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With initiation of the sale of American Water Works Company Inc., Wilmington/Delaware, USA, the companies previously recognized in the Water Division have been stated as discontinued operations since December 31, 2007.
On April 23, 2008, RWE sold 58 million shares in American Water on the New York Stock Exchange at a price of US$ 21.50 per share. Furthermore, approximately five million additional shares were sold to the underwriters at the aforementioned issuance price as a result of their exercise of an over-allotment option (“greenshoe”).
Following this sale, the remaining stake in American Water was about 60.5 % as of December 31, 2008. Therefore, RWE still holds the majority of the voting rights. The carrying amount of American Water’s assets and liabilities allocable to the shares sold is stated in the balance sheet under minority interest.
In accordance with IFRS 5, discontinued operations are recognized at the lower of the carrying amount and the fair value less costs to sell. The majority of the fair value adjustment occurred on the basis of the issue price upon placement of the shares.
Recognition at fair value less costs to sell is essentially based on the official quoted market price of American Water. Consequently, changes in the market price can have a significant impact on the Group’s result in the future.
Key figures for the activities of American Water are presented in the following tables:
|
Key figures for American Water |
Dec 31, |
Dec 31, |
|
Non-current assets |
8,432 |
8,290 |
|
Current assets |
278 |
329 |
|
Non-current liabilities |
5,824 |
5,210 |
|
Current liabilities |
890 |
687 |
|
|
|
|
|
€ million |
2008 |
2007 |
|---|---|---|
|
Revenue |
1,589 |
1,601 |
|
Expenses/income |
-1,167 |
-1,382 |
|
Ordinary income from discontinued operations before tax |
422 |
219 |
|
Taxes on income |
-168 |
-64 |
|
Income |
254 |
155 |
|
Fair value adjustments |
-821 |
-429 |
|
Income from discontinued operations |
-567 |
-274 |
|
|
|
|
|
€ million |
2008 |
2007 |
|
Cash flows from operating activities |
473 |
526 |
|
Cash flows from investing activities |
–767 |
–634 |
|
Cash flows from financing activities |
290 |
58 |
With regard to subsidiaries and investments accounted for using the equity method Glossary, the following share disposals occurred during the year under review:
Subsidiaries:
- rhenag Rheinische Energie AG, stake reduced by 8.23 percentage points to 66.67 %
Investments accounted for using the equity method:
- MEGA Monheimer Elektrizitäts- und Gasversorgung GmbH
Changes in the scope of consolidation resulted in the recognition of €571 million in non-current assets (including deferred taxes), €138 million in current assets (excluding cash and cash equivalents), €78 million in cash and cash equivalents and €388 million in non-current and current liabilities.
The total sales price for divested subsidiaries amounted to €0 million (previous year: €446 million), which was paid in cash or cash equivalents.
Effects of changes in the scope of consolidation have been stated in the notes insofar as they are of particular importance.
