Annual Report 2007 New prospects in CEE At a glance EUR mn 2007 2006 Δ Sales 20,042 18,970 6% EBIT 2,184 2,061 6% Net income after minorities 1,579 1,383 14% Clean EBIT 2,377 2,257 5% Clean net income after minorities 1,649 1,521 8% Cash flow from operating activities 2,066 2,027 2% Capital expenditure 4,118 2,518 64% EUR Earnings per share 5.29 4.64 14% Clean earnings per share 5.52 5.10 8% Cash flow per share 6.92 6.80 2% Dividend per share 1.25 1.05 19% % Return on average capital employed (ROACE) 16 18 (14)% Return on equity (ROE) 19 20 (4)% Net income after minorities in EUR mn Capital expenditure in EUR mn 1,800 4,500 4,118 1,579 1,600 4,000 1,383 1,400 3,500 1,256 1,200 3,000 2,297 2,518 1,000 2,500 800 2,000 689 1,381 1,439 600 1,500 400 392 1,000 200 500 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 ROACE in % (Target: 13%) Payout ratio (Target: 30%) 25 35 27 20 30 20 18 23 24 16 25 15 21 15 19 12 20 15 10 10 5 5 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Exploration and Production Production in 1,000 boe/d (Target: 500,000 boe/d) Proved reserves in mn boe 500 1,500 1,409 1,365 450 1,289 1,216 1,250 400 338 324 350 321 1,000 300 250 750 200 500 150 125 120 410 100 250 50 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Oil and NGL Gas Oil and NGL Gas Refining and Marketing Marketing market share in % (Target: 20%) Refining sales volumes in mn t 20 20 20 25 23.0 18 22.0 21.4 20 15 14 16.2 12 13.9 15 10 10 5 5 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 thereof Petrom Gas Gas sales in bcm (Target: 20 bcm) Contracted gas storage volume for third parties in bcm 20 2.2 2.01 18 2.0 1.72 1.75 16 1.8 14.1 1.53 13.1 1.6 14 1.45 1.4 12 8.9 1.2 10 8.5 8.4 1.0 8 0.8 6 0.6 4 0.4 2 0.2 0 0.0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 thereof Petrom Contents At a glance 01 Move & More 10 Executive Board 11 Statement of the Chairman of the Executive Board 14 Highlights 2007 16 Company 18 Objectives and strategy 24 Supervisory Board 26 Corporate governance 27 Corporate social responsibility 28 OMV Future Energy Fund 29 Research and development 30 Human resources 31 Health, safety, security and environment 32 Value management 33 OMV shares and bonds 36 Business environment 38 Business segments 40 Exploration and Production 44 Refining and Marketing including petrochemicals 48 Gas 52 Directors' report 68 Consolidated financial statements 70 Auditors' report 71 Consolidated income statement 72 Consolidated balance sheet 74 Changes in stockholders' equity 76 Consolidated cash flow statement 77 Notes 77 Accounting principles and policies 88 Notes to the income statement 93 Notes to the balance sheet 115 Supplementary information on the financial position 127 Segment reporting 130 Other information 139 Supplementary oil an gas disclosures 147 Abbreviations and definitions 148 Five-year summary Contacts OMV Group in figures We get people on the move As an integrated European oil and gas group OMV has become Central Europe's leading oil and gas company over the last 10 years. We get people on the move. OMV explores, discovers and extracts oil and natural gas on five continents. We supply energy and heating as well as day-to-day products and services to millions of people. OMV works energetically to improve people’s mobility and quality of life. We assess the quality of our performance by the success in the market and for our shareholders. We direct our work towards our responsibility to society, the environment and technical progress. We are open-minded and decisive in recognizing and seizing opportunities. In 2007, we have reinforced our commitments: The OMV Driving Values for sustainable growth. Pioneers – Spirit of change for continuous development Professionals – Professional excellence for lasting Partners – Responsible relationships for mutual benefit 2005 2004 2007 2006 Our growth Over the past years, OMV has grown substantially and has developed into an international company operating in 27 countries on five continents. When a company grows as strongly as OMV has done, we have to think about what our driving forces are and what unites us, in the past and in the future. Our success is based on professional and dedicated employees who strive for continuous development. Being aware of our social responsibility we evaluate all options to secure long-term and sustainable value growth for the Group. 2005 2004 Our employees A professional organization was driving the substantial growth of OMV in the past years. Our people make the difference. Continuous learning, high performance and personal commitment are the sources for our competence. We strive to achieve excellence in professional expertise, processes and leadership. We focus on our goals and try to find synergies to achieve a leading position in the market. Our aim is to foster professional development for long-term profitability. 2007 2006 2007 2006 2005 2004 Our success 2007 was the fifth consecutive year of record results for OMV. This success is based on strong earnings growth in all business segments resulting from the consistent implementation of our growth strategy. We perceive ourselves as pioneers: A proactive approach, mobility and openness to change are the basis for our success. Through new ideas, successful technologies and profitable growth we explore the development potential and take courageous decisions to create business opportunities in our selected markets. Our focus is on the combination of economic success with the best energy solutions for today and tomorrow. 2004 2007 2006 2005 Our responsibility The successful implementation of our growth strategy was based on responsible partnerships for the mutual benefit. Fairness, responsibility and respect are the core of our relationships with all our partners such as customers, employees, shareholders, and the society in general. We seek lasting co-operation and gain trust through open communication, reliability and respect between different cultures. Our aim is to create an environment of mutual benefit through social and economic partnerships taking into account the ecological issues of our times. Executive Board From left to right: Helmut Langanger, Werner Auli, Wolfgang Ruttenstorfer, Gerhard Roiss, David C. Davies Wolfgang Ruttenstorfer (*1950) As of January 1, 2002, Chairman and Chief Executive Officer. Mr Ruttenstorfer began his career with OMV after graduating from the Vienna University of Economics and Business Administration in 1976, going on to head the planning and financial control, corporate development and marketing functions, among others. He was a member of the Executive Board from 1992 to 1997. From 1997 to 1999 he was Austria's Deputy Finance Minister. In January 2000, he returned to the OMV Group as Deputy Chief Executive Officer, with responsibility for Finance and the Gas segment. Gerhard Roiss (*1952) As of January 1, 2002, Deputy Chairman; responsible for Refining and Marketing including petrochemicals as well as Chemicals. Mr Roiss’ business education in Vienna, Linz and Stanford (USA) was followed by managerial responsibilities at various companies in the consumer goods industry. In 1990 he joined OMV as head of the Group Marketing department. In the same year he was appointed to the board of PCD Polymere GmbH. In 1997, he was appointed to the OMV Executive Board. Until the end of 2001 he was responsible for Exploration and Production, and for the Plastics operations. Werner Auli (*1960) As of January 1, 2007, member of the Executive Board; responsible for Gas and Power. After graduating from the Technical University in Vienna, Mr Auli started his career with OMV in 1987. From 2002 to 2004 he worked as general manager of the 50% OMV subsidiary EconGas GmbH. In 2004 he became the general manager of OMV Gas GmbH and since 2006 he has been the head of OMV Gas International GmbH. David C. Davies (*1955) As of April 1, 2002, Chief Financial Officer. Mr Davies graduated from the University of Liverpool (UK) in economics in 1978 and began his career as a chartered accountant. He subsequently held positions in international companies in the beverage, food and health industries. Before joining OMV he was finance director of a number of UK companies. Helmut Langanger (*1950) As of January 1, 2002, responsible for Exploration and Production. Mr Langanger complemented his education at the Mining University in Leoben with a degree in economics in Vienna and joined OMV in 1974. He was appointed Senior Vice President for Exploration and Production in 1992. In this position he played a key role in building up the Group's international E&P portfolio. The terms of office of the Board members run until the end of March 2010 (Werner Auli until the end of December 2009). Directorships in companies that do not form part of the OMV Group and in which OMV does not hold equity interests (section 228 (1) Austrian Commercial Code): Ruttenstorfer (member of the Supervisory Board of Wiener Börse AG, Wiener Städtische Wechselseitige Versicherungsanstalt and F. Hoffmann-La Roche AG); Roiss (member of the Supervisory Board of Österreichische Post AG); Langanger (member of the Supervisory Board of Schoeller-Bleckmann Oilfield Equipment AG).