Exhibit 99

                             Financial Statements of
               Berliner Kraft-und Licht (Bewag)-Aktiengesellschaft
                     As Required by Regulation S-X 210.3-09

Reference is made to the section entitled "Report of Independent Accountants and
Financial Statements of Berliner Kraft-und Licht  (Bewag)-Aktiengesellschaft for
Business  Year  1997/1998,"  (pages F-66 to F-99) and  Financial  Statements  of
Berliner   Kraft-und   Licht   (Bewag)-Aktiengesellschaft   for  Business   Year
1998/1999," (pages F-100 to F-131) in the prospectus filed by Mirant Corporation
(formally Southern Energy,  Inc.) with the SEC on September 27, 2000 pursuant to
Rule  424(b)  under the  Securities  Act of 1933,  as amended,  with  respect to
Southern  Energy's   registration   statement  on  Form  S-1  (Registration  No.
333-35390),  for financial  statements and other information  regarding Berliner
Kraft-und Licht (Bewag)-Aktiengesellschaft.



                             Financial Statements of
               Berliner Kraft-und Licht (Bewag)-Aktiengesellschaft
                             Business Year 1999/2000
                                    Unaudited
                     As Required by Regulation S-X 210.3-09

<PAGE>

                                    Bewag AG
                            Business Year 1999/2000
                                  Balance sheet
                                   (Unaudited)

<TABLE>
<CAPTION>

Assets                                        Notes  30 June 2000  30 June l999
                                                      DM thousand   DM thousand
Fixed assets                                    (1)
<S>                                            <C>           <C>          <C>
Intangible assets                               (2)      540,395      396,160
Property, plant and equipment                   (3)    6,414 318    6,817,365(1)
Financial assets                                (4)    1,112,451      848,312
                                                      ----------  -----------
                                                       8,067,164    8,061,837

Current assets
Inventories                                     (5)      156,647      167,872
Accounts receivable and other assets
     Trade accounts receivable                  (6)      625,102      522,116
     Receivables from subsidiaries              (7)       32,784        2,053
     Receivables from affiliated companies      (8)          785        5,577
     Other assets                               (9)      282,740       91,036
Securities                                                    -       184,295
Checks, cash on hand and on deposit with
Deutsche Bundesbank and Postbank,
cash in other bank accounts                    (10)       23,634      277,980
                                                      ----------   ----------
                                                       1,121,692    1,250,929
Prepaid expenses                               (11)        4,258      185,215
Special loss account                           (12)      441,778      445,857(1)
                                                      ----------   ----------
                                                       9,634,892    9,943,838
                                                      ==========   ==========
</TABLE>
<TABLE>
<CAPTION>

Liabilities                                  Notes  30 June 2000   30 June l999
                                                     DM thousand   DM thousand
Stockholders'equity and liabilities
<S>                                            <C>          <C>           <C>
Capital stock                                  (13)   1,139,075     1,120,000
Additional paid in capital                     (14)      56,800        56,800
Retained earnings                              (15)
  Statutory reserve                                     896,148       896,148(1)
  Special reserve under s.17 ss.4 DMBilG                441,778       445,857(1)
  Other retained earnings                             1,014,555     1,029,551
                                                     ----------    ----------
                                                      2,352,481     2,371,556
Net income available for distribution          (16)     250,880       246,400
                                                     ----------    ----------
                                                      3,799,236     3,794,756

Special item with partial reserve character    (17)   1,433,035     1,884,341
Special item for investment bonuses            (18)     343,529       386,546
Construction cost subsidies                    (19)     685,751       697,711
Provisions
Provisions for pensions and other
  employee benefits                            (20)     515,786       464,209
Provisions for taxes                                     87,453       189,882
Other provisions                               (21)   1,780,257     1,621,386(1)
                                                     ----------    ----------
                                                      2,383,496     2,275,477
Liabilities                                    (22)
Liabilities to banks                           (23)     499,777       381,160
Advance payments received                      (24)     109,896        78,177
Trade accounts payable                                  140,163       226,746
Liabilities to subsidiaries                    (25)      28,839           953
Liabilities to affiliated companies            (26)       1,582         5,709
Other liabilities                              (27)     194,721       200,666
                                                     ----------   -----------
                                                        974,978       893,411
Deferred income                                (28)      14,867        11,596
                                                     ----------   -----------
                                                      9,634,892     9,943,838
                                                     ==========   ===========

 (1) After adjustment pursuant to Section 36 DMBilG

       The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
                                    Bewag AG
                             Business Year 1999/2000
                              Statement of income
                                  (Unaudited)


Statement of income
<TABLE>
<CAPTION>
                                          Notes      1999/00       1998/99
                                           No.     DM thousand   DM thousand

<S>                                                       <C>            <C>
Sales revenues                                      3,663,824      3,901,578 (1)
Electricity tax                                      -236,917        -46,948
                                                    ---------      ---------
                                            (29)    3,426,907      3,854,630
Inventory changes and other internally
produced and capitalized assets             (30)       43,518         46,078
Other operating income                      (31)      503,061        361,896
Cost of materials                           (32)     -963,309     -1,078,035
Personnel expenses                          (33)     -904,543     -1,196,754
Depreciation                                (34)     -625,862       -671,446
Other operating expenses                    (35)     -700,684       -788,845 (1)
Income from financial assets                (36)       12,756        -13,242
Net interest income                         (37)      -22,425        -29,204
                                                   ----------     ----------
Result of ordinary activities                         769,419        485,078
Extraordinary result                        (38)     -338,320              -
Taxes on income                             (39)     -180,219       -188,078
                                                   ----------     ----------
Net income for the year                               250,880        297,000
Allocations to other retained earnings                      -        -50,600
                                                   ----------     ----------
Net income available for distribution                 250,880        246,400
                                                   ==========     ==========
</TABLE>

(1)  After reclassification of DM 46,948 million electricity taxes from Other
     Operating expenses to Sales revenues

        The accompanying notes are an integral part of these statements.



<PAGE>
                                    Bewag AG
                             Business Year 1999/2000
                               Cash-Flow Statement
                                   (Uaudited)
<TABLE>
<CAPTION>
                                                          1999/00      1998/99
NOTES                                                   DM million   DM million

<S>                                                          <C>           <C>
Net income for the year                                      251           297
Extraordinary result                                         338             -
Depreciation of fixed assets                                 622           689
Change in long-term provisions                              -225            51
Allocation to special items                                   11           150
Release of special items                                    -150          -161
Other expenses and income not affecting cash                 -78           -10
                                                            ----         -----
Result from disposals of fixed assets                       -148           -22
Increase/decrease in inventories, trade accounts
 receivable and other assets                                -141            51
Increase/decrease in inventories, trade
 accounts payable and other assets                            25            69
Payments related to extraordinary items (restructuring)     -388             -
                                                            ----         -----
Cash flow provided by operating activities                   117         1,114
                                                            ----         -----

Proceeds from disposals of fixed assets                       67            56
Purchases of fixed assets                                   -510          -446
Of which, increase in the invesetment of GASA              (-199)           (-)
                                                           -----         -----
Cash used for investing activities                          -443          -390
                                                           -----         -----
Dividends paid to stockholders                              -246          -224
Proceeds from loans raised                                   225             -
Repayments of loans                                         -118          -469
Changes in financing with subsidiaries                        27             -
                                                           -----         -----
Cash used for financing activities                          -112          -693
                                                           -----         -----
Net decrease (increase) in cash and cash equivalents        -438            31
                                                           =====         =====
</TABLE>

<TABLE>
<CAPTION>
Movements in cash and                  30 June 2000    30 June l999     Change
  cash equivalents                      DM million      DM million   DM million

<S>                                       <C>           <C>               <C>
Liquid funds                              24            278              -254
Securities held as current assets          -            184              -184
                                         ---            ---              ----
Cash and cash equivalents                 24            462              -438
                                         ===            ===              ====
</TABLE>

<PAGE>

                                     Bewag AG
                             Business Year 1999/2000
                        Notes to the Financial Statements
                                  (Unaudited)

Preliminary Remarks
Effective, 1 July 1993, Bewag was merged  with the former  East  Berlin  energy
supply  company  Energieversorgung  Berlin AG (EBAG).  As a result of the merger
under stock  corporation law,  legislation  which,  according to the unification
treaty  applies  only to  companies in the former GDR, now applies to Bewag as a
whole.  This is  particularly  relevant with regard to the  provisions of the DM
Balance  Sheet Act  (DMBilG)  covering  the  Special-loss  account, the Special
reserve  under Section 17  Sub-section 4 of the Act, and capital  reorganization
under  Section 27 of the Act.  In certain  circumstances  Section 36 DMBilG also
stipulates  changes in EBAG's opening  balance  sheet, which then retroactively
entail  corrections in certain  balance sheet item  valuations for each previous
year.  As of 30 June 2000,  adjustments  to the opening  balance sheet were made
with regard to the following items:
o       Property,  plant and equipment is shown DM 83.6 million  higher.
        The  reason  was that,  on the one hand,  official  land
        assignment  decisions led to a DM 3.5 million  reduction of carrying
        amounts for land. Secondly,  due to a change in accounting  practice,
        liabilities to remedy soil contamination  are no longer  accounted
        for as a value  reduction of the related  asset  but  rather  as a
        liability.  This  leads to a DM 87.1 million increase in historical
        costs of land.

o       Provisions for contamination removal rose DM 87.1  million due to the
        above mentioned  changed accounting practice.  In addition,  the Special
        -loss  account and the Special reserve had to be increased by the same
        amount.

As a consequence of these adjustments, the Statutory reserve was reduced by
DM 3.5 million.

Bewag  must  also  take  into  account  the  stipulations  of the Land  Registry
Adjustment Act (GBBerG). This act applies only to the territory which joined the
Federal Republic under the unification  treaty,  and especially covers easements
of utility supply companies in non-public land, as well as compensation payments
due to the  owners of such  properties.  Provisions  were  established  for this
purpose as of 30 June 1995,  the date of the initial  application of the Act. At
the  time,  this  provision  did not  affect  operating  results  in the  income
statement; it had merely served to record such liabilities and related assets on
the balance sheet.

In this respect, too, a change  in  accounting  practices was made  in the year
under  review.  In  accordance  with an  agreement  between  the  Federal Office
for Finance and the utility sector, the total historical costs of  easements are
now being reported as intangible assets. Originally, they had  been  carried  at
cash value as the law provides for  compensation  payments due in two
equal installments on 1 January 2001 and 2011.

The difference between the value of the easements and the obligation was
recorded as prepaid expense.

Because of the insignificance of Bewag's  stockholdings  as  a  whole in
relationship to its financial and income positions, the company  took  advantage
of the option provided by Section 296 Sub-section 2 of the Commercial Code (HGB)
and chose not to prepare a consolidated annual statement.

Accounting and valuation methods
In the balance sheet and the income statement,  certain items have been combined
for the sake of greater  clarity;  they are then shown in greater  detail in the
notes.  Furthermore,  in an effort to provide more  insight  into the  company's
financial position,  a number of items have been added to the balance sheet. The
statement of income has been drawn up according to the cost-summary  method.  DM
figures shown in the annual statement  represent  thousands.  For the purpose of
translating DM into Euro, an exchange rate of Euro 1 = DM 1.95583 has been used.
Specifically, accounting and valuation are based on the following principles:

<PAGE>

                                    Bewag AG
                            Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)

Assets
Purchased  intangible  assets  are  valued  at cost less  regular  straight-line
depreciation.

Property,  plant and equipment are also  assessed at  acquisition  or production
cost. With regard to the cost of self-constructed assets, Bewag capitalizes only
directly  allocable  costs.  Interest paid on outside  capital has been excluded
from this item since 1 January 1991.  When new Property,  plant and equipment is
added,  investment  subsidies  are  deducted  from the costs of  acquisition  or
production. Regular depreciation on Property, plant and equipment is carried out
on a  straight-line  basis for  buildings,  and otherwise  always at the highest
digression rate permissible  under taxation law;  straight-line  depreciation is
used as soon as this leads to higher  annual  amounts.  Plant for which  special
depreciation  can be claimed under Section 4 of the Development Area Act (FordG)
is  also  depreciated  on  the  straight-line   basis,  as  stipulated  by  law.
Depreciation is based on the Federal  Minister of Finance's  depreciation  table
for the energy and water supply sector.

Regular  depreciation  of Property,  plant and  equipment is mainly based on the
following service lives:

                Buildings                          25 - 50 years
                Generation & distribution assets   10 - 35 years
                Motor vehicles                       4 - 6 years
                Furniture and fixtures              4 - 10 years

In the in-service year of purchase or production, new assets are depreciated at
75.0 per cent of the normal annual rate.

According to one of the options  under Section 6 Sub-section 2 of the Income Tax
Act  (EStG),  minor  assets are  depreciated  fully in the year of  purchase  or
production. Financial assets are valued at acquisition cost. Interest-free loans
included in Loans are discounted to their present value. If the book value of an
asset calculated according to the above principles is greater than its quoted or
market value at balance-sheet  date, the excess over the market value is written
off.

Inventories are valued at average  acquisition costs,  taking into account
the lower of-cost-or-market rule. Deductions are made for inventories subject to
long storage and thus  potentially  less suitable for use from an economic point
of view.  The  amounts  deducted  depend on the rate of  turnover for the goods
concerned,  and may not exceed a pre-set lower value limit.

With regard to Trade accounts receivable and other assets, an  appropriate
amount is deducted for identifiable  single  risks.  Other  risks are taken
into  account in a general allowance for bad debts and doubtful accounts.
Within Trade accounts receivable, advance  payments  on  receivables  for
goods and  services  are offset  against electricity and heat supplied but
not yet invoiced.  Receivables for electricity supplied  but  not  yet
invoiced  are  assessed  on the  basis  of  electricity consumption and
revenue projections; a differentiated group assessment procedure is applied.
Interest-free  receivables are discounted according to their terms.
No use is made of the option right to capitalize  debt discount  expenses: such
expenses are immediately recorded in the income statement.

<PAGE>

                                    Bewag AG
                             Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)

Provisions for which a Special loss account had been created in the opening
balance sheet of EBAG as of 1 July 1990 and which have been used up, are not
reported as an  expenditure in the relevant items of the income statement;
instead, the special loss account is depreciated by the amount of the used
provisions.

Stockholders' equity and liabilities
As they become freely disposable,  funds of the Special reserve under Section 17
Sub-section 4 of the DM Balance Sheet Act (DMBilG) are  transferred  to other
retained  earnings in accordance  with the current version of the act, which has
been in force since 25 July 1994.

The amount by which the regular  depreciation  of Property,  plant and equipment
differs from the increased  deduction for  depreciation  under Section 14 of the
Berlin Promotion Act (BerlinFG) and the special  depreciation under Section 4 of
the  Development  Area Act (FordG) are  disclosed as Special  items with partial
reserve character,  together with the Reserve under Section 6b of the Income Tax
Act (EStG). The difference between regular  depreciation and increased deduction
is always released in accordance with established depreciation  procedures,  but
the release of the special  depreciation  begins at the end of the  preferential
period.

Tax-free investment bonuses are shown under liabilities as Special Item
for investment  bonuses.  The release of this item to income is carried out on a
straight-line  basis in  accordance  with the  period  of use of the  subsidized
assets.

Construction  cost subsidies are released into income at an annual rate
of 5.0  percent unless a shorter  term has been  agreed  upon.

Provisions  for pensions  and  other  employee   benefits  are  formed
according  to  actuarial principles. Fractional values are determined on the
basis of an interest rate of 6.0 per cent. A further third of the amount to
be allocated to these  provisions as a result of  application  of the new
guidelines  (1998 Heubeck  guidelines), which reflect  increased life
expectancy,  was accrued in the year under review.

Other  provisions  reflect all  risks  and  uncertain   obligations  which  are
identifiable  according to the principles of most probable estimate.
Provisions for early retirement are not discounted.

Liabilities are reported at their repayment value.

Foreign currency translation
Receivables and  liabilities in foreign  currency are translated at the exchange
rate  applicable on the date of origin of the claim or liability,  unless a fall
or rise in the  exchange  rate  makes a  devaluation  of the  claim or an upward
valuation of the liability necessary.

Statement of cash flows
The Statement of cash flows prepared according to the rules issued by the German
Accounting  Standards Committee (DRS 2) breaks down payment flows into cash flow
from operating,  investing and financing activities.  The balance represents the
total change in financial resources in the course of the business year.

<PAGE>

                                    Bewag AG
                             Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                   (Unaudited)

Notes to the Balance Sheet
(1) Fixed assets
Changes in  individual  items of Fixed assets in the  1999/2000  business  year,
including depreciation, are shown in the "Movements in fixed assets" schedule.

(2) Intangible assets
The two main Intangible  assets are DM 371.9 million for easements under Section
9 of the Land Registry  Adjustment  Act  (GBBerG),  and DM 139.6 million for the
right of using the 38OkV Helmstedt-Wolmirstedt-Berlin twin line. The increase in
easements  mainly  results  from  valuation  of rights of way for lines at their
nominal value - a change in  accounting  practice in this  reporting  year to be
consistent with tax-based valuation

(3) Property, plant and equipment
Additions and transfers to Property, plant and equipment involving completed and
fully charged assets amount to DM 297.8 million. The most significant  additions
were investments made for power  transmission and distribution  assets (DM 165.2
million),  buildings  (DM 45.9  million) and district  heating  systems (DM 44.9
million). As a result of declining capital investment activity, advance payments
received and assets under construction fell DM 65.8 million to DM 426.8 million.
Gross asset  disposals of DM 288.9  million under  Intangible  assets as well as
Property,  plant and  equipment  include  DM 63.2  million  in  connection  with
outsourcing of Bewag's Information Processing Center into BerlinDat Gesellschaft
fur  Informationsverarbeitung  und Systemtechnik  mbH, Berlin. In addition,  six
properties were sold.

(4) Financial assets
The DM 23.8  million  increase  in  investments  in  subsidiaries  is due to the
acquisition   of  a  51.0  percent   stake  in   Landau-based   EnergieSudwest
Aktiengesellschaft,  and to the increase in equity in BerlinDat GmbH, Berlin, by
24.99  per cent to 74.99  percent.

After  BerlinDat  GmbH,  Berlin,  became a subsidiary  according to the increase
in  our  investment in  this company,  there are  now DM 12.0  million  Loans to
subsidiaries.  The  majority of the DM 217.6 million  increase in Investments,
DM 199.1 million, relates to a 6,59 percent increase in equity in GASAG Berliner
Gaswerke AG, Berlin, from 24.99  per  cent  to 31.58 percent. DM 19.6  million
related to the payment of a capital contribution associated  with the foundation
of best energy GmbH,  Berlin.  In addition,  the shares held in EFR Europaische
Funk-Rundsteuerung GmbH, Berlin,  were sold and the  existing receivable  under
a loan  agreement  with EFR was assigned to the  buyers.

Other  Loans  includes a DM  24.4  million  loan  to  VEAG  Vereinigte
Energiewerke AG, Berlin.

(5) Inventories
<TABLE>
<CAPTION>
                                       30 June 2000  30 June l999       Change
                                        DM thousand   DM thousand  DM thousand
<S>                                           <C>           <C>            <C>
Raw materials and supplies                 134,796       154,920       -20,124
Work in progress for public lighting        21,800        12,952         8,848
Advance payments                                51             -            51
                                           -------       -------       -------
Total                                      156,647       167,872       -11,225
                                           =======       =======       =======
</TABLE>

The reduction in raw materials and supplies is mainly due to inventory  cutbacks
through optimized stock management.

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)

(6) Trade accounts Receivable
<TABLE>
<CAPTION>
                                    30 June 2000   30 June 1999        Change
                                     DM thousand    DM thousand   DM thousand

<S>                                         <C>           <C>            <C>
Electricity supplied                    554,977       412,476        142,501
Heat supplied                            68,907       107,642        -38,735
Other goods and services supplied         1,218         1,998           -780
                                        -------       -------        -------
Total                                   625,102       522,116        102,986
                                        =======       =======        =======
</TABLE>

The increase in Trade accounts  receivable from  electricity  supplied is due to
electricity taxes for a full business year being included in accounts and to the
effects  resulting  from  changes in  contract  terms with many  customers.  The
decline in Trade  accounts  receivable  from heat  supplied is a result of lower
volume sales due to weather effects.


Receivables  from  electricity  and heat  supplied  include DM 897.2  million in
payments on account  received  for  electricity  and heat  supplied  but not yet
billed  (previous  year: DM 980.4 million).  Of the  receivables shown here, DM
16,814  thousand  (previous  year: DM 20,265 thousand) have a remaining term of
more than one year.

(7) Receivables from subsidiaries
Receivables  shown here at DM 32.8 million are mainly due from  BerlinDat GmbH,
Berlin.  They relate to award of IT services to this  subsidiary  following  the
outsourcing  of the Bewag  Information  Processing  Center  retroactive as of 01
April 2000.

(8) Receivables from affiliated companies
Most of the DM 0.8 million  receivables  shown here are due from GASAG  Berliner
Gaswerke AG, Berlin.

(9) Other assets
DM 282.7 million of other assets shown include, in particular, DM 200.7 million
in   receivables   from   sale   of  the   former   headquarters   property   in
Berlin-Tiergarten.  Of the other assets,  DM 14,839 thousand (previous year: DM
10,819 thousand) have a remaining term of more than one year.

(10) Checks, cash on hand or on deposit with Deutsche Bundesbank and Postbank,
cash in other bank accounts

<TABLE>
<CAPTION>
                                                30 June 2000   30 June l999        Change
                                                 DM thousand    DM thousand   DM thousand
<S>                                                     <C>             <C>          <C>
Checks and cash on hand                                1,509           454         1,055
Deposits with Deutsche Bundesbank and Postbank           232           323           -91
Cash in other bank accounts                           21,893       277,203      -255,310
                                                    --------       -------      --------
Total                                                 23,634       277,980      -254,346
                                                    ========       =======      ========
</TABLE>


The clear reduction of cash results, in particular, from redundancy payments to
employees under the restructuring program.

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)

(11) Prepaid expenses
The prepaid expenses item reflects  prepayments for pensions,  taxes,  insurance
and other  prepayments in the amount of DM 4.3 million.  DM 170.6 million of the
reduction in this  account  results  from this year's  change in the  accounting
practice related to easements.  Previously this account contained the difference
between the nominal  value and the present  value of the  compensation  payments
under  Section  9 of the  Land  Registry  Adjustment  Act  (GBBerG).  After  the
accounting  change,  the  nominal  value  of the  easements  is  reported  as an
intangible  asset.  This  accounting  is  consistent  with the tax balance sheet
reporting,   and  the  amount  equals  the  related  liability  eliminating  the
requirement  of  reporting  the  difference  between the  nominal  value and the
present value of compensation payments.

(12) Special  Loss account  under  Section 17  Sub-section  4 of the DM Balance
Sheet Act (DMBilG)
DM  4.1 million in provisions  under the Special loss account were used
during the  course of the year under  review,  and the  Special  loss
account was reduced by this amount to a value of DM 441.8 million.

(13) Capital stock
The Annual  Stockholders'  Meeting held on 13 December 1999 passed the following
resolution  with regard to the company's  Capital  stock:  By  converting  other
Retained  earnings into Capital stock, the company's  Capital stock is increased
by DM 19.1 million (Euro 9.8 million) to DM 1,139 million (Euro 582.4 million).
The capital  increase is effected  without any new stock being  issued,  so that
each  individual  no-par share accounts for a partial amount of Euro 2.60 in the
total Capital Stock.  At balance sheet date,  Bayernwerk AG  Aktiengesellschaft,
Munich, and Southern Energy Holding  Beteiligungsgesellschaft  mbH, Berlin, each
held 26.0 per cent, 23.0 per cent were held by PreussenElektra AG, Hanover,  and
25.0 percent are in scattered ownership. Capital stock is divided into:
Group A shares (bearer shares with single voting right)
 150,666,800  no-par shares with 150,666,800  votes =  391,733,680 Euro,
 or DM 766,164,483.35
Group B shares (registered  shares with double  voting  right)
  73,333,200  no-par shares with 146,666,400 votes = 190,666,320 Euro,
  or DM 372,910,908.65

(14) Additional paid in capital
The Additional paid in capital contains  allocations from share premiums and the
reserves arising from the Bewag opening balance sheet of 1 April 1949.

(15) Retained earnings
<TABLE>
<CAPTION>                                                   30 June 2000    30 June l999        Change
                                                             DM thousand     DM thousand   DM thousand

<S>                                                                <C>             <C>            <C>
   Statutory reserve                                           896,148         896,148 (1)          0
   Special reserve under Section 17 Sub-section 4 DMBilG       441,778         445,857 (1)     -4,079
   Other Retained earnings                                   1,014,555       1,029,551        -14,996
                                                             ---------       ---------       --------
   Total                                                     2,352,481       2,371,556 (1)    -19,075
                                                             =========       =========       ========
</TABLE>
              (1) After adjustment according to Section 37 DMBilG


The Statutory reserve contains DM 871.9 million from an earlier  realignment of
the capital  position of EBAG effected  under Section 27 Sub-section 2 of the DM
Balance Sheet Act (DMBilG).  Within the scope of the capital  increase,  DM 19.1
million in other  Retained  earnings  were  converted  into  Capital  stock.  In
addition,  a freely disposable amount of DM 4.1 million was transferred from the
Special  reserve  under  Section 17  Subsection  4 of the DM  Balance  Sheet Act
(DMBilG) to other Retained earnings.

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)

(16)  Net  income  available  for  distribution
 The Net  income  available  for distribution is DM 250.9 million.


(17) Special item with partial reserve character
<TABLE>
<CAPTION>
                                                           30 June 2000  30 June l999       Change
                                                            DM thousand   DM thousand  DM thousand
<S>                                                                <C>           <C>            <C>
Increased depreciation under Section 14 of the
  Berlin Promotion Act (BerlinFG)                              292,320       439,956      -147,636
Special depreciation under Section 4 of the
  Development Area Act (FordG)                               1,140,715     1,421,727      -281,012
Reserve under Section 6b of the Income Tax Act (EstG)                -        22,658       -22,658
                                                             ---------     ---------     ---------
         Total                                               1,433,035     1,884,341      -451,306
                                                             =========     =========      ========
</TABLE>

Major items comprising the reported decrease are the scheduled reversal of the
special depreciation in an amount of DM 64.1 million, non-scheduled reversal for
dismantling  work  amounting  to DM 9.0 million,  and early  release of DM 355.6
million for the restructuring program. The previous year's amount of the Reserve
under Section 6b of the Income Tax Act, DM 22.7 million,  was transferred to the
cost of production of the 380 kV diagonal link.

(18) Special item for investment bonuses
The overall reduction in this item to DM 343.5 million results from the effected
release into income of DM 43.0 million.

(19) Construction cost subsidies
The DM 685.8 million total  Construction  cost subsidies is comprised of DM 27.6
million  related  to assets  under  construction,  DM 434.0  million  related to
electricity  supply, DM 223.6 million to heat supply, DM 0.5 million to networks
and DM 0.1 million to public lighting.

(20) Provisions for pensions and other employee benefits
The DM 51.6  million  increase in these  provisions  to DM 515.8  million is due
mainly  to  an  increase  in  the  anticipated  payments  under  the  early  and
semi-retirement  arrangements  in accordance  with the  Consolidation  Agreement
effective 1 August 1999.

(21) Other provisions
<TABLE>
<CAPTION>                                          30 June 2000  30 June 1999         Change
                                                    DM thousand   DM thousand    DM thousand

<S>                                                    <C>           <C>               <C>
Easements under Section 9 (GBBerG)                    514,561       514,691           -130
Personnel                                             615,117       487,296        127,821
Contamination removal                                 465,327       470,046 (1)     -4,719
Uncertain liabilities from supplies and services       43,809        47,569         -3,760
Compensation liabilities for property                  21,976        25,199 (1)     -3,223
Demolition and dismantling                              5,455         5,724           -269
Sundry                                                114,012        70,861         43,151
                                                    ---------     ---------       --------
Total                                               1,780,257     1,621,386 (1)    158,871
                                                    =========     =========       ========
</TABLE>
                 (1) After adjustment according to Section 37 DMBilG
<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                Notes to the Financial Statements - (Continued)
                                  (Unaudited)

The  provisions  for personnel  expenses  mainly  contain  provisions  for early
retirement arrangements,  profit-sharing measures,  anniversary payments, annual
bonus  payments,  residual  holiday  entitlement  and  flex-time  accounts.  The
increase  against  last  year  results  almost  exclusively  from  restructuring
measures pursuant to the Collective  Consolidation Agreement effective 21 August
1999.  The  provisions  for  contamination  removal  take into account the costs
anticipated  in the  eastern  districts  of Berlin  for  replacement  of soil on
contaminated  properties,  the removal and disposal of oil-insulated cables, and
soil  rehabilitation  measures  required as a result of leakage of oil-insulated
cables on  properties  owned by third  parties.  To be  consistent  with the tax
valuation, the previous accounting practice of reducing the value of the related
contaminated properties in the area formerly supplied by EBAG is changed and the
related  liability is recorded under provisions for contamination  removal.

The provisions  for  uncertain  liabilities  arising from supplies and services
also contain  provisions  for  contingent  losses  for  future  expenditures.

Sundry provisions  mainly reflect  liabilities  from discounts,  credits,
compensation payments under Section 11 on the Act on Priority of Renewable
Energies (EEG) and provisions for contingent liabilities.

(22) Liabilities
The  composition  and terms to  maturity  of our  liabilities  are listed in the
following table:

<TABLE>
<CAPTION>
Term to maturity                           Up to 1  year     1 - 5 years    Over 5 years      Total
                                            DM thousand      DM thousand     DM thousand   DM thousand
<S>                                                 <C>             <C>           <C>            <C>
Liabilities to banks                            214,413         120,470       164,894        499 777
Previous year                                   116,502         111,997       152,661        381,160
Advance payments received                       109,896               -             -        109,896
Previous year                                    78,177               -             -         78,177
Trade accounts payable                          140,163               -             -        140,163
Previous year                                   226,746               -             -        226,746
Liabilities to subsidiaries                      28,839               -             -         28,839
Previous year                                       953               -             -            953
Liabilities to affiliated companies               1,582               -             -          1,582
Previous year                                     5,709               -             -          5,709
Other liabilities                               119,557          61,564        13,600        194,721
Previous year                                   111,313          61,353        28,000        200,666
Of which - tax liabilities                      (55,325)             -              -        (55,325)
         - Previous year                        (46,353)             -              -        (46,353)
         - social security liabilities          (20,531)             -              -        (20,531)
         - Previous year                        (21,810)             -              -        (21,810)
                                                -------         -------       -------       --------
Total liabilities                               614,450         182,034       178,494        974,978
Previous year                                   539,400         173,350       180,661        893,411

</TABLE>


<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                Notes to the Financial Statements - (Continued)
                                  (Unaudited)

(23) Liabilities to banks
The DM 118.6 million increase in Liabilities to banks results from taking out DM
175.0 million  short-term  money market loans,  and a DM 50.0 million  long-term
loan. On the other hand, DM 103.2 million long-term loans were repaid, including
DM 45.4  million  made in advance  of due date,  resulting  in a DM 3.2  million
decrease in interest expense.  Liabilities to banks also includes DM 2.9 million
in loans under Section 16 of the Berlin Promotion Act  (BerlinFG)  and DM 173.4
million in loans under Section 17 of the same Act.

(24) Advance payments received
Advance  payments  received rose DM 31.7 million to DM 109.9  million.  Advances
increased DM 26.4 million the electricity business, and DM 7.6 million in public
lighting, while they declined DM 2.3 million in ancillary business.

(25)  Liabilities to subsidiaries
Out of these DM 28.8 million  liabilities,  DM 27.8 million  relate to BerlinDat
GmbH,  Berlin.  They are connected  with the  outsourcing  of the IT department.

(26) Liabilities to affiliated companies
These DM 1.6 million liabilities relate almost exclusively to GASAG, Berlin, and
EUS Energie und Umwelt Service GmbH.

(27) Other liabilities
DM 194.7 million of this item includes,  in addition to liabilities arising
from taxes and social security  commitments,  an investment loan of DM 85.6
million from an insurance company.

(28) Deferred income
The DM 14.9 million  item is comprised of an amount paid at the  beginning of an
air  conditioning  supply  contract,  which  is  being  amortized  according  to
schedule,  and subsidies  received in the context of purchase and rehabilitation
of a heating  system.  The  subsidy  is being  amortized  as  maintenance  works
progress.


<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                Notes to the Financial Statements - (Continued)

Notes to the Statement of income
(29) Sales revenues
<TABLE>
<CAPTION>
                                 1999/00          1998/99          Change
Breakdown by segments         DM thousand     DM thousand     DM thousand

<S>                                 <C>               <C>            <C>
Electricity                   2,869,514        3,019,179        -149,665
Electricity tax                -236,917          -46,948        -189,969
                              ---------        ---------        --------
                              2,632,597        2,972 231        -339,634

Heating                         770,811          850,638         -79,827
Public lighting                  23,499           31,761          -8,262
                              ---------        ---------        --------
Total                         3,426,907        3,854,630        -427,723
                              =========        =========        ========

</TABLE>

Electricity  revenues  include DM 236.9 million of electricity  taxes  collected
from customers and payable by Bewag to the tax authority.  In order to emphasize
that this is a transitory  obligation with no effect on income, we have followed
a recommendation issued by the principal professional committee of the Institute
of German  Certified Public  Accountants and have, for the first time,  deducted
the  electricity  tax expenditure  directly from  electricity  revenues with the
exception of the minor amount  related to Bewag's  usage.  In the previous year,
the  electricity  tax expenditure was still fully reported under Other operating
expenses.

DM 2,492.3 million of total adjusted electricity revenues are generated by sales
to our Berlin customers.  This represents a 14.8 per cent decline over last year
although KWh sales in this customer  segment have shown a moderate 0.6 percent
increase.  Most of this  decline  is due to  price  reductions  to all  customer
groups.  Part of this slump in revenue was  compensated  by the  development  of
business activities outside Berlin.  After monopolies on service territories had
been  removed,  DM 39.9 million  revenues  were,  for the first time,  earned by
supply to non-Berlin  end users.  In addition,  revenues from power  supplies to
resellers  and power traders  reached a volume of DM 43.8 million.  The previous
business year had only seen DM 0.9 million electricity  revenues outside Berlin,
which  resulted  from power sales into the  interconnected  grid.  The remaining
electricity  revenues for the reporting year are composed of DM 39.4 million for
amortization to income of construction cost subsidies received,  DM 14.3 million
of ancillary income (in particular dunning and debt collection charges),  and DM
2.9 million of charges for access to Bewag's  networks by other power suppliers.

The drop in sales  revenues  from heat  supplies  is mainly due to the  distinct
decrease  in heat  volume  sales as a result of  weather  conditions,  while the
connected  capacity remained nearly  unchanged.

Falling revenues from operation and maintenance of  the public lighting  systems
resulted from  reduced  services  being  billed. Inventory  changes  reflect  a
corresponding increase.

(30) Inventory changes and other internally produced and capitalized assets

<TABLE>
<CAPTION>
                                                        1999/00          1998/99          Change
                                                     DM thousand      DM thousand     DM thousand
<S>                                                      <C>               <C>             <C>
Changes in work in progress in public lighting          8,848              -219           9,067
Other internally produced and capitalized assets       34,670            46,297         -11,627
                                                      -------           -------         -------
Total                                                  43,518            46,078          -2,560
                                                      =======           =======         =======
</TABLE>

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)


(31) Other operating income
<TABLE>
<CAPTION>
                                                         1999/00         1998/99           Change
                                                     DM thousand     DM thousand      DM thousand
                          <S>                              <C>            <C>             <C>
Income from release of Special item
  with partial reserve character                      107,083           110,057          -2,974
  for investment bonuses                               43,017            50,593          -7,576

Gains from asset disposals                            171,503            33,811         137,692
Income from change in easement valuation (GBBerG)      24,430                -           24,430
Repairs and similar                                    23,684            26,264          -2,580
Subsidies for modification of Bewag assets             19,685            27,920          -8,235
Income from release of provisions                      18,533            10,348           8,185
Rentals                                                11,054            10,551             503
Inventory changes and internally produced and
  capitalized assets in ancillary business             10,635           -12,590          23,225
Adjustments from insurers and damages                  10,336            24,432         -14,096
Revenues from non-operating sales                       8,715             4,792           3,923
Income from reversal of value adjustments
  for inventories                                           -            12,963         -12,963
Sundry operating income                                54,386            62,755         - 8,369
                                                      -------           -------         -------
Total                                                 503,061           361,896         141,165
                                                      =======           =======         =======
</TABLE>

The income from the release of special items with partial  reserve  character is
attributable   to  the  release  of  DM  48.4  million  due  to  additional  tax
depreciation  made in earlier years under Section 14 of the Berlin Promotion Act
(BerlinFG),  of DM 24.7  million  due to special  depreciation  made in previous
years  under  Section 4 of the  Development  Area Act  (FordG),  and of DM 34.0
million  from  transfer  of the reserve  under  Section 6b of the Income Tax Act
(EStG).

Included in the gains from asset disposals,  DM 158.2 million is due to the sale
of the former  Bewag  headquarters  property in the year under  review.

Since the  practice of  accounting  for  easements  according to GBBerG has been
changed,  the previous years'  amortization of prepaid  interest  expense in the
amount of DM 77.3 million was reversed.  The accumulated linear  depreciation of
the higher easement amount over a tax-law based service life of 17 years totaled
only DM 52.9 million. This results in the reported balance of DM 24.4 million.

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                Notes to the Financial Statements - (Continued)
                                  (Unaudited)

(32) Cost of materials
<TABLE>
<CAPTION>
                                                                     1999/00       1998/99        Change
                                                                 DM thousand   DM thousand   DM thousand

<S>                                                                    <C>            <C>            <C>
Cost of raw materials and supplies, and of purchased materials     817,947        864,368       -46,421
of which - fuel                                                   (432,050)      (483,469)     (-51,419)
         - power incl. grid use charges                           (291,747)      (289,956)       (1,791)

Cost of purchased services                                         145,362        213,667       -68,305
                                                                  --------      ---------      --------
Total                                                              963,309      1,078,035      -114,726
                                                                  ========      =========      ========
</TABLE>
The  reduction  in  fuel  costs  is  mainly  attributable  to  reduced  in-house
generation  and lower  prices for  natural gas and coal in the  reporting  year.

Although  purchased  electricity  volumes  increased by a considerable  43.6 per
cent, power purchasing costs are nearly consistent with last year's number. Most
of this is due to lower  purchasing  prices and a higher share of low-price spot
buying.  On the other hand,  the  obligation  to buy  renewable  resources-based
energy at clearly  above-market rates resulting from the new law,  caused a DM
18.3 million charge. The decrease in Cost of purchased services is mainly due to
fallen levels of repairs by outside  contractors in generation and distribution,
and to  further  savings  in  maintenance.  It also  reflects  increased  use of
in-house staff on so-called insourcing programs.


(33) Personnel expenses
<TABLE>
<CAPTION>
                                                   1999/00           1998/99          Change
                                                 DM thousand       DM thousand     DM thousand

<S>                                                     <C>              <C>             <C>
Wages and salaries                                  701,500          902,414        -200,914
Social security and other pension costs,            203,043          294,340         -91,297
of which in respect of retirement pensions          (76,213)        (131,592)       (-55,379)
                                                    -------        ---------       ---------
Total                                               904,543        1,196,754        -292,211
                                                    =======        =========       =========
</TABLE>
The  large  decrease  in  wages &  salaries  and  social  security  costs is due
primarily to the overall  headcount  reduction of 1,269 employees.  In addition,
last year's amount  contains early and  semi-retirement  expenses which are this
year shown in the  extraordinary  result.

The  main  reason for  declining  pension costs  is  a lower  level  of  pension
accruals.  This is due to last year's increase of  pensions  and  the fact  that
pension  costs  had included provisions for compensation payable under the early
retirement program in 1998/99,  while these amounts are this year reported under
the  extraordinary  result.  Allocations to pension provisions include a further
DM 12.6 million to gain conformity with the 1998 Heubeck  guidelines.
Personnel expenses  which are directly linked with Bewag's restructuring program
are part of the extraordinary result.

(34) Depreciation
Depreciation of Intangible assets and Property,  plant and equipment can be seen
in the  "Movements  in  fixed  assets"  schedule.  It  includes  DM 6.3  million
nonscheduled  depreciation  on  Property,  plant and  equipment.  This item also
contains DM 4.1 million in depreciation on the Special loss account, and DM 34.0
million in depreciation from the transfer of the Reserve under Section 6b of the
Income Tax Act (EStG).

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                 Notes to the Financial Statements - (Continued)
                                  (Unaudited)

(35) Other operating expenses
<TABLE>
<CAPTION>
                                                                1999/00          1998/99         Change
                                                             DM thousand      DM thousand    DM thousand
<S>                                                                  <C>            <C>             <C>
Allocation to special items with partial reserve character       11,322         149,869        -138,547
Franchise fee                                                   231,961         210,311          21,650
Outside services admin & sales                                  157,154         155,386           1,768
Professional fees                                                46,783          22,473          24,310
Rentals                                                          35,094          35,354            -260
Depreciation on receivables and other assets                     31,132          19,279          11,853
Losses from disposal of assets                                   29,582          11,847          17,735
Advertising                                                      21,366          14,637           6,729
Purchase of materials admin & sales, and office supplies         20,517          20,948            -431
Expenses of other periods in heat billing                        19,497          10,254           9,243
Insurance premiums                                               16,651          21,200          -4,549
Postage, freights out etc.                                       11,049          10,607             442
Membership and other fees                                         9,549           7,785           1,764
Other taxes                                                       8,568           9,939          -1,371
Release of the prepaid expenses item for easements                    -          22,901         -22,901
Sundry operating expenses                                        50,459          66,055         -15,596
                                                               --------         -------        --------
Total                                                           700,684         788,845         -88,161
                                                               ========         =======        ========
</TABLE>

The Allocation to special items with partial  reserve  character  consists in an
allocation to the Reserve under Section 6b of the Income Tax Act (EStG).

Most of the increase in the  Franchise  fee is based on the increase  stipulated
in the franchise agreement with the state of  Berlin,  which  came  into  effect
on  1  January  2000.

Purchased  services for the administration and sales departments include  DM 9.9
million  of  repairs  by  outside  contractors. Other  purchased services mainly
relate to information processing (DM 52.4 million), maintenance  works  (DM 33.5
million)  the  bulk  of  which,  DM 24.7 million, was spent on refurbishing  the
buildings  which are  designated as  historically  significant where  the former
company headquarters was located (the "Shell-Haus"),  conversion works  (DM 15.3
million) and dismantling works (DM 6.9 million).

The majority of Professional  fees is related to  consultancy  services  for the
Target  Costing  Project, development of  new sales strategies, establishment of
a call center and  several IT projects.

Most of  the  rise  in Depreciation on receivables and other assets reflects the
higher level of risks in a competitive environment.

The increase in Losses from asset  disposals is mainly due to shift of title for
hardware and software to BerlinDat GmbH, Berlin, when the Information Processing
Center was outsourced  to this company.

The  Expenses of  other  periods in  heat  billing have primarily been caused by
retroactive price reductions.

To improve  transparency of the company's income  position,  the electricity tax
that had  previously  been  reported  under  this  item,  has now been  directly
deducted from electricity  revenues,  except for the share due on Bewag's usage.
Electricity  taxes  on  Bewag's  usage  are  reported  under  other  taxes.  The
previous-year figure has been adjusted accordingly.

                                     <PAGE>
                                    Bewag AG
                             Business Year 1999/2000
                Notes to the Financial Statements - (Continued)
                                   (Unaudited)

(36) Income from financial assets
<TABLE>
<CAPTION>

                                            1999/00         1998/99          Change
                                        DM thousand     DM thousand     DM thousand

<S>                                          <C>             <C>             <C>
Income from investments,                   10,625          9,604           1,021
 of which from subsidiaries               (10,611)        (3,489)         (7,122)
Income from other securities and
 from lending of financial assets           2,765          2,405             360
 of which from subsidiaries                (2,518)        (1,535)           (983)

Depreciation on financial assets and
 marketable securities                       -120        -24,572          24,452
Expenses for losses transferred              -514           -679             165
                                           ------        -------         -------
Total                                      12,756        -13,242          25,998
                                           ======        =======         =======
</TABLE>

Income from  investments  consists largely of the 1999 dividends and corporation
tax credits  received from  BerlinDat  GmbH,  Berlin,  and the district  heating
subsidiary  Fernheizwerk  Neukolln AG, Berlin.  The Income from other securities
and lending of financial  assets mostly stems from loans to the power  equipment
testing  facility IPH Institut  "Pruffeld fur elektrische  Hochleistungstechnik"
GmbH,  Berlin,  to EAB  Fernwarme,  Berlin,  and the  landfill  gas use  company
"DEPOGAS-Gesellschaft  zur Gewinnung und Verwertung von  Deponiegasen  mbH". The
Expenses  for losses  transferred  result  entirely  from the loss  incurred  by
"DEPOGAS-Gesellschaft  zur Gewinnung und Verwertung von Deponiegasen mbH" in the
1999 business year.

(37) Net interest income
<TABLE>
<CAPTION>                              1999/00       1998/99         Change
                                    DM thousand    DM thousand    DM thousand

<S>                                      <C>             <C>            <C>
Other interest and similar income     10,502          18,912        -8,410
 of which from subsidiaries               (-)           (449)        (-449)
Interest and similar expenses        -32,927         -48,116        15,189
                                    --------        --------       -------
Total                                -22,425         -29,204         6,779
                                    ========        ========       =======
</TABLE>

The  reduction in Other  interest and similar  income is mainly due to the lower
average level of financial investments.

The decline in Interest and similar  expenses is largely the result of a reduced
average loan portfolio.



<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                           Balance Sheets by activity
                                  (Unaudited)
(38) Extraordinary result
<TABLE>
<CAPTION>                                                      1999/00       1998/99         Change
                                                             DM thousand   DM thousand    DM thousand

<S>                                                                <C>             <C>           <C>
Extraordinary income                                           367,376              -        367,376
of which extraordinary income from:
  Release of special items with partial reserve character     (355,547)            (-)      (355,547)
  Release of provisions for anniversary payments               (11,829)            (-)       (11,829)
Extraordinary expenses                                        -705,696             (-)      -705,696
of which extraordinary expenses for
  Redundancy payments                                        (-395,693)            (-)     (-395,693)
  Early retirement                                           (-298,006)            (-)     (-298,006)
  Semi-retirement                                             (-11,997)            (-)      (-11,997)
                                                            ----------          -----      ---------
Total                                                         -338,320              -       -338,320
                                                            ==========          =====      =========
</TABLE>


On 23 July 1999, Bewag concluded a Collective  Consolidation  Agreement with the
unions that provides for socially  acceptable job reduction  from  approximately
8,500 to  between  4,500 and 4,700  full-time  jobs by 2002 at the  latest.  The
Agreement became effective on 1 August 1999. The magnitude of this job reduction
makes it a one-time  measure  going  beyond  ordinary  business  activities.  We
therefore  report all income and  expenses  resulting  from these  measure in an
extraordinary  result. Under Extraordinary  income, DM 99.2 million in premature
releases  of  Special  items  with  partial  reserve   character  for  increased
depreciation  under Section 14 of the Berlin  Promotion Act  (BerlinFG),  and DM
256.3 million in special  depreciation  under Section 4 of the Development  Area
Act (FordG) are reported,  as this measure serves exclusively to absorb the high
charges from the staff reduction  program.  The reversal of accrued  anniversary
payments  relates to those  employees who left the company under the  Collective
Consolidation Agreement.

(39) Taxes on Income
<TABLE>
<CAPTION>
                                   1999/00         1998/99          Change
                               DM thousand      DM thousand     DM thousand

<S>                                   <C>             <C>              <C>
Corporate tax                     111,869         110,000            1,869
Solidarity surcharge                5,976           5,822              154
Trade tax on earnings              62,374          72,256           -9,882
                                  -------         -------          -------
Total                             180,219         188,078           -7,859
                                  =======         =======          =======
</TABLE>

The decrease in Trade taxes on earnings is attributable to a lower tax base as a
result of declining net income.  As the  extraordinary  result is negative,  tax
expenses relate exclusively to the result of ordinary  activities.



<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                           Balance Sheets by activity
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                             Generation and        Generation and
                                                            other electricity     other electricity
                                                               activities            activities
                                                                1999/00                1998/99
                                                               DM thousand           DM thousand
Assets
<S>                                                                  <C>                    <C>
Fixed assets
Intangible Assets                                                  4,545                  5,928
Property, plant and equipment                                  2,137,329              2,385,700 (4)
Financial assets                                                       -                      -
                                                               ---------              ---------
                                                               2,141,874              2,391,628
Current assets
Inventories                                                      115,657                126,857 (3)
Accounts receivable and other assets
  Trade accounts receivable                                      554,977                412,476
  Receivables from subsidiaries and from affiliates companies        993                  2,101
  Other assets                                                    22,926                 25,937
Securities                                                             -                      -
Checks, cash on hand and on deposit with
Deutsche Bundesbank and Postbank,
Cash in other bank accounts                                            -                      -
                                                                --------               --------
                                                                 694,553                567,371
Prepaid expenses                                                   1,188                  5,112
Special loss account                                              69,899                 30,777 (4)
                                                               ---------              ---------
                                                               2,907,514              2,994,888
                                                               =========              =========

Stockholder's equity and liabilities

Equity
Capital stock and retained earnings                            1,070,785              1,070,785 (4)
Balance of capital netting                                       395,249                140,228 (3)
Net income available for distribution                             45,199                129,365
                                                               ---------              ---------
                                                               1,511,233              1,340,378

Special item with partial reserve character                      404,783                633,327
Special item for investment bonuses                              205,597                237,304
Construction cost subsidies                                            -                     -

Provisions
 Provisions for pensions and other employee benefits             206,514                190,956
 Provisions for taxes                                             32,490                      -
 Other provisions                                                342,096                312,507 (4)
                                                                --------                -------
                                                                 581,100                503,463

Liabilities
Liabilities to banks                                                  -                      -
Advance payments received                                         68,447                 49,070
Trade accounts payable                                           107,280                192,388
Liabilities to subsidiaries and to affiliated companies            1,704                  5,317
Other liabilities                                                 27,370                 33,550
                                                               ---------              ---------
                                                                 204,801                280,325
Deferred Income                                                        -                     91
                                                               ---------              ---------
                                                               2,907,514              2,994,888
                                                               =========              =========
</TABLE>
(1) Including DM 784,104 thousand in transfers
(2) Including DM  62,830 thousand in transfers
(3) Reclassification of Raw materials and supplies
     from Generation and other electricity activities to
     Non-electricity activities DM 10,787 thousand
(4) After adjustment according to Section 36 DMBilG

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                     Balance Sheets by activity - (Continued)
                                  (Unaudited)
<TABLE>
<CAPTION>

Electricity      Electricity      Non-electricity     Non-electricity
networks         networks         activities          activities           Total                Total
1999/00          1998/99          1999/00             1998/99              1999/00              1998/99
DM thousand      DM thousand      DM thousand         DM thousand          DM thousand          DM thousand


     <S>                  <C>              <C>               <C>               <C>                  <C>
   312,216           248,501           223,634          141,731              540,395              396,160
 2,686,282         2,901,179 (4)     1,590,707        1,530,486 (4)        6,414,318            6,817,365 (4)
        -                 -          1,112,451          848,312            1,112,451              848,312
 ---------         ---------         ---------        ---------            ---------            ---------
 2,998,498(1)      3,149,680         2,926,792        2,520,529            8,067,164            8,061,837

    29,152            23,514            11,838           17,501 (3)          156,647              167,872

     1,218             1,997            68,907          107,643              625,102              522,116
        68                 6            32,508            5,523               33,569                7,630
    28,330            27,759           231,484           37,340              282,740               91,036
        -                 -                 -           184,295                   -               184,295


        -                 -             23,634          277,980               23,634              277,980
 ---------         ---------         ---------        ---------            ---------           ----------
    58,768            53,276           368,371          630,282            1,121,692            1,250,929
       896            84,982             2,174           95,121                4,258              185,215
   134,228           165,677 (4)       237,651          249,403 (4)          441,778              445,857 (4)
 ---------         ---------         ---------        ---------            ---------           ----------
 3,192,390         3,453,615         3,534,988        3,495,335            9,634,892            9,943,838
 =========         =========         =========        =========            =========           ==========




 1,175,699         1,175,699 (4)     1,301,872        1,301,872 (4)        3,548,356            3,548,356 (4)
      -242           261,652          -395,007         -401,880 (3)               -                     -
   114,140            63,717            91,541           53,318              250,880              246,400
 ---------         ---------         ---------        ---------            ---------            ---------
 1,289,597         1,501,068           998,406          953,310            3,799,236            3,794,756

   590,914 (2)       769,472           437,338          481,542            1,433,035            1,884,341
    51,528            54,677            86,404           94,565              343,529              386,546
   458,919           465,486           226,832          232,225              685,751              697,711


   129,971            99,694           179,301          173,559              515,786              464,209
         -                -             54,963          189,882               87,453              189,882
   615,513           516,880(4)        822,648          791,999(4)         1,780,257            1,621,386 (4)
 ---------         ---------         ---------        ---------            ---------           ----------
   745,484           616,574         1,056,912        1,155,440            2,383,496            2,275,477


        -                 -            499,777          381,160              499,777              381,160
    38,187            27,125             3,262            1,982              109,896               78,177
    11,798            12,645            21,085           21,713              140,163              226,746
        42               375            28,675              970               30,421                6,662
     5,921             6,187           161,430          160,929              194,721              200,666
  --------          --------         ---------        ---------            ---------           ----------
    55,948            46,332           714,229          566,754              974,978              893,411
       -                   6            14,867           11,499               14,867               11,596
 ---------         ---------         ---------        ---------            ---------            ---------
 3,192,390         3,453,615         3,534,988        3,495,335            9,634,892            9,943,838
==========         =========         =========        =========            =========            =========
</TABLE>


<PAGE>

                                    Bewag AG
                            Business Year 1999/2000
                        Statements of Income by Activity
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                         Generation and       Generation and
                                                         other electricity    other electricity
                                                         activities           activities
                                                         1999/00              1998/99
                                                         DM thousand          DM thousand

<S>                                                             <C>                  <C>
Sales revenues                                            2,590,091 (1)        2,933,352
Inventory changes and other internally produced
 and capitalized assets                                       2,825                2,903
Other operating income                                      230,271              143,113
Income resulting from netting with other activities         896,454              585,967
Cost of materials                                          -810,910            - 914,724
Personnel expenses                                         -362,166             -490,116
Depreciation                                               -234,770             -314,687
Other operating expenses                                   -114,272             -109,738
Expenses resulting from netting with other activities    -2,170,296           -1,577,506
Income from financial assets                                     -                     -
Net interest income                                          -1,377                  914
                                                         ----------           ----------
Result of ordinary activities                                25,850              259,478
Extraordinary result                                         53,590                    -
Taxes                                                       -34,241             -100,607
                                                         ----------           ----------
Net income for the year                                      45,199              158,871
Allocations to other retained earnings                            -              -29,506
                                                         ----------           ----------
Net income available for distribution                        45,199              129,365
                                                         ==========           ==========

</TABLE>

(1) Reconciliation  with electricity sales revenues
     DM 2,590,091 thousand Sales revenues Generation
                  and other electricity activities
       +DM 39,445 thousand Construction cost subsidies
                  (included in sales revenues Electricity networks)
        +DM 2,880 thousand income from  third-party  grid use (included
                  in Sales revenues Electricity networks)
          +DM 181 thousand other revenues (Included in Sales
                  revenues Electricity networks)
      --------------------------------------------------------------
     DM 2,632,597 thousand  Electricity  sales  revenues

(2) Including DM 23,499  thousand for public lighting
(3) Including DM 1,006,875 thousand in grid use charges
     from internal transfer pricing
(4) Including DM 48,457 thousand in transfers


<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                Statements of Income by Activity - (Continued)
                                  (Unaudited)
<TABLE>
<CAPTION>

Electricity       Electricity      Non-electricity   Non-electricity
Networks          networks         activities        activities            Total            Total
1999/00           1998/99          1999/00           1998/99              1999/00          1998/99
DM thousand       DM thousand      DM thousand       DM thousand         DM thousand     DM thousand
      <S>            <C>               <C>                 <C>                <C>              <C>
   66,005 (2)       70,640           770,811            850,638          3,426,907        3,854,630

   25,549           29,902            15,144             13,273             43,518           46,078
   63,644           88,970           209,146            129,813            503,061          361,896
1,429,061 (3)    1,160,979         1,312,461            549,185          3,637,976        2,296,131
  -80,983          -85,132           -71,416            -78,179           -963,309       -1,078,035
 -227,932         -260,191          -314,445           -446,447           -904,543       -1,196,754
 -249,735 (4)     -197,640          -141,357           -159,119           -625,862         -671,446
 -287,685         -371,396          -298,727           -307,711           -700,684         -788,845
 -698,268         -313,333          -769,412           -405,292         -3,637,976       -2,296,131
      -                 -             12,756            -13,242             12,756          -13,242
       96              -11           -21,144            -30,107            -22,425          -29,204
---------        ---------        ----------          ---------         ----------       ----------
   39,752          122,788           703,817            102,812            769,419          485,078
  155,487               -           -547,397                  -           -338,320                -
  -81,099          -47,608           -64,879            -39,863           -180,219         -188,078
---------        ---------        ----------          ---------         ----------       ----------
  114,140           75,180            91,541             62,949            250,880          297,000
       -           -11,463                 -             -9,631                 -           -50,600
---------        ---------        ----------          ---------         ----------       ----------
  114,140           63,717            91,541             53,318            250,880          246,400
=========        =========        ==========          =========         ==========       ==========

</TABLE>

<PAGE>

                                    Bewag AG
                            Business Year 1999/2000
                                   (Unaudited)

Notes to balance sheets / income statements by activity

The provisions  under Section 9 of the Energy Industry Act (EnWG) stipulate the
obligation  to  apply a  so-called  "unbundling"  in  accounting  of  integrated
electricity  supply  companies.  This means that for  accounting  purposes,  the
activities of the company must be separated into  generation,  transmission  and
distribution,  and non-electricity  activities.

For bookkeeping purposes, Bewag has based its unbundling concept on the
following profit-center structure:

o    Our operational business units are centers for Sales and Electricity
     Trading, Customer Service,  Networks,  Generation, and Heating. On a higher
     level,  there are central  functions with  responsibility  for tasks in the
     field of services,  and in the field of corporate  management  and control.
     Valuation  of  internally  rendered  services  is based on  close-to-market
     prices.

o    The centers for  Generation,  Sales and Electricity  Trading,  and Customer
     Service   constitute  the  activity   "Generation  and  other   electricity
     activities."

o    The  "Electricity  networks"  activity  consists  of the  transmission  and
     distribution  activities  of the  Networks  Center,  which  is  essentially
     responsible for transportation.  The distinction  between  transmission and
     distribution  is made  at the 110  kilovolt  level.  On the  basis  of the
     so-called  "forwarder model", the Networks Center renders only a forwarding
     service rather than being the buyer of the power produced by the Generation
     Center.

o    Under  Non-electricity  activities,  the central  functions and the Heating
     Center are combined.  Management  functions such as controlling,  financial
     planning  and  accounting  are based on the  concept of a notional  holding
     company.

Balance sheet and statement of income items are normally directly
related  to  the  respective  activities.   However,  in  cases  where  the
connection to individual  activities is only  indirect,  or where a further
splitting of accounts would have been overly  complicated,  allocation to a
particular  item has been  based on  appropriate  keys.  The  result of the
notional holding,  which mostly consists of expenses,  is fully charged out
to the various operational units.

The starting  balance of  stockholder's  equity has been  distributed  among the
activities  proportionately  to balance  sheet  totals.  This  ensures  that all
functions  have the same equity ratio.  We have not shown the movements in fixed
assets for  individual  activities.  Movements  in technical  assets  correspond
largely to the asset movements of the overall company

<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                               Major Transactions
                                  (Unaudited)

Major transactions

Under  Section  9  Sub-section  4 of  the  Energy  Industry  Act  (EnWG),  major
transactions with subsidiaries of affiliated companies as well as with companies
owned by the same stockholders must be reported.  In the course of the 1999/00
business year, Bewag conducted major transactions on the basis of the following
contracts with businesses under this provision:

o    Contract  dated 23 May  1986  and 25 November  1988, with  GASAG  Berliner
     Gaswerke AG, Berlin and Ruhrgas  Aktiengesellschaft,  Essen, on purchase of
     natural gas for the Lichterfelde combined heat and power plant;

o    Contract dated 1 October 1991 with PreussenElektra AG, Hanover,  and VEAG
     Vereinigte Energiewerke AG, Berlin,  on operation,  maintenance and use of
     the Helmstedt-Wolmirstedt-Berlin 380-kilovolt double line.

o    Contract dated 1 October 1991 with PreussenElektra AG, Hanover, on exchange
     of electricity effective on 7 December 1994.

o    Contract dated 30 March 1995 with VEAG  Vereinigte Energiewerke AG, Berlin,
     on  cooperation  in the  field  of  electricity  operations  and  including
     provisions regarding cooperation in operating their high-voltage networks.

o    Contract  dated 23 June 1995  with  GASAG  Berliner  Gaswerke  AG,  Berlin,
     Verbundnetz Gas AG,  Leipzig,  Ruhrgas AG, Essen,  and Brigitta Erdgas und
     Erdol GmbH, Hanover, on delivery of natural gas for the Lichtenberg, Mitte
     and Klingenberg combined  heat  and  power  plants  and,  under  certain
     conditions, also for the Buch plant.

o    Contract dated 14 July /4 September 1998 with GASAG Berliner Gaswerke AG,
     Berlin,  and Ruhrgas AG, Essen,  on deliveries of gas for the  Lichterfelde
     combined heat and power plant.

o    Contract dated 1 February/5 March 1999 with GASAG  Berliner  Gaswerke AG,
     Berlin,  on deliveries of gas for small-sized heat plants between 1 January
     1999 and 1 January 2004.

PreussenElektra  AG, Hanover,  because of the interest it held in Bewag together
with Bayernwerk AG, Munich, and Southern Energy Holding Beteiligungsgesellschaft
mbH, Berlin,  was a related company.  GASAG Berliner Gaswerke AG, Berlin, is one
of Bewag's affiliated companies, for Bewag held 31.58 per cent of this company's
capital stock at balance sheet date. Finally, both PreussenElektra AG, Hanover,
and  Bayernwerk  AG, Munich,  owned more than 20 per cent of the capital  stock
of VEAG Vereinigte  Energiewerke AG, Berlin,  during the reporting  period. This
means that the same stockholders held significant  amounts of stock in both this
company  and  Bewag.  Otherwise,  applying  Section  286  Sub-section  3 of  the
Commercial Code (HGB) correspondingly,  we are not reporting any further details
of the existing business relationships.


<PAGE>
                                    Bewag AG
                            Business Year 1999/2000
                            Supplementary information
                                  (Unaudited)

Effects of changes in valuation and utilization of tax regulations in income.

The changed  practice of accounting for easements  according to Section 9
GBBerG has resulted in an additional income of DM 24.4 million.  However,
this measure has no effect on the net income for the year as the release of
the Special item with partial  reserve  character  was  correspondingly  lower.

Due to the balance of allocations  to, and releases of, special items with
partial  reserve  character and its effect on tax  expenditure  and other
expenses  dependent on profits or dividends,  the reported Net income for
the year is approximately DM 221 million higher than the amount which
otherwise would have had to be reported.


Other financial commitments

Future  capital  expenditure  already  approved by the  Supervisory  Board,  and
maintenance  work  due  in  coming  years,  represent  purchase  commitments  of
approximately  DM 222 million  (previous year: DM 515 million).  The majority of
this amount is earmarked for capital expenditure on rehabilitation and extension
of our  electricity and heat production and  distribution  facilities.  The cash
value of  payment  obligations  arising  from  long-term  tenancies  and  rental
agreements  is  approximately  DM 338 million  (previous  year: DM 351 million).

There are  approximately DM 43 million  (previous year: DM 303 million) in other
discounted financial commitments, including approximately DM 15 million
(previous year: DM 76 million) relating to subsidiaries. Fuel and power supplies
are secured by long-term contracts.

<PAGE>
                                    Bewag AG
                             Business Year 1999/2000
                                   (Unaudited)

Shareholdings under Section 285 No. 11 of the Commercial Code (HGB)
<TABLE>
<CAPTION>

Name and location of  the  company                       Share in       Equity on      1999 result
                                                          Capital     31 Dec. 1999
                                                             %         DM thousand     DM thousand

DEPOGAS-Geselischaft zur Gewinnung und Verwertung
<S>                                                          <C>             <C>              <C>
  von Deponiegasen mbH, Berlin (1)                         100.00             0                0
EAB Fernwarme GmbH, Berlin                                 100.00             0           -3,461
Bewag Immobilienmanagement GmbH, Berlin                    100.00           577              229
IPH lnstitut "Pruffeld fur elektrische
  Hochleistungstechik" GmbH, Berlin                        100.00        13,936           -1,169
Bewag Energiemanagement GmbH, Berlin (2)                   100.00           672              179
FHW Fernheizwerk Neukolln Aktiengesellschaft, Berlin        75.22        27,326            4,210
BerlinDat Gesellschaft fur Informationsverarbeitung
  und Systemtechnik mbH, Berlin (3)                         74.99         6,525            6,836
EAVV Energie Assekuranz Versicherungs
  Vermittlungs GmbH, Berlin                                 60.00           734              634
EnergieSudwest AG, Landau                                   51.00        43,302            2,803
ARGE Energiesparpartnerschaft Bewag/Landis &
  Gyr GbR, Berlin (2)                                       50.00           895           -1,212
best energy GmbH, Berlin (4)                                50.00        39,111               -6
Berliner Energieagentur GmbH, Berlin                        33.00         2,746             -279
GASAG Berliner Gaswerke AG, Berlin                          31.58       761,854          -87,986
EBH Energie-Beteiligungsholding GmbH, Dortmund              25.00       546,933           -2,749
Abwicklungsgesellschaft EUS
Energie und Umwelt Service GmbH, Berlin                     25.00             -                -
</TABLE>

(1) A profit  and loss  transfer  agreement  with the  company  is in place
(2) Financial  statements of 1998
(3) The business  year ended on 30 September  1999
(4) Abridged business year from 14 December 1999
     to 31 December 1999.

Contingencies
Of the liabilities on guaranties, which total DM 42.0 million (previous year: DM
24.8 million), DM 23.7 million are with BerlinDat GmbH, Berlin, DM 14 million
for  loans of EAB  Fernwarme  GmbH,  Berlin,  DM 2.1  million  for loans of IPH
Institut  "Pruffeld fur elektrische  Hochleistungstechnik"  GmbH, Berlin, DM 1.2
million for loans of Bewag  Energiemanagement  GmbH,  Berlin, and DM 1.0 million
for loans of DEPOGAS-Gesellschaft zur Gewinnung und Verwertung von Deponiegasen
mbH, Berlin. In addition, there are letters of comfort worth DM 17.0 million to
subsidiaries (previous year: DM 30.2 million to subsidiaries).

Investment Notification
In accordance with Section 20 Sub-section 1 of the German Stock Corporation Act,
Bewag was  notified  by the  Southern  Company,  Atlanta,  on behalf of Southern
Energy  Holding  Beteiligungsgesellschaft  mbH,  Berlin,  by letter of 6 October
1997, and by Bayernwerk AG, Munich,  by letter of 13 January 1998,  that each of
these two companies  owns more than 25 per cent of Bewag stock.  By letter of 21
July 2000, E.ON Energie AG, Munich,  announced to us the merger of Bayernwerk AG
with PreussenElektra AG, now trading under the name of E.ON Energie AG.

Average staff number in the business year
<TABLE>
<CAPTION>
Employees (excluding apprentices)            1999/00      1998/99        Change

<S>                                             <C>           <C>          <C>
Craftsmen                                     2,607         3,306         -699
Technical staff                               2,877         3,196         -319
Commercial staff                              1,934         2,185         -251
                                              -----         -----       ------
Total                                         7,418         8,687       -1,269
                                              =====         =====       ======
</TABLE>

<PAGE>

                                    Bewag AG
                             Business Year 1999/2000
                                   (Unaudited)

Corporate Governance
Members of Bewag's Supervisory Board and Management Board are listed on Appendix
1 to these notes. For the 1999/2000 business year, the total remuneration of the
Management  Board was DM  4,308,194  (previous  year:  DM  4,268,748),  and the
remuneration for Supervisory Board members totaled DM 520,000 (previous year: DM
514,000).  A total DM 5,104,748 (previous year: DM 2,638,693) was paid to former
members of the Management Board and their surviving families;  a total DM 25,987
thousand (previous  year: DM 26,151  thousand)  was accrued as  provisions  for
pension liabilities to this group of persons.

Distribution of the available net income
We propose that the available net income of DM 250,880,000 be  appropriated  to
paying a dividend on the capital stock of EUR 582,400,000, or DM 1,139,075,392
respectively.

Berlin, 22 August 2000
Bewag Aktiengesellschaft

/s/ Prof Dr Dietmar Winje Vorsitzender                /s/  Dr Bernd Balzereit
Prof Dietmar Winje Vorsitzender                       Dr Bernd Balzereit

/s/ Hans-Jurgen Cramer                                /s/  Anders Hedenstedt
Hans-Jurgen Cramer                                    Anders Hedenstedt


<PAGE>


                                                             Bewag AG
                                                    Business Year 2000 / 1999
                                                    Movements in fixed assets
                                                           (Unaudited)
<TABLE>
<CAPTION>

                                                                         Acquisition or production costs
                                                                                 in DM thousands

                                             At                                   Reclassified                      At
                                        1 July 1999     Additions     Transfers    additions       Disposals  30 June 2000
Intangible assets
<S>                                            <C>           <C>            <C>          <C>           <C>            <C>
Industrial property rights and similar
  rights and assets                        531,961         8,443         17,230     247,984 (2)     31,766        773,752
Payments on account                         20,735         1,483        -17,143           -            188          4,887
                                           552,596         9,926             87     247,984         31,954        778,639
Property, plant and equipment
Real estate, rights equivalent to
  real estate, and buildings including
  buildings on third-party land          3,188,054 (1)    23,298         22,586           -         65,232      3,168,706
Power plant assets                       5,949,402         3,041         16,642           -          5,442      5,963,463
Electricity transmission and
  distribution assets                    5,784,465        34,362 (4)    130,787           -         69,801 (4)  5,879,813
District heating assets                  2,321,362         8,435         36,447           -         11,279      2,354,965
Other fixtures and fittings,
  tools and equipment                      407,832        10,541 (5)     11,866           -         92,082 (5)    338,157
Payments on account and assets
   under construction                      492,561       165,486       -218,235           -         13,061        426,751
                                        18,143,676       245,163            -87           -        256,897     18,131,855
Financial Assets
Shares in subsidiaries                      88,626        22,570          1,000           -              -        112,196
Loans to subsidiaries                       38,000             -         11,993           -            100         49,893
Investments                                766,871       218,824           -995(6)        -            150        984,550
Loans to affiliated companies               13,083            70        -11,993           -            660            500
Other loans                                  3,214        25,712              -           -          2,255         26,671
                                           909,794       267,176              5(6)        -          3,165      1,173,810
                                        ----------      --------       --------    --------       --------     ----------
Fixed assets                            19,606,066       522,265              5(6)  247,984        292,016     20,084,304

</TABLE>


(1) After  adjustment  according  to  Section 36 DMBilG
(2) Changed  valuation practice Section 9 GBBerG
(3) Of which  subsequent  deprecation for easements acc to Section 9 G
      BBerG: DM 52, 947 thousand
(4) Of which minor assets: DM 5,542 thousand
(5) Of which minor assets:  DM 1,241  thousand
(6) Of which book transfer from Current  assets DM 5 thousand

          The accompanying notes are an integral part of these statements.



<PAGE>


                                                         Bewag AG
                                               Business Year 2000 / 1999
                                         Movements in fixed assets - (Continued)
                                                        (Unaudited)
<TABLE>
<CAPTION>
                   Accumulatd depreciation                                                 Net book values
                        in DM thousand                                                      in DM thousand

     At                                                 Reclassified        At            At             At
1 July 1999     Additions     Transfers    Disposals     additions     30 June 2000  30 June 2000   30 June 1999

       <S>           <C>            <C>          <C>           <C>            <C>           <C>             <C>

   156,436       101,144 (3)         -2      19,334              -        238,244        535,508       375,425
         -             -              -           -              -              -          4,887        20,735
   156,436       101,144             -2      19,334              -        238,244        540,395       396,160



 1,112,898 (1)    98,308              -      38,383              -      1,172,823      1,995,883     2,075,156 (1)
 4,957,632       160,755             11       4,937              -      5,113,461        850,002       991,770

 3,483,192       199,153 (4)         -9      64,984 (4)          -      3,617,352      2,262,461     2,301,273
 1,460,237        84,949              -       8,629              -      1,536,557        818,408       861,125

   312,352        30,420 (5)          -      65,428 (5)          -        277,344         60,813        95,480

         -             -              -           -              -              -        426,751       492,561
11,326,311       573,585              2     182,361              -     11,717,537      6,414,318     6,817,365

    31,659             -              -           -            229         31,430         80,766        56,967
    22,000             -              -           -              -         22,000         27,893        16,000
     7,261           120              -           -              -          7,381        977,169       759,610
       500             -              -           -              -            500              -        12,583
        62             -              -          14              -             48         26,623         3,152
    61,482           120              -          14            229         61,359      1,112,451       848,312
----------      --------       --------    --------       --------     ----------     ----------    ----------
11,544,229       674,849              -     201,709            229     12,017,140      8,067,164     8,061,837

</TABLE>


(1) After  adjustment  according  to  Section 36 DMBilG
(2) Changed  valuation practice Section 9 GBBerG
(3) Of which  subsequent  deprecation for easements acc to Section 9 G
      BBerG: DM 52, 947 thousand
(4) Of which minor assets: DM 5,542 thousand
(5) Of which minor assets:  DM 1,241  thousand
(6) Of which book transfer from Current  assets DM 5 thousand

          The accompanying notes are an integral part of these statements.


 <PAGE>
                                    Bewag AG
                              Corporate Governance
                             Business Year 1999/2000
                                   (Unaudited)
                                                                   Appendix 1
Information on corporate governing bodies
All data  provided are relative to the position at 30 June 2000,  or to the date
of resignation  from the  Management or Supervisory  Board of Bewag AG before 30
June 2000, or to the date of appointment to the Management or Supervisory  Board
of Bewag AG after 30 June 2000.

+Membership  on other  Supervisory  Board  established  to comply with statutory
 requirements.

*Membership on similar controling bodies of business enterprises in Germany and
 abroad.
<TABLE>
<CAPTION>             Additional Mandates Carried by
                        Supervisory Board members

     <S>                                     <C>
Barney S. Rush                          Marce Fuller
Chairman                                (since 17 September 1999)
Chief Executive Officer of              President, Chief Executive Officer
Southern Energy-Europe B.V              and Director of Southern Energy Inc.
+GASAG Berliner Gaswerke AG             *Curtiss-Wright Corporation (Director)
*Southern Energy Inc.                   *Mobile Energy Services Holdings,
  (Senior Vice President)                 Inc. (Director)
                                        *Southern Company Services, Inc.
Ernst-Otto Kock                           (Director)
Deputy Chairman of the Public           *Southern Company Energy
Services and Transport Trade Union,       Marketing G.P, L.L.C.
Berlin regional administration, Berlin    (Class A Representative)
+Bankgesellschaft Berlin AG             *Southern Energy Asia-Pacific
                                          Limited (Director)
Sven Bergelin                           *Southern Energy International,
Head of the industrial department         Inc. (Director)
 of the Berlin-Brandenburg              *Southern Energy Netherlands
 administration of the German             Management Company, Inc.(Director)
 Employees' Trade Union                 *Southern Energy North America,
                                          Inc. (Director)
Hans-Jurgen Cranier                     *Southern Energy Resources, Inc.
(resigned on 13 December 1999)            (Director)
General Manager Human Resources         *TenFold Energy, Inc.
+EAB Fernwarme GmbH                       (Director)

Prof Rainer Frank Elsasser              Dr. Manfred Gentz
(resigned on 13 July 2000)              Member of the Management Board of
Member of the Management Board           DaimlerChrysler Aktiengesellschaft
 of Bayernwerk Aktiengesellschaft       +DaimlerChrysler Aerospace AG
+Bayernwerk Konventionelle              +DaimlerChrysier Services
Warmekraftwerke AG, BKW                   (debis) AG
  (Chairman)                            +Deutsche Hypothekenbank
+Bayernwerk Netz GmbH                     Frankfurt-Hamburg AG
+Bayernwerk Wasserkraft AG, BKW         +DWS Deutsche Gesellschaft fur
+BayerischeWasserkraftwerke AG, BAWAG     Wertpapiersparen mbH
+Donaukraftwerk Jochenstein  AG, DKJ    +Hannoversche Lebens-versicherungs AG
+GroBkraftwerk Franken AG, GFA          +Zurich Agrippina Beteiligungs-AG
  (Chairman)                            *Banco Daimler-Benz S.A.
+Isar-Amperwerke AG (Chairman)            (Head of Board)
+Osterreichisch-Bayerische              *DaimlerChrysler Espania Holding
  Kraftwerke  AG, OBK                   *DaimlerChrysler France S.A.S.
+TEAG  Thuringer Energie AG             *DaimlerChrysler Mexiko S.A.
*ReCon GmbH (Chairman)                  *DaimlerChrysler Schweiz Holding AG
*Solar-Wasserstoff-Bayern GmbH, SWB     *DaimlerChrysler Treasury Center
*UET GmbH (Chairman)                      Asia Pte. Ltd.
*Bayernwerk Hungaria Rt                 *DaimlerChrysler United Kingdom
                                          Holding plc
Klaus Forster                           *Elektroholding GmbH
(resigned on 13 July 2000)
Member of the Management Board          Dr Hans-Dieter Harig
 of Bayernwerk Aktiengesellschaft        (resigned on 13 July 2000)
+Energieversorgung                      Chairman of the Management Board
  Oberfranken AG                        of PreussenElektra Aktiengesellschaft
+Isar-Amperwerke AG                     +Avacon AG (Chairman)
+OBAG AG                                +Energie-Aktiengesellschaft
+TEAG Thuringer Energie AG                Mitteldeutschland
 (Chairman)                             +EWE AG
+Uberlandwerk Unterfranken AG           +Gelsenwasser AG (Chairman)
 (Chairman)                             +PreussenElektra Kernkraft GmbH (Chair)
+VEAG Vereinigte Energiewerke AG        +PreussenElektra Kraftwerke GmbH (Chair)
*Bayernwerk Hungaria Rt.                +PreussenElektra Netz GmbH
  (Chairman)                            +Schleswag AG (Chairman)
*Elektrizitatsgesellschaft              +Thuga AG (Chairman)
  Laufenburg AG                         *BKW FMB Energie AG
*Watt AG                                *EZH N.V (Chairman)
                                        *Sydkraft AB (Chairman)
                                        *Uranit GmbH
</TABLE>

 <PAGE>
                                    Bewag AG
                        Corporate Governance - (Continued)
                             Business Year 1999/2000
                                   (Unaudited)
                                                                   Appendix 1
<TABLE>
<CAPTION>              Additional Mandates Carried by
                   Supervisory Board members - (Continued)

     <S>                                     <C>
Bernd Helms                               Rita Kuhner-Przwosnik
Foreman, Bewag                            Manager Internal Communications,
                                            Bewag
Wolf-Dietrich Kunze
(since 13 Decmeber 1999)                  Christian Ratjen
General Manager Heating, Bewag             (since 16 August 2000)
+Fernheizwerk Neukolln AG                 Personally Liable Partner at
                                          Delbruck & Co, Kommandit-gesellschaft
Dr. Otto Majewski                         +Bibliographisches Institut F. A.
Chairman of the Management Board          +Brockhaus AG
 of Bayernwerk Aktiengesellschaft         +INKA - Internationale
+Bayrische Versicherungsbank AG             Kapitalanlage-Gesellschaft mbH
+Bilfinger + Berger Bauaktiengesellschaft +Sud-Chemie AG
+Contigas Deutsche Energie-AG (Chairman)  +Delbruck Asset Management GmbH
+Isar-Amperwerke AG (Chairman)            *Maerki Baumann AG
+OBAG AG (Chairman)                       *Pfeifer & Langen KG
+Thilga AG
+ThyssenKrupp Materials & Services GmbH   Dr. Klaus Rauscher
+VEAGVereinigteEnergiewerke AG             (since 16 August 2000)
+VEW AG                                   Member of the Management Board
+VEW Energie AG                            of Westdeutsche Landesbank
*BKW FMB Energie AG                       +Deutsche Post AG
*Watt AG                                  +Frankisches Uberlandwerk AG
                                         +HEW Hamburgische Electricitats-WerkeAG
Carl-Friedrich MeiBner                    +rhenag-RheinischeEnergie
Former member of the Management             Aktiengesellschaft
  Board of Deutsche                       +Thuga Aktiengesellschaft (Vice Chair)
Telekom Aktiengesellschaft                +Thyssen Krupp Industries AG
+NORCOM Technologies AG (Chairman)        +Uberiandwerk Unterfranken AG
+United Internet AG (Chairman)            +VEW AG
                                          +VEW Energie AG
Reinhold Offerman
(resigned on 13 July 2 000)               Karl-Heinz Dieter Regel
Member Of the Management Board            Project engineer, Bewag
 of PreussenElektra Aktiengesellschaft
+Avacon AG                                Gerhard Roggemann
+e.dis Energie Nord AG (Chairman)         (since 16 August 2000)
+Energie-Aktiengesellschaft               Member of the Management Board of
  Mitteldeutschland                         Westdeutsche Landesbank Girozentrale
+EWE AG                                   +AXA Colonia Lebens-versicherung AG
+Lausitzer  Braunkohl AG                  +Deutsche Borse AG
+PreussenElektra Engineering GmbH         +Fresenius AG
+PreussenElektra  Kernkraft GmbH          +Hapag-Lloyd AG
+PreussenElektra Kraftwerke AG, PEK       +Solvay Deutschland GmbH
+PreussenElektra Netz GmbH                +Veba Oel AG
+Schleswag AG                             +WPS Wertpapier Service Bank AG
*Gemeinschaftskraftwerk Kiel GmbH         *AXA Colonia Kapitalanlage-
  (Chairman)                                Gesellschaft mbH
*Kernkraftwerk  Brokdorf  GmbH            *International University Bremen GmbH
*Kernkraftwerk  Brunsbuttel GmbH          *WestKA Westdeutsche Kapitalanlage-
*Kernkraftwerk Krummel GmbH                 gesellschaft mbH (Vice Chairman)
*Kraftwerk EV 3 I/S                       *West Merchant Bank Holdings Ltd.
*Uranit GmbH                                (Chairman)
                                          *WestLB (Schweiz) AG (Chairman)
Richard J. Pershing                       *WestLB International S. A.,
 (resigned on 13 September 1999,            Luxemburg (Chairman)
 re-appointed on 15 September 2000)       *WestLB Research GmbH (Chairman)
Executive Vice President of Southern
 Energy Inc.                              Martin Sattler
*Freeport Power Company Limited           Meter fitter with special
*Empresa E1ectrica del Norte               responsibilities, Bewag
  Grande S.A., Eldenor
  (Primary Director)                      Uwe Scharf
*Mobile Energy Services Holdings, Inc.    Deputy Chairman of the Public
  (Director)                              Services and Transport Trade Union,
*Southern Company Energy Marketing        Berlin regional administration,
  (Class A Represantative)                  Berlin
*Southern Energy Netherlands              +Berlin Brandenburg Flughafen
   Management Company, Inc.                  Holding GmbH
  (Director and Vice President)           +GASAG Berliner Gaswerke AG
*Southern Energy North American
  Generating, Inc. (Director)             Mario Schonian
*Southern Investments UK plc              Senior car mechanic, Bewag
  (Chairman)
</TABLE>

<PAGE>
                                    Bewag AG
                        Corporate Governance - (Continued)
                             Business Year 1999/2000
                                   (Unaudited)
                                                                   Appendix 1
<TABLE>
<CAPTION>              Additional Mandates Carried by
                    Supervisory Board members - (Continued)

     <S>                                                 <C>
Herbert Strobel
Chairman of the Works Council,
  Bewag

Dr Giuseppe Vita
Chairman of the Management Board
  of Schering Aktiengesellschaft, Berlin
+Allianz Lebensversicherungs AG
+Hugo Boss AG (Chairman)
+Continental AG
*Deutsche Bank S.p.A. (Presidente
  del Consiglio di Amministrazione)
*RAS (Riunione Adriatica di Sicurta)
*Sviluppo Italia

                         Additional Mandates Carried by
                            Management Board Members

 Prof. Dr. Dietmar Winje                 Dr Klaus Bechtold
 +Berliner Volksbank AG (Chairman)       (retired on 30 June 2000) Generation
 +GASAG Berliner Gaswerke AG             +Fernheizwerk Neukolln AG
 +Lausitzer Braunkohle AG                +EAB Fernwarme GmbH
 +VEAG Vereinigte Energiewerke AG
 *Partner fur Berlin Gesellschaft        Hans-Jurgen Cramer
   fur Hauptstadt-Marketing mbH          (since 15 December 1999)
                                         Human Resources and Heating
 Dr. Bernd Balzereit
 Finance and Networks                    Anders Hedenstedt
 +BOTAG Bodentreuhand-und Verwaltungs AG (since 13 November 1999)
 +Fernheizwerk Neukolln AG (Vorsitz)     Sales and Customer Service
 +GASAG Berliner Gaswerke AG
 +Landesbank Berlin                      J. Bruce Jones
 +Verlags- und Wirtschaftsgesellschaft   (resigned on 15 October 1999)
   der Elektrizitatswerke mbH, VWEW      Networks and Customer Service
 *Walter de Gruyter GmbH & Co KG
 *Ziehl-Abegg GmbH & Co KG               Dr. Kurt Lange
                                         (resigned on 15 October 1999)
                                         Human Resources and Services

</TABLE>