7 The European Commission has recognized correctly that the internal energy market is now at a critical phase and that it must seize the initiative to move the market forward. We support the Commission's efforts through a range of initiatives, such as improving market transparency in Germany and increasing the country's cross-border power transfer capacity. On the whole, the Commission's plan points in the right direction. We also support Germany and Europe's climate policy. This issue is important to me because I'm convinced that the world finally needs to act to tackle climate change. This will only suc- ceed if we get the most climate protection we can from each euro we invest. My impression, though, is that the climate-policy debate in Germany pays too little attention to cost efficiency. Many countries, particularly in Europe, rely on nuclear energy to help protect the earth's climate. Germany, by contrast, is on a course to phase out nuclear energy, which will prevent it from achieving its ambitious climate-protection targets. In Germany, we need to bring together policymakers, the public, and the energy industry for an objective and honest dialog about energy policy. Germany's energy industry--in part from its own doing--finds itself in an image crisis, a crisis that now affects every project to build a new power plant or new piece of energy infrastructure. If Germany can't modernize its energy asset base, the consequences for its international competitiveness and climate targets are obvious. To me, this is one of the most important policy issues of 2008. I'm personally involved in efforts to reinvigorate a broad and inclusive energy-policy debate. As an energy company, we need the trust of policymakers and the public so that we can continue to operate success- fully and create value for all our shareholders well into the future. Sincerely yours, Dr. Wulf H. Bernotat To Our Shareholders Supervisory Board Year in Review Combined Group Management Report Additional Information Market Units Corporate Governance Consolidated Financial Statements Tables and Explanations