Record dividend proposed.

The Supervisory and Executive Boards will propose a dividend of €4.50 per share for fiscal 2008 to the Annual General Meeting on April 22, 2009–the highest in our 111-year corporate history. Relative to recurrent net income, this results in a payout ratio of 71 %. We are therefore above our usual range of between 50 % and 60 %. We had originally made the increased dividend payout ratio for 2008 dependent on the sale of a majority of the shares in American Water by the end of 2008, but abandoned this condition later on. The target ratio will return to between 50 % and 60 % from fiscal 2009 onwards. Based on the year-end closing share prices of our common and preferred shares, the dividend yields are 7.1 % and 8.4 %, respectively. We therefore have a leading position in the DAX 30.

Changes in shareholder structure due to share buyback.

As set out in detail in the chapter Events, we bought back 31.7 million common shares on the stock market last financial year. This corresponds to 5.6 % of RWE AG’s subscribed capital. The portion held by institutional investors decreased by a similar order. At the end of 2008, their share of the capital amounted to 79 % (prior year: 84 %). Private investors (including employee shareholders) held 15 % (prior year: 16 %).

On the balance sheet date, institutional investors from Germany held 39 % of the shares. As in the previous year, RW Energie-Beteiligungsgesellschaft was our single-largest investor, holding 15 %. Institutional investors in North America and the United Kingdom accounted for a total of 28 % of RWE’s capital (prior year: 29 %). Holding about 5 %, US-based mutual fund Capital Research & Management leads the group of international investors. Institutional investors outside Germany, the UK and North America accounted for 12 % of RWE shares. These investors are domiciled primarily in Continental Europe. The free float of RWE common shares considered by Deutsche Börse AG in terms of index weighting was 78 % at the end of the year.

Shareholder structure of RWE AG¹