Alicorp S A A

The value of all exchange-traded equity investments on the balance sheet date was €2,121 million (2007: €13,061 million). This amount is entirely attributable to Gazprom. This invest- ment is treated as strategic and is not being hedged against market volatility at this time (3-month volatility in 2008: 35 per- cent; 2007: 18 percent). In 2007, some additional equity posi- tions held were hedged using forward transactions. The nom- inal volume of these forward transactions totaled €97 million in 2007. All exchange-traded equity investments are classified as available for sale. Changes in value are generally shown as a change in OCI.

values of continuous transactions. The credit risk is thus pre- sented more conservatively in the following table than it actually is. It represents the sum of the positive fair values. Since derivatives in particular are subject to substantial mar- ket fluctuations, short-term concentrations of credit risk may occur as a result. In summary, as of December 31, 2008, the Company’s derivative financial instruments had the credit ratings and maturities shown in the table.

Derivative transactions are generally executed on the basis of standard agreements that allow for the netting of all out- standing transactions with individual counterparties. For currency and interest rate derivatives in the banking sector, this netting option is reflected in the accounting treatment. Although the greater part of the transactions was completed on the basis of contracts that do allow netting, the following table does not show netting of positive and negative fair

Collateral received has not been taken into account in the above ratings. Exchange-traded forward and option contracts as well as exchange-traded emission-rights-related derivatives having an aggregate nominal value of €13,765 million as of December 31, 2008, (2007: €12,200 million) bear no credit risk.

Rating of Counterparties

Standard & Poor’s and/or Moody’s

December 31, 2007

Total Up to 1 year 1 to 5 years More than 5 years € in millions Nominal value Counter- party risk Nominal value Counter- party risk Nominal value Counter- party risk Nominal value Counter- party risk

AAA and Aaa

through AA- and Aa3 38,474.2 2,235.0 17,384.4 1,000.1 16,163.8 901.3 4,926.0 333.6 AA- and A1 or A+ and Aa3

through A- and A3 27,355.1 2,030.8 14,778.1 1,229.3 10,149.3 728.3 2,427.7 73.2 A- and Baa1 or BBB+ and A3

through BBB- or Baa3 3,396.0 325.5 2,352.0 220.9 948.6 95.7 95.4 8.9 BBB- and Ba1 or BB+ and

Baa3 through BB- and Ba3 4,662.7 211.9 1,583.9 132.1 2,647.0 47.2 431.8 32.6 Other1 _{19,353.9 387.6 11,590.8 141.3 4,706.7 181.6 3,056.4 64.7}

Total 93,241.9 5,190.8 47,689.2 2,723.7 34,615.4 1,954.1 10,937.3 513.0

1_{This position consists primarily of parties to contracts with respect to which E.ON has received collateral from counterparties with ratings of the above categories or with an}

equivalent internal rating.

Rating of Counterparties

Standard & Poor’s and/or Moody’s

December 31, 2008

Total Up to 1 year 1 to 5 years More than 5 years € in millions Nominal value Counter- party risk Nominal value Counter- party risk Nominal value Counter- party risk Nominal value Counter- party risk

AAA and Aaa

through AA- and Aa3 34,682.4 3,447.5 23,089.6 2,570.8 10,247.0 773.6 1,345.8 103.1 AA- and A1 or A+ and Aa3

through A- and A3 46,571.0 4,560.2 25,507.5 2,767.2 12,595.3 802.3 8,468.2 990.7 A- and Baa1 or BBB+ and A3

through BBB- or Baa3 8,385.2 654.3 5,941.1 411.3 2,350.9 241.8 93.2 1.2 BBB- and Ba1 or BB+ and

Baa3 through BB- and Ba3 1,668.9 174.6 584.7 50.9 1,084.2 123.7 – – Other1 _{43,083.5 4,948.9 25,372.4 3,292.8 12,787.8 1,539.1 4,923.3 117.0}

Total 134,391.0 13,785.5 80,495.3 9,093.0 39,065.2 3,480.5 14,830.5 1,212.0

1_{This position consists primarily of parties to contracts with respect to which E.ON has received collateral from counterparties with ratings of the above categories or with an}

Corporate Asset Management at E.ON AG, which is part of the Company’s Finance Department, is responsible for con- tinuous monitoring of overall risks and those concerning individual fund managers.

In addition, VKE, which is organized in the form of a German mutual insurance fund (“Versicherungsverein auf Gegensei- tigkeit”), manages financial assets dedicated almost exclusively to the coverage of employee retirement benefits at the Central Europe market unit; these assets totaled €2.3 billion at year- end 2008 (2007: €2.4 billion). The pension funds held by VKE do not constitute plan assets under IAS 19 and are shown as non-current and current assets on the balance sheet. The majority of the diversified portfolio, consisting of money market instruments, bonds, real estate and equities, is held in investment funds managed by external fund managers. VKE is subject to the provisions of the Insurance Supervision Act (“Versicherungsaufsichtsgesetz” or “VAG”) and its opera- tions are supervised by the German Federal Financial Super- visory Authority (“Bundesanstalt für Finanzdienst leistungs- aufsicht” or “BaFin”). Financial investments and continuous risk management are conducted within the regulatory con- fines set by BaFin. The 3-month VaR with a confidence interval of 98 percent for the assets managed by VKE was €216 mil- lion in 2008 (2007: €118 million).

Expenses from transactions with related companies are gener- ated mainly through the procurement of gas, coal and electricity. Receivables from related companies consist mainly of trade receivables.

Liabilities of E.ON payable to related companies include €531 million (2007: €515 million) in trade payables to operators of jointly-owned nuclear power plants. These payables bear interest at 1.0 percent per annum (2007: 1.0 percent) and have no fixed maturity. E.ON procures electricity from these power plants both under a cost-transfer agreement and under a cost- plus-fee agreement. The settlement of such liabilities occurs mainly through clearing accounts. In addition, E.ON reported financial liabilities in 2008 of €1,237 million (2007: €1,233 mil- lion) resulting from fixed-term deposits undertaken by the jointly-owned nuclear power plants at E.ON.