Year in Review20 April E.ON introduces a new Board of Management structure to further enhance the E.ON Group's market orientation and pave the way for further growth. In addition to a Chief Exec- utive Officer a Chief Financial Officer, and a Chief Human Resources Officer, the Board of Management now has a Chief Operating Officer and a member responsible for Corporate Development/New Markets. E.ON signs an agreement with Enel, an Italian energy utility, and Acciona, a Spanish construction company, to end the impasse in the attempted takeover of Endesa. E.ON agrees not to acquire a minority stake in Endesa. In exchange, Enel and Acciona agree to make a takeover bid for Endesa. When the two companies acquire control of Endesa, E.ON will have the opportunity to acquire an extensive portfolio of assets including operations in Spain, Italy, and France. The transac- tion is expected to close in 2008. The E.ON Energy Research Center, a partnership between E.ON and RWTH Aachen University in western Germany, begins operations. E.ON will provide the center with about 40 mil- lion in funding for the next ten years. Energy efficiency and climate protection are at the center of E.ON's enhanced research and development effort. May E.ON presents a package of strategic initiatives and a 60 bil- lion expanded investment program. E.ON further optimizes its organizational structure and the way it manages its business so that it can better seize the opportunities created by the ongoing integration of Europe's energy markets, improve its performance, sustainably enhance earnings, and achieve a significantly more flexible capital structure. January A storm causes widespread damage to the electric distribution system in southern Sweden, leaving about 170,000 E.ON cus- tomers without power. Through the hard work and dedication of E.ON technicians, service is quickly restored in most areas. E.ON's upstream natural gas business achieves another success when E.ON Ruhrgas is awarded three more licenses to explore for gas in the Norwegian North Sea. One of the licenses names E.ON Ruhrgas Norge as the operator. February E.ON spurs retail competition in Germany by launching a new subsidiary called E WIE EINFACH ("E as in Easy"). It's Germany's first energy retailer to offer economically priced power and gas service to homes and small businesses nationwide. At year end, the company already has more than 450,000 customer accounts. As part of E.ON's package of initiatives to promote competition, E.ON Ruhrgas holds its first auction of natural gas storage capacity, auctioning a total of 200 million cubic meters of capacity at facilities in Germany. +++ Security of Supply +++ Climate Protection +++ Growth +++ Market-Oriented Organization +++ Competition +++ Optimi