DB Supervisory Board expects part privatisation within the first half of next year

Purchase of new rolling stock resolved. Aurelis transaction confirmed

News Item Entered: Wednesday, September 05, 2007

(Berlin, 5 September 2007) ”The signs from the government and parliamentary groups regarding part privatisation are promising,” stated Dr. Werner Müller, Chairman of the Supervisory Board of Deutsche Bahn AG, in Berlin today after the Board’s regular meeting. “The final stages of the rail reform are now on the home straight. Under the present circumstances, part privatisation can take place during the first half of next year.” He explained that the economic criteria had been met, as the company had also achieved “excellent developments” during the first seven months of this year. Revenues increased to EUR 18 billion, which is one billion up year on year. Around EUR 750 million of that increase is attributable to the Transportation and Logistics division.

“We plan to expand even further,” commented Hartmut Mehdorn, CEO and Chairman of the DB Management Board, who expects to see further growth on rail. DB anticipates traffic performance of almost 80 billion passenger-kilometres for the year as a whole, which is equivalent to an increase of around two per cent, while rail freight is expected to rise by ten per cent in Germany. The Supervisory Board also endorsed the purchase of new freight wagons to enable DB to cope with the anticipated growth in freight volumes over the medium term. 5100 wagons of various kinds are to be purchased by the year 2009. The purchase process has already been approved for 3300, and the transactions for the remaining 1800 will now be set in motion. The entire order involves a volume of EUR 160 million. DB also plans to buy 13 Class 185 locomotives for a value of EUR 34 million for Railion, its freight rail company.

At today’s meeting, the Supervisory Board of Deutsche Bahn AG also approved the sale of aurelis Real Estate GmbH & Co. KG. The DB subsidiary Aurelis was founded in 2002 with the object of developing and realising real property holdings which were no longer required for corporate operations. The portfolio consists of some 1500 properties with a total area of 27 million square metres, located primarily in German conurbation areas. DB will now cooperate with a consortium comprising Hochtief Projektentwicklung GmbH and Redwood Grove International L.P. Last week, DB and the consortium signed a preliminary agreement. The planned sale is in line with the strategy agreed with the owner of divesting sites which are superfluous to requirements.

The Supervisory Board further approved implementation of the “Stuttgart 21” project, on the basis of the Memorandum of Understanding signed in that connection between the Federal and Land governments, the city of Stuttgart and DB AG on 19 July.