11 Power We have 73 gigawatts ("GW") of generation capacity. We're one of the world's most geographically diversified power producers, with major asset positions in Germany, the U.K., Sweden, Russia, the U.S., Italy, Spain, France, and the Benelux countries. We also have one of the broadest and most balanced fuel mixes in the industry. At year-end 2009, 38 percent of our capacity was gas-and oil-fired, 34 percent coal-fired, 15 percent nuclear, 7 percent hydro, and 6 percent wind and other renewables. Our generation fleet--one third of which already consists of zero-emission technologies--is becoming climate-friendlier all the time.2 We aim to halve our specific carbon dioxide emis- sions by 2030. To get there, we're rapidly expanding our renew- ables portfolio (we added 1 GW of renewables capacity in 2009 alone), building the world's most climate-friendly fossil-fueled power plants, preparing to extend the operating lives of our nu- clear power stations in Germany, and participating in projects to build new nuclear plants in several European countries. On the infrastructure side, we operate a high-voltage trans- mission system in Germany (we sold our ultrahigh-voltage trans- mission system as part of our commitment to the European Commission, effective December 31, 2009). By buying and selling power and other commodities in a competitive marketplace, we play a vital role in helping to ensure fair prices and secure long- term energy supplies for our customers across Europe. Our regional utilities in Germany, the U.K., Sweden, Spain, Eastern Europe, and the Midwestern United States operate distribution systems that deliver electricity safely and reliably to homes and businesses. In the power sales business, our national and regional retail organizations offer a wide range of electricity products and personalized service to about 30 million industrial, commercial, residential, and municipal customers across Europe. Gas E.ON is one of Europe's largest gas companies and a pillar of gas supply security in Europe. Our exploration and production ("E&P") business has its geo- graphical focus in the North Sea and Siberia; both are E&P regions with considerable growth potential. On the basis of the invest- ments we've alredy made, we'll achieve our strategic long-term objective of producing 10 billion cubic meters ("bcm") of gas annually from our own assets by 2012. The backbone of our current gas supply is a geographically diverse portfolio of long-term supply contracts with key producing countries. In 2009, we procured 624.1 billion kWh of gas under these contracts. Gas is transported from its production region to us via long-distance pipelines. We intend to supplement our gas supply with an increasing share of liquefied natural gas ("LNG"), using a blend of spot purchases and long-term supply contracts. As part of this effort, we're exploring opportunities to develop selected LNG projects in West Africa and the Middle East. We're also involved in a number of regasification terminals in Northwestern and Southern Europe so that in the future we'll be capable of supplying all key European markets with LNG. Our energy trading arm, which buys and sells gas and similar commodities in more than 40 countries around the world and at all of Europe's major energy exchanges, is a key link between E.ON and the world's wholesale energy markets. Business Areas Our Company Generation · 73 GW of installed capacity, 320 billion kWh of generation · Balanced fuel mix · Objective: Reduction of CO2/kWh by 50% by 2030 Transmission1 · 33,000 km of transmission networks, 110 billion kWh of power transmission Exploration and production · Today: 1.4 bcm · Long-term objective: 10 bcm of gas per year from own production assets (Yuzhno Russkoye and Skarv-Idun will provide 7.5 bcm) Transport and storage · 11,600 km of transport pipelines, 620 billion kWh of gas transport · 10 bcm of storage capacity Trading · 1,240 billion kWh trading volume Trading · 1,498 billion kWh trading volume Supply (including LNG) · Balanced portfolio with six major sources of supply Power Gas Upstream Midstream Making, moving, and marketing energy. Our positions along the value chain. Distribution · Roughly 1 million km distribution system Distribution · Roughly 100,000 km distribution system Retail/Sales · 1,218 billion kWh in gas sales Downstream Retail/Sales · 816 billion kWh in electricity sales 1Sold effective December 31, 2009. 2As used in this report, the terms zero carbon and zero emission refer to power generation operations only, not to a generating unit`s entire lifecycle.