the flow rate has been metered. As meter readings cannot be
taken on the balance sheet date, some of the sales revenues are recognised on the basis of statistical
calculations.
The electricity and energy taxes paid by the companies in the Group are deducted from recognised
sales revenue.
provision of services
Telecommunications services and IT services provided by the EWE Group are invoiced promptly in regular
intervals. Sales revenue is recognised when the services are provided.
Revenue from production contracts (Euro 2.7 million in the reporting year, previous year: Euro 17.3 million)
is recognised under the percentage of completion method. The percentage of completion is determined
by the ratio of costs incurred to the total costs estimated for the contract at the balance sheet date. If
it proves impossible to make a reliable estimate of the revenue from a contract, only income equivalent
to the total reimbursable costs incurred is recognised.
Receivables from production contracts are composed of the net amounts of
• costs incurred plus recognised profits, less
• total recognised losses and interim invoiced amounts
for all production contracts for which the costs incurred plus recognised profits (less recognised losses)
exceed the amounts of interim invoices. If the interim invoiced amounts exceed the costs incurred plus
recognised profits (less recognised losses), the amount is recognised under “other current liabilities”.
If it is likely that total costs will exceed the total income from a production contract, the imminent losses
are recognised immediately as an expense by deducting them from the balance of the production contract.
Imminent losses only include losses still anticipated on the balance sheet date.
Customers’ construction subsidies are reversed pro rata temporis over the useful life of mains connections
and recognised in sales.
interest income
Interest income and expense is recognised for all financial instruments held at amortised cost and interestbearing
available-for-sale financial assets based on the effective interest rate; the rate used is that which
would be required to discount the estimated future proceeds and expenditure to the exact net carrying
amount of the financial asset or liability over the anticipated term of the financial instrument, or a
shorter period if applicable. Interest income is shown in the income statement under financial income.

Consolidated financial statements
94 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 95
usage fees
Income from usage fees is deferred according to the economic intention of the applicable agreements
and recognised pro rata temporis.
dividend income
Income is recognised when the legal entitlement to payment arises.
d) Taxes
Effective income taxes
The actual tax reimbursement claims and tax liabilities for the current period are recognised to the extent
of the anticipated reimbursement from or payment to the tax authorities. The amount is calculated
on the basis of the tax rates and tax legislation applicable on the balance sheet date in the countries
in which the EWE Group operates and generates taxable income. Effective taxes related to items that
are booked directly in equity are recognised in equity rather than the income statement. Management
evaluates individual tax situations on a regular basis to decide whether there is room for interpretation
in applicable tax law. Provisions for taxes are formed if necessary.
deferred taxes
Deferred tax is calculated by applying the liability method for all temporary differences between the accounting
values of assets or liabilities in the balance sheet and their tax values on the balance sheet date.
Deferred tax liabilities are recognised for all taxable temporary differences, with the exception of
• deferred tax liabilities from the initial recognition of goodwill, or of an asset or liability from a transaction
that is not a merger and which has no influence on either the net profit for the period in accordance
with commercial law or the taxable profit at the time of the transaction,
• deferred tax liabilities arising on taxable temporary differences in connection with shareholdings in
subsidiaries, associated companies and shares in joint ventures if the Group can control the time at
which the temporary differences will reverse and it is probable that the temporary differences will
not reverse for the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused
tax credits to the extent that taxable income is likely to be available to offset against the deductible
temporary differences and the unused tax losses and tax credits, with the exception of
• deferred tax assets from deductible temporary differences resulting from the initial recognition of
goodwill, or of an asset or liability from a transaction that is not a merger and which has no influence
on either the net profit for the period or the taxable profit at the time of the transaction,
• deferred tax assets arising on deductible temporary differences in connection with shareholdings in
subsidiaries, associated companies and shares in joint ventures if it is probable that the temporary
differences will not reverse for the foreseeable future or there will not be sufficient taxable profit
available to offset against the temporary differences.
The carrying amount of deferred tax assets is reviewed on each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit
of part or all of that deferred tax asset to be utilised. Unrecognised deferred tax assets are reviewed on
each balance sheet date and recognised to the extent that it has become probable that there will be
sufficient future taxable profit to utilise the deferred tax asset.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates / laws applicable as of the
reporting date.
Deferred taxes that relate to items recognised in equity are also recognised in equity. Deferred taxes
are recognised either in other comprehensive income or directly in equity, depending on the underlying
transaction.
Deferred tax assets and deferred tax liabilities are offset when the EWE Group has the legal right to
settle its effective tax entitlements against its effective tax liabilities and they are levied by the same
taxing authority on the same entity.
Deferred tax benefits arising from an acquisition which do not fulfil the criteria for recognition at the date
of acquisition are recognised in following periods, provided that information comes to light regarding
facts and circumstances at the time of acquisition that demonstrates that they did fulfil these criteria.
The change is reflected as either a reduction of goodwill, provided the reduction occurs during the reporting
period (and does not exceed the goodwill) or in income.
VAt
Income, expenses and assets are recognised after deducting VAT. The following are exceptions to this rule:
• VAT incurred on the purchase of assets or the use of services which cannot be recovered from the
taxing authority is recognised as part of the production costs of the asset or as part of the expense.
• Receivables and liabilities are recognised inclusive of VAT.
The amount of VAT due from or payable to the taxing office is reported in the balance sheet under
receivables or liabilities.
e) Government grants
A government grant is recognised only when there is reasonable assurance that the company will comply
with any conditions attached to the grant and the grant will be received. Grants are recognised as
income over the period necessary to offset them against the related cost for which they are intended
to compensate. Grants relating to assets are presented in the balance sheet as deferred income and
amortised at a steady rate over the estimated useful life of the subsidised asset in profit and loss.
When the EWE Group receives non-monetary grants, the asset and the grant are recognised at nominal
value and reversed at a steady rate over the estimated useful life of the subsidised asset in profit and
loss whenever possible.

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96 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 97
f) Non-current assets held for sale and discontinued operations
Non-current assets or disposal groups that are classified as held for sale are measured at the lower of
carrying amount and fair value less cost to sell. Non-current assets or disposal groups are classified as
held for sale if the carrying amount of the asset or disposal group is mainly realised through a sales transaction
rather than through continued use. This is only the case if the sale is highly probable and the asset
or disposal group is available for immediate sale. Management must have committed to a plan to sell
the asset or disposal group, and the sale should be expected to qualify for recognition as a completed
sale within one year from the date of classification.
Property, plant, equipment and intangible assets classified as held for sale are not amortised or depreciated.
g) Employee benefits
pensions and other post-employment defined-benefit plans
Provisions for pensions and similar obligations are made for direct pension commitments to (former) staff
with vested entitlements to company pension benefits. In the EWE Group the legal basis for these obligations
are collective bargaining agreements, works agreements and individual commitments. They are
accounted for using the projected unit credit method in accordance with IAS 19. This involves measuring
the amount of future obligations using actuarial methods as well as estimating the relevant parameters
(e. g. interest rate, mortality rates, pay and pension forecasts). This method allocates the expenses required
for the increased entitlements to the period in which they arise. The increase in entitlement is the
share of the total forecast benefit that is attributable to a given financial year, taking vesting conditions
into account.
EWE-Treuhandverein e.V. was established in 2009 as part of the introduction of defined-contribution,
funded direct commitments. To the extent that assets are transferred to EWE-Treuhandverein e.V. to
fund retirement benefits, these assets constitute plan assets eligible for netting out within the meaning
of IAS 19.7.
EWE Group recognises actuarial gains and losses immediately, i.e. in the financial year in which they
arise, directly and for the full amount in other comprehensive income. Interest on pension obligations
is disclosed within interest expense.
In addition to the direct commitments, certain groups of employees are obligatorily insured with the
state insurance agency Versicherungsanstalt des Bundes und der Länder (VBL). Annual levies and recapitalisation
payments have to be made annually to VBL to fund these commitments. These benefit
commitments are accounted for as a defined-contribution multi-employer plan within the meaning of
IAS 19.30 and are recognised in profit and loss. If the plan is underfunded, the participating employers
are obliged to compensate for the shortfall. The amount of additional funding required is determined by
VBL and levied on the members in line with their obligations in the form of the recapitalisation payment,
which is currently of indefinite duration.
Similar long-term obligations to employees include long-term obligations under phased early retirement
agreements. In the EWE Group these are generally concluded in the form of the block model. The resulting
obligations are determined on the basis of actuarial principles. If these obligations are funded
by plan assets, the obligations are netted out with the fair value of the relevant plan assets.
termination benefits
Termination benefits are payable as a result of either a Group company’s decision to terminate an employee’s
employment before the normal retirement date or an employee’s decision to accept voluntary
redundancy in exchange for those benefits. The EWE Group recognises termination benefits when it is
demonstrably committed to terminating the employment of personnel within the framework of a detailed,
formal plan without realistic possibility of withdrawal, or it is demonstrably committed to provide
termination benefits to employees taking voluntary redundancy. Termination benefits that fall due more
than twelve months after the balance sheet date are discounted to their present value.
h) Financial assets
classification
Financial assets are divided into the following categories:
• financial assets measured at fair value through profit and loss,
• loans and receivables,
• held-to-maturity financial investments and
• available-for-sale financial assets.
The classification depends on the purpose for which the financial assets were acquired. Management
determines the classification of the individual financial assets on initial recognition.
Assets measured at fair value through profit and loss
Financial assets measured at fair value through profit and loss are financial assets that are held for trading.
This category has two sub-categories: financial assets that are classified as “held for trading” from the
outset and those which are “held at fair value” from the outset.
A financial asset is classified to this category if it has primarily been acquired with the intention of reselling
it in the short term or if it is designated as such by management. The EWE Group does not currently
hold any instruments designated as such.
Derivatives also belong to this category unless they are designated hedging instruments.
loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not listed on an active market. They are classified as current assets if they mature within twelve months
of the balance sheet date. Those that do not are presented as non-current assets. The EWE Group presents
its loans and receivables in the balance sheet under “Trade receivables” and “Cash and cash equivalents”.
held-to-maturity financial investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified
as held-to-maturity investments when the Group intends and is in a position to hold them until maturity.
After initial recognition, held-to-maturity investments are measured at amortised cost using the effective
interest method, minus any reduction for impairment. The calculation of amortised cost includes all
premiums and discounts arising from the acquisition as well as any fees or costs that represent an integral
component of the effective interest rate. Gains from the amortisation process using the effective
interest method are recognised in the income statement. Impairment losses are also recognised in the
income statement. The EWE Group held no held-to-maturity investments during the 2009 and 2010
financial years.

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98 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 99
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets which are either allocated to this
category or have not been classified in any other category. Assets which Management has no plan to
sell within twelve months of the balance sheet and are not set to mature in this period are classified as
non-current assets.
recognition and measurement
Financial assets purchased and sold as a matter of standard practice are recognised on the trade date,
i.e. the day on which the EWE Group agrees to purchase or sell the asset. Financial assets which are
not designated as being “measured at fair value through profit and loss” are initially recognised at fair
value plus transaction costs. Financial assets of this type are initially recognised at fair value; related
transaction costs are recognised in profit and loss. Financial assets are derecognised when rights to
payment from the asset expire or are transferred and the EWE Group has transferred essentially all of
the risks and rewards associated with ownership. Available-for-sale financial assets and financial assets
measured at fair value through profit and loss are subsequently recognised at fair value. Loans and receivables
are held at amortised cost using the effective interest method.
Gains or losses from financial assets measured at fair value through profit and loss are recognised in
the income statement in the period in which they arise.
Changes in the fair value of monetary securities in a foreign currency which are classified as available for
sale are categorised either as exchange differences from changes in amortised cost, which are recognised
in profit and loss, or other changes to the carrying amount, which are recognised without effect on
profit and loss. Exchange differences related to monetary securities are recognised in profit and loss,
while exchange differences related to non-monetary securities are recognised in other comprehensive
income. Changes in the fair value of both monetary and non-monetary securities classified as being
available for sale are recognised in other comprehensive income.
If securities classified as available-for-sale are sold or impaired, the accumulated changes in fair value
previously recognised in equity are recognised in profit and loss and presented as a reclassified amount
in other comprehensive income.
Interest income on securities in the “available-for-sale” category calculated using the effective interest
method is recognised in the income statement. Dividends on available-for-sale equity instruments are
recognised in profit or loss when the EWE Group’s right to receive payment is established.
derecognition
A financial asset (or part of an asset, or part of a group of similar financial assets) is derecognised if any
of the following apply:
• The rights to the cash flows from the financial asset have expired.
• The Group has transferred its contractual rights to receive the cash flows from the financial assets, or
has assumed a contractual obligation to pass these cash flows on immediately under an agreement
that meets the pass-through criteria of IAS 39.19, and thereby either (a) transfers substantially all
of the risks and rewards of ownership of the financial asset, or (b) does not retain or transfer substantially
all of the risks and rewards of the asset, but has relinquished control of the asset.
If the EWE Group transfers its contractual rights to receive the cash flows from an asset or enters into
a pass-through agreement without retaining or transferring substantially all of the risks and rewards of
ownership of the asset, but retains control of the asset, it recognises the asset to the extent to which it
has a continuing involvement in the asset.
The EWE Group also recognises an associated liability in these cases. The transferred asset and the associated
liability are measured on a basis that reflects the rights and obligations that the EWE Group retains.
Insofar as the EWE Group’s continuing commitment represents a pro forma guarantee with regard to
the transferred asset, the extent of its continuing commitment is the lower of the original carrying
amount of the asset and the maximum amount of the consideration received that the EWE Group
could be required to repay.
offsetting financial instruments
Financial assets and liabilities are only offset and the net amount reported in the balance sheet if the
EWE Group has a legally enforceable right to offset the amounts and intends either to settle directly
or settle the liability concerned by offsetting it against the relevant asset.
impairment of financial assets
Assets measured at amortised cost
At each balance sheet date the Group assesses whether indications exist that a financial asset or group of
financial assets is impaired. A financial asset or a group of financial assets is impaired if there is objective
evidence of impairment as a result of one or more events that occurred after the initial recognition of
the asset (a “loss event”) and the impact of that loss event (or events) on the estimated future cash flows
of the financial asset or group of financial assets can be reliably determined.
The criteria used by the EWE Group to decide whether there is any objective evidence of impairment
include the following:
• significant financial difficulty of the issuer or borrower;
• a breach of contract, such as a default or delinquency in interest or principal payments;
• the EWE Group, for economic or legal reasons relating to the borrower’s financial difficulty,
granting to the borrower a concession that the lender would not otherwise consider;
• it becoming probable that the borrower will declare bankruptcy or other financial reorganisation;
• the disappearance of an active market for the financial asset because of financial difficulties; or
• observable data indicating that there is a measurable decrease in the estimated future cash flows
from a group of financial assets since the initial recognition of those assets, although the decrease
cannot yet be identified with the individual financial assets in the group, including
• adverse changes in the payment status of borrowers in the portfolio, and
• national or local economic conditions that correlate with defaults on the assets in the portfolio.

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100 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 101
The EWE Group begins by deciding whether there is any objective evidence of impairment.
The amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is
then reduced and the amount of the loss is recognised in profit or loss. If a loan, receivable or held-tomaturity
investment has a variable interest rate, the discount rate for measuring any impairment loss
is the current effective interest rate determined under the contract. As a practical expedient, the EWE
Group measures the impairment of a financial asset measured at amortised cost on the basis of the
instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease is related
to an event occurring after the impairment was recognised (such as an improved credit rating), the
amount of the reversal is recognised in profit or loss.
Available-for-sale assets
At each balance sheet date the Group assesses whether indications exist that a financial asset or group
of financial assets is impaired. For equity instruments which are classified as available-for-sale financial
assets, a significant or persistent decline in fair value below the cost of acquisition is considered to be an
indication that the equity instruments are impaired. If there is an indication of this kind that an availablefor-sale
asset is impaired, the accumulated loss, measured as the difference between the acquisition
costs and the current fair value of the asset, minus any previously recognised impairment losses related
to the asset, is derecognised in equity and recognised in the income statement. Impairment related to
equity instruments recognised in the income statement is not reversed through profit or loss. If, in a
subsequent period, the fair value of an available-for-sale debt instrument increases and the increase is
related to an event occurring after the impairment was initially recognised, the amount of the reversal
is recognised in profit or loss.
derivative financial instruments and hedging
Derivative financial instruments are initially measured at fair value on the transaction date. Subsequent
measurement is also at fair value on the balance sheet date. The method adopted to determine gains
and losses depends on whether the derivative financial instrument is designated as a hedging instrument
and, if it is, on what kind of underlying asset is being hedged. The Group designates certain derivative
financial instruments as either
• a hedge against changes in the fair value of a recognised asset, a liability or an unrecognised firm
commitment (fair value hedge),
• a hedge against cash flow volatility related to certain risks associated with a recognised asset or
liability or a highly probable future transaction, or
• a hedge of a net investment in a foreign operation.
Once the transaction has been completed, the EWE Group formally documents the hedging relationship,
its risk management objective and its strategy for undertaking hedge transactions. It is also determined
whether the derivative used in the hedge will be highly effective in offsetting changes in the hedged
item’s fair value or underlying cash flows, both at the inception of the hedge and regularly thereafter.
The full fair value of a derivative financial instrument designated as a hedging instrument is classified
as a non-current asset or liability when the remaining maturity of the hedged item is more than twelve
months after the balance sheet date, and as a current asset or liability when the remaining maturity of
the hedged item is less.
fair value hedges
Changes in the fair value of derivatives that have been designated as fair value hedges and qualify as
such are recognised in the income statement together with those changes in fair value of the hedged
assets or liabilities that can be associated with the hedged risk. The Group uses fair value hedges to
hedge against the risks related to the fixed interest rates of its borrowings. Gains and losses related to
the effective portion of interest rate swaps used to hedge fixed rate financial assets are recognised in
the income statement. Gains and losses related to the ineffective portion are also recognised in the
income statement. The same applies for changes in the fair value of the hedged fixed-rate borrowings
that are attributable to the interest rate risk.
If a hedge no longer meets the criteria for hedge accounting and the previously designated hedged
item has been measured using the effective interest method, the remaining carrying amount of the
hedged item is amortised until maturity.
cash flow hedges
The effective portion of changes in the fair value of those derivatives that are designated as cash flow
hedges and which qualify as such is recognised in other comprehensive income. The ineffective portion
of these changes in fair value is recognised directly in the income statement.
Amounts deferred in equity are reclassified to the income statement and recognised as income or expense
in the period in which the hedged item affects profit or loss (e. g. the transaction date of a hedged
forecast transaction). The gain or loss related to effective hedges of variable rate loans using interest
rate swaps are recognised in the income statement as financing income or financing expense. The gain
or loss related to the ineffective portion is recognised in the income statement. If a hedge of a forecast
transaction results in the recognition of a non-financial asset (e.g. inventories, property, plant or equipment)
or a non-financial liability, the associated gains or losses that were recognised in equity are included in
the initial measured cost of the asset or liability. The deferred amounts are ultimately recognised under
cost of sales when related to inventories and as depreciation for property, plant and equipment.
If a hedging instrument expires, is sold or no longer qualifies for hedge accounting, the accumulated
gains or losses that have been recognised in equity remain in equity and are only recognised through
profit and loss in the income statement when the original hedged forecast transaction occurs. If the forecast
transaction is no longer expected to occur, these cumulative gains or losses recognised in equity
are reclassified immediately to the income statement.
net investment hedges
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
The gain or loss from the effective portion of the hedge is recognised in other comprehensive income;
the gain or loss from the ineffective portion is recognised directly in the income statement. The accumulated
gain or loss on the hedging instrument that has been recognised in equity is reclassified to the
income statement when the foreign operation is disposed of in part or in full.

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102 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 103
i) Financial liabilities
classification
According to IAS 39, financial liabilities are classified as either financial liabilities measured at fair value
through profit or loss or financial liabilities measured at amortised cost. The Group classifies its financial
liabilities at initial recognition.
recognition and measurement
When a financial liability is recognised initially, it is measured at fair value, plus any directly attributable
transaction costs for loans.
The EWE Group’s financial liabilities include trade payables and other liabilities, overdraft facilities,
loans, financial guarantees and derivative financial instruments.
The measurement of financial liabilities subsequent to initial recognition depends on their classification
as follows:
Financial liabilities measured at fair value through profit and loss include the Group’s financial liabilities
held for trading and other financial liabilities that are classified as being measured at fair value through
profit and loss upon initial recognition. Financial liabilities are designated as held for trading if they are
acquired for the purpose of selling them in the near future. This category includes the EWE Group’s derivative
financial instruments that are not designated as hedging instruments under IAS 39. Embedded
derivatives recognised separately are also designated as held for trading, with the exception of derivatives
that are designated as effective hedging instruments. Gains or losses on financial liabilities held
for trading are recognised in profit and loss. None of the EWE Group’s financial liabilities were initially
recognised at fair value through profit and loss.
The effective interest method is used to measure financial liabilities measured at amortised cost after
initial recognition. Gains and losses are recognised in profit or loss using the effective interest method
when the financial liability is derecognised and as part of amortisation. The calculation of amortised
cost includes all premiums and discounts arising from the acquisition as well as any fees or costs that
represent an integral component of the effective interest rate. The amortisation calculated using the
effective interest method is recognised in the income statement under interest expenses.
derecognition
A financial liability is derecognised when the obligation specified in the contract is met, is cancelled
or expires.
If an existing financial liability is exchanged for a different financial liability from the same lender with
substantially different terms, or there has been a substantial modification of the terms of an existing financial
liability, this exchange or modification is accounted for as a derecognition of the original financial
liability and the recognition of a new financial liability. The difference between the carrying amounts of
the liabilities is recognised in profit or loss.
trade payables
Trade payables are obligations to pay for goods or services that have been received or supplied in the
normal course of business. These liabilities are designated as current liabilities if they are due within
one year or less (or within the normal business cycle, if it is longer). Otherwise they are classified as
non-current liabilities.
Trade payables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method.
bonds and liabilities to banks
Borrowings are initially recognised at fair value less transaction costs and measured at amortised cost
in subsequent periods. Differences between the amount paid out (after deducting transaction costs)
and the repayable amount are recognised in the income statement over the term of the debt using the
effective interest method.
Fees incurred on the establishment of credit lines are recognised as transaction costs related to the loan
insofar as it is probable that the facility will be drawn down. In this case, the fee is capitalised until the
draw-down occurs. Insofar as it is improbable that the facility will be drawn down, the fee is capitalised
as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Liabilities are classified as current unless the EWE Group has the right to postpone repayment of the
liability for a period of more than twelve months after the balance sheet date.
j) Property, plant and equipment
Property, plant and equipment is recognised at cost of acquisition or production, plus the present value
of existing future obligations to recultivate land and remove buildings, less accumulated depreciation
and impairment losses. The cost of production consists of the direct costs plus the directly attributable
share of overhead costs.
Subsequent acquisition or production costs, for example in relation to investments in expansions or
replacements, are only recognised as part of the acquisition / production cost for the asset (or, if appropriate,
as a separate asset) if it is probable that the EWE Group will derive economic benefits from
the asset in the future and the cost of the asset can be measured reliably. Expense for repairs and
maintenance which are not considered significant investments in replacements (day-to-day servicing)
are recognised in profit and loss in the financial year in which they arise.
Exploratory drilling is accounted for at cost under the successful efforts method. If exploratory drilling
is successful, all costs for this drilling are capitalised. All other costs, such as seismic and geological
analyses, are recognised as an expense.
Items of property, plant and equipment are depreciated on a straight-line basis. Depreciation relating
to gas exploration and production is also carried out under the unit of production method.
The following table shows the useful lives:
Buildings up to 50
Technical equipment and machines
Electricity supply equipment 8 – 45
Gas supply facilities 10 – 55
Other technical equipment and machines 3 – 50
Gas storage facilities 33 – 40
Other plant, operating and office equipment 5 – 14
Years

Consolidated financial statements
104 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 105
The residual carrying amount and useful life of each depreciable asset is reviewed on each balance sheet
date and adjusted to account for new assumptions if necessary. If the carrying amount of any asset in
this category is higher than its anticipated recoverable amount, it is reduced to the latter immediately.
Gains and losses on the disposal of assets in this category are calculated as the difference between
the proceeds and the carrying amount of the asset and are recognised in the income statement under
“Other operating income” or “Other operating expenses”.
k) Leases
Determining whether an arrangement contains a lease is based on the substance of the arrangement
at its conclusion and requires an assessment of whether fulfilment of the arrangement is dependent on
the use of a specific asset or assets and whether the arrangement conveys a right to use the asset, even
if this right is not explicitly granted.
As per the transitional provisions of IFRIC 4, leases agreed before 1 January 2005 are now treated as
agreed on 1 January 2005.
Finance leases, in which substantially all of the risks and rewards related to the leased asset are transferred
to the Group, involve the capitalisation of the leased asset at the commencement of the lease
term. The leased asset is recognised at the lower of fair value or the present value of the minimum lease
payments. Lease payments are apportioned between finance expense and the reduction of the outstanding
liability so as to produce a constant rate of interest on the remaining balance of the liability
for the term of the lease. Finance expense is recognised in profit and loss.
Leased assets are depreciated over the term of the lease. If there is no reasonable certainty that ownership
of the leased asset will be transferred to the EWE Group at the end of the lease term, the asset is
depreciated in full over the shorter of the lease term and its anticipated useful life.
Lease payments from operating leases are recognised as an expense in the income statement on a
straight-line basis over the lease term.
l) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset
that requires a substantial amount of time to be spent on preparation for its intended use or sale, are
capitalised as part of the acquisition / production costs of that asset. All other borrowing costs are recognised
as an expense in the period in which they arise. Borrowing costs are interest payments and other
costs incurred by a company in connection with the borrowing of funds.
The EWE Group capitalises borrowing costs for all qualifying assets for which the construction or production
process began on or after 1 January 2009. As before, the EWE Group recognises borrowing costs
in connection with construction projects that began before 1 January 2009 as expenses.
m) Investment property
Investment property is measured initially at its cost, including transaction costs. The cost of replacing
part of an investment property is reflected in the carrying amount of the property when incurred, provided
the criteria for recognition are fulfilled. The carrying amount does not include the maintenance
costs for the property. Subsequent to initial recognition, investment property is measured at fair value.
Fair value reflects the actual market conditions as of the balance sheet date. Gains or losses arising
from changes in the fair value of investment property are recognised in the income statement for the
period in which they arise.
Investment property is derecognised when it is disposed of or when the investment property is permanently
withdrawn from use and no further economic benefit can be expected to be derived from its disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is recognised
in the income statement in the period in which the asset is derecognised.
Property is only transferred to or from the investment property portfolio when there is a change in use.
For transfers from investment property to owner-occupied property, the cost of the property for the
purposes of subsequent valuation is the fair value of the property at the point in time that the use of
the property changes. Transfers from owner-occupied property to investment property are accounted
for using the method described in the “Property, plant and equipment” section until the date at which
the use of the property changes.
n) Intangible assets
All intangible assets not acquired in a business combination are measured initially at cost. The cost of
an intangible asset acquired in a business combination is its fair value at the acquisition date. In subsequent
periods, intangible assets are recognised at cost less any accumulated amortisation and any
accumulated impairment losses. Development costs are not capitalised (with the exception of those
development costs that meet the criteria for capitalisation); they are recognised in profit and loss in
the period in which they are incurred.
Intangible assets are categorised into those with indefinite useful lives and those with finite useful lives.
Intangible assets with finite lives are amortised over their useful lives and assessed for impairment if
there is any indication to this effect. The period and method of amortisation for intangible assets with
finite lives are reviewed at least at the end of each reporting period, if not more frequently. Any changes
to the method or period of amortisation as a result of changes in the useful life or expected pattern of
consumption of the future economic benefit provided by the asset are treated as changes in accounting
estimates. Amortisation of intangible assets with limited useful lives is recognised in the income statement
under the expense category corresponding to the function of the intangible asset in the company.

Consolidated financial statements
106 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 107
Intangible assets with indefinite useful lives or the cash-generating unit they are allocated to are tested
for impairment at least once a year. Intangible assets with indefinite useful lives are not amortised.
The useful life of any intangible asset with an indefinite useful life is reviewed each year to determine
whether events and circumstances continue to support an indefinite useful life assessment for that asset.
If they do not, the change in the useful life assessment from indefinite to finite is made prospectively.
The gain or loss arising from the derecognition of an intangible asset is determined as the difference
between the net disposal proceeds and the carrying amount of the asset and is recognised in profit and
loss in the period in which the asset is derecognised.
trademarks and licences
Acquired trademarks and licences are recognised based on their historical cost. Trademarks and licences
acquired in a business combination are measured at fair value on the acquisition date. Trademarks and
licences have finite useful lives and are recognised at cost less any accumulated amortisation. They are
amortised using the straight-line method over an estimated useful life of 15 to 25 years.
Acquired software licences are capitalised on the basis of the costs incurred in the acquisition and
preparing the software for its intended use. These costs are amortised over an estimated useful life of
three to five years.
contractual customer relationships
Contractual customer relationships acquired in a business combination are measured at fair value on the
acquisition date. Contractual customer relationships have a finite useful life and are recognised at cost
less accumulated amortisation. Contractual customer relationships are amortised over the anticipated
length of the customer relationship using the straight-line method.
research and development costs
Research costs are recognised as an expense in the period in which they are incurred. Project development
costs are only recognised as intangible assets if the EWE Group can demonstrate the following:
• that the completion of the intangible asset is technically feasible, thus making it available for internal
use or sale;
• that the Group intends to complete the intangible asset and use or sell it, and is able to use or sell
the intangible asset;
• how the asset will generate future economic benefits;
• that adequate resources are available to complete the asset;
• that it is able to measure reliably the expenditure attributable to the intangible asset during its
development.
Development costs are accounted for using the cost model after initial recognition, i. e. at cost less any
accumulated amortisation and any accumulated impairment losses. Amortisation begins once the development
phase is completed and the asset is ready for use, and continues for the expected useful life
of the asset. The EWE Group tests the asset for impairment once a year during the development phase.
Research costs in the EWE Group do not currently meet the requirements of IAS 38 and are therefore
not recognised.
Emissions rights
As part of the second round of the European emissions trading system and in line with the second
national allocation plan, the EWE Group receives annual emissions rights free of charge until 2012.
In exchange, the Group is obliged to return a quantity of emissions rights equivalent to its emissions
the previous year.
Emissions rights (CO 2 certificates) are recognised as intangible assets under other current receivables.
The emissions rights allocated to the subgroup swb free of charge are recognised at a value of Euro 0.0
at the time they are issued. Purchased certificates are initially recognised at their acquisition cost and
subsequently measured at amortised cost, whereby a comparison is always made with market prices.
A liability is recognised for those emissions rights held on the reporting date that are to be returned the
following year based on actual use. They are measured at the amortised cost of existing rights. If there
is a shortfall of emissions certificates on the reporting date a provision is made for the market value of
the emissions rights that still have to be purchased.
useful lives
The following useful lives have been determined for intangible assets:
Concessions, licences and rights 15 – 25
Computer software and licences 3 – 5
Client base 5 – 17
Limits to the useful lives of intangible assets such as software, licences, client base, rights of use and
operating concessions are based on economic factors or contractual terms. Amortisation on these intangible
assets is shown in the income statement under depreciation, amortisation and impairment.
o) Impairment of non-financial assets
The EWE Group assesses at each balance sheet date whether there is any indication that a non-financial
asset may be impaired. If such indications exist, or if an asset requires annual impairment testing, the
EWE Group makes an estimate of the recoverable amount of the asset. The recoverable amount of an
asset or cash-generating unit is the higher of fair value less cost to sell and value in use. The recoverable
amount is to be determined for each individual asset, unless the asset does not generate cash inflows
which are largely independent of those from other assets or groups of assets. If the recoverable amount
of an asset or cash-generating unit is less than its carrying amount, the asset is impaired and its carrying
amount is reduced to its recoverable amount. Value in use is calculated by discounting the future cash
flows expected to be derived from the asset to their present value on the basis of a pre-tax discount rate
which reflects current market expectations concerning the interest effect and specific risks related to
the asset. An appropriate evaluation model is used to determine the fair value less cost to sell of the
asset. This model uses valuation multiples, prices of listed shares in subsidiaries and other available indicators
of fair value.
Years

Consolidated financial statements
108 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 109
Impairment losses on continuing operations are recognised in profit and loss under the expense categories
corresponding to the function of the impaired asset in the company. This does not apply if the
asset has been revalued previously and is then recognised at its revalued amount in other comprehensive
income. In this case, the impairment loss up to the amount of a previous revaluation is also recognised
in other comprehensive income. Tests are conducted at each balance sheet date to determine whether
there are any indications that an impairment loss recognised in prior periods for any assets except goodwill
may no longer exist or may have decreased. If any such indication exists, the EWE Group estimates
the recoverable amount of the asset or cash-generating unit. An impairment loss recognised in prior
periods for an asset other than goodwill is only reversed if there has been a change in the assumptions
used to estimate the asset’s recoverable amount since the last impairment loss was recognised. The increased
carrying amount of an asset attributable to a reversal of an impairment loss may not exceed the
carrying amount or recoverable amount that would have been determined (net of amortisation or depreciation)
had no impairment loss been recognised for the asset in prior years. Reversals of impairment
losses are recognised in profit and loss, unless the asset is carried according to the revaluation method.
Reversals of impairment losses of a revalued asset are treated as revaluation increases.
The following criteria apply for particular assets:
goodwill
Goodwill is tested for impairment once a year (to 31 December). A test is also conducted if circumstances
indicate that goodwill may have been impaired. Impairment is tested by calculating the recoverable
amount of the cash-generating unit (or group of cash-generating units) to which the goodwill was allocated.
An impairment loss is recognised if the recoverable amount of the cash-generating unit goes below the
carrying amount of the unit. Impairment losses on goodwill may not be reversed in subsequent periods.
intangible assets
Intangible assets with an indefinite useful life are tested for impairment at least once a year to 31 December.
These impairment tests are conducted on the basis of the particular circumstances surrounding
each individual asset or cash-generating unit. A test is also conducted if circumstances indicate that
goodwill may have been impaired.
p) Inventories
Inventories are held at the lower of acquisition or production cost and net realisable value. The costs of
acquisition and production are determined using the average cost method. Net realisable value is determined
as the forecast sales proceeds less estimated costs of completion and costs to sell.
q) Cash and cash equivalents
Cash and cash equivalents comprise cash, sight deposits, other highly liquid current financial assets with
an original term of up to three months and short term overdraft facilities. Used overdraft facilities are
shown in the balance sheet as “Liabilities to banks” under current liabilities.
r) Provisions
Provisions for the rectification of environmental degradation, restructuring costs and legal claims are
formed if the Group has a present de jure or de facto obligation as a result of a past event, the settlement
of the resulting liability is more likely than not to result in an outflow of resources and the provision
can be reliably estimated. Restructuring provisions encompass payments for early termination of
leases and redundancy payments to employees. No provisions are formed for future operating losses.
Provisions for imminent losses are made to the extent that the general conditions for onerous contracts
are met and for the amount by which the costs unavoidably connected with the contract exceed the
expected economic benefits.
Provisions for recultivation obligations after caverns and natural gas fields have ceased operations are
made for the present value of the obligation. They are capitalised and amortised or the provisions are
compounded.
Where a large number of similar obligations exist – such as in the event of legal guarantees – the probability
of an outflow of funds is determined based on this group of obligations. A provision is also recognised
as a liability if the probability of an outflow of funds is low in relation to an individual obligation
in this group.
Provisions are measured at the present value of the expected expenses based on a pre-tax interest rate
that reflects current market expectations concerning the interest effect and the specific risks related to
the obligation. Increases in provisions that arise solely as a result of the accrual of interest are recognised
as interest expenses in profit and loss.
If there is a shortage of emissions rights in the current year, i.e. emissions have already been produced
and these emissions exceed the amount of emissions rights allocated or purchased for the full year, a provision
is made for the assigned amount units that still have to be purchased. Provisions may not be made
for future emissions, however, even if forecasts indicate that a shortage of emissions rights is likely.
Provisions are classified according to their term. Provisions or parts of a provision for an obligation
which is likely to fall due within twelve months of the balance sheet date are classified as current provisions.
Provisions which are only likely to fall due after twelve months are classified as non-current.
s) Construction subsidies
Construction subsidies include investment and construction subsidies.
The EWE Group receives construction subsidies for installing mains electricity, gas and water connections
for standard-rate and special-rate customers. The construction subsidies are recognised as liabilities and
reversed in line with the useful life of the subsidised equipment. The reversal is made to sales, as the
income from the construction subsidies is closely linked to the fundamental electricity and gas business
and therefore relates to the EWE Group’s normal operations.
Investment subsidies are recognised as liabilities and reversed in line with the useful life of the subsidised
equipment. They are reversed in other operating income.
t) Dividend distributions
The dividend distributions due to shareholders are recognised as a liability in the period in which the
corresponding resolution is passed.
u) Contingent liabilities
Contingent liabilities are possible or present obligations which arise from past events but where it is not
probable that an outflow of resources will be required to settle the obligation, or the amount of the
obligation cannot be measured with sufficient reliability. They are not recognised in the balance sheet.

Consolidated financial statements
110 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 111
Forward-looking assumptions and estimates
When drawing up the EWE consolidated financial statements, the Management makes judgements, estimates
and assumptions which have an effect on the income, expenses, assets and liabilities, as well as
on the contingent liabilities reported at the end of the reporting period. The uncertainty of these assumptions
and estimates can lead to circumstances where it is necessary to make considerable adjustments
to the carrying amount of the assets or liabilities concerned.
The following section explains the most important forward-looking assumptions and other primary
sources of uncertainty related to estimates that are present on the balance sheet date and which may
give rise to risks that would make adjustments to the carrying amount of assets and liabilities necessary.
Accounting for acquisitions
When an equity interest is acquired, all identifiable assets, liabilities and contingent liabilities are recognised
at fair value as of the acquisition date for the purpose of initial consolidation as part of the
purchase price allocation. In identifying intangible assets, the fair values are determined using suitable
valuation methods.
Goodwill
An impairment test is carried out for goodwill at least annually or whenever information from internal
or external sources indicates possible impairment. This impairment test is based on assumptions about
the future, which requires estimates to be made of future cash flows from cash-generating units that
include goodwill. These estimates can affect the measurement of future cash flows and lead to impairment
losses on goodwill.
Intangible assets and property, plant and equipment
Expected useful lives and measurement of impairment losses on these assets are based on management
judgement.
Fair value of financial instruments
If the fair value of the financial assets and financial liabilities recorded in the balance sheet cannot be
determined using data from an active market, it is calculated using measurement methods, including
the discounted cash flow method. The input parameters used in the model are based on observable
market data insofar as this is possible. If this is not possible, a measure of judgement is used to determine
fair value. This judgement is affected by such input parameters as liquidity risk, credit risk and
volatility. Changes in assumptions with regard to these factors can affect the fair value recorded for
the financial instruments.
Provisions for pensions and similar obligations
The measurement of pension obligations takes place using actuarial assumptions on demographic variables
(staff fluctuation, mortality rates) and financial variables (interest rates, future pay increases, future
pension increases, expected return on claims for reimbursement). The discount rate used is determined
taking the specific structure of the cash flow for the obligations earned into account. The calculation is
based on the pension obligations as of the balance sheet date. Calculations are made using the yield curve,
the DJ EuroStoxx 50 and the iBoxx indices and taking the daily values as of 31 December 2010. In accordance
with IAS 19.78 the discount rate is determined as being the capital market return on high-quality
corporate bonds whose currency and maturity correspond to those of the obligation being measured.
If there is no sufficient market for the required maturities, the return is interpolated or extrapolated for
these maturities along the available yield curve in accordance with IAS 19.81.
Provisions for recultivation
The provisions for recultivation and demolition are based on surveys by third parties. The costs of recultivation
have been estimated for all caverns in the event that they cease to be used. This amount is
discounted to the settlement date. The measurement of the provision for recultivation is reviewed on
every balance sheet date and any adjustment to a revised best estimate is made as necessary. Changes
in the expected timing and amount of the payments needed to settle the obligation and changes in the
discount rate result in an adjustment of the provisions for recultivation.
Income taxes
Calculating effective and deferred taxes involves assumptions. The use of deferred tax assets depends
on earning sufficient taxable income.
Changes in estimates
At the time the consolidated financial statements were prepared, there was no indication of significant
changes in the assumptions and estimates used for accounting and valuation.
Company acquisitions in 2009
On 21 October 2009 EWE AG acquired a further 51 per cent of the shares in swb AG, Bremen (swb),
thereby increasing its stake to 100 per cent less one share.
The net assets reported in the consolidated financial statements as of 31 December 2009 are based
solely on a preliminary calculation of their fair value. The report commissioned by the Group was not
available for publication by company management at the time that the consolidated financial statements
for the 2009 financial year were approved.
The calculation of the fair values was completed on 26 March 2010. The report confirmed the fair values
reported in the consolidated financial statements as of 31 December 2009.
notes to the income statement
1. Sales
Sales are initially presented as gross sales including the electricity and energy taxes. Sales include electricity
and energy taxes invoiced to customers of Euro 440.2 million (previous year: Euro 353.1 million).
Net sales are the sales after deducting the electricity and energy taxes.
Segment reporting includes a breakdown of sales by products and services (Note 35).
2. Other own work capitalised
Own work capitalised includes construction and extension work on supply networks and the expansion
of wind energy plants. The capitalised amount also includes directly attributable overhead costs.

Consolidated financial statements
112 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 113
3. Other operating income
EUr million 2010 2009
Derivative financial instruments 142.9 24.7
reversal of provisions 28.1 15.3
rental and lease expenses 15.1 7.9
Income from CHP charges / premiums 6.8 7.5
Management of waterworks 3.0 2.8
Disposal proceeds on items of property, plant and equipment 2.7 1.9
Foreign currency gains 2.5 2.9
reimbursement of costs from EnBW 4.4
Claim for reimbursement from E.ON Westfalen Weser aG 4.0
Other 73.7 40.6
Total 274.8 112.0
4. Cost of materials and services
EUr million 2010 2009
raw materials, consumables and supplies and purchased merchandise 4,767.2 3,905.9
Purchased services 701.6 529.8
Total 5,468.8 4,435.7
5. Personnel expenses
EUr million 2010 2009
Wages and salaries 465.5 324.4
social security contributions and retirement and other benefits 112.1 82.3
Total 577.6 406.7
Retirement benefits amount to Euro 31.2 million (previous year: Euro 23.5 million), of which service
expense in the reporting period accounts for Euro 18.9 million (previous year: Euro 11.3 million) and
past service expense for Euro 0.0 million (previous year: Euro 0.0 million).
Expenses for the employer’s share of contributions to statutory retirement pension insurance amounted
to Euro 56.3 million (previous year: Euro 37.8 million).
The following table shows the average number of employees over the year:
2010 2009
Full-time staff 7,484 5,647
Part-time staff 865 689
Trainees and assistants 116 110
Total 8,464 6,446
6. Depreciation, amortisation and impairment
Depreciation and amortisation of property, plant and equipment and intangible assets is carried out on
a straight-line basis over the useful life of the assets.
Depreciation of property, plant and equipment amounts to Euro 371.6 million (previous year: Euro 288.8
million) and amortisation of intangible assets to Euro 47.6 million (previous year: Euro 33.5 million).
In the reporting year an impairment loss of Euro 17.7 million was recognised on property, plant and equipment
(previous year: Euro 4.2 million). The impairment loss on intangible assets amounted to Euro 149.6
million (previous year: Euro 85.4 million). Of this, Euro 144.0 million related to goodwill (previous year:
Euro 84.1 million).
7. Other operating expenses
EUr million 2010 2009
Concession fees (see Note 37) 128.0 89.6
Derivative financial instruments 113.6 27.2
Fees and advisory expenses 38.1 27.6
additions to provisions 37.2 3.2
rental and lease expenses 36.3 15.8
Impairment allowances on receivables 14.8 5.0
Combined Heat and Power act (KWKG) 12.5 21.9
Exploration and production of gas reserves 9.8 12.5
Disposal of intangible assets and property, plant and equipment 9.4 13.3
Hedging expenses 9.4 8.9
Other taxes 9.0 9.1
Foreign currency losses 4.0 4.4
Other 214.2 214.7
Total 636.3 453.2
Expenses for natural gas exploration and production consist of exploratory drilling, production, transport
and administration as well as geological and geophysical analyses.
Exchange rate gains of Euro 2.5 million (previous year: Euro 2.9 million) were set off against exchange
rate losses.
8. Result of investments accounted for under the equity method
EUr million 2010 2009
Result of investments accounted for under the equity method 26.7 153.5
The result of investments accounted for under the equity method principally relates to the shareholdings
in Stadtwerke Bielefeld GmbH, Bielefeld.

Consolidated financial statements
114 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 115
9. Other investment income
EUr million 2010 2009
Income from equity investments 60.3 7.7
Impairment losses on financial investments -7.5 -20.9
Income from profit transfer agreements 0.7 1.3
Expenses from loss transfer agreements -1.0 -0.8
Gains from the disposal of equity shareholdings 0.9 5.3
Other expenses for shareholdings -0.8
Total 53.4 -8.2
The write-downs on financial investments mostly relate to the permanent impairment of shares in
non-consolidated affiliated companies.
10. Net interest income / expense
EUr million 2010 2009
Interest and similar income 22.0 67.1
Interest and similar expenses -141.5 -141.0
Interest portion of additions to
Pension provisions -58.9 -40.6
recultivation provisions -3.3 -3.2
Other provisions -2.7 -2.3
Total -184.4 -120.0
The change in interest and similar income was mainly due to a one-off effect in 2009 in connection with
the share purchase by our strategic partner EnBW Baden-Württemberg AG (EnBW), Karlsruhe. It was
agreed that interest should be paid on the share premium for the period between the agreed transfer date
for the shareholders’ rights (31 December 2008 / 1 January 2009) and the effective date of the share
transfer (“closing”), which meant that EWE AG received interest income of Euro 42.5 million.
11. Income taxes
EUr million 2010 2009
Effective income taxes 48.2 81.4
Of which:
Tax expense for the current period 42.7 76.6
Tax expense / (income) for prior periods 5.5 4.8
deferred taxes -16.9 13.2
Of which:
Temporary differences -16.7 14.4
Tax losses carried forward -0.2 -1.2
31.3 94.6
The weighted average EWE Group tax rate for 2010 was 29.0 per cent (previous year: 29.0 per cent) for
the EWE Group. As in the previous year, this is made up of corporation tax, the solidarity surcharge and
trade tax.
Equity increased by Euro 6.4 million (previous year: Euro 2.2 million) in the reporting year due to deferred
taxes being set off against other comprehensive income.
income taxes recognised in other comprehensive income
EUr million 2010 2009
Deferred taxes on pensions 24.1 7.7
Deferred taxes on reserve for cash flow hedges -17.9 -5.5
Deferred taxes on reserve for available-for-sale financial instruments 0.2
income 6.4 2.2
The amount of tax on the EWE Group’s net profit before tax differs from the theoretical tax expense
obtained by applying the weighted average Group tax rate to net profit before taxes. The following
table shows the reconciliation between the two:
tax reconciliation
EUr million 2010 2009
profit before tax -19.5 294.0
Hypothetical tax expense -5.6 85.3
Difference due to taxable profit for trade tax 4.1 4.3
Divergence from expected tax rate
Divergence due to difference with Group tax rate 19.3 13.3
Permanent divergences 32.8 25.8
Change in tax rate -0.2 1.2
Non-recognised deferred tax assets 0.4 0.8
Use of tax losses carried forward -0.4 -0.1
Non-deductible expenses 1.2 1.6
Tax-free income -18.4 -2.7
Equity accounting for associated companies -1.9 -44.6
Non-periodic taxes -2.6 7.3
Other 2.6 2.4
Effective tax expenses 31.3 94.6
Effective tax rate in % -160.5 32.3

Consolidated financial statements
116 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 117
notes to the balance sheet
12. Intangible assets
EUr million 31.12.2010 31.12.2009
Concessions, trademarks, licences and similar rights 440.5 450.7
Payments made on account 5.6 4.0
Intangible assets with indefinite useful lives 388.2 392.0
Goodwill 602.0 727.0
Total 1,436.3 1,573.7
The following table shows the changes in intangible assets:
EUr million
Concessions,
trademarks,
licences and
similar rights
Payments
made on
account Goodwill
Intangible
assets with
indefinite
useful lives Total
Cost
as at 01.01.2010
Change in group of consolidated
603.1 4.0 850.7 392.0 1,849.8
companies / company acquisitions 0.0 0.0 3.4 0.0 3.4
additions / disposals from mergers and
spin-outs 0.1 0.0 0.0 0.0 0.1
additions 17.5 3.2 0.0 0.0 20.7
reclassifications 10.2 -1.6 0.0 -3.8 4.8
Currency adjustments 15.7 0.0 15.6 0.0 31.3
Disposals 4.0 0.0 0.4 0.0 4.4
As at 31.12.2010 642.6 5.6 869.3 388.2 1,905.7
Accumulated amortisation
and impairment
as at 01.01.2010
Change in group of consolidated com-
152.4 0.0 123.7 0.0 276.1
panies / company acquisitions 0.0 0.0 0.0 0.0 0.0
additions / disposals from mergers and
spin-outs 0.1 0.0 0.0 0.0 0.1
amortisation in the reporting year 47.6 0.0 0.0 0.0 47.6
Impairment in the reporting year 5.6 0.0 144.0 0.0 149.6
reclassifications -0.1 0.0 0.0 0.0 -0.1
Currency adjustments 0.5 0.0 0.0 0.0 0.5
Disposals 4.0 0.0 0.4 0.0 4.4
reversals of amortisation
and impairment 0.0 0.0 0.0 0.0 0.0
As at 31.12.2010 202.1 0.0 267.3 0.0 469.4
Carrying amounts
As at 31.12.2010 440.5 5.6 602.0 388.2 1,436.3
EUr million
Concessions,
trademarks,
licences and
similar rights
Payments
made on
account Goodwill
Intangible
assets with
indefinite
useful lives Total
Cost
as at 01.01.20091 Change in group of consolidated
471.8 0.1 336.6 3.8 812.3
companies / company acquisitions 125.8 2.5 516.7 388.2 1,033.2
additions / disposals from mergers and
spin-outs 0.0 0.0 0.0 0.0 0.0
additions 15.5 1.0 0.0 0.0 16.5
reclassifications 0.7 0.4 0.0 0.0 1.1
Currency adjustments -2.6 0.0 -2.6 0.0 -5.2
Disposals 8.1 0.0 0.0 0.0 8.1
As at 31.12.2009 603.1 4.0 850.7 392.0 1,849.8
Accumulated amortisation
and impairment
as at 01.01.20091 Change in group of consolidated
91.5 0.0 0.0 0.0 91.5
companies / company acquisitions 32.2 0.0 38.2 0.0 70.4
additions / disposals from mergers and
spin-outs 0.0 0.0 0.0 0.0 0.0
amortisation in the reporting year 33.5 0.0 0.0 0.0 33.5
Impairment in the reporting year 1.3 0.0 84.1 0.0 85.4
reclassifications 0.0 0.0 0.0 0.0 0.0
Currency adjustments 0.0 0.0 1.4 0.0 1.4
Disposals 6.1 0.0 0.0 0.0 6.1
reversals of amortisation
and impairment 0.0 0.0 0.0 0.0 0.0
As at 31.12.2009 152.4 0.0 123.7 0.0 276.1
Carrying amounts
As at 31.12.2009 450.7 4.0 727.0 392.0 1,573.7
1 Previous year’s figures adjusted
The conditions required for capitalising development costs were not met. Development costs were
therefore recognised as expenses, together with research costs. In 2010 Euro 16.3 million (previous
year: Euro 40.0 million) was spent on research and development.
Impairment losses on intangible assets were recognised through profit and loss under depreciation,
amortisation and impairment in the statement of comprehensive income.
There are no restrictions of title to intangible assets and none have been pledged as collateral for liabilities.

Consolidated financial statements
118 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 119
testing goodwill and intangible assets with indefinite useful lives for impairment
To test for impairment, the goodwill acquired in mergers and brands and indefinite concession agreements
were allocated to the following cash-generating units:
• EWE Energy business area
• swb business area
• New Markets and ICT business area
• Poland business unit
• Turkey business unit
• TC business unit
• IT unit
carrying amounts of goodwill, brands and concession agreements allocated to cash-generating units:
EUr million Cash-generating units
EWE Energy swb Turkey 1/3 TC 2 IT 2 Total
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Goodwill 3.4 451.1 451.1 96.3 220.8 42.8 46.8 8.3 8.3 601.9 727.0
Brands 95.9 95.9 3.8 95.9 99.7
Concession
agreements 292.3 292.3 292.3 292.3
1 Allocated to the New Markets and ICT business area in 2010 and to the Energy business area in 2009
2 Allocated to the New Markets and ICT business area in 2010
3 Includes: Bursagaz. Kayserigaz. EWE Doğalgaz
cash-generating units
The Group performed its annual impairment test on 31 December 2010.
The recoverable amount is calculated by calculating the fair value less costs to sell.
This fair value is calculated using a discounted cash flow method, which calculates the present value of
all future cash flow surpluses which the cash-generating unit is expected to generate. The sum of the
present values (for each CGU) was reduced by 1 per cent to take hypothetical costs to sell into account.
Future cash flows for the Energy and swb business areas and the Poland, Turkey, TC and IT units are determined
based on current budgets as approved by the Board of Management and the Supervisory Board.
The planning horizon is three years, followed by a normal year which forms the basis for extrapolating
cash flows thereafter. The planning horizon was extended whenever appropriate to take returns on investment
into account.
The budgets take past experience into account as well as certain assumptions, for example on exchange
rates and oil price developments. For the companies Bursagaz and Kayserigaz and the Poland business
unit, the latest available budgets provided by the managing directors or business managers are used as
the basis for calculations.
The discount rates are derived from capital market data for sector-specific peer groups. They take into
account expectations of the risk-free market interest rate and the specific risks of the cash-generating
unit. The individual weighted average cost of capital (WACC) after taxes determined in this way was
then used for the respective planning horizon. The extrapolated cash flow takes a discount for sustainable
growth of 1.0 per cent into account. All of the respective discount rates used are listed in the following
table.
Cash-generating unit WaCC Growth rate
31.12.2010 31.12.2009 31.12.2010 31.12.2009
Energy business area 4.80 % / 3.80 % 6.42 % / 5.42 % 1.00 % 1.00 %
swb business area 4.80 % / 3.80 % 6.42 % / 5.42 % 1.00 % 1.00 %
New Markets and ICT business area
subgroup Poland 5.35 % / 4.35 % 6.98 % / 5.98 % 1.00 % 1.00 %
Bursagaz 6.62 % / 5.62 % 9.58 % / 8.58 % 1.00 % 1.00 %
Kayserigaz 6.62 % / 5.62 % 9.58 % / 8.58 % 1.00 % 1.00 %
Doğalgaz 6.62 % / 5.62 % 9.58 % / 8.58 % 1.00 % 1.00 %
TC business unit 5.08 % / 4.08 % 6.24 % / 5.24 % 1.00 % 1.00 %
IT unit 7.91 % / 6.91 % 9.36 % / 8.36 % 1.00 % 1.00 %
The growth rates are based on estimates made by management.
The estimated recoverable amount for the cash-generating units Bursagaz und Kayserigaz is equal to
the carrying amount after impairment. Any negative change to a main assumption would therefore
cause an additional impairment loss.
In the reporting year, impairment losses of Euro 144.0 million were recognised on goodwill (previous
year: Euro 84.1 million). As in the previous year, no impairment losses were recognised on intangible
assets with an indefinite useful life.
13. Property, plant and equipment
EUr million 31.12.2010 31.12.2009
land and buildings 489.7 441.3
Technical equipment and machines
Electricity supply equipment 1,299.9 1,261.5
Gas supply facilities 1,484.2 1,480.4
Other 1,178.1 1,077.2
Other plant, operating and office equipment 104.1 108.2
Payments made on account and plant under construction 458.1 452.4
Total 5,014.1 4,821.0

Consolidated financial statements
120 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 121
The following table shows changes in property, plant and equipment:
EUr million
land and
buildings
Technical
equipment and
machines
Other plant,
operating and
office
equipment
Payments
made on
account and
plant under
construction Total
Cost
as at 01.01.2010
Change in group of consolidated
811.1 9,841.2 331.2 455.6 11,439.1
companies 0.0 0.0 0.0 10.7 10.7
additions / disposals from mergers and
spin-outs 5.3 11.2 0.4 0.0 16.9
additions 25.3 298.0 23.1 229.4 575.8
reclassifications 42.8 168.4 4.8 -223.5 -7.5
Currency adjustments 0.1 12.9 0.2 0.3 13.5
Disposals 2.8 72.6 41.9 0.3 117.6
As at 31.12.2010 881.8 10,259.1 317.8 472.2 11,930.9
Accumulated amortisation
and impairment
as at 01.01.2010
Change in group of consolidated
369.8 6,022.1 223.0 3.2 6,618.1
companies 0.0 0.0 0.0 0.0 0.0
additions / disposals from mergers and
spin-outs 3.1 8.6 0.4 0.0 12.1
amortisation in the reporting year 20.9 321.5 29.2 0.0 371.6
Impairment in the reporting year 0.0 5.6 0.2 11.9 17.7
reclassifications 0.0 1.0 0.1 -1.0 0.1
Currency adjustments 0.0 3.0 0.1 0.0 3.1
Disposals 1.7 64.4 39.3 0.0 105.4
reversals of amortisation
and impairment 0.0 -0.5 0.0 0.0 -0.5
As at 31.12.2010 392.1 6,296.9 213.7 14.1 6,916.8
Carrying amounts
As at 31.12.2010 489.7 3,962.2 104.1 458.1 5,014.1
EUr million
land and
buildings
Technical
equipment and
machines
Other plant,
operating and
office
equipment
Payments
made on
account and
plant under
construction Total
Cost
as at 01.01.20091 Change in group of consolidated
531.7 6,815.4 208.2 185.9 7,741.2
companies 234.6 2,800.4 104.2 137.3 3,276.5
additions / disposals from mergers and
spin-outs 0.0 0.0 0.0 0.0 0.0
additions 40.9 287.9 31.5 188.0 548.3
reclassifications 7.2 28.7 9.4 -48.4 -3.1
Currency adjustments 0.0 -0.6 0.0 0.0 -0.6
Disposals 3.3 90.6 22.1 7.2 123.2
As at 31.12.2009 811.1 9,841.2 331.2 455.6 11,439.1
Accumulated amortisation
and impairment
as at 01.01.20091 Change in group of consolidated
200.3 4,054.1 138.7 0.0 4,393.1
companies 154.6 1,802.4 82.7 0.0 2,039.7
additions / disposals from mergers and
spin-outs 0.0 0.0 0.0 0.0 0.0
amortisation in the reporting year 15.6 250.2 23.0 0.0 288.8
Impairment in the reporting year 0.0 1.0 0.0 3.2 4.2
reclassifications 0.0 1.3 -1.3 0.0 0.0
Currency adjustments 0.0 0.0 0.0 0.0 0.0
Disposals 0.9 86.8 20.1 0.0 107.8
reversals of amortisation
and impairment 0.2 -0.1 0.0 0.0 0.1
As at 31.12.2009 369.8 6,022.1 223.0 3.2 6,618.1
Carrying amounts
As at 31.12.2009 441.3 3,819.1 108.2 452.4 4,821.0
1 Previous year’s figures adjusted
Items of property, plant and equipment amounting to Euro 31.5 million (previous year: Euro 34.0 million)
were pledged as collateral, of which the lending bank imposes restrictions on the use of Euro 40.1 million
(previous year: Euro 41.6 million). The lending bank is only entitled to exercise its rights if the borrower
fails to meet its contractual obligations.
Impairment losses of Euro 14.1 million (previous year: Euro 2.6 million) on property, plant and equipment
for exploration (gas supply facilities) were recognised in profit and loss. The residual carrying amount
came to Euro 20.0 million as of the balance sheet date (previous year: Euro 26.8 million). Impairment
losses of Euro 17.6 million (previous year: Euro 4.2 million) are shown under depreciation, amortisation
and impairment in the statement of comprehensive income.
Euro 3.1 million of compensation received in 2010 for a coal silo destroyed by fire in Bremen Hastedt
was recognised in profit and loss.

Consolidated financial statements
122 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 123
14. Financial investments accounted for under the equity method
The following table shows summarised financial information on companies accounted for under the
equity method, none of which are publicly listed. However, these key figures do not correspond to
EWE AG’s equity interest (2010 not including VNG), but rather are reported in full.
EUr million 2010 2009
Balance sheet total 2,026.9 4,022.7
Borrowings 968.5 2,389.0
sales 843.5 6,119.2
result 60.9 238.5
Interests in companies accounted for under the equity method changed as follows:
EUr million 2010 2009
Opening balance on 1 january 497.4 1,585.7
Group share of net profit / loss 26.7 153.5
Dividends received -25.4 -71.1
Capital increases 92.2
Change in group of consolidated companies 310.5
additions 3.9
reclassification -1,571.8
Changes without effect on profit and loss 0.1 -1.6
Closing balance on 31 december 502.7 497.4
As of 31 December 2010 investments in associated companies include goodwill of Euro 69.2 million
(previous year: Euro 68.6 million), of which the swb business area accounts for Euro 50.1 million (previous
year: Euro 49.5 million) and the TC business area for Euro 19.1 million (previous year: Euro 19.1 million).
The enterprise value was reduced by the net financial liabilities for the impairment test of associated
companies accounted for under the equity method. This provides the equity value. The proportional equity
value corresponding to the equity investment amount was subsequently calculated. This is taken as
the recoverable amount of the companies accounted for under the equity method and compared with
the carrying amount.
The addition to the Group of consolidated companies is the result of the acquisition of shares in Weser -
kraftwerk Bremen GmbH & Co. KG, Bremen.
The reclassifications in the previous year relate to VNG shares that were reclassified from non-current
assets to held-for-sale (Euro 1,000.0 million) and the swb shares (Euro 571.8 million) that were reclassified
to shares in affiliated companies that were eliminated during capital consolidation now that the
company is fully consolidated.
15. Other non-current assets
EUr million 31.12.2010 31.12.2009
Financial assets at fair value through profit and loss
Derivative financial instruments 52.0 37.0
loans and receivables
loans to affiliated companies 37.1 8.8
Other loans 23.5 29.7
Energy saving loans 1.4 2.5
Other 1 3.3 4.1
available-for-sale financial assets
Interests in affiliated companies 65.0 69.5
Other shareholdings 71.3 92.9
Financial assets 253.6 244.5
non-financial assets 2 4.2 5.5
Total 257.8 250.0
1 Previous year’s figure adjusted (see Note 18)
2 Previous year’s figure adjusted
The interests in affiliated companies and loans to affiliated companies relate to non-consolidated
shareholdings.
16. Inventories
EUr million 31.12.2010 31.12.2009
Gas reserves 184.5 206.4
raw materials, consumables and supplies 34.2 30.3
Work in progress 19.6 13.5
Finished goods and merchandise 12.7 15.4
Payments made on account 0.7 1.0
Total 251.7 266.6
There were no restrictions on use or other charges over inventories.

Consolidated financial statements
124 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 125
17. Trade receivables
Trade receivables are all due within one year.
Collateral of Euro 3.1 million (previous year: Euro 4.1 million) was received in the form of cash.
EUr million Carrying amount Neither
overdue nor
impaired
Trade receivables
Trade receivables
as of 31.12.2010
as of 31.12.2009
of which overdue on balance sheet date and not individually written down
Total
less than
30 days
Between
30 and
90 days
Between
91 and
180 days
Between
181 and
360 days
More than
360 days
944.6 773.8 170.8 108.7 17.5 7.7 7.7 29.2
732.2 587.0 145.2 102.6 15.0 7.2 10.1 10.3
The following table shows changes in impairment allowances for trade receivables:
EUr million 2010 2009
Impairment allowances on 1 january 38.8 17.2
Exchange rate differences 0.2
additions 1.5 9.0
Used -1.4
reversals -1.1 -1.2
Change in group of consolidated companies 0.3 15.2
impairment allowances on 31 december 39.7 38.8
The total amount of impairment allowances consists of individual write-downs of Euro 13.1 million
(previous year: Euro 32.7 million) and generalised impairment allowances of Euro 26.6 million (previous
year: Euro 6.1 million).
The individual write-downs were on trade receivables from customers that are in unexpected economic
difficulties. The assumption is nevertheless that some of the receivables will be recovered in future.
Additions to write-downs on trade receivables are shown in the income statement under other operating
expenses, and amounts from the reversal of write-downs are shown under other operating income.
18. Other receivables and assets
EUr million 31.12.2010 31.12.2009
Financial assets at fair value through profit and loss
securities 1 3.1 2.5
Derivative financial instruments 124.5 241.0
Financial assets at fair value without effect on profit and loss
securities 124.3
loans and receivables
receivables from affiliated companies 68.8 72.3
receivables from companies accounted for under the equity method 43.4 23.8
receivables from investee companies 7.0 18.0
receivables from contract production 7.8 8.2
Energy saving loans 1.1 1.7
Miscellaneous other financial assets 39.9 39.0
Financial assets 419.9 406.5
Payments made on account 27.3 85.3
Own-use electricity trading 9.5 58.4
Emissions rights 35.5 50.2
VaT 5.1 20.1
Miscellaneous other non-financial assets 81.0 16.9
non-financial assets 158.4 230.9
Total 578.3 637.4
1 Previous year’s figures adjusted (see Note 15)
The other receivables and assets are due within one year.
The receivables from affiliated companies are non-consolidated shareholdings.
EUr million Carrying amount Neither
overdue nor
impaired
Other financial
receivables and assets
Other financial
receivables and assets
as of 31.12.2010
as of 31.12.2009
of which overdue on balance sheet date and not individually written down
Total
less than
30 days
Between
30 and
90 days
Between
91 and
180 days
Between
181 and
360 days
More than
360 days
419.9 207.6 212.3 145.0 19.2 10.3 8.3 29.5
406.5 406.1 0.4 0.1 0.2 0.1

Consolidated financial statements
126 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 127
The following table shows valuation allowances for other financial receivables and assets:
EUr million 2010 2009
Impairment allowances on 1 january 1.4 1.5
reversals -0.1 -0.1
impairment allowances on 31 december 1.3 1.4
Additions to write-downs on other receivables and assets are shown in the income statement under
other operating expenses, and amounts from the reversal of write-downs are shown under other
operating income.
19. Cash, cash equivalents, current funds and short-term investments
See Note 36 for the composition of cash and cash equivalents in the cash flow statement.
20. Non-current assets held for sale
The VNG shares measured using the equity method were classified as held for sale in the previous
year due to the decision to dispose of them. They were measured at their carrying amount.
The shares have been attributed to the Corporate Centre / Consolidation business area. The sale is
expected to be concluded in financial year 2011.
21. Equity
Components and changes in equity are shown in the statement of changes in shareholders’ equity.
The subscribed capital of EWE AG amounts to Euro 242,988,000 (previous year: Euro 242,988,000)
and is divided into 242,988 (previous year: 242,988) registered shares of Euro 1,000. In accordance
with a resolution taken at the Annual General Meeting on 8 July 2009, share capital was increased in
2009 by Euro 42,988,000 to be paid in cash as a result of the strategic partnership between EWE AG
and EnBW.
On 21 July 2009, 26 per cent of the EWE AG share capital was transferred to EnBW. Weser-Ems-Energiebeteiligungen
GmbH (WEE), Oldenburg, still holds 59 per cent of the shares in EWE AG and Energieverband
Elbe-Weser Beteiligungsholding GmbH (EEW), Oldenburg, still holds 15 per cent. The shareholder
of WEE is Ems-Weser-Elbe Versorgungs- und Entsorgungsverband Beteiligungsgesellschaft mbH
(EWE-Verband GmbH), Oldenburg. The sole shareholder of EWE-Verband GmbH and EEW is Ems-Weser-Elbe
Versorgungs- und Entsorgungsverband (EWE-Verband), Oldenburg. The members of EWE-Verband
are the town, city and district authorities in our supply area between the rivers Ems, Weser and
Elbe.
The increase in the capital reserve in 2009 is principally due to the strategic partnership between EWE
AG and EnBW described under subscribed capital above and relates to a share premium (Section 272
para. 2 No. 4 of the German Commercial Code [HGB]) of Euro 1,273.5 million. A further Euro 2.4 million
was paid by EnBW in 2010 and transferred to the capital reserve.
Other comprehensive income includes the revaluation reserve in accordance with IFRS 3, the changes
in fair value of cash flow hedges, market values of available-for-sale financial instruments recognised
without effect on profit and loss, currency translation differences on foreign financial statements, actuarial
gains and losses recognised without effect on profit and loss, IFRS 5 adjustments and changes in
the carrying amounts of associated companies accounted for under the equity method without effect
on profit and loss.
The revaluation reserve in accordance with IFRS 3 was formed in connection with the step acquisition
of Bursagaz in 2007 and 2008.
proposal for the appropriation of profit
The Board of Management will propose to the Annual General Meeting that a dividend for the
2010 financial year of Euro 88,000,534.08 (Euro 362.16 per Euro 1,000.00 nominal share capital of
Euro 242,988,000.00) be distributed to the shareholders out of EWE AG’s distributable profit of
Euro 97,237,069.61. The remaining Euro 9,236,535.53 will be carried forward to new account.
Minority interests principally consist of third-party shareholders in Bursagaz and Kayserigaz.
22. Construction subsidies and emissions rights
EUr million 31.12.2010 31.12.2009
Non-current Current Non-current Current
Construction subsidies 750.0 44.8 749.3 42.9
Obligation to return emissions rights 33.5 50.2
Total 750.0 78.3 749.3 93.1
Construction subsidies mainly consist of subsidies for construction costs. They are reversed over the
useful life of the subsidised assets. Reversals are recognised in the income statement under sales.
23. Provisions
EUr million 31.12.2010 31.12.2009
Non-current Current Total Non-current Current Total
Provisions for pensions and similar obligations 1,235.8 1,235.8 1,138.0 1,138.0
Other provisions
Obligations towards staff 38.4 8.4 46.8 51.1 7.4 58.5
Obligations from recultivation
of gas caverns 75.9 75.9 76.6 76.6
Miscellaneous other provisions 50.2 161.3 211.5 48.9 87.1 136.0
Total 1,400.3 169.7 1,570.0 1,314.6 94.5 1,409.1
provisions for pensions and similar obligations
The EWE Group’s benefit payments to its employees correspond to the IAS 19 definition of post-
employment defined-benefit plans. Overall, the pension commitments largely depend on the length
of service and the employee’s remuneration.

Consolidated financial statements
128 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 129
The obligations include both those from pensions already being paid and those from entitlements to
future pensions.
The characteristic feature of obligations under defined-benefit plans is that the EWE Group has to ful fil
them in the amount agreed and therefore bears both the funding risk and the biometric risks (e. g. longevity
risk) in full.
In the case of the funded direct commitments introduced for the first time in 2009, the Group companies
that take part in this model pay an annual benefit charge to EWE-Treuhandverein e.V. for each entitled
employee. The accumulated benefit charges over the period of entitlement, plus the returns earned on
them, are converted into an annuity when benefits begin to be drawn. EWE AG guarantees the value of
the nominal contributions. In line with IFRIC D9 the defined-benefit obligation (DBO) of the new direct
commitment is recognised as the higher of the present value of the guaranteed obligation and fund assets.
Similarly, current service expense is the higher of the current service expense of the guaranteed
obligations and fund contributions. Finally, to the extent that plan assets exceed the present value of
the guarantee obligation, the interest expense on the obligation is considered to mirror the expected
return on plan assets, with a reversed positive or negative value. The result is recognition of the actual
extent of the obligation and the costs. As long as plan assets exceed the present value of the minimum
benefit there is no balance sheet disclosure and expenses generally correspond to the contributions made,
which is basically the same as accounting for a defined-contribution plan. It does, however, ensure that
the minimum obligation under labour law is permanently covered by external assets or if necessary by
internal reserves, which is enough to satisfy the defined-benefit element of the plan’s structure.
On balance this model also transfers the bulk of the funding risk for the retirement benefits to the employees
who benefit from them, particularly with regard to the nominal guarantee during the entitlement
phase. In exchange they have the opportunity of earning appropriate returns on the capital invested.
Current contributions in the form of annual service expenses are recognised as personnel expenses for
the respective period and disclosed in the operating result (EBIT). The interest component is included
in net interest income / expense.
The balance sheet figures for the defined-benefit pension commitments are as follows:
EUr million 2010 2009
Present value of financial obligations funded via EWE-Treuhandverein e.V. 2.4 0.8
Fair value of plan assets 2.4 0.8
Funding status 0.0 0.0
Present value of financial obligations not funded via EWE-Treuhandverein e.V. 1,235.8 1,138.0
Unrecognised past service expense 0.0 0.0
amount not recognised as an asset due to Ias 19 limit 0.0 0.0
Carrying amount 1,235.8 1,138.0
The following amounts have been recognised in the income statement:
EUr million 2010 2009
Current service expense 18.9 11.3
Interest expense 58.9 40.7
Forecast return on plan assets 0.0 0.0
Past service expense 0.0 0.0
Total 77.8 52.0
The following table shows the change in the present value of the obligations:
EUr million 31.12.2010 31.12.2009
Present value at beginning of year 1,138.8 607.4
Current service expense 18.9 11.3
Interest expense 58.9 40.7
actuarial (gains) / losses without effect on profit and loss 79.5 27.5
Past service expense 0.0 0.0
Pension payments from company assets -68.0 -43.9
Pension payments from plan assets 0.0 0.0
Change in group of consolidated companies 0.0 496.2
reclassifications 9.4 0.0
Other 0.9 -0.4
present value as of the balance sheet date 1,238.4 1,138.8
The performance of plan assets is as follows:
EUr ’000 2010 2009
Fair value at beginning of year 834.3 0.0
Forecast return on plan assets 33.4 0.8
actuarial gains / (losses) 41.8 -0.8
Employer contributions 1,035.6 614.6
salary conversion 492.6 61.1
Pension payments from plan assets 0.0 0.0
Change in group of consolidated companies 0.0 0.0
asset withdrawals / (asset transfers) 0.0 158.5
Other 0.0 0.1
Fair value as of the balance sheet date 2,437.7 834.3
The assets of the Treuhandverein were invested to 100 per cent in a money market fund in 2009. The
assets in the fund consist exclusively of interest-bearing securities with a total or remaining term to maturity
of less than twelve months and within statutory limits, money market instruments with a total
or remaining term to maturity of less than twelve months, as well as cash balances.

Consolidated financial statements
130 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 131
In 2010, the assets in the fund were reallocated to Fidelity Target Funds with target dates between 2015
and 2040. The capital was invested on the basis of the expected retirement dates of EWE’s employees.
The following table shows the change in the carrying amount of the obligation:
EUr million 2010 2009
Carrying amount at beginning of year 1,138.0 607.4
Expense recognised in the income statement 77.8 52.0
Pension payments from company assets and contributions to EWE-Treuhandverein e.V. -69.5 -44.7
actuarial (gains) / losses 79.5 27.5
Change in group of consolidated companies 0.0 496.2
reclassifications 9.4 0.0
Other 0.6 -0.4
Carrying amount at end of year 1,235.8 1,138.0
Total actuarial gains and losses of Euro 79.5 million (previous year: Euro 27.5 million) were recognised
in other comprehensive income.
The pension obligations were calculated using the 2005 G actuarial tables by Klaus Heubeck and based
on the following main actuarial assumptions:
assumptions / parameters (in %) 31.12.2010 31.12.2009
Discount rate 4.75 5.25
Forecast return on plan assets 4.00 4.00
Future pay increases 2.50 2.50
Future pension increases 1.75 1.75
Fluctuation rate 0.00 0.00
Notwithstanding the assumptions mentioned above, the pension obligations calculated as of the current
balance sheet date for swb are based on a salary progression of 2.0 per cent p. a., a pension progression
of 1.0 per cent p. a. (plus a premium of 0.67 per cent of the DBO for expected one-off payments in lieu
of adjustments to the pension, as well as an average fluctuation rate of 1.0 per cent p. a.). Obligations
with historically higher adjustment rates have been measured using the adjustment rates observed in the
past and expected to continue over the long term, including a pension progression of 4.0 per cent p. a.
Since 2006, the present value of defined-benefit obligations, the fair value of the plan assets and
adjustments to the obligations from past experience as the difference between expected and actual
developments have changed as follows:
EUr million 2010 2009 2008 2007 2006
on 31 december
Present value of the defined-benefit obligation 1,238.2 1,138.8 607.4 583.7 661.5
Present value of plan assets 2.4 0.8 0.0 0.0 0.0
underfunding / (overfunding)
adjustments to plan liabilities
1,235.8 1,138.0 607.4 583.7 661.5
based on past experience
adjustments to plan assets
5.6 -55.1 35.3 -6.0 8.1
based on past experience 0.0 0.0 0.0 0.0 0.0
EUr million
The expected pension payments for 2011 amount to Euro 72.1 million.
Increasing or reducing the discount rate by one percentage point would have the following effects:
Change in discount rate in EUr million 2010 2009
Effect on
increase
by 1 %
decrease
by 1 %
Increase
by 1 %
Decrease
by 1 %
present value of obligations
not funded externally -143.2 187.9 -130.3 162.6
current service expense
in the following financial year -3.8 5.5 -3.4 4.5
interest expense on the obligation
in the following financial year 3.8 -5.0 3.0 -4.2
Defined-contribution pension schemes in the EWE Group relate to the statutory retirement pension
insurance. In 2010 employer contributions amounted to Euro 56.3 million (2009: Euro 37.8 million).
Statement of provisions
as of
01.01.2010
Change in
group of
consolidated
companies additions reversals
Other
changes 1
Interest
effects Used
As of
31.12.2010
Provisions for pensions
and similar obligations 1,138.0 0.7 119.1 -4.9 -8.0 58.9 -68.0 1,235.8
Other provisions
Obligations towards staff 58.5 0.7 8.8 -0.3 -13.1 1.1 -8.9 46.8
Obligations from recultivation
of gas caverns 76.6 1.2 -2.9 -2.3 3.3 75.9
Miscellaneous other provisions 136.0 0.2 134.5 -20.0 0.8 1.6 -41.6 211.5
Total 1,409.1 1.6 263.6 -28.1 -22.6 64.9 -118.5 1,570.0
1 Other changes mainly relate to changes without effect on profit or loss.
Provisions relating to personnel expenses include obligations for phased early retirement and anniversaries.

Consolidated financial statements
132 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 133
Recultivation provisions are primarily made for the costs of recultivating natural gas caverns in the
event of closure. The provisions are based on a public law obligation under the Mining Ordinance for
Drilling, Underground Storage and Raw Material Extraction by Means of Drilling in Lower Saxony (BVOT)
and the German Federal Mining Act (BBergG). The amount of the provisions is determined by external
surveys. Provisions for recultivation expenses are disclosed under non-current liabilities as no recultivation
work is expected in the near future. Recultivation provisions are recognised at the amount needed
to settle the obligation, discounted to the balance sheet date. A discount rate of 5.0 per cent was used
in the reporting year. The expense of compounding recultivation obligations is recognised as interest
expense in the income statement.
All provisions for obligations from recultivation of gas caverns are classified as non-current provisions,
because they are currently expected to be utilised in 2032. External reports are ordered on a regular
basis to determine recultivation costs.
Utilisation of the provision is expected to begin in 2014 for the construction of a fly ash storage facility
(still under discussion). The second fly ash storage facility has been filled. The Free and Hanseatic City of
Bremen will set the recultivation schedule. No announcement was made before the end of the financial year.
It is also expected that there will be an obligation to dismantle the Bremen-Hafen power plant in 2050.
Miscellaneous other provisions consist mainly of contingent obligations for pending transactions, process
risks, obligations to acquire assigned amount units, obligations from the surplus revenue absorption for
electricity, invoicing , removal, demolition and document storage obligations, contingent acquisition
price obligations as well as obligations for environmental restoration and restructuring.
24. Bonds
To refinance its acquisition of VNG and swb, EWE AG issued two unsecured bearer bonds on 14 October
2004 for a total of Euro 1,500 million. The first tranche was made up of Euro 1,000 million at an issue
price of 99.326 per cent, maturing on 14 October 2014 and with a fixed coupon of 4.375 per cent. The
second tranche for Euro 500 million matures on 14 October 2019, bears interest at 4.875 per cent and
was issued at 99.791 per cent.
On 16 July 2009, EWE AG issued a further euro bond for Euro 500 million to refinance existing liabilities.
The bond was sold at an issue price of 98.976 per cent; it matures on 16 July 2021 and has a fixed coupon
of 5.250 per cent.
25. Liabilities to banks
EUr million 31.12.2010 31.12.2009
non-current Current Non-current Current
liabilities to banks 708.9 33.5 731.0 36.6
The majority of fixed-interest liabilities to banks of Euro 585.9 million (previous year: Euro 608.8 million)
have an average interest rate of 4.92 to 5.36 per cent (previous year: 5.00 to 5.36 per cent) and the
majority of floating-rate liabilities to banks of Euro 156.5 million (previous year: Euro 158.8 million)
have an average interest rate of 1.07 to 1.64 per cent (previous year: 1.04 to 2.53 per cent). The average
remaining fixed-interest period for the fixed-interest liabilities is 3.91 to 4.54 years (previous year: 5.55
to 8.50 years) and for the floating-rate liabilities 94 days to 7.64 years (previous year: 4.99 to 8.64 years).
26. Trade payables
Trade payables are all due within one year.
27. Other liabilities
EUr million 31.12.2010 31.12.2009
Financial liabilities at fair value
through profit and loss
non-current Current Non-current Current
Derivative financial instruments 44.8 114.7 67.6 288.5
Other liabilities
liabilities towards affiliated companies 10.0 8.6
liabilities towards companies accounted
for under the equity method 7.5 16.0
liabilities towards investee companies 11.9 39.2
Collateral 59.9 59.9
Purchase price obligations 3.1 6.2
sponsorship agreement
with EWE research Institute 27.4 31.4
research and Development 19.6 21.6
accrued interest on bonds 26.9 26.9
liabilities from contract production 4.6
liabilities towards staff 8.0 36.8 6.4 25.3
Miscellaneous other financial liabilities 1 9.6 82.2 12.8 101.1
Financial liabilities 109.4 353.0 139.8 576.3
Own-use electricity trading 14.9 64.8
Tax liabilities 74.3 38.2
Payments received on account 22.1 15.0
Miscellaneous other non-financial liabilities 1 5.4 16.7 3.4 21.1
non-financial liabilities 5.4 128.0 3.4 139.1
Total 114.8 481.0 143.2 715.4
1 Previous year’s figures adjusted

Consolidated financial statements
134 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 135
The liabilities towards affiliated companies relate to non-consolidated shareholdings.
Collateral relates to payments that Bursagaz and Kayserigaz receive from all new customers when the
contract is signed and which are repayable on termination of the contract. The liabilities are classified as
current as customers can terminate the contracts at any time. This collateral cannot be realised otherwise.
28. Deferred taxes
Deferred tax assets of Euro 11.7 million (previous year: Euro 12.5 million) and deferred tax liabilities of Euro
453.4 million (previous year: Euro 474.6 million) primarily result from taxable temporary differences.
Deferred tax assets and liabilities relate to the following items:
EUr million 31.12.2010 31.12.2009
Assets liabilities assets liabilities
Intangible assets 6.1 207.4 7.5 210.0
Property, plant and equipment 2.5 538.7 3.6 528.1
Other assets 2.9 20.1 5.5 10.8
of which derivative financial instruments 18.3 7.0
non-current assets 11.5 766.2 16.6 748.9
Inventories 0.2 30.7 0.2 32.6
receivables 2.6 5.3 2.7 1.2
Others assets 2.2 40.2 1.2 113.3
of which derivative financial instruments 37.5 79.3
Current assets 5.0 76.2 4.1 147.1
Construction subsidies 166.4 172.6
Pension provisions 110.1 6.9 100.2 19.5
Other provisions 40.9 9.3 37.6 16.9
Borrowings 30.3 3.4 23.8 1.6
non-current liabilities 347.7 19.6 334.2 38.0
Construction subsidies and emissions rights 6.6 4.2
Other provisions 8.9 12.3 4.2 19.4
Borrowings 55.3 3.8 127.1 0.4
Current liabilities 70.8 16.1 135.5 19.8
Tax losses carried forward 1.5 1.3
deferred taxes before offsetting 436.5 878.1 491.7 953.8
Offsetting -424.8 -424.8 -479.2 -479.2
deferred taxes after offsetting 11.7 453.4 12.5 474.6
Of the net deferred tax assets, Euro 2.7 million (previous year: Euro 0.8 million) have a term of more
than one year. Net deferred tax liabilities of Euro 17.2 million (previous year: Euro 29.8 million) will be
realised within one year and Euro 436.2 million (previous year: Euro 444.8 million) will be realised
later than twelve months.
Deferred tax assets for tax losses carried forward are recognised to the extent that it is probable that
tax benefits will be realised by future taxable profits. It is sufficiently certain that the benefits from these
tax losses carried forward will be realised.
At the end of the reporting year, the amount of tax loss carry forwards for which no deferred tax assets
were recognised was Euro 2.5 million (previous year: Euro 7.6 million). Of the tax losses carried forward,
Euro 0.3 million will expire within one year and Euro 0.7 million between two and five years. Of the tax
losses carried forward, Euro 1.5 million can be carried forward indefinitely.
No deferred tax assets are recognised for these tax loss carry forwards as it is not probable that the tax
benefits will be realised in the foreseeable future.
Temporary differences for which no deferred tax claims were recognised in the balance sheet amounted
to Euro 1.6 million (previous year: Euro 0.6 million).
EUr million 31.12.2010 31.12.2009
Effective income taxes 44.6 46.2
Tax receivables 69.8 58.5
Tax liabilities -25.3 -12.3
deferred taxes -441.7 -462.1
Deferred tax assets 11.7 12.5
Deferred tax liabilities -453.4 -474.6
-397.1 -415.9
The amount of temporary differences in connection with equity interests in subsidiaries and associated
companies for which in line with IAS 12.39 no deferred tax liabilities were recognised in the reporting
year is Euro 29.0 million (previous year: Euro 35.9 million).
29. Contingent receivables / liabilities and other liabilities
contingent receivables
As of 31 December 2010 there were contingent receivables amounting to Euro 10.3 million (previous year:
Euro 0.0 million).
guarantees and warranties
At the balance sheet date, guarantees and warranties totalled Euro 92.4 million (previous year: Euro 109.4
million), of which Euro 33.8 million (previous year: Euro 34.0 million) were given to creditors of an associated
company.

Consolidated financial statements
136 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 137
obligations to acquire intangible assets and property, plant and equipment
Contractual commitments of Euro 4.0 million (previous year: Euro 7.0 million) relate to the purchase of
intangible assets. Contractual commitments of Euro 245.7 million (previous year: Euro 156.3 million)
relate to property, plant and equipment. These are mainly purchase commitments.
Capital expenditure which has been contractually agreed but not incurred as of the balance sheet date
comes to Euro 75.6 million (previous year: Euro 93.2 million). As of 31 December 2010, down payments
of Euro 10.6 million had been made on these obligations (previous year: Euro 59.5 million).
other contingent liabilities and obligations
An obligation exists to pay an additional purchase price of up to Euro 102.3 million if the public transport
services are spun out of Stadtwerke Bielefeld GmbH or if the City of Bielefeld agrees to assume their
losses on a permanent basis. A related put option of Euro 7.0 million (previous year: Euro 10.4 million)
was recognised under other liabilities.
Additional obligations of Euro 17.4 million (previous year: Euro 17.4 million) to an associated company
resulted from share capital not called up as well as miscellaneous contingent liabilities amounting to
Euro 0.0 million (previous year: Euro 1.7 million).
Long-term, market-standard supply contracts are also in place for the purchase of electricity and gas.
30. Leases
obligations under operating leases
Financial obligations under operating leases relate primarily to real estate, vehicles, a cavern facility
and other property, plant and equipment. The leases have different terms and conditions. The lease
payments for office buildings are regularly adjusted in line with price indices.
The following table shows future accumulated minimum lease payments from uncancellable operating leases:
EUr million 31.12.2010 31.12.2009
Up to one year 19.3 23.5
after between one and five years 60.4 66.1
after more than five years 70.8 30.6
Total 150.5 120.2
Minimum lease payments of Euro 52.9 million and contingent rental payments of Euro 4.1 million were
recognised in profit and loss in the 2010 reporting period.
31. Capital management
Long-term capital management at the EWE Group is based on an analysis of the optimal capital structure
considering both equity and borrowings. Optimising the capital structure means minimising the total
cost of capital and implies a target rating in the A band for the EWE Group.
Shareholders’ equity consists of equity attributable to shareholders of the parent company and minority
interests.
Shareholders’ equity and the balance sheet total have developed as follows:
EUr million 31.12.2010 31.12.2009
Total shareholders' equity 3,286.4 3,409.8
Equity ratio 31.6 % 32.6 %
Balance sheet total 10,394.8 10,453.9
32. Derivative financial instruments and hedge accounting
a) Strategy and goals
The EWE AG Board of Management lays down the basic risk management policy for the EWE Group.
The implementation of this policy is the responsibility of the appropriate departments of the Group.
Financial risks are identified, evaluated and hedged against. The risk management policy is implemented
in line with the guidelines. The prior approval of the Board of Management is required for hedging
strategies which deviate from the guidelines. The Board of Management is also informed on a regular
basis about the extent and total of the risk exposure. Derivative financial instruments are only used for
hedging purposes.
Derivative financial instruments are used to limit the price risks relating to exchange rates, interest rates
and commodities to which the EWE Group is exposed. Only those exchange rate, commodity and interest
rate risks which affect Group cash flow are hedged. These risks are hedged using micro-hedges or portfolio
hedges. The Group always checks whether hedge accounting can be used to reduce earnings volatility.
However, derivatives which do not qualify for hedge accounting (IAS 39.88) or for which hedge accounting
is inappropriate are still considered economic hedges.
The EWE Group uses the following derivative instruments to hedge price risks: electricity futures contracts,
coal swaps, AAU and CER transactions, currency options, currency futures as well as interest rate
swaps, caps and collars. Only business partners with excellent credit ratings are considered.
The effectiveness of the hedging relationship (fair value and cash flow hedges) is checked via an effectiveness
test using the critical term match method and the cumulative dollar offset method. Coal swaps
are reviewed retrospectively using a regression analysis.
The market values of derivative financial instruments are dependent on movements in the underlying
market factors. Individual measurements are made using the market data available on the valuation date.

Consolidated financial statements
138 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 139
b) fair value hedges
Fair value hedges for commodities to hedge against gas price risks resulting from future sales are recognised.
Oil swaps or TTF-based hedges are used as hedging instruments. When using fair value hedges,
both the underlying transaction and the derivative are recognised at fair value through profit and loss
in terms of the hedged risk. Value changes in the underlying transactions are compensated for by valuation
changes in the derivatives. For the fair value of the derivatives, valuation changes totalling Euro
9.4 million (previous year: Euro 8.9 million) were recognised in profit and loss in the reporting year. The
corresponding market value fluctuations of the underlying transactions were recognised for the same
amount in the income statement. The fair values of derivatives used in fair value hedges were made up
of negative market values of Euro 0.8 million (previous year: Euro 2.3 million) and positive market values
of Euro 10.0 million (previous year: Euro 2.1 million).
The following table shows the derivatives in a fair value hedge:
EUr million Nominal volume Fair value
31.12.2010 31.12.2009 31.12.2010 31.12.2009
Commodity derivatives (fair value hedges) 34.9 66.4 9.2 -0.2
c) cash flow hedges
In terms of operating activities, exchange rate risks arise from the invoicing of raw materials supplies in
foreign currencies, as well as firm and planned payments which can no longer be compensated for by
means of operational measures (e. g. price increases). Each exposure is hedged by a minimum of 20 per
cent and a maximum of 80 per cent per currency. In the reporting year, in addition to the exchange rate
exposure from gas supplies to a Group company, price risks from coal procurement in particular were
hedged. Cash flow hedges exist to hedge the risk of invoicing in foreign currencies for supplies of raw
materials. Decisions related to hedging against exchange rate risk are made by the Board of Management
or Managing Director of the subsidiary concerned.
In the reporting year the effective part of foreign currency cash flow hedges came to Euro 7.1 million (previous
year: Eurot 1.7 million) and was recognised in other comprehensive income. Hedging instruments
offset hedged items in full in the reporting year. The basis adjustment came to Euro 4.4 million.
Management of interest expense for the Group is carried out using a combination of fixed and floatingrate
borrowings. The EWE Group aims for a large part of its borrowing to be at fixed interest rates. To
achieve this aim, the Group has taken out interest rate swaps to hedge non-current floating-rate financial
liabilities and minimise its exposure to interest rate risks. The nominal volume is reviewed at regular
intervals. These interest rate swaps hedge the underlying obligation.
In the reporting year the effective part of interest rate cash flow hedges came to Euro -0.1 million
(previous year: Euro 0.1 million) and was recognised in other comprehensive income. The ineffective
part amounted to Euro -0.2 million.
EWE AG is exposed to commodity risks from fluctuations in the price of the commodities electricity, gas
and coal. One method used to hedge these risks is the use of commodity cash flow hedges. At the reporting
date the recognised fair values of derivatives used as cash flow hedges for commodities were made
up of positive market values of Euro 29.2 million (previous year: Euro 8.6 million) and negative market
values of Euro 7.2 million (previous year: Euro 37.8 million). In the reporting year the effective part of
commodity cash flow hedges came to Euro 31.4 million (previous year: Euro 10.1 million) and was recognised
in other comprehensive income. The ineffective part came to Euro -2.4 million. The basis adjustment
totalled Euro 9.3 million.
Derivatives related to cash flow hedges:
EUr million Nominal volume Fair value
31.12.2010 31.12.2009 31.12.2010 31.12.2009
Currency derivatives 167.5 168.4 4.7 -0.8
Interest rate derivatives 30.0 30.0 -2.7 -2.3
Commodity derivatives 174.1 163.9 22.0 -29.2
Total 371.6 362.3 24.0 -32.3
d) other derivatives
The following table shows the derivatives which do not qualify for hedge accounting but are still used to
hedge risk items:
EUr million Nominal volume Fair value
31.12.2010 31.12.2009 31.12.2010 31.12.2009
Currency derivatives 43.8 -0.3 1.0 0.8
Interest rate derivatives 81.8 102.2 -5.2 -4.5
Commodity derivatives
Electricity futures contracts 2,146.2 1,909.0 -15.9 -22.9
Other commodity derivatives 315.0 17.0 12.7 -1.6
Other derivatives 419.7 422.4 -8.8 -17.4
Total 3,006.5 2,450.3 -16.2 -45.6
33. Additional disclosures on financial instruments and risk management
a) disclosures related to financial instrument categories under iAS 39, classes under ifrS 7 and
fair value levels
The following is an overview of EWE AG’s disclosures related to financial instrument categories under
IAS 39, classes under IFRS 7 and fair value levels:

Consolidated financial statements
140 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 141
carrying amounts, basis of recognition and fair values according to measurement categories
EUr million
Measurementcategory
under
Ias 39
Carrying
amount
31.12.2010 bASiS oF RECoGniTion undER iAS 39
amortised
costs
acquisition
costs
Fair value
without effect
on profit
and loss
Fair value
through profit
and loss
Fair value
31.12.2010
Assets
Other non-current assets
loans and receivables lar 65.3 65.3 66.1
available-for-sale financial assets
Financial assets at fair value
through profit and loss
afs 136.2 136.2 136.2
Derivatives outside hedging relationships
(held for trading) FaHfT 33.2 33.2 33.2
Derivatives in a hedging relationship n.a. 18.8 18.8 18.8
Trade receivables lar 944.6 944.6 944.6
Other receivables and assets
Financial assets at fair value
without effect on profit and loss afs 124.3 124.3 124.3
Other financial assets lar 168.1 168.1 168.1
Cash and cash equivalents lar 327.7 327.7 327.7
Financial assets at fair value
through profit and loss (current)
Derivatives outside hedging relationships
(held for trading) FaHfT 96.6 96.6 96.6
Derivatives in a hedging relationship n.a. 27.9 27.9 27.9
Miscellaneous other financial assets FaHfT 3.1 3.1 3.1
Equity and liabilities
Bonds FlaC 1,990.1 1,990.1 2,126.9
liabilities to banks FlaC 742.3 742.3 796.6
Trade payables FlaC 903.1 903.1 903.1
Other liabilities
Financial liabilities at fair value
through profit and loss
FlaC 302.9 302.9 302.9
Derivatives outside hedging relationships
(held for trading) FlHfT 146.0 146.0 146.0
Derivatives in a hedging relationship n.a. 13.5 13.5 13.5
Miscellaneous other financial liabilities FlHfT
of which aggregated by measurement category under
Ias 39:
loans and receivables (lar) 1,505.7 1,505.7 1,506.5
available-for-sale financial assets (afs) 260.5 136.2 124.3 260.5
Financial assets held for trading (FaHfT) 132.9 132.9 132.9
Financial liabilities measured at amortised cost
(FlaC) 3,938.4 3,938.4 4,129.5
Financial liabilities held for trading (FlHfT) 146.0 146.0 146.0
EUr million
Measurementcategory
under
Ias 39
Carrying
amount
31.12.2009 bASiS oF RECoGniTion undER iAS 39
amortised
costs
acquisition
costs
Fair value
through profit
and loss
Fair value
31.12.2009
Assets
Other non-current assets
loans and receivables lar 45.0 45.0 45.4
available-for-sale financial assets
Financial assets at fair value
through profit and loss
afs 162.4 162.4 162.4
Derivatives outside hedging relationships
(held for trading) FaHfT 30.7 30.7 30.7
Derivatives in a hedging relationship n.a. 6.3 6.3 6.3
Trade receivables lar 732.2 732.2 732.2
Other receivables and assets
Financial assets at fair value
without effect on profit and loss afs
Other financial assets lar 163.0 163.0 163.0
Cash and cash equivalents lar 604.5 604.5 604.5
Financial assets at fair value
through profit and loss (current)
Derivatives outside hedging relationships
(held for trading) FaHfT 232.2 232.2 232.2
Derivatives in a hedging relationship n.a. 8.8 8.8 8.8
Miscellaneous other financial assets FaHfT 2.5 2.5 2.5
Equity and liabilities
Bonds FlaC 1,988.9 1,988.9 2,093.2
liabilities to banks FlaC 767.6 767.6 821.0
Trade payables FlaC 690.6 690.6 690.6
Other liabilities
Financial liabilities at fair value
through profit and loss
FlaC 360.0 360.0 360.0
Derivatives outside hedging relationships
(held for trading) FlHfT 308.5 308.5 308.5
Derivatives in a hedging relationship n.a. 47.6 47.6 47.6
Miscellaneous other financial liabilities FlHfT
of which aggregated by measurement category under Ias 39:
loans and receivables (lar) 1,544.7 1,544.7 1,545.1
available-for-sale financial assets (afs) 162.4 162.4 162.4
Financial assets held for trading (FaHfT) 265.4 265.4 265.4
Financial liabilities measured at amortised cost (FlaC) 3,807.1 3,807.1 3,964.8
Financial liabilities held for trading (FlHfT) 308.5 308.5 308.5

Consolidated financial statements
142 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 143
The carrying amounts of other non-current assets are generally equal to fair value. The available-for-sale
financial assets are non-consolidated shareholdings that are not traded on an active market and whose
fair value cannot be reliably determined. These financial instruments are measured at cost.
Trade receivables, other receivables and assets as well as cash and cash equivalents have short residual
maturities. Their carrying amounts on the reporting date are therefore generally equal to fair value. The
maximum default risk is the carrying amount of the assets recognised in the balance sheet.
The EWE Group trades derivative financial instruments with various partners, especially market partners
with sound credit ratings. The derivatives measured using input parameters observable on a market
primarily include interest rate swaps, currency futures and options, coal swaps and CO 2 forwards. The
most common measurement methods include forward price and swap models that calculate present
values. The models include a range of forward rates, e. g. currency spot and futures rates, yield curves
and forward rates for the underlying commodities.
One derivative was measured using input parameters not observable on a market, but based on an options
pricing model. The parameter not observable on a publicly quoted market was the current value of the
option item, which was measured using forecast discounted cash flows and discount rates currently
applicable to items with comparable terms and risk characteristics.
The fair value of publicly listed bonds is equal to the nominal amount multiplied by the quoted price on
the reporting date. As at 31 December 2010 the fair value of the bonds is higher than their carrying amount.
The fair value of liabilities to banks is determined as the present value of debt-related payments based
on the relevant interest rate curve.
Trade payables and other liabilities mostly have short residual maturities and the carrying amounts are
therefore generally equivalent to fair value.
The following table allocates financial instruments measured at fair value to the three levels of the
fair-value hierarchy:
EUr million 31.12.2010
Financial assets held at fair value
level 1 level 2 level 3 Total
available-for-sale financial assets 127.4 127.4
Derivative financial instruments 176.4 176.4
Total 127.4 176.4 303.8
Financial liabilities held at fair value
Derivative financial instruments 150.6 8.8 159.4
EUr million 31.12.2009
Financial assets held at fair value
available-for-sale financial assets
level 1 level 2 level 3 Total
Derivative financial instruments 278.0 278.0
Total 278.0 278.0
Financial liabilities held at fair value
Derivative financial instruments 338.7 17.4 356.1
The levels of the fair-value hierarchy and their application to assets and liabilities are described below:
Level 1: Quoted prices (unadjusted) on active markets for identical assets or liabilities.
Level 2: Information other than quoted market prices that is observable directly (e.g. prices) or
indirectly (e.g. derived from prices).
Level 3: Information on assets or liabilities that is not based on observable market data.
b) development of fair values in level 3
The following table gives an overview of financial instruments allocated to fair value level 3:
EUr million Derivative financial instruments (liabilities)
As of 01.01.2010 17.4
Total income in the income statement -9.1
Currency adjustments 0.5
As of 31.12.2010 8.8
EUr million Derivative financial instruments (liabilities)
As of 01.01.2009 12.8
Change in group of consolidated companies 11.6
Total income in the income statement -6.8
Currency adjustments -0.2
As of 31.12.2009 17.4

Consolidated financial statements
144 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 145
c) net results according to measurement category
The following table shows the net results for each IAS 39 category:
EUr million From interest From subsequent measurement Net result
at fair value
Currency
translation
Impairment
allowance
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
loans and receivables (lar) 22.0 67.1 -1.5 -1.5 -14.8 -5.0 5.7 60.6
available-for-sale financial assets (afs) -7.5 -20.9 -7.5 -20.9
Financial instruments held for trading
(FaHfT and FlHfT) 30.2 -2.5 30.2 -2.5
Financial liabilities measured
at amortised cost (FlaC) -141.5 -141.0 -141.5 -141.0
Total -119.5 -73.9 30.2 -2.5 -1.5 -1.5 -22.3 -25.9 -113.1 -103.8
Interest income and expense on financial instruments is recognised in the item net interest income /
expense. Other components of the net result are recognised in other operating income and expenses.
34. Risk management
a) liquidity risks
Liquidity risk means the risk of a company not being able to meet its financial obligations as necessary.
In order to make sure it remains solvent, the EWE Group obtains the majority of the funds used for
working capital and capital expenditure from the proceeds of operating business and external financing.
The EWE Group continually monitors the risk of a possible cash shortage using liquidity planning. This
takes the maturities of financial investments and financial assets as well as expected cash flows from
operating activities into account.
As part of operating liquidity management, all cash is pooled daily within the EWE Group (cash pooling).
Group companies with excess liquidity are obliged to pool it centrally and provide companies with liquidity
shortfalls with the money they need. EWE AG raises or deposits the money centrally. This enables
liquidity needs and surpluses to be managed for the Group as a whole and for individual Group
companies.
The EWE Group manages its liquidity by maintaining a sufficient supply of cash, cash equivalents and
lines of credit with banks, and by means of the cash inflows from operations. In May 2006 the Group’s
financial flexibility was increased by the arrangement of a syndicated revolving credit facility for Euro 850
million. The line of credit runs for seven years and can be used for working capital. As of 31 December 2010,
EWE AG had drawn down Euro 0.0 million (previous year: Euro 0.0 million) of the facility. As at the balance
sheet date, bilateral credit facilities totalling Euro 368.6 million (previous year: Euro 476.4 million)
were also avail able, of which Euro 40.3 million (previous year: Euro 17.2 million) have been drawn in the
form of guarantees.
The EWE Group had no financial covenants. The approval of the banks is only required for major capital
expenditure or purchases.
The cash held with banks and in money market funds as well as the current and non-current lines of
credit give EWE AG sufficient flexibility to cover the Group’s refinancing needs.
The following overview “Maturities of financial liabilities” shows future repayments on the primary and
derivative financial liabilities.
interest and principal repayments:
EUr million CASH FloWS
31.12.2010
Interest
fixed
< 1 year 1 – 5 years > 5 years
Interest
floating
repayment
Interest
fixed
Interest
floating
repayment
Interest
fixed
Interest
floating
primary financial liabilities:
Bonds 94.4 333.8 1,000.0 255.0 1,000.0
liabilities to banks 29.5 2.2 22.9 95.9 7.0 516.6 17.5 2.1 194.5
Trade payables 902.6
Other financial liabilities 0.6 0.3 226.4 0.3 1.1 48.3 0.2 10.0
derivative financial liabilities:
Currency derivatives 101.2 93.1
Interest rate derivatives 5.8 4.2 4.9 3.9
Electricity derivatives (not own-use) 139.4 14.1
Other commodity derivatives (not own-use)
Other derivatives
12.2 15.6
EUr million CASH FloWS
31.12.2009
Interest
fixed
< 1 year 1 – 5 years > 5 years
Interest
floating
repayment
Interest
fixed
Interest
floating
repayment
Interest
fixed
Interest
floating
primary financial liabilities:
Bonds 94.4 377.5 1,000.0 305.6 1,000.0
liabilities to banks 30.8 2.3 24.7 105.4 7.5 271.0 38.9 2.6 460.9
Trade payables 690.6
Other financial liabilities 1.3 0.3 286.1 2.5 0.3 40.9 0.2 0.2 14.5
derivative financial liabilities:
Currency derivatives 2.1 3.3
Interest rate derivatives 2.6 4.4
Electricity derivatives (not own-use) 229.7 39.4
Other commodity derivatives (not own-use) 43.7 13.5
Other derivatives 10.4 7.0
repayment
repayment

Consolidated financial statements
146 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 147
default risks and credit risks
default risk
Default risk describes the threat of economic loss if a business or trading partner is not able to meet its
contractual obligations. The maximum default risk is the carrying amount of the financial assets recognised
in the balance sheet. In the operating business, trade receivables are monitored continually. Default risk
is accounted for by recognising individual impairment allowances and generalised impairment allowances.
As of the balance sheet date there were no significant agreements which would diminish the maximum
default risk (e. g. by offsetting payables).
Trading transactions can give rise to risks in that the counterparty and trading partner is insolvent or
unable to deliver. The risk can come to bear if the trading partner defaults (e. g. in the case of bankruptcy)
and can consist of:
• Loss of receivables for physical merchandise and financial transactions;
• Repurchase risk for purchase contracts if prices have since risen;
• Non-acceptance risk for sales contracts if prices have since dropped.
Potential default risks are limited, among other things, by means of specific clauses in framework agreements
with trading partners. These framework agreements lay down the general terms for individual
contracts in order to allow them to be carried out efficiently. Together with the joint arrangements for
amending the framework agreement – normally a framework agreement from the European Federation
of Energy Traders (EFET) – they contribute to ensuring that business is orderly and risk-focused. The
framework agreements include clauses on any collateral to be provided or on measures to protect the
parties from losses due to insolvency.
The credit risk associated with energy trading partners is, however, considered to be low as business is
only conducted with trading partners with excellent credit ratings. To determine their credit score, all
trading partners are subject to an internal ranking on a regular basis. After they have been classified in
a rating category, a limit is set for the maximum market value of open positions with this partner. The
internal credit scoring includes both quantitative and qualitative factors. If available, the results of external
rating agencies and providers of commercial information (Standard & Poor’s, Moody’s, Fitch, D & B)
are used wherever possible. Transactions are only permitted with trading partners for whom a euro limit
has been set and who have not reached their limit. The Energy Trading division is obliged to ensure that
the limits are not exceeded. The Risk Controlling team monitors compliance with limits on a regular basis.
credit risk
In connection with the investment of cash and cash equivalents, the EWE Group is exposed to losses
from credit risk if the counterparty does not meet their contractual payment obligations. Cash and
cash equivalents are therefore invested solely with banks as overnight and term deposits and in money
market funds with daily redemption and excellent credit ratings. Risk is also managed by diversifying
across counterparties by means of a limit system.
b) market risks
currencies
Exchange rate risk is the risk of changes in the fair value or future cash flows of a financial instrument
denominated in a foreign currency due to changes in exchange rates.
The Group is mainly exposed to exchange rate risks resulting from trading raw materials, particularly
gas and coal, in foreign currencies. The risk is due to the variability of future cash flows resulting from
volatile exchange rates, in particular EUR / USD and EUR / PLN. The Group forms hedges in line with the
risk guideline to minimise this risk.
The following table shows the sensitivity of the Group result before taxes and of other comprehensive
income (due to changes in the fair value of coal swaps and currency futures) to movements in the exchange
rate for the US dollar that can reasonably be considered possible. This is based on EWE Group’s
assumption that the coal swaps and currency futures used as hedging instruments constitute a highly
effective hedging relationship. All other variables remain constant.
overview of foreign currency risk:
EUr million
Change in exchange
rate UsD
Effect on other
comprehensive income
2010 2009
Coal swaps +10 % -16.5 -16.2
-10 % 16.5 16.2
Currency futures +10 % -18.1 -15.2
-10 % 18.1 15.2
Call-Options +10 % 0.5 1.7
-10 % -1.7
Total +10 % -34.1 -29.7
Total -10 % 34.6 29.7
The exchange rate risk of the coal swaps and currency futures relates to the transactions carried out at
year-end in the course of hedge accounting.
interest
Interest rate risk is the risk of changes in the fair value or future cash flows of a financial instrument
due to changes in market interest rates.
The aim of EWE’s interest rate risk management is to manage and monitor the interest-bearing and interest
rate sensitive assets and liabilities on the balance sheet. The objective is to mitigate the impact
of interest rate fluctuations and risks on the Group’s earnings and assets position. The majority of the
interest rates on the EWE Group’s debt instruments are fixed contractually either directly or indirectly.

Consolidated financial statements
148 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 149
As a result, changes in interest rates only have an appreciable impact on EWE’s net interest income or
expense when it undertakes new financing or intends to make refinancing arrangements.
Interest rate risks for primary financial instruments are assessed using an individual sensitivity analysis.
This method shows the effect, if any, of changes in market interest rates on interest income and expense,
other items of the income statement and on other comprehensive income. The sensitivity analysis for
interest rate risk is based on the following assumptions:
Changes in the market interest rates for fixed-interest primary financial instruments only have an effect
on profit and loss for the period if these are carried at fair value. Fixed-interest financial instruments
carried at amortised cost are not subject to interest rate risk.
Floating-rate debt instruments and interest rate derivatives based on variable interest rates can lead
to earnings volatility.
overview of interest change risk:
EUr million
Interest rate derivatives
Change in
interest rates Effect on income statement
Effect on other
comprehensive income
31.12.2010 31.12.2009 31.12.2010 31.12.2009
Using hedge accounting +100bp 1.0
Using hedge accounting -100bp -1.1
Not using hedge accounting +100bp 2.2
Not using hedge accounting -100bp -2.6
Floating-rate liabilities
to banks +100bp -1.6 -1.6
to banks -100bp 1.6 1.6
Total +100bp 0.6 -1.6 1.0 0.0
Total -100bp -1.0 1.6 -1.1 0.0
other price risks
Other price risks are the risks of changes in the fair value or future cash flows of a financial instrument
due to market risks other than those previously mentioned. For the EWE Group this concerns price risks
for commodities.
market risks in electricity trading
To measure, manage and limit the market price risks which affect the whole energy trading portfolio, a
dynamic loss limit is used to limit possible losses from open items during the planning period. The amount
of the limit is determined for each supply year and the Risk Controlling team monitors compliance on
a regular basis.
Volume limits are also used to limit risk. These guarantee that the spread is always sold on the generation
side, and that the company’s marketing and sales strategy (generation) and supply strategy (sales)
is adhered to. Special limit increases are arranged when necessary.
As the mark-to-market procedure used in connection with the dynamic loss limit does not supply information
on the risk of future market price movements, sensitivity analyses in the form of scenarios
and stress testing are used as necessary.
Although scenarios and stress tests can illustrate the effects of potential future price movements on
the value of the current portfolio, they are only used for individual analyses as the underlying assumptions
cannot be derived in a standardised way.
In order to assess portfolio risk based on realistic future fluctuations in market prices, a risk value is
calculated using a value at risk approach (VaR). A Monte Carlo simulation is performed with a 95 per
cent probability range and a holding period of five days.
The following table shows the value at risk figures for three or four successive years as well as total
value at risk. The figure for total value at risk is not equal to the sum of the individual value at risk figures
due to the effects of correlation.
Value at risk
EUr million 2010 2009
Delivery period
2010 1.2
2011 4.4 0.1
2012 0.1 0.1
2013 0.0 0.0
Total 4.5 1.2
market risks in gas trading
In contrast to the gas supply contracts with end customers which are based on the oil price, supply
contracts with end customers which have a fixed gas price are subject to a market risk. To minimise
this risk, the Energy Trading division concludes futures contracts in the form of oil swaps or TTF-based
hedges, taking into account the individual terms of supply.
coal hedges / co 2 certificates
In terms of commodities, the most significant market price risks result from changes in the price of
coal and CO 2 certificates.
coal hedging
The following table shows the sensitivity of shareholders’ equity to changes in the coal price (due to
changes in the fair value of coal swaps) that can reasonably be considered possible, as quoted in US
dollars on the API-2 index. This is based on the EWE Group’s assumption that the coal swaps used as
hedging instruments constitute a highly effective hedging relationship. Hedging transactions are in
place for coal deliveries up to 2014, meaning that different delivery prices are possible depending on
the settlement date. The sensitivity analysis assumes an even rise in coal prices across all delivery dates;
the effects were translated from US dollars into euros at each reporting date.

Consolidated financial statements
150 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 151
overview of market price risk for coal:
EUr million
Price developments in
the aPI-2 index / EUr
Effect on other
comprehensive income
2010 2009
Coal swaps +10 % 16.9 12.6
-10 % -16.9 -12.6
co 2 certificate hedging
There is a current deficit of emissions certificates due to organisational inadequacies. These inadequacies
are due to electricity and heat generation forecasts and the underallocation of CO 2 certificates by the
German Emissions Trading Authority (DEHSt). As a result, EWE will have for the second trading period
an open certificate position in every year or over the entirety of NAP II, which it will close on an ongoing
basis based on actual electricity sales volumes.
The electricity and heat units sold, for which emissions rights are not allocated, are hedged through certificate
purchases. EUAs (EU allowances) and CERs (Certified Emissions Reductions) are used as hedges.
Hedging transactions are in place for CO 2 certificates up to 2012, meaning that different delivery prices
are possible depending on the settlement date. A consistent, steady rise in the price of CO 2 over all supply
periods was assumed for the sensitivity analysis.
overview of market price risk for co 2 certificates:
EUr million
Price developments in
the aPI-2 index / EUr
Effect on other
comprehensive income
2010 2009
CO 2 certificates futures transactions +10 % 0.8 1.6
-10 % -0.8 -1.6
35. Segment reporting
Management has based its definitions of the company’s business segments (business areas) on the reports
that are regularly reviewed by EWE’s chief operating decision makers. The head operating decision
maker is responsible for allocating resources to business segments and assessing their performance.
The segments in the EWE Group are determined in accordance with internal reporting approaches. This
is referred to as the “management approach”. A change to the Group’s internal organisational structure in
the 2010 financial year led to a change in the composition of the Group’s reportable business areas. The new
structure puts the company in a perfect position to meet the challenges faced by multi-service companies.
EWE’s new business areas are as follows:
• EWE Energy
• swb
• New Markets and ICT
• Corporate Centre / Consolidation
The reportable EWE Energy business area combines electricity and natural gas sales and trading, natural
gas production, procurement and storage, electricity generation from renewable sources and other energyrelated
services marketed under the EWE brand. The EWE NETZ business unit has been allocated to the
EWE Energy business area. This unit plans, builds and operates electricity, natural gas and telecommunications
networks in the Ems / Weser / Elbe and Brandenburg regions. All the activities for providing drinking
water to Bremervörde, Cuxhaven, Oldenburg, Scheeßel and Varel are also pooled in this business area.
The reportable swb business area consists of the subgroup swb. The activities of swb AG and its subsidiaries
are focused on providing energy and water services, in particular the supply of energy and water to
Bremen, Bremerhaven and the surrounding areas, as well as on electricity generation and waste disposal.
All other business areas have been combined in accordance with IFRS 8.16 and disclosed as the New
Markets and ICT business area. This includes EWE’s activities in Poland and Turkey as well as the information
technology and telecommunications business.
The Corporate Centre / Consolidation business area is responsible for the head office functions of EWE AG
as a holding company as well as EWE AG’s direct shareholdings and Group-wide consolidation. The shares
held in VNG are reported in this business area.
The figures for the previous year were not adjusted. In accordance with IFRS 8.30, segment information
for the current period is disclosed on both the old basis and the new basis of segmentation.
For operational reasons, the Group was split into five business areas in the previous year. Based on their
different products and services, the Energy, Network and ICT business areas have been identified as business
areas within the meaning of IFRS 8. As a recently acquired company, swb is considered a separate
business area. The Corporate Centre is considered separately based on its services for the Group and its
head office functions. These business areas form the basis for the primary segment reporting format.
Intra-Group sales represents sales between segments. These sales are invoiced at arm’s length terms.
The total of external and internal sales is the segment sales.

Consolidated financial statements
152 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 153
The segment result corresponds to earnings before interest and taxes (EBIT) for the year.
Depreciation, amortisation and impairment relates to intangible assets and property, plant and equipment.
Capital expenditure relates to intangible assets and property, plant and equipment (including capitalisation
from recognised provisions) and financial investments.
The following table shows external sales by product and service:
EUr million
EWE Energy
2010
swb
2010
new Markets
and iCT
2010
Corporate Centre /
Consolidation
2010
Consolidated
2010
Electricity 3,397.6 581.5 0.0 0.0 3,979.1
Gas 1,437.1 296.6 341.6 0.0 2,075.3
ICT 0.0 0.0 506.0 0.0 506.0
Other 158.9 237.0 12.2 1.1 409.2
External sales 4,993.6 1,115.1 859.8 1.1 6,969.6
The following table shows external sales, assets and capital expenditure by region:
EUr million
Germany
2010
Germany
2009
Abroad
2010
abroad
2009
EWE Group
2010
EWE Group
2009
External sales 6,615.7 5,523.5 353.9 274.9 6,969.6 5,798.4
segment assets 8,757.7 8,892.6 759.5 830.2 9,517.2 9,722.8
Capital expenditure 619.8 677.8 11.8 21.1 631.6 698.8
Due to the large number of customers and the wide range of business activities there are no customers
whose volume of business in relation to the entire volume of business of the EWE Group is significant.
Segment report 31.12.2010 1
EUr million EWE Energy swb
New Markets
and ICT
Corporate
Centre /
Consolidation Consolidated
31.12.2010 31.12.2010 31.12.2010 31.12.2010 31.12.2010
SAlES
External sales 4,993.5 1,115.2 859.8 1.1 6,969.6
Inter-segment sales 133.4 29.6 119.2 -282.2 0.0
Total sales 5,126.9 1,144.8 979.0 -281.1 6,969.6
RESulT
segment earnings (EBIT) 210.6 109.4 -155.2 0.1 164.9
Interest income 22.0
Interest expense -206.4
profit before tax EbT for the period -19.5
Income taxes -31.2
Result for the period -50.7
oTHER inFoRMATion
Segment assets 4,213.4 2,665.7 1,267.3 1,362.0 9,508.4
Financial investments and securities
Interests in associated companies
302.1
accounted for under the equity method 136.8 329.5 36.4 502.7
Income tax receivables and deferred tax assets 81.6
Consolidated assets 10,394.8
Segment liabilities 2,845.2 1,215.8 545.1 -709.5 3,896.6
Debt instruments (bonds and liabilities to banks) 2,732.5
Deferred taxes, provisions for taxes
and outstanding income taxes 479.3
Consolidated liabilities 7,108.4
Capital expenditure 370.4 129.9 77.2 54.1 631.6
other operating income 416.8 51.3 30.6 -223.9 -274.8
Cost of materials and services -4,301.8 -713.9 -625.0 171.9 -5,468.8
personnel expenses -182.0 -182.4 -182.4 -30.8 -577.6
depreciation and amortisation -199.9 -103.8 -98.5 -17.1 -419.3
impairment -14.1 -153.2 -167.3
other operating expenses -704.6 -130.7 -120.3 319.3 -636.3
Result of equity investments -3.2 3.3 0.5 52.8 53.4
Result of equity investments
in associated companies 0.2 25.4 1.1 26.7
1 Figures for the previous year are not available as a result of the new segment structure.

Consolidated financial statements
154 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 155
2010 segment reporting
EUr million
Corporate
Centre
2010
Corporate
Centre
2009
Energy
2010
Energy
2009
network
2010
SAlES
External sales 1.1 1.6 3,419.9 4,039.1 1,927.4 966.5 1,115.2 298.7 506.0 492.5 6,969.6 5,798.4
Inter-segment sales 5.4 5.5 961.8 130.1 46.5 820.3 29.6 9.9 119.2 110.6 -1,162.5 -1,076.4
Total sales 6.5 7.1 4,381.7 4,169.2 1,973.9 1,786.8 1,144.8 308.6 625.2 603.1 -1,162.5 -1,076.4 6,969.6 5,798.4
RESulT
segment earnings (EBIT) 166.2 361.8 -185.2 106.1 254.1 179.4 109.4 49.1 -2.2 18.6 -177.4 -301.0 164.9 414.0
Interest income 22.0 67.1
Interest expense -206.4 -187.1
Earnings before tax (EbT) for the period -19.5 294.0
Income taxes -31.2 -94.6
Result for the period -50.7 199.4
oTHER inFoRMATion
Segment assets2 2,174.9 2,674.6 2,685.8 2,504.3 2,063.3 2,343.2 2,665.7 2,711.0 507.9 538.5 -589.2 -1,058.3 9,508.4 9,713.3
Financial investments and securities
Interests in associated companies
302.1 172.3
accounted for under the equity method 136.2 139.1 0.6 0.7 329.5 322.2 36.4 35.4 502.7 497.4
Income tax receivables and deferred tax assets 2 81.6 71.0
Consolidated assets 10,394.8 10,454.0
Segment liabilities 556.3 650.7 1,704.5 2,180.4 1,153.9 1,122.5 1,215.8 1,324.6 306.0 309.3 -1,039.9 -1,787.6 3,896.6 3,799.9
Debt instruments (bonds and liabilities to banks) 2,732.5 2,756.5
Deferred taxes, provisions for taxes
and outstanding income taxes 479.3 487.7
Consolidated liabilities 7,108.4 7,044.1
Capital expenditure 883.6 1,372.7 225.1 283.4 157.0 197.3 129.9 34.1 65.4 67.7 -829.4 -1,256.4 631.6 698.8
other operating income 298.9 241.7 488.4 61.6 17.7 24.0 51.3 20.9 16.4 11.1 -597.9 -247.3 274.8 112.0
Cost of materials and services -11.2 -11.9 -4,199.8 -3,724.0 -1,256.2 -1,168.6 -713.9 -184.5 -314.3 -279.2 1,026.7 932.5 -5,468.7 -4,435.7
personnel expenses -30.8 -41.5 -76.4 -48.0 -115.4 -109.9 -182.4 -47.2 -172.6 -160.1 -577.6 -406.7
depreciation and amortisation -17.2 -26.1 -91.7 -69.3 -132.7 -127.3 -103.8 -24.9 -74.0 -74.4 0.1 -0.3 -419.3 -322.3
impairment -156.8 -87.3 0.4 -10.5 -2.7 -167.3 -89.6
other operating expenses -299.9 -242.3 -587.1 -199.5 -243.3 -255.1 -130.7 -38.0 -86.8 -93.4 711.5 375.1 -636.3 -453.2
Result of equity investments 218.8 297.5 -3.3 -5.3 3.3 0.9 0.5 -0.6 -165.9 -300.7 53.4 -8.2
Result of equity investments in associated companies 135.5 0.3 5.8 -0.1 0.7 25.4 10.7 1.1 0.8 26.7 153.5
1 Consolidated in full for the first time from 1 October 2009
2 Previous year’s figures adjusted
Network
2009
swb
2010
swb 1
2009
iCT
2010
ICT
2009
Eliminations
2010
Eliminations
2009
Consolidated
2010
Consolidated
2009

Consolidated financial statements
156 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 157
36. Cash flow statement
The cash flow statement shows the flow of funds from operating activities, investing activities and
financing activities.
Cash and cash equivalents consist of the balance sheet item cash and cash equivalents, amounting
to Euro 327.7 million (previous year: Euro 604.5 million), and cash pool receivables of Euro 1.2 million
(previous year: Euro 0.4 million). The former consist of cash in hand and bank balances.
To determine cash flow from operating activities, the additions to and reversals of provisions are presented
as non-cash changes in provisions and use of provisions is shown in changes in liabilities and
other components of equity and liabilities.
Cash flow from financing activities includes profit distributions and dividends of Euro 88.0 million (previous
year: Euro 65.0 million) to EWE shareholders and Euro 0.1 million (previous year: Euro 3.8 million)
to minority shareholders.
There were no payments made for the acquisition of consolidated companies in the 2010 financial year.
Payments made for the acquisition of consolidated companies in financial year 2009 relate to the purchase
of shares in swb, EWE Doğalgaz and osnatel.
In the financial year 2009 a total of Euro 743.1 million was spent on acquiring shares in fully consolidated
subsidiaries. This was largely made up of the purchase prices for swb (Euro 698.4 million, including
interest on the purchase price of Euro 18.4 million), osnatel (Euro 24.7 million) and EWE Doğalgaz
(Euro 30.0 million), after deduction of Euro 10.6 million in cash balances acquired. Of the total cash
acquired with the purchases, Euro 9.5 million came from swb and Euro 1.1 million from EWE Doğalgaz.
The non-cash capital expenditure consists essentially of Euro 0.4 million (previous year: Euro 2.2 million)
for the capitalisation of recultivation provisions and removal obligations. An additional Euro 8.0 million
went towards purchasing the remaining 51 per cent of the shares in swb in the previous year.
As in the previous year, cash and cash equivalents were not subject to any restrictions on use as of
31 December 2010.
37. Information on easements
A number of easements, or agreements on the use of land for electricity, natural gas and water mains,
exist between companies in the EWE Group and the local authorities in EWE’s supply area.
These easements give the EWE Group the right to use public rights of way in the area covered by the
agreement to install, operate and maintain facilities and equipment for directly providing end-users
with electricity, natural gas and water.
A concession fee is payable to the local authorities for the use of the public rights of way.
The agreements generally run for 20 years. If the easements are not renewed, there is a statutory
obligation to surrender the local distribution facilities to the new energy supplier against payment of
reasonable compensation to the EWE Group.
38. Significant shareholdings
Shareholdings as of 31.12.2010
in EUr ’000
Name and registered office of the company
Equity interest
in %
shareholders’
equity
Net profit /
loss for the
period
Affiliated companies
Consolidated:
aOV IT.services GmbH, Gütersloh 50.07 1 6,159 334 4
BCC Business Communication Company GmbH, Brunswick 100.00 1 5,274 2 4
Bremer Kommunikationstechnik GmbH, Bremen 100.00 1 14,914 1,051 4
BTC Business Technology Consulting aG, Oldenburg 100.00 13,049 2, 4
BTC IT services GmbH, Oldenburg
Bursagaz Bursa Şehiriçi Doğalgaz Dağıtım Ticaret ve Taahhüt a,Ş.,
100.00 1 1,463 2, 4
Bursa, Turkey 80.00 1 61,003 16,977 4
EWE Doğalgaz sanayi ve Ticaret a,Ş., Istanbul, Turkey 100.00 5 4,932 714 4
EWE ENErGIE aG, Oldenburg 100.00 639,440 2, 4
EWE energia sp. z o. o., Międzyrzecz, Poland 99.98 1 46,193 -414 3
EWE ENErjI aNONIM ŞIrKETI (a,Ş.), Istanbul, Turkey 100.00 6 499,035 -184 4
EWE IMMOBIlIEN GmbH, Oldenburg 100.00 25 2, 4
EWE NETz GmbH, Oldenburg 100.00 1 251,357 2, 4
EWE Polska sp. z o.o., Poznań, Poland 100.00 102,104 -1,578 3
EWE TEl GmbH, Oldenburg 100.00 95,907 2, 4
EWE WassEr GmbH, Cuxhaven 100.00 1 216 2, 4
hmmh multimediahaus aG, Bremen
Kayseri Doğalgaz Dağıtım Pazarlama ve Ticaret a,Ş.,
100.00 1 4,237 1,089 4
Kayseri, Turkey 80.00 1 7,183 958 4
nordcom Niedersachsen GmbH, Oldenburg 100.00 1 27 2, 4
Offshore Windpark rIFFGaT GmbH & Co. KG, Oldenburg
PrO CONsUlT Management- und systemberatung GmbH,
98.08 7 70,734 -373 4
Bad Homburg 100.00 1 542 439 4
riffgat Beteiligungs GmbH & Co. KG, Oldenburg 100.00 1 21,903 -11 4
swb aG, Bremen 100.00 1 393,562 51,209 4
swb Beleuchtung GmbH, Bremen 100.00 1 250 782 4
swb Bremerhaven GmbH, Bremerhaven 100.00 1 31,666 6,899 4
swb CrEa GmbH, Bremerhaven 100.00 1 77 -709 4
swb Entsorgung GmbH, Bremen 100.00 1 28,135 1,425 4
swb Erzeugung GmbH & Co. KG, Bremen 100.00 1 56,188 -2,427 4
swb Gasportfoliomanagement GmbH, Bremen 100.00 9 25 -177 4
swb Messung und abrechnung GmbH, Bremen 100.00 1 517 2,069 4
swb Netze Bremerhaven GmbH & Co. KG, Bremerhaven 100.00 1 31,611 5,813 4
swb Netze GmbH & Co. KG, Bremen 100.00 1 212,487 35,842 4
swb services GmbH & Co. KG, Bremen 100.00 1 5,181 278 4
swb Vertrieb Bremen GmbH, Bremen 100.00 1 7,248 15,726 4
swb Vertrieb Bremerhaven GmbH & Co. KG, Bremerhaven 100.00 1 500 2,009 4
swb Windpark am zolltor GmbH & Co. KG, Bremerhaven 100.00 1 1,959 -41 3
swb Windpark Industriehäfen GmbH & Co. KG, Bremerhaven 100.00 1 1,507 -92 3
Windfarm Märkisch linden GmbH & Co. KG, Kränzlin 100.00 1 12,872 -867 4

Consolidated financial statements
158 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 159
in EUr ’000
Name and registered office of the company
Equity interest
in %
shareholders’
equity
Net profit /
loss for the
period
other equity investments:
BIBEr GmbH - Bildung, Betreuung, Erziehung, Oldenburg 100.00 73 4
E & D Energie- und Dienstleistungs GmbH & Co. KG, Cologne 84.76 29,544 -200 3
ENrO ludwigsfelde Energie GmbH, ludwigsfelde 100.00 1 6,383 312 3
Entwässerungsgesellschaft Cuxhaven mbH, Cuxhaven 100.00 1 2,747 1,310 3
EWE Biogas GmbH & Co. KG, Wittmund 100.00 1 880 167 3
EWE Urbanisation Dienstleistungs GmbH (UDG), Bremervörde 100.00 2,267 2, 4
NaturWatt GmbH, Oldenburg 90.00 1 1,311 108 3
PBB GmbH, Oldenburg 100.00 1 5,639 -742 3
sOCON sonar Control Kavernenvermessung GmbH, Giesen 62.00 1 5,239 2,313 3
TEWE Energieversorgungsgesellschaft mbH Erkner, Erkner 100.00 1 4,321 309 3
Associated companies
Consolidated:
aequamus GmbH, Bremen
DOTI Deutsche Offshore-Testfeld- und Infrastruktur-GmbH & Co. KG,
33.33 1 1,711 1,165 4
Oldenburg 47.50 1 253,905 2,044 3
hanseWasser Bremen GmbH, Bremen 38.20 1 79,605 2,551 4
Hansewasser Ver- und Entsorgungs-GmbH, Bremen 51.00 1 45,463 14,019 4
htp GmbH. Hanover
MVr Müllverwertung rugenberger Damm GmbH & Co. KG,
50.00 18,504 2,826 3
Hamburg 20.00 1 31,760 16,421 4
stadtwerke Bielefeld GmbH, Bielefeld 49.90 1 257,912 29,765 4
swb Weserwind GmbH & Co. KG, Bremen 50.00 1 887 279 4
Weserkraftwerk Bremen GmbH & Co. KG, Bremen 50.00 1 5,405 -1,291 4
other equity investments:
Gasversorgung angermünde GmbH, angermünde 49.00 1 1,314 426 3
stadtwerke ludwigsfelde GmbH, ludwigsfelde 20.00 1 8,588 2,073 3
stadtwerke strausberg GmbH, strausberg 38.38 1 11,736 1,204 3
städtische Betriebswerke luckenwalde GmbH, luckenwalde 20.00 1 8,325 1,974 3
Verkehr und Wasser GmbH, Oldenburg 26.00 8,000 -1,058 3
VNG - Verbundnetz Gas aG, leipzig 47.90 8 780,067 169,859 3, 10
1 Indirect shareholdings
2 Control and / or profit transfer agreements exist with this company.
3 Figures for equity and net profit / loss are from 2009.
4 Figures for equity and net profit / loss are from 2010.
5 99.97 per cent of the shares are held indirectly.
6 0.01 per cent of the shares are held indirectly.
7 28.5 per cent of the shares are held indirectly.
8 Shares are held for sale and recognised under current assets.
9 50.0 per cent of the shares are held indirectly.
10 Reclassified in the previous year to non-current assets held for sale
39. Related party disclosures
Transactions with companies included in the consolidated financial statements are eliminated as part
of consolidation. The related parties of the EWE Group include the shareholders of EWE AG, non-consolidated
affiliated companies and the associated companies accounted for under the equity method,
as well as the members of the Board of Management and Supervisory Board of EWE AG.
Primarily financial relationships and relationships for commercial services exist with the group of shareholders.
The capital increase took place when EnBW became a shareholder of EWE AG (Notes 10, 21).
The relations with the group of associated companies accounted for under the equity method and
VNG are primarily financial and for supplies and services relating to natural gas. All transactions are
concluded on standard market terms.
The following table shows the transactions with related parties:
Shareholders of EWE Ag
EUr million 2010 2009
Capital increase 2.4 1,316.5
Financing 41.1
receivables 5.3
liabilities 4.1
Associated companies accounted for under the equity method and Vng
EUr million 2010 2009
services rendered 9.1 4.9
Purchase of goods 3.5 3.0
sale of goods 24.5 13.6
Energy procured 140.3 195.9
Energy sold 17.0
services purchased 6.1 2.0
Financing 0.4 0.4
receivables 43.4 23.8
liabilities 1 14.1 49.2
1 Of which to VNG (IFRS 5) Euro 6.6 million (previous year: Euro 33.2 million)
non-consolidated affiliated companies
EUr million 2010 2009
loans 37.1 8.8
Trade receivables 67.6 71.9
Cash pool receivables 1.3 0.4
Trade payables 2.6 3.6
Cash pool payables 7.5 4.9
Other liabilities 0.2 0.1

Consolidated financial statements
160 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 161
The members of Ems-Weser-Elbe Versorgungs- und Entsorgungsverband are the local authorities and
municipalities in our supply area between the rivers Ems, Weser and Elbe. They are supplied with electricity,
gas, and telecommunications and information services on standard market terms.
The EWE Group concluded no significant transactions with related individuals. The supply of electricity
and natural gas and telecommunications services to related parties takes place on arm’s length terms.
Information on the Boards of EWE AG
Supervisory board
Günther Boekhoff Chairman
Honorary Mayor of the town of Leer, Leer
Rainer Janßen First Deputy Chairman
Technical Supervisor of EWE NETZ GmbH, Varel
Hans-Peter Villis Second Deputy Chairman
Chairman of the Board of Management of EnBW AG, Castrop-Rauxel
Martin Döscher Third Deputy Chairman
Honorary District Administrator of Cuxhaven, Köhlen
Hans Eveslage Fourth Deputy Chairman
District Administrator of Cloppenburg, Barßel
Wolfgang Behnke Systems Integrator of EWE AG, Osterholz-Scharmbeck
Hermann Bröring District Administrator of Emsland, Lingen
Claus Christ Technical Supervisor of EWE NETZ GmbH, Remels
Karl-Heinz Funke Minister (retired), Varel, until 30 April 2010
Dr. Hans Michael Gaul Düsseldorf
Carsten Hahn Administrator, EWE NETZ GmbH, Osterholz-Scharmbeck
Gregor Heller Senior Trades Consultant of EWE AG, Haselünne
Dr. Stephan-Andreas Kaulvers Chief Executive Officer of Bremer Landesbank, Bremen
Aloys Kiepe ver.di District Trade Secretary, Emden
Sigrid Leidereiter ver.di District Trade Secretary, Bremen
Immo Schlepper Regional Department Director of ver.di,
Lower Saxony-Bremen, Oldenburg
Ulrike Schlieper Party Chairwoman on the Friesland District Council, Sande,
since 1 May 2010
Alwin Schlörmann Regional Director, EWE AG, Bad Zwischenahn
Prof. Dr. Gerd Schwandner Mayor of the City of Oldenburg, Oldenburg
Dierk Schwarting Technical Supervisor of EWE NETZ GmbH, Ganderkesee
Dr. Hans-Josef Zimmer Fully Authorised Representative of EnBW AG,
Steinfeld (Rhineland-Palatinate)
board of management
Dr. Werner Brinker Chief Executive Officer of EWE AG, Rastede
Michael Wagener Deputy Chief Executive Officer of EWE AG, Rastede
Dr. Willem Schoeber Member of the Board of Management of EWE AG, Bremen,
from 1 August 2010
Heiko Harms Member of the Board of Management of EWE AG, Rastede,
until 30 November 2010
Dr. Thomas Neuber Member of the Board of Management of EWE AG, Oldenburg,
until 30 November 2010
Remuneration paid to the members of the Boards of Management of EWE AG, EWE ENERGIE AG, swb AG
and of the boards and committees of subsidiaries came to Euro 6.4 million in the financial year 2010
(previous year: Euro 3.4 million). The members of the Supervisory Board received remuneration of
Euro 0.5 million (previous year: Euro 0.5 million).
Provisions totalling Euro 8.3 million (previous year: Euro 9.1 million) were made for pension obligations
to former members of the Board of Management and their surviving dependents. Total payments of
Euro 0.8 million (previous year: Euro 0.8 million) were made in the reporting period.
40. Auditors’ fees and services provided
Companies consolidated in the EWE Group purchased the following services from the auditors of the
consolidated financial statements, PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
as well as the international PWC-Network:
EUr million 2010 2009
audit of annual financial statements 1.7 1.3
Other audit services 0.1 0.6
Tax advisory services 0.2 0.1
Other services 3.4 3.4
Total 5.4 5.4

Consolidated financial statements
162 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS NOTES CONFIRMATION BY THE LEGAL REPRESENTATIVES AUDITORS’ REPORT 163
41. Use of Section 264 para. 3 of the German Commercial Code (HGB)
The following subsidiaries made use of the exemption under Section 264 para. 3 of the German
Commercial Code (HGB) in financial year 2010:
• BTC Business Technology Consulting AG, Oldenburg
• BTC IT Services GmbH, Oldenburg
• EWE TEL GmbH, Oldenburg
• EWE IMMOBILIEN GmbH, Oldenburg
• EWE WASSER GmbH, Cuxhaven
42. Cessation of the declaration of conformity with the German Corporate
Governance Code pursuant to section 161 of the German Stock Corporation Act
Despite being an unlisted company, EWE has voluntarily issued the declaration of conformity pursuant
to section 161 of the German Stock Corporation Act and detailed to what extent the company complies
with the recommendations of the German Corporate Governance Code (DCGK) in recent years.
Exceptions based on the “comply or explain” principle generally resulted from the fact that EWE only
has three shareholders. This shareholder structure allows shareholders to be closely, directly, and continuously
involved in all matters of relevance to the company. For this reason, the Board of Management
and Supervisory Board resolved that EWE will no longer issue a declaration of conformity with DCGK
from the financial year 2010 onwards.
43. Group situation report
EWE AG’s consolidated financial statements are incorporated into the consolidated financial statements
of EWE-Verband GmbH.
44. Events after the balance sheet date
Apart from the proposal for the appropriation of profit (Note 21) there were no significant events after
the balance sheet date.
Oldenburg, Germany, 9 February 2011
Board of Management
Dr. Werner Brinker Michael Wagener Dr. Willem Schoeber
Confirmation by the legal
representatives
We confirm that – to the best of our knowledge and in accordance with the applicable accounting
standards – the consolidated financial statements give a true and fair view of the assets, financial and
earnings position of the Group and that the Group management report presents the course of business,
earnings and the Group’s situation in a true and fair way and that the main risks and opportunities of
the Group’s expected future development are described.
Oldenburg, Germany, 9 February 2011
Board of Management
Dr. Werner Brinker Michael Wagener Dr. Willem Schoeber

164 EWE ANNUAL REPORT 2010 AUDITORS’ REPORT CONSOLIDATED FINANCIAL STATEMENTS OF THE EWE AG 165
Auditors’ report
We have audited the consolidated financial statements of EWE Aktiengesellschaft, Oldenburg – consisting
of the balance sheet, income statement, statement of comprehensive income, statement of changes
in shareholders’ equity, cash flow statement, and the notes to the consolidated financial statements –
and the Group management report, which is combined with the management report for the company,
for the financial year from 1 January to 31 December 2010. The preparation of the consolidated financial
statements and the combined management report in accordance with IFRS as applied in the EU and also
with the provisions of Section 315a para. 1 of the German Commercial Code (HGB) is the responsibility
of the company’s Board of Management. Our responsibility is to express an opinion on the consolidated
financial statements and on the combined management report on the basis of our audit.
We conducted our audit of the consolidated financial statements in accordance with Section 317 of the
German Commercial Code (HGB) and German generally accepted standards for the audit of financial
statements as determined by the German Institute of Auditors (Institut der Wirtschaftsprüfer, IDW).
Those standards require that we plan and conduct the audit such that misstatements and irregularities
materially affecting the presentation of the net assets, financial position and result of operations in the
consolidated financial statements, drawn up in accordance with accepted accounting principles, and in
the combined management report are detected with reasonable assurance. Knowledge of the business
activities and the economic and legal environment of the Group and of expectations of possible misstatements
are taken into account when determining audit procedures. The effectiveness of the accountingbased
internal control system and the evidence provided for the disclosures in the consolidated financial
statements and the combined management report are assessed principally on the basis of spot checks
within the framework of the audit. The audit includes an assessment of the financial statements of the
companies included in the consolidated financial statements, of consolidation methods, of the accounting
principles applied and of significant estimates made by the company’s Board of Management as well as
an evaluation of the overall presentation of the consolidated financial statements and the combined
management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not given rise to any objections.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS
as applicable in the EU and with Section 315a para. 1 of the German Commercial Code (HGB) and give a
true and fair view of the net assets, financial and earnings position of the Group in accordance with these
regulations. The combined management report is in accordance with the consolidated financial statements
and gives a fair view of the Group’s situation and of the risks and rewards of future development.
Oldenburg, 10 February 2011
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Dr. Gerhard Rolfes ppa. Carsten Engelhardt
Auditor Auditor
Financial statements
of the EWE AG 2010
173 financial statements of the EWE Ag
174 balance Sheet for EWE Ag
175 income statement for EWE Ag

166 EWE ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL STATEMENTS OF THE EWE AG
167
Balance Sheet for EWE AG, Oldenburg
as of 31 December 2010
Assets
EUr million 31.12.2010 31.12.2009
Fixed assets
Intangible assets 6.2 27.7
Property, plant and equipment 276.5 893.4
Financial investments 2,891.9 2,742.8
3,174.6 3,663.9
Current assets
Inventories 0.0 97.7
receivables and other assets 1,562.1 1,947.9
securities 124.3 0.0
Cash and cash equivalents 200.3 434.0
1,886.7 2,479.6
deferred income 10.5 12.2
5,071.8 6,155.7
Equity and liabilities
EUr million 31.12.2010 31.12.2009
Shareholders’ equity
subscribed capital 243.0 243.0
Capital reserve 1,558.1 1,555.7
retained earnings 354.2 332.5
Distributable profit 97.2 139.0
2,252.5 2,270.2
Construction subsidies 0.0 8.2
provisions 80.3 765.1
prepaid expenses and deferred income 2,739.0 3,112.2
5,071.8 6,155.7
Income statement for EWE AG, Oldenburg
for the period from 1 January to 31 December 2010
EUr million 2010 2009
Result of financial investments 133.3 176.6
net interest income / expense -115.5 -77.3
17.8 99.3
Other operating income 315.6 225.5
sales 0.0 4,218.7
Electricity and energy taxes 0.0 313.8
Changes in inventories 0.0 0.4
Other own work capitalised 0.0 0.5
315.6 4,131.3
Personnel expenses 32.3 94.7
Depreciation, amortisation and impairment 18.0 108.7
Other operating expenses 106.5 327.9
156.8 531.3
Cost of materials and services 0.0 3,509.3
operating result 176.6 190.0
Extraordinary profit / loss -0.1 0.0
Taxes 130.3 90.0
net profit for the year 46.2 100.0
Carried forward from the previous year 51.0 39.0
Transferred to retained earnings 0.0 0.0
distributable profit 97.2 139.0

168 EWE ANNUAL REPORT 2010 SERVICE
169
Glossar Glossary
alpha ventus
The first German offshore wind farm
in the North Sea, some 45km north
of the island of Borkum. alpha ventus
is a pioneering joint venture between
EWE, E.ON Climate & Renewables
and Vattenfall Europe New
Energy. The operator of the wind
farm is Deutsche Offshore-Testfeld
und Infrastruktur-GmbH & Co. KG
(DOTI), a consortium made up of
the three project companies. EWE
AG is lead investor with a stake of
47.5 per cent.
bioenergy
Energy derived from renewable
sources.
biogas / biomethane
Describes a blend consisting mainly
of methane and carbon dioxide. The
valuable part used for energy is the
methane.
biomass
Describes the total mass of organic
material in a defined ecosystem
which has been biochemically synthesised.
brent
Is the most important type of crude
oil from a European perspective.
Brent is a light crude oil with low
sulphur content. It comes from the
North Sea and is traded on the International
Petroleum Exchange in
London and on other futures exchanges.
Carbon footprint
The total amount of carbon dioxide
emissions as recorded in a CO 2 balance
sheet is described as a carbon
footprint. The emissions recorded
may be for products (production,
use, disposal), business premises
(energy, processes, vehicle fleet)
or for regions (villages, towns, rural
districts). Emissions are mainly
measured by analysing consumption
data.
Cavern / cavern borehole
Subterranean cavities in salt formations
which have been hollowed out
by water several hundred metres underground.
Caverns can be used, for
example, as natural gas storage facilities,
to compensate for seasonal
fluctuations in natural gas sales.
Combined Heat and power
(CHp) / CHp plants
A CHP plant uses both the electrical
energy generated by converting
primary energy and the resulting
(waste) heat. This increases the efficiency
of these plants considerably.
Co 2
Carbon dioxide is a colourless,
odourless gas that in very low concentrations
is a natural part of the
air. Carbon dioxide is also produced
by the combustion of substances
containing carbon, such as the fossil
fuels coal and gas.
Co 2 emissions
In the energy industry carbon dioxide
is produced when fuels containing
carbon are burnt. The gas emitted
into the atmosphere is blamed for
causing the greenhouse effect – the
warming of the Earth’s surface – thus
earning the name “greenhouse gas”.
Co 2 emissions rights trading /
certificates
European system for trading CO 2
emissions rights in two trading periods
(2005–2007 and 2008–2012)
based on the Kyoto Protocol and EU
climate protection resolutions. Facility
operators must hold rights for
their CO 2 emissions. The rights are
allocated by national governments.
If they produce more CO 2 than they
are entitled to, they must reduce the
amount of CO 2 emitted by their facilities
or purchase additional emissions
rights. If they produce less CO 2
than they are entitled to, they can
sell their excess entitlement on the
free market.
Contracting
The process of outsourcing a company’s
own activities to a service
company. When used in connection
with supply, plant, heat or energy
contracting it means the supply
of consumables (heat, cold, power,
steam, compressed air, etc.) and the
construction and operation of the
necessary facilities.
district heating
Heat which is produced in a central
heat plant or a decentralised CHP
plant and then distributed to individual
households or companies by
means of pipes.
dSl (digital subscriber line)
Broadband technology (high-speed
data transmission over the internet)
using simple copper wire, such as
that which is found in traditional telephone
lines. This transmission protocol
allows data to be transferred
and received at great speed (up to 16
Mbit / s for private customers).
e 3 programme
EWE’s e 3 strategy aims to achieve
massive reductions in emissions of
greenhouse gases and in the consumption
of resources by the energy
industry. This strategy rests on three
pillars: increasing the proportion of
renewables in energy generation,
increasing the efficiency of conventional
energy generation and reducing
energy consumption.
E-Energy
A programme of subsidies from the
German Federal Ministry of Economics
and Technology and the German
Federal Ministry for the Environment,
Nature Conservation and
Nuclear Safety. Six trial regions have
been selected as part of the E-Energy
technology competition. One
of these trial regions is eTelligence
(Cuxhaven).
eTelligence
A project sponsored by the German
Federal Ministry of Economics and
Technology as part of the E-Energy
programme. eTelligence conducts
research into how electricity generators,
consumers, energy service providers
and network operators can be
brought together on a regional energy
market in the trial region of Cuxhaven.
This entails coordinating the
power consumption of business customers
and private households with
electricity generation from renewable
sources using modern IT and telecommunications
technology.
EWE bio trio
An EWE product offering telecommunications
/ internet, electricity
and natural gas from a single supplier
and based consistently on renewable
energies.
EWE smarthome
In the EWE smarthome project EWE
is carrying out research into how
household energy management
systems can be used to network
the generation, use and storage of
power and heat to improve efficiency.
In conjunction with intelligent
home automation this is intended
to save energy, absorb fluctuations
in the availability of renewable energies
and make homes more comfortable.
EWE trio smart box
The name given to an intelligent
gas and electricity metering system
for end consumers. It enables EWE
customers to see how much energy
they are using in the home at any
time, where any “energy guzzlers”
are hiding and how they can save
energy by altering their consumption
patterns.
Fuel cell
In a fuel cell, hydrogen and oxygen
react to produce water. The two
gases are separated by an electrolyte
and only exchange electrons via
an electrical conductor. This flow of
electrons makes the fuel cell a
source of electrical power. The heat
produced is also used, however. The
product of the reaction is pure water,
which means that the fuel cell is particularly
environmentally friendly.
German Emissions Trading
Authority
The division of the German Federal
Environment Agency responsible for
implementing emissions trading as
a market-based climate protection
instrument as well as project-based
mechanisms (Joint Implementation
and Clean Development Mechanism)
under the Kyoto protocol.
German Federal network Agency
Higher federal authority within the
German Federal Ministry of Economics
and Technology. Among its other
responsibilities, the Agency has regulated
the German gas and electricity
networks together with the relevant
regional authorities since July 2005.
lEd lighting
Light-emitting diodes (LED) are electronic
semiconductor components
which light up when electricity flows
through them. The light from LEDs is
more or less monochromatic and refracts
much less than conventional
incandescent bulbs. As LEDs convert
a much higher percentage of electricity
into light, instead of radiating
it as heat, this kind of lighting is
much more efficient than conventional
bulbs with a metal filament.
nEXT EnERGy
The EWE Research Centre for Energy
Technology, also known as NEXT
ENERGY, is a research institute for
the natural sciences and is affiliated
with the Carl von Ossietzky University,
Oldenburg. The institute is organised
under the umbrella of a nonprofit
association, the EWE Research
Centre for Energy Technology. Members
of the association include EWE
AG, which is the primary sponsor,
as well as the University of Oldenburg
and the state of Lower Saxony.
Around 80 employees carry out research
into improving the performance
of energy storage devices, fuel
cells and photovoltaic systems, and
into making them more efficient.
offshore wind farm
A collection of wind turbines built
as a permanent construction in
the open sea in areas with strong
winds.
Since the German Renewable Energies
Act came into force, wind farms
have been subsidised by offering the
operators a fixed price for the power
they feed into the grid and guaranteeing
that it will be purchased.

170 EWE ANNUAL REPORT 2010 SERVICE 171
peak loads / load curves
Peak load is the maximum output
that a maximum load in the electricity
grid can produce within a short
period of time.
The load curve shows the load factor
used by an electricity customer over
the period in which this load factor
is supplied.
photovoltaics
The direct transformation of radiant
energy, primarily solar energy,
into electrical energy. It has been
used since 1958, initially for supplying
power to space satellites using
solar cells. Nowadays it is used all
over the world for generating power
and panels can be found on the
roofs of buildings, noise protection
walls or in the open. Photovoltaics
is a subsection of the more general
field of solar technology, which also
includes other technical uses of the
sun’s energy.
primary energy
The term for energy derived from
naturally occurring forms or sources
(oil, natural gas, coal, bio mass).
Renewable energies
The term for energy derived from
sustainable sources. These include
solar energy, hydroelectrical power,
wind energy, biomass and geothermal
power.
Renewable Energy Act (EEG)
The Renewable Energy Act (EEG)
was passed in its original form on
29 March 2000 and is intended to
conserve fossil energy resources
and promote the continued development
of technologies to generate
electricity from renewable energies.
This is achieved partly by guaranteed
fixed prices and by priority feed-in
for power generated from renewable
sources.
Smart grids
Electricity networks which support
coordinated management through
timely and bidirectional communication
between network components,
producers, storage facilities
and consumers to allow systems to
be operated in an energy-efficient
and cost-effective manner in order
to meet future requirements.
Ten bullensee Assumptions
Together with a group of external scientists,
EWE AG drew up ten theses –
the Bullensee Assumptions – on how
the energy supply can be sustainably
guaranteed into the year 2030 and
beyond. The name is derived from
the place where the assumptions
were formulated, a small lake in the
countryside near Oldenburg. (www.
ewe.de/bullenseethesen)
Virtual energy marketplace
The main goal of constructing a virtual
energy marketplace to bring
together electricity producers, consumers
and network operators is
to increase energy efficiency. This is
achieved by the use of information and
telecommunications technology.
Virtual power plant
A virtual power plant is composed
of a number of decentralised devices
for generating, consuming and storing
energy, which are connected with
one another using information and
communications technology and
coordinated centrally, so that they
function in a similar way to a single
conventional power plant. Examples
include not only photovoltaics
systems, emergency power generators
and combined heat and power
plants, but also cold stores and
industrial processes. Virtual power
plants enable renewable energies to
be integrated efficiently into the existing
energy supply system.
Wind farm
A collection of wind turbines.
Wind Farm Center
Wind Farm Center is an IT product
created by the EWE subsidiary BTC
for planning, controlling, monitoring,
servicing and managing wind
farms – including offshore projects.
VdSl
A modern DSL technology, which delivers
much higher data transmission
speeds over normal telephone connections
than ADSL for instance. As
with all DSL technologies, VDSL also
uses a copper wire for the last distance
to the customer.
Zentrum Zukunft
ZentrumZukunft is a training and
conference centre run by EWE. It is
a forum for testing new solutions
in the fields of energy technology,
building automation and home automation
that increase household
efficiency and comfort and make
intelligent use of renewable energies.
Thousands of specialists from
the region have learnt how to use
the building automation, home automation
and energy technology of
the future at ZentrumZukunft.
index
Accounting 4, 47, 68, 75, 76, 78, 85-88, 90,
91, 94, 101, 110, 111, 115, 118, 137, 139, 147,
148, 163, 164
Actuarial assumptions 110, 130
Annual General Meeting 38, 39, 126, 127
boards, company bodies 33, 38, 160
board of Management 2–5, 32–34, 38, 39,
41, 62, 69, 73, 75, 76, 85, 118, 127, 138, 158
borrowing costs 104
Capital expenditure 8, 38, 50, 52, 54, 65,
67, 69, 71, 73, 136, 144, 152–154, 156
Cash flow 3, 66, 68, 79, 82, 84, 85, 98–101,
107, 110, 115, 118, 119, 127, 137-140, 142,
145, 147, 148, 156, 164
Cash flow statement 3, 66, 68, 84, 85,
126, 156, 164
Cash and cash equivalents 66, 68, 80, 84,
97, 108, 126, 140, 142, 146, 156, 166
Consolidated financial statement 3, 39,
49, 51, 64, 74, 78, 85-90, 92, 110, 158, 161-
164
Contingent liabilities 109, 110, 136
Corporate Centre 45, 51, 63, 64, 69, 126,
151–154
Corporate governance code 41, 162
Credit facility 66, 144
Credit risk 74, 110, 146
default risks 146
deferred taxes 7–9, 94, 95, 11, 114, 115,
134, 135, 153, 154
discount rate 100, 107, 110, 111, 119, 30–
132, 142
distributable profit 39, 67, 68, 127, 167
dividend payment 69, 82, 84
list of abbreviations
AktG German Stock Corporation Act
(German: Aktiengesetz)
bilMoG German Accounting Reform Act
(German: Bilanzrechtsmodernisierungsgesetz)
bREkoM Bremer Kommunikationstechnik GmbH
bTC BTC Business Technology Consulting AG
CHp Combined heat and power
dEHSt German Emissions Trading Authority
(German: Deutsche Emissionshandelsstelle)
diW German Institute for Economic Research (German: Deutsches
Institut für Wirtschaftsforschung)
doTi Deutsche Offshore-Testfeld und Infrastruktur-
GmbH & Co. KG
dSl Digital subscriber line
EbiT Earnings before interest and taxes
EbiTdA Earnings before interest, taxes, depreciation and amortisation
EbT Earnings before taxes
Early recognition system for
opportunities 73
EbiT 52, 64, 69, 71, 72, 77, 79, 84, 128, 152-
154
EbiTdA 64, 69
Energy taxes 79, 93, 111, 167
Equity ratio 65, 68, 137
Equity method 64, 79, 80, 84, 86, 87, 91,
113, 122, 125–127, 133, 154, 159
Fair value 85, 86, 88-98, 10-107, 110, 111,
118, 123, 125, 127–129, 131, 133, 137–-144,
147-149
Financial instruments 64, 74, 79, 83–85,
87, 89, 90, 93, 99, 100, 102, 110, 112, 113,
115, 123, 125, 127, 133, 134, 137, 139, 142–
144, 148
Financial liabilities 84, 89, 102, 133, 138,
140–145
Finance and Audit Committee 38
Financing 38, 45, 52, 66, 68, 84, 101, 144,
145, 18, 156, 159
Goodwill 64, 72, 75, 86, 90–95, 108, 110,
113, 116, 119, 122
Gross domestic product 54, 55, 76
Group of consolidated companies 64, 82,
84, 87, 116, 117, 120-122, 124, 129-131, 143
Hedge accounting 101, 137, 139, 147
intangible assets 67, 80, 84, 96, 105–108,
110, 113, 116–119, 134, 136, 152, 166
interest rate risk 101, 137, 138, 147, 148
inventories 79, 80, 84, 101, 108, 123, 134,
166, 167
investor relations 3, 40, 41
liquidity risk 110, 144
Market risks 74, 147–149
Measurement category 140, 141, 144
operating leases 104, 136
other expenses 114
other income 64, 79, 83
pension provision 66, 75, 82, 114, 134
personnel expenses 64, 67, 79, 112, 128,
131, 153, 154, 167
proposal for the appropriation of profit
39, 127, 162
provisions for recultivation 109, 111, 132
Rating 41, 66, 68
Research and development (R & d) 5, 9,
13, 15, 21, 51-53, 59, 106, 117, 133
Risk management 44, 73-75, 100, 137, 139,
144, 147
Segment reporting 85, 111, 151, 154
Subscribed capital 81, 82, 126, 166
Subsidiaries 29, 32, 38, 45, 51, 75, 79, 85,
86, 94, 107, 135, 151, 156, 161, 162
Successful efforts method 103
Supervisory board 3, 32, 33, 38, 39, 41, 62,
75, 85, 118, 158, 160, 162
Tax reconciliation 115
Total cost method 85
Tranche 46, 132
Transaction costs 98, 102, 103, 105
Transparency 33, 51, 60
Value in use 107
WACC (weighted average cost of capital) 119
EnbW Energie Baden-Württemberg AG
EnoVA ENOVA Energiesysteme GmbH & Co. KG
htp Hannovers Telefon Partner GmbH
iCS Internal controlling system
iCT Information and communications technology
iFRS International Financial Reporting Standards
lEd Light-emitting diode
MVR Müllverwertung Rugenberger Damm GmbH & Co. KG
MW megawatts
ncn nordcom Niedersachsen GmbH
pWEA Polish Wind Energy Association
RiFFGAT Offshore wind farm project by EWE and its
business partners
TÜV Technical Inspection Association
(German: Technischer Überwachungs-Verein)
VdSl Very High Speed Digital Subscriber Line (see DSL)
VnG Verbundnetz Gas AG, Leipzig

172 EWE ANNUAL REPORT 2010
Calendar 2011
Tuesday, 12 april 2011 Annual report 2010 – press conference on financial statements
Thursday, 18 august 2011 interim report 2011
imprint
published by
EWE Aktiengesellschaft
Donnerschweer Strasse 22–26
26123 Oldenburg
Team editorial and text
EWE Aktiengesellschaft
Corporate Communications
Phone: +49 (0) 4 41/48 05-18 30
Email: geschaeftsbericht@ewe.de
Forward-looking statements
This annual report contains forwardlooking
statements based on assumptions
and estimates by the management
of EWE AG. Although company
management believes that these
assumptions and estimates are accurate,
actual future developments and
results may differ considerably from
these assumptions and estimates due to
a wide variety of factors. These
Concept and design
IR-One AG & Co., Hamburg
www.ir-1.com
photography
Stephan Meyer-Bergfeld, Oldenburg
istockphoto.com, EWE pictury library
factors may include changes in the
general economic situation, in the statutory
and regulatory framework for
Germany and the EU, and in the sector.
EWE AG is neither liable for, nor guarantees
that future developments and
the actual results achieved in future will
coincide with the assumptions and estimates
made in this annual report. EWE
AG neither intends nor assumes any
printed by
Zertani GmbH & Co. Die Druckerei KG,
Bremen
Translated by
EnglishBusiness, Hamburg
EWE on the internet
www.ewe.com
obligation to update for ward-looking
statements to reflect events or developments
after the date of this report.
This annual report also exists in German;
in the event of any divergences,
the German version of the annual
report has prece dence over the English
version. Both language versions are
available for download from
http://www.ewe.de.
Five-year financial summary
EWE Group
EUr million 2010 2009 2008 2007 2006
Electricity sales in million kWh 17,809.5 14,067.8 13,348.4 14,323.3 13,585.0
Natural gas sales in million kWh 61,660.4 49,849.9 40,454.1 37,618.0 40,128.0
sales 1 6,969.6 5,798.4 5,327.3 4,656.2 4,139.5
return on sales in % -0.7 3.4 4.0 6.4 6.5
EBITDa 751.4 825.9 746.2 702.4 698.3
EBITDa margin in % 10.8 14.2 14.0 15.1 16.9
EBIT 164.9 414.0 426.1 442.9 466.0
EBIT margin in % 2.4 7.1 8.0 9.5 11.3
Consolidated net profit for the period -50.7 199.4 211.0 299.2 267.9
Capital expenditure (total) 631.6 698.8 923.9 566.8 351.9
Cash flow from operating activities 398.7 647.2 382.0 381.4 436.1
share capital 243.0 243.0 200.0 200.0 200.0
shareholders’ equity 3,286.4 3,409.8 2,002.2 1,782.1 1,442.0
Equity ratio in % 31.6 32.6 27.3 29.3 26.6
return on equity in % 3 -1.5 7.4 11.1 18.6
Balance sheet total 10,394.8 10,453.9 7,347.1 6,077.4 5,415.9
Borrowings 2 2,732.5 2,756.5 2,597.8 1,916.0 1,681.4
Employees avg. 8,464 6,446 5,347 4,693 4,276
apprentices and trainees (31.12.) 493 500 331 The accounting 250 methods applied may result 221
in rounding differences of +/- one unit
1 Without electricity and energy taxes
2 Bonds and liabilities to banks
(euro, per cent, etc.).
3 The return on equity is calculated by dividing the net profit for the period
by the average amount of shareholders‘ equity in the current year and previous year.

EWE Aktiengesellschaft
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